Nocopi Technologies Reports 4Q, Full Year 2022 Financial Results

Nocopi Technologies, Inc., a developer of specialty reactive inks, announced results for its fourth quarter and 12 months ended Dec, 31, 2022.

2022 Q4 revenue was $3,087,600, a substantial increase over 2022 Q4 revenue of $514,100 that largely reflects increased licensee revenue from the renewal of the company’s largest licensee for a new five-year extension term. Additionally, the company entered into a new license agreement with a new domestic and international licensee in the children’s entertainment space.

Excluding licenses and royalty revenue, revenue in the fourth quarter compared to 2021 Q4 for product and other sales were negatively impacted from a modest decline in specialty ink shipments that were down approximately 10.5%

Gross profit increased to $2,919,700 from 2021 Q4 of $209,200. Gross profit margin was 94.6% of revenues, an increase from 2021 Q3 gross profit of 64.9%. The higher gross profit in 2022 Q4 compared to 2021 Q4 was the result of higher mix of revenue generated from guaranteed royalty revenues recognized from licenses, royalties, and fees from our licensees.

Net income for the fourth quarter was $2,107,000 an improvement over 2021 Q4 net loss of $109,000.

Full year net sales for 2022 were $4,627,200 and net income of $1,813,100, verse 2021 net sales of $1,951,900 and net income of $49,400. During 2022, Nocopi has renewed and extended its licensing agreements with three of its licensees as well as entered into a new license agreement in Q4 in the children’s entertainment space. Nocopi ended the year with cash and cash equivalents of $5.34 million and a debt free balance sheet.

Nocopi refreshed its board of directors with three new directors appointed in the last 12 months, for a total of six currently serving, four of whom are independent directors. The company remains focused on accelerating growth through improving operations and pursuing accretive expansion opportunities through a merger or acquisition transaction.

“Fiscal 2022 marks the seventh consecutive year of profitable operations at Nocopi Technologies,” Michael Feinstein, Nocopi chairman and CEO, said. “We encountered challenging headwinds from supply chain constraints and global economic conditions in late 2021 into 2022, but we remain focused on growing our business and expanding our customer base as we enter 2023 and beyond.

“We are pleased to announce that during the past year, we have renewed and extended our licensing agreements with three of our licensees for multiyear agreements,” said Feinstein.” Notably, we executed a five-year extension with our largest domestic licensee, which represents the longest extension term we have ever done in our history with this licensee. In addition, in the fourth quarter, we have entered into a new license in the children’s entertainment space.

“We anticipate that our many licensees will continue to offer innovative products utilizing our technologies and will continue to expand both in the domestic and international marketplaces. We also continue to create new ink technologies in attempt to increase the offerings of our licensee’s product portfolios. Additionally, in attempt to accelerate our growth, we are pushing forward with new sales distribution channels to expand our customer base for our portfolio of ink technologies.

“In regard to executing our long-term strategic plans, Nocopi is pursuing a highly disciplined approach in looking for attractive opportunities to expand by merger or acquisition,” Feinstein concluded. “Given the backdrop of the current financial conditions, we will remain disciplined in our capital deployment strategy. Our long-term intentions are focused around growing our free cash flow.”