Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Mar. 20, 2015 | |
Non-Employee Stock Based Compensation | ||
Entity Registrant Name | HPEV, INC. | |
Entity Central Index Key | 1399352 | |
Document Type | 10-Q | |
Document Period End Date | 30-Sep-13 | |
Amendment Flag | TRUE | |
Amendment Description | We are filing this Amendment No. 1 on Form 10-Q/A to amend and restate in their entirety Part I of our Quarterly Report on Form 10-Q for the quarter ended September 30, 2013, as originally filed with the Securities and Exchange Commission on November 19, 2013. This Form 10-Q/A includes Exhibits 31.1, 31.2, 32.1 and 32.2, new certifications by our principal executive officer and principal financial officer, as required by Rule 12b-15. | |
During the closing process for our December 31, 2013 Annual Report on Form 10-K, accounting errors were discovered that required restatement of amounts previously reported, related to under-accrued consulting fees, warrants issued for services, and shares issued for cash.. Additionally, during the analysis of the restatement for the three and nine months ended September 30, 2013, we identified an error in the statement of operations for the nine months ended September 30, 2012, that were presented for comparative purposes in our September 30, 2013 Form 10-Q, related to the return of previously issued shares resulting in the reversal of expense. As a result of correcting these errors, our net loss decreased by $105,423 for the three months ended September 30, 2013, increased by $247,846 for the nine months ended September 30, 2013, and decreased $2,650,000 for the nine months ended September 30, 2012. | ||
Current Fiscal Year End Date | -19 | |
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 | 61,728,102 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2013 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Restated [Member] | ||
Current assets | ||
Cash | $889,420 | |
Prepaid finance costs | ||
Total current assets | 889,420 | |
Intangibles | 98,697 | |
Total assets | 988,117 | |
Current liabilities | ||
Accounts payable | 210,237 | |
Accrued liabilities - related parties | 208,250 | |
Notes payable - related party | 22,910 | |
Total current liabilities | 441,397 | |
Commitments and contingencies (Note 3) | ||
Stockholders' equity | ||
Preferred stock, $.001 par value; 15,000,000 shares authorized; 199 and 200 shares issued and outstanding at September 30, 2013 and December 31, 2012, respectively | ||
Common stock: $.001 par value: 100,000,000 shares authorized, 47,695,373 and 42,970,441 shares issued and outstanding at September 30, 2013 and December 31, 2012, respectively | 47,696 | |
Additional paid-in capital | 8,198,592 | |
Common stock held in escrow | 8,441 | |
Accumulated deficit | -7,708,009 | |
Total stockholders' equity | 546,720 | |
Total liabilities and stockholders' equity | 988,117 | |
Previously Restated [Member] | ||
Current assets | ||
Cash | 194,721 | |
Prepaid finance costs | 373,679 | |
Total current assets | 568,400 | |
Intangibles | 73,582 | |
Total assets | 641,982 | |
Current liabilities | ||
Accounts payable | 177,280 | |
Accrued liabilities - related parties | 52,305 | |
Notes payable - related party | 34,110 | |
Total current liabilities | 263,695 | |
Commitments and contingencies (Note 3) | ||
Stockholders' equity | ||
Preferred stock, $.001 par value; 15,000,000 shares authorized; 199 and 200 shares issued and outstanding at September 30, 2013 and December 31, 2012, respectively | ||
Common stock: $.001 par value: 100,000,000 shares authorized, 47,695,373 and 42,970,441 shares issued and outstanding at September 30, 2013 and December 31, 2012, respectively | 42,970 | |
Additional paid-in capital | 6,116,420 | |
Common stock held in escrow | 39,469 | |
Accumulated deficit | -5,820,572 | |
Total stockholders' equity | 378,287 | |
Total liabilities and stockholders' equity | $641,982 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Restated [Member] | ||
Stockholders' equity | ||
Preferred stock par value | $0.00 | |
Preferred stock shares authorized | 15,000,000 | |
Preferred stock shares issued | 199 | |
Preferred stock shares outstanding | 199 | |
Common stock par value | $0.00 | |
Common stock shares authorized | 100,000,000 | |
Common stock shares issued | 47,695,373 | |
Common stock shares outstanding | 47,695,373 | |
Previously Restated [Member] | ||
Stockholders' equity | ||
Preferred stock par value | $0.00 | |
Preferred stock shares authorized | 15,000,000 | |
Preferred stock shares issued | 200 | |
Preferred stock shares outstanding | 200 | |
Common stock par value | $0.00 | |
Common stock shares authorized | 100,000,000 | |
Common stock shares issued | 42,970,441 | |
Common stock shares outstanding | 42,970,441 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations (Unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Weighted average common shares outstanding: | ||||
Basic and diluted | 46,181,529 | 47,646,411 | 45,545,420 | 47,864,741 |
Restated [Member] | ||||
Revenues | ||||
Cost of goods sold | ||||
Gross profit | ||||
Operating expenses | ||||
Consulting | 30,615 | 491,923 | 1,052,932 | 1,398,002 |
Professional fees | 142,635 | 139,450 | 229,004 | 362,616 |
Research and development | 212,389 | 4,744 | 302,089 | 453,875 |
General and administrative | 203,965 | 4,620 | 322,887 | 84,053 |
Director stock compensation | -2,650,000 | |||
Total operating expense (gain) | 589,604 | 640,737 | 1,906,912 | -351,454 |
Operating income (loss) | -589,604 | -640,737 | -1,906,912 | 351,454 |
Other income and (expense) | ||||
Interest expense, net | -70,685 | -73,613 | ||
Finance cost | -315,773 | -513,599 | ||
Gain on settlement of debt | 19,475 | |||
Net loss | -589,604 | -1,027,195 | -1,887,437 | -235,758 |
Net loss per common share: | ||||
Basic and diluted | -0.01 | -0.02 | -0.04 | 0 |
Weighted average common shares outstanding: | ||||
Basic and diluted | 46,181,529 | 47,646,411 | 45,545,420 | 47,864,741 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Cash Flows (Unaudited) (Restated [Member], USD $) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Restated [Member] | ||
Operating Activities: | ||
Net loss | ($1,887,437) | ($235,758) |
Adjustments to reconcile Net loss to net cash used in operating activities: | ||
Stock issued for services | 373,679 | 1,201,520 |
Warrants issued for services | 349,370 | |
Warrants issued for interest | 209,258 | |
Warrants issued for loan penalties | 68,233 | |
Gain on settlement of debt | -19,475 | |
Director stock compensation | -2,650,000 | |
Amortization of financing cost | 513,599 | |
Changes in operating assets and liabilities: | ||
Accounts payable | 58,932 | 272,627 |
Accrued interest | 5,380 | |
Accrued liabilities - related parties | 155,945 | 66,500 |
Net cash used in operating activities | -968,986 | -548,641 |
Investing Activities: | ||
Intangible assets | -25,115 | -25,193 |
Net cash used in investing activities | -25,115 | -25,193 |
Financing Activities: | ||
Proceeds from sale of common stock | 1,700,000 | 5,000 |
Proceeds from notes payable | 436,222 | |
Proceeds from notes payable - related party | 900 | 55,470 |
Payments on notes payable - related party | -12,100 | -1,200 |
Net cash provided by financing activities | 1,688,800 | 495,492 |
Net increase (decrease) in cash | 694,699 | -78,342 |
Cash, beginning of period | 194,721 | 78,361 |
Cash, end of period | 889,420 | 19 |
Cash paid for: | ||
Interest | ||
Income taxes |
1_Description_of_Business_and_
1. Description of Business and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2013 | |
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. We were 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. 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. | |
Our technologies are divided into three distinct but complementary categories: heat dispersion technology, mobile electric power and electric load assist. As of September 30, 2013, 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. We intend 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 our 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, 2012, 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, 2012. | |
The condensed consolidated financial statements as of and for the three and nine months ended September 30, 2013 and 2012, have been restated (see Note 8). | |
Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications had no impact on net earnings or financial position. | |
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/A, management believes that it has adequate funding to ensure completion of the initial phases of our 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 | |
In June, 2014, the FASB issued 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 other recent accounting pronouncements through ASU 2015-02 and believe that none of them will have a material effect on our financial statements. |
2_Debt
2. Debt | 9 Months Ended |
Sep. 30, 2013 | |
Notes to Financial Statements | |
Note 2 - Debt | As of December 31, 2011, we had interest-free debt of $911,894 with Phoenix Productions and Entertainment Group (“PPEG”). |
In March 2012, we borrowed $250,000 under a 3% note with Action Media Group, LLC (“Action Media”). | |
In April, May, June and July of 2012, we borrowed a total of $186,222 from Spirit Bear Limited (“Spirit Bear”), payable within 180 days from each date of funding. We also granted 665,374 common stock warrants to Spirit Bear with an exercise price of $0.35 per share. We estimated the value of the warrants using the Black-Scholes option pricing model with the following assumptions: volatility of 250%, risk-free interest rate of 0.33%, expected life of two years and no dividend yield. We recorded the estimated value of the warrants of $622,253 as prepaid financing costs and recorded the amortization of the expense as financing costs. | |
In December 2012, we negotiated a debt settlement agreement with PPEG, Action Media and Spirit Bear (“Debt Settlement Agreement”). Under the terms of the debt settlement agreement, PPEG and Action Media forgave the debt of $911,894 and $250,000, respectively. We entered into an agreement with Spirit Bear pursuant to which we sold 200 shares of our Series A Convertible Preferred Stock and three separate tranches of warrants to 2,000,000 shares of our common stock, for a total of 6,000,000 warrants. The exercise prices the warrants within each tranche were $0.35, $0.50 and $0.75 per share. In consideration, we received $313,777 in cash and $186,222 for the settlement of the debt with Spirit Bear. |
3_Commitments_and_Contingencie
3. Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2013 | |
Notes to Financial Statements | |
Note 3 - Commitments and Contingencies | In December, 2012, pursuant to the Debt Settlement Agreement, PPEG and Action Media 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 adverse impact to our results of operations and financial position. | |
4_Equity
4. Equity | 9 Months Ended |
Sep. 30, 2013 | |
Notes to Financial Statements | |
Note 4 - Equity | Common Stock |
In April 2012, we amended our articles of incorporation to increase our authorized shares of common stock to 100,000,000. | |
In April 2012, a director of the Company returned 5,000,000 shares that had been issued to him by a shareholder as compensation, resulting in a reversal of expense of $2,650,000. |
5_Equitybased_compensation
5. Equity-based compensation | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Notes to Financial Statements | |||||||||||||||||
Note 5 - Equity-based compensation | Amounts recognized in the condensed consolidated statements of operations related to equity-based compensation are as follows: | ||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Total expense charged against income | $ | -- | $ | 217,612 | $ | 723,049 | $ | 1,992,610 | |||||||||
Impact on net loss per common share: | |||||||||||||||||
Basic and diluted | $ | -- | $ | (0.00 | ) | $ | (0.02 | ) | $ | (0.04 | ) | ||||||
Common stock | |||||||||||||||||
We may issue our common stock to non-employees in exchange for services, financing costs and interest. | |||||||||||||||||
Common stock warrants - Overview | |||||||||||||||||
We routinely issue warrants for our common stock to non-employees in exchange for services, as part of the sale of our common stock, or to settle long-term debt, including penalties and interest. Historically, we have issued warrants that are fully-vested at the date of grant. | |||||||||||||||||
Common stock warrants -- Fully-vested | |||||||||||||||||
The following summarizes the activity for warrants that were fully-vested upon issuance: | |||||||||||||||||
Number of Warrants | Weighted-average Exercise Price | Weighted-average Remaining Life (Years) | Aggregate Intrinsic Value | ||||||||||||||
Outstanding, December 31, 2012 | 8,395,004 | $ | 0.47 | 2.4 | $ | 238,044 | |||||||||||
Granted | 4,685,019 | 0.69 | 23,333 | ||||||||||||||
Exercised | (100,000 | ) | 0.28 | ||||||||||||||
Outstanding, September 30, 2013 | 12,980,023 | 0.5 | 2.4 | 249,877 | |||||||||||||
Exercisable, September 30, 2013 | 12,980,023 | 0.5 | 2.4 | 249,877 | |||||||||||||
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 fully-vested warrant grants that were expensed: | |||||||||||||||||
Nine months ended September 30, | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
Volatility | 325 – 360 % | 245 – 250 % | |||||||||||||||
Risk-free interest rate | 0.2 – 1.2 % | 0.3 – 0.6 % | |||||||||||||||
Expected life (years) | 2.5 – 5.0 | 2 | |||||||||||||||
Dividend yield | -- | -- | |||||||||||||||
Non-employee stock options – Fully-vested | |||||||||||||||||
In 2011, we granted 200,000 stock options to one of our attorneys for services provided. These options were exercised in February 2013 on a cashless basis, and 90,000 shares of common stock were issued. | |||||||||||||||||
Employee stock options – Market-based | |||||||||||||||||
We granted certain options that vest upon the achievement of certain stock prices for 20 days, as follows: | |||||||||||||||||
Market Price | Number of Options | ||||||||||||||||
$ | 2 | 1,000,000 | |||||||||||||||
3 | 1,000,000 | ||||||||||||||||
4 | 1,000,000 | ||||||||||||||||
4.5 | 1,000,000 | ||||||||||||||||
5 | 1,000,000 | ||||||||||||||||
5,000,000 | |||||||||||||||||
The following is a summary of market-based stock option activity: | |||||||||||||||||
Number of Shares | Weighted-average Exercise Price per Share | Weighted-average Remaining Contractual Term | Aggregate Intrinsic Value | ||||||||||||||
Outstanding, December 31, 2012 | 5,000,000 | $ | 3.7 | No expiration | $ | -- | |||||||||||
Stock options granted | -- | ||||||||||||||||
Outstanding, September 30, 2013 | 5,000,000 | 3.7 | No expiration | -- | |||||||||||||
Exercisable, September 30, 2013 | -- | -- |
6_Net_Loss_per_Share
6. Net Loss per Share | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
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 September 30, | Nine months ended September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Net loss available for stockholders | $ | (589,604 | ) | $ | (1,027,195 | ) | $ | (1,887,437 | ) | $ | (235,758 | ) | |||||
Weighted average outstanding shares of common stock | 46,181,529 | 47,646,411 | 45,545,420 | 47,864,741 | |||||||||||||
Dilutive effect of stock options and warrants | -- | -- | -- | -- | |||||||||||||
Common stock and equivalents | 46,181,529 | 47,646,411 | 45,545,420 | 47,864,741 | |||||||||||||
Net loss per share – Basic and diluted | $ | (0.01 | ) | $ | (0.02 | ) | $ | (0.04 | ) | $ | (0.00 | ) | |||||
Outstanding stock options and common stock warrants are considered anti-dilutive because we are in a net loss position. |
7_Subsequent_Events
7. Subsequent Events | 9 Months Ended |
Sep. 30, 2013 | |
Notes to Financial Statements | |
Note 7 - Subsequent Events | In February 2014, we entered into an agreement with Lincoln Park Capital Fund, LLC (“Lincoln Park”), pursuant to which we have the right to sell to Lincoln Park up to $10,000,000 in shares of our common stock, subject to certain limitations, from time to time over a 36-month period commencing on the date that a registration statement is declared effective by the SEC. |
In April 2014, we formed Ultimate Power Truck, LLC (“UPT”), of which we own 95% and a shareholder of HPEV owns 5%. UPT was formed to support and sell our mobile electric power system platform. |
8_Restatements
8. Restatements | 9 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||||
Notes to Financial Statements | |||||||||||||||||||||||||
Note 8 - Restatements | Three and nine months ended September 30, 2013 | ||||||||||||||||||||||||
During the closing process for our December 31, 2013 Annual Report on Form 10-K, accounting errors were discovered that required restatement of amounts previously reported, related to under-accrued consulting fees, warrants issued for services, and shares issued for cash. It was also discovered that 200,000 warrants to be issued to Monarch Bay per the May 28, 2013 agreement had been treated as fully vested. It was subsequently determined that Monarch Bay had not met its contractual obligations and the warrants had not vested. This caused the previously issued financial statements to over-report consulting expense and additional paid in capital. These errors were corrected and properly reflected in our Annual Report on Form 10-K/A as of and for the year ended December 31, 2013. Accordingly, there is no restatement of the December 31, 2013 condensed consolidated balance sheet. We have also reclassified certain amounts to conform to our current period presentation. The following tables reflect the impact of these corrections on our September 30, 2013, statements of operations and cash flows. | |||||||||||||||||||||||||
Condensed Consolidated Statements of Operations | |||||||||||||||||||||||||
Three months ended September 30, 2013 | Nine months ended September 30, 2013 | ||||||||||||||||||||||||
Originally Stated | Adjustments (a) | Restated | Originally Stated | Adjustments (b) | Restated | ||||||||||||||||||||
Gross profit | $ | -- | $ | -- | $ | -- | $ | -- | $ | -- | $ | -- | |||||||||||||
Operating expenses | |||||||||||||||||||||||||
Consulting | 220,493 | (189,878 | ) | 30,615 | 805,086 | 247,846 | 1,052,932 | ||||||||||||||||||
Professional fees | 123,160 | 19,475 | 142,635 | 209,529 | 19,475 | 229,004 | |||||||||||||||||||
Research and development | 212,389 | -- | 212,389 | 302,089 | -- | 302,089 | |||||||||||||||||||
General and administrative | 138,985 | 64,980 | 203,965 | 322,887 | -- | 322,887 | |||||||||||||||||||
Total operating expenses | 695,027 | (105,423 | ) | 589,604 | 1,639,591 | 267,321 | 1,906,912 | ||||||||||||||||||
Operating loss | (695,027 | ) | 105,423 | (589,604 | ) | (1,639,591 | ) | (267,321 | ) | (1,906,912 | ) | ||||||||||||||
Gain on settlement of debt | -- | -- | -- | -- | 19,475 | 19,475 | |||||||||||||||||||
Net loss | $ | (695,027 | ) | $ | 105,423 | $ | (589,604 | ) | $ | (1,639,591 | ) | $ | (247,846 | ) | $ | (1,887,437 | ) | ||||||||
Net loss per common share: | |||||||||||||||||||||||||
Basic and diluted | $ | (0.02 | ) | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.04 | ) | $ | -- | $ | (0.04 | ) | ||||||||
Weighted average common shares outstanding: | |||||||||||||||||||||||||
Basic and diluted | 46,181,529 | 46,181,529 | 46,181,529 | 45,545,420 | 45,545,420 | 45,545,420 | |||||||||||||||||||
(a) To reduce consulting expense for the unvested warrants ($103,944) and to reclassify certain amounts to conform presentation. | |||||||||||||||||||||||||
(b) To record additional consulting expense for warrants issued for services ($349,370), reduce consulting expense for the unvested warrants ($103,944), and to reclassify certain amounts to conform presentation. | |||||||||||||||||||||||||
Condensed Consolidated Statements of Cash Flows | |||||||||||||||||||||||||
Nine months ended September 30, 2013 | |||||||||||||||||||||||||
Originally Stated | Adjustments | Restated | |||||||||||||||||||||||
Operating Activities: | |||||||||||||||||||||||||
Net loss | $ | (1,639,591 | ) | $ | (247,846 | ) | $ | (1,887,437 | ) | (a) | |||||||||||||||
Stock issued for services | 373,679 | -- | 373,679 | ||||||||||||||||||||||
Warrants issued for services | -- | 349,370 | 349,370 | (b) | |||||||||||||||||||||
Gain on settlement of debt | -- | (19,475 | ) | (19,475 | ) | (c) | |||||||||||||||||||
Changes in operating assets and liabilities: | |||||||||||||||||||||||||
Accounts payable | (91,451 | ) | 150,383 | 58,932 | (d) | ||||||||||||||||||||
Accrued liabilities – related party | (52,305 | ) | 208,250 | 155,945 | (e) | ||||||||||||||||||||
Net cash used in operating activities | (1,409,668 | ) | 440,682 | (968,986 | ) | ||||||||||||||||||||
Investing Activities: | |||||||||||||||||||||||||
Intangible assets | (25,115 | ) | -- | (25,115 | ) | ||||||||||||||||||||
Loan receivable | (17,858 | ) | 17,858 | -- | (d) | ||||||||||||||||||||
Net cash used in investing activities | (42,973 | ) | 17,858 | (25,115 | ) | ||||||||||||||||||||
Financing Activities: | |||||||||||||||||||||||||
Proceeds from sale of common stock | 1,950,290 | (250,290 | ) | 1,700,000 | (d) | ||||||||||||||||||||
Proceeds from notes payable – related party | (11,200 | ) | 12,100 | 900 | (e) | ||||||||||||||||||||
Payments on notes payable – related party | 208,250 | (220,350 | ) | (12,100 | ) | (e) | |||||||||||||||||||
Net cash provided by financing activities | 2,147,340 | (458,540 | ) | 1,688,800 | |||||||||||||||||||||
Net increase (decrease) in cash | 694,699 | 694,699 | |||||||||||||||||||||||
Cash, beginning of period | 194,721 | 194,721 | |||||||||||||||||||||||
Cash, end of period | $ | 889,420 | $ | 889,420 | |||||||||||||||||||||
(a) Additional consulting expense for warrants issued for services ($349,370), and reduced consulting expense for the unvested warrants ($103,944). | |||||||||||||||||||||||||
(b) Additional consulting expense for warrants issued for services is a non-cash adjustment. | |||||||||||||||||||||||||
(c) Gain on settlement of debt was previously shown as a change in accounts payable. | |||||||||||||||||||||||||
(d) The above transactions were improperly recorded to accounts payable, loan receivable and equity. | |||||||||||||||||||||||||
(e) Certain accrued liabilities to related parties were improperly categorized as notes payable to related parties. | |||||||||||||||||||||||||
Three and nine months ended September 30, 2012 | |||||||||||||||||||||||||
During the analysis of the restatement for the three and nine months ended September 30, 2013, we identified an error in the statement of operations for the nine months ended September 30, 2012, that were presented for comparative purposes in our September 30, 2013 10-Q. In April 2012, a director of the Company returned 5,000,000 shares that had been issued to him by a shareholder as compensation, resulting in a reversal of expense of $2,650,000. This was not reflected in the statement of operations for the nine months ended September 30, 2012, however, it was included in the September 30, 2012 10-Q. We have also reclassified certain amounts to conform to our current period presentation. The following table reflects the impact of these corrections on our September 30, 2012, statements of operations. | |||||||||||||||||||||||||
Condensed Consolidated Statements of Operations | |||||||||||||||||||||||||
Three months ended September 30, 2012 | Nine months ended September 30, 2012 | ||||||||||||||||||||||||
Originally Stated | Adjustments (a) | Restated | Originally Stated | Adjustments (b) | Restated | ||||||||||||||||||||
Gross profit | $ | -- | $ | -- | $ | -- | $ | -- | $ | -- | $ | -- | |||||||||||||
Operating expenses | |||||||||||||||||||||||||
Consulting | 501,923 | (10,000 | ) | 491,923 | 1,408,002 | (10,000 | ) | 1,398,002 | |||||||||||||||||
Professional fees | 19,480 | 119,970 | 139,450 | 162,984 | 199,632 | 362,616 | |||||||||||||||||||
Research and development | 4,744 | -- | 4,744 | 453,875 | -- | 453,875 | |||||||||||||||||||
General and administrative | 4,561 | 59 | 4,620 | 64,427 | 19,626 | 84,053 | |||||||||||||||||||
Director stock compensation | -- | -- | -- | -- | (2,650,000 | ) | (2,650,000 | ) | |||||||||||||||||
Total operating expenses | 530,708 | 110,029 | 640,737 | 2,089,288 | (2,440,742 | ) | (351,454 | ) | |||||||||||||||||
Operating gain (loss) | (530,708 | ) | (110,029 | ) | (640,737 | ) | (2,089,288 | ) | 2,440,742 | 351,454 | |||||||||||||||
Interest expense | (180,714 | ) | 110,029 | (70,685 | ) | (282,871 | ) | 209,258 | (73,613 | ) | |||||||||||||||
Finance cost | (315,773 | ) | -- | (315,773 | ) | (513,599 | ) | -- | (513,599 | ) | |||||||||||||||
Net loss | $ | (1,027,195 | ) | $ | -- | $ | (1,027,195 | ) | $ | (2,885,758 | ) | $ | 2,650,000 | $ | (235,758 | ) | |||||||||
Net loss per common share: | |||||||||||||||||||||||||
Basic and diluted | $ | (0.02 | ) | $ | -- | $ | (0.02 | ) | $ | (0.06 | ) | $ | 0.06 | $ | -- | ||||||||||
Weighted average common shares outstanding: | |||||||||||||||||||||||||
Basic and diluted | 47,646,411 | 47,646,411 | 47,646,411 | 47,864,741 | 47,864,741 | 47,864,741 | |||||||||||||||||||
(a) Reclassification of certain amounts to conform to current period presentation. | |||||||||||||||||||||||||
(b) Record reversal of expense associated with the return of the previously issued shares and reclassification of certain amounts to conform to current period presentation. |
1_Description_of_Business_and_1
1. Description of Business and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2013 | |
Description Of Business And Summary Of Significant Accounting Policies Policies | |
Basis of Presentation | The accompanying condensed consolidated balance sheet as of December 31, 2012, 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, 2012. |
The condensed consolidated financial statements as of and for the three and nine months ended September 30, 2013 and 2012, have been restated (see Note 8). | |
Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications had no impact on net earnings or financial position. | |
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/A, management believes that it has adequate funding to ensure completion of the initial phases of our 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 | In June, 2014, the FASB issued 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 other recent accounting pronouncements through ASU 2015-02 and believe that none of them will have a material effect on our financial statements. |
5_Equitybased_compensation_Tab
5. Equity-based compensation (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Financial statements related to equity-based compensation | Amounts recognized in the condensed consolidated statements of operations related to equity-based compensation are as follows: | ||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Total expense charged against income | $ | -- | $ | 217,612 | $ | 723,049 | $ | 1,992,610 | |||||||||
Impact on net loss per common share: | |||||||||||||||||
Basic and diluted | $ | -- | $ | (0.00 | ) | $ | (0.02 | ) | $ | (0.04 | ) | ||||||
Employee stock options - Market-based | We granted certain options that vest upon the achievement of certain stock prices for 20 days, as follows: | ||||||||||||||||
Market Price | Number of Options | ||||||||||||||||
$ | 2 | 1,000,000 | |||||||||||||||
3 | 1,000,000 | ||||||||||||||||
4 | 1,000,000 | ||||||||||||||||
4.5 | 1,000,000 | ||||||||||||||||
5 | 1,000,000 | ||||||||||||||||
5,000,000 | |||||||||||||||||
Common Stock Warrants | |||||||||||||||||
Stock option and warrants activity | The following summarizes the activity for warrants that were fully-vested upon issuance: | ||||||||||||||||
Number of Warrants | Weighted-average Exercise Price | Weighted-average Remaining Life (Years) | Aggregate Intrinsic Value | ||||||||||||||
Outstanding, December 31, 2012 | 8,395,004 | $ | 0.47 | 2.4 | $ | 238,044 | |||||||||||
Granted | 4,685,019 | 0.69 | 23,333 | ||||||||||||||
Exercised | (100,000 | ) | 0.28 | ||||||||||||||
Outstanding, September 30, 2013 | 12,980,023 | 0.5 | 2.4 | 249,877 | |||||||||||||
Exercisable, September 30, 2013 | 12,980,023 | 0.5 | 2.4 | 249,877 | |||||||||||||
Fair value of each option award | The following summarizes the Black-Scholes assumptions used for fully-vested warrant grants that were expensed: | ||||||||||||||||
Nine months ended September 30, | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
Volatility | 325 – 360 % | 245 – 250 % | |||||||||||||||
Risk-free interest rate | 0.2 – 1.2 % | 0.3 – 0.6 % | |||||||||||||||
Expected life (years) | 2.5 – 5.0 | 2 | |||||||||||||||
Dividend yield | -- | -- | |||||||||||||||
Common Stock Option | |||||||||||||||||
Stock option and warrants activity | The following is a summary of market-based stock option activity: | ||||||||||||||||
Number of Shares | Weighted-average Exercise Price per Share | Weighted-average Remaining Contractual Term | Aggregate Intrinsic Value | ||||||||||||||
Outstanding, December 31, 2012 | 5,000,000 | $ | 3.7 | No expiration | $ | -- | |||||||||||
Stock options granted | -- | ||||||||||||||||
Outstanding, September 30, 2013 | 5,000,000 | 3.7 | No expiration | -- | |||||||||||||
Exercisable, September 30, 2013 | -- | -- |
6_Net_Loss_per_Share_Tables
6. Net Loss per Share (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Net Loss Per Share Tables | |||||||||||||||||
Computation of net 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 September 30, | Nine months ended September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Net loss available for stockholders | $ | (589,604 | ) | $ | (1,027,195 | ) | $ | (1,887,437 | ) | $ | (235,758 | ) | |||||
Weighted average outstanding shares of common stock | 46,181,529 | 47,646,411 | 45,545,420 | 47,864,741 | |||||||||||||
Dilutive effect of stock options and warrants | -- | -- | -- | -- | |||||||||||||
Common stock and equivalents | 46,181,529 | 47,646,411 | 45,545,420 | 47,864,741 | |||||||||||||
Net loss per share – Basic and diluted | $ | (0.01 | ) | $ | (0.02 | ) | $ | (0.04 | ) | $ | (0.00 | ) |
8_Restatements_Tables
8. Restatements (Tables) | 9 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||||
Restatements Tables | |||||||||||||||||||||||||
Restatements of operations and cash flows | The following tables reflect the impact of these corrections on our September 30, 2013, statements of operations and cash flows. | ||||||||||||||||||||||||
Condensed Consolidated Statements of Operations | |||||||||||||||||||||||||
Three months ended September 30, 2013 | Nine months ended September 30, 2013 | ||||||||||||||||||||||||
Originally Stated | Adjustments (a) | Restated | Originally Stated | Adjustments (b) | Restated | ||||||||||||||||||||
Gross profit | $ | -- | $ | -- | $ | -- | $ | -- | $ | -- | $ | -- | |||||||||||||
Operating expenses | |||||||||||||||||||||||||
Consulting | 220,493 | (189,878 | ) | 30,615 | 805,086 | 247,846 | 1,052,932 | ||||||||||||||||||
Professional fees | 123,160 | 19,475 | 142,635 | 209,529 | 19,475 | 229,004 | |||||||||||||||||||
Research and development | 212,389 | -- | 212,389 | 302,089 | -- | 302,089 | |||||||||||||||||||
General and administrative | 138,985 | 64,980 | 203,965 | 322,887 | -- | 322,887 | |||||||||||||||||||
Total operating expenses | 695,027 | (105,423 | ) | 589,604 | 1,639,591 | 267,321 | 1,906,912 | ||||||||||||||||||
Operating loss | (695,027 | ) | 105,423 | (589,604 | ) | (1,639,591 | ) | (267,321 | ) | (1,906,912 | ) | ||||||||||||||
Gain on settlement of debt | -- | -- | -- | -- | 19,475 | 19,475 | |||||||||||||||||||
Net loss | $ | (695,027 | ) | $ | 105,423 | $ | (589,604 | ) | $ | (1,639,591 | ) | $ | (247,846 | ) | $ | (1,887,437 | ) | ||||||||
Net loss per common share: | |||||||||||||||||||||||||
Basic and diluted | $ | (0.02 | ) | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.04 | ) | $ | -- | $ | (0.04 | ) | ||||||||
Weighted average common shares outstanding: | |||||||||||||||||||||||||
Basic and diluted | 46,181,529 | 46,181,529 | 46,181,529 | 45,545,420 | 45,545,420 | 45,545,420 | |||||||||||||||||||
(a) To reduce consulting expense for the unvested warrants ($103,944) and to reclassify certain amounts to conform presentation. | |||||||||||||||||||||||||
(b) To record additional consulting expense for warrants issued for services ($349,370), reduce consulting expense for the unvested warrants ($103,944), and to reclassify certain amounts to conform presentation. | |||||||||||||||||||||||||
Condensed Consolidated Statements of Cash Flows | |||||||||||||||||||||||||
Nine months ended September 30, 2013 | |||||||||||||||||||||||||
Originally Stated | Adjustments | Restated | |||||||||||||||||||||||
Operating Activities: | |||||||||||||||||||||||||
Net loss | $ | (1,639,591 | ) | $ | (247,846 | ) | $ | (1,887,437 | ) | (a) | |||||||||||||||
Stock issued for services | 373,679 | -- | 373,679 | ||||||||||||||||||||||
Warrants issued for services | -- | 349,370 | 349,370 | (b) | |||||||||||||||||||||
Gain on settlement of debt | -- | (19,475 | ) | (19,475 | ) | (c) | |||||||||||||||||||
Changes in operating assets and liabilities: | |||||||||||||||||||||||||
Accounts payable | (91,451 | ) | 150,383 | 58,932 | (d) | ||||||||||||||||||||
Accrued liabilities – related party | (52,305 | ) | 208,250 | 155,945 | (e) | ||||||||||||||||||||
Net cash used in operating activities | (1,409,668 | ) | 440,682 | (968,986 | ) | ||||||||||||||||||||
Investing Activities: | |||||||||||||||||||||||||
Intangible assets | (25,115 | ) | -- | (25,115 | ) | ||||||||||||||||||||
Loan receivable | (17,858 | ) | 17,858 | -- | (d) | ||||||||||||||||||||
Net cash used in investing activities | (42,973 | ) | 17,858 | (25,115 | ) | ||||||||||||||||||||
Financing Activities: | |||||||||||||||||||||||||
Proceeds from sale of common stock | 1,950,290 | (250,290 | ) | 1,700,000 | (d) | ||||||||||||||||||||
Proceeds from notes payable – related party | (11,200 | ) | 12,100 | 900 | (e) | ||||||||||||||||||||
Payments on notes payable – related party | 208,250 | (220,350 | ) | (12,100 | ) | (e) | |||||||||||||||||||
Net cash provided by financing activities | 2,147,340 | (458,540 | ) | 1,688,800 | |||||||||||||||||||||
Net increase (decrease) in cash | 694,699 | 694,699 | |||||||||||||||||||||||
Cash, beginning of period | 194,721 | 194,721 | |||||||||||||||||||||||
Cash, end of period | $ | 889,420 | $ | 889,420 | |||||||||||||||||||||
(a) Additional consulting expense for warrants issued for services ($349,370), and reduced consulting expense for the unvested warrants ($103,944). | |||||||||||||||||||||||||
(b) Additional consulting expense for warrants issued for services is a non-cash adjustment. | |||||||||||||||||||||||||
(c) Gain on settlement of debt was previously shown as a change in accounts payable. | |||||||||||||||||||||||||
(d) The above transactions were improperly recorded to accounts payable, loan receivable and equity. | |||||||||||||||||||||||||
(e) Certain accrued liabilities to related parties were improperly categorized as notes payable to related parties. | |||||||||||||||||||||||||
Three and nine months ended September 30, 2012 | |||||||||||||||||||||||||
During the analysis of the restatement for the three and nine months ended September 30, 2013, we identified an error in the statement of operations for the nine months ended September 30, 2012, that were presented for comparative purposes in our September 30, 2013 10-Q. In April 2012, a director of the Company returned 5,000,000 shares that had been issued to him by a shareholder as compensation, resulting in a reversal of expense of $2,650,000. This was not reflected in the statement of operations for the nine months ended September 30, 2012, however, it was included in the September 30, 2012 10-Q. We have also reclassified certain amounts to conform to our current period presentation. The following table reflects the impact of these corrections on our September 30, 2012, statements of operations. | |||||||||||||||||||||||||
Condensed Consolidated Statements of Operations | |||||||||||||||||||||||||
Three months ended September 30, 2012 | Nine months ended September 30, 2012 | ||||||||||||||||||||||||
Originally Stated | Adjustments (a) | Restated | Originally Stated | Adjustments (b) | Restated | ||||||||||||||||||||
Gross profit | $ | -- | $ | -- | $ | -- | $ | -- | $ | -- | $ | -- | |||||||||||||
Operating expenses | |||||||||||||||||||||||||
Consulting | 501,923 | (10,000 | ) | 491,923 | 1,408,002 | (10,000 | ) | 1,398,002 | |||||||||||||||||
Professional fees | 19,480 | 119,970 | 139,450 | 162,984 | 199,632 | 362,616 | |||||||||||||||||||
Research and development | 4,744 | -- | 4,744 | 453,875 | -- | 453,875 | |||||||||||||||||||
General and administrative | 4,561 | 59 | 4,620 | 64,427 | 19,626 | 84,053 | |||||||||||||||||||
Director stock compensation | -- | -- | -- | -- | (2,650,000 | ) | (2,650,000 | ) | |||||||||||||||||
Total operating expenses | 530,708 | 110,029 | 640,737 | 2,089,288 | (2,440,742 | ) | (351,454 | ) | |||||||||||||||||
Operating gain (loss) | (530,708 | ) | (110,029 | ) | (640,737 | ) | (2,089,288 | ) | 2,440,742 | 351,454 | |||||||||||||||
Interest expense | (180,714 | ) | 110,029 | (70,685 | ) | (282,871 | ) | 209,258 | (73,613 | ) | |||||||||||||||
Finance cost | (315,773 | ) | -- | (315,773 | ) | (513,599 | ) | -- | (513,599 | ) | |||||||||||||||
Net loss | $ | (1,027,195 | ) | $ | -- | $ | (1,027,195 | ) | $ | (2,885,758 | ) | $ | 2,650,000 | $ | (235,758 | ) | |||||||||
Net loss per common share: | |||||||||||||||||||||||||
Basic and diluted | $ | (0.02 | ) | $ | -- | $ | (0.02 | ) | $ | (0.06 | ) | $ | 0.06 | $ | -- | ||||||||||
Weighted average common shares outstanding: | |||||||||||||||||||||||||
Basic and diluted | 47,646,411 | 47,646,411 | 47,646,411 | 47,864,741 | 47,864,741 | 47,864,741 | |||||||||||||||||||
(a) Reclassification of certain amounts to conform to current period presentation. | |||||||||||||||||||||||||
(b) Record reversal of expense associated with the return of the previously issued shares and reclassification of certain amounts to conform to current period presentation. |
5_Equitybased_Compensation_Det
5. Equity-based Compensation (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Equity-Based Compensation Details | ||||
Total expense charged against income | $217,612 | $723,049 | $1,992,610 | |
Impact on net loss per common share: | ||||
Basic and diluted | $0 | ($0.02) | ($0.04) |
Recovered_Sheet1
5. Equity-based compensation (Details 1) (Common Stock Warrants, USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Common Stock Warrants | |
Number of Shares | |
Outstanding, Beginning | 8,395,004 |
Granted | 4,685,019 |
Exercised | -100,000 |
Outstanding, Ending | 12,980,023 |
Exercisable, Ending | 12,980,023 |
Weighted Average Exercise Price | |
Outstanding, Beginning | $0.47 |
Granted | $0.69 |
Exercised | $0.28 |
Outstanding, Ending | $0.50 |
Exercisable, Ending | $0.50 |
Weighted-average Remaining Life (Years) | |
Outstanding, Beginning | 2 years 4 months 24 days |
Outstanding, Ending | 2 years 4 months 24 days |
Exercisable | 2 years 4 months 24 days |
Aggregate Intrinsic Value | |
Outstanding, Beginning | $238,044 |
Granted | $23,333 |
Outstanding, Ending | 249,877 |
Exercisable, Ending | $249,877 |
5_Equitybased_compensation_Det1
5. Equity-based compensation (Details 2) (Common Stock Warrants, USD $) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Expected life (years) | 2 years | |
Dividend yield | ||
Minimum [Member] | ||
Volatility | 325.00% | 245.00% |
Risk-free interest rate | 0.20% | 0.30% |
Expected life (years) | 2 years 6 months | |
Maximum [Member] | ||
Volatility | 360.00% | 250.00% |
Risk-free interest rate | 1.20% | 0.60% |
Expected life (years) | 5 years |
Recovered_Sheet2
5. Equity-based Compensation (Details 3) (Employee stock options - Market-based [Member], USD $) | 9 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Number of Options | 5,000,000 | |
2.00 [Member] | ||
Market Price | $2 | |
Number of Options | 1,000,000 | |
3.00 [Member] | ||
Market Price | 3 | |
Number of Options | 1,000,000 | |
4.00 [Member] | ||
Market Price | 4 | |
Number of Options | 1,000,000 | |
4.50 [Member] | ||
Market Price | 4.5 | |
Number of Options | 1,000,000 | |
5.00 [Member] | ||
Market Price | 5 | |
Number of Options | 1,000,000 |
5_Equitybased_compensation_Det2
5. Equity-based compensation (Details 4) (Common Stock Option, USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Common Stock Option | |
Number of Shares | |
Outstanding, Beginning | 5,000,000 |
Stock options granted | |
Outstanding, Ending | 5,000,000 |
Exercisable, Ending | |
Weighted Average Exercise Price | |
Outstanding, Beginning | $3.70 |
Outstanding, Ending | $3.70 |
Weighted-average Remaining Life (Years) | |
Outstanding, Beginning | 0 years |
Outstanding, Ending | 0 years |
Aggregate Intrinsic Value | |
Outstanding, Beginning | |
Outstanding, Ending | |
Exercisable, Ending |
6_Net_Loss_per_Share_Details
6. Net Loss per Share (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Net Loss Per Share Details | ||||
Net loss available for stockholders | ($589,604) | ($1,027,195) | ($1,887,437) | ($235,758) |
Weighted average outstanding shares of common stock | 46,181,529 | 47,646,411 | 45,545,420 | 47,864,741 |
Dilutive effect of stock options and warrants | ||||
Common stock and equivalents | 46,181,529 | 47,646,411 | 45,545,420 | 47,864,741 |
Net loss per share - Basic and diluted | ($0.01) | ($0.02) | ($0.04) | $0 |
8_Restatements_Details
8. Restatements (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Weighted average common shares outstanding: | ||||
Basic and diluted | 46,181,529 | 47,646,411 | 45,545,420 | 47,864,741 |
Originally Stated [Member] | ||||
Gross profit | ||||
Operating expenses | ||||
Consulting | 220,493 | 501,923 | 805,086 | 1,408,002 |
Professional fees | 123,160 | 19,480 | 209,529 | 162,984 |
Research and development | 212,389 | 4,744 | 302,089 | 453,875 |
General and administrative | 138,985 | 4,561 | 322,887 | 64,427 |
Total operating expenses | 695,027 | 530,708 | 1,639,591 | 2,089,288 |
Operating loss | -695,027 | -530,708 | -1,639,591 | -2,089,288 |
Gain on settlement of debt | ||||
Net loss | -695,027 | -1,027,195 | -1,639,591 | -2,885,758 |
Net loss per common share: | ||||
Basic and diluted | -0.02 | -0.02 | -0.04 | -0.06 |
Weighted average common shares outstanding: | ||||
Basic and diluted | 46,181,529 | 47,646,411 | 45,545,420 | 47,864,741 |
Adjustments [Member] | ||||
Gross profit | ||||
Operating expenses | ||||
Consulting | -189,878 | -10,000 | 247,846 | -10,000 |
Professional fees | 19,475 | 119,970 | 19,475 | 199,632 |
Research and development | ||||
General and administrative | 64,980 | 59 | 19,626 | |
Total operating expenses | -105,423 | 110,029 | 267,321 | -2,440,742 |
Operating loss | 105,423 | -110,029 | -267,321 | 2,440,742 |
Gain on settlement of debt | 19,475 | |||
Net loss | 105,423 | -247,846 | 2,650,000 | |
Net loss per common share: | ||||
Basic and diluted | -0.01 | 0.06 | ||
Weighted average common shares outstanding: | ||||
Basic and diluted | 46,181,529 | 47,646,411 | 45,545,420 | 47,864,741 |
Restated [Member] | ||||
Gross profit | ||||
Operating expenses | ||||
Consulting | 30,615 | 491,923 | 1,052,932 | 1,398,002 |
Professional fees | 142,635 | 139,450 | 229,004 | 362,616 |
Research and development | 212,389 | 4,744 | 302,089 | 453,875 |
General and administrative | 203,965 | 4,620 | 322,887 | 84,053 |
Total operating expenses | 589,604 | 640,737 | 1,906,912 | -351,454 |
Operating loss | -589,604 | -640,737 | -1,906,912 | 351,454 |
Gain on settlement of debt | 19,475 | |||
Net loss | -589,604 | -1,027,195 | -1,887,437 | -235,758 |
Net loss per common share: | ||||
Basic and diluted | -0.01 | -0.02 | -0.04 | 0 |
Weighted average common shares outstanding: | ||||
Basic and diluted | 46,181,529 | 47,646,411 | 45,545,420 | 47,864,741 |
8_Restatements_Details_1
8. Restatements (Details 1) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Originally Stated [Member] | ||||
Operating Activities: | ||||
Net loss | ($1,639,591) | |||
Stock issued for services | 373,679 | |||
Warrants issued for services | ||||
Gain on settlement of debt | ||||
Changes in operating assets and liabilities: | ||||
Accounts payable | -91,451 | |||
Accrued liabilities - related parties | -52,305 | |||
Net cash used in operating activities | -1,409,668 | |||
Investing Activities: | ||||
Intangible assets | -25,115 | |||
Loan receivable | -17,858 | |||
Net cash used in investing activities | -42,973 | |||
Financing Activities: | ||||
Proceeds from sale of common stock | 1,950,290 | |||
Proceeds from notes payable - related party | -11,200 | |||
Payments on notes payable - related party | 208,250 | |||
Net cash provided by financing activities | 2,147,340 | |||
Net increase (decrease) in cash | 694,699 | |||
Cash, beginning of period | 194,721 | |||
Cash, end of period | 889,420 | 889,420 | ||
Adjustments [Member] | ||||
Operating Activities: | ||||
Net loss | -247,846 | |||
Stock issued for services | ||||
Warrants issued for services | 349,370 | |||
Gain on settlement of debt | -19,475 | |||
Changes in operating assets and liabilities: | ||||
Accounts payable | 150,383 | |||
Accrued liabilities - related parties | 208,250 | |||
Net cash used in operating activities | 440,682 | |||
Investing Activities: | ||||
Intangible assets | ||||
Loan receivable | 17,858 | |||
Net cash used in investing activities | 17,858 | |||
Financing Activities: | ||||
Proceeds from sale of common stock | -250,290 | |||
Proceeds from notes payable - related party | 12,100 | |||
Payments on notes payable - related party | -220,350 | |||
Net cash provided by financing activities | -458,540 | |||
Net increase (decrease) in cash | ||||
Cash, beginning of period | ||||
Cash, end of period | ||||
Restated [Member] | ||||
Operating Activities: | ||||
Net loss | -1,887,437 | -235,758 | ||
Stock issued for services | 373,679 | 1,201,520 | ||
Warrants issued for services | 349,370 | |||
Gain on settlement of debt | -19,475 | |||
Changes in operating assets and liabilities: | ||||
Accounts payable | 58,932 | 272,627 | ||
Accrued liabilities - related parties | 155,945 | 66,500 | ||
Net cash used in operating activities | -968,986 | -548,641 | ||
Investing Activities: | ||||
Intangible assets | -25,115 | -25,193 | ||
Loan receivable | ||||
Net cash used in investing activities | -25,115 | -25,193 | ||
Financing Activities: | ||||
Proceeds from sale of common stock | 1,700,000 | 5,000 | ||
Proceeds from notes payable - related party | 900 | 55,470 | ||
Payments on notes payable - related party | -12,100 | -1,200 | ||
Net cash provided by financing activities | 1,688,800 | 495,492 | ||
Net increase (decrease) in cash | 694,699 | -78,342 | ||
Cash, beginning of period | 194,721 | 78,361 | ||
Cash, end of period | $889,420 | $19 | $889,420 | $19 |
8_Restatements_Details_2
8. Restatements (Details 2) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Weighted average common shares outstanding: | ||||
Basic and diluted | 46,181,529 | 47,646,411 | 45,545,420 | 47,864,741 |
Originally Stated [Member] | ||||
Gross profit | ||||
Operating expenses | ||||
Consulting | 220,493 | 501,923 | 805,086 | 1,408,002 |
Professional fees | 123,160 | 19,480 | 209,529 | 162,984 |
Research and development | 212,389 | 4,744 | 302,089 | 453,875 |
General and administrative | 138,985 | 4,561 | 322,887 | 64,427 |
Director stock compensation | ||||
Total operating expenses | 695,027 | 530,708 | 1,639,591 | 2,089,288 |
Operating gain (loss) | -695,027 | -530,708 | -1,639,591 | -2,089,288 |
Interest expense | -180,714 | -282,871 | ||
Finance cost | -315,773 | -513,599 | ||
Net loss | -695,027 | -1,027,195 | -1,639,591 | -2,885,758 |
Net loss per common share: | ||||
Basic and diluted | -0.02 | -0.02 | -0.04 | -0.06 |
Weighted average common shares outstanding: | ||||
Basic and diluted | 46,181,529 | 47,646,411 | 45,545,420 | 47,864,741 |
Adjustments [Member] | ||||
Gross profit | ||||
Operating expenses | ||||
Consulting | -189,878 | -10,000 | 247,846 | -10,000 |
Professional fees | 19,475 | 119,970 | 19,475 | 199,632 |
Research and development | ||||
General and administrative | 64,980 | 59 | 19,626 | |
Director stock compensation | -2,650,000 | |||
Total operating expenses | -105,423 | 110,029 | 267,321 | -2,440,742 |
Operating gain (loss) | 105,423 | -110,029 | -267,321 | 2,440,742 |
Interest expense | 110,029 | 209,258 | ||
Finance cost | ||||
Net loss | 105,423 | -247,846 | 2,650,000 | |
Net loss per common share: | ||||
Basic and diluted | -0.01 | 0.06 | ||
Weighted average common shares outstanding: | ||||
Basic and diluted | 46,181,529 | 47,646,411 | 45,545,420 | 47,864,741 |
Restated [Member] | ||||
Gross profit | ||||
Operating expenses | ||||
Consulting | 30,615 | 491,923 | 1,052,932 | 1,398,002 |
Professional fees | 142,635 | 139,450 | 229,004 | 362,616 |
Research and development | 212,389 | 4,744 | 302,089 | 453,875 |
General and administrative | 203,965 | 4,620 | 322,887 | 84,053 |
Director stock compensation | -2,650,000 | |||
Total operating expenses | 589,604 | 640,737 | 1,906,912 | -351,454 |
Operating gain (loss) | -589,604 | -640,737 | -1,906,912 | 351,454 |
Interest expense | -70,685 | -73,613 | ||
Finance cost | -315,773 | -513,599 | ||
Net loss | -589,604 | -1,027,195 | -1,887,437 | -235,758 |
Net loss per common share: | ||||
Basic and diluted | -0.01 | -0.02 | -0.04 | 0 |
Weighted average common shares outstanding: | ||||
Basic and diluted | 46,181,529 | 47,646,411 | 45,545,420 | 47,864,741 |