Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Mar. 11, 2024 | Jun. 30, 2023 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Dec. 31, 2023 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2023 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity File Number | 000-20333 | ||
Entity Registrant Name | Nocopi Technologies, Inc. | ||
Entity Central Index Key | 0000888981 | ||
Entity Tax Identification Number | 87-0406496 | ||
Entity Incorporation, State or Country Code | MD | ||
Entity Address, Address Line One | 480 Shoemaker Road | ||
Entity Address, Address Line Two | Suite 104 | ||
Entity Address, City or Town | King of Prussia | ||
Entity Address, State or Province | PA | ||
Entity Address, Postal Zip Code | 19406 | ||
City Area Code | 610 | ||
Local Phone Number | 834-9600 | ||
Title of 12(g) Security | Common Stock, Par Value $0.01 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 18,570,000 | ||
Entity Common Stock, Shares Outstanding | 10,501,178 | ||
ICFR Auditor Attestation Flag | false | ||
Document Financial Statement Error Correction [Flag] | false | ||
Auditor Name | Morison Cogen LLP | ||
Auditor Firm ID | 536 | ||
Auditor Location | Blue Bell, Pennsylvania |
Balance Sheets
Balance Sheets - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Current assets | ||
Cash and cash equivalents | $ 2,269,200 | $ 917,400 |
Accounts receivable less $12,000 allowance for credit losses | 1,120,700 | 1,103,500 |
Inventory | 448,000 | 486,400 |
Interest Receivable | 160,000 | 35,200 |
Short-term investments | 7,985,600 | 4,385,200 |
Prepaid and other | 121,800 | 103,300 |
Total current assets | 12,105,300 | 7,031,000 |
Fixed assets | ||
Leasehold improvements | 81,500 | 58,400 |
Furniture, fixtures and equipment | 169,800 | 164,400 |
Fixed assets, gross | 251,300 | 222,800 |
Less: accumulated depreciation and amortization | 214,800 | 167,800 |
Total fixed assets | 36,500 | 55,000 |
Other assets | ||
Long-term receivables | 1,838,500 | 2,463,100 |
Operating lease right of use - building | 17,600 | 68,300 |
Total other assets | 1,856,100 | 2,531,400 |
Total assets | 13,997,900 | 9,617,400 |
Current liabilities | ||
Accounts payable | 27,500 | 97,700 |
Accrued expenses | 94,600 | 173,700 |
Stock compensation payable | 1,347,100 | 0 |
Income taxes | 0 | 287,100 |
Operating lease liability - current | 17,600 | 50,700 |
Total current liabilities | 1,486,800 | 609,200 |
Other liabilities | ||
Accrued expenses, non-current | 128,600 | 172,200 |
Operating lease liability - non-current | 0 | 17,600 |
Total other liabilities | 128,600 | 189,800 |
Stockholders’ equity | ||
Series A preferred stock, $1.00 par value, authorized - 300,000 shares, Issued and outstanding - none | 0 | 0 |
Common stock, $0.01 par value, authorized - 75,000,000 shares, Issued and outstanding - 2023 - 10,501,178 shares; 2022 - 9,251,178 shares | 105,000 | 92,500 |
Paid-in capital | 21,647,100 | 16,659,600 |
Accumulated deficit | (9,369,600) | (7,933,700) |
Total stockholders’ equity | 12,382,500 | 8,818,400 |
Total liabilities and stockholders’ equity | $ 13,997,900 | $ 9,617,400 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Allowance for credit losses | $ 12,000 | $ 12,000 |
Preferred stock, par value | $ 1 | $ 1 |
Preferred stock, shares authorized | 300,000 | 300,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 75,000,000 | 75,000,000 |
Common stock, shares issued | 10,501,178 | 9,251,178 |
Common stock, shares outstanding | 10,501,178 | 9,251,178 |
Statements of Comprehensive Inc
Statements of Comprehensive Income (Loss) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Revenues | ||
Licenses, royalties and fees | $ 563,200 | $ 3,613,000 |
Product and other sales | 1,520,700 | 1,014,200 |
Total revenues | 2,083,900 | 4,627,200 |
Cost of revenues | ||
Licenses, royalties and fees | 214,100 | 174,200 |
Product and other sales | 767,900 | 553,500 |
Total cost of revenues | 982,000 | 727,700 |
Gross profit | 1,101,900 | 3,899,500 |
Operating expenses | ||
Research and development | 163,400 | 140,400 |
Sales and marketing | 270,800 | 494,500 |
General and administrative | 2,538,300 | 1,219,200 |
Total operating expenses | 2,972,500 | 1,854,100 |
Net income (loss) from operations | (1,870,600) | 2,045,400 |
Other income (expenses) | ||
Interest income | 326,900 | 64,200 |
Interest expense and bank charges | (14,900) | (2,000) |
Total other income (expenses) | 312,000 | 62,200 |
Net income (loss) before income taxes | (1,558,600) | 2,107,600 |
Income taxes provision (benefit) | (122,700) | 294,500 |
Net income (loss) | $ (1,435,900) | $ 1,813,100 |
Net income (loss) per common share | ||
Basic | $ (0.15) | $ 0.24 |
Diluted | $ (0.15) | $ 0.24 |
Weighted average common shares outstanding | ||
Basic | 9,667,845 | 7,584,511 |
Diluted | 9,667,845 | 7,584,511 |
Statement of Stockholders' Equi
Statement of Stockholders' Equity - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Beginning balance, value at Dec. 31, 2021 | $ 67,500 | $ 13,184,600 | $ (9,746,800) | $ 3,505,300 |
Beginning balance, shares at Dec. 31, 2021 | 6,751,178 | |||
Sales of common stock | $ 25,000 | 3,475,000 | 3,500,000 | |
Sale of common stock, shares | 2,500,000 | |||
Net loss | 1,813,100 | 1,813,100 | ||
Ending balance, value at Dec. 31, 2022 | $ 92,500 | 16,659,600 | (7,933,700) | 8,818,400 |
Ending balance, shares at Dec. 31, 2022 | 9,251,178 | |||
Sales of common stock | $ 12,500 | 4,987,500 | 5,000,000 | |
Sale of common stock, shares | 1,250,000 | |||
Net loss | (1,435,900) | (1,435,900) | ||
Ending balance, value at Dec. 31, 2023 | $ 105,000 | $ 21,647,100 | $ (9,369,600) | $ 12,382,500 |
Ending balance, shares at Dec. 31, 2023 | 10,501,178 |
Statements of Cash Flows
Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Operating Activities | ||
Net income (loss) | $ (1,435,900) | $ 1,813,100 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities | ||
Depreciation and amortization | 47,000 | 34,100 |
Stock based compensation | 1,347,100 | 0 |
Interest Income accrued | (124,800) | (35,200) |
(Increase) decrease in assets | ||
Accounts receivable | (17,200) | (132,700) |
Inventory | 38,400 | (63,700) |
Prepaid and other | (18,500) | 56,700 |
Long-term receivables | 675,300 | (2,230,600) |
Increase (decrease) in liabilities | ||
Accounts payable and accrued expenses | (243,600) | 227,900 |
Income taxes | (287,100) | 287,100 |
Net cash used in operating activities | (19,300) | (43,300) |
Investing Activities | ||
Purchase of short-term investments | (3,600,400) | (4,385,200) |
Additions to fixed assets | (28,500) | (800) |
Net cash used in investing activities | (3,628,900) | (4,386,000) |
Financing Activities | ||
Issuance of common stock | 5,000,000 | 3,500,000 |
Net cash provided by financing activities | 5,000,000 | 3,500,000 |
Increase (decrease) in cash and cash equivalents | 1,351,800 | (929,300) |
Cash and Cash Equivalents | ||
Beginning of year | 917,400 | 1,846,700 |
End of year | 2,269,200 | 917,400 |
Cash paid for taxes | 176,700 | 0 |
Supplemental Disclosure of Non-Cash Investing and Financing Activities | ||
Accumulated depreciation and amortization | 0 | 500 |
Furniture, fixtures and equipment | $ 0 | $ (500) |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Pay vs Performance Disclosure [Table] | ||
Net Income (Loss) Attributable to Parent | $ (1,435,900) | $ 1,813,100 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Dec. 31, 2023 | |
Insider Trading Arrangements [Line Items] | |
Material Terms of Trading Arrangement | From time to time, certain of our executive officers and directors have, and we expect they will in the future, enter into, amend or terminate written trading arrangements pursuant to Rule 10b5-1 of the Securities and Exchange Act or otherwise. adopted terminated |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Organization of the Company
Organization of the Company | 12 Months Ended |
Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization of the Company | 1. Organization of the Company Nocopi Technologies, Inc. (the “Company”) is organized under the laws of the State of Maryland. Its main business activities are the development and distribution of document security products and the licensing of its patented reactive ink technologies for the Entertainment and Toy and the Document and Product Authentication markets in the United States and foreign countries. Our Company operates in one principal industry segment. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | 2. Significant Accounting Policies Financial Statement Presentation Estimates Cash and cash equivalents Investments Fair Value of Financial Instruments The framework for measuring fair value provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy under FASB ASC 820 are described as follows: Level 1 Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Company can access. Level 2 Inputs to the valuation methodology include: ● quoted prices for similar assets or liabilities in active markets; ● quoted prices for identical or similar assets or liabilities in inactive markets; ● inputs other than quoted prices that are observable for the asset or liability; ● inputs that are derived principally from or corroborated by observable market data by correlation or other means If the asset or liability has a specified (contractual) term, the level 2 input must be observable for substantially the full term of the asset or liability. Level 3 Inputs to the valuation methodology are unobservable and significant to the fair value measurement. The asset or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. Valuation techniques maximize the use of relevant observable inputs and minimize the use of unobservable inputs. The following is a description of the valuation methodologies used for assets measured at fair value as of December 31, 2023 and December 31, 2022. Short-term investments - Level 2 financial instrument: Valued using quoted prices in active markets for identical assets. Accounts receivable and credit policies The carrying amount of accounts receivable is reduced by an allowance that reflects management’s best estimate of the amounts that will not be collected Accounts receivable are presented net of an allowance for credit losses, which is an estimate of amounts that may not be collectible. The Company uses historical loss information based on the aging of receivables, adjusted for management’s expectations about current and future economic conditions, as the basis to determine expected credit losses. Management exercises significant judgment in determining expected credit losses. Key inputs include macroeconomic factors, industry trends, and the creditworthiness of counterparties. Management believes that the composition of receivables at year-end is consistent with historical conditions as credit terms and practices and the client base has not changed significantly. Inventory Fixed assets Patent costs Revenues Revenue from Contracts with Customers Income taxes Stock-based payments Earnings per share Comprehensive income Recoverability of Long-Lived Assets Our Company follows FASB ASC 360-35, “Impairment or Disposal of Long-Lived Assets.” The Statement requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Our Company is not aware of any events or circumstances which indicate the existence of an impairment which would be material to our Company’s annual financial statements. Recently Adopted Accounting Pronouncements In June 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-13, Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments . Reclassifications Certain reclassifications have been made to the 2022 financial statements in order to conform to the 2023 financial statement presentation. |
Cash and Cash Equivalents
Cash and Cash Equivalents | 12 Months Ended |
Dec. 31, 2023 | |
Cash and Cash Equivalents [Abstract] | |
Cash and Cash Equivalents | 3. Cash and Cash Equivalents Schedule of cash and cash equivalents Year ended December 31 2023 2022 Cash and cash equivalents Cash and money market funds $ 2,269,200 $ 917,400 Cash and cash equivalents $ 2,269,200 $ 917,400 |
Short-term Investments
Short-term Investments | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Short-term Investments | 4. Short-term Investments Schedule of short term investments Year ended December 31 2023 2022 Short-term investments U.S. Treasury Bills $ 7,985,600 $ 4,385,200 Short-term investments $ 7,985,600 $ 4,385,200 Schedule of amortized cost and fair value of securities held to maturity Amortized Cost Fair Value U.S. Treasury Bills Due January 25, 2024 $ 1,074,700 $ 1,121,200 Due April 18, 2024 1,087,900 1,107,600 Due July 11, 2024 1,074,800 1,096,700 Due September 5, 2024 4,748,200 4,837,600 Total $ 7,985,600 $ 8,163,100 Total interest income recognized for U.S. Treasury Bills was $ 239,600 and $ 35,200 for years ended December 31, 2023 and December 31, 2022. Interest receivable was $ 160,000 35,200 |
Concentration of Credit Risk
Concentration of Credit Risk | 12 Months Ended |
Dec. 31, 2023 | |
Risks and Uncertainties [Abstract] | |
Concentration of Credit Risk | 5. Concentration of Credit Risk We currently maintain, and may in the future maintain, our assets at certain financial institutions in the U.S. in amounts that are, and in the future may be, in excess of the Federal Deposit Insurance Corporation (“FDIC”) insurance limit of $250,000. At December 31, 2023, our Company’s deposits and short-term investments with a financial institution were $ 10,164,800 250,000 In addition, we are exposed to credit risk with respect to our accounts receivable due to the concentration of our major customers. See Note 11 for a discussion of our customer concentration. |
Long-term Receivables
Long-term Receivables | 12 Months Ended |
Dec. 31, 2023 | |
Receivables [Abstract] | |
Long-term Receivables | 6. Long-term Receivables As of December 31, 2023, the Company had long-term receivables of $ 1,838,500 4 The three agreements grant licenses for the use of certain patented ink technology as it exists at the time that it is granted which is considered functional intellectual property. Under Topic 606, a performance obligation to transfer a license for functional intellectual property is satisfied at a point in time and the fixed consideration could be recognized upfront when the Company transfers control of the licensee if certain criteria are met. Specifically, the minimum royalty guarantee could be recognized upfront if the following conditions are met: · The royalty payment is fixed or determinable · Collection of the royalty payment is considered probable · The licensee has the ability to benefit from the licensed technology The Company determined that the above conditions were met upon execution of the new 2022 license agreements and recognized $ 2,810,600 132,300 206,600 196,500 172,200 194,700 The current portion of the three license agreements, in the amount of $ 624,600 507,400 The following table summarizes the future minimum payments due under the three license agreements as of December 31, 2023: Schedule of future minimum payments Year Ending December 31: 2024 $ 642,000 2025 $ 570,000 2026 $ 570,000 2027 $ 557,500 2028 $ 260,000 Total $ 2,599,500 The Company has evaluated the collectability of the long-term receivables and believes them to be fully collectible as of December 31, 2023. However, there can be no assurance that the receivables will not be impaired in the future due to changes in the licensees’ financial condition or other factors. The long-term receivables are recorded at its present value as of December 31, 2023, and will be amortized over the term of the license agreements using the effective interest method. The unamortized balance of the receivables as of December 31, 2023 and 2022 is $ 2,463,100 2,970,600 624,600 507,500 The Company has also considered the potential impact of changes in interest rates on the present value of the three long-term receivables. A hypothetical 1 21,400 |
Line of Credit
Line of Credit | 12 Months Ended |
Dec. 31, 2023 | |
Line Of Credit | |
Line of Credit | 7. Line of Credit In November 2018, our Company negotiated a $ 150,000 The line of credit is secured by all the assets of our Company and bears interest at the bank’s prime rate for a period of one year and its prime rate plus 1.5% thereafter |
Stockholders_ Equity
Stockholders’ Equity | 12 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
Stockholders’ Equity | 8. Stockholders’ Equity As part of an employment agreement, the Company granted an executive a one-time equity award of 1,000,000 3,580,000 1,320,500 To the extent the Company has not established an employee equity compensation plan on or prior to August 18, 2024, the restricted shares may be converted, at the election of the executive, in full or in part, into cash compensation, at a rate of $3.58 per share of common stock, which was the fair market value of the common stock on October 10, 2023, which was the date the Board of Directors approved the Grant.. Since the issuance of the restricted stock can be settled in cash, the monthly amortization of the $3,580,000 fair value of the restricted stock grant is recorded as stock compensation payable. On September 11, 2023 our Company entered into a stock purchase agreement in connection with a private placement for total gross proceeds of $ 5 1,250,000 4.00 65,790 263,160 26,600 On September 11, 2023, the sale pursuant to the closed. No placement fees or commissions were paid in connection with this transaction. On August 25, 2022, our Company filed Articles of Amendment to its Articles of Incorporation with the State Department of Assessments and Taxation of the State of Maryland one-for-ten Effective Time No fractional shares were issued in connection with the reverse stock split. Each stockholder who would otherwise have been entitled to receive a fraction of a share of our Company’s common stock instead received one whole share of common stock. On August 1, 2022 our Company entered into a stock purchase agreement in connection with a private placement for total gross proceeds of $ 3.5 2,500,000 1.40 Board of Directors approved On September 13, 2022, the sale pursuant to the closed. No placement fees or commissions were paid in connection with this transaction. At December 31, 2023, our Company had no warrants outstanding. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 9. Income Taxes As of December 31, 2023 and 2022, our Company had estimated federal net operating loss carryforwards of approximately $ 211,0000 1,791,000 1,657,800 592,400 143,400 The components for federal and state income tax expens e (benefit) are: Schedule of federal and state income tax expense Year ended December 31, 2023 2022 Current federal tax benefit $ (166,700 ) $ 167,800 Current state tax benefit (16,000 ) 126,700 Deferred tax benefit (389,000 ) — Change in valuation allowance 449,000 $ (122,700 ) $ 294,500 The reconciliation of the statutory federal rate to our Company’s effective tax rate follows: Schedule of reconciliation of the statutory federal rate 2023 2022 Amount % Amount % Income tax expense (benefit) at U.S. federal income tax rate $ (327,300 ) (21 ) $ 442,600 21 State tax net of federal tax effect (121,900 ) (8 ) 166,300 8 Tax accrual adjustment (122,500 ) (8 ) Change in valuation allowance 449,000 29 Utilization of operating losses — — (314,400 ) (15 ) $ (122,700 ) (8 ) $ 294,500 14 The components of deferred tax assets and liabilities as of December 31, 2023 and 2022 are as follows: Schedule of deferred tax assets and liabilities 2023 2022 Deferred tax asset for NOL carryforwards $ 203,400 $ 143,400 Stock-based compensation 389,000 Valuation allowance (592,400 ) (143,400 ) Net $ — $ — Our Company follows FASB ASC 740.10, which provides guidance for the recognition and measurement of certain tax positions in an enterprise’s financial statements. Recognition involves a determination of whether it is more likely than not that a tax position will be sustained upon examination with the presumption that the tax position will be examined by the appropriate taxing authority having full knowledge of all relevant information. Our Company’s policy is to record interest and penalties associated with unrecognized tax benefits as additional income taxes in the statement of comprehensive income. As of January 1, 2023, our Company had no no The Company files U.S. income tax returns and a state income tax return. With few exceptions, the U.S. and state income tax returns filed for the tax years ending on December 31, 2020 and thereafter are subject to examination by the relevant taxing authorities. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 10. Commitments and Contingencies Our Company conducts its operations in leased facilities under a non-cancelable operating lease expiring in 2024. The lease has been extended for 13 months beginning on May 1, 2024 and expiring on May 31, 2025. Due to the adoption of the new lease standard under the optional transition method which allows the entity to apply the new lease standard at the adoption date, our Company has capitalized the present value of the minimum lease payments commencing January 1, 2019, using an estimated incremental borrowing rate of 6 As of January 1, 2019 the operating lease right-of-use asset and operating lease liability amounted to $ 241,100 no There are no other material operating leases. Our Company has elected not to recognize right-of-use assets and lease liabilities arising from short-term leases. Total operating lease costs were $ 53,300 Maturities of lease liabilities are as follows: Schedule of maturities of lease liabilities Operating Leases Year ending December 31 2024 $ 18,900 Total lease payments 18,900 Less imputed interest (1,300 ) Total $ 17,600 In connection with Michael S. Liebowitz’s appointment as Chief Executive Officer of the Company, on October 19, 2023, Mr. Liebowitz and the Company entered into an employment agreement, which sets forth the terms and conditions of his employment and is effective as of October 19, 2023. In consideration for serving as Chief Executive Officer, Mr. Liebowitz is entitled to an annual base salary of $ 400,000 1,000,000 Our Company had an employment agreement with Michael A. Feinstein, M.D., our former Chairman of the Board and Chief Executive Officer. The employment agreement with Dr. Feinstein was terminated as of August 18, 2023. Our Company has an employment agreement, expiring in March 2024, with Terry W. Stovold, its Chief Operating Officer, whereby Mr. Stovold receives a salary set by our Company’s Board of Directors, currently set at $ 75,000 125,000 From time to time, our Company may be subject to legal proceedings and claims that arise in the ordinary course of its business. |
401(k) Savings Plan
401(k) Savings Plan | 12 Months Ended |
Dec. 31, 2023 | |
Compensation Related Costs [Abstract] | |
401(k) Savings Plan | 11. 401(k) Savings Plan Our Company sponsors a 401(k) savings plan, covering substantially all employees, providing for employee and employer contributions. Employer contributions are made at the discretion of our Company. There were no contributions charged to expense during 2023 or 2022. |
Major Customer and Geographic I
Major Customer and Geographic Information | 12 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
Major Customer and Geographic Information | 12. Major Customer and Geographic Information Our Company’s revenues, expressed as a percentage of total revenues, from non-affiliated customers that equaled 10% or more of our Company’s total revenues were: Schedule of revenues as percentage of revenue Year ended December 31 2023 2022 Customer A 19 % 66 % Customer B 64 % 19 % Our Company’s non-affiliate customers whose individual balances amounted to more than 10% of our Company’s net accounts receivable, expressed as a percentage of net accounts receivable, were: Schedule of non-affiliated customers with accounts receivable December 31 2023 2022 Customer A 82 % 84 % Customer B 7 % 6 % Our Company performs ongoing credit evaluations of its customers and generally does not require collateral. Our Company also maintains allowances for potential credit losses. The loss of a major customer could have a material adverse effect on our Company’s business operations and financial condition. Our Company’s revenues by geographic region are as follows: Schedule of revenue by geographic region Year ended December 31 2023 2022 North America 591,900 3,331,600 South America 600 1,600 Europe — 200 Asia 1,439,500 968,000 Australia 51,900 325,800 2,083,900 4,627,200 |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Financial Statement Presentation | Financial Statement Presentation |
Estimates | Estimates |
Cash and cash equivalents | Cash and cash equivalents |
Investments | Investments |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The framework for measuring fair value provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy under FASB ASC 820 are described as follows: Level 1 Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Company can access. Level 2 Inputs to the valuation methodology include: ● quoted prices for similar assets or liabilities in active markets; ● quoted prices for identical or similar assets or liabilities in inactive markets; ● inputs other than quoted prices that are observable for the asset or liability; ● inputs that are derived principally from or corroborated by observable market data by correlation or other means If the asset or liability has a specified (contractual) term, the level 2 input must be observable for substantially the full term of the asset or liability. Level 3 Inputs to the valuation methodology are unobservable and significant to the fair value measurement. The asset or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. Valuation techniques maximize the use of relevant observable inputs and minimize the use of unobservable inputs. The following is a description of the valuation methodologies used for assets measured at fair value as of December 31, 2023 and December 31, 2022. Short-term investments - Level 2 financial instrument: Valued using quoted prices in active markets for identical assets. |
Accounts receivable and credit policies | Accounts receivable and credit policies The carrying amount of accounts receivable is reduced by an allowance that reflects management’s best estimate of the amounts that will not be collected Accounts receivable are presented net of an allowance for credit losses, which is an estimate of amounts that may not be collectible. The Company uses historical loss information based on the aging of receivables, adjusted for management’s expectations about current and future economic conditions, as the basis to determine expected credit losses. Management exercises significant judgment in determining expected credit losses. Key inputs include macroeconomic factors, industry trends, and the creditworthiness of counterparties. Management believes that the composition of receivables at year-end is consistent with historical conditions as credit terms and practices and the client base has not changed significantly. |
Inventory | Inventory |
Fixed assets | Fixed assets |
Patent costs | Patent costs |
Revenues | Revenues Revenue from Contracts with Customers |
Income taxes | Income taxes |
Stock-based payments | Stock-based payments |
Earnings per share | Earnings per share |
Comprehensive income | Comprehensive income |
Recoverability of Long-Lived Assets | Recoverability of Long-Lived Assets Our Company follows FASB ASC 360-35, “Impairment or Disposal of Long-Lived Assets.” The Statement requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Our Company is not aware of any events or circumstances which indicate the existence of an impairment which would be material to our Company’s annual financial statements. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In June 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-13, Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments . |
Reclassifications | Reclassifications Certain reclassifications have been made to the 2022 financial statements in order to conform to the 2023 financial statement presentation. |
Cash and Cash Equivalents (Tabl
Cash and Cash Equivalents (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Cash and Cash Equivalents [Abstract] | |
Schedule of cash and cash equivalents | Schedule of cash and cash equivalents Year ended December 31 2023 2022 Cash and cash equivalents Cash and money market funds $ 2,269,200 $ 917,400 Cash and cash equivalents $ 2,269,200 $ 917,400 |
Short-term Investments (Tables)
Short-term Investments (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of short term investments | Schedule of short term investments Year ended December 31 2023 2022 Short-term investments U.S. Treasury Bills $ 7,985,600 $ 4,385,200 Short-term investments $ 7,985,600 $ 4,385,200 |
Schedule of amortized cost and fair value of securities held to maturity | Schedule of amortized cost and fair value of securities held to maturity Amortized Cost Fair Value U.S. Treasury Bills Due January 25, 2024 $ 1,074,700 $ 1,121,200 Due April 18, 2024 1,087,900 1,107,600 Due July 11, 2024 1,074,800 1,096,700 Due September 5, 2024 4,748,200 4,837,600 Total $ 7,985,600 $ 8,163,100 |
Long-term Receivables (Tables)
Long-term Receivables (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Receivables [Abstract] | |
Schedule of future minimum payments | Schedule of future minimum payments Year Ending December 31: 2024 $ 642,000 2025 $ 570,000 2026 $ 570,000 2027 $ 557,500 2028 $ 260,000 Total $ 2,599,500 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of federal and state income tax expense | Schedule of federal and state income tax expense Year ended December 31, 2023 2022 Current federal tax benefit $ (166,700 ) $ 167,800 Current state tax benefit (16,000 ) 126,700 Deferred tax benefit (389,000 ) — Change in valuation allowance 449,000 $ (122,700 ) $ 294,500 |
Schedule of reconciliation of the statutory federal rate | Schedule of reconciliation of the statutory federal rate 2023 2022 Amount % Amount % Income tax expense (benefit) at U.S. federal income tax rate $ (327,300 ) (21 ) $ 442,600 21 State tax net of federal tax effect (121,900 ) (8 ) 166,300 8 Tax accrual adjustment (122,500 ) (8 ) Change in valuation allowance 449,000 29 Utilization of operating losses — — (314,400 ) (15 ) $ (122,700 ) (8 ) $ 294,500 14 |
Schedule of deferred tax assets and liabilities | Schedule of deferred tax assets and liabilities 2023 2022 Deferred tax asset for NOL carryforwards $ 203,400 $ 143,400 Stock-based compensation 389,000 Valuation allowance (592,400 ) (143,400 ) Net $ — $ — |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of maturities of lease liabilities | Schedule of maturities of lease liabilities Operating Leases Year ending December 31 2024 $ 18,900 Total lease payments 18,900 Less imputed interest (1,300 ) Total $ 17,600 |
Major Customer and Geographic_2
Major Customer and Geographic Information (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
Schedule of revenues as percentage of revenue | Schedule of revenues as percentage of revenue Year ended December 31 2023 2022 Customer A 19 % 66 % Customer B 64 % 19 % |
Schedule of non-affiliated customers with accounts receivable | Schedule of non-affiliated customers with accounts receivable December 31 2023 2022 Customer A 82 % 84 % Customer B 7 % 6 % |
Schedule of revenue by geographic region | Schedule of revenue by geographic region Year ended December 31 2023 2022 North America 591,900 3,331,600 South America 600 1,600 Europe — 200 Asia 1,439,500 968,000 Australia 51,900 325,800 2,083,900 4,627,200 |
Cash and Cash Equivalents (Deta
Cash and Cash Equivalents (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Cash and Cash Equivalents [Abstract] | ||
Cash and money market funds | $ 2,269,200 | $ 917,400 |
Cash and cash equivalents | $ 2,269,200 | $ 917,400 |
Short-term Investments (Details
Short-term Investments (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Short-term investments | ||
U.S. Treasury Bills | $ 7,985,600 | $ 4,385,200 |
Short-term investments | $ 7,985,600 | $ 4,385,200 |
Short-term Investments (Detai_2
Short-term Investments (Details 1) | Dec. 31, 2023 USD ($) |
Cash and Cash Equivalents [Line Items] | |
Amortized Cost | $ 7,985,600 |
Fair Value | 8,163,100 |
Due January [Member] | |
Cash and Cash Equivalents [Line Items] | |
Amortized Cost | 1,074,700 |
Fair Value | 1,121,200 |
Due April [Member] | |
Cash and Cash Equivalents [Line Items] | |
Amortized Cost | 1,087,900 |
Fair Value | 1,107,600 |
Due July [Member] | |
Cash and Cash Equivalents [Line Items] | |
Amortized Cost | 1,074,800 |
Fair Value | 1,096,700 |
Due September [Member] | |
Cash and Cash Equivalents [Line Items] | |
Amortized Cost | 4,748,200 |
Fair Value | $ 4,837,600 |
Short-term Investments (Detai_3
Short-term Investments (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Debt Disclosure [Abstract] | ||
U.S Treasury bills interest income | $ 239,600 | $ 35,200 |
Interest receivable | $ 160,000 | $ 35,200 |
Concentration of Credit Risk (D
Concentration of Credit Risk (Details Narrative) | Dec. 31, 2023 USD ($) |
Risks and Uncertainties [Abstract] | |
Cash uninsured by FDIC | $ 10,164,800 |
Cash FDIC insured amount | $ 250,000 |
Long-term Receivables (Details)
Long-term Receivables (Details) | Dec. 31, 2023 USD ($) |
Receivables [Abstract] | |
2024 | $ 642,000 |
2025 | 570,000 |
2026 | 570,000 |
2027 | 557,500 |
2028 | 260,000 |
Total | $ 2,599,500 |
Long-term Receivables (Details
Long-term Receivables (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Receivables [Abstract] | ||
Long-term receivables | $ 1,838,500 | $ 2,463,100 |
Incremental borrowing rate | 4% | |
Royalty revenue | 2,810,600 | |
Imputed interest | 132,300 | |
Commission expense | $ 206,600 | 196,500 |
Accrued commission payable | 172,200 | 194,700 |
Accounts receivable,current | 624,600 | 507,400 |
Unamortized receivables | 2,463,100 | 2,970,600 |
Accounts receivable, long-term | $ 624,600 | $ 507,500 |
Increase or decrease in incremental borrowing rate | 1% | |
Increase or decrease in present value of receivables | $ 21,400 |
Line of Credit (Details Narrati
Line of Credit (Details Narrative) | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Line Of Credit | |
Line of credit facility, maximum borrowing capacity | $ 150,000 |
Line of credit facility, interest rate description | The line of credit is secured by all the assets of our Company and bears interest at the bank’s prime rate for a period of one year and its prime rate plus 1.5% thereafter |
Stockholders_ Equity (Details N
Stockholders’ Equity (Details Narrative) - USD ($) | 12 Months Ended | |||
Sep. 11, 2023 | Aug. 25, 2022 | Aug. 02, 2022 | Dec. 31, 2023 | |
Subsidiary, Sale of Stock [Line Items] | ||||
Proceeds from Issuance or Sale of Equity | $ 5,000,000 | $ 3,500,000 | ||
Aggregate shares issued | 65,790 | |||
Fair market value | $ 263,160 | |||
Consulting expense | $ 26,600 | |||
Reverse stock split | one-for-ten | |||
Private Placement [Member] | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Issuance of shares | 1,250,000 | 2,500,000 | ||
Share price | $ 4 | $ 1.40 | ||
Employment Agreement [Member] | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Aggregate Intrinsic Value, Outstanding | 3,580,000 | |||
Employee Benefits and Share-Based Compensation | $ 1,320,500 | |||
Agreement, Description | To the extent the Company has not established an employee equity compensation plan on or prior to August 18, 2024, the restricted shares may be converted, at the election of the executive, in full or in part, into cash compensation, at a rate of $3.58 per share of common stock, which was the fair market value of the common stock on October 10, 2023, which was the date the Board of Directors approved the Grant.. Since the issuance of the restricted stock can be settled in cash, the monthly amortization of the $3,580,000 fair value of the restricted stock grant is recorded as stock compensation payable. | |||
Restricted Stock [Member] | Employment Agreement [Member] | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Grants in Period | 1,000,000 |
Income Taxes (Details - State I
Income Taxes (Details - State Income Tax Expense) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Current federal tax benefit | $ (166,700) | $ 167,800 |
Current state tax benefit | (16,000) | 126,700 |
Deferred tax benefit | (389,000) | |
Change in valuation allowance | 449,000 | |
Income tax expense (benefit) | $ (122,700) | $ 294,500 |
Income Taxes (Details - Reconci
Income Taxes (Details - Reconciliation of the Statutory Fedreal Rate) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Income tax expense (benefit) at U.S. federal income tax rate | $ (327,300) | $ 442,600 |
Income tax expense (benefit) at U.S. federal income tax rate, percentage | (21.00%) | 21% |
State tax net of federal tax effect | $ (121,900) | $ 166,300 |
State tax net of federal tax effect percentage | (8.00%) | 8% |
Tax accrual adjustment | $ (122,500) | |
Tax accrual adjustment percentage | (8.00%) | |
Change in valuation allowance | $ 449,000 | |
Change in valuation allowance percentage | 29% | |
Increase in (utilization of ) operating losses | $ 0 | $ (314,400) |
Increase in (utilization of ) operating losses percentage | 0% | (15.00%) |
Total | $ (122,700) | $ 294,500 |
Total percentage | (8.00%) | 14% |
Income Taxes (Details - Deferre
Income Taxes (Details - Deferred Tax Assets and Liabilities) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Income Tax Disclosure [Abstract] | ||
Deferred tax asset for NOL carryforwards | $ 203,400 | $ 143,400 |
Stock-based compensation | 389,000 | |
Valuation allowance | (592,400) | (143,400) |
Net | $ 0 | $ 0 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Operating Loss Carryforwards [Line Items] | ||
Deferred tax assets valuation allowance | $ 592,400 | $ 143,400 |
Unrecognized tax benefits | 0 | |
Accrual for uncertain tax positions | 0 | |
Domestic Tax Authority [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforwards | 211 | |
State and Local Jurisdiction [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforwards | $ 1,791,000 | $ 1,657,800 |
Commitments and Contingencies_2
Commitments and Contingencies (Details - Maturities of Lease Liabilities) - USD ($) | Dec. 31, 2023 | Jan. 01, 2019 |
Commitments and Contingencies Disclosure [Abstract] | ||
2024 | $ 18,900 | |
Total lease payments | 18,900 | |
Less imputed interest | (1,300) | |
Total | $ 17,600 | $ 0 |
Commitments and Contingencies_3
Commitments and Contingencies (Details Narrative) - USD ($) | 12 Months Ended | |||
Aug. 18, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Jan. 01, 2019 | |
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | ||||
Incremental borrowing rate | 6% | |||
Operating lease right-of-use asset | $ 17,600 | $ 68,300 | $ 241,100 | |
Operating lease liability | 17,600 | $ 0 | ||
Operating lease cost | 53,300 | 53,300 | ||
Accrued sales commission | 172,200 | $ 194,700 | ||
Mr Stovold [Member] | ||||
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | ||||
Accrued sales commission | 75,000 | |||
Matthew C Winger [Member] | ||||
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | ||||
Accrued sales commission | $ 125,000 | |||
Equity Award [Member] | ||||
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | ||||
Equity award of restricted shares | 1,000,000 | |||
Chief Executive Officer [Member] | ||||
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | ||||
Annual base salary | $ 400,000 |
Major Customer and Geographic_3
Major Customer and Geographic Information (Details - Non-affiliated Customers) - Revenue Benchmark [Member] - Customer Concentration Risk [Member] | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Customer A [Member] | ||
Revenue, Major Customer [Line Items] | ||
Risk percentage | 19% | 66% |
Customer B [Member] | ||
Revenue, Major Customer [Line Items] | ||
Risk percentage | 64% | 19% |
Major Customer and Geographic_4
Major Customer and Geographic Information (Details - Non-affiliated Customers with Accounts Receivable) - Accounts Receivable [Member] - Customer Concentration Risk [Member] | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Customer A [Member] | ||
Revenue, Major Customer [Line Items] | ||
Risk percentage | 82% | 84% |
Customer B [Member] | ||
Revenue, Major Customer [Line Items] | ||
Risk percentage | 7% | 6% |
Major Customer and Geographic_5
Major Customer and Geographic Information (Details - Revenue by Geographic Region) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | $ 2,083,900 | $ 4,627,200 |
North America [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | 591,900 | 3,331,600 |
South America [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | 600 | 1,600 |
Europe [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | 0 | 200 |
Asia [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | 1,439,500 | 968,000 |
AUSTRALIA | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | $ 51,900 | $ 325,800 |