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

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

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

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes þ No ¨

Indicate by check mark 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.

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 ~~Exchange~~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 þ

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable ~~date. 58,616,716~~date: 60,324,698 shares of common stock, par value $0.01, as of November ~~1, 2017~~8, 2019.


	Three Months ended September 30						Nine Months ended September 30						Three Months ended September 30,					Nine Months ended September 30,
	2017			2016			2017			2016			2019		2018			2019			2018

Revenues
Licenses, royalties and fees	$	178,200		$	170,300		$	468,900		$	381,800		$	189,400	$	175,200		$	571,900		$	2,005,700
Product and other sales		224,200			373,400			634,500			648,100			448,100		386,200			991,100			854,800
		402,400			543,700			1,103,400			1,029,900			637,500		561,400			1,563,000			2,860,500

Cost of revenues
Licenses, royalties and fees		23,300			36,500			71,100			73,000			41,400		35,100			98,200			84,300
Product and other sales		82,300			156,900			248,600			275,200			166,600		137,900			380,300			323,500
		105,600			193,400			319,700			348,200			208,000		173,000			478,500			407,800
Gross profit		296,800			350,300			783,700			681,700			429,500		388,400			1,084,500			2,452,700

Operating expenses
Research and development		36,300			33,700			109,200			103,700			45,200		38,100			122,600			111,300
Sales and marketing		67,200			72,800			187,900			176,700			81,000		74,600			224,200			313,200
General and administrative		80,400			69,900			240,000			224,200			84,200		73,400			265,200			277,600
		183,900			176,400			537,100			504,600			210,400		186,100			612,000			702,100
Net income from operations		112,900			173,900			246,600			177,100			219,100		202,300			472,500			1,750,600

Other income (expenses)
Interest income		200			–			200			–			4,600		700			7,200			1,400
Interest expense, bank charges and accretion of interest		(3,300	)		(3,300	)		(22,600	)		(10,100	)
Interest expense and bank charges													(2,600	)	(2,600	)		(8,000	)		(8,300	)
		(3,100	)		(3,300	)		(22,400	)		(10,100	)		2,000		(1,900	)		(800	)		(6,900	)
Net income before income taxes													221,100		200,400			471,700			1,743,700
Income taxes													14,300		199,300			30,600			199,300
Net income	$	109,800		$	170,600		$	224,200		$	167,000		$	206,800	$	1,100		$	441,100		$	1,544,400

Basic and diluted net income per common share	$	.00		$	.00		$	.00		$	.00		$	.00	$	.00		$	.01		$	.03

Weighted average common shares outstanding
Basic		58,599,016			58,599,016			58,599,016			58,599,016			59,614,698		58,616,716			58,949,377			58,616,716
Diluted		58,896,464			58,599,655			58,891,635			58,600,384			59,990,371		59,012,626			59,322,141			58,977,284


		September 30			December 31				September 30,				December 31,
		2017			2016				2019				2018
		(unaudited)			(audited)				(unaudited)				(audited)
*Assets*	*Assets*							*Assets*
Current assets
Cash		$	362,800		$	199,100			$	798,000			$	400,800
Accounts receivable less $5,000 allowance for doubtful accounts			197,900			243,400				834,500				579,000
Inventory			111,800			70,900				161,000				133,500
Prepaid and other			21,500			29,600				81,100				43,600
Total current assets			694,000			543,000				1,874,600				1,156,900

Fixed assets
Leasehold improvements			19,700			19,700				19,700				19,700
Furniture, fixtures and equipment			183,200			178,300				185,800				185,400
			202,900			198,000				205,500				205,100
Less: accumulated depreciation and amortization			188,400			183,000				198,700				197,600
			14,500			15,000				6,800				7,500
Other assets
Long-term receivables									1,070,700				1,352,200
Operating lease right of use - building									212,000				–
									1,282,700				1,352,200
Total assets		$	708,500		$	558,000			$	3,164,100			$	2,516,600

*Liabilities and Stockholders' Equity (Deficiency)*
*Liabilities and Stockholders' Equity*							*Liabilities and Stockholders' Equity*

Current liabilities
Demand loans		$	–		$	10,000
Convertible debentures			128,300			128,300			$	97,900			$	128,300
Accounts payable			43,800			33,100				41,400				16,500
Accrued expenses			396,500			459,900				202,200				163,000
Deferred revenue			82,100			106,300
Income taxes									37,500				38,600
Operating lease liability, current									41,000				–
Total current liabilities			650,700			737,600				420,000				346,400

Stockholders' equity (deficiency)
Other liabilities
Accrued expenses, non-current									75,000				94,700
Deferred income taxes									47,600				108,800
Operating lease liability, non-current									171,000				–
									293,600				203,500

Stockholders' equity
Common stock, $0.01 par value
Authorized – 75,000,000 shares
Issued and outstanding – 58,599,016 shares			586,000			586,000
Issued and outstanding
2019 – 60,324, 698 shares; 2018 – 58,616,716 shares									603,300				586,200
Paid-in capital			12,439,800			12,426,600				12,465,600				12,440,000
Accumulated deficit			(12,968,000	)		(13,192,200	)			(10,618,400	)			(11,059,500	)
Total stockholders' equity (deficiency)			57,800			(179,600	)
Total liabilities and stockholders' equity (deficiency)		$	708,500		$	558,000
Total stockholders' equity									2,450,500				1,966,700
Total liabilities and stockholders' equity								$	3,164,100			$	2,516,600


	Nine Months ended September 30							Nine Months ended September 30,
	2017			2016				2019				2018
Operating Activities
Net income	$	224,200		$	167,000			$	441,100			$	1,544,400
Adjustments to reconcile net income to net cash provided by operating activities
Adjustments to reconcile net income to net cash provided by (used in) operating activities
Depreciation and amortization		5,400			5,500				2,900				5,300
Accretion of interest – convertible debentures		13,200			500
Deferred income taxes								(61,200	)			106,000
Other assets								69,500				(1,423,800	)
Other liabilities								192,300				99,600
Cumulative effect of accounting change								–				96,100
		242,800			173,000				644,600				427,600

(Increase) decrease in assets
Increase in assets
Accounts receivable		45,500			(159,800	)			(255,500	)			(308,000	)
Inventory		(40,900	)		(36,700	)			(27,500	)			(20,100	)
Prepaid and other		8,100			10,700				(37,500	)			(8,000	)
Increase (decrease) in liabilities
Accounts payable and accrued expenses		(52,700	)		75,600				76,400				(159,000	)
Income taxes								(1,100	)			93,300
Deferred revenue		(24,200	)		(22,200	)			–				(99,400	)
		(64,200	)		(132,400	)			(245,200	)			(501,200	)
Net cash provided by operating activities		178,600			40,600
Net cash provided by (used in) operating activities								399,400				(73,600	)

Investment Activities
Additions to fixed assets		(4,900	)		(1,400	)			(2,200	)			(500	)
Net cash used in investing activities		(4,900	)		(1,400	)			(2,200	)			(500	)

Financing Activities
Repayment of demand loans		(10,000	)		(13,500	)
Net cash used in financing activities		(10,000	)		(13,500	)

Increase in cash		163,700			25,700
Increase (decrease) in cash								397,200				(74,100	)
Cash at beginning of year		199,100			11,400				400,800				360,400
Cash at end of period	$	362,800		$	37,100			$	798,000			$	286,300

Supplemental Disclosure of Non-Cash Investing and Financing Activities
Operating lease right of use – building							$	241,100			$	–
Operating lease liability							$	(241,100	)		$	–
Accumulated depreciation and amortization							$	1,800			$	–
Furniture, fixtures and equipment							$	(1,800	)		$	–
Convertible debentures							$	30,400			$	–
Accrued expenses							$	12,300			$	–
Common stock							$	(17,100	)		$	–
Paid-in capital							$	(25,600	)		$	–

For the Periods December 31, 2018 through September 30, 2019 and December 31, 2017 through September 30, 2018

The accompanying unaudited condensed financial statements have been prepared by Nocopi Technologies, Inc. (the “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 the summary of Accounting Policies included in ~~the~~our Company's ~~2016~~2018 Annual Report on Form 10-K. 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 ~~the~~our Company believes that the accompanying disclosures are adequate to make the information presented not misleading. The Notes to Financial Statements included in the ~~2016~~2018 Annual Report on Form 10-K should be read in conjunction with the accompanying interim financial statements. The interim operating results for the three ~~months~~ and nine months ended September 30, ~~2017~~2019 may not be necessarily indicative of the operating results expected for the full year.

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

~~Since its inception,~~On January 1, 2018, our Company adopted ASU 214-09,Revenue from Contracts with Customers (“Topic 606”), using the modified retrospective method. Results for periods beginning on or after January 1, 2018 are presented under Topic 606; however, prior period amounts are not adjusted and continue to be reported in accordance with Topic 605,Revenue Recognition, which was in effect for those periods.

Our Company ~~has incurred significant losses~~recorded a decrease to the opening balance of the accumulated deficit of $96,100 and a corresponding charge to deferred revenue as of ~~September 30, 2017, had accumulated losses~~January 1, 2018 due to the cumulative impact of ~~$12,968,000. For~~ the ~~nine months ended September 30, 2017,~~adoption of Topic 606. The disclosure of disaggregated revenue is disclosed in Note 10.

The adoption of the ~~Company had net income~~new guidance affected our recognition of revenue from ~~operations~~licenses and royalties. Under our previous accounting practice, we recognized revenue from licenses and royalties on a straight-line basis over the term of ~~$246,600. At September 30, 2017,~~ the ~~Company had positive working capital~~related license agreement. As a result of ~~$43,300~~our adoption of the new guidance, we will recognize revenue from licensees and ~~stockholders’ equity~~royalties at a point in time when the term begins.

During the second quarter of ~~$57,800. For~~2018, we negotiated an amendment to a license agreement with a licensee that, in addition to expanding the technologies that the licensee is permitted to market, provides for a four year ~~ended December 31, 2016,~~extension to the ~~Company’s net income from operations was $271,800. The Company, which~~license agreement that contains guaranteed royalties payable in installments over the term of the amendment to the license agreement.Since the performance obligation is ~~substantially dependent on its licensees~~ to ~~generate licensing revenues, may incur operating losses and experience negative cash flow in~~grant the ~~future. Sustaining profitability and positive cash flow depends on~~license for the ~~Company’s ability to maintain~~use of certain patented ink technology as it exists at the ~~increases in revenues and gross profits~~time that it ~~realized~~is granted, the promise to grant the license is a performance obligation satisfied at a point in ~~2016~~time in accordance with Topic 606.In accordance with Topic 606, we recorded $1,521,700 net of imputed interest of licenses, royalties and ~~through~~fees and $106,500 of selling expenses in the first nine months of ~~2017 from its traditional business. There can be no assurances that~~2018 related to the ~~Company will be able~~amendment to ~~generate sufficient revenues~~the license agreement. The related receivable and ~~gross profits to sustain profitability~~payable are recorded as other assets and ~~positive cash flow in~~other liabilities on the ~~future.~~balance sheet.

~~Receipt of funds~~The change in ~~earlier periods from investors and from demand loan holders have allowed~~accumulated deficit on our Balance Sheet at September 30, 2018, including the ~~Company to remain in operation through the current date. Management~~aggregate impact of the Company believes that it may need additional capital if the Company is unable to at least maintain the revenue level and profits achieved during 2016 and the first nine months of 2017. There can be no assurances that the Company will be successfulchange in ~~obtaining sufficient additional capital, if needed, or if it does, that the additional capital will enable the Company to impact its revenues so~~accounting principles which was effective on January 1, 2018, was as to have a material positive effect on the Company’s operations and cash flow. The Company believes that without additional capital, whether in the form of debt, equity or both, it may be forced to cease operations at an undetermined future date.follows:

~~The~~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 September 30, ~~2017, the~~2019, our Company did not have an active stock option plan. There was no unrecognized portion of expense related to stock option grants at September 30, ~~2017.~~2019.

~~During~~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 ~~third quarter~~assets of ~~2017, the~~our Company ~~repaid the remaining $10,000 principal balance of an unsecured loan from an individual~~ and at September 30, 2017 had no demand loans outstanding. During the nine months ended September 30, 2016, the Company repaid the remaining $13,500 principal balance of an unsecured loan from a second individual. The loans borebears 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 ~~rate~~review and quiet period. There have been no borrowings under the line of ~~8%.~~credit since its inception.

At September 30, ~~2017, the~~2019, our Company had convertible debentures totaling ~~$128,300~~$97,900 outstanding, of which ~~$95,000 were due during the third quarter of 2017 and $33,300~~ are due during the third quarter of ~~2018.~~2020. The convertible debentures bear interest at 7%. During the third quarter of 2019, our Company’s Board of Directors approved and the holders of $97,900 of the $128,300 of convertible debentures previously outstanding agreed to extend the maturity dates of those convertible debentures for one year to the third quarter of 2020 with no change in the terms or conditions of the debentures. At the option of the lender, the debentures and accrued interest are convertible in whole or part into common stock of ~~the~~our Company at $0.025 per share. During the ~~first~~third quarter of ~~2017, the Company’s Board of Directors approved and~~2019, the holders of ~~$33,300~~approximately $30,400 of previously outstanding convertible debentures ~~that had matured during the third quarter~~elected to convert those debentures plus approximately $12,300 of 2016, one of which is held by a Director of the Company, accepted an offer of extension whereby the maturity dates of the convertible debentures are extended for two years and the conversion rate of the debentures and accrued interest into ~~Common Stock~~1,707,982 shares of ~~the Company is reduced from $0.05 to $0.025. In accordance with FASB ASC 470, this modification~~restricted stock of the convertible debentures was recorded as a debt discount to the notes payable of approximately $13,200 with an offsetting credit to additional-paid in capital. In the three months ended March 31, 2017, the entire $13,200 was accreted through interest expense.our Company.

Early in the fourth quarter of 2017, the holders of $95,000 of convertible debentures agreed to extend the maturity dates of those convertible debentures for one year with no change in the terms or conditions of the debentures.

~~The~~Our Company also granted warrants in earlier periods to purchase 691,365 shares of ~~the~~our Company’s common stock at $0.02 per share to the holders of the debentures. The warrants are exercisable two years after issuance and expire seven years after issuance. The fair value of the warrants 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 ~~the~~our Company determined that the warrants were an equity instrument in accordance with FASB ASC 815. The debt discount related to the warrant issuances has been accreted through interest expense over the term of the notes payable. For the three months ended September 30, 2017 and September 30, 2016, $0 was accreted through interest expense. For the nine months ended September 30, 2017 and September 30, 2016, $0 and approximately $500, respectively, was accreted through interest expense.

The following table summarizes ~~all~~our Company’s warrant ~~activity~~position at September 30, 2019 and December 31, 2018:

The aggregate intrinsic value of warrants outstanding and exercisable as of September 30, 2019 was approximately $12,100. The aggregate intrinsic value is calculated as the difference between the exercise price of the ~~Company since December 31, 2016:~~

~~Other income (expenses) in~~underlying warrants and the ~~three months and nine months ended~~closing stock price of $0.0375 for our Company’s common stock on September 30, 2017 and September 30, 2016 includes interest on unsecured loans from two individuals and on convertible debentures held by nine investors. Also included in other income (expenses) is accretion of debt discounts in the nine months ended September 30, 2017 related to the extension of the maturity dates of $33,300 of convertible debentures.2019.

Other income (expenses) for the three and nine months ended September 30, 2019 and 2018 includes interest on convertible debentures held by nine investors and interest earned on invested funds.

There is no provision for federal income taxes for the three ~~months~~ and nine months ended September 30, ~~2017~~2019 and September 30, ~~2016~~2018 due to the availability of net operating loss carryforwards. ~~The~~Our Company has ~~created~~established a valuation allowance for the entire amount of ~~such benefits.~~benefits resulting from our Company’s net operating loss carryforwards because our Company has determined that the realization of the net deferred tax asset is not assured.

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

There was no change in unrecognized tax benefits during the period ended September 30, ~~2017~~2019 and there was no accrual for uncertain tax positions as of September 30, ~~2017.~~2019.

Tax years from ~~2013~~2016 through ~~2016~~2018 remain subject to examination by U.S. federal and state jurisdictions.

During the nine months ended September 30, ~~2017 and September 30, 2016 the~~2018, our Company paid ~~$151,700 and $15,000, respectively,~~$235,400 to Michael A. Feinstein, M.D., ~~the~~our Company’s Chairman of the Board and Chief Executive Officer, representing ~~a portion~~the balance of previously deferred salary owed to him under an employment agreement with ~~the~~our Company. During ~~each of~~ the ~~nine~~five month ~~periods~~period ended ~~September 30, 2017 and September 30, 2016,~~May 31, 2018, Dr. Feinstein deferred ~~$63,800~~$35,400 of salary. AtThe deferred salary was fully repaid to Dr. Feinstein during 2018 and, at September 30, ~~2017, Dr. Feinstein~~2018, there was no remaining deferred salary owed ~~approximately $213,300 of salary deferred by~~to him. There iswas no interest payable on the deferred salary.

In accordance with FASB ASC 260,Earnings per Share, basic earnings ~~(loss)~~ per common share is computed using net earnings ~~(loss)~~ divided by the weighted average number of common shares outstanding for the periods presented. The computation of diluted earnings per common share involves the assumption that outstanding common shares are increased by shares issuable upon exercise of those ~~stock options and~~ warrants for which the market price exceeds the exercise price. The number of shares issuable upon the exercise of such ~~stock options and~~ warrants is decreased by shares that could have been purchased by ~~the~~our Company with related proceeds. For the three ~~months~~ and nine months ended September 30, ~~2017,~~2019, the number of incremental common shares resulting from the assumed conversion of warrants was ~~297,448~~375,673 and ~~292,619,~~372,764, respectively. For the three ~~months~~ and nine months ended September 30, ~~2016,~~2018, the number of incremental common shares resulting from the assumed conversion of warrants was ~~639~~395,910 and ~~1,368,~~360,568, respectively.

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


	Three Months ended September 30						Nine Months ended September 30						Three Months ended September 30,						Nine Months ended September 30,
	2017			2016			2017			2016			2019			2018			2019			2018
Customer A		48	%		60	%		43	%		37	%		65	%		49	%		47	%		20	%
Customer B		27	%		21	%		25	%		22	%		14	%		22	%		21	%		64	%
Customer C		4	%		3	%		9	%		19	%		–			11	%		6	%		6	%

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


	September 30			December 31			September 30,			December 31,
	2017			2016			2019			2018
Customer A		20	%		26	%		13	%		6	%
Customer B		45	%		47	%		79	%		86	%
Customer C		8	%		5	%

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

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%. 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.

Future minimum lease payments under non-cancelable operating leases with initial or remaining terms of one year or more at September 30, 2019 are: $12,600 – 2019; $51,600 – 2020; $53,100 – 2021; $54,600 – 2022; $56,200 – 2023 and $18,900 – 2024.

~~The Company’s revenues by geographic region~~Total lease expense under operating leases for the three and nine months ended September 30, 2019 was $13,300 and $40,000, respectively. Total lease expense under operating leases for the three and nine months ended September 30, 2018 was $11,300 and $33,800, respectively.

~~In October 2017, a warrant holder exercised warrants to purchase 17,700 shares of common stock of the Company at exercise prices ranging from $0.01 to $0.03.~~

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

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 makeregarding:

~~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~~

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:

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.

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, ~~2016,~~2018, filed with the Securities and Exchange Commission on March ~~30, 2017.~~29, 2019.

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.

~~The~~Our Company’s revenues are derived from ~~(i)~~(a) royalties paid by licensees of ~~the Company’s technologies; (ii)~~our technologies, (b) fees for the provision of technical services to ~~licensees;~~licensees and ~~(iii)~~(c) from the direct sale of ~~(a)~~(i) products incorporating ~~the Company’s~~our technologies, such as inks, security paper and pressure sensitive labels, and ~~(b)~~(ii) equipment used to support the application of ~~the Company’s~~our technologies, such as ink-jet printing systems. Royalties consist of guaranteed minimum royalties payable by ~~the Company’s~~our licensees ~~and/or~~in certain cases and additional royalties which typically vary with the licensee’s sales or production of products incorporating the licensed technology. Technical services, in the form of on-site or telephone consultations by members of the Company’s technical staff, may be offered to licensees of the Company’s technologies. The consulting fees are billed at agreed upon per diem or hourly rates at the time the services are rendered. Service fees and sales revenues vary directly with the number of units of service or product provided.

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

~~Product sales are recognized (i) upon shipment of products; (ii) when the price is fixed or determinable; and (iii) when collectability is reasonably assured; and~~

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


	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.

~~The Company believes~~We believe that, as fixed cost reductions beyond those ~~it has~~we have achieved in recent years may not be achievable, ~~its~~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 ~~amounts~~amount of ~~the~~our Company’s revenues and the mix among the various sources of revenue are subject to substantial fluctuation. ~~The Company has~~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 ~~the~~our Company’s total revenue, ~~and on its~~ 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 ~~the~~our Company agrees to revise such terms, revenues from the customer may be affected. ~~The addition of a substantial new customer or the loss of a substantial existing customer may also have a substantial effect on the Company’s total revenue, revenue mix and operating results.~~

Revenues for the third quarter of ~~2017~~2019 were ~~$402,400~~$637,500 compared to ~~$543,700~~$561,400 in the third quarter of ~~2016, a decrease~~2018, an increase of ~~$141,300,~~$76,100, or approximately ~~26%~~14%. Licenses, royalties and fees increased by ~~$7,900,~~$14,200, or approximately 5%8%, to ~~$178,200~~$189,400 in the third quarter of ~~2017~~2019 from ~~$170,300~~$175,200 in the third quarter of ~~2016.~~2018. The increase in licenses, royalties and fees in the third quarter of 2019 compared to the third quarter of 2018 is due primarily to higher royalties from five licensees offset in part by lower guaranteed licensing revenue ~~received from four licensees including one licensee added~~of approximately $100,000 in the ~~second half~~third quarter of ~~2016. There can be no assurances that the marketing and product development activities of the Company’s licensees or other businesses~~2019 from one licensee in the entertainment and toy products market as a result of the adoption of ASU 214-09,Revenue from Contracts with Customers (see below) in the second quarter of 2018. We cannot assure you that we will ~~produce sustained increases~~continue to obtain higher royalties on an ongoing basis from licensees in ~~revenues for~~ the ~~Company, nor can~~entertainment and toy products market, especially upon the ~~timing~~occurrence of ~~any potential revenue increases be predicted, particularly given the uncertain~~an economic ~~conditions being experienced worldwide.~~downturn or other unfavorable conditions.

Product and other sales ~~decreased~~increased by ~~$149,200,~~$61,900, or approximately ~~40%~~16%, to ~~$224,200~~$448,100 in the third quarter of ~~2017~~2019 from ~~$373,400~~$386,200 in the third quarter of ~~2016.~~2018. Sales of ink ~~decreased~~increased in the third quarter of ~~2017~~2019 compared to the third quarter of ~~2016~~2018 due primarily to ~~a decrease in the volume of~~higher ink ~~shipped in the third quarter of 2017~~shipments to a third party authorized printer used by one of ~~the~~our Company’s major licensees in the entertainment and toy products market ~~compared to the third quarter of 2016, along with~~offset in part by lower ink shipments to ~~the~~our Company’s licensees in the retail receipt and document fraud market. This new printer was appointed late in the second quarter of 2016 and, at that time, placed a significant amount of ink orders that were shipped in the third quarter of 2016. In 2017, this printer’s orders and shipments were more equally balanced between the second and third quarters. In the third quarter of ~~2017, the~~2019, our Company derived revenues of approximately ~~$344,900~~ $555,900 from ~~its~~our licensees and their authorized printers in the entertainment and toy products market compared to revenues of approximately ~~$490,100~~$485,700 in the third quarter of ~~2016.~~2018.

For the first nine months of ~~2017,~~2019, revenues were ~~$1,103,400,~~$1,563,000, representing ~~an increase~~a decrease of ~~$73,500,~~$1,297,500, or approximately ~~7% higher than~~45%, from revenues of ~~$1,029,900~~$2,860,500 in the first nine months of ~~2016. Licenses, royalties and fees of $468,900~~2018. Revenues in the first nine months of ~~2017 were $87,100, or approximately 23%~~2018 included, in accordance with ASU 214-09,Revenue from Contracts with Customers (“Topic 606”), ~~higher than~~revenue of $1,521,700 representing the present value of guaranteed royalty payments that are payable over a four-year period beginning in the third quarter of 2019 as a result of an amendment to a license agreement with a licensee that, in addition to expanding the technologies that our licensee is permitted to market, provides for a four year extension to the license agreement beginning in July 2019.Since the performance obligation is to grant the license for the use of certain patented ink technology as it exists at the time that it is granted, the promise to grant the license is a performance obligation satisfied at a point in time in accordance with Topic 606.Previously, we recognized revenue from licenses and royalties on a straight-line basis over the term of the related license agreement. Licenses, royalties and fees ~~of $381,800~~decreased by $1,433,800, or approximately 71%, to $571,900 in the first nine months of ~~2016. The increase in licenses, royalties and fees is due primarily to higher licensing revenue received~~2019 from ~~four licensees including one licensee added in the second half of 2016.~~

~~Product and other sales decreased by $13,600, or approximately 2%, to $634,500~~$2,005,700 in the first nine months of ~~2017 from $648,100~~2018. The decrease in licenses, royalties and fees in the first nine months of ~~2016. Sales of ink decreased in the first nine months of 2017~~2019 compared to the first nine months of ~~2016~~2018 is due primarily to ~~lower~~the adoption of Topic 606 described above. See “Plan of Operation, Liquidity and Capital Resources” and “Note 2 to our Condensed Financial Statements” for comparative information on the impact of the adoption of Topic 606 to our Company’s condensed financial statements.

Product and other sales increased by $136,300, or approximately 16%, to $991,100 in the first nine months of 2019 from $854,800 in the first nine months of 2018. Sales of ink increased in the nine months of 2019 compared to the first nine of 2018 due primarily to higher ink shipments to the third party authorized printer used by one of our Company’s major licensees in the entertainment and toy products market and higher ink shipments to our Company’s licensees in the retail receipt and document fraud market. ~~The~~Our Company derived revenues of approximately ~~$932,600~~$1,327,900 from licensees and their authorized printers in the entertainment and toy products market in the first nine months of ~~2017~~2019 compared to revenues of approximately ~~$883,800~~$2,661,700 in the first nine months of ~~2016.~~2018. The decrease in revenues from our licensees and their authorized printers in the entertainment and toy products market in the first nine months of 2019 compared to the first nine months of 2018 is due primarily to the adoption of Topic 606.

~~The~~Our Company’s gross profit ~~decreased~~increased to ~~$296,800~~$429,500 in the third quarter of ~~2017,~~2019, or approximately ~~74%~~67% of revenues, from ~~$350,300~~$388,400 in the third quarter of ~~2016,~~2018 or approximately ~~64%~~69% of revenues. Licenses, royalties and fees have historically carried a higher gross profit than product and other sales. Such other sales generally consist of supplies or other manufactured products which incorporate ~~the~~our Company’s technologies or equipment used to support the application of its technologies. These items (except for inks which are manufactured by ~~the~~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. The ~~lower~~higher gross profit in the third quarter of ~~2017~~2019 compared to the third quarter of ~~2016~~2018 results primarily ~~from lower gross revenues from product and other sales offset in part by higher gross revenues from licenses, royalties and fees in the third quarter of 2017 compared to the third quarter of 2016.~~

For the first nine months of 2017, gross profit was $783,700, or approximately 71% of revenues, compared to $681,700, or approximately 66% of revenues, in the first nine months of 2016. The higher gross profit in the first nine months of 2017 compared to the first nine months of 2016 results from higher gross revenues from licenses, royalties and fees ~~along with a~~and product and other sales in the third quarter of 2019 compared to the third quarter of 2018.

For the first nine months of 2019, gross profit was $1,084,500, or approximately 69% of revenues, compared to $2,452,700, or approximately 86% of revenues in 2018. The lower gross profit in the first nine months of 2019 compared to the first nine months of 2018 results primarily from lower licenses, royalties and fees due to the adoption of Topic 606 in 2018 offset in part by higher gross ~~profit~~revenues from product and other sales in the first nine months of ~~2017~~2019 compared to the first nine months of ~~2016 resulting from a favorable mix of products sold in the first nine months of 2017 compared to the first nine months of 2016.~~2018.

As the variable component of cost of revenues related to licenses, royalties and fees is a low percentage of these revenues and the fixed component is not substantial, period to period changes in revenues from licenses, royalties and fees can significantly affect both the gross profit from licenses, royalties and fees as well as overall gross profit. ~~Primarily due~~The gross profit from licenses, royalties and fees decreased to ~~higher~~approximately 78% in the third quarter of 2019 compared to approximately 80% in the third quarter of 2018 and to approximately 83% of revenues from licenses, royalties and fees in the ~~third quarter~~first nine months of ~~2017 compared to the third quarter of 2016, the gross profit from licenses, royalties and fees increased to approximately 87% of revenues in the third quarter of 2017~~2019 from approximately ~~79% of revenues in the third quarter of 2016. The gross profit from licenses, royalties and fees was approximately 85%~~96% in the first nine months of ~~2017 compared to approximately 81% in first nine months of 2017 resulting from the same factors as the third quarter of 2017 compared to the third quarter of 2016.~~2018.

The gross profit, expressed as a percentage of revenues, of product and other sales is dependent on both the overall sales volumes of product and other sales and on the mix of the specific goods produced and/or sold. The gross profit from product and other sales ~~increased~~decreased to approximately 63% of revenues in the third quarter of ~~2017~~2019 compared to approximately ~~58%~~64% of revenues in the third quarter of ~~2016. This increase in~~2018. For the first nine months of 2019 and 2018, the gross profit, expressed as a percentage of revenues, was due primarily to a change in mix of products sold during the third quarter of 2017 compared to the third quarter of 2016. For the first nine months of 2017, the gross profit, expressed as a percentage of revenues, increased to approximately ~~61%~~62% of revenues from product and other sales compared to approximately 58% of revenues from product and other sales in the first nine months of 2016 resulting from the same factors as the third quarter of 2017 compared to the third quarter of 2016.sales.

Research and development expenses of ~~$36,300~~$45,200 and $122,600 in the third quarter and first nine months of 2019, respectively, were comparable to $38,100 and $111,300 in the third quarter and first nine months of 2018, respectively.

Sales and marketing expenses increased in the third quarter of ~~2017~~2019 to $81,000 from $74,600 in the third quarter of 2018. Sales and ~~$109,200~~marketing expenses decreased in the first nine months of ~~2017 were comparable~~2019 to ~~$33,700 in the third quarter of 2016 and $103,700~~$224,200 from $313,200 in the first nine months of ~~2016.~~

~~Sales and marketing expenses decreased to $67,200~~2018. The increase in the third quarter of ~~2017 from $72,800~~2019 compared to the third quarter of 2018 is due primarily to higher commission expense on the higher level of revenues in the third quarter of ~~2016~~2019 compared to the third quarter of 2018. The decrease in the first nine months of 2019 compared to the first nine months of 2018 is due primarily to lower commission expense on the lower level of sales in the ~~third quarter of 2017 compared to the third quarter of 2016. Sales and marketing expenses increased to $187,900 in the~~ first nine months of ~~2017 compared to $176,700 the first nine months of 2016 due primarily to higher commission expense on the higher level of sales in the first nine months of 2017~~2019 compared to the first nine months of ~~2016.~~2018 related to the additional revenue generated in 2018 as a result of the adoption of Topic 606 in the second quarter of 2018.

General and administrative expenses increased in the third quarter of 2019 to $84,200 from $73,400 in the third quarter of 2018. General and administrative expenses decreased in the first nine months of ~~2017~~2019 to ~~$80,400 and $240,000, respectively,~~$265,200 from ~~$69,900 and $224,200~~$277,600 in the ~~third quarter and~~ first nine months of ~~2016, respectively,~~2018. The increase in third quarter of 2019 compared to the third quarter of 2018 is due primarily to higher employment ~~costs, insurance~~and public company expenses ~~and fees offset~~ in ~~part by~~the third quarter of 2019 compared to the third quarter of 2018. The decrease in the first nine months of 2019 compared to the first nine months of 2018 is due primarily to lower patent related expenses and lower legal expenses in the ~~third quarter and~~ first nine months of ~~2017~~2019 compared to the ~~third quarter and~~ first nine months of ~~2016.~~2018.

Other income (expenses) in the third quarter and first nine months of ~~2017~~2019 and ~~2016~~2018 included interest ~~on unsecured loans from two individuals and~~ on convertible debentures held by nine ~~investors. Also included~~investors and interest earned on invested funds.

Income taxes in ~~other~~the third quarter and first nine months of 2019 and 2018 resulted from limitations placed on income ~~(expenses) is accretion~~tax net operating loss deductions by the Commonwealth of ~~debt discounts~~Pennsylvania.

The net income of $206,800 in the third quarter of 2018 compared to net income of $1,100 in the third quarter of 2018 resulted primarily from higher gross profit on a higher level of revenues and lower Pennsylvania income taxes in the third quarter of 2019 compared to the third quarter of 2018 offset in part by higher overhead expenses in the third quarter of 2019 compared to the third quarter of 2018. The net income of $441,100 in the first nine months of ~~2017 related~~2019 compared to ~~the extension~~net income of the maturity dates of $33,300 of convertible debentures. Other income (expenses) decreased to $3,100 in the third quarter of 2017 from $3,300 in the third quarter of 2016. Other income (expenses) increased to $22,400$1,544,400 in the first nine months of 2017 from $10,100 in the first nine months 2016. This increase is due primarily to accretion of debt discounts in the first nine months of 2017 related to the extension of the maturity dates of $33,300 of convertible debentures in the first quarter of 2017.

~~The net income of $109,800 in the third quarter of 2017 compared to the net income of $170,600 in the third quarter of 2016~~2018 resulted primarily from a lower gross profit on a lower level of revenues in the ~~third quarter of 2017 compared to the third quarter of 2016 along with higher operating expenses in the third quarter of 2017 compared to the third quarter of 2016. The net income of $224,200 in the~~ first nine months of ~~2017 compared to the net income of $167,000 in the first nine months of 2016 resulted primarily from a higher gross profit on a higher level of revenues in the first nine months of 2017~~2019 compared to the first nine months of ~~2016~~2018 related to the adoption of Topic 606 in the second quarter of 2018 offset in part by ~~higher operating~~lower overhead expenses and ~~accretion of debt discounts~~lower Pennsylvania income taxes in the first nine months of ~~2017~~2019 compared to the first nine months of ~~2016.~~2018.

During the first nine months of ~~2017, the~~2019, our Company’s cash increased to ~~$362,800~~$798,000 at September 30, ~~2017~~2019 from ~~$199,100~~$400,800 at December 31, ~~2016.~~2018. During the first nine months of ~~2017, the~~2018, our Company generated ~~$178,600~~$399,400 from its operating activities and used ~~$4,900~~$2,200 for capital equipment ~~and repaid $10,000 to an individual lender.~~purchases.

~~During~~In the first nine months of ~~2017, the~~2019, our Company’s revenues ~~increased~~decreased approximately ~~7% primarily as a result of higher licensing and royalty revenues~~45% to $1,563,000 from new and existing licensees. The Company’s first nine months of 2017 total overhead expenses increased compared to the 2016 first nine months total overhead expenses and the Company’s interest expense increased related to accretion of interest$2,860,500 in the first nine months of ~~2017~~2018 of which an increase of 17%, or $224,200, is attributable to an increase in revenues from historical operations in the first nine months of 2019 compared to the first nine months of ~~2016. As~~2018 offset by a ~~result~~decrease of ~~these factors,~~$1,521,700, or 62%, that is attributable the ~~Company recorded a higher net profit~~reduction of our Company’s revenues in the first nine months of ~~2017~~2019 compared to the first nine months of ~~2016. The~~2018 as a result of the adoption of Topic 606 in the second quarter of 2018.

Our Company’s total overhead expenses, interest expense and income tax expense decreased in the first nine months of 2019 compared to the first nine months of 2018. As a result of these factors, our Company generated net income of $441,100 in the first nine months of 2019 compared to $1,544,400 in the first nine months of 2018. Our Company had positive operating cash flow of ~~$178,600~~$399,400 during the first nine months of ~~2017. At~~2019 and at September 30, ~~2017, the Company~~2019, had positive working capital of ~~$43,300~~$1,454,600 and stockholders’ equity of ~~$57,800.~~$2,450,500. For the full year of ~~2016, the~~2018, our Company had net income of ~~$258,500~~$1,655,400 and had positive operating cash flow of ~~$202,600.~~$40,900. At December 31, ~~2016, the~~2018, our Company had ~~negative~~positive working capital of ~~$194,600~~$810,500 and ~~a $179,600~~ stockholders’ ~~deficiency.~~equity of $1,966,700.

~~Through September 30, 2017, the~~Our Company ~~repaid all $63,000 of short-term loans that had been outstanding at January 1, 2015. In 2015, the Company repaid $10,000~~has $97,900 of convertible debentures ~~and, in 2017, extended~~outstanding that are due during the third quarter of 2020. During the third quarter of 2019, holders of $97,900 of $128,300 of the convertible debentures previously outstanding agreed to extend the maturity dates of ~~$33,300 of~~the convertible debentures ~~from 2016 to 2018 and extended the maturity dates of $95,000 of convertible debentures from the third quarter of 2017~~for one year to the third quarter of ~~2018. Borrowings~~2020 with no change in the terms or conditions of the debentures.

In November 2018, our Company negotiated a $150,000 revolving line of credit (“Lineof 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 ~~sales~~bears interest at the bank’s prime rate for a period of ~~common stock in years prior~~one year and its prime rate plus 1.5% thereafter. The Line of Credit is subject to ~~January 1, 2015~~an annual review and quiet period. There have ~~allowed~~been no borrowings under the ~~Company~~Line of Credit since its inception. We may need to ~~remain in operation through 2016. There can be no assurances that the Company will be able to secure sufficient~~obtain additional ~~funding through investments or borrowings that will allow the Company to fund losses that it presently believes may be experienced~~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 ~~the Company is unable~~needed. We continue to maintain ~~revenue levels~~a cost containment program including curtailment, where possible, of discretionary research and ~~profits consistent with 2016~~development and ~~the first nine months of 2017. The Company believes that without additional investment, it may then be forced to cease operations at an undetermined date in the future.~~sales and marketing expenses.

~~The Company’s~~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 ~~the~~our Company has developed in the entertainment and toy products ~~market including~~market. This includes two licensees ~~with~~that have been marketing products incorporating our Company’s technologies since 2012. These two licensees maintain a significant presence in the entertainment and toy products market that have been marketing products incorporating the Company’s technologies since 2012 along with a licensee added in 2015 who has been marketing products incorporating the Company’s available technologies in certain international markets since 2016. These licensees in the entertainment and ~~toy products market~~ are well known and highly regarded participants in this market. ~~The Company believes~~We anticipate that ~~the~~these two licensees ~~that the Company has developed in the entertainment and toy products market~~ will expand their current offerings ~~incorporating the Company’s~~that incorporate our technologies ~~currently being marketed~~ and will introduce and market new products ~~incorporating~~that will incorporate our technologies available ~~technologies covered by the~~to them under their license agreements ~~that are not currently being marketed by them. The Company plans~~with our Company. We will continue to ~~continue developing~~develop various applications for these ~~licensees while expanding its~~licensees. We also plan to expand our licensee base in the entertainment and toy market. ~~The Company has~~We currently have additional licensees marketing or developing products incorporating ~~the Company’s~~our technologies in certain geographic and niche markets of the overall entertainment and toy products market. ~~The~~

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

~~The~~Our Company has received and ~~continues to~~may seek additional capital, in the form of debt, equity or both, to support ~~its~~our working capital ~~requirements. There can be no assurances~~requirementsand to provide funding for other business opportunities. We cannot assure you that ~~the Company~~we will be successful in raising additional capital, or that such additional capital, if obtained, will enable ~~the~~our Company to generate additional revenues and positive cash flow.

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

AsIn February 2016, the FASB issued ASU No. 2016-02,Leases (Topic 842) and subsequent related updates. The core principle of ~~September 30, 2017~~Topic 842 is that a lessee should recognize the assets and ~~for~~liabilities that arise from operating leases. Our Company adopted the standard effective January 1, 2019 under the optional transition method which allows the entity to apply the new lease standard at the adoption date and recognize a cumulative-effect adjustment, if any, to the opening balance of retained earnings in the period ~~then ended, there were no recently adopted accounting pronouncements that~~of adoption. The standard had a material ~~effect~~impact on the ~~Company’s financial statements.~~balance sheet (see Note 11).

~~In May 2014, the FASB~~As of September 30, 2019, there are no recently issued ~~ASU No. 2014-09,~~~~Revenue from Contracts with Customers (Topic 606)~~~~. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to~~accounting standards not yet adopted which ~~the entity expects to be entitled in exchange for those goods or services. This guidance will supersede current revenue recognition guidance which is effective for the Company~~would have a material effect on January 1, 2018. Under the new standard, the Company may be required to recognize revenue from license fees at the point in time when the license is granted as opposed to the recognition as earned over the license term which has been our ~~historical practice. The Company has not determined the method to be used in applying the amendments in this standard.~~Company’s financial statements.

Evaluation of Disclosure Controls and Procedures.~~The~~Our Company’s management, with the participation of ~~the~~our Company’s Principal Executive Officer and Principal Financial Officer, evaluated the effectiveness of ~~the~~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 September 30, ~~2017.~~2019. Based on this evaluation, ~~the~~our Company’s Principal Executive Officer and Principal Financial Officer concluded that, as of September 30, ~~2017 the~~2019, our Company’s disclosure controls and procedures were effective, in that they provide reasonable assurance that information required to be disclosed by ~~the~~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 ~~the~~our Company’s management, including ~~the~~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 September 30, ~~2017~~2019 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

No underwriters were utilized, and no commissions or fees were paid with respect to any of the above transactions. We relied on Section 4(a)(2) and/or Regulation D of the Securities Act of 1933, as amended, since the transactions did not involve any public offering.

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


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


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


	PAGE
Part I. FINANCIAL INFORMATION

Item 1. Financial Statements	1

Statements of Operations for Three Months and Nine Months Ended September 30, ~~2017~~2019 and September 30, ~~2016~~2018	1
Balance Sheets at September 30, ~~2017~~2019 and December 31, ~~2016~~2018	2
Statements of Cash Flows for Nine Months Ended September 30, ~~2017~~2019 and September 30, ~~2016~~2018	3
Statements of Stockholders’ Equity for Three Months and Nine Months ended September 30, 2019 and September 30, 2018	4
Notes to Financial Statements	45

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	810

Item 4. Controls and Procedures	1215

Part II. OTHER INFORMATION

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
	16
Item 6. Exhibits	1316

SIGNATURES	1417

EXHIBIT INDEX	1518


Accumulated deficit – January 1, 2018	$	(12,811,000	)
Net earnings		1,544,400
Cumulative effect of accounting change at January 1, 2018		96,100
Accumulated deficit – September 30, 2018	$	(11,170,500	)


					Weighted Average
	Number		Exercise		Exercise
	of Shares		Price		Price
Outstanding warrants -
December 31, 2018		691,365	$	0.02	$	0.02

Outstanding warrants -
September 30, 2019		691,365	$	0.02	$	0.02

Weighted average remaining
contractual life (years)		1.08

Exercisable warrants -
September 30, 2019		691,365	$	0.02	$	0.02


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


	Common stock				Paid-in		Accumulated
	Shares		Amount		Capital		Deficit			Total
Balance – December 31, 2018		58,616,716	$	586,200	$	12,440,000	$	(11,059,500	)	$	1,966,700

Net income								85,400			85,400
Balance – March 31, 2019		58,616,716		586,200		12,440,000		(10,974,100	)		2,052,100

Net income								148,900			148,900
Balance – June 30, 2019		58,616,716		586,200		12,440,000		(10,825,200	)		2,201,000

Issuance of common stock		1,707,982		17,100		25,600					42,700

Net income								206,800			206,800
Balance – September 30, 2019		60,324,698	$	603,300	$	12,465,600	$	(10,618,400	)	$	2,450,500


	Three months ended					Nine months ended
	September 30,					September 30,
	2019			2018		2019			2018
Current state taxes	$	21,100		$	93,300	$	91,800		$	93,300
Deferred state taxes		(6,800	)		106,000		(61,200	)		106,000
	$	14,300		$	199,300	$	30,600		$	199,300


	Operating Leases
Year ending December 31
2019	$	12,600
2020		51,600
2021		53,100
2022		54,600
2023		56,200
2024		18,900
Total lease payments		247,000
Less imputed interest		(35,000	)
Total	$	212,000


·	Expected operating results, such as revenue growth and earnings
·	Anticipated levels of capital expenditures for fiscal year 2019 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


· 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 report, and throughout Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations and in Part I, Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2016.	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 report, and throughout Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations and in Part I, Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2018.


Date		Security/Value
July 2019		Common Stock – 1,707,982 shares of common stock issued pursuant to exercise of convertible debentures with an exercise price of $0.025 per share.


Exhibit No.		Description of Exhibit		Location
4.1		~~31.1~~Form of Convertible Debenture Purchase Agreement and Exhibits		Incorporated by reference to the Company’s Annual Report on Form 10-K filed on September 11, 2015
4.2		Form of Letter Agreement re: Convertible Debenture Purchase Agreement Election		Filed herewith
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		~~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		~~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
101.INS		XBRL Instance Document
	Filed herewith
101.SCH		XBRL Taxonomy Extension Schema
	Filed herewith
101.CAL		XBRL Taxonomy Extension Calculation Linkbase
	Filed herewith
101.DEF		XBRL Taxonomy Extension Definition Linkbase
	Filed herewith
101.LAB		XBRL Taxonomy Extension Label Linkbase
	Filed herewith
101.PRE		XBRL Taxonomy Extension Presentation Linkbase		Filed herewith


		NOCOPI TECHNOLOGIES, INC.

DATE: November 13, ~~2017~~2019		/s/ Michael A. Feinstein, M.D.
		Michael A. Feinstein, M.D.
		Chairman of the Board, President & Chief Executive Officer

DATE: November 13, ~~2017~~2019		/s/ Rudolph A. Lutterschmidt
		Rudolph A. Lutterschmidt
		Vice President & Chief Financial Officer


	Three Months ended September 30				Nine Months ended September 30
	2017		2016		2017		2016
North America	$	181,800	$	184,900	$	493,600	$	411,300
South America		1,500		–		1,500		–
Europe		100		–		300		–
Asia		211,600		351,400		585,800		596,400
Australia		7,400		7,400		22,200		22,200
	$	402,400	$	543,700	$	1,103,400	$	1,029,900