Nocopi Technologies (NNUP) outlines $2.65M Polymeric ink business deal
Rhea-AI Filing Summary
Nocopi Technologies, Inc. has provided additional financial detail on its May 18, 2026 acquisition of substantially all assets of Polymeric U.S., Inc., an inks and coatings business now operated through wholly owned subsidiary Polymeric Nocopi LLC.
The aggregate purchase price was $2,650,000, including $1,900,000 in cash, the assumption of specified liabilities and 500,000 shares of Nocopi common stock, with $150,000 of cash held back for working-capital and indemnification adjustments.
Polymeric generated $5,323,161 in 2025 sales and a net loss of $431,114, but earned net income of $145,879 on sales of $1,307,472 for the three months ended March 31, 2026. Pro forma, the combined company would have recorded 2025 revenue of $6,816,961 and a net loss of $586,014.
Positive
- None.
Negative
- None.
Filing Explained
The filing adds acquisition financial statements and discloses a 266,668-share private issuance that could dilute existing holders if issued.
This Form 8-K/A adds the acquired business’s audited 2025 and 2024 statements, unaudited March 2026 statements, and unaudited pro forma information; it is an amendment to the completed acquisition disclosure, not a new closing.
Separately, the filing discloses a private issuance of
A private placement is a sale of securities to selected investors outside a public offering. If the shares are issued, they increase the total share count and reduce existing holders’ percentage ownership absent offsetting changes; the filing does not state that all of these shares have already been issued.
The pro forma figures remain illustrative: they are based on assumptions, are not necessarily the results or financial position that would have occurred, and the final purchase-price allocation may differ materially from the amounts shown.
The specified follow-up items are the
8-K Event Classification
Key Figures
Key Terms
unaudited pro forma condensed combined financial information financial
contingent consideration financial
Holdback Amount financial
sales-type lease financial
right-of-use assets financial
AI-generated analysis. How Rhea-AI works. Not financial advice.
FAQ
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM
(Amendment No. 1)
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of
Report (Date of earliest event reported):
Commission File Number:
| (Exact name of registrant as specified in its charter) |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
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(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Indicate by check mark whether the registrant is an emerging growth company as defined in in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
| Emerging growth company |
If an emerging growth company, indicate by check mark 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 Act. ☐
Introductory Note
On May 19, 2026, Nocopi Technologies, Inc., a Maryland corporation (the “Company”), filed a Current Report on Form 8-K (the “Original Form 8-K”) reporting that, on May 18, 2026, Polymeric Nocopi LLC, a wholly owned subsidiary of the Company, completed the acquisition (the “Acquisition”) of substantially all of the assets of Polymeric U.S., Inc. (“Polymeric”), relating to the business of manufacturing, developing, producing and commercializing specialized ink and coating solutions for industrial, digital and screen printing applications operating under the “Polymeric” trade name (the “Business”).
This Current Report on Form 8-K/A (the “Amendment”) amends the Original Form 8-K solely to include the financial statements of the Business and the pro forma financial information required by Items 9.01(a) and 9.01(b) of Form 8-K, respectively. Except as provided herein, the disclosures contained in the Original Form 8-K remain unchanged, and this Amendment should be read together with the Original Form 8-K, which provides a more complete description of the Acquisition.
The pro forma financial information included in this Amendment has been presented for informational purposes only, is based on various adjustments and assumptions and is not necessarily indicative of what the Company’s consolidated statement of operations or consolidated balance sheet would have been had the Acquisition been completed as of the dates indicated, nor is such information necessarily indicative of what the Company’s consolidated statement of operations or balance sheet will be for any future periods.
Item 9.01 Financial Statements and Exhibits
(a) Financial Statements of Business Acquired.
The historical audited financial statements of Polymeric U.S., Inc. as of and for the years ended December 31, 2025 and 2024, as well as the accompanying notes thereto, are filed hereto as Exhibit 99.1 and incorporated herein by reference.
The historical unaudited condensed financial statements of Polymeric U.S., Inc. as of March 31, 2026 and for the three months ended March 31, 2026 and 2025, as well as the accompanying notes thereto, are filed hereto as Exhibit 99.2 and incorporated herein by reference.
(b) Pro Forma Financial Information.
The unaudited pro forma condensed combined balance sheet of the Company as of March 31, 2026, the unaudited pro forma condensed combined statements of operations of the Company for the three months ended March 31, 2026 and for the year ended December 31, 2025, and the notes related thereto, are filed as Exhibit 99.3 hereto and incorporated herein by reference.
(d) Exhibits.
| Exhibit No. | Description of Exhibit | |
| 23.1 | Consent of Aprio, LLP, Independent Auditor. | |
| 99.1 | Audited Financial Statements of Polymeric U.S., Inc. as of and for the years ended December 31, 2025 and 2024. | |
| 99.2 | Unaudited Financial Statements of Polymeric U.S., Inc. as of and for the three months ended March 31, 2026 and 2025. | |
| 99.3 | Unaudited Pro Forma Condensed Combined Balance Sheet of the Company as of March 31, 2026 and Unaudited Pro Forma Condensed Combined Statements of Operations of the Company for the three months ended March 31, 2026 and for the year ended December 31, 2025. | |
| 104 | Cover Page Interactive Data File (the cover page XBRL tags are embedded within the inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| NOCOPI TECHNOLOGIES, INC. | ||
| Dated: July 31, 2026 | By: | /s/ Matthew C. Winger |
| Name: Matthew C. Winger | ||
| Title: Chief Executive Officer | ||
EXHIBIT 99.1
POLYMERIC U.S., INC.
FINANCIAL STATEMENTS
DECEMBER 31, 2025 AND 2024
POLYMERIC U.S., INC.
Contents
| Page | |
| Independent Auditors’ Report | 1 – 2 |
| Financial Statements: | |
| Balance Sheets | 3 – 4 |
| Statements of Operations | 5 |
| Statements of Stockholders’ Equity (Deficit) | 6 |
| Statements of Cash Flows | 7 |
| Notes to the Financial Statements | 8 – 20 |
Independent Auditors’ Report
The Board of Directors Polymeric U.S., Inc.
North Kansas City, Missouri
Opinion
We have audited the accompanying financial statements of Polymeric U.S., Inc., which comprise the balance sheets as of December 31, 2025 and 2024, and the related statements of operations, stockholders’ equity (deficit), and cash flows for the years then ended, and the related notes to the financial statements.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Polymeric U.S., Inc. as of December 31, 2025 and 2024, and the results of its operations and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of Polymeric U.S., Inc. and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Emphasis of Matter – Sale Transaction
As discussed in Note 15 to the financial statements, Polymeric U.S., Inc. entered into a sale transaction with Nocopi Technologies, Inc. on May 18, 2026. Our opinion is not modified with respect to this matter.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about Polymeric U.S., Inc.’s ability to continue as a going concern within one year after the date that the financial statements are available to be issued.
| 1 |
Independent Auditors’ Report
Auditors’ Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with generally accepted auditing standards, we:
| · | Exercise professional judgment and maintain professional skepticism throughout the audit. |
| · | Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts, and disclosures in the financial statements. |
| · | Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Polymeric U.S., Inc.’s internal control. Accordingly, no such opinion is expressed. |
| · | Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. |
| · | Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about Polymeric U.S., Inc.’s ability to continue as a going concern for a reasonable period of time. |
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.
Overland Park, Kansas
July 30, 2026
| 2 |
POLYMERIC U.S., INC.
Balance Sheets
December 31,
| 2025 | 2024 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 686,006 | $ | 281,831 | ||||
| Accounts receivable, net of allowance for credit losses | 374,476 | 645,447 | ||||||
| Other receivables | 124,442 | 211,169 | ||||||
| Inventories, net of allowance for obsolescence | 1,553,079 | 1,748,136 | ||||||
| Refundable income taxes | 29,086 | 9,162 | ||||||
| Total current assets | 2,767,089 | 2,895,745 | ||||||
| Property and equipment, at cost: | ||||||||
| Leasehold improvements | 58,012 | 58,012 | ||||||
| Machinery and equipment | 804,133 | 802,094 | ||||||
| Furniture and fixtures | 16,598 | 11,354 | ||||||
| 878,743 | 871,460 | |||||||
| Less accumulated depreciation and amortization | 802,557 | 703,997 | ||||||
| Net property and equipment | 76,186 | 167,463 | ||||||
| Other assets: | ||||||||
| Operating lease right-of-use assets, net of amortization | 184,628 | 204,761 | ||||||
| Intangible assets, net of amortization | 159,864 | 324,668 | ||||||
| Total other assets | 344,492 | 529,429 | ||||||
| Total assets | $ | 3,187,767 | $ | 3,592,637 | ||||
The accompanying notes are an integral part of these financial statements
| 3 |
POLYMERIC U.S., INC.
Balance Sheets
December 31,
| 2025 | 2024 | |||||||
| Liabilities and Stockholders' Equity (Deficit) | ||||||||
| Current liabilities: | ||||||||
| Current maturities of long-term debt | $ | 30,355 | $ | 27,900 | ||||
| Current maturities of notes payable to affiliate | — | 126,012 | ||||||
| Current maturities of long-term operating lease liabilities | 181,557 | 198,510 | ||||||
| Contingent consideration payable | 7,106 | — | ||||||
| Accounts payable | 104,906 | 209,747 | ||||||
| Accounts payable - affiliate | — | 25,000 | ||||||
| Accrued expenses | 22,282 | 10,269 | ||||||
| Total current liabilities | 346,206 | 597,438 | ||||||
| Long-term liabilities: | ||||||||
| Notes payable to affiliate, less current maturities | — | 4,506,042 | ||||||
| Accounts payable - affiliate, long-term | — | 104,023 | ||||||
| Contingent consideration payable, less current portion | — | 30,000 | ||||||
| Long-term debt, less current maturities | 33,025 | 63,380 | ||||||
| Long-term operating lease liabilities, less current maturities | 3,071 | 7,018 | ||||||
| Total long-term liabilities | 36,096 | 4,710,463 | ||||||
| Total liabilities | 382,302 | 5,307,901 | ||||||
| Stockholders' equity (deficit): | ||||||||
| Common stock, $.01 par value; 30,000 shares authorized; 1,200 and 1,031 shares issued and outstanding as of December 31, 2025 and 2024, respectively | 12 | 10 | ||||||
| Additional paid-in capital | 5,701,841 | 750,000 | ||||||
| Retained deficit | (2,896,388 | ) | (2,465,274 | ) | ||||
| Total stockholders' equity (deficit) | 2,805,465 | (1,715,264 | ) | |||||
| Total liabilities and stockholders' equity (deficit) | $ | 3,187,767 | $ | 3,592,637 | ||||
The accompanying notes are an integral part of these financial statements
| 4 |
POLYMERIC U.S., INC.
Statements of Operations
Years Ended December 31,
| 2025 | 2024 | |||||||
| Sales, net | $ | 5,323,161 | $ | 5,868,162 | ||||
| Cost of goods sold | 3,716,816 | 3,713,517 | ||||||
| Gross profit | 1,606,345 | 2,154,645 | ||||||
| Operating expenses: | ||||||||
| Selling | 194,516 | 182,842 | ||||||
| General and administrative | 1,584,185 | 1,525,179 | ||||||
| Total operating expenses | 1,778,701 | 1,708,021 | ||||||
| Operating (loss) income | (172,356 | ) | 446,624 | |||||
| Other income (expense): | ||||||||
| Miscellaneous income | 1,797 | 9,521 | ||||||
| Gain on sale of assets | — | 6,820 | ||||||
| Interest income | 11,292 | — | ||||||
| Interest expense | (258,368 | ) | (434,553 | ) | ||||
| Total other expense | (245,279 | ) | (418,212 | ) | ||||
| (Loss) income before provision for income taxes | (417,635 | ) | 28,412 | |||||
| Provision for income taxes | (13,479 | ) | (21,972 | ) | ||||
| Net (loss) income | $ | (431,114 | ) | $ | 6,440 | |||
The accompanying notes are an integral part of these financial statements
| 5 |
POLYMERIC U.S., INC.
Statements of Stockholders’ Equity (Deficit)
Years Ended December 31, 2025 and 2024
| Additional | Total Stockholders' | |||||||||||||||
| Common | Paid-in | Retained | (Deficit) | |||||||||||||
| Stock | Capital | Deficit | Equity | |||||||||||||
| Balance at January 1, 2024 | $ | 10 | $ | 750,000 | $ | (2,471,714 | ) | $ | (1,721,704 | ) | ||||||
| Net income | — | — | 6,440 | 6,440 | ||||||||||||
| Balance at December 31, 2024 | 10 | 750,000 | (2,465,274 | ) | (1,715,264 | ) | ||||||||||
| Cancellation of common stock (1,031 shares of $0.01 par value per share) | (10 | ) | — | — | (10 | ) | ||||||||||
| Issuance of common stock (1,200 shares of $0.01 par value per share) | 12 | — | — | 12 | ||||||||||||
| Conversion of stockholder loans and accounts payable to additional paid-in capital | — | 4,951,841 | — | 4,951,841 | ||||||||||||
| Net loss | — | — | (431,114 | ) | (431,114 | ) | ||||||||||
| Balance at December 31, 2025 | $ | 12 | $ | 5,701,841 | $ | (2,896,388 | ) | $ | 2,805,465 | |||||||
The accompanying notes are an integral part of these financial statements
| 6 |
POLYMERIC U.S., INC.
Statements of Cash Flows
Years Ended December 31,
| 2025 | 2024 | |||||||
| Cash flows from operating activities: | ||||||||
| Net (loss) income | $ | (431,114 | ) | $ | 6,440 | |||
| Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 124,399 | 148,457 | ||||||
| Noncash operating lease expense | 196,708 | 228,358 | ||||||
| Affiliate interest added to loan principal | 251,414 | 387,454 | ||||||
| Abandonment of patents | 138,964 | — | ||||||
| Credit loss expense | 10,056 | 3,292 | ||||||
| Provision for inventory obsolescence | 435,601 | 36,418 | ||||||
| Gain on sale of assets | — | (6,820 | ) | |||||
| Changes in assets and liabilities: | ||||||||
| Receivables | 347,642 | (51,337 | ) | |||||
| Inventories | (240,544 | ) | (391,086 | ) | ||||
| Prepaid expenses | — | 4,758 | ||||||
| Refundable income taxes | (19,924 | ) | (9,162 | ) | ||||
| Accounts payable | (133,383 | ) | (17,836 | ) | ||||
| Accrued expenses | (17,987 | ) | (91,663 | ) | ||||
| Operating lease liabilities | (197,475 | ) | (229,877 | ) | ||||
| Income tax payable | — | (3,472 | ) | |||||
| Net cash provided by operating activities | 464,357 | 13,924 | ||||||
| Cash flows from investing activities: | ||||||||
| Proceeds from sale of assets | — | 85,457 | ||||||
| Cash paid for acquisition of business | — | (95,390 | ) | |||||
| Purchase of property and equipment | (7,282 | ) | (66,572 | ) | ||||
| Net cash used in investing activities | (7,282 | ) | (76,505 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Payments on notes payable | (27,900 | ) | — | |||||
| Payments on notes payable to affiliate | (25,000 | ) | (312,901 | ) | ||||
| Net cash used in financing activities | (52,900 | ) | (312,901 | ) | ||||
| Net increase (decrease) in cash and cash equivalents | 404,175 | (375,482 | ) | |||||
| Cash and cash equivalents at beginning of year | 281,831 | 657,313 | ||||||
| Cash and cash equivalents at end of year | $ | 686,006 | $ | 281,831 | ||||
| Supplemental cash flow information: | ||||||||
| Cash paid for interest | $ | 6,954 | $ | 47,099 | ||||
| Cash paid for income taxes | $ | 33,407 | $ | 34,606 | ||||
| Noncash investing and financing activities: | ||||||||
| Cancellation of 1,031 shares of common stock (par value $0.01 per share) | $ | (10 | ) | $ | — | |||
| Issuance of 1,200 shares of common stock (par value $0.01 per share) | $ | 12 | $ | — | ||||
| Conversion of stockholder loans and affiliate accounts payable to additional paid-in capital | $ | 4,951,841 | $ | — | ||||
| Affiliate interest added to loan principal | $ | 251,414 | $ | 387,454 | ||||
| Purchase of property and equipment with debt | $ | — | $ | 91,280 | ||||
| Acquisition of business with payables | $ | — | $ | 55,000 | ||||
The accompanying notes are an integral part of these financial statements
| 7 |
POLYMERIC U.S., INC.
Notes to the Financial Statements
Years Ended December 31, 2025 and 2024
| 1. | Summary of Significant Accounting Policies |
Nature of Operations
Polymeric U.S., Inc. (the Company) earns revenues predominately from manufacturing of screen and digital inks.
The industry in which the Company operates is highly competitive and characterized by rapid technological changes, evolving customer demands, and frequent new product introductions. The Company faces intense competition from established companies, as well as new market entrants, some of which may have greater financial, technical, and marketing resources. Such competition could result in pricing pressures, reduced profit margins, loss of market share, and increased operating expenses, all of which could materially adversely affect the Company’s financial condition and results of operations.
Basis of Accounting
These financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP).
Cash and Cash Equivalents
The Company considers all liquid investments with original maturities of three months or less to be cash equivalents.
Receivables and Allowances for Credit Losses
Accounts receivable and other receivables are stated at the amount management expects to collect from balances outstanding. The Company reviews the collectability of accounts receivable by risk type and determines the need for an allowance based upon an analysis of outstanding receivables, historical collection information, existing economic conditions, as well as reasonable and supportable forecasts.
Accounts receivable are ordinarily due 30 days after the issuance of the invoice. Accounts past due more than 30 days are generally considered delinquent. Delinquent receivables are written off based on individual credit evaluation and specific circumstances of the customer.
The Company writes off receivables when there is information that indicates the debtor is facing significant financial difficulty and there is no possibility of recovery. If any recoveries are made from any accounts previously written off, they will be recognized in income or an offset to credit loss expense in the year of recovery, in accordance with the entity’s accounting policy election.
The Company has elected to apply the practical expedient in accordance with ASU No. 2025-05, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets for Private Companies and Certain Not-for-Profit Entities, and assumes that the current conditions as of the balance sheet date do not change over the remaining life of the asset. The election of this practical expedient was applied prospectively for the year ended December 31, 2025 and did not have a material impact on the Company’s financial statements.
| 8 |
POLYMERIC U.S., INC.
Notes to the Financial Statements Years Ended December 31, 2025 and 2024 |
| 1. | Summary of Significant Accounting Policies (continued) |
Receivables and Allowances for Credit Losses (continued)
The activity in the allowance for credit losses was as follows for the years ended December 31, 2025 and 2024:
| 2025 | 2024 | |||||||
| Beginning balance | $ | — | $ | — | ||||
| Credit loss expense | 10,056 | 3,292 | ||||||
| Recoveries | 5,000 | — | ||||||
| Write-offs | (6,056 | ) | (3,292 | ) | ||||
| Ending balance | $ | 9,000 | $ | — | ||||
Inventories
Inventories consist of screen and digital inks and are stated at the lower of average cost (which approximates the first-in, first-out (FIFO) method) and net realizable value. Cost includes material costs, labor, and overhead. Provisions are made for the estimated effect of obsolete and slow-moving inventories on the basis of historical experience, current usage patterns, future demand and marketability of products, inventory levels and turns, and known replacement costs.
Property and Equipment
Property and equipment acquisitions are stated at cost less accumulated depreciation and amortization. Expenditures for maintenance and repairs are expensed currently, while renewals and betterments that materially extend the life of an asset are capitalized. The cost of assets sold, retired, or otherwise disposed of, and the related allowance for depreciation are eliminated from the accounts, and any resulting gain or loss is recognized. Depreciation and amortization is charged to expense on the straight-line basis over the estimated useful life of each asset. Leasehold improvements are amortized over the shorter of the lease term or their respective estimated useful lives. The estimated useful lives for all property and equipment is 5 – 7 years.
Depreciation and amortization expense of property and equipment was $98,559 and $106,124 for the years ended December 31, 2025 and 2024, respectively.
Intangible Assets
Intangible assets consist of patents, trademarks, and goodwill. The patents and trademarks were acquired in a stand-alone asset purchase and were initially recognized at cost. These assets have finite useful lives and are amortized on a straight-line basis over their estimated useful lives, which reflect the period over which the assets are expected to contribute directly or indirectly to future cash flows. The estimated useful lives and amortization methods are reviewed at least annually and adjusted prospectively if expectations change. The Company determined that they were no longer using certain patents during the year ended December 31, 2025. See Note 5 for additional information related to this abandonment. No other asset impairment was recognized for the years ended December 31, 2025 and 2024.
| 9 |
POLYMERIC U.S., INC.
Notes to the Financial Statements Years Ended December 31, 2025 and 2024 |
| 1. | Summary of Significant Accounting Policies (continued) |
Intangible Assets (continued)
The Company records as goodwill the excess of the purchase price over the fair value of the identifiable net assets acquired in a business combination. The Company has elected the private company alternative whereas the Company amortizes goodwill on a straight-line basis over a period of ten years or less. Goodwill is evaluated for impairment only when events or changes in circumstances indicate that the fair value of the Company may be less than its carrying amount. Also, the Company has elected the alternative for certain identifiable assets acquired in a business combination. Under this alternative, the Company does not recognize customer-related intangible assets and noncompetition agreements separately from goodwill. Instead, these assets are included in goodwill. This accounting policy is applied prospectively to qualifying transactions occurring after the date of the election.
As part of a business acquisition, $80,000 was capitalized to goodwill during the year ended December 31, 2024. See Note 12 for additional information regarding the acquisition. Amortization expense on intangible assets was $25,840 and $42,333 for the years ended December 31, 2025 and 2024, respectively.
Long-Lived Asset Impairment
The Company evaluates the recoverability of the carrying value of long-lived assets whenever events or circumstances indicate the carrying amount may not be recoverable. If a long-lived asset is tested for recoverability and the undiscounted estimated future cash flows expected to result from the use and eventual disposition of the asset are less than the carrying amount of the asset, the asset cost is adjusted to fair value and an impairment loss is recognized as the amount by which the carrying amount of a long-lived asset exceeds its fair value.
Income Taxes
The Company files an income tax return in the United States federal jurisdiction and various state jurisdictions. The Company is generally no longer subject to income tax examinations by taxing authorities for tax years before 2022. There are currently no income tax examinations of the Company’s income tax returns in progress.
The Company is organized under subchapter C of the Internal Revenue Code. The Company computes its income tax expense for financial statement reporting purposes by applying the statutory rates to its taxable income.
Deferred income taxes are provided for temporary differences between the income tax basis and financial statement basis of assets and liabilities. These differences arise principally from the use of accelerated depreciation for income tax purposes, the expected future income tax benefits of net operating loss (NOL) carryforwards, and the recognition of certain income and expenses in different reporting periods for financial statement and income tax purposes.
The Company reviews uncertain tax positions annually and records a liability when, based on available evidence, management determines it is more likely than not that a position would not be sustained upon examination.
| 10 |
POLYMERIC U.S., INC.
Notes to the Financial Statements Years Ended December 31, 2025 and 2024 |
| 1. | Summary of Significant Accounting Policies (continued) |
Use of Estimates
In preparing financial statements in conformity with U.S. GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Revenue Recognition
The Company recognizes revenue when control of the promised goods or services is transferred to the Company’s customers, in an amount that reflects the consideration that it expects to be entitled to in exchange for those goods or services. The amount and timing of revenue recognition varies based on the nature of the goods or services provided and the terms and conditions of the customer contract. See Note 3 for additional information about the Company’s revenue.
Cost of Goods Sold
Cost of goods sold consists primarily of direct product costs (net of vendor rebates and discounts), direct labor costs, inbound and outbound freight charges, and overhead costs, and is recorded in the same period in which the related revenues are recorded.
Shipping and Handling Costs
Shipping and handling costs of $214,741 and $215,305 for the years ended December 31, 2025 and 2024, respectively, are included in cost of goods sold in the accompanying statement of operations.
Advertising Expenses
The costs of advertising and product promotion are expensed as incurred. The Company incurred $1,371 and $2,280 in advertising costs during the years ended December 31, 2025 and 2024, respectively.
Taxes Collected from Customers and Remitted to Governmental Authorities
Taxes collected from customers and remitted to governmental authorities are presented in the accompanying statement of operations on a net basis.
| 2. | Concentration of Credit Risk Arising from Cash Deposits in Excess of Insured Limits |
The Company maintained cash balances at a commercial bank and these balances can exceed the Federal Deposit Insurance Corporation (FDIC) insured deposit limit of $250,000 per financial institution. At December 31, 2025 and 2024, the Company’s balance held at the commercial bank exceeded the FDIC limit by approximately $436,000 and $66,000, respectively. The Company has not experienced any losses in cash accounts and believes it is not exposed to any significant credit risk on cash balances.
| 11 |
POLYMERIC U.S., INC.
Notes to the Financial Statements Years Ended December 31, 2025 and 2024 |
| 3. | Revenue |
Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring distinct goods or providing services to customers. The Company’s revenue consists substantially of product sales and is reported net of prompt pay discounts offered to customers. The Company recognizes revenue when performance obligations under the terms of contracts with its customers are satisfied, which occurs when control passes to a customer to enable them to direct the use of and obtain benefit from a product. This typically occurs when a customer obtains legal title, obtains the risks and rewards of ownership, has received the goods according to the contractual shipping terms either at the shipping point or destination and is obligated to pay for the product. Customary terms require payment within 30 days, and for certain customers, deposits may be required in advance of shipment.
Warranty costs, refunds, and discounts are not significant.
All of the Company’s revenues from contracts with customers for the years ended December 31, 2025 and 2024 are recognized at a point in time.
The Company has determined that the nature, amount, timing, and uncertainty of revenue and cash flows are affected by the following factors:
| a. | Payers that have different reimbursement and payment methodologies. |
| b. | Geography of the customer location. |
The following table provides information about the Company’s receivables from contracts with customers:
| 2025 | 2024 | |||||||
| Accounts receivable, net of allowance, beginning of year | $ | 645,447 | $ | 556,912 | ||||
| Accounts receivable, net of allowance, end of year | $ | 374,476 | $ | 645,447 | ||||
For shipping and handling activities, the Company is applying an accounting policy election which allows an entity to account for shipping and handling activities as fulfillment activities rather than a promised good or service when the activities are performed, even if those activities are performed after the control of the good has been transferred to the customer. Therefore, the Company expenses shipping and handling costs at the time revenue is recognized. The Company classifies shipping and handling expenses in cost of goods sold in the statements of operations.
| 4. | Inventories |
Inventories are comprised of the following at December 31, 2025 and 2024:
| 2025 | 2024 | |||||||
| Raw materials | $ | 806,962 | $ | 992,559 | ||||
| Work in progress | 2,986 | — | ||||||
| Finished units | 1,049,707 | 886,338 | ||||||
| 1,859,655 | 1,878,897 | |||||||
| Less: reserve for obsolescence | 306,576 | 130,761 | ||||||
| $ | 1,553,079 | $ | 1,748,136 | |||||
| 12 |
POLYMERIC U.S., INC.
Notes to the Financial Statements Years Ended December 31, 2025 and 2024 |
| 4. | Inventories (continued) |
During the year ended December 31, 2025, the Company recorded an additional inventory reserve of $350,000 related to direct-to-garment inventory items, due to anticipated lower future demand for the direct-to-garment inks. Management believes this adequately reduces the carrying amount of the inventory to its estimated net realizable value.
| 5. | Intangible Assets |
The carrying basis and accumulated amortization of recognized intangible assets at December 31, 2025 and 2024 are:
| 2025 | 2024 | |||||||||||||||
| Gross | Gross | |||||||||||||||
| Carrying | Accumulated | Carrying | Accumulated | |||||||||||||
| Amount | Amortization | Amount | Amortization | |||||||||||||
| Amortized intangible assets | ||||||||||||||||
| Patents | $ | 78,391 | $ | (39,195 | ) | $ | 310,000 | $ | (124,000 | ) | ||||||
| Goodwill | 80,000 | (9,333 | ) | 80,000 | (1,333 | ) | ||||||||||
| Brand name | 100,001 | (50,000 | ) | 100,001 | (40,000 | ) | ||||||||||
| $ | 258,392 | $ | (98,528 | ) | $ | 490,001 | $ | (165,333 | ) | |||||||
Amortization expense for the years ended December 31, 2025 and 2024 was $25,840 and $42,333, respectively. Estimated amortization expense for each of the following five years is:
| 2026 | $ | 25,839 | |||
| 2027 | 25,839 | ||||
| 2028 | 25,839 | ||||
| 2029 | 25,839 | ||||
| 2030 | 25,839 |
During the year ended December 31, 2025, as a result of changes in manufacturing processes and customer demand, the Company determined certain patents related to ink manufacturing processes no longer provided any economic benefit and accordingly, recognized an abandonment loss of $138,964, which was the remaining carrying amount upon abandonment. The abandonment loss is included in general and administrative expenses in the accompanying 2025 statement of operations.
| 6. | Long-Term Debt |
Long-term debt consists of the following as of December 31, 2025 and 2024:
| 2025 | 2024 | |||||||
| Note payable to Leaf Capital, secured by equipment; 8.46% interest; 36 monthly installments of $2,880. Matures December 2027. | $ | 63,380 | $ | 91,280 | ||||
| Less: current maturities | 30,355 | 27,900 | ||||||
| Long-term debt | $ | 33,025 | $ | 63,380 | ||||
| 13 |
POLYMERIC U.S., INC.
Notes to the Financial Statements Years Ended December 31, 2025 and 2024 |
| 6. | Long-Term Debt (continued) |
Remaining maturities are $30,355 in 2026, and $33,025 in 2027, after which none remain.
Long-term debt with affiliates consisted of the following as of December 31, 2025 and 2024:
| 2025 | 2024 | |||||||
| Note payable to affiliate, unsecured. Interest at 9.00%. Interest is added to principal balance monthly. No stated due date or payment terms. | $ | — | $ | 4,131,236 | ||||
| Note payable to affiliate, unsecured. Interest at 9.00%. Interest is added to principal balance monthly. No stated due date or payment terms. | — | 374,806 | ||||||
| Note payable to affiliate, unsecured. Interest at 18.00%. Interest is added to principal balance monthly. No stated due date or payment terms. | — | 126,012 | ||||||
| Total debt with affiliate | — | 4,632,054 | ||||||
| Less: current maturities | — | 126,012 | ||||||
| Long-term debt with affiliate | $ | — | $ | 4,506,042 | ||||
In 2023, the Company’s parent prepared to enter liquidation to flatten the corporate structure. As part of that decision, on March 31, 2023, the Company’s then parent transferred these notes to its own parent company (the Company’s ultimate parent at that time), with no change in terms. During 2025, the affiliate holding the notes converted the entire balance to equity, leaving no affiliate debt outstanding at December 31, 2025. Interest expense on these notes of $251,414 and $387,454 for the years ended December 31, 2025 and 2024, respectively, was added to the principal balance. See Note 7 for additional information on this conversion.
| 7. | Related Party Debt-to-Equity Conversion and Recapitalization |
Effective July 31, 2025, the Company completed a recapitalization transaction in which all outstanding stockholder debt and payables owed to Spear Africa Holdings Limited (Spear), the Company’s majority stockholder through that date, totaling $4,951,841 were converted into equity.
In connection with the recapitalization, all 1,031 previously outstanding shares of the Company’s common stock, including the 31 shares (approximately 3%) held by Colenso Capital UK Limited were canceled. Based on the Company’s stockholders’ deficit and a valuation indicating that the fair value of the Company’s net assets was fully absorbed by its outstanding debt as of July 31, 2025, management concluded that the previously outstanding common shares had no residual value immediately prior to the recapitalization. Accordingly, the cancellation of those shares did not result in any gain or loss being recognized in the Company’s financial statements.
Subsequent to the cancellation of the outstanding shares, the Company issued 1,200 shares of common stock to Spear. No cash consideration was received in connection with this issuance. The common stock balance increased by $12, with the remaining $4,951,841 recorded as additional paid-in-capital.
| 14 |
POLYMERIC U.S., INC.
Notes to the Financial Statements Years Ended December 31, 2025 and 2024 |
| 7. | Related Party Debt-to-Equity Conversion and Recapitalization (continued) |
As a result of the transaction, the stockholder debt and payables owed to Spear, totaling $4,951,841, was adjusted to additional paid-in capital and stockholders’ equity (deficit) increased by the same amount. Following the recapitalization, Spear owns 100% of the Company’s outstanding common stock, and no amounts were outstanding to Spear or other related parties as of December 31, 2025.
| 8. | Leases |
The determination of whether an arrangement is a lease is made at the lease’s inception. Management only reassesses its determination if the terms and conditions of the contract change.
Operating leases (other than short-term leases) are included in operating lease right-of-use (ROU) assets, current maturities of long-term operating lease liabilities and long-term operating lease liabilities, less current maturities.
ROU assets represent the Company’s right to use an underlying asset for the lease term, and lease liabilities represent the Company’s obligation to make lease payments. Operating lease ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. The Company has elected a practical expedient to apply a risk-free discount rate for a period comparable to the lease term as the discount rate when the lessor’s borrowing rate is not determinable. At December 31, 2025 and 2024, the weighted average discount rate for all operating leases is 3.57% and 4.12%, respectively. Operating lease ROU assets exclude any lease incentives. None of the Company’s lease agreements contain any material residual value guarantees.
Operating leases consist of leases of office and warehouse space and office equipment expiring at various dates during the next two years. Only lease options that management is reasonably certain the Company will exercise are included in the measurement of the operating lease ROU assets and liabilities. The weighted average remaining lease term of operating leases is approximately one year. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term. For the year ended December 31, 2025, lease expenses of $180,504 and $21,849 are included in cost of goods sold and general and administrative expense, respectively. For the year ended December 31, 2024, lease expenses of $180,504 and $55,068 are included in cost of goods sold and general and administrative expense, respectively.
The following is a schedule by year of future rental payments required under operating leases that have initial noncancellable lease terms in excess of one year as of December 31, 2025:
| 2026 | $ | 184,656 | ||
| 2027 | 3,114 | |||
| Total future operating lease payments | 187,770 | |||
| Less: amount representing interest | 3,142 | |||
| Present value of operating lease liabilities | $ | 184,628 |
Leases with a term of one year or less are not recognized on the balance sheet and the expense for these short-term leases is recognized on a straight-line basis over the lease term. For the years ended December 31, 2025 and 2024, the Company incurred expenses of $2,650 and $5,516, respectively, related to short-term leases which are included in general and administrative expense.
| 15 |
POLYMERIC U.S., INC.
Notes to the Financial Statements Years Ended December 31, 2025 and 2024 |
| 8. | Leases (continued) |
The Company leases printing equipment to a customer under a sales-type lease. Per the agreement, the customer pays a minimum lease payment to the Company through an upcharge of ink until the purchases covers the amount of the printer. If ink is not purchased, the customer is still required to make a monthly minimum payment. At the end of the lease term, ownership of the printer will be transferred to the customer and there is no unguaranteed residual asset recognized. At the commencement of the lease, it was expected that the length of the lease will be 60 months based on minimum ink purchases.
During 2025, the upcharge of ink purchases was reduced below the contractual amount, and the length of the lease was extended to cover the reduction of surcharge. The revised length of the lease after this extension was approximately one year.
The maturity of the lease receivable as of December 31, 2025, is as follows:
| 2026 | $ | 28,800 | ||
| 2027 | 25,800 | |||
| 2028 | 22,800 | |||
| 2029 | 22,800 | |||
| 2030 | 19,414 | |||
| Total payments | 119,614 | |||
| Lease receivable | 112,993 | |||
| Difference between undiscounted and discounted payments | $ | 6,621 |
| 9. | Income Taxes |
The provision for income taxes includes the following components for the years ended December 31, 2025 and 2024:
| 2025 | 2024 | |||||||
| Current income tax expense | $ | 13,479 | $ | 21,972 | ||||
| Deferred income tax expense | 515,200 | 3,300 | ||||||
| Decrease in deferred income tax valuation allowance | (515,200 | ) | (3,300 | ) | ||||
| Provision for income taxes | $ | 13,479 | $ | 21,972 | ||||
A reconciliation of the income tax provision at the statutory rate to the Company’s actual income tax benefit is shown below:
| 16 |
POLYMERIC U.S., INC.
Notes to the Financial Statements Years Ended December 31, 2025 and 2024 |
| 9. | Income Taxes (continued) |
| 2025 | 2024 | |||||||
| Computed at the statutory rate of 21% | $ | (87,703 | ) | $ | 5,967 | |||
| Increase (decrease) resulting from: | ||||||||
| State income taxes | (12,529 | ) | 852 | |||||
| Nondeductible meals, entertainment, and other | 1,992 | 1,906 | ||||||
| Temporary differences: | ||||||||
| Increase in inventory reserve | 42,196 | 8,740 | ||||||
| Book depreciation and amortization in excess of tax depreciation and amortization | 21,906 | 7,092 | ||||||
| Tax gain in excess of book gain on sale of assets | — | 17,025 | ||||||
| Accrued interest | 54,339 | 55,056 | ||||||
| Use of NOL carryforward | (15,236 | ) | (66,998 | ) | ||||
| Other | 8,514 | (7,668 | ) | |||||
| Provision for income taxes | $ | 13,479 | $ | 21,972 | ||||
The tax effects of temporary differences related to deferred taxes shown on the balance sheets at December 31, 2025 and 2024 are:
| 2025 | 2024 | |||||||
| Deferred tax assets: | ||||||||
| Obsolete inventory reserve | $ | 73,600 | $ | 31,400 | ||||
| Accrued vacation | 400 | 500 | ||||||
| Other accruals | 2,900 | — | ||||||
| Lease liabilities | 44,300 | 49,300 | ||||||
| Accrued interest | — | 594,700 | ||||||
| Net operating loss carryforwards | 190,900 | 207,800 | ||||||
| 312,100 | 883,700 | |||||||
| Deferred tax liabilities: | ||||||||
| Book/tax difference on property and equipment | (19,200 | ) | (41,100 | ) | ||||
| Amortization of intangibles | 57,900 | 28,200 | ||||||
| Right-of-use assets | (44,300 | ) | (49,100 | ) | ||||
| Net deferred tax asset before valuation allowance | 306,500 | 821,700 | ||||||
| Valuation allowance: | ||||||||
| Beginning balance | (821,700 | ) | (825,000 | ) | ||||
| Decrease during the year | 515,200 | 3,300 | ||||||
| Ending balance | (306,500 | ) | (821,700 | ) | ||||
| Net deferred tax asset | $ | — | $ | — | ||||
| 17 |
POLYMERIC U.S., INC.
Notes to the Financial Statements Years Ended December 31, 2025 and 2024 |
| 9. | Income Taxes (continued) |
The Company has unused operating loss carryforwards of approximately $795,000 and $866,000 at December 31, 2025 and 2024, respectively, and utilized approximately $63,000 and $279,000 of NOL in the years ended December 31, 2025 and 2024, respectively. NOL incurred can be carried forward indefinitely, however, such NOL can only offset 80% of taxable income.
Management recorded a full valuation allowance against the net deferred tax asset before valuation allowance as it is more likely than not that the future benefit from the deferred tax asset will not be realized in full.
| 10. | Employee Benefit Plan |
The Company has a 401(k) profit-sharing plan covering substantially all employees who have completed three months of employment. In 2025 and 2024, the Company matched 25% of each employee’s payroll contributions up to 4%. Contributions to the plan were $2,815 and $2,945 for the years ended December 31, 2025 and 2024, respectively.
| 11. | Level-Funded Group Health Plan |
The Company sponsors a partially self-insured, level-funded group health plan for eligible employees. Under this arrangement, the Company pays a monthly amount to an insurance carrier that is allocated among funding a claims account, administrative fees, and specific and aggregate stop-loss coverage. Because the Company bears the risk for health care claims up to specified attachment points and may participate in favorable claims experience through potential refunds, the arrangement is accounted for as a self-insured health benefit. For the years ended December 31, 2025 and 2024, the related costs are included in cost of goods sold of $39,348 and $45,257, respectively, and operating expenses of $163,617 and $191,801, respectively, in the accompanying statements of operations. A liability is recorded for health care claims incurred but not reported and for reported but unpaid claims when it is probable that a loss has been incurred and the amount can be reasonably estimated, consistent with ASC 450-20 (loss contingencies) and measurement concepts applied to health and welfare plans under ASC 965-30. This liability is deducted from any fund balance remaining at the end of the plan year.
At December 31, 2025 and 2024, a liability for the health care claims incurred but not reported and for reported but unpaid claims of $2,936 and $3,333, respectively, was deducted from the Company’s ending fund balance to determine the ending surplus. These amounts include estimates for claims incurred but not reported, which are based primarily on historical claims experience, recent claims activity, and other relevant factors. Actual results could differ from these estimates, and such differences are recorded in earnings in the period in which they become known. The level-funded arrangement is subject to specific and aggregate stop-loss insurance that limits the Company’s exposure to large individual claims and unusually high overall claim levels. In the event that actual eligible claims are less than the funded amount in the claims account, and after consideration of contractual terms and run-out periods, the Company is eligible to receive a refund of $11,449. This refund is recognized as a reduction of cost of goods sold during the year ended December 31, 2025. A refund amount was not recognized for the year ended December 31, 2024.
| 18 |
POLYMERIC U.S., INC.
Notes to the Financial Statements Years Ended December 31, 2025 and 2024 |
| 12. | Business Acquisition |
On November 1, 2024, the Company entered into an asset purchase agreement with InkTech International Corporation (InkTech), a Canadian corporation, for cash and contingent consideration. InkTech was engagement in the business of liquid ink manufacturing and the distributing of certain digital inks, UV screen inks and graphic supplies, similar to the Company. Per the purchase agreement, the Company was to pay $50,000 to the seller in two installments with the first due at the date of signing and the second due by April 30, 2025. In addition, cash was paid for certain production equipment and inventory. The contingent consideration, per the purchase agreement, is calculated as 10% of sales generated by the seller’s customers over the next two years. The Company’s management estimated that the acquisition will generate approximately $400,000 a year in revenue for the next two years, which equaled a total of $80,000 in contingent consideration. Production equipment and inventory were recorded at their fair market value as of the acquisition date, with the excess recorded as goodwill, which resulted primarily from a customer list. No liabilities were included in the acquisition of the entity. The Company has elected an accounting option available to private companies to combine customer related intangibles with goodwill, as well as the election to amortize goodwill on a straight-line basis and assess impairment only when a triggering event occurs. The following table presents the allocation of the purchase price consideration to the tangible and intangible assets acquired:
| Inventory | $ | 60,390 | ||
| Goodwill | 80,000 | |||
| Production equipment | 10,000 | |||
| Total allocation of purchase price | $ | 150,390 |
Computation of the purchase price at date of acquisition:
| Cash paid for inventory and equipment | $ | 70,390 | ||
| Cash paid in advance for contingent consideration | 25,000 | |||
| Earn-out payable - contingent consideration | 55,000 | |||
| Total purchase price | $ | 150,390 |
Changes in estimates of the contingent consideration will be recognized in the statement of operations when known. During the year ended December 31, 2025, the contingent consideration liability was reduced by $22,894 based upon the level of sales earned from InkTech’s customers during the year ended December 31, 2025.
| 13. | General Litigation Contingency |
The Company is subject to claims and lawsuits that arise primarily in the ordinary course of business. It is the opinion of management that the disposition or ultimate resolution of such claims and lawsuits will not have a material adverse effect on the financial position, results of operations and cash flows of the Company.
| 14. | Reclassifications |
Certain items in the 2024 financial statement presentation have been reclassified to conform to the 2025 presentation. Such reclassifications have no effect on previously reported net income or stockholders’ deficit.
| 19 |
POLYMERIC U.S., INC.
Notes to the Financial Statements Years Ended December 31, 2025 and 2024 |
| 15. | Subsequent Events |
The Company evaluated subsequent events through July 30, 2026, when these financial statements were available to be issued. Other than disclosed below, management is not aware of any significant events that occurred subsequent to the balance sheet date but prior to the filing of this report that would have a material impact on the financial statements.
On May 18, 2026, the Company completed the sale of substantially all assets of its inks and coatings business operating under the “Polymeric” trade name to Polymeric Nocopi LLC, a wholly owned subsidiary of Nocopi Technologies, Inc. The transaction was completed pursuant to an Asset Purchase Agreement among Nocopi Technologies, Inc., Polymeric Nocopi LLC, Polymeric U.S., Inc., and the sole stockholder of the Company. The Asset Purchase Agreement was executed and the closing occurred simultaneously on May 18, 2026.
The aggregate consideration for the transaction was $2,650,000, consisting of $1,900,000 in cash, subject to customary working capital adjustments and other reductions, the assumption of certain specified liabilities, and the issuance of 500,000 shares of Nocopi Technologies, Inc. common stock to the Company. At closing, Polymeric Nocopi LLC paid $1,750,000 in cash, net of a $150,000 holdback. The holdback secures the post-closing working capital adjustment and indemnification obligations and is subject to staged release as follows: up to $50,000 within five business days after final determination of the working capital adjustment, up to $50,000 on the 12-month anniversary of the closing date, and any remaining balance on the 18-month anniversary of the closing date, in each case net of any applicable setoffs, encumbered amounts, or claims. The first release payment was paid subsequent to December 31, 2025, in the amount of $50,000.
The Asset Purchase Agreement contains customary representations, warranties, covenants, and indemnification provisions, including non-compete and non-solicitation covenants.
No adjustment has been recorded in the Company’s financial statements as of and for the year ended December 31, 2025.
20
Exhibit 99.2
POLYMERIC U.S., INC.
CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2026 and 2025
| Page(s) | ||
| Balance Sheets at March 31, 2026 (unaudited) and December 31, 2025 | F-2 | |
| Statements of Operations for the three months ended March 31, 2026 and 2025 (unaudited) | F-3 | |
| Statements of Stockholders’ Equity for the three months ended March 31, 2026 and 2025 (unaudited) | F-4 | |
| Statements of Cash Flows for the three months ended March 31, 2026 and 2025 (unaudited) | F-5 | |
| Condensed Notes to the Unaudited Financial Statements | F-6 |
| F-1 |
POLYMERIC U.S., INC.
BALANCE SHEETS
| March 31, | December 31, | |||||||
| 2026 | 2025 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash | $ | 892,955 | $ | 686,006 | ||||
| Accounts receivable, net credit losses allowance of $9,000 and $9,000, respectively | 490,754 | 374,476 | ||||||
| Other receivables | 175,623 | 124,442 | ||||||
| Inventory, net | 1,421,011 | 1,553,079 | ||||||
| Refundable income taxes | 29,086 | 29,086 | ||||||
| Total Current Assets | 3,009,429 | 2,767,089 | ||||||
| Property and equipment, at cost: | ||||||||
| Leasehold improvements | 58,012 | 58,012 | ||||||
| Machinery and equipment | 804,133 | 804,133 | ||||||
| Furniture and fixtures | 16,598 | 16,598 | ||||||
| 878,743 | 878,743 | |||||||
| Less: Accumulated depreciation and amortization | (817,647 | ) | (802,557 | ) | ||||
| Net property and equipment | 61,096 | 76,186 | ||||||
| Other assets | ||||||||
| Operating lease right-of-use assets, net of amortization | 139,517 | 184,628 | ||||||
| Intangible assets, net of amortization | 153,904 | 159,864 | ||||||
| Total other assets | 293,421 | 344,492 | ||||||
| Total Assets | $ | 3,363,946 | $ | 3,187,767 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | ||||||||
| Current Liabilities | ||||||||
| Current maturities of long-term debt | $ | 31,001 | $ | 30,355 | ||||
| Insurance installment not payable | 38,857 | — | ||||||
| Current maturities of long-term operating lease liabilities | 137,441 | 181,557 | ||||||
| Accounts payable | 160,487 | 112,012 | ||||||
| Accounts expenses | 17,711 | 22,282 | ||||||
| Total Current Liabilities | 385,497 | 346,206 | ||||||
| Long-term liabilities: | ||||||||
| Long-term debt, less current maturities | 25,029 | 33,025 | ||||||
| Long-term operating lease liabilities, less current maturities | 2,076 | 3,071 | ||||||
| Total long-term liabilities | 27,105 | 36,096 | ||||||
| Total Liabilities | 412,602 | 382,302 | ||||||
| Stockholders' Equity | ||||||||
| Common stock, $0.01 par value; 30,000 shares authorized; 1,200 shares issued and outstanding | 12 | 12 | ||||||
| Additional paid-in capital | 5,701,841 | 5,701,841 | ||||||
| Retained deficit | (2,750,509 | ) | (2,896,388 | ) | ||||
| Total Stockholders' Equity | 2,951,344 | 2,805,465 | ||||||
| Total Liabilities and Stockholders’ Equity | $ | 3,363,946 | $ | 3,187,767 | ||||
See accompanying condensed notes to unaudited financial statements
| F-2 |
POLYMERIC U.S., INC.
STATEMENTS OF OPERATIONS
(Unaudited)
For the Three Months Ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| Revenue | ||||||||
| Sales, net | $ | 1,307,472 | $ | 1,374,278 | ||||
| Total Revenue | 1,307,472 | 1,374,278 | ||||||
| Cost of Revenue | ||||||||
| Cost of goods sold | 824,494 | 930,386 | ||||||
| Total Cost of Revenue | 824,494 | 930,386 | ||||||
| Gross Profit | 482,978 | 443,892 | ||||||
| Operating Expenses | ||||||||
| General and administrative | 315,467 | 361,300 | ||||||
| Selling and Advertising | 23,188 | 70,708 | ||||||
| Total Operating Expenses | 338,655 | 432,008 | ||||||
| Net Income from Operations | 144,323 | 11,884 | ||||||
| Other Income (Expense) | ||||||||
| Miscellaneous income (expense) | (1,009 | ) | 2,288 | |||||
| Interest income | 3,855 | — | ||||||
| Interest expense | (1,290 | ) | (106,679 | ) | ||||
| Total Other Income (Expense), net | 1,556 | (104,391 | ) | |||||
| Income (Loss) before Provision for Income Taxes | 145,879 | (92,507 | ) | |||||
| Provision for Income Taxes | — | — | ||||||
| NET INCOME (LOSS) | $ | 145,879 | $ | (92,507 | ) | |||
See accompanying condensed notes to unaudited financial statements
| F-3 |
POLYMERIC U.S., INC.
STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)
For the Three Months Ended March 31, 2026 and 2025
(Unaudited)
Common Stock | Additional Paid-In Capital | Retained Deficit | Total Stockholders’ Equity | |||||||||||||
| Balance at December 31, 2025 | $ | 12 | $ | 5,701,841 | $ | (2,896,388 | ) | $ | 2,805,465 | |||||||
| Net Income | — | — | 145,879 | 145,879 | ||||||||||||
| Balance at March 31, 2026 | $ | 12 | $ | 5,701,841 | $ | (2,750,509 | ) | $ | 2,951,344 | |||||||
Common Stock | Additional Paid-In Capital | Retained Deficit | Total Stockholders’ Deficit | |||||||||||||
| Balance at December 31, 2024 | $ | 10 | $ | 750,000 | $ | (2,465,274 | ) | $ | (1,715,264 | ) | ||||||
| Net Loss | — | — | (92,507 | ) | (92,507 | ) | ||||||||||
| Balance at March 31, 2025 | $ | 10 | $ | 750,000 | $ | (2,557,781 | ) | $ | (1,807,771 | ) | ||||||
See accompanying condensed notes to unaudited financial statements
| F-4 |
POLYMERIC U.S., INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
For the Three Months Ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| Cash Flows From Operating Activities: | ||||||||
| Net Income (Loss) | $ | 145,879 | $ | (92,507 | ) | |||
| Adjustments to reconcile net loss to net cash provided by operations | ||||||||
| Depreciation and amortization | 21,050 | 34,502 | ||||||
| Non-cash operating lease expense | 45,111 | 56,671 | ||||||
| Provision for inventory obsolescence | 1,877 | — | ||||||
| Affiliate interest added to loan principal | — | 104,796 | ||||||
| Change in inventory reserve | — | (31,778 | ) | |||||
| Changes in assets and liabilities: | ||||||||
| Decrease (Increase) in receivables | (167,459 | ) | 134,779 | |||||
| Decrease (Increase) in inventories | 130,191 | (60,235 | ) | |||||
| Increase in refundable income taxes | — | (3,721 | ) | |||||
| Increase in accounts payable | 48,475 | 36,285 | ||||||
| Increase (Decrease) in accrued expenses | (4,571 | ) | 20,845 | |||||
| Decrease in operating lease liabilities | (45,111 | ) | (57,642 | ) | ||||
| Net Cash Provided by Operating Activities | 175,442 | 141,995 | ||||||
| Cash Flows From Investing Activities: | ||||||||
| Purchase of property and equipment | — | (4,340 | ) | |||||
| Net Cash Used in Investing Activities | — | (4,340 | ) | |||||
| Cash Flows From Financing Activities: | ||||||||
| Payments made on notes payable | (17,065 | ) | (6,756 | ) | ||||
| Payments made on notes payable to affiliate | — | (25,000 | ) | |||||
| Insurance note payable | 48,572 | — | ||||||
| Net Cash Provided by (Used in) Financing Activities | 31,507 | (31,756 | ) | |||||
| Net Increase in Cash | 206,949 | 105,899 | ||||||
| Cash at Beginning of Period | 686,006 | 281,831 | ||||||
| Cash at End of Period | $ | 892,955 | $ | 387,730 | ||||
| Supplemental disclosure of cash flow information: | ||||||||
| Cash paid for interest | $ | 1,290 | $ | 1,884 | ||||
| Non-cash investing and financing activities | ||||||||
| Affiliate interest added to loan principal | $ | — | $ | 104,796 | ||||
See accompanying condensed notes to unaudited financial statements
| F-5 |
POLYMERIC U.S., INC. CONDENSED NOTES TO THE UNAUDITED FINANCIAL STATEMENTS MARCH 31, 2026 AND 2025 |
Note 1 – Summary of Significant Accounting Policies
Nature of Operations
Polymeric U.S., Inc. (the Company) earns revenues predominately from manufacturing of screen and digital inks.
The industry in which the Company operates is highly competitive and characterized by rapid technological changes, evolving customer demands, and frequent new product introductions. The Company faces intense competition from established companies, as well as new market entrants, some of which may have greater financial, technical, and marketing resources. Such competition could result in pricing pressures, reduced profit margins, loss of market share, and increased operating expenses, all of which could materially adversely affect the Company’s financial condition and results of operations.
Basis of Accounting
These financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America.
Cash
The Company considers all liquid investments with original maturities of three months or less to be cash equivalents. At March 31, 2026 and December 31, 2025, the Company had no cash equivalents.
Receivables and Allowances for Credit Losses
Accounts receivable and other receivables are stated at the amount management expects to collect from balances outstanding. The Company reviews the collectability of accounts receivable by risk type and determines the need for an allowance based upon an analysis of outstanding receivables, historical collection information, existing economic conditions, as well as reasonable and supportable forecasts.
Accounts receivable are ordinarily due 30 days after the issuance of the invoice. Accounts past due more than 30 days are generally considered delinquent. Delinquent receivables are written off based on individual credit evaluation and specific circumstances of the customer.
The Company writes off receivables when there is information that indicates the debtor is facing significant financial difficulty and there is no possibility of recovery. If any recoveries are made from any accounts previously written off, they will be recognized in income or an offset to bad debt expense in the year of recovery, in accordance with the entity’s accounting policy election.
The Company has elected to apply the practical expedient in accordance with ASU No. 2025-05, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets for Private Companies and Certain Not-for-Profit Entities, and assumes that the current conditions as of the balance sheet date do not change over the remaining life of the asset. The election of this practical expedient was applied prospectively and did not have a material impact on the Company’s financial statements.
The activity in the allowance for credit losses was as follows as of March 31, 2026 and December 31, 2025:
| March 31, 2026 | December 31, 2025 | |||||||
| Beginning of period | $ | 9,000 | $ | — | ||||
| Credit loss expense | — | 10,056 | ||||||
| Recoveries | — | 5,000 | ||||||
| Write-offs | — | (6,056 | ) | |||||
| Ending balance | $ | 9,000 | $ | 9,000 | ||||
| F-6 |
POLYMERIC U.S., INC. CONDENSED NOTES TO THE UNAUDITED FINANCIAL STATEMENTS MARCH 31, 2026 AND 2025 |
Inventories
Inventories consist of screen and digital inks and are stated at the lower of average cost (which approximates the first-in, first-out (FIFO) method) and net realizable value. Cost includes material costs, labor, and overhead. Provisions are made for the estimated effect of obsolete and slow-moving inventories on the basis of historical experience, current usage patterns, future demand and marketability of products, inventory levels and turns, and known replacement costs.
Property and Equipment
Property and equipment acquisitions are stated at cost less accumulated depreciation and amortization. Expenditures for maintenance and repairs are expensed currently, while renewals and betterments that materially extend the life of an asset are capitalized. The cost of assets sold, retired, or otherwise disposed of, and the related allowance for depreciation are eliminated from the accounts, and any resulting gain or loss is recognized. Depreciation and amortization is charged to expense on the straight-line basis over the estimated useful life of each asset. Leasehold improvements are amortized over the shorter of the lease term or their respective estimated useful lives. The estimated useful lives for all property and equipment is 5 – 7 years.
Depreciation and amortization expense of property and equipment was $15,090 and $21,752 for the three months ended March 31, 2026 and 2025, respectively.
Intangible Assets
Intangible assets consist of patents, trademarks, and goodwill. The patents and trademarks were acquired in a stand-alone asset purchase and were initially recognized at cost. These assets have finite useful lives and are amortized on a straight-line basis over their estimated useful lives, which reflect the period over which the assets are expected to contribute directly or indirectly to future cash flows. The estimated useful lives and amortization methods are reviewed at least annually and adjusted prospectively if expectations change. The Company determined that they were no longer using certain patents during the year ended December 31, 2025. See Note 5 for additional information related to this abandonment. No other asset impairment was recognized for the year ended December 31, 2025.
The Company records as goodwill the excess of the purchase price over the fair value of the identifiable net assets acquired in a business combination. The Company has elected the private company alternative whereas the Company amortizes goodwill on a straight-line basis over a period of ten years or less. Goodwill is evaluated for impairment only when events or changes in circumstances indicate that the fair value of the Company may be less than its carrying amount. Also, the Company has elected the alternative for certain identifiable assets acquired in a business combination. Under this alternative, the Company does not recognize customer-related intangible assets and noncompetition agreements separately from goodwill. Instead, these assets are included in goodwill. This accounting policy is applied prospectively to qualifying transactions occurring after the date of the election.
Amortization expense on intangible assets was $5,960 and $12,750 for the three months ended March 31, 2026 and 2025 respectively. See Note 5 for further information.
Long-Lived Asset Impairment
The Company evaluates the recoverability of the carrying value of long-lived assets whenever events or circumstances indicate the carrying amount may not be recoverable. If a long-lived asset is tested for recoverability and the undiscounted estimated future cash flows expected to result from the use and eventual disposition of the asset are less than the carrying amount of the asset, the asset cost is adjusted to fair value and an impairment loss is recognized as the amount by which the carrying amount of a long-lived asset exceeds its fair value.
No asset impairment was recognized for the three months ended March 31, 2026 and 2025.
Income Taxes
The Company files an income tax return in the United States federal jurisdiction and various state jurisdictions. The Company is generally no longer subject to income tax examinations by taxing authorities for tax years before 2022. There are currently no income tax examinations of the Company’s income tax returns in progress.
The Company is organized under subchapter C of the Internal Revenue Code. The Company computes its income tax expense for financial statement reporting purposes by applying the statutory rates to its taxable income.
| F-7 |
POLYMERIC U.S., INC. CONDENSED NOTES TO THE UNAUDITED FINANCIAL STATEMENTS MARCH 31, 2026 AND 2025 |
Deferred income taxes are provided for temporary differences between the income tax bases and financial statement bases of assets and liabilities. These differences arise principally from the use of accelerated depreciation for income tax purposes, the expected future income tax benefits of net operating loss (NOL) carryforwards, and the recognition of certain income and expenses in different reporting periods for financial statement and income tax purposes.
The Company reviews uncertain tax positions annually and records a liability when, based on available evidence, management determines it is more likely than not that a position would not be sustained upon examination.
Use of Estimates
In preparing financial statements in conformity with accounting principles generally accepted in the United States of America, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Revenue Recognition
The Company recognizes revenue when control of the promised goods or services is transferred to the Company’s customers, in an amount that reflects the consideration that it expects to be entitled to in exchange for those goods or services. The amount and timing of revenue recognition varies based on the nature of the goods or services provided and the terms and conditions of the customer contract. See Note 3 for additional information about the Company’s revenue.
Cost of Goods Sold
Cost of goods sold consists primarily of direct product costs (net of vendor rebates and discounts), direct labor costs, inbound and outbound freight charges, and overhead costs, and is recorded in the same period in which the related revenues are recorded.
Shipping and Handling Costs
Shipping and handling costs of $36,411 and $82,213 for the three months ended March 31, 2026 and 2025, respectively and are included in cost of goods sold in the accompanying statement of operations.
Advertising Expenses
The costs of advertising and product promotion are expensed as incurred. The Company incurred $310 and $361 in advertising costs during the three months ended March 31, 2026 and 2025, respectively.
Taxes Collected from Customers and Remitted to Governmental Authorities
Taxes collected from customers and remitted to governmental authorities are presented in the accompanying statement of operations on a net basis.
Note 2 – Concentration of Credit Risk Arising from Cash Deposits in Excess of Insured Limits
The Company maintained cash balances at a commercial bank and these balances can exceed the Federal Deposit Insurance Corporation (FDIC) insured deposit limit of $250,000 per financial institution. At December 31, 2025 and March 31, 2026, the Company’s balance held at the commercial bank exceeded the FDIC limit by approximately $436,000 and $643,000, respectively. The Company has not experienced any losses in cash accounts and believes it is not exposed to any significant credit risk on cash balances.
Note 3 – Revenue Recognition
Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring distinct goods or providing
services to customers. The Company’s revenue consists substantially of product sales and is reported net of prompt pay discounts
offered to customers. The Company recognizes revenue when performance obligations under the terms of contracts with its customers are
satisfied, which occurs when control passes to a customer to enable them to direct the use of and obtain benefit from a product. This
typically occurs when a customer obtains legal title, obtains the risks and rewards of ownership, has received the goods according to
the contractual shipping terms either at the shipping point or destination and is obligated to pay for the product. Customary terms require
payment within 30 days, and for certain customers, deposits may be required in advance of shipment.
| F-8 |
POLYMERIC U.S., INC. CONDENSED NOTES TO THE UNAUDITED FINANCIAL STATEMENTS MARCH 31, 2026 AND 2025 |
Warranty costs, refunds, and discounts are not significant.
All of the Company’s revenues from contracts with customers for the three months ended March 31, 2026 and 2025 are recognized at a point in time.
The Company has determined that the nature, amount, timing, and uncertainty of revenue and cash flows are affected by the following factors:
| · | Payers that have different reimbursement and payment methodologies. |
| · | Geography of the customer location. |
The following table provides information about the Company’s accounts receivable from contracts with customers:
| Accounts receivable, beginning of period, net of allowances – December 31, 2025 | $ | 374,476 | ||||
| Accounts receivable, ending balance, net of allowances – March 31, 2026 | $ | 490,754 | ||||
For shipping and handling activities, the Company is applying an accounting policy election, which allows an entity to account for shipping and handling activities as fulfillment activities rather than a promised good or service when the activities are performed, even if those activities are performed after the control of the good has been transferred to the customer. Therefore, the Company expenses shipping and handling costs at the time revenue is recognized. The Company classifies shipping and handling expenses in cost of goods sold in the statement of operations.
Note 4 – Inventories
Inventories are comprised of the following at March 31, 2026 and December 31, 2025:
March 31, 2026 | December 31, 2025 | |||||||
| Raw materials | $ | 826,586 | $ | 806,962 | ||||
| Work in progress | 40,701 | 2,986 | ||||||
| Finished units | 862,177 | 1,049,707 | ||||||
| 1,729,464 | 1,859,655 | |||||||
| Less: reserves for obsolete and slow-moving inventories | (308,453 | ) | (306,576 | ) | ||||
| Inventories, ending balance | $ | 1,421,011 | $ | 1,553,079 | ||||
During the year ended December 31, 2025, the Company recorded an additional inventory reserve of $350,000 related to direct-to-garment inventory items, due to anticipated lower future demand for the direct-to-garment inks. Management believes this adequately reduces the carrying amount of the inventory to its estimated net realizable value.
| F-9 |
POLYMERIC U.S., INC. CONDENSED NOTES TO THE UNAUDITED FINANCIAL STATEMENTS MARCH 31, 2026 AND 2025 |
Note 5 – Intangible Assets
The carrying basis and accumulated amortization of recognized intangible assets at March 31, 2026 and December 31, 2025 are:
| March 31, 2026 | December 31, 2025 | |||||||||||||||
| Gross Carrying Amount | Accumulated Amortization | Gross Carrying Amount | Accumulated Amortization | |||||||||||||
| Amortized intangible assets | ||||||||||||||||
| Patents | $ | 78,391 | $ | (41,155 | ) | $ | 78,391 | $ | (39,195 | ) | ||||||
| Goodwill | 80,000 | (10,833 | ) | 80,000 | (9,333 | ) | ||||||||||
| Trademark | 100,001 | (52,500 | ) | 100,001 | (50,000 | ) | ||||||||||
| $ | 258,392 | $ | (104,488 | ) | $ | 258,392 | $ | (98,528 | ) | |||||||
Amortization expense for the three months ended March 31, 2026 and 2025 was $5,960 and $12,750 respectively. Estimated amortization expense for each of the following five years is:
| Year 2027 | $ | 25,839 | ||||
| Year 2028 | $ | 25,839 | ||||
| Year 2029 | $ | 25,839 | ||||
| Year 2030 | $ | 25,839 | ||||
| Year 2031 | $ | 25,839 |
During the year ended December 31, 2025, as a result of changes in manufacturing processes and customer demand, the Company determined certain patents related to ink manufacturing processes no longer provided any economic benefit and accordingly, recognized an abandonment loss of $138,964, which was the remaining carrying amount upon abandonment. The abandonment loss is included in general and administrative expenses in the accompanying 2025 statement of operations.
Note 6 – Long-term debt
Long-term debt consists of the following as of March 31, 2026 and December 31, 2025:
March 31, 2026 | December 31, 2025 | |||||||
| Note payable to Leaf Capital for equipment. Interest at 8.46%. Payable in 36 monthly installments of $2,880. Matures December 2027. Collateralized by equipment. | $ | 56,030 | $ | 63,380 | ||||
| Less: current maturities | (31,001 | ) | (30,355 | ) | ||||
| Long-term debt | $ | 25,029 | $ | 33,025 | ||||
Future maturities of long-term debt consist of $31,001 due in 2026, and $25,029 in 2027, after which no additional maturities remain.
Note 7 – Related Party Debt-to-Equity Conversion and Recapitalization
Effective July 31, 2025, the Company completed a recapitalization transaction in which all outstanding stockholder debt and payables owed to Spear Africa Holdings Limited (Spear), the Company’s majority stockholder through that date, totaling $4,951,841 were converted into equity.
In connection with the recapitalization, all 1,031 previously outstanding shares of the Company’s common stock, including the 31 shares (approximately 3%) held by Colenso Capital UK Limited were canceled. Based on the Company’s stockholders’ deficit and a valuation indicating that the fair value of the Company’s net assets was fully absorbed by its outstanding debt as of July 31, 2025, management concluded that the previously outstanding common shares had no residual value immediately prior to the recapitalization. Accordingly, the cancellation of those shares did not result in any gain or loss being recognized in the Company’s financial statements.
Subsequent to the cancellation of the outstanding shares, the Company issued 1,200 shares of common stock to Spear. No cash consideration was received in connection with this issuance. The common stock balance increased by $12, with the remaining $4,951,841 recorded as additional paid-in-capital.
As a result of the transaction, the stockholder debt and payables owed to Spear, totaling $4,951,841, was adjusted to additional paid-in capital and stockholder’s equity increased by the same amount. Following the recapitalization, Spear owns 100% of the Company’s outstanding common stock, and no amounts were outstanding to Spear or other related parties as of March 31, 2026 and December 31, 2025.
| F-10 |
POLYMERIC U.S., INC. CONDENSED NOTES TO THE UNAUDITED FINANCIAL STATEMENTS MARCH 31, 2026 AND 2025 |
Note 8 – Leases
The determination of whether an arrangement is a lease is made at the lease’s inception. Management only reassesses its determination if the terms and conditions of the contract change.
Operating leases (other than short-term leases) are included in operating lease right-of-use (ROU) assets, current maturities of long-term operating lease liabilities and long-term operating lease liabilities, less current maturities.
ROU assets represent the Company’s right to use an underlying asset for the lease term, and lease liabilities represent the Company’s obligation to make lease payments. Operating lease ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. At March 31, 2026, the weighted average discount rate for all operating leases is 3.57%. Operating lease ROU assets exclude any lease incentives. None of the Company’s lease agreements contain any material residual value guarantees.
The Company has elected a practical expedient to apply a risk-free discount rate for a period comparable to the lease term as the discount rate when the lessor’s borrowing rate is not determinable.
Operating leases consist of leases of office and warehouse space and office equipment expiring at various dates during the next two years. Only lease options that management is reasonably certain the Company will exercise are included in the measurement of the operating lease ROU assets and liabilities. The weighted average remaining lease term of operating leases is approximately one year. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term. For the three months ended March 31, 2026, lease expenses of $45,126 and $1,038 are included in cost of goods sold and general and administrative expense, respectively. For the three months ended March 31, 2025, lease expenses of $45,126 and $15,123 are included in cost of goods sold and general and administrative expense, respectively.
The following is a schedule by year of future rental payments required under operating leases that have initial noncancellable lease terms in excess of one year as of March 31, 2026:
| Year 2027 | $ | 139,530 | ||
| Year 2028 | 2,076 | |||
| Total future operating lease payments | 141,606 | |||
| Less: amount representing interest | (2,089 | ) | ||
| Present value of operating lease liabilities | $ | 139,517 |
Leases with a term of one year or less are not recognized on the balance sheet and the expense for these short-term leases is recognized on a straight-line basis over the lease term. For the three months ended March 31, 2026 and March 31, 2025, the Company incurred expenses of $2,904 and $2,385, respectively, related to short-term leases which are included in general and administrative expense.
The Company leases printing equipment to a customer under a sales-type lease. Per the agreement, the customer pays a minimum lease payment to the Company through an upcharge of ink until the purchases covers the amount of the printer. If ink is not purchased, the customer is still required to make a monthly minimum payment. At the end of the lease term, ownership of the printer will be transferred to the customer and there is no unguaranteed residual asset recognized. At the commencement of the lease, it was expected that the length of the lease will be 60 months based on minimum ink purchases.
During 2025, the upcharge of ink purchases was reduced below the contractual amount, and the length of the lease was extended to cover the reduction of surcharge. The revised length of the lease after this extension was approximately one year.
| F-11 |
POLYMERIC U.S., INC. CONDENSED NOTES TO THE UNAUDITED FINANCIAL STATEMENTS MARCH 31, 2026 AND 2025 |
The maturity of the lease receivable as of March 31, 2026, is as follows:
| Year 2027 | $ | 35,800 | ||
| Year 2028 | 35,800 | |||
| Year 2029 | 35,800 | |||
| Year 2030 | 8,129 | |||
| Total payments | 115,529 | |||
| Lease receivable | (108,917 | ) | ||
| Difference between undiscounted and discounted payments | $ | 6,612 |
Note 9 – Employee Benefit Plan
The Company has a 401(k) profit-sharing plan covering substantially all employees who have completed three months of employment. In 2025, the Company matched 25% of each employee’s payroll contributions up to 4%. Contributions to the plan were $45 and $738 for the three months ended March 31, 2026 and 2025 respectively.
Note 10 – Level-Funded Group Health Plan
The Company sponsors a partially self-insured, level-funded group health plan for eligible employees. Under this arrangement, the Company pays a monthly amount to an insurance carrier that is allocated among funding a claims account, administrative fees, and specific and aggregate stop-loss coverage. Because the Company bears the risk for health care claims up to specified attachment points and may participate in favorable claims experience through potential refunds, the arrangement is accounted for as a self-insured health benefit. The related costs are included in cost of goods sold of $9,860, and operating expenses of $70,450 in the March 31, 2026 statement of operations. A liability is recorded for health care claims incurred but not reported and for reported but unpaid claims when it is probable that a loss has been incurred and the amount can be reasonably estimated, consistent with ASC 450-20 (loss contingencies) and measurement concepts applied to health and welfare plans under ASC 965-30. This liability is deducted from any fund balance remaining at the end of the plan year.
At December 31, 2025 and 2024, a liability for the health care claims incurred but not reported and for reported but unpaid claims of $2,936 and $3,333, respectively, was deducted from the Company’s ending fund balance to determine the ending surplus. These amounts include estimates for claims incurred but not reported, which are based primarily on historical claims experience, recent claims activity, and other relevant factors. Actual results could differ from these estimates, and such differences are recorded in earnings in the period in which they become known. The level-funded arrangement is subject to specific and aggregate stop-loss insurance that limits the Company’s exposure to large individual claims and unusually high overall claim levels. In the event that actual eligible claims are less than the funded amount in the claims account, and after consideration of contractual terms and run-out periods, the Company is eligible to receive a refund of $11,449. This refund is recognized as a reduction of cost of goods sold during the year ended December 31, 2025. A refund amount was not recognized for the year ended December 31, 2024.
Note 11 – General Litigation Contingency
The Company is subject to claims and lawsuits that arise primarily in the ordinary course of business. It is the opinion of management that the disposition or ultimate resolution of such claims and lawsuits will not have a material adverse effect on the financial position, results of operations and cash flows of the Company.
Note 12 – Subsequent Events
On May 18, 2026, Nocopi Technologies, Inc., a Maryland corporation, entered into an Asset Purchase Agreement with Polymeric Nocopi LLC, a Delaware limited liability company and wholly owned subsidiary of the Nocopi Technologies, Polymeric U.S., Inc., a Missouri corporation and Savara Capital, a Mauritius limited company and the sole shareholder of the Polymeric U.S., Inc., pursuant to which, subject to the terms and conditions of the Asset Purchase Agreement, substantially all of the assets of Polymeric U.S., Inc. have been acquired by Nocopi, and Nocopi has assumed certain specified liabilities, of Polymeric U.S., Inc.
F-12
Exhibit 99.3
NOCOPI TECHNOLOGIES, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
The following unaudited pro forma condensed combined financial information is based on the historical financial statements of Nocopi Technologies, Inc. (“Nocopi” or the “Company”) and Polymeric U.S., Inc. (“Polymeric” or the “Seller”) as of March 31, 2026 and for the three months ended March 31, 2026 and the year ended December 31, 2025, after giving effect to the acquisition (the “Acquisition”) of substantially all the assets of Polymeric by Nocopi pursuant to that certain Asset Purchase Agreement (the “Asset Purchase Agreement”) dated May 18, 2026 between and among the Company, Polymeric and Savara Capital, a Mauritius limited company and the sole shareholder of the Seller (the “Owner”). The Acquisition has been accounted for as an acquisition of Polymeric by the Company under applicable accounting principles.
Pursuant to the Asset Purchase Agreement, the aggregate consideration paid by Nocopi was $2,650,000 (the “Purchase Price”), which consisted of (a) $1,900,000 in cash (the “Cash Consideration”), subject to customary working capital adjustments and other reductions described below, (b) the assumption by Nocopi of certain specified liabilities of the Seller and (c) the issuance by the Company of 500,000 shares of the Company’s common stock, par value $0.01 per share (“Common Stock”) to the Seller. At the closing of the Acquisition (the “Closing” and the date thereof, the “Closing Date”), Nocopi delivered to the Seller $1,750,000, which represented the Cash Consideration portion of the Purchase Price, less a holdback amount of $150,000 (the “Holdback Amount”).
The Holdback Amount is being retained by Nocopi with respect to the post-closing working capital adjustment and the indemnification obligations of the Seller and Owner under the Asset Purchase Agreement, and will be released to the Seller, in each case net of any working capital setoff, encumbered amounts and finally resolved indemnification claims, as follows: (a) up to $50,000 within five business days following the final determination of the post-closing working capital adjustment, (b) up to $50,000 on the 12-month anniversary of the Closing Date and (c) the remaining balance, if any, on the 18-month anniversary of the Closing Date.
The following unaudited pro forma condensed combined financial information has been derived by the application of pro forma adjustments to the historical financial statements of the Company and Polymeric. The unaudited pro forma condensed combined financial information gives effect to the Acquisition as if the Acquisition had occurred on January 1, 2025 with respect to the unaudited annual pro forma condensed combined statements of operations, and as of January 1, 2026 for the three months ended March 31, 2026 unaudited pro forma condensed combined statements of operations, and as of March 31, 2026 with respect to the unaudited pro forma condensed combined balance sheets.
The unaudited pro forma condensed combined financial information has been prepared by management and is based on Nocopi’s historical financial statements and the assumptions and adjustments described in the notes to the unaudited pro forma financial information below. The presentation of the unaudited pro forma condensed combined financial information has been prepared by Nocopi in accordance with Article 11 of Regulation S-X.
The final Purchase Price allocation is subject to the final determination of the fair values of acquired assets, assumed liabilities and consideration paid, therefore, the allocation and the resulting effect on the financial statements may differ materially from the unaudited pro forma amounts included herein.
| 1 |
The unaudited pro forma condensed combined financial information reflects the assumptions and adjustments described in the accompanying notes to the unaudited pro forma condensed combined financial information. The pro forma transactions and adjustments (collectively, the “Transaction Accounting Adjustments”) are based on available information and on assumptions that the Company believes are reasonable under the circumstances to reflect, on a pro forma basis, the aggregate impact of the relevant transactions on the historical financial information of Nocopi. The Transaction Accounting Adjustments consist of those necessary to account for the Acquisition. The Transaction Accounting Adjustments are described in the notes to the unaudited pro forma condensed combined financial information.
In preparing the unaudited pro forma condensed combined financial information, the following historical information was used:
| • | We have derived the Company’s historical financial data as of March 31, 2026 and for the three months ended March 31, 2026 from its unaudited financial statements contained on Form 10-Q as filed with the Securities and Exchange Commission (the “SEC”) and for the year ended December 31, 2025 from its audited financial statements contained on Form 10-K as filed with the SEC; and
| |
| • | We have derived Polymeric’s historical financial statements as of March 31, 2026 and for the three months ended March 31, 2026 from its unaudited financial statements filed as Exhibit 99.2 to the Current Report on Form 8-K to which this pro forma financial information is filed as Exhibit 99.3 and for the year ended December 31, 2025 from Polymeric’s audited financial statements filed as Exhibit 99.1 to the Current Report on Form 8-K to which this pro forma financial information is filed as Exhibit 99.3. |
The unaudited pro forma condensed combined financial information is presented for informational purposes only and is not intended to reflect the results of operations or the financial position of the Company that would have resulted had the Acquisition been effective during the periods presented or the results that may be obtained by the Company in the future. The unaudited pro forma condensed combined financial information as of and for the periods presented does not reflect future events that may occur after the Acquisition, including, but not limited to, synergies or revenue enhancements arising from the Acquisition. Future results may vary significantly from the results reflected in the unaudited pro forma condensed combined financial information.
On May 18, 2026, the Company entered into Stock Purchase Agreements (the “Stock Purchase Agreements”), by and between the Company and various institutional investors (the “Investors”). The Stock Purchase Agreements provide for the private issuance (the “Private Placement”) to the Investors of an aggregate of 266,668 shares of Common Stock at a purchase price of $1.50 per share. To date, the Company received gross proceeds of $299,000 and recorded a subscription receivable of $101,000 in connection with this Private Placement. The adjustments related to this Private Placement are shown in a separate column as “Financing and Other Adjustments.” The Financing and Other Adjustments are described further in the notes to the unaudited pro forma condensed combined financial information.
| 2 |
NOCOPI TECHNOLOGIES, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEETS
AS OF MARCH 31, 2026
| Nocopi Technologies, Inc. | Polymeric U.S., Inc | Transaction Accounting Adjustments | Financing and Other Adjustments | Pro Forma Combined | |||||||||||||||||||
| ASSETS | |||||||||||||||||||||||
| CURRENT ASSETS: | |||||||||||||||||||||||
| Cash and cash equivalents | $ | 11,913,000 | $ | 892,955 | $ | (2,642,955 | ) | a,c | $ | 299,000 | f | $ | 10,462,000 | ||||||||||
| Subscription receivable | — | — | — | 101,000 | f | 101,000 | |||||||||||||||||
| Accounts receivable, net | 1,132,000 | 490,754 | — | — | 1,622,754 | ||||||||||||||||||
| Inventory, net | 404,100 | 1,421,011 | — | — | 1,825,111 | ||||||||||||||||||
| Prepaid expenses and other curent assets | 86,800 | 175,623 | — | — | 262,423 | ||||||||||||||||||
| Refundable income taxes | — | 29,086 | (29,086 | ) | c | — | — | ||||||||||||||||
| Total Current Assets | 13,535,900 | 3,009,429 | (2,672,041 | ) | 400,000 | 14,273,288 | |||||||||||||||||
| OTHER ASSETS: | |||||||||||||||||||||||
| Property and equipment, net | 21,200 | 61,096 | — | — | 82,296 | ||||||||||||||||||
| Goodwill | — | — | 480,434 | b | — | 480,434 | |||||||||||||||||
| Intangible assets, net | — | 153,904 | 140,263 | b | — | 294,167 | |||||||||||||||||
| Long-term receivables | 639,600 | — | — | — | 639,600 | ||||||||||||||||||
| Operating lease right of use assets | 142,300 | 139,517 | 339,712 | e | — | 621,529 | |||||||||||||||||
| Total Assets | $ | 14,339,000 | $ | 3,363,946 | $ | (1,711,632 | ) | $ | 400,000 | $ | 16,391,314 | ||||||||||||
| LIABILITIES AND STOCKHOLDERS' DEFICIT | |||||||||||||||||||||||
| CURRENT LIABILITIES: | |||||||||||||||||||||||
| Accounts payable | $ | 33,500 | $ | 160,487 | $ | — | $ | — | $ | 193,987 | |||||||||||||
| Accrued expenses and other liabilities | 114,200 | 56,568 | — | — | 170,768 | ||||||||||||||||||
| Stock compensation payable | 48,300 | — | — | — | 48,300 | ||||||||||||||||||
| Purchase consideration payable – holdback, current | — | — | 100,000 | a | — | 100,000 | |||||||||||||||||
| Current maturities of long-term debt | — | 31,001 | — | — | 31,001 | ||||||||||||||||||
| Operating lease liability – current | 82,200 | 137,441 | 28,960 | e | — | 248,601 | |||||||||||||||||
| Total Current Liabilities | 278,200 | 385,497 | 128,960 | — | 792,657 | ||||||||||||||||||
| LONG-TERM LIABILITIES: | |||||||||||||||||||||||
| Accrued expenses, non-current | 44,700 | — | — | — | 44,700 | ||||||||||||||||||
| Long-term debt, less current maturities | — | 25,029 | — | — | 25,029 | ||||||||||||||||||
| Purchase consideration payable – holdback, long-term | — | — | 50,000 | a | — | 50,000 | |||||||||||||||||
| Operating lease liability – non-current | 67,100 | 2,076 | 310,752 | e | — | 379,928 | |||||||||||||||||
| Total Liabilities | 390,000 | 412,602 | 489,712 | — | 1,292,314 | ||||||||||||||||||
| STOCKHOLDERS' EQUITY: | |||||||||||||||||||||||
| Common stock | 111,000 | 12 | 4,988 | a,d | 2,667 | 118,667 | |||||||||||||||||
| Additional paid-in capital | 26,103,700 | 5,701,841 | (4,956,841 | ) | a,d | 397,333 | 27,246,033 | ||||||||||||||||
| Accumulated deficit | (12,265,700 | ) | (2,750,509 | ) | 2,750,509 | d | (12,265,700 | ) | |||||||||||||||
| Total stockholders' equity | 13,949,000 | 2,951,344 | (2,201,344 | ) | 400,000 | 15,099,000 | |||||||||||||||||
| Total Liabilities and Stockholders' Equity | $ | 14,339,000 | $ | 3,363,946 | $ | (1,711,632 | ) | $ | 400,000 | $ | 16,391,314 | ||||||||||||
| 3 |
NOCOPI TECHNOLOGIES, INC.
UNAUDITED PRO FORMA STATEMENTS OF OPERATIONS
AS OF MARCH 31, 2026
| For the Three Months Ended | For the Year Ended | |||||||||||||||||||||||
| March 31, 2026 | December 31, 2025 | |||||||||||||||||||||||
| Nocopi Technologies, Inc. | Polymeric U.S., Inc | Pro Forma Combined | Nocopi Technologies, Inc. | Polymeric U.S., Inc | Pro Forma Combined | |||||||||||||||||||
| Total revenues | $ | 389,700 | $ | 1,307,472 | $ | 1,697,172 | $ | 1,493,800 | $ | 5,323,161 | $ | 6,816,961 | ||||||||||||
| Cost of revenues | 199,100 | 824,494 | 1,023,594 | 680,400 | 3,716,816 | 4,397,216 | ||||||||||||||||||
| Gross profit | 190,600 | 482,978 | 673,578 | 813,400 | 1,606,345 | 2,419,745 | ||||||||||||||||||
| Operating Expenses: | ||||||||||||||||||||||||
| Research and development | 55,800 | — | 55,800 | 179,900 | — | 179,900 | ||||||||||||||||||
| Sales and marketing expenses | 74,500 | 23,188 | 97,688 | 282,600 | 194,516 | 477,116 | ||||||||||||||||||
| General and administrative expenses | 221,800 | 315,467 | 537,267 | 952,300 | 1,584,185 | 2,536,485 | ||||||||||||||||||
| Total Operating Expenses | 352,100 | 338,655 | 690,755 | 1,414,800 | 1,778,701 | 3,193,501 | ||||||||||||||||||
| Net Income (Loss) from Operations | (161,500 | ) | 144,323 | (17,177 | ) | (601,400 | ) | (172,356 | ) | (773,756 | ) | |||||||||||||
| Other Income (Expense): | ||||||||||||||||||||||||
| Interest income | 105,200 | 3,855 | 109,055 | 470,600 | 11,292 | 481,892 | ||||||||||||||||||
| Other expense | — | (1,009 | ) | (1,009 | ) | 1,797 | 1,797 | |||||||||||||||||
| Interest expense and bank charges | (6,000 | ) | (1,290 | ) | (7,290 | ) | (24,100 | ) | (258,368 | ) | (282,468 | ) | ||||||||||||
| Total Other Income (Expense), net | 99,200 | 1,556 | 100,756 | 446,500 | (245,279 | ) | 201,221 | |||||||||||||||||
| Income (Loss) before provision for income taxes | (62,300 | ) | 145,879 | 83,579 | (154,900 | ) | (417,635 | ) | (572,535 | ) | ||||||||||||||
| Provision for income taxes | — | — | — | — | (13,479 | ) | (13,479 | ) | ||||||||||||||||
| Net income (loss) | $ | (62,300 | ) | $ | 145,879 | $ | 83,579 | $ | (154,900 | ) | $ | (431,114 | ) | $ | (586,014 | ) | ||||||||
| Net income (loss) per common share - basic and diluted | ||||||||||||||||||||||||
| Basic and Diluted | $ | (0.01 | ) | $ | 0.01 | $ | (0.01 | ) | $ | (0.05 | ) | |||||||||||||
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | ||||||||||||||||||||||||
| Basic and Diluted (g) | 11,057,345 | 11,557,345 | 10,800,154 | 11,300,154 | ||||||||||||||||||||
| 4 |
NOCOPI TECHNOLOGIES, INC.
NOTES TO THE UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
March 31, 2026
Note 1: Basis of Presentation
On May 18, 2026, Nocopi Technologies, Inc. (the “Company”) entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”) with Polymeric U.S., Inc. (“Polymeric” or the “Seller”), a Missouri corporation, and Savara Capital, a Mauritius limited company, and the sole shareholder of the Seller (the “Owner”). Pursuant to the Asset Purchase Agreement, the Company acquired (the “Acquisition”) substantially all the assets of Polymeric for an aggregate consideration paid of $2,650,000, which consisted of (a) $1,900,000 in cash, subject to customary working capital adjustments and other reductions described below, (b) the assumption by the Company of certain specified liabilities of the Seller and (c) the issuance by the Company of 500,000 shares of Common Stock to the Seller. On the Closing Date, the Company delivered to the Seller $1,750,000, which represents the Cash Consideration portion of the Purchase Price, less the Holdback Amount of $150,000.
The Holdback Amount is being retained by the Company with respect to the post-closing working capital adjustment and the indemnification obligations of the Seller and Owner under the Asset Purchase Agreement, and will be released to the Seller, in each case net of any working capital setoff, encumbered amounts and finally resolved indemnification claims, as follows: (a) up to $50,000 within five business days following the final determination of the post-closing working capital adjustment, (b) up to $50,000 on the 12-month anniversary of the Closing Date and (c) the remaining balance, if any, on the 18-month anniversary of the Closing Date.
The Acquisition was accounted for under the acquisition method of accounting in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic No. 805 Business Combinations, with the Company as the acquiring entity. The acquisition method of accounting requires, among other things, that the assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date. In addition, the acquisition method of accounting requires that the consideration transferred be measured at current market prices at the date of the acquisition. Accordingly, the assets acquired and liabilities assumed are recorded as of the acquisition date at their respective fair values and added to those of the Company. The financial statements and reported results of operations of the Company issued after completion of the Acquisition will reflect these values. Prior periods will not be retroactively restated to reflect the historical financial position or results of operations of Polymeric.
The Transaction Accounting Adjustments are based on available information and on assumptions that the Company believes are reasonable under the circumstances to reflect, on a pro forma basis, the aggregate impact of the relevant transactions on the historical financial information of the Company. These adjustments are discussed in greater detail in Note 2 below.
The pro forma adjustments reflecting Polymeric under the acquisition method of accounting are based on estimates and assumptions. The pro forma adjustments are included to the extent they are adjustments that reflect the accounting for the transactions in accordance with accounting principles generally accepted in the United States.
The unaudited pro forma condensed combined balance sheets reflect the effects of applying certain preliminary accounting adjustments to the historical results. The final Purchase Price allocation is subject to the final determination of the fair values of acquired assets and assumed liabilities and, therefore, that allocation and the resulting effect on income from operations may differ from the unaudited pro forma amounts included herein.
Assumptions underlying the pro forma adjustments necessary to reasonably present this unaudited pro forma information should be read in conjunction with this unaudited pro forma condensed combined financial information. The pro forma adjustments have been made based on available information and in the opinion of management, are reasonable. The unaudited pro forma condensed combined financial information should not be considered indicative of actual results that would have been achieved had the acquisition occurred on the date indicated and do not purport to indicate results of operations for any future period.
Note 2: Unaudited Pro Forma Condensed Combined Balance Sheets Adjustments
| a) | The adjustment reflects the consideration paid pursuant to the Asset Purchase Agreement, which consisted of: (a) $1,750,000, which represents the Cash Consideration portion of the Purchase Price and the Holdback Amount of $150,000 (reflected as Purchase consideration payable – holdback, current of $100,000 and long- term of $50,000), (b) the assumption by the Company of certain specified liabilities of the Seller and (c) the issuance by the Company of 500,000 shares of Common Stock and recorded at fair value amounting to $750,000 or $1.50 per share based on the closing price on the Closing Date. |
| 5 |
NOCOPI TECHNOLOGIES, INC.
NOTES TO THE UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
March 31, 2026
| b) | The table below provides a summary of the estimated Purchase Price allocation and calculation of goodwill for the Acquisition. |
| Total consideration | $ | 2,650,000 | ||
| Recognized amounts of identifiable assets acquired and liabilities assumed: | ||||
| Identifiable tangible assets acquired | 2,148,484 | |||
| Intangible assets acquired | 433,684 | |||
| Liabilities assumed | (412,602 | ) | ||
| Net assets acquired | 2,169,566 | |||
| Goodwill | $ | 480,434 |
| c) | Reflects the elimination of cash and cash equivalents of $892,955 and refundable income tax of $29,086 which are not included as part of the assets acquired by the Company. |
| d) | Reflects the recapitalization of Polymeric to eliminate its stockholders’ equity. |
| e) | Reflects the transaction that occurred on May 15, 2026, whereby Polymeric entered into an amendment agreement to extend the lease term of a certain lease agreement for an additional two-year period which will expire on December 31, 2028. The lease was extended due to the Acquisition. Consequently, the Company recorded operating lease right of use (“ROU”) assets and total ROU lease liabilities of $473,183 based on an incremental borrowing rate of 6.5%. |
Reflects the elimination of Polymeric’s historical operating lease ROU assets and operating lease liabilities as of March 31, 2026 and record the effect of the extended lease that occurred on May 15, 2026 as follows:
| Eliminate historical operating lease ROU assets | $ | (133,471 | ) | |
| Record pro forma operating lease ROU assets | 473,183 | |||
| Total adjustments to operating lease ROU assets | $ | 339,712 | ||
| Eliminate historical operating lease liability - current | $ | (131,396 | ) | |
| Record pro forma operating lease liability - current | 160,355 | |||
| Total adjustments to operating lease liability - current | $ | 28,960 | ||
| Eliminate historical operating lease liability – non-current | $ | (2,076 | ) | |
| Record pro forma operating lease liability – non-current | 312,828 | |||
| Total adjustments to operating lease liability – non-current | $ | 310,752 | ||
| f) | Reflects the transaction, shown in a separate column as Financing and Other Adjustments, that occurred on May 18, 2026, whereby the Company entered into Stock Purchase Agreements with the Investors. The Stock Purchase Agreements provide for the private issuance to the Investors of an aggregate of 266,668 shares of Common Stock at a purchase price of $1.50 per share. To date, the Company received gross proceeds of $299,000 and recorded a subscription receivable of $101,000 in connection with the Private Placement. |
| 6 |
NOCOPI TECHNOLOGIES, INC.
NOTES TO THE UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
March 31, 2026
Note 3: Unaudited Pro Forma Condensed Combined Statements of Operations Adjustments
| g) | The following table sets forth a reconciliation of the denominators used to compute pro forma basic and diluted loss per share reflecting the issuance by the Company of 500,000 shares of Common Stock pursuant to Asset Purchase Agreement. |
| For the Three Months Ended
March 31,2026 | For the Three Months Ended
December 31, 2025 | |||||||
| Pro forma basic and diluted loss per share: | ||||||||
| Denominator | ||||||||
| Weighted-average shares of common stock outstanding - basic and diluted | 11,057,345 | 10,800,154 | ||||||
| Common stock issued pursuant to the acquisition | 500,000 | 500,000 | ||||||
| Pro forma weighted-average shares of common stock outstanding - basic and diluted | 11,557,345 | 11,300,154 | ||||||
| Pro forma basic and diluted loss per share | $ | 0.01 | $ | (0.05 | ) | |||
| 7 |