DEERFIELD BEACH, FL--(Marketwired - November 17, 2015) - PEN Inc. (OTCQB: PENC) ("PEN" or "the Company"), a global leader in developing, commercializing and marketing enhanced performance products enabled by nanotechnology, yesterday reported financial results for its third quarter and nine months ended September 30, 2015.

Scott Rickert, PEN's President, Chairman and CEO, said, "PEN was created over a year ago. I am proud of the collaboration and innovation that our teams have achieved together, namely the development of the environmentally friendly HALO™ surface protector and other proprietary new products.

"In our optical products business, that currently accounts for the majority of product sales, we saw a healthy improvement in gross margin due to a more profitable assortment of products sold during the quarter. We continue our efforts to expand the sales channels for optical cleaners and defogging products and our new anti-reflective lens cleaner, Clarity® AR, is now being tested by several customers. Our scientists at the Design Center in Austin, Texas, have made exciting breakthroughs in the areas of 3D printed electronics and medical imaging. At the same time, we still have further to go in terms of rationalizing R&D operations to be consistent with a contract services business model.

"We recorded initial sales of the HALO surface protector, cleaner and fortifier in the third quarter. With the need for healthy surfaces becoming a major issue in the minds of consumers, there is a large and growing market for safe and effective solutions that protect against pathogens without using harsh chemicals. I remain confident that the HALO product holds strong growth potential for PEN."

Third 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 September 30, 2015, total revenues were $2,010,792, up 2.9% from reported revenues of $1,954,721 in the third quarter of 2014. On a pro forma basis, with both segments included, total revenues were $2,440,648 in the third quarter of 2014.

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

Sales from PEN's Product segment were $1,674,242, down 2.7% as compared to the three months ended September 30, 2014. The decline in product segment revenue was due to slightly lower sales of optical products in the third quarter of 2015 relative to the year ago period.

Gross margin in the Product segment was 40.0%, up from 34.3% in the year ago period, primarily due to differences in the assortment of optical products sold.

Nanotechnology R&D Contract Services Segment

Revenues from Research and development services were $336,550 in the third quarter of 2015, compared to $233,414 in the third quarter of 2014. The Company began recognizing revenues for this segment on August 27, 2014, the date of Combination. On a pro forma basis, revenues from the research and development segment were $719,341 in the third quarter of 2014.

Gross margin from Research and development services was negative 43.2%, down from 9.8% in the year ago period. The decrease in gross margin was due to fewer research projects being performed and the allocation of fixed overhead and salaries to the reduced number of projects.

For the third quarter of 2015, overall gross profit amounted to $516,449 down 15.9% from $613,962 for the third quarter of 2014. Gross margin was 25.7%, compared to 31.4% in the year ago period. The decrease in gross margin was primarily attributable to the negative gross margin from the Research and development services segment.

Operating expenses totaled $1,250,499 in the third quarter of 2015, down slightly from $1,262,683 in the third quarter of 2014. The decrease was primarily due to lower salaries, wages and contract labor, along with lower professional fees and general and administrative expenses. These decreases were partially offset by increases in selling and marketing expenses to promote new product lines in the product segment and higher 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 September 30, 2015 amounted to $757,110, or ($0.00) per basic and diluted share, as compared to a net loss of $448,887, or ($0.00) per basic and diluted share, for the three months ended September 30, 2014. On a pro forma basis, with both segments included, net loss for the quarter ended September 30, 2014 was $833,077, or ($0.00) per basic and diluted share. Reported and pro forma basic and diluted earnings per share were based on 535,646,508 and 401,181,389 weighted average shares outstanding, respectively, for the three months ended September 30, 2015 and 2014.

Nine 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 nine months ended September 30, 2015, total revenues were $7,391,882, down 2.7% from reported revenues of $7,594,094 in the nine months ended September 30, 2014. On a pro forma basis, with both segments included, total revenues were $9,523,149 in the nine months ended September 30, 2014. Gross profit was $2,448,170 in the nine months ended September 30, 2015, down 28.5% from reported gross profit of $3,421,667 in the first nine months of 2014. Gross margin was 33.1% compared to 45.1% in the nine months ended September 30, 2014. Net loss for the nine months ended September 30, 2015 amounted to $1,525,080, or ($0.00) per basic and diluted share, as compared to net income of $94,491, or $0.00 per basic and diluted share, for the nine months ended September 30, 2014. On a pro forma basis, with both segments included, net loss for the nine months ended September 30, 2014 was $2,157,791, or ($0.01) per basic and diluted share. Reported and pro forma basic and diluted earnings per share were based on 535,105,724 and 351,098,340 weighted average shares outstanding, respectively, for the nine months ended September 30, 2015 and 2014.

Financial Condition

As of September 30, 2015, PEN held cash and cash equivalents of $190,101 as compared to $464,735 at December 31, 2014. As of September 30, 2015, PEN had a working capital deficit of $882,136 compared to working capital of $86,636 at December 31, 2014. The Company invested approximately $231,796 in capital expenditures during the first nine months of 2015, primarily for the purchase of additional packaging equipment related to the expansion of its distribution channels for its optical products in the second quarter of 2015. The Company does not anticipate significant capital expenditures for the remainder of 2015.

As of September 30, 2015 the Company had short-term debt of $1,201,470 compared to $773,344 at December 31, 2014. At September 30, 2015, the Company had approximately $372,910 of additional borrowing available under its revolving credit facility.

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: Thursday, November 19, 1 pm EDT

PEN will host an investor webcast Thursday, November 19 at 1 pm ET to discuss third quarter results, provide a business update and take questions from investors. Participants can register for the event at: http://event.on24.com/wcc/r/1093903/3AC8ACDB860043B3FF74BEE6BC5EEC1B.

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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