Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Jul. 27, 2017 | |
Document And Entity Information | ||
Entity Registrant Name | CYCLONE POWER TECHNOLOGIES INC | |
Entity Central Index Key | 1,442,711 | |
Document Type | 10-K | |
Document Period End Date | Dec. 31, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Well-known Seasoned Issuer | No | |
Entity Voluntary Filer | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Public Float | $ 2,100,000 | |
Entity Common Stock, Shares Outstanding | 1,753,246,329 | |
Trading Symbol | CYPW | |
Document Fiscal Period Focus | FY | |
Document Fiscal Year Focus | 2,016 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 |
CURRENT ASSETS | |||||
Cash | $ 591 | $ 1,387 | $ 14,861 | ||
Inventory, net | 26,667 | 407,515 | 349,513 | 337,959 | 323,508 |
Other current assets | 193 | 1,400 | 250 | 587 | 587 |
Total current assets | 27,451 | 410,302 | 364,624 | 338,546 | 324,095 |
PROPERTY AND EQUIPMENT | |||||
Furniture, fixtures, and equipment | 302,770 | 302,770 | 302,770 | 302,770 | 304,569 |
Accumulated depreciation | (209,498) | (202,153) | (193,577) | (184,981) | (178,049) |
Net property and equipment | 93,272 | 100,617 | 109,193 | 117,789 | 126,520 |
OTHER ASSETS | |||||
Patents, trademarks and copyrights | 394,980 | 539,446 | 539,446 | 539,446 | 539,446 |
Accumulated amortization | (216,502) | (282,414) | (273,622) | (264,999) | (256,078) |
Net patents, trademarks and copyrights | 178,478 | 257,032 | 265,824 | 274,447 | 283,368 |
Other assets | 7,862 | 8,062 | 8,062 | 8,062 | 8,062 |
Total other assets | 186,340 | 265,094 | 273,886 | 282,509 | 291,430 |
Total Assets | 307,063 | 776,013 | 747,703 | 738,844 | 742,045 |
CURRENT LIABILITIES | |||||
Bank overdraft | 3,068 | 3,221 | |||
Accounts payable and accrued expenses | 1,472,851 | 1,264,939 | 1,337,627 | 1,253,933 | 1,159,133 |
Accounts payable and accrued expenses-related parties | 545,225 | 461,475 | 377,725 | 293,975 | 210,225 |
Notes and other loans payable-current portion | 512,642 | 508,642 | 424,917 | 422,930 | 357,737 |
Derivative liabilities | 754,000 | 380,162 | 380,705 | 381,161 | 383,482 |
Notes and other loans payable-related parties | 393,760 | 391,132 | 385,304 | 385,511 | 321,334 |
Capitalized lease obligations-current portion | 14,312 | 14,052 | 13,916 | 13,426 | 12,950 |
Deferred revenue and license deposits | 323,826 | 263,826 | 188,826 | 153,731 | 148,031 |
Total current liabilities | 4,016,616 | 3,284,228 | 3,109,020 | 2,907,735 | 2,596,113 |
NON CURRENT LIABILITIES | |||||
Capitalized lease obligations-net of current portion | 25,536 | 26,909 | 28,219 | 32,341 | 36,939 |
Notes and other loans payable-net of current portion | 50,000 | ||||
Total non-current liabilities | 25,536 | 26,909 | 28,219 | 32,341 | 86,939 |
Total Liabilities | 4,042,152 | 3,311,137 | 3,137,239 | 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 December 31, 2016, December 31, 2015 and March 31, 2016, respectively. | |||||
Common stock, $.0001 par value, 4,000,000,000 shares authorized, 1,517,400,273 and 1,388,669,532 shares issued and outstanding at December 31, 2016, March 31, 2016 and December 31, 2015, September 30, 2016 respectively 1,437,400,273 shares issued and outstanding at June 30, 2016. | 151,737 | 151,738 | 143,738 | 138,864 | 138,864 |
Additional paid-in capital | 56,915,794 | 56,914,961 | 56,706,255 | 56,622,211 | 56,621,826 |
Treasury Stock, 317,000 shares, at December 31, 2016, December 31, 2015 respectively, at cost. | (3,000) | 3,000 | 3,000 | (3,000) | (3,000) |
Accumulated deficit | (60,828,659) | (59,627,862) | (59,265,568) | (58,988,346) | (58,727,736) |
Total stockholders' deficit - Cyclone Power Technologies Inc. | (3,764,128) | (2,564,163) | (2,418,575) | (2,230,271) | (1,970,046) |
Non controlling interest in consolidated subsidiaries | 29,039 | 29,039 | 29,039 | 29,039 | 29,039 |
Total Stockholders' Deficit | (3,735,089) | (2,535,124) | (2,389,536) | (2,201,232) | (1,941,007) |
Total Liabilities and Stockholders' Deficit | $ 307,063 | $ 776,013 | $ 747,703 | $ 738,844 | $ 742,045 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | |||||
Preferred stock, par value | $ .0001 | $ 0.0001 | $ .0001 | ||
Preferred stock, shares authorized | 1,000 | 1,000 | 1,000 | ||
Preferred stock, shares issued | 1,000 | 1,000 | 1,000 | ||
Preferred stock, shares outstanding | 1,000 | 1,000 | 1,000 | ||
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 4,000,000,000 | 4,000,000,000 | 4,000,000,000 | 4,000,000,000 | 4,000,000,000 |
Common stock, shares issued | 1,517,400,273 | 1,517,400,273 | 1,437,400,273 | 1,388,669,532 | 1,388,669,532 |
Common stock, shares outstanding | 1,517,400,273 | 1,517,400,273 | 1,437,400,273 | 1,388,669,532 | 1,388,669,532 |
Treasury stock, shares | 317,000 | 317,000 | 317,000 | 317,000 | 317,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||
Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Statement [Abstract] | ||||||||||||
REVENUES | ||||||||||||
COST OF GOODS SOLD | ||||||||||||
Gross profit | ||||||||||||
OPERATING EXPENSES | ||||||||||||
Advertising and promotion expenses | 2,147 | 548 | 5,291 | 2,500 | 180 | 254 | 5,839 | 434 | 7,986 | 2,934 | 8,166 | 7,434 |
General and administrative | ||||||||||||
Retirement of patents | 69,782 | 28,530 | ||||||||||
Other general and administrative | 897,924 | 624,573 | ||||||||||
Total general and administrative | 269,801 | 194,890 | 190,619 | 125,227 | 129,435 | 271,579 | 385,509 | 401,014 | 655,309 | 526,241 | 967,706 | 653,103 |
Research and development | ||||||||||||
Inventory reserve provision | 125,900 | 192,000 | ||||||||||
Other research and development | 478,299 | 275,610 | ||||||||||
Total research and development | 57,977 | 39,157 | 34,693 | 103,605 | 81,237 | 106,927 | 73,850 | 188,164 | 131,827 | 291,769 | 604,199 | 467,610 |
Total operating expenses | 329,925 | 234,595 | 230,603 | 231,332 | 210,852 | 378,760 | 465,198 | 589,612 | 795,122 | 820,944 | 1,580,071 | 1,128,147 |
Operating loss | (329,925) | (234,595) | (230,603) | (231,332) | (210,852) | (378,760) | (465,198) | (589,612) | (795,122) | (820,944) | (1,580,071) | (1,128,147) |
Other income (expense) | ||||||||||||
Other income and (expense) | (13,469) | 500 | (50,000) | (12,969) | (50,000) | (12,968) | (50,000) | (8,883) | (50,000) | |||
Derivative income (expense) | 543 | 456 | 2,321 | (595) | 6,843 | (17,654) | 2,777 | (10,811) | 3,320 | (11,406) | (370,519) | 56,702 |
Interest (expense) | (32,914) | (29,614) | (32,828) | (65,269) | (86,631) | (141,223) | (62,442) | (227,854) | (95,356) | (293,123) | (141,450) | (348,858) |
Total other income (expense) | (32,371) | (42,627) | (30,007) | (65,864) | (79,788) | (208,877) | (72,634) | (288,665) | (105,004) | (354,529) | (520,852) | (342,156) |
Loss before income taxes | (362,296) | (277,222) | (260,610) | (297,196) | (290,640) | (587,637) | (537,832) | (878,277) | (900,126) | (1,175,473) | (2,100,923) | (1,470,303) |
Income taxes | ||||||||||||
Net loss | $ (362,296) | $ (277,222) | $ (260,610) | $ (297,196) | $ (290,640) | $ (587,637) | $ (537,832) | $ (878,277) | $ (900,126) | $ (1,175,473) | $ (2,100,923) | $ (1,470,303) |
Net loss per common share, basic and diluted | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 |
Weighted average number of common shares outstanding basic and diluted | 1,445,400,243 | 1,403,288,754 | 1,388,669,532 | 1,346,156,963 | 353,877,991 | 972,124,660 | 1,393,890,683 | 1,082,119,889 | 1,403,414,280 | 1,145,656,355 | 1,416,738,836 | 1,189,240,307 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Deficit - USD ($) | Preferred Stock B [Member] | Common Stock [Member] | Additional Paid In Capital [Member] | Treasury Stock [Member] | Prepaid Expenses Via Common Stock [Member] | Preferred Stock Subscription Receivable [Member] | Accumulated (Deficit) [Member] | Stockholders' (Deficit) Cyclone Power Tech. Inc. [Member] | Noncontrolling Interest In Consol. Subsidiaries [Member] | Total |
Balance at Dec. 31, 2014 | $ 86,129 | $ 55,026,213 | $ (28,459) | $ (6,000) | $ (57,257,441) | $ (2,179,558) | $ 29,047 | $ (2,150,511) | ||
Balance, shares at Dec. 31, 2014 | 1,000 | 861,315,576 | ||||||||
Issuance of options for employee services | 2,526 | 2,526 | 2,526 | |||||||
Forgiveness of officers accrued salaries | 655,225 | 655,225 | 655,225 | |||||||
Forgiveness of accrued rent, interest & other expenses due an officer's company | 710,272 | 710,272 | 710,272 | |||||||
Forgiveness of employees accrued salaries | 18,970 | 18,970 | 18,970 | |||||||
Repayment of debt and interest with common stock | $ 42,485 | 88,370 | 130,855 | $ 130,855 | ||||||
Repayment of debt and interest with common stock, shares | 424,853,956 | 424,853,956 | ||||||||
Repayment of liabilities in common stock | $ 9,250 | 57,250 | 66,500 | $ 66,500 | ||||||
Repayment of liabilities in common stock, shares | 92,500,000 | |||||||||
Loss on debt paid with common stock | 50,000 | 50,000 | 50,000 | |||||||
Cancellation of stock subscription receivable | (3,000) | 3,000 | ||||||||
Write-off of stock subscription receivable | 3,000 | 3,000 | 3,000 | |||||||
Repayment of shares loaned by stockholder | $ 1,000 | 13,000 | 14,000 | 14,000 | ||||||
Repayment of shares loaned by stockholder, shares | 10,000,000 | |||||||||
Allocation of loses of subsidiaries to non controlling interests | 8 | 8 | (8) | |||||||
Amortization of expenses prepaid with common stock | 28,459 | 28,459 | 28,459 | |||||||
Net loss | (1,470,303) | (1,470,303) | (1,470,303) | |||||||
Balance at Dec. 31, 2015 | $ 138,864 | 56,621,826 | (3,000) | (58,727,736) | (1,970,046) | 29,039 | (1,941,007) | |||
Balance, shares at Dec. 31, 2015 | 1,000 | 1,388,669,532 | ||||||||
Loss on debt paid with common stock | ||||||||||
Net loss | (260,610) | |||||||||
Balance at Mar. 31, 2016 | (2,201,232) | |||||||||
Balance at Dec. 31, 2015 | $ 138,864 | 56,621,826 | (3,000) | (58,727,736) | (1,970,046) | 29,039 | (1,941,007) | |||
Balance, shares at Dec. 31, 2015 | 1,000 | 1,388,669,532 | ||||||||
Loss on debt paid with common stock | (57,383) | |||||||||
Net loss | (537,832) | |||||||||
Balance at Jun. 30, 2016 | (2,389,536) | |||||||||
Balance at Dec. 31, 2015 | $ 138,864 | 56,621,826 | (3,000) | (58,727,736) | (1,970,046) | 29,039 | (1,941,007) | |||
Balance, shares at Dec. 31, 2015 | 1,000 | 1,388,669,532 | ||||||||
Loss on debt paid with common stock | (57,383) | |||||||||
Net loss | (900,126) | |||||||||
Balance at Sep. 30, 2016 | (2,535,124) | |||||||||
Balance at Dec. 31, 2015 | $ 138,864 | 56,621,826 | (3,000) | (58,727,736) | (1,970,046) | 29,039 | (1,941,007) | |||
Balance, shares at Dec. 31, 2015 | 1,000 | 1,388,669,532 | ||||||||
Issuance of options for employee services | 2,526 | 2,526 | 2,526 | |||||||
Repayment of debt and interest with common stock | ||||||||||
Repayment of liabilities in common stock | $ 12,573 | 228,359 | 240,932 | 240,932 | ||||||
Repayment of liabilities in common stock, shares | 125,730,741 | |||||||||
Loss on debt paid with common stock | 57,383 | 57,383 | 57,383 | |||||||
Write-off of stock subscription receivable | ||||||||||
Issuance of common stock for services | $ 300 | 5,700 | 6,000 | $ 6,000 | ||||||
Issuance of common stock for services, shares | 3,000,000 | 3,000,000 | ||||||||
Net loss | (2,100,923) | (2,100,923) | $ (2,100,923) | |||||||
Balance at Dec. 31, 2016 | $ 151,737 | $ 56,915,794 | $ (3,000) | $ (60,828,659) | $ (3,764,128) | $ 29,039 | (3,735,089) | |||
Balance, shares at Dec. 31, 2016 | 1,000 | 1,517,400,273 | ||||||||
Balance at Mar. 31, 2016 | (2,201,232) | |||||||||
Net loss | (277,222) | |||||||||
Balance at Jun. 30, 2016 | (2,389,536) | |||||||||
Net loss | (362,296) | |||||||||
Balance at Sep. 30, 2016 | $ (2,535,124) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Mar. 31, 2016 | Mar. 31, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net loss | $ (260,610) | $ (587,637) | $ (537,832) | $ (878,277) | $ (900,126) | $ (1,175,473) | $ (2,100,923) | $ (1,470,303) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Depreciation and amortization | 17,653 | 19,078 | 34,872 | 38,031 | 52,240 | 56,810 | 68,357 | 75,574 |
Provision for inventory reserve | 125,900 | 192,000 | ||||||
Issuance of restricted common stock, options and warrants for services | 62,084 | 987 | 62,953 | 1,693 | 63,377 | 2,526 | 2,526 | |
Loss on debt paid with common stock | 50,000 | 57,383 | 50,000 | 57,383 | 50,000 | (57,383) | (50,000) | |
Amortization of prepaid interest expenses via common stock & warrants | 28,459 | 6,000 | 6,000 | |||||
(Gain) loss from derivative liability-notes payable | (2,321) | 17,654 | (2,777) | 10,811 | (3,320) | 11,406 | 370,519 | (56,702) |
Amortization of derivative debt discount | 8,193 | 78,861 | 11,680 | 132,531 | 11,680 | 157,507 | 11,680 | 174,043 |
Interest paid with common stock | 11,372 | 11,371 | 12,394 | |||||
Amortization of prepaid expenses via common stock & warrants | 385 | 28,459 | 28,459 | |||||
Loss on debt conversion via common stock | 57,383 | 50,000 | ||||||
Write-off of stock subscription receivables | 3,000 | |||||||
Amortization of prepaid expenses and interest via common stock | 28,459 | |||||||
Expenses paid with common stock | 6,000 | |||||||
Write-off of expired patents | 69,782 | 25,894 | ||||||
Loss on debt converson via common stock-net | ||||||||
Changes in operating assets and liabilities: | ||||||||
(Increase) decrease in inventory | (14,451) | (45,759) | (26,005) | (46,417) | (84,007) | 13,533 | 170,941 | (46,465) |
Increase (decrease) in other current assets | 15,116 | 337 | 15,240 | (813) | 15,365 | 594 | 15,576 | |
(Increase) in other assets | (5,387) | |||||||
Cash overdraft | (3,221) | 3,221 | ||||||
Decrease in cash overdraft | (153) | 0 | (3,221) | 1,228 | (3,221) | 3,027 | ||
Increase in accounts payable and accrued expenses | 94,799 | 177,782 | 203,521 | 226,286 | 251,250 | 315,437 | 554,744 | 483,129 |
Increase in accounts payable and accrued expenses-related parties | 83,750 | 83,750 | 167,500 | 186,470 | 346,833 | 361,522 | 335,000 | 306,275 |
Increase in deferred revenue and deposits | 5,700 | 40,700 | 25,000 | 115,700 | 25,403 | 175,700 | 25,404 | |
Net cash used by operating activities | (67,055) | (89,240) | (46,855) | (136,314) | (148,708) | (61,233) | (155,019) | (193,756) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Payment of capitalized lease obligations | (4,122) | (1,370) | (7,754) | (5,254) | (8,928) | (6,731) | (10,041) | (7,811) |
Proceeds from notes and loans payable | 7,000 | 50,000 | 7,000 | 50,000 | 90,725 | 50,000 | 94,725 | 50,000 |
Repayment of notes and loans payable | (1,500) | (1,500) | (1,500) | |||||
Increase in related party notes and loans payable-net | 64,177 | 40,339 | 63,970 | 91,290 | 69,798 | 17,686 | 72,426 | 151,289 |
Net cash provided by financing activities | 67,055 | 88,969 | 61,716 | 136,036 | 150,095 | 60,955 | 155,610 | 193,478 |
Net increase (decrease) in cash | (271) | 14,861 | (278) | 1,387 | (278) | 591 | (278) | |
Cash, beginning of year/period | 278 | 278 | 278 | 278 | ||||
Cash, end of year/period | 7 | 14,861 | 1,387 | 591 | ||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||||||
Payment of interest in cash | 1,603 | 10,869 | 3,379 | 11,372 | 4,232 | 13,836 | 14,491 | |
Payment of income tax in cash | ||||||||
NON CASH INVESTING AND FINANCING ACTIVITIES: | ||||||||
Issuance of 20,313,416 shares of Common stock for repayment of related party payables | 6,000 | |||||||
Issuance of 125,730,741 shares of Common stock for liabilities | 240,932 | |||||||
Issuance of 92,500,000 shares of Common stock for accrued expenses | 66,500 | |||||||
Issuance of 424,853,956 shares of Common stock for debt and interest repayment | 130,855 | |||||||
Value of shares repaid to stockholder | 14,000 | |||||||
Issuance of 40,000,000, 45,730,741 and 125,730,741 shares of Common stock for liability settlement | 14,000 | 24,932 | 14,000 | 240,932 | 14,000 | |||
Issuance of 5,250,000 shares of Common stock pursuant to prior year common stock price guarantees | 52,500 | 52,500 | 52,500 | |||||
Issuance of 328,161,744 and 328,707,198 shares of Common stock for debt repayment | 109,462 | 109,462 | 118,462 | |||||
Issuance of 35,959,970 and 42,146,758 shares of Common stock for debt interest | 11,372 | 11,372 | 12,392 | |||||
Issuance of 3,000,000 shares of Common stock for services | 6,000 | 6,000 | ||||||
Forgiveness of deferred officers' salaries | 655,225 | 655,225 | ||||||
Forgiveness of accrued rent, interest and other expenses due officer's company | $ 710,272 | $ 710,272 |
Consolidated Statements of Cas7
Consolidated Statements of Cash Flows (Parenthetical) - shares | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||
Mar. 31, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2016 | |
Related Party Payables [Member] | ||||||
Common stock issued, shares | 20,313,416 | |||||
Liabilities [Member] | ||||||
Common stock issued, shares | 125,730,741 | |||||
Accrued Expenses [Member] | ||||||
Common stock issued, shares | 92,500,000 | |||||
Debt and Interest Repayment [Member] | ||||||
Common stock issued, shares | 424,853,956 | |||||
Liability Settlement [Member] | ||||||
Common stock issued, shares | 40,000,000 | 45,730,741 | 40,000,000 | 125,730,741 | 40,000,000 | |
Price Guarantees [Member] | ||||||
Common stock issued, shares | 5,250,000 | 5,250,000 | 5,250,000 | |||
Debt Repayment [Member] | ||||||
Common stock issued, shares | 328,161,744 | 328,161,744 | 328,707,198 | |||
Debt Interest [Member] | ||||||
Common stock issued, shares | 35,959,970 | 35,959,970 | 42,146,758 | |||
Services [Member] | ||||||
Common stock issued, shares | 3,000,000 | 3,000,000 |
Organizational and Significant
Organizational and Significant Accounting Policies | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Organizational and Significant Accounting Policies | NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES A. 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 accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles (GAAP) applicable to interim financial information and the requirements of Form 10-Q and Article 8 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. We follow the same accounting policies in preparation of interim reports as we do in our annual reports. 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. We suggest that these financial statements be read in conjunction with the financial statements and notes thereto included in the Company's annual report for the year ended December 31, 2016. 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. | 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. Initiated in 2016, the Company’s current business model, is to be primarily a research and development engineering company whose main purpose is to develop, commercialize, market and license its Cyclone engine technology. Engines and related systems will be outsourced for manufacturing but the company will invoice customers. Our prior business model also included engine manufacturing. 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 various vehicles and vessels utilizing the Company’s engine. As of December 31, 2016 and 2015, 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 had sold most of its ownership and the balance was sold in the second quarter of 2016. B. PRINCIPLES OF CONSOLIDATION AND BASIS OF PRESENTATION The 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. Effective September 30, 2014, Cyclone sold most of its investment in the WHE Subsidiary and as of December 31, 2015 retained approximately a 2 million share non controlling (below 20%) interest in the WHE Subsidiary. This investment was deconsolidated on September 30, 2014 and the remaining investment was sold in the second quarter of 2016. 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. C. CASH Cash includes cash on hand and cash in banks. At December 31, 2016 and 2015, the Company maintained cash balances at one financial institution. D. COMPUTATION OF LOSS PER SHARE Net loss per share is computed by dividing the loss by the weighted average number of common shares outstanding during the period. Diluted 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 December 31, 2016 and 2015, total anti-dilutive shares amounted to approximately 14.5 million and 13.5 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, 2016, 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 not 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 2016. 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. Based on our revised R&D company business model, commencing in 2016, costs include only material to develop a completed engine. In our former business model 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 annual fair values and changing values of financial instruments as of January 1, 2015 through December 31 2015 and January 1, 2016 through December 31, 2016 is as follows: Instrument Beginning of Period Change End of Period Level Valuation Methodology Derivative liabilities 2015 $ 440,184 $ (56,706 ) $ 383,482 3 Stochastic Process Forecasting Model Derivative liabilities 2016 $ 383,482 $ 370,518 $ 754,000 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 years ended December 31, 2016 and 2015 were $604,199 and $467,610, respectively. K. STOCK BASED COMPENSATION The Company applies the fair value method of ASC 718, “ Share Based Payment 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” 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 March 2016, the FASB issued ASU 2016-09, Compensation-Stock Compensation: Improvements to Employee Share-Based Payment Accounting. This addresses the accounting for share-based payment transactions and includes the recognition of the income tax effects of awards that vest or settle as income tax expense and clarification of the presentation of certain components of share-based awards in the statement of cash flows. We are still in the process of evaluating the effect of adoption on our financial statements and the effective date of application is 2018. In March 2016, the FASB issued ASU 2016-06, “ Derivatives and Hedging (Topic 815): Contingent Put and Call Options in Debt Instruments (a consensus of the FASB Emerging Issues Task Force) In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230) Classification of Certain Cash Receipts and Cash Payments. This standard amends and adjusts how cash receipts and cash payments are presented and classified in the statement of cash flows. ASU 2016-15 ASU 2016-15 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 December 31, 2016, the Company maintained its cash in one quality financial institution. The Company has not experienced any losses in its bank accounts through December 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 | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Going Concern | 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 $.9 million for the nine months ended September 30, 2016 and the cumulative deficit since inception to September 30, 2016 is approximately $59.6 million,. The Company has a working capital deficit at September 30, 2016 of approximately $2.9 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 condensed consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties. The ability of the Company to continue as a going concern is dependent on management’s plans which include continuation of its business model to generate revenue from development contracts, licenses and product sales, and continuing to raise funds through debt and advances from strategic partners and deferred payments to related parties. | NOTE 2 - GOING CONCERN As shown in the accompanying consolidated financial statements, the Company incurred substantial operating and other losses and expenses of approximately $2.10 million for the year ended December 31, 2016, and $1.5 million for the year ended December 31, 2015. The cumulative deficit since inception is approximately $60.8 million. The Company has a working capital deficit at December 31, 2016 of approximately $4.0 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 debt, advance contract payments (deferred revenue) and advances from and deferred payments to related parties. |
Inventory, Net
Inventory, Net | 12 Months Ended |
Dec. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Inventory, Net | NOTE 3 – INVENTORY, NET Initiated in 2016, based on our revised R&D company business model, Inventory principally consists of raw material. to develop an engine. Under our prior business model, inventory consisted of raw material engine parts, work in process engines, labor and overhead, net of realization, valuation and obsolescence reserves. In the aggregate inventory is stated at the lower of cost or market. Inventory, net consists of: December 31, 2016 December 31, 2015 Raw materials $ 26,667 $ 323,508 Total $ 26,667 $ 323,505 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 | 12 Months Ended |
Dec. 31, 2016 | |
PROPERTY AND EQUIPMENT | |
Property and Equipment, Net | NOTE 4 – PROPERTY AND EQUIPMENT, NET Property and equipment consists of the following: December 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 (209,498 ) (178,049 ) Net property and equipment $ 93,272 $ 126,520 Depreciation expense for the years ended December 31, 2016, and 2015 was $33,269 and $36,645, respectively. |
Patents, Trademarks and Copyrig
Patents, Trademarks and Copyrights | 12 Months Ended |
Dec. 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 December 31, 2016, and 2015 were $178,478 and $283,368, respectively. For the years ended December 31, 2016, and 2015 the Company capitalized $0, and $0, respectively, of expenditures related to these assets. In 2016, and 2015 the Company recorded net charges of $69,782 and $28,530, respectively, included in general and administrative expenses, for various expired patents; the basic patents for the Cyclone technology are still protected. As of December 31, 2016, the Company had 15 patents issued on its technology both in the U.S. and internationally. Pursuant to new US Patent Office regulations, upon approval, expired patents can be reestablished from inception. Patents, trademarks and copyrights are amortized over the life of the intellectual property which is 15 years. Amortization expenses for the years ended December 31, 2016, and 2015 were $35,088 and $38,929, respectively. |
Notes and Other Loans Payable
Notes and Other Loans Payable | 12 Months Ended |
Dec. 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: December 31, 2016 December 31, 2015 12% convertible notes payable, maturing at various dates from November 2013 through April 2016 (A) $ 42,951 $ 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 - Various notes payable, maturing 2016 and 2017 13,500 - Note payable, maturing Oct 14 2016, (I) 27,000 - 10% Note payable, maturing January 26, 2017 46,000 - Demand Note, (H) 6,725 - Total non related party notes –net of discount 512,642 407,737 Less-Current Portion 512,642 357,737 Total non-current non related party $ - $ 50,000 (A) Notes issued net of 10% original discount (fully amortized). 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 December 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 December 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). The Company is subject to litigation judgment 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. (H) Note convertible into common stock at a 40% discount to 20 day market average. (I) Interest of $3,000 to be paid in 1,500,000 shares of restricted company common stock This note is in default. B. RELATED PARTIES A summary of related party notes and other loans payable is as follows: December 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) $ 169,751 $ 117,734 6% non-collateralized loans from officer and shareholder, payable on demand. The original principal balances were $157,101. 107,842 103,328 12% non-collateralized loans from officer and shareholder, payable on demand 21,044 20,178 Accrued Interest 95,123 80,094 Total current related party notes, inclusive of accrued interest $ 393,760 $ 321,334 (A) This note arose from services and salaries incurred by Schoell Marine on behalf of the Company. The Schoell Marine note bears an interest rate of 6% and repayments occur as cash flow of the Company permits. In June 2015 Schoell Marine forgave $710,272 of principle and accrued interest on the note. |
Related Party Transactions- Def
Related Party Transactions- Deferred Compensation | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2016 | |
Related Party Transactions [Abstract] | ||
Related Party Transactions- Deferred Compensation | NOTE 3 – RELATED PARTY TRANSACTIONS Cumulatively, for the nine months ended September 30, 2016, related party indebtness increased $416,631 from December 31, 2015. | NOTE 7 – RELATED PARTY TRANSACTIONS-Deferred Compensation Included in accounts payable and accrued expenses - related parties as of December 31, 2016, and December 31, 2015 are $412,500 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. |
Preferred Stock
Preferred Stock | 12 Months Ended |
Dec. 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 | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Stock Transactions | NOTE 9 – STOCK TRANSACTIONS During the year ended December 31, 2016, the Company: a- Issued 125,730,741 shares of restricted common stock valued at $298,315 for payment of $240,932 of liabilities and incurred a $57,383 loss on this debt payment. b- Amortized (based on vesting) $2,526 of common stock options for employee services. c- Issued 3,000,000 shares of common stock valued at $6,000 for services During the year ended December 31, 2015, the Company: a- Issued 92,500,000 shares of restricted common stock valued at $116,500 for payment of $66,500 of liabilities and incurred a $50,000 loss on this debt payment. b- Amortized (based on vesting) $2,526 of common stock options for employee services. c- Issued 424,853,956 shares of common stock valued at $130,855 as repayment of debt and related interest expense. d- Repaid a loan of 10,000,000 shares of stock from the Company’s Chairman and co-founder. which had been reissued pursuant to various debt covenants that had to be covered with stock. |
Stock Options and Warrants
Stock Options and Warrants | 12 Months Ended |
Dec. 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, the company issued 1,800,000 common stock options, valued at $3,690 (pursuant to the Black Scholes valuation model) that are exercisable into shares of common stock at an average exercise price of $.0021 and with a maturity life of 10 years. For the years ended December 31, 2016, and December 31, 2015 the amortization of stock options was $2,526 and $2,526, respectively. The unamortized balance at December 31 2016 was $2,396. A summary of the common stock options for the period from December 31, 2014 through December 31, 2016 follows: Number Outstanding Weighted Avg. Exercise Price Weighted Avg. Remaining Contractual Life (Years) Balance, December 31, 2014 11,090,000 $ 0.123 6.0 Options issued 1,800,000 .0009 9.6 Options exercised - - - Options cancelled (510,000 ) (.12 ) - Cancelled-old - Balance, December 31, 2015 12,380,000 $ 0.123 5.8 Options issued 1,800,000 .0021 9.6 Options expired (150,000 ) (.098 ) Balance, December 31, 2016 14,030,000 $ .096 5.3 The vested and exercisable options at period end follows: Exercisable/ Vested Options Outstanding Weighted Avg. Exercise Price Weighted Avg. Remaining Contractual Life (Years) Balance December 31, 2016 12,230,000 $ .11 4.6 Additional vesting by March 31, 2017 450,0000 .0002 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: Year Ended December 31, 2016 Year Ended December 31, 2015 Risk free interest rate .71%-1.4% .89% -1.31% Expected volatility 136% - 1.39% 102% - 131% Expected term 3 3 Expected dividend yield 0% 0% Average value per options and warrants $ .0019 -$.0024 $ .0003 -$.0016 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 During the year ended December 31, 2016, 625,000 warrants with an average exercise price of $.0144 expired. A summary of outstanding vested warrant activity for the period from December 31, 2014 to December 31, 2016 follows: Number Outstanding Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Common Stock Warrants Balance, December 31, 2014 3,633,692 $ 0.074 0.89 Warrants expired (2,508,692 ) (.148 ) Balance, December 31, 2015 1,125,000 $ .0042 2.05 Warrants expired (625,000 ) (.011 ) Balance, December 31, 2016 500,000 $ .08 .67 All warrants were vested and exercisable as of the date issued. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 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 years ended December 31, 2016 and 2015 are as follows: Year ended December 31, 2016 Year ended December 31, 2015 Tax benefit at U.S. statutory rate $ 470,466 34 % $ 235,276 34 % State taxes, net of federal benefit 55,349 4 27,679 4 Change in valuation allowance (525,818 ) (38 ) (262,955 ) (38 ) - - - The tax effect of temporary differences that give rise to significant portions of the deferred tax assets and liabilities at December 31, 2016 and December 31, 2015 consisted of the following: Deferred Tax Assets December 31, 2016 December 31, 2015 Net Operating Loss Carry-forward $ 10,577,607 $ 9,924,492 Deferred Tax Liabilities – Accrued Officers’ Salaries (900,306 ) (795,805 ) Net Deferred Tax Assets 9,677,301 9,128,687 Valuation Allowance (9,677,301 ) (9,128,687 ) Total Net Deferred Tax Assets $ - $ - As of December 31, 2016, the Company had a net operating loss carry forward for income tax reporting purposes of approximately $22.8 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 | 12 Months Ended |
Dec. 31, 2016 | |
Leases [Abstract] | |
Lease Obligations | NOTE 12- LEASE OBLIGATIONS 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 original lease, was at an annual rent of $60,000. The lease period ended December 2016 and the current lease is monthly with a 3% rate increase. Occupancy costs for the years ended December 31, 2016, and 2015 were $64,100 and $60,000, respectively. B .CAPITALIZED LEASE OBLIGATIONS In 2013 and 2014, the company acquired $45,566 of equipment via capitalized leases at interest rates ranging from 6.9% to 15.5%. Total lease payments made for the year ended December 31, 2016 were $10,042. The balance of capitalized lease obligations payable at December 31, 2016, and December 31, 2015 were $39,847 and $49,889, respectively. Future lease payments are: 2017 $ 14,312 2018 9,754 2019 8,127 2020 7,654 2021 0 $ 39,847 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Commitments and Contingencies | NOTE 4 – 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. | 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 | 12 Months Ended |
Dec. 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 December 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 | 12 Months Ended |
Dec. 31, 2016 | |
Deferred Revenue Disclosure [Abstract] | |
Receivables, Deferred Revenue and Backlog | NOTE 15 – RECEIVABLES, DEFERRED REVENUE AND BACKLOG As of December 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. In 2016, 3 other customers advanced $175,700 as deposits towards payments on $355,000 of contracts for engines currently estimated to be delivered in 2017 and license deposits. |
Derivative Financial Instrument
Derivative Financial Instruments | 12 Months Ended |
Dec. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | NOTE 16 – DERIVATIVE FINANCIAL INSTRUMENTS Prior to 2015, the Company entered into convertible note agreements (subject to derivative accounting treatment). 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. In the year ended December 31, 2016, the Company recorded a $11,680 non-cash charge to interest expense (reflective of debt discount amortization), and $370,519 of derivative loss related to adjusting the derivative liability to fair value. At December 31, 2016, the derivative related fair value of debt was $754,000. The significant increase in the derivative loss was the inclusion of default judgments, default and accrued interest in the fair market debt calculation. In the year ended December 31, 2015, the Company recorded a $174,043 non-cash charge to interest expense (reflective of debt discount amortization), an increase of $0 in additional paid in capital pursuant to conversion of convertible notes to common stock, and a $56,702 of derivative gain related to adjusting the derivative liability to fair value. At December 31, 2015, the derivative related fair value of debt was $383,482. The Company calculates the estimated fair values of the liabilities for derivative instruments at each quarter-end using the 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. Year Ended December 31, 2016 Year Ended December 31, 2015 Volatility 71%- 91 % 103%- 343 % Risk Free Rate .02% - .28 % .01% - .28 % Expected Term (years) 0 – 1.05 0 – 1.05 Dividend Rate 0 % 0 % |
Litigation
Litigation | 12 Months Ended |
Dec. 31, 2016 | |
Litigation | |
Litigation | NOTE 17 – LITIGATION 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 Tonaquint Inc. filed and received a judgment and the Company is negotiating a reduced settlement. As at December 31 2016, outstanding interest, default interest and default judgment penalties are included in accrued liabilities. In August 2015, the Company is subject to litigation of approximately $150,000, plus subsequent penalty interest for non -payment of a liability. JSJ filed and received a judgment and the Company entered into a settlement agreement for conversion of judgment based on value and conversions of original note on January 9, 2017. As at December 31, 2016, outstanding interest, default interest and default judgment penalties are included in accrued liabilities. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 18 – SUBSEQUENT EVENTS In the first and second quarters of 2017, the Company engaged in the following transactions: a- The Company issued approximately 6.4 million shares of common stock value at $5,096 for services. b- The Company issued 70 million shares of common stock in payment of a $123,000 accrued liability for services. c- The Company issued 100 million shares of common stock in settlement of a $49,000 note payable and related interest d- The Company issued approximately 44.5 million shares of common stock pursuant of conversion of approximately $34,000 of note payable an related interest. In January 2017 Falck Schmidt Defense Systems (“FSDS”) of Denmark signed an Exclusive Worldwide Technology License Agreement to use the Cyclone engine technology for both military and aerospace power applications. For each Cyclone engine that FSDS manufactures Cyclone will receive a royalty. Additionally these contracts call for Cyclone to be the R&D arm of FSDS. Through the first half of 2017, the company received funds of approximately $153,000 from current derivative and non-derivative note holders. The Company entered into a consulting contract on January 3, 2017 to oversee and complete the process of its 2016 audit and to provide other financial consulting. Compensation is to be in the amount of 10,000,000 shares per month for a period of twelve months. The Company entered an addendum to a consulting agreement “Tendrich Consulting Addendum # 2 dated March 30,2017.” The Addendum calls for a one time payment of 50,0000,000 shares for additional responsibilities performed. The Company entered into a consulting contract on April 1, 2017 “ Tendrich consulting Agreement dated April 1, 2017” to provide the directors and executives guidance on certain matters. Compensation is to be in the amount of $10,000 of Restricted Stock per month for a period of twelve months, with an optional twelve month extension. |
Organizational and Significan26
Organizational and Significant Accounting Policies (Policies) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 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. Initiated in 2016, the Company’s current business model, is to be primarily a research and development engineering company whose main purpose is to develop, commercialize, market and license its Cyclone engine technology. Engines and related systems will be outsourced for manufacturing but the company will invoice customers. Our prior business model also included engine manufacturing. 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 various vehicles and vessels utilizing the Company’s engine. As of December 31, 2016 and 2015, 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 had sold most of its ownership and the balance was sold in the second quarter of 2016. | |
Principles of Consolidation and Basis of Presentation | A. 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 accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles (GAAP) applicable to interim financial information and the requirements of Form 10-Q and Article 8 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. We follow the same accounting policies in preparation of interim reports as we do in our annual reports. 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. We suggest that these financial statements be read in conjunction with the financial statements and notes thereto included in the Company's annual report for the year ended December 31, 2016. 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. | B. PRINCIPLES OF CONSOLIDATION AND BASIS OF PRESENTATION The 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. Effective September 30, 2014, Cyclone sold most of its investment in the WHE Subsidiary and as of December 31, 2015 retained approximately a 2 million share non controlling (below 20%) interest in the WHE Subsidiary. This investment was deconsolidated on September 30, 2014 and the remaining investment was sold in the second quarter of 2016. 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. |
Cash | C. CASH Cash includes cash on hand and cash in banks. At December 31, 2016 and 2015, the Company maintained cash balances at one financial institution. | |
Computation of Loss Per Share | D. COMPUTATION OF LOSS PER SHARE Net loss per share is computed by dividing the loss by the weighted average number of common shares outstanding during the period. Diluted 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 December 31, 2016 and 2015, total anti-dilutive shares amounted to approximately 14.5 million and 13.5 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, 2016, 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 not 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 2016. | |
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. Based on our revised R&D company business model, commencing in 2016, costs include only material to develop a completed engine. In our former business model 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 annual fair values and changing values of financial instruments as of January 1, 2015 through December 31 2015 and January 1, 2016 through December 31, 2016 is as follows: Instrument Beginning of Period Change End of Period Level Valuation Methodology Derivative liabilities 2015 $ 440,184 $ (56,706 ) $ 383,482 3 Stochastic Process Forecasting Model Derivative liabilities 2016 $ 383,482 $ 370,518 $ 754,000 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 years ended December 31, 2016 and 2015 were $604,199 and $467,610, 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 March 2016, the FASB issued ASU 2016-09, Compensation-Stock Compensation: Improvements to Employee Share-Based Payment Accounting. This addresses the accounting for share-based payment transactions and includes the recognition of the income tax effects of awards that vest or settle as income tax expense and clarification of the presentation of certain components of share-based awards in the statement of cash flows. We are still in the process of evaluating the effect of adoption on our financial statements and the effective date of application is 2018. In March 2016, the FASB issued ASU 2016-06, “ Derivatives and Hedging (Topic 815): Contingent Put and Call Options in Debt Instruments (a consensus of the FASB Emerging Issues Task Force) In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230) Classification of Certain Cash Receipts and Cash Payments. This standard amends and adjusts how cash receipts and cash payments are presented and classified in the statement of cash flows. ASU 2016-15 ASU 2016-15 | |
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 December 31, 2016, the Company maintained its cash in one quality financial institution. The Company has not experienced any losses in its bank accounts through December 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 Significan27
Organizational and Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Fair Value of Financial Instrument | The summary of annual fair values and changing values of financial instruments as of January 1, 2015 through December 31 2015 and January 1, 2016 through December 31, 2016 is as follows: Instrument Beginning of Period Change End of Period Level Valuation Methodology Derivative liabilities 2015 $ 440,184 $ (56,706 ) $ 383,482 3 Stochastic Process Forecasting Model Derivative liabilities 2016 $ 383,482 $ 370,518 $ 754,000 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) | 12 Months Ended |
Dec. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Net | Inventory, net consists of: December 31, 2016 December 31, 2015 Raw materials $ 26,667 $ 323,508 Total $ 26,667 $ 323,505 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
PROPERTY AND EQUIPMENT | |
Schedule of Property and Equipment, Net | Property and equipment consists of the following: December 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 (209,498 ) (178,049 ) Net property and equipment $ 93,272 $ 126,520 |
Notes and Other Loans Payable (
Notes and Other Loans Payable (Tables) | 12 Months Ended |
Dec. 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: December 31, 2016 December 31, 2015 12% convertible notes payable, maturing at various dates from November 2013 through April 2016 (A) $ 42,951 $ 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 - Various notes payable, maturing 2016 and 2017 13,500 - Note payable, maturing Oct 14 2016, (I) 27,000 - 10% Note payable, maturing January 26, 2017 46,000 - Demand Note, (H) 6,725 - Total non related party notes –net of discount 512,642 407,737 Less-Current Portion 512,642 357,737 Total non-current non related party $ - $ 50,000 (A) Notes issued net of 10% original discount (fully amortized). 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 December 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 December 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). The Company is subject to litigation judgment 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. (H) Note convertible into common stock at a 40% discount to 20 day market average. (I) Interest of $3,000 to be paid in 1,500,000 shares of restricted company common stock This note is in default. |
Schedule of Related Party Notes and Other Loans Payable | A summary of related party notes and other loans payable is as follows: December 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) $ 169,751 $ 117,734 6% non-collateralized loans from officer and shareholder, payable on demand. The original principal balances were $157,101. 107,842 103,328 12% non-collateralized loans from officer and shareholder, payable on demand 21,044 20,178 Accrued Interest 95,123 80,094 Total current related party notes, inclusive of accrued interest $ 393,760 $ 321,334 (A) This note arose from services and salaries incurred by Schoell Marine on behalf of the Company. The Schoell Marine note bears an interest rate of 6% and repayments occur as cash flow of the Company permits. |
Stock Options and Warrants (Tab
Stock Options and Warrants (Tables) | 12 Months Ended |
Dec. 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, 2014 through December 31, 2016 follows: Number Outstanding Weighted Avg. Exercise Price Weighted Avg. Remaining Contractual Life (Years) Balance, December 31, 2014 11,090,000 $ 0.123 6.0 Options issued 1,800,000 .0009 9.6 Options exercised - - - Options cancelled (510,000 ) (.12 ) - Cancelled-old - Balance, December 31, 2015 12,380,000 $ 0.123 5.8 Options issued 1,800,000 .0021 9.6 Options expired (150,000 ) (.098 ) Balance, December 31, 2016 14,030,000 $ .096 5.3 |
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 December 31, 2016 12,230,000 $ .11 4.6 Additional vesting by March 31, 2017 450,0000 .0002 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: Year Ended December 31, 2016 Year Ended December 31, 2015 Risk free interest rate .71%-1.4% .89% -1.31% Expected volatility 136% - 1.39% 102% - 131% Expected term 3 3 Expected dividend yield 0% 0% Average value per options and warrants $ .0019 -$.0024 $ .0003 -$.0016 |
Schedule of Outstanding Vested Warrant Activity | A summary of outstanding vested warrant activity for the period from December 31, 2014 to December 31, 2016 follows: Number Outstanding Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Common Stock Warrants Balance, December 31, 2014 3,633,692 $ 0.074 0.89 Warrants expired (2,508,692 ) (.148 ) Balance, December 31, 2015 1,125,000 $ .0042 2.05 Warrants expired (625,000 ) (.011 ) Balance, December 31, 2016 500,000 $ .08 .67 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 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 years ended December 31, 2016 and 2015 are as follows: Year ended December 31, 2016 Year ended December 31, 2015 Tax benefit at U.S. statutory rate $ 470,466 34 % $ 235,276 34 % State taxes, net of federal benefit 55,349 4 27,679 4 Change in valuation allowance (525,818 ) (38 ) (262,955 ) (38 ) - - - |
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 December 31, 2016 and December 31, 2015 consisted of the following: Deferred Tax Assets December 31, 2016 December 31, 2015 Net Operating Loss Carry-forward $ 10,577,607 $ 9,924,492 Deferred Tax Liabilities – Accrued Officers’ Salaries (900,306 ) (795,805 ) Net Deferred Tax Assets 9,677,301 9,128,687 Valuation Allowance (9,677,301 ) (9,128,687 ) Total Net Deferred Tax Assets $ - $ - |
Lease Obligations (Tables)
Lease Obligations (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Leases [Abstract] | |
Schedule of Future Minimum Lease Payments for Capital Leases | Future lease payments are: 2017 $ 14,312 2018 9,754 2019 8,127 2020 7,654 2021 0 $ 39,847 |
Derivative Financial Instrume34
Derivative Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Liabilities at Fair Value | Year Ended December 31, 2016 Year Ended December 31, 2015 Volatility 71%- 91 % 103%- 343 % Risk Free Rate .02% - .28 % .01% - .28 % Expected Term (years) 0 – 1.05 0 – 1.05 Dividend Rate 0 % 0 % |
Organizational and Significan35
Organizational and Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||
Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | |
Equity method investment, ownership percentage | 95.00% | 95.00% | 95.00% | |||||||||
Number of shares retains for noncontrolling interest | 2,000,000 | |||||||||||
Antidilutive securities excluded from computation of earnings per share | 14,500,000 | 13,500,000 | ||||||||||
Research and development expense | $ 57,977 | $ 39,157 | $ 34,693 | $ 103,605 | $ 81,237 | $ 106,927 | $ 73,850 | $ 188,164 | $ 131,827 | $ 291,769 | $ 604,199 | $ 467,610 |
Cyclone Performance [Member] | ||||||||||||
Equity method investment, ownership percentage | 95.00% | 95.00% | ||||||||||
WHE Subsidiary [Member] | ||||||||||||
Equity method investment, ownership percentage | 20.00% |
Organizational and Significan36
Organizational and Significant Accounting Policies - Schedule of Fair Value of Financial Instrument (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Derivative liabilities, Beginning of Period | $ 383,482 | |
Derivative liabilities, End of Period | 754,000 | $ 383,482 |
Fair Value, Inputs, Level 3 [Member] | ||
Derivative liabilities, Beginning of Period | 383,482 | 440,184 |
Derivative liabilities, Change | 370,518 | (56,706) |
Derivative liabilities, End of Period | $ 754,000 | $ 383,482 |
Derivative liabilities, Valuation Methodology | Stochastic Process Forecasting Model | Stochastic Process Forecasting Model |
Organizational and Significan37
Organizational and Significant Accounting Policies - Schedule of Estimated Useful Lives of Property and Equipment (Details) | 12 Months Ended |
Dec. 31, 2016 | |
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 ($) | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Jun. 30, 2016 | Mar. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||
Income (loss) from operating and other losses and expenses | $ 900,000 | $ 2,100,000 | $ 1,500,000 | ||
Accumulated deficit | 59,627,862 | 60,828,659 | $ 58,727,736 | $ 59,265,568 | $ 58,988,346 |
Working capital deficit | $ 2,900,000 | $ 4,000,000 |
Inventory, Net - Schedule of In
Inventory, Net - Schedule of Inventory, Net (Details) - USD ($) | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 |
Inventory Disclosure [Abstract] | |||||
Raw material | $ 26,667 | $ 323,508 | |||
Total | $ 26,667 | $ 407,515 | $ 349,513 | $ 337,959 | $ 323,508 |
Property and Equipment, Net (De
Property and Equipment, Net (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
PROPERTY AND EQUIPMENT | ||
Depreciation expense | $ 33,269 | $ 36,645 |
Property and Equipment, Net - S
Property and Equipment, Net - Schedule of Property and Equipment, Net (Details) - USD ($) | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 |
Property and equipment gross | $ 302,770 | $ 302,770 | $ 302,770 | $ 302,770 | $ 304,569 |
Accumulated depreciation | (209,498) | (202,153) | (193,577) | (184,981) | (178,049) |
Net property and equipment | 93,272 | $ 100,617 | $ 109,193 | $ 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 Copyr42
Patents, Trademarks and Copyrights (Details Narrative) | 12 Months Ended | ||||
Dec. 31, 2016USD ($)Patents | Dec. 31, 2015USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||||
Net patents, trademarks and copyrights | $ 178,478 | $ 283,368 | $ 257,032 | $ 265,824 | $ 274,447 |
Patents, trademarks and copyrights capitalized | 0 | 0 | |||
Retirement of patents | $ 69,782 | 28,530 | |||
Number of patents | Patents | 15 | ||||
Finite-lived intangible asset, useful life | 15 years | ||||
Amortization expenses | $ 35,088 | $ 38,929 |
Notes and Other Loans Payable43
Notes and Other Loans Payable (Details Narrative) | 1 Months Ended |
Jun. 30, 2015USD ($) | |
Schoell Marine [Member] | Principal Forgiveness and Accrued Interest Forgiveness [Member] | |
Debt forgave amount | $ 710,272 |
Notes and Other Loans Payable -
Notes and Other Loans Payable - Schedule of Non-related Party Notes and Other Loans Payable (Details) - USD ($) | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | |
Total non related party notes -net of discount | $ 512,642 | $ 407,737 | ||||
Less-Current Portion | 512,642 | $ 508,642 | $ 424,917 | $ 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] | 42,951 | 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 | |||||
Various Note Payable [Member] | ||||||
Total non related party notes -net of discount | 13,500 | |||||
Note Payable [Member] | ||||||
Total non related party notes -net of discount | [7] | 27,000 | ||||
10% Note Payable One [Member] | ||||||
Total non related party notes -net of discount | 46,000 | |||||
Demand Note [Member] | ||||||
Total non related party notes -net of discount | [8] | $ 6,725 | ||||
[1] | Notes issued net of 10% original discount (fully amortized) 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 December 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 December 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). The Company is subject to litigation judgment 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. | |||||
[7] | Interest of $3,000 to be paid in 1,500,000 shares of restricted company common stock This note is in default | |||||
[8] | Note convertible into common stock at a 40% discount to 20 day market average. |
Notes and Other Loans Payable45
Notes and Other Loans Payable - Schedule of Non-related Party Notes and Other Loans Payable (Details) (Parenthetical) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Mar. 31, 2016 | Mar. 31, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | |
Interest paid | $ 1,603 | $ 10,869 | $ 3,379 | $ 11,372 | $ 4,232 | $ 13,836 | $ 14,491 | |
Number of restricted shares | 125,730,741 | 92,500,000 | ||||||
Conversion of debt shares converted | 424,853,956 | |||||||
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] | ||||||||
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 | ||||||
Various Note Payable [Member] | ||||||||
Convertible notes payable, maturity date description | 2016 and 2017 | 2016 and 2017 | ||||||
Note Payable [Member] | ||||||||
Note payable maturity date | Oct. 14, 2016 | Oct. 14, 2016 | ||||||
Interest paid | $ 3,000 | $ 3,000 | ||||||
Number of restricted shares | 1,500,000 | 1,500,000 | ||||||
10% Note Payable One [Member] | ||||||||
Note payable maturity date | Jan. 26, 2017 | Jan. 26, 2017 | ||||||
Demand Note [Member] | Derivative Liabilities [Member] | ||||||||
Original discount rate | 40.00% |
Notes and Other Loans Payable46
Notes and Other Loans Payable - Schedule of Related Party Notes and Other Loans Payable (Details) - USD ($) | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | |
Total current related party notes, inclusive of accrued interest | $ 393,760 | $ 391,132 | $ 385,304 | $ 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] | 169,751 | 117,734 | |||
Six Percent Non-collateralized Loans from Officer and Shareholder [Member] | ||||||
Total current related party notes, inclusive of accrued interest | 107,842 | 103,328 | ||||
Twelve Percent Non-collateralized Loans from Officer and Shareholder [Member] | ||||||
Total current related party notes, inclusive of accrued interest | 21,044 | 20,178 | ||||
Accrued Interest [Member] | ||||||
Total current related party notes, inclusive of accrued interest | $ 95,123 | $ 80,094 | ||||
[1] | This note arose from services and salaries incurred by Schoell Marine on behalf of the Company. The Schoell Marine note bears an interest rate of 6% and repayments occur as cash flow of the Company permits. |
Notes and Other Loans Payable47
Notes and Other Loans Payable - Schedule of Related Party Notes and Other Loans Payable (Details) (Parenthetical) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
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% | 6.00% |
Officer and Shareholder [Member] | ||
Debt instrument note bears an interest rate | 12.00% | 12.00% |
Related Party Transactions-Defe
Related Party Transactions-Deferred Compensation (Details Narrative) - USD ($) | 9 Months Ended | |||
Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Jun. 03, 2015 | |
Related Party Transactions [Abstract] | ||||
Accounts payable and accrued expenses - related parties | $ 412,500 | $ 137,500 | ||
Deferred compensation | $ 612,500 | |||
Related party indebtness increased | $ 416,631 |
Preferred Stock (Details Narrat
Preferred Stock (Details Narrative) | 12 Months Ended |
Dec. 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) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Number of restricted common stock | 125,730,741 | 92,500,000 |
Number of restricted common stock, value | $ 298,315 | $ 116,500 |
Payment of debt | 240,932 | 66,500 |
Loss on payment of debt | $ 57,383 | $ 50,000 |
Number of common stock issued for services | 3,000,000 | |
Number of common stock issued for services, value | $ 6,000 | |
Debt conversion, converted instrument, shares issued | 424,853,956 | |
Debt conversion, converted instrument, amount | $ 130,855 | |
Chairman And Co-Founder [Member] | ||
Debt conversion, converted instrument, shares issued | 10,000,000 | |
Stock Options For Employee Services [Member] | ||
Amortized common stock options based on vesting | $ 2,526 | $ 2,526 |
Stock Options and Warrants (Det
Stock Options and Warrants (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based compensation arrangement by share-based payment award, options, grants in period, gross | 1,800,000 | 1,800,000 |
Share-based compensation arrangements by share-based payment award, options, grants in period, weighted average exercise price | $ 0.0021 | $ 0.0009 |
Share-based compensation | $ 2,526 | $ 2,526 |
Employee service share-based compensation, nonvested awards, compensation cost not yet recognized | 2,396 | |
Warrants value | $ 625,000 | |
Average exercise price of warrants | $ .0144 | |
Employment Contracts [Member] | Officers [Member] | ||
Share-based compensation arrangement by share-based payment award, options, grants in period, gross | 1,800,000 | |
Stock options issued during period, value | $ 3,690 | |
Share-based compensation arrangements by share-based payment award, options, grants in period, weighted average exercise price | $ 0.0021 | |
Stock options issued during period, maturity life | 10 years |
Stock Options and Warrants - Sc
Stock Options and Warrants - Schedule of Common Stock Option (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Number Outstanding, Balance | 12,380,000 | 11,090,000 |
Number Outstanding, Options issued | 1,800,000 | 1,800,000 |
Number Outstanding, Options exercised | ||
Number Outstanding, Options cancelled/expired | (150,000) | (510,000) |
Number Outstanding, Cancelled-old | ||
Number Outstanding, Balance | 14,030,000 | 12,380,000 |
Weighted Avg Exercise Price, Balance | $ 0.123 | $ 0.123 |
Weighted Avg Exercise Price, Options issued | 0.0021 | 0.0009 |
Weighted Avg Exercise Price, Options exercised | ||
Weighted Avg Exercise Price, Options cancelled/expired | (0.098) | (0.12) |
Weighted Avg Exercise Price, Cancelled-old | ||
Weighted Avg Exercise Price, Balance | $ 0.096 | $ 0.123 |
Weighted Avg Remaining Contractual Life (Years), Beginning Balance | 5 years 9 months 18 days | 6 years |
Weighted Avg Remaining Contractual Life (Years), Options issued | 9 years 7 months 6 days | 9 years 7 months 6 days |
Weighted Avg Remaining Contractual Life (years), Ending Balance | 5 years 3 months 19 days | 5 years 9 months 18 days |
Stock Options and Warrants - 53
Stock Options and Warrants - Schedule of Vested and Exercisable Options (Details) | 12 Months Ended |
Dec. 31, 2016$ / sharesshares | |
Exercisable/Vested Options Outstanding | shares | 12,230,000 |
Weighted Avg Exercise Price | $ / shares | $ 0.11 |
Weighted Avg Remaining Contractual Life (Years) | 4 years 7 months 6 days |
Additional vesting by Sept. 30, 2016 [Member] | |
Exercisable/Vested Options Outstanding | shares | 4,500,000 |
Weighted Avg Exercise Price | $ / shares | $ 0.0002 |
Weighted Avg Remaining Contractual Life (Years) | 9 years |
Stock Options and Warrants - 54
Stock Options and Warrants - Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Expected dividend yield | 0.00% | 0.00% |
Minimum [Member] | ||
Risk free interest rate | 0.02% | 0.01% |
Expected volatility | 71.00% | 103.00% |
Expected term | 0 years | 0 years |
Maximum [Member] | ||
Risk free interest rate | 0.28% | 0.28% |
Expected volatility | 91.00% | 343.00% |
Expected term | 1 year 18 days | 1 year 18 days |
Stock Options and Purchase Warrants [Member] | ||
Expected term | 3 years | 3 years |
Expected dividend yield | 0.00% | 0.00% |
Stock Options and Purchase Warrants [Member] | Minimum [Member] | ||
Risk free interest rate | 0.71% | 0.89% |
Expected volatility | 136.00% | 102.00% |
Average value per options and warrants | $ 0.0019 | $ 0.0003 |
Stock Options and Purchase Warrants [Member] | Maximum [Member] | ||
Risk free interest rate | 1.40% | 1.31% |
Expected volatility | 139.00% | 131.00% |
Average value per options and warrants | $ 0.0024 | $ 0.0016 |
Stock Options and Warrants - 55
Stock Options and Warrants - Schedule of Outstanding Vested Warrant Activity (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Number Outstanding, Balance | 1,125,000 | 3,633,692 |
Number Outstanding, Warrants expired | (625,000) | (2,508,692) |
Number Outstanding, Balance | 500,000 | 1,125,000 |
Weighted Average Exercise Price, Balance | $ 0.0042 | $ 0.074 |
Weighted Average Exercise Price, Warrants expired | (0.011) | (0.148) |
Weighted Average Exercise Price, Balance | $ 0.08 | $ 0.0042 |
Weighted Average Remaining Contractual Life (Years), Beginning Balance | 2 years 18 days | 10 months 21 days |
Weighted Average Remaining Contractual Life (years), Ending Balance | 8 months 2 days | 2 years 18 days |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Operating loss carryforwards | $ 22,800,000 |
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 | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||
Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||||||||||||
Tax benefit at U.S. statutory rate | $ 470,466 | $ 235,276 | ||||||||||
Tax benefit at U.S. statutory rate, Percent | 34.00% | 34.00% | ||||||||||
State taxes, net of federal benefit | $ 55,349 | $ 27,679 | ||||||||||
State taxes, net of federal benefit, percent | 4.00% | 4.00% | ||||||||||
Change in valuation allowance | $ (525,818) | $ (262,955) | ||||||||||
Change in valuation allowance, Percent | (38.00%) | (38.00%) | ||||||||||
Income Tax Expense (Benefit) | ||||||||||||
Effective Income Tax Rate Reconciliation, Percent |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Income Tax Disclosure [Abstract] | ||
Net Operating Loss Carry-forward | $ 10,577,607 | $ 9,924,492 |
Deferred Tax Liabilities - Accrued Officers' Salaries | (900,306) | (795,805) |
Net Deferred Tax Assets | 9,677,301 | 9,128,687 |
Valuation Allowance | (9,677,301) | (9,128,687) |
Total Net Deferred Tax Assets |
Lease Obligations (Details Narr
Lease Obligations (Details Narrative) | 12 Months Ended | |||
Dec. 31, 2016USD ($)ft² | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Leases [Abstract] | ||||
Area of warehouse and office | ft² | 6,000 | |||
Payment for rent | $ 60,000 | |||
Monthly current lease increasing rate, percentage | 3.00% | |||
Occupancy costs | $ 64,100 | $ 60,000 | ||
Property and equipment, amount acquired via capitalized lease obligations | $ 45,566 | $ 45,566 | ||
Capitalized lease obligations, average interest rate | 15.50% | 6.90% | ||
Repayments of long-term capital lease obligations | 10,042 | |||
Capital lease obligations | $ 39,847 | $ 49,889 |
Lease Obligations - Schedule of
Lease Obligations - Schedule of Future Minimum Lease Payments for Capital Leases (Details) | Dec. 31, 2016USD ($) |
Leases [Abstract] | |
2,017 | $ 14,312 |
2,018 | 9,754 |
2,019 | 8,127 |
2,020 | 7,654 |
2,021 | 0 |
Total | $ 39,847 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2016 | |
Employment agreements, initial term of employment | 3 years | 3 years |
Automatic renewing period of employment agreements | 1 year | 1 year |
Harry Schoell Chairman and CTO [Member] | ||
Employment agreements, officer salary | $ 150,000 | $ 150,000 |
Frankie Fruge COO [Member] | ||
Employment agreements, officer salary | $ 120,000 | $ 120,000 |
Consolidated Subsidiary (Detail
Consolidated Subsidiary (Details Narrative) - USD ($) | 3 Months Ended | |
Dec. 31, 2012 | Dec. 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 Revenue63
Receivables, Deferred Revenue and Backlog (Details Narrative) | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Customer advance and deposits | $ 175,700 |
Payment of contract for engines | 355,000 |
Combilift Agreement [Member] | |
Backlog for prototype engines purchased | 400,000 |
Deferred revenue | $ 100,000 |
Derivative Financial Instrume64
Derivative Financial Instruments (Details Narrative) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Mar. 31, 2016USD ($) | Mar. 31, 2015USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2015USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Dec. 31, 2016USD ($)Integer | Dec. 31, 2015USD ($) | |
Non-cash charge to interest expense | $ 8,193 | $ 78,861 | $ 11,680 | $ 132,531 | $ 11,680 | $ 157,507 | $ 11,680 | $ 174,043 |
Loss on derivative instruments | 370,519 | 56,702 | ||||||
Adjustments to additional paid in capital | 0 | |||||||
Debt [Member] | ||||||||
Derivative Liability | $ 754,000 | $ 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 Instrume65
Derivative Financial Instruments - Schedule of Derivative Liabilities at Fair Value (Details) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Dividend Rate | 0.00% | 0.00% |
Minimum [Member] | ||
Volatility | 71.00% | 103.00% |
Risk Free Rate | 0.02% | 0.01% |
Expected Term (years) | 0 years | 0 years |
Maximum [Member] | ||
Volatility | 91.00% | 343.00% |
Risk Free Rate | 0.28% | 0.28% |
Expected Term (years) | 1 year 18 days | 1 year 18 days |
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 ($) | Apr. 02, 2017 | Mar. 30, 2017 | Jan. 03, 2017 | Mar. 31, 2017 | Jun. 30, 2017 | Dec. 31, 2016 |
Number of common stock issued for services, shares | 3,000,000 | |||||
Stock issued during period, value, issued for services | $ 6,000 | |||||
Subsequent Event [Member] | ||||||
Number of common stock issued for services, shares | 6,400,000 | 6,400,000 | ||||
Stock issued during period, value, issued for services | $ 5,096 | $ 5,096 | ||||
Number of common stock issued for settlement of accrued liability, shares | 70,000,000 | 70,000,000 | ||||
Number of common stock issued for settlement of accrued liability | $ 123,000 | $ 123,000 | ||||
Number of common stock issued for settlement of note payable and related interest, shares | 100,000,000 | 100,000,000 | ||||
Number of common stock issued for settlement of note payable and related interest | $ 49,000 | $ 49,000 | ||||
Number of common stock issued for conversion of liability, shares | 44,500,000 | 44,500,000 | ||||
Number of common stock issued for conversion of liability | $ 34,000 | $ 34,000 | ||||
Proceeds from current derivative and non-derivative note holders | $ 153,000 | |||||
Subsequent Event [Member] | Consulting Agreement [Member] | ||||||
Number of stock issued for sharebased compensation | 10,000,000 | |||||
Number of stock issued for sharebased compensation, one time payment | 500,000,000 | |||||
Subsequent Event [Member] | Consulting Agreement [Member] | Directors and Executive [Member] | Restricted Stock [Member] | ||||||
Number of stock issued for sharebased compensation | 10,000 |