KING OF PRUSSIA, Pa., March 31, 2020 (GLOBE NEWSWIRE) -- Nocopi Technologies, Inc. (OTC Pink: NNUP), a developer of specialty reactive inks used in entertainment, toy and educational products as well as document and product authentication technologies to combat fraud, today announced results for its fourth quarter and year ended December 31, 2019.

Income StatementQ4'19Q3'19Q2'19Q1'19Q4'18
Net Income$313,800$206,800$148,900$85,400$111,000
Weighted Ave. Shares61M60M59M59M59M
Balance SheetQ4'19Q3'19Q2'19Q1'19Q4'18
Total Current Assets$2,303,200$1,874,600$1,562,400$1,369,600$1,156,900
Working Capital$1,835,300$1,454,600$1,132,800$893,500$810,500
Book Value$2,789,700$2,450,500$2,201,000$2,052,100$1,966,700
Book Value Per Share$0.046$0.041$0.037$0.035$0.033

Q4 Results
Q4’19 revenue rose 102% to $974,400 reflecting a 208% increase in product and other sales, principally specialty inks, to $752,500, offset by a 6% decline in licenses, royalties and fees to $221,900. The decrease in licenses, royalties and fees principally reflected a $100,000 reduction in guaranteed licensing revenue related to a four-year license extension with Nocopi’s largest customer, the present value of which was recorded as revenue of $1,521,700 in Q2’18. Pursuant to the license extension, Nocopi is entitled to receive minimum quarterly cash payments of $100,000 over the next four years, starting in Q3’19. Because these payments have already been recorded as revenue, they will not be reflected in the company’s income statement.

The increase in Q4’19 product and other sales was due primarily to higher ink shipments for existing licensees in the entertainment and toy product market, as well as a modest increase in sales of security inks used for cash register receipts within the document fraud market.

Gross profit increased to $611,200 in Q4’19, or approximately 63% of revenues, from $327,800 in Q4’18, or approximately 68% of revenues. The gross margin decrease principally reflects higher product and other sales, as a percentage of revenue, which typically carry lower gross profit margins, compared to licenses, royalties and fees. Q4’19 gross margin from licenses, royalties and fees was approximately 68% versus 87% in Q4’18, principally due to lower revenues and an increase in direct costs allocated to Q4’19 revenues. Q4’19 gross margin from product and other sales increased to 61% versus 50% in Q4’18, principally reflecting production efficiencies achieved on higher volume.

Q4’19 sales and marketing expenses increased to $105,700 versus $74,100 in Q4’18, principally due to higher commissions on higher revenues. General and administrative expenses increased to $128,700 in Q4’19 from $91,800 in Q4’18, due primarily to higher employment and public company expenses.

Net income improved to $313,800 in Q4’19 vs. Q4’18 net income of $111,000, principally reflecting higher revenue and gross profit.

2019 Results
Nocopi reported 2019 revenue of $2,537,400 compared to $3,341,700 in 2018, which included revenue of $1,521,700 reflecting the present value of guaranteed minimum royalty payments under a four-year license extension with the Company’s largest licensee. Excluding the year-ago benefit from the license extension, Nocopi’s 2019 revenue would have increased 39% over adjusted 2018 revenue of $1,820,000.

Nocopi Chairman and CEO Michael Feinstein commented, “With $688,000 in cash and working capital of $1.8 million, Nocopi exited 2019 on an extremely sound financial footing to navigate business disruptions being caused by the Coronavirus pandemic and its potential impact on the production and distribution of customer products utilizing our proprietary inks and technologies. The majority of our revenue is derived from products that are printed abroad, principally in China, using inks that we ship from the U.S. As a result of this supply chain, our business activity may be affected if our licensees and their printers experience extended disruptions. Though we did experience a six- or seven-week disruption during the first quarter of 2020, printing activity and demand for our inks has already rebounded to normal levels.

“Given the unique attributes of our proprietary inks and technology, we are confident that our market opportunity will return to a pattern of growth as the Coronavirus situation subsides. During 2019 we expanded our ink production capacity by roughly 100% at our headquarters facility outside Philadelphia, putting us in a solid position to support growing demand.”

Dr. Feinstein added, “The unique attributes of Nocopi reactive inks have applications across a broad range of consumer products and product security and document authentication solutions, and we continue to develop and test new technologies and use cases. We have rebuilt the business over the past few years, putting Nocopi on a solid financial foundation. While we do anticipate revenue challenges over the next few quarters as a result of the virus impact, we are confident in the financial strength of our major customers and the proven demand for our products which we expect, if effected, will return as the pandemic subsides.”

About Nocopi Technologies (
Nocopi develops and markets specialty reactive inks for unique, mess-free applications in the entertainment, toy and educational product markets. Nocopi also develops and markets document and product authentication technologies designed to combat fraudulent document reproduction, product counterfeiting and/or unauthorized product diversion. Nocopi derives revenue from technology licensing agreements as well as from the sale of its proprietary inks and other products to licensees and/or their licensed printers. Nocopi’s products and systems include trade secrets as well as patented technologies.

Safe Harbor for Forward-Looking Statements
This release may contain projections and other "forward-looking statements" relating to Nocopi’s business, that are often identified by the use of "believes," "expects" or 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, etc. 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 outlined in Nocopi’s Form 10-K, 10-Q and other SEC reports available at Forward-looking statements are made as of the date of this news release; Nocopi assumes no obligation to update these statements.

Twitter – Investors: @NNUP_IR

Investor & Media Contacts
William Jones, David Collins or Chris Eddy
Catalyst IR
212-924-9800 or

Nocopi Technologies, Inc.
Statements of Operations

  Three Months ended
December 31,
  Year ended
December 31,
  2019  2018  2019  2018 
Present value of guaranteed royalty payments over 4 years from amended/expanded licensing agreement with a major customer (a) $  n/a  $  n/a  $  n/a  $ 1,521,700 
Licenses, royalties and fees  221,900   236,800   793,800    720,800 
Total licenses, royalties and fees  221,900   236,800   793,800    2,242,500 
Product and other sales  752,500   244,400   1,743,600    1,099,200 
   974,400   481,200   2,537,400    3,341,700 
Cost of revenues                
Licenses, royalties and fees  41,400   35,100   98,200    84,300 
Product and other sales  166,600   137,900   380,300    323,500 
   363,200   153,400   841,700    561,200 
Gross profit  611,200   327,800   1,695,700    2,780,500 
Operating expenses                
Research and development  43,000   41,900   165,600    153,200 
Sales and marketing  105,700   74,100   329,900    387,300 
General and administrative  128,700   91,800   393,900    369,400 
   277,400   207,800   889,400    900,900 
Net income from operations  333,800   120,000   806,300    1,870,600 
Interest and bank charges  1,700   (2,500)  900    (9,400)
Net income before income taxes  335,500   117,500   807,200    1,861,200 
Income taxes  21,700   6,500   52,300    205,800 
Net income $313,800  $111,000  $754,900  $ 1,655,400 
Basic and diluted net income per common share $0.01  $0.00  $0.01  $ 0.03 
Weighted average common shares outstanding                
Basic  59,614,698   58,616,716   58,949,377    58,616,716 
Diluted  59,990,371   59,012,626   59,322,141    58,980,420 

(a) License extension was executed in Q2'18 and commenced in July 2019. Nocopi is entitled to quarterly cash payments of $100,000 over four years, starting in Q3'19.

Nocopi Technologies, Inc.
Balance Sheets

  December 31,  December 31,  
  2019  2018  
  (unaudited)  (audited)  
Current assets       
Cash $688,000  $400,800  
Accounts receivable less $5,000 allowance for doubtful accounts  1,352,300   579,000  
Inventory  127,900   133,500  
Prepaid and other  135,000   43,600  
Total current assets  2,303,200   1,156,900  
Fixed assets         
Leasehold improvements  24,200   19,700  
Furniture, fixtures and equipment  252,500   185,400  
   276,700   205,100  
Less: accumulated depreciation and amortization  206,600   197,600  
   70,100   7,500  
Other assets 
  Long-term receivables
  957,000   1,352,200  
  Operating lease right of use – building  202,000     
   1,159,000   1,352,200  
Total assets $3,532,300  $2,516,600  
Liabilities and Stockholders' Equity  
Current liabilities         
Convertible debentures $97,900  $128,300  
Accounts payable  44,300   16,500  
Accrued expenses  231,600   163,000  
Income taxes  52,400   38,600  
Operating lease liability, current  41,700     
Total current liabilities  467,900   346,400  
Other liabilities         
Accrued expenses, non-current  67,000   94,700  
Deferred income taxes  47,400   108,800  
Operating lease liability, non-current  160,300     
   274,700   203,500  
Stockholders' equity         
Common stock, $0.01 par value         
Authorized – 75,000,000 shares         
Issued and outstanding
2019 – 60,324,698 shares; 2018 – 58,616,716 shares
  610,400   586,200  
Paid-in capital  12,483,900   12,440,000  
Accumulated deficit  (10,304,600)  (11,059,500) 
Total stockholders' equity  2,789,700   1,966,700  
Total liabilities and stockholders' equity $3,532,300  $2,516,600  

Nocopi Technologies, Inc.
Statements of Cash Flows

  Year ended
December 31,
  2019  2018 
Operating Activities      
Net income $754,900  $1,655,400 
Adjustments to reconcile net income to net cash provided by (used in) operating activities        
Depreciation and amortization  10,800   7,100 
Deferred income taxes  (61,400  108,800 
Issuance of common stock for services  25,400   -- 
Non-current assets and liabilities   - net  367,500   -- 
Cumulative effect of accounting change  --   96,100 
   1,097,200   1,867,400 
Change in in assets        
Accounts receivable  (773,300)  (286,900
Inventory  5,600   (22,900)
Prepaid and other  (91,400)  (8,300)
Change in liabilities        
Accounts payable and accrued expenses  108,700   (190,100)
Income taxes   13,800   38,600 
Deferred revenue  --   (99,400)
   (736,600)  (569,000)
Net cash provided by (used in) operating activities  360,600   1,298,400 
Investment Activities        
Additions to fixed assets  73,400   500 
Long-term receivables  --   1,352,200 
   73,400   1,352,700 
Financing Activities        
Non-current commission      94,700 
Increase (decrease) in cash  287,200   40,400 
Cash at beginning of year  400,800   360,400 
Cash at end of period $688,000  $400,800 
Supplemental Disclosure of Non-Cash Investing and Financing Activities        
Operating lease right of use – building $241,100  $ 
Operating lease liability $(241,100) $ 
Accumulated depreciation and amortization $1,800  $ 
Furniture, fixtures and equipment $(1,800) $ 
Convertible debentures $30,400  $ 
Accrued expenses $12,300  $ 
Common stock $(17,100) $ 
Paid-in capital $(25,600) $