DEERFIELD BEACH, FL--(Marketwired - August 13, 2015) - PEN Inc. (OTCQB: PENC) ("PEN" or "the Company"), a global leader in developing, commercializing and marketing enhanced performance products enabled by nanotechnology that solve everyday problems for customers in the optical, transportation, military, sports, and safety industries, yesterday reported financial results for its second quarter and six months ended June 30, 2015.

Scott Rickert, PEN's President, Chairman and CEO, said, "During the second quarter of 2015, we continued to make rapid progress in aligning our teams toward a common objective. The success of our HALO™ ("HALO") group in developing a revolutionary new product so quickly after the merger demonstrates the innovation the two businesses can achieve together.

"In our optical products business, that currently accounts for the majority of product sales, we are expanding sales channels for optical cleaners and anti-fogging conditioners. Meanwhile, at our Design Center in Austin, Texas, our team of scientists continues its groundbreaking work on the HALO product family and other new products, alongside its ongoing contract research projects for various government and private entities.

"We are moving forward with the roll-out of the first product in the HALO family, an environmentally friendly surface protector, fortifier and cleaner. Sales commenced in July and we are expanding our sales efforts to approach key customers in several markets. Commercial production will begin in August. I am confident that HALO has the potential to transform PEN from a small innovative nanotechnology products company into a sizable global consumer products business."

Second Quarter 2015 Financial Results

^a Pro forma results assume the business combination ("Combination") with Applied Nanotech Holdings, Inc. ("Applied Nanotech") occurred at the beginning of the comparable prior year reporting period. The pro forma results are presented in order to provide additional insights into the underlying trends in the business. Pro forma data does not purport to be indicative of the results that would have been obtained had these events actually occurred at the beginning of the periods presented and is not intended to be a projection of future results. For more information on the Combination, please refer to the Company's latest Form 10-Q available at www.sec.gov or the Company's website, www.pen-technology.com.

For the three months ended June 30, 2015, total revenues were $2,313,349, down 19.3% from reported revenues of $2,867,962 in the second quarter of 2014. On a pro forma basis, with both segments included, total revenues were $3,428,658 in the second quarter of 2014.

Product Segment -- Optical, Surface Treatments & Coatings and Related Products

Sales from PEN's Product segment were $1,862,133, down 35.1% as compared to the three months ended June 30, 2014. The decline in product revenue was due to abnormally high sales of anti-fog cloths in the first half of 2014 due to a large re-stocking order from one of the Company's major customers.

Nanotechnology R&D Contract Services Segment

Revenues from Research and development services were $451,216 in the second quarter of 2015. The Company did not recognize revenues for this segment until after August 27, 2014, the date of Combination. On a pro forma basis, revenues from the research and development segment were $560,696 in the second quarter of 2014.

For the second quarter of 2015, overall gross profit amounted to $779,083, down 47.6% from $1,486,435 for the second quarter of 2014. Gross margin was 33.7%, compared to 51.8% in the year ago period. The decrease in gross margin was primarily attributable to the sale of a larger proportion of higher margin anti-fog and protective coating products in the 2014 period as compared to 2015 period.

Operating expenses totaled $1,309,538 in the second quarter of 2015, a 31.8% increase from $993,781 in the second quarter of 2014. The increase was primarily due to (i) the inclusion of salaries, wages, and general and administrative expenses in the current quarter as a result of the Combination with Applied Nanotech; (ii) higher salaries and benefits in the product segment relating to additional sales and marketing and internal legal staff; and (iii) an increase in research and development expenses associated with development of the HALO product and new product formulations of lens cleaning and conditioning products. Management continues "right-sizing" operations to focus engineering on PEN's objectives of safety, health and sustainability products.

Net loss for the three months ended June 30, 2015 amounted to $582,578, or ($0.00) per basic and diluted share, as compared to net income of $258,505, or $0.00 per basic and diluted share, for the three months ended June 30, 2014. On a pro forma basis, with both segments included, net loss for the quarter ended June 30, 2014 was $1,153,995, or ($0.00) per basic and diluted share. Reported and pro forma basic and diluted earnings per share were based on 535,438,342 and 325,641,762 weighted average shares outstanding, respectively, for the three months ended June 30, 2015 and 2014.

Six Month Results

^a Pro forma results assume the business combination ("Combination") with Applied Nanotech Holdings, Inc. ("Applied Nanotech") occurred at the beginning of the comparable prior year reporting period. The pro forma results are presented in order to provide additional insights into the underlying trends in the business. Pro forma data does not purport to be indicative of the results that would have been obtained had these events actually occurred at the beginning of the periods presented and is not intended to be a projection of future results. For more information on the Combination, please refer to the Company's latest Form 10-Q available at www.sec.gov or the Company's website www.pen-technology.com.

For the six months ended June 30, 2015, total revenues were $5,381,090, down 4.6% from reported revenues of $5,639,373 in the first half of 2014. On a pro forma basis, with both segments included, total revenues were $7,082,501 in the first half of 2014. Gross profit was $1,931,721 in the first half of 2015, down 31.2% from reported gross profit of $2,807,705 in the first half of 2014. Gross margin was 35.9% compared to 49.8% in the first half of 2014. Net loss for the six months ended June 30, 2015 amounted to $767,970, or ($0.00) per basic and diluted share, as compared to net income of $489,960, or $0.00 per basic and diluted share, for the six months ended June 30, 2014. On a pro forma basis, with both segments included, net loss for the six months ended June 30, 2014 was $1,324,714, or ($0.00) per basic and diluted share. Reported and pro forma basic and diluted earnings per share were based on 534,830,851 and 325,641,762 weighted average shares outstanding, respectively, for the six months ended June 30, 2015 and 2014.

Financial Condition

As of June 30, 2015, PEN held cash and cash equivalents of $169,632 as compared to $464,735 at December 31, 2014. As of June 30, 2015, PEN had a working capital deficit of $223,627 compared to working capital of $86,636 at December 31, 2014. The Company invested approximately $227,592 in capital expenditures during the first half of 2015, primarily for the purchase of additional packaging equipment related to the expansion of its distribution channels for its optical products. The Company does not anticipate significant capital expenditures for the remainder of 2015.

As of June 30, 2015 the Company had short-term debt of $1,222,329, compared to $773,344 at December 31, 2014. At June 30, 2015, the Company had approximately $802,051 of additional borrowing available under its revolving credit facility.

The Company continues to explore a potential capital raise under its placement agency agreement with INTL FCStone Securities Inc. Any proceeds would be used for general corporate purposes and expenditures to accelerate the marketing roll-out of HALO, with the aim of creating a larger and more valuable PEN.

The entire Form 10Q and related financial statements are available at www.sec.gov or the company's website, www.pen-technology.com.

Investor webcast and business update: Wednesday, August 19, 1 pm EDT

PEN will host an investor webcast Wednesday, August 19 at 1 pm EDT to discuss second quarter results, provide a business update and take questions from investors. Participants can register for the event at: http://event.on24.com/wcc/r/1033318/AE95408EC886C117AC7ECBF5C8BFE325.

Questions for the event may be submitted in advance to ir@pen-technology.com.

About PEN Inc.
PEN Inc. (OTCQB: PENC) is a global leader in developing, commercializing, and marketing enhanced performance products enabled by nanotechnology that solve everyday problems for customers in the optical, transportation, military, sports, and safety industries. Through its wholly-owned subsidiary Nanofilm Ltd., the Company develops, manufactures and sells products based on nanotechnology including its Ultra Clarity® brand eyeglass cleaner and Defog It™ brand defogging products. The Company's Applied Nanotech, Inc. subsidiary in Austin, Texas functions as the Design Center conducting research and development services for government and private customers and new product development for PEN focusing on innovative and advanced product solutions in the areas of safety, health, and sustainability. The Company also sells its environmentally friendly HALO brand surface protector, fortifier, and cleaner through its wholly-owned subsidiary, PEN Technology, LLC. For more information about PEN, visit www.pen-technology.com.

Safe Harbor Statement
This press release contains forward-looking statements that involve risks and uncertainties concerning our business, products, and financial results. Actual results may differ materially from the results predicted. More information about potential risk factors that could affect our business, products, and financial results are included in our annual report on Form 10-K for the fiscal year ended December 31, 2014, and in reports subsequently filed by us with the Securities and Exchange Commission.("SEC"). All documents are available through the SEC's Electronic Data Gathering Analysis and Retrieval System (EDGAR) at www.sec.gov or from our website listed above. We hereby disclaim any obligation to publicly update the information provided above, including forward-looking statements, to reflect subsequent events or circumstances.

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