SCI Engineered Materials, Inc. Files 2023 Annual Report on Form 10-K

TL;DR

<b>SCI Engineered Materials, Inc. has submitted its 2023 annual report on Form 10-K detailing its financial performance and business operations.</b>

AI Summary

SCI Engineered Materials, Inc. (SCIA) filed a Annual Report (10-K) with the SEC on February 9, 2024. SCI Engineered Materials, Inc. filed its annual report on Form 10-K for the fiscal year ended December 31, 2023. The filing covers the period from January 1, 2023, to December 31, 2023. The company's principal executive offices are located at 2839 Charter Street, Columbus, OH 43228. SCI Engineered Materials, Inc. was formerly known as SUPERCONDUCTIVE COMPONENTS INC, with a name change date of September 18, 2000. The SIC code for the company is 3620, Electrical Industrial Apparatus.

Why It Matters

For investors and stakeholders tracking SCI Engineered Materials, Inc., this filing contains several important signals. This 10-K filing provides a comprehensive overview of SCI Engineered Materials, Inc.'s financial health, operational performance, and strategic direction for the fiscal year 2023, which is crucial for investors to assess the company's current standing and future prospects. The detailed information within the filing, including financial statements and risk factors, allows stakeholders to make informed investment decisions and understand the company's compliance with regulatory requirements.

Risk Assessment

Risk Level: medium — SCI Engineered Materials, Inc. shows moderate risk based on this filing. The company's 10-K filing indicates a need for detailed financial and operational review, suggesting potential complexities or areas requiring investor scrutiny, typical for annual reports of this nature.

Analyst Insight

Investors should carefully review the financial statements and risk factors within the 10-K filing to understand SCI Engineered Materials, Inc.'s performance and potential challenges in the upcoming fiscal year.

Key Numbers

• 2023-12-31 — Fiscal Year End (Reporting period)
• 2024-02-09 — Filing Date (Date of submission)
• 2000-09-18 — Date of Name Change (From SUPERCONDUCTIVE COMPONENTS INC)

Key Players & Entities

• SCI Engineered Materials, Inc. (company) — Filer name
• SUPERCONDUCTIVE COMPONENTS INC (company) — Former company name
• 2839 Charter Street, Columbus, OH 43228 (location) — Business address
• 3620 (industry_code) — Standard Industrial Classification

FAQ

Industry Context

SCI Engineered Materials, Inc. operates in the Electrical Industrial Apparatus sector, manufacturing specialized materials.

Regulatory Implications

The filing is made in accordance with the Securities Exchange Act of 1934, requiring public companies to submit annual reports to the SEC.

What Investors Should Do

1. Review the detailed financial statements within the 10-K for the fiscal year ended December 31, 2023.
2. Analyze the risk factors section to understand potential challenges and uncertainties facing the company.
3. Compare the current year's performance with previous periods to identify trends and assess growth or decline.

Key Dates

• 2023-12-31: Fiscal Year End — End of the reporting period for the 10-K filing.
• 2024-02-09: Filing Date — Date the 10-K was officially filed with the SEC.

Glossary

10-K

An annual report required by the U.S. Securities and Exchange Commission (SEC), which gives a comprehensive summary of a company's financial performance. (This filing provides the official annual financial and business overview for SCI Engineered Materials, Inc.)

SIC Code

Standard Industrial Classification code used to classify industries. (Identifies SCI Engineered Materials, Inc. as operating within the Electrical Industrial Apparatus sector.)

Year-Over-Year Comparison

This is the initial filing analyzed for the fiscal year 2023. No prior period comparison data is available from this specific document.

Key Financial Figures

• $27,984,083 — ember 31, 2023, we had total revenue of $27,984,083 compared to $23,467,030 for the year en
• $23,467,030 — otal revenue of $27,984,083 compared to $23,467,030 for the year ended December 31, 2022. H
• $2,188,899 — 3 we reduced our accumulated deficit by $2,188,899 to $1,915,694 at December 31, 2023. Man
• $1,915,694 — ur accumulated deficit by $2,188,899 to $1,915,694 at December 31, 2023. Management's plan

Filing Documents

• scia-20231231x10k.htm (10-K) — 1143KB
• scia-20231231xex4dd.htm (EX-4.(D)) — 5KB
• scia-20231231xex23d1.htm (EX-23.1) — 3KB
• scia-20231231xex24.htm (EX-24) — 22KB
• scia-20231231xex31d1.htm (EX-31.1) — 16KB
• scia-20231231xex31d2.htm (EX-31.2) — 17KB
• scia-20231231xex32d1.htm (EX-32.1) — 9KB
• scia-20231231xex32d2.htm (EX-32.2) — 9KB
• scia-20231231xex99d1.htm (EX-99.1) — 248KB
• scia-20231231xex99d1001.jpg (GRAPHIC) — 5KB
• 0001558370-24-000916.txt (&nbsp;) — 5948KB
• scia-20231231.xsd (EX-101.SCH) — 39KB
• scia-20231231_cal.xml (EX-101.CAL) — 73KB
• scia-20231231_def.xml (EX-101.DEF) — 123KB
• scia-20231231_lab.xml (EX-101.LAB) — 383KB
• scia-20231231_pre.xml (EX-101.PRE) — 285KB
• scia-20231231x10k_htm.xml (XML) — 847KB

Business

Business 3 Item 1A.

Risk Factors

Risk Factors 7 Item 1B. Unresolved Staff Comments 14 Item 1C. Cybersecurity 14 Item 2.

Properties

Properties 15 Item 3.

Legal Proceedings

Legal Proceedings 15 Item 4. Mine Safety Disclosures 15 Part II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities 15 Item 6. Reserved 16 Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 16 Item 7A.

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 19 Item 8.

Financial Statements and Supplementary Data

Financial Statements and Supplementary Data 19 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 19 Item 9A.

Controls and Procedures

Controls and Procedures 19 Item 9B. Other Information 20 Item 9C Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 20 Part III Item 10. Directors, Executive Officers, and Corporate Governance 20 Item 11.

Executive Compensation

Executive Compensation 21 Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 21 Item 13. Certain Relationships and Related Transactions, and Director Independence 21 Item 14. Principal Accountant Fees and Services 21 Item 15. Exhibits and Financial Statement Schedules 22

Signatures

Signatures 23 Note Regarding Forward-Looking Statements This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 26A of the Securities Act of 1933, as amended. The words "anticipate," "believe," "expect," "estimate," and "project" and similar words and expressions identify forward-looking statements, which speak only as of the date hereof. Investors are cautioned that such statements involve risks and uncertainties that could cause actual results to differ materially from historical or anticipated results due to many factors, including, but not limited to, the factors discussed in "Risk Factors." The Company undertakes no obligation to publicly update or revise any forward-looking statements. 2 Table of Contents PART I

BUSINESS

ITEM 1. BUSINESS Introduction SCI Engineered Materials, Inc. ("SCI", "we" or the "Company"), an Ohio corporation, was incorporated in 1987. We operate in one segment as a global supplier and manufacturer of advanced materials for Physical Vapor Deposition ("PVD") thin film applications. We are focused on markets within the PVD industry including Aerospace, Automotive, Defense , Glass, Optical Coatings, and Solar. Substantially all revenues are generated from customers with multi-national operations. The Company develops innovative customized solutions enabling commercial success through collaboration with end users and Original Equipment Manufacturers. History of the Company The late Dr. Edward Funk, Sc.D., and his late wife Ingeborg founded SCI in 1987. Dr. Funk, formerly a Professor of Metallurgy at The Ohio State University and a successful entrepreneur, envisioned significant market potential for the then newly discovered High Temperature Superconductivity ("HTS") material YBCO (T c of 90 o K). Our first product was a 99.999% pure, co-precipitated YBCO 1-2-3 powder. Over the years we expanded our product line by adding other High T c Powders, sintered shapes, single crystal substrates, and non-superconducting sputtering targets. At this time, we are not pursuing this market, but these early years of development are the foundation on which our material science experience is built. We opened a subdivision, Target Materials Inc. ("TMI"), in 1991 to supply the increasing worldwide demand for sputtering and laser ablation targets. We became a full-service manufacturer of high-performance thin film materials, providing a wide selection of metals, ceramics, and alloys for sputtering targets, evaporation sources, and other PVD applications. We served the Research and Development market as well as the Industrial and Decorative Coating markets. During this time, we began to manufacture targets for the photovoltaic, flat panel display, and semiconductor industries

Business

Business We are a supplier of materials to the PVD industry. Customers need our materials to produce nano layers of metals and oxides for advanced material systems. Applications for PVD coatings range from everyday items to complex computer processors. Every day applications include automotive, transparent anti-scratch coatings on eyeglasses, coatings on kitchen faucets, as well as low emissivity glass for household windows and commercial buildings. More technically advanced applications include aerospace, defense, flat panel display, photonics, semiconductors, and thin film solar products. We are pursuing niche opportunities where our core competencies give us an advantage and complement our manufacturing capabilities allowing us to enter new markets with minimal capital investment. This disciplined approach enables us to focus on those opportunities that are the best fit for our capabilities and offer the greatest long-term return. Considerations include our core strengths, resource requirements, and time-to-market. 3 Table of Contents The Photonics industry includes a number of diverse markets which represents the best fit for our applications. We and our customers are continually identifying new materials that improve the utility of optical coatings. This includes improvements in their ability to focus, filter or reflect light, all of which increase the potential demand for the types and volume of products we sell in this market. Photonic applications continue to expand as new methods are found to manipulate light waves to enhance the various applications. We continue to invest in developing new products for SCI's chosen markets with emphasis on accelerating time to market. For the year ended December 31, 2023, we had total revenue of $27,984,083 compared to $23,467,030 for the year ended December 31, 2022. Higher volume was the key factor that contributed to the increase. Our largest customer represented approximately 78% of total revenues in 2023 an

RISK FACTORS

ITEM 1A. RISK FACTORS We operate in a dynamic and rapidly changing environment that involves numerous risks and uncertainties. Certain factors may have a material adverse effect on our business, prospects, financial condition, and results of operations, and you should carefully consider them. Accordingly, in evaluating our business, we encourage you to consider the following discussion of risk factors, in its entirety, in addition to other information contained in this Annual Report on Form 10-K and our other public filings with the Securities and Exchange Commission (the "SEC"). Other events that we do not currently anticipate or that we currently deem immaterial may also affect our business, prospects, financial condition, and results of operations. We desire to take advantage of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. The following factors have affected or could affect actual results and could cause such results to differ materially from those expressed in any forward-looking statements made. Investors should consider the following risks and speculative factors inherent in and affecting the business of SCI and an investment in our common stock. Risks Relating to the Company We have had operating losses in the past and may incur losses in the future. Prior to 2017, the Company frequently reported annual net losses. Our results for 2023 reflect the seventh consecutive year of net income; however, while assurances cannot be provided that we will be able to operate profitably in the future, management continuously monitors business conditions and responds through proactive actions. We continue to invest in developing new products for all our markets. These efforts include accelerating time to market for those products and involve ongoing research and development expense. During 2023 we reduced our accumulated deficit by $2,188,899 to $1,915,694 at December 31, 2023. Management's plans include continuing to grow

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View this 10-K filing on SEC EDGAR