10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

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

For the fiscal years ended December 31, 2014, 2013 and 2012

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, PA19406

(Address of principal executive offices)  (Zip Code)

Registrant’s telephone number, including area code (610) 834-9600

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
None	Not Applicable

Securities registered pursuant to section 12(g) of the Act:

Common Stock $0.01 par value

(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ¨ Yes þ No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. ¨ Yes þ No

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 þ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). ¨ Yes þ No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨

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

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	þ
(Do not check if a smaller reporting company)

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

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter. $1,037,000 at June 30, 2014 closing price of $0.019.

(APPLICABLE ONLY TO CORPORATE REGISTRANTS)

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date. 58,599,016 shares of common stock, $0.01 par value at August 15, 2015.

DOCUMENTS INCORPORATED BY REFERENCE

None

NOCOPI TECHNOLOGIES, INC.

TABLE OF CONTENTS

Item No.		Page No.
	Part I
1.	Business	1
1A.	Risk Factors	6
1B.	Unresolved Staff Comments	6
2.	Properties	6
3.	Legal Proceedings	6
4.	Mine Safety Disclosures	6
	Part II
5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	7
6.	Selected Financial Data	9
7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	9
7A.	Quantitative and Qualitative Disclosures About Market Risk	19
8.	Financial Statements and Supplementary Data	19
9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure  20	19
9A.	Controls and Procedures	19
9B.	Other Information	20
	Part III
10.	Directors, Executive Officers and Corporate Governance	21
11.	Executive Compensation	23
12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	24
13.	Certain Relationships and Related Transactions, and Director Independence	25
14.	Principal Accounting Fees and Services	26
	Part IV
15.	Exhibits, Financial Statement Schedules	26
Signatures		27

PART I

ITEM 1. BUSINESS

Introduction

This annual report on Form 10-K is a comprehensive filing for the fiscal years ended December 31, 2014, 2013 and 2012. It is being filed by us in order to become current in our filing obligations under the Securities Exchange Act of 1934, as amended. This is our first periodic filing since the quarter ended March 31, 2012. Included in this report are the audited financial statements that have not been included in annual reports on Form 10-K for the years ended since December 31, 2011, as well as summarized quarterly financial information for each of the quarters ended June 30 and September 30, 2012 and for each of the quarters ended March 31, June 30 and September 30, 2013 and 2014.

This annual report should be read together and in connection with the other reports filed by us with the SEC, including our Form 10-Qs for the quarters ended June 30, 2015 and March 31, 2015 being filed contemporaneously with this report, for a comprehensive description of our current financial condition and operating results. In the interest of complete and accurate disclosure, we have included current information in this annual report for all material events and developments that have taken place through the date of filing of this annual report with the SEC.

Background

Nocopi Technologies, Inc. (hereinafter "Nocopi", "Registrant" or the "Company") is a Maryland corporation organized in 1983 that currently develops and markets specialty reactive inks that it believes have applications in the large educational and toy products market. Registrant also develops and markets technologies for document and product authentication which it believes can reduce losses caused by fraudulent document reproduction or by product counterfeiting and/or diversion. Registrant derives its revenues primarily from licensing its technologies on an exclusive or non-exclusive basis to licensees who incorporate the technologies into their product offering and from selling products incorporating its technologies to the licensees or to their licensed printers.

For several years through December 31, 2011, Registrant experienced a decline in revenues as privately-held Elmer’s Products (Elmers), who held a license for two of Registrant’s technologies deemphasized/discontinued product lines that utilized these technologies. The lower revenues resulting from both lower licensing revenues and lower sales of ink to the licensed printer of this licensee caused significant operating losses and a decline in its financial condition during those years which, beginning in mid-2012, resulted in a period of adverse liquidity that continued until mid-2014 when revenue increases generated from two new licensees and their printer in the entertainment and toy products market began to positively impact Registrant’s cash flow. During the period of adverse liquidity that began in mid-2012, certain officers and employees of Registrant deferred salaries and commissions. Registrant also, where possible, deferred payments to certain suppliers and providers of professional services, including its auditors. In the second half of 2013, Registrant sold $105,000 of convertible debentures to seven investors. Funds raised were used to both fund working capital requirements resulting from an increase in revenues as sales of ink to the licensed printer of the new licensees increased during 2013 and to reduce certain outstanding liabilities. As further growth in revenues occurred in the first half of 2014, Registrant’s improved cash flow permitted it to address the preparation of its delinquent compliance filings as outstanding liabilities due its auditors were reduced. Registrant’s revenues increased by 18% in 2013 to $750,200 from $637,000 in 2012 and by 23% in 2014 to $922,800, primarily due to higher license fees realized and higher ink orders from the licensed printer of Registrant’s licensees in the entertainment and toy products market. The revenue increases and other cost containment measures contributed to Registrant’s return to profitability in 2013 and 2014. In 2014 and 2013, Registrant’s net income was $7,900 and $10,300, respectively, compared to a net loss of $146,100 in 2012. Registrant has experienced further revenue growth during the first half of 2015, during which it concluded a new multi-year license with one of its two major licensees in the entertainment and toy products market.

Registrant continues its efforts to raise additional capital, in the form of debt, equity or both to support its working capital requirements and to provide funding for other business opportunities. There are no assurances that Registrant will be able to attract such additional capital.

There can be no assurances that the marketing and product development activities of the Company’s licensees will produce a significant increase in operating revenues for the Company, nor can the timing of any potential revenue increases be predicted.

1

Entertainment and Toy Technologies and Products

Registrant’s technology for the Entertainment and Toy Products market consists of removable dyes that can be produced in a variety of colors and can be revealed by rubbing with a fingernail or other firm object such as a plastic pen cap. This technology, introduced in 2004, has been named Rub-it & Color. Registrant believes that this technology does not compromise the confidentiality of its security and authentication technologies whose chemistry is similar but the specific formulations are different for each application. Applications include children’s activity products such as coloring books without crayons or restaurant place mats, educational instruction books and testing review manuals. Registrant has obtained certifications of non-toxicity from the Consumer Products Services, Inc. and the American Society for Testing and Materials Laboratories. In late 2011, Elmer’s, a former licensee, sold a division that utilized a technology license with Registrant to a business with a significant presence in the entertainment and toy products market and, with Registrant’s consent, assigned the technology license to the purchaser. In January 2012, Registrant negotiated a new six-year license, containing guaranteed royalties for 2012, with the acquirer of the license which permits this licensee to exclusively market a specific line of products incorporating Registrant’s technologies through a specific distribution channel but permitting Registrant to license the covered technologies to others for applications and sale through channels of distribution not available to this licensee under the terms of the new license. In February 2012, Registrant negotiated a license, expiring in 2015, and containing guaranteed minimum royalties over the term of the license, with Bendon, Inc. (Bendon), an international, well-known children’s coloring and activity book publishing company that permits Bendon to exclusively market products with other characteristics that incorporate Registrant’s technologies through a distinctly different channel of distribution. In June 2015, a new four-year license with Bendon, containing guaranteed minimum royalties, was completed. These two new licensees are well known and highly regarded participants in the entertainment and toy products market with significantly greater market recognition and retail distribution in this market than Elmer’s. Both new licensees introduced their initial products incorporating Registrant’s technologies in 2012. Since 2012, revenues derived by Registrant from licensing the technologies to these two licensees and from the sale of ink to the licensed printer of the licensees have been steadily increasing. The agreements with both licensees contain renewal options but there can be no assurances that the licenses will continue in force at the same or more favorable terms beyond their current termination dates nor can there be any assurances that the relationships with these two new licensees will generate revenues for Registrant equal to or greater than those generated by the earlier licensee.

In January 2013, Registrant, upon the expiration of a license for a technology previously held by a business in the entertainment and toy products market, expanded its relationship with the licensee who acquired the license formerly held by Elmer’s to include this technology. The licensee displayed products incorporating this technology to the marketplace at the American International Toy Fair in February 2015 and initial sales of products incorporating this technology were realized in the second quarter of 2015. There can be no assurances that this licensee will generate significant additional operating revenues for Registrant.

In March 2011, Registrant completed a multi-year license agreement with a privately-held designer of creative educational products for children granting the licensee the exclusive right to utilize Registrant’s Rub-it & Color ink technology in a newly-created vertical market in the United States. In addition to an annual license fee, Registrant receives a royalty based on units of product produced. The license was renewed in July 2014 for a period of up to three years. There can be no assurances that the marketing efforts of Registrant’s licensee will generate significant additional operating revenues for the Registrant in the future.

In November 2012, Registrant completed a multi-year license agreement with a privately-held children’s meal entertainment program provider that allows the licensee to use Registrant’s Rub-it & Color ink technology in children’s menus, placemats, butcher paper and certain other products for restaurant use and for sale in certain children’s retail outlets. In December 2014, the license was renewed for a period of six years, expiring in December 2020. There can be no assurances that the marketing efforts of Registrant’s licensee will generate significant additional operating revenues for the Registrant in the future.

In April 2013, Registrant negotiated a license with a nationally known distributor of seasonal boxed greeting cards and other products which permits the licensee to market certain products distributed by the licensee that incorporate specific technologies of the Registrant. Unless renewed, the license terminates in December 2015. The licensee introduced products incorporating Registrant’s technologies in late 2014 resulting in revenues being realized by Registrant in 2014. There can be no assurances that the marketing efforts of Registrant’s licensee will generate significant additional operating revenues for the Registrant in the future.

2

Registrant continues to pursue additional licensing opportunities for its technologies in the large worldwide entertainment and toy products market through direct marketing efforts and attendance at trade shows. During 2014, Registrant derived approximately 76% of its 2014 total revenues from its licensees and their licensed printers in the entertainment and toy products market compared to approximately 74% and 66%, respectively, derived from this market in 2013 and 2012. There can be no assurances that the Registrant’s available resources, even with additional investment, if obtained, for marketing and further technical development of this product line will be sufficient to increase Registrant’s revenues.

Anti-Counterfeiting and Anti-Diversion Technologies and Products

Continuing developments in copying and printing technologies have made it ever easier to counterfeit a wide variety of documents. Product labels and packaging, retail receipts, event and transportation tickets and the like are all susceptible to counterfeiting, and Registrant believes that losses from such counterfeiting have increased substantially with improvements in the copying and printing technologies. Product counterfeiting has long caused losses to manufacturers of brand name products, and Registrant believes these losses have increased as the counterfeiting of labeling and packaging has become easier.

Registrant's proprietary document authentication technologies are useful to businesses desiring to authenticate a wide variety of printed materials and products. One product incorporating these technologies has the ability to print invisibly on certain areas of a document. When authentication of certain documents is required, the invisible printing can be activated or revealed by use of a special highlighter pen. This technology is marketed under the trademark COPIMARK. Other variations of the COPIMARK technology involve multiple color responses from a common pen, visible marks of one color that turn another color with the pen or visible and invisible marks that turn into a multicolored image. A related technology is Nocopi's RUB & REVEAL system, which permits the invisible printing of an authenticating symbol or code that can be revealed by rubbing a fingernail over the printed area. These technologies provide users with the ability to authenticate documents and detect counterfeit documents. Applications include the authentication of documents having intrinsic value, such as merchandise receipts, checks, travelers' checks, gift certificates and event tickets, and the authentication of product labeling and packaging. When applied to product labels and packaging such technologies allow detection of counterfeit products, the labels and packaging of which would not contain the authenticating marks invisibly printed on the packaging or labels of the legitimate product. Registrant has focused recent marketing efforts on specific industries it believes may be affected by product counterfeiting. These technologies also combat product diversion (i.e. sale of legitimate products through unauthorized distribution channels or in unauthorized markets). A related technology of Registrant, the invisible inkjet technology permits manufacturers and distributors to track the movement of products from production to ultimate consumption when coupled with proprietary software. Management believes that the “track and trace” capability provided by this technology can be attractive to brand owners and marketers. There are no assurances that its ongoing initiatives will result in additional revenues in the future.

Registrant currently participates in the retail receipt and document fraud market through licensing arrangements with eight printers and distributors in the United States and Canada who provide loss prevention products to retailers and other outlets. Registrant believes that these technologies are most efficiently marketed through the use of licensed printers and distributors. During 2012, Registrant and Nashua Corporation, a long-time licensee, ceased their business relationship. The termination of this relationship negatively affected its revenues from loss prevention products in 2012, 2013 and 2014. Registrant continues to use its available internal sales and technical resources to expand the number of licensees marketing its technologies in this market. During 2014, Registrant derived approximately 13% of its 2014 total revenues from its licensees in the retail loss prevention market compared to approximately 11% and 23%, respectively, derived from this market in 2013 and 2012. There can be no assurances that Registrant’s strategy for the retail loss prevention market will result in significant additional revenues and cash flow for Registrant.

Document Security Products

From its inception until 2013, Registrant offered a line of burgundy colored papers that deter photocopying and transmission by facsimile. In addition to marketing its own technologies and products, Registrant had acted as a distributor for a line of Pantograph security paper. As a result of declining sales of Registrant’s security paper, Registrant ceased selling such products in 2013.

3

The following table illustrates the approximate percentage of Registrant's revenues accounted for by each type of its products for each of the three last fiscal years:

	Year Ended December 31,
Product Type	2014			2013			2012
Entertainment and Toy Technologies and Products		76	%		74	%		66	%
Anti-Counterfeiting and Anti-Diversion Technologies and Products		24	%		26	%		34	%
Document Security Products		–			–			–

Marketing

Registrant’s marketing approach focuses on the sufficient flexibility in its products and technologies and its ability to provide innovative, cost effective technologies for the entertainment and toy products market as well as solutions to a wide variety of counterfeiting, diversion and copier fraud problems. As a technology company, Registrant generates revenues primarily by collecting license fees and royalties from market-specific businesses that incorporate Registrant's technologies into their products and, in certain cases, sales of Registrant’s inks to these licensees and their designated manufacturers. Registrant also licenses its technologies directly to end-users.

Registrant has identified several major markets for its technologies and products, primarily the entertainment and toy product market and the anti-counterfeiting/anti-diversion market. Registrant’s adverse financial condition in the years from 2011 to the present has limited its sales efforts to direct selling by Registrant’s personnel. Sales travel, attendance at trade shows and marketing expenditures have been constrained. Current marketing efforts are focused on Registrant’s developed technologies that can be utilized in geographic or market areas not contractually committed to an existing licensee on an exclusive basis.  

Except in Europe, Registrant markets its technologies generally through its own employees and, if feasible, through independent sales representatives. In Europe, certain of its security technologies are marketed by Contrast Technologies, formerly known as Euro-Nocopi, S.A., and a former affiliate of the Registrant, which holds certain European marketing rights with respect to those technologies.

Registrant continues its efforts to improve the marketing of its technologies. From 2011 to the current time, Registrant added to its licensee base in both the entertainment and toy products market and the retail receipt and document fraud market. Registrant, through its limited internal sales resources, continues its marketing efforts to potential customers in the anti-counterfeiting and anti-diversion marketplace and to prospective licensees in the entertainment and toy products market. There can be no assurances that the limited resources Registrant can dedicate to its marketing activities will result in significant additional revenues in the future.

Major Customers

During 2014, Registrant made sales or obtained revenues equal to 10% or more of Registrant's 2014 total revenues from two non-affiliated customers who individually accounted for approximately 47% and 19%, respectively, of 2014 revenues of the Company. During 2013, Registrant made sales or obtained revenues equal to 10% or more of Registrant's 2013 total revenues from two non-affiliated customers who individually accounted for approximately 49% and 15%, respectively, of 2013 revenues of the Company. During 2012, Registrant made sales or obtained revenues equal to 10% or more of Registrant's 2012 total revenues from five non-affiliated customers who individually accounted for approximately 20%, 19%, 16%, 14% and 10%, respectively, of 2012 revenues of the Company.

Manufacturing

Registrant has a small facility for the manufacture of its security inks. Except for this facility, Registrant does not maintain manufacturing facilities. Registrant presently subcontracts the manufacture of its applications (mainly printing and coating) to third party manufacturers and expects to continue such subcontracting. Because some of the processes that Nocopi uses in its applications are based on relatively common manufacturing technologies, there appears to be no technical or economic reason for Registrant to invest capital in its own manufacturing facilities.

4

Registrant has established a quality control program that currently entails laboratory analysis of developed technologies. When warranted, Registrant’s specially trained technicians travel to third party production facilities to install equipment, train client staff and monitor the manufacturing process.

Patents

Since its inception, Registrant has received various patents in the United States, Canada, South Africa, Saudi Arabia, Australia, New Zealand, Japan, France, the United Kingdom, Belgium, the Netherlands, Germany, Austria, Italy, Sweden, Switzerland, Luxembourg, and Liechtenstein. Registrant currently has obtained patent protection on substantially all of its security inks including the RUB & REVEAL system and the Rub-it & Color technology. Registrant’s latest patent is on a certain newly developed technology that Registrant believes has applications in the entertainment and toy products market.

When a new product or process is developed, the developer may seek to preserve for itself the economic benefit of the product or process by applying for a patent in each jurisdiction in which the product or process is likely to be exploited. Generally speaking, in order for a patent to be granted, the product or process must be new and be inventively different from what has been previously patented or otherwise known anywhere in the world. Patents generally have a duration of twenty years from the date of application depending on the jurisdiction concerned, after which time any person is free to exploit the product or process covered by a patent. A person who is the owner of a patent has, within the jurisdiction in which the patent is granted, the exclusive right, either directly or through licensees, to prevent any person from infringing on the patent.

The granting of a patent does not prevent a third party from seeking a judicial determination that the patent is invalid. Such challenges to the validity of a patent are not uncommon and are occasionally successful. There can be no assurance that a challenge will not be filed to one or more of Registrant's patents and that, if filed, such challenge(s) will not be successful.

In the United States and some other countries, patent applications are automatically published at a specified time after filing. Nocopi is required to pay annuities from time to time on patents to keep them in force; with this in mind, Nocopi makes an annual evaluation of its patents in order to determine which patents it will continue to maintain. In Europe, the territory of Contrast Technologies, formerly known as Euro-Nocopi, S.A. (“Contrast”), annuities for European patents are paid by Contrast.

Research and Development

Registrant has been involved in research and development since its inception. Although Registrant’s financial condition has forced it to reduce funding for research and development in recent years, it intends to continue its research and development activities in three areas, to the extent feasible. First, Registrant will seek to continue to refine its present family of products. Second, Registrant will seek to develop specific customer applications. Finally, Registrant will seek to expand its technology into new areas of implementation. There can be no assurances that Registrant will continue to have funds available to maintain its research and development activities at current or increased levels.

During the years ended December 31, 2014, 2013 and 2012, Registrant expended approximately $121,600, $111,900 and $109,400 respectively, on research and development.

Competition

In the area of document and product authentication and serialization, Registrant is aware of other covert and overt surface marking technologies requiring decoding implements or analytical methods to reveal certain information. These technologies are offered by other companies for the same anti-counterfeiting and anti-diversion purposes for which the Registrant markets its covert technologies. These include, among others, biological DNA codes, microtaggants, thermochromic, UV and infrared inks as well as encryption, 2D symbology and laser engraving. Nonetheless, Registrant believes its patented and proprietary technologies provide a unique and cost-effective solution to the problem of counterfeiting and gray marketing in the document and product authentication markets it has traditionally sought to exploit.

The entertainment and toy products markets include numerous potential competitors who have significantly greater financial resources and presence in these markets than Registrant.

5

The loss prevention market includes numerous potential competitors, including large-publicly traded companies such as NCR Corporation and regional paper converters, many of whom have greater financial resources and presence in these markets than Registrant.

Registrant currently has limited resources and competes with businesses that have greater financial resources than Registrant. There can be no assurance that businesses with greater resources than Registrant will not enter Registrant’s markets and compete successfully with Registrant.

Contrast Technologies (formerly Euro-Nocopi, S.A.)

Contrast Technologies, formerly known as Euro-Nocopi, S.A., is a former affiliate of Registrant which, since June 2003, has held a perpetual royalty-free license to exploit certain of Registrant’s technologies in Europe.

Employees

At August 15, 2015, Registrant had three full-time and two part-time employees.

Financial Information about Foreign and Domestic Operations

Registrant conducts its operations solely in the United States; however, it does have licensees and customers in Asia. These licensees and customers accounted for approximately 48% of Registrant’s gross revenues in 2014, approximately 51% in 2013 and approximately 15% in 2012. Certain information concerning Registrant's foreign and domestic operations is contained in Note 13 to Registrant's Financial Statements included elsewhere in this Annual Report on Form 10-K.

ITEM 1A. RISK FACTORS

Not required for a smaller reporting company.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

Registrant's corporate headquarters, research and ink production facilities are located at 480 Shoemaker Road, Suite 104, King of Prussia, Pennsylvania 19406. Its telephone number is (610) 834-9600. These premises consist of approximately 6,100 square feet of space in a multi-tenant building leased by the Registrant from an unaffiliated third party pursuant to a lease that commenced in January 2014 and expires in April 2019. Current monthly rent under this lease is $3,676; this amount escalates an amount of approximately three percent each year. In addition to rent, Registrant is responsible for its pro-rata share of the operating costs of the building. Registrant incurred leasehold improvement expenditures of approximately $19,700 through March 15, 2015. Registrant believes that additional leasehold improvement expenditures will not be significant. Registrant believes that this space will be adequate for its current needs and that additional space will be available as needed.

ITEM 3. LEGAL PROCEEDINGS

Registrant is not aware of any pending litigation (other than ordinary routine litigation incidental to its business where, in management's view, the amount involved is not material) to which Registrant is or may be a party, or to which any of its properties is or may be subject, nor is it aware of any pending or contemplated proceedings against it by any governmental authority. Registrant knows of no material legal proceedings pending or threatened, or judgments entered against, any director or officer of Registrant in his capacity as such.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

6

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Registrant's Common Stock is currently traded on the OTC Pink tier of the over-the-counter (“OTC”) market under the symbol "NNUP". Investors can find Real-Time quotes and market information on the Company on www.otcmarkets.com. The table below presents the range of high and low sales prices of Registrant's Common Stock by calendar quarter for the last three full fiscal years and for a recent date, as reported by OTC Markets Group Inc.

	High		Low
January 1, 2012 to March 31, 2012	$	.09	$	.05
April 1, 2012 to June 30, 2012	$	.09	$	.04
July 1, 2012 to September 30, 2012	$	.07	$	.02
October 1, 2012 to December 31, 2012	$	.03	$	.01
January 1, 2013 to March 31, 2013	$	.02	$	.01
April 1, 2013 to June 30, 2013	$	.04	$	.02
July 1, 2013 to September 30, 2013	$	.04	$	.03
October 1, 2013 to December 31, 2013	$	.03	$	.01
January 1, 2014 to March 31, 2014	$	.15	$	.01
April 1, 2014 to June 30, 2014	$	.02	$	.01
July 1, 2014 to September 30, 2014	$	.02	$	.01
October 1, 2014 to December 31, 2014	$	.02	$	.01
January 1, 2015 to March 31, 2015	$	.05	$	.01
April 1, 2015 to June 30, 2015	$	.03	$	.01
July 1, 2015 to August 15, 2015	$	.01	$	.01

As of August 15, 2015, 58,599,016 shares of Registrant's Common Stock were outstanding. The number of holders of record of Registrant's Common Stock was approximately 600. However, Registrant estimates that it has a significantly greater number of common stockholders because a number of shares of Registrant's Common Stock are held of record by broker-dealers for their customers in street name. In addition to the 58,599,016 shares of Common Stock which are outstanding, Registrant, at August 15, 2015, has reserved for the issuance of approximately 5,847,000 shares of its Common Stock which underlie warrants to purchase Common Stock of the Registrant and the conversion of convertible debentures and interest into Common Stock of the Registrant.

The Company did not pay dividends in 2014, 2013 or 2012 and does not anticipate paying any such dividends in the foreseeable future. Any determination to pay dividends in the future will be at the discretion of the Company’s Board of Directors and will be dependent upon the Company’s results of operations, financial condition, contractual restrictions and other factors deemed relevant by the Board of Directors.

Information required with respect to Equity Compensation Plans in this Item 5 is included in Item 12 on page 24 of this report on Form 10-K.

7

Recent Sales of Unregistered Securities

On February 10, 2012, the Company sold 104,167 shares of its Common Stock to an individual accredited investor (who was acquainted with a member of the Company’s Board of Directors) for $5,000, or $0.048 per share; on March 16, 2012, the Company sold 104,167 shares of its Common Stock to an individual accredited investor (who was acquainted with a member of the Company’s Board of Directors) for $5,000, or $0.048 per share. The shares of Common Stock were sold in private transactions exempt from registration pursuant to Section 4(2) of the Securities Act. Appropriate legends were affixed to the securities issued in these transactions. The recipient of securities in these transactions had adequate access, through employment or business relationships, to information about the Company. No underwriters were involved in these transactions or received any commissions or other compensation. Proceeds of the sale of Common Stock were used to fund the Company’s working capital requirements.

The Company, with the approval of its Board of Directors, entered into a Conversion Agreement effective March 16, 2012 with Herman M. Gerwitz, a Director, whereby $1,500 in principal of the unsecured loan owed by the Company to him, together with approximately $1,200 of accrued interest was converted into 44,216 shares of restricted Common Stock of the Company at $0.06 per share, the market price at the date of conversion. After giving effect to this conversion, the principal balance of the unsecured loan held by Mr. Gerwitz was reduced to $4,500.

On July 3, 2013, the Company issued a convertible debenture for $10,000 to an individual accredited investor, which included warrants to purchase 50,000 shares of the Company’s Common Stock at $0.02 per share. The warrant is exercisable two years after issuance and expires seven years after issuance. The debenture is due in two years. At option of the lender, the debenture and accrued interest is convertible in whole or part into Common Stock of the Company at $0.05 per share.

On July 16, 2013, the Company issued a convertible debenture for $20,000 to an individual accredited investor, which included warrants to purchase 100,000 shares of the Company’s Common Stock at $0.02 per share. The warrant is exercisable two years after issuance and expires seven years after issuance. The debenture is due in two years. At option of the lender, the debenture and accrued interest is convertible in whole or part into Common Stock of the Company at $0.05 per share.

On July 23, 2013, the Company issued a convertible debenture for $10,000 to an individual accredited investor, which included warrants to purchase 50,000 shares of the Company’s Common Stock at $0.02 per share. The warrant is exercisable two years after issuance and expires seven years after issuance. The debenture is due in two years. At option of the lender, the debenture and accrued interest is convertible in whole or part into Common Stock of the Company at $0.05 per share.

On July 24, 2013, the Company issued a convertible debenture for $20,000 to an individual accredited investor, which included warrants to purchase 100,000 shares of the Company’s Common Stock at $0.02 per share. The warrant is exercisable two years after issuance and expires seven years after issuance. The debenture is due in two years. At option of the lender, the debenture and accrued interest is convertible in whole or part into Common Stock of the Company at $0.05 per share.

On July 28, 2013, the Company issued a convertible debenture for $10,000 to an individual accredited investor, which included warrants to purchase 50,000 shares of the Company’s Common Stock at $0.02 per share. The warrant is exercisable two years after issuance and expires seven years after issuance. The debenture is due in two years. At option of the lender, the debenture and accrued interest is convertible in whole or part into Common Stock of the Company at $0.05 per share.

On July 31, 2013, the Company issued a convertible debenture for $10,000 to an individual accredited investor, which included warrants to purchase 50,000 shares of the Company’s Common Stock at $0.02 per share. The warrant is exercisable two years after issuance and expires seven years after issuance. The debenture is due in two years. At option of the lender, the debenture and accrued interest is convertible in whole or part into Common Stock of the Company at $0.05 per share.

On August 19, 2013, the Company issued a convertible debenture for $25,000 to an individual accredited investor, which included warrants to purchase 125,000 shares of the Company’s Common Stock at $0.02 per share. The warrant is exercisable two years after issuance and expires seven years after issuance. The debenture is due in two years. At option of the lender, the debenture and accrued interest is convertible in whole or part into Common Stock of the Company at $0.05 per share.

8

On July 8, 2014, the Company issued a convertible debenture for $22,940 to Henry C. Friedman, brother-in-law of Michael A. Feinstein, the Company’s Chairman of the Board, which included warrants to purchase 114,700 shares of the Company’s Common Stock at $0.02 per share. The warrant is exercisable two years after issuance and expires seven years after issuance. The debenture is due in two years. At option of the lender, the debenture and accrued interest is convertible in whole or part into Common Stock of the Company at $0.05 per share. The convertible debenture was issued in exchange for a $20,000 short-term loan along with accrued interest in a transaction approved by the Company’s Board of Directors.

On July 8, 2014, the Company issued a convertible debenture for $5,333 to Herman M. Gerwitz, a Director, which included warrants to purchase 26,665 shares of the Company’s Common Stock at $0.02 per share. The warrant is exercisable two years after issuance and expires seven years after issuance. The debenture is due in two years. At option of the lender, the debenture and accrued interest is convertible in whole or part into Common Stock of the Company at $0.05 per share. The convertible debenture was issued in exchange for a $4,500 short-term loan along with accrued interest in a transaction approved by the Company’s Board of Directors.

On July 22, 2014, the Company issued a convertible debenture for $5,000 to an individual accredited investor, which included warrants to purchase 25,000 shares of the Company’s Common Stock at $0.02 per share. The warrant is exercisable two years after issuance and expires seven years after issuance. The debenture is due in two years. At option of the lender, the debenture and accrued interest is convertible in whole or part into Common Stock of the Company at $0.05 per share.

The recipients of securities in these transactions had adequate access, through employment or business relationships, to information about the Company. No underwriters were involved in these transactions or received any commissions or other compensation. Proceeds of the sales of the convertible debentures were used to fund the Company’s working capital requirements.

Issuer Repurchases of Equity Securities

None.

ITEM 6. SELECTED FINANCIAL DATA

Not required for a smaller reporting company.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Information

This Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, regarding, among other things, anticipated improvements in operations, the Company’s plans, earnings, cash flow and expense estimates, strategies and prospects, both business and financial. All statements other than statements of current or historical fact contained in this report are forward-looking statements. The words “believe,’’ “expect,’’ “anticipate,’’ “should,’’ “plan,’’ “will,’’ “may,’’ “intend,’’ “estimate,’’ “potential,’’ “continue’’ and similar expressions, as they relate to the Company, are intended to identify forward-looking statements.

The Company has based these forward-looking statements largely on its current expectations and projections about future events, financial trends, market opportunities, competition, and the adequacy of the Company’s available cash resources, which the Company believes may affect its financial condition, results of operations, business strategy and financial needs. This Form 10-K also contains forward-looking statements attributed to third parties. All such statements can be affected by inaccurate assumptions, including, without limitation, with respect to risks, uncertainties, anticipated operating efficiencies, new business prospects and the rate of expense increases. In light of these risks, uncertainties and assumptions, the forward-looking statements in this report may not occur and actual results could differ materially from those anticipated or implied in the forward-looking statements. For these reasons, and because of the uncertainty relating to the current financial conditions in today’s economic environment and the potential reduction in demand for the Company’s products, you should not consider this information to be a guarantee by the Company or any other person that its objectives and plans will be achieved. When you consider these forward-looking statements, you should keep in mind the “Risk Factors” and other cautionary statements set forth in this Item 7 and elsewhere in this Form 10-K. The Company’s forward-looking statements speak only as of the date made. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the financial statements and related notes, and keeping in mind this cautionary statement regarding forward-looking information.

9

Introduction

This Comprehensive Form 10-K includes, in one comprehensive filing, the business and financial information for the Company for the fiscal years ended December 31, 2014, 2013 and 2012. Therefore, this Management’s Discussion and Analysis provides an analysis of the annual financial condition and results of operations for each of the years ended December 31, 2012, 2013 and 2014. The Financial Statements and Supplementary Data include summarized quarterly financial condition and results of operations for each of the quarters ended June 30 and September 30, 2012 and for each of the quarters ended March 31, June 30 and September 30, 2013 and 2014. This review should be read in conjunction with the Financial Statements and Supplementary Data, which are included in Item 8 of this Comprehensive Form 10-K.

Results of Operations

The Company’s revenues are derived from royalties paid by licensees of the Company’s technologies, fees for the provision of technical services to licensees and from the direct sale of (i) products incorporating the Company’s technologies, such as inks, security paper and pressure sensitive labels, and (ii) equipment used to support the application of the Company’s technologies, such as ink-jet printing systems. Royalties consist of guaranteed minimum royalties payable by the Company’s 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.

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

a)

License fees and royalties are recognized when the license term begins. Upon inception of the license term, revenue is recognized in a manner consistent with the nature of the transaction and the earnings process, which generally is ratably over the license term;

b)

Product sales are recognized upon shipment of products, when the price is fixed or determinable and collectability is reasonably assured; and

c)

Fees for technical services are recognized when (i) the service has been rendered; (ii) an arrangement exists; (iii) the price is fixed or determinable based upon a per diem or hourly rate; and (iv) collectability is reasonably assured.

The Company believes that, as fixed cost reductions beyond those it has achieved in recent years may not be achievable, its 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 the Company’s revenues and the mix among the various sources of revenue are subject to substantial fluctuation. The Company has 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 the Company’s total revenue, revenue mix and overall financial performance. Such changes may result from a 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 the Company agrees to revise such terms, revenues from the customer may be affected.

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Comparison of the Years ended December 31, 2014 and 2013

Revenues for 2014 were $922,800, an increase of approximately 23%, or $172,600, from $750,200 in 2013. Licenses, royalties and fees increased in 2014 by approximately 22%, or $63,700, to $358,800 from $295,100 in 2013. The increase in licenses, royalties and fees is due primarily to higher licensing revenues from a licensee in the entertainment and toy products market whose license commenced in 2012 and initial licensing revenues received from a new licensee in the entertainment and toy products market whose license commenced in 2013 offset in part by lower royalties and consulting revenues from certain licensees and consulting clients. There can be no assurances that the marketing and product development activities of the Company’s licensees or other businesses in the entertainment and toy products market will produce a significant increase in revenues for the Company, nor can the timing of any potential revenue increases be predicted, particularly given the uncertain economic conditions being experienced worldwide. During 2013, the technology covered under an expired license was licensed to an existing licensee in the entertainment and toy products market. As this licensee spent the years 2013 and 2014 in the development of its product offering utilizing this technology, no royalties were generated by this licensee for this technology during those two years. The Company believes the licensee will introduce products incorporating this technology in 2015. Product and other sales increased by $108,900, or approximately 24%, to $564,000 in 2014 from $455,100 in 2013. The higher level of ink sales in 2014 compared to 2013 is due primarily to higher ink requirements of the licensed third party printers used by the Company’s licensees in the entertainment and toy products market. Sales of ink to the licensed printers of its licensees in the entertainment and toy products market were approximately $65,100 higher in 2014 compared to 2013. Sales of security ink to the Company’s licensees in the retail receipt and document fraud market increased by approximately $44,000 in 2014 compared to 2013. The Company derived $699,400 or approximately 76% of total revenues, from licensees and their licensed printers in the entertainment and toy products market in 2014 compared to $552,800 or approximately 74% of total revenues, in 2013. The Company’s licensees in the entertainment and toy products market continue to develop new products for this market and improve their current offerings; however, their sales will be affected by marketplace reaction to the new and improved products, economic conditions that influence this market segment and the economy as a whole. Revenues that the Company derives from these licensees will be similarly affected. There can be no assurances that the marketing and product development activities of licensees in the entertainment and toy products market will produce increased revenues for the Company in future periods, nor can the timing of any potential revenue increases be predicted, particularly given the uncertain economic conditions currently being experienced worldwide.

Gross profit increased to $598,500, or approximately 65% of revenues, in 2014 from $464,700, or approximately 62% of revenues, in 2013. Licenses, royalties and fees have historically carried a higher gross profit than product sales, which generally consist of supplies or other manufactured products that incorporate the Company’s technologies or equipment used to support the application of its technologies. These items (except for inks which are manufactured by the 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. The higher gross profit in 2014 compared to 2013 reflects higher product sales along with a favorable mix of product sales and higher licenses, royalties and fees.

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 gross profit from licenses, royalties and fees as well as overall gross profit. Due primarily to the higher revenues in 2014 compared to 2013, the gross profit from licenses, royalties and fees increased to approximately 79% of revenues from licenses, royalties and fees in 2014 from approximately 77% in 2013.

Gross profit, expressed as a percentage of revenues, of product and other sales 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. As a result of both increased ink sales and favorable product mix, the gross profit from product and other sales increased to approximately 56% of revenues in 2014 compared to approximately 52% of revenues from product and other sales in 2013.

Research and development expenses were $121,600 in 2014 compared to $111,900 in 2013. The increase in 2014 compared to 2013 resulted primarily from higher employee salary and benefit expenses in 2014 compared to 2013.

Sales and marketing expenses of $194,500 in 2014 compared to $170,500 in 2013. The increase in 2014 compared to 2013 resulted primarily from higher commission expense in 2014 compared to 2013 resulting from a higher level of revenues in 2014 compared to 2013 and higher travel related expenses in 2014 compared to 2013.

General and administrative expenses increased to $253,400 in 2014 from $195,200 in 2013. The increase in 2014 compared 2013 is due primarily to higher employment and audit related expenses offset in part by lower legal expenses in 2014 compared to 2013. During 2014, the Company began the process of preparing the delinquent securities reports required by the SEC and therefore incurred higher officer compensation and audit expenses compared to the prior year.

11

Other income (expenses) in 2014 and 2013 included interest on funds borrowed under the Company’s promissory note with a bank, on unsecured loans from five individuals and on convertible notes issued in 2013 and 2014. Also included in other income (expenses) are financing costs incurred in 2013 related to warrants issued in conjunction with an unsecured loan received during that year. Other income (expenses) included, in 2013, the reversal of approximately $39,500 of accounts payable related to invoices received during 2009 from a professional services business that provided consulting services to the Company that the Company, with legal counsel, has determined to be no longer statutorily payable as the statute of limitations to bring a claim has expired.

The net income of $7,700 in 2014 compared to $10,300 in 2013 resulted primarily from a higher gross profit on a higher level of revenues in 2014 compared to 2013 offset in part by higher overhead expenses in 2014 compared 2013. Additionally, the Company did not record any income related to the reversal of accounts payable in 2014.

Management of the Company does not believe that inflation and changing prices have had a significant effect on its revenues and results of operations during the years ended December 31, 2014 and 2013.

Comparison of the Years ended December 31, 2013 and 2012

Revenues for 2013 were $750,200, an increase of approximately 18%, or $113,200, from $637,000 in 2012. Licenses, royalties and fees decreased in 2013 by approximately 29%, or $119,800, to $295,100 from $414,900 in 2012. During 2012, the Company’s multi-year license with a licensee in the entertainment and toy products market terminated and, as a result, no licensing fee revenue was received from this licensee in 2013. During 2013, the technology covered under this expired license was licensed to an existing licensee in the entertainment and toy products market. As this licensee spent the years 2013 and 2014 in the development of its product offering utilizing this technology, no royalties were generated by this licensee for this technology during those two years. The Company believes the licensee will introduce products incorporating this technology in 2015. In the first quarter of 2012, the Company completed multi-year license agreements and recorded initial royalty revenue from two new licensees in the entertainment and toy products market, one of whom acquired, in 2011, an operating division of a licensee that utilized a technology license with the Company and, with the Company’s consent, assigned the technology license to the purchaser. In January 2012, the Company negotiated a new six-year license, containing guaranteed royalties for 2012, with the purchaser of the license which permits this licensee exclusively to market a specific line of products incorporating the Company’s technologies through a specific distribution channel but permitting the Company to license the covered technologies to others for applications and sale through channels of distribution not available to this licensee under the terms of the new license. In 2013, the royalties generated by this licensee were significantly lower than the guaranteed royalties that were realized in 2012. In February 2012, the Company negotiated a license, expiring in 2015 and containing guaranteed minimum royalties over the term of the license, with another new licensee who also has a significant presence in the entertainment and toy products market that permits this licensee to exclusively market products with other characteristics that incorporate the Company’s technologies through a distinctly different channel of distribution. Royalties received in 2013 from this licensee were higher than the royalties received in 2012. These two licensees are well known and highly regarded participants in the entertainment and toy products market with significantly greater market recognition and retail distribution in this market than the licensee who previously held the license for these specific technologies. Additionally, the Company received lower royalty fees from the Company’s licensees in the retail receipt and document fraud market. Product and other sales increased by $233,000, or approximately 105%, to $455,100 in 2013 from $222,100 in 2012. The higher level of ink sales in 2013 compared to 2012 is due primarily to significantly higher ink requirements of the licensed third party printers used by the Company’s licensees in the entertainment and toy products market. Ink orders from the licensed printers of its licensees in the entertainment and toy products market were approximately $283,900 higher in 2013 compared to 2012. Sales of security ink to the Company’s licensees in the retail receipt and document fraud market declined by approximately $51,800 in 2013 compared to 2012. The Company derived $552,800 or approximately 74% of total revenues, from licensees and their licensed printers in the entertainment and toy products market in 2013 compared to $422,100 or approximately 66% of total revenues, in 2012. The Company’s licensees in the entertainment and toy products market continue to develop new products for this market and improve their current offerings; however, their sales will be affected by marketplace reaction to the new and improved products, economic conditions that influence this market segment and the economy as a whole. Revenues that the Company derives from these licensees will be similarly affected. There can be no assurances that the marketing and product development activities of licensees in the entertainment and toy products market will produce increased revenues for the Company in future periods, nor can the timing of any potential revenue increases be predicted.

12

Gross profit increased to $464,700, or approximately 62% of revenues, in 2013 from $435,000, or approximately 68% of revenues, in 2012. Licenses, royalties and fees have historically carried a higher gross profit than product and other sales, which generally consist of supplies or other manufactured products that incorporate the Company’s technologies or equipment used to support the application of its technologies. These items (except for inks which are manufactured by the 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. The higher gross profit in 2013 compared to 2012 reflects higher product and other sales along with a favorable mix of product and other sales offset in part by lower licenses, royalties and fees.

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 gross profit from licenses, royalties and fees as well as overall gross profit. Due primarily to the lower revenues in 2013 compared to 2012, the gross profit from licenses, royalties and fees decreased to approximately 77% of revenues from licenses, royalties and fees in 2013 from approximately 87% in 2012.

Gross profit, expressed as a percentage of revenues, of product and other sales 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. As a result of both increased ink sales and favorable product mix, the gross profit from product and other sales increased to approximately 52% of revenues in 2013 compared to approximately 33% of revenues from product and other sales in 2012.

Research and development expenses of $111,900 in 2013 were comparable to $109,400 in 2012.

Sales and marketing expenses of $170,500 in 2013 were comparable to $167,400 in 2012.

General and administrative expenses decreased to $195,200 in 2013 from $302,000 in 2012. The decrease in 2013 compared to 2012 is due primarily to lower salaries, professional fees and public company related expenses in 2013 compared to 2012 as officer compensation and audit expenses declined during 2013 compared to 2012 as the Company, during the period of adverse liquidity that began in 2012, did not prepare and file the annual and three quarterly reports required by the SEC during the year ended December 31, 2013.

Other income (expenses) includes, in 2013, the reversal of approximately $39,500 of accounts payable related to invoices received during 2009 from a professional services business that provided consulting services to the Company that the Company, with legal counsel, has determined to be no longer statutorily payable as the statute of limitations to bring a claim has expired and, in 2012, the reversal of approximately $7,800 of accounts payable related to invoices received during 2002 from a professional services business that provided legal services to the Company that the Company, with legal counsel, has determined to be no longer statutorily payable as the statute of limitations to bring a claim has expired. Additionally, other income (expenses) includes interest on funds borrowed under the Company’s promissory note with a bank, on unsecured loans from five individuals and, in 2013, on convertible debentures held by seven investors. Also included in other income (expenses) are financing costs related to warrants issued in 2013 and 2012 in conjunction with unsecured loans received during those periods.

The net income of $10,300 in 2013 compared to the net loss of $146,100 in 2012 was due primarily to higher gross profits on the higher level of revenues, lower compensation expense and professional fees and the reversal of accounts payable that are no longer statutorily payable offset in part by higher interest expense and financing cost.

Management of the Company does not believe that inflation and changing prices have had a significant effect on its revenues and results of operations during the years ended December 31, 2013 and December 31, 2012.

13

Comparison of the Years ended December 31, 2012 and 2011

Revenues for 2012 were $637,000, a decrease of approximately 11%, or $76,500, from $713,500 in 2011. Licenses, royalties and fees increased in 2012 by approximately 11%, or $41,700, to $414,900 from $373,200 in 2011. The increase in licenses, royalties and fees is due primarily to higher licensing revenues from a 2010 licensee in the entertainment and toy products market offset in part by lower royalties from the Company’s three US licensees in the retail receipt and document fraud market and lower royalties from a licensee in the entertainment and toy products market. In the first quarter of 2012, the Company completed multi-year license agreements and recorded initial royalty revenue from two new licensees in the entertainment and toy products market, one of whom acquired, in 2011, an operating division of a licensee that utilized a technology license with the Company and, with the Company’s consent, assigned the technology license to the purchaser. In January 2012, the Company negotiated a new six-year license, containing guaranteed royalties for 2012, with the purchaser of the license which permits this licensee exclusively to market a specific line of products incorporating the Company’s technologies through a specific distribution channel but permitting the Company to license the covered technologies to others for applications and sale through channels of distribution not available to this licensee under the terms of the new license. In February 2012, the Company negotiated a license, expiring in 2015 and containing guaranteed minimum royalties over the term of the license, with another new licensee who also has a significant presence in the entertainment and toy products market that permits this licensee to exclusively market products with other characteristics that incorporate the Company’s technologies through a distinctly different channel of distribution. These two licensees are well known and highly regarded participants in the entertainment and toy products market with significantly greater market recognition and retail distribution in this market than the licensee who previously held the license for these specific technologies. There can be no assurances that the marketing and product development activities of the Company’s licensees or other businesses in the entertainment and toy products market will produce a significant increase in revenues for the Company nor can the timing of any potential revenue increases be predicted.

Product and other sales decreased by $118,200, or approximately 35%, to $222,100 in 2012 from $340,300 in 2011. Sales of ink decreased in 2012 compared to 2011 due to lower ink shipments to the third party authorized printers used by the Company’s three major licensees in the entertainment and toy products market in 2012 compared to 2011 lower ink sales to the Company’s licensees in the retail receipt and document fraud market in 2012 compared to 2011. Additionally, in 2011, the operating division in South America of an international customer of the Company received a second shipment of entertainment and toy products that incorporate the Company’s technologies. There were no sales to this business in 2012. The Company derived revenues of approximately $422,100 from licensees, their authorized printers and its customers in the entertainment and toy products market in 2012 compared to revenues of approximately $429,600 in 2011.

Gross profit decreased to $435,000 in 2012, or approximately 68% of revenues, from $451,100 in 2011, or approximately 63% of revenues. Licenses, royalties and fees have historically carried a higher gross profit than product and other sales. Such other sales generally consist of supplies or other manufactured products which incorporate the Company’s technologies or equipment used to support the application of its technologies. These items (except for inks which are manufactured by the 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. The higher gross profit percentage in 2012 compared to 2011 results primarily from higher gross revenues from licenses, royalties and fees in 2012 compared to 2011.

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 licenses, royalties and fees as well as overall gross profit. Primarily due to the increase in revenues from licenses, royalties and fees in 2012 compared to the third quarter of 2011, gross profit from licenses, royalties and fees increased to approximately 87% of revenues from licenses, royalties and fees in 2012 from approximately 84% in 2011.

The gross profit, expressed as a percentage of revenues, of product and other sales 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. In 2012, the gross profit, expressed as a percentage of revenues, decreased to approximately 33% of revenues from product and other sales compared to approximately 40% of revenues from product and other sales in 2011 due primarily to lower sales of these products in 2012 compared to 2011.

Research and development expenses of $109,400 in 2012 were comparable to $113,700 in 2011.

Sales and marketing expenses of $167,400 in 2012 were comparable to $167,300 in 2011.

14

General and administrative expenses declined to $302,000 in 2012 from $353,800 in 2011. The decrease in 2012 compared to 2011 is due primarily to lower compensation expense incurred in 2012 as required SEC reports for the quarters ended June 30 and September 30 2012 were not filed a result of the Company’s adverse liquidity that began in the second half of 2012 as well as lower professional fees, insurance costs and patent related expenses in 2012 compared to 2011.

Other income (expenses) included, in 2012, the reversal of approximately $7,800 of accounts payable related to invoices received during 2002 from a professional services business that provided legal services to the Company that the Company, with legal counsel, has determined to be no longer statutorily payable as the statute of limitations to bring a claim has expired. Other income (expenses) included, in 2011, (i) a license transfer fee of $60,000, net of commission expense of $6,000, received in connection with the sale by a licensee in the entertainment and toy products market of an operating division that included, with the Company’s consent, assignment of the technology license with the Company to another business in the entertainment and toy products market during the third quarter of 2011; (ii) the reversal of approximately $74,700 of accounts payable and related accrued expenses related to invoices received during 2001 from a professional services business that provided legal services to the Company that the Company, with legal counsel, has determined to be no longer statutorily payable as the statute of limitations to bring a claim has expired; and (iii) the reversal of a total of $38,000 of accrued expenses related to (x) potential reimbursement of expenses to members of a group who in 1999 succeeded in electing four members to the Company’s Board of Directors and (y) the purchase of equipment in 2007 for which an invoice was never submitted by the supplier that the Company, with legal counsel, has determined to be no longer statutorily payable as the applicable statutes of limitations to bring such claims have expired. Additionally, other income (expenses) includes interest on funds borrowed under the Company’s promissory note with a bank and on unsecured loans from six individuals. Also included in other income (expenses) are financing costs related to warrants issued in 2012 and 2011 primarily in conjunction with unsecured loans received during those periods.

The net loss of $146,100 in 2012 compared to the net loss of $27,300 in 2011 resulted in part from lower overhead expenses offset in part by a lower gross profit on a lower level of revenues in those years. Additionally, there was no technology license transfer fee in 2012 as there was in 2011. In 2011, there were reversals of $112,700 of accounts payable and accrued expenses that were no longer statutorily payable compared to a reversal of accounts payable of $7,800 in 2012.

Management of the Company does not believe that inflation and changing prices have had a significant effect on its revenues and results of operations during the years ended December 31, 2012 and December 31, 2011.

Plan of Operation, Liquidity and Capital Resources

The Company’s cash was $28,000 at December 31, 2014, $52,900 at December 31, 2013 and $20,600 at December 31, 2012. During 2014, the Company’s had positive cash flow of $14,500 from its operating activities, used $20,600 for purchases of leasehold improvements and capital equipment, received $5,000 from the sale of convertible debentures, repaid $5,000 to two individual lenders and repaid the $18,800 remaining balance of its promissory note with a bank. During 2013, the Company used $48,900 in its operating activities, purchased $1,800 of capital equipment, received $105,000 from the sale of convertible debentures, borrowed $3,000 from an individual and repaid $25,000 of its promissory note with a bank. During 2012, The Company used $34,300 in its operating activities, borrowed $49,500 from two individuals and repaid $2,500 of the amounts borrowed, received $10,000 from the sale of 208,334 shares if its Common Stock and repaid $25,000 of its promissory note with a bank.

In 2014 and 2013, the Company’s revenues increased primarily as a result of sales of ink to the licensed printers of the Company’s licensees in the entertainment and toy products market and license fees generated from a license signed in 2012 with a licensee in the entertainment and toy products market. Primarily as a result of higher revenues, favorable product mix, lower compensation expense and professional fees and the reversal of certain liabilities the Company recorded net income of $7,700 and $10,300 in the years ended December 31, 2014 and 2013, respectively. The Company had positive operating cash flow of $14,500 in the year ended December 31, 2014 and negative operating cash flow of $48,900 in the year ended December 31, 2013. At December 31, 2014, the Company had negative working capital of $424,500 and a stockholders’ deficiency of $438,200. At December 31, 2013, the Company had negative working capital of $350,600 and stockholders’ deficiency of $447,800. For the full year of 2012, the Company had a net loss of $146,100 and had negative operating cash flow of $34,300 during the year. At December 31, 2012, the Company had negative working capital of $467,200 and stockholders’ deficiency of $466,600.

15

During 2010, the Company accepted an offer by a bank to repay the then outstanding balance of $100,000 under its line of credit, received in 2008, with that bank in forty-eight equal monthly installments, plus interest, beginning in October 2010. The remaining outstanding balance was repaid in July 2014. During 2012 and 2013, the Company received unsecured loans totaling $52,500 from two individuals. Through December 31, 2014, the Company repaid $7,500 of $96,500 in unsecured loans borrowed from five individuals, converted $1,500 of the principal of the unsecured loans and approximately $1,200 of accrued interest into 44,216 shares of its common stock and exchanged $24,500 of the principal of the unsecured loans and approximately $3,800 of accrued interest for convertible debentures totaling approximately $28,300. In 2014 and 2013, the Company raised $110,000 through the sale of convertible debentures to eight investors. Additionally, in 2012, the Company raised $10,000 through the sale of 208,334 shares of its common stock. These borrowings and sales of common stock have allowed the Company to remain in operation through the current date.

Management of the Company believes that it may need to obtain additional capital in the future to support the working capital requirements associated with its existing revenue base and to fund potential operating losses that it believes may occur as the state of the worldwide economy remains uncertain. There can be no assurances that the Company will be successful in obtaining sufficient additional capital, or if it does, that the additional capital will enable the Company operate profitably in the future and develop new revenue sources to have a material positive effect on the Company’s operations and cash flow. The Company believes that without additional investment, it may be forced to cease operations at an undetermined time in the future.

There can be no assurances that the Company will be successful in obtaining additional investment. There can be no assurances that revenues in future periods will be sustained at levels that will allow it to achieve and maintain positive cash flow.

The Company continues to maintain a cost containment program including curtailment, where possible, of discretionary research and development and sales and marketing expenses.

The Company’s plan of operation for the twelve months beginning with the date of this annual report consists of concentrating available human and financial resources to continue to capitalize on the specific business relationships the Company has developed in the entertainment and toy products market including two licensees with significant presences in the entertainment and toy products market who have been marketing products incorporating the Company’s technologies since 2012. These two licensees in the entertainment and toy products market are well known and highly regarded participants in this market with very significant market recognition and retail distribution in this market. In 2013, the Company licensed a technology that had previously been licensed to a separate business to one of these two businesses in the entertainment and toy products market and believes that the initial introduction of products incorporating the Company’s technologies will occur in 2015. The Company has three additional licensees who currently market products in three specific segments of the entertainment and toy products market. The Company plans to continue developing applications for these licensees while expanding its licensee base in the entertainment and toy market. Additionally, the Company believes that revenue growth in the retail loss prevention market can be achieved through increased security ink sales to its licensees in this market. The Company will continue to adjust its production and technical staff as necessary. The Company will also, subject to available financial resources, invest in capital equipment needed to support potential growth in ink production requirements beyond its current capacity. Additionally, the Company will pursue opportunities to market its current technologies in specific security and non-security markets. There can be no assurances that these efforts will enable the Company to generate additional revenues and positive cash flow.

The Company has received and continues to seek additional capital, in the form of debt, equity or both, to support its working capital requirements. There can be no assurances that the Company will be successful in raising additional capital, or that such additional capital, if obtained, will enable the Company to generate additional revenues and positive cash flow.

The Company generates a significant portion of its total revenues from licensees in the entertainment and toy products market. These licensees generally sell their products through retail outlets. During the year, such sales may be adversely affected by changes in consumer spending that may occur as a result of an uncertain economic environment. As a result, the Company’s revenues, results of operations and liquidity may be negatively impacted as they were in previous years.

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Risk Factors

The Company’s operating results, financial condition and stock price are subject to certain risks, some of which are beyond its control. These risks could cause the Company’s actual operating and financial results to differ materially from those expressed in its forward looking statements, including the risks described below and the risks identified in other documents which are filed and furnished with the SEC:

Limited Interim Historical Information. This comprehensive annual report on Form 10-K contains summarized quarterly financial information for each of the quarters ended June 30 and September 30, 2012 and for each of the quarters ended March 31, June 30 and September 30, 2013 and 2014. As the complete periodic filings for those periods have not been filed, certain financial information, disclosures and discussions normally contained in a Form 10-Q are not included in this Form 10-K. The omission of the information that would have been contained in these periodic filings leaves current and prospective investors, customers, employees and others without this source of information about the Company’s business achievements and prospects and may negatively impact the Company’s business opportunities and its ability to raise capital. There can be no assurances that the Company will be able to remain current with its required SEC filing obligations in the future.

Access to Capital. The Company anticipates that it may need to raise capital in the future to fund its historical and new business operations. Negative or uncertain global economic conditions could make it more difficult for the Company to raise capital. If the Company is unable to secure capital, if needed, in the future, in the form of debt, equity or both, it may be forced to cease operations. There can be no assurances that, if required, the Company will be successful in obtaining additional investment in sufficient amounts to fund its ongoing business operations.

Dependency on Major Customers. The Company is dependent on its licensees to develop new products and markets that will generate increases in its licensing and product revenues. The inability of the Company’s licensees to maintain at least current levels of sales of products utilizing the Company’s technologies could adversely affect the Company’s operating results and cash flow. To the extent that the Company’s licensees are adversely affected by negative economic conditions, the Company’s revenues may also be negatively impacted. The Company has derived a significant percentage of its revenues through licensing relationships with two major customers. Revenues obtained directly from these customers and indirectly, through the customers’ third party licensed printer, equaled approximately 68% of the Company’s revenues in 2014. The Company also has, from time to time, substantial receivables from these businesses. The Company has a license agreement containing guaranteed minimum royalties expiring in 2019 with one of these two licensees and a license with the second that expires in 2017. Products incorporating the Company’s technologies that are sold by these two licensees have certain dissimilar characteristics and are marketed generally through distinctly different channels of distribution. These two licensees are well known and highly regarded participants in the entertainment and toy products market. The agreements with both licensees contain renewal options but there can be no assurances that the licenses will continue in force at the same or more favorable terms beyond their current termination dates, nor can there be any assurances that the relationships with these two new licensees will generate increased revenues for the Company in the future.

Possible Inability to Develop New Business. While the Company raised cash through additional capital investment, sales of convertible debentures and loans from individuals in 2012, 2013 and 2014, it limited increases in its operating expenses, reduced its operating expenses when possible and deferred payment of certain obligations to employees and service providers. Management of the Company believes that any significant improvement in the Company’s cash flow must result from increases in revenues from traditional sources and from new revenue sources. The Company’s ability to develop new revenues may depend on the extent of both its marketing activities and its research and development activities, both of which are limited. There are no assurances that the resources that the Company can devote to marketing and to research and development will be sufficient to increase its revenues to levels that will enable it to return to and maintain positive operating cash flow in the future.

Inability to Obtain Raw Materials and Products for Resale. The Company’s adverse financial condition has required it from time to time to significantly defer payments due to (i) vendors who supply raw materials and other components of its security inks, (ii) providers of professional and other services and (iii) certain employees to whom salary and sales commissions are owed. As a result, the Company is required to pay cash in advance of shipment to certain of its suppliers. The inability to obtain materials on a timely basis and the possibility that certain vendors may permanently discontinue supplying the Company with needed products and services may result in delayed shipments to customers and further impact the Company’s ability to service its customers, thereby adversely affecting the Company’s relationships with its customers and licensees. There can be no assurances that the Company will be able to maintain its vendor relationships in an acceptable manner.

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Uneven Pattern of Quarterly and Annual Operating Results. The Company’s revenues, which are derived primarily from licensing and sales of products incorporating its technologies as well as royalties from these products, are difficult to forecast; such forecasting difficulty is due to, among other reasons, the long sales cycle of the Company’s technologies, the potential for customer delay or deferral of implementation of the Company’s technologies, the size and timing of inception of individual license agreements, the success of the Company’s licensees and strategic partners in exploiting the market for the licensed products, modifications of customer budgets, and uneven patterns of royalty revenue and product orders. As the Company’s revenue base is not substantial, delays in the finalization of license contracts, the implementation of the technology to initiate the revenue stream and the ordering decisions of customers can have a material adverse effect on the Company’s quarterly and annual revenue expectations. As the Company’s operating expenses are substantially fixed, income expectations will be subject to a similar adverse outcome. As licensees for the entertainment and toy products markets are added, the predictability of the Company’s revenue stream may be further impacted.

Volatility of Stock Price. The market price for the Company’s common stock has historically experienced significant fluctuations and may continue to do so. With the exception of 2007, 2013 and 2014 from its inception, the Company has operated at a loss and has not produced revenue levels traditionally associated with publicly-traded companies. The Company’s common stock is not listed on a national or regional securities exchange and, consequently, the Company receives limited publicity regarding its business achievements and prospects. Additionally, securities analysts and traders do not extensively follow the Company’s stock and its stock is thinly traded. The Company’s market price may be affected by announcements of new relationships or modifications to existing relationships. The stock prices of many developing public companies, particularly those with small capitalizations, have experienced wide fluctuations not necessarily related to operating performance. Such fluctuations may adversely affect the market price of the Company’s common stock.

Intellectual Property. The Company relies on a combination of protections provided under applicable international patent, trademark and trade secret laws. The Company also relies on confidentiality, non-analysis and licensing agreements to establish and protect its rights in its proprietary technologies. While the Company actively attempts to protect these rights, its technologies may be compromised through reverse engineering or other means. In addition, the Company’s ability to enforce its intellectual property rights through appropriate legal action has been and will continue to be limited by its adverse liquidity. There can be no assurances that the Company will be able to protect the basis of its technologies from discovery by unauthorized third parties or to preclude unauthorized persons from conducting activities that infringe on the Company’s rights. The Company’s adverse liquidity situation also impacts its ability to obtain patent protection on its intellectual property and to maintain protection on previously issued patents. There can be no assurances that the Company will be able to continue to prosecute new patents and maintain issued patents. As a result, the Company’s customer and licensee relationships could be adversely affected, and the value of the Company’s technologies and intellectual property (including their value upon liquidation) could be substantially diminished.

Economic Conditions. The Company’s revenue is susceptible to changes in general economic conditions. The Company’s sales, liquidity and overall results of operations may be negatively affected by decreasing consumer confidence, slowdowns in consumer spending or other downturns in the U.S. economy as a whole or in any geographic markets from which the Company derives revenue. In addition, these factors may result in decreased customer and licensee demand for the Company’s products and may negatively impact the Company’s ability to develop new customers and licensees. Due to uncertainties surrounding the worldwide economy, the Company is unable to predict the effect of such conditions on its customers and licensees. Consequently, the Company cannot predict the scope or magnitude of the negative effect resulting from ongoing global financial uncertainties or economic slowdowns.

Recently Adopted Accounting Pronouncements

As of December 31, 2014 and for the year then ended, there were no recently adopted accounting pronouncements that had a material effect on the Company’s financial statements.

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Recently Issued Accounting Pronouncements Not Yet Adopted

In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements – Going Concern (Subtopic 205-40), Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. The amendments in this Update provide guidance about management’s responsibility to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued and to provide related footnote disclosures. Substantial doubt about an entity’s ability to continue as a going concern exists when relevant conditions and events, considered in the aggregate, indicate that it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued. The amendments in this Update are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. Management is assessing the impact of the adoption to the financial statements.

Off-Balance Sheet Arrangements

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

ITEM 7A. QUANTITIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not required for a smaller reporting company.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

For information required with respect to this Item 8, see index to Financial Statements and Schedules on page F-1 of this report on Form 10-K.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Not applicable.

ITEM 9A. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

The Company’s disclosure controls and procedures are designed to provide reasonable assurance that material information required to be included in its periodic SEC reports is recorded, processed, summarized and reported within the time periods specified in the relevant SEC rules and forms. The Company has carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Company’s disclosure controls and procedures pursuant to Exchange Act Rule 13a-15. Based upon that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded, as of the end of the period covered by this report, that the Company’s disclosure controls and procedures are effective.

Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934. Internal control over financial reporting is a process to provide reasonable assurance regarding the reliability of financial reporting and preparation of financial statements for external purposes in accordance with U.S. GAAP. Internal control over financial reporting includes maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company, provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, that receipts and expenditures of the Company are being made only with management authorization and provide reasonable assurance that unauthorized acquisition, use or disposition of Company assets that could have a material effect on the Company’s financial statements would be prevented or detected on a timely basis. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements in the Company’s financial statements on a timely basis.

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Management assessed the effectiveness of the Company’s internal control over financial reporting based on the Committee of Sponsoring Organizations of the Treadway Commission in “Internal Control-Integrated Framework (1992).” Based on this assessment, management believes that, as of December 31, 2014, the Company’s internal control over financial reporting was effective.

This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. The attestation report requirement for non-accelerated filers was permanently removed from the Sarbanes-Oxley Act by Section 989C of the Dodd-Frank Act as adopted by the SEC.

Changes in Internal Control over Financial Reporting

There have been no changes in the Company’s internal controls over financial reporting during the fourth quarter of 2014 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

ITEM 9B. OTHER INFORMATION

None.

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PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The directors, officers and named executive of the Company, their ages, present positions with the Company, and a summary of their business experience are set forth below.

Michael A. Feinstein, M.D., 68, Chairman of the Board of Directors since December 1999 and Nocopi’s Chief Executive Officer since February 2000, has been a practicing physician in Philadelphia for more than thirty years, serving for more than twenty-five years as the President of a group medical practice which includes three physicians. He is a Fellow of the American College of Obstetrics and Gynecology and of the American Board of Obstetrics and Gynecology. He received his B.A. from LaSalle University and his M.D. from Jefferson Medical College. He has represented Nocopi in numerous licensing negotiations, governmental meetings and capital raises. The Board of Directors believes that Dr. Feinstein’s considerable personal experience as a business owner and investor in publicly traded businesses makes him well suited to serve as a member of Nocopi Technologies’ Board of Directors.

Herman M. Gerwitz, CPA, 61, a director since May 2005, is the Treasurer of Keystone Property Group. Mr. Gerwitz has been with Keystone full time since 1998 and has been responsible for all the financial matters of a Real Estate Development Company that has grown to over 3 million square feet of commercial real estate and a $100,000,000 Real Estate Fund. Prior to joining Keystone, Mr. Gerwitz has spent 20 years as a partner in a public accounting firm. He has received a BBA from Temple University with master’s coursework at Widener University. He has been a member of both the Pennsylvania and American Institutes of Certified Public Accountants since 1983. The Board of Directors believes that Mr. Gerwitz’ many years as a Certified Public Accountant and his subsequent business management experience make him well suited to serve as a member of Nocopi Technologies’ Board of Directors and to serve on its Audit Committee.

Richard Levitt, 58, a director since December 1999, has been engaged in the computer and services segment of the computer industry since 1981. Mr. Levitt is currently a Senior Account Executive for Dell Computer in Pittsburgh, PA. He is in the Large Enterprise Group and is responsible for developing major accounts in Western Pennsylvania. Mr. Levitt has been with Dell since November 2005. In 2009, Mr. Levitt was awarded the “Circle of Excellence” award by Dell which is Dell’s highest corporate award given to less than 1% of its sales and support employees. In addition, he was awarded over the past three years the “Top Team Performer” and “Regional Top Performer” awards. In 1995, he participated in the founding of XiTech Corporation, a Pittsburgh, Pennsylvania-based provider of computing and computer networking hardware and network design and implementation services which in five years grew to over 100 employees and $50 million in annual sales. Since founding XiTech, Mr. Levitt served as one of its corporate principals, as a Network Consultant and as the Manager of its Network Sales Force. Mr. Levitt left XiTech in 2004. Before joining XiTech, Mr. Levitt served as a network sales executive for Digital Equipment Corporation from 1988 to 1994 and as a network consultant for TriLogic Corporation during 1994 and 1995. Mr. Levitt holds a B.S. in Marketing from Kent State University. The Board of Directors believes that Mr. Levitt’s sales and marketing experience in technology-based businesses, including start-ups and smaller businesses, makes him well suited to serve as a member of Nocopi Technologies’ Board of Directors.

Philip B. White, 77, has been a director since August 2006. Mr. White is currently an international consultant in the private sector providing regulatory and industry standards advice to international companies regulated by the Food and Drug Administration, the Consumer Product Safety Commission, and the Environmental Protection Agency. He also served as a Technical Advisor and Regulatory Liaison to Nocopi from 2002 to 2005. Before establishing his own global consulting practice in 2000, Mr. White was, from 1994 to 2000, Director of Medical Device Consulting at the international firm of AAC Consulting Group (now Kendle), Rockville, MD. In 1994, Mr. White retired from a 33-year career with the U.S. Food and Drug Administration. His last FDA position was Director of the Office of Standards and Regulations in the Center for Devices and Radiological Health. Previous FDA positions included Regional Director of FDA’s enforcement activities in the Southwestern Region, Deputy FDA Assistant Commissioner for Program Coordination, and Supervisory Food and Drug Inspector. He has served on the Board of Directors of the American National Standards Institute, the Association for Advancement of Medical Instrumentation, and the Regulatory Affairs Professionals Society. He is a 1961 graduate of Wilkes University, Wilkes-Barre, PA with a B.A. Degree in Biology. He also did graduate studies in 1967 and 1968 specializing in the Federal Food Drug and Cosmetic Act at the New York University Graduate Law School in New York City. The Board of Directors believes that Mr. White’s considerable experience with consumer product safety and regulatory matters gained from his many years at the Food and Drug Administration makes him well suited to serve as a member of Nocopi Technologies’ Board of Directors.

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Terry W. Stovold, 51, Chief Operating Officer, has been employed by Nocopi for more than twenty-five years. Mr. Stovold previously served as the Company’s Director of Operations and Sales. Mr. Stovold received a Forestry Technician College degree from Algonquin College and studied business at McGill University. He holds numerous U.S. and foreign patents in the fields of printing technology and printing inks.

Rudolph A. Lutterschmidt, 68, has been Vice President and Chief Financial Officer of the Company for more than five years, serving in this capacity on a part-time basis since January 2000. Mr. Lutterschmidt has been a consultant to several southeast Pennsylvania businesses. He is a graduate of Syracuse University.

The terms of the current directors will expire at the 2015 annual meeting of stockholders of the Company.

Corporate Governance

The Board of Directors has determined that all of the directors, with the exception of Michael A. Feinstein, M.D., who serves as Chief Executive Officer, are independent as that term is defined by the SEC. The Company did not make any material changes to the procedures by which stockholders may recommend nominees to the Company’s Board of Directors during 2014.

Audit Committee Financial Expert

The Company has established a standing audit committee in accordance with Section 3(a) (58) (A) of the Securities Exchange Act of 1934 that makes recommendations to the Company’s Board of Directors regarding the selection of an independent registered public accounting firm, reviews the results and scope of the Company’s audits and other accounting-related services and reviews and evaluates the Company’s internal control functions. The audit committee does not presently have a written charter. The audit committee is comprised of Michael A. Feinstein, M.D., its Chairman of the Board, and Herman M. Gerwitz, CPA. The Board of Directors has determined that Mr. Gerwitz is an “audit committee financial expert” as currently defined under the SEC rules implementing Section 407 of the Sarbanes Oxley Act of 2002 and that Mr. Gerwitz meets the criteria for independence as defined by the SEC.

Code of Ethics

The Company has adopted a Code of Ethics that applies to its Principal Executive Officer, Principal Financial Officer, Principal Accounting Officer and persons performing similar functions. A copy of the Company’s Code of Ethics is incorporated by reference to Exhibit 14.1 of this report on Form 10-K.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires the Company’s executive officers and directors and any persons who beneficially own more than 10% of its Common Stock (collectively, “Reporting Persons”) to file reports of ownership and changes in ownership with the SEC. Reporting Persons are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms they file.

Based solely on the Company’s review of the copies of any Section 16(a) forms received by it, the Company believes that with respect to the fiscal year ended December 31, 2014, all Reporting Persons complied with all applicable filing requirements.

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ITEM 11. EXECUTIVE COMPENSATION

The following table sets forth information concerning compensation for 2014, 2013 and 2012 earned by Michael A. Feinstein, M.D., the Company’s Chairman who has served since February 2000 as the Company’s Chief Executive Officer and Terry W. Stovold, the Company’s Chief Operating Officer, the only employee to receive compensation in 2014 greater than $100,000 (the “Named Executive”).

SUMMARY COMPENSATION TABLE

									Nonequity	Nonqualified
Name									incentive	deferred
and							Stock	Option	plan	compensation	All other
principal			Salary		Bonus		awards	awards	compensation	earnings	compensation			Total
position	Year		($)		($)		($)	($)	($)	($)	($)			($)
(a)	(b)		(c)		(d)		(e)	(f)	(g)	(h)	(i)			(j)
Michael A. Feinstein, M.D.		2014		85,000											85,000
Chairman, President and		2013		85,000											85,000
Chief Executive Officer		2012		85,000											85,000
Terry W. Stovold		2014		75,000		1,000						55,200	(1)		131,200
Chief Operating Officer		2013		75,000		1,000						44,700	(1)		120,700
		2012		75,000								41,200	(1)		116,200

———————

(1) Sales commissions

Dr. Feinstein entered into a written employment agreement effective June 1, 2008 under which he serves as President and Chief Executive Officer of the Company for an initial term of three years with successive one year renewal terms. In accordance with the terms of the employment agreement, the employment agreement renewed on December 1, 2014 for a period of one year effective June 1, 2015. The employment agreement provides for an annual base salary of $85,000 which may be increased annually at the discretion of the Board of Directors and an annual performance bonus determined by the Board of Directors. In certain situations, including a change in control, Dr. Feinstein may be eligible to receive his base salary for a period of up to twelve months following the termination of employment. The employment agreement prohibits him from competing with the Company during the term of this agreement and for two years after the termination of his employment with the Company. During 2014, 2013 and 2012, Dr. Feinstein deferred approximately $85,000, $71,800 and $45,600, respectively, of salary owed to him for those years. At December 31, 2014, Dr. Feinstein was owed a total of approximately $215,400 of salary deferred by him.

Mr. Stovold entered into a written employment agreement effective April 1, 2011 under which he served as the Company’s Director of Operations and Sales for an initial term of three years with successive one year renewal terms. The employment agreement provides for a base salary set by the Company’s Board of Directors, which is currently set at $75,000 per year beginning on January 1, 2012, along with a commission of seven percent on sales generated by his efforts. In certain situations, including a change in control, Mr. Stovold may be eligible to receive his base salary for a period of up to six months following the termination of employment. The employment agreement prohibits him from competing with the Company during the term of the agreement and for one year after the termination of his employment with the Company. At December 31, 2014, Mr. Stovold was owed approximately $48,400 of commissions related to sales realized in 2014 through his efforts. In July 2014, the Company’s Board of Directors appointed Mr. Stovold Chief Operating Officer of the Company. There were no changes to the employment agreement with Mr. Stovold resulting from this appointment.

There are no outstanding stock or option awards at fiscal year end.

If Dr. Feinstein’s employment is terminated as a result of a change in control, Dr. Feinstein is entitled to receive severance payments equal to twelve months of his then base salary. If Mr. Stovold’s employment is terminated as a result of a change in control, Mr. Stovold is entitled to receive severance payments not to exceed six months of his then base salary.

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Director Compensation

The following table summarizes compensation earned by the Company’s non-executive directors for the year ended December 31, 2014. All directors have been and will be reimbursed for reasonable expenses incurred in connection with attendance at meetings of the Board of Directors or other activities undertaken by them on behalf of the Company.

DIRECTOR COMPENSATION

							Nonequity		Nonqualified
	Fees						incentive		deferred
	earned or		Stock		Option		plan		compensation		All other
	paid in cash		awards		awards		compensation		earnings		compensation		Total
Name	($)		($)		($)		($)		($)		($)		($)
(a)	(b)		(c)		(d)		(e)		(f)		(g)		(h)
Herman M. Gerwitz (1)		0		0		0		0		0		0		0
Richard Levitt		0		0		0		0		0		0		0
Philip B. White		0		0		0		0		0		0		0

———————

(1) Mr. Gerwitz held 3,000 exercisable warrants at December 31, 2014.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table sets forth, as of August 15, 2015, the stock ownership of (1) each person or group known by the Registrant to beneficially own 5% or more of Registrant’s Common Stock and (2) each director and Named Executive (as set forth under the heading “Executive Compensation”) individually, and (3) all directors and executive officers of the Company as a group. To the Company’s knowledge, except as set forth in the footnotes to this table and subject to applicable community property laws, each person named in the table below has sole voting and investment power with respect to the shares set forth opposite such person’s name. Except as otherwise indicated, the address of each of the persons in the table below is c/o Nocopi Technologies, Inc., 480 Shoemaker Road, Suite 104, King of Prussia, Pennsylvania, 19406.

Common Stock

	Number
	of Shares		Percentage
	Beneficially		of
Name of Beneficial Owner	Owned		Class (1)
5% Stockholders
Philip N. Hudson P.O. Box 160892 San Antonio, TX 78280-3092 (2)		5,357,000		9.1	%
Westvaco Brand Security, Inc. One High Ridge Park Stamford, CT 06905 (3)		3,917,030		6.7%
Ross. L Campbell 675 Lewis Lane Ambler, PA 19002 (4)		3,264,457		5.6	%
Directors, Officers and Named Executive
Michael A Feinstein, M.D. (5)		3,109,881		5.3	%
Herman M. Gerwitz (6)		376,549		*
Richard Levitt		299,000		*
Philip B. White		231,745		*
Terry W. Stovold		0		*
All Executive Officers and Directors as a Group (6 individuals) (7) .		4,017,775		6.9	%

———————

* Less than 1.0%.

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(1)	Where the Number of Shares Beneficially Owned (reported in the preceding column) includes shares which may be purchased upon the exercise of outstanding stock options and warrants which are or within sixty days will become exercisable (“presently exercisable options”) the percentage of class reported in this column has been calculated assuming the exercise of such presently exercisable options.
(2)	As reflected in a Schedule 13D dated August 11, 2008 filed on behalf of Philip N. Hudson and subsequent open market purchases as reported to the Company by Mr. Hudson.
(3)	As reflected in a Schedule 13D dated March 14, 2001 filed on behalf of Westvaco Brand Security, Inc.
(4)	As reflected in a Schedule 13D dated April 4, 2005 filed on behalf of Ross L. Campbell.
(5)	Includes 734,000 shares held by a pension plan of which Dr. Feinstein is a trustee and 100,000 shares held in an IRA.
(6)	Includes 50,000 shares held by a trust on behalf of a child of Mr. Gerwitz, 72,500 shares held by a child of Mr. Gerwitz, 6,000 shares held in an IRA, and presently exercisable warrants to purchase 3,000 shares of Common Stock.
(7)	Includes presently exercisable warrants to purchase 3,000 shares of Common Stock.

EQUITY COMPENSATION PLAN INFORMATION AS OF DECEMBER 31, 2014

Plan Category	Number of securities to be issued upon exercise of outstanding options, warrants and rights		Weighted-average exercise price of outstanding options, warrants and rights compensation plans		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
	(a)		(b)		(c)
Warrants issued in connection with convertible debentures, short-term loans and financing considerations (1)		802,365	$	0.025		-0-
Total		802,365	$	0.025		-0-

———————

(1) Warrants issued in connection with the sale of convertible debentures totaling $138,273 in 2014 and 2013, the receipt of short term-notes totaling $115,500 from 2010 through 2013, and, in 2011, to a professional services provider related to certain fee payment considerations were approved by the Board of Directors. The warrants expire from five to seven years from the date of issuance.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

During 2012, with Board of Directors approval, the Company converted $1,500 of the remaining $6,000 of an unsecured loan held by Herman M. Gerwitz, a director, together with approximately $1,200 of accrued interest, into unregistered shares of its Common Stock and issued 44,216 shares at $0.06 per share to Mr. Gerwitz.

During 2012, the Company received an unsecured loan of $20,000 from Dr. Feinstein’s brother-in-law and issued warrants, expiring in five years, to purchase 20,000 shares of its Common Stock at $0.03 to this individual.

During 2014, with Board of Directors approval, the Company exchanged a $4,500 short-term loan held by Herman M. Gerwitz, a Director, together with accrued interest, for a $5,333 convertible debenture which included warrants to purchase 26,665 shares of the Company’s Common Stock at $0.02 per share. The warrant is exercisable two years after issuance and expires seven years after issuance. The debenture is due in two years. At option of the lender, the debenture and accrued interest is convertible in whole or part into Common Stock of the Company at $0.05 per share.

During 2014, with Board of Directors approval, the Company exchanged a $20,000 short-term loan held by Dr. Feinstein’s brother-in-law together with accrued interest, for a $22,940 convertible debenture which included warrants to purchase 114,700 shares of the Company’s Common Stock at $0.02 per share. The warrant is exercisable two years after issuance and expires seven years after issuance. The debenture is due in two years. At option of the lender, the debenture and accrued interest is convertible in whole or part into Common Stock of the Company at $0.05 per share.

25

The Board of Directors has determined that all the directors, with the exception of Michael A. Feinstein, M.D., who serves as President and Chief Executive Officer, are independent as that term is defined by the SEC.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

Registrant has retained the public accounting firm of Morison Cogen LLP, whose principal business address is 150 Monument Rd., Suite 500, Bala Cynwyd, PA 19004, to perform its annual audit for inclusion of its report on Form 10-K and perform SAS 100 reviews of quarterly information in connection with Form 10-Q filings.

Audit Fees

During 2014, 2013 and 2012, the aggregate fees billed for professional services rendered by Registrant’s principal accountant for the audit of Registrant’s annual financial statements and review of its quarterly financial statements were $35,000, $0 and $28,000, respectively.

Audit-Related Fees

During 2014, 2013 and 2012, there were no fees billed for audit-related services.

Tax Fees

During 2014, 2013 and 2012, the aggregate fees billed for professional services rendered by Registrant’s principal accountant for tax compliance, tax advice and tax planning were $0, $3,500 and $0, respectively.

All Other Fees

During 2014, 2013 and 2012, there were no fees billed for products and services provided by Registrant’s principal accountant other than those set forth above.

Audit Committee Approval

The Audit Committee, consisting of Michael A. Feinstein, M.D., Chairman, President and Chief Executive Officer, and Herman M. Gerwitz, CPA, evaluate and approve, in advance, the scope and cost of the engagement of an auditor before the auditor renders audit and non-audit services. All non-audit services were approved by the audit committee. Registrant does not rely on pre-approval policies and procedures.

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

See Exhibit Index.

26

SIGNATURES

Pursuant to the requirements of Section 13 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: September 11, 2015	By:	/s/ Michael A. Feinstein, M.D.
		Michael A. Feinstein, M.D.
	Title:	Chairman of the Board, President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature	Title	Date
/s/ Michael A. Feinstein, M.D.	Chairman of the Board, President and Chief Executive Officer (Principal Executive Officer)	September 11, 2015
Michael A. Feinstein, M.D.
/s/ Rudolph A. Lutterschmidt	Vice President, Chief Financial Officer and Chief Accounting Officer (Principal Financial and Accounting Officer)	September 11, 2015
Rudolph A. Lutterschmidt
/s/ Herman M. Gerwitz	Director	September 11, 2015
Herman M. Gerwitz
/s/ Richard Levitt	Director	September 11, 2015
Richard Levitt
/s/ Philip B. White	Director	September 11, 2015
Philip B. White

27

INDEX TO FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm	F-2
Balance Sheets as of December 31, 2014, 2013 and 2012	F-3
Statements of Operations for the Years ended December 31, 2014, 2013 and 2012	F-4
Statement of Stockholders’ Deficiency for the Years ended December 31, 2014, 2013 and 2012	F-5
Statements of Cash Flows for the Years ended December 31, 2014, 2013 and 2012	F-6
Notes to Financial Statements	F-8

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors

of Nocopi Technologies, Inc.

King of Prussia, Pennsylvania

We have audited the accompanying balance sheets of Nocopi Technologies, Inc. as of December 31, 2014, 2013 and 2012, and the related statements of operations, stockholders' deficiency, and cash flows for each of the three years in the period ended December 31, 2014. Nocopi Technologies, Inc.’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Nocopi Technologies, Inc. at December 31, 2014, 2013 and 2012, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2014 in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company continues to have a working capital deficit which raises substantial doubt about its ability to continue as a going concern. Management’s plans in regard to this matter are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ MORISON COGEN LLP

Bala Cynwyd, Pennsylvania

September 11, 2015

F-2

Nocopi Technologies, Inc.

Balance Sheets*

	December 31
	2014			2013			2012
Assets
Current assets
Cash	$	28,000		$	52,900		$	20,600
Accounts receivable less $5,000 allowance for doubtful
accounts		287,800			237,100			68,500
Inventory		43,500			28,500			26,000
Prepaid and other		18,800			31,500			23,800
Total current assets		378,100			350,000			138,900
Fixed assets
Leasehold improvements		19,700			72,500			72,500
Furniture, fixtures and equipment		176,800			186,300			184,500
		196,500			258,800			257,000
Less: accumulated depreciation and amortization		178,400			257,300			256,400
		18,100			1,500			600
Total assets	$	396,200		$	351,500		$	139,500
Liabilities and Stockholders’ Deficiency
Current liabilities
Promissory note	$	–		$	18,800		$	43,800
Demand loans		63,000			92,500			89,500
Convertible debentures		102,900			–			–
Accounts payable		160,300			169,500			245,600
Accrued expenses		383,000			306,000			201,200
Deferred revenue		93,400			113,800			26,000
Total current liabilities		802,600			700,600			606,100
Commitments and contingencies
Convertible debentures, net of unaccreted discount of $1,400 at December 31, 2014 and $6,300 at December 31, 2013		31,800			98,700			–
Stockholders’ deficiency
Series A preferred stock, $1.00 par value, Authorized - 300,000 shares, Issued and outstanding - none		–			–			–
Common stock, $0.01 par value, Authorized - 75,000,000 shares, Issued and outstanding - 58,599,016 shares		586,000			586,000			586,000
Paid-in capital		12,408,500			12,406,600			12,398,100
Accumulated deficit		(13,432,700	)		(13,440,400	)		(13,450,700	)
		(438,200	)		(447,800	)		(466,600	)
Total liabilities and stockholders’ deficiency	$	396,200		$	351,500		$	139,500

*The accompanying notes are an integral part of these financial statements.

F-3

Nocopi Technologies, Inc.

Statements of Operations*

	Years ended December 31
	2014			2013			2012
Revenues
Licenses, royalties and fees	$	358,800		$	295,100		$	414,900
Product and other sales		564,000			455,100			222,100
		922,800			750,200			637,000
Cost of revenues
Licenses, royalties and fees		75,600			67,200			52,500
Product and other sales		248,700			218,300			149,500
		324,300			285,500			202,000
Gross profit		598,500			464,700			435,000
Operating expenses
Research and development		121,600			111,900			109,400
Sales and marketing		194,500			170,500			167,400
General and administrative		253,400			195,200			302,000
		569,500			477,600			578,800
Net income (loss) from operations		29,000			(12,900	)		(143,800	)
Other income (expenses)
Reversal of accounts payable		–			39,500			7,800
Interest income		300			–			–
Interest expense, bank charges, financing cost and accretion of interest		(21,600	)		(16,300	)		(10,100	)
		(21,300	)		23,200			(2,300	)
Net income (loss)	$	7,700		$	10,300		$	(146,100	)
Net income (loss) per common share
Basic	$	.00		$	.00		$	(.00	)
Diluted	$	.00		$	.00		$	(.00	)
Weighted average common shares outstanding
Basic		58,599,016			58,599,016			58,565,605
Diluted		58,600,690			58,687,694			58,565,605

*The accompanying notes are an integral part of these financial statements.

F-4

Nocopi Technologies, Inc.

Statement of Stockholders’ Deficiency*

For the Period January 1, 2012 through December 31, 2014

	Common stock				Paid-in		Accumulated
	Shares		Amount		Capital		Deficit			Total
Balance - January 1, 2012		58,346,466	$	583,500	$	12,386,700	$	(13,304,600	)	$	(334,400	)
Sales of common stock		208,334		2,100		7,900					10,000
Conversion of demand notes and interest		44,216		400		2,300					2,700
Fair value of warrants issued to demand loan holders						1,200					1,200
Net loss								(146,100	)		(146,100	)
Balance - December 31, 2012		58,599,016		586,000		12,398,100		(13,450,700	)		(466,600	)
Fair value of warrants issued to demand loan holder						100					100
Fair value of warrants issued to convertible debenture holders						8,400					8,400
Net income								10,300			10,300
Balance - December 31, 2013		58,599,016		586,000		12,406,600		(13,440,400	)		(447,800	)
Fair value of warrants issued to convertible debenture holders						1,900					1,900
Net income								7,700			7,700
Balance - December 31, 2014		58,599,016	$	586,000	$	12,408,500	$	(13,432,700	)	$	(438,200	)

*The accompanying notes are an integral part of these financial statements.

F-5

Nocopi Technologies, Inc.

Statements of Cash Flows*

	Years ended December 31
	2014			2013			2012
Operating Activities
Net income (loss)	$	7,700		$	10,300		$	(146,100	)
Adjustments to reconcile net income (loss) to net cash used in operating activities
Depreciation and amortization		4,000			900			3,100
Reversal of accounts payable		–			(39,500	)		(7,800	)
Financing cost – warrant grants		–			100			1,200
Accretion of interest – convertible debentures		4,600			2,100			–
		16,300			(26,100	)		(149,600	)
(Increase) decrease in assets
Accounts receivable		(50,700	)		(168,600	)		(36,700	)
Inventory		(15,000	)		(2,500	)		(5,200	)
Prepaid and other		12,700			(7,700	)		(500	)
Increase (decrease) in liabilities
Accounts payable and accrued expenses		71,600			68,200			174,500
Deferred revenue		(20,400	)		87,800			(16,800	)
		(1,800	)		(22,800	)		115,300
Net cash provided by (used in) operating activities		14,500			(48,900	)		(34,300	)
Investing Activities
Additions to fixed assets		(20,600	)		(1,800	)		–
Net cash used in investing activities		(20,600	)		(1,800	)		–
Financing Activities
Repayment of borrowings under promissory note		(18,800	)		(25,000	)		(25,000	)
Proceeds from demand loans		–			3,000			49,500
Repayment of demand loans		(5,000	)		–			(2,500	)
Proceeds from convertible debentures		5,000			105,000			–
Issuance of common stock		–			–			10,000
Net cash provided by (used in) financing activities		(18,800	)		83,000			32,000
Increase (decrease) in cash		(24,900	)		32,300			(2,300	)
Cash
Beginning of year		52,900			20,600			22,900
End of year	$	28,000		$	52,900		$	20,600

*The accompanying notes are an integral part of these financial statements.

F-6

Nocopi Technologies, Inc.

Statements of Cash Flows (Continued)*

	Years ended December 31
	2014			2013		2012
Supplemental Disclosure of Cash Flow Information
Cash paid for interest	$	300		$	1,200	$	2,200
Supplemental disclosure of Non Cash Investing Activities
Write-off of fully depreciated leasehold improvements and furniture fixtures and equipment
Accumulated depreciation and amortization	$	(82,900	)		–		–
Leasehold improvements	$	72,500			–		–
Furniture, fixtures and equipment	$	10,400			–		–
Supplemental Disclosure of Non Cash Financing Activities
Conversion of demand loans and interest to convertible debentures
Demand loans	$	24,500			–		–
Accrued expenses	$	3,800			–		–
Convertible debentures	$	26,400			–		–
Paid-in capital	$	1,900			–		–
Conversion of demand loans and interest to common stock
Demand loans		–			–	$	1,500
Accrued expenses		–			–	$	1,200
Common stock		–			–	$	400
Paid-in capital		–			–	$	2,300

*The accompanying notes are an integral part of these financial statements.

F-7

NOCOPI TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS

December 31, 2014, 2013 and 2012

1.Organization of the Company

Nocopi Technologies, Inc. (the “Company”) is organized under the laws of the State of Maryland. Its main business activities are the development and distribution of document security products and the licensing of its patented reactive ink technologies for the Entertainment and Toy and the Document and Product Authentication markets in the United States and foreign countries. The Company operates in one principal industry segment.

2. Significant Accounting Policies

Financial Statement Presentation - Amounts included in the accompanying financial statements have been rounded to the nearest hundred, except for number of shares and per share information.

Estimates - The preparation of the financial statements in conformity with Accounting Principles Generally Accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the dates of financial statements and the reported amounts of revenues and expenses during the reported periods. Actual results could differ from those estimates.

Cash consists of demand deposits with a major U.S. bank.

Accounts receivable and credit policies - Accounts receivable are uncollateralized customer obligations due under normal trade terms requiring payment within 30 days from the invoice date. Accounts receivable are stated at the amount billed to the customer. Customer account balances with invoices dated over 90 days old are considered delinquent.

The carrying amount of accounts receivable is reduced by an allowance that reflects management's best estimate of the amounts that will not be collected. Management individually reviews all accounts receivable balances that exceed 90 days from invoice date and based on an assessment of current creditworthiness, estimates the portion, if any, of the balance that will not be collected.

Inventory consists primarily of ink components and is stated at the lower of cost (determined by the first-in, first-out method) or market.

Fixed assets are carried at cost less accumulated depreciation and amortization. Furniture, fixtures and equipment are generally depreciated on the straight-line method over their estimated service lives. Leasehold improvements are amortized on a straight-line basis over the shorter of five years or the term of the lease. Major renovations and betterments are capitalized. Maintenance, repairs and minor items are expensed as incurred. Upon disposal, assets and related depreciation are removed from the accounts and the net amount, less proceeds from disposal, is charged or credited to income.

Patent costs are charged to expense as incurred due to the uncertainty of their recoverability as a result of the Company’s adverse liquidity situation.

Revenues - In accordance with Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”) 605, Revenue Recognition, the Company recognizes revenue when (i) persuasive evidence of a customer or distributor arrangement exists or acceptance occurs, (ii) a retailer, distributor or wholesaler receives the goods, (iii) the price is fixed or determinable, and (iv) collectability of the sales revenue is reasonably assured. Subject to these criteria, the Company will generally recognize revenue upon shipment of product. Revenue from license fees and royalties will be recognized as earned over the license term.

Income taxes - Deferred income taxes are provided for all temporary differences and net operating loss and tax credit carryforwards. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

F-8

NOCOPI TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS

December 31, 2014, 2013 and 2012

Fair value - The carrying amounts reflected in the balance sheets for cash, receivables, accounts payable and accrued expenses approximate fair value due to the short maturities of these instruments. The carrying amount of the demand loans and the line of credit approximates fair value since the interest rate associated with the debt approximates the current market interest rates.

Earnings (loss) per share - The Company follows FASB ASC 260 resulting in the presentation of basic and diluted earnings per share.Basic earnings per common share are based on the weighted average number of shares outstanding during the periods presented. Diluted earnings per share are computed using weighted average number of common shares plus dilutive common share equivalents outstanding during the period. Potential common shares that would have the effect of increasing diluted earnings per share are considered to be anti-dilutive, i.e. the exercise prices of the outstanding stock options were greater than the market price of the common stock.

The table below presents the computation of basic and diluted weighted average common shares outstanding:

	2014		2013		2012
Basic shares outstanding		58,599,016		58,599,016		58,565,605
Incremental shares from assumed conversion of stock options and warrants		1,674		88,678		–
Diluted shares outstanding		58,600,690		58,687,694		58,565,605

Comprehensive income (loss) - The Company follows FASB ASC 220 in reporting comprehensive income. 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 the Company has no items of other comprehensive income, comprehensive income (loss) is equal to net income (loss).

Recoverability of Long-Lived Assets

The Company follows FASB ASC 360-35, “Impairment or Disposal of Long-Lived Assets.” The Statement requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. The Company is not aware of any events or circumstances which indicate the existence of an impairment which would be material to the Company’s annual financial statements.

Recently Adopted Accounting Pronouncements

As of December 31, 2014 and for the year then ended, there were no recently adopted accounting pronouncements that had a material effect on the Company’s financial statements.

Recently Issued Accounting Pronouncements Not Yet Adopted

In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements – Going Concern (Subtopic 205-40), Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. The amendments in this Update provide guidance about management’s responsibility to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued and to provide related footnote disclosures. Substantial doubt about an entity’s ability to continue as a going concern exists when relevant conditions and events, considered in the aggregate, indicate that it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued. The amendments in this Update are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. Management is assessing the impact of the adoption to the financial statements.

F-9

NOCOPI TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS

December 31, 2014, 2013 and 2012

3. Going Concern

Since its inception, with the exception of the years ended December 31, 2007 and December 31, 2013 and December 13, 2014, during which it generated net income of $386,000 and $10,300 and $7,700, respectively, the Company has incurred significant losses and, as of December 31, 2014, had accumulated losses of $13,432,700. For the year ended December 31, 2014, the Company had net income from operations of $29,000. For the years ended December 31, 2013 and December 31, 2012, the Company’s had a net loss from operations of $12,900 and $143,800, respectively. The Company had negative working capital of $424,500 at December 31, 2014, $350,600 at December 31, 2013 and $467,200 at December 31, 2012. Due in part to uncertainties in the US economy, the Company, which is substantially dependent on its licensees to generate licensing revenues, may incur further operating losses and experience negative cash flow in the future. Achieving profitability and positive cash flow depends on the Company’s ability to generate and sustain significant increases in revenues and gross profits from its traditional business. There can be no assurances that the Company will be able to generate sufficient revenues and gross profits to sustain profitability and return to positive cash flow in the future.

During 2014, the Company sold a $5,000 convertible debenture to an investor. During 2013, the Company sold convertible debentures totaling $105,000 to six individuals and a trust and received an unsecured loan of $3,000 from an individual. During 2012, the Company received unsecured loans totaling $49,500 from two individuals and repaid $2,500 of these loans during 2012. In 2012, the Company raised $10,000 in a private placement exempt from registration under section 4(2) of the Securities Act of 1933, as amended, whereby 208,334 shares of the Company’s common stock were sold to two non-affiliated individual investors. Receipt of funds from these investors and from the demand loan holders have allowed the Company to remain in operation through the current date. Management of the Company believes that it may need additional capital in the future both to fund investments needed to increase its operating revenues to levels that will sustain its operations and to fund operating deficits that it anticipates will continue until revenue increases from traditional and new product lines can be realized. There can be no assurances that the Company will be successful in obtaining sufficient additional capital, or if it does, that the additional capital will enable the Company to impact its revenues so as to have a material positive effect on the Company’s operations and cash flow. The Company believes that without additional capital, whether in the form of debt, equity or both, it may be forced to cease operations at an undetermined future date.

The Company’s independent registered public accountants have included a “going concern” explanatory paragraph in their audit report accompanying the 2014 financial statements. The paragraph states that the Company’s continuing working capital deficit raises substantial doubt about the Company’s ability to continue as a going concern and cautions that the financial statements do not include any adjustments that might result from the outcome of this uncertainty.

4. Concentration of Credit Risk

Certain financial instruments potentially subject the Company to concentrations of credit risk. These financial instruments consist primarily of cash and accounts receivables. At December 31, 2014, the Company did not have deposits with a financial institution that exceed the FDIC deposit insurance coverage of $250,000. There is a concentration of credit risk with respect to accounts receivable due to the number of major customers.

5. Demand Loans

In April 2012, the Company received an unsecured loan of $2,500 from an individual and repaid the loan, with interest at 8%, in May 2012.

In July 2012, the Company received an unsecured loan of $5,800 from an individual. The loan bears interest at 8% and is payable on demand. The loan was used to finance the Company’s working capital requirements. Additionally, the Company granted warrants to purchase 5,800 shares of common stock of the Company at $0.06 per share to this individual. The warrants expire in five years. A financing cost of approximately $200, representing the fair value of the warrants, was charged to income in the third quarter of 2012. The fair value of the warrants was determined using the Black-Scholes pricing model with the following assumptions: expected life-5 years; interest rate-.64%; expected volatility based on the Company’s historical volatility-108%; and dividend yield-0.

F-10

NOCOPI TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS

December 31, 2014, 2013 and 2012

In July 2012, the Company received an unsecured loan of $3,000 from an individual. The loan bears interest at 8% and is payable on demand. The loan was used to finance the Company’s working capital requirements. Additionally, the Company granted warrants to purchase 3,000 shares of common stock of the Company at $0.06 per share to this individual. The warrants expire in five years. A financing cost of approximately $100, representing the fair value of the warrants, was charged to income in the third quarter of 2012. The fair value of the warrants was determined using the Black-Scholes pricing model with the following assumptions: expected life-5 years; interest rate-.60%; expected volatility based on the Company’s historical volatility-108%; and dividend yield-0.

In August 2012, the Company received an unsecured loan of $3,500 from an individual. The loan bears interest at 8% and is payable on demand. The loan was used to finance the Company’s working capital requirements. Additionally, the Company granted warrants to purchase 3,500 shares of common stock of the Company at $0.07 per share to this individual. The warrants expire in five years. A financing cost of approximately $100, representing the fair value of the warrants, was charged to income in the third quarter of 2012. The fair value of the warrants was determined using the Black-Scholes pricing model with the following assumptions: expected life-5 years; interest rate-.61%; expected volatility based on the Company’s historical volatility-108%; and dividend yield-0.

In September 2012, the Company received an unsecured loan of $20,000 from an individual. The loan bears interest at 8% and is payable on demand. The loan was used to finance the Company’s working capital requirements. Additionally, the Company granted warrants to purchase 20,000 shares of common stock of the Company at $0.03 per share to this individual. The warrants expire in five years. A financing cost of approximately $400, representing the fair value of the warrants, was charged to income in the third quarter of 2012. The fair value of the warrants was determined using the Black-Scholes pricing model with the following assumptions: expected life-5 years; interest rate-.68%; expected volatility based on the Company’s historical volatility-110%; and dividend yield-0.

In October 2012, the Company received an unsecured loan of $3,000 from an individual. The loan bears interest at 8% and is payable on demand. The loan was used to finance the Company’s working capital requirements. Additionally, the Company granted warrants to purchase 3,000 shares of common stock of the Company at $0.03 per share to this individual. The warrants expire in five years. A financing cost of approximately $100, representing the fair value of the warrants, was charged to income in the fourth quarter of 2012. The fair value of the warrants was determined using the Black-Scholes pricing model with the following assumptions: expected life-5 years; interest rate-.67%; expected volatility based on the Company’s historical volatility-113%; and dividend yield-0.

In October 2012, the Company received an unsecured loan of $3,700 from an individual. The loan bears interest at 8% and is payable on demand. The loan was used to finance the Company’s working capital requirements. Additionally, the Company granted warrants to purchase 3,700 shares of common stock of the Company at $0.025 per share to this individual. The warrants expire in five years. A financing cost of approximately $100, representing the fair value of the warrants, was charged to income in the fourth quarter of 2012. The fair value of the warrants was determined using the Black-Scholes pricing model with the following assumptions: expected life-5 years; interest rate-.67%; expected volatility based on the Company’s historical volatility-113%; and dividend yield-0.

In October 2012, the Company received an unsecured loan of $4,000 from an individual. The loan bears interest at 8% and is payable on demand. The loan was used to finance the Company’s working capital requirements. Additionally, the Company granted warrants to purchase 4,000 shares of common stock of the Company at $0.022 per share to this individual. The warrants expire in five years. A financing cost of approximately $100, representing the fair value of the warrants, was charged to income in the fourth quarter of 2012. The fair value of the warrants was determined using the Black-Scholes pricing model with the following assumptions: expected life-5 years; interest rate-.82%; expected volatility based on the Company’s historical volatility-113%; and dividend yield-0.

F-11

NOCOPI TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS

December 31, 2014, 2013 and 2012

In November 2012, the Company received an unsecured loan of $4,000 from an individual. The loan bears interest at 8% and is payable on demand. The loan was used to finance the Company’s working capital requirements. Additionally, the Company granted warrants to purchase 4,000 shares of common stock of the Company at $0.01 per share to this individual. The warrants expire in five years. A financing cost of approximately $100, representing the fair value of the warrants, was charged to income in the fourth quarter of 2012. The fair value of the warrants was determined using the Black-Scholes pricing model with the following assumptions: expected life-5 years; interest rate-.73%; expected volatility based on the Company’s historical volatility-113%; and dividend yield-0.

In March 2013, the Company received an unsecured loan of $3,000 from an individual. The loan bears interest at 8% and is payable on demand. The loan was used to finance the Company’s working capital requirements. Additionally, the Company granted warrants to purchase 3,000 shares of common stock of the Company at $0.021 per share to this individual. The warrants expire in five years. A financing cost of approximately $100, representing the fair value of the warrants, was charged to income in the first quarter of 2013. The fair value of the warrants was determined using the Black-Scholes pricing model with the following assumptions: expected life-5 years; interest rate-.77%; expected volatility based on the Company’s historical volatility-101%; and dividend yield-0.

6. Promissory Note

In 2008, the Company negotiated a $100,000 revolving line of credit with a bank to provide a source of working capital. The line of credit was secured by all the assets of the Company and bore interest at the bank’s prime rate plus 0.5%. During the term of the line of credit, the interest rate applicable to the Company’s line of credit was 3.75%. During the year ended December 31, 2009, the Company borrowed the entire $100,000 available under the line of credit. Until the third quarter of 2010, the Company had been required to pay interest only on borrowings under the line of credit. During the third quarter of 2010, the Company was notified by the bank that the line of credit was not being renewed and was offered repayment terms, which the Company accepted, to repay the outstanding loan balance in forty-eight equal monthly installments of $2,083, plus interest at the bank’s prime rate plus 0.5%, which was 3.75% throughout the repayment term, beginning in October 2010. In early July 2014, the Company repaid $6,250, the then remaining outstanding balance of the note.

7. Convertible Debentures

During the third quarter of 2013, the Company received $105,000 through the issuance of convertible debentures to six individual investors and a trust. The debentures bear interest at 7% and are due and payable two years from the date of issuance. Proceeds of the debenture issuance were used to finance the Company’s working capital requirements. At option of the lender, the debentures and accrued interest are convertible in whole or part into common stock of the Company at $0.05 per share. The Company also granted warrants to purchase 525,000 shares of the Company’s common stock at $0.02 per share to the holders of the debentures. The warrants are exercisable two years after issuance and expire seven years after issuance.

The fair value of the warrants of approximately $9,100 was determined using the Black-Scholes pricing model. The relative fair value of the warrants was approximately $8,300 and was recorded as a discount to the notes payable with an offsetting credit to additional paid-in capital since the Company determined that the warrants were an equity instrument in accordance with FASB ASC 815. The debt discount related to the warrant issuances is being accreted through interest expense over the term of the notes payable. For the years ended December 31, 2014 and 2013, approximately $4,200 and $2,100, respectively, was accreted through interest expense.

During the third quarter of 2014, the Company, with the approval of its Board of Directors, exchanged two demand loans totaling $24,500 including one demand loan in the amount of $4,500 held by Herman M. Gerwitz, a Director, along with approximately $3,800 of accrued interest for convertible debentures totaling approximately $28,300. The debentures bear interest at 7% and are due and payable two years from the date of issuance. At option of the lender, the debentures and accrued interest are convertible in whole or part into common stock of the Company at $0.05 per share. The Company also granted warrants to purchase approximately 141,400 shares of common stock of the Company at $0.02 per share to the debenture holders. The warrants are exercisable two years after issuance and expire seven years after issuance.

F-12

NOCOPI TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS

December 31, 2014, 2013 and 2012

During the third quarter of 2014, the Company received $5,000 through the issuance of a convertible debenture to an investor. The debenture bears interest at 7% and is due and payable two years from the date of issuance. At option of the lender, the debenture and accrued interest are convertible in whole or part into common stock of the Company at $0.05 per share. The Company also granted warrants to purchase 25,000 shares of the Company’s common stock at $0.02 per share to the holder of the debenture. The warrants are exercisable two years after issuance and expire seven years after issuance.

The fair value of the approximately 166,400 warrants issued in the third quarter of 2014 of approximately $2,000 was determined using the Black-Scholes pricing model. The relative fair value of the warrants was approximately $1,900 and was recorded as a discount to the notes payable with an offsetting credit to additional paid-in capital since the Company determined that the warrants were an equity instrument in accordance with FASB ASC 815. The debt discount related to the warrant issuances is being accreted through interest expense over the term of the notes payable. For the year ended December 31, 2014, approximately $500 was accreted through interest expense.

8. Stockholders' Deficiency

During 2012, the Company sold 208,334 shares of its common stock to a non-affiliated investor for $10,000 pursuant to a private placement.

The Company, with the approval of its Board of Directors, entered into a Conversion Agreement effective March 16, 2012 with Herman M. Gerwitz, a Director, whereby $1,500 in principal of the unsecured loan owed by the Company to him, together with approximately $1,200 of accrued interest was converted into 44,216 shares of restricted common stock of the Company at $0.06 per share, the market price at the date of conversion. After giving effect to this conversion, the principal balance of the unsecured loan held by Mr. Gerwitz was reduced to $4,500.

In July 2014, the common stock private placement was extended to December 31, 2015 by the Company’s Board of Directors.

9. Other Income (Expenses)

Other income (expenses) includes, in 2013, the reversal of approximately $39,500 of accounts payable related to invoices received during 2009 from a professional services business that provided consulting services to the Company that the Company, with legal counsel, has determined to be no longer statutorily payable as the statute of limitations to bring a claim has expired and, in 2012, the reversal of approximately $7,800 of accounts payable related to invoices received during 2002 from a professional services business that provided legal services to the Company that the Company, with legal counsel, has determined to be no longer statutorily payable as the statute of limitations to bring a claim has expired. Additionally, other income (expenses) includes interest on funds borrowed under the Company’s promissory note with a bank, on unsecured loans from five individuals and, in 2013 and 2014 and on convertible debentures held by ten investors. Also included in other income (expenses) are financing costs related to warrants issued in 2013 and 2012 in conjunction with unsecured loans received during that periods.

F-13

NOCOPI TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS

December 31, 2014, 2013 and 2012

10. Income Taxes

There is no provision for income taxes for the years ended December 31, 2014 and 2013 due to the availability of net operating loss carryforwards. There is no income tax benefit for the year ended December 31, 2012 due to the availability of net operating loss carryforwards (“NOL’s”) for which the Company had previously established a 100% valuation allowance for deferred tax assets due to the uncertainty of their recoverability. At December 31, 2014, December 31, 2013 and December 31, 2012, the Company had NOL’s approximating $4,601,000, $5,079,000 and $5,658,000, respectively. The operating losses at December 31, 2014 are available to offset future taxable income; however, if not utilized, they expire in varying amounts through the year 2034. As a result of the sale of the Company's common stock in an equity offering in late 1997 and the issuance of additional shares, the amount of the NOL’s may be limited. Additionally, the utilization of these NOL’s, if available, to reduce future income taxes will depend on the generation of sufficient taxable income prior to their expiration. There were no material temporary differences for the years ended December 31, 2014, December 31, 2013 and December 31, 2012. The Company has established a 100% valuation allowance of approximately $1,933,000, $2,133,000 and $2,377,000 at December 31, 2014, December 31, 2013 and December 31, 2012, respectively, for the deferred tax assets due to the uncertainty of their realization.

The Company has adopted the provisions of FASB ASC 740-10-50-15, “Unrecognized Tax Benefit Related Disclosures.” There were no unrecognized tax benefits as of the date of adoption and no unrecognized tax benefits at December 31, 2014. There was no change in unrecognized tax benefits during the year ended December 31, 2014 and there was no accrual for uncertain tax positions as of December 31, 2014.

There were no interest and penalties recognized in the statement of operations and in the balance sheet. Tax years from 2011 through 2014 remain subject to examination by U.S. federal and state tax jurisdictions.

11. Commitments and Contingencies

The Company conducts its operations in leased facilities under a non-cancelable operating lease expiring in 2019.

Future minimum lease payments under non-cancelable operating leases with initial or remaining terms of one year or more at December 31, 2014 are: $44,900 – 2015; $46,200 – 2016; $47,400 –2017; $48,600 – 2018 and $16,300 – 2019.

Total rental expense under operating leases was $44,400, $44,200 and $44,800 in 2012, 2013 and 2014 respectively.

The Company has an employment agreement, expiring in May 2016, with Michael A. Feinstein, M.D., its Chairman of the Board and Chief Executive Officer. The employment agreement contains one-year renewal provisions that become effective after the original term. Dr. Feinstein receives base compensation of $85,000 per year plus a performance bonus determined by the Company’s Board of Directors. The Company has an employment agreement, expiring in March 2016, with Terry W. Stovold, its Chief Operating Officer, whereby Mr. Stovold receives a salary set by the Company’s Board of Directors, currently set at $75,000, along with a commission of seven percent on sales generated by his efforts. The employment agreement contains one-year renewal provisions that become effective after the original term. Future minimum compensation payments under these employment agreements are: $160,000 to be paid in 2015 and $54,200 to be paid in 2016.

From time to time, the Company may be subject to legal proceedings and claims that arise in the ordinary course of its business.

12. Stock Options, Warrants and 401(k) Savings Plan

The Company follows FASB ASC 718, Share Based Payment, which requires that the cost resulting from all share-based payment transactions be recognized in the Company’s financial statements. FASB ASC 718 requires all share-based payments to employees, including grants of employee stock options, to be recognized in the statement of operations based on their fair values.

F-14

NOCOPI TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS

December 31, 2014, 2013 and 2012

The 1999 Stock Option Plan provided for the granting of up to 2,000,000 incentive and non-qualified stock options to employees, non-employee directors, consultants and advisors to the Company. In the case of options designated as incentive stock options, the exercise price of the options granted must be not less than the fair market value of such shares on the date of grant. Non-qualified stock options may be granted at any amount established by the Stock Option Committee or, in the case of Discounted Options issued to non-employee directors in lieu of any portion of an Annual Retainer, in accordance with a formula designated in the Plan. The 1999 Stock Option Plan terminated in February 2009 and no further stock options can be granted under the plan; however, options granted before the termination date may be exercised through their expiration date.

The Company uses the Black-Scholes option pricing model to calculate the grant-date fair value of an award. There was no compensation expense recognized during the years ended December 31, 2014, 2013 and 2012 and there was no unrecognized portion of expense at December 31, 2014.

A summary of stock options under the Company’s stock option plans follows:

			Weighted
		Exercise	Average
	Number of	Price Range	Exercise
	Shares	Per Share	Price
Outstanding at December 31, 2011 and 2012	645,000	$0.12 and $.45	$0.32
Options expired	400,000	0.45	0.45
Outstanding at December 31, 2013	245,000	0.12	0.12
Options expired	245,000	0.12	0.12
Outstanding at December 31, 2014	0	–	–
	Option
	Shares
Exercisable options at year end:
2014	0
Weighted average remaining contractual life (years)	–
Options available for future grant:
2014	0

At December 31, 2014, the Company had 802,365 warrants to purchase common stock of the Company outstanding at exercise prices ranging from $0.01 to $0.07 and expiring at various dates through July 2021. The warrants were granted from 2010 to 2013 to six individuals in conjunction with loans provided to the Company, to ten investors who acquired convertible debentures from the Company in 2013 and 2014 and, in 2011, to a professional services provider related to certain fee payment considerations granted by the individual.

F-15

NOCOPI TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS

December 31, 2014, 2013 and 2012

A summary of outstanding warrants follows:

				Weighted
		Exercise		Average
	Number of	Price Range		Exercise
	Shares	Per Share		Price
Outstanding at December 31, 2011	85,500	$0.045 to $0.07		$0.061
Warrants granted	47,000	0.01 to 0.07		0.036
Outstanding at December 31, 2012	132,500	0.01 to 0.07		0.052
Warrants granted	528,000	0.02 and 0.021		0.02
Outstanding at December 31, 2013	660,500	0.01 to 0.07		0.026
Warrants granted	166,365	0.02		0.02
Warrants canceled	24,500	0.03 and 0.07		0.037
Outstanding at December 31, 2014	802,365	$0.01 to $0.07		$0.025
Weighted average remaining contractual life (years)	5.21
					Weighted
			Exercise		Average
			Price Range		Exercise
	Shares		Per Share		Price
Exercisable warrants at year end:
2014	111,000	$0.01 to $0.07		$0.055
Weighted average remaining contractual life (years)	1.33

At December 31, 2014, the Company has reserved 3,955,005 shares of common stock for possible future issuance upon exercise of 802,365 warrants and for the conversion of approximately $138,300 convertible debentures and accrued interest into 3,152,640 shares of common stock.

The Company sponsors a 401(k) savings plan, covering substantially all employees, providing for employee and employer contributions. Employer contributions are made at the discretion of the Company. There were no contributions charged to expense during 2014, 2013 or 2012.

13. Major Customer and Geographic Information

The 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:

	Year ended December 31
	2014			2013			2012
Customer A		47	%		49	%		14	%
Customer B		19	%		15	%		10	%

The Company’s non-affiliate customers whose individual balances amounted to more than 10% of the Company’s net accounts receivable, expressed as a percentage of net accounts receivable, were:

	December 31
	2014			2013			2012
Customer A		46	%		45	%		48	%
Customer B		35	%		32	%		20	%

F-16

NOCOPI TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS

December 31, 2014, 2013 and 2012

The Company performs ongoing credit evaluations of its customers and generally does not require collateral. The Company also maintains allowances for potential credit losses. The loss of a major customer could have a material adverse effect on the Company’s business operations and financial condition.

The Company’s revenues by geographic region are as follows:

	Year ended December 31
	2014		2013		2012
North America	$	477,100	$	365,700	$	540,600
Asia		445,700		384,500		96,400
	$	922,800	$	750,200	$	637,000

14. Subsequent Events

Through July 2015, the Company repaid $26,000 of the principal of the outstanding demand loans.

In July 2015, the Company repaid, with interest, a $10,000 convertible debenture that had matured.

In July 2015, the Company’s Board of Directors extended the Common Stock private placement to December 31, 2016.

During the third quarter of 2015, the Company’s Board of Directors approved and the holders of $95,000 of convertible debentures maturing during the third quarter of 2015 accepted an offer of extension whereby the maturity dates of the convertible debentures are extended for two years and the conversion rate of the debentures and accrued interest into Common Stock of the Company is reduced from $0.05 to $0.025.

F-17

NOCOPI TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS

December 31, 2014, 2013 and 2012

15. Quarterly Financial Information (Unaudited)

Nocopi Technologies, Inc.

Balance Sheets

(Unaudited)

	September 30,			June 30,			March 31,
	2014			2014			2014
Assets
Current assets
Cash	$	72,700		$	9,300		$	36,800
Accounts receivable less $5,000 allowance		185,300			265,500			198,200
Inventory		47,500			29,900			36,800
Prepaid and other		10,100			12,000			21,200
Total current assets		315,600			316,700			293,000
Fixed assets
Leasehold improvements		19,100			19,100			19,100
Furniture, fixture and equipment		176,800			176,800			176,800
		195,900			195,900			195,900
Less: accumulated depreciation and amortization		177,300			176,100			174,800
		18,600			19,800			21,100
Total assets	$	334,200		$	336,500		$	314,100
Liabilities and Stockholders' Deficiency
Current liabilities
Promissory note	$	–		$	6,300		$	12,500
Demand loans		63,000			92,500			92,500
Convertible debentures		101,900			–			–
Accounts payable		135,200			130,400			147,200
Accrued expenses		362,800			348,600			329,500
Deferred revenue		123,100			120,800			105,700
Total current liabilities		786,000			698,600			687,400
Convertible debentures		31,600			100,800			99,700
Stockholders' deficiency
Common stock, $0.01 par value, Authorized - 75,000,000 shares, Issued and outstanding - 58,599,016 shares		586,000			586,000			586,000
Paid-in capital		12,408,500			12,406,600			12,406,600
Accumulated deficit		(13,477,900	)		(13,455,500	)		(13,465,600	)
		(483,400	)		(462,900	)		(473,000	)
Total liabilities and stockholders deficiency	$	334,200		$	336,500		$	314,100

F-18

NOCOPI TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS

December 31, 2014, 2013 and 2012

Nocopi Technologies, Inc.

Balance Sheets

(Unaudited)

	September 30,			June 30,			March 31,			September 30,			June 30,
	2013			2013			2013			2012			2012
Assets
Current assets
Cash	$	117,600		$	23,400		$	1,100		$	5,700		$	8,400
Accounts receivable less $5,000 allowance		159,400			153,600			157,700			77,900			67,100
Inventory		29,000			52,200			10,300			21,800			15,100
Prepaid and other		11,400			13,800			17,100			12,500			17,500
Total current assets		317,400			243,000			186,200			117,900			108,100
Fixed assets
Leasehold improvements		72,500			72,500			72,500			72,500			72,500
Furniture, fixture and equipment		184,500			184,500			184,500			184,500			184,500
		257,000			257,000			257,000			257,000			257,000
Less: accumulated depreciation and amortization		257,000			257,000			256,700			256,000			255,100
		–			–			300			1,000			1,900
Total assets	$	317,400		$	243,000		$	186,500		$	118,900		$	110,000
Liabilities and Stockholders’ Deficiency
Current liabilities
Promissory note	$	25,000		$	31,300		$	37,500		$	50,000		$	56,300
Demand loans		92,500			92,500			92,500			74,800			42,500
Accounts payable		195,200			235,500			253,000			215,400			192,600
Accrued expenses		291,500			277,600			236,500			158,000			104,200
Deferred revenue		113,600			114,500			69,000			53,000			107,100
Total current liabilities		717,800			751,400			688,500			551,200			502,700
Convertible debentures		97,700			–			–			–			–
Stockholders’ deficiency
Common stock, $0.01 par value, Authorized - 75,000,000 shares, Issued and outstanding - 58,599,016 shares		586,000			586,000			586,000			586,000			586,000
Paid-in capital		12,406,600			12,398,200			12,398,200			12,397,900			12,396,900
Accumulated deficit		(13,490,700	)		(13,492,600	)		(13,486,200	)		(13,416,200	)		(13,375,600	)
		(498,100	)		(508,400	)		(502,000	)		(432,300	)		(392,700	)
Total liabilities and stockholders’ deficiency	$	317,400		$	243,000		$	186,500		$	118,900		$	110,000

F-19

NOCOPI TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS

December 31, 2014, 2013 and 2012

Nocopi Technologies, Inc.

Statements of Operations

(Unaudited)

	Three Months			Nine Months			Three Months			Six Months			Three Months
	ended			ended			ended			ended			ended
	September 30,			September 30,			June 30,			June 30,			March 31,
	2014			2014			2014			2014			2014
Revenues
Licenses, royalties and fees	$	83,000		$	240,500		$	77,500		$	157,500		$	80,000
Product and other sales		125,800			389,300			158,600			263,500			104,900
		208,800			629,800			236,100			421,000			184,900
Cost of revenues
Licenses, royalties and fees		17,700			54,200			19,300			36,500			17,200
Product and other sales		56,000			176,500			65,200			120,500			55,300
		73,700			230,700			84,500			157,000			72,500
Gross profit		135,100			399,100			151,600			264,000			112,400
Operating expenses
Research and development		29,200			90,200			30,400			61,000			30,600
Sales and marketing		46,800			141,000			46,600			94,200			47,600
General and administrative		75,900			189,500			59,200			113,600			54,400
		151,900			420,700			136,200			268,800			132,600
Net income (loss) from operations		(16,800	)		(21,600	)		15,400			(4,800	)		(20,200	)
Other income (expenses)
Reversal of accounts payable
Interest income		–			300			–			300			300
Interest expense, bank charges and accretion of interest		(5,600	)		(16,200	)		(5,300	)		(10,600	)		(5,300	)
		(5,600	)		(15,900	)		(5,300	)		(10,300	)		(5,000	)
Net loss	$	(22,400	)	$	(37,500	)	$	10,100		$	(15,100	)	$	(25,200	)
Basic and diluted loss per common share	$	(.00	)	$	(.00	)	$	.00		$	(.00	)	$	(.00	)
Weighted average common shares outstanding
Basic		58,599,016			58,599,016			58,599,016			58,599,016			58,599,016
Diluted		58,599,016			58,599,016			58,600,830			58,599,016			58,599,016

F-20

NOCOPI TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS

December 31, 2014, 2013 and 2012

Nocopi Technologies, Inc.

Statements of Operations

(Unaudited)

	Three Months			Nine Months			Three Months			Six Months			Three Months			Three Months			Nine Months			Three Months			Six Months
	ended			ended			ended			ended			ended			ended			ended			ended			ended
	September 30,			September 30,			June 30,			June 30,			March 31,			September 30,			September 30,			June 30,			June 30,
	2013			2013			2013			2013			2013			2012			2012			2012			2012
Revenues
Licenses, royalties and fees	$	82,800		$	209,800		$	69,900		$	127,000		$	57,100		$	107,700		$	324,600		$	112,800		$	216,900
Product and other sales		106,900			307,200			116,400			200,300			83,900			23,800			172,400			85,200			148,600
		189,700			517,000			186,300			327,300			141,000			131,500			497,000			198,000			365,500
Cost of revenues
Licenses, royalties and fees		15,100			46,600			17,400			31,500			14,100			10,400			40,200			14,400			29,800
Product and other sales		50,400			148,500			56,200			98,100			41,900			27,000			117,600			43,200			90,600
		65,500			195,100			73,600			129,600			56,000			37,400			157,800			57,600			120,400
Gross profit		124,200			321,900			112,700			197,700			85,000			94,100			339,200			140,400			245,100
Operating expenses
Research and development		27,800			82,900			26,600			55,100			28,500			26,200			82,000			27,700			55,800
Sales and marketing		43,400			123,800			41,100			80,400			39,300			38,100			129,800			45,500			91,700
General and administrative		46,300			144,500			48,400			98,200			49,800			67,100			240,000			71,300			172,900
		117,500			351,200			116,100			233,700			117,600			131,400			451,800			144,500			320,400
Net income (loss) from operations		6,700			(29,300	)		(3,400	)		(36,000	)		(32,600	)		(37,300	)		(112,600	)		(4,100	)		(75,300	)
Other income (expenses)
Reversal of accounts payable		–			–			–			–			–			–			7,800			2,200			7,800
Interest expense, bank charges, financing cost and accretion of interest		(4,800	)		(10,700	)		(3,000	)		(5,900	)		(2,900	)		(3,300	)		(6,800	)		(1,800	)		(3,500	)
		(4,800	)		(10,700	)		(3,000	)		(5,900	)		(2,900	)		(3,300	)		1,000			400			4,300
Net income (loss)	$	1,900		$	(40,000	)	$	(6,400	)	$	(41,900	)	$	(35,500	)	$	(40,600	)	$	(111,600	)	$	(3,700	)	$	(71,000	)
Net income (loss) per common share
Basic	$	.00		$	(.00	)	$	(.00	)	$	(.00	)	$	(.00	)	$	(.00	)	$	(.00	)	$	(.00	)	$	(.00	)
Diluted	$	.00		$	(.00	)	$	(.00	)	$	(.00	)	$	(.00	)	$	(.00	)	$	(.00	)	$	(.00	)	$	(.00	)
Weighted average common shares outstanding
Basic		58,599,016			58,599,016			58,599,016			58,599,016			58,599,016			58,599,016			58,554,194			58,599,016			58,532,194
Diluted		58,745,139			58,599,016			58,599,016			58,599,016			58,599,016			58,599,016			58,554,194			58,599,016			58,532,194

F-21

NOCOPI TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS

December 31, 2014, 2013 and 2012

Nocopi Technologies, Inc.

Statements of Cash Flows

(Unaudited)

	Nine Months			Six Months			Three Months
	ended			ended			ended
	September 30,			June 30,			March 31,
	2014			2014			2014
Operating Activities
Net loss	$	(37,500	)	$	(15,100	)	$	(25,200	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities
Depreciation and amortization		2,900			1,700			400
Accretion of interest - convertible debentures		3,400			2,100			1,000
		(31,200	)		(11,300	)		(23,800	)
(Increase) decrease in assets
Accounts receivable		51,800			(28,400	)		38,900
Inventory		(19,000	)		(1,400	)		(8,300	)
Prepaid and other		21,400			19,500			10,300
Increase (decrease) in liabilities
Accounts payable and accrued expenses		26,300			3,500			1,200
Deferred revenue		9,300			7,000			(8,100	)
		89,800			200			34,000
Net cash provided by (used in) operating activities		58,600			(11,100	)		10,200
Investment Activities
Additions to fixed assets		(20,000	)		(20,000	)		(20,000	)
Net cash used in investment activities		(20,000	)		(20,000	)		(20,000	)
Financing Activities
Repayment of borrowings under promissory note		(18,800	)		(12,500	)		(6,300	)
Repayment of demand loans		(5,000	)		–			–
Proceeds from convertible debenture		5,000			–			–
Net cash used in financing activities		(18,800	)		(12,500	)		(6,300	)
		19,800			(43,600	)		(16,100	)
Cash at beginning of year		52,900			52,900			52,900
Cash at end of period		72,700			9,300			36,800
Supplemental Disclosure of Cash Flow Information
Cash paid for interest	$	300		$	300		$	200
Supplemental Disclosure of Non Cash Investing Activities
Write-off of fully depreciated leasehold improvements and furniture, fixtures and equipment
Accumulated depreciation and amortization	$	(82,900	)	$	(82,900	)	$	(82,900	)
Leasehold improvements	$	72,500		$	72,500		$	72,500
Furniture, fixtures and equipment	$	10,400		$	10,400		$	10,400
Supplemental Disclosure of Non Cash Financing Activities
Conversion of demand loans and interest to convertible debentures
Demand loans	$	24,500			–			–
Accrued expenses	$	3,800			–			–
Convertible debentures	$	26,400			–			–
Paid-in capital	$	1,900			–			–

F-22

NOCOPI TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS

December 31, 2014, 2013 and 2012

Nocopi Technologies, Inc.

Statements of Cash Flows

(Unaudited)

	Nine Months			Six Months			Three Months			Nine Months			Six Months
	ended			ended			ended			ended			ended
	September 30,			June 30,			March 31,			September 30,			June 30,
	2013			2013			2013			2012			2012
Operating Activities
Net loss	$	(40,000	)	$	(41,900	)	$	(35,500	)	$	(111,600	)	$	(71,000	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities
Depreciation and amortization		600			600			300			2,700			1,800
Reversal of accounts payable		–			–			–			(7,800	)		(7,800	)
Financing cost – warrant grants		100			100			100			1,000			–
Accretion of interest – convertible debentures		1,100			–			–			–			–
		(38,200	)		(41,200	)		(35,100	)		(115,700	)		(77,000	)
(Increase) decrease in assets
Accounts receivable		(90,900	)		(85,100	)		(89,200	)		(46,100	)		(35,300	)
Inventory		(3,000	)		(26,200	)		15,700			(1,000	)		5,700
Prepaid and other		12,400			10,000			6,700			10,800			5,800
Increase in liabilities
Accounts payable and accrued expenses		39,900			66,300			42,700			101,100			24,500
Deferred revenue		87,600			88,500			43,000			10,200			64,300
		46,000			53,500			18,900			75,000			65,000
Net cash provided by (used in) operating activities		7,800			12,300			(16,200	)		(40,700	)		(12,000	)
Financing Activities
Repayment of borrowings under promissory note		(18,800	)		(12,500	)		(6,300	)		(18,800	)		(12,500	)
Proceeds from demand loan		3,000			3,000			3,000			34,800			2,500
Repayment of demand loan		–			–			–			(2,500	)		(2,500	)
Proceeds from convertible debentures		105,000			–			–			–			–
Issuance of common stock		–			–			–			10,000			10,000
Net cash provided by (used in) financing activities		89,200			(9,500	)		(3,300	)		23,500			(2,500	)
Increase (decrease) in cash		97,000			2,800			(19,500	)		(17,200	)		(14,500	)
Cash at beginning of year		20,600			20,600			20,600			22,900			22,900
Cash at end of period	$	117,600		$	23,400		$	1,100		$	5,700		$	8,400
Supplemental Disclosure of Cash Flow Information
Cash paid for interest	$	1,000		$	700		$	400		$	1,700		$	1,200
Supplemental disclosure of Non Cash Financing Activities
Conversion of demand loan and interest to common stock
Demand loans		–			–			–		$	1,500		$	1,500
Accrued expenses		–			–			–		$	1,200		$	1,200
Common stock		–			–			–		$	400		$	400
Paid-in capital		–			–			–		$	2,300		$	2,300

F-23

Exhibit Index

The following Exhibits are filed as part of this Annual Report on Form 10-K:

Exhibit
Number	Description
3.1	Amended and Restated Articles of Incorporation (16)
3.2	Amended and Restated Bylaws (17)
4.1	Form of Certificate of Common Stock (13)
10.1†	Summary Plan Description for Nocopi Technologies, Inc. 401(k) Profit Sharing Plan (1)
10.2†	Nocopi Technologies, Inc. 1998 Stock Incentive Plan (2)
10.3†	Amended Summary Plan Description for Nocopi Technologies, Inc. 401(k) Profit Sharing Plan (2)
10.4	Director Indemnification Agreement (3)
10.5	Officer Indemnification Agreement (4)
10.6	Stock Purchase Agreement with Westvaco Brand Security, Inc. (5)
10.7	Registration Rights Agreement with Westvaco Brand Security, Inc. (6)
10.8	Subscription Agreement with Entrevest I Associates (7)
10.9	Lease Agreement dated March 19, 2003 relating to premises at 9 Portland Road, West Conshohocken, PA 19428 (8)
10.10	Settlement Agreement with Euro-Nocopi, S.A. (9)
10.11	Agreement of Terms with Entrevest I Associates (10)
10.12	Conversion Agreement (11)
10.13	Amendment dated July 18, 2007 to Lease Agreement dated March 19, 2003 relating to premises at 9 Portland Road, West Conshohocken, PA 19428 (14)
10.14†	Employment Agreement with Michael A. Feinstein, M.D. (15)
10.15	Business Loan Agreement, Promissory Note and Commercial Security Agreement dated August 19, 2008 between the Company and Sovereign Bank (18)
10.16†	Amended Summary Plan Description for Nocopi Technologies, Inc. 401(k) Profit Sharing Plan (19)
10.17†	Employment Agreement with Terry W. Stovold (20)
10.18	Conversion Agreement (20)
10.19 *	Form of Convertible Debenture Purchase Agreement and Exhibits
10.20 *	Lease Agreement dated December 12, 2013 relating to premises at 480 Shoemaker Road, King of Prussia, PA 19406
14.1	Code of Ethics (12)
31.1*	Certification of Chief Financial Officer required by Rule 13a-14(a)
31.2*	Certification of Chief Executive Officer required by Rule 13a-14(a)
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
101.INS*	XBRL Instance Document
101.SCH*	XBRL Taxonomy Extension Schema Document
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*	XBRL Taxonomy Extension Label Linkbase
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document

———————

*	Exhibit filed with this Report.
†	Compensation plans and arrangements for executives and others.
(1)	Incorporated by reference to Registrant’s Annual Report on Form 10-K for the Year Ended December 31, 1993
(2)	Incorporated by reference to Exhibit 10.14 of the Registrant’s Annual Report on Form 10-KSB for the Year Ended December 31, 1998 filed on April 15, 1999
(3)	Incorporated by reference to Exhibit 10.19 of the Registrant’s Quarterly Report on Form 10-QSB for the Three Months Ended September 30, 1999 filed on November 15, 1999
(4)	Incorporated by reference to Exhibit 10.20 of the Registrant’s Quarterly Report on Form 10-QSB for the Three Months Ended September 30, 1999 filed on November 15, 1999
(5)	Incorporated by reference to Exhibit 10.17 of the Registrant’s Annual Report on Form 10-KSB for the Year Ended December 31, 2000 filed on April 17, 2001
(6)	Incorporated by reference to Exhibit 10.18 of the Registrant’s Annual Report on Form 10-KSB for the Year Ended December 31, 2000 filed on April 17, 2001

(7)	Incorporated by reference to Exhibit 10.18 of the Registrant’s Annual Report on Form 10-KSB for the Year Ended December 31, 2002 filed on April 14, 2003
(8)	Incorporated by reference to Exhibit 10.19 of the Registrant’s Annual Report on Form 10-KSB for the Year Ended December 31, 2002 filed on April 14, 2003
(9)	Incorporated by reference to Exhibit 10.17 of the Registrant’s Annual Report on Form 10-KSB for the Year Ended December 31, 2003 filed on April 14, 2004
(10)	Incorporated by reference Exhibit 10.1 of the Registrant’s Current Report on Form 8-K filed on September 16, 2004
(11)	Incorporated by reference to Exhibit 10.2 of the Registrant’s Quarterly Report on Form 10-QSB for the Three Months Ended September 30, 2004 filed on November 15, 2004
(12)	Incorporated by reference to Exhibit 14.1 of the Registrant’s Annual Report on Form 10-KSB for the Year Ended December 31, 2004 filed on March 31, 2005
(13)	Incorporated by reference to Exhibit 4.1 of the Registrant’s Annual Report on Form 10-KSB for the Year Ended December 31, 2005 filed on April 7, 2006
(14)	Incorporated by reference to Exhibit 10.16 of the Registrant’s Quarterly Report on Form 10-QSB for the Three Months Ended September 30, 2007 filed on November 14, 2007
(15)	Incorporated by reference to Exhibit 10.17 of the Registrant’s Quarterly Report on Form 10-Q for the Three Months Ended June 30, 2008 filed on August 14, 2008
(16)	Incorporated by reference to Exhibit 3.1 of the Registrant’s Quarterly Report on Form 10-Q for the Three Months Ended September 30, 2008 filed on November 14, 2008
(17)	Incorporated by reference to Exhibit 3.2 of the Registrant’s Quarterly Report on Form 10-Q for the Three Months Ended September 30, 2008 filed on November 14, 2008
(18)	Incorporated by reference to Exhibit 10.18 of the Registrant’s Quarterly Report on Form 10-Q for the Three Months Ended September 30, 2008 filed on November 14, 2008
(19)	Incorporated by reference to Exhibit 10.19 of the Registrant’s Annual Report on Form 10-K for the Year Ended December 31, 2009 filed on March 31, 2010
(20)	Incorporated by reference to Exhibit 10.20 of the Registrant’s Annual Report on Form 10-K for the Year Ended December 31, 2011 filed on March 30, 2012

EX-10.19

Exhibit 10.19

CONVERTIBLE DEBENTURE PURCHASE AGREEMENT

     This Convertible Debenture Purchase Agreement ("Agreement") is entered into as of this ____ day of ________, 2013, by and between Nocopi Technologies, Inc., a Maryland corporation (the "Company"), and ___________________ ("Lender").

     1.   Purchase and Sale of Debentures.

          1.1  Authorization. Pursuant to this Agreement, Company has authorized the issuance of (i) a Convertible Debenture more specifically described in Exhibit A (the "Debenture"), and (ii) a warrant more specifically described in Exhibit B (the "Warrant").

          1.2  Issuance and Sale of Securities. Subject to the terms and

conditions hereof, Company agrees to issue and sell to Lender, and Lender agrees to accept delivery from Company, of a Debenture and a Warrant.

          1.3  Repayment Terms/Conversion.  Outstanding principal and accrued

interest on the Debenture shall be fully due and payable in compliance with the terms set forth in the Debenture.  At Lender's option, on the Maturity Date (as defined in the Debenture), Lender may choose to have all or part of the outstanding principal and accrued interest owing to Lender repaid in shares of Common Stock of Company at a conversion rate equal to five cents ($0.05) per share, as adjusted pursuant to Section 2 (the “Conversion Price”).  In the event Lender chooses to convert all or part of the outstanding principal and accrued interest into Common Stock of Company, Lender shall give written notice to Company of such conversion no less than fifteen (15) business days prior to such conversion, and shall surrender the original Debenture to Company, after which Lender will have no further rights under the Debenture as to the converted principal and interest, except the right to receive certificates representing the Common Stock.

     2.   Adjustment of Exercise Price and Number of Shares.  The Conversion Price and the number of shares of Common Stock subject to the Debenture shall be subject to adjustment from time to time as follows:

          2.1  Subdivision or Combination of Stock.  If at any time after the date of the Debenture Company shall subdivide its outstanding shares of Common Stock, the Conversion Price in effect immediately prior to such issuance or subdivision shall be proportionately reduced.  If the outstanding shares of Common Stock of Company shall be combined into a smaller number of shares, the Conversion Price in effect immediately prior to such combination shall be proportionately increased.

          2.2  Minimal Adjustments. No adjustment in the Conversion Price and/or the number of shares of Common Stock subject to the Debenture need be made if such adjustment would result in a change in the Conversion Price of less than one cent ($0.01) or a change in the number of subject shares of less than one-tenth (1/10th) of a share.

          2.3  Certificate as to Adjustments.  Upon any adjustment of the Conversion Price hereunder, the Company will compute such adjustment and prepare and furnish to Lender a certificate setting forth such adjustment and showing in detail the facts upon which such adjustment is based.

     3.   Representations and Warranties of Company.  Company represents and warrants the following as of the date hereof:

          3.1  Organization and Standing.  Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Maryland and has all requisite corporate power and authority to carry on its business as now conducted and as proposed to be conducted.

          3.2  Authorization.  All corporate action on the part of Company, its officers and directors necessary for the authorization, execution and delivery of this Agreement, the Debenture, and the Warrant has been or shall be taken, and this Agreement, the Debenture, and the Warrant, when executed and delivered, shall constitute the valid and legally binding obligations of Company, enforceable in accordance with their terms.

          3.3  Consents. No consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with any third party or any federal, state or local governmental authority on the part of Company is required in connection with the consummation of the transactions contemplated herein.

          3.4  No Conflicts.  Neither the execution and delivery of this Agreement, the Debenture, or the Warrant, by Company nor the consummation by Company of the transactions contemplated herein will (i) conflict with or result in any breach of any provision of the Certificate of Incorporation or Bylaws of Company, or (ii) violate in any material respect any statute, rule, regulation, order, writ, injunction, decree or arbitration award applicable to Company or its assets.

          3.5  Authorized Shares.  Until the later of the date on which (a) the Warrant has been exercised or has expired, or (b) the Maturity Date (as defined in the Debenture), Company shall maintain sufficient numbers of shares of authorized Common Stock to permit the full exercise of the Warrant and conversion of the Debenture.

     4.   Representations and Warranties of Lender. Lender represents and warrants to Company as follows:

          4.1  Authorization.  This Agreement, when executed and delivered by it, will constitute a valid and legally binding obligation of it, enforceable in accordance with its terms.

          4.2  Investment.  Lender is acquiring the Debenture to be sold by Company, the Warrant to be issued by Company, and any equity in Company which may be received therefrom for investment for its own account, not as a nominee or agent, and not with the view to, or for resale in connection with, any distribution thereof in violation of the Securities Act of 1933, as amended (the "Securities Act").  Lender understands that the Debenture to be sold by Company, the Warrant to be issued by Company, and any equity of Company to be purchased or received have not been, and will not be, registered under the Securities Act, by reason of a specific exemption from the registration provisions of the Securities Act, which depends upon, among other things, the bona fide nature of the investment intent and the accuracy of the Lender's representations as expressed herein.  Lender has substantial experience in evaluating and investing in private placement transactions of securities in “penny stock” companies similar to Company so that it is capable of evaluating the merits and risks of its investment in Company and

has the capacity to protect its own interests.  Company will use reasonable commercial efforts to register any shares of Common Stock issued pursuant to the Debenture and/or the Warrant within six (6) months of issuance; however, Lender understands and agrees that Lender must bear the economic risk of this investment indefinitely unless such shares to be issued pursuant to the Warrant and Lender’s conversion rights under the Debenture are registered pursuant to the Securities Act of 1933, as amended, or an exemption from registration is available.

     5.   Default.

          5.1  Events of Default.  With respect to the Debenture, the Warrants, and this Agreement, the following events are "Events of Default":

               (a)  Default shall be made by Company in the payment of principal of or any interest on the Debenture after fifteen (15) business days' written notice from Lender following the date when the same is due and payable; or

               (b)  Default shall be made in the due performance or observance of any other material covenant, agreement or provision herein, or in the Debenture, or any Warrant, to be performed or observed by Company, and such default shall have continued for a period of thirty (30) business days after written notice thereof to Company from Lender; or

               (c)  Company shall be involved in financial difficulties as evidenced:

                    (i) by Company filing a petition in bankruptcy or for reorganization or for the adoption of an arrangement under the United States Bankruptcy Code (as now or in the future amended, the "Bankruptcy Code");

                    (ii) by Company making a general assignment for the

benefit of its creditors;

                    (iii) by Company consenting to the appointment of a receiver or trustee for all or a substantial part of the property of Company or approving as filed in good faith a petition filed against Company under the Bankruptcy Code; or

                    (iv) by the commencement of a proceeding or case, without the application or consent of Company, in any court of competent jurisdiction, seeking (i) its liquidation, reorganization, dissolution or winding-up, or the composition or readjustment of its debts, (ii) the appointment of a trustee, receiver, custodian, liquidator or the like of Company or of all or any substantial part of its assets, or (iii) similar relief in respect of Company under any law relating to bankruptcy, insolvency, reorganization, winding-up or composition or adjustment of debts, and such proceeding or case set forth in (i), (ii), or (iii) above continues undismissed or uncontroverted, or an order, judgement or decree approving or ordering any of the foregoing being entered and continuing unstayed and in effect, for a period of sixty (60) business days.

          5.2  Acceleration.  If any one or more Events of Default described in Section 5.1 shall occur and be continuing, then Lender may, at Lender's option and by written notice to Company, declare the unpaid balance of the Debenture owing to Lender to be forthwith due and payable.

     6.  Miscellaneous.

          6.1  Notices. All notices, requests, demands and other communications under this Agreement, the Debenture, and the Warrant shall be in writing and shall be deemed to have been duly "given" on the date of delivery, if delivery is made personally or by confirmed facsimile transmission to the party to whom notice is to be given, or upon receipt if mailed by first class mail, either registered or certified, postage prepaid and properly addressed as follows:

          If to the Company:       9-C Portland Road

                                   West Conshohocken, PA 19428

                                   Attn:  President & Chief Executive Officer

          If to Lender:            ___________________________

    __________________________

    ___________________________

Either party may change its address for purposes of this Section by giving the other party written notice of the new address in the manner set forth above.

          6.2  Costs and Expenses.  Each party shall pay and bear its own costs and expenses, including without limitation all reasonable attorneys' fees and legal expenses, incurred in connection with the documentation of this Agreement, the Debenture, the Warrant, and any other documents contemplated hereunder.

          6.3  Binding Effect; Governing Law.  This Agreement, the Debenture, and the Warrant shall be binding upon and inure to the benefit of Company and Lender and their respective successors, except that no party shall have the right to assign its rights or obligations hereunder, in the Debenture, or the Warrants.  This Agreement, the Debenture, and the Warrant shall be governed by, and construed in accordance with, the internal laws of the Commonwealth of Pennsylvania (without reference to any principles of conflicts of laws).

          6.4  Jurisdiction.  Company and Lender each irrevocably submit to the non-exclusive jurisdiction of any court sitting in the County of Montgomery, Pennsylvania over any action, suit or proceeding arising out of or relating to this Agreement, the Debenture, or the Warrant.  Company and Lender agree that final judgment in any such action, suit or proceeding brought in such a court shall be conclusive and binding upon Company and Lender and may be enforced in any court of the jurisdiction to which Company or Lender is subject by a suit upon such judgment; provided, however, that service of process is affected upon Company or Lender in the manner permitted by law.

          6.5  Counterparts.  This Agreement may be executed in several counterparts, each of which shall constitute an original and all of which, when taken together, shall constitute one agreement.

     In Witness Whereof, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized as of the date first above written.

Company                             Nocopi Technologies, Inc.

                                    By:

                                       ---------------------

                                       Michael A. Feinstein, MD

                                       President

                                       and Chief Executive Officer

Lender                           

                                    By:

----------------------

                                    Name:   

                                         --------------------

                                    Title:  

                                          -------------------

EXHIBIT A

CONVERTIBLE DEBENTURE

         THIS DEBENTURE IS SUBJECT TO A CONVERTIBLE DEBENTURE PURCHASE AGREEMENT DATED _____________, 2013.

IMPORTANT NOTICE: THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED ("ACT"), OR ANY APPLICABLE STATE SECURITIES LAWS ("BLUE SKY LAWS"). ANY TRANSFER OF SUCH SECURITIES WILL BE INVALID UNLESS A REGISTRATION STATEMENT UNDER THE ACT AND AS REQUIRED BY BLUE SKY LAWS IS IN EFFECT AS TO SUCH TRANSFER OR IN THE OPINION OF COUNSEL SATISFACTORY TO THE BORROWER SUCH REGISTRATION IS UNNECESSARY IN ORDER FOR SUCH TRANSFER TO COMPLY WITH THE ACT AND BLUE SKY LAWS.

$[___________]

__________________, 2013

          For Value Received, Nocopi Technologies, Inc., a Maryland corporation ("Borrower"), under the terms of this Convertible Debenture ("Debenture") promises to pay to the order of ___________ ("Lender"), by check, in lawful money of the United States of America and in immediately available funds, the principal amount borrowed not to exceed $_______ (the "Loan") and such interest as will have accrued and been outstanding.  

          Capitalized terms used herein but not otherwise defined shall have the meanings given to them in a certain Convertible Debenture Purchase Agreement ("Purchase Agreement") dated of even date by and between Borrower and Lender.

     1.   Repayment. The Loan including accrued interest shall be due and payable on the date which is twenty four (24) months from the date hereof (the “Maturity Date”), subject to the right of Lender to accelerate after the occurrence and continuance of an Event of Default as defined in Section 5.1 of the Purchase Agreement. At Lender's option, on the Maturity Date, Lender may choose to have all or part of the outstanding principal and accrued interest repaid in shares of Common Stock of the Borrower at a conversion rate equal to five cents ($0.05) per share, subject to adjustment as set forth in Section 2 of the Purchase Agreement. In the event Lender chooses to convert outstanding principal and accrued interest into Common Stock of the Borrower, Lender shall give written notice to the Borrower of such anticipated conversion no less than fifteen (15) business days prior to the date of conversion, and shall surrender the original of this Debenture to Borrower.

     2.   Interest. Simple interest shall accrue on the outstanding principal amount of the Loan from the date funds are advanced until payment is received by Lender, which interest shall be equal to 7.0% per annum.

     3.   Governing Law. This Debenture shall be governed by, and construed and enforced in accordance with, the laws of the Commonwealth of Pennsylvania, excluding conflict of laws principles that would cause the application of laws of any other jurisdiction.

     4.   Successors. The provisions of this Debenture shall inure to the benefit of and be binding on any successor of Lender. This Debenture cannot be assigned by any party hereto.

                                        Nocopi Technologies, Inc.

                                        a Maryland corporation

                                        By:__________________________________

                                        Name:________________________________

                                        Title:_______________________________

EXHIBIT B

WARRANT TO PURCHASE

SHARES OF COMMON STOCK OF

NOCOPI TECHNOLOGIES, INC.

_______ Shares of Common Stock

     1.   Issuance. This Warrant is issued to ____________, by Nocopi Technologies, Inc., a Maryland corporation (the "Company").

     2.   Purchase Price; Number of Shares. The registered holder of this

Warrant (the "Holder"), commencing on a date twenty four (24) months from the date hereof (the “Exercise Commencement Date”), is entitled upon surrender of this Warrant with the subscription form annexed hereto as Appendix 1 duly executed, at the principal office of the Company, to purchase from the Company up to _______ fully paid and nonassessable shares (the "Shares") of Common Stock of the Company (the "Common Stock") at a price per share (the "Purchase Price") of two cents ($0.02).

     3.   Payment of Purchase Price.  The Purchase Price shall be paid in cash or by certified check or wire transfer at the time the Warrant is surrendered.

     4.   Fractional Shares.  No fractional shares shall be issued upon exercise of this Warrant. The Company shall, in lieu of issuing any fractional share, pay the holder entitled to such fraction a sum in cash equal to such fraction multiplied by the then effective Purchase Price.

     5.   Exercise; Expiration Date.  This Warrant may be exercised in whole or in part at any time commencing on the Exercise Commencement Date and ending at 5:00 p.m. New York Time on the seventh (7^th) anniversary of the date of this Warrant (the "Expiration Date") and shall be void thereafter.

     6.   Reserved Shares; Valid Issuance.  Company covenants that it will from and after the date hereof reserve and keep available such number of its authorized shares of Common Stock of the Company, free from all preemptive or similar rights therein, as will be sufficient to permit the exercise of this Warrant in full. Company further covenants that such shares as may be issued pursuant to such exercise will, upon issuance, be duly and validly issued, fully paid and nonassessable and free from all taxes, liens and charges with respect to the issuance thereof.

     7.   Stock Splits and Dividends.  If after the date hereof Company shall subdivide the Common Stock, by stock split or otherwise, or combine the Common Stock, or issue additional shares of Common Stock in payment of a stock dividend on the Common Stock, the number of shares of Common Stock issuable on the exercise of this Warrant shall forthwith be proportionately increased in the case of a subdivision or stock dividend, or proportionately decreased in the case of a combination, and the Purchase Price shall forthwith be proportionately decreased in the case of a subdivision or stock dividend, or proportionately increased in the case of a combination.

     8.   Mergers and Reclassifications.  If after the date hereof Company shall enter into any Reorganization (as hereinafter defined), then, as a condition of such Reorganization, lawful provisions shall be made, and duly

executed documents evidencing the same from Company or its successor shall be delivered to the Holder, so that the Holder shall thereafter have the right to purchase, at a total price not to exceed that payable upon the exercise of this Warrant in full, the kind and amount of shares of stock and other securities and property receivable upon such Reorganization by a holder of the number of shares of Common Stock which might have been purchased by the Holder immediately prior to such Reorganization.  For the purposes of this Section 8, the term "Reorganization" shall include any reclassification, capital reorganization or change of the Common Stock (other than as a result of a subdivision, combination or stock dividend provided for in Section 7 hereof), or any consolidation of the Company with, or merger of the Company into, another corporation or other business organization (other than a merger in which the Company is the surviving corporation and which does not result in any reclassification or change of the outstanding Common Stock), or any sale or conveyance to another corporation or other business organization of all or substantially all of the assets of the Company.

     9.  Issue Tax.  The issuance of certificates for the Shares upon the exercise of the Warrant shall be made without charge to the Holder of the Warrant for any issue tax (other than any applicable income taxes) in respect thereof; provided, however, that the Company shall not be required to pay any tax which may be payable in respect of any transfer involved in the issuance and delivery of any certificate in a name other than that of the then Holder of the Warrant being exercised.

     10.  Representations, Warranties and Covenants.  This Warrant is issued and delivered by Company and accepted by Holder on the basis of the following representations, warranties and covenants made by Company:

          (a)  Company has all necessary authority to issue, execute and deliver this Warrant and to perform its obligations hereunder. This Warrant has been duly authorized, issued, executed and delivered by Company and is the valid and binding obligation of Company, enforceable in accordance with its terms.

          (b)  The shares of Common Stock issuable upon the exercise of this Warrant have been duly authorized and reserved for issuance by Company and, when issued in accordance with the terms hereof, will be validly issued, fully paid and nonassessable.

          (c)  The issuance, execution and delivery of this Warrant do not, and the issuance of the shares of Common Stock upon the exercise of this Warrant in accordance with the terms hereof will not, (i) violate or contravene Company's certificate of incorporation or by-laws, or any law, statute, regulation, rule, judgment or order applicable to Company, or (ii) require the consent or approval of or the filing of any notice (other than, if any, post-issuance state securities laws filings) or registration with any person or entity.

     11.  No Voting or Dividend Rights.  Nothing contained in this Warrant shall be construed as conferring upon the Holder hereof the right to vote or to consent or to receive notice as a shareholder of Company or any other matters or any rights whatsoever as a shareholder of Company. No dividends or interest shall be payable or accrued in respect of this Warrant or the interest represented hereby or the shares purchasable hereunder until, and only to the extent that, this Warrant shall have been exercised.

     12.  Amendment.  The terms of this Warrant may be amended, modified or waived only with the written consent of the Holder and the Company.

     13.  Notices, Etc.

          (a)  Any notice or written communication required or permitted to be given to the Holder may be given by United States mail, by overnight courier or by facsimile transmission at the address most recently provided by the Holder to the Company or by hand, and shall be deemed received upon the earlier to occur of (i) receipt, (ii) if sent by overnight courier, then on the day after which the same has been delivered to such courier for overnight delivery, or (iii) if sent by United States mail, seventy-two (72) hours after the same has been deposited in a regularly maintained receptacle for the deposit of the United States mail.

          (b)  In case this Warrant shall be mutilated, lost, stolen or destroyed, Company shall issue a new warrant of like tenor and denomination and deliver the same (i) in exchange and substitution for and upon surrender and cancellation of any mutilated Warrant, or (ii) in lieu of any Warrant lost, stolen or destroyed, upon receipt of an affidavit of the Holder or other evidence reasonably satisfactory to Company of the loss, theft or destruction of such Warrant.

     14.  Descriptive Headings and Governing Law.  The descriptive headings of the several sections and paragraphs of this Warrant are inserted for convenience only and do not constitute a part of this Warrant. The provisions and terms of this Warrant shall be governed by and construed in accordance with the internal laws of the Commonwealth of Pennsylvania.

     15.  Successors and Assigns.  This Warrant shall be binding upon Company's successors and assigns and shall inure to the benefit of the Holder's successors and legal representatives.

Dated____________, 2013             Nocopi Technologies, Inc.

                                    ________________________________

                                    Name:___________________________

                                    Title:__________________________

Appendix 1

SUBSCRIPTION FORM

Date:  ____________, 20__

Nocopi Technologies, Inc.

9-C Portland Road

West Conshohocken, PA 19428

Attn: President

Dear Sir or Madam:

The undersigned hereby elects to exercise the Warrant issued to it by Nocopi Technologies, Inc. (the "Company") and dated ____________, 2013 (the "Warrant") in full and to purchase _______________________ shares of the Common Stock of Company (the "Shares") purchasable thereunder at a purchase price of Two Cents ($0.02) per Share or an aggregate purchase price of ________________ Dollars ($__________) (the "Purchase Price"). Pursuant to the terms of the Warrant the undersigned is delivering the Purchase Price herewith in full in cash or by certified check or wire transfer.  

     The undersigned also makes the representations and warranties set forth on Appendix 2 attached to the Warrant, knowing and intending that Company shall rely upon them.

     The certificate(s) for such shares shall be issued in the name of the undersigned or as otherwise indicated below:

                                        Very truly yours,

    Name (please print)

    _________________________

Appendix 2

TO WARRANT SUBSCRIPTION FORM

THIS AGREEMENT MUST BE COMPLETED, SIGNED AND RETURNED TO NOCOPI TECHNOLOGIES, INC. ALONG WITH THE SUBSCRIPTION FORM BEFORE THE SHARES ISSUABLE UPON EXERCISE OF THE WARRANT DATED ______________, 2013 WILL BE ISSUED.

_____________________, 20__

Nocopi Technologies, Inc.

9-C Portland Road

West Conshohocken, PA 19428

Attention: President

     The undersigned, ___________________ ("Purchaser"), intends to acquire ______________ shares of the Common Stock (the "Shares") of Nocopi Technologies, Inc. (the "Company") from Company pursuant to the exercise of a certain Warrant to purchase Shares held by Purchaser. The Shares will be issued to Purchaser in a transaction not involving a public offering and pursuant to an exemption from registration under the Securities Act of 1933, as amended (the "1933 Act") and applicable state securities laws. In connection with such purchase and in order to comply with the exemptions from registration relied upon by the Company, Purchaser represents, warrants and agrees as follows:

     1.   Purchaser is acquiring the Shares for its own account, to hold for investment, and Purchaser shall not make any sale, transfer or other disposition of the Shares in violation of the 1933 Act or the General Rules and Regulations promulgated thereunder by the Securities and Exchange Commission (the "SEC") or in violation of any applicable state securities law;

     2.  Purchaser has been advised that the Shares have not been registered under the 1933 Act or state securities laws on the ground that this transaction is exempt from registration, and that reliance by the Company on such exemptions is predicated in part on Purchaser's representations set forth in this letter;

     3. Purchaser has been informed that under the 1933 Act, the Shares must be held indefinitely unless it is subsequently registered under the 1933 Act or unless an exemption from such registration (such as Rule 144) is available with respect to any proposed transfer or disposition by Purchaser of the Shares;

     4.  The Company may refuse to permit Purchaser to sell, transfer or dispose of the Shares (except as permitted under Rule 144) unless there is in effect a registration statement under the 1933 Act and any applicable state securities laws covering such transfer, or unless Purchaser furnishes an opinion of counsel reasonably satisfactory to counsel for the Company, to the effect that such registration is not required;

     5. Purchaser has invested in the securities of “penny stock” companies and acknowledges that it is able to fend for itself, can bear the economic risk of its investment, and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the

investment in the Shares. Purchaser represents and warrants that it is an "accredited investor" within the meaning of Rule 501 of Regulation D of the 1933 Act.  

6. Purchaser has received or has had full access to all information Purchaser considers necessary or appropriate to make an informed investment decision with respect to the Shares, and/or has a preexisting personal or business relationship with the Company or certain of its officers and directors of a nature and duration that enables Purchaser to be aware of the character, business acumen and financial circumstances of the Company and such persons.

     Purchaser also understands and agrees that, in addition to any legend required pursuant to applicable state securities laws, there will be placed on the certificate(s) for the Shares, or any substitutions therefor, legends stating in substance:

     "These securities have not been registered under the Securities

     Act of 1933, as amended (the "Act"), or any applicable state

     securities laws, and may not be sold, offered for sale or

     transferred unless such sale or transfer is in accordance with

     the registration requirements of such Act and applicable laws or

     an exemption from the registration requirements of such Act and

     applicable laws is available with respect thereto."

     Purchaser has carefully read this letter and has discussed its requirements and other applicable limitations upon Purchaser's resale of the Shares with Purchaser's counsel.

                                        Very truly yours,

  Name (please print):

  ______________________

EX-10.20

Exhibit 10.20

LEASE AGREEMENT

1.

Parties.

THIS AGREEMENT, made this 12th day of December, 2013, by and between GMBC-4, LP, a Pennsylvania limited partnership (hereinafter called “Lessor”), of the one part, and Nocopi Technologies, Inc., a Maryland corporation (hereinafter called “Lessee”), of the other part (hereinafter, the “Lease”).

2.

Premises, Use, Term and Minimum Rent.

WITNESSETH THAT:   Lessor does hereby demise and let unto Lessee all that certain portion of the premises consisting of 6,126 +/- square feet identified as 480 Shoemaker Road Suite 104, hereinafter referred to as the “Demised Premises” and further described on the attached Exhibit “A” and being located in a 49,352 +/- square foot building  (the “Property”), in the Gulph Mills Business Center (the “Business Center”), in the Township of Upper Merion, in the County of Montgomery, Commonwealth of Pennsylvania, to be used and occupied as general office and warehouse space and for the mixing of ink technology and for no other purpose, for the term of five (5) years and three (3) months (plus the period between the delivery date, if it falls on a day other than the first day of a month, and the first day of the next month) (the “Term”) commencing upon January 1, 2014 (the “Commencement Date”), with the minimum rent to be paid in accordance with the rent schedule herein, payable without deduction or setoff,  in monthly installments, in advance during the said Term of this Lease, on the first day of each month, with the first installment of minimum rent and additional rent to be paid at the time of signing this Lease (the “Rent”).   The first rental payment to be made during the occupancy of the Demised Premises shall be adjusted to pro-rate a partial month of occupancy, if any, at the inception of this Lease.

3.

Rent Schedule.

Base Rent:

Monthly

Annual

January 1-March 31, 2014

Additional Rent Only

N/A

April 1, 2014 - March 31, 2015

$3,675.60

$44,107.20

April 1, 2015 – March 31, 2016

$3,777.70

$45,332.40

April 1, 2016 – March 31, 2017

$3,879.80

$46,557.60

April 1, 2017 – March 31, 2018

$3,981.90

$47,782.80

April 1, 2018 – March 31, 2019

$4,084.00

$49,008.00

Additional Rent: Additional Rental payments shall be due in addition to Base Rent payments and shall commence upon Delivery of Possession and are subject to adjustment in accordance with paragraph 9 herein.

4.

Place of Payment.

All Rent shall be payable without prior notice or demand to Lessor at the offices of Lessor’s Agent, Gambone Management Co.,  located at 1030 W. Germantown Pike, East Norriton, Pa. 19403 or at such other place as Lessor may from time to time designate by notice in writing.  

5.

Agency.

It is hereby expressly agreed and understood that NAI GEIS Realty Group, Inc.  is acting as agent for the Lessee; and said agent shall not in any event be held liable to the Lessor or to Lessee for the fulfillment or non-fulfillment of any of the terms or conditions of this lease, or for any action or proceedings that may be taken by the Lessor against Lessee, or by Lessee against the Lessor.

6.

Security Deposit.

Lessee does herewith deposit with Lessor the sum of $3,676.00 to be held as security for the full and faithful performance by Lessee of Lessee’s obligations under this Lease and for the payment of damages to the Demised Premises (the “Security Deposit”).  Except for such sum as shall be lawfully applied by Lessor to satisfy valid claims against Lessee arising from any Defaults (as hereinafter defined) under this Lease or by reason of damages to the Demised Premises caused by the actions or neglect of Lessee, or its agents, employees, or invitees actions or neglect, the Security Deposit shall be returned to Lessee at the expiration of the Term of this Lease or any renewal or extension thereof without interest. Should the entire Security Deposit, or any portion thereof, be appropriated and applied by Lessor for the payment of overdue Rent or other sums due and payable to Lessor by Lessee hereunder, then Lessee shall, within 5 days after written demand of Lessor, remit to Lessor a sufficient amount in cash to restore said security to the original sum deposited.  It is understood that no part of any Security Deposit is to be considered as the last rental due under the terms of this Lease.

7.

Holdover

This Lease shall terminate and Lessee shall deliver up and surrender possession of the Demised Premises to Lessor on the last day of the term of this Lease, and Lessee hereby waives the right to any notice of termination or notice to quit.

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It is expressly understood by Lessee that Lessee's right to possession of the Demised Premises under this Lease shall terminate at the expiration or earlier termination of the Term, and should Lessee continue thereafter to remain in possession, such tenancy shall construed to be a tenancy from month to month at one hundred fifty percent (150%) of the monthly minimum Rent then in effect on such expiration or termination date (other charges).  Lessor shall, should it so elect, be entitled to the benefits of all provisions of law with respect to summary recovery of possession from a holdover Lessee.  Lessee shall indemnify and save harmless Lessor from any claim, damage, expense, cost or loss which Lessor may incur by reason of any such holding over, including without limitation, any claim of a succeeding Lessee, or any loss by Lessor with respect to a lost opportunity to re-let the Demised Premises.

8.

Possession.

(a)

Delivery of Possession.  “Delivery of Possession” within the meaning of this Lease shall be accomplished by delivery to Lessee of a key to the Demised Premises after Lessor has substantially completed Lessor’s Work (as defined hereunder) as set forth in Exhibit “B”, if any.   

(b)

Inability to give Possession.  If Lessor is unable to give Lessee possession of the Demised Premises, as herein provided, by reason of the holding over of a previous occupant, or by reason of any cause beyond the control of the Lessor, the Lessor shall not be in Default, or liable for damages to the Lessee therefor, and during the period that the Lessor is unable to give possession, all rights and remedies of both parties hereunder shall be suspended, and if Lessor is unable for any reason to give possession of the Demised Premises within 150 days from the date of this Lease and commencement of Lessor’s Work (as defined hereunder), if any, subject to extensions for delays beyond Lessor’s control (including but not limited to damage and/or destruction and delays caused by Lessee) Lessor or Lessee shall have the option, by notice to the other party, to cancel this Lease and receive return of any prepaid Rents and security deposit in full and final settlement of any and all claims against Lessor, and this Lease shall be null and void and of no further force and effect.

9.

Additional Rent.

(a)   Taxes and Insurance.   Lessee shall pay as Additional Rent its proportionate share of real estate taxes and an administration fee of fifteen percent (15%) of the sum of said cost, and its proportionate share of the property and liability insurance, including loss of rent insurance.  Lessee’s proportionate share of taxes and insurance shall be calculated as a fraction, the numerator of which is the square footage of the Demised Premises and the denominator of which is the square footage of the Building, which is approximately 12.41%.

The cost for taxes and insurance shall be payable monthly by Lessee commencing with the due date of first rental payment, without deduction or setoff.  Lessor shall establish the monthly amount due based on previous year’s bills and shall have the right to bill Lessee for any shortfall at the end of each calendar year.  Lessor shall credit any overpayment from Lessee against future taxes and insurance costs to be due.

(b)   Common Area Maintenance.  During the term of this Lease, any renewals, extensions, or expansions thereof, Lessee shall be responsible for its proportionate share of the common area maintenance and repairs applicable to the Demised Premises, including but not limited to the macadam, outside lighting, snow removal, trash removal (subject to subparagraph (c) below), landscaping, cleaning of debris and an administration fee of 15%of the sum of said costs (“CAM”).  Lessee’s proportionate share of CAM shall be calculated as a fraction, the numerator of which is the square footage of the Demised Premises and the denominator of which is the square footage of the Building , which is approximately 12.41%, and shall be paid by the Lessee monthly at the same time as each installment of minimum rent is payable hereunder.  Lessor will calculate the expenses at the end of each calendar year, provide Lessee with a breakdown of expenses, and give a credit for any overpayment or bill for any shortfall in amount paid by Lessee.  If there is a shortfall in amount paid, Lessee shall pay the amount of the shortfall within fifteen (15) days after receipt of the bill from Lessor or Lessor’s agent.   

The cost for CAM shall be payable monthly by Lessee commencing the due date of first rental payment, without deduction or setoff.  Lessor shall establish the monthly amount due based on previous year’s bills and shall have the right to bill Lessee for any shortfall at the end of each calendar year.  Lessor shall credit any overpayment from Lessee against future CAM costs to be due.

Lessor covenants and agrees to keep and retain books and records supporting the amount and computation of all Additional Rent under this Lease for at least two (2) years, and permit Lessee or its financial advisor or accountant to examine, audit and photocopy such books and records from time to time at Lessee’s expense (but not more frequently than once in any consecutive twelve month period) during Lessor’s normal business hours and upon at least thirty (30) days prior notice.  If, upon any such inspection, a discrepancy of greater than five percent (5%) is found between the charge assessed against Lessee and the actual charge that is determined to have been due to Lessor for such period, then Lessor will promptly reimburse Lessee for all reasonable internal and actual out-of-pocket costs incurred in conducting such inspection, including but not limited to the financial advisor’s/accountant’s fees.  If the charge assessed against Lessee is less than the actual charge then Lessee will promptly reimburse Lessor for all reasonable internal and actual out-of-pocket costs incurred in preparing for such inspection, including but not limited to any outside vendor used to copy the information.

(c)    Refuse.  Lessor shall provide for trash removal service as part of the CAM.  Lessor shall have the right to exclude trash removal from CAM and instead provide or designate a separate container or service for collection of Lessee’s trash, so long as designated service rates are reasonable (in which event Lessee shall pay for trash collection directly to the vendor).   Lessee, at its expense, agrees to comply with each present and future law,

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ordinance and regulation regarding the collection, sorting, separation or recycling of waste products, garbage, refuse and trash (collectively, "Wastes") in or about the Demised Premises.  Lessee shall sort and separate Wastes into such categories as required by law.  Each separately sorted category of Wastes shall be placed in separate receptacles designated and approved by Lessor.  Such separate receptacles shall be removed from the Demised Premises in accordance with a collection schedule prescribed by law or as otherwise prescribed by Lessor.  Lessor reserves the right to refuse to collect or accept from Lessee any Wastes that are not separate and sorted as required by law, and to require Lessee to arrange for such collection at Lessee's expense, utilizing a contractor satisfactory to Lessor.

In the event Lessee’s trash use is excessive, as determined by Lessor in its reasonable discretion, Lessor may designate a separate container or service for collection of Lessee’s trash, and the costs shall be paid by Lessee, so long as designated service rates are reasonable.   Lessee, at its expense, agrees to comply with each present and future law, ordinance and regulation regarding the collection, sorting, separation, disposal and/or recycling of medical waste in or about the Demised Premises.

(d)   Estimate for Common Area Maintenance, Taxes and Insurance.   Lessor estimates in good faith and with a reasonable basis to do so, but without any warranty or guaranty, that the first year’s additional rent for CAM, taxes and insurance (“Additional Rent”) will be approximately $1,021.00 per month; $12,252.00 per year based on $2.00 PSF.

(e)   Utilities.    Lessee shall be solely responsible for, agrees to contract with, and promptly pay all charges for utilities including but not limited to heat, electricity, gas, water, sewer, telephone, or any other utility or other service rendered, used or consumed in the Demised Premises by Lessee, and service inspections made thereof.  Lessee also accepts the responsibility for the connection and disconnection of these utilities and the maintenance thereof, in the event maintenance is required as a result of Lessee’s use, misuse, or abuse.  Lessee agrees to contact all appropriate utility companies to transfer all metering into Lessee’s name as of the commencement date of this Lease.  Lessee agrees to be responsible for all costs, including, but not limited to, service charges related to transferring of utility accounts into Lessee’s name and the cost of utilities commencing as of the Delivery of Possession of the Demised Premises.  

Charges for said herein mentioned utility consumption shall emanate either from the utility company if there is a meter to measure Lessee’s use of any such utility, or, if not, Lessor shall pay the utility company bills directly and submit an invoice to Lessee for reimbursement for said utility consumption based on Lessee’s proportionate share of the Building, which shall be calculated as a fraction, the numerator of which is the square footage of the Demised Premises and the denominator of which is the square footage of the Building.  Lessor shall have no liability to Lessee for disruption of any utility service, and in no event shall such disruption constitute constructive eviction or entitle Lessee to an abatement of Rent or other charges.

Lessee shall pay Lessor all such amounts billed by Lessor within 15 days after receipt by Lessee of copies of bills.

(f)   Damages for Default.   Lessee agrees to pay as Rent, in addition to the minimum base rental herein reserved, any and all sums which may become due by reason of the failure of Lessee to comply with all of the covenants of this Lease and any and all damages, costs and expenses which the Lessor may suffer or incur by reason of any default of the Lessee or failure on his part to comply with the covenants of this Lease, and each of them, and also any and all damages to the Demised Premises caused by any act or neglect of the Lessee.

10.

Affirmative Covenants of Lessee.

Lessee covenants and agrees that it will without demand:

(a)   Payment of Rent.   Pay the Rent and all other charges herein reserved as Rent at the times and at the place that the same are payable, without fail; and if Lessor shall at any time or times accept said Rent or Rent charges after the same shall have become delinquent, such acceptance shall not excuse delay upon subsequent occasions, or constitute or be construed as a waiver of any of Lessor’s rights.   Lessee agrees that any charge or payment herein reserved, included, or agreed to be treated or collected as Rent and/or any other charges, expenses or costs herein agreed to be paid by Lessee may be proceeded for and recovered by Lessor by legal process in the same manner as Rent due in and arrears.

(b)   Cleaning, Repairing, etc.   Keep the Demised Premises clean and free from all refuse; replace all glass windows, doors, etc. broken during the Lease Term and extensions thereof ; keep all drain and waste pipes open; keep the Demised Premises sufficiently heated to prevent freezing of water in pipes and fixtures;  repair all damage to plumbing and to the Demised Premises in general; keep the same in good order and repair as upon Lessor’s delivery; reasonable wear and tear and casualty not caused by Lessee, its agents, employees or invitee’s actions or neglect excepted.  The Lessee agrees to surrender the Demised Premises in the same condition in which Lessee has herein agreed to keep the same during the continuance of this Lease.

(c)   Requirements of Public Authorities.   Comply with any and all requirements of any of the constituted public authorities, and with the terms of any State or Federal statute or local ordinance or regulation applicable to Lessee, or its use of the Demised Premises, or the repair, maintenance, equipping, or design thereof, and indemnify and save Lessor harmless from penalties, fines, costs or damages resulting from failure to do so.

(d)   Fire.   Use every reasonable precaution against fire.

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(e)   Rules and Regulations.   Comply with reasonable rules and regulations, not inconsistent with this Lease, of Lessor promulgated as hereinafter provided and the Declaration of Gulph Mills Business Park Condominium dated May 5, 2000, as may be amended, recorded in Deed Book 5315 Page 2001 at the Montgomery County Recorder of Deeds.  Lessor shall use its best commercial efforts to enforce the rules and regulations promulgated under this Lease on a non-discriminatory basis, and in a manner that is fully consistent with the covenant of quiet enjoyment.

(f)   Surrender of Possession.   Peacefully deliver up and surrender possession of the Demised Premises to the Lessor at the expiration or sooner termination of this Lease, promptly delivering to Lessor at its office all keys for the Demised Premises.

(g)   Notice of Fire, etc.   Give to Lessor prompt written notice of any accident, fire or damage occurring on or to the Demised Premises.

(h)  Condition of Pavement.   Be responsible for the condition of the pavement and curb during the Term of this Lease; shall keep the pavement free from snow and ice; and shall be and hereby agrees that Lessee is solely liable for any accidents, due or alleged to be due to their defective condition, or to any accumulations of snow and ice.

(i)   Agency on Removal.   Agree that if, with the permission in writing of Lessor, Lessee shall vacate or decide at any time during the Term of this Lease, or any renewal thereof, to vacate the herein Demised Premises prior to the expiration of this Lease, or any renewal thereof, Lessee will not cause or allow any other agent to represent Lessee in any sub-letting or re-letting of the Demised Premises other than an agent approved by the Lessor and that should Lessee do so, or attempt to do so, the Lessor may remove any signs that may be placed on or about the Demised Premises by such other agent without any liability to Lessor or to said agent, the Lessee assuming all responsibility for such action.

(j)  Mechanic’s Liens.  Do all things reasonably necessary to prevent the filing of any mechanic's or other liens against the Demised Premises or any part thereof or against the Lessor’s property by reason of work, labor, services or materials supplied or claimed to have been supplied to Lessee, or anyone holding the Demised Premises, or any part thereof, through or under Lessee.  If any such lien shall at any time be filed against the Demised Premises or Lessor’s property, Lessee shall cause the same to be discharged of record, by bonding or otherwise, within fifteen (15) days after the date of filing of the same.  If Lessee shall fail to discharge such lien within such period, then, in addition to any other right or remedy of Lessor resulting from Lessee's said Default, Lessor may, but shall not be obligated to, discharge the same either by paying the amount claimed to be due or by procuring the discharge of such lien by giving security or in such other manner as is, or may be, prescribed by law.  Lessee shall repay to Lessor, as Additional Rent, on demand, sums disbursed or deposited by Lessor pursuant to the foregoing, including Lessor's costs, expenses and reasonable attorneys' fees incurred by Lessor in connection therewith, plus interest at the rate of fifteen percent (15%) or the highest rate permitted by law from the date of payments by Lessor until repaid by Lessee.  Nothing contained herein shall imply any consent or agreement on the part of Lessor to subject Lessor's estate to liability under any mechanic's or other lien law.

(k)  Loading.  Perform all loading and unloading of goods only at such times in the areas and through the entrances as may be designated for such purposes by Lessor from time to time.  Lessee will not permit any trailers or trucks to remain parked overnight in any area of the Business Center, whether loaded or unloaded.

(l)  Parking.  Require Lessee's employees to park their cars only in those portions of the parking areas or such other places as are designated for that purpose by Lessor.  Lessee agrees that, from time to time upon written notice from Lessor, Lessee will within five (5) days furnish Lessor with the State automobile license numbers assigned to Lessee's cars and the cars of Lessee's directors, officers, employees, agents, contractors, sub-lessees, licensees and concessionaires that work at the Demised Premises.  Violation of this clause after notice shall render Lessee liable to a parking fee at the rate of TEN and 00/100 DOLLARS ($10.00) per day, (which parking fee shall be in addition to and not in limitation of other remedies) per car, collectible as Additional Rent hereunder, and Lessor may without liability and at Lessee's sole cost and expense arrange for the towing of such improperly parked cars.

(m)  Attorney’s fees.  Pay all costs, expenses and reasonable attorneys' fees that may be incurred or paid by Lessor in enforcing the covenants, conditions and agreements of this Lease, provided Lessor prevails in its action to enforce the covenants, conditions and agreements of this Lease; provided, however, that Lessor shall pay all costs, expenses and reasonable attorney’s fees that may be incurred or paid by Lessee in the event Lessee prevails in any action to enforce the covenants, conditions and agreements of this Lease.

11.

Negative Covenants of Lessee.

Lessee covenants and agrees that it will do none of the following things without first obtaining the consent, in writing of Lessor, and without providing Lessor with reimbursement for any cost and expenses incurred or incidental to Lessee’s proposed action.

(a)   Use of Premises.   Occupy the Demised Premises in any other manner or for any other purpose than as above set forth.

Use or suffer or permit the use of the Demised Premises or any part for any purpose or use in violation of any law or ordinance or any regulation of any governmental authority, or in any manner that will constitute an unreasonable annoyance to any occupant of the Business Center, or a nuisance, or that will injure the reputation of

4

the Business Center or any part thereof, or for any hazardous purpose, or in any manner that will violate, suspend, void or serve to increase the insurance premium rate of, or make inoperative, any policy or policies of insurance of any kind whatsoever at the time carried on any property, buildings or improvements in the Business Center or any part thereof, including the Demised Premises.  In the event of a breach of this covenant, in addition to all other remedies of Lessor hereunder, Lessee agrees to pay to Lessor as Additional Rent any and all increase or increases of premiums on insurance carried by Lessor on the Demised Premises or the building of which the same may be a part

(b)   Assignment and Subletting.   Without the prior written consent of the Lessor which will not be unreasonably withheld, delayed or conditioned, assign, mortgage or pledge this Lease or under-let or sub-lease the Demised Premises, or any part thereof, or permit any other person, firm or corporation to occupy the Demised Premises, or any part thereof; nor shall any assignee or sub-lessee assign, mortgage or pledge this Lease or such sub-lease, without an additional written consent by the Lessor, and without such consent no such assignment, mortgage or pledge shall be valid.  If the Lessee becomes insolvent, or makes an assignment for the benefit of creditors, or if a petition in bankruptcy is filed by or against the Lessee or a bill in equity or other proceeding for the appointment of a receiver for the Lessee is filed, or if the real or personal property of the Lessee shall be sold or levied upon by any Sheriff, Marshal or Constable, the same shall be a violation of this covenant.

(c)   Signs.   Place or allow to be placed any stand, booth, sign or showcase upon the doorsteps, vestibules or outside walls or pavements of said Demised Premises, or paint, place, erect or cause to be painted, placed or erected any sign, projection or device on or in any part of the Demised Premises without an additional written consent by the Lessor, and without such consent no such sign, projection or device shall be valid.  Lessee shall remove any sign, projection or device painted, placed or erected, if permission has been granted and restore the walls, etc., to their former conditions, at or prior to the expiration or earlier termination of this Lease.   In any case of the breach of this covenant (in addition to all other remedies given to Lessor in case of the breach of any conditions or covenants of this Lease), Lessor shall have the privilege of removing said stand, booth, sign, show case, projection or device, and restoring said walls, etc., to their former condition, and Lessee, at Lessor’s option, shall be liable to Lessor for any and all cost and expenses so incurred by Lessor.   In requesting Lessor’s consent for building and entrance signage, Lessee shall provide signage specifications and plans for Lessor’s review, in accordance with Upper Merion Township’s code requirements.  Any signage permitted to be erected will be at Lessee’s sole cost, subject to Lessor’s approval and the applicable code and permits issued by Upper Merion Township.

(d)   Alterations and/or Improvements.   Make any alterations, improvements, or additions to the Demised Premises.  All alterations, improvements, additions or fixtures, whether installed before or after the execution of this Lease, shall remain upon the Demised Premises at the expiration or sooner termination of this Lease, and become the property of the Lessor, unless Lessor shall, prior to the termination of this Lease, have given written notice to Lessee to remove the same, in which event Lessee will remove such alterations, improvements and additions and restore the Demised Premises to the same good order and condition in which they now are.  Should Lessee fail so to do, Lessor may do so, collecting, at Lessor’s option, the cost and expense thereof from Lessee as Additional Rent.

Prior to the commencement of any alterations and/or improvements to the Demised Premises Lessee agrees to submit to Lessor: (i) any plans and specifications covering all work which Lessee proposes to do in the Demised Premises; (ii) mechanics lien waivers signed by Lessee’s contractors, along with the filing fee; and (iii) certificates of insurance from Lessee’s contractors (naming Lessor, its agent, and Lessor’s mortgagee as additional named insured) in such amounts as Lessor may reasonably require.  Such plans and specifications shall be prepared in such detail as Lessor may require, and Lessee agrees not to commence any work until Lessor has approved such plans and specifications and Lessee's contractors in writing.  Lessor's review and approval of Lessee's plans and specifications are for compliance with Lessor's criteria only, and this approval does not relieve Lessee of responsibility for compliance with the Lease, field verification of dimensions and existing conditions, coordination with other trades, job conditions and compliance with all governing codes and regulations applicable to Lessee's work.  No responsibility for proper engineering, safety, design of facilities or compliance with all applicable governing codes and regulations is implied or inferred on the part of Lessor by any such approval.

Additionally, Lessee shall engage Lessor’s sprinkler contractor, at Lessee’s cost, to perform any change to the existing sprinkler system or heads in the Demised Premises, if applicable.

(e)   Machinery.   Not suffer, allow, or permit any vibration, noise, light, noxious odor, or other effect to emanate from the Demised Premises, or from any machine or other installation therein that, in Lessor’s reasonable opinion, is harmful to the building or disturbing to other tenants occupying other parts thereof.  Upon notice by Lessor to Lessee that any of the aforesaid is occurring, Lessee agrees to forthwith remove or control the same.

(f)   Weights.   Place any weights in any portion of the Demised Premises beyond the safe carrying capacity of the structure.

(g)   Fire Insurance.   Do or suffer to be done, any act, matter or thing objectionable to the fire insurance companies whereby the fire insurance or any other insurance now in force or hereafter to be placed on the Demised Premises, or any part thereof, or on the building of which the Demised Premises may be a part, shall become void or suspended, or whereby the same shall be rated as a more hazardous risk than at the date of the execution of this Lease, or employ any person or persons objectionable to the fire insurance companies or carry or have any benzine or explosive matter of any kind in and about the Demised Premises.  In case of a breach of this covenant (in addition to all other remedies given to Lessor in case of the breach of any conditions or covenants of

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this Lease) Lessee agrees to pay Lessor as Additional Rent any and all increase or increases of premiums on insurance carried by Lessor on the Demised Premises, or any part thereof, or on the building of which the Demised Premises may be a part, caused in any way by the occupancy of Lessee.

(h)   Removal of Goods.   Remove, attempt to remove or manifest an intention to remove Lessee’s goods or property from or out of the Demised Premises otherwise than in the ordinary and usual course of business, without having first paid and satisfied Lessor for all Rent which may become due during the entire Term of this Lease.

(i)   Vacate Premises.   Vacate, abandon or desert said Demised Premises during the term of this lease, or permit the same to be empty and unoccupied.

(j)  Obstructions.   Use the sidewalks, parking lot and/or walkways for the display, storage, placement, and/or sale of any merchandise, equipment, or devices.

(k)  Advertising.  Use any objectionable advertising medium within the Business Center or in or about the Demised Premises, including, without limiting the generality of the foregoing, flashing lights, search lights, handbills, loudspeakers, phonographs, public address systems, sound amplifiers, radios or televisions which are visible or can be heard or experienced outside the Demised Premises.  

Solicit business for itself or permit its licensees or concessionaires to solicit business, distribute handbills, engage in public sales demonstrations, itinerant vending or other activity, whether similar or dissimilar to any of the foregoing, in the parking areas, common areas or other common facilities.

Advertise or conduct an auction, fire, bankruptcy and/or going-out-of-business sale in the Demised Premises or any portion thereof.

(l)  Awnings.  Attach any awning, antenna or other projection to the roof or the outside walls of the Demised Premises or the building of which the same are a part.

12.

Lessor’s Rights.

Lessee covenants and agrees that Lessor shall have the right to do the following things and matters in and about the Demised Premises:

(a)   Inspection of Premises.   At all reasonable times, with reasonable prior notice to Lessee and without disturbing Lessee’s tenancy, personally or their duly authorized agents to go upon and inspect the Demised Premises and every part thereof, and/or at Lessor’s option to make repairs, alterations and additions to the Demised Premises or the building of which the Demised Premises is a part.

(b)  Rules and Regulations.  At any time or times and from time to time make such reasonable rules and regulations that do not adversely affect Lessee’s tenancy as may be necessary or desirable, in Lessor’s opinion, for the safety, care, and cleanliness of the Demised Premises and/or of the building of which the Demised Premises is a part and of real and personal property contained therein and for the preservation of good order.  Such rules and regulations shall, when communicated in writing to Lessee, form a part of this Lease.

(c)   Sale or Rent Sign/Prospective Purchasers or Tenants.   To display a “For Sale” sign at any time, and also, after notice from either party of intention to terminate this Lease, or at anytime within six months prior to the expiration of this Lease, a “For Rent” sign; or both “For Rent” and “For Sale” signs; and all of said signs shall be placed upon such part of the Demised Premises as Lessor may elect and may contain such matter as Lessor shall require.  Persons authorized by Lessor may inspect the Demised Premises at reasonable hours during the said periods.

(d)   Discontinue Facilities and Service.   Lessor may discontinue at any time, any or all facilities furnished and services rendered by Lessor not expressly covenanted for herein, or that are necessary or appropriate for Lessee’s quiet enjoyment of the Premises and Adjacent Area; or required to be furnished or rendered by law; it being understood that they constitute no part of the consideration for this Lease.

13.

Responsibility of Lessee.

(a)

Lessee agrees to relieve and hereby relieves the Lessor from all liability by reason of any injury or damage to any person or property in the Demised Premises, whether belonging to the Lessee or any other person caused by any fire, breakage, or leakage in any part or portion of the building of which the Demised Premises is a part or from water, rain or snow that may leak into, issue or flow from any part of the said Demised Premises, or of the building of which the Demised Premises is a part, from the drains, pipes, or plumbing work of the same, or from any place or quarter, unless such breakage, leakage, injury or damage be caused by or result from the negligence or intentional acts of Lessor.

(b)

Lessee also agrees to relieve and hereby relieves the Lessor from all liability by reason of any damage or injury to any property or to Lessee or Lessee’s guests, servants or employees which may arise from or be due to the use, misuse or abuse of all or any of the elevators, hatches, openings, stairways, hallways of any kind whatsoever which may exist or hereafter be erected or constructed on the said Demised Premises or the sidewalks surrounding the building of which may arise from defective construction, failure of water supply, light, power, electric wiring, plumbing or machinery, wind, lightning, storm or any other cause whatsoever on the said Demised

6

Premises or the building of which the Demised Premises is a part, unless such damage, injury, use, misuse or abuse be caused by or result from the negligence or intentional acts of the Lessor.

14.

Responsibility of Lessor.

(a)   Total Destruction of Premises.   In the event the Demised Premises are totally destroyed or so damaged by fire or other casualty that, in the opinion of a licensed architect retained by Lessor, the same cannot be repaired and restored within 180 days from the date of such damage or destruction (subject to extensions for delays beyond Lessor’s control) Lessee or Lessor shall have the option to terminate this Lease and the Rent shall abate for the balance of the Term.

(b)   Partial Destruction of the Premises.   If the damage be only partial and such that the Demised Premises can be restored, in the opinion of a licensed architect retained by Lessor, to approximately their former condition within 180 days from the date of such damage or destruction (subject to extensions for delays beyond Lessor’s control) Lessor may, at Lessor’s option, restore the same with reasonable promptness, reserving the right to enter upon the Demised Premises for that purpose.   Lessor also reserves the right to enter upon the Demised Premises whenever necessary to repair damage caused by fire or other casualty to the building of which the Demised Premises is a part, even though the effect of such entry be to render the Demised Premises or a part thereof untenable.   In either event the rent shall be apportioned and suspended during the time Lessor is in possession, taking into account the proportion of the Demised Premises rendered untenable and the duration of Lessor’s possession.  If a dispute arises as to the amount of rent due under this clause, Lessee agrees to pay the full amount claimed by Lessor, but Lessee shall have the right to proceed by law to recover the excess payment, if any.

(c)   Repairs by Lessor.   Lessor shall make such election to repair the Demised Premises or terminate this Lease by giving notice thereof to Lessee at the Demised Premises within thirty days from the date the Demised Premises have been destroyed or damaged by fire or other casualty.  

(d)   Damage for Interruption of Use.   Except to the extent hereinbefore provided, Lessor shall not be liable for any damage, compensation, or claim by reason of the necessity of repairing any portion of the building, the interruption in the use of the Demised Premises, any inconvenience or annoyance arising as a result of such repairs or interruption, or the termination of this lease by reason of damage or destruction of the Demised Premises.

(e)   Representation of Condition of Premises.   Except as otherwise provided in this Lease, (a) Lessor has let the Demised Premises in their present “As Is” condition and without any representations, other than those specifically endorsed hereon by Lessor, through its officers, employees, servants and/or agents, and (b) Lessor is under no duty to make repairs, alterations, or decorations at the inception of this Lease or at any time thereafter unless such duty of Lessor shall be set forth in writing endorsed hereon.

(f)    Zoning.   It is understood and agreed that the Lessor hereof does not warrant or undertake that the Lessee shall be able to obtain a permit under any Zoning Ordinance or Regulation for such use as Lessee intends to make of the said Demised Premises, and nothing in this Lease contained shall obligate the Lessor to assist Lessee under any Zoning Ordinance or Regulation, this Lease shall not terminate without Lessor’s consent, and the Lessee shall use the Demised Premises only in a manner permitted under such Zoning Ordinance or Regulation.

15.

Miscellaneous Agreements and Conditions.

(a)   Effect of Repairs on Rental.   No contract entered into or that may be subsequently entered into by Lessor with Lessee, relative to any alterations, additions, improvements or repairs, nor the failure of Lessor to make such alterations, additions, improvements or repairs as required by any such contract, nor the making by Lessor or its agents or contractors of such alterations, additions, improvements or repairs shall in any way affect the payment of the Rent or said other charges at the time specified in the Lease, except as otherwise provided in this Lease or to the extent and in the manner hereinbefore provided.

(b)   Waiver of Custom.   It is hereby covenanted and agreed, any law, usage or custom to the contrary notwithstanding, that Lessor shall have the right at all times to enforce the covenants and provisions of  this Lease in strict accordance with the terms hereof, notwithstanding any conduct or custom on the part of the Lessor in refraining from so doing at any time or times; and, further, that the failure of Lessor at any time or times to enforce its rights under said covenants and provisions strictly in accordance with the same shall not be construed as having created a custom in any way or manner contrary to the specific terms, provisions and covenants of this Lease or as having in any way or manner modified the same.

(c)   Conduct of Lessee.   This Lease is granted upon the express condition that Lessee and/or the occupants of the Demised Premises shall not conduct themselves in a manner which is improper or objectionable, and if at any time during the Term of this Lease or any extension or continuation thereof Lessee or any occupier of the said Demised Premises shall have conducted himself in a manner which is improper or objectionable, Lessee shall be taken to have broken the covenants and conditions of this Lease, and Lessor will be entitled to all of the rights and remedies granted and reserved herein, for the Lessee’s failure to observe all of the covenants and conditions of this Lease.

(d)   Failure of Lessee to Repair.   In the event of the failure of Lessee promptly to perform the covenants of section 10(b) hereof, Lessor may go upon the Demised Premises and perform such covenants, the cost thereof, at the sole option of Lessor, to be charged to Lessee as additional and delinquent Rent.

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(e)   Waiver of Subrogation.   Lessor and Lessee hereby agree that all insurance policies which each of them shall carry to insure the Demised Premises and the contents therein against casualty loss shall contain waivers of the right of subrogation against Lessor and Lessee herein, their heirs, administrators, successors, and assigns.

(f)   

Consent.   With respect to any provision of this Lease which provides that Lessor shall not unreasonably withhold or unreasonably delay any consent or approval, Lessee shall not be entitled to make any claim for, and Lessee hereby expressly waives, any claim for damages, it being expressly understood and agreed that Lessee’s sole remedy therefor shall be an action for specific performance.

(g)  Recordation.  This Lease, or a memorandum thereof, shall not be recorded in any office of public record.

16.

Remedies of Lessor.

If the Lessee

(a)

Does not pay in full when due any and all installments of Rent and/or any other charge or payment herein reserved, included, or agreed to be treated or collected as Rent and/or any other charge, expense, or cost herein agreed to be paid by the Lessee; or

(b)

Violates or fails to perform or otherwise breaks any covenant or agreement herein contained; or

(c)

Vacates the Demised Premises or removes or attempts to remove or manifests an intention to remove any goods or property therefrom otherwise than in the ordinary and usual course of business without having first paid and satisfied the Lessor in full for all Rent and other charges then due or that may thereafter become due until the expiration of the then current Term, above mentioned; or

(d)

Becomes insolvent, or makes an assignment for the benefit of creditors, or if a petition in bankruptcy is filed by or against Lessee or a complaint in equity or other proceedings for the appointment of a receiver for Lessee is filed, or if proceedings for reorganization or for composition with creditors under any State or Federal law be instituted by or against Lessee, or if the real or personal property of Lessee shall be levied upon or be sold, or if for any other reason Lessor shall, in good faith, believe that Lessee’s ability to comply with the covenants of this Lease, including the prompt payment of Rent hereunder, is or may become impaired; or

(e)

If Lessee fails more than twice within any twelve (12) month period to observe or perform any covenant condition, or agreement of this Lease (including without limitation the payment of Rent), regardless of whether such default shall be cured by Lessee, the third default shall at the election of Lessor, in its sole and absolute discretion, be deemed a non-curable event of Default.

(f)

The death of Lessee or any guarantor of Lessee’s obligations; or the commencement of steps or proceedings toward the dissolution, winding up, or other termination of the existence of Lessee or of any guarantor of Lessee’s obligations.

(Sections 16(a) through 16(f) being collectively referred to herein as a “Default”) thereupon:

(1)  The whole balance of Rent and other charges, payments, costs, and expenses herein agreed to be paid by Lessee, or any part thereof, and also all costs and officer’s commissions including watchmen’s wages shall be taken to be due and payable and in arrears as if by the terms and provisions of this Lease said balance of Rent and other charges, payment, taxes, costs and expenses were on that date, payable in advance.   Further, if this Lease or any part thereof is assigned, or if the Demised Premises, or any part thereof is sub-let, Lessee hereby irrevocably constitutes and appoints Lessor as Lessee’s agent to collect the rents due from such assignee or sub-lessee and apply the same to the Rent due hereunder without in any way affecting Lessee’s obligation to pay any unpaid balance of Rent due hereunder; or

(2)   At the option of Lessor, this Lease and the terms hereby created shall terminate and become absolutely void without any right on the part of Lessee to reinstate this Lease by payment of any sum due or by other performance of any condition, term, or covenant broken; whereupon, Lessor shall be entitled to recover damages for such breach in an amount equal to the amount of Rent reserved for the balance of the Term of this Lease, less the fair rental value of the said Demised Premises for the remainder of the Lease Term.

17.

Further Remedies of Lessor.

In the event of any Default as above set forth in Section 16, Lessor, or its agents, at Lessor’s option:

(a)

May let said Demised Premises or any part or parts thereof to such person or persons as may, in Lessor’s discretion be best; and Lessee shall be liable for any loss of Rent for the balance of the then current term.  Any such re-entry or re-letting by Lessor under the terms hereof shall be without prejudice to Lessor’s claim for actual damages, and shall under no circumstances, release Lessee from liability for such damages arising out of the breach of any of the covenants, terms, and conditions of this Lease.

(b)

May have and exercise any and all other rights and/or remedies, granted or allowed landlords by any existing or future Statute, Act of Assembly, or other law of the state in cases where a landlord seeks to enforce

8

rights arising under a lease agreement against a tenant who has defaulted or otherwise breached the terms of such lease agreement; subject, however, to all the rights granted or created by any such Statute, Act of Assembly, or other law of this state existing for the protection and benefit of tenants; and

(c)

May have and exercise any and all other rights and remedies contained in this Lease, including  the rights and remedies provided by Section 18 and 19 hereof.

18.

Intentionally Omitted.

19.

Confession of Judgment for Possession of Real Property.

LESSEE COVENANTS AND AGREES THAT IF THIS LEASE SHALL BE TERMINATED (EITHER BECAUSE OF CONDITION BROKEN DURING THE TERM OF THIS LEASE OR ANY RENEWAL OR EXTENSION THEREOF AND/OR WHEN THE TERM HEREBY CREATED OR ANY EXTENSION THEREOF SHALL HAVE EXPIRED) THEN, AND IN THAT EVENT, LESSOR MAY CAUSE A JUDGMENT IN EJECTMENT TO BE ENTERED AGAINST LESSEE FOR POSSESSION OF THE DEMISED PREMISES, AND FOR THAT PURPOSE LESSEE HEREBY AUTHORIZES AND EMPOWERS ANY PROTHONOTARY, CLERK OF COURT OR ATTORNEY OF ANY COURT OF RECORD TO APPEAR FOR LESSEE AND CONFESS JUDGMENT AGAINST LESSEE IN EJECTMENT FOR POSSESSION OF THE HEREIN DEMISED PREMISES, AND AGREES THAT LESSOR MAY COMMENCE AN ACTION PURSUANT TO PENNSYLVANIA RULES OF CIVIL PROCEDURE NO. 2970 ET. SEQ. FOR THE ENTRY OF AN ORDER IN EJECTMENT FOR THE POSSESSION OF REAL PROPERTY, AND LESSEE FURTHER AGREES THAT A WRIT OF POSSESSION PURSUANT THERETO MAY ISSUE FORTHWITH, FOR WHICH AUTHORIZATION TO CONFESS JUDGMENT AND FOR THE ISSUANCE OF A WRIT OR WRITS OF POSSESSION PURSUANT THERETO, THIS LEASE, OR A TRUE AND CORRECT COPY THEREOF, SHALL BE SUFFICIENT WARRANT.   LESSEE FURTHER COVENANTS AND AGREES, THAT IF FOR ANY REASON WHATSOEVER, AFTER SAID ACTION SHALL HAVE COMMENCED THE ACTION SHALL BE TERMINATED AND THE POSSESSION OF THE DEMISED PREMISES SHALL REMAIN IN OR BE RESTORED TO LESSEE, LESSOR SHALL HAVE THE RIGHT UPON ANY SUBSEQUENT DEFAULT OR DEFAULTS, OR UPON THE TERMINATION OF THIS LEASE AS ABOVE SET FORTH TO COMMENCE SUCCESSIVE ACTIONS FOR POSSESSION OF THE PREMISES LEASED HEREUNDER.

20.

Affidavit of Default.

In any procedure or action to enter judgment by Confession in Ejectment for possession of real property pursuant to Section 19 hereof, if Lessor shall first caused to be filed in such action an affidavit or averment of the facts constituting the default or occurrence of the condition precedent, or event, the happening of which default, occurrence, or event authorizes and empowers Lessor to cause the entry of judgment by confession , such affidavit or averment shall be conclusive evidence of such facts, defaults, occurrences, conditions precedent, or events; and if a true copy of this Lease (and the truth of which such affidavit or averment shall be sufficient evidence) be filed in such procedure or action, it shall not be necessary to file the original as a Warrant of Attorney, any rule of court, custom, or practice to the contrary notwithstanding.

21.

Waivers by Lessee of Errors, Right of Appeal, Stay, Exemption, Inquisition.

Lessee hereby releases to Lessor and to any and all attorneys who may appear for Lessee all errors in any procedure or action to enter Judgment by Confession by virtue of the warrants of attorney contained in this Lease and all liability therefor.  Lessee further authorizes the Prothonotary or any Clerk of Court of Record to issue a Writ of Execution or other process, and further agrees that real estate may be sold on a Writ of Execution or other process.  If proceedings shall be commenced to recover possession of the Demised Premises either at the end of the Term or sooner termination of this Lease or for non-payment of Rent or for any other reason, Lessee specifically waives the right to the three (3) months’ notice to quite and/or the fifteen (15) or thirty (30) days’ notice to quit required by the Act of April 6, 1951, P.L. 69, as amended, and agrees that five (5) days notice shall be sufficient.

22.

Intentionally Omitted.

23.

Remedies Cumulative.

All of the remedies herein before given to Lessor and all rights and remedies given to it by law and equity shall be cumulative and concurrent.   No termination of this Lease or the taking or recovering possession of the Demised Premises shall deprive Lessor of any of its remedies or actions against the Lessee for Rent due at the time or which, under the terms hereof would in the future become due as if there had been no termination, nor shall the bringing of any action for Rent or breach or covenant, or the resort to any other remedy herein provided for the recovery of Rent be construed as a waiver of the right to obtain possession of the Demised Premises.

24.

Condemnation.

In the event that the Demised Premises, or any part thereof, is taken or condemned for a public or quasi-public use, this Lease shall, as to the part so taken, terminate as of the date title shall vest in the condemnor, and Rent shall abate in proportion to the square feet of leased space taken or condemned or shall cease if the entire premises be so taken.  In either event the Lessee waives all claims against the Lessor by reason of the complete or partial taking of the Demised Premises.

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25.

Permits and Licenses.

Lessee shall be responsible for obtaining all permits and licenses that may be required by applicable law for conduct of Lessee’s business at the Demised Premises and Lessee shall be responsible for the permits and licenses fees related thereto.  This includes any permits and licenses which may be required for the installation of signs.

26.

Insurance and Waiver of Subrogation.

(a)

Lessee's Insurance and Types.   At all times during the Term of this Lease, Lessee shall pay all premiums for and maintain in effect with a responsible company or companies licensed in the Commonwealth of Pennsylvania, acceptable to Lessor, policies of insurance in a form acceptable to Lessor for the benefit of Lessor, Lessor's agent, mortgagee and Lessee, as their interests may appear, as follows, and such other types of insurance, including business interruption insurance, and such additional amounts of insurance as, in Lessor's judgment, are necessitated by good business practice:

(1)

Insurance covering Lessee's trade fixtures, furnishings, equipment, betterments and leasehold improvements (whether included in Lessee's Work or existing at the time Lessee took possession), inventory and other installations of Lessee, in an amount not less than one hundred percent (100%) of their full replacement cost from time to time during the Term, providing "all-risk” protection against perils, without limitation, included within the standard state form of fire and broad form extended coverage insurance policy, together with insurance against sprinkler damage, vandalism and malicious mischief as included under standard insurance industry practices within the classification "Fire Extended Coverage, Vandalism and Malicious Mischief, and Sprinkler Leakage."  For the purpose of this Section 26, leasehold improvements shall include all improvements to the Demised Premises excepting the roof, floor slab and exterior walls.

(2)

Plate glass insurance covering the plate glass in the Demised Premises.

(3)

Broad form comprehensive public liability insurance in companies acceptable to Lessor, and naming as additional named insured Lessor and Lessor's Managing Agent, with minimum limits of $1,000,000.00 on account of bodily injuries to or death of one person as a result of one occurrence, and not less than $2,000,000.00 on account of bodily injuries to or death of one or more persons as a result of one occurrence, and which the property damage limit shall not be less than $ 300,000.00.   In addition, Lessor requires an excess liability or umbrella policy in an amount not less than $1,000,000.00 with a self-insured retention not greater than $10,000.   Lessor shall have the right from time to time, on not less than thirty (30) days' notice, to require Lessee to reasonably increase the amount and/or type of coverage required to be maintained under this Lease.  If the nature of Lessee's operation is such as to place any or all of its employees under the coverage of local Worker's Compensation or similar statutes, Lessee shall also keep in force, at its own expense, Worker's Compensation or similar insurance affording statutory coverage and containing statutory limits.

(b)  

Certificates of Insurance.   Lessee will furnish to Lessor, at the time Lessee receives possession of the Demised Premises, copies of policies or certificates of insurance evidencing coverages required by this Lease.  All policies required hereunder shall contain an endorsement providing that the insurer will not cancel or materially change the coverage of said policy or policies without first giving thirty (30) days' prior written notice thereof to Lessor and shall name Lessor and Gambone Management Co. as Additional Insureds.  

(c)  

Casualty.  In the event the Demised Premises or its contents are damaged or destroyed by fire or other insured casualty, (i) Lessor, to the extent of the coverage of Lessor's policies of insurance, hereby waives its rights, if any, against Lessee with respect to such damage or destruction, even if such fire or other casualty shall have been caused, in whole or in part, by the negligence of Lessee, its agents, servants or employees, and (ii) Lessee, to the extent of the coverage of Lessee's policies of insurance, hereby waives its rights, if any, against Lessor with respect to such damage or destruction, even if such fire or other casualty shall have been caused, in whole or in part, by the negligence of Lessor, its agents, servants, or employees; provided, however, such waivers of subrogation shall be effective only with respect to loss or damage occurring during such time as Lessor's or Lessee's policies of insurance (as the case may be) shall contain a clause or endorsement providing in substance that the aforesaid waiver of subrogation shall not prejudice the type and amount of coverage under such policies or the right to Lessor or Lessee (as the case may be) to recover thereunder.  If, at any time, Lessor's or Lessee's insurance carrier refuses to write insurance which contains a consent to the foregoing waiver of subrogation, Lessor or Lessee, as the case may be, shall notify the other party thereof in writing and upon the giving of such notice, the provisions of this Section shall be null and void as to any casualty which occurs after such notice.  If Lessor's or Lessee's insurance carrier shall make a charge for the incorporation of the aforesaid waiver of subrogation in its policies, then the party requesting the waiver shall promptly pay such charge to the other party, upon demand.  In the event the party requesting the waiver fails to pay such charge upon demand, the other party shall be released of its obligations to supply such waiver.

(d)

Blanket Insurance Policies.   Any insurance required of Lessee under this Lease may be furnished by Lessee under a blanket policy carried by it.  Such blanket policy shall contain an endorsement that names Lessor, Lessor's agent, mortgagee and Lessee as additional named insureds; references the premises; and guarantees a minimum limit available for the premises equal to the insurance amounts required in this Lease.

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(e)

Subrogation.  Each policy evidencing the insurance to be carried by Lessee under this Lease shall contain a clause that such policy and coverage evidenced thereby shall be written as a primary policy which does not contribute to and is not in excess of coverage which Lessor may carry.

(f)

Compliance with Insurance and Governmental Requirements.  Subject only to Lessor’s express obligations set forth herein, Lessee agrees at its own expense to comply with (and to make all alterations, improvements and changes required, with respect to the Demised Premises, by) all Governmental Requirements (including without limitation the Americans with Disabilities Act and comparable legal requirements), as well as the recommendations and requirements, with respect to the Demised Premises, or its use or occupancy, of the insurance underwriters or insurance rating bureau or any similar public or private body and any governmental authority having jurisdiction with respect to the use or occupancy of the building of which the Demised Premises is a part, including, but not limited to, installation of fire extinguishers or automatic detection and/or suppression systems, any changes, modifications or alterations in the detection and/or suppression systems or additional detectors and/or sprinkler heads or the location of partitions, trade fixtures, or other contents of the Demised Premises.

(g)

Effect on Lessor’s Insurance.   Lessee shall not do or suffer to be done, or keep or suffer to be kept, anything in, upon or about the Demised Premises which will contravene Lessor’s policies insuring against loss or damage by fire or other hazards, or which will prevent Lessor from procuring such policies in companies acceptable to Lessor at regular rates or which will in any way cause an increase in the insurance rates for any portion of Lessor’s property.

(h)

Rent Insurance.  Lessor, should it so elect in its sole discretion, may procure Rent Insurance with respect to the Demised Premises, if available at a cost which Lessor in its sole judgment deems reasonable, against loss of rents for reasons set forth in this Lease, in an aggregate amount equal to not more than twenty-four (24) times the sum of (i) the monthly requirement of Minimum Rent of such Lessee, plus (ii) the average monthly amount estimated from time to time by Lessor to be payable by such Lessee as Additional Rent herein.

27.

Late Fees.

Lessee agrees to pay immediately to Lessor a late charge of ten (10%) percent of the monthly rental for Rent and Additional Rent not received by the 5th day of the month.  All rents are due on the first of each month.  A charge of $50.00 is applicable for any checks returned from the bank, for whatever reason.  

28.

Relocation.

Lessor reserves the right, anytime during the Term of this Lease or any renewal period thereof, to relocate Lessee to another area of the Business Center, provided that:  (a) Lessor provides space and continuing access by third parties including shipping companies substantially similar to Lessee’s then existing premises, and b)  Lessor reimburses Lessee for all costs of Lessee related to such relocation within the Business Center.   

29.

Use of Common Areas.

Lessee shall have the nonexclusive use, in common with Lessor, other tenants, their guests and invitees, of the parking areas, driveways, and other facilities designed and intended as “Common Area” as may exist or as may be installed by Lessor during the term of this Lease, any extensions or renewals thereof.  Lessee shall have the free and unhampered right of ingress and egress, in common with others, over these facilities.   If the Lessee’s use of common area is abnormal, or if the Lessee misuses said Common Area, then the cost to correct will be borne solely by the Lessee.

30.

Condition of Premises at Lease Inception.

Except as provided herein to contrary, Lessor shall make renovations in accordance with Exhibit “B” (“Lessor’s Work”).

31.

Maintenance and Repairs.

Lessee shall be responsible for all maintenance and repairs except that Lessor shall be responsible for roof and structural repairs to the building of which the Demised Premises is a part, provided Lessee or its employees or agents have not caused damage to the roof or structure.  Lessee is not permitted to place anything on the roof of the Demised Premises or to make any holes in the roof without first obtaining written permission from Lessor.   In the event any holes are required to be cut in the roof, Lessor, at Lessee's expense, will engage Lessor's roofing contractor approved by Lessor's bonding company to flash and patch such holes so as to maintain the validity of Lessor's roof bond and responsibility thereunder.

Lessee, Lessee’s agents, employees and representatives, shall endeavor to maintain the Demised Premises and the property of which the Demised Premises is a part, in a clean and trash free manner.  Further, the Demised Premises shall not be littered with discarded parts, goods, or abandoned property of the Lessee.   Outside storage is prohibited unless written approval of Lessor is obtained.  In addition to any other right or remedy of Lessor resulting from Lessee's violation of this provision regarding outside storage, Lessee shall pay to Lessor an amount equal to $100.00 per day for such violation.  

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32.

Accessibility.

Lessee agrees that he and all occupants of the Demised Premises shall not add, remove, alter, or change any locks or locking devices unless Lessor is notified and supplied with necessary key.  Any damage resulting from inaccessibility shall be the responsibility of the Lessee.   Lessor, Lessor’s agent and Lessee shall be the only parties with keys to the Demised Premises.

33.

Emission of Fumes and Chemicals.

Lessee agrees that no noxious fumes or hazardous wastes or chemicals will be emitted from the Demised Premises in the daily conduct of the Lessee’s business.

34.

Heating and Air Conditioning Maintenance.

Lessee agrees that Lessor will (at Lessee’s cost) employ the services of a heating and air conditioning contractor in order to service the heating and air conditioning unit at least two times per year.   Lessee shall be responsible for the cost of the service contract, as well as, all maintenance and repairs of said units, including replacement.  

35.

Hazardous Substances.

Lessee hereby covenants and agrees that Lessee shall:

(a)

Give written notice to the Lessor of any activity or operation to be conducted by the Lessee, its subtenants, licensees or concessionaires at the Demised Premises which involves the use, handling, generation, treatment, storage or disposal of any hazardous substance or waste.  Such written notice shall be delivered to the Lessor at least thirty (30) days prior to the initiation of any such activity or operation and shall contain at least the following:

(i)  a description of such activity or operation

(ii)  a detailed description of how and where such hazardous substances or wastes will be used, handled, generated, treated, stored, disposed, or otherwise managed;

(ii)  a good-faith estimate of the maximum quantity of such hazardous substances or wastes that will be present at any one time on the Demised Premises during any calendar month; and,

(iv)  a copy of any permits or licenses obtained by  governing the activity or operation.

(b)

Comply with all present and future federal, state and local laws, codes, ordinances, regulations and permit and licenses conditions governing the discharge, emission or disposal of any pollutant in, to or from the Demised Premises, other premises or the environment and prescribing methods for storing, handling or otherwise managing hazardous substances and wastes including, but not limited to, the then-current versions of the following statutes, their state analogs, and the regulations implementing them:  The Resource Conservation and Recovery Act (42 U.S.C. 6901 et seq.); the Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C.  9601 et seq.); the Clean Water Act (33 U.S.C. 1251 et seq.); the Clean Air Act (42 U.S.C.  7401 et seq.); and the Toxic Substances Control Act (15 U.S.C. 2601 et seq.).

Lessee shall obtain all permits, licenses and approvals required under federal, state and local laws, codes, ordinances and regulations.  Lessee shall give prompt written notice to the Lessor of any violation of any such law, code, ordinance or regulation by the Lessee, its subtenants, licensees or concessionaires, whether or not a citation or other notice of violation has been issued by a governmental authority, and shall take all steps necessary to remedy such violation.

(c)

Lessee, upon expiration or termination of this Lease, shall render to Lessor the Demised Premises in clean condition and free from the presence and contamination of any hazardous substances or wastes other than any of the same which were present at the commencement of this Lease.  Prior to the expiration, Lessor reserves the right to have an inspection ordered to determine compliance with applicable environmental rules and regulations and the existence or any hazardous substance or hazardous waste.  All costs for said testing and inspections, if required by Lessor, shall be at the sole cost and expense of Lessee.  In the event it is determined that any hazardous substance or hazardous waste have been introduced to the Demised Premises by Lessee, it’s agents, employees or invitees, then Lessee agrees to be responsible and pay for all cost associated with clean-up or removal of said hazardous waste or  substance.  In the event that said clean-up or removal cannot be accomplished by the end of the Term of  the Lease, then the Term shall be automatically extended for such period as it takes to remove or clean up the items found.  During this extended term, all terms and conditions of the Lease shall be increased by the sum of ten (10%) percent over the rental in effect immediately prior to the end of the then current Term.  After removal or clean-up of the items in question, a final report shall be prepared demonstrating that the Demised Premises complies with all applicable environmental rules, regulations and agencies.  Said inspection, if required, shall be paid for by Lessee.

(d)

To the extent permissible by law, Lessee shall accept full responsibility for and protect, defend, indemnify and save harmless Lessor, its officers, agents and employees from and against any and all claims, actions, suits, losses, damages, liability and expenses of any character including, but not limited to, costs of investigation, remediation, consequential damages, including loss of rent with respect to the Demised Premises or

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with respect to any other portion of the (Lessor’s) premises, fines or penalties, and reasonable legal fees in connection with (but not limited to):  loss of life, personal or bodily injury, disease, sickness, mental distress and/or damage to any property (including the loss of use resulting therefrom) or to the environment arising or resulting during or subsequent to the Lease Term from or out of any conduct, activity, act, omission or operation involving the use, handling, generation, treatment, storage, disposal, other management or release of any hazardous substance or waste at or from the Demised Premises not caused by Lessor.

36.

Indemnifications.

Lessee will indemnify Lessor and save Lessor, including Lessors agents, employees and the respective partners, officers, employees and agents of Lessor, harmless from and against any and all claims, actions, damages, liability and expense (including without limitation reasonable fees of attorney’s, investigators and experts) in connection with (a) loss of life, personal injury or damage to property caused to any person in or about the Demised Premises, or arising out of the occupancy or use by Lessee of the Demised Premises or any part thereof, or occasioned wholly or in part by any act or omission of Lessee, its agents, contractors, employees, licensees or invitees, unless such loss, injury or damage was caused by the gross negligence or willful misconduct of Lessor, or (b) any failure of Lessee to observe, perform or comply with any of the terms, covenants and conditions of this Lease.   Without limiting the foregoing or any other waivers in favor of Lessor set forth in this Lease, Lessee will forever release and hold Lessor harmless from all claims arising out of damage to Lessee’s property unless such damage occurs as a result of Lessor’s gross negligence or willful misconduct and in no event shall Lessor be liable for damage to Lessee’s property which is or could have been insured against by Lessee under commonly available insurance policies.  In case any such claim, action or proceeding for which Lessor is indemnified is brought against Lessor, upon notice from Lessor and at Lessee’s sole cost and expense, Lessee shall resist or defend such claim, action or proceeding or shall cause it to be resisted or defended by an insurer.

37.

Condition of Premises When Vacated.

Upon vacating Demised Premises, Lessee agrees to remove all personal items and debris, broom clean premises, and leave all mechanical equipment in working order as delivered and replace all burned out bulbs.

38.

Option to Renew.

Lessee shall have the option to renew this Lease for one (1) term of five (5) years, commencing on the day following the end of the initial Term, on the same terms and conditions as are in effect immediately prior to the expiration of said initial Term except for adjustment of the Minimum Rental Rate as hereinafter set forth provided that:

(a)

Lessee shall give Lessor written notice of its election to renew for the renewal Term of at least six (6) months prior to the expiration of the then current Term, and this Option to Renew shall extinguish if Lessee fails to provide such notice; and

(b)

Lessee shall not be in Default as of the date of giving of such notice of election to renew or as of the commencement date of the renewal Term; and

(c)

The rental during the renewal periods shall be:

Base Rent:

Monthly

Annual

Year 1

$4,211.63

$50,539.50

Year 2

$4,339.25

$52,071.00

Year 3

$4,466.88

$53,602.50

Year 4

$4,594.50

$55,134.00

Year 5

$4,722.13

$56,665.50

Additional Rent: Additional Rental payments shall be due in addition to Base Rent payments and shall commence upon Delivery of Possession and are subject to adjustment in accordance with paragraph 9 herein.

39.

Written Notices.

All required written notices shall be sent by certified mail, return receipt requested to the following addresses:

Lessor:

GMBC-4,LP.

PO Box 287

Fairview Village, PA 19409

Attn: Joseph R. Gambone, Jr., President

Fax: (610) 539-4701

Email: jgambone@gambone.com

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With copies to:

Gambone Management Co.

Gambone Management Co.

1030 W. Germantown Pike

1030 W. Germantown Pike

East Norriton, PA 19403

East Norriton, PA 19403

Attn: Valerie Douglas

Attn: David R. Dratch, Esquire

Fax: (610) 630-0386

Fax: (610) 539-4701

Email: vdouglas@gambone.com

Email: ddratch@gambone.com

Lessee:

Prior to delivery of possession:

After delivery:

9C Portland Road

At the Demised Premises

West Conshohocken, PA 19428

Attn: __________________

Attn: _______________

Fax: _______________

Fax: _______________

Email: _________________

Email: ______________

Such addresses may be changed from time to time by either party by serving notice as above provided.

40.

Subordination.

This Lease and all its terms, covenants and provisions are and each of them is subject and subordinate to any lease or other arrangement or right to possession, under which the Lessor is in control of the Demised Premises, to the rights of the owner or owners of the Demised Premises and of the land or buildings of which the Demised Premises are a part, to all rights of the Lessor’s lender and to any and all mortgages and other encumbrances now or hereafter placed upon the Demised Premises or upon the land and/or buildings containing the same.

41.

Financial Statements.

Lessee agrees from time to time upon written request from Lessor to provide current financial statements.   The statement shall be delivered by Lessee to Lessor within thirty (30) days of request and shall be the most recent financial statement available to Lessee.

42.

Arbitration.

Any and all disputes arising from or under this Lease shall be submitted to binding arbitration as the exclusive forum for determination pursuant to Subchapter B of the Pennsylvania Uniform Arbitration Act (42 Pa. Cons. Stat. Ann. §73.41 et seq.) being common law arbitration upon joint written agreement of Lessor and Lessee.  The dispute shall be determined by a panel of three arbitrators:  one selected and paid for by the Lessor; one selected and paid for by the Lessee; and the third selected by the Lessor’s and the Lessee’s arbitrators and the cost split equally by the parties.  A majority decision of the arbitrators shall be controlling.  Notwithstanding anything to contrary contained herein, should the Lessor choose to pursue the remedy of confession of judgment possession or injunctive relief, the Lessor may pursue such relief directly in any court of competent jurisdiction in the Commonwealth of Pennsylvania.  Lessor shall not be in default until and unless a court of competent jurisdiction, or the arbitration panel, as applicable, has determined that Lessor is in Default.

43.

Estoppel Certification.

Lessee agrees that at any time and from time to time at reasonable intervals, within five (5) business days after written request by Lessor, Lessee will execute, acknowledge and deliver to Lessor, Lessor’s mortgagee, or other person designate by Lessor a certificate in a form as may, from time to time, be provided, ratifying this Lease and certifying (i) that Lessee has entered into occupancy of the Demised Premises and the date of such entry if such is the case; (ii) that the Lease is in full force and effect and has not been assigned, modified, supplemented or amended in any way (or, if there has been any assignment, modification, supplement or amendment, identifying the same); (iii) that this Lease represents the entire agreement between Lessor and Lessee as to the subject matter hereof; (iv) the date of commencement and expiration of the Term; (v) that all conditions under this Lease to be performed by Lessor have been satisfied and all required contributions by Lessor to Lessee on account of Lessee and Lessee’s improvements have been received (and if not, what conditions remain unperformed); (vi) that to the knowledge of the signer of such writing no default exists in the performance or observance of any covenant or condition in this Lease and there are no defenses or offsets against the enforcement of this Lease by Lessor (or specifying each default, defense or offset of which the signer may have knowledge): (vii) that no Minimum Rent or other rental has been paid in advance and no security has been deposited with Lessor except as set forth in this Lease; (ix) the amount of Minimum Rent and other charges payable by Lessee under the Lease; (x) that Lessor has no obligation for painting, repairs or improvements to the Demised Premises; and (xi) that there are no renewal options or options to purchase or expand the Demised Premises (except as stated in this Lease).  Lessee hereby irrevocably appoints Lessor its attorney-in-fact to execute such a document in the event Lessee shall fail to do so within five (5) business days of receipt of Lessor’s request.

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44.

Lease Contains All Agreements.

It is expressly understood and agreed by and between the parties hereto that this Lease and the riders attached hereto and forming a part hereof set forth all the promises, agreements, conditions and understandings between Lessor and Lessee relative to the Demised Premises, and that there are no promises, agreements, conditions or understanding, either oral or written, between them other than herein set forth.  It is further understood and agreed that, except as herein otherwise provided, no subsequent alteration, amendment, change or addition to this Lease shall be binding upon Lessor or Lessee unless reduced to writing and signed by them.

45.

Heirs and Assignees.

All rights and liabilities herein given to, or imposed upon, the respective parties hereto shall extend to and bind the several and respective heirs, executors, administrators, successors and assigns of said parties; and if there shall be more than one Lessee, they shall be bound jointly and severally by the terms, covenants and agreements herein, and the word  “Lessee” shall be deemed and taken to mean each and every person or party mentioned as a Lessee herein, be the same one or more; and if there shall be more than one , any notice required or permitted by the terms of this Lease may be given by or to any one thereof, and shall have the same force and effect as if given by or to all thereof.  The words “his” and “him” wherever stated herein, shall be deemed to refer to the “Lessor” or “Lessee” whether such Lessor or Lessee be singular or plural and irrespective of gender.   No rights, however, shall inure to the benefit of any assignee of Lessee unless the assignment to such assignee has been approved by Lessor in writing as aforesaid.

46.

Moving Clause.    

Lessor and Lessee acknowledge that NAI GEIS Realty Group, Inc. was the sole and moving cause for this Lease.  Lessor agrees to pay NAI GEIS Realty Group, Inc a leasing commission by separate agreement.  

47.

Heading No Part of Lease.  

Any headings preceding the text of the several paragraphs and sub-paragraphs hereof are inserted solely for convenience of reference and shall not constitute a part of this Lease nor shall they affect its meaning, construction or effect.

48.

Compliance with the Americans with Disabilities Act. 

Lessee, at Lessee's sole cost, shall be responsible for compliance with all provisions of the Americans with Disabilities Act, as amended, with regard to all interior spaces of the Demised Premises, including ingress and egress doors or openings.  Lessee shall indemnify Lessor for any violations of the provisions of the Americans with Disabilities Act in accordance with the indemnification provisions of this Lease.  Lessor shall be responsible for compliance with the Americans with Disabilities Act for those portions of the Business Center other than the Lessee's Demised Premises or the leased spaces of other tenants.

49.

Force Majeure.  

In the event that Lessor or Lessee shall be delayed or hindered or prevented from the performance of any act required hereunder, by reason of act of God, fire casualty, action of the elements, strikes, lockouts, other labor troubles, inability to procure, or general shortage of labor, equipment, facilities, materials or supplies, failure of transportation or of power, restrictive governmental laws or regulations, riots, insurrection, war or any other cause similar or dissimilar to the foregoing beyond the control of Lessor or Lessee, the performance of such act shall be excused for the period of delay, and the period for the performance of any such act shall be extended for the period necessary to complete performance after the end of the period of such delay.  The provisions of this Section 49 shall not excuse Lessee from the prompt payment of Rent, Additional Rent or any other payments required by the terms of this Lease.

50.

Changes to Business Center/Approvals.

(a)

 Alterations to Business Center.   Lessor hereby reserves the right at any time and from time to time to:  (a) make changes or revisions in the layout of the Business Center, including, but not limited to, additions to, subtractions from, or rearrangements of the building areas and/or common areas (both interior and/or exterior); (b) construct additional or other buildings or improvements in the Business Center and make alterations thereof or additions thereto and build additional stores on any such building or buildings; and (c) increase or decrease the land size of the Business Center, and any land so added shall thereafter be subject to the terms of this Lease and shall be included in the term " Business Center " as used in this Lease, and any land so withdrawn shall thereafter not be subject to the terms of this Lease and shall be excluded from the term " Business Center " as used in this Lease.  In the event Lessor shall elect to construct any additional buildings, all easement rights granted herein to Lessee shall automatically terminate as to the land upon which such additional buildings are constructed, and Lessor shall have the absolute right to redefine the property comprising the Business Center.

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(b)

Construction of Business Center.   In the event that the Business Center is not yet built and construction thereof has not commenced as of the date of this Lease, Lessor's obligations hereunder are conditioned upon Lessor obtaining all permits and approvals required from all governmental authorities for Lessor to build the Business Center.  If Lessor does not obtain such permits and approvals within twelve (12) months after the date hereof, then Lessor shall have the right to terminate this Lease by giving written notice to Lessee at any time after the expiration of twelve (12) months from the date hereof, in which event the Security Deposit shall be returned to Lessee, this Lease shall terminate, and neither party shall have any further liability hereunder.

(c)  

Additions to Business Center.   Lessee acknowledges that Lessor hereby reserves the right from time to time to enlarge the Business Center by (i) constructing other buildings or portions of the Business Center, with or without any additional parking or other common areas; (ii) including within the existing Business Center other properties now or hereafter owned by Lessor adjacent to the Business Center; and (iii) constructing buildings and common areas on such additional property.  Any new buildings, properties and common areas shall be treated as though they were originally a part of the Business Center, and at the election of the Lessor all utility costs, common area maintenance charges, Real Estate Taxes and other pro rata payments required of Lessee shall be applicable to such enlarged area and improvements thereon; provided that, in such event, Lessee's share shall be appropriately adjusted to include any additional square footage contained in such new buildings or comprising additional properties added to the Business Center.  Until Lessor makes such election, Lessee's share shall continue as though such enlargement had not occurred.

51.

Lessee's Work.    Upon receiving possession of the Demised Premises from Lessor, Lessee will with due diligence proceed to install such stock, fixtures and equipment and to perform such other work as shall be necessary or appropriate in order to prepare the Demised Premises for the opening of business by Lessee (“Lessee’s Work”), as shown on Exhibit “C”..  Lessee agrees to submit to Lessor prior to the commencement of any improvements to the Demised Premises any plans and specifications covering all work which Lessee proposes to do in the Demised Premises, along with a proposal broken down in reasonable detail as to line items and a list of the Pennsylvania bonded contractors who Lessee proposes will perform Lessee's Work.  Notwithstanding the foregoing, Lessor shall have the right, but not the obligation, to designate a contractor to perform Lessee’s Work, or any portion thereof, at the same cost as provided by Lessee’s contractor.  In the event Lessee’s contractor performs any work to the electrical, mechanical, plumbing, or other systems servicing the Demised Premises, Lessee shall not allow its contractor to perform such work without giving Lessor prior written notice specifying the date the proposed work is to be performed, and Lessor shall the opportunity to have it’s contractor supervise the work, and in such event, Lessee shall be responsible for the cost of supervision not to exceed $1,500.00.  Lessee agrees not to commence work in the Demised Premises until Lessor has approved Lessee’s plans and specifications and Lessee's contractors in writing.

52.

Change Order.

No changes shall be made to the final plans and specifications, except with the prior written approval of Lessor.  If Lessee desires any changes, additions, or alterations to the final plans and specifications, such requested change must be submitted to Lessor in writing.  Such requested change must: (i) be in compliance with all applicable laws, (ii) the terms of this Lease, and (iii) agreed to between Lessor and Lessee.  Lessee shall notify Lessor within five (5) days of receipt of the reason for such change order whether Lessee wishes to make the requested changes.  If Lessee shall not so notify Lessor within the five (5) day period, it shall be conclusively deemed that Lessee has elected to withdraw the proposed change.  Any delays in delivery of possession and/or substantial completion caused by Lessee’s request for a change order, whether or not actual performed, shall extend the time for delivery of possession and/or substantial completion.

53.

Lease Execution.

The submission of this Lease to Lessee shall be for examination purposes only, and does not and shall not constitute a reservation of or option for Lessee to lease, or otherwise create any interest of Lessee in the Demised Premises.  Execution of this Lease by Lessee shall constitute Lessee’s irrevocable offer to continue for thirty (30) days from and after receipt by Lessor of said Lease or until Lessor shall deliver to Lessee written notice of rejection of Lessee’s offer, whichever shall first occur. The return to Lessor of Lessee-executed copies of this Lease shall not be binding upon Lessor, notwithstanding any preparation or anticipatory reliance or expenditures by Lessee or any time interval, until Lessor has in fact executed and actually delivered a fully-executed copy of this Lease to Lessee.

54.

Lessee’s Authority to Do Business.

(a)  Lessee represents, warrants and covenants upon the date of execution, and throughout the Term, Lessee is authorized to do business and is in good standing in the Commonwealth of Pennsylvania.

(b)  If Lessee is a corporation, partnership, limited liability company or other entity, the persons executing this Lease on behalf of Lessee represents and warrants to Lessor that they have authority to enter into this Lease on behalf of Lessee, to bind Lessee and that this Lease has been authorized and approved by the Board of Directors or other governing body of Lessee.  Lessee agrees to furnish to Lessor, upon request, evidence of authority for entering into this Lease.

16

55.

Prohibited Uses.  

Lessee agrees that it will not do any of the following during any Term of this Lease:  

Operate any of the following businesses:  A pinball, video game, or any form of entertainment arcade; a gambling or betting office, other than for the sale of lottery tickets; a massage parlor; an adult cinema, adult video store or adult bookstore selling, renting, or exhibiting primarily material of a pornographic or adult nature; an adult entertainment bar or club; a bowling alley; a roller skating or ice skating rink; a billiards parlor or pool ball; a firearms shooting range or any other use which creates or causes excessive noise; a theater; a health club; any type of educational or vocational institution; a flea market; a gas station; a facility which performs onsite auto repair; or an office except as incidental to a permitted retail use.

56.

Contingency.  The effectiveness of this Lease is contingent upon (a) Lessor obtaining possession of the Premises from the current tenant, and (b) Lessee obtaining all necessary permits and government consents to operate its business, including the making of inks, by December 31, 2013.  

57.

Acknowledgement.  IT IS EXPRESSLY UNDERSTOOD AND AGREED THAT LESSEE ACKNOWLEDGES THAT IT KNOWINGLY, WILLINGLY, INTELLIGENTLY AND VOLUNTARILY AGREES TO THE CONFESSION OF JUDGMENT CLAUSES CONTAINED IN SECTION 19 OF THIS LEASE.               

 ____________________

 Lessee

58.

Provided Lessee pays the rent and complies with all other terms of this Lease, Lessee may peaceably and quietly occupy and enjoy the Premises without hindrance by Lessor or any person acting or claiming to act through or under Lessor.  Such right of quiet enjoyment includes, without limitation, the loading dock and drive-in area adjacent to the Premises (“Adjacent Area”).  

In Witness Whereof, the parties hereto have executed these presents the day and year first above written, and intend to be legally bound thereby.

SEALED AND DELIVERED IN THE PRESENCE OF:

LESSOR:   GMBC-4, LP

By: GMBC-4, Inc.

/s/ Joseph R. Gambone, Jr.

Attest:

By: Joseph R. Gambone, Jr. President

LESSEE:   NO COPI TECHNOLOGIES, INC.

Witness: /s/ JoAnn Domanski

 /s/ Michael Feinstein, M.D.

JoAnn Domanski

 By: Michael Feinstein, M.D.Chairman

Director of R&D

Witness:

 /s/ James R. Davis

James R. Davis

Director of Production                                                 

17

EXHIBIT   “A”

DEMISED PREMISES

See attached plan.

18

EXHIBIT   “B”

FIT-OUT

Lessee agrees to accept the Demised Premises in its “as is” condition on the date possession is made available to Lessee without any express or implied warranty concerning the condition of the Demised Premises by Lessor or its agents, and Lessee agrees, at its sole cost and expense, to complete all improvements necessary to prepare the Demised Premises for the conduct of Lessee’s business in the Demised Premises.

Provided however, Lessor shall provide all mechanical, HVAC, lighting and electrical systems in good working condition.  

Landlord shall provide a fresh coat of paint on all office walls.

Landlord shall provide new carpeting in the entire office space including the entrance vestibule.

Landlord shall make all repairs on the loading dock and will deliver the loading dock in good working condition.

Notes:

(1)

Lessor may make substitutions of like quality on all materials, if

Deemed necessary, to expedite work.

(2)

Change Orders must be issued and approved if Lessee desires to deviate

from the standard materials, finishes and/or equipment, as outlined above.

(3)

Finish fit-out will conform to all state and local codes.

19

EXHIBIT “C”

Any Work performed by Lessee that requires the roof to be penetrated must be done by Lessor’s roofing contractor, in accordance with Section 31 of the Lease.

20

EX-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 annual report on Form 10-K 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: September 11, 2015

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

Michael A. Feinstein, M.D.

Chief Executive Officer

EX-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 annual report on Form 10-K 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: September 11, 2015

/s/ Rudolph A. Lutterschmidt

Rudolph A. Lutterschmidt

Vice President and Chief Financial Officer

EX-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 Annual Report of Nocopi Technologies, Inc.  (the "Company") on Form 10-K for the Year ended December 31, 2014 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.

September 11, 2015

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

Michael A. Feinstein, M.D.

/s/ Rudolph A. Lutterschmidt

Rudolph A. Lutterschmidt

XML

Stock Options, Warrants and 401(k) Savings Plan (Summary of Stock Option Activity) (Details) - $ / shares	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Number of Shares
Options outstanding at beginning of period	245,000	645,000	645,000
Options expired	245,000	400,000	0
Options outstanding at end of period	0	245,000	645,000
Options exercisable at end of period	0
Weighted Average Exercise Price
Options outstanding at beginning of period	$ 0.12	$ 0.32	$ 0.32
Options expired	$ 0.12	0.45
Options outstanding at end of period		$ 0.12	$ 0.32

XML

Quarterly Financial Information (Unaudited) (Statements of Cash Flows) (Details) - USD ($)	3 Months Ended								6 Months Ended			9 Months Ended			12 Months Ended
	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Sep. 30, 2012	Jun. 30, 2012	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2012	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Operating Activities
Net income (loss)															$ 7,700	$ 10,300	$ (146,100)
Adjustments to reconcile net income (loss) to net cash used in operating activities
Depreciation and amortization															$ 4,000	900	3,100
Reversal of accounts payable																(39,500)	(7,800)
Financing cost - warrant grants																100	$ 1,200
Accretion of interest - convertible debentures															$ 4,600	2,100
Net income (loss) adjusted for non-cash operating activities															16,300	(26,100)	$ (149,600)
(Increase) decrease in assets
Accounts receivable															(50,700)	(168,600)	(36,700)
Inventory															(15,000)	(2,500)	(5,200)
Prepaid and other															12,700	(7,700)	(500)
Increase (decrease) in liabilities
Accounts payable and accrued expenses															71,600	68,200	174,500
Deferred revenue															(20,400)	87,800	(16,800)
Total increase (decrease) in operating capital															(1,800)	(22,800)	115,300
Net cash provided by (used in) operating activities															14,500	(48,900)	$ (34,300)
Investing Activities
Additions to fixed assets															(20,600)	(1,800)
Net cash used in investing activities															(20,600)	(1,800)
Financing Activities
Repayment of borrowings under promissory note															$ (18,800)	(25,000)	$ (25,000)
Proceeds from demand loans																$ 3,000	49,500
Repayment of demand loan															$ (5,000)		$ (2,500)
Proceeds from convertible debentures															$ 5,000	$ 105,000
Issuance of common stock																	$ 10,000
Net cash provided by (used in) financing activities															$ (18,800)	$ 83,000	32,000
Increase (decrease) in cash															(24,900)	32,300	(2,300)
Cash
Beginning of year			$ 52,900			$ 20,600			$ 52,900	$ 20,600	$ 22,900	$ 52,900	$ 20,600	$ 22,900	52,900	20,600	22,900
End of year															28,000	52,900	20,600
Supplemental Disclosure of Cash Flow Information
Cash paid for interest															300	$ 1,200	$ 2,200
Write-off of fully depreciated leasehold improvements and furniture fixtures and equipment
Accumulated depreciation and amortization															(82,900)
Leasehold improvements															72,500
Furniture, fixtures and equipment															10,400
Conversion of demand loans and interest to convertible debentures
Demand loans															24,500
Accrued expenses															3,800
Convertible debentures															26,400
Paid-in capital															$ 1,900
Conversion of demand loans and interest to common stock
Demand loans																	$ 1,500
Accrued expenses																	1,200
Common stock																	400
Paid-in capital																	2,300
Quarterly Information [Member]
Operating Activities
Net income (loss)	$ (22,400)	$ 10,100	(25,200)	$ 1,900	$ (6,400)	(35,500)	$ (40,600)	$ (3,700)	(15,100)	(41,900)	(71,000)	(37,500)	(40,000)	(111,600)
Adjustments to reconcile net income (loss) to net cash used in operating activities
Depreciation and amortization			$ 400			$ 300			$ 1,700	$ 600	1,800	$ 2,900	$ 600	2,700
Reversal of accounts payable								(2,200)			$ (7,800)			(7,800)
Financing cost - warrant grants						$ 100				$ 100			$ 100	$ 1,000
Accretion of interest - convertible debentures			$ 1,000						$ 2,100			$ 3,400	1,100
Net income (loss) adjusted for non-cash operating activities			(23,800)			$ (35,100)			(11,300)	$ (41,200)	$ (77,000)	(31,200)	(38,200)	$ (115,700)
(Increase) decrease in assets
Accounts receivable			38,900			(89,200)			(28,400)	(85,100)	(35,300)	51,800	(90,900)	(46,100)
Inventory			(8,300)			15,700			(1,400)	(26,200)	5,700	(19,000)	(3,000)	(1,000)
Prepaid and other			10,300			6,700			19,500	10,000	5,800	21,400	12,400	10,800
Increase (decrease) in liabilities
Accounts payable and accrued expenses			1,200			42,700			3,500	66,300	24,500	26,300	39,900	101,100
Deferred revenue			(8,100)			43,000			7,000	88,500	64,300	9,300	87,600	10,200
Total increase (decrease) in operating capital			34,000			18,900			200	53,500	65,000	89,800	46,000	75,000
Net cash provided by (used in) operating activities			10,200			(16,200)			(11,100)	12,300	(12,000)	58,600	7,800	(40,700)
Investing Activities
Additions to fixed assets			(20,000)						(20,000)			(20,000)
Net cash used in investing activities			(20,000)						(20,000)			(20,000)
Financing Activities
Repayment of borrowings under promissory note			$ (6,300)			(6,300)			$ (12,500)	(12,500)	(12,500)	$ (18,800)	(18,800)	(18,800)
Proceeds from demand loans						$ 3,000				$ 3,000	2,500		$ 3,000	34,800
Repayment of demand loan											$ (2,500)	$ (5,000)		$ (2,500)
Proceeds from convertible debentures												$ 5,000	$ 105,000
Issuance of common stock											$ 10,000			$ 10,000
Net cash provided by (used in) financing activities			$ (6,300)			$ (3,300)			$ (12,500)	$ (9,500)	(2,500)	$ (18,800)	$ 89,200	23,500
Increase (decrease) in cash			(16,100)			(19,500)			(43,600)	2,800	(14,500)	19,800	97,000	(17,200)
Cash
Beginning of year	$ 9,300	$ 36,800	52,900	$ 23,400	$ 1,100	20,600	$ 8,400		52,900	20,600	22,900	52,900	20,600	22,900	$ 52,900	$ 20,600	22,900
End of year	$ 72,700	$ 9,300	36,800	$ 117,600	$ 23,400	1,100	$ 5,700	$ 8,400	9,300	23,400	8,400	72,700	117,600	5,700		$ 52,900	$ 20,600
Supplemental Disclosure of Cash Flow Information
Cash paid for interest			200			$ 400			300	$ 700	1,200	300	$ 1,000	1,700
Write-off of fully depreciated leasehold improvements and furniture fixtures and equipment
Accumulated depreciation and amortization			(82,900)						(82,900)			(82,900)
Leasehold improvements			72,500						72,500			72,500
Furniture, fixtures and equipment			$ 10,400						$ 10,400			10,400
Conversion of demand loans and interest to convertible debentures
Demand loans												24,500
Accrued expenses												3,800
Convertible debentures												26,400
Paid-in capital												$ 1,900
Conversion of demand loans and interest to common stock
Demand loans											1,500			1,500
Accrued expenses											1,200			1,200
Common stock											400			400
Paid-in capital											$ 2,300			$ 2,300

XML

Quarterly Financial Information (Unaudited) (Balance Sheets) (Details) - USD ($)	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Dec. 31, 2011
Current assets
Cash	$ 28,000				$ 52,900				$ 20,600			$ 22,900
Accounts receivable less $5,000 allowance for doubtful accounts	287,800				237,100				68,500
Inventory	43,500				28,500				26,000
Prepaid and other	18,800				31,500				23,800
Total current assets	378,100				350,000				138,900
Fixed assets
Leasehold improvements	19,700				72,500				72,500
Furniture, fixtures and equipment	176,800				186,300				184,500
Fixed assets, gross	196,500				258,800				257,000
Less: accumulated depreciation and amortization	178,400				257,300				256,400
Total fixed assets	18,100				1,500				600
Total assets	$ 396,200				351,500				139,500
Current liabilities
Promissory note					18,800				43,800
Demand loans	$ 63,000				$ 92,500				$ 89,500
Convertible debentures	102,900
Accounts payable	160,300				$ 169,500				$ 245,600
Accrued expenses	383,000				306,000				201,200
Deferred revenue	93,400				113,800				26,000
Total current liabilities	$ 802,600				$ 700,600				$ 606,100
Commitments and contingencies
Convertible debentures, net of unaccreted discount of $1,400 at December 31, 2014 and $6,300 at December 31, 2013	$ 31,800				$ 98,700
Stockholders' deficiency
Series A preferred stock, $1.00 par value, Authorized - 300,000 shares, Issued and outstanding - none
Common stock, $0.01 par value Authorized - 75,000,000 shares Issued and outstanding - 58,599,016 shares	$ 586,000				$ 586,000				$ 586,000
Paid-in capital	12,408,500				12,406,600				12,398,100
Accumulated deficit	(13,432,700)				(13,440,400)				(13,450,700)
Total liabilities and stockholders' deficiency	$ 396,200				351,500				139,500
Quarterly Information [Member]
Current assets
Cash		$ 72,700	$ 9,300	$ 36,800	$ 52,900	$ 117,600	$ 23,400	$ 1,100	$ 20,600	$ 5,700	$ 8,400	$ 22,900
Accounts receivable less $5,000 allowance for doubtful accounts		185,300	265,500	198,200		159,400	153,600	157,700		77,900	67,100
Inventory		47,500	29,900	36,800		29,000	52,200	10,300		21,800	15,100
Prepaid and other		10,100	12,000	21,200		11,400	13,800	17,100		12,500	17,500
Total current assets		315,600	316,700	293,000		317,400	243,000	186,200		117,900	108,100
Fixed assets
Leasehold improvements		19,100	19,100	19,100		72,500	72,500	72,500		72,500	72,500
Furniture, fixtures and equipment		176,800	176,800	176,800		184,500	184,500	184,500		184,500	184,500
Fixed assets, gross		195,900	195,900	195,900		257,000	257,000	257,000		257,000	257,000
Less: accumulated depreciation and amortization		177,300	176,100	174,800		$ 257,000	$ 257,000	256,700		256,000	255,100
Total fixed assets		18,600	19,800	21,100				300		1,000	1,900
Total assets		$ 334,200	336,500	314,100		$ 317,400	$ 243,000	186,500		118,900	110,000
Current liabilities
Promissory note			6,300	12,500		25,000	31,300	37,500		50,000	56,300
Demand loans		$ 63,000	$ 92,500	$ 92,500		$ 92,500	$ 92,500	$ 92,500		$ 74,800	$ 42,500
Convertible debentures		101,900
Accounts payable		135,200	$ 130,400	$ 147,200		$ 195,200	$ 235,500	$ 253,000		$ 215,400	$ 192,600
Accrued expenses		362,800	348,600	329,500		291,500	277,600	236,500		158,000	104,200
Deferred revenue		123,100	120,800	105,700		113,600	114,500	69,000		53,000	107,100
Total current liabilities		786,000	698,600	687,400		717,800	$ 751,400	$ 688,500		$ 551,200	$ 502,700
Convertible debentures, net of unaccreted discount of $1,400 at December 31, 2014 and $6,300 at December 31, 2013		31,600	100,800	99,700		97,700
Stockholders' deficiency
Common stock, $0.01 par value Authorized - 75,000,000 shares Issued and outstanding - 58,599,016 shares		586,000	586,000	586,000		586,000	$ 586,000	$ 586,000		$ 586,000	$ 586,000
Paid-in capital		12,408,500	12,406,600	12,406,600		12,406,600	12,398,200	12,398,200		12,397,900	12,396,900
Accumulated deficit		(13,477,900)	(13,455,500)	(13,465,600)		(13,490,700)	(13,492,600)	(13,486,200)		(13,416,200)	(13,375,600)
Total stockholders' deficiency		(483,400)	(462,900)	(473,000)		(498,100)	(508,400)	(502,000)		(432,300)	(392,700)
Total liabilities and stockholders' deficiency		$ 334,200	$ 336,500	$ 314,100		$ 317,400	$ 243,000	$ 186,500		$ 118,900	$ 110,000

XML

Stockholders' Deficiency (Details) - USD ($)	1 Months Ended	12 Months Ended
	Mar. 31, 2012	Dec. 31, 2012	Mar. 16, 2012
Director [Member]
Class of Stock [Line Items]
Amount of principal on unsecured loan converted into restricted common stock per conversion agreement			$ 1,500
Amount of accrued interest on unsecured loan converted into restricted common stock per conversion agreement			1,200
Director [Member] | Unsecured Loan [Member]
Class of Stock [Line Items]
Debt instrument, carrying amount			$ 4,500
Common stock [Member]
Class of Stock [Line Items]
Stock issued during period, shares		208,334
Proceeds from stock issued through private placement		$ 10,000
Restricted Common Stock [Member] | Director [Member]
Class of Stock [Line Items]
Shares of stock issued through Conversion Agreement	44,216
Share price			$ 0.06

XML

Major Customer and Geographic Information (Tables)

12 Months Ended

Dec. 31, 2014

Segment Reporting [Abstract]

Schedule of Revenues from Non-affiliated Customers

The 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:

	Year ended December 31
	2014			2013			2012
Customer A		47	%		49	%		14	%
Customer B		19	%		15	%		10	%

Schedule of Non-affiliated Customers with Accounts Receivable More Than 10%

The Company’s non-affiliate customers whose individual balances amounted to more than 10% of the Company’s net accounts receivable, expressed as a percentage of net accounts receivable, were:

	December 31
	2014			2013			2012
Customer A		46	%		45	%		48	%
Customer B		35	%		32	%		20	%

Schedule of Revenue by Geographic Region

The Company’s revenues by geographic region are as follows:

	Year ended December 31
	2014		2013		2012
North America	$	477,100	$	365,700	$	540,600
Asia		445,700		384,500		96,400
	$	922,800	$	750,200	$	637,000

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Major Customer and Geographic Information (Schedule of Revenues from Non-affiliated Customers) (Details) - Revenue [Member]	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Customer A [Member]
Revenue, Major Customer [Line Items]
Risk percentage	47.00%	49.00%	14.00%
Customer B [Member]
Revenue, Major Customer [Line Items]
Risk percentage	19.00%	15.00%	10.00%

XML

Commitments and Contingencies (Employment Agreements) (Details) - Dec. 31, 2014 - Employment Agreement [Member] - USD ($)	Total
Other Commitments [Line Items]
Future minimum compensation payments due 2015	$ 160,000
Future minimum compensation payments due 2016	$ 54,200
Chief Executive Officer [Member]
Other Commitments [Line Items]
Employment contract, expiration date	2016-05
Annual base compensation owed to employee per employment agreement	$ 85,000
Chief Operating Officer [Member]
Other Commitments [Line Items]
Employment contract, expiration date	2016-03
Annual base compensation owed to employee per employment agreement	$ 75,000
Commission rate owed to employee expressed as percentage of sales	7.00%

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Quarterly Financial Information (Unaudited) (Statements of Operations) (Details) - USD ($)	3 Months Ended								6 Months Ended			9 Months Ended			12 Months Ended
	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Sep. 30, 2012	Jun. 30, 2012	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2012	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Revenues
Licenses, royalties and fees															$ 358,800	$ 295,100	$ 414,900
Product and other sales															564,000	455,100	222,100
Total revenues															922,800	750,200	637,000
Cost of revenues
Licenses, royalties and fees															75,600	67,200	52,500
Product and other sales															248,700	218,300	149,500
Total cost of revenues															324,300	285,500	202,000
Gross profit															598,500	464,700	435,000
Operating expenses
Research and development															121,600	111,900	109,400
Sales and marketing															194,500	170,500	167,400
General and administrative															253,400	195,200	302,000
Total operating expenses															569,500	477,600	578,800
Net income (loss) from operations															$ 29,000	(12,900)	(143,800)
Other income (expenses)
Reversal of accounts payable																$ 39,500	$ 7,800
Interest income															$ 300
Interest expense, bank charges, financing cost and accretion of interest															(21,600)	$ (16,300)	$ (10,100)
Total other income (expenses)															(21,300)	23,200	(2,300)
Net income (loss)															$ 7,700	$ 10,300	$ (146,100)
Net income (loss) per common share
Basic															$ 0.00	$ 0.00	$ 0.00
Diluted															$ 0.00	$ 0.00	$ 0.00
Weighted average common shares outstanding
Basic															58,599,016	58,599,016	58,565,605
Diluted															58,600,690	58,687,694	58,565,605
Quarterly Information [Member]
Revenues
Licenses, royalties and fees	$ 83,000	$ 77,500	$ 80,000	$ 82,800	$ 69,900	$ 57,100	$ 107,700	$ 112,800	$ 157,500	$ 127,000	$ 216,900	$ 240,500	$ 209,800	$ 324,600
Product and other sales	125,800	158,600	104,900	106,900	116,400	83,900	23,800	85,200	263,500	200,300	148,600	389,300	307,200	172,400
Total revenues	208,800	236,100	184,900	189,700	186,300	141,000	131,500	198,000	421,000	327,300	365,500	629,800	517,000	497,000
Cost of revenues
Licenses, royalties and fees	17,700	19,300	17,200	15,100	17,400	14,100	10,400	14,400	36,500	31,500	29,800	54,200	46,600	40,200
Product and other sales	56,000	65,200	55,300	50,400	56,200	41,900	27,000	43,200	120,500	98,100	90,600	176,500	148,500	117,600
Total cost of revenues	73,700	84,500	72,500	65,500	73,600	56,000	37,400	57,600	157,000	129,600	120,400	230,700	195,100	157,800
Gross profit	135,100	151,600	112,400	124,200	112,700	85,000	94,100	140,400	264,000	197,700	245,100	399,100	321,900	339,200
Operating expenses
Research and development	29,200	30,400	30,600	27,800	26,600	28,500	26,200	27,700	61,000	55,100	55,800	90,200	82,900	82,000
Sales and marketing	46,800	46,600	47,600	43,400	41,100	39,300	38,100	45,500	94,200	80,400	91,700	141,000	123,800	129,800
General and administrative	75,900	59,200	54,400	46,300	48,400	49,800	67,100	71,300	113,600	98,200	172,900	189,500	144,500	240,000
Total operating expenses	151,900	136,200	132,600	117,500	116,100	117,600	131,400	144,500	268,800	233,700	320,400	420,700	351,200	451,800
Net income (loss) from operations	$ (16,800)	$ 15,400	$ (20,200)	$ 6,700	$ (3,400)	$ (32,600)	$ (37,300)	(4,100)	$ (4,800)	$ (36,000)	(75,300)	$ (21,600)	$ (29,300)	(112,600)
Other income (expenses)
Reversal of accounts payable								$ 2,200			$ 7,800			$ 7,800
Interest income			$ 300						$ 300			$ 300
Interest expense, bank charges, financing cost and accretion of interest	$ (5,600)	$ (5,300)	(5,300)	$ (4,800)	$ (3,000)	$ (2,900)	$ (3,300)	$ (1,800)	(10,600)	$ (5,900)	$ (3,500)	(16,200)	$ (10,700)	$ (6,800)
Total other income (expenses)	(5,600)	(5,300)	(5,000)	(4,800)	(3,000)	(2,900)	(3,300)	400	(10,300)	(5,900)	4,300	(15,900)	(10,700)	1,000
Net income (loss)	$ (22,400)	$ 10,100	$ (25,200)	$ 1,900	$ (6,400)	$ (35,500)	$ (40,600)	$ (3,700)	$ (15,100)	$ (41,900)	$ (71,000)	$ (37,500)	$ (40,000)	$ (111,600)
Basic and diluted loss per common share	$ 0.00	$ 0.00	$ 0.00						$ 0.00			$ 0.00
Net income (loss) per common share
Basic				$ 0.00	$ 0.00	$ 0.00	$ 0.00	$ 0.00		$ 0.00	$ 0.00		$ 0.00	$ 0.00
Diluted				$ 0.00	$ 0.00	$ 0.00	$ 0.00	$ 0.00		$ 0.00	$ 0.00		$ 0.00	$ 0.00
Weighted average common shares outstanding
Basic	58,599,016	58,599,016	58,599,016	58,599,016	58,599,016	58,599,016	58,599,016	58,599,016	58,599,016	58,599,016	58,532,194	58,599,016	58,599,016	58,554,197
Diluted	58,599,016	58,600,830	58,599,016	58,745,139	58,599,016	58,599,016	58,599,016	58,599,016	58,599,016	58,599,016	58,532,194	58,599,016	58,599,016	58,554,197

XML

Going Concern

12 Months Ended

Dec. 31, 2014

Going Concern [Abstract]

Going Concern

3. Going Concern

Since its inception, with the exception of the years ended December 31, 2007 and December 31, 2013 and December 13, 2014, during which it generated net income of $386,000 and $10,300 and $7,700, respectively, the Company has incurred significant losses and, as of December 31, 2014, had accumulated losses of $13,432,700. For the year ended December 31, 2014, the Company had net income from operations of $29,000. For the years ended December 31, 2013 and December 31, 2012, the Company’s had a net loss from operations of $12,900 and $143,800, respectively. The Company had negative working capital of $424,500 at December 31, 2014, $350,600 at December 31, 2013 and $467,200 at December 31, 2012. Due in part to uncertainties in the US economy, the Company, which is substantially dependent on its licensees to generate licensing revenues, may incur further operating losses and experience negative cash flow in the future. Achieving profitability and positive cash flow depends on the Company’s ability to generate and sustain significant increases in revenues and gross profits from its traditional business. There can be no assurances that the Company will be able to generate sufficient revenues and gross profits to sustain profitability and return to positive cash flow in the future.

During 2014, the Company sold a $5,000 convertible debenture to an investor. During 2013, the Company sold convertible debentures totaling $105,000 to six individuals and a trust and received an unsecured loan of $3,000 from an individual. During 2012, the Company received unsecured loans totaling $49,500 from two individuals and repaid $2,500 of these loans during 2012. In 2012, the Company raised $10,000 in a private placement exempt from registration under section 4(2) of the Securities Act of 1933, as amended, whereby 208,334 shares of the Company’s common stock were sold to two non-affiliated individual investors. Receipt of funds from these investors and from the demand loan holders have allowed the Company to remain in operation through the current date. Management of the Company believes that it may need additional capital in the future both to fund investments needed to increase its operating revenues to levels that will sustain its operations and to fund operating deficits that it anticipates will continue until revenue increases from traditional and new product lines can be realized. There can be no assurances that the Company will be successful in obtaining sufficient additional capital, or if it does, that the additional capital will enable the Company to impact its revenues so as to have a material positive effect on the Company’s operations and cash flow. The Company believes that without additional capital, whether in the form of debt, equity or both, it may be forced to cease operations at an undetermined future date.

The Company’s independent registered public accountants have included a “going concern” explanatory paragraph in their audit report accompanying the 2014 financial statements. The paragraph states that the Company’s continuing working capital deficit raises substantial doubt about the Company’s ability to continue as a going concern and cautions that the financial statements do not include any adjustments that might result from the outcome of this uncertainty.

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Major Customer and Geographic Information (Schedule of Non-affiliated Customers with Accounts Receivable) (Details) - Accounts Receivable [Member]	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Customer A [Member]
Concentration Risk [Line Items]
Risk percentage	46.00%	45.00%	48.00%
Customer B [Member]
Concentration Risk [Line Items]
Risk percentage	35.00%	32.00%	20.00%

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Concentration of Credit Risk (Details) None in scaling factor is -9223372036854775296	Dec. 31, 2014 USD ($)
Risks and Uncertainties [Abstract]
Amount of cash unisured by FDIC

XML

Going Concern (Details) - USD ($)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Class of Stock [Line Items]
Net loss (income)	$ (7,700)	$ (10,300)	$ 146,100
Accumulated deficit	13,432,700	13,440,400	13,450,700
Working capital deficit	424,500	350,600	467,200
Operating loss (income)	(29,000)	12,900	$ 143,800
Proceeds from convertible debentures	$ 5,000	105,000
Proceeds from demand loans		$ 3,000	$ 49,500
Common stock [Member]
Class of Stock [Line Items]
Stock issued during period, shares			208,334
Proceeds from stock issued through private placement			$ 10,000

XML

Major Customer and Geographic Information (Schedule of Revenue by Geographic Region) (Details) - USD ($)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	$ 922,800	$ 750,200	$ 637,000
North America [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	477,100	365,700	540,600
Asia [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	$ 445,700	$ 384,500	$ 96,400

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Demand Loans (Details) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2013	Dec. 31, 2012	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Short-term Debt [Line Items]
Debt instrument, payment terms			Forty-eight equal monthly installments
Repayments of demand loans			$ 5,000		$ 2,500
Unsecured Loan [Member] | Unsecured Loan One [Member]
Short-term Debt [Line Items]
Debt instrument, face amount			$ 5,800
Debt instrument, interest rate			8.00%
Debt instrument, issuance date			Jul. 31, 2012
Debt instrument, payment terms			Payable on demand
Number of shares of common stock that can be purchased through warrants			5,800
Price per share of warrants			$ 0.06
Warrant expiration term			5 years
Financing cost from warrants charged to income		$ 200
Pricing model used to value warrants			Black-Scholes pricing model
Fair value assumptions, expected term			5 years
Fair value assumption, interest rate			0.64%
Fair value assumptions, historical volatility			108.00%
Fair value assumptions, dividend yield			0.00%
Unsecured Loan [Member] | Unsecured Loan Two [Member]
Short-term Debt [Line Items]
Debt instrument, face amount			$ 3,000
Debt instrument, interest rate			8.00%
Debt instrument, issuance date			Jul. 31, 2012
Debt instrument, payment terms			Payable on demand
Number of shares of common stock that can be purchased through warrants			3,000
Price per share of warrants			$ 0.06
Warrant expiration term			5 years
Financing cost from warrants charged to income		100
Pricing model used to value warrants			Black-Scholes pricing model
Fair value assumptions, expected term			5 years
Fair value assumption, interest rate			0.60%
Fair value assumptions, historical volatility			108.00%
Fair value assumptions, dividend yield			0.00%
Unsecured Loan [Member] | Unsecured Loan Three [Member]
Short-term Debt [Line Items]
Debt instrument, face amount			$ 3,500
Debt instrument, interest rate			8.00%
Debt instrument, issuance date			Aug. 31, 2012
Debt instrument, payment terms			Payable on demand
Number of shares of common stock that can be purchased through warrants			3,500
Price per share of warrants			$ 0.07
Warrant expiration term			5 years
Financing cost from warrants charged to income		100
Pricing model used to value warrants			Black-Scholes pricing model
Fair value assumptions, expected term			5 years
Fair value assumption, interest rate			0.61%
Fair value assumptions, historical volatility			108.00%
Fair value assumptions, dividend yield			0.00%
Unsecured Loan [Member] | Unsecured Loan Four [Member]
Short-term Debt [Line Items]
Debt instrument, face amount			$ 20,000
Debt instrument, interest rate			8.00%
Debt instrument, issuance date			Sep. 30, 2012
Debt instrument, payment terms			Payable on demand
Number of shares of common stock that can be purchased through warrants			20,000
Price per share of warrants			$ 0.03
Warrant expiration term			5 years
Financing cost from warrants charged to income		400
Pricing model used to value warrants			Black-Scholes pricing model
Fair value assumptions, expected term			5 years
Fair value assumption, interest rate			0.68%
Fair value assumptions, historical volatility			110.00%
Fair value assumptions, dividend yield			0.00%
Unsecured Loan [Member] | Unsecured Loan Five [Member]
Short-term Debt [Line Items]
Debt instrument, face amount			$ 3,000
Debt instrument, interest rate			8.00%
Debt instrument, issuance date			Oct. 31, 2012
Debt instrument, payment terms			Payable on demand
Number of shares of common stock that can be purchased through warrants			3,000
Price per share of warrants			$ 0.03
Warrant expiration term			5 years
Financing cost from warrants charged to income		100
Pricing model used to value warrants			Black-Scholes pricing model
Fair value assumptions, expected term			5 years
Fair value assumption, interest rate			0.67%
Fair value assumptions, historical volatility			113.00%
Fair value assumptions, dividend yield			0.00%
Unsecured Loan [Member] | Unsecured Loan Six [Member]
Short-term Debt [Line Items]
Debt instrument, face amount			$ 3,700
Debt instrument, interest rate			8.00%
Debt instrument, issuance date			Oct. 31, 2012
Debt instrument, payment terms			Payable on demand
Number of shares of common stock that can be purchased through warrants			3,700
Price per share of warrants			$ 0.025
Warrant expiration term			5 years
Financing cost from warrants charged to income		100
Pricing model used to value warrants			Black-Scholes pricing model
Fair value assumptions, expected term			5 years
Fair value assumption, interest rate			0.67%
Fair value assumptions, historical volatility			113.00%
Fair value assumptions, dividend yield			0.00%
Unsecured Loan [Member] | Unsecured Loan Seven [Member]
Short-term Debt [Line Items]
Debt instrument, face amount			$ 4,000
Debt instrument, interest rate			8.00%
Debt instrument, issuance date			Oct. 31, 2012
Debt instrument, payment terms			Payable on demand
Number of shares of common stock that can be purchased through warrants			4,000
Price per share of warrants			$ 0.022
Warrant expiration term			5 years
Financing cost from warrants charged to income		100
Pricing model used to value warrants			Black-Scholes pricing model
Fair value assumptions, expected term			5 years
Fair value assumption, interest rate			0.82%
Fair value assumptions, historical volatility			113.00%
Fair value assumptions, dividend yield			0.00%
Unsecured Loan [Member] | Unsecured Loan Eight [Member]
Short-term Debt [Line Items]
Debt instrument, face amount			$ 4,000
Debt instrument, interest rate			8.00%
Debt instrument, issuance date			Nov. 30, 2012
Debt instrument, payment terms			Payable on demand
Number of shares of common stock that can be purchased through warrants			4,000
Price per share of warrants			$ .01
Warrant expiration term			5 years
Financing cost from warrants charged to income		$ 100
Pricing model used to value warrants			Black-Scholes pricing model
Fair value assumptions, expected term			5 years
Fair value assumption, interest rate			0.73%
Fair value assumptions, historical volatility			113.00%
Fair value assumptions, dividend yield			0.00%
Unsecured Loan [Member] | Unsecured Loan Nine [Member]
Short-term Debt [Line Items]
Debt instrument, face amount			$ 3,000
Debt instrument, interest rate			8.00%
Debt instrument, issuance date			Mar. 31, 2013
Debt instrument, payment terms			Payable on demand
Number of shares of common stock that can be purchased through warrants			3,000
Price per share of warrants			$ 0.021
Warrant expiration term			5 years
Financing cost from warrants charged to income	$ 100
Pricing model used to value warrants			Black-Scholes pricing model
Fair value assumptions, expected term			5 years
Fair value assumption, interest rate			0.77%
Fair value assumptions, historical volatility			101.00%
Fair value assumptions, dividend yield			0.00%

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Promissory Note (Details) - USD ($)	1 Months Ended	12 Months Ended
	Jul. 31, 2014	Dec. 31, 2014	Dec. 31, 2009
Line of Credit Facility [Abstract]
Revolving line of credit, maximum borrowing capacity		$ 100,000
Revolving line of credit, interest rate		3.75%
Revolving line of credit, basis spread over prime rate		0.50%
Revolving line of credit, amount outstanding			$ 100,000
Amount of monthly installment payments of principal, plus interest to repay line of credit facility		$ 2,083
Re-payment terms of line of credit facility		Forty-eight equal monthly installments
Revolving line of credit, required first payment date		Oct. 01, 2010
Repayment of line of credit	$ 6,250

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Significant Accounting Policies

12 Months Ended

Dec. 31, 2014

Accounting Policies [Abstract]

Significant Accounting Policies

2. Significant Accounting Policies

Financial Statement Presentation - Amounts included in the accompanying financial statements have been rounded to the nearest hundred, except for number of shares and per share information.

Estimates - The preparation of the financial statements in conformity with Accounting Principles Generally Accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the dates of financial statements and the reported amounts of revenues and expenses during the reported periods. Actual results could differ from those estimates.

Cash consists of demand deposits with a major U.S. bank.

Accounts receivable and credit policies - Accounts receivable are uncollateralized customer obligations due under normal trade terms requiring payment within 30 days from the invoice date. Accounts receivable are stated at the amount billed to the customer. Customer account balances with invoices dated over 90 days old are considered delinquent.

The carrying amount of accounts receivable is reduced by an allowance that reflects management's best estimate of the amounts that will not be collected. Management individually reviews all accounts receivable balances that exceed 90 days from invoice date and based on an assessment of current creditworthiness, estimates the portion, if any, of the balance that will not be collected.

Inventory consists primarily of ink components and is stated at the lower of cost (determined by the first-in, first-out method) or market.

Fixed assets are carried at cost less accumulated depreciation and amortization. Furniture, fixtures and equipment are generally depreciated on the straight-line method over their estimated service lives. Leasehold improvements are amortized on a straight-line basis over the shorter of five years or the term of the lease. Major renovations and betterments are capitalized. Maintenance, repairs and minor items are expensed as incurred. Upon disposal, assets and related depreciation are removed from the accounts and the net amount, less proceeds from disposal, is charged or credited to income.

Patent costs are charged to expense as incurred due to the uncertainty of their recoverability as a result of the Company’s adverse liquidity situation.

Revenues - In accordance with Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”) 605, Revenue Recognition, the Company recognizes revenue when (i) persuasive evidence of a customer or distributor arrangement exists or acceptance occurs, (ii) a retailer, distributor or wholesaler receives the goods, (iii) the price is fixed or determinable, and (iv) collectability of the sales revenue is reasonably assured. Subject to these criteria, the Company will generally recognize revenue upon shipment of product. Revenue from license fees and royalties will be recognized as earned over the license term.

Income taxes - Deferred income taxes are provided for all temporary differences and net operating loss and tax credit carryforwards. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

Fair value - The carrying amounts reflected in the balance sheets for cash, receivables, accounts payable and accrued expenses approximate fair value due to the short maturities of these instruments. The carrying amount of the demand loans and the line of credit approximates fair value since the interest rate associated with the debt approximates the current market interest rates.

Earnings (loss) per share - The Company follows FASB ASC 260 resulting in the presentation of basic and diluted earnings per share.Basic earnings per common share are based on the weighted average number of shares outstanding during the periods presented. Diluted earnings per share are computed using weighted average number of common shares plus dilutive common share equivalents outstanding during the period. Potential common shares that would have the effect of increasing diluted earnings per share are considered to be anti-dilutive, i.e. the exercise prices of the outstanding stock options were greater than the market price of the common stock.

The table below presents the computation of basic and diluted weighted average common shares outstanding:

	2014		2013		2012
Basic shares outstanding		58,599,016		58,599,016		58,565,605
Incremental shares from assumed conversion of stock options and warrants		1,674		88,678		–
Diluted shares outstanding		58,600,690		58,687,694		58,565,605

Comprehensive income (loss) - The Company follows FASB ASC 220 in reporting comprehensive income. 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 the Company has no items of other comprehensive income, comprehensive income (loss) is equal to net income (loss).

Recoverability of Long-Lived Assets

The Company follows FASB ASC 360-35, “Impairment or Disposal of Long-Lived Assets.” The Statement requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. The Company is not aware of any events or circumstances which indicate the existence of an impairment which would be material to the Company’s annual financial statements.

Recently Adopted Accounting Pronouncements

As of December 31, 2014 and for the year then ended, there were no recently adopted accounting pronouncements that had a material effect on the Company’s financial statements.

Recently Issued Accounting Pronouncements Not Yet Adopted

In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements – Going Concern (Subtopic 205-40), Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. The amendments in this Update provide guidance about management’s responsibility to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued and to provide related footnote disclosures. Substantial doubt about an entity’s ability to continue as a going concern exists when relevant conditions and events, considered in the aggregate, indicate that it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued. The amendments in this Update are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. Management is assessing the impact of the adoption to the financial statements.

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Convertible Debentures (Details) - USD ($)	3 Months Ended	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Debt Instrument [Line Items]
Interest expense		$ 21,600	$ 16,300	$ 10,100
Warrant [Member]
Debt Instrument [Line Items]
Fair value of warrants issued	$ 2,000	2,000
Relative fair value of warrants recorded as discount to notes payable	$ 1,900	1,900
Pricing model used to value warrants	Black-Scholes pricing model
Interest expense		500
Number of warrants issued during period	166,400
Convertible Debt [Member] | Convertible Debt One [Member]
Debt Instrument [Line Items]
Debt instrument, face amount	$ 105,000	$ 105,000
Debt instrument, issuance date		During third quarter 2013
Debt instrument, interest rate	7.00%	7.00%
Debt instrument, maturity date		Two years from date of issuance
Debt instrument, conversion price per share	$ .05	$ .05
Number of shares of common stock that can be purchased through warrants	525,000	525,000
Price per share of warrants	$ .02	$ .02
Warrant exercisable term		2 years
Warrant expiration term		7 years
Fair value of warrants issued	$ 9,100	$ 9,100
Relative fair value of warrants recorded as discount to notes payable	8,300	$ 8,300
Pricing model used to value warrants		Black-Scholes pricing model
Interest expense		$ 4,200	$ 2,100
Convertible Debt [Member] | Convertible Debt Two [Member]
Debt Instrument [Line Items]
Debt instrument, face amount	$ 28,300	$ 28,300
Debt instrument, issuance date		During third quarter 2014
Debt instrument, interest rate	7.00%	7.00%
Debt instrument, maturity date		Two years from date of issuance
Debt instrument, conversion price per share	$ 0.05	$ 0.05
Number of shares of common stock that can be purchased through warrants	141,400	141,400
Price per share of warrants	$ .02	$ .02
Warrant exercisable term		2 years
Warrant expiration term		7 years
Convertible Debt [Member] | Convertible Debt Three [Member]
Debt Instrument [Line Items]
Debt instrument, face amount	$ 5,000	$ 5,000
Debt instrument, issuance date		During third quarter 2014
Debt instrument, interest rate	7.00%	7.00%
Debt instrument, maturity date		Two years from date of issuance
Debt instrument, conversion price per share	$ .05	$ .05
Number of shares of common stock that can be purchased through warrants	25,000	25,000
Price per share of warrants	$ 0.02	$ 0.02
Warrant exercisable term		2 years
Warrant expiration term		7 years

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Stock Options, Warrants and 401(k) Savings Plan (Summary of Warrants Activity) (Details) - Warrant [Member] - $ / shares	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Warrants
Warrants outstanding at beginning of period	660,500	132,500	85,500
Granted	166,365	528,000	47,000
Cancelled	24,500
Warrants outstanding at end of period	802,365	660,500	132,500
Price
Warrants outstanding at beginning of period	$ 0.026	$ 0.052	$ 0.061
Granted	0.02	0.02	0.036
Cancelled	0.037
Warrants outstanding at end of period	$ 0.025	$ 0.026	$ 0.052

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Balance Sheets - USD ($)	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Current assets
Cash	$ 28,000	$ 52,900	$ 20,600	$ 22,900
Accounts receivable less $5,000 allowance for doubtful accounts	287,800	237,100	68,500
Inventory	43,500	28,500	26,000
Prepaid and other	18,800	31,500	23,800
Total current assets	378,100	350,000	138,900
Fixed assets
Leasehold improvements	19,700	72,500	72,500
Furniture, fixtures and equipment	176,800	186,300	184,500
Fixed assets, gross	196,500	258,800	257,000
Less: accumulated depreciation and amortization	178,400	257,300	256,400
Total fixed assets	18,100	1,500	600
Total assets	$ 396,200	351,500	139,500
Current liabilities
Promissory note		18,800	43,800
Demand loans	$ 63,000	$ 92,500	$ 89,500
Convertible debentures	102,900
Accounts payable	160,300	$ 169,500	$ 245,600
Accrued expenses	383,000	306,000	201,200
Deferred revenue	93,400	113,800	26,000
Total current liabilities	$ 802,600	$ 700,600	$ 606,100
Commitments and contingencies
Convertible debentures, net of unaccreted discount of $1,400 at December 31, 2014 and $6,300 at December 31, 2013	$ 31,800	$ 98,700
Stockholders' deficiency
Series A preferred stock, $1.00 par value, Authorized - 300,000 shares, Issued and outstanding - none
Common stock, $0.01 par value Authorized - 75,000,000 shares Issued and outstanding - 58,599,016 shares	$ 586,000	$ 586,000	$ 586,000
Paid-in capital	12,408,500	12,406,600	12,398,100
Accumulated deficit	(13,432,700)	(13,440,400)	(13,450,700)
Total stockholders' deficiency	(438,200)	(447,800)	(466,600)	$ (334,400)
Total liabilities and stockholders' deficiency	$ 396,200	$ 351,500	$ 139,500

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Subsequent Events (Details) - USD ($)	1 Months Ended	12 Months Ended			19 Months Ended
	Jul. 31, 2015	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Jul. 31, 2015
Subsequent Event [Line Items]
Repayments of outstanding demand loans		$ 5,000		$ 2,500
Subsequent Event [Member]
Subsequent Event [Line Items]
Repayments of outstanding demand loans					$ 26,000
Repayments of convertible debenture	$ 10,000
Revised conversion price on $95,000 of convertible debentures	$ 0.025

XML

Statements of Cash Flows - USD ($)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Operating Activities
Net income (loss)	$ 7,700	$ 10,300	$ (146,100)
Adjustments to reconcile net income (loss) to net cash used in operating activities
Depreciation and amortization	$ 4,000	900	3,100
Reversal of accounts payable		(39,500)	(7,800)
Financing cost - warrant grants		100	$ 1,200
Accretion of interest - convertible debentures	$ 4,600	2,100
Net income (loss) adjusted for non-cash operating activities	16,300	(26,100)	$ (149,600)
(Increase) decrease in assets
Accounts receivable	(50,700)	(168,600)	(36,700)
Inventory	(15,000)	(2,500)	(5,200)
Prepaid and other	12,700	(7,700)	(500)
Increase (decrease) in liabilities
Accounts payable and accrued expenses	71,600	68,200	174,500
Deferred revenue	(20,400)	87,800	(16,800)
Total increase (decrease) in operating capital	(1,800)	(22,800)	115,300
Net cash provided by (used in) operating activities	14,500	(48,900)	$ (34,300)
Investing Activities
Additions to fixed assets	(20,600)	(1,800)
Net cash used in investing activities	(20,600)	(1,800)
Financing Activities
Repayment of borrowings under promissory note	$ (18,800)	(25,000)	$ (25,000)
Proceeds from demand loans		$ 3,000	49,500
Repayment of demand loans	$ (5,000)		$ (2,500)
Proceeds from convertible debentures	$ 5,000	$ 105,000
Issuance of common stock			$ 10,000
Net cash provided by (used in) financing activities	$ (18,800)	$ 83,000	32,000
Increase (decrease) in cash	(24,900)	32,300	(2,300)
Cash
Beginning of year	52,900	20,600	22,900
End of year	28,000	52,900	20,600
Supplemental Disclosure of Cash Flow Information
Cash paid for interest	300	$ 1,200	$ 2,200
Write-off of fully depreciated leasehold improvements and furniture fixtures and equipment
Accumulated depreciation and amortization	(82,900)
Leasehold improvements	72,500
Furniture, fixtures and equipment	10,400
Conversion of demand loans and interest to convertible debentures
Demand loans	24,500
Accrued expenses	3,800
Convertible debentures	26,400
Paid-in capital	$ 1,900
Conversion of demand loans and interest to common stock
Demand loans			$ 1,500
Accrued expenses			1,200
Common stock			400
Paid-in capital			$ 2,300

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Income Taxes (Details) - USD ($)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Operating Loss Carryforwards [Line Items]
Income tax provision
Net operating loss carryforwards	$ 4,601,000	$ 5,079,000	$ 5,658,000
Deferred tax assets, valuation allowance	$ 1,933,000	$ 2,133,000	$ 2,377,000
Unrecognized tax benefits
Change in unrecognized tax benefits during the period
Accrual for uncertain tax positions
Interest and penalties from tax examinations recognized in the statement of operations
Interest and penalties from tax examinations recognized on the balance sheet
Minimum [Member]
Operating Loss Carryforwards [Line Items]
Tax years open for examination	2011
Maximum [Member]
Operating Loss Carryforwards [Line Items]
Net operating loss carryforwards, expiration date	Dec. 31, 2034
Tax years open for examination	2014

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Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2014

Accounting Policies [Abstract]

Financial Statement Presentation

Financial Statement Presentation - Amounts included in the accompanying financial statements have been rounded to the nearest hundred, except for number of shares and per share information.

Estimates

Estimates - The preparation of the financial statements in conformity with Accounting Principles Generally Accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the dates of financial statements and the reported amounts of revenues and expenses during the reported periods. Actual results could differ from those estimates.

Cash

Cash consists of demand deposits with a major U.S. bank.

Accounts receivable and credit policies

Accounts receivable and credit policies - Accounts receivable are uncollateralized customer obligations due under normal trade terms requiring payment within 30 days from the invoice date. Accounts receivable are stated at the amount billed to the customer. Customer account balances with invoices dated over 90 days old are considered delinquent.

The carrying amount of accounts receivable is reduced by an allowance that reflects management's best estimate of the amounts that will not be collected. Management individually reviews all accounts receivable balances that exceed 90 days from invoice date and based on an assessment of current creditworthiness, estimates the portion, if any, of the balance that will not be collected.

Inventory

Inventory consists primarily of ink components and is stated at the lower of cost (determined by the first-in, first-out method) or market.

Fixed assets

Fixed assets are carried at cost less accumulated depreciation and amortization. Furniture, fixtures and equipment are generally depreciated on the straight-line method over their estimated service lives. Leasehold improvements are amortized on a straight-line basis over the shorter of five years or the term of the lease. Major renovations and betterments are capitalized. Maintenance, repairs and minor items are expensed as incurred. Upon disposal, assets and related depreciation are removed from the accounts and the net amount, less proceeds from disposal, is charged or credited to income.

Patent costs

Patent costs are charged to expense as incurred due to the uncertainty of their recoverability as a result of the Company’s adverse liquidity situation.

Revenues

Revenues - In accordance with Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”) 605, Revenue Recognition, the Company recognizes revenue when (i) persuasive evidence of a customer or distributor arrangement exists or acceptance occurs, (ii) a retailer, distributor or wholesaler receives the goods, (iii) the price is fixed or determinable, and (iv) collectability of the sales revenue is reasonably assured. Subject to these criteria, the Company will generally recognize revenue upon shipment of product. Revenue from license fees and royalties will be recognized as earned over the license term.

Income taxes

Income taxes - Deferred income taxes are provided for all temporary differences and net operating loss and tax credit carryforwards. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

Fair value

Fair value - The carrying amounts reflected in the balance sheets for cash, receivables, accounts payable and accrued expenses approximate fair value due to the short maturities of these instruments. The carrying amount of the demand loans and the line of credit approximates fair value since the interest rate associated with the debt approximates the current market interest rates.

Earnings (loss) per share

Earnings (loss) per share - The Company follows FASB ASC 260 resulting in the presentation of basic and diluted earnings per share.Basic earnings per common share are based on the weighted average number of shares outstanding during the periods presented. Diluted earnings per share are computed using weighted average number of common shares plus dilutive common share equivalents outstanding during the period. Potential common shares that would have the effect of increasing diluted earnings per share are considered to be anti-dilutive, i.e. the exercise prices of the outstanding stock options were greater than the market price of the common stock.

The table below presents the computation of basic and diluted weighted average common shares outstanding:

	2014		2013		2012
Basic shares outstanding		58,599,016		58,599,016		58,565,605
Incremental shares from assumed conversion of stock options and warrants		1,674		88,678		–
Diluted shares outstanding		58,600,690		58,687,694		58,565,605

Comprehensive income (loss)

Comprehensive income (loss) - The Company follows FASB ASC 220 in reporting comprehensive income. 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 the Company has no items of other comprehensive income, comprehensive income (loss) is equal to net income (loss).

Recoverability of Long-Lived Assets

Recoverability of Long-Lived Assets

The Company follows FASB ASC 360-35, “Impairment or Disposal of Long-Lived Assets.” The Statement requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. The Company is not aware of any events or circumstances which indicate the existence of an impairment which would be material to the Company’s annual financial statements.

Recently Adopted Accounting Pronouncements

Recently Adopted Accounting Pronouncements

As of December 31, 2014 and for the year then ended, there were no recently adopted accounting pronouncements that had a material effect on the Company’s financial statements.

Recently Issued Accounting Pronouncements Not Yet Adopted

Recently Issued Accounting Pronouncements Not Yet Adopted

In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements – Going Concern (Subtopic 205-40), Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. The amendments in this Update provide guidance about management’s responsibility to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued and to provide related footnote disclosures. Substantial doubt about an entity’s ability to continue as a going concern exists when relevant conditions and events, considered in the aggregate, indicate that it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued. The amendments in this Update are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. Management is assessing the impact of the adoption to the financial statements.

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Commitments and Contingencies (Operating Leases) (Details) - USD ($)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Commitments and Contingencies Disclosure [Abstract]
Lease expiration date	Dec. 31, 2019
Future minimum payments due under operating leases:
2015	$ 44,900
2016	46,200
2017	47,400
2018	48,600
2019	16,300
Total rent expense under operating lease agreement	$ 44,800	$ 44,200	$ 44,400

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Stock Options, Warrants and 401(k) Savings Plan (Tables)

12 Months Ended

Dec. 31, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of Stock Option Activity

A summary of stock options under the Company’s stock option plans follows:

			Weighted
		Exercise	Average
	Number of	Price Range	Exercise
	Shares	Per Share	Price
Outstanding at December 31, 2011 and 2012	645,000	$0.12 and $.45	$0.32
Options expired	400,000	0.45	0.45
Outstanding at December 31, 2013	245,000	0.12	0.12
Options expired	245,000	0.12	0.12
Outstanding at December 31, 2014	0	–	–
	Option
	Shares
Exercisable options at year end:
2014	0
Weighted average remaining contractual life (years)	–
Options available for future grant:
2014	0

Schedule of Warrants Outstanding

A summary of outstanding warrants follows:

				Weighted
		Exercise		Average
	Number of	Price Range		Exercise
	Shares	Per Share		Price
Outstanding at December 31, 2011	85,500	$0.045 to $0.07		$0.061
Warrants granted	47,000	0.01 to 0.07		0.036
Outstanding at December 31, 2012	132,500	0.01 to 0.07		0.052
Warrants granted	528,000	0.02 and 0.021		0.02
Outstanding at December 31, 2013	660,500	0.01 to 0.07		0.026
Warrants granted	166,365	0.02		0.02
Warrants canceled	24,500	0.03 and 0.07		0.037
Outstanding at December 31, 2014	802,365	$0.01 to $0.07		$0.025
Weighted average remaining contractual life (years)	5.21
					Weighted
			Exercise		Average
			Price Range		Exercise
	Shares		Per Share		Price
Exercisable warrants at year end:
2014	111,000	$0.01 to $0.07		$0.055
Weighted average remaining contractual life (years)	1.33

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Organization of the Company

12 Months Ended

Dec. 31, 2014

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization of the Company

1.Organization of the Company

Nocopi Technologies, Inc. (the “Company”) is organized under the laws of the State of Maryland. Its main business activities are the development and distribution of document security products and the licensing of its patented reactive ink technologies for the Entertainment and Toy and the Document and Product Authentication markets in the United States and foreign countries. The Company operates in one principal industry segment.

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Balance Sheets (Parenthetical) - USD ($)	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Statement of Financial Position [Abstract]
Allowance for doubtful accounts	$ 5,000	$ 5,000	$ 5,000
Unaccreted discount on convertible debentures	$ 1,400	$ 6,300
Preferred stock, par value	$ 1.00	$ 1.00	$ 1.00
Preferred stock, shares authorized	300,000	300,000	300,000
Preferred stock, shares issued	0	0	0
Preferred stock, shares outstanding	0	0	0
Common stock, par value	$ 0.01	$ 0.01	$ 0.01
Common stock, shares authorized	75,000,000	75,000,000	75,000,000
Common stock, shares issued	58,599,016	58,599,016	58,599,016
Common stock, shares outstanding	58,599,016	58,599,016	58,599,016

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Commitments and Contingencies

12 Months Ended

Dec. 31, 2014

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

11. Commitments and Contingencies

The Company conducts its operations in leased facilities under a non-cancelable operating lease expiring in 2019.

Future minimum lease payments under non-cancelable operating leases with initial or remaining terms of one year or more at December 31, 2014 are: $44,900 – 2015; $46,200 – 2016; $47,400 –2017; $48,600 – 2018 and $16,300 – 2019.

Total rental expense under operating leases was $44,400, $44,200 and $44,800 in 2012, 2013 and 2014 respectively.

The Company has an employment agreement, expiring in May 2016, with Michael A. Feinstein, M.D., its Chairman of the Board and Chief Executive Officer. The employment agreement contains one-year renewal provisions that become effective after the original term. Dr. Feinstein receives base compensation of $85,000 per year plus a performance bonus determined by the Company’s Board of Directors. The Company has an employment agreement, expiring in March 2016, with Terry W. Stovold, its Chief Operating Officer, whereby Mr. Stovold receives a salary set by the Company’s Board of Directors, currently set at $75,000, along with a commission of seven percent on sales generated by his efforts. The employment agreement contains one-year renewal provisions that become effective after the original term. Future minimum compensation payments under these employment agreements are: $160,000 to be paid in 2015 and $54,200 to be paid in 2016.

From time to time, the Company may be subject to legal proceedings and claims that arise in the ordinary course of its business.

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Document and Entity Information - USD ($)	12 Months Ended
	Dec. 31, 2014	Aug. 15, 2015	Jun. 30, 2014
Document and Entity Information [Abstract]
Entity Registrant Name	NOCOPI TECHNOLOGIES INC/MD/
Entity Central Index Key	0000888981
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Document Type	10-K
Document Period End Date	Dec. 31, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	FY
Amendment Flag	false
Entity Public Float			$ 1,037,000
Entity Common Stock Shares Outstanding		58,599,016
Entity Well Known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	No

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Stock Options, Warrants and 401(k) Savings Plan

12 Months Ended

Dec. 31, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock Options, Warrants and 401(k) Savings Plan

12. Stock Options, Warrants and 401(k) Savings Plan

The Company follows FASB ASC 718, Share Based Payment, which requires that the cost resulting from all share-based payment transactions be recognized in the Company’s financial statements. FASB ASC 718 requires all share-based payments to employees, including grants of employee stock options, to be recognized in the statement of operations based on their fair values.

The 1999 Stock Option Plan provided for the granting of up to 2,000,000 incentive and non-qualified stock options to employees, non-employee directors, consultants and advisors to the Company. In the case of options designated as incentive stock options, the exercise price of the options granted must be not less than the fair market value of such shares on the date of grant. Non-qualified stock options may be granted at any amount established by the Stock Option Committee or, in the case of Discounted Options issued to non-employee directors in lieu of any portion of an Annual Retainer, in accordance with a formula designated in the Plan. The 1999 Stock Option Plan terminated in February 2009 and no further stock options can be granted under the plan; however, options granted before the termination date may be exercised through their expiration date.

The Company uses the Black-Scholes option pricing model to calculate the grant-date fair value of an award. There was no compensation expense recognized during the years ended December 31, 2014, 2013 and 2012 and there was no unrecognized portion of expense at December 31, 2014.

A summary of stock options under the Company’s stock option plans follows:

			Weighted
		Exercise	Average
	Number of	Price Range	Exercise
	Shares	Per Share	Price
Outstanding at December 31, 2011 and 2012	645,000	$0.12 and $.45	$0.32
Options expired	400,000	0.45	0.45
Outstanding at December 31, 2013	245,000	0.12	0.12
Options expired	245,000	0.12	0.12
Outstanding at December 31, 2014	0	–	–
	Option
	Shares
Exercisable options at year end:
2014	0
Weighted average remaining contractual life (years)	–
Options available for future grant:
2014	0

At December 31, 2014, the Company had 802,365 warrants to purchase common stock of the Company outstanding at exercise prices ranging from $0.01 to $0.07 and expiring at various dates through July 2021. The warrants were granted from 2010 to 2013 to six individuals in conjunction with loans provided to the Company, to ten investors who acquired convertible debentures from the Company in 2013 and 2014 and, in 2011, to a professional services provider related to certain fee payment considerations granted by the individual.

A summary of outstanding warrants follows:

				Weighted
		Exercise		Average
	Number of	Price Range		Exercise
	Shares	Per Share		Price
Outstanding at December 31, 2011	85,500	$0.045 to $0.07		$0.061
Warrants granted	47,000	0.01 to 0.07		0.036
Outstanding at December 31, 2012	132,500	0.01 to 0.07		0.052
Warrants granted	528,000	0.02 and 0.021		0.02
Outstanding at December 31, 2013	660,500	0.01 to 0.07		0.026
Warrants granted	166,365	0.02		0.02
Warrants canceled	24,500	0.03 and 0.07		0.037
Outstanding at December 31, 2014	802,365	$0.01 to $0.07		$0.025
Weighted average remaining contractual life (years)	5.21
					Weighted
			Exercise		Average
			Price Range		Exercise
	Shares		Per Share		Price
Exercisable warrants at year end:
2014	111,000	$0.01 to $0.07		$0.055
Weighted average remaining contractual life (years)	1.33

At December 31, 2014, the Company has reserved 3,955,005 shares of common stock for possible future issuance upon exercise of 802,365 warrants and for the conversion of approximately $138,300 convertible debentures and accrued interest into 3,152,640 shares of common stock.

The Company sponsors a 401(k) savings plan, covering substantially all employees, providing for employee and employer contributions. Employer contributions are made at the discretion of the Company. There were no contributions charged to expense during 2014, 2013 or 2012.

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Statements of Operations - USD ($)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Revenues
Licenses, royalties and fees	$ 358,800	$ 295,100	$ 414,900
Product and other sales	564,000	455,100	222,100
Total revenues	922,800	750,200	637,000
Cost of revenues
Licenses, royalties and fees	75,600	67,200	52,500
Product and other sales	248,700	218,300	149,500
Total cost of revenues	324,300	285,500	202,000
Gross profit	598,500	464,700	435,000
Operating expenses
Research and development	121,600	111,900	109,400
Sales and marketing	194,500	170,500	167,400
General and administrative	253,400	195,200	302,000
Total operating expenses	569,500	477,600	578,800
Net income (loss) from operations	$ 29,000	(12,900)	(143,800)
Other income (expenses)
Reversal of accounts payable		$ 39,500	$ 7,800
Interest income	$ 300
Interest expense, bank charges, financing cost and accretion of interest	(21,600)	$ (16,300)	$ (10,100)
Total other income (expenses)	(21,300)	23,200	(2,300)
Net income (loss)	$ 7,700	$ 10,300	$ (146,100)
Net income (loss) per common share
Basic	$ 0.00	$ 0.00	$ 0.00
Diluted	$ 0.00	$ 0.00	$ 0.00
Weighted average common shares outstanding
Basic	58,599,016	58,599,016	58,565,605
Diluted	58,600,690	58,687,694	58,565,605

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Promissory Note

12 Months Ended

Dec. 31, 2014

Line of Credit Facility [Abstract]

Promissory Note

6. Promissory Note

In 2008, the Company negotiated a $100,000 revolving line of credit with a bank to provide a source of working capital. The line of credit was secured by all the assets of the Company and bore interest at the bank’s prime rate plus 0.5%. During the term of the line of credit, the interest rate applicable to the Company’s line of credit was 3.75%. During the year ended December 31, 2009, the Company borrowed the entire $100,000 available under the line of credit. Until the third quarter of 2010, the Company had been required to pay interest only on borrowings under the line of credit. During the third quarter of 2010, the Company was notified by the bank that the line of credit was not being renewed and was offered repayment terms, which the Company accepted, to repay the outstanding loan balance in forty-eight equal monthly installments of $2,083, plus interest at the bank’s prime rate plus 0.5%, which was 3.75% throughout the repayment term, beginning in October 2010. In early July 2014, the Company repaid $6,250, the then remaining outstanding balance of the note.

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Demand Loans

12 Months Ended

Dec. 31, 2014

Debt Disclosure [Abstract]

Demand Loans

5. Demand Loans

In April 2012, the Company received an unsecured loan of $2,500 from an individual and repaid the loan, with interest at 8%, in May 2012.

In July 2012, the Company received an unsecured loan of $5,800 from an individual. The loan bears interest at 8% and is payable on demand. The loan was used to finance the Company’s working capital requirements. Additionally, the Company granted warrants to purchase 5,800 shares of common stock of the Company at $0.06 per share to this individual. The warrants expire in five years. A financing cost of approximately $200, representing the fair value of the warrants, was charged to income in the third quarter of 2012. The fair value of the warrants was determined using the Black-Scholes pricing model with the following assumptions: expected life-5 years; interest rate-.64%; expected volatility based on the Company’s historical volatility-108%; and dividend yield-0.

In July 2012, the Company received an unsecured loan of $3,000 from an individual. The loan bears interest at 8% and is payable on demand. The loan was used to finance the Company’s working capital requirements. Additionally, the Company granted warrants to purchase 3,000 shares of common stock of the Company at $0.06 per share to this individual. The warrants expire in five years. A financing cost of approximately $100, representing the fair value of the warrants, was charged to income in the third quarter of 2012. The fair value of the warrants was determined using the Black-Scholes pricing model with the following assumptions: expected life-5 years; interest rate-.60%; expected volatility based on the Company’s historical volatility-108%; and dividend yield-0.

In August 2012, the Company received an unsecured loan of $3,500 from an individual. The loan bears interest at 8% and is payable on demand. The loan was used to finance the Company’s working capital requirements. Additionally, the Company granted warrants to purchase 3,500 shares of common stock of the Company at $0.07 per share to this individual. The warrants expire in five years. A financing cost of approximately $100, representing the fair value of the warrants, was charged to income in the third quarter of 2012. The fair value of the warrants was determined using the Black-Scholes pricing model with the following assumptions: expected life-5 years; interest rate-.61%; expected volatility based on the Company’s historical volatility-108%; and dividend yield-0.

In September 2012, the Company received an unsecured loan of $20,000 from an individual. The loan bears interest at 8% and is payable on demand. The loan was used to finance the Company’s working capital requirements. Additionally, the Company granted warrants to purchase 20,000 shares of common stock of the Company at $0.03 per share to this individual. The warrants expire in five years. A financing cost of approximately $400, representing the fair value of the warrants, was charged to income in the third quarter of 2012. The fair value of the warrants was determined using the Black-Scholes pricing model with the following assumptions: expected life-5 years; interest rate-.68%; expected volatility based on the Company’s historical volatility-110%; and dividend yield-0.

In October 2012, the Company received an unsecured loan of $3,000 from an individual. The loan bears interest at 8% and is payable on demand. The loan was used to finance the Company’s working capital requirements. Additionally, the Company granted warrants to purchase 3,000 shares of common stock of the Company at $0.03 per share to this individual. The warrants expire in five years. A financing cost of approximately $100, representing the fair value of the warrants, was charged to income in the fourth quarter of 2012. The fair value of the warrants was determined using the Black-Scholes pricing model with the following assumptions: expected life-5 years; interest rate-.67%; expected volatility based on the Company’s historical volatility-113%; and dividend yield-0.

In October 2012, the Company received an unsecured loan of $3,700 from an individual. The loan bears interest at 8% and is payable on demand. The loan was used to finance the Company’s working capital requirements. Additionally, the Company granted warrants to purchase 3,700 shares of common stock of the Company at $0.025 per share to this individual. The warrants expire in five years. A financing cost of approximately $100, representing the fair value of the warrants, was charged to income in the fourth quarter of 2012. The fair value of the warrants was determined using the Black-Scholes pricing model with the following assumptions: expected life-5 years; interest rate-.67%; expected volatility based on the Company’s historical volatility-113%; and dividend yield-0.

In October 2012, the Company received an unsecured loan of $4,000 from an individual. The loan bears interest at 8% and is payable on demand. The loan was used to finance the Company’s working capital requirements. Additionally, the Company granted warrants to purchase 4,000 shares of common stock of the Company at $0.022 per share to this individual. The warrants expire in five years. A financing cost of approximately $100, representing the fair value of the warrants, was charged to income in the fourth quarter of 2012. The fair value of the warrants was determined using the Black-Scholes pricing model with the following assumptions: expected life-5 years; interest rate-.82%; expected volatility based on the Company’s historical volatility-113%; and dividend yield-0.

In November 2012, the Company received an unsecured loan of $4,000 from an individual. The loan bears interest at 8% and is payable on demand. The loan was used to finance the Company’s working capital requirements. Additionally, the Company granted warrants to purchase 4,000 shares of common stock of the Company at $0.01 per share to this individual. The warrants expire in five years. A financing cost of approximately $100, representing the fair value of the warrants, was charged to income in the fourth quarter of 2012. The fair value of the warrants was determined using the Black-Scholes pricing model with the following assumptions: expected life-5 years; interest rate-.73%; expected volatility based on the Company’s historical volatility-113%; and dividend yield-0.

In March 2013, the Company received an unsecured loan of $3,000 from an individual. The loan bears interest at 8% and is payable on demand. The loan was used to finance the Company’s working capital requirements. Additionally, the Company granted warrants to purchase 3,000 shares of common stock of the Company at $0.021 per share to this individual. The warrants expire in five years. A financing cost of approximately $100, representing the fair value of the warrants, was charged to income in the first quarter of 2013. The fair value of the warrants was determined using the Black-Scholes pricing model with the following assumptions: expected life-5 years; interest rate-.77%; expected volatility based on the Company’s historical volatility-101%; and dividend yield-0.

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Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2014

Accounting Policies [Abstract]

Schedule of Computation of Basic and Diluted Weighted Average Common Shares Outstanding

The table below presents the computation of basic and diluted weighted average common shares outstanding:

	2014		2013		2012
Basic shares outstanding		58,599,016		58,599,016		58,565,605
Incremental shares from assumed conversion of stock options and warrants		1,674		88,678		–
Diluted shares outstanding		58,600,690		58,687,694		58,565,605

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Major Customer and Geographic Information

12 Months Ended

Dec. 31, 2014

Major Customer and Geographic Information [Abstract]

Major Customer and Geographic Information

13. Major Customer and Geographic Information

The 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:

	Year ended December 31
	2014			2013			2012
Customer A		47	%		49	%		14	%
Customer B		19	%		15	%		10	%

The Company’s non-affiliate customers whose individual balances amounted to more than 10% of the Company’s net accounts receivable, expressed as a percentage of net accounts receivable, were:

	December 31
	2014			2013			2012
Customer A		46	%		45	%		48	%
Customer B		35	%		32	%		20	%

The Company performs ongoing credit evaluations of its customers and generally does not require collateral. The Company also maintains allowances for potential credit losses. The loss of a major customer could have a material adverse effect on the Company’s business operations and financial condition.

The Company’s revenues by geographic region are as follows:

	Year ended December 31
	2014		2013		2012
North America	$	477,100	$	365,700	$	540,600
Asia		445,700		384,500		96,400
	$	922,800	$	750,200	$	637,000

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Other Income (Expenses)

12 Months Ended

Dec. 31, 2014

Other Income and Expenses [Abstract]

Other Income (Expenses)

9. Other Income (Expenses)

Other income (expenses) includes, in 2013, the reversal of approximately $39,500 of accounts payable related to invoices received during 2009 from a professional services business that provided consulting services to the Company that the Company, with legal counsel, has determined to be no longer statutorily payable as the statute of limitations to bring a claim has expired and, in 2012, the reversal of approximately $7,800 of accounts payable related to invoices received during 2002 from a professional services business that provided legal services to the Company that the Company, with legal counsel, has determined to be no longer statutorily payable as the statute of limitations to bring a claim has expired. Additionally, other income (expenses) includes interest on funds borrowed under the Company’s promissory note with a bank, on unsecured loans from five individuals and, in 2013 and 2014 and on convertible debentures held by ten investors. Also included in other income (expenses) are financing costs related to warrants issued in 2013 and 2012 in conjunction with unsecured loans received during that periods.

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Convertible Debentures

12 Months Ended

Dec. 31, 2014

Convertible Debt [Abstract]

Convertible Debentures

7. Convertible Debentures

During the third quarter of 2013, the Company received $105,000 through the issuance of convertible debentures to six individual investors and a trust. The debentures bear interest at 7% and are due and payable two years from the date of issuance. Proceeds of the debenture issuance were used to finance the Company’s working capital requirements. At option of the lender, the debentures and accrued interest are convertible in whole or part into common stock of the Company at $0.05 per share. The Company also granted warrants to purchase 525,000 shares of the Company’s common stock at $0.02 per share to the holders of the debentures. The warrants are exercisable two years after issuance and expire seven years after issuance.

The fair value of the warrants of approximately $9,100 was determined using the Black-Scholes pricing model. The relative fair value of the warrants was approximately $8,300 and was recorded as a discount to the notes payable with an offsetting credit to additional paid-in capital since the Company determined that the warrants were an equity instrument in accordance with FASB ASC 815. The debt discount related to the warrant issuances is being accreted through interest expense over the term of the notes payable. For the years ended December 31, 2014 and 2013, approximately $4,200 and $2,100, respectively, was accreted through interest expense.

During the third quarter of 2014, the Company, with the approval of its Board of Directors, exchanged two demand loans totaling $24,500 including one demand loan in the amount of $4,500 held by Herman M. Gerwitz, a Director, along with approximately $3,800 of accrued interest for convertible debentures totaling approximately $28,300. The debentures bear interest at 7% and are due and payable two years from the date of issuance. At option of the lender, the debentures and accrued interest are convertible in whole or part into common stock of the Company at $0.05 per share. The Company also granted warrants to purchase approximately 141,400 shares of common stock of the Company at $0.02 per share to the debenture holders. The warrants are exercisable two years after issuance and expire seven years after issuance.

During the third quarter of 2014, the Company received $5,000 through the issuance of a convertible debenture to an investor. The debenture bears interest at 7% and is due and payable two years from the date of issuance. At option of the lender, the debenture and accrued interest are convertible in whole or part into common stock of the Company at $0.05 per share. The Company also granted warrants to purchase 25,000 shares of the Company’s common stock at $0.02 per share to the holder of the debenture. The warrants are exercisable two years after issuance and expire seven years after issuance.

The fair value of the approximately 166,400 warrants issued in the third quarter of 2014 of approximately $2,000 was determined using the Black-Scholes pricing model. The relative fair value of the warrants was approximately $1,900 and was recorded as a discount to the notes payable with an offsetting credit to additional paid-in capital since the Company determined that the warrants were an equity instrument in accordance with FASB ASC 815. The debt discount related to the warrant issuances is being accreted through interest expense over the term of the notes payable. For the year ended December 31, 2014, approximately $500 was accreted through interest expense.

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Stockholders' Deficiency

12 Months Ended

Dec. 31, 2014

Stockholders' Equity Note [Abstract]

Stockholders' Deficiency

8. Stockholders' Deficiency

During 2012, the Company sold 208,334 shares of its common stock to a non-affiliated investor for $10,000 pursuant to a private placement.

The Company, with the approval of its Board of Directors, entered into a Conversion Agreement effective March 16, 2012 with Herman M. Gerwitz, a Director, whereby $1,500 in principal of the unsecured loan owed by the Company to him, together with approximately $1,200 of accrued interest was converted into 44,216 shares of restricted common stock of the Company at $0.06 per share, the market price at the date of conversion. After giving effect to this conversion, the principal balance of the unsecured loan held by Mr. Gerwitz was reduced to $4,500.

In July 2014, the common stock private placement was extended to December 31, 2015 by the Company’s Board of Directors.

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Income Taxes

12 Months Ended

Dec. 31, 2014

Income Tax Disclosure [Abstract]

Income Taxes

10. Income Taxes

There is no provision for income taxes for the years ended December 31, 2014 and 2013 due to the availability of net operating loss carryforwards. There is no income tax benefit for the year ended December 31, 2012 due to the availability of net operating loss carryforwards (“NOL’s”) for which the Company had previously established a 100% valuation allowance for deferred tax assets due to the uncertainty of their recoverability. At December 31, 2014, December 31, 2013 and December 31, 2012, the Company had NOL’s approximating $4,601,000, $5,079,000 and $5,658,000, respectively. The operating losses at December 31, 2014 are available to offset future taxable income; however, if not utilized, they expire in varying amounts through the year 2034. As a result of the sale of the Company's common stock in an equity offering in late 1997 and the issuance of additional shares, the amount of the NOL’s may be limited. Additionally, the utilization of these NOL’s, if available, to reduce future income taxes will depend on the generation of sufficient taxable income prior to their expiration. There were no material temporary differences for the years ended December 31, 2014, December 31, 2013 and December 31, 2012. The Company has established a 100% valuation allowance of approximately $1,933,000, $2,133,000 and $2,377,000 at December 31, 2014, December 31, 2013 and December 31, 2012, respectively, for the deferred tax assets due to the uncertainty of their realization.

The Company has adopted the provisions of FASB ASC 740-10-50-15, “Unrecognized Tax Benefit Related Disclosures.” There were no unrecognized tax benefits as of the date of adoption and no unrecognized tax benefits at December 31, 2014. There was no change in unrecognized tax benefits during the year ended December 31, 2014 and there was no accrual for uncertain tax positions as of December 31, 2014.

There were no interest and penalties recognized in the statement of operations and in the balance sheet. Tax years from 2011 through 2014 remain subject to examination by U.S. federal and state tax jurisdictions.

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Other Income (Expenses) (Details) - USD ($)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Other Income and Expenses [Abstract]
Reversal of accounts payable		$ 39,500	$ 7,800

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Quarterly Financial Information (Unaudited)

12 Months Ended

Dec. 31, 2014

Quarterly Financial Information Disclosure [Abstract]

Quarterly Financial Information (Unaudited)

15. Quarterly Financial Information (Unaudited)

Nocopi Technologies, Inc.

Balance Sheets

(Unaudited)

	September 30,			June 30,			March 31,
	2014			2014			2014
Assets
Current assets
Cash	$	72,700		$	9,300		$	36,800
Accounts receivable less $5,000 allowance		185,300			265,500			198,200
Inventory		47,500			29,900			36,800
Prepaid and other		10,100			12,000			21,200
Total current assets		315,600			316,700			293,000
Fixed assets
Leasehold improvements		19,100			19,100			19,100
Furniture, fixture and equipment		176,800			176,800			176,800
		195,900			195,900			195,900
Less: accumulated depreciation and amortization		177,300			176,100			174,800
		18,600			19,800			21,100
Total assets	$	334,200		$	336,500		$	314,100
Liabilities and Stockholders' Deficiency
Current liabilities
Promissory note	$	–		$	6,300		$	12,500
Demand loans		63,000			92,500			92,500
Convertible debentures		101,900			–			–
Accounts payable		135,200			130,400			147,200
Accrued expenses		362,800			348,600			329,500
Deferred revenue		123,100			120,800			105,700
Total current liabilities		786,000			698,600			687,400
Convertible debentures		31,600			100,800			99,700
Stockholders' deficiency
Common stock, $0.01 par value, Authorized - 75,000,000 shares, Issued and outstanding - 58,599,016 shares		586,000			586,000			586,000
Paid-in capital		12,408,500			12,406,600			12,406,600
Accumulated deficit		(13,477,900	)		(13,455,500	)		(13,465,600	)
		(483,400	)		(462,900	)		(473,000	)
Total liabilities and stockholders deficiency	$	334,200		$	336,500		$	314,100

Nocopi Technologies, Inc.

Balance Sheets

(Unaudited)

	September 30,			June 30,			March 31,			September 30,			June 30,
	2013			2013			2013			2012			2012
Assets
Current assets
Cash	$	117,600		$	23,400		$	1,100		$	5,700		$	8,400
Accounts receivable less $5,000 allowance		159,400			153,600			157,700			77,900			67,100
Inventory		29,000			52,200			10,300			21,800			15,100
Prepaid and other		11,400			13,800			17,100			12,500			17,500
Total current assets		317,400			243,000			186,200			117,900			108,100
Fixed assets
Leasehold improvements		72,500			72,500			72,500			72,500			72,500
Furniture, fixture and equipment		184,500			184,500			184,500			184,500			184,500
		257,000			257,000			257,000			257,000			257,000
Less: accumulated depreciation and amortization		257,000			257,000			256,700			256,000			255,100
		–			–			300			1,000			1,900
Total assets	$	317,400		$	243,000		$	186,500		$	118,900		$	110,000
Liabilities and Stockholders’ Deficiency
Current liabilities
Promissory note	$	25,000		$	31,300		$	37,500		$	50,000		$	56,300
Demand loans		92,500			92,500			92,500			74,800			42,500
Accounts payable		195,200			235,500			253,000			215,400			192,600
Accrued expenses		291,500			277,600			236,500			158,000			104,200
Deferred revenue		113,600			114,500			69,000			53,000			107,100
Total current liabilities		717,800			751,400			688,500			551,200			502,700
Convertible debentures		97,700			–			–			–			–
Stockholders’ deficiency
Common stock, $0.01 par value, Authorized - 75,000,000 shares, Issued and outstanding - 58,599,016 shares		586,000			586,000			586,000			586,000			586,000
Paid-in capital		12,406,600			12,398,200			12,398,200			12,397,900			12,396,900
Accumulated deficit		(13,490,700	)		(13,492,600	)		(13,486,200	)		(13,416,200	)		(13,375,600	)
		(498,100	)		(508,400	)		(502,000	)		(432,300	)		(392,700	)
Total liabilities and stockholders’ deficiency	$	317,400		$	243,000		$	186,500		$	118,900		$	110,000

Nocopi Technologies, Inc.

Statements of Operations

(Unaudited)

	Three Months			Nine Months			Three Months			Six Months			Three Months
	ended			ended			ended			ended			ended
	September 30,			September 30,			June 30,			June 30,			March 31,
	2014			2014			2014			2014			2014
Revenues
Licenses, royalties and fees	$	83,000		$	240,500		$	77,500		$	157,500		$	80,000
Product and other sales		125,800			389,300			158,600			263,500			104,900
		208,800			629,800			236,100			421,000			184,900
Cost of revenues
Licenses, royalties and fees		17,700			54,200			19,300			36,500			17,200
Product and other sales		56,000			176,500			65,200			120,500			55,300
		73,700			230,700			84,500			157,000			72,500
Gross profit		135,100			399,100			151,600			264,000			112,400
Operating expenses
Research and development		29,200			90,200			30,400			61,000			30,600
Sales and marketing		46,800			141,000			46,600			94,200			47,600
General and administrative		75,900			189,500			59,200			113,600			54,400
		151,900			420,700			136,200			268,800			132,600
Net income (loss) from operations		(16,800	)		(21,600	)		15,400			(4,800	)		(20,200	)
Other income (expenses)
Reversal of accounts payable
Interest income		–			300			–			300			300
Interest expense, bank charges and accretion of interest		(5,600	)		(16,200	)		(5,300	)		(10,600	)		(5,300	)
		(5,600	)		(15,900	)		(5,300	)		(10,300	)		(5,000	)
Net loss	$	(22,400	)	$	(37,500	)	$	10,100		$	(15,100	)	$	(25,200	)
Basic and diluted loss per common share	$	(.00	)	$	(.00	)	$	.00		$	(.00	)	$	(.00	)
Weighted average common shares outstanding
Basic		58,599,016			58,599,016			58,599,016			58,599,016			58,599,016
Diluted		58,599,016			58,599,016			58,600,830			58,599,016			58,599,016

Nocopi Technologies, Inc.

Statements of Operations

(Unaudited)

	Three Months			Nine Months			Three Months			Six Months			Three Months			Three Months			Nine Months			Three Months			Six Months
	ended			ended			ended			ended			ended			ended			ended			ended			ended
	September 30,			September 30,			June 30,			June 30,			March 31,			September 30,			September 30,			June 30,			June 30,
	2013			2013			2013			2013			2013			2012			2012			2012			2012
Revenues
Licenses, royalties and fees	$	82,800		$	209,800		$	69,900		$	127,000		$	57,100		$	107,700		$	324,600		$	112,800		$	216,900
Product and other sales		106,900			307,200			116,400			200,300			83,900			23,800			172,400			85,200			148,600
		189,700			517,000			186,300			327,300			141,000			131,500			497,000			198,000			365,500
Cost of revenues
Licenses, royalties and fees		15,100			46,600			17,400			31,500			14,100			10,400			40,200			14,400			29,800
Product and other sales		50,400			148,500			56,200			98,100			41,900			27,000			117,600			43,200			90,600
		65,500			195,100			73,600			129,600			56,000			37,400			157,800			57,600			120,400
Gross profit		124,200			321,900			112,700			197,700			85,000			94,100			339,200			140,400			245,100
Operating expenses
Research and development		27,800			82,900			26,600			55,100			28,500			26,200			82,000			27,700			55,800
Sales and marketing		43,400			123,800			41,100			80,400			39,300			38,100			129,800			45,500			91,700
General and administrative		46,300			144,500			48,400			98,200			49,800			67,100			240,000			71,300			172,900
		117,500			351,200			116,100			233,700			117,600			131,400			451,800			144,500			320,400
Net income (loss) from operations		6,700			(29,300	)		(3,400	)		(36,000	)		(32,600	)		(37,300	)		(112,600	)		(4,100	)		(75,300	)
Other income (expenses)
Reversal of accounts payable		–			–			–			–			–			–			7,800			2,200			7,800
Interest expense, bank charges, financing cost and accretion of interest		(4,800	)		(10,700	)		(3,000	)		(5,900	)		(2,900	)		(3,300	)		(6,800	)		(1,800	)		(3,500	)
		(4,800	)		(10,700	)		(3,000	)		(5,900	)		(2,900	)		(3,300	)		1,000			400			4,300
Net income (loss)	$	1,900		$	(40,000	)	$	(6,400	)	$	(41,900	)	$	(35,500	)	$	(40,600	)	$	(111,600	)	$	(3,700	)	$	(71,000	)
Net income (loss) per common share
Basic	$	.00		$	(.00	)	$	(.00	)	$	(.00	)	$	(.00	)	$	(.00	)	$	(.00	)	$	(.00	)	$	(.00	)
Diluted	$	.00		$	(.00	)	$	(.00	)	$	(.00	)	$	(.00	)	$	(.00	)	$	(.00	)	$	(.00	)	$	(.00	)
Weighted average common shares outstanding
Basic		58,599,016			58,599,016			58,599,016			58,599,016			58,599,016			58,599,016			58,554,194			58,599,016			58,532,194
Diluted		58,745,139			58,599,016			58,599,016			58,599,016			58,599,016			58,599,016			58,554,194			58,599,016			58,532,194

Nocopi Technologies, Inc.

Statements of Cash Flows

(Unaudited)

	Nine Months			Six Months			Three Months
	ended			ended			ended
	September 30,			June 30,			March 31,
	2014			2014			2014
Operating Activities
Net loss	$	(37,500	)	$	(15,100	)	$	(25,200	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities
Depreciation and amortization		2,900			1,700			400
Accretion of interest - convertible debentures		3,400			2,100			1,000
		(31,200	)		(11,300	)		(23,800	)
(Increase) decrease in assets
Accounts receivable		51,800			(28,400	)		38,900
Inventory		(19,000	)		(1,400	)		(8,300	)
Prepaid and other		21,400			19,500			10,300
Increase (decrease) in liabilities
Accounts payable and accrued expenses		26,300			3,500			1,200
Deferred revenue		9,300			7,000			(8,100	)
		89,800			200			34,000
Net cash provided by (used in) operating activities		58,600			(11,100	)		10,200
Investment Activities
Additions to fixed assets		(20,000	)		(20,000	)		(20,000	)
Net cash used in investment activities		(20,000	)		(20,000	)		(20,000	)
Financing Activities
Repayment of borrowings under promissory note		(18,800	)		(12,500	)		(6,300	)
Repayment of demand loans		(5,000	)		–			–
Proceeds from convertible debenture		5,000			–			–
Net cash used in financing activities		(18,800	)		(12,500	)		(6,300	)
		19,800			(43,600	)		(16,100	)
Cash at beginning of year		52,900			52,900			52,900
Cash at end of period		72,700			9,300			36,800
Supplemental Disclosure of Cash Flow Information
Cash paid for interest	$	300		$	300		$	200
Supplemental Disclosure of Non Cash Investing Activities
Write-off of fully depreciated leasehold improvements and furniture, fixtures and equipment
Accumulated depreciation and amortization	$	(82,900	)	$	(82,900	)	$	(82,900	)
Leasehold improvements	$	72,500		$	72,500		$	72,500
Furniture, fixtures and equipment	$	10,400		$	10,400		$	10,400
Supplemental Disclosure of Non Cash Financing Activities
Conversion of demand loans and interest to convertible debentures
Demand loans	$	24,500			–			–
Accrued expenses	$	3,800			–			–
Convertible debentures	$	26,400			–			–
Paid-in capital	$	1,900			–			–

Nocopi Technologies, Inc.

Statements of Cash Flows

(Unaudited)

	Nine Months			Six Months			Three Months			Nine Months			Six Months
	ended			ended			ended			ended			ended
	September 30,			June 30,			March 31,			September 30,			June 30,
	2013			2013			2013			2012			2012
Operating Activities
Net loss	$	(40,000	)	$	(41,900	)	$	(35,500	)	$	(111,600	)	$	(71,000	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities
Depreciation and amortization		600			600			300			2,700			1,800
Reversal of accounts payable		–			–			–			(7,800	)		(7,800	)
Financing cost – warrant grants		100			100			100			1,000			–
Accretion of interest – convertible debentures		1,100			–			–			–			–
		(38,200	)		(41,200	)		(35,100	)		(115,700	)		(77,000	)
(Increase) decrease in assets
Accounts receivable		(90,900	)		(85,100	)		(89,200	)		(46,100	)		(35,300	)
Inventory		(3,000	)		(26,200	)		15,700			(1,000	)		5,700
Prepaid and other		12,400			10,000			6,700			10,800			5,800
Increase in liabilities
Accounts payable and accrued expenses		39,900			66,300			42,700			101,100			24,500
Deferred revenue		87,600			88,500			43,000			10,200			64,300
		46,000			53,500			18,900			75,000			65,000
Net cash provided by (used in) operating activities		7,800			12,300			(16,200	)		(40,700	)		(12,000	)
Financing Activities
Repayment of borrowings under promissory note		(18,800	)		(12,500	)		(6,300	)		(18,800	)		(12,500	)
Proceeds from demand loan		3,000			3,000			3,000			34,800			2,500
Repayment of demand loan		–			–			–			(2,500	)		(2,500	)
Proceeds from convertible debentures		105,000			–			–			–			–
Issuance of common stock		–			–			–			10,000			10,000
Net cash provided by (used in) financing activities		89,200			(9,500	)		(3,300	)		23,500			(2,500	)
Increase (decrease) in cash		97,000			2,800			(19,500	)		(17,200	)		(14,500	)
Cash at beginning of year		20,600			20,600			20,600			22,900			22,900
Cash at end of period	$	117,600		$	23,400		$	1,100		$	5,700		$	8,400
Supplemental Disclosure of Cash Flow Information
Cash paid for interest	$	1,000		$	700		$	400		$	1,700		$	1,200
Supplemental disclosure of Non Cash Financing Activities
Conversion of demand loan and interest to common stock
Demand loans		–			–			–		$	1,500		$	1,500
Accrued expenses		–			–			–		$	1,200		$	1,200
Common stock		–			–			–		$	400		$	400
Paid-in capital		–			–			–		$	2,300		$	2,300

XML

Quarterly Financial Information (Unaudited) (Tables)

12 Months Ended

Dec. 31, 2014

Quarterly Financial Information Disclosure [Abstract]

Schedules of Quarterly Information

Nocopi Technologies, Inc.

Balance Sheets

(Unaudited)

	September 30,			June 30,			March 31,
	2014			2014			2014
Assets
Current assets
Cash	$	72,700		$	9,300		$	36,800
Accounts receivable less $5,000 allowance		185,300			265,500			198,200
Inventory		47,500			29,900			36,800
Prepaid and other		10,100			12,000			21,200
Total current assets		315,600			316,700			293,000
Fixed assets
Leasehold improvements		19,100			19,100			19,100
Furniture, fixture and equipment		176,800			176,800			176,800
		195,900			195,900			195,900
Less: accumulated depreciation and amortization		177,300			176,100			174,800
		18,600			19,800			21,100
Total assets	$	334,200		$	336,500		$	314,100
Liabilities and Stockholders' Deficiency
Current liabilities
Promissory note	$	–		$	6,300		$	12,500
Demand loans		63,000			92,500			92,500
Convertible debentures		101,900			–			–
Accounts payable		135,200			130,400			147,200
Accrued expenses		362,800			348,600			329,500
Deferred revenue		123,100			120,800			105,700
Total current liabilities		786,000			698,600			687,400
Convertible debentures		31,600			100,800			99,700
Stockholders' deficiency
Common stock, $0.01 par value, Authorized - 75,000,000 shares, Issued and outstanding - 58,599,016 shares		586,000			586,000			586,000
Paid-in capital		12,408,500			12,406,600			12,406,600
Accumulated deficit		(13,477,900	)		(13,455,500	)		(13,465,600	)
		(483,400	)		(462,900	)		(473,000	)
Total liabilities and stockholders deficiency	$	334,200		$	336,500		$	314,100

Nocopi Technologies, Inc.

Balance Sheets

(Unaudited)

	September 30,			June 30,			March 31,			September 30,			June 30,
	2013			2013			2013			2012			2012
Assets
Current assets
Cash	$	117,600		$	23,400		$	1,100		$	5,700		$	8,400
Accounts receivable less $5,000 allowance		159,400			153,600			157,700			77,900			67,100
Inventory		29,000			52,200			10,300			21,800			15,100
Prepaid and other		11,400			13,800			17,100			12,500			17,500
Total current assets		317,400			243,000			186,200			117,900			108,100
Fixed assets
Leasehold improvements		72,500			72,500			72,500			72,500			72,500
Furniture, fixture and equipment		184,500			184,500			184,500			184,500			184,500
		257,000			257,000			257,000			257,000			257,000
Less: accumulated depreciation and amortization		257,000			257,000			256,700			256,000			255,100
		–			–			300			1,000			1,900
Total assets	$	317,400		$	243,000		$	186,500		$	118,900		$	110,000
Liabilities and Stockholders’ Deficiency
Current liabilities
Promissory note	$	25,000		$	31,300		$	37,500		$	50,000		$	56,300
Demand loans		92,500			92,500			92,500			74,800			42,500
Accounts payable		195,200			235,500			253,000			215,400			192,600
Accrued expenses		291,500			277,600			236,500			158,000			104,200
Deferred revenue		113,600			114,500			69,000			53,000			107,100
Total current liabilities		717,800			751,400			688,500			551,200			502,700
Convertible debentures		97,700			–			–			–			–
Stockholders’ deficiency
Common stock, $0.01 par value, Authorized - 75,000,000 shares, Issued and outstanding - 58,599,016 shares		586,000			586,000			586,000			586,000			586,000
Paid-in capital		12,406,600			12,398,200			12,398,200			12,397,900			12,396,900
Accumulated deficit		(13,490,700	)		(13,492,600	)		(13,486,200	)		(13,416,200	)		(13,375,600	)
		(498,100	)		(508,400	)		(502,000	)		(432,300	)		(392,700	)
Total liabilities and stockholders’ deficiency	$	317,400		$	243,000		$	186,500		$	118,900		$	110,000

Nocopi Technologies, Inc.

Statements of Operations

(Unaudited)

	Three Months			Nine Months			Three Months			Six Months			Three Months
	ended			ended			ended			ended			ended
	September 30,			September 30,			June 30,			June 30,			March 31,
	2014			2014			2014			2014			2014
Revenues
Licenses, royalties and fees	$	83,000		$	240,500		$	77,500		$	157,500		$	80,000
Product and other sales		125,800			389,300			158,600			263,500			104,900
		208,800			629,800			236,100			421,000			184,900
Cost of revenues
Licenses, royalties and fees		17,700			54,200			19,300			36,500			17,200
Product and other sales		56,000			176,500			65,200			120,500			55,300
		73,700			230,700			84,500			157,000			72,500
Gross profit		135,100			399,100			151,600			264,000			112,400
Operating expenses
Research and development		29,200			90,200			30,400			61,000			30,600
Sales and marketing		46,800			141,000			46,600			94,200			47,600
General and administrative		75,900			189,500			59,200			113,600			54,400
		151,900			420,700			136,200			268,800			132,600
Net income (loss) from operations		(16,800	)		(21,600	)		15,400			(4,800	)		(20,200	)
Other income (expenses)
Reversal of accounts payable
Interest income		–			300			–			300			300
Interest expense, bank charges and accretion of interest		(5,600	)		(16,200	)		(5,300	)		(10,600	)		(5,300	)
		(5,600	)		(15,900	)		(5,300	)		(10,300	)		(5,000	)
Net loss	$	(22,400	)	$	(37,500	)	$	10,100		$	(15,100	)	$	(25,200	)
Basic and diluted loss per common share	$	(.00	)	$	(.00	)	$	.00		$	(.00	)	$	(.00	)
Weighted average common shares outstanding
Basic		58,599,016			58,599,016			58,599,016			58,599,016			58,599,016
Diluted		58,599,016			58,599,016			58,600,830			58,599,016			58,599,016

Nocopi Technologies, Inc.

Statements of Operations

(Unaudited)

	Three Months			Nine Months			Three Months			Six Months			Three Months			Three Months			Nine Months			Three Months			Six Months
	ended			ended			ended			ended			ended			ended			ended			ended			ended
	September 30,			September 30,			June 30,			June 30,			March 31,			September 30,			September 30,			June 30,			June 30,
	2013			2013			2013			2013			2013			2012			2012			2012			2012
Revenues
Licenses, royalties and fees	$	82,800		$	209,800		$	69,900		$	127,000		$	57,100		$	107,700		$	324,600		$	112,800		$	216,900
Product and other sales		106,900			307,200			116,400			200,300			83,900			23,800			172,400			85,200			148,600
		189,700			517,000			186,300			327,300			141,000			131,500			497,000			198,000			365,500
Cost of revenues
Licenses, royalties and fees		15,100			46,600			17,400			31,500			14,100			10,400			40,200			14,400			29,800
Product and other sales		50,400			148,500			56,200			98,100			41,900			27,000			117,600			43,200			90,600
		65,500			195,100			73,600			129,600			56,000			37,400			157,800			57,600			120,400
Gross profit		124,200			321,900			112,700			197,700			85,000			94,100			339,200			140,400			245,100
Operating expenses
Research and development		27,800			82,900			26,600			55,100			28,500			26,200			82,000			27,700			55,800
Sales and marketing		43,400			123,800			41,100			80,400			39,300			38,100			129,800			45,500			91,700
General and administrative		46,300			144,500			48,400			98,200			49,800			67,100			240,000			71,300			172,900
		117,500			351,200			116,100			233,700			117,600			131,400			451,800			144,500			320,400
Net income (loss) from operations		6,700			(29,300	)		(3,400	)		(36,000	)		(32,600	)		(37,300	)		(112,600	)		(4,100	)		(75,300	)
Other income (expenses)
Reversal of accounts payable		–			–			–			–			–			–			7,800			2,200			7,800
Interest expense, bank charges, financing cost and accretion of interest		(4,800	)		(10,700	)		(3,000	)		(5,900	)		(2,900	)		(3,300	)		(6,800	)		(1,800	)		(3,500	)
		(4,800	)		(10,700	)		(3,000	)		(5,900	)		(2,900	)		(3,300	)		1,000			400			4,300
Net income (loss)	$	1,900		$	(40,000	)	$	(6,400	)	$	(41,900	)	$	(35,500	)	$	(40,600	)	$	(111,600	)	$	(3,700	)	$	(71,000	)
Net income (loss) per common share
Basic	$	.00		$	(.00	)	$	(.00	)	$	(.00	)	$	(.00	)	$	(.00	)	$	(.00	)	$	(.00	)	$	(.00	)
Diluted	$	.00		$	(.00	)	$	(.00	)	$	(.00	)	$	(.00	)	$	(.00	)	$	(.00	)	$	(.00	)	$	(.00	)
Weighted average common shares outstanding
Basic		58,599,016			58,599,016			58,599,016			58,599,016			58,599,016			58,599,016			58,554,194			58,599,016			58,532,194
Diluted		58,745,139			58,599,016			58,599,016			58,599,016			58,599,016			58,599,016			58,554,194			58,599,016			58,532,194

Nocopi Technologies, Inc.

Statements of Cash Flows

(Unaudited)

	Nine Months			Six Months			Three Months
	ended			ended			ended
	September 30,			June 30,			March 31,
	2014			2014			2014
Operating Activities
Net loss	$	(37,500	)	$	(15,100	)	$	(25,200	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities
Depreciation and amortization		2,900			1,700			400
Accretion of interest - convertible debentures		3,400			2,100			1,000
		(31,200	)		(11,300	)		(23,800	)
(Increase) decrease in assets
Accounts receivable		51,800			(28,400	)		38,900
Inventory		(19,000	)		(1,400	)		(8,300	)
Prepaid and other		21,400			19,500			10,300
Increase (decrease) in liabilities
Accounts payable and accrued expenses		26,300			3,500			1,200
Deferred revenue		9,300			7,000			(8,100	)
		89,800			200			34,000
Net cash provided by (used in) operating activities		58,600			(11,100	)		10,200
Investment Activities
Additions to fixed assets		(20,000	)		(20,000	)		(20,000	)
Net cash used in investment activities		(20,000	)		(20,000	)		(20,000	)
Financing Activities
Repayment of borrowings under promissory note		(18,800	)		(12,500	)		(6,300	)
Repayment of demand loans		(5,000	)		–			–
Proceeds from convertible debenture		5,000			–			–
Net cash used in financing activities		(18,800	)		(12,500	)		(6,300	)
		19,800			(43,600	)		(16,100	)
Cash at beginning of year		52,900			52,900			52,900
Cash at end of period		72,700			9,300			36,800
Supplemental Disclosure of Cash Flow Information
Cash paid for interest	$	300		$	300		$	200
Supplemental Disclosure of Non Cash Investing Activities
Write-off of fully depreciated leasehold improvements and furniture, fixtures and equipment
Accumulated depreciation and amortization	$	(82,900	)	$	(82,900	)	$	(82,900	)
Leasehold improvements	$	72,500		$	72,500		$	72,500
Furniture, fixtures and equipment	$	10,400		$	10,400		$	10,400
Supplemental Disclosure of Non Cash Financing Activities
Conversion of demand loans and interest to convertible debentures
Demand loans	$	24,500			–			–
Accrued expenses	$	3,800			–			–
Convertible debentures	$	26,400			–			–
Paid-in capital	$	1,900			–			–

Nocopi Technologies, Inc.

Statements of Cash Flows

(Unaudited)

	Nine Months			Six Months			Three Months			Nine Months			Six Months
	ended			ended			ended			ended			ended
	September 30,			June 30,			March 31,			September 30,			June 30,
	2013			2013			2013			2012			2012
Operating Activities
Net loss	$	(40,000	)	$	(41,900	)	$	(35,500	)	$	(111,600	)	$	(71,000	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities
Depreciation and amortization		600			600			300			2,700			1,800
Reversal of accounts payable		–			–			–			(7,800	)		(7,800	)
Financing cost – warrant grants		100			100			100			1,000			–
Accretion of interest – convertible debentures		1,100			–			–			–			–
		(38,200	)		(41,200	)		(35,100	)		(115,700	)		(77,000	)
(Increase) decrease in assets
Accounts receivable		(90,900	)		(85,100	)		(89,200	)		(46,100	)		(35,300	)
Inventory		(3,000	)		(26,200	)		15,700			(1,000	)		5,700
Prepaid and other		12,400			10,000			6,700			10,800			5,800
Increase in liabilities
Accounts payable and accrued expenses		39,900			66,300			42,700			101,100			24,500
Deferred revenue		87,600			88,500			43,000			10,200			64,300
		46,000			53,500			18,900			75,000			65,000
Net cash provided by (used in) operating activities		7,800			12,300			(16,200	)		(40,700	)		(12,000	)
Financing Activities
Repayment of borrowings under promissory note		(18,800	)		(12,500	)		(6,300	)		(18,800	)		(12,500	)
Proceeds from demand loan		3,000			3,000			3,000			34,800			2,500
Repayment of demand loan		–			–			–			(2,500	)		(2,500	)
Proceeds from convertible debentures		105,000			–			–			–			–
Issuance of common stock		–			–			–			10,000			10,000
Net cash provided by (used in) financing activities		89,200			(9,500	)		(3,300	)		23,500			(2,500	)
Increase (decrease) in cash		97,000			2,800			(19,500	)		(17,200	)		(14,500	)
Cash at beginning of year		20,600			20,600			20,600			22,900			22,900
Cash at end of period	$	117,600		$	23,400		$	1,100		$	5,700		$	8,400
Supplemental Disclosure of Cash Flow Information
Cash paid for interest	$	1,000		$	700		$	400		$	1,700		$	1,200
Supplemental disclosure of Non Cash Financing Activities
Conversion of demand loan and interest to common stock
Demand loans		–			–			–		$	1,500		$	1,500
Accrued expenses		–			–			–		$	1,200		$	1,200
Common stock		–			–			–		$	400		$	400
Paid-in capital		–			–			–		$	2,300		$	2,300

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Stock Options and Warrants (Summary of Warrants Outstanding by Price Range) (Details) - Warrant [Member] - $ / shares	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Share Based Compensation Shares Authorized Under Equity Instruments Other Than Options Exercise Price Range [Line Items]
Warrants outstanding exercise price range, lower limit	$ 0.01	$ 0.01	$ 0.01	$ 0.045
Warrants outstanding exercise price range, upper limit	0.07	0.07	0.07	$ 0.07
Warrants granted exercise price range, lower limit		0.02	0.01
Warrants granted exercise price range, upper limit	0.02	$ 0.021	$ 0.07
Warrants cancelled exercise price range, lower limit	0.03
Warrants cancelled exercise price range, upper limit	0.07
Warrants exercisable exercise price range, lower limit	0.01
Warrants exercisable exercise price range, upper limit	$ 0.07
Weighted average remaining contractual life	5 years 2 months 16 days
Number exercisable	111,000
Weighted average exercise price, exercisable	$ 0.055
Warrants exercisable, weighted average remaining contractual life	1 year 3 months 29 days

XML

Statement of Stockholders' Deficit - USD ($)	Common stock [Member]	Paid-in Capital [Member]	Accumulated Deficit [Member]	Total
Balance at Dec. 31, 2011	$ 583,500	$ 12,386,700	$ (13,304,600)	$ (334,400)
Balance (in shares) at Dec. 31, 2011	58,346,466
Sales of common stock, value	$ 2,100	7,900		10,000
Sales of common stock, shares	208,334
Conversion of demand notes and interest, value	$ 400	2,300		2,700
Conversion of demand notes and interest, shares	44,216
Fair value of warrants issued to demand loan holders		1,200		1,200
Net income (loss)			(146,100)	(146,100)
Balance at Dec. 31, 2012	$ 586,000	12,398,100	(13,450,700)	$ (466,600)
Balance (in shares) at Dec. 31, 2012	58,599,016			58,599,016
Fair value of warrants issued to demand loan holders		100		$ 100
Fair value of warrants issued to convertible debenture holders		8,400		8,400
Net income (loss)			10,300	10,300
Balance at Dec. 31, 2013	$ 586,000	12,406,600	(13,440,400)	$ (447,800)
Balance (in shares) at Dec. 31, 2013	58,599,016			58,599,016
Fair value of warrants issued to convertible debenture holders		1,900		$ 1,900
Net income (loss)			7,700	7,700
Balance at Dec. 31, 2014	$ 586,000	$ 12,408,500	$ (13,432,700)	$ (438,200)
Balance (in shares) at Dec. 31, 2014	58,599,016			58,599,016

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Concentration of Credit Risk

12 Months Ended

Dec. 31, 2014

Risks and Uncertainties [Abstract]

Concentration of Credit Risk

4. Concentration of Credit Risk

Certain financial instruments potentially subject the Company to concentrations of credit risk. These financial instruments consist primarily of cash and accounts receivables. At December 31, 2014, the Company did not have deposits with a financial institution that exceed the FDIC deposit insurance coverage of $250,000. There is a concentration of credit risk with respect to accounts receivable due to the number of major customers.

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Significant Accounting Policies (Schedule of Basic and Diluted Weighted Average Common Shares Outstanding) (Details) - shares	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Accounting Policies [Abstract]
Basic shares outstanding	58,599,016	58,599,016	58,565,605
Incremental shares from assumed conversion of stock options and warrants	1,674	88,678
Diluted shares outstanding	58,600,690	58,687,694	58,565,605

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Stock Options, Warrants and 401(k) Savings Plan (Narrative) (Details) - USD ($)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized under plan	2,000,000
Method used to value the grant date fair value of awards	Black-Scholes option pricing model
Compensation expense from options not yet recognized
Shares remaining available for grant	0
Employer contributions for 401(k) savings plan charged to expense during period
Stock option compensation expense recognized
Number of common shares reserved for possible future warrant issuance and debt conversion	3,955,005
Value of outstanding convertible debentures and accrued interest that could be converted	$ 138,300
Number of common shares reserved for possible future debt conversion	3,152,640
Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Warrants expiration date	2021-07

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Subsequent Events

12 Months Ended

Dec. 31, 2014

Subsequent Events [Abstract]

Subsequent Event

14. Subsequent Events

Through July 2015, the Company repaid $26,000 of the principal of the outstanding demand loans.

In July 2015, the Company repaid, with interest, a $10,000 convertible debenture that had matured.

In July 2015, the Company’s Board of Directors extended the Common Stock private placement to December 31, 2016.

During the third quarter of 2015, the Company’s Board of Directors approved and the holders of $95,000 of convertible debentures maturing during the third quarter of 2015 accepted an offer of extension whereby the maturity dates of the convertible debentures are extended for two years and the conversion rate of the debentures and accrued interest into Common Stock of the Company is reduced from $0.05 to $0.025.