SCI Engineered Materials (SCIA) 10-Q 27 Oct 21 2021 Q3 Quarterly report Financial data

Document And Entity Information

Document And Entity Information - shares	9 Months Ended
	Sep. 30, 2021	Oct. 26, 2021
Document And Entity Information
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Sep. 30, 2021
Entity File Number	0-31641
Entity Registrant Name	SCI ENGINEERED MATERIALS, INC.
Entity Incorporation, State or Country Code	OH
Entity Tax Identification Number	31-1210318
Entity Address, Address Line One	2839 Charter Street
Entity Address, City or Town	Columbus
Entity Address, State or Province	OH
Entity Address, Postal Zip Code	43228
City Area Code	614
Local Phone Number	486-0261
Title of 12(b) Security	Common stock, without par value
Trading Symbol	SCIA
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		4,501,248
Entity Central Index Key	0000830616
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q3
Amendment Flag	false

BALANCE SHEETS

BALANCE SHEETS - USD ($)	Sep. 30, 2021	Dec. 31, 2020
Current Assets
Cash	$ 3,953,385	$ 2,917,551
Accounts receivable Trade, less allowance for doubtful accounts of $15,000	573,316	459,471
Accounts receivable Tax - Employee Retention Credit	184,861	0
Inventories	1,982,028	1,180,359
Prepaid expenses	99,523	131,333
Total current assets	6,793,113	4,688,714
Property and Equipment, at cost
Machinery and equipment	7,926,829	8,280,611
Furniture and fixtures	132,364	132,365
Leasehold improvements	596,867	592,899
Construction in progress	229,845	3,904
Property, Plant and Equipment, Gross	8,885,905	9,009,779
Less accumulated depreciation	(6,716,883)	(7,121,647)
Property, Plant and Equipment, Net	2,169,022	1,888,132
Right of use asset, net	295,640	357,396
Deferred tax asset	703,132	1,019,317
Other assets	90,656	96,623
Total other assets	1,089,428	1,473,336
TOTAL ASSETS	10,051,563	8,050,182
Current Liabilities
Finance lease obligations, current portion	108,832	160,416
Notes payable, current portion		252,577
Operating lease obligations, current portion	95,187	86,844
Accounts payable	312,655	147,284
Customer deposits	1,754,558	1,010,236
Accrued compensation	272,158	115,143
Accrued expenses and other	97,292	105,585
Total current liabilities	2,640,682	1,878,085
Finance lease obligations, net of current portion	171,087	243,218
Notes payable, net of current portion		72,723
Operating lease obligations, net of current portion	230,731	304,989
Total liabilities	3,042,500	2,499,015
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	508,400	514,438
Common stock, no par value, authorized 15,000,000 shares; 4,501,248 and 4,466,969 shares issued and outstanding, respectively	10,566,355	10,530,669
Additional paid-in capital	2,231,934	2,246,501
Accumulated deficit	(6,297,626)	(7,740,441)
Total shareholders' equity	7,009,063	5,551,167
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$ 10,051,563	$ 8,050,182

BALANCE SHEETS (Parenthetical)

BALANCE SHEETS (Parenthetical) - USD ($)	Sep. 30, 2021	Dec. 31, 2020
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	4,501,248	4,466,969
Common stock, shares outstanding	4,501,248	4,466,969
Convertible Preferred Stock, Series B
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 ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
STATEMENTS OF OPERATIONS
Revenue	$ 5,211,169	$ 1,494,078	$ 10,205,528	$ 7,539,460
Cost of revenue	3,908,801	1,034,939	7,537,570	6,133,199
Gross profit	1,302,368	459,139	2,667,958	1,406,261
General and administrative expense	306,997	263,444	878,586	818,825
Research and development expense	56,612	83,276	149,208	260,601
Marketing and sales expense	61,732	44,862	159,559	144,033
Income from operations	877,027	67,557	1,480,605	182,802
Gain on extinguishment of debt			(325,300)
Interest expense	8,156	9,058	24,808	20,427
Income before provision for income taxes	868,871	58,499	1,781,097	162,375
Income tax expense	200,189	0	338,282	1,900
Net income	668,682	58,499	1,442,815	160,475
Dividends on preferred stock	6,038	6,038	18,114	18,114
INCOME APPLICABLE TO COMMON SHARES	$ 662,644	$ 52,461	$ 1,424,701	$ 142,361
Income per common share
Basic (In dollars per share)	$ 0.15	$ 0.01	$ 0.32	$ 0.03
Diluted (In dollars per share)	$ 0.15	$ 0.01	$ 0.32	$ 0.03
Weighted average shares outstanding
Basic (In shares)	4,500,256	4,436,185	4,492,736	4,411,390
Diluted (In shares)	4,531,523	4,447,059	4,521,746	4,420,272

STATEMENTS OF SHAREHOLDERS' EQU

STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($)	Convertible Preferred Stock, Series BPreferred Stock [Member]	Common Stock	Additional Paid-In Capital	Accumulated Deficit	Total
Balance at Dec. 31, 2019	$ 514,438	$ 10,410,677	$ 2,265,925	$ (9,242,204)	$ 3,948,836
Accretion of cumulative dividends	18,114		(18,114)
Payment of cumulative dividends (Note 5)	(24,152)				(24,152)
Stock based compensation expense (Note 4)			3,546		3,546
Common stock issued (Note 4)		89,998			89,998
Net income				160,475	160,475
Balance at Sep. 30, 2020	508,400	10,500,675	2,251,357	(9,081,729)	4,178,703
Balance at Jun. 30, 2020	502,362	10,470,675	2,256,213	(9,140,228)	4,089,022
Accretion of cumulative dividends	6,038		(6,038)
Stock based compensation expense (Note 4)			1,182		1,182
Common stock issued (Note 4)		30,000			30,000
Net income				58,499	58,499
Balance at Sep. 30, 2020	508,400	10,500,675	2,251,357	(9,081,729)	4,178,703
Balance at Dec. 31, 2020	514,438	10,530,669	2,246,501	(7,740,441)	5,551,167
Accretion of cumulative dividends	18,114		(18,114)
Payment of cumulative dividends (Note 5)	(24,152)				(24,152)
Stock based compensation expense (Note 4)			3,547		3,547
Common stock issued (Note 4)		35,686			35,686
Net income				1,442,815	1,442,815
Balance at Sep. 30, 2021	508,400	10,566,355	2,231,934	(6,297,626)	7,009,063
Balance at Jun. 30, 2021	502,362	10,558,867	2,236,790	(6,966,308)	6,331,711
Accretion of cumulative dividends	6,038		(6,038)
Stock based compensation expense (Note 4)			1,182		1,182
Common stock issued (Note 4)		7,488			7,488
Net income				668,682	668,682
Balance at Sep. 30, 2021	$ 508,400	$ 10,566,355	$ 2,231,934	$ (6,297,626)	$ 7,009,063

STATEMENTS OF CASH FLOWS

STATEMENTS OF CASH FLOWS - USD ($)	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$ 1,442,815	$ 160,475
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and accretion	325,793	335,789
Amortization of right of use asset	61,756	57,265
Amortization of patents	3,311	2,827
Stock based compensation	39,233	93,544
Gain on disposal of equipment	(4,511)	(1,322)
Deferred tax asset	316,185
Gain on extinguishment of debt	(325,300)
Inventory reserve	900	1,921
Changes in operating assets and liabilities:
Accounts receivable	(298,706)	(14,411)
Inventories	(802,569)	1,518,506
Prepaid expenses	31,810	11,825
Other assets	2,656	(13,594)
Accounts payable	165,371	(88,211)
Operating lease obligations	(65,915)	(59,739)
Accrued expenses and customer deposits	887,869	(1,500,314)
Net cash provided by operating activities	1,780,698	504,561
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds on sale of equipment	18,091	3,063
Purchases of property and equipment	(615,088)	(49,023)
Net cash used in investing activities	(596,997)	(45,960)
CASH FLOWS FROM FINANCING ACTIVITIES
Payment of cumulative dividends on preferred stock	(24,152)	(24,152)
Proceeds from SBA Paycheck Protection Program note payable		325,300
Principal payments on finance lease obligations and notes payable	(123,715)	(84,238)
Net cash (used in) provided by financing activities	(147,867)	216,910
NET INCREASE IN CASH	1,035,834	675,511
CASH - Beginning of period	2,917,551	1,828,397
CASH - End of period	3,953,385	2,503,908
Cash paid during the period for:
Interest	9,256	10,736
Income taxes	338,282	1,900
SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES
Property and equipment purchased by finance lease		306,973
Increase in asset retirement obligation	$ 5,175	$ 2,700

Business Organization and Purpo

Business Organization and Purpose	9 Months Ended
	Sep. 30, 2021
Business Organization and Purpose
Business Organization and Purpose	Note 1. Business Organization and Purpose SCI Engineered Materials, Inc. (“SCI”, 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	9 Months Ended
	Sep. 30, 2021
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies	Note 2. Summary of Significant Accounting Policies Basis of Presentation - The accompanying unaudited financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments considered necessary for fair presentation of the results of operations for the periods presented have been included. The financial statements should be read in conjunction with the audited financial statements and the notes thereto for the year ended December 31, 2020. Interim results are not necessarily indicative of results for the full year. Use of Estimates - The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Revenue Recognition - The Company enters into contracts with its customers that generally represent purchase orders specifying general terms and conditions, order quantities and per unit product prices. The Company has determined that each unit of product purchased represents a separate performance obligation. The Company satisfies its performance obligations and recognizes revenue at a point in time when control of a unit of product is transferred to the customer. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products. For most product sales, transfer of control occurs when the products are shipped from the Company’s manufacturing facility to the customer. The cost of delivering products to the Company’s customers is recorded as a component of cost of products sold. Those costs may include the amounts paid to a third party to deliver the products. Any freight costs billed to and paid by a customer are included in revenue. 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. ​ Note 2. Summary of Significant Accounting Policies (continued) During the three months ended September 30, 2021, and 2020, all revenue was from the photonics market. During the nine months ended September 30, 2021, and 2020, revenue from the photonics market was approximately 100% and 99%, respectively. The balance of the revenue in these periods was almost entirely from the thin film solar and thin film battery markets. The top two customers represented approximately 84% and 83% of total revenue for the nine months ended September 30, 2021, and 2020, respectively. International shipments resulted in 2% and 5% of total revenue for the first nine months of 2021 and 2020, respectively. Employee Retention Credit (“ERC”) - The Company qualified for federal government assistance through ERC provisions of the Consolidated Appropriations Act of 2021 during the current fiscal year in the amount of $255,507 for the first quarter of 2021, $151,701 for the second quarter of 2021, and $153,713 for the third quarter of 2021. The purpose of the ERC is to encourage employers to keep employees on the payroll, even if they are not working during the covered period because of the coronavirus outbreak. This credit is recorded in the Statement of Operations as an offset to payroll costs in their respective expense lines. A balance of $184,861 appears as a tax receivable on the balance sheets at September 30, 2021. American Rescue Plan Act of 2021 (“ARP”) – This act allows eligible employers with fewer than 500 employees to qualify for a tax credit for providing paid time off for each employee receiving COVID-19 vaccinations and for any time needed to recover from the vaccine. The Company received a credit of $11,042 during the third quarter of 2021. ​

Recent Accounting Pronouncement

Recent Accounting Pronouncements	9 Months Ended
	Sep. 30, 2021
Recent Accounting Pronouncements
Recent Accounting Pronouncements	Note 3. Recent Accounting Pronouncements 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.

Common Stock and Stock Options

Common Stock and Stock Options	9 Months Ended
	Sep. 30, 2021
Common Stock and Stock Options
Common Stock and Stock Options	Note 4. Common Stock and Stock Options Stock Based Compensation cost for all stock awards is based on the grant date fair value and recognized over the required service (vesting) period. Non cash stock-based compensation expense was $8,670 and $31,182 for the three months ended September 30, 2021, and 2020, respectively. Noncash stock-based compensation expense was $39,233 and $93,544 for the nine months ended September 30, 2021, and 2020, respectively. Unrecognized compensation expense was $7,487 as of September 30, 2021, and will be recognized through 2023. There was no tax benefit recorded for this compensation cost as the expense primarily relates to incentive stock options that do not qualify for a tax deduction until, and only if, a qualifying disposition occurs. The non-employee Board members received compensation of 7,605 and 75,475 aggregate shares of common stock of the Company during the nine months ended September 30, 2021, and 2020, respectively. The stock had an aggregate value of $22,475 and $89,998 for the nine months ended September 30, 2021, and 2020, respectively, and was recorded as non-cash stock compensation expense in the financial statements. Employees received compensation of 4,804 aggregate shares of common stock of the Company during the nine months ended September 30, 2021, which had an aggregate value of $13,211, and was recorded as noncash stock-based compensation expense in the financial statements. In addition, during the nine months ended September 30, 2021, a total of 30,181 stock options were exercised by management. Note 4. Common Stock and Stock Options (continued) The cumulative status of options granted and outstanding at September 30, 2021, and December 31, 2020, as well as options which became exercisable in connection with the Company’s stock option plans is summarized as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ Average ​ Stock Options Exercise Price Outstanding at January 1, 2020 76,037 ​ $ 1.03 Outstanding at December 31, 2020 76,037 ​ $ 1.03 Exercised (30,181) ​ 0.96 Outstanding at September 30, 2021 45,856 ​ $ 1.07 Options exercisable at December 31, 2020 55,208 ​ $ 0.94 Options exercisable at September 30, 2021 31,970 ​ $ 0.99 ​ Exercise prices for options ranged from $0.84 to $1.25 at September 30, 2021. The weighted average option price for all options outstanding at September 30, 2021, was $1.07 with a weighted average remaining contractual life of 5.0 years.

Preferred Stock

Preferred Stock	9 Months Ended
	Sep. 30, 2021
Preferred Stock
Preferred Stock	Note 5. Preferred Stock Dividends on the Series B preferred stock accrue at 10% annually on the outstanding shares. Dividends on the Series B preferred stock were $6,038 for the three months ended September 30, 2021, and 2020, and $18,114 for the nine months ended September 30, 2021, and 2020. The Company had accrued dividends on Series B preferred stock of $259,634 at September 30, 2021, and $265,672 at December 31, 2020. These amounts are included in Convertible preferred stock, Series B, on the balance sheet at September 30, 2021, and December 31, 2020. During June 2021, and June 2020, a dividend payment of $24,152 was made to preferred shareholders.

Inventories

Inventories	9 Months Ended
	Sep. 30, 2021
Inventories
Inventories	Note 6. Inventories Inventories consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ December 31, ​ 2021 2020 ​ ​ (unaudited) ​ ​ ​ Raw materials ​ $ 522,058 ​ $ 206,668 Work-in-process ​ 1,201,672 ​ 877,812 Finished goods ​ 283,416 ​ 120,097 Inventory reserve ​ (25,118) ​ (24,218) ​ ​ $ 1,982,028 ​ $ 1,180,359 ​

Earnings Per Share

Earnings Per Share	9 Months Ended
	Sep. 30, 2021
Earnings Per Share
Earnings Per Share	Note 7. Earnings Per Share Basic income per share is calculated as income applicable to common shareholders divided by the weighted average of common shares outstanding. Diluted earnings per share is calculated as diluted income applicable to common shareholders divided by the diluted weighted average number of common shares. 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. All convertible preferred stock and common stock options listed in Note 4 that were out-of-the-money or anti-dilutive were excluded from diluted earnings per share. The following is provided to reconcile the earnings per share calculations: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended Sept. 30, ​ Nine months ended Sept. 30, ​ 2021 2020 2021 2020 Income applicable to common shares ​ $ 662,644 ​ $ 52,461 ​ $ 1,424,701 ​ $ 142,361 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average common shares outstanding - basic ​ 4,500,256 ​ 4,436,185 ​ 4,492,736 ​ 4,411,390 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Effect of dilution ​ 31,267 ​ 10,874 ​ 29,010 ​ 8,882 Weighted average shares outstanding - diluted ​ 4,531,523 ​ 4,447,059 ​ 4,521,746 ​ 4,420,272 ​

Notes Payable

Notes Payable	9 Months Ended
	Sep. 30, 2021
Notes Payable
Notes Payable	Note 8. 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 Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) and administered by the U.S. Small Business Administration (the “SBA”). The term of the PPP loan was two years. The interest rate on this loan was 1.0% per annum, which was deferred for the first six months of the term of the loan. After the initial six-month deferral period or until forgiveness of the loan was approved, the loan required monthly payments of principal and interest until maturity with respect to any portion of the PPP loan which was not forgiven. Under the terms of the CARES Act, PPP loan recipients are eligible to apply for, and be granted, forgiveness for all or a portion of loans granted under the PPP. Such forgiveness was 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 Company applied for forgiveness of the entire amount of the loan during the fourth quarter of 2020, and the SBA approved the Forgiveness Application in full during the first quarter of 2021. This amount is included in the Statement of Operations as gain on extinguishment of debt in the first quarter of 2021. The Company had a line of credit with Huntington National Bank for $1 million which was closed during the third quarter of 2021. It had an expiration date of October 5, 2021. No amounts were drawn on this line of credit during 2021. The Company commenced a line of credit with Fifth Third Bank for $1 million during August of 2021. The line of credit bears interest equal to the rate of interest per annum established by Fifth Third Bank as its Prime Rate. This line of credit has a maturity date of August 29, 2022. At September 30, 2021, no amounts were drawn on the line of credit.

Income Taxes

Income Taxes	9 Months Ended
	Sep. 30, 2021
Income Taxes
Income Taxes	Note 9. Income Taxes The provision for income taxes for the three and nine months ended September 30, 2021, is based on our projected annual effective tax rate for fiscal year 2021, adjusted for permanent differences and specific items that are required to be recognized in the period in which they are incurred. The provision for income taxes was $200,189 and $0 for the three months ended September 30, 2021, and 2020 respectively, and $338,282 and $1,900 for the nine months ended September 30, 2021, and 2020 respectively. The federal effective tax rate was 17.8% for the nine months ended September 30, 2021. The difference compared to the federal statutory rate of 21% was due primarily to a tax benefit of $325,300 from the PPP loan forgiveness. Note 9. Income Taxes (continued) Following is the income tax expense for the three and nine months ended September 30: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended ​ Nine months ended ​ ​ September 30, ​ September 30, ​ 2021 2020 2021 2020 Federal - deferred ​ $ 185,183 ​ $ — ​ $ 316,185 ​ $ — State and local ​ 15,006 ​ — ​ ​ 22,097 ​ ​ 1,900 ​ ​ $ 200,189 ​ $ — ​ $ 338,282 ​ $ 1,900 ​ Deferred tax assets and liabilities result from temporary differences in the recognition of income and expense for tax and financial reporting purposes. A valuation allowance of $0 has been recorded against the realizability of the net deferred tax asset at September 30, 2021, and December 31, 2020. The Company had net operating loss carryforwards available for federal and state tax purposes of approximately $3,700,000 at December 31, 2020, which expire in varying amounts through 2035. As of December 31, 2020, management determined that there was sufficient positive evidence to conclude that it was more likely than not that deferred taxes of $1,019,317 were realizable in part because the Company achieved four consecutive years of pretax income, expects profits to continue for the foreseeable future and implemented new efficiencies in the Company’s manufacturing process. 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. Accordingly, management determined that no valuation allowance was necessary, and the deferred tax asset was $703,132 at September 30, 2021.

Operating Lease

Operating Lease	9 Months Ended
	Sep. 30, 2021
Operating Lease
Operating Lease	Note 10. Operating Lease 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 rental 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 $82,600 and $80,900 during the nine months ended September 30, 2021, and 2020, respectively. The following is a maturity analysis, by year, of the annual undiscounted cash outflows of the operating lease liabilities as of September 30, 2021: ​ ​ ​ ​ ​ 2021 ​ $ 27,797 2022 ​ 112,611 2023 ​ 114,857 2024 ​ 102,550 Total minimum lease payments ​ ​ 357,815 Less debt discount ​ ​ 31,897 Total operating lease obligations ​ $ 325,918 ​ ​ ​ ​ ​ ​ Operating cash outflows from operating leases $ 219,400 ​ Weighted average remaining lease term – operating leases ​ 3.2 years Weighted average discount rate – operating leases ​ 5.5 % ​

Finance Leases

Finance Leases	9 Months Ended
	Sep. 30, 2021
Finance Leases
Finance Leases	Note 11. Finance Leases The Company leases certain equipment under finance leases. Future minimum lease payments, by year, with the present value of such payments, as of September 30, 2021, are shown in the following table. ​ ​ ​ ​ ​ 2021 ​ $ 39,624 2022 ​ 105,154 2023 ​ ​ 101,675 2024 ​ ​ 49,859 Total minimum lease payments ​ 296,312 Less amount representing interest ​ 16,393 Present value of minimum lease payments ​ 279,919 Less current portion ​ 108,832 Finance lease obligations, net of current portion ​ $ 171,087 ​ The equipment under finance lease at September 30, 2021, and December 31, 2020, is included in the accompanying balance sheets as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ Sept. 30, 2021 Dec. 31, 2020 Machinery and equipment ​ $ 745,289 ​ $ 745,289 Less accumulated depreciation and amortization ​ 213,383 ​ 157,486 Net book value ​ $ 531,906 ​ $ 587,803 ​ 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 were transferred to the Company in accordance with the terms of the leases and these assets have been excluded from the leased asset disclosure above. During the first nine months of 2021 the Company was approved by Fifth Third Equipment Finance Company for an equipment line of credit not to exceed $800,000 with an implicit rate of 2.71% at time of approval. Delivery and acceptance of new production equipment must be no later than December 31, 2021. Due to the improved cash position of the Company, management determined it was preferable to reinvest these funds directly into the purchase of the production equipment received during the first nine months of 2021, rather than initiate a new lease. The cost of this equipment was approximately $341,655. In addition, a deposit of $220,075 was made towards a purchase order of $440,150 for new equipment expected to arrive by the end of 2021. Should the Company choose to initiate a finance lease for this equipment, the lease schedule is to commence upon acceptance of delivered equipment. The final lease rate factor or loan interest rate shall be fixed at funding using the Bloomberg SWAP Rate report for the most recent previous day close and shall remain constant throughout the term. At September 30, 2021, no amounts were drawn on the equipment line of credit.

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2021
Summary of Significant Accounting Policies
Basis of Presentation	Basis of Presentation - The accompanying unaudited financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments considered necessary for fair presentation of the results of operations for the periods presented have been included. The financial statements should be read in conjunction with the audited financial statements and the notes thereto for the year ended December 31, 2020. Interim results are not necessarily indicative of results for the full year.
Use of Estimates	Use of Estimates - The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Revenue Recognition	Revenue Recognition - The Company enters into contracts with its customers that generally represent purchase orders specifying general terms and conditions, order quantities and per unit product prices. The Company has determined that each unit of product purchased represents a separate performance obligation. The Company satisfies its performance obligations and recognizes revenue at a point in time when control of a unit of product is transferred to the customer. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products. For most product sales, transfer of control occurs when the products are shipped from the Company’s manufacturing facility to the customer. The cost of delivering products to the Company’s customers is recorded as a component of cost of products sold. Those costs may include the amounts paid to a third party to deliver the products. Any freight costs billed to and paid by a customer are included in revenue. 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. ​ Note 2. Summary of Significant Accounting Policies (continued) During the three months ended September 30, 2021, and 2020, all revenue was from the photonics market. During the nine months ended September 30, 2021, and 2020, revenue from the photonics market was approximately 100% and 99%, respectively. The balance of the revenue in these periods was almost entirely from the thin film solar and thin film battery markets. The top two customers represented approximately 84% and 83% of total revenue for the nine months ended September 30, 2021, and 2020, respectively. International shipments resulted in 2% and 5% of total revenue for the first nine months of 2021 and 2020, respectively.
Employee Retention Credit	Employee Retention Credit (“ERC”) - The Company qualified for federal government assistance through ERC provisions of the Consolidated Appropriations Act of 2021 during the current fiscal year in the amount of $255,507 for the first quarter of 2021, $151,701 for the second quarter of 2021, and $153,713 for the third quarter of 2021. The purpose of the ERC is to encourage employers to keep employees on the payroll, even if they are not working during the covered period because of the coronavirus outbreak. This credit is recorded in the Statement of Operations as an offset to payroll costs in their respective expense lines. A balance of $184,861 appears as a tax receivable on the balance sheets at September 30, 2021.
American Rescue Plan Act of 2021	American Rescue Plan Act of 2021 (“ARP”) – This act allows eligible employers with fewer than 500 employees to qualify for a tax credit for providing paid time off for each employee receiving COVID-19 vaccinations and for any time needed to recover from the vaccine. The Company received a credit of $11,042 during the third quarter of 2021.

Common Stock and Stock Options

Common Stock and Stock Options (Tables)	9 Months Ended
	Sep. 30, 2021
Common Stock and Stock Options
Schedule of share-based compensation, employee stock options, activity	The cumulative status of options granted and outstanding at September 30, 2021, and December 31, 2020, as well as options which became exercisable in connection with the Company’s stock option plans is summarized as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ Average ​ Stock Options Exercise Price Outstanding at January 1, 2020 76,037 ​ $ 1.03 Outstanding at December 31, 2020 76,037 ​ $ 1.03 Exercised (30,181) ​ 0.96 Outstanding at September 30, 2021 45,856 ​ $ 1.07 Options exercisable at December 31, 2020 55,208 ​ $ 0.94 Options exercisable at September 30, 2021 31,970 ​ $ 0.99 ​

Inventories (Tables)

Inventories (Tables)	9 Months Ended
	Sep. 30, 2021
Inventories
Schedule of Inventories	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ December 31, ​ 2021 2020 ​ ​ (unaudited) ​ ​ ​ Raw materials ​ $ 522,058 ​ $ 206,668 Work-in-process ​ 1,201,672 ​ 877,812 Finished goods ​ 283,416 ​ 120,097 Inventory reserve ​ (25,118) ​ (24,218) ​ ​ $ 1,982,028 ​ $ 1,180,359

Earnings Per Share (Tables)

Earnings Per Share (Tables)	9 Months Ended
	Sep. 30, 2021
Earnings Per Share
Summary of reconciliation of earnings per share calculations	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended Sept. 30, ​ Nine months ended Sept. 30, ​ 2021 2020 2021 2020 Income applicable to common shares ​ $ 662,644 ​ $ 52,461 ​ $ 1,424,701 ​ $ 142,361 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average common shares outstanding - basic ​ 4,500,256 ​ 4,436,185 ​ 4,492,736 ​ 4,411,390 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Effect of dilution ​ 31,267 ​ 10,874 ​ 29,010 ​ 8,882 Weighted average shares outstanding - diluted ​ 4,531,523 ​ 4,447,059 ​ 4,521,746 ​ 4,420,272

Income Taxes (Tables)

Income Taxes (Tables)	9 Months Ended
	Sep. 30, 2021
Income Taxes
Schedule of components of the income tax expense	Following is the income tax expense for the three and nine months ended September 30: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended ​ Nine months ended ​ ​ September 30, ​ September 30, ​ 2021 2020 2021 2020 Federal - deferred ​ $ 185,183 ​ $ — ​ $ 316,185 ​ $ — State and local ​ 15,006 ​ — ​ ​ 22,097 ​ ​ 1,900 ​ ​ $ 200,189 ​ $ — ​ $ 338,282 ​ $ 1,900

Operating Lease (Tables)

Operating Lease (Tables)	9 Months Ended
	Sep. 30, 2021
Operating Lease
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 September 30, 2021: ​ ​ ​ ​ ​ 2021 ​ $ 27,797 2022 ​ 112,611 2023 ​ 114,857 2024 ​ 102,550 Total minimum lease payments ​ ​ 357,815 Less debt discount ​ ​ 31,897 Total operating lease obligations ​ $ 325,918
Schedule of operating lease other information	​ ​ ​ ​ ​ ​ Operating cash outflows from operating leases $ 219,400 ​ Weighted average remaining lease term – operating leases ​ 3.2 years Weighted average discount rate – operating leases ​ 5.5 %

Finance Leases (Tables)

Finance Leases (Tables)	9 Months Ended
	Sep. 30, 2021
Finance Leases
Schedule of future minimum lease payments	The Company leases certain equipment under finance leases. Future minimum lease payments, by year, with the present value of such payments, as of September 30, 2021, are shown in the following table. ​ ​ ​ ​ ​ 2021 ​ $ 39,624 2022 ​ 105,154 2023 ​ ​ 101,675 2024 ​ ​ 49,859 Total minimum lease payments ​ 296,312 Less amount representing interest ​ 16,393 Present value of minimum lease payments ​ 279,919 Less current portion ​ 108,832 Finance lease obligations, net of current portion ​ $ 171,087
Schedule of equipment under finance leases	The equipment under finance lease at September 30, 2021, and December 31, 2020, is included in the accompanying balance sheets as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ Sept. 30, 2021 Dec. 31, 2020 Machinery and equipment ​ $ 745,289 ​ $ 745,289 Less accumulated depreciation and amortization ​ 213,383 ​ 157,486 Net book value ​ $ 531,906 ​ $ 587,803

Business Organization and Pur_2

Business Organization and Purpose (Details)	9 Months Ended
	Sep. 30, 2021segment
Business Organization and Purpose
Number of operating segments	1

Summary of Significant Accoun_3

Summary of Significant Accounting Policies (Details) - USD ($)	3 Months Ended			9 Months Ended
	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020
Accounting Policies [Line Items]
Employee retention credit provisions	$ 153,713	$ 151,701	$ 255,507
Accounts receivable Tax - Employee Retention Credit	184,861			$ 184,861		$ 0
Tax credit for providing paid time off for each employee receiving COVID-19 vaccinations and for any time needed to recover from the vaccine	11,042
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized	$ 7,487			$ 7,487
Geographic Concentration Risk [Member] | Sales Revenue, Net [Member] | International
Accounting Policies [Line Items]
Concentration Risk, Percentage				2.00%	5.00%
Customer One [Member] | Photonics market [Member] | Sales Revenue, Net [Member]
Accounting Policies [Line Items]
Concentration Risk, Percentage				100.00%
Customer Two [Member] | Photonics market [Member] | Sales Revenue, Net [Member]
Accounting Policies [Line Items]
Concentration Risk, Percentage					99.00%
Two Customers [Member] | Photonics market [Member] | Sales Revenue, Net [Member]
Accounting Policies [Line Items]
Concentration Risk, Percentage				84.00%	83.00%

Common Stock and Stock Option_2

Common Stock and Stock Options (Details) - $ / shares	9 Months Ended
	Sep. 30, 2021	Dec. 31, 2020
Common Stock and Stock Options
Weighted Average Contractual Term, Outstanding	5 years
Employee Stock Option [Member]
Common Stock and Stock Options
Stock Options, Outstanding, Beginning Balance	76,037
Stock Options, Exercised	(30,181)
Stock Options, Outstanding, Ending Balance	45,856
Stock Options, Options exercisable	31,970	55,208
Weighted Average Exercise Price, Outstanding, Beginning Balance	$ 1.03
Weighted Average Exercise Price, Exercised	0.96
Weighted Average Exercise Price, Outstanding, Ending Balance	1.07
Weighted Average Exercise Price, Options exercisable	$ 0.99	$ 0.94

Common Stock and Stock Option_3

Common Stock and Stock Options - Additional Information (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020
Common Stock and Stock Options
Stock based compensation	$ 8,670	$ 31,182	$ 39,233	$ 93,544
Unrecognized compensation expense	7,487		7,487
Stock Issued During Period, Value, New Issues	$ 7,488	30,000	$ 35,686	89,998
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Lower Range Limit			$ 0.84
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Upper Range Limit			1.25
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Outstanding Options, Weighted Average Exercise Price, Ending Balance	$ 1.07		$ 1.07
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term			5 years
Common Stock
Common Stock and Stock Options
Stock Issued During Period, Value, New Issues	$ 7,488	$ 30,000	$ 35,686	$ 89,998
Employee Stock Option [Member]
Common Stock and Stock Options
Stock options exercised			30,181
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number	45,856		45,856		76,037
Employee Stock Option [Member] | Common Stock
Common Stock and Stock Options
Stock Issued During Period, Shares, New Issues			4,804
Stock Issued During Period, Value, New Issues			$ 13,211
Non-employee director | Common Stock
Common Stock and Stock Options
Stock Issued During Period, Shares, New Issues			7,605	75,475
Stock Issued During Period, Value, New Issues			$ 22,475	$ 89,998

Preferred Stock (Details)

Preferred Stock (Details) - USD ($)	3 Months Ended		6 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020
Preferred Stock Dividends, Income Statement Impact	$ 6,038	$ 6,038			$ 18,114	$ 18,114
Dividend Payment, Preferred Stock			$ 24,152	$ 24,152	$ 24,152	24,152
Series B Preferred Stock
Preferred Stock, Dividend Rate, Percentage					10.00%
Preferred Stock Dividends, Income Statement Impact	6,038	$ 6,038			$ 18,114	$ 18,114
Accrued Dividend	$ 259,634				$ 259,634		$ 265,672

Inventories (Details)

Inventories (Details) - USD ($)	Sep. 30, 2021	Dec. 31, 2020
Inventories
Raw materials	$ 522,058	$ 206,668
Work-in-process	1,201,672	877,812
Finished goods	283,416	120,097
Inventory reserve	(25,118)	(24,218)
Inventory, Net	$ 1,982,028	$ 1,180,359

Earnings Per Share - Reconcilia

Earnings Per Share - Reconciliation of Earnings Per Share Calculations (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Earnings Per Share
Income applicable to common share	$ 662,644	$ 52,461	$ 1,424,701	$ 142,361
Weighted average common shares outstanding - basic	4,500,256	4,436,185	4,492,736	4,411,390
Effect of dilution	31,267	10,874	29,010	8,882
Weighted average shares outstanding - diluted	4,531,523	4,447,059	4,521,746	4,420,272

Notes Payable (Details)

Notes Payable (Details) - USD ($)	Apr. 17, 2020	Sep. 30, 2021	Aug. 31, 2021
SBA PPP Loan
Debt Instrument [Line Items]
Unsecured promissory note	$ 325,300
Term of loan	2 years
Interest rate (in percentage)	1.00%
Deferral period for monthly payments	6 months
Huntington Bank [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity		$ 1,000,000
Borrowings on line of credit		0
Fifth Third Bank
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity			$ 1,000,000
Borrowings on line of credit		$ 0

Income Taxes - Income tax expen

Income Taxes - Income tax expense (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Income Taxes
Federal - deferred	$ 185,183	$ 0	$ 316,185	$ 0
State and local	15,006	0	22,097	1,900
Total	$ 200,189	$ 0	$ 338,282	$ 1,900

Income Taxes - Additional infor

Income Taxes - Additional information (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020
Income Taxes
Recorded Valuation Allowance	$ 0		$ 0		$ 0
Deferred Tax Assets, Operating Loss Carryforwards, State and Local					3,700,000
Operating Loss Carry forward Expiration Year			2035
Net deferred tax asset	703,132		$ 703,132		$ 1,019,317
Deferred Tax Assets, Valuation Allowance	0		0
Income tax expense	$ 200,189	$ 0	$ 338,282	$ 1,900
Statutory rate			21.00%
Effective rate			17.80%
Tax benefit from debt forgiveness			$ 325,300

Operating Lease - Future Minimu

Operating Lease - Future Minimum Lease Payments (Details)	Sep. 30, 2021USD ($)
Operating Lease
2021	$ 27,797
2022	112,611
2023	114,857
2024	102,550
Total minimum lease payments	357,815
Less debt discount	31,897
Total operating lease obligations	$ 325,918

Operating Leases - Additional I

Operating Leases - Additional Information (Details) - USD ($)	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Operating cash outflows from operating leases	$ 219,400
Weighted average remaining lease term - operating leases	3 years 2 months 12 days
Weighted average discount rate - operating leases	5.50%
Operating lease, renewal term	5 years
Operating Lease, Cost	$ 82,600	$ 80,900
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 ($)	Sep. 30, 2021	Dec. 31, 2020
Finance Leases
2021	$ 39,624
2022	105,154
2023	101,675
2024	49,859
Total minimum lease payments	296,312
Less amount representing interest	16,393
Present value of minimum lease payments	279,919
Less current portion	108,832	$ 160,416
Finance lease obligations, net of current portion	$ 171,087	$ 243,218

Finance Leases - Equipment unde

Finance Leases - Equipment under finance lease and additional information (Details) - USD ($)	9 Months Ended
	Sep. 30, 2021	Dec. 31, 2020
Line of Credit Facility [Line Items]
Machinery and equipment	$ 745,289	$ 745,289
Less accumulated depreciation and amortization	213,383	157,486
Net book value	$ 531,906	$ 587,803
Amortization period, Finance lease (in years)	10 years
Fifth Third Equipment Finance Company
Line of Credit Facility [Line Items]
Equipment line of credit	$ 800,000
Implicit rate	2.71%
Cost of equipment	$ 341,655
Deposits towards purchase orders for new equipment	220,075
Amount of purchase orders for new equipment	440,150
Borrowings on line of credit	$ 0