Document_And_Entity_Informatio
Document And Entity Information | 9 Months Ended | |
Sep. 30, 2014 | Dec. 15, 2014 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | CYCLONE POWER TECHNOLOGIES INC | |
Document Type | 10-Q | |
Current Fiscal Year End Date | -19 | |
Entity Common Stock, Shares Outstanding | 861,315,561 | |
Amendment Flag | FALSE | |
Entity Central Index Key | 1442711 | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Filer Category | Smaller Reporting Company | |
Entity Well-known Seasoned Issuer | No | |
Document Period End Date | 30-Sep-14 | |
Document Fiscal Year Focus | 2014 | |
Document Fiscal Period Focus | Q3 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (Current Period Unaudited) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
CURRENT ASSETS | ||
Cash | $306,320 | $17,363 |
Accounts receivable | 150,000 | |
Other receviables | 150,000 | |
Inventory, net | 439,941 | 489,420 |
Other current assets | 64,251 | 55,020 |
Total current assets | 1,110,512 | 561,803 |
PROPERTY AND EQUIPMENT, NET | ||
Furniture, fixtures, and equipment | 531,048 | 502,562 |
Accumulated depreciation | -151,278 | -125,799 |
Net property and equipment | 379,770 | 376,763 |
OTHER ASSETS | ||
Patents, trademarks and copyrights | 590,643 | 571,178 |
Accumulated amortization | -225,795 | -196,410 |
Net patents, trademarks and copyrights | 364,848 | 374,768 |
Other assets | 559,518 | 2,762 |
Total other assets | 924,366 | 377,530 |
Total Assets | 2,414,648 | 1,316,096 |
CURRENT LIABILITIES | ||
Accounts payable and accrued expenses | 897,014 | 682,692 |
Accounts payable and accrued expenses-related parties | 524,061 | 1,965,596 |
Notes and other loans payable, net-current portion | 155,634 | 729,905 |
Derivative liabilities | 483,892 | 484,796 |
Notes and other loans payable-related parties | 799,319 | 775,120 |
Value of shares loaned by stockholder | 1,496,217 | |
Capitalized lease obligations-current portion | 5,612 | 6,161 |
Deferred revenue and license deposits | 122,627 | 416,186 |
Total current liabilities | 2,988,159 | 6,556,673 |
NON CURRENT LIABILITIES | ||
Capitalized lease obligations-non-current portion | 16,320 | 20,550 |
Notes and other loans payable, -net- current portion | 158,286 | 30,997 |
Total non-current liabilities | 174,606 | 51,547 |
Total Liabilities | 3,162,765 | 6,608,220 |
Commitments and contingencies | ||
STOCKHOLDERS' DEFICIT | ||
Common stock, $.0001 par value, 2,000,000,000 shares authorized, 735,320,540 and 272,679,942 shares issued and outstanding at September 30, 2014 and December 31, 2013 respectively. | 73,532 | 27,268 |
Additional paid-in capital | 52,421,213 | 48,644,132 |
Treasury Stock, 0 and 40,405,420 shares, at September 30, 2014 and December 31, 2013 respectively, at cost. | -1,706,217 | |
Prepaid expenses with common stock | -15,422 | -595,980 |
Stock subscription receivable | -6,000 | -6,000 |
Accumulated deficit (inclusive of non-cash derivative losses of $31,997,896 and other losses of $21,252,591 at September 30, 2014 and non-cash derivative losses of $31,033,299 and other losses of $21,440,971 at December 31, 2013) | -53,250,487 | -52,474,270 |
Total stockholders' deficit-Cyclone Power Technologies Inc. | -777,164 | -6,111,067 |
Non controlling interest in consolidated subsidiaries | 29,047 | 818,943 |
Total Stockholders' Deficit | -748,117 | -5,292,124 |
Total Liabilities and Stockholders' Deficit | 2,414,648 | 1,316,096 |
Series B Preferred Stock [Member] | ||
STOCKHOLDERS' DEFICIT | ||
Series B preferred stock, $.0001 par value, 1,000 shares authorized, 1,000 shares issued and outstanding at September 30, 2014 and December 31, 2013, respectively. | 0 | 0 |
Attributable to Non-Cash Derivative Liability Accounting [Member] | ||
STOCKHOLDERS' DEFICIT | ||
Accumulated deficit (inclusive of non-cash derivative losses of $31,997,896 and other losses of $21,252,591 at September 30, 2014 and non-cash derivative losses of $31,033,299 and other losses of $21,440,971 at December 31, 2013) | -31,997,896 | -31,033,299 |
Attributable to Operating Losses [Member] | ||
STOCKHOLDERS' DEFICIT | ||
Accumulated deficit (inclusive of non-cash derivative losses of $31,997,896 and other losses of $21,252,591 at September 30, 2014 and non-cash derivative losses of $31,033,299 and other losses of $21,440,971 at December 31, 2013) | ($21,252,591) | ($21,440,971) |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Common Stock, Par Value (in Dollars per share) | $0.00 | $0.00 |
Common Stock, Shares Authorized | 2,000,000,000 | 2,000,000,000 |
Common Stock, Shares Issued | 735,320,540 | 272,679,942 |
Common Stock, Shares Oustanding | 735,320,540 | 272,679,942 |
Treasury Stock, Shares | 0 | 40,405,420 |
Non-cash Derivative Losses and Other Losses (in Dollars) | ($53,250,487) | ($52,474,270) |
Series B Preferred Stock [Member] | ||
Preferred Stock, Par Value (in Dollars per share) | $0.00 | $0.00 |
Preferred Stock, Shares Authorized | 1,000 | 1,000 |
Preferred Stock, Shares Issued | 1,000 | 1,000 |
Preferred Stock, Shares Outstanding | 1,000 | 1,000 |
Attributable to Non-Cash Derivative Liability Accounting [Member] | ||
Non-cash Derivative Losses and Other Losses (in Dollars) | -31,997,896 | -31,033,299 |
Attributable to Operating Losses [Member] | ||
Non-cash Derivative Losses and Other Losses (in Dollars) | ($21,252,591) | ($21,440,971) |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations (Unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
REVENUES | $175,000 | $212,500 | $315,527 | $715,382 |
COST OF GOODS SOLD | 133,134 | 85,877 | 428,556 | |
Gross profit | 175,000 | 79,366 | 229,650 | 286,826 |
OPERATING EXPENSES | ||||
Advertising and promotion | 6,220 | 2,495 | 19,390 | 3,502 |
General and administrative | 626,059 | 572,235 | 1,606,575 | 1,447,886 |
Research and development | 396,420 | 202,829 | 713,237 | 573,600 |
Total operating expenses | 1,028,699 | 777,559 | 2,339,202 | 2,024,988 |
Operating loss | -853,699 | -698,193 | -2,109,552 | -1,738,162 |
OTHER INCOME (EXPENSE) | ||||
Other income (expense) | 2,443,506 | -33,518 | 2,443,506 | -11,518 |
Derivative income (expense) -notes payable | 31,220 | 595 | -148,289 | 595 |
Interest (expense) | -281,158 | -140,778 | -1,133,133 | -371,902 |
Total other income (expense) | 2,193,568 | -173,701 | 1,162,084 | -382,825 |
Income (loss) before income taxes | 1,339,869 | -871,894 | -947,468 | -2,120,987 |
Income taxes | 0 | 0 | 0 | 0 |
Net ( loss ) income | $1,339,869 | ($871,894) | ($947,468) | ($2,120,987) |
Net ( loss ) income per common share, basic and diluted (in Dollars per share) | $0 | $0 | $0 | ($0.01) |
Weighted average number of common shares outstanding (in Shares) | 525,746,233 | 246,939,524 | 335,841,941 | 242,791,040 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) | 9 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | ($947,468) | ($2,120,987) |
Adjustments to reconcile net loss to net cash used by operating activities: | ||
Depreciation and amortization | 54,864 | 48,773 |
Gain on deconsolidation of Whe Gen subsidiary | -2,443,506 | |
Provision for inventory reserve | 80,000 | |
Issuance of restricted common stock, options and warrants for services | 109,579 | 723,001 |
Issuance of restricted common stock in settlement of common stock warrants | 49,500 | |
Loss (gain) from derivative liability-notes payable | 148,289 | -595 |
Amortization of debt discount | 816,308 | |
Loss on debt conversion via common stock-net | 11,518 | |
Original issue discount paid with stock | 10,714 | |
Changes in operating assets and liabilities: | ||
(Increase) decrease in inventory | -30,521 | 190,683 |
(Increase) decrease in other current assets | -36,731 | 14,320 |
(Increase) in other assets | -1,200 | |
Increase in accounts payable and accrued expenses | 567,266 | 159,490 |
Increase in accounts payable and accrued expenses-related parties | 183,539 | 260,136 |
Increase (decrease) in deferred revenue and deposits | 6,505 | -210,400 |
Net cash used by operating activities | -949,286 | -691,805 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Expenditures incurred for patents, trademarks and copyrights | -19,465 | -2,469 |
Expenditures for property and equipment | -34,913 | -12,592 |
Cash transferred in sale of Whe Gen subsidiary | -887,544 | |
Net cash used by investing activities | -941,922 | -15,061 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Payment of capitalized lease obligations | -4,779 | -3,467 |
Proceeds from notes and loans payable | 515,000 | 870,000 |
Repayment of notes and loans payable | -38,615 | -161,922 |
Proceeds from sale of common stock | 110,000 | 100,000 |
Proceeds from Whe Gen debt financing | 350,000 | |
Proceeds from Whe Gen equity financing, net of offering costs | 1,224,360 | |
Increase in related party notes and loans payable-net | 24,199 | 38,422 |
Net cash provided by financing activities | 2,180,165 | 843,033 |
Net increase in cash | 288,957 | 136,167 |
Cash at beginning of year | 17,363 | 14,888 |
Cash at end of period | 306,320 | 151,055 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Payment of interest in cash | 46,055 | 25,855 |
NON CASH INVESTING AND FINANCING ACTIVITIES: | ||
Value of shares repaid to stockholder | 1,496,217 | |
Forgiveness of deferred officers' salaries | 956,762 | |
Cancellation of treasury stock | 210,000 | |
Warrant [Member] | ||
Adjustments to reconcile net loss to net cash used by operating activities: | ||
Warrants issued pursuant to repayment of debt in common stock | 119,782 | |
Derivative Debt Discount [Member] | ||
Adjustments to reconcile net loss to net cash used by operating activities: | ||
Amortization of debt discount | 816,308 | 47,717 |
Prepaid Expense [Member] | ||
Adjustments to reconcile net loss to net cash used by operating activities: | ||
Amortization of prepaid expenses via common stock and warrants | 434,724 | 65,957 |
Original Issue Discount [Member] | ||
Adjustments to reconcile net loss to net cash used by operating activities: | ||
Amortization of debt discount | 47,652 | |
Issuance for Deferred Officers' Salaries [Member] | ||
NON CASH INVESTING AND FINANCING ACTIVITIES: | ||
Common stock issued | 668,312 | |
Issuance for Accrued Expenses [Member] | ||
NON CASH INVESTING AND FINANCING ACTIVITIES: | ||
Common stock issued | 93,000 | 45,875 |
Repayment of Debt [Member] | ||
NON CASH INVESTING AND FINANCING ACTIVITIES: | ||
Common stock issued | 1,048,232 | |
Issuance for Debt Interest [Member] | ||
NON CASH INVESTING AND FINANCING ACTIVITIES: | ||
Common stock issued | 32,322 | |
Reclassification of Derivative Liabilities to APIC [Member] | ||
NON CASH INVESTING AND FINANCING ACTIVITIES: | ||
Reclassification of derivative liabilities to additional paid in capital at conversion of convertible debt | 954,641 | |
Repayment of Related Party Payables [Member] | ||
NON CASH INVESTING AND FINANCING ACTIVITIES: | ||
Common stock issued | 54,000 | |
Issuance for Debt Repayment [Member] | ||
NON CASH INVESTING AND FINANCING ACTIVITIES: | ||
Common stock issued | 343,672 | |
Payment of Debt Interest [Member] | ||
NON CASH INVESTING AND FINANCING ACTIVITIES: | ||
Common stock issued | $20,994 |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements of Cash Flows (Unaudited) (Parentheticals) | 9 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Issuance for Deferred Officers' Salaries [Member] | ||
Common stock issued, shares | 20,313,416 | |
Issuance for Accrued Expenses [Member] | ||
Common stock issued, shares | 2,050,000 | 612,500 |
Repayment of Debt [Member] | ||
Common stock issued, shares | 399,038,505 | |
Issuance for Debt Interest [Member] | ||
Common stock issued, shares | 99,898,721 | |
Repayment of Related Party Payables [Member] | ||
Common stock issued, shares | 675,000 | |
Issuance for Debt Repayment [Member] | ||
Common stock issued, shares | 4,920,833 | |
Payment of Debt Interest [Member] | ||
Common stock issued, shares | 342,996 |
Note_1_Organizational_and_Sign
Note 1 - Organizational and Significant Accounting Policies | 9 Months Ended | |||||||||||||||||
Sep. 30, 2014 | ||||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||||
Organization, Consolidation, Basis of Presentation, Business Description and Accounting Policies [Text Block] | NOTE 1 – ORGANIZATIONAL AND SIGNIFICANT ACCOUNTING POLICIES | |||||||||||||||||
A. ORGANIZATION AND OPERATIONS | ||||||||||||||||||
Cyclone Power Technologies, Inc. (the “Company”, “our,” “Cyclone”) is the successor entity to the business of Cyclone Technologies LLLP (the “LLLP”), a limited liability limited partnership formed in Florida in September 2004. The LLLP was the original developer and intellectual property holder of the Cyclone engine technology. The Company is primarily a research and development engineering company whose main purpose is to develop, commercialize, market and license its Cyclone engine technology. | ||||||||||||||||||
In 2010, the Company established a subsidiary WHE Generation Corp. f/k/a, Cyclone-WHE LLC (the “WHE Subsidiary”, “WheGen”), to market the waste heat recovery systems for all Cyclone engine models. As of September 30, 2014 the Company has sold most of its ownership and retained a 15.13 % non controlling interest in the WHE Subsidiary (see Note 15). In 2012, the Company established Cyclone Performance LLC (“Cyclone Performance”) f/k/a Cyclone-TeamSteam USA, LLC. The purpose of Cyclone Performance is to build, test and run a vehicle utilizing the Company’s engine. As of September 30, 2014, the company had a 95% controlling interest in Cyclone Performance. | ||||||||||||||||||
B. PRINCIPLES OF CONSOLIDATION AND BASIS OF PRESENTATION | ||||||||||||||||||
The unaudited consolidated financial statements include the accounts of the Company and its 95% owned subsidiary Cyclone Performance. All material inter-company transactions and balances have been eliminated in the condensed consolidated financial statements. The condensed consolidated balance sheet at December 31, 2013 and the condensed consolidated statements of operations and cash flows for the nine and three months ended September 30, 2014 include the accounts of the WHE subsidiary. Effective September 30, 2014, Cyclone sold most of its investment in the WHE Subsidiary and currently retains a non controlling 15.13% investment. This investment was deconsolidated on September 30, 2014 and is currently recorded on the cost basis (see Note 15). | ||||||||||||||||||
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles applicable to interim financial information and the requirements of Form 10-Q and Article 10 of Regulation S-X of the SEC. Accordingly, they do not include all of the information and disclosures required by accounting principles generally accepted in the United States for complete consolidated financial statements. Interim results are not necessarily indicative of results for a full year. In the opinion of management, all adjustments considered necessary for a fair presentation of the financial position and the results of operations and cash flows for the interim periods have been included. | ||||||||||||||||||
The accounting principles utilized by the Company require the Company to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, the reported amounts of revenues and expenses, cash flows and the related footnote disclosures during the periods. On an on-going basis, the Company reviews and evaluates its estimates and assumptions, including, but not limited to, those that relate to the realizable value of inventory, identifiable intangible assets and other long-lived assets, contracts, income taxes, derivative liabilities, and contingencies. Actual results could differ from these estimates. | ||||||||||||||||||
C. CASH | ||||||||||||||||||
Cash includes cash on hand and cash in banks. The Company maintains cash balances at several financial institutions. | ||||||||||||||||||
D. COMPUTATION OF INCOME (LOSS) PER SHARE | ||||||||||||||||||
Net income (loss) per share is computed by dividing the net income (loss) by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share is not presented as the conversion of the preferred stock and exercise of outstanding stock options and warrants would have an anti-dilutive effect. As of September 30, 2014 and 2013, total anti-dilutive shares amounted to approximately 14.9 million and 19.3 million shares, respectively. | ||||||||||||||||||
E. INCOME TAXES | ||||||||||||||||||
Income taxes are accounted for under the asset and liability method as stipulated by Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 740, “Income Taxes” (“ASC 740”). Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740, the effect on deferred tax assets and liabilities or a change in tax rate is recognized in income in the period that includes the enactment date. Deferred tax assets are reduced to estimated amounts to be realized by the use of a valuation allowance. A valuation allowance is applied when in management’s view it is more likely than not (50%) that such deferred tax will not be utilized. | ||||||||||||||||||
In the unlikely event that an uncertain tax position exists in which the Company could incur income taxes, the Company would evaluate whether there is a probability that the uncertain tax position taken would be sustained upon examination by the taxing authorities. Reserves for uncertain tax positions would be recorded if the Company determined it is probable that a position would not be sustained upon examination or if payment would have to be made to a taxing authority and the amount is reasonably estimated. As of September 30, 2014, the Company does not believe it has any uncertain tax positions that would result in the Company having a liability to the taxing authorities. Interest related to the unrecognized tax benefits is recognized in the consolidated financial statements as a component of income taxes. The Company’s tax returns are subject to examination by the federal and state tax authorities for the years ended 2011 through 2013. | ||||||||||||||||||
F. REVENUE RECOGNITION | ||||||||||||||||||
The Company’s revenue recognition policies are in compliance with ASC 605, “Revenue Recognition – Multiple Element Arrangements”, and Staff Accounting Bulletin (“SAB”) 104, Revenue Recognition. Revenue is recognized at the date of shipment of engines and systems, engine prototypes, engine designs or other deliverables to customers when a formal arrangement exists, the price is fixed or determinable, the delivery is completed, no other significant obligations of the Company exist and collectability is reasonably assured. Revenue from contracts for multiple deliverables and milestone method recognition are evaluated and allocated as appropriate. The Company has determined that the milestone method of revenue recognition (ASC 605-28) was appropriate for two of the Company’s contracts which specifically enumerate approved work effort milestones required for remuneration – the Company’s contract with the U.S. Army / TARDEC and the Amended and Restated Technology Application License Agreement with Phoenix Power Group LLC. Payments received before all of the relevant criteria for revenue recognition are satisfied are recorded as deferred revenue on the consolidated balance sheets. Final delivery of the U.S. Army contract was completed in the second quarter of 2014 and the Phoenix Power Group contract was transferred to the WHE subsidiary as part of the separation agreement (see Note 15). The Company does not allow its customers to return prototype products. Current contracts do not require the Company to provide any warranty assistance after the “deliverable” has been accepted. | ||||||||||||||||||
It is the Company’s intention when it has royalty revenue from its contracts to record royalty revenue periodically when earned, as reported in sales statements from customers. The Company does not have any royalty revenue to date. | ||||||||||||||||||
G. WARRANTY PROVISIONS | ||||||||||||||||||
Current contracts do not require warranty assistance subsequent to acceptance of the “deliverable R&D prototype” by the customer. For products that the Company will sell in the future, warranty costs are anticipated to be borne by the manufacturing vendor. | ||||||||||||||||||
H. INVENTORY | ||||||||||||||||||
Inventory is recorded at the lower of cost or market. Costs include material, labor and allocated overhead to manufacture a completed engine. These costs are periodically evaluated to determine if they have a net realizable value. If the net realizable value is lower than the carrying amount, a reserve is provided. | ||||||||||||||||||
I. FAIR VALUE OF FINANCIAL INSTRUMENTS | ||||||||||||||||||
ASC 820, “Fair Value Measurements and Disclosures” requires disclosures of information about the fair value of certain financial instruments for which it is practicable to estimate the value. The carrying amounts reported in the balance sheet for cash, accounts payable and accrued expenses, and loans payable approximate their fair market value based on the short-term maturity of these instruments. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk. Inputs may be observable or unobservable. Observable inputs are based on market data obtained from sources independent of the Company. Unobservable inputs reflect the Company’s own assumptions based on the best information available in the circumstances. The fair value hierarchy prioritizes the inputs used to measure fair value into three broad levels. The three levels of the fair value hierarchy are defined as follows: | ||||||||||||||||||
Level 1 | — | Inputs are quoted prices in active markets for identical assets or liabilities as of the reporting date. | ||||||||||||||||
Level 2 | — | Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, as of the reporting date. | ||||||||||||||||
Level 3 | — | Unobservable inputs for the asset or liability that reflect management’s own assumptions about the assumptions that market participants would use in pricing the asset or liability as of the reporting date. | ||||||||||||||||
The summary of fair values and changing values of financial instruments as of January 1, 2014 (beginning of period) and September 30, 2014 (end of period) is as follows: | ||||||||||||||||||
Instrument | Beginning | Change | End of | Level | Valuation | |||||||||||||
of Period | Period | Methodology | ||||||||||||||||
Derivative liabilities | $ | 484,796 | $ | (904 | ) | $ | 483,892 | 3 | Stochastic Process | |||||||||
Forecasting Model | ||||||||||||||||||
Please refer to Note 17 for disclosure and assumptions used to calculate the fair value of the derivative liabilities. | ||||||||||||||||||
J. RESEARCH AND DEVELOPMENT | ||||||||||||||||||
Research and development activities for product development are expensed as incurred. Costs for the nine months ended September 30, 2014 and 2013 were $713,237 and $573,600, respectively. | ||||||||||||||||||
K. STOCK BASED COMPENSATION | ||||||||||||||||||
The Company applies the fair value method of ASC 718, “Share Based Payment”, in accounting for its stock based compensation. This standard states that compensation cost is measured at the grant date based on the value of the award and is recognized over the service period, which is usually the vesting period. The Company values stock based compensation at the market price for the Company’s common stock as of the date in which the obligation for payment of services is incurred. | ||||||||||||||||||
L. COMMON STOCK OPTIONS AND PURCHASE WARRANTS | ||||||||||||||||||
The Company accounts for common stock options and purchase warrants at fair value in accordance with ASC 815-40, “Derivatives and Hedging”. The Black-Scholes option pricing valuation method (“BSM option pricing model”) is used to determine fair value of these warrants consistent with ASC 718, “Share Based Payment”. Use of this method requires that the Company make assumptions regarding stock volatility, dividend yields, expected term of the warrants and risk-free interest rates. | ||||||||||||||||||
The Company accounts for transactions in which services are received from non-employees in exchange for equity instruments based on the fair value of the equity instruments exchanged, in accordance with ASC 505-50, “Equity Based payments to Non-employees”. | ||||||||||||||||||
M. ORIGINAL ISSUE DEBT DISCOUNT | ||||||||||||||||||
The original issue discount (OID) related to notes payable is amortized by the effective interest method over the repayment period of the notes. The unamortized OID is represented as a reduction of the amount of the notes payable. | ||||||||||||||||||
N. PROPERTY AND EQUIPMENT | ||||||||||||||||||
Property and equipment are recorded at cost. Depreciation is computed on the straight-line method, based on the estimated useful lives of the assets as follows: | ||||||||||||||||||
Years | ||||||||||||||||||
Display equipment for trade shows | 3 | |||||||||||||||||
Leasehold improvements and furniture and fixtures | 15-Oct | |||||||||||||||||
Shop equipment | 7 | |||||||||||||||||
Computers | 3 | |||||||||||||||||
Expenditures for maintenance and repairs are charged to operations as incurred. | ||||||||||||||||||
O. IMPAIRMENT OF LONG LIVED ASSETS | ||||||||||||||||||
The Company continually evaluates the carrying value of intangible assets and other long lived assets to determine whether there are any impairment losses. If indicators of impairment are present and future cash flows are not expected to be sufficient to recover the assets’ carrying amount, an impairment loss would be charged to expense in the period identified. To date, the Company has not recognized any impairment charges. | ||||||||||||||||||
P. RECENT ACCOUNTING PRONOUNCEMENTS | ||||||||||||||||||
In 2014, the FASB issued an Accounting Standard Update (“ASU”) 2014-16 “Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share is More Akin to Debt or to Equity”, ASU 2014-15 “Presentation of Financial Statements-Going Concern (Subtopic 205-40) , ASU 2014-12 “Compensation-Stock Compensation” (Topic 718) , ASU 2014-09 “ Revenue from Contracts with Customers” (Topic 606), ASU 2014-03 Derivatives and Hedging (Topic 815) Accounting for Certain Receive-Variable, Pay Fixed Interest Rate Swaps-Simplified Hedge Account Approach, and ASU 2014-02 Intangibles-Goodwill and Other (Topic 350). Management believes that these standards will not materially impact our financial statements. | ||||||||||||||||||
Q. CONCENTRATION OF RISK | ||||||||||||||||||
The Company does not have any off-balance sheet concentrations of credit risk. The Company expects cash and accounts receivable to be the two assets most likely to subject the Company to concentrations of credit risk. The Company’s policy is to maintain its cash with high credit quality financial institutions to limit its risk of loss exposure. | ||||||||||||||||||
As of September 30, 2014, the Company maintained its cash in two quality financial institutions. The Company has not experienced any losses in its bank accounts through September 30, 2014. The Company purchases raw material and components from multiple sources, none of which may be considered a principal or material supplier. If necessary, the Company could replace these suppliers with minimal effect on its business operations. | ||||||||||||||||||
R. DERIVATIVE FINANCIAL INSTRUMENTS | ||||||||||||||||||
Accounting and reporting standards for derivative instruments and for hedging activities were codified by ASC Topic 815, Derivatives and Hedging (“ASC Topic 815”). It requires that all derivatives be recognized in the balance sheet and measured at fair value. Gains or losses resulting from changes in the fair value of derivatives are recognized in earnings or recorded in other comprehensive income (loss) depending on the purpose of the derivatives and whether they qualify and have been designated for hedge accounting treatment. The Company has derivative liabilities pursuant to convertible debt and common stock warrants, and has recognized net expenses on the condensed consolidated statements of operations. The Company does not have any derivative instruments for which it has applied hedge accounting treatment. |
Note_2_Going_Concern
Note 2 - Going Concern | 9 Months Ended |
Sep. 30, 2014 | |
Going Concern [Abstract] | |
Going Concern [Text Block] | NOTE 2 - GOING CONCERN |
As shown in the accompanying condensed consolidated financial statements, the Company incurred substantial operating and other losses and expenses of approximately $1.0 million for the nine months ended September 30, 2014, which included a $ 2.4 million gain on a sale of a subsidiary, and a net $3.8 million loss for the year ended December 31, 2013. The cumulative deficit since inception is approximately $ 53.3 million, which is comprised of $21.3 million attributable to actual operating losses (which were paid in cash, stock for services and other equity instruments) and net other expenses, and $32.0 million in non-cash derivative liability accounting which was a result of the conversion of the Company’s Series A Convertible Preferred Stock in 2011, the retirement of a common stock purchase warrant in 2012, and the change in fair value of derivatives associated with notes payable for the year ended December 31, 2013 and the nine months ended September 30, 2014. The Company has a working capital deficit at September 30, 2014 of approximately $1.9 million. There is no guarantee whether the Company will be able to generate enough revenue and/or raise capital to support its operations. This raises substantial doubt about the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on management’s plans which include implementation of its business model to generate revenue from development contracts, licenses and product sales, and continuing to raise funds through debt or equity raises. The Company will also likely continue to rely upon related-party debt or equity financing. | |
The condensed consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties. The Company is currently raising working capital to fund its operations via private placements of common stock and debt, advance contract payments (deferred revenue), and advances from and deferred payments to related parties. |
Note_3_Inventory_Net
Note 3 - Inventory, Net | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Inventory Disclosure [Abstract] | |||||||||
Inventory Disclosure [Text Block] | NOTE 3 – INVENTORY, NET | ||||||||
Inventory, net consists of: | |||||||||
September 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
Engine material and parts | $ | 311,210 | $ | 316,513 | |||||
Labor | 280,712 | 237,311 | |||||||
Applied overhead | 28,019 | 35,596 | |||||||
Total | 619,941 | 589,420 | |||||||
Inventory valuation reserve | (180,000 | ) | (100,000 | ) | |||||
Inventory, net | $ | 439,941 | $ | 489,420 | |||||
Note_4_Property_and_Equipment
Note 4 - Property and Equipment | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Property, Plant and Equipment [Abstract] | |||||||||
Property, Plant and Equipment Disclosure [Text Block] | NOTE 4 – PROPERTY AND EQUIPMENT, NET | ||||||||
Property and equipment consists of the following: | |||||||||
September 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
Display equipment for trade shows | $ | 9,648 | $ | 9,648 | |||||
Leasehold improvements and furniture and fixtures | 93,922 | 94,572 | |||||||
Equipment and computers | 427,478 | 398,342 | |||||||
Total | 531,048 | 502,562 | |||||||
Accumulated depreciation | (151,278 | ) | (125,799 | ) | |||||
Net property and equipment | $ | 379,770 | $ | 376,763 | |||||
Depreciation expense for the nine months ended September 30, 2014 and 2013 was $25,479 and $19,686, respectively. |
Note_5_Patents_Trademarks_and_
Note 5 - Patents, Trademarks and Copyrights | 9 Months Ended |
Sep. 30, 2014 | |
Disclosure Text Block [Abstract] | |
Intangible Assets Disclosure [Text Block] | NOTE 5 – PATENTS, TRADEMARKS AND COPYRIGHTS |
Patents, trademarks and copyrights consist of legal fees paid to file and perfect these claims. The net balances as of September 30, 2014 and December 31, 2013 were $364,848 and $374,768, respectively. For the nine months ended September 30, 2014 and for the year ended December 31, 2013, the Company capitalized $19,465 and $6,920, respectively, of expenditures related to these assets. As of September 30, 2014, the Company had 33 patents issued on its technology both in the U.S. and internationally, and six trademarks in the U.S. | |
Patents, trademarks and copyrights are amortized over the life of the intellectual property which is 15 years. Amortization expense for the nine months ended September 30, 2014 and 2013 was $29,385 and $29,087, respectively. |
Note_6_Notes_and_Other_Loans_P
Note 6 - Notes and Other Loans Payable | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Debt Disclosure [Abstract] | |||||||||
Debt Disclosure [Text Block] | NOTE 6 – NOTES AND OTHER LOANS PAYABLE | ||||||||
A. | NON-RELATED PARTIES | ||||||||
A summary of non-related party notes and other loans payable is as follows: | |||||||||
September 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
12% senior secured note payable, plus 6% redemption premium, collateralized by all assets of the Company, monthly payments commencing December 2013 through September 2014. | $ | - | $ | 361,767 | |||||
6-12% uncollateralized demand notes payable. | 45,000 | 127,500 | |||||||
12% convertible notes payable, net of discounts of $63,285 and $48,851 at September 30, 2014 and December 31, 2013, respectively, maturing at various dates from November 2013 through September 2016 (A) | 67,433 | 139,769 | |||||||
10% convertible note payable, net of discount of $0 and $115,585 at September 30, 2014 and December 31, 2013, respectively, monthly payments commencing in December 2013 through July 2014 (B) | 31,562 | 74,344 | |||||||
10% convertible notes payable, net of discount of $54,987 and $58,279 at September 30, 2014 and December 31, 2013, respectively, maturing at various dates from May 2015 through February 2016 (C) | 45,013 | 15,634 | |||||||
10% convertible notes payable, net of discount of $25,765 and $55,109 at September 30, 2014 and December 31, 2013, respectively, maturing at various dates from December 2015 through January 2016 (D) | 35,235 | 10,891 | |||||||
6% convertible notes payable, net of discount of $47,395 and $89,003 at September 30, 2014 and December 31, 2013, respectively, maturing at various dates from December 2016 through February 2017 ( E ) | 10,605 | 30,997 | |||||||
10% convertible note payable, net of discount of $103,311 at September 30, 2014, maturing at various dates from February 2015 through August 2015 ( F ) | 38,689 | - | |||||||
12% convertible notes payable, net of discount of $44,617 at September 30, 2014, maturing at various dates from April 2015 through May 2015 ( G ) | 40,383 | - | |||||||
Total non related party notes –net of discount | 313,920 | 760,902 | |||||||
Less-Current Portion | 155,634 | 729,905 | |||||||
Total non-current non related party notes –net of discount (accrued interest is included in accrued expenses) | $ | 158,286 | $ | 30,997 | |||||
(A) | Notes issued net of 10% original discount ($18,054 unamortized at September 30, 2014) along with additional discount from derivative liabilities ($45,231 unamortized at September 30, 2014). At September 30, 2014, the Company held 54,987,344 shares in reserve to cover the potential conversion of this note into common stock pursuant to debt covenants. | ||||||||
(B) | Note issued net of original discount of $26,250 (fully amortized at September 30, 2014) along with stock purchase warrants whose value at issuance of $34,680 has been carried as a discount against the note (fully amortized at September 30, 2014) and an additional discount from derivative liabilities of $89,370 (fully amortized at September 30, 2014). | ||||||||
(C) | Notes issued net of discount from derivative liabilities ($54,987 unamortized at September 30, 2014). At September 30, 2014, the Company held 11,261,887 shares in reserve to cover the potential conversion of this note into common stock pursuant to debt covenants. | ||||||||
(D) | Notes issued net of discount from derivative liabilities ($25,765 unamortized at September 30, 2014). At September 30, 2014, the Company held 12,106,895 shares in reserve to cover the potential conversion of this note into common stock pursuant to debt covenants. | ||||||||
(E) | Notes issued net of 10% original discount ($16,765 unamortized at September 30, 2014) along with additional discount from derivative liabilities ($30,630 unamortized at September 30, 2014). At September 30, 2014, the Company held 92,691,111 shares in reserve to cover the potential conversion of this note into common stock pursuant to debt covenants. | ||||||||
(F) | Notes issued net of discount from derivative liabilities ($103,311 unamortized at September 30, 2014). At September 30, 2014, the Company held 3,752,156 shares in reserve to cover the potential conversion of this note into common stock pursuant to debt covenants. | ||||||||
(G) | Notes issued net of discount from derivative liabilities ($44,617 unamortized at September 30, 2014). | ||||||||
B. | RELATED PARTIES | ||||||||
A summary of related party notes and other loans payable is as follows: | |||||||||
September 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
6% demand loans per Operations Agreement with Schoell Marine Inc., a company owned by Cyclone’s Chairman and controlling shareholder (A) | $ | 416,182 | $ | 424,285 | |||||
6% non-collateralized loans from officer and shareholder, payable on demand. The original principal balances were $157,101. | 79,721 | 85,364 | |||||||
12% non-collateralized loans from officer and shareholder, payable on demand | 13,558 | 11,000 | |||||||
Accrued Interest | 289,858 | 254,471 | |||||||
Total current related party notes, inclusive of accrued interest | $ | 799,319 | $ | 775,120 | |||||
(A) | This note arose from services and salaries incurred by Schoell Marine on behalf of the Company. Schoell Marine also owns the building that is leased to the Company. The Schoell Marine note bears an interest rate of 6% and repayments occur as cash flow of the Company permits. The note was secured by a UCC-1 filing on the Company’s patents and patent applications, which expired and has not been renewed. For the nine months ended September 30, 2014 and for the year ended December 31, 2013, $8,100 and $500 of principal was paid on the note balance. | ||||||||
During the last quarter of 2013, the Company’s Chairman and co-founder loaned approximately 37.4 million shares of Company common stock, valued at approximately $1.5 million, as reserve treasury shares pursuant to various debt covenants. These shares have been presented as value of shares loaned by stockholder in the accompanying consolidated balance sheets. These shares were returned to the Chairman in March 2014. |
Note_7_Related_Party_Transacti
Note 7 - Related Party Transactions | 9 Months Ended |
Sep. 30, 2014 | |
Related Party Transactions [Abstract] | |
Related Party Transactions Disclosure [Text Block] | NOTE 7 – RELATED PARTY TRANSACTIONS |
A. LEASE ON FACILITIES | |
The Company leases a 6,000 square foot warehouse and office facility located at 601 NE 26th Court in Pompano Beach, Florida. The lease, which is part of the Company’s Operations Agreement with Schoell Marine, provides for the Company to pay rent equal to the monthly mortgage payment on the building plus property taxes, utilities and sales tax due on rent. Occupancy costs for the nine months ended September 30, 2014 and 2013 were $47,223 in both periods. The Operations Agreement runs year-to-year, however, the lease portion of this agreement is month-to-month, but can only be cancelled on 180 day notice by Schoell Marine. | |
B. DEFERRED COMPENSATION | |
Included in accounts payable and accrued expenses - related parties as of September 30, 2014 and December 31, 2013 are $462,839 and $1,910,073, respectively, of accrued and deferred officers’ salaries compensation which may be paid as funds are available. These are non-interest bearing and due on demand. In January 2014, four of the Company’s executive management converted $668,312 in deferred salary into 20,313,416 shares of restricted common stock, and forgave $956,762 in deferred salary as contributed capital. This forgiveness of deferred salary was recorded as additional paid in capital in the accompanying condensed consolidated balance sheet at September 30, 2014. |
Note_8_Preferred_Stock
Note 8 - Preferred Stock | 9 Months Ended |
Sep. 30, 2014 | |
Disclosure Text Block Supplement [Abstract] | |
Preferred Stock [Text Block] | NOTE 8 – PREFERRED STOCK |
The Series B Preferred Stock is majority voting stock and is held by the two co-founders of the Company. Ownership of the Series B Preferred Stock shares assures the holders thereof a 51% voting control over the common stock of the Company. The 1,000 Series B Preferred Stock shares are convertible on a one-for-one basis with the common stock in the instance the Company is merged, sold or otherwise dissolved. |
Note_9_Stock_Transactions
Note 9 - Stock Transactions | 9 Months Ended | ||
Sep. 30, 2014 | |||
Stockholders' Equity Note [Abstract] | |||
Stockholders' Equity Note Disclosure [Text Block] | NOTE 9 – STOCK TRANSACTIONS | ||
During the nine months ended September 30, 2014, the Company: | |||
a- | Issued 2,050,000 shares of restricted common stock valued at $ 93,000 for payment of liabilities, 5,950,000 shares of restricted common stock valued at $98,175 for services, and 4,722,365 shares of common stock pursuant to a cashless warrants conversion. | ||
b- | Amortized (based on vesting) $9,755 of common stock options for employee services and issued 357,142 shares of restricted common stock valued at $10,714 in advance payment of debt interest. | ||
c- | Sold 5,500,000 shares of restricted common stock for $110,000 and issued 2,719,298 shares of restricted common stock pursuant to a price guarantee for common stock sold in the prior year. | ||
d- | Issued 409,028,377 shares of common stock valued at $1,080,554 as repayment of debt and related interest expense. | ||
e- | Issued 20,313,416 shares of restricted common stock to four of the Company’s executive management as a conversion of $668,312 in deferred salary and forgave $956,762 of deferred salary as contributed capital. | ||
f- | Issued 15,000,000 shares of restricted common stock valued at $49,500 in settlement and cancellation of a common stock warrant agreement. | ||
g- | Cancelled 3,000,000 shares of treasury stock, valued at $210,000 pursuant to the separation agreement of WHE GEN (see Note 15). | ||
Note_10_Stock_Options_and_Warr
Note 10 - Stock Options and Warrants | 9 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Stock Options And Warrants [Abstract] | |||||||||||||
Stock Options And Warrants [Text Block] | NOTE 10 – STOCK OPTIONS AND WARRANTS | ||||||||||||
A. COMMON STOCK OPTIONS | |||||||||||||
Per the employment contracts with certain officers, the company issued 900,000 common stock options, valued at $2,577 (pursuant to the Black Scholes valuation model) ) that are exercisable into shares of common stock at an average exercise price of $0.003 and with a maturity life of 10 years. For the nine months ended September 30, 2014, the amortization of stock options was $9,755 and the unamortized balance was $2,067. | |||||||||||||
To improve the common stock position of the Company and help limit dilution, effective with the second quarter of 2013, the four corporate officers unanimously agreed to waive their rights to 2.4 million common stock options (600,000 per quarter collectively) contractually due them through April 2014. In lieu of issuing additional options to these officers and all other employees through the end of the year, the Company re-priced 4,185,000 million vested options held by the officers and employees that were priced at a minimum of $0.15 per share ($0.20 average) to $0.10 per share. The result was a non-cash charge of approximately $52,000. The remaining contractual life of the options was not changed. | |||||||||||||
A summary of the common stock options for the period from December 31, 2013 through September 30, 2014 follows: | |||||||||||||
Number | Weighted Avg. | Weighted Avg. | |||||||||||
Outstanding | Exercise Price | Remaining | |||||||||||
Contractual Life | |||||||||||||
(Years) | |||||||||||||
Balance, December 31, 2013 | 9,740,000 | $ | 0.129 | 6.5 | |||||||||
Options issued | 900,000 | 0.003 | 9.9 | ||||||||||
Options exercised | - | - | - | ||||||||||
Options cancelled | - | - | - | ||||||||||
Balance, September 30, 2014 | 10,640,000 | $ | 0.128 | 6.1 | |||||||||
The vested and exercisable options at period end follows: | |||||||||||||
Exercisable/ | Weighted | Weighted | |||||||||||
Vested | Avg. | Avg. | |||||||||||
Options | Exercise Price | Remaining | |||||||||||
Outstanding | Contractual | ||||||||||||
Life (Years) | |||||||||||||
Balance September 30, 2014 | 9,740,000 | $ | 0.129 | 6.5 | |||||||||
Additional vesting by December 31, 2014 | - | - | - | ||||||||||
The fair value of new stock options, re-priced stock options, new purchase warrants and re-priced purchase warrants granted using the Black-Scholes option pricing model was calculated using the following assumptions: | |||||||||||||
Nine Months Ended | Year Ended | ||||||||||||
30-Sep-14 | 31-Dec-13 | ||||||||||||
Risk free interest rate | .67 % -1.32% | .51% - 1.41% | |||||||||||
Expected volatility | 63% - 83% | 34% -107% | |||||||||||
Expected term | 4-Feb | 5-Jan | |||||||||||
Expected dividend yield | 0% | 0% | |||||||||||
Average value per options and warrants | $ | .001 - $ .017 | $ | .01 - $.06 | |||||||||
Expected volatility is based on historical volatility of the Company’s common stock price. Short Term U.S. Treasury rates were utilized at the risk free interest rate. The expected term of the options and warrants was calculated using the alternative simplified method newly codified as ASC 718 “Accounting for Stock Based Compensation,” which defined the expected life as the average of the contractual term of the options and warrants and the weighted average vesting period for all issuances. | |||||||||||||
B. COMMON STOCK WARRANTS | |||||||||||||
During the nine months ended September 30, 2014, the Company: | |||||||||||||
a- | Re-priced 625,000 common stock warrants to $0.011 (valued at $10,821) pursuant to a price guarantee from the 2013 sale of common stock to unaffiliated third parties. | ||||||||||||
b- | Issued 2,838,048 common stock warrants and re-priced 565,625 common stock warrants, both to $0.011 (valued at $43,280) pursuant to a price guarantee from a 2013 debt agreement. No other terms of these common stock warrants were revised. | ||||||||||||
c- | Issued 4,722,365 aggregate shares of common stock in a cashless exercise of 9,037,230 warrants. | ||||||||||||
d- | Cancelled 2,261,251 common stock warrants with an average exercise price of $0.18 per share that expired. | ||||||||||||
e- | Cancelled 3,403,673 common stock warrants with an average exercise price of $0.011 per share for a payment of $49,500. This warrant, issued pursuant to a debt issuance had a significant downward reprising provision. | ||||||||||||
A summary of outstanding vested warrant activity for the period from December 31, 2013 to September 30, 2014 follows: | |||||||||||||
Number | Weighted Average | Weighted | |||||||||||
Outstanding | Exercise Price | Average | |||||||||||
Remaining | |||||||||||||
Contractual | |||||||||||||
Life (Years) | |||||||||||||
Common Stock Warrants | |||||||||||||
Balance, December 31, 2013 | 16,097,798 | $ | 0.057 | 2.85 | |||||||||
Warrants exercised-cashless | (9,037,230 | ) | (0.017 | ) | |||||||||
Warrants issued | 2,838,048 | 0.011 | 3.92 | ||||||||||
Warrants expired | (2,261,251 | ) | (.178 | ) | |||||||||
Warrants cancelled | (3,403,673 | ) | (.011 | ) | |||||||||
Warrants re-priced: | |||||||||||||
Cancelled – old | (1,190,625 | ) | (0.020 | ) | |||||||||
Re-Priced | 1,190,625 | 0.011 | |||||||||||
Balance, September 30, 2014 | 4,233,692 | $ | 0.08 | 1 | |||||||||
All warrants were vested and exercisable as of the date issued. |
Note_11_Income_Taxes
Note 11 - Income Taxes | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||
Income Tax Disclosure [Text Block] | NOTE 11 – INCOME TAXES | ||||||||||||||||
A reconciliation of the differences between the effective income tax rates and the statutory federal tax rates for the nine months ended September 30, 2014 and 2013 are as follows: | |||||||||||||||||
Nine months ended | Amount | Nine months ended | Amount | ||||||||||||||
September 30, | September 30, | ||||||||||||||||
2014 | 2013 | ||||||||||||||||
Tax benefit at U.S. statutory rate | 34 | % | $ | 129,717 | 34 | % | $ | 377,941 | |||||||||
State taxes, net of federal benefit | 4 | 15,261 | 4 | 44,464 | |||||||||||||
Change in valuation allowance | (38 | ) | (144,978 | ) | (38 | ) | (422,405 | ) | |||||||||
- | % | $ | - | - | % | $ | - | ||||||||||
The tax effect of temporary differences that give rise to significant portions of the deferred tax assets and liabilities at September 30, 2014 and December 31, 2013 consisted of the following: | |||||||||||||||||
Deferred Tax Assets | September 30, | December 31, | |||||||||||||||
2014 | 2013 | ||||||||||||||||
Net Operating Loss Carry-forward | $ | 7,938,465 | $ | 7,946,959 | |||||||||||||
Deferred Tax Liabilities – Accrued Officers’ Salaries | (286,663 | ) | (440,135 | ) | |||||||||||||
Net Deferred Tax Assets | 7,651,802 | 7,506,824 | |||||||||||||||
Valuation Allowance | (7,651,802 | ) | (7,506,824 | ) | |||||||||||||
Total Net Deferred Tax Assets | $ | - | $ | - | |||||||||||||
As of September 30, 2014, the Company had a net operating loss carry forward for income tax reporting purposes of approximately $17.1 million that may be offset against future taxable income through 2029. Current tax laws limit the amount of loss available to be offset against future taxable income when a substantial change in ownership occurs. Therefore, the amount available to offset future taxable income may be limited. No tax asset has been reported in the financial statements because the Company believes there is a 50% or greater chance the carry forwards will expire unused. Accordingly, the potential tax benefits of the loss carry forwards are offset by a valuation allowance of the same amount. |
Note_12_Lease_Obligations
Note 12 - Lease Obligations | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
Leases [Abstract] | |||||
Leases of Lessee Disclosure [Text Block] | NOTE 12 –LEASE OBLIGATIONS | ||||
A. CAPITALIZED LEASE OBLIGATIONS | |||||
In September 2012, the Company acquired $21,310 of equipment via capitalized lease obligations at an interest rate of 12.5%. In December 2013, the Company acquired $8,408 of equipment via capitalized lease obligations at an interest rate of 15.5%. Total lease payments made for the nine months ended September 30, 2014 were $4,779. The balance of capitalized lease obligations payable at September 30, 2014 and December 31, 2013 was $21,932 and $26,711, respectively. Future lease payments are: | |||||
2014 | $ | 1, 335 | |||
2015 | 5,801 | ||||
2016 | 6,620 | ||||
2017 | 6,079 | ||||
2018 | 2,097 | ||||
$ | 21,932 | ||||
B. LEASE ON ADDITIONAL FACILITIES | |||||
In July 2011, the Company signed a one-year lease (with extensions) for an additional 2,000 square feet. Effective July 2013, the Company renewed this lease for one year, at an annual rate of $ 17,304 or $8.65/s.f, terminating in September 2014, and was again extended to December 31, 2014. The lease expense for the nine months ended September 30, 2014 and 2013 was $13,314 and $ 14,761, respectively. | |||||
Commencing January 2014, the WHE Generation Corp. accrued $1,000 in monthly rent (inclusive of utilities, taxes and shared office assistance) to Precision CNC as part of the joint facility / manufacturing arrangement, and effective July 2014 rent increased to $2,500 per month. The rent expense for the nine months ended September 30. 2014 recorded by WHE-Gen was $ 13,957. |
Note_13_Commitments_and_Contin
Note 13 - Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | NOTE 13 – COMMITMENTS AND CONTINGENCIES |
The Company has employment agreements with Harry Schoell, Chairman and CTO (previously, CEO), at $150,000 per year and Frankie Fruge, President, at $120,000 per year; (collectively, the “Executives”). These agreements provide for a term of three (3) years from their Effective Date (July 2007 with automatically renewing successive one year periods starting on the end of the second anniversary of the Effective Date. If the Executive is terminated “without cause” or pursuant to a “change in control” of the Company, as both defined in the respective agreements, the Executive shall be entitled to (i) any unpaid Base Salary accrued through the effective date of termination, (ii) the Executive’s Base Salary at the rate prevailing at such termination through 12 months from the date of termination or the end of his Term then in effect, whichever is longer, and (iii) any performance bonus that would otherwise be payable to the Executive were he/she not terminated, during the 12 months following his or her termination. | |
Christopher Nelson, former President and General Counsel, resigned his positions effective July 17, 2014 as President and General Counsel of the Company and elected to forgo any salary and benefits subsequent to May 31 2014 from Cyclone Power Technologies Inc. Effective July 31, 2014, Mr. Nelson signed an employment agreement with WHE-Generation Corp. as the Chief Executive Officer. For the period through September 30, 2014, $70,165 was recorded as officer compensation by WHE-Generation Corp. |
Note_14_Consolidated_Subsidiar
Note 14 - Consolidated Subsidiary | 9 Months Ended |
Sep. 30, 2014 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investments and Joint Ventures Disclosure [Text Block] | NOTE 14 –CONSOLIDATED SUBSIDIARY |
In 2012, the Company established a 100% owned subsidiary (renamed) Cyclone Performance LLC. The purpose of Cyclone Performance is to build, test and run a vehicle utilizing the Company’s engine. In the last quarter of 2012, the Company sold a 5% equity investment to an unrelated investor for $30,000. Prior to December 31, 2012, this 5% equity investment was acquired by a corporate officer of the Company. Losses of the subsidiary are currently fully borne by the Company, as there is no guarantee of future profits or positive cash flow of the subsidiary. As of September 30, 2014, the cumulative unallocated losses to the non-controlling interests of this subsidiary of $953 are to be recovered by the parent from future subsidiary profits if they materialize. |
Note_15_Separation_of_Non_Cons
Note 15 -Separation of Non Consolidated Subsidiary | 9 Months Ended |
Sep. 30, 2014 | |
Separation Of Non Consolidated Subsidiary [Abstract] | |
Separation Of Non Consolidated Subsidiary [Text Block] | NOTE 15 – DECONSOLIDATION OF WHE SUBSIDIARY |
The Company sold most of its 73.72% investment in the WHE subsidiary to an unrelated buyer effective September 30, 2014 under separation and stock repurchase agreements dated July 17, 2014 and September 30, 2014, respectively. Under the agreements, the Company retained a non-controlling 15.13% investment, which has been deconsolidated due to the loss of control over the WHE subsidiary. The transaction was recorded in accordance with ASC 810-10-40, wherein the Company recognized a gain on the sale of its investment in the amount of $2,443,506, and its remaining investment in the WHE subsidiary was recorded at the fair value of the WHE common stock held by the Company, which was $556,756 as of September 30, 2014. | |
As part of the separation agreement Whe Gen paid to the company $350,000, and is to pay $150,000 for the remainder of the company’s investment sold. Whe Gen also paid to TCA Global Master Credit Fund LP, the Company’s senior secured creditor, approximately $78,000 to fully retire that debenture and release all of the Company’s assets from its security interest. Whe Gen also paid to the Company an additional $24,000 in reimbursements, and transferred back to Cyclone 3,000,000 shares of treasury stock in Cyclone (valued at $210,000). Whe Gen also assumed a $50,000 liability, deferred revenue of approximately $10,000 and accepted the responsibility to complete an engine delivery contract (previously recorded as $290,000 deferred revenue by the Company) . The Company forgave an intercompany receivable of approximately $85,000. Additionally, the Company satisfied a liability of $17,550 via transferring 65,000 shares of its Whe Gen shares. | |
To raise funds pursuant to the separation agreement, Whe Generation Corp. in the “Seed” Round of financing commencing in July 2014, issued $ 350,000 of 6% convertible debt, maturing in 12 months, which were subsequently converted into common stock at $.12 per share as of September 30, 2014. In the common stock “A” funding WHE Generation Corp. raised $1,314,360 of common stock sales at $.27 per share as of September 30, 2014. | |
In connection with the Agreement, the Company and Whe Gen also amended its 2010 License Agreement (the “License”) to provide the Company with an initial non refundable license fee of $175,000 and on-going 5% royalties from Whe Gens sale of engines utilizing the licensed technology. This License is 20 years with two 10-year extensions. It is worldwide in territory and exclusive for the specific applications of stationary waste heat recovery (WHR) and waste-to-power (WtP). | |
The total losses of the Whe Gen subsidiary for the nine months ended September 30, 2014, for the year ended December 31, 2013 and cumulatively since inception were $696,831 and $157,266, and $ 828,531 respectively. These losses were fully borne by the Company and are included in net (loss) income in the condensed consolidated statements of operations. |
Note_16_Receivables_Deferred_R
Note 16 - Receivables, Deferred Revenue and Backlog | 9 Months Ended |
Sep. 30, 2014 | |
Deferred Revenue Disclosure [Abstract] | |
Deferred Revenue Disclosure [Text Block] | NOTE 16 – RECEIVABLES, DEFERRED REVENUE AND BACKLOG |
As of September 30, 2014, total backlog for prototype engines to be delivered in the following three months was $400,000 from the Combilift agreement, of which $100,000 has been paid and has been recorded as deferred revenue. |
Note_17_Derivative_Financial_I
Note 17 - Derivative Financial Instruments | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Disclosure Text Block [Abstract] | |||||||||
Derivatives and Fair Value [Text Block] | NOTE 17 – DERIVATIVE FINANCIAL INSTRUMENTS | ||||||||
Pursuant to additional financing, in the nine months ended September 30, 2014 and in the year ended December 31, 2013 the Company entered into convertible note agreements in the aggregate face amount of $942,052 and $743,250, respectively. The conversion prices into common stock ranged from a discount of 30% to 45% of the lowest closing prices in the 10 to 20 trading days prior to the conversion. Under provisions of ASC Topic 815-40, this conversion feature triggered derivative accounting treatment because the convertible note was convertible into an indeterminable number of shares of common stock. The fair value of the embedded conversion option was required to be presented as a derivative liability and adjusted to fair value at each reporting date, with changes in fair value reported in the condensed consolidated statements of operation. | |||||||||
The Company recorded derivative liabilities of $800,225 and $456,681 with a discount offset against the underlying loan, during the nine months ended September 30, 2014 and for the year ended December 31, 2013, respectively. | |||||||||
In the nine months ended September 30, 2014, the Company recorded a $816,308 non-cash charge to interest expense (reflective of debt discount amortization), an increase of $954,641 in additional paid in capital pursuant to conversion of convertible notes to common stock, and $148,289 of derivative loss related to adjusting the derivative liability to fair value. At September 30, 2014, the derivative related fair value of debt was $483,892. | |||||||||
The Company calculates the estimated fair values of the liabilities for derivative instruments at each quarter-end using the BSM option pricing model and Stochastic Process Forecasting models (Monte Carlo simulations). Volatility, expected term and risk free interest rates used to estimate the fair value of derivative liabilities are indicated in the table below. The volatility was based on historical volatility, the expected term is equal to the remaining term of the debt and the risk free rate is based upon rates for treasury securities with the same term. | |||||||||
Nine Months Ended | Year Ended | ||||||||
30-Sep-14 | Dec. 31, 2013 | ||||||||
Volatility | 114% - 234% | 87% - 171% | |||||||
Risk Free Rate | .03% - .99% | .1% - 1.75% | |||||||
Expected Term (years) | 0 - 4 | 0 - 3 | |||||||
Dividend Rate | 0% | 0% | |||||||
Note_18_Subsequent_Events
Note 18- Subsequent Events | 9 Months Ended | ||
Sep. 30, 2014 | |||
Subsequent Events [Abstract] | |||
Subsequent Events [Text Block] | NOTE 18 – SUBSEQUENT EVENTS | ||
In the fourth quarter of 2014, the Company engaged in the following transactions: | |||
a- | The Company issued approximately 80 million shares of common stock in conversion of approximately $55,000 in convertible debt and interest. | ||
b- | In October 2014 , the Company borrowed 10 million shares of Company common stock from the Chairman and used the shares for settlement of a liability. The company is obligated to repay these shares as authorized common stock is available. | ||
c- | The Company increased the authorized number of common shares to 2,000,000,000 shares. This has been retroactively reflected on these financial statements. Some of these shares will be used to increase the reserve allocation of common stock to the required 300% coverage pursuant to convertible debt agreements. | ||
d- | The Company has placed purchase orders for the pre production manufacturing of 10 Mark 1 engines to test application and integration with customers’ systems. | ||
Accounting_Policies_by_Policy_
Accounting Policies, by Policy (Policies) | 9 Months Ended | |||||||||||||||||
Sep. 30, 2014 | ||||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||||
Consolidation, Policy [Policy Text Block] | B. PRINCIPLES OF CONSOLIDATION AND BASIS OF PRESENTATION | |||||||||||||||||
The unaudited consolidated financial statements include the accounts of the Company and its 95% owned subsidiary Cyclone Performance. All material inter-company transactions and balances have been eliminated in the condensed consolidated financial statements. The condensed consolidated balance sheet at December 31, 2013 and the condensed consolidated statements of operations and cash flows for the nine and three months ended September 30, 2014 include the accounts of the WHE subsidiary. Effective September 30, 2014, Cyclone sold most of its investment in the WHE Subsidiary and currently retains a non controlling 15.13% investment. This investment was deconsolidated on September 30, 2014 and is currently recorded on the cost basis (see Note 15). | ||||||||||||||||||
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles applicable to interim financial information and the requirements of Form 10-Q and Article 10 of Regulation S-X of the SEC. Accordingly, they do not include all of the information and disclosures required by accounting principles generally accepted in the United States for complete consolidated financial statements. Interim results are not necessarily indicative of results for a full year. In the opinion of management, all adjustments considered necessary for a fair presentation of the financial position and the results of operations and cash flows for the interim periods have been included. | ||||||||||||||||||
The accounting principles utilized by the Company require the Company to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, the reported amounts of revenues and expenses, cash flows and the related footnote disclosures during the periods. On an on-going basis, the Company reviews and evaluates its estimates and assumptions, including, but not limited to, those that relate to the realizable value of inventory, identifiable intangible assets and other long-lived assets, contracts, income taxes, derivative liabilities, and contingencies. Actual results could differ from these estimates. | ||||||||||||||||||
Cash and Cash Equivalents, Policy [Policy Text Block] | C. CASH | |||||||||||||||||
Cash includes cash on hand and cash in banks. The Company maintains cash balances at several financial institutions. | ||||||||||||||||||
Earnings Per Share, Policy [Policy Text Block] | D. COMPUTATION OF INCOME (LOSS) PER SHARE | |||||||||||||||||
Net income (loss) per share is computed by dividing the net income (loss) by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share is not presented as the conversion of the preferred stock and exercise of outstanding stock options and warrants would have an anti-dilutive effect. As of September 30, 2014 and 2013, total anti-dilutive shares amounted to approximately 14.9 million and 19.3 million shares, respectively. | ||||||||||||||||||
Income Tax, Policy [Policy Text Block] | E. INCOME TAXES | |||||||||||||||||
Income taxes are accounted for under the asset and liability method as stipulated by Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 740, “Income Taxes” (“ASC 740”). Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740, the effect on deferred tax assets and liabilities or a change in tax rate is recognized in income in the period that includes the enactment date. Deferred tax assets are reduced to estimated amounts to be realized by the use of a valuation allowance. A valuation allowance is applied when in management’s view it is more likely than not (50%) that such deferred tax will not be utilized. | ||||||||||||||||||
In the unlikely event that an uncertain tax position exists in which the Company could incur income taxes, the Company would evaluate whether there is a probability that the uncertain tax position taken would be sustained upon examination by the taxing authorities. Reserves for uncertain tax positions would be recorded if the Company determined it is probable that a position would not be sustained upon examination or if payment would have to be made to a taxing authority and the amount is reasonably estimated. As of September 30, 2014, the Company does not believe it has any uncertain tax positions that would result in the Company having a liability to the taxing authorities. Interest related to the unrecognized tax benefits is recognized in the consolidated financial statements as a component of income taxes. The Company’s tax returns are subject to examination by the federal and state tax authorities for the years ended 2011 through 2013. | ||||||||||||||||||
Revenue Recognition, Policy [Policy Text Block] | F. REVENUE RECOGNITION | |||||||||||||||||
The Company’s revenue recognition policies are in compliance with ASC 605, “Revenue Recognition – Multiple Element Arrangements”, and Staff Accounting Bulletin (“SAB”) 104, Revenue Recognition. Revenue is recognized at the date of shipment of engines and systems, engine prototypes, engine designs or other deliverables to customers when a formal arrangement exists, the price is fixed or determinable, the delivery is completed, no other significant obligations of the Company exist and collectability is reasonably assured. Revenue from contracts for multiple deliverables and milestone method recognition are evaluated and allocated as appropriate. The Company has determined that the milestone method of revenue recognition (ASC 605-28) was appropriate for two of the Company’s contracts which specifically enumerate approved work effort milestones required for remuneration – the Company’s contract with the U.S. Army / TARDEC and the Amended and Restated Technology Application License Agreement with Phoenix Power Group LLC. Payments received before all of the relevant criteria for revenue recognition are satisfied are recorded as deferred revenue on the consolidated balance sheets. Final delivery of the U.S. Army contract was completed in the second quarter of 2014 and the Phoenix Power Group contract was transferred to the WHE subsidiary as part of the separation agreement (see Note 15). The Company does not allow its customers to return prototype products. Current contracts do not require the Company to provide any warranty assistance after the “deliverable” has been accepted. | ||||||||||||||||||
It is the Company’s intention when it has royalty revenue from its contracts to record royalty revenue periodically when earned, as reported in sales statements from customers. The Company does not have any royalty revenue to date. | ||||||||||||||||||
Standard Product Warranty, Policy [Policy Text Block] | G. WARRANTY PROVISIONS | |||||||||||||||||
Current contracts do not require warranty assistance subsequent to acceptance of the “deliverable R&D prototype” by the customer. For products that the Company will sell in the future, warranty costs are anticipated to be borne by the manufacturing vendor. | ||||||||||||||||||
Inventory, Policy [Policy Text Block] | H. INVENTORY | |||||||||||||||||
Inventory is recorded at the lower of cost or market. Costs include material, labor and allocated overhead to manufacture a completed engine. These costs are periodically evaluated to determine if they have a net realizable value. If the net realizable value is lower than the carrying amount, a reserve is provided. | ||||||||||||||||||
Fair Value of Financial Instruments, Policy [Policy Text Block] | I. FAIR VALUE OF FINANCIAL INSTRUMENTS | |||||||||||||||||
ASC 820, “Fair Value Measurements and Disclosures” requires disclosures of information about the fair value of certain financial instruments for which it is practicable to estimate the value. The carrying amounts reported in the balance sheet for cash, accounts payable and accrued expenses, and loans payable approximate their fair market value based on the short-term maturity of these instruments. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk. Inputs may be observable or unobservable. Observable inputs are based on market data obtained from sources independent of the Company. Unobservable inputs reflect the Company’s own assumptions based on the best information available in the circumstances. The fair value hierarchy prioritizes the inputs used to measure fair value into three broad levels. The three levels of the fair value hierarchy are defined as follows: | ||||||||||||||||||
Level 1 | — | Inputs are quoted prices in active markets for identical assets or liabilities as of the reporting date. | ||||||||||||||||
Level 2 | — | Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, as of the reporting date. | ||||||||||||||||
Level 3 | — | Unobservable inputs for the asset or liability that reflect management’s own assumptions about the assumptions that market participants would use in pricing the asset or liability as of the reporting date. | ||||||||||||||||
The summary of fair values and changing values of financial instruments as of January 1, 2014 (beginning of period) and September 30, 2014 (end of period) is as follows: | ||||||||||||||||||
Instrument | Beginning | Change | End of | Level | Valuation | |||||||||||||
of Period | Period | Methodology | ||||||||||||||||
Derivative liabilities | $ | 484,796 | $ | (904 | ) | $ | 483,892 | 3 | Stochastic Process | |||||||||
Forecasting Model | ||||||||||||||||||
Please refer to Note 17 for disclosure and assumptions used to calculate the fair value of the derivative liabilities. | ||||||||||||||||||
Research and Development Expense, Policy [Policy Text Block] | J. RESEARCH AND DEVELOPMENT | |||||||||||||||||
Research and development activities for product development are expensed as incurred. Costs for the nine months ended September 30, 2014 and 2013 were $713,237 and $573,600, respectively. | ||||||||||||||||||
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | K. STOCK BASED COMPENSATION | |||||||||||||||||
The Company applies the fair value method of ASC 718, “Share Based Payment”, in accounting for its stock based compensation. This standard states that compensation cost is measured at the grant date based on the value of the award and is recognized over the service period, which is usually the vesting period. The Company values stock based compensation at the market price for the Company’s common stock as of the date in which the obligation for payment of services is incurred. | ||||||||||||||||||
Stockholders' Equity, Policy [Policy Text Block] | L. COMMON STOCK OPTIONS AND PURCHASE WARRANTS | |||||||||||||||||
The Company accounts for common stock options and purchase warrants at fair value in accordance with ASC 815-40, “Derivatives and Hedging”. The Black-Scholes option pricing valuation method (“BSM option pricing model”) is used to determine fair value of these warrants consistent with ASC 718, “Share Based Payment”. Use of this method requires that the Company make assumptions regarding stock volatility, dividend yields, expected term of the warrants and risk-free interest rates. | ||||||||||||||||||
The Company accounts for transactions in which services are received from non-employees in exchange for equity instruments based on the fair value of the equity instruments exchanged, in accordance with ASC 505-50, “Equity Based payments to Non-employees”. | ||||||||||||||||||
Debt, Policy [Policy Text Block] | M. ORIGINAL ISSUE DEBT DISCOUNT | |||||||||||||||||
The original issue discount (OID) related to notes payable is amortized by the effective interest method over the repayment period of the notes. The unamortized OID is represented as a reduction of the amount of the notes payable. | ||||||||||||||||||
Property, Plant and Equipment, Policy [Policy Text Block] | N. PROPERTY AND EQUIPMENT | |||||||||||||||||
Property and equipment are recorded at cost. Depreciation is computed on the straight-line method, based on the estimated useful lives of the assets as follows: | ||||||||||||||||||
Years | ||||||||||||||||||
Display equipment for trade shows | 3 | |||||||||||||||||
Leasehold improvements and furniture and fixtures | 15-Oct | |||||||||||||||||
Shop equipment | 7 | |||||||||||||||||
Computers | 3 | |||||||||||||||||
Expenditures for maintenance and repairs are charged to operations as incurred. | ||||||||||||||||||
Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block] | O. IMPAIRMENT OF LONG LIVED ASSETS | |||||||||||||||||
The Company continually evaluates the carrying value of intangible assets and other long lived assets to determine whether there are any impairment losses. If indicators of impairment are present and future cash flows are not expected to be sufficient to recover the assets’ carrying amount, an impairment loss would be charged to expense in the period identified. To date, the Company has not recognized any impairment charges. | ||||||||||||||||||
New Accounting Pronouncements, Policy [Policy Text Block] | P. RECENT ACCOUNTING PRONOUNCEMENTS | |||||||||||||||||
In 2014, the FASB issued an Accounting Standard Update (“ASU”) 2014-16 “Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share is More Akin to Debt or to Equity”, ASU 2014-15 “Presentation of Financial Statements-Going Concern (Subtopic 205-40) , ASU 2014-12 “Compensation-Stock Compensation” (Topic 718) , ASU 2014-09 “ Revenue from Contracts with Customers” (Topic 606), ASU 2014-03 Derivatives and Hedging (Topic 815) Accounting for Certain Receive-Variable, Pay Fixed Interest Rate Swaps-Simplified Hedge Account Approach, and ASU 2014-02 Intangibles-Goodwill and Other (Topic 350). Management believes that these standards will not materially impact our financial statements. | ||||||||||||||||||
Concentration Risk, Credit Risk, Policy [Policy Text Block] | Q. CONCENTRATION OF RISK | |||||||||||||||||
The Company does not have any off-balance sheet concentrations of credit risk. The Company expects cash and accounts receivable to be the two assets most likely to subject the Company to concentrations of credit risk. The Company’s policy is to maintain its cash with high credit quality financial institutions to limit its risk of loss exposure. | ||||||||||||||||||
As of September 30, 2014, the Company maintained its cash in two quality financial institutions. The Company has not experienced any losses in its bank accounts through September 30, 2014. The Company purchases raw material and components from multiple sources, none of which may be considered a principal or material supplier. If necessary, the Company could replace these suppliers with minimal effect on its business operations. | ||||||||||||||||||
Derivatives, Policy [Policy Text Block] | R. DERIVATIVE FINANCIAL INSTRUMENTS | |||||||||||||||||
Accounting and reporting standards for derivative instruments and for hedging activities were codified by ASC Topic 815, Derivatives and Hedging (“ASC Topic 815”). It requires that all derivatives be recognized in the balance sheet and measured at fair value. Gains or losses resulting from changes in the fair value of derivatives are recognized in earnings or recorded in other comprehensive income (loss) depending on the purpose of the derivatives and whether they qualify and have been designated for hedge accounting treatment. The Company has derivative liabilities pursuant to convertible debt and common stock warrants, and has recognized net expenses on the condensed consolidated statements of operations. The Company does not have any derivative instruments for which it has applied hedge accounting treatment. |
Note_1_Organizational_and_Sign1
Note 1 - Organizational and Significant Accounting Policies (Tables) | 9 Months Ended | |||||||||||||||||
Sep. 30, 2014 | ||||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block] | Instrument | Beginning | Change | End of | Level | Valuation | ||||||||||||
of Period | Period | Methodology | ||||||||||||||||
Derivative liabilities | $ | 484,796 | $ | (904 | ) | $ | 483,892 | 3 | Stochastic Process | |||||||||
Forecasting Model | ||||||||||||||||||
Estimated Useful Lives of Property and Equipment [Table Text Block] | Years | |||||||||||||||||
Display equipment for trade shows | 3 | |||||||||||||||||
Leasehold improvements and furniture and fixtures | 15-Oct | |||||||||||||||||
Shop equipment | 7 | |||||||||||||||||
Computers | 3 |
Note_3_Inventory_Net_Tables
Note 3 - Inventory, Net (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Inventory Disclosure [Abstract] | |||||||||
Schedule of Inventory, Current [Table Text Block] | September 30, | December 31, | |||||||
2014 | 2013 | ||||||||
Engine material and parts | $ | 311,210 | $ | 316,513 | |||||
Labor | 280,712 | 237,311 | |||||||
Applied overhead | 28,019 | 35,596 | |||||||
Total | 619,941 | 589,420 | |||||||
Inventory valuation reserve | (180,000 | ) | (100,000 | ) | |||||
Inventory, net | $ | 439,941 | $ | 489,420 |
Note_4_Property_and_Equipment_
Note 4 - Property and Equipment (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Property, Plant and Equipment [Abstract] | |||||||||
Property, Plant and Equipment [Table Text Block] | September 30, | December 31, | |||||||
2014 | 2013 | ||||||||
Display equipment for trade shows | $ | 9,648 | $ | 9,648 | |||||
Leasehold improvements and furniture and fixtures | 93,922 | 94,572 | |||||||
Equipment and computers | 427,478 | 398,342 | |||||||
Total | 531,048 | 502,562 | |||||||
Accumulated depreciation | (151,278 | ) | (125,799 | ) | |||||
Net property and equipment | $ | 379,770 | $ | 376,763 |
Note_6_Notes_and_Other_Loans_P1
Note 6 - Notes and Other Loans Payable (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Debt Disclosure [Abstract] | |||||||||
Schedule of Debt [Table Text Block] | September 30, | December 31, | |||||||
2014 | 2013 | ||||||||
12% senior secured note payable, plus 6% redemption premium, collateralized by all assets of the Company, monthly payments commencing December 2013 through September 2014. | $ | - | $ | 361,767 | |||||
6-12% uncollateralized demand notes payable. | 45,000 | 127,500 | |||||||
12% convertible notes payable, net of discounts of $63,285 and $48,851 at September 30, 2014 and December 31, 2013, respectively, maturing at various dates from November 2013 through September 2016 (A) | 67,433 | 139,769 | |||||||
10% convertible note payable, net of discount of $0 and $115,585 at September 30, 2014 and December 31, 2013, respectively, monthly payments commencing in December 2013 through July 2014 (B) | 31,562 | 74,344 | |||||||
10% convertible notes payable, net of discount of $54,987 and $58,279 at September 30, 2014 and December 31, 2013, respectively, maturing at various dates from May 2015 through February 2016 (C) | 45,013 | 15,634 | |||||||
10% convertible notes payable, net of discount of $25,765 and $55,109 at September 30, 2014 and December 31, 2013, respectively, maturing at various dates from December 2015 through January 2016 (D) | 35,235 | 10,891 | |||||||
6% convertible notes payable, net of discount of $47,395 and $89,003 at September 30, 2014 and December 31, 2013, respectively, maturing at various dates from December 2016 through February 2017 ( E ) | 10,605 | 30,997 | |||||||
10% convertible note payable, net of discount of $103,311 at September 30, 2014, maturing at various dates from February 2015 through August 2015 ( F ) | 38,689 | - | |||||||
12% convertible notes payable, net of discount of $44,617 at September 30, 2014, maturing at various dates from April 2015 through May 2015 ( G ) | 40,383 | - | |||||||
Total non related party notes –net of discount | 313,920 | 760,902 | |||||||
Less-Current Portion | 155,634 | 729,905 | |||||||
Total non-current non related party notes –net of discount (accrued interest is included in accrued expenses) | $ | 158,286 | $ | 30,997 | |||||
Related Party Notes and Other Loans Payable [Table Text Block] | September 30, | December 31, | |||||||
2014 | 2013 | ||||||||
6% demand loans per Operations Agreement with Schoell Marine Inc., a company owned by Cyclone’s Chairman and controlling shareholder (A) | $ | 416,182 | $ | 424,285 | |||||
6% non-collateralized loans from officer and shareholder, payable on demand. The original principal balances were $157,101. | 79,721 | 85,364 | |||||||
12% non-collateralized loans from officer and shareholder, payable on demand | 13,558 | 11,000 | |||||||
Accrued Interest | 289,858 | 254,471 | |||||||
Total current related party notes, inclusive of accrued interest | $ | 799,319 | $ | 775,120 |
Note_10_Stock_Options_and_Warr1
Note 10 - Stock Options and Warrants (Tables) | 9 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Stock Options And Warrants [Abstract] | |||||||||||||
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block] | Number | Weighted Avg. | Weighted Avg. | ||||||||||
Outstanding | Exercise Price | Remaining | |||||||||||
Contractual Life | |||||||||||||
(Years) | |||||||||||||
Balance, December 31, 2013 | 9,740,000 | $ | 0.129 | 6.5 | |||||||||
Options issued | 900,000 | 0.003 | 9.9 | ||||||||||
Options exercised | - | - | - | ||||||||||
Options cancelled | - | - | - | ||||||||||
Balance, September 30, 2014 | 10,640,000 | $ | 0.128 | 6.1 | |||||||||
Vested and Exercisable Options [Table Text Block] | Exercisable/ | Weighted | Weighted | ||||||||||
Vested | Avg. | Avg. | |||||||||||
Options | Exercise Price | Remaining | |||||||||||
Outstanding | Contractual | ||||||||||||
Life (Years) | |||||||||||||
Balance September 30, 2014 | 9,740,000 | $ | 0.129 | 6.5 | |||||||||
Additional vesting by December 31, 2014 | - | - | - | ||||||||||
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | Nine Months Ended | Year Ended | |||||||||||
30-Sep-14 | 31-Dec-13 | ||||||||||||
Risk free interest rate | .67 % -1.32% | .51% - 1.41% | |||||||||||
Expected volatility | 63% - 83% | 34% -107% | |||||||||||
Expected term | 4-Feb | 5-Jan | |||||||||||
Expected dividend yield | 0% | 0% | |||||||||||
Average value per options and warrants | $ | .001 - $ .017 | $ | .01 - $.06 | |||||||||
Schedule of Stockholders' Equity Note, Warrants or Rights [Table Text Block] | Number | Weighted Average | Weighted | ||||||||||
Outstanding | Exercise Price | Average | |||||||||||
Remaining | |||||||||||||
Contractual | |||||||||||||
Life (Years) | |||||||||||||
Common Stock Warrants | |||||||||||||
Balance, December 31, 2013 | 16,097,798 | $ | 0.057 | 2.85 | |||||||||
Warrants exercised-cashless | (9,037,230 | ) | (0.017 | ) | |||||||||
Warrants issued | 2,838,048 | 0.011 | 3.92 | ||||||||||
Warrants expired | (2,261,251 | ) | (.178 | ) | |||||||||
Warrants cancelled | (3,403,673 | ) | (.011 | ) | |||||||||
Warrants re-priced: | |||||||||||||
Cancelled – old | (1,190,625 | ) | (0.020 | ) | |||||||||
Re-Priced | 1,190,625 | 0.011 | |||||||||||
Balance, September 30, 2014 | 4,233,692 | $ | 0.08 | 1 |
Note_11_Income_Taxes_Tables
Note 11 - Income Taxes (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] | Nine months ended | Amount | Nine months ended | Amount | |||||||||||||
September 30, | September 30, | ||||||||||||||||
2014 | 2013 | ||||||||||||||||
Tax benefit at U.S. statutory rate | 34 | % | $ | 129,717 | 34 | % | $ | 377,941 | |||||||||
State taxes, net of federal benefit | 4 | 15,261 | 4 | 44,464 | |||||||||||||
Change in valuation allowance | (38 | ) | (144,978 | ) | (38 | ) | (422,405 | ) | |||||||||
- | % | $ | - | - | % | $ | - | ||||||||||
Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | Deferred Tax Assets | September 30, | December 31, | ||||||||||||||
2014 | 2013 | ||||||||||||||||
Net Operating Loss Carry-forward | $ | 7,938,465 | $ | 7,946,959 | |||||||||||||
Deferred Tax Liabilities – Accrued Officers’ Salaries | (286,663 | ) | (440,135 | ) | |||||||||||||
Net Deferred Tax Assets | 7,651,802 | 7,506,824 | |||||||||||||||
Valuation Allowance | (7,651,802 | ) | (7,506,824 | ) | |||||||||||||
Total Net Deferred Tax Assets | $ | - | $ | - |
Note_12_Lease_Obligations_Tabl
Note 12 - Lease Obligations (Tables) | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
Leases [Abstract] | |||||
Schedule of Future Minimum Lease Payments for Capital Leases [Table Text Block] | 2014 | $ | 1, 335 | ||
2015 | 5,801 | ||||
2016 | 6,620 | ||||
2017 | 6,079 | ||||
2018 | 2,097 | ||||
$ | 21,932 |
Note_17_Derivative_Financial_I1
Note 17 - Derivative Financial Instruments (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Disclosure Text Block [Abstract] | |||||||||
Schedule of Derivative Liabilities at Fair Value [Table Text Block] | Nine Months Ended | Year Ended | |||||||
30-Sep-14 | Dec. 31, 2013 | ||||||||
Volatility | 114% - 234% | 87% - 171% | |||||||
Risk Free Rate | .03% - .99% | .1% - 1.75% | |||||||
Expected Term (years) | 0 - 4 | 0 - 3 | |||||||
Dividend Rate | 0% | 0% |
Note_1_Organizational_and_Sign2
Note 1 - Organizational and Significant Accounting Policies (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Share data in Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Note 1 - Organizational and Significant Accounting Policies (Details) [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in Shares) | 14.9 | 19.3 | ||
Royalty Revenue | $0 | |||
Research and Development Expense | 396,420 | 202,829 | 713,237 | 573,600 |
Impairment of Long-Lived Assets Held-for-use | $0 | |||
Earliest Tax Year [Member] | ||||
Note 1 - Organizational and Significant Accounting Policies (Details) [Line Items] | ||||
Open Tax Year | 2011 | |||
Latest Tax Year [Member] | ||||
Note 1 - Organizational and Significant Accounting Policies (Details) [Line Items] | ||||
Open Tax Year | 2013 | |||
WHE Subsidiary [Member] | ||||
Note 1 - Organizational and Significant Accounting Policies (Details) [Line Items] | ||||
Cost Method Investments, Ownership Percentage | 15.13% | 15.13% | ||
Cyclone Performance [Member] | ||||
Note 1 - Organizational and Significant Accounting Policies (Details) [Line Items] | ||||
Equity Method Investment, Ownership Percentage | 95.00% | 95.00% |
Note_1_Organizational_and_Sign3
Note 1 - Organizational and Significant Accounting Policies (Details) - Summary of Fair Values and Changing Values of Financial Instruments (USD $) | 9 Months Ended | |
Sep. 30, 2014 | Dec. 31, 2013 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Derivative liabilities | $484,796 | |
Derivative liabilities | 483,892 | 484,796 |
Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Derivative liabilities | 484,796 | |
Derivative liabilities | -904 | |
Derivative liabilities | $483,892 |
Note_1_Organizational_and_Sign4
Note 1 - Organizational and Significant Accounting Policies (Details) - Estimated Useful Lives of Property and Equipment | 9 Months Ended |
Sep. 30, 2014 | |
Display Equipment for Trade Shows [Member] | |
Years | |
Estimated useful lives | 3 years |
Leasehold Improvements and Furniture and Fixtures [Member] | Minimum [Member] | |
Years | |
Estimated useful lives | 10 years |
Leasehold Improvements and Furniture and Fixtures [Member] | Maximum [Member] | |
Years | |
Estimated useful lives | 15 years |
Shop Equipment [Member] | |
Years | |
Estimated useful lives | 7 years |
Computer Equipment [Member] | |
Years | |
Estimated useful lives | 3 years |
Note_2_Going_Concern_Details
Note 2 - Going Concern (Details) (USD $) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2014 | Dec. 31, 2013 | |
Note 2 - Going Concern (Details) [Line Items] | ||
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Extraordinary Items, Noncontrolling Interest | ($1,000,000) | ($3,800,000) |
Gain (Loss) on Disposition of Stock in Subsidiary or Equity Method Investee | 2,400,000 | |
Retained Earnings (Accumulated Deficit) | -53,250,487 | -52,474,270 |
Working Capital Deficit | 1,900,000 | |
Attributable to Operating Losses [Member] | ||
Note 2 - Going Concern (Details) [Line Items] | ||
Retained Earnings (Accumulated Deficit) | -21,252,591 | -21,440,971 |
Attributable to Non-Cash Derivative Liability Accounting [Member] | ||
Note 2 - Going Concern (Details) [Line Items] | ||
Retained Earnings (Accumulated Deficit) | ($31,997,896) | ($31,033,299) |
Note_3_Inventory_Net_Details_I
Note 3 - Inventory, Net (Details) - Inventory Components (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Inventory [Line Items] | ||
Inventory | $619,941 | $589,420 |
Inventory valuation reserve | -180,000 | -100,000 |
Inventory, net | 439,941 | 489,420 |
Engine Material and Parts [Member] | ||
Inventory [Line Items] | ||
Inventory | 311,210 | 316,513 |
Labor [Member] | ||
Inventory [Line Items] | ||
Inventory | 280,712 | 237,311 |
Applied Overhead [Member] | ||
Inventory [Line Items] | ||
Inventory | $28,019 | $35,596 |
Note_4_Property_and_Equipment_1
Note 4 - Property and Equipment (Details) (USD $) | 9 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation | $25,479 | $19,686 |
Note_4_Property_and_Equipment_2
Note 4 - Property and Equipment (Details) - Property and Equipment (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Property, Plant and Equipment [Line Items] | ||
Property and Equipment | $531,048 | $502,562 |
Accumulated depreciation | -151,278 | -125,799 |
Net property and equipment | 379,770 | 376,763 |
Display Equipment for Trade Shows [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment | 9,648 | 9,648 |
Leasehold Improvements and Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment | 93,922 | 94,572 |
Equipment and Computers [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment | $427,478 | $398,342 |
Note_5_Patents_Trademarks_and_1
Note 5 - Patents, Trademarks and Copyrights (Details) (USD $) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | |
Disclosure Text Block [Abstract] | |||
Finite-Lived Intangible Assets, Net | $364,848 | $374,768 | |
Patents, Trademarks and Copyrights Capitalized | 19,465 | 6,920 | |
Number of Patents | 33 | ||
Number of Trademarks | 6 | ||
Finite-Lived Intangible Asset, Useful Life | 15 years | ||
Amortization of Intangible Assets | $29,385 | $29,087 |
Note_6_Notes_and_Other_Loans_P2
Note 6 - Notes and Other Loans Payable (Details) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | ||||
Note 6 - Notes and Other Loans Payable (Details) [Line Items] | ||||||
Warrants Issued During Period, Value | $34,680 | |||||
Related Party Transaction, Loan by Chairman of Company Common Stock (in Shares) | 37,400,000 | |||||
Related Party Transaction, Loan by Chairman of Company Common Stock Value | 1,500,000 | |||||
Original Issue Discount [Member] | 12% Convertible Notes Payable [Member] | ||||||
Note 6 - Notes and Other Loans Payable (Details) [Line Items] | ||||||
Debt Instrument, Unamortized Discount | 18,054 | |||||
Original Issue Discount [Member] | 10% Convertible Note Payable [Member] | ||||||
Note 6 - Notes and Other Loans Payable (Details) [Line Items] | ||||||
Debt Instrument, Unamortized Discount | 26,250 | |||||
Original Issue Discount [Member] | 10% Convertible Notes Payable Maturing from November 2015 through February 2016 [Member] | ||||||
Note 6 - Notes and Other Loans Payable (Details) [Line Items] | ||||||
Debt Instrument, Unamortized Discount | 54,987 | |||||
Original Issue Discount [Member] | 10 % Convertible Notes Payable Maturing From December 2015 Through January 2016 [Member] | ||||||
Note 6 - Notes and Other Loans Payable (Details) [Line Items] | ||||||
Debt Instrument, Unamortized Discount | 25,765 | |||||
Original Issue Discount [Member] | 6% Convertible Notes Payable [Member] | ||||||
Note 6 - Notes and Other Loans Payable (Details) [Line Items] | ||||||
Debt Instrument, Unamortized Discount | 16,765 | |||||
Original Issue Discount [Member] | 10% Convertible Note Payable Maturing Through September 2015 [Member] | ||||||
Note 6 - Notes and Other Loans Payable (Details) [Line Items] | ||||||
Debt Instrument, Unamortized Discount | 103,311 | |||||
Original Issue Discount [Member] | 12% Convertible Notes Payable Maturing From July 2014 Through November 2014 [Member] | ||||||
Note 6 - Notes and Other Loans Payable (Details) [Line Items] | ||||||
Debt Instrument, Unamortized Discount | 44,617 | |||||
Additional Discount from Derivative Liabilities [Member] | 12% Convertible Notes Payable [Member] | ||||||
Note 6 - Notes and Other Loans Payable (Details) [Line Items] | ||||||
Debt Instrument, Unamortized Discount | 45,231 | |||||
12% Convertible Notes Payable [Member] | ||||||
Note 6 - Notes and Other Loans Payable (Details) [Line Items] | ||||||
Notes Payable Original Discount, Percent | 10.00% | |||||
Debt Instrument, Unamortized Discount | 48,851 | [1] | 63,285 | [1] | 48,851 | [1] |
Common Stock, Capital Shares Reserved for Future Issuance (in Shares) | 54,987,344 | |||||
Debt Instrument, Interest Rate, Stated Percentage | 12.00% | [1] | 12.00% | [1] | 12.00% | [1] |
10% Convertible Note Payable [Member] | Additional Discount from Derivative Liabilities [Member] | ||||||
Note 6 - Notes and Other Loans Payable (Details) [Line Items] | ||||||
Debt Instrument, Unamortized Discount | 89,370 | |||||
10% Convertible Note Payable [Member] | ||||||
Note 6 - Notes and Other Loans Payable (Details) [Line Items] | ||||||
Debt Instrument, Unamortized Discount | 115,585 | [2] | 0 | [2] | 115,585 | [2] |
Debt Instrument, Interest Rate, Stated Percentage | 10.00% | [2] | 10.00% | [2] | 10.00% | [2] |
10% Convertible Notes Payable Maturing from November 2015 through February 2016 [Member] | Aug 2014 [Member] | ||||||
Note 6 - Notes and Other Loans Payable (Details) [Line Items] | ||||||
Common Stock, Capital Shares Reserved for Future Issuance (in Shares) | 11,261,887 | |||||
10% Convertible Notes Payable Maturing from November 2015 through February 2016 [Member] | ||||||
Note 6 - Notes and Other Loans Payable (Details) [Line Items] | ||||||
Debt Instrument, Unamortized Discount | 58,279 | [3] | 54,987 | [3] | 58,279 | [3] |
Debt Instrument, Interest Rate, Stated Percentage | 10.00% | [3] | 10.00% | [3] | 10.00% | [3] |
10 % Convertible Notes Payable Maturing From December 2015 Through January 2016 [Member] | Dec 2014 [Member] | ||||||
Note 6 - Notes and Other Loans Payable (Details) [Line Items] | ||||||
Common Stock, Capital Shares Reserved for Future Issuance (in Shares) | 12,106,895 | |||||
10 % Convertible Notes Payable Maturing From December 2015 Through January 2016 [Member] | ||||||
Note 6 - Notes and Other Loans Payable (Details) [Line Items] | ||||||
Debt Instrument, Unamortized Discount | 55,109 | [4] | 25,765 | [4] | 55,109 | [4] |
Debt Instrument, Interest Rate, Stated Percentage | 10.00% | [4] | 10.00% | [4] | 10.00% | [4] |
6% Convertible Notes Payable [Member] | Additional Discount from Derivative Liabilities [Member] | ||||||
Note 6 - Notes and Other Loans Payable (Details) [Line Items] | ||||||
Debt Instrument, Unamortized Discount | 30,630 | |||||
6% Convertible Notes Payable [Member] | ||||||
Note 6 - Notes and Other Loans Payable (Details) [Line Items] | ||||||
Notes Payable Original Discount, Percent | 10.00% | |||||
Debt Instrument, Unamortized Discount | 89,003 | [5] | 47,395 | [5] | 89,003 | [5] |
Common Stock, Capital Shares Reserved for Future Issuance (in Shares) | 92,691,111 | |||||
Debt Instrument, Interest Rate, Stated Percentage | 6.00% | [5] | 6.00% | [5] | 6.00% | [5] |
10% Convertible Note Payable Maturing Through September 2015 [Member] | ||||||
Note 6 - Notes and Other Loans Payable (Details) [Line Items] | ||||||
Debt Instrument, Unamortized Discount | 103,311 | [6] | ||||
Common Stock, Capital Shares Reserved for Future Issuance (in Shares) | 3,752,156 | |||||
Debt Instrument, Interest Rate, Stated Percentage | 10.00% | [6] | ||||
12% Convertible Notes Payable Maturing From July 2014 Through November 2014 [Member] | ||||||
Note 6 - Notes and Other Loans Payable (Details) [Line Items] | ||||||
Debt Instrument, Unamortized Discount | 44,617 | [7] | ||||
Debt Instrument, Interest Rate, Stated Percentage | 12.00% | [7] | ||||
6% Demand Loans per Operations Agreement with Schoell Marine Inc. [Member] | ||||||
Note 6 - Notes and Other Loans Payable (Details) [Line Items] | ||||||
Debt Instrument, Interest Rate, Stated Percentage | 6.00% | [8] | 6.00% | [8] | 6.00% | [8] |
Repayments of Notes Payable | $8,100 | $500 | ||||
[1] | Notes issued net of 10% original discount ($18,054 unamortized at September 30, 2014) along with additional discount from derivative liabilities ($45,231 unamortized at September 30, 2014). At September 30, 2014, the Company held 54,987,344 shares in reserve to cover the potential conversion of this note into common stock pursuant to debt covenants. | |||||
[2] | Note issued net of original discount of $26,250 (fully amortized at September 30, 2014) along with stock purchase warrants whose value at issuance of $34,680 has been carried as a discount against the note (fully amortized at September 30, 2014) and an additional discount from derivative liabilities of $89,370 (fully amortized at September 30, 2014). | |||||
[3] | Notes issued net of discount from derivative liabilities ($54,987 unamortized at September 30, 2014). At September 30, 2014, the Company held 11,261,887 shares in reserve to cover the potential conversion of this note into common stock pursuant to debt covenants. | |||||
[4] | Notes issued net of discount from derivative liabilities ($25,765 unamortized at September 30, 2014). At September 30, 2014, the Company held 12,106,895 shares in reserve to cover the potential conversion of this note into common stock pursuant to debt covenants. | |||||
[5] | Notes issued net of 10% original discount ($16,765 unamortized at September 30, 2014) along with additional discount from derivative liabilities ($30,630 unamortized at September 30, 2014). At September 30, 2014, the Company held 92,691,111 shares in reserve to cover the potential conversion of this note into common stock pursuant to debt covenants. | |||||
[6] | Notes issued net of discount from derivative liabilities ($103,311 unamortized at September 30, 2014). At September 30, 2014, the Company held 3,752,156 shares in reserve to cover the potential conversion of this note into common stock pursuant to debt covenants. | |||||
[7] | Notes issued net of discount from derivative liabilities ($44,617 unamortized at September 30, 2014). | |||||
[8] | This note arose from services and salaries incurred by Schoell Marine on behalf of the Company. Schoell Marine also owns the building that is leased to the Company. The Schoell Marine note bears an interest rate of 6% and repayments occur as cash flow of the Company permits. The note was secured by a UCC-1 filing on the Company's patents and patent applications, which expired and has not been renewed. For the nine months ended September 30, 2014 and for the year ended December 31, 2013, $8,100 and $500 of principal was paid on the note balance. |
Note_6_Notes_and_Other_Loans_P3
Note 6 - Notes and Other Loans Payable (Details) - Non-Related Party Notes and Other Loans Payable (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | ||
Note 6 - Notes and Other Loans Payable (Details) - Non-Related Party Notes and Other Loans Payable [Line Items] | ||||
Current non-related party notes | $155,634 | $729,905 | ||
Total non-current non related party notes bnet of discount (accrued interest is included in accrued expenses) | 158,286 | 30,997 | ||
Total non related party notes bnet of discount | 313,920 | 760,902 | ||
12% Senior Secured Note Payable [Member] | ||||
Note 6 - Notes and Other Loans Payable (Details) - Non-Related Party Notes and Other Loans Payable [Line Items] | ||||
Current non-related party notes | 361,767 | |||
6 - 12% Uncollateralized Demand Notes Payable [Member] | ||||
Note 6 - Notes and Other Loans Payable (Details) - Non-Related Party Notes and Other Loans Payable [Line Items] | ||||
Current non-related party notes | 45,000 | 127,500 | ||
12% Convertible Notes Payable [Member] | ||||
Note 6 - Notes and Other Loans Payable (Details) - Non-Related Party Notes and Other Loans Payable [Line Items] | ||||
Current non-related party notes | 67,433 | [1] | 139,769 | [1] |
10% Convertible Note Payable [Member] | ||||
Note 6 - Notes and Other Loans Payable (Details) - Non-Related Party Notes and Other Loans Payable [Line Items] | ||||
Current non-related party notes | 31,562 | [2] | 74,344 | [2] |
10% Convertible Notes Payable Maturing from November 2015 through February 2016 [Member] | ||||
Note 6 - Notes and Other Loans Payable (Details) - Non-Related Party Notes and Other Loans Payable [Line Items] | ||||
Current non-related party notes | 45,013 | [3] | 15,634 | [3] |
10 % Convertible Notes Payable Maturing From December 2015 Through January 2016 [Member] | ||||
Note 6 - Notes and Other Loans Payable (Details) - Non-Related Party Notes and Other Loans Payable [Line Items] | ||||
Current non-related party notes | 35,235 | [4] | 10,891 | [4] |
6% Convertible Notes Payable [Member] | ||||
Note 6 - Notes and Other Loans Payable (Details) - Non-Related Party Notes and Other Loans Payable [Line Items] | ||||
Current non-related party notes | 10,605 | [5] | 30,997 | [5] |
10% Convertible Note Payable Maturing Through September 2015 [Member] | ||||
Note 6 - Notes and Other Loans Payable (Details) - Non-Related Party Notes and Other Loans Payable [Line Items] | ||||
Current non-related party notes | 38,689 | [6] | [6] | |
12% Convertible Notes Payable Maturing From July 2014 Through November 2014 [Member] | ||||
Note 6 - Notes and Other Loans Payable (Details) - Non-Related Party Notes and Other Loans Payable [Line Items] | ||||
Current non-related party notes | $40,383 | [7] | [7] | |
[1] | Notes issued net of 10% original discount ($18,054 unamortized at September 30, 2014) along with additional discount from derivative liabilities ($45,231 unamortized at September 30, 2014). At September 30, 2014, the Company held 54,987,344 shares in reserve to cover the potential conversion of this note into common stock pursuant to debt covenants. | |||
[2] | Note issued net of original discount of $26,250 (fully amortized at September 30, 2014) along with stock purchase warrants whose value at issuance of $34,680 has been carried as a discount against the note (fully amortized at September 30, 2014) and an additional discount from derivative liabilities of $89,370 (fully amortized at September 30, 2014). | |||
[3] | Notes issued net of discount from derivative liabilities ($54,987 unamortized at September 30, 2014). At September 30, 2014, the Company held 11,261,887 shares in reserve to cover the potential conversion of this note into common stock pursuant to debt covenants. | |||
[4] | Notes issued net of discount from derivative liabilities ($25,765 unamortized at September 30, 2014). At September 30, 2014, the Company held 12,106,895 shares in reserve to cover the potential conversion of this note into common stock pursuant to debt covenants. | |||
[5] | Notes issued net of 10% original discount ($16,765 unamortized at September 30, 2014) along with additional discount from derivative liabilities ($30,630 unamortized at September 30, 2014). At September 30, 2014, the Company held 92,691,111 shares in reserve to cover the potential conversion of this note into common stock pursuant to debt covenants. | |||
[6] | Notes issued net of discount from derivative liabilities ($103,311 unamortized at September 30, 2014). At September 30, 2014, the Company held 3,752,156 shares in reserve to cover the potential conversion of this note into common stock pursuant to debt covenants. | |||
[7] | Notes issued net of discount from derivative liabilities ($44,617 unamortized at September 30, 2014). |
Note_6_Notes_and_Other_Loans_P4
Note 6 - Notes and Other Loans Payable (Details) - Non-Related Party Notes and Other Loans Payable (Parentheticals) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | ||
12% Senior Secured Note Payable [Member] | ||||
Note 6 - Notes and Other Loans Payable (Details) - Non-Related Party Notes and Other Loans Payable (Parentheticals) [Line Items] | ||||
Interest rate | 12.00% | 12.00% | ||
Redemption premium, percent | 6.00% | 6.00% | ||
6 - 12% Uncollateralized Demand Notes Payable [Member] | Minimum [Member] | ||||
Note 6 - Notes and Other Loans Payable (Details) - Non-Related Party Notes and Other Loans Payable (Parentheticals) [Line Items] | ||||
Interest rate | 6.00% | 6.00% | ||
6 - 12% Uncollateralized Demand Notes Payable [Member] | Maximum [Member] | ||||
Note 6 - Notes and Other Loans Payable (Details) - Non-Related Party Notes and Other Loans Payable (Parentheticals) [Line Items] | ||||
Interest rate | 12.00% | 12.00% | ||
12% Convertible Notes Payable [Member] | ||||
Note 6 - Notes and Other Loans Payable (Details) - Non-Related Party Notes and Other Loans Payable (Parentheticals) [Line Items] | ||||
Interest rate | 12.00% | [1] | 12.00% | [1] |
Original issue discount (in Dollars) | 63,285 | [1] | 48,851 | [1] |
10% Convertible Note Payable [Member] | ||||
Note 6 - Notes and Other Loans Payable (Details) - Non-Related Party Notes and Other Loans Payable (Parentheticals) [Line Items] | ||||
Interest rate | 10.00% | [2] | 10.00% | [2] |
Original issue discount (in Dollars) | 0 | [2] | 115,585 | [2] |
10% Convertible Notes Payable Maturing from November 2015 through February 2016 [Member] | ||||
Note 6 - Notes and Other Loans Payable (Details) - Non-Related Party Notes and Other Loans Payable (Parentheticals) [Line Items] | ||||
Interest rate | 10.00% | [3] | 10.00% | [3] |
Original issue discount (in Dollars) | 54,987 | [3] | 58,279 | [3] |
10 % Convertible Notes Payable Maturing From December 2015 Through January 2016 [Member] | ||||
Note 6 - Notes and Other Loans Payable (Details) - Non-Related Party Notes and Other Loans Payable (Parentheticals) [Line Items] | ||||
Interest rate | 10.00% | [4] | 10.00% | [4] |
Original issue discount (in Dollars) | 25,765 | [4] | 55,109 | [4] |
6% Convertible Notes Payable [Member] | ||||
Note 6 - Notes and Other Loans Payable (Details) - Non-Related Party Notes and Other Loans Payable (Parentheticals) [Line Items] | ||||
Interest rate | 6.00% | [5] | 6.00% | [5] |
Original issue discount (in Dollars) | 47,395 | [5] | 89,003 | [5] |
10% Convertible Note Payable Maturing Through September 2015 [Member] | ||||
Note 6 - Notes and Other Loans Payable (Details) - Non-Related Party Notes and Other Loans Payable (Parentheticals) [Line Items] | ||||
Interest rate | 10.00% | [6] | ||
Original issue discount (in Dollars) | 103,311 | [6] | ||
12% Convertible Notes Payable Maturing From July 2014 Through November 2014 [Member] | ||||
Note 6 - Notes and Other Loans Payable (Details) - Non-Related Party Notes and Other Loans Payable (Parentheticals) [Line Items] | ||||
Interest rate | 12.00% | [7] | ||
Original issue discount (in Dollars) | 44,617 | [7] | ||
[1] | Notes issued net of 10% original discount ($18,054 unamortized at September 30, 2014) along with additional discount from derivative liabilities ($45,231 unamortized at September 30, 2014). At September 30, 2014, the Company held 54,987,344 shares in reserve to cover the potential conversion of this note into common stock pursuant to debt covenants. | |||
[2] | Note issued net of original discount of $26,250 (fully amortized at September 30, 2014) along with stock purchase warrants whose value at issuance of $34,680 has been carried as a discount against the note (fully amortized at September 30, 2014) and an additional discount from derivative liabilities of $89,370 (fully amortized at September 30, 2014). | |||
[3] | Notes issued net of discount from derivative liabilities ($54,987 unamortized at September 30, 2014). At September 30, 2014, the Company held 11,261,887 shares in reserve to cover the potential conversion of this note into common stock pursuant to debt covenants. | |||
[4] | Notes issued net of discount from derivative liabilities ($25,765 unamortized at September 30, 2014). At September 30, 2014, the Company held 12,106,895 shares in reserve to cover the potential conversion of this note into common stock pursuant to debt covenants. | |||
[5] | Notes issued net of 10% original discount ($16,765 unamortized at September 30, 2014) along with additional discount from derivative liabilities ($30,630 unamortized at September 30, 2014). At September 30, 2014, the Company held 92,691,111 shares in reserve to cover the potential conversion of this note into common stock pursuant to debt covenants. | |||
[6] | Notes issued net of discount from derivative liabilities ($103,311 unamortized at September 30, 2014). At September 30, 2014, the Company held 3,752,156 shares in reserve to cover the potential conversion of this note into common stock pursuant to debt covenants. | |||
[7] | Notes issued net of discount from derivative liabilities ($44,617 unamortized at September 30, 2014). |
Note_6_Notes_and_Other_Loans_P5
Note 6 - Notes and Other Loans Payable (Details) - Related Party Notes and Other Loans Payable (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | ||
Note 6 - Notes and Other Loans Payable (Details) - Related Party Notes and Other Loans Payable [Line Items] | ||||
Current due to related parties | $799,319 | $775,120 | ||
6% Demand Loans per Operations Agreement with Schoell Marine Inc. [Member] | ||||
Note 6 - Notes and Other Loans Payable (Details) - Related Party Notes and Other Loans Payable [Line Items] | ||||
Current due to related parties | 416,182 | [1] | 424,285 | [1] |
6% Demand Non-Collateralized Loan from Officer and Shareholder [Member] | ||||
Note 6 - Notes and Other Loans Payable (Details) - Related Party Notes and Other Loans Payable [Line Items] | ||||
Current due to related parties | 79,721 | 85,364 | ||
12% Non-Collateralized Loan from Officer and Shareholder [Member] | ||||
Note 6 - Notes and Other Loans Payable (Details) - Related Party Notes and Other Loans Payable [Line Items] | ||||
Current due to related parties | 13,558 | 11,000 | ||
Accrued Interest [Member] | ||||
Note 6 - Notes and Other Loans Payable (Details) - Related Party Notes and Other Loans Payable [Line Items] | ||||
Current due to related parties | $289,858 | $254,471 | ||
[1] | This note arose from services and salaries incurred by Schoell Marine on behalf of the Company. Schoell Marine also owns the building that is leased to the Company. The Schoell Marine note bears an interest rate of 6% and repayments occur as cash flow of the Company permits. The note was secured by a UCC-1 filing on the Company's patents and patent applications, which expired and has not been renewed. For the nine months ended September 30, 2014 and for the year ended December 31, 2013, $8,100 and $500 of principal was paid on the note balance. |
Note_6_Notes_and_Other_Loans_P6
Note 6 - Notes and Other Loans Payable (Details) - Related Party Notes and Other Loans Payable (Parentheticals) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | ||
6% Demand Loans per Operations Agreement with Schoell Marine Inc. [Member] | ||||
Note 6 - Notes and Other Loans Payable (Details) - Related Party Notes and Other Loans Payable (Parentheticals) [Line Items] | ||||
IntP5rP5st ratP5, rP5latP5d party loan | 6.00% | [1] | 6.00% | [1] |
6% Demand Non-Collateralized Loan from Officer and Shareholder [Member] | ||||
Note 6 - Notes and Other Loans Payable (Details) - Related Party Notes and Other Loans Payable (Parentheticals) [Line Items] | ||||
IntP5rP5st ratP5, rP5latP5d party loan | 6.00% | 6.00% | ||
Original loan amount, rP5latP5d party loan (in Dollars) | 157,101 | 157,101 | ||
12% Non-Collateralized Loan from Officer and Shareholder [Member] | ||||
Note 6 - Notes and Other Loans Payable (Details) - Related Party Notes and Other Loans Payable (Parentheticals) [Line Items] | ||||
IntP5rP5st ratP5, rP5latP5d party loan | 12.00% | 12.00% | ||
[1] | This note arose from services and salaries incurred by Schoell Marine on behalf of the Company. Schoell Marine also owns the building that is leased to the Company. The Schoell Marine note bears an interest rate of 6% and repayments occur as cash flow of the Company permits. The note was secured by a UCC-1 filing on the Company's patents and patent applications, which expired and has not been renewed. For the nine months ended September 30, 2014 and for the year ended December 31, 2013, $8,100 and $500 of principal was paid on the note balance. |
Note_7_Related_Party_Transacti1
Note 7 - Related Party Transactions (Details) (USD $) | 9 Months Ended | 1 Months Ended | |||
Sep. 30, 2014 | Sep. 30, 2013 | Jan. 31, 2014 | Jul. 31, 2011 | Dec. 31, 2013 | |
sqft | sqft | ||||
Note 7 - Related Party Transactions (Details) [Line Items] | |||||
Area of Real Estate Property (in Square Feet) | 6,000 | 2,000 | |||
Occupancy, Net | $47,223 | $47,223 | |||
Increase (Decrease) in Due to Related Parties | 183,539 | 260,136 | |||
Stock Issued During Period, Shares, Restricted Stock Award, Gross (in Shares) | 5,500,000 | ||||
Deferred Compensation, Amount Written-off | 956,762 | ||||
Executive Managment [Member] | Deferred Salary [Member] | |||||
Note 7 - Related Party Transactions (Details) [Line Items] | |||||
Increase (Decrease) in Due to Related Parties | -668,312 | ||||
Stock Issued During Period, Shares, Restricted Stock Award, Gross (in Shares) | 20,313,416 | ||||
Executive Managment [Member] | |||||
Note 7 - Related Party Transactions (Details) [Line Items] | |||||
Stock Issued During Period, Shares, Restricted Stock Award, Gross (in Shares) | 20,313,416 | ||||
Additional Paid-in Capital [Member] | |||||
Note 7 - Related Party Transactions (Details) [Line Items] | |||||
Deferred Compensation, Amount Written-off | 956,762 | ||||
Deferred Salary [Member] | Accounts Payable and Accrued Liabilities [Member] | |||||
Note 7 - Related Party Transactions (Details) [Line Items] | |||||
Due to Related Parties | 462,839 | 1,910,073 | |||
Deferred Salary [Member] | |||||
Note 7 - Related Party Transactions (Details) [Line Items] | |||||
Increase (Decrease) in Due to Related Parties | ($668,312) |
Note_8_Preferred_Stock_Details
Note 8 - Preferred Stock (Details) | Sep. 30, 2014 | Dec. 31, 2013 |
Note 8 - Preferred Stock (Details) [Line Items] | ||
Voting Control Percentage | 51.00% | |
Series B Preferred Stock [Member] | ||
Note 8 - Preferred Stock (Details) [Line Items] | ||
Preferred Stock, Shares Outstanding | 1,000 | 1,000 |
Note_9_Stock_Transactions_Deta
Note 9 - Stock Transactions (Details) (USD $) | 9 Months Ended | 1 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | Jan. 31, 2014 | |
Note 9 - Stock Transactions (Details) [Line Items] | |||
Stock Issued During Period, Shares, Restricted Stock Award, Gross | 5,500,000 | ||
Stock Issued During Period, Value, Restricted Stock Award, Gross | $110,000 | ||
Increase (Decrease) in Due to Related Parties | 183,539 | 260,136 | |
Deferred Compensation, Amount Written-off | 956,762 | ||
Treasury Stock, Shares, Retired | 3,000,000 | ||
Treasury Stock, Retired, Cost Method, Amount | 210,000 | ||
Executive Managment [Member] | Deferred Salary [Member] | |||
Note 9 - Stock Transactions (Details) [Line Items] | |||
Stock Issued During Period, Shares, Restricted Stock Award, Gross | 20,313,416 | ||
Increase (Decrease) in Due to Related Parties | -668,312 | ||
Executive Managment [Member] | |||
Note 9 - Stock Transactions (Details) [Line Items] | |||
Stock Issued During Period, Shares, Restricted Stock Award, Gross | 20,313,416 | ||
Deferred Salary [Member] | |||
Note 9 - Stock Transactions (Details) [Line Items] | |||
Increase (Decrease) in Due to Related Parties | -668,312 | ||
Repayment of Debt [Member] | |||
Note 9 - Stock Transactions (Details) [Line Items] | |||
Deferred Compensation, Amount Written-off | 956,762 | ||
Employee Stock Option [Member] | |||
Note 9 - Stock Transactions (Details) [Line Items] | |||
Allocated Share-based Compensation Expense | 9,755 | ||
Payment of Liabilities [Member] | |||
Note 9 - Stock Transactions (Details) [Line Items] | |||
Stock Issued During Period, Shares, Restricted Stock Award, Gross | 2,050,000 | ||
Stock Issued During Period, Value, Restricted Stock Award, Gross | 93,000 | ||
Issuance for Services [Member] | |||
Note 9 - Stock Transactions (Details) [Line Items] | |||
Stock Issued During Period, Shares, Restricted Stock Award, Gross | 5,950,000 | ||
Stock Issued During Period, Value, Restricted Stock Award, Gross | 98,175 | ||
Issuance for Cashless Warrant Exercise [Member] | |||
Note 9 - Stock Transactions (Details) [Line Items] | |||
Stock Issued During Period, Shares, New Issues | 4,722,365 | ||
Issuance for Debt Interest [Member] | |||
Note 9 - Stock Transactions (Details) [Line Items] | |||
Stock Issued During Period, Shares, Restricted Stock Award, Gross | 357,142 | ||
Stock Issued During Period, Value, Restricted Stock Award, Gross | 10,714 | ||
Stock Issued During Period, Shares, New Issues | 99,898,721 | ||
Prior Year Common Stock Sale Price Guarantees [Member] | |||
Note 9 - Stock Transactions (Details) [Line Items] | |||
Stock Issued During Period, Shares, Restricted Stock Award, Gross | 2,719,298 | ||
Debt and Related Interest Debt [Member] | |||
Note 9 - Stock Transactions (Details) [Line Items] | |||
Stock Issued During Period, Shares, New Issues | 409,028,377 | ||
Stock Issued During Period, Value, New Issues | 1,080,554 | ||
Cancellation of Common Stock Warrant Agreement [Member] | |||
Note 9 - Stock Transactions (Details) [Line Items] | |||
Stock Issued During Period, Shares, Restricted Stock Award, Gross | 15,000,000 | ||
Stock Issued During Period, Value, Restricted Stock Award, Gross | $49,500 |
Note_10_Stock_Options_and_Warr2
Note 10 - Stock Options and Warrants (Details) (USD $) | 3 Months Ended | 6 Months Ended | 9 Months Ended |
Jun. 30, 2013 | Jun. 30, 2014 | Sep. 30, 2014 | |
Note 10 - Stock Options and Warrants (Details) [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 900,000 | ||
Stock Options Repriced During Period, Number | 4,185,000,000,000 | ||
Stock Options Repriced During Period, Exercise Price (in Dollars per share) | $0.10 | ||
Other Noncash Expense (in Dollars) | $52,000 | ||
Warrants Repriced During Period, Number | 1,190,625 | ||
Warrants Repriced During Period, Exercise Price (in Dollars per share) | $0.01 | ||
Warrants Issued During Period, Number | 2,838,048 | ||
Warrants Exercised, Number | 9,037,230 | ||
Warrants Expired During Period, Number | 2,261,251 | 2,261,251 | |
Warrants Expired During Period, Weighted Average Exercise Price (in Dollars per share) | $0.18 | $0.18 | |
Warrants Cancelled During Period, Number | 3,403,673 | 3,403,673 | |
(in Dollars per share) | $0.01 | $0.01 | |
Payment for Warrants Cancelled During Period (in Dollars) | 49,500 | ||
Employee Stock Option [Member] | Officer [Member] | |||
Note 10 - Stock Options and Warrants (Details) [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | 10 years | ||
Allocated Share-based Compensation Expense (in Dollars) | 9,755 | ||
Employee Stock Option [Member] | |||
Note 10 - Stock Options and Warrants (Details) [Line Items] | |||
Allocated Share-based Compensation Expense (in Dollars) | 9,755 | ||
Per Quarter [Member] | Officer [Member] | |||
Note 10 - Stock Options and Warrants (Details) [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period | 600,000 | ||
Prior Year Common Stock Sale Price Guarantees [Member] | |||
Note 10 - Stock Options and Warrants (Details) [Line Items] | |||
Warrants Repriced During Period, Number | 625,000 | ||
Warrants Repriced During Period, Exercise Price (in Dollars per share) | $0.01 | ||
Warrants Repriced During Period, Value Assigned (in Dollars) | 10,821 | ||
The 2013 Debt Agreement [Member] | |||
Note 10 - Stock Options and Warrants (Details) [Line Items] | |||
Stock Options Repriced During Period, Exercise Price (in Dollars per share) | $43,280 | ||
Warrants Repriced During Period, Number | 565,625 | ||
Warrants Repriced During Period, Exercise Price (in Dollars per share) | $0.01 | ||
Warrants Issued During Period, Number | 2,838,048 | ||
Issuance for Cashless Warrant Exercise [Member] | |||
Note 10 - Stock Options and Warrants (Details) [Line Items] | |||
Stock Issued During Period, Shares, New Issues | 4,722,365 | ||
Minimum [Member] | |||
Note 10 - Stock Options and Warrants (Details) [Line Items] | |||
Stock Options Repriced During Period, Exercise Price (in Dollars per share) | $0.15 | ||
Weighted Average [Member] | |||
Note 10 - Stock Options and Warrants (Details) [Line Items] | |||
Stock Options Repriced During Period, Exercise Price (in Dollars per share) | $0.20 | ||
Officer [Member] | |||
Note 10 - Stock Options and Warrants (Details) [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 900,000 | ||
Stock Options Issued During Period, Value (in Dollars) | 2,577 | ||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price (in Dollars per share) | $0.00 | ||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options (in Dollars) | $2,067 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period | 2,400,000 |
Note_10_Stock_Options_and_Warr3
Note 10 - Stock Options and Warrants (Details) - Common Stock Options (USD $) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2014 | Dec. 31, 2013 | |
Common Stock Options [Abstract] | ||
Balance | 10,640,000 | 9,740,000 |
Outstanding weighted-average exercise price | $0.13 | $0.13 |
Outstanding weighted-average remaining contractual life | 6 years 36 days | 6 years 6 months |
Options issued | 900,000 | |
Options issued | $0.00 | |
Options issued | 9 years 328 days |
Note_10_Stock_Options_and_Warr4
Note 10 - Stock Options and Warrants (Details) - Vested and Exercisable Options (USD $) | 9 Months Ended |
Sep. 30, 2014 | |
Note 10 - Stock Options and Warrants (Details) - Vested and Exercisable Options [Line Items] | |
Exercisable/Vested Options Outstanding | 9,740,000 |
Weighted Average Exercise Price | $0.13 |
Weighted Average Remaining Contractual Life | 6 years 6 months |
Note_10_Stock_Options_and_Warr5
Note 10 - Stock Options and Warrants (Details) - Fair Value of Stock Options and Purchase Warrants Assumptions (USD $) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2014 | Dec. 31, 2013 | |
Stock Options and Purchase Warrants [Member] | Minimum [Member] | ||
Note 10 - Stock Options and Warrants (Details) - Fair Value of Stock Options and Purchase Warrants Assumptions [Line Items] | ||
Average value per options and warrants (in Dollars per share) | $1 | $1 |
Stock Options and Purchase Warrants [Member] | Maximum [Member] | ||
Note 10 - Stock Options and Warrants (Details) - Fair Value of Stock Options and Purchase Warrants Assumptions [Line Items] | ||
Average value per options and warrants (in Dollars per share) | $17 | $6 |
Stock Options and Purchase Warrants [Member] | ||
Note 10 - Stock Options and Warrants (Details) - Fair Value of Stock Options and Purchase Warrants Assumptions [Line Items] | ||
Expected dividend yield | 0.00% | 0.00% |
Minimum [Member] | ||
Note 10 - Stock Options and Warrants (Details) - Fair Value of Stock Options and Purchase Warrants Assumptions [Line Items] | ||
Risk free interest rate | 67.00% | 51.00% |
Expected volatility | 63.00% | 34.00% |
Expected term | 2 years | 1 year |
Maximum [Member] | ||
Note 10 - Stock Options and Warrants (Details) - Fair Value of Stock Options and Purchase Warrants Assumptions [Line Items] | ||
Risk free interest rate | 1.32% | 1.41% |
Expected volatility | 83.00% | 107.00% |
Expected term | 4 years | 5 years |
Note_10_Stock_Options_and_Warr6
Note 10 - Stock Options and Warrants (Details) - Outstanding Vested Warrant Activity (USD $) | 6 Months Ended | 9 Months Ended | 12 Months Ended |
Jun. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | |
Common Stock Warrants | |||
Balance | 4,233,692 | 16,097,798 | |
Warrants outstanding weighted-average exercise price | $0.08 | $0.06 | |
Warrants weighted-average remaining contractual life | 1 year | 2 years 310 days | |
Warrants exercised-cashless | -9,037,230 | ||
Warrants exercised-cashless | ($0.02) | ||
Warrants issued | 2,838,048 | ||
Warrants issued | $0.01 | ||
Warrants issued | 3 years 335 days | ||
Warrants expired | -2,261,251 | -2,261,251 | |
Warrants expired | ($0.18) | ($0.18) | |
Warrants Cancelled | -3,403,673 | -3,403,673 | |
Warrants Cancelled Weighted Average Exercise Price | ($0.01) | ($0.01) | |
Re-Priced | 1,190,625 | ||
Re-Priced | $0.01 | ||
Canceled Old [Member] | |||
Common Stock Warrants | |||
Warrants Cancelled | -1,190,625 | ||
Warrants Cancelled Weighted Average Exercise Price | ($0.02) |
Note_11_Income_Taxes_Details
Note 11 - Income Taxes (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Note 11 - Income Taxes (Details) [Line Items] | ||
Operating Loss Carryforwards | $17,100,000 | |
Deferred Tax Assets, Net of Valuation Allowance | $0 | $0 |
Minimum [Member] | ||
Note 11 - Income Taxes (Details) [Line Items] | ||
Percentage that Carry Forwards Will Expire Unused | 50.00% |
Note_11_Income_Taxes_Details_R
Note 11 - Income Taxes (Details) - Reconciliation of Effective Income Tax Rates and Statutory Federal Tax Rates (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Reconciliation of Effective Income Tax Rates and Statutory Federal Tax Rates [Abstract] | ||||
Tax benefit at U.S. statutory rate | 34.00% | 34.00% | ||
Tax benefit at U.S. statutory rate | $129,717 | $377,941 | ||
State taxes, net of federal benefit | 4.00% | 4.00% | ||
State taxes, net of federal benefit | 15,261 | 44,464 | ||
Change in valuation allowance | -38.00% | -38.00% | ||
Change in valuation allowance | -144,978 | -422,405 | ||
0.00% | 0.00% | |||
$0 | $0 | $0 | $0 |
Note_11_Income_Taxes_Details_D
Note 11 - Income Taxes (Details) - Deferred Tax Assets and Liabilities (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Deferred Tax Assets and Liabilities [Abstract] | ||
Net Operating Loss Carry-forward | $7,938,465 | $7,946,959 |
Deferred Tax Liabilities b Accrued Officersb Salaries | -286,663 | -440,135 |
Net Deferred Tax Assets | 7,651,802 | 7,506,824 |
Valuation Allowance | -7,651,802 | -7,506,824 |
Total Net Deferred Tax Assets | $0 | $0 |
Note_12_Lease_Obligations_Deta
Note 12 - Lease Obligations (Details) (USD $) | 1 Months Ended | 9 Months Ended | 1 Months Ended | |||||
Dec. 31, 2013 | Jul. 31, 2013 | Sep. 30, 2012 | Jul. 31, 2011 | Sep. 30, 2014 | Sep. 30, 2013 | Jul. 31, 2014 | Jan. 31, 2014 | |
sqft | sqft | |||||||
Note 12 - Lease Obligations (Details) [Line Items] | ||||||||
Property and Equipment, Amount Acquired Via Capitalized Lease Obligations | $8,408 | $21,310 | ||||||
Capitalized Lease Obligations, Average Interest Rate | 15.50% | 12.50% | ||||||
Repayments of Long-term Capital Lease Obligations | 4,779 | 3,467 | ||||||
Capital Lease Obligations | 26,711 | 21,932 | ||||||
Lessee Leasing Arrangements, Operating Leases, Term of Contract | 1 year | |||||||
Area of Real Estate Property (in Square Feet) | 2,000 | 6,000 | ||||||
Lessee Leasing Arrangements, Operating Leases, Renewal Term | 1 year | |||||||
Contracted Annual Lease Rate | 17,304 | |||||||
Lease Rate (in Dollars per Square Foot) | 8.65 | |||||||
Operating Leases, Rent Expense | 13,314 | 14,761 | ||||||
Precision CNC LLC [Member] | WHE Subsidiary [Member] | ||||||||
Note 12 - Lease Obligations (Details) [Line Items] | ||||||||
Operating Leases, Rent Expense | 1,000 | |||||||
Operating Leases, Rent Expense, Minimum Rentals | 2,500 | |||||||
WHE Subsidiary [Member] | ||||||||
Note 12 - Lease Obligations (Details) [Line Items] | ||||||||
Operating Leases, Rent Expense | $13,957 |
Note_12_Lease_Obligations_Deta1
Note 12 - Lease Obligations (Details) - Future Lease Payments (USD $) | Sep. 30, 2014 |
Future Lease Payments [Abstract] | |
2014 | $1,335 |
2015 | 5,801 |
2016 | 6,620 |
2017 | 6,079 |
2018 | 2,097 |
$21,932 |
Note_13_Commitments_and_Contin1
Note 13 - Commitments and Contingencies (Details) (USD $) | 9 Months Ended |
Sep. 30, 2014 | |
Note 13 - Commitments and Contingencies (Details) [Line Items] | |
Employment Agreements, Initial Term of Employment | 3 years |
Automatic Renewing Period of Employment Agreements | 1 year |
Harry Schoell, Chairman and CTO [Member] | |
Note 13 - Commitments and Contingencies (Details) [Line Items] | |
Employment Agreements, Officer Salary | 150,000 |
Frankie Fruge, COO [Member] | |
Note 13 - Commitments and Contingencies (Details) [Line Items] | |
Employment Agreements, Officer Salary | 120,000 |
Chief Executive Officer [Member] | WHE Subsidiary [Member] | |
Note 13 - Commitments and Contingencies (Details) [Line Items] | |
Officers' Compensation | 70,165 |
Note_14_Consolidated_Subsidiar1
Note 14 - Consolidated Subsidiary (Details) (USD $) | 9 Months Ended | 3 Months Ended | ||
Sep. 30, 2014 | Dec. 31, 2012 | Sep. 30, 2012 | Mar. 31, 2012 | |
Note 14 - Consolidated Subsidiary (Details) [Line Items] | ||||
Proceeds from Issuance or Sale of Equity (in Dollars) | $1,224,360 | |||
An Unrelated Investor [Member] | Cyclone Performance [Member] | ||||
Note 14 - Consolidated Subsidiary (Details) [Line Items] | ||||
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 5.00% | |||
Proceeds from Issuance or Sale of Equity (in Dollars) | 30,000 | |||
Corporate Officers of the Company [Member] | Cyclone Performance [Member] | ||||
Note 14 - Consolidated Subsidiary (Details) [Line Items] | ||||
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 5.00% | |||
Cyclone Performance [Member] | ||||
Note 14 - Consolidated Subsidiary (Details) [Line Items] | ||||
Percentage of Ownership in a Consolidated Susidiary | 100.00% | |||
Cumulative Unallocated Losses to Non-Controlling Interest of Subsidiary (in Dollars) | $953 |
Note_15_Separation_of_Non_Cons1
Note 15 -Separation of Non Consolidated Subsidiary (Details) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | 3 Months Ended | 0 Months Ended | 57 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | |
Note 15 -Separation of Non Consolidated Subsidiary (Details) [Line Items] | ||||||||
Gain (Loss) on Disposition of Stock in Subsidiary or Equity Method Investee | $2,400,000 | |||||||
Treasury Stock, Shares, Retired (in Shares) | 3,000,000 | |||||||
Treasury Stock, Retired, Cost Method, Amount | 210,000 | |||||||
Proceeds from Issuance of Common Stock | 110,000 | 100,000 | ||||||
Net Income (Loss) Attributable to Parent | 1,339,869 | -871,894 | -947,468 | -2,120,987 | ||||
Separation Agreement [Member] | Scenario, Forecast [Member] | WHE Subsidiary [Member] | ||||||||
Note 15 -Separation of Non Consolidated Subsidiary (Details) [Line Items] | ||||||||
Proceeds from Divestiture of Interest in Consolidated Subsidiaries | 150,000 | |||||||
Separation Agreement [Member] | Scenario, Previously Reported [Member] | WHE Subsidiary [Member] | ||||||||
Note 15 -Separation of Non Consolidated Subsidiary (Details) [Line Items] | ||||||||
Deferred Revenue | 290,000 | 290,000 | 290,000 | 290,000 | ||||
Separation Agreement [Member] | WHE Subsidiary [Member] | TCA Global Master Credit Fund L.P. [Member] | ||||||||
Note 15 -Separation of Non Consolidated Subsidiary (Details) [Line Items] | ||||||||
Repayments of Long-term Debt | 78,000 | |||||||
Separation Agreement [Member] | WHE Subsidiary [Member] | ||||||||
Note 15 -Separation of Non Consolidated Subsidiary (Details) [Line Items] | ||||||||
Proceeds from Divestiture of Interest in Consolidated Subsidiaries | 350,000 | |||||||
Reimbursement Revenue | 24,000 | |||||||
Treasury Stock, Shares, Retired (in Shares) | 3,000,000 | |||||||
Treasury Stock, Retired, Cost Method, Amount | 210,000 | |||||||
Debt Instrument, Face Amount | 350,000 | 350,000 | 350,000 | 350,000 | ||||
Debt Instrument, Interest Rate, Stated Percentage | 6.00% | 6.00% | 6.00% | 6.00% | ||||
Debt Instrument, Term | 12 months | |||||||
Debt Instrument, Convertible, Conversion Price (in Dollars per share) | $0.12 | $0.12 | $0.12 | $0.12 | ||||
Proceeds from Issuance of Common Stock | 1,314,360 | |||||||
Sale of Stock, Price Per Share (in Dollars per share) | $0.27 | $0.27 | $0.27 | $0.27 | ||||
Separation Agreement [Member] | WHE Subsidiary [Member] | ||||||||
Note 15 -Separation of Non Consolidated Subsidiary (Details) [Line Items] | ||||||||
Liabilities Assumed | 50,000 | |||||||
Deferred Revenue | 10,000 | 10,000 | 10,000 | 10,000 | ||||
Separation Agreement [Member] | ||||||||
Note 15 -Separation of Non Consolidated Subsidiary (Details) [Line Items] | ||||||||
Intercompany Receivable, Amount Forgiven | 85,000 | |||||||
Liability Satisfied | 17,550 | |||||||
Shares Transferred to Satisfy Liability (in Shares) | 65,000 | |||||||
Proceeds from License Fees Received | 175,000 | |||||||
Royalty Revenue, Percent | 5.00% | 5.00% | 5.00% | 5.00% | ||||
License Agreement, Term | 20 years | |||||||
Licensing Agreement, Optional Extension | 10 years | |||||||
WHE Subsidiary [Member] | ||||||||
Note 15 -Separation of Non Consolidated Subsidiary (Details) [Line Items] | ||||||||
Investment in Subsidiary, Percentage Sold | 73.72% | |||||||
Cost Method Investments, Ownership Percentage | 15.13% | 15.13% | 15.13% | 15.13% | ||||
Gain (Loss) on Disposition of Stock in Subsidiary or Equity Method Investee | 2,443,506 | |||||||
Cost Method Investments | 556,756 | 556,756 | 556,756 | 556,756 | ||||
WHE Subsidiary [Member] | ||||||||
Note 15 -Separation of Non Consolidated Subsidiary (Details) [Line Items] | ||||||||
Cost Method Investments, Ownership Percentage | 15.13% | 15.13% | 15.13% | 15.13% | ||||
Net Income (Loss) Attributable to Parent | $696,831 | $157,266 | $828,531 |
Note_16_Receivables_Deferred_R1
Note 16 - Receivables, Deferred Revenue and Backlog (Details) (Company's Phoenix Power and Combilift Agreements [Member], USD $) | 9 Months Ended |
Sep. 30, 2014 | |
Company's Phoenix Power and Combilift Agreements [Member] | |
Note 16 - Receivables, Deferred Revenue and Backlog (Details) [Line Items] | |
Total Backlog for Prototype Engines | $400,000 |
Proceeds from Customers | $100,000 |
Note_17_Derivative_Financial_I2
Note 17 - Derivative Financial Instruments (Details) (USD $) | 9 Months Ended | |
Sep. 30, 2014 | Dec. 31, 2013 | |
Note 17 - Derivative Financial Instruments (Details) [Line Items] | ||
Convertible Debt | $942,052 | $743,250 |
Derivative Liability | 800,225 | 456,681 |
Amortization of Debt Discount (Premium) | 816,308 | |
Adjustments to Additional Paid in Capital, Equity Component of Convertible Debt | 954,641 | |
Loss on Derivative Instruments, Pretax | 148,289 | |
Debt [Member] | ||
Note 17 - Derivative Financial Instruments (Details) [Line Items] | ||
Derivative Liability | $483,892 | |
Minimum [Member] | ||
Note 17 - Derivative Financial Instruments (Details) [Line Items] | ||
Debt Instrument, Convertible, Threshold Percentage of Stock Price Trigger | 30.00% | |
Debt Instrument, Convertible, Threshold Trading Days | 10 | |
Maximum [Member] | ||
Note 17 - Derivative Financial Instruments (Details) [Line Items] | ||
Debt Instrument, Convertible, Threshold Percentage of Stock Price Trigger | 45.00% | |
Debt Instrument, Convertible, Threshold Trading Days | 20 |
Note_17_Derivative_Financial_I3
Note 17 - Derivative Financial Instruments (Details) - Estimated Fair Values of Liabilities for Derivative Instruments | 9 Months Ended | 12 Months Ended |
Sep. 30, 2014 | Dec. 31, 2013 | |
Derivative Financial Instruments, Liabilities [Member] | Minimum [Member] | ||
Note 17 - Derivative Financial Instruments (Details) - Estimated Fair Values of Liabilities for Derivative Instruments [Line Items] | ||
Volatility | 114.00% | 87.00% |
Risk Free Rate | 3.00% | 1.00% |
Expected Term (years) | 0 years | 0 years |
Derivative Financial Instruments, Liabilities [Member] | Maximum [Member] | ||
Note 17 - Derivative Financial Instruments (Details) - Estimated Fair Values of Liabilities for Derivative Instruments [Line Items] | ||
Volatility | 234.00% | 171.00% |
Risk Free Rate | 99.00% | 1.75% |
Expected Term (years) | 4 years | 3 years |
Derivative Financial Instruments, Liabilities [Member] | ||
Note 17 - Derivative Financial Instruments (Details) - Estimated Fair Values of Liabilities for Derivative Instruments [Line Items] | ||
Dividend Rate | 0.00% | 0.00% |
Minimum [Member] | ||
Note 17 - Derivative Financial Instruments (Details) - Estimated Fair Values of Liabilities for Derivative Instruments [Line Items] | ||
Volatility | 63.00% | 34.00% |
Risk Free Rate | 67.00% | 51.00% |
Expected Term (years) | 2 years | 1 year |
Maximum [Member] | ||
Note 17 - Derivative Financial Instruments (Details) - Estimated Fair Values of Liabilities for Derivative Instruments [Line Items] | ||
Volatility | 83.00% | 107.00% |
Risk Free Rate | 1.32% | 1.41% |
Expected Term (years) | 4 years | 5 years |
Note_18_Subsequent_Events_Deta
Note 18- Subsequent Events (Details) (USD $) | 3 Months Ended | 1 Months Ended | |||
Dec. 31, 2014 | Oct. 31, 2014 | Nov. 14, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | |
Note 18- Subsequent Events (Details) [Line Items] | |||||
Common Stock, Shares Authorized | 2,000,000,000 | 2,000,000,000 | 2,000,000,000 | ||
Reserve Allocation, Required Percentage | 300.00% | ||||
Board of Directors Chairman [Member] | Subsequent Event [Member] | |||||
Note 18- Subsequent Events (Details) [Line Items] | |||||
Stock Borrowed and Used for Settlement of Liability | 10,000,000 | ||||
Subsequent Event [Member] | |||||
Note 18- Subsequent Events (Details) [Line Items] | |||||
Debt Conversion, Converted Instrument, Shares Issued | 80,000,000 | ||||
Debt Conversion, Converted Instrument, Amount (in Dollars) | $55,000 |