Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Mar. 31, 2015 | Jul. 13, 2015 | Sep. 30, 2014 | |
Document And Entity Information | |||
Entity Registrant Name | Saleen Automotive, Inc. | ||
Entity Central Index Key | 1,528,098 | ||
Document Type | 10-K | ||
Document Period End Date | Mar. 31, 2015 | ||
Amendment Flag | false | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filer | No | ||
Entity Current Reporting Status | Yes | ||
Current Fiscal Year End Date | --03-31 | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 12,239,251 | ||
Entity Common Stock, Shares Outstanding | 460,556,796 | ||
Trading Symbol | SLNN | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,015 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Mar. 31, 2015 | Mar. 31, 2014 |
Current Assets | ||
Cash | $ 143,083 | $ 1,499,889 |
Accounts receivable, net of allowance for doubtful accounts of $271,658 as of March 31, 2014 | 4,945 | 198,538 |
Inventory | 725,687 | 433,941 |
Prepaid expenses and other current assets | 37,079 | 97,926 |
Total Current Assets | 910,794 | 2,230,294 |
Property and equipment, net | 592,116 | 546,824 |
Other assets | 5,000 | 47,904 |
TOTAL ASSETS | 1,507,910 | 2,825,022 |
Current Liabilities | ||
Accounts payable | 1,677,309 | 2,024,730 |
Due to related parties | 326,512 | 172,534 |
Notes payable | 671,750 | $ 1,275,774 |
Current portion of convertible notes, net of discount of $250,892 at March 31, 2015 | 267,332 | |
Notes payable to related parties | 267,000 | $ 209,452 |
Payroll and other taxes payable | 745,503 | 808,875 |
Accrued interest on notes payable | 387,005 | 380,257 |
Customer deposits | 1,896,568 | $ 193,912 |
Deferred vendor consideration | 275,000 | |
Derivative liability | 1,268,588 | |
Other current liabilities | 178,891 | $ 215,046 |
Total Current Liabilities | $ 7,961,458 | 5,280,580 |
Accounts to be settled by issuance of equity securities | 470,534 | |
Derivative liability | 5,032,786 | |
Convertible notes payable, net of discount of $1,585,935 and $3,498,981 at March 31, 2015 and 2014, respectively | $ 3,215,677 | 1,337,751 |
Total Liabilities | $ 11,177,135 | $ 12,121,651 |
Commitments and Contingencies | ||
Stockholders' Deficit | ||
Common Stock; $0.001 par value; 500,000,000 shares authorized; 174,857,028 and 137,710,501 issued and outstanding as of March 31, 2015 and 2014, respectively | $ 174,856 | $ 137,710 |
Preferred stock; $0.001 par value; 1,000,000 shares authorized; none issued and outstanding | ||
Additional paid in capital | $ 18,530,191 | $ 10,431,175 |
Accumulated deficit | (28,374,272) | (19,865,514) |
Total Stockholders' Deficit | (9,669,225) | (9,296,629) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ 1,507,910 | $ 2,825,022 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Mar. 31, 2015 | Mar. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 271,658 | |
Current portion of convertible notes, discount | $ 250,892 | |
Convertible notes payable, discount | $ 1,585,935 | $ 3,498,981 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 174,857,028 | 137,710,501 |
Common stock, shares outstanding | 174,857,028 | 137,710,501 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Revenue | ||
Vehicles and parts | $ 3,800,390 | $ 4,985,726 |
Design Services | 121,500 | |
Total revenue | $ 3,800,390 | 5,107,226 |
Costs of goods sold | 3,366,437 | 4,277,039 |
Gross profit | 433,953 | 830,187 |
Operating expenses | ||
Research and development | 747,833 | 766,996 |
Sales and marketing | 1,656,797 | 1,537,228 |
General and administrative | 3,181,542 | 4,261,612 |
Settlement (gain) costs (including $385,785 from related parties during the year ended March 31, 2014) | (12,273) | 945,401 |
Depreciation and amortization | 181,983 | 97,061 |
Total operating expenses | 5,755,882 | 7,608,298 |
Loss from operations | (5,321,929) | (6,778,111) |
Other income (expenses) | ||
Interest expense | $ (2,310,774) | (606,194) |
Costs of reverse merger transaction | $ (365,547) | |
Private placement costs | $ (780,290) | |
Loss on extinguishment of convertible debt | (1,257,468) | |
Gain on extinguishment of derivative liability | 50,314 | $ 236,158 |
Change in fair value of derivative liabilities | 1,111,389 | (3,608,288) |
Net loss | $ (8,508,758) | $ (11,121,982) |
Net loss per share: | ||
Basic and diluted | $ (0.05) | $ (0.09) |
Shares used in computing net loss per share: | ||
Basic and diluted | 158,673,334 | 123,377,666 |
Consolidated Statements of Ope5
Consolidated Statements of Operations (Parenthetical) | 12 Months Ended |
Mar. 31, 2014USD ($) | |
Income Statement [Abstract] | |
Settlement costs from related parties | $ 385,785 |
Consolidated Statement of Stock
Consolidated Statement of Stockholders' Deficit - USD ($) | Common Stock [Member] | Preferred Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at Mar. 31, 2013 | $ 10,269 | $ 4,584,976 | $ (8,743,532) | $ (4,148,287) | |
Balance, shares at Mar. 31, 2013 | 883,822 | ||||
Shares issued upon reverse merger | $ 8,000 | $ (8,000) | |||
Shares issued upon reverse merger, shares | 8,000,000 | ||||
Shares issued for directors fees | $ 5 | 249,995 | $ 250,000 | ||
Shares issued for directors fees, shares | 5,277 | ||||
Shares issued for services to related parties | $ 1 | 43,749 | 43,750 | ||
Shares issued for services to related parties, shares | 923 | ||||
Fair value of shares issued for services | $ 530 | $ 5 | 429,296 | 429,831 | |
Fair value of shares issued for services, shares | 530,000 | 4,976 | |||
Shares issued as principal payments on notes payable | 22,803 | 22,803 | |||
Shares issued as principal payments on notes payable, shares | 481 | ||||
Shares issued as interest on notes payable | $ 1 | 24,696 | 24,697 | ||
Shares issued as interest on notes payable, shares | 521 | ||||
Shares issued for payment of accounts payable | $ 325 | 102,866 | 103,191 | ||
Shares issued for payment of accounts payable, shares | 325,128 | ||||
Shares and warrants issued for payments of accounts payable - related parties | $ 2,509 | 1,117,873 | 1,120,382 | ||
Shares and warrants issued for payments of accounts payable - related parties, shares | 2,508,908 | ||||
Shares issued for cash | $ 8,793 | 1,303,707 | $ 1,312,500 | ||
Shares issued for cash, shares | 8,793,337 | ||||
Adjustment of super voting preferred | $ (1,385) | 1,385 | |||
Conversion of super voting preferred to common stock | $ 112,000 | $ (896) | (111,104) | ||
Conversion of super voting preferred to common stock, shares | 112,000,000 | (896,000) | |||
Conversion of convertible debt to common stock | $ 5,553 | 410,933 | $ 416,486 | ||
Conversion of convertible debt to common stock, shares | 5,553,128 | ||||
Beneficial conversion feature associated with convertible debt financing | 2,250,000 | $ 2,250,000 | |||
Amounts payable settled through the issuance of equity securities | |||||
Net loss | (11,121,982) | $ (11,121,982) | |||
Balance at Mar. 31, 2014 | $ 137,710 | 10,431,175 | (19,865,514) | (9,296,629) | |
Balance, shares at Mar. 31, 2014 | 137,710,501 | ||||
Fair value of shares issued for services | $ 1,000 | 169,000 | $ 170,000 | ||
Fair value of shares issued for services, shares | 1,000,000 | 1,000,000 | |||
Shares issued for cash | $ 1,183 | 176,317 | $ 177,500 | ||
Shares issued for cash, shares | 1,183,334 | 527,520 | |||
Conversion of super voting preferred to common stock | $ 125 | ||||
Beneficial conversion feature associated with convertible debt financing | 250,000 | ||||
Amounts payable settled through the issuance of equity securities | $ 1,285 | $ 469,249 | $ 470,534 | ||
Amounts payable settled through the issuance of equity securities, shares | 1,285,460 | ||||
Shares issued upon exercise of warrants | 50 | 7,450 | 7,500 | ||
Shares issued upon exercise of warrants, shares | 50,000 | ||||
Shares issued as consideration for the amendments of convertible notes | $ 747 | $ 111,312 | $ 112,059 | ||
Shares issued as consideration for the amendments of convertible notes, shares | 747,066 | 747,066 | |||
Fair value of shares issued upon conversion of convertible notes and accrued interest | $ 19,818 | 913,105 | $ 932,923 | ||
Fair value of shares issued upon conversion of convertible notes and accrued interest, shares | 19,817,900 | ||||
Fair value of shares issued as payments on notes payable and accrued interest | $ 5,495 | 577,196 | 582,691 | ||
Fair value of shares issued as payments on notes payable and accrued interest, shares | 5,494,787 | ||||
Fair value of shares issued upon settlement of accounts payable | $ 7,568 | 216,110 | 223,678 | ||
Fair value of shares issued upon settlement of accounts payable, shares | 7,567,980 | ||||
Fair value of beneficial conversion feature associated with convertible debt financing | 327,483 | 327,483 | |||
Fair value of conversion feature associated with debt extinguishment | 572,493 | 572,493 | |||
Fair value of derivative liability extinguished upon modification of convertible note | 3,908,950 | 3,908,950 | |||
Fair value of stock-based compensation | 650,351 | 650,351 | |||
Net loss | (8,508,758) | (8,508,758) | |||
Balance at Mar. 31, 2015 | $ 174,856 | $ 18,530,191 | $ (28,374,272) | $ (9,669,225) | |
Balance, shares at Mar. 31, 2015 | 174,857,028 |
Consolidated Statement of Stoc7
Consolidated Statement of Stockholders' Deficit (Parenthetical) - $ / shares | Mar. 31, 2015 | Mar. 31, 2014 |
Statement of Stockholders' Equity [Abstract] | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Cash flows from operating activities | ||
Net loss | $ (8,508,758) | $ (11,121,982) |
Adjustments to reconcile net (loss) to net cash used in operating activities | ||
Depreciation and amortization | 181,983 | 97,061 |
Change in fair value of derivative liabilities | (1,111,389) | 3,608,288 |
Gain on extinguishment of derivative liability | (50,314) | (236,158) |
Loss (gain) on settlement of notes payable and accounts payable, related party | (12,237) | $ 739,572 |
Loss on extinguishment of debt | 1,257,468 | |
Amortization of discount on convertible notes | 1,942,885 | $ 411,675 |
Fair value of share based compensation | 650,351 | |
Costs of Private placement costs | $ 780,290 | |
Fair value of shares issued for directors fees to related parties | $ 250,000 | |
Fair value of shares issued for services | $ 170,000 | 473,581 |
(Increase) Decrease in: | ||
Cash held in trust account | 175,000 | |
Accounts receivable | $ 193,593 | (193,186) |
Inventory | (291,746) | 104,283 |
Prepaid expenses and other assets | 103,751 | (84,989) |
Increase (Decrease) in: | ||
Accounts payable | (176,538) | 1,484,769 |
Due to related parties | 153,978 | (179,553) |
Payroll and taxes payable | (63,372) | 562,800 |
Accrued interest | 288,657 | 89,335 |
Customer deposits | 1,702,656 | $ (748,947) |
Deferred vendor consideration | 275,000 | |
Other liabilities | $ (36,153) | $ (218,660) |
Accounts to be settled by issuance of equity securities | 470,535 | |
Net cash used in operating activities | $ (2,549,895) | (4,316,576) |
Cash flows from investing activities | ||
Purchases of property and equipment | (227,277) | (303,666) |
Net cash used in investing activities | (227,277) | (303,666) |
Cash flows from financing activities | ||
Proceeds from senior secured notes payable | 401,184 | 3,000,000 |
Proceeds from unsecured convertible notes | 638,225 | 250,000 |
Proceeds from unsecured convertible notes - related parties | 250,000 | 2,000,000 |
Proceeds from notes payable - related parties | 195,000 | $ 575,000 |
Proceeds from issuance of notes payable | $ 100,000 | |
Principal payments on notes payable - related parties | $ (703,245) | |
Principal payments on notes payable | $ (349,043) | (318,558) |
Proceeds from issuance of Common Stock | 185,000 | 1,312,500 |
Net cash provided by financing activities | 1,420,366 | 6,115,697 |
Net (decrease) increase in cash | (1,356,806) | 1,495,455 |
Cash at beginning of period | 1,499,889 | 4,434 |
Cash at end of period | 143,083 | 1,499,889 |
Supplemental schedule of non-cash financing activities: | ||
Derivative liability related to conversion feature | 1,306,455 | $ 1,660,056 |
Fair value of derivative liability extinguished upon modification | 3,908,950 | |
Issuance of Common Stock on conversion of secured convertible Notes Payable and accrued interest | 932,923 | $ 416,485 |
Issuance of Common Stock on conversion of unsecured convertible Notes payable and accrued interest | 582,691 | 24,697 |
Issuance of Common Stock as principal on Notes Payable to related parties | 22,803 | |
Beneficial conversion feature associated with convertible debt financing | 2,250,000 | |
Issuance of Common Stock as settlement of accounts payable | 223,678 | $ 103,241 |
Fair value of beneficial conversion feature recorded as note discount | 327,483 | |
Amounts payable settled through the issuance of equity securities | 470,534 | |
Cash paid during the year for | ||
Interest | $ 34,114 | $ 36,412 |
Income taxes |
Nature of the Business and Sign
Nature of the Business and Significant Accounting Policies | 12 Months Ended |
Mar. 31, 2015 | |
Accounting Policies [Abstract] | |
Nature of the Business and Significant Accounting Policies | NOTE 1 NATURE OF THE BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES Description of the Company Saleen Automotive, Inc. (formerly W270, Inc.) (the Company) was incorporated under the laws of the State of Nevada on June 24, 2011. The Company designs, develops, manufactures and sells high performance vehicles built from base chassis of Ford Mustangs, Chevrolet Camaros, Dodge Challengers and Tesla Model S vehicles. The Company is a low volume vehicle design, engineering and manufacturing company focusing on the mass customization (the process of customizing automobiles that are mass produced by the manufacturers (Ford, Chevrolet, Dodge and Tesla) of OEM American sports and electric vehicles. A high performance car is an automobile that is designed and constructed specifically for speed and performance. The design and construction of a high performance car involves not only providing a capable power train but also providing the handling, aerodynamics and braking systems to support it. The Companys Saleen-branded products include a complete line of upgraded high performance vehicles, automotive aftermarket specialty parts and lifestyle accessories. Merger On May 23, 2013, the Company entered into an Agreement and Plan of Merger (Merger Agreement) with Saleen California Merger Corporation, its wholly-owned subsidiary, Saleen Florida Merger Corporation, its wholly-owned subsidiary, Saleen Automotive, Inc. (Saleen Automotive), SMS Signature Cars (SMS and together with Saleen Automotive, the Saleen Entities) and Steve Saleen (Saleen and together with the Saleen Entities, the Saleen Parties). The closing (the Closing) of the transactions contemplated by the Merger Agreement (the Merger) occurred on June 26, 2013. At the Closing (a) Saleen California Merger Corporation was merged with and into SMS with SMS surviving as one of the Companys wholly-owned subsidiaries; (b) Saleen Florida Merger Corporation was merged with and into Saleen Automotive with Saleen Automotive surviving as one of the Companys wholly-owned subsidiaries; (c) holders of the outstanding capital stock of Saleen Automotive received an aggregate of 554,057 shares of the Companys Super Voting Preferred Stock, which was subsequently converted into 69,257,125 shares of the Companys Common Stock and holders of the outstanding capital stock of SMS received no consideration for their shares; and (d) approximately 93% of the beneficial ownership of the Companys Common Stock (on a fully-diluted basis) was owned, collectively, by Saleen (including 341,943 shares of the Companys Super Voting Preferred Stock, which was subsequently converted into 42,742,875 shares of the Companys Common Stock, issued to Saleen pursuant to the Assignment and License Agreement) and the former holders of the outstanding capital stock of Saleen Automotive. As a result of the Merger the Company is solely engaged in the Saleen Entities business, Saleen Automotives then officers became the Companys officers and Saleen Automotives then three directors became members of the Companys five-member board of directors. On June 17, 2013, the Company consummated a merger with WSTY Subsidiary Corporation, its wholly-owned subsidiary, pursuant to which the Company amended its articles of incorporation to change its name to Saleen Automotive, Inc. In October 2013, SMS effected an amendment to its articles of incorporation to change its name to Saleen Signature Cars. In January 2014, the Company effected an increase in the number of its common shares authorized to 500,000,000 and all the remaining shares of Super Voting Preferred Stock were converted into Common Stock of the Company and the Super Voting Preferred Stock ceased to be a designated series of the Companys preferred stock. As the owners and management of Saleen Automotive had voting and operating control of the Company after the Merger, the transaction was accounted for as a recapitalization with the Saleen Entities deemed the acquiring companies for accounting purposes, and the Company deemed the legal acquirer. Due to the change in control, the consolidated financial statements reflect the historical results of the Saleen Entities prior to the Merger and that of the consolidated company following the Merger. Common Stock and the corresponding capital amounts of the Company pre-Merger have been retroactively restated as of the earliest periods presented as capital stock reflecting the exchange ratio in the Merger. The amount of debt assumed upon the Merger of $39,547, legal and closing costs of $46,000, and a dividend of an aggregate amount of $280,000 paid to our stockholders as of May 23, 2013 have been reflected as a cost of the reverse merger transaction in the accompanying Statement of Operations for the year ended March 31, 2014. Consolidation Policy The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Saleen Automotive, Inc., a Florida corporation, Saleen Signature Cars, a California corporation and Saleen Sales Corporation, a California corporation. Intercompany transactions and balances have been eliminated in consolidation. Reclassification of Certain Prior Year Information The Company has reclassified certain prior year amounts to conform to the current year presentation. This included reclassification of promotional trade discount expenses of $172,661 for the twelve month period ended March 31, 2014 to revenue from sales and marketing expenses. The Company has also reclassified $23,580 of accounts payable owed to Molly Saleen Inc. as of March 31, 2014 from Accounts Payable to Due to Related Parties and has reclassified $139,300 of taxes payable as of March 31, 2014 from Other current liabilities to Payroll and other taxes payable. The reclassification of these amounts had no impact on consolidated net loss or cash flows. Going Concern The Companys consolidated financial statements have been presented on the basis that it is a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. During the year ended March 31, 2015, the Company incurred an operating loss of $5,321,929 and utilized $2,549,895 of cash in operations. The Company also had a stockholders deficit and working capital deficit of $9,669,225 and $7,050,644, respectively, as of March 31, 2015, and as of that date, the Company owed $745,503 in past unpaid payroll and other taxes; $933,271 of outstanding notes payable were in default; $1,204,840 of accounts payable was greater than 90 days past due; and $288,900 is owed on past due rent. In addition, in May 2015, the Company received a complaint from a bank alleging breach of the loan agreement and breach of a commercial guaranty by Steve Saleen and demanding full payment of principal, interest and fees of $369,302. A default under the loan agreement triggers a cross default under the Companys 3% Senior Secured Convertible Notes and 7% Convertible Notes (see Note 5) enabling the holders thereof to, at their election until the later of 30 days after such default is cured or otherwise resolved or the holder becomes aware of such cure or resolution, accelerate the maturity of the Companys indebtedness. In addition, the Company does not currently maintain workers compensation, product liability and other general insurance. These factors raise substantial doubt about the Companys ability to continue as a going concern. The accompanying financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern. The Companys ability to continue as a going concern is dependent upon its ability to raise additional capital and to ultimately achieve sustainable revenues and profit from operations. At March 31, 2015 and July 13, 2015 the Company had cash on hand in the amount of $143,083 and approximately $21,000, respectively, and is not generating sufficient funds to cover current production and operations. The Company has utilized funding to operate the business during the year ended March 31, 2015 with funds obtained from customer deposits received in advance of shipment of $1,702,656; received $500,000 in advance royalties from an Intellectual Property Agreement (Note 11) raised $1,289,409 through the issuance of convertible notes; received $295,000 through the issuance of notes payable of which $195,000 came from related parties; and obtained cash from sales of Common Stock through entering into Subscription Agreements with individual accredited investors (the Subscribers) pursuant to which the Subscribers purchased from the Company an aggregate of 1,183,334 restricted common shares at a per share price of $0.15 for aggregate proceeds of $177,500. The Company will need and is currently seeking additional funds, primarily through the issuance of debt or equity securities for production and to operate its business through and beyond the date of this Form 10-K filing. No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, it may contain undue restrictions and covenants on its operations, in the case of debt financing or cause substantial dilution for its stockholders in the case of convertible debt and equity financing. Use of Estimates Financial statements prepared in accordance with accounting principles generally accepted in the United States require management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Among other things, management estimates include the estimated collectability of its accounts receivable, the valuation of long lived assets, warranty reserves, the assumptions used to calculate derivative liabilities, and equity instruments issued for financing and compensation. Actual results could differ from those estimates. Fair Value of Financial Instruments The Company accounts for the fair value of financial instruments in accordance with the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) topic 820, Fair Value Measurements and Disclosures (ASC 820), formerly SFAS No. 157 Fair Value Measurements. ASC 820 defines fair value as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Authoritative guidance provided by the FASB defines the following levels directly related to the amount of subjectivity associated with the inputs to fair valuation of these financial assets: Level 1 Quoted prices in active markets for identical assets or liabilities. Level 2 Inputs, other than the quoted prices in active markets, that is observable either directly or indirectly. Level 3 Unobservable inputs based on the Companys assumptions. The Companys financial instruments consist principally of cash, accounts receivable, accounts payable, accrued liabilities, customer deposits, and notes payable. The carrying amounts of such financial instruments in the accompanying balance sheets approximate their fair values due to their relatively short-term nature. It is managements opinion that the Company is not exposed to any significant currency or credit risks arising from these financial instruments. As of March 31, 2015 and 2014, the Companys consolidated balance sheets included the fair value of derivative liabilities of $1,268,588 and $5,032,786, respectively, which was based on Level 2 measurements. There were no other investments or liabilities of the Company measured and recorded at fair value as of March 31, 2015 and 2014. Derivative Financial Instruments The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the consolidated statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. To determine the number of authorized but unissued shares available to satisfy outstanding convertible securities, the Company uses a sequencing method to prioritize its convertible securities as prescribed by ASC 815-40-35. At each reporting date, the Company reviews its convertible securities to determine their classification is appropriate. Allowance for Doubtful Accounts The Company evaluates the collectability of its trade accounts receivable based on a number of factors. In circumstances where the Company becomes aware of a specific customers inability to meet its financial obligations to the Company, a specific reserve for bad debts is estimated and recorded, which reduces the recognized receivable to the estimated amount the Company believes will ultimately be collected. In addition to specific customer identification of potential bad debts, bad debt charges are recorded based on the Companys historical losses and an overall assessment of past due trade accounts receivable outstanding. The Company recognizes an allowance for doubtful accounts to ensure trade receivables are not overstated due to uncollectability. For the most part, the Company generally requires advance payments for cars and credit card payments for parts. As of March 31, 2014 the Company had an allowance for doubtful accounts of $271,658. There was no such allowance at March 31, 2015. Inventories Inventories are stated at the lower of cost or market. Cost is determined principally on a first-in-first-out average cost basis. Inventories consist primarily of parts for both resale and conversion of automotive chassis. The Company will typically buy the automobile chassis of the vehicle to be converted from the Ford, Chevrolet and Dodge dealers and then modify the vehicle as ordered. The Company typically has no finished goods inventory, as the Company builds to order, other than parts held for resale. March 31, 2015 March 31, 2014 Parts and chassis $ 176,718 $ 183,941 Work in process 298,969 - S7 Supercar held for sale 250,000 250,000 Total inventories $ 725,687 $ 433,941 Long-lived Assets In accordance with ASC 350-30 (formerly SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets The Company had no such asset impairments at March 31, 2015 or March 31, 2014. There can be no assurance, however, that market conditions will not change or demand for the Companys products under development will continue. Either of these could result in future impairment of long-lived assets. Revenue Recognition Sales of High Performance Cars and Parts The Company generates revenues primarily from the sale of high performance automobiles and parts. The Company recognizes revenue from the sale of completed high performance cars and parts when there is persuasive evidence that an arrangement exists, delivery of the product has occurred and title has passed, the selling price is both fixed and determinable, and collectability is reasonably assured, all of which generally occurs upon shipment of the Companys product or delivery of the product to the destination specified by the customer. In cases where the Company is the primary obligor related to the purchase of base Ford Mustang, Chevrolet Camaro and Dodge Challenger vehicles, the Company recognizes revenue related to the cost of the chassis plus markup, if any. The Company determines whether delivery has occurred based on when title transfers and the risks and rewards of ownership have transferred to the buyer, which usually occurs when the Company places the cars or products on the carrier. The Company regularly reviews its customers financial positions to ensure that collectability is reasonably assured and generally collects before shipment. Except for warranties, the Company has no post-sales obligations nor does the Company accept returns. Contract Revenue and Cost Recognition on Design Services During the year ended March 31, 2014, the Company realized revenue from a contract with a major Hollywood movie producer of $121,500 for the design and replica production of supercar racing automobiles for the Need for Speed movie, which was released in March 2014. The Company did not have any design contracts during the year ended March 31, 2015. Customer Deposits The Companys sales orders generally require customers to put deposits on vehicles at the time of signing a sales order. Typically, the Company receives either partial or full deposits related to such sales orders in advance of shipment and is generally paid in full prior to shipment of customers orders. Customer deposits as of March 31, 2015 and 2014 comprised of funds received in advance of shipment and were $1,896,568 and $193,912, respectively, which will be recorded as revenue upon shipment of related customers orders and satisfaction of the revenue recognition requirements discussed above. Warranty Policy The Company provides a three-year or 36,000 miles New Vehicle Limited Warranty with every Saleen 302 Mustang, Saleen 570 Challenger, Saleen 620 Camaro high performance vehicle and Saleen GTX. The vehicle limited warranty applies to installed parts and/or assemblies in new Saleen high performance cars. All of the unaltered parts are covered under the original full warranty of the OEM manufacturer of the base vehicles (Ford, Chevrolet, and Dodge). Changes in the product warranty accrual for the fiscal years ended March 31, 2015 and 2014 were as follows: Balance at Beginning of Fiscal Year Warranty Expenditures Provision for Estimated Warranty Cost Balance at End of Fiscal Year Fiscal 2015 $ - $ (7,077 ) $ 27,077 $ 20,000 Fiscal 2014 $ - $ (16,763 ) $ 36,763 $ 20,000 Business Segments The Company currently has one operating business segment that is converting automobiles into high performance vehicles and selling related parts. Research and Development Costs Research and development costs consist of expenditures for the research and development of new products and technology and are expensed as incurred. Research and development costs were $747,833 and $766,996 during the years ended March 31, 2015 and 2014, respectively. Advertising, Sales and Marketing Costs Advertising, sales and marketing costs are expensed as incurred and are included in sales and marketing expenses. During the year ended March 31, 2015, advertising, sales and marketing expenses were $3,679, $126,185, and $472,969, respectively. During the year ended March 31, 2014, advertising, sales and marketing expenses were $59,993, $110,275, and $414,555, respectively. Income Taxes The Company accounts for income taxes under FASB Codification Topic 740-10-25 (ASC 740-10-25). Under ASC 740-10-25, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740-10-25, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company maintains a valuation allowance with respect to deferred tax assets. The Company established a valuation allowance based upon the potential likelihood of realizing the deferred tax asset and taking into consideration the Companys financial position and results of operations for the current period. Future realization of the deferred tax benefit depends on the existence of sufficient taxable income within the carry forward period under the Federal tax laws. Changes in circumstances, such as the Company generating taxable income, could cause a change in judgment about the realizability of the related deferred tax asset. Any change in the valuation allowance will be included in income in the year of the change in estimate. Stock Compensation The Company uses the fair value recognition provision of ASC 718, Stock Compensation, which requires the Company to expense the cost of employee services received in exchange for an award of equity instruments based on the grant date fair value of such instruments. The Company uses the Black-Scholes-Merton option pricing model to calculate the fair value of any equity instruments on the grant date. The Company also uses the provisions of ASC 505-50, Equity Based Payments to Non-Employees, Loss per Share The basic EPS is calculated by dividing the Companys net loss available to Common Stockholders by the weighted average number of common shares during the period. The diluted EPS is calculated by dividing the Companys net loss available to Common Stockholders by the diluted weighted average number of shares outstanding during the period. The diluted weighted average number of shares outstanding is the basic weighted average number of shares adjusted for any potentially dilutive debt or equity securities unless the effects thereof are anti-dilutive, that is inclusion of such shares would reduce the net loss or increase the net income. For the years ended March 31, 2015 and 2014, the basic and diluted shares outstanding were the same, as potentially dilutive shares were considered anti-dilutive. As of March 31, 2015, stock options and warrants exercisable for 13,459,000, and 13,313,099, shares of Common Stock, respectively, have been excluded from diluted loss per share because they are anti-dilutive. As of March 31, 2014, warrants exercisable for 11,252,245 shares of Common Stock, and Notes convertible into 66,632,617 shares of Common Stock have been excluded from diluted loss per share because they are anti-dilutive. Significant Concentrations Sales to one customer comprised 11% of revenues for the year ended March 31, 2015. No customers comprised revenues in excess of 10% during the year ended March 31, 2014 and no customers comprised accounts receivable in excess of 10% at March 31, 2015 and 2014. Concentrations of Credit Risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consisted primarily of cash, to the extent balances exceeded limits that were insured by the Federal Deposit Insurance Corporation and accounts receivable. The Company does not require collateral and maintains reserves for potential credit losses. Such losses have historically been immaterial and have been within managements expectations. Property and Equipment Property and equipment are stated at cost, net of accumulated depreciation and amortization. The cost of property and equipment is depreciated or amortized on the straight-line method over the following estimated useful lives: Computer equipment and software 3 years Furniture 3 years Machinery 3-10 years Tooling 10 years Leasehold improvements are amortized using the straight-line method over the shorter of the estimated useful life of the asset or the lease term. Recently Issued Accounting Standards On May 28, 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2014-09 (ASU 2014-09), Revenue from Contracts with Customers. ASU 2014-09 will eliminate transaction- and industry-specific revenue recognition guidance under current U.S. GAAP and replace it with a principle based approach for determining revenue recognition. ASU 2014-09 will require that companies recognize revenue based on the value of transferred goods or services as they occur in the contract. The ASU also will require additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. We will apply the new revenue recognition standard in annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Earlier application would be permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. Management is currently evaluating the impact, if any, on adopting ASU 2014-09 on the Companys results of operations or financial condition. In April 2014, the FASB issued Accounting Standards Update No. 2014-08 (ASU 2014-08), Presentation of Financial Statements (Topic 205) and Property, Plant and Equipment (Topic 360). ASU 2014-08 amends the requirements for reporting discontinued operations and requires additional disclosures about discontinued operations. Under the new guidance, only disposals representing a strategic shift in operations or that have a major effect on the Companys operations and financial results should be presented as discontinued operations. This new accounting guidance is effective for annual periods beginning after December 15, 2014. Management is currently evaluating the impact, if any, of adopting ASU 2014-08 on the Companys results of operations or financial condition. In November 2014, the FASB issued Accounting Standards Update No. 2014-16 (ASU 2014-16), Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity. The amendments in this ASU do not change the current criteria in U.S. GAAP for determining when separation of certain embedded derivative features in a hybrid financial instrument is required. The amendments clarify that an entity should consider all relevant terms and features, including the embedded derivative feature being evaluated for bifurcation, in evaluating the nature of the host contract. The ASU applies to all entities that are issuers of, or investors in, hybrid financial instruments that are issued in the form of a share and is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted. Management is currently evaluating the impact, if any, of adopting ASU 2014-16 on the Companys results of operations or financial condition. In January 2015, the FASB issued ASU No. 2015-01, Income StatementExtraordinary and Unusual Items (Subtopic 225-20), as part of its initiative to reduce complexity in accounting standards. ASU No. 2015-01 eliminates from generally accepted accounting principles the concept of extraordinary items. ASU No. 2015-01 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015, with earlier adoption permitted. A reporting entity may apply the provisions of ASU No. 2015-01 prospectively or retrospectively to all prior periods presented in the financial statements. The Company does not expect the adoption of ASU No. 2015-01 to have a material effect on it results of operations or financial condition. Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Companys present or future consolidated financial statements. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Mar. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | NOTE 2 PROPERTY AND EQUIPMENT Property and equipment consisted of the following at March 31, 2015 and March 31, 2014: March 31, 2015 March 31, 2014 Tooling $ 641,324 $ 470,399 Equipment 321,189 264,837 Leasehold improvements 203,310 203,312 Total, cost 1,165,823 938,548 Accumulated depreciation and amortization (573,707 ) (391,724 ) Total Property and Equipment $ 592,116 $ 546,824 Depreciation and amortization expense for the years ended March 31, 2015 and 2014 was $181,983 and $97,061, respectively. |
Notes Payable
Notes Payable | 12 Months Ended |
Mar. 31, 2015 | |
Debt Disclosure [Abstract] | |
Notes Payable | NOTE 3 NOTES PAYABLE Notes payable are comprised as follows: March 31, 2015 March 31, 2014 Senior secured note payable to a bank, secured by all assets of Saleen Signature Cars, guaranteed by the U.S. Small Business Administration and personally guaranteed by the Companys CEO, payable in full in March 2015 (1) $ 358,704 $ 442,479 Subordinated secured bonds payable, interest at 6% per annum payable at various maturity dates, currently in default (2) 97,000 97,000 Subordinated secured note payable, interest at 6% per annum, payable March 16, 2010, currently in default (3) 61,046 61,046 Subordinated secured note payable for legal services rendered, non-interest bearing, payable on October 25, 2013, in default at March 31, 2014 (4) - 37,749 Note and bond payable (5) - 517,500 Unsecured notes payable, interest at 10% per annum payable on various dates from July 31 to March 31, 2010, currently in default (6) 55,000 120,000 Promissory note, interest at 6%, secured by a vehicle (7) 100,000 - Total notes payable $ 671,750 $ 1,275,774 (1) On February 6, 2014, Saleen Signature Cars received a Complaint from the bank filed in California Superior Court, Riverside County alleging, among other matters, breach of contract due to non-timely payment of November and December 2013 principal amounts owed, which were paid as of March 31, 2014, and the occurrence of a change in control as a result of the Merger. The bank sought full payment of principal and interest owed. In April 2014, the Company entered into a settlement arrangement with the bank whereby the bank dismissed this case in exchange for payment of $124,000 that was applied towards principal and unpaid fees along with advance loan principal and interest through July 2014. From August 2014 to March 31, 2015, in exchange for payments totaling $90,000, the bank agreed to extend this arrangement through various dates with the last date being March 2015. The bank has not agreed to an additional extension in conjunction with the banks claim of default. On April 29, 2015, the bank filed a claim against the Company alleging breach of the loan agreement, breach of a commercial guaranty by Steve Saleen, Chairman and CEO, and the bank demanded full payment of principal and interest outstanding (see Note 10). (2) Bonds and notes issued on March 1, 2008, 2009 and 2010, payable in full upon one year from issuance. The Bonds accrue interest at 6% per annum and are secured by the personal property of Saleen Signature Cars. As of March 31, 2015 and 2014, respectively, the Bonds were in default due to non-payment. (3) Note payable issued on March 16, 2010 due in full on March 16, 2011. The note accrued interest at 10% per annum and was secured by three vehicles held in inventory by Saleen Signature Cars. On June 7, 2013, the Company entered into a Settlement Agreement and Mutual General Release by canceling this note and issuing a new unsecured 6% note payable due on or before August 19, 2013. The note was in default as of March 31, 2015 and 2014 due to non-payment. (4) Non-interest bearing note payable dated January 25, 2013 due in full on October 25, 2013 or earlier upon the occurrence of certain events. The note is secured by certain intellectual property of the Company. The note was in default as of March 31, 2014 due to non-payment. In February 2015, the Company entered into a Settlement Agreement and Mutual General Release with this note holder whereby the Company agreed to issue 2,272,727 shares of its Common Stock at a price of $0.022 per share, or $50,000, in exchange for cancellation of all amounts owed and a mutual general release. The Company recognized a loss on settlement of $7,235 that is reflected in the Statement of Operations during the year ended March 31, 2015 to account for the difference between the fair value of the common shares issued and the amount recorded owed as of the date of settlement. (5) As of March 31, 2014, the Company was indebted on a $317,500 subordinated 6% bond and a $200,000 10% note payable. On May 7, 2014, the Company, along with its subsidiaries and Steve Saleen, Chairman and CEO, entered into a Settlement Agreement and Mutual Release (the Settlement Agreement) with Thomas Del Franco and Jason B. Cruz (the Del Franco Parties), pursuant to which the Del Franco Parties agreed to fully and finally settle a claim filed against the Company for outstanding Bond and note payables to Thomas Del Franco, which consisted of a Bond and note payable of $317,500 and $200,000, respectively, and unpaid interest of $187,535 in exchange for (1) the Companys payment to Mr. Del Franco of $250,000 (the Settlement Payment) and (2) issuance of 2,250,000 shares of the Companys Common Stock (the Settlement Shares and together with the Settlement Payment, the Settlement Amount). The Settlement Shares had a value of $382,500 based on the closing price of the Companys Common Stock on May 7, 2014 of $0.17/share. The parties to the Settlement Agreement also agreed to release each other from all claims arising from their prior business dealings. The Del Franco Parties have agreed to a contractual restriction on the sale of the Settlement Shares whereby for a period of 12 months from and after the expiration of any applicable restricted periods imposed by applicable federal and state securities laws and regulations, including Rule 144 under the Securities Act of 1933, as amended (the Securities Act), the Del Franco Parties will not offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, more than 200,000 of the Settlement Shares in any given calendar month. The Company recognized a gain on settlement of $72,265 in the Statement of Operations during the year ended March 31, 2015 to account for the difference between the fair value of the common shares issued and the amount recorded as of the date of settlement. (6) As of March 31, 2014, the Company had outstanding $100,000 and $20,000 unsecured 10% notes payable. In June 2014, the Company entered into a Settlement Agreement and Mutual Release agreement with Jim Marsh American Corporation (Marsh) for one of the notes that had an outstanding principal and interest of $100,000 and $53,374, respectively, in exchange for (1) issuance of 800,000 shares of its Common Stock and (2) cash payment of $35,000. The Company issued the common shares in June 2014 and determined the value to be $112,000, which was based on the value of the Common Stock of $0.14 as of the date of settlement. The remaining cash payment of $35,000 was unpaid and was included in notes payable as of March 31, 2015. In addition, another separate note for $20,000 remains outstanding as of March 31, 2015 and is in default due to non-payment. (7) Note payable issued on March 25, 2015 bearing interest at a rate of 6% per annum. The note was secured by a vehicle provided to the borrower by the Company and was due on demand after 60 days following the date the secured vehicle was returned to the Company. In May 2015, the borrower agreed to cancel this note and convert the then principal and interest outstanding into a convertible note under the same terms as the 3% Senior secured convertible notes discussed in Note 5. In June 2015, the Company entered into an intellectual property agreement with the note holder. In connection with this agreement, the note was cancelled. See Note 11 for further discussion. |
Notes Payable to Related Partie
Notes Payable to Related Parties | 12 Months Ended |
Mar. 31, 2015 | |
Debt Disclosure [Abstract] | |
Notes Payable to Related Parties | NOTE 4 NOTES PAYABLE TO RELATED PARTIES Notes payable to related parties are as follows: March 31, 2015 March 31, 2014 Unsecured note payable to a stockholder, due on April 1, 2014, currently in default. $ 102,000 $ 102,000 Unsecured note payable to a stockholder, interest at 10% per annum payable at various maturity dates, settled in April 2014. (1) 32,452 Unsecured payable to a stockholder at 10% per annum, payable on demand 165,000 Unsecured $100,000 revolving promissory note to a stockholder, interest at 10% per annum payable in full in November 2014. (2) 75,000 Total notes payable, related parties $ 267,000 $ 209,452 (1) Unsecured note payable to a related party issued on November 3, 2008 for original principal of $60,000 bearing interest at 10% per annum and due in full on February 10, 2009. In April 2014, the Company entered into a Settlement Agreement and Mutual General Release with this note holder whereby it issued 172,060 shares of its Common Stock with a fair value of $38,191 as settlement of the note payable of $32,452 and unpaid interest of $1,960. In addition, the Company also granted the note holder 355,460 shares of common stock with a fair value of along with a five-year warrant to purchase 527,520 shares of its Common Stock at an exercise price of $0.15 per share. The loss on the settlement of this note of $153,754 was provided for and accrued for as of March 31, 2014 as part of Accounts to be settled by issuance of equity securities in the accompanying balance sheet. (2) In January 2015, the note holder and the Company agreed to cancel this revolver and role the then principal and interest outstanding of $98,708 into a convertible note under the same terms as the 3% Senior secured convertible notes discussed in Note 5. |
Convertble Notes Payable
Convertble Notes Payable | 12 Months Ended |
Mar. 31, 2015 | |
Debt Disclosure [Abstract] | |
Convertible Notes Payable | NOTE 5 CONVERTIBLE NOTES PAYABLE Convertible notes are comprised as follows: March 31, 2015 March 31, 2014 3% Senior secured convertible notes payable to a private accredited investor group, convertible at $0.075 per share, subject to adjustment, $2,001,720 due in June 2017 and $499,892 due in January 2019. $ 2,501,612 $ 2,586,732 7% Unsecured convertible notes payable to private accredited investor group, convertible into 82,484,267 shares of Common Stock (including accrued interest) as of March 31, 2015, interest accrued at 7% per annum, notes mature in March 2017 2,200,000 2,250,000 Unsecured convertible notes payable to eight separate private accredited investors, convertible into 35,782,732 shares of Common Stock (including accrued interest) as of March 31, 2015, interest accrued at 8% to 12% per annum, notes mature on various dates from April 2015 to December 2016, in default 618,225 5,319,837 4,836,732 Less: discount on notes payable (1,836,828 ) (3,498,981 ) Notes payable, net of discount 3,483,009 1,337,751 Less: notes payable, current (267,332 ) Notes payable, long-term $ 3,215,677 $ 1,337,751 3% Senior secured convertible notes On June 26, 2013, pursuant to a Securities Purchase Agreement, as amended, the Company issued senior secured convertible notes, as amended, having a total principal amount of $3,000,000, to 12 accredited investors (2013 Notes). The 3% Notes pay 3.0% interest per annum with a maturity of 4 years from the date of issuance (June 2017 and January 2019) and are secured by all assets and intellectual property of the Company. No cash interest payments will be required, except that accrued and unconverted interest shall be due on the maturity date and on each conversion date with respect to the principal amount being converted, provided that such interest may be added to and included with the principal amount being converted. Each 3% Note is convertible at any time into Common Stock at a specified conversion price, which initially was $0.075 per share. Prior to June 2014, the 2013 Note conversion price was subject to specified adjustments for certain changes in the numbers of outstanding shares of the Companys Common Stock, including conversions or exchanges of such and the agreements included an anti-dilution provisions that allows for the automatic reset of the conversion or exercise price upon any future sale of Common Stock instruments at or below the current exercise price. If the Companys shares are issued, except in specified exempt issuances, for consideration which is less than the then existing 2013 Note conversion price, then such conversion price would be reduced by full ratchet anti-dilution adjustments that would reduce the conversion price to equal the price in the dilutive issuance, regardless of the size of the dilutive issuance. Pursuant to FASB guidance on Determining Whether an Instrument Indexed to an Entitys Own Stock which indicates that any adjustment to the fixed amount (either conversion price or number of shares) of the instrument regardless of the probability or whether or not within the issuers control, means the instrument is not indexed to the issuers own stock, the Company determined that the conversion prices of the 2013 Notes were not a fixed amount because they were subject to fluctuation based on the occurrence of future offerings or events. As a result, the Company determined that the conversion features were not considered indexed to the Companys own stock and characterized the fair value of these conversion features as derivative liabilities upon issuance. See Note 6 for further discussion. In June 2014, the Company entered into a First Amendment to Saleen Automotive, Inc. 3.0% Secured Convertible Note (3% First Amendment) and removed all specified adjustments to the conversion price except for standard anti-dilution provisions whereby if the Company consummates a reorganization transaction pays dividends or enters into a stock split of its common shares the conversion price would adjust proportionally. In addition, if a Fundamental Transaction, as defined in the 2013 Note agreement, were to occur the potential liquidated damage was set to a fixed amount. As an inducement for the amendment, the Company issued an aggregate of 389,923 shares of Common Stock with a fair value of $58,488. The Company recorded $58,488 as private placement costs determined based on the market value of the Companys Common Stock of $0.15 as of the date of issuance. The Company determined that the amendment of the Saleen Automotive, Inc. 3.0% Secured Convertible Note resulted in a modification for accounting purposes, and as such, the derivative liability recorded when the note was originally issued was deemed extinguished (see Note 6). On January 23, 2015, the Company entered into a Second Amendment to 3% Senior Secured Convertible Notes whereby the conversion price of the 2013 Notes was amended to be the lesser of (a) $0.075 and (b) 70% of the average of the three lowest VWAPs occurring during the twenty consecutive trading days immediately preceding the applicable conversion date on which the note holders elects to convert all or part of the note. However, in no event shall the conversion price be less than $0.02. As a result of this amendment, the Company considered this to be an extinguishment of debt for accounting purposes, and recognized a loss on the extinguishment of $1,257,468, which comprised of $684,975 of expensing the remaining debt discount and $572,493 related to the beneficial conversion feature that resulted from the incremental change in the potential shares of common stock to be issued and the conversion price. On January 26, 2015 the Company entered into two additional 3% Senior Secured Convertible Notes in the principal amount of $499,892 with two accredited investors who participated in the June 26, 2013 offering (2015 Notes and collectively 3% Notes) of which $98,708 was converted from note payable previously entered into with one investor in November 2013. The Company determined that the initial conversion price reflected a price discount below the fair market value of the Companys Common Stock as of the issuance date of the 2015 Notes. As such, the Company determined that there was deemed a beneficial conversion feature of $77,483 at the issuance date of the 2015 Notes and recorded such amount as valuation discount and as additional paid-in capital. The value of the beneficial conversion feature is being amortized as additional interest expense over the term of the 2015 Notes. In May 2015, the Company received a complaint from a bank alleging breach of the loan agreement and breach of a commercial guaranty by Steve Saleen and demanded full payment of principal, interest and fees of $369,302 (see Note 3). A default under the loan agreement triggers a cross default under the 2013 Notes and 2015 Notes enabling the holders thereof to, at their election until the later of 30 days after such default is cured or otherwise resolved or the holder becomes aware of such cure or resolution, accelerate the maturity of the indebtedness under the 3% Notes requiring the Company to pay, upon such acceleration, the sum of (1) 120% of the outstanding principal plus (2) 100% of all accrued and unpaid interest plus (3) all other amounts due under the 3% Notes. Upon the occurrence of an event of default under the 3% Notes interest accrues at the rate of 12% per annum. During the years ended March 31, 2015 and 2014, the Company amortized $517,524 and $411,675, respectively, of the valuation discount, and the remaining unamortized valuation discount of $74,021 and $1,248,984 as of March 31, 2015 and 2014, respectively, has been offset against the face amount of the notes for financial statement purposes. During the year ended March 31, 2015, certain note holders converted $585,012 of principal and $11,942 of interest into 8,032,186 shares the Common Stock. As of March 31, 2015, the principal balance of the convertible Notes outstanding was $2,501,612. 7% Unsecured convertible notes In March and April 2014, as amended in June 2014, the Company issued 7% Unsecured Convertible Notes (the 7% Notes), having a total principal amount of $2,250,000 and $250,000, respectively, to 5 accredited investors of which $2,000,000 was received from 3 investors who participated in the June 26, 2013 offering above. The 7% Notes pay interest at 7% per annum with a maturity of 3 years (March and April, 2017). No cash payments are required, except that unconverted outstanding principal and accrued interest shall be due and payable on the maturity date. Each 7% Note is initially convertible at any time into the Companys Common Stock at a conversion price, which is adjustable to the lower of $0.07 or the three lowest daily volume weighted average prices of the Companys Common Stock during the twenty consecutive trading days immediately preceding any conversion date. However, in no event shall the conversion price be lower than $0.03 per share. In addition, the conversion price adjusts for standard anti-dilution provisions whereby if the Company consummates a reorganization transaction, pays dividends or enters into a stock split of its common shares the conversion price would adjust proportionally. In June 2014, the Company entered into a First Amendment to Saleen Automotive, Inc. 7% Convertible Note whereby effective as of March 31, 2014 or the applicable issuance date for notes issued thereafter, the conversion price would in no event adjust below $0.03 per share. In addition, if a Fundamental Transaction, as defined, were to occur the potential liquidated damages was set to a fixed amount. As an inducement, the Company issued an aggregate of 357,143 shares of its Common Stock with a fair value of $53,571 based on the market value of the Companys Common Stock of $0.15 as of the date of issuance and was recorded as part of private placement costs in the accompanying Statement of Operations. As the initial conversion price of $0.07 reflected a price discount below the fair market value of the Companys Common Stock as of the issuance date of the 7% Notes, the Company determined that there was deemed a beneficial conversion feature associated with these 7% Notes. As such, the Company recorded $2,250,000 and $250,000 in March 2014 and April 2014, respectively, representing the intrinsic value of the beneficial conversion feature at the issuance date of the 7% Notes in additional paid-in capital. The value of the beneficial conversion feature is being amortized as additional interest expense over the term of the 7% Notes, which totaled $1,050,700 for the year ended March 31, 2015. As of March 31, 2015 and 2014, the remaining unamortized valuation discount of $1,449,300 and $2,250,000, respectively, has been offset against the face amount of the notes for financial statement purposes. In May 2015, the Company received a complaint from a bank alleging breach of the loan agreement and breach of a commercial guaranty by Steve Saleen and demanded full payment of principal, interest and fees of $369,302 (see Note 3). If the bank is successful in their claim of default, such default would trigger a cross default under the 7.0% Notes enabling the holders thereof to, at their election, accelerate the maturity of the outstanding indebtedness under the 7% Notes requiring the Company to pay, upon such acceleration, the greater of (1) 120% of the outstanding principal (plus all accrued and unpaid interest) and (2) the product of (a) the highest closing price for the five trading immediately preceding the holders acceleration and (b) a fraction, of which the numerator is the entire outstanding principal, and of which the denominator is the then applicable conversion price. Upon the occurrence of an event of default under the 7% Notes interest accrues at the rate of 24% per annum. During the year ended March 31, 2015, one note holder converted $300,000 of principal and $15,808 of accrued interest into 10,000,000 shares of the Companys Common Stock. As of March 31, 2015, the principal balance of the convertible Notes outstanding was $2,200,000. Unsecured convertible notes From September 2014 to December 2014, the Company issued Convertible Promissory Notes (Notes) in the aggregate principal amount of $638,225 to eight separate accredited investors. The Notes bear interest ranging from 8% to 12% per annum and mature on various dates from April 2015 to December 2016. The Company is currently in default of payment for a Note that matured in April 2015 in the principal amount outstanding of $10,600. The Company may not prepay the Notes without the Note holders consent. Further, the Notes contain provisions that under certain events of default, as defined in the agreements, the amount owed could increase by amounts ranging from 135% to 150% depending on the event of default. In addition, in the event of non-payment when due, the interest rates would increase to between 20% and 25% per annum from the date due until paid. The Notes are convertible into shares of Common Stock of the Company at the option of the holder commencing on various dates following the issuance date of the Notes and ending on the later of the maturity date or date of full payment of principal and interest. The principal amount of the Notes along with, at the holders option, any unpaid interest and penalties, are convertible at price per share discounts ranging from 42% to 38% of the Companys Common Stock trading market price during a certain time period, as defined in the agreement. Further, the conversion prices are subject to a floor such that the conversion prices will not be less than a certain price, as defined in the agreement, with such floor prices ranging from $0.001 to $0.00005 per share. In addition, the conversion prices are subject to adjustment in certain events, such as in conjunction with any sale, conveyance or disposition of all or substantially all of the Companys assets or consummation of a transaction or series of related transactions in which the Company is not the surviving entity. The note agreements also require the Company to maintain a reserve of Common Stock, as determined based on a formula stated in the note agreements, which, upon request by the note holder, can be adjusted based on the formula and the then share price of the Companys Common Stock as of the date of request. The note holder can convert up to the number of the then shares reserved for conversion of their related note. As of March 31, 2015, the Company was in compliance with the Common Stock reserve provisions; however, as of the date of this filing, the Company is in default of such reserve requirements due to insufficient availability of authorized shares to fulfill the note holders reserve requests. The Company considered the current FASB guidance of Contracts in Entitys Own Stock which indicates that any adjustment to the fixed amount (either conversion price or number of shares) of the instrument regardless of the probability of whether or not within the issuers control means the instrument is not indexed to the issuers own stock. Accordingly, the Company determined that the conversion prices of the Notes were not a fixed amount because they were subject to an adjustment based on the occurrence of future offerings or events. In addition, the Company determined that instruments with floor prices ranging from $0.001 to $0.00001 were de minimis and in substance not indexed to the Companys own stock. As a result, the Company determined that the conversion features of the Notes were not considered indexed to the Companys own stock and characterized the fair value of the conversion features as derivative liabilities upon issuance. The Company determined that upon issuance of the Notes, the initial fair value of the embedded conversion feature was $1,306,455. As such, the Company recorded a $1,306,455 derivative liability, of which $638,225 was recorded as debt discount offsetting the fair value of the Notes and the remainder of $668,230 recorded as private placement costs in the Consolidated Statement of Operations for the year ended March 31, 2015. As of March 31, 2015, the Company amortized $374,661 of the valuation discount, and the remaining unamortized valuation discount of $313,507 as of March 31, 2015 has been offset against the face amount of the Notes for financial statement purposes. The remainder of the valuation discount will be amortized as interest expense over the remaining term of the Notes. The derivative liability is re-measured at the end of every reporting period with the change in value reported in the statement of operations (see Note 6). During the year ended March 31, 2015, one Note holder converted $20,000 of principal and $161 of accrued interest into 1,785,714 shares of the Companys Common Stock. As of March 31, 2015, the principal balance of the convertible Notes outstanding was $618,225. The aggregate future obligations under the Convertible Notes Payable herein and notes payable described in Notes 3 and 4 are as follows: Year Ending March 31, Amount 2016 $ 1,556,974 2017 4,201,720 2018 - 2019 499,893 2020 $ 6,258,587 |
Derivative Liability
Derivative Liability | 12 Months Ended |
Mar. 31, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Liability | NOTE 6 DERIVATIVE LIABILITY Pursuant to FASB authoritative guidance on determining whether an instrument (or embedded feature) is indexed to an entitys own stock, instruments, which do not have fixed settlement provisions, are deemed to be derivative instruments. The conversion feature of the Companys senior secured convertible notes and unsecured convertible notes (described in Note 5 above), did not have fixed settlement provisions because their conversion prices could be lowered if the Company issues securities at lower prices in the future or the ultimate determination of shares to be issued could exceed current available authorized shares. In accordance with the FASB authoritative guidance, the conversion feature of the notes was separated from the host contract (i.e., the notes) and recognized as a derivative instrument. The conversion feature of the notes had been characterized as a derivative liability and was re-measured at the end of every reporting period with the change in value reported in the statement of operations. The derivative liabilities were valued at the following dates using a probability weighted-average Black-Scholes-Merton model with the following assumptions: March 31, 2015 September to December, 2014 (Dates of Inception) June 17, 2014 (Note Amendment and Restatement Date) March 31, 2014 Conversion feature: Risk-free interest rate 0.04 1.33 % 0.02 % 0.02 % 0.05 % Expected volatility 179 % 124 139 % 106 % 100 % Expected life (in years) .2 1.6 years .75 to 2.0 years 3 years .25 years Expected dividend yield Fair Value: Conversion feature $ 1,268,588 $ 1,306,455 $ 3,908,950 $ 5,032,786 The risk-free interest rate was based on rates established by the Federal Reserve Bank. The Company used its own stocks volatility as the estimated volatility. The expected life of the conversion feature of the notes was based on the remaining terms of the notes. The expected dividend yield was based on the fact that the Company has not customarily paid dividends to its holders of Common Stock in the past and does not expect to pay dividends to holders of its Common Stock in the future. In June 2014, pursuant to the First Amendment to Saleen Automotive, Inc. 3.0% Secured Convertible Note as discussed in Note 5, the Company determined the conversion features of the note was no longer required to be accounted for as a derivative liability due to the elimination of the price-based anti-dilution provisions contained in the note. As a result, the Company recognized the fair value of the derivative liability at the date of extinguishment of $3,908,950 an addition to contributed paid in capital. From September 2014 to December 2014, in conjunction with the issuance of the Companys Unsecured Convertible Note as discussed in Note 5, the Company recognized derivative liability of $1,306,455. During the year ended March 31, 2015, the Company recognized a gain of $1,111,389 to account for the change in fair value of the derivative liability and gain of $50,314 due to extinguishment of the derivative liability upon conversion of a note to equity. At March 31, 2015, the fair value of the derivative liability amounted to $1,268,588. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Mar. 31, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 7 RELATED PARTY TRANSACTIONS The amounts of accounts payable to related parties as of March 31, 2015 and 2014 are as follows: Related Party: March 31, 2015 March 31, 2014 Steve Saleen (a) $ 223,455 $ 100,000 Michaels Law Group (b) 23,954 Top Hat Capital (c) 62,500 25,000 Crystal Research (d) 6,343 Molly Saleen, Inc. (e) 34,214 23,580 $ 326,512 $ 172,534 (a) During the year ended March 31, 2015, the Company incurred $125,654 in officers salary expense that is due and payable to its Director, Chairman and CEO, Mr. Steve Saleen. As of March 31, 2015 and 2014 the Company owed $223,455 and $100,000, respectively, to Mr. Saleen for his unpaid officers salary. In March 2014, Mr. Saleen agreed to forgive $353,787 of amounts owed for loans given by Mr. Saleen to the Company and unpaid salary, which the Company recognized as a gain and offset to settlement expenses in the Statement of Operations. In June 2015, the Company issued 220,000 shares of Super Voting Preferred Stock for payment of $220,000 owed to Mr. Saleen (see Note 11). (b) During the year ended March 31, 2015 and 2014, the Company incurred $69,418 and $365,251, respectively, in General Counsel Services and legal fees expense with Michaels Law Group, a firm owned by a former Director and General Counsel, Mr. Jonathan Michaels. In January 2015, the Company entered into a Fee Reduction Agreement with Michaels Law Group whereby Michaels Law Group reduced the amount owed to $75,000 and the Company issued 2,500,000 shares of Common Stock to Michaels Law Group as full payment. The value of the Common Stock issued of $75,000 was based on a fair value of $0.03 per share. During the year ended March 31, 2015 the Company paid $550 to Michaels Law Group. In March 2014, the Company entered into a Retainer Agreement whereby the Company issued 1,447,500 shares of Common Stock and five year warrants to purchase 1,447,500 shares of Common Stock at an exercise price of $0.15 per share along with cash of $36,459 in exchange for amounts owed through February 2014. The value of the Common Stock issued was $405,300 based on a stock price of $0.28 on date of settlement. The Company valued the warrants at $332,491 using the Black-Scholes option pricing model using the following assumptions: (i) fair market value of stock of $0.28; (ii) dividend yield of 0%; (iii) expected volatility of 100%; (iv) risk free rate of 1.75% and (v) expected term of 5 years. The Company recognized a loss of $521,558 included in settlement expenses in the Statement of Operations for the year ended March 31, 2014 based on the difference between the value of the common shares and stock warrants issued plus $36,459 cash paid and the amount owed of $252,692. During the year ended March 31, 2014, the Company paid $110,000 to Michaels Law Group. As of March 31, 2014, $23,954 was payable to Michaels Law Group services for rendered. (c) During the year ended March 31, 2015 and 2014, the Company incurred $50,000 and $35,000, respectively, of which the Company paid $12,500 and $10,000, respectively, during the years ended March 31, 2015 and 2014, in investment advisor and research services from Top Hat Capital, whose co-founder and Managing Partner, Jeffrey Kraws, is a Director of the Company. As of March 31, 2015 and 2014, $62,500 and $25,000, respectively, was payable to TopHat Capital for these services. (d) During the year ended March 31 2015, the Company incurred and paid $31,343 and $25,000, respectively, for research report services to Crystal Research Associates, whose co-founder and Chief Executive Officer, Jeffrey Kraws, is a Director of the Company. As of March 31, 2015, $6,343 was payable to Crystal Research Associates for these services. (e) During the year ended March 31, 2015 and 2014, the Company purchased $12,650 and $43,325, respectively, of which the Company paid $2,016 and $12,650, respectively, during the years ended March 31, 2015 and 2014, in purchases of apparel and accessories from Molly Saleen, Inc. dba Mollypop. Molly Saleen, the Chief Executive Officer of Mollypop, is the daughter of Steve Saleen, the Companys Chief Executive Officer and President. As of March 31, 2015 and 2014, $34,214 and $23,580, respectively, was outstanding. On June 22, 2015, the Company issued 19,077.777 shares of Super Voting Preferred Stock for payment of $34,214 outstanding (see Note 11). Other Transactions During the year ended March 31, 2014, the Company incurred and paid $259,534 and $252,663, respectively, in accounting advisory and CFO services with Miranda & Associates, a firm owned by its former Chief Financial Officer, Mr. Robert Miranda. In March 2014, the Company entered into a Separation Agreement and General Release whereby in settlement of all remaining amounts due him, the Company issued 1,061,408 shares of Common Stock and five year warrants to purchase 1,061,408 shares of Common Stock at an exercise price of $0.15 per share along with cash of $10,000 in exchange for amounts owed as of March 31, 2014. The value of the Common Stock issued was $212,282 based on a stock price of $0.20 on date of settlement. The Company valued the warrants at $169,825 using the Black-Scholes option pricing model using the following assumptions: (i) fair market value of stock of $0.20; (ii) dividend yield of 0%; (iii) expected volatility of 100%; (iv) risk free rate of 1.75% and (v) expected term of 5 years. The Company recognized a loss of $218,014 in the Statement of Operations for the year ended March 31, 2014 based on the difference between the value of the common shares and stock warrants issued plus $10,000 cash paid and the amount owed of $174,093. During the year ended March 31, 2014, the Company issued 5,277 shares of its Super Voting Preferred stock or the equivalent of 659,625 shares of its Common Stock, to Robert J. Miranda and Jonathan Michaels (329,811 common shares each). These shares were valued at $250,000, which was recorded as directors fee expense. These shares were issued in consideration of Messrs. Mirandas and Michaels service on the Companys board of directors. |
Income Taxes
Income Taxes | 12 Months Ended |
Mar. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 8 INCOME TAXES As of March 31, 2015, the Company had net operating loss carry forwards for income tax reporting purposes of approximately $19,000,000 that may be offset against future taxable income. Current tax laws limit the amount of loss available to be offset against future taxable income when a substantial change in ownership occurs or a change in the nature of the business. The utilization of the losses is also limited by the fact that the combined companies prior to the reverse merger file on a separate basis and losses on one cannot offset profits on the other. Therefore, the amount available to offset future taxable income may be limited. No tax benefit has been reported in the financial statements for the realization of loss carry forwards, as the Company believes based on the Companys past operations that there is no evidence or assurance that the carry forwards will be utilized. Accordingly, the potential tax benefits of the loss carry forwards are offset by a valuation allowance of the same amount. March 31, 2015 March 31, 2014 Deferred income tax asset: Net operating loss carry forward $ 5,800,000 $ 4,773,000 Valuation allowance (5,800,000 ) (4,773,000 ) Net deferred income tax asset $ $ Reconciliation of the effective income tax rate to the U.S. statutory rate is as follows: March 31, 2015 March 31, 2014 Tax expense at the U.S. statutory income tax (34.00 )% (34.00 )% State tax net of federal tax benefit (5.80 )% (5.80 )% Increase in the valuation allowance 39.8 % 39.8 % Effective tax rate % % The Company is primarily subject to U.S. federal and state income tax. As a result of the implementation of certain provisions of ASC 740, Income Taxes, (formerly FIN 48, Accounting for Uncertainty in Income Taxes An Interpretation of FASB Statement No. 109), the Company performed an analysis of its tax liabilities and determined that there were no positions taken that it considered uncertain. Therefore, there were no unrecognized tax benefits as of March 31, 2015 and March 31, 2014, respectively. Future changes in the unrecognized tax benefit are not expected to have an impact on the effective tax rate due to the existence of the valuation allowance. The Company estimates that the unrecognized tax benefit will not change within the next twelve months. The Company will continue to classify income tax penalties and interest, if any, as part of interest and other expenses in its statements of operations. The Company has incurred no interest or penalties as of March 31, 2015 and March 31, 2014. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Mar. 31, 2015 | |
Equity [Abstract] | |
Stockholders' Equity | NOTE 9 STOCKHOLDERS EQUITY The Company is authorized under its articles of incorporation, as amended, to issue 500,000,000 shares of Common Stock, par value $0.001 per share, and 1,000,000 shares of preferred stock, par value $0.001 per share. Under the terms of the Merger Agreement, all of the outstanding shares of capital stock held by Saleen Automotives former shareholders were exchanged for 554,057 shares of the Companys Super Voting Preferred Stock, and under the terms of the Assignment and License Agreement, as amended, the Company issued to Saleen 341,943 shares of its Super Voting Preferred Stock. Each share of the Companys Super Voting Preferred Stock was convertible into 125 shares of its Common Stock. On July 9, 2013, holders of a majority of the outstanding shares of the Companys Super Voting Preferred Stock voted to convert, 696,000 shares of its Super Voting Preferred Stock into 87,000,000 shares of its Common Stock. Such conversion became effective on July 18, 2013, upon the filing of the amendment to the Certificate of Designations. On January 13, 2014, pursuant to an amendment to the Companys articles of incorporation increasing the authorized shares of its Common Stock to 500,000,000, all of the remaining outstanding shares of its Super Voting Preferred Stock automatically converted into shares of its Common Stock, and the Super Voting Preferred Stock ceased to be a designated series of preferred stock. During the year ended March 31, 2014, the Company issued the equivalent of 12,178 shares of its Super Voting Preferred Stock or 1,522,250 shares of its Common Stock in exchange for the settlement of claims, conditions of employment, directors fees, and payment of information technology services. These shares were valued at $576,981 based on managements estimate of value of the shares issued and was recorded as general and administration expense. Issuance of Common Stock Shares Issued During Year Ended March 31, 2014 During the year ended March 31, 2014, we issued 5,277 shares of Super Voting Preferred Stock to Jonathan Michaels, a former board member and general counsel for the company, and Robert Miranda, a form board member and chief financial officer of the Company. The shares issued were valued at $250,000, which was based on the trading price at the date of agreement. During the year ended March 31, 2014, we issued 5,899 shares of Super Voting Preferred Stock, of which 923 were issued to related parties, valued at $473,581 in exchange for services. The shares issued were valued based on the trading price at the date of agreement. During the year ended March 31, 2014, we issued 481 and 521 shares of Super Voting Preferred Stock for shares issued as principal of $22,803 and interest of $24,697, respectively, related to notes payable. The shares issued were valued based on the trading price at the date of agreement. During the year ended March 31, 2014, we issued 325,128 shares of Common Stock as payment of accounts payable. The shares issued were valued at $103,191, which was based on the trading price at the date of agreement. During the year ended March 31, 2014, we issued 2,508,908 shares of Common Stock and warrants for payment of accounts payable owed to related parties. The shares and warrants issued were valued at $1,120,382, which was based on the trading price at the date of agreement for the shares, and using the fair market value for the warrants based on the Black-Scholes option pricing model (see Note 7). During the year ended March 31, 2014, the Company entered into Subscription Agreements with individual accredited investors (the Subscribers) pursuant to which the Subscribers purchased an aggregate of 8,793,337 restricted shares of the Companys Common Stock at a per share price of $0.15 for aggregate proceeds of $1,312,500, and also received five year, fully vested Common Stock Purchase Warrants to purchase 8,793,337 shares of the Companys Common Stock at an exercise price of $0.15 per share. The warrants were valued based on the Black-Scholes option pricing model noted below. In conjunction with the Companys increase in its common shares authorized in January 2014 to 500,000,000 shares, all then remaining shares of Super Voting Preferred Stock of 896,000 shares were converted into 112,000,000 shares of Common Stock of the Company and the Super Voting Preferred Stock ceased to be a designated series of the Companys preferred stock. During the year ended March 31, 2014, the Company issued an aggregate of 5,553,128 shares of common stock upon conversion of the Companys convertible notes payable and accrued interest amounting to $416,486 (see Note 5). Shares Issued During Year Ended March 31, 2015 During the year ended March 31, 2015, the Company issued 1,000,000 shares of Common Stock valued at $170,000 in in exchange for services. The shares issued were valued based on the trading price at the date of the agreement. During the year ended March 31, 2015, the Company issued 1,285,460 shares of Common Stock and warrants to purchase 527,520 shares of common stock with an aggregate fair value of $470,534 to settle previously recorded Accounts to be settled through issuance of equity securities. As a result, the Company reclassified the $470,534 from a liability as of March 31, 2014 to equity during the year ended March 31, 2015. During the year ended March 31, 2015, the Company entered into Subscription Agreements with individual accredited investors pursuant to which the Subscribers purchased an aggregate of 1,183,334 restricted shares of the Companys Common Stock at a per share price of $0.15 for aggregate proceeds of $177,500, and also received five year, fully vested Common Stock Purchase Warrants to purchase 1,183,334 shares of the Companys Common Stock at an exercise price of $0.15 per share. The warrants were valued based on the Black-Scholes option pricing model noted below. During the year ended March 31, 2015, the Company issued 50,000 shares of common stock upon exercise of warrants which resulted in net proceeds of $7,500. During the year ended March 31, 2015, the Company issued an aggregate of 747,066 shares of common stock with a fair value of $112,059 to induce amendments of the Companys convertible notes (see Note 5). The shares issued were valued based on the trading price at the date of the agreement. During the year ended March 31, 2015, the Company issued an aggregate of 19,817,900 shares of common stock upon conversion of the Companys convertible notes payable and accrued interest amounting to $932,923 (see Note 5). During the year ended March 31, 2015, the Company issued an aggregate of 5,494,787 shares of common stock with a fair value of $582,691 as settlement of notes payable and a note payable to a related party (see Note 3 and Note 4). The shares issued were valued based on the trading price at the date of the settlement. During the year ended March 31, 2015, the Company entered into Settlement Agreement and Mutual Release agreements with three separate vendors whereby the Company issued and aggregate of 7,567,980 shares of Common Stock with a fair value of $223,678 in exchange for extinguishment of amount owed of $168,154. The value of the Common Stock was based on the market price of the Companys Common Stock as of the date of agreements. As a result, the Company recorded a loss on settlement of $55,524 to account the fair value of the shares issued. Omnibus Incentive Plan In January 2014, the Companys board of directors approved the 2014 Omnibus Incentive Plan (the Plan), which is administered by the Companys board of directors or a committee thereof (the Administrator) as set forth in the Plan. The Plan provides for the granting of stock options, stock appreciation rights, restricted share awards and restricted stock units to employees, directors (including non-employee directors), advisors and consultants. Grants under the Plan vest and expire based on periods determined by the Administrator, but in no event can the expiration date be later than ten years from the date of grant (five years after the date of grant if the grant is an incentive stock option to an employee who owns more than 10% of the total combined voting power of all classes of the Companys capital stock (a 10% owner)). Grants of stock options may be either incentive stock options or nonqualified stock options. The per share exercise price on an option, other than with respect to substitute awards, shall not be less than 100% of the fair market value of the Companys Common Stock on the date the option is granted (110% of the fair market value if the grant is to a 10% owner). A total of 28,905,763 shares of Common Stock have been authorized for issuance and reserved under the Plan. The Plan was approved by the Companys stockholders on January 13, 2014. The Company utilizes the Black-Scholes option valuation model to estimate the fair value of stock options granted. The Companys assessment of the estimated fair value of stock options is affected by the Companys stock price as well as assumptions regarding a number of complex and subjective variables and the related tax impact. Stock option activity is set forth below: Number of Shares Weighted Average Exercise Price per Share Aggregate Intrinsic Value Weighted-Average Remaining Contractual Term (in years) Balance at March 31, 2014 $ $ Options granted during the period 14,104,000 0.10 Options cancelled during the period 645,000 0.10 Options exercised during the period Balance at March 31, 2015 13,459,000 0.10 $ 0 9.67 Exercisable at March 31, 2015 7,271,333 0.10 $ 0 9.47 Expected to vest after March 31, 2015 5,826,793 0.10 $ 0 9.47 The aggregate intrinsic value shown in the table above represents the difference between the fair market value of the Companys Common Stock of $0.01 on March 31, 2015 and the exercise price of each option. During the year ended March 31, 2015, the Company granted options to purchase a total of 14,104,000 shares of common stock to employees and non-employees. The stock options are exercisable at $0.03/share up to $0.10/share, vest over a period of three years, expire in ten years and with a fair value of $1,028,417. As a result, the Company recorded stock compensation expense of $650,351 of which $66,067, $268,610, and $315,674 was included in research and development, sales and marketing, and general and administrative expenses, respectively based upon the vesting of these stock options. Unearned compensation of approximately $345,000 at March 31, 2015, related to non-vested stock options, will be recognized into expense over a weighted average period of 1.02 years. Warrants The following summarizes warrant activity for the Company during the year ended March 31, 2015: Warrants Weighted Average Weighted Average Outstanding March 31, 2013 Issued during the period 11,252,245 0.15 4.8 Outstanding March 31, 2014 11,252,245 $ 0.15 4.8 Issued during the period 2,110,854 0.15 4.1 Exercised during the period (50,000 ) 0.15 Outstanding March 31, 2015 13,313,099 $ 0.15 3.9 During the year ended March 31, 2015, the Company granted warrants to purchase total of 1,183,334 shares of common stock pursuant to the sale of the Companys common stock for cash. During the year ended March 31, 2015, the Company granted warrants to purchase 527,520 shares of common stock pursuant to settlement agreement with a fair value of $82,662 using the Black-Scholes-Merton option pricing model using the following assumptions: (i) fair market value of stock of $0.21; (ii) dividend yield of 0%; (iii) expected volatility of 100%; (iv) risk free rate of 1.75% and (v) expected term of 5 years. The fair value of the warrants was included as part of amounts payable settled through the issuance of equity securities in the accompanying Statement of Stockholders Deficit. During the year ended March 31, 2015 warrants to purchase 50,000 shares of the Companys Common Stock were exercised for total proceeds of $7,500. As of March 31, 2015, 13,313,099 warrants were exercisable and the intrinsic value of the warrants was nil. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Mar. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 10 COMMITMENTS AND CONTINGINCIES Facilities Leases The Company rents two buildings totaling approximately 76,000 square feet on triple net leases through January, 2018. Rent expense during the year ended March 31, 2015 and 2014 was $524,339 and $508,802, respectively. The current lease provides for an annual escalation of 3% in the rent each February and provides for one option to extend beyond January 2018 for periods from 36 to 60 months. Past rent will be made up with the payment of an additional $5,300 for 20 months starting in June, 2014, which expired in February 2015. The future minimum rental payments required under the non-cancelable operating leases described above as of March 31, 2015 are as follows: Years ending March 31: Lease Commitment 2016 $ 583,671 2017 599,689 2018 512,172 $ 1,695,532 Purchase Commitments In April 2014, the Company entered into an agreement with BASF to exclusively use BASFs products for paint work. The agreement continues from May 2014 until the Company purchases in aggregate $4,131,000 of BASF products. If the aggregate purchases of BASF products are less than $1,697,000 over a period of 36 consecutive months, the Company is required to repay BASF 6.1% of the shortfall between $1,697,000 and the amount it actually purchased over this period. In consideration for the Companys exclusive use of BASFs products and fulfilling this purchase commitment, BASF paid the Company $250,000, which was recorded as deferred vendor consideration. This amount will be recorded as a reduction of cost of services based on a systematic and rational allocation of the cash consideration offered to the underlying transaction. In May 2014, the Company entered into an agreement with FinishMaster, Inc. (FinishMaster) to exclusively use FinishMasters paint material supplies. The agreement continues from May 2014 until the Company purchases in aggregate $1,555,000 of FinishMaster products. In consideration for the Companys exclusive use of FinishMasters products and fulfilling this purchase commitment, FinishMaster paid the Company $25,000, which was recorded as deferred vendor consideration, and FinishMaster will pay an additional $25,000 upon the achievement of purchase level milestones, as outlined in the agreement. Should the Company not complete a set purchase level milestone, the Company would be required to re-pay the $25,000 along with $11,475 compensation to FinishMaster. This initial amount paid will be recorded as a reduction of cost of services based on a systematic and rational allocation of the cash consideration offered to the underlying transaction. Litigation The Company is involved in certain legal proceedings that arise from time to time in the ordinary course of its business. The Company is currently a party to several legal proceedings related to claims for payment that are currently accrued for in its financial statements as accrued liabilities, accounts or notes payable. Except for income tax contingencies (commencing April 1, 2009), the Company records accruals for contingencies to the extent that management concludes that the occurrence is probable and that the related amounts of loss can be reasonably estimated. Legal expenses associated with the contingency are expensed as incurred. Material legal proceedings that are currently pending are as follows: The Company is a defendant in a case filed by MSY Trading, Inc. on April 13, 2012 in the California Superior Court, Riverside County, that claimed breach of contract related to an engine installed by a third party vendor. The suit claimed $200,000 in damages plus interest, legal fees and costs of litigation. SSC filed a cross complaint against MSY Trading, Inc. for breach of warranty, negligence, and indemnification. On January 10, 2014, the Company settled this claim by agreeing to pay of $112,500 over a period of 18 months of which we paid $45,500 through August 2014. Subsequent to this date the Company defaulted on payments. On October 30, 2014, a judgment was entered against SSC in the amount of $68,950, which the Company accrued for in accounts payable. In December 2014, the Saleen Automotive, Inc. (formerly Saleen Electric Automotive, Inc.), our wholly-owned subsidiary, received a Complaint from Green Global Automotive B.V. (GAA) alleging causes of action for breach of contract and breach of the covenant of good faith and fair dealing, related to a European Distribution Agreement entered into in December 2011 between GAA and Saleen Automotive. The suit seeks contract and economic damages of $50,000 along with compensatory damages, restoration, lost profits and attorneys fees. The Company is currently evaluating the merits of this case, if any, and is working to ascertain the impact on its financial statements. In December 2014, the Company received a Complaint from Ford of Escondido for 1) claim and delivery of personal property, 2) money due on a contract, and 3) common count. Home Heller Ford, which was merged into Ford of Escondido, is a party to a supply agreement with us entered into in May 2013. Specifically, Ford of Escondido seeks payment of seven (7) Ford Mustangs for a total of $222,871 plus interest and attorneys fees, less any amounts to be credited pursuant to proceeds of sale. As of March 31, 2015, the Company has included in accounts payable the amount owed for four (4) vehicles which the Company believes are owed to Ford of Escondido. As such, the Company believes that Ford of Escondidos claims with respect to the remaining three (3) vehicles are without merit and have responded to the Complaint including claims that Ford of Escondido breached the supply agreement with the Company. There has been no response received from Ford of Escondido to the Companys position and the outcome is uncertain; however, the Company believes this matter will not have a material impact, if any, on its financial statements. In February 2014, SSC received a Complaint from a Citizens Business Bank (the Bank) alleging, among other matters, breach of contract due to non-timely payment of November and December 2013 principal amounts owed, which were paid as of December 31, 2013, and the occurrence of a change in control as a result of the Merger. In April 2014, the Bank agreed to dismiss the suit in exchange for payment of $124,000 that was applied towards principal and unpaid fees along with advance loan principal and interest for May, June and July 2014, and the agreement to pay the remaining recorded balance due of $443,000 to the Bank in August 2014. From August 2014 to March 31, 2015, in exchange for payments totaling $90,000, the Bank agreed to extend this arrangement through various dates with the last date being March 2015. The Company did not pay the then outstanding principal and interest in March 2015 and the Bank did not agree to an additional extension. In May 2015, the Company was notified of a lawsuit filed by the Bank in the Superior Court of the State of California, County of Riverside, alleging breach of the Loan Agreement with the Bank (Loan Agreement), breach of a commercial guaranty by Steve Saleen and indebtedness for principal and interest of at least $369,302, and seeking appointment, which has not been granted by the court as of the date of this filing, of a limited purpose receiver and a temporary restraining order enjoining the Company from transferring the collateral securing the loan, which related to SSC. The main complaint by the Bank stems from the Companys reverse merger that occurred in June 2013 whereby the Bank deemed this event to constitute a change in control, as defined in the loan agreement. The Company disagrees with the Banks interpretation and believes the claims by the bank are without merit. Although the Company currently believes that resolving claims against the Company, individually or in aggregate, will not have a material adverse impact on the Companys financial statements, these matters are subject to inherent uncertainties and managements views of these matters may change in the future. See Note 3 Insurance Due to the Companys cash constraints, the Company currently does not maintain insurance ordinarily customary for businesses its size and type such as workers compensation, garage and general liability insurance. As such, the Company may incur losses against it such as employee worker accidents, losses due to natural disasters or other business risks for which the Company is not insured. Such damages could have a material adverse effect on its business and results of operations. There can be no assurance that the Company will be able to obtain, afford or qualify for insurance to address such potential risks or if such insurance will adequately cover any potential matters encountered. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Mar. 31, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 11 SUBSEQUENT EVENTS 10% Senior Secured Convertible Notes On May 13, 2015, the Company entered into a 10.0% First Lien Convertible Note (10% Note) and Securities Purchase Agreement (SPA) by and among the Company and GreenTech Automotive, Inc. (GTA), whereby GreenTech agreed to provide for the issuance of up to $500,000 under the 10% Note for a period up to August 17, 2015 under the same terms as the June 2013 Notes (see note 5). In conjunction with this 10% Note, $100,000 was converted from a note entered into in March 2015 with GreenTech (see Note 3). These Notes have subsequently been converted to a license agreement as described below. Intellectual Property License Agreement In June 2015, the Company entered into an Intellectual Property License Agreement (the License Agreement) with Saleen Motors International, LLC, a Delaware limited liability company (SMI) and a wholly owned subsidiary of GTA and non-affiliated subsidiary of the Company. Pursuant to the License Agreement, the Company granted to SMI an irrevocable, fully paid-up (subject to certain royalty fees), sublicensable license during the term of the License Agreement to use all of the Companys intellectual property on an exclusive basis worldwide other than in North America, Europe, Middle East and Australia (as applicable, the Territory), to make, promote, sell and otherwise exploit the Companys intellectual property in the Territory. The License Agreement has an initial term of 10 years, with automatic renewal for periods of five years at SMIs election provided that the number of Saleen branded vehicles sold by SMI in the prior 12-month period is not less than the average number of Saleen-branded vehicles sold by the Company and subsidiaries in the most recently available three-year period. The License Agreement may be terminated by mutual written agreement, upon a material breach, which remains uncured (with SMI having the right to cure no more than 3 breaches of its obligation to pay royalties) for 15 days after written notice of such breach, or in the event of SMIs bankruptcy. In consideration of the license SMI shall pay royalties, within 15 days after the product shipment date and in all events at least quarterly, based on a fee per Saleen-branded vehicle sold by SMI depending on its sales volume as set forth in the License Agreement, and shall pay royalties based on a percentage of SMIs gross revenues for parts and merchandise (in each case net of discounts, returns, taxes and similar amounts) received on Saleen-branded non-vehicle products. The parties to the License Agreement, along with GTA, agreed that the $500,000 10% Notes made by GTA pursuant to the SPA and the 10.0% First Lien Convertible Note entered into in May 2015, was deemed satisfied upon the execution of the License Agreement. Except for the transactions under the agreements described above and the Companys Joint Branding, Marketing, and Distribution Agreement with WM Industries Corp. (an affiliate of SMI and GTA) dated March 2014, none of the Company or its subsidiaries had any material relationship with SMI, GTA and its affiliates. Authorized Shares In June 2015, the board of directors approved an increase in our authorized shares from 500,000,000 to 2,500,000,000. The increase in authorized shares is pending our filing and approval of an Information Statement. Super Voting Preferred On June 12, 2015, the Company filed a Certificate of Designation designating the rights and restrictions of 1,000,000 shares of Super Voting Preferred Stock, par value $0.001 per share, pursuant to resolutions approved by the Companys Board of Directors on June 11, 2015. The holders of Super Voting Preferred Stock are entitled to vote together with the holders of Common Stock, as a single class, upon all matters submitted to holders of Common Stock for a vote. Each share of Super Voting Preferred Stock is entitled to a number of votes equal to the number of shares of our Common Stock into which it is convertible at the applicable record date. Each share of our Super Voting Preferred Stock will immediately and automatically convert into 1,000 shares (subject to adjustment for splits, dividends and similar transaction) of Common Stock at such time that the Company files, at such time as determined by the Companys board of directors, an amendment to its articles of incorporation effecting a reverse stock split of Common Stock or effecting an increase in the authorized shares of Common Stock, in each case so that the Company has a sufficient number of authorized and unissued shares of Common Stock to permit the conversion of all then outstanding shares of Super Voting Preferred Stock into Common Stock. In the event of any liquidation, dissolution or winding up of the Company, the assets available for distribution to the stockholders will be distributed among the holders of the Super Voting Preferred Stock and the holders of Common Stock, pro rata, on an as-converted-to-common-stock basis. The holders of Super Voting Preferred Stock are entitled to dividends in the event that the Company pays cash or other dividends in property to holders of outstanding shares of Common Stock, which dividends would be made pro rata, on an as-converted-to-common-stock basis. On June 16, 2015, in order to make available additional shares of Common Stock to facilitate the conversion of outstanding debt, the Company issued to Steve Saleen, the Companys Chief Executive Officer and President, 82,133.875 shares of Super Voting Preferred Stock in exchange for 82,133,875 shares of Common Stock held by Mr. Saleen. On June 16, 2015, the Company issued 220,000 shares of Super Voting Preferred Stock to Mr. Saleen in satisfaction of $220,000 of debt owed to Mr. Saleen. The per share price of Super Voting Preferred Stock issued to Mr. Saleen was based on the conversion ratio of Super Voting Preferred Stock into 1,000 shares of Common Stock, multiplied by the per share closing price ($0.001) of Common Stock as of June 11, 2015, the date the issuance was approved by the Companys Board of Directors. On June 22, 2015, the Company issued to Molly Saleen, Inc., dba Mollypop, 19,007.777 shares of Super Voting Preferred Stock to reimburse Mollypop for $34,214 of merchandise purchased by Mollypop on the Companys behalf. Molly Saleen, the Chief Executive Officer of Mollypop, is the daughter of Steve Saleen. On June 22, 2015, the Company also issued 63,000 shares of Super Voting Preferred Stock to Michaels Law Group, APLC (MLG) as a retainer for legal services to be provided by MLG in connection with various outstanding claims and suits in which the Company is plaintiff, and for other legal matters. Jonathan Michaels, the founding member of MLG, previously served as a member of the Companys Board of Directors and as our general counsel. The per share price of Super Voting Preferred Stock issued to Mollypop and MLG was based on the conversion ratio of Super Voting Preferred Stock into 1,000 shares of Common Stock, multiplied by the per share closing price ($0.0018) of Common Stock as of June 19, 2015, the date the issuance was approved by the Board of Directors. Common Stock Issued in Conjunction with Unsecured Convertible Notes From April 1, 2015 to the date of this Form 10-K filing, unsecured convertible note holders (see note 5) converted $372,514 of principal and unpaid interest into 367,751,194 shares of Common Stock. As discussed in Note 5, the note agreements require the Company to maintain a reserve of Common Stock, as determined based on a formula stated in the note agreements, which, upon request by the note holder, can be adjusted based on the formula and the then share price of the Companys Common Stock as of the date of request. The note holder can convert up to the number of the then shares reserved for conversion of their related note. As of the date of this filing of Form 10-K, the Company is in default of the Common Stock reserve requirements due to insufficient availability of authorized shares to fulfill the note holders reserve requests. |
Nature of the Business and Si20
Nature of the Business and Significant Accounting Policies (Policies) | 12 Months Ended |
Mar. 31, 2015 | |
Accounting Policies [Abstract] | |
Description of the Company | Description of the Company Saleen Automotive, Inc. (formerly W270, Inc.) (the Company) was incorporated under the laws of the State of Nevada on June 24, 2011. The Company designs, develops, manufactures and sells high performance vehicles built from base chassis of Ford Mustangs, Chevrolet Camaros, Dodge Challengers and Tesla Model S vehicles. The Company is a low volume vehicle design, engineering and manufacturing company focusing on the mass customization (the process of customizing automobiles that are mass produced by the manufacturers (Ford, Chevrolet, Dodge and Tesla) of OEM American sports and electric vehicles. A high performance car is an automobile that is designed and constructed specifically for speed and performance. The design and construction of a high performance car involves not only providing a capable power train but also providing the handling, aerodynamics and braking systems to support it. The Companys Saleen-branded products include a complete line of upgraded high performance vehicles, automotive aftermarket specialty parts and lifestyle accessories. |
Merger | Merger On May 23, 2013, the Company entered into an Agreement and Plan of Merger (Merger Agreement) with Saleen California Merger Corporation, its wholly-owned subsidiary, Saleen Florida Merger Corporation, its wholly-owned subsidiary, Saleen Automotive, Inc. (Saleen Automotive), SMS Signature Cars (SMS and together with Saleen Automotive, the Saleen Entities) and Steve Saleen (Saleen and together with the Saleen Entities, the Saleen Parties). The closing (the Closing) of the transactions contemplated by the Merger Agreement (the Merger) occurred on June 26, 2013. At the Closing (a) Saleen California Merger Corporation was merged with and into SMS with SMS surviving as one of the Companys wholly-owned subsidiaries; (b) Saleen Florida Merger Corporation was merged with and into Saleen Automotive with Saleen Automotive surviving as one of the Companys wholly-owned subsidiaries; (c) holders of the outstanding capital stock of Saleen Automotive received an aggregate of 554,057 shares of the Companys Super Voting Preferred Stock, which was subsequently converted into 69,257,125 shares of the Companys Common Stock and holders of the outstanding capital stock of SMS received no consideration for their shares; and (d) approximately 93% of the beneficial ownership of the Companys Common Stock (on a fully-diluted basis) was owned, collectively, by Saleen (including 341,943 shares of the Companys Super Voting Preferred Stock, which was subsequently converted into 42,742,875 shares of the Companys Common Stock, issued to Saleen pursuant to the Assignment and License Agreement) and the former holders of the outstanding capital stock of Saleen Automotive. As a result of the Merger the Company is solely engaged in the Saleen Entities business, Saleen Automotives then officers became the Companys officers and Saleen Automotives then three directors became members of the Companys five-member board of directors. On June 17, 2013, the Company consummated a merger with WSTY Subsidiary Corporation, its wholly-owned subsidiary, pursuant to which the Company amended its articles of incorporation to change its name to Saleen Automotive, Inc. In October 2013, SMS effected an amendment to its articles of incorporation to change its name to Saleen Signature Cars. In January 2014, the Company effected an increase in the number of its common shares authorized to 500,000,000 and all the remaining shares of Super Voting Preferred Stock were converted into Common Stock of the Company and the Super Voting Preferred Stock ceased to be a designated series of the Companys preferred stock. As the owners and management of Saleen Automotive had voting and operating control of the Company after the Merger, the transaction was accounted for as a recapitalization with the Saleen Entities deemed the acquiring companies for accounting purposes, and the Company deemed the legal acquirer. Due to the change in control, the consolidated financial statements reflect the historical results of the Saleen Entities prior to the Merger and that of the consolidated company following the Merger. Common Stock and the corresponding capital amounts of the Company pre-Merger have been retroactively restated as of the earliest periods presented as capital stock reflecting the exchange ratio in the Merger. The amount of debt assumed upon the Merger of $39,547, legal and closing costs of $46,000, and a dividend of an aggregate amount of $280,000 paid to our stockholders as of May 23, 2013 have been reflected as a cost of the reverse merger transaction in the accompanying Statement of Operations for the year ended March 31, 2014. |
Consolidation Policy | Consolidation Policy The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Saleen Automotive, Inc., a Florida corporation, Saleen Signature Cars, a California corporation and Saleen Sales Corporation, a California corporation. Intercompany transactions and balances have been eliminated in consolidation. |
Reclassification of Certain Prior Year Information | Reclassification of Certain Prior Year Information The Company has reclassified certain prior year amounts to conform to the current year presentation. This included reclassification of promotional trade discount expenses of $172,661 for the twelve month period ended March 31, 2014 to revenue from sales and marketing expenses. The Company has also reclassified $23,580 of accounts payable owed to Molly Saleen Inc. as of March 31, 2014 from Accounts Payable to Due to Related Parties and has reclassified $139,300 of taxes payable as of March 31, 2014 from Other current liabilities to Payroll and other taxes payable. The reclassification of these amounts had no impact on consolidated net loss or cash flows. |
Going Concern | Going Concern The Companys consolidated financial statements have been presented on the basis that it is a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. During the year ended March 31, 2015, the Company incurred an operating loss of $5,321,929 and utilized $2,549,895 of cash in operations. The Company also had a stockholders deficit and working capital deficit of $9,669,225 and $7,050,644, respectively, as of March 31, 2015, and as of that date, the Company owed $745,503 in past unpaid payroll and other taxes; $933,271 of outstanding notes payable were in default; $1,204,840 of accounts payable was greater than 90 days past due; and $288,900 is owed on past due rent. In addition, in May 2015, the Company received a complaint from a bank alleging breach of the loan agreement and breach of a commercial guaranty by Steve Saleen and demanding full payment of principal, interest and fees of $369,302. A default under the loan agreement triggers a cross default under the Companys 3% Senior Secured Convertible Notes and 7% Convertible Notes (see Note 5) enabling the holders thereof to, at their election until the later of 30 days after such default is cured or otherwise resolved or the holder becomes aware of such cure or resolution, accelerate the maturity of the Companys indebtedness. In addition, the Company does not currently maintain workers compensation, product liability and other general insurance. These factors raise substantial doubt about the Companys ability to continue as a going concern. The accompanying financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern. The Companys ability to continue as a going concern is dependent upon its ability to raise additional capital and to ultimately achieve sustainable revenues and profit from operations. At March 31, 2015 and July 13, 2015 the Company had cash on hand in the amount of $143,083 and approximately $21,000, respectively, and is not generating sufficient funds to cover current production and operations. The Company has utilized funding to operate the business during the year ended March 31, 2015 with funds obtained from customer deposits received in advance of shipment of $1,702,656; received $500,000 in advance royalties from an Intellectual Property Agreement (Note 11) raised $1,289,409 through the issuance of convertible notes; received $295,000 through the issuance of notes payable of which $195,000 came from related parties; and obtained cash from sales of Common Stock through entering into Subscription Agreements with individual accredited investors (the Subscribers) pursuant to which the Subscribers purchased from the Company an aggregate of 1,183,334 restricted common shares at a per share price of $0.15 for aggregate proceeds of $177,500. The Company will need and is currently seeking additional funds, primarily through the issuance of debt or equity securities for production and to operate its business through and beyond the date of this Form 10-K filing. No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, it may contain undue restrictions and covenants on its operations, in the case of debt financing or cause substantial dilution for its stockholders in the case of convertible debt and equity financing. |
Use of Estimates | Use of Estimates Financial statements prepared in accordance with accounting principles generally accepted in the United States require management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Among other things, management estimates include the estimated collectability of its accounts receivable, the valuation of long lived assets, warranty reserves, the assumptions used to calculate derivative liabilities, and equity instruments issued for financing and compensation. Actual results could differ from those estimates. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company accounts for the fair value of financial instruments in accordance with the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) topic 820, Fair Value Measurements and Disclosures (ASC 820), formerly SFAS No. 157 Fair Value Measurements. ASC 820 defines fair value as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Authoritative guidance provided by the FASB defines the following levels directly related to the amount of subjectivity associated with the inputs to fair valuation of these financial assets: Level 1 Quoted prices in active markets for identical assets or liabilities. Level 2 Inputs, other than the quoted prices in active markets, that is observable either directly or indirectly. Level 3 Unobservable inputs based on the Companys assumptions. The Companys financial instruments consist principally of cash, accounts receivable, accounts payable, accrued liabilities, customer deposits, and notes payable. The carrying amounts of such financial instruments in the accompanying balance sheets approximate their fair values due to their relatively short-term nature. It is managements opinion that the Company is not exposed to any significant currency or credit risks arising from these financial instruments. As of March 31, 2015 and 2014, the Companys consolidated balance sheets included the fair value of derivative liabilities of $1,268,588 and $5,032,786, respectively, which was based on Level 2 measurements. There were no other investments or liabilities of the Company measured and recorded at fair value as of March 31, 2015 and 2014. |
Derivative Financial Instruments | Derivative Financial Instruments The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the consolidated statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. To determine the number of authorized but unissued shares available to satisfy outstanding convertible securities, the Company uses a sequencing method to prioritize its convertible securities as prescribed by ASC 815-40-35. At each reporting date, the Company reviews its convertible securities to determine their classification is appropriate. |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts The Company evaluates the collectability of its trade accounts receivable based on a number of factors. In circumstances where the Company becomes aware of a specific customers inability to meet its financial obligations to the Company, a specific reserve for bad debts is estimated and recorded, which reduces the recognized receivable to the estimated amount the Company believes will ultimately be collected. In addition to specific customer identification of potential bad debts, bad debt charges are recorded based on the Companys historical losses and an overall assessment of past due trade accounts receivable outstanding. The Company recognizes an allowance for doubtful accounts to ensure trade receivables are not overstated due to uncollectability. For the most part, the Company generally requires advance payments for cars and credit card payments for parts. As of March 31, 2014 the Company had an allowance for doubtful accounts of $271,658. There was no such allowance at March 31, 2015. |
Inventories | Inventories Inventories are stated at the lower of cost or market. Cost is determined principally on a first-in-first-out average cost basis. Inventories consist primarily of parts for both resale and conversion of automotive chassis. The Company will typically buy the automobile chassis of the vehicle to be converted from the Ford, Chevrolet and Dodge dealers and then modify the vehicle as ordered. The Company typically has no finished goods inventory, as the Company builds to order, other than parts held for resale. March 31, 2015 March 31, 2014 Parts and chassis $ 176,718 $ 183,941 Work in process 298,969 - S7 Supercar held for sale 250,000 250,000 Total inventories $ 725,687 $ 433,941 |
Long-Lived Assets | Long-lived Assets In accordance with ASC 350-30 (formerly SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets The Company had no such asset impairments at March 31, 2015 or March 31, 2014. There can be no assurance, however, that market conditions will not change or demand for the Companys products under development will continue. Either of these could result in future impairment of long-lived assets. |
Revenue Recognition | Revenue Recognition Sales of High Performance Cars and Parts The Company generates revenues primarily from the sale of high performance automobiles and parts. The Company recognizes revenue from the sale of completed high performance cars and parts when there is persuasive evidence that an arrangement exists, delivery of the product has occurred and title has passed, the selling price is both fixed and determinable, and collectability is reasonably assured, all of which generally occurs upon shipment of the Companys product or delivery of the product to the destination specified by the customer. In cases where the Company is the primary obligor related to the purchase of base Ford Mustang, Chevrolet Camaro and Dodge Challenger vehicles, the Company recognizes revenue related to the cost of the chassis plus markup, if any. The Company determines whether delivery has occurred based on when title transfers and the risks and rewards of ownership have transferred to the buyer, which usually occurs when the Company places the cars or products on the carrier. The Company regularly reviews its customers financial positions to ensure that collectability is reasonably assured and generally collects before shipment. Except for warranties, the Company has no post-sales obligations nor does the Company accept returns. Contract Revenue and Cost Recognition on Design Services During the year ended March 31, 2014, the Company realized revenue from a contract with a major Hollywood movie producer of $121,500 for the design and replica production of supercar racing automobiles for the Need for Speed movie, which was released in March 2014. The Company did not have any design contracts during the year ended March 31, 2015. |
Customer Deposits | Customer Deposits The Companys sales orders generally require customers to put deposits on vehicles at the time of signing a sales order. Typically, the Company receives either partial or full deposits related to such sales orders in advance of shipment and is generally paid in full prior to shipment of customers orders. Customer deposits as of March 31, 2015 and 2014 comprised of funds received in advance of shipment and were $1,896,568 and $193,912, respectively, which will be recorded as revenue upon shipment of related customers orders and satisfaction of the revenue recognition requirements discussed above. |
Warrant Policy | Warranty Policy The Company provides a three-year or 36,000 miles New Vehicle Limited Warranty with every Saleen 302 Mustang, Saleen 570 Challenger, Saleen 620 Camaro high performance vehicle and Saleen GTX. The vehicle limited warranty applies to installed parts and/or assemblies in new Saleen high performance cars. All of the unaltered parts are covered under the original full warranty of the OEM manufacturer of the base vehicles (Ford, Chevrolet, and Dodge). Changes in the product warranty accrual for the fiscal years ended March 31, 2015 and 2014 were as follows: Balance at Beginning of Fiscal Year Warranty Expenditures Provision for Estimated Warranty Cost Balance at End of Fiscal Year Fiscal 2015 $ - $ (7,077 ) $ 27,077 $ 20,000 Fiscal 2014 $ - $ (16,763 ) $ 36,763 $ 20,000 |
Business Segments | Business Segments The Company currently has one operating business segment that is converting automobiles into high performance vehicles and selling related parts. |
Research and Developments Costs | Research and Development Costs Research and development costs consist of expenditures for the research and development of new products and technology and are expensed as incurred. Research and development costs were $747,833 and $766,996 during the years ended March 31, 2015 and 2014, respectively. |
Advertising Sales and Marketing Costs | Advertising, Sales and Marketing Costs Advertising, sales and marketing costs are expensed as incurred and are included in sales and marketing expenses. During the year ended March 31, 2015, advertising, sales and marketing expenses were $3,679, $126,185, and $472,969, respectively. During the year ended March 31, 2014, advertising, sales and marketing expenses were $59,993, $110,275, and $414,555, respectively. |
Income Taxes | Income Taxes The Company accounts for income taxes under FASB Codification Topic 740-10-25 (ASC 740-10-25). Under ASC 740-10-25, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740-10-25, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company maintains a valuation allowance with respect to deferred tax assets. The Company established a valuation allowance based upon the potential likelihood of realizing the deferred tax asset and taking into consideration the Companys financial position and results of operations for the current period. Future realization of the deferred tax benefit depends on the existence of sufficient taxable income within the carry forward period under the Federal tax laws. Changes in circumstances, such as the Company generating taxable income, could cause a change in judgment about the realizability of the related deferred tax asset. Any change in the valuation allowance will be included in income in the year of the change in estimate. |
Stock Compensation | Stock Compensation The Company uses the fair value recognition provision of ASC 718, Stock Compensation, which requires the Company to expense the cost of employee services received in exchange for an award of equity instruments based on the grant date fair value of such instruments. The Company uses the Black-Scholes-Merton option pricing model to calculate the fair value of any equity instruments on the grant date. The Company also uses the provisions of ASC 505-50, Equity Based Payments to Non-Employees, |
Loss Per Share | Loss per Share The basic EPS is calculated by dividing the Companys net loss available to Common Stockholders by the weighted average number of common shares during the period. The diluted EPS is calculated by dividing the Companys net loss available to Common Stockholders by the diluted weighted average number of shares outstanding during the period. The diluted weighted average number of shares outstanding is the basic weighted average number of shares adjusted for any potentially dilutive debt or equity securities unless the effects thereof are anti-dilutive, that is inclusion of such shares would reduce the net loss or increase the net income. For the years ended March 31, 2015 and 2014, the basic and diluted shares outstanding were the same, as potentially dilutive shares were considered anti-dilutive. As of March 31, 2015, stock options and warrants exercisable for 13,459,000, and 13,313,099, shares of Common Stock, respectively, have been excluded from diluted loss per share because they are anti-dilutive. As of March 31, 2014, warrants exercisable for 11,252,245 shares of Common Stock, and Notes convertible into 66,632,617 shares of Common Stock have been excluded from diluted loss per share because they are anti-dilutive. |
Significant Concentrations | Significant Concentrations Sales to one customer comprised 11% of revenues for the year ended March 31, 2015. No customers comprised revenues in excess of 10% during the year ended March 31, 2014 and no customers comprised accounts receivable in excess of 10% at March 31, 2015 and 2014. |
Concentrations of Credit Risk | Concentrations of Credit Risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consisted primarily of cash, to the extent balances exceeded limits that were insured by the Federal Deposit Insurance Corporation and accounts receivable. The Company does not require collateral and maintains reserves for potential credit losses. Such losses have historically been immaterial and have been within managements expectations. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost, net of accumulated depreciation and amortization. The cost of property and equipment is depreciated or amortized on the straight-line method over the following estimated useful lives: Computer equipment and software 3 years Furniture 3 years Machinery 3-10 years Tooling 10 years Leasehold improvements are amortized using the straight-line method over the shorter of the estimated useful life of the asset or the lease term. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards On May 28, 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2014-09 (ASU 2014-09), Revenue from Contracts with Customers. ASU 2014-09 will eliminate transaction- and industry-specific revenue recognition guidance under current U.S. GAAP and replace it with a principle based approach for determining revenue recognition. ASU 2014-09 will require that companies recognize revenue based on the value of transferred goods or services as they occur in the contract. The ASU also will require additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. We will apply the new revenue recognition standard in annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Earlier application would be permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. Management is currently evaluating the impact, if any, on adopting ASU 2014-09 on the Companys results of operations or financial condition. In April 2014, the FASB issued Accounting Standards Update No. 2014-08 (ASU 2014-08), Presentation of Financial Statements (Topic 205) and Property, Plant and Equipment (Topic 360). ASU 2014-08 amends the requirements for reporting discontinued operations and requires additional disclosures about discontinued operations. Under the new guidance, only disposals representing a strategic shift in operations or that have a major effect on the Companys operations and financial results should be presented as discontinued operations. This new accounting guidance is effective for annual periods beginning after December 15, 2014. Management is currently evaluating the impact, if any, of adopting ASU 2014-08 on the Companys results of operations or financial condition. In November 2014, the FASB issued Accounting Standards Update No. 2014-16 (ASU 2014-16), Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity. The amendments in this ASU do not change the current criteria in U.S. GAAP for determining when separation of certain embedded derivative features in a hybrid financial instrument is required. The amendments clarify that an entity should consider all relevant terms and features, including the embedded derivative feature being evaluated for bifurcation, in evaluating the nature of the host contract. The ASU applies to all entities that are issuers of, or investors in, hybrid financial instruments that are issued in the form of a share and is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted. Management is currently evaluating the impact, if any, of adopting ASU 2014-16 on the Companys results of operations or financial condition. In January 2015, the FASB issued ASU No. 2015-01, Income StatementExtraordinary and Unusual Items (Subtopic 225-20), as part of its initiative to reduce complexity in accounting standards. ASU No. 2015-01 eliminates from generally accepted accounting principles the concept of extraordinary items. ASU No. 2015-01 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015, with earlier adoption permitted. A reporting entity may apply the provisions of ASU No. 2015-01 prospectively or retrospectively to all prior periods presented in the financial statements. The Company does not expect the adoption of ASU No. 2015-01 to have a material effect on it results of operations or financial condition. Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Companys present or future consolidated financial statements. |
Nature of the Business and Si21
Nature of the Business and Significant Accounting Policies (Tables) | 12 Months Ended |
Mar. 31, 2015 | |
Accounting Policies [Abstract] | |
Schedule of Inventories | The Company typically has no finished goods inventory, as the Company builds to order, other than parts held for resale. March 31, 2015 March 31, 2014 Parts and chassis $ 176,718 $ 183,941 Work in process 298,969 - S7 Supercar held for sale 250,000 250,000 Total inventories $ 725,687 $ 433,941 |
Schedule of Changes in Product Warranty Accrual | Changes in the product warranty accrual for the fiscal years ended March 31, 2015 and 2014 were as follows: Balance at Beginning of Fiscal Year Warranty Expenditures Provision for Estimated Warranty Cost Balance at End of Fiscal Year Fiscal 2015 $ - $ (7,077 ) $ 27,077 $ 20,000 Fiscal 2014 $ - $ (16,763 ) $ 36,763 $ 20,000 |
Schedule of Estimated Useful Lives | The cost of property and equipment is depreciated or amortized on the straight-line method over the following estimated useful lives: Computer equipment and software 3 years Furniture 3 years Machinery 3-10 years Tooling 10 years |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Mar. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consisted of the following at March 31, 2015 and March 31, 2014: March 31, 2015 March 31, 2014 Tooling $ 641,324 $ 470,399 Equipment 321,189 264,837 Leasehold improvements 203,310 203,312 Total, cost 1,165,823 938,548 Accumulated depreciation and amortization (573,707 ) (391,724 ) Total Property and Equipment $ 592,116 $ 546,824 |
Notes Payable (Tables)
Notes Payable (Tables) | 12 Months Ended |
Mar. 31, 2015 | |
Debt Disclosure [Abstract] | |
Schedule of Secured and Unsecured Notes Payable | Notes payable are comprised as follows: March 31, 2015 March 31, 2014 Senior secured note payable to a bank, secured by all assets of Saleen Signature Cars, guaranteed by the U.S. Small Business Administration and personally guaranteed by the Companys CEO, payable in full in March 2015 (1) $ 358,704 $ 442,479 Subordinated secured bonds payable, interest at 6% per annum payable at various maturity dates, currently in default (2) 97,000 97,000 Subordinated secured note payable, interest at 6% per annum, payable March 16, 2010, currently in default (3) 61,046 61,046 Subordinated secured note payable for legal services rendered, non-interest bearing, payable on October 25, 2013, in default at March 31, 2014 (4) - 37,749 Note and bond payable (5) - 517,500 Unsecured notes payable, interest at 10% per annum payable on various dates from July 31 to March 31, 2010, currently in default (6) 55,000 120,000 Promissory note, interest at 6%, secured by a vehicle (7) 100,000 - Total notes payable $ 671,750 $ 1,275,774 (1) On February 6, 2014, Saleen Signature Cars received a Complaint from the bank filed in California Superior Court, Riverside County alleging, among other matters, breach of contract due to non-timely payment of November and December 2013 principal amounts owed, which were paid as of March 31, 2014, and the occurrence of a change in control as a result of the Merger. The bank sought full payment of principal and interest owed. In April 2014, the Company entered into a settlement arrangement with the bank whereby the bank dismissed this case in exchange for payment of $124,000 that was applied towards principal and unpaid fees along with advance loan principal and interest through July 2014. From August 2014 to March 31, 2015, in exchange for payments totaling $90,000, the bank agreed to extend this arrangement through various dates with the last date being March 2015. The bank has not agreed to an additional extension in conjunction with the banks claim of default. On April 29, 2015, the bank filed a claim against the Company alleging breach of the loan agreement, breach of a commercial guaranty by Steve Saleen, Chairman and CEO, and the bank demanded full payment of principal and interest outstanding (see Note 10). (2) Bonds and notes issued on March 1, 2008, 2009 and 2010, payable in full upon one year from issuance. The Bonds accrue interest at 6% per annum and are secured by the personal property of Saleen Signature Cars. As of March 31, 2015 and 2014, respectively, the Bonds were in default due to non-payment. (3) Note payable issued on March 16, 2010 due in full on March 16, 2011. The note accrued interest at 10% per annum and was secured by three vehicles held in inventory by Saleen Signature Cars. On June 7, 2013, the Company entered into a Settlement Agreement and Mutual General Release by canceling this note and issuing a new unsecured 6% note payable due on or before August 19, 2013. The note was in default as of March 31, 2015 and 2014 due to non-payment. (4) Non-interest bearing note payable dated January 25, 2013 due in full on October 25, 2013 or earlier upon the occurrence of certain events. The note is secured by certain intellectual property of the Company. The note was in default as of March 31, 2014 due to non-payment. In February 2015, the Company entered into a Settlement Agreement and Mutual General Release with this note holder whereby the Company agreed to issue 2,272,727 shares of its Common Stock at a price of $0.022 per share, or $50,000, in exchange for cancellation of all amounts owed and a mutual general release. The Company recognized a loss on settlement of $7,235 that is reflected in the Statement of Operations during the year ended March 31, 2015 to account for the difference between the fair value of the common shares issued and the amount recorded owed as of the date of settlement. (5) As of March 31, 2014, the Company was indebted on a $317,500 subordinated 6% bond and a $200,000 10% note payable. On May 7, 2014, the Company, along with its subsidiaries and Steve Saleen, Chairman and CEO, entered into a Settlement Agreement and Mutual Release (the Settlement Agreement) with Thomas Del Franco and Jason B. Cruz (the Del Franco Parties), pursuant to which the Del Franco Parties agreed to fully and finally settle a claim filed against the Company for outstanding Bond and note payables to Thomas Del Franco, which consisted of a Bond and note payable of $317,500 and $200,000, respectively, and unpaid interest of $187,535 in exchange for (1) the Companys payment to Mr. Del Franco of $250,000 (the Settlement Payment) and (2) issuance of 2,250,000 shares of the Companys Common Stock (the Settlement Shares and together with the Settlement Payment, the Settlement Amount). The Settlement Shares had a value of $382,500 based on the closing price of the Companys Common Stock on May 7, 2014 of $0.17/share. The parties to the Settlement Agreement also agreed to release each other from all claims arising from their prior business dealings. The Del Franco Parties have agreed to a contractual restriction on the sale of the Settlement Shares whereby for a period of 12 months from and after the expiration of any applicable restricted periods imposed by applicable federal and state securities laws and regulations, including Rule 144 under the Securities Act of 1933, as amended (the Securities Act), the Del Franco Parties will not offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, more than 200,000 of the Settlement Shares in any given calendar month. The Company recognized a gain on settlement of $72,265 in the Statement of Operations during the year ended March 31, 2015 to account for the difference between the fair value of the common shares issued and the amount recorded as of the date of settlement. (6) As of March 31, 2014, the Company had outstanding $100,000 and $20,000 unsecured 10% notes payable. In June 2014, the Company entered into a Settlement Agreement and Mutual Release agreement with Jim Marsh American Corporation (Marsh) for one of the notes that had an outstanding principal and interest of $100,000 and $53,374, respectively, in exchange for (1) issuance of 800,000 shares of its Common Stock and (2) cash payment of $35,000. The Company issued the common shares in June 2014 and determined the value to be $112,000, which was based on the value of the Common Stock of $0.14 as of the date of settlement. The remaining cash payment of $35,000 was unpaid and was included in notes payable as of March 31, 2015. In addition, another separate note for $20,000 remains outstanding as of March 31, 2015 and is in default due to non-payment. (7) Note payable issued on March 25, 2015 bearing interest at a rate of 6% per annum. The note was secured by a vehicle provided to the borrower by the Company and was due on demand after 60 days following the date the secured vehicle was returned to the Company. In May 2015, the borrower agreed to cancel this note and convert the then principal and interest outstanding into a convertible note under the same terms as the 3% Senior secured convertible notes discussed in Note 5. In June 2015, the Company entered into an intellectual property agreement with the note holder. In connection with this agreement, the note was cancelled. See Note 11 for further discussion. |
Notes Payable to Related Part24
Notes Payable to Related Parties (Tables) | 12 Months Ended |
Mar. 31, 2015 | |
Debt Disclosure [Abstract] | |
Schedule of Notes Payable Secured and Unsecured Related Parties | Notes payable to related parties are as follows: March 31, 2015 March 31, 2014 Unsecured note payable to a stockholder, due on April 1, 2014, currently in default. $ 102,000 $ 102,000 Unsecured note payable to a stockholder, interest at 10% per annum payable at various maturity dates, settled in April 2014. (1) 32,452 Unsecured payable to a stockholder at 10% per annum, payable on demand 165,000 Unsecured $100,000 revolving promissory note to a stockholder, interest at 10% per annum payable in full in November 2014. (2) 75,000 Total notes payable, related parties $ 267,000 $ 209,452 (1) Unsecured note payable to a related party issued on November 3, 2008 for original principal of $60,000 bearing interest at 10% per annum and due in full on February 10, 2009. In April 2014, the Company entered into a Settlement Agreement and Mutual General Release with this note holder whereby it issued 172,060 shares of its Common Stock with a fair value of $38,191 as settlement of the note payable of $32,452 and unpaid interest of $1,960. In addition, the Company also granted the note holder 355,460 shares of common stock with a fair value of along with a five-year warrant to purchase 527,520 shares of its Common Stock at an exercise price of $0.15 per share. The loss on the settlement of this note of $153,754 was provided for and accrued for as of March 31, 2014 as part of Accounts to be settled by issuance of equity securities in the accompanying balance sheet. (2) In January 2015, the note holder and the Company agreed to cancel this revolver and role the then principal and interest outstanding of $98,708 into a convertible note under the same terms as the 3% Senior secured convertible notes discussed in Note 5. |
Convertible Notes Payable (Tabl
Convertible Notes Payable (Tables) | 12 Months Ended |
Mar. 31, 2015 | |
Debt Disclosure [Abstract] | |
Schedule of Senior Secured Convertible Notes Payable | Convertible notes are comprised as follows: March 31, 2015 March 31, 2014 3% Senior secured convertible notes payable to a private accredited investor group, convertible at $0.075 per share, subject to adjustment, $2,001,720 due in June 2017 and $499,892 due in January 2019. $ 2,501,612 $ 2,586,732 7% Unsecured convertible notes payable to private accredited investor group, convertible into 82,484,267 shares of Common Stock (including accrued interest) as of March 31, 2015, interest accrued at 7% per annum, notes mature in March 2017 2,200,000 2,250,000 Unsecured convertible notes payable to eight separate private accredited investors, convertible into 35,782,732 shares of Common Stock (including accrued interest) as of March 31, 2015, interest accrued at 8% to 12% per annum, notes mature on various dates from April 2015 to December 2016, in default 618,225 5,319,837 4,836,732 Less: discount on notes payable (1,836,828 ) (3,498,981 ) Notes payable, net of discount 3,483,009 1,337,751 Less: notes payable, current (267,332 ) Notes payable, long-term $ 3,215,677 $ 1,337,751 |
Summary of Convertible Notes Payable | The aggregate future obligations under the Convertible Notes Payable herein and notes payable described in Notes 3 and 4 are as follows: Year Ending March 31, Amount 2016 $ 1,556,974 2017 4,201,720 2018 - 2019 499,893 2020 $ 6,258,587 |
Derivative Liability (Tables)
Derivative Liability (Tables) | 12 Months Ended |
Mar. 31, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Liabilities | The derivative liabilities were valued at the following dates using a probability weighted-average Black-Scholes-Merton model with the following assumptions: March 31, 2015 September to December, 2014 (Dates of Inception) June 17, 2014 (Note Amendment and Restatement Date) March 31, 2014 Conversion feature: Risk-free interest rate 0.04 1.33 % 0.02 % 0.02 % 0.05 % Expected volatility 179 % 124 139 % 106 % 100 % Expected life (in years) .2 1.6 years .75 to 2.0 years 3 years .25 years Expected dividend yield Fair Value: Conversion feature $ 1,268,588 $ 1,306,455 $ 3,908,950 $ 5,032,786 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Mar. 31, 2015 | |
Related Party Transactions [Abstract] | |
Amounts of Accounts Payable to Related Parties | The amounts of accounts payable to related parties as of March 31, 2015 and 2014 are as follows: Related Party: March 31, 2015 March 31, 2014 Steve Saleen (a) $ 223,455 $ 100,000 Michaels Law Group (b) 23,954 Top Hat Capital (c) 62,500 25,000 Crystal Research (d) 6,343 Molly Saleen, Inc. (e) 34,214 23,580 $ 326,512 $ 172,534 (a) During the year ended March 31, 2015, the Company incurred $125,654 in officers salary expense that is due and payable to its Director, Chairman and CEO, Mr. Steve Saleen. As of March 31, 2015 and 2014 the Company owed $223,455 and $100,000, respectively, to Mr. Saleen for his unpaid officers salary. In March 2014, Mr. Saleen agreed to forgive $353,787 of amounts owed for loans given by Mr. Saleen to the Company and unpaid salary, which the Company recognized as a gain and offset to settlement expenses in the Statement of Operations. In June 2015, the Company issued 220,000 shares of Super Voting Preferred Stock for payment of $220,000 owed to Mr. Saleen (see Note 11). (b) During the year ended March 31, 2015 and 2014, the Company incurred $69,418 and $365,251, respectively, in General Counsel Services and legal fees expense with Michaels Law Group, a firm owned by a former Director and General Counsel, Mr. Jonathan Michaels. In January 2015, the Company entered into a Fee Reduction Agreement with Michaels Law Group whereby Michaels Law Group reduced the amount owed to $75,000 and the Company issued 2,500,000 shares of Common Stock to Michaels Law Group as full payment. The value of the Common Stock issued of $75,000 was based on a fair value of $0.03 per share. During the year ended March 31, 2015 the Company paid $550 to Michaels Law Group. In March 2014, the Company entered into a Retainer Agreement whereby the Company issued 1,447,500 shares of Common Stock and five year warrants to purchase 1,447,500 shares of Common Stock at an exercise price of $0.15 per share along with cash of $36,459 in exchange for amounts owed through February 2014. The value of the Common Stock issued was $405,300 based on a stock price of $0.28 on date of settlement. The Company valued the warrants at $332,491 using the Black-Scholes option pricing model using the following assumptions: (i) fair market value of stock of $0.28; (ii) dividend yield of 0%; (iii) expected volatility of 100%; (iv) risk free rate of 1.75% and (v) expected term of 5 years. The Company recognized a loss of $521,558 included in settlement expenses in the Statement of Operations for the year ended March 31, 2014 based on the difference between the value of the common shares and stock warrants issued plus $36,459 cash paid and the amount owed of $252,692. During the year ended March 31, 2014, the Company paid $110,000 to Michaels Law Group. As of March 31, 2014, $23,954 was payable to Michaels Law Group services for rendered. (c) During the year ended March 31, 2015 and 2014, the Company incurred $50,000 and $35,000, respectively, of which the Company paid $12,500 and $10,000, respectively, during the years ended March 31, 2015 and 2014, in investment advisor and research services from Top Hat Capital, whose co-founder and Managing Partner, Jeffrey Kraws, is a Director of the Company. As of March 31, 2015 and 2014, $62,500 and $25,000, respectively, was payable to TopHat Capital for these services. (d) During the year ended March 31 2015, the Company incurred and paid $31,343 and $25,000, respectively, for research report services to Crystal Research Associates, whose co-founder and Chief Executive Officer, Jeffrey Kraws, is a Director of the Company. As of March 31, 2015, $6,343 was payable to Crystal Research Associates for these services. (e) During the year ended March 31, 2015 and 2014, the Company purchased $12,650 and $43,325, respectively, of which the Company paid $2,016 and $12,650, respectively, during the years ended March 31, 2015 and 2014, in purchases of apparel and accessories from Molly Saleen, Inc. dba Mollypop. Molly Saleen, the Chief Executive Officer of Mollypop, is the daughter of Steve Saleen, the Companys Chief Executive Officer and President. As of March 31, 2015 and 2014, $34,214 and $23,580, respectively, was outstanding. On June 22, 2015, the Company issued 19,077.777 shares of Super Voting Preferred Stock for payment of $34,214 outstanding (see Note 11). |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Mar. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Schedule of Tax Benefits Loss Carry-forwards Valuation Allowance | Accordingly, the potential tax benefits of the loss carry forwards are offset by a valuation allowance of the same amount. March 31, 2015 March 31, 2014 Deferred income tax asset: Net operating loss carry forward $ 5,800,000 $ 4,773,000 Valuation allowance (5,800,000 ) (4,773,000 ) Net deferred income tax asset $ $ |
Schedule of Effective Income Tax Rate Reconciliation | Reconciliation of the effective income tax rate to the U.S. statutory rate is as follows: March 31, 2015 March 31, 2014 Tax expense at the U.S. statutory income tax (34.00 )% (34.00 )% State tax net of federal tax benefit (5.80 )% (5.80 )% Increase in the valuation allowance 39.8 % 39.8 % Effective tax rate % % |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Mar. 31, 2015 | |
Equity [Abstract] | |
Schedule of Stock Option Plan Activity | Stock option activity is set forth below: Number of Shares Weighted Average Exercise Price per Share Aggregate Intrinsic Value Weighted-Average Remaining Contractual Term (in years) Balance at March 31, 2014 $ $ Options granted during the period 14,104,000 0.10 Options cancelled during the period 645,000 0.10 Options exercised during the period Balance at March 31, 2015 13,459,000 0.10 $ 0 9.67 Exercisable at March 31, 2015 7,271,333 0.10 $ 0 9.47 Expected to vest after March 31, 2015 5,826,793 0.10 $ 0 9.47 |
Summary of Warrant Activity | The following summarizes warrant activity for the Company during the year ended March 31, 2015: Warrants Weighted Average Weighted Average Outstanding March 31, 2013 Issued during the period 11,252,245 0.15 4.8 Outstanding March 31, 2014 11,252,245 $ 0.15 4.8 Issued during the period 2,110,854 0.15 4.1 Exercised during the period (50,000 ) 0.15 Outstanding March 31, 2015 13,313,099 $ 0.15 3.9 |
Commitments and Contingincies (
Commitments and Contingincies (Tables) | 12 Months Ended |
Mar. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases | The future minimum rental payments required under the non-cancelable operating leases described above as of March 31, 2015 are as follows: Years ending March 31: Lease Commitment 2016 $ 583,671 2017 599,689 2018 512,172 $ 1,695,532 |
Nature of the Business and Si31
Nature of the Business and Significant Accounting Policies (Details Narrative) | Jun. 26, 2013shares | May. 23, 2013USD ($)Investor | Mar. 31, 2015USD ($)mi$ / sharesshares | Mar. 31, 2014USD ($)shares | Jul. 13, 2015USD ($) | Jan. 31, 2014shares | Jan. 13, 2014shares | Mar. 31, 2013USD ($) |
Related Party Transaction [Line Items] | ||||||||
Number of shares issued for conversion | shares | 355,460 | |||||||
Common stock, shares authorized | shares | 500,000,000 | 500,000,000 | 500,000,000 | 500,000,000 | ||||
Preferred stock, shares issued | shares | ||||||||
Preferred stock, shares outstanding | shares | ||||||||
Number of board members | Investor | 3 | |||||||
Number of directors comprising board | Investor | 5 | |||||||
Debt assume, reflected as a cost | $ 39,547 | |||||||
Legal and closing costs | 46,000 | |||||||
Dividend paid to stockholders, reflected as a cost | $ 280,000 | |||||||
Loss from operations | $ 5,321,929 | $ 6,778,111 | ||||||
Net cash provided by operating activities | 2,549,895 | 4,316,576 | ||||||
Stockholders' equity attributable to parent | 9,669,225 | 9,296,629 | $ 4,148,287 | |||||
Working capital deficit | 7,050,644 | |||||||
Unpaid payroll and other taxes | 745,503 | |||||||
Outstanding notes payable in default | 933,271 | |||||||
Accounts payable | 1,204,840 | |||||||
Owned on past due rent | 288,900 | |||||||
Payment of principal interest and fees | 369,302 | |||||||
Cash | 143,083 | 1,499,889 | $ 21,000 | $ 4,434 | ||||
Customer deposits received in advance of shipment from order placed by customers | 1,702,656 | |||||||
Royalities advance recevied from an intellectual property agreement | 500,000 | |||||||
Raised issuance of convertible notes | 1,289,409 | |||||||
Issuance of unsecured convertible notes | 638,225 | 250,000 | ||||||
Issuance of notes payable to related parties | 195,000 | 575,000 | ||||||
Fair value of derivative liabilities | 1,268,588 | 5,032,786 | ||||||
Allowance for doubtful accounts | 0 | $ 271,658 | ||||||
Asset impairments | 0 | |||||||
Customer deposits received in advance of shipment | 1,896,568 | $ 193,912 | ||||||
Research and development costs | 747,833 | 766,996 | ||||||
Advertising expenses | 3,679 | 59,993 | ||||||
Sales expenses | 126,185 | 110,275 | ||||||
Marketing expenses | $ 472,969 | $ 414,555 | ||||||
Diluted effect of potentially dilutive stock options | shares | 13,459,000 | |||||||
Diluted effect of potentially dilutive warrants exercisable | shares | 13,313,099 | 11,252,245 | ||||||
Diluted effect of potentially dilutive convertible notes | shares | 66,632,617 | |||||||
Accounts Receivable One [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Percentage of excess customers revenue | 10.00% | 10.00% | ||||||
Customer [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Percentage of excess customers revenue | 11.00% | 10.00% | ||||||
Saleen 302 and 302SC Mustang, Saleen 570 Challenger, and Saleen 620 Camaro [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Standard product warranty accrual, number of miles covered | mi | 36,000 | |||||||
Standard product warranty, period | 3 years | |||||||
Senior Secured Convertible Notes [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Debt instruments interest rate | 3.00% | |||||||
Convertible Notes [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Debt instruments interest rate | 7.00% | |||||||
Molly Saleen Inc [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Reclassified accounts payable | $ 23,580 | |||||||
Other current liabilities to payroll and taxes payable | 139,300 | |||||||
Hollywood Movie Producer [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Contract revenue | 121,500 | |||||||
Promotional Trade Discount Expenses Reclassified To Revenue from Sales and Marketing Expenses [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Reclassified trade discount expenses | 172,661 | |||||||
Saleen Automotive [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Percentage of beneficial ownership of common stock | 93.00% | |||||||
Super Voting Preferred Stock [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Number of shares issued for conversion | shares | 554,057 | |||||||
Super Voting Preferred Stock [Member] | Saleen Parties [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Number of shares issued for conversion | shares | 341,943 | |||||||
Common Stock [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Number of shares converted | shares | 69,257,125 | |||||||
Stockholders' equity attributable to parent | $ (174,856) | $ (137,710) | ||||||
Common Stock [Member] | Saleen Parties [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Number of shares converted | shares | 42,742,875 | |||||||
Restricted Common Stock [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Stock issued during the period, shares | shares | 1,183,334 | |||||||
Equity issuance price per share | $ / shares | $ 0.15 | |||||||
Stock issued value during period | $ 177,500 |
Nature of the Business and Si32
Nature of the Business and Significant Accounting Policies - Schedule of Inventories (Details) - USD ($) | Mar. 31, 2015 | Mar. 31, 2014 |
Accounting Policies [Abstract] | ||
Parts and chassis | $ 176,718 | $ 183,941 |
Work in process | 298,969 | |
S7 Supercar held for sale | 250,000 | $ 250,000 |
Total inventories | $ 725,687 | $ 433,941 |
Nature of the Business and Si33
Nature of the Business and Significant Accounting Policies - Schedule of Changes in Product Warranty Accrual (Details) - USD ($) | 12 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Accounting Policies [Abstract] | ||
Balance at Beginning of Fiscal Year | $ 20,000 | |
Warranty Expenditures | (7,077) | $ (16,763) |
Provision for Estimated Warranty Cost | 27,077 | 36,763 |
Balance at End of Fiscal Year | $ 20,000 | $ 20,000 |
Nature of the Business and Si34
Nature of the Business and Significant Accounting Policies - Schedule of Estimated Useful Lives (Details) | 12 Months Ended |
Mar. 31, 2015 | |
Computer Equipment And Software [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 3 years |
Furniture [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 3 years |
Machinery [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 3 years |
Machinery [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 10 years |
Tooling [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 10 years |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | 12 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation and amortization expense | $ 181,983 | $ 97,061 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) | Mar. 31, 2015 | Mar. 31, 2014 |
Property, Plant and Equipment [Abstract] | ||
Tooling | $ 641,324 | $ 470,399 |
Equipment | 321,189 | 264,837 |
Leasehold improvements | 203,310 | 203,312 |
Total, cost | 165,823 | 938,548 |
Accumulated depreciation and amortization | (573,707) | (391,724) |
Total Property and Equipment | $ 592,116 | $ 546,824 |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) - USD ($) | May. 07, 2014 | Mar. 31, 2015 | Feb. 28, 2015 | Apr. 30, 2014 | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 25, 2015 | Aug. 19, 2013 | Apr. 13, 2012 |
Payment of loans payable | $ 124,000 | ||||||||
Debt settlement amount | $ 6,258,587 | $ 6,258,587 | $ 45,500 | ||||||
Loss of statement of operations | (5,321,929) | $ (6,778,111) | |||||||
Outstanding debt amount | 2,501,612 | 2,501,612 | |||||||
Payments of notes payable | 349,043 | 318,558 | |||||||
Interest payable | $ 187,535 | $ 387,005 | $ 387,005 | 380,257 | |||||
Repayment of related party debt | $ 703,245 | ||||||||
Equity issuance price per share | $ 0.15 | $ 0.15 | |||||||
Gain on settlement of debt | $ 153,754 | ||||||||
Thomas Del Franco [Member] | |||||||||
Repayment of related party debt | $ 250,000 | ||||||||
Issuance of common stock for notes payable | 2,250,000 | ||||||||
Issuance of common stock for notes payable value | $ 382,500 | ||||||||
Equity issuance price per share | $ 0.17 | ||||||||
Maximum limit of settlement shares issuance during period | 200,000 | ||||||||
Settlement And Mutual General Release Agreement [Member] | Marsh [Member] | |||||||||
Outstanding debt amount | $ 100,000 | 100,000 | |||||||
Interest payable | $ 53,374 | $ 53,374 | |||||||
Equity issuance price per share | $ 0.14 | $ 0.14 | |||||||
Settlement And Mutual General Release Agreement [Member] | Marsh [Member] | |||||||||
Repayment of related party debt | $ 35,000 | ||||||||
Issuance of common stock for notes payable | 800,000 | ||||||||
Issuance of common stock for notes payable value | $ 112,000 | ||||||||
Bond [Member] | |||||||||
Debt instruments interest rate | 6.00% | 6.00% | |||||||
Notes Payable [Member] | |||||||||
Debt instruments interest rate | 10.00% | 10.00% | 6.00% | ||||||
Number of common stock shares conversation of outstanding debt | 2,272,727 | ||||||||
Common stock note price per share | $ 0.022 | ||||||||
Exchange for cancellation of all amounts owed and mutual general release | $ 50,000 | ||||||||
Unsecured Notes Payable [Member] | |||||||||
Debt instruments interest rate | 6.00% | ||||||||
Subordinated 6% Bond [Member] | |||||||||
Debt instruments interest rate | 6.00% | ||||||||
Outstanding debt amount | $ 317,500 | ||||||||
10% Notes Payable [Member] | |||||||||
Debt instruments interest rate | 10.00% | ||||||||
Loss of statement of operations | $ 7,235 | ||||||||
Outstanding debt amount | 200,000 | ||||||||
$100,000 Unsecured 10% Notes Payable [Member] | |||||||||
Outstanding debt amount | 100,000 | ||||||||
$20,000 Unsecured 10% Notes Payable [Member] | |||||||||
Outstanding debt amount | $ 20,000 | ||||||||
Other Notes Payable [Member] | |||||||||
Outstanding debt amount | $ 20,000 | $ 20,000 | |||||||
Unpaid Remaining cash payments | $ 35,000 | $ 35,000 | |||||||
Senior Secured Convertible Notes [Member] | |||||||||
Debt instruments interest rate | 3.00% | 3.00% | |||||||
August 2014 to March 31, 2015 [Member] | |||||||||
Debt settlement amount | $ 90,000 |
Notes Payable - Schedule of Sec
Notes Payable - Schedule of Secured and Unsecured Notes Payable (Details) - USD ($) | Mar. 31, 2015 | Mar. 31, 2014 | |
Total notes payable | $ 671,750 | $ 1,275,774 | |
Notes Payable One [Member] | |||
Total notes payable | [1] | 358,704 | 442,479 |
Notes Payable Two [Member] | |||
Total notes payable | [2] | 97,000 | 97,000 |
Notes Payable Three [Member] | |||
Total notes payable | [3] | $ 61,046 | 61,046 |
Notes Payable Four [Member] | |||
Total notes payable | [4] | 37,749 | |
Notes Payable Five [Member] | |||
Total notes payable | [5] | 517,500 | |
Notes Payable Six [Member] | |||
Total notes payable | [6] | $ 55,000 | $ 120,000 |
Notes Payable Seven [Member] | |||
Total notes payable | [7] | $ 100,000 | |
[1] | On February 6, 2014, Saleen Signature Cars received a Complaint from the bank filed in California Superior Court, Riverside County alleging, among other matters, breach of contract due to non-timely payment of November and December 2013 principal amounts owed, which were paid as of March 31, 2014, and the occurrence of a change in control as a result of the Merger. The bank sought full payment of principal and interest owed. In April 2014, the Company entered into a settlement arrangement with the bank whereby the bank dismissed this case in exchange for payment of $124,000 that was applied towards principal and unpaid fees along with advance loan principal and interest through July 2014. From August 2014 to March 31, 2015, in exchange for payments totaling $90,000, the bank agreed to extend this arrangement through various dates with the last date being March 2015. The bank has not agreed to an additional extension in conjunction with the bank's claim of default. On April 29, 2015, the bank filed a claim against the Company alleging breach of the loan agreement, breach of a commercial guaranty by Steve Saleen, Chairman and CEO, and the bank demanded full payment of principal and interest outstanding (see Note 10). | ||
[2] | Bonds and notes issued on March 1, 2008, 2009 and 2010, payable in full upon one year from issuance. The Bonds accrue interest at 6% per annum and are secured by the personal property of Saleen Signature Cars. As of March 31, 2015 and 2014, respectively, the Bonds were in default due to non-payment. | ||
[3] | Note payable issued on March 16, 2010 due in full on March 16, 2011. The note accrued interest at 10% per annum and was secured by three vehicles held in inventory by Saleen Signature Cars. On June 7, 2013, the Company entered into a Settlement Agreement and Mutual General Release by canceling this note and issuing a new unsecured 6% note payable due on or before August 19, 2013. The note was in default as of March 31, 2015 and 2014 due to non-payment. | ||
[4] | Non-interest bearing note payable dated January 25, 2013 due in full on October 25, 2013 or earlier upon the occurrence of certain events. The note is secured by certain intellectual property of the Company. The note was in default as of March 31, 2014 due to non-payment. In February 2015, the Company entered into a Settlement Agreement and Mutual General Release with this note holder whereby the Company agreed to issue 2,272,727 shares of its Common Stock at a price of $0.022 per share, or $50,000, in exchange for cancellation of all amounts owed and a mutual general release. The Company recognized a loss on settlement of $7,235 that is reflected in the Statement of Operations during the year ended March 31, 2015 to account for the difference between the fair value of the common shares issued and the amount recorded owed as of the date of settlement. | ||
[5] | As of March 31, 2014, the Company was indebted on a $317,500 subordinated 6% bond and a $200,000 10% note payable. On May 7, 2014, the Company, along with its subsidiaries and Steve Saleen, Chairman and CEO, entered into a Settlement Agreement and Mutual Release (the "Settlement Agreement") with Thomas Del Franco and Jason B. Cruz (the "Del Franco Parties"), pursuant to which the Del Franco Parties agreed to fully and finally settle a claim filed against the Company for outstanding Bond and note payables to Thomas Del Franco, which consisted of a Bond and note payable of $317,500 and $200,000, respectively, and unpaid interest of $187,535 in exchange for (1) the Company’s payment to Mr. Del Franco of $250,000 (the “Settlement Payment”) and (2) issuance of 2,250,000 shares of the Company’s Common Stock (the “Settlement Shares” and together with the Settlement Payment, the “Settlement Amount”). The Settlement Shares had a value of $382,500 based on the closing price of the Company’s Common Stock on May 7, 2014 of $0.17/share. The parties to the Settlement Agreement also agreed to release each other from all claims arising from their prior business dealings. The Del Franco Parties have agreed to a contractual restriction on the sale of the Settlement Shares whereby for a period of 12 months from and after the expiration of any applicable restricted periods imposed by applicable federal and state securities laws and regulations, including Rule 144 under the Securities Act of 1933, as amended (the "Securities Act"), the Del Franco Parties will not offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, more than 200,000 of the Settlement Shares in any given calendar month. The Company recognized a gain on settlement of $72,265 in the Statement of Operations during the year ended March 31, 2015 to account for the difference between the fair value of the common shares issued and the amount recorded as of the date of settlement. | ||
[6] | As of March 31, 2014, the Company had outstanding $100,000 and $20,000 unsecured 10% notes payable. In June 2014, the Company entered into a Settlement Agreement and Mutual Release agreement with Jim Marsh American Corporation ("Marsh") for one of the notes that had an outstanding principal and interest of $100,000 and $53,374, respectively, in exchange for (1) issuance of 800,000 shares of its Common Stock and (2) cash payment of $35,000. The Company issued the common shares in June 2014 and determined the value to be $112,000, which was based on the value of the Common Stock of $0.14 as of the date of settlement. The remaining cash payment of $35,000 was unpaid and was included in notes payable as of March 31, 2015. In addition, another separate note for $20,000 remains outstanding as of March 31, 2015 and is in default due to non-payment. | ||
[7] | Note payable issued on March 25, 2015 bearing interest at a rate of 6% per annum. The note was secured by a vehicle provided to the borrower by the Company and was due on demand after 60 days following the date the secured vehicle was returned to the Company. In May 2015, the borrower agreed to cancel this note and convert the then principal and interest outstanding into a convertible note under the same terms as the 3% Senior secured convertible notes discussed in Note 5. In June 2015, the Company entered into an intellectual property agreement with the note holder. In connection with this agreement, the note was cancelled. See Note 11 for further discussion. |
Notes Payable - Schedule of S39
Notes Payable - Schedule of Secured and Unsecured Notes Payable (Details) (Parenthetical) | Apr. 13, 2012 | Mar. 31, 2015 | Mar. 31, 2014 |
Debt instruments maturity date | Aug. 31, 2014 | ||
Notes Payable One [Member] | |||
Debt instruments maturity date | Mar. 31, 2015 | Mar. 31, 2015 | |
Notes Payable Two [Member] | |||
Debt instruments interest rate | 6.00% | 6.00% | |
Notes Payable Three [Member] | |||
Debt instruments interest rate | 6.00% | 6.00% | |
Debt instruments maturity date | Mar. 16, 2010 | Mar. 16, 2010 | |
Notes Payable Four [Member] | |||
Debt instruments maturity date | Oct. 25, 2013 | Oct. 25, 2013 | |
Notes Payable Six [Member] | |||
Debt instruments interest rate | 10.00% | 10.00% | |
Debt instruments maturity date | Mar. 31, 2010 | Mar. 31, 2010 | |
Notes Payable Seven [Member] | |||
Debt instruments interest rate | 6.00% | 6.00% |
Notes Payable to Related Part40
Notes Payable to Related Parties (Details Narrative) - Settlement Agreement Domain - USD ($) | Apr. 13, 2012 | Nov. 03, 2008 | Mar. 31, 2015 | Mar. 31, 2014 |
Related Party Transaction [Line Items] | ||||
Note payable | $ 671,750 | $ 1,275,774 | ||
Debt principal amount | $ 585,012 | |||
Debt instrument maturity date | Aug. 31, 2014 | |||
Issuance of warrants to purchase of common stock | 527,520 | |||
Term of Warrant | 5 years | |||
Common stock issued | $ 172,060 | |||
Fair value of common stock | 38,191 | |||
Notes payable | 32,452 | |||
Unpaid interest | $ 1,960 | |||
Stock issued to notes holders | 355,460 | |||
Equity issuance price per share | $ 0.15 | |||
Loss on settlement of debt | $ 153,754 | |||
January 2015 [Member] | ||||
Related Party Transaction [Line Items] | ||||
Debt instruments interest rate | 3.00% | |||
Debt principal amount | $ 98,708 | |||
Unsecured Notes Payable [Member] | ||||
Related Party Transaction [Line Items] | ||||
Note payable | $ 60,000 | |||
Debt instruments interest rate | 10.00% | |||
Debt instrument maturity date | Feb. 10, 2009 |
Notes Payable to Related Part41
Notes Payable to Related Parties - Schedule of Notes Payable Secured and Unsecured Related parties (Details) - USD ($) | Mar. 31, 2015 | Mar. 31, 2014 | |
Current portion of notes payable to Related Parties | $ 267,000 | $ 209,452 | |
Unsecured Note Payable To a Stockholder, Due on April 1, 2014, Currently in Default [Member] | |||
Current portion of notes payable to Related Parties | $ 102,000 | 102,000 | |
Unsecured Note Payable To a Stockholder, Interest At 10% Per Annum Payable At Various Maturity Dates, Settled in April 2014 [Member] | |||
Current portion of notes payable to Related Parties | [1] | $ 32,452 | |
Unsecured Payable To A Stockholder At 10% Per Annum, Payable on Demand [Member] | |||
Current portion of notes payable to Related Parties | $ 165,000 | ||
Unsecured $100,000 Revolving Promissory Note to a Stockholder, Interest At 10% Per Annum Payable in Full on November 2014 [Member] | |||
Current portion of notes payable to Related Parties | [2] | $ 75,000 | |
[1] | Unsecured note payable to a related party issued on November 3, 2008 for original principal of $60,000 bearing interest at 10% per annum and due in full on February 10, 2009. In April 2014, the Company entered into a Settlement Agreement and Mutual General Release with this note holder whereby it issued 172,060 shares of its Common Stock with a fair value of $38,191 as settlement of the note payable of $32,452 and unpaid interest of $1,960. In addition, the Company also granted the note holder 355,460 shares of common stock with a fair value of along with a five-year warrant to purchase 527,520 shares of its Common Stock at an exercise price of $0.15 per share. The loss on the settlement of this note of $153,754 was provided for and accrued for as of March 31, 2014 as part of Accounts to be settled by issuance of equity securities in the accompanying balance sheet. | ||
[2] | In January 2015, the note holder and the Company agreed to cancel this revolver and role the then principal and interest outstanding of $98,708 into a convertible note under the same terms as the 3% Senior secured convertible notes discussed in Note 5. |
Notes Payable to Related Part42
Notes Payable to Related Parties - Schedule of Notes Payable Secured and Unsecured Related parties (Details) (Parenthetical) - USD ($) | Apr. 13, 2012 | Mar. 31, 2015 | Mar. 31, 2014 |
Debt instrument maturity date | Aug. 31, 2014 | ||
Unsecured Note Payable To a Stockholder, Due on April 1, 2014, Currently in Default [Member] | |||
Debt instrument maturity date | Apr. 1, 2014 | Apr. 1, 2014 | |
Unsecured Note Payable To a Stockholder, Interest At 10% Per Annum Payable At Various Maturity Dates, Settled in April 2014 [Member] | |||
Debt instruments interest rate | 10.00% | 10.00% | |
Unsecured Payable To A Stockholder At 10% Per Annum, Payable on Demand [Member] | |||
Debt instruments interest rate | 10.00% | 10.00% | |
Unsecured $100,000 Revolving Promissory Note to a Stockholder, Interest At 10% Per Annum Payable in Full on November 2014 [Member] | |||
Debt instruments interest rate | 10.00% | 10.00% | |
Debt instrument maturity date | Nov. 30, 2014 | Nov. 30, 2014 | |
Unsecured Debt | $ 100,000 | $ 100,000 |
Convertible Notes Payable (Deta
Convertible Notes Payable (Details Narrative) | Jan. 26, 2015USD ($)Buildings$ / shares | Jan. 23, 2015USD ($)$ / shares | Nov. 30, 2013USD ($)Buildings | Jun. 26, 2013USD ($)Buildings | Jun. 30, 2014USD ($)$ / sharesshares | Apr. 30, 2014USD ($) | Mar. 31, 2014USD ($) | Dec. 31, 2014USD ($)Buildings | Mar. 31, 2015USD ($)$ / sharesshares | Mar. 31, 2014USD ($) |
Debt principal amount | $ 585,012 | |||||||||
Conversion of convertible debt amount | $ 11,942 | |||||||||
Number of stock shares issued for exchange | shares | 527,520 | |||||||||
Beneficial conversion feature associated with convertible debt financing | $ 77,483 | $ 327,483 | ||||||||
Proceeds from issuance of note | 100,000 | |||||||||
Loss on extinguishment of convertible debt | 1,257,468 | |||||||||
Fair value of conversion feature associated with debt extinguishment | 572,493 | |||||||||
Repayments of bank debt | $ 124,000 | |||||||||
Amortization of debt discount | 1,942,885 | $ 411,675 | ||||||||
Unamortized of valuation discount amount | $ 1,248,984 | $ 74,021 | 1,248,984 | |||||||
Conversion of debt, shares issued | shares | 8,032,186 | |||||||||
Outstanding debt amount | $ 2,501,612 | |||||||||
Convertible notes outstanding | 1,337,751 | 3,483,009 | 1,337,751 | |||||||
Derivative liabilities | 5,032,786 | 1,268,588 | 5,032,786 | |||||||
Steve Saleen [Member] | May 2015 [Member] | ||||||||||
Repayments of bank debt | $ 369,302 | |||||||||
Percentage of outstanding principal plus | 120.00% | |||||||||
Percentage of accrued and unpaid interest plus | 100.00% | |||||||||
Accrued debt interest rate | 12.00% | |||||||||
3% Senior Secured Convertible Notes [Member] | ||||||||||
Debt principal amount | $ 499,892 | $ 3,000,000 | ||||||||
Number of investors | Buildings | 2 | 1 | 12 | |||||||
Debt instrument, maturity period | 4 years | |||||||||
Debt instruments interest rate | 3.00% | |||||||||
Debt issuance date description | June 2017 and January 2019 | |||||||||
Conversion of convertible debt amount | $ 98,708 | |||||||||
Common stock conversion price per share | $ / shares | $ 0.075 | |||||||||
3% Senior Secured Convertible Notes [Member] | First Amendment [Member] | ||||||||||
Number of stock shares issued for exchange | shares | 389,923 | |||||||||
Equity issued for private placements | $ 58,488 | |||||||||
Common stock issuance cost | $ / shares | $ 0.15 | |||||||||
3% Senior Secured Convertible Notes [Member] | Second Amendments [Member] | ||||||||||
Common stock conversion price per share | $ / shares | $ 0.02 | |||||||||
Conversion price equal lesser price per share | $ / shares | $ 0.075 | |||||||||
Percentage of lowest volume weighted average prices | 70.00% | |||||||||
Loss on extinguishment of convertible debt | $ 1,257,468 | |||||||||
Expences on extinguishment of debt | 684,975 | |||||||||
Fair value of conversion feature associated with debt extinguishment | $ 572,493 | |||||||||
7% Unsecured Convertible Notes [Member] | ||||||||||
Debt principal amount | 250,000 | $ 2,250,000 | $ 300,000 | $ 2,250,000 | ||||||
Debt instrument, maturity period | 3 years | |||||||||
Debt instruments interest rate | 7.00% | 7.00% | ||||||||
Conversion of convertible debt amount | $ 15,808 | |||||||||
Beneficial conversion feature associated with convertible debt financing | $ 250,000 | $ 2,250,000 | $ 1,050,700 | |||||||
Conversion of debt, shares issued | shares | 10,000,000 | |||||||||
Conversion of debt description | Each 7% Note is initially convertible at any time into the Company's Common Stock at a conversion price, which is adjustable to the lower of $0.07 or the three lowest daily volume weighted average prices of the Company's Common Stock during the twenty consecutive trading days immediately preceding any conversion date. However, in no event shall the conversion price be lower than $0.03 per share. In addition, the conversion price adjusts for standard anti-dilution provisions whereby if the Company consummates a reorganization transaction, pays dividends or enters into a stock split of its common shares the conversion price would adjust proportionally. | |||||||||
Convertible debt outstanding amount | $ 2,200,000 | |||||||||
7% Unsecured Convertible Notes [Member] | Steve Saleen [Member] | May 2015 [Member] | ||||||||||
Repayments of bank debt | $ 369,302 | |||||||||
Percentage of outstanding principal plus | 120.00% | |||||||||
Accrued debt interest rate | 24.00% | |||||||||
7% Unsecured Convertible Notes [Member] | First Amendment [Member] | ||||||||||
Common stock conversion price per share | $ / shares | 0.03 | |||||||||
Common stock issuance cost | $ / shares | $ 0.15 | |||||||||
Issuance of stock for exchange, value | $ 53,571 | |||||||||
Issuance of stock for exchange | shares | 357,143 | |||||||||
3 Investors [Member] | ||||||||||
Unsecured debt | $ 2,000,000 | |||||||||
5 Investors [Member] | ||||||||||
Unsecured debt | $ 2,000,000 | |||||||||
Unsecured Convertible Notes [Member] | ||||||||||
Number of investors | Buildings | 8 | |||||||||
Debt issuance date description | April 2015 to December 2016 | |||||||||
Conversion of convertible debt amount | $ 20,000 | |||||||||
Equity issued for private placements | 668,230 | |||||||||
Beneficial conversion feature associated with convertible debt financing | 1,306,455 | |||||||||
Amortization of debt discount | $ 374,661 | |||||||||
Conversion of debt, shares issued | shares | 1,785,714 | |||||||||
Outstanding debt amount | $ 161 | |||||||||
Convertible notes outstanding | $ 618,225 | |||||||||
Conversion of debt description | The principal amount of the Notes along with, at the holders option, any unpaid interest and penalties, are convertible at price per share discounts ranging from 42% 38% of the Companys common stock trading market price during certain time period , as defined in the agreement. Further, the conversion prices are subject to a floor such that the conversion prices will not be less than a certain price, as defined in the agreement, with such floor prices ranging from $0.001 to $0.00005 per share. | |||||||||
Convertible debt outstanding amount | $ 10,600 | $ 618,225 | ||||||||
Proceeds from convertible debt | $ 638,225 | |||||||||
Unsecured Convertible Notes [Member] | Minimum [Member] | ||||||||||
Debt instruments interest rate | 8.00% | |||||||||
Debt default, percentage of increase in original amount owed | 135.00% | |||||||||
Debt non-payment, interest rate increase from date due until paid | 20.00% | |||||||||
Percentage of convertible price discount | 38.00% | |||||||||
Agreement floor price per share | $ / shares | $ 0.00005 | |||||||||
Additional floor price per share | $ / shares | $ 0.00001 | |||||||||
Unsecured Convertible Notes [Member] | Maximum [Member] | ||||||||||
Debt instruments interest rate | 12.00% | |||||||||
Debt default, percentage of increase in original amount owed | 150.00% | |||||||||
Debt non-payment, interest rate increase from date due until paid | 25.00% | |||||||||
Percentage of convertible price discount | 42.00% | |||||||||
Agreement floor price per share | $ / shares | $ 0.001 | |||||||||
Additional floor price per share | $ / shares | $ 0.001 |
Convertible Notes Payable - Sch
Convertible Notes Payable - Schedule of Senior Secured Convertible Notes Payable (Details) - Debt Instrument Name Domain - USD ($) | Mar. 31, 2015 | Mar. 31, 2014 |
Convertible notes payable | $ 5,319,837 | $ 4,836,732 |
Less: discount on notes payable | (1,836,828) | (3,498,981) |
Notes payable, net of discount | 3,483,009 | $ 1,337,751 |
Less: notes payable, current | (267,332) | |
Notes payable, long-term | 3,215,677 | $ 1,337,751 |
3% Senior Secured Convertible Notes [Member] | ||
Convertible notes payable | 2,501,612 | 2,586,732 |
7% Unsecured Convertible Notes [Member] | ||
Convertible notes payable | 2,200,000 | $ 2,250,000 |
Unsecured Convertible Notes [Member] | ||
Convertible notes payable | $ 618,225 |
Convertible Notes Payable - S45
Convertible Notes Payable - Schedule of Senior Secured Convertible Notes Payable (Details) (Parenthetical) - USD ($) | Apr. 13, 2012 | Mar. 31, 2015 | Mar. 31, 2014 |
Debt instrument maturity date | Aug. 31, 2014 | ||
June 2017 [Member] | |||
Caversion value subject to adjustment | $ 2,001,720 | ||
January2019 [Member] | |||
Caversion value subject to adjustment | $ 499,892 | ||
Unsecured Convertible Notes [Member] | Maximum [Member] | |||
Debt instruments interest rate | 8.00% | ||
Unsecured Convertible Notes [Member] | Minimum [Member] | |||
Debt instruments interest rate | 12.00% | ||
3% Senior Secured Convertible Notes [Member] | |||
Debt instruments interest rate | 3.00% | 3.00% | |
Conversion price per share | $ 0.075 | $ 0.075 | |
7% Unsecured Convertible Notes [Member] | |||
Convertible shares of common stock | 82,484,267 | 82,484,267 | |
Debt instruments interest rate | 7.00% | 7.00% | |
Debt instrument maturity date | Mar. 31, 2017 | Mar. 31, 2017 | |
Unsecured Convertible Notes [Member] | |||
Convertible shares of common stock | 35,782,732 | 35,782,732 | |
Unsecured Convertible Notes [Member] | Maximum [Member] | |||
Debt instrument maturity date | Dec. 31, 2016 | ||
Unsecured Convertible Notes [Member] | Minimum [Member] | |||
Debt instrument maturity date | Apr. 30, 2015 |
Convertible Notes Payable - Sum
Convertible Notes Payable - Summary of Convertible Notes Payable (Details) - USD ($) | Mar. 31, 2015 | Apr. 13, 2012 |
Debt Disclosure [Abstract] | ||
2,016 | $ 1,556,974 | |
2,017 | $ 4,201,720 | |
2,018 | ||
2,019 | $ 499,893 | |
2,020 | ||
Convertible Notes Payable | $ 6,258,587 | $ 45,500 |
Derivative Liability (Details N
Derivative Liability (Details Narrative) - USD ($) | Dec. 31, 2014 | Jun. 30, 2014 | Mar. 31, 2015 | Mar. 31, 2014 |
Change in fair value of derivative liabilities | $ 1,111,389 | |||
Gain in extinguishment of derivative liability | $ 50,314 | |||
Secured Convertible Note [Member] | ||||
Change in fair value of derivative liabilities | $ 1,306,455 | |||
Gain in extinguishment of derivative liability | $ 1,268,588 | |||
Secured Convertible Note [Member] | First Amendment [Member] | ||||
Interest percentage of secured convertible note | 3.00% | |||
Change in fair value of derivative liabilities | $ 3,908,950 |
Derivative Liability - Schedule
Derivative Liability - Schedule of Derivative Liabilities (Details) - Merton [Member] - USD ($) | Jun. 17, 2014 | Dec. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2014 |
Risk-free interest rate | 0.02% | 0.02% | 0.05% | |
Expected volatility | 106.00% | 179.00% | 100.00% | |
Expected life (in years) | 3 years | 3 months | ||
Expected dividend yield | ||||
Conversion feature | $ 3,908,950 | $ 1,306,455 | $ 1,268,588 | $ 5,032,786 |
Minimum [Member] | ||||
Risk-free interest rate | 0.04% | |||
Expected volatility | 124.00% | |||
Expected life (in years) | 9 months | 2 months 12 days | ||
Maximum [Member] | ||||
Risk-free interest rate | 1.33% | |||
Expected volatility | 139.00% | |||
Expected life (in years) | 2 years | 1 year 7 months 6 days |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | Jul. 09, 2013 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2014 | |
Amount due to related parties | $ 172,534 | $ 326,512 | $ 172,534 | ||
Amount paid to related parties | $ 703,245 | ||||
Value of shares acquired | |||||
Common stock shares issued price per share | $ 0.15 | ||||
Recognized a loss on settlement expenses | $ 153,754 | ||||
Payment of apparels and accessories | $ 227,277 | $ 303,666 | |||
Number of super voting perferred stock shares issued | 696,000 | 341,943 | |||
Number of common stock shares issued for services | 1,000,000 | ||||
Directors fees expenses | $ 650,351 | ||||
Top Hat Capital [Member] | |||||
Related party transaction amount | 50,000 | $ 35,000 | |||
Amount paid to related parties | 12,500 | 10,000 | |||
Crystal Research [Member] | |||||
Amount paid to related parties | $ 31,343 | 25,000 | |||
Michaels Law Group [Member] | |||||
Amount due to related parties | [1] | 23,954 | 23,954 | ||
General Counsel Services and legal fees | $ 69,418 | 365,251 | |||
Related party transaction amount | $ 550 | $ 110,000 | |||
Common stock shares issued price per share | $ 0.03 | ||||
Michaels Law Group [Member] | Fee Reduction Agreement [Member] | |||||
Related party transaction amount | $ 75,000 | ||||
Issuance of shares during acquisition | 2,500,000 | ||||
Value of shares acquired | $ 75,000 | ||||
Michaels Law Group [Member] | Retainer Agreement [Member] | |||||
Related party transaction amount | $ 252,692 | ||||
Common stock shares issued price per share | $ 0.15 | $ 0.15 | |||
Number of common stock shares issued | 1,447,500 | ||||
Warrants term | 5 years | ||||
Warrants to purchase of shares of common stock | 1,447,500 | ||||
Warrants to purchase of shares of common stock with cash | $ 36,459 | ||||
Number of common stock shares issued for settlement | 405,300 | ||||
Stock price per share | $ 0.28 | 0.28 | |||
Fair value of warrants | $ 332,491 | ||||
Fair market value of stock price per share | $ 0.28 | $ 0.28 | |||
Fair value of dividend yield | 0.00% | ||||
Fair value of volatility rate | 100.00% | ||||
Fair value of risk free rate | 1.75% | ||||
Fair value of expected term (Years) | 5 years | ||||
Recognized a loss on settlement expenses | $ 521,558 | ||||
Issued of common stock and warrants | 36,459 | ||||
Top Hat Capital [Member] | |||||
Amount due to related parties | [2] | $ 25,000 | 62,500 | $ 25,000 | |
Crystal Research [Member] | |||||
Amount due to related parties | [3] | 6,343 | |||
Molly Saleen [Member] | |||||
Amount due to related parties | $ 23,580 | 34,214 | $ 23,580 | ||
Purchases of apparel and accessories | 12,650 | 43,325 | |||
Payment of apparels and accessories | $ 2,016 | 12,650 | |||
Miranda & Associates [Member] | |||||
Related party transaction amount | 259,534 | ||||
Amount paid to related parties | 252,663 | ||||
Miranda & Associates [Member] | Separation Agreement and General Release [Member] | |||||
Related party transaction amount | $ 174,093 | ||||
Common stock shares issued price per share | $ 0.15 | $ 0.15 | |||
Number of common stock shares issued | 1,061,408 | ||||
Warrants term | 5 years | ||||
Warrants to purchase of shares of common stock | 1,061,408 | ||||
Warrants to purchase of shares of common stock with cash | $ 10,000 | ||||
Number of common stock shares issued for settlement | 212,282 | ||||
Stock price per share | 0.20 | $ 0.20 | |||
Fair value of warrants | $ 169,825 | ||||
Fair market value of stock price per share | $ 0.20 | $ 0.20 | |||
Fair value of dividend yield | 0.00% | ||||
Fair value of volatility rate | 100.00% | ||||
Fair value of risk free rate | 1.75% | ||||
Fair value of expected term (Years) | 5 years | ||||
Recognized a loss on settlement expenses | $ 218,014 | ||||
Issued of common stock and warrants | $ 10,000 | ||||
Robert J. Miranda and Jonathan Michaels [Member] | |||||
Number of super voting perferred stock shares issued | 5,277 | ||||
Number of common stock shares issued for services | 659,625 | ||||
Directors fees expenses | $ 250,000 | ||||
Robert J Miranda [Member] | |||||
Number of common stock shares issued for services | 329,811 | ||||
Jonathan Michaels [Member] | |||||
Number of common stock shares issued for services | 329,811 | ||||
June 22, 2015 [Member] | Molly Saleen [Member] | |||||
Number of shares of super voting preferred stock issued for payment of owed | 19,077.777 | ||||
Number of shares of super voting preferred stock issued for payment of owed, value | $ 34,214 | ||||
Mr. Steve Saleen [Member] | |||||
Office compensation | 125,654 | ||||
Amount due to related parties | $ 100,000 | $ 223,455 | $ 100,000 | ||
Forgive of amounts owed for loans | $ 353,787 | ||||
Mr. Steve Saleen [Member] | June 2015 [Member] | |||||
Number of shares of super voting preferred stock issued for payment of owed | 220,000 | ||||
Number of shares of super voting preferred stock issued for payment of owed, value | $ 220,000 | ||||
[1] | During the year ended March 31, 2015 and 2014, the Company incurred $69,418 and $365,251, respectively, in General Counsel Services and legal fees expense with Michaels Law Group, a firm owned by a former Director and General Counsel, Mr. Jonathan Michaels. In January 2015, the Company entered into a Fee Reduction Agreement with Michaels Law Group whereby Michaels Law Group reduced the amount owed to $75,000 and the Company issued 2,500,000 shares of Common Stock to Michaels Law Group as full payment. The value of the Common Stock issued of $75,000 was based on a fair value of $0.03 per share. During the year ended March 31, 2015 the Company paid $550 to Michaels Law Group. In March 2014, the Company entered into a Retainer Agreement whereby the Company issued 1,447,500 shares of Common Stock and five year warrants to purchase 1,447,500 shares of Common Stock at an exercise price of $0.15 per share along with cash of $36,459 in exchange for amounts owed through February 2014. The value of the Common Stock issued was $405,300 based on a stock price of $0.28 on date of settlement. The Company valued the warrants at $332,491 using the Black-Scholes option pricing model using the following assumptions: (i) fair market value of stock of $0.28; (ii) dividend yield of 0%; (iii) expected volatility of 100%; (iv) risk free rate of 1.75% and (v) expected term of 5 years. The Company recognized a loss of $521,558 included in settlement expenses in the Statement of Operations for the year ended March 31, 2014 based on the difference between the value of the common shares and stock warrants issued plus $36,459 cash paid and the amount owed of $252,692. During the year ended March 31, 2014, the Company paid $110,000 to Michaels Law Group. As of March 31, 2014, $23,954 was payable to Michaels Law Group services the rendered. | ||||
[2] | During the year ended March 31, 2015 and 2014, the Company incurred $50,000 and $35,000, respectively, of which the Company paid $12,500 and $10,000, respectively, during the years ended March 31, 2015 and 2014, in investment advisor and research services from Top Hat Capital, whose co-founder and Managing Partner, Jeffrey Kraws, is a Director of the Company. As of March 31, 2015 and 2014, $62,500 and $25,000, respectively, was payable to TopHat Capital for these services. | ||||
[3] | During the year ended March 31 2015, the Company incurred and paid $31,343 and $25,000, respectively, for research report services to Crystal Research Associates, whose co-founder and Chief Executive Officer, Jeffrey Kraws, is a Director of the Company. As of March 31, 2015, $6,343 was payable to Crystal Research Associates for these services. |
Related Party Transactions - Am
Related Party Transactions - Amounts of Accounts Payable to Related Parties (Details) - USD ($) | Mar. 31, 2015 | Mar. 31, 2014 | |
Accounts payable to related parties | $ 326,512 | $ 172,534 | |
Steve Saleen [Member] | |||
Accounts payable to related parties | [1] | $ 223,455 | 100,000 |
Michaels Law Group [Member] | |||
Accounts payable to related parties | [2] | 23,954 | |
Top Hat Capital [Member] | |||
Accounts payable to related parties | [3] | $ 62,500 | $ 25,000 |
Crystal Research [Member] | |||
Accounts payable to related parties | [4] | 6,343 | |
Molly Saleen, Inc [Member] | |||
Accounts payable to related parties | [5] | $ 34,214 | $ 23,580 |
[1] | During the year ended March 31, 2015, the Company incurred $125,654 in officers' salary expense that is due and payable to its Director, Chairman and CEO, Mr. Steve Saleen. As of March 31, 2015 and 2014 the Company owed $223,455 and $100,000, respectively, to Mr. Saleen for his unpaid officers' salary. In March 2014, Mr. Saleen agreed to forgive $353,787 of amounts owed for loans given by Mr. Saleen to the Company and unpaid salary, which the Company recognized as a gain and offset to settlement expenses in the Statement of Operations. In June 2015, the Company issued 220,000 shares of Super Voting Preferred Stock for payment of $220,000 owed to Mr. Saleen (see Note 11). | ||
[2] | During the year ended March 31, 2015 and 2014, the Company incurred $69,418 and $365,251, respectively, in General Counsel Services and legal fees expense with Michaels Law Group, a firm owned by a former Director and General Counsel, Mr. Jonathan Michaels. In January 2015, the Company entered into a Fee Reduction Agreement with Michaels Law Group whereby Michaels Law Group reduced the amount owed to $75,000 and the Company issued 2,500,000 shares of Common Stock to Michaels Law Group as full payment. The value of the Common Stock issued of $75,000 was based on a fair value of $0.03 per share. During the year ended March 31, 2015 the Company paid $550 to Michaels Law Group. In March 2014, the Company entered into a Retainer Agreement whereby the Company issued 1,447,500 shares of Common Stock and five year warrants to purchase 1,447,500 shares of Common Stock at an exercise price of $0.15 per share along with cash of $36,459 in exchange for amounts owed through February 2014. The value of the Common Stock issued was $405,300 based on a stock price of $0.28 on date of settlement. The Company valued the warrants at $332,491 using the Black-Scholes option pricing model using the following assumptions: (i) fair market value of stock of $0.28; (ii) dividend yield of 0%; (iii) expected volatility of 100%; (iv) risk free rate of 1.75% and (v) expected term of 5 years. The Company recognized a loss of $521,558 included in settlement expenses in the Statement of Operations for the year ended March 31, 2014 based on the difference between the value of the common shares and stock warrants issued plus $36,459 cash paid and the amount owed of $252,692. During the year ended March 31, 2014, the Company paid $110,000 to Michaels Law Group. As of March 31, 2014, $23,954 was payable to Michaels Law Group services the rendered. | ||
[3] | During the year ended March 31, 2015 and 2014, the Company incurred $50,000 and $35,000, respectively, of which the Company paid $12,500 and $10,000, respectively, during the years ended March 31, 2015 and 2014, in investment advisor and research services from Top Hat Capital, whose co-founder and Managing Partner, Jeffrey Kraws, is a Director of the Company. As of March 31, 2015 and 2014, $62,500 and $25,000, respectively, was payable to TopHat Capital for these services. | ||
[4] | During the year ended March 31 2015, the Company incurred and paid $31,343 and $25,000, respectively, for research report services to Crystal Research Associates, whose co-founder and Chief Executive Officer, Jeffrey Kraws, is a Director of the Company. As of March 31, 2015, $6,343 was payable to Crystal Research Associates for these services. | ||
[5] | During the year ended March 31, 2015 and 2014, the Company purchased $12,650 and $43,325, respectively, of which the Company paid $2,016 and $12,650, respectively, during the years ended March 31, 2015 and 2014, in purchases of apparel and accessories from Molly Saleen, Inc. dba Mollypop. Molly Saleen, the Chief Executive Officer of Mollypop, is the daughter of Steve Saleen, the Company's Chief Executive Officer and President. As of March 31, 2015 and 2014, $34,214 and $23,580, respectively, was outstanding. On June 22, 2015, the Company issued 19,077.777 shares of Super Voting Preferred Stock for payment of $34,214 outstanding (see Note 11). |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Income Tax Disclosure [Abstract] | ||
Net operating loss carry-forward | $ 19,000,000 | |
Unrecognized tax benefits | ||
Penalties interest expenses |
Income Taxes - Schedule of Tax
Income Taxes - Schedule of Tax Benefits Loss Carry-forwards Valuation Allowance (Details) - USD ($) | Mar. 31, 2015 | Mar. 31, 2014 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carry-forward | $ 5,800,000 | $ 4,773,000 |
Valuation allowance | $ (5,800,000) | $ (4,773,000) |
Net deferred income tax asset |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details) | 12 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Income Tax Disclosure [Abstract] | ||
Tax expense at the U.S. statutory income tax | (34.00%) | (34.00%) |
State tax net of federal tax benefit | (5.80%) | (5.80%) |
Increase in the valuation allowance | 39.80% | 39.80% |
Effective tax rate | 0.00% | 0.00% |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) | Jul. 09, 2013 | Jan. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2014 | Jan. 13, 2014 |
Class of Stock [Line Items] | |||||
Common stock, shares authorized | 500,000,000 | 500,000,000 | 500,000,000 | 500,000,000 | |
Common stock, par value | $ 0.001 | $ 0.001 | |||
Preferred stock, shares authorized | 1,000,000 | 1,000,000 | |||
Preferred stock, par value | $ 0.001 | $ 0.001 | |||
Number of outstanding captial stock shares exchanged for shares of super voting preferred stock | 554,057 | ||||
Number of super voting perferred stock shares issued | 696,000 | 341,943 | |||
Conversion of Super Voting Preferred to Common Stock | 87,000,000 | 125 | |||
Number of common stock shares issued for settlement of accounts payable | 1,285,460 | ||||
Number of common stock value issued for settlement of accounts payable | $ 470,534 | ||||
Reclassified amount of liability | $ 470,534 | ||||
Common stock shares issued price per share | $ 0.15 | ||||
Proceeds from issuance of stock | $ 185,000 | $ 1,312,500 | |||
Shares issued for services | 1,000,000 | ||||
Shares issued for services, value | $ 170,000 | $ 429,831 | |||
Stock compensation expense | $ 650,351 | ||||
Fair market value of the Company's common stock | $ 0.01 | ||||
Unearned compensation | $ 345,000 | ||||
Compensation recognized, weighted average period | 1 year 7 days | ||||
Shares issued as consideration for the amendments of convertible notes, shares | 747,066 | ||||
Shares issued as consideration for the amendments of convertible notes | $ 112,059 | ||||
Common Stock [Member] | |||||
Class of Stock [Line Items] | |||||
Shares issued for services | 1,000,000 | 530,000 | |||
Shares issued for services, value | $ 1,000 | $ 530 | |||
Shares issued as consideration for the amendments of convertible notes, shares | 747,066 | ||||
Shares issued as consideration for the amendments of convertible notes | $ 747 | ||||
Common Stock [Member] | Subscription Agreements [Member] | |||||
Class of Stock [Line Items] | |||||
Shares issued for services, value | $ 223,678 | ||||
Number of common stock shares issued in exchange for extinguishment of amount owned | 7,567,980 | ||||
Number of common stock value issued in exchange for extinguishment of amount owned | $ 168,154 | ||||
Loss on issuance of stock under agreement | $ 55,524 | ||||
Warrant [Member] | |||||
Class of Stock [Line Items] | |||||
Warrants to purchase common stock | 1,183,334 | ||||
Warrant [Member] | Subscription Agreements [Member] | |||||
Class of Stock [Line Items] | |||||
Warrants exercise price, Per share | $ 0.21 | ||||
Shares issued for services, value | $ 82,662 | ||||
Warrants to purchase common stock | 527,520 | ||||
Fair value assumptions of dividend yield percentage | 0.00% | ||||
Fair value assumptions of expected volatility rate | 100.00% | ||||
Fair value assumptions of risk free interest rate | 1.75% | ||||
Fair value assumptions of expected term of life | 5 years | ||||
Notes Payable [Member] | Common Stock [Member] | |||||
Class of Stock [Line Items] | |||||
Shares issued for services | 5,494,787 | ||||
Shares issued for services, value | $ 582,691 | ||||
Convertible Notes Payable [Member] | Common Stock [Member] | |||||
Class of Stock [Line Items] | |||||
Shares issued for services | 19,817,900 | ||||
Shares issued for services, value | $ 932,923 | ||||
Warrant [Member] | |||||
Class of Stock [Line Items] | |||||
Warrants intrinsic value | |||||
Super Voting Preferred Stock [Member] | |||||
Class of Stock [Line Items] | |||||
Shares issued for services | 896,000 | 5,899 | |||
Shares issued for services, value | $ 473,581 | ||||
Super Voting Preferred Stock [Member] | Common Stock [Member] | |||||
Class of Stock [Line Items] | |||||
Shares issued for services | 112,000,000 | 1,000,000 | |||
Shares issued for services, value | $ 170,000 | ||||
Super Voting Preferred Stock [Member] | Restricted Common Stock [Member] | Subscription Agreements [Member] | |||||
Class of Stock [Line Items] | |||||
Common stock shares issued price per share | $ 0.15 | ||||
Proceeds from issuance of stock | $ 1,312,500 | ||||
Shares issued for services | 8,793,337 | ||||
Super Voting Preferred Stock [Member] | Warrant [Member] | Subscription Agreements [Member] | |||||
Class of Stock [Line Items] | |||||
Common stock shares issued price per share | $ 0.15 | ||||
Shares issued for services | 8,793,337 | ||||
Super Voting Preferred Stock [Member] | Notes Payable [Member] | |||||
Class of Stock [Line Items] | |||||
Shares issued for services | 481 | ||||
Value of shares issued as principal | $ 22,803 | ||||
Super Voting Preferred Stock [Member] | Notes Payable [Member] | Common Stock [Member] | |||||
Class of Stock [Line Items] | |||||
Shares issued for services | 521 | ||||
Value of shares issued as interest | $ 24,697 | ||||
Super Voting Preferred Stock [Member] | Accounts Payable [Member] | |||||
Class of Stock [Line Items] | |||||
Shares issued for services | 2,508,908 | ||||
Shares issued for services, value | $ 1,120,382 | ||||
Super Voting Preferred Stock [Member] | Accounts Payable [Member] | Common Stock [Member] | |||||
Class of Stock [Line Items] | |||||
Shares issued for services | 325,128 | ||||
Shares issued for services, value | $ 103,191 | ||||
Super Voting Preferred Stock [Member] | Convertible Notes [Member] | |||||
Class of Stock [Line Items] | |||||
Shares issued for services | 5,553,128 | ||||
Value of shares issued as interest | $ 416,486 | ||||
Research and Development [Member] | |||||
Class of Stock [Line Items] | |||||
Stock compensation expense | 66,067 | ||||
Sales and Marketing [Member] | |||||
Class of Stock [Line Items] | |||||
Stock compensation expense | 268,610 | ||||
General and Administrative Expenses [Member] | |||||
Class of Stock [Line Items] | |||||
Stock compensation expense | $ 315,674 | ||||
Omnibus Incentive Plan [Member] | |||||
Class of Stock [Line Items] | |||||
Grants of stock plans, term description | Grants under the Plan vest and expire based on periods determined by the Administrator, but in no event can the expiration date be later than ten years from the date of grant (five years after the date of grant if the grant is an incentive stock option to an employee who owns more than 10% of the total combined voting power of all classes of the Companys capital stock (a 10% owner). Grants of stock options may be either incentive stock options or nonqualified stock options. The per share exercise price on an option, other than with respect to substitute awards, shall not be less than 100% of the fair market value of the Companys Common Stock on the date the option is granted (110% of the fair market value if the grant is to a 10% owner). | ||||
Shares authorized for issuance and reserved under Plan | 28,905,763 | ||||
Warrant [Member] | |||||
Class of Stock [Line Items] | |||||
Warrants to purchase of shares of common stock | 50,000 | ||||
Proceeds from exercise of warrants | $ 7,500 | ||||
Number of warrants exercisable | 13,313,099 | ||||
Employee And Non-Employees Stock Option Member [Member] | |||||
Class of Stock [Line Items] | |||||
Shares issued for services, value | $ 1,028,417 | ||||
Shares authorized for issuance and reserved under Plan | 14,104,000 | ||||
Stock option vesting period | 3 years | ||||
Stock option expiration period | 10 years | ||||
Employee And Non-Employees Stock Option Member [Member] | Minimum [Member] | |||||
Class of Stock [Line Items] | |||||
Options exercise price | $ 0.03 | ||||
Employee And Non-Employees Stock Option Member [Member] | Maximum [Member] | |||||
Class of Stock [Line Items] | |||||
Options exercise price | $ 0.10 | ||||
Mr Jonathan Michaels [Member] | Super Voting Preferred Stock [Member] | |||||
Class of Stock [Line Items] | |||||
Shares issued for services | 5,277 | ||||
Shares issued for services, value | $ 250,000 | ||||
Mr. Robert Miranda [Member] | Super Voting Preferred Stock [Member] | |||||
Class of Stock [Line Items] | |||||
Shares issued for services | 5,277 | ||||
Shares issued for services, value | $ 250,000 | ||||
Related Party [Member] | Super Voting Preferred Stock [Member] | |||||
Class of Stock [Line Items] | |||||
Shares issued for services | 923 | ||||
Shares issued for services, value | $ 473,581 | ||||
Subscription Agreements [Member] | Accredited Investors [Member] | |||||
Class of Stock [Line Items] | |||||
Restricted common stock | 1,183,334 | ||||
Common stock shares issued price per share | $ 0.15 | ||||
Proceeds from issuance of stock | $ 177,500 | ||||
Warrants to purchase of shares of common stock | 1,183,334 | ||||
Warrants exercise price, Per share | $ 0.15 | ||||
Settlement of Claims Conditions of Employment Directors Fees and Payment of Information Technology Services [Member] | |||||
Class of Stock [Line Items] | |||||
Shares issued for services | 1,522,250 | ||||
Shares issued for services, value | $ 576,981 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Stock Option Plan Activity (Details) - 12 months ended Mar. 31, 2015 - USD ($) | Total |
Weighted Average Exercise Price per Share, Options granted during the period | $ 0.01 |
Omnibus Incentive Plan [Member] | |
Number of shares, Outstanding, Beginning balance | |
Number of shares, Options granted during the period | 14,104,000 |
Number of shares, Options cancelled during the period | 645,000 |
Number of shares, Options exercised during the period | |
Number of shares, Outstanding, Ending balance | 13,459,000 |
Number of shares, Options Exercisable | 7,271,333 |
Number of shares, Options Expected to vest | 5,826,793 |
Weighted Average Exercise Price per Share, Outstanding, Beginning balance | |
Weighted Average Exercise Price per Share, Options granted during the period | $ 0.10 |
Weighted Average Exercise Price per Share, Options cancelled during the period | $ 0.10 |
Weighted Average Exercise Price per Share, Options exercised during the period | |
Weighted Average Exercise Price per Share, Outstanding, Ending balance | $ 0.10 |
Weighted Average Exercise Price per Share, Exercisable | 0.10 |
Weighted Average Exercise Price per Share, Expected to vest | $ 0.10 |
Aggregate Intrinsic Value, Options Outstanding | $ 0 |
Aggregate Intrinsic Value, Options Exercisable | 0 |
Aggregate Intrinsic Value, Options Expected to vest | $ 0 |
Weighted-Average Remaining Contractual Term (in years), Options Outstanding | 9 years 8 months 1 day |
Weighted-Average Remaining Contractual Term (in years), Options Exercisable | 9 years 5 months 19 days |
Weighted-Average Remaining Contractual Term (in years), Options Expected to vest | 9 years 5 months 19 days |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of Warrant Activity (Details) - Warrant [Member] - $ / shares | 12 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Number of Warrants, Beginning | 11,252,245 | |
Number of Warrants, Issued | 2,110,854 | 11,252,245 |
Number of Warrants, Exercised | (50,000) | |
Number of Warrants, Ending | 13,313,099 | 11,252,245 |
Weighted Average Exercise Price, Beginning | $ 0.15 | |
Weighted Average Exercise Price, Issued | 0.15 | $ 0.15 |
Weighted Average Exercise Price, Exercised | 0.15 | |
Weighted Average Exercise Price, Ending | $ 0.15 | $ 0.15 |
Weighted Average Remaining Contractual Term, Issued | 4 years 1 month 6 days | 4 years 9 months 18 days |
Weighted Average Remaining Contractual Term, Ending | 3 years 10 months 24 days | 4 years 9 months 18 days |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) | Apr. 13, 2012USD ($) | Mar. 31, 2015USD ($)ft²Buildings | Dec. 31, 2014USD ($) | May. 31, 2014USD ($) | Apr. 30, 2014USD ($) | Jul. 31, 2014USD ($) | Mar. 31, 2015USD ($)ft²Buildings | Mar. 31, 2015USD ($)ft²Buildings | Mar. 31, 2014USD ($) |
Number of rented buildings | Buildings | 2 | 2 | 2 | ||||||
Area of square feet | ft² | 76,000 | 76,000 | 76,000 | ||||||
Lease expiration date | Jan. 31, 2018 | ||||||||
Rent expenses | $ 524,339 | $ 508,802 | |||||||
Percentage of annual escalation in rent | 3.00% | ||||||||
Deferred vendor consideration | $ 275,000 | $ 275,000 | $ 275,000 | ||||||
Litigation settlement expense | $ 200,000 | ||||||||
Litigation settlement amount | $ 112,500 | ||||||||
Debt instrument maturity date | Aug. 31, 2014 | ||||||||
Debt settlement amount | $ 45,500 | 6,258,587 | 6,258,587 | 6,258,587 | |||||
Debt extended period | 18 months | ||||||||
Accounts payable on settlement | $ 68,950 | ||||||||
Citizens Business Bank [Member] | |||||||||
Payment of principle and unpaid fees | $ 124,000 | 90,000 | |||||||
Payment of remaining balance due to bank | $ 443,000 | ||||||||
Citizens Business Bank [Member] | Loan Agreement [Member] | |||||||||
Indebtedness for principal and interest | $ 369,302 | $ 369,302 | $ 369,302 | ||||||
Finish Master, Inc [Member] | |||||||||
Purchase commitment of BASF Products | $ 1,555,000 | ||||||||
Deferred vendor consideration | $ 25,000 | ||||||||
Purchase commitment milestones description | In consideration for the Company's exclusive use of FinishMasters products and fulfilling this purchase commitment, FinishMaster paid the Company $25,000, which was recorded as deferred vendor consideration, and FinishMaster will pay an additional $25,000 upon the achievement of purchase level milestones, as outlined in the agreement. Should the Company not complete a set purchase level milestone, the Company would be required to re-pay the $25,000 along with $11,475 compensation to FinishMaster. | ||||||||
Payment of additional amount upon achievement of purchase level milestones | $ 25,000 | ||||||||
Payment upon not completing set purchase level milestone | $ 11,475 | ||||||||
Green Global Automotive B.V [Member] | |||||||||
Contract and economic damages | $ 50,000 | ||||||||
Ford of Escondido [Member] | |||||||||
Damages sought description | Specifically, Ford of Escondido seeks payment of seven (7) Ford Mustangs for a total of $222,871 plus interest and attorneys&fees, less any amounts to be credited pursuant to proceeds of sale. As of March 31, 2015, the Company has included in accounts payable the amount owed for four (4) vehicles which the Company believes are owed to Ford of Escondido. As such, the Company believes that Ford of Escondido's claims with respect to the remaining three (3) vehicles are without merit and have responded to the Complaint including claims that Ford of Escondido breached the supply agreement with the Company. There has been no response received from Ford of Escondido to the Company's position and the outcome is uncertain; however, the Company believes this matter will not have a material impact, if any, on its financial statements. | ||||||||
Proceeds from sale of vechicles | $ 222,871 | ||||||||
BASF Products [Member] | |||||||||
Purchase commitment of BASF Products | $ 4,131,000 | ||||||||
Purchase commitments time period description | If the aggregate purchases of BASF products are less than $1,697,000 over a period of 36 consecutive months, the Company is required to repay BASF 6.1% of the shortfall between $1,697,000 and the amount it actually purchased over this period. In consideration for the Companys exclusive use of BASF products and fulfilling this purchase commitment, BASF paid the Company $250,000, which was recorded as deferred vendor consideration. | ||||||||
Purchase commitments amortization over period | 36 months | ||||||||
Deferred vendor consideration | $ 250,000 | ||||||||
BASF Products One [Member] | |||||||||
Purchase commitment of BASF Products | $ 1,697,000 | ||||||||
Past Rent [Member] | |||||||||
Lease expiration date | Feb. 28, 2015 | ||||||||
Lease term | 20 months | ||||||||
Payment of rent | $ 5,300 | ||||||||
Rent initial starting date | Jun. 30, 2014 | ||||||||
Minimum [Member] | |||||||||
Lease term | 36 months | ||||||||
Maximum [Member] | |||||||||
Lease term | 60 months |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Future Minimum Rental Payments for Operating Leases (Details) | Mar. 31, 2015USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,016 | $ 583,671 |
2,017 | 599,689 |
2,018 | 512,172 |
Total Lease Commitment | $ 1,695,532 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Jun. 22, 2015 | Jun. 19, 2015 | Jun. 16, 2015 | Jun. 12, 2015 | May. 13, 2015 | Jul. 09, 2013 | Apr. 13, 2012 | Jun. 30, 2015 | Apr. 30, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2014 | Jan. 31, 2014 | Jan. 13, 2014 |
Proceeds from issuance of Notes | $ 100,000 | |||||||||||||
Note maturity date | Aug. 31, 2014 | |||||||||||||
Convertible note principal amount | $ 2,501,612 | $ 2,501,612 | ||||||||||||
Common stock, shares authorized | 500,000,000 | 500,000,000 | 500,000,000 | 500,000,000 | 500,000,000 | |||||||||
Preferred stock, shares authorized | 1,000,000 | 1,000,000 | 1,000,000 | |||||||||||
Preferred stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||||
Conversion of Super Voting Preferred to Common Stock | 87,000,000 | 125 | ||||||||||||
Common stock shares issued price per share | 0.15 | $ 0.15 | ||||||||||||
Value of shares acquired | ||||||||||||||
Number of super voting perferred stock shares issued | 696,000 | 341,943 | ||||||||||||
Note convertible into shares | 8,032,186 | |||||||||||||
Michaels Law Group [Member] | ||||||||||||||
Common stock shares issued price per share | $ 0.03 | $ 0.03 | ||||||||||||
10.0% First Lien Convertible Note [Member] | Securities Purchase Agreement [Member] | Greentech Consulting [Member] | ||||||||||||||
Notes conversion amount | $ 100,000 | |||||||||||||
Subsequent Event [Member] | ||||||||||||||
License agreement initial term | 10 years | |||||||||||||
Common stock, shares authorized | 500,000,000 | |||||||||||||
Maximum number of shares authorized to issue | 2,500,000,000 | |||||||||||||
Conversion of Super Voting Preferred to Common Stock | 1,000 | |||||||||||||
Subsequent Event [Member] | Chief Executive Officer and President [Member] | ||||||||||||||
Number of common stock shares conversation of outstanding debt | 82,133,875 | |||||||||||||
Subsequent Event [Member] | Mr. Saleen [Member] | ||||||||||||||
Conversion of Super Voting Preferred to Common Stock | 82,133,875 | |||||||||||||
Subsequent Event [Member] | Board of Directors [Member] | ||||||||||||||
Number of common stock shares conversation of outstanding debt | 1,000 | |||||||||||||
Common stock shares issued price per share | $ 0.0018 | |||||||||||||
Subsequent Event [Member] | Super Voting Preferred Stock [Member] | ||||||||||||||
Preferred stock, shares authorized | 1,000,000 | |||||||||||||
Preferred stock, par value | $ 0.001 | |||||||||||||
Subsequent Event [Member] | Super Voting Preferred Stock [Member] | Mr. Saleen [Member] | ||||||||||||||
Number of common stock shares conversation of outstanding debt | 1,000 | |||||||||||||
Number of shares of super voting preferred stock issued for payment of debt owed | 220,000 | |||||||||||||
Number of shares of super voting preferred stock issued for payment of debt owed, value | $ 220,000 | |||||||||||||
Common stock shares issued price per share | $ 0.001 | |||||||||||||
Subsequent Event [Member] | Super Voting Preferred Stock [Member] | Molly Saleen, Inc [Member] | ||||||||||||||
Issuance of shares during acquisition | 19,008 | |||||||||||||
Value of shares acquired | $ 34,214 | |||||||||||||
Subsequent Event [Member] | Michaels Law Group [Member] | ||||||||||||||
Number of super voting perferred stock shares issued | 63,000 | |||||||||||||
Subsequent Event [Member] | 10.0% First Lien Convertible Note [Member] | Securities Purchase Agreement [Member] | ||||||||||||||
Convertible note principal amount | $ 500,000 | |||||||||||||
Subsequent Event [Member] | 10.0% First Lien Convertible Note [Member] | Securities Purchase Agreement [Member] | Greentech Consulting [Member] | ||||||||||||||
Proceeds from issuance of Notes | $ 500,000 | |||||||||||||
Note maturity date | Aug. 17, 2015 | |||||||||||||
Subsequent Event [Member] | Unsecured Convertible Notes Holders [Member] | Note Agreements [Member] | ||||||||||||||
Notes conversion amount | $ 372,514 | |||||||||||||
Note convertible into shares | 367,751,194 |