NMGX Nano Magic Inc (QB)

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

☒ Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the quarterly period ended March 31, 2024

 

☐ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

COMMISSION FILE NO. 1-11602

 

NANO MAGIC INC.

(Exact name of registrant as specified in its charter)

 

Delaware		47-1598792
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

 

31601 Research Park Drive, Madison Heights, MI 48071

(Address of principal executive office, including Zip Code)

 

Registrant’s telephone number, including area code: (844) 273-6462

 

Securities registered pursuant to Section 12(b) of the Exchange Act:

 

Title of each class		Trading Symbol		Name of Each Exchange on Which Registered
Common Stock, $0.0001 par value		NMGX		OTC Markets

 

Securities registered pursuant to Section 12(g) of the Exchange Act: None

 

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 ☐ No

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, 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 ☐ No

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “accelerated filer”, “large accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☐ (Do not check if a smaller reporting company)	Smaller reporting company ☒

 

Emerging growth company ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No.

 

As of May 21, 2024, the registrant had 13,565,342 shares of common stock issued and outstanding.

 

 

 

Nano Magic Inc.

 

INDEX

 

		Page
Part I. Financial Information		F-1
Item 1. Financial Statements (Unaudited)		F-1
Statements of Income—Three months Ended March 31, 2024 and 2023		F-1
Balance Sheets—March 31, 2024 and December 31, 2023		F-2
Statements of Changes in Stockholders’ Equity for the Three Months Ended March 31, 2024 and 2023		F-3
Statements of Cash Flows—Three months Ended March 31, 2024 and 2023		F-4
Notes to Unaudited Financial Statements		F-5
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		4
Item 3. Quantitative and Qualitative Disclosures about Market Risk		6
Item 4. Controls and Procedures		6
Part II. Other Information		7
Item 1. Legal Proceedings		7
Item 1A. Risk Factors		7
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		7
Item 3. Defaults Upon Senior Securities		7
Item 4. Mine Safety Disclosures		7
Item 5. Other Information		7
Item 6. Exhibits		7
Signatures		8

 

 

FORWARD-LOOKING STATEMENTS

 

This Form 10-Q contains certain forward-looking statements that we believe are within the meaning of the federal securities laws. For this purpose, any statements that are not statements of historical fact may be deemed to be forward-looking statements, including the statements under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding our strategy, future operations, future expectations or future estimates, financial position and objectives of management. Those statements in this Form 10-Q containing the words “believes,” “anticipates,” “plans,” “expects” and similar expressions constitute forward-looking statements, although not all forward-looking statements contain such identifying words. These forward-looking statements are based on our current expectations and are subject to a number of risks, uncertainties and assumptions relating to our operations, results of operations, competitive factors, shifts in market demand and other risks and uncertainties.

 

Although we believe that the assumptions underlying our forward-looking statements are reasonable, any of the assumptions could be inaccurate and actual results may differ from those indicated by the forward-looking statements included in this Form 10-Q. In light of the significant uncertainties inherent in the forward-looking statements included in this Form 10-Q, you should not consider the inclusion of such information as a representation by us or anyone else that we will achieve such results. Moreover, we assume no obligation to update these forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting such forward-looking statements.

 

 

PART I. FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS

 

NANO MAGIC INC.

STATEMENTS OF INCOME

(unaudited)

 

		2024				2023
		For the Three Months Ended March 31,
		2024				2023
NET REVENUES		$	580,112			$	697,029
COST OF SALES			511,369				622,279
GROSS PROFIT			68,743				74,750
OPERATING EXPENSES:
Selling and marketing expenses			82,726				59,424
Salaries, wages and related benefits			202,549				278,576
Stock compensation expense			8,500				30,144
Research and development			20,295				5,904
Professional fees			218,119				189,459
General and administrative expenses			271,428				189,006
Total Operating Expense			803,617				752,513
LOSS FROM OPERATIONS			(734,874	)			(677,763	)
OTHER (EXPENSE) INCOME
Income from investment in subsidiary			10,123				32,156
Loss from sale of note receivable			(15,000	)			-
Interest expense			(12,437	)			(14,368	)
Interest income			5,981				6,938
Total Other (Expense) Income			(11,333	)			24,726
NET LOSS		$	(746,207	)		$	(653,037	)
NET LOSS PER COMMON SHARE
Basic		$	(0.06	)		$	(0.06	)
Diluted		$	(0.06	)		$	(0.06	)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic			13,439,713				10,738,962
Diluted			13,439,713				10,738,962

 

See accompanying notes to financial statements.

 

 

NANO MAGIC INC.

BALANCE SHEETS

(unaudited)

 

		2024				2023
		March 31				December 31
		2024				2023
ASSETS
CURRENT ASSETS:
Cash		$	189,133			$	527,462
Accounts receivable, net of allowance for credit losses of $189,734 and $150,300 at March 31, 2024 and December 31, 2023, respectively			142,949				209,057
Inventory, net			779,991				849,764
Prepaid expenses			49,583				63,538
Current portion of related party note receivable			33,000				50,000
Total Current Assets			1,194,656				1,699,821
Operating lease right-of-use assets, net			795,634				845,563
Property, plant and equipment, net			409,572				424,103
Related party note receivable, non-current			193,782				291,782
Non-marketable equity investment in subsidiary			263,959				253,835
Total Assets		$	2,857,603			$	3,515,104
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable		$	553,705			$	593,338
Accounts payable - related parties			90,550				55,520
Accounts payable			90,550				55,520
Accrued expenses and other current liabilities			318,945				245,398
Current portion of notes payable			347,494				121,610
Current portion of notes payable from related party			25,000				-
Current portion of notes payable			25,000				-
Current portion of finance leases			18,368				24,194
Advances from related parties			42,887				42,887
Current portion of operating lease liabilities			167,095				161,905
Total Current Liabilities			1,564,044				1,244,852
Notes Payable, net of current portion			150,000				375,000
Notes Payable - related parties, net of current portion			-				25,000
Notes Payable - net of current portion			-				25,000
Operating lease liabilities, net of current portion			516,528				560,514
Total Liabilities			2,230,572				2,205,366
Commitments and Contingencies (See Note 8)			-				-
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; 13,498,676 and 13,425,342 issued and outstanding at March 31, 2024 and December 31, 2023, respectively			1,349				1,342
Additional paid-in capital			16,374,361				16,310,868
Accumulated deficit			(15,748,679	)			(15,002,472	)
Total Stockholders’ Equity			627,031				1,309,738
Total Liabilities and Stockholders’ Equity		$	2,857,603			$	3,515,104

 

See accompanying notes to financial statements.

 

 

NANO MAGIC INC.

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

FOR THE THREE MONTHS ENDED MARCH 31, 2024 AND 2023

(unaudited)

 

		Shares				Amount				Capital				Deficit				Equity
		Class A Common Stock								Additional Paid-in				Accumulated				Total Stockholders’
		Shares				Amount				Capital				Deficit				Equity
Balance, December 31, 2022			10,722,431			$	1,072			$	13,763,143			$	(12,146,753	)		$	1,617,462
Common stock issued for cash, net of issuance costs			74,806				7				93,500				-				93,507
Stock-based compensation			-				-				30,144				-				30,144
Stock issued for services			52,800				5				65,955				-				65,960
Warrants and options on private placement			-				-				1,492				-				1,492
Net loss			-				-				-				(653,037	)			(653,037	)
Balance, March 31, 2023			10,850,037			$	1,084			$	13,954,234			$	(12,799,790	)		$	1,155,528
Balance, December 31, 2023			13,425,342			$	1,342			$	16,310,868			$	(15,002,472	)		$	1,309,738
Balance			13,425,342			$	1,342			$	16,310,868			$	(15,002,472	)			1,309,738
Common stock issued for cash, net of issuance costs			73,334				7				54,993				-				55,000
Restricted stock issued for services			-				-				5,691				-				5,691
Stock-based compensation			-				-				2,809				-				2,809
Net loss			-				-				-				(746,207	)			(746,207	)
Balance, March 31, 2024			13,498,676			$	1,349			$	16,374,361			$	(15,748,679	)		$	627,031
Balance			13,498,676				1,349				16,374,361				(15,748,679	)			627,031

 

See accompanying notes to financial statements.

 

 

NANO MAGIC INC.

STATEMENTS OF CASH FLOWS

(unaudited)

 

		2024				2023
		For the Three Months Ended March 31,
		2024				2023
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss		$	(746,207	)		$	(653,037	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Change in inventory obsolescence reserve			57,055				4,717
Depreciation and amortization expense			26,877				28,301
Bad debt expense			49,854				5,645
Restricted stock issued for services			5,691				-
Stock-based compensation			2,809				96,144
Income from investment in subsidiary			(10,123	)			(32,156	)
Change in operating assets and liabilities:
Accounts receivable			16,254				(6,475	)
Inventory			12,718				59,576
Prepaid expenses and contract assets			13,955				44,987
Accounts payable			(24,636	)			15,870
Accounts payable - related party			35,030				47,998
Operating lease liabilities			11,133				12,961
Accrued expenses			73,547				72,445
Total adjustments			270,164				350,013
NET CASH USED BY OPERATING ACTIVITIES			(476,043	)			(303,024	)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from note receivable			100,000				20,000
Purchases of property and equipment			(12,344	)			(2,829	)
NET CASH PROVIDED BY INVESTING ACTIVITIES			87,656				17,171
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from sale of common stock and warrants			55,000				95,000
Repayment of bank loans			-				(1,628	)
Repayment of finance leases			(4,942	)			(10,956	)
NET CASH PROVIDED BY FINANCING ACTIVITIES			50,058				82,416
NET DECREASE IN CASH			(338,329	)			(203,437	)
CASH, beginning of period			527,462				259,223
CASH, end of period		$	189,133			$	55,786
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the period for interest		$	12,437			$	1,469
SUPPLEMENTAL DISCLOSURE OF NON-CASH OPERATING AND INVESTING ACTIVITIES
Reduction of note receivable from subsidiary for non-cash services		$	984			$	21,348
Reduction of rent payable through issuance of stock		$	-			$	32,948

 

See accompanying notes to financial statements.

 

 

NANO MAGIC INC.

NOTES TO FINANCIAL STATEMENTS

MARCH 31, 2024

(unaudited)

 

NOTE 1 – ORGANIZATION AND BASIS OF PRESENTATION

 

Organization

 

Nano Magic 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.

 

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 primarily to customers in the optical industry.

 

Basis of Presentation

 

The accompanying unaudited 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 financial statements of the Company as of March 31, 2024 and for the three months ended March 31, 2024 and 2023. The results of operations for the three months ended March 31, 2024 are not necessarily indicative of the operating results for the full year ending December 31, 2024 or any other period. The balance sheet at December 31, 2023 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 financial statements should be read in conjunction with the audited financial statements and related disclosures of the Company as of December 31, 2023 and for the year then ended, which were filed with the Securities and Exchange Commission on Form 10-K on April 3, 2024.

 

Going Concern

 

These unaudited 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 financial statements, the Company had losses from operations and net cash used by operations of $734,874 and $476,043 for the three months ended March 31, 2024, respectively, and negative working capital of $369,388. 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 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.

 

NOTE 2 – INVENTORY

 

At March 31, 2024 and December 31, 2023, inventory consisted of the following:

 SCHEDULE OF INVENTORY

		March 31, 2024				December 31, 2023
Raw materials		$	669,416			$	648,537
Work-in-progress			228,243				235,811
Finished goods			270,892				296,921
Inventory, gross			1,168,551				1,181,269
Less: reserve for obsolescence			(388,560	)			(331,505	)
Inventory, net		$	779,991			$	849,764

 

NOTE 3 – INVESTMENT IN SUBSIDIARY

 

The Company holds a note receivable from its subsidiary ANI. On March 15, 2024 we sold $115,000 of the ANI note for cash proceeds of $100,000, reducing the balance owed to the Company. The loss of $15,000 was recorded in Other Expense. As a result, at March 31, 2024, the note receivable had a balance of $226,782 as compared to $341,782 at December 31, 2023. $33,000 was included in current assets at March 31, 2024 with $50,000 included in current assets at December 31, 2023.

 

The Company accounts for its 30% ownership interest in ANI by the equity method of accounting under which the Company’s share of the net income (loss) of ANI is recognized as income (loss) in the Company’s statement of operations. Any dividends received from ANI as well as periodic losses for the Company’s 30% share will be treated as a reduction of the investment account. Periodic income will be treated as an increase in the investment account. At March 31, 2024 and December 31, 2023, the non-marketable investment in subsidiary was $263,959 and $253,835, included in non-current assets. For the three-month periods ended March 31, 2024 and March 31, 2023, the Company recorded income from the investment in subsidiary of $10,123 and $32,156, respectively.

 

NOTE 4 – NOTES PAYABLE AND FINANCE LEASES

 

Notes Payable

 

On January 7, 2022, the Company sold to one investor a $100,000 convertible note due March 31, 2025. On January 26, 2022, and January 31, 2022, the Company sold two $50,000 convertible notes to two different investors. The $50,000 notes are due March 31, 2025 and March 31, 2026. All three notes were issued at face value, and bear interest at 8% per annum, payable semi-annually 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.

 

F-5

 

On July 27, 2022, the Company sold two convertible notes, one for $50,000 and one for $25,000, both due on March 31, 2025. The $25,000 note is to Mr. Ron Berman, a Related Party. On August 22, 2022, the Company sold a $25,000 convertible promissory note due March 31, 2026. All three notes were issued at face value, and bear interest at 8% per annum, payable semi-annually 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 October 26, 2022, the Company sold to an investor a $25,000 convertible promissory note due October 31, 2023. Issued at face value, the note bears interest at 8% per annum, payable semi-annually in cash. The note is 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 October 18, 2023, the Company and the holder extended the maturity date of the note to October 31, 2024.

 

On December 18, 2022, the Company issued a convertible promissory note for $50,000 that is secured by certain payroll tax credits the Company is entitled to receive under the Employee Retention Tax Credit program. The note bears interest at 8% per annum, payable at maturity on June 18, 2024. The note can be converted to common stock at any time at the option of the holders at a conversion price of $1.75 per share at which point accrued interest will be paid in cash.

 

On June 14, 2023, the Company issued a convertible, secured note and warrants to purchase 10,000 shares of the Company’s common stock for $50,000 with the same terms as the one issued on December 18, 2022. The warrants were recorded as a debt discount on the date of issuance for a total value of $5,333. The balance at March 31, 2024 and December 31, 2023 of the debt discount was $2,506 and $3,390, respectively.

 

On July 24, 2023, the Company issued at face value a convertible note in the original principal amount of $50,000. The note is due on July 24, 2025, bears interest at 8% per annum and is convertible at $1.25 per share.

 

On November 2, 2023, the Company issued at face value a convertible note in the original principal amount of $50,000. The note is due on November 2, 2025, bears interest at 8% per annum and is convertible at $1.25 per share.

 

At March 31, 2024 and at December 31, 2023, we had outstanding convertible notes aggregating $525,000 in principal amount. The convertible promissory notes have not been included in diluted earnings per share as they would be anti-dilutive.

 

Finance Leases

 

In December 2020, the company entered into a finance lease for production equipment. We financed $85,000 over a period of 48 months with monthly payments of $2,135 during that time. As of December 31, 2023 the balance on the lease was $24,194, and as of March 31, 2024, the balance on the lease was $18,368, all of which was included in current liabilities.

 

F-6

 

NOTE 5 – OPERATING LEASE

 

Effective May 31, 2020, we entered into a lease with a related party for a 29,220 square foot building in Madison Heights, Michigan. The occupancy and rent commencement date was October 1, 2020. The lease has an initial term of seven years with a renewal option at the end of the initial term for an additional 3-year term, and a second renewal option thereafter for an additional 5-year term. The renewal term is not included in the calculation of the operating lease liability. As the sole tenant, we are responsible for all taxes, ordinary maintenance, snow removal and other ordinary operating expenses. Rent is $6.50 per square foot, increasing by $0.25 per year. During the first three years we had the right to buy up to a 49% interest in Magic Research LLC for a price equal to 49% of the contributions received from other members. This right has now expired as we did not exercise the option. See Note 7, Stockholders’ Equity, for a description of warrants issued to the owners of Magic Research LLC in connection with this lease. The fair value of these warrants totaling $311,718 were recorded as initial direct costs of obtaining the lease and are included in right-of-use assets on the accompanying balance sheet. See Note 6, Related Party Transactions, for information about roles in management and economic participation by our CEO and several other directors in the landlord.

 

In February 2023, we reached an agreement with the landlord of our Michigan facility to accept $66,000 worth of our common stock at a price of $1.25 per share as partial payment of rent for the six-month period from October 2022 through March 2023. During that period, we paid cash of $8,056 per month, effectively a cash rent reduction of $10,983 per month. In May 2023, we reached a further agreement with the landlord under which we pay cash each month to cover the cost of the mortgage and the lease for the lighting fixtures, but that will allow us to pay the balance of the rent by issuing shares of our stock valued at $0.75 per share. We have the option to continue to use stock to pay a portion of the rent through 2024.

 

For operating leases, we calculated ROU assets and lease liabilities based on the present value of the remaining lease payments as of the date of adoption using the IBR as of that date. The ROU Asset was $795,634 at March 31, 2024 and $845,563 at December 31, 2023. The operating lease liability was $683,623 at March 31, 2024 and $722,419 at December 31, 2023.

 

NOTE 6 – RELATED PARTY TRANSACTIONS

 

For the three-month period ended March 31, 2024 and the three-months ended March 31, 2023, we accrued $6,000 in fees for each of the directors, totaling $36,000 for the period ended March 31, 2024 and $42,000 for the same period in 2023. For the period ended March 31, 2024 we paid $24,000 in consulting fees to director Ronald J. Berman. For the three-month period ended March 31, 2023, we accrued consulting and legal fees to him of $30,000. At March 31, 2024, the Company owed $8,000 in related parties accounts payable to this director. During the three-month period ended March 31, 2024, we paid director and our President and CEO, Tom Berman, salary in the amount of $56,250. For the three-month period ended March 31, 2023, we paid him $30,000 in salary, and we accrued additional salary of $30,000 for the period which was subsequently paid by the issuance of 30,000 options with an exercise price of $0.65. At March 31 2024 the Company had $8,759 in payroll expenses payable to Mr. Berman included in related party accounts payable, which was paid in April of 2024. Additionally, $5,000 was payable to the Company’s CFO at March 31, 2024, also included in related parties accounts payable and paid in April of 2024.

 

At March 31, 2024 and at December 31, 2023, aggregate advances from Scott & Jeanne Rickert were $42,887, which is included in advances from related parties on the balance sheet. On both those dates, accrued payroll for the Rickerts was an aggregate of $16,000, which is included in related parties accounts payable on the balance sheet.

 

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, LLP, Magic Growth 2 LLC and Magic Growth 3 LLC. These five limited liability companies purchased shares of common stock and warrants from us in 2018, 2019, 2020, 2021 and 2022.

 

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% interest in the Michigan landlord and he is a co-guarantor on the debt of that limited liability company. See Note 6, Stockholder’s Equity regarding the issuance of stock in partial satisfaction of unpaid rent. Rent in the amount of $52,791 and $30,141 was accrued and unpaid at March 31, 2024 and December 31, 2023, respectively, which is included in related parties accounts payable on the balance sheet.

 

NOTE 7 – 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

 

Common Stock Issued for Services

 

In February 2023, we reached an agreement with the landlord of our Michigan facility to accept 52,800 shares of our common stock at a price of $1.25 per share as partial payment of rent for the six-month period from October 2022 through March 2023. Those shares were issued in March 2023. The landlord is a Related Party.

 

F-7

 

Sales of Common Stock

 

During the quarter ended March 31, 2023, the Company sold 74,806 shares of common stock for proceeds of $93,507 and 74,626 warrants for proceeds of $1,492. The warrants are exercisable at any time during the four years after date of issue at a warrant exercise price of $2.25.

 

During the quarter ended March 31, 2024, the Company sold 73,334 shares of common stock for proceeds of $55,000.

 

Stock Options

 

No options were granted or exercised during the period ended March 31, 2024. 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 Remaining Contractual Term (Years)				Aggregate Intrinsic Value
Outstanding December 31, 2023			2,270,483			$	0.67				2.72			$	76,725
Exercised			-				-
Forfeited or expired			(55,297	)		$	0.65				-				-
Granted			-				-				-				-
Balance Outstanding, March 31, 2024			2,215,186			$	0.67				2.54			$	19,332
Exercisable March 31, 2024			2,199,122			$	0.67				2.54			$	19,332

 

 

 SCHEDULE OF ANTIDILUTIVE SECURITIES EXCLUDED FROM COMPUTATION OF EARNINGS SHARE

		March 31, 2024				December 31, 2023
Stock options			2,215,186				2,270,483
Stock warrants			7,525,265				7,525,265
Total			9,740,451				9,795,748

 

Warrants

 

As of March 31, 2024, there were outstanding and exercisable warrants to purchase 7,525,265 shares of common stock. The outstanding warrants have a weighted average exercise price of $1.72 per share and a weighted average remaining contractual term of 37.7 months. As of March 31, 2024 and December 31, 2023, there was no intrinsic value for the warrants. No warrants have been included in diluted earnings per share as they would be anti-dilutive.

 

F-8

 

2021 Equity Incentive Plan

 

On March 2, 2021, our Board adopted the 2021 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. On June 21, 2021 an additional 200,000 shares were made available for issuance under the Plan and options for 100,000 shares were granted, but subsequently forfeited. In February 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. In August 2022, we granted 15,000 options with an exercise price of $0.80 and weighted average fair value on the grant date of $0.60.

 

On April 12, 2023, the Company granted 47,610 options under the 2021 Equity Plan. The options were granted to individuals in lieu of cash for a portion of their salary for the period from December 31, 2022 through March 31, 2023. All options are at an exercise price of $0.65 per share for a four-year term and were fully vested on date of grant. On May 30, 2023, the Company granted 175,071 options under the 2021 Equity Plan. The options were granted to employees and consultants at an exercise price of $0.65 per share.

 

No options were granted in the three-month period ending on March 31, 2024 or the three-month period ending on March 31, 2023.

 

NOTE 8 – 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. As of March 31, 2024, we were not 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, 2024, the Company has not accrued any amount for litigation contingencies.

 

NOTE 9 – SUBSEQUENT EVENTS

 

On April 17, 2024, the Company sold 33,333 shares of common stock for proceeds of $25,000. On April 24, 2024, the Company sold 33,333 shares of common stock to another investor for proceeds of $25,000.

 

On April 25, 2024, the Company sold another portion of the note receivable from ANI, reducing the balance owed to the Company by another $56,444.30 in exchange for aggregate proceeds of $50,000.

 

 

ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

The following is management’s discussion and analysis of certain significant factors that have affected our financial position and operating results during the periods included in the accompanying unaudited financial statements.

 

OVERVIEW

 

Nano Magic develops, commercializes and markets nanotechnology powered consumer and industrial cleaners and coatings to clean, protect, and enhance products for peak performance. Consumer products include lens and screen cleaners and coatings, anti-fog solutions, and household and automobile cleaners and protective coatings sold direct-to-consumer and in big box retail. Nano Magic also sells branded and private label cleaners and coatings into the optical, safety, and industrial channels. Our focus is to expand our direct-to-consumer sales through e-commerce and to grow sales to big box retailers. We continue to sell our consumer products directly to opticians and ophthalmologists and small optical retailers.

 

RESULTS OF OPERATIONS

 

The following comparative analysis on results of operations was based primarily on the comparative financial statements, footnotes and related information for the periods identified below and should be read in conjunction with the unaudited financial statements and the notes to those statements that are included elsewhere in this report. The results discussed below are for the three months ended March 31, 2024 and 2023.

 

Comparison of Results of Operations for the three months ended March 31, 2024 and 2023

 

Revenues:

 

For the three months ended March 31, 2024 and 2023, revenues from operations were $580,112 and $697,029, respectively. For the three months ended March 31, 2024, revenue decreased by $116,917 or 17% as compared to the three months ended March 31, 2023. The decrease for the three-month period was due primarily to delays in programs and product roll-outs with customers.

 

Cost of sales

 

Cost of sales includes inventory costs, materials and supplies costs, internal labor and related benefits, subcontractor costs, depreciation, and overhead and shipping and handling costs incurred. For the three months ended March 31, 2024 and 2023, cost of sales was $511,369 and $622,279, respectively. For the three months ended March 31, 2024, cost of sales decreased by $110,910 or 18% as compared to the three months ended March 31, 2023. The decrease for the period was due primarily to lower sales volume.

 

Gross profit and gross margin

 

For the three months ended March 31, 2024, gross profit was $68,473 as compared to $74,750 for the prior year, a change of $6,007 or 8%. For the three months ended March 31, 2024, gross margin was 11.8% as compared to 10.7% in the prior year. The improvement in gross margin is largely due to changes in customer and product mix.

 

Operating expenses

 

For the three months ended March 31, 2024, operating expenses increased by $51,104 or 7% compared to the three months ended March 31, 2023. For the three months ended March 31, 2024 and 2023, operating expenses consisted of the following:

 

		Three Months Ended March 31,
		2024				2023
Selling and marketing expenses		$	82,726			$	59,424
Salaries, wages and related benefits			202,549				278,576
Stock compensation expense			8,500				30,144
Research and development			20,295				5,904
Professional fees			218,119				189,459
General and administrative expenses			271,428				189,006
Total		$	803,617			$	752,513

 

	●	For the three months ended March 31, 2024, selling and marketing expenses increased by $23,302 or 39% as compared to the three months ended March 31, 2023, due to additional trade show expenses in 2024.
	●	For the three months ended March 31, 2024, salaries, wages and related benefits decreased by $76,027 or 27%, as compared to the three months ended March 31, 2023. These decreases were due to a general reduction in workforce as part of the company’s continuing effort to manage costs and to reach profitability.

 

 

●

For the three months ended March 31, 2024, stock compensation expense decreased by $21,644 or 72%, as compared to the three months ended March 31, 2023. The decrease was due, primarily, to vesting of certain outstanding options that was completed in 2023.

 

	●	For the three months ended March 31, 2024, research and development costs increased by $14,391 or 244%, as compared to the three months ended March 31, 2023. The increase was due primarily to increased consultant expense.
	●	For the three months ended March 31, 2024, professional fees increased by $28,660 or 15%, as compared to the three months ended March 31, 2023. This change reflects primarily consulting cost increases associated with outsourcing after workforce reductions.
	●	For the three months ended March 31, 2024, general and administrative expenses increased by $82,422 or 44% as compared to the three months ended March 31, 2023. Costs increases were primarily due to increases in bad debt reserve due to aging of accounts receivable, increased travel expense for conferences and increased software expense.

 

Loss from operations

 

As a result of the factors described above, for the three months ended March 31, 2024, loss from operations amounted to $734,874 as compared to a loss of $677,763 for the three months ended March 31, 2023, a change of $57,111 or 8%.

 

Income from investment in subsidiary

 

As a result of the sale of a 70% interest in ANI on May 31, 2022, we now report our 30% share of ANI’s income or loss as an investment in a subsidiary. For the three months ended March 31, 2024, that was income of $10,123 as compared to income of $32,156 in the three months ended March 31, 2023.

 

Interest expense

 

For the three months ended March 31, 2024, interest expense was $12,437 as compared to $14,368 in the prior year. The decrease was due to maturing of financing leases in 2023.

 

Interest income

 

For the three months ended March 31, 2024, interest income was $5,981 as compared to $6,938 for the three months ended March 31, 2023. The decrease was due to a sale of a portion of the note from ANI.

 

Loss on sale of note receivable

 

For the three months ended March 31, 2024, a loss on the sale of the note receivable from ANI was $15,000.

 

Net loss

 

As a result of the foregoing, we reported a net loss of $746,207 for the three-month period ended March 31, 2024 and a loss of $653,037 for the three-month period in the prior year, a change of $93,170 or 14%.

 

LIQUIDITY AND CAPITAL RESOURCES

 

Liquidity is the ability of an enterprise to generate adequate amounts of cash to meet its needs for cash requirements. We had working capital of $(369,388) and $189,133 of unrestricted cash as of March 31, 2024 and working capital of $454,969, including $527,462 of cash as of December 31, 2023.

 

The following table sets forth a summary of changes in our working capital from December 31, 2023 to March 31, 2024:

 

										December 31, 2023 to March 31, 2024
		March 31, 2024				December 31, 2023				Change in Working Capital				Percentage Change
Working capital:
Total current assets		$	1,194,656			$	1,699,821			$	(505,165	)			(29.72	)%
Total current liabilities			1,564,044				1,244,852				319,192				25.64	%
Working capital:		$	(369,388	)		$	454,969			$	(824,357	)			(181.19	)%

 

 

The decrease in current assets is primarily attributable to a decrease in cash, as well as decreases in inventory, accounts receivable and a smaller current portion on the note receivable from ANI. Additionally, the increase in reserves for inventory and accounts receivable also contributed to the decrease in current assets.

 

Net cash used by operating activities was $(476,043) for the three months ended March 31, 2024 as compared to net cash used by operating activities of $(303,024) for the three months ended March 31, 2023, a net change of $(173,019) or 57%. Net cash used by operating activities for the three months ended March 31, 2024 primarily resulted from net loss from operations of $(746,207) adjusted for add-backs of $132,163 and changes in operating assets and liabilities of $138,001.

 

Net cash provided by investing activities was $87,656 for the three months ended March 31, 2024, as compared to $17,171 for the same period in 2023, primarily due to proceeds from the note receivable in March of 2024.

 

Net cash provided by financing activities was $50,058 for the three months ended March 31, 2024 reflecting $55,000 in proceeds from sales of common stock, as compared to net cash provided by financing activities of $82,416 for the same period in 2023, reflecting $95,000 in proceeds from sales of common stock and warrants.

 

Future Liquidity and Capital Needs.

 

The factors above raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that these unaudited 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.

 

Our principal future uses of cash are for working capital requirements, including working capital to pay down accounts payable, and support increased product sales, and sales and marketing expenses. Application of funds among these uses will depend on numerous factors including our sales and other revenues and our ability to control costs.

 

Equipment Financing and Loans

 

See note 4 to our unaudited financial statements regarding our equipment loan and financing leases.

 

Off-Balance Sheet Arrangements

 

We have not entered into any other financial guarantees or other commitments to guarantee the payment obligations of any third parties. We have not entered into any derivative contracts that are indexed to our shares and classified as shareholder’s equity or that are not reflected in our unaudited financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or research and development services with us.

 

ITEM 3. Quantitative and Qualitative disclosures about market risk

 

Not applicable to smaller reporting companies.

 

ITEM 4. Controls and Procedures

 

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as of the end of the period covered by this report (the “Evaluation Date”). Based upon this evaluation, our principal executive officer and principal financial officer concluded that we do not have sufficient resources in our accounting function to have segregation of duties so that the initiation of transactions, the custody of assets and the recording of transactions are performed by separate individuals. However, to the extent possible, these tasks are performed by separate individuals. Management evaluated our failure to have segregation of duties on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented a material weakness.

 

 

Our management, including our principal executive officer and principal financial officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected.

 

Changes in Internal Control

 

There were no changes identified in connection with our internal control over financial reporting during the three months ended March 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

PART II. OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

 

None

 

ITEM 1A. RISK FACTORS

 

Not required of smaller reporting companies.

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

On April 17, 2024, the Company sold 33,333 shares of common stock for proceeds of $25,000. On April 24, 2024, the Company sold 33,333 shares of common stock to another investor for proceeds of $25,000.

 

The sales and issuances of stock and other securities were exempt from registration under Section 4(2) of the Securities Act. Cash proceeds were used for general corporate purposes.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

None.

 

ITEM 4. MINE SAFETY DISCLOSURES

 

Not applicable.

 

ITEM 5. OTHER INFORMATION

 

None.

 

ITEM 6. EXHIBITS

 

Exhibit No.		Description
31.1*		Rule 13a-14(a)/15d-14(a) Certificate of Principal Executive Officer
31.2*		Rule 13a-14(a)/15d-14(a) Certificate of Chief Financial Officer
32.1*		Section 1350 Certificate of Principal Executive Officer and Chief Financial Officer
101.INS		Inline XBRL Instance Document
101.SCH		Inline XBRL Taxonomy Extension Schema
101.CAL		Inline XBRL Taxonomy Extension Calculation
101.DEF		Inline XBRL Taxonomy Extension Definition
101.LAB		Inline XBRL Taxonomy Extension Labels
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)
*		Filed herewith.

 

 

SIGNATURES

 

Pursuant to the requirements 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.

 

	Nano Magic Inc.
	(Registrant)
Date: May 21, 2024	/s/ Tom J. Berman
	Tom J. Berman,
	President and Chief Executive Officer
Date: May 21, 2024	/s/ Leandro Vera
	Leandro Vera
	Chief Financial Officer

 

 

 

Exhibit 31.1

 

Certificate of Principal Executive Officer

Pursuant to Rule 13a-14(a)/15d-14(a)

 

I, Tom J. Berman, certify that:

 

1. I have reviewed this quarterly report on Form 10-Q for the quarterly period ended March 31, 2024 of Nano Magic Inc. (the “registrant”);

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present, in all material respects, the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.

 

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in the Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting) as defined in the Exchange Act Rules 13a - 15(f) and 15d - 15(f)) for the registrant and have:

 

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

 

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: May 21, 2024	/s/ Tom J. Berman
	Tom J. Berman President and Chief Executive Officer

 

 

 

Exhibit 31.2

 

Certificate of Principal Financial Officer

Pursuant to Rule 13a-14(a)/15d-14(a)

 

I, Leandro Vera, certify that:

 

1. I have reviewed this quarterly report on Form 10-Q for the quarterly period ended March 31, 2024 of Nano Magic Inc. (the “registrant”);

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present, in all material respects, the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.

 

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in the Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting) as defined in the Exchange Act Rules 13a - 15(f) and 15d - 15(f)) for the registrant and have:

 

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

 

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: May 21, 2024	/s/ Leandro Vera
	Leandro Vera
	Chief Financial Officer

 

 

 

Exhibit 32.1

 

Section 1350 Certification of Principal Executive Officer

 

In connection with the quarterly report of Nano Magic Inc. (the “Company”) on Form 10-Q for the quarterly period ended March 31, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Tom J. Berman, President of the Company, and I, Leandro Vera, Chief Financial Officer, certify to the best of our knowledge:

 

1. The Report fully complies with the requirements of Section 13 (a) or 15 (d) of the Securities Exchange Act of 1934; and

 

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Date: May 21, 2024	/s/ Tom J. Berman
	Tom J. Berman
	President and Chief Executive Officer
Date: May 21, 2024	/s/ Leandro Vera
	Leandro Vera
	Chief Financial Officer

 

 

v3.24.1.1.u2

Cover - shares	3 Months Ended
	Mar. 31, 2024	May 21, 2024
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Mar. 31, 2024
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2024
Current Fiscal Year End Date	--12-31
Entity File Number	1-11602
Entity Registrant Name	NANO MAGIC 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	Yes
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		13,565,342

v3.24.1.1.u2

Statements of Income (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Income Statement [Abstract]
NET REVENUES	$ 580,112	$ 697,029
COST OF SALES	511,369	622,279
GROSS PROFIT	68,743	74,750
OPERATING EXPENSES:
Selling and marketing expenses	82,726	59,424
Salaries, wages and related benefits	202,549	278,576
Stock compensation expense	8,500	30,144
Research and development	20,295	5,904
Professional fees	218,119	189,459
General and administrative expenses	271,428	189,006
Total Operating Expense	803,617	752,513
LOSS FROM OPERATIONS	(734,874)	(677,763)
OTHER (EXPENSE) INCOME
Income from investment in subsidiary	10,123	32,156
Loss from sale of note receivable	(15,000)
Interest expense	(12,437)	(14,368)
Interest income	5,981	6,938
Total Other (Expense) Income	(11,333)	24,726
NET LOSS	$ (746,207)	$ (653,037)
NET LOSS PER COMMON SHARE
Basic	$ (0.06)	$ (0.06)
Diluted	$ (0.06)	$ (0.06)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic	13,439,713	10,738,962
Diluted	13,439,713	10,738,962

v3.24.1.1.u2

Balance Sheets (Unaudited) - USD ($)	Mar. 31, 2024	Dec. 31, 2023
CURRENT ASSETS:
Cash	$ 189,133	$ 527,462
Accounts receivable, net of allowance for credit losses of $189,734 and $150,300 at March 31, 2024 and December 31, 2023, respectively	142,949	209,057
Inventory, net	779,991	849,764
Prepaid expenses	49,583	63,538
Current portion of related party note receivable	33,000	50,000
Total Current Assets	1,194,656	1,699,821
Operating lease right-of-use assets, net	795,634	845,563
Property, plant and equipment, net	409,572	424,103
Related party note receivable, non-current	193,782	291,782
Non-marketable equity investment in subsidiary	263,959	253,835
Total Assets	2,857,603	3,515,104
CURRENT LIABILITIES:
Accrued expenses and other current liabilities	318,945	245,398
Current portion of finance leases	18,368	24,194
Advances from related parties	42,887	42,887
Current portion of operating lease liabilities	167,095	161,905
Total Current Liabilities	1,564,044	1,244,852
Operating lease liabilities, net of current portion	516,528	560,514
Total Liabilities	2,230,572	2,205,366
Commitments and Contingencies (See Note 8)
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; 13,498,676 and 13,425,342 issued and outstanding at March 31, 2024 and December 31, 2023, respectively	1,349	1,342
Additional paid-in capital	16,374,361	16,310,868
Accumulated deficit	(15,748,679)	(15,002,472)
Total Stockholders’ Equity	627,031	1,309,738
Total Liabilities and Stockholders’ Equity	2,857,603	3,515,104
Nonrelated Party [Member]
CURRENT LIABILITIES:
Accounts payable	553,705	593,338
Current portion of notes payable	347,494	121,610
Notes Payable - net of current portion	150,000	375,000
Related Party [Member]
CURRENT LIABILITIES:
Accounts payable	90,550	55,520
Current portion of notes payable	25,000
Notes Payable - net of current portion		$ 25,000

v3.24.1.1.u2

Balance Sheets (Unaudited) (Parenthetical) - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Statement of Financial Position [Abstract]
Net of allowance for credit losses	$ 189,734	$ 150,300
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	13,498,676	13,425,342
Common stock, shares outstanding	13,498,676	13,425,342

v3.24.1.1.u2

Statements of Changes in Stockholders' Equity (Unaudited) - USD ($)	Common Stock [Member] Common Class A [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Total
Balance at Dec. 31, 2022	$ 1,072	$ 13,763,143	$ (12,146,753)	$ 1,617,462
Balance, shares at Dec. 31, 2022	10,722,431
Common stock issued for cash, net of issuance costs	$ 7	93,500		93,507
Common stock issued for cash, net of issuance costs, shares	74,806
Stock-based compensation		30,144		30,144
Stock issued for services	$ 5	65,955		65,960
Stock issued for services, shares	52,800
Warrants and options on private placement		1,492		1,492
Net loss			(653,037)	(653,037)
Balance at Mar. 31, 2023	$ 1,084	13,954,234	(12,799,790)	1,155,528
Balance, shares at Mar. 31, 2023	10,850,037
Balance at Dec. 31, 2023	$ 1,342	16,310,868	(15,002,472)	1,309,738
Balance, shares at Dec. 31, 2023	13,425,342
Common stock issued for cash, net of issuance costs	$ 7	54,993		55,000
Common stock issued for cash, net of issuance costs, shares	73,334
Stock-based compensation		2,809		2,809
Net loss			$ (746,207)	$ (746,207)
Restricted stock issued for services		5,691		5,691
Balance at Mar. 31, 2024	$ 1,349	$ 16,374,361	$ (15,748,679)	$ 627,031
Balance, shares at Mar. 31, 2024	13,498,676

v3.24.1.1.u2

Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$ (746,207)	$ (653,037)
Adjustments to reconcile net loss to net cash provided by operating activities:
Change in inventory obsolescence reserve	57,055	4,717
Depreciation and amortization expense	26,877	28,301
Bad debt expense	49,854	5,645
Restricted stock issued for services	5,691
Stock-based compensation	2,809	96,144
Income from investment in subsidiary	(10,123)	(32,156)
Change in operating assets and liabilities:
Accounts receivable	16,254	(6,475)
Inventory	12,718	59,576
Prepaid expenses and contract assets	13,955	44,987
Accounts payable	(24,636)	15,870
Accounts payable - related party	35,030	47,998
Operating lease liabilities	11,133	12,961
Accrued expenses	73,547	72,445
Total adjustments	270,164	350,013
NET CASH USED BY OPERATING ACTIVITIES	(476,043)	(303,024)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from note receivable	100,000	20,000
Purchases of property and equipment	(12,344)	(2,829)
NET CASH PROVIDED BY INVESTING ACTIVITIES	87,656	17,171
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from sale of common stock and warrants	55,000	95,000
Repayment of bank loans		(1,628)
Repayment of finance leases	(4,942)	(10,956)
NET CASH PROVIDED BY FINANCING ACTIVITIES	50,058	82,416
NET DECREASE IN CASH	(338,329)	(203,437)
CASH, beginning of period	527,462	259,223
CASH, end of period	189,133	55,786
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the period for interest	12,437	1,469
SUPPLEMENTAL DISCLOSURE OF NON-CASH OPERATING AND INVESTING ACTIVITIES
Reduction of note receivable from subsidiary for non-cash services	984	21,348
Reduction of rent payable through issuance of stock		$ 32,948

v3.24.1.1.u2

ORGANIZATION AND BASIS OF PRESENTATION	3 Months Ended
	Mar. 31, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]
ORGANIZATION AND BASIS OF PRESENTATION	NOTE 1 – ORGANIZATION AND BASIS OF PRESENTATION   Organization   Nano Magic 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.   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 primarily to customers in the optical industry.   Basis of Presentation   The accompanying unaudited 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 financial statements of the Company as of March 31, 2024 and for the three months ended March 31, 2024 and 2023. The results of operations for the three months ended March 31, 2024 are not necessarily indicative of the operating results for the full year ending December 31, 2024 or any other period. The balance sheet at December 31, 2023 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 financial statements should be read in conjunction with the audited financial statements and related disclosures of the Company as of December 31, 2023 and for the year then ended, which were filed with the Securities and Exchange Commission on Form 10-K on April 3, 2024.   Going Concern   These unaudited 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 financial statements, the Company had losses from operations and net cash used by operations of $734,874 and $476,043 for the three months ended March 31, 2024, respectively, and negative working capital of $369,388. 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 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.

v3.24.1.1.u2

INVENTORY	3 Months Ended
	Mar. 31, 2024
Inventory Disclosure [Abstract]
INVENTORY	NOTE 2 – INVENTORY   At March 31, 2024 and December 31, 2023, inventory consisted of the following:  SCHEDULE OF INVENTORY     March 31, 2024     December 31, 2023   Raw materials   $ 669,416     $ 648,537   Work-in-progress     228,243       235,811   Finished goods     270,892       296,921   Inventory, gross     1,168,551       1,181,269   Less: reserve for obsolescence     (388,560 )     (331,505 ) Inventory, net   $ 779,991     $ 849,764

v3.24.1.1.u2

INVESTMENT IN SUBSIDIARY	3 Months Ended
	Mar. 31, 2024
Investments, All Other Investments [Abstract]
INVESTMENT IN SUBSIDIARY	NOTE 3 – INVESTMENT IN SUBSIDIARY   The Company holds a note receivable from its subsidiary ANI. On March 15, 2024 we sold $115,000 of the ANI note for cash proceeds of $100,000, reducing the balance owed to the Company. The loss of $15,000 was recorded in Other Expense. As a result, at March 31, 2024, the note receivable had a balance of $226,782 as compared to $341,782 at December 31, 2023. $33,000 was included in current assets at March 31, 2024 with $50,000 included in current assets at December 31, 2023.   The Company accounts for its 30% ownership interest in ANI by the equity method of accounting under which the Company’s share of the net income (loss) of ANI is recognized as income (loss) in the Company’s statement of operations. Any dividends received from ANI as well as periodic losses for the Company’s 30% share will be treated as a reduction of the investment account. Periodic income will be treated as an increase in the investment account. At March 31, 2024 and December 31, 2023, the non-marketable investment in subsidiary was $263,959 and $253,835, included in non-current assets. For the three-month periods ended March 31, 2024 and March 31, 2023, the Company recorded income from the investment in subsidiary of $10,123 and $32,156, respectively.

v3.24.1.1.u2

NOTES PAYABLE AND FINANCE LEASES	3 Months Ended
	Mar. 31, 2024
Notes Payable And Finance Leases
NOTES PAYABLE AND FINANCE LEASES	NOTE 4 – NOTES PAYABLE AND FINANCE LEASES   Notes Payable   On January 7, 2022, the Company sold to one investor a $100,000 convertible note due March 31, 2025. On January 26, 2022, and January 31, 2022, the Company sold two $50,000 convertible notes to two different investors. The $50,000 notes are due March 31, 2025 and March 31, 2026. All three notes were issued at face value, and bear interest at 8% per annum, payable semi-annually 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 July 27, 2022, the Company sold two convertible notes, one for $50,000 and one for $25,000, both due on March 31, 2025. The $25,000 note is to Mr. Ron Berman, a Related Party. On August 22, 2022, the Company sold a $25,000 convertible promissory note due March 31, 2026. All three notes were issued at face value, and bear interest at 8% per annum, payable semi-annually 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 October 26, 2022, the Company sold to an investor a $25,000 convertible promissory note due October 31, 2023. Issued at face value, the note bears interest at 8% per annum, payable semi-annually in cash. The note is 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 October 18, 2023, the Company and the holder extended the maturity date of the note to October 31, 2024.   On December 18, 2022, the Company issued a convertible promissory note for $50,000 that is secured by certain payroll tax credits the Company is entitled to receive under the Employee Retention Tax Credit program. The note bears interest at 8% per annum, payable at maturity on June 18, 2024. The note can be converted to common stock at any time at the option of the holders at a conversion price of $1.75 per share at which point accrued interest will be paid in cash.   On June 14, 2023, the Company issued a convertible, secured note and warrants to purchase 10,000 shares of the Company’s common stock for $50,000 with the same terms as the one issued on December 18, 2022. The warrants were recorded as a debt discount on the date of issuance for a total value of $5,333. The balance at March 31, 2024 and December 31, 2023 of the debt discount was $2,506 and $3,390, respectively.   On July 24, 2023, the Company issued at face value a convertible note in the original principal amount of $50,000. The note is due on July 24, 2025, bears interest at 8% per annum and is convertible at $1.25 per share.   On November 2, 2023, the Company issued at face value a convertible note in the original principal amount of $50,000. The note is due on November 2, 2025, bears interest at 8% per annum and is convertible at $1.25 per share.   At March 31, 2024 and at December 31, 2023, we had outstanding convertible notes aggregating $525,000 in principal amount. The convertible promissory notes have not been included in diluted earnings per share as they would be anti-dilutive.   Finance Leases   In December 2020, the company entered into a finance lease for production equipment. We financed $85,000 over a period of 48 months with monthly payments of $2,135 during that time. As of December 31, 2023 the balance on the lease was $24,194, and as of March 31, 2024, the balance on the lease was $18,368, all of which was included in current liabilities.

v3.24.1.1.u2

OPERATING LEASE	3 Months Ended
	Mar. 31, 2024
Operating Lease
OPERATING LEASE	NOTE 5 – OPERATING LEASE   Effective May 31, 2020, we entered into a lease with a related party for a 29,220 square foot building in Madison Heights, Michigan. The occupancy and rent commencement date was October 1, 2020. The lease has an initial term of seven years with a renewal option at the end of the initial term for an additional 3-year term, and a second renewal option thereafter for an additional 5-year term. The renewal term is not included in the calculation of the operating lease liability. As the sole tenant, we are responsible for all taxes, ordinary maintenance, snow removal and other ordinary operating expenses. Rent is $6.50 per square foot, increasing by $0.25 per year. During the first three years we had the right to buy up to a 49% interest in Magic Research LLC for a price equal to 49% of the contributions received from other members. This right has now expired as we did not exercise the option. See Note 7, Stockholders’ Equity, for a description of warrants issued to the owners of Magic Research LLC in connection with this lease. The fair value of these warrants totaling $311,718 were recorded as initial direct costs of obtaining the lease and are included in right-of-use assets on the accompanying balance sheet. See Note 6, Related Party Transactions, for information about roles in management and economic participation by our CEO and several other directors in the landlord.   In February 2023, we reached an agreement with the landlord of our Michigan facility to accept $66,000 worth of our common stock at a price of $1.25 per share as partial payment of rent for the six-month period from October 2022 through March 2023. During that period, we paid cash of $8,056 per month, effectively a cash rent reduction of $10,983 per month. In May 2023, we reached a further agreement with the landlord under which we pay cash each month to cover the cost of the mortgage and the lease for the lighting fixtures, but that will allow us to pay the balance of the rent by issuing shares of our stock valued at $0.75 per share. We have the option to continue to use stock to pay a portion of the rent through 2024.   For operating leases, we calculated ROU assets and lease liabilities based on the present value of the remaining lease payments as of the date of adoption using the IBR as of that date. The ROU Asset was $795,634 at March 31, 2024 and $845,563 at December 31, 2023. The operating lease liability was $683,623 at March 31, 2024 and $722,419 at December 31, 2023.

v3.24.1.1.u2

RELATED PARTY TRANSACTIONS	3 Months Ended
	Mar. 31, 2024
Related Party Transactions [Abstract]
RELATED PARTY TRANSACTIONS	NOTE 6 – RELATED PARTY TRANSACTIONS   For the three-month period ended March 31, 2024 and the three-months ended March 31, 2023, we accrued $6,000 in fees for each of the directors, totaling $36,000 for the period ended March 31, 2024 and $42,000 for the same period in 2023. For the period ended March 31, 2024 we paid $24,000 in consulting fees to director Ronald J. Berman. For the three-month period ended March 31, 2023, we accrued consulting and legal fees to him of $30,000. At March 31, 2024, the Company owed $8,000 in related parties accounts payable to this director. During the three-month period ended March 31, 2024, we paid director and our President and CEO, Tom Berman, salary in the amount of $56,250. For the three-month period ended March 31, 2023, we paid him $30,000 in salary, and we accrued additional salary of $30,000 for the period which was subsequently paid by the issuance of 30,000 options with an exercise price of $0.65. At March 31 2024 the Company had $8,759 in payroll expenses payable to Mr. Berman included in related party accounts payable, which was paid in April of 2024. Additionally, $5,000 was payable to the Company’s CFO at March 31, 2024, also included in related parties accounts payable and paid in April of 2024.   At March 31, 2024 and at December 31, 2023, aggregate advances from Scott & Jeanne Rickert were $42,887, which is included in advances from related parties on the balance sheet. On both those dates, accrued payroll for the Rickerts was an aggregate of $16,000, which is included in related parties accounts payable on the balance sheet.   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, LLP, Magic Growth 2 LLC and Magic Growth 3 LLC. These five limited liability companies purchased shares of common stock and warrants from us in 2018, 2019, 2020, 2021 and 2022.   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% interest in the Michigan landlord and he is a co-guarantor on the debt of that limited liability company. See Note 6, Stockholder’s Equity regarding the issuance of stock in partial satisfaction of unpaid rent. Rent in the amount of $52,791 and $30,141 was accrued and unpaid at March 31, 2024 and December 31, 2023, respectively, which is included in related parties accounts payable on the balance sheet.

v3.24.1.1.u2

STOCKHOLDERS’ EQUITY	3 Months Ended
	Mar. 31, 2024
Equity [Abstract]
STOCKHOLDERS’ EQUITY	NOTE 7 – 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   Common Stock Issued for Services   In February 2023, we reached an agreement with the landlord of our Michigan facility to accept 52,800 shares of our common stock at a price of $1.25 per share as partial payment of rent for the six-month period from October 2022 through March 2023. Those shares were issued in March 2023. The landlord is a Related Party.     Sales of Common Stock   During the quarter ended March 31, 2023, the Company sold 74,806 shares of common stock for proceeds of $93,507 and 74,626 warrants for proceeds of $1,492. The warrants are exercisable at any time during the four years after date of issue at a warrant exercise price of $2.25.   During the quarter ended March 31, 2024, the Company sold 73,334 shares of common stock for proceeds of $55,000.   Stock Options   No options were granted or exercised during the period ended March 31, 2024. 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 Remaining Contractual Term (Years)     Aggregate Intrinsic Value   Outstanding December 31, 2023     2,270,483     $ 0.67       2.72     $ 76,725   Exercised     -       -                   Forfeited or expired     (55,297 )   $ 0.65       -       -   Granted     -       -       -       -   Balance Outstanding, March 31, 2024     2,215,186     $ 0.67       2.54     $ 19,332                                     Exercisable March 31, 2024     2,199,122     $ 0.67       2.54     $ 19,332        SCHEDULE OF ANTIDILUTIVE SECURITIES EXCLUDED FROM COMPUTATION OF EARNINGS SHARE     March 31, 2024     December 31, 2023   Stock options     2,215,186       2,270,483   Stock warrants     7,525,265       7,525,265   Total     9,740,451       9,795,748     Warrants   As of March 31, 2024, there were outstanding and exercisable warrants to purchase 7,525,265 shares of common stock. The outstanding warrants have a weighted average exercise price of $1.72 per share and a weighted average remaining contractual term of 37.7 months. As of March 31, 2024 and December 31, 2023, there was no intrinsic value for the warrants. No warrants have been included in diluted earnings per share as they would be anti-dilutive.     2021 Equity Incentive Plan   On March 2, 2021, our Board adopted the 2021 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. On June 21, 2021 an additional 200,000 shares were made available for issuance under the Plan and options for 100,000 shares were granted, but subsequently forfeited. In February 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. In August 2022, we granted 15,000 options with an exercise price of $0.80 and weighted average fair value on the grant date of $0.60.   On April 12, 2023, the Company granted 47,610 options under the 2021 Equity Plan. The options were granted to individuals in lieu of cash for a portion of their salary for the period from December 31, 2022 through March 31, 2023. All options are at an exercise price of $0.65 per share for a four-year term and were fully vested on date of grant. On May 30, 2023, the Company granted 175,071 options under the 2021 Equity Plan. The options were granted to employees and consultants at an exercise price of $0.65 per share.   No options were granted in the three-month period ending on March 31, 2024 or the three-month period ending on March 31, 2023.

v3.24.1.1.u2

COMMITMENTS AND CONTINGENCIES	3 Months Ended
	Mar. 31, 2024
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	NOTE 8 – 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. As of March 31, 2024, we were not 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, 2024, the Company has not accrued any amount for litigation contingencies.

v3.24.1.1.u2

SUBSEQUENT EVENTS	3 Months Ended
	Mar. 31, 2024
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	NOTE 9 – SUBSEQUENT EVENTS   On April 17, 2024, the Company sold 33,333 shares of common stock for proceeds of $25,000. On April 24, 2024, the Company sold 33,333 shares of common stock to another investor for proceeds of $25,000.   On April 25, 2024, the Company sold another portion of the note receivable from ANI, reducing the balance owed to the Company by another $56,444.30 in exchange for aggregate proceeds of $50,000.

v3.24.1.1.u2

INVENTORY (Tables)	3 Months Ended
	Mar. 31, 2024
Inventory Disclosure [Abstract]
SCHEDULE OF INVENTORY	At March 31, 2024 and December 31, 2023, inventory consisted of the following:  SCHEDULE OF INVENTORY     March 31, 2024     December 31, 2023   Raw materials   $ 669,416     $ 648,537   Work-in-progress     228,243       235,811   Finished goods     270,892       296,921   Inventory, gross     1,168,551       1,181,269   Less: reserve for obsolescence     (388,560 )     (331,505 ) Inventory, net   $ 779,991     $ 849,764

v3.24.1.1.u2

STOCKHOLDERS’ EQUITY (Tables)	3 Months Ended
	Mar. 31, 2024
Equity [Abstract]
SCHEDULE OF STOCK OPTION PLAN ACTIVITY	No options were granted or exercised during the period ended March 31, 2024. 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 Remaining Contractual Term (Years)     Aggregate Intrinsic Value   Outstanding December 31, 2023     2,270,483     $ 0.67       2.72     $ 76,725   Exercised     -       -                   Forfeited or expired     (55,297 )   $ 0.65       -       -   Granted     -       -       -       -   Balance Outstanding, March 31, 2024     2,215,186     $ 0.67       2.54     $ 19,332                                     Exercisable March 31, 2024     2,199,122     $ 0.67       2.54     $ 19,332
SCHEDULE OF ANTIDILUTIVE SECURITIES EXCLUDED FROM COMPUTATION OF EARNINGS SHARE	SCHEDULE OF ANTIDILUTIVE SECURITIES EXCLUDED FROM COMPUTATION OF EARNINGS SHARE     March 31, 2024     December 31, 2023   Stock options     2,215,186       2,270,483   Stock warrants     7,525,265       7,525,265   Total     9,740,451       9,795,748

v3.24.1.1.u2

ORGANIZATION AND BASIS OF PRESENTATION (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Loss from operations	$ 734,874	$ 677,763
Net cash used by operating activities	476,043	$ 303,024
Working capital	$ 369,388

v3.24.1.1.u2

SCHEDULE OF INVENTORY (Details) - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Inventory Disclosure [Abstract]
Raw materials	$ 669,416	$ 648,537
Work-in-progress	228,243	235,811
Finished goods	270,892	296,921
Inventory, gross	1,168,551	1,181,269
Less: reserve for obsolescence	(388,560)	(331,505)
Inventory, net	$ 779,991	$ 849,764

v3.24.1.1.u2

INVESTMENT IN SUBSIDIARY (Details Narrative) - USD ($)		3 Months Ended
	Mar. 15, 2024	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Related Party Transaction [Line Items]
Notes receivable	$ 115,000
Proceeds from notes receivable	100,000	$ 100,000	$ 20,000
Other expenses	$ 15,000
Current portion of note receivable		226,782		$ 341,782
Note receivable current		33,000		50,000
Equity Method Investments		263,959		$ 253,835
Income from investment in subsidiary		$ 10,123	$ 32,156
Applied Nanotech, Inc. [Member]
Related Party Transaction [Line Items]
Sale of interest in subsidiary		30.00%

v3.24.1.1.u2

NOTES PAYABLE AND FINANCE LEASES (Details Narrative) - USD ($)								1 Months Ended		3 Months Ended		12 Months Ended
	Nov. 02, 2023	Jul. 24, 2023	Jun. 14, 2023	Oct. 26, 2022	Aug. 22, 2022	Feb. 14, 2022	Jan. 07, 2022	Dec. 18, 2022	Dec. 31, 2020	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023	Jul. 27, 2022	Jan. 31, 2022	Jan. 26, 2022
Proceeds from issuance of common stock										$ 55,000	$ 95,000
Production Equipment [Member]
Finance lease, liability									$ 85,000
Lessee, finance lease, term of contract									48 months
Finance lease, principal payments									$ 2,135
Finance lease balance payments										18,368		$ 24,194
Convertible Promissory Notes [Member]
Debt maturity date								Jun. 18, 2024
Debt instrument conversion price	$ 1.25	$ 1.25						$ 1.75
Proceeds from convertible debt	$ 50,000	$ 50,000						$ 50,000
Debt instrument, interest rate	8.00%	8.00%						8.00%
Proceeds from secured debt			$ 10,000
Proceeds from issuance of common stock			50,000
Proceeds from issuance of debt discount			$ 5,333
Debt discount										2,506		3,390
Convertible notes payable										$ 525,000		$ 525,000
Investors Two [Member]
Convertible debt						$ 50,000
Mr. Ron Berman [Member]
Convertible debt													$ 25,000
Convertible Debt [Member]
Convertible debt					$ 25,000	$ 50,000	$ 100,000						50,000
Debt maturity date				Oct. 31, 2023	Mar. 31, 2026		Mar. 31, 2025
Annual payable interest percentage				8.00%	8.00%
Debt instrument conversion price				$ 1.75	$ 1.75
Proceeds from convertible debt				$ 25,000
Convertible Debt Three [Member]
Annual payable interest percentage						8.00%
Debt instrument conversion price						$ 1.75
Convertible Debt Three [Member] | Minimum [Member]
Debt maturity date						Mar. 31, 2025
Convertible Debt Three [Member] | Maximum [Member]
Debt maturity date						Mar. 31, 2026
Convertible Debt One [Member]
Convertible debt													$ 25,000
Annual payable interest percentage															8.00%
Debt instrument conversion price															$ 1.75
Convertible Debt Two [Member]
Annual payable interest percentage														8.00%
Debt instrument conversion price														$ 1.75

v3.24.1.1.u2

OPERATING LEASE (Details Narrative)		1 Months Ended
	May 31, 2020 USD ($) ft²	Feb. 28, 2023 USD ($) $ / shares shares	Mar. 31, 2024 USD ($)	Dec. 31, 2023 USD ($)
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Lease with related party | ft²	29,220
Lessee operating lease description	The lease has an initial term of seven years with a renewal option at the end of the initial term for an additional 3-year term, and a second renewal option thereafter for an additional 5-year term. The renewal term is not included in the calculation of the operating lease liability. As the sole tenant, we are responsible for all taxes, ordinary maintenance, snow removal and other ordinary operating expenses. Rent is $6.50 per square foot, increasing by $0.25 per year. During the first three years we had the right to buy up to a 49% interest in Magic Research LLC for a price equal to 49% of the contributions received from other members.
Fair value of warrants	$ 311,718
Cash			$ 189,133	$ 527,462
Right-of-use assets			795,634	845,563
Operating lease liabilities			$ 683,623	$ 722,419
Land Lord Agreement [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Stock issued for services, shares | shares		66,000
Shares issued, price per share | $ / shares		$ 1.25
Cash		$ 8,056
Payments for rent		$ 10,983
Share price | $ / shares		$ 0.75

v3.24.1.1.u2

RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Related Party Transaction [Line Items]
Fees for directors	$ 218,119	$ 189,459
Issuance of options
Exercise price	$ 0.67
Accrued rent	$ 52,791		$ 30,141
Miles Gatland [Member]
Related Party Transaction [Line Items]
Economic interest percentage	12.50%
Mr Berman [Member]
Related Party Transaction [Line Items]
Payroll expenses	$ 8,759
Chief Financial Officer [Member]
Related Party Transaction [Line Items]
Accounts payable	5,000
Related Party [Member]
Related Party Transaction [Line Items]
Fees for directors	6,000	6,000
Director [Member]
Related Party Transaction [Line Items]
Fees for directors	36,000	42,000
Ronald J Berman [Member]
Related Party Transaction [Line Items]
Consulting fees	24,000
Legal fees		30,000
Accounts payable	8,000
Tom Berman [Member]
Related Party Transaction [Line Items]
Salaray	56,250	$ 30,000
Issuance of options		30,000
Exercise price		$ 0.65
Scott & Jeanne Rickert [Member]
Related Party Transaction [Line Items]
Aggregate advance	42,887		42,887
Jeanne Rickert [Member]
Related Party Transaction [Line Items]
Accrued payroll	$ 16,000		$ 16,000

v3.24.1.1.u2

SCHEDULE OF STOCK OPTION PLAN ACTIVITY (Details) - USD ($)	1 Months Ended		3 Months Ended	12 Months Ended
	Aug. 31, 2022	Feb. 28, 2022	Mar. 31, 2024	Dec. 31, 2023
Equity [Abstract]
Number of Options, Outstanding, Beginning balance			2,270,483
Weighted Average Exercise Price, Outstanding, Beginning balance			$ 0.67
Weighted Average Remaining Contractual Terms (Years), Outstanding			2 years 6 months 14 days	2 years 8 months 19 days
Aggregate Intrinsic Value, Ending balance			$ 76,725
Number of Options, Exercised
Weighted Average Exercise Price, Exercised
Number of Options, Forfeited or expired			(55,297)
Weighted Average Exercise Price, Forfeited or expired			$ 0.65
Number of Options, Granted	15,000	130,700
Weighted Average Exercise Price, Granted	$ 0.80	$ 0.80
Number of Options, Outstanding, Ending balance			2,215,186	2,270,483
Weighted Average Exercise Price, Outstanding, Beginning balance			$ 0.67	$ 0.67
Aggregate Intrinsic Value, Ending balance			$ 19,332	$ 76,725
Number of Options, Exercisable, Ending balance			2,199,122
Weighted Average Exercise Price, Exercisable Ending balance			$ 0.67
Weighted Average Remaining Contractual Terms (Years), Outstanding			2 years 6 months 14 days
Aggregate Intrinsic Value, Exercisable			$ 19,332

v3.24.1.1.u2

SCHEDULE OF ANTIDILUTIVE SECURITIES EXCLUDED FROM COMPUTATION OF EARNINGS SHARE (Details) - shares	3 Months Ended	12 Months Ended
	Mar. 31, 2024	Dec. 31, 2023
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total	9,740,451	9,795,748
Share-Based Payment Arrangement, Option [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total	2,215,186	2,270,483
Warrant [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total	7,525,265	7,525,265

v3.24.1.1.u2

STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($)					1 Months Ended			3 Months Ended		12 Months Ended
	May 30, 2023	Apr. 12, 2023	Jun. 21, 2021	Apr. 08, 2021	Feb. 28, 2023	Aug. 31, 2022	Feb. 28, 2022	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023	Mar. 02, 2021
Accumulated Other Comprehensive Income (Loss) [Line Items]
Sale of stock number of shares issued in transaction								73,334	74,806
Sale of stock, consideration received on transaction								$ 55,000	$ 93,507
Warrants to purchase up									74,626
Proceeds from issuance of warrants									$ 1,492
Warrant exercise price per share									$ 2.25
Weighted average remaining contractual term								2 years 6 months 14 days		2 years 8 months 19 days
Number of stock options granted						15,000	130,700
Weighted average exercise price issued						$ 0.80	$ 0.80
Weighted average grant date fair value, per share						$ 0.60	$ 0.60
2021 Equity Incentive Plan [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Number of shares available for issuance				2,500							85,000
Number of stock options granted	175,071	47,610		2,500
Number of shares available for future issuance			200,000
Number of share options, granted and forfeited			100,000
Weighted average exercise price issued	$ 0.65	$ 0.65
Warrant [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Warrant exercise price per share								$ 1.72
Class of warrant or right, outstanding								7,525,265
Weighted average remaining contractual term								37 months 21 days
Land Lord Agreement [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Stock issued for services, shares					52,800
Shares issued, price per share					$ 1.25
Partial payment, description					partial payment of rent for the six-month period from October 2022 through March 2023. Those shares were issued in March 2023. The landlord is a Related Party

v3.24.1.1.u2

SUBSEQUENT EVENTS (Details Narrative) - USD ($)				3 Months Ended
	Apr. 25, 2024	Apr. 24, 2024	Apr. 17, 2024	Mar. 31, 2024	Mar. 31, 2023
Subsequent Event [Line Items]
Sale of common stock				73,334	74,806
Proceeds from sale of common stock				$ 55,000	$ 95,000
Common stock issued for services					$ 65,960
Subsequent Event [Member]
Subsequent Event [Line Items]
Sale of common stock		33,333	33,333
Proceeds from sale of common stock	$ 50,000	$ 25,000	$ 25,000
Common stock issued for services	$ 5,644,430

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