10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2015

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________ to _______________.

Commission file number: 000-53443

COOL TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter)

Nevada	75-3076597
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
8875 Hidden River Parkway, Suite 300 Tampa, FL	33637
(Address of principal executive offices)	(Zip Code)

Registrant's telephone number, including area code: (813) 975-7467

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ¨	Accelerated filer ¨	Non-accelerated filer ¨	Smaller reporting company x
		(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

As of November 9, 2015, there were 67,514,653 shares of common stock, $0.001 par value, issued and outstanding.

COOL TECHNOLOGIES, INC.

Table of Contents

Part I – FINANCIAL INFORMATION
Item 1.	Financial Statements	4
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	18
Item 4.	Controls and Procedures	19
Part II – OTHER INFORMATION
Item 1.	Legal Proceedings	20
Item 1A.	Risk Factors	20
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	21
Item 3.	Defaults Upon Senior Securities	21
Item 5.	Other information	21
Item 6.	Exhibits	22

2

CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION

This Quarterly Report on Form 10-Q contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Forward-looking statements discuss matters that are not historical facts. Because they discuss future events or conditions, forward-looking statements may include words such as "anticipate," "believe," "estimate," "intend," "could," "should," "would," "may," "seek," "plan," "might," "will," "expect," "anticipate," "predict," "project," "forecast," "potential," "continue" negatives thereof or similar expressions. Forward-looking statements speak only as of the date they are made, are based on various underlying assumptions and current expectations about the future and are not guarantees. Such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, level of activity, performance or achievement to be materially different from the results of operations or plans expressed or implied by such forward-looking statements.

We cannot predict all of the risks and uncertainties. Accordingly, such information should not be regarded as representations that the results or conditions described in such statements or that our objectives and plans will be achieved and we do not assume any responsibility for the accuracy or completeness of any of these forward-looking statements. These forward-looking statements are found at various places throughout this Quarterly Report on Form 10-Q and include information concerning possible or assumed future results of our operations, including statements about potential sales and revenues; acquisition or merger targets; business strategies; future cash flows; financing plans; plans and objectives of management; any other statements regarding future acquisitions, future cash needs, future operations, business plans and future financial results, and any other statements that are not historical facts.

These forward-looking statements represent our intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors. Many of those factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of the Quarterly Report on Form 10-Q. All subsequent written and oral forward-looking statements concerning other matters addressed in this Quarterly Report on Form 10-Q and attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this Quarterly Report on Form 10-Q.

Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise.

3

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Cool Technologies, Inc. and subsidiary

Condensed Consolidated Balance Sheets

	September 30, 2015			December 31, 2014
	(Unaudited)
ASSETS
Current assets:
Cash	$	25,174		$	171,871
Prepaid expenses		68,730			57,018
Total current assets		93,904			228,889
Intangibles		147,572			139,800
Equipment, net		104,084			118,453
Total assets	$	345,560		$	487,142
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable	$	1,335,489		$	529,736
Accrued liabilities – related party		611,093			489,535
Customer deposits – related party		400,000			400,000
Accrued payroll taxes		29,269			14,167
Debt, current portion		292,581			40,235
Derivative liability		73,326			--
Total current liabilities		2,741,758			1,473,673
Debt, long-term portion, net of debt discount		63,374			77,076
Total liabilities		2,805,132			1,550,749
Commitments and contingencies (Note 5)		--			--
Stockholders' equity (deficit):
Preferred stock, $.001 par value; 15,000,000 shares authorized;136 and 140 shares issued and outstanding at September 30, 2015 and December 31, 2014, Respectively		--			--
Common stock, $.001 par value; 140,000,000 shares authorized; 66,464,653 and 61,439,134 shares issued and outstanding at September 30, 2015 and December 31, 2014, respectively		65,793			60,767
Additional paid-in capital		35,023,099			30,864,669
Common stock issuable		95,000			435,930
Common stock held in escrow		8,441			8,441
Accumulated deficit		(37,626,928	)		(32,421,145	)
Total deficit		(2,434,595	)		(1,051,338	)
Noncontrolling interest in subsidiary		(24,977	)		(12,269	)
Total stockholders' deficit		(2,459,572	)		(1,063,607	)
Total liabilities and stockholders' deficit	$	345,560		$	487,142

See accompanying notes to condensed consolidated financial statements.

4

Cool Technologies, Inc. and subsidiary

Condensed Consolidated Statements of Operations

(Unaudited)

	Three months ended September 30,						Nine months ended September 30,
	2015			2014			2015			2014
Revenues	$	--		$	--		$	--		$	--
Cost of revenues		--			--			--			--
Gross profit		--			--			--			--
Operating expenses
Payroll and related expenses		198,787			278,425			612,325			765,786
Consulting		48,203			879,633			814,856			8,124,783
Professional fees		88,488			231,540			503,165			548,511
Research and development		150,398			500,808			717,988			936,221
General and administrative		490,056			809,006			1,441,376			11,198,714
Total operating expenses		975,932			2,699,412			4,089,710			21,574,015
Operating loss		(975,932	)		(2,699,412	)		(4,089,710	)		(21,574,015	)
Other income (expense):
Interest expense, net		(7,080	)		(2,403	)		(11,655	)		(11,652	)
Change in fair value of derivative liability		2,324			--			2,324			--
Legal settlement – replacement warrants		--			--			(1,119,450	)		--
Net loss		(980,688	)		(2,701,815	)		(5,218,491	)		(21,585,667	)
Less: Noncontrolling interest in net loss		(3,345	)		(5,718	)		(12,708	)		(7,263	)
Net loss to shareholders	$	(977,343	)	$	(2,696,097	)	$	(5,205,783	)	$	(21,578,404	)
Net loss per common share:
Basic and diluted	$	(0.01	)	$	(0.05	)	$	(0.08	)	$	(0.39	)
Weighted average common shares outstanding:
Basic and diluted		66,089,776			59,636,423			63,938,744			55,190,022

See accompanying notes to condensed consolidated financial statements.

5

Cool Technologies, Inc. and subsidiary

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	Nine months ended September 30,
	2015			2014
Operating Activities:
Net loss	$	(5,218,491	)	$	(21,585,667	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock issued for services		571,207			596,750
Warrants issued for services		55,849			7,240,930
Legal settlement – replacement warrants		1,119,450			--
Employee stock options		981,000			9,944,000
Change in fair value of derivative liability		(2,324	)		--
Amortization of debt discount		2,189			--
Depreciation expense		19,369			--
Changes in operating assets and liabilities:
Prepaid expenses		(11,712	)		(92,932	)
Accounts payable		805,753			(131,842	)
Accrued liabilities – related party		121,558			661,966
Customer deposits		--			400,000
Accrued payroll liabilities		15,102			3,739
Net cash used in operating activities		(1,541,050	)		(2,963,056	)
Investing Activities:
Intangible assets		(7,772	)		(24,921	)
Equipment purchase		(5,000	)		--
Net cash used in investing activities		(12,772	)		(24,921	)
Financing Activities:
Proceeds from sale of common stock		1,095,020			3,426,652
Proceeds from debt		325,000			--
Payments on debt		(12,895	)		--
Net cash provided by financing activities		1,407,125			3,426,652
Net (decrease) increase in cash		(146,697	)		438,675
Cash, beginning of period		171,871			477,549
Cash, end of period	$	25,174		$	916,224
Cash paid for:
Interest	$	5,219		$	--
Income taxes	$	--		$	--
Non-cash transaction:
Reduction of stock issuable by issuing common stock	$	410,950		$	--
Derivative liability offset by debt discount		75,650			--

See accompanying notes to condensed consolidated financial statements.

6

Cool Technologies, Inc. and subsidiary

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Note 1 – Description of Business and Summary of Significant Accounting Policies

Description of Business

Cool Technologies, Inc. and subsidiary, (we, us, our, the "Company" or "Cool Technologies") was incorporated in the State of Nevada in July 2002. In April 2014, we formed Ultimate Power Truck, LLC ("Ultimate Power Truck" or "UPT"), of which we own 95% and a shareholder of Cool Technologies owns 5%. We were formerly known as Bibb Corporation, as Z3 Enterprises, and as HPEV Inc. On August 20, 2015, we changed our name to Cool Technologies, Inc.

We have developed and intend to commercialize thermal dispersion technologies in various product platforms and a parallel power input gearbox, around which we have designed a mobile generator system that can be retrofit onto new and existing trucks. In preparation, we have applied for trademarks for one of our technologies and its acronym. We currently have two trademarks: HPEV and TEHPC. We believe that our proprietary technologies, including our patent portfolio and trade secrets, can help increase the efficiency and positively affect manufacturing cost structure in several large industries beginning with motors/generators and fleet vehicles. The markets for products utilizing our technology include consumer, industrial and military markets, both in the U.S. and worldwide.

Our technologies are divided into two distinct but complementary categories: heat dispersion technology and mobile electric power. As of September 30, 2015, we have five patents and seven patent applications pending in the area of composite heat structures, motors, and related structures, heat pipe architecture, applications (commonly referred to as "thermal" or "heat dispersion technology") and a parallel power vehicle platform. We intend to commercialize our patents by licensing our thermal technologies and applications to electric motor, pump and vehicle component manufacturers; and by licensing or selling a mobile electric power system powered by our proprietary gearing system to commercial vehicle and fleet owners.

Basis of Presentation

The accompanying condensed consolidated balance sheet as of December 31, 2014, has been derived from audited financial statements. The accompanying unaudited interim condensed consolidated financial statements have been prepared on the same basis as the annual audited financial statements and in accordance with accounting principles generally accepted in the United States ("GAAP") for interim financial information and the rules and regulations of the Securities and Exchange Commission ("SEC") for interim financial statements. In the opinion of management, such unaudited information includes all adjustments (consisting only of normal recurring accruals) necessary for a fair presentation of this interim information. All intercompany transactions have been eliminated in consolidation. Noncontrolling interest represents the 5% third party ownership of our subsidiary, UPT. Operating results and cash flows for interim periods are not necessarily indicative of results that can be expected for the entire year. The information included in this report should be read in conjunction with our audited financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2014.

Going Concern

The accompanying condensed consolidated financial statements have been prepared assuming we will continue as a going concern. We have incurred net losses of $37,626,928 since inception and have not fully commenced operations, raising substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern is dependent on our ability to generate revenue, achieve profitable operations and repay our obligations when they come due. These consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty. As of the filing date of this Quarterly Report on Form 10-Q, management is negotiating additional funding arrangements to support completion of the initial phases of our business plan: to license its thermal technologies and applications, including submersible dry-pit applications; and to license and sell mobile generation retrofit kits (our Ultimate Power Truck business) driven by our proprietary gearing system. There can be no assurance, however, that we will be successful in raising additional financing and accomplishing these objectives.

7

Accounting Policy

Derivative financial instruments -- When we issue debt that contains a conversion feature, we first evaluate whether the conversion feature meets the requirements to be treated as a derivative: a) one or more underlyings, typically the price of the company's stock; b) one or more notional amounts or payment provisions or both, generally the number of shares upon conversion; c) no initial net investment, which typically excludes the amount borrowed; and d) net settlement provisions, which in the case of convertible debt generally means the stock received upon conversion can be readily sold for cash. There are certain scope exceptions from derivative treatment, but these typically exclude conversion features that provide for a variable number of shares.

If the conversion feature within convertible debt meets the requirements to be treated as a derivative, we estimate the fair value of the derivative liability using the Black-Scholes Option Pricing Model upon the date of issuance. If the fair value of the derivative liability is higher than the face value of the convertible debt, the excess is immediately recognized as interest expense. Otherwise, the fair value of the derivative liability is recorded as a liability with an offsetting amount recorded as a debt discount, which offsets the carrying amount of the debt. The derivative liability is revalued at the end of each reporting period and any change in fair value is recorded as a change in fair value in the condensed consolidated statement of operations. The debt discount is amortized through interest expense over the life of the debt. Derivative instrument liabilities and the host debt agreement are classified on the balance sheet as current or non-current based on whether settlement of the derivative instrument could be required within twelve months of the balance sheet date.

Recently Issued Accounting Pronouncements

We have evaluated the other recent accounting pronouncements through ASU 2015-16 and believe that none of them will have a material effect on our financial statements.

Note 2 – Equipment

Equipment consists of the following:

	September 30,			December 31,
	2015			2014
Test vehicles	$	124,687		$	124,687
Other		5,000			--
		129,687			124,687
Less: accumulated depreciation		(25,603	)		(6,234	)
	$	104,084		$	118,453

Depreciation expense for the nine months ended September 30, 2015 and 2014, respectively, was $19,369 and zero.

Note 3 – Customer deposits – Related party

These represent advance payments of $400,000 received on orders that have not yet been fulfilled, with companies controlled by the individual who is the 5% owner of UPT and a shareholder.

8

Note 4 – Debt

Debt consists of the following:

	September 30,			December 31,
	2015			2014
Note payable – officer	$	22,910		$	22,910
Note payable – UPT minority owner		250,000			--
Test vehicle financing		81,506			94,401
Convertible debt		75,000			--
		429,416			117,311
Debt discount		(73,461	)		--
		355,955			117,311
Less: current portion		292,581			40,235
Long-term portion	$	63,374		$	77,076

The note payable – officer is non-interest bearing and is due on demand, payable to the Secretary of Cool Technologies.

The note payable – UPT minority owner is with the 5% owner of UPT. The terms of the note have not been finalized.

In October 2014, we entered into financing agreements for the purchase of test vehicles, bearing interest at 5.99% payable monthly over five years, collateralized by the vehicles.

On September 15, 2015, we entered into a convertible debt agreement (the "Convertible Debt") with an unrelated individual, bearing interest at 10%, with principal and interest payable on September 15, 2017. We may borrow up to $250,000 under the Convertible Debt. At the Convertible Debt holder's option, a portion or all of the unpaid principal and interest may be converted into shares of our common stock at the lesser of $0.305 per share or 65% of the volume weighted average price during the five consecutive trading days immediately preceding the applicable conversion date. We determined that the conversion feature meets the requirements for derivative treatment and have recorded a Derivative liability and a corresponding debt discount on the condensed consolidated balance sheet. We estimated the fair value of the Derivative liability of $75,650 and $73,326, respectively, on September 15, 2015 and September 30, 2015.

The following summarizes the Black-Scholes assumptions used to estimate the fair value of the derivative liability at the date of issuance and the revaluation date:

	September 15, 2015			September 30, 2015
Volatility		112	%		112	%
Risk-free interest rate		0.8	%		0.6	%
Expected life (years)		2.0			2.0
Dividend yield		--			--

9

Future contractual maturities of debt are as follows:

Year ending December 31,
2015	$	277,340
2016		18,410
2017		94,563
2018		20,788
2019		18,315
	$	429,416

Note 5 – Commitments and Contingencies

On December 12, 2012, we concluded negotiations on a debt settlement agreement by and among the Company, Phoenix Productions and Entertainment Group ("PPEG"), Action Media Group, LLC ("Action Media") and Spirit Bear Limited ("Spirit Bear") (PPEG and Action Media collectively, the "Debt Holders"). The Debt Holders were to return to escrow a total of 4,676,000 shares of our common stock. 3,676,000 of these shares were returned and cancelled on January 14, 2013, following our filing a registration statement with the SEC on January 11, 2013. The remaining 1,000,000 shares will be purchased by the Company or a nominee of the Company at $0.40 per share (or $400,000) at the rate of $10,000 per month commencing within 90 days of the Company achieving $1,000,000 in gross revenues for products or services from business operations. PPEG and Action Media will divide the $400,000 on a pro rata basis, based on each company's respective amount of debt forgiven. The historical cost of the shares held in escrow are reflected in equity on the balance sheets as common stock held in escrow.

Effective June 1, 2015, we executed a First Amendment to Settlement Agreement (the "Amendment") with Spirit Bear and the parties identified as the assignees of Spirit Bear who are signatories to the Amendment, which amends certain provisions of our original Settlement Agreement with Spirit Bear. In accordance with the terms of the Amendment, Jay Palmer, Carrie Dwyer and Donica Holt, the Spirit Bear holdover directors, tendered their resignation from the Board of Directors of the Company. Spirit Bear also agreed that it will no longer have any rights to appoint nominees to the Board of Directors. Pursuant to the Amendment, the Company agreed to file a registration statement on Form S-1 covering an aggregate of 14,028,385 shares of common stock, preferred stock and warrants on behalf of Spirit Bear and its assignees no later than July 15, 2015, which was filed with the SEC on July 15, 2015. A representative of Spirit Bear agreed that the obligation to register the shares on a Form S-1 need only include shares of common stock and shares of common stock issuable upon conversion of the Preferred Stock and exercise of the warrants held by Spirit Bear and its assignees. The Company agreed to issue replacement warrants for certain previously-issued warrants, which will be canceled in connection with the replacement issuance. Within 10 business days of June 1, 2015, the parties agreed to dismiss all of the pending litigation between and among them. On August 28, 2015, the parties filed a stipulation to dismiss the direct claims of the Company against Spirit Bear and of Spirit Bear against the Company in the Nevada Lawsuit. By order dated September 1, 2015, and filed September 2, 2015, the court ordered dismissal of all direct claims in the Nevada Lawsuit.

Additionally, on February 20, 2015, the Court issued its preliminary approval to the derivative action settlement agreement (the "DASA'), which would lead to the ultimate dismissal of the derivative suit also filed by Spirit Bear in the same action. The Court has scheduled a fairness hearing for November 20, 2015, to consider giving its final approval to the DASA. No shareholder filed any objections to the DASA by April 30, 2015, which was the deadline established by the Court for filing objections. On October 22, 2015, however, Peak Finance, LLC ("Peak Finance") filed a Motion to Intervene in the action seeking, among other things, approval to file a new derivative Complaint in this matter. The Company has opposed this Motion.

On August 31, 2015, the Company received notice of a summons in the matter styled Peak Finance, Derivatively on Behalf of Nominal Defendant, HPEV, Inc. v. Hassett, et al., No. 2:15-cv-01590-GMN-CWH, filed in the United States District Court for the District of Nevada (the "Peak Finance Claim"). Plaintiff Peak Finance, LLC ("Peak Finance") alleges that certain members of the Company's Board of Directors and officers caused a misleading proxy statement to issue and breached alleged fiduciary duties from and after June 18, 2013. Peak Finance further alleges that its claim is related to the Spirit Bear Lawsuit described above. The Company has not determined that there is any merit to the allegations, and has decided to submit the claims to an Independent Director Committee consisting of Directors Christopher McKee, Richard J. "Dick" Schul, and Donald Bowman for their review and consideration. Additionally, on September 28, 2015, the Company filed a motion to dismiss the initial Complaint filed by Peak Finance. On October 22, 2015, rather than oppose the motion to dismiss, Peak Finance filed an amended complaint in this case in addition to the Motion to Intervene in the pending Spirit Bear litigation set forth above. On November 9, 2015, the Company filed a new motion to dismiss the first amended complaint filed by Peak Finance on October 22, 2015. No hearing is presently scheduled on this matter.

From time to time, we may be a party to other legal proceedings. Management currently believes that the ultimate resolution of these other matters, if any, and after consideration of amounts accrued, will not have a material adverse effect on our consolidated results of operations, financial position, or cash flow.

Note 6 – Equity

Common Stock

On August 19, 2015, the stockholders voted to increase the number of authorized shares of common stock from 100,000,000 shares to 140,000,000 shares.

In the nine months ended September 30, 2015, we received $40,020 for shares of our common stock; however, the shares were not issued as of September 30, 2015, and are included in Common stock issuable within the equity section of the condensed consolidated balance sheet.

In February, 2014, we entered into an agreement whereby we may sell up to $10,000,000 of our common stock to Lincoln Park Capital Fund LLC ("Lincoln Park") from time to time, subject to certain limitations, over a 36-month period, under a registration statement with respect to 4,671,785 shares of our common stock, which was declared effective by the SEC on July 3, 2014. The credit facility with Lincoln Park was mutually terminated as of April 23, 2015.

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Note 7 – Share-based payments

Amounts recognized as expense in the consolidated statements of operations related to share-based payments are as follows:

	Nine months ended September 30,
	2015			2014
Nonemployee common stock	$	571,207		$	596,750
Nonemployee warrants		55,849			7,240,930
Legal settlement – replacement warrants		1,119,450			--
Employee stock options		981,000			9,944,000
Total share-based expense charged against income	$	2,727,506		$	17,781,680
Impact on net loss per common share:
Basic and diluted	$	(0.04	)	$	(0.32	)

Nonemployee common stock

UPT management agreement

In July, 2014, we entered into an agreement with the company managing the operations of UPT, whereby we would issue common stock under the following conditions:

Condition	Number of Shares
UPT recognizes $100 million of revenue or a change in control		500,000
UPT recognizes $100 million of revenue		150,000
		650,000

As of September 30, 2015 and from the date of the agreement, meeting these conditions was not deemed probable, so no expense was recognized under this agreement and no common stock was issued.

Investor relations agreement

In June, 2014, we entered into an agreement with a company, which subsequently became a shareholder, to provide investor relations services. Under the terms of this agreement we agreed to issue 60,000 shares of common stock each quarter through May 2015, for a total of 240,000 shares. As of September 30, 2015, we have recognized the expense for all of the shares under the agreement. During the nine months ended September 30, 2015, we recorded expense at fair value of $61,200 for 120,000 shares. 60,000 remained unissued as of September 30, 2015, and are included in Common stock issuable within the equity section of the condensed consolidated balance sheet.

11

Financial advisory agreements

During the quarter ended June 30, 2015, we entered into separate agreements with three companies, which subsequently became shareholders, to provide financial advisory services, including developing, studying and evaluating a financing plan, strategic and financial alternatives, and merger and acquisition proposals. Under the terms of the agreements, we agreed to issue an aggregate of 333,332 shares of common stock each month through June 2016, as services were delivered, for a total of 5,000,000 shares over the term of the agreements. These agreements may be canceled by either party with a 30 day notice. During the three months ended June 30, 2015, we recorded expense at fair value of $510,007 for the issuance of 1,000,013 shares. If the services are provided and the agreements are not canceled, an additional 3,999,987 shares remain to be issued. During the quarter ended September 30, 2015, however, at management's request no services were provided, and no stock was earned or issued under these agreements.

Other

During the quarter ended September 30, 2015, we issued no other shares of common stock in exchange for services.

Nonemployee common stock warrants -- Fully-vested upon issuance

In July 2015, we issued 69,333 fully-vested warrants, with an exercise price of $0.40 per share and a life of 5 years, in exchange for financing advisory services. In June 2015, we issued 25,000 fully-vested warrants, with an exercise price of $0.70 per share and a life of four years, in exchange for financing advisory services.

Nonemployee common stock warrants -- Service and performance conditions

UPT management agreement

In July, 2014, we entered into a three year agreement with the company managing the operations of UPT, whereby we would issue common stock warrants under the following conditions:

		Number of
Vesting Condition	Category	Warrants
Fully vest upon UPT generating $1 million of revenue	Performance		350,000
45,945 warrants for every $3 million of revenue generated by UPT up to $100 million	Performance		1,530,000
60,000 warrants for every three months of completed service managing UPT	Service		720,000
			2,600,000

The common stock warrants have a three year life and an exercise price of $1.00 per share. The grant date fair value was $2,586,000. As of September 30, 2015 and since the date of the agreement, we have not deemed it probable that the performance conditions will be met, so no expense was recognized and no common stock warrants vested. During the nine months ended September 30, 2015, 180,000 of the common stock warrants under the service condition vested with the passage of time and we recognized expense of $48,868.

Financing advisory services

In March, 2014, we entered into an agreement with a company, which is also a shareholder, to provide financing advisory services, in return for 400,000 common stock warrants having a five year life and an exercise price of $2.50, with vesting in March, 2015 upon satisfactory performance under the agreement. As of December 31, 2014, we deemed it probable that the vesting conditions would be met. Accordingly, during the year ended December 31, 2014, we recognized estimated expense of $200,379. As of March 31, 2015, the service conditions were met and the award was re-valued at $179,964, resulting in a reduction in expense of $20,415 during the quarter ended March 31, 2015.

12

Summary

The following summarizes of the status of our nonvested common stock warrants with performance and service conditions as of September 30, 2015, and changes during the period then ended:

	Number of			Weighted-average Grant Date
	Warrants			Fair Value
Nonvested, December 31, 2014		2,880,000		$	0.98
Vested		(580,000	)		0.99
Nonvested, September 30, 2015		2,300,000		$	0.99

The following summarizes the Black-Scholes assumptions used to estimate the fair value of warrants with performance and service conditions during the nine months ended September 30, 2015:

Volatility	112 – 184%
Risk-free interest rate	0.9 – 1.4 %
Expected life (years)	3.0 – 5.0
Dividend yield	--

Legal settlement – Replacement warrants

Under the First Amendment to Settlement Agreement (the "Amendment") with Spirit Bear, we agreed to issue replacement warrants for certain previously-issued warrants (see Note 5). The 7,000,000 previously-issued warrants were issued in 2012, had exercise prices ranging from $0.35 to $0.75 per warrant, and expiration dates from April 2015 to April 2017. All of the replacement warrants have an exercise price of $0.25, while 6,000,000 expire in January 2017 and 1,000,000 expire in December 2015.

When a replacement equity instrument is issued, expense is recorded if the fair value of the new instruments is greater than the fair value of the original instruments. We recorded expense of $1,119,450 associated with the replacement warrants. The following summarizes the Black-Scholes assumptions used to estimate the fair value of the previously-issued warrants and the replacement warrants:

	Previously-issued		Replacement
Volatility	245 – 245%		173%
Risk-free interest rate	0.6 – 0.3 %		0.1 – 0.7 %
Expected life (years)	2.0 – 4.5		0.6 – 1.8
Dividend yield		--	--

13

Employee stock options – Fully-vested

We granted no additional fully-vested options during the nine months ended September 30, 2015.

Employee stock options – Market-based

We granted no additional options that vest upon the achievement of certain stock prices during the nine months ended September 30, 2015. No additional non-vested market-based options vested during the quarter ended September 30, 2015.

Note 8 – Net Loss per Share

Basic net loss per share is computed by dividing net loss by the weighted-average number of common shares outstanding during the reporting period. Diluted net loss per share is computed similarly to basic loss per share, except that it includes the potential dilution that could occur if dilutive securities are exercised.

The following table presents a reconciliation of the denominators used in the computation of net loss per share – basic and diluted:

	Three months ended September 30,						Nine months ended September 30,
	2015			2014			2015			2014
Net loss available for stockholders	$	(977,343	)	$	(2,696,097	)	$	(5,205,783	)	$	(21,578,404	)
Weighted average outstanding shares of common stock		66,089,776			59,636,423			63,938,744			55,190,022
Dilutive effect of stock options and warrants		--			--			--			--
Common stock and equivalents		66,089,776			59,636,423			63,938,744			55,190,022
Net loss per share – Basic and diluted	$	(0.01	)	$	(0.05	)	$	(0.08	)	$	(0.39	)

Outstanding stock options and common stock warrants are considered anti-dilutive because we are in a net loss position. Management has agreed to not exercise their stock options until the number of authorized shares has been increased.

Note 9 – Subsequent Events

On October 9, 2015, we entered into two promissory notes with unrelated individuals, with principal and interest payable of $400,000 on March 31, 2016. We received cash of $350,000, with the $50,000 representing an original issue discount, or interest.

14

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

General Discussion and Outlook

Cool Technologies, Inc., (we, us, our, the "Company" or "Cool Technologies") was incorporated in the State of Nevada on July 22, 2002. We were formerly known as Bibb Corporation, Z3 Enterprises and HPEV, Inc. On August 20, 2015, we changed our name to Cool Technologies, Inc. We have developed and intend to commercialize thermal dispersion technologies in various product platforms and a parallel power input gearbox, around which we have designed a mobile generator system that can be retrofit onto new and existing trucks. In preparation, we have applied for trademarks for one of our technologies and its acronym. The Company currently has two trademarks: HPEV and TEHPC.

We believe that our proprietary technologies, including our patent portfolio and trade secrets, can help increase the efficiency and positively impact the manufacturing cost structure in several large industries beginning with motor/generator and fleet vehicles. The markets for products utilizing our technology include consumer, industrial and military markets, both in the U.S. and worldwide. As of September 30, 2015, we have five patents and seven patent applications pending in the area of composite heat structures, motors, and related structures, heat pipe architecture, applications (commonly referred to as "thermal" or "heat dispersion technology") and a parallel power vehicle platform. We intend to commercialize our patents by licensing our thermal technologies and applications to electric motor, pump and vehicle component manufacturers; and by licensing or selling a mobile electric power system powered by our proprietary gearing system to commercial vehicle and fleet owners.

The patents and patents-pending cover heat pipe architecture(s) and their applications, a parallel power platform and a parallel power gearing system. Additionally, we believe that the technology enhances the lifespan and effectiveness of many types of heat-producing mechanical equipment including vehicle components. Our thermal technology delivers the power density of a water-cooled motor or generator in a totally enclosed and nearly maintenance free enclosure. We project that our patent-pending Radial Vent Thermal technology can increase power density in several classes of motor enclosure ratings including Open, WPI (Weather Protected I) and WPII (Weather Protected II) enclosures by up to 20%. The parallel power platform enables vehicles, regardless of their fuel type (diesel, gas, CNG, LNG, fuel cell and battery operated), to alternate between two sources of power and forms the basis of an electric load assist delivered to the engine. The parallel power input gearing unit enables vehicles to run an on-board generator to deliver mobile electric power.

We intend to license heat pipe technology to manufacturers of electric motors, electric generators, as well as manufacturers of vehicle parts, such as brakes, resistors and calipers. In Mobile Generation, we have nearly completed the development of our 25 kilowatt ("kW") demonstration vehicle and we intend to commercialize the product through retrofit on several vehicle platforms during 2015. We also intend to develop and commercialize Mobile Generation in power output ranges from 25kW up to 200kW in 2016. The demonstration vehicles will be used to showcase the effectiveness of the technology, generate data and as a marketing tool to generate orders. The target markets include public utilities, commercial and fleet vehicles, including heavy duty pick-up trucks, and other work vehicles. We have executed product development agreements with two multi-national manufacturers. We are currently negotiating with a number of fleet owners and manufacturers to install our Mobile Generation system in their work vehicles. We opened our UPT headquarters in May 2014 in Largo, Florida, to service the state's west coast and Port Tampa Bay.

We generated our first Mobile Generation order during the quarter ended June 30, 2014, and received a partial deposit in advance of completing the sale. We currently expect to begin to generate revenue in the first half of 2016. There can be no assurances that we will be able to do so in this timeframe, or at all. Currently, we primarily incur expenses to commercialize our products, which include costs for research and development, professional fees and general operations.

At a Special Meeting of Stockholders on August 19, 2015, stockholders voted to change our name from HPEV, Inc. to "Cool Technologies, Inc." and increase the number of authorized shares of our common stock from 100,000,000 shares to 140,000,000 shares. The stockholders also elected four new directors.

15

Results of Operations

The following table sets forth, for the periods indicated, condensed consolidated statements of operations data. The table and the discussion below should be read in conjunction with the accompanying condensed consolidated financial statements and the notes thereto, appearing elsewhere in this report.

	Three months ended September 30,
	2015			2014			Change			%
Revenues	$	--		$	--		N/A			N/A
Operating expenses
Payroll and related expenses		198,787			278,425		$	(79,638	)		(29	)%
Consulting		48,203			879,633			(831,430	)		(95	)%
Professional fees		88,488			231,540			(143,052	)		(62	)%
Research and development		150,398			500,808			(350,410	)		(70	)%
General and administrative		490,056			809,006			(318,950	)		(39	)%
Total operating expenses		975,932			2,699,412			(1,723,480	)		(64	)%
Interest expense, net		(7,080	)		(2,403	)		(4,677	)		195	%
Change in fair value of derivative liability		2,324			--			2,324		N/A
Net loss		(980,688	)		(2,701,815	)		1,721,127			(64	)%
Less: Noncontrolling interest		(3,345	)		(5,718	)		2,373			(42	)%
Net loss to shareholders	$	(977,343	)	$	(2,696,097	)	$	1,718,754			(64	)%

	Nine months ended September 30,
	2015			2014			Change			%
Revenues	$	--		$	--		N/A			N/A
Operating expenses
Payroll and related expenses		612,325			765,786		$	(153,461	)		(20	)%
Consulting		814,856			8,124,783			(7,309,927	)		(90	)%
Professional fees		503,165			548,511			(45,346	)		(8	)%
Research and development		717,988			936,221			(218,233	)		(23	)%
General and administrative		1,441,376			11,198,714			(9,757,338	)		(87	)%
Total operating expenses		4,089,710			21,574,015			(17,484,305	)		(81	)%
Interest expense, net		(11,655	)		(11,652	)		(3	)		--	%
Change in fair value of derivative liability		2,324			--			2,324		N/A
Legal settlement – replacement warrants		(1,119,450	)		--			(1,119,450	)	N/A
Net loss		(5,218,491	)		(21,585,667	)		16,367,176			(76	)%
Less: Noncontrolling interest		(12,708	)		(7,263	)		(5,445	)		75	%
Net loss to shareholders	$	(5,205,783	)	$	(21,578,404	)	$	16,372,621			(76	)%

16

Revenues

During the three and nine months ended September 30, 2015 and 2014, and since inception, we have not generated any revenues.

Operating Expenses

Payroll and related expenses decreased for the three and nine months ended September 30, 2015 compared to 2014, due to bonuses paid to management in 2014 for meeting milestones in their compensation agreements related to fundraising and filing patents. Consulting expense decreased primarily due to a reduction in share-based payments for fundraising and other consulting during the three months ended September 30 from $844,990 in 2014 to $23,962 in 2015, and for the nine months ended September 30 from $7,837,680 in 2014 to $627,056 in 2015. Professional fees remained relatively flat during the periods reported. Research and development decreased as we focus our efforts transitioning our technology to the point of generating revenue. General and administrative expense (a) decreased due to a reduction in employee stock option expense for the three months ended September 30 from $394,000 in 2014 to $327,000 in 2015, and for the nine months ended September 30 from $9,944,000 in 2014 to $981,000 in 2015; and (b) decreased due to managing cash expenditures, primarily associated with promoting the company and travel.

Other Income and Expense

Interest expense in 2015 relates primarily to our vehicle financing, while in 2014 it related to interest on unpaid invoices for services. The change in fair value of derivative liability reflects the change in fair value of the conversion feature embedded in the convertible debt agreement we entered into in September 2015. The legal settlement expense in 2015 represents the difference between the value of the original warrants and the replacement warrants issued to Spirit Bear Ltd. ("Spirit Bear") under the First Amendment to Settlement Agreement with Spirit Bear.

Net Loss and Noncontrolling interest

Since we have incurred losses since inception, we have not recorded any income tax expense or benefit. Accordingly, our net loss is driven by our operating and other expenses. Noncontrolling interest represents the 5% third-party ownership in UPT, which is subtracted to calculate Net loss to shareholders.

Liquidity and Capital Resources

We have historically met our liquidity requirements primarily through the public sale and private placement of equity securities, debt financing, and exchanging common stock warrants and options for professional and consulting services. At September 30, 2015, we had cash and cash equivalents of $25,174.

Working capital is the amount by which current assets exceed current liabilities. We had negative working capital of $2,647,854 and $1,244,784, respectively, at September 30, 2015 and December 31, 2014. The decrease in working capital was due to an increase in accounts payable, amounts due to related parties, and incurring debt to finance vehicles and for working capital purposes.

On September 15, 2015, we entered into a convertible debt agreement (the "Convertible Debt") with an unrelated individual, bearing interest at 10%, with principal and interest payable on September 15, 2017. We may borrow up to $250,000 under the Convertible Debt. At the Convertible Debt holder's option, a portion or all of the unpaid principal and interest may be converted into shares of our common stock at the lesser of $0.305 per share or 65% of the volume weighted average price during the five consecutive trading days immediately preceding the applicable conversion date. As of September 30, 2015, we had borrowed $75,000.

We executed an agreement on February 19, 2014, with Lincoln Park Capital Fund, LLC ("Lincoln Park"), which gave us the right to sell to Lincoln Park up to $10,000,000 in shares of our common stock, subject to certain limitations, over a 36-month period, under a registration statement with respect to 4,671,785 shares of our common stock, which was declared effective by the SEC on July 3, 2014. The credit facility with Lincoln Park was mutually terminated as of April 23, 2015.

Separate from the above agreement, in April 2015, we entered into a subscription agreement with Lincoln Park, pursuant to which Lincoln Park agreed to purchase 555,556 shares of common stock and five-year warrants to purchase 555,556 shares of common stock, for cash proceeds of $225,000 at an exercise price of $0.60 per share, net of $25,000 retained by Lincoln Park for expenses. The warrants contain a cashless exercise provision.

We currently have no off-balance sheet arrangements.

17

Cash Flows

Our cash flows from operating, investing and financing activities were as follows:

	Nine months ended September 30,
	2015			2014
Net cash used in operating activities	$	(1,541,050	)	$	(2,963,056	)
Net cash used in investing activities		(12,772	)		(24,921	)
Net cash provided by financing activities		1,407,125			3,426,652

Net cash used in operating activities decreased primarily due to deferring payment to vendors and management. Our investing activity relates to purchasing equipment in 2015 the development of patents in both years. Cash provided by financing activities was limited by our trying to settle our lawsuit with Spirit Bear, and borrowing $325,000 in 2015.

Management believes the Company's funds are insufficient to provide for its projected needs for operations for the next 12 months. We will need additional funding to support product development and working capital needs. We hope to raise additional funds by selling our equity securities; however, there can be no assurance that we will be able to raise such additional financing.

Going Concern

We have incurred net losses of $37,626,928 since inception and have not fully commenced operations, raising substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern is dependent on our ability to generate revenue, achieve profitable operations and repay our obligations when they come due.

Critical Accounting Estimates

Our condensed consolidated financial statements and the accompanying notes have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires management to make estimates, judgments and assumptions that affect reported amounts of assets, liabilities, and expenses. We continually evaluate the accounting policies and estimates used to prepare the condensed consolidated financial statements. The estimates are based on historical experience and assumptions believed to be reasonable under current facts and circumstances. Actual amounts and results could differ from these estimates made by management. Certain accounting policies that require significant management estimates and are deemed critical to our results of operations and financial position are discussed in our Annual Report on Form 10-K for the year ended December 31, 2014 in "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations."

Item 3. Quantitative and Qualitative Disclosures About Market Risk

As a smaller reporting company, we are not required to provide the information required by this Item.

18

Item 4. Controls and Procedures

Our management does not expect that our internal controls over financial reporting will prevent all errors and all fraud. Control systems, no matter how well conceived and managed, can provide only reasonable assurance that the objectives of the control system are met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake.

Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, as of September 30, 2015, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended. Based on this evaluation, our principal executive officer and principal financial officer have concluded that, based on the material weaknesses discussed below, our disclosure controls and procedures were not effective as of such date to ensure that information required to be disclosed by us in reports filed or submitted under the Securities Exchange Act were recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Act Commission's rules and forms and that our disclosure controls are not effectively designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act is accumulated and communicated to management, including our principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Our internal controls are not effective for the following reasons, (1) there are no entity level controls, because of the limited time and abilities of the Company's five officers, (2) there is no separate audit committee, and (3) we have not implemented adequate system and manual controls. As a result, the Company's internal controls have inherent weaknesses, which may increase the risks of errors in financial reporting under current operations and accordingly are not effective as evaluated against the criteria set forth in the Internal Control – Integrated Framework issued by the committee of Sponsoring Organizations of the Treadway Commission (1992 version). Based on our evaluation, our management concluded that our internal controls over financial reporting were not effective as of September 30, 2015.

Going forward, we intend to evaluate our processes and procedures and, where practicable, implement changes in order to have more effective controls over financial reporting.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting during the last quarterly period covered by this report that have materially affected, or are reasonably likely to affect, our internal control over financial reporting.

19

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Spirit Bear Ltd.

Effective May 1, 2015, we executed a First Amendment to Settlement Agreement (the "Amendment") with Spirit Bear and the parties identified as the assignees of Spirit Bear who are signatories to the Amendment, which amends certain provisions of the Settlement Agreement. In accordance with the terms of the Amendment, Jay Palmer, Carrie Dwyer and Donica Holt, the Spirit Bear holdover directors, tendered their resignation from the Board of Directors of the Company. Spirit Bear also agreed that it will no longer have any rights to appoint nominees to the Board of Directors. Pursuant to the Amendment, the Company agreed to file a registration statement on Form S-1 covering an aggregate of 14,845,072 shares of common stock, preferred stock and warrants on behalf of Spirit Bear and its assignees no later than July 15, 2015, which was filed with the SEC on July 15, 2015. A representative of Spirit Bear agreed that the obligation to register the shares on a Form S-1 need only include shares of common stock and shares of common stock issuable upon conversion of the Preferred Stock and exercise of the warrants held by Spirit Bear and its assignees. The Company agreed to issue replacement warrants for certain previously-issued warrants, which will be canceled in connection with the replacement issuance. Within 10 business days of June 1, 2015, the parties agreed to dismiss all of the pending litigation between and among them. On August 28, 2015, the parties filed a stipulation to dismiss the direct claims of the Company against Spirit Bear and of Spirit Bear against the Company in the Nevada Lawsuit. By order dated September 1, 2015, and filed September 2, 2015, the court ordered dismissal of all direct claims in the Nevada Lawsuit.

Additionally, on February 20, 2015, the Court issued its preliminary approval to the derivative action settlement agreement (the "DASA'), which would lead to the ultimate dismissal of the derivative suit also filed by Spirit Bear in the same action. The Court has scheduled a fairness hearing for November 20, 2015, to consider giving its final approval to the DASA. No shareholder filed any objections to the DASA by April 30, 2015, which was the deadline established by the Court for filing objections. On October 22, 2015, however, Peak Finance, LLC ("Peak Finance") filed a Motion to Intervene in the action seeking, among other things, approval to file a new derivative Complaint in this matter. The Company has opposed this Motion.

SEC Subpoena

On September 18, 2013, separate and distinct from the settlement of the lawsuit discussed above, the SEC served the Company with a subpoena entitled In the Matter of HPEV, Inc. The subpoena requested documents relating to several matters, including Spirit Bear, Robert Olins and all of their respective affiliates. Although the Company has not heard anything further concerning the investigation, the Company continues to comply with the subpoena, providing documents in its possession to the SEC on a rolling basis.

U.S. District Court, District of Nevada

On August 31, 2015, the Company received notice of a summons in the matter styled Peak Finance, LLC, Derivatively on Behalf of Nominal Defendant, HPEV, Inc. v. Hassett, et al., No. 2:15-cv-01590-GMN-CWH, filed in the United States District Court for the District of Nevada (the "Peak Finance Claim"). Plaintiff Peak Finance, LLC ("Peak Finance") alleges that certain members of the Company's Board of Directors and officers caused a misleading proxy statement to issue and breached alleged fiduciary duties from and after June 18, 2013. Peak Finance further alleges that its claim is related to the Spirit Bear Lawsuit described above. The Company has not determined that there is any merit to the allegations, and has decided to submit the claims to an Independent Director Committee consisting of Directors Christopher McKee, Richard J. "Dick" Schul, and Donald Bowman for their review and consideration. Additionally, on September 28, 2015, the Company filed a motion to dismiss the initial Complaint filed by Peak Finance. On October 22, 2015, rather than oppose the motion to dismiss, Peak Finance filed an amended complaint in this case in addition to the Motion to Intervene in the pending Spirit Bear litigation set forth above. On November 9, 2015, the Company filed a new motion to dismiss the first amended complaint filed by Peak Finance on October 22, 2015. No hearing is presently scheduled on this matter.

Item 1A. Risk Factors

As a smaller reporting company, we are not required to provide the information required by this Item.

20

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

On July 23, 2015, we issued an aggregate of 866,666 shares and a five-year warrant to purchase an aggregate of 866,666 shares of our common stock at an exercise price of $0.40 per share to six accredited investors in a private offering. We received an aggregate of $260,000 as consideration for the sale of such securities. The warrants may be exercised on a cashless basis.

On July 29, 2015, we issued 142,857 shares and a five-year warrant to purchase 142,857 shares of our common stock at an exercise price of $0.40 per share to an accredited investor in a private offering. We received $50,000 as consideration for the sale of such securities. The warrants may be exercised on a cashless basis.

On July 29, 2015, we issued 62,500 shares and a five-year warrant to purchase 62,500 shares of our common stock at an exercise price of $0.47 per share to an accredited investor in a private offering. We received $25,000 as consideration for the sale of such securities. The warrants may be exercised on a cashless basis.

On August 12, 2015, Spirit Bear converted four shares of preferred stock in exchange for 200,000 shares of common stock.

We issued warrants for our common stock to accredited investors in exchange for services during the three months ended September 30, 2015, as follows:

Date	Quantity		Exercise Price		Life (Years)
July 2015		69,333	$	0.40		5.0
September 2015		60,000		1.00		3.0

On September 15, 2015, we entered into a convertible debt agreement (the "Convertible Debt") with an unrelated individual, bearing interest at 10%, with principal and interest payable on September 15, 2017. We may borrow up to $250,000 under the Convertible Debt. At the Convertible Debt holder's option, a portion or all of the unpaid principal and interest may be converted into shares of our common stock at the lesser of $0.305 per share or 65% of the volume weighted average price during the five consecutive trading days immediately preceding the applicable conversion date. As of September 30, 2015, we had borrowed $75,000.

None of the above issuances involved any underwriters, underwriting discounts or commissions, or any public offering and we believe we are exempt from the registration requirements of the Securities Act of 1933 by virtue of Section 4(2) thereof and/or Regulation D promulgated thereunder.

Item 3. Defaults Upon Senior Securities

None.

Item 5. Other Information

None.

21

Item 6. Exhibits

31.1	Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.
31.2	Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.
32.1	Chief Executive Officer Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Chief Financial Officer Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101 XBRL Interactive Data Files

22

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Cool Technologies, Inc.
Dated: November 16, 2015	By:	/s/ Timothy Hassett
		Timothy Hassett
		Chief Executive Officer
		(Principal Executive Officer)
Dated: November 16, 2015	By:	/s/ Quentin Ponder
		Quentin Ponder
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

23

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE

SARBANES-OXLEY ACT OF 2002

I, Timothy Hassett, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of Cool Technologies, Inc (the "registrant") for the quarter ended September 30, 2015;
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 Exhibit 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 an 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.

Dated: November 16, 2015	By:	/s/ Timothy Hassett
		Timothy Hassett
		Chief Executive Officer (Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE

SARBANES-OXLEY ACT OF 2002

I, Quentin Ponder, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of Cool Technologies, Inc. (the "registrant") for the quarter ended September 30, 2015;
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;
2.	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 Exhibit 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 an 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.

 

Dated: November 16, 2015	By:	/s/ Quentin Ponder
		Quentin Ponder
		Chief Financial Officer (Principal Financial and Accounting Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO 18 USC, SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Cool Technologies, Inc. (the "Company") on Form 10-Q for the quarter ended September 30, 2015, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Timothy Hassett, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Sec. 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1)	The Report fully complies with the requirements of Sections 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Dated: November 16, 2015	By:	/s/ Timothy Hassett
		Timothy Hassett
		Chief Executive Officer (Principal Executive Officer)

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO 18 USC, SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Cool Technologies, Inc. (the "Company") on Form 10-Q for the quarter ended September 30, 2015, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Quentin Ponder, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Sec. 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1)	The Report fully complies with the requirements of Sections 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	Information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Dated: November 16, 2015	By:	/s/ Quentin Ponder
		Quentin Ponder
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

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7. Share-based payments (Details Narrative)	9 Months Ended
	Sep. 30, 2015 USD ($) shares
Common stock warrants under the service condition vested | shares	180,000
Recognized expense	$ 48,868
Investor relations agreement [Member]
Issuance of common stock | shares	120,000
Recorded expense	$ 61,200

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Debt (Details Narrative) - USD ($)	1 Months Ended	9 Months Ended
	Sep. 15, 2015	Sep. 30, 2015
Debt Details Narrative
Fair value of the Derivative liability	$ 75,650	$ 73,326

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Debt

9 Months Ended

Sep. 30, 2015

Notes to Financial Statements

Note 4 - Debt

Debt consists of the following:

	September 30,			December 31,
	2015			2014
Note payable – officer	$	22,910		$	22,910
Note payable – UPT minority owner		250,000			--
Test vehicle financing		81,506			94,401
Convertible debt		75,000			--
		429,416			117,311
Debt discount		(73,461	)		--
		355,955			117,311
Less: current portion		292,581			40,235
Long-term portion	$	63,374		$	77,076

The note payable – officer is non-interest bearing and is due on demand, payable to the Secretary of Cool Technologies.

The note payable – UPT minority owner is with the 5% owner of UPT. The terms of the note have not been finalized.

In October 2014, we entered into financing agreements for the purchase of test vehicles, bearing interest at 5.99% payable monthly over five years, collateralized by the vehicles.

On September 15, 2015, we entered into a convertible debt agreement (the "Convertible Debt") with an unrelated individual, bearing interest at 10%, with principal and interest payable on September 15, 2017. We may borrow up to $250,000 under the Convertible Debt. At the Convertible Debt holder's option, a portion or all of the unpaid principal and interest may be converted into shares of our common stock at the lesser of $0.305 per share or 65% of the volume weighted average price during the five consecutive trading days immediately preceding the applicable conversion date. We determined that the conversion feature meets the requirements for derivative treatment and have recorded a Derivative liability and a corresponding debt discount on the condensed consolidated balance sheet. We estimated the fair value of the Derivative liability of $75,650 and $73,326, respectively, on September 15, 2015 and September 30, 2015.

The following summarizes the Black-Scholes assumptions used to estimate the fair value of the derivative liability at the date of issuance and the revaluation date:

	September 15, 2015			September 30, 2015
Volatility		112	%		112	%
Risk-free interest rate		0.8	%		0.6	%
Expected life (years)		2.0			2.0
Dividend yield		--			--

Future contractual maturities of debt are as follows:

Year ending December 31,
2015	$	277,340
2016		18,410
2017		94,563
2018		20,788
2019		18,315
	$	429,416

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7. Share-based payments (Details 2)	9 Months Ended
	Sep. 30, 2015 shares
Common stock warrants issued	2,600,000
Vesting Condition One [Member]
Common stock warrants issued	350,000
Category	Performance
Vesting Condition Two [Member]
Common stock warrants issued	1,530,000
Category	Performance
Vesting Condition Three [Member]
Common stock warrants issued	720,000
Category	Service

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7. Share-based payments (Details 1)	Sep. 30, 2015 shares
Common stock shares issued	650,000
Condition One [Member]
Common stock shares issued	500,000
Condition Two [Member]
Common stock shares issued	150,000

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7. Share-based payments (Details 3)	9 Months Ended
	Sep. 30, 2015 $ / shares shares
Number of Warrants
Nonvested, Ending | shares	2,300,000
Weighted-average Grant Date Fair Value
Nonvested, Ending	$ 0.99
Nonemployee Common stock warrants - Service and performance conditions [Member]
Number of Warrants
Nonvested, Beginning | shares	2,880,000
Vested | shares	(580,000)
Weighted-average Grant Date Fair Value
Nonvested, Beginning	$ 0.98
Vested	$ 0.99

XML

7. Share-based payments (Details 4) - Nonemployee Common stock warrants - Service and performance conditions [Member]	9 Months Ended
	Sep. 30, 2015
Dividend yield	0.00%
Minimum [Member]
Volatility	112.00%
Risk-free interest rate	0.90%
Expected life (years)	3 years
Maximum [Member]
Volatility	184.00%
Risk-free interest rate	1.40%
Expected life (years)	5 years

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Customer deposits - Related party

9 Months Ended

Sep. 30, 2015

Notes to Financial Statements

Note 3 - Customer deposits - Related party

These represent advance payments of $400,000 received on orders that have not yet been fulfilled, with companies controlled by the individual who is the 5% owner of UPT and a shareholder.

XML

7. Share-based payments (Details 5)	9 Months Ended
	Sep. 30, 2015
Previously Issued [Member]
Dividend yield	0.00%
Previously Issued [Member] | Minimum [Member]
Volatility	245.00%
Risk-free interest rate	0.60%
Expected life (years)	2 years
Previously Issued [Member] | Maximum [Member]
Volatility	245.00%
Risk-free interest rate	0.30%
Expected life (years)	4 years 6 months
Replacement [Member]
Volatility	173.00%
Dividend yield	0.00%
Replacement [Member] | Minimum [Member]
Risk-free interest rate	0.10%
Expected life (years)	7 months 6 days
Replacement [Member] | Maximum [Member]
Risk-free interest rate	0.70%
Expected life (years)	1 year 9 months 18 days

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Condensed Consolidated Balance Sheets - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Current assets
Cash	$ 25,174	$ 171,871
Prepaid expenses	68,730	57,018
Total current assets	93,904	228,889
Intangible	147,572	139,800
Equipment, net	104,084	118,453
Total assets	345,560	487,142
Current liabilities
Accounts payable	1,335,489	529,736
Accrued liabilities - related party	611,093	489,535
Customer deposits - related party	400,000	400,000
Accrued payroll taxes	29,269	14,167
Debt, current portion	292,581	$ 40,235
Derivative liability	73,326
Total current liabilities	2,741,758	$ 1,473,673
Debt, long-term portion, net of debt discount	63,374	77,076
Total liabilities	$ 2,805,132	$ 1,550,749
Commitments and contingencies (Note 5)
Stockholders' equity (deficit):
Preferred stock, $.001 par value; 15,000,000 shares authorized;136 and 140 shares issued and outstanding at September 30, 2015 and December 31, 2014, Respectively
Common stock, $.001 par value; 140,000,000 shares authorized; 66,464,653 and 61,439,134 shares issued and outstanding at September 30, 2015 and December 31, 2014, respectively	$ 65,793	$ 60,767
Additional paid-in capital	35,023,099	30,864,669
Common stock issuable	95,000	435,930
Common stock held in escrow	8,441	8,441
Accumulated deficit	(37,626,928)	(32,421,145)
Total deficit	(2,434,595)	(1,051,338)
Noncontrolling interest in subsidiary	(24,977)	(12,269)
Total stockholders' deficit	(2,459,572)	(1,063,607)
Total liabilities and stockholders' equity	$ 345,560	$ 487,142

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Description of Business and Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2015

Notes to Financial Statements

Note 1 - Description of Business and Summary of Significant Accounting Policies

Description of Business

Cool Technologies, Inc. and subsidiary, (we, us, our, the "Company" or "Cool Technologies") was incorporated in the State of Nevada in July 2002. In April 2014, we formed Ultimate Power Truck, LLC ("Ultimate Power Truck" or "UPT"), of which we own 95% and a shareholder of Cool Technologies owns 5%. We were formerly known as Bibb Corporation, as Z3 Enterprises, and as HPEV Inc. On August 20, 2015, we changed our name to Cool Technologies, Inc.

We have developed and intend to commercialize thermal dispersion technologies in various product platforms and a parallel power input gearbox, around which we have designed a mobile generator system that can be retrofit onto new and existing trucks. In preparation, we have applied for trademarks for one of our technologies and its acronym. We currently have two trademarks: HPEV and TEHPC. We believe that our proprietary technologies, including our patent portfolio and trade secrets, can help increase the efficiency and positively affect manufacturing cost structure in several large industries beginning with motors/generators and fleet vehicles. The markets for products utilizing our technology include consumer, industrial and military markets, both in the U.S. and worldwide.

Our technologies are divided into two distinct but complementary categories: heat dispersion technology and mobile electric power. As of September 30, 2015, we have five patents and seven patent applications pending in the area of composite heat structures, motors, and related structures, heat pipe architecture, applications (commonly referred to as "thermal" or "heat dispersion technology") and a parallel power vehicle platform. We intend to commercialize our patents by licensing our thermal technologies and applications to electric motor, pump and vehicle component manufacturers; and by licensing or selling a mobile electric power system powered by our proprietary gearing system to commercial vehicle and fleet owners.

Basis of Presentation

The accompanying condensed consolidated balance sheet as of December 31, 2014, has been derived from audited financial statements. The accompanying unaudited interim condensed consolidated financial statements have been prepared on the same basis as the annual audited financial statements and in accordance with accounting principles generally accepted in the United States ("GAAP") for interim financial information and the rules and regulations of the Securities and Exchange Commission ("SEC") for interim financial statements. In the opinion of management, such unaudited information includes all adjustments (consisting only of normal recurring accruals) necessary for a fair presentation of this interim information. All intercompany transactions have been eliminated in consolidation. Noncontrolling interest represents the 5% third party ownership of our subsidiary, UPT. Operating results and cash flows for interim periods are not necessarily indicative of results that can be expected for the entire year. The information included in this report should be read in conjunction with our audited financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2014.

Going Concern

The accompanying condensed consolidated financial statements have been prepared assuming we will continue as a going concern. We have incurred net losses of $37,626,928 since inception and have not fully commenced operations, raising substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern is dependent on our ability to generate revenue, achieve profitable operations and repay our obligations when they come due. These consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty. As of the filing date of this Quarterly Report on Form 10-Q, management is negotiating additional funding arrangements to support completion of the initial phases of our business plan: to license its thermal technologies and applications, including submersible dry-pit applications; and to license and sell mobile generation retrofit kits (our Ultimate Power Truck business) driven by our proprietary gearing system. There can be no assurance, however, that we will be successful in raising additional financing and accomplishing these objectives.

Accounting Policy

Derivative financial instruments -- When we issue debt that contains a conversion feature, we first evaluate whether the conversion feature meets the requirements to be treated as a derivative: a) one or more underlyings, typically the price of the company's stock; b) one or more notional amounts or payment provisions or both, generally the number of shares upon conversion; c) no initial net investment, which typically excludes the amount borrowed; and d) net settlement provisions, which in the case of convertible debt generally means the stock received upon conversion can be readily sold for cash. There are certain scope exceptions from derivative treatment, but these typically exclude conversion features that provide for a variable number of shares.

If the conversion feature within convertible debt meets the requirements to be treated as a derivative, we estimate the fair value of the derivative liability using the Black-Scholes Option Pricing Model upon the date of issuance. If the fair value of the derivative liability is higher than the face value of the convertible debt, the excess is immediately recognized as interest expense. Otherwise, the fair value of the derivative liability is recorded as a liability with an offsetting amount recorded as a debt discount, which offsets the carrying amount of the debt. The derivative liability is revalued at the end of each reporting period and any change in fair value is recorded as a change in fair value in the condensed consolidated statement of operations. The debt discount is amortized through interest expense over the life of the debt. Derivative instrument liabilities and the host debt agreement are classified on the balance sheet as current or non-current based on whether settlement of the derivative instrument could be required within twelve months of the balance sheet date.

Recently Issued Accounting Pronouncements

We have evaluated the other recent accounting pronouncements through ASU 2015-16 and believe that none of them will have a material effect on our financial statements.

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4. Debt (Details) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Debt Details
Note payable - officer	$ 22,910	$ 22,910
Note payable - UPT minority owner	250,000
Test vehicle financing	81,506	$ 94,401
Convertible debt	75,000
Total	429,416	$ 117,311
Debt discount	(73,461)
Total	355,955	$ 117,311
Less: current portion	292,581	40,235
Long-term portion	$ 63,374	$ 77,076

XML

4. Debt (Details 2) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Debt Details 2
2015	$ 277,340
2016	18,410
2017	94,563
2018	20,788
2019	18,315
Total	$ 429,416	$ 117,311

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Equipment

9 Months Ended

Sep. 30, 2015

Notes to Financial Statements

Note 2 - Equipment

Equipment consists of the following:

	September 30,			December 31,
	2015			2014
Test vehicles	$	124,687		$	124,687
Other		5,000			--
		129,687			124,687
Less: accumulated depreciation		(25,603	)		(6,234	)
	$	104,084		$	118,453

Depreciation expense for the nine months ended September 30, 2015 and 2014, respectively, was $19,369 and zero.

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Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2015	Dec. 31, 2014
Stockholders' Equity (Deficit):
Preferred stock par value	$ 0.001	$ 0.001
Preferred stock shares authorized	15,000,000	15,000,000
Preferred stock shares issued	136	140
Preferred stock shares outstanding	136	140
Common stock par value	$ 0.001	$ 0.001
Common stock shares authorized	140,000,000	140,000,000
Common stock shares issued	66,464,653	61,439,134
Common stock shares outstanding	66,464,653	61,439,134

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Debt (Tables)

9 Months Ended

Sep. 30, 2015

Debt Tables

Summary of Debt

	September 30,			December 31,
	2015			2014
Note payable – officer	$	22,910		$	22,910
Note payable – UPT minority owner		250,000			--
Test vehicle financing		81,506			94,401
Convertible debt		75,000			--
		429,416			117,311
Debt discount		(73,461	)		--
		355,955			117,311
Less: current portion		292,581			40,235
Long-term portion	$	63,374		$	77,076

Fair value of the derivative liability

	September 15, 2015			September 30, 2015
Volatility		112	%		112	%
Risk-free interest rate		0.8	%		0.6	%
Expected life (years)		2.0			2.0
Dividend yield		--			--

Future contractual maturities of debt

Year ending December 31,
2015	$	277,340
2016		18,410
2017		94,563
2018		20,788
2019		18,315
	$	429,416

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Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2015	Nov. 09, 2015
Document And Entity Information
Entity Registrant Name	HPEV, INC.
Entity Central Index Key	0001399352
Document Type	10-Q
Document Period End Date	Sep. 30, 2015
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		67,514,653
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2015

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Share-based payments (Tables)

9 Months Ended

Sep. 30, 2015

Financial statements related to equity-based payments

	Nine months ended September 30,
	2015			2014
Nonemployee common stock	$	571,207		$	596,750
Nonemployee warrants		55,849			7,240,930
Legal settlement – replacement warrants		1,119,450			--
Employee stock options		981,000			9,944,000
Total share-based expense charged against income	$	2,727,506		$	17,781,680
Impact on net loss per common share:
Basic and diluted	$	(0.04	)	$	(0.32	)

Common stock warrants performance and service conditions:

		Number of
Vesting Condition	Category	Warrants
Fully vest upon UPT generating $1 million of revenue	Performance		350,000
45,945 warrants for every $3 million of revenue generated by UPT up to $100 million	Performance		1,530,000
60,000 warrants for every three months of completed service managing UPT	Service		720,000
			2,600,000

Nonvested stock options and warrant activity

	Number of			Weighted-average Grant Date
	Warrants			Fair Value
Nonvested, December 31, 2014		2,880,000		$	0.98
Vested		(580,000	)		0.99
Nonvested, September 30, 2015		2,300,000		$	0.99

Fair value of each option award

Volatility	112 – 184%
Risk-free interest rate	0.9 – 1.4 %
Expected life (years)	3.0 – 5.0
Dividend yield	--

Fair value of the previously-issued warrants and the replacement warrants

	Previously-issued		Replacement
Volatility	245 – 245%		173%
Risk-free interest rate	0.6 – 0.3 %		0.1 – 0.7 %
Expected life (years)	2.0 – 4.5		0.6 – 1.8
Dividend yield		--	--

Nonemployee Common stock warrants - Service and performance conditions [Member]

Financial statements related to equity-based payments

Condition	Number of Shares
UPT recognizes $100 million of revenue or a change in control		500,000
UPT recognizes $100 million of revenue		150,000
		650,000

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Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Condensed Consolidated Statements Of Operations
Revenue
Cost of revenues
Gross profit
Operating expenses
Payroll and related expenses	$ 198,787	$ 278,425	$ 612,325	$ 765,786
Consulting	48,203	879,633	814,856	8,124,783
Professional fees	88,488	231,540	503,165	548,511
Research and development	150,398	500,808	717,988	936,221
General and administrative	490,056	809,006	1,441,376	11,198,714
Total operating expenses	975,932	2,699,412	4,089,710	21,574,015
Operating loss	(975,932)	(2,699,412)	(4,089,710)	(21,574,015)
Other income (expense):
Interest expense, net	(7,080)	$ (2,403)	(11,655)	$ (11,652)
Change in fair value of derivative liability	$ 2,324		2,324
Legal settlement - replacement warrants			(1,119,450)
Net loss	$ (980,688)	$ (2,701,815)	(5,218,491)	$ (21,585,667)
Less: Noncontrolling interest in net loss	(3,345)	(5,718)	(12,708)	(7,263)
Net loss to shareholders	$ (977,343)	$ (2,696,097)	$ (5,205,783)	$ (21,578,404)
Net loss per common share: Basic and diluted	$ (0.01)	$ (0.05)	$ (0.08)	$ (0.39)
Weighted average common shares outstanding: Basic and diluted	66,089,776	59,636,423	63,938,744	55,190,022

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Share-based payments

9 Months Ended

Sep. 30, 2015

Notes to Financial Statements

Note 7 - Share-based payments

Amounts recognized as expense in the consolidated statements of operations related to share-based payments are as follows:

	Nine months ended September 30,
	2015			2014
Nonemployee common stock	$	571,207		$	596,750
Nonemployee warrants		55,849			7,240,930
Legal settlement – replacement warrants		1,119,450			--
Employee stock options		981,000			9,944,000
Total share-based expense charged against income	$	2,727,506		$	17,781,680
Impact on net loss per common share:
Basic and diluted	$	(0.04	)	$	(0.32	)

Nonemployee common stock

UPT management agreement

In July, 2014, we entered into an agreement with the company managing the operations of UPT, whereby we would issue common stock under the following conditions:

Condition	Number of Shares
UPT recognizes $100 million of revenue or a change in control		500,000
UPT recognizes $100 million of revenue		150,000
		650,000

As of September 30, 2015 and from the date of the agreement, meeting these conditions was not deemed probable, so no expense was recognized under this agreement and no common stock was issued.

Investor relations agreement

In June, 2014, we entered into an agreement with a company, which subsequently became a shareholder, to provide investor relations services. Under the terms of this agreement we agreed to issue 60,000 shares of common stock each quarter through May 2015, for a total of 240,000 shares. As of September 30, 2015, we have recognized the expense for all of the shares under the agreement. During the nine months ended September 30, 2015, we recorded expense at fair value of $61,200 for 120,000 shares. 60,000 remained unissued as of September 30, 2015, and are included in Common stock issuable within the equity section of the condensed consolidated balance sheet.

Financial advisory agreements

During the quarter ended June 30, 2015, we entered into separate agreements with three companies, which subsequently became shareholders, to provide financial advisory services, including developing, studying and evaluating a financing plan, strategic and financial alternatives, and merger and acquisition proposals. Under the terms of the agreements, we agreed to issue an aggregate of 333,332 shares of common stock each month through June 2016, as services were delivered, for a total of 5,000,000 shares over the term of the agreements. These agreements may be canceled by either party with a 30 day notice. During the three months ended June 30, 2015, we recorded expense at fair value of $510,007 for the issuance of 1,000,013 shares. If the services are provided and the agreements are not canceled, an additional 3,999,987 shares remain to be issued. During the quarter ended September 30, 2015, however, at management's request no services were provided, and no stock was earned or issued under these agreements.

Other

During the quarter ended September 30, 2015, we issued no other shares of common stock in exchange for services.

Nonemployee common stock warrants -- Fully-vested upon issuance

In July 2015, we issued 69,333 fully-vested warrants, with an exercise price of $0.40 per share and a life of 5 years, in exchange for financing advisory services. In June 2015, we issued 25,000 fully-vested warrants, with an exercise price of $0.70 per share and a life of four years, in exchange for financing advisory services.

Nonemployee common stock warrants -- Service and performance conditions

UPT management agreement

In July, 2014, we entered into a three year agreement with the company managing the operations of UPT, whereby we would issue common stock warrants under the following conditions:

		Number of
Vesting Condition	Category	Warrants
Fully vest upon UPT generating $1 million of revenue	Performance		350,000
45,945 warrants for every $3 million of revenue generated by UPT up to $100 million	Performance		1,530,000
60,000 warrants for every three months of completed service managing UPT	Service		720,000
			2,600,000

The common stock warrants have a three year life and an exercise price of $1.00 per share. The grant date fair value was $2,586,000. As of September 30, 2015 and since the date of the agreement, we have not deemed it probable that the performance conditions will be met, so no expense was recognized and no common stock warrants vested. During the nine months ended September 30, 2015, 180,000 of the common stock warrants under the service condition vested with the passage of time and we recognized expense of $48,868.

Financing advisory services

In March, 2014, we entered into an agreement with a company, which is also a shareholder, to provide financing advisory services, in return for 400,000 common stock warrants having a five year life and an exercise price of $2.50, with vesting in March, 2015 upon satisfactory performance under the agreement. As of December 31, 2014, we deemed it probable that the vesting conditions would be met. Accordingly, during the year ended December 31, 2014, we recognized estimated expense of $200,379. As of March 31, 2015, the service conditions were met and the award was re-valued at $179,964, resulting in a reduction in expense of $20,415 during the quarter ended March 31, 2015.

Summary

The following summarizes of the status of our nonvested common stock warrants with performance and service conditions as of September 30, 2015, and changes during the period then ended:

	Number of			Weighted-average Grant Date
	Warrants			Fair Value
Nonvested, December 31, 2014		2,880,000		$	0.98
Vested		(580,000	)		0.99
Nonvested, September 30, 2015		2,300,000		$	0.99

The following summarizes the Black-Scholes assumptions used to estimate the fair value of warrants with performance and service conditions during the nine months ended September 30, 2015:

Volatility	112 – 184%
Risk-free interest rate	0.9 – 1.4 %
Expected life (years)	3.0 – 5.0
Dividend yield	--

Legal settlement – Replacement warrants

Under the First Amendment to Settlement Agreement (the "Amendment") with Spirit Bear, we agreed to issue replacement warrants for certain previously-issued warrants (see Note 5). The 7,000,000 previously-issued warrants were issued in 2012, had exercise prices ranging from $0.35 to $0.75 per warrant, and expiration dates from April 2015 to April 2017. All of the replacement warrants have an exercise price of $0.25, while 6,000,000 expire in January 2017 and 1,000,000 expire in December 2015.

When a replacement equity instrument is issued, expense is recorded if the fair value of the new instruments is greater than the fair value of the original instruments. We recorded expense of $1,119,450 associated with the replacement warrants. The following summarizes the Black-Scholes assumptions used to estimate the fair value of the previously-issued warrants and the replacement warrants:

	Previously-issued		Replacement
Volatility	245 – 245%		173%
Risk-free interest rate	0.6 – 0.3 %		0.1 – 0.7 %
Expected life (years)	2.0 – 4.5		0.6 – 1.8
Dividend yield		--	--

Employee stock options – Fully-vested

We granted no additional fully-vested options during the nine months ended September 30, 2015.

Employee stock options – Market-based

We granted no additional options that vest upon the achievement of certain stock prices during the nine months ended September 30, 2015. No additional non-vested market-based options vested during the quarter ended September 30, 2015.

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Equity

9 Months Ended

Sep. 30, 2015

Notes to Financial Statements

Note 6 - Equity

Common Stock

On August 19, 2015, the stockholders voted to increase the number of authorized shares of common stock from 100,000,000 shares to 140,000,000 shares.

In the nine months ended September 30, 2015, we received $40,020 for shares of our common stock; however, the shares were not issued as of September 30, 2015, and are included in Common stock issuable within the equity section of the condensed consolidated balance sheet.

In February, 2014, we entered into an agreement whereby we may sell up to $10,000,000 of our common stock to Lincoln Park Capital Fund LLC ("Lincoln Park") from time to time, subject to certain limitations, over a 36-month period, under a registration statement with respect to 4,671,785 shares of our common stock, which was declared effective by the SEC on July 3, 2014. The credit facility with Lincoln Park was mutually terminated as of April 23, 2015.

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Debt (Details 1)	1 Months Ended	9 Months Ended
	Sep. 15, 2015	Sep. 30, 2015
Debt Details 1
Volatility	112.00%	112.00%
Risk-free interest rate	0.80%	0.60%
Expected life (years)	2 years	2 years
Dividend yield

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Net Loss per Share (Tables)

9 Months Ended

Sep. 30, 2015

Net Loss Per Share Tables

Reconciliation of the denominators used in the computation of net loss per share basic and diluted:

	Three months ended September 30,						Nine months ended September 30,
	2015			2014			2015			2014
Net loss available for stockholders	$	(977,343	)	$	(2,696,097	)	$	(5,205,783	)	$	(21,578,404	)
Weighted average outstanding shares of common stock		66,089,776			59,636,423			63,938,744			55,190,022
Dilutive effect of stock options and warrants		--			--			--			--
Common stock and equivalents		66,089,776			59,636,423			63,938,744			55,190,022
Net loss per share – Basic and diluted	$	(0.01	)	$	(0.05	)	$	(0.08	)	$	(0.39	)

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Description of Business and Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2015

Description Of Business And Summary Of Significant Accounting Policies Policies

Description of Business

Cool Technologies, Inc. and subsidiary, (we, us, our, the "Company" or "Cool Technologies") was incorporated in the State of Nevada in July 2002. In April 2014, we formed Ultimate Power Truck, LLC ("Ultimate Power Truck" or "UPT"), of which we own 95% and a shareholder of Cool Technologies owns 5%. We were formerly known as Bibb Corporation, as Z3 Enterprises, and as HPEV Inc. On August 20, 2015, we changed our name to Cool Technologies, Inc.

We have developed and intend to commercialize thermal dispersion technologies in various product platforms and a parallel power input gearbox, around which we have designed a mobile generator system that can be retrofit onto new and existing trucks. In preparation, we have applied for trademarks for one of our technologies and its acronym. We currently have two trademarks: HPEV and TEHPC. We believe that our proprietary technologies, including our patent portfolio and trade secrets, can help increase the efficiency and positively affect manufacturing cost structure in several large industries beginning with motors/generators and fleet vehicles. The markets for products utilizing our technology include consumer, industrial and military markets, both in the U.S. and worldwide.

Our technologies are divided into two distinct but complementary categories: heat dispersion technology and mobile electric power. As of September 30, 2015, we have five patents and seven patent applications pending in the area of composite heat structures, motors, and related structures, heat pipe architecture, applications (commonly referred to as "thermal" or "heat dispersion technology") and a parallel power vehicle platform. We intend to commercialize our patents by licensing our thermal technologies and applications to electric motor, pump and vehicle component manufacturers; and by licensing or selling a mobile electric power system powered by our proprietary gearing system to commercial vehicle and fleet owners.

Basis of Presentation

The accompanying condensed consolidated balance sheet as of December 31, 2014, has been derived from audited financial statements. The accompanying unaudited interim condensed consolidated financial statements have been prepared on the same basis as the annual audited financial statements and in accordance with accounting principles generally accepted in the United States ("GAAP") for interim financial information and the rules and regulations of the Securities and Exchange Commission ("SEC") for interim financial statements. In the opinion of management, such unaudited information includes all adjustments (consisting only of normal recurring accruals) necessary for a fair presentation of this interim information. All intercompany transactions have been eliminated in consolidation. Noncontrolling interest represents the 5% third party ownership of our subsidiary, UPT. Operating results and cash flows for interim periods are not necessarily indicative of results that can be expected for the entire year. The information included in this report should be read in conjunction with our audited financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2014.

Going Concern

The accompanying condensed consolidated financial statements have been prepared assuming we will continue as a going concern. We have incurred net losses of $37,626,928 since inception and have not fully commenced operations, raising substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern is dependent on our ability to generate revenue, achieve profitable operations and repay our obligations when they come due. These consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty. As of the filing date of this Quarterly Report on Form 10-Q, management is negotiating additional funding arrangements to support completion of the initial phases of our business plan: to license its thermal technologies and applications, including submersible dry-pit applications; and to license and sell mobile generation retrofit kits (our Ultimate Power Truck business) driven by our proprietary gearing system. There can be no assurance, however, that we will be successful in raising additional financing and accomplishing these objectives.

Accounting Policy

Derivative financial instruments -- When we issue debt that contains a conversion feature, we first evaluate whether the conversion feature meets the requirements to be treated as a derivative: a) one or more underlyings, typically the price of the company's stock; b) one or more notional amounts or payment provisions or both, generally the number of shares upon conversion; c) no initial net investment, which typically excludes the amount borrowed; and d) net settlement provisions, which in the case of convertible debt generally means the stock received upon conversion can be readily sold for cash. There are certain scope exceptions from derivative treatment, but these typically exclude conversion features that provide for a variable number of shares.

If the conversion feature within convertible debt meets the requirements to be treated as a derivative, we estimate the fair value of the derivative liability using the Black-Scholes Option Pricing Model upon the date of issuance. If the fair value of the derivative liability is higher than the face value of the convertible debt, the excess is immediately recognized as interest expense. Otherwise, the fair value of the derivative liability is recorded as a liability with an offsetting amount recorded as a debt discount, which offsets the carrying amount of the debt. The derivative liability is revalued at the end of each reporting period and any change in fair value is recorded as a change in fair value in the condensed consolidated statement of operations. The debt discount is amortized through interest expense over the life of the debt. Derivative instrument liabilities and the host debt agreement are classified on the balance sheet as current or non-current based on whether settlement of the derivative instrument could be required within twelve months of the balance sheet date.

Recently Issued Accounting Pronouncements

We have evaluated the other recent accounting pronouncements through ASU 2015-16 and believe that none of them will have a material effect on our financial statements.

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Net Loss per Share

9 Months Ended

Sep. 30, 2015

Notes to Financial Statements

Note 8 - Net Loss per Share

Basic net loss per share is computed by dividing net loss by the weighted-average number of common shares outstanding during the reporting period. Diluted net loss per share is computed similarly to basic loss per share, except that it includes the potential dilution that could occur if dilutive securities are exercised.

The following table presents a reconciliation of the denominators used in the computation of net loss per share – basic and diluted:

	Three months ended September 30,						Nine months ended September 30,
	2015			2014			2015			2014
Net loss available for stockholders	$	(977,343	)	$	(2,696,097	)	$	(5,205,783	)	$	(21,578,404	)
Weighted average outstanding shares of common stock		66,089,776			59,636,423			63,938,744			55,190,022
Dilutive effect of stock options and warrants		--			--			--			--
Common stock and equivalents		66,089,776			59,636,423			63,938,744			55,190,022
Net loss per share – Basic and diluted	$	(0.01	)	$	(0.05	)	$	(0.08	)	$	(0.39	)

Outstanding stock options and common stock warrants are considered anti-dilutive because we are in a net loss position. Management has agreed to not exercise their stock options until the number of authorized shares has been increased.

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Subsequent Events

9 Months Ended

Sep. 30, 2015

Notes to Financial Statements

Note 9 - Subsequent Events

On October 9, 2015, we entered into two promissory notes with unrelated individuals, with principal and interest payable of $400,000 on March 31, 2016. We received cash of $350,000, with the $50,000 representing an original issue discount, or interest.

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Equipment (Tables)

9 Months Ended

Sep. 30, 2015

Equipment Tables

Equipment

	September 30,			December 31,
	2015			2014
Test vehicles	$	124,687		$	124,687
Other		5,000			--
		129,687			124,687
Less: accumulated depreciation		(25,603	)		(6,234	)
	$	104,084		$	118,453

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8. Net Loss per Share (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Net Loss Per Share Details
Net loss available for stockholders	$ (977,343)	$ (2,696,097)	$ (5,205,783)	$ (21,578,404)
Weighted average outstanding shares of common stock	66,089,776	59,636,423	63,938,744	55,190,022
Dilutive effect of stock options and warrants
Common stock and equivalents	66,089,776	59,636,423	63,938,744	55,190,022
Net loss per share - Basic and diluted	$ (0.01)	$ (0.05)	$ (0.08)	$ (0.39)

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2. Equipment (Details Narrative) - USD ($)	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Notes to Financial Statements
Depreciation expense	$ 19,369	$ 0

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6. Equity (Details Narrative)	9 Months Ended
	Sep. 30, 2015 USD ($)
Equity Details Narrative
Common stock received, amount	$ 40,020

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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Operating Activities:
Net loss	$ (5,218,491)	$ (21,585,667)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock issued for services	571,207	596,750
Warrants issued for services	55,849	$ 7,240,930
Legal settlement - replacement warrants	1,119,450
Employee stock options	981,000	$ 9,944,000
Change in fair value of derivative liability	(2,324)
Amortization of debt discount	2,189
Depreciation expense	19,369	$ 0
Changes in operating assets and liabilities:
Prepaid expenses	(11,712)	(92,932)
Accounts payable	805,753	(131,842)
Accrued liabilities - related party	$ 121,558	661,966
Customer deposits		400,000
Accrued payroll liabilities	$ 15,102	3,739
Net cash used in operating activities	(1,541,050)	(2,963,056)
Investing Activities:
Intangible assets	(7,772)	$ (24,921)
Equipment purchase	(5,000)
Net cash used in investing activities	(12,772)	$ (24,921)
Financing Activities:
Proceeds from sale of common stock	1,095,020	$ 3,426,652
Proceeds from debt	325,000
Payments on debt	(12,895)
Net cash provided by financing activities	1,407,125	$ 3,426,652
Net (decrease) increase in cash	(146,697)	438,675
Cash, beginning of period	171,871	477,549
Cash, end of period	25,174	$ 916,224
Cash paid for: Interest	$ 5,219
Cash paid for: Income taxes
Non-cash transactions:
Reduction of stock issuable by issuing common stock	$ 410,950
Derivative liability offset by debt discount	$ 75,650

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2015

Notes to Financial Statements

Note 5 - Commitments and Contingencies

On December 12, 2012, we concluded negotiations on a debt settlement agreement by and among the Company, Phoenix Productions and Entertainment Group ("PPEG"), Action Media Group, LLC ("Action Media") and Spirit Bear Limited ("Spirit Bear") (PPEG and Action Media collectively, the "Debt Holders"). The Debt Holders were to return to escrow a total of 4,676,000 shares of our common stock. 3,676,000 of these shares were returned and cancelled on January 14, 2013, following our filing a registration statement with the SEC on January 11, 2013. The remaining 1,000,000 shares will be purchased by the Company or a nominee of the Company at $0.40 per share (or $400,000) at the rate of $10,000 per month commencing within 90 days of the Company achieving $1,000,000 in gross revenues for products or services from business operations. PPEG and Action Media will divide the $400,000 on a pro rata basis, based on each company's respective amount of debt forgiven. The historical cost of the shares held in escrow are reflected in equity on the balance sheets as common stock held in escrow.

Effective June 1, 2015, we executed a First Amendment to Settlement Agreement (the "Amendment") with Spirit Bear and the parties identified as the assignees of Spirit Bear who are signatories to the Amendment, which amends certain provisions of our original Settlement Agreement with Spirit Bear. In accordance with the terms of the Amendment, Jay Palmer, Carrie Dwyer and Donica Holt, the Spirit Bear holdover directors, tendered their resignation from the Board of Directors of the Company. Spirit Bear also agreed that it will no longer have any rights to appoint nominees to the Board of Directors. Pursuant to the Amendment, the Company agreed to file a registration statement on Form S-1 covering an aggregate of 14,028,385 shares of common stock, preferred stock and warrants on behalf of Spirit Bear and its assignees no later than July 15, 2015, which was filed with the SEC on July 15, 2015. A representative of Spirit Bear agreed that the obligation to register the shares on a Form S-1 need only include shares of common stock and shares of common stock issuable upon conversion of the Preferred Stock and exercise of the warrants held by Spirit Bear and its assignees. The Company agreed to issue replacement warrants for certain previously-issued warrants, which will be canceled in connection with the replacement issuance. Within 10 business days of June 1, 2015, the parties agreed to dismiss all of the pending litigation between and among them. On August 28, 2015, the parties filed a stipulation to dismiss the direct claims of the Company against Spirit Bear and of Spirit Bear against the Company in the Nevada Lawsuit. By order dated September 1, 2015, and filed September 2, 2015, the court ordered dismissal of all direct claims in the Nevada Lawsuit.

Additionally, on February 20, 2015, the Court issued its preliminary approval to the derivative action settlement agreement (the "DASA'), which would lead to the ultimate dismissal of the derivative suit also filed by Spirit Bear in the same action. The Court has scheduled a fairness hearing for November 20, 2015, to consider giving its final approval to the DASA. No shareholder filed any objections to the DASA by April 30, 2015, which was the deadline established by the Court for filing objections. On October 22, 2015, however, Peak Finance, LLC ("Peak Finance") filed a Motion to Intervene in the action seeking, among other things, approval to file a new derivative Complaint in this matter. The Company has opposed this Motion.

On August 31, 2015, the Company received notice of a summons in the matter styled Peak Finance, Derivatively on Behalf of Nominal Defendant, HPEV, Inc. v. Hassett, et al., No. 2:15-cv-01590-GMN-CWH, filed in the United States District Court for the District of Nevada (the "Peak Finance Claim"). Plaintiff Peak Finance, LLC ("Peak Finance") alleges that certain members of the Company's Board of Directors and officers caused a misleading proxy statement to issue and breached alleged fiduciary duties from and after June 18, 2013. Peak Finance further alleges that its claim is related to the Spirit Bear Lawsuit described above. The Company has not determined that there is any merit to the allegations, and has decided to submit the claims to an Independent Director Committee consisting of Directors Christopher McKee, Richard J. "Dick" Schul, and Donald Bowman for their review and consideration. Additionally, on September 28, 2015, the Company filed a motion to dismiss the initial Complaint filed by Peak Finance. On October 22, 2015, rather than oppose the motion to dismiss, Peak Finance filed an amended complaint in this case in addition to the Motion to Intervene in the pending Spirit Bear litigation set forth above. On November 9, 2015, the Company filed a new motion to dismiss the first amended complaint filed by Peak Finance on October 22, 2015. No hearing is presently scheduled on this matter.

From time to time, we may be a party to other legal proceedings. Management currently believes that the ultimate resolution of these other matters, if any, and after consideration of amounts accrued, will not have a material adverse effect on our consolidated results of operations, financial position, or cash flow.

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7. Share-based payments (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Share-based Payments Details
Nonemployee common stock			$ 571,207	$ 596,750
Nonemployee warrants			55,849	$ 7,240,930
Legal settlement - replacement warrants			1,119,450
Employee stock options			981,000	$ 9,944,000
Total share-based expense charged against income			$ 2,727,506	$ 17,781,680
Impact on net loss per common share: Basic and diluted			$ (0.04)	$ (0.32)

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2. Equipment (Details) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Equipment Details
Test vehicles	$ 124,687	$ 124,687
Other	5,000
Total	129,687	$ 124,687
Less: accumulated depreciation	(25,603)	(6,234)
Equipment, net	$ 104,084	$ 118,453