x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
|
Nevada
|
59-3691650
|
|
(State or Other Jurisdiction of Incorporation or Organization)
|
(I.R.S. Employer Identification Number)
|
$.001 par value preferred stock
|
Over the Counter Bulletin Board
|
|
$.001 par value common stock
|
Over the Counter Bulletin Board
|
Large accelerated filer
|
o
|
Accelerated filer
|
o
|
Non-accelerated filer
|
o
|
Smaller reporting company
|
x
|
Part I – Financial Information
|
|||||
Item 1.
|
Financial Statements
|
4 | |||
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operation
|
13 | |||
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
18 | |||
Item 4T.
|
Controls and Procedures
|
18 | |||
Part II – Other Information
|
|||||
Item 1.
|
Legal Proceedings
|
19 | |||
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
19 | |||
Item 3.
|
Defaults Upon Senior Securities
|
19 | |||
Item 4.
|
Mine Safety Disclosures
|
19 | |||
Item 5.
|
Other Information
|
19 | |||
Item 6.
|
Exhibits
|
20 | |||
Signatures
|
21 |
Financial Statements:
|
||||
Balance Sheets
|
5 | |||
Statements of Operations
|
6 | |||
Statements of Cash Flows
|
7 | |||
Notes to Financial Statements
|
8 |
TURBINE TRUCK ENGINES, INC.
|
(A DEVELOPMENT STAGE ENTERPRISE)
|
BALANCE SHEETS
|
June 30,
|
December 31,
|
|||||||
2013
|
2012
|
|||||||
(unaudited)
|
||||||||
ASSETS | ||||||||
CURRENT ASSETS:
|
||||||||
Cash
|
$ | - | $ | 6,293 | ||||
Prepaid expenses
|
6,781 | 10,705 | ||||||
Total Current Assets
|
6,781 | 16,998 | ||||||
Furniture and equipment, net of accumulated depreciation of $54,794 (2013) and $52,381 (2012)
|
15,125 | 17,538 | ||||||
TOTAL ASSETS
|
$ | 21,906 | $ | 34,536 | ||||
LIABILITIES AND STOCKHOLDERS' DEFICIT
|
||||||||
CURRENT LIABILITIES:
|
||||||||
Accounts payable, including related party payables of $12,220 (2013) and $12,220 (2012)
|
$ | 163,030 | $ | 118,098 | ||||
Accrued interest
|
18,837 | 20,684 | ||||||
Accrued payroll
|
1,580 | 5,512 | ||||||
Convertible notes, net
|
59,319 | 96,767 | ||||||
Note payable
|
500 | 500 | ||||||
Total Current Liabilities
|
243,266 | 241,561 | ||||||
LONG-TERM LIABILITIES:
|
||||||||
Derivative liability
|
148,782 | 123,272 | ||||||
Accrued expenses - long term
|
78,600 | 66,100 | ||||||
Accrued payroll - long term
|
445,556 | 372,628 | ||||||
Accrued royalty fees
|
37,500 | 25,000 | ||||||
Note payable to related party
|
3,331 | 3,331 | ||||||
Total Long-Term Liabilities
|
713,769 | 590,331 | ||||||
STOCKHOLDERS' DEFICIT
|
||||||||
Series A Convertible Preferred Stock; $0.001 par value; 1,000,000 shares authorized;
|
||||||||
and outstanding 500,000 (2013) and 500,000 (2012) shares issued and outstanding | 500 | 500 | ||||||
Common stock; $0.001 par value; 299,000,000 shares authorized; 124,012,381 (2013)
|
||||||||
shares issued and 37,517,604 shares outstanding and 69,169,111 (2012) shares issued and outstanding | 124,012 | 69,168 | ||||||
Additional paid in capital
|
17,223,316 | 16,913,769 | ||||||
Common stock payable
|
35,400 | 20,000 | ||||||
Prepaid consulting services paid with common stock
|
(49,114 | ) | (57,385 | ) | ||||
Receivable for common stock
|
(212,000 | ) | (212,000 | ) | ||||
Deficit accumulated during development stage
|
(18,057,243 | ) | (17,531,408 | ) | ||||
Total Stockholders' Deficit
|
(935,129 | ) | (797,356 | ) | ||||
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT
|
$ | 21,906 | $ | 34,536 |
TURBINE TRUCK ENGINES, INC.
|
(A DEVELOPMENT STAGE ENTERPRISE)
|
STATEMENTS OF OPERATIONS (UNAUDITED)
|
For the Three Months Ended June 30,
|
For the Six Months Ended June 30,
|
Period
November 27, 2000 (Date of Inception) through June 30,
|
||||||||||||||||||
2013
|
2012
|
2013
|
2012
|
2013
|
||||||||||||||||
Research and development costs
|
$ | - | $ | - | $ | - | $ | - | $ | 3,882,494 | ||||||||||
Operating costs
|
166,947 | 355,071 | 267,849 | 758,948 | 12,958,472 | |||||||||||||||
166,947 | 355,071 | 267,849 | 758,948 | 16,840,966 | ||||||||||||||||
OTHER EXPENSE (INCOME)
|
||||||||||||||||||||
Change in fair value of derivative liability
|
72,580 | (8,518 | ) | 152,555 | (15,798 | ) | 129,203 | |||||||||||||
Loss on investment
|
- | - | - | - | 197,500 | |||||||||||||||
Interest expense
|
43,756 | 38,941 | 105,431 | 52,954 | 889,574 | |||||||||||||||
TOTAL OTHER EXPENSE (INCOME)
|
116,336 | 30,423 | 257,986 | 37,156 | 1,216,277 | |||||||||||||||
NET LOSS
|
$ | (283,283 | ) | $ | (385,494 | ) | $ | (525,835 | ) | $ | (796,104 | ) | $ | (18,057,243 | ) | |||||
NET LOSS PER COMMON SHARE, BASIC AND DILUTED
|
$ | (0.00 | ) | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.68 | ) | |||||
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING, BASIC AND DILUTED
|
104,690,537 | 65,640,469 | 89,294,919 | 64,042,033 | 26,425,255 |
TURBINE TRUCK ENGINES, INC.
|
(A DEVELOPMENT STAGE ENTERPRISE)
|
STATEMENTS OF CASH FLOWS (UNAUDITED)
|
Period
|
||||||||||||
November 27,
|
||||||||||||
For the Six Months Ended June 30,
|
2000 (Date of
Inception) through June 30,
|
|||||||||||
2013
|
2012
|
2013
|
||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||||||
Net loss
|
$ | (525,835 | ) | $ | (796,104 | ) | $ | (18,057,243 | ) | |||
Adjustments to reconcile net loss to net cash used in operating activites:
|
||||||||||||
Common stock and long-term debt issued for acquisition of license agreement
|
- | - | 2,735,649 | |||||||||
Common stock issued for services and amortization of common stock issued for services
|
3,328 | 456,652 | 5,375,011 | |||||||||
Loss on deposit
|
- | 197,500 | ||||||||||
Contribution from shareholder
|
- | - | 188,706 | |||||||||
Unrealized loss on derivative liability
|
152,555 | (15,798 | ) | 129,203 | ||||||||
Amortization of beneficial conversion feature
|
- | - | 539,876 | |||||||||
Amortization of deferred loan costs
|
- | - | 24,750 | |||||||||
Write off of deferred offering costs
|
- | - | 119,383 | |||||||||
Write off of deferred non cash offering costs
|
- | - | 49,120 | |||||||||
Gain on disposal of fixed assets
|
- | - | (1,965 | ) | ||||||||
Depreciation
|
2,413 | 1,923 | 57,877 | |||||||||
Amortization of agency fee
|
- | - | 100,000 | |||||||||
Amortization of discount on notes payable
|
84,341 | 52,954 | 264,802 | |||||||||
Decrease (increase) in prepaid expenses
|
3,924 | (36,533 | ) | (6,781 | ) | |||||||
Increase (decrease) in:
|
||||||||||||
Accounts payable
|
44,932 | 16,178 | 371,868 | |||||||||
Accrued expenses
|
12,500 | 2,652 | 314,750 | |||||||||
Accrued payroll
|
68,996 | 56,437 | 797,421 | |||||||||
Accrued royalty fees
|
12,500 | 12,500 | 1,755,667 | |||||||||
Accrued interest
|
1,553 | - | 23,937 | |||||||||
Net cash used by operating activities
|
(138,793 | ) | (249,139 | ) | (5,020,469 | ) | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||||||
Payment of agency fee rights
|
- | - | (100,000 | ) | ||||||||
Issuance of notes receivable from stockholders
|
- | - | (23,000 | ) | ||||||||
Deposit for Global Hydrogen Energy Corp.
|
- | (197,500 | ) | (197,500 | ) | |||||||
Repayment of notes receivable from stockholders
|
- | - | 22,095 | |||||||||
Advances to related party
|
- | - | 805 | |||||||||
Proceeds from sale of fixed assets
|
- | - | 2,500 | |||||||||
Purchase of fixed assets
|
- | (14,991 | ) | (68,538 | ) | |||||||
Net cash used by investing activities
|
- | (212,491 | ) | (363,638 | ) | |||||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||||||
Repayment of stockholder advances
|
- | (5,000 | ) | (162,084 | ) | |||||||
Advances from stockholders
|
- | 1,430 | 272,582 | |||||||||
Increase in deferred offering cossts
|
- | - | (194,534 | ) | ||||||||
Proceeds from issuance of common stock
|
100,000 | 373,350 | 4,351,143 | |||||||||
Proceeds from exercise of options
|
- | - | 45,000 | |||||||||
Debt issuance costs
|
- | - | (19,750 | ) | ||||||||
Repayment of convertible notes payable
|
- | - | (23,000 | ) | ||||||||
Proceeds from issuance of convertible notes payable
|
32,500 | 92,500 | 1,114,750 | |||||||||
Net cash provided by financing activities
|
132,500 | 462,280 | 5,384,107 | |||||||||
Net (decrease) increase in cash
|
(6,293 | ) | 650 | - |
TURBINE TRUCK ENGINES, INC.
|
(A DEVELOPMENT STAGE ENTERPRISE)
|
STATEMENTS OF CASH FLOWS (UNAUDITED) CONTINUED
|
For the Six Months Ended June 30,
|
Period
November 27,Inception)
through June 30,
|
|||||||||||
2013
|
2012
|
2013
|
||||||||||
Cash, beginning of period
|
6,293 | 11,638 | - | |||||||||
Cash, end of period
|
$ | - | $ | 12,288 | $ | - | ||||||
SUPPLEMENTAL CASH FLOW INFORMATION:
|
||||||||||||
Cash paid for interest
|
$ | - | $ | - | $ | 21,477 | ||||||
NON-CASH FINANCING AND INVESTING ACTIVITIES:
|
||||||||||||
Subscription receivable for issuance of common stock
|
$ | 10,000 | $ | - | $ | 29,090 | ||||||
Option to acquire license for issuance of common stock
|
$ | - | $ | - | $ | 10,000 | ||||||
Deferred offering costs netted against issuance of common stock under private placement
|
$ | - | $ | - | $ | 33,774 | ||||||
Deferred offering costs netted against issuance of common stock
|
$ | - | $ | - | $ | 41,735 | ||||||
Value of beneficial conversion feature of notes payable
|
$ | - | $ | - | $ | 19,507 | ||||||
Deferred non-cash offering costs in connection with private placement
|
$ | - | $ | - | $ | 74,850 | ||||||
Application of amount due from shareholder against related party debt
|
$ | - | $ | - | $ | 8,099 | ||||||
Amortization of offering costs related to stock for services
|
$ | - | $ | - | $ | 25,730 | ||||||
Settlement of notes payable in exchange for prepaid services
|
$ | - | $ | - | $ | 356,466 | ||||||
Common stock issued in exchange for prepaid services
|
$ | 5,400 | $ | 110,500 | $ | 2,460,064 | ||||||
Common stock issued in exchange for accrued royalties
|
$ | - | $ | 1,301,500 | $ | 1,718,167 | ||||||
Common stock issued for accruals
|
$ | - | $ | 206,750 | $ | 206,750 | ||||||
Receivable issued for exercise of common stock options
|
$ | - | $ | - | $ | 367,000 | ||||||
Common stock issued in exchange for fixed assets
|
$ | - | $ | - | $ | 5,000 | ||||||
Acquisition of agency fee intangible through accrued expenses
|
$ | - | $ | - | $ | 900,000 | ||||||
Beneficial conversion fetaure on convertible notes
|
$ | - | $ | - | $ | 531,561 | ||||||
Conversion of convertible debt to equity (44,646,707 shares since inception)
|
$ | 113,409 | $ | 44,201 | $ | 951,909 | ||||||
Common stock issued for accounts payable
|
$ | - | $ | - | $ | 208,838 | ||||||
Common stock issued for accrued payroll
|
$ | - | $ | - | $ | 15,000 | ||||||
Preferred stock issued for accrued payroll
|
$ | - | $ | 335,285 | $ | 335,285 | ||||||
Common stock payable for prepaid services
|
$ | - | $ | 245,000 | $ | 245,000 | ||||||
Issuance of common stock to employees
|
$ | $ | - | $ | 274,000 | |||||||
Common stock issued for accrued expenses
|
$ | - | $ | - | $ | 29,400 | ||||||
Derivative liability and debt discount
|
$ | 40,880 | $ | 92,500 | $ | 265,924 | ||||||
Write off uncollectible stock subscription receivable
|
$ | - | $ | - | $ | 155,000 | ||||||
Write off of intangible asset and agency fee payable
|
$ | - | $ | - | $ | 900,000 | ||||||
Conversion of accrued interest to common stock
|
$ | 3,400 | $ | - | $ | 5,100 | ||||||
Common stock issued to extinguish derivative liability
|
$ | 157,582 | $ | - | $ | 232,609 |
Fair Value
Measurements at
June 30, 2013 (1)
|
Fair Value
Measurements
at December 31, 2012(1)
|
|||||||||||||||
Using Level 2
|
Total
|
Using Level 2
|
Total
|
|||||||||||||
Liabilities:
|
||||||||||||||||
Derivative liabilities
|
$
|
(148,782
|
)
|
$
|
(148,782
|
)
|
$
|
(123,272
|
)
|
$
|
(123,272
|
)
|
||||
Total liabilities
|
$
|
(148,782
|
)
|
$
|
(148,782
|
)
|
$
|
(123,272
|
)
|
$
|
(123,272
|
)
|
(1)
|
The Company did not have any assets or liabilities measured at fair value using Level 1 or Level 3 of the fair value hierarchy as of June 30, 2013 or December 31, 2012.
|
Approximate
Number of
Shares
|
Approximate
Proceeds*
|
|||||||
Non-Plan Options and Warrants
|
6,655,413 | $ | 1,606,533 |
*
|
Based on weighted average exercise price.
|
31.1
|
Certification of the Chairman of the Board, Chief Executive Officer, and Principal Financial Officer (This certification required as Exhibit 31 under Item 601(a) of Regulation S-K
|
|
31.2
|
Certification of the Principal Accounting Officer (This certification required as Exhibit 31 under Item 601(a) of Regulation S-K
|
|
32.1
|
Written Statements of the Chief Executive Officer, This certification required as Exhibit 32 under Item 601(a) of Regulation S-K is furnished in accordance with Item 601(b)(32)(iii) of Regulation S-K
|
|
32.2
|
Written Statements of the Chief Financial Officer and Principal Accounting Officer (This certification required as Exhibit 32 under Item 601(a) of Regulation S-K is furnished in accordance with Item 601(b)(32)(iii) of Regulation S-K
|
101.INS **
|
XBRL Instance Document
|
|
101.SCH **
|
XBRL Taxonomy Extension Schema Document
|
|
101.CAL **
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
101.DEF **
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
101.LAB **
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
101.PRE **
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
TURBINE TRUCK ENGINES, INC.
|
|||
Dated: August 16, 2013
|
By:
|
/s/ Michael Rouse
|
|
Chief Executive Officer and Chairman of the Board
|
|||
(Principal Executive Officer and Principal Financial Officer)
|
|||
Dated: August 16, 2013
|
By:
|
/s/ Rebecca A. McDonald
|
|
Principal Accounting Officer
|
1. | I have reviewed this quarterly report on Form 10-Q of Turbine Truck Engines, Inc.; | |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a – 15(f) and 15d – 15(f)) for the registrant and have: | |
a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c) |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d) |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of the annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): | |
a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: August 16, 2013
|
By: |
/s/ Michael Rouse
|
|
Michael Rouse
|
|||
Chief Executive Officer and Chairman of the Board
(Principal Executive Officer and Principal Financial Officer)
|
1. | I have reviewed this quarterly report on Form 10-Q of Turbine Truck Engines, Inc.; | |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a – 15(f) and 15d – 15(f)) for the registrant and have: | |
a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c) |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d) |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of the annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): | |
a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: August 16, 2013
|
By: |
/s/ Rebecca A. McDonald
|
|
Rebecca A. McDonald
|
|||
Principal Accounting Officer
|
Date: August 16, 2013
|
By: |
/s/ Michael Rouse
|
|
Michael Rouse
|
|||
Chief Executive Officer and Chairman of the Board
(Principal Executive Officer and Principal Financial Officer)
|
Date: August 16, 2013
|
By: |
/s/ Rebecca A. McDonald
|
|
Rebecca A. McDonald
|
|||
Principal Accounting Officer
|
Commitments and Contingencies (Detail Textuals) (USD $)
|
1 Months Ended | 3 Months Ended | 6 Months Ended | 1 Months Ended | |||||
---|---|---|---|---|---|---|---|---|---|
May 28, 2013
|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jan. 23, 2013
|
Jan. 23, 2013
BluGen [Member]
|
Jan. 31, 2013
Employment Agreement [Member]
|
Oct. 31, 2011
Employment Agreement [Member]
|
|
Rent expense | $ 6,250 | $ 6,250 | $ 12,500 | $ 12,500 | |||||
Cumulative annual salary | 104,000 | 156,000 | |||||||
Number of shares issued | 450,000 | 850,000 | |||||||
Share-based compensation expense | 1,350 | 279,000 | |||||||
Number of additional fully vested common stock options granted | 1,250,000 | 850,000 | |||||||
Weighted average exercise price | $ 0.05 | $ 0.25 | |||||||
Expiration period | 5 years | 5 years | |||||||
Joint venture, company share | 15.00% | 49.00% | |||||||
Unit price for the Equipment | $ 800,000 | ||||||||
Term of the Lease | 7 years |
Statements of Operations (unaudited) (USD $)
|
3 Months Ended | 6 Months Ended | 151 Months Ended | ||
---|---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
|
Statements Of Operations | |||||
Research and development costs | $ 3,882,494 | ||||
Operating costs | 166,947 | 355,071 | 267,849 | 758,948 | 12,958,472 |
Total operating costs and expenses | 166,947 | 355,071 | 267,849 | 758,948 | 16,840,966 |
OTHER EXPENSE (INCOME) | |||||
Change in fair value of derivative liability | 72,580 | (8,518) | 152,555 | (15,798) | 129,203 |
Loss on investment | 197,500 | ||||
Interest expense | 43,756 | 38,941 | 105,431 | 52,954 | 889,574 |
TOTAL OTHER EXPENSE (INCOME) | 116,336 | 30,423 | 257,986 | 37,156 | 1,216,277 |
NET LOSS | $ (283,283) | $ (385,494) | $ (525,835) | $ (796,104) | $ (18,057,243) |
NET LOSS PER COMMON SHARE, BASIC AND DILUTED | $ 0.00 | $ (0.01) | $ (0.01) | $ (0.01) | $ (0.68) |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING, BASIC AND DILUTED | 104,690,537 | 65,640,469 | 89,294,919 | 64,042,033 | 26,425,255 |
Commitments and Contingencies
|
6 Months Ended |
---|---|
Jun. 30, 2013
|
|
Commitments And Contingencies | |
4. Commitments and Contingencies | The Company leased its corporate headquarters on a month-to-month basis. For each of the three month periods ended June 30, 2013 and 2012, rent expense was approximately $6,250. For each of the six months periods ended June 30, 2013 and 2012, rent expense was $12,500.
In October 2011, the Company entered into employment agreements with terms that commence on October 1, 2011 and run through a range of dates with the latest being September 2014. These agreements have a cumulative annual salary of approximately $156,000 annually and cumulative grants of fully vested stock issuances of 850,000 shares of stock. Upon signing the employment agreements, all unearned stock compensation from the previous employment agreements was recognized in full, as the employees were not required to forfeit their previous granted shares of common stock. At the October 1, 2011 grant date, the Company recognized approximately $279,000 in stock-based compensation related to the above grants of common stock, and grants made during 2010. Additionally, the employees were granted 850,000 fully vested common stock options, with an exercise price of $0.25 per share, and expire five years from the date of grant. The grants of common stock and common stock options were essentially sign-on bonuses, and accordingly, the grant-date fair values were recognized as compensation expense at the October 1, 2011 grant date.
In January 2013, the Company entered into employment agreements with terms that commence on January 1, 2013 and run through December 31, 2013. These agreements have a cumulative annual salary of approximately $104,000 annually and cumulative grants of fully vested stock issuances of 450,000 shares of stock. At the January 1, 2013 grant date, the Company recognized approximately $1,350 in stock-based compensation related to the above grants of common stock made during 2013. Additionally, the employees were entitled to receive a bonus of 1,250,000 common stock options, with an exercise price of $0.05 per share, and expire five years from the date of grant. The grants of common stock and common stock options were essentially sign-on bonuses, and accordingly, the grant-date fair values were recognized as compensation expense at the January 1, 2013.
On January 23, 2013 the Company entered into a Letter of Intent with BluGen, Inc., a California corporation (BluGen) for the purpose of setting the basis for the joint development of a natural gas to Methanol technology (GTM Technology). Under the terms of the Agreement, BluGen will work with TTE, and the inventor, Robert Scragg to recreate and expand upon the original designs created by Mr. Scragg and to re-develop a lab version and control system, among other things. These items are to be completed under a timetable that have been agreed upon by the parties. The Parties have agreed to establish at a later date, a joint venture, wherein the Company will have a 15% interest and BluGen will have a 49% interest, and into which the commercial application of the technology will be developed. There has been no activity at the date of this filing.
On May 28, 2013, the Company entered into Lease Agreement dated with Fujian Xinchang Leather Company Limited, a Chinese company (Fujian), whose address is Jinjiang City, Fujian, China Ying Lin Zhenxin Chang Industrial Park (the Plant) for the lease of a Hydrogen boiler combustion equipment system (the Equipment) to be installed at their Plant. The Unit price for the Equipment is RMB 4,800,000 Yuan (approximately $800,000 US). The term of the Lease is seven (7) years, and renews on an annual basis if not terminated. Once installation and proven energy efficiency are established, Fujian will post the performance bond of RMB 1 million Yuan and rental payments shall commence, and be paid monthly thereafter. Any termination of the Lease within the first six (6) years will entitle the Company to take possession of the entire performance bond. As of June 30, 2013, there has not been any payments made on this lease.
The Company has entered into various other agreements that have been disclosed in previous 10K and 10Q filings. These agreements have been put on hold but will be further pursued as adequate funding is generated. |
Related Party Transactions (Detail Textuals) (USD $)
|
12 Months Ended | 0 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
Dec. 31, 2012
|
Dec. 31, 2003
|
Apr. 27, 2012
Settlement of Debt [Member]
Alpha Engines Corporation [Member]
|
Dec. 31, 2012
Chief Executive Officer [Member]
|
Jun. 30, 2013
Chief Accounting Officer and Director [Member]
|
Dec. 31, 2012
Chief Accounting Officer and Director [Member]
|
Mar. 15, 2012
President and Chief Executive Officer [Member]
Series Preferred Stock [Member]
|
|
Related Party Transaction [Line Items] | ||||||||
Note payable to related party | $ 1,901 | $ 1,901 | $ 15,000 | |||||
Accounts payable included due to Chief Accounting Officer who is also a director | 12,220 | 12,220 | 12,220 | 12,220 | ||||
Proceeds from related party advances | 1,430 | |||||||
Number of shares of series A convertible preferred shares issued | 500,000 | |||||||
Unpaid and accrued salary | 335,285 | |||||||
Accrued royalties and other payables | 1,508,250 | |||||||
Full settlement of the royalties and other payables | 250,000 | |||||||
Annual license royalty payable | 250,000 | |||||||
Annual license royalty payable reduced to | 25,000 | |||||||
Total accrued royalty fees | $ 37,500 |
Statements of Cash Flows (Parenthetical)
|
151 Months Ended |
---|---|
Jun. 30, 2013
|
|
Statements Of Cash Flows Parenthetical | |
Conversion of convertible debt to equity (in shares) | 44,646,707 |
Financial Statements
|
6 Months Ended |
---|---|
Jun. 30, 2013
|
|
Financial Statements | |
2. Financial Statements | In the opinion of management, all adjustments consisting only of normal recurring adjustments necessary for a fair statement of (a) the results of operations for the three and six month periods ended June 30, 2013 and 2012 and the period November 27, 2000 (Date of Inception) through June 30, 2013, (b) the financial position at June 30, 2013 and December 31, 2012, and (c) cash flows for the six month periods ended June 30, 2013 and 2012, and the period November 27, 2000 (Date of Inception) through June 30, 2013, have been made.
The unaudited financial statements and notes are presented as permitted by Form 10-Q. Accordingly, certain information and note disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted. The accompanying financial statements and notes should be read in conjunction with the audited financial statements and notes of the Company for the fiscal year ended December 31, 2012. The results of operations for the six month period ended June 30, 2013 are not necessarily indicative of those to be expected for the entire year. |
Related Party Transactions
|
6 Months Ended |
---|---|
Jun. 30, 2013
|
|
Related Party Transactions | |
5. Related Party Transactions | During the year ended December 31, 2003, the Company signed a note payable with a related party in the amount of $15,000. The balance at June 30, 2013 and December 31, 2012 is $1,901. This note payable was unsecured, non-interest bearing and has no specific repayment terms, however, payment is not expected prior to December 31, 2013.
As of June 30, 2013 and December 31, 2012, accounts payable included $12,220 for various accounting services, due to the Companys Chief Accounting Officer who is also a director of the Company.
On March 15, 2012, the Board of Directors resolved to issue 500,000 shares of Series A Convertible Preferred shares to Michael Rouse, the Companys President and CEO, in exchange for $335,285 of unpaid and accrued salary.
During the year ended December 31, 2012, the Companys CEO advanced the Company $1,430 with no specific terms of repayment and no stated interest rate.
The Company entered into a Debt Settlement Agreement (the Agreement) dated April 27, 2012 with Alpha Engines Corporation (Alpha). The Company and Alpha entered into a License Agreement dated December 31, 2001, pursuant to which the Company has accrued royalties and other payables to Alpha in the amount of $1,508,250 as of the date of the Agreement. Pursuant to the terms of the Agreement, Alpha agreed to accept 250,000 shares of the company common stock in full settlement of the above royalties and other payables and further agreed to reduce the annual license royalty payable under the License Agreement from $250,000 per year to $25,000 per year, retroactive to January 1, 2012, with the first payment being due January 1, 2013. On April 27, 2012, the Company recorded the difference between the fair value of the common stock issued to Alpha and the settlement of the accrued royalties and other payables as a capital contribution from Alpha to the Company, which is included in additional paid-in capital at December 31, 2012. As of June 30, 2013, the Company has not made a payment under this license agreement and has recorded total accrued royalty fees of $37,500.
The above terms and amounts are not necessarily indicative of the terms and amounts that would have been incurred had comparable transactions been entered into with independent parties. |
Going Concern
|
6 Months Ended |
---|---|
Jun. 30, 2013
|
|
Going Concern | |
3. Going Concern | The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. For the three and six months ended June 30, 2013 and since November 27, 2000 (date of inception) through June 30, 2013, the Company had a net loss of $283,283, $525,835 and $18,057,243, respectively. As of June 30, 2013, the Company has not emerged from the development stage and has a working capital deficit of $236,485. In view of these matters, the Companys ability to continue as a going concern is dependent upon the Companys ability to begin operations and to achieve a level of profitability. Since inception, the Company has financed its activities principally from the sale of public equity securities. The Company intends on financing its future development activities and its working capital needs largely from the sale of public equity securities with some additional funding from other traditional financing sources, including term notes and proceeds from sub-licensing agreements until such time that funds provided by operations are sufficient to fund working capital requirements. The financial statements of the Company do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern. |