0001553350-22-000404.txt : 20220506 0001553350-22-000404.hdr.sgml : 20220506 20220506172839 ACCESSION NUMBER: 0001553350-22-000404 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 44 CONFORMED PERIOD OF REPORT: 20220331 FILED AS OF DATE: 20220506 DATE AS OF CHANGE: 20220506 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NOCOPI TECHNOLOGIES INC/MD/ CENTRAL INDEX KEY: 0000888981 STANDARD INDUSTRIAL CLASSIFICATION: GAMES, TOYS & CHILDREN'S VEHICLES (NO DOLLS & BICYCLES) [3944] IRS NUMBER: 870406496 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-20333 FILM NUMBER: 22902524 BUSINESS ADDRESS: STREET 1: 480 SHOEMAKER ROAD STREET 2: SUITE 104 CITY: KING OF PRUSSIA STATE: PA ZIP: 19406 BUSINESS PHONE: 6108349600 MAIL ADDRESS: STREET 1: 480 SHOEMAKER ROAD STREET 2: SUITE 104 CITY: KING OF PRUSSIA STATE: PA ZIP: 19406 10-Q 1 nnup_10q.htm QUARTERLY REPORT
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United States

Securities and Exchange Commission

Washington, D.C. 20549

 

Form 10-Q

(Mark One)

 

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

 

For the quarterly period ended March 31, 2022

 

or

 

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

 

For the transition period from _________________ to ______________

 

Commission File Number: 000-20333

 

NOCOPI TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter)

 

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

 

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

(Address of principal executive offices) (Zip Code)

 

(610) 834-9600

(Registrant’s telephone number, including area code)

 

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

 

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

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes   No 

 

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

 

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

 

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

 

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

 

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

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 67,495,055 shares of common stock, par value $0.01, as of May 3,2022.

 
 

 

 
 

NOCOPI TECHNOLOGIES, INC.

 

INDEX

 

  PAGE
Part I. FINANCIAL INFORMATION  
   
Item 1. Financial Statements 1
   
Statements of Comprehensive Income for Three Months Ended March 31, 2022 and March 31, 2021 1
Balance Sheets at March 31, 2022 and December 31, 2021 2
Statements of Cash Flows for  Three Months Ended March 31, 2022 and March 31, 2021 3
Statements of Stockholders’ Equity for the Three Months ended March 31, 2022 and March 31, 2021 4
Notes to Financial Statements 5
   
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 9
   
Item 3. Quantitative and Qualitative Disclosures About Market Risk 15
   
Item 4. Controls and Procedures 15
   
Part II. OTHER INFORMATION  
   
Item 1. Legal Proceedings 16
   
Item 1A. Risk Factors 16
   
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. 16
   
Item 3. Defaults Upon Senior Securities 16
   
Item 4. Mine Safety Disclosures 16
   
Item 5. Other Information 16
   
Item 6. Exhibits 17
   
SIGNATURES 18
   
EXHIBIT INDEX 19

 

 

 

 
 

PART I – FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

Nocopi Technologies, Inc.

Statements of Comprehensive Income*

(unaudited)

         
  

Three Months ended

March 31

 
   2022   2021 
Revenues        
Licenses, royalties and fees  $137,300   $185,500 
Product and other sales   202,100    425,900 
Total revenues   339,400    611,400 
           
Cost of revenues          
Licenses, royalties and fees   39,500    47,100 
Product and other sales   126,700    173,200 
Total cost of revenues   166,200    220,300 
Gross profit   173,200    391,100 
           
Operating expenses          
Research and development   39,500    44,500 
Sales and marketing   64,800    83,200 
General and administrative   277,700    145,500 
Total operating expenses   382,000    273,200 
Net income (loss) from operations   (208,800)   117,900 
           
Other income (expenses)          
Interest income   5,800    4,800 
Interest expense and bank charges   (400)   (600)
Total other income (expenses)   5,400    4,200 
Net income (loss) before income taxes   (203,400)   122,100 
Income taxes       7,300 
Net income (loss)  $(203,400)  $114,800 
           
Basic net income (loss) per common share  $(.00)  $.00 
Diluted net income (loss) per common share  $(.00)  $.00 
           
Weighted average common shares outstanding          
Basic   67,495,055    67,353,690 
Diluted   67,495,055    67,477,603 

 

*See accompanying notes to these financial statements.

 

1 
 

Nocopi Technologies, Inc.

Balance Sheets*

(unaudited) 

 

         
   March 31   December 31 
   2022   2021 
         
Assets          
Current assets          
Cash  $2,016,900   $1,846,700 
Accounts receivable less $12,000 allowance for doubtful accounts   799,100    970,800 
Inventory   511,100    422,700 
Prepaid and other   80,900    160,000 
Total current assets   3,408,000    3,400,200 
           
Fixed assets          
Leasehold improvements   58,400    58,400 
Furniture, fixtures and equipment   164,100    164,100 
Fixed assets gross   222,500    222,500 
Less: accumulated depreciation and amortization   142,700    134,200 
Total fixed assets   79,800    88,300 
Other assets          
Long-term receivables   92,300    185,000 
Operating lease right of use – building   104,200    115,800 
Other assets   196,500    300,800 
Total assets  $3,684,300   $3,789,300 
           
Liabilities and Stockholders' Equity          
Current liabilities          
Accounts payable  $99,300   $3,700 
Accrued expenses   172,400    151,500 
Operating lease liability – current   48,300    47,500 
Total current liabilities   320,000    202,700 
           
Other liabilities          
Accrued expenses, non-current   6,500    13,000 
Operating lease liability – non-current   55,900    68,300 
Total other liabilities   62,400    81,300 
           
Stockholders' equity          
Common stock, $0.01 par value
Authorized – 75,000,000 shares
Issued and outstanding – 67,495,055 shares
   675,000    675,000 
Paid-in capital   12,577,100    12,577,100 
Accumulated deficit   (9,950,200)   (9,746,800)
Total stockholders' equity   3,301,900    3,505,300 
Total liabilities and stockholders' equity  $3,684,300   $3,789,300 

 

*See accompanying notes to these financial statements.

 

 

 

2 
 

Nocopi Technologies, Inc.

Statements of Cash Flows*

(unaudited)

 

         
  

Three Months ended

March 31

 
   2022   2021 
Operating Activities          
Net income (loss)  $(203,400)  $114,800 
Adjustments to reconcile net income (loss) to net cash provided by operating activities          
Depreciation and amortization   8,500    6,100 
Other assets   104,300    105,100 
Other liabilities   (18,100)   (17,500)
Adjustments To Reconcile Net Income Loss To Cash   (108,700)   208,500 
           
(Increase) decrease in assets          
Accounts receivable   171,700    113,200 
Inventory   (88,400)   (59,900)
Prepaid and other   79,100    34,200 
Increase in liabilities          
Accounts payable and accrued expenses   116,500    62,100 
Income taxes       7,300 
Total (increase) decrease in assets and liabilities   278,900    156,900 
Net cash provided by operating activities   170,200    365,400 
           
           
Increase in cash   170,200    365,400 
Cash at beginning of year   1,846,700    1,362,800 
Cash at end of period  $2,016,900   $1,728,200 

 

*See accompanying notes to these financial statements.

 

 

 

 

 

3 
 

Nocopi Technologies, Inc.

Statements of Stockholders’ Equity*

For the Periods December 31, 2021 through March 31, 2022

and December 31, 2020 through March 31, 2021

(unaudited)

 

                     
   Common stock   Paid-in   Accumulated     
   Shares   Amount   Capital   Deficit   Total 
Balance at December 31, 2021   67,495,055   $675,000   $12,577,100   $(9,746,800)  $3,505,300 
                          
Net loss   -    -     -     (203,400)   (203,400)
Balance at March 31, 2022   67,495,055   $675,000   $12,577,100   $(9,950,200)  $3,301,900 

 

 

  

   Common stock   Paid-in   Accumulated     
   Shares   Amount   Capital   Deficit   Total 
Balance at December 31, 2020   67,353,690   $673,500   $12,575,800   $(9,796,200)  $3,453,100 
                          
Net income   -    -     -     114,800    114,800 
Balance at March 31, 2021   67,353,690   $673,500   $12,575,800   $(9,681,400)  $3,567,900 

 

 

 

* See accompanying notes to these financial statements.

 

 

4 
 

 

 

NOCOPI TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS

(UNAUDITED)

 

Note 1. Financial Statements

 

The accompanying unaudited condensed financial statements have been prepared by Nocopi Technologies, Inc. (our “Company”). These statements include all adjustments (consisting only of normal recurring adjustments) which management believes necessary for a fair presentation of the statements and have been prepared on a consistent basis using the accounting policies described in Note 2 Significant Accounting Policies included in the Notes to Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the Securities and Exchange Commission on March 30, 2022, as amended on April 29, 2022 (the “2021 Annual Report”). Certain financial information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although our Company believes that the accompanying disclosures are adequate to make the information presented not misleading. The Notes to Financial Statements included in the 2021 Annual Report should be read in conjunction with the accompanying interim financial statements. The interim operating results for the three months ended March 31, 2022 may not be necessarily indicative of the operating results expected for the full year.

 

A novel strain of coronavirus, COVID-19, that was first identified in Wuhan, China in December 2019 has surfaced in many countries around the world including the United States. Many countries continue to experience reoccurrences of COVID-19 to the current date. The World Health Organization has declared COVID-19 to constitute a global pandemic. Certain state and local governments reacted by placing significant restrictions on businesses including a closure in Pennsylvania of non-essential businesses that was announced on March 20, 2020. While most Pennsylvania businesses have been allowed to reopen, often at limited capacity and with certain restrictions, as of the current date, there can be no assurances that future closures will be avoided. A requirement to close our Company for a considerable period of time could result in a negative impact on our Company’s financial condition and results of operations. Additionally, as our Company imports certain raw materials from China, if an extended disruption of the supply of these raw materials were to occur, such as the vessel delays resulting from the congestion experienced in certain Chinese ports due to a COVID-19 outbreak in the second quarter of 2021 and continuing to the present time, our ability to produce products for sale to our customers could be negatively impacted. Additionally, certain of the Company’s licensees in the entertainment and toy products market who utilize printers in China to produce their products have been affected by the COVID-19 related cargo surge beginning in the third quarter of 2021 and continuing to the present time at major Chinese and United States ports as well as the world-wide container shortage resulting in significantly higher shipping costs, and have responded by deferring or scaling back production of their orders and, in some cases, rescheduling the shipping of completed orders. Such deferrals may affect the number and value of orders placed by the Company’s licensed printers in the entertainment and toy products market. Further, restrictions on our customers and licensees in areas affected by the COVID-19 could adversely affect our results of operations and financial condition. Our Company’s operating results for the first quarter of 2022 are reflective of the effects of the ongoing cargo surge as well as lockdowns in certain Chinese cities, including Shanghai, during the first quarter of 2022 that affected businesses and production in those areas. As the COVID-19 pandemic continues to spread with the Omicron variant, the BA.2 variant and other newly identified variants and sub-variants, any future financial impact cannot be reasonably estimated at this time. We cannot predict the scope or magnitude of the negative effect that may result from the impact of the COVID-19 pandemic on the Company’s financial condition and results of operations. Our Company’s results of operations were negatively affected in earlier periods in part as a result of a significant increase in the cost of raw materials utilized by our Company in the manufacture of certain of its products as a result of price increases related to the impact of the ongoing COVID-19 pandemic on the availability and supply of these raw materials. While prices of these raw materials have declined at the present time, there can be no assurances that raw material prices will remain at current levels or decrease to pre-COVID-19 pandemic levels in future periods. As the COVID-19 pandemic continues to spread both in its original form and in the recently identified variants of COVID-19 along with the potential re-imposition of certain COVID-19 restrictions currently being considered by federal, state and local governments, any future financial impact cannot be reasonably estimated at this time.

 

Our Company follows Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 220 in reporting comprehensive income (loss).  Comprehensive income is a more inclusive financial reporting methodology that includes disclosure of certain financial information that historically has not been recognized in the calculation of net income.  Since our Company has no items of other comprehensive income (loss), comprehensive income (loss) is equal to net income (loss).

 

Note 2. Stock Based Compensation

 

Our Company follows FASB ASC 718, Compensation – Stock Compensation, and uses the Black-Scholes option pricing model to calculate the grant-date fair value of an award. At March 31, 2022, our Company did not have an active stock option plan. There was no unrecognized portion of expense related to stock option grants at March 31, 2022.

 

Note 3. Line of Credit

 

In November 2018, our Company negotiated a $150,000 revolving line of credit with a bank to provide a source of working capital, if required. The line of credit is secured by all the assets of our Company and bears interest at the bank’s prime rate for a period of one year and its prime rate plus 1.5% thereafter. The line of credit is subject to an annual review and quiet period. There have been no borrowings under the line of credit since its inception.

 

5 
 

 

NOCOPI TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS

(UNAUDITED)

 

Note 4. Stock Warrants

 

At March 31, 2021, our Company had warrants outstanding to purchase 141,365 of our Company’s common stock at $0.02 per share. The warrants were granted in 2014 to two individuals who acquired convertible debentures from the Company in 2014. The warrants were exercisable two years after issuance and expire seven years after issuance. The fair value of the warrants was determined using the Black-Scholes pricing model. The relative fair value of the warrants was recorded as a discount to the notes payable with an offsetting credit to additional paid-in capital since our Company determined that the warrants were an equity instrument in accordance with FASB ASC 815. The debt discount related to the warrant issuances was accreted through interest expense over the term of the notes payable. During the second quarter of 2021, holders of these 141,365 warrants that had been outstanding exercised their options to purchase a total of 141,365 shares of our Company’s common stock at $0.02 per share.

 

Note 5. Income Taxes

 

There is no income tax benefit for the losses for the three months ended March 31, 2022 because our Company has determined that the realization of the net deferred tax asset is not assured. Our Company has created a valuation allowance for the entire amount of such benefits. There is no provision for federal income taxes for the three months ended March 31, 2021 due to the availability of net operating loss carryforwards.

 

The components for state income tax expense resulting from the limitation on the use of net operating losses are:

 

                    
  

 

  

Three Months ended

March 31,

 
           2022   2021 
Current state taxes            $   $7,300 
Deferred state taxes                  
Income tax expense (benefit)            $   $7,300 

 

There was no change in unrecognized tax benefits during the period ended March 31, 2022 and there was no accrual for uncertain tax positions as of March 31, 2022.

 

Tax years from 2018 through 2021 remain subject to examination by U.S. federal and state jurisdictions.

 

6 
 

 

NOCOPI TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS

(UNAUDITED)

 

Note 6. Earnings per Share

 

In accordance with FASB ASC 260, Earnings per Share, basic earnings per common share is computed using net earnings divided by the weighted average number of common shares outstanding for the periods presented. The computation of diluted earnings per common share involves the assumption that outstanding common shares are increased by shares issuable upon exercise of those warrants for which the market price exceeds the exercise price. The number of shares issuable upon the exercise of such warrants is decreased by shares that could have been purchased by our Company with related proceeds. For the three months ended March 31, 2021, the number of incremental common shares resulting from the assumed conversion of warrants was 123,913. Since our Company did not have any outstanding warrants or other common stock equivalents as of March 31, 2022, basic and diluted loss per share were the same.

 

Note 7. Major Customer and Geographic Information

 

Our Company’s revenues, expressed as a percentage of total revenues, from non-affiliated customers that equaled 10% or more of the Company’s total revenues were:

 

                    
  

 

  

Nine Months ended

September 30

 
           2021   2020 
Customer A             43%   67%
Customer B             26%   19%
Customer C             15%   %

  

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

 

               
    March 31     December 31  
    2022     2021  
Customer A     16 %     30 %
Customer B     73 %     65 %

 

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

 

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

 

                    
  

 

  

Three Months ended

March 31

 
           2021   2020 
North America            $123,900   $169,700 
South America             1,600    1,500 
Asia             197,900    413,500 
Australia             16,000    26,700 
             $339,400   $611,400 

 

7 
 

 

NOCOPI TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS

(UNAUDITED)

 

Note 8. Leases

 

Our Company conducts its operations in leased facilities under a non-cancelable operating lease expiring in 2024.

 

Due to the adoption of the new lease standard under the optional transition method which allows the entity to apply the new lease standard at the adoption date, our Company has capitalized the present value of the minimum lease payments commencing January 1, 2019, using an estimated incremental borrowing rate of 6.5%. The minimum lease payments do not include common area annual expenses which are considered to be non-lease components.

 

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

 

There are no other material operating leases. Our Company has elected not to recognize right-of-use assets and lease liabilities arising from short-term leases.

 

Total lease expense under operating leases for each of the three month periods ended March 31, 2022 and March 31, 2021 was $13,300.

 

Maturities of lease liabilities were as follows:

 

Maturities of Lease Liabilities        
    Operating Leases  
Year ending December 31        
2022   $ 41,200  
2023     56,200  
2024     18,900  
Total lease payments     116,300  
Less imputed interest     (12,100 )
Total   $ 104,200  

 

 

 

 

 

 

 

8 
 

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

 

Forward-Looking Information

 

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

 

  · The ongoing impact of the COVID-19 coronavirus pandemic on our business operations, revenues, employees, suppliers and customers
  · Expected operating results, such as revenue growth and earnings
  · Anticipated levels of capital expenditures for fiscal year 2022 and beyond
  · Current or future volatility in market conditions
  · Our belief that we have sufficient liquidity to fund our business operations during the next twelve months
  · Strategy for customer retention, growth, product development, market position, financial results and reserves
  · Strategy for risk management

 

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

 

  · The extent to which the COVID-19 pandemic may impact our future financial and operational performance will be dependent on many factors that we may not be able to predict because they continue to change and evolve depending on both national and local circumstances. These factors include, among others, the following: government restrictions affecting our employees, customers and suppliers, changes in our revenues due to lower customer demand as a result of the pandemic, and a potential inability to obtain raw materials due to lower availability. We continue to monitor the impact of COVID-19 on our business but we cannot accurately predict the extent to which it will adversely affect our future results of operations, financial condition or cash flows.
  · The extent to which we are successful in gaining new long-term relationships with customers or retaining significant existing customers and the level of service failures that could lead customers to use competitors' services.
  · Our ability to improve our current credit rating with our vendors and the impact on our raw materials and other costs and competitive position of doing so.
  · The impact of losing our intellectual property protections or the loss in value of our intellectual property.
  · Changes in customer demand.
  · The adequacy of our cash flow and earnings and other conditions which may affect our ability to timely service our debt obligations.
  · The occurrence of hostilities, political instability or catastrophic events.
  · Such other factors as discussed throughout Part I, Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations in this Quarterly Report on Form 10-Q, and throughout Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations and in Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2021.

 

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

 

9 
 

The following discussion and analysis should be read in conjunction with our condensed financial statements, included herewith. This discussion should not be construed to imply that the results discussed herein will necessarily continue into the future, or that any conclusion reached herein will necessarily be indicative of actual operating results in the future. Such discussion represents only the best present assessment of our management. This information should also be read in conjunction with our audited historical financial statements which are included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, filed with the Securities and Exchange Commission on March 30, 2022, as amended on April 29, 2022.

 

Background Overview

 

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

 

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

 

Effects of COVID-19

 

To serve our customers while also providing for the safety of our employees and service providers, we have adapted various steps to protect our employees. Any employee who is uncomfortable coming into our facilities may choose not to come in. We have a large enough facility to enable all of our employees to social distance and we follow Centers for Disease Control and Prevention (CDC) guidelines. Our production employees work with chemicals and they have always used masks, respirators, etc., even before COVID-19. As a result, we continue to maintain the same level of productivity and effectiveness as prior to the COVID-19 pandemic.

 

The impact of COVID-19 on our Company had little effect on the financial results through the first six months of 2021; however, beginning in the third quarter of 2021, certain of the Company’s licensees in the entertainment and toy products market who utilize printers in China to produce their products have been adversely affected by the cargo surge related to congestion experienced in certain Chinese ports due to a COVID-19 outbreak that began in the second quarter of 2021. The cargo surge continues to the present time, now adversely affecting major United States ports. The world-wide cargo surge along with a container shortage resulted in significantly higher shipping costs since the third quarter of 2021. Certain of our Company’s licensees in the entertainment and toy products market have responded by deferring or scaling back production and size of future orders and, in some cases, rescheduling the shipping of completed orders. Ink orders from our Company’s licensed printers in China have fallen significantly beginning in the third quarter of 2021 compared to earlier periods. These supply chain disruptions are being experienced by many businesses including our Company’s licensees. A continuance of these supply chain disruptions may negatively impact the number and value of orders placed by our Company’s licensed printers in the entertainment and toy products market with a resultant negative impact on our Company’s results of operations and cash flow in future periods.

 

We did not suffer a drop off in total earned royalties in the entertainment and toy products market as a result of COVID-19 through the third quarter of 2021 as retail demand continued to be strong for the products marketed by our licensees in the entertainment and toy products market. Beginning in the fourth quarter of 2021 and continuing through the first quarter of 2022, reflecting the significantly higher shipping costs caused by the COVID-19 related cargo surge at major China and United States ports and the world-wide container shortage, ink orders from the printers of our licensees in the entertainment and toy products market were significantly below historical levels. We continue to experience a negative impact on revenues in our smaller anti-counterfeiting and anti-diversion products market due to reduced production activity at certain printing facilities that utilize these technologies and anticipate that these conditions may continue for a period of time. However, unlike earlier periods, licensing revenues in the entertainment and toy products market declined in both the fourth quarter of 2021 and the first quarter of 2022. While the products of our licensees in the larger entertainment and toy products market are sold by both large and smaller retailers, most of whom are now open, and are also available for purchase online, we believe that revenues may not continue to be achieved at levels experienced in earlier periods due to the negative economic conditions that are expected to continue over the balance of the year and beyond as a result of COVID-19, increasing inflation and other factors affecting consumer spending. A slowdown and/or a reallocation in overall consumer spending may affect the sales of products marketed by our licensees. Our major licensees in the entertainment and toy products market are large, well-known businesses in this market with whom we believe our long-term relationship will not be adversely affected by the COVID-19 pandemic, supply chain disruptions and the current inflationary conditions.

 

10 
 

Results of Operations

 

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

 

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

 

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

 

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

 

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

 

Revenues for the first quarter of 2022 were $339,400 compared to $611,400 in the first quarter of 2021, a decrease of $272,000, or approximately 44%. Licenses, royalties and fees decreased by $48,200, or approximately 26%, in the first quarter of 2022 to $137,300 from $185,500 in the first quarter of 2021. The decrease in licenses, royalties and fees in the first quarter of 2022 compared to the first quarter of 2021 is due primarily to lower royalties from our Company’s licensees in the entertainment and toy products market and the security markets, both of which continue to be negatively affected by the COVID-19 pandemic. We cannot assure you that the marketing and product development activities of our Company’s licensees or other businesses in the entertainment and toy products market will produce a significant increase in revenues for our Company, nor can the timing of any potential revenue increases be predicted, particularly given the uncertain economic conditions being experienced worldwide as a result of the COVID-19 pandemic that is continuing to negatively impact all worldwide economies.

 

Product and other sales decreased by $223,800, or approximately 53%, to $202,100 in the first quarter of 2022 from $425,900 in the first quarter of 2021. Sales of ink decreased in the first quarter of 2022 compared to the first quarter of 2021 due primarily to lower ink shipments to the third party authorized printer used by two of our Company’s major licensees in the entertainment and toy products market primarily due to the negative effects of COVID-19 on this market and lower ink shipments to our Company’s licensees in the retail receipt and document fraud market. In the first quarter of 2022, our Company derived revenues of approximately $306,500 from our Company’s licensees and their authorized printers in the entertainment and toy products market compared to revenues of approximately $561,600 in the first quarter of 2021.

 

Our Company’s gross profit decreased to $173,200, or approximately 51% of gross revenues, in the first quarter of 2022 from $391,100, or approximately 64% of gross revenues, in the first quarter of 2021. Licenses, royalties and fees have historically carried a higher gross profit than product and other sales, which generally consist of either supplies or other manufactured products which incorporate our Company’s technologies or equipment used to support the application of its technologies. These items (except for inks which are manufactured by our Company) are generally purchased from third-party vendors and resold to the end-user or licensee and carry a lower gross profit than licenses, royalties and fees. 

 

11 
 

 

As the variable component of cost of revenues related to licenses, royalties and fees is a low percentage of these revenues and the fixed component is not substantial, period to period changes in revenues from licenses, royalties and fees can significantly affect both the gross profit from these sources as well as our Company’s overall gross profit. The gross profit from licenses, royalties and fees decreased to approximately 71% in the first quarter of 2022 from approximately 75% in the first quarter of 2021.

 

The gross profit of product and other sales, expressed as a percentage of revenues, is dependent on both the overall sales volumes of product and other sales and on the mix of the specific goods produced and/or sold. Primarily due to lower sales of inks and other products in the first quarter of 2022 compared to the first quarter of 2021, there was a lower gross profit from product and other sales of approximately 37% of revenues in the first quarter of 2022 compared to a gross profit of approximately 59% of revenues in the first quarter of 2021.

 

Research and development expenses decreased in the first quarter of 2022 to $39,500 compared to $44,500 in the first quarter of 2021 due primarily to lower employee related expenses in the first quarter of 2022 compared to the first quarter of 2021.

 

Sales and marketing expenses decreased to $64,800 in the first quarter of 2022 from $83,200 in the first quarter of 2021 due primarily to lower commission expense on the lower level of revenues in the first quarter of 2022 compared to the first quarter of 2021.

 

General and administrative expenses increased in the first quarter of 2022 to $277,700 compared to $145,500 in the first quarter of 2021 due primarily to significantly higher professional fees in the first quarter of 2022 compared to the first quarter of 2021.

 

Income taxes in the first quarter of 2021 result from limitations placed on income tax net operating loss deductions by the Commonwealth of Pennsylvania.

 

The net loss of $203,400 in the first quarter of 2022 compared to net income of $114,800 in the first quarter of 2021 resulted primarily from a lower gross profit on a lower level of licenses, royalties and fees and lower product sales and higher operating expenses in the first quarter of 2022 compared to the first quarter of 2021.

 

Plan of Operation, Liquidity and Capital Resources

 

During the first quarter of 2022, our Company’s cash increased to $2,016,900 at March 31, 2022 from $1,846,700 at December 31, 2021. During the first quarter of 2022, our Company generated $170,200 from its operating activities. 

 

During the first quarter of 2022, our Company’s revenues decreased approximately 44% primarily as a result of lower royalty revenues from our Company’s licensees in the entertainment and toy products market and lower sales of ink to the authorized printers of our Company’s licensees in the entertainment and toy products market. Our total overhead expenses increased in the first quarter of 2022 to $382,000 compared to $273,200 in the first quarter of 2021 and our Company’s income tax expense decreased in the first quarter of 2022 compared to the first quarter of 2021. As a result of these factors, our Company sustained a net loss of $203,400 in the first quarter of 2022 compared to net income of $114,800 in the first quarter of 2021. Our Company had positive operating cash flow of $170,200 during the first quarter of 2022. At March 31, 2022, our Company had working capital of $3,088,000 and stockholders’ equity of $3,301,900. For the full year of 2021, our Company had net income of $49,400 and had positive operating cash flow of $512,700. At December 31, 2021, our Company had working capital of $3,197,500 and stockholders’ equity of $3,505,300. 

 

In November 2018, our Company negotiated a $150,000 revolving line of credit (“Line of Credit”) with a bank to provide a source of working capital, if required. The Line of Credit is secured by all the assets of our Company and bears interest at the bank’s prime rate for a period of one year and its prime rate plus 1.5% thereafter. The Line of Credit is subject to an annual review and quiet period. There have been no borrowings under the Line of Credit since its inception. We may need to obtain additional capital in the future to further support the working capital requirements associated with our existing revenue base and to develop new revenue sources. We cannot assure you that we will be successful in obtaining such additional capital, if needed. We continue to maintain a cost containment program including curtailment, where possible, of discretionary research and development and sales and marketing expenses.

 

12 
 

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

 

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

 

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

 

As previously stated, we generate a significant portion of our total revenues from licensees in the entertainment and toy products market. These licensees generally sell their products through retail outlets. In the future, such sales may be adversely affected by changes in consumer spending that may occur as a result of an uncertain economic environment throughout the balance of 2022 and beyond due to the ongoing COVID-19 pandemic and its effect on the global economy, geopolitical instability including the Russia-Ukraine war and the supply chain disruptions related to both as well as the record inflation currently being experienced in the United States. As a result, our revenues, results of operations and liquidity may be further negatively impacted.

 

Contractual Obligations

 

As of March 31, 2022, there were no material changes in our contractual obligations from those disclosed in our Annual Report on Form 10-K filed with the SEC on March 30, 2022, as amended on April 29, 2022, other than those appearing in the notes to the financial statements appearing elsewhere in this Quarterly Report on Form 10-Q.

 

Recently Adopted Accounting Pronouncements

 

As of March 31, 2022, there were no recently adopted accounting standards that had a material effect on our Company’s financial statements.

 

Recently Issued Accounting Pronouncements Not Yet Adopted

 

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

 

13 
 

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

 

Off-Balance Sheet Arrangements

 

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

 

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

Not Applicable

 

Item 4. Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures. Our Company’s management, with the participation of our Company’s Principal Executive Officer and Principal Financial Officer, evaluated the effectiveness of our Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of March 31, 2022. Based on this evaluation, our Company’s Principal Executive Officer and Principal Financial Officer concluded that, as of March 31, 2022, our Company’s disclosure controls and procedures were effective, in that they provide reasonable assurance that information required to be disclosed by our Company in the reports that it files or submits under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and is accumulated and communicated to our Company’s management, including our Company’s Principal Executive Officer and Principal Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

 

Changes in Internal Control Over Financial Reporting. There were no changes in our internal control over financial reporting during the quarter ended March 31, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

 

14 
 

PART II - OTHER INFORMATION

 

Item 1. Legal Proceedings.

 

None

 

Item 1A. Risk Factors.

 

Not applicable

 

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

 

None.

 

Item 3. Defaults Upon Senior Securities.

 

Not applicable

 

Item 4. Mine Safety Disclosures.

 

Not applicable

 

Item 5.  Other Information

 

(b) Changes to Director Nomination Procedures

 

On January 28, 2022, our Board of Directors amended and restated our Company’s bylaws in their entirety. Our bylaws contain procedures by which security holders may recommend nominees to our Board of Directors. These new procedures are contained in Article II, Section 11 of our bylaws. The foregoing discussion does not purport to be complete and is qualified in its entirety by reference to the attached bylaws.

 

Item 6.  Exhibits

 

The following exhibits are included herein:

  

Exhibit Number   Description of Exhibit   Location
3.2  

Second Amended and Restated Bylaws, Dated January 28, 2022

  Incorporated by reference to the Company’s Current Report on Form 8-K filed on 02/02/2022
31.1   Certification of Chief Executive Officer required by Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.   Filed herewith
31.2   Certification of Chief Financial Officer required by Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.   Filed herewith
32.1   Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.   Filed herewith
99.1   Nomination and Standstill Agreement, Dated March 29, 2022   Incorporated by reference to the Company’s Current Report on Form 8-K filed on 03/29/2022
101.INS   Inline XBRL Instance Document–the instance document does not appear in the Interactive Data File as its XBRL tags are embedded within the Inline XBRL document    
101.SCH   Inline XBRL Taxonomy Extension Schema    
101.CAL   Inline XBRL Taxonomy Extension Calculation Linkbase    
101.DEF   Inline XBRL Taxonomy Extension Definition Linkbase    
101.LAB   Inline XBRL Taxonomy Extension Label Linkbase    
101.PRE   Inline XBRL Taxonomy Extension Presentation Linkbase    
104   Cover page formatted as Inline XBRL and contained in Exhibit 101    

 

 

15 
 

SIGNATURES

 

Pursuant to the requirement of the Securities Exchange Act of 1934, our Company has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

    NOCOPI TECHNOLOGIES, INC.
     
DATE: May 6, 2022   /s/ Michael A. Feinstein, M.D.
    Michael A. Feinstein, M.D.
    Chairman of the Board, President & Chief Executive Officer
     
DATE: May 6, 2022   /s/ Rudolph A. Lutterschmidt
    Rudolph A. Lutterschmidt
    Vice President & Chief Financial Officer

 

 

 

 

 

 

 

16 
 

EXHIBIT INDEX

 

Exhibit Number   Description of Exhibit   Location
3.2  

Second Amended and Restated Bylaws, Dated January 28, 2022

  Incorporated by reference to the Company’s Current Report on Form 8-K filed on 02/02/2022
31.1   Certification of Chief Executive Officer required by Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.   Filed herewith
31.2   Certification of Chief Financial Officer required by Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.   Filed herewith
32.1   Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.   Filed herewith
99.1   Nomination and Standstill Agreement, Dated March 29, 2022   Incorporated by reference to the Company’s Current Report on Form 8-K filed on 03/29/2022
101.INS   Inline XBRL Instance Document–the instance document does not appear in the Interactive Data File as its XBRL tags are embedded within the Inline XBRL document    
101.SCH   Inline XBRL Taxonomy Extension Schema    
101.CAL   Inline XBRL Taxonomy Extension Calculation Linkbase    
101.DEF   Inline XBRL Taxonomy Extension Definition Linkbase    
101.LAB   Inline XBRL Taxonomy Extension Label Linkbase    
101.PRE   Inline XBRL Taxonomy Extension Presentation Linkbase    
104   Cover page formatted as Inline XBRL and contained in Exhibit 101    

 

 

 

17

 

 

 

 

 

 

EX-31.1 2 nnup_ex31z1.htm CERTIFICATION OF CHIEF EXECUTIVE OFFICER

 

EXHIBIT 31.1

 

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

 

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

 

1.I have reviewed this quarterly report on Form 10-Q of Nocopi Technologies, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: May 6, 2022

 

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

Michael A. Feinstein, M.D.

Chief Executive Officer

 

EX-31.2 3 nnup_ex31z2.htm CERTIFICATION OF CHIEF FINANCIAL OFFICER

 

EXHIBIT 31.2

 

CERTIFICATION OF CHIEF FINANCIAL OFFICER

 

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

 

1.I have reviewed this quarterly report on Form 10-Q of Nocopi Technologies, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (registrant’s fourth fiscal quarter in the case of annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: May 6, 2022

 

/s/ Rudolph A. Lutterschmidt

Rudolph A. Lutterschmidt

Vice President and Chief Financial Officer

 

EX-32.1 4 nnup_ex32z1.htm CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

Exhibit 32.1

 

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

 

In connection with the Quarterly Report of Nocopi Technologies, Inc. (the "Company") on Form 10-Q for the Quarter ended March 31, 2022 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned, Michael A. Feinstein, M.D., Chief Executive Officer, and Rudolph A. Lutterschmidt, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that;

 

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

 

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

 

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

 

May 6 2022

 

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

Michael A. Feinstein, M.D.

Principal Executive Officer

 

/s/ Rudolph A. Lutterschmidt

Rudolph A. Lutterschmidt

Principal Financial Officer

 

 

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Cover - shares
3 Months Ended
Mar. 31, 2022
May 03, 2022
Cover [Abstract]    
Document Type 10-Q  
Amendment Flag false  
Document Quarterly Report true  
Document Transition Report false  
Document Period End Date Mar. 31, 2022  
Document Fiscal Period Focus Q1  
Document Fiscal Year Focus 2022  
Current Fiscal Year End Date --12-31  
Entity File Number 000-20333  
Entity Registrant Name NOCOPI TECHNOLOGIES, INC.  
Entity Central Index Key 0000888981  
Entity Tax Identification Number 87-0406496  
Entity Incorporation, State or Country Code MD  
Entity Address, Address Line One 480 Shoemaker Road  
Entity Address, Address Line Two Suite 104  
Entity Address, City or Town King of Prussia  
Entity Address, State or Province PA  
Entity Address, Postal Zip Code 19406  
City Area Code 610  
Local Phone Number 834-9600  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Non-accelerated Filer  
Entity Small Business true  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   67,495,055
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Statements of Comprehensive Income - USD ($)
3 Months Ended
Mar. 31, 2022
Mar. 31, 2021
Revenues    
Licenses, royalties and fees $ 137,300 $ 185,500
Product and other sales 202,100 425,900
Total revenues 339,400 611,400
Cost of revenues    
Licenses, royalties and fees 39,500 47,100
Product and other sales 126,700 173,200
Total cost of revenues 166,200 220,300
Gross profit 173,200 391,100
Operating expenses    
Research and development 39,500 44,500
Sales and marketing 64,800 83,200
General and administrative 277,700 145,500
Total operating expenses 382,000 273,200
Net income (loss) from operations (208,800) 117,900
Other income (expenses)    
Interest income 5,800 4,800
Interest expense and bank charges (400) (600)
Total other income (expenses) 5,400 4,200
Net income (loss) before income taxes (203,400) 122,100
Income taxes 7,300
Net income (loss) $ (203,400) $ 114,800
Basic net income (loss) per common share $ (0.00) $ 0.00
Diluted net income (loss) per common share $ (0.00) $ 0.00
Weighted average common shares outstanding    
Basic 67,495,055 67,353,690
Diluted 67,495,055 67,477,603
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Balance Sheets - USD ($)
Mar. 31, 2022
Dec. 31, 2021
Current assets    
Cash $ 2,016,900 $ 1,846,700
Accounts receivable less $12,000 allowance for doubtful accounts 799,100 970,800
Inventory 511,100 422,700
Prepaid and other 80,900 160,000
Total current assets 3,408,000 3,400,200
Fixed assets    
Leasehold improvements 58,400 58,400
Furniture, fixtures and equipment 164,100 164,100
Fixed assets gross 222,500 222,500
Less: accumulated depreciation and amortization 142,700 134,200
Total fixed assets 79,800 88,300
Other assets    
Long-term receivables 92,300 185,000
Operating lease right of use – building 104,200 115,800
Other assets 196,500 300,800
Total assets 3,684,300 3,789,300
Current liabilities    
Accounts payable 99,300 3,700
Accrued expenses 172,400 151,500
Operating lease liability – current 48,300 47,500
Total current liabilities 320,000 202,700
Other liabilities    
Accrued expenses, non-current 6,500 13,000
Operating lease liability – non-current 55,900 68,300
Total other liabilities 62,400 81,300
Stockholders' equity    
Common stock, $0.01 par value Authorized – 75,000,000 shares Issued and outstanding – 67,495,055 shares 675,000 675,000
Paid-in capital 12,577,100 12,577,100
Accumulated deficit (9,950,200) (9,746,800)
Total stockholders' equity 3,301,900 3,505,300
Total liabilities and stockholders' equity $ 3,684,300 $ 3,789,300
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Balance Sheets (Parenthetical) - $ / shares
Mar. 31, 2022
Dec. 31, 2021
Statement of Financial Position [Abstract]    
Common Stock, Par or Stated Value Per Share $ 0.01 $ 0.01
Common Stock, Shares Authorized 75,000,000 75,000,000
Common Stock, Shares, Issued 67,495,055 67,495,055
Common Stock, Shares, Outstanding 67,495,055 67,495,055
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Statements of Cash Flows - USD ($)
3 Months Ended
Mar. 31, 2022
Mar. 31, 2021
Operating Activities    
Net income (loss) $ (203,400) $ 114,800
Adjustments to reconcile net income (loss) to net cash provided by operating activities    
Depreciation and amortization 8,500 6,100
Other assets 104,300 105,100
Other liabilities (18,100) (17,500)
Adjustments To Reconcile Net Income Loss To Cash (108,700) 208,500
(Increase) decrease in assets    
Accounts receivable 171,700 113,200
Inventory (88,400) (59,900)
Prepaid and other 79,100 34,200
Increase in liabilities    
Accounts payable and accrued expenses 116,500 62,100
Income taxes 7,300
Total (increase) decrease in assets and liabilities 278,900 156,900
Net cash provided by operating activities 170,200 365,400
Increase in cash 170,200 365,400
Cash at beginning of year 1,846,700 1,362,800
Cash at end of period $ 2,016,900 $ 1,728,200
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Statements of Stockholders' Equity - USD ($)
Common Stock [Member]
Additional Paid-in Capital [Member]
Retained Earnings [Member]
Total
Beginning balance, value at Dec. 31, 2020 $ 673,500 $ 12,575,800 $ (9,796,200) $ 3,453,100
Beginning balance, shares at Dec. 31, 2020 67,353,690      
Net income 114,800 114,800
Ending balance, value at Mar. 31, 2021 $ 673,500 12,575,800 (9,681,400) 3,567,900
Ending balance, shares at Mar. 31, 2021 67,353,690      
Beginning balance, value at Dec. 31, 2021 $ 675,000 12,577,100 (9,746,800) 3,505,300
Beginning balance, shares at Dec. 31, 2021 67,495,055      
Net income (203,400) (203,400)
Ending balance, value at Mar. 31, 2022 $ 675,000 $ 12,577,100 $ (9,950,200) $ 3,301,900
Ending balance, shares at Mar. 31, 2022 67,495,055      
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Financial Statements
3 Months Ended
Mar. 31, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Financial Statements

Note 1. Financial Statements

 

The accompanying unaudited condensed financial statements have been prepared by Nocopi Technologies, Inc. (our “Company”). These statements include all adjustments (consisting only of normal recurring adjustments) which management believes necessary for a fair presentation of the statements and have been prepared on a consistent basis using the accounting policies described in Note 2 Significant Accounting Policies included in the Notes to Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the Securities and Exchange Commission on March 30, 2022, as amended on April 29, 2022 (the “2021 Annual Report”). Certain financial information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although our Company believes that the accompanying disclosures are adequate to make the information presented not misleading. The Notes to Financial Statements included in the 2021 Annual Report should be read in conjunction with the accompanying interim financial statements. The interim operating results for the three months ended March 31, 2022 may not be necessarily indicative of the operating results expected for the full year.

 

A novel strain of coronavirus, COVID-19, that was first identified in Wuhan, China in December 2019 has surfaced in many countries around the world including the United States. Many countries continue to experience reoccurrences of COVID-19 to the current date. The World Health Organization has declared COVID-19 to constitute a global pandemic. Certain state and local governments reacted by placing significant restrictions on businesses including a closure in Pennsylvania of non-essential businesses that was announced on March 20, 2020. While most Pennsylvania businesses have been allowed to reopen, often at limited capacity and with certain restrictions, as of the current date, there can be no assurances that future closures will be avoided. A requirement to close our Company for a considerable period of time could result in a negative impact on our Company’s financial condition and results of operations. Additionally, as our Company imports certain raw materials from China, if an extended disruption of the supply of these raw materials were to occur, such as the vessel delays resulting from the congestion experienced in certain Chinese ports due to a COVID-19 outbreak in the second quarter of 2021 and continuing to the present time, our ability to produce products for sale to our customers could be negatively impacted. Additionally, certain of the Company’s licensees in the entertainment and toy products market who utilize printers in China to produce their products have been affected by the COVID-19 related cargo surge beginning in the third quarter of 2021 and continuing to the present time at major Chinese and United States ports as well as the world-wide container shortage resulting in significantly higher shipping costs, and have responded by deferring or scaling back production of their orders and, in some cases, rescheduling the shipping of completed orders. Such deferrals may affect the number and value of orders placed by the Company’s licensed printers in the entertainment and toy products market. Further, restrictions on our customers and licensees in areas affected by the COVID-19 could adversely affect our results of operations and financial condition. Our Company’s operating results for the first quarter of 2022 are reflective of the effects of the ongoing cargo surge as well as lockdowns in certain Chinese cities, including Shanghai, during the first quarter of 2022 that affected businesses and production in those areas. As the COVID-19 pandemic continues to spread with the Omicron variant, the BA.2 variant and other newly identified variants and sub-variants, any future financial impact cannot be reasonably estimated at this time. We cannot predict the scope or magnitude of the negative effect that may result from the impact of the COVID-19 pandemic on the Company’s financial condition and results of operations. Our Company’s results of operations were negatively affected in earlier periods in part as a result of a significant increase in the cost of raw materials utilized by our Company in the manufacture of certain of its products as a result of price increases related to the impact of the ongoing COVID-19 pandemic on the availability and supply of these raw materials. While prices of these raw materials have declined at the present time, there can be no assurances that raw material prices will remain at current levels or decrease to pre-COVID-19 pandemic levels in future periods. As the COVID-19 pandemic continues to spread both in its original form and in the recently identified variants of COVID-19 along with the potential re-imposition of certain COVID-19 restrictions currently being considered by federal, state and local governments, any future financial impact cannot be reasonably estimated at this time.

 

Our Company follows Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 220 in reporting comprehensive income (loss).  Comprehensive income is a more inclusive financial reporting methodology that includes disclosure of certain financial information that historically has not been recognized in the calculation of net income.  Since our Company has no items of other comprehensive income (loss), comprehensive income (loss) is equal to net income (loss).

 

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Stock Based Compensation
3 Months Ended
Mar. 31, 2022
Compensation Related Costs [Abstract]  
Stock Based Compensation

Note 2. Stock Based Compensation

 

Our Company follows FASB ASC 718, Compensation – Stock Compensation, and uses the Black-Scholes option pricing model to calculate the grant-date fair value of an award. At March 31, 2022, our Company did not have an active stock option plan. There was no unrecognized portion of expense related to stock option grants at March 31, 2022.

 

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Line of Credit
3 Months Ended
Mar. 31, 2022
Line Of Credit  
Line of Credit

Note 3. Line of Credit

 

In November 2018, our Company negotiated a $150,000 revolving line of credit with a bank to provide a source of working capital, if required. The line of credit is secured by all the assets of our Company and bears interest at the bank’s prime rate for a period of one year and its prime rate plus 1.5% thereafter. The line of credit is subject to an annual review and quiet period. There have been no borrowings under the line of credit since its inception.

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Stock Warrants
3 Months Ended
Mar. 31, 2022
Stock Warrants  
Stock Warrants

Note 4. Stock Warrants

 

At March 31, 2021, our Company had warrants outstanding to purchase 141,365 of our Company’s common stock at $0.02 per share. The warrants were granted in 2014 to two individuals who acquired convertible debentures from the Company in 2014. The warrants were exercisable two years after issuance and expire seven years after issuance. The fair value of the warrants was determined using the Black-Scholes pricing model. The relative fair value of the warrants was recorded as a discount to the notes payable with an offsetting credit to additional paid-in capital since our Company determined that the warrants were an equity instrument in accordance with FASB ASC 815. The debt discount related to the warrant issuances was accreted through interest expense over the term of the notes payable. During the second quarter of 2021, holders of these 141,365 warrants that had been outstanding exercised their options to purchase a total of 141,365 shares of our Company’s common stock at $0.02 per share.

 

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Income Taxes
3 Months Ended
Mar. 31, 2022
Income Tax Disclosure [Abstract]  
Income Taxes

Note 5. Income Taxes

 

There is no income tax benefit for the losses for the three months ended March 31, 2022 because our Company has determined that the realization of the net deferred tax asset is not assured. Our Company has created a valuation allowance for the entire amount of such benefits. There is no provision for federal income taxes for the three months ended March 31, 2021 due to the availability of net operating loss carryforwards.

 

The components for state income tax expense resulting from the limitation on the use of net operating losses are:

 

                    
  

 

  

Three Months ended

March 31,

 
           2022   2021 
Current state taxes            $   $7,300 
Deferred state taxes                  
Income tax expense (benefit)            $   $7,300 

 

There was no change in unrecognized tax benefits during the period ended March 31, 2022 and there was no accrual for uncertain tax positions as of March 31, 2022.

 

Tax years from 2018 through 2021 remain subject to examination by U.S. federal and state jurisdictions.

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Earnings per Share
3 Months Ended
Mar. 31, 2022
Earnings Per Share [Abstract]  
Earnings per Share

Note 6. Earnings per Share

 

In accordance with FASB ASC 260, Earnings per Share, basic earnings per common share is computed using net earnings divided by the weighted average number of common shares outstanding for the periods presented. The computation of diluted earnings per common share involves the assumption that outstanding common shares are increased by shares issuable upon exercise of those warrants for which the market price exceeds the exercise price. The number of shares issuable upon the exercise of such warrants is decreased by shares that could have been purchased by our Company with related proceeds. For the three months ended March 31, 2021, the number of incremental common shares resulting from the assumed conversion of warrants was 123,913. Since our Company did not have any outstanding warrants or other common stock equivalents as of March 31, 2022, basic and diluted loss per share were the same.

 

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Major Customer and Geographic Information
3 Months Ended
Mar. 31, 2022
Segment Reporting [Abstract]  
Major Customer and Geographic Information

Note 7. Major Customer and Geographic Information

 

Our Company’s revenues, expressed as a percentage of total revenues, from non-affiliated customers that equaled 10% or more of the Company’s total revenues were:

 

                    
  

 

  

Nine Months ended

September 30

 
           2021   2020 
Customer A             43%   67%
Customer B             26%   19%
Customer C             15%   %

  

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

 

               
    March 31     December 31  
    2022     2021  
Customer A     16 %     30 %
Customer B     73 %     65 %

 

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

 

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

 

                    
  

 

  

Three Months ended

March 31

 
           2021   2020 
North America            $123,900   $169,700 
South America             1,600    1,500 
Asia             197,900    413,500 
Australia             16,000    26,700 
             $339,400   $611,400 

 

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Leases
3 Months Ended
Mar. 31, 2022
Leases  
Leases

Note 8. Leases

 

Our Company conducts its operations in leased facilities under a non-cancelable operating lease expiring in 2024.

 

Due to the adoption of the new lease standard under the optional transition method which allows the entity to apply the new lease standard at the adoption date, our Company has capitalized the present value of the minimum lease payments commencing January 1, 2019, using an estimated incremental borrowing rate of 6.5%. The minimum lease payments do not include common area annual expenses which are considered to be non-lease components.

 

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

 

There are no other material operating leases. Our Company has elected not to recognize right-of-use assets and lease liabilities arising from short-term leases.

 

Total lease expense under operating leases for each of the three month periods ended March 31, 2022 and March 31, 2021 was $13,300.

 

Maturities of lease liabilities were as follows:

 

Maturities of Lease Liabilities        
    Operating Leases  
Year ending December 31        
2022   $ 41,200  
2023     56,200  
2024     18,900  
Total lease payments     116,300  
Less imputed interest     (12,100 )
Total   $ 104,200  
XML 24 R15.htm IDEA: XBRL DOCUMENT v3.22.1
Income Taxes (Tables)
3 Months Ended
Mar. 31, 2022
Income Tax Disclosure [Abstract]  
Components for State Income Tax Expense
                    
  

 

  

Three Months ended

March 31,

 
           2022   2021 
Current state taxes            $   $7,300 
Deferred state taxes                  
Income tax expense (benefit)            $   $7,300 
XML 25 R16.htm IDEA: XBRL DOCUMENT v3.22.1
Major Customer and Geographic Information (Tables)
3 Months Ended
Mar. 31, 2022
Segment Reporting [Abstract]  
Company's Revenues As Percentage Of Revenue
                    
  

 

  

Nine Months ended

September 30

 
           2021   2020 
Customer A             43%   67%
Customer B             26%   19%
Customer C             15%   %
Schedule of Non-affiliated Customers with Accounts Receivable More Than 10%
               
    March 31     December 31  
    2022     2021  
Customer A     16 %     30 %
Customer B     73 %     65 %
Company's Revenue by Geographic Region
                    
  

 

  

Three Months ended

March 31

 
           2021   2020 
North America            $123,900   $169,700 
South America             1,600    1,500 
Asia             197,900    413,500 
Australia             16,000    26,700 
             $339,400   $611,400 

XML 26 R17.htm IDEA: XBRL DOCUMENT v3.22.1
Leases (Tables)
3 Months Ended
Mar. 31, 2022
Leases  
Maturities of Lease Liabilities
Maturities of Lease Liabilities        
    Operating Leases  
Year ending December 31        
2022   $ 41,200  
2023     56,200  
2024     18,900  
Total lease payments     116,300  
Less imputed interest     (12,100 )
Total   $ 104,200  
XML 27 R18.htm IDEA: XBRL DOCUMENT v3.22.1
Stock Based Compensation (Details Narrative)
Mar. 31, 2022
USD ($)
Compensation Related Costs [Abstract]  
Unrecognized portion of expense related to stock option grants $ 0
XML 28 R19.htm IDEA: XBRL DOCUMENT v3.22.1
Line of Credit (Details Narrative)
3 Months Ended
Mar. 31, 2022
USD ($)
Line Of Credit  
Line of Credit Facility, Maximum Borrowing Capacity $ 150,000
Line of Credit Facility, Interest Rate Description The line of credit is secured by all the assets of our Company and bears interest at the bank’s prime rate for a period of one year and its prime rate plus 1.5% thereafter.
XML 29 R20.htm IDEA: XBRL DOCUMENT v3.22.1
Stock Warrants (Details Narrative) - $ / shares
Jun. 30, 2021
Mar. 31, 2021
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]    
Class of Warrant or Right, Outstanding 141,365  
Warrant [Member]    
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]    
Share-Based Compensation Arrangement by Share-Based Payment Award, Non-Option Equity Instruments, Outstanding, Number   141,365
Class of Warrant or Right, Exercise Price of Warrants or Rights   $ 0.02
XML 30 R21.htm IDEA: XBRL DOCUMENT v3.22.1
Income Taxes (Components for State Income Tax Expense) (Details) - USD ($)
3 Months Ended
Mar. 31, 2022
Mar. 31, 2021
Income Tax Disclosure [Abstract]    
Current state taxes $ 7,300
Deferred state taxes
Income tax expense (benefit) $ 7,300
XML 31 R22.htm IDEA: XBRL DOCUMENT v3.22.1
Income Taxes (Details Narrative)
3 Months Ended
Mar. 31, 2022
USD ($)
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items]  
Unrecognized tax benefits $ 0
Uncertain tax positions $ 0
Minimum [Member]  
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items]  
Tax years open for examination 2018
Maximum [Member]  
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items]  
Tax years open for examination 2021
XML 32 R23.htm IDEA: XBRL DOCUMENT v3.22.1
Earnings per Share (Details Narrative)
3 Months Ended
Mar. 31, 2021
shares
Earnings Per Share [Abstract]  
Number of incremental common shares resulting from the assumed conversion of warrants 123,913
XML 33 R24.htm IDEA: XBRL DOCUMENT v3.22.1
Major Customer and Geographic Information (Schedule of Revenues from Non-affiliated Customers) (Details) - Revenue Benchmark [Member]
3 Months Ended
Mar. 31, 2022
Mar. 31, 2021
Customer A [Member]    
Revenue, Major Customer [Line Items]    
Risk percentage 43.00% 67.00%
Customer B [Member]    
Revenue, Major Customer [Line Items]    
Risk percentage 26.00% 19.00%
Customer C [Member]    
Revenue, Major Customer [Line Items]    
Risk percentage 15.00%
XML 34 R25.htm IDEA: XBRL DOCUMENT v3.22.1
Major Customer and Geographic Information (Schedule of Non-affiliated Customers with Accounts Receivable) (Details) - Accounts Receivable [Member]
3 Months Ended 12 Months Ended
Mar. 31, 2022
Dec. 31, 2020
Customer A [Member]    
Revenue, Major Customer [Line Items]    
Risk percentage 16.00% 30.00%
Customer B [Member]    
Revenue, Major Customer [Line Items]    
Risk percentage 73.00% 65.00%
XML 35 R26.htm IDEA: XBRL DOCUMENT v3.22.1
Major Customer and Geographic Information (Schedule of Revenue by Geographic Region) (Details) - USD ($)
3 Months Ended
Mar. 31, 2022
Mar. 31, 2021
Revenues from External Customers and Long-Lived Assets [Line Items]    
Revenues $ 339,400 $ 611,400
North America [Member]    
Revenues from External Customers and Long-Lived Assets [Line Items]    
Revenues 123,900 169,700
South America [Member]    
Revenues from External Customers and Long-Lived Assets [Line Items]    
Revenues 1,600 1,500
Asia [Member]    
Revenues from External Customers and Long-Lived Assets [Line Items]    
Revenues 197,900 413,500
AUSTRALIA    
Revenues from External Customers and Long-Lived Assets [Line Items]    
Revenues $ 16,000 $ 26,700
XML 36 R27.htm IDEA: XBRL DOCUMENT v3.22.1
Leases (Maturities of Lease Liabilities) (Details) - USD ($)
Mar. 31, 2022
Jan. 01, 2019
Leases    
2022 $ 41,200  
2023 56,200  
2024 18,900  
Total lease payments 116,300  
Less imputed interest (12,100)  
Total $ 104,200 $ 241,100
XML 37 R28.htm IDEA: XBRL DOCUMENT v3.22.1
Leases (Details Narrative) - USD ($)
3 Months Ended
Mar. 31, 2021
Mar. 31, 2022
Dec. 31, 2021
Jan. 01, 2019
Leases        
Incremental borrowing rate       6.50%
Operating lease right-of-use asset   $ 104,200 $ 115,800 $ 241,100
Operating lease liability   $ 104,200   $ 241,100
Operating Lease, Expense $ 13,300      
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MD 87-0406496 480 Shoemaker Road Suite 104 King of Prussia PA 19406 610 834-9600 Yes Yes Non-accelerated Filer true false false 67495055 137300 185500 202100 425900 339400 611400 39500 47100 126700 173200 166200 220300 173200 391100 39500 44500 64800 83200 277700 145500 382000 273200 -208800 117900 5800 4800 400 600 5400 4200 -203400 122100 7300 -203400 114800 -0.00 0.00 -0.00 0.00 67495055 67353690 67495055 67477603 2016900 1846700 799100 970800 511100 422700 80900 160000 3408000 3400200 58400 58400 164100 164100 222500 222500 142700 134200 79800 88300 92300 185000 104200 115800 196500 300800 3684300 3789300 99300 3700 172400 151500 48300 47500 320000 202700 6500 13000 55900 68300 62400 81300 0.01 0.01 75000000 75000000 67495055 67495055 67495055 67495055 675000 675000 12577100 12577100 -9950200 -9746800 3301900 3505300 3684300 3789300 203400 -114800 8500 6100 -104300 -105100 -18100 -17500 -108700 208500 -171700 -113200 88400 59900 -79100 -34200 116500 62100 7300 -278900 -156900 170200 365400 170200 365400 1846700 1362800 2016900 1728200 67495055 675000 12577100 -9746800 3505300 -203400 -203400 67495055 675000 12577100 -9950200 3301900 67353690 673500 12575800 -9796200 3453100 114800 114800 67353690 673500 12575800 -9681400 3567900 <p id="xdx_80B_eus-gaap--NatureOfOperations_zjthHUvb61Sb" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Note 1. <span id="xdx_828_zfzElIHKGbc1">Financial Statements</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The accompanying unaudited condensed financial statements have been prepared by Nocopi Technologies, Inc. (our “Company”). These statements include all adjustments (consisting only of normal recurring adjustments) which management believes necessary for a fair presentation of the statements and have been prepared on a consistent basis using the accounting policies described in Note 2 Significant Accounting Policies included in the Notes to Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the Securities and Exchange Commission on March 30, 2022, as amended on April 29, 2022 (the “2021 Annual Report”). Certain financial information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although our Company believes that the accompanying disclosures are adequate to make the information presented not misleading. The Notes to Financial Statements included in the 2021 Annual Report should be read in conjunction with the accompanying interim financial statements. The interim operating results for the three months ended March 31, 2022 may not be necessarily indicative of the operating results expected for the full year.</p> <p style="font: 9pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">A novel strain of coronavirus, COVID-19, that was first identified in Wuhan, China in December 2019 has surfaced in many countries around the world including the United States. Many countries continue to experience reoccurrences of COVID-19 to the current date. The World Health Organization has declared COVID-19 to constitute a global pandemic. Certain state and local governments reacted by placing significant restrictions on businesses including a closure in Pennsylvania of non-essential businesses that was announced on March 20, 2020. While most Pennsylvania businesses have been allowed to reopen, often at limited capacity and with certain restrictions, as of the current date, there can be no assurances that future closures will be avoided. A requirement to close our Company for a considerable period of time could result in a negative impact on our Company’s financial condition and results of operations. Additionally, as our Company imports certain raw materials from China, if an extended disruption of the supply of these raw materials were to occur, such as the vessel delays resulting from the congestion experienced in certain Chinese ports due to a COVID-19 outbreak in the second quarter of 2021 and continuing to the present time, our ability to produce products for sale to our customers could be negatively impacted. Additionally, certain of the Company’s licensees in the entertainment and toy products market who utilize printers in China to produce their products have been affected by the COVID-19 related cargo surge beginning in the third quarter of 2021 and continuing to the present time at major Chinese and United States ports as well as the world-wide container shortage resulting in significantly higher shipping costs, and have responded by deferring or scaling back production of their orders and, in some cases, rescheduling the shipping of completed orders. Such deferrals may affect the number and value of orders placed by the Company’s licensed printers in the entertainment and toy products market. Further, restrictions on our customers and licensees in areas affected by the COVID-19 could adversely affect our results of operations and financial condition. Our Company’s operating results for the first quarter of 2022 are reflective of the effects of the ongoing cargo surge as well as lockdowns in certain Chinese cities, including Shanghai, during the first quarter of 2022 that affected businesses and production in those areas. <span style="background-color: white">A</span>s the COVID-19 pandemic continues to spread with the Omicron variant, the BA.2 variant and other newly identified variants and sub-variants, any future financial impact cannot be reasonably estimated at this time. <span style="background-color: white">We cannot predict the scope or magnitude of the negative effect that may result from the impact of the COVID-19 pandemic on the Company’s </span>financial condition and results of operations. Our Company’s results of operations were negatively affected in earlier periods in part as a result of a significant increase in the cost of raw materials utilized by our Company in the manufacture of certain of its products as a result of price increases related to the impact of the ongoing COVID-19 pandemic on the availability and supply of these raw materials. While prices of these raw materials have declined at the present time, there can be no assurances that raw material prices will remain at current levels or decrease to pre-COVID-19 pandemic levels in future periods. <span style="background-color: white">A</span>s the COVID-19 pandemic continues to spread both in its original form and in the recently identified variants of COVID-19 along with the potential re-imposition of certain COVID-19 restrictions currently being considered by federal, state and local governments, any future financial impact cannot be reasonably estimated at this time.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: -0.5pt">Our Company follows Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 220 in reporting comprehensive income (loss).  Comprehensive income is a more inclusive financial reporting methodology that includes disclosure of certain financial information that historically has not been recognized in the calculation of net income.  Since our Company has no items of other comprehensive income (loss), comprehensive income (loss) is equal to net income (loss).</p> <p style="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> <p id="xdx_80D_eus-gaap--CompensationRelatedCostsGeneralTextBlock_zqHTmOB7wOPf" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Note 2. <span id="xdx_82E_zTZ1kgqTlzWi">Stock Based Compensation</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our Company follows FASB ASC 718, <i>Compensation – Stock Compensation</i>, and uses the Black-Scholes option pricing model to calculate the grant-date fair value of an award. At March 31, 2022, our Company did not have an active stock option plan. There was <span id="xdx_900_eus-gaap--EmployeeServiceShareBasedCompensationNonvestedAwardsTotalCompensationCostNotYetRecognizedStockOptions_iI_pp0p0_do_c20220331_znKzeB9CnC8h" title="Unrecognized portion of expense related to stock option grants">no</span> unrecognized portion of expense related to stock option grants at March 31, 2022.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> 0 <p id="xdx_80A_ecustom--LineOfCreditTextBlock_zAUbaf3MQhQ8" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Note 3. <span id="xdx_82F_zN5krS9ZKU56">Line of Credit</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In November 2018, our Company negotiated a <span id="xdx_901_eus-gaap--LineOfCreditFacilityMaximumBorrowingCapacity_iI_pp0p0_c20220331_zFqoBDkTDdW5">$150,000 </span>revolving line of credit with a bank to provide a source of working capital, if required. <span id="xdx_909_eus-gaap--LineOfCreditFacilityInterestRateDescription_c20220101__20220331_zDPPi0er0oof">The line of credit is secured by all the assets of our Company and bears interest at the bank’s prime rate for a period of one year and its prime rate plus 1.5% thereafter.</span> The line of credit is subject to an annual review and quiet period. There have been no borrowings under the line of credit since its inception. </p> 150000 The line of credit is secured by all the assets of our Company and bears interest at the bank’s prime rate for a period of one year and its prime rate plus 1.5% thereafter. <p id="xdx_80A_ecustom--StockWarrantsTextBlock_zhP3Cb0Hyvrl" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Note 4. <span id="xdx_82F_zfTJfDPjRbye">Stock Warrants</span><span id="a_Aci_Pg7"/></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">At March 31, 2021, our Company had warrants outstanding to purchase <span id="xdx_906_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardNonOptionEquityInstrumentsOutstandingNumber_iI_c20210331__us-gaap--AwardTypeAxis__us-gaap--WarrantMember_zQE4nEXMFHza">141,365 </span>of our Company’s common stock at <span id="xdx_906_eus-gaap--ClassOfWarrantOrRightExercisePriceOfWarrantsOrRights1_iI_c20210331__us-gaap--AwardTypeAxis__us-gaap--WarrantMember_zLlwkWPydNDb">$0.02 </span>per share. The warrants were granted in 2014 to two individuals who acquired convertible debentures from the Company in 2014. The warrants were exercisable two years after issuance and expire seven years after issuance. The fair value of the warrants was determined using the Black-Scholes pricing model. The relative fair value of the warrants was recorded as a discount to the notes payable with an offsetting credit to additional paid-in capital since our Company determined that the warrants were an equity instrument in accordance with FASB ASC 815. The debt discount related to the warrant issuances was accreted through interest expense over the term of the notes payable. During the second quarter of 2021, holders of these <span id="xdx_902_eus-gaap--ClassOfWarrantOrRightOutstanding_iI_c20210630_zXnSI0G1D0C">141,365 </span>warrants that had been outstanding exercised their options to purchase a total of 141,365 shares of our Company’s common stock at $0.02 per share.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> 141365 0.02 141365 <p id="xdx_80C_eus-gaap--IncomeTaxDisclosureTextBlock_zEZdjqLQX6Qk" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Note 5. <span id="xdx_823_zSw20niUhiZk">Income Taxes</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0pc">There is no income tax benefit for the losses for the three months ended March 31, 2022 because our Company has determined that the realization of the net deferred tax asset is not assured. Our Company has created a valuation allowance for the entire amount of such benefits. There is no provision for federal income taxes for the three months ended March 31, 2021 due to the availability of net operating loss carryforwards.</p> <p style="font: 12pt/8pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The components for state income tax expense resulting from the limitation on the use of net operating losses are:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <table cellpadding="0" cellspacing="0" id="xdx_884_eus-gaap--ScheduleOfComponentsOfIncomeTaxExpenseBenefitTableTextBlock_zr1gN5WO7EWf" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - Income Taxes (Components for State Income Tax Expense) (Details)"> <tr style="vertical-align: bottom; background-color: transparent"> <td style="text-align: left"><span id="xdx_8BD_zJizt7zJLq9g" style="display: none">Components for State Income Tax Expense</span></td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_496_20220101__20220331_zaF6oPUnwBr8" style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_49E_20210101__20210331_z3qPogHnzima" style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font-size: 8pt; padding-bottom: 1pt"> </td> <td colspan="6" style="font-size: 8pt; text-align: center"><p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b> </b></p></td><td style="padding-bottom: 1pt; font-size: 8pt"> </td><td style="font-size: 8pt; padding-bottom: 1pt"> </td> <td colspan="6" style="border-bottom: Black 1pt solid; font-size: 8pt; text-align: center"><p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>Three Months ended</b></p> <p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>March 31,</b></p></td><td style="padding-bottom: 1pt; font-size: 8pt"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font-size: 8pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="font-size: 8pt; font-weight: bold; text-align: center"> </td><td style="padding-bottom: 1pt; font-size: 8pt; font-weight: bold"> </td><td style="font-size: 8pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="font-size: 8pt; font-weight: bold; text-align: center"> </td><td style="padding-bottom: 1pt; font-size: 8pt; font-weight: bold"> </td><td style="font-size: 8pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-size: 8pt; font-weight: bold; text-align: center">2022</td><td style="padding-bottom: 1pt; font-size: 8pt; font-weight: bold"> </td><td style="font-size: 8pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-size: 8pt; font-weight: bold; text-align: center">2021</td><td style="padding-bottom: 1pt; font-size: 8pt; font-weight: bold"> </td></tr> <tr id="xdx_40F_eus-gaap--CurrentStateAndLocalTaxExpenseBenefit_maITEBzy1C_zbpkjUFFM0sf" style="vertical-align: bottom; background-color: rgb(204,255,204)"> <td style="width: 48%; text-align: left">Current state taxes</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 10%; text-align: right"> </td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 10%; text-align: right"> </td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 10%; text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl0348">—</span></td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 10%; text-align: right">7,300</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_401_eus-gaap--DeferredStateAndLocalIncomeTaxExpenseBenefit_maITEBzy1C_zunhrt4Bfbmi" style="vertical-align: bottom; background-color: transparent"> <td style="text-align: left; padding-bottom: 1pt">Deferred state taxes</td><td style="padding-bottom: 1pt"> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl0351">—</span></td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl0352">—</span></td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_407_eus-gaap--IncomeTaxExpenseBenefit_iT_pp0p0_mtITEBzy1C_z8Sm0uCWKgT6" style="vertical-align: bottom; background-color: rgb(204,255,204)"> <td style="color: rgb(204,255,204); text-align: left; padding-bottom: 2.5pt">Income tax expense (benefit)</td><td style="padding-bottom: 2.5pt"> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl0354">—</span></td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">7,300</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">There was <span id="xdx_909_eus-gaap--UnrecognizedTaxBenefitsPeriodIncreaseDecrease_pdp0_do_c20220101__20220331_zz9AiEE0S7y" title="Unrecognized tax benefits">no</span> change in unrecognized tax benefits during the period ended March 31, 2022 and there was <span id="xdx_90C_eus-gaap--LiabilityForUncertainTaxPositionsCurrent_iI_pdp0_do_c20220331_ztaab3pSHvhi" title="Uncertain tax positions">no</span> accrual for uncertain tax positions as of March 31, 2022.<span id="a_Aci_Pg8"/></p> <p style="font: 12pt/8pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Tax years from <span id="xdx_90D_eus-gaap--OpenTaxYear_c20220101__20220331__srt--RangeAxis__srt--MinimumMember_zgkbTLAznVA6" title="Tax years open for examination">2018</span> through <span id="xdx_906_eus-gaap--OpenTaxYear_c20220101__20220331__srt--RangeAxis__srt--MaximumMember_zeex3kJoB4ej" title="Tax years open for examination">2021</span> remain subject to examination by U.S. federal and state jurisdictions.</p> <table cellpadding="0" cellspacing="0" id="xdx_884_eus-gaap--ScheduleOfComponentsOfIncomeTaxExpenseBenefitTableTextBlock_zr1gN5WO7EWf" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - Income Taxes (Components for State Income Tax Expense) (Details)"> <tr style="vertical-align: bottom; background-color: transparent"> <td style="text-align: left"><span id="xdx_8BD_zJizt7zJLq9g" style="display: none">Components for State Income Tax Expense</span></td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_496_20220101__20220331_zaF6oPUnwBr8" style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_49E_20210101__20210331_z3qPogHnzima" style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font-size: 8pt; padding-bottom: 1pt"> </td> <td colspan="6" style="font-size: 8pt; text-align: center"><p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b> </b></p></td><td style="padding-bottom: 1pt; font-size: 8pt"> </td><td style="font-size: 8pt; padding-bottom: 1pt"> </td> <td colspan="6" style="border-bottom: Black 1pt solid; font-size: 8pt; text-align: center"><p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>Three Months ended</b></p> <p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>March 31,</b></p></td><td style="padding-bottom: 1pt; font-size: 8pt"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font-size: 8pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="font-size: 8pt; font-weight: bold; text-align: center"> </td><td style="padding-bottom: 1pt; font-size: 8pt; font-weight: bold"> </td><td style="font-size: 8pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="font-size: 8pt; font-weight: bold; text-align: center"> </td><td style="padding-bottom: 1pt; font-size: 8pt; font-weight: bold"> </td><td style="font-size: 8pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-size: 8pt; font-weight: bold; text-align: center">2022</td><td style="padding-bottom: 1pt; font-size: 8pt; font-weight: bold"> </td><td style="font-size: 8pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-size: 8pt; font-weight: bold; text-align: center">2021</td><td style="padding-bottom: 1pt; font-size: 8pt; font-weight: bold"> </td></tr> <tr id="xdx_40F_eus-gaap--CurrentStateAndLocalTaxExpenseBenefit_maITEBzy1C_zbpkjUFFM0sf" style="vertical-align: bottom; background-color: rgb(204,255,204)"> <td style="width: 48%; text-align: left">Current state taxes</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 10%; text-align: right"> </td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 10%; text-align: right"> </td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 10%; text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl0348">—</span></td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 10%; text-align: right">7,300</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_401_eus-gaap--DeferredStateAndLocalIncomeTaxExpenseBenefit_maITEBzy1C_zunhrt4Bfbmi" style="vertical-align: bottom; background-color: transparent"> <td style="text-align: left; padding-bottom: 1pt">Deferred state taxes</td><td style="padding-bottom: 1pt"> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl0351">—</span></td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl0352">—</span></td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_407_eus-gaap--IncomeTaxExpenseBenefit_iT_pp0p0_mtITEBzy1C_z8Sm0uCWKgT6" style="vertical-align: bottom; background-color: rgb(204,255,204)"> <td style="color: rgb(204,255,204); text-align: left; padding-bottom: 2.5pt">Income tax expense (benefit)</td><td style="padding-bottom: 2.5pt"> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl0354">—</span></td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">7,300</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> 7300 7300 0 0 2018 2021 <p id="xdx_809_eus-gaap--EarningsPerShareTextBlock_zvnt56PdStjh" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Note 6. <span id="xdx_82C_z5Soi460o7hh">Earnings per Share</span></b></p> <p style="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In accordance with FASB ASC 260, <i>Earnings per Share</i>, basic earnings per common share is computed using net earnings divided by the weighted average number of common shares outstanding for the periods presented. The computation of diluted earnings per common share involves the assumption that outstanding common shares are increased by shares issuable upon exercise of those warrants for which the market price exceeds the exercise price. The number of shares issuable upon the exercise of such warrants is decreased by shares that could have been purchased by our Company with related proceeds. For the three months ended March 31, 2021, the number of incremental common shares resulting from the assumed conversion of warrants was <span id="xdx_90C_eus-gaap--IncrementalCommonSharesAttributableToCallOptionsAndWarrants_c20210101__20210331_zt5vZIYGPDvj" title="Number of incremental common shares resulting from the assumed conversion of warrants">123,913</span>. Since our Company did not have any outstanding warrants or other common stock equivalents as of March 31, 2022, basic and diluted loss per share were the same.</p> <p style="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> 123913 <p id="xdx_808_eus-gaap--SegmentReportingDisclosureTextBlock_zsqJqTG4iXz4" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Note 7. <span id="xdx_824_z0pocjqqYYP1">Major Customer and Geographic Information</span></b></p> <p style="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our Company’s revenues, expressed as a percentage of total revenues, from non-affiliated customers that equaled 10% or more of the Company’s total revenues were:</p> <p style="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> <p style="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"/> <table cellpadding="0" cellspacing="0" id="xdx_894_eus-gaap--ScheduleOfRevenueByMajorCustomersByReportingSegmentsTableTextBlock_zknP6Jw9Evqf" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - Major Customer and Geographic Information (Schedule of Revenues from Non-affiliated Customers) (Details)"> <tr style="vertical-align: bottom; background-color: transparent"> <td style="text-align: left"><span id="xdx_8B5_z2ZJbWlfelqc" style="display: none">Company's Revenues As Percentage Of Revenue</span></td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font-size: 8pt; padding-bottom: 1pt"> </td> <td colspan="6" style="font-size: 8pt; text-align: center"><p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b> </b></p></td><td style="padding-bottom: 1pt; font-size: 8pt"> </td><td style="font-size: 8pt; padding-bottom: 1pt"> </td> <td colspan="6" style="border-bottom: Black 1pt solid; font-size: 8pt; text-align: center"><p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>Nine Months ended</b></p> <p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>September 30</b></p></td><td style="padding-bottom: 1pt; font-size: 8pt"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font-size: 8pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="font-size: 8pt; font-weight: bold; text-align: center"> </td><td style="padding-bottom: 1pt; font-size: 8pt; font-weight: bold"> </td><td style="font-size: 8pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="font-size: 8pt; font-weight: bold; text-align: center"> </td><td style="padding-bottom: 1pt; font-size: 8pt; font-weight: bold"> </td><td style="font-size: 8pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-size: 8pt; font-weight: bold; text-align: center">2021</td><td style="padding-bottom: 1pt; font-size: 8pt; font-weight: bold"> </td><td style="font-size: 8pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-size: 8pt; font-weight: bold; text-align: center">2020</td><td style="padding-bottom: 1pt; font-size: 8pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,255,204)"> <td style="width: 48%; text-align: left">Customer A</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 10%; text-align: right"> </td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 10%; text-align: right"> </td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td id="xdx_988_eus-gaap--ConcentrationRiskPercentage1_dp_c20220101__20220331__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember__srt--MajorCustomersAxis__custom--CustomerAMember_zQEaHGFgteQk" style="width: 10%; text-align: right" title="Risk percentage">43</td><td style="width: 1%; text-align: left">%</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td id="xdx_987_eus-gaap--ConcentrationRiskPercentage1_dp_c20210101__20210331__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember__srt--MajorCustomersAxis__custom--CustomerAMember_zHAASPPUOG59" style="width: 10%; text-align: right" title="Risk percentage">67</td><td style="width: 1%; text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: transparent"> <td style="text-align: left">Customer B</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_98F_eus-gaap--ConcentrationRiskPercentage1_dp_c20220101__20220331__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember__srt--MajorCustomersAxis__custom--CustomerBMember_zbxfWxUnHoEi" style="text-align: right" title="Risk percentage">26</td><td style="text-align: left">%</td><td> </td> <td style="text-align: left"> </td><td id="xdx_988_eus-gaap--ConcentrationRiskPercentage1_dp_c20210101__20210331__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember__srt--MajorCustomersAxis__custom--CustomerBMember_z4xLLtidThzc" style="text-align: right" title="Risk percentage">19</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,255,204)"> <td style="text-align: left">Customer C</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_98D_eus-gaap--ConcentrationRiskPercentage1_dp_c20220101__20220331__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember__srt--MajorCustomersAxis__custom--CustomerCMember_zaqZHIM07bVk" style="text-align: right" title="Risk percentage">15</td><td style="text-align: left">%</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98D_eus-gaap--ConcentrationRiskPercentage1_dp_c20210101__20210331__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember__srt--MajorCustomersAxis__custom--CustomerCMember_zHJaYcJhZlbf" style="text-align: right" title="Risk percentage"><span style="-sec-ix-hidden: xdx2ixbrl0390">—</span></td><td style="text-align: left">%</td></tr> </table> <p id="xdx_8A0_zc7HuEJrcItf" style="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0">  </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our Company’s non-affiliate customers whose individual balances amounted to more than 10% of our Company’s net accounts receivable, expressed as a percentage of net accounts receivable, were:</p> <p style="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"> </p><table cellpadding="0" cellspacing="0" id="xdx_89F_eus-gaap--SchedulesOfConcentrationOfRiskByRiskFactorTextBlock_zc2EwjUAePDd" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse" summary="xdx: Disclosure - Major Customer and Geographic Information (Schedule of Non-affiliated Customers with Accounts Receivable) (Details)"> <tr style="background-color: white"> <td style="vertical-align: top"><span id="xdx_8BC_ziZmQItA548g" style="display: none">Schedule of Non-affiliated Customers with Accounts Receivable More Than 10%</span></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="white-space: nowrap; vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="white-space: nowrap; vertical-align: bottom"> </td></tr> <tr> <td style="vertical-align: top"> </td> <td style="vertical-align: bottom"> </td> <td colspan="2" style="vertical-align: top; text-align: center"><span style="font-size: 8pt"><b>March 31</b></span></td> <td style="white-space: nowrap; vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td colspan="2" style="vertical-align: top; text-align: center"><span style="font-size: 8pt"><b>December 31</b></span></td> <td style="white-space: nowrap; vertical-align: bottom"> </td></tr> <tr> <td style="vertical-align: top"> </td> <td style="vertical-align: bottom"> </td> <td colspan="2" style="border-bottom: black 1pt solid; vertical-align: top; text-align: center"><span style="font-size: 8pt"><b>2022</b></span></td> <td style="white-space: nowrap; vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td colspan="2" style="border-bottom: black 1pt solid; vertical-align: top; text-align: center"><span style="font-size: 8pt"><b>2021</b></span></td> <td style="white-space: nowrap; vertical-align: bottom"> </td></tr> <tr style="background-color: #CCFFCC"> <td style="vertical-align: top; width: 76%">Customer A</td> <td style="vertical-align: bottom; width: 1%"> </td> <td style="vertical-align: bottom; width: 1%"> </td> <td id="xdx_988_eus-gaap--ConcentrationRiskPercentage1_dp_c20220101__20220331__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember__srt--MajorCustomersAxis__custom--CustomerAMember_z1g6TEevX8V3" style="vertical-align: bottom; width: 9%; text-align: right" title="Risk percentage">16</td> <td style="white-space: nowrap; vertical-align: bottom; width: 1%">%</td> <td style="vertical-align: bottom; width: 1%"> </td> <td style="vertical-align: bottom; width: 1%"> </td> <td id="xdx_98E_eus-gaap--ConcentrationRiskPercentage1_dp_c20200101__20201231__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember__srt--MajorCustomersAxis__custom--CustomerAMember_zWe6gpK5Xjtf" style="vertical-align: bottom; width: 9%; text-align: right" title="Risk percentage">30</td> <td style="white-space: nowrap; vertical-align: bottom; width: 1%">%</td></tr> <tr style="background-color: white"> <td style="vertical-align: top">Customer B</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td id="xdx_982_eus-gaap--ConcentrationRiskPercentage1_dp_c20220101__20220331__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember__srt--MajorCustomersAxis__custom--CustomerBMember_z4fgckgL0f6i" style="vertical-align: bottom; text-align: right" title="Risk percentage">73</td> <td style="white-space: nowrap; vertical-align: bottom">%</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td id="xdx_980_eus-gaap--ConcentrationRiskPercentage1_dp_c20200101__20201231__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember__srt--MajorCustomersAxis__custom--CustomerBMember_zPbseSMNO7wj" style="vertical-align: bottom; text-align: right" title="Risk percentage">65</td> <td style="white-space: nowrap; vertical-align: bottom">%</td></tr> </table> <p id="xdx_8A8_zCAh2iO9HbN8" style="margin-top: 0; margin-bottom: 0"> </p> <p id="xdx_8AA_z9iBXewTaKze" style="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"/> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our Company performs ongoing credit evaluations of its customers and generally does not require collateral. Our Company also maintains allowances for potential credit losses. The loss of a major customer could have a material adverse effect on our Company’s business operations and financial condition.</p> <p style="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our Company’s revenues by geographic region are as follows:</p> <p style="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> <table cellpadding="0" cellspacing="0" id="xdx_89C_eus-gaap--RevenueFromExternalCustomersByGeographicAreasTableTextBlock_zG6Xrenn8Iyi" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - Major Customer and Geographic Information (Schedule of Revenue by Geographic Region) (Details)"> <tr style="vertical-align: bottom; background-color: transparent"> <td style="text-align: left"><span id="xdx_8B3_znsIWHq3Usqb" style="display: none">Company's Revenue by Geographic Region</span></td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font-size: 8pt; padding-bottom: 1pt"> </td> <td colspan="6" style="font-size: 8pt; text-align: center"><p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b> </b></p></td><td style="padding-bottom: 1pt; font-size: 8pt"> </td><td style="font-size: 8pt; padding-bottom: 1pt"> </td> <td colspan="6" style="border-bottom: Black 1pt solid; font-size: 8pt; text-align: center"><p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>Three Months ended</b></p> <p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>March 31</b></p></td><td style="padding-bottom: 1pt; font-size: 8pt"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font-size: 8pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="font-size: 8pt; font-weight: bold; text-align: center"> </td><td style="padding-bottom: 1pt; font-size: 8pt; font-weight: bold"> </td><td style="font-size: 8pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="font-size: 8pt; font-weight: bold; text-align: center"> </td><td style="padding-bottom: 1pt; font-size: 8pt; font-weight: bold"> </td><td style="font-size: 8pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-size: 8pt; font-weight: bold; text-align: center">2021</td><td style="padding-bottom: 1pt; font-size: 8pt; font-weight: bold"> </td><td style="font-size: 8pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-size: 8pt; font-weight: bold; text-align: center">2020</td><td style="padding-bottom: 1pt; font-size: 8pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,255,204)"> <td style="width: 48%; text-align: left">North America</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 10%; text-align: right"> </td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 10%; text-align: right"> </td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_981_eus-gaap--Revenues_pp0p0_c20220101__20220331__srt--StatementGeographicalAxis__srt--NorthAmericaMember_zj6eXM31niDl" style="width: 10%; text-align: right" title="Revenues">123,900</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_981_eus-gaap--Revenues_pp0p0_c20210101__20210331__srt--StatementGeographicalAxis__srt--NorthAmericaMember_zU1aD4RJWrKf" style="width: 10%; text-align: right" title="Revenues">169,700</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: transparent"> <td style="text-align: left">South America</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_98B_eus-gaap--Revenues_pp0p0_c20220101__20220331__srt--StatementGeographicalAxis__srt--SouthAmericaMember_z7QAhISk24r4" style="text-align: right" title="Revenues">1,600</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_989_eus-gaap--Revenues_pp0p0_c20210101__20210331__srt--StatementGeographicalAxis__srt--SouthAmericaMember_zS6eVOQ7XX9b" style="text-align: right" title="Revenues">1,500</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,255,204)"> <td>Asia</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_98A_eus-gaap--Revenues_pp0p0_c20220101__20220331__srt--StatementGeographicalAxis__srt--AsiaMember_zCQ9DX6ysxi9" style="text-align: right" title="Revenues">197,900</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_98E_eus-gaap--Revenues_pp0p0_c20210101__20210331__srt--StatementGeographicalAxis__srt--AsiaMember_zB7AOH7xfP42" style="text-align: right" title="Revenues">413,500</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: transparent"> <td style="padding-bottom: 1pt">Australia</td><td style="padding-bottom: 1pt"> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_98D_eus-gaap--Revenues_pp0p0_c20220101__20220331__srt--StatementGeographicalAxis__country--AU_zStJ86dv6Ypg" style="border-bottom: Black 1pt solid; text-align: right" title="Revenues">16,000</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_984_eus-gaap--Revenues_pp0p0_c20210101__20210331__srt--StatementGeographicalAxis__country--AU_zhFsTHS7ln06" style="border-bottom: Black 1pt solid; text-align: right" title="Revenues">26,700</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,255,204)"> <td style="padding-bottom: 2.5pt"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_986_eus-gaap--Revenues_pp0p0_c20220101__20220331_zIvOe7DEVrT1" style="border-bottom: Black 2.5pt double; text-align: right" title="Revenues">339,400</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_98D_eus-gaap--Revenues_pp0p0_c20210101__20210331_zZrr18adbUhj" style="border-bottom: Black 2.5pt double; text-align: right" title="Revenues">611,400</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"/><p id="xdx_8AE_zzniGyZmW8ag" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b> </b></p> <table cellpadding="0" cellspacing="0" id="xdx_894_eus-gaap--ScheduleOfRevenueByMajorCustomersByReportingSegmentsTableTextBlock_zknP6Jw9Evqf" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - Major Customer and Geographic Information (Schedule of Revenues from Non-affiliated Customers) (Details)"> <tr style="vertical-align: bottom; background-color: transparent"> <td style="text-align: left"><span id="xdx_8B5_z2ZJbWlfelqc" style="display: none">Company's Revenues As Percentage Of Revenue</span></td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font-size: 8pt; padding-bottom: 1pt"> </td> <td colspan="6" style="font-size: 8pt; text-align: center"><p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b> </b></p></td><td style="padding-bottom: 1pt; font-size: 8pt"> </td><td style="font-size: 8pt; padding-bottom: 1pt"> </td> <td colspan="6" style="border-bottom: Black 1pt solid; font-size: 8pt; text-align: center"><p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>Nine Months ended</b></p> <p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>September 30</b></p></td><td style="padding-bottom: 1pt; font-size: 8pt"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font-size: 8pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="font-size: 8pt; font-weight: bold; text-align: center"> </td><td style="padding-bottom: 1pt; font-size: 8pt; font-weight: bold"> </td><td style="font-size: 8pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="font-size: 8pt; font-weight: bold; text-align: center"> </td><td style="padding-bottom: 1pt; font-size: 8pt; font-weight: bold"> </td><td style="font-size: 8pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-size: 8pt; font-weight: bold; text-align: center">2021</td><td style="padding-bottom: 1pt; font-size: 8pt; font-weight: bold"> </td><td style="font-size: 8pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-size: 8pt; font-weight: bold; text-align: center">2020</td><td style="padding-bottom: 1pt; font-size: 8pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,255,204)"> <td style="width: 48%; text-align: left">Customer A</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 10%; text-align: right"> </td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 10%; text-align: right"> </td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td id="xdx_988_eus-gaap--ConcentrationRiskPercentage1_dp_c20220101__20220331__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember__srt--MajorCustomersAxis__custom--CustomerAMember_zQEaHGFgteQk" style="width: 10%; text-align: right" title="Risk percentage">43</td><td style="width: 1%; text-align: left">%</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td id="xdx_987_eus-gaap--ConcentrationRiskPercentage1_dp_c20210101__20210331__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember__srt--MajorCustomersAxis__custom--CustomerAMember_zHAASPPUOG59" style="width: 10%; text-align: right" title="Risk percentage">67</td><td style="width: 1%; text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: transparent"> <td style="text-align: left">Customer B</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_98F_eus-gaap--ConcentrationRiskPercentage1_dp_c20220101__20220331__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember__srt--MajorCustomersAxis__custom--CustomerBMember_zbxfWxUnHoEi" style="text-align: right" title="Risk percentage">26</td><td style="text-align: left">%</td><td> </td> <td style="text-align: left"> </td><td id="xdx_988_eus-gaap--ConcentrationRiskPercentage1_dp_c20210101__20210331__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember__srt--MajorCustomersAxis__custom--CustomerBMember_z4xLLtidThzc" style="text-align: right" title="Risk percentage">19</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,255,204)"> <td style="text-align: left">Customer C</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_98D_eus-gaap--ConcentrationRiskPercentage1_dp_c20220101__20220331__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember__srt--MajorCustomersAxis__custom--CustomerCMember_zaqZHIM07bVk" style="text-align: right" title="Risk percentage">15</td><td style="text-align: left">%</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98D_eus-gaap--ConcentrationRiskPercentage1_dp_c20210101__20210331__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember__srt--MajorCustomersAxis__custom--CustomerCMember_zHJaYcJhZlbf" style="text-align: right" title="Risk percentage"><span style="-sec-ix-hidden: xdx2ixbrl0390">—</span></td><td style="text-align: left">%</td></tr> </table> 0.43 0.67 0.26 0.19 0.15 <table cellpadding="0" cellspacing="0" id="xdx_89F_eus-gaap--SchedulesOfConcentrationOfRiskByRiskFactorTextBlock_zc2EwjUAePDd" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse" summary="xdx: Disclosure - Major Customer and Geographic Information (Schedule of Non-affiliated Customers with Accounts Receivable) (Details)"> <tr style="background-color: white"> <td style="vertical-align: top"><span id="xdx_8BC_ziZmQItA548g" style="display: none">Schedule of Non-affiliated Customers with Accounts Receivable More Than 10%</span></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="white-space: nowrap; vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="white-space: nowrap; vertical-align: bottom"> </td></tr> <tr> <td style="vertical-align: top"> </td> <td style="vertical-align: bottom"> </td> <td colspan="2" style="vertical-align: top; text-align: center"><span style="font-size: 8pt"><b>March 31</b></span></td> <td style="white-space: nowrap; vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td colspan="2" style="vertical-align: top; text-align: center"><span style="font-size: 8pt"><b>December 31</b></span></td> <td style="white-space: nowrap; vertical-align: bottom"> </td></tr> <tr> <td style="vertical-align: top"> </td> <td style="vertical-align: bottom"> </td> <td colspan="2" style="border-bottom: black 1pt solid; vertical-align: top; text-align: center"><span style="font-size: 8pt"><b>2022</b></span></td> <td style="white-space: nowrap; vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td colspan="2" style="border-bottom: black 1pt solid; vertical-align: top; text-align: center"><span style="font-size: 8pt"><b>2021</b></span></td> <td style="white-space: nowrap; vertical-align: bottom"> </td></tr> <tr style="background-color: #CCFFCC"> <td style="vertical-align: top; width: 76%">Customer A</td> <td style="vertical-align: bottom; width: 1%"> </td> <td style="vertical-align: bottom; width: 1%"> </td> <td id="xdx_988_eus-gaap--ConcentrationRiskPercentage1_dp_c20220101__20220331__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember__srt--MajorCustomersAxis__custom--CustomerAMember_z1g6TEevX8V3" style="vertical-align: bottom; width: 9%; text-align: right" title="Risk percentage">16</td> <td style="white-space: nowrap; vertical-align: bottom; width: 1%">%</td> <td style="vertical-align: bottom; width: 1%"> </td> <td style="vertical-align: bottom; width: 1%"> </td> <td id="xdx_98E_eus-gaap--ConcentrationRiskPercentage1_dp_c20200101__20201231__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember__srt--MajorCustomersAxis__custom--CustomerAMember_zWe6gpK5Xjtf" style="vertical-align: bottom; width: 9%; text-align: right" title="Risk percentage">30</td> <td style="white-space: nowrap; vertical-align: bottom; width: 1%">%</td></tr> <tr style="background-color: white"> <td style="vertical-align: top">Customer B</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td id="xdx_982_eus-gaap--ConcentrationRiskPercentage1_dp_c20220101__20220331__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember__srt--MajorCustomersAxis__custom--CustomerBMember_z4fgckgL0f6i" style="vertical-align: bottom; text-align: right" title="Risk percentage">73</td> <td style="white-space: nowrap; vertical-align: bottom">%</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td id="xdx_980_eus-gaap--ConcentrationRiskPercentage1_dp_c20200101__20201231__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember__srt--MajorCustomersAxis__custom--CustomerBMember_zPbseSMNO7wj" style="vertical-align: bottom; text-align: right" title="Risk percentage">65</td> <td style="white-space: nowrap; vertical-align: bottom">%</td></tr> </table> 0.16 0.30 0.73 0.65 <table cellpadding="0" cellspacing="0" id="xdx_89C_eus-gaap--RevenueFromExternalCustomersByGeographicAreasTableTextBlock_zG6Xrenn8Iyi" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - Major Customer and Geographic Information (Schedule of Revenue by Geographic Region) (Details)"> <tr style="vertical-align: bottom; background-color: transparent"> <td style="text-align: left"><span id="xdx_8B3_znsIWHq3Usqb" style="display: none">Company's Revenue by Geographic Region</span></td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font-size: 8pt; padding-bottom: 1pt"> </td> <td colspan="6" style="font-size: 8pt; text-align: center"><p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b> </b></p></td><td style="padding-bottom: 1pt; font-size: 8pt"> </td><td style="font-size: 8pt; padding-bottom: 1pt"> </td> <td colspan="6" style="border-bottom: Black 1pt solid; font-size: 8pt; text-align: center"><p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>Three Months ended</b></p> <p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>March 31</b></p></td><td style="padding-bottom: 1pt; font-size: 8pt"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font-size: 8pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="font-size: 8pt; font-weight: bold; text-align: center"> </td><td style="padding-bottom: 1pt; font-size: 8pt; font-weight: bold"> </td><td style="font-size: 8pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="font-size: 8pt; font-weight: bold; text-align: center"> </td><td style="padding-bottom: 1pt; font-size: 8pt; font-weight: bold"> </td><td style="font-size: 8pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-size: 8pt; font-weight: bold; text-align: center">2021</td><td style="padding-bottom: 1pt; font-size: 8pt; font-weight: bold"> </td><td style="font-size: 8pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-size: 8pt; font-weight: bold; text-align: center">2020</td><td style="padding-bottom: 1pt; font-size: 8pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,255,204)"> <td style="width: 48%; text-align: left">North America</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 10%; text-align: right"> </td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 10%; text-align: right"> </td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_981_eus-gaap--Revenues_pp0p0_c20220101__20220331__srt--StatementGeographicalAxis__srt--NorthAmericaMember_zj6eXM31niDl" style="width: 10%; text-align: right" title="Revenues">123,900</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_981_eus-gaap--Revenues_pp0p0_c20210101__20210331__srt--StatementGeographicalAxis__srt--NorthAmericaMember_zU1aD4RJWrKf" style="width: 10%; text-align: right" title="Revenues">169,700</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: transparent"> <td style="text-align: left">South America</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_98B_eus-gaap--Revenues_pp0p0_c20220101__20220331__srt--StatementGeographicalAxis__srt--SouthAmericaMember_z7QAhISk24r4" style="text-align: right" title="Revenues">1,600</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_989_eus-gaap--Revenues_pp0p0_c20210101__20210331__srt--StatementGeographicalAxis__srt--SouthAmericaMember_zS6eVOQ7XX9b" style="text-align: right" title="Revenues">1,500</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,255,204)"> <td>Asia</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_98A_eus-gaap--Revenues_pp0p0_c20220101__20220331__srt--StatementGeographicalAxis__srt--AsiaMember_zCQ9DX6ysxi9" style="text-align: right" title="Revenues">197,900</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_98E_eus-gaap--Revenues_pp0p0_c20210101__20210331__srt--StatementGeographicalAxis__srt--AsiaMember_zB7AOH7xfP42" style="text-align: right" title="Revenues">413,500</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: transparent"> <td style="padding-bottom: 1pt">Australia</td><td style="padding-bottom: 1pt"> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_98D_eus-gaap--Revenues_pp0p0_c20220101__20220331__srt--StatementGeographicalAxis__country--AU_zStJ86dv6Ypg" style="border-bottom: Black 1pt solid; text-align: right" title="Revenues">16,000</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_984_eus-gaap--Revenues_pp0p0_c20210101__20210331__srt--StatementGeographicalAxis__country--AU_zhFsTHS7ln06" style="border-bottom: Black 1pt solid; text-align: right" title="Revenues">26,700</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,255,204)"> <td style="padding-bottom: 2.5pt"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_986_eus-gaap--Revenues_pp0p0_c20220101__20220331_zIvOe7DEVrT1" style="border-bottom: Black 2.5pt double; text-align: right" title="Revenues">339,400</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_98D_eus-gaap--Revenues_pp0p0_c20210101__20210331_zZrr18adbUhj" style="border-bottom: Black 2.5pt double; text-align: right" title="Revenues">611,400</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"/> 123900 169700 1600 1500 197900 413500 16000 26700 339400 611400 <p id="xdx_80E_ecustom--LeasesOfLesseeDisclosureTextBloc_zspWGSajril1" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Note 8. <span id="xdx_82A_z4KPZWvVolP1">Leases</span> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b> </b></p> <p style="font: 10pt/11pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our Company conducts its operations in leased facilities under a non-cancelable operating lease expiring in 2024.<span id="a_Aci_Pg9"/></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Due to the adoption of the new lease standard under the optional transition method which allows the entity to apply the new lease standard at the adoption date, our Company has capitalized the present value of the minimum lease payments commencing January 1, 2019, using an estimated incremental borrowing rate of <span id="xdx_90D_eus-gaap--LesseeOperatingLeaseDiscountRate_iI_dp_c20190101_ziCzmhW7bZxb" title="Incremental borrowing rate">6.5</span>%. The minimum lease payments do not include common area annual expenses which are considered to be non-lease components.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of January 1, 2019 the operating lease right-of-use asset and operating lease liability amounted to <span id="xdx_90C_eus-gaap--OperatingLeaseRightOfUseAsset_c20190101_pp0p0" title="Operating lease right-of-use asset"><span id="xdx_906_eus-gaap--OperatingLeaseLiability_c20190101_pp0p0" title="Operating lease liability">$241,100</span></span> with no cumulative-effect adjustment to the opening balance of accumulated deficit.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">There are no other material operating leases. Our Company has elected not to recognize right-of-use assets and lease liabilities arising from short-term leases.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Total lease expense under operating leases for each of the three month periods ended March 31, 2022 and March 31, 2021 was $<span id="xdx_903_eus-gaap--OperatingLeaseExpense_c20210101__20210331_zBqI7Q99Vm6a">13,300</span>.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Maturities of lease liabilities were as follows:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> <table cellpadding="0" cellspacing="0" id="xdx_88B_eus-gaap--LesseeOperatingLeaseLiabilityMaturityTableTextBlock_z2oxww1ZSGlc" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse" summary="xdx: Disclosure - Leases (Maturities of Lease Liabilities) (Details)"> <tr> <td style="vertical-align: top; padding-left: 1.5pc; text-indent: -0.5pc"><span id="xdx_8B7_zdo57DkEfb0b"><span style="display: none">Maturities of Lease Liabilities</span></span></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td id="xdx_494_20220331_zsNES0S77aLf" style="vertical-align: bottom; text-align: right"> </td> <td style="white-space: nowrap; vertical-align: bottom"> </td></tr> <tr> <td style="padding-bottom: 1pt; vertical-align: top"> </td> <td style="padding-bottom: 1pt; vertical-align: bottom"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; vertical-align: bottom; text-align: center"><span style="font-size: 8pt"><b>Operating Leases</b></span></td> <td style="padding-bottom: 1pt; white-space: nowrap; vertical-align: bottom"> </td></tr> <tr style="background-color: rgb(204,255,204)"> <td style="vertical-align: top; width: 87%"><span style="font-size: 8pt"><b>Year ending December 31</b></span></td> <td style="vertical-align: bottom; width: 1%"> </td> <td style="vertical-align: bottom; width: 1%"> </td> <td style="vertical-align: bottom; width: 10%; text-align: right"> </td> <td style="white-space: nowrap; vertical-align: bottom; width: 1%"> </td></tr> <tr id="xdx_40C_eus-gaap--LesseeOperatingLeaseLiabilityPaymentsRemainderOfFiscalYear_iI_pp0p0_maLOLLPzTwo_zF2BuqpEIVb6"> <td style="vertical-align: top; padding-left: 1.5pc; text-indent: -0.5pc">2022</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom">$</td> <td style="vertical-align: bottom; text-align: right">41,200</td> <td style="white-space: nowrap; vertical-align: bottom"> </td></tr> <tr id="xdx_408_eus-gaap--LesseeOperatingLeaseLiabilityPaymentsDueNextTwelveMonths_iI_pp0p0_maLOLLPzTwo_zXOM1XH4WjZ4" style="background-color: rgb(204,255,204)"> <td style="vertical-align: top; padding-left: 1.5pc; text-indent: -0.5pc">2023</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">56,200</td> <td style="white-space: nowrap; vertical-align: bottom"> </td></tr> <tr id="xdx_409_eus-gaap--LesseeOperatingLeaseLiabilityPaymentsDueYearTwo_iI_pp0p0_maLOLLPzTwo_zp4cBrJkQhm6"> <td style="vertical-align: top; padding-left: 1.5pc; text-indent: -0.5pc">2024</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">18,900</td> <td style="white-space: nowrap; vertical-align: bottom"> </td></tr> <tr id="xdx_402_eus-gaap--LesseeOperatingLeaseLiabilityPaymentsDue_iTI_pp0p0_mtLOLLPzTwo_zaI1qENfPeye" style="background-color: rgb(204,255,204)"> <td style="padding-bottom: 1pt; vertical-align: top; padding-left: 2.5pc; text-indent: -0.5pc">Total lease payments</td> <td style="padding-bottom: 1pt; vertical-align: bottom"> </td> <td style="border-bottom: Black 1pt solid; vertical-align: bottom"> </td> <td style="border-bottom: Black 1pt solid; vertical-align: bottom; text-align: right">116,300</td> <td style="padding-bottom: 1pt; white-space: nowrap; vertical-align: bottom"> </td></tr> <tr id="xdx_40A_eus-gaap--LesseeOperatingLeaseLiabilityUndiscountedExcessAmount_iNI_pp0p0_di_z4q4vmzvDRy5"> <td style="vertical-align: top; padding-left: 1.5pc; text-indent: -0.5pc">Less imputed interest</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right">(12,100</td> <td style="border-bottom: white 1pt solid; white-space: nowrap; vertical-align: bottom">)</td></tr> <tr id="xdx_40F_eus-gaap--OperatingLeaseLiability_iI_pp0p0" style="background-color: rgb(204,255,204)"> <td style="vertical-align: top; padding-left: 2.5pc; text-indent: -0.5pc">Total</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: Black 2.25pt double; vertical-align: bottom">$</td> <td style="border-bottom: Black 2.25pt double; vertical-align: bottom; text-align: right">104,200</td> <td style="border-bottom: white 2.25pt double; white-space: nowrap; vertical-align: bottom"> </td></tr> </table> 0.065 241100 241100 13300 <table cellpadding="0" cellspacing="0" id="xdx_88B_eus-gaap--LesseeOperatingLeaseLiabilityMaturityTableTextBlock_z2oxww1ZSGlc" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse" summary="xdx: Disclosure - Leases (Maturities of Lease Liabilities) (Details)"> <tr> <td style="vertical-align: top; padding-left: 1.5pc; text-indent: -0.5pc"><span id="xdx_8B7_zdo57DkEfb0b"><span style="display: none">Maturities of Lease Liabilities</span></span></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td id="xdx_494_20220331_zsNES0S77aLf" style="vertical-align: bottom; text-align: right"> </td> <td style="white-space: nowrap; vertical-align: bottom"> </td></tr> <tr> <td style="padding-bottom: 1pt; vertical-align: top"> </td> <td style="padding-bottom: 1pt; vertical-align: bottom"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; vertical-align: bottom; text-align: center"><span style="font-size: 8pt"><b>Operating Leases</b></span></td> <td style="padding-bottom: 1pt; white-space: nowrap; vertical-align: bottom"> </td></tr> <tr style="background-color: rgb(204,255,204)"> <td style="vertical-align: top; width: 87%"><span style="font-size: 8pt"><b>Year ending December 31</b></span></td> <td style="vertical-align: bottom; width: 1%"> </td> <td style="vertical-align: bottom; width: 1%"> </td> <td style="vertical-align: bottom; width: 10%; text-align: right"> </td> <td style="white-space: nowrap; vertical-align: bottom; width: 1%"> </td></tr> <tr id="xdx_40C_eus-gaap--LesseeOperatingLeaseLiabilityPaymentsRemainderOfFiscalYear_iI_pp0p0_maLOLLPzTwo_zF2BuqpEIVb6"> <td style="vertical-align: top; padding-left: 1.5pc; text-indent: -0.5pc">2022</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom">$</td> <td style="vertical-align: bottom; text-align: right">41,200</td> <td style="white-space: nowrap; vertical-align: bottom"> </td></tr> <tr id="xdx_408_eus-gaap--LesseeOperatingLeaseLiabilityPaymentsDueNextTwelveMonths_iI_pp0p0_maLOLLPzTwo_zXOM1XH4WjZ4" style="background-color: rgb(204,255,204)"> <td style="vertical-align: top; padding-left: 1.5pc; text-indent: -0.5pc">2023</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">56,200</td> <td style="white-space: nowrap; vertical-align: bottom"> </td></tr> <tr id="xdx_409_eus-gaap--LesseeOperatingLeaseLiabilityPaymentsDueYearTwo_iI_pp0p0_maLOLLPzTwo_zp4cBrJkQhm6"> <td style="vertical-align: top; padding-left: 1.5pc; text-indent: -0.5pc">2024</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">18,900</td> <td style="white-space: nowrap; vertical-align: bottom"> </td></tr> <tr id="xdx_402_eus-gaap--LesseeOperatingLeaseLiabilityPaymentsDue_iTI_pp0p0_mtLOLLPzTwo_zaI1qENfPeye" style="background-color: rgb(204,255,204)"> <td style="padding-bottom: 1pt; vertical-align: top; padding-left: 2.5pc; text-indent: -0.5pc">Total lease payments</td> <td style="padding-bottom: 1pt; vertical-align: bottom"> </td> <td style="border-bottom: Black 1pt solid; vertical-align: bottom"> </td> <td style="border-bottom: Black 1pt solid; vertical-align: bottom; text-align: right">116,300</td> <td style="padding-bottom: 1pt; white-space: nowrap; vertical-align: bottom"> </td></tr> <tr id="xdx_40A_eus-gaap--LesseeOperatingLeaseLiabilityUndiscountedExcessAmount_iNI_pp0p0_di_z4q4vmzvDRy5"> <td style="vertical-align: top; padding-left: 1.5pc; text-indent: -0.5pc">Less imputed interest</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right">(12,100</td> <td style="border-bottom: white 1pt solid; white-space: nowrap; vertical-align: bottom">)</td></tr> <tr id="xdx_40F_eus-gaap--OperatingLeaseLiability_iI_pp0p0" style="background-color: rgb(204,255,204)"> <td style="vertical-align: top; padding-left: 2.5pc; text-indent: -0.5pc">Total</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: Black 2.25pt double; vertical-align: bottom">$</td> <td style="border-bottom: Black 2.25pt double; vertical-align: bottom; text-align: right">104,200</td> <td style="border-bottom: white 2.25pt double; white-space: nowrap; vertical-align: bottom"> </td></tr> </table> 41200 56200 18900 116300 12100 104200 EXCEL 39 Financial_Report.xlsx IDEA: XBRL DOCUMENT begin 644 Financial_Report.xlsx M4$L#!!0 ( )&+IE0'04UB@0 +$ 0 9&]C4')O<',O87!P+GAM M;$V./0L",1!$_\IQO;=!P4)B0-!2L+(/>QLOD&1#LD)^OCG!CVX>;QA&WPIG M*N*I#BV&5(_C(I(/ !47BK9.7:=N')=HI6-Y #OGDK7A.YNJQ<&4GPZ4A!0W_J=0U[R;UEA_6\#MI7E!+ P04 M " "1BZ94<"DZD.X K @ $0 &1O8U!R;W!S+V-O&ULS9+! 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