Nocopi Technologies, Inc.

What they do

Nocopi develops and markets specialty reactive inks used in entertainment and toy products for color-reveal effects and in document and brand authentication to reduce fraud, counterfeiting and diversion. It does not make commodity pigments; it sources raw materials and formulates custom inks backed by patents and trade secrets. Revenue comes mainly from licensing its technologies exclusively or non-exclusively, plus direct sales of inks, security paper, labels and supporting equipment to licensees and their printers.

Revenue drivers

• Licensing and royalties — Guaranteed minimum royalties recognized when the license term begins plus royalties that vary with licensee sales; management states license/royalty revenue carries a much higher gross margin than other revenue and that revenue mix materially affects results.
• Product sales — Direct sales of inks, security paper, pressure-sensitive labels and ink-jet printing systems, recognized at shipment, to licensees and their authorized printers.
• Technical services — Fees for technical services to licensees, recognized when the service is rendered; revenue varies directly with units of service provided.
• Two major customers — Revenue from two major customers, direct and through their third-party licensed printers, was approximately 80% of 2025 revenue; one license expires in 2028 with guaranteed minimums historically met, the other in 2027.

Recent performance

Annual revenue fell from $2.1M in 2024 to $1.5M in 2025, with a net loss of $154,900 (diluted EPS -$0.014) versus a $2.7M loss in 2024. Operating cash flow was positive at $713,900 in 2025. Quarterly revenue was $385,800 in the September 2025 quarter, $269,000 in December 2025, $389,700 in March 2026 and $961,012 in June 2026. At June 30, 2026 the company reported total assets of $16.0M, total liabilities of $1.6M, shareholders' equity of $14.4M and cash and equivalents of $10.7M.

Strategy

Management states that fixed cost reductions beyond those already achieved may not be achievable, so results depend on revenue levels and revenue mix. It points to new revenue sources potentially including acquired businesses, and on May 18, 2026 acquired substantially all assets of Polymeric U.S., Inc. for total consideration of $2,650,000 — $1,900,000 in cash (subject to adjustments), assumed liabilities, and 500,000 shares of common stock — with $1,750,000 delivered at closing after a $150,000 holdback. Polymeric's operations consist primarily of manufacturing and selling screens and digital inks, and management expects the deal to expand product offerings, manufacturing capabilities, customer relationships and geographic footprint. The company also says it continues transitioning toward 'green' printing inks, which were approximately 35.3% of ink sales in 2025 versus 38.3% in 2024.

Risks

• Customer concentration — Two major customers accounted for roughly 80% of 2025 revenue and 93% of net accounts receivable at December 31, 2025.
• License expiry — One major license agreement expires in 2027 and another in 2028, with no assurance they continue on the same or more favorable terms.
• Revenue volatility — Management states revenue amounts and mix among license, product and service sources are subject to substantial fluctuation and small customer numbers amplify the effect of changes at any one customer.
• Limited resources for new business — Management says any significant cash flow improvement depends on new revenue from traditional or acquired sources, and the resources it can devote to marketing, acquisition and R&D activities are limited.

Outlook

Management says operating results are substantially dependent on revenue levels and that fixed cost reductions beyond those already achieved may not be achievable. It identifies acquired businesses as a potential new revenue source, and the Polymeric acquisition closed in May 2026 with management expecting it to expand product offerings, manufacturing capabilities, customer relationships and geographic footprint. Because revenue and mix are subject to substantial fluctuation and two customers dominate revenue, results depend heavily on those licensees' product development, marketing and production decisions.