Nocopi Technologies Reports Third Quarter Financial Results
KING OF PRUSSIA, Pa., Nov. 14, 2023 (GLOBE NEWSWIRE) — Nocopi Technologies, Inc. (OTC: NNUP), a developer of specialty reactive inks today announced results for its third quarter ended September 30, 2023. Nocopi’s SEC filings are available here.
2023 Q3 Results
2023 Q3 reported revenue was $575,100, down 16.2% compared to revenue of $685,900 in 2022 Q3, which included $241,000 of associated royalty revenue from a renewal license agreement. Excluding this renewal license agreement revenue in 2022 Q3, 2023 Q3 reported revenue would have been up 29% from 2022 Q2. The overall decrease in revenue compared to 2022 Q3 was largely the result of lower license and royalty revenue this quarter but was partially offset by an 84.7% increase in product and other sales in the quarter totaling $438,200 compared to $237,300 last year in 2022 Q3. The increase in product and other sales was the result of increased demand from third party authorized printers used by two of our major licensees in the entertainment and toy products markets.
Gross profit decreased to $265,100 in the quarter from $493,500 during 2022 Q3. For the third quarter, gross profit margin came in at 46.1% on a blended basis, which decreased from 2022 Q3 gross profit margin of 71.9%, principally due to a smaller dollar contribution from license and royalty, combined with a lower gross margin in product sales resulting from the continued elevation in raw materials prices.
2023 Q3 operating expenses increased to $944,800 from $293,000 in 2022 Q3, reflecting an approximate $651,800 increase. The elevated expenses are largely caused by two factors. First, we continued to invest in our corporate infrastructure as we prepare the company for growth and expansion. Second, we incurred significant costs associated with the retirements and severances of both our former chief financial officer and chief executive officer.
Pretax loss for the quarter was $613,900 compared to a gain of $206,500 during 2022 Q3. Net loss for the quarter came in at $453,300, compared to net income of $206,500 in 2022 Q3.
Net cashflow from operations during the nine months ended September 30, 2023 was $167,200, which was higher on a year-over-year basis by $157,400 when compared to cashflow from operations of $9,800 for the same period of 2022.
Cash used in investing activities for the first nine months ended September 30, 2023 was $28,500 compared to $800 in the first nine months ended September 30, 2022. Cash balance in 2023 Q3 quarter-end increased $5,138,700 to $10,476,500.
Completed $5M Equity Offering During the Quarter
During 2023 Q3, Nocopi completed a private placement of 1.25 million shares of common stock for gross proceeds of $5 million, or a purchase price of $4.00 per share on September 11, 2023. In connection with this transaction, Nocopi did not incur any placement fees or commissions or issue any warrants. The net proceeds from the private placement are for working capital and general corporate purposes.
Chairman and CEO Remarks
“From a balance sheet perspective, Nocopi is strongly positioned with excess cash and no debt to pursue a new growth platform. We have been actively evaluating opportunities for potential fit with our core strategy of increasing per share value for all Nocopi shareholders. Our recent equity offering completed in September further supports us entering the next chapter of our growth strategy and signifies the strong backing we have received from investors,” said Chairman and CEO Michael S. Liebowitz.
“Operationally, we experienced steadily growing product sales in Q3, which has been part of a broader trend this year and should eventually translate into growing royalty revenue over the several upcoming quarters. Our team has been working on developing new business with new customers across the globe while we remain disciplined on our cost levels.”
About Nocopi Technologies (www.nocopi.com)
Nocopi Technologies, headquartered in King of Prussia, PA develops and markets specialty reactive inks and licenses these technologies. Nocopi’s ink technologies are backed by proprietary and patented technology. Our inks are marketed for use across a variety of end markets.
Safe Harbor for Forward-Looking Statements
The information posted in this release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. You can identify these statements by use of the words “may,” “will,” “should,” “plans,” “explores,” “expects,” “anticipates,” “continue,” “estimate,” “project,” “intend,” and similar expressions. Forward-looking statements involve a number of estimates, assumptions, risks and uncertainties that may cause actual results to differ materially from those anticipated. Forward-looking statements may address uncertainties regarding customer preferences or demand for products incorporating Nocopi technology that underlie the company’s revenue expectations, the company’s ability to develop new products and new product applications, the financial condition of customers and the timeliness of their payments, the impact of fluctuations in currencies, global trade and shipping markets, other risks to which the company is subject; other factors beyond the company’s control. Actual results could differ from those projected due to numerous factors and uncertainties, and Nocopi can give no assurance that such statements will prove to be correct nor that Nocopi’s actual results of operations, financial condition and performance will not differ materially from those reflected or implied by its forward-looking statements. Investors should refer to the risk factors described by Nocopi in Item 1.A “Risk Factors” in its most recent Form 10-K and other SEC reports available at www.sec.gov/edgar. Forward-looking statements are made as of the date of this news release; Nocopi assumes no obligation to update these statements.
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