NNUP 8-K
Nocopi Technologies Inc/Md/ (NNUP)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM
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.) |
(Address of principal executive offices)(Zip Code)
(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. ☐
Item 1.02 Termination of a Material Definitive Agreement
Termination of Standstill Agreement
As previously disclosed, Nocopi Technologies, Inc. (the “Company”) entered into a Nomination and Standstill Agreement (the “Standstill Agreement”) dated March 29, 2022, as amended on (i) May 23, 2022, and (ii) September 30, 2022, by and among the Company and MSL 18 HOLDINGS LLC, Michael S. Liebowitz and Matthew C. Winger (collectively, the “MSL18 Holdings Group”). Each of Michael S. Liebowitz and Matthew C. Winger are members of the Company’s Board of Directors, and Matthew C. Winger serves as the Company’s Executive Vice President of Corporate Development, an executive officer position.
On August 8, 2023, in connection with Michael S. Liebowitz’s appointment by the Company’s Board of Directors to serve as the Company’s Chief Executive Officer and Chairman of the Board effective August 18, 2023, the Company and the MSL18 Holdings Group terminated the Standstill Agreement effective August 18, 2023 pursuant to a Termination of Standstill Agreement. A copy of the Termination of Standstill Agreement is filed as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
On August 7, 2023, Dr. Michael A. Feinstein notified the Company’s Board of Directors that on August 18, 2023 he will tender his resignation to the Company’s Board of Directors as a director of Nocopi Technologies, Inc. (the “Company”) and as Chief Executive Officer and all other officer positions of the Company. Dr. Feinstein’s departure was not the result of any disagreement with the Company, or any issue related to the Company’s operations, policies or practices. Dr. Feinstein will remain with the Company in a senior advisory role through next year to support a seamless transition.
On August 8, 2023, Michael S. Liebowitz, age 54, was appointed by the Company’s Board of Directors to serve as the Company’s Chief Executive Officer and Chairman of the Board effective August 18, 2023. Mr. Liebowitz has served as a Company director since October 2022. Mr. Liebowitz is the Founder and Managing Principal of M2A Family Office, a private firm he established in 2018 to manage his business and philanthropic activities to make a positive impact in the lives of future generations. He is an entrepreneur, private investor and seasoned business executive with extensive experience founding, acquiring and monetizing businesses in the insurance and financial industries. In the past 25 years, Mr. Liebowitz has founded or acquired many companies, including (i) in 1995, Harbor Group Consulting LLC, an insurance and risk management consulting firm where he served as President and Chief Executive Officer from 1995, until its acquisition by Alliant Insurance Services, Inc. (“Alliant”) in 2018, (ii) in 1999, as a founding principal, National Financial Partners Corp. (NYSE: NFP), which was taken public in 2003 and was acquired by a controlled affiliate of Madison Dearborn Partners, LLC in 2013, and is now one of the largest insurance brokers in the world, (iii) in 2006, Innova Risk Management (“Innova”), a boutique real estate insurance firm and leading provider of property and casualty insurance in the co-op and condominium markets in the New York area, which he acquired in a joint venture with Douglas Elliman Real Estate, LLC until its sale in 2019, (iv) in 2017, High Street Valuations, a firm that specializes in providing insurable value calculations for banks, capital market lenders, owners, and property management companies, and (v) in October 2020, New Beginnings Acquisition Corp. (“NBA”), a special purpose acquisition company until its merger with Airspan Networks Holdings Inc. (NYSE American: MIMO) (“Airspan”) in August 2021. He currently serves as President and Chief Executive of the Harbor Group Division of Alliant (and Managing Director and Executive Vice President of Alliant) and High Street Valuations; and, is the principal shareholder of Open Acq LLC, a firm that provides consultancy and actuarial services to qualified pension plans. He also currently serves as a director of Douglas Elliman Inc. (NYSE: DOUG), where he has served since December 2021. He also served as President and Chief Executive Officer of Harbor and Innova until 2018 and 2019, respectively, when they were acquired by Alliant as well as NBA from October 2020 to August 2021, until its merger with Airspan. He has served since August 2021 on the board of Airspan and he served on the board of Ladenburg Thalmann Financial Services Inc. from January 2019 to February 2020. He also served on the board of The Hilb Group, a leading middle market insurance agency headquartered in Richmond, Virginia, from 2011 to 2013. Mr. Liebowitz has also acted as an advisor to many of the largest financial services companies around the globe on their complex insurance matters within their investment banking/M&A groups. He was special consultant to GMAC for the World Trade Center financing prior to and after 9/11 and its claims and litigation process and strategy and advised the U.S. Federal Reserve and Goldman Sachs in the depths of the financial crisis in the newly created TALF lending program. Mr. Liebowitz graduated from CW Post College-LI University with a B.S. in Finance.
Mr. Liebowitz’s compensation for serving as the Company’s Chief Executive Officer and Chairman of the Board has not yet been determined. Once Mr. Liebowitz’s compensation is determined, the Company will file an amendment to this Form 8-K filing under this Item 5.02 containing such information within four business days after the information is determined.
The information set forth in Item 1.02 to this Form 8-K is incorporated herein by reference.
Item. 8.01. Other Events.
On August 10, 2023, the Company issued a press release announcing its executive leadership changes and results for its second quarter ended June 30, 2023. A copy of this press release is filed as Exhibit 99.5 to this Current Report on Form 8-K and is incorporated herein by reference.
Item. 9.01 Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit No. | Description of Exhibit | |
| 99.1* | Termination of Standstill Agreement dated August 8, 2023 | |
| 99.2 | Second Amendment to Nomination and Standstill Agreement dated September 30, 2022, between the Company and MSL 18 HOLDINGS LLC, Michael S. Liebowitz and Matthew C. Winger (incorporated by reference to the Company’s Form 8-K filed on 09/30/22) | |
| 99.3 | First Amendment to Nomination and Standstill Agreement dated May 23, 2022, between the Company and MSL 18 HOLDINGS LLC, Michael S. Liebowitz and Matthew C. Winger (incorporated by reference to the Company’s Form 8-K filed on 05/24/22) | |
| 99.4 | Nomination and Standstill Agreement dated March 29, 2022, between the Company and MSL 18 HOLDINGS LLC, Michael S. Liebowitz and Matthew C. Winger (incorporated by reference to the Company’s Form 8-K filed on 03/29/22) | |
| 99.5* | Press Release dated August 11, 2023 | |
| 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: August 11, 2023 | By: | /s/ Michael A. Feinstein |
| Michael A. Feinstein | ||
| Chief Executive Officer | ||
Exhibit 99.1
Termination of Nomination and Standstill Agreement
This Termination of Nomination and Standstill Agreement (this “Agreement”) dated as of August 8, 2023, is by and among Nocopi Technologies, Inc., a Maryland corporation (the “Company”), the entities and natural persons listed on Schedule A hereto (collectively, the “MSL18 Holdings Group”, and individually a “member” of the MSL18 Holdings Group), and Michael S. Liebowitz and Matthew C. Winger (“Winger ”), each in his individual capacity and as a member of the MSL18 Holdings Group (collectively, the “MSL18 Parties”, and each a “MSL18 Party”).
NOW THEREFORE, in consideration of the mutual covenants and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:
1. Termination of Agreement
The parties hereby acknowledge and agree that the Nomination and Standstill Agreement dated March 29, 2022, and all amendments thereto (the “Nomination and Standstill Agreement”), and all rights and obligations of the parties thereunder, including all survival provisions described in the Nomination and Standstill Agreement, are terminated and of no further force or effect as of August 18, 2023, without any further notice or action by any of the parties thereto.
2. Counterparts; Electronic Signatures. This Agreement may be executed in multiple counterparts, each of which, when executed and delivered, shall be deemed an original, and all of which when taken together shall constitute one and the same instrument. This Agreement may be executed by facsimile, pdf scan, or other form of electronic signature.
[Signature Pages Follow]
IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement, or caused the same to be executed by its duly authorized representative as of the date first above written.
|
NOCOPI TECHNOLOGIES, INC.
| |
| By: | /s/ Michael A. Feinstein, M.D |
| Name: | Michael A. Feinstein, M.D |
| Title: | Chairman of the Board, CEO |
| MSL18 HOLDINGS GROUP: | |
| /s/ Michael S. Liebowitz | |
| Michael S. Liebowitz | |
| /s/ Matthew C. Winger | |
| Matthew C. Winger | |
| MSL 18 HOLDINGS LLC | |
| By: | /s/ Michael S. Liebowitz |
| Name: | Michael S. Liebowitz |
| Title: | Managing Member |
| MSL18 DESIGNEE: | |
| /s/ Matthew C. Winger | |
| Matthew C. Winger |
Schedule A – “MSL18 Holdings Group”
Michael S. Liebowitz
Matthew C. Winger
MSL 18 HOLDINGS LLC
Exhibit 99.5
Nocopi
Technologies Reports Executive Leadership Changes and Second Quarter Financial Results
NNUP | August 11, 2023
KING OF PRUSSIA, Pa., August 11, 2023 (GLOBE NEWSWIRE) -- Nocopi Technologies, Inc. (OTC Pink: NNUP), a developer of specialty reactive inks today announced executive leadership changes and results for its second quarter ended June 30, 2023. Nocopi’s SEC filings are available here.
Executive
Leadership Changes
Michael A. Feinstein, M.D. to retire as CEO and Chairman of the Board on August 18, 2023.
Michael S. Liebowitz named CEO successor and appointed Chairman of the Board.
Nocopi Technologies announced today that Michael A. Feinstein, M.D. will retire from his role as Chief Executive Officer and Chairman of the Board on August 18, 2023, after serving in the Chief Executive Officer role since 2000. Dr. Feinstein, who has served as Chairman of the Board of Directors since 1999, will remain with the company in a senior advisory role through next year to support a seamless transition.
Nocopi
Chairman and CEO Michael Feinstein, M.D., commented, “I’m proud of what we have accomplished at Nocopi with our committed
and talented team. It has been a great privilege to lead this company for so many years. I remain committed to working closely with the
board and Michael for a smooth transition and to ensure we keep our positive momentum.”
Michael S. Liebowitz has been named Chairman of the Board and Chief Executive Officer of the company effective August 18, 2023. Mr. Liebowitz,
who has served as a member of the Board of Directors since October 2022, has over 25 years of experience in operating, scaling, and leading
businesses with a proven track record of creating shareholder value. Having served in numerous key leadership roles, Mr. Liebowitz has
founded or acquired various companies across diverse business segments including insurance and financial services. Mr. Liebowitz founded
Harbor Group Consulting LLC, an insurance and risk management consulting firm, where he was President and Chief Executive Officer from
1995 until its acquisition in 2018 by Alliant Insurance Services, Inc. Additionally, Mr. Liebowitz was a founding principal of National
Financial Partners Corp., which was taken public in 2003. Mr. Liebowitz has also served on public and private company boards throughout
his career.
"On behalf of the entire Nocopi Technologies team, I want to thank Mike Feinstein for his contributions over the years. At the same
time, I am excited to lead this company through its next chapter and look forward to establishing a new growth platform. The current
market backdrop provides tremendous opportunity for us to expand, and I am very focused on utilizing my operating experience and network
to help grow our business into other areas, including through mergers and acquisitions. Our strategy is to increase our per share value for all Nocopi shareholders and I will be very focused on executing on
our goals,” added Mr. Liebowitz.
2023 Q2 Results
2023 Q2 total revenue increased 17% to $599,200 as compared to 2022 Q2 revenue of $514,300. The increase in revenue was largely driven by an increase in product and other sales, up 30% from $344,500 in 2022 Q2 to $449,000 resulting from increased demand from third party authorized printers used by two of our major licensees in the entertainment and toy products markets. We did experience a slight decline in royalty revenue during the quarter from licensees. Licensee, royalties and fee revenue was down 12% during the quarter from $169,800 in 2022 Q2 to $150,200 due to the softer product sales of ink to licensees that was experienced by Nocopi throughout fiscal 2022.
Gross profit increased to $370,200 in the quarter from $313,100 during 2022 Q2. For the second quarter, gross profit margin came in at 62% on a blended basis, which is a slight improvement over 2022 Q2 gross profit margin of 61%. The increase in gross profit dollars came from an increase in product and other sales of 42% from $189,700 in 2022 Q2 to $269,800 in 2023 Q2, offset from a 19% decline in gross profit dollars from license royalties and fees of $100,400 in 2023 Q2 compared to $123,400 in 2022 Q2.
2023 Q2 operating expenses decreased to $319,700 from $615,900 in 2022 Q2, reflecting an approximate $296,200 decrease totaling 48%. Although the company faced one-time legal and shareholder expenses in 2022, operating expenses for 2023 reflect higher expenses aimed at new growth initiatives, modest increases in research and development and sales and marketing expenses, and the further buildout of a corporate development team.
Pretax earnings for the quarter were $50,500 compared to a loss of $302,800 during 2022 Q2. Net income for the quarter came in at $79,100 compared to a net loss of $297,000 in 2022 Q2.
Net cash from operations during the first half of 2023 was $137,300, which compares to a use of cash of ($253,300) for the same period of 2022.
Cash used in investing activities for the first half of 2023 was $11,900 compared to zero in the same period of 2022. Our cash balance increased $68,900 from 2023 Q1 to $5,463,200 at 2023 Q2 quarter-end.
Nocopi Chairman and CEO Michael Feinstein, M.D., commented, “We are experiencing steady progress in the recovery of customer demand from the lasting supply chain constrains of mid-2022. Q2 indicates another quarter of advancement. The slightly lower license and royalty revenue felt during the quarter was the result of weaker ink product sales during the middle of last year as our business typically experiences a time lag of 6 to 9 months between an ink product sale and the associated royalty revenue from the licensee. This was very similar to what we experienced in 2023 Q1. Our gross profit margin improved slightly to a level that is more in line with our historic ranges.
From
a capital base perspective, Nocopi’s balance sheet remains positioned with a strong financial base, with over $5.4 million in cash
and no long-term debt, to support our long-term value-creating initiatives. We place our excess cash in short-term U.S. Treasury Bills.”
About
Nocopi Technologies (www.nocopi.com)
Nocopi Technologies, headquartered in King of Prussia, PA develops and markets specialty reactive inks and licenses these technologies.
Nocopi’s ink technologies are backed by proprietary and patented technology. Our inks are marketed for use across a variety of
end markets.
Safe
Harbor for Forward-Looking Statements
The information posted in this release may contain forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. You can identify these statements by use of the words "may," "will,"
"should," "plans," "explores," "expects," "anticipates," "continue," "estimate,"
"project," "intend," and similar expressions. Forward-looking statements involve a number of estimates,
assumptions, risks and uncertainties that may cause actual results to differ materially from those anticipated. Forward-looking statements
may address uncertainties regarding customer preferences or demand for products incorporating Nocopi technology that underlie the company’s
revenue expectations, the company’s ability to develop new products and new product applications, the financial condition of customers
and the timeliness of their payments, the impact of fluctuations in currencies, global trade and shipping markets, other
risks to which the company is subject; other factors beyond the company's control. Actual results could differ from those projected
due to numerous factors and uncertainties, and Nocopi can give no assurance that such statements will prove to be correct nor that Nocopi’s
actual results of operations, financial condition and performance will not differ materially from those reflected or implied by
its forward-looking statements. Investors should refer to the risk factors described by Nocopi
in Item 1.A "Risk Factors" in its most recent Form 10-K and other SEC reports available at www.sec.gov/edgar. Forward-looking
statements are made as of the date of this news release; Nocopi assumes no obligation to update these statements.
Investor
& Media Contacts
610-834-9600
[email protected]