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: September 30, 2013

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 has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

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.

9,084,283 shares of the issuer’s common shares, par value $0.001 per share, were issued and outstanding as of November 12, 2013.

TABLE OF CONTENTS

PART I

ITEM 1. FINANCIAL STATEMENTS

The accompanying unaudited consolidated balance sheet of Hybrid Coating Technologies Inc. as of September 30, 2013 and the related unaudited consolidated statements of operations, and cash flows for the three and nine months ended September 30, 2013 and the period from July 8, 2010 (inception) to September 30, 2013 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 September 30, 2013, are not necessarily indicative of the results that can be expected for the fiscal year ending December 31, 2013 or any other subsequent period.

Hybrid Coating Technologies, Inc.
(A Development Stage Company)
Consolidated Balance Sheets
September 30, 2013 and December 31, 2012
(Unaudited)

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

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Hybrid Coating Technologies Inc.
(A Development Stage Company)
Consolidated Statements of Operations
For the Three and Nine Months Ended September 30, 2013 and 2012
And the Period from July 8, 2010 (Inception) through September 30, 2013
(Unaudited)

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

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Hybrid Coating Technologies Inc.
(A Development Stage Company)
Consolidated Statements of Cash Flows
For the Nine Months Ended September 30, 2013 and 2012
And the Period from July 8, 2010 (inception) through September 30, 2013
(Unaudited)

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

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Hybrid Coating Technologies Inc.
(A Development Stage Company)
Consolidated Statements of Cash Flows
For the Nine Months Ended September 30, 2013 and 2012
And the Period from July 8, 2010 (inception) through September 30, 2013
(Unaudited)

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

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Hybrid Coating Technologies Inc.
(A Development Stage Company)
Notes to Consolidated Financial Statements
For the Nine Months Ended September 30, 2013
(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, 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). See Note 2 for additional information on the related party licensor.

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 16, 2013, with the Securities and Exchange Commission, are unaudited, and 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 of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the period ended September 30, 2013 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2013.

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 $14,144,000 since inception, and has a working capital deficit of approximately $4,026,000 as of September 30, 2013. 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. If adequate working capital is not available the Company may be required to curtail or cease its operations.

The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

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 Industries International Inc., (“Nanotech”). All significant inter-company balances and transactions have been eliminated in the consolidated financial statements.

Development Stage – The 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 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.

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

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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.

Fair Value Measurements - Fair value is the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are classified and disclosed in one of the following categories:

Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. The Company considers active markets as those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability. This category includes those derivative instruments that the Company values using observable market data. Substantially all of these inputs are observable in the marketplace throughout the term of the derivative instruments, can be derived from observable data, or supported by observable levels at which transactions are executed in the marketplace.

Level 3: Measured based on prices or valuation models that require inputs that are both significant to the fair value measurement and less observable from objective sources (i.e. supported by little or no market activity). The Company’s valuation models are primarily industry standard models. Level 3 instruments include derivative warrant instruments. The Company does not have sufficient corroborating evidence to support classifying these assets and liabilities as Level 1 or Level 2.

Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. The estimated fair value of the derivative warrant instruments was calculated using a modified lattice valuation model.

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. For nine months ended September 30, 2013 and 2012, 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 June 30, 2013 through the date of issuance of the consolidated financial statements for disclosure consideration.

NOTE 3 – 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 equal to 62.5% of the Company’s total shares. If this option is exercised, NTI would control the Company by virtue of ownership of a majority of the Company’s outstanding shares.

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 notified NTI of its election to exercise the option. To date the Company has not issued the Licensing Shares and therefore the Licensing Agreement is not yet effective.

On June 28, 2013, the Company entered into the Third Amendment of the licensing agreement extending the term for the North American rights by 36 months to June 12, 2016.

Intangible activity is as follows for the nine months ended September 30, 2013:

The balance of intangible assets, net is as follows:

During the nine months ended September 30, 2013 and 2012 amortization expense was $145,633 and $163,980, respectively.

NOTE 4 – FAIR VALUE MEASUREMENTS

The following table sets forth, by level within the fair value hierarchy, the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of September 30, 2013:

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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:

NOTE 5 – 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 per share and 133,360 Series B warrants with a term of 3 years and an exercise price of $1.50 per share. The Company amended the terms of the Series A warrants during the nine months ended September 30, 2013. See Note 10. 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 received from 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 6 – 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 September 30, 2013 and at December 31, 2012 and 2011 was $27,500, and the loan is currently in default. The Company has not received any notices from the loan holders with respect to the defaults.

During the nine months ended September 30, 2013, the Company issued a $100,000 loan with a three-month maturity, maturing on August 23, 2013, bearing interest at 16% per annum, payable monthly, with an additional $5,000 premium payable at maturity, a $110,000 loan with a one-year maturity, maturing on March 25, 2014, bearing interest at 16% per annum, payable monthly with an additional 110,000 warrants attached to the loan, a loan was issued for $8,500 maturing in July 2013 bearing interest of 15% per annum and a $50,000 loan bearing interest at 15% per annum.

The fair value of these 110,000 warrants issued in conjunction with this debt amounted to $30,217 using the assumptions discussed in the table below. This resulted in a relative fair value of $23,705 which was recorded as a debt discount and a corresponding increase in paid-in capital. The discount is amortized over the life of the associated loan payable.

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In 2012 the Company entered into various loans agreements totaling $681,500 at interest rates ranging from 15%-25%. Several loans totaling $709,000 are in default. The creditors have not demanded payment of these loans.

During the year ended December 31, 2012, the Company issued 50,000 warrants related to a loan payable. The fair value of the 50,000 warrants issued in conjunction with the debt issued in 2012 amounted to $19,005 using the assumptions discussed in the table below. This resulted in a relative fair value of $16,668 which was recorded as a debt discount. The discount is amortized over the life of the associated loan payable.

The Company recorded $4,259 and $26,913 of interest expense related to the debt discount during the three and nine months ended September 30, 2013. There was no corresponding debt discount during the three and six months ended September 30, 2012. During the nine months ended September 30, 2013 and 2012 total interest expense was $110,802 and $31,200 respectively, and the total interest paid was $55,173 and $11,169 respectively. At September 30, 2013 the unamortized debt discount was $11,430 compared to $14,638 as of December 31, 2012.

NOTE 7 – LOANS PAYABLE –SHAREHOLDERS

During the years ended December 31, 2012 and 2011, the Company entered into various loan agreements and arrangements for loans with certain shareholders totaling $894,000 and $765,296, respectively, all having different maturity dates from 2011 to 2013. Several of these loans totaling $896,382 are in default. The shareholders have not demanded payment of these loans.

During the nine months ended September 30, 2013, the Company received $592,648 in shareholder loans and repaid $335,630. In addition the Company repaid an additional $125,022 through the issuance of 933,000 warrants. The fair value of the warrants was $307,144. The Company recorded a loss on settlement of debt in the amount of $182,122 and an increase in paid-in capital of $307,144.

The fair-value of these 933,000 warrants was determined using the assumptions in the table below:

On January 1, 2013, the Company entered into a new loan agreement with a shareholder with a maturity of December 31, 2013. The new loan agreement for $130,000 cancelled the previous loan agreement for $100,000 that had expired. The Company recorded a loss on extinguishment of debt of $10,169 and a debt discount of $19,831. The Company is amortizing the debt discount over the life of the loan payable. The Company has recorded $14,874 of interest expense related to the amortization of the debt discount for the nine months ended September 30, 2013. At September 30, 2013 there remains an unamortized discount of $4,957. In addition 25,000 warrants were issued.

The fair value of these 25,000 warrants issued in conjunction with this debt amounted to $9,840 using the assumptions discussed in the table below. This resulted in a relative fair value of $9,148 which was recorded as an additional debt discount and a corresponding increase in paid –up capital. The discount is amortized over the life of the associated loan payable. Interest expense of $6,861 was recorded from amortization of the debt discount, resulting in an unamortized discount of $2,287 at September 30, 2013.

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On January 21, 2013, the Company entered in a loan agreement for $78,400 CDN. At September 30, 2013, the value was $76,032 US. The loan matured on July 20, 2013 and bears interest at 2% per month, payable monthly, unpaid amounts bear interest at 2.5% per month. The loan is secured by the Company’s assets for approximately $94,000. Interest of $10,908 has been recorded and paid through the issuance of 36,360 shares of common stock. The loan is in default and no notice of demand for repayment has been given to the Company.

The Company recorded $15,781 and $48,802 of interest expense related to the debt discount during the three and nine months ended September 30, 2013. The corresponding debt discount during the three and nine months ended September 30, 2012 was $12,193 and $42,929. During the nine months ended September 30, 2013 and 2012 total interest expense was $61,818 and $59,941 respectively, and the total interest paid was $30,492 and $42,740 respectively. At September 30, 2013 the unamortized debt discount was $11,710 compared to $31,533 as of December 31, 2012.

NOTE 8 – NOTE PAYABLE – RELATED PARTY

During the nine months ended September 30, 2013, the Company made principal payments of $97,130 on its note payable to NTI related to the 2011 acquisition of the license rights for coating products in Europe. The note matures on November 29, 2013, does not bear interest, and no payments are required prior to maturity. The balance of the note is $703,351 and $800,481 at September 30, 2013 and December 31, 2012, respectively.

NOTE 9 –CONVERTIBLE DEBENTURES

On April 29, 2011, the Company issued convertible debentures for proceeds of $1,201,000 and on February 21, 2012, issued an additional $119,500 (“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, 2014 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, 2015 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 analyzed the financial instruments, (the convertible debenture, share purchase and warrants) in accordance with FASB ASC 815, Fair Value Measurements and Disclosures. The embedded conversion features in the convertible debentures and attached warrants should be 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 for each issuance. The Company recorded the change in the fair value of the derivative liability as a gain of $77,787 as of December 31, 2011, to reflect the value of the derivative liability as $480,461. The Company recorded another gain of $360,461 to reflect the value of the derivative liability as $166,721 as of December 31, 2012. To reflect the change in fair value for the nine-month period ended September 30, 2013 the Company recorded a gain of $47,442.

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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 three year term of the debt. Amortization of the debt discount was $164,823 and $132,815 for the nine months ended September 30, 2013 and 2012, respectively, leaving a remaining discount of $160,313 at September 30, 2013.

Interest of $98,766 has been recorded as of September 30, 2013. During 2013, $11,949 in interest has been paid through the issuance of 29,875 shares of common stock issued to the February 21 Debenture holders. The Debenture holders participating in the April 29, 2011 offering received 390,692 common shares on April 29, 2013 for payment of $128,928 in interest. The balance of the debentures at September 30, 2013 and December 31, 2012, net of the unamortized discount, was $1,160,187 and $995,364, respectively.

NOTE 10– STOCKHOLDERS’ DEFICIT

On February 22, 2012, the Company entered an agreement with a shareholder whereby a loan premium of 10,000 shares would be issued to the shareholder. Although the shares had not been issued the Company has recorded a reduction of the loan and an increase in stock payable of $15,000. The fair value of the stock was determined using the stock price on the date of grant.

During the nine months ended September 30, 2013, the Company issued 129,000 shares to shareholder creditors and a consultant as payment for services with a fair value of $50,500, 420,567 shares to convertible debenture holders as payment of interest for the year of $140,878, 100,000 to the Senior Secured Debenture Holder for payment of interest of $38,000, 36,360 shares to a shareholder- creditor for accrued interest of $10,908, and 1,625,000 shares to a shareholder-creditor and a related party for payment of $594,000 against accounts payable and accrued liabilities related parties and recognized a loss on settlement in the amount of $101,500.

In addition, during the nine months ended September 30, 2013, a warrant holder exercised 70,000 warrants for 69,788 shares on a cashless basis with a reduction in additional paid in capital of $70.

During the nine months ended September 30 2013, the Company issued 1,650,000 warrants to shareholders for consulting services at a fair value of $604,332 (recorded as stock-based compensation), and 450,000 warrants to a related party landlord as payment for rent with a fair value of $202,095 (recorded as an adjustment to accounts payable of $93,750, prepaid expense of $22,500 and stock based compensation of $85,845), 933,000 warrants to a shareholder to pay a shareholder loan with a fair value of $334,222 (recorded as an adjustment to loans payable-shareholders of $130,100 and loss on extinguishment of debt of $204,222), 110,000 warrants in connection with a loan from a third party with a relative fair value of $23,705 (recorded as debt discount), and 25,000 warrants in connection with a loan from a shareholder with a relative fair value of $9,148 (recorded as debt discount), all with a corresponding increase in additional paid-in capital using the Black-Scholes method according to the following assumptions:

On June 28, 2013, the Company extended the expiration date of common stock purchase warrants described below to February 28, 2018. This extension of the expiration date will apply to the following warrants: (i) the 533,336 Series A warrants issued to a third party pursuant to a securities purchase agreement entered into on August 16, 2010; (ii) the 687,500 stock purchase issued to a consultant on July 14, 2010; and (iii) the 50,000 stock purchase warrants issued pursuant to a loan agreement on November 29, 2012. The Company also agreed to reduce the exercise price of the 533,336 Series A warrants from $1.25 per share to $0.39 per share.

The modification of the maturity and exercise price of the above warrants resulted in a fair value of $241,697 which was recorded as a loss on modification with a corresponding increase in additional paid-in capital using the Black-Scholes method according to the following assumptions:

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During the quarter ended September 30, 2013, the Company issued 830,000 warrants for services, which was recorded as option related compensation of $310,776 with a corresponding increase in additional paid-in capital using the Black-Scholes method according to the following assumptions:

Warrants

A summary of the activity in the Company's warrants during the nine months ended September 30, 2013 is presented below:

In addition to the regular warrants detailed in the table above, there are issued and outstanding 533,336 Series A warrants with an exercise price of $0.39 per share and 133,336 Series B warrants with an exercise price of $1.50 per share mentioned above.

The intrinsic value of warrants outstanding at September 30, 2013 was $1,490,696.

Contingent Option Issuance

On July 20, 2012, the Company’s board of directors approved the issuance of 300,000 stock purchase options, 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. The major sales contract agreement has not yet been reached by the Company.

NOTE 11– RELATED PARTY TRANSACTIONS

Fees charged by Shareholder

During the nine months ended September 30, 2013 and 2012, the Company was charged $398,000 and $223,000, 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 related parties.

Shared Administrative Costs

The Company shares office space and certain personnel with NTI. Costs are allocated among the parties based on usage. During 2013 and 2012, the allocation of such shared costs between the Company and NTI was 80% and 20%, respectively.

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NOTE 12– SUBSEQUENT EVENTS

Subsequent to quarter ended September 30, 2013, the Company has issued 200,000 shares to consultants for services at a fair value of $60,000. The fair value of the stock was based on 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 17, 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 September 30, 2013 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.

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Changes in Accounting Principles

No accounting changes were adopted during the period ended September 30, 2013.

Overview

Company Background

HCTs principal office is located in Daly City, California, U.S.A. As of September 30, 2013, HCT had 2employees.

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.

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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 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 in 2014.

Results of Operations

HCT is a developmental stage company and as such does not yet have meaningful revenues. Management is in ongoing discussions with prospective clients. However, subject to the availability of funds, the Company expects to significantly increase operating expenses including selling general and administrative expenses as the Company commences its efforts to commercialize its products.

For the three and nine-month periods ended September 30, 2013, the Company had sample sales of $48,483 and $56,631, respectively, and associated cost of sales of $22,312 and $25,979, respectively. General and administrative expenses totaled $591,851 and $1,903,852 for the three and nine months ended September 30, 2013, respectively, as compared to $437,394 and $1,490,629 for the three and nine months ended September 30, 2012, representing a 35% and 28% increase for the three and nine months, respectively.

For the nine months ended September 30, 2013: the Company had gross profit of $30,652, general and administration expenses totaling $1,903,852, after removing stock –based compensation of 1,051,450 amounted to $852,402, with only non-cash charges related to the amortization of intangible asset of $145,633, amortization of debt discounts of $240,538 (included in interest expense of $637,672) loss on extinguishment of debt of $315,791, and a gain in the fair value of the derivative liability of $47,442 all leading to a net loss of $3,166,551.

Included in general administrative expenses are the following:

Liquidity and Capital Resources

The Company had no cash and equivalents as of September 30, 2013. For the nine months ended September 30, 2013, the Company received proceeds of $562,648 from shareholder loans and repaid $335,630. The Company received another $260,000 in other loans and repaid $85,530 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's absence of significant revenues, recurring losses from operations, and its need for significant additional financing in order to fund its projected loss in 2013 raise substantial doubt about its ability to continue as a going concern.

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. If adequate working capital is not available the Company may be required to curtail or cease its operations.

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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 September 30, 2013, 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.

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.

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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

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
(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

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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.

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