Document_and_Entity_Informatio
Document and Entity Information (USD $) | 3 Months Ended | ||
Nov. 30, 2014 | Mar. 12, 2015 | Feb. 28, 2014 | |
Document and Entity Information: | |||
Entity Registrant Name | Sauer Energy, Inc. | ||
Document Type | S-1 | ||
Document Period End Date | 30-Nov-14 | ||
Amendment Flag | FALSE | ||
Entity Central Index Key | 1446152 | ||
Current Fiscal Year End Date | -23 | ||
Entity Common Stock, Shares Outstanding | 118,151,368 | ||
Entity Public Float | $11,815,136 | ||
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 | 2015 | ||
Document Fiscal Period Focus | FY |
Statement_of_Financial_Positio
Statement of Financial Position (USD $) | Nov. 30, 2014 | Aug. 31, 2014 | Aug. 31, 2013 |
Balance Sheets | |||
Cash and Cash Equivalents, at Carrying Value | $277,526 | $459,363 | $19,178 |
Prepaid Expense, Current | 431 | 593 | |
Other Assets, Current | 1,500 | ||
Assets, Current | 277,957 | 461,456 | 19,178 |
Property, Plant and Equipment, Gross | 132,202 | 146,704 | 62,782 |
Indefinite-Lived Intangible Assets (Excluding Goodwill) | 1,392,483 | 1,410,973 | 1,425,231 |
Other Assets, Noncurrent | 14,000 | 14,000 | 14,000 |
Assets, Noncurrent | 1,538,685 | 1,571,677 | 1,502,013 |
Assets | 1,816,642 | 2,033,133 | 1,521,191 |
Accrued Liabilities, Current | 11,918 | 21,516 | 5,267 |
Loans Payable, Current | 600,000 | 600,000 | 424,456 |
Derivative Instruments and Hedges, Liabilities | 775,000 | 1,025,000 | 350,344 |
Liabilities, Current | 1,386,918 | 1,646,516 | 780,067 |
Liabilities | 1,386,918 | 1,646,516 | 780,067 |
Common Stock, Value, Issued | 11,515 | 11,515 | 9,374 |
Additional Paid in Capital, Common Stock | 8,191,503 | 8,191,503 | 6,329,521 |
Retained Earnings (Accumulated Deficit) | -7,773,294 | -7,816,401 | -5,597,771 |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | 429,724 | 386,617 | 741,124 |
Liabilities and Equity | $1,816,642 | $2,033,133 | $1,521,191 |
Statement_of_Financial_Positio1
Statement of Financial Position - Parenthetical (USD $) | Nov. 30, 2014 | Aug. 31, 2014 | Aug. 31, 2013 |
Balance Sheets | |||
Common Stock, Par Value | $0.00 | $0.00 | $0.00 |
Common Stock, Shares Authorized | 650,000,000 | 650,000,000 | 650,000,000 |
Common Stock, Shares Issued | 115,150,246 | 115,150,246 | 93,742,564 |
Common Stock, Shares Outstanding | 115,150,246 | 115,150,246 | 93,742,564 |
Statement_of_Income
Statement of Income (USD $) | 3 Months Ended | 12 Months Ended | 73 Months Ended | 76 Months Ended | ||
Nov. 30, 2014 | Nov. 30, 2013 | Aug. 31, 2014 | Aug. 31, 2013 | Aug. 31, 2014 | Nov. 30, 2014 | |
Income Statement | ||||||
Professional Fees | $28,425 | $52,091 | $115,469 | $63,201 | $449,802 | $478,227 |
Consulting | 43,814 | 24,131 | 140,364 | 418,629 | 1,353,671 | 1,397,485 |
Research and Development Expense | 39,614 | 23,705 | 128,387 | 91,493 | 1,042,199 | 1,081,813 |
General and Administrative Expense | 95,040 | 87,278 | 384,058 | 775,040 | 2,623,907 | 2,716,149 |
Operating Expenses | 206,893 | 187,205 | 768,278 | 1,348,363 | 5,469,579 | 5,673,674 |
Operating Income (Loss) | -206,893 | -187,205 | -768,278 | -1,348,363 | -5,469,579 | -5,673,674 |
Interest Expense | 1,667 | -325,989 | 546,123 | 220,137 | 222,935 | |
Settlement Expense | 1,101,685 | 1,101,685 | 1,101,685 | |||
Derivative Loss On Derivative | -250,000 | -8,336 | 674,656 | 350,344 | 1,025,000 | 775,000 |
Interest and Debt Expense | -250,000 | -6,669 | 1,450,352 | 896,467 | 2,346,822 | 2,099,620 |
Income (Loss) from Continuing Operations before Income Taxes, Extraordinary Items, Noncontrolling Interest | 43,107 | -180,536 | -2,218,630 | -2,244,830 | -7,816,401 | -7,773,294 |
Income (Loss) from Continuing Operations, Including Portion Attributable to Noncontrolling Interest | 43,107 | -180,536 | -2,218,630 | -2,244,830 | -7,816,401 | -7,773,294 |
Net Income (Loss) Attributable to Parent | 43,107 | -180,536 | -2,218,630 | -2,244,830 | -7,816,401 | -7,773,294 |
ComprehensiveIncomeNetOfTax | $43,107 | ($180,536) | ($2,218,630) | ($2,244,830) | ($7,816,401) | ($7,773,294) |
Earnings Per Share, Basic | $0 | $0 | ($0.02) | ($0.02) | ||
Weighted Average Number of Shares Outstanding, Basic | 102,456,356 | 90,897,168 | 102,456,356 | 90,897,168 | ||
Earnings Per Share, Diluted | $0 | $0 | ($0.02) | ($0.02) | ||
Weighted Average Number of Shares Outstanding, Diluted | 102,456,356 | 90,897,168 | 102,456,356 | 90,897,168 |
Statement_of_Shareholders_Equi
Statement of Shareholders' Equity (USD $) | Common Stock | Additional Paid-in Capital | Retained Earnings | Total |
Stockholders' Equity at Aug. 06, 2008 | ||||
Stock Issued During Period, Value, New Issues | $12,500 | $12,500 | ||
Stock Issued During Period, Shares, New Issues | 325 | 325 | ||
Net Income (Loss) | -45,541 | |||
Stockholders' Equity at Aug. 31, 2008 | 12,500 | -45,541 | -33,041 | |
Shares, Outstanding at Aug. 31, 2008 | 325 | 325 | ||
Stock Issued During Period, Value, New Issues | 13,894 | -13,894 | ||
Stock Issued During Period, Shares, New Issues | 138,937,175 | |||
Net Income (Loss) | -12,666 | |||
Stockholders' Equity at Aug. 31, 2009 | 13,894 | -1,394 | -58,207 | -45,707 |
Shares, Outstanding at Aug. 31, 2009 | 138,937,500 | 138,937,500 | ||
Stock Issued During Period, Value, New Issues | -6,744 | 6,744 | ||
Stock Issued During Period, Shares, New Issues | -67,437,500 | -67,437,500 | ||
Net Income (Loss) | -214,899 | |||
Adjustments to Additional Paid in Capital, Warrant Issued | 0 | 0 | ||
Stock Repurchased and Retired During Period, Shares | 0 | |||
Stockholders' Equity, Other | 157,200 | 157,200 | ||
Stockholders' Equity at Aug. 31, 2010 | 7,150 | 162,550 | -273,106 | -103,406 |
Shares, Outstanding at Aug. 31, 2010 | 71,500,000 | 71,500,000 | ||
Stock Issued During Period, Value, New Issues | 409 | 1,521,574 | 1,521,983 | |
Stock Issued During Period, Shares, New Issues | 4,090,749 | 4,090,749 | ||
Net Income (Loss) | -1,366,199 | |||
Adjustments to Additional Paid in Capital, Warrant Issued | 0 | 0 | ||
Stock Repurchased and Retired During Period, Shares | 0 | |||
Stockholders' Equity, Other | 63,910 | |||
Stockholders' Equity at Aug. 31, 2011 | 7,559 | 1,684,124 | -1,639,305 | 116,288 |
Shares, Outstanding at Aug. 31, 2011 | 75,590,749 | 75,590,749 | ||
Stock Issued During Period, Value, New Issues | 1,163 | 3,272,130 | 3,273,293 | |
Stock Issued During Period, Shares, New Issues | 11,627,357 | 11,627,357 | ||
Net Income (Loss) | -1,713,636 | |||
Stockholders' Equity, Other | -63,910 | |||
Stockholders' Equity at Aug. 31, 2012 | 8,722 | 4,956,254 | -3,352,941 | 1,612,035 |
Shares, Outstanding at Aug. 31, 2012 | 87,218,106 | 87,218,106 | ||
Stock Issued During Period, Value, New Issues | 652 | 1,373,267 | 1,373,919 | |
Stock Issued During Period, Shares, New Issues | 6,524,458 | 6,524,458 | ||
Net Income (Loss) | -2,244,830 | -2,244,830 | ||
Adjustments to Additional Paid in Capital, Warrant Issued | 0 | 0 | ||
Stock Repurchased and Retired During Period, Shares | 0 | |||
Stockholders' Equity at Aug. 31, 2013 | 9,374 | 6,329,521 | -5,597,771 | 741,124 |
Shares, Outstanding at Aug. 31, 2013 | 93,742,564 | 93,742,564 | ||
Stock Issued During Period, Value, New Issues | 2,141 | 1,861,982 | 1,864,123 | |
Stock Issued During Period, Shares, New Issues | 21,407,682 | 21,407,682 | ||
Net Income (Loss) | -2,218,630 | |||
Adjustments to Additional Paid in Capital, Warrant Issued | 0 | 0 | ||
Stock Repurchased and Retired During Period, Shares | 0 | |||
Stockholders' Equity at Aug. 30, 2014 | 11,515 | 8,191,503 | -7,816,401 | 386,617 |
Shares, Outstanding at Aug. 30, 2014 | 115,150,246 | 115,150,246 | ||
Stockholders' Equity at Aug. 31, 2014 | 11,515 | 8,191,503 | -7,816,401 | 386,617 |
Shares, Outstanding at Aug. 31, 2014 | 115,150,246 | 115,150,246 | ||
Net Income (Loss) | 43,107 | 43,107 | ||
Adjustments to Additional Paid in Capital, Warrant Issued | 0 | 0 | ||
Stock Repurchased and Retired During Period, Shares | 0 | |||
Stockholders' Equity at Nov. 30, 2014 | $11,515 | $8,191,503 | ($7,773,294) | $429,724 |
Shares, Outstanding at Nov. 30, 2014 | 115,150,246 | 115,150,246 |
Statement_of_Cash_Flows
Statement of Cash Flows (USD $) | 3 Months Ended | 12 Months Ended | 73 Months Ended | 76 Months Ended | ||
Nov. 30, 2014 | Nov. 30, 2013 | Aug. 31, 2014 | Aug. 31, 2013 | Aug. 31, 2014 | Nov. 30, 2014 | |
Statement of Cash Flows | ||||||
Net Income (Loss) | $43,107 | ($180,536) | ($2,218,630) | ($2,244,830) | ($7,816,401) | ($7,773,294) |
Security Deposit | -14,000 | -14,000 | -14,000 | -14,000 | ||
Amortization | 18,490 | 18,490 | 73,962 | 529,157 | 603,119 | 621,610 |
Depreciation | 14,502 | 5,638 | 30,169 | 33,485 | 95,535 | 121,078 |
Fair Value Change of Derivative Liability | -250,000 | -8,336 | 674,650 | 350,344 | 1,024,994 | 775,000 |
Allocated Share Based Compensation Expense | 18,094 | 29,890 | 29,890 | |||
Issuance of Stock and Warrants for Services or Claims | 25,000 | 73,323 | 2,973,463 | 2,973,463 | ||
Adjustment of Warrants Granted for Services | 27,449 | 27,449 | 27,449 | |||
Other Noncash Income (Expense) | 778,125 | 778,125 | 778,125 | |||
Adjustments, Noncash Items, to Reconcile Net Income (Loss) to Cash Provided by (Used in) Operating Activities | -173,901 | -146,650 | -609,275 | -1,258,521 | -2,297,826 | -2,460,679 |
Increase (Decrease) in Inventories | 1,000 | |||||
Increase (Decrease) in Prepaid Expense and Other Assets | 161 | -2,093 | -2,093 | -431 | ||
Increase (Decrease) in Operating Assets | 161 | -2,093 | 1,000 | -2,093 | -431 | |
Increase (Decrease) in Accounts Payable and Accrued Liabilities | -9,597 | 2,189 | 16,249 | 5,267 | 21,516 | 11,919 |
Increase (Decrease) in Operating Capital | -9,597 | 2,189 | 16,249 | 5,267 | 21,516 | 11,919 |
Net Cash Provided by (Used in) Operating Activities | -183,337 | -144,461 | -595,119 | -1,252,254 | -2,278,403 | -2,449,191 |
Payments to Acquire Property, Plant, and Equipment | -114,091 | -3,700 | -136,736 | -147,785 | ||
Payments to Acquire Intangible Assets | -59,704 | -479,388 | -539,092 | -539,092 | ||
Net Cash Provided by (Used in) Investing Activities | -173,795 | -483,088 | -675,828 | -686,877 | ||
Payments for (Proceeds from) Deposit on Loan | 204,200 | 351,132 | 830,022 | 830,022 | ||
Proceeds From Issuance Of Other Long Term Debt | 82,256 | 82,256 | ||||
Proceeds from (Repayments of) Notes Payable | -60,130 | -7,487 | -230,022 | -230,022 | ||
Proceeds from (Repayments of) Other Long-term Debt | -10,000 | -82,256 | -82,256 | |||
Proceeds from Issuance of Common Stock | 224,530 | 754,899 | 1,373,920 | 2,563,594 | 2,563,594 | |
Proceeds from Other Equity | 250,000 | 250,000 | 250,000 | |||
Net Cash Provided by (Used in) Financing Activities | 164,400 | 1,209,099 | 1,707,565 | 3,413,594 | 3,413,594 | |
Cash and Cash Equivalents, Period Increase (Decrease) | -183,337 | 19,939 | 440,185 | -27,777 | 459,363 | 277,526 |
Cash and Cash Equivalents, at Carrying Value | 459,363 | 19,178 | 19,178 | 46,955 | ||
Cash and Cash Equivalents, at Carrying Value | $277,526 | $39,117 | $459,363 | $19,178 | $459,363 | $277,526 |
Note_1_Organization_and_Summar
Note 1 - Organization and Summary of Significant Accounting Policies | 3 Months Ended |
Nov. 30, 2014 | |
Notes | |
Note 1 - Organization and Summary of Significant Accounting Policies: | Note 1 - Organization and summary of significant accounting policies: |
These unaudited interim financial statements as of and for the three months ended November 30, 2014 reflect all adjustments which, in the opinion of management, are necessary to fairly state the Company’s 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 Company’s financial statements and notes thereto included in the Company’s fiscal year end August 31, 2014, 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 threemonth period ended November 30, 2014 are not necessarily indicative of results for the entire year ending August 31, 2015. | |
Following is a summary of our organization and significant accounting policies: | |
Organization and nature of business – Sauer Energy, Inc. (formerly: BCO Hydrocarbon Ltd.) (identified in these footnotes as “we” or the “Company”) was incorporated in the State of Nevada, United States of America on August 19, 2008. It was a natural resource exploration stage company and anticipated acquiring, exploring, and if warranted and feasible, developing natural resource assets. BCO had the right to acquire a 50% working interest in an oil and gas lease in Alberta, Canada. | |
Sauer Energy, Inc. (the “Old Sauer”) was incorporated in California on August 7, 2008. The Company is a development stage company 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 Company’s 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 Company’s common Stock, including all of the shares owned by former officer and director Daniel Brooks and; (3) assume all of the Company’s 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 Company’s fiscal year-end is August 31. | |
Basis of presentation – Our accounting and reporting policies conform to U.S. generally accepted accounting principles applicable to development stage enterprises. |
Note_2_Going_Concern
Note 2 - Going Concern | 3 Months Ended |
Nov. 30, 2014 | |
Notes | |
Note 2 - Going Concern | 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 $7,773,294as of November 30, 2014, 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 Company’s ability to raise additional capital, obtain financing and to succeed in its future operations. 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. |
Note_3_Property_and_Equipment
Note 3 - Property and Equipment | 3 Months Ended | ||
Nov. 30, 2014 | |||
Notes | |||
Note 3 - Property and Equipment | Note 3 – Property and Equipment | ||
Property and Equipment consisted of the following at November 30, 2014 and August 31, 2014 | 30-Nov-14 | 31-Aug-14 | |
Computer and equipment & truck | $ 253,280 | $ 253,280 | |
Less: Accumulated depreciation/amortization | (121,078) | (106,576) | |
Property and equipment, net | $ 132,202 | $ 146,704 | |
Note_4_Asset_Purchase
Note 4 - Asset Purchase | 3 Months Ended | |
Nov. 30, 2014 | ||
Notes | ||
Note 4 - Asset Purchase | 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 | 11-May-12 | |
Tangible Assets | ||
Equipment | $ 23,000 | |
Supplies | 1,000 | |
Inventory | 1,000 | |
Total Tangible Assets | $ 25,000 | |
Intangible Assets | ||
Good will Purchased | $ 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 | |
Note_5_Intangible_Property
Note 5 - Intangible Property | 3 Months Ended | ||
Nov. 30, 2014 | |||
Notes | |||
Note 5 - Intangible Property | 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 November 30, 2014 and August 31, 2014 are as follows: | |||
Intangible Property | 30-Nov-14 | August 31,2014 | |
Patents | $ 109,092 | $ 109,092 | |
Purchased Patents | 1,467,500 | 1,467,500 | |
Good wil1 Purchased | 5,000 | 5,000 | |
Less Amortization | (189,109) | (170,619) | |
$ 1,392,483 | $ 1,410,973 | ||
Note_6_Convertible_Loans_and_I
Note 6 - Convertible Loans and Interest Payable | 3 Months Ended | ||
Nov. 30, 2014 | |||
Notes | |||
Note 6 - Convertible Loans and Interest Payable | Note 6 – 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 Company’s 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. | |||
November 30, 20142013 | |||
Convertible Loans and Accrued Interest: | |||
November 30, | |||
2014 | 2013 | ||
St. George Investments, 10% interest prepaid | $600,000 | $275,800 | |
JMJ Investments, 10% interest prepaid | - | 76,896 | |
Total Convertible notes | $600,000 | $352,696 | |
November 30, | |||
2014 | 2013 | ||
St. George Investments | $600,000 | $275,800 | |
JMJ Investments | - | 76,896 | |
Total Convertible notes | $600,000 | $352,696 | |
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 Company’s common stock on the day of any financial reporting period. At November 30, 2014 and 2013, the fully convertible shares would be 12,500,000 and 5,343,879 common shares, respectively. | |||
November 30, | |||
Derivative Liabilities on Convertible Loans: | 2014 | 2013 | |
St. George Investments | $ 775,000 | $ 267,442 | |
JMJ Investments | - | 74,566 | |
Total Derivative Liability | $ 775,000 | $ 342,008 | |
Note_8_Commitments_and_Conting
Note 8 - Commitments and Contingencies | 3 Months Ended |
Nov. 30, 2014 | |
Notes | |
Note 8 - Commitments and Contingencies | 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 are concentrated at the site. | |
Lease Commitments – as of November 30, 2014 for the following five fiscal years: | |
Fiscal year ended August 31, 2015 $ 63,000 | |
Note_9_Federal_Income_Taxes
Note 9- Federal Income Taxes | 3 Months Ended |
Nov. 30, 2014 | |
Notes | |
Note 9- Federal Income Taxes | 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 Company’s net operating loss carryforwards are subject to limitation if there is a 50% or more positive change in the ownership of the Company’s stock, unless the same or similar business is carried on. The net operating loss carryforward for federal and state income tax purposes was approximately $7,773,000, which will expire in 2028 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 Company incurred net income of $43,107 for the three months ended November 30, 2014. Although the company has no revenue, the net income was the result of the change in the derivative liability on convertible loans. The Company has net operating losses carried forward of approximately $7,773,000 for tax purposes which will expire in 2028 through 2034if not utilized. | |
No provision was made for federal income tax, since the Company had an overall net operating loss and has accumulated net operating loss carryforwards. | |
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. The Company may be assessed penalties and interest related to the underpayment of income taxes. Such assessments would be treated as a provision of income tax expense on the financial statements. For the year ended August 31, 2014 and 2013, no income tax expense has been realized as a result of operations and no income tax penalties and 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 Company’s evaluation of income tax positions included the years ended August 31, 2014, and 2013, 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 yearend or at the quarterly reporting dates. Any valuations relating to these income tax provisions will comply with U.S. generally accepted accounting principles. | |
Note_10_Capital_Stock
Note 10 - Capital Stock | 3 Months Ended | ||||
Nov. 30, 2014 | |||||
Notes | |||||
Note 10 - Capital Stock | Note 10 – Capital Stock | ||||
Starting on July 25, 2010, the Company entered into a series of private placement agreements with various investors. The arrangement involved issuing 800,000 units of securities at $0.25 per unit for a total amount of $200,000. Each unit consisted of one (1) share of common stock, par value $0.0001 per share and one (1) common stock purchase warrant expiring July 31, 2012 with an exercise price of $0.50 each. The private placement was oversubscribed and the Company accepted additional private placement funds. As of August 31, 2011, the Company issued 938,000 units of the securities in consideration of funds received of $234,500. | |||||
Starting on January 1, 2011, the Company entered into a series of private placement agreements with various investors. The arrangement involved issuing 666,667 units of securities at $0.30 per unit for a total amount of $200,000. Each unit consisted of one (1) share of common stock, par value $0.0001 per share and one (1) common stock purchase warrant expiring July 31, 2013 with an exercise price of $0.60 each. The private placement was oversubscribed and the Company accepted additional private placement funds. As of August 31, 2011, the Company issued 2,599,849 units of the securities in consideration of funds received of $779,955. | |||||
During the fiscal year ended August 31, 2011, the Company issued a total of 362,900 shares of common stock to certain consultants as compensation for services. The range of fair value of the stock was $0.75 ~ $1.55. Based on the fair value of the common stock on the day of issuance, $436,730 was charged to consulting expenses. | |||||
During the fiscal year ended August 31, 2011, the Company issued 150,000 shares of common stock to an investor relations firm for services to be provided. The fair value of the common stock on the day it was issued was $1.20 per share. Based on the fair value of the stock on the day of issuance, $180,000 was charged to investor relations expenses. A further 1,000,000 shares were issued to the firm in the fiscal year ended August 31, 2012. The fair value of the common stock on the day it was issued was $0.12 per share. Based on the fair value of the stock on the day of issuance, $120,000 was charged to investor relations expenses. The contract with the firm was cancelled in August, 2012. | |||||
During the fiscal year ended August 31, 2011, the Company issued 40,000 shares of common stock as directors’ fees to certain directors of the Company. The fair value of the common stock on the day it was issued was $1.20 per share. Based on the fair value of the common stock on the date of issuance, $48,000 was charged to director fees. | |||||
During the period September 1 to October 17, 2011, the Company entered into a series of private placement agreements with various investors involving issuing units of securities at $0.30 per unit. Each unit 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 $0.60 each, expiring July 31, 2013. The private placement was oversubscribed and the Company accepted additional private placement funds. On October 17, 2011 the Company issued 1,275,337 units of the securities in consideration of funds received of $382,601. | |||||
On October 17, 2011, the Company issued a total of 522,000 shares of restricted common stock to certain consultants as compensation for services. The fair value of the stock was $0.51. Based on the fair value of the common stock on the day of issuance, $266,220 was charged to consulting expense. | |||||
On October 17, 2011, the Company issued 200,000 shares of common stock to a consulting firm for services to be provided. The fair value of the common stock on the day it was issued was $0.51 per share. Based on the fair value of the stock on the day of issuance, $102,000 less $200 contributed was charged to consulting expense. | |||||
On October 17, 2011, the Company issued a total of 535,000 shares of restricted common stock to certain consultants as compensation for services. The fair value of the stock was $0.51. Based on the fair value of the common stock on the day of issuance, $272,850 was charged to consulting expense. | |||||
On December 1, 2011, the Company issued 650,000 units of securities to seven investors at $0.30 per unit for $195,000 cash, pursuant to a private placement agreement. Each unit consisted of one (1) share of common stock, par value $0.0001 per share and one (1) common stock purchase warrant with an exercise price of $0.60 each, expiring July 31, 2013. | |||||
On December 1, 2011, the Company issued 24,000 units of securities to an investor at $0.25 per unit for $6,000 cash pursuant to a private placement agreement. Each unit consisted of one (1) share of common stock, par value $0.0001 per share and one (1) common stock purchase warrant with an exercise price of $0.60 each, expiring July 31, 2014. | |||||
On January 24, 2012, the Company issued 125,000 shares of common stock at the closing price of $0.60 per share for legal fees of $75,000. | |||||
On January 26, 2012, the Company issued 25,000 shares of common stock at the closing price of $0.60 per share for legal fees of $15,000. | |||||
On April 30, 2012, the Company issued 363,000 shares of common stock at the closing price of $0.34 per share for services by six providers. An expense of $123,420 was recorded. | |||||
On May 11, 2012, the Company issued 6,000,000 shares of common stock pursuant to an Asset Purchase Agreement for certain wind turbine assets at the agreed price of $0.25 per share, including intangible assets. The fair market value of the assets was recorded, $1,500,000. | |||||
On July 31, 3012, the Company issued 808,000 units of securities at $0.25 per unit for $202,000 cash pursuant to a private placement agreement. Each unit consisted of one (1) share of common stock, par value $0.0001 per share and one (1) common stock purchase warrant with an exercise price of $0.50 each, expiring July 31, 2014. | |||||
On July 31, 2012, the Company issued 100,000 shares of common stock at $0.12 per share for legal fees of $12,000. | |||||
On July 31, 2012, the Company issued 1,000,000 shares of common stock at $0.12 per share for contract services of $120,000. | |||||
On September 18, 2012, the Company issued 200,000 units of securities at $0.25 per unit for $50,000 cash pursuant to a private placement agreement. Each unit consisted on 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 each, expiring March 31, 2014. | |||||
On October 10, 2012 the Company issued 950,980shares of common stock at $0.12 per share for cash of $120,000 pursuant to an investment agreement as the commitment fee for an equity line. | |||||
On October 10, 2012, the Company entered into a private placement agreement that involved issuing 200,000 units of securities at $0.25 per unit for a total amount of $50,000. Each unit consisted of one (1) share of common stock, par value $0.0001 per share and one (1) common stock purchase warrant expiring March 31, 2014, with an exercise price of $0.50 each. | |||||
On December 14, 2012, the Company issued 100,000 shares of common stock for $0.21 per share for consulting services of $21,000. | |||||
On December 14, 2012, the Company issued 1,479,963 shares of common stock at $0.22 per share as a commitment fee. The shares were subsequently canceled and have been reissued to the escrow agent until the transaction is quantifiable and completely resolved. | |||||
On December 14, 2012, the Company issued 12,000 shares of common stock for $0.21 per share for consulting services of $2,520. | |||||
On January 7, 2013, the Company issued 2,000,000 shares of common stock for $0.215 per share pursuant to a restrictive covenant. | |||||
On March 12, 2013, the Company issued 240,000 shares of common stock for $0.12 per share for consulting services of $28,800. | |||||
On April 5, 2013, the Company issued 250,000 shares of common stock for $0.10 per share for consulting services of $25,000. | |||||
On July 12, 2013 the Company issued 220,000 shares of common stock for $0.34 per share for consulting services of $74,800. | |||||
On July 12, 2013, the Company issued 50,000 shares of common stock for $0.34 per share for consulting services of $17,000. | |||||
On July 12, 2013, the Company issued 200,000 shares of common stock for $0.34 per share for consulting services of $68,000. | |||||
On July 12, 2013, the Company issued 50,000 shares of common stock for $0.34 per share for a bonus for consulting services of $17,000. | |||||
On July 12, 2013, the Company issued 50,000 shares of common stock for $0.34 per share for a bonus for consulting services of $17,000. | |||||
On July 12, 2013, the Company issued 35,000 shares of common stock for $0.34 per share for a bonus for consulting services of $11,900. | |||||
On July 12, 2013, the Company issued 100,000 shares of common stock for $0.34 per share for consulting services of $34,000. | |||||
On July 12, 2013, the Company issued 35,000 shares of common stock for $0.34 per share for consulting services of $11,900. | |||||
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, expiring July 31, 2015. | |||||
On August 16, 2013, the Company issued 151,515 shares of common stock for $19,956 at $0.132 per share pursuant to a convertible note. | |||||
On September 16, 2013, the Company issued 110,375 shares of common stock for $10,000 at $0.0906 per share pursuant to a convertible note. | |||||
On October 1, 2013, the Company issued 200,000 shares of common stock for $13,600 at $0.06800 per share pursuant to a convertible note. | |||||
On October 9, 2013, the Company issued 500,000 shares of common stock for $28,000 at $0.0560 per share pursuant to a convertible note. | |||||
Some of the following disclosures are net of wire fees and expenses. | |||||
On October 16, 2013, the Company issued 555,720 shares of common stock for $74,915 at $0.16870 per share pursuant to an Equity Purchase Agreement to repay loan, interest and fees. | |||||
On November 6, 2013, the Company issued 250,000 shares of common stock for $26,355 at $0.1056 per share pursuant to an Equity Purchase Agreement. | |||||
On November 11, 2013, the Company issued 300,000 shares of common stock for $30,819 at $0.10288 per share pursuant to an Equity Purchase Agreement. | |||||
On November 14, 2013, the Company issued 300,000 shares of common stock for $20,160 at $0.0672 per share pursuant to a convertible note. | |||||
On November 18, 2013, the Company issued 300,000 shares of common stock for $32,091 at $0.1071 per share pursuant to an Equity Purchase Agreement. | |||||
On December 2, 2013, the Company issued 290,000 shares of common stock for $19,314 at $0.06660 per share pursuant to a convertible note. | |||||
On December 2, 2013, the Company issued 300,000 shares of common stock for $29,619 at $0.09888 per share pursuant to an Equity Purchase Agreement. | |||||
On December 9, 2013, the Company issued 300,000 shares of common stock for $28,707 at $0.09584 per share pursuant to an Equity Purchase Agreement. | |||||
On January 6, 2014, the Company issued 300,000 shares of common stock for $18,180 at $0.06060 per share pursuant to a convertible note. | |||||
On January 9, 2014, the Company issued 332,742 shares of common stock for $29,955 at $0.0902 per share pursuant to an Equity Purchase Agreement. | |||||
On January 21, 2014, the Company issued 349,097 shares of common stock for $29,955 at $0.0857 per share pursuant to an Equity Purchase Agreement. | |||||
On January 29, 2014, the Company issued 310,000 shares of common stock for $15,066 at $0.0486 per share pursuant to a convertible note. | |||||
On February 14, 2014, the Company issued 500,741 shares of common stock for $24,336 at $0.0486 per share pursuant to a convertible note. | |||||
On March 3, 2014, the Company issued 330,235 shares of common stock for $26,980 at $0.08176 per share pursuant to an Equity Purchase Agreement. | |||||
On March 28, 2014, the Company issued 577,741 shares of common stock for $49,980 at $0.0900 per share pursuant to an Equity Purchase Agreement. | |||||
On April 1, 2014, the Company issued 371,645 shares of common stock for $34,980 at $0.0942 per share pursuant to an Equity Purchase Agreement. | |||||
On April 9, 2014, the Company issued 400,000 shares of common stock for $37,996 at $0.0950 per share pursuant to an Equity Purchase Agreement. | |||||
On April 15, 2014, the Company issued 352,936 shares of common stock for $34,954 at $0.0992 per share pursuant to an Equity Purchase Agreement. | |||||
On April 24, 2014, the Company issued 320,000 shares of common stock for $32,277 at $0.1010 per share pursuant to an Equity Purchase Agreement. | |||||
On May 7, 2014, the Company issued 310,000 shares of common stock for $27,280 at $0.0880 per share pursuant to an Equity Purchase Agreement. | |||||
On May 23, 2014, the Company issued 310,000 shares of common stock for $25,567 at $0.0826 per share pursuant to an Equity Purchase Agreement. | |||||
On June 9, 2014, the Company issued 300,000 shares of common stock for $20,229 at $0.06758 per share pursuant to an Equity Purchase Agreement. | |||||
On June 23, 2014, the Company issued 323,950 shares of common stock for $19,956 at $0.06174 per share pursuant to an Equity Purchase Agreement. | |||||
On May 30, 2014, the Company issued 500,000 shares of common stock for $0.05 per share for consulting services of $25,000. | |||||
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. | |||||
For the year ended August 31, 2014, the Company recognized two equity transactions in warrants which hada total Black-Scholes value of $27,449. | |||||
Note 11 – Warrants | |||||
During the fiscal year ended August 31, 2013, the Company entered two private placement agreements with various investors. (Refer to Note 10–Capital Stock). | |||||
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 expires on 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 expiring 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 and expiring January 31, 2016. The Company also issued 1,000,000 warrants to an investor in consideration of a loan for $50,000. These warrants had an exercise price of $0.18 and exercise period of one and a half years. | |||||
During the three months ended November 30, 2014, the Company did not issue any additional warrants or other convertible securities. | |||||
The following table is a summary of information about the outstanding stock warrants as ofNovember 30, 2014: | |||||
Shares Underlying \Warrants Outstanding | Weighted Average Remaining Contractual Life | Weighted Average | Exercise Price | ||
$0.40 | 800,000 Shares \ 800,000 Warrants | $0.32 | |||
$0.18 - $0.30 | 6,000,000 Shares \ 6,000,000 Warrants | 0.53 years | $0.28 | ||
1.02 years | |||||
The following table is a summary of activity of outstanding stock warrants for the three months ended November 30, 2014:Activity | Number of Warrants | Weighted Average Exercise Price | |||
Balance, August 31, 2014 | 6,800,000 | $0.29 | |||
Warrants expired | - | - | |||
Warrants cancelled | - | - | |||
Warrants Granted | - | - | |||
Warrants exercised | - | - | |||
Balance, November 30, 2014 | 6,800,000 | $0.29 | |||
Note_12_Contingencies_Litigati
Note 12 - Contingencies, Litigation | 3 Months Ended |
Nov. 30, 2014 | |
Notes | |
Note 12 - Contingencies, Litigation | 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 Company’s 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. George’s 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 November 30, 2014, the Company still owed St. George $600,000. See Note 14. |
Note_13_Correction_of_An_Error
Note 13 - Correction of An Error | 3 Months Ended |
Nov. 30, 2014 | |
Notes | |
Note 13 - Correction of An Error | NOTE 13 – Correction of an Error |
The Company acquired patents and other intangible property in 2012. The originally acquired patents were not given lives nor did they begin their amortization. Also the Company had expensed certain legal costs on patents which should have been capitalized into the patents. The Company had also acquired restrictive covenants of $432,500 which should have been fully amortized in 2013. The unrecognized amortization for the intangible assets for the three months ending November 30, 2013 was $18,491. | |
The Company also had entered into debt agreements which included original issuance discounts on the loans and a delayed prepaid interest charge. The Company was recognizing these amounts as the underlying debt was converted. Since the full amount owed of interest and discounts were convertible to shares, the expense should have been recognized in the period it was initially convertible. Accordingly, interest was overstated by $12,864 for the three months ending November 30, 2013. | |
Also the debt agreements included preferential conversion terms which were not identified as possible derivatives. It was determined that the agreements were both under the preferential discount on the conversion of the loan balances to common stock. The fair market value of the possible share conversion terms for the three months ending November 30, 2013 was $342,008, for an increase in other income of $8.337. | |
For the three months ending November 30, 2013, these corrections resulted in an increase of $2,710to the net loss of $180,535 for a restated net loss of $183,245 and the same increase to the accumulated deficit, and no effect upon the loss per share for the quarter. |
Note_14_Subsequent_Events
Note 14 - Subsequent Events | 3 Months Ended |
Nov. 30, 2014 | |
Notes | |
Note 14 - Subsequent Events | NOTE 14 – Subsequent Events |
Management has reviewed and evaluated subsequent events and transactions occurring after the balance sheet date, November 30th, 2014, through the filing of this Quarterly Report on Form 10-Q on January 15th, 2015 and determined that only the following additional subsequent event has occurred: | |
Conversion of Settlement Debt—In early January 2015, St. Georges Investments elected to convert $30,000 of the loan balance in to the Company’s common stock. On January 5th, the Company authorized 698,324 shares of common stock to be issued in exchange for cancellation of $30,000 of the convertible loan. |
Use_of_Estimates_Policy_Polici
Use of Estimates, Policy (Policies) | 3 Months Ended |
Nov. 30, 2014 | |
Policies | |
Use of Estimates, Policy | Use of estimates - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Cash_and_Cash_Equivalents_For_
Cash and Cash Equivalents - For Purposes of The Statement of Cash Flows, We Consider All Cash in Banks, Money Market Funds, and Certificates of Deposit With A Maturity of Less Than Three Months To Be Cash Equivalents. (Policies) | 3 Months Ended |
Nov. 30, 2014 | |
Policies | |
Cash and Cash Equivalents - For Purposes of The Statement of Cash Flows, We Consider All Cash in Banks, Money Market Funds, and Certificates of Deposit With A Maturity of Less Than Three Months To Be Cash Equivalents. | Cash and cash equivalents - For purposes of the statement of cash flows, we consider all cash in banks, money market funds, and certificates of deposit with a maturity of less than three months to be cash equivalents. |
Property_Plant_and_Equipment_a
Property, Plant, and Equipment and Intangible Assets (Policies) | 3 Months Ended |
Nov. 30, 2014 | |
Policies | |
Property, Plant, and Equipment and Intangible Assets | Fixed assets - Property, plant and equipment is valued at cost less accumulated depreciation and impairment losses. If the costs of certain components of an item of property, plant and equipment are significant in relation to the total cost of the item, they are accounted for and depreciated separately. Depreciation expense is recognized using the straight-line method for the vehicle and the double declining method for all remaining assets and is amortized over the estimated useful life of the related asset. The following useful lives are assumed: |
Vehicle & Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 years | |
Furniture & Fixtures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Years |
Fair_Value_Measurement_Policy_
Fair Value Measurement, Policy (Policies) | 3 Months Ended |
Nov. 30, 2014 | |
Policies | |
Fair Value Measurement, Policy | Fair Value of Financial Instruments - The Financial Accounting Standards Board issued ASC (Accounting Standards Codification) 820-10 (SFAS No. 157), “Fair Value Measurements and Disclosures" for financial assets and liabilities. ASC 820-10 provides a framework for measuring fair value and requires expanded disclosures regarding fair value measurements. FASB ASC 820- 10 defines fair value as the price that would be received for an asset or the exit price that would be paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. FASB ASC 820-10 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs, where available. The following summarizes the three levels of inputs required by the standard that the Company uses to measure fair value: |
- 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 Company’s financial instruments as of November 30, 2014 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 Company’s free trading common stock. |
Income_Tax_Policy_Policies
Income Tax, Policy (Policies) | 3 Months Ended |
Nov. 30, 2014 | |
Policies | |
Income Tax, Policy | Federal income taxes -The Company utilizes FASB ACS 740, “Income Taxes”, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. A valuation allowance is recorded when, in the opinion of management, it is “more likely-than-not” that a deferred tax asset will not be realized. The Company generated a deferred tax credit through net operating loss carry-forward. A valuation allowance of 100% has been established. |
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. | |
Advertising_Advertising_and_Ma
Advertising - Advertising and Marketing Expenses For The Three Months Ended November 30, 2014 and November 30, 2013 Was $4,433 and $1,488 Respectively. (Policies) | 3 Months Ended |
Nov. 30, 2014 | |
Policies | |
Advertising - Advertising and Marketing Expenses For The Three Months Ended November 30, 2014 and November 30, 2013 Was $4,433 and $1,488 Respectively. | Advertising - Advertising and marketing expenses for the three months ended November 30, 2014 and November 30, 2013 was $4,433 and $1,488 respectively. |
Earnings_Per_Share_Policy_Poli
Earnings Per Share, Policy (Policies) | 3 Months Ended |
Nov. 30, 2014 | |
Policies | |
Earnings Per Share, Policy | Basic and Diluted Earnings (Loss) Per Share - Net loss per share is calculated in accordance with FASB ASC 260, Earnings Per Share, for the period presented. Basic net loss per share is based upon the weighted average number of common shares outstanding. Diluted net loss per share is based on the assumption that all dilutive convertible shares and stock options were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. The Company has potentially dilutive securities outstanding consisting of warrants to purchase common stock, (see Note 10) and the conversion of convertible loans (see Note 7). For the three months ended November 30, 2014, the warrants would not have been exercised since they are priced significantly higher than the market value of the Company’s trading common stock, while the convertible loans would likely be converted due to the discount that would be applied to the market price. As of November 30, 2014, the 12,500,000possible shares under the convertible loan would be considered dilutive. Alternatively, for the three months ended November 30, 2013, the exercise of warrants or conversions would be anti-dilutive since the Company was in a loss position, and they are not counted in the calculation of loss per share. The total common stock equivalents on a fully diluted basis if all outstanding agreements were exercised at November 30, 2014 and 2013 were 19,300,000 and 7,175,879 shares, respectively. |
Development_Stage_Enterprise_G
Development Stage Enterprise General Disclosures (Policies) | 3 Months Ended |
Nov. 30, 2014 | |
Policies | |
Development Stage Enterprise General Disclosures | Development Stage Company - The Company is considered a development stage company, with no operating revenues during the periods presented, as defined by FASB Accounting Standards Codification ASC 915. ACS 915 requires companies to report their operations, shareholders’ deficit and cash flows since inception through the date that revenues are generated from management’s intended operations, among other things. Management has defined inception as August 7, 2008. Since inception, the Company has incurred an operating loss of $7,773,294. The Company’s working capital has been generated through advances from the principal of the Company and solicitation of subscriptions. Management has provided financial data since August 7, 2008 in the financial statements, as a means to provide readers of the Company’s financial information to be able to make informed investment decisions. |
Recent_Accounting_Pronouncemen
Recent Accounting Pronouncements-management Has Considered All Recent Accounting Pronouncements. The Following Pronouncement Was Deemed Applicable To Our Financial Statements. (Policies) | 3 Months Ended |
Nov. 30, 2014 | |
Policies | |
Recent Accounting Pronouncements-management Has Considered All Recent Accounting Pronouncements. The Following Pronouncement Was Deemed Applicable To Our Financial Statements. | Recent Accounting Pronouncements—Management has considered all recent accounting pronouncements. The following pronouncement was deemed applicable to our financial statements. |
In July of 2013, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2013-13,"Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists." The provisions of ASU No. 2013-11 require an entity to present an unrecognized tax benefit, or portion thereof, in the statement of financial position as a reduction to a deferred tax asset for a net operating loss carryforward or a tax credit carryforward, with certain exceptions related to availability. ASU No. 2013-11 is effective for interim and annual reporting periods beginning after December 15, 2013. The adoption of ASU No. 2013-11 is not expected to have a material impact on the Company's Financial Statements until the Company can reasonably project future income. As such, the Company will disclose the Reserve pertaining to the NOL Carryforward in the Notes to the Financial Statements until such time as the Company is able to present the unrecognized NOL in the statement of financial position. | |
In April of 2014, the FASB issued ASU 2014-08, “Presentation of Financial Statements and Property Plant, and Equipment Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. The amendments in this Update affect an entity that has a component that is disposed of or held for sale. We are evaluating the inclusion of this information should it apply in the future. This pronouncement will be adopted should it become relevant. | |
In June of 2014, the FASB issued ASU 2014-10, “Development State Entities Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, the amendments in this Update affect entities that are development stage entities under U.S. GAAP. A development stage entity is defined in the Master Glossary of the Accounting Standards Codification as follows: An entity devoting substantially all of its efforts to establishing anew business and for which either of the following conditions exists: | |
a. Planned principal operations have not commenced. | |
b. Planned principal operations have commenced, but there has been no significant revenue therefrom. | |
This update applies to the Company as no significant revenue has been received, although there will be no significant impact on the financial statements since the amendments eliminate the requirements for development stage entities to (1) present inception-to-date information in the statements of income, cash flows, and shareholder equity, (2) label the financial statements as those of a development stage entity, (3) disclose a description of the development stage activities in which the entity is engaged, and (4) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage. This amendment will become effective as of December 15, 2014 for the Company, after which the presentation of the financial statements will be revised as noted above. | |
In August of 2014, the FASB issued ASU 2014-15,”Presentation of Financial Statements—Going Concern (Subtopic 205-40) Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. The amendments in this Update apply to all entities and will become effective as of the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The Company will implement this Update if substantial doubt is ever raised about the Company’s ability to continue as a going concern within one year after the financial statements are issued or at the date the financial statements are available to be issue when applicable. |
Share_Based_Payments_and_Award
Share Based Payments and Awards (Policies) | 3 Months Ended |
Nov. 30, 2014 | |
Policies | |
Share Based Payments and Awards | 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 25’s 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 three months ended November 30, 2014, we recognized $0 in share based expense due to the issuance of common stock warrants. |
Note_3_Property_and_Equipment_
Note 3 - Property and Equipment: Property, Plant and Equipment (Tables) | 3 Months Ended | ||
Nov. 30, 2014 | |||
Tables/Schedules | |||
Property, Plant and Equipment | |||
Property and Equipment consisted of the following at November 30, 2014 and August 31, 2014 | 30-Nov-14 | 31-Aug-14 | |
Computer and equipment & truck | $ 253,280 | $ 253,280 | |
Less: Accumulated depreciation/amortization | (121,078) | (106,576) | |
Property and equipment, net | $ 132,202 | $ 146,704 |
Note_4_Asset_Purchase_Equity_M
Note 4 - Asset Purchase: Equity Method Investments (Tables) | 3 Months Ended | |
Nov. 30, 2014 | ||
Tables/Schedules | ||
Equity Method Investments | ||
Asset Purchase | 11-May-12 | |
Tangible Assets | ||
Equipment | $ 23,000 | |
Supplies | 1,000 | |
Inventory | 1,000 | |
Total Tangible Assets | $ 25,000 | |
Intangible Assets | ||
Good will Purchased | $ 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 |
Note_5_Intangible_Property_Sch
Note 5 - Intangible Property: Schedule of Intangible Assets and Goodwill (Tables) | 3 Months Ended | ||
Nov. 30, 2014 | |||
Tables/Schedules | |||
Schedule of Intangible Assets and Goodwill | |||
Intangible Property | 30-Nov-14 | August 31,2014 | |
Patents | $ 109,092 | $ 109,092 | |
Purchased Patents | 1,467,500 | 1,467,500 | |
Good wil1 Purchased | 5,000 | 5,000 | |
Less Amortization | (189,109) | (170,619) | |
$ 1,392,483 | $ 1,410,973 |
Note_6_Convertible_Loans_and_I1
Note 6 - Convertible Loans and Interest Payable: Convertible Loans and Accrued Interest (Tables) | 3 Months Ended | ||
Nov. 30, 2014 | |||
Tables/Schedules | |||
Convertible Loans and Accrued Interest: | Convertible Loans and Accrued Interest: | ||
November 30, | |||
2014 | 2013 | ||
St. George Investments, 10% interest prepaid | $600,000 | $275,800 | |
JMJ Investments, 10% interest prepaid | - | 76,896 | |
Total Convertible notes | $600,000 | $352,696 | |
Note_6_Convertible_Loans_and_I2
Note 6 - Convertible Loans and Interest Payable: Derivative Liabilities On Convertible Loans (Tables) | 3 Months Ended | ||
Nov. 30, 2014 | |||
Tables/Schedules | |||
Derivative Liabilities On Convertible Loans: | November 30, | ||
Derivative Liabilities on Convertible Loans: | 2014 | 2013 | |
St. George Investments | $ 775,000 | $ 267,442 | |
JMJ Investments | - | 74,566 | |
Total Derivative Liability | $ 775,000 | $ 342,008 | |
Note_3_Property_and_Equipment_1
Note 3 - Property and Equipment: Property, Plant and Equipment (Details) (USD $) | Nov. 30, 2014 | Aug. 31, 2014 |
Details | ||
Fixtures and Equipment, Gross | $253,280 | $253,280 |
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment | -121,078 | -106,576 |
Property, Plant and Equipment, Net | $132,202 | $146,704 |
Note_4_Asset_Purchase_Equity_M1
Note 4 - Asset Purchase: Equity Method Investments (Details) (USD $) | 11-May-12 |
Details | |
Equipment Purchased | $23,000 |
Supplies Purchased | 1,000 |
Inventory Purchased | 1,000 |
Total Tangible Assets Purchased | 25,000 |
Good will Purchased | 5,000 |
Intellectual Property Purchased | 1,467,500 |
Restrictive Covenant Purchased | 2,500 |
Total intangible assets acquired | 1,475,000 |
Total Assets acquired | $1,500,000 |
Note_5_Intangible_Property_Sch1
Note 5 - Intangible Property: Schedule of Intangible Assets and Goodwill (Details) (USD $) | Nov. 30, 2014 | Aug. 31, 2014 |
Details | ||
Patents | $109,092 | $109,092 |
Purchased Patents | 1,467,500 | 1,467,500 |
Good wil1 Purchased | 5,000 | 5,000 |
Amortization | ($189,109) | ($170,619) |
Note_6_Convertible_Loans_and_I3
Note 6 - Convertible Loans and Interest Payable (Details) (USD $) | Nov. 30, 2014 | Nov. 30, 2013 |
Details | ||
St. George Investments | $600,000 | $275,800 |
JMJ Investments | 76,896 | |
Total Convertible notes | $600,000 | $352,696 |
Note_6_Convertible_Loans_and_I4
Note 6 - Convertible Loans and Interest Payable: Derivative Liabilities On Convertible Loans (Details) (USD $) | Nov. 30, 2014 | Nov. 30, 2013 |
Details | ||
Derivative Liability St. George | $775,000 | $267,442 |
Derivative Liability JMJ | 74,566 | |
Total Derivative Liability | $775,000 | $342,008 |