UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
þQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended:March 31, 20142015
or
¨oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number:333-138927
HYDROGEN FUTURE CORP.
(Exact Name of registrant as specified in its charter)
Nevada | 20-5277531 |
(State or other Jurisdiction of | (I.R.S. Employer |
incorporation or organization) | (I.R.S. Employer Identification Number) |
2525 Robinhood Street, Suite 1100
Houston, TX 77005
(Address of principal executive offices)
(713) 465-1001
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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 þNo ¨o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, 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 ¨þ No þo
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act:
Large Accelerated Filer | ¨o | | Accelerated Filer | ¨ |
| | | | o |
Non-Accelerated Filer | ¨o | | Smaller Reporting Company | þ |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨o No þ
As of May 15, 2014,13, 2015, there were 332,282,430674,553,006 shares outstanding of the registrant’s common stock.
| | Page |
PART I—FINANCIAL INFORMATION |
| | |
Item 1. Financial Statements. | | 3 |
| | |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. | 21 | 30 |
| | |
Item 3. Quantitative and Qualitative disclosures about Market Risk. | 30 | 36 |
| | |
Item 4. Controls and Procedures. | 30 | 36 |
| | |
PART II—OTHER INFORMATION |
| | |
Item 1. Legal Proceedings. | 31 | 37 |
| | |
Item 1A. Risk Factors. | 31 | 37 |
| | |
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. | 31 | 37 |
| | |
Item 3. Defaults Upon Senior Securities. | 31 | 37 |
| | |
Item 4. Mine Safety Disclosures. | 31 | 37 |
| | |
Item 5. Other Information. | 31 | 37 |
| | |
Item 6. Exhibits. | 31 | 37 |
| | |
Signatures | 32 | 38 |
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements.
(A Development Stage Company)
| | March 31, | | | September 30, | |
| | 2015 | | | 2014 | |
| | (unaudited) | | | | |
Assets | | | | | | |
| | | | | | |
Current assets | | | | | | |
Cash | | $ | 9,810 | | | $ | 31,033 | |
Inventory | | | 2,031 | | | | 712 | |
Total current assets | | | 11,841 | | | | 31,745 | |
| | | | | | | | |
Non-current assets | | | | | | | | |
Property and equipment - net | | | 164,173 | | | | 181,259 | |
Note Receivable | | | 47,005 | | | | 47,005 | |
Debt issue costs - net | | | 1,020 | | | | 20,288 | |
Goodwill | | | 3,353,156 | | | | 3,353,156 | |
Total Non-Current Assets | | | 3,565,354 | | | | 3,601,708 | |
| | | | | | | | |
Total assets | | $ | 3,577,195 | | | $ | 3,633,453 | |
| | | | | | | | |
Liabilities and Stockholders' (Deficit) | | | | | | | | |
| | | | | | | | |
Current Liabilities | | | | | | | | |
Accounts payable and accrued liabilities | | $ | 156,985 | | | $ | 165,991 | |
Accounts payable - former Officer | | | 415,719 | | | | 415,719 | |
Accrued interest payable | | | 410,133 | | | | 379,092 | |
Notes/Advances payable - related party | | | 27,173 | | | | 27,173 | |
Derivative liability | | | 1,989,528 | | | | 243,809 | |
Convertible debt - net | | | 733,793 | | | | 442,609 | |
Non-convertible debt from Hydra Acquistion | | | 981,508 | | | | 981,508 | |
Total current liabilities | | | 4,714,840 | | | | 2,655,901 | |
| | | | | | | | |
Stockholders' Equity | | | | | | | | |
Preferred stock, Series A, $0.001 par value, 200,000,000 shares authorized; 100,000,000 issued and outstanding at March 31, 2015 and September 30, 2014 | | | 100,000 | | | | 100,000 | |
Preferred stock,Series B, $0.001 par value, 1 share authorized; 1 share and 0 shares issued and outstanding at March 31, 2015 and September 30, 2014, respectively | | | - | | | | - | |
Common stock, $0.001 par value, 10,000,000,000 shares authorized; 234,657,616 and 8,911,263 issued and outstanding at March 31, 2015 and September 30, 2014, respectively | | | 234,658 | | | | 8,912 | |
Additional paid-in capital | | | 13,834,427 | | | | 13,832,548 | |
Deficit accumulated during the development stage | | | (15,307,235 | ) | | | (12,964,414 | ) |
Accumulated other comprehensive income | | | 505 | | | | 505 | |
Total Stockholders' Equity | | | (1,137,645 | ) | | | 977,552 | |
| | | | | | | | |
Total liabilities and stockholders' (deficit) | | $ | 3,577,195 | | | $ | 3,633,453 | |
| | | | | | | | |
| | March 31, | | | September 30, | |
| | 2014 | | | 2013 | |
| | (Unaudited) | | | | |
Assets | | | | | | |
| | | | | | |
Current assets | | | | | | |
Cash | | $ | 29,157 | | | $ | (0 | ) |
Other receivables | | | 3,194 | | | | 3,194 | |
Total current assets | | | 32,351 | | | | 3,194 | |
| | | | | | | | |
Property and equipment - net | | | 182,501 | | | | 199,567 | |
Debt issue costs - net | | | 8,828 | | | | 15,983 | |
| | | | | | | | |
Total assets | | $ | 223,680 | | | $ | 218,744 | |
| | | | | | | | |
Liabilities and Stockholders' (Deficit) | | | | | | | | |
| | | | | | | | |
Current Liabilities | | | | | | | | |
Accounts payable and accrued liabilities | | $ | 122,610 | | | $ | 122,610 | |
Accounts payable - related party | | | 415,719 | | | | 415,719 | |
Accrued interest payable | | | 104,465 | | | | 74,247 | |
Notes/Advances payable - related party | | | 27,173 | | | | 27,173 | |
Common stock to be issued | | | 41,750 | | | | - | |
Derivative liability | | | 198,467 | | | | 1,337,315 | |
Convertible debt - net | | | 755,895 | | | | 591,738 | |
Total current liabilities | | | 1,666,079 | | | | 2,568,801 | |
| | | | | | | | |
Stockholders' (Deficit) | | | | | | | | |
Preferred stock, $0.001 par value, 200,000,000 shares authorized; 100,000,000 issued and outstanding | | | 100,000 | | | | 100,000 | |
Common stock, $0.001 par value, 10,000,000,000 shares authorized; 255,178,013 and 200,000 issued and outstanding at march 31, 2014 aned June 30, 2013, respectively | | | 255,178 | | | | 200 | |
Additional paid-in capital | | | 10,082,033 | | | | 2,709,377 | |
Deficit accumulated during the development stage | | | (11,880,115 | ) | | | (5,160,139 | ) |
Accumulated other comprehensive income | | | 505 | | | | 505 | |
Total stockholders' (deficit) | | | (1,442,399 | ) | | | (2,350,057 | ) |
| | | | | | | | |
Total liabilities and stockholders' (deficit) | | $ | 223,679 | | | $ | 218,744 | |
(A Development Stage Company)
(Unaudited)
| | Three Months Ended March 31 | | | June 21, 2006 (inception) through | |
| | 2015 | | | 2014 | | | March 31, 2015 | |
| | | | | | | | | |
Expenses | | | | | | | | | |
General and Administrative Expenses | | $ | 134,175 | | | $ | 5,349,454 | | | $ | 8,903,232 | |
Issuance of Common Stock to settle a prior liability | | | - | | | | - | | | | 117,000 | |
Impairment of software | | | - | | | | - | | | | 1,035,027 | |
Total | | | 134,175 | | | | 5,349,454 | | | | 10,055,256 | |
| | | | | | | | | | | | |
Other Income/(Expense) | | | | | | | | | | | | |
Interest expense | | | (156,055 | ) | | | (176,507 | ) | | | (1,185,936 | ) |
Derivative expense | | | (159,390 | ) | | | (1,067,424 | ) | | | (4,494,367 | ) |
Change in fair value of derivative liability | | | (1,127,383 | ) | | | 917,897 | | | | 2,829,486 | |
Loss on Retirement of Debt | | | (68,560 | ) | | | (1,825,104 | ) | | | (2,437,230 | ) |
Tax refunds | | | - | | | | - | | | | 36,071 | |
Total Other (Expense) - net | | | (1,511,388 | ) | | | (2,151,139 | ) | | | (5,251,976 | ) |
| | | | | | | | | | | | |
Net Income (Loss) | | $ | (1,645,563 | ) | | $ | (7,500,593 | ) | | $ | (15,307,235 | ) |
| | | | | | | | | | | | |
Net loss per common share - basic | | $ | (0.03 | ) | | $ | (18.31 | ) | | | | |
| | | | | | | | | | | | |
Net loss per common share - diluted | | $ | (0.03 | ) | | $ | (9.26 | ) | | | | |
| | | | | | | | | | | | |
Weighted average number of common shares outstanding | | | | | | | | | | | | |
during the period/year - basic | | | 55,656,550 | | | | 409,578 | | | | | |
| | | | | | | | | | | | |
Weighted average number of common shares outstanding | | | | | | | | | | | | |
during the period/year - diluted | | | 56,056,550 | | | | 809,578 | | | | | |
| | | | | | | | | | | | |
| | Three Months Ended March 31 | |
| | 2014 | | | 2013 | |
| | | | | | |
Expenses | | | | | | |
General and Administrative Expenses | | $ | 5,349,454 | | | $ | 12,015 | |
Impairment of software | | | - | | | | - | |
Total | | | 5,349,454 | | | | 12,015 | |
| | | | | | | | |
Other Income/(Expense) | | | | | | | | |
Interest expense | | | (176,507 | ) | | | (102,074 | ) |
Derivative expense | | | (1,067,424 | ) | | | - | |
Change in fair value of derivative liability | | | 917,897 | | | | (1,182,780 | ) |
Loss on Retirement of Debt | | | (1,825,104 | ) | | | (202,360 | ) |
Total Other (Expense) - net | | | (2,151,139 | ) | | | (1,487,214 | ) |
| | | | | | | | |
Net Income (Loss) | | $ | (7,500,593 | ) | | $ | (1,499,229 | ) |
| | | | | | | | |
Net loss per common share - basic | | $ | (0.07 | ) | | $ | (12.33 | ) |
| | | | | | | | |
Net loss per common share - diluted | | $ | (0.04 | ) | | $ | (12.33 | ) |
| | | | | | | | |
Weighted average number of common shares outstanding | | | | | | | | |
during the period/year - basic | | | 102,394,546 | | | | 121,558 | |
| | | | | | | | |
Weighted average number of common shares outstanding | | | | | | | | |
during the period/year - diluted | | | 202,394,546 | | | | 121,558 | |
(A Development Stage Company)
(Unaudited)
Hydrogen Future Corp. |
(A Development Stage Company) |
Statements of Operations |
(Unaudited) |
| | | | | | | | | |
| | | | | | | | | |
| | Six Months Ended March 31 | | | June 21, 2006 (inception) | |
| | 2015 | | | 2014 | | | through December 30, 2014 | |
| | | | | | | | | |
Expenses | | | | | | | | | |
General and Administrative Expenses | | $ | 251,406 | | | $ | 5,579,440 | | | $ | 8,903,232 | |
Issuance of Common Stock to settle a prior liability | | | - | | | | - | | | | 117,000 | |
Impairment of software | | | - | | | | - | | | | 1,035,027 | |
Total | �� | | 251,406 | | | | 5,579,440 | | | | 10,055,259 | |
| | | | | | | | | | | | |
Other Income/(Expense) | | | | | | | | | | | | |
Interest expense | | | (341,899 | ) | | | (280,017 | ) | | | (1,185,936 | ) |
Derivative expense | | | (241,041 | ) | | | (2,119,601 | ) | | | (4,494,367 | ) |
Change in fair value of derivative liability | | | (1,423,351 | ) | | | 3,258,449 | | | | 2,829,486 | |
Loss on Retirement of Debt | | | (85,124 | ) | | | (1,999,367 | ) | | | (2,437,230 | ) |
Tax refunds | | | - | | | | - | | | | 36,071 | |
Total Other (Expense) - net | | | (2,091,415 | ) | | | (1,140,537 | ) | | | (5,251,976 | ) |
| | | | | | | | | | | | |
Net Income (Loss) | | $ | (2,342,821 | ) | | $ | (6,719,977 | ) | | $ | (15,307,235 | ) |
| | | | | | | | | | | | |
Net loss per common share - basic | | $ | (0.07 | ) | | $ | (19.24 | ) | | | | |
| | | | | | | | | | | | |
Net loss per common share - diluted | | $ | (0.07 | ) | | $ | (8.97 | ) | | | | |
| | | | | | | | | | | | |
Weighted average number of common shares outstanding | | | | | | | | | | | | |
during the period/year - basic | | | 32,043,335 | | | | 349,183 | | | | | |
| | | | | | | | | | | | |
Weighted average number of common shares outstanding | | | | | | | | | | | | |
during the period/year - diluted | | | 32,443,335 | | | | 749,183 | | | | | |
| | Six Months Ended March 31, | | | June 21, 2006 (Inception) to March 31, | |
| | 2013 | | | 2012 | | | 2014 | |
| | | | | | | | | |
CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | | | |
Net loss | | $ | (6,719,976 | ) | | $ | 694,279 | | | $ | (12,660,733 | ) |
Adjustments to reconcile net loss | | | | | | | | | | | | |
to net cash provided by (used in) operating activities: | | | | | | | | | |
Share based payments | | | 5,255,000 | | | | 30,000 | | | | 5,907,549 | |
Impairment of Software | | | | | | | | | | | 1,035,027 | |
Derivative expense | | | 2,119,601 | | | | 144,581 | | | | 3,687,492 | |
Depreciation | | | 17,066 | | | | 34,130 | | | | 452,148 | |
Amortization of debt issue cost | | | 7,156 | | | | 9,886 | | | | 42,073 | |
Amortization of debt discount | | | 225,023 | | | | 169,512 | | | | 659,326 | |
Amortization of Original Issue Discount | | | 17,250 | | | | | | | | 17,366 | |
Change in fair value of derivative liabilities | | | (3,258,449 | ) | | | (1,386,527 | ) | | | (4,002,623 | ) |
Accrued interest on Retired debt | | | | | | | | | | | 779 | |
Legal fees on debt conversions | | | 9,375 | | | | | | | | 9,375 | |
Common stock to be issued | | | | | | | | | | | - | |
Accrued interest on Retired debt | | | 7,526 | | | | | | | | | |
Loss on Retirement of Debt | | | 1,999,367 | | | | | | | | 2,201,727 | |
| | | | | | | | | | | | |
Changes in operating assets and liabilities: | | | | | | | | | |
(Increase) decrease in other receivables | | | - | | | | 77,321 | | | | (3,194 | ) |
Increase (decrease) in accounts payable and accrued expense | | | - | | | | (18,054 | ) | | | 122,610 | |
Increase in accounts payable - related party | | | | 133,249 | | | | 415,719 | |
Increase in accrued interest | | | 30,218 | | | | 26,624 | | | | 104,465 | |
Net cash provided by (used in) operating activities | | | (290,843 | ) | | | (85,000 | ) | | | (2,010,895 | ) |
| | | | | | | | | | | | |
CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | | | | | |
Purchase of property and equipment | | | - | | | | | | | | (288,799 | ) |
Net cash used in investing activities | | | - | | | | - | | | | (288,799 | ) |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | | | | | |
Proceeds from related party notes/advances | | | - | | | | | | | | 31,586 | |
Proceeds from convertible notes payable | | | 170,000 | | | | 40,303 | | | | 538,803 | |
Notes Issued for Professional services | | | 150,000 | | | | 53,727 | | | | 418,727 | |
Repayment of related party notes/advances | | | - | | | | | | | | (968 | ) |
Cash paid as debt offering costs | | | - | | | | | | | | (24,000 | ) |
Proceeds from issuance of common stock | | | - | | | | | | | | 579,500 | |
Net cash provided by financing activities | | | 320,000 | | | | 94,030 | | | | 1,543,648 | |
| | | | | | | | | | | | |
Net (Decrease) in Cash | | | 29,157 | | | | 9,030 | | | | (756,046 | ) |
Effect of Exchange Rates on Cash | | | | | | | (9,096 | ) | | | (2,941 | ) |
| | | | | | | | | | | | |
Cash - Beginning of Period/Year | | | (0 | ) | | | 854 | | | | - | |
| | | | | | | | | | | | |
Cash - End of Period/Year | | $ | 29,157 | | | $ | 788 | | | $ | (758,987 | ) |
| | | | | | | | | | | | |
SUPPLEMENTARY CASH FLOW INFORMATION: | | | | | | | | | |
Cash paid during the period/year for: | | | | | | | | | | | | |
Interest | | $ | - | | | $ | - | | | $ | - | |
Income Taxes | | $ | - | | | $ | - | | | $ | - | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
SUPPLEMENTARY DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | |
| | | | | | | | | | | | |
Debt converted to common shares | | $ | 389,618 | | | $ | - | | | $ | 501,108 | |
Common stock issued to acquire software | | $ | - | | | $ | - | | | $ | 1,380,876 | |
Preferred stock issued to officers | | $ | 310,000 | | | | | | | $ | 310,000 | |
Debt discount recorded on convertible debt accounted for as a derivative liability | | $ | 320,000 | | | $ | 300,000 | | | $ | 620,000 | |
Debt discount recorded on convertible debt accounted for as a derivative liability - original issue discount | | | | | $ | 27,122 | | | $ | 27,122 | |
Debt issue costs - warrants | | $ | - | | | $ | 26,901 | | | $ | 26,901 | |
Hydrogen Future Corp.
Statement of Stockholder's Equity
From the Period of Inception to March 31, 2015
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Common Stock, $0.001 Par Value | | | Series A Preferred Stock, $0.001 Par Value | | | Series B Preferred Stock, $0.001 Par Value | | | | | | | | | | | | | |
| | Shares | | | Amount | | | Shares | | | Amount | | | Shares | | | Amount | | | Additional Paid-In Capital | | | Deficit Acquired During Development Stage | | | Accumulated Other Comprehensive Income (Loss) | | | Total Stockholders' Equity (Deficit) | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Proceeds from the Issuance of founders stock- ($62.50/share) | | | 80 | | | $ | 0 | | | | - | | | $ | - | | | | - | | | $ | - | | | | 5,000 | | | $ | - | | | $ | - | | | $ | 5,000 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Proceeds from the Issuance of founders stock- ($62.50/share) | | | 120 | | | | 0 | | | | - | | | | - | | | | - | | | | - | | | | 15,000 | | | | - | | | | | | | | 15,000 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net loss- Inception (June 21, 2006) to September 30, 2006 | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | (2,631 | ) | | | - | | | | (2,631 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance- September 30, 2006 | | | 200 | | | | 0 | | | | - | | | | - | | | | - | | | | - | | | | 20,000 | | | | (2,631 | ) | | | - | | | | 17,369 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Proceeds from the Issuance of common stock- ($500/share) | | | 164 | | | | 0 | | | | - | | | | - | | | | - | | | | - | | | | 82,000 | | | | - | | | | - | | | | 82,000 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net loss for the year ended September 30, 2007 | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | (16,960 | ) | | | - | | | | (16,960 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance- September 30, 2007 | | | 364 | | | | 0 | | | | - | | | | - | | | | - | | | | - | | | | 102,000 | | | | (19,591 | ) | | | - | | | | 82,409 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net loss for the year ended September 30, 2008 | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | (18,199 | ) | | | - | | | | (18,199 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance- September 30, 2008 | | | 364 | | | | 0 | | | | - | | | | - | | | | - | | | | - | | | | 102,000 | | | | (37,790 | ) | | | - | | | | 64,210 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net loss for the year ended September 30, 2009 | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | (19,076 | ) | | | - | | | | (19,076 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance- September 30, 2009 | | | 364 | | | | 0 | | | | - | | | | - | | | | - | | | | - | | | | 102,000 | | | | (56,866 | ) | | | - | | | | 45,134 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Proceeds from the Issuance of common stock- ($81,250/share) | | | 2 | | | | 0 | | | | - | | | | - | | | | - | | | | - | | | | 162,500 | | | | - | | | | - | | | | 162,500 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Common stock issued to acquire software ($110,000/share) | | | 13 | | | | 0 | | | | - | | | | - | | | | - | | | | - | | | | 1,380,876 | | | | - | | | | - | | | | 1,380,876 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Proceeds from the Issuance of common stock- ($100,000/share) | | | 2 | | | | 0 | | | | - | | | | - | | | | - | | | | - | | | | 200,000 | | | | - | | | | - | | | | 200,000 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Common stock issued for consulting services ($100,000/share) | | | 0 | | | | 0 | | | | - | | | | - | | | | - | | | | - | | | | 16,000 | | | | - | | | | - | | | | 16,000 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Common stock issued for consulting services ($112,500/share) | | | 1 | | | | 0 | | | | - | | | | - | | | | - | | | | - | | | | 135,000 | | | | - | | | | - | | | | 135,000 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net loss for the year ended September 30, 2010 | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | (351,790 | ) | | | - | | | | (351,790 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Foreign Currency translation adjustment | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | (3,079 | ) | | | (3,079 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance- September 30, 2010 | | | 382 | | | | 0 | | | | - | | | | - | | | | - | | | | - | | | | 1,996,376 | | | | (408,656 | ) | | | (3,079 | ) | | | 1,584,641 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Proceeds from the Issuance of common stock- ($40,000/share) | | | 3 | | | | 0 | | | | - | | | | - | | | | - | | | | - | | | | 99,999 | | | | - | | | | - | | | | 100,000 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Proceeds from the Issuance of common stock- ($25,000/share) | | | 1 | | | | 0 | | | | - | | | | - | | | | - | | | | - | | | | 15,000 | | | | - | | | | - | | | | 15,000 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Debt discount on convertible notes- Original Issue Discount | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 27,122 | | | | - | | | | - | | | | 27,122 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Debt issue costs- warrants | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 26,901 | | | | - | | | | - | | | | 26,901 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Common stock issued for conversion of Note ($2,789/share) | | | 9 | | | | 0 | | | | - | | | | - | | | | - | | | | - | | | | 24,990 | | | | - | | | | - | | | | 24,990 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net loss for the year ended September 30, 2011 | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | (3,024,617 | ) | | | - | | | | (3,024,617 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Foreign Currency translation adjustment | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 9,234 | | | | 9,234 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance- September 30, 2011 | | | 394 | | | | 0 | | | | - | | | | - | | | | - | | | | - | | | | 2,190,388 | | | | (3,433,273 | ) | | | 6,155 | | | | (1,236,729 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Share Rescission | | | (22 | ) | | | (0 | ) | | | | | | | | | | | | | | | | | | | (89,936 | ) | | | | | | | | | | | (89,936 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net income for the year ended September 30, 2012 | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 694,279 | | | | - | | | | 694,279 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Foreign Currency translation adjustment | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | (5,650 | ) | | | (5,650 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance- September 30, 2012 | | | 372 | | | | 0 | | | | - | | | | - | | | | - | | | | - | | | | 2,100,452 | | | | (2,738,994 | ) | | | 505 | | | | (638,037 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Share Issuance upon default of | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
debt- ($488/share) | | | 120 | | | | 0 | | | | - | | | | - | | | | - | | | | - | | | | 58,500 | | | | - | | | | - | | | | 58,500 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Issuance of Shares to Officers for | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Compensation- ($400/share) | | | 256 | | | | 0 | | | | - | | | | - | | | | - | | | | - | | | | 102,596 | | | | - | | | | | | | | 102,596 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Shares issuance upon conversion | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
of debt- ($4,988/share) | | | 48 | | | | 0 | | | | - | | | | - | | | | - | | | | - | | | | 237,575 | | | | - | | | | - | | | | 237,575 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Common stock issued upon | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
conversion of insider debt | | | 3 | | | | 0 | | | | - | | | | - | | | | - | | | | - | | | | (0 | ) | | | - | | | | - | | | | 0 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Shares issued for consulting | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
services- ($388/share) | | | 1 | | | | 0 | | | | - | | | | - | | | | - | | | | - | | | | 452 | | | | - | | | | - | | | | 452 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Issuance of 100,000,000 shares of Preferred Stock to Officers- ($.0031/share) | | | - | | | | - | | | | 100,000,000 | | | | 100,000 | | | | - | | | | - | | | | 210,000 | | | | - | | | | - | | | | 310,000 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net loss for the year ended September 30, 2013 | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | (2,421,145 | ) | | | - | | | | (2,421,145 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance- September 30, 2013 | | | 800 | | | | 1 | | | | 100,000,000 | | | | 100,000 | | | | - | | | | 0 | | | | 2,709,575 | | | | (5,160,139 | ) | | | 505 | | | | (2,350,058 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Shares issuance upon conversion of debt, accrued interest and related share issuance expenses | | | 7,867,943 | | | | 7,868 | | | | - | | | | - | | | | - | | | | - | | | | 3,616,231 | | | | - | | | | - | | | | 3,624,098 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Shares issued to Management for Compensation on December 26, 2013 at $.065 | | | 2,880 | | | | 3 | | | | - | | | | - | | | | - | | | | - | | | | 44,997 | | | | - | | | | - | | | | 45,000 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Shares issued to Management for Compensation on January 27, 2014 at $.0521 | | | 400,000 | | | | 400 | | | | - | | | | - | | | | - | | | | - | | | | 5,209,600 | | | | - | | | | - | | | | 5,210,000 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Shares issued in settlement for prior unrecorded obligation for equipment purchase | | | 120,000 | | | | 120 | | | | - | | | | - | | | | - | | | | - | | | | 116,880 | | | | | | | | | | | | 117,000 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Shares issued for consulting services | | | 200,000 | | | | 200 | | | | | | | | | | | | | | | | | | | | 39,800 | | | | | | | | | | | | 40,000 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Debt Issue Costs | | | | | | | | | | | | | | | | | | | | | | | | | | | 37,875 | | | | | | | | | | | | 37,875 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Sale of common shares | | | 320,000 | | | | 320 | | | | | | | | | | | | | | | | | | | | 7,670 | | | | | | | | | | | | 7,990 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Issuance of 1 shares of Preferred Stock, Series B to American Security Research Company | | | | | | - | | | | - | | | | 1 | | | | - | | | | 2,049,920 | | | | | | | | | | | | 2,049,920 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net loss for the year ended September 30, 2014 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | (7,804,274 | ) | | | - | | | | (7,804,274 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance- September 30, 2014 | | | 8,911,623 | | | | 8,912 | | | | 100,000,000 | | | $ | 100,000 | | | | 1 | | | | - | | | | 13,832,548 | | | | (12,964,414 | ) | | | 505 | | | | 977,551 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Shares issuance upon conversion of debt, accrued interest and related share issuance expenses | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 225,745,933 | | | | 225,746 | | | | - | | | | - | | | | - | | | | - | | | | 1,879 | | | | | | | | | | | | 227,625 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Issuance of fractional shares associated with the reverse split | | | 60 | | | | 0 | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | | | | | 0 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net loss for the six months ended March 31, 2015 | | | | | | | | - | | | | - | | | | - | | | | - | | | | | | | | (2,342,821 | ) | | | | | | | (2,342,821 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 234,657,616 | | | $ | 234,658 | | | | 100,000,000 | | | $ | 100,000 | | | | 1 | | | $ | - | | | $ | 13,834,427 | | | $ | (15,307,235 | ) | | $ | 505 | | | $ | (1,137,646 | ) |
Hydrogen Future Corp.
(A Development Stage Company)
Statements of Cash Flows
(Unaudited)
| | | | | | | | June 21, 2006 | |
| | Six Months Ended March 31, | | | (Inception) to | |
| | 2015 | | | 2014 | | | March 31, 2015 | |
| | | | | | | | | |
CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | | | |
Net loss | | $ | (2,342,821 | ) | | $ | (6,719,976 | ) | | $ | (15,307,235 | ) |
Adjustments to reconcile net loss | | | | | | | | | | | | |
to net cash provided by (used in) operating activities: | | | | | |
Share based payments | | | - | | | | 5,255,000 | | | | 5,907,549 | |
Impairment of Software | | | | | | | - | | | | 1,035,027 | |
Derivative expense | | | 241,041 | | | | 2,119,601 | | | | 4,494,367 | |
Depreciation | | | 19,890 | | | | 17,066 | | | | 489,104 | |
Amortization of debt issue cost | | | 19,768 | | | | 7,156 | | | | 88,256 | |
Amortization of debt discount | | | 279,356 | | | | 225,023 | | | | 862,261 | |
Amortization of Original Issue Discount | | | (85 | ) | | | 17,250 | | | | 36,058 | |
Change in fair value of derivative liabilities | | | 1,423,351 | | | | (3,258,449 | ) | | | (2,829,486 | ) |
Accrued interest on Retired debt | | | 31,587 | | | | - | | | | 67,661 | |
Fees on debt conversions | | | 10,154 | | | | 9,375 | | | | 30,299 | |
Loss on Retirement of Debt | | | 85,124 | | | | 1,999,367 | | | | 2,437,230 | |
Loss on Issuance of Common Stock to settle a prior liability | | | - | | | | - | | | | 117,000 | |
Issuance of Common stock for consulting agreements | | | - | | | | - | | | | 48,000 | |
Changes in operating assets and liabilities: | | | | - | | | | | |
(Increase) decrease in other receivables | | | - | | | | - | | | | - | |
(Increase) decrease in Inventory | | | (1,319 | ) | | | - | | | | (2,031 | ) |
Increase (decrease) in accounts payable and accrued expense | | | (9,006 | ) | | | - | | | | 156,985 | |
Increase in accounts payable - related party | | | - | | | | - | | | | 415,719 | |
Increase in working capital from acquisition | | | - | | | | - | | | | (319,630 | ) |
Increase in accrued interest | | | 31,041 | | | | 30,218 | | | | 410,133 | |
Net cash provided by (used in) operating activities | | | (211,918 | ) | | | (290,843 | ) | | | (1,862,731 | ) |
| | | | | | | | | | | | |
CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | | | | | |
Note receivable Acquired in Acquistion | | | - | | | | - | | | | (47,005 | ) |
Cash acquired in Acquisition | | | - | | | | - | | | | 402 | |
Purchase of property and equipment | | | (2,805 | ) | | | - | | | | (307,428 | ) |
Net cash used in investing activities | | | (2,805 | ) | | | - | | | | (354,031 | ) |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | | | | | |
Proceeds from related party notes/advances | | | - | | | | - | | | | 31,586 | |
Proceeds from convertible notes payable | | | 44,000 | | | | 170,000 | | | | 917,178 | |
Notes Issued for Professional services | | | 150,000 | | | | 150,000 | | | | 718,727 | |
Repayment of related party notes/advances | | | - | | | | - | | | | (968 | ) |
Cash paid as debt offering costs | | | (500 | ) | | | - | | | | (24,500 | ) |
Proceeds from issuance of common stock | | | | | - | | | | 587,490 | |
Net cash provided by financing activities | | | 193,500 | | | | 320,000 | | | | 2,229,513 | |
| | | | | | | | | | | | |
Net (Decrease) in Cash | | | (21,223 | ) | | | 29,157 | | | | 12,751 | |
Effect of Exchange Rates on Cash | | | | | | | | | | | (2,941 | ) |
| | | | | | | | | | | | |
Cash - Beginning of Period/Year | | | 31,033 | | | | (0 | ) | | | - | |
| | | | | | | | | | | | |
Cash - End of Period/Year | | $ | 9,810 | | | $ | 29,157 | | | $ | 9,810 | |
| | | | | | | | | | | | |
SUPPLEMENTARY CASH FLOW INFORMATION: | | | | | | | | |
Cash paid during the period/year for: | | | | | | | | | | | | |
Interest | | $ | - | | | $ | - | | | $ | - | |
Income Taxes | | $ | - | | | $ | - | | | $ | - | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
SUPPLEMENTARY DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | |
| | | | | | | | | | | | |
Debt converted to common shares | | $ | 63,087 | | | $ | - | | | | 913,644 | |
Common stock issued to acquire software | | $ | - | | | $ | - | | | | 1,380,876 | |
Notes payable acquired in acquisition | | | | | | | | 984,008 | |
Preferred stock issued to officers | | | | | | | | | | | 310,000 | |
Debt discount recorded on convertible debt accounted for as a derivative liability | | $ | 193,500 | | | $ | 320,000 | | | | 1,241,375 | |
Debt discount recorded on convertible debt accounted for as a derivative liability - original issue discount | | $ | 500 | | | $ | 27,122 | | | | 38,375 | |
Debt issue costs - warrants | | $ | 0 | | | $ | 0 | | | | 26,901 | |
| | | | | | | | | | | | |
(A Development Stage Company)
Notes to Financial Statements
March 31, 20142015
(Unaudited)
Note 1 Basis of Presentation
The accompanying unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the United States Securities and Exchange Commission for interim financial information.
The financial information as of September 30, 20132014 is derived from the audited financial statements presented in the Company’s Annual Report on Form 10-K for the years ended September 30, 20132014 and 2012.2013. The unaudited interim financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K, which contains the audited financial statements and notes thereto, together with the Management’s Discussion and Analysis, for the years ended September 30, 20132014 and 2012.2013.
Certain information or footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted, pursuant to the rules and regulations of the Securities and Exchange Commission for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. It is management's opinion, however, that all material adjustments (consisting of normal recurring adjustments) have been made which are necessary for a fair financial statement presentation. The interim results for the three months ended March 31, 20142015 are not necessarily indicative of results for the full fiscal year.
Note 2 Nature of Operations and Summary of Significant Accounting Policies
Nature of Operations
Company History
HYDROGEN FUTURE CORP., (the “Company” or “HFCO”) wasWe were incorporated in the State of Nevada on June 21, 2006. The Company was originally incorporated2006, as El Palenque Nercery, Inc. andOn June 30, 2006, we changed itsour name to El Palenque Vivero, Inc., and on March 31, 2006. On March 23, 2010, it furtherwe changed itsour name to A5 Laboratories Inc. On April 8, 2010, we effectuated a forward split of our issued shares of common stock on the basis of 10-for-1. On October 10, 2013, we changed our name to Hydrogen Future Corporation. On December 27, 2013, our stock trading symbol was changed from AFLB.OB to HFCO.OB.HFCO.OB, and on January 27, 2015, we effectuated a reverse split of our common stock on a 1:500 basis . On April 21, 2014, the Company completed the acquisition of Hydra Fuel Cell Corporation (“Hydra”) from American Security Resources Corporation (Pink Sheets: ARSC). On January 12. 2015, we effectuated a reverse split of our common stock on a 1:250 basis. Hydra has developed advanced hydrogen fuel cell technology which it initially intends to deploy as residential and small commercial grid replacement for electric generation. Our business offices are located at 2525 Robinhood Street, Suite 1100, Houston TX and our telephone number is (713) 465-1001.
The Company intendsintended to provide contract research and laboratory services to the pharmaceutical industry. To date, the activitiesThis part of the Company have been limited to raising capital.
Onis currently inactive, and we are concentrating on our fuel cell operation. We strongly suggest you read our 8-K filed April 28, 2014 about the CompanyHydra acquisition and our form 10-K for the year ended September 30, 2013 filed a form 8-Kon January 21, 2015 in addition to this filing to better understand the Company’s new direction. Both filings were with the Securities and Exchange Commission. The 8-K referenced above, among other recent developments disclosed the following:
● On April 21, 2014, Hydrogen Future Corporation completed the acquisition of Hydra Fuel Cell Corporation (“Hydra”) from American Security Resources Corporation (Pink Sheets: ARSC). Hydra has developed advanced hydrogen fuel cell technology which it initially intends to deploy as residentialCommission and small commercial grid replacement for electric generation.can be found at www.SEC.gov .
● Under the agreement to acquire Hydra, the Company acquired 100% of the common stock of Hydra in exchange for a convertible preferred share issued to ARSC. The preferred share is convertible into an amount equal to 100.2% of the then outstanding common stock of the Company at the time of conversion, which is at the sole discretion of ARSC. This gives ARSC an effective 50.1% equity interest in the Company.
● Although an all stock transaction, HFCO was required to have secured sufficient funding commitments to fund Hydra’s production startup before it could close the acquisition. Such commitments were completed just recently.
● Frank Neukomm, HFCO’s Chief Executive Officer and Chairman of the Board, and Robert Farr, HFCO’s President, Chief Operations Officer and Director of HFCO are also officers and directors of ARSC.
Hydrogen Future Corp.
(A Development Stage Company)
Notes to Financial Statements
MarchDecember 31, 2014
(Unaudited)
We strongly recommend that you read these financial statements in conjunction withAt the April 28 8-Kend of this quarter, the company therefore had two segments, 1) Fuel cell technology and 2) Contract research and laboratory services. See Note 13 for a fuller understanding ofSegment reporting. See Note 7 for the Company’s new direction.accounting for Goodwill.
The Company’s fiscal year end is September 30.
Development Stage
The Company's financial statements are presented as those of a development stage enterprise. Activities during the development stage primarily include equity based financing and further implementation of the business plan.
Risks and Uncertainties
The Company intends to operate in an industry that is subject to rapid change. The Company’s operations will be subject to significant risk and uncertainties including financial, operational, technological, regulatory and other risks, including the potential risk of business failure.
Use of Estimates
The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.
Such estimates for the periods ended March 31, 20142015 and 2013,2014, and assumptions affect, among others, the following:
● | estimated carrying value, useful lives and impairment of property and equipment; |
| |
● | estimated fair value of derivative liabilities; |
| |
● | estimated valuation allowance for deferred tax assets; and |
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● | estimated fair value of share based payments |
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from estimates.
Cash and Cash Equivalents
The Company considers highly liquid financial instruments purchased with a maturity of three months or less to be cash equivalents. At March 31, 20142015 and September 30, 2013,2014, the Company had no cash equivalents.
At March 31, 2014,2015, the Company had $29.157$9,810 in cash.
The Company minimizes its credit risk associated with cash by periodically evaluating the credit quality of its primary financial institution. The balance at times may exceed federally insured limits. At March 31, 20142015 and September 30, 2013,2014, there were no balances that exceeded the federally insured limit.
Property and Equipment
Property and equipment (including related party purchases) is stated at cost, less accumulated depreciation computed on a straight-line basis over the estimated useful lives. Maintenance and repairs are charged to operations when incurred. Betterments and renewals are capitalized when deemed material. When property and equipment are sold or otherwise disposed of, the asset account and related accumulated depreciation account are relieved, and any gain or loss is included in operations.
Hydrogen Future Corp.
(A Development Stage Company)
Notes to Financial Statements
MarchDecember 31, 2014
(Unaudited)
Property and equipment is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company recognized an impairment of $1,035,027 during the year ended September 30, 2011. See Note 6.
Beneficial Conversion Feature
For conventional convertible debt where the rate of conversion is below market value, the Company records a “beneficial conversion feature” (“BCF”) and related debt discount.
When the Company records a BCF, the relative fair value of the BCF would be recorded as a debt discount against the face amount of the respective debt instrument. The discount would be amortized to interest expense over the life of the debt.
Derivative Liabilities
Fair value accounting requires bifurcation of embedded derivative instruments such as conversion features in convertible debt or equity instruments, and measurement of their fair value for accounting purposes. In determining the appropriate fair value, the Company uses the Black-Scholes option-pricing model. In assessing the convertible debt instruments, management determines if the convertible debt host instrument is conventional convertible debt and further if there is a beneficial conversion feature requiring measurement. If the instrument is not considered conventional convertible debt, the Company will continue its evaluation process of these instruments as derivative financial instruments.
Once determined, derivative liabilities are adjusted to reflect fair value at each reporting period end, with any increase or decrease in the fair value being recorded in results of operations as an adjustment toa Change in fair value of derivatives. In addition, the fair value of freestanding derivative instruments such as warrants, are also valued using the Black-Scholes option-pricing model.
Debt Issue Costs and Debt Discount
The Company paid debt issue costs, and recorded debt discounts in connection with raising funds through the issuance of convertible debt. These costs are amortized over the life of the debt. Debt issue costs are included in general and administrative expense and debt todiscount amortization is included in interest expense. When a conversion of the underlying debt occurs, a proportionate share of the unamortized amounts is immediately expensed.
Original Issue Discount
For certain convertible debt issued, the Company provides the debt holder with an original issue discount (“OID”). An OID is the difference between the original cash proceeds and the amount of the note upon maturity. The Note is originally recorded for the proceeds received. The OID is expensed into interest expense pro-rata over the term of the Note, and upon maturity, the back value of the Note shall equal the proceeds due.
Share-Based Payments
Generally, all forms of share-based payments, including stock option grants, warrants, restricted stock grants and stock appreciation rights are measured at their fair value on the awards’ grant date, based on estimated number of awards that are ultimately expected to vest. Share-based payment awards issued to non-employees for services rendered are recorded at either the fair value of the services rendered or the fair value of the share-based payment, whichever is more readily determinable. The expense resulting from share-based payments are recorded as a component of general and administrative expense. During the six months ended March 31, 2015, there were no payments of this kind.
Hydrogen Future Corp.
(A Development Stage Company)
Notes to Financial Statements
MarchDecember 31, 2014
(Unaudited)
Earnings per Share
Basic earnings (loss) per share is computed by dividing net income (loss) by weighted average number of shares of common stock outstanding during each period. Diluted earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during the period.
Prior to the issuance of the Company’s Preferred Stock during the calendar year ending September 30, 2013, the Company did not have any dilutive securities. As such, a separate computation of diluted earnings (loss) per share was not presented. Commencing with the issuance of the Preferred Stock, the Company now has dilutive securities, and a separate computation of diluted earnings (loss) per share is now presented.
The Company had the following potential common stock equivalents at March 31, 20142015 and September 30, 2013:2014:
| | March 31, 2014 | | | September 30, 2013 | | | December 31, 2014 | | September 30, 2014 | |
| | | | | | | | | | | |
Warrants (1) | | | 14,989 | | | | 14,989 | | | | 63 | | | | 63 | |
Convertible debt (1) | | | 270,376,629 | | | | 212,611 | | | | 87,538,367 | | | 9,931,803 | |
Total common stock equivalents (2) | | | | | | | | | | | 187,538,430 | | | | 9,931,864 | |
(1) | The potential shares for which these instruments can convert into common stock currently exceed the Company’s authorized shares for common stock. The Company has identified aeight and ten debt holders as of March 31, 2015 and warrant holderSeptember 30, 2014, respectively, who cannot exceed ownership in the Company byof 9.99%. TheEach investor is limited to 225,17823,465,762 and 993,180 shares on a fully diluted basis, which is the Company’s maximum exposure at the balance sheet date.March 31, 2015 and September 30, 2014 respectively. |
(2) | There are other warrant holders included in total warrants besides those described in note (1) above. |
Fair Value of Financial Instruments
The carrying amounts of the Company’s short-term financial instruments, other receivables, accounts payable and accrued liabilities, approximate fair value due to the relatively short period to maturity for these instruments.
Foreign Currency Transactions
The Company’s functional currency ishad been the Canadian Dollar. The Company’sdollar and its reporting currency iswas the U.S. Dollar. All transactions which had been initiated in Canadian Dollars arewere translated to U.S. Dollars in accordance with ASC 830-10-20 “Foreign Currency Translation” as follows:
(i) | Monetary assets and liabilities at the rate of exchange in effect at the balance sheet date; |
(ii) | Equity at historical rates; and |
(iii) | Revenue and expense items at the average exchange rate prevailing during the period. |
Adjustments arising from such translations are deferred until realization and are included as a separate component of stockholders’ equity (deficit) as a component of comprehensive income (loss). Therefore, translation adjustments are not included in determining net income (loss) but reported as other comprehensive income (loss).
For foreign currency transactions, the Company translates these amounts toCurrently, the Company’s functional and reporting currency atis the exchange rate effective on the invoice date. If the exchange rate changes between the time of purchaseU.S. dollar, and the time actual payment is made, a foreign exchange transaction gain or loss resultsthere are no more financial currency transactions, which is included in determining net income for the period.require separate accounting.
Hydrogen Future Corp.
(A Development Stage Company)
Notes to Financial Statements
MarchDecember 31, 2014
(Unaudited)
Comprehensive Income (Loss)
Comprehensive income or loss is comprised of net earnings or loss and other comprehensive income or loss, which includes certain changes in equity, excluded from net earnings, primarily foreign currency translation adjustments.
Foreign Country Risks
The Company may be exposed to certain risks as its operations are being conducted in Canada. The Company’s results may be adversely affected by change in the political and social conditions in Canada due to governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversions and remittances abroad, and rates and methods of taxation, among other things. The Company does not believe these risks to be significant, and no such losses have occurred in the current or prior periods because of these factors. However, there can be no assurance those changes in political and other conditions will not result in any adverse impact in future periods.
Recent Accounting Pronouncements
In May 2011, the FASB issued ASU No. 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. The guidance in ASU 2011-04 changes the wording used to describe the requirements in U.S. GAAP for measuring fair value and for disclosing information about fair value measurements, including clarification of the FASB's intent about the application of existing fair value and disclosure requirements and changing a particular principle or requirement for measuring fair value or for disclosing information about fair value measurements. The amendments in this ASU should be applied prospectively and are effective for interim and annual periods beginning after December 15, 2011. Early adoption by public entities is not permitted. The adoption of this guidance is not expected to have a material impact on the Company’s financial position or results of operations.
In June 2011, the FASB issued ASU No. 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income. The guidance in ASU 2011-05 applies to both annual and interim financial statements and eliminates the option for reporting entities to present the components of other comprehensive income as part of the statement of changes in stockholders' equity. This ASU also requires consecutive presentation of the statement of net income and other comprehensive income. Finally, this ASU requires an entity to present reclassification adjustments on the face of the financial statements from other comprehensive income to net income. The amendments in this ASU should be applied retrospectively and are effective for fiscal year, and interim periods within those years, beginning after December 15, 2011. The Company has adopted this guidance in these financial statements.
Note 3 Going Concern
As reflected in the accompanying financial statements, the Company had a net loss of $6,719,976$2,342,821 for the six months ended MarchDecember 31, 2014, and utilized $290,843$211,918 in cash for operations. The Company also has a working capital deficit of $1,633,728$4,702,999 and a deficit accumulated during the development stage of $11,880,115$13,661,672 at March 31, 2014.2015. In addition, the Company is in the development stage and has not yet generated any revenues. These factors raise substantial doubt about the Company’s ability to continue as a going concern.
The ability of the Company to continue its operations is dependent on Management's plans, which include potential asset acquisitions, mergers or business combinations with other entities, further implementation of its business plan and continuing to raise funds through debt or equity raises. The Company will likely rely upon equity financing in order to ensure the continuing existence of the business.
The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.
These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.
Hydrogen Future Corp.
(A Development Stage Company)
Notes to Financial Statements
March 31, 20142015
(Unaudited)
Note 4 Fair Value of Financial Assets and Liabilities
The Company measures assets and liabilities at fair value based on an expected exit price as defined by the authoritative guidance on fair value measurements, which represents the amount that would be received on the sale of an asset or paid to transfer a liability, as the case may be, in an orderly transaction between market participants. As such, fair value may be based on assumptions that market participants would use in pricing an asset or liability. The authoritative guidance on fair value measurements establishes a consistent framework for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level.
The following are the hierarchical levels of inputs to measure fair value:
● | Level 1: Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. |
| |
● | Level 2: Inputs reflect: quoted prices for identical assets or liabilities in markets that are not active; quoted prices for similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the assets or liabilities; or inputs that are derived principally from or corroborated by observable market data by correlation or other means. |
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● | Level 3: Unobservable inputs reflecting the Company’s assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available. |
At March 31, 2013,2015, the fair value of financial instruments measured on a recurring basis includes derivative liabilities, determined based on level two inputs consisting of quoted prices in active markets for identical assets. The carrying amount reported for accounts payable, accrued liabilities, and notes payable approximates fair value because of the short-term maturity of these financial instruments.
The Company has a derivative liability measured at fair market value on a recurring basis. Consequently, the Company had changes in fair value reported in the statements of operations, which were attributable to the change in market value relating to the liability for the threesix months ended March 31, 2012.2015.
The following is the Company’s derivative liability measured at fair value on a recurring basis at:
| | March 31, 2013 | | | September 30, 2013 | | | December 31, 2014 | | September 30, 2014 | |
Level 1 | | $ | - | | | $ | - | | | $ | - | | $ | - | |
Level 2 – Derivative Liability | | | 198,467 | | | | 1,337,315 | | | 1,989,528 | | 243,809 | |
Level 3 | | | - | | | | - | | | | - | | | - | |
Total | | $ | 198,467 | | | $ | 1,337,315 | | | $ | | | $ | 243,809 | |
Note 5 Other Receivables
(A) Note Receivables- Non-current
AsOn the closing of March 31, 2014 and September 30, 2013,the purchase of Hydra, the Company had receivablespaid on behalf of $3,194. Thethe seller ,American Security Research Company, to the State of Nevada $47,005 to execute the transfer. This expense will ultimate be borne by the seller and the Company has recorded a receivable was for amounts funded to a company controlled by our Chief Executive Officer.reflect this.
Hydrogen Future Corp.
(A Development Stage Company)
Notes to Financial Statements
March 31, 20142015
(Unaudited)
Note 6 Property and Equipment
Property and equipment consists of the following:
| | | | | | | | | | |
| | March 31, 2014 | | | September 30, 2013 | | | Estimated Useful Lives | | | March 2015 | | September 2014 | | Estimated Useful Lives | |
| | | | | | | | | | | | | | | | |
Software | | $ | - | | | $ | 1,380,876 | | | | 3 | | | $ | 1,380,876 | | | | 1,380,876 | | | | 3 | |
Leasehold improvements (1) | | | 144,802 | | | | 144,802 | | | | 10 | | | | 144,802 | | | | 144,802 | | | | 10 | |
Lab equipment (2) | | | 106,062 | | | | 106,705 | | | | 10 | | | | 106,705 | | | | 106,705 | | | | 10 | |
Technical equipment (3) | | | 15,824 | | 15,824 | | 5 | |
Office equipment | | | 37,336 | | | | 37,336 | | | | 5 | | | | 40,141 | | | | 37,336 | | | | 5 | |
| | | 288,843 | | | | 1,669,719 | | | | | | | | 1,688,348 | | | | 1,685,543 | | | |
| | | | | | | | | | | | | | | | | | | |
Less: Accumulated depreciation | | | (106,342 | ) | | | (435,125 | ) | | | | | | | (489,148 | ) | | | (469,257 | ) | | | |
Less: Impairment | | | - | | | | (1,035,027 | ) | | | | | | | (1,035,027 | ) | | | (1,035,027 | ) | | | | |
Property and equipment – net | | $ | 182,501 | | | $ | 199,567 | | | | | | | $ | 164,173 | | | | 181,259 | | | | |
(1) See Note 8(B) – related party
(2) See below related to related party purchases
(3) Technical equipment- This represents equipment used to test fuel cell viability
During the year ended September 30, 2011, management evaluated the recoverability of long lived assets by determining whether the carrying value can be recovered through future cash flows. Management determined that it is more likely than not that no future cash flows are to be expected from the use
Note 7 Goodwill
The Company recorded goodwill as a result of its software. Due to these circumstances,business acquisition of Hydra(“Hydra Acquisition”) . Goodwill is recorded when the remaining bookpurchase price paid for an acquisition exceeds the estimated fair value of the asset innet identified tangible assets acquired. In the amountHydra Acquisition , the objective was to expand the Company’s product offerings and customer base by entering into a new line of $1,035,027business. The Company determined the value of the goodwill by analyzing comparable companies with similar product lines. Based upon that analysis, the Company determined that the value of the Goodwill was fully impaired and is included in the statements of operations for the year ended September 30, 2011.$3,353,156 as follows:
The leasehold improvements were completed and placed into service in July 2011.Hydrogen Future Corp.
(A Development Stage Company)
Notes to Financial Statements
March 31, 2015
(Unaudited)
Assets acquired: | | | |
Cash | | $ | 402 | |
Other receivables | | | 3,529 | |
Total | | $ | 3,931 | |
Liabilities acquired: | | | | |
Promissory note payable | | $ | 984,008 | |
Accrued interest payable | | | 235,972 | |
Other current liabilities | | | 87,187 | |
Additional paid-in capital | | | 2,049,920 | |
Total | | $ | 3,357,087 | |
Goodwill | | $ | 3,353,156 | |
The Company purchased $104,122 of lab equipment from an entity controlled bytests goodwill for impairment on a quarterly basis. At March 31, 2015, the Company’s former Chief Executive Officer during fiscal years ended 2010 and 2011 as follows:
2010 | | $ | 79,765 | |
2011 | | | 24,357 | |
| | $ | 104,122 | |
company determined that there was no impairment.
See Note 8 for software acquired from a related party.
Note 7 Notes Payable
(A) Related Party
The following is a summary of the Company’s related party liabilities:
| | March 31, 2013 | | | September 30, 2013 | | | March 31, 2015 | | | September 30, 2013 | |
Notes payable (1) | | $ | 20,915 | | | $ | 20,915 | | | $ | 20,915 | | | $ | 20,915 | |
Advances (2) | | | 7,226 | | | | 7,226 | | | | 7,226 | | | | 7,226 | |
Less: payments | | | (968 | ) | | | (968 | ) | | | (968 | ) | | | (968 | ) |
Total related party liabilities | | $ | 27,173 | | | $ | 27,173 | | | $ | 27,173 | | | $ | 27,173 | |
(1) The note is non-interest bearing, unsecured, and due on demand.
(2) The advances are non-interest bearing, unsecured, and due on demand.
(B) Convertible debt-net
The following is a summary of the Company's outstanding convertible debt as of March 31, 2015:
Hydrogen Future Corp.
(A Development Stage Company)
Notes to Financial Statements
March 31, 20142015
(Unaudited)
(B) Convertible Debt – Secured – Derivative Liabilities
Fife Note
On February 15, 2011, the Company issued convertible notes, totaling $300,000, to John Fife with the following provisions:
● | Default interest rate of 12%; |
● | Notes are due 48 months from the issuance date of February 23, 2011; |
● | Conversion rates equal to 70% or 80% of the market price on date of conversion by applying a specified formula that utilizes the average of the 3 lowest quoted closing prices 20 days immediately preceding the conversion date, and then takes the higher of the average 3 lowest closing prices or $0.12 floor price; and |
● | Secured by the Chief Executive Officer’s 15,000,000 shares of the Company common stock. |
Summary of Notes Issued
The investor is entitled at its option to convert all or part of the principal and accrued interest into shares of the Company’s common stock at a conversion price (as discussed above. The Company classified the embedded conversion feature as a derivative liability due to management’s assessment that the Company may not have sufficient authorized number of shares of common stock required to net-share settle.
On February 23, 2011, the Company entered into a secured convertible promissory note between the Company and a third party (the “Lender”). The note balance totaled $300,000. The Lender expects to contribute funds in tranches, the first tranche being equal to $300,000, and an additional ten tranches equal to $200,000 each commencing on October 23, 2011, and continuing each subsequent month for ten months. No additional draw downs occurred during the year ended September 30, 2011. In January 2012, the Company received $22,000 from a lender for an additional investment, under the same terms above, which is convertible to shares pursuant to the terms described below. See Note 9(A) related to conversions of this $300,000 note.
The number of shares of common stock to be issued upon conversion of each tranche shall be determined by dividing (a) the conversion amount by (b) the higher of (i) the Market Price or (ii) the Floor Price. Where “Market Price” is defined as 80% of the average of the closing bid price for the three (3) days with the lowest closing bids during the twenty trading days immediately preceding the conversion date, provided, however, that if the market prices fall below $0.05 per share of common stock the conversion factor shall be reduced by 10 percentage points. The “Floor Price” is defined as $.012. The trading data used to compute the closing bid shall be as reported by Bloomberg, LP or if such information is not then being reported by Bloomberg, then as reported by such other data information sources as may be selected by the Lender.
The note also contains language that removes the $0.12 floor if certain “triggering events” occur during the life of the note. Since the floor price can be removed upon any one of these events occurring, the conversion feature of this note has two elements: normal conversion and conversion upon a triggering event.
Upon each occurrence of any of the following triggering events , (a) the conversion factor shall be reduced by 10 percent points (i.e., if the conversion factor were 80% immediately prior to the occurrence of the triggering event, it shall be reduced to 70% upon the occurrence of a triggering event), (b) the conversion price shall be computed without regard to the Floor Price, and (c) this note shall accrue interest at the rate of 1% per month, whether before or after judgment; provided, however, that (1) in no event shall the triggering effects be applied more than two times, and (2) notwithstanding any provisions to the contrary herein, in no event shall the applicable interest rate at any time exceed the maximum interest rate allowed under applicable law:
On October 4, 2012, Mr. Fife foreclosed on his note to us because we were in default. According to the terms of the indenture, Mr. Fife was issued 15 million shares to forestall on his claim against the firm. At the time, the common stock of the Company was trading at $.0039. Therefore, a corresponding expense of $58,500 was recorded at that time and included in General and Administrative Expense.
As of March 31, 2014, as a result of the triggering events (a) and (b), the Company computes the exercise price related to convertible debt, without regard to the floor price.2015)
The normal conversion resulted in a debt discount under ASC 470-25-8 since the calculated market price as of the date of the note was higher ($0.145) than the conversion floor of $0.12.
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Date of Issuance | | Original Amount | | | Conversions through March 31, 2015 | | | Accrued Original Issue Discount, if any | | | Gross Amount outstanding at March 31, 2015 | | | Remaining Discount | | | Net Amount | | | Type of Note | |
| | | | | | | | | | | | | | | | | | | | | |
2-Apr-13 | | | 5,000 | | | | 0 | | | | | | | 5,000 | | | | 0 | | | | 5,000 | | | | a | |
31-May-13 | | | 5,500 | | | | 0 | | | | | | | 5,500 | | | | 460 | | | | 5,040 | | | | a | |
31-May-13 | | | 5,500 | | | | 0 | | | | | | | 5,500 | | | | 0 | | | | 5,500 | | | | a | |
23-Feb-11 | | | 300,000 | | | | 300,000 | | | | | | | 0 | | | | 0 | | | | 0 | | | | a | |
1-Oct-12 | | | 165,000 | | | | 165,000 | | | | | | | 0 | | | | 0 | | | | 0 | | | | b | |
1-Aug-13 | | | 25,000 | | | | 14,400 | | | | | | | 10,600 | | | | 0 | | | | 10,600 | | | | b | |
1-Sep-13 | | | 25,000 | | | | 25,000 | | | | | | | 0 | | | | 0 | | | | 0 | | | | b | |
1-Oct-13 | | | 25,000 | | | | 25,000 | | | | | | | 0 | | | | 0 | | | | 0 | | | | b | |
1-Nov-13 | | | 25,000 | | | | 0 | | | | | | | 25,000 | | | | 0 | | | | 25,000 | | | | b | |
1-Dec-13 | | | 25,000 | | | | 0 | | | | | | | 25,000 | | | | 0 | | | | 25,000 | | | | b | |
1-Jan-14 | | | 25,000 | | | | 0 | | | | | | | 25,000 | | | | 0 | | | | 25,000 | | | | b | |
1-Feb-14 | | | 25,000 | | | | 25,000 | | | | | | | 0 | | | | 0 | | | | 0 | | | | b | |
1-Mar-14 | | | 25,000 | | | | 7,527 | | | | | | | 17,473 | | | | 0 | | | | 17,473 | | | | b | |
1-Aug-13 | | | 12,500 | | | | 40,000 | | | | 27,500 | | | | 0 | | | | 0 | | | | 0 | | | | a | |
27-Aug-13 | | | 12,500 | | | | | | | | 1,250 | | | | 13,750 | | | | 0 | | | | 13,750 | | | | a | |
10-Oct-13 | | | 15,000 | | | | | | | | 1,500 | | | | 16,500 | | | | 0 | | | | 16,500 | | | | a | |
19-Nov-13 | | | 10,000 | | | | | | | | 1,000 | | | | 11,000 | | | | 0 | | | | 11,000 | | | | a | |
27-Sep-13 | | | 25,000 | | | | 0 | | | | | | | | 25,000 | | | | 0 | | | | 25,000 | | | | a | |
13-Dec-13 | | | 20,000 | | | | 11,470 | | | | | | | | 8,530 | | | | 0 | | | | 8,530 | | | | a | |
27-Feb-14 | | | 20,000 | | | | 20,000 | | | | | | | | 0 | | | | 0 | | | | 0 | | | | a | |
17-Mar-14 | | | 25,000 | | | | 2,868 | | | | 1,298 | | | | 23,430 | | | | 12,021 | | | | 11,409 | | | | a | |
2-Apr-14 | | | 30,000 | | | | 32,500 | | | | 2,500 | | | | 0 | | | | 363 | | | | (363 | ) | | | a | |
21-Mar-14 | | | 30,000 | | | | 8,725 | | | | | | | | 21,275 | | | | 0 | | | | 21,275 | | | | a | |
14-Apr-14 | | | 35,000 | | | | 0 | | | | | | | | 35,000 | | | | 0 | | | | 35,000 | | | | a | |
5-May-14 | | | 50,000 | | | | 3,513 | | | | | | | | 46,487 | | | | 4,167 | | | | 42,320 | | | | a | |
21-May-14 | | | 35,000 | | | | 0 | | | | | | | | 35,000 | | | | 0 | | | | 35,000 | | | | a | |
2-Jun-14 | | | 27,500 | | | | 21,015 | | | | | | | | 6,485 | | | | 0 | | | | 6,485 | | | | a | |
23-Jun-14 | | | 27,500 | | | | 0 | | | | | | | | 27,500 | | | | 0 | | | | 27,500 | | | | a | |
1-Apr-14 | | | 25,000 | | | | 0 | | | | | | | | 25,000 | | | | 0 | | | | 25,000 | | | | b | |
1-May-14 | | | 25,000 | | | | 0 | | | | | | | | 25,000 | | | | 0 | | | | 25,000 | | | | b | |
1-Jun-14 | | | 25,000 | | | | 0 | | | | | | | | 25,000 | | | | 0 | | | | 25,000 | | | | b | |
1-Jul-14 | | | 25,000 | | | | 0 | | | | | | | | 25,000 | | | | 0 | | | | 25,000 | | | | b | |
1-Aug-14 | | | 25,000 | | | | 0 | | | | | | | | 25,000 | | | | 0 | | | | 25,000 | | | | b | |
1-Sep-14 | | | 25,000 | | | | 0 | | | | | | | | 25,000 | | | | 0 | | | | 25,000 | | | | b | |
7-Jul-14 | | | 37,500 | | | | 5,267 | | | | | | | | 32,233 | | | | 0 | | | | 32,233 | | | | a | |
14-Jul-14 | | | 25,000 | | | | 0 | | | | | | | | 25,000 | | | | 0 | | | | 25,000 | | | | a | |
22-Aug-14 | | | 27,500 | | | | 0 | | | | | | | | 27,500 | | | | 0 | | | | 27,500 | | | | a | |
At the balance sheet date, $115,450 of the debt has been converted leaving a principal balance of $184,550.
Hydrogen Future Corp.
(A Development Stage Company)
Notes to Financial Statements
March 31, 2015
(Unaudited)
26-Aug-14 | | | 10,000 | | | | 0 | | | | | | | | 10,000 | | | | 5,589 | | | | 4,411 | | | | a | |
26-Aug-14 | | | 10,000 | | | | 10,000 | | | | | | | | 0 | | | | 5,589 | | | | (5,589 | ) | | | a | |
8-Sep-14 | | | 10,000 | | | | 1,680 | | | | | | | | 8,320 | | | | 0 | | | | 8,320 | | | | a | |
15-Sep-14 | | | 20,000 | | | | 0 | | | | | | | | 20,000 | | | | 1,058 | | | | 18,942 | | | | a | |
15-Sep-14 | | | 10,000 | | | | 0 | | | | | | | | 10,000 | | | | 5,826 | | | | 4,174 | | | | a | |
19-Sep-14 | | | 10,000 | | | | 0 | | | | | | | | 10,000 | | | | 5,876 | | | | 4,124 | | | | a | |
1-Oct-14 | | | 25,000 | | | | 0 | | | | | | | | 25,000 | | | | 137 | | | | 24,863 | | | | b | |
1-Nov-14 | | | 25,000 | | | | 0 | | | | | | | | 25,000 | | | | 4,282 | | | | 20,718 | | | | b | |
1-Dec-14 | | | 25,000 | | | | 0 | | | | | | | | 25,000 | | | | 8,516 | | | | 16,484 | | | | b | |
1-Jan-15 | | | 25,000 | | | | 0 | | | | | | | | 25,000 | | | | 12,707 | | | | 12,293 | | | | b | |
1-Feb-15 | | | 25,000 | | | | 0 | | | | | | | | 25,000 | | | | 16,989 | | | | 8,011 | | | | b | |
6-Feb-15 | | | 14,500 | | | | 0 | | | | | | | | 14,500 | | | | 11,755 | | | | 2,745 | | | | b | |
1-Mar-15 | | | 25,000 | | | | 0 | | | | | | | | 25,000 | | | | 20,924 | | | | 4,076 | | | | a | |
3-Mar-15 | | | 29,500 | | | | 0 | | | | | | | | 29,500 | | | | 26,029 | | | | 3,471 | | | | a | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Totals | | | 1,560,000 | | | | 718,965 | | | | 35,048 | | | | 876,083 | | | | 142,289 | | | | 733,793 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Legend: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
a- Note for cash | | | | | | | | | | | | | | | | | | | | | | | | | |
b- Note for consulting services | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
The following is a summary of the notes issued for cash and issued for consulting services: | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Original Amount | | | Conversions through March 31, 2015 | | | Accrued Original Issue Discount, if any | | | | Gross Amount outstanding at March 31, 2015 | | Remaining Discount | | Net Amount | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Notes for Cash | | | 905,500 | | | | 457,038 | | | | 35,048 | | | | 429,010 | | | | 40,949 | | | | 388,061 | | | | | |
Notes for Consulting Services | | | 654,500 | | | | 261,927 | | | | 0 | | | | 447,073 | | | | 101,340 | | | | 345,732 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Totals | | | 1,560,000 | | | | 718,965 | | | | 35,048 | | | | 876,083 | | | | 142,289 | | | | 733,793 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Hydrogen Future Corp.
(A Development Stage Company)
Notes to Financial Statements
March 31, 20142015
(Unaudited)
Lucosky Brookman LLP Note(C) Notes Acquired in Hydra Acquisition
Effective on January 10, 2012,As a result of the Hydra Acquisition, the Company issued to Lucosky Brookman LLP (“Lucosky”) a convertible promissory note ( the “Lucosky Note”) for legal services provided since February 1, 2011 of $53,727. The Lucosky Note bears interest at twelve percent (12%) per annum and has a term of six months. Should the Lucosky Note not be paid by the Maturity Date,acquired an event of Default occurs and the interest rate becomes eighteen percent (18%) per annum. Shares of Common Stock to be issued upon conversion of each tranche shall be determined by dividing (a) the conversion amount by (b) the Market Price. The “Market Price” is definedadditional $984,008 in debt as 50% of the average of the closing price for the five (5) days immediately preceding the conversion date.follows
Investor | | Amount | | | Interest Rate | |
Golden State Equity Investors | | $ | 350,000 | | | | 7.5 | % |
St. George Investments, LLC | | $ | 415,000 | | | | 7.75 | % |
Bullivant Houser Bailey LLP | | $ | 219,008 | | | | -0- | |
During the Fiscal fourth quarter, $2,500 of the Bullivant Houser Bailer LLP Note was retired. Therefore, the remaining balance at March 31, 2015 is $981,508
All of the notes are currently past due and are payable on demand
(D) Debt Issue Costs
Deferred Issue costs relate to additional expenses associated with a financing that are amortized into expense over the length of the instrument. As of March 31, 2015, the value of these debt issue costs is $1,020 as follows:
| | | | | | | | | | | Days Remaining as of March 31, 2015 | | | Percentage of Days as of March 31, 2015 | | | Unamortized Balance | |
| | | | | | | | | | | | | | | | | | |
| | $ | 2,500 | | 2-Apr-14 | | 7-Jan-15 | | | 280 | | | | 0 | | | | 0 | % | | $ | 0 | |
| | | 7,375 | | 5-May-14 | | 30-Apr-15 | | | 360 | | | | 30 | | | | 8 | % | | | 615 | |
| | | 5,500 | | 21-May-14 | | 14-Jan-15 | | | 238 | | | | 0 | | | | 0 | % | | | 0 | |
| | | 2,500 | | 2-Jun-14 | | 14-Jan-15 | | | 226 | | | | 0 | | | | 0 | % | | | 0 | |
| | | 2,500 | | 23-Jun-14 | | 14-Jan-15 | | | 205 | | | | 0 | | | | 0 | % | | | 0 | |
| | | 12,500 | | 7-Jul-14 | | 8-Jan-15 | | | 185 | | | | 0 | | | | 0 | % | | | 0 | |
| | | 2,500 | | 14-Jul-14 | | 14-Jan-15 | | | 184 | | | | 0 | | | | 0 | % | | | 0 | |
| | | 2,500 | | 22-Aug-14 | | 15-Feb-15 | | | 177 | | | | 0 | | | | 0 | % | | | 0 | |
| | | 500 | | 6-Feb-15 | | 13-Nov-15 | | | 280 | | | | 227 | | | | 81 | % | | | 405 | |
Total | | $ | 38,375 | | | | | | | | | | | | | | | | | | $ | 1,020 | |
For the six months ended March 31, 2015 and March 31, 2014, the remaining blanceamortization expense of the Lucosky note was converted,debt issue costs were $19,768 and no principal balance remains$7,156, respectively.
Consulting Notes
Starting in Fiscal 2013, the Company incurred a liability to a consultant for $165,000. $165,000 of the Notes bear interest at twelve percent (12%) per annum and matures on June 30, 2014. Shares of Common Stock to be issued upon conversion of each tranche shall be determined by dividing (a) the conversion amount by (b) the Market Price. The “Market Price” is defined as 50% of the low closing bid price for the five (5) days immediately preceding the conversion date.
As of the Balance sheet date, $118,203 of principal on this note has been converted into common shares, leaving a remaining balance of $46,797.
The Company signed a new consulting agreement in August 2013 at a rate of $25,000 per month. Since that time, the Company issued notes totaling $200,000 to the consultant. Shares of Common Stock to be issued upon conversion of each tranche shall be determined by dividing (a) the conversion amount by (b) the Market Price. The “Market Price” is defined as 50% of the low closing bid price for the thirty (30) days immediately preceding the conversion date. As of the Balance sheet date, $39,400 of principal has been converted leaving a balance of $160,600
St. George Notes
On August 27, 2013, St. George Investments LLC (“St. George”) advanced the Company $12,500 (“St. George Note”). The St. George Note has a one year term, an interest rate of ten percent and a ten percent original issue discount (“OID”). An OID represents the difference between the amount received and the face value of the note. The St. George Note has a face value of $13,750, and the OID will be amortized into expense pro-rata over the term of the Note. Shares of Common Stock to be issued upon conversion of each tranche shall be determined by dividing (a) the conversion amount by (b) the Market Price. The “Market Price” is defined as 60% of the average of the two (2) low closing bid prices for the ten (10) days immediately preceding the conversion date. The full principal balance is outstanding.
On October 10, 2013, St. George Investments LLC (“St. George”) advanced the Company $15,000 (“St. George Note”). The St. George Note has a one year term, an interest rate of ten percent and a ten percent original issue discount (“OID”). An OID represents the difference between the amount received and the face value of the note. The St. George Note has a face value of $13,750, and the OID will be amortized into expense pro-rata over the term of the Note. Shares of Common Stock to be issued upon conversion of each tranche shall be determined by dividing (a) the conversion amount by (b) the Market Price. The “Market Price” is defined as 60% of the average of the two (2) low closing bid prices for the ten (10) days immediately preceding the conversion date. The full principal balance is outstanding.
On November 19, 2013, St. George Investments LLC (“St. George”) advanced the Company $10,000 (“St. George Note”). The St. George Note has a one year term, an interest rate of ten percent and a ten percent original issue discount (“OID”). An OID represents the difference between the amount received and the face value of the note. The St. George Note has a face value of $13,750, and the OID will be amortized into expense pro-rata over the term of the Note. Shares of Common Stock to be issued upon conversion of each tranche shall be determined by dividing (a) the conversion amount by (b) the Market Price. The “Market Price” is defined as 60% of the average of the two (2) low closing bid prices for the ten (10) days immediately preceding the conversion date. The full principal balance is outstanding.
Hydrogen Future Corp.
(A Development Stage Company)
Notes to Financial Statements
March 31, 20142015
(Unaudited)
Other Notes
The Company has received another $186,000 in proceeds from multiple investors. Interest on the notes varies from 0% to ten percent. Shares of Common Stock to be issued upon conversion of each tranche shall be determined by dividing (a) the conversion amount by (b) the Market Price.(E) Debt Discount
Market price is defined as follows:
Debt Amount | | Discount | | Conversion Mechanism |
$20,000 | | 51% | | low trade price over prior 30 days |
| | | | |
$25,000 | | 60% | | low trade price over prior 25 days |
| | | | |
$141,000 | | 50% | | low bid price over prior 30 days |
(C) Debt Issue Costs
In connection with the issuance of the $300,000 note discussed above, the Company incurred debt issue costs as follows:
● | 8% cash – which is equivalent to $24,000, and |
● | 8% warrants – having a fair value of $26,901, which was computed as follows; |
| Commitment Date |
Expected dividends | 0% |
Expected volatility | 180% |
Expected term: conversion feature | 2 years |
Risk free interest rate | 1.73% |
In January 2012, we raised an additional $22,000 as discussed above, and the Company incurred debt issue costs as follows:
●
| 8% cash – which is equivalent to $1,760, and |
●
| 8% warrants – having a fair value of $154, which was computed as follows; |
| Commitment Date |
Expected dividends | 0% |
Expected volatility | 364% |
Expected term: conversion feature | 2 years |
Risk free interest rate | 0.65% |
The debt issue costs have been capitalized and are being amortized over the life of the note.
Debt issue costs paid, September 30, 2011 | | $ | 50,901 | |
Amortization of debt issue costs, September 30, 2011 | | | (11,833 | ) |
Amortization of debt issue costs, September 30, 2012 | | | (9,833 | ) |
Amortization of debt issue costs, September 30, 2013 | | | (13,199 | ) |
Amortization of debt issue costs, March 31, 2014 | | | (7,156 | ) |
Debt issue costs - net | | $ | 8,828 | |
Hydrogen Future Corp.
(A Development Stage Company)
Notes to Financial Statements
March 31, 2014
(Unaudited)
During the six months and three months ended March 31, 2015, the Company recorded debt discounts of $194,000 and $119,000, respectively.
During the six months and three months ended March 31, 2014, and 2013 , the companyCompany recorded debt discounts of $320,000$170,000 and $300,000 respectively$75,000 respectively.
The debt discount recorded in the current quarter pertains to convertible debt containing embedded conversion options that are required to bifurcated and reported at fair value.
During the six and three months ended March 31, 2013,2015, the Company amortized $225,023 $279,356 and $152,780 in debt discount.
Note 8- Liability for Common Stock to be Issued
On March 28, 2014, a debt conversion for 8,350,000 shares was filed. The shares were not issued until subsequent to the balance sheet. The price of the stock on that date was $.05, resulting in a liability of $41,750. The shares were issued in April, and the liability was extinguished.discount, respectively.
Note 9 Stockholders’ Equity (Deficit)
(A) Common Stock
Stock Issued in 2014Six months ended March 31, 2015
During the six months ended March 31, 2014,2015, the Company issued 154,287,985 225,745,933 shares of common stock for the conversion of shares$63,088 of common stock.debt, $31,587 of accrued interest and $10,154 of expenses.
On January 27, 2014 the Company issued 100,000,000 shares of common stock to its management team for compensation in lieu of cash.
Stock Issued in 2013
On February 19, 2013, the Company issued 5,954, 252 shares for the conversion of $15,000 of debt plus accrued interest.
On March 31, 2012, the Company issued 15,000,000 shares of common stock to John Fife for the default on his Note. See Footnote 6Fiscal year ended September 30, 2014
The Company issued 32,061,360 shares for compensation to Directors and Officers
Stock issued in 2012
On October 2, 2011,8,910,823 (on a lender converted $50,000 pertaining to a note it held with an original principal of $300,000, for 3,000,000split-adjusted basis) shares of common stock ($0.0166667/share). The quantity of shares issued is based uponduring the formula described above pertaining to the effect of the triggering event (see Note 7(B)).year as follows:
Shares issued for conversion of debt accrued interest and related expenses associated with conversions | | | 7,867,943 | |
| | | | |
Shares issued to Management for compensation | | | 402,880 | |
| | | | |
Shares issued for settlement of a previously unrecorded liability for equipment purchase | | | 120,000 | |
| | | | |
Shares issued for consulting services | | | 200,000 | |
| | | | |
Sales of common shares | | | 320,000 | |
Hydrogen Future Corp.
(A Development Stage Company)
Notes to Financial Statements
March 31, 20142015
(Unaudited)
On January 3, 2012, the Company issued 2,307,692 shares of common stock for $30,000 ($0.013/share) for services rendered.
On March 4, 2012, a lender converted $21,494 pertaining to a note it held with an original principal of $300,000, for 3,800,000 shares of common stock ($0.00566/share). The quantity of shares issued is based upon the formula described above pertaining to the effect of the triggering event (see Note 7(B)).
Stock issued 2011
During November and December 2010, the Company issued 312,500 shares of common stock for $100,000 ($0.32/share).
On June 14, 2011, the Company issued 75,000 shares of common stock for $15,000 ($0.20/share).
On September 2, 2011, a lender converted $24,990 pertaining to a note it held with an original principal of $300,000, for 1,120,000 shares of common stock ($0.022313/share). The quantity of shares issued is based upon the formula described above pertaining to the effect of the triggering event (see Note 7(B)).
Stock issued in 2010
On March 9, 2010, the Company’s board of directors authorized a 10-for-1 forward split of its common stock effective April 8, 2010. Each stockholder of record on April 7, 2010 received ten new shares of the Company’s $0.001 par value common stock for every one old share outstanding. The effects of the split have been retroactively applied to all periods presented in the accompanying financial statements.
On June 3, 2010, the Company issued 250,000 shares of common stock for $162,500 ($0.65/share).
On July 20, 2010, the Company issued 1,569,177 shares of common stock, having a fair value of $1,380,876 ($0.88/share), based upon the closing trading price, to acquire software from an affiliate of the Company’s Chief Executive Officer.
On July 30, 2010, the Company issued 125,000 shares of common stock for $100,000 ($0.80/share). In addition, the stockholder received a 2-year warrant for 125,000 shares with an exercise price of $1.20.
On August 18, 2010, the Company issued 125,000 shares of common stock for $100,000 ($0.80/share). In addition, the stockholder received a 2-year warrant for 125,000 shares with an exercise price of $1.20.
On August 23, 2010, the Company issued 20,000 shares of common stock to a consultant, having a fair value of $16,000 ($0.80/share), based upon the closing trading price. At September 30, 2010, the Company expensed this stock issuance as a component of general and administrative expense.
On September 17, 2010, the Company issued 150,000 shares of common stock to a consultant, having a fair value of $135,000 ($0.90/share), based upon the closing trading price. At September 30, 2010, the Company expensed this stock issuance as a component of general and administrative expense.
Stock issued in 2007
During 2007, the Company issued 20,500,000 shares of common stock for $82,000 ($0.004/share).
Hydrogen Future Corp.
(A Development Stage Company)
Notes to Financial Statements
March 31, 2014
(Unaudited)
Stock Issued in 2006
On June 21, 2006 (Inception), the Company issued 10,000,000 shares of common stock for $5,000 ($0.0005/share) to directors and officers of the Company.
On August 1, 2006, the Company issued 15,000,000 shares of common stock for $15,000 ($0.0001/share) to directors and officers of the Company.
(B) Stock Warrants
All warrants issued by the Company have expired or were cancelled except for those issued to John Fife, which are discussed in Note 7 (B). After adjustment for the split, Mr. Fife owned 14,98963 warrants which are convertible at $100$25,000 per share. These warrants expire on February 15, 2015 and have a derivative liability associated with them of $42.2015.
(C) Authorized Shares
On September 5, 2013, the Company held a special meeting of shareholders (the “Meeting.”). At the Meeting, shareholders approved that the aggregate number of shares that the Corporation will have the authority to issue is Ten Billion Two hundrerd million (10,200,000,000), of which Ten Billion (10,000,00,000) shall be common stock, with a $.001 par value, and Two hundred million (200,000,000) shares will be preferred stock, with a par value of $.001. Prior to the Meeting, the Company was authorized to issue up to Two hundred million (200,000,000) shares, of which One hundred million (100,00,000) shall be common stock, with a $.001 par value, and One hundred million (100,000,000) shares will be preferred stock with a par value of $.001
(D) Preferred Stock
On June 21, 2013 (“Grant Date”), the Company granted One hundred million (100,000,000) shares of Series A Preferred stock (the “Series A”), with a par value of $.001. Fifty million (50,000,000) of the Series A were issued to Frank Neukomm, its Chief Executive Officer, and Robert Farr, its Chief Operating Officer. The shares are convertible into common stock on a 1:1 basis and do not carry any dividend. On the Grant Date, the price of the company’s common stock was $.0031. As such, the Company recorded $310,000 of compensation expense under General and Administrative Expenses.
On April 26, 2014, the Company issued one share of Series B Preferred Stock for the Hydra Fuel Cell Acquisition, with a par value of $.001 to American Security Research Corporation. The share is convertible into common stock equivalent to 50.1% ownership of the common stock of the Company.
(E) Reverse Split
Effective January 12, 2015, there was a reverse stock split of our outstanding common stock on the basis of one for one two hundred fifty (1:250).
Note 10 Commitments and Contingencies
(A) Contingencies
From time to time, the Company may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. The Company is currently not aware of any such legal proceedings or claims that they believe will have, individually or in the aggregate, a material adverse affect on its business, financial condition or operating results.
(B) Facility Lease – Related Party
The Company had subleased office space from a company controlled by the Company’s former Chief Executive. This lease has expired and the company no longer leases this space.
Rent expense for the Six months ended March 31, 2014 and 2013 was $-0-.
(C) Equipment Lease
The Company had agreed to rent equipment from its former Chief Executive.
Rental equipment expense for the six months ended March 31, 2014 and 2013 was $-0- and $-0-, respectively.
Note 11 Derivative Liabilities
The Company identified conversion features embedded within convertible debt securities as defined in Note 7.8. The Company has determined that the features associated with the embedded conversion option should be accounted for at fair value as a derivative liability.
Hydrogen Future Corp.
(A Development Stage Company)
Notes to Financial Statements
March 31, 20142015
(Unaudited)
As a result of the application of ASC No. 815, the fair value of the conversion feature is summarized as follows:
Derivative liability balance at September 30, 2013 | | $ | 1,337,315 | |
Derivative liability Fair value at the commitment date for convertible notes issued | | | | |
Fair value mark to market adjustment – March 31, 2014 | | | 2,119,601 | |
Derivative liability associated with new issuances through March 31, 2012 | | | (3,258,449 | ) |
| | | | |
Derivative liability balance at March 31, 2014 | | $ | 198,467 | |
Derivative liability balance at September 30, 2014 | | | | |
Derivative liability Fair value at the commitment date for convertible notes issued | | $ | 243,809 | |
Fair value mark to market adjustment – March 31, 2015 | | | 1,423,351 | |
Derivative liability associated with new issuances through March 31, 2015 | | | 241,041 | |
Face value of debt issued | | | 119,000 | |
Elimination of derivative liability upon conversion of debt | | | (37,672) | |
Derivative liability balance at March 31, 2015 | | $ | 1,989,528 | |
The Company recorded the derivative liability to debt discount to the extent of the gross proceeds raised, and expensed immediately the remaining value of the derivative as it exceeded the gross proceeds of the note. The Company recorded a derivative expense of $1,067,424 and $2,119,601$241,041 for the three months and ninesix months ended March 31, 2014, respectively.2015.
Note 12 Other Related Party Transactions
The Company accrues consulting and rental fees to its former Chief Executive Officer as follows:
Balance at September 30, 20132014 and March 31, 20142015 | | $ | 415,719 | |
The consulting and rental fees are components of general and administrative expenses.
Note 13 Segment Reporting
The Company operates in two operating segments which are consistent with its internal organization. The major segments are Fuel Cell technology and Contract Research and Laboratory services. Where applicable, “Unallocated” represents items necessary to reconcile to the consolidated financial statements, which generally include corporate activity at the parent level and eliminations.
(A Development Stage Company)
Notes to Financial Statements
March 31, 2015
(Unaudited)
The Company evaluates performance of individual operating segments based on operating income (loss). On a consolidated basis, this amount represents total net loss as shown in the consolidated statement of operations. Reconciling items represent executive compensation costs that are not allocated to the operating segments. Such costs have not been allocated from the parent to the subsidiaries.
| | Three Months Ended March 31, 2015 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | Fuel Cell Technology | | | Contracted Researchand Laboratory Services | | | | | | Total | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
Revenues | | $ | - | | | $ | - | | | $ | - | | | $ | - | |
| | | | | | | | | | | | | | | | |
Cost of Revenues | | | - | | | | - | | | | - | | | | - | |
| | | | | | | | | | | | | | | | |
Gross Profits | | | - | | | | - | | | | - | | | | - | |
Operating Expenses | | | | | | | | | | | | | | #REF! | |
Selling General and Administrative Expenses | | | 5,592 | | | $ | 8,533 | | | $ | 120,050 | | | | 134,175 | |
| | | | | | | | | | | | | | | | |
Total Operating Expenses | | | 5,592 | | | | 8,533 | | | | 120,050 | | | | 134,175 | |
| | | | | | | | | | | | | | | | |
Operating Income (Loss) | | | (5,592 | ) | | | (8,533 | ) | | | (120,050 | ) | | | (134,175 | ) |
| | | | | | | | | | | | | | | | |
Other Income (Expense) | | | | | | | | | | | | | | | | |
Interest expense | | | - | | | | - | | | | (156,055 | ) | | | (156,055 | ) |
| | | | | | | | | | | | | | | | |
Net loss | | | (5,592 | ) | | | (8,533 | ) | | | (1,631,438 | ) | | | (1,645,563 | ) |
| | | | | | | | | | | | | | | | |
Total Assets | | | 3,402,192 | | | | 164,173 | | | | 10,830 | | | | 3,577,195 | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | Three months Ended March 31, 2014 | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | Fuel Cell Technology | | | Contracted Research and Laboratory Services | | | | | | Total | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Revenues | | $ | - | | | $ | - | | | $ | - | | | $ | - | |
| | | | | | | | | | | | | | | | |
Cost of Revenues | | | - | | | | - | | | | - | | | | - | |
| | | | | | | | | | | | | | | | |
Gross Profits | | | - | | | | - | | | | - | | | | - | |
Operating Expenses | | | | | | | | | | | | | | #REF! | |
Selling General and Administrative Expenses | | | $ | 8,533 | | | $ | 5,340,921 | | | | 5,349,454 | |
| | | | | | | | | | | | | | | | |
Total Operating Expenses | | | - | | | | 8,533 | | | | 5,340,921 | | | | 5,349,454 | |
| | | | | | | | | | | | | | | | |
Operating Income (Loss) | | | - | | | | (8,533 | ) | | | (5,340,921 | ) | | | (5,349,454 | ) |
| | | | | | | | | | | | | | | | |
Other Income (Expense) | | | | | | | | | | | | | | | | |
Interest expense | | | - | | | | - | | | | (176,507 | ) | | | (176,507 | ) |
| | | | | | | | | | | | | | | | |
Net income (loss) | | | - | | | | (8,533 | ) | | | (7,492,060 | ) | | | (7,500,593 | ) |
| | | | | | | | | | | | | | | | |
Total Assets | | | - | | | | 214,852 | | | | 8,828 | | | | 223,680 | |
(A Development Stage Company)
Notes to Financial Statements
March 31, 2015
(Unaudited)
| | Six Months Ended March 31, 2015 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | Fuel Cell Technology | | | Contracted Research and Laboratory Services | | | | | | Total | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
Revenues | | $ | - | | | $ | - | | | $ | - | | | $ | - | |
| | | | | | | | | | | | | | | | |
Cost of Revenues | | | - | | | | - | | | | - | | | | - | |
| | | | | | | | | | | | | | | | |
Gross Profits | | | - | | | | - | | | | - | | | | - | |
Operating Expenses | | | | | | | | | | | | | | | | |
Selling General and Administrative Expenses | | | 13,860 | | | | 17,066 | | | | 220,480 | | | | 251,406 | |
| | | | | | | | | | | | | | | | |
Total Operating Expenses | | | 13,860 | | | | 17,066 | | | | 220,480 | | | | 251,406 | |
| | | | | | | | | | | | | | | | |
Operating Income (Loss) | | | (13,860 | ) | | | (17,066 | ) | | | (220,480 | ) | | | (251,406 | ) |
| | | | | | | | | | | | | | | | |
Other Income (Expense) | | | | | | | | | | | | | | | | |
Interest expense | | | - | | | | - | | | | (341,899 | ) | | | (341,899 | ) |
| | | | | | | | | | | | | | | | |
Net loss | | | (13,860 | ) | | | (17,066 | ) | | | (1,614,637 | ) | | | (1,645,563 | ) |
| | | | | | | | | | | | | | | | |
Total Assets | | | 3,402,192 | | | | 164,173 | | | | 10,830 | | | | 3,577,195 | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | Six months Ended March 31, 2014 | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | Fuel Cell Technology | | | Contracted Research and Laboratory Services | | | | | | Total | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Revenues | | $ | - | | | $ | - | | | $ | - | | | $ | - | |
| | | | | | | | | | | | | | | | |
Cost of Revenues | | | - | | | | - | | | | - | | | | - | |
| | | | | | | | | | | | | | | | |
Gross Profits | | | - | | | | - | | | | - | | | | - | |
Operating Expenses | | | | | | | | | | | | | | | | |
Selling General and Administrative Expenses | | | - | | | | 17,066 | | | | 5,562,374 | | | | 5,579,440 | |
| | | | | | | | | | | | | | | | |
Total Operating Expenses | | | - | | | | 17,066 | | | | 5,562,374 | | | | 5,579,440 | |
| | | | | | | | | | | | | | | | |
Operating Income (Loss) | | | - | | | | (17,066 | ) | | | (5,562,374 | ) | | | (5,579,440 | ) |
| | | | | | | | | | | | | | | | |
Other Income (Expense) | | | | | | | | | | | | | | | | |
Interest expense | | | - | | | | - | | | | (280,017 | ) | | | (280,017 | ) |
| | | | | | | | | | | | | | | | |
Net income (loss) | | | - | | | | (17,066 | ) | | | (6,702,911 | ) | | | (6,719,977 | ) |
| | | | | | | | | | | | | | | | |
Total Assets | | | - | | | | 214,852 | | | | 8,828 | | | | 223,680 | |
(A Development Stage Company)
Notes to Financial Statements
March 31, 2015
(Unaudited)
Note 14 Subsequent Events
The Company has evaluated events subsequent to the balance sheet date through the issuance date of these financial statements in accordance with FASB ASC 855 and has determined the following would require disclosure in, the financial statements;
Issuance of shares of Common stock and conversion of convertible debt
From the Balance Sheet date until the date of this report, the Company issued 77,104,417 shares of common stock.
64,529,792 shares of common stock were issued for the conversion of $111,440 of convertible debt, $703 of accrued interest and $925 in legal fees.
12,574,625 shares of common stock issued resulted from prior conversions.
Issuance of Convertible Debt
From the Balance Sheet date until the date of this report, the Company issued the following convertible debt securities
On April 7, 2014, the Company received $30,000 from an institutional investor. In consideration for the cash, the Company issued a convertible promissory note for the same amount. The promissory note has an eight percent interest rate, an eight month term and converts at the market price. The market price is defined as 51% of the low closing trade price for the thirty (30) days prior to conversion.
On April 14, 2014, the Company received $35,000 from an institutional investor. In consideration for the cash, the Company issued a convertible promissory note for the same amount. The promissory note has an eight percent interest rate, matures on January 31, 2015 and converts at the market price. The market price is defined as 50% of the low closing bid price for the thirty (30) days prior to conversion.
On May 6, 2014, the Company received $42,625 from an institutional investor. In consideration for the cash, the Company issued a convertible promissory note for $50,000. The promissory note has an eight percent interest rate, matures on April 30, 2015 and converts at the market price. The market price is defined as 55% of the low closing trade price for the ten (10) days prior to conversion. The difference between the convertible promissory note and the proceeds received shall be amortized into interest expense over the life of the promissory note
Hydrogen Future Corp.
(A Development Stage Company)
Notes to Financial Statements
March 31, 2014
(Unaudited)
Reverse Split of Shares
On March 31, 2013, the Company approved a one for five hundred (1:500) reverse split of the outstanding shares of the Company’s common stock. The Amendment to the Company’s Articles of Incorporation was filed on January 10, 2014, with the Secretary of state of Nevada. The reverse split became effective on January 27, 2014 Please see our form 8-K filed on January 24, 2014 for more detail.
Issuance of Shares
On January 27, 2014, the Company issued to Management one hundred million (100,000,000) shares of post-split common shares to Management. Please see our Form 8-K filed on January 28, for more detail.
Conversion of Debt
From the balance sheet date until the date of this report, the Company issued 77,104,387 shares of common stock for the conversion of about $100,000 in debt.
On April 1, 2015 the Company issued a Convertible Promissory Note in the principal amount of Twenty Five Thousand Dollars ($25,000), with ten percent, 10%, interest and a maturity date of October 1, 2015. The Principal plus any interest shall be convertible into common stock of the Company at fifty percent (50%) of the lowest closing bid prices for the thirty (30) trading days prior to conversion of the Note.
On May 1, 2015 the Company issued a Convertible Promissory Note in the principal amount of Twenty Five Thousand Dollars ($25,000), with ten percent, 10%, interest and a maturity date of November 1, 2015. The Principal plus any interest shall be convertible into common stock of the Company at fifty percent (50%) of the lowest closing bid prices for the thirty (30) trading days prior to conversion of the Note
Issuance of Common stock
Subsequent to the Balance Sheet, the Company issued the following shares:
439,895,390 shares for the conversion of approximately $16,000 of convertible debt, $100 of accrued interest and $2,500 of associated fees. Change in Certifying Accounting
On May 11, 2015, the Company announced a change in its certifying accountant.
The Company has appointed John Scrudato, CPA as its auditor for the year ending September 30, 2015.
Mr. Scrudato’s offices are in Califon, NJ.
Mr. Scrudato replaces Thomas Bravos, CPA, who resigned as the Company’s auditor.
There were no disagreements between The Company and Mr. Bravos.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Forward Looking Statements
This quarterly report on Form 10-Q and other reports filed by the Company from time to time with the U.S. Securities and Exchange Commission (the “SEC”) contain or may contain forward-looking statements (collectively the “Filings”) and information that are based upon beliefs of, and information currently available to, the Company’s management as well as estimates and assumptions made by Company’s management. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. When used in the filings, the words “anticipate”, “believe”, “estimate”, “expect”, “future”, “intend”, “plan”, or the negative of these terms and similar expressions as they relate to the Company or the Company’s management identify forward-looking statements. Such statements reflect the current view of the Company with respect to future events and are subject to risks, uncertainties, assumptions, and other factors, including the risks contained in the “Risk Factors” section of the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2013,2014 filed with the SEC, relating to the Company’s industry, the Company’s operations and results of operations, and any businesses that the Company may acquire. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended, or planned.
Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future results, levels of activity, performance, or achievements. Except as required by applicable law, including the securities laws of the United States, the Company does not intend to update any of the forward-looking statements to conform these statements to actual results.
Plan of Operation
AtWe were incorporated in the balance sheet date,State of Nevada on June 21, 2006, as El Palenque Nercery, Inc. On June 30, 2006, we changed our name to El Palenque Vivero, Inc., and on March 23, 2010, we changed our name to A5 Laboratories Inc. On April 8, 2010, we effectuated a forward split of our issued shares of common stock on the basis of 10-for-1. On October 10, 2013, we changed our name to Hydrogen Future CorporationCorporation. On December 27, 2013, our stock trading symbol was changed from AFLB.OB to HFCO.OB, and on January 27, 2015, we effectuated a development stage company concentratingreverse split of our common stock on contract research and laboratory services.
New Business Opportunity
Based upon a review by the Board of Directors and Management, the Company has decided to enter a new line of business, fuel cell technology. In this regard, and subsequent to the Balance sheet, on1:500 basis . On April 21, 2014, Hydrogen Future Corporationthe Company completed the acquisition of Hydra Fuel Cell Corporation (“Hydra”) from American Security Resources Corporation (Pink Sheets: ARSC). On January 12. 2015, we effectuated a reverse split of our common stock on a 1:250 basis. Hydra has developed advanced hydrogen fuel cell technology which it initially intends to deploy as residential and small commercial grid replacement for electric generation. Our business offices are located at 2525 Robinhood Street, Suite 1100, Houston TX and our telephone number is (713) 465-1001.
UnderThe Company intended to provide contract research and laboratory services to the agreement to acquire Hydra, HFCO acquired 100%pharmaceutical industry. This part of the common stock of Hydra in exchange for a convertible preferred share issued to ARSC. The preferred shareCompany is convertible into an amount equal to 100.2% of the then outstanding common stock of HFCO at the time of conversion, which is at the sole discretion of ARSC. This gives ARSC an effective 50.1% equity interest in HFCO.
Although an all stock transaction, HFCO was required to have secured sufficient funding commitments to fund Hydra’s production startup before it could close the acquisition. Such commitments were completed just recently.
Frank Neukomm, HFCO’s Chief Executive Officercurrently inactive, and Chairman of the Board, and Robert Farr, HFCO’s President, Chief Operations Officer and Director of HFCOwe are also officers and directors of ARSC.
Please seeconcentrating on our Formfuel cell operation. We strongly suggest you read our 8-K issued onfiled April 28, 2014 asabout the Hydra acquisition and our form 10-K for the year ended September 30, 2013 filed on January 21, 2015 in addition to this filing to better understand the Company’s new direction. Both filings were with the Securities and Exchange Commission for a fuller description of our new business model.and can be found at www.SEC.gov .
Management's Discussion and Analysis of Results of Operations
Three Months Ended March 31, 2015 Compared to the Three Months Ended March 31, 2014
Our results of operations are summarized below:
| | Quarter Ended March 31, 2014 ($) | | | Quarter Ended March 13, 2013 ($) | |
Revenue | | | 0.00 | | | | 0.00 | |
Expenses | | | (5,349,454) | | | | (12,015) | |
Other Income (Expenses) | | | (2,151,139) | | | | (1,487,214) | |
Net Income (Loss) | | | (7,500,593) | | | | (1,499,229) | |
Income (Loss) Per Share-Basic | | | (.07) | | | | (12.33) | |
Income (Loss) Per Share- Fully diluted | | | (.04) | | | | (12.33) | |
| | Quarter Ended March 31, 2015 ($) | | | Quarter Ended March 31, 2014 ($) | |
Revenue | | | -0- | | | | -0- | |
Expenses | | | (134,175 | ) | | | (5,349,454 | ) |
Other (Expenses) | | | (1,511,388 | ) | | | (2,151,139) | |
Net (Loss) | | | (1,645,563 | ) | | | (7,500,593) | |
(Loss) Per Share-Basic | | | (.07 | ) | | | (18.31) | |
(Loss) Per Share- Fully diluted | | | (.04 | ) | | | (9.26) | |
Three Months Ended March 31, 2014 Compared to the Three Months Ended March 31, 2013
During the three months ended March 31, 2014,2015, we did not earn any revenues. We have not earned any revenues since our inception and there is no assurance that we will be able to earn any revenues in the future.
Our General and Administrative expenses for the three months ended March 31, 20142015 and 20132014 can be summarized as follows:
| | For the Three Months Ended March 31, | |
| | 2014 ($) | | | 2013 ($) | | | Difference ($) | |
Management Compensation | | | 5,210,000 | | | | -0- | | | | 5,210,000 | |
Consulting Fees | | | 75,000 | | | | -0- | | | | 75,000 | |
Other General and administrative expenses | | | 54,376 | | | | 12,015 | | | | 42,265 | |
| | 2015 ($) | | | 2014 ($) | | | Difference ($) | |
Management Compensation | | | -0- | | | | 5,210,000 | | | | (5,210,000) | |
Consulting Fees | | | 75,000 | | | | 75,000 | | | | -0- | |
Other General and administrative expenses | | | 59,175 | | | | 64,454 | | | | (5,279) | |
Total Expenses | | | 134,175 | | | | 5,349,354 | | | | (5,215,279) | |
Our net loss for the three month period ended March 31, 2014 was $7,500,593, compared to a net loss of $1,499,229 for the three month period ended March 13, 2013, an increased loss of $6,001,364.
During the three month period ended March 31, 2014,2015, we incurred operating expenses (and respective net operating losses) of $5,349,454,$134,175, compared to operating expenses of $12,105$5,349,454 incurred during the three month period ended March 13, 2013, an increase2014, a deccrease of $ 5,337,439.($5,215,279.) The operating expenses incurred during the three month period ended March 31, 20142015 and 20132014 consisted of (i) $5,210,000$-0- and $-0-,$5,210,000 respectively of Management compensation (ii) $75,000 and $-0-$75,000 in fees paid to consultants; and (iii) $45,843$59,175 and $12,015$64,454 in other general and administrative expenses, respectively.
Management compensation increaseddecreased $5,210,000 due to the issuance of 100 million shares of common stock to our Management team. See Footnote 9Statement of Shareholders Equity for more detail. Consulting fees increased bytotaled $75,000 due to the quarterly accrual for the consulting services, which did not exist in the same quarter as last year.contract during each period. General and administrative expenses increaseddecreased by $33,832 principally due to greater$5,279. These expenses include the following: (i)contract employee expense (ii) transfer agent fees of $17,214 (ii) depreciation and amortization expense of $13,976, (iii) professional fees and contracted services of $10,573, (iv) expenses associated with the reverse split, (iii) increased SEC filing feesdebt conversion of $8,684 and (iv) an overall greater level(v) rent expense of corporate expenses.$3,556
Other income/(expense) incurred during the three month periods ended March 31, 20142015 and March 31, 20132014 was as follows:
| | 2014 ($) | | | 2013 ($) | | | Difference ($) | | | 2015 ($) | | 2014 ($) | | | | Difference ($) | |
Interest Expense | | | (176,507 | ) | | | (102,074 | ) | | | (74,433 | ) | | | (156,055) | | | (176,507) | | | | 20,452 | |
Derivative Expense | | | (1,067,424 | ) | | | -0- | | | | (1,067,424 | ) | | | (159,390) | | | (1,067,424) | | | | 908,034 | |
Change in the Fair Value of Derivative liabilities | | | 917,897 | | | | (1,182,780 | ) | | | 2,100,677 | | | | (1,127,383) | | | | 917,897 | | | | (2,045,280) | |
Loss on Retirement of Debt | | | (1,825,104 | ) | | | (202,360 | ) | | | (1,622,745 | ) | | | (68,560) | | | (1,825,104) | | | | 1,756,545 | |
Total Other income/(expense) | | | | (1,511,388) | | | (2,151,139) | | | | 639,751 | |
During the three month period ended March 31, 2014, we incurred other income/(expense)Interest expense decreased $20,452 due principally to reduced amortization of $(2,151,139), compareddebt discounts of $16,984.
Derivative expense decreased $908,034 principally due to other income (expense) of $(1,487,214) incurred during the three month period ended March 13, 2013, an increased expense of $663,925. Other income/(expense)incurred during the three month period ended March 31, 2014 and 2013 consisted of (i) $(176,507) and $(102,074), respectively of Interest expense; (ii) $(1,067,424) and $-0- in derivative expense; (iii) $917,897 and $(1,182,780),respecitvely in greater stock price volatility.
Change in the Fair Value of Derivative liabilities and (iv) $(1,825,104) and $(202,360) in Loss on Retirement of Debt .
Interest expense increased $74,433 due to greater debt levels and increased amortization of debt discounts. Derivative Expense increased by $1,067,424 due to greater issuances of debt and increased stock price volatility. Change in the Fair Value of Derivative liabilities increased $2,100,677decreased $2,045,280 due to increased stock price volatility and greater outstanding debt levels. at quarter end.
Loss on Retirement of Debt increased $1,622,745was 1,756,545 lower due to a greater levelfewer conversions of debt conversions and increased stock price volatility.debt.
Therefore, our basic net loss and net loss per share during the three month period ended March 31, 2014,2015, was $7,500,593($1,645,563) or $0.07($0.03) per share, compared to a net loss and loss of $1,49,229($7,500,593) or $12.33$18.31 per basic share during the three month period ended March 31, 2013.2014. The weighted average number of basic shares outstanding was 102,394,45655,656,550 for the three month period ended March 31, 2014,2015, compared to 121,558409,578 for the three month period ended March 13, 2013.31, 2015. Our fully diluted net lossincome (loss) per share was $.04($.03) and $12.33($9.26) for the sixthree months ended March 31, 20142015 and 2013,2014, respectively. The weighted average number of fully-diluted shares outstanding was 202,394,54656,056,550 for the three month period ended March 31, 2014,2015, compared to 121,558809,578 for the three month period ended March 31, 2013.
2014.
Six Months Ended March 31, 20142015 Compared to the Six Months Ended March 31, 20132014
Our results of operations are summarized below:
| | Quarter Ended March 31, 2015 ($) | | | Quarter Ended March 31, 2014 ($) | |
Revenue | | | -0- | | | | -0- | |
Expenses | | | (251,506 | ) | | | (5,579,440 | ) |
Other (Expenses) | | | (2,091,415 | ) | | | (1,140,537) | |
Net (Loss) | | | (1,645,563 | ) | | | (7,500,593) | |
(Loss) Per Share-Basic | | | (.07 | ) | | | (18.31) | |
(Loss) Per Share- Fully diluted | | | (.04 | ) | | | (9.26) | |
During the six months ended March 31, 2014,2015, we did not earn any revenues. We have not earned any revenues since our inception and there is no assurance that we will be able to earn any revenues in the future.
Our General and Administrative expenses for the threesix months ended March 31, 20142015 and 20132014 can be summarized as follows:
| | For the Six Months Ended March 31, | | |
| | 2014 ($) | | 2013 ($) | | Difference ($) | | | 2015 ($) | | 2014 ($) | | Difference ($) | |
Management Compensation | | 5,255,000 | | -0- | | 5,210,000 | | | | -0- | | | 5,210,000 | | | (5,210,000) | |
Consulting Fees | | 150,000 | | 165,000 | | (15,000) | | | | 150,000 | | | 150,000 | | | -0- | |
Other General and administrative expenses | | | 179,440 | | | | 82,107 | | | | 97,333 | | | | 101,406 | | | | 219,440 | | | | (118,034) | |
Total Expenses | | | | 251,406 | | | 5,579,440 | | | (5,328,034) | |
Our net loss for the six month period ended March 31, 2014 was $6,719,976, compared to a net loss of $1,763,579 for the six month period ended March 13, 2013, an increased loss of $4,956,397.
During the six month period ended March 31, 2014,2015, we incurred operating expenses (and respective net operating losses) of $5,579,440,$251,506, compared to operating expenses of $247,107$5,579,440 incurred during the three month period ended March 13, 2013, an increase2014, a deccrease of $5,332,332 .($5,328,034.) The operating expenses incurred during the threesix month period ended March 31, 20142015 and 20132014 consisted of (i) $5,255,000$-0- and $-0-,$5,210,000, respectively of Management compensation (ii) $150,000 and $165,000$150,000 in fees paid to consultants; and (iii) $194,440$251,406 and $12,015$64,454 in other general and administrative expenses, respectively.
Management compensation increased $5,255,000decreased $5,210,000 due to the issuance of 100 million shares of common stock to our Management team on January 27, 2014 and another 720,000 shares which were issued in December 2013 with a valueteam. See Statement of $45,000. See Footnote 9Shareholders Equity for more detail. Consulting fees decreased by $15,000totaled $150,000 due to the accrual of a consulting liabilitytwo quarterly accruals for the first quarter of the last fiscal year partially offset by six monthly accruals for consulting services associated with a new consulting agreement.contract during each period. Other General and administrative expenses increaseddecreased by $97,333 principally$118,034. $45,000 of the decrease was due to greater (i)contract employee expense (ii) transfer agent fees associated with the reverse split, (iii) increased SEC filing fees and (iv) an overall greaterissuance of common stock to our management team in December 2013. The remaining decrease was due to reduced operating expenses at the parent company level of corporate expenses.$85,482 partially offset by the operating expenses of the Hydra Fuel Cell subsidiary of $12,448 which did not exist in the same quarter of last year.
Other income/(expense) incurred during the three month periods ended March 31, 20142015 and March 31, 20132014 was as follows:
| | 2014 ($) | | | 2013 ($) | | | Difference ($) | | | 2015 ($) | | 2014 ($) | | | Difference ($) | |
Interest Expense | | | (280,017 | ) | | | (216,851 | ) | | | (63,165 | ) | | | (341,899) | | | (280,077) | | | (61,882) | |
Derivative Expense | | | (2,119,601 | ) | | | (137,631 | ) | | | (1,981,971 | ) | | | (241,041) | | | (2,119,601) | | | (1,878,560 | |
Change in the Fair Value of Derivative liabilities | | | 3,258,449 | | | | (959,630 | ) | | | 4,218,079 | | | | (1,423,351) | | | | 3,258,449 | | | (4,681,800) | |
Loss on Retirement of Debt | | | (1,999,367 | ) | | | (202,360 | ) | | | (1,797,008 | ) | | | (85,124) | | | (1,999,367) | | | 1,914,243 | |
Total Other income/(expense) | | | | (2,091,415) | | | (1,140,537) | | | (950,879) | |
During the three month period ended March 31, 2014, we incurred other income/(expense)Interest expense increased $61,882 due principally to increased amortization of $(1,140,536), compareddebt discounts of $54,333.
Derivative expense decreased $1,878,560 principally due to other income (expense) of $(1,516,472) incurred during the three month period ended March 13, 2013, an improvement of $375,396. Other income/(expense)incurred during the three month period ended March 31, 2014 and 2013 consisted of (i) $(280,017) and $(216,851), respectively of Interest expense; (ii) $(2,119,601) and $(137,631) in derivative expense; (iii) $3,258,449 and $(959,630),respectively in greater stock price volatility.
Change in the Fair Value of Derivative liabilities and (iv) $(1,999,367) and $(202,360) in Loss on Retirement of Debt .
Interest expense increased $63,165 due to greater debt levels and increased amortization of debt discounts. Derivative Expense increased by $1,981,971 due to greater issuances of debt and increased stock price volatility. Change in the Fair Value of Derivative liabilities increased $4,218,079decreased $4,681,800 due to increased stock price volatility and greater outstanding debt levels. at quarter ends.
Loss on Retirement of Debt increased $1,797,008was 1,914,243 lower due to a greater levelfewer conversions of debt conversions and increased stock price volatility.debt.
Therefore, our basic net loss and net loss per share during the six month period ended March 31, 2014,2015, was $6,719,976($2,342,821) or $0.08($0.07) per share, compared to a net loss and loss of $1,763,579($6,719,977) or $14.43($19.24) per basic share during the sixthree month period ended March 31, 2013.2014. The weighted average number of basic shares outstanding was 87,295,77132,043,335 for the six month period ended March 31, 2014,2015, compared to 122,218349,183 for the threesix month period ended March 31, 2013.2015. Our fully diluted net lossincome (loss) per share was $.04($.07) and $14.43($8.97) for the six months ended March 31, 20142015 and 2013,2014, respectively. The weighted average number of fully-diluted shares outstanding was 187,295,77132,443,335 for the three month period ended March 31, 2014,2015, compared to 122,218749,183 for the threesix month period ended March 13, 2013.31, 2014.
Liquidity and Capital Resources
As of March 31, 2014,2015, our current assets were $32,351$11,841 and our current liabilities were $1,666,079,$4,714,840, which resulted in a working capital deficiency of $1,633,728.($4,702,999). As of March 31, 2014,2015, current assets were comprised of: (i) $29,157$9,810 in cash; and (ii) $3,194$2,031 in receivables from a company controlled by our Chief Executive Officer.Inventory. As of March 31, 2014,2015, current liabilities were comprised of: (i) $122,610$156,985 in accounts payable and accrued liabilities; (ii) $415,719 in accounts payable due to a related party; (iii) $104,465$410,133 in accrued interest payable; (iv) $27,173 in notes payable due to a related party; (v) $41,750 in common stock to be issued; (vi) a derivative liability of $198,467$1,989,528 resulting from convertible notes payable and warrants and (vii) $755,895$733,793 in convertible debt (net of $207,314$142,289 of discount);., and (vii) non-convertible debt of $981,508.
As of March 31, 2014,2015, our total assets of $223,680$3,577,195 were comprised of: (i) $32,351$11,841 in current assets; (ii) $8,828 in debt issue costs (net of $42,073 of amortization); and (iii) $182,501$164,173 in property and equipment (net of $106,342$478,640 of depreciation).; (iii) $47,005 in Notes Receivable; (iv) $1,020 in debt issue costs and (v) Goodwill of $3,353,156. As of March 31, 2014,2015, our total liabilities of $1,660,079$4,714,840 were comprised of current liabilities of the same amount.
Stockholders’ deficit improved $907,658Equity decreased $2,115,196 from ($2,350,057)$977,551 as of September 30, 20132014 to ($1,442,399)1,137,645) as of March 31, 2014.2015. The change in Stockholder’s deficit was comprised of (i) issuance of shares for Management compensation of $5,255,000; (ii) issuances of shares for conversion of debt totaling $2,372,634, partially offset by (iii)$227,625 and (ii) net loss of $6,719,976.$2,342,821.
Cash Flows from Operating Activities
We did not generate positive cash flows from operating activities. For the ninesix months ended March 31, 2014,2015, net cash flows provided by operations was $(290,843)$(211,918). Net cash flows used in operating activities for the sixthree months ended March 31, 20142015 consisted of (i) net loss of $(6,719,976)$(2,342,821), and (ii) the change in the fair value of the derivative liability of $(3,258,449) adjusted by:$1,423,351 (iii) share based payments of $5,255,000 (iv) derivative expense of $2,119,601; (v)$241,041; (iv) loss on retirement of debt of $1,999,367; (vi) $225,023$85,124; (v) $279,356 in amortization of debt discount,discount; (vi) depreciation expense of $19,890 and (vii) $17,066 in depreciation expense.amortization expense of deferred financing costs of $19,768. Net cash flows used by operating activities was further changedwere positively impacted by an increasechanges in accrued interestworking capital accounts related, of $30,218.$20,716.
Cash Flows from Investing Activities
For the ninesix months ended March 31, 2014,2015, net cash flows provided by investing activities was $0.$(2,805) due to purchases of property, plant and equipment at our Hydra subsidiary.
Cash Flows from Financing Activities
We have financed our operations primarily from debt or the issuance of equity instruments. For the six months ended March 31, 2014,2015, net cash flows provided from financing activities was $320,000. This was$194,000 from the issuance of notes, for cashpartially offset by $500 of $170,000 and notes for professional services of $150,000.debt financing costs.
We anticipate that we will meet our ongoing cash requirements by selling our equity securities or through shareholder loans. Our management has changed our business focus to the acquisition of operating assets and we estimate that our expenses over the next 12 months will be approximately $600,000$800,000 for our new venture in fuel cell technology.
As of the date of this Quarterly Report, we do not have any material commitments other than as described below.
Convertible Debt
FifePlease see Note 8 above for a discussion of our outstanding indebtedness.
On February 15, 2011, the Company issued convertible notes, totaling $300,000, to John Fife with the following provisions:
● | Default interest rate of 12%; |
● | Notes are due 48 months from the issuance date of February 23, 2011; |
● | Conversion rates equal to 70% or 80% of the market price on date of conversion by applying a specified formula that utilizes the average of the 3 lowest quoted closing prices 20 days immediately preceding the conversion date, and then takes the higher of the average 3 lowest closing prices or $0.12 floor price; and |
● | Secured by the Chief Executive Officer’s 15,000,000 shares of the Company common stock. |
The investor is entitled at its option to convert all or part of the principal and accrued interest into shares of the Company’s common stock at a conversion price as discussed above. The Company classified the embedded conversion feature as a derivative liability due to management’s assessment that the Company may not have sufficient authorized number of shares of common stock required to net-share settle.
On February 23, 2011, the Company entered into a secured convertible promissory note between the Company and a third party (the “Lender”). The note balance totaled $300,000. The Lender expects to contribute funds in tranches, the first tranche being equal to $300,000, and an additional ten tranches equal to $200,000 each commencing on October 23, 2011, and continuing each subsequent month for ten months. No additional draw downs occurred during the year ended September 30, 2011. In January 2012, the Company received $22,000 from a lender for an additional investment, under the same terms above, which is convertible to shares pursuant to the terms described below. See Note 9(A) related to conversions of this $300,000 note.
The number of shares of common stock to be issued upon conversion of each tranche shall be determined by dividing (a) the conversion amount by (b) the higher of (i) the Market Price or (ii) the Floor Price. Where “Market Price” is defined as 80% of the average of the closing bid price for the three (3) days with the lowest closing bids during the twenty trading days immediately preceding the conversion date, provided, however, that if the market prices fall below $0.05 per share of common stock the conversion factor shall be reduced by 10 percentage points. The “Floor Price” is defined as $.012. The trading data used to compute the closing bid shall be as reported by Bloomberg, LP or if such information is not then being reported by Bloomberg, then as reported by such other data information sources as may be selected by the Lender.
The note also contains language that removes the $0.12 floor if certain “triggering events” occur during the life of the note. Since the floor price can be removed upon any one of these events occurring, the conversion feature of this note has two elements: normal conversion and conversion upon a triggering event.
Upon each occurrence of any of the following triggering events , (a) the conversion factor shall be reduced by 10 percent points (i.e., if the conversion factor were 80% immediately prior to the occurrence of the triggering event, it shall be reduced to 70% upon the occurrence of a triggering event), (b) the conversion price shall be computed without regard to the Floor Price, and (c) this note shall accrue interest at the rate of 1% per month, whether before or after judgment; provided, however, that (1) in no event shall the triggering effects be applied more than two times, and (2) notwithstanding any provisions to the contrary herein, in no event shall the applicable interest rate at any time exceed the maximum interest rate allowed under applicable law:
On October 4, 2012, Mr. Fife foreclosed on his note to us because we were in default. According to the terms of the indenture, Mr. Fife was issued 15 million shares to forestall on his claim against the firm. At the time, the common stock of the Company was trading at $.0039. Therefore, a corresponding expense of $58,500 was recorded at that time and included in General and Administrative Expense.
As of March 31, 2014, as a result of the triggering events (a) and (b), the Company computes the exercise price related to convertible debt, without regard to the floor price.
The normal conversion resulted in a debt discount under ASC 470-25-8 since the calculated market price as of the date of the note was higher ($0.145) than the conversion floor of $0.12.
At the balance sheet date, $115,450 of the debt has been converted leaving a principal balance of $184,550.
Lucosky Brookman LLP Note
Effective on January 10, 2012, the Company issued to Lucosky Brookman LLP (“Lucosky”) a convertible promissory note ( the “Lucosky Note”) for legal services provided since February 1, 2011 of $53,727. The Lucosky Note bears interest at twelve percent (12%) per annum and has a term of six months. Should the Lucosky Note not be paid by the Maturity Date, an event of Default occurs and the interest rate becomes eighteen percent (18%) per annum. Shares of Common Stock to be issued upon conversion of each tranche shall be determined by dividing (a) the conversion amount by (b) the Market Price. The “Market Price” is defined as 50% of the average of the closing price for the five (5) days immediately preceding the conversion date.
During the quarter ended March 31, 2014, the entire principal value on this note was converted and there is no outstanding balance at March 31, 2014.
Consulting Notes
Starting in Fiscal 2013, the Company incurred a liability to a consultant for $165,000. $165,000 of the Notes bear interest at twelve percent (12%) per annum and matures on June 30, 2014. Shares of Common Stock to be issued upon conversion of each tranche shall be determined by dividing (a) the conversion amount by (b) the Market Price. The “Market Price” is defined as 50% of the low closing bid price for the five (5) days immediately preceding the conversion date.
As of the Balance sheet date, $118,203 of principal on this note has been converted into common shares, leaving a remaining balance of $46,797.
The Company signed a new consulting agreement in August 2013 at a rate of $25,000 per month. Since that time, the Company issued notes totaling $200,000 to the consultant. Shares of Common Stock to be issued upon conversion of each tranche shall be determined by dividing (a) the conversion amount by (b) the Market Price. The “Market Price” is defined as 50% of the low closing bid price for the thirty (30) days immediately preceding the conversion date. As of the Balance sheet date, $39,400 of principal has been converted leaving a balance of $160,600
St. George Notes
On August 27, 2013, St. George Investments LLC (“St. George”) advanced the Company $12,500 (“St. George Note”). The St. George Note has a one year term, an interest rate of ten percent and a ten percent original issue discount (“OID”). An OID represents the difference between the amount received and the face value of the note. The St. George Note has a face value of $13,750, and the OID will be amortized into expense pro-rata over the term of the Note. Shares of Common Stock to be issued upon conversion of each tranche shall be determined by dividing (a) the conversion amount by (b) the Market Price. The “Market Price” is defined as 60% of the average of the two (2) low closing bid prices for the ten (10) days immediately preceding the conversion date.
On October 10, 2013, St. George Investments LLC (“St. George”) advanced the Company $15,000 (“St. George Note”). The St. George Note has a one year term, an interest rate of ten percent and a ten percent original issue discount (“OID”). An OID represents the difference between the amount received and the face value of the note. The St. George Note has a face value of $13,750, and the OID will be amortized into expense pro-rata over the term of the Note. Shares of Common Stock to be issued upon conversion of each tranche shall be determined by dividing (a) the conversion amount by (b) the Market Price. The “Market Price” is defined as 60% of the average of the two (2) low closing bid prices for the ten (10) days immediately preceding the conversion date.
On November 19, 2013, St. George Investments LLC (“St. George”) advanced the Company $10,000 (“St. George Note”). The St. George Note has a one year term, an interest rate of ten percent and a ten percent original issue discount (“OID”). An OID represents the difference between the amount received and the face value of the note. The St. George Note has a face value of $13,750, and the OID will be amortized into expense pro-rata over the term of the Note. Shares of Common Stock to be issued upon conversion of each tranche shall be determined by dividing (a) the conversion amount by (b) the Market Price. The “Market Price” is defined as 60% of the average of the two (2) low closing bid prices for the ten (10) days immediately preceding the conversion date.
Other Notes
The Company has received another $186,000 in proceeds from multiple investors. Interest on the notes varies from 0% to ten percent. Shares of Common Stock to be issued upon conversion of each tranche shall be determined by dividing (a) the conversion amount by (b) the Market Price.
Market price is defined as follows:
Debt Amount | | | Discount | | | Conversion Mechanism |
$ | 20,000 | | | | 51 | % | | low trade price over prior 30 days |
$ | 25,000 | | | | 60 | % | | low trade price over prior 25 days |
$ | 141,000 | | | | 50 | % | | low bid price over prior 30 days |
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.
Inflation
The amounts presented in the financial statements do not provide for the effect of inflation on our operations or financial position. The net operating losses shown would be greater than reported if the effects of inflation were reflected either by charging operations with amounts that represent replacement costs or by using other inflation adjustments.
Critical Accounting Policies
The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.
Such estimates for the quarterthree months and six months ended March 31, 20142015 and 2013,2014, and assumptions affect, among others, the following:
● | estimated carrying value, useful lives and related impairment of property and equipment; |
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● | estimated fair value of derivative liabilities; |
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● | estimated valuation allowance for deferred tax assets, due to continuing losses; and |
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● | estimated fair value of share based payments. |
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from estimates.
Derivative Liabilities
Fair value accounting requires bifurcation of embedded derivative instruments such as conversion features in convertible debt or equity instruments, and measurement of their fair value for accounting purposes. In determining the appropriate fair value, the Company uses the Black-Scholes option-pricing model. In assessing the convertible debt instruments, management determines if the convertible debt host instrument is conventional convertible debt and further if there is a beneficial conversion feature requiring measurement. If the instrument is not considered conventional convertible debt, the Company will continue its evaluation process of these instruments as derivative financial instruments.
Once determined, derivative liabilities are adjusted to reflect fair value at each reporting period end, with any increase or decrease in the fair value being recorded in results of operations as an adjustment to fair value of derivatives. In addition, the fair value of freestanding derivative instruments such as warrants, are also valued using the Black-Scholes option-pricing model.
Debt Issue Costs and Debt Discount
The Company may pay debt issue costs, and record debt discounts in connection with raising funds through the issuance of convertible debt. These costs are amortized over the life of the debt to interest expense. If a conversion of the underlying debt occurs, a proportionate share of the unamortized amounts is immediately expensed.
Original Issue Discount
For certain convertible debt issued, the Company provides the debt holder with an original issue discount (“OID”). An OID is the difference between the original cash proceeds and the amount of the note upon maturity. The Note is originally recorded for the proceeds received. The OID is expensed into interest expense pro-rata over the term of the Note, and upon maturity, the book value of the Note shall equal the proceeds due.
Share-based Payments
Generally, all forms of share-based payments, including stock option grants, warrants, restricted stock grants and stock appreciation rights are measured at their fair value on the awards’ grant date, based on estimated number of awards that are ultimately expected to vest. Share-based compensation awards issued to non-employees for services rendered are recorded at either the fair value of the services rendered or the fair value of the share-based payment, whichever is more readily determinable. During the three months ended March 31, 2015, there were no payments of this kind.
In accordance with accounting guidance now codified as FASB ASC Topic 260, “Earnings per Share,” basic earnings (loss) per share is computed by dividing net income (loss) by weighted average number of shares of common stock outstanding during each period. Diluted earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during the period.
Since the Company reflected a net loss in 2011 and 2010, respectively, the effect of considering any common stock equivalents, if exercisable, would have been anti-dilutive. A separate computation of diluted earnings (loss) per share is not presented.
Fair Value of Financial Instruments
ASC 820 defines fair value, provides a consistent framework for measuring fair value under generally accepted accounting principles and expands fair value financial statement disclosure requirements. ASC 820’s valuation techniques are based on observable and unobservable inputs. Observable inputs reflect readily obtainable data from independent sources, while unobservable inputs reflect our market assumptions. ASC 820 classifies these inputs into the following hierarchy:
● | Level 1 inputs: Quoted prices for identical instruments in active markets. |
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● | Level 2 inputs: Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. |
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● | Level 3 inputs: Instruments with primarily unobservable value drivers. |
Foreign Currency Transactions
The Company’s functional currency is the Canadian Dollar. The Company’s reporting currency is the U.S. Dollar. All transactions initiated in Canadian Dollars are translated to U.S. Dollars in accordance with ASC 830-10-20“Foreign “Foreign Currency Translation” as follows:
| (i) | Monetary assets and liabilities at the rate of exchange in effect at the balance sheet date; |
| | |
| (ii) | Equity at historical rates; and |
| | |
| (iii) | Revenue and expense items at the average exchange rate prevailing during the period. |
Adjustments arising from such translations are deferred until realization and are included as a separate component of stockholders’ equity (deficit) as a component of comprehensive income (loss). Therefore, translation adjustments are not included in determining net income (loss) but reported as other comprehensive income (loss).
For foreign currency transactions, the Company translates these amounts to the Company’s functional currency at the exchange rate effective on the invoice date. If the exchange rate changes between the time of purchase and the time actual payment is made, a foreign exchange transaction gain or loss results which is included in determining net income for the period.
Item 3. Quantitative and Qualitative Disclosures about Market Risk.
We do not hold any derivative instruments and do not engage in any hedging activities.
Item 4. Controls and Procedures.
(a) Evaluation of Disclosure Controls and Procedures
The Company’s management, with the participation of the Company’s principal executive officer (“PEO”) and principal financial officer (“PFO”), evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Based on this evaluation, the PEO and PFO concluded that, as of the end of such period, the Company’s disclosure controls and procedures were not effective to ensure that information that is required to be disclosed by the Company in the reports it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to the Company’s management, including the PEO and PFO, as appropriate, to allow timely decisions regarding required disclosure.
(b) Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, during our most recently completed fiscal quarter 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.
We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.
There have been no material changes from the risk factors previously disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2013,2014, as filed with the SEC on January 2, 2014.21, 2015.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Not applicable.
Item 3. Defaults upon Senior Securities.
There has been no default in the payment of principal, interest, sinking or purchase fund installment, or any other material default not cured within 30 days, with respect to any indebtedness of the Company.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
See Form 8K filed onNone.
(d) Exhibits.
Exhibit No. | | Description |
| | |
| | Certification by the Principal Executive Officer of Registrant pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a) or Rule 15d-14(a))* |
| | |
| | Certification by the Principal Accounting Officer of Registrant pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a) or Rule 15d-14(a))* |
| | |
| | Certification by the Principal Executive Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002* |
| | |
| | Certification by the Principal Accounting Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002* |
* filed herewith
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| | HYDROGEN FUTURE CORP. |
| | | | |
| | | | |
| ____, 2015 | By: | /s//s/ Frank Neukomm | |
| Name: | Frank Neukomm | |
Name: Frank Neukomm | Title: | Chief Executive Officer | |
| | | Title: Chief Executive Officer
(Principal Executive Officer) | |
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