0001079973-23-000688.txt : 20230515 0001079973-23-000688.hdr.sgml : 20230515 20230515103051 ACCESSION NUMBER: 0001079973-23-000688 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 49 CONFORMED PERIOD OF REPORT: 20230331 FILED AS OF DATE: 20230515 DATE AS OF CHANGE: 20230515 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NOCOPI TECHNOLOGIES INC/MD/ CENTRAL INDEX KEY: 0000888981 STANDARD INDUSTRIAL CLASSIFICATION: GAMES, TOYS & CHILDREN'S VEHICLES (NO DOLLS & BICYCLES) [3944] 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: 23919448 BUSINESS ADDRESS: STREET 1: 480 SHOEMAKER ROAD STREET 2: SUITE 104 CITY: KING OF PRUSSIA STATE: PA ZIP: 19406 BUSINESS PHONE: 6108349600 MAIL ADDRESS: STREET 1: 480 SHOEMAKER ROAD STREET 2: SUITE 104 CITY: KING OF PRUSSIA STATE: PA ZIP: 19406 10-Q 1 nnup_10q.htm FORM 10-Q
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United States

Securities and Exchange Commission

Washington, D.C. 20549

 

Form 10-Q

(Mark One)

 

  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended March 31, 2023

 

or

 

  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from _________________ to ______________

 

Commission File Number: 000-20333

 

NOCOPI TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter)

 

Maryland  87-0406496
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)

 

480 Shoemaker Road, Suite 104, King of Prussia, PA 19406

(Address of principal executive offices) (Zip Code)

 

(610) 834-9600

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act: None.

 

Title of each class Trading Symbol(s) Name of each exchange on which registered
     

 

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   No 

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes   No 

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer    Accelerated filer   
Non-accelerated filer      Smaller reporting company  
  Emerging growth company  

 

If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Securities Act. 

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes   No 

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 9,251,178 shares of common stock, par value $0.01, as of May 15, 2023.

 
 

 

 
 

NOCOPI TECHNOLOGIES, INC.

 

INDEX

 

  PAGE
Part I. FINANCIAL INFORMATION  
   
Item 1. Financial Statements 1
   
Statements of Comprehensive Income (Loss) for the Three Months Ended March 31, 2023 and March 31, 2022 1
Balance Sheets at March 31, 2023 and December 31, 2022 2
Statements of Cash Flows for the Three Months Ended March 31, 2023 and March 31, 2022 3
Statements of Stockholders’ Equity for the Three Months ended March 31, 2023 and March 31, 2022 4
Notes to Financial Statements 5
   
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 10
   
Item 3. Quantitative and Qualitative Disclosures About Market Risk 15
   
Item 4. Controls and Procedures 15
   
Part II. OTHER INFORMATION  
   
Item 1. Legal Proceedings 16
   
Item 1A. Risk Factors 16
   
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. 16
   
Item 3. Defaults Upon Senior Securities 16
   
Item 4. Mine Safety Disclosures 16
   
Item 5. Other Information 16
   
Item 6. Exhibits 16
   
SIGNATURES 17
   
EXHIBIT INDEX 18

 

 

 

 
 

PART I – FINANCIAL INFORMATION

 

Item 1. Financial Statements.

 

Nocopi Technologies, Inc.

Statements of Comprehensive Income (Loss)*

(unaudited)

         
  

Three Months ended

March 31

 
   2023   2022 
Revenues        
Licenses, royalties and fees  $123,000   $137,300 
Product and other sales   469,100    202,100 
 Total revenues   592,100    339,400 
Cost of revenues          
Licenses, royalties and fees   58,700    39,500 
Product and other sales   221,800    126,700 
 Total cost of revenues   280,500    166,200 
Gross profit   311,600    173,200 
           
Operating expenses          
Research and development   44,800    39,500 
Sales and marketing   86,300    64,800 
General and administrative   201,200    277,700 
 Total operating expenses   332,300    382,000 
Net loss from operations   (20,700)   (208,800)
           
Other income (expenses)          
Interest income   62,100    5,800 
Interest expense and bank charges   (600)   (400)
 Total other income (expenses)   61,500    5,400 
Net income (loss) before income taxes   40,800    (203,400)
Income taxes   10,500       
Net income (loss)  $30,300   $(203,400)
           
Basic net income (loss) per common share  $.00   $(.03)
Diluted net income (loss) per common share  $.00   $(.03)
           
Weighted average common shares outstanding          
Basic   9,251,178    6,751,178 
Diluted   9,251,178    6,751,178 

 

 

 

*See accompanying notes to these financial statements.

 

1 
 

Nocopi Technologies, Inc.

Balance Sheets*

(unaudited)

 

         
   March 31   December 31 
   2023   2022 
         
Assets          
Current assets          
Cash  $5,394,300   $5,337,800 
Accounts receivable less $12,000 allowance for doubtful accounts   1,267,200    1,103,500 
Inventory   405,400    486,400 
Prepaid and other   160,000    103,300 
Total current assets   7,226,900    7,031,000 
           
Fixed assets          
Leasehold improvements   58,400    58,400 
Furniture, fixtures and equipment   165,500    164,400 
 Fixed assets, gross   223,900    222,800 
Less: accumulated depreciation and amortization   176,100    167,800 
 Total fixed assets    47,800    55,000 
Other assets          
Long-term receivables   2,306,100    2,463,100 
Operating lease right of use – building   55,900    68,300 
 Other assets    2,362,000    2,531,400 
Total assets  $9,636,700   $9,617,400 
           
Liabilities and Stockholders' Equity          
Current liabilities          
Accounts payable  $72,100   $97,700 
Accrued expenses   201,200    173,700 
Income taxes   297,600    287,100 
Operating lease liability – current   51,500    50,700 
Total current liabilities   622,400    609,200 
           
Other liabilities          
Accrued expenses, non-current   161,200    172,200 
Operating lease liability – non-current   4,400    17,600 
 Total other liabilities   165,600    189,800 
           
Stockholders' equity          
Common stock, $0.01 par value
Authorized – 75,000,000 shares
Issued and outstanding – 9,251,168 shares
   92,500    92,500 
Paid-in capital   16,659,600    16,659,600 
Accumulated deficit   (7,903,400)   (7,933,700)
Total stockholders' equity   8,848,700    8,818,400 
Total liabilities and stockholders' equity  $9,636,700   $9,617,400 

 

*See accompanying notes to these financial statements.

 

 

 

2 
 

Nocopi Technologies, Inc.

Statements of Cash Flows*

(unaudited)

         
  

Three Months ended

March 31

 
   2023   2022 
Operating Activities          
Net income (loss)  $30,300   $(203,400)
Adjustments to reconcile net income (loss) to net cash provided by operating activities          
Depreciation and amortization   8,300    8,500 
Other assets   169,400    104,300 
Other liabilities   (23,400)   (18,100)
 Net income adjusted for non-cash operating activities   184,600    (108,700 
           
(Increase) decrease in assets          
Accounts receivable   (163,700)   171,700 
Inventory   81,000    (88,400)
Prepaid and other   (56,700)   79,100 
Increase in liabilities          
Accounts payable and accrued expenses   1,900    116,500 
Income taxes   10,500       
 Total increase in operating capital   (127,000)   278,900 
Net cash provided by operating activities   57,600    170,200 
           
Investing Activities          
Additions to fixed assets   (1,100)      
Net cash used in investing activities   (1,100)      
           
Increase in cash   56,500    170,200 
Cash at beginning of year   5,337,800    1,846,700 
Cash at end of period  $5,394,300   $2,016,900 

 

*See accompanying notes to these financial statements.

 

 

 

3 
 

Nocopi Technologies, Inc.

Statements of Stockholders’ Equity*

For the Three Months ended March 31, 2023 and March 31, 2022

(unaudited)

 

                     
   Common stock   Paid-in   Accumulated     
   Shares   Amount   Capital   Deficit   Total 
Balance at December 31, 2022   9,251,178   $92,500   $16,659,600   $(7,933,700)  $8,818,400 
                          
Net income                30,300    30,300 
Balance at March 31, 2023   9,251,178   $92,500   $16,659,600   $(7,903,400)  $8,848,700 

 

 

   Common stock   Paid-in   Accumulated     
   Shares   Amount   Capital   Deficit   Total 
Balance at December 31, 2021   6,751,178   $67,500   $13,184,600   $(9,746,800)  $3,505,300 
                          
Net loss                (203,400)   (203,400)
Balance at March 31, 2022   6,751,178   $67,500   $13,184,600   $(9,950,200)  $3,301,900 

  

 

* See accompanying notes to these financial statements.

 

 

4 
 

 

 

NOCOPI TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS

(UNAUDITED)

 

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, 2022, as filed with the Securities and Exchange Commission on March 31, 2023, as amended on April 28, 2023 (the “2022 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 2022 Annual Report should be read in conjunction with the accompanying interim financial statements. The interim operating results for the three months ended March 31, 2023 may not be necessarily indicative of the operating results expected for the full year. 

 

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).

 

Note 2. Stock Based Compensation

 

Our Company follows FASB ASC 718, Compensation – Stock Compensation, and uses the Black-Scholes option pricing model to calculate the grant-date fair value of an award. At March 31, 2023, our Company did not have an active stock option plan. There was no unrecognized portion of expense related to stock option grants at March 31, 2023.

 

 

 5

NOCOPI TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS

(UNAUDITED)

 

Note 3. Cash and Cash Equivalents

          
  

March 31

2023

  

December 31

2022

 
Cash and cash equivalents          
  Cash and money market funds  $976,700   $917,400 
  U.S. Treasury Bills   4,417,600    4,420,400 
 Cash and cash equivalents  $5,394,300   $5,337,800 

 

The amortized cost and fair value of securities held to maturity at March 31, 2023 are as follows:

          
  

Amortized

Cost

  

Fair

Value

 
U.S. Treasury Bills          
Due April 20, 2023  $1,122,400   $1,122,500 
Due July 13, 2023   1,111,700    1,110,300 
    Total  $2,234,100   $2,232,800 

 

Note 4. Long-term Receivables

 

As of March 31, 2023, the Company had long-term receivables of $2,303,000 from three licensees representing the present value of fixed guaranteed royalty payments that will be payable over varying periods of two through five years that commenced in the second half of 2022 and terminate in the second quarter of 2028. The fixed guaranteed royalty payments result from amendments to license agreements with two existing licensees and a license agreement with a new licensee. The receivable represents the present value of the fixed minimum annual payments due under the license agreements, discounted at the Company's incremental borrowing rate of 4%. 

 

The three agreements grant licenses for the use of certain patented ink technology as it exists at the time that it is granted which is considered functional intellectual property. Under Topic 606, a performance obligation to transfer a license for functional intellectual property is satisfied at a point in time and the fixed consideration could be recognized upfront when the Company transfers control of the licensee if certain criteria are met. Specifically, the minimum royalty guarantee could be recognized upfront if the following conditions are met:

 

  · The royalty payment is fixed or determinable

 

  · Collection of the royalty payment is considered probable

 

  · The licensee has the ability to benefit from the licensed technology

 

The Company determined that the above conditions were met upon execution of the agreements and, in the year ended December 31, 2022, recognized $2,810,600 of royalty revenue along with $206,600 of commission expense net of imputed interest of $131,300. The commissions are payable over the term of the license agreements and are due when payments are received by the Company. As of March 31, 2023, the accrued commission payable balance was approximately $194,700.

 

The current portion of the three new license agreements and one license agreement entered into in prior years, in the amount of $571,800 and $507,500, is included in accounts receivable on the balance sheets as of March 31, 2023 and December 31, 2022, respectively.

 

 

 6

NOCOPI TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS

(UNAUDITED)

 

 

The following table summarizes the future minimum payments due under the three new license agreements as of March 31, 2023:

      
Year Ending December 31:     
 2023   $327,500 
 2024    642,000 
 2025    570,000 
 2026    570,000 
 2027    557,500 
 2028    260,000 
    Total   $2,927,000 

 

The Company has evaluated the collectability of the long-term receivables and believes them to be fully collectible as of March 31, 2023. However, there can be no assurance that the receivables will not be impaired in the future due to changes in the licensees’ financial condition or other factors. 

 

The long-term receivables are recorded at its present value as of March 31, 2023, and will be amortized over the term of the license agreements using the effective interest method. The unamortized balance of the long-term receivables as of March 31, 2023 is $2,303,100.

 

Note 5. Line of Credit

 

In November 2018, our Company negotiated a $150,000 revolving line of credit with a bank to provide a source of working capital, if required. 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. The line of credit is subject to an annual review and quiet period. There have been no borrowings under the line of credit since its inception.

 

Note 6. Income Taxes

 

At March 31, 2023, our Company had federal and state taxable income of approximately $38,400 and $40,800, respectively. State income taxes in the three months ended March 31, 2023 resulted from limitations placed on income tax net operating loss deductions by the Commonwealth of Pennsylvania. There was no income tax benefit for the losses for the three months ended March 31, 2022 because our Company determined that the realization of the net deferred tax asset was not assured. Our Company created a valuation allowance for the entire amount of such benefits.

 

The components for federal and state income tax expense are:

         
  

Three Months ended

March 31

 
   2023   2022 
Current federal taxes  $8,100   $   
Current state taxes   2,400       
Income tax expense (benefit)  $10,500   $   

 

There was no change in unrecognized tax benefits during the period ended March 31, 2023 and there was no accrual for uncertain tax positions as of March 31, 2023.

 

Tax years from 2019 through 2022 remain subject to examination by U.S. federal and state jurisdictions.

 

Note 7. Earnings (Loss) per Share

 

In accordance with FASB ASC 260, Earnings per Share, basic earnings (loss) per common share is computed using net earnings (loss) divided by the weighted average number of common shares outstanding for the periods presented. Diluted earnings (loss) per share are computed using weighted average number of common shares plus dilutive common share equivalents outstanding during the period. Since our Company did not have any common stock equivalents outstanding as of March 31, 2023 and March 31, 2022, basic and diluted earnings (loss) per share were the same.

 

 

 7

NOCOPI TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS

(UNAUDITED)

 

Note 8. 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:

         
  

Three Months ended

March 31

 
   2023   2022 
Customer A   71%   43%
Customer B   12%   26%
Customer C   3%   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:

         
   March 31   December 31 
   2023   2022 
Customer A   12%   6%
Customer B   77%   84%

 

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:

         
  

Three Months ended

March 31

 
   2023   2022 
North America  $127,800   $123,900 
South America         1,600 
Asia   441,500    197,900 
Australia   22,800    16,000 
   $592,100   $339,400 

 

 

 

 

 8

NOCOPI TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS

(UNAUDITED)

 

 

Note 9. 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%. The minimum lease payments do not include common area annual expenses which are considered to be non-lease components.

 

As of January 1, 2019 the operating lease right-of-use asset and operating lease liability amounted to $241,100 with no cumulative-effect adjustment to the opening balance of accumulated deficit.

 

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, 2023 and March 31, 2022 was $13,300.

 

Maturities of lease liabilities were as follows:

     
   Operating Leases 
Year ending December 31     
      
2023  $42,400 
2024   18,900 
Total lease payments   61,300 
Less imputed interest   (5,400)
Total  $55,900 

 

 

 

 

 

 

9 
 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

 

Forward-Looking Information

 

This Report on Form 10-Q contains, and our officers and representatives may from time to time make, "forward-looking statements" within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as: "anticipate," "intend," "plan," "goal," "seek," "believe," "project," "estimate," "expect," "strategy," "future," "likely," "may," "should," "will" and similar references to future periods. Examples of forward-looking statements include, among others, statements we make regarding:

 

  · Expected operating results, such as revenue, expenses and capital expenditures
  · Current or future volatility in market conditions
  · Our belief that we have sufficient liquidity to fund our business operations during the next twelve months
  · Strategy for customer retention, growth, product development, market position, and risk management

 

Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following:

 

  · The extent to which the COVID-19 pandemic may impact our future financial and operational performance will be dependent on many factors that we may not be able to predict because they continue to change and evolve depending on both national and local circumstances, among them being customers and suppliers, and a potential inability to obtain raw materials due to lower availability. We continue to monitor the impact of COVID-19 on our business but we cannot accurately predict the extent to which it will adversely affect our future results of operations, financial condition or cash flows.
  · The extent to which we are successful in gaining new long-term relationships with customers or retaining significant existing customers and the level of service failures that could lead customers to use competitors' services.
  · Strategic actions, including business acquisitions and our success in integrating acquired businesses.
  · Our ability to improve our current credit rating with our vendors and the impact on our raw materials and other costs and competitive position of doing so.
  · The impact of losing our intellectual property protections or the loss in value of our intellectual property.
  · Changes in customer demand.
  · The adequacy of our cash flow and earnings and other conditions which may affect our ability to timely service our debt obligations.
  · The occurrence of hostilities, political instability or catastrophic events.
  · Developments and changes in laws and regulations, including increased regulation of our industry through legislative action and revised rules and standards.
  · Security breaches, cybersecurity attacks and other significant disruptions in our information technology systems.
  · Such other factors as discussed throughout Part I, Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations in this Quarterly Report on Form 10-Q, and throughout Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations and in Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2022.

 

Any forward-looking statement made by us in this Report is based only on information currently available to us and speaks only as of the date on which it is made. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.

 

 

10 
 

The following discussion and analysis should be read in conjunction with our condensed financial statements, included herewith. This discussion should not be construed to imply that the results discussed herein will necessarily continue into the future, or that any conclusion reached herein will necessarily be indicative of actual operating results in the future. Such discussion represents only the best present assessment of our management. This information should also be read in conjunction with our audited historical financial statements which are included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the Securities and Exchange Commission on March 31, 2023, as amended on April 28, 2023.

 

Background Overview

 

Nocopi Technologies, Inc. develops and markets specialty reactive inks for applications in the large educational and toy products market. We also develop and market technologies for document and product authentication, which we believe can reduce losses caused by fraudulent document reproduction or by product counterfeiting and/or diversion. We derive our revenues primarily from licensing our technologies on an exclusive or non-exclusive basis to licensees who incorporate our technologies into their product offering and from selling products incorporating our technologies to the licensees or to their licensed printers.

 

Unless the context otherwise requires, all references to the “Company,” “we,” “our” or “us” and other similar terms means Nocopi Technologies, Inc., a Maryland corporation.

 

 

 

 

11 
 

 

 

Results of Operations

 

Our Company’s revenues are derived from (a) royalties paid by licensees of our technologies, (b) fees for the provision of technical services to licensees and (c) from the direct sale of (i) products incorporating our technologies, such as inks, security paper and pressure sensitive labels, and (ii) equipment used to support the application of our technologies, such as ink-jet printing systems. Royalties consist of guaranteed minimum royalties payable by our licensees in certain cases and additional royalties which typically vary with the licensee’s sales or production of products incorporating the licensed technology. Service fees and sales revenues vary directly with the number of units of service or product provided.

 

Our Company recognizes revenue on its lines of business as follows:

 

  a. License fees for the use of our technology and royalties with guaranteed minimum amounts are recognized at a point in time when the term begins;
  b. Product sales are recognized at the time of the transfer of goods to customers at an amount that our Company expects to be entitled to in exchange for these goods, which is at the time of shipment; and
  c. Fees for technical services are recognized at the time of the transfer of services to customers at an amount that our Company expects to be entitled to in exchange for the services, which is when the service has been rendered.

 

We believe that, as fixed cost reductions beyond those we have achieved in recent years may not be achievable, our operating results are substantially dependent on revenue levels. Because revenues derived from licenses and royalties carry a much higher gross profit margin than other revenues, operating results are also substantially affected by changes in revenue mix.

 

Both the absolute amount of our Company’s revenues and the mix among the various sources of revenue are subject to substantial fluctuation. We have a relatively small number of substantial customers rather than a large number of small customers. Accordingly, changes in the revenue received from a significant customer can have a substantial effect on our Company’s total revenue, revenue mix and overall financial performance. Such changes may result from a substantial customer’s product development delays, engineering changes, changes in product marketing strategies, production requirements and the like. In addition, certain customers have, from time to time, sought to renegotiate certain provisions of their license agreements and, when our Company agrees to revise such terms, revenues from the customer may be adversely affected.

 

Revenues for the first quarter of 2023 were $592,100 compared to $339,400 in the first quarter of 2022, an increase of $252,700, or approximately 74%. Licenses, royalties and fees decreased by $14,300, or approximately 10%, in the first quarter of 2023 to $123,000 from $137,300 in the first quarter of 2022. The decrease in licenses, royalties and fees in the first quarter of 2023 compared to the first quarter of 2022 is due primarily to lower royalties from our Company’s licensees in the entertainment and toy products market. We cannot assure you that the marketing and product development activities of our Company’s licensees or other businesses in the entertainment and toy products market will produce a significant increase in revenues for our Company, nor can the timing of any potential revenue increases be predicted, particularly given the uncertain economic conditions presently being experienced.

 

Product and other sales increased by $267,000, or approximately 132%, to $469,100 in the first quarter of 2023 from $202,100 in the first quarter of 2022. Sales of ink increased in the first quarter of 2023 compared to the first quarter of 2022 due primarily to higher ink shipments to the third party authorized printer used by two of our Company’s major licensees in the entertainment and toy products market. In the first quarter of 2023, our Company derived revenues of approximately $541,500 from our Company’s licensees and their authorized printers in the entertainment and toy products market compared to revenues of approximately $306,500 in the first quarter of 2022.

 

Our Company’s gross profit increased to $311,600, or approximately 53% of gross revenues, in the first quarter of 2023 from $173,200, or approximately 51% of gross revenues, in the first quarter of 2022. Licenses, royalties and fees have historically carried a higher gross profit than product and other sales, which generally consist of either supplies or other manufactured products which incorporate our Company’s technologies or equipment used to support the application of its technologies. These items (except for inks which are manufactured by our Company) are generally purchased from third-party vendors and resold to the end-user or licensee and carry a lower gross profit than licenses, royalties and fees. 

 

 

 

 

 

12 
 

 

As the variable component of cost of revenues related to licenses, royalties and fees is a low percentage of these revenues and the fixed component is not substantial, period to period changes in revenues from licenses, royalties and fees can significantly affect both the gross profit from these sources as well as our Company’s overall gross profit. The gross profit from licenses, royalties and fees decreased to approximately 52% in the first quarter of 2023 from approximately 71% in the first quarter of 2022.

 

The gross profit of product and other sales, expressed as a percentage of revenues, is dependent on both the overall sales volumes of product and other sales and on the mix of the specific goods produced and/or sold. Primarily due to higher sales of ink and other products in the first quarter of 2023 compared to the first quarter of 2022, there was a higher gross profit from product and other sales of approximately 53% of revenues in the first quarter of 2023 compared to a gross profit of approximately 37% of revenues in the first quarter of 2022.

 

Research and development expenses increased in the first quarter of 2023 to $44,800 compared to $39,500 in the first quarter of 2022 due primarily to higher employee and lab expenses in the first quarter of 2023 compared to the first quarter of 2022.

 

Sales and marketing expenses increased to $86,300 in the first quarter of 2023 from $64,800 in the first quarter of 2022 due primarily to higher commission expense on the higher level of revenues in the first quarter of 2023 compared to the first quarter of 2022.

 

General and administrative expenses decreased in the first quarter of 2023 to $201,200 compared to $277,700 in the first quarter of 2022 due primarily to lower professional fees offset in part by higher employee related expenses and higher insurance expense in the first quarter of 2023 compared to the first quarter of 2022.

 

Income taxes in the first quarter of 2023 include federal and state income taxes. The state income taxes result from limitations placed on income tax net operating loss deductions by the Commonwealth of Pennsylvania.

 

The net income of $30,300 in the first quarter of 2023 compared to the net loss of $203,400 in the first quarter of 2022 resulted primarily from a higher gross profit on a higher level of product sales, lower operating expenses and interest income in the first quarter of 2023 compared to the first quarter of 2022.

 

Plan of Operation, Liquidity and Capital Resources

 

During the first quarter of 2023, our Company’s cash increased to $5,394,300 at March 31, 2023 from $5,337,800 at December 31, 2022. During the first quarter of 2023, our Company generated $57,600 from its operating activities and used $1,100 for capital expenditures. 

 

During the first quarter of 2023, our Company’s revenues increased approximately 74% primarily as a result of higher sales of ink to an authorized printer of our Company’s licensees in the entertainment and toy products market offset in part by lower royalty revenues from our Company’s licensees in the entertainment and toy products market. Our total overhead expenses decreased in the first quarter of 2023 to $332,300 compared to $382,000 in the first quarter of 2022, our Company’s interest income and our Company’s income tax expense increased in the first quarter of 2023 compared to the first quarter of 2022. As a result of these factors, our Company generated net income of $30,300 in the first quarter of 2023 compared to a net loss of $203,400 in the first quarter of 2022. Our Company had positive operating cash flow of $57,600 during the first quarter of 2023. At March 31, 2023, our Company had working capital of $6,604,500 and stockholders’ equity of $8,848,700. For the full year of 2022, our Company had net income of $1,813,100 and had negative operating cash flow of $8,100. At December 31, 2022, our Company had working capital of $6,421,800 and stockholders’ equity of $8,818,400. 

 

In November 2018, our Company negotiated a $150,000 revolving line of credit (“Line of Credit”) with a bank to provide a source of working capital, if required. 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. The Line of Credit is subject to an annual review and quiet period. There have been no borrowings under the Line of Credit since its inception. We may need to obtain additional capital in the future to further support the working capital requirements associated with our existing revenue base and to develop new revenue sources. We cannot assure you that we will be successful in obtaining such additional capital, if needed. We continue to maintain a cost containment program including curtailment, where possible, of discretionary research and development and sales and marketing expenses.

 

13 
 

Our plan of operation for the twelve months beginning with the date of this Quarterly Report consists of concentrating available human and financial resources to continue to capitalize on the specific business relationships our Company has developed in the entertainment and toy products market. This includes two licensees that have been marketing products incorporating the Company’s technologies since 2012. These two licensees maintain a significant presence in the entertainment and toy products market and are well known and highly regarded participants in this market. We anticipate that these two licensees will expand their current offerings that incorporate our technologies and will introduce and market new products that will incorporate our technologies available to them under their license agreements with our Company. We will continue to develop various applications for these licensees. We also plan to expand our licensee base in the entertainment and toy market. We currently have additional licensees marketing or developing products incorporating our technologies in certain geographic and niche markets of the overall entertainment and toy products market.

 

Our Company maintains its presence in the retail loss prevention market and believes that revenue growth in this market can be achieved through increased security ink sales to its licensees in this market. We will continue to adjust our production and technical staff as necessary and, subject to available financial resources, invest in capital equipment needed to support potential growth in ink production requirements beyond our current capacity. Additionally, we will pursue opportunities to market our current technologies in specific security and non-security markets. There can be no assurances that these efforts will enable our Company to generate additional revenues and positive cash flow.

 

Our future growth strategy includes expanding our business through acquisitions of other companies with competing or complementary services, technologies or businesses in order to expand our product and service offerings to grow our free cash flow. We are currently actively engaged in the process to identify acquisition candidates and negotiate transactions. As of the date of this report on Form 10-Q, we have no agreements to make any acquisition. We expect to fund our business expansion through the issuance of debt or equity securities, the payment of cash, the exchange of services, or any combination thereof.

Our Company has received, and may in the future seek, additional capital in the form of debt, equity or both, to support our working capital requirements and to provide funding for other business opportunities. Beyond the Line of Credit, we cannot assure you that if we require additional capital, that we will be successful in obtaining such additional capital, or that such additional capital, if obtained, will enable our Company to generate additional revenues and positive cash flow.

 

As previously stated, we generate a significant portion of our total revenues from licensees in the entertainment and toy products market. These licensees generally sell their products through retail outlets. In the future, such sales may be adversely affected by changes in consumer spending that may occur as a result of an uncertain economic environment in 2023 and beyond due to any future effects of the COVID-19 pandemic and its effect on the global economy, geopolitical instability including the ongoing conflict between Russia and Ukraine and the supply chain disruptions related to both as well as the record inflation, lower demand and significantly higher interest rates currently being experienced in the United States along with the probability of an economic recession both in the United States and globally. The eventual magnitude of these circumstances and their effect on the worldwide economy are extremely uncertain at this time. As a result, our revenues, results of operations and liquidity may be negatively impacted in future periods.

 

Contractual Obligations

 

As of March 31, 2023, there were no material changes in our contractual obligations from those disclosed in our Annual Report on Form 10-K filed with the SEC on March 31, 2023, as amended on April 28, 2023, other than those appearing in the notes to the financial statements appearing elsewhere in this Quarterly Report on Form 10-Q.

 

Recently Adopted Accounting Pronouncements

 

As of March 31, 2023, there were no recently adopted accounting standards that had a material effect on our Company’s financial statements.

 

Recently Issued Accounting Pronouncements Not Yet Adopted

 

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments. The amendments in this Update affect loans, debt securities, trade receivables, and any other financial assets that have the contractual right to receive cash. The ASU requires an entity to recognize expected credit losses rather than incurred losses for financial assets. For public entities, the amendments are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. ASU No. 2019-10 extends the effective dates for two years for smaller reporting companies and nonpublic companies.

 

 

14 
 

In August 2020, the FASB issued ASU No. 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40), Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The amendments in this Update affect entities that issue convertible instruments and/or contracts in an entity’s own equity. For convertible instruments, the instruments primarily affected are those issued with beneficial conversion features or cash conversion features because the accounting models for those specific features are removed. However, all entities that issue convertible instruments are affected by the amendments to the disclosure requirements in this Update. For contracts in an entity’s own equity, the contracts primarily affected are freestanding instruments and embedded features that are accounted for as derivatives under the current guidance because of failure to meet the settlement conditions of the derivatives scope exception related to certain requirements of the settlement assessment. The Board simplified the settlement assessment by removing the requirements (1) to consider whether the contract would be settled in registered shares, (2) to consider whether collateral is required to be posted, and (3) to assess shareholder rights. Those amendments also affect the assessment of whether an embedded conversion feature in a convertible instrument qualifies for the derivatives scope exception. Additionally, the amendments in this Update affect the diluted EPS calculation for instruments that may be settled in cash or shares and for convertible instruments. The amendments in this Update are effective for public business entities that meet the definition of a Securities and Exchange Commission (SEC) filer, excluding entities eligible to be smaller reporting companies as defined by the SEC, for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Board specified that an entity should adopt the guidance as of the beginning of its annual fiscal year. The Board decided to allow entities to adopt the guidance through either a modified retrospective method of transition or a fully retrospective method of transition. 

 

Off-Balance Sheet Arrangements

 

Our Company does not have any off-balance sheet arrangements.

  

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

 

Not Applicable

 

Item 4. Controls and Procedures.

 

Evaluation of Disclosure Controls and Procedures. Our Company’s management, with the participation of our Company’s Principal Executive Officer and Principal Financial Officer, evaluated the effectiveness of our Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of March 31, 2023. Based on this evaluation, our Company’s Principal Executive Officer and Principal Financial Officer concluded that, as of March 31, 2023, our Company’s disclosure controls and procedures were effective, in that they provide reasonable assurance that information required to be disclosed by our Company in the reports that it files or submits under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and is accumulated and communicated to our Company’s management, including our Company’s Principal Executive Officer and Principal Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

 

Changes in Internal Control Over Financial Reporting. There were no changes in our internal control over financial reporting during the quarter ended March 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

15 
 

PART II - OTHER INFORMATION

 

Item 1. Legal Proceedings.

 

None

 

Item 1A. Risk Factors.

 

Not applicable

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

 

None 

 

Item 3. Defaults Upon Senior Securities.

 

None

 

Item 4. Mine Safety Disclosures.

 

Not applicable

 

Item 5.  Other Information.

 

None 

 

Item 6.  Exhibits.

 

(a) Exhibits

 

The following exhibits are included herein:

 

Exhibit Number   Description   Location
31.1   Certification of Chief Executive Officer required by Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.   Filed herewith
31.2   Certification of Chief Financial Officer required by Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.   Filed herewith
32.1   Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.   Furnished herewith
101.INS   Inline XBRL Instance Document–the instance document does not appear in the Interactive Data File as its XBRL tags are embedded within the Inline XBRL document   Filed herewith
101.SCH   Inline XBRL Taxonomy Extension Schema   Filed herewith
101.CAL   Inline XBRL Taxonomy Extension Calculation Linkbase   Filed herewith
101.DEF   Inline XBRL Taxonomy Extension Definition Linkbase   Filed herewith
101.LAB   Inline XBRL Taxonomy Extension Label Linkbase   Filed herewith
101.PRE   Inline XBRL Taxonomy Extension Presentation Linkbase   Filed herewith
104   Cover page formatted as Inline XBRL and contained in Exhibit 101   Filed herewith

 

 

 

16 
 

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: May 15, 2023   /s/ Michael A. Feinstein, M.D.
    Michael A. Feinstein, M.D.
    Chairman of the Board, President & Chief Executive Officer
     
DATE: May 15, 2023   /s/ Rudolph A. Lutterschmidt
    Rudolph A. Lutterschmidt
    Vice President & Chief Financial Officer

 

 

 

 

 

 

 

17 
 

EXHIBIT INDEX

 

Exhibit Number   Description   Location
31.1   Certification of Chief Executive Officer required by Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.   Filed herewith
31.2   Certification of Chief Financial Officer required by Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.   Filed herewith
32.1   Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.   Furnished herewith
101.INS   Inline XBRL Instance Document–the instance document does not appear in the Interactive Data File as its XBRL tags are embedded within the Inline XBRL document   Filed herewith
101.SCH   Inline XBRL Taxonomy Extension Schema   Filed herewith
101.CAL   Inline XBRL Taxonomy Extension Calculation Linkbase   Filed herewith
101.DEF   Inline XBRL Taxonomy Extension Definition Linkbase   Filed herewith
101.LAB   Inline XBRL Taxonomy Extension Label Linkbase   Filed herewith
101.PRE   Inline XBRL Taxonomy Extension Presentation Linkbase   Filed herewith
104   Cover page formatted as Inline XBRL and contained in Exhibit 101   Filed herewith

 

 

 

18

 

 

 

 

 

 

EX-31.1 2 ex31x1.htm EXHIBIT 31.1

EXHIBIT 31.1

 

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

 

I, Michael A. Feinstein, M.D., Chief Executive Officer of Nocopi Technologies, Inc., certify that:

 

  1. I have reviewed this quarterly report on Form 10-Q of Nocopi Technologies, Inc.;

 

  2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

  3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

  4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

  (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

  (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

  (c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

  (d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

  5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

 

  (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

  (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: May 15, 2023

 

/s/ Michael A. Feinstein, M.D.

Michael A. Feinstein, M.D.

Chief Executive Officer

 

EX-31.2 3 ex31x2.htm EXHIBIT 31.2

EXHIBIT 31.2

 

CERTIFICATION OF CHIEF FINANCIAL OFFICER

 

I, Rudolph A. Lutterschmidt, Vice President and Chief Financial Officer of Nocopi Technologies, Inc., certify that:

 

  1. I have reviewed this quarterly report on Form 10-Q of Nocopi Technologies, Inc.;

 

  2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

  3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

  4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

  (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

  (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

  (c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

  (d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (registrant’s fourth fiscal quarter in the case of annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

  5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

 

  (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

  (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: May 15, 2023

 

/s/ Rudolph A. Lutterschmidt

Rudolph A. Lutterschmidt

Vice President and Chief Financial Officer

 

 
 
EX-32.1 4 ex32x1.htm EXHIBIT 32.1

Exhibit 32.1

 

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report of Nocopi Technologies, Inc. (the "Company") on Form 10-Q for the Quarter ended March 31, 2023 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned, Michael A. Feinstein, M.D., Chief Executive Officer, and Rudolph A. Lutterschmidt, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that;

 

(1) The Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and

 

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

 

May 15, 2023

 

/s/ Michael A. Feinstein, M.D.

Michael A. Feinstein, M.D.

Principal Executive Officer

 

/s/ Rudolph A. Lutterschmidt

Rudolph A. Lutterschmidt

Principal Financial Officer

 

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Document Shell Company Report Document Shell Company Event Date Document Period Start Date Document Period End Date Document Fiscal Period Focus Document Fiscal Year Focus Current Fiscal Year End Date Entity File Number Entity Registrant Name Entity Central Index Key Entity Primary SIC Number Entity Tax Identification Number Entity Incorporation, State or Country Code Entity Address, Address Line One Entity Address, Address Line Two Entity Address, Address Line Three Entity Address, City or Town Entity Address, State or Province Entity Address, Country Entity Address, Postal Zip Code Country Region City Area Code Local Phone Number Extension Written Communications Soliciting Material Pre-commencement Tender Offer Pre-commencement Issuer Tender Offer Title of 12(b) Security No Trading Symbol Flag Trading Symbol Security Exchange Name Title of 12(g) Security Security Reporting Obligation Annual Information Form Audited Annual Financial Statements Entity Well-known Seasoned Issuer Entity 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(loss) per common share Diluted net income (loss) per common share Weighted average common shares outstanding Basic Diluted Statement of Financial Position [Abstract] Assets Current assets Cash Accounts receivable less $12,000 allowance for doubtful accounts Inventory Prepaid and other Total current assets Fixed assets Leasehold improvements Furniture, fixtures and equipment  Fixed assets, gross Less: accumulated depreciation and amortization  Total fixed assets  Other assets Long-term receivables Operating lease right of use – building  Other assets  Total assets Liabilities and Stockholders' Equity Current liabilities Accounts payable Accrued expenses Income taxes Operating lease liability – current Total current liabilities Other liabilities Accrued expenses, non-current Operating lease liability – non-current  Total other liabilities Stockholders' equity Common stock, $0.01 par value Authorized – 75,000,000 shares Issued and outstanding – 9,251,168 shares Paid-in capital 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Ending balance, value Ending balance, shares Organization, Consolidation and Presentation of Financial Statements [Abstract] Financial Statements Compensation Related Costs [Abstract] Stock Based Compensation Cash and Cash Equivalents [Abstract] Cash and Cash Equivalents Receivables [Abstract] Long-term Receivables Line Of Credit Line of Credit Income Tax Disclosure [Abstract] Income Taxes Earnings Per Share [Abstract] Earnings (Loss) per Share Segment Reporting [Abstract] Major Customer and Geographic Information Leases [Abstract] Leases Schedule of Cash and Cash Equivalents Schedule of amortized cost and fair value of securities held to maturity Schedule of future minimum payments State Income Tax Expense Company's Revenues As Percentage Of Revenue Schedule of Non-affiliated Customers with Accounts Receivable More Than 10% Company's Revenue by Geographic Region Maturities of Lease Liabilities Unrecognized portion of expense related to stock option grants   Cash and money market funds   U.S. Treasury Bills  Cash and cash equivalents Schedule of Cash and Cash Equivalents [Table] Cash and Cash Equivalents [Line Items] Amortized Cost Fair Value 2023 2024 2025 2026 2027 2028 Total Long-term receivables Incremental borrowing rate Royalty revenue Commission expense Imputed interest Accrued commission payable Accounts receivable Long-term receivables Line of Credit Facility, Maximum Borrowing Capacity Line of Credit Facility, Interest Rate Description Current federal taxes Current state taxes Income tax expense (benefit) Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Table] Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items] Federal and state taxable income State income taxes Unrecognized tax benefits Uncertain tax positions Tax years open for examination Schedule of Revenue by Major Customers, by Reporting Segments [Table] Revenue, Major Customer [Line Items] Risk percentage Schedule of Revenues from External Customers and Long-Lived Assets [Table] Revenues from External Customers and Long-Lived Assets [Line Items] Revenues 2023 2024 Total lease payments Less imputed interest Total Incremental borrowing rate Operating lease right-of-use asset Operating Lease, Expense Customer B [Member] Customer A [Member] Revenues [Default Label] LicensesRoyaltiesAndFees CostOfGoodsAndOtherSales Cost of Goods and Services Sold Gross Profit Operating Expenses Operating Income (Loss) Interest Expense Nonoperating Income (Expense) Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Noncontrolling Interest Net Income (Loss) Attributable to Parent Assets, Current Property, Plant and Equipment, Gross Property, Plant and Equipment, Net Other Assets Assets [Default Label] Accrued Income Taxes, Current Liabilities, Current Liabilities, Noncurrent Stockholders' Equity Attributable to Parent Liabilities and Equity Net Income (Loss) Available to Common Stockholders, Basic Increase (Decrease) in Other Operating Assets Increase (Decrease) in Other Operating Liabilities Adjustments to Reconcile Net Income (Loss) to Cash Provided by (Used in) Operating Activities Increase (Decrease) in Accounts Receivable Increase (Decrease) in Inventories Increase (Decrease) in Prepaid Expense and Other Assets Increase (Decrease) in Income Taxes Payable Increase (Decrease) in Operating Capital Net Cash Provided by (Used in) Operating Activities Payments to Acquire Property, Plant, and Equipment Net Cash Provided by (Used in) Investing Activities Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents, Period Increase (Decrease), Excluding Exchange Rate Effect Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents Shares, Outstanding LongtermReceivables Financing Receivable, Change in Present Value, Interest Income Lessee, Operating Lease, Liability, to be Paid, Year One Lessee, Operating Lease, Liability, to be Paid, Year Two Lessee, Operating Lease, Liability, to be Paid Lessee, Operating Lease, Liability, Undiscounted Excess Amount Operating Lease, Liability Lessee, Operating Lease, Discount Rate EX-101.PRE 9 nnup-20230331_pre.xml XBRL PRESENTATION FILE XML 10 R1.htm IDEA: XBRL DOCUMENT v3.23.1
Cover - shares
3 Months Ended
Mar. 31, 2023
May 09, 2023
Cover [Abstract]    
Document Type 10-Q  
Amendment Flag false  
Document Quarterly Report true  
Document Transition Report false  
Document Period End Date Mar. 31, 2023  
Document Fiscal Period Focus Q1  
Document Fiscal Year Focus 2023  
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   9,251,178
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Statements of Comprehensive Income (Unaudited) - USD ($)
3 Months Ended
Mar. 31, 2023
Mar. 31, 2022
Revenues    
Licenses, royalties and fees $ 123,000 $ 137,300
Product and other sales 469,100 202,100
 Total revenues 592,100 339,400
Cost of revenues    
Licenses, royalties and fees 58,700 39,500
Product and other sales 221,800 126,700
 Total cost of revenues 280,500 166,200
Gross profit 311,600 173,200
Operating expenses    
Research and development 44,800 39,500
Sales and marketing 86,300 64,800
General and administrative 201,200 277,700
 Total operating expenses 332,300 382,000
Net loss from operations (20,700) (208,800)
Other income (expenses)    
Interest income 62,100 5,800
Interest expense and bank charges (600) (400)
 Total other income (expenses) 61,500 5,400
Net income (loss) before income taxes 40,800 (203,400)
Income taxes 10,500 0
Net income (loss) $ 30,300 $ (203,400)
Basic net income (loss) per common share $ 0.00 $ (0.03)
Diluted net income (loss) per common share $ 0.00 $ (0.03)
Weighted average common shares outstanding    
Basic 9,251,178 6,751,178
Diluted 9,251,178 6,751,178
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Balance Sheets (Unaudited) - USD ($)
Mar. 31, 2023
Dec. 31, 2022
Current assets    
Cash $ 5,394,300 $ 5,337,800
Accounts receivable less $12,000 allowance for doubtful accounts 1,267,200 1,103,500
Inventory 405,400 486,400
Prepaid and other 160,000 103,300
Total current assets 7,226,900 7,031,000
Fixed assets    
Leasehold improvements 58,400 58,400
Furniture, fixtures and equipment 165,500 164,400
 Fixed assets, gross 223,900 222,800
Less: accumulated depreciation and amortization 176,100 167,800
 Total fixed assets  47,800 55,000
Other assets    
Long-term receivables 2,306,100 2,463,100
Operating lease right of use – building 55,900 68,300
 Other assets  2,362,000 2,531,400
Total assets 9,636,700 9,617,400
Current liabilities    
Accounts payable 72,100 97,700
Accrued expenses 201,200 173,700
Income taxes 297,600 287,100
Operating lease liability – current 51,500 50,700
Total current liabilities 622,400 609,200
Other liabilities    
Accrued expenses, non-current 161,200 172,200
Operating lease liability – non-current 4,400 17,600
 Total other liabilities 165,600 189,800
Stockholders' equity    
Common stock, $0.01 par value Authorized – 75,000,000 shares Issued and outstanding – 9,251,168 shares 92,500 92,500
Paid-in capital 16,659,600 16,659,600
Accumulated deficit (7,903,400) (7,933,700)
Total stockholders' equity 8,848,700 8,818,400
Total liabilities and stockholders' equity $ 9,636,700 $ 9,617,400
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Balance Sheets (Unaudited) (Parenthetical) - USD ($)
Mar. 31, 2023
Dec. 31, 2022
Statement of Financial Position [Abstract]    
Allowance for Doubtful Accounts $ 12,000 $ 12,000
Common stock, par value $ 0.01 $ 0.01
Common stock, shares authorized 75,000,000 75,000,000
Common stock, shares issued 9,251,168 9,251,168
Common stock, shares outstanding 9,251,168 9,251,168
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Statements of Cash Flows (Unaudited) - USD ($)
3 Months Ended
Mar. 31, 2023
Mar. 31, 2022
Operating Activities    
Net income (loss) $ 30,300 $ (203,400)
Adjustments to reconcile net income (loss) to net cash provided by operating activities    
Depreciation and amortization 8,300 8,500
Other assets 169,400 104,300
Other liabilities (23,400) (18,100)
 Net income adjusted for non-cash operating activities 184,600 (108,700)
(Increase) decrease in assets    
Accounts receivable (163,700) 171,700
Inventory 81,000 (88,400)
Prepaid and other (56,700) 79,100
Increase in liabilities    
Accounts payable and accrued expenses 1,900 116,500
Income taxes 10,500 0
 Total increase in operating capital (127,000) 278,900
Net cash provided by operating activities 57,600 170,200
Investing Activities    
Additions to fixed assets (1,100) 0
Net cash used in investing activities (1,100) 0
Increase in cash 56,500 170,200
Cash at beginning of year 5,337,800 1,846,700
Cash at end of period $ 5,394,300 $ 2,016,900
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Statements of Stockholders' Equity (Unaudited) - USD ($)
Common Stock [Member]
Additional Paid-in Capital [Member]
Retained Earnings [Member]
Total
Beginning balance, value at Dec. 31, 2021 $ 67,500 $ 13,184,600 $ (9,746,800) $ 3,505,300
Beginning balance, shares at Dec. 31, 2021 6,751,178      
Net loss (203,400) (203,400)
Ending balance, value at Mar. 31, 2022 $ 67,500 13,184,600 (9,950,200) 3,301,900
Ending balance, shares at Mar. 31, 2022 6,751,178      
Beginning balance, value at Dec. 31, 2022 $ 92,500 16,659,600 (7,933,700) 8,818,400
Beginning balance, shares at Dec. 31, 2022 9,251,178      
Net loss 30,300 30,300
Ending balance, value at Mar. 31, 2023 $ 92,500 $ 16,659,600 $ (7,903,400) $ 8,848,700
Ending balance, shares at Mar. 31, 2023 9,251,178      
XML 16 R7.htm IDEA: XBRL DOCUMENT v3.23.1
Financial Statements
3 Months Ended
Mar. 31, 2023
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, 2022, as filed with the Securities and Exchange Commission on March 31, 2023, as amended on April 28, 2023 (the “2022 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 2022 Annual Report should be read in conjunction with the accompanying interim financial statements. The interim operating results for the three months ended March 31, 2023 may not be necessarily indicative of the operating results expected for the full year. 

 

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).

 

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Stock Based Compensation
3 Months Ended
Mar. 31, 2023
Compensation Related Costs [Abstract]  
Stock Based Compensation

Note 2. Stock Based Compensation

 

Our Company follows FASB ASC 718, Compensation – Stock Compensation, and uses the Black-Scholes option pricing model to calculate the grant-date fair value of an award. At March 31, 2023, our Company did not have an active stock option plan. There was no unrecognized portion of expense related to stock option grants at March 31, 2023.

 

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Cash and Cash Equivalents
3 Months Ended
Mar. 31, 2023
Cash and Cash Equivalents [Abstract]  
Cash and Cash Equivalents

Note 3. Cash and Cash Equivalents

          
  

March 31

2023

  

December 31

2022

 
Cash and cash equivalents          
  Cash and money market funds  $976,700   $917,400 
  U.S. Treasury Bills   4,417,600    4,420,400 
 Cash and cash equivalents  $5,394,300   $5,337,800 

 

The amortized cost and fair value of securities held to maturity at March 31, 2023 are as follows:

          
  

Amortized

Cost

  

Fair

Value

 
U.S. Treasury Bills          
Due April 20, 2023  $1,122,400   $1,122,500 
Due July 13, 2023   1,111,700    1,110,300 
    Total  $2,234,100   $2,232,800 

 

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Long-term Receivables
3 Months Ended
Mar. 31, 2023
Receivables [Abstract]  
Long-term Receivables

Note 4. Long-term Receivables

 

As of March 31, 2023, the Company had long-term receivables of $2,303,000 from three licensees representing the present value of fixed guaranteed royalty payments that will be payable over varying periods of two through five years that commenced in the second half of 2022 and terminate in the second quarter of 2028. The fixed guaranteed royalty payments result from amendments to license agreements with two existing licensees and a license agreement with a new licensee. The receivable represents the present value of the fixed minimum annual payments due under the license agreements, discounted at the Company's incremental borrowing rate of 4%. 

 

The three agreements grant licenses for the use of certain patented ink technology as it exists at the time that it is granted which is considered functional intellectual property. Under Topic 606, a performance obligation to transfer a license for functional intellectual property is satisfied at a point in time and the fixed consideration could be recognized upfront when the Company transfers control of the licensee if certain criteria are met. Specifically, the minimum royalty guarantee could be recognized upfront if the following conditions are met:

 

  · The royalty payment is fixed or determinable

 

  · Collection of the royalty payment is considered probable

 

  · The licensee has the ability to benefit from the licensed technology

 

The Company determined that the above conditions were met upon execution of the agreements and, in the year ended December 31, 2022, recognized $2,810,600 of royalty revenue along with $206,600 of commission expense net of imputed interest of $131,300. The commissions are payable over the term of the license agreements and are due when payments are received by the Company. As of March 31, 2023, the accrued commission payable balance was approximately $194,700.

 

The current portion of the three new license agreements and one license agreement entered into in prior years, in the amount of $571,800 and $507,500, is included in accounts receivable on the balance sheets as of March 31, 2023 and December 31, 2022, respectively.

 

The following table summarizes the future minimum payments due under the three new license agreements as of March 31, 2023:

      
Year Ending December 31:     
 2023   $327,500 
 2024    642,000 
 2025    570,000 
 2026    570,000 
 2027    557,500 
 2028    260,000 
    Total   $2,927,000 

 

The Company has evaluated the collectability of the long-term receivables and believes them to be fully collectible as of March 31, 2023. However, there can be no assurance that the receivables will not be impaired in the future due to changes in the licensees’ financial condition or other factors. 

 

The long-term receivables are recorded at its present value as of March 31, 2023, and will be amortized over the term of the license agreements using the effective interest method. The unamortized balance of the long-term receivables as of March 31, 2023 is $2,303,100.

 

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Line of Credit
3 Months Ended
Mar. 31, 2023
Line Of Credit  
Line of Credit

Note 5. Line of Credit

 

In November 2018, our Company negotiated a $150,000 revolving line of credit with a bank to provide a source of working capital, if required. 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. The line of credit is subject to an annual review and quiet period. There have been no borrowings under the line of credit since its inception.

 

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Income Taxes
3 Months Ended
Mar. 31, 2023
Income Tax Disclosure [Abstract]  
Income Taxes

Note 6. Income Taxes

 

At March 31, 2023, our Company had federal and state taxable income of approximately $38,400 and $40,800, respectively. State income taxes in the three months ended March 31, 2023 resulted from limitations placed on income tax net operating loss deductions by the Commonwealth of Pennsylvania. There was no income tax benefit for the losses for the three months ended March 31, 2022 because our Company determined that the realization of the net deferred tax asset was not assured. Our Company created a valuation allowance for the entire amount of such benefits.

 

The components for federal and state income tax expense are:

         
  

Three Months ended

March 31

 
   2023   2022 
Current federal taxes  $8,100   $—   
Current state taxes   2,400    —   
Income tax expense (benefit)  $10,500   $—   

 

There was no change in unrecognized tax benefits during the period ended March 31, 2023 and there was no accrual for uncertain tax positions as of March 31, 2023.

 

Tax years from 2019 through 2022 remain subject to examination by U.S. federal and state jurisdictions.

 

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Earnings (Loss) per Share
3 Months Ended
Mar. 31, 2023
Earnings Per Share [Abstract]  
Earnings (Loss) per Share

Note 7. Earnings (Loss) per Share

 

In accordance with FASB ASC 260, Earnings per Share, basic earnings (loss) per common share is computed using net earnings (loss) divided by the weighted average number of common shares outstanding for the periods presented. Diluted earnings (loss) per share are computed using weighted average number of common shares plus dilutive common share equivalents outstanding during the period. Since our Company did not have any common stock equivalents outstanding as of March 31, 2023 and March 31, 2022, basic and diluted earnings (loss) per share were the same.

 

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Major Customer and Geographic Information
3 Months Ended
Mar. 31, 2023
Segment Reporting [Abstract]  
Major Customer and Geographic Information

Note 8. 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:

         
  

Three Months ended

March 31

 
   2023   2022 
Customer A   71%   43%
Customer B   12%   26%
Customer C   3%   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:

         
   March 31   December 31 
   2023   2022 
Customer A   12%   6%
Customer B   77%   84%

 

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:

         
  

Three Months ended

March 31

 
   2023   2022 
North America  $127,800   $123,900 
South America   —      1,600 
Asia   441,500    197,900 
Australia   22,800    16,000 
   $592,100   $339,400 

 

 

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Leases
3 Months Ended
Mar. 31, 2023
Leases [Abstract]  
Leases

Note 9. 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%. The minimum lease payments do not include common area annual expenses which are considered to be non-lease components.

 

As of January 1, 2019 the operating lease right-of-use asset and operating lease liability amounted to $241,100 with no cumulative-effect adjustment to the opening balance of accumulated deficit.

 

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, 2023 and March 31, 2022 was $13,300.

 

Maturities of lease liabilities were as follows:

     
   Operating Leases 
Year ending December 31     
      
2023  $42,400 
2024   18,900 
Total lease payments   61,300 
Less imputed interest   (5,400)
Total  $55,900 

 

XML 25 R16.htm IDEA: XBRL DOCUMENT v3.23.1
Cash and Cash Equivalents (Tables)
3 Months Ended
Mar. 31, 2023
Cash and Cash Equivalents [Abstract]  
Schedule of Cash and Cash Equivalents
          
  

March 31

2023

  

December 31

2022

 
Cash and cash equivalents          
  Cash and money market funds  $976,700   $917,400 
  U.S. Treasury Bills   4,417,600    4,420,400 
 Cash and cash equivalents  $5,394,300   $5,337,800 
Schedule of amortized cost and fair value of securities held to maturity
          
  

Amortized

Cost

  

Fair

Value

 
U.S. Treasury Bills          
Due April 20, 2023  $1,122,400   $1,122,500 
Due July 13, 2023   1,111,700    1,110,300 
    Total  $2,234,100   $2,232,800 
XML 26 R17.htm IDEA: XBRL DOCUMENT v3.23.1
Long-term Receivables (Tables)
3 Months Ended
Mar. 31, 2023
Receivables [Abstract]  
Schedule of future minimum payments
      
Year Ending December 31:     
 2023   $327,500 
 2024    642,000 
 2025    570,000 
 2026    570,000 
 2027    557,500 
 2028    260,000 
    Total   $2,927,000 
XML 27 R18.htm IDEA: XBRL DOCUMENT v3.23.1
Income Taxes (Tables)
3 Months Ended
Mar. 31, 2023
Income Tax Disclosure [Abstract]  
State Income Tax Expense
         
  

Three Months ended

March 31

 
   2023   2022 
Current federal taxes  $8,100   $—   
Current state taxes   2,400    —   
Income tax expense (benefit)  $10,500   $—   
XML 28 R19.htm IDEA: XBRL DOCUMENT v3.23.1
Major Customer and Geographic Information (Tables)
3 Months Ended
Mar. 31, 2023
Segment Reporting [Abstract]  
Company's Revenues As Percentage Of Revenue
         
  

Three Months ended

March 31

 
   2023   2022 
Customer A   71%   43%
Customer B   12%   26%
Customer C   3%   15%
Schedule of Non-affiliated Customers with Accounts Receivable More Than 10%
         
   March 31   December 31 
   2023   2022 
Customer A   12%   6%
Customer B   77%   84%
Company's Revenue by Geographic Region
         
  

Three Months ended

March 31

 
   2023   2022 
North America  $127,800   $123,900 
South America   —      1,600 
Asia   441,500    197,900 
Australia   22,800    16,000 
   $592,100   $339,400 
XML 29 R20.htm IDEA: XBRL DOCUMENT v3.23.1
Leases (Tables)
3 Months Ended
Mar. 31, 2023
Leases [Abstract]  
Maturities of Lease Liabilities
     
   Operating Leases 
Year ending December 31     
      
2023  $42,400 
2024   18,900 
Total lease payments   61,300 
Less imputed interest   (5,400)
Total  $55,900 
XML 30 R21.htm IDEA: XBRL DOCUMENT v3.23.1
Stock Based Compensation (Details Narrative)
Mar. 31, 2023
USD ($)
Compensation Related Costs [Abstract]  
Unrecognized portion of expense related to stock option grants $ 0
XML 31 R22.htm IDEA: XBRL DOCUMENT v3.23.1
Cash and Cash Equivalents (Details) - USD ($)
Mar. 31, 2023
Dec. 31, 2022
Cash and Cash Equivalents [Abstract]    
  Cash and money market funds $ 976,700 $ 917,400
  U.S. Treasury Bills 4,417,600 4,420,400
 Cash and cash equivalents $ 5,394,300 $ 5,337,800
XML 32 R23.htm IDEA: XBRL DOCUMENT v3.23.1
Cash and Cash Equivalents (Details 1)
Mar. 31, 2023
USD ($)
Cash and Cash Equivalents [Line Items]  
Amortized Cost $ 2,234,100
Fair Value 2,232,800
Due April 20, 2023 [Member]  
Cash and Cash Equivalents [Line Items]  
Amortized Cost 1,122,400
Fair Value 1,122,500
Due July 13, 2023 [Member]  
Cash and Cash Equivalents [Line Items]  
Amortized Cost 1,111,700
Fair Value $ 1,110,300
XML 33 R24.htm IDEA: XBRL DOCUMENT v3.23.1
Long-term Receivables (Details)
Mar. 31, 2023
USD ($)
Receivables [Abstract]  
2023 $ 327,500
2024 642,000
2025 570,000
2026 570,000
2027 557,500
2028 260,000
Total $ 2,927,000
XML 34 R25.htm IDEA: XBRL DOCUMENT v3.23.1
Long-term Receivables (Details Narrative) - USD ($)
3 Months Ended 12 Months Ended
Mar. 31, 2023
Dec. 31, 2022
Receivables [Abstract]    
Long-term receivables $ 2,303,000  
Incremental borrowing rate 4.00%  
Royalty revenue   $ 2,810,600
Commission expense   206,600
Imputed interest   131,300
Accrued commission payable $ 194,700  
Accounts receivable 571,800 $ 507,500
Long-term receivables $ 2,303,100  
XML 35 R26.htm IDEA: XBRL DOCUMENT v3.23.1
Line of Credit (Details Narrative)
3 Months Ended
Mar. 31, 2023
USD ($)
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
XML 36 R27.htm IDEA: XBRL DOCUMENT v3.23.1
Income Taxes (Details - State Income Tax Expense) - USD ($)
3 Months Ended
Mar. 31, 2023
Mar. 31, 2022
Income Tax Disclosure [Abstract]    
Current federal taxes $ 8,100 $ 0
Current state taxes 2,400 0
Income tax expense (benefit) $ 10,500 $ 0
XML 37 R28.htm IDEA: XBRL DOCUMENT v3.23.1
Income Taxes (Details Narrative)
3 Months Ended
Mar. 31, 2023
USD ($)
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items]  
Federal and state taxable income $ 38,400
State income taxes 40,800
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 2019
Maximum [Member]  
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items]  
Tax years open for examination 2022
XML 38 R29.htm IDEA: XBRL DOCUMENT v3.23.1
Major Customer and Geographic Information (Details - Non-affiliated Customers) - Revenue Benchmark [Member]
3 Months Ended
Mar. 31, 2023
Mar. 31, 2022
Customer A [Member]    
Revenue, Major Customer [Line Items]    
Risk percentage 71.00% 43.00%
Customer B [Member]    
Revenue, Major Customer [Line Items]    
Risk percentage 12.00% 26.00%
Customer C [Member]    
Revenue, Major Customer [Line Items]    
Risk percentage 3.00% 15.00%
XML 39 R30.htm IDEA: XBRL DOCUMENT v3.23.1
Major Customer and Geographic Information (Details - Non-affiliated Customers with Accounts Receivable) - Accounts Receivable [Member]
3 Months Ended 12 Months Ended
Mar. 31, 2023
Dec. 31, 2022
Customer A [Member]    
Revenue, Major Customer [Line Items]    
Risk percentage 12.00% 6.00%
Customer B [Member]    
Revenue, Major Customer [Line Items]    
Risk percentage 77.00% 84.00%
XML 40 R31.htm IDEA: XBRL DOCUMENT v3.23.1
Major Customer and Geographic Information (Details - Revenue by Geographic Region) - USD ($)
3 Months Ended
Mar. 31, 2023
Mar. 31, 2022
Revenues from External Customers and Long-Lived Assets [Line Items]    
Revenues $ 592,100 $ 339,400
North America [Member]    
Revenues from External Customers and Long-Lived Assets [Line Items]    
Revenues 127,800 123,900
South America [Member]    
Revenues from External Customers and Long-Lived Assets [Line Items]    
Revenues 0 1,600
Asia [Member]    
Revenues from External Customers and Long-Lived Assets [Line Items]    
Revenues 441,500 197,900
AUSTRALIA    
Revenues from External Customers and Long-Lived Assets [Line Items]    
Revenues $ 22,800 $ 16,000
XML 41 R32.htm IDEA: XBRL DOCUMENT v3.23.1
Leases (Maturities of Lease Liabilities) (Details)
Mar. 31, 2023
USD ($)
Leases [Abstract]  
2023 $ 42,400
2024 18,900
Total lease payments 61,300
Less imputed interest (5,400)
Total $ 55,900
XML 42 R33.htm IDEA: XBRL DOCUMENT v3.23.1
Leases (Details Narrative) - USD ($)
3 Months Ended
Mar. 31, 2023
Mar. 31, 2022
Dec. 31, 2022
Jan. 01, 2019
Leases [Abstract]        
Incremental borrowing rate       6.50%
Operating lease right-of-use asset $ 55,900   $ 68,300 $ 241,100
Operating Lease, Expense $ 13,300 $ 13,300    
XML 43 nnup_10q_htm.xml IDEA: XBRL DOCUMENT 0000888981 2023-01-01 2023-03-31 0000888981 2023-05-09 0000888981 2022-01-01 2022-03-31 0000888981 2023-03-31 0000888981 2022-12-31 0000888981 2021-12-31 0000888981 2022-03-31 0000888981 us-gaap:CommonStockMember 2022-12-31 0000888981 us-gaap:AdditionalPaidInCapitalMember 2022-12-31 0000888981 us-gaap:RetainedEarningsMember 2022-12-31 0000888981 us-gaap:CommonStockMember 2021-12-31 0000888981 us-gaap:AdditionalPaidInCapitalMember 2021-12-31 0000888981 us-gaap:RetainedEarningsMember 2021-12-31 0000888981 us-gaap:CommonStockMember 2023-01-01 2023-03-31 0000888981 us-gaap:AdditionalPaidInCapitalMember 2023-01-01 2023-03-31 0000888981 us-gaap:RetainedEarningsMember 2023-01-01 2023-03-31 0000888981 us-gaap:CommonStockMember 2022-01-01 2022-03-31 0000888981 us-gaap:AdditionalPaidInCapitalMember 2022-01-01 2022-03-31 0000888981 us-gaap:RetainedEarningsMember 2022-01-01 2022-03-31 0000888981 us-gaap:CommonStockMember 2023-03-31 0000888981 us-gaap:AdditionalPaidInCapitalMember 2023-03-31 0000888981 us-gaap:RetainedEarningsMember 2023-03-31 0000888981 us-gaap:CommonStockMember 2022-03-31 0000888981 us-gaap:AdditionalPaidInCapitalMember 2022-03-31 0000888981 us-gaap:RetainedEarningsMember 2022-03-31 0000888981 nnup:DueAprilMember 2023-03-31 0000888981 nnup:DueJulyMember 2023-03-31 0000888981 2022-01-01 2022-12-31 0000888981 srt:MinimumMember 2023-01-01 2023-03-31 0000888981 srt:MaximumMember 2023-01-01 2023-03-31 0000888981 nnup:CustomerAMember us-gaap:SalesRevenueNetMember 2023-01-01 2023-03-31 0000888981 nnup:CustomerAMember us-gaap:SalesRevenueNetMember 2022-01-01 2022-03-31 0000888981 nnup:CustomerBMember us-gaap:SalesRevenueNetMember 2023-01-01 2023-03-31 0000888981 nnup:CustomerBMember us-gaap:SalesRevenueNetMember 2022-01-01 2022-03-31 0000888981 nnup:CustomerCMember us-gaap:SalesRevenueNetMember 2023-01-01 2023-03-31 0000888981 nnup:CustomerCMember us-gaap:SalesRevenueNetMember 2022-01-01 2022-03-31 0000888981 nnup:CustomerAMember us-gaap:AccountsReceivableMember 2023-01-01 2023-03-31 0000888981 nnup:CustomerAMember us-gaap:AccountsReceivableMember 2022-01-01 2022-12-31 0000888981 nnup:CustomerBMember us-gaap:AccountsReceivableMember 2023-01-01 2023-03-31 0000888981 nnup:CustomerBMember us-gaap:AccountsReceivableMember 2022-01-01 2022-12-31 0000888981 srt:NorthAmericaMember 2023-01-01 2023-03-31 0000888981 srt:NorthAmericaMember 2022-01-01 2022-03-31 0000888981 srt:SouthAmericaMember 2023-01-01 2023-03-31 0000888981 srt:SouthAmericaMember 2022-01-01 2022-03-31 0000888981 srt:AsiaMember 2023-01-01 2023-03-31 0000888981 srt:AsiaMember 2022-01-01 2022-03-31 0000888981 country:AU 2023-01-01 2023-03-31 0000888981 country:AU 2022-01-01 2022-03-31 0000888981 2019-01-01 iso4217:USD shares iso4217:USD shares pure 0000888981 false --12-31 2023 Q1 10-Q true 2023-03-31 false 000-20333 NOCOPI TECHNOLOGIES, INC. MD 87-0406496 480 Shoemaker Road Suite 104 King of Prussia PA 19406 (610) 834-9600 Yes Yes Non-accelerated Filer true false false 9251178 123000 137300 469100 202100 592100 339400 58700 39500 221800 126700 280500 166200 311600 173200 44800 39500 86300 64800 201200 277700 332300 382000 -20700 -208800 62100 5800 600 400 61500 5400 40800 -203400 10500 0 30300 -203400 0.00 -0.03 0.00 -0.03 9251178 6751178 9251178 6751178 5394300 5337800 12000 12000 1267200 1103500 405400 486400 160000 103300 7226900 7031000 58400 58400 165500 164400 223900 222800 176100 167800 47800 55000 2306100 2463100 55900 68300 2362000 2531400 9636700 9617400 72100 97700 201200 173700 297600 287100 51500 50700 622400 609200 161200 172200 4400 17600 165600 189800 0.01 0.01 75000000 75000000 9251168 9251168 9251168 9251168 92500 92500 16659600 16659600 -7903400 -7933700 8848700 8818400 9636700 9617400 -30300 203400 8300 8500 -169400 -104300 -23400 -18100 184600 -108700 163700 -171700 -81000 88400 56700 -79100 1900 116500 10500 0 127000 -278900 57600 170200 1100 -0 -1100 0 56500 170200 5337800 1846700 5394300 2016900 9251178 92500 16659600 -7933700 8818400 30300 30300 9251178 92500 16659600 -7903400 8848700 6751178 67500 13184600 -9746800 3505300 -203400 -203400 6751178 67500 13184600 -9950200 3301900 <p id="xdx_80D_eus-gaap--NatureOfOperations_zutSOZ1qTB92" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Note 1.<span id="xdx_82E_zUJCjUxM7Op9"> Financial Statements</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b/></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">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, 2022, as filed with the Securities and Exchange Commission on March 31, 2023, as amended on April 28, 2023 (the “2022 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 2022 Annual Report should be read in conjunction with the accompanying interim financial statements. The interim operating results for the three months ended March 31, 2023 may not be necessarily indicative of the operating results expected for the full year.<span style="font-size: 9pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: -0.5pt">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).</p> <p style="font: 12pt Times New Roman, Times, Serif; margin: 0"> </p> <p id="xdx_807_eus-gaap--CompensationRelatedCostsGeneralTextBlock_zs46Eyj9jEqf" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Note 2.<span id="xdx_82A_zNH3DpCR2Sva"> Stock Based Compensation</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Our Company follows FASB ASC 718, <i>Compensation – Stock Compensation</i>, and uses the Black-Scholes option pricing model to calculate the grant-date fair value of an award. At March 31, 2023, our Company did not have an active stock option plan. There was <span id="xdx_902_eus-gaap--EmployeeServiceShareBasedCompensationNonvestedAwardsTotalCompensationCostNotYetRecognizedStockOptions_iI_pp0p0_do_c20230331_zM9XzTA4orc4" title="Unrecognized portion of expense related to stock option grants">no</span> unrecognized portion of expense related to stock option grants at March 31, 2023.</p> <p style="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> 0 <p id="xdx_80B_eus-gaap--CashAndCashEquivalentsDisclosureTextBlock_zRlTnjFLIEld" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Note 3</b>. <b><span id="xdx_826_zl253eefZyub">Cash and Cash Equivalents</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"/> <table cellpadding="0" cellspacing="0" id="xdx_885_eus-gaap--ScheduleOfCashAndCashEquivalentsTableTextBlock_zulEYtlb4Kbi" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - Cash and Cash Equivalents (Details)"> <tr style="vertical-align: bottom; background-color: transparent"> <td style="text-align: justify"><span id="xdx_8B2_zeJ8p7pjax2l" style="display: none">Schedule of Cash and Cash Equivalents</span></td><td> </td> <td style="text-align: left"> </td><td id="xdx_49E_20230331_z4kOcJ4QbUbj" style="text-align: center"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_49D_20221231_zfHNCM0U2nP8" style="text-align: center"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font-size: 8pt; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-size: 8pt; text-align: center"><p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>March 31</b></p> <p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>2023</b></p></td><td style="padding-bottom: 1pt; font-size: 8pt"> </td><td style="font-size: 8pt; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-size: 8pt; text-align: center"><p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>December 31</b></p> <p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>2022</b></p></td><td style="padding-bottom: 1pt; font-size: 8pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify">Cash and cash equivalents</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_401_ecustom--CashAndMoneyMarketFundsAtCarryingValue_iI_pp0p0_maCACEAzetg_zXAnjrwJSgyg" style="vertical-align: bottom; background-color: transparent"> <td style="width: 74%; text-align: justify">  Cash and money market funds</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 10%; text-align: right">976,700</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 10%; text-align: right">917,400</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_405_eus-gaap--USGovernmentSecuritiesAtCarryingValue_iI_pp0p0_maCACEAzetg_z6b1veWo7Fbb" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify; padding-bottom: 1pt">  U.S. Treasury Bills</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">4,417,600</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">4,420,400</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_404_eus-gaap--CashAndCashEquivalentsAtCarryingValue_iTI_pp0p0_mtCACEAzetg_zak4H6zuJPn7" style="vertical-align: bottom; background-color: transparent"> <td style="color: White; padding-bottom: 2.5pt"> Cash and cash equivalents</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">5,394,300</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">5,337,800</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; color: #1F497D"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The amortized cost and fair value of securities held to maturity at March 31, 2023 are as follows:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"/> <table cellpadding="0" cellspacing="0" id="xdx_885_eus-gaap--HeldToMaturitySecuritiesTextBlock_zEnKeFRwAMS5" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - Cash and Cash Equivalents (Details 1)"> <tr style="vertical-align: bottom; background-color: transparent"> <td style="text-indent: -6pt; padding-left: 0.25in"><span id="xdx_8B5_zjuYa25A99L5" style="display: none">Schedule of amortized cost and fair value of securities held to maturity</span></td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font-size: 8pt; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-size: 8pt; text-align: center"><p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Amortized</b></p> <p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Cost</b></p></td><td style="padding-bottom: 1pt; font-size: 8pt"> </td><td style="font-size: 8pt; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-size: 8pt; text-align: center"><p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Fair</b></p> <p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Value</b></p></td><td style="padding-bottom: 1pt; font-size: 8pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">U.S. Treasury Bills</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: transparent"> <td style="width: 74%; text-indent: -6pt; padding-left: 0.25in">Due April 20, 2023</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_986_eus-gaap--ServicingAssetAtAmortizedValue_c20230331__us-gaap--CashAndCashEquivalentsAxis__custom--DueAprilMember_pp0p0" style="width: 10%; text-align: right" title="Amortized Cost">1,122,400</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_98C_eus-gaap--AssetsFairValueDisclosure_c20230331__us-gaap--CashAndCashEquivalentsAxis__custom--DueAprilMember_pp0p0" style="width: 10%; text-align: right" title="Fair Value">1,122,500</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 1pt; text-indent: -6pt; padding-left: 0.25in">Due July 13, 2023</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_987_eus-gaap--ServicingAssetAtAmortizedValue_c20230331__us-gaap--CashAndCashEquivalentsAxis__custom--DueJulyMember_pp0p0" style="border-bottom: Black 1pt solid; text-align: right" title="Amortized Cost">1,111,700</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_985_eus-gaap--AssetsFairValueDisclosure_c20230331__us-gaap--CashAndCashEquivalentsAxis__custom--DueJulyMember_pp0p0" style="border-bottom: Black 1pt solid; text-align: right" title="Fair Value">1,110,300</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: transparent"> <td style="padding-bottom: 2.5pt; text-indent: -6pt; padding-left: 0.25in">    Total</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_982_eus-gaap--ServicingAssetAtAmortizedValue_c20230331_pp0p0" style="border-bottom: Black 2.5pt double; text-align: right" title="Amortized Cost">2,234,100</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_984_eus-gaap--AssetsFairValueDisclosure_c20230331_pp0p0" style="border-bottom: Black 2.5pt double; text-align: right" title="Fair Value">2,232,800</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <table cellpadding="0" cellspacing="0" id="xdx_885_eus-gaap--ScheduleOfCashAndCashEquivalentsTableTextBlock_zulEYtlb4Kbi" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - Cash and Cash Equivalents (Details)"> <tr style="vertical-align: bottom; background-color: transparent"> <td style="text-align: justify"><span id="xdx_8B2_zeJ8p7pjax2l" style="display: none">Schedule of Cash and Cash Equivalents</span></td><td> </td> <td style="text-align: left"> </td><td id="xdx_49E_20230331_z4kOcJ4QbUbj" style="text-align: center"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_49D_20221231_zfHNCM0U2nP8" style="text-align: center"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font-size: 8pt; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-size: 8pt; text-align: center"><p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>March 31</b></p> <p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>2023</b></p></td><td style="padding-bottom: 1pt; font-size: 8pt"> </td><td style="font-size: 8pt; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-size: 8pt; text-align: center"><p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>December 31</b></p> <p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>2022</b></p></td><td style="padding-bottom: 1pt; font-size: 8pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify">Cash and cash equivalents</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_401_ecustom--CashAndMoneyMarketFundsAtCarryingValue_iI_pp0p0_maCACEAzetg_zXAnjrwJSgyg" style="vertical-align: bottom; background-color: transparent"> <td style="width: 74%; text-align: justify">  Cash and money market funds</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 10%; text-align: right">976,700</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 10%; text-align: right">917,400</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_405_eus-gaap--USGovernmentSecuritiesAtCarryingValue_iI_pp0p0_maCACEAzetg_z6b1veWo7Fbb" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify; padding-bottom: 1pt">  U.S. Treasury Bills</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">4,417,600</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">4,420,400</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_404_eus-gaap--CashAndCashEquivalentsAtCarryingValue_iTI_pp0p0_mtCACEAzetg_zak4H6zuJPn7" style="vertical-align: bottom; background-color: transparent"> <td style="color: White; padding-bottom: 2.5pt"> Cash and cash equivalents</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">5,394,300</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">5,337,800</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> 976700 917400 4417600 4420400 5394300 5337800 <table cellpadding="0" cellspacing="0" id="xdx_885_eus-gaap--HeldToMaturitySecuritiesTextBlock_zEnKeFRwAMS5" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - Cash and Cash Equivalents (Details 1)"> <tr style="vertical-align: bottom; background-color: transparent"> <td style="text-indent: -6pt; padding-left: 0.25in"><span id="xdx_8B5_zjuYa25A99L5" style="display: none">Schedule of amortized cost and fair value of securities held to maturity</span></td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font-size: 8pt; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-size: 8pt; text-align: center"><p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Amortized</b></p> <p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Cost</b></p></td><td style="padding-bottom: 1pt; font-size: 8pt"> </td><td style="font-size: 8pt; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-size: 8pt; text-align: center"><p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Fair</b></p> <p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Value</b></p></td><td style="padding-bottom: 1pt; font-size: 8pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">U.S. Treasury Bills</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: transparent"> <td style="width: 74%; text-indent: -6pt; padding-left: 0.25in">Due April 20, 2023</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_986_eus-gaap--ServicingAssetAtAmortizedValue_c20230331__us-gaap--CashAndCashEquivalentsAxis__custom--DueAprilMember_pp0p0" style="width: 10%; text-align: right" title="Amortized Cost">1,122,400</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_98C_eus-gaap--AssetsFairValueDisclosure_c20230331__us-gaap--CashAndCashEquivalentsAxis__custom--DueAprilMember_pp0p0" style="width: 10%; text-align: right" title="Fair Value">1,122,500</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 1pt; text-indent: -6pt; padding-left: 0.25in">Due July 13, 2023</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_987_eus-gaap--ServicingAssetAtAmortizedValue_c20230331__us-gaap--CashAndCashEquivalentsAxis__custom--DueJulyMember_pp0p0" style="border-bottom: Black 1pt solid; text-align: right" title="Amortized Cost">1,111,700</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_985_eus-gaap--AssetsFairValueDisclosure_c20230331__us-gaap--CashAndCashEquivalentsAxis__custom--DueJulyMember_pp0p0" style="border-bottom: Black 1pt solid; text-align: right" title="Fair Value">1,110,300</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: transparent"> <td style="padding-bottom: 2.5pt; text-indent: -6pt; padding-left: 0.25in">    Total</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_982_eus-gaap--ServicingAssetAtAmortizedValue_c20230331_pp0p0" style="border-bottom: Black 2.5pt double; text-align: right" title="Amortized Cost">2,234,100</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_984_eus-gaap--AssetsFairValueDisclosure_c20230331_pp0p0" style="border-bottom: Black 2.5pt double; text-align: right" title="Fair Value">2,232,800</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> 1122400 1122500 1111700 1110300 2234100 2232800 <p id="xdx_801_eus-gaap--LoansNotesTradeAndOtherReceivablesDisclosureTextBlock_zA1enqpMhi13" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Note 4.<span id="xdx_82D_zoqZVgIfJDAe"> Long-term Receivables</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As of March 31, 2023, the Company had long-term receivables of $<span id="xdx_90B_ecustom--LongtermReceivables_iI_pp0p0_c20230331_zUadrKuHCE47" title="Long-term receivables">2,303,000</span> from three licensees representing the present value of fixed guaranteed royalty payments that will be payable over varying periods of two through five years that commenced in the second half of 2022 and terminate in the second quarter of 2028. The fixed guaranteed royalty payments result from amendments to license agreements with two existing licensees and a license agreement with a new licensee. The receivable represents the present value of the fixed minimum annual payments due under the license agreements, discounted at the Company's incremental borrowing rate of <span id="xdx_90E_eus-gaap--LongTermDebtPercentageBearingFixedInterestRate_iI_dp_c20230331_zVIx8T3sLBZi" title="Incremental borrowing rate">4</span>%. </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The three agreements grant licenses for the use of certain patented ink technology as it exists at the time that it is granted which is considered functional intellectual property. Under Topic 606, a performance obligation to transfer a license for functional intellectual property is satisfied at a point in time and the fixed consideration could be recognized upfront when the Company transfers control of the licensee if certain criteria are met. Specifically, the minimum royalty guarantee could be recognized upfront if the following conditions are met:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: top"> <td style="width: 27px"> </td> <td style="width: 24px"><span style="font-family: Symbol">·</span></td> <td style="text-align: justify">The royalty payment is fixed or determinable</td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: top"> <td style="width: 27px"> </td> <td style="width: 24px"><span style="font-family: Symbol">·</span></td> <td style="text-align: justify">Collection of the royalty payment is considered probable</td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: top"> <td style="width: 27px"> </td> <td style="width: 24px"><span style="font-family: Symbol">·</span></td> <td style="text-align: justify">The licensee has the ability to benefit from the licensed technology</td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company determined that the above conditions were met upon execution of the agreements and, in the year ended December 31, 2022, recognized $<span id="xdx_90C_eus-gaap--RoyaltyIncomeNonoperating_pp0p0_c20220101__20221231_zOkCF3X3w7H6" title="Royalty revenue">2,810,600</span> of royalty revenue along with $<span id="xdx_903_eus-gaap--PaymentsForCommissions_pp0p0_c20220101__20221231_ztJ8VI7hzbp3" title="Commission expense">206,600</span> of commission expense net of imputed interest of $<span id="xdx_900_eus-gaap--ReceivableWithImputedInterestNetAmount_iI_pp0p0_c20221231_zoGRhhIBtLn4" title="Imputed interest">131,300</span>. The commissions are payable over the term of the license agreements and are due when payments are received by the Company. As of March 31, 2023, the accrued commission payable balance was approximately $<span id="xdx_908_eus-gaap--AccruedSalesCommissionCurrent_c20230331_pp0p0" title="Accrued commission payable">194,700</span>.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The current portion of the three new license agreements and one license agreement entered into in prior years, in the amount of $<span id="xdx_90D_eus-gaap--AccountsReceivableNet_c20230331_pp0p0" title="Accounts receivable">571,800</span> and $<span id="xdx_903_eus-gaap--AccountsReceivableNet_iI_pp0p0_c20221231_zXnWQe2uaR0b" title="Accounts receivable">507,500</span>, is included in accounts receivable on the balance sheets as of March 31, 2023 and December 31, 2022, respectively.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The following table summarizes the future minimum payments due under the three new license agreements as of March 31, 2023:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"/> <table cellpadding="0" cellspacing="0" id="xdx_885_eus-gaap--ScheduleOfFinancingReceivablesMinimumPaymentsTableTextBlock_zH4uYbBwMOY7" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - Long-term Receivables (Details)"> <tr style="vertical-align: bottom"> <td colspan="2" style="text-align: left; vertical-align: bottom"> <span id="xdx_8B4_zYxXzg9lnHIh" style="display: none">Schedule of future minimum payments</span></td><td> </td><td> </td> <td colspan="2" style="text-align: center"> </td><td> </td></tr> <tr style="vertical-align: bottom"> <td colspan="2" style="text-align: left; vertical-align: bottom">Year Ending December 31:</td><td> </td><td> </td> <td colspan="2" style="text-align: justify"> </td><td> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="vertical-align: bottom; width: 1%; text-align: left"> </td><td style="vertical-align: bottom; width: 81%; text-align: left">2023</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_987_eus-gaap--OperatingLeasesFutureMinimumPaymentsReceivableCurrent_c20230331_pp0p0" style="width: 14%; text-align: right" title="2023">327,500</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: transparent"> <td style="vertical-align: bottom; text-align: left"> </td><td style="vertical-align: bottom; text-align: left">2024</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_987_eus-gaap--OperatingLeasesFutureMinimumPaymentsReceivableInTwoYears_c20230331_pp0p0" style="text-align: right" title="2024">642,000</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="vertical-align: bottom; text-align: left"> </td><td style="vertical-align: bottom; text-align: left">2025</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_982_eus-gaap--OperatingLeasesFutureMinimumPaymentsReceivableInThreeYears_c20230331_pp0p0" style="text-align: right" title="2025">570,000</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: transparent"> <td style="vertical-align: bottom; text-align: left"> </td><td style="vertical-align: bottom; text-align: left">2026</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_98B_eus-gaap--OperatingLeasesFutureMinimumPaymentsReceivableInFourYears_c20230331_pp0p0" style="text-align: right" title="2026">570,000</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="vertical-align: bottom; text-align: left"> </td><td style="vertical-align: bottom; text-align: left">2027</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_98A_eus-gaap--OperatingLeasesFutureMinimumPaymentsReceivableInFiveYears_c20230331_pp0p0" style="text-align: right" title="2027">557,500</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: transparent"> <td style="padding-bottom: 1pt; vertical-align: bottom; text-align: left"> </td><td style="padding-bottom: 1pt; vertical-align: bottom; text-align: left">2028</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_983_eus-gaap--OperatingLeasesFutureMinimumPaymentsReceivableThereafter_c20230331_pp0p0" style="border-bottom: Black 1pt solid; text-align: right" title="2028">260,000</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt; vertical-align: bottom; text-align: left"> </td><td style="padding-bottom: 2.5pt; vertical-align: bottom; text-align: left">   Total</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_987_eus-gaap--OperatingLeasesFutureMinimumPaymentsReceivable_c20230331_pp0p0" style="border-bottom: Black 2.5pt double; text-align: right" title="Total">2,927,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company has evaluated the collectability of the long-term receivables and believes them to be fully collectible as of March 31, 2023. However, there can be no assurance that the receivables will not be impaired in the future due to changes in the licensees’ financial condition or other factors. </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The long-term receivables are recorded at its present value as of March 31, 2023, and will be amortized over the term of the license agreements using the effective interest method. The unamortized balance of the long-term receivables as of March 31, 2023 is $<span id="xdx_900_eus-gaap--FinancingReceivableChangeInPresentValueInterestIncome_pp0p0_c20230101__20230331_zT07rwSEXEJ5" title="Long-term receivables">2,303,100</span>.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> 2303000 0.04 2810600 206600 131300 194700 571800 507500 <table cellpadding="0" cellspacing="0" id="xdx_885_eus-gaap--ScheduleOfFinancingReceivablesMinimumPaymentsTableTextBlock_zH4uYbBwMOY7" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - Long-term Receivables (Details)"> <tr style="vertical-align: bottom"> <td colspan="2" style="text-align: left; vertical-align: bottom"> <span id="xdx_8B4_zYxXzg9lnHIh" style="display: none">Schedule of future minimum payments</span></td><td> </td><td> </td> <td colspan="2" style="text-align: center"> </td><td> </td></tr> <tr style="vertical-align: bottom"> <td colspan="2" style="text-align: left; vertical-align: bottom">Year Ending December 31:</td><td> </td><td> </td> <td colspan="2" style="text-align: justify"> </td><td> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="vertical-align: bottom; width: 1%; text-align: left"> </td><td style="vertical-align: bottom; width: 81%; text-align: left">2023</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_987_eus-gaap--OperatingLeasesFutureMinimumPaymentsReceivableCurrent_c20230331_pp0p0" style="width: 14%; text-align: right" title="2023">327,500</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: transparent"> <td style="vertical-align: bottom; text-align: left"> </td><td style="vertical-align: bottom; text-align: left">2024</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_987_eus-gaap--OperatingLeasesFutureMinimumPaymentsReceivableInTwoYears_c20230331_pp0p0" style="text-align: right" title="2024">642,000</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="vertical-align: bottom; text-align: left"> </td><td style="vertical-align: bottom; text-align: left">2025</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_982_eus-gaap--OperatingLeasesFutureMinimumPaymentsReceivableInThreeYears_c20230331_pp0p0" style="text-align: right" title="2025">570,000</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: transparent"> <td style="vertical-align: bottom; text-align: left"> </td><td style="vertical-align: bottom; text-align: left">2026</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_98B_eus-gaap--OperatingLeasesFutureMinimumPaymentsReceivableInFourYears_c20230331_pp0p0" style="text-align: right" title="2026">570,000</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="vertical-align: bottom; text-align: left"> </td><td style="vertical-align: bottom; text-align: left">2027</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_98A_eus-gaap--OperatingLeasesFutureMinimumPaymentsReceivableInFiveYears_c20230331_pp0p0" style="text-align: right" title="2027">557,500</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: transparent"> <td style="padding-bottom: 1pt; vertical-align: bottom; text-align: left"> </td><td style="padding-bottom: 1pt; vertical-align: bottom; text-align: left">2028</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_983_eus-gaap--OperatingLeasesFutureMinimumPaymentsReceivableThereafter_c20230331_pp0p0" style="border-bottom: Black 1pt solid; text-align: right" title="2028">260,000</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt; vertical-align: bottom; text-align: left"> </td><td style="padding-bottom: 2.5pt; vertical-align: bottom; text-align: left">   Total</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_987_eus-gaap--OperatingLeasesFutureMinimumPaymentsReceivable_c20230331_pp0p0" style="border-bottom: Black 2.5pt double; text-align: right" title="Total">2,927,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> 327500 642000 570000 570000 557500 260000 2927000 2303100 <p id="xdx_80B_ecustom--LineOfCreditTextBlock_z0YmY0nTPXpl" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Note 5.<span id="xdx_821_zzPYkk0Dt6H3"> Line of Credit</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In November 2018, our Company negotiated a <span id="xdx_90F_eus-gaap--LineOfCreditFacilityMaximumBorrowingCapacity_c20230331_pp0p0" title="Line of Credit Facility, Maximum Borrowing Capacity">$150,000</span> revolving line of credit with a bank to provide a source of working capital, if required. <span id="xdx_907_eus-gaap--LineOfCreditFacilityInterestRateDescription_c20230101__20230331" title="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</span>. The line of credit is subject to an annual review and quiet period. There have been no borrowings under the line of credit since its inception.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> 150000 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 <p id="xdx_800_eus-gaap--IncomeTaxDisclosureTextBlock_zKQpjeLKRpI5" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Note 6.<span id="xdx_82A_z84edwGN9nTl"> Income Taxes</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">At March 31, 2023, our Company had federal and state taxable income of approximately $<span id="xdx_907_eus-gaap--FederalStateAndLocalIncomeTaxExpenseBenefitContinuingOperations_c20230101__20230331_zOu33mTgRKEj" title="Federal and state taxable income">38,400</span> and $<span id="xdx_90B_eus-gaap--CurrentFederalStateAndLocalTaxExpenseBenefit_c20230101__20230331_zucXmWepgKmj" title="State income taxes">40,800</span>, respectively. State income taxes in the three months ended March 31, 2023 resulted from limitations placed on income tax net operating loss deductions by the Commonwealth of Pennsylvania. There was no income tax benefit for the losses for the three months ended March 31, 2022 because our Company determined that the realization of the net deferred tax asset was not assured. Our Company created a valuation allowance for the entire amount of such benefits.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The components for federal and state income tax expense are:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"/> <table cellpadding="0" cellspacing="0" id="xdx_895_eus-gaap--ScheduleOfComponentsOfIncomeTaxExpenseBenefitTableTextBlock_z3vM9aO5gZU6" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - Income Taxes (Details - State Income Tax Expense)"> <tr style="vertical-align: bottom"> <td> <span id="xdx_8B3_zSm2nD8PhQQl" style="display: none">State Income Tax Expense</span></td><td> </td> <td colspan="2" id="xdx_49C_20230101__20230331_zrlUvT9JPIHd" style="text-align: center"> </td><td> </td><td> </td> <td colspan="2" id="xdx_49C_20220101__20220331_zlHBKKj4RWua" style="text-align: center"> </td><td> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font-size: 8pt; padding-bottom: 1pt"> </td> <td colspan="6" style="border-bottom: Black 1pt solid; font-size: 8pt; text-align: center"><p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Three Months ended</b></p> <p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>March 31</b></p></td><td style="padding-bottom: 1pt; font-size: 8pt"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font-size: 8pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-size: 8pt; font-weight: bold; text-align: center">2023</td><td style="padding-bottom: 1pt; font-size: 8pt; font-weight: bold"> </td><td style="font-size: 8pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-size: 8pt; font-weight: bold; text-align: center">2022</td><td style="padding-bottom: 1pt; font-size: 8pt; font-weight: bold"> </td></tr> <tr id="xdx_409_eus-gaap--CurrentStateAndLocalTaxExpenseBenefit_d0_zFFXqXBAKati" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 74%; text-align: left">Current federal taxes</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 10%; text-align: right">8,100</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 10%; text-align: right">—  </td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_408_eus-gaap--DeferredStateAndLocalIncomeTaxExpenseBenefit_d0_zpy79MWCX2Pg" style="vertical-align: bottom; background-color: transparent"> <td style="text-align: left; padding-bottom: 1pt">Current state taxes</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">2,400</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">—  </td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_400_eus-gaap--IncomeTaxExpenseBenefit_d0_zDhWPDYOGjPa" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="color: #CCFFCC; text-align: left; padding-bottom: 2.5pt">Income tax expense (benefit)</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">10,500</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">—  </td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> <p id="xdx_8A5_zrOT2PxdDyMd" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">There was <span id="xdx_900_eus-gaap--UnrecognizedTaxBenefitsPeriodIncreaseDecrease_pp0p0_do_c20230101__20230331_zLMAsKAmutn4" title="Unrecognized tax benefits">no</span> change in unrecognized tax benefits during the period ended March 31, 2023 and there was <span id="xdx_907_eus-gaap--LiabilityForUncertainTaxPositionsCurrent_iI_pp0p0_do_c20230331_zSmnp8MeHRNk" title="Uncertain tax positions">no</span> accrual for uncertain tax positions as of March 31, 2023.</p> <p style="font: 12pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Tax years from <span id="xdx_909_eus-gaap--OpenTaxYear_c20230101__20230331__srt--RangeAxis__srt--MinimumMember_zyGEmfLiMnC9" title="Tax years open for examination">2019</span> through <span id="xdx_903_eus-gaap--OpenTaxYear_c20230101__20230331__srt--RangeAxis__srt--MaximumMember_zXzWASbtpcga" title="Tax years open for examination">2022</span> remain subject to examination by U.S. federal and state jurisdictions.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> 38400 40800 <table cellpadding="0" cellspacing="0" id="xdx_895_eus-gaap--ScheduleOfComponentsOfIncomeTaxExpenseBenefitTableTextBlock_z3vM9aO5gZU6" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - Income Taxes (Details - State Income Tax Expense)"> <tr style="vertical-align: bottom"> <td> <span id="xdx_8B3_zSm2nD8PhQQl" style="display: none">State Income Tax Expense</span></td><td> </td> <td colspan="2" id="xdx_49C_20230101__20230331_zrlUvT9JPIHd" style="text-align: center"> </td><td> </td><td> </td> <td colspan="2" id="xdx_49C_20220101__20220331_zlHBKKj4RWua" style="text-align: center"> </td><td> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font-size: 8pt; padding-bottom: 1pt"> </td> <td colspan="6" style="border-bottom: Black 1pt solid; font-size: 8pt; text-align: center"><p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Three Months ended</b></p> <p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>March 31</b></p></td><td style="padding-bottom: 1pt; font-size: 8pt"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font-size: 8pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-size: 8pt; font-weight: bold; text-align: center">2023</td><td style="padding-bottom: 1pt; font-size: 8pt; font-weight: bold"> </td><td style="font-size: 8pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-size: 8pt; font-weight: bold; text-align: center">2022</td><td style="padding-bottom: 1pt; font-size: 8pt; font-weight: bold"> </td></tr> <tr id="xdx_409_eus-gaap--CurrentStateAndLocalTaxExpenseBenefit_d0_zFFXqXBAKati" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 74%; text-align: left">Current federal taxes</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 10%; text-align: right">8,100</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 10%; text-align: right">—  </td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_408_eus-gaap--DeferredStateAndLocalIncomeTaxExpenseBenefit_d0_zpy79MWCX2Pg" style="vertical-align: bottom; background-color: transparent"> <td style="text-align: left; padding-bottom: 1pt">Current state taxes</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">2,400</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">—  </td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_400_eus-gaap--IncomeTaxExpenseBenefit_d0_zDhWPDYOGjPa" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="color: #CCFFCC; text-align: left; padding-bottom: 2.5pt">Income tax expense (benefit)</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">10,500</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">—  </td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> 8100 0 2400 0 10500 0 0 0 2019 2022 <p id="xdx_802_eus-gaap--EarningsPerShareTextBlock_zGioKDwA15D2" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Note 7.<span id="xdx_820_zm3ZrpsyvlW8"> Earnings (Loss) per Share</span></b></p> <p style="font: 12pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In accordance with FASB ASC 260, <i>Earnings per Share</i>, basic earnings (loss) per common share is computed using net earnings (loss) divided by the weighted average number of common shares outstanding for the periods presented. Diluted earnings (loss) per share are computed using weighted average number of common shares plus dilutive common share equivalents outstanding during the period. Since our Company did not have any common stock equivalents outstanding as of March 31, 2023 and March 31, 2022, basic and diluted earnings (loss) per share were the same.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p id="xdx_80E_eus-gaap--SegmentReportingDisclosureTextBlock_zjGizEGpBgB1" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Note 8.<span id="xdx_82F_zruuuv2Lv24k"> Major Customer and Geographic Information</span></b></p> <p style="font: 12pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">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:</p> <p style="font: 12pt Times New Roman, Times, Serif; margin: 0"/> <table cellpadding="0" cellspacing="0" id="xdx_895_eus-gaap--ScheduleOfRevenueByMajorCustomersByReportingSegmentsTableTextBlock_zPjl5UWGtbMj" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - Major Customer and Geographic Information (Details - Non-affiliated Customers)"> <tr style="vertical-align: bottom"> <td> <span id="xdx_8BA_zjiJk0yIFsma" style="display: none">Company's Revenues As Percentage Of Revenue</span></td><td> </td> <td colspan="2" style="text-align: right"> </td><td> </td><td> </td> <td colspan="2" style="text-align: right"> </td><td> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font-size: 8pt; padding-bottom: 1pt"> </td> <td colspan="6" style="border-bottom: Black 1pt solid; font-size: 8pt; text-align: center"><p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Three Months ended</b></p> <p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>March 31</b></p></td><td style="padding-bottom: 1pt; font-size: 8pt"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font-size: 8pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-size: 8pt; font-weight: bold; text-align: center">2023</td><td style="padding-bottom: 1pt; font-size: 8pt; font-weight: bold"> </td><td style="font-size: 8pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-size: 8pt; font-weight: bold; text-align: center">2022</td><td style="padding-bottom: 1pt; font-size: 8pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 74%; text-align: left">Customer A</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 10%; text-align: right"><span id="xdx_90B_eus-gaap--ConcentrationRiskPercentage1_dp_c20230101__20230331__srt--MajorCustomersAxis__custom--CustomerAMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember_ziSspIRUCpRj" title="Risk percentage">71</span></td><td style="width: 1%; text-align: left">%</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 10%; text-align: right"><span id="xdx_90C_eus-gaap--ConcentrationRiskPercentage1_dp_c20220101__20220331__srt--MajorCustomersAxis__custom--CustomerAMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember_zYoBOjclT9qf" title="Risk percentage">43</span></td><td style="width: 1%; text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: transparent"> <td style="text-align: left">Customer B</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><span id="xdx_90C_eus-gaap--ConcentrationRiskPercentage1_dp_c20230101__20230331__srt--MajorCustomersAxis__custom--CustomerBMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember_z9KWJuxUDo6j" title="Risk percentage">12</span></td><td style="text-align: left">%</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><span id="xdx_90E_eus-gaap--ConcentrationRiskPercentage1_dp_c20220101__20220331__srt--MajorCustomersAxis__custom--CustomerBMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember_zJkmMJhQuNg1" title="Risk percentage">26</span></td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Customer C</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><span id="xdx_903_eus-gaap--ConcentrationRiskPercentage1_dp_c20230101__20230331__srt--MajorCustomersAxis__custom--CustomerCMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember_zg1bXlhtz83g" title="Risk percentage">3</span></td><td style="text-align: left">%</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><span id="xdx_909_eus-gaap--ConcentrationRiskPercentage1_dp_c20220101__20220331__srt--MajorCustomersAxis__custom--CustomerCMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember_zjQLoGHv0F7c" title="Risk percentage">15</span></td><td style="text-align: left">%</td></tr> </table> <p id="xdx_8A4_zKDVagPI3y7f" style="font: 12pt Times New Roman, Times, Serif; margin: 0">  </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">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:</p> <p style="font: 12pt Times New Roman, Times, Serif; margin: 0"/> <table cellpadding="0" cellspacing="0" id="xdx_89C_eus-gaap--SchedulesOfConcentrationOfRiskByRiskFactorTextBlock_zOrfWtNGyOA2" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - Major Customer and Geographic Information (Details - Non-affiliated Customers with Accounts Receivable)"> <tr style="vertical-align: bottom"> <td> <span id="xdx_8BB_z2qpiyFqrcF9" style="display: none">Schedule of Non-affiliated Customers with Accounts Receivable More Than 10%</span></td><td> </td> <td colspan="2" style="text-align: right"> </td><td> </td><td> </td> <td colspan="2" style="text-align: right"> </td><td> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font-size: 8pt; font-weight: bold"> </td> <td colspan="2" style="font-size: 8pt; font-weight: bold; text-align: center">March 31</td><td style="font-size: 8pt; font-weight: bold"> </td><td style="font-size: 8pt; font-weight: bold"> </td> <td colspan="2" style="font-size: 8pt; font-weight: bold; text-align: center">December 31</td><td style="font-size: 8pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font-size: 8pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-size: 8pt; font-weight: bold; text-align: center">2023</td><td style="padding-bottom: 1pt; font-size: 8pt; font-weight: bold"> </td><td style="font-size: 8pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-size: 8pt; font-weight: bold; text-align: center">2022</td><td style="padding-bottom: 1pt; font-size: 8pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 74%; text-align: left">Customer A</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 10%; text-align: right"><span id="xdx_90A_eus-gaap--ConcentrationRiskPercentage1_dp_c20230101__20230331__srt--MajorCustomersAxis__custom--CustomerAMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember_zv6Ls0jJdiE1" title="Risk percentage">12</span></td><td style="width: 1%; text-align: left">%</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 10%; text-align: right"><span id="xdx_907_eus-gaap--ConcentrationRiskPercentage1_dp_c20220101__20221231__srt--MajorCustomersAxis__custom--CustomerAMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember_zdgNxwxv1Cr4" title="Risk percentage">6</span></td><td style="width: 1%; text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: transparent"> <td style="text-align: left">Customer B</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><span id="xdx_90E_eus-gaap--ConcentrationRiskPercentage1_dp_c20230101__20230331__srt--MajorCustomersAxis__custom--CustomerBMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember_zbBWwBEHRYp1" title="Risk percentage">77</span></td><td style="text-align: left">%</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><span id="xdx_90C_eus-gaap--ConcentrationRiskPercentage1_dp_c20220101__20221231__srt--MajorCustomersAxis__custom--CustomerBMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember_zjbynnXpZdg7" title="Risk percentage">84</span></td><td style="text-align: left">%</td></tr> </table> <p id="xdx_8A8_zq5QkdQeIlmf" style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">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.</p> <p style="font: 12pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Our Company’s revenues by geographic region are as follows:</p> <p style="font: 12pt Times New Roman, Times, Serif; margin: 0"/> <table cellpadding="0" cellspacing="0" id="xdx_89C_eus-gaap--RevenueFromExternalCustomersByGeographicAreasTableTextBlock_zgZbhvwidkzl" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - Major Customer and Geographic Information (Details - Revenue by Geographic Region)"> <tr style="vertical-align: bottom"> <td> <span id="xdx_8BA_zbr9485fGGZ7" style="display: none">Company's Revenue by Geographic Region</span></td><td> </td> <td colspan="2" style="text-align: right"> </td><td> </td><td> </td> <td colspan="2" style="text-align: right"> </td><td> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font-size: 8pt; padding-bottom: 1pt"> </td> <td colspan="6" style="border-bottom: Black 1pt solid; font-size: 8pt; text-align: center"><p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Three Months ended</b></p> <p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>March 31</b></p></td><td style="padding-bottom: 1pt; font-size: 8pt"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font-size: 8pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-size: 8pt; font-weight: bold; text-align: center">2023</td><td style="padding-bottom: 1pt; font-size: 8pt; font-weight: bold"> </td><td style="font-size: 8pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-size: 8pt; font-weight: bold; text-align: center">2022</td><td style="padding-bottom: 1pt; font-size: 8pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 74%; text-align: left">North America</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_98A_eus-gaap--Revenues_c20230101__20230331__srt--StatementGeographicalAxis__srt--NorthAmericaMember_pp0p0" style="width: 10%; text-align: right" title="Revenues">127,800</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_984_eus-gaap--Revenues_c20220101__20220331__srt--StatementGeographicalAxis__srt--NorthAmericaMember_pp0p0" style="width: 10%; text-align: right" title="Revenues">123,900</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: transparent"> <td style="text-align: left">South America</td><td> </td> <td style="text-align: left"> </td><td id="xdx_985_eus-gaap--Revenues_pp0p0_d0_c20230101__20230331__srt--StatementGeographicalAxis__srt--SouthAmericaMember_zLjXNBtA2WA" style="text-align: right" title="Revenues">—  </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_98C_eus-gaap--Revenues_c20220101__20220331__srt--StatementGeographicalAxis__srt--SouthAmericaMember_pp0p0" style="text-align: right" title="Revenues">1,600</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Asia</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98A_eus-gaap--Revenues_c20230101__20230331__srt--StatementGeographicalAxis__srt--AsiaMember_pp0p0" style="text-align: right" title="Revenues">441,500</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_984_eus-gaap--Revenues_c20220101__20220331__srt--StatementGeographicalAxis__srt--AsiaMember_pp0p0" style="text-align: right" title="Revenues">197,900</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: transparent"> <td style="padding-bottom: 1pt">Australia</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_98D_eus-gaap--Revenues_c20230101__20230331__srt--StatementGeographicalAxis__country--AU_pp0p0" style="border-bottom: Black 1pt solid; text-align: right" title="Revenues">22,800</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_98B_eus-gaap--Revenues_c20220101__20220331__srt--StatementGeographicalAxis__country--AU_pp0p0" style="border-bottom: Black 1pt solid; text-align: right" title="Revenues">16,000</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_986_eus-gaap--Revenues_c20230101__20230331_pp0p0" style="border-bottom: Black 2.5pt double; text-align: right" title="Revenues">592,100</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_98B_eus-gaap--Revenues_c20220101__20220331_pp0p0" style="border-bottom: Black 2.5pt double; text-align: right" title="Revenues">339,400</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> <p id="xdx_8AD_zHjqg5F45Wwi" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <table cellpadding="0" cellspacing="0" id="xdx_895_eus-gaap--ScheduleOfRevenueByMajorCustomersByReportingSegmentsTableTextBlock_zPjl5UWGtbMj" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - Major Customer and Geographic Information (Details - Non-affiliated Customers)"> <tr style="vertical-align: bottom"> <td> <span id="xdx_8BA_zjiJk0yIFsma" style="display: none">Company's Revenues As Percentage Of Revenue</span></td><td> </td> <td colspan="2" style="text-align: right"> </td><td> </td><td> </td> <td colspan="2" style="text-align: right"> </td><td> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font-size: 8pt; padding-bottom: 1pt"> </td> <td colspan="6" style="border-bottom: Black 1pt solid; font-size: 8pt; text-align: center"><p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Three Months ended</b></p> <p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>March 31</b></p></td><td style="padding-bottom: 1pt; font-size: 8pt"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font-size: 8pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-size: 8pt; font-weight: bold; text-align: center">2023</td><td style="padding-bottom: 1pt; font-size: 8pt; font-weight: bold"> </td><td style="font-size: 8pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-size: 8pt; font-weight: bold; text-align: center">2022</td><td style="padding-bottom: 1pt; font-size: 8pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 74%; text-align: left">Customer A</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 10%; text-align: right"><span id="xdx_90B_eus-gaap--ConcentrationRiskPercentage1_dp_c20230101__20230331__srt--MajorCustomersAxis__custom--CustomerAMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember_ziSspIRUCpRj" title="Risk percentage">71</span></td><td style="width: 1%; text-align: left">%</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 10%; text-align: right"><span id="xdx_90C_eus-gaap--ConcentrationRiskPercentage1_dp_c20220101__20220331__srt--MajorCustomersAxis__custom--CustomerAMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember_zYoBOjclT9qf" title="Risk percentage">43</span></td><td style="width: 1%; text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: transparent"> <td style="text-align: left">Customer B</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><span id="xdx_90C_eus-gaap--ConcentrationRiskPercentage1_dp_c20230101__20230331__srt--MajorCustomersAxis__custom--CustomerBMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember_z9KWJuxUDo6j" title="Risk percentage">12</span></td><td style="text-align: left">%</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><span id="xdx_90E_eus-gaap--ConcentrationRiskPercentage1_dp_c20220101__20220331__srt--MajorCustomersAxis__custom--CustomerBMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember_zJkmMJhQuNg1" title="Risk percentage">26</span></td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Customer C</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><span id="xdx_903_eus-gaap--ConcentrationRiskPercentage1_dp_c20230101__20230331__srt--MajorCustomersAxis__custom--CustomerCMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember_zg1bXlhtz83g" title="Risk percentage">3</span></td><td style="text-align: left">%</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><span id="xdx_909_eus-gaap--ConcentrationRiskPercentage1_dp_c20220101__20220331__srt--MajorCustomersAxis__custom--CustomerCMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember_zjQLoGHv0F7c" title="Risk percentage">15</span></td><td style="text-align: left">%</td></tr> </table> 0.71 0.43 0.12 0.26 0.03 0.15 <table cellpadding="0" cellspacing="0" id="xdx_89C_eus-gaap--SchedulesOfConcentrationOfRiskByRiskFactorTextBlock_zOrfWtNGyOA2" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - Major Customer and Geographic Information (Details - Non-affiliated Customers with Accounts Receivable)"> <tr style="vertical-align: bottom"> <td> <span id="xdx_8BB_z2qpiyFqrcF9" style="display: none">Schedule of Non-affiliated Customers with Accounts Receivable More Than 10%</span></td><td> </td> <td colspan="2" style="text-align: right"> </td><td> </td><td> </td> <td colspan="2" style="text-align: right"> </td><td> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font-size: 8pt; font-weight: bold"> </td> <td colspan="2" style="font-size: 8pt; font-weight: bold; text-align: center">March 31</td><td style="font-size: 8pt; font-weight: bold"> </td><td style="font-size: 8pt; font-weight: bold"> </td> <td colspan="2" style="font-size: 8pt; font-weight: bold; text-align: center">December 31</td><td style="font-size: 8pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font-size: 8pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-size: 8pt; font-weight: bold; text-align: center">2023</td><td style="padding-bottom: 1pt; font-size: 8pt; font-weight: bold"> </td><td style="font-size: 8pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-size: 8pt; font-weight: bold; text-align: center">2022</td><td style="padding-bottom: 1pt; font-size: 8pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 74%; text-align: left">Customer A</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 10%; text-align: right"><span id="xdx_90A_eus-gaap--ConcentrationRiskPercentage1_dp_c20230101__20230331__srt--MajorCustomersAxis__custom--CustomerAMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember_zv6Ls0jJdiE1" title="Risk percentage">12</span></td><td style="width: 1%; text-align: left">%</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 10%; text-align: right"><span id="xdx_907_eus-gaap--ConcentrationRiskPercentage1_dp_c20220101__20221231__srt--MajorCustomersAxis__custom--CustomerAMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember_zdgNxwxv1Cr4" title="Risk percentage">6</span></td><td style="width: 1%; text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: transparent"> <td style="text-align: left">Customer B</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><span id="xdx_90E_eus-gaap--ConcentrationRiskPercentage1_dp_c20230101__20230331__srt--MajorCustomersAxis__custom--CustomerBMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember_zbBWwBEHRYp1" title="Risk percentage">77</span></td><td style="text-align: left">%</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><span id="xdx_90C_eus-gaap--ConcentrationRiskPercentage1_dp_c20220101__20221231__srt--MajorCustomersAxis__custom--CustomerBMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember_zjbynnXpZdg7" title="Risk percentage">84</span></td><td style="text-align: left">%</td></tr> </table> 0.12 0.06 0.77 0.84 <table cellpadding="0" cellspacing="0" id="xdx_89C_eus-gaap--RevenueFromExternalCustomersByGeographicAreasTableTextBlock_zgZbhvwidkzl" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - Major Customer and Geographic Information (Details - Revenue by Geographic Region)"> <tr style="vertical-align: bottom"> <td> <span id="xdx_8BA_zbr9485fGGZ7" style="display: none">Company's Revenue by Geographic Region</span></td><td> </td> <td colspan="2" style="text-align: right"> </td><td> </td><td> </td> <td colspan="2" style="text-align: right"> </td><td> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font-size: 8pt; padding-bottom: 1pt"> </td> <td colspan="6" style="border-bottom: Black 1pt solid; font-size: 8pt; text-align: center"><p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Three Months ended</b></p> <p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>March 31</b></p></td><td style="padding-bottom: 1pt; font-size: 8pt"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font-size: 8pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-size: 8pt; font-weight: bold; text-align: center">2023</td><td style="padding-bottom: 1pt; font-size: 8pt; font-weight: bold"> </td><td style="font-size: 8pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-size: 8pt; font-weight: bold; text-align: center">2022</td><td style="padding-bottom: 1pt; font-size: 8pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 74%; text-align: left">North America</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_98A_eus-gaap--Revenues_c20230101__20230331__srt--StatementGeographicalAxis__srt--NorthAmericaMember_pp0p0" style="width: 10%; text-align: right" title="Revenues">127,800</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_984_eus-gaap--Revenues_c20220101__20220331__srt--StatementGeographicalAxis__srt--NorthAmericaMember_pp0p0" style="width: 10%; text-align: right" title="Revenues">123,900</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: transparent"> <td style="text-align: left">South America</td><td> </td> <td style="text-align: left"> </td><td id="xdx_985_eus-gaap--Revenues_pp0p0_d0_c20230101__20230331__srt--StatementGeographicalAxis__srt--SouthAmericaMember_zLjXNBtA2WA" style="text-align: right" title="Revenues">—  </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_98C_eus-gaap--Revenues_c20220101__20220331__srt--StatementGeographicalAxis__srt--SouthAmericaMember_pp0p0" style="text-align: right" title="Revenues">1,600</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Asia</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98A_eus-gaap--Revenues_c20230101__20230331__srt--StatementGeographicalAxis__srt--AsiaMember_pp0p0" style="text-align: right" title="Revenues">441,500</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_984_eus-gaap--Revenues_c20220101__20220331__srt--StatementGeographicalAxis__srt--AsiaMember_pp0p0" style="text-align: right" title="Revenues">197,900</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: transparent"> <td style="padding-bottom: 1pt">Australia</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_98D_eus-gaap--Revenues_c20230101__20230331__srt--StatementGeographicalAxis__country--AU_pp0p0" style="border-bottom: Black 1pt solid; text-align: right" title="Revenues">22,800</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_98B_eus-gaap--Revenues_c20220101__20220331__srt--StatementGeographicalAxis__country--AU_pp0p0" style="border-bottom: Black 1pt solid; text-align: right" title="Revenues">16,000</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_986_eus-gaap--Revenues_c20230101__20230331_pp0p0" style="border-bottom: Black 2.5pt double; text-align: right" title="Revenues">592,100</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_98B_eus-gaap--Revenues_c20220101__20220331_pp0p0" style="border-bottom: Black 2.5pt double; text-align: right" title="Revenues">339,400</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> 127800 123900 0 1600 441500 197900 22800 16000 592100 339400 <p id="xdx_807_eus-gaap--LeasesOfLesseeDisclosureTextBlock_zLvHgpMfNYB3" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Note 9.<span id="xdx_821_znXAQcbA5wEa"> Leases</span> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt/11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Our Company conducts its operations in leased facilities under a non-cancelable operating lease expiring in 2024.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">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 <span id="xdx_906_eus-gaap--LesseeOperatingLeaseDiscountRate_iI_dp_c20190101_z6ZopgKlnu9k" title="Incremental borrowing rate">6.5</span>%. The minimum lease payments do not include common area annual expenses which are considered to be non-lease components.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As of January 1, 2019 the operating lease right-of-use asset and operating lease liability amounted to $<span id="xdx_90C_eus-gaap--OperatingLeaseRightOfUseAsset_c20190101_pp0p0" title="Operating lease right-of-use asset">241,100</span> with no cumulative-effect adjustment to the opening balance of accumulated deficit.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">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.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Total lease expense under operating leases for each of the three month periods ended March 31, 2023 and March 31, 2022 was $<span id="xdx_90D_eus-gaap--OperatingLeaseExpense_pp0p0_c20230101__20230331_zhAMoC2MS2A5" title="Operating Lease, Expense"><span id="xdx_907_eus-gaap--OperatingLeaseExpense_pp0p0_c20220101__20220331_zPnYGb013KDe" title="Operating Lease, Expense">13,300</span></span>.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Maturities of lease liabilities were as follows:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"/> <table cellpadding="0" cellspacing="0" id="xdx_887_eus-gaap--LesseeOperatingLeaseLiabilityMaturityTableTextBlock_zPkJnu3QtsD6" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - Leases (Maturities of Lease Liabilities) (Details)"> <tr style="vertical-align: bottom"> <td> <span id="xdx_8B2_zL8uGMMq6Cdh" style="display: none">Maturities of Lease Liabilities</span></td><td> </td> <td colspan="2" id="xdx_49B_20230331_zFRWW74PU61j" style="text-align: center"> </td><td> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center"><span style="font-size: 8pt"><b>Operating Leases</b></span></td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 8pt; font-weight: bold">Year ending December 31</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: transparent"> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_40C_eus-gaap--LesseeOperatingLeaseLiabilityPaymentsDueNextTwelveMonths_iI_pp0p0_maLOLLPzn9g_zw56C8vlr9W7" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 87%">2023</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 10%; text-align: right">42,400</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_408_eus-gaap--LesseeOperatingLeaseLiabilityPaymentsDueYearTwo_iI_pp0p0_maLOLLPzn9g_zCzRRrCjJzVl" style="vertical-align: bottom; background-color: transparent"> <td style="padding-bottom: 1pt">2024</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">18,900</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_40A_eus-gaap--LesseeOperatingLeaseLiabilityPaymentsDue_iTI_pp0p0_mtLOLLPzn9g_z5q5ZhIy8k4k" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Total lease payments</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">61,300</td><td style="text-align: left"> </td></tr> <tr id="xdx_40C_eus-gaap--LesseeOperatingLeaseLiabilityUndiscountedExcessAmount_iNI_pp0p0_di_zqsRGU8mb6B6" style="vertical-align: bottom; background-color: transparent"> <td style="text-align: left; padding-bottom: 1pt">Less imputed interest</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(5,400</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr id="xdx_40F_eus-gaap--OperatingLeaseLiability_iI_pp0p0" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt">Total</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">55,900</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> 0.065 241100 13300 13300 <table cellpadding="0" cellspacing="0" id="xdx_887_eus-gaap--LesseeOperatingLeaseLiabilityMaturityTableTextBlock_zPkJnu3QtsD6" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - Leases (Maturities of Lease Liabilities) (Details)"> <tr style="vertical-align: bottom"> <td> <span id="xdx_8B2_zL8uGMMq6Cdh" style="display: none">Maturities of Lease Liabilities</span></td><td> </td> <td colspan="2" id="xdx_49B_20230331_zFRWW74PU61j" style="text-align: center"> </td><td> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center"><span style="font-size: 8pt"><b>Operating Leases</b></span></td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 8pt; font-weight: bold">Year ending December 31</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: transparent"> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_40C_eus-gaap--LesseeOperatingLeaseLiabilityPaymentsDueNextTwelveMonths_iI_pp0p0_maLOLLPzn9g_zw56C8vlr9W7" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 87%">2023</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 10%; text-align: right">42,400</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_408_eus-gaap--LesseeOperatingLeaseLiabilityPaymentsDueYearTwo_iI_pp0p0_maLOLLPzn9g_zCzRRrCjJzVl" style="vertical-align: bottom; background-color: transparent"> <td style="padding-bottom: 1pt">2024</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">18,900</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_40A_eus-gaap--LesseeOperatingLeaseLiabilityPaymentsDue_iTI_pp0p0_mtLOLLPzn9g_z5q5ZhIy8k4k" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Total lease payments</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">61,300</td><td style="text-align: left"> </td></tr> <tr id="xdx_40C_eus-gaap--LesseeOperatingLeaseLiabilityUndiscountedExcessAmount_iNI_pp0p0_di_zqsRGU8mb6B6" style="vertical-align: bottom; background-color: transparent"> <td style="text-align: left; padding-bottom: 1pt">Less imputed interest</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(5,400</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr id="xdx_40F_eus-gaap--OperatingLeaseLiability_iI_pp0p0" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt">Total</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">55,900</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> 42400 18900 61300 5400 55900 EXCEL 44 Financial_Report.xlsx IDEA: XBRL DOCUMENT begin 644 Financial_Report.xlsx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