Document_and_Entity_Informatio
Document and Entity Information | 6 Months Ended | |
Jun. 30, 2014 | Aug. 08, 2014 | |
Document And Entity Information | ' | ' |
Entity Registrant Name | 'HPEV, INC. | ' |
Entity Central Index Key | '0001399352 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Jun-14 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Is Entity a Well-known Seasoned Issuer? | 'No | ' |
Is Entity a Voluntary Filer? | 'No | ' |
Is Entity's Reporting Status Current? | 'Yes | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Common Stock, Shares Outstanding | ' | 56,721,075 |
Document Fiscal Period Focus | 'Q2 | ' |
Document Fiscal Year Focus | '2014 | ' |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Current assets | ' | ' |
Cash | $1,704,663 | $477,549 |
Prepaid expenses | 60,854 | ' |
Total current assets | 1,765,517 | 477,549 |
Intangibles | 118,280 | 98,697 |
Total assets | 1,883,797 | 576,246 |
Current liabilities: | ' | ' |
Accounts payable | 124,436 | 230,527 |
Accrued liabilities - related party | 806,977 | 272,564 |
Customer deposits - related party | 400,000 | ' |
Accrued payroll liabilities | 14,167 | 10,428 |
Notes payable - related party | 22,910 | 22,910 |
Total current liabilities | 1,368,490 | 536,429 |
Stockholders' equity | ' | ' |
Preferred stock, $.001 par value; 15,000,000 shares authorized;150 and 200 shares issued and outstanding at June 30, 2014 and December 31, 2013, respectively | ' | ' |
Common stock, $.001 par value; 100,000,000 shares authorized; 55,721,075 and 48,700,929 shares issued and outstanding at June 30, 2014 and December 31, 2013, respectively | 55,049 | 48,702 |
Additional paid-in capital | 26,558,183 | 8,944,784 |
Common stock issuable | 1,635,652 | ' |
Common stock held in escrow | 8,441 | 8,441 |
Accumulated deficit | -27,742,018 | -8,962,110 |
Total stockholders' equity | 515,307 | 39,817 |
Total liabilities and stockholders' equity | $1,883,797 | $576,246 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Stockholders' equity | ' | ' |
Preferred stock par value | $0.00 | $0.00 |
Preferred stock shares authorized | 15,000,000 | 15,000,000 |
Preferred stock shares issued | 150 | 200 |
Preferred stock shares outstanding | 150 | 200 |
Common stock par value | $0.00 | $0.00 |
Common stock shares authorized | 100,000,000 | 100,000,000 |
Common stock shares issued | 55,721,075 | 48,700,929 |
Common stock shares outstanding | 55,721,075 | 48,700,929 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations (Unaudited) (USD $) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Condensed Consolidated Statements Of Operations | ' | ' | ' | ' |
Revenue | ' | ' | ' | ' |
Cost of goods sold | ' | ' | ' | ' |
Gross profit | ' | ' | ' | ' |
Operating expenses | ' | ' | ' | ' |
Payroll and related expenses | 289,850 | ' | 487,361 | ' |
Consulting | 743,005 | 595,314 | 7,245,150 | 1,022,317 |
Professional fees | 213,073 | 38,853 | 316,971 | 86,369 |
Research and development | 259,339 | 87,700 | 435,413 | 89,700 |
General and administrative | 683,449 | 66,912 | 839,708 | 118,922 |
Equity-based compensation | 1,600,000 | ' | 9,550,000 | ' |
Total operating expenses | 3,788,716 | 788,779 | 18,874,603 | 1,317,308 |
Operating loss | -3,788,716 | -788,779 | -18,874,603 | -1,317,308 |
Other income and (expense) | ' | ' | ' | ' |
Interest expense, net | -1,410 | ' | -9,249 | ' |
Gain on settlement of debt | ' | ' | ' | 19,475 |
Net loss | ($3,790,126) | ($788,779) | ($18,883,852) | ($1,297,833) |
Net loss per common share: | ' | ' | ' | ' |
Basic and diluted | ($0.07) | ($0.02) | ($0.36) | ($0.03) |
Weighted average common shares outstanding: | ' | ' | ' | ' |
Basic and diluted | 55,248,993 | 43,505,741 | 52,892,940 | 43,268,781 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) | 6 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Operating Activities: | ' | ' |
Net loss | ($18,883,852) | ($1,297,833) |
Stock issued for services | 596,750 | 373,679 |
Warrants issued for services | 6,395,940 | 349,370 |
Gain on settlement of debt | ' | -19,475 |
Equity-based compensation | 9,550,000 | ' |
Changes in operating assets and liabilities: | ' | ' |
Prepaid expenses | -60,854 | ' |
Accounts payable | -138,322 | 8,425 |
Accounts payable - related party | 534,413 | 122,674 |
Customer deposits - related party | 400,000 | ' |
Accrued payroll liabilities | 3,739 | ' |
Net cash used in operating activities | -1,602,186 | -463,160 |
Investing Activities: | ' | ' |
Intangible assets | -19,583 | -21,225 |
Net cash used by investing activities | -19,583 | -21,225 |
Financing Activities: | ' | ' |
Proceeds from sale of common stock | 2,816,652 | 350,000 |
Proceeds from sale of preferred stock | ' | 900 |
Payments on notes payable - related party | ' | -12,100 |
Bank overdraft | 32,231 | ' |
Net cash provided by (used in) financing activities | 2,848,883 | 338,800 |
Net increase (decrease) in cash | 1,227,114 | -145,585 |
Cash, beginning of period | 477,549 | 194,721 |
Cash, end of period | 1,704,663 | 49,136 |
Cash paid for interest | ' | ' |
Description_of_Business_and_Su
Description of Business and Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2014 | |
Notes to Financial Statements | ' |
Note 1 - Description of Business and Summary of Significant Accounting Policies | ' |
Description of Business | |
HPEV, Inc., (we, us, our, the “Company” or “HPEV”) was incorporated in the State of Nevada in July 2002, and Ultimate Power Truck, LLC (“Ultimate Power Truck”), our wholly-owned subsidiary, was formed in April 2014. We are formerly known as Bibb Corporation and Z3 Enterprises. We have developed and intend to commercialize dispersion technologies in various product platforms, and have developed and intend to commercialize an electric load assist technology around which we have designed a vehicle retrofit system. In preparation, we have applied for trademarks for one of our technologies and its acronym. The Company currently has two trademarks in the application process: HPEV and TEHPC. We believe that our proprietary technologies, including our patent portfolio and trade secrets, can help increase the efficiency and positively affect manufacturing cost structure in several large industries beginning with motor/generator and fleet vehicles. The markets for products utilizing our technology include consumer, industrial and military markets, both in the U.S. and worldwide. As of June 30, 2014, we have 5 patents and 5 patent applications pending in the area of composite heat structures, motors, and related structures, heat pipe architecture, applications (commonly referred to as “thermal” or “heat dispersion technology”) and a parallel vehicle power platform. The Company intends to commercialize our patents by licensing our thermal technologies and applications to electric motor, pump and vehicle component manufacturers; by licensing or selling a mobile electric power system powered by the Company’s proprietary gearing system to commercial vehicle and fleet owners; and by licensing a plug-in hybrid conversion system for heavy duty trucks, buses and tractor trailers to fleet owners and service centers. | |
Basis of Presentation | |
The accompanying condensed consolidated balance sheet as of December 31, 2013, has been derived from audited financial statements. The accompanying unaudited interim condensed consolidated financial statements have been prepared on the same basis as the annual audited financial statements and in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial statements. In the opinion of management, such unaudited information includes all adjustments (consisting only of normal recurring accruals) necessary for a fair presentation of this interim information. All intercompany transactions have been eliminated in consolidation. Operating results and cash flows for interim periods are not necessarily indicative of results that can be expected for the entire year. The information included in this report should be read in conjunction with our audited financial statements and notes thereto included in our Annual Report on Form 10-K/A for the year ended December 31, 2013. | |
Going Concern | |
The accompanying condensed consolidated financial statements have been prepared assuming we will continue as a going concern. We have incurred net losses since inception and have not fully commenced operations, raising substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern is dependent on our ability to generate revenue, achieve profitable operations and repay our obligations when they come due. We have entered into an agreement whereby we may sell up to $10,000,000 of our common stock to Lincoln Park Capital Fund LLC, subject to certain limitations over a 36-month period. These condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty. As of the filing date of this Quarterly Report on Form 10-Q, management believes that it has adequate funding to ensure completion of the initial phases of the Company’s business plan: to license its thermal technologies and applications, including submersible dry-pit applications; to license and sell mobile generation retrofit kits (our Ultimate Power Truck business) driven by our proprietary gearing system; and to license a plug-in hybrid conversion system for heavy duty trucks, tractor trailers and buses. There can be no assurance, however, that we will be successful in accomplishing these objectives. | |
Recently Issued Accounting Pronouncements | |
On June 10, 2014, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2014-10, Development Stage Entities (Topic 915) – Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation, which eliminates the concept of a development stage entity (DSE) its entirety from current accounting guidance. We have elected early adoption of this standard, which eliminates the designation of DSEs and the requirement to disclose results of operations and cash flows since inception. | |
We have evaluated the recent accounting pronouncements through ASU 2014-12 and believe that none of them will have a material effect on our financial statements. | |
Commitments_and_Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2014 | |
Notes to Financial Statements | ' |
Note 2 - Commitments and Contingencies | ' |
On December 12, 2012, we concluded negotiations on a debt settlement agreement by and among the Company, Phoenix Productions and Entertainment Group (“PPEG”), Action Media Group, LLC (“Action Media”) and Spirit Bear Limited (“Spirit Bear”) (PPEG and Action Media collectively, the “Debt Holders”). The Debt Holders were to return to escrow a total of 4,676,000 shares of our common stock. 3,676,000 of these shares were returned and cancelled on January 14, 2013, following our filing a registration statement with the SEC on January 11, 2013. The remaining 1,000,000 shares will be purchased by the Company or a nominee of the Company at $0.40 per share (or $400,000) at the rate of $10,000 per month commencing within 90 days of the Company achieving $1,000,000 in gross revenues for products or services from business operations. PPEG and Action Media will divide the $400,000 on a pro rata basis, based on each company’s respective amount of debt forgiven. The historical cost of the shares held in escrow are reflected in equity on the balance sheets as common stock held in escrow. | |
We are a party to various legal proceedings with Spirit Bear, which we are defending vigorously. At this time we cannot predict the outcome or estimate the cost to us, if any. Accordingly, we have not recorded any expense or liability associated with these proceedings. If these proceedings are not resolved in our favor, in future periods there may be an impact to our results of operations and financial position. |
Customer_deposits_Related_part
Customer deposits Related party | 6 Months Ended |
Jun. 30, 2014 | |
Notes to Financial Statements | ' |
Note 3 - Customer deposits Related party | ' |
These represent advance payments received on orders that have not yet been fulfilled, with companies controlled by the individual who, as described in Note 7, became a 5% owner of Ultimate Power Truck. |
Equity
Equity | 6 Months Ended | ||||||||||||
Jun. 30, 2014 | |||||||||||||
Notes to Financial Statements | ' | ||||||||||||
Note 4 - Equity | ' | ||||||||||||
We routinely issue warrants in exchange for services, as well as to settle long-term debt. The following is a summary of warrant activity: | |||||||||||||
Number of Warrants | Weighted-average Exercise Price | Weighted-average Remaining Life (Years) | |||||||||||
Outstanding, December 31, 2013 | 15,105,329 | $ | 0.5 | 2.2 | |||||||||
Granted | 11,203,113 | 0.66 | |||||||||||
Exercised | (1,123,138 | ) | 0.32 | ||||||||||
Outstanding, June 30, 2014 | 25,185,304 | 0.58 | 2.8 | ||||||||||
Exercisable, June 30, 2014 | 24,985,304 | 0.58 | 2.8 | ||||||||||
The fair value of each warrant is estimated on the date of grant using the Black-Scholes option pricing model (“Black-Scholes”). We use historical data to estimate the expected price volatility, the expected life and the expected forfeiture rate. The risk-free interest rate is based on the United States Treasury yield curve in effect at the time of the grant for the estimated life of the warrant. The following summarizes the Black-Scholes assumptions used for warrant grants that were expensed: | |||||||||||||
Six months ended June 30, | |||||||||||||
2014 | 2013 | ||||||||||||
Volatility | 320 – 330 % | 325 – 360 % | |||||||||||
Risk-free interest rate | 0.6 – 1.6 % | 0.2 – 1.0 % | |||||||||||
Expected life (years) | 2.5 – 5.0 | 2.5 – 5.0 | |||||||||||
Dividend yield | - | - | |||||||||||
During the six months ended June 30, 2014, we entered into an agreement whereby we may sell up to $10,000,000 of our common stock to Lincoln Park Capital Fund LLC. As part of entering into that agreement, we issued 671,785 shares of common stock for no consideration |
Equitybased_Compensation
Equity-based Compensation | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Notes to Financial Statements | ' | ||||||||||||||||
Note 5 - Equity-based Compensation | ' | ||||||||||||||||
Amounts recognized in the condensed consolidated financial statements related to equity-based compensation are as follows: | |||||||||||||||||
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Total cost of stock-based compensation charged against income | $ | 1,600,000 | $ | -- | $ | 9,550,000 | $ | -- | |||||||||
Impact on net loss per common share: | |||||||||||||||||
Basic and diluted | $ | (0.03 | ) | $ | -- | $ | (0.18 | ) | $ | -- | |||||||
The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model (“Black-Scholes”). We use historical data to estimate the expected price volatility, the expected stock option life and expected forfeiture rate. The risk-free interest rate is based on the United States Treasury yield curve in effect at the time of grant for the estimated life of the stock option. The following summarizes the Black-Scholes assumptions used for stock option grants: | |||||||||||||||||
Six months ended June 30, | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Volatility | 320 - 325% | - | |||||||||||||||
Risk-free interest rate | 2.70% | - | |||||||||||||||
Expected stock option life (years) | 10 | - | |||||||||||||||
Dividend yield | - | - | |||||||||||||||
The following is a summary of stock option activity: | |||||||||||||||||
Number of Shares | Weighted-average Exercise Price per Share | Weighted-average Remaining Contractual Term | Aggregate Intrinsic Value | ||||||||||||||
Outstanding, December 31, 2013 | - | ||||||||||||||||
Stock options granted | 6,000,000 | $ | 1.92 | No expiration | $ | - | |||||||||||
Outstanding, June 30, 2014 | 6,000,000 | $ | 1.92 | No expiration | $ | - | |||||||||||
Exercisable, June 30, 2014 | 6,000,000 | $ | 1.92 | No expiration | $ | - |
Net_Loss_per_Share
Net Loss per Share | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Notes to Financial Statements | ' | ||||||||||||||||
Note 6 - Net Loss per Share | ' | ||||||||||||||||
Basic net loss per share is computed by dividing net loss by the weighted-average number of common shares outstanding during the reporting period. Diluted net loss per share is computed similarly to basic loss per share, except that it includes the potential dilution that could occur if dilutive securities are exercised. | |||||||||||||||||
The following table presents a reconciliation of the denominators used in the computation of net loss per share – basic and diluted: | |||||||||||||||||
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Net loss available for stockholders | $ | (3,790,126 | ) | $ | (788,779 | ) | $ | (18,883,852 | ) | $ | (1,297,833 | ) | |||||
Weighted average outstanding shares of common stock | 55,248,993 | 43,505,741 | 52,892,940 | 43,268,781 | |||||||||||||
Dilutive effect of stock options and warrants | -- | -- | -- | -- | |||||||||||||
Common stock and equivalents | 55,248,993 | 43,505,741 | 52,892,940 | 43,268,781 | |||||||||||||
Net loss per share – Basic and diluted | $ | (0.07 | ) | $ | (0.02 | ) | $ | (0.36 | ) | $ | (0.03 | ) | |||||
Outstanding stock options and common stock warrants are considered anti-dilutive because we are in a net loss position. |
Subsequent_Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2014 | |
Notes to Financial Statements | ' |
Note 7 - Subsequent Events | ' |
On July 1, 2014, we entered into a 36 month independent contractor agreement with PGC Investments LLC (“PGC Agreement”), to manage the day-to-day operations of Ultimate Power Truck. The PGC Agreement includes monthly cash compensation, warrants in our common stock and shares of our common stock, as follows: a) 350,000 cashless warrants with a strike price of $1.00 that vest upon reaching revenues of $1,000,000; b) 1,530,000 cashless warrants with a strike price of $1.00 that vest ratably upon reaching incremental revenues of $3,000,000 with a total target revenue of $100,000,000; c) 720,000 cashless warrants with a strike price of $1.00 that vest ratably over 36 months; and d) 500,000 shares of our common stock that vest upon reaching revenues of $100,000,000 or upon sale of the Company. | |
On July 30, 2014, we reached preliminary terms on an LLC Agreement (the “Preliminary LLC Agreement”) with Alfred A. Cullere (“Cullere”) concerning the governance and operations of Ultimate Power Truck. Under the terms of the Preliminary LLC Agreement, we would own 95% of the membership interests and Cullere would own 5%. Cullere’s interest cannot be diluted, even if additional membership interests are issued. These terms may change upon formalizing the final agreement. |
Description_of_Business_and_Su1
Description of Business and Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2014 | |
Description Of Business And Summary Of Significant Accounting Policies Policies | ' |
Description of Business | ' |
HPEV, Inc., (we, us, our, the “Company” or “HPEV”) was incorporated in the State of Nevada in July 2002, and Ultimate Power Truck, LLC (“Ultimate Power Truck”), our wholly-owned subsidiary, was formed in April 2014. We are formerly known as Bibb Corporation and Z3 Enterprises. We have developed and intend to commercialize dispersion technologies in various product platforms, and have developed and intend to commercialize an electric load assist technology around which we have designed a vehicle retrofit system. In preparation, we have applied for trademarks for one of our technologies and its acronym. The Company currently has two trademarks in the application process: HPEV and TEHPC. We believe that our proprietary technologies, including our patent portfolio and trade secrets, can help increase the efficiency and positively affect manufacturing cost structure in several large industries beginning with motor/generator and fleet vehicles. The markets for products utilizing our technology include consumer, industrial and military markets, both in the U.S. and worldwide. As of June 30, 2014, we have 5 patents and 5 patent applications pending in the area of composite heat structures, motors, and related structures, heat pipe architecture, applications (commonly referred to as “thermal” or “heat dispersion technology”) and a parallel vehicle power platform. The Company intends to commercialize our patents by licensing our thermal technologies and applications to electric motor, pump and vehicle component manufacturers; by licensing or selling a mobile electric power system powered by the Company’s proprietary gearing system to commercial vehicle and fleet owners; and by licensing a plug-in hybrid conversion system for heavy duty trucks, buses and tractor trailers to fleet owners and service centers. | |
Basis of Presentation | ' |
The accompanying condensed consolidated balance sheet as of December 31, 2013, has been derived from audited financial statements. The accompanying unaudited interim condensed consolidated financial statements have been prepared on the same basis as the annual audited financial statements and in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial statements. In the opinion of management, such unaudited information includes all adjustments (consisting only of normal recurring accruals) necessary for a fair presentation of this interim information. All intercompany transactions have been eliminated in consolidation. Operating results and cash flows for interim periods are not necessarily indicative of results that can be expected for the entire year. The information included in this report should be read in conjunction with our audited financial statements and notes thereto included in our Annual Report on Form 10-K/A for the year ended December 31, 2013. | |
Going Concern | ' |
The accompanying condensed consolidated financial statements have been prepared assuming we will continue as a going concern. We have incurred net losses since inception and have not fully commenced operations, raising substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern is dependent on our ability to generate revenue, achieve profitable operations and repay our obligations when they come due. We have entered into an agreement whereby we may sell up to $10,000,000 of our common stock to Lincoln Park Capital Fund LLC, subject to certain limitations over a 36-month period. These condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty. As of the filing date of this Quarterly Report on Form 10-Q, management believes that it has adequate funding to ensure completion of the initial phases of the Company’s business plan: to license its thermal technologies and applications, including submersible dry-pit applications; to license and sell mobile generation retrofit kits (our Ultimate Power Truck business) driven by our proprietary gearing system; and to license a plug-in hybrid conversion system for heavy duty trucks, tractor trailers and buses. There can be no assurance, however, that we will be successful in accomplishing these objectives. | |
Recently Issued Accounting Pronouncements | ' |
On June 10, 2014, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2014-10, Development Stage Entities (Topic 915) – Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation, which eliminates the concept of a development stage entity (DSE) its entirety from current accounting guidance. We have elected early adoption of this standard, which eliminates the designation of DSEs and the requirement to disclose results of operations and cash flows since inception. | |
We have evaluated the recent accounting pronouncements through ASU 2014-12 and believe that none of them will have a material effect on our financial statements. |
Equity_Tables
Equity (Tables) | 6 Months Ended | ||||||||||||||
Jun. 30, 2014 | |||||||||||||||
Summary of warrant activity: | ' | ||||||||||||||
The following is a summary of stock option activity: | |||||||||||||||
Number of Shares | Weighted-average Exercise Price per Share | Weighted-average Remaining Contractual Term | Aggregate Intrinsic Value | ||||||||||||
Outstanding, December 31, 2013 | - | ||||||||||||||
Stock options granted | 6,000,000 | $ | 1.92 | No expiration | $ | - | |||||||||
Outstanding, June 30, 2014 | 6,000,000 | $ | 1.92 | No expiration | $ | - | |||||||||
Exercisable, June 30, 2014 | 6,000,000 | $ | 1.92 | No expiration | $ | - | |||||||||
Fair value of each warrant award | ' | ||||||||||||||
The following summarizes the Black-Scholes assumptions used for stock option grants: | |||||||||||||||
Six months ended June 30, | |||||||||||||||
2014 | 2013 | ||||||||||||||
Volatility | 320 - 325% | - | |||||||||||||
Risk-free interest rate | 2.70% | - | |||||||||||||
Expected stock option life (years) | 10 | - | |||||||||||||
Dividend yield | - | - | |||||||||||||
Warrant [Member] | ' | ||||||||||||||
Summary of warrant activity: | ' | ||||||||||||||
We routinely issue warrants in exchange for services, as well as to settle long-term debt. The following is a summary of warrant activity: | |||||||||||||||
Number of Warrants | Weighted-average Exercise Price | Weighted-average Remaining Life (Years) | |||||||||||||
Outstanding, December 31, 2013 | 15,105,329 | $ | 0.5 | 2.2 | |||||||||||
Granted | 11,203,113 | 0.66 | |||||||||||||
Exercised | (1,123,138 | ) | 0.32 | ||||||||||||
Outstanding, June 30, 2014 | 25,185,304 | 0.58 | 2.8 | ||||||||||||
Exercisable, June 30, 2014 | 24,985,304 | 0.58 | 2.8 | ||||||||||||
Fair value of each warrant award | ' | ||||||||||||||
The fair value of each warrant is estimated on the date of grant using the Black-Scholes option pricing model (“Black-Scholes”). We use historical data to estimate the expected price volatility, the expected life and the expected forfeiture rate. The risk-free interest rate is based on the United States Treasury yield curve in effect at the time of the grant for the estimated life of the warrant. The following summarizes the Black-Scholes assumptions used for warrant grants that were expensed: | |||||||||||||||
Six months ended June 30, | |||||||||||||||
2014 | 2013 | ||||||||||||||
Volatility | 320 – 330 % | 325 – 360 % | |||||||||||||
Risk-free interest rate | 0.6 – 1.6 % | 0.2 – 1.0 % | |||||||||||||
Expected life (years) | 2.5 – 5.0 | 2.5 – 5.0 | |||||||||||||
Dividend yield | - | - |
Equitybased_Compensation_Table
Equity-based Compensation (Tables) | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Equity-Based Compensation Tables | ' | ||||||||||||||||
Financial statements related to equity-based compensation | ' | ||||||||||||||||
Amounts recognized in the condensed consolidated financial statements related to equity-based compensation are as follows: | |||||||||||||||||
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Total cost of stock-based compensation charged against income | $ | 1,600,000 | $ | -- | $ | 9,550,000 | $ | -- | |||||||||
Impact on net loss per common share: | |||||||||||||||||
Basic and diluted | $ | (0.03 | ) | $ | -- | $ | (0.18 | ) | $ | -- | |||||||
Fair value of each option award | ' | ||||||||||||||||
The following summarizes the Black-Scholes assumptions used for stock option grants: | |||||||||||||||||
Six months ended June 30, | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Volatility | 320 - 325% | - | |||||||||||||||
Risk-free interest rate | 2.70% | - | |||||||||||||||
Expected stock option life (years) | 10 | - | |||||||||||||||
Dividend yield | - | - | |||||||||||||||
Stock option activity | ' | ||||||||||||||||
The following is a summary of stock option activity: | |||||||||||||||||
Number of Shares | Weighted-average Exercise Price per Share | Weighted-average Remaining Contractual Term | Aggregate Intrinsic Value | ||||||||||||||
Outstanding, December 31, 2013 | - | ||||||||||||||||
Stock options granted | 6,000,000 | $ | 1.92 | No expiration | $ | - | |||||||||||
Outstanding, June 30, 2014 | 6,000,000 | $ | 1.92 | No expiration | $ | - | |||||||||||
Exercisable, June 30, 2014 | 6,000,000 | $ | 1.92 | No expiration | $ | - |
Net_Loss_per_Share_Tables
Net Loss per Share (Tables) | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Net Loss Per Share Tables | ' | ||||||||||||||||
Components of loss per share | ' | ||||||||||||||||
The following table presents a reconciliation of the denominators used in the computation of net loss per share – basic and diluted: | |||||||||||||||||
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Net loss available for stockholders | $ | (3,790,126 | ) | $ | (788,779 | ) | $ | (18,883,852 | ) | $ | (1,297,833 | ) | |||||
Weighted average outstanding shares of common stock | 55,248,993 | 43,505,741 | 52,892,940 | 43,268,781 | |||||||||||||
Dilutive effect of stock options and warrants | -- | -- | -- | -- | |||||||||||||
Common stock and equivalents | 55,248,993 | 43,505,741 | 52,892,940 | 43,268,781 | |||||||||||||
Net loss per share – Basic and diluted | $ | (0.07 | ) | $ | (0.02 | ) | $ | (0.36 | ) | $ | (0.03 | ) |
Equity_Details
Equity (Details) (USD $) | 6 Months Ended |
Jun. 30, 2014 | |
Equity Details | ' |
Number of Shares, Outstanding at Beginning Balace | 15,105,329 |
Number of Shares, Granted | 11,203,113 |
Number of Shares, Exercised | -1,123,138 |
Number of Shares, Outstanding at Ending Balance | 25,185,304 |
Number of Shares, Exercisable | 24,985,304 |
Weighted-Average Exercise Price, Outstanding at Beginning Balace | $0.50 |
Weighted-Average Exercise Price, Granted | $0.66 |
Weighted-Average Exercise Price, Exercised | $0.32 |
Weighted-Average Exercise Price, Outstanding at Ending Balance | $0.58 |
Weighted-Average Exercise Price, Exercisable | $0.58 |
Weighted-Average Remaining Life (Years), Outstanding at Beginning Balace | '2 years 2 months 12 days |
Weighted-Average Remaining Life (Years), Outstanding at Ending Balance | '2 years 9 months 18 days |
Weighted-Average Remaining Life (Years), Exercisable | '2 years 9 months 18 days |
Equity_Details_1
Equity (Details 1) (USD $) | 6 Months Ended | |||||||||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Minimum [Member] | Maximum [Member] | Warrant [Member] | Warrant [Member] | Warrant [Member] | Warrant [Member] | Warrant [Member] | Warrant [Member] | |||
Minimum [Member] | Minimum [Member] | Maximum [Member] | Maximum [Member] | |||||||
Volatility | ' | ' | 320.00% | 325.00% | ' | 0.00% | 320.00% | 325.00% | 330.00% | 360.00% |
Risk-free interest rate | 2.70% | ' | ' | ' | ' | 0.00% | 6.00% | 0.20% | 1.60% | 0.10% |
Expected life (years) | '10 years | ' | ' | ' | ' | ' | '2 years 6 months | '2 years 6 months | '5 years | '5 years |
Dividend yield | ' | ' | ' | ' | $0 | $0 | ' | ' | ' | ' |
Equity_Details_Narrative
Equity (Details Narrative) (USD $) | 6 Months Ended |
Jun. 30, 2014 | |
Equity Details Narrative | ' |
Common stock to Lincoln Park Capital Fund LLC | $10,000,000 |
Equitybased_Compensation_Detai
Equity-based Compensation (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Equity-Based Compensation Details | ' | ' | ' | ' |
Total cost of stock-based compensation charged against income | $1,600,000 | ' | $9,550,000 | ' |
Impact on net loss per common share: | ' | ' | ' | ' |
Basic and diluted | ($0.03) | ' | ($0.18) | ' |
Equitybased_Compensation_Detai1
Equity-based Compensation (Details 1) (USD $) | 6 Months Ended | |||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Minimum [Member] | Maximum [Member] | |||
Volatility | ' | ' | 320.00% | 325.00% |
Risk-free interest rate | 2.70% | ' | ' | ' |
Expected stock option life (years) | '10 years | ' | ' | ' |
Dividend yield | ' | ' | ' | ' |
Equitybased_Compensation_Detai2
Equity-based Compensation (Details Narrative) (USD $) | 6 Months Ended |
Jun. 30, 2014 | |
Notes to Financial Statements | ' |
Number of Shares Outstanding, December 31, 2013 | ' |
Number of Shares Stock options granted | 11,203,113 |
Number of Shares Outstanding, June 30, 2014 | 6,000,000 |
Number of Shares Exercisable, June 30, 2014 | 6,000,000 |
Weighted-average Exercise Price per Share Outstanding, December 31, 2013 | $1.92 |
Weighted-average Exercise Price per Share Stock options granted | $0.66 |
Weighted-average Exercise Price per Share Outstanding, June 30, 2014 | $1.92 |
Weighted-average Exercise Price per Share Exercisable, June 30, 2014 | $1.92 |
Aggregate Intrinsic Value Outstanding, December 31, 2013 | ' |
Aggregate Intrinsic Value Stock options granted | ' |
Aggregate Intrinsic Value Outstanding, June 30, 2014 | ' |
Aggregate Intrinsic Value Exercisable, June 30, 2014 | ' |
Net_Loss_per_Share_Details
Net Loss per Share (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Net Loss Per Share Details | ' | ' | ' | ' |
Net loss available for stockholders | ($3,790,126) | ($788,779) | ($18,883,852) | ($1,297,833) |
Weighted average outstanding shares of common stock | 55,248,993 | 43,505,741 | 52,892,940 | 43,268,781 |
Dilutive effect of stock options and warrants | ' | ' | ' | ' |
Common stock and equivalents | 55,248,993 | 43,505,741 | 52,892,940 | 43,268,781 |
Net loss per share - Basic and diluted | ($0.07) | ($0.02) | ($0.36) | ($0.03) |