-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Ach3ZpXx7wbNFA7wp3lvY8OVNYhls0H4Xuk7HRwWqbVxdmEhdCdPTKjApH/zvQ50 qntUTxfc3NylU8aBYcsNWw== 0000950115-97-001314.txt : 19970820 0000950115-97-001314.hdr.sgml : 19970820 ACCESSION NUMBER: 0000950115-97-001314 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970819 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: NOCOPI TECHNOLOGIES INC/MD/ CENTRAL INDEX KEY: 0000888981 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-SERVICES, NEC [8900] IRS NUMBER: 870406496 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-20333 FILM NUMBER: 97666392 BUSINESS ADDRESS: STREET 1: 230 SUGARTOWN RD STREET 2: STE 100 CITY: WAYNE STATE: PA ZIP: 19087 BUSINESS PHONE: 6106872000 MAIL ADDRESS: STREET 1: NOCOPI TECHNOLOGIES INC STREET 2: 230 SUGARTOWN RD STE 100 CITY: WAYNE STATE: PA ZIP: 19087 10-Q 1 QUARTERLY REPORT SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q Quarterly Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934 For Quarter Ended June 30, 1997 Commission File No. 0-20333 NOCOPI TECHNOLOGIES, INC. ----------------------------------------------------- (Exact name of registrant as specified in its charter) MARYLAND 87-0406496 - ------------------------------- ------------------- (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 230 Sugartown Road, Suite 100, Wayne, PA 19087 ---------------------------------------------- (Address of principal executive offices) Registrant's telephone number, including area code: 610-687-2000 Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES X NO --- --- Number of shares of common stock outstanding: Shares outstanding Title of each class at August 1, 1997 - ----------------------- ------------------ Common stock, par value 14,080,654 $.01 per share NOCOPI TECHNOLOGIES, INC. INDEX Part 1. FINANCIAL INFORMATION Item 1. Financial Statements PAGE Statements of Operations Three Months and Six Months Ended June 30, 1997 and June 30, 1996 1 Balance Sheets June 30, 1997 and December 31, 1996 2 Statements of Cash Flows Six Months Ended June 30, 1997 and June 30, 1996 3 Notes to Financial Statements 4 - 5 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 6 - 10 Part II. OTHER INFORMATION 11 - 12 Signatures 13 PART I - FINANCIAL INFORMATION Item 1. Financial Statements Nocopi Technologies, Inc. Statements of Operations (unaudited)
Three Months ended June 30 Six Months ended June 30 1997 1996 1997 1996 ------------ ------------ ------------ ------------ Revenues Licenses, royalties and fees .................. $ 479,700 $ 778,400 $ 1,283,300 $ 1,611,000 Product and other sales ....................... 753,000 157,800 782,300 200,700 ------------ ------------ ------------ ------------ 1,232,700 936,200 2,065,600 1,811,700 Cost of sales Licenses, royalties and fees .................. 217,000 140,700 420,600 271,700 Product and other sales ....................... 745,000 121,600 771,600 160,800 ------------ ------------ ------------ ------------ 962,000 262,300 1,192,200 432,500 ------------ ------------ ------------ ------------ Gross profit ................................. 270,700 673,900 873,400 1,379,200 Operating expenses Research and development ...................... 121,900 191,700 342,000 396,700 Sales and marketing ........................... 145,500 351,500 480,600 723,400 General and administrative .................... 264,200 281,700 519,400 521,300 ------------ ------------ ------------ ------------ 531,600 824,900 1,342,000 1,641,400 ------------ ------------ ------------ ------------ Loss from operations ......................... (260,900) (151,000) (468,600) (262,200) Other income (expenses) Amortization .................................. (6,400) (6,400) (12,700) (12,700) Interest income ............................... 6,700 28,000 21,100 65,100 Interest and bank charges ..................... (17,800) (17,300) (35,800) (34,800) Ownership interest of others in loss of consolidated entity .................. 112,100 95,800 199,200 ------------ ------------ ------------ ------------ (17,500) 116,400 68,400 216,800 ------------ ------------ ------------ ------------ Net loss ..................................... ($ 278,400) ($ 34,600) ($ 400,200) ($ 45,400) ============ ============ ============ ============ Loss per common share .......................... ($.02) ($.00) ($.03) ($.00) Average common shares outstanding .............. 14,080,654 14,064,951 14,080,654 14,054,558
See notes to financial statements. 1 Nocopi Technologies, Inc. Balance Sheets (unaudited)
June 30 December 31 1997 1996 ----------- ----------- Assets Current assets Cash and cash equivalents ..................................................... $ 250,000 $ 2,229,200 Accounts receivable less allowance ............................................ 995,100 513,400 Inventory ..................................................................... 3,600 5,100 Prepaid and other ............................................................. 46,200 105,300 ----------- ----------- Total current assets ......................................................... 1,294,900 2,853,000 Fixed assets Leasehold improvements ........................................................ 45,600 43,200 Furniture, fixtures and equipment ............................................. 414,200 435,000 ----------- ----------- 459,800 478,200 Less: accumulated depreciation ................................................ 326,200 296,600 ----------- ----------- 133,600 181,600 Other assets Patents, net of accumulated amortization ...................................... 473,500 452,000 Debt issue costs, net of accumulated amortization ............................. 18,900 31,600 Other ......................................................................... 12,500 14,300 ----------- ----------- 504,900 497,900 ----------- ----------- Total assets ................................................................ $ 1,933,400 $ 3,532,500 =========== =========== Liabilities and Shareholders' Equity (Deficit) Current liabilities Current debt obligations ...................................................... $ 950,000 Accounts payable .............................................................. 758,600 $ 539,800 Accrued expenses .............................................................. 106,000 139,900 Accrued commissions ........................................................... 123,300 118,100 Deferred revenue .............................................................. 110,200 164,200 ----------- ----------- Total current liabilities .................................................... 2,048,100 962,000 Long-term notes payable ........................................................ 950,000 Accumulated share of loss of deconsolidated affiliate in excess of cost ............................................................. 170,400 Ownership interest of others in consolidated entity ............................ 1,448,300 Shareholders' equity (deficit) Common stock, $.01 par value Authorized - 50,000,000 shares Issued and outstanding 14,080,654 shares ........................................................... 140,800 140,800 Paid-in capital ............................................................... 7,651,000 7,651,000 Currency translation adjustment ............................................... 57,100 Accumulated deficit ........................................................... (8,076,900) (7,676,700) ----------- ----------- (285,100) 172,200 ----------- ----------- Total liabilities and shareholders' equity (deficit) ........................ $ 1,933,400 $ 3,532,500 =========== ===========
See notes to financial statements. 2 Nocopi Technologies, Inc. Statements of Cash Flows (unaudited)
Six Months ended June 30 1997 1996 ----------- ----------- Operating Activities Net loss .............................................................. ($ 400,200) ($ 45,400) Adjustments to reconcile net loss to cash from operating activities Depreciation ......................................................... 45,700 42,900 Amortization ......................................................... 41,400 39,000 Allowance for doubtful accounts ...................................... 12,000 7,400 Ownership interest of others in loss of consolidated entity ......................................... (95,800) (199,200) ----------- ----------- (396,900) (155,300) Changes in working capital Accounts receivable ................................................... (685,400) 69,600 Inventory ............................................................. 1,500 (6,600) Prepaid and other ..................................................... 20,200 (5,900) Accounts payable and accrued expenses ................................. 627,300 (78,600) Deferred revenue ...................................................... 29,500 95,700 ----------- ----------- (6,900) 74,200 ----------- ----------- Cash used by operating activities .................................... (403,800) (81,100) Investing Activities Additions to fixed assets ............................................. (6,800) (37,500) Additions to patents .................................................. (48,400) (24,000) Deconsolidation of affiliate .......................................... (1,419,100) ----------- ----------- Cash used by investing activities .................................... (1,474,300) (61,500) Financing Activities Exercise of stock options ............................................. 128,500 ----------- ----------- Cash provided by financing activities ................................ 128,500 Effect of exchange rate changes on cash ................................ (101,100) (98,000) ----------- ----------- Decrease in cash and cash equivalents ................................ (1,979,200) (112,100) Cash and cash equivalents - beginning of period ........................ 2,229,200 2,982,100 ----------- ----------- Cash and cash equivalents - end of period .............................. $ 250,000 $ 2,870,000 =========== ===========
See notes to financial statements. 3 NOCOPI TECHNOLOGIES, INC. NOTES TO FINANCIAL STATEMENTS (UNAUDITED) Note 1. Financial Statements The accompanying interim financial statements have been prepared by the Company without audit. 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, except as described in Note 2, using the accounting policies described in the summary of Accounting Policies included in the Company's 1996 Annual Report. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. The Notes to Financial Statements included in the 1996 Annual Report should be read in conjunction with the accompanying interim financial statements. The interim operating results are not necessarily indicative of the operating results expected for the full year. Note 2. Basis of Presentation Prior to April 1, 1997, the financial statements included the accounts of the Company and Euro-Nocopi S.A. (Euro), the European affiliate of the Company on a consolidated basis. Consolidation was appropriate due to the operational and financial control the Company exercised over Euro. Additionally, the Company held approximately an 18% interest in Euro and warrants permitting it to increase its interest in Euro to 55%. During the second quarter of 1997, the Company ceased to exercise effective control over Euro. The cessation of effective control resulted from a dispute which arose in April 1997 between the Company and Euro under the license agreement between the Company and Euro concerning Euro's contention that it was entitled to a share of certain minimum royalties under a worldwide agreement with a manufacturer who distributes products incorporating the Company's technologies. In an agreement negotiated during the second quarter of 1997 and concluded in July 1997, the Company agreed to credit Euro $154,500 as Euro's share of previously collected minimum royalties, the $154,500 to be applied to license fee payments due the Company by Euro through the first quarter of 1998. The Company also agreed to pay Euro 35% of future guaranteed royalties from this manufacturer. 4 The $154,500 settlement has been charged to cost of sales and has been included in the results of operations. The Company also agreed to modify its warrant by extending its term through December 2001 but making it exercisable beginning the earlier of 1) January 1, 2001; 2) in the event of a sale of all or part of Euro; or 3) in the event of a public listing of Euro's shares on a stockmarket. In addition, the Company agreed to defer to January 1, 2001 its right to acquire, under certain conditions, all remaining shares of Euro for shares of the Company. This call right expires December 31, 2001. Additionally, the licensing agreement between the two companies was amended relative to the negotiation of future worldwide licensing contracts and the five directors of Euro who were also Nocopi directors resigned from Euro's Board. As the Company ceased to exercise effective control and the financial information for Euro's second quarter was not made available to the Company, the Company ceased consolidating as of April 1, 1997 and did not apply the equity method of accounting for the threee months ended June 30, 1997. The Company's 18% share of Euro's accumulated loss from inception through March 1997 in excess of the Company's investment, totaling $170,400, has been recorded as a deferred credit on the balance sheet. Note 3. Recently Issued Accounting Standards In March 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards (SFAS) No. 128 "Earnings per share." This Statement establishes standards for computing and presenting earnings per share (EPS) and applies to entities with publicly held common stock or potential common stock. This Statement is effective for financial statements issued for periods ending after December 15, 1997 (earlier application is not permitted). This Statement requires restatement of all prior-period EPS data presented. The Company is currently evaluating the impact, if any, adoption of SFAS No. 128 will have on its financial statements. 5 Item 2. NOCOPI TECHNOLOGIES, INC. Management's Discussion and Analysis of Financial Condition and Results of Operations Basis of Presentation Prior to April 1, 1997, the financial statements included the accounts of the Company and Euro-Nocopi S.A. (Euro), the European affiliate of the Company, on a consolidated basis. Consolidation was appropriate due to the operational and financial control the Company exercised over Euro. Additionally, the Company held approximately an 18% interest in Euro and warrants permitting it to increase its interest in Euro to 55%. During the second quarter of 1997, the Company ceased to exercise effective control over Euro. The cessation of effective control resulted from a dispute which arose in April 1997 between the Company and Euro under the license agreement between the Company and Euro concerning Euro's contention that it was entitled to a share of certain minimum royalties under a worldwide agreement with a manufacturer who distributes products incorporating the Company's technologies. In an agreement negotiated during the second quarter of 1997 and concluded in July 1997, the Company agreed to credit Euro $154,500 as Euro's share of previously collected minimum royalties, the $154,500 to be applied to license fee payments due the Company by Euro through the first quarter of 1998. The Company also agreed to pay Euro 35% of future guaranteed royalties from this manufacturer. The $154,500 settlement has been charged to cost of sales and has been included in the results of operations. The Company also agreed to modify its warrant by extending its term through December 2001 but making it exercisable beginning the earlier of 1) January 1, 2001; 2) in the event of a sale of all or part of Euro; 3) in the event of a public listing of Euro's shares on a stock market. In addition, the Company agreed to defer to January 1, 2001 its right to acquire, under certain conditions, all remaining shares of Euro for shares of the Company. This call right expires December 31, 2001. Additionally, the licensing agreement between the two companies was amended relative to the negotiation of future worldwide licensing contracts and the five directors of Euro who were also Nocopi directors resigned from Euro's Board. As the Company ceased to exercise effective control and the financial information for Euro's second quarter was not made available to the Company, the Company ceased consolidating as of April 1, 1997 and did not apply the equity method of accounting for the three months ended June 30, 1997. The Company's 18% share of Euro's accumulated loss from inception through March 1997 in excess of the Company's investment, totaling $170,400, has been recorded as a deferred credit on the balance sheet. 6 The results of operations for the second quarter of 1997 do not include Euro's results of operations for that period. Consequently, the revenues and expenses reported will differ significantly from those reported in the second quarter and first half of 1996. Results of Operations Revenues for the second quarter of 1997 were $1,232,700 compared to $936,200 in the second quarter of 1996, an increase of 31%. The increase is attributable primarily to higher sales of security labels to 3M Corporation in the second quarter of 1997 compared to the second quarter of 1996 as well as the sale of ink jet based anti-diversion hardware systems to a new customer in the second quarter of 1997 partially offset by a decline in licenses, royalties and fees. The decline in licenses, royalties and fees to $479,700 in the second quarter of 1997 from $778,400 in the second quarter of 1996 is attributable in part to the change in accounting for Euro whose revenues are not consolidated in the second quarter of 1997. In addition, domestic licenses, royalties and fees declined by approximately $200,000 in the second quarter of 1997 compared to the second quarter of 1996 due primarily to lower guaranteed license fees from 3M Corporation and Georgia-Pacific Corporation compared to the second quarter of 1996. Revenues for the first half of 1997 increased 14% to $2,065,600 in the first half of 1997 compared to $1,811,700 in the first half of 1996. The increase is attributable to the same factors as the quarter-to-quarter change, that is, increased sales of products, primarily security labels, offset in part by the exclusion of Euro's second quarter revenues from the statement of operations as well as an approximate $340,000 reduction in domestic licenses, royalties and fees principally attributable to lower guaranteed license fees from 3M and Georgia-Pacific. The Company's gross profit declined to $270,700 or 22% of revenues in the second quarter of 1997 from $673,900 or 72% of revenues in the second quarter of 1996. The decline in the second quarter of 1997, both in absolute dollars and as a percentage of sales, is attributable to a change in revenue mix compared to the second quarter of 1996. Included in 1997's second quarter revenues are sales of security labels to 3M and an ink-jet based anti-diversion system. These product sales carry significantly lower gross margins than revenues derived from licenses, royalties and fees. The gross margin was also negatively affected by lower license, royalty and fee revenue in the quarter. Additionally, as agreed in the amended license arrangement with Euro, the Company recorded a one-time charge to cost of sales totaling $154,500. The first half of 1997 gross profit declined to $873,400 or 42% of revenues from $1,379,200, or 76% of revenues in the first half of 1996. The decline in gross revenues in the first half of 1997 compared to the first half of 1996 results from the same factors as those affecting the second quarter. 7 Research and development expenses declined to $121,900 for the second quarter of 1997 compared to $191,700 in the second quarter of 1996 and to $342,000 in the first half of 1997 versus $396,700 in the first half of 1996. The second quarter and first half period to period decline results from the exclusion of Euro's second quarter 1997 costs from the statement of operations. Selling expenses declined to $145,500 in the second quarter of 1996 from $351,500 in the second quarter of 1996. For the first six months of 1997, selling expenses were $480,600 compared to $723,400 in the first half of 1996. The effect of the deconsolidation of Euro in the second quarter of 1997 was most profound in selling expenses. Euro's selling expenses in the second quarter and first half of 1996 were $131,300 and $274,600, respectively. Additionally, the Company's second quarter and first half selling expenses declined substantially as a result of fewer sales personnel, lower commissions and lower discretionary sales promotion expenses as the Company sought to conserve cash. General and administrative expenses declined to $264,200 in the second quarter of 1997 from $281,700 in the second quarter of 1996. The first half 1997 general and administrative expenses were $519,400 compared to $521,300 in the first half of 1996. The period to period declines resulted from the exclusion of the general and administrative expenses associated with Euro in the second quarter of 1997 which are not consolidated effective with the second quarter of 1997, offset in part by higher legal and other professional expenses, costs associated with the Company's international patent activities and, in the second quarter of 1997, legal expenses incurred in the Company's restructuring of its ownership and license arrangements with Euro. Other income (expenses) include interest on the Series B 7% Subordinated Convertible Promissory Notes issued in May 1993 and amortization of debt issue costs related to the Notes. Interest income includes interest on funds invested in the U.S. as well as the investment of funds held by Euro during the periods that its accounts were included in the Company's financial statements. Ownership interest of others in loss of consolidated entity represents the proportionate share in the loss of Euro attributable to the 82% ownership interest of the outside shareholders of that company. The net loss increased in the second quarter of 1997 to $278,400 from $34,600 in the second quarter of 1996. For the first six months of 1997, the net loss was $400,200 compared to $45,400 in the first six months of 1996. Liquidity and Capital Resources The Company's cash and cash equivalents decreased to $250,000 at June 30, 1997. The Company's consolidated cash and cash equivalent position at December 31, 1996 was $2,229,200 of which $1,641,200 was held by Euro and $588,000 8 was held by the Company. The amount held by Euro was available primarily to fund Euro's operations. As a result of the circumstances requiring that the financial statements of the Company no longer be consolidated with those of Euro, the cash position declined by the $1,641,200 held by Euro-Nocopi at December 31, 1996. The Company's domestic cash position declined to $250,000 at June 30, 1997 from $588,000 at December 31, 1996. The cash was required primarily to fund operations over the six month period. Current debt obligations represent the reclassification of the Company's $950,000 Series B 7% Subordinated Convertible Promissory Notes due March 31, 1998 into current liabilities. The Company has a line of credit with a bank for up to $1 million secured by a pledge of certain securities, including equity securities, made by certain directors of the Company. Borrowings under the line of credit may be limited based on the value of the equity securities pledged. There have been no borrowings under this line of credit. In June 1997, the Company was notified by the bank of its decision that requests for advances against the line would be considered only after consultation with the pledgors of the collateral. There can be no assurance that requests for borrowings under the line will be honored by the bank after its consultations with the pledgors of the assets, but, based on the current market value of the collateral, the Company believes that the bank would make no more than $600,000 available under the line. Without access to the full $1 million line of credit, the Company will not have sufficient working capital to support its operations and debt service requirements, specifically the maturing of the $950,000 Series B Notes on March 31, 1998. The Company is seeking financing which will allow it to replace the line of credit with funding at least equal to the $1 million provided by the line. There can be no assurances that the Company will be successful in arranging such financing. In addition, the Company's continued liquidity will be dependent on its ability to refinance the $950,000 aggregate principle amount of the Series B Notes maturing March 31, 1998 by extending the maturity of the Notes or converting the principle balance thereof into equity. The Company has not secured any commitment from any party providing for the extension of such Notes or their conversion into equity. There can be no assurances that such extension or conversion will be obtained. Other Factors That May Affect Future Growth and Stock Price The Company's operating results and stock price are adversely affected by the Company's current illiquidity previously discussed and, in addition, are dependent upon a number of factors, some of which are beyond the Company's control. These include: 9 Uneven Pattern of Quarterly and Annual Operating Results. The Company's revenues, which are derived primarily from licensing and royalties, are difficult to forecast due to the long sales cycle for the Company's technologies, the potential for customer delay or deferral of implementation of the Company's technologies, the size and timing of inception of individual license agreements, the success of the Company's licensees and strategic partners in exploiting the market for the licensed products, modifications of customer budgets, and uneven patterns of royalty revenue and product orders. As the Company's revenue base is not substantial, delays in finalizing license contracts, implementing the technology to initiate the revenue stream and customer ordering decisions can have a material adverse effect on the Company's quarterly and annual revenue expectations and, as the Company's operating expenses are substantially fixed, income expectations will be subject to a similar adverse outcome. New Business Opportunities. The Company, with limited research and development resources, is compelled to develop new technologies which it believes will enhance and expand its position in the anti-counterfeiting and anti-diversion marketplace it serves. There can be no assurance that the resources expended in this effort will generate significant revenues for the Company. Intellectual Property. The Company relies on a combination of protections provided under applicable international patent, trademark and trade secret laws. It also relies on confidentially, non-analysis and licensing agreements to establish and protect its rights in its proprietary technologies. While the Company actively attempts to protect these rights, the Company's technologies could possibly be compromised through reverse engineering or other means. There can be no assurance that the Company will be able to protect the basis of its technologies from discovery by unauthorized third parties, thus adversely affecting its customer and licensee relationships. Volatility of Stock Price. The market price for the Company's common stock has historically experienced significant fluctuations and may continue to do so. The Company has, since its inception, operated at a loss and has not produced revenue levels traditionally associated with publicly traded companies. The Company's common stock is not listed on a national or regional securities exchange and, consequently, the Company receives limited publicity regarding its business achievements and prospects nor is it extensively followed by securities analysts and traders. The market price may be affected by announcements of new relationships or modifications to existing relationships. The stock prices of many developing public companies, particularly those with small capitalizations have experienced wide fluctuations not necessarily related to operating performance. Such fluctuations may adversely affect the market price of the Company's common stock. 10 PART II - OTHER INFORMATION Item 1. Legal Proceedings Not Applicable Item 2. Changes in Securities Not Applicable Item 3. Defaults Upon Senior Securities Not Applicable Item 4. Submission of Matters to a Vote of Security Holders The Registrant's 1997 Annual Meeting of Shareholders was held on June 9, 1997. At such meeting, Registrant's shareholders elected six (6) persons nominated by the Nominating Committee of the Board to serve as directors of Registrant and ratified the selection of Coopers & Lybrand L.L.P. as Registrant's independent public accountants. The following table shows the votes cast for and against each person nominated to serve as a director, as well as all abstentions, authority withheld and broker non-votes:
Name of Votes For Votes Abstentions Broker Nominee Against Non- or Votes authority withheld - -------------------------------------------------------------------------------------------------- Dr. A. Gundjian 10,029,058 457,997 -0- -0- Norman Gardner 10,024,352 462,703 -0- -0- Joel Pinsky 10,004,758 482,297 -0- -0- William Drake 9,969,184 517,871 -0- -0- Edward Patrone 9,727,158 759,897 -0- -0- Ray B. Mundt 9,726,958 760,097 -0- -0-
11 The voting on the proposal to ratify the selection of Coopers & Lybrand L.L.P. as Registrant's independent public accountants was as follows: 10,126,567 For; 325,191 Against; 35,297 Abstentions; and -0- Broker Non-Votes. Item 5. Other Information Not Applicable Item 6 Exhibits and Reports on Form 8-K (a). Exhibit 11 Computation of loss per common share (b). Exhibit 27 - Financial Data Schedule (c). No Current Reports on Form 8-K have been filed by the Registrant during the quarter ended June 30, 1997. 12 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. NOCOPI TECHNOLOGIES, INC. DATE: August 18, 1997 /s/ Norman A. Gardner ---------------------------------- Norman A. Gardner President & Chief Executive Officer DATE: August 18, 1997 /s/ Rudolph A. Lutterschmidt ---------------------------------- Rudolph A. Lutterschmidt Vice President & Chief Financial Officer 13 NOCOPI TECHNOLOGIES, INC. COMPUTATION OF LOSS PER COMMON SHARE EXHIBIT 11
Three Months ended June 30 Six Months ended June 30 1997 1996 1997 1996 ---------- ----------- ---------- ----------- Primary Net loss applicable to common shares ($278,400) ($34,600) ($400,200) ($45,400) ========== ========== ========== =========== Weighted average common shares outstanding 14,080,654 14,064,951 14,080,654 14,054,558 Dilutive shares - based on the treasury stock method using the average market price (1) 119,481 154 76,376 ---------- ---------- ---------- ---------- 14,080,654 14,184,432 14,080,808 14,130,934 ========== ========== ========== ========== Per share amount applicable to net loss ($.02) ($.00) ($.03) ($.00) Three Months ended June 30 Six Months ended June 30 1997 1996 1997 1996 ---------- ---------- ---------- ---------- Fully diluted Net loss ($278,400) ($34,600) ($400,200) ($45,400) Add interest on Series B notes 16,600 16,600 33,200 33,200 Deduct ownership interest of others in consolidated entity (112,100) (95,800) (199,200) ---------- ---------- ---------- ---------- Net loss applicable to common shares ($261,800) ($130,100) ($462,800) ($211,400) ========== ========== ========== ========== Weighted average common shares outstanding 14,080,654 14,064,951 14,080,654 14,054,558 Dilutive shares - based on the treasury stock method using the greater of the period-end market price or the average market price (2) 1,292,706 1,412,187 1,292,860 1,369,082 ---------- ---------- ---------- ---------- 15,373,360 15,477,138 15,373,514 15,423,640 ========== ========== ========== ========== Per share amount applicable to net loss ($.02) ($.01) ($.03) ($.01)
(1) represents shares resulting from stock options and warrants. (2) represents shares resulting from stock options, warrants and the assumed conversion of the convertible notes and Euro-Nocopi S.A. stock. EX-27 2 FDS --
5 6-MOS DEC-31-1997 JUN-30-1997 JUN-30-1997 250,000 0 1,035,900 40,800 3,600 1,294,900 459,800 326,200 1,933,400 2,048,100 0 0 0 140,800 (425,900) 1,933,400 2,065,600 2,065,600 1,192,200 1,192,200 0 12,000 35,800 (400,200) 0 (400,200) 0 0 0 (400,200) (0.03) (0.03)
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