Nano Magic (NMGX) 10-Q 16 May 22 2022 Q1 Quarterly report Financial data

Cover

Cover - shares	3 Months Ended
	Mar. 31, 2022	May 09, 2022
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Mar. 31, 2022
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2022
Current Fiscal Year End Date	--12-31
Entity File Number	1-11602
Entity Registrant Name	NANO MAGIC HOLDINGS INC.
Entity Central Index Key	0000891417
Entity Tax Identification Number	47-1598792
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	31601 Research Park Drive
Entity Address, City or Town	Madison Heights
Entity Address, State or Province	MI
Entity Address, Postal Zip Code	48071
City Area Code	(844)
Local Phone Number	273-6462
Title of 12(b) Security	Common Stock, $0.0001 par value
Trading Symbol	NMGX
Entity Current Reporting Status	No
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		10,147,126

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
REVENUES:
Total Revenues	$ 686,258	$ 2,311,175
COST OF REVENUES:
Total Cost of Revenues	666,646	1,283,206
GROSS PROFIT	19,612	1,027,969
OTHER OPERATING INCOME		336,017
OPERATING EXPENSES:
Selling and marketing expenses	79,529	30,588
Salaries, wages and related benefits	469,111	574,139
Research and development	7,489	1,876
Professional fees	253,979	192,641
General and administrative expenses	264,245	188,938
Total Operating Expense	1,074,353	988,182
INCOME (LOSS) FROM OPERATIONS	(1,054,741)	375,804
OTHER EXPENSE:
Interest expense	8,911	5,407
Total Other Expense	8,911	5,407
NET INCOME (LOSS)	$ (1,063,652)	$ 370,397
NET INCOME (LOSS) PER COMMON SHARE:
Basic	$ (0.11)	$ 0.04
Diluted	$ (0.11)	$ 0.04
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic	9,945,658	8,906,219
Diluted	9,945,658	8,906,219
Product [Member]
REVENUES:
Total Revenues	$ 605,862	$ 2,182,446
COST OF REVENUES:
Total Cost of Revenues	557,390	1,130,776
Service [Member]
REVENUES:
Total Revenues	80,396	128,729
COST OF REVENUES:
Total Cost of Revenues	$ 109,256	$ 152,430

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (Unaudited) - USD ($)	Mar. 31, 2022	Dec. 31, 2021
CURRENT ASSETS:
Cash	$ 303,374	$ 242,474
Investments	10,716	10,716
Accounts receivable, net	262,301	312,344
Inventory, net	1,327,580	1,379,005
Prepaid expenses and contract assets	134,697	212,127
Total Current Assets	2,038,668	2,156,666
Operating lease right-of-use assets	1,255,893	1,309,912
Property, plant and equipment, net	610,741	634,133
Other assets	5,890	5,890
Total Assets	3,911,192	4,106,601
CURRENT LIABILITIES:
Accounts payable	677,804	649,439
Accounts payable - related parties	16,779	21,066
Accrued expenses and other current liabilities	103,133	69,474
Current portion of notes payable	76,932	87,567
Advances from related parties	77,887	113,952
Current portion of lease liabilities	171,924	166,279
Contract liabilities	10,366	45,762
Total Current Liabilities	1,134,825	1,153,539
Notes Payable, net of current portion	305,953	115,928
Lease liabilities, net of current portion	875,994	921,317
Total Liabilities	2,316,772	2,190,784
Commitments and Contingencies (See Note 7)
STOCKHOLDERS’ EQUITY:
Preferred stock, $0.0001 par value, 100,000 shares authorized; no shares issued and outstanding
Common stock: $0.0001 par value, 30,000,000 shares authorized; 10,077,681 and 9,702,680 issued and outstanding at March 31, 2022 and December 31, 2021, respectively	1,008	970
Additional paid-in capital	12,702,228	11,960,011
Accumulated deficit	(11,108,816)	(10,045,164)
Total Stockholders’ Equity	1,594,420	1,915,817
Total Liabilities and Stockholders’ Equity	$ 3,911,192	$ 4,106,601

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Mar. 31, 2022	Dec. 31, 2021
Statement of Financial Position [Abstract]
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	100,000	100,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	30,000,000	30,000,000
Common stock, shares issued	10,077,681	9,702,680
Common stock, shares outstanding	10,077,681	9,702,680

Condensed Consolidated Statem_2

Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($)	Common Class A [Member]Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Total
Beginning balance, value at Dec. 31, 2020	$ 846	$ 9,867,174	$ (8,470,600)	$ 1,397,420
Beginning balance, shares at Dec. 31, 2020	8,459,995
Common stock issued for cash, net of issuance costs	$ 115	1,442,962		1,443,077
Common stock issued for cash, net of issuance costs, shares	1,154,462
Common stock issued for services and for stock appreciation rights	$ 4	40,996		41,000
Common stock issued for services and for stock appreciation rights, shares	42,890
Warrants on private placement		57,723		57,723
Stock-based compensation		26,431		26,431
Net income (loss)			370,397	370,397
Ending balance, value at Mar. 31, 2021	$ 965	11,435,286	(8,100,203)	3,336,048
Ending balance, shares at Mar. 31, 2021	9,657,347
Beginning balance, value at Dec. 31, 2021	$ 970	11,960,011	(10,045,164)	1,915,817
Beginning balance, shares at Dec. 31, 2021	9,702,680
Common stock issued for cash, net of issuance costs	$ 38	656,214		656,252
Common stock issued for cash, net of issuance costs, shares	375,001
Warrants on private placement		18,748		18,748
Stock-based compensation		67,255		67,255
Net income (loss)			(1,063,652)	(1,063,652)
Ending balance, value at Mar. 31, 2022	$ 1,008	$ 12,702,228	$ (11,108,816)	$ 1,594,420
Ending balance, shares at Mar. 31, 2022	10,077,681

Condensed Consolidated Statem_3

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$ (1,063,652)	$ 370,397
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Change in inventory obsolescence reserve	35,716
Depreciation and amortization expense	28,302	24,458
Bad debt expense	22,715
Stock-based compensation	67,255	67,431
Change in operating assets and liabilities:
Accounts receivable	27,328	306,869
Inventory	15,709	(128,783)
Prepaid expenses and contract assets	77,430	(58,337)
Accounts payable and accrued expenses	40,958	(256,896)
Accounts payable - related party	16,779	(12,000)
Operating lease liabilities	14,341	3,751
Deferred revenue	(35,396)	(25,859)
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES	(752,515)	291,031	$ (1,377,056)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment	(4,910)	(22,962)
NET CASH USED BY INVESTING ACTIVITIES	(4,910)	(22,962)
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of bank loans	(11,563)	(10,955)
Proceeds from bank loans		79,305
Proceeds from issuance of convertible debt	200,000
Proceeds from sale of common stock and warrants	675,000	1,500,800
Repayment of advances from related parties	(36,065)	(10,500)
Repayment of finance leases	(9,047)
NET CASH PROVIDED BY FINANCING ACTIVITIES	818,325	1,558,650
NET INCREASE IN CASH	60,900	1,826,719
CASH, beginning of year	242,474	288,134	288,134
CASH, end of period	303,374	2,114,853	$ 242,474
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the period for interest	$ 8,911	$ 5,407

ORGANIZATION AND BASIS OF PRESE

ORGANIZATION AND BASIS OF PRESENTATION	3 Months Ended
	Mar. 31, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
ORGANIZATION AND BASIS OF PRESENTATION	NOTE 1 – ORGANIZATION AND BASIS OF PRESENTATION Organization Nano Magic Holdings Inc. (“we”, “us”, “our”, “Nano Magic” or the “Company”), a Delaware corporation, develops and sells a portfolio of nano-layer coatings, nano-based cleaners, and nano-composite products based on its proprietary technology, and performs nanotechnology product research and development generating revenues through performing contract services. On March 3, 2020, we changed our name from PEN Inc. to Nano Magic Inc. and on March 2, 2021 we changed our name to Nano Magic Holdings Inc. Through the Company’s wholly-owned subsidiary, Nano Magic LLC, formerly known as PEN Brands LLC, we develop, manufacture and sell consumer and institutional products using nanotechnology to deliver unique performance attributes at the surfaces of a wide variety of substrates. These products are marketed internationally directly to consumers and also to retailers and other institutional customers. On March 31, 2020, PEN Brands LLC changed its name to Nano Magic LLC. Through the Company’s wholly-owned subsidiary, Applied Nanotech, Inc., we primarily perform contract research services for the Company and for governmental and private customers. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) for interim financial information. Accordingly, they do not include all the information and disclosures required by US GAAP for annual financial statements. In the opinion of management, such statements include all adjustments (consisting only of normal recurring items) which are considered necessary for a fair presentation of the unaudited condensed consolidated financial statements of the Company as of March 31, 2022 and for the three months ended March 31, 2022 and 2021. The results of operations for the three months ended March 31, 2022 are not necessarily indicative of the operating results for the full year ending December 31, 2022 or any other period. The balance sheet at December 31, 2021 has been derived from the audited financial statement at that date but does not include all the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related disclosures of the Company as of December 31, 2021 and for the year then ended, which were filed with the Securities and Exchange Commission on Form 10-K on March 30, 2022. Going Concern These unaudited consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the unaudited consolidated financial statements, the Company had losses from operations and net cash used by operations of $ 1,054,741 and $ 752,515 for the quarter ended March 31, 2022 and of $ 1,765,945 and $ 1,377,056 for the year ended December 31, 2021. These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that these unaudited consolidated financial statements are issued. Management cannot provide assurance that the Company will ultimately achieve profitable operations, become cash flow positive or raise additional capital. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. They do not include any adjustments related to the recoverability and/or classification of the recorded asset amounts and/or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern. Reclassifications Certain accounts and financial statement captions in the prior periods have been reclassified to conform to the current period

INVENTORY

INVENTORY	3 Months Ended
	Mar. 31, 2022
Inventory Disclosure [Abstract]
INVENTORY	NOTE 2 – INVENTORY At March 31, 2022 and December 31, 2021, inventory consisted of the following: SCHEDULE OF INVENTORY March 31, December 31, Raw materials $ 686,465 $ 673,518 Work-in-progress 314,600 314,461 Finished goods 427,973 456,768 Inventory, gross 1,429,038 1,444,747 Less: reserve for obsolescence (101,458 ) (65,742 ) Inventory, net $ 1,327,580 $ 1,379,005

FACTORING

FACTORING	3 Months Ended
	Mar. 31, 2022
Factoring
FACTORING	NOTE 3 – FACTORING The Company participates in a factoring program with NOWaccount ® Network Corporation (“NOW”). At the time of a sale, NOW buys the receivables at a discount, based on the due date and other terms. The Company did not incur any cost associated with this program for the period ended March 31, 2022. Costs associated with this program was $ 3,464

DEBT

DEBT	3 Months Ended
	Mar. 31, 2022
Debt Disclosure [Abstract]
DEBT	NOTE 4 – DEBT On February 10, 2015, Nano Magic entered a $ 373,000 promissory note (the “Equipment Note”) with KeyBank, N.A. (the “Bank”). The unpaid principal balance of this Equipment Note is payable in 60 equal monthly installments payments of principal and interest through June 10, 2020 . The Equipment Note is secured by certain equipment, as defined in the Equipment Note, and bears interest computed at a rate of interest of 4.35 % per annum based on a year of 360 days. On June 18, 2019, Nano Magic entered into an Amendment to the Equipment Note with the Bank. By the amendment, the maturity date of the note was extended until April 10, 2022 , the interest rate was raised to 6.29 % per year, and the monthly payments were reduced to $ 4,053 per month, including interest. See Note 9, Subsequent Events, regarding a further amendment of the Equipment Note. At March 31, 2022, the amount due under the Equipment Note amounted to $ 30,114 and is current. On August 11, 2020, the company entered into a finance lease for furniture that will be used in the new Michigan facility. We financed $ 60,684 36 1,972 29,329 21,609 7,720 On September 24, 2020, the company entered into a finance lease with Raymond Leasing Corporation for a forklift. Nano Magic LLC financed $ 14,250 36 425 7,378 4,860 2,518 In December 2020, the company entered into a finance lease for production equipment. We financed $ 85,000 over a period of 48 months and are required to make monthly payments of $ 2,135 during that time. As of March 31, 2022, the balance on the lease was $ 61,181 ; the current and non-current portions were $ 20,349 and $ 40,832 , respectively. Other Applied Nanotech long term debt was $ 54,883 Between January and February of 2022, the company issued three convertible promissory notes for $ 200,000 8 March 31, 2025 1.75

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS	3 Months Ended
	Mar. 31, 2022
Related Party Transactions [Abstract]
RELATED PARTY TRANSACTIONS	NOTE 5 – RELATED PARTY TRANSACTIONS For the period ended March 31, 2022, we paid consulting and legal fees to our director Ronald Berman of $ 54,150 62,600 Tom J. Berman, a director and officer, was paid salary of $ 55,000 52,500 120,453 15,000 10,500 77,887 16,000 2,000 per month Mr. Ron Berman and Mr. Tom Berman are the managers of the limited liability company that is the manager of PEN Comeback, LLC, PEN Comeback 2, LLC, Magic Growth, LLC, Magic Growth 2 LLC and Magic Growth 3 LLC. These five limited liability companies purchased shares of common stock and derivative securities from us in 2018, 2019, 2020, 2021 and 2022. See the subsection on Sales of Stock under Issuances of Common Stock in In addition, Mr. Tom Berman and Mr. Ron Berman are two of three individuals who share voting power of the sole manager of the limited liability company that is our landlord in Michigan. Together, Tom and Ron Berman hold, in the aggregate, a 5 % economic interest in the landlord entity. Another director, Miles Gatland, owns a 12.5% The lease for the Michigan facility gives us the right, during the first three years of the lease, to buy up to a 49% interest in the landlord for a price equal to 49% of the contributions received from other members.

STOCKHOLDERS_ EQUITY

STOCKHOLDERS’ EQUITY	3 Months Ended
	Mar. 31, 2022
Equity [Abstract]
STOCKHOLDERS’ EQUITY	NOTE 6 - STOCKHOLDERS’ EQUITY Description of Preferred and Common Stock Preferred Stock The preferred stock may be issued in one or more series. The Company’s board of directors are authorized to issue the shares of preferred stock in such series and to fix from time to time before issuance thereof the number of shares to be included in any such series and the designation, powers, preferences and relative, participating, optional or other rights, and the qualifications, limitations or restrictions thereof, of such series. Common Stock The rights of each share of common are the same with respect to dividends, distributions and rights upon liquidation. Holders of common stock each have one vote per share in the election of directors and other matters submitted to a vote of the stockholders. Issuances of Common Stock Sales of Common Stock and Derivative Equity Securities On January 7, 2022, and again on February 14, 2022, the Company sold to several investors an aggregate of $ 200,000 convertible promissory notes due March 31, 2025 8 % per annum, payable quarterly in cash. The notes are convertible at any time at the option of the holder into shares of common stock at a conversion price of $ 1.75 per share. On January 11, 2022, the Company sold to Magic Growth 3 LLC 222,223 shares of common stock for proceeds of $ 388,890 and warrants to purchase up to 222,195 shares of common stock for proceeds of $ 11,110 . The warrants are exercisable at any time during the four years after date of issue at a warrant exercise price of $ 2.25 . On February 22, 2022, the Company sold to Magic Growth 3 LLC 152,778 shares of common stock for proceeds of $ 267,362 and warrants to purchase up to 152,770 shares of common stock for proceeds of $ 7,638 . The warrants are exercisable at any time during the four years after date of issue at a warrant exercise price of $ 2.25 . Stock Options Stock options to purchase common stock outstanding at March 31, 2022 include the 130,700 options granted under the 2021 Equity Incentive Plan, and the expiration or forfeiture of 120,682 options. No options were exercised during the period. No options have been included in diluted earnings per share as they would be anti-dilutive. SCHEDULE OF STOCK OPTION PLAN ACTIVITY Number of Options Weighted Average Exercise Price Weighted Average Term (Years) Aggregate Intrinsic Value Outstanding December 31, 2021 2,133,702 $ 0.77 4.93 - Exercised - - Issued 130,700 $ 0.80 - - Expired & forfeited 120,682 1.88 Outstanding March 31, 2022 2,143,720 $ 0.72 3.24 $ - Exercisable March 31, 2022 959,881 $ 0.67 2.93 $ - SCHEDULE OF STOCK OPTIONS AND WARRANTS March 31, December 31, Stock options 2,143,720 3,123,702 Stock warrants 6,972,143 5,443,440 Total 9,115,863 8,567,142 Net income (loss) per share for common stock is as follows: SCHEDULE OF WEIGHTED AVERAGE NUMBER OF SHARES Net income (loss) per common share outstanding: Three Months Ended March 31, Three Months Ended Common stock $ (0.11 ) $ 0.04 Weighted average shares outstanding: 9,945,658 8,906,219 Warrants As of March 31, 2022, there were outstanding and exercisable warrants to purchase 6,972,143 1.69 48 2015 Equity Incentive Plan On November 30, 2015, the Board of Directors authorized the 2015 Equity Incentive Plan. On December 31, 2019, we issued an aggregate of 102,500 66,615 100,000 2021 Equity Incentive Plan On March 2, 2021, our Board adopted the Nano Magic 2021 Equity Incentive Plan (the “Plan”) to allow equity compensation for those who provide services to the Company and to encourage ownership in the Company by personnel whose service to the Company is important to its continued progress, to encourage recipients to act as owners and thereby in the stockholders’ interest and to enable recipients to share in the Company’s success. Initially, 85,000 shares were available for issuance under the Plan and that number of options were also granted to employees on March 2, 2021. On April 8, 2021 the number of shares under the Plan was increased by 2,500 , and an additional 2,500 options were granted. During the period ended March 31, 2022 we granted 130,700 options with an exercise price of $ 0.80 and weighted average fair value on the grant date of $ 0.60 .

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	3 Months Ended
	Mar. 31, 2022
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	NOTE 7 - COMMITMENTS AND CONTINGENCIES Litigation The Company may be, from time to time, subject to various administrative, regulatory, and other legal proceedings arising in the ordinary course of business. We are not currently a defendant in any proceedings. Our policy is to accrue costs for contingent liabilities, including legal proceedings or unasserted claims that may result in legal proceedings, when a liability is probable and the amount can be reasonably estimated. As of March 31, 2022, the Company has no

SEGMENT REPORTING

SEGMENT REPORTING	3 Months Ended
	Mar. 31, 2022
Segment Reporting [Abstract]
SEGMENT REPORTING	NOTE 8 – SEGMENT REPORTING The Company’s principal operating segments coincide with the types of products to be sold. The products from which revenues are derived are consistent with the reporting structure of the Company’s internal organization. The Company’s two Segment operating profit is determined based upon internal performance measures used by the chief operating decision-maker. The Company derives the segment results from its internal management reporting system. The accounting policies the Company uses to derive reportable segment results are the same as those used for external reporting purposes. Management measures the performance of each reportable segment based upon several metrics, including net revenues, gross profit and operating loss. Management uses these results to evaluate the performance of, and to assign resources to, each of the reportable segments. The Company manages certain operating expenses separately at the corporate level and does not allocate such expenses to the segments. Segment income from operations excludes interest income/expense and other income or expenses and income taxes according to how a particular reportable segment’s management is measured. Management does not consider impairment charges, and unallocated costs in measuring the performance of the reportable segments. Segment information available with respect to these reportable business segments for the three months ended March 31, 2022 and 2021 was as follows: SCHEDULE OF SEGMENT INFORMATION 2022 2021 For the Three Months Ended 2022 2021 Revenues: Product segment $ 605,862 $ 2,182,446 Contract services segment $ 80,396 128,729 Total segment and consolidated revenues $ 686,258 $ 2,311,175 Cost of revenues: Products $ 557,390 $ 1,130,776 Contract services segment $ 109,256 152,430 Total segment and consolidated cost of revenues $ 666,646 $ 1,283,206 Gross profit (loss): Product segment $ 48,472 $ 1,051,670 Contract services segment (28,860 ) (23,701 ) Total segment and consolidated gross profit $ 19,612 $ 1,027,969 Gross margin: Product segment 8.0 % 48.2 % Contract services segment (35.9 )% (18.4 )% Total gross margin 2.9 % 44.5 % Segment operating expenses (income): Product segment 1,056,017 953,090 Product segment income - (336,017 ) Contract services segment 18,336 35,092 Total segment operating expenses 1,074,353 652,165 Income (loss) from operations: Product segment $ (1,007,545 ) $ 434,597 Contract services segment (47,196 ) (58,793 ) Total consolidated income (loss) from operations (1,054,741 ) 375,804 Depreciation and amortization: Product segment $ 28,092 $ 24,043 Contract services segment 209 415 Total consolidated depreciation and amortization $ 28,301 $ 24,458 Capital additions: Product segment $ 4,910 $ 22,962 Contract services segment - - Total consolidated capital additions $ 4,910 $ 22,962 March 31, 2022 March 31, 2021 Segment total assets: Product segment $ 3,650,696 $ 4,735,871 Contract services segment 118,771 366,186 Corporate 141,725 1,344,547 Total consolidated total assets $ 3,911,192 $ 6,446,604

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	3 Months Ended
	Mar. 31, 2022
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	NOTE 9 - SUBSEQUENT EVENTS On April 14, 2022, the Company sold to Magic Growth 3 LLC 69,445 shares of common stock for proceeds of $ 121,529 and warrants to purchase up to 69,425 shares of common stock for proceeds of $ 3,471 . The warrants are exercisable at any time during the four years 2.25 . On May 2, 2022, we amended the Equipment Note with Key Bank to extend the due date on the note until December 10, 2022 6.29 % per year and the monthly payments remain at $ 4,053 per month.

INVENTORY (Tables)

INVENTORY (Tables)	3 Months Ended
	Mar. 31, 2022
Inventory Disclosure [Abstract]
SCHEDULE OF INVENTORY	At March 31, 2022 and December 31, 2021, inventory consisted of the following: SCHEDULE OF INVENTORY March 31, December 31, Raw materials $ 686,465 $ 673,518 Work-in-progress 314,600 314,461 Finished goods 427,973 456,768 Inventory, gross 1,429,038 1,444,747 Less: reserve for obsolescence (101,458 ) (65,742 ) Inventory, net $ 1,327,580 $ 1,379,005

STOCKHOLDERS_ EQUITY (Tables)

STOCKHOLDERS’ EQUITY (Tables)	3 Months Ended
	Mar. 31, 2022
Equity [Abstract]
SCHEDULE OF STOCK OPTION PLAN ACTIVITY	SCHEDULE OF STOCK OPTION PLAN ACTIVITY Number of Options Weighted Average Exercise Price Weighted Average Term (Years) Aggregate Intrinsic Value Outstanding December 31, 2021 2,133,702 $ 0.77 4.93 - Exercised - - Issued 130,700 $ 0.80 - - Expired & forfeited 120,682 1.88 Outstanding March 31, 2022 2,143,720 $ 0.72 3.24 $ - Exercisable March 31, 2022 959,881 $ 0.67 2.93 $ -
SCHEDULE OF STOCK OPTIONS AND WARRANTS	SCHEDULE OF STOCK OPTIONS AND WARRANTS March 31, December 31, Stock options 2,143,720 3,123,702 Stock warrants 6,972,143 5,443,440 Total 9,115,863 8,567,142
SCHEDULE OF WEIGHTED AVERAGE NUMBER OF SHARES	SCHEDULE OF WEIGHTED AVERAGE NUMBER OF SHARES Net income (loss) per common share outstanding: Three Months Ended March 31, Three Months Ended Common stock $ (0.11 ) $ 0.04 Weighted average shares outstanding: 9,945,658 8,906,219

SEGMENT REPORTING (Tables)

SEGMENT REPORTING (Tables)	3 Months Ended
	Mar. 31, 2022
Segment Reporting [Abstract]
SCHEDULE OF SEGMENT INFORMATION	Segment information available with respect to these reportable business segments for the three months ended March 31, 2022 and 2021 was as follows: SCHEDULE OF SEGMENT INFORMATION 2022 2021 For the Three Months Ended 2022 2021 Revenues: Product segment $ 605,862 $ 2,182,446 Contract services segment $ 80,396 128,729 Total segment and consolidated revenues $ 686,258 $ 2,311,175 Cost of revenues: Products $ 557,390 $ 1,130,776 Contract services segment $ 109,256 152,430 Total segment and consolidated cost of revenues $ 666,646 $ 1,283,206 Gross profit (loss): Product segment $ 48,472 $ 1,051,670 Contract services segment (28,860 ) (23,701 ) Total segment and consolidated gross profit $ 19,612 $ 1,027,969 Gross margin: Product segment 8.0 % 48.2 % Contract services segment (35.9 )% (18.4 )% Total gross margin 2.9 % 44.5 % Segment operating expenses (income): Product segment 1,056,017 953,090 Product segment income - (336,017 ) Contract services segment 18,336 35,092 Total segment operating expenses 1,074,353 652,165 Income (loss) from operations: Product segment $ (1,007,545 ) $ 434,597 Contract services segment (47,196 ) (58,793 ) Total consolidated income (loss) from operations (1,054,741 ) 375,804 Depreciation and amortization: Product segment $ 28,092 $ 24,043 Contract services segment 209 415 Total consolidated depreciation and amortization $ 28,301 $ 24,458 Capital additions: Product segment $ 4,910 $ 22,962 Contract services segment - - Total consolidated capital additions $ 4,910 $ 22,962 March 31, 2022 March 31, 2021 Segment total assets: Product segment $ 3,650,696 $ 4,735,871 Contract services segment 118,771 366,186 Corporate 141,725 1,344,547 Total consolidated total assets $ 3,911,192 $ 6,446,604

ORGANIZATION AND BASIS OF PRE_2

ORGANIZATION AND BASIS OF PRESENTATION (Details Narrative) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Operating Income (Loss)	$ 1,054,741	$ (375,804)	$ 1,765,945
Net Cash Provided by (Used in) Operating Activities	$ 752,515	$ (291,031)	$ 1,377,056

SCHEDULE OF INVENTORY (Details)

SCHEDULE OF INVENTORY (Details) - USD ($)	Mar. 31, 2022	Dec. 31, 2021
Inventory Disclosure [Abstract]
Raw materials	$ 686,465	$ 673,518
Work-in-progress	314,600	314,461
Finished goods	427,973	456,768
Inventory, gross	1,429,038	1,444,747
Less: reserve for obsolescence	(101,458)	(65,742)
Inventory, net	$ 1,327,580	$ 1,379,005

FACTORING (Details Narrative)

FACTORING (Details Narrative)	3 Months Ended
	Mar. 31, 2022USD ($)
Factoring
Factoring cost	$ 3,464

DEBT (Details Narrative)

DEBT (Details Narrative) - USD ($)	Sep. 24, 2020	Aug. 11, 2020	Jun. 18, 2019	Feb. 10, 2015	Dec. 31, 2020	Feb. 28, 2022	Mar. 31, 2022	Mar. 31, 2021
Short-Term Debt [Line Items]
Finance lease, monthly payments							$ 9,047
Long term debt							54,883
Convertible promissory notes, issued							200,000
Three Convertible Promissory Notes [Member]
Short-Term Debt [Line Items]
Debt instrument, maturity date						Mar. 31, 2025
Debt instrument, interest rate						8.00%
Convertible promissory notes, issued						$ 200,000
Debt instrument conversion price						$ 1.75
Production Equipment [Member]
Short-Term Debt [Line Items]
Finance lease liability					$ 85,000		61,181
Finance lease term					48 months
Finance lease, monthly payments					$ 2,135
Finance lease liability, current							20,349
Finance lease liability, non current							40,832
Raymond Leasing Corporation [Member]
Short-Term Debt [Line Items]
Finance lease liability	$ 14,250						7,378
Finance lease term	36 months
Finance lease, monthly payments	$ 425
Finance lease liability, current							4,860
Finance lease liability, non current							2,518
Michigan Facility [Member]
Short-Term Debt [Line Items]
Finance lease liability		$ 60,684					29,329
Finance lease term		36 months
Finance lease, monthly payments		$ 1,972
Finance lease liability, current							21,609
Finance lease liability, non current							7,720
Nano Magic LLC [Member] | Equipment Note [Member]
Short-Term Debt [Line Items]
Debt instrument, face amount				$ 373,000			30,114
Debt instrument, installment payments description				Equipment Note is payable in 60 equal monthly installments payments
Debt instrument, maturity date			Apr. 10, 2022	Jun. 10, 2020
Debt instrument, interest rate			6.29%	4.35%
Debt instrument, periodic payment							$ 4,053

RELATED PARTY TRANSACTIONS (Det

RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Mar. 31, 2020
Related Party Transaction [Line Items]
Repayments of Related Party Debt	$ 36,065	$ 10,500
Tom Berman and Ron Berman [Member]
Related Party Transaction [Line Items]
Economic interest percentage	5.00%
Related Party Transaction, Description of Transaction	The lease for the Michigan facility gives us the right, during the first three years of the lease, to buy up to a 49% interest in the landlord for a price equal to 49% of the contributions received from other members.
Director [Member]
Related Party Transaction [Line Items]
Limited Liability Company or Limited Partnership, Members or Limited Partners, Ownership Interest	12.50%
Tom J. Berman [Member]
Related Party Transaction [Line Items]
Salary and Wage, Officer, Excluding Cost of Good and Service Sold	$ 55,000	52,500
[custom:SalesBonusesToRelatedParty]		120,453
Accrued Professional Fees, Current	2,000
Scott Rickert [Member]
Related Party Transaction [Line Items]
Repayments of Related Party Debt		15,000	$ 10,500
Scott & Jeanne Rickert [Member]
Related Party Transaction [Line Items]
Advances from related parties	77,887
Jeanne Rickert [Member]
Related Party Transaction [Line Items]
Accrued payroll	16,000
Ronald Berman [Member]
Related Party Transaction [Line Items]
Legal and consulting fees	$ 54,150	$ 62,600

SCHEDULE OF STOCK OPTION PLAN A

SCHEDULE OF STOCK OPTION PLAN ACTIVITY (Details)	3 Months Ended
	Mar. 31, 2022USD ($)$ / sharesshares
Equity [Abstract]
Number of Options, Outstanding, Beginning balance | shares	2,133,702
Weighted Average Exercise Price, Outstanding, Beginning balance | $ / shares	$ 0.77
Weighted Average Remaining Contractual Terms (Years), Outstanding, Beginning	4 years 11 months 4 days
Aggregate Intrinsic Value, Beginning balance | $
Number of Options, Exercised | shares
Aggregate Intrinsic Value, Exercised | $
Number of Options, Issued | shares	130,700
Weighted Average Exercise Price, Issued | $ / shares	$ 0.80
Aggregate Intrinsic Value, Issued | $ / shares
Number of Options, Forfeited | shares	120,682
Share-Based Compensation Arrangements by Share-Based Payment Award, Options, Forfeitures in Period, Weighted Average Exercise Price | $ / shares	$ 1.88
Number of Options, Outstanding, Ending balance | shares	2,143,720
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Weighted Average Exercise Price, Ending Balance | $ / shares	$ 0.72
Weighted Average Remaining Contractual Terms (Years), Outstanding, Ending	3 years 2 months 26 days
Aggregate Intrinsic Value, Ending balance | $
Number of Options, Exercisable, Ending balance | shares	959,881
Weighted Average Exercise Price, Exercisable Ending balance | $ / shares	$ 0.67
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term	2 years 11 months 4 days
Aggregate Intrinsic Value, Exercisable | $

SCHEDULE OF STOCK OPTIONS AND W

SCHEDULE OF STOCK OPTIONS AND WARRANTS (Details) - shares	3 Months Ended	12 Months Ended
	Mar. 31, 2022	Dec. 31, 2021
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total Stock options and stock warrants	9,115,863	8,567,142
Equity Option [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total Stock options and stock warrants	2,143,720	3,123,702
Stock Warrants [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total Stock options and stock warrants	6,972,143	5,443,440

SCHEDULE OF WEIGHTED AVERAGE NU

SCHEDULE OF WEIGHTED AVERAGE NUMBER OF SHARES (Details) - $ / shares	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Equity [Abstract]
Net income (loss) per common shares outstanding	$ (0.11)	$ 0.04
Total weighted average shares outstanding	9,945,658	8,906,219

STOCKHOLDERS_ EQUITY (Details N

STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($)	Feb. 22, 2022	Feb. 14, 2022	Jan. 11, 2022	Jan. 07, 2022	Apr. 08, 2021	Jan. 31, 2020	Dec. 31, 2019	Mar. 31, 2022	Mar. 31, 2021	Mar. 02, 2021
Short-Term Debt [Line Items]
Common stock, voting rights								The rights of each share of common are the same with respect to dividends, distributions and rights upon liquidation. Holders of common stock each have one vote per share in the election of directors and other matters submitted to a vote of the stockholders.
Convertible promissory notes								$ 200,000
Warrant term								48 months
Warrant exercise price								$ 1.69
Number of stock options granted								130,700
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Forfeitures in Period								120,682
Warrants outstanding and exercisable warrants								6,972,143
Share-Based Compensation Arrangements by Share-Based Payment Award, Options, Grants in Period, Weighted Average Exercise Price								$ 0.80
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Vested, Weighted Average Grant Date Fair Value								$ 0.60
2015 Equity Incentive Plan [Member]
Short-Term Debt [Line Items]
Stock issued, shares, new issues							102,500
Accrued Salaries							$ 66,615
2021 Equity Incentive Plan [Member]
Short-Term Debt [Line Items]
Number of stock options granted					2,500	100,000
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Authorized					2,500					85,000
Magic Growth LLC [Member]
Short-Term Debt [Line Items]
Number of shares sold, shares	152,778		222,223
Number of shares sold, value	$ 267,362		$ 388,890
Warrants to purchase common stock	152,770		222,195
Proceeds from issuance of warrants	$ 7,638		$ 11,110
Warrant term	4 years		4 years
Warrant exercise price	$ 2.25		$ 2.25
Convertible Debt [Member]
Short-Term Debt [Line Items]
Convertible promissory notes		$ 200,000		$ 200,000
Debt instrument, maturity date		Mar. 31, 2025		Mar. 31, 2025
Annual payable interest percentage		8.00%		8.00%
Conversion price per share		$ 1.75		$ 1.75

COMMITMENTS AND CONTINGENCIES (

COMMITMENTS AND CONTINGENCIES (Details Narrative)	3 Months Ended
	Mar. 31, 2022USD ($)
Commitments and Contingencies Disclosure [Abstract]
Litigation settlement	$ 0

SCHEDULE OF SEGMENT INFORMATION

SCHEDULE OF SEGMENT INFORMATION (Details) - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021
Segment Reporting Information [Line Items]
Total segment and consolidated revenues	$ 686,258	$ 2,311,175
Total segment and consolidated cost of revenues	666,646	1,283,206
Total segment and consolidated gross profit	$ 19,612	$ 1,027,969
Total gross margin	2.90%	44.50%
Total segment operating expenses	$ 1,074,353	$ 652,165
Total consolidated income (loss) from operations	(1,054,741)	375,804
Total consolidated depreciation and amortization	28,301	24,458
Total consolidated capital additions	4,910	22,962
Total consolidated total assets	3,911,192	6,446,604	$ 4,106,601
Product Segment [Member]
Segment Reporting Information [Line Items]
Total segment and consolidated revenues	605,862	2,182,446
Total segment and consolidated cost of revenues	557,390	1,130,776
Total segment and consolidated gross profit	$ 48,472	$ 1,051,670
Total gross margin	8.00%	48.20%
Total segment operating expenses	$ 1,056,017	$ 953,090
Total consolidated income (loss) from operations	(1,007,545)	434,597
Total consolidated depreciation and amortization	28,092	24,043
Total consolidated capital additions	4,910	22,962
Total consolidated total assets	3,650,696	4,735,871
Contract Services Segment [Member]
Segment Reporting Information [Line Items]
Total segment and consolidated revenues	80,396	128,729
Total segment and consolidated cost of revenues	109,256	152,430
Total segment and consolidated gross profit	$ (28,860)	$ (23,701)
Total gross margin	(35.90%)	(18.40%)
Total segment operating expenses	$ 18,336	$ 35,092
Total consolidated income (loss) from operations	(47,196)	(58,793)
Total consolidated depreciation and amortization	209	415
Total consolidated capital additions
Total consolidated total assets	118,771	366,186
Product Segment Income [Member]
Segment Reporting Information [Line Items]
Total segment operating expenses		(336,017)
Corporate Segment [Member]
Segment Reporting Information [Line Items]
Total consolidated total assets	$ 141,725	$ 1,344,547

SEGMENT REPORTING (Details Narr

SEGMENT REPORTING (Details Narrative)	3 Months Ended
	Mar. 31, 2022Segment
Segment Reporting [Abstract]
Number of reportable segments	2

SUBSEQUENT EVENTS (Details Narr

SUBSEQUENT EVENTS (Details Narrative) - USD ($)	May 02, 2022	Apr. 14, 2022	Mar. 31, 2022	Mar. 31, 2021
Subsequent Event [Line Items]
Proceed from issuance of common stock			$ 675,000	$ 1,500,800
Warrant term			48 months
Warrant exercise price			$ 1.69
Subsequent Event [Member] | Equipment Note [Member]
Subsequent Event [Line Items]
Debt instrument, maturity date	Dec. 10, 2022
Debt instrument, interest rate	6.29%
Debt instrument, periodic payment	$ 4,053
Subsequent Event [Member] | Magic Growth 3 LLC [Member]
Subsequent Event [Line Items]
Number of sale stock		69,445
Proceed from issuance of common stock		$ 121,529
Warrants to purchase common stock		69,425
Proceeds from issuance of warrants		$ 3,471
Warrant term		4 years
Warrant exercise price		$ 2.25