UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
x |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) |
|
|
OF THE SECURITIES EXCHANGE ACT OF 1934 |
|
For the quarterly period ended |
JUNE 30, 2015 |
|
OR
¨ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) |
|
|
OF THE SECURITIES EXCHANGE ACT OF 1934 |
|
For the transition period from _________________________to______________________
Commission file number |
0-11668 |
|
INRAD OPTICS, INC. |
(Exact name of registrant as specified in its charter) |
New Jersey |
|
22-2003247 |
(State or other jurisdiction of incorporation |
|
(I.R.S. Employer |
or organization) |
|
Identification Number) |
181
Legrand Avenue, Northvale, NJ 07647 |
(Address of principal executive offices) |
(Zip Code) |
|
(201)
767-1910 |
(Registrant’s telephone number, including area code) |
|
|
(Former name, former address and formal fiscal year, if changed since last report) |
Indicate by check mark
whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes x No ¨
Indicate by check mark
whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data file required
to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding
12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x
No ¨
Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of “large
accelerated filer, accelerated filer and smaller reporting company” in Rule 12b-2 of the exchange Act. (Check one):
Large accelerated filer ¨ |
Accelerated filer ¨ |
Non-accelerated filer ¨ |
Smaller reporting company x |
Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ¨ No x
The number of shares of the registrant’s
common stock outstanding, $0.01 par value, as of August 14, 2015 was 12,733,208
INRAD OPTICS, INC AND SUBSIDIARIES
INDEX
INRAD OPTICS, INC AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
| |
June 30, | | |
December 31, | |
| |
2015 | | |
2014 | |
| |
(Unaudited) | | |
(Audited) | |
| |
| | |
| |
Assets | |
| | | |
| | |
Current assets: | |
| | | |
| | |
Cash and cash equivalents | |
$ | 771,107 | | |
$ | 1,003,254 | |
Accounts receivable (net of allowance for doubtful accounts of $15,000 in 2015 and 2014) | |
| 1,356,280 | | |
| 1,126,655 | |
Inventories, net | |
| 2,985,829 | | |
| 2,686,721 | |
Other current assets | |
| 175,830 | | |
| 142,576 | |
Total current assets | |
| 5,289,046 | | |
| 4,959,206 | |
| |
| | | |
| | |
Plant and equipment: | |
| | | |
| | |
Plant and equipment, at cost | |
| 15,768,838 | | |
| 1,5741,243 | |
Less: Accumulated depreciation and amortization | |
| (14,421,877 | ) | |
| (14,172,811 | ) |
Total plant and equipment | |
| 1,346,961 | | |
| 1,568,432 | |
| |
| | | |
| | |
Precious Metals | |
| 553,925 | | |
| 553,925 | |
Intangible Assets, net | |
| 240,915 | | |
| 280,196 | |
Other Assets | |
| 34,656 | | |
| 34,656 | |
| |
| | | |
| | |
Total Assets | |
$ | 7,465,503 | | |
$ | 7,396,415 | |
| |
| | | |
| | |
Liabilities and Shareholders’ Equity | |
| | | |
| | |
Current Liabilities: | |
| | | |
| | |
Current portion of other long term notes | |
$ | 164,100 | | |
$ | 164,100 | |
Accounts payable and accrued liabilities | |
| 1,299,059 | | |
| 1,017,755 | |
Customer advances | |
| 139,132 | | |
| 170,166 | |
Total current liabilities | |
| 1,602,291 | | |
| 1,352,021 | |
| |
| | | |
| | |
Related Party Convertible Notes Payable | |
| 2,500,000 | | |
| 2,500,000 | |
| |
| | | |
| | |
Other Long Term Notes, net of current portion | |
| 467,880 | | |
| 548,747 | |
Total liabilities | |
| 4,570,171 | | |
| 4,400,768 | |
| |
| | | |
| | |
Commitments | |
| | | |
| | |
| |
| | | |
| | |
Shareholders’ Equity: | |
| | | |
| | |
Common stock: $.01 par value; 60,000,000 authorized shares; 12,737,808 Shares issued at June 30, 2015 and 12,354,093 issued at December 31, 2014 | |
| 127,380 | | |
| 123,543 | |
Capital in excess of par value | |
| 18,526,133 | | |
| 18,437,405 | |
Accumulated deficit | |
| (15,743,231 | ) | |
| (15,550,351 | ) |
| |
| 2,910,282 | | |
| 3,010,597 | |
Less - Common stock in treasury, at cost (4,600 shares) | |
| (14,950 | ) | |
| (14,950 | ) |
Total shareholders’ equity | |
| 2,895,332 | | |
| 2,995,647 | |
| |
| | | |
| | |
Total Liabilities and Shareholders’ Equity | |
$ | 7,465,503 | | |
$ | 7,396,415 | |
See Notes to Condensed Consolidated Financial
Statements (Unaudited)
INRAD
OPTICS, INC AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| |
Three Months Ended June 30, | | |
Six Months Ended June 30, | |
| |
2015 | | |
2014 | | |
2015 | | |
2014 | |
| |
| | |
| | |
| | |
| |
Total revenue | |
$ | 2,765,365 | | |
$ | 2,227,546 | | |
$ | 5,295,590 | | |
$ | 4,131,926 | |
| |
| | | |
| | | |
| | | |
| | |
Cost and expenses: | |
| | | |
| | | |
| | | |
| | |
Cost of goods sold | |
| 2,231,330 | | |
| 2,307,000 | | |
| 4,069,771 | | |
| 4,288,678 | |
Restructuring costs | |
| — | | |
| 61,951 | | |
| — | | |
| 120,616 | |
Selling, general and administrative expenses | |
| 700,496 | | |
| 844,581 | | |
| 1,329,753 | | |
| 1,603,686 | |
| |
| 2,931,826 | | |
| 3,213,532 | | |
| 5,399,524 | | |
| 6,012,980 | |
| |
| | | |
| | | |
| | | |
| | |
Loss from operations | |
| (166,461 | ) | |
| (985,986 | ) | |
| (103,934 | ) | |
| (1,881,054 | ) |
| |
| | | |
| | | |
| | | |
| | |
Other expense: | |
| | | |
| | | |
| | | |
| | |
Interest expense—net | |
| (44,518 | ) | |
| (45,308 | ) | |
| (88,946 | ) | |
| (90,183 | ) |
Gain on sale of plant and equipment | |
| — | | |
| — | | |
| — | | |
| 65,074 | |
| |
| (44,518 | ) | |
| (45,308 | ) | |
| (88,946 | ) | |
| (25,109 | ) |
| |
| | | |
| | | |
| | | |
| | |
Net loss before income taxes | |
| (210,979 | ) | |
| (1,031,294 | ) | |
| (192,880 | ) | |
| (1,906,163 | ) |
| |
| | | |
| | | |
| | | |
| | |
Income tax (provision) benefit | |
| — | | |
| — | | |
| — | | |
| — | |
| |
| | | |
| | | |
| | | |
| | |
Net loss | |
$ | (210,979 | ) | |
$ | (1,031,294 | ) | |
$ | (192,880 | ) | |
| (1,906,163 | ) |
| |
| | | |
| | | |
| | | |
| | |
Net loss per common share— basic and diluted | |
$ | (0.02 | ) | |
$ | (0.08 | ) | |
$ | (0.02 | ) | |
$ | (0.16 | ) |
| |
| | | |
| | | |
| | | |
| | |
Weighted average shares outstanding— basic and diluted | |
| 12,733,208 | | |
| 12,349,490 | | |
| 12,459,126 | | |
| 12,133,666 | |
See Notes to Condensed Consolidated Financial
Statements (Unaudited)
INRAD OPTICS, INC AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS
(Unaudited)
| |
Six
Months Ended June 30, | |
| |
2015 | | |
2014 | |
| |
| | |
| |
Cash flows from operating activities: | |
| | | |
| | |
Net (loss) | |
$ | (192,880 | ) | |
$ | (1,906,163 | ) |
| |
| | | |
| | |
Adjustments to reconcile net
(loss) to net cash (used in) operating activities: | |
| | | |
| | |
Depreciation and amortization | |
| 288,347 | | |
| 295,721 | |
401K common stock contribution | |
| 79,536 | | |
| 71,255 | |
Gain on sale of plant and equipment | |
| — | | |
| (65,074 | ) |
Stock based compensation | |
| 13,028 | | |
| 57,964 | |
Changes in operating assets and liabilities: | |
| | | |
| | |
Accounts receivable | |
| (229,625 | ) | |
| 115,915 | |
Inventories, net | |
| (299,108 | ) | |
| 212,137 | |
Other current assets | |
| (33,254 | ) | |
| 41,172 | |
Accounts payable and accrued liabilities | |
| 281,305 | | |
| (48,427 | ) |
Customer advances | |
| (31,034 | ) | |
| 104,586 | |
Total adjustments and changes | |
| 69,195 | | |
| 785,249 | |
Net cash (used in) operating activities | |
| (123,685 | ) | |
| (1,120,914 | ) |
| |
| | | |
| | |
Cash flows from investing activities: | |
| | | |
| | |
Capital expenditures | |
| (27,595 | ) | |
| (362,848 | ) |
Purchase of precious metal tools | |
| — | | |
| (8,716 | ) |
Proceeds from sale of plant and equipment | |
| — | | |
| 78,380 | |
Net cash (used in) investing activities | |
| (27,595 | ) | |
| (293,184 | ) |
| |
| | | |
| | |
Cash flows from financing activities: | |
| | | |
| | |
Principal payments on notes payable-other | |
| (80,867 | ) | |
| (77,529 | ) |
Net cash (used in) financing activities | |
| (80,867 | ) | |
| (77,529 | ) |
| |
| | | |
| | |
Net (decrease) in cash and cash equivalents | |
| (232,147 | ) | |
| (1,491,627 | ) |
| |
| | | |
| | |
Cash and cash equivalents at beginning of period | |
| 1,003,254 | | |
| 2,451,263 | |
| |
| | | |
| | |
Cash and cash equivalents at end of period | |
$ | 771,107 | | |
$ | 959,636 | |
| |
| | | |
| | |
Supplemental Disclosure of Cash Flow Information: | |
| | | |
| | |
Interest paid | |
$ | 89,385 | | |
$ | 55,000 | |
Income taxes paid | |
$ | 1,800 | | |
$ | 2,000 | |
See Notes to Condensed Consolidated Financial
Statements (Unaudited)
INRAD OPTICS, INC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(Unaudited)
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited condensed consolidated
financial statements include the accounts of Inrad Optics, Inc. and its subsidiaries (collectively, the “Company”).
All significant intercompany balances and transactions have been eliminated.
The condensed consolidated
financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”)
for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly,
they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the
opinion of management, all adjustments of a normal recurring nature considered necessary for a fair presentation have been included.
The results of operations of any interim period are not necessarily indicative of the results of operations to be expected for
the full fiscal year. For further information, refer to the consolidated financial statements and accompanying footnotes
included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014.
In preparing these consolidated financial statements,
the Company has evaluated events and transactions for potential recognition or disclosure through the date the consolidated financial
statements were issued.
Management Estimates
These unaudited condensed consolidated
financial statements and related disclosures have been prepared in conformity with U.S. GAAP which requires management to
make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of revenues and expenses reported in those financial
statements. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors,
including the current economic environment, and makes adjustments when facts and circumstances dictate. As future events
and their effects cannot be determined with precision, actual results could differ significantly from those estimates and assumptions.
Significant changes, if any, in those estimates resulting from continuing changes in the economic environment will be reflected
in the consolidated financial statements in future periods.
Inventories
Inventories are stated at the lower of cost
(first-in-first-out basis) or market. The Company records a reserve for slow moving inventory as a charge against earnings for
all products identified as surplus, slow-moving or discontinued. Excess work-in-process costs are charged against earnings whenever
estimated costs-of-completion exceed unbilled revenues.
Inventories are comprised of the following
and are shown net of inventory reserves, in thousands:
| |
June 30, 2015 | | |
December 31, 2014 | |
| |
(Unaudited) | | |
| |
Raw materials | |
$ | 1,031 | | |
$ | 1,049 | |
Work in process, including manufactured parts and components | |
| 1,236 | | |
| 956 | |
Finished goods | |
| 719 | | |
| 682 | |
| |
$ | 2,986 | | |
$ | 2,687 | |
Income Taxes
The Company recognizes deferred tax assets
and liabilities for the expected future tax consequences of events that have been recognized in the Company’s financial statements
or tax returns. Deferred tax assets and liabilities are determined based on the difference between the financial statements carrying
amounts and the tax basis of assets and liabilities using enacted tax rates in effect in the years in which the differences are
expected to reverse.
For the three and six months ended June 30,
2015 and 2014 the Company did not record a current provision for either state or federal income tax due to the losses incurred
for both income tax and financial reporting purposes or the availability of net operating loss carry-forwards to offset against
federal and state income tax.
In evaluating the Company’s ability to
recover deferred tax assets in future periods, management considers the available positive and negative factors, including the
Company’s recent operating results, the existence of cumulative losses and near term forecasts of future taxable income consistent
with the plans and estimates that management uses to manage the underlying business. A significant piece of objective negative
evidence evaluated was the cumulative loss incurred by the Company over the three-year period ended December 31, 2014. Such objective
evidence limits the ability to consider other subjective evidence such as our projections for future growth.
On the basis of this evaluation as of June
30, 2015, the Company’s management concluded that it is more likely than not that the Company will not be able to realize
any portion of the benefit on the net deferred tax balance of $4,685,000 and therefore the Company continues to maintain a valuation
allowance for the full amount of the net deferred tax balance.
When sufficient
positive evidence exists, the Company’s income tax expense will be charged with the increase or decrease in its valuation
allowance. An increase or reversal of the Company’s valuation allowance could have a significant negative or positive impact
on the Company’s future earnings.
Net (Loss) Income per Common Share
Basic net (loss) income per common share is
computed by dividing net (loss) income by the weighted average number of common shares outstanding during the period. Diluted net
(loss) income per common share is computed by dividing net (loss) income by the weighted average number of common shares and common
stock equivalents outstanding, calculated on the treasury stock method for options, stock grants and warrants using the average
market prices during the period, including potential common shares issuable upon conversion of outstanding convertible notes, except
if the effect on the per share amounts is anti-dilutive.
For the three months and six months ended June
30, 2015, all common stock equivalents were excluded from the computation of diluted net loss per share because their effect is
anti-dilutive. This included 2,500,000 common shares and 1,875,000 warrants issuable upon conversion of outstanding related party
convertible notes in each respective period, in addition to 829,710 common stock options and grants, in each respective period.
For the three and six months ended June 30,
2014, all common stock equivalents were excluded from the computation of diluted net loss per share because their effect is anti-dilutive.
This included 2,500,000 common shares and 1,875,000 warrants issuable upon conversion of outstanding related party convertible
notes in each respective period, in addition to 923,651 common stock options and grants, in each respective period.
Stock-Based Compensation
Stock-based compensation expense is estimated
at the grant date based on the fair value of the award. The Company estimates the fair value of stock options granted using the
Black-Scholes option pricing model. The fair value of restricted stock units granted is based on the closing market price of the
Company’s common stock on the date of the grant. The fair value of these awards, adjusted for estimated forfeitures, is amortized
over the requisite service period of the award, which is generally the vesting period.
Recently Adopted Accounting Standards
In April 2015, the FASB issued ASU 2015-03, Interest-Imputation
of Interest (Subtopic 835-30) (“ASU 2015-03”). ASU 2015-03 was issued to simplify the presentation of debt issuance
costs. The guidance requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet
as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement
guidance for debt issuance costs are not affected by these amendments. This guidance should be applied on a retrospective basis,
wherein the balance sheet of each individual period presented should be adjusted to reflect the period-specific effects of applying
the new guidance. The guidance will be effective for financial statements issued for fiscal years beginning after December 15,
2015, and interim periods within those fiscal years. Early adoption is permitted for financial statements that have not been previously
issued. The adoption of this amendment is not expected to have a material impact on the Company’s consolidated financial
statements.
In January 2015, the FASB issued ASU 2015-01, Income Statement –
Extraordinary and Unusual Items (Subtopic 225-20) (“ASU 2015-01”). ASU 2015-01 changed the requirements for reporting
extraordinary and unusual items in the income statement. The update eliminates the concept of extraordinary items. The presentation
and disclosure guidance for items that are unusual in nature or occur infrequently will be retained and will be expanded to include
items that are both unusual in nature and infrequently occurring. A reporting entity may apply the amendments prospectively or
retrospectively to all periods presented in the financial statements. The guidance will be effective for fiscal years, and interim
periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted provided that the guidance is
applied from the beginning of the fiscal year of adoption. The adoption of this newly issued guidance is not expected to have an
impact to our consolidated financial statements.
In August 2014, the Financial Accounting Standards Board (the “FASB”)
issued authoritative accounting guidance related to management’s responsibility to evaluate whether there is substantial
doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. Management’s
evaluation should be based on relevant conditions and events that are known and reasonably knowable at the date that the financial
statements are issued. In doing so, the amendments should reduce diversity in the timing and content of footnote disclosures. This
guidance is effective for public and non-public entities for annual periods ending after December 15, 2016, and interim periods
thereafter. Early adoption is permitted. The Company is currently assessing the expected impact, if any, that this Accounting Standards
Update will have on its consolidated financial statements.
In May 2014, the Financial Accounting Standards Board (the “FASB”)
issued an Accounting Standards Update (“ASU”) which supersedes virtually all existing revenue recognition guidance
under U.S. GAAP. The update's core principle is that an entity should recognize revenue to depict the transfer of promised goods
or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for
those goods or services. In July 2015, the FASB deferred the effective date for annual reporting periods beginning after December
15, 2017 (including interim periods within those periods). Early adoption is permitted to the original effective date of December
15, 2016, (including interim periods within those periods). The Company is currently assessing the potential impact of adoption
on its consolidated financial statements.
NOTE 2 – EQUITY COMPENSATION PROGRAM AND STOCK
BASED COMPENSATION
The Company's results of operations for the
three months ended June 30, 2015 and 2014 include stock-based compensation expense for stock option grants totaling $6,548 and
$24,425, respectively. Such amounts have been included in the accompanying Condensed Consolidated Statements of Operations within
cost of goods sold in the amount of $1,216 ($11,000 for 2014), and selling, general and administrative expenses in the amount of
$5,332 ($13,425 for 2014).
The Company's results of operations for the
six months ended June 30, 2015 and 2014 include stock-based compensation expense for stock option grants totaling $13,028 and $56,752,
respectively. Such amounts have been included in the accompanying Condensed Consolidated Statements of Operations within cost of
goods sold in the amount of $2,364 ($27,190 for 2014), and selling, general and administrative expenses in the amount of $10,664
($29,562 for 2014).
As of June 30, 2015 and 2014, there were $38,469
and $67,629 of unrecognized compensation cost, net of estimated forfeitures, related to non-vested stock options, which are expected
to be recognized over a weighted average period of approximately 1.4 years and 1.2 years, respectively.
There were 133,000 and 103,000 stock options
granted during the six months ended June 30, 2015 and 2014. The following range of weighted-average assumptions were used to determine
the fair value of stock option grants during the six months ended June 30, 2015 and 2014:
| |
Six Months Ended | |
| |
June 30, | |
| |
2015 | | |
2014 | |
Expected Dividend yield | |
| — | % | |
| — | % |
Expected Volatility | |
| 122 -127 | % | |
| 116 | % |
Risk-free interest rate | |
| 2.0 | % | |
| 1.9 | % |
Expected term | |
| 10 years | | |
| 10 years | |
The following table represents stock options
granted, exercised and forfeited during the six month period ended June 30, 2015:
Stock Options | |
Number of Options | | |
Weighted Average Exercise Price per Option | | |
Weighted Average Remaining Contractual Term (years) | | |
Aggregate Intrinsic Value | |
Outstanding at January 1, 2015 | |
| 877,817 | | |
$ | .93 | | |
| 5.1 | | |
$ | — | |
Granted | |
| 133,000 | | |
| .20 | | |
| | | |
| | |
Exercised | |
| — | | |
| — | | |
| | | |
| | |
Expired/Forfeited | |
| (181,107 | ) | |
| 1.08 | | |
| | | |
| | |
| |
| | | |
| | | |
| | | |
| | |
Outstanding at June 30, 2015 | |
| 829,710 | | |
$ | .78 | | |
| 5.3 | | |
$ | 20,113 | |
The following table represents
non-vested stock options granted, vested and forfeited for the six months ended June 30, 2015.
| |
Options | | |
Weighted-Average Grant-Date Fair Value ($) | |
Non-vested - January 1, 2015 | |
| 150,059 | | |
| 0.27 | |
Granted | |
| 133,000 | | |
$ | 0.19 | |
Vested | |
| (49,330 | ) | |
$ | 0.26 | |
Forfeited | |
| (16,667 | ) | |
$ | 0.23 | |
Non-vested – June 30, 2015 | |
| 217,062 | | |
$ | 0.22 | |
The total
fair value of options vested during the six months ended June 30, 2015 and 2014 was $13,036 and $65,993, respectively.
| c) | Restricted Stock Unit Awards |
There were no grants of restricted stock units
granted under the 2010 Equity Compensation Program during the six months ended June 30, 2015 and 2014.
The Company's results of operations for the
six months ended June 30, 2015 and 2014 include stock-based compensation expense for restricted stock unit grants totaling $0
and $1,212, respectively, and such amounts have been included in the accompanying Consolidated Statements of Operations within
selling, general and administrative expenses.
NOTE 3 – STOCKHOLDERS’ EQUITY
In April 2015, the Company issued an additional
383,715 common shares to the Inrad Optics 401k plan as a match to employee contributions for 2014.
NOTE 4 – RELATED PARTY TRANSACTIONS
On July 29, 2014, the maturity dates of a $1,500,000
Subordinated Convertible Promissory Note to Clarex Limited (“Clarex”) and a $1,000,000 Subordinated Convertible Promissory
Note to an affiliate of Clarex were each extended to April 1, 2017 from April 1, 2015. The notes bear interest at 6%. Interest
accrues yearly and is payable on maturity. Unpaid interest, along with principal, may be converted into securities of the
Company as follows: the notes are convertible in the aggregate into 1,500,000 units and 1,000,000 units, respectively, with each
unit consisting of one share of common stock and one warrant. Each warrant allows the holder to acquire 0.75 shares of common stock
at a price of $1.35 per share. As part of the agreement, the expiration dates of the warrants were extended from April 1, 2018
to April 1, 2020. The Company is currently paying interest of $37,500 quarterly.
NOTE 5 – OTHER LONG TERM NOTES
On July 26, 2012, the Company entered into
a term loan agreement in the amount of $750,000 with Valley National Bank, Wayne, NJ. The loan is payable in equal monthly installments
over five years beginning in August 2012 and bears an interest rate of 4.35% annually. The loan is secured with a security interest
in equipment. The Company also has a note payable to the U.S. Small Business Administration which bears interest at the rate of
4.0% and is due in 2032.
Other Long Term Notes consist of the following:
| |
June 30, | | |
December 31, | |
| |
2015 | | |
2014 | |
| |
(in thousands) | |
Term Note Payable, payable in equal monthly installments of $13,953 and bearing an interest rate of 4.35% and expiring in July 2017 | |
$ | 333 | | |
$ | 408 | |
U.S. Small Business Administration term note payable in equal monthly installments of $1,922 and bearing an interest rate of 4.0% and expiring in April 2032. | |
$ | 299 | | |
$ | 305 | |
| |
| 632 | | |
| 713 | |
Less current portion | |
| (164 | ) | |
| (164 | ) |
Long-term debt, excluding current portion | |
$ | 468 | | |
$ | 549 | |
NOTE 6 – RESTRUCTURING COSTS
The Company completed the transfer of the Sarasota
operations to the Northvale, New Jersey facility and the Florida facility was closed as of March 31, 2014.
Restructuring charges of $62,000 and $121,000
were expensed in the three and six months ended June 30, 2014, respectively. In addition, cash expenditures related to the consolidation
were $247,000 and $371,000 for the three months and six months ended June 30, 2014, respectively. The consolidation of the operation
was completed by December 31, 2014 and there were no restructuring charges in the six months ended June 30, 2015.
| ITEM 2. | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS |
Caution Regarding Forward Looking Statements
This Quarterly Report contains
forward-looking statements as that term is defined in the federal securities laws. The Company wishes to insure that any forward-looking
statements are accompanied by meaningful cautionary statements in order to comply with the terms of the safe harbor provided by
the Private Securities Litigation Reform Act of 1995. The events described in the forward-looking statements contained in this
Quarterly Report may not occur. Generally, these statements relate to business plans or strategies, projected or anticipated benefits
or other consequences of the Company’s plans or strategies, projected or anticipated benefits of acquisitions made by the
Company, projections involving anticipated revenues, earnings, or other aspects of the Company’s operating results. The words
“may”, “will”, “expect”, “believe”, “anticipate”, “project”,
“plan”, “intend”, “estimate”, and “continue”, and their opposites and similar expressions
are intended to identify forward-looking statements. The Company cautions you that these statements are not guarantees of future
performance or events and are subject to a number of uncertainties, risks, and other influences, many of which are beyond the Company’s
control, that may influence the accuracy of the statements and the projections upon which the statements are based. Factors which
may affect the Company’s results include, but are not limited to, the risks and uncertainties discussed in Items 1A, 7 and
7A of the Company’s most recent Annual Report on Form 10-K for the year ended December 31, 2014, as filed with the Securities
and Exchange Commission on April 13, 2015. Any one or more of these uncertainties, risks, and other influences could materially
affect the Company’s results of operations and whether forward-looking statements made by the Company ultimately prove to
be accurate. Readers are further cautioned that the Company’s financial results can vary from quarter to quarter, and the
financial results for any period may not necessarily be indicative of future results. The foregoing is not intended to be an exhaustive
list of all factors that could cause actual results to differ materially from those expressed in forward-looking statements made
by the Company. The Company’s actual results, performance and achievements could differ materially from those expressed or
implied in these forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward looking
statements, whether from new information, future events, or otherwise.
Critical Accounting Policies and Estimates
Our significant accounting policies are described
in Note 1 of the accompanying consolidated financial statements and further discussed in our annual financial statements included
in our annual report on Form 10-K for the year ended December 31, 2014. In preparing our condensed consolidated financial statements,
we made estimates and judgments that affect the results of our operations and the value of assets and liabilities we report. These
include estimates used in evaluating intangibles for impairment such as market multiples used in determining the fair value of
reporting units, discount rates applicable in determining net present values of future cash flows, projections of future sales,
earnings and cash flow and capital expenditures. It also includes estimates about the amount and timing of future taxable income
in determining the Company’s valuation allowance for deferred income tax assets. Our actual results may differ from these
estimates under different assumptions or conditions.
For additional information regarding our critical
accounting policies and estimates, see the section entitled “Management’s Discussion and Analysis of Financial Condition
and Results of Operations” in our annual report filed with the Securities and Exchange Commission on Form 10-K for the year
ended December 31, 2014.
Results of Operations
Inrad Optics, Inc.’s business falls into
two main categories: Optical Components and Laser System Devices/Instrumentation.
The Optical Components category is focused
on custom optics manufacturing. The Company specializes in high-end precision components. It develops, manufactures and delivers
precision custom optics and thin film optical coating services through its Custom and Metal Optics operations. Glass, metal, and
crystal substrates are processed using modern manufacturing equipment, complex processes and techniques to manufacture components,
deposit optical thin films, and assemble sub-components used in advanced photonic systems. The majority of custom optical components
and optical coating services supplied are used in inspection, process control systems, defense and aerospace electro-optical systems,
laser system applications, industrial scanners, and medical system applications.
The Laser System Devices/Instrumentation category
includes the growth and fabrication of crystalline materials with electro-optic (EO) and non-linear optical properties for use
in both standard and custom products. This category also includes the manufactured crystal based devices and associated instrumentation.
The majority of crystals, crystal components and laser devices manufactured are used in laser systems, defense EO systems, medical
lasers and R&D applications by engineers within corporations, universities and national laboratories.
The Company operates a manufacturing facility
in Northvale, New Jersey and has its corporate offices in the same location.
Revenue
Sales for the three months ended June 30, 2015
increased 24.1% to $2,765,000 from $2,228,000 for the comparable three months last year. For the six months ended June 30, 2015,
sales were $5,296,000, an increase of 28.2%, compared to $4,132,000 for the six months ended June 30, 2014. By business category,
sales of Optical Components increased by 35.9% while sales of Laser Devices/Instrumentation products increased by 26.1% for the
six months ended June 30, 2015 compared with the prior year.
Sales to customers in the process control and
metrology market increased by 82.8% and 39.8% for the second quarter and six months ended June 30, 2015 compared to the same periods
last year and was mainly attributable to increased shipments to established customers, in addition to significant growth in new
accounts.
Sales to customers in the defense market decreased
by 8.2% from the second quarter of 2015 but were up by 52.5% for the six months ended June 30, 2015. The year-to-date increase
was primarily due to increased order levels from two large defense contractors offset by a decline in shipments to another large
defense contractor in the second quarter of 2015 compared to the respective periods in 2014.
Sales in the laser systems and related products
market decreased by 33.4% for the second quarter of 2015 vs the second quarter of 2014. Sales to for the six months ended June
30, 2015 decreased 6.5% compared to the six months ended June 30, 2014.
Although the university and national lab market
is the company’s smallest market it had a sales increase of 1.4% and 43.6% in the three and six months ended June 30, 2015
compared to the same periods last year.
In the six months ended June 30, 2015, the
Company had one major customer representing more than 10% of total sales compared with two major customers in the six months ended
June 30, 2014.
The Company’s top five customers represented
43.3% of total sales in the six month period ended June 30, 2015, compared to 46.7% in the same period in 2014. However, sales
for the top five customers group were up 20.4% from the comparable period last year.
Orders booked during the first six months of
2015 were $5.1 million compared to $5.4 million in the comparable period last year.
Order backlog increased to $6.3 million at
June 30, 2015, compared to $5.6 million at June 30, 2014.
Cost of Goods Sold
For the three months ended June 30, 2015, cost
of goods sold was $2,231,000 compared to $2,369,000 in the same quarter in 2014, a decrease of $138,000 or 5.8%. For the six months
ended June 30, 2015, cost of goods sold were $4,070,000, down by $340,000 or 7.7% compared to $4,409,000 in the same period in
2014.
Cost of goods sold in the three and six months
ended June 30, 2014 include $62,000 and $121,000, respectively, of restructuring costs related to the relocation of the Florida
operations as discussed in Note 6 to the Condensed Consolidated Financial Statements.
For the three months ended June 30, 2015, manufacturing
salaries and wages and related fringe benefits were relatively unchanged from the three months ended June 30, 2014 despite the
increased sales volume in 2015. For the six months ended June 30, 2015, manufacturing salaries and wages and related fringe benefits
decreased by 3.3% or approximately $77,000 from the six months ended June 30, 2014. The decrease in 2015 primarily reflects cost
savings resulting from the Company’s consolidation of the Florida operations in the Northvale facility which was completed
in March of 2014.
Excluding one-time restructuring costs in 2014,
manufacturing expenses decreased by approximately 31.6% and 35% in the second quarter and six months ended June 30, 2015 versus
the three and six months ended June 30, 2014. The reduction was mainly due to cost savings from the consolidation of the Company’s
Florida operations, as noted above.
Gross profit for the three months ended June
30, 2015 was $534,000 or 19.3% of sales compared to $(141,000) or (6.3) % in the same quarter last year. Gross profit for the six
months ended June 30, 2015 and 2014 were $1,226,000 or 23.1% and $(227,000) or (6.7%) of sales, respectively.
Selling, General and Administrative Expenses
Selling, general and administrative expenses
(“SG&A” expenses) in the three and six months ended June 30, 2015 amounted to $700,000 or 25.3% of sales and 1,330,000
or 25.1% of sales, respectively. This compared to $845,000 or 37.9% of sales and $1,604,000 or 38.8% of sales, respectively, for
the same periods in 2014.
For the three and six months ended June 30,
2015 SG&A salary, wages and fringe benefits decreased by approximately $118,000 and $223,000, respectively, reflecting lower
head count levels compared to the same periods in 2014 and partially reflects planned reductions from the consolidation of the
Florida facility in Northvale in 2014.
Other SG&A expenses were unchanged for
the three and six months ended June 30, 2015 compared to the three and six months ended June 30, 2014.
Loss from Operations
The Company had a loss from operations of $166,000
in the three months ended June 30, 2015 compared with an operating loss of $986,000 in the three months ended June 30, 2014. For
the six months ended June 30, 2015, the Company had an operating loss of $104,000 compared with an operating loss of $1,881,000
in the same period last year. The decrease in the operating loss for the six months ended June 30, 2015 compared to the same period
last year primarily reflects the significant increase in sales revenue, the more profitable product mix, and the impact of cost
reductions from the consolidation of the Company’s operations into the Northvale facility, as compared to the same period
last year. The operating losses for the three and six months ended June 30, 2014 include $62,000 and $121,000, respectively, of
restructuring costs related to the relocation and consolidation of the Florida operations into the Northvale facility.
Other Income and Expense
Interest expense for the three months ended
June 30, 2015 was $45,000 compared to $45,000 in the same period in 2014. Interest expense for the six months ended June 30, 2014
was $89,000 compared to $90,000 in the same period in 2014.
In the six months ended June 30, 2014, the
Company sold surplus machinery and recorded a gain of $65,000.
Income Taxes
The Company recognizes deferred tax assets
and liabilities for the expected future tax consequences of events that have been recognized in the Company’s financial statements
or tax returns. Deferred tax assets and liabilities are determined based on the difference between the financial statements carrying
amounts and the tax basis of assets and liabilities using enacted tax rates in effect in the years in which the differences are
expected to reverse.
For the three and six months ended June 30,
2015 and 2014, the Company did not record a current provision for either state or federal income tax due to the losses incurred
for both income tax and financial reporting purposes or the availability of net operating loss carry-forwards to offset against
federal and state income tax.
In evaluating the Company’s ability to
recover deferred tax assets in future periods, management considers the available positive and negative factors, including the
Company’s recent operating results, the existence of cumulative losses and near term forecasts of future taxable income consistent
with the plans and estimates that management uses to manage the underlying business. A significant piece of objective negative
evidence evaluated was the cumulative loss incurred by the Company over the three-year period ended December 31, 2014. Such objective
evidence limits the ability to consider other subjective evidence such as our projections for future growth.
As a result, the Company’s management
concluded that it is more likely than not that the Company will not be able to realize any portion of the benefit on the net deferred
tax balance of $4,685,000 and therefore the Company maintains a valuation allowance for the full amount of the net deferred tax
balance.
Net Income (Loss)
For the three and six months ended June 30,
2015, the Company had a net loss of $211,000 and $193,000, respectively, compared to a net loss of $1,031,000 and $1,906,000, respectively,
for the same periods in 2014 reflecting higher sales, lower expenses and improved margins due to a more profitable product mix.
Liquidity and Capital Resources
The Company’s primary source of liquidity
is cash and cash equivalents and on-going collection of accounts receivable. The Company’s major use of cash in the past
two years has been for financing of operations, capital expenditures mainly related to the consolidation of the Florida facility,
and repayment and servicing of outstanding debt.
As of June 30, 2015 and December 31, 2014,
the Company had cash and cash equivalents of $771,000 and $1,003,000, respectively.
On July 26, 2012, the Company entered into
a term loan agreement with Valley National Bank, Wayne, NJ, in the amount of $750,000. The loan is secured with a security interest
in equipment acquired by the Company in the amount of $825,000 which enhances the Company’s thin film coating capabilities.
The loan is repayable in equal monthly installments over five years beginning in August 2012 and bears an annual interest rate
of 4.35%.
On July 29, 2014, the maturity dates of a $1,500,000
Subordinated Convertible Promissory Note to Clarex Limited (“Clarex”) and a $1,000,000 Subordinated Convertible Promissory
Note to an affiliate of Clarex were each extended to April 1, 2017 from April 1, 2015. The notes bear interest at 6%. Interest
accrues yearly and is payable on maturity. Unpaid interest, along with principal, may be converted into securities of the
Company as follows: the notes are convertible in the aggregate into 1,500,000 units and 1,000,000 units, respectively, with each
unit consisting of one share of common stock and one warrant. Each warrant allows the holder to acquire 0.75 shares of common stock
at a price of $1.35 per share. As part of the agreement, the expiration dates of the warrants were extended from April 1, 2018
to April 1, 2020. The Company is currently paying interest of $37,500 quarterly through the maturity date of the notes to satisfy
the amounts of interest accruing in each quarter.
The following table summarizes net cash (used
in) operating, investing and financing activities for the six months ended June 30, 2015 and 2014:
| |
Six Months Ended | |
| |
June 30, | |
| |
2015 | | |
2014 | |
| |
(In thousands) | |
| |
| | |
| |
Net cash (used in) operating activities | |
$ | (124 | ) | |
$ | (1,121 | ) |
Net cash (used in) investing activities | |
| (27 | ) | |
| (293 | ) |
Net cash (used in) financing activities | |
| (81 | ) | |
| (78 | ) |
| |
| | | |
| | |
Net (decrease) in cash and cash equivalents | |
$ | (232 | ) | |
$ | (1,492 | ) |
Net cash used in operating activities was $124,000
for the six months ended June 30, 2015 compared to $1,121,000 in the same period last year.
The decrease in net cash used in operating
activities in the six months ended June 30, 2015 compared to 2014 resulted primarily from the Company’s improved sales and
lower operating losses in the current period.
Net cash used in investing activities was $27,000
during the six months ended June 30, 2015 compared to $293,000 last year. Capital expenditures for the six months ended June 30,
2015 and 2014 were $27,000 and $363,000, respectively. The expenditures in 2015 were primarily for leasehold improvements and operating
equipment. The expenditures in 2014 were primarily incurred to refurbish the Northvale operating facility for the relocation of
the metal optics operation from Florida. The Company also sold surplus machinery during the six months ended June 30, 2014 for
net proceeds of $78,000.
Net cash used in financing activities was $81,000
and $78,000 during the six months ended June 30, 2015 and 2014, respectively, for required principal payments made on other long
term notes.
Overall, the Company had a net decrease in
cash and cash equivalents of $232,000 in the six months ended June 30, 2015 compared with a net decrease of $1,492,000 for the
six months ended June 30, 2014.
The Company’s management believe that
existing cash resources and cash resources anticipated to be generated from future operating activities are sufficient to meet
working capital requirements, anticipated capital expenditures, debt servicing payments and other contractual obligations over
the next twelve months.
| ITEM 3. | QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
The Company is a smaller reporting company
and not required to provide the information required under this item.
| ITEM 4. | CONTROLS
AND PROCEDURES |
| a. | Disclosure Controls and Procedures |
Our Chief Executive Officer and Chief Financial
Officer, after evaluating the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e))
as of June 30, 2015 (the “Evaluation Date”), have concluded that as of the Evaluation Date, our disclosure controls
and procedures were effective in ensuring that information required to be disclosed by us in the reports we file or submit under
the Exchange Act (1) is recorded, processed, summarized and reported, within the time periods specified in the Commission’s
rules and forms, and (2) is accumulated and communicated to our management, including the Chief Executive Officer and the Chief
Financial Officer, as appropriate to allow for timely decisions regarding required disclosure.
| b. | Changes in Internal Controls over Financial Reporting |
There were no changes in our internal control
over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, our internal
control over financial reporting.
| PART II. | OTHER INFORMATION |
None.
Not applicable
| ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE
OF PROCEEDS |
None.
| ITEM 3. | DEFAULTS UNDER SENIOR SECURITIES |
None.
| ITEM 4. | MINE SAFETY DISCLOSURES |
Not applicable
None
11. |
An exhibit showing the computation of per-share earnings is omitted because the computation can be clearly determined from the material contained in this Quarterly Report on Form 10-Q. |
|
|
31.1 |
Certificate of the Registrant’s Chief Executive Officer, Amy Eskilson, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.* |
|
|
31.2 |
Certificate of the Registrant’s Chief Financial Officer, William J. Foote, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.* |
|
|
32.1 |
Certificate of the Registrant’s Chief Executive Officer, Amy Eskilson, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.* |
|
|
32.2 |
Certificate of the Registrant’s Chief Financial Officer, William J. Foote, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.* |
|
|
101 |
The following financial information from Inrad Optics, Inc.’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2015 formatted in Extensible Business Reporting Language (XBRL): (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations, (iii) Condensed Consolidated Statements of Cash Flows, and (iv) the Notes to the Condensed Consolidated Financial Statements.* |
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
|
Inrad Optics, Inc. |
|
|
|
|
By: |
/s/ Amy Eskilson |
|
|
Amy Eskilson |
|
|
President and Chief Executive Officer |
|
|
|
|
By: |
/s/ William J. Foote |
|
|
William J. Foote |
|
|
Chief Financial Officer,
|
|
|
Secretary and Treasurer |
Date: August 14, 2015
Exhibit 31.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF
2002
I, Amy Eskilson certify that:
| 1. | I have reviewed the quarterly report on Form 10-Q of Inrad Optics, Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this
report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant
as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) and internal control over financial
reporting (as defined in Exchange Act Rules 13(a)-15(f) and 15d -15(f)) for the registrants and have: |
| a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures
to be designed under supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b) | Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented
in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered
by this report based on such evaluations; and |
| d) | Disclosed in this report any change in the registrant’s internal control over financial reporting
that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case
of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal
control over financial reporting; and |
| 5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent
evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s
board of directors (or persons performing the equivalent function(s): |
| a) | All significant deficiencies and material weaknesses in the design or operation of internal control
over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize
and report financial information; and |
| b) | Any fraud, whether or not material, that involves management or other employees who have a significant
role in the registrant’s internal control over financial reporting. |
Dated: August 14, 2015 |
/s/ Amy Eskilson |
|
|
President and Chief Executive Officer |
|
A signed original of this written statement
required by Section 302 has been provided to Inrad Optics, Inc. and will be retained by Inrad Optics, Inc. and furnished to the
Securities Exchange Commission or its staff upon request.
Exhibit 31.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF
2002
I, William J. Foote certify that:
| 1. | I have reviewed the quarterly report on Form 10-Q of Inrad Optics, Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this
report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant
as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) and internal control over financial
reporting (as defined in Exchange Act Rules 13(a)-15(f) and 15d -15(f)) for the registrants and have: |
| a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures
to be designed under supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b) | Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented
in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered
by this report based on such evaluations; and |
| d) | Disclosed in this report any change in the registrant’s internal control over financial reporting
that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case
of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal
control over financial reporting; and |
| 5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent
evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s
board of directors (or persons performing the equivalent function(s): |
| a) | All significant deficiencies and material weaknesses in the design or operation of internal control
over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize
and report financial information; and |
| b) | Any fraud, whether or not material, that involves management or other employees who have a significant
role in the registrant’s internal control over financial reporting. |
Dated: August 14, 2015 |
/s/ William J. Foote |
|
|
Chief Financial Officer, |
|
|
Secretary and Treasurer |
|
A signed original of this written statement
required by Section 302 has been provided to Inrad Optics, Inc. and will be retained by Inrad Optics, Inc. and furnished to the
Securities Exchange Commission or its staff upon request.
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF
2002
In connection with the Quarterly Report of Inrad
Optics, Inc. on Form 10-Q for the period ended June 30, 2015 filed with the Securities and Exchange Commission (the “Report”),
I, Amy Eskilson, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002, that:
| (1) | The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act
of 1934; and |
| (2) | The information contained in the Report fairly presents, in all material respects, the consolidated
financial condition of the Company as of the dates presented and the consolidated result of operations of the Company for the periods
presented. |
Dated: August 14, 2015
|
/s/ Amy Eskilson |
|
|
|
President and Chief Executive Officer |
This certification has been furnished solely
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and has not been filed as part of the Report or as a separate disclosure
document.
A signed original of this written statement
required by Section 906 has been provided to Inrad Optics, Inc. and will be retained by Inrad Optics, Inc. and furnished to the
Securities Exchange Commission or its staff upon request.
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF
2002
In connection with the Quarterly Report of
Inrad Optics, Inc. on Form 10-Q for the period ended June 30, 2015 filed with the Securities and Exchange Commission (the “Report”),
I, William J. Foote, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, that:
| (1) | The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act
of 1934; and |
| (2) | The information contained in the Report fairly presents, in all material respects, the consolidated
financial condition of the Company as of the dates presented and the consolidated result of operations of the Company for the periods
presented. |
Dated: August 14, 2015
|
/s/ William J. Foote |
|
|
|
Chief Financial Officer, |
|
|
|
Secretary and Treasurer |
This certification has been furnished solely
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and has not been filed as part of the Report or as a separate disclosure
document.
A signed original of this written statement
required by Section 906 has been provided to Inrad Optics, Inc. and will be retained by Inrad Optics, Inc. and furnished to the
Securities Exchange Commission or its staff upon request.
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