Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Dec. 18, 2017 | |
Document And Entity Information | ||
Entity Registrant Name | CYCLONE POWER TECHNOLOGIES INC | |
Entity Central Index Key | 1,442,711 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 2,726,067,954 | |
Trading Symbol | CYPW | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,017 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
CURRENT ASSETS | ||
Cash | $ 591 | |
Inventory, net | 27,498 | 26,667 |
Other current assets | 193 | 193 |
Total current assets | 27,691 | 27,451 |
PROPERTY AND EQUIPMENT | ||
Furniture, fixtures, and equipment | 302,770 | 302,770 |
Accumulated depreciation | (230,253) | (209,498) |
Net property and equipment | 72,517 | 93,272 |
OTHER ASSETS | ||
Patents, trademarks and copyrights | 394,980 | 394,980 |
Accumulated amortization | (235,588) | (216,502) |
Net patents, trademarks and copyrights | 159,392 | 178,478 |
Other assets | 7,862 | 7,862 |
Total other assets | 167,254 | 186,340 |
Total Assets | 267,462 | 307,063 |
CURRENT LIABILITIES | ||
Bank Overdraft | 52 | |
Accounts payable and accrued expenses | 1,972,091 | 1,472,851 |
Accounts payable and accrued expenses-related parties | 796,475 | 545,225 |
Notes and other loans payable-current portion | 457,832 | 512,642 |
Derivative liabilities | 1,162,397 | 754,000 |
Notes and other loans payable-related parties | 384,652 | 393,760 |
Capitalized lease obligations-current portion | 5,522 | 14,312 |
Deferred revenue and license deposits | 173,826 | 323,826 |
Total current liabilities | 4,952,847 | 4,016,616 |
NON-CURRENT LIABILITIES | ||
Capitalized lease obligations-net of current portion | 25,536 | |
Total non-current liabilities | 25,536 | |
Total Liabilities | 4,952,847 | 4,042,152 |
Commitments and contingencies | ||
STOCKHOLDERS' DEFICIT | ||
Series B preferred stock, $.0001 par value, 1,000 shares authorized, 1,000 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively. | ||
Common stock, $.0001 par value, 6,000,000,000 shares authorized, 2,109,450,166 and 1,517,400,273 shares, issued and outstanding September 30, 2017 and December 31, 2016 respectively. | 210,943 | 151,737 |
Additional paid-in capital | 57,417,033 | 56,915,794 |
Treasury Stock, 317,000 shares at September 30, 2017 and December 31, 2016 respectively, at cost. | (3,000) | (3,000) |
Accumulated deficit | (62,339,400) | (60,828,659) |
Total stockholders' deficit-Cyclone Power Technologies Inc. | (4,714,424) | (3,764,128) |
Non-controlling interest in consolidated subsidiary | 29,039 | 29,039 |
Total Stockholders' Deficit | (4,685,385) | (3,735,089) |
Total Liabilities and Stockholders' Deficit | $ 267,462 | $ 307,063 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Series B preferred stock, par value | $ .0001 | $ .0001 |
Series B preferred stock, shares authorized | 1,000 | 1,000 |
Series B preferred stock, shares issued | 1,000 | 1,000 |
Series B preferred stock, shares outstanding | 1,000 | 1,000 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 6,000,000,000 | 6,000,000,000 |
Common stock, shares issued | 2,109,450,166 | 1,517,400,273 |
Common stock, shares outstanding | 2,109,450,166 | 1,517,400,273 |
Treasury stock, shares | 317,000 | 317,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Statement [Abstract] | ||||
REVENUES | $ 175,000 | $ 175,000 | ||
COST OF GOODS SOLD | 138 | 138 | ||
Gross profit | 174,862 | 174,862 | ||
OPERATING EXPENSES | ||||
Advertising and promotion | 721 | 2,147 | 7,373 | 7,986 |
General and administrative | 319,551 | 269,801 | 856,934 | 655,309 |
Research and development | 65,544 | 57,977 | 162,462 | 131,827 |
Total operating expenses | 385,816 | 329,925 | 1,026,769 | 795,122 |
Operating loss | (210,954) | (329,925) | (851,907) | (795,122) |
OTHER (EXPENSE) INCOME | ||||
Other (expense) | (70,934) | (12,968) | ||
Derivative (expense) income | 78,101 | 543 | (329,366) | 3,320 |
Interest (expense) | (72,511) | (32,914) | (258,534) | (95,356) |
Total other (expense) income | 5,590 | (32,371) | (658,834) | (105,004) |
Loss before income taxes | (205,364) | (362,296) | (1,510,741) | (900,126) |
Income taxes | ||||
Net loss | $ (205,364) | $ (362,296) | $ (1,510,741) | $ (900,126) |
Net loss per common share, basic and diluted | $ 0 | $ 0 | $ 0 | $ 0 |
Weighted average number of common shares outstanding | 1,828,844,965 | 1,445,400,243 | 1,635,855,113 | 1,403,414,280 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (1,510,741) | $ (900,126) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 39,841 | 52,240 |
Issuance of restricted common stock, options and warrants for services | 2,568 | 1,693 |
Loss on debt paid with common stock | 70,934 | 57,383 |
Loss (gain) from derivative liability-notes payable | 408,397 | (3,320) |
Issuance of restricted common stock for services | 5,096 | |
Amortization of derivative debt discount | 39,046 | 11,680 |
Amortization of prepaid interest expenses via common stock and warrants | 6,000 | |
Changes in operating assets and liabilities: | ||
(Increase) in inventory | (831) | (84,007) |
(Increase) in other current assets | (813) | |
Increase in accounts payable and accrued expenses | 698,255 | 251,250 |
Increase in accounts payable and accrued expenses-related parties | 251,250 | 346,833 |
(Decrease) Increase in deferred revenue and deposits | (150,000) | 115,700 |
Net cash used in operating activities | (146,185) | (145,487) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Payment of capitalized leases | (8,928) | |
Increase (decrease) in cash overdraft | 52 | (3,221) |
Proceeds from notes and loans payable | 154,650 | 90,725 |
Repayment of notes and loans payable | (1,500) | |
Increase in related party notes and loans payable | 24,560 | 84,513 |
(Payments) of related party notes and loans payable | (33,668) | (14,715) |
Net cash provided by financing activities | 145,594 | 146,874 |
Net (decrease) increase in cash | (591) | 1,387 |
Cash, beginning of period | 591 | |
Cash, end of period | 1,387 | |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Payment of interest in cash | 4,232 | |
NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Issuance of 585,679,963 shares of Common stock for debt and interest settlement | 418,244 | |
Issuance of 70,000,000 and 125,730,741 shares of Common stock for liability settlement | 123,000 | 240,932 |
Issuance of 100,000,000 and 125,730,741 shares of Common stock for liability settlement | 49,066 | |
Issuance of 6,370,000 and 3,000,000 shares of Common stock for services | $ 5,096 | $ 6,000 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows (Unaudited) (Parenthetical) - shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2017 | |
Debt and Interest Settlement [Member] | ||
Common stock issued, shares | 585,679,963 | |
Liability Settlement Two [Member] | ||
Common stock issued, shares | 70,000,000 | 125,730,741 |
Liability Settlement Three [Member] | ||
Common stock issued, shares | 100,000,000 | |
Services [Member] | ||
Common stock issued, shares | 6,370,000 | 3,000,000 |
Organizational and Significant
Organizational and Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organizational and Significant Accounting Policies | NOTE 1 – ORGANIZATIONAL AND SIGNIFICANT ACCOUNTING POLICIES A. ORGANIZATION AND OPERATIONS Cyclone Power Technologies, Inc. (the “Company”, “our,” “Cyclone”) is the successor entity to the business of Cyclone Technologies LLLP (the “LLLP”), a limited liability limited partnership formed in Florida in September 2004. The LLLP was the original developer and intellectual property holder of the Cyclone engine technology. Initialed 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 a vehicle utilizing the Company’s engine. At September 30, 2017 the company had a 95% controlling interest in Cyclone Performance. B. PRINCIPLES OF CONSOLIDATION AND BASIS OF PRESENTATION The condensed consolidated financial statements include the accounts of the Company and its 95% owned subsidiary Cyclone Performance. All material inter-company transactions and balances have been eliminated in the condensed consolidated financial statements The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles applicable to interim financial information and the requirements of Form 10-Q and Article 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. Interim results are not necessarily indicative of results for a full year. In the opinion of management, all adjustments, consisting of normal journal entries, considered necessary for a fair presentation of the financial position and the results of operations and cash flows for the interim periods have been included. Complete financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2016, as filed with the Securities and Exchange Commission as part of the Company’s Form 10-K. The results of operations for the nine months ended September 30, 2017 are not necessarily indicative of the results of operations to be expected for the full fiscal year ending December 31, 2017. 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 September 30, 2017 and December 31, 2016, the Company maintained cash and overdraft balances at one financial institution. D. COMPUTATION OF INCOME (LOSS) PER SHARE Net income (loss) per share is computed by dividing the net income (loss) by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share is not presented as the conversion of the preferred stock and exercise of outstanding stock options and warrants would have an anti-dilutive effect. As of September 30, 2017 and 2016, total anti-dilutive shares amounted to approximately 15.8 and 14.7 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, and September 30, 2017, the Company does not believe it has any uncertain tax positions that would result in the Company having a liability to the taxing authorities. Interest related to the unrecognized tax benefits is recognized in the consolidated financial statements as a component of income taxes. The Company’s tax returns are subject to examination by the federal and state tax authorities for the years ended 2014 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 material to develop a completed engine. In our former business model, costs included material, labor and allocated overhead to manufacture a completed engine. Costs are periodically evaluated to determine if they have a net realizable value. If the net realizable value is lower than the carrying amount, a reserve is provided. I. FAIR VALUE OF FINANCIAL INSTRUMENTS ASC 820, “ Fair Value Measurements and Disclosures Level 1 — Inputs are quoted prices in active markets for identical assets or liabilities as of the reporting date. Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, as of the reporting date. Level 3 — Unobservable inputs for the asset or liability that reflect management’s own assumptions about the assumptions that market participants would use in pricing the asset or liability as of the reporting date. The summary of fair values and changing values of financial instruments as of January 1, 2017 (beginning of period) and September 30, 2017 (end of period) is as follows: Instrument Beginning of Period Change End of Period Level Valuation Methodology Derivative liabilities $ 754,000 $ 408,397 $ 1,162,397 3 Stochastic Process Forecasting Model Please refer to Note 16 for disclosure and assumptions used to calculate the fair value of the derivative liabilities. J. RESEARCH AND DEVELOPMENT Research and development activities for product development are expensed as incurred. Costs for the three and nine months ended September 30, 2017 and 2016 were $65,544, $162,462, $57,977 and $131,827, 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 Recent FASB issuances: Update 2017-03 Update 2017-01 The Company is still in the process of evaluating the effect of adoption of theses Updates on its financial position, results of operations and cash flows and the effective date of application is 2018. Modified in 2016- Revenue Recognition –ASC 606 In May 2014, and subsequently modified, the FASB issued ASC 606 Revenue from Contracts with Customers as guidance on the recognition of respective revenue from contracts Revenue recognition will depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance also requires disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The principle sections of the guidance related to: 1. Determine if there is a contract. 2. Identify the performance obligations 3. Establish the contract price 4. Allocate the contract price to the various phases of the contract The implementation guidance permits two methods: retrospectively to each prior reporting period presented, or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (the cumulative catch-up transition method). Commencing in 2018 the company will adopt the guidance and apply the cumulative catch-up transition method. The transition adjustment to be recorded to stockholders’ equity upon adoption of the new standard is not expected to be material. Q. CONCENTRATION OF RISK The Company does not have any off-balance sheet concentrations of credit risk. The Company expects cash and accounts receivable to be the two assets most likely to subject the Company to concentrations of credit risk. The Company’s policy is to maintain its cash with high credit quality financial institutions to limit its risk of loss exposure. As of September 30, 2017, the Company maintained its cash in one quality financial institution. The Company has not experienced any losses in its bank accounts through September 30, 2017. 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 |
Sep. 30, 2017 | |
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 $1.5 million and $0.9 for the nine months ended September 30, 2017 and 2016 respectively. The cumulative deficit since inception is approximately $62.3 million. The Company has a working capital deficit at September 30, 2017 of approximately $4.9 million. These factors raise substantial doubt about the Company’s ability to continue as a going concern. There is no guarantee whether the Company will be able to generate enough revenue and/or raise capital to support its operations. This raises substantial doubt about the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on management’s plans which include implementation of its business model to generate revenue from development contracts, licenses and product sales, and continuing to raise funds through debt or equity raises. The Company will also likely continue to rely upon related-party debt or equity financing. The condensed consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties. The Company is currently raising working capital to fund its operations via private placements of debt, advance contract payments (deferred revenue), advances from and deferred payments to related parties and the timing of payment of accrued liabilities. |
Inventory, Net
Inventory, Net | 9 Months Ended |
Sep. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Inventory, Net | NOTE 3 – INVENTORY, NET Inventory principally consists of raw material to develop an engine. Inventory, net consists of September 30, 2017 December 31, 2016 Raw materials $ 27,498 $ 26,667 Total $ 27,498 $ 26,667 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 | 9 Months Ended |
Sep. 30, 2017 | |
PROPERTY AND EQUIPMENT | |
Property and Equipment, Net | NOTE 4 – PROPERTY AND EQUIPMENT, NET Property and equipment consists of the following: September 30, 2017 December 31, 2016 Display equipment for trade shows $ 6,270 $ 6,270 Leasehold improvements and furniture and fixtures 93,922 93,922 Equipment and computers 202,578 202,578 Total 302,770 302,770 Accumulated depreciation (230,253 ) (209,498 ) Net property and equipment $ 72,517 $ 93,272 Depreciation expense for the nine months ended September 30, 2017 and 2016 was $20,755 and $25,924, respectively. |
Patents, Trademarks and Copyrig
Patents, Trademarks and Copyrights | 9 Months Ended |
Sep. 30, 2017 | |
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 September 30, 2017 and December 31, 2016 were $159,392 and $178,478, respectively. For the nine months ended September 30, 2017 and for the year ended December 31, 2016, the Company capitalized $0 and $0, respectively, of expenditures related to these assets. As of September 30, 2017, the Company had 15 patents issued on its technology both in the U.S. and internationally, and six trademarks in the U.S. Patents, trademarks and copyrights are amortized over the life of the intellectual property which is 15 years. Amortization expenses for the nine months ended September 30, 2017 and 2016 were $19,086 and $26,316, respectively. |
Notes and Other Loans Payable
Notes and Other Loans Payable | 9 Months Ended |
Sep. 30, 2017 | |
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: September 30, 2017 December 31, 2016 12% convertible notes payable, maturing at various dates from November 2013 through April 2016 (A) $ 57,920 $ 42,951 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 76,000 10% convertible notes payable, maturing at various dates from December 2015 through January 2016 (D) 26,192 29,303 10% convertible notes payable maturing at various dates from February 2015 through August 2015 ( F ) 117,800 116,200 12% convertible notes payable, maturing at various dates from April 2015 through May 2015 ( G ) 60,000 85,000 10% note payable maturing January 2017 - 46,000 10% note payable, maturing Feb 3, 2018 50,000 50,000 Various notes payable, maturing 2016 and 2017 22,957 13,500 Note payable, maturing Oct. 2016 (H) 27,000 27,000 Demand Note - 6,725 Total non-related party notes-current portion $ 457,832 $ 512,642 (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 are included in accounts payable and accrued liabilities. (C) Notes issued net of discount from derivative liabilities (fully amortized). At September 30, 2017, 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 September 30, 2017, the Company held 1 billion 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 has arranged a settlement. Unpaid interest, default penalties and default interest are included in accounts payable and accrued liabilities. (H) Interest of $3,000 to be paid in 1,500,000 shares of restricted common stock. This note is in default. B. RELATED PARTIES A summary of related party notes and other loans payable is as follows: September 30, 2017 December 31, 2016 6% demand loans per Operations Agreement with Schoell Marine Inc., a company owned by Cyclone’s Chairman and controlling shareholder (A) $ 211,874 $ 169,751 6% non-collateralized loans from officer and shareholder, payable on demand. 94,584 107,842 12% non-collateralized loans from officer and shareholder, payable on demand 25,042 21,044 Accrued Interest 53,152 95,123 Total current related party notes, inclusive of accrued interest $ 384,652 $ 393,760 (A) This note arose from rent, equipment leases, 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. |
Related Party Transactions- Def
Related Party Transactions- Deferred Compensation | 9 Months Ended |
Sep. 30, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions- Deferred Compensation | NOTE 7 – RELATED PARTY TRANSACTIONS- DEFERRED COMPENSATION Included in accounts payable and accrued expenses - related parties as of September 30, 2017 and December 31, 2016 are $796,475 and $545,225 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. |
Preferred Stock
Preferred Stock | 9 Months Ended |
Sep. 30, 2017 | |
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 | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
Stock Transactions | NOTE 9 – STOCK TRANSACTIONS The Company authorized an increase of Common Stock to 6 Billion shares in the last quarter of 2017. This is a requirement by debt covenants to cover old convertible debt. This is required as the stock price has fallen and shares have to be available at 4 times the conversion rate. During the nine months ended September 30, 2017, the Company: a- Amortized (based on vesting) $2,568 of common stock options for employee services. b- Issued approximately 585.7 million shares of common stock pursuant to conversions of approximately $418,000 of notes payable, accrued liabilities and related interest c- The Company issued 6.4 million shares of common stock valued at approximately $5,000 for services d- Converted $134,877 of derivatives associated with certain debt that was converted into common stock. |
Stock Options and Warrants
Stock Options and Warrants | 9 Months Ended |
Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Options and Warrants | NOTE 10 – STOCK OPTIONS AND WARRANTS A. COMMON STOCK OPTION Per the employment contracts with certain officers, for the nine months ended September 30, 2017, the company issued 1,350,000 common stock options, valued at $1,260 (pursuant to the Black Scholes valuation model) that are exercisable into shares of common stock at an average exercise price of $.0009 and with a maturity life of 10 years. For the nine months year ended September 30, 2017, the amortization of stock options was $2,568 and the unamortized balance was $1,089. A summary of the common stock options for the period from December 31, 2016 through September 30, 2017 follows: Number Outstanding Weighted Avg. Exercise Price Weighted Avg. Remaining Contractual Life (Years) Balance, December 31, 2016 14,030,000 $ .0960 5.3 Options issued 1,350,000 .0009 9.75 Options exercised - - - Expired - - - Balance, September 30 , 2017 15,380,000 $ .0878 5.0 The vested and exercisable options at period end follows: Exercisable/ Vested Options Outstanding Weighted Avg. Exercise Price Weighted Avg. Remaining Contractual Life (Years) Balance September 30 , 2017 14,930,000 $ .085 4.86 Additional vesting by December 31, 2017 450,000 .0024 9.0 The fair value of new stock options, granted using the Black-Scholes option pricing model was calculated using the following assumptions: Nine Months Ended September 30, 2017 Nine Months Ended September 30, 2016 Risk free interest rate 1.5-1.62% .71-.88% Expected volatility 122-134% 136-139% Expected term 3 3 Expected dividend yield 0 % 0 % Average value per options and warrants $ .0004-.0015 $ .0019-.0020 Expected volatility is based on historical volatility of the Company’s common stock price. Short Term U.S. Treasury rates were utilized at the risk-free interest rate. The expected term of the options and warrants was calculated using the alternative simplified method newly codified as ASC 718 “ Accounting for Stock Based Compensation, B. COMMON STOCK WARRANTS A summary of outstanding vested warrant activity for the period from December 31, 2016 to September 30, 2017 follows: Number Outstanding Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Common Stock Warrants Balance, December 31, 2016 500,000 $ .08 .67 Warrants issued - - - Warrants expired - - - Warrants expired (500,000 ) - - Balance, September 30, 2017 - $ - - |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2017 | |
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 Nine months ended September 30, 2017 and 2016 are as follows: Nine Months ended September 30 , 2017 Amount Nine Months ended September 30, 2016 Amount Tax benefit at U.S. statutory rate 34 % $ 273,037 34 % $ 233,075 State taxes, net of federal benefit 4 % 32,122 4 % 27,421 Change in valuation allowance (38 )% $ (305,159 ) (38 )% $ (260,496 ) - - The tax effect of temporary differences that give rise to significant portions of the deferred tax assets and liabilities at September 30, 2017 and December 31, 2016 consisted of the following: Deferred Tax Assets September 30, 2017 December 31, 2016 Net Operating Loss Carry-forward $ 10,981,661 $ 10,577,607 Deferred Tax Liabilities – Accrued Officers’ Salaries (978,681 ) (900,306 ) Net Deferred Tax Assets 10,002,980 9,677,301 Valuation Allowance (10,002,980 ) (9,677,301 ) Total Net Deferred Tax Assets $ - $ - As of September 30, 2017, the Company had a net operating loss carry forward for income tax reporting purposes of approximately $23.6 million that may be offset against future taxable income through 2031. Current tax laws limit the amount of loss available to be offset against future taxable income when a substantial change in ownership occurs. Therefore, the amount available to offset future taxable income may be limited. No tax asset has been reported in the financial statements because the Company believes there is a 50% or greater chance the carry forwards will expire unused. Accordingly, the potential tax benefits of the loss carry forwards are offset by a valuation allowance of the same amount. |
Lease Obligations
Lease Obligations | 9 Months Ended |
Sep. 30, 2017 | |
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 lease period ended December 2016 and the current lease is monthly with a 3% rate increase. Occupancy costs for the nine months ended September 30, 2017 and 2016 were $46,038 and $48,200, respectively. B. CAPITALIZED LEASE OBLIGATIONS Total lease payments made for the nine months ended September 30, 2017 were $0. The company is in default on its remaining capitalized lease with Leaf Capital Funding, LLC. Effective October 13, 2017 the Company was subject to a summary judgment of $ 37,278 plus attorney fees for non-payment of 3 capitalized leases from Marlin Business Bank. This amount is including $11,379 of past due lease payments, accelerated lease payments, late charges and other fees. The $37,278 has been reflected in accrued expenses with an appropriate reduction of the capitalized lease liability. In the third quarter of 2017, the company recognized a summary judgment of $7,266 plus accrued interest for non-payment of a capitalized lease from Navitas Lease Corp. This amount is including $4,177 of past due lease payments, accelerated lease payments, interest expense, late charges and other fees. The $7,266 has been reflected in accrued liabilities with an appropriate reduction of the capitalized lease liability. The balance of capitalized lease obligations payable at September 30, 2017 and December 31, 2016 was $5,522 and $39,848, respectively. Future lease payments are: 2017 $ 5,522 2018 0 2019 0 2020 0 2021 0 $ 5,522 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 13 – COMMITMENTS AND CONTINGENCIES The Company has employment agreements with Harry Schoell, Chairman and CTO (previously, CEO), at $150,000 per year and Frankie Fruge, President, at $120,000 per year; (collectively, the “Executives”). These agreements provide for a term of three (3) years from their Effective Date (July 2007 with automatically renewing successive one-year periods starting on the end of the second anniversary of the Effective Date. If the Executive is terminated “without cause” or pursuant to a “change in control” of the Company, as both defined in the respective agreements, the Executive shall be entitled to (i) any unpaid Base Salary accrued through the effective date of termination, (ii) the Executive’s Base Salary at the rate prevailing at such termination through 12 months from the date of termination or the end of his Term then in effect, whichever is longer, and (iii) any performance bonus that would otherwise be payable to the Executive were he/she not terminated, during the 12 months following his or her termination. Since inception of the company, these officers have not been paid any salary |
Consolidated Subsidiary
Consolidated Subsidiary | 9 Months Ended |
Sep. 30, 2017 | |
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 September 30, 2017, 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 | 9 Months Ended |
Sep. 30, 2017 | |
Deferred Revenue Disclosure [Abstract] | |
Receivables, Deferred Revenue and Backlog | NOTE 15 – RECEIVABLES, DEFERRED REVENUE AND BACKLOG As of September 30, 2017, 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, three (3) other customers advanced $206,950 as deposits towards payments on $355,000 of contracts for engines currently estimated to be delivered during 2018 and license deposits. In the third quarter of 2017, the company recognized $150,000 of deferred revenue from FSDS upon the delivery of the engine design and documentation (as per the contract). The company also delivered the first of 2 engines for evaluation and testing. The Danish military had provided funds to FSDS for the militarization of the Cyclone engine project. FSDS has been placed under Danish government receivership and the Company has reached out to the Danish Ministry of Defense and other Danish military contractors to complete the contract. |
Derivative Financial Instrument
Derivative Financial Instruments | 9 Months Ended |
Sep. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | NOTE 16 – DERIVATIVE FINANCIAL INSTRUMENTS In the second quarter of 2017 we again entered into additional convertible debt agreements. The current convertible notes have conversion prices into common stock that ranged from a discount of 30% to 45% of the lowest closing prices in the 10 to 20 trading days prior to the conversion. Under provisions of ASC Topic 815-40, this conversion feature triggered derivative accounting treatment because the convertible note was convertible into an indeterminable number of shares of common stock. The fair value of the embedded conversion option was required to be presented as a derivative liability and adjusted to fair value at each reporting date, with changes in fair value reported in the condensed consolidated statements of operation. In the Nine months ended September 30, 2017, the Company recorded a $118,076 non-cash charge to interest expense (reflective of debt discount amortization), and a non-cash charge of $329,366 of derivative losses related to adjusting the derivative liability to fair value. At September 30, 2017, the derivative related fair value of debt and related convertible liabilities was $1,162,397. |
Litigation
Litigation | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Litigation | NOTE 17 – LlTIGATION 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 of September 30, 2017, outstanding interest, default interest and default judgment penalties are included in accrued liabilities. 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 has arranged a settlement. As of September 30, 2017, outstanding interest, default interest and default judgment penalties are included in accrued liabilities. Effective October 13, 2017 the Company was subject to a summary judgement of $ 37,278 plus attorney fees for nonpayment of 3 capitalized leases from Marlin Buesinee Bank. This amount includes $11,379 of past due lease payments, accelerated lease payments, late charges and other fees. The $37,278 has been reflected in accrued liabilities with an appropriate reduction of capitalized lease liability. In the third quarter of 2017 the company recognized a summary judgment of $7,266 plus accrued interest for non-payment of a capitalized lease from Navitas Lease Corp. This amount is including $4,177 of past due lease payments, accelerated lease payments, interest expense, late charges and other fees. The $7,266 has been reflected in accrued liabilities with an appropriate reduction of capitalized lease liability. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 18 – SUBSEQUENT EVENTS Subsequent to the fourth quarter of 2017, the Company engaged in the following activities: a- FSDS, is under Danish government receivership for reorganization. Prior to this receivership, the Danish military had provided funds FSDS to complete the militarization of the Cyclone engine project. We have reached out to the Danish Ministry of Defense and various other Danish military contractors to complete this project. b-The Company issued approximately 335 million shares of common stock pursuant to conversions of debts and related interest and approximately 282 million shares to satisfy accrued liabilities for consulting services. c- The Company authorized an increase of Common Stock to 6 Billion shares. This is a requirement by debt covenants to cover old convertible debt. This is required as the stock price has fallen and shares have to be available at 4 times the conversion rate. d. Plunkett Power has paid for the changes and updates of the CAD drawings for the production models of the Mark 1 ( 9 HP) and Mark 3 ( 25 HP) engines. The Company has been in meetings over the last 5 months with the production engineers for completion of the updated production engine models. e.-Our engines have been updated and now serve both as a waste heat engine and an efficient Rankin Cycle engine effectively reducing the cost to manufacture. The waste heat and solar engine models are expected to be ready for sales by the end of the first quarter 2018 and for integration into the TAW generator system. f.- The Company is in the process of evaluating the updating and / or filing of new patents to protect our revised production models. |
Organizational and Significan25
Organizational and Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [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. Initialed 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 a vehicle utilizing the Company’s engine. At September 30, 2017 the company had a 95% controlling interest in Cyclone Performance. |
Principles of Consolidation and Basis of Presentation | B. PRINCIPLES OF CONSOLIDATION AND BASIS OF PRESENTATION The condensed consolidated financial statements include the accounts of the Company and its 95% owned subsidiary Cyclone Performance. All material inter-company transactions and balances have been eliminated in the condensed consolidated financial statements The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles applicable to interim financial information and the requirements of Form 10-Q and Article 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. Interim results are not necessarily indicative of results for a full year. In the opinion of management, all adjustments, consisting of normal journal entries, considered necessary for a fair presentation of the financial position and the results of operations and cash flows for the interim periods have been included. Complete financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2016, as filed with the Securities and Exchange Commission as part of the Company’s Form 10-K. The results of operations for the nine months ended September 30, 2017 are not necessarily indicative of the results of operations to be expected for the full fiscal year ending December 31, 2017. 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 September 30, 2017 and December 31, 2016, the Company maintained cash and overdraft balances at one financial institution. |
Computation of Income (Loss) Per Share | D. COMPUTATION OF INCOME (LOSS) PER SHARE Net income (loss) per share is computed by dividing the net income (loss) by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share is not presented as the conversion of the preferred stock and exercise of outstanding stock options and warrants would have an anti-dilutive effect. As of September 30, 2017 and 2016, total anti-dilutive shares amounted to approximately 15.8 and 14.7 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, and September 30, 2017, the Company does not believe it has any uncertain tax positions that would result in the Company having a liability to the taxing authorities. Interest related to the unrecognized tax benefits is recognized in the consolidated financial statements as a component of income taxes. The Company’s tax returns are subject to examination by the federal and state tax authorities for the years ended 2014 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 material to develop a completed engine. In our former business model, costs included material, labor and allocated overhead to manufacture a completed engine. Costs are periodically evaluated to determine if they have a net realizable value. If the net realizable value is lower than the carrying amount, a reserve is provided. |
Fair Value of Financial Instruments | I. FAIR VALUE OF FINANCIAL INSTRUMENTS ASC 820, “ Fair Value Measurements and Disclosures Level 1 — Inputs are quoted prices in active markets for identical assets or liabilities as of the reporting date. Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, as of the reporting date. Level 3 — Unobservable inputs for the asset or liability that reflect management’s own assumptions about the assumptions that market participants would use in pricing the asset or liability as of the reporting date. The summary of fair values and changing values of financial instruments as of January 1, 2017 (beginning of period) and September 30, 2017 (end of period) is as follows: Instrument Beginning of Period Change End of Period Level Valuation Methodology Derivative liabilities $ 754,000 $ 408,397 $ 1,162,397 3 Stochastic Process Forecasting Model Please refer to Note 16 for disclosure and assumptions used to calculate the fair value of the derivative liabilities. |
Research and Development | J. RESEARCH AND DEVELOPMENT Research and development activities for product development are expensed as incurred. Costs for the three and nine months ended September 30, 2017 and 2016 were $65,544, $162,462, $57,977 and $131,827, 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 Recent FASB issuances: Update 2017-03 Update 2017-01 The Company is still in the process of evaluating the effect of adoption of theses Updates on its financial position, results of operations and cash flows and the effective date of application is 2018. Modified in 2016- Revenue Recognition –ASC 606 In May 2014, and subsequently modified, the FASB issued ASC 606 Revenue from Contracts with Customers as guidance on the recognition of respective revenue from contracts Revenue recognition will depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance also requires disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The principle sections of the guidance related to: 1. Determine if there is a contract. 2. Identify the performance obligations 3. Establish the contract price 4. Allocate the contract price to the various phases of the contract The implementation guidance permits two methods: retrospectively to each prior reporting period presented, or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (the cumulative catch-up transition method). Commencing in 2018 the company will adopt the guidance and apply the cumulative catch-up transition method. The transition adjustment to be recorded to stockholders’ equity upon adoption of the new standard is not expected to be material. |
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 September 30, 2017, the Company maintained its cash in one quality financial institution. The Company has not experienced any losses in its bank accounts through September 30, 2017. The Company purchases raw material and components from multiple sources, none of which may be considered a principal or material supplier. If necessary, the Company could replace these suppliers with minimal effect on its business operations. |
Derivative Financial Instruments | R. DERIVATIVE FINANCIAL INSTRUMENTS Accounting and reporting standards for derivative instruments and for hedging activities were codified by ASC Topic 815, Derivatives and Hedging |
Organizational and Significan26
Organizational and Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Fair Value of Financial Instrument | The summary of fair values and changing values of financial instruments as of January 1, 2017 (beginning of period) and September 30, 2017 (end of period) is as follows: Instrument Beginning of Period Change End of Period Level Valuation Methodology Derivative liabilities $ 754,000 $ 408,397 $ 1,162,397 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) | 9 Months Ended |
Sep. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Net | Inventory, net consists of September 30, 2017 December 31, 2016 Raw materials $ 27,498 $ 26,667 Total $ 27,498 $ 26,667 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
PROPERTY AND EQUIPMENT | |
Schedule of Property and Equipment, Net | Property and equipment consists of the following: September 30, 2017 December 31, 2016 Display equipment for trade shows $ 6,270 $ 6,270 Leasehold improvements and furniture and fixtures 93,922 93,922 Equipment and computers 202,578 202,578 Total 302,770 302,770 Accumulated depreciation (230,253 ) (209,498 ) Net property and equipment $ 72,517 $ 93,272 |
Notes and Other Loans Payable (
Notes and Other Loans Payable (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
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: September 30, 2017 December 31, 2016 12% convertible notes payable, maturing at various dates from November 2013 through April 2016 (A) $ 57,920 $ 42,951 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 76,000 10% convertible notes payable, maturing at various dates from December 2015 through January 2016 (D) 26,192 29,303 10% convertible notes payable maturing at various dates from February 2015 through August 2015 ( F ) 117,800 116,200 12% convertible notes payable, maturing at various dates from April 2015 through May 2015 ( G ) 60,000 85,000 10% note payable maturing January 2017 - 46,000 10% note payable, maturing Feb 3, 2018 50,000 50,000 Various notes payable, maturing 2016 and 2017 22,957 13,500 Note payable, maturing Oct. 2016 (H) 27,000 27,000 Demand Note - 6,725 Total non-related party notes-current portion $ 457,832 $ 512,642 (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 are included in accounts payable and accrued liabilities. (C) Notes issued net of discount from derivative liabilities (fully amortized). At September 30, 2017, 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 September 30, 2017, the Company held 1 billion 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 has arranged a settlement. Unpaid interest, default penalties and default interest are included in accounts payable and accrued liabilities. (H) Interest of $3,000 to be paid in 1,500,000 shares of restricted 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: September 30, 2017 December 31, 2016 6% demand loans per Operations Agreement with Schoell Marine Inc., a company owned by Cyclone’s Chairman and controlling shareholder (A) $ 211,874 $ 169,751 6% non-collateralized loans from officer and shareholder, payable on demand. 94,584 107,842 12% non-collateralized loans from officer and shareholder, payable on demand 25,042 21,044 Accrued Interest 53,152 95,123 Total current related party notes, inclusive of accrued interest $ 384,652 $ 393,760 (A) This note arose from rent, equipment leases, 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) | 9 Months Ended |
Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Common Stock Options | A summary of the common stock options for the period from December 31, 2016 through September 30, 2017 follows: Number Outstanding Weighted Avg. Exercise Price Weighted Avg. Remaining Contractual Life (Years) Balance, December 31, 2016 14,030,000 $ .0960 5.3 Options issued 1,350,000 .0009 9.75 Options exercised - - - Expired - - - Balance, September 30 , 2017 15,380,000 $ .0878 5.0 |
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 September 30 , 2017 14,930,000 $ .085 4.86 Additional vesting by December 31, 2017 450,000 .0024 9.0 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The fair value of new stock options, granted using the Black-Scholes option pricing model was calculated using the following assumptions: Nine Months Ended September 30, 2017 Nine Months Ended September 30, 2016 Risk free interest rate 1.5-1.62% .71-.88% Expected volatility 122-134% 136-139% Expected term 3 3 Expected dividend yield 0 % 0 % Average value per options and warrants $ .0004-.0015 $ .0019-.0020 |
Schedule of Outstanding Vested Warrant Activity | A summary of outstanding vested warrant activity for the period from December 31, 2016 to September 30, 2017 follows: Number Outstanding Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Common Stock Warrants Balance, December 31, 2016 500,000 $ .08 .67 Warrants issued - - - Warrants expired - - - Warrants expired (500,000 ) - - Balance, September 30, 2017 - $ - - |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
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 Nine months ended September 30, 2017 and 2016 are as follows: Nine Months ended September 30 , 2017 Amount Nine Months ended September 30, 2016 Amount Tax benefit at U.S. statutory rate 34 % $ 273,037 34 % $ 233,075 State taxes, net of federal benefit 4 % 32,122 4 % 27,421 Change in valuation allowance (38 )% $ (305,159 ) (38 )% $ (260,496 ) - - |
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 September 30, 2017 and December 31, 2016 consisted of the following: Deferred Tax Assets September 30, 2017 December 31, 2016 Net Operating Loss Carry-forward $ 10,981,661 $ 10,577,607 Deferred Tax Liabilities – Accrued Officers’ Salaries (978,681 ) (900,306 ) Net Deferred Tax Assets 10,002,980 9,677,301 Valuation Allowance (10,002,980 ) (9,677,301 ) Total Net Deferred Tax Assets $ - $ - |
Lease Obligations (Tables)
Lease Obligations (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Leases [Abstract] | |
Schedule of Future Minimum Lease Payments for Capital Leases | Future lease payments are: 2017 $ 5,522 2018 0 2019 0 2020 0 2021 0 $ 5,522 |
Organizational and Significan33
Organizational and Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Antidilutive securities excluded from computation of earnings per share | 15,800,000 | 14,700,000 | ||
Research and development expense | $ 65,544 | $ 57,977 | $ 162,462 | $ 131,827 |
Cyclone Performance LLC [Member] | ||||
Equity method investment, ownership percentage | 95.00% | 95.00% |
Organizational and Significan34
Organizational and Significant Accounting Policies - Schedule of Fair Value of Financial Instrument (Details) | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Derivative liabilities, Beginning of Period | $ 754,000 |
Derivative liabilities, End of Period | 1,162,397 |
Fair Value, Inputs, Level 3 [Member] | |
Derivative liabilities, Beginning of Period | 754,000 |
Derivative liabilities, Change | 408,397 |
Derivative liabilities, End of Period | $ 1,162,397 |
Derivative liabilities, Valuation Methodology | Stochastic Process Forecasting Model |
Organizational and Significan35
Organizational and Significant Accounting Policies - Schedule of Estimated Useful Lives of Property and Equipment (Details) | 9 Months Ended |
Sep. 30, 2017 | |
Display Equipment For Trade Shows [Member] | |
Property and equipment estimated useful lives | 3 years |
Leasehold Improvements and Furniture and Fixtures [Member] | Minimum [Member] | |
Property and equipment estimated useful lives | 10 years |
Leasehold Improvements and Furniture and Fixtures [Member] | Maximum [Member] | |
Property and equipment estimated useful lives | 15 years |
Shop Equipment [Member] | |
Property and equipment estimated useful lives | 7 years |
Computers [Member] | |
Property and equipment estimated useful lives | 3 years |
Going Concern (Details Narrativ
Going Concern (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||
Income (loss) from operating and other losses and expenses | $ 205,364 | $ 362,296 | $ 1,510,741 | $ 900,126 | |
Accumulated deficit | 62,339,400 | 62,339,400 | $ 60,828,659 | ||
Working capital deficit | $ 4,900,000 | $ 4,900,000 |
Inventory, Net - Schedule of In
Inventory, Net - Schedule of Inventory, Net (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Inventory Disclosure [Abstract] | ||
Raw material | $ 27,498 | $ 26,667 |
Total | $ 27,498 | $ 26,667 |
Property and Equipment, Net (De
Property and Equipment, Net (Details Narrative) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
PROPERTY AND EQUIPMENT | ||
Depreciation expense | $ 20,755 | $ 25,924 |
Property and Equipment, Net - S
Property and Equipment, Net - Schedule of Property and Equipment, Net (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Property and equipment gross | $ 302,770 | $ 302,770 |
Accumulated depreciation | (230,253) | (209,498) |
Net property and equipment | 72,517 | 93,272 |
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 | $ 202,578 |
Patents, Trademarks and Copyr40
Patents, Trademarks and Copyrights (Details Narrative) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2017USD ($)Patents | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Net patents, trademarks and copyrights | $ 159,392 | $ 178,478 | |
Patents, trademarks and copyrights capitalized | $ 0 | $ 0 | |
Number of patents | Patents | 15 | ||
Finite-lived intangible asset, useful life | 15 years | ||
Amortization expenses | $ 19,086 | $ 26,316 |
Notes and Other Loans Payable -
Notes and Other Loans Payable - Schedule of Non-related Party Notes and Other Loans Payable (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 | |
Total non-related party notes-current portion | $ 457,832 | $ 512,642 | |
12% Convertible Notes Payable [Member] | |||
Total non-related party notes-current portion | [1] | 57,920 | 42,951 |
10% Convertible Notes Payable [Member] | |||
Total non-related party notes-current portion | [2] | 19,963 | 19,963 |
10% Convertible Notes Payable [Member] | |||
Total non-related party notes-current portion | [3] | 76,000 | 76,000 |
10% Convertible Notes Payable [Member] | |||
Total non-related party notes-current portion | [4] | 26,192 | 29,303 |
10% Convertible Notes Payable [Member] | |||
Total non-related party notes-current portion | [5] | 117,800 | 116,200 |
12% Convertible Notes Payable [Member] | |||
Total non-related party notes-current portion | [6] | 60,000 | 85,000 |
10% Note Payable [Member] | |||
Total non-related party notes-current portion | 46,000 | ||
10% Note Payable [Member] | |||
Total non-related party notes-current portion | 50,000 | 50,000 | |
Various Notes Payable [Member] | |||
Total non-related party notes-current portion | 22,957 | 13,500 | |
Note Payable [Member] | |||
Total non-related party notes-current portion | [7] | 27,000 | 27,000 |
Demand Note [Member] | |||
Total non-related party notes-current portion | $ 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 are included in accounts payable and accrued liabilities. | ||
[3] | Notes issued net of discount from derivative liabilities (fully amortized). At September 30, 2017, 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 September 30, 2017, the Company held 1 billion 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 has arranged a settlement. Unpaid interest, default penalties and default interest is included in accounts payable and accrued liabilities. | ||
[7] | Interest of $3,000 to be paid in 1,500,000 shares of restricted common stock. This note is in default. |
Notes and Other Loans Payable42
Notes and Other Loans Payable - Schedule of Non-related Party Notes and Other Loans Payable (Details) (Parenthetical) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Conversion of debt shares converted | 585,700,000 | |
12% Convertible Notes Payable [Member] | ||
Convertible notes payable, maturity date description | November 2013 through April 2016 | November 2013 through April 2016 |
Original discount rate | 10.00% | 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 | $ 175,000 |
10% Convertible Notes Payable [Member] | ||
Convertible notes payable, maturity date description | May 2015 through February 2016 | May 2015 through February 2016 |
10% Convertible Notes Payable [Member] | Derivative Liabilities [Member] | ||
Conversion of debt shares converted | 97,000,000 | |
10% Convertible Notes Payable [Member] | ||
Convertible notes payable, maturity date description | December 2015 through January 2016 | December 2015 through January 2016 |
10% Convertible Notes Payable [Member] | ||
Convertible notes payable, maturity date description | February 2015 through August 2015 | February 2015 through August 2015 |
10% Convertible Notes Payable [Member] | Derivative Liabilities [Member] | ||
Conversion of debt shares converted | 1,000,000,000 | |
12% Convertible Notes Payable [Member] | ||
Convertible notes payable, maturity date description | April 2015 through May 2015 | April 2015 through May 2015 |
12% Convertible Notes Payable [Member] | Derivative Liabilities [Member] | ||
Payments for legal settlements | $ 150,000 | $ 150,000 |
10% Note Payable [Member] | ||
Note payable maturity date | Jan. 31, 2017 | Jan. 31, 2017 |
10% Note Payable [Member] | ||
Note payable maturity date | Feb. 3, 2018 | Feb. 3, 2018 |
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 |
Restricted common stock, shares | 1,500,000 | 1,500,000 |
Notes and Other Loans Payable43
Notes and Other Loans Payable - Schedule of Related Party Notes (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 | |
Total current related party notes, inclusive of accrued interest | $ 384,652 | $ 393,760 | |
6% Percent Demand Loans Per Operations Agreement With Schoell Marine Inc [Member] | |||
Total current related party notes, inclusive of accrued interest | [1] | 211,874 | 169,751 |
6% Percent Non-collateralized Loans from Officer and Shareholder [Member] | |||
Total current related party notes, inclusive of accrued interest | 94,584 | 107,842 | |
12% Percent Non-collateralized Loans from Officer and Shareholder [Member] | |||
Total current related party notes, inclusive of accrued interest | 25,042 | 21,044 | |
Accrued Interest [Member] | |||
Total current related party notes, inclusive of accrued interest | $ 53,152 | $ 95,123 | |
[1] | This note arose from rent, equipment leases, 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 Payable44
Notes and Other Loans Payable - Schedule of Related Party Notes (Details) (Parenthetical) | Sep. 30, 2017 | Dec. 31, 2016 |
Schoell Marine [Member] | ||
Debt instrument note bears an interest rate | 6.00% | 6.00% |
6% Percent Non-collateralized Loans from Officer and Shareholder [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- D45
Related Party Transactions- Deferred Compensation (Details Narrative) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Related Party Transactions [Abstract] | ||
Accounts payable and accrued expenses - related parties | $ 796,475 | $ 545,225 |
Preferred Stock (Details Narrat
Preferred Stock (Details Narrative) | 9 Months Ended |
Sep. 30, 2017shares | |
Voting control percentage | 51.00% |
Series B Preferred Stock [Member] | |
Preferred stock shares convertible with common stock | 1,000 |
Stock Transactions (Details Nar
Stock Transactions (Details Narrative) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
Equity [Abstract] | ||
Common stock, shares authorized | 6,000,000,000 | 6,000,000,000 |
Conversion of stock, description | This is required as the stock price has fallen and shares have to be available at 4 times the conversion rate. | |
Amortized common stock options based on vesting | $ 2,568 | |
Number of common stock shares pursuant to conversion of notes payable, accrued liabilities and related interest | 585,700,000 | |
Number of common stock pursuant to conversion of notes payable, accrued liabilities and related interest | $ 418,000 | |
Stock issued during period, shares, issued for services | 6,400,000 | |
Stock issued during period, value, issued for services | $ 5,000 | |
Conversion of Stock, Amount Converted | $ 134,877 |
Stock Options and Warrants (Det
Stock Options and Warrants (Details Narrative) | 9 Months Ended |
Sep. 30, 2017USD ($)$ / sharesshares | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-based compensation arrangement by share-based payment award, options, grants in period, gross | shares | 1,350,000 |
Share-based compensation arrangement by share-based payment award, options, grants in period value | $ 1,260 |
Share-based compensation arrangements by share-based payment award, options, grants in period, weighted average exercise price (in dollars per share) | $ / shares | $ 0.0009 |
Stock options issued during period, maturity life | 10 years |
Share-based compensation | $ 2,568 |
Employee service share-based compensation, nonvested awards, compensation cost not yet recognized | $ 1,089 |
Stock Options and Warrants - Sc
Stock Options and Warrants - Schedule of Common Stock Options (Details) | 9 Months Ended |
Sep. 30, 2017$ / sharesshares | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Number Outstanding, Balance | shares | 14,030,000 |
Number Outstanding, Options issued | shares | 1,350,000 |
Number Outstanding, Options exercised | shares | |
Number Outstanding, Options Expired | shares | |
Number Outstanding, Balance | shares | 15,380,000 |
Weighted Avg Exercise Price, Balance | $ / shares | $ 0.0960 |
Weighted Avg Exercise Price, Options issued | $ / shares | 0.0009 |
Weighted Avg Exercise Price, Options exercised | $ / shares | |
Weighted Avg Exercise Price, Options Expired | $ / shares | |
Weighted Avg Exercise Price, Balance | $ / shares | $ 0.0878 |
Weighted Avg Remaining Contractual Life (Years), Beginning Balance | 5 years 3 months 19 days |
Weighted Avg Remaining Contractual Life (Years), Options issued | 9 years 9 months |
Weighted Avg Remaining Contractual Life (years), Ending Balance | 5 years |
Stock Options and Warrants - 50
Stock Options and Warrants - Schedule of Vested and Exercisable Options (Details) | 9 Months Ended |
Sep. 30, 2017$ / sharesshares | |
Exercisable/Vested Options Outstanding | shares | 14,930,000 |
Weighted Avg Exercise Price | $ / shares | $ 0.085 |
Weighted Avg Remaining Contractual Life (Years) | 4 years 10 months 10 days |
Share-based Compensation Award, Tranche One [Member] | |
Exercisable/Vested Options Outstanding | shares | 450,000 |
Weighted Avg Exercise Price | $ / shares | $ 0.0024 |
Weighted Avg Remaining Contractual Life (Years) | 9 years |
Stock Options and Warrants - 51
Stock Options and Warrants - Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions (Details) - $ / shares | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Expected term | 3 years | 3 years |
Expected dividend yield | 0.00% | 0.00% |
Minimum [Member] | ||
Risk free interest rate | 1.50% | 0.71% |
Expected volatility | 122.00% | 136.00% |
Average value per options and warrants | $ 0.0004 | $ 0.0019 |
Maximum [Member] | ||
Risk free interest rate | 1.62% | 0.88% |
Expected volatility | 134.00% | 139.00% |
Average value per options and warrants | $ 0.0015 | $ 0.0020 |
Stock Options and Warrants - 52
Stock Options and Warrants - Schedule of Outstanding Vested Warrant Activity (Details) - Warrant [Member] | 9 Months Ended |
Sep. 30, 2017$ / sharesshares | |
Number Outstanding, Balance | shares | 500,000 |
Number Outstanding, Warrants issued | shares | |
Number Outstanding, Warrants expired | shares | (500,000) |
Number Outstanding, Balance | shares | |
Weighted Average Exercise Price, Balance | $ / shares | $ 0.08 |
Weighted Average Exercise Price, Warrants issued | $ / shares | |
Weighted Average Exercise Price, Warrants expired | $ / shares | |
Weighted Average Exercise Price, Balance | $ / shares | |
Weighted Average Remaining Contractual Life (Years), Beginning Balance | 8 months 2 days |
Weighted Average Remaining Contractual Life (years), Ending Balance | 0 years |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Operating loss carryforwards | $ 23,600,000 |
Operating loss carryforwards expiration date | 2,031 |
Minimum [Member] | |
Percentage that carry forwards will expire unused | 50.00% |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | ||||
Tax benefit at U.S. statutory rate | $ 273,037 | $ 233,075 | ||
Tax benefit at U.S. statutory rate, Percent | 34.00% | 34.00% | ||
State taxes, net of federal benefit | $ 32,122 | $ 27,421 | ||
State taxes, net of federal benefit, Percent | 4.00% | 4.00% | ||
Change in valuation allowance | $ (305,159) | $ (260,496) | ||
Change in valuation allowance, Percent | (38.00%) | (38.00%) | ||
Income Tax Expense (Benefit) | ||||
Income Tax Expense (Benefit), Percent | 0.00% | 0.00% |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Income Tax Disclosure [Abstract] | ||
Net Operating Loss Carry-forward | $ 10,981,661 | $ 10,577,607 |
Deferred Tax Liabilities - Accrued Officers' Salaries | (978,681) | (900,306) |
Net Deferred Tax Assets | 10,002,980 | 9,677,301 |
Valuation Allowance | (10,002,980) | (9,677,301) |
Total Net Deferred Tax Assets |
Lease Obligations (Details Narr
Lease Obligations (Details Narrative) | May 08, 2015USD ($) | Aug. 31, 2015USD ($) | Sep. 30, 2017USD ($)ft² | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($) |
Area of warehouse and office | ft² | 6,000 | ||||
Monthly current lease increasing rate, percentage | 3.00% | ||||
Occupancy costs | $ 46,038 | $ 48,200 | |||
Lease payments | 0 | ||||
Judgement plus accrued interest for non payment of a capitalized lease amount | $ 175,000 | $ 150,000 | |||
Capital lease obligations | 5,522 | $ 39,848 | |||
Marlin Business Bank [Member] | October 13, 2017 [Member] | |||||
Judgement plus accrued interest for non payment of a capitalized lease amount | 37,278 | ||||
Past due lease payments, accelerated lease payments, late charges and other fees | 11,379 | ||||
Accrued expenses | 37,278 | ||||
Navitas Lease Corp [Member] | |||||
Judgement plus accrued interest for non payment of a capitalized lease amount | 7,266 | ||||
Past due lease payments, accelerated lease payments, late charges and other fees | 4,177 | ||||
Accrued expenses | $ 7,266 |
Lease Obligations - Schedule of
Lease Obligations - Schedule of Future Minimum Lease Payments for Capital Leases (Details) | Sep. 30, 2017USD ($) |
Leases [Abstract] | |
2,017 | $ 5,522 |
2,018 | 0 |
2,019 | 0 |
2,020 | 0 |
2,021 | 0 |
Total | $ 5,522 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Employment agreements, initial term of employment | 3 years |
Automatic renewing period of employment agreements | 1 year |
Harry Schoell Chairman And CTO [Member] | |
Employment agreements, officer salary | $ 150,000 |
Frankie Fruge COO [Member] | |
Employment agreements, officer salary | $ 120,000 |
Consolidated Subsidiary (Detail
Consolidated Subsidiary (Details Narrative) - USD ($) | 3 Months Ended | |
Dec. 31, 2012 | Sep. 30, 2017 | |
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 LLC [Member] | ||
Percentage of ownership in consolidated subsidiary | 100.00% |
Receivables, Deferred Revenue60
Receivables, Deferred Revenue and Backlog (Details Narrative) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
Customer advance and deposits | $ 206,950 | |
Payment of contracts for engines | $ 355,000 | |
FSDS [Member] | ||
Deferred revenue | 150,000 | |
Combilift Agreement [Member] | ||
Backlog for prototype engines purchased | 400,000 | |
Deferred revenue | $ 100,000 |
Derivative Financial Instrume61
Derivative Financial Instruments (Details Narrative) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)Integer | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($) | |
Interest expense | $ 118,076 | ||||
Derivative losses related to adjusting the derivative liability | $ (78,101) | $ (543) | 329,366 | $ (3,320) | |
Derivative Liability | $ 1,162,397 | $ 1,162,397 | $ 754,000 | ||
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 |
Litigation (Details Narrative)
Litigation (Details Narrative) - USD ($) | May 08, 2015 | Aug. 31, 2015 | Sep. 30, 2017 |
Litigation settlement amount | $ 175,000 | $ 150,000 | |
Marlin Business Bank [Member] | October 13, 2017 [Member] | |||
Litigation settlement amount | $ 37,278 | ||
Past due lease payments, accelerated lease payments, late charges and other fees | 11,379 | ||
Accrued expenses | 37,278 | ||
Navitas Lease Corp [Member] | |||
Litigation settlement amount | 7,266 | ||
Past due lease payments, accelerated lease payments, late charges and other fees | 4,177 | ||
Accrued expenses | $ 7,266 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - shares | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
Debt conversion of common stock shares issued | 585,700,000 | |
Shares issued for services | 6,400,000 | |
Common stock, shares authorized | 6,000,000,000 | 6,000,000,000 |
Conversion of stock, description | This is required as the stock price has fallen and shares have to be available at 4 times the conversion rate. | |
Subsequent Event [Member] | Fourth Quarter of 2017 [Member] | ||
Debt conversion of common stock shares issued | 335,000,000 | |
Shares issued for services | 282,000,000 | |
Common stock, shares authorized | 6,000,000,000 | |
Conversion of stock, description | This is required as the stock price has fallen and shares have to be available at 4 times the conversion rate. |