SCI Engineered Materials (SCIA) 10-Q 28 Jul 23 2023 Q2 Quarterly report Financial data

Document And Entity Information

Document And Entity Information - shares	6 Months Ended
	Jun. 30, 2023	Jul. 27, 2023
Document And Entity Information
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Jun. 30, 2023
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
Security Exchange Name	NONE
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		4,530,207
Entity Central Index Key	0000830616
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q2
Amendment Flag	false

BALANCE SHEETS

BALANCE SHEETS - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Current Assets
Cash	$ 5,108,113	$ 3,947,966
Investments - marketable securities, short term	1,000,000	989,265
Accounts receivable Trade, less allowance for doubtful accounts of $15,000	1,037,955	842,647
Accounts receivable Tax - Employee Retention Credit	40,539	40,539
Other	12,431	12,653
Inventories, net	1,697,465	2,177,917
Prepaid expenses	147,452	136,134
Total current assets	9,043,955	8,147,121
Property and Equipment, at cost
Machinery and equipment	8,675,247	8,584,871
Furniture and fixtures	129,476	142,471
Leasehold improvements	607,156	607,156
Construction in progress	131,831	28,708
Property and equipment, gross	9,543,710	9,363,206
Less accumulated depreciation and amortization	(7,298,763)	(7,101,573)
Property and equipment, net	2,244,947	2,261,633
Investments, net - marketable securities, long term	1,004,478	1,000,000
Right of use asset, net	138,122	185,072
Deferred tax asset		151,164
Other assets	82,352	85,138
Total other assets	1,224,952	1,421,374
TOTAL ASSETS	12,513,854	11,830,128
Current Liabilities
Finance lease obligations, current portion	88,510	97,367
Operating lease obligations, current portion	110,084	105,789
Accounts payable	532,679	514,512
Customer deposits	1,466,866	1,825,595
Accrued compensation	220,555	270,168
Accrued expenses and other	134,195	122,065
Total current liabilities	2,552,889	2,935,496
Finance lease obligations, net of current portion	8,054	49,149
Deferred tax liability	73,828
Operating lease obligations, net of current portion	43,570	99,834
Total liabilities	2,678,341	3,084,479
Shareholders' Equity
Common stock, no par value, authorized 15,000,000 shares; 4,530,207 and 4,519,524 shares issued and outstanding, respectively	10,662,343	10,618,435
Additional paid-in capital	2,233,384	2,231,807
Accumulated deficit	(3,060,214)	(4,104,593)
Total shareholders' equity	9,835,513	8,745,649
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$ 12,513,854	$ 11,830,128

BALANCE SHEETS (Parenthetical)

BALANCE SHEETS (Parenthetical) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
BALANCE SHEETS
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	4,530,207	4,519,524
Common stock, shares outstanding	4,530,207	4,519,524

STATEMENTS OF OPERATIONS

STATEMENTS OF OPERATIONS - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
STATEMENTS OF OPERATIONS
Revenue	$ 7,457,690	$ 6,505,005	$ 13,254,837	$ 11,831,437
Revenue, Product and Service [Extensible Enumeration]	us-gaap:ProductMember	us-gaap:ProductMember	us-gaap:ProductMember	us-gaap:ProductMember
Cost of revenue	$ 6,204,080	$ 5,127,337	$ 10,676,630	$ 9,459,668
Cost, Product and Service [Extensible Enumeration]	us-gaap:ProductMember	us-gaap:ProductMember	us-gaap:ProductMember	us-gaap:ProductMember
Gross profit	$ 1,253,610	$ 1,377,668	$ 2,578,207	$ 2,371,769
General and administrative expense	419,083	423,401	851,496	796,589
Research and development expense	115,493	92,085	250,853	179,116
Marketing and sales expense	127,243	108,140	236,814	190,328
Income from operations	591,791	754,042	1,239,044	1,205,736
Interest (income) expense	(63,914)	5,769	(112,891)	12,262
Income before provision for income taxes	655,705	748,273	1,351,935	1,193,474
Income tax expense	144,346	83,400	302,556	144,200
Net income	511,359	664,873
NET INCOME	$ 511,359	$ 664,873	$ 1,049,379	$ 1,049,274
Income per common share
Basic (In dollars per share)	$ 0.11	$ 0.15	$ 0.23	$ 0.23
Diluted (In dollars per share)	$ 0.11	$ 0.15	$ 0.23	$ 0.23
Weighted average shares outstanding
Basic (In shares)	4,530,207	4,514,492	4,527,669	4,512,396
Diluted (In shares)	4,560,315	4,541,819	4,557,863	4,539,988

STATEMENTS OF SHAREHOLDERS' EQU

STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($)	Common Stock	Additional Paid-In Capital	Accumulated Deficit Period of Adoption, Adjustment	Accumulated Deficit	Period of Adoption, Adjustment	Total
Balance at Dec. 31, 2021	$ 10,573,843	$ 2,227,078		$ (6,061,617)		$ 6,739,304
Stock based compensation expense (Note 2J)		1,183				1,183
Common stock issued (Note 8)	22,116					22,116
Net income				384,401		384,401
Balance at Mar. 31, 2022	10,595,959	2,228,261		(5,677,216)		7,147,004
Balance at Dec. 31, 2021	10,573,843	2,227,078		(6,061,617)		6,739,304
Balance at Jun. 30, 2022	10,603,450	2,229,443		(5,012,343)		7,820,550
Balance at Mar. 31, 2022	10,595,959	2,228,261		(5,677,216)		7,147,004
Stock based compensation expense (Note 2J)		1,182				1,182
Common stock issued (Note 8)	7,491					7,491
Net income				664,873		664,873
Balance at Jun. 30, 2022	10,603,450	2,229,443		(5,012,343)		7,820,550
Balance at Dec. 31, 2022	10,618,435	2,231,807	$ (5,000)	(4,104,593)	$ (5,000)	8,745,649
Stock based compensation expense (Note 2J)		1,182				1,182
Common stock issued (Note 8)	43,908					43,908
Net income				538,020		538,020
Balance at Mar. 31, 2023	10,662,343	2,232,989		(3,571,573)		9,323,759
Balance at Dec. 31, 2022	10,618,435	2,231,807	$ (5,000)	(4,104,593)	$ (5,000)	8,745,649
Balance at Jun. 30, 2023	10,662,343	2,233,384		(3,060,214)		9,835,513
Balance at Mar. 31, 2023	10,662,343	2,232,989		(3,571,573)		9,323,759
Stock based compensation expense (Note 2J)		395				395
Net income				511,359		511,359
Balance at Jun. 30, 2023	$ 10,662,343	$ 2,233,384		$ (3,060,214)		$ 9,835,513

STATEMENTS OF CASH FLOWS

STATEMENTS OF CASH FLOWS - USD ($)	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$ 1,049,379	$ 1,049,274
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and accretion	227,799	203,944
Amortization of patents	2,207	2,207
Stock based compensation	45,485	31,972
Gain on disposal of equipment	9,142	5,166
Deferred taxes	224,992	132,100
Inventory reserve	2,472	(16,855)
Changes in operating assets and liabilities:
Accounts receivable	(195,085)	(287,692)
Inventories	477,980	(2,527,575)
Prepaid expenses	(11,318)	632,305
Other assets	579	(2)
Accounts payable	18,166	180,425
Operating lease assets and liabilities, net	(5,019)	(3,895)
Accrued expenses and customer deposits	(399,662)	2,099,024
Net cash provided by operating activities	1,428,833	1,490,066
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds on sale of equipment	16,000	5,166
Purchases of marketable securities	(509,478)
Proceeds from maturities of marketable securities	489,265
Purchases of property and equipment	(214,522)	(179,140)
Net cash used in investing activities	(218,735)	(173,974)
CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments on finance lease obligations	(49,951)	(47,824)
Net cash used in financing activities	(49,951)	(47,824)
NET INCREASE IN CASH	1,160,147	1,268,268
CASH - Beginning of year	3,947,966	4,140,942
CASH - End of period	5,108,113	5,409,210
Cash paid during the period for:
Interest	2,699	4,826
Income taxes	82,368	10,863
SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES
Increase in asset retirement obligation	$ 3,450	$ 3,450

Business Organization and Purpo

Business Organization and Purpose	6 Months Ended
	Jun. 30, 2023
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 photonics industry including Aerospace, Automotive, Defense, Glass, Optical Coatings and Solar. 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	6 Months Ended
	Jun. 30, 2023
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 of 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, 2022. 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 the majority of 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 creditworthiness of each customer. The Company sells its products typically under agreements with payment terms of 30-60 days. The Company does not normally 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. All revenue was from the photonics industry during the six months ended June 30, 2023 and 2022. The top two customers represented approximately 88% and 87% of total revenue for the six months ended June 30, 2023 and 2022, respectively. International shipments were 1% of total revenue for the three and six months ended June 30, 2023 and 2022. ​ Note 2. Summary of Significant Accounting Policies (continued) Employee Retention Credit (ERC) - The Company qualified for federal government assistance through Employee Retention Credit provisions of the Consolidated Appropriations Act of 2021 during 2021 and 2020. The purpose of the Employee Retention Credit was to encourage employers to keep employees on the payroll, even if they were not working during the covered period because of the coronavirus outbreak. These funds were recorded in the Statements of Income as an offset to payroll costs in their respective expense lines and as a tax receivable on the balance sheets. A balance of $40,539 appears as a tax receivable on the balance sheets at June 30, 2023 and December 31, 2022.

Recent Accounting Pronouncement

Recent Accounting Pronouncements	6 Months Ended
	Jun. 30, 2023
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 measure credit losses for most financial assets, including accounts receivable and held-to-maturity marketable securities, 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 became effective for us in the first quarter of 2023. The adoption of ASU No. 2016-13 resulted in a cumulative effect of $5,000 and is reflected in the accompanying Statement of Shareholders’ Equity.

Investments

Investments	6 Months Ended
	Jun. 30, 2023
Investments
Investments	Note 4. Investments As of June 30, 2023 and December 31, 2022, the Company held investments in corporate bonds and U.S. government securities that are required to be measured for disclosure purposes at fair value on a recurring basis. The bonds and government securities are considered held-to-maturity and are recorded at amortized cost on the balance sheet. These investments are considered level 2 as detailed in the table below. The Company considers investments which will mature in the next twelve months and interest receivable on the long-term bonds as current assets. The remaining investments are considered non-current assets including the investment in marketable securities which the Company intends to hold longer than twelve months. The fair value of these investments was estimated using recently executed transactions and market price quotations. At June 30, 2023, the length of time until maturity of the bonds currently owned ranged from 5 months to 23 months. The amortized cost, allowance for credit losses, fair value, and the related unrecognized gains and losses of these investments, were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross Gross ​ ​ ​ ​ Amortized ​ Unrealized ​ Unrealized ​ ​ ​ ​ ​ Cost ​ Losses ​ Gains ​ Fair Value June 30, 2023 ​ ​ ​ ​ Corporate bonds ​ $ 1,500,000 ​ $ (10,472) ​ $ — ​ $ 1,489,528 U.S. government treasuries ​ 509,478 ​ (10,013) ​ — ​ 499,465 Total investments ​ $ 2,009,478 ​ $ (20,485) ​ $ — ​ $ 1,988,993 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Allowance for credit losses ​ (5,000) ​ ​ ​ Total investments, net ​ $ 2,004,478 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2022 ​ ​ ​ ​ Corporate bonds ​ $ 1,500,000 ​ $ (1,924) ​ $ — ​ $ 1,498,076 U.S. government treasuries ​ 489,265 ​ — ​ 2,665 ​ 491,930 Total investments ​ $ 1,989,265 ​ $ (1,924) ​ $ 2,665 ​ $ 1,990,006 ​ The Company uses an “expected credit loss” measurement objective for the recognition of credit losses for held-to-maturity securities at the time the financial asset is originated or acquired. The expected credit losses are adjusted each period as necessary for changes in expected lifetime credit losses. The credit loss calculations for held-to-maturity securities are based upon historical default and recovery rates of bonds rated with the same rating as the current portfolio. An adjustment factor is applied to these credit loss calculations based upon management’s assessment of the expected impact from current economic conditions on our investments. The Company monitors the credit quality of debt securities classified as held-to-maturity through the use of their respective credit ratings and updates them on a quarterly basis with the latest assessment completed on June 30, 2023. Our allowance for credit losses was $5,000 at June 30, 2023.

Common Stock and Stock Options

Common Stock and Stock Options	6 Months Ended
	Jun. 30, 2023
Common Stock and Stock Options
Common Stock and Stock Options	Note 5. 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. Noncash stock-based compensation expense was $395 and $8,673 for the three months ended June 30, 2023, and 2022, respectively, and $45,485 and $31,972 for the six months ended June 30, 2023, and 2022, respectively. Unrecognized compensation expense was $0 as of June 30, 2023. Employees received compensation of 10,683 and 4,500 aggregate shares of common stock of the Company during the six months ended June 30, 2023 and 2022, respectively. These shares had an aggregate value of $43,908 and $14,625 at June 30, 2023 and 2022, respectively, and were recorded as non-cash stock compensation expense in the financial statements. The non-employee Board members received compensation of 4,610 aggregate shares of common stock of the Company with an aggregate value of $14,982 during the six months ended June 30, 2022 that was recorded as non-cash stock compensation expense in the financial statements. The cumulative status of options granted and outstanding at June 30, 2023, and December 31, 2022, as well as any options which became exercisable in connection with the Company’s stock option plans is summarized as follows: Employee Stock Options ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ Average ​ ​ Stock ​ Exercise ​ ​ Options ​ Price Outstanding at January 1, 2022 41,304 ​ $ 1.05 Outstanding at December 31, 2022 41,304 ​ $ 1.05 Outstanding at June 30, 2023 41,304 ​ $ 1.05 Options exercisable at December 31, 2022 34,361 ​ $ 1.01 Options exercisable at June 30, 2023 41,304 ​ $ 1.05 ​ Exercise prices for options ranged from $0.84 to $1.25 at June 30, 2023. The weighted average option price for all options outstanding at June 30, 2023, was $1.05 with a weighted average remaining contractual life of 3.1 years.

Inventories

Inventories	6 Months Ended
	Jun. 30, 2023
Inventories
Inventories	Note 6. Inventories Inventories consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, ​ December 31, ​ 2023 2022 Raw materials ​ $ 619,959 ​ $ 1,375,669 Work-in-process ​ 995,076 ​ 528,631 Finished goods ​ 95,333 ​ 284,048 ​ ​ 1,710,368 ​ 2,188,348 Inventory reserve ​ (12,903) ​ (10,431) ​ ​ $ 1,697,465 ​ $ 2,177,917 ​

Earnings Per Share

Earnings Per Share	6 Months Ended
	Jun. 30, 2023
Earnings Per Share
Earnings Per Share	Note 7. Earnings Per Share Basic income per share is calculated as net income divided by the weighted average of common shares outstanding. Diluted earnings per share is calculated as diluted net income 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 common stock options listed in Note 5 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 June 30, ​ Six months ended June 30, ​ ​ 2023 2022 2023 2022 ​ Net income ​ $ 511,359 ​ $ 664,873 ​ $ 1,049,379 ​ $ 1,049,274 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average common shares outstanding - basic ​ 4,530,207 ​ 4,514,492 ​ 4,527,669 ​ 4,512,396 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Effect of dilution - stock options ​ 30,108 ​ 27,327 ​ 30,194 ​ 27,592 ​ Weighted average shares outstanding - diluted ​ 4,560,315 ​ 4,541,819 ​ 4,557,863 ​ 4,539,988 ​ ​

Note Payable

Note Payable	6 Months Ended
	Jun. 30, 2023
Note Payable
Note Payable	Note 8. Note Payable The Company renewed its line of credit with Fifth Third Bank for $1 million during 2022. 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, 2023. No amounts were drawn on this line of credit as of June 30, 2023.

Income Taxes

Income Taxes	6 Months Ended
	Jun. 30, 2023
Income Taxes
Income Taxes	Note 9. Income Taxes The provision for income taxes for the three and six months ended June 30, 2023 and 2022 is based on our projected annual effective tax rate for fiscal year 2023, adjusted for permanent differences and specific items that are required to be recognized in the period in which they are incurred. The effective tax rate for the first six months of 2023 was 22.4% compared to the tax rate for calendar year 2022 of 21.7%. Following is the income tax expense for the three and six months ended June 30: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended June 30, ​ Six months ended June 30, ​ 2023 2022 2023 2022 Federal ​ $ 137,360 ​ $ 76,100 ​ $ 283,734 ​ $ 132,100 State and local ​ 6,986 ​ 7,300 ​ 18,822 ​ 12,100 ​ ​ $ 144,346 ​ $ 83,400 ​ $ 302,556 ​ $ 144,200 ​ Deferred tax assets and liabilities result from temporary differences in the recognition of income and expense for tax and financial reporting purposes. The Company had net operating loss carryforwards available for federal and state tax purposes of approximately $42,000 at December 31, 2022, which are expected to be fully utilized in 2023. As of December 31, 2022, management determined that there was sufficient positive evidence to conclude that it is more likely than not that deferred taxes of $151,164 were realizable principally because we achieved six consecutive years of pretax income, expect 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 taxes. Accordingly, management determined that no valuation allowance was necessary at December 31, 2022. The deferred tax asset was $0, and the deferred tax liability was $73,828 at June 30, 2023.

Operating Lease

Operating Lease	6 Months Ended
	Jun. 30, 2023
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 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 $57,300 and $56,200 during the six months ended June 30, 2023 and 2022, respectively. Additionally, the variable lease costs were approximately $33,500 and $27,500 during the six months ended June 30, 2023 and 2022, respectively. The following is a maturity analysis, by year, of the annual undiscounted cash outflows of the operating lease liabilities as of June 30, 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 ​ $ 57,566 ​ ​ 2024 ​ 102,550 ​ ​ Total minimum lease payments ​ ​ 160,116 ​ ​ Less debt discount ​ ​ 6,462 ​ ​ Total operating lease obligations ​ $ 153,654 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 ​ 2022 ​ Operating cash outflows from operating lease - year-to-date ​ $ 51,969 ​ $ 47,736 ​ Weighted average remaining lease term – operating lease ​ 1.4 years 2.4 years Weighted average discount rate – operating lease ​ 5.5 % 5.5 % ​ ​

Finance Leases

Finance Leases	6 Months Ended
	Jun. 30, 2023
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 June 30, 2023, are shown in the following table. ​ ​ ​ ​ ​ ​ 2023 ​ $ 49,024 ​ 2024 ​ 49,859 ​ Total minimum lease payments ​ 98,883 ​ Less amount representing interest ​ 2,319 ​ Present value of minimum lease payments ​ 96,564 ​ Less current portion ​ 88,510 ​ Finance lease obligations, net of current portion ​ $ 8,054 ​ ​ ​ ​ ​ ​ Weighted average remaining lease term – finance leases ​ ​ 1.1 years Weighted average discount rate – finance leases ​ ​ 4.28 % ​ The equipment under finance lease at June 30, 2023, and December 31, 2022, is included in the accompanying balance sheets as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, 2023 Dec. 31, 2022 ​ Machinery and equipment ​ $ 385,923 ​ $ 385,923 ​ Less accumulated depreciation and amortization ​ 123,672 ​ 104,376 ​ Net book value ​ $ 262,251 ​ $ 281,547 ​ ​ ​ ​ Note 11. Finance Leases (continued) These assets are amortized over a period of ten years using the straight-line method and amortization is included in depreciation expense. Finance lease costs totaled $49,951 and $47,824 for the six months ended June 30, 2023 and 2022, respectively. 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.

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Policies)	6 Months Ended
	Jun. 30, 2023
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 of 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, 2022. 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 the majority of 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 creditworthiness of each customer. The Company sells its products typically under agreements with payment terms of 30-60 days. The Company does not normally 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. All revenue was from the photonics industry during the six months ended June 30, 2023 and 2022. The top two customers represented approximately 88% and 87% of total revenue for the six months ended June 30, 2023 and 2022, respectively. International shipments were 1% of total revenue for the three and six months ended June 30, 2023 and 2022.
Employee Retention Credit (ERC)	Employee Retention Credit (ERC) - The Company qualified for federal government assistance through Employee Retention Credit provisions of the Consolidated Appropriations Act of 2021 during 2021 and 2020. The purpose of the Employee Retention Credit was to encourage employers to keep employees on the payroll, even if they were not working during the covered period because of the coronavirus outbreak. These funds were recorded in the Statements of Income as an offset to payroll costs in their respective expense lines and as a tax receivable on the balance sheets. A balance of $40,539 appears as a tax receivable on the balance sheets at June 30, 2023 and December 31, 2022.

Investments (Tables)

Investments (Tables)	6 Months Ended
	Jun. 30, 2023
Investments
Schedule of amortized cost, fair value of investments, and related gross unrealized gains/(losses)	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross Gross ​ ​ ​ ​ Amortized ​ Unrealized ​ Unrealized ​ ​ ​ ​ ​ Cost ​ Losses ​ Gains ​ Fair Value June 30, 2023 ​ ​ ​ ​ Corporate bonds ​ $ 1,500,000 ​ $ (10,472) ​ $ — ​ $ 1,489,528 U.S. government treasuries ​ 509,478 ​ (10,013) ​ — ​ 499,465 Total investments ​ $ 2,009,478 ​ $ (20,485) ​ $ — ​ $ 1,988,993 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Allowance for credit losses ​ (5,000) ​ ​ ​ Total investments, net ​ $ 2,004,478 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2022 ​ ​ ​ ​ Corporate bonds ​ $ 1,500,000 ​ $ (1,924) ​ $ — ​ $ 1,498,076 U.S. government treasuries ​ 489,265 ​ — ​ 2,665 ​ 491,930 Total investments ​ $ 1,989,265 ​ $ (1,924) ​ $ 2,665 ​ $ 1,990,006

Common Stock and Stock Options

Common Stock and Stock Options (Tables)	6 Months Ended
	Jun. 30, 2023
Common Stock and Stock Options
Schedule of share-based compensation, employee stock options, activity	​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ Average ​ ​ Stock ​ Exercise ​ ​ Options ​ Price Outstanding at January 1, 2022 41,304 ​ $ 1.05 Outstanding at December 31, 2022 41,304 ​ $ 1.05 Outstanding at June 30, 2023 41,304 ​ $ 1.05 Options exercisable at December 31, 2022 34,361 ​ $ 1.01 Options exercisable at June 30, 2023 41,304 ​ $ 1.05

Inventories (Tables)

Inventories (Tables)	6 Months Ended
	Jun. 30, 2023
Inventories
Schedule of inventories	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, ​ December 31, ​ 2023 2022 Raw materials ​ $ 619,959 ​ $ 1,375,669 Work-in-process ​ 995,076 ​ 528,631 Finished goods ​ 95,333 ​ 284,048 ​ ​ 1,710,368 ​ 2,188,348 Inventory reserve ​ (12,903) ​ (10,431) ​ ​ $ 1,697,465 ​ $ 2,177,917

Earnings Per Share (Tables)

Earnings Per Share (Tables)	6 Months Ended
	Jun. 30, 2023
Earnings Per Share
Summary of reconciliation of earnings per share calculations	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended June 30, ​ Six months ended June 30, ​ ​ 2023 2022 2023 2022 ​ Net income ​ $ 511,359 ​ $ 664,873 ​ $ 1,049,379 ​ $ 1,049,274 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average common shares outstanding - basic ​ 4,530,207 ​ 4,514,492 ​ 4,527,669 ​ 4,512,396 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Effect of dilution - stock options ​ 30,108 ​ 27,327 ​ 30,194 ​ 27,592 ​ Weighted average shares outstanding - diluted ​ 4,560,315 ​ 4,541,819 ​ 4,557,863 ​ 4,539,988 ​

Income Taxes (Tables)

Income Taxes (Tables)	6 Months Ended
	Jun. 30, 2023
Income Taxes
Schedule of components of the income tax expense	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended June 30, ​ Six months ended June 30, ​ 2023 2022 2023 2022 Federal ​ $ 137,360 ​ $ 76,100 ​ $ 283,734 ​ $ 132,100 State and local ​ 6,986 ​ 7,300 ​ 18,822 ​ 12,100 ​ ​ $ 144,346 ​ $ 83,400 ​ $ 302,556 ​ $ 144,200

Operating Lease (Tables)

Operating Lease (Tables)	6 Months Ended
	Jun. 30, 2023
Operating Lease
Schedule of annual undiscounted cash flows of the operating lease liabilities	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 ​ $ 57,566 ​ ​ 2024 ​ 102,550 ​ ​ Total minimum lease payments ​ ​ 160,116 ​ ​ Less debt discount ​ ​ 6,462 ​ ​ Total operating lease obligations ​ $ 153,654 ​ ​
Schedule of operating lease other information	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 ​ 2022 ​ Operating cash outflows from operating lease - year-to-date ​ $ 51,969 ​ $ 47,736 ​ Weighted average remaining lease term – operating lease ​ 1.4 years 2.4 years Weighted average discount rate – operating lease ​ 5.5 % 5.5 %

Finance Leases (Tables)

Finance Leases (Tables)	6 Months Ended
	Jun. 30, 2023
Finance Leases
Schedule of future minimum lease payments	​ ​ ​ ​ ​ ​ 2023 ​ $ 49,024 ​ 2024 ​ 49,859 ​ Total minimum lease payments ​ 98,883 ​ Less amount representing interest ​ 2,319 ​ Present value of minimum lease payments ​ 96,564 ​ Less current portion ​ 88,510 ​ Finance lease obligations, net of current portion ​ $ 8,054 ​ ​ ​ ​ ​ ​ Weighted average remaining lease term – finance leases ​ ​ 1.1 years Weighted average discount rate – finance leases ​ ​ 4.28 %
Schedule of equipment under finance leases	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, 2023 Dec. 31, 2022 ​ Machinery and equipment ​ $ 385,923 ​ $ 385,923 ​ Less accumulated depreciation and amortization ​ 123,672 ​ 104,376 ​ Net book value ​ $ 262,251 ​ $ 281,547 ​

Business Organization and Pur_2

Business Organization and Purpose (Details)	6 Months Ended
	Jun. 30, 2023 segment
Business Organization and Purpose
Number of operating segments	1

Summary of Significant Accoun_3

Summary of Significant Accounting Policies (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Summary of Significant Accounting Policies
Stock based compensation	$ 395	$ 8,673	$ 45,485	$ 31,972
Accounts receivable Tax - Employee Retention Credit	$ 40,539		$ 40,539		$ 40,539
Geographic Concentration Risk | Sales Revenue, Net | International
Summary of Significant Accounting Policies
Concentration risk, percentage	1%	1%	1%	1%
Photonics industry | Sales Revenue, Net | Top two customers
Summary of Significant Accounting Policies
Concentration risk, percentage			88%	87%

Recent Accounting Pronounceme_2

Recent Accounting Pronouncements (Details) - USD ($)	Jun. 30, 2023	Mar. 31, 2023	Dec. 31, 2022	Jun. 30, 2022	Mar. 31, 2022	Dec. 31, 2021
Schedule of Held-to-Maturity Securities [Line Items]
Stockholders' Equity Attributable to Parent	$ 9,835,513	$ 9,323,759	$ 8,745,649	$ 7,820,550	$ 7,147,004	$ 6,739,304
Period of Adoption, Adjustment
Schedule of Held-to-Maturity Securities [Line Items]
Stockholders' Equity Attributable to Parent			$ (5,000)

Investments - Bond Maturity (De

Investments - Bond Maturity (Details) - Recurring - Fair Value, Inputs, Level 2 [Member]	6 Months Ended
	Jun. 30, 2023
Minimum
Investments
Maturity of bonds (in months)	5 months
Maximum
Investments
Maturity of bonds (in months)	23 months

Investments (Details)

Investments (Details) - Recurring - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Investments
Allowance for credit losses	$ (5,000)
Total investments, net	2,004,478
Level 2
Investments
Amortized Cost, before credit allowance	2,009,478	$ 1,989,265
Gross Unrealized Losses	(20,485)	(1,924)
Gross Unrealized Gains		2,665
Fair value	1,988,993	1,990,006
Corporate bonds | Level 2
Investments
Amortized Cost, before credit allowance	1,500,000	1,500,000
Gross Unrealized Losses	(10,472)	(1,924)
Fair value	1,489,528	1,498,076
U.S. government treasuries | Level 2
Investments
Amortized Cost, before credit allowance	509,478	489,265
Gross Unrealized Losses	(10,013)
Gross Unrealized Gains		2,665
Fair value	$ 499,465	$ 491,930

Common Stock and Stock Option_2

Common Stock and Stock Options - Additional Information (Details) - USD ($)	3 Months Ended				6 Months Ended
	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2022	Mar. 31, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022	Dec. 31, 2021
Common Stock and Stock Options
Stock based compensation	$ 395		$ 8,673		$ 45,485	$ 31,972
Unrecognized compensation expense	$ 0				$ 0
Stock Issued During Period, Value, New Issues		$ 43,908	7,491	$ 22,116
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	$ 1.05				$ 1.05
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term					3 years 1 month 6 days
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number	41,304				41,304		41,304	41,304
Common Stock
Common Stock and Stock Options
Stock Issued During Period, Value, New Issues		$ 43,908	$ 7,491	$ 22,116
Non-employee director | Common Stock
Common Stock and Stock Options
Stock Issued During Period, Shares, New Issues					4,610
Stock Issued During Period, Value, New Issues						$ 14,982
Employee Stock Grants | Common Stock
Common Stock and Stock Options
Stock Issued During Period, Shares, New Issues					10,683	4,500
Stock Issued During Period, Value, New Issues					$ 43,908	$ 14,625

Common Stock and Stock Option_3

Common Stock and Stock Options (Details) - $ / shares	Jun. 30, 2023	Dec. 31, 2022	Dec. 31, 2021
Common Stock and Stock Options
Options	41,304	41,304	41,304
Stock Options, Options exercisable	41,304	34,361
Weighted average option price	$ 1.05	$ 1.05	$ 1.05
Weighted Average Exercise Price, Options exercisable	$ 1.05	$ 1.01

Inventories (Details)

Inventories (Details) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Inventories
Raw materials	$ 619,959	$ 1,375,669
Work-in-process	995,076	528,631
Finished goods	95,333	284,048
Inventory, Gross	1,710,368	2,188,348
Inventory reserve	(12,903)	(10,431)
Inventory, Net	$ 1,697,465	$ 2,177,917

Earnings Per Share - Reconcilia

Earnings Per Share - Reconciliation of Earnings Per Share Calculations (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Earnings Per Share
Income applicable to common stock	$ 511,359	$ 664,873	$ 1,049,379	$ 1,049,274
Weighted average common shares outstanding - basic	4,530,207	4,514,492	4,527,669	4,512,396
Effect of dilution	30,108	27,327	30,194	27,592
Weighted average shares outstanding - diluted	4,560,315	4,541,819	4,557,863	4,539,988

Note Payable (Details)

Note Payable (Details) - Fifth Third Bank - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Debt Instrument
Line of Credit Facility, Maximum Borrowing Capacity		$ 1,000,000
Line of credit	$ 0

Income Taxes - Income tax expen

Income Taxes - Income tax expense (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Income Taxes
Federal	$ 137,360	$ 76,100	$ 283,734	$ 132,100
State and local	6,986	7,300	18,822	12,100
Total	$ 144,346	$ 83,400	$ 302,556	$ 144,200

Income Taxes (Details)

Income Taxes (Details) - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Income Taxes
Deferred Tax Assets, Operating Loss Carryforwards, State and Local					$ 42,000
Operating Loss Carry forward Expiration Year			2023
Net deferred tax asset	$ 0		$ 0		151,164
Deferred tax liability	73,828		73,828
Deferred Tax Assets, Valuation Allowance					$ 0
Income tax expense	$ 144,346	$ 83,400	$ 302,556	$ 144,200
Effective rate			22.40%		21.70%

Operating Lease - Future Minimu

Operating Lease - Future Minimum Lease Payments (Details)	Jun. 30, 2023 USD ($)
Operating Lease
2023	$ 57,566
2024	102,550
Total minimum lease payments	160,116
Less debt discount	6,462
Total operating lease obligations	$ 153,654

Operating Lease (Details)

Operating Lease (Details) - USD ($)	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Operating cash outflows from operating lease - year-to-date	$ 51,969	$ 47,736
Weighted average remaining lease term - operating lease	1 year 4 months 24 days	2 years 4 months 24 days
Weighted average discount rate - operating lease	5.50%	5.50%
Operating lease, renewal term	5 years
Operating lease costs	$ 57,300	$ 56,200
Variable lease costs	33,500	$ 27,500
Minimum
Monthly lease payments	9,200
Maximum
Monthly lease payments	$ 9,700

Finance Leases - Future minimum

Finance Leases - Future minimum lease payments (Details) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Finance Leases
2023	$ 49,024
2024	49,859
Total minimum lease payments	98,883
Less amount representing interest	2,319
Present value of minimum lease payments	96,564
Less current portion	88,510	$ 97,367
Finance lease obligations, net of current portion	$ 8,054	$ 49,149

Finance Leases - Weighted Avera

Finance Leases - Weighted Averages (Details)	Jun. 30, 2023
Finance Leases
Weighted average remaining lease term - finance leases	1 year 1 month 6 days
Weighted average discount rate - finance leases	4.28%

Finance Leases - Equipment unde

Finance Leases - Equipment under finance lease and additional information (Details) - USD ($)	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Finance Leases
Machinery and equipment	$ 385,923		$ 385,923
Less accumulated depreciation and amortization	123,672		104,376
Net book value	$ 262,251		$ 281,547
Finance lease amortization period (in years)	10 years
Finance lease costs	$ 49,951	$ 47,824