Document and Entity Information
Document and Entity Information - USD ($) | 6 Months Ended | ||
Feb. 29, 2016 | Apr. 11, 2016 | Feb. 28, 2015 | |
Document and Entity Information: | |||
Entity Registrant Name | SAUER ENERGY, INC. | ||
Document Type | 10-Q | ||
Document Period End Date | Feb. 29, 2016 | ||
Amendment Flag | false | ||
Entity Central Index Key | 1,446,152 | ||
Current Fiscal Year End Date | --08-31 | ||
Entity Common Stock, Shares Outstanding | 212,563,019 | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | No | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | Q2 | ||
Entity Public Float | $ 4,292,836 |
Statement of Financial Position
Statement of Financial Position - USD ($) | Feb. 29, 2016 | Aug. 31, 2015 |
Assets, Current | ||
Cash and Cash Equivalents, at Carrying Value | $ 5,064 | $ 4,968 |
Other Assets, Current | 15,007 | 15,007 |
Assets, Current | 20,071 | 19,975 |
Assets, Noncurrent | ||
Property, Plant and Equipment, Gross | 79,158 | 113,201 |
Goodwill | 5,000 | 5,000 |
Indefinite-Lived Intangible Assets (Excluding Goodwill) | 1,256,003 | 1,292,984 |
Other Assets, Noncurrent | 16,502 | 14,507 |
Assets, Noncurrent | 1,351,663 | 1,420,692 |
Assets | 1,371,734 | 1,440,667 |
Liabilities, Current | ||
Accrued Liabilities, Current | 24,980 | 14,566 |
Notes Payable, Current | 45,000 | |
Loans Payable, Current | 75,000 | 275,000 |
Derivative Instruments and Hedges, Liabilities | 61,364 | 446,785 |
Liabilities, Current | 206,344 | 736,351 |
Liabilities, Noncurrent | ||
Liabilities | 206,344 | 736,351 |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | ||
Common Stock, Value, Issued | 18,676 | 14,817 |
Additional Paid in Capital, Common Stock | 9,982,758 | 9,351,999 |
Retained Earnings (Accumulated Deficit) | (8,836,044) | (8,662,500) |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | 1,165,390 | 704,316 |
Liabilities and Equity | $ 1,371,734 | $ 1,440,667 |
Statement of Financial Positio3
Statement of Financial Position - Parenthetical - $ / shares | Feb. 29, 2016 | Aug. 31, 2015 |
Balance Sheets | ||
Common Stock, Par Value | $ 0.0001 | $ 0.0001 |
Common Stock, Shares Authorized | 650,000,000 | 650,000,000 |
Common Stock, Shares Issued | 186,764,105 | 148,173,100 |
Common Stock, Shares Outstanding | 186,764,105 | 148,173,100 |
Statement of Income
Statement of Income - USD ($) | 3 Months Ended | 6 Months Ended | ||
Feb. 29, 2016 | Feb. 28, 2015 | Feb. 29, 2016 | Feb. 28, 2015 | |
Operating Expenses | ||||
Professional Fees | $ 20,938 | $ 20,347 | $ 34,308 | $ 48,772 |
Consulting | 28,000 | 30,000 | 61,310 | 73,814 |
Research and Development Expense | 51,806 | 94,081 | 192,596 | 133,695 |
General and Administrative Expense | 121,218 | 119,799 | 145,632 | 214,840 |
Operating Expenses | 221,962 | 264,227 | 433,846 | 471,121 |
Operating Income (Loss) | (221,962) | (264,227) | (433,846) | (471,121) |
Interest and Debt Expense | ||||
Interest Expense | 21,388 | 125,118 | ||
Derivative Loss On Derivative | (84,317) | (441,667) | (385,420) | (691,667) |
Interest and Debt Expense | (62,929) | (441,667) | (260,302) | (691,667) |
Income (Loss) from Continuing Operations before Income Taxes, Extraordinary Items, Noncontrolling Interest | (159,033) | 177,440 | (173,544) | 220,546 |
IncomeTaxExpenseBenefitContinuingOperationsAbstract | ||||
Income (Loss) from Continuing Operations, Including Portion Attributable to Noncontrolling Interest | (159,033) | 177,440 | (173,544) | 220,546 |
Net Income (Loss) Attributable to Parent | (159,033) | 177,440 | (173,544) | 220,546 |
OtherComprehensiveIncomeLossNetOfTaxPortionAttributableToParentAbstract | ||||
ComprehensiveIncomeNetOfTax | $ (159,033) | $ 177,440 | $ (173,544) | $ 220,546 |
Earnings Per Share | ||||
Earnings Per Share, Basic | $ 0 | $ 0 | $ 0 | $ 0 |
Weighted Average Number of Shares Outstanding, Basic | 179,429,661 | 116,005,571 | 170,260,964 | 115,150,246 |
Earnings Per Share, Diluted | $ 0 | $ 0 | $ 0 | $ 0 |
Weighted Average Number of Shares Outstanding, Diluted | 179,429,661 | 116,005,571 | 170,260,964 | 115,150,246 |
Statement of Cash Flows
Statement of Cash Flows - USD ($) | 6 Months Ended | |
Feb. 29, 2016 | Feb. 28, 2015 | |
Net Cash Provided by (Used in) Operating Activities | ||
Net Income (Loss) | $ (173,544) | $ 220,546 |
Adjustments, Noncash Items, to Reconcile Net Income (Loss) to Cash Provided by (Used in) Operating Activities | ||
Depreciation | 35,502 | 29,243 |
Amortization | 36,981 | 36,981 |
Fair Value Change of Derivative Liability | (385,420) | (691,667) |
Issuance of Stock and Warrants for Services or Claims | 125,118 | |
Adjustments, Noncash Items, to Reconcile Net Income (Loss) to Cash Provided by (Used in) Operating Activities | (361,363) | (404,897) |
Increase (Decrease) in Operating Assets | ||
Increase (Decrease) in Prepaid Expense and Other Assets | (1,995) | (20) |
Increase (Decrease) in Other Operating Assets | ||
Increase (Decrease) in Operating Assets | (1,995) | (20) |
Increase (Decrease) in Operating Liabilities | ||
Increase (Decrease) in Accounts Payable and Accrued Liabilities | 10,414 | (15,696) |
Increase (Decrease) in Operating Capital | 10,414 | (15,696) |
Net Cash Provided by (Used in) Operating Activities | (352,944) | (420,613) |
Net Cash Provided by (Used in) Investing Activities | ||
Payments to Acquire Property, Plant, and Equipment | (1,460) | (3,574) |
Net Cash Provided by (Used in) Investing Activities | (1,460) | (3,574) |
Net Cash Provided by (Used in) Financing Activities | ||
Proceeds from (Repayments of) Notes Payable | 45,000 | (100,000) |
Proceeds from Issuance of Common Stock | 309,500 | 100,000 |
Net Cash Provided by (Used in) Financing Activities | 354,500 | |
Cash and Cash Equivalents, Period Increase (Decrease) | 96 | (424,187) |
Cash and Cash Equivalents, at Carrying Value | 4,968 | 460,863 |
Cash and Cash Equivalents, at Carrying Value | $ 5,064 | $ 36,676 |
Organization,
Organization | 6 Months Ended |
Feb. 29, 2016 | |
Notes | |
Organization | Note 1 - Organization and summary of significant accounting policies: These unaudited interim financial statements as of and for the three and six months ended February 29, 2016 reflect all adjustments which, in the opinion of management, are necessary to fairly state the Companys financial position and the results of its operations for the periods presented, in accordance with the accounting principles generally accepted in the United States of America. All adjustments are of a normal recurring nature. These unaudited interim financial statements should be read in conjunction with the Companys financial statements and notes thereto included in the Companys fiscal year end August 31, 2015, report. The Company assumes that the users of the interim financial information herein have read, or have access to, the audited financial statements for the preceding period, and that the adequacy of additional disclosure needed for a fair presentation may be determined in that context. The results of operations for the six-month period ended February 29, 2016 are not necessarily indicative of results for the entire year ending August 31, 2016. Following is a summary of our organization and significant accounting policies: Organization and nature of business ( Sauer Energy, Inc. (the Old Sauer) was incorporated in California on August 7, 2008. The Company is engaged in the design and manufacture of vertical axis wind turbine (VAWT) systems. On July 25, 2010, the Company, the president and sole director Malcolm Albery (MA) and Dieter Sauer, Jr. (DS) completed a closing (the Closing) under an Agreement and Plan of Reorganization, dated as of June 23, 2010 (the Agreement). The Agreement provided: (a) for the purchase by DS of all of the 39,812,500 shares of the Company owned by MA for $55,200; (b) the contribution by DS of all of the shares of Old Sauer, a California corporation (SEI) to the Company; (c) the assignment of certain patent rights related to wind turbine technology held by DS to the Company; and (d) the election of DS to the Companys board of directors. In connection with the Closing, Mr. Sauer was elected President and CEO of the Company and two former shareholders of the Company agreed to (i) indemnify the Company against any claims resulting from breaches of representations and warranties by the Company in the Agreement; (ii) to acquire and cause to be returned for cancellation an aggregate of 67,437,500 shares of the Companys common Stock, including all of the shares owned by former officer and director Daniel Brooks and; (3) assume all of the Companys obligations in connection with certain oil and gas leases in Canada. The agreement was executed on July 25, 2010. Sauer Energy, Inc. became a wholly-owned subsidiary of the Company. On August 29, Malcolm Albery resigned as President and was replaced by Dieter Sauer. In the following month, the Company changed its name from BCO Hydrocarbon Ltd. to Sauer Energy, Inc. The Companys fiscal year-end is August 31. Basis of presentation Use of estimates - Cash and cash equivalents - Fixed assets - Vehicle & Equipment 5 years Furniture & Fixtures 7 Years Fair Value of Financial Instruments - - Level 1: Quoted prices in active markets for identical assets or liabilities. - Level 2: Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities. - Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The carrying amounts of the Companys financial instruments as of February 29, 2016, reflect: - Cash: Level One measurement based on bank reporting. - Loan receivable and loans from Officers and related parties: Level 2 based on promissory notes. - Derivative liability: Level two measurement based upon the relative fair market value of the Companys free trading common stock. Federal income taxes Income Taxes, Interest and penalties on tax deficiencies recognized in accordance with ASC accounting standards are classified as income taxes in accordance with ASC Topic 740-10-50-19. Research and development costs - Advertising - Basic and Diluted Earnings (Loss) Per Share - Recent Accounting Pronouncements FASB ASU 2015-03: Interest Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. To simplify presentation of debt issuance costs, the amendments in this Update require that debt issuance costs related to a recognized debt liability, to be presented consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this update. This will be effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. The Company does not anticipate significant impact upon its financial statements at this time and will continue to evaluation the potential for such impact. The Company is reviewing this standard and its effect upon our disclosures in the financial statements. The Company does not expect that the adoption of the standard will have a material effect upon the Companys financial statements. A variety of proposed or otherwise potential accounting standards are currently under study by standard setting organizations and various regulatory agencies. Due to the tentative and preliminary nature of those proposed standards, the Companys management has not determined whether implementation of such standards would be material to its financial statements. The Company is reviewing the effects of following recent updates. The Company has no expectation that any of these items will have a material effect upon the financial statements. · Update 2015-16Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments · Update 2015-15InterestImputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit ArrangementsAmendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting (SEC Update) · Update 2015-14Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date · Update 2015-11Inventory (Topic 330): Simplifying the Measurement of Inventory · Update 2015-08Business Combinations (Topic 805): Pushdown AccountingAmendments to SEC Paragraphs Pursuant to Staff Accounting Bulletin No. 115 (SEC Update) · Update No. 2015-02Consolidation (Topic 810): Amendments to the Consolidation Analysis. Share based payments and awards The company has adopted the use of Statement of Financial Accounting Standards No. 123R, Share-Based Payment (SFAS No. 123R) (now contained in FASB Codification Topic 718, Compensation-Stock Compensation, or Topic 718), which supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees, and its related implementation guidance and eliminates the alternative to use Opinion 25s intrinsic value method of accounting that was provided in Statement 123 as originally issued. This Statement requires an entity to measure the cost of employee services received in exchange for an award of an equity instruments, which includes grants of stock options and stock warrants, based on the fair value of the award, measured at the grant date, (with limited exceptions). Under this standard, the fair value of each award is estimated on the grant date, using an option-pricing model that meets certain requirements. We use the Black- Scholes option-pricing model to estimate the fair value of our equity awards, including stock options and warrants. The Black-Scholes model meets the requirements of Topic 718; however, the fair values generated may not reflect their actual fair values, as it does not consider certain factors, such as vesting requirements, employee attrition and transferability limitations. The Black-Scholes model valuation is affected by our stock price and a number of assumptions, including expected volatility, expected life, risk-free interest rate and expected dividends. We estimate the expected volatility and estimated life of our stock options at grant date based on historical volatility; however, due to the thinly traded nature of our stock, we have chosen to use an average of the annual volatility of like companies in our industry. For the risk-free interest rate, we use the Constant Maturity Treasury rate on 90 day government securities. The term is equal to the time until the option expires. The dividend yield is not applicable, as the company has not paid any dividends, nor do we anticipate paying them in the foreseeable future. The fair value of our restricted stock is based on the market value of our free trading common stock, on the grant date calculated using a 20 trading day average. At the time of grant, the share based-compensation expense is recognized in our financial statements based on awards that are ultimately expected to vest using historical employee attrition rates and the expense is reduced accordingly. For the six months ended February 29, 2016, and , we recognized $0 in share based expense due to the issuance of common stock warrants. Reclassifications Certain amounts in the prior period financial statements have been reclassified to conform to the current period presentation. These reclassifications had no effect on reported losses, total assets, or stockholders equity as previously reported. |
Liquidity Disclosure
Liquidity Disclosure | 6 Months Ended |
Feb. 29, 2016 | |
Notes | |
Liquidity Disclosure | Note 2 Going Concern The Company's financial statements are prepared using the generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, the Company has accumulated a deficit of $8,836,044 of February 29, 2016, and has no revenues. In view of the matters described above, recoverability of a major portion of the recorded asset amounts shown in the accompanying balance sheets is dependent upon continued operations of the Company, which in turn is dependent upon the Companys ability to raise additional capital, obtain financing and to succeed in its future operations. No assurance can be given that additional financing will be available when needed or that such financing will be available on terms acceptable to the Company. This would have a material adverse effect on the Company and raises substantial doubt about the Companys ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. Management plans to raise additional capital through the sale of stock to pursue business development activities. |
Property, Plant and Equipment D
Property, Plant and Equipment Disclosure | 6 Months Ended |
Feb. 29, 2016 | |
Notes | |
Property, Plant and Equipment Disclosure | Note 3 Property and Equipment Property and Equipment consisted of the following at February 29, 2016 August 31, 2015 Computer and equipment & truck $ 283,860 $ 282,399 Less: Accumulated depreciation/amortization (204,702) (169,199) Property and equipment, net $ 79,158 $ 113,200 |
Cost-method Investments, Descri
Cost-method Investments, Description | 6 Months Ended |
Feb. 29, 2016 | |
Notes | |
Cost-method Investments, Description | Note 4 Asset Purchase On May 11, 2012, the Company entered into an Asset Purchase Agreement with St. George Investments LLC, an Illinois limited liability company, to acquire certain assets in foreclosure for 6,000,000 common shares. The assets were formerly owned by Helix Wind, Inc., a Nevada corporation in the same business as the Company. The assets and agreed prices were: Asset Purchase May 11, 2012 Tangible Assets Equipment $ 23,000 Supplies 1,000 Inventory 1,000 Total Tangible Assets $ 25,000 Intangible Assets Goodwill Acquired $ 5,000 Intellectual Property (10 patents, 2 trademarks, network system, wind turbine monitoring system, URL 1,467,500 Restrictive Covenant $ 2,500 Total intangible assets acquired $ 1,475,000 Total Assets acquired $ 1,500,000 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets Disclosure | 6 Months Ended |
Feb. 29, 2016 | |
Notes | |
Goodwill and Intangible Assets Disclosure | Note 5 Intangible Property The Company has acquired intangible property in patents, patents pending and goodwill. The patents are being amortized over their expected lives of not more than seventeen years. The restrictive covenants were fully amortized as of August 31, 2013. Those patent costs allocated to pending patents do not begin amortizing until the underlying patent is issued. If for some reason a patent is not issued the costs associated with the acquisition and the continuation of the application are fully amortized in the year of the denial. The balances as of February 29, 2016, and August 31, 2015, are as follows: February 29, 2016 August 31,2015 Patents $ 109,092 $ 109,092 Purchased Patents 1,467,500 1,467,500 Goodwill 5,000 5,000 Less Amortization (325,589) (288,608) Intangible Assets net $ 1,256,003 $ 1,292,984 |
Debt Disclosure
Debt Disclosure | 6 Months Ended |
Feb. 29, 2016 | |
Notes | |
Debt Disclosure | Note 6 Notes and Convertible Loans and Interest Payable The Company entered into note agreements and subsequent modifications and settlements on convertible notes. These notes are convertible into the Companys common stock and are due usually within one year. The notes were issued with original issuance discounts of twelve percent which as immediately convertible into common stock and if the note was not repaid in ninety days the zero percent interest rate was replaced with an immediate prepaid interest charge at ten percent with was subject to conversion. The Conversion terms were both fixed and variable if the trading prices did not meet the fix conversion price. See the derivative discussion in Note 7 concerning these loans. On January 26, 2016, the Company executed a $50,000 note with a third party bearing interest at 10% due April 26, 2016. The Note requires the Company to make prepayments equal to 25% of its equity line puts. As at February 29, 2016, a total of $45,000 was due on this note. February 29, 2016 August 31,2015 Convertible Loans and Accrued Interest: St. George Investments $ 75,000 $ 275,000 Note 7 Derivative Liabilities The Company entered into certain convertible loan agreements during 2012 and 2013. These agreements contained terms that allowed for the conversion of the debt into common stock. The basic agreement was originally with $0.25 conversion prices unless the stock sold at less than $0.25. If the trades were at less than original term, the debt holders could elect to convert their debt at sixty percent of the lowest trading price in the 25 trading days prior to the conversion notice. Because of these terms, the debt conversion clause requires that the Company account for these note balances as derivatives valued at the fair market value of the Companys common stock on the day of any financial reporting period. At February 29, 2016, and February 28, 2015, the fully convertible shares would be 7,668,712 and 12,500,000 common shares, respectively. February 29, 2016 August 31,2015 Derivative Liabilities on Convertible Loans: St. George Investments-derivative liability $ 61,364 $ 446,785 |
Commitments and Contingencies D
Commitments and Contingencies Disclosure | 6 Months Ended |
Feb. 29, 2016 | |
Notes | |
Commitments and Contingencies Disclosure | Note 8 Commitments and Contingencies Rental Agreement: On August 17, 2012, the Company leased a 10,410 square foot industrial condominium in Camarillo, California, for three years for monthly lease payments of $7,000 per month. There are no common area costs. All company operations were concentrated at the site and this lease ended on August 31, 2015. On August 7, 2015, the Company entered into a Commercial Single-Tenant Lease for a 26,550 square foot building in Oxnard, California, with monthly payments of $13,507 for sixty months, plus common area costs of $507.38 per month. All company operations will be concentrated at the site. Lease Commitments as of February 29, 2016: August 31, Year Lease 2016 84,087 2017 168,173 2018 168,173 2019 168,173 |
Income Tax Disclosure
Income Tax Disclosure | 6 Months Ended |
Feb. 29, 2016 | |
Notes | |
Income Tax Disclosure | Note 9 Federal Income Taxes No provision was made for federal income tax, since the Company has had significant net operating losses. Net operating loss carryforwards may be used to reduce taxable income through the year 2034. The availability of the Companys net operating loss carryforwards are subject to limitation if there is a 50% or more positive change in the ownership of the Companys stock, unless the same or similar business is carried on. The net operating loss carryforward for federal and state income tax purposes was approximately $8.7M, which will expire in 2029 through 2034 if not utilized. The Company uses 35% for a composite tax rate to estimate the value of net operating losses for deferred taxes. The total estimated deferred taxes as of August 31, 2015 is $3,035,289. The Company recorded a 100% valuation allowance for the deferred tax asset since it is more likely than not that some part or all of the deferred tax asset will not be realized. Although Management believes that its estimates are reasonable, no assurance can be given that the final tax outcome of these matters will not be different than that which is reflected in our tax provisions. Ultimately, the actual tax benefits to be realized will be based upon future taxable earnings levels, which are very difficult to predict. No provision was made for federal income tax, since the Company had an overall net operating loss and has accumulated net operating loss carryforwards. For the six months ended February 29, 2016, no income tax expense has been realized as a result of operations and no income tax penalties and/or interest have been accrued related to uncertain tax positions. The Company files income tax returns in the U.S. federal jurisdiction and in the State of California. These filings are subject to a three-year statute of limitations. The Companys evaluation of income tax positions included the years ended August 31, 2015, through 2013, and could be subject to agency examinations. No filings are currently under examination. No adjustments have been made to reduce the estimated income tax benefit at fiscal year-end or at the quarterly reporting dates. Any valuations relating to these income tax provisions will comply with U.S. generally accepted accounting principles. |
Stockholders' Equity Note Discl
Stockholders' Equity Note Disclosure | 6 Months Ended |
Feb. 29, 2016 | |
Notes | |
Stockholders' Equity Note Disclosure | Note 10 Capital Stock The Company went public on 7/25/ 2010. Its Common Stock is traded on the open market under the symbol OTCQB: SENY. On June 4, 2013, the Company entered into a private placement agreement that involved issuing 400,000 units of securities at $0.25 per unit for $100,000 cash pursuant to a private placement agreement. Each unit consisted of one (1) share of common stock, par value $0.0001 per share and two (2) common stock purchase warrants for a total of 800,000 warrants with an exercise price of $0.40 each, these expired July 31, 2015. On July 7, 2014, the Company entered into a private placement agreement that involved issuing 5,000,000 units of securities at $0.05 per unit for a total amount of cash of $250,000. Each unit consisted of one (1) share of common stock, par value $0.0001 per share and one (1) common stock purchase warrants for a total of 5,000,000 warrants with an exercise price of $0.30 each expiring January 31, 2016. During the quarter ending February 28, 2015, the Company issued 2,364,990 shares of common stock for $100,000 pursuant to a convertible note. During the quarter ending May 31, 2015, the Company issued 3,921,422 shares of common stock for $125,000 pursuant to a convertible note. During the quarter ending May 31, 2015, the Company authorized 4.4 million shares of common stock to be issued for services rendered. During the quarter ending May 31, 2015, the Company issued 4,522,847 shares of common stock for $153,785 pursuant to an Equity Purchase Agreement During the quarter ending August 31, 2015, the Company issued 7,175,278 shares of common stock for $125,000 pursuant to a convertible note. During the quarter ending August 31, 2015, the Company authorized 500,000 shares of common stock at $0.05 per share to be issued pursuant to the consulting agreement of May 26, 2015. During the quarter ending August 31, 2015, the Company issued 11,708,737 shares of common stock for $245,235 pursuant to an Equity Purchase Agreement. During the quarter ending November 30, 2015, the Company issued 7,688,039 shares of common stock for $100,000 pursuant to a convertible note. During the quarter ending November 30, 2015, the Company issued 15,576,508 shares of common stock for $254,000 pursuant to an Equity Purchase Agreement. During the quarter ending February 29, 2016, the Company issued 11,077,216 shares of common stock for $100,000 pursuant to a convertible note. During the quarter ending February 29, 2016, the Company issued 4,269,242 shares of common stock for $55,000 pursuant to an Equity Purchase Agreement. Note 11 Warrants Under the private placements, the Company issued 600,000 units of securities for total cash proceeds of $150,000. One private placement of 200,000 units of securities consisted of one (1) share of common stock, par value $0.0001 per share and one (1) common stock purchase warrant with an exercise price of $0.50 and expired March 31, 2014. The other private placement of 400,000 units of securities consisted of one (1) share of common stock, par value $0.0001 per share and two (2) common stock purchase warrants with an exercise price of $0.40 and expired July 31, 2015. During the fiscal year ended August 31, 2014, the Company entered into four private placement agreements for total cash proceeds of $250,000. The private placements of 5,000,000 units consist of one (1) share of common stock, par value $0.0001 per share and one (1) common stock purchase warrant with an exercise price of $0.30 that expired January 31, 2016. The following table is a summary of information about the warrants outstanding at February 29, 2016: Number of Warrants Weighted Average Exercise Price Balance, August 31, 2015 5,000,000 0.30 Warrants expired 5,000,000 - Warrants cancelled - - Warrants Granted - - Warrants exercised - - Balance, February 29, 2016 -0- -0- |
Legal Matters and Contingencies
Legal Matters and Contingencies | 6 Months Ended |
Feb. 29, 2016 | |
Notes | |
Legal Matters and Contingencies | NOTE 12 - Contingencies, Litigation There were no loss contingencies or legal proceedings against the Company with respect to matters arising in the ordinary course of business. St. George Investment Settlement: On October 23, 2013, the Company filed a complaint against St George Investments, LLC (St. George") in Superior Court, Ventura County California seeking declaratory relief as to contracts relating to the Companys May, 2012 purchase of the assets of Helix Wind from St. George for treasury stock then valued in excess of $1.8 Million and a subsequent February 2013 promissory note for $275,000 executed under the terms of an amendment to the May, 2012 asset purchase agreement. The Company alleged that the Helix Wind asset purchase price had been substantially paid and, in fact, may have been overpaid in light of St. Georges failure to deliver all of the intellectual property of Helix Wind. On February 3, 2014, the parties participated in a mediation session at the Federal Court and executed an agreement reflecting a settlement in principal (the Settlement) which becomes binding only if the parties are unable to come to terms on more formal settlement agreements. The parties have since executed more formal settlement agreements which are included as an exhibit hereto. The basic terms of the Settlement required the issuance of an additional 5,000,000 shares of our common stock to St George under the Helix APA; required St. George to purchase additional shares of our common stock for $300,000 ($0.15 per share) which is a price above the market price at the time of the Settlement; fixed the amount due on the note issued to St George in connection with the Helix APA at $600,000 and granted the Company certain prepayment rights. The Settlement provides for limitations on the amounts of our common stock that St. George may sell into the market. As of February 29, 2016, the Company still owed St. George $75,000. See Note 6, 7 and 14. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Feb. 29, 2016 | |
Notes | |
Subsequent Events | NOTE 14 Subsequent Events Management has reviewed and evaluated subsequent events and transactions occurring after the balance sheet date, February 29, 2016, through the filing of this Quarterly Report on Form 10-Q on April 11, 2016, and determined that only the following additional subsequent event has occurred: Conversion in Settlement Debt From March 1, 2016, to present, the Company authorized 9,498,761 shares of common stock to be issued in exchange for cancellation of $75,000 of the convertible loan. As of April 11, 2016, the balance of the convertible note is $0.00. Equity Purchase Agreement From March 1, 2016, to present, the Company authorized 16,300,153 shares of common stock to be issued for $153,000 pursuant to an Equity Purchase Agreement. |
Organization,_ Basis of Present
Organization,: Basis of Presentation and Significant Accounting Policies (Policies) | 6 Months Ended |
Feb. 29, 2016 | |
Policies | |
Basis of Presentation and Significant Accounting Policies | Organization and nature of business ( Sauer Energy, Inc. (the Old Sauer) was incorporated in California on August 7, 2008. The Company is engaged in the design and manufacture of vertical axis wind turbine (VAWT) systems. On July 25, 2010, the Company, the president and sole director Malcolm Albery (MA) and Dieter Sauer, Jr. (DS) completed a closing (the Closing) under an Agreement and Plan of Reorganization, dated as of June 23, 2010 (the Agreement). The Agreement provided: (a) for the purchase by DS of all of the 39,812,500 shares of the Company owned by MA for $55,200; (b) the contribution by DS of all of the shares of Old Sauer, a California corporation (SEI) to the Company; (c) the assignment of certain patent rights related to wind turbine technology held by DS to the Company; and (d) the election of DS to the Companys board of directors. In connection with the Closing, Mr. Sauer was elected President and CEO of the Company and two former shareholders of the Company agreed to (i) indemnify the Company against any claims resulting from breaches of representations and warranties by the Company in the Agreement; (ii) to acquire and cause to be returned for cancellation an aggregate of 67,437,500 shares of the Companys common Stock, including all of the shares owned by former officer and director Daniel Brooks and; (3) assume all of the Companys obligations in connection with certain oil and gas leases in Canada. The agreement was executed on July 25, 2010. Sauer Energy, Inc. became a wholly-owned subsidiary of the Company. On August 29, Malcolm Albery resigned as President and was replaced by Dieter Sauer. In the following month, the Company changed its name from BCO Hydrocarbon Ltd. to Sauer Energy, Inc. The Companys fiscal year-end is August 31. |
Organization,_ Basis of Account
Organization,: Basis of Accounting, Policy (Policies) | 6 Months Ended |
Feb. 29, 2016 | |
Policies | |
Basis of Accounting, Policy | Basis of presentation |
Organization,_ Use of Estimates
Organization,: Use of Estimates, Policy (Policies) | 6 Months Ended |
Feb. 29, 2016 | |
Policies | |
Use of Estimates, Policy | Use of estimates - |
Organization,_ Cash and Cash Eq
Organization,: Cash and Cash Equivalents, Policy (Policies) | 6 Months Ended |
Feb. 29, 2016 | |
Policies | |
Cash and Cash Equivalents, Policy | Cash and cash equivalents - |
Organization,_ Property, Plant
Organization,: Property, Plant and Equipment, Policy (Policies) | 6 Months Ended |
Feb. 29, 2016 | |
Policies | |
Property, Plant and Equipment, Policy | Fixed assets - Vehicle & Equipment 5 years Furniture & Fixtures 7 Years |
Organization,_ Fair Value Measu
Organization,: Fair Value Measurement, Policy (Policies) | 6 Months Ended |
Feb. 29, 2016 | |
Policies | |
Fair Value Measurement, Policy | Fair Value of Financial Instruments - - Level 1: Quoted prices in active markets for identical assets or liabilities. - Level 2: Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities. - Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The carrying amounts of the Companys financial instruments as of February 29, 2016, reflect: - Cash: Level One measurement based on bank reporting. - Loan receivable and loans from Officers and related parties: Level 2 based on promissory notes. - Derivative liability: Level two measurement based upon the relative fair market value of the Companys free trading common stock. |
Organization,_ Income Tax, Poli
Organization,: Income Tax, Policy (Policies) | 6 Months Ended |
Feb. 29, 2016 | |
Policies | |
Income Tax, Policy | Federal income taxes Income Taxes, Interest and penalties on tax deficiencies recognized in accordance with ASC accounting standards are classified as income taxes in accordance with ASC Topic 740-10-50-19. |
Organization,_ Research, Develo
Organization,: Research, Development, and Computer Software, Policy (Policies) | 6 Months Ended |
Feb. 29, 2016 | |
Policies | |
Research, Development, and Computer Software, Policy | Research and development costs - |
Organization,_ Advertising Cost
Organization,: Advertising Costs, Policy (Policies) | 6 Months Ended |
Feb. 29, 2016 | |
Policies | |
Advertising Costs, Policy | Advertising - |
Organization,_ Earnings Per Sha
Organization,: Earnings Per Share, Policy (Policies) | 6 Months Ended |
Feb. 29, 2016 | |
Policies | |
Earnings Per Share, Policy | Basic and Diluted Earnings (Loss) Per Share - |
Organization,_ New Accounting P
Organization,: New Accounting Pronouncements, Policy (Policies) | 6 Months Ended |
Feb. 29, 2016 | |
Policies | |
New Accounting Pronouncements, Policy | Recent Accounting Pronouncements FASB ASU 2015-03: Interest Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. To simplify presentation of debt issuance costs, the amendments in this Update require that debt issuance costs related to a recognized debt liability, to be presented consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this update. This will be effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. The Company does not anticipate significant impact upon its financial statements at this time and will continue to evaluation the potential for such impact. The Company is reviewing this standard and its effect upon our disclosures in the financial statements. The Company does not expect that the adoption of the standard will have a material effect upon the Companys financial statements. A variety of proposed or otherwise potential accounting standards are currently under study by standard setting organizations and various regulatory agencies. Due to the tentative and preliminary nature of those proposed standards, the Companys management has not determined whether implementation of such standards would be material to its financial statements. The Company is reviewing the effects of following recent updates. The Company has no expectation that any of these items will have a material effect upon the financial statements. · Update 2015-16Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments · Update 2015-15InterestImputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit ArrangementsAmendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting (SEC Update) · Update 2015-14Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date · Update 2015-11Inventory (Topic 330): Simplifying the Measurement of Inventory · Update 2015-08Business Combinations (Topic 805): Pushdown AccountingAmendments to SEC Paragraphs Pursuant to Staff Accounting Bulletin No. 115 (SEC Update) · Update No. 2015-02Consolidation (Topic 810): Amendments to the Consolidation Analysis. |
Organization,_ Share-based Comp
Organization,: Share-based Compensation, Option and Incentive Plans Policy (Policies) | 6 Months Ended |
Feb. 29, 2016 | |
Policies | |
Share-based Compensation, Option and Incentive Plans Policy | Share based payments and awards The company has adopted the use of Statement of Financial Accounting Standards No. 123R, Share-Based Payment (SFAS No. 123R) (now contained in FASB Codification Topic 718, Compensation-Stock Compensation, or Topic 718), which supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees, and its related implementation guidance and eliminates the alternative to use Opinion 25s intrinsic value method of accounting that was provided in Statement 123 as originally issued. This Statement requires an entity to measure the cost of employee services received in exchange for an award of an equity instruments, which includes grants of stock options and stock warrants, based on the fair value of the award, measured at the grant date, (with limited exceptions). Under this standard, the fair value of each award is estimated on the grant date, using an option-pricing model that meets certain requirements. We use the Black- Scholes option-pricing model to estimate the fair value of our equity awards, including stock options and warrants. The Black-Scholes model meets the requirements of Topic 718; however, the fair values generated may not reflect their actual fair values, as it does not consider certain factors, such as vesting requirements, employee attrition and transferability limitations. The Black-Scholes model valuation is affected by our stock price and a number of assumptions, including expected volatility, expected life, risk-free interest rate and expected dividends. We estimate the expected volatility and estimated life of our stock options at grant date based on historical volatility; however, due to the thinly traded nature of our stock, we have chosen to use an average of the annual volatility of like companies in our industry. For the risk-free interest rate, we use the Constant Maturity Treasury rate on 90 day government securities. The term is equal to the time until the option expires. The dividend yield is not applicable, as the company has not paid any dividends, nor do we anticipate paying them in the foreseeable future. The fair value of our restricted stock is based on the market value of our free trading common stock, on the grant date calculated using a 20 trading day average. At the time of grant, the share based-compensation expense is recognized in our financial statements based on awards that are ultimately expected to vest using historical employee attrition rates and the expense is reduced accordingly. For the six months ended February 29, 2016, and , we recognized $0 in share based expense due to the issuance of common stock warrants. |
Organization,_ Reclassification
Organization,: Reclassifications (Policies) | 6 Months Ended |
Feb. 29, 2016 | |
Policies | |
Reclassifications | Reclassifications Certain amounts in the prior period financial statements have been reclassified to conform to the current period presentation. These reclassifications had no effect on reported losses, total assets, or stockholders equity as previously reported. |
Property, Plant and Equipment30
Property, Plant and Equipment Disclosure: Property, Plant and Equipment (Tables) | 6 Months Ended |
Feb. 29, 2016 | |
Tables/Schedules | |
Property, Plant and Equipment | Property and Equipment consisted of the following at February 29, 2016 August 31, 2015 Computer and equipment & truck $ 283,860 $ 282,399 Less: Accumulated depreciation/amortization (204,702) (169,199) Property and equipment, net $ 79,158 $ 113,200 |
Cost-method Investments, Desc31
Cost-method Investments, Description: Schedule of Cost Method Investments (Tables) | 6 Months Ended |
Feb. 29, 2016 | |
Tables/Schedules | |
Schedule of Cost Method Investments | Asset Purchase May 11, 2012 Tangible Assets Equipment $ 23,000 Supplies 1,000 Inventory 1,000 Total Tangible Assets $ 25,000 Intangible Assets Goodwill Acquired $ 5,000 Intellectual Property (10 patents, 2 trademarks, network system, wind turbine monitoring system, URL 1,467,500 Restrictive Covenant $ 2,500 Total intangible assets acquired $ 1,475,000 Total Assets acquired $ 1,500,000 |
Goodwill and Intangible Asset32
Goodwill and Intangible Assets Disclosure: Schedule of Acquired Finite-Lived Intangible Assets by Major Class (Tables) | 6 Months Ended |
Feb. 29, 2016 | |
Tables/Schedules | |
Schedule of Acquired Finite-Lived Intangible Assets by Major Class | February 29, 2016 August 31,2015 Patents $ 109,092 $ 109,092 Purchased Patents 1,467,500 1,467,500 Goodwill 5,000 5,000 Less Amortization (325,589) (288,608) Intangible Assets net $ 1,256,003 $ 1,292,984 |
Debt Disclosure_ Convertible De
Debt Disclosure: Convertible Debt (Tables) | 6 Months Ended |
Feb. 29, 2016 | |
Tables/Schedules | |
Convertible Debt | February 29, 2016 August 31,2015 Convertible Loans and Accrued Interest: St. George Investments $ 75,000 $ 275,000 |
Debt Disclosure_ Schedule of Ca
Debt Disclosure: Schedule of Carrying Values and Estimated Fair Values of Debt Instruments (Tables) | 6 Months Ended |
Feb. 29, 2016 | |
Tables/Schedules | |
Schedule of Carrying Values and Estimated Fair Values of Debt Instruments | February 29, 2016 August 31,2015 Derivative Liabilities on Convertible Loans: St. George Investments-derivative liability $ 61,364 $ 446,785 |
Commitments and Contingencies35
Commitments and Contingencies Disclosure: August 31, (Tables) | 6 Months Ended |
Feb. 29, 2016 | |
Tables/Schedules | |
August 31 | August 31, Year Lease 2016 84,087 2017 168,173 2018 168,173 2019 168,173 |
Stockholders' Equity Note Dis36
Stockholders' Equity Note Disclosure: Schedule of Stockholders' Equity Note, Warrants or Rights (Tables) | 6 Months Ended |
Feb. 29, 2016 | |
Tables/Schedules | |
Schedule of Stockholders' Equity Note, Warrants or Rights | Number of Warrants Weighted Average Exercise Price Balance, August 31, 2015 5,000,000 0.30 Warrants expired 5,000,000 - Warrants cancelled - - Warrants Granted - - Warrants exercised - - Balance, February 29, 2016 -0- -0- |
Property, Plant and Equipment37
Property, Plant and Equipment Disclosure: Property, Plant and Equipment (Details) - USD ($) | Feb. 29, 2016 | Aug. 31, 2015 |
Details | ||
Computer and equipment & truck | $ 283,860 | $ 282,399 |
Less: Accumulated depreciation/amortization | (204,702) | (169,199) |
Property, Plant and Equipment, Net | $ 79,158 | $ 113,200 |
Cost-method Investments, Desc38
Cost-method Investments, Description: Schedule of Cost Method Investments (Details) | May. 11, 2012USD ($) |
Details | |
Equipment | $ 23,000 |
Supplies | 1,000 |
Inventory | 1,000 |
Total Tangible Assets | 25,000 |
Goodwill Acquired | 5,000 |
Intellectual Property | 1,467,500 |
Restrictive Covenant | 2,500 |
Total intangible assets acquired | 1,475,000 |
Total Assets acquired | $ 1,500,000 |
Goodwill and Intangible Asset39
Goodwill and Intangible Assets Disclosure: Schedule of Acquired Finite-Lived Intangible Assets by Major Class (Details) - USD ($) | Feb. 29, 2016 | Aug. 31, 2015 |
Details | ||
Patents | $ 109,092 | $ 109,092 |
Purchased Patents | 1,467,500 | 1,467,500 |
Goodwill | 5,000 | 5,000 |
Less Amortization | (325,589) | (288,608) |
Other Intangible Assets, Net | $ 1,256,003 | $ 1,292,984 |
Debt Disclosure_ Convertible 40
Debt Disclosure: Convertible Debt (Details) - USD ($) | Feb. 29, 2016 | Aug. 31, 2015 |
Details | ||
St. George Investments | $ 75,000 | $ 275,000 |
Debt Disclosure_ Schedule of 41
Debt Disclosure: Schedule of Carrying Values and Estimated Fair Values of Debt Instruments (Details) - USD ($) | Feb. 29, 2016 | Aug. 31, 2015 |
Details | ||
St. George | $ 61,364 | $ 446,785 |