Washington, D.C. 20549







Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934


Date of Report (Date of earliest event reported)            April 30, 2020          


(Exact name of registrant as specified in its charter)





(State or other jurisdiction

of incorporation)

(Commission File Number)

(IRS Employer

Identification No.)


4832 Grand Avenue

Duluth, Minnesota



(Address of principal executive offices)

(Zip Code)


Registrant’s telephone number, including area code  (218) 628-2217               



Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):


☐     Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)


☐     Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)


☐     Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))


☐     Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))


Securities registered pursuant to Section 12(b) of the Act:


Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $.10 per share


Nasdaq Capital Market


Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933(§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).


Emerging growth company ☐


If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐




Item 2.02.

Results of Operations and Financial Condition.


On April 30, 2020, IKONICS Corporation (the “Company”) reported its financial results for the quarter ended March 31, 2020. See the Company’s press release dated April 30, 2020, which is furnished as Exhibit 99 hereto and incorporated by reference in this Item 2.02.


Item 9.01.

Financial Statements and Exhibits.






Exhibit Number



Press Release dated April 30, 2020






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.


Date: April 30, 2020 /s/ Jon Gerlach  

Jon Gerlach

Chief Financial Officer

and Vice President of Finance



Exhibit 99


News Contact:

Glenn Sandgren

For Immediate Release


Chief Executive Officer

(218) 628-2217

April 30, 2020





DULUTH, MN - IKONICS Corporation (the “Company”) (Nasdaq:IKNX), a Duluth-based imaging technology company, announced first quarter 2020 earnings. Revenue was $3,497,000 compared to $3,529,000 in 2019, a decline of 1%. IKONICS posted a first quarter loss of $587,000, or $0.30 per diluted share, in 2020 compared to a loss of $455,000, or $0.23 per diluted share, in 2019. On a non-GAAP basis, IKONICS realized an adjusted net loss of $222,000, or $0.11 per diluted share (excluding one-time expenses relating to the Company’s Chief Executive Officer transition), a 51% improvement over the $455,000 loss, or $0.23 per diluted share, for the same quarter of 2019.


Glenn Sandgren, IKONICS CEO, noted, “IKONICS traditionally has experienced financial challenges in the first quarter. 2020 was no exception, as we started the year with very strong January and February sales, but the impact of COVID-19 on March revenue was substantial, and is expected to continue and will overshadow much of our short-term progress. Nevertheless, there have been numerous positive events.”


Business Highlights:



IKONICS has been deemed an essential business and continues to operate with appropriate COVID-19 safety measures.


A Payroll Protection Program SBA loan in the amount of $1.2 million was received in April pursuant to the CARES Act. This loan may be forgiven in whole or in part under SBA guidelines, subject to compliance with applicable regulatory requirements.


As part of the CARES Act, IKONICS accounted for a first quarter income tax benefit of $240,000.


Our IKONART® craft product line is benefitting from the new textile screen printing film introduction supported by aggressive social marketing efforts and is on a favorable sales trajectory.


Excellent progress has been made on several outside manufacturing opportunities.


Sandgren continued, “We have been responding aggressively to this global crisis by implementing new workplace controls to protect our people and by taking actions to improve our liquidity and reduce our operating costs including a temporary reduction in officer compensation and board fees. Compared with many similar companies, IKONICS has a favorable cash position, with approximately $3.0 million in cash and short-term investments as well as a $2.1 million open line of credit. Due to the unknown severity and duration of the COVID-19 pandemic and the related lack of visibility to the impact on the Company's served markets, it is impossible to predict the performance of the business at this juncture. Ultimately, we believe that the crisis could yield a number of strategic opportunities for IKONICS and other well positioned companies.”




This press release contains forward-looking statements regarding sales, gross profits, net earnings, balance sheet position, new products, new business initiatives, customer behavior and market trends that involve risks and uncertainties. The Company's actual results could differ materially as a result of domestic and global economic conditions, downturns in the aerospace or automotive industries, unexpected production delays by customers using the Company’s products, competitive market conditions, changes in consumer preferences, inability to commercialize technologies the Company is developing on the anticipated timeline or at all, acceptance of new products the Company offers, introduction of new products or technologies by competitors, unexpected capital expenditure requirements, delays in completing planned expansions, the ability to control operating costs without impacting growth as well as the factors described in the Company's Forms 10-K, and 10-Q, and other reports on file with the SEC.




4832 Grand Avenue
Duluth, MN 55807 USA
Phone: (218) 628-2217
Fax: (218) 628-3245
Email: info@ikonics.com
Website: www.ikonics.com 



IKONICS Corporation




For the Three Months Ended March 31, 2020 and 2019


Three Months Ended






Net sales

  $ 3,497,192     $ 3,528,691  

Cost of goods sold

    2,343,960       2,519,572  

Gross profit

    1,153,232       1,009,119  

Operating expenses

    1,964,600       1,560,807  

Loss from operations

    (811,368 )     (551,688 )

Interest expense

    (21,484 )     (22,275 )

Other Income

    6,917       16,194  

Loss before income taxes

    (825,935 )     (557,769 )

Income tax benefit

    (238,929 )     (102,738 )

Net loss

  $ (587,006 )   $ (455,031 )

Loss per common share-basic and diluted

  $ (0.30 )   $ (0.23 )

Average diluted shares outstanding

    1,976,354       1,983,553  




As of March 31, 2020 and December 31, 2019










Current assets

  $ 7,508,435     $ 8,692,188  

Property, plant, and equipment, net

    7,867,513       7,915,984  

Intangible assets, net

    268,004       271,369  
      $ 15,643,952     $ 16,879,541  

Liabilities and Stockholders' Equity


Current liabilities

  $ 1,316,536     $ 1,934,486  

Long-term debt

    2,654,036       2,688,357  

Stockholders' equity

    11,673,380       12,256,698  
      $ 15,643,952     $ 16,879,541  




For the Three Months Ended March 31, 2020 and 2019






Net cash used in operating activities

  $ (427,276 )   $ (617,996 )

Net cash provided by (used in) investing activities

    1,104,749       (352,476 )

Net cash used in financing activities

    (35,682 )     (35,419 )

Net increase (decrease) in cash and cash equivalents

    641,791       (1,005,891 )

Cash and cash equivalents at beginning of period

    963,649       1,623,137  

Cash and cash equivalents at end of period

  $ 1,605,440     $ 617,246  




4832 Grand Avenue
Duluth, MN 55807 USA
Phone: (218) 628-2217
Fax: (218) 628-3245
Email: info@ikonics.com
Website: www.ikonics.com 





We report our financial results in accordance with U.S. generally accepted accounting principles (“GAAP”). We have provided non-GAAP loss in this press release to assist investors in comparing losses on a year-over-year basis and because management believes it is a useful metric in evaluating ongoing performance of our company. Non-GAAP adjusted loss reflects the add back of costs related to the 2020 first quarter chief executive officer transition including severance payments, signing bonus, relocation expenses and executive search consulting expenses. The presentation of this information is not meant to be a substitute for the corresponding financial measures prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of GAAP to non-GAAP financials measures below.







% Change


Net loss

  $ (587,006 )   $ (455,031 )     (29% )

Add: CEO transition costs


Non-GAAP adjusted loss

  $ (222,006 )   $ (455,031 )     51 %

Non-GAAP adjusted loss per common share-basic and diluted

  $ (0.11 )   $ (0.23 )        

Average diluted shares outstanding

    1,976,354       1,983,553