Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2016 | Aug. 25, 2016 | |
Document And Entity Information | ||
Entity Registrant Name | COOL TECHNOLOGIES, INC. | |
Entity Central Index Key | 1,399,352 | |
Document Type | 10-Q/A | |
Document Period End Date | Jun. 30, 2016 | |
Amendment Flag | true | |
Amendment Description | We are filing this Amendment No. 1 on Form 10-Q/A to amend and restate in their entirety the following items of our Quarterly Report on Form 10-Q for the quarter ended June 30, 2016 as originally filed with the Securities and Exchange Commission on August 22, 2016 (the Original Form 10-Q): (i) Item 1 of Part I Financial Information, (ii) Item 2 of Part I, Managements Discussion and Analysis of Financial Condition and Results of Operations,. The subsequent events footnote to the financial statements has been updated to reflect events that occurred after the filing date of the Quarterly Report. This Form 10-Q/A includes Exhibits 31.1, 31.2, 32.1 and 32.2, new certifications by the companys principal executive officer and principal financial officer as required by Rule 12b-15. We have determined that our previously reported results for the quarter ended June 30, 2016 did not properly represent two derivative liabilities. The first was the result of a review by our independent audit firm of an amendment to a convertible note which determined that the amendment qualified for debt extinguishment. The second was a convertible notes liquidated damages which were calculated by using an annual interest rate instead of the correct monthly interest rate. Despite a financial impact of only $72,652 (which would normally be considered non-material for a company of our size, particularly asnon-cash items), an amended filing is necessary because derivative liability calculations flow through every financial statement. We have made necessary conforming changes in the Financial Information and Managements Discussion and Analysis of Financial Condition and Results of Operations. | |
Current Fiscal Year End Date | --12-31 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 106,623,656 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,016 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Current assets | ||
Cash | $ 2,764 | $ 10,882 |
Prepaid expenses | 2,701 | 95,175 |
Total current assets | 5,465 | 106,057 |
Intangible | 161,170 | 153,434 |
Equipment, net | 84,632 | 97,600 |
Total assets | 251,267 | 357,091 |
Current liabilities | ||
Accounts payable | 1,405,694 | 1,278,307 |
Accrued liabilities - related party | 484,745 | 591,870 |
Customer deposits - related party | 400,000 | 400,000 |
Accrued payroll taxes | 93,512 | 33,737 |
Debt, current portion | 993,892 | 697,903 |
Derivative liability | 490,838 | 356,554 |
Total current liabilities | 3,868,681 | 3,358,371 |
Debt, long-term portion, net of debt discount | 49,031 | 77,803 |
Total liabilities | 3,917,712 | 3,436,174 |
Commitments and contingencies (Note 5) | ||
Stockholders' equity (deficit): | ||
Preferred stock, $.001 par value; 15,000,000 shares authorized; 122 and 136 shares issued and outstanding at June 30, 2016 and December 31, 2015, Respectively | ||
Common stock, $.001 par value; 140,000,000 shares authorized; 90,308,150 and 66,600,367 shares issued and outstanding at June 30, 2016 and December 31, 2015, respectively | 76,345 | 65,929 |
Additional paid-in capital | 38,772,493 | 36,038,551 |
Common stock issuable | 85,500 | 180,900 |
Common stock held in escrow | 8,441 | 8,441 |
Accumulated deficit | (42,574,820) | (39,344,245) |
Total deficit | (3,632,041) | (3,050,424) |
Noncontrolling interest in subsidiary | (34,404) | (28,659) |
Total stockholders' deficit | (3,666,445) | (3,079,083) |
Total liabilities and stockholders' deficit | $ 251,267 | $ 357,091 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2016 | Dec. 31, 2015 |
Stockholders' Equity (Deficit): | ||
Preferred stock par value | $ 0.001 | $ .001 |
Preferred stock shares authorized | 15,000,000 | 15,000,000 |
Preferred stock shares issued | 122 | 136 |
Preferred stock shares outstanding | 122 | 136 |
Common stock par value | $ 0.001 | $ 0.001 |
Common stock shares authorized | 140,000,000 | 140,000,000 |
Common stock shares issued | 90,308,150 | 66,600,367 |
Common stock shares outstanding | 90,308,150 | 66,600,367 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Condensed Consolidated Statements Of Operations | ||||
Revenue | ||||
Cost of revenues | ||||
Gross profit | ||||
Operating expenses | ||||
Payroll and related expenses | 190,348 | 198,613 | 410,652 | 413,538 |
Consulting | 152,651 | 636,230 | 1,365,541 | 766,653 |
Professional fees | 97,031 | 266,817 | 208,375 | 414,677 |
Research and development | 6,484 | 267,945 | 19,253 | 567,590 |
General and administrative | 135,338 | 462,043 | 598,291 | 951,320 |
Total operating expenses | 581,852 | 1,813,648 | 2,602,112 | 3,113,778 |
Operating loss | (581,852) | (1,813,648) | (2,602,112) | (3,113,778) |
Other income (expense): | ||||
Interest expense, net | (445,488) | (2,617) | (816,731) | (4,575) |
Legal Settlement - replacement warrants | (1,119,450) | (1,119,450) | ||
Change in fair value of derivative liability | 901,689 | 754,812 | ||
Loss on extinguishment of debt | (572,289) | (572,289) | ||
Net loss | (697,940) | (2,953,715) | (3,236,320) | (4,237,803) |
Less: Noncontrolling interest in net loss | (2,165) | (3,711) | (5,745) | (9,363) |
Net loss to shareholders | $ (695,775) | $ (2,950,004) | $ (3,230,575) | $ (4,228,440) |
Net loss per common share: Basic and diluted | $ (0.01) | $ (0.05) | $ (0.04) | $ (0.07) |
Weighted average common shares outstanding: Basic and diluted | 82,148,475 | 64,093,846 | 88,558,027 | 62,845,402 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Operating Activities: | ||
Net loss | $ (3,236,320) | $ (4,237,803) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock issued for services | 282,090 | 571,207 |
Warrants issued for services | 1,182,548 | 31,887 |
Legal Settlement – replacement warrants | 1,119,450 | |
Loss on extinguishment of debt | 572,289 | |
Employee stock options | 327,000 | 654,000 |
Non-cash interest expense | 290,495 | |
Change in fair value of derivative liability | (754,812) | |
Amortization of debt discount | 491,348 | |
Depreciation expense | 12,968 | 12,885 |
Changes in operating assets and liabilities: | ||
Prepaid expenses | 92,474 | (63,559) |
Accounts payable | 127,387 | 554,696 |
Accrued liabilities - related party | (107,125) | 61,872 |
Accrued payroll liabilities | 59,775 | 11,550 |
Net cash used in operating activities | (659,883) | (1,283,815) |
Investing Activities: | ||
Intangible assets | (7,736) | (186) |
Equipment purchase | (5,000) | |
Net cash used in investing activities | (7,736) | (5,186) |
Financing Activities: | ||
Proceeds from sale of common stock | 400,000 | 1,015,000 |
Proceeds from debt | 267,037 | 250,000 |
Payments on debt | (7,536) | (8,532) |
Net cash provided by financing activities | 659,501 | 1,256,468 |
Net (decrease) increase in cash | (8,118) | (32,533) |
Cash, beginning of period | 10,882 | 171,871 |
Cash, end of period | 2,764 | 139,338 |
Cash paid for: Interest | 15,263 | 2,766 |
Cash paid for: Income taxes | ||
Non-cash transactions: | ||
Derivative liability offset by debt discount | 281,329 | |
Reduction of stock issuable by issuing common stock | 465,400 | 410,950 |
Debt and interest settled for common stock | $ 434,410 |
Description of Business and Sum
Description of Business and Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2016 | |
Notes to Financial Statements | |
Note 1 - Description of Business and Summary of Significant Accounting Policies | Description of Business Cool Technologies, Inc. and subsidiary, (we, us, our, the "Company" or "Cool Technologies") was incorporated in the State of Nevada in July 2002. In April 2014, the Company formed Ultimate Power Truck, LLC ("Ultimate Power Truck" or "UPT"), of which the Company owns 95% and a shareholder of Cool Technologies owns 5%. The Company was formerly known as Bibb Corporation, as Z3 Enterprises, and as HPEV Inc. On August 20, 2015, the Company changed its name to Cool Technologies, Inc. Basis of Presentation The accompanying condensed consolidated balance sheet as of December 31, 2015, 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. Noncontrolling interest represents the 5% third party ownership of our subsidiary, UPT. 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 for the year ended December 31, 2015. Going Concern The accompanying condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern. The Company has incurred net losses of $42,574,820 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 raise capital, generate revenue, achieve profitable operations and repay our obligations when they come due. The Company will have to obtain additional debt and / or equity financing; however, the Company cannot provide investors with assurance that the Company will be able to raise sufficient capital to fund our operations. These 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 is negotiating additional funding arrangements to support completion of the commercialization phases of our business plan: to license its thermal technologies and applications, including submersible dry-pit applications; and to license and sell mobile generation retrofit kits (our Ultimate Power Truck business) as well as retrofitted vehicles that incorporate our proprietary gearing system. There can be no assurance, however, that the Company will be successful in raising additional financing and accomplishing these objectives. Recently Issued Accounting Pronouncements Financial Accounting Standards Board, or FASB, Accounting Standards Update, or FASB ASU 2016-09 "Compensation Stock Compensation (Topic 718)" FASB ASU 2016-10 "Revenue from Contracts with Customers (Topic 606)" |
Customer deposits - Related par
Customer deposits - Related party | 6 Months Ended |
Jun. 30, 2016 | |
Notes to Financial Statements | |
Note 2 - Customer deposits - Related party | These represent advance payments of $400,000 received on orders that have not yet been fulfilled, with companies controlled by the individual who is the 5% owner of UPT and a shareholder. |
Debt
Debt | 6 Months Ended |
Jun. 30, 2016 | |
Notes to Financial Statements | |
Note 3 - Debt | June 30, 2016 December 31, 2015 Notes payable -- original issue discount $ - $ 400,000 Convertible notes payable 887,178 365,350 Test vehicle financing 69,539 77,075 Note payable related party 237 22,910 Note payable UPT minority owner 250,000 250,000 1,206,954 1,115,335 Debt discount (164,031 ) (339,629 ) 1,042,923 775,706 Less: current portion (993,892 ) (697,903 ) $ 49,031 $ 77,803 Notes payable original issue discount In October 2015, the Company received $350,000 under two notes payable with an original issue discount of $50,000, in lieu of interest. The $400,000 principal balance was payable in full on March 31, 2016. In the event of default, the interest rate will be 18% per annum. The notes were amended on April 28, 2016. In exchange for the note holders refraining from taking legal action in relation to non-payment of the notes until May 16, 2016, the Company agreed to pay liquidated damages of $80,000 and forbearance fees of $5,000 each. In the event that the notes were not paid in full by the end of the forbearance period, then the note holders would be due additional liquidated damages of $98,000. Payment was not made, so the damages were added to the balance due. On May 23, 2016, one of the note holders agreed to a second amendment which extended the maturity date of his note until September 30, 2016. In exchange, the note holder received the right to convert a portion or all of the unpaid principal balance at a rate of 75% of the average of the volume weighted average price (VWAP) in the twelve trading days immediately preceding the request for conversion date as well as continued accrual of 3% liquidated damages each month and 18% interest on the total balance due. The Company tested the first amendment to ascertain if it should be accounted for as a modification to the notes or treated as an extinguishment. As a result of the impact on the present value of cash flows from the liquidated damages and forbearance fees, the Company determined that the first amendment to the notes qualified for extinguishment treatment. Accordingly, the Company recognized a loss on extinguishment equal to the liquidated damages and forbearance fees of $90,000. The Company also tested the second amendment to one of the notes to ascertain if it should be accounted for as a modification to the note or treated as an extinguishment. As a result of the impact on the present value of cash flows from the additional liquidated damages and the inclusion of a conversion feature, the Company determined that the second amendment to one of the notes qualified for extinguishment treatment. Accordingly, the Company recognized a loss on extinguishment equal to the additional liquidated damages, accrued interest and fair value of the conversion option of $307,358. On May 24, 2016, the second noteholder agreed to exchange his notes with a third party lender who extinguished the debts and was issued two convertible notes to cover the debts assumed from the second noteholder. The two new convertible notes were issued in the principal amounts of $104,802 and $26,571 , Convertible notes payable September 2015 Convertible Note -- December 2015 Convertible Notes -- On May 30, 2016, the Company executed an amendment to the convertible note agreement. In consideration for removing limitations, until November 15, 2016, on sales of securities of at least $500,000 including variable rate transactions, convertible notes and third party transactions set forth in the Securities Purchase Agreement signed on December 3, 2015 as well as authorizing the withdrawal of a registration statement filed on January 11, 2016, the Company agreed to file a new registration statement covering the shares issuable to the holder of the Notes. The Company tested the amendment to ascertain if it should be accounted for as a modification to the notes or treated as an extinguishment. As a result of the change in the fair value of the conversion feature and warrants, the Company determined that the amendment qualifies for extinguishment treatment. Accordingly, the Company recognized a loss on extinguishment equal to the difference in the fair value of the conversion feature and warrants before and after the amendment of $34,673. In consideration for amending the Notes to permit borrowings by the Company of up to $6,500,000, the Company agreed to amend the Notes to enable the conversion price to be equal to the lesser of $0.12 and 70% of the average of three VWAPs from the 20 trading days prior to the notice of conversion. Furthermore, the Company agreed that if it were to issue new notes with greater discounts than those detailed above, the existing Notes would be reset to match the lower conversion price. Finally, the Company agreed to lower the exercise prices (from $0.21 to$0.168, and from $0.175 to $0.140, respectively) on two existing warrants totaling 500,000 shares previously issued to the holder of the Notes and to issue a cashless, two-year warrant to purchase 250,000 shares at an exercise price of $0.168 per share. The Company tested the two notes that replaced the other OID note to determine if they should be accounted for as modification of the original note or treated as an extinguishment. As a result of the impact on the present value of cash flows from the additional liquidated damages and the inclusion of a conversion feature, the Company determined that the new notes qualified for extinguishment treatment. Accordingly, the Company recognized a loss on extinguishment equal to the additional liquidated damages, accrued interest and fair value of the conversions options of $140,258. February 2016 Convertible Note May 2016 Convertible Note Test Vehicle Financing In October 2014, the Company entered into financing agreements for the purchase of test vehicles, bearing interest at 5.99% payable monthly over five years, collateralized by the vehicles. Note payable related party On February 3, 2016, an agreement was signed with the Secretary of Cool Technologies to retire a non-interest bearing note that was due on demand. The note was retired with the issuance of shares of restricted common stock on June 24, 2016. Note payable UPT minority owner Held by the 5% minority owner of UPT. The terms of the note have not been finalized. Future contractual maturities of debt are as follows: Year ending December 31, 2016 $ 870,917 2017 296,937 2018 20,789 2019 18,311 $ 1,206,954 |
Derivative Liability
Derivative Liability | 6 Months Ended |
Jun. 30, 2016 | |
Notes to Financial Statements | |
Note 4 - Derivative Liability | Under the terms of the convertible note agreements, the Company identified derivative instruments arising from embedded conversion features, as well as warrants issued with the December 2015 Convertible Note. The following summarizes the Black-Scholes assumptions used to estimate the fair value of the derivative liability at the dates of issuance and the revaluation dates: January 27, 2016 (1) February 10, 2016 (2) February 24, 2016 (3) March 31, 2016 Volatility 121 % 121 % 118 % 121 127 % Risk-free interest rate 0.5 % 0.4 % 0.7 % 0.3 0.8 % Expected life (years) 1.0 0.5 1.6 0.4 2.7 Dividend yield -- -- -- -- April 11, 2016 (3) April 19, 2016 (3) April 27, 2016 (3) May 3, 2016 (3) Volatility 111.5 % 113.4 % 119 % 120.3 % Risk-free interest rate 0.62 % 0.65 % 0.71 % 0.64 % Expected life (years) 1.43 1.41 1.39 1.37 Dividend yield -- -- -- -- May 6, 2016 (3) May 16, 2016 (3) (6) May 23, 2016 (5) May 24, 2016 (5) Volatility 120.4 % 124 137.9 % 138.1 % 139 % Risk-free interest rate 0.63 % 0.48 - 0.57 % 0.28 % 0.69 % Expected life (years) 1.36 0.76 - 1.33 0.36 1.0 Dividend yield -- -- -- -- May 27, 2016 (3)(8) May 30, 2016 June 10, 2016 (4)(7) June 13, 2016 (8) Volatility 125 - 139 % 111 157.5 % 145% 146 % Risk-free interest rate 0.58 - 0.69 % 0.49 - 0.95 % 0.26 - 0.42 % 0.55 % Expected life (years) 0.99 - 1.30 0.51 2.51 0.31- 0.48 0.95 Dividend yield -- -- -- -- June 21, 2016 (7) June 29, 2016 (4)(7) June 30, 2016 Volatility 146.2 % 144.2 % 118 144.2 % Risk-free interest rate 0.27 % 0.26 -35 % 0.2 0.65 % Expected life (years) 0.28 0.25 0.42 0.11 2.42 Dividend yield -- -- -- -- ________________ (1) Additional borrowing under the December 2015 Convertible Note. (2) Borrowing under the February 2016 Convertible Note. (3) Partial conversion of the September 2015 Convertible Note. (4) Partial conversion of the December 2015 Convertible Note. (5) Notes Payable Original Issue Discount converted into Exchange Notes. (6) Borrowing under the May 2016 Convertible Note. (7) Partial Conversion of Notes Payable Original Issue Discount (8) Partial Conversion of Exchange Notes Changes in the derivative liability were as follows: Amount December 31, 2015 $ 356,554 December 2015 Convertible Note additional borrowing 53,951 February 2016 Convertible Note 252,271 Exchange Notes Payable Original Issue Discount 347,672 May 2016 Convertible Note 200,529 Exchange December Convertible Note 34,673 Conversion September 2015 Convertible Note (171,276 ) Conversion - December 2015 Convertible Note (75,305 ) Conversion Notes Payable Original Issue Discount (110,093 ) Change in fair value at June 30, 2016 (398,138 ) June 30, 2016 $ 490,838 An estimated 14,310,748 number of shares were issuable if the conversion features and warrants had been exercised on June 30, 2016. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2016 | |
Notes to Financial Statements | |
Note 5 - Commitments and Contingencies | On December 12, 2012, the Company 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 condensed consolidated balance sheets as common stock held in escrow. Effective May 1, 2015, the Company executed a First Amendment to Settlement Agreement (the "Amendment") with Spirit Bear and the parties identified as the assignees of Spirit Bear who are signatories to the Amendment, which amends certain provisions of our original Settlement Agreement with Spirit Bear. In accordance with the terms of the Amendment, Jay Palmer, Carrie Dwyer and Donica Holt, the Spirit Bear holdover directors, tendered their resignation from the Board of Directors of the Company. Spirit Bear also agreed that it will no longer have any rights to appoint nominees to the Board of Directors. Pursuant to the Amendment, the Company agreed to file a registration statement on Form S-1 covering an aggregate of 14,028,385 shares of common stock, preferred stock and warrants on behalf of Spirit Bear and its assignees no later than July 15, 2015, which was filed with the SEC on July 15, 2015. A representative of Spirit Bear agreed that the obligation to register the shares on a Form S-1 need only include shares of common stock and shares of common stock issuable upon conversion of the Preferred Stock and exercise of the warrants held by Spirit Bear and its assignees. The Company agreed to issue replacement warrants for certain previously-issued warrants, which will be canceled in connection with the replacement issuance. Within 10 business days of June 1, 2015, the parties agreed to dismiss all of the pending litigation between and among them. On August 28, 2015, the parties filed a stipulation to dismiss the direct claims of the Company against Spirit Bear and of Spirit Bear against the Company in the Nevada Lawsuit. By order dated September 1, 2015, and filed September 2, 2015, the court ordered dismissal of all direct claims in the Nevada Lawsuit. Additionally, on February 20, 2015, the Court issued its preliminary approval to the derivative action settlement agreement (the "DASA'), which would lead to the ultimate dismissal of the derivative suit also filed by Spirit Bear in the same action. The Court has scheduled a fairness hearing for November 20, 2015, to consider giving its final approval to the DASA. No shareholder filed any objections to the DASA by April 30, 2015, which was the deadline established by the Court for filing objections. On October 22, 2015, however, Peak Finance, LLC ("Peak Finance") filed a Motion to Intervene in the action seeking, among other things, approval to file a new derivative Complaint in this matter. The Company has opposed this Motion. On August 31, 2015, the Company received notice of a summons in the matter styled Peak Finance, Derivatively on Behalf of Nominal Defendant, HPEV, Inc. v. Hassett, et al., No. 2:15-cv-01590-GMN-CWH, filed in the United States District Court for the District of Nevada (the "Peak Finance Claim"). Plaintiff Peak Finance, LLC ("Peak Finance") alleges that certain members of the Company's Board of Directors and officers caused a misleading proxy statement to issue and breached alleged fiduciary duties from and after June 18, 2013. Peak Finance further alleges that its claim is related to the Spirit Bear Lawsuit described above. The Company has not determined that there is any merit to the allegations, and has decided to submit the claims to an Independent Director Committee consisting of Directors Christopher McKee, Richard J. "Dick" Schul, and Donald Bowman for their review and consideration. Additionally, on September 28, 2015, the Company filed a motion to dismiss the initial Complaint filed by Peak Finance. On October 22, 2015, rather than oppose the motion to dismiss, Peak Finance filed an amended complaint in this case in addition to the Motion to Intervene in the pending Spirit Bear litigation set forth above. On November 9, 2015, the Company filed a new motion to dismiss the first amended complaint filed by Peak Finance on October 22, 2015. At the November 20, 2015, fairness hearing, the Court denied Peak Finance's Motion to Intervene. However, the Court did allow Peak Finance to formally argue its objections to the DASA. The Court ordered additional briefing on certain issues, which has not been completed. The Court further ordered another hearing to consider the DASA on April 1, 2016. On April 1, 2016, Peak Finance and the Company advised the Court that they had agreed in principle to a settlement that would include withdrawal of Peak Finance's objection to the DASA. On April 20, 2016, the parties filed a Stipulation and Proposed Order for Withdrawal of Objection to DASA, which was granted by the Court on April 21, 2016. On May 3, 2016, the Court issued an Order, which fully and finally approved the DASA and dismissed the Peak Finance and the Spirit Bear cases, with prejudice. On May 17, 2016, the Company filed a document to show cause as to the effect of the Stipulation and Proposed Order Regarding Settlement on the pending Motion to Dismiss Amended Complaint. Also on May 17, 2016, Peak Finance and the Company filed a Stipulation and Proposed Order to Modify Stay of Proceedings so that the stay issued on January 6, 2016 could be modified in order to permit the Court to consider the Stipulation and Proposed Order Regarding Settlement and for the Court and all parties to take all necessary actions to seek final approval of a settlement prior to the Court ruling on the pending Motion to Dismiss. From time to time, the Company may be a party to other legal proceedings. Management currently believes that the ultimate resolution of these other matters, if any, and after consideration of amounts accrued, will not have a material adverse effect on our consolidated results of operations, financial position, or cash flow. |
Equity
Equity | 6 Months Ended |
Jun. 30, 2016 | |
Notes to Financial Statements | |
Note 6 - Equity | Common Stock On August 19, 2015, the stockholders voted to increase the number of authorized shares of common stock from 100,000,000 shares to 140,000,000 shares. Common stock issuable on the condensed consolidated balance sheet represents common stock to be issued for either cash received or services performed. As of June 30, 2016 and December 31, 2015, the number of shares of common stock to be issued was 265,412 and 701,018 shares, respectively. As part of a December 2015 Convertible Note agreement, the Company placed 13,291,667 shares of our common stock in escrow as collateral. Shares in escrow are deemed to be issued and outstanding. Common stock warrants issued with the sale of our common stock When the Company sells shares of our common stock the buyer also typically receives fully-vested common stock warrants with a maximum contractual term of 3-5 years. A summary of common stock warrants issued with the sale of our common stock as of June 30, 2016, and changes during the period then ended is presented below: Number of Warrants Weighted-average Exercise Price Weighted-average Remaining Life (Years) Aggregate Intrinsic Value Outstanding, December 31, 2015 20,726,707 $ 0.49 Granted 5,130,770 0.24 Forfeited or cancelled (2,438,194 ) 0.40 Outstanding, June 30, 2016 23,419,283 0.46 2.01 $ 0 Exercisable, June 30, 2016 23,419,283 0.46 2.01 $ 0 Included in the warrants granted and cancelled above are 3,729,164 warrants for which the life was extended by one year, for which the Company recorded expense of $660,000. |
Share-based payments
Share-based payments | 6 Months Ended |
Jun. 30, 2016 | |
Notes to Financial Statements | |
Note 7 - Share-based payments | Amounts recognized as expense in the consolidated statements of operations related to share-based payments are as follows: Six months ended June 30, 2016 2015 Nonemployee common stock $ -- $ 571,207 Nonemployee warrants fully-vested upon issuance 445,390 -- Nonemployee warrants service and performance conditions 9,856 31,887 Legal Settlement replacement warrants 1,119,450 Employee stock options market price-based 327,000 654,000 Total share-based expense charged against income $ 782,246 $ 2,376,544 Impact on net loss per common share: Basic and diluted $ (0.01 ) $ (0.04 ) Nonemployee common stock UPT management agreement In July, 2014, the Company entered into an agreement with the company managing the operations of UPT, whereby the Company would issue common stock under the following conditions: Condition Number of Shares UPT recognizes $100 million of revenue or a change in control 500,000 UPT recognizes $100 million of revenue 150,000 650,000 As of June 30, 2016, and from the date of the agreement, meeting these conditions was not deemed probable, so no expense was recognized under this agreement and no common stock was issued. Investor relations agreement In June, 2014, the Company entered into an agreement with a company, which subsequently became a shareholder, to provide investor relations services. Under the terms of this agreement the Company agreed to issue 60,000 shares of common stock each quarter through May 2015, for a total of 240,000 shares. The Company recognized expense of $31,200, during the quarter ended March 31, 2015, for the issuance of 60,000 shares. In January, 2016, the Company entered into an agreement with a company, which subsequently became a shareholder, to provide investor relations services. Under the terms of this agreement, the Company agreed to issue 150,000 one year warrants per month through February 2016, for a total of 300,000 warrants. In March 2016, the Company renewed the agreement through December 2016. Under the terms of the renewed agreement, the Company agreed to issue 50,000 restricted common shares and 150,000 one year warrants each month for three months. Thereafter, the Company agreed to issue 100,000 restricted common shares and 100,000 warrants each month for the duration of the renewed agreement. A total of 2,000,000 restricted common shares and warrants are due to be issued under the renewed agreement. The Company recognized expenses of $5,000 for the issuance of 25,000 shares and $65,151 for the issuance of 600,000 warrants during the quarter ended June 30, 2016. Other During the quarters ended June 30, 2016 and 2015, the Company issued no other shares of common stock in exchange for services. Nonemployee common stock warrants -- Fully-vested upon issuance Financing Advisory Services In January 2016, the Company modified the terms of previously issued warrants and issued additional warrants to a company that provides us with financial consulting services. The Company lowered the exercise price on 2,533,000 warrants to $0.30 per share for warrants that previously had exercise prices ranging from $0.56 to $2.50 per share. As a result of modifying the previously issued warrants, the Company recognized expense of $64,000. The Company also issued 1,266,503 additional warrants with an exercise price of $0.30 per share that expire in five years, for which the Company recognized expense of $246,500. The following summarizes the Black-Scholes assumptions used to estimate the fair value of these common stock warrants: Replacement Warrants Additional Warrants Volatility 133 182 % 204 % Risk-free interest rate 1.1 1.3 % 1.4 % Expected life (years) 3.0 4.3 5.0 Dividend yield -- -- Board of Advisors In February 2016, the Company issued three year warrants to purchase 400,000 shares of common stock at an exercise price of $0.27 per share and 200,000 shares of common stock at an exercise price of $0.31 per share, to five individuals serving on our board of advisors. The Company recognized $134,890 of expense for these warrants. The following summarizes the Black-Scholes assumptions used to estimate the fair value of these common stock warrants: Volatility 127 % Risk-free interest rate 0.9 % Expected life (years) 3.0 Dividend yield -- Nonemployee common stock warrants -- Service and performance conditions UPT management agreement In July, 2014, the Company entered into a three-year agreement with the company managing the operations of UPT, whereby the Company would issue common stock warrants under the following conditions: Number of Vesting Condition Category Warrants Fully vest upon UPT generating $1 million of revenue Performance 350,000 45,945 warrants for every $3 million of revenue generated by UPT up to $100 million Performance 1,530,000 60,000 warrants for every three months of completed service managing UPT Service 720,000 Total 2,600,000 Vested June 30, 2016 (480,000 ) Nonvested June 30, 2016 2,120,000 The common stock warrants have a three-year life and an exercise price of $1.00 per share. The grant date fair value was $2,586,000. As of June 30, 2016, and since the date of the agreement, the Company has not deemed it probable that the performance conditions will be met, so no expense was recognized and no common stock warrants vested. During the six months ended June 30, 2016 and 2015, 120,000 of the common stock warrants under the service condition vested with the passage of time and the Company recognized expense of $12,007 and $61,200, respectively. Financing advisory services In March, 2014, the Company entered into an agreement with a company, which is also a shareholder, to provide financing advisory services, in return for 400,000 common stock warrants having a five year life and an exercise price of $2.50, with vesting in March, 2015 upon satisfactory performance under the agreement. As of December 31, 2014, the Company deemed it probable that the vesting conditions would be met. Accordingly, during the year ended December 31, 2014, the Company recognized estimated expense of $200,379. As of June 30, 2015, the service conditions were met and the award was re-valued at $179,964, resulting in a reduction in expense of $20,415 during the quarter ended June 30, 2015. Employee stock options Fully-vested The Company granted no additional fully-vested options during the three months ended June 30, 2016. Employee stock options Market-based The Company granted no additional options that vest upon the achievement of certain stock prices during the three months ended June 30, 2016. No additional non-vested market-based options vested during the quarter ended June 30, 2016. |
Net Loss per Share
Net Loss per Share | 6 Months Ended |
Jun. 30, 2016 | |
Notes to Financial Statements | |
Note 8 - 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 2016 2015 2016 2015 Net loss available for stockholders $ (697,940 ) $ (2,950,004 ) $ (3,236,320 ) $ (4,228,440 ) Weighted average outstanding shares of common stock 82,148,475 64,093,646 88,558,027 62,845,402 Dilutive effect of stock options and warrants -- -- -- -- Common stock and equivalents 82,148,475 64,093,646 88,558,027 62,845,402 Net loss per share Basic and diluted $ (0.01 ) $ (0.05 ) $ (0.04 ) $ (0.07 ) Outstanding stock options and common stock warrants are considered anti-dilutive because the Company is in a net loss position. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2016 | |
Notes to Financial Statements | |
Note 9 - Subsequent Events | On August 12, 2016, the Company filed an Amendment to the Certificate of Designation with the State of Nevada which amended the rights and terms of the 14,500,000 authorized shares of the Company's Series B Preferred Stock. The amendment passed by Unanimous Written Consent of the Board of Directors enables the holders of shares of Series B Preferred Stock to convert the shares to common stock on a one-to- one basis, to share in dividends issued by the Company and to directly or indirectly assign, transfer, sell or otherwise dispose of the Preferred Stock without the prior written consent of the Board. The requirement for stockholders to grant an irrevocable proxy was rescinded. During July and August, 2016, a total of $284,787 under an October 2015 Note Payable -- Original Issue Discount were converted in exchange for 8,751,606 shares of our common stock as a consequence of a Second Extension and Amendment Agreement signed May 23, 2016, in which the note holder received the right to convert a portion or all of the unpaid principal balance. During July and August, 2016, a total of $140,350 under the December 2015 Convertible Note were converted in exchange for 5,153,403 shares of our common stock. During July and August, 2016, a total of $84,177 under the May 2016 Convertible Note were converted in exchange for 2,409,975 shares of our common stock. On August 17, 2016, the Company signed an Amendment to the Convertible Promissory Note which extended the maturity date of the note by two weeks to August 24, 2016. In exchange for the extension, the Company agreed to pay the lender an extension fee of $15,000 payable in conversion shares. The conversion shares totaled $25,000. The remaining $10,000 was used to reduce the outstanding balance of the note. |
Description of Business and S15
Description of Business and Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2016 | |
Description Of Business And Summary Of Significant Accounting Policies Policies | |
Description of Business | Cool Technologies, Inc. and subsidiary, (we, us, our, the "Company" or "Cool Technologies") was incorporated in the State of Nevada in July 2002. In April 2014, the Company formed Ultimate Power Truck, LLC ("Ultimate Power Truck" or "UPT"), of which the Company owns 95% and a shareholder of Cool Technologies owns 5%. The Company was formerly known as Bibb Corporation, as Z3 Enterprises, and as HPEV Inc. On August 20, 2015, the Company changed its name to Cool Technologies, Inc. |
Basis of Presentation | The accompanying condensed consolidated balance sheet as of December 31, 2015, 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. Noncontrolling interest represents the 5% third party ownership of our subsidiary, UPT. 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 for the year ended December 31, 2015. |
Going Concern | The accompanying condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern. The Company has incurred net losses of $42,574,820 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 raise capital, generate revenue, achieve profitable operations and repay our obligations when they come due. The Company will have to obtain additional debt and / or equity financing; however, the Company cannot provide investors with assurance that the Company will be able to raise sufficient capital to fund our operations. These 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 is negotiating additional funding arrangements to support completion of the commercialization phases of our business plan: to license its thermal technologies and applications, including submersible dry-pit applications; and to license and sell mobile generation retrofit kits (our Ultimate Power Truck business) as well as retrofitted vehicles that incorporate our proprietary gearing system. There can be no assurance, however, that the Company will be successful in raising additional financing and accomplishing these objectives. |
Recently Issued Accounting Pronouncements | Financial Accounting Standards Board, or FASB, Accounting Standards Update, or FASB ASU 2016-09 "Compensation Stock Compensation (Topic 718)" FASB ASU 2016-10 "Revenue from Contracts with Customers (Topic 606)" |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Debt Tables | |
Summary of Debt | Debt consists of the following: June 30, 2016 December 31, 2015 Notes payable -- original issue discount $ - $ 400,000 Convertible notes payable 887,178 365,350 Test vehicle financing 69,539 77,075 Note payable related party 237 22,910 Note payable UPT minority owner 250,000 250,000 1,206,954 1,115,335 Debt discount (164,031 ) (339,629 ) 1,042,923 775,706 Less: current portion (993,892 ) (697,903 ) $ 49,031 $ 77,803 |
Future contractual maturities of debt | Future contractual maturities of debt are as follows: Year ending December 31, 2016 $ 870,917 2017 296,937 2018 20,789 2019 18,311 $ 1,206,954 |
Derivative Liability (Tables)
Derivative Liability (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Derivative Liability Tables | |
Fair value of the derivative liability | The following summarizes the Black-Scholes assumptions used to estimate the fair value of the derivative liability at the dates of issuance and the revaluation dates: January 27, 2016 (1) February 10, 2016 (2) February 24, 2016 (3) March 31, 2016 Volatility 121 % 121 % 118 % 121 127 % Risk-free interest rate 0.5 % 0.4 % 0.7 % 0.3 0.8 % Expected life (years) 1.0 0.5 1.6 0.4 2.7 Dividend yield -- -- -- -- April 11, 2016 (3) April 19, 2016 (3) April 27, 2016 (3) May 3, 2016 (3) Volatility 111.5 % 113.4 % 119 % 120.3 % Risk-free interest rate 0.62 % 0.65 % 0.71 % 0.64 % Expected life (years) 1.43 1.41 1.39 1.37 Dividend yield -- -- -- -- May 6, 2016 (3) May 16, 2016 (3) (6) May 23, 2016 (5) May 24, 2016 (5) Volatility 120.4 % 124 137.9 % 138.1 % 139 % Risk-free interest rate 0.63 % 0.48 - 0.57 % 0.28 % 0.69 % Expected life (years) 1.36 0.76 - 1.33 0.36 1.0 Dividend yield -- -- -- -- May 27, 2016 (3)(8) May 30, 2016 June 10, 2016 (4)(7) June 13, 2016 (8) Volatility 125 - 139 % 111 157.5 % 145% 146 % Risk-free interest rate 0.58 - 0.69 % 0.49 - 0.95 % 0.26 - 0.42 % 0.55 % Expected life (years) 0.99 - 1.30 0.51 2.51 0.31- 0.48 0.95 Dividend yield -- -- -- -- June 21, 2016 (7) June 29, 2016 (4)(7) June 30, 2016 Volatility 146.2 % 144.2 % 118 144.2 % Risk-free interest rate 0.27 % 0.26 -35 % 0.2 0.65 % Expected life (years) 0.28 0.25 0.42 0.11 2.42 Dividend yield -- -- -- -- ________________ (1) Additional borrowing under the December 2015 Convertible Note. (2) Borrowing under the February 2016 Convertible Note. (3) Partial conversion of the September 2015 Convertible Note. (4) Partial conversion of the December 2015 Convertible Note. (5) Notes Payable Original Issue Discount converted into Exchange Notes. (6) Borrowing under the May 2016 Convertible Note. (7) Partial Conversion of Notes Payable Original Issue Discount (8) Partial Conversion of Exchange Notes |
Changes in the derivative liability | Changes in the derivative liability were as follows: Amount December 31, 2015 $ 356,554 December 2015 Convertible Note additional borrowing 53,951 February 2016 Convertible Note 252,271 Exchange Notes Payable Original Issue Discount 347,672 May 2016 Convertible Note 200,529 Exchange December Convertible Note 34,673 Conversion September 2015 Convertible Note (171,276 ) Conversion - December 2015 Convertible Note (75,305 ) Conversion Notes Payable Original Issue Discount (110,093 ) Change in fair value at June 30, 2016 (398,138 ) June 30, 2016 $ 490,838 |
Equity (Tables)
Equity (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Equity Tables | |
A summary of common stock warrants issued | A summary of common stock warrants issued with the sale of our common stock as of June 30, 2016, and changes during the period then ended is presented below: Number of Warrants Weighted-average Exercise Price Weighted-average Remaining Life (Years) Aggregate Intrinsic Value Outstanding, December 31, 2015 20,726,707 $ 0.49 Granted 5,130,770 0.24 Forfeited or cancelled (2,438,194 ) 0.40 Outstanding, June 30, 2016 23,419,283 0.46 2.01 $ 0 Exercisable, June 30, 2016 23,419,283 0.46 2.01 $ 0 |
Share-based payments (Tables)
Share-based payments (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Financial statements related to equity-based payments | Amounts recognized as expense in the consolidated statements of operations related to share-based payments are as follows: Six months ended June 30, 2016 2015 Nonemployee common stock $ -- $ 571,207 Nonemployee warrants fully-vested upon issuance 445,390 -- Nonemployee warrants service and performance conditions 9,856 31,887 Legal Settlement replacement warrants 1,119,450 Employee stock options market price-based 327,000 654,000 Total share-based expense charged against income $ 782,246 $ 2,376,544 Impact on net loss per common share: Basic and diluted $ (0.01 ) $ (0.04 ) |
Fair value of each option award | The following summarizes the Black-Scholes assumptions used to estimate the fair value of these common stock warrants: Volatility 127 % Risk-free interest rate 0.9 % Expected life (years) 3.0 Dividend yield -- |
Nonemployee Common stock [Member] | |
Common stock conditions | In July, 2014, the Company entered into an agreement with the company managing the operations of UPT, whereby the Company would issue common stock under the following conditions: Condition Number of Shares UPT recognizes $100 million of revenue or a change in control 500,000 UPT recognizes $100 million of revenue 150,000 650,000 |
Nonemployee common stock warrants -- Fully-vested upon issuance [Member] | |
Fair value of each option award | The following summarizes the Black-Scholes assumptions used to estimate the fair value of these common stock warrants: Replacement Warrants Additional Warrants Volatility 133 182 % 204 % Risk-free interest rate 1.1 1.3 % 1.4 % Expected life (years) 3.0 4.3 5.0 Dividend yield -- -- |
Nonemployee Common stock warrants - Service and performance conditions [Member] | |
Common stock warrants performance and service conditions | In July, 2014, the Company entered into a three-year agreement with the company managing the operations of UPT, whereby the Company would issue common stock warrants under the following conditions: Number of Vesting Condition Category Warrants Fully vest upon UPT generating $1 million of revenue Performance 350,000 45,945 warrants for every $3 million of revenue generated by UPT up to $100 million Performance 1,530,000 60,000 warrants for every three months of completed service managing UPT Service 720,000 Total 2,600,000 Vested June 30, 2016 (480,000 ) Nonvested June 30, 2016 2,120,000 |
Net Loss per Share (Tables)
Net Loss per Share (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Net Loss Per Share Tables | |
Reconciliation of the denominators used in the computation of net loss per share basic and diluted: | 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 2016 2015 2016 2015 Net loss available for stockholders $ (697,940 ) $ (2,950,004 ) $ (3,236,320 ) $ (4,228,440 ) Weighted average outstanding shares of common stock 82,148,475 64,093,646 88,558,027 62,845,402 Dilutive effect of stock options and warrants -- -- -- -- Common stock and equivalents 82,148,475 64,093,646 88,558,027 62,845,402 Net loss per share Basic and diluted $ (0.01 ) $ (0.05 ) $ (0.04 ) $ (0.07 ) |
3. Debt (Details)
3. Debt (Details) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Debt Details | ||
Notes payable - original issue discount | $ 400,000 | |
Convertible notes payable | 887,178 | 365,350 |
Test vehicle financing | 69,539 | 77,075 |
Note payable - related party | 237 | 22,910 |
Note payable - UPT minority owner | 250,000 | 250,000 |
Total | 1,206,954 | 1,115,335 |
Debt discount | (164,031) | (339,629) |
Total | 1,042,923 | 775,706 |
Less: current portion | (993,892) | (697,903) |
Debt, long-term portion | $ 49,031 | $ 77,803 |
3. Debt (Details 1)
3. Debt (Details 1) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Debt Details 1 | ||
2,016 | $ 870,917 | |
2,017 | 296,937 | |
2,018 | 20,789 | |
2,019 | 18,311 | |
Total | $ 1,206,954 | $ 1,115,335 |
4. Derivative Liability (Detail
4. Derivative Liability (Details) | 3 Months Ended | 6 Months Ended | |
Mar. 31, 2016 | Jun. 30, 2016 | ||
Minimum [Member] | |||
Volatility | 121.00% | 118.00% | |
Risk-free interest rate | 0.30% | 0.20% | |
Expected life (years) | 4 months 24 days | 1 month 10 days | |
Dividend yield | |||
Maximum [Member] | |||
Volatility | 127.00% | 144.20% | |
Risk-free interest rate | 0.80% | 0.65% | |
Expected life (years) | 2 years 8 months 12 days | 2 years 5 months 1 day | |
Dividend yield | |||
January 27, 2016 [Member] | |||
Volatility | [1] | 121.00% | |
Risk-free interest rate | [1] | 0.50% | |
Expected life (years) | [1] | 1 year | |
Dividend yield | [1] | ||
February 10, 2016 [Member] | |||
Volatility | [2] | 121.00% | |
Risk-free interest rate | [2] | 0.40% | |
Expected life (years) | [2] | 5 months | |
Dividend yield | [2] | ||
February 24, 2016 [Member] | |||
Volatility | [3] | 118.00% | |
Risk-free interest rate | [3] | 0.70% | |
Expected life (years) | [3] | 1 year 7 months 6 days | |
Dividend yield | [3] | ||
[1] | (1) Additional borrowing under the December 2015 Convertible Note. | ||
[2] | (2) Borrowing under the February 2016 Convertible Note. | ||
[3] | (3) Partial conversion of the September 2015 Convertible Note. |
4. Derivative Liability (Deta24
4. Derivative Liability (Details 1) | 6 Months Ended | |
Jun. 30, 2016 | [1] | |
April 11, 2016 [Member] | ||
Volatility | 111.50% | |
Risk-free interest rate | 0.62% | |
Expected life (years) | 1 year 5 months 5 days | |
Dividend yield | ||
April 19, 2016 [Member] | ||
Volatility | 113.40% | |
Risk-free interest rate | 0.65% | |
Expected life (years) | 1 year 4 months 28 days | |
Dividend yield | ||
April 27, 2016 [Member] | ||
Volatility | 119.00% | |
Risk-free interest rate | 0.71% | |
Expected life (years) | 1 year 4 months 21 days | |
Dividend yield | ||
May 3, 2016 [Member] | ||
Volatility | 120.30% | |
Risk-free interest rate | 0.64% | |
Expected life (years) | 1 year 4 months 13 days | |
Dividend yield | ||
[1] | (3) Partial conversion of the September 2015 Convertible Note. |
4. Derivative Liability (Deta25
4. Derivative Liability (Details 2) | 3 Months Ended | 6 Months Ended | |
Mar. 31, 2016 | Jun. 30, 2016 | ||
Minimum [Member] | |||
Volatility | 121.00% | 118.00% | |
Risk-free interest rate | 0.30% | 0.20% | |
Expected life (years) | 4 months 24 days | 1 month 10 days | |
Dividend yield | |||
Maximum [Member] | |||
Volatility | 127.00% | 144.20% | |
Risk-free interest rate | 0.80% | 0.65% | |
Expected life (years) | 2 years 8 months 12 days | 2 years 5 months 1 day | |
Dividend yield | |||
May 6, 2016 [Member] | |||
Volatility | [1] | 120.40% | |
Risk-free interest rate | [1] | 0.63% | |
Expected life (years) | [1] | 1 year 4 months 10 days | |
Dividend yield | [1] | ||
May 16, 2016 [Member] | |||
Dividend yield | |||
May 16, 2016 [Member] | Minimum [Member] | |||
Volatility | [1],[2] | 124.00% | |
Risk-free interest rate | [1],[2] | 0.48% | |
Expected life (years) | [1],[2] | 9 months 4 days | |
May 16, 2016 [Member] | Maximum [Member] | |||
Volatility | [1],[2] | 137.90% | |
Risk-free interest rate | [1],[2] | 0.57% | |
Expected life (years) | [1],[2] | 1 year 3 months 29 days | |
May 23, 2016 [Member] | |||
Volatility | [3] | 138.10% | |
Risk-free interest rate | [3] | 0.28% | |
Expected life (years) | [3] | 4 months 10 days | |
Dividend yield | [3] | ||
May 24, 2016 [Member] | |||
Volatility | [3] | 139.00% | |
Risk-free interest rate | [3] | 0.69% | |
Expected life (years) | [3] | 1 year | |
Dividend yield | [3] | ||
[1] | (3) Partial conversion of the September 2015 Convertible Note. | ||
[2] | (6) Borrowing under the May 2016 Convertible Note. | ||
[3] | (5) Notes Payable Original Issue Discount converted into Exchange Notes. |
4. Derivative Liability (Deta26
4. Derivative Liability (Details 3) | 3 Months Ended | 6 Months Ended | |
Mar. 31, 2016 | Jun. 30, 2016 | ||
Minimum [Member] | |||
Volatility | 121.00% | 118.00% | |
Risk-free interest rate | 0.30% | 0.20% | |
Expected life (years) | 4 months 24 days | 1 month 10 days | |
Dividend yield | |||
Maximum [Member] | |||
Volatility | 127.00% | 144.20% | |
Risk-free interest rate | 0.80% | 0.65% | |
Expected life (years) | 2 years 8 months 12 days | 2 years 5 months 1 day | |
Dividend yield | |||
May 27, 2016 [Member] | |||
Dividend yield | |||
May 27, 2016 [Member] | Minimum [Member] | |||
Volatility | [1],[2] | 125.00% | |
Risk-free interest rate | [1],[2] | 0.58% | |
Expected life (years) | [1],[2] | 11 months 27 days | |
May 27, 2016 [Member] | Maximum [Member] | |||
Volatility | [1],[2] | 136.00% | |
Risk-free interest rate | [1],[2] | 0.69% | |
Expected life (years) | [1],[2] | 1 year 3 months 18 days | |
May 30, 2016 [Member] | |||
Dividend yield | |||
May 30, 2016 [Member] | Minimum [Member] | |||
Volatility | 111.00% | ||
Risk-free interest rate | 0.49% | ||
Expected life (years) | 6 months 4 days | ||
May 30, 2016 [Member] | Maximum [Member] | |||
Volatility | 157.50% | ||
Risk-free interest rate | 0.95% | ||
Expected life (years) | 2 years 6 months 4 days | ||
Jun 10, 2016 [Member] | |||
Volatility | [3],[4] | 145.00% | |
Dividend yield | |||
Jun 10, 2016 [Member] | Minimum [Member] | |||
Risk-free interest rate | [3],[4] | 0.26% | |
Expected life (years) | [3],[4] | 3 months 22 days | |
Jun 10, 2016 [Member] | Maximum [Member] | |||
Risk-free interest rate | [3],[4] | 0.42% | |
Expected life (years) | [3],[4] | 5 months 23 days | |
June 13, 2016 [Member] | |||
Volatility | [2] | 146.00% | |
Risk-free interest rate | [2] | 0.55% | |
Expected life (years) | [2] | 11 months 12 days | |
[1] | (3) Partial conversion of the September 2015 Convertible Note. | ||
[2] | (8) Partial Conversion of Exchange Notes | ||
[3] | (4) Partial conversion of the December 2015 Convertible Note. | ||
[4] | (7) Partial Conversion of Notes Payable Original Issue Discount |
4. Derivative Liability (Deta27
4. Derivative Liability (Details 4) | 3 Months Ended | 6 Months Ended | |
Mar. 31, 2016 | Jun. 30, 2016 | ||
Minimum [Member] | |||
Volatility | 121.00% | 118.00% | |
Risk-free interest rate | 0.30% | 0.20% | |
Expected life (years) | 4 months 24 days | 1 month 10 days | |
Dividend yield | |||
Maximum [Member] | |||
Volatility | 127.00% | 144.20% | |
Risk-free interest rate | 0.80% | 0.65% | |
Expected life (years) | 2 years 8 months 12 days | 2 years 5 months 1 day | |
Dividend yield | |||
June 21, 2016 [Member] | |||
Volatility | [1] | 146.20% | |
Risk-free interest rate | [1] | 0.27% | |
Expected life (years) | [1] | 3 months 11 days | |
Dividend yield | [1] | ||
June 29, 2016 [Member] | |||
Volatility | [1],[2] | 144.20% | |
Dividend yield | [1],[2] | ||
June 29, 2016 [Member] | Minimum [Member] | |||
Risk-free interest rate | [1],[2] | 0.26% | |
Expected life (years) | [1],[2] | 3 months | |
June 29, 2016 [Member] | Maximum [Member] | |||
Risk-free interest rate | [1],[2] | 35.00% | |
Expected life (years) | [1],[2] | 5 months 1 day | |
[1] | (7) Partial Conversion of Notes Payable Original Issue Discount | ||
[2] | (4) Partial conversion of the December 2015 Convertible Note. |
4. Derivative Liability (Deta28
4. Derivative Liability (Details 5) | 6 Months Ended |
Jun. 30, 2016USD ($) | |
Derivative Liability Details 5 | |
Derivative liability, Beginning balance | $ 356,554 |
December 2015 Convertible Note - additional borrowing | 53,951 |
February 2016 Convertible Note | 252,271 |
Exchange – Notes Payable Original Issue Discount | 347,672 |
May 2016 Convertible Note | 200,529 |
Exchange – December Convertible Note | 34,673 |
Conversion - September 2015 Convertible Note | (171,276) |
Conversion - December 2015 Convertible Note | (75,305) |
Conversion – Notes Payable Original Issue Discount | (110,093) |
Change in fair value at March 31, 2016 | (398,138) |
Derivative liability, Ending balance | $ 490,838 |
4. Derivative Liability (Deta29
4. Derivative Liability (Details Narrative) | Jun. 30, 2016shares |
Derivative Liability Details Narrative | |
Number of shares issuable for conversion features and warrants exercised | 14,310,748 |
6. Equity (Details)
6. Equity (Details) - Warrants [Member] | 6 Months Ended |
Jun. 30, 2016USD ($)$ / sharesshares | |
Number of Warrants | |
Outstanding, Beginning | shares | 20,726,707 |
Granted | shares | 5,130,770 |
Forfeited or cancelled | shares | (2,438,194) |
Outstanding, Ending | shares | 23,419,283 |
Exercisable, Ending | shares | 23,419,283 |
Weighted Average Exercise Price | |
Outstanding, Beginning | $ / shares | $ 0.49 |
Granted | $ / shares | 0.24 |
Forfeited or expired | $ / shares | 0.40 |
Outstanding, Ending | $ / shares | 0.46 |
Exercisable, Ending | $ / shares | $ 0.46 |
Weighted-average Remaining Life (Years) | |
Outstanding | 2 years 4 days |
Exercisable | 2 years 4 days |
Aggregate Intrinsic Value | |
Outstanding, Ending | $ | $ 0 |
Exercisable, Ending | $ | $ 0 |
6. Equity (Details Narrative)
6. Equity (Details Narrative) - shares | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Equity Details Narrative | ||
Common stock to be issued | 265,412 | 701,018 |
7. Share-based payments (Detail
7. Share-based payments (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Share-based Payments Details | ||
Nonemployee common stock | $ 571,207 | |
Nonemployee warrants - fully-vested upon issuance | 445,390 | |
Nonemployee warrants - service and performance conditions | 9,856 | 31,887 |
Legal Settlement – replacement warrants | 1,119,450 | |
Employee stock options - market price-based | 327,000 | 654,000 |
Total share-based expense charged against income | $ 782,246 | $ 2,376,544 |
Impact on net loss per common share: Basic and diluted | $ (0.01) | $ (0.04) |
7. Share-based payments (Deta33
7. Share-based payments (Details 1) | Jun. 30, 2016shares |
Common stock shares issued | 650,000 |
Condition One [Member] | |
Common stock shares issued | 500,000 |
Condition Two [Member] | |
Common stock shares issued | 150,000 |
7. Share-based payments (Deta34
7. Share-based payments (Details 2) | 6 Months Ended |
Jun. 30, 2016 | |
Volatility | 127.00% |
Risk-free interest rate | 0.90% |
Expected life (years) | 3 years |
Dividend yield | 0.00% |
Replacement Warrants [Member] | Minimum [Member] | |
Volatility | 133.00% |
Risk-free interest rate | 1.10% |
Expected life (years) | 3 years |
Dividend yield | 0.00% |
Replacement Warrants [Member] | Maximum [Member] | |
Volatility | 182.00% |
Risk-free interest rate | 1.30% |
Expected life (years) | 4 years 3 months 18 days |
Dividend yield | 0.00% |
Additional Warrants [Member] | |
Volatility | 204.00% |
Risk-free interest rate | 1.40% |
Expected life (years) | 5 years |
Dividend yield | 0.00% |
7. Share-based payments (Deta35
7. Share-based payments (Details 3) | 6 Months Ended |
Jun. 30, 2016 | |
Share-based Payments Details | |
Volatility | 127.00% |
Risk-free interest rate | 0.90% |
Expected life (years) | 3 years |
Dividend yield | 0.00% |
7. Share-based payments (Deta36
7. Share-based payments (Details 4) | 6 Months Ended |
Jun. 30, 2016shares | |
Common stock warrants issued | 2,600,000 |
Vested June 30, 2016 | (480,000) |
Nonvested June 30, 2016 | 2,120,000 |
Vesting Condition One [Member] | |
Common stock warrants issued | 350,000 |
Category | Performance |
Vesting Condition Two [Member] | |
Common stock warrants issued | 1,530,000 |
Category | Performance |
Vesting Condition Three [Member] | |
Common stock warrants issued | 720,000 |
Category | Service |
7. Share-based payments (Deta37
7. Share-based payments (Details Narrative) - USD ($) | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Common stock warrants under the service condition vested | 120,000 | 120,000 |
Recognized expense | $ 12,007 | $ 61,200 |
Investor relations agreement [Member] | ||
Issuance of common stock | 600,000 | |
Recorded expense | $ 65,151 |
8. Net Loss per Share (Details)
8. Net Loss per Share (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Net Loss Per Share Details | ||||
Net loss available for stockholders | $ (697,940) | $ (2,950,004) | $ (3,236,320) | $ (4,228,440) |
Weighted average outstanding shares of common stock | 82,148,475 | 64,093,646 | 88,558,027 | 62,845,402 |
Dilutive effect of stock options and warrants | ||||
Common stock and equivalents | 82,148,475 | 64,093,646 | 88,558,027 | 62,845,402 |
Net loss per share - Basic and diluted | $ (0.01) | $ (0.05) | $ (0.04) | $ (0.07) |