##### Table of Contents



U.S. SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-Q
  þ
    
    Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the Quarterly Period Ended March 31, 2009
 or
 o
    
    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 000-25727
 IKONICS CORPORATION
  Minnesota
    
    41-0730027(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. employer
identification no.)
 4832 Grand AvenueDuluth, Minnesota
    
    55807(Address of principal executive offices)
    
    (Zip code)
 
  
  þ o
 o o
 o þ
   Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company þ(Do not check if a smaller reporting company)




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##### 



IKONICS Corporation
  PAGE NO.PART I.
    
    FINANCIAL INFORMATIONItem 1.
    
    Financial Statements:Condensed Balance Sheets as of March 31, 2009 (unaudited)
and December 31, 2008
    
    
    3Condensed Statements of Operations for the Three Months Ended
March 31, 2009 and 2008 (unaudited)
    
    
    4Condensed Statements of Cash Flows for the Three Months Ended
March 31, 2009 and 2008 (unaudited)
    
    
    5Notes to Condensed Financial Statements (unaudited)
    
    
    6Item 2.
    
    Managements Discussion and Analysis of Financial Condition and
Results of Operations
    
    
    11Item 3.
    
    Quantitative and Qualitative Disclosures about Market Risk
    
    
    17Item 4.
    
    Controls and Procedures
    
    
    17PART II.
    
    OTHER INFORMATION
    
    
    18SIGNATURES
    
    
    20EX-31.1EX-31.2EX-32




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FINANCIAL INFORMATION
 
 ITEM 1. Condensed Financial Statements
 IKONICS CORPORATION
 
 CONDENSED BALANCE SHEETS
 March 31
    
    
    December 312009
    
    
    2008(unaudited)ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    1,233,887
    
    
    $
    901,738Trade receivables, less allowance of $77,000 in 2009 and
$56,000 in 2008
    
    
    1,860,617
    
    
    
    2,077,158Inventories
    
    
    1,857,302
    
    
    
    2,109,164Deposits, prepaid expenses and other assets
    
    
    228,233
    
    
    
    192,201Income tax refund receivable
    
    
    196,145
    
    
    
    185,869Deferred income taxes
    
    
    96,000
    
    
    
    96,000Total current assets
    
    
    5,472,184
    
    
    
    5,562,130PROPERTY, PLANT, AND EQUIPMENT, at cost:Land and building
    
    
    5,931,854
    
    
    
    5,928,275Machinery and equipment
    
    
    2,475,268
    
    
    
    2,430,857Office equipment
    
    
    763,595
    
    
    
    763,595Vehicles
    
    
    241,905
    
    
    
    241,9059,412,622
    
    
    
    9,364,632Less accumulated depreciation
    
    
    (3,869,238
    )
    
    
    (3,762,569
    )5,543,384
    
    
    
    5,602,063INTANGIBLE ASSETS, less accumulated amortization of $284,137 in
2009 and $270,325 in 2008
    
    
    378,561
    
    
    
    403,285INVESTMENTS IN NON-MARKETABLE EQUITY SECURITIES
    
    
    918,951
    
    
    
    918,951$
    12,313,080
    
    
    $
    12,486,429LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIES:Accounts payableTrade
    
    $
    417,579
    
    
    $
    344,783Construction
    
    
    
    
    
    
    120,000Accrued compensation
    
    
    192,217
    
    
    
    335,126Other accrued expenses
    
    
    103,953
    
    
    
    109,880Total current liabilities
    
    
    713,749
    
    
    
    909,789DEFERRED INCOME TAXES
    
    
    178,000
    
    
    
    143,000Total liabilities
    
    
    891,749
    
    
    
    1,052,789STOCKHOLDERS EQUITY:Preferred stock, par value $.10 per share; authorized 250,000 shares; issued none
Common stock, par value $.10 per share; authorized 4,750,000 shares;
issued and outstanding 1,977,656 shares in 2009 and 1,993,983 in 2008
    
    
    197,766
    
    
    
    199,398Additional paid-in capital
    
    
    2,189,528
    
    
    
    2,202,888Retained earnings
    
    
    9,034,037
    
    
    
    9,031,354Total stockholders equity
    
    
    11,421,331
    
    
    
    11,433,640$
    12,313,080
    
    
    $
    12,486,429
  3




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IKONICS CORPORATION
 
 CONDENSED STATEMENTS OF OPERATIONS (Unaudited)
 Three MonthsEnded March 312009
    
    
    2008NET SALES
    
    $
    3,563,212
    
    
    $
    3,780,848COST OF GOODS SOLD
    
    
    2,157,898
    
    
    
    2,151,793GROSS PROFIT
    
    
    1,405,314
    
    
    
    1,629,055SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
    
    
    1,221,581
    
    
    
    1,367,080RESEARCH AND DEVELOPMENT EXPENSES
    
    
    167,283
    
    
    
    214,855INCOME FROM OPERATIONS
    
    
    16,450
    
    
    
    47,120GAIN ON SALE OF NON-MARKETABLE EQUITY SECURITIES
    
    
    20,131
    
    
    
    INTEREST INCOME
    
    
    70
    
    
    
    43,675INCOME BEFORE INCOME TAXES
    
    
    36,651
    
    
    
    90,765INCOME TAX BENEFIT
    
    
    (16,484
    )
    
    
    (14,843
    )NET INCOME
    
    $
    53,135
    
    
    $
    105,638EARNINGS PER COMMON SHARE:Basic
    
    $
    0.03
    
    
    $
    0.05Diluted
    
    $
    0.03
    
    
    $
    0.05WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING :Basic
    
    
    1,989,222
    
    
    
    2,051,605Diluted
    
    
    1,989,866
    
    
    
    2,069,129
  4




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IKONICS CORPORATION
 
 CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)
 Three MonthsEnded March 312009
    
    
    2008CASH FLOWS FROM OPERATING ACTIVITIES:Net income
    
    $
    53,135
    
    
    $
    105,638Adjustments to reconcile net income to net cash provided by
operating activities:Depreciation
    
    
    106,669
    
    
    
    70,096Amortization
    
    
    13,812
    
    
    
    13,428Excess tax benefit from share-based payment arrangement
    
    
    
    
    
    
    (29,636
    )Stock based compensation
    
    
    3,769
    
    
    
    3,279Tax benefit from stock option exercise
    
    
    
    
    
    
    3,008Gain on sale of vehicles
    
    
    
    
    
    
    (1,725
    )Loss on intangible asset abandonment
    
    
    12,701
    
    
    
    Gain on sale of non-marketable equity securities
    
    
    (20,131
    )
    
    
    Deferred income taxes
    
    
    35,000
    
    
    
    Changes in working capital components:Trade receivables
    
    
    216,541
    
    
    
    (101,546
    )Inventories
    
    
    251,862
    
    
    
    143,055Prepaid expenses and other assets
    
    
    (36,032
    )
    
    
    (172,014
    )Income taxes receivable
    
    
    (10,276
    )
    
    
    (6,207
    )Accounts payable
    
    
    (47,204
    )
    
    
    132,789Accrued liabilities
    
    
    (148,836
    )
    
    
    (141,427
    )Income taxes payable
    
    
    
    
    
    
    24,345Net cash provided by operating activities
    
    
    431,010
    
    
    
    43,083CASH FLOWS FROM INVESTING ACTIVITIES:Purchases of property, equipment and construction in progress
    
    
    (47,990
    )
    
    
    (159,653
    )Proceeds from sale of vehicles
    
    
    
    
    
    
    8,500Purchase of intangibles
    
    
    (1,789
    )
    
    
    (26,365
    )Proceeds from sale of non-marketable equity securities
    
    
    20,131
    
    
    
    Proceeds from sale of short-term investments
    
    
    
    
    
    
    2,875,000Net cash (used in) provided by investing activities
    
    
    (29,648
    )
    
    
    2,697,482CASH FLOWS FROM FINANCING ACTIVITIES:Excess tax benefit from share-based payment arrangement
    
    
    
    
    
    
    29,636Repurchase of common stock
    
    
    (69,213
    )
    
    
    Proceeds from exercise of stock options
    
    
    
    
    
    
    49,985Net cash (used in) provided by financing activities
    
    
    (69,213
    )
    
    
    79,621NET INCREASE IN CASH AND CASH EQUIVALENTS
    
    
    332,149
    
    
    
    2,820,186CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
    
    
    901,738
    
    
    
    1,230,020CASH AND CASH EQUIVALENTS AT END OF PERIOD
    
    $
    1,233,887
    
    
    $
    4,050,206SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATIONCash paid for income taxes
    
    $
    5,640
    
    
    $
    7,861
  5




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IKONICS CORPORATION
 
 NOTES TO CONDENSED FINANCIAL STATEMENTS
 1.
    
    Basis of PresentationThe balance sheet of IKONICS Corporation (the Company) as of March 31, 2009, and the
related statements of operations and cash flows for the three months ended March 31, 2009
and 2008 have been prepared without being audited.In the opinion of management, these statements reflect all adjustments (consisting of only
normal recurring adjustments) necessary to present fairly the financial position of IKONICS
Corporation as of March 31, 2009, and the results of operations and cash flows for all
periods presented.Certain information and footnote disclosures normally included in financial statements
prepared in accordance with accounting principles generally accepted in the United States of
America, have been condensed or omitted. Therefore, these statements should be read in
conjunction with the financial statements and notes thereto included in the Companys Annual
Report on Form 10-K for the year ended December 31, 2008.The results of operations for interim periods are not necessarily indicative of results that
will be realized for the full fiscal year.2.
    
    InventoryThe major components of inventory are as follows:
 Mar 31, 2009
    
    
    Dec 31, 2008Raw materials
    
    $
    1,302,169
    
    
    $
    1,447,063Work-in-progress
    
    
    296,879
    
    
    
    324,361Finished goods
    
    
    1,123,952
    
    
    
    1,194,148Reduction to LIFO cost
    
    
    (865,698
    )
    
    
    (856,408
    )Total Inventory
    
    $
    1,857,302
    
    
    $
    2,109,164
 3.
    
    Earnings Per Common Share (EPS)Basic EPS is calculated using net income divided by the weighted average of common shares
outstanding. Diluted EPS is similar to Basic EPS except that the weighted average number of
common shares outstanding is increased to include the number of additional common shares
that would have been outstanding if the dilutive potential common shares, such as those
            shares subject to options, had been issued.Shares used in the calculation of diluted EPS are summarized below:
 Three Months EndedMar 31, 2009
    
    
    Mar 31, 2008Weighted average common shares outstanding
    
    
    1,989,222
    
    
    
    2,051,605Dilutive effect of stock options
    
    
    644
    
    
    
    17,524Weighted average common and common equivalent shares outstanding
    
    
    1,989,866
    
    
    
    2,069,129
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IKONICS CORPORATION
 NOTES TO CONDENSED FINANCIAL STATEMENTS
 Options to purchase 19,000 shares of common stock with a weighted average price of $7.60
were outstanding during the quarter ended March 31, 2009, but were excluded from the
computation of common share equivalents because they were anti-dilutive. There were no anti-dilutive options in
the quarter ended March 31, 2008.4.
    
    Stock-based CompensationThe Company has a stock incentive plan for the issuance of up to 342,750 shares of common
stock. The plan provides for granting eligible participants stock options or other stock
awards, as described by the plan, at option prices ranging from 85% to 110% of fair market
value at date of grant. Options granted expire up to seven years after the date of grant.
Such options generally become exercisable over a one to three year period. A total of
46,673 shares of common stock are reserved for additional grants of options under the plan
at March 31, 2009.The Company charged compensation cost of approximately $3,800 and $3,300 against income for
the three months ended March 31, 2009 and 2008, respectively. As of March 31, 2009 there
was approximately $30,000 of unrecognized compensation cost related to unvested share-based
compensation awards granted. That cost is expected to be recognized over the next three
years.The Company receives a tax deduction for certain stock option exercises during the period in
which the options are exercised, generally for the excess of the market price at the time
the stock options are exercised over the exercise price of the options, which increased the
APIC pool, which is the amount that represents the pool of excess tax benefits available to
absorb tax shortages. There were no excess tax benefits recognized during the three month
period ending March 31, 2009. For the three months ended March 31, 2008, $29,636 of excess
tax benefits were reported as operating and financing cash flows. The Companys APIC pool
totaled $111,029 at March 31, 2009 and December 31, 2008.There were no stock options grants, exercises, expirations, or forfeitures during the three
months ended March 31, 2009. The weighted average exercise price for the 26,250 options
outstanding was $6.69 at December 31, 2008 and March 31, 2009. Proceeds from the exercise
of stock options were $49,985 for the three months ended March 31, 2008. The aggregate
intrinsic value of all options outstanding and for those exercisable at March 31, 2009 was
$3,000.
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IKONICS CORPORATION
 NOTES TO CONDENSED FINANCIAL STATEMENTS
  5.
    
    Segment InformationThe Companys reportable segments are strategic business units that offer different products
and have varied customer bases. There are three reportable segments: Domestic, Export,
and IKONICS Imaging. Domestic sells screen printing film, emulsions, and inkjet receptive film to distributors
located in the United States and Canada. IKONICS Imaging sells photo resistant film, art
supplies, glass, metal medium and related abrasive etching equipment to end user customers
located in the United States and Canada. It is also entering the market for etched
ceramics, glass and silicon wafers; and is developing and selling proprietary inkjet
technology. Export sells primarily the same products as Domestic and IKONICS Imaging to
foreign customers. The accounting policies applied to determine the segment information are
the same as those described in the summary of significant accounting policies included in
the Companys Annual Report on Form 10-K for the year ended December 31, 2008.Management evaluates the performance of each segment based on the components of divisional
income, and with the exception of accounts receivable, does not allocate assets and
liabilities to segments. Financial information with respect to the reportable segments
follows:For the three months ended March 31, 2009:
 IKONICSDomestic
    
    
    Export
    
    
    Imaging
    
    
    Other
    
    
    TotalNet Sales
    
    $
    1,647,870
    
    
    $
    953,604
    
    
    $
    961,738
    
    
    $
    
    
    
    $
    3,563,212Cost of goods sold
    
    
    883,527
    
    
    
    714,689
    
    
    
    559,682
    
    
    
    
    
    
    
    2,157,898Gross Profit
    
    
    764,343
    
    
    
    238,915
    
    
    
    402,056
    
    
    
    
    
    
    
    1,405,314Selling, general and
administrative*
    
    
    272,187
    
    
    
    139,313
    
    
    
    291,908
    
    
    
    518,173
    
    
    
    1,221,581Research and
Development*
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    167,283
    
    
    
    167,283Income (loss) from
operations
    
    $
    492,156
    
    
    $
    99,602
    
    
    $
    110,148
    
    
    $
    (685,456
    )
    
    $
    16,450
 For the three months ended March 31, 2008:
 IKONICSDomestic
    
    
    Export
    
    
    Imaging
    
    
    Other
    
    
    TotalNet Sales
    
    $
    1,392,226
    
    
    $
    1,228,945
    
    
    $
    1,159,677
    
    
    $
    
    
    
    $
    3,780,848Cost of goods sold
    
    
    783,955
    
    
    
    806,826
    
    
    
    561,012
    
    
    
    
    
    
    
    2,151,793Gross Profit
    
    
    608,271
    
    
    
    422,119
    
    
    
    598,665
    
    
    
    
    
    
    
    1,629,055Selling, general and
administrative*
    
    
    291,684
    
    
    
    111,898
    
    
    
    349,198
    
    
    
    614,300
    
    
    
    1,367,080Research and
Development*
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    214,855
    
    
    
    214,855Income (loss) from
operations
    
    $
    316,587
    
    
    $
    310,221
    
    
    $
    249,467
    
    
    $
    (829,155
    )
    
    $
    47,120
 
 *
    
    The Company does not allocate all general and administrative expenses or any research and
development expenses to its operating segments for internal reporting. 8




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IKONICS CORPORATION
 NOTES TO CONDENSED FINANCIAL STATEMENTS
 Accounts receivable by segment as of March 31, 2009 and December 31, 2008 were as follows:
 Mar 31, 2009
    
    
    Dec 31, 2008Domestic
    
    $
    977,964
    
    
    $
    957,617Export
    
    
    593,847
    
    
    
    874,068IKONICS Imaging
    
    
    320,128
    
    
    
    276,718Other
    
    
    (31,322
    )
    
    
    (31,245
    )Total
    
    $
    1,860,617
    
    
    $
    2,077,158
 7.
    
    Sale of Non-Marketable Equity SecuritiesThe Company received $20,131 during the first quarter of 2009 related to the 2007 sale of
its equity investment in Apprise Technologies, Inc. (Apprise). The Company realized a gain
of approximately $55,000 on the $253,000 cash payment received in 2007. During 2008 the
Company received an additional $25,000 related to the Apprise sale. The Company received
the final payment of approximately $9,000 from the Apprise sale in the second quarter of
2009.
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IKONICS CORPORATION
 NOTES TO CONDENSED FINANCIAL STATEMENTS
 8.
    
    Income TaxesThe Company accounts for its uncertain tax positions under the provisions of Financial
Standards Accounting Board Interpretation No. 48, Accounting for Uncertainty in Income Taxes
(FIN 48). During the first quarter of 2009 and 2008, the statute of limitations for the
relevant taxing authority to examine and challenge the tax position for an open year
expired, resulting in decreases in income tax expense of $21,000 for the first quarter of
2009 and $44,000 for the first quarter of 2008. As of March 31, 2009, the liability for
unrecognized tax benefits totaled $27,000 compared to a liability of $48,000 as of March 31,
2008. The liability for unrecognized tax benefits is included in other accrued expenses.The Company is subject to taxation in the United States and various states. The material
jurisdictions that are subject to examination by tax authorities primarily include Minnesota
and the United States, for tax years 2006, 2007, and 2008.It has been the Companys policy to recognize interest and penalties related to uncertain
tax positions in income tax expense. The Company had accrued approximately $5,000 of
interest related to uncertain tax positions at March 31, 2009. The unrecognized tax
benefits at March 31, 2009 relate to taxation of foreign export sales.A reconciliation of the beginning and ending amounts of unrecognized tax benefit for the
first quarter of 2009 is as follows:
 Balance at December 31, 2008
    
    $
    48,000Expiration of the statute of limitations for the
assessment of taxes
    
    
    (21,000
    )Balance at March 31, 2009
    
    $
    27,000
 The balance of unrecognized tax benefits totaling $27,000 at March 31, 2009, if reversed,
would decrease the provision for income taxes and increase net income by the same amount and
reduce the Companys effective tax rate. We expect our unrecognized tax benefit to be
reduced by approximately $27,000 during the next twelve months as a result of the expiration
of the statutes of limitations for the assessment of taxes.
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The information presented below in Managements Discussion and Analysis of Financial Condition
and Results of Operations contains forward-looking statements within the meaning of the safe harbor
provisions of Section 21E of the Securities Exchange Act of 1934, as amended. Such statements are
subject to risks and uncertainties, including those discussed under Factors that May Affect Future
Results below, that could cause actual results to differ materially from those projected. Because
actual results may differ, readers are cautioned not to place undue reliance on these
forward-looking statements. Certain forward-looking statements are indicated by italics.
 
 ITEM 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
  Factors that May Affect Future Results
 
    
    The Companys expectation that its effective tax rate will return to 35% to 36% of
pretax income for the remainder of 2009 compared to the tax benefit of 45.0% recorded
in the first three month of 2009The effective tax rate for the final nine months of
2009 may be affected by changes in federal and state tax law, unanticipated changes in
the Companys financial position or the Companys operating activities and/or
management decisions could increase or decrease its effective tax rate.
    
    The Companys belief that the quality of its receivables is high and that strong
internal controls are in place to maintain proper collectionsThis belief may be
impacted by domestic economic conditions, by economic, political, regulatory or social
conditions in foreign markets, or by the failure of the Company to properly implement
or maintain internal controls.
    
    The belief that the Companys current financial resources, cash generated from
operations and the Companys capacity for debt and/or equity financing will be
sufficient to fund current and anticipated business operations and capital
expenditures. The belief that the Companys low debt levels and available line of
credit make it unlikely that a decrease in product demand would impair the Companys
ability to fund operationsChanges in anticipated operating results, credit
availability, equity market conditions or the Companys debt levels may further enhance
or inhibit the Companys ability to maintain or raise appropriate levels of cash.
    
    The Companys expectation that it will obtain a new line of credit similar to its
current line of credit when the current line of credit expiresThis expectation may be
impacted by factors such as changes in capital markets, general economic conditions,
the Companys financial results and condition, and the Companys anticipated need for
capital to fund business operations and capital expenditures.
    
    The Companys expectations as to the level and use of planned capital expenditures
and that capital expenditures will be funded with cash on hand and cash generated from
operating activitiesThis expectation may be affected by changes in the Companys
anticipated capital expenditure requirements resulting from unforeseen required
maintenance, repairs, or capital asset additions. The funding of planned or unforeseen
expenditures may also be affected by changes in anticipated operating results resulting
from decreased sales, lack of acceptance of new products or increased operating
expenses or by other unexpected events affecting the Companys financial position.
    
    The Companys belief that its vulnerability to foreign currency fluctuations and
general economic conditions in foreign countries is not significantThis belief may be
impacted by economic, political and social conditions in foreign markets, changes in
regulatory and competitive conditions, a change in
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the amount or geographic focus of the Companys international sales, or changes in
purchase or sales terms.
    
    The Companys plans to continue to invest in research and development efforts,
expedite internal product development and invest in technological alliances, as well as
the expected focus and results of such investmentsThese plans and expectations may be
impacted by general market conditions, unanticipated changes in expenses or sales,
delays in the development of new products, technological advances, the ability to find
suitable and willing technology partners or other changes in competitive or market
conditions.
    
    The Companys efforts to grow its international businessThese efforts may be
impacted by economic, political and social conditions in current and anticipated
foreign markets, regulatory conditions in such markets, unanticipated changes in
expenses or sales, changes in competitive conditions or other barriers to entry or
expansion.
    
    The Companys belief as to future activities that may be undertaken to expand the
Companys businessActual activities undertaken may be impacted by general market
conditions, competitive conditions in the Companys industry, unanticipated changes in
the Companys financial position, lack of acceptance of new products or the inability
to identify attractive acquisition targets or other business opportunities.
 Critical Accounting Estimates
  Accounts Receivable.
 Inventories.
 Income Taxes.
 Investments in Non-Marketable Equity Securities
 12




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Revenue Recognition.
 Results of Operations
 Quarter Ended March 31, 2009 Compared to Quarter Ended March 31, 2008
 Sales. .
 Gross Profit
 Selling, General and Administrative Expenses
 Research and Development Expenses
 Gain on Sale of Non-Marketable Equity Securities.
 Interest Income.
 13




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Income Taxes.
 Liquidity and Capital Resources
        14




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Capital Expenditures
  International Activity
   Future Outlook
     15




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Recent Accounting Pronouncements
    Off Balance Sheet Arrangements
  16




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ITEM 3. Quantitative and Qualitative Disclosures about Market Risk
  
 ITEM 4. Controls and Procedures
   17




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OTHER INFORMATION
 ITEM 1.
    
    Legal ProceedingsNoneITEM 1A.
    
    Risk FactorsNot applicableITEM 2.
    
    Unregistered Sales of Equity Securities and Use of ProceedsIssuer Purchases of Equity Securities (1)
 (c) Total Number ofShares Purchased as
    
    (d) Maximum Number of(a) Total Number
    
    
    
    
    
    Part of Publicly
    
    Shares that Mayof
    
    (b) Average Price
    
    Announced Plans
    
    Yet Be Purchased UnderShares Purchased
    
    Paid per Share
    
    or Programs
    
    The Plans or ProgramsJanuary 1, 2009 through January 31, 2009
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    February 1, 2009 through February 28, 2009
    
    
    6,226
    
    
    $
    4.29
    
    
    
    6,226
    
    
    
    55,931March 1, 2009 through March 31, 2009
    
    
    10,101
    
    
    $
    4.21
    
    
    
    10,101
    
    
    
    45,83016,327
    
    
    $
    4.24
    
    
    
    16,327
 
 (1)
    
    In prior years, the Companys board of directors had authorized the repurchase of
150,000 shares of common stock. In August 2008, the Companys Board of Directors approved
the repurchase of an additional 100,000 shares of common stock bringing the total shares
eligible for repurchase to 250,000. A total of 204,170 shares have been repurchased under
this program including 16,327 shares repurchased during the first quarter of 2009. The
plan allows for an additional 45,830 shares to be repurchased. ITEM 3.
    
    Defaults upon Senior SecuritiesNot applicableITEM 4.
    
    Submission of Matters to a Vote of Security HoldersNoneITEM 5.
    
    Other InformationNone
 18




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##### Table of Contents



ITEM 6.
    
    Exhibits
  Exhibit
    
    Description3.1
    
    Restated Articles of Incorporation of Company, as amended.13.2
    
    By-Laws of the Company, as amended.231.1
    
    Rule 13a-14(a)/15d-14(a) Certifications of CEO31.2
    
    Rule 13a-14(a)/15d-14(a) Certifications of CFO32
    
    Section 1350 Certifications
  
 1
    
    Incorporated by reference to the like numbered Exhibit
to the Companys Registration Statement on Form 10-SB (File No.
000-25727).2
    
    Incorporated by reference to the like numbered Exhibit to the
Companys Current Report on Form 8-K filed with the Commission on February
22, 2007 (File No. 000-25727). 19




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##### Table of Contents



SIGNATURES
  IKONICS CORPORATIONDATE: May 13, 2009
    By:
    /s/ Jon GerlachJon Gerlach,Chief Financial Officer, and
  Vice President of Finance 20




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##### Table of Contents



INDEX TO EXHIBITS
 Exhibit
    
    Description
    
    Page3.1
    
    Restated Articles of Incorporation of Company, as amended
    
    Incorporated by reference3.2
    
    By-Laws of the Company, as amended.
    
    Incorporated by reference31.1
    
    Rule 13a-14(a)/15d-14(a) Certifications of CEO.
    
    Filed Electronically31.2
    
    Rule 13a-14(a)/15d-14(a) Certifications of CFO.
    
    Filed Electronically32
    
    Section 1350 Certifications.
    
    Filed Electronically