SCI Engineered Materials, Inc 10-Q for FY2026 Q2

SCI Engineered Materials, Inc. (SCIA)

10-Q 2026-07-30 For: 2026-06-30

Added on July 30, 2026

About this 10-Q

SCI Engineered Materials, Inc filed this 10-Q on July 30, 2026, covering the quarter ended June 30, 2026 (FY2026 Q2).

Headline figures

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

Revenue: $9.49M; up 162.8% from $3.61M a year earlier
Net income: $1.17M; up 221.1% from net income of $364.46K a year earlier
Diluted EPS: $0.26; up 225.0% from $0.08 a year earlier

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


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, without par value	SCIA	OTCQB


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 June 30, 2026 (unaudited) and December 31, 2025	3

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

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

	Condensed Statements of Cash Flows for the Six months ended June 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	13

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

Item 4.	Controls and Procedures	18

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	N/A

Item 6.	Exhibits	20

Signatures		21


		June 30,			December 31,
		2026			2025
		(UNAUDITED)
Current Assets
Cash and cash equivalents		$	9,889,753		$	7,939,000
Investments - marketable securities, short term			799,250			298,125
Accounts receivable
Trade, less allowance for doubtful accounts of $15,000			1,006,578			694,864
Other			35,072			25,500
Inventories, net			3,624,420			1,091,471
Prepaid purchase orders			248,493			44,789
Prepaid expenses			131,327			151,702
Total current assets			15,734,893			10,245,451

Property and Equipment, at cost
Machinery and equipment			9,694,462			9,314,408
Furniture and fixtures			180,364			180,364
Leasehold improvements			732,711			732,711
Construction in progress			883,802			627,503
			11,491,339			10,854,986
Less accumulated depreciation and amortization			(8,018,015)			(8,020,249)
Property and equipment, net			3,473,324			2,834,737

Other Assets
Investments, net - marketable securities, long term			2,569,000			3,069,000
Right of use asset, net			959,224			1,061,709
Other assets			58,993			61,461
Total other assets			3,587,217			4,192,170

TOTAL ASSETS		$	22,795,434		$	17,272,358


		Three Months Ended June 30,						Six Months Ended June 30,
		2026			2025			2026			2025

Revenue		$	9,485,119		$	3,609,304		$	17,645,481		$	7,109,536

Cost of revenue			7,208,664			2,451,147			13,333,906			4,878,565

Gross profit			2,276,455			1,158,157			4,311,575			2,230,971

General and administrative expense			512,090			549,540			1,154,133			1,097,361

Fraud expense			—			—			562,026			—

Research and development expense			147,433			107,374			290,043			209,641

Marketing and sales expense			217,466			145,436			416,983			265,623

Income from operations			1,399,466			355,807			1,888,390			658,346

Interest income, net			110,359			115,680			219,445			213,810

Income before provision for income taxes			1,509,825			471,487			2,107,835			872,156

Income tax expense			339,549			107,028			475,297			197,980

NET INCOME		$	1,170,276		$	364,459		$	1,632,538		$	674,176

Earnings per share - basic and diluted (Note 7)

Income per common share
Basic		$	0.26		$	0.08		$	0.37		$	0.15
Diluted		$	0.26		$	0.08		$	0.37		$	0.15

Weighted average shares outstanding
Basic			4,450,003			4,574,686			4,460,059			4,571,425
Diluted			4,450,003			4,578,926			4,460,059			4,575,729


					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			—			—			462,262			—			462,262

Balance 03/31/2026		$	10,840,658		$	2,233,384		$	2,153,242		$	(767,500)		$	14,459,784

Net income									1,170,276						1,170,276

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

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

Net income			—			—			309,717			—			309,717

Balance 03/31/2025		$	10,706,323		$	2,233,384		$	255,412		$	—		$	13,195,119

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

Net income			—			—			364,459			—			364,459

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


		Balance at beginning of period	Billings			Payments received		Balance at end of period
Six months ended June 30, 2026
Accounts receivable	$	694,864	$	17,645,481	$	(17,333,767)	$	1,006,578

Six months ended June 30, 2025
Accounts receivable	$	704,808	$	7,109,536	$	(7,211,449)	$	602,895


		Balance at beginning of period		Billings		Recognized revenue		Balance at end of period
Six months ended June 30, 2026
Contract Liabilities: Customer deposits	$	829,158	$	17,481,677	$	(13,764,712)	$	4,546,123

Six months ended June 30, 2025
Contract Liabilities: Customer deposits	$	337,873	$	4,757,749	$	(4,237,498)	$	858,124


					Gross			Gross
		Amortized			Unrealized			Unrealized
		Cost			Losses			Gains			Fair Value
June 30, 2026
Corporate bonds		$	3,369,250		$	(15,302)		$	—		$	3,353,948
Total investments		$	3,369,250		$	(15,302)		$	—		$	3,353,948

Allowance for credit losses			(1,000)
Total investments, net		$	3,368,250

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	$	155,412
2027		322,183
2028		335,072
2029		318,374
Total minimum lease payments		1,131,041
Less debt discount		171,817
Total operating lease obligations	$	959,224


	2026			2025
Operating cash outflows from operating leases	$	102,485		$	83,782
Weighted average remaining lease term – operating leases		3.4	years		4.4	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).




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 July 30, 2026 entitled “SCI Engineered Materials, Inc., Reports 2026 Second Quarter and Year-to-Date Results.”

101	*	The Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2026 formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Condensed Balance Sheets at June 30, 2026 and December 31, 2025, (ii) Condensed Statements of Income for the three and six months ended June 30, 2026 and 2025, (iii) Condensed Statement of Changes in Equity for the three and six months ended June 30, 2026 and 2025, (iv) Condensed Statements of Cash Flows for the six months ended June 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: July 30, 2026		/s/ Jeremiah R. Young
		Jeremiah R. Young, President, and Chief Executive Officer
		(Principal Executive Officer)

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


Date: July 30, 2026	/s/ Jeremiah R. Young
	Jeremiah R. Young
	President and Chief Executive Officer
	(Principal Executive Officer)


		June 30,			December 31,
		2026			2025
		(UNAUDITED)
Current Liabilities
Operating lease obligations, current portion		$	232,011		$	212,561
Accounts payable			477,280			245,523
Customer deposits			4,546,123			829,158
Accrued compensation			343,462			403,281
Accrued expenses and other			75,303			165,222
Total current liabilities			5,674,179			1,855,745

Deferred tax liability			763,983			389,572
Operating lease obligations, net of current portion			727,212			849,148
Total liabilities			7,165,374			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			3,323,518			1,690,980
Less: Treasury stock, at cost (150,000 and 100,000 common shares, respectively)			(767,500)			(500,000)
Total shareholders' equity			15,630,060			14,177,893

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY		$	22,795,434		$	17,272,358


		Six Months Ended June 30,
		2026			2025
CASH FLOWS FROM OPERATING ACTIVITIES
Net income		$	1,632,538		$	674,176
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and accretion			251,138			211,740
Amortization of patents			2,467			2,466
Stock based compensation			87,129			47,206
(Gain) on disposal of equipment			(16,667)			497
Deferred taxes			374,411			878
Inventory reserve			4,669			680
Changes in operating assets and liabilities:
Accounts receivable			(321,286)			148,122
Inventories			(2,537,618)			354,512
Prepaid purchase orders			(203,704)			(58,633)
Prepaid expenses			20,375			88,933
Accounts payable			231,757			117,705
Customer deposits			3,716,965			520,251
Accrued liabilities			(153,188)			(185,292)
Net cash provided by operating activities			3,088,986			1,923,241

CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of equipment			18,000			—
Purchases of marketable securities			(1,125)			(2,000,000)
Proceeds from maturities of marketable securities			—			1,509,478
Purchases of property and equipment			(887,608)			(215,454)
Net cash used in investing activities			(870,733)			(705,976)

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

NET INCREASE IN CASH			1,950,753			1,217,265

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

CASH - End of period		$	9,889,753		$	7,970,668


		June 30,			December 31,
		2026			2025
Raw materials		$	629,724		$	165,140
Work-in-process			2,551,558			681,176
Finished goods			454,689			252,036
			3,635,970			1,098,352
Inventory reserve			(11,550)			(6,881)
		$	3,624,420		$	1,091,471


Date: July 30, 2026	/s/ Shelby S. Yohn
	Shelby S. Yohn
	Chief Financial Officer
	(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)
	July 30, 2026


	/s/ Shelby S. Yohn
	Shelby S. Yohn
	Chief Financial Officer of
	SCI Engineered Materials, Inc. (Principal Financial
	Officer and Principal Accounting Officer)
	July 30, 2026


		June 30			June 30
		2026			2025
ASSETS		(UNAUDITED)
Current Assets
Cash and cash equivalents		$	9,889,753		$	7,939,000
Investments - marketable securities, short term			799,250			298,125
Accounts receivable, less allowance for doubtful accounts			1,041,650			720,364
Inventories			3,624,420			1,091,471
Prepaid purchase orders and expenses			379,820			196,491
Total current assets			15,734,893			10,245,451

Property and Equipment, at cost
Machinery and equipment			9,694,462			9,314,408
Furniture and fixtures			180,364			180,364
Leasehold improvements			732,711			732,711
Construction in progress			883,802			627,503
Property and Equipment, at cost			11,491,339			10,854,986
Less accumulated depreciation and amortization			(8,018,015)			(8,020,249)
Property and equipment, net			3,473,324			2,834,737

Other Assets
Investments, net - marketable securities, long term			2,569,000			3,069,000
Right of use asset, net			959,224			1,061,709
Other assets			58,993			61,461
Total other assets			3,587,217			4,192,170
TOTAL ASSETS		$	22,795,434		$	17,272,358

LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Operating lease, short term		$	232,011		$	212,561
Accounts payable			477,280			245,523
Customer deposits			4,546,123			829,158
Accrued expenses			418,765			568,503
Total current liabilities			5,674,179			1,855,745

Deferred tax liability			763,983			389,572
Operating lease, long term			727,212			849,148
Total liabilities			7,165,374			3,094,465

Total shareholders' equity			15,630,060			14,177,893
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY		$	22,795,434		$	17,272,358