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, 2012

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 [_]

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.

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDS DURING THE PRECEDING FIVE YEARS

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13, or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

Yes [_]      No [_]

APPLICABLE TO CORPORATE ISSUERS:

6,431,068 shares of the issuer’s common shares, par value $.001 per share, were issued and outstanding as of May 8, 2012.

TABLE OF CONTENTS

PART I

ITEM 1. FINANCIAL STATEMENTS

The accompanying unaudited consolidated balance sheet of Hybrid Coating Technologies Inc. as at March 31, 2012 and the related unaudited consolidated statements of operations, and cash flows for the three months ended March 31, 2012 and 2011, and the period from July 8, 2010 (inception) to March 31, 2012 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, 2012, are not necessarily indicative of the results that can be expected for the fiscal year ending December 31, 2012 or any other subsequent period.

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

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

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

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

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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 and is in the development stage as defined by Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 915, “Development Stage Entities”.

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 EPOD Solar Inc., included in Form 10-K filed on May 16, 2012 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, 2012 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2012.

NOTE 2 – INTANGIBLE ASSET

During 2010 and 2011 the Company acquired licensing rights from Nanotech Industries, Inc., (“NTI”, 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:

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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”), for the following:

On December 6, 2011 the Company exercised the option. To date the Company has not issued the Licensing Shares and therefore the Licensing Agreement is not yet effective.

Intangibles activity is as follows for the three months ended March 31, 2012 and year ended December 31, 2011:

During the quarters ended March 31, 2012 and March 31, 2011 amortization was $54,660 and $41,667. The balance of intangible assets, net is as follows:

NOTE 3 - FAIR VALUE MEASUREMENTS

Fair Value of Financial Instruments

The fair value and book value of all of the Company’s assets are the same due to the short term nature of the instruments and/or the terms thereof and require Level 1 inputs, except as noted below:

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NOTE 4 – LOANS PAYABLE –SHAREHOLDERS

During 2011, the Company entered into various loan agreements and arrangements for loans with shareholders totaling $894,000 with various maturity dates throughout 2011 and 2012. Two of the loans totaling $85,000 were due in 2011 and are in default. The shareholders have not called these loans.

During the quarter ended March 31, 2012, the Company received $186,760 in shareholder loans

Two shareholders advanced the Company $96,760 that is non-interest bearing and unsecured, with no specific terms of repayment. $63,750 of these advances was repaid during the period. A third shareholder loaned the Company $50,000, with interest at 16%, unsecured, with no specific terms of repayment.

The Company entered into two loan agreements with shareholders for $40,000 maturing on September 22, 2013. One loan had a premium of 10,000 shares that were issued to a shareholder at a price of $1.30. The other loan had a premium of 10,000 warrants that were calculated at the closing price at March 31, 2012 as the shares were not yet issued. The premiums are being amortized over the term of the loan.

The premiums amortized for the quarter ended March 31, 2012 and 2011 were $13,929 and $15,400, respectively. The interest paid for the quarter ended March 31, 2012 and 2011 was $22,158 and $0, respectively. At March 31, 2012 the unamortized premium was $44,703.

NOTE 5 – LOANS PAYABLE

On January 13, 2012 and February 28, 2013 the Company entered into two loans from unrelated parties for proceeds totaling $144,500 each with 1 year maturities. The loans bear interest at 15% per annum payable monthly with a monthly penalty of $945 on the January 13 loan and $350 on the Feb 28 loan. During the quarter the company paid the $2,362 interest due on the January 13 loan but defaulted on the Feb 28 loan. The company accrued $975 in interest and penalty.

NOTE 6 –CONVERTIBLE DEBENTURES

On April 29, 2011 the Company issued $1,201,000 in convertible debentures (“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 both third parties and by non-controlling shareholders, and are convertible 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), comprises of 1 share of common stock and one half a stock purchase warrant of the Company with an exercise price of $2.00 and a maturity at April 29, 2014. Warrants are exercisable at the option of the holder at any time prior to maturity. The embedded conversion features in the Convertible Debentures and attached warrants are accounted for as a derivative liability based on guidance in FASB ASC 815, derivatives and Hedging.

On February 21, 2012, an additional $119,500 of debentures were issued with the same terms that the April, 2011 issuance contained. The value, determined using the same discounted cash flow based, multinomial lattice model as was used with the April 2011 derivative valuation, of the incremental derivative liability associated with this 2012 issuance was determined by management to be $46,721.

As of March 31, 2012, The Company recorded the change in the fair value of the derivative liability as a gain of $8, 744 to reflect the value of the new derivative liability of $518,438.

The derivative was originally recorded as a credit to the derivative liability and a debit to the debt (as a discount). The discount is amortized using the effective interest method over the three year term of the debt. Amortization of the debt discount was $40,721 for the quarter ending March 31, 2012, leaving a remaining discount of $467,225 at March 31, 2012. Interest of $31,220 has been accrued for the quarter ending March 31, 2012. The balance of the debentures at March 31, 2012, net of the unamortized discount, is $853,275.

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NOTE 7– STOCKHOLDERS’ DEFICIT

During the quarter ended March 31, 2012 the company issued 51,000 shares to shareholders as payment for services with a fair value of $66,300, 18,000 shares to a shareholder/employee for services with a fair value of $27,000 and 100,000 shares with a fair value of $130,000 to a shareholder as interest compensation for loans, $93,000 charged to interest expense and the remaining $37,000 an adjustment to additional paid–in capital for loan premiums previously recorded. On March 23, 2012 a warrant holder exercised 220,000 warrants for 205,135 shares with a reduction in additional paid in capital of $205.

During the month of February 2012, the Company issued 260,000 warrants to shareholders for consulting services with a fair value of $286,578 (recorded as stock-based compensation with a corresponding increase in additional paid-in capital) using the Black-Scholes method according to the following assumptions:

NOTE 8– RELATED PARTY TRANSACTIONS

Fees charged by Shareholder

During the three months ended March 31, 2012 and 2011, the Company was charged $57,000 and $135,000 by an outside consultant, who is also a shareholder, for professional fees and commissions. The amounts are included in accounts payable and accrued liabilities related parties.

NOTE 9– SUBSEQUENT EVENTS

In April 2012 the Company issued 240,200 shares as payment of interest on the convertible debentures.

In accordance with ASC 855-10, the Company’s management reviewed all material events from March 31, 2012, through the issuance date of this report, and there are no other material events to report.

NOTE 10– CONTINGENCIES

The Company is delinquent on its state and Federal payroll tax remittances. The State of California has issued a Notice of State Tax Lien against the property and rights owned by the Company covering interest and penalties for non-payment of payroll remittances. The Company has accrued $116,624 in payroll taxes, penalties and interest as of March 31, 2012.

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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 16, 2012. 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, 2012 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, 2012.

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Overview

Company Background

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

As of March 31, 2012, HCT had 7 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 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.

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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 Nanotech 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 2012.

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, 2012 the Company had sample sales of $5,430 and associated cost of sales of $1,100 , general and administration expenses, net of stock-based compensation of $379,878, amounted to $256,639, with only non-cash charges related to the amortization of debt discounts, amortization of intangibles of $54,660, interest expense of $225,153, and a gain in the fair value of the derivative liability of $8,744 all resulting in a net loss of $905,256. For the comparative period January 1 through March 31, 2011, sales were nil, general and administration expenses, net of stock-based compensation of $51,000, amounted to $374,438, with only non-cash charges related to the amortization of debt discounts, amortization of intangibles of $41,667, and interest expense of $1,283,207 all resulting in a net loss of $1,750,312.

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

Liquidity and Capital Resources

The Company had cash and equivalents of $-0- and negative working capital of approximately $2,700,000 as of March 31, 2012. During the quarter ended March 31, 2012, the Company received $119,500 proceeds from convertible debentures, $186,760 in shareholder loans and $144,500 in other loans. The Company intends to raise additional capital to fund ongoing operations, but has no assurances of being able to do so. If the Company is not successful in raising sufficient additional financing, it may be forced to substantially curtail, or cease, its operations.

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.

Development Stage Company

During the period ended March 31, 2012, the Company complied with ASC 915 “Development Stage Entities” in its characterization of the Company as a development stage enterprise.

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.

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
(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

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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