Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | Dec. 31, 2016 | |
Document And Entity Information | ||
Entity Registrant Name | CYCLONE POWER TECHNOLOGIES INC | |
Entity Central Index Key | 1,442,711 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 1,517,400,273 | |
Trading Symbol | CYPW | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,016 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
CURRENT ASSETS | ||
Inventory, net | $ 337,959 | $ 323,508 |
Other current assets | 587 | 587 |
Total current assets | 338,546 | 324,095 |
PROPERTY AND EQUIPMENT | ||
Furniture, fixtures, and equipment | 302,770 | 304,569 |
Accumulated depreciation | (184,981) | (178,049) |
Net property and equipment | 117,789 | 126,520 |
OTHER ASSETS | ||
Patents, trademarks and copyrights | 539,446 | 539,446 |
Accumulated amortization | (264,999) | (256,078) |
Net patents, trademarks and copyrights | 274,447 | 283,368 |
Other assets | 8,062 | 8,062 |
Total other assets | 282,509 | 291,430 |
Total Assets | 738,844 | 742,045 |
CURRENT LIABILITIES | ||
Bank overdraft | 3,068 | 3,221 |
Accounts payable and accrued expenses | 1,253,933 | 1,159,133 |
Accounts payable and accrued expenses-related parties | 293,975 | 210,225 |
Notes and other loans payable-current portion | 422,930 | 357,737 |
Derivative liabilities | 381,161 | 383,482 |
Notes and other loans payable-related parties | 385,511 | 321,334 |
Capitalized lease obligations-current portion | 13,426 | 12,950 |
Deferred revenue and license deposits | 153,731 | 148,031 |
Total current liabilities | 2,907,735 | 2,596,113 |
NON CURRENT LIABILITIES | ||
Capitalized lease obligations-net of current portion | 32,341 | 36,939 |
Notes and other loans payable-net of current portion | 50,000 | |
Total non-current liabilities | 32,341 | 86,939 |
Total Liabilities | 2,940,076 | 2,683,052 |
Commitments and contingencies | ||
STOCKHOLDERS' DEFICIT | ||
Series B preferred stock, $.0001 par value, 1,000 shares authorized, 1,000 shares issued and outstanding at March 31, 2016 and December 31, 2015, respectively. | ||
Common stock, $.0001 par value, 4,000,000,000 shares authorized, 1,388,669,532 shares issued and outstanding at March 31, 2016 and December 31, 2015 respectively. | 138,864 | 138,864 |
Additional paid-in capital | 56,622,211 | 56,621,826 |
Treasury Stock, 317,000 shares, at March 31, 2016 and December 31, 2015 respectively, at cost. | (3,000) | (3,000) |
Accumulated deficit (inclusive of non-cash derivative losses of $32,259,863 and other losses of $26,728,483 at March 31, 2016 and non-cash derivative losses of $32,253,992 and other losses of $26,473,744 at December 31, 2015) | (58,988,346) | (58,727,736) |
Total stockholders' deficit-Cyclone Power Technologies Inc. | (2,230,271) | (1,970,046) |
Non controlling interest in consolidated subsidiaries | 29,039 | 29,039 |
Total Stockholders' Deficit | (2,201,232) | (1,941,007) |
Total Liabilities and Stockholders' Deficit | $ 738,844 | $ 742,045 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 1,000 | 1,000 |
Preferred stock, shares issued | 1,000 | 1,000 |
Preferred stock, shares outstanding | 1,000 | 1,000 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 4,000,000,000 | 4,000,000,000 |
Common stock, shares issued | 1,388,669,532 | 1,388,669,532 |
Common stock, shares outstanding | 1,388,669,532 | 1,388,669,532 |
Treasury stock, shares | 317,000 | 317,000 |
Non-cash derivative losses and other losses | $ 58,988,346 | $ 58,727,736 |
Attributable to Non Cash Derivative Liability Accounting [Member] | ||
Non-cash derivative losses and other losses | 32,259,863 | 32,253,992 |
Attributable to Operating Losses [Member] | ||
Non-cash derivative losses and other losses | $ 26,728,483 | $ 26,473,744 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Income Statement [Abstract] | ||
REVENUES | ||
COST OF GOODS SOLD | ||
Gross profit | ||
OPERATING EXPENSES | ||
Advertising and promotion | 5,291 | 254 |
General and administrative | 190,619 | 271,579 |
Research and development | 34,693 | 106,927 |
Total operating expenses | 230,603 | 378,760 |
Operating loss | (230,603) | (378,760) |
OTHER (EXPENSE) INCOME | ||
Other (expense) | 500 | (50,000) |
Derivative income (expense) -notes payable | 2,321 | (17,654) |
Interest (expense) | (32,828) | (141,223) |
Total other (expense) | (30,007) | (208,877) |
Loss before income taxes | (260,610) | (587,637) |
Income taxes | ||
Net loss | $ (260,610) | $ (587,637) |
Net loss per common share, basic and diluted | $ 0 | $ 0 |
Weighted average number of common shares outstanding | 1,388,669,532 | 972,124,660 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (260,610) | $ (587,637) |
Adjustments to reconcile net loss to net cash used by operating activities: | ||
Depreciation and amortization | 17,653 | 19,078 |
Issuance of restricted common stock, options and warrants for services | 62,084 | |
Loss on debt paid with common stock | 50,000 | |
Amortization of prepaid interest expenses via common stock & warrants | 28,459 | |
(Gain) loss from derivative liability-notes payable | (2,321) | 17,654 |
Amortization of derivative debt discount | 8,193 | 78,861 |
Interest paid with common stock | 11,372 | |
Amortization of prepaid expenses via common stock & warrants | 385 | |
Changes in operating assets and liabilities: | ||
(Increase) decrease in inventory | (14,451) | (45,759) |
Increase in other current assets | 15,116 | |
Increase in accounts payable and accrued expenses | 94,799 | 177,782 |
Decrease in cash overdraft | (153) | |
Increase in accounts payable and accrued expenses-related parties | 83,750 | 83,750 |
Increase in deferred revenue and deposits | 5,700 | |
Net cash used by operating activities | (67,055) | (89,240) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Expenditures incurred for patents, trademarks and copyrights | ||
Expenditures for property and equipment | ||
Net cash used by investing activities | ||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Payment of capitalized leases | (4,122) | (1,370) |
Proceeds from notes and loans payable | 7,000 | 50,000 |
Increase in related party notes and loans payable-net | 64,177 | 40,339 |
Net cash provided by financing activities | 67,055 | 88,969 |
Net increase (decrease) in cash | (271) | |
Cash, beginning of period | 278 | |
Cash, end of period | 7 | |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Payment of interest in cash | 1,603 | 10,869 |
NON CASH INVESTING AND FINANCING ACTIVITIES: | ||
Issuance of 40,000,000 shares of Common stock for liability settlement | 14,000 | |
Issuance of 5,250,000 shares of Common stock pursuant to prior year common stock price guarantees | 52,500 | |
Issuance of 328,161,744 shares of Common stock for debt repayment | 109,462 | |
Issuance of 35,959,970 shares of Common stock for debt interest | $ 11,372 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows (Unaudited) (Parenthetical) | 3 Months Ended |
Mar. 31, 2015shares | |
Liability Settlement [Member] | |
Common stock issued, shares | 40,000,000 |
Price Guarantees [Member] | |
Common stock issued, shares | 5,250,000 |
Debt Repayment [Member] | |
Common stock issued, shares | 328,161,744 |
Debt Interest [Member] | |
Common stock issued, shares | 35,959,970 |
Organizational and Significant
Organizational and Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organizational and Significant Accounting Policies | 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 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. At March 31, 2016 the company had a 95% controlling interest in Cyclone Performance. 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 as of March 31, 2016, retains approximately a .9 million share non controlling interest in the former WHE Subsidiary. The former subsidiary has been renamed Q 2 Power Technology (Q2P) and is currently non-consolidated since the investment is below the 20% equity. B. PRINCIPLES OF CONSOLIDATION AND BASIS OF PRESENTATION The condensed 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 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. Complete financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2015, as filed with the Securities and Exchange Commission as part of the Company’s Form 10-K. The Company prepares its consolidated financial statements in conformity with account principles generally accepted in the United States (“U.S. GAAP”). 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. The financial statements presented for the three months year ended March 31, 2016 and 2015 are unaudited. C. CASH Cash includes cash on hand and cash in banks. At March 31, 2016 and December 31, 2015, the Company maintained cash balances at one financial institution. 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 March 31, 2016 and 2015, total anti-dilutive shares amounted to approximately 13.8 million and 15.2 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 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 December 31, 2015, 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 2013 through 2015. F. REVENUE RECOGNITION The Company’s revenue recognition policies are in compliance with ASC 605, “ Revenue Recognition – Multiple Element Arrangements Revenue Recognition 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 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, 2016 (beginning of period) and March 31, 2016 (end of period) is as follows: Instrument Beginning of Period Change End of Period Level Valuation Methodology Derivative liabilities $ 383,482 $ (2,321 ) $ 381,161 3 Stochastic Process Forecasting Model Please refer to Note 16 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 three months ended March 31, 2016 and 2015 were $34,693 and $106,927, respectively. K. STOCK BASED COMPENSATION The Company applies the fair value method of ASC 718, “ Share Based Payment The Company accounts for common stock options and purchase warrants at fair value in accordance with ASC 815-40, “ Derivatives and Hedging”. Share Based Payment”. 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 10 - 15 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 April 2015, the FASB issued ASU No. 2015-03, “ Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs In February 2016, the FASB issued ASU 2016-02, Leases. In March 2016, the FASB issued ASU 2016-09, Compensation-Stock Compensation: Improvements to Employee Share-Based Payment Accounting. ASU No. 2015-17, “ Balance Sheet Classification of Deferred Assets 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 March 31, 2016, the Company maintained its cash in one quality financial institution. The Company has not experienced any losses in its bank accounts through March 31, 2016. 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 |
Going Concern
Going Concern | 3 Months Ended |
Mar. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern | NOTE 2 - GOING CONCERN As shown in the accompanying consolidated financial statements, the Company incurred substantial operating and other losses and expenses of approximately $.3 million for the three months ended March 31, 2016 and $1.5 million for the year ended December 31, 2015, The cumulative deficit since inception is approximately $59 million, which is comprised of $26.7 million attributable to actual operating losses (which were paid in cash, stock for services and other equity instruments) and net other expenses, and $32.3 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 previously obtained convertible notes payable. The Company has a working capital deficit at March 31, 2016 of approximately $2.6 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 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. |
Inventory, Net
Inventory, Net | 3 Months Ended |
Mar. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Inventory, Net | NOTE 3 – INVENTORY, NET Inventory principally consists of raw material engine parts, work in process engines, labor and overhead, net of realization, valuation and obsolescence reserves. In the aggregate it is stated at the lower of cost or market. March 31, 2016 December 31, 2015 Raw material $ 323,224 $ 323,508 Work in process 14,735 0 Total $ 337,959 $ 323,508 We provide estimated provisions for the realization, valuation and obsolescence of our inventories, including adjustments to market, based on various factors, including the age of such inventory and our management’s assessment of the need for such provisions. We look at historical inventory aging and usage reports and margin analyses in determining our provision estimate. |
Property and Equipment, Net
Property and Equipment, Net | 3 Months Ended |
Mar. 31, 2016 | |
PROPERTY AND EQUIPMENT | |
Property and Equipment, Net | NOTE 4 – PROPERTY AND EQUIPMENT, NET Property and equipment consists of the following: March 31, 2016 December 31, 2015 Display equipment for trade shows $ 6,270 $ 6,270 Leasehold improvements and furniture and fixtures 93,922 93,922 Equipment and computers 202,578 204,377 Total 302,770 304,569 Accumulated depreciation (184,981 ) (178,049 ) Net property and equipment $ 117,789 $ 126,520 Depreciation expense for the three months ended March 31, 2016 and 2015 was $8,372 and $9,247, respectively. |
Patents, Trademarks and Copyrig
Patents, Trademarks and Copyrights | 3 Months Ended |
Mar. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Patents, Trademarks and Copyrights | 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 March 31, 2016 and December 31, 2015 were $274,447 and $283,368, respectively. For the three months ended March 31, 2016 and for the year ended December 31, 2015, the Company capitalized $0 and $0, respectively, of expenditures related to these assets. As of March 31, 2016, the Company had 15 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 expenses for the three months ended March 31, 2016 and 2015 were $8,921 and $9,831, respectively. |
Notes and Other Loans Payable
Notes and Other Loans Payable | 3 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
Notes and Other Loans Payable | 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: March 31, 2016 December 31, 2015 12% convertible notes payable, maturing at various dates from November 2013 through April 2016 (A) $ 39,465 $ 34,558 10% convertible note payable, monthly payments commencing in December 2013 through July 2014 (B) 19,963 19,963 10% convertible notes payable maturing at various dates from May 2015 through February 2016 (C) 76,000 72,793 , 10% convertible notes payable, maturing at various dates from December 2015 through January 2016 (D) 29,303 29,223 10% convertible notes payable maturing at various dates from February 2015 through August 2015 ( F ) 116,200 116,200 12% convertible notes payable, maturing at various dates from April 2015 through May 2015 ( G ) 85,000 85,000 10% note payable, maturing Feb 3, 2017 50,000 50,000 10% note payable, maturing Oct. 15, 2016 7,000 - Total non related party notes –net of discount 422,930 407,737 Less-Current Portion 422,930 357,737 Total non-current non related party $ - $ 50,000 (A) Notes issued net of 10% original discount along with additional discount from derivative liabilities ($3,489 unamortized at March 31, 2016). This note is in default. (B) Note issued net of original discount (fully amortized) Effective May 8, 2015, the Company is subject to a default judgment of approximately $175,000, plus subsequent penalty interest for non-payment of convertible debt and interest. The Company is negotiating a reduced settlement. Unpaid interest, default penalties and default interest is included in accounts payable and accrued liabilities. (C) Notes issued net of discount from derivative liabilities (fully amortized). At March 31, 2016, the Company held approximately 97 million shares in reserve to cover the potential conversion of this note into common stock pursuant to debt covenants. This note is in default. (D) Notes issued net of discount (fully amortized) This note is in default. (F) Notes issued net of discount from derivative liabilities (fully amortized). At March 31, 2016, the Company held 233.3 million shares in reserve to cover the potential conversion of this note into common stock pursuant to debt covenants. This note is in default. (G) Notes issued net of discount from derivative liabilities (fully amortized at March 31, 2015). The Company is subject to litigation judgement of approximately $150,000, plus subsequent penalty interest for non–payment. Company is seeking to arrange a settlement. Unpaid interest, default penalties and default interest is included in accounts payable and accrued liabilities. B. RELATED PARTIES A summary of related party notes and other loans payable is as follows: March 31, 2016 December 31, 2015 6% demand loans per Operations Agreement with Schoell Marine Inc., a company owned by Cyclone’s Chairman and controlling shareholder (A) $ 171,656 $ 117,734 6% non-collateralized loans from officer and shareholder, payable on demand. The original principal balances were $157,101. 109,154 103,328 12% non-collateralized loans from officer and shareholder, payable on demand 20,179 20,178 Accrued Interest 84,522 80,094 Total current related party notes, inclusive of accrued interest $ 385,511 $ 321,334 (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. For the three months ended March 31, 2016 $500 of principal was paid on the note balance. In June 2015 Schoell Marine forgave $350,000 of principle and $250,000 of accrued interest on the note. This was recorded as additional paid in capital. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 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 at an annual rent of $60,000. The lease period ends December 2016. with a 1 year renewal at the company’s option, and a 2% rate increase. Occupancy costs for the three months ended March 31, 2016 and 2015 were $15,900 and $15,000, respectively. B. DEFERRED COMPENSATION Included in accounts payable and accrued expenses - related parties as of March 31, 2016 and December 31, 2015 are $206,250 and $137,500, 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 June 2015, the principle officers of the company forgave $612,500 of deferred compensation. This was recorded in additional paid in capital. |
Preferred Stock
Preferred Stock | 3 Months Ended |
Mar. 31, 2016 | |
Equity [Abstract] | |
Preferred Stock | 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. |
Stock Transactions
Stock Transactions | 3 Months Ended |
Mar. 31, 2016 | |
Equity [Abstract] | |
Stock Transactions | NOTE 9 – STOCK TRANSACTIONS During the three months ended March 31, 2016, the Company: a- Amortized (based on vesting) $385 of common stock options for employee services. |
Stock Options and Warrants
Stock Options and Warrants | 3 Months Ended |
Mar. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Options and Warrants | NOTE 10 – STOCK OPTIONS AND WARRANTS A. COMMON STOCK OPTIONS Per the employment contracts with certain officers, for the three months ended March 31, 2016, the company issued 450,000 common stock options, valued at $855 ( pursuant to the Black Scholes valuation model) ) that are exercisable into shares of common stock at an average exercise price of $.0019 and with a maturity life of 10 years. For the three months year ended March 31, 2016, the amortization of stock options was $385 and the unamortized balance was $1,702. A summary of the common stock options for the period from December 31, 2015 through March 31, 2016 follows: Number Outstanding Weighted Avg. Exercise Price Weighted Avg. Remaining Contractual Life (Years) Balance, December 31, 2015 12,380,000 $ 0.123 6.0 Options issued 450,000 0.002 Options exercised Expired (150,000 ) (.098 ) Balance, March 31, 2016 12,680,000 $ 0.106 5.8 The vested and exercisable options at period end follows: Exercisable/ Vested Options Outstanding Weighted Avg. Exercise Price Weighted Avg. Remaining Contractual Life (Years) Balance March 31, 2016 11,030,000 $ .128 5.1 Additional vesting by June 30, 2016 450,000 .0003 9.0 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: Three Months Ended March 31, 2016 Three Months Ended March 31, 2015 Risk free interest rate .87 % .89 % Expected volatility 136 % 102 % Expected term 3 3 Expected dividend yield 0 % 0 % Average value per options and warrants $ .0019 $ .0003 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, B. COMMON STOCK WARRANTS A summary of outstanding vested warrant activity for the period from December 31, 2014 to March 31, 2016 follows: Number Outstanding Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Common Stock Warrants Balance, December 31, 2015 1,125,000 $ .042 2.05 Warrants exercised-cashless - - - Warrants issued - - - Warrants expired - - - Warrants cancelled - - - Balance, March 31, 2016 1,125,000 $ .042 .91 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 11 – INCOME TAXES A reconciliation of the differences between the effective income tax rates and the statutory federal tax rates for the three months ended March 31, 2016 and 2015 are as follows: Three Months ended March 31, 2016 Amount Three Months ended March31 2015 Amount Tax benefit at U.S. statutory rate 34 % $ 64,026 34 % $ 143,606 State taxes, net of federal benefit 4 % 7,532 4 % 16,895 Change in valuation allowance (38 )% $ (71,558 ) (38 )% $ (160,501 ) - - The tax effect of temporary differences that give rise to significant portions of the deferred tax assets and liabilities at March 31, 2016 and December 31, 2015 consisted of the following: Deferred Tax Assets March 31, 2016 December 31, 2015 Net Operating Loss Carry-forward $ 10,022,175 $ 9,924,492 Deferred Tax Liabilities (821,931 ) (795,805 ) Net Deferred Tax Assets 9,200,244 9,128,687 Valuation Allowance (9,200,244 ) (9,128,687 ) Total Net Deferred Tax Assets $ - $ - As of March 31, 2016, the Company had a net operating loss carry forward for income tax reporting purposes of approximately $21.6 million that may be offset against future taxable income through 2031. 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. |
Lease Obligations
Lease Obligations | 3 Months Ended |
Mar. 31, 2016 | |
Leases [Abstract] | |
Lease Obligations | NOTE 12 –LEASE OBLIGATIONS A. CAPITALIZED LEASE OBLIGATIONS Total lease payments made for the three months ended March 31, 2016 were $4,122. The balance of capitalized lease obligations payable at March 31, 2016 and December 31, 2015 were $45,767 and $49,889, respectively. Future lease payments are: 2016 $ 8,828 2017 14,382 2018 12,031 2019 8,551 2020 1,975 $ 45,767 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 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. |
Consolidated Subsidiary
Consolidated Subsidiary | 3 Months Ended |
Mar. 31, 2016 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Consolidated Subsidiary | 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. Subsequent 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 March 31, 2016, 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. |
Receivables, Deferred Revenue a
Receivables, Deferred Revenue and Backlog | 3 Months Ended |
Mar. 31, 2016 | |
Deferred Revenue Disclosure [Abstract] | |
Receivables, Deferred Revenue and Backlog | NOTE 15 – RECEIVABLES, DEFERRED REVENUE AND BACKLOG As of March 31, 2016, total backlog for prototype engines to be delivered was $400,000 from the Combilift agreement, of which $100,000 has been paid and has been recorded as deferred revenue. A customer advanced $25,000 as a deposit towards progress payments on a $80,000 contract for engines to be delivered in 2017 and another customer contributed $5,700 in material parts towards an engine contract. |
Derivative Financial Instrument
Derivative Financial Instruments | 3 Months Ended |
Mar. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | NOTE 16 – DERIVATIVE FINANCIAL INSTRUMENTS Pursuant to additional financing, in the year ended December 31, 2015 and for the three months ended March 31, 2016 the Company did not enter into any convertible note agreements. Prior convertible notes had conversion prices into common stock that 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. In the three months ended March 31, 2016, the Company recorded a $8,192 non-cash charge to interest expense (reflective of debt discount amortization), and $2,321 of derivative gains related to adjusting the derivative liability to fair value. At March 31, 2016, the derivative related fair value of debt was $381,161. 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. 3 Months Ended March 31, 2016 Year Ended December. 31, 2015 Volatility 91% 87% - 171% Risk Free Rate .21% .1% - 1.75% Expected Term (years) 0 – 1.05 0 - 3 Dividend Rate 0% 0% |
Litigation
Litigation | 3 Months Ended |
Mar. 31, 2016 | |
Litigation | |
Litigation | NOTE 17 – LlTIGATION Effective May 8, 2015, the Company is subject to a default judgment of approximately $175,000, plus interest for non-payment of convertible debt and interest. The Company is negotiating a reduced settlement. In August 2015, the Company is subject to litigation of approximately $150,000 plus interest for non-payment of a liability. The Company is seeking to arrange a settlement. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 19 – SUBSEQUENT EVENTS In the second quarter of 2016, the Company engaged in the following transactions: a- The Company issued 3 million shares of common stock value at $6,000 for services. b- The company issued approximately 45.7 million shares of common stock valued at approximately $82,000 pursuant to the final conversion of a liability. c- The Company has placed purchase orders for the pre production manufacturing of 10 Mark 1 engines to test application and integration with customers’ systems. d- In recognition of the declining market value and low market volume, the company sold all of its investment in Q 2 Power Technologies for $44,000 and realized a loss of $ 662,844. e- Effective September 1, 2016, the company raised the authorized common stock to 4,000,000,000 shares. f- The company issued 80 million shares of common stock valued at $216,000 pursuant to the conversion of a liability. |
Organizational and Significan25
Organizational and Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Organization and Operations | 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 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. At March 31, 2016 the company had a 95% controlling interest in Cyclone Performance. 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 as of March 31, 2016, retains approximately a .9 million share non controlling interest in the former WHE Subsidiary. The former subsidiary has been renamed Q 2 Power Technology (Q2P) and is currently non-consolidated since the investment is below the 20% equity. |
Principles of Consolidation and Basis of Presentation | B. PRINCIPLES OF CONSOLIDATION AND BASIS OF PRESENTATION The condensed 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 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. Complete financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2015, as filed with the Securities and Exchange Commission as part of the Company’s Form 10-K. The Company prepares its consolidated financial statements in conformity with account principles generally accepted in the United States (“U.S. GAAP”). 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. The financial statements presented for the three months year ended March 31, 2016 and 2015 are unaudited. |
Cash | C. CASH Cash includes cash on hand and cash in banks. At March 31, 2016 and December 31, 2015, the Company maintained cash balances at one financial institution. |
Computation of Income (Loss) Per Share | 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 March 31, 2016 and 2015, total anti-dilutive shares amounted to approximately 13.8 million and 15.2 million shares, respectively. |
Income Taxes | 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 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 December 31, 2015, 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 2013 through 2015. |
Revenue Recognition | F. REVENUE RECOGNITION The Company’s revenue recognition policies are in compliance with ASC 605, “ Revenue Recognition – Multiple Element Arrangements Revenue Recognition 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. |
Warranty Provisions | 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 | 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 | I. FAIR VALUE OF FINANCIAL INSTRUMENTS ASC 820, “ Fair Value Measurements and Disclosures 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, 2016 (beginning of period) and March 31, 2016 (end of period) is as follows: Instrument Beginning of Period Change End of Period Level Valuation Methodology Derivative liabilities $ 383,482 $ (2,321 ) $ 381,161 3 Stochastic Process Forecasting Model Please refer to Note 16 for disclosure and assumptions used to calculate the fair value of the derivative liabilities. |
Research and Development | J. RESEARCH AND DEVELOPMENT Research and development activities for product development are expensed as incurred. Costs for the three months ended March 31, 2016 and 2015 were $34,693 and $106,927, respectively. |
Stock Based Compensation | K. STOCK BASED COMPENSATION The Company applies the fair value method of ASC 718, “ Share Based Payment |
Common Stock Options and Purchase Warrants | 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”. Share Based Payment”. 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” |
Original Issue Debt Discount | 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 and Equipment | 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 10 - 15 Shop equipment 7 Computers 3 Expenditures for maintenance and repairs are charged to operations as incurred. |
Impairment of Long Lived Assets | 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. |
Recent Accounting Pronouncements | P. RECENT ACCOUNTING PRONOUNCEMENTS In April 2015, the FASB issued ASU No. 2015-03, “ Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs In February 2016, the FASB issued ASU 2016-02, Leases. In March 2016, the FASB issued ASU 2016-09, Compensation-Stock Compensation: Improvements to Employee Share-Based Payment Accounting. ASU No. 2015-17, “ Balance Sheet Classification of Deferred Assets |
Concentration of Risk | 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 March 31, 2016, the Company maintained its cash in one quality financial institution. The Company has not experienced any losses in its bank accounts through March 31, 2016. 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. |
Derivative Financial Instruments | R. DERIVATIVE FINANCIAL INSTRUMENTS Accounting and reporting standards for derivative instruments and for hedging activities were codified by ASC Topic 815, Derivatives and Hedging |
Organizational and Significan26
Organizational and Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Fair Value of Financial Instrument | The summary of fair values and changing values of financial instruments as of January 1, 2016 (beginning of period) and March 31, 2016 (end of period) is as follows: Instrument Beginning of Period Change End of Period Level Valuation Methodology Derivative liabilities $ 383,482 $ (2,321 ) $ 381,161 3 Stochastic Process Forecasting Model |
Schedule of Estimated Useful Lives of 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 10 - 15 Shop equipment 7 Computers 3 |
Inventory, Net (Tables)
Inventory, Net (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Net | In the aggregate it is stated at the lower of cost or market. March 31, 2016 December 31, 2015 Raw material $ 323,224 $ 323,508 Work in process 14,735 0 Total $ 337,959 $ 323,508 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
PROPERTY AND EQUIPMENT | |
Schedule of Property and Equipment, Net | Property and equipment consists of the following: March 31, 2016 December 31, 2015 Display equipment for trade shows $ 6,270 $ 6,270 Leasehold improvements and furniture and fixtures 93,922 93,922 Equipment and computers 202,578 204,377 Total 302,770 304,569 Accumulated depreciation (184,981 ) (178,049 ) Net property and equipment $ 117,789 $ 126,520 |
Notes and Other Loans Payable (
Notes and Other Loans Payable (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Non-related Party Notes and Other Loans Payable | A summary of non-related party notes and other loans payable is as follows: March 31, 2016 December 31, 2015 12% convertible notes payable, maturing at various dates from November 2013 through April 2016 (A) $ 39,465 $ 34,558 10% convertible note payable, monthly payments commencing in December 2013 through July 2014 (B) 19,963 19,963 10% convertible notes payable maturing at various dates from May 2015 through February 2016 (C) 76,000 72,793 , 10% convertible notes payable, maturing at various dates from December 2015 through January 2016 (D) 29,303 29,223 10% convertible notes payable maturing at various dates from February 2015 through August 2015 ( F ) 116,200 116,200 12% convertible notes payable, maturing at various dates from April 2015 through May 2015 ( G ) 85,000 85,000 10% note payable, maturing Feb 3, 2017 50,000 50,000 10% note payable, maturing Oct. 15, 2016 7,000 - Total non related party notes –net of discount 422,930 407,737 Less-Current Portion 422,930 357,737 Total non-current non related party $ - $ 50,000 (A) Notes issued net of 10% original discount along with additional discount from derivative liabilities ($3,489 unamortized at March 31, 2016). This note is in default. (B) Note issued net of original discount (fully amortized) Effective May 8, 2015, the Company is subject to a default judgment of approximately $175,000, plus subsequent penalty interest for non-payment of convertible debt and interest. The Company is negotiating a reduced settlement. Unpaid interest, default penalties and default interest is included in accounts payable and accrued liabilities. (C) Notes issued net of discount from derivative liabilities (fully amortized). At March 31, 2016, the Company held approximately 97 million shares in reserve to cover the potential conversion of this note into common stock pursuant to debt covenants. This note is in default. (D) Notes issued net of discount (fully amortized) This note is in default. (F) Notes issued net of discount from derivative liabilities (fully amortized). At March 31, 2016, the Company held 233.3 million shares in reserve to cover the potential conversion of this note into common stock pursuant to debt covenants. This note is in default. (G) Notes issued net of discount from derivative liabilities (fully amortized at March 31, 2015). The Company is subject to litigation judgement of approximately $150,000, plus subsequent penalty interest for non–payment. Company is seeking to arrange a settlement. Unpaid interest, default penalties and default interest is included in accounts payable and accrued liabilities. |
Schedule of Related Party Notes and Other Loans Payable | A summary of related party notes and other loans payable is as follows: March 31, 2016 December 31, 2015 6% demand loans per Operations Agreement with Schoell Marine Inc., a company owned by Cyclone’s Chairman and controlling shareholder (A) $ 171,656 $ 117,734 6% non-collateralized loans from officer and shareholder, payable on demand. The original principal balances were $157,101. 109,154 103,328 12% non-collateralized loans from officer and shareholder, payable on demand 20,179 20,178 Accrued Interest 84,522 80,094 Total current related party notes, inclusive of accrued interest $ 385,511 $ 321,334 (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. For the three months ended March 31, 2016 $500 of principal was paid on the note balance. |
Stock Options and Warrants (Tab
Stock Options and Warrants (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Common Stock Option | A summary of the common stock options for the period from December 31, 2015 through March 31, 2016 follows: Number Outstanding Weighted Avg. Exercise Price Weighted Avg. Remaining Contractual Life (Years) Balance, December 31, 2015 12,380,000 $ 0.123 6.0 Options issued 450,000 0.002 Options exercised Expired (150,000 ) (.098 ) Balance, March 31, 2016 12,680,000 $ 0.106 5.8 |
Schedule of Vested and Exercisable Options | The vested and exercisable options at period end follows: Exercisable/ Vested Options Outstanding Weighted Avg. Exercise Price Weighted Avg. Remaining Contractual Life (Years) Balance March 31, 2016 11,030,000 $ .128 5.1 Additional vesting by June 30, 2016 450,000 .0003 9.0 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | 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: Three Months Ended March 31, 2016 Three Months Ended March 31, 2015 Risk free interest rate .87 % .89 % Expected volatility 136 % 102 % Expected term 3 3 Expected dividend yield 0 % 0 % Average value per options and warrants $ .0019 $ .0003 |
Schedule of Outstanding Vested Warrant Activity | A summary of outstanding vested warrant activity for the period from December 31, 2014 to March 31, 2016 follows: Number Outstanding Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Common Stock Warrants Balance, December 31, 2015 1,125,000 $ .042 2.05 Warrants exercised-cashless - - - Warrants issued - - - Warrants expired - - - Warrants cancelled - - - Balance, March 31, 2016 1,125,000 $ .042 .91 |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of Effective Income Tax Rate Reconciliation | A reconciliation of the differences between the effective income tax rates and the statutory federal tax rates for the three months ended March 31, 2016 and 2015 are as follows: Three Months ended March 31, 2016 Amount Three Months ended March31 2015 Amount Tax benefit at U.S. statutory rate 34 % $ 64,026 34 % $ 143,606 State taxes, net of federal benefit 4 % 7,532 4 % 16,895 Change in valuation allowance (38 )% $ (71,558 ) (38 )% $ (160,501 ) - - |
Schedule of Deferred Tax Assets and Liabilities | The tax effect of temporary differences that give rise to significant portions of the deferred tax assets and liabilities at March 31, 2016 and December 31, 2015 consisted of the following: Deferred Tax Assets March 31, 2016 December 31, 2015 Net Operating Loss Carry-forward $ 10,022,175 $ 9,924,492 Deferred Tax Liabilities (821,931 ) (795,805 ) Net Deferred Tax Assets 9,200,244 9,128,687 Valuation Allowance (9,200,244 ) (9,128,687 ) Total Net Deferred Tax Assets $ - $ - |
Lease Obligations (Tables)
Lease Obligations (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Leases [Abstract] | |
Schedule of Future Minimum Lease Payments for Capital Leases | Future lease payments are: 2016 $ 8,828 2017 14,382 2018 12,031 2019 8,551 2020 1,975 $ 45,767 |
Derivative Financial Instrume33
Derivative Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Liabilities at Fair Value | 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. 3 Months Ended March 31, 2016 Year Ended December. 31, 2015 Volatility 91% 87% - 171% Risk Free Rate .21% .1% - 1.75% Expected Term (years) 0 – 1.05 0 - 3 Dividend Rate 0% 0% |
Organizational and Significan34
Organizational and Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Number of shares retains for noncontrolling interest | 900,000 | |
Antidilutive securities excluded from computation of earnings per share | 13,800,000 | 15,200,000 |
Research and development expense | $ 34,693 | $ 106,927 |
Cyclone Performance [Member] | ||
Equity method investment, ownership percentage | 95.00% | |
WHE Subsidiary [Member] | ||
Equity method investment, ownership percentage | 20.00% |
Organizational and Significan35
Organizational and Significant Accounting Policies - Schedule of Fair Value of Financial Instrument (Details) | 3 Months Ended |
Mar. 31, 2016USD ($) | |
Derivative liabilities, Beginning of Period | $ 383,482 |
Derivative liabilities, End of Period | 381,161 |
Fair Value, Inputs, Level 3 [Member] | |
Derivative liabilities, Beginning of Period | 383,482 |
Derivative liabilities, Change | (2,321) |
Derivative liabilities, End of Period | $ 381,161 |
Derivative liabilities, Valuation Methodology | Stochastic Process Forecasting Model |
Organizational and Significan36
Organizational and Significant Accounting Policies - Schedule of Estimated Useful Lives of Property and Equipment (Details) | 12 Months Ended |
Dec. 31, 2015 | |
Display Equipment for Trade Shows [Member] | |
Property and equipment estimated useful lives | 3 years |
Leasehold Improvements and Furniture and Fixtures [Member] | Minimum [Member] | |
Property and equipment estimated useful lives | 10 years |
Leasehold Improvements and Furniture and Fixtures [Member] | Maximum [Member] | |
Property and equipment estimated useful lives | 15 years |
Shop Equipment [Member] | |
Property and equipment estimated useful lives | 7 years |
Computers [Member] | |
Property and equipment estimated useful lives | 3 years |
Going Concern (Details Narrativ
Going Concern (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2016 | Dec. 31, 2015 | |
Income (loss) from operating and other losses and expenses | $ 300,000 | $ 1,500,000 |
Accumulated deficit | 58,988,346 | 58,727,736 |
Working capital deficit | 2,600,000 | |
Attributable to Operating Losses [Member] | ||
Accumulated deficit | 26,728,483 | 26,473,744 |
Attributable to Non Cash Derivative Liability Accounting [Member] | ||
Accumulated deficit | $ 32,259,863 | $ 32,253,992 |
Inventory, Net - Schedule of In
Inventory, Net - Schedule of Inventory, Net (Details) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Inventory Disclosure [Abstract] | ||
Raw material | $ 323,224 | $ 323,508 |
Work in process | 14,735 | 0 |
Total | $ 337,959 | $ 323,508 |
Property and Equipment, Net (De
Property and Equipment, Net (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
PROPERTY AND EQUIPMENT | ||
Depreciation expense | $ 8,372 | $ 9,247 |
Property and Equipment, Net - S
Property and Equipment, Net - Schedule of Property and Equipment, Net (Details) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Property and equipment gross | $ 302,770 | $ 304,569 |
Accumulated depreciation | (184,981) | (178,049) |
Net property and equipment | 117,789 | 126,520 |
Display Equipment for Trade Shows [Member] | ||
Property and equipment gross | 6,270 | 6,270 |
Leasehold Improvements and Furniture and Fixtures [Member] | ||
Property and equipment gross | 93,922 | 93,922 |
Equipment and Computers [Member] | ||
Property and equipment gross | $ 202,578 | $ 204,377 |
Patents, Trademarks and Copyr41
Patents, Trademarks and Copyrights (Details Narrative) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2016USD ($)Patents | Mar. 31, 2015USD ($) | Dec. 31, 2015USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Net patents, trademarks and copyrights | $ 274,447 | $ 283,368 | |
Patents, trademarks and copyrights capitalized | $ 0 | $ 0 | |
Number of patents | Patents | 15 | ||
Finite-lived intangible asset, useful life | 15 years | ||
Amortization expenses | $ 8,921 | $ 9,831 |
Notes and Other Loans Payable42
Notes and Other Loans Payable (Details Narrative) - Schoell Marine [Member] | 1 Months Ended |
Jun. 30, 2015USD ($) | |
Principal Forgiveness [Member] | |
Debt forgave amount | $ 350,000 |
Accrued Interest Forgiveness [Member] | |
Debt forgave amount | $ 250,000 |
Notes and Other Loans Payable -
Notes and Other Loans Payable - Schedule of Non-related Party Notes and Other Loans Payable (Details) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 | |
Total non related party notes -net of discount | $ 422,930 | $ 407,737 | |
Less-Current Portion | 422,930 | 357,737 | |
Total non-current non related party | 50,000 | ||
12% Convertible Notes Payable [Member] | |||
Total non related party notes -net of discount | [1] | 39,465 | 34,558 |
10% Convertible Notes Payable [Member] | |||
Total non related party notes -net of discount | [2] | 19,963 | 19,963 |
10% One Convertible Notes Payable [Member] | |||
Total non related party notes -net of discount | [3] | 76,000 | 72,793 |
10% Two Convertible Notes Payable [Member] | |||
Total non related party notes -net of discount | [4] | 29,303 | 29,223 |
10% Three Convertible Notes Payable [Member] | |||
Total non related party notes -net of discount | [5] | 116,200 | 116,200 |
12% One Convertible Notes Payable [Member] | |||
Total non related party notes -net of discount | [6] | 85,000 | 85,000 |
10% Note Payable [Member] | |||
Total non related party notes -net of discount | 50,000 | 50,000 | |
10% Note Payable One [Member] | |||
Total non related party notes -net of discount | $ 7,000 | ||
[1] | Notes issued net of 10% original discount along with additional discount from derivative liabilities ($3,489 unamortized at March 31, 2016). This note is in default. | ||
[2] | Note issued net of original discount (fully amortized) Effective May 8, 2015, the Company is subject to a default judgment of approximately $175,000, plus subsequent penalty interest for non-payment of convertible debt and interest. The Company is negotiating a reduced settlement. Unpaid interest, default penalties and default interest is included in accounts payable and accrued liabilities. | ||
[3] | Notes issued net of discount from derivative liabilities (fully amortized). At March 31, 2016, the Company held approximately 97 million shares in reserve to cover the potential conversion of this note into common stock pursuant to debt covenants. This note is in default. | ||
[4] | Notes issued net of discount (fully amortized) This note is in default. | ||
[5] | Notes issued net of discount from derivative liabilities (fully amortized). At March 31, 2016, the Company held 233.3 million shares in reserve to cover the potential conversion of this note into common stock pursuant to debt covenants. This note is in default. | ||
[6] | Notes issued net of discount from derivative liabilities (fully amortized at March 31, 2015). The Company is subject to litigation judgement of approximately $150,000, plus subsequent penalty interest for non-payment. Company is seeking to arrange a settlement. Unpaid interest, default penalties and default interest is included in accounts payable and accrued liabilities. |
Notes and Other Loans Payable44
Notes and Other Loans Payable - Schedule of Non-related Party Notes and Other Loans Payable (Details) (Parenthetical) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2016 | Dec. 31, 2015 | |
12% Convertible Notes Payable [Member] | ||
Convertible notes payable, maturity date description | November 2013 through April 2016 | November 2013 through April 2016 |
12% Convertible Notes Payable [Member] | Derivative Liabilities [Member] | ||
Convertible notes payable, net of discounts | $ 3,489 | |
Original discount rate | 10.00% | |
10% Convertible Notes Payable [Member] | ||
Convertible notes payable, maturity date description | December 2013 through July 2014 | December 2013 through July 2014 |
10% Convertible Notes Payable [Member] | Derivative Liabilities [Member] | ||
Payments for legal settlements | $ 175,000 | |
10% One Convertible Notes Payable [Member] | ||
Convertible notes payable, maturity date description | May 2015 through February 2016 | May 2015 through February 2016 |
10% One Convertible Notes Payable [Member] | Derivative Liabilities [Member] | ||
Conversion of debt shares converted | 97,000,000 | |
10% Two Convertible Notes Payable [Member] | ||
Convertible notes payable, maturity date description | December 2015 through January 2016 | December 2015 through January 2016 |
10% Three Convertible Notes Payable [Member] | ||
Convertible notes payable, maturity date description | February 2015 through August 2015 | February 2015 through August 2015 |
10% Three Convertible Notes Payable [Member] | Derivative Liabilities [Member] | ||
Conversion of debt shares converted | 233,300,000 | |
12% One Convertible Notes Payable [Member] | ||
Convertible notes payable, maturity date description | April 2015 through May 2015 | April 2015 through May 2015 |
12% One Convertible Notes Payable [Member] | Derivative Liabilities [Member] | ||
Payments for legal settlements | $ 150,000 | |
10% Note Payable [Member] | ||
Note payable maturity date | Feb. 3, 2017 | Feb. 3, 2017 |
10% Note Payable One [Member] | ||
Note payable maturity date | Oct. 15, 2016 | Oct. 15, 2016 |
Notes and Other Loans Payable45
Notes and Other Loans Payable - Schedule of Related Party Notes and Other Loans Payable (Details) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 | |
Total current related party notes, inclusive of accrued interest | $ 385,511 | $ 321,334 | |
Six Percent Demand Loans Per Operations Agreement With Schoell Marine Inc [Member] | |||
Total current related party notes, inclusive of accrued interest | [1] | 171,656 | 117,734 |
Six Percent Non-collateralized Loans from Officer and Shareholder [Member] | |||
Total current related party notes, inclusive of accrued interest | 109,154 | 103,328 | |
Twelve Percent Non-collateralized Loans from Officer and Shareholder [Member] | |||
Total current related party notes, inclusive of accrued interest | 20,179 | 20,178 | |
Accrued Interest [Member] | |||
Total current related party notes, inclusive of accrued interest | $ 84,522 | $ 80,094 | |
[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. For the three months ended March 31, 2016 $500 of principal was paid on the note balance. |
Notes and Other Loans Payable46
Notes and Other Loans Payable - Schedule of Related Party Notes and Other Loans Payable (Details) (Parenthetical) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Dec. 31, 2015 | |
Debt instrument principal payment | $ 500 | |
Six Percent Non-collateralized Loans from Officer and Shareholder [Member] | ||
Original principal balances | $ 157,101 | $ 157,101 |
Schoell Marine [Member] | ||
Debt instrument note bears an interest rate | 6.00% |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) | 3 Months Ended | |||
Mar. 31, 2016USD ($)ft² | Mar. 31, 2015USD ($) | Dec. 31, 2015USD ($) | Jun. 30, 2015USD ($) | |
Related Party Transactions [Abstract] | ||||
Area of warehouse and office | ft² | 6,000 | |||
Payment for rent | $ 60,000 | |||
Lease renewal term | 1 year | |||
Number of option increasing rate, percentage | 2.00% | |||
Occupancy costs | $ 15,900 | $ 15,000 | ||
Accounts payable and accrued expenses - related parties | $ 206,250 | $ 137,500 | ||
Deferred compensation | $ 612,500 |
Preferred Stock (Details Narrat
Preferred Stock (Details Narrative) | 3 Months Ended |
Mar. 31, 2016shares | |
Voting control percentage | 51.00% |
Series B Preferred Stock [Member] | |
Preferred stock, shares outstanding | 1,000 |
Stock Transactions (Details Nar
Stock Transactions (Details Narrative) | 3 Months Ended |
Mar. 31, 2016USD ($) | |
Equity [Abstract] | |
Amortized common stock options based on vesting | $ 385 |
Stock Options and Warrants (Det
Stock Options and Warrants (Details Narrative) | 3 Months Ended |
Mar. 31, 2016USD ($)$ / sharesshares | |
Share-based compensation arrangement by share-based payment award, options, grants in period, gross | shares | 450,000 |
Share-based compensation arrangements by share-based payment award, options, grants in period, weighted average exercise price (in dollars per share) | $ / shares | $ 0.002 |
Share-based compensation | $ 385 |
Employee service share-based compensation, nonvested awards, compensation cost not yet recognized | $ 1,702 |
Employment Contracts [Member] | Officers [Member] | |
Share-based compensation arrangement by share-based payment award, options, grants in period, gross | shares | 450,000 |
Stock options issued during period, value | $ 855 |
Share-based compensation arrangements by share-based payment award, options, grants in period, weighted average exercise price (in dollars per share) | $ / shares | $ 0.0019 |
Stock options issued during period, maturity life | 10 years |
Stock Options and Warrants - Sc
Stock Options and Warrants - Schedule of Common Stock Option (Details) | 3 Months Ended |
Mar. 31, 2016$ / sharesshares | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Number Outstanding, Balance | shares | 12,380,000 |
Number Outstanding, Options issued | shares | 450,000 |
Number Outstanding, Options exercised | shares | |
Number Outstanding, Options Expired | shares | (150,000) |
Number Outstanding, Balance | shares | 12,680,000 |
Weighted Avg Exercise Price, Balance | $ / shares | $ 0.123 |
Weighted Avg Exercise Price, Options issued | $ / shares | 0.002 |
Weighted Avg Exercise Price, Options exercised | $ / shares | |
Weighted Avg Exercise Price, Options Expired | $ / shares | (.098) |
Weighted Avg Exercise Price, Balance | $ / shares | $ 0.106 |
Weighted Avg Remaining Contractual Life (Years), Beginning Balance | 6 years |
Weighted Avg Remaining Contractual Life (years), Ending Balance | 5 years 9 months 18 days |
Stock Options and Warrants - 52
Stock Options and Warrants - Schedule of Vested and Exercisable Options (Details) - $ / shares | 3 Months Ended | 6 Months Ended |
Mar. 31, 2016 | Jun. 30, 2016 | |
Exercisable/Vested Options Outstanding | 11,030,000 | |
Weighted Avg Exercise Price | $ 0.128 | |
Weighted Avg Remaining Contractual Life (Years) | 5 years 1 month 6 days | |
Additional vesting by June 30, 2016 [Member] | ||
Exercisable/Vested Options Outstanding | 450,000 | |
Weighted Avg Exercise Price | $ 0.0003 | |
Weighted Avg Remaining Contractual Life (Years) | 9 years |
Stock Options and Warrants - 53
Stock Options and Warrants - Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions (Details) - $ / shares | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Risk free interest rate | 0.21% | ||
Expected volatility | 91.00% | ||
Expected dividend yield | 0.00% | 0.00% | |
Stock Options And Purchase Warrants [Member] | |||
Risk free interest rate | 0.87% | 0.89% | |
Expected volatility | 136.00% | 102.00% | |
Expected term | 3 years | 3 years | |
Expected dividend yield | 0.00% | 0.00% | |
Average value per options and warrants | $ .0019 | $ 0.0003 |
Stock Options and Warrants - 54
Stock Options and Warrants - Schedule of Outstanding Vested Warrant Activity (Details) | 3 Months Ended |
Mar. 31, 2016$ / sharesshares | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Number Outstanding, Balance | shares | 1,125,000 |
Number Outstanding, Warrants exercised-cashless | shares | |
Number Outstanding, Warrants issued | shares | |
Number Outstanding, Warrants expired | shares | |
Number Outstanding, Warrants cancelled | shares | |
Number Outstanding, Balance | shares | 1,125,000 |
Weighted Average Exercise Price, Balance | $ / shares | $ .042 |
Weighted Average Exercise Price, Warrants exercised-cashless | $ / shares | |
Weighted Average Exercise Price, Warrants issued | $ / shares | |
Weighted Average Exercise Price, Warrants expired | $ / shares | |
Weighted Average Exercise Price, Warrants cancelled | $ / shares | |
Weighted Average Exercise Price, Balance | $ / shares | $ .042 |
Weighted Average Remaining Contractual Life (Years), Beginning Balance | 2 years 18 days |
Weighted Average Remaining Contractual Life (years), Ending Balance | 10 months 28 days |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) | 3 Months Ended |
Mar. 31, 2016USD ($) | |
Operating loss carryforwards | $ 21,600,000 |
Operating loss carryforwards expiration date | 2,031 |
Minimum [Member] | |
Percentage that carry forwards will expire unused | 50.00% |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||
Tax benefit at U.S. statutory rate | 34.00% | 34.00% |
Tax benefit at U.S. statutory rate | $ 64,026 | $ 143,606 |
State taxes, net of federal benefit | 4.00% | 4.00% |
State taxes, net of federal benefit | $ 7,532 | $ 16,895 |
Change in valuation allowance | (38.00%) | (38.00%) |
Change in valuation allowance | $ (71,558) | $ (160,501) |
Effective Income Tax Rate Reconciliation, Percent | ||
Income Tax Expense (Benefit) |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Income Tax Disclosure [Abstract] | ||
Net Operating Loss Carry-forward | $ 10,022,175 | $ 9,924,492 |
Deferred Tax Liabilities | (821,931) | (795,805) |
Net Deferred Tax Assets | 9,200,244 | 9,128,687 |
Valuation Allowance | (9,200,244) | (9,128,687) |
Total Net Deferred Tax Assets |
Lease Obligations (Details Narr
Lease Obligations (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Leases [Abstract] | |||
Repayments of long-term capital lease obligations | $ 4,122 | $ 1,370 | |
Capital lease obligations | $ 45,767 | $ 49,889 |
Lease Obligations - Schedule of
Lease Obligations - Schedule of Future Minimum Lease Payments for Capital Leases (Details) | Mar. 31, 2016USD ($) |
Leases [Abstract] | |
2,016 | $ 8,828 |
2,017 | 14,382 |
2,018 | 12,031 |
2,019 | 8,551 |
2,020 | 1,975 |
Total | $ 45,767 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) | 3 Months Ended |
Mar. 31, 2016USD ($) | |
Employment agreements, initial term of employment | 3 years |
Automatic renewing period of employment agreements | 1 year |
Harry Schoell Chairman And CTO [Member] | |
Employment agreements, officer salary | $ 150,000 |
Frankie Fruge COO [Member] | |
Employment agreements, officer salary | $ 120,000 |
Consolidated Subsidiary (Detail
Consolidated Subsidiary (Details Narrative) - USD ($) | 3 Months Ended | |
Dec. 31, 2012 | Mar. 31, 2016 | |
Cumulative unallocated losses to non-controlling interest of subsidiary | $ 953 | |
Unrelated Investor [Member] | ||
Noncontrolling interest, ownership percentage by noncontrolling owners | 5.00% | |
Proceeds from issuance or sale of equity | $ 30,000 | |
Corporate Officer[Member] | ||
Noncontrolling interest, ownership percentage by noncontrolling owners | 5.00% | |
Cyclone Performance [Member] | ||
Percentage of ownership in a consolidated subsidiary | 100.00% |
Receivables, Deferred Revenue62
Receivables, Deferred Revenue and Backlog (Details Narrative) | 3 Months Ended |
Mar. 31, 2016USD ($) | |
Customer advance and deposits | $ 25,000 |
Payment of contract for engines | 80,000 |
Customer contributed | 5,700 |
Combilift Agreement [Member] | |
Backlog for prototype engines purchased | 400,000 |
Deferred revenue | $ 100,000 |
Derivative Financial Instrume63
Derivative Financial Instruments (Details Narrative) | 3 Months Ended | ||
Mar. 31, 2016USD ($)Integer | Mar. 31, 2015USD ($) | Dec. 31, 2015USD ($) | |
Non-cash charge to interest expense | $ 8,193 | $ 78,861 | |
Derivative gains related to adjusting the derivative liability | 2,321 | ||
Derivative Liability | $ 381,161 | $ 383,482 | |
Minimum [Member] | |||
Debt instrument convertible price | 30.00% | ||
Debt instrument trading days | Integer | 10 | ||
Maximum [Member] | |||
Debt instrument convertible price | 45.00% | ||
Debt instrument trading days | Integer | 20 |
Derivative Financial Instrume64
Derivative Financial Instruments - Schedule of Derivative Liabilities at Fair Value (Details) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2016 | Dec. 31, 2015 | |
Volatility | 91.00% | |
Risk Free Rate | 0.21% | |
Dividend Rate | 0.00% | 0.00% |
Minimum [Member] | ||
Volatility | 87.00% | |
Risk Free Rate | 0.10% | |
Expected Term (years) | 0 years | 0 years |
Maximum [Member] | ||
Volatility | 171.00% | |
Risk Free Rate | 1.75% | |
Expected Term (years) | 1 year 18 days | 3 years |
Litigation (Details Narrative)
Litigation (Details Narrative) - USD ($) | May 08, 2015 | Aug. 31, 2015 |
Litigation | ||
Litigation settlement amount | $ 175,000 | $ 150,000 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | 6 Months Ended | |||
Jun. 30, 2016 | Sep. 01, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | |
Raised authorized common stock | 4,000,000,000 | 4,000,000,000 | ||
Subsequent Event [Member] | ||||
Number of common stock issued for services | 3,000,000 | |||
Number of common stock issued for services, value | $ 6,000 | |||
Raised authorized common stock | 4,000,000,000 | |||
Subsequent Event [Member] | Q 2 Power Technologies [Member] | ||||
Sold all of investment | 44,000 | |||
Investments ralized gain loss | $ 662,844 | |||
Subsequent Event [Member] | Convertible Debt [Member] | ||||
Number of shares issued for conversion of debt | 45,700,000 | |||
Number of shares issued for conversion of debt, value | $ 82,000 | |||
Subsequent Event [Member] | Convertible Debt One [Member] | ||||
Number of shares issued for conversion of debt | 80,000,000 | |||
Number of shares issued for conversion of debt, value | $ 216,000 |