NOCOPI TECHNOLOGIES INC/MD/ SEC 10-Q Report

Nocopi Technologies Inc., a company specializing in anti-counterfeiting technologies and entertainment products, has released its Form 10-Q report for the first quarter of 2025. The report highlights significant improvements in financial performance and outlines key operational strategies and challenges faced by the company.

Financial Highlights

Total Revenues: $479,000, an increase of $80,700 or approximately 20% compared to the first quarter of 2024, driven by higher licenses, royalties, and fees.

Gross Profit: $273,700, representing approximately 57% of total revenues, up from $165,600 or approximately 42% of total revenues in the first quarter of 2024, due to an increase in licenses and royalties.

Net Loss from Operations: $(85,800), a significant improvement from a net loss of $(1,159,600) in the first quarter of 2024, primarily due to lower operating expenses.

Net Income: $25,500, compared to a net loss of $(1,028,200) in the first quarter of 2024, resulting from higher revenue and reduced operating expenses.

Net Income (Loss) Per Common Share: $0.002, compared to $(0.10) in the first quarter of 2024, reflecting improved profitability.

Business Highlights

Revenue Segments: The company's revenue is primarily derived from licenses, royalties, and fees, as well as product and other sales. Licenses, royalties, and fees increased significantly due to the renewal of an existing license, which resulted in the recognition of future minimum guaranteed royalty payments.

Geographical Performance: For the three months ended March 31, 2025, 39% of the company's net sales were generated in North America, while 61% were generated internationally. This marks a shift from the previous year, where 20% of sales were from North America and 80% were international.

Major Customers: The company had three major customers accounting for 84% of revenue and 88% of net accounts receivable for the three months ended March 31, 2025. This concentration highlights the company's reliance on a few key customers.

Operational Strategy: The company plans to focus on expanding its presence in the entertainment and toy products market by leveraging existing relationships with key licensees. These licensees are expected to expand their product offerings that incorporate the company's technologies.

Future Outlook: The company is actively seeking acquisition opportunities to expand its product and service offerings. It plans to fund business expansion through various means, including the issuance of debt or equity securities.

Operational Challenges: The company acknowledges potential challenges due to uncertain economic conditions, geopolitical instability, and supply chain disruptions, which may impact future revenues and operations.

Cost Management: The company has achieved significant reductions in overhead expenses, which decreased to $359,500 in the first quarter of 2025 from $1,325,200 in the first quarter of 2024, contributing to improved operational efficiency.

SEC Filing: NOCOPI TECHNOLOGIES INC/MD/ [ NNUP ] - 10-Q - May. 13, 2025