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, 1999
--------------------------------------------------
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, 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 |_|
Common shares of stock outstanding as of June 30, 1999:
4,100,678 shares
<PAGE>
INRAD, Inc.
INDEX
Page Number
-----------
Part I. FINANCIAL INFORMATION..............................................1
Item 1. Financial Statements:
Consolidated Balance Sheets as of June 30, 1999,
(unaudited) and December 31, 1998....................1
Consolidated Statements of Operations for the three
and Six Months Ended June 30, 1999 and 1998
(unaudited)..........................................2
Consolidated Statements of Cash Flows for the Six
Months Ended June 30, 1999 and 1998 (unaudited)......3
Notes to Consolidated Financial Statements...........4
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations..................5
Changes in Securities and Use of Proceeds............7
Part II. OTHER INFORMATION..................................................8
Item 6. Exhibits and Reports on Form 8-K.....................8
Signatures .................................................................9
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
INRAD, Inc.
Consolidated Balance Sheets
June 30, December 31,
1999 1998*
---- -----
Unaudited
Assets
Current assets:
Cash and cash equivalents $ 548,381 $ 208,028
Accounts receivable, net 754,324 639,604
Inventories 1,102,640 1,433,081
Unbilled contract costs 273,703 125,096
Other current assets 91,371 64,626
----------- -----------
Total current assets 2,770,419 2,470,435
----------- -----------
Plant and equipment,
Plant and equipment at cost 5,383,946 5,216,544
Less: Accumulated depreciation
and amortization (4,757,960) (4,585,761)
----------- -----------
Total plant and equipment 625,986 630,783
Precious metals 286,788 282,396
Other assets 149,627 154,543
----------- -----------
Total assets $ 3,832,820 $ 3,538,157
=========== ===========
Liabilities and Shareholders' Equity
Current liabilities:
Note payable - Bank $ 32,500 $ 107,500
Current obligations under capital leases 3,772 8,007
Accounts payable and accrued liabilities 546,374 527,991
Advances from customers 17,560 30,887
Other current liabilities 32,400 40,400
----------- -----------
Total current liabilities 632,606 714,785
Secured Convertible Promissory Notes 250,000 250,000
Subordinated Convertible Notes 100,000 100,000
----------- -----------
Total liabilities 982,606 1,064,785
----------- -----------
Shareholders' equity:
Preferred Stock: $1,000 par value; 500
shares issued and outstanding at
June 30, 1999 and 0 shares issued
and outstanding at December 31, 1998 500,000 0
Common stock: $.01 par value; 4,100,678
shares issued at June 30, 1999 and
at December 31, 1998 41,007 41,007
Capital in excess of par value 8,237,718 8,237,718
Accumulated deficit (5,913,561) (5,790,403)
----------- -----------
2,865,164 2,488,322
Less - Common stock in treasury,
at cost (4,600 shares at June 30, 1999 and
at December 31, 1998) (14,950) (14,950)
----------- -----------
Total shareholders' equity 2,850,214 2,473,372
----------- -----------
Total liabilities and shareholders' equity $ 3,832,820 $ 3,538,157
=========== ===========
* Derived from Audited Financial Statements
See Notes to Consolidated Financial Statements.
1
<PAGE>
INRAD, Inc.
Consolidated Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
30 Six Months Ended June 30 Three Months Ended June
--------------------------- -----------------------
1999 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues:
Product sales $ 1,384,416 $ 1,167,891 $ 2,800,036 $ 2,381,562
Contract R & D 314,346 200,744 564,203 366,407
----------- ----------- ----------- -----------
Total Revenue 1,698,762 1,368,635 3,364,239 2,747,969
----------- ----------- ----------- -----------
Cost and Expenses:
Cost of goods sold 1,025,566 863,449 2,073,124 1,786,041
Contract R & D expenses 302,349 207,667 565,091 382,803
Selling, general &
administrative expenses 378,415 345,279 735,242 669,313
Internal R & D expenses 64,432 49,599 98,303 823,898
----------- ----------- ----------- -----------
Total Cost and Expenses 1,770,762 1,465,994 3,471,760 2,921,055
----------- ----------- ----------- -----------
Operating profit (loss) (72,000) (97,359) (107,521) (173,086)
Other income (expense):
Interest expense (8,739) (60,314) (18,475) (121,330)
Interest & other income, net 2173 4,649 2,838 6,073
----------- ----------- ----------- -----------
Net loss (78,566) (153,024) (123,158) (288,343)
Accumulated deficit, beginning
of period (5,834,995) (5,293,954) (5,790,403) (5,158,635)
Accumulated deficit, end of
period $(5,913,561) $(5,466,978) $(5,913,561) $(5,446,978)
=========== =========== =========== ===========
Net loss per common share - basic
and diluted (0.02) (0.08) (0.03) (0.14)
=========== =========== =========== ===========
Weighted average shares outstanding 4,100,678 2,113,417 4,100,678 2,111,356
=========== =========== =========== ===========
</TABLE>
See Notes to Consolidated Financial Statements.
2
<PAGE>
INRAD, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Six months Ended June 30
------------------------
1999 1998
--------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net loss $(123,158) $(288,393)
--------- ---------
Adjustments to reconcile net loss to cash
provided by operating activities:
Depreciation and amortization 176,999 234,624
Non-cash interest -- 5,083
Loss on sale of equipment -- (3,500)
Changes in assets and liabilities:
Accounts receivable (114,720) (170,602)
Inventories 330,441 163,750
Unbilled contract costs (148,607) (83,964)
Other current assets (26,745) 1,711
Precious metals (4,392) (4,921)
Other assets 116 1,019
Accounts payable and accrued liabilities 18,383 221,171
Advances from customers (13,327) 11,681
Other current liabilities (8,000) (40,978)
--------- ---------
Total adjustments 210,148 335,074
--------- ---------
Net cash provided by operating activities 86,990 46,731
--------- ---------
Cash flows from investing activities:
Capital expenditures (167,402) (23,984)
Proceeds from sale of equipment -- 3,500
--------- ---------
Net cash used in investing activities (167,402) (44,350)
--------- ---------
Cash flows from financing activities:
Proceeds from issuance of preferred stock 500,000 0
Principal payments of note payable - Bank (75,000) (60,000)
Principal payments of capital lease
obligations (4,235) (8,992)
--------- ---------
Net cash provided by (used in) financing
activities 420,765 (68,992)
--------- ---------
Net increase (decrease) in cash and cash
equivalents 340,353 (66,611)
Cash and cash equivalents at beginning of period 208,028 209,142
--------- ---------
Cash and cash equivalents at end of period $ 548,381 $ 142,531
========= =========
</TABLE>
See Notes to Consolidated Financial Statements.
3
<PAGE>
INRAD, Inc.
Notes to Consolidated Financial Statements
(Unaudited)
NOTE 1 -SUMMARY OF ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited interim consolidated financial statements of INRAD,
Inc. (the "Company") reflect all adjustments, which are of a normal recurring
nature, and disclosures which, in the opinion of management, are necessary for a
fair statement of results for the interim periods. It is suggested that these
consolidated financial statements be read in conjunction with the audited
consolidated financial statements as of December 31, 1998 and 1997 and for the
years then ended and notes thereto included in the Company's report on Form
10-K, filed with the Securities and Exchange Commission.
Inventory Valuation
Interim inventories as well as cost of goods sold are computed by using the
gross profit method of interim inventory valuation and applying an estimated
gross profit percentage based on the actual values for the preceding fiscal
year, unless the company believes that a different gross profit percentage may
more accurately reflect its current year's cost of goods sold and gross profit.
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 statement carrying
amounts and the tax bases of assets and liabilities using enacted tax rates in
effect in the years in which the differences are expected to reverse. A
valuation allowance is established when deferred tax assets are not likely to be
realized.
Net Loss Per Share
Basic and diluted net loss per share is computed using the weighted average
number of common shares outstanding. The potential dilutive effect of securities
which are common share equivalents, options, warrents, convertible notes and
convertilbe preferred stock, have been excluded from the diluted computation
because their effect is antidilutive.
NOTE 2 -INVENTORIES AND COST OF GOODS SOLD
For the six month period ended June 30, 1999, the Company used 74% as its
estimated cost of goods sold percentage. For the previous year, 1998, the actual
cost of goods sold percentage was 74.3%. The Company believes 74% better
approximates the expected 1999 annual cost of goods sold percentage based on
estimated profitability of actual sales through June 30, 1999 and the
anticipated annual level of product shipments and related costs.
For the six month period ended June 30, 1998, the Company used 76% as its
estimated cost of goods sold percentage.
4
<PAGE>
NOTE 3 -DEBT
Secured Convertible Promissory Note
Although by its terms the Note was due on July 8, 1997, it cannot be repaid
until the Chase Bank debt has been repaid in full. The Promissory note has been
classified as noncurrent in the accompanying balance sheet because the Note
holder has agreed not to demand payment prior to July 1, 2000.
NOTE 4 -PREFERRED STOCK
The company sold 200 shares of its Series A 10% Convertible Preferred Stock for
$200,000 on March 25, 1999 and 300 shares on June 25, 1999. There was one
purchaser, an institution that was a majority shareholder of the Company prior
to the purchase. The series A Preferred Stock is convertible into Common Stock
of the Company at the rate of $1.00 per share.
NOTE 5 -COMMITMENTS
There are in effect employment agreements with two officers of the Company that
call for a base compensation to be mutually agreed upon at renewal. Early
termination of the agreements will result in a severance payment of between six
and nine months of base compensation. The minimum aggregate payouts under such
contracts approximate $139,000.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION
The following information contains forward-looking statements, including
statements with respect to the revenues to be realized from existing backlog
orders and ability to generate sufficient cash flow in the future. 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 Reform Act of 1995. Actual results may
vary from these forward-looking statements due to the following factors:
inability to maintain customer relationships and/or add new customers;
unforeseen overhead expenses that may adversely affect financial results or
other inability to operate with a positive cash flow. Readers are further
cautioned that the Company's financial results can vary from quarter to quarter,
and the financial results reported for the first six months may not necessarily
be indicative of future results. The foregoing is not intended to be an
exhaustive list of all factors which could cause actual results to differ
materially from those expressed in forward-looking statements made by the
Company. For more information about the Company, please review the Company's
most recent Form 10-K filed with the Securities & Exchange Commission.
RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction with the
Company's unaudited consolidated financial statements presented elsewhere
herein. The discussion of results should not be construed to imply any
conclusion that such results will necessarily continue in the future.
Net Product Sales
Net product sales for the second quarter of 1999 increased $616,000, or 22.4%
from the comparable quarter in 1998 and net sales for the six months ended June
30, 1999 increased $418,000 or 17.5% from the comparable 1998 period.
International shipments in the first six months of 1999 were $1,118,000 (40% of
total shipments) compared to $422,000 (18%) for the first six months of 1998.
Product sales during the second quarter of 1999 were greater
5
<PAGE>
than the prior year because of increased orders in 1999 that we were able to
ship during the first quarter, primarily to our international clients.
The backlog of unfilled product orders was $1,031,317 at June 30, 1999, compared
with $1,426,000 at December 31, 1998 and $1,609,000 at June 30, 1998.
Cost of Goods Sold
For the six months period ended June 30, 1999, the Company used 74% as its
estimated cost of goods sold percentage. For the previous year, 1998, the actual
cost of goods sold percentage was 74.3%. The Company believes 74% better
approximates the expected 1999 annual cost of goods sold percentage based on
estimated profitability of actual sales through June 30, 1999 and the
anticipated annual level of product shipments and related costs.
For the six month period ended June 30, 1998, the Company used 76% as its
estimated cost of goods sold percentage.
Contract Research and Development
Contract research and development revenues were $564,000 for the six months
ended June 30, 1999, compared to $366,000 for the six months ended June 30,
1998. Related contract research and development expenditures, including
allocated indirect costs, for the six months ended June 30, 1999 were $314,000
compared to $200,000 for the comparable 1998 quarter. Revenues increased from
1998 to 1999 due to a higher opening backlog of contracts. The Company expects
to continue to focus its future efforts on programs closely aligned with its
core business.
The Company's backlog of contract R&D was $1,096,000 at June 30, 1999, compared
with $1,110,000 at December 31, 1998 and $1,024,000 at June 30, 1998.
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased $66,000 or 10%, in the
second quarter of 1999. General and administrative expenses increased due to the
hiring of a new Chief Executive Officer and President, and selling expenses
increased due to additional commissions paid independent sales agents on
international sales.
Internal Research and Development Expenses
Research and development expenses for the quarter ended June 30, 1999 were
$64,000 compared to $50,000 for the quarter ended June 30, 1998. The Company is
focusing its internal Research and Development efforts in 1999 on a few new
products with short development cycles.
Interest Expense
Interest expense was $9,000 and $60,000 for the quarters ended June 30, 1999 and
1998, respectively. Interest expense is less in 1999 because on December 31,
1998 the Company converted $1,800,799 of notes payable and $441,789 of accrued
interest into 1,979,107 shares of common stock.
LIQUIDITY AND CAPITAL RESOURCES
During the quarter ended March 31, 1997, the Company signed an agreement with
Chase Manhattan Bank (successor to Chemical Bank) amending the terms of its
credit facility. The agreement requires monthly principal payments of $10,000
for January 1997, and $7,500 from February 1997 until December 1997, monthly
principal payments of $10,000 from January 1998 until December 1998, and monthly
principal payments $12,500 from January 1999 until August 1999. A final payment
of $7,500 is due on September 1, 1999. All required payments to Chase Manhattan
Bank have been made on time.
In March 1999, a shareowner and debtholder of the Company agreed to purchase 500
shares of 10% convertible preferred stock at the price of $1,000 per share. Two
hundred shares were purchased for $200,000 in March 1999 and the remaining three
hundred shares were purchased in June 1999 for $300,000. Dividends are payable
in common stock at the rate of $1.00 per share per annum.
6
<PAGE>
Capital expenditures, including internal labor and overhead charges, for the six
months ended June 30, 1999 and 1998 were $167,000 and $24,000, respectively.
Until the Company is generating satisfactory amounts of cash flow from its
operations, it is expected that future capital expenditures will be kept to a
minimum. Management believes that in the short term, this limitation will not
have a material effect on operations.
During the six month period ended June 30, 1999 and for each of the three years
in the period ended December 31, 1998, the Company had losses from operations.
Cash outflows during these periods have been funded on the basis of borrowings
from, and issuance of common and preferred stock and warrants to, shareowners
including the principal shareowner, as further described in the Company's Annual
Report on Form 10-K. The Company's liquidity is dependent upon its ability to
improve operating results and thereby generate adequate cash flow from
operations. It will also depend upon the continued willingness of a Shareowner
note holder to extend the due date of their note. Because of the uncertainty
relating to the Company's ability to improve operating results and cash flows,
there is substantial doubt about the Company's ability to continue as a going
concern.
Year 2000 Issue
The year 2000 issue is the result of computer programs being written using two
digits rather than four digits to define the applicable year. Any computer
programs and hardware as well as software products and certain equipment and
machinery that are date sensitive may recognize a date using "00" as the Year
1900 rather than the Year 2000. This could result in a system failure or
miscalculations causing disruptions of operations, including, among other
things, a temporary inability to process transactions or engage in normal
business activities for both the Company and its customers who rely on its
products.
The Company has divided the Year 2000 issue into two main areas: internal
information technology ("IT") and non-IT systems, including embedded technology
such as microprocessors; and external agents including critical suppliers,
customers and other third parties the Company utilizes for various processing
functions.
To date, based upon reviewing hardware, it has been determined that a small
amount of older computer equipment must be replaced, but the type and amount are
not significant and will be replaced in the ordinary course as systems are
upgraded. Financing has been arranged with a leasing company for the Company to
lease hardware and software.
The Company has assessed its Year 2000 exposure as it pertains to non-IT
systems, including manufacturing, research and development and key
relationships, such as vendors and customers. This includes the process of
identifying and prioritizing critical suppliers and customers and communicating
with them about their plans and progress in addressing the Year 2000 problem.
The Company also utilizes third-party vendors for processing data and payments,
e.g. payroll services, 401 (k) plan administration, check processing, medical
benefits processing, etc. The Company has initiated communications with these
vendors to determine the status of their systems. Should these vendors not be
compliant in a timely manner, the Company may be required to process
transactions manually or delay processing until such time as the vendors are
Year 2000 compliant. The review of non-IT systems and key third party
relationships has been completed as of the second quarter of 1999. At this time
the total cost to be Y2K compliant is not estimated to be material.
The failure to correct a material Year 2000 problem could result in an
interruption in, or a failure of, certain normal business activities or
operations. Such failures could materially and adversely affect the company's
results of operations, liquidity and financial condition. Due to the general
uncertainty inherent in the Year 2000 problem, resulting in part from the
uncertainty of the Year 2000 readiness of third-party suppliers and customers,
the Company is unable to determine at this time whether the consequences of Year
2000 failures will have a material impact on the Company's results of
operations, liquidity or financial condition.
The future costs of the Company's Year 2000 efforts are expected to be funded
through future operating cash flows and the financing of hardware and software.
The requirements for the correction of Year 2000 issues and the date on which
the Company believes it will complete the Year 2000 modifications are based on
management's current best estimates, which were derived utilizing numerous
assumptions of future events including the continued availability of certain
resources, third-party modification plans and other factors. However, there can
be no guarantee that these estimates will be achieved and actual results could
differ materially from those anticipated. Specific factors that may cause such
material differences include, but are not limited to, the availability of
personnel trained in this area, the ability to locate and collect all relevant
computer data and similar uncertainties.
7
<PAGE>
No contingency plans are developed to date. Contingency plans will be prepared
so that the Company's critical business processes can be expected to continue to
function on January 1, 2000 and beyond. The Company's contingency plans will be
structured to address both remediation of systems and their components and
overall business operating risk. These plans are intended to mitigate both
internal risks as well as potential risks in the supply chain of the Company's
suppliers and customers.
Changes in Securities and Use of Proceeds
The Company sold 200 shares of its Series A 10% Convertible Preferred Stock for
$200,000 on March 25, 1999 and 300 shares on June 25, 1999. There was one
purchaser, an institution which was a major shareholder of the Company prior to
the purchase. The Series A Preferred Stock is convertible into Common Stock of
the Company at a rate of $1.00 per share. The issuance of the Series A Preferred
Stock was, and the issuance of the underlying Common Stock, if converted, will
be, exempt from registration under Section 4(2) of the Securities Act of 1933,
as amended, as not involving public offering.
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) Exhibits:
10.25 Agreement with Clarex to purchase 500 shares of Preferred Stock.
10.26 Employment contract with Relinda C. Walker.
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.
27. Financial Data Schedule.
(B) Reports on Form 8-K:
None.
8
<PAGE>
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, Inc.
By:/s/ Warren Ruder
-------------------------------------
Warren Ruderman
President and Chief Executive Officer
By:/s/ William S. Miraglia
-------------------------------------
William S. Miraglia
Chief Financial Officer
(Chief Accounting Officer)
Date: August 9, 1999
9
Clarex Limited
P.O. Box N3016
Nassau, Bahamas
Dr. Warren Ruderman March 10,1999
INRAD, Inc.
181 Legrand Avenue
Northvale, NJ 07647
Dear Dr. Ruderman:
This letter is written to evidence our agreement to invest $500,000 in INRAD, in
the form of 500 newly offered shares of 10%, convertible preferred stock, with a
$1,000 par value. Dividends will be paid in shares of INRAD's common stock, at
the rate of $1.00 per share. The conversion into common stock will also be at
the rate of $1.00 per share.
This funding is to take place in two installments, the first on March 25, 1999
for $200,000 and the second on June 25, 1999 for the remaining $300,000.
By signing below, we also represent to the Company that: ( i ) we are able to
bear the economic risk of the investment in the Shares, ( ii ) we recognize and
agree that the Shares have not been registered under the Securities Act of 1933,
as amended ( the "Act"), ( iii) we recognize and agree that we will be required
to continue to bear the risk of investment in the Shares for an indefinite
period, ( iv ) we recognize and agree that such Shares must be held by us
indefinitely unless a subsequent disposition is registered under the Act or is
exempted from registration under all applicable federal and state securities
laws, ( v ) we recognize and agree that the Company will enter stop transfer
notations in its records with respect to the stock certificates representing the
shares, ( vi ) we have knowledge and experience with respect to the Company and
its business and in financial and business affairs generally so that we are
capable of evaluating the merits and risks of the prospective investment;
( vii ) the Shares are being acquired for our own account for investment
purposes and not with the view of resale or distribution thereof by us and
( viii ) we recognize and agree that a restrictive legend will be placed on the
certificates representing the Shares summarizing the restrictions on
transferability outlined above. At our request, the Company will make its best
efforts to register the Shares, only if it qualifies to use Securities and
Exchange Commission Form S3.
Please confirm your acceptance of the terms of this letter by signing below.
Very truly yours,
Clarex LTD
Agreed to as of the 10th day of March, 1999
Warren Ruderman
INRAD, Inc.
Employment Contract
Exhibit 10.26
This contract defines the terms and conditions of employment by INRAD, Inc. of
Relinda Walker.
Position Description
Vice President - Manufacturing.
The position will report to the President and CEO, and will have full
responsibility for all commercial production operations of the Company, subject
to approval by the President where appropriate.
The following terms and conditions apply to your employment:
Terms and Conditions
Duration
Two (2) years minimum commitment unless terminated earlier by mutual agreement.
In case of early termination, a severance payment of up to six (6) months salary
will be made by INRAD, Inc. to complete the two year minimum requirement.
Compensation
1999 2000
------- -------
Salary ................................... 115,000 115,000
Sign-on Bonus ............................ 10,000 -0-
Performance Bonus ........................ 8,625 23,000
(nominal 15 to 25%
against targets)
------- -------
Total .................................... 133,625 138,000
Stock options: - 7,500 ISO at start date ($1.00 Strike Price)
- Additional 7,500 if Year End Operating Margin is better
than (-$300K)
Moving Expenses
INRAD, Inc. will pay all direct expenses related to the move, including closing
costs for the sales of your present house, packing and transportation of
household goods and up to three (3) months temporary hotel/housing expenses in
the Northvale commuting area up to a maximum of $3000.00 per month.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The Consolidated balance sheet and consolidated statement of operations
found on pages one and two on the company's 10-Q for the year to date.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<CASH> 548,381
<SECURITIES> 0
<RECEIVABLES> 747,324
<ALLOWANCES> 7,000
<INVENTORY> 1,102,640
<CURRENT-ASSETS> 2,770,419
<PP&E> 5,383,946
<DEPRECIATION> 4,757,960
<TOTAL-ASSETS> 3,832,820
<CURRENT-LIABILITIES> 632,606
<BONDS> 0
0
500,000
<COMMON> 41,007
<OTHER-SE> 2,324,157
<TOTAL-LIABILITY-AND-EQUITY> 3,832,820
<SALES> 3,364,239
<TOTAL-REVENUES> 3,364,239
<CGS> 3,373,457
<TOTAL-COSTS> 3,373,457
<OTHER-EXPENSES> 98,303
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 18,475
<INCOME-PRETAX> (123,158)
<INCOME-TAX> 0
<INCOME-CONTINUING> (123,158)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (123,158)
<EPS-BASIC> (0.03)
<EPS-DILUTED> 0
</TABLE>
