SCI Engineered Materials, Inc 10-Q for FY2026 Q3

SCI Engineered Materials, Inc. (SCIA)

10-Q 2026-10-29 For: 2026-09-30

Added on October 29, 2026

About this 10-Q

SCI Engineered Materials, Inc filed this 10-Q on October 29, 2026, covering the quarter ended September 30, 2026 (FY2026 Q3).

SCI Engineered Materials reported nine-month revenue of $25,701,895 and net income of $2,494,850, up from $12,398,652 and $1,184,455, while gross margin declined to 23.3% from 28.7%. It recovered $599,044 of a $898,325 imposter scam. AI summary

Headline figures

Quarter ended September 30, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $8.06M; up 52.3% from $5.29M a year earlier
Net income: $862.31K; up 69.0% from net income of $510.28K a year earlier
Diluted EPS: $0.19; up 72.7% from $0.11 a year earlier

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Ohio	31-1210318
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)


Securities registered pursuant to Section 12(b) of the Act:	None
Securities registered pursuant to Section 12(g) of the Act:	Common Stock, without par value (Title of Class)
	OTCQB (Name of each exchange on which registered)


Large accelerated filer ☐	Accelerated filer ☐	Non-accelerated filer ☒	Smaller reporting company ☒	Emerging growth company ☐


		Page No.
PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements

	Condensed Balance Sheets as of September 30, 2026 (unaudited) and December 31, 2025	3

	Condensed Statements of Income for the Three and Nine months ended September 30, 2026 and 2025 (unaudited)	5

	Condensed Statements of Shareholders’ Equity for the Three and Nine months ended September 30, 2026 and 2025 (unaudited)	6

	Condensed Statements of Cash Flows for the Nine months ended September 30, 2026 and 2025 (unaudited)	7

	Notes to the Condensed Financial Statements (unaudited)	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	N/A

Item 4.	Controls and Procedures	19

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	N/A

Item 1A.	Risk Factors	N/A

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	N/A

Item 3.	Defaults Upon Senior Securities	N/A

Item 4.	Mine Safety Disclosures	N/A

Item 5.	Other Information	21

Item 6.	Exhibits	21

Signatures		22


		September 30,			December 31,
		2026			2025
		(UNAUDITED)
Current Assets
Cash and cash equivalents		$	11,041,812		$	7,939,000
Investments - marketable securities, short term			799,813			298,125
Accounts receivable
Trade, less allowance for credit losses of $15,000			1,151,682			694,864
Other			55,244			25,500
Inventories, net			3,777,866			1,091,471
Prepaid purchase orders			592,098			44,789
Prepaid expenses			116,593			151,702
Total current assets			17,535,108			10,245,451

Property and Equipment, at cost
Machinery and equipment			10,196,909			9,314,408
Furniture and fixtures			180,364			180,364
Leasehold improvements			737,351			732,711
Construction in progress			439,583			627,503
			11,554,207			10,854,986
Less accumulated depreciation and amortization			(8,112,188)			(8,020,249)
Property and equipment, net			3,442,019			2,834,737

Other Assets
Investments, net - marketable securities, long term			2,569,000			3,069,000
Right of use asset, net			905,523			1,061,709
Other assets			57,759			61,461
Total other assets			3,532,282			4,192,170

TOTAL ASSETS		$	24,509,409		$	17,272,358


		Three Months Ended September 30,						Nine Months Ended September 30,
		2026			2025			2026			2025

Revenue		$	8,056,414		$	5,289,116		$	25,701,895		$	12,398,652

Cost of revenue			6,366,732			3,957,971			19,700,638			8,836,536

Gross profit			1,689,682			1,331,145			6,001,257			3,562,116

General and administrative expense			589,539			523,408			1,743,672			1,620,770

Fraud loss (recovery), net			(262,745)			—			299,281			—

Research and development expense			134,028			111,250			424,071			320,891

Marketing and sales expense			228,017			156,318			645,000			421,940

Income from operations			1,000,843			540,169			2,889,233			1,198,515

Interest income			114,606			119,959			334,051			333,769

Income before provision for income taxes			1,115,449			660,128			3,223,284			1,532,284

Income tax expense			253,137			149,849			728,434			347,829

NET INCOME		$	862,312		$	510,279		$	2,494,850		$	1,184,455

Earnings per share - basic and diluted (Note 7)

Income per common share
Basic		$	0.19		$	0.11		$	0.56		$	0.26
Diluted		$	0.19		$	0.11		$	0.56		$	0.26

Weighted average shares outstanding
Basic			4,450,003			4,578,979			4,456,670			4,573,970
Diluted			4,450,003			4,583,142			4,456,670			4,578,226


					Additional
		Common			Paid-In			Retained Earnings
		Stock			Capital			(Accumulated Deficit)			Treasury Stock			Total

Balance 12/31/2025		$	10,753,529		$	2,233,384		$	1,690,980		$	(500,000)		$	14,177,893

Purchase of treasury stock			—			—			—			(267,500)			(267,500)

Common stock issued (Note 5)			87,129			—			—			—			87,129

Net income			—			—			2,494,850			—			2,494,850

Balance 09/30/2026		$	10,840,658		$	2,233,384		$	4,185,830		$	(767,500)		$	16,492,372

Balance 12/31/2024		$	10,706,323		$	2,233,384		$	(54,305)		$	—		$	12,885,402

Common stock issued (Note 5)			47,206			—			—			—			47,206

Net income			—			—			1,184,455			—			1,184,455

Balance 09/30/2025		$	10,753,529		$	2,233,384		$	1,130,150		$	—		$	14,117,063



Balance 06/30/2026		$	10,840,658		$	2,233,384		$	3,323,518		$	(767,500)		$	15,630,060

Net income			—			—			862,312			—			862,312

Balance 09/30/2026		$	10,840,658		$	2,233,384		$	4,185,830		$	(767,500)		$	16,492,372

Balance 06/30/2025		$	10,753,529		$	2,233,384		$	619,871		$	—		$	13,606,784

Net income			—			—			510,279			—			510,279

Balance 09/30/2025		$	10,753,529		$	2,233,384		$	1,130,150		$	—		$	14,117,063


		Balance at beginning of period	Billings			Payments received		Balance at end of period
Nine months ended September 30, 2026
Accounts receivable	$	694,864	$	25,701,895	$	(25,245,077)	$	1,151,682

Nine months ended September 30, 2025
Accounts receivable	$	704,808	$	12,398,652	$	(12,204,550)	$	898,910


		Balance at beginning of period		Billings		Recognized revenue		Balance at end of period
Nine months ended September 30, 2026
Contract Liabilities: Customer deposits	$	829,158	$	22,529,686	$	(19,794,332)	$	3,564,512

Nine months ended September 30, 2025
Contract Liabilities: Customer deposits	$	337,873	$	11,508,166	$	(7,813,815)	$	4,032,224


					Gross			Gross
		Amortized			Unrealized			Unrealized
		Cost			Losses			Gains			Fair Value
September 30, 2026
Corporate bonds		$	3,369,813		$	(45,317)		$	—		$	3,324,496
Total investments		$	3,369,813		$	(45,317)		$	—		$	3,324,496

Allowance for credit losses			(1,000)
Total investments, net		$	3,368,813

December 31, 2025
Corporate bonds		$	3,368,125		$	—		$	7,156		$	3,375,281
Total investments		$	3,368,125		$	—		$	7,156		$	3,375,281

Allowance for credit losses			(1,000)
Total investments, net		$	3,367,125



2026	$	78,221
2027		322,184
2028		335,072
2029		318,378
Total minimum lease payments		1,053,855
Less imputed interest		148,332
Total operating lease obligations	$	905,523


	2026			2025
Operating cash outflows from operating leases	$	231,572		$	222,666
Weighted average remaining lease term – operating leases		3.2	years		4.2	years
Weighted average discount rate – operating leases		8.5	%		8.5	%


3(a)		Certificate of Second Amended and Restated Articles of Incorporation of Superconductive Components, Inc. (Incorporated by reference to Exhibit 3(a) to the Company’s initial Form 10-SB, filed on September 28, 2000)

3(b)		Restated Code of Regulations of Superconductive Components, Inc. (Incorporated by reference to Exhibit 3(b) to the Company’s initial Form 10-SB, filed on September 28, 2000)

3(c)		Amendment to Articles of Incorporation recording the change of the corporate name to SCI Engineered Materials, Inc. (Incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-QSB filed November 7, 2007).

4(a)		SCI Engineered Materials, Inc. 2011 Stock Incentive Plan (Incorporated by reference to the Company’s Definitive Proxy Statement for the 2011 Annual Meeting of Shareholders held on September 10, 2011, filed April 28, 2011).

5		Rule 10b5-1 None




14(a)		SCI Engineered Materials Code of Ethics for the Chief Executive Officer and Chief Financial Officer (Incorporated by reference to the Company’s Current Report via the Company’s website at www.sciengineeredmaterials.com).

31.1	*	Rule 13a-14(a) Certification of Principal Executive Officer.

31.2	*	Rule 13a-14(a) Certification of Principal Financial Officer.

32.1	*	Section 1350 Certification of Principal Executive Officer.

32.2	*	Section 1350 Certification of Principal Financial Officer.

99.1	*	Press Release dated October 29, 2026 entitled “SCI Engineered Materials, Inc., Reports 2026 Third Quarter and Year-to-Date Results.”

101	*	The Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2026 formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Condensed Balance Sheets at September 30, 2026 and December 31, 2025, (ii) Condensed Statements of Income for the three and nine months ended September 30, 2026 and 2025, (iii) Condensed Statements of Shareholders’ Equity for the three and nine months ended September 30, 2026 and 2025, (iv) Condensed Statements of Cash Flows for the nine months ended September 30, 2026 and 2025, and (v) Notes to the Condensed Financial Statements.

104	*	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).


		SCI ENGINEERED MATERIALS, INC.

Date: October 29, 2026		/s/ Jeremiah R. Young
		Jeremiah R. Young, President, and Chief Executive Officer
		(Principal Executive Officer)

		/s/ Shelby S. Yohn
		Shelby S. Yohn, Director of Accounting
		(Principal Financial Officer and Principal Accounting Officer)


Date: October 29, 2026	/s/ Jeremiah R. Young
	Jeremiah R. Young
	President and Chief Executive Officer
	(Principal Executive Officer)


		September 30,			December 31,
		2026			2025
		(UNAUDITED)
Current Liabilities
Operating lease obligations, current portion		$	241,835		$	212,561
Accounts payable			2,125,790			245,523
Customer deposits			3,564,512			829,158
Accrued compensation			554,448			403,281
Accrued expenses and other			251,520			165,222
Total current liabilities			6,738,105			1,855,745

Deferred tax liability			615,244			389,572
Operating lease obligations, net of current portion			663,688			849,148
Total liabilities			8,017,037			3,094,465

Shareholders' Equity
Common stock, no par value, authorized 15,000,000 shares; 4,600,003 and 4,583,407 shares issued, respectively			10,840,658			10,753,529
Additional paid-in capital			2,233,384			2,233,384
Retained earnings			4,185,830			1,690,980
Less: Treasury stock, at cost (150,000 and 100,000 common shares, respectively)			(767,500)			(500,000)
Total shareholders' equity			16,492,372			14,177,893

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY		$	24,509,409		$	17,272,358


		Nine Months Ended September 30,
		2026			2025
CASH FLOWS FROM OPERATING ACTIVITIES
Net income		$	2,494,850		$	1,184,455
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and accretion			390,015			325,488
Amortization of patents			3,700			3,700
Stock based compensation			87,129			47,206
(Gain) loss on disposal of equipment			(6,917)			497
Deferred taxes			225,672			139,505
Inventory reserve			7,013			(135)
Changes in operating assets and liabilities:
Accounts receivable			(486,562)			(169,502)
Investment			(1,688)			—
Inventories			(2,693,408)			(1,598,785)
Prepaid purchase orders			(547,309)			45,514
Prepaid expenses			35,109			36,048
Accounts payable			1,880,267			(18,568)
Customer deposits			2,735,354			3,694,351
Accrued liabilities			232,290			(5,879)
Net cash provided by operating activities			4,355,516			3,683,895

CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of equipment			18,000			—
Purchases of marketable securities			—			(2,297,563)
Proceeds from maturities of marketable securities			—			1,759,478
Purchases of property and equipment			(1,003,204)			(420,953)
Net cash used in investing activities			(985,204)			(959,038)

CASH FLOWS FROM FINANCING ACTIVITIES
Purchase of treasury stock			(267,500)			—
Net cash used in financing activities			(267,500)			—

NET INCREASE IN CASH AND CASH EQUIVALENTS			3,102,812			2,724,857

CASH AND CASH EQUIVALENTS - Beginning of year			7,939,000			6,753,403

CASH AND CASH EQUIVALENTS - End of period		$	11,041,812		$	9,478,260


		September 30,			December 31,
		2026			2025
Raw materials		$	2,891,827		$	165,140
Work-in-process			556,205			681,176
Finished goods			343,723			252,036
			3,791,755			1,098,352
Inventory reserve			(13,889)			(6,881)
		$	3,777,866		$	1,091,471


Date: October 29, 2026	/s/ Shelby S. Yohn
	Shelby S. Yohn
	Director of Accounting
	(Principal Financial Officer and Principal Accounting
	Officer)


	/s/ Jeremiah R. Young
	Jeremiah R. Young
	President and Chief Executive Officer of
	SCI Engineered Materials, Inc.
	(Principal Executive Officer)
	October 29, 2026


	/s/ Shelby S. Yohn
	Shelby S. Yohn
	Director of Accounting of
	SCI Engineered Materials, Inc. (Principal Financial
	Officer and Principal Accounting Officer)
	October 29, 2026


		September 30			September 30
		2026			2025
ASSETS		(UNAUDITED)
Current Assets
Cash and cash equivalents		$	11,041,812		$	7,939,000
Investments - marketable securities, short term			799,813			298,125
Accounts receivable, less allowance for doubtful accounts			1,206,926			720,364
Inventories			3,777,866			1,091,471
Prepaid purchase orders and expenses			708,691			196,491
Total current assets			17,535,108			10,245,451

Property and Equipment, at cost
Machinery and equipment			10,196,909			9,314,408
Furniture and fixtures			180,364			180,364
Leasehold improvements			737,351			732,711
Construction in progress			439,583			627,503
Property and Equipment, at cost			11,554,207			10,854,986
Less accumulated depreciation and amortization			(8,112,188)			(8,020,249)
Property and equipment, net			3,442,019			2,834,737

Other Assets
Investments, net - marketable securities, long term			2,569,000			3,069,000
Right of use asset, net			905,523			1,061,709
Other assets			57,759			61,461
Total other assets			3,532,282			4,192,170
TOTAL ASSETS		$	24,509,409		$	17,272,358

LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Operating lease, short term		$	241,835		$	212,561
Accounts payable			2,125,790			245,523
Customer deposits			3,564,512			829,158
Accrued expenses			805,968			568,503
Total current liabilities			6,738,105			1,855,745

Deferred tax liability			615,244			389,572
Operating lease, long term			663,688			849,148
Total liabilities			8,017,037			3,094,465

Total shareholders' equity			16,492,372			14,177,893
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY		$	24,509,409		$	17,272,358