Nano Magic (NMGX) 10-Q 5 Nov 13 2013 Q3 Quarterly report Financial data

Document_and_Entity_Informatio

Document and Entity Information	9 Months Ended
	Sep. 30, 2013	Oct. 31, 2013
DocumentAndEntityInformationAbstract	'	'
Entity Registrant Name	'Applied Nanotech Holdings, Inc.	'
Entity Central Index Key	'0000891417	'
Document Type	'10-Q	'
Document Period End Date	30-Sep-13	'
Amendment Flag	'false	'
Current Fiscal Year End Date	'--12-31	'
Is Entity a Well-known Seasoned Issuer?	'No	'
Is Entity a Voluntary Filer?	'No	'
Is Entity's Reporting Status Current?	'Yes	'
Entity Filer Category	'Smaller Reporting Company	'
Entity Common Stock, Shares Outstanding	'	139,997,816
Document Fiscal Period Focus	'Q3	'
Document Fiscal Year Focus	'2013	'

Consolidated_Balance_Sheets

Consolidated Balance Sheets (USD $)	Sep. 30, 2013	Dec. 31, 2012
Current assets:	'	'
Cash and cash equivalents	$352,973	$331,579
Accounts receivable - net of allowance for doubtful accounts	382,633	369,409
Prepaid expenses and other current assets	84,055	692,541
Total current assets	819,661	1,393,529
Property and equipment, net	194,638	270,693
Other assets	26,960	28,591
Total assets	1,041,259	1,692,813
Current liabilities:	'	'
Accounts payable	598,846	813,505
Convertible notes payable	1,893,128	755,800
Obligations under capital lease	23,858	56,680
Accrued liabilities	1,393,000	855,264
Deposits and deferred revenue	51,239	103,370
Total current liabilities	3,960,071	2,584,619
Obligations under capital lease, long-term	0	10,480
Convertible notes payable	0	1,631,072
Total liabilities	3,960,071	4,226,171
Commitments and contingencies	'	'
Stockholders' equity (deficit):	'	'
Preferred stock, $1.00 par value, 2,000,000 shares authorized; No shares issued and outstanding	0	0
Common stock, $.00l par value, 160,000,000 shares authorized, 135,767,864 and 119,699,286 shares issued and outstanding at September 30, 2013 and December 31, 2012, respectively	135,768	119,699
Additional paid-in capital	117,347,131	115,332,346
Accumulated deficit	-120,401,711	-117,985,403
Total stockholders' deficit	-2,918,812	-2,533,358
Total liabilities and stockholders' deficit	$1,041,259	$1,692,813

Balance_Sheets_Parenthetical

Balance Sheets (Parenthetical) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Statement of Financial Position [Abstract]	'	'
Preferred stock par value	$1	$1
Preferred stock shares authorized	2,000,000	2,000,000
Preferred stock shares issued	0	0
Preferred stock shares outstanding	0	0
Common stock par value	$0.00	$0.00
Common stock shares authorized	160,000,000	160,000,000
Common stock shares issued	135,767,864	119,699,286
Common stock shares outstanding	135,767,864	119,699,286

Consolidated_Statements_of_Ope

Consolidated Statements of Operations (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Revenues	'	'	'	'
Government contracts	$560,606	$436,729	$1,475,623	$1,223,273
Contract research	174,698	98,888	938,628	250,242
License fees and royalties	350,581	109,000	488,936	887,896
Product sales	81,729	54,543	249,350	189,031
Other	7,600	6,345	38,159	62,150
Total revenues	1,175,214	705,505	3,190,696	2,612,592
Research and development	776,324	938,865	2,555,472	3,601,210
Selling, general and administrative expenses	616,665	880,892	2,000,145	3,097,250
Operating costs and expenses	1,392,989	1,819,757	4,555,617	6,698,460
Loss from operations	-217,775	-1,114,252	-1,364,921	-4,085,868
Interest expense	-183,398	-131,565	-1,055,164	-319,528
Interest income	3,723	8	3,777	1,583
Loss from continuing operations before taxes	-397,450	-1,245,809	-2,416,308	-4,403,813
Provision for taxes	0	0	0	0
Net loss	($397,450)	($1,245,809)	($2,416,308)	($4,403,813)
Earnings (loss) per share - Basic and Diluted	$0	($0.01)	($0.02)	($0.04)
Weighted average shares outstanding - Basic and Diluted	131,390,259	119,381,717	128,567,427	119,194,845

Consolidated_Statements_of_Cas

Consolidated Statements of Cash Flows (USD $)	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Statement of Cash Flows [Abstract]	'	'
Net loss	($2,416,308)	($4,403,813)
Depreciation and amortization expense	76,055	83,037
Amortization of discount on debt	896,980	274,815
Stock based compensation expense	60,204	215,291
Accounts receivable, trade	-13,224	403,915
Prepaid expenses and other assets	610,117	-545,706
Accounts payable and accrued liabilities	491,178	812,381
Deferred revenue	-52,131	-200,000
Total adjustments	2,069,179	1,043,733
Net cash used in operating activities	-347,129	-3,360,080
Cash flows from investing activities:	'	'
Purchases of property and equipment	0	-50,398
Net cash used in investing activities	0	-50,398
Cash flows from financing activities:	'	'
Repayment of capital leases and notes payable	-114,102	-36,590
Proceeds from long-term debt	482,625	735,700
Net cash provided by financing activities	368,523	699,110
Net increase (decrease) in cash and cash equivalents	21,394	-2,711,368
Cash and cash equivalents, beginning of period	331,579	3,071,783
Cash and cash equivalents, end of period	$352,973	$360,415

1_Basis_of_Presentation

1. Basis of Presentation	9 Months Ended
	Sep. 30, 2013
Accounting Policies [Abstract]	'
1. Basis of Presentation	'
	The consolidated financial statements for the three and nine month periods ended September 30, 2013 and 2012 have been prepared by us without audit pursuant to the rules and regulations of the Securities and Exchange Commission. In the opinion of management, all adjustments necessary to present fairly our financial position, results of operations, and cash flows as of September 30, 2013 and 2012, and for the periods then ended, have been made. Those adjustments consist of normal and recurring adjustments. The consolidated balance sheet as of December 31, 2012, has been derived from the audited consolidated balance sheet as of that date.
	Certain information and note disclosures normally included in our annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. These consolidated financial statements should be read in conjunction with a reading of the financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2012, as filed with the U.S. Securities and Exchange Commission. The results of operations for the three and nine month periods ended September 30, 2013, are not necessarily indicative of the results to be expected for the full year.
	Certain reclassifications have been made in the prior period’s consolidated interim financial information to conform to the current year’s presentation.

2_Supplemental_Cash_Flow_Infor

2. Supplemental Cash Flow Information	9 Months Ended
	Sep. 30, 2013
Supplemental Cash Flow Elements [Abstract]	'
2. Supplemental Cash Flow Information	'
	Cash paid for interest for the nine months ended September 30, 2013 and 2012, was $11,641 and $18,676, respectively. During the nine months ended September 30, 2013 and 2012, the Company had non-cash transactions related to share based payments described in greater detail in Note 5, non-cash transactions related to the conversion of accounts payable into common stock described in greater detail in Note 4, and non-cash transactions related to the conversion of notes payable and related accrued interest into common stock that are described in greater detail in Notes 3 and 4. The Company also had a capital lease transaction in the amount of $28,567 in the nine months ended September 30, 2012.

3_Notes_Payable_and_LongTerm_D

3. Notes Payable and Long-Term Debt	9 Months Ended
	Sep. 30, 2013
Debt Disclosure [Abstract]	'
3. Notes Payable and Long-Term Debt	'
	As described in detail in our Form 10-K for the year ended December 31, 2012 we issued convertible notes from 2009 through 2012. Additional notes with a face amount of $482,625 were issued in the nine months ended September 30, 2013. As of September 30, 2013, there are notes with a total face amount of $2,042,958 outstanding. These notes are due at dates throughout 2013 and through August 2014. These notes bear interest at rates ranging from 5% to 8%, and $277,150 of the notes outstanding include a 10% original issuance discount. The notes are convertible at fixed rates ranging from $0.08 to $0.25 per share and $339,900 of the face amount of the notes are convertible at floating discounts to the market price of our common stock at the date of conversion. The majority of these floating rates are at a 30% discount to market.
	At the time of issuance the value of the beneficial conversion feature of these notes is calculated, recorded as a discount to the note, and amortized to expense over the term of the note. If the notes are converted before maturity, any unamortized expense at the time of conversion is expensed at the time of conversion. As of September 30, 2013, there is $149,831 of unamortized discount remaining to be amortized in future periods.
	A total of $896,980 and $274,815 of discount was amortized to interest expense during the nine month periods ending September 30, 2013 and 2012, respectively.

4_Stockholders_Equity

4. Stockholders Equity	9 Months Ended
	Sep. 30, 2013
Equity [Abstract]	'
4. Stockholders Equity	'
	During the nine months ended September 30, 2013, we issued 600,000 shares of common stock related to the payment of $60,000 of trade payables in an exempt offering under Regulation D of the Securities Act of 1933. We also issued 165,735 shares of common stock in connection with restricted stock payments to employees during the same period. During the nine months ended September 30, 2013, we issued 14,832,858 shares of common stock as the result of the conversion of notes payable and related accrued interest in the amount of $1,099,527. We also issued 470,085 shares in connection with a cashless exercise of 1,692,307 warrants issued in January 2013 in connection with the issuance of convertible notes.
	During the nine months ended September 30, 2012, we issued 494,949 shares of common stock in payment of accounts payable in the amount of $120,000, and 94,360 shares in connection with restricted stock payments to employees.

5_ShareBased_Payments

5. Share-Based Payments	9 Months Ended
	Sep. 30, 2013
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]	'
5. Share-Based Payments	'
	We use the fair value method to account for stock based compensation. We recorded $60,204 and $215,291 in compensation expense in the periods ended September 30, 2013 and 2012, respectively, related to options and restricted stock issued under our stock-based incentive compensation plans. This includes expense related to both options issued and committed, as well as unissued restricted stock in the current year, and options issued in prior years for which the requisite service period for those options includes the current year. The fair value of these options was calculated using the Black-Scholes option pricing model. Information related to the assumptions used in this model is set forth in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012. For options issued in 2013, the same approximate assumptions were used.

6_Contingencies

6. Contingencies	9 Months Ended
	Sep. 30, 2013
Commitments and Contingencies Disclosure [Abstract]	'
6. Contingencies	'
	Litigation
	The Company is a defendant in minor lawsuits described in greater detail in its 2012 Annual Report on Form 10-K. The Company expects any potential eventual payment to have no material effect on the financial statements.

7_Subsequent_Events

7. Subsequent Events	9 Months Ended
	Sep. 30, 2013
Subsequent Events [Abstract]	'
7. Subsequent Events	'
	In October 2013, the Company issued an additional 400,000 shares of common stock in payment of an amount due to the Company’s patent attorney. In addition, 3,809,717 shares of common stock were issued related to the conversion of convertible notes payable in the amount of $70,106.
	In October 2013, the Company signed a non-binding letter of intent with Nanofilm, Ltd. to combine the two companies through a stock swap transaction.

2_Supplemental_Cash_Flow_Infor1

2. Supplemental Cash Flow Information (Narrative) (USD $)	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Supplemental Cash Flow Elements [Abstract]	'	'
Cash paid for interest	$11,641	$18,676
Capital lease transaction	'	$28,567

3_Notes_Payable_and_LongTerm_D1

3. Notes Payable and Long-Term Debt (Narrative) (USD $)	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Restricted stock issued to employees	'	'
Face amount notes issued	$2,042,958	'
Maturity dates of notes	'2013 through August 2014	'
Interest rates of notes	'5% to 8%	'
Unamortized discount	149,831	'
Discount amortized to interest expense	($896,980)	($274,815)

4_Stockholders_Equity_Narrativ

4. Stockholders Equity (Narrative) (USD $)	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Notes to Financial Statements	'	'
Restricted stock issued	165,735	94,360
Stock issued in connection with cashless exercise of warrants, shares	470,085	'
Warrant shares issued	1,692,307	'
Stock issued for conversion of accounts payable-shares	600,000	494,949
Stock issued for conversion of accounts payable	$60,000	$120,000
Stock issued in conversion of notes payable and related interest, shares	14,832,858	'
Stock issued in conversion of notes payable and related interest, value	$1,099,527	'

5_ShareBased_Payments_Narrativ

5. Share-Based Payments (Narrative) (USD $)	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Notes to Financial Statements	'	'
Share-based compensation	$60,204	$215,291