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EX-32.1 - EXHIBIT 32.1 - HYBRID Coating Technologies Inc.exhibit32-1.htm
EX-31.1 - EXHIBIT 31.1 - HYBRID Coating Technologies Inc.exhibit31-1.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: March 31, 2014

or

[   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________to _____________

Commission File Number: 000-53459

HYBRID COATING TECHNOLOGIES INC.
(Exact name of registrant as specified in its charter)

NEVADA 20-3551488
(State of other jurisdiction of incorporation or organization) (IRS Employer Identification Number)

950 John Daly Blvd. Suite 260
Daly City, CA 94015
(Address of principal executive offices)

(650) 491-3449
(Registrant's telephone number, including area code)

Securities registered under Section 12(b) of the Exchange Act: None

Securities registered under Section 12(g) of the Exchange Act:
Common Stock, $ 0.001 par value

     Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes [X]                             No [   ]

     Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer. See definition of "accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange Act.


Large accelerated filer [   ]

Accelerated filer [   ]
Non-accelerated filer [   ] Smaller reporting company [X]

16,001,020 shares of the issuer’s common shares, par value $.001 per share, were issued and outstanding as of May 20, 2014.


TABLE OF CONTENTS

  PART I. FINANCIAL INFORMATION  
     
Item 1. Consolidated Financial Statements  
  Consolidated Balance Sheets (Unaudited) 3
  Consolidated Statements of Operations (Unaudited) 4
  Consolidated Statements of Cash Flows (Unaudited) 5
  Notes to Consolidated Financial Statements (Unaudited) 7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 16
Item 3 Quantitative and Qualitative Disclosures About Market Risk 19
Item 4. Controls and Procedures 19
     
  PART II. OTHER INFORMATION  
     
Item 1. Legal Proceedings 21
Item 1a. Risk factors 21
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 21
Item 3. Defaults Upon Senior Securities 21
Item 4. Mine Safety Disclosures 21
Item 5. Other Information 21
Item 6. Exhibits 22


PART I 

ITEM 1. FINANCIAL STATEMENTS

The accompanying unaudited consolidated balance sheet of Hybrid Coating Technologies Inc. as of March 31, 2014 and the related unaudited consolidated statements of operations, and cash flows for the three months ended March 31, 2014 and the period from July 8, 2010 (inception) to March 31, 2014 have been prepared by management in conformity with accounting principles generally accepted in the United States. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature. Operating results for the period ended March 31, 2014, are not necessarily indicative of the results that can be expected for the fiscal year ending December 31, 2014 or any other subsequent period.


Hybrid Coating Technologies Inc.
(A Development Stage Company)
Consolidated Balance Sheets
March 31, 2014
(Unaudited)

ASSETS

  March 31, 2014     December 31, 2013  

 

           

Intangible assets, net of accumulated amortization

$  408,550   $  444,940  

 

           

TOTAL ASSETS

$  408,550   $  444,940  

LIABILITIES AND STOCKHOLDERS’ DEFICIT

           

Current liabilities

           

Bank indebtedness

$  7,727   $  7,706  

Accounts payable and accrued liabilities

  486,767     564,289  

Accounts payable and accrued liabilities-related parties

  530,876     491,178  

Deferred revenue

  20,000     20,000  

Stock payable

  15,000     15,000  

Senior secured convertible debentures

  200,000     200,000  

Loans payable net of unamortized discount of $0 and $5,455 respectively

  977,500     972,045  

Loans payable - shareholders net of unamortized discounts and premiums of $9,577 and $21,980, respectively

1,506,581 1,343,562

Note payable – related party

  612,451     682,451  

    Total current liabilities

  4,356,902     4,296,231  

Convertible debentures

  1,396,858     1,396,858  

Derivative liability

  470,836     816,488  

Total liabilities

  6,224,596     6,509,577  

Commitments and contingencies

           

STOCKHOLDERS’ DEFICIT

           

Common stock, $0.001 par value, 75,000,000 shares authorized, 14,356,528 shares and 11,167,513 shares issued and outstanding , respectively

14,357 11,168

Additional paid-in capital

  12,385,725     10,712,971  

Deficit accumulated during development stage

  (18,216,128 )   (16,788,776 )

Total stockholders’ deficit

  (5,816,046 )   (6,064,637 )

TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT

$  408,550   $  444,940  

The accompanying notes are an integral part of these consolidated financial statements.

3


Hybrid Coating Technologies Inc.
(A Development Stage Company)
Consolidated Statements of Operations
For the Three Months ended March 31, 2014 and 2013
and the Period from July 8, 2010 (Inception) through March 31, 2014
(Unaudited)

    Three months ended     Three months ended     July 8, 2010
(inception) through
 
    March 31, 2014     March 31, 2013     March 31, 2014  
Revenues $  29,370   $  2,778   $  138,163  
Cost of sales   1,994     1,250     71,344  
Gross-margin   27,376     1,528     66,819  
Operating expenses                  
   General and administrative   605,946     504,388     11,029,485  
    Impairment of intangible assets   -     -     631,917  
   Amortization of intangible assets   36,390     54,660     709,533  
                   
Total operating expenses   642,336     559,048     12,370,935  
Loss from operations   (614,960 )   (557,520 )   (12,304,116 )
Warrant modification expense   -     -     (241,697 )
Loss on extinguishment of debt   (1,018,529 )   (10,169 )   (2,403,832 )
Change in fair value of derivative liability   345,652     (6,232 )   519,534  
Gain on foreign currency   2,430     -     4,500  
Interest expense   (141,945 )   (200,390 )   (3,790,517 )
Net loss $  (1,427,352 ) $  (774,311 ) $  (18,216,128 )
Basic and diluted net loss per common share $  (0.11 ) $  (0.12 )      
Basic and diluted weighted average number common of shares   13,325,668     6,560,633        

The accompanying notes are an integral part of these consolidated financial statements.

4


Hybrid Coating Technologies Inc.
(A Development Stage Company)
Consolidated Statements of Cash Flows
For the Three Months ended March 31, 2014 and 2013
and the Period from July 8, 2010 (inception) through March 31, 2014
(Unaudited)

    Three months ended     Three months ended     July 8, 2010
(inception) through
 
    March 31, 2014     March 31 ,2013     March 31, 2014  

CASH FLOWS FROM OPERATING ACTIVITIES

                 

Net loss

$  (1,427,352 ) $  (774,311 ) $  (18,216,128 )

Adjustments to reconcile net loss to net cash used in operating activities:

             

 Stock-based compensation

  338,250     228,509     6,493,260  

 Warrant modification expense

  -     -     241,697  

 Impairment of samples and supplies

  -     -     10,136  

 Interest paid through issuance of shares

  -     11,949     303,143  

 Amortization of intangible asset

  36,390     54,660     709,533  

 Impairment of intangible assets

  -     -     631,917  

 Loss on extinguishment of debt

  1,018,529     10,169     2,403,832  

 Interest expense from revaluation of SSCD warrants

  -     -     1,180,886  

 Change in fair value of derivative liability

  (345,652 )   6,232     (519,534 )

 Interest expense on beneficial conversion feature related to SSCD warrants

  -     -     126,607  

 Interest imputed from notes payable - related party

  32,000     34,714     334,916  

 Incentive and interest paid on prepayment of debt

  -     -     25,833  

 Amortization of debt discounts

  17,859     75,882     1,030,168  

 Gain on Foreign currency

  (2,430 )   -     (4,500 )

 Change in operating assets and liabilities:

                 

      Samples and supplies

  -     -     (10,136 )

      Accounts payable and accrued liabilities

  206,402     44,664     1,018,144  

      Accounts payable and accrued liabilities - related parties

  42,638     139,304     1,397,216  

      Bank indebtedness

  21     -     15,510  

      Deferred revenue

  -     -     20,000  

Net cash used in operating activities

  (83,345 )   (168,228 )   (2,807,500 )

 

                 

CASH FLOWS FROM INVESTING ACTIVITIES

                 

Proceeds from sale of intangible asset

  -     -     150,000  

Net cash provided in investing activities

  -     -     150,000  

 

                 

CASH FLOWS FROM FINANCING ACTIVITIES

                 

Proceeds from issuance of Convertible Debentures

  -     -     970,500  

Proceeds from Senior Secured Convertible Debentures

  -     -     400,000  

Proceeds from exercise of warrants

  300     -     25,675  

Proceeds from loans payable - shareholders

  308,111     340,670     2,748,853  

Repayments from loans payable - shareholders

  (155,066 )   (125,912 )   (1,279,954 )

Proceeds from loans payable

  -     -     1,018,375  

Repayments of note payable - related party

  (70,000 )   (46,530 )   (1,225,949 )

Net cash provided by financing activities

  83,345     168,228     2,657,500  

 

                 

INCREASE (DECREASE) IN CASH

  -     -     -  

 

                 

CASH, BEGINNING

  -     -     -  

CASH, ENDING

$  -   $  -   $  -  

The accompanying notes are an integral part of these consolidated financial statements.

5


Hybrid Coating Technologies Inc.
(A Development Stage Company)
Consolidated Statements of Cash Flows (continued)
For the Three Months ended March 31, 2014 and 2013
and the Period from July 8, 2010 (inception) through March 31, 2014
(Unaudited)

                July 8, 2010  
    Three months ended     Three months ended     (inception) through  
    March 31, 2014     March 31, 2013     March 31, 2014  
                   

Supplemental disclosure of cash flow information

                 

Cash paid during the period for:

                 

Interest

$  10,750   $  36,763   $  133,980  

Income taxes

$  -   $  -   $  -  

 

                 

Non cash financing transactions:

                 

Reclassification of bank overdrafts to payables

$  -   $ 16,037   $  8,500  

Acquisition of intangible asset through issuance of note payable

$  -   $  -   $  1,900,000  

Discount arising from warrants attached to issuance of SSCD

$  -   $  -   $  273,393  

Discount arising from loans payable - shareholders

$  -   $  9,148   $  140,531  

Reclassification of accrued interest to convertible debentures

$  -   $  -   $  -  

Discount arising from loans payable - shareholders

$  -   $  -   $  23,705  

Transfer of loans and SSCD to Convertible Debentures

$  -   $  -   $  310,000  

Reclassification of accrued interest to SSCD

$  -   $  -   $  14,167  

Fair value of derivative convertible debenture

$  -   $  -   $  604,969  

Reclassification of note payable to accounts payable

$  -   $  11,600   $  11,600  

Shares issued for premium on shareholder loans

$  -   $  -   $  64,000  

Common stock issued and payable for accounts payable

$  50,924   $ -   $  50,924  

Common stock issued and payable for interest accrual

$  2,940   $  -   $  172,989  

Common stock issued for settlement of accounts payable - related party

$  233,000   $  -   $  1,013,900  

Cashless exercise of warrants

$  150   $  -   $  1,043  

Warrants issued to pay shareholder loan

$  -   $  -   $  125,022  

Warrants issued for settlement of rent liability and prepaid rent

$  -   $  33,750   $  116,250  

The accompanying notes are an integral part of these consolidated financial statements

6


Hybrid Coating Technologies Inc.
(A Development Stage Company)
Notes to Consolidated Financial Statements
For the Three Months Ended March 31, 2014
(Unaudited)

NOTE 1 – NATURE OF BUSINESS AND BASIS OF PRESENTATION

Hybrid Coating Technologies Inc. (the “Company”, “HCT”) formerly EPOD Solar Inc., was incorporated in the State of Nevada on July 8, 2010.

The Company manufactures and sells under license, alternative non-toxic (isocyanate-free) polyurethane, Green Polyurethane™, including coatings and raw binder ingredients (Green Polyurethane® Monolithic Floor Coating and Green Polyurethane™ Binder).

The accompanying consolidated financial statements, which should be read in conjunction with the financial statements and footnotes of Hybrid Coating Technologies Inc., included in Form 10-K filed on May 2, 2014 with the Securities and Exchange Commission, are unaudited, but have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the period ended March 31, 2014 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2014.

Going Concern

The Company remains highly dependent upon funding from non-operational sources. The Company’s consolidated financial statements have been presented on the basis that it is a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company has incurred net losses of approximately $18,216,000 since inception, and has a working capital deficit of approximately $4,357,000 as of March 31, 2014. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of these uncertainties.

There are no assurances that the Company will be able to either (1) achieve a level of revenues adequate to generate sufficient cash flow from operations; or (2) obtain additional financing through either private placement, public offerings and/or bank financing necessary to support The Company’s working capital requirements. To the extent that funds generated from operations and any private placements, public offerings and/or bank financing are insufficient, the Company will have to raise additional working capital. No assurance can be given that additional financing will be available, or if available, will be on terms acceptable to the Company. If adequate working capital is not available the Company may be required to curtail or cease its operations.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation - The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America and are presented in US dollars. The Company’s fiscal year end is December 31.

Principles of Consolidation - The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Nanotech. All significant inter-company balances and transactions have been eliminated in the consolidated financial statements.

7


NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)

Development StageThe Company complies with Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”) 915 “Development Stage Entities” in its characterization of the Company as a development stage enterprise.

Use of EstimatesThe preparation of financial statements in conformity with generally accepted accounting principles requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported period. Actual results could differ from those estimates.

Intangible Assets - Intangible assets are comprised of intellectual property which is amortized on a straight-line basis over the asset respective life, 36 months, 60 months and 120 months. Intellectual property with a perpetual life in not amortized.

Impairment of Long-Lived Assets Long-lived assets to be held and used are reviewed for impairment on an annual basis or whenever events or changes in circumstances indicate that the carrying amount of such asset may not be recoverable. The determination of recoverability of long-lived assets is based on an estimate of undiscounted future cash flows resulting from the use of the asset or its disposition. Measurement of an impairment loss for long-lived assets that management expects to hold and use is based on the fair value of the asset. Long-lived assets to be disposed of are reported at the lower of carrying amount or net realizable value.

Revenue RecognitionRevenue is recognized when persuasive evidence of an arrangement exists, goods are delivered, sales price is determinable, and collection is reasonably assured.

Fair ValueASC 820 defines fair value, establishes a framework for measuring fair value and enhances disclosures about fair value measurements.  It defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:

Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities that are not active; and model-driven valuations whose inputs are observable or whose significant value drivers are observable. Valuations may be obtained from, or corroborated by, third-party pricing services.

Level 3: Unobservable inputs to measure fair value of assets and liabilities for which there is little, if any market activity at the measurement date, using reasonable inputs and assumptions based upon the best information at the time, to the extent that inputs are available without undue cost and effort.

As of March 31, 2014 and 2013, the significant inputs to the Company’s derivative liability calculation were Level 3 inputs.

Stock-Based CompensationFor stock and stock options awarded in return for services rendered, the expense is measured at the grant-date fair value of the award and recognized as compensation expense on a straight-line basis over the service period, which is the vesting period. The Company estimates forfeitures that it expects will occur and records expense based upon the number of awards expected to vest.

Earnings (Loss) Per Share - Basic net loss per share amounts are computed by dividing the net loss by the weighted average number of common shares outstanding over the reporting period. In periods in which the Company reports a net loss, dilutive securities are excluded from the calculation of diluted net loss per share amounts as the effect would be anti-dilutive.

8


For three months ended March 31, 2014 and 2013, the following convertible debt and warrants to purchase shares of common stock were excluded from the computation of diluted net loss per share, as the inclusion of such shares would be anti-dilutive:

    Three Months Ended  
    March 31,     March 31,  
    2014     2013  
Convertible debt   2,298,065     3,108,482  
Stock warrants   7,816,928     3,620,600  
    10,114,993     6,729,082  

Recently Issued Accounting Pronouncements The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company's results of operations, financial position or cash flow.

Subsequent Events – The Company has evaluated all transactions occurring from March 31, 2014 to the date of issuance of the consolidated financial statements for disclosure consideration.

9


NOTE 3 – INTANGIBLE ASSET

During 2010 and 2011, the Company acquired licensing rights from Nanotech Industries, Inc., (“NTI” or “Licensor”, a privately-held entity deemed a related party by virtue of common ownership and control), for the rights to manufacture and distribute environmentally safe coatings (“Coating Products”) using NTI’s technology. As part of the original licensing agreement signed on July 12, 2010 (see table below) the Company has the option to obtain rights for the rest of the world on an exclusive perpetual basis, in exchange for the issuance of stock to equal 62.5% of the Company’s total shares. If this option is exercised, NTI would obtain voting control of the Company.

Following is a summary of the licenses acquired to date from NTI:

          Carrying Carrying
          Value at Value at
  License Rights      Original March 31, December 31,
  Overview Licensed Region Term (date) of License Cost 2014 2013

A

Coating Products North America June 12, 2010
6 years   
$500,000 $0 $0

B

Coating Products Russian Territory March 17, 2011   
10 years   
$150,000 $33,200 $34,400

C

Coating Products European Continent July 7, 2011  
5 years  
$1,250,000 $375,350 $410,540

On October 18, 2011, the Company and NTI entered into a second Licensing Agreement (“Second Agreement”) granting the Company option (“Sealant Option”) to be exercised within six months of the signing of the Licensing Agreement, for the manufacturing and sale of environmentally safe adhesives and sealants (“Sealant Products”) as follows:

  1.

The Company shall issue to NTI a one-time licensing fee (“Sealant Shares”), an aggregate number of shares of the Company’s restricted common stock which shall give NTI, immediately upon such issuance of shares, an incremental 15% (fifteen percent) ownership stake in the Company.

     
  2.

The Company shall pay to NTI a royalty of 7.5% (seven and one half percent) of gross revenue from the sale of the Sealant Products (“Royalty”) for the duration of this Agreement.

On December 6, 2011, the Company notified NTI of its intent to exercise the Sealant Option. To date, the Company has not issued the Sealant Shares and the Sealant Option has expired. The Company intends to renegotiate the Sealant Option once the Company has determined it has commercial viability.

On June 28, 2013, the Company and NTI entered into a third amendment to the Licensing Agreement whereby NTI granted the Company an extension of thirty-six months on the exclusivity period to July 12, 2016.

On December 13, 2013, the Company entered into a fourth amendment to the Licensing Agreement, whereby the license to sell and manufacture the Licensor’s products has been expanded to include polyurethane foam for the textile industry.

On March 31, 2014, the Company and NTI entered into a fifth amendment to the Licensing Agreement, whereby the license to sell and manufacture Licensor’s products has been expanded to include synthetic leather, sealants and adhesives (“Added Applications”). In consideration for the Added Applications, the Company shall pay the Licensor an amount equal to $2,000,000, to be paid within 36 months of the execution of this Fifth Amendment Agreement. Should the Company not pay the consideration within the deadline, the Company shall lose all rights to the Added Applications. To date, the Company has not paid any consideration pertaining to the Added Applications.

On April 9, 2014, the Company signed a sixth amendment to the Licensing Agreement with NTI extending the terms of the note from 24 months to 42 months making it payable by May 29, 2015.

10


On May 6, 2014, the Company signed a seventh amendment to the Licensing Agreement with NTI whereby the license to sell and manufacture Licensor’s products has been expanded to include spray foam insulation (“SFI Application”). In consideration for the SFI Application:

  1)

The Company shall pay the Licensor an amount equal to $500,000, to be paid by May 6, 2015. Should the Company not pay the consideration within the deadline, the Company shall lose all rights to the SFI Application.

     
  2)

The Company shall issue to NTI an aggregate number of shares of common stock which shall give NTI, immediately upon such issuance of shares an additional 15% ownership stake in the Company (“15% Share Issuance”), to be issued to the Licensor within 24 months of the execution of the seventh amendment agreement. Should the 15% Share Issuance not be issued within the deadline, the Company shall lose the exclusivity to the Manufacturing and Sale (both terms as defined in the Agreement) for SFI and shall solely retain such rights to SFI on a non-exclusive basis.

Activity related to intangibles is as follows for the three months ended March 31, 2014 and 2013:

    March 31,     March 31,  
    2014     2013  
Intangible assets, net, beginning of period $  444,940   $  628,963  
     Purchases   -     -  
     Sale   -     -  
     Less: current amortization   (36,390 )   (54,660 )
Total intangible assets, net, end of period $  408,550   $  572,303  

The balance of intangible assets, net is as follows:

    March 31, 2014     December 31, 2013  
Intangible assets $  1,118,083   $  1,118,083  
Less, accumulated amortization   (709,533 )   (673,143 )
Intangible assets, net $  408,550   $  444,940  

NOTE 4 – LOANS PAYABLE

Loans payable include a loan from a non-related party that was issued for $75,000 on November 16, 2010 and was repayable on May 16, 2011 with a 10% premium. This $7,500 premium has been amortized and on April 29, 2011, the lender converted $55,000 of this debt to convertible debentures. The balance at March 31, 2014 and December 31, 2013 was $27,500, and the loan is currently in default. The Company has not received any notices from the loan holder with respect to the defaults.

In 2012, the Company entered into various loan agreements totaling $681,500 at interest rates ranging from 15%-25%. These loans are all currently in default. The creditors have not called these loans.

In 2013, the Company entered into various loan agreements totaling $268,500, at interest rates ranging from 15%-16%. These loans are all currently in default. The creditors have not called these loans.

The Company recorded $5,455 and $7,229 of interest expense related to the debt discount during the three months ended March 31, 2014 and 2013, respectively. At March 31, 2014, the unamortized debt discount was $0 compared to $5,455 as of December 31, 2013.

NOTE 5 – LOANS PAYABLE – SHAREHOLDERS

During the year ended December 31, 2013, the Company received $708,846 in shareholders advances and repaid $360,696. Except for a loan maturing in June 2014 in the amount of $82,667, the loans are all due and in default. The creditors have not called these loans.

During the first quarter ended March 31, 2014, the Company received $308,111 in shareholder loans and repaid $155,066.

11


During the three months ended March 31, 2014 and 2013, the Company recorded interest expense related to the amortization of debt discounts of $12,404 and $16,900, respectively, related to all loans from shareholders. The Company had an outstanding balance of $1,506,581 and $1,343,562, with related discounts of $9,577 and $21,980 as of March 31, 2014 and December 31, 2013, respectively.

NOTE 6 –CONVERTIBLE DEBENTURES

On April 29, 2011, the Company issued convertible debentures for proceeds of $1,201,000 (the “April 29” debenture) and on February 21, 2012, issued an additional $119,500 (the “Feb 21” debenture and together the “Debentures”) with a maturity of 36 months and a coupon rate of 10% per annum payable in cash or capital stock at the Company’s discretion. The debentures are held by third parties and by non-controlling shareholders, and are convertible as follows:

April 29, 2011 convertible debentures

-by dividing the conversion amount by a conversion factor of 1.4 yielding Units of the Company where each Unit (at a price of $1.40 per Unit), is comprised of 1 share of common stock and one half of a warrant to purchase a share of common stock of the Company with an exercise price of $2.00 per share and a maturity at April 29, 2014. Warrants are exercisable at the option of the holder at any time prior to maturity.

February 21, 2012 convertible debentures:

-by dividing the conversion amount by a conversion factor of 1.45 yielding Units of the Company where each Unit (at a price of $1.45 per Unit), is comprised of 1 share of common stock and one half of a warrant to purchase a share of common stock of the Company with an exercise price of $2.10 per share and a maturity at February 21, 2015. Warrants are exercisable at the option of the holder at any time prior to maturity.

Both debentures carry an anti-dilution provision. The conversion price applicable to the debentures is subject to reset in the event of a Dilutive Issuance (as defined in the debenture agreement) by the Company. A Dilutive Issuance excludes shares or options issued to employees, officers, directors or consultants pursuant to stock option plans approved by the Board of Directors.

The Company recorded a corresponding discount of $46,721 and $558,248 against the carrying value of the convertible debentures during the years ended December 31, 2012 and 2011, respectively. The discounts are amortized using the effective interest method over the term of the debt.

On November 20, 2013, the Company entered in an amendment agreement modifying its terms with both the April 29 and Feb 21 debenture holders as follows:

1) The maturity date of the Debentures was extended by a period of 24 months to April 29, 2016 and February 21, 2017, respectively.

2) Each Unit into which the Debentures are convertible shall be comprised of 2 stock purchase warrants at an exercise price per share equal to the conversion price. The warrants shall expire 36 months from the date of issuance.

As consideration for the amendments, the Company issued a total of 400,152 shares to the debenture holders at a price of $0.33 per share.

The amendment resulted in an extinguishment of both the April 29 and Feb 21 Debentures as the present value of the new convertible debentures exceeded the present value of the old debentures by greater than 10%.

The Company measured the fair value of the embedded derivatives in the April 29 Debentures, which was $76,322 on the date of the amendments and recorded a gain of $61,238 for the change in fair value of the derivative liabilities.

The Company recorded a loss on extinguishment of debt on the April 29 debenture of $530,541 and the new debt was recorded at its fair value of $1,268,453 with a corresponding derivative liability of $357,790.

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The Company measured the fair value of the embedded derivatives in the Feb 21 debentures, which was $23,090 on the date of the amendments and recorded a gain of $6,071 for the change in fair value of the derivative liabilities.

The Company recorded a loss on extinguishment of debt on the Feb 21 debenture of $113,195 and the new debt was recorded at its fair value of $128,405 with a corresponding derivative liability of $102,150.

Interest of $32,560 has been accrued for both the quarters ended March 31, 2014 and March 31, 2013. No interest payments were made during the three months ended March 31, 2014. Interest payments will be made during the second quarter ended June 30, 2014. During the three months ended March 31, 2013, $11,949 in interest was paid through the issuance of 29,875 shares of common stock. The balance of the debentures both at March 31, 2014 and December 31, 2013 was $1,396,858.

NOTE 7 – SENIOR SECURED CONVERTIBLE DEBENTURES

On August 16, 2010, the Company entered into a securities purchase agreement with a third party for the subscription of senior secured convertible debentures (“SSCD”) for an amount of $400,000. The debentures have a maturity date of August 16, 2012 with a coupon of 10% and convert at the option of the holder into shares of common stock of the Company at a price of $0.75 per share. The notes are secured by all assets of the Company. The subscriber also received 533,336 Series A warrants with a maturity of 1 year and an exercise price of $1.25 and 133,360 Series B warrants with a term of 3 years and an exercise price of $1.50. The debentures and Series A warrants carry registration rights whereby upon the consummation of the reverse merger with Nanotech, the shares underlying the debentures and Series A warrants will be registered as soon as is practicable. All prices and warrants issued have been adjusted for the post-acquisition of Nanotech by HCT.

The Company is in default of payment of the debentures which matured on August 16, 2012. No notices have been issued by the debenture holder.

The obligations of the Company under the SSCD will rank senior to all outstanding and future indebtedness of the Company and shall be secured by a first priority, perfected security interest in all the assets of the Company.

NOTE 8 – DERIVATIVE LIABILITIES

The embedded conversion features in the convertible debentures and attached warrants are accounted for as a derivative liability. The warrants contain full ratchet reset features (subject to adjustment for dilutive share issuances) and should be valued as a derivative liability.

The valuation of the derivative liability attached to the Debentures arrived at through the use of multinomial lattice models based on a probability weighted discounted cash flow model. These models are based on future projections of the various potential outcomes. The features in the note that were analyzed and incorporated into the model included the conversion feature with the reset provisions and the call/redemption options. Based on these features, there are six primary events that can occur: payments are made in cash; payments are made with stock; the holder converts upon receiving a change notice; the holder converts the note; the Issuer redeems the note; or the company defaults on the note.

The model analyzed the underlying economic factors that influenced which of these events would occur, when they were likely to occur, and the specific terms that would be in effect at the time (i.e. interest rates, stock price, conversion price, etc.). Projections were then made on these underlying factors which led to a set of potential scenarios. Probabilities were assigned to each of these scenarios over the remaining term of the note based on management projections. This led to a cash flow projection over the life of the note and a probability associated with that cash flow. A discounted weighted average cash flow over the various scenarios was completed, and it was compared to the discounted cash flow of the note without the embedded features, thus determining a value for the derivative liability of $558,248 as of April 29, 2011 and of $46,721 at February 21, 2012, which was recorded to additional paid-in capital for each issuance. The Company recorded an unrealized gain (loss) of ($264,366) and $360,461 to reflect the value of the derivative liability as $816,488 and $166,721 as of December 31, 2013 and 2012, respectively. To reflect the change in fair value for the quarter ended March 31, 2014, the Company recorded a gain of $345,652.

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The following table sets forth a reconciliation of changes in the fair value of financial assets and liabilities classified as Level 3 in the fair value hierarchy:

    Significant Unobservable Inputs  
    (Level 3)  
    Three Months Ended March 31,  
    2014     2013  
Beginning balance $  816,488   $  166,721  
Total (gains) and losses   (345,652 )   6,232  
Settlements   -     -  
Additions   -     -  
Transfers   -     -  
Ending balance $  470,836   $  172,953  
             
Change in unrealized gains (losses) included in earnings relating to derivatives still held as of March 31, 2014 and 2013 $ 345,652 (6,232 )

NOTE 9– STOCKHOLDERS’ DEFICIT

During the three months ended March 31, 2014, the Company issued a total of 2,330,000 shares of common stock to a shareholder-creditor and a related party for payment, based on the market price on the date of grant, against accounts payable and accrued liabilities related parties of $233,000 and recognized a loss on settlement in the amount of $972,600. The Company issued 154,315 shares of common stock to an officer as payment based on the market price on the date of grant, against payroll liabilities (included in accounts payable and accrued liabilities) of $50,924 and recognized a loss on settlement in the amount of $41,666. The Company issued 240,334 shares to consultants as payment for services with a fair value of $113,750 based on the market price on the date of grant, and 14,700 shares of common stock to a shareholder- creditor for accrued interest of $2,940 and recognized a loss on settlement in the amount of $4,263 based on the market price on the date of grant.

In addition, during the three months ended March 31, 2014, warrant holders exercised 150,000 warrants for 149,666 shares on a cashless basis with a reduction in additional paid in capital of $150. Also, 300,000 shares were issued from the exercise of warrants for cash proceeds of $300.

Warrants

A summary of the activity in the Company's warrants during the three months ended March 31, 2014 is presented below:

    Number of     Weighted Average  
    Warrants     Exercise Price  
             
Outstanding and exercisable, at December 31, 2013   8,266,928   $ 0.12  
Exercised   (450,000 ) $ .001  
Outstanding and exercisable, at March 31, 2013   7,816,928   $ 0.12  

In addition to these regular warrants, the 533,336 Series A warrants with an exercise price of $0.125 per share and a maturity date of February 14, 2014 expired during the three months ended March 31, 2014.

During the three months ended March 31, 2014, the Company recorded $224,500 for amortization of warrants expense.

The intrinsic value of warrants outstanding at March 31, 2014 was $1,701,583.

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Contingent Warrant Issuance

On July 20, 2012, the Company’s board of directors approved the issuance of 300,000 stock purchase warrants, exercise price of $0.001 per share and five-year life, from date of issuance, to the Company’s President, Joseph Kristul, contingent on his successful negotiation of a major sales contract (as defined in board minutes). The major sales contract agreement has not yet been reached by the Company.

NOTE 10– RELATED PARTY TRANSACTIONS

Fees charged by Shareholder

During the three months ended March 31, 2014 and 2013, the Company was charged $191,000 and $123,000, respectively by an outside consultant, who is also a shareholder, for professional fees, expenses and commissions. The amounts are included in accounts payable and accrued liabilities to related parties. The Company has an outstanding balance as of March 31, 2014 and December 31, 2013 of $418,222 and $427,842, respectively.

Principal Debt Payments

During the three months ended March 31, 2014, the Company made principal payments of $70,000 on its note payable to NTI related to the 2011 acquisition of the license rights for coatings in Europe. The note matures on May 29, 2015, does not bear interest, and no payments are required prior to maturity. The balance of the note was $612,451 and $682,451 at March 31, 2014 and December 31, 2013, respectively.

Shared Administrative Costs

The Company shares office space and certain personnel with NTI. Costs are allocated among the parties based on usage. Rent expense for the quarters ended March 31, 2014 and 2013 was $11,250.

NOTE 11– SUBSEQUENT EVENTS

Subsequent to the three months ended March 31, 2014, the Company has issued the following shares:

-1,600,000 shares of common stock valued on the dates of issuances for approximately $384,000. $80,000 as payment for accounts payable and accrued liabilities to a related party and the remaining $304,000 was recorded as loss on extinguishment of debt.

-15,000 shares valued at $4,050 to a shareholder for consulting services;

-29,492 shares valued at $9,143 to a secured lender for interest on a loan; All shares issued were valued using the market price on the date of grant.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward Looking Statements

The Management’s Discussion and Analysis (“MD&A”) is designed to assist investors in understanding the nature and the importance of the changes and trends, as well as the risks and uncertainties associated with the Company’s operations and financial position. Some sections of this report contain forward-looking statements that, because of their nature, necessarily involve a number of known and unknown risks and uncertainties, including statements regarding our capital needs, business strategy and expectations, and the factors described under “Risk Factors” contained in the Company’s Form 10-K Report filed May 2, 2014. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. In some cases, forward-looking statements can be identified by terminology such as “may,” “will,” “should,” “expect,” “plan,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential” or “continue,” the negative of such terms or other comparable terminology. The Company’s actual and future results could therefore differ materially from those indicated or underlying these forward-looking statements.

Although the Company deems the expectations reflected in these forward-looking statements to be reasonable, the Company cannot provide any guarantee as to the materialization of the expectations reflected in these forward-looking statements.

The following information should be read in conjunction with the unaudited financial statements for the period ended March 31, 2014 and notes thereto. Unless otherwise indicated or the context otherwise requires, the "Company," “HCT,” “we," "us," and "our" refer to Hybrid Coating Technologies Inc.

Compliance with Generally Accepted Accounting Principles

Unless otherwise indicated, the financial information presented below, including tabular amounts, is expressed in US dollars and prepared in accordance with accounting principles generally accepted in the United States (“GAAP”).

Use of Estimates

The preparation of financial statements in conformity with GAAP requires that management make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities as at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Critical items of the financial statements that require the use of estimates include the determination of the allowance for doubtful accounts, the determination of the allowance for inventory obsolescence, the determination of the useful life of fixed and intangible assets for amortization calculation purposes, the assumptions for fixed asset impairment tests, the determination of the allowance for guarantees, the determination of the allowance for income taxes, the assumptions used for the purposes of calculating the stock-based compensation expense, the determination of the fair value of financial instruments, the determination of the fair value of the assets and liabilities acquired on business acquisitions and the implicit fair value of goodwill.

The financial statements include estimates based on currently available information and management’s judgment as to the outcome of future conditions and circumstances.

Changes in the status of certain facts or circumstances could result in material changes to the estimates used in the preparation of the financial statements and actual results could differ from the estimates and assumptions.

Changes in Accounting Principles

No accounting changes were adopted during the period ended March 31, 2014.

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Overview

Company Background

HCTs principal office is located in Daly City, California, U.S.A.

As of March 31, 2014, HCT had 2 employees.

HCT offers an alternative to toxic formulations of polyurethane (PU) worldwide through its exclusive distribution rights which provide for a cost-effective alternative non-toxic (isocyanate-free) polyurethane, Green Polyurethane™. Its focus is within the C.A.S.E. segment specifically for large industrial and commercial coatings applications where Green Polyurethane™ has a natural competitive advantage over other PU and epoxy coatings due to its superior chemical resistance and environmentally safe properties with reduced health risks.

The Company’s ultimate goal is to license its proprietary Green Polyurethane™ formulation to national and/or global coatings formulators and then focus on rolling out the commercialization of other Green Polyurethane™ applications such as adhesives and sealants. In order to achieve this, the Company is proving the validity of its products through direct sales and is therefore targeting large distributors and multiple client bases. The Company intends to focus within the C.A.S.E. segment specifically for large industrial and commercial coatings applications where Green Polyurethane™ has a natural competitive advantage over other polyurethane ("PU") and epoxy coatings due to its superior chemical resistance and environmentally safe properties with reduced health risks. Some of the target applications for Green Polyurethane™ products markets include:

  • Industrial and commercial buildings
  • Civil applications for tunnels and bridges
  • Private and public garages
  • Chemical and food processing plants
  • Warehouses
  • Monolithic floorings for civil, industrial and military engineering
  • Marine and Aeronautic applications
  • Industrial equipment for dairy and liquid fertilizer processing plants and delivery systems
  • Military facilities and equipment
  • Protective coatings inside industrial and commercial pipes

The Company’s business growth model includes a two-pronged strategy of direct sales and licensing. HCT’s ultimate goal is to license our proprietary formulation to national or global coatings formulators. In order to achieve this it is proving the validity of its products through direct sales.

In addition, the Company plans to:

  • Increase the number of contractors and applicators contacted
  • Contact paint formulators and offer Green Polyurethane® Binder for their proprietary formulations
  • Establish distribution channels utilizing existing distribution hubs
  • Sub-license technology in certain geographic areas.

HCT intends to establish full commercial-scale manufacturing for both of its products at Adhpro Adhesives in Magog, Quebec and Simpson Coatings in California through non-exclusive toll manufacturing agreements.

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HCT’s strategy is to avoid large capital investments in manufacturing and to outsource the manufacturing of the EPOD Products to third-party manufacturers. At current capacity, the Company can outsource the manufacture of up to 20,000 tons per year.

HCT is currently at the commencement of the commercialization phase of its business model. HCT plans on significantly expanding its sales and client base by promoting the NTI Products at trade unions, press and trade shows and by capitalizing on existing distribution hubs to increase its distribution channels and build new strategic relationships. The Company expects to have significant sales by the end of 2014.

Results of Operation

HCT is a developmental stage company and as such does not yet have any revenues. Management is in talks with prospective clients and the Company expects to have revenues in this fiscal year. For the period January 1 through March 31, 2014 : the Company had sample sales of $29,370 and associated cost of sales of $1,994, general and administration expenses totaling $605,946, after removing stock–based compensation of $338,250 amounted to $267,695, with only non-cash charges related to the amortization of intangible asset of $36,390, amortization of debt discounts of $17,859, imputed interest on notes payable – related party of $32,000 (all included in interest expense of $141,945) loss on extinguishment of debt $1,018,529, a gain on foreign currency of $2,430, and a gain in the fair value of the derivative liability of $345,652, all leading to a net loss of $1,427,352. However, the Company expects to significantly increase operating expenses including selling general and administrative expenses as the Company commences its efforts to commercialize its products.

General and administrative expenses totaled $605,946 for the three months ended March 31, 2014, as compared to $504,388 for the three months ended March 31, 2013, representing a 25% increase from the prior corresponding period. Included in general administrative expenses for the periods ended March 31 are the following:

    Three months ended March 31,     %  
    2014     2013     change  
Professional Fees $ 187,165   $  166,195     15%  
Payroll   31,393     52,208     (40% )
Stock-based compensation (non-cash)   338,250     228,509     48%  
Rent, supplies and general office costs   35,473     34,760     (2% )
Travel and tradeshows   13,665     22,716     (40% )
                   
Total $  605,946   $  504,388     20%  

Professional fees were $187,165 for the three months ended March 31, 2014 compared to $166,195 for the three months ended March 31, 2013. Professional fees increased due to greater use of consultants for financing, sales and marketing purposes.

Payroll was $31,393 for the quarter ended March 31, 2014 compared to $52,208 for the corresponding prior year’s quarter. Payroll decreased due to a reduction in employees from three to two.

Stock-based compensation was $338,250 for the quarter ended March 31, 2014 compared to $228,509 for the quarter ended March 31, 2013. Stock-based compensation increased from the prior year’s period due to the Company included amortization of warrants issued to consultants in 2013 in accordance with vesting terms.

Rent, supplies and general office costs were $35,473 for the three months ended March 31, 2014 which was no significant change from $34,760 for the three months ended March 31, 2013.

For the quarter ended March 31, 2014, travel and tradeshows were $13,665 decreasing from $22,716 for the corresponding prior year’s quarter as 2013 included tradeshow expenses of which there were none in 2014.

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Liquidity and Capital Resources

The Company had no cash and equivalents as of March 31, 2014. During the quarter ended March 31, 2014, the Company received $308,111 proceeds from shareholder loans and repaid $155,066. The Company repaid $70,000 to related party note. The Company intends to raise additional capital to fund ongoing operations, but has no assurances of being able to do so.

The ability of the Company to continue its operations is dependent on the successful execution of management's plans, which include the expectation of raising debt or equity based capital, with some additional funding from other traditional financing sources, including term notes, until such time that funds provided by operations are sufficient to fund working capital requirements. The Company may need to incur additional liabilities with related parties to sustain the Company’s existence.

Principal Cash Flows for the three months ended March 31, 2014

Operating activities for the three months ended March 31, 2014 used cash flows of $83,345 compared to $168,228 for the three months Ended March 31, 2013. The Company’s net loss for the three months ended March 31, 2014 was offset by $1,018,529 in loss on extinguishment of debt and $338,250 for stock-based compensation. The Company also had $345,652 for unrealized gain on change in derivative liability.

Financing activities for the three months ended March 31, 2014 provided cash flows of $83,345 compared to $168,228 for the three months ended March 31, 2013. The decrease in cash provided by financing activities was primarily as a result of less funds received and higher repayments of loans during the three months ended March 31, 2014 compared to the three months ended March 31, 2013.

Off Balance Sheet Arrangements We have no off-balance sheet arrangements, including arrangements that would affect our liquidity, capital resources, market risk support and credit risk support or other benefits.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Convertible Debt

The fair market value of our 10% senior secured convertible debentures is subject to interest rate risk, market price risk and other factors due to the convertible feature of the debentures. The fair market value of the debentures will generally increase as interest rates fall and decrease as interest rates rise. In addition, the fair market value of the debentures will generally increase as the market price of our common stock increases and decrease as the market price falls. The interest and market value changes affect the fair market value of the debentures but do not impact our financial position, cash flows or results of operations due to the fixed nature of the debt obligations.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

We maintain “disclosure controls and procedures” (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) which are designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our President and Chief Executive Officer, who also acts as our principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Under the supervision and with the participation of our management, including our President and Chief Executive Officer, who also acts as our principal financial officer, an evaluation was performed on the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this quarterly report. Based on that evaluation, our President and Chief Executive Officer, concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this quarterly report for the purpose of gathering, analyzing and disclosing of information that the Company is required to disclose in the reports it files under the Exchange Act within the time periods specified in the SEC’s rules and forms. The Company has undertaken steps to remedy this and improve the effectiveness of its disclosure controls and procedures.

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Changes in internal control over financial reporting

There were no changes in our internal control over financial reporting that occurred during the period covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II

OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None.

Item 1A. RISK FACTORS

We are a “smaller reporting company” (as defined by Rule 12b-2 of the Exchange Act) and are not required to provide the information required under this item.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

This Item is not applicable.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

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ITEM 6. EXHIBITS

Exhibit  
Number Description of Exhibits
   
3.1 Amended Articles of Incorporation. (1)
3.2 Bylaws, as amended. (1)
3.3 Certificate of Amendment to Articles of Incorporation (2)
4.1 Convertible Debenture Agreement dated April 29,2011 Pursuant to Regulation D (6)
4.2 Convertible Debenture Agreement dated April 29,2011 Pursuant to Regulation S (6)
10.1 Stock Purchase Agreement, dated August 18, 2010, by and among Nanotech Industries International Inc. and EPOD Solar Inc. (3)
10.2 Licensing Agreement between Nanotech Industries International Inc. and Nanotech Industries Inc. dated July 12, 2010 (4)
10.3 Amendment to the Licensing Agreement previously entered into on the 12th day of July, 2010 (5)
10.4 Securities Purchase Agreement dated April 29,2011 Pursuant to Regulation D (6)
10.5 Securities Purchase Agreement dated April 29,2011 Pursuant to Regulation S (6)
10.6 Warrant Agreement dated April 29,2011 Pursuant to regulation D (6)
10.7 Warrant Agreement dated April 29,2011 Pursuant to regulation S (6)
10.8 Amendment to articles of incorporation to change the name of the company to “Hybrid Coating Technologies Inc.” (7)
10.9 Approval and adoption of the 2011 Stock Incentive Plan (7)
10.10 Second Amendment to the Licensing Agreement previously entered into on the 12th day of July, 2010 (8)
10.11 Licensing Agreement between Nanotech Industries International Inc. and Nanotech Industries Inc. dated October 18, 2011 (9)
10.12 Convertible Debenture Agreement Dated February 21, 2012 (10)
10.13 Third Amendment of Licensing Agreement entered into the 12th day of July 2010 (11)
10.14 Amendment Agreements to Convertible Debenture Agreements dated April 29,2011 and February 21,2012(12)
10.15 Fourth Amendment of Licensing Agreement entered into the 12th day of July 2010 (13)
10.16 Fifth Amendment of Licensing Agreement entered into the 12th day of July 2010 (14)
10.17 Sixth Amendment of Licensing Agreement entered into the 12th day of July 2010 (15)
10.18 Seventh Amendment of Licensing Agreement entered into the 12th day of July 2010 (16)
31.1 Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1 Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(1) Incorporated by reference to the Registration Statement on Form S-1 (File No. 333-153675), filed with the SEC on September 26, 2008.
(2) Incorporated by reference to the Current Report on Form 8-K filed with the SEC on July 22, 2009.
(3) Incorporated by reference to the Current Report on Form 8-K filed with the SEC on August 30, 2010.
(4) Incorporated as reference to the Current Report on Form 8-K filed with the SEC on August 30,2010
(5) Incorporated as reference to the Current Report on Form 8-K filed with the SEC on March 14,2011
(6) Incorporated as reference to the Current Report on Form 8-K filed with the SEC on May 3,2011
(7) Incorporated as reference to the Schedule 14C filed with the SEC on July 6,2011
(8) Incorporated as reference to the Current Report on Form 8-K filed with the SEC on July 7,2011
(9) Incorporated as reference to the Current Report on Form 8-K filed with the SEC on October 18,2011
(10) Incorporated as reference to the Current Report on Form 8-K filed with the SEC on February 21,2012
(11) Incorporated as reference to the Current Report on Form 8-K filed with the SEC on June 28,2013
(12) Incorporated as reference to the Current Report on Form 8-K filed with the SEC on November 20,2013
(13) Incorporated as reference to the Current Report on Form 8-K filed with the SEC on December 13,2013
(14) Incorporated as reference to the Current Report on Form 8-K filed with the SEC on March 31,2014
(15) Incorporated as reference to the Current Report on Form 8-K filed with the SEC on April 9,2014
(16) Incorporated as reference to the Current Report on Form 8-K filed with the SEC on May 8, 2014

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SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: May 20, 2014 Hybrid Coating Technologies Inc.
   
  BY: /s/ Joseph Kristul
  Name: Joseph Kristul Title: President and Chief Executive Officer
   (Principal Executive, Financial and Accounting Officer)

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