Nocopi (NNUP) 10-Q 6 May 22 2022 Q1 Quarterly report Financial data

Cover

Cover - shares	3 Months Ended
	Mar. 31, 2022	May 03, 2022
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Mar. 31, 2022
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2022
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
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 Common Stock, Shares Outstanding		67,495,055

Statements of Comprehensive Inc

Statements of Comprehensive Income - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Revenues
Licenses, royalties and fees	$ 137,300	$ 185,500
Product and other sales	202,100	425,900
Total revenues	339,400	611,400
Cost of revenues
Licenses, royalties and fees	39,500	47,100
Product and other sales	126,700	173,200
Total cost of revenues	166,200	220,300
Gross profit	173,200	391,100
Operating expenses
Research and development	39,500	44,500
Sales and marketing	64,800	83,200
General and administrative	277,700	145,500
Total operating expenses	382,000	273,200
Net income (loss) from operations	(208,800)	117,900
Other income (expenses)
Interest income	5,800	4,800
Interest expense and bank charges	(400)	(600)
Total other income (expenses)	5,400	4,200
Net income (loss) before income taxes	(203,400)	122,100
Income taxes		7,300
Net income (loss)	$ (203,400)	$ 114,800
Basic net income (loss) per common share	$ 0	$ 0
Diluted net income (loss) per common share	$ 0	$ 0
Weighted average common shares outstanding
Basic	67,495,055	67,353,690
Diluted	67,495,055	67,477,603

Balance Sheets

Balance Sheets - USD ($)	Mar. 31, 2022	Dec. 31, 2021
Current assets
Cash	$ 2,016,900	$ 1,846,700
Accounts receivable less $12,000 allowance for doubtful accounts	799,100	970,800
Inventory	511,100	422,700
Prepaid and other	80,900	160,000
Total current assets	3,408,000	3,400,200
Fixed assets
Leasehold improvements	58,400	58,400
Furniture, fixtures and equipment	164,100	164,100
Fixed assets gross	222,500	222,500
Less: accumulated depreciation and amortization	142,700	134,200
Total fixed assets	79,800	88,300
Other assets
Long-term receivables	92,300	185,000
Operating lease right of use – building	104,200	115,800
Other assets	196,500	300,800
Total assets	3,684,300	3,789,300
Current liabilities
Accounts payable	99,300	3,700
Accrued expenses	172,400	151,500
Operating lease liability – current	48,300	47,500
Total current liabilities	320,000	202,700
Other liabilities
Accrued expenses, non-current	6,500	13,000
Operating lease liability – non-current	55,900	68,300
Total other liabilities	62,400	81,300
Stockholders' equity
Common stock, $0.01 par value Authorized – 75,000,000 shares Issued and outstanding – 67,495,055 shares	675,000	675,000
Paid-in capital	12,577,100	12,577,100
Accumulated deficit	(9,950,200)	(9,746,800)
Total stockholders' equity	3,301,900	3,505,300
Total liabilities and stockholders' equity	$ 3,684,300	$ 3,789,300

Balance Sheets (Parenthetical)

Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2022	Dec. 31, 2021
Statement of Financial Position [Abstract]
Common Stock, Par or Stated Value Per Share	$ 0.01	$ 0.01
Common Stock, Shares Authorized	75,000,000	75,000,000
Common Stock, Shares, Issued	67,495,055	67,495,055
Common Stock, Shares, Outstanding	67,495,055	67,495,055

Statements of Cash Flows

Statements of Cash Flows - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Operating Activities
Net income (loss)	$ (203,400)	$ 114,800
Adjustments to reconcile net income (loss) to net cash provided by operating activities
Depreciation and amortization	8,500	6,100
Other assets	104,300	105,100
Other liabilities	(18,100)	(17,500)
Adjustments To Reconcile Net Income Loss To Cash	(108,700)	208,500
(Increase) decrease in assets
Accounts receivable	171,700	113,200
Inventory	(88,400)	(59,900)
Prepaid and other	79,100	34,200
Increase in liabilities
Accounts payable and accrued expenses	116,500	62,100
Income taxes		7,300
Total (increase) decrease in assets and liabilities	278,900	156,900
Net cash provided by operating activities	170,200	365,400
Increase in cash	170,200	365,400
Cash at beginning of year	1,846,700	1,362,800
Cash at end of period	$ 2,016,900	$ 1,728,200

Statements of Stockholders' Equ

Statements of Stockholders' Equity - USD ($)	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Total
Beginning balance, value at Dec. 31, 2020	$ 673,500	$ 12,575,800	$ (9,796,200)	$ 3,453,100
Beginning balance, shares at Dec. 31, 2020	67,353,690
Net income			114,800	114,800
Ending balance, value at Mar. 31, 2021	$ 673,500	12,575,800	(9,681,400)	3,567,900
Ending balance, shares at Mar. 31, 2021	67,353,690
Beginning balance, value at Dec. 31, 2021	$ 675,000	12,577,100	(9,746,800)	3,505,300
Beginning balance, shares at Dec. 31, 2021	67,495,055
Net income			(203,400)	(203,400)
Ending balance, value at Mar. 31, 2022	$ 675,000	$ 12,577,100	$ (9,950,200)	$ 3,301,900
Ending balance, shares at Mar. 31, 2022	67,495,055

Financial Statements

Financial Statements	3 Months Ended
	Mar. 31, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Financial Statements	Note 1. Financial Statements The accompanying unaudited condensed financial statements have been prepared by Nocopi Technologies, Inc. (our “Company”). These statements include all adjustments (consisting only of normal recurring adjustments) which management believes necessary for a fair presentation of the statements and have been prepared on a consistent basis using the accounting policies described in Note 2 Significant Accounting Policies included in the Notes to Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the Securities and Exchange Commission on March 30, 2022, as amended on April 29, 2022 (the “2021 Annual Report”). Certain financial information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although our Company believes that the accompanying disclosures are adequate to make the information presented not misleading. The Notes to Financial Statements included in the 2021 Annual Report should be read in conjunction with the accompanying interim financial statements. The interim operating results for the three months ended March 31, 2022 may not be necessarily indicative of the operating results expected for the full year. A novel strain of coronavirus, COVID-19, that was first identified in Wuhan, China in December 2019 has surfaced in many countries around the world including the United States. Many countries continue to experience reoccurrences of COVID-19 to the current date. The World Health Organization has declared COVID-19 to constitute a global pandemic. Certain state and local governments reacted by placing significant restrictions on businesses including a closure in Pennsylvania of non-essential businesses that was announced on March 20, 2020. While most Pennsylvania businesses have been allowed to reopen, often at limited capacity and with certain restrictions, as of the current date, there can be no assurances that future closures will be avoided. A requirement to close our Company for a considerable period of time could result in a negative impact on our Company’s financial condition and results of operations. Additionally, as our Company imports certain raw materials from China, if an extended disruption of the supply of these raw materials were to occur, such as the vessel delays resulting from the congestion experienced in certain Chinese ports due to a COVID-19 outbreak in the second quarter of 2021 and continuing to the present time, our ability to produce products for sale to our customers could be negatively impacted. Additionally, certain of the Company’s licensees in the entertainment and toy products market who utilize printers in China to produce their products have been affected by the COVID-19 related cargo surge beginning in the third quarter of 2021 and continuing to the present time at major Chinese and United States ports as well as the world-wide container shortage resulting in significantly higher shipping costs, and have responded by deferring or scaling back production of their orders and, in some cases, rescheduling the shipping of completed orders. Such deferrals may affect the number and value of orders placed by the Company’s licensed printers in the entertainment and toy products market. Further, restrictions on our customers and licensees in areas affected by the COVID-19 could adversely affect our results of operations and financial condition. Our Company’s operating results for the first quarter of 2022 are reflective of the effects of the ongoing cargo surge as well as lockdowns in certain Chinese cities, including Shanghai, during the first quarter of 2022 that affected businesses and production in those areas. A We cannot predict the scope or magnitude of the negative effect that may result from the impact of the COVID-19 pandemic on the Company’s A Our Company follows Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 220 in reporting comprehensive income (loss). Comprehensive income is a more inclusive financial reporting methodology that includes disclosure of certain financial information that historically has not been recognized in the calculation of net income. Since our Company has no items of other comprehensive income (loss), comprehensive income (loss) is equal to net income (loss).

Stock Based Compensation

Stock Based Compensation	3 Months Ended
	Mar. 31, 2022
Compensation Related Costs [Abstract]
Stock Based Compensation	Note 2. Stock Based Compensation Our Company follows FASB ASC 718, Compensation – Stock Compensation no

Line of Credit

Line of Credit	3 Months Ended
	Mar. 31, 2022
Line Of Credit
Line of Credit	Note 3. 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.

Stock Warrants

Stock Warrants	3 Months Ended
	Mar. 31, 2022
Stock Warrants
Stock Warrants	Note 4. Stock Warrants At March 31, 2021, our Company had warrants outstanding to purchase 141,365 $0.02 141,365

Income Taxes

Income Taxes	3 Months Ended
	Mar. 31, 2022
Income Tax Disclosure [Abstract]
Income Taxes	Note 5. Income Taxes There is no income tax benefit for the losses for the three months ended March 31, 2022 because our Company has determined that the realization of the net deferred tax asset is not assured. Our Company has created a valuation allowance for the entire amount of such benefits. There is no provision for federal income taxes for the three months ended March 31, 2021 due to the availability of net operating loss carryforwards. The components for state income tax expense resulting from the limitation on the use of net operating losses are: Components for State Income Tax Expense Three Months ended March 31, 2022 2021 Current state taxes $ — $ 7,300 Deferred state taxes — — Income tax expense (benefit) $ — $ 7,300 There was no no Tax years from 2018 2021

Earnings per Share

Earnings per Share	3 Months Ended
	Mar. 31, 2022
Earnings Per Share [Abstract]
Earnings per Share	Note 6. Earnings per Share In accordance with FASB ASC 260, Earnings per Share 123,913

Major Customer and Geographic I

Major Customer and Geographic Information	3 Months Ended
	Mar. 31, 2022
Segment Reporting [Abstract]
Major Customer and Geographic Information	Note 7. 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 the Company’s total revenues were: Company's Revenues As Percentage Of Revenue Nine Months ended September 30 2021 2020 Customer A 43 % 67 % Customer B 26 % 19 % Customer C 15 % — % 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 More Than 10% March 31 December 31 2022 2021 Customer A 16 % 30 % Customer B 73 % 65 % 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: Company's Revenue by Geographic Region Three Months ended March 31 2021 2020 North America $ 123,900 $ 169,700 South America 1,600 1,500 Asia 197,900 413,500 Australia 16,000 26,700 $ 339,400 $ 611,400

Leases

Leases	3 Months Ended
	Mar. 31, 2022
Leases
Leases	Note 8. Leases Our Company conducts its operations in leased facilities under a non-cancelable operating lease expiring in 2024. 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 6.5 As of January 1, 2019 the operating lease right-of-use asset and operating lease liability amounted to $241,100 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 lease expense under operating leases for each of the three month periods ended March 31, 2022 and March 31, 2021 was $ 13,300 Maturities of lease liabilities were as follows: Maturities of Lease Liabilities Operating Leases Year ending December 31 2022 $ 41,200 2023 56,200 2024 18,900 Total lease payments 116,300 Less imputed interest (12,100 ) Total $ 104,200

Income Taxes (Tables)

Income Taxes (Tables)	3 Months Ended
	Mar. 31, 2022
Income Tax Disclosure [Abstract]
Components for State Income Tax Expense	Components for State Income Tax Expense Three Months ended March 31, 2022 2021 Current state taxes $ — $ 7,300 Deferred state taxes — — Income tax expense (benefit) $ — $ 7,300

Major Customer and Geographic_2

Major Customer and Geographic Information (Tables)	3 Months Ended
	Mar. 31, 2022
Segment Reporting [Abstract]
Company's Revenues As Percentage Of Revenue	Company's Revenues As Percentage Of Revenue Nine Months ended September 30 2021 2020 Customer A 43 % 67 % Customer B 26 % 19 % Customer C 15 % — %
Schedule of Non-affiliated Customers with Accounts Receivable More Than 10%	Schedule of Non-affiliated Customers with Accounts Receivable More Than 10% March 31 December 31 2022 2021 Customer A 16 % 30 % Customer B 73 % 65 %
Company's Revenue by Geographic Region	Company's Revenue by Geographic Region Three Months ended March 31 2021 2020 North America $ 123,900 $ 169,700 South America 1,600 1,500 Asia 197,900 413,500 Australia 16,000 26,700 $ 339,400 $ 611,400

Leases (Tables)

Leases (Tables)	3 Months Ended
	Mar. 31, 2022
Leases
Maturities of Lease Liabilities	Maturities of Lease Liabilities Operating Leases Year ending December 31 2022 $ 41,200 2023 56,200 2024 18,900 Total lease payments 116,300 Less imputed interest (12,100 ) Total $ 104,200

Stock Based Compensation (Detai

Stock Based Compensation (Details Narrative)	Mar. 31, 2022USD ($)
Compensation Related Costs [Abstract]
Unrecognized portion of expense related to stock option grants	$ 0

Line of Credit (Details Narrati

Line of Credit (Details Narrative)	3 Months Ended
	Mar. 31, 2022USD ($)
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.

Stock Warrants (Details Narrati

Stock Warrants (Details Narrative) - $ / shares	Jun. 30, 2021	Mar. 31, 2021
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Class of Warrant or Right, Outstanding	141,365
Warrant [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Share-Based Compensation Arrangement by Share-Based Payment Award, Non-Option Equity Instruments, Outstanding, Number		141,365
Class of Warrant or Right, Exercise Price of Warrants or Rights		$ 0.02

Income Taxes (Components for St

Income Taxes (Components for State Income Tax Expense) (Details) - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Income Tax Disclosure [Abstract]
Current state taxes		$ 7,300
Deferred state taxes
Income tax expense (benefit)		$ 7,300

Income Taxes (Details Narrative

Income Taxes (Details Narrative)	3 Months Ended
	Mar. 31, 2022USD ($)
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items]
Unrecognized tax benefits	$ 0
Uncertain tax positions	$ 0
Minimum [Member]
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items]
Tax years open for examination	2018
Maximum [Member]
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items]
Tax years open for examination	2021

Earnings per Share (Details Nar

Earnings per Share (Details Narrative)	3 Months Ended
	Mar. 31, 2021shares
Earnings Per Share [Abstract]
Number of incremental common shares resulting from the assumed conversion of warrants	123,913

Major Customer and Geographic_3

Major Customer and Geographic Information (Schedule of Revenues from Non-affiliated Customers) (Details) - Revenue Benchmark [Member]	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Customer A [Member]
Revenue, Major Customer [Line Items]
Risk percentage	43.00%	67.00%
Customer B [Member]
Revenue, Major Customer [Line Items]
Risk percentage	26.00%	19.00%
Customer C [Member]
Revenue, Major Customer [Line Items]
Risk percentage	15.00%

Major Customer and Geographic_4

Major Customer and Geographic Information (Schedule of Non-affiliated Customers with Accounts Receivable) (Details) - Accounts Receivable [Member]	3 Months Ended	12 Months Ended
	Mar. 31, 2022	Dec. 31, 2020
Customer A [Member]
Revenue, Major Customer [Line Items]
Risk percentage	16.00%	30.00%
Customer B [Member]
Revenue, Major Customer [Line Items]
Risk percentage	73.00%	65.00%

Major Customer and Geographic_5

Major Customer and Geographic Information (Schedule of Revenue by Geographic Region) (Details) - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	$ 339,400	$ 611,400
North America [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	123,900	169,700
South America [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	1,600	1,500
Asia [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	197,900	413,500
AUSTRALIA
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	$ 16,000	$ 26,700

Leases (Maturities of Lease Lia

Leases (Maturities of Lease Liabilities) (Details) - USD ($)	Mar. 31, 2022	Jan. 01, 2019
Leases
2022	$ 41,200
2023	56,200
2024	18,900
Total lease payments	116,300
Less imputed interest	(12,100)
Total	$ 104,200	$ 241,100

Leases (Details Narrative)

Leases (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2022	Dec. 31, 2021	Jan. 01, 2019
Leases
Incremental borrowing rate				6.50%
Operating lease right-of-use asset		$ 104,200	$ 115,800	$ 241,100
Operating lease liability		$ 104,200		$ 241,100
Operating Lease, Expense	$ 13,300