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

FORM 10-Q/A

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

For the quarterly period ended: March 31, 2016

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)

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 [   ] 

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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.

1,561,609,058 shares of the issuer’s common shares, par value $0.001 per share, were issued and outstanding as of May 23, 2016.

EXPLANATORY NOTE

The sole purpose of this Amendment No. 1 to HYBRID Coating Technologies Inc.’s Form 10-Q for the period ended March 31, 2016, filed with the Securities and Exchange Commission on May 23, 2016 (the “Form 10-Q”), is to is to furnish interactive data files formatted in XBRL (eXtensible Business Reporting Language) as Exhibit 101 to the Form 10-Q in accordance with Rule 405 of Regulation S-T and to amend the Consolidated Statements of Operations and Cash Flows for typos.

No other changes have been made to the Form 10-Q. This Amendment No. 1 to the Form 10-Q speaks as of the original filing date of the Form 10-Q, does not reflect events that may have occurred subsequent to the original filing date, and does not modify or update in any way the disclosures made in the original Form 10-Q.

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TABLE OF CONTENTS

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PART I

ITEM 1. FINANCIAL STATEMENTS

The accompanying unaudited consolidated balance sheet of Hybrid Coating Technologies Inc. as of March 31, 2016 and the related unaudited consolidated statements of operations, and cash flows for the three months ended March 31, 2016 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 three months ended March 31, 2016 are not necessarily indicative of the results that can be expected for the fiscal year ending December 31, 2016 or any other subsequent period.

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Hybrid Coating Technologies Inc.
Consolidated Balance Sheets
(Unaudited)

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

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Hybrid Coating Technologies Inc.
Consolidated Statements of Operations
For the Three Months Ended March 31, 2016 and 2015
(Unaudited)

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

4

Hybrid Coating Technologies Inc.
Consolidated Statements of Cash Flows
For the Three Months Ended March 31, 2016 and 2015
(Unaudited)

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Hybrid Coating Technologies Inc.
Consolidated Statements of Cash Flows (continued)
For the Three Months Ended March 31, 2016 and 2015
(Unaudited)

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

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Hybrid Coating Technologies Inc.
Notes to Consolidated Financial Statements
(Unaudited)

NOTE 1 – NATURE OF BUSINESS AND BASIS OF PRESENTATION

Hybrid Coating Technologies Inc. (the “Company”, “HCT”) 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 April 14, 2016 and Form 10-K/A filed May 2, 2016 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 three months ended March 31, 2016 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2016.

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 an accumulated deficit of $33,529,573, and has a working capital deficit of $9,059,630 as of March 31, 2016. 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.

Use of Estimates – The 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.

Cash and Cash Equivalents – The Company maintains various cash balances in two financial institutions located in Daly City, California. These balances are fully insured by the Federal Deposit Insurance Corporation, which insures up to $250,000. On occasion, balances may temporarily exceed such coverage. The Company considers all highly liquid debt instruments, which could include commercial paper and certificates of deposits, with an original maturity of three months or less to be cash equivalents. Investments with maturities greater than three months and less than on year are classified as short term investments.

Concentrations of Credit Risk – Financial instruments which potentially subject the Company to concentrations of credit risk include cash deposits place with financial institutions. The Company had sales to one customer that comprised 100% of the Company’s total revenues for the three months ended March 31, 2016. The Company had no sales for the three months ended March 31, 2015. The Company believes that, in the event its primary customers are unable or unwilling to continue to purchase the Company’s goods, there are a number of alternative customers at comparable prices.

Intangible Assets – Intangible assets are comprised of intellectual property which is amortized on a straight-line basis over the assets’ respective life, for approximately 5 years. Intellectual property with a perpetual life in not amortized.

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

Fair Value – ASC 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, 2016 and 2015, the significant inputs to the Company’s derivative liability calculation were Level 3 inputs.

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:

Stock-Based Compensation – For 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 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.

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For three months ended March 31, 2016 and 2015, 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:

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, 2016 through the date of issuance of the consolidated financial statements for disclosure consideration.

NOTE 3 – INTANGIBLE ASSETS

On February 12, 2016, the Company signed the eleventh amendment to its Licensing Agreement with Nanotech Industries, Inc. (“NTI”), whereby the parties amended the Licensing Agreement (and subsequent amendments) to extend the exclusivity period, to December 31, 2020 (“2020 Extended Exclusivity Period”). In consideration for the 2020 Extended Exclusivity Period, the Company shall pay the following to NTI:

Should the Company not meet any of: (i) the Share Issuance Deadline; or (ii) the 90-Day Deadline; or (iii) the 12-Month Deadline; or (iv) the Fee Deadline (individually referred to as “Unmet Deadline”) and should such Unmet Deadline not be extended by the Parties, the Company shall continue to have the right to the Manufacturing and Sale for the Territory, on a non-exclusive basis for the duration of the Agreement. The Company valued the Series B Preferred Stock and Warrants at $502,104 along with a note payable of $1,500,000. Both the 90 Day Warrants and 12-Month Warrants have been issued.

Intangible assets activity is as follows for the three months ended March 31, 2016 and 2015:

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The balance of intangible assets, net is as follows:

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

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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. The balance at March 31, 2016 and December 31, 2015 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.

In 2015, lenders advanced $229,000 in non-interest bearing demand loans.

There were no new loans advanced in the first three months of 2016. During the first three months of 2015, the Company received new loans of $25,000.

During the three months ended March 31, 2016 and 2015, interest expense related to these notes was $43,162 and $40,147, respectively, and the interest paid was $6,750 and $13,200, respectively.

NOTE 5 – LOANS PAYABLE – SHAREHOLDERS

During the years ended December 31, 2013, 2012 and 2011, the Company entered into various loan agreements and arrangements for loans with certain shareholders. The loans all have different maturity dates ranging from 2011 to 2015 and interest rates that range from 2% to 18%. The Company was in default on loans totalling $999,026 as of March 31, 2016. The shareholders have not called these loans.

During the year ended December 31, 2015, a shareholder-creditor transferred $100,000 of its outstanding balance owed by the Company to a third party. The Company and the third party agreed to amend the loan agreement to allow the third party to convert the principal balance into shares of the Company’s stock. The third party converted the principal balance of $100,000 into 6,252,324 shares of the Company’s common stock. The shares had a fair value of $258,141 and the Company recorded a loss on debt extinguishment of $158,141.

The Company had an outstanding balance of $2,235,081 and $2,197,082 as of March 31, 2016 and December 31, 2015, respectively.

During the first three months of 2016, the Company received $757,911 in shareholder advances and repaid $208,138. During the first three months of 2015, the Company received $530,245 in shareholder advances and repaid $525,035. During the three months ended March 31, 2016, the Company issued a total of 375,000,000 shares of common stock to a shareholder-creditor for payment of outstanding accounts payable. The fair value of the shares was $866,100 based on the market price on the date of grant which settled accounts payable and accrued liabilities to related parties of $119,700. Accordingly, the Company recognized a loss on settlement in the amount of $746,400.

As of March 31, 2016 and 2015, the total interest expense on the loans payable to shareholders was $27,218 and $20,875, respectively, and there was no interest paid in either year. The Company had an outstanding balance of $2,235,082 and $2,197,082 as of March 31, 2016 and December 31, 2015, 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.

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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 were 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 February 21 debenture holders as follows:

1) The maturity date of the Debentures, was extended by a period of 24 (twenty-four) 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 (thirty-six months) from the date of issuance.

The maturity date for the April 29, 2011 debentures was April 20, 2016. The Company has defaulted on this payment but is in negotiations with all the debenture holders to exchange their debt for new financing of which the terms have not yet been determined. No notice by the debenture holders has been sent to the Company.

Interest expense of $32,560 and $33,180 have been recorded on the convertible debentures for the quarters ended March 31, 2016 and March 31, 2015, respectively. No interest payments were made during the three months ended March 31, 2016. The balance of the debentures both at March 31, 2016 and December 31, 2015, was $1,344,584 and 1,344,242 respectively.

NOTE 7 – CONVERTIBLE NOTES

Convertible debt with a variable conversion feature consists of the following as of March 31, 2016 and December 31, 2015:

Noteholder (issue date)

During the three months ended March 31, 2016, the Company fully repaid the noteholders a total of $137,399 including principal and accrued interest of $48,856. The Company fully amortized the remaining discount of $76,975 with a corresponding charge to interest expense. During the three months ended March 31, 2015, the Company repaid a note holder $124,444 including interest of $13,333 and amortized the remaining $60,424 discount to interest expense. In addition, the Company issued $336,750 in convertible notes net of issuance costs of $55,108 recorded as a debt discount. The Company determined that the conversion option was a derivative, accordingly, the Company recorded a derivative liability of $703,001 of which $336,750 was recorded as debt discount, $366,251 as additional interest expense and the Company amortized the $66,469 of debt discount as interest expense and recorded accrued interest of $886.

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Following is a summary of the debt discount for each of the convertible notes:

NOTE 8 – 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 had 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. These warrants have since expired. To date, the shares have not been registered. 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.

The balance outstanding at March 31, 2016 and December 31, 2015 was $ 200,000.

NOTE 9 – DERIVATIVE LIABILITIES

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

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. For the year ended December 31, 2015, the Company recorded derivative liabilities for issuance of convertible notes payable initial fair value of $1,014,703.

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The Company recorded unrealized gains of $28,597 and $20,461 for the three months years ended March 31, 2016 and 2015, respectively. The fair value of the derivative liability was $13,416 and $138,957 as of March 31, 2016 and December 31, respectively.

NOTE 10 – STOCKHOLDERS’ DEFICIT

On March 2, 2016, the Board of Directors approved and recommended the approval by the stockholders, to undergo a reverse stock split of each class of shares which includes the shares of common stock (“Common stock”), the Series A preferred Stock and the Series B Preferred Stock by a ratio of 200 to 1 for each class of shares. The par value of each class of shares shall remain unchanged. The Series A Preferred Stock and Series B Preferred Stock voting rights per share shall remain unchanged. The Company expects the reverse stock split to become effective in June 2016.

During the three months ended March 31, 2016, the Company issued a total of 375,000,000 shares of common stock to a shareholder-creditor for payment of outstanding accounts payable. The fair value of the shares was $866,100 based on the market price on the date of grant which settled accounts payable and accrued liabilities to related parties of $119,700. Accordingly, the Company recognized a loss on settlement in the amount of $746,400.

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As part of its extension of its licenses (see Note 3), the Company issued 2,240,000 Series A Preferred Shares and 157,300,000 Series B Preferred Share warrants with an exercise price of $0.001 and a 10-year maturity with a total fair value of $502,104.

Warrants

During the three months ended March 31, 2016, the Company issued 1,320,000,000 warrants to a shareholder to repay accounts payable-related party with a fair value of $3,080,000 (recorded as an adjustment to loans payable - shareholder of $396,000 and loss on settlement of debt of $2,684,000) with a corresponding increase in additional paid-in capital valued using the Black-Scholes method according to the following assumptions:

A summary of the activity in the Company's warrants during the three months ended March 31, 2016 is presented below:

The intrinsic value of warrants outstanding at March 31, 2016 was $1,770,374.

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 a five-year life from date of issuance to the Company’s President, Joseph Kristul, contingent upon his successful negotiation of a major sales contract. The major sales contract agreement has not yet been consummated by the Company.

NOTE 11 – RELATED PARTY TRANSACTIONS

NTI License Fees

The Company’s principal assets are licenses for product sales with NTI, an entity under common control. During the three months ended March 31, 2016, the Company extended all its licenses with NTI until December 31, 2020. The consideration given was 2,240,000 Series B preferred shares and 157,300,000 Series B preferred share warrants with a total fair value of $502,104 and a note payable of $1,500,000 due by February 12, 2017. During the year ended December 31, 2015, the Company issued 420,000 shares of Series B Preferred Stock valued at $102,480 as consideration for its licenses with NTI. The notes payable – related party was repaid through cash payments of $439,000 and the issuance of 40,000shares of Series B Preferred Stock valued at $150,000. During the year ended December 31, 2014, the Company issued $2,500,000 of notes payable – related party as consideration for its licenses with NTI. The debt was partially repaid through cash payments of $420,800 and issuances of 8,113,116 shares of common stock valued at $872,160.

During the three months ended March 31, 2016, the Company made principal payments of $169,000 on its note payable to NTI related to the 2014 acquisition of the Added Applications license rights. The note matures on March 31, 2017, does not bear interest, and no payments are required prior to maturity. As of March 31, 2016 and December 31, 2015, the balance of notes payable – related party outstanding with NTI was $2,631,491 and $1,300,491, respectively.

The Company also has an option (expiring December 31, 2020) to issue a controlling stake in the Company amounting to 52.5% to NTI for a perpetual exclusive license to manufacture and sell Nanotech Products for all North America, South America and Europe. If this option is exercised, the Company will have a similar option for the territory of Asia to issue an additional 10% ownership stake in the Company. There is an additional option, also expiring December 31, 2020, for the Company to issue an additional 15% ownership stake in exchange for exclusivity for Spray Foam Insulation products.

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Fees and Loans with Shareholder

During the three months ended March 31, 2016 and 2015, the Company was charged $53,292 and $225,837, respectively, by an outside consultant, who is also a shareholder-creditor, for professional fees of $15,000 per month in 2016 and 2015, out-of-pocket expenses of $8,292 in 2016 and $20,000 in 2015, and professional fees of approximately $0 in 2016 and $150,000 in 2015 related to strategic partnership negotiations and other business related services performed on the Company’s behalf.

The Company issued 5,100,000 of the Company’s common shares with a fair value of $300,000 to settle liabilities of $102,500 and a loss on settlement of $197,500 to the consultant during the three months ended March 31, 2015. The Company had an outstanding balance payable included in accounts payable and accrued liabilities - related parties as of March 31, 2016 and December 31, 2015 of $100,726 and $91,019, respectively. Also during the three months ended March 31, 2015, the shareholder-creditor transferred $100,000 of its outstanding balance owed by the Company to a third party. The Company and the third party agreed to amend the loan agreement to allow the third party to convert the principal balance into shares of the Company’s stock. The third party converted the principal balance of $100,000 into 6,252,354 shares of the Company’s common stock. The shares had a fair value of $258,141 and the Company recorded a loss on debt extinguishment of $158,141.

During the three months ended March 31, 2016, the consultant described above loaned the Company $503,832 through loans payable - shareholders and the Company made repayments through the issuance 375,000,000 shares of common stock and 1,320,000,000 warrants to this consultant of $119,700 and $396,000 respectively. During the three months ended March 31, 2015, this consultant loaned the Company $94,000 through loans payable – shareholders and the Company made cash repayments to this consultant of $3,000 and the consultant transferred debt to a third party of $100,000 that the Company paid through the issuance of 5,100,000 shares.

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 three months ended March 31, 2016 and 2015 was $11,250.

NOTE 12 – SUBSEQUENT EVENTS

Subsequent to March 31, 2016, the Company issued 301,950,000 warrants to a shareholder to repay loans with a fair value of $301,755 (recorded as an adjustment to loans payable shareholders of $232,755 and loss on settlement of debt of $69,000) with a corresponding increase in additional paid-in capital valued using the Black-Scholes method according to the following assumptions:

The Company and a shareholder-creditor agreed to cancel 1,950,000 shares of common stock In exchange for the stock cancellation, the shareholder-creditor agreed to receive 1,950,000 warrants respectively, with a 5-year term and an exercise price of $0.001 per share.

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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/A Report filed May 2, 2016. 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, 2016 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 three months ended March 31, 2016.

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Overview

Company Background

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

As of March 31, 2016, HCT had 3 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:

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:

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.

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 2016.

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Results of Operations

Comparison of the Three Months Ended March 31, 2016 and 2015

The Company recorded $156,602 in revenues for the three months ended March 31, 2016 and $0 for the corresponding prior year’s period as the Company started to commercialize its products.

General and administrative expenses totaled $219,939 for the three months ended March 31, 2016, as compared to $491,335 for the three months ended March 31, 2015, representing a 59% decrease from the prior corresponding period. Included in general administrative expenses for the period ended March 31 are the following:

Professional fees were $157,960 for the three months ended March 31 2016, compared to $267,455 for the three months ended March 31, 2014. Professional fees decreased due to $150,000 less in charges from a consultant used for financing, sales and marketing purposes.

Payroll was $11,542 for the three months ended March 31, 2016 and 2015. There was one employee on the payroll. The other two employees were paid through stock-based compensation and professional fees. $12,000 was paid to an employee for the three months ended March 31, 2016 and charged to professional fees. There was $0 charged to professional fees for the corresponding prior year’s period. There was no stock-based compensation paid during the three months ended March 31, 2016.

Stock-based compensation was $0 for the quarter ended March 31, 2016, compared to $109,832 for the quarter ended March 31, 2015. Stock based compensation decreased from the prior year’s period due to no compensation incurred during the current period.

Rent, supplies and general office costs were $37,232 for the three months ended March 31, 2016, which was a $12,992 increase from $24,240 for the three months ended March 31, 2015, due to higher corporate filing fees and supplies costs.

For the three months ended March 31, 2016, travel and tradeshows expenses were $13,205, decreasing by $65,061 from $78,266 for the corresponding prior year’s quarter. The Company had increased travel in connection with sales, product development and financing purposes during the three months ended March 31, 2015.

The Company expects to significantly increase operating expenses in the future including selling general and administrative expenses as the Company commences its efforts to commercialize its products.

The Company had $280,756 of amortization expense related to its intangible assets for the three months ended March 31, 2016, compared to $265,547 for the three months ended March 31, 2015. The increase in amortization expense was a result of the Company additional value associated with extending the exclusivity period of the licenses with NTI, therefore increasing the quarterly amortized amount.

The Company recognized a loss on change in fair value of derivatives of $28,597 during the three months ended March 31, 2016, compared to a loss of $20,561 in the three months ended March 31, 2015. The intrinsic fair value of the Company’s convertible notes increased during the three months ended March 31, 2016. This increase was due to the exercise price of the embedded conversion feature decreasing as a result of the discount rate applied to the 25-day average trading price of the Company’s stock as measured at March 31, 2016 compared to the exercise price on the dates of issuance of the convertible notes. Accordingly, as of March 31, 2016 the Company recorded an increase in the derivative liabilities and a corresponding loss on change in fair value.

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The Company recorded $276,783 in interest expense for the three months ended March 31, 2016, compared to $729,078 in interest expense for the three months ended March 31, 2015. The decrease in interest expense was a result of the Company converting and/or redeeming the debt holders in the latter part of 2015 and first three months of 2016.

During the three months ended March 31, 2016, the Company recorded loss on extinguishment of debt in the amount of $2,684,000 compared to $355,641 recorded in the three months ended March 31, 2015. The increase was due to the loss as a result of warrants issued to pay a loan payable shareholder for the three months ended March 31, 2016. In addition, for the three months ended March 31, 2016, the Company recorded a loss on settlement of payables in the amount of $746,400, compared to $369,260 during the three months ended March 31, 2015. Both losses occurred as a result of shares issued as payment to a shareholder-creditor for accounts payable - related parties.

Liquidity and Capital Resources

The Company had cash and equivalents of $1,966 as of March 31, 2016. For the three months ended March 31, 2016, the Company received $757,911 proceeds from shareholder loans and repaid $208,138 for shareholder loans. The Company also redeemed $136,056 and repaid $169,000 note payable - related party. The Company intends to raise additional capital to fund ongoing operations, but has no assurances of being able to do so. The Company expects it will need approximately $600,000 in additional funding to continue operations for the next 12 months.

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, 2016 and 2015

Operating activities for the three months ended March 31, 2016, used cash flows of $263,794 compared to $188,676 for the three months ended March 31, 2015. The Company’s net loss for the three months ended March 31, 2016 of $4,175,213 was partly offset by $2,684,000 in loss on extinguishment of debt, $746,400 of loss on settlement of payables, $280,757 of amortization of intangible asset and by non-cash interest and amortization of debt discounts of $46,000 and $76,975, respectively.

Investing activities for the three months ended March 31, 2016, used cash flows of $5,000 related to the issuance of a loan receivable for equipment.

Financing activities for the three months ended March 31, 2016, provided cash flows of $246,867 compared to $190,497 for the three months ended March 31, 2015. The increase in cash provided by financing activities was primarily as a result of proceeds from shareholder loans during the period.

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.

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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.

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.

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

This Item is not applicable.

ITEM 4. MINE SAFETY DISCLOSURES

This Item is not applicable.

ITEM 5. OTHER INFORMATION

This Item is not applicable.

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ITEM 6. EXHIBITS

(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

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(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
(17) Incorporated as reference to the Current Report on Form 8-K filed with the SEC on August 19, 2014
(18) Incorporated as reference to the Current Report on Form 8-K filed with the SEC on September 10, 2014
(19) Incorporated as reference to the Current Report on Form 8-K filed with the SEC on November 28, 2014
(20) Incorporated as reference to the Current Report on Form 8-K filed with the SEC on August 14, 2015
(21) Incorporated as reference to the Current Report on Form 8-K filed with the SEC on February 12, 2016

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.

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