10-K/A 1 tfc_10ka.htm 10-K/A

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-K/A

(Amemdment No. 1)

 

(Mark One)

 

x ANNUAL REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the fiscal year ended December 31, 2014

 

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

 

For the transition period from ____________to _____________

 

Commission file number 000-54464

 

THUNDER ENERGIES CORPORATION

(Exact Name of Registrant as specified in its charter)

  

Florida

 

45-1967797

(State or jurisdiction of Incorporation or organization)

 

(I.R.S Employer Identification No.)

  

 

1444 Rainville Road, Tarpon Springs, Florida

 

34689

(Address of principal executive offices)

 

(Zip Code)

 

Registrant’s telephone number, including area code 727-940-3944

 

Securities registered under Section 12(b) of the Exchange Act:

 

Title of each class

 

Name of each exchange on which registered

None

 

N/A

 

Securities registered under Section 12(g) of the Exchange Act

Common Stock, $0.001 par value

(Title of class)

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ¨ Yes   x No

 

Indicate by check mark whether the registrant is not required to file reports pursuant to Section 13 or 15 (d) of the Exchange Act. ¨ Yes   x No

 

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. x Yes   ¨ No

 

Indicate by check mark whether the resistant 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). x Yes   ¨ No

 

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter is not contained herein and will not be contained to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨ Yes   ¨ 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” “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 company)

   

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

 

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter. $0.00

 

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.

 

The number of shares outstanding of the issuer’s Common Stock, $.001 par value, as of March 20, 2015 was 16,416,950 shares.

 

DOCUMENTS INCORPORATED BY REFERENCE

 

List hereunder the following documents if incorporated by reference and the Part of the Form 10-K (e.g., Part I, Part II, etc.) into which the documents is incorporated: (1) Any annual report to security holders; (2) Any proxy or information statement; and (3) Any prospectus filed pursuant to Rule 424(b) or (c) under the Securities Act of 1933. The listed documents should be clearly described for identification purposes (e.g., annual report to security holders for fiscal year ended December 24, 1980)

 

NONE

 

 

 

EXPLANATORY NOTE

 

This amendment to the Company's annual report on Form 10-K is being filed to correct certain scrivener errors and to include a subsequent event footnote to the Notes To Financial Statements that was inadvertently omitted.

 

 

 

 

THUNDER ENERGIES CORPORATION

ANNUAL REPORT ON FORM 10-K

Fiscal Year Ended December 31, 2014

 

TABLE OF CONTENTS

 

    Page  

Special Note Regarding Forward Looking Statements

 

3

 
       

PART I

       
       

Item 1.

Business

   

3

 

Item 1A.

Risk Factors

   

7

 

Item 1B.

Unresolved Staff Comments

   

7

 

Item 2.

Properties

   

7

 

Item 3.

Legal Proceedings

   

7

 

Item 4.

Mine Safety Disclosures

   

7

 
       

PART II

       
       

Item 5.

Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

   

8

 

Item 6.

Selected Financial Data

   

9

 

Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

   

9

 

Item 7A.

Quantitative and Qualitative Disclosure About Market Risk

   

16

 

Item 8.

Financial Statements and Supplementary Data

   

16

 

Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

   

16

 

Item 9A.

Controls and Procedures

   

16

 

Item 9B.

Other Information

   

17

 
       

PART III

       
       

Item 10.

Directors, Executive Officers and Corporate Governance

   

18

 

Item 11.

Executive Compensation

   

20

 

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

   

22

 

Item 13.

Certain Relationships and Related Transactions, and Director Independence

   

23

 

Item 14.

Principal Accounting Fees and Services

   

24

 
       

PART IV

       
       

Item 15.

Exhibits, Financial Statement Schedule

   

25

 
       

Signatures

   

26

 

 

 
2

 

Special Note Regarding Forward Looking Statements.

 

This annual report on Form 10-K of Thunder Energies Corporation for the year ended December 31, 2014 contains certain forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbors created thereby. To the extent that such statements are not recitations of historical fact, such statements constitute forward looking statements which, by definition involve risks and uncertainties. In particular, statements under the Sections; Description of Business, Management’s Discussion and Analysis of Financial Condition and Results of Operations contain forward looking statements. Where in any forward looking statements, the Company expresses an expectation or belief as to future results or events, such expectation or belief is expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the statement of expectation or belief will result or be achieved or accomplished.

 

The following are factors that could cause actual results or events to differ materially from those anticipated, and include but are not limited to: general economic, financial and business conditions; changes in and compliance with governmental regulations; changes in tax laws; and the cost and effects of legal proceedings.

 

You should not rely on forward looking statements in this annual report. This annual report contains forward looking statements that involve risks and uncertainties. We use words such as “anticipates,” “believes,” “plans,” “expects,” “future,” “intends,” and similar expressions to identify these forward-looking statements. Prospective investors should not place undue reliance on these forward looking statements, which apply only as of the date of this annual report. Our actual results could differ materially from those anticipated in these forward-looking statements.

 

PART I

 

Item 1. Business.

 

Thunder Energies Corporation f/k/a Thunder Fusion Corporation and CCJ Acquisition Corp. (“we”, “us”, “our”, (“TEC” or the “Company”) was incorporated in the State of Florida on April 21, 2011. Since inception, which was April 21, 2011, the Company has been engaged in organizational efforts and obtaining initial financing. The Company was formed as a vehicle to pursue a business combination and had made no efforts to identify a possible business combination. The business purpose of the Company had been to seek the acquisition of or merger with, and existing company. The Company selected December 31 as its fiscal year end.

 

As of July 1, 2013, the Company, based on proposed business activities, was a “blank check” company. The U.S. Securities and Exchange Commission (the “SEC”) defines those companies as “any development stage company that is issuing a penny stock, within the meaning of Section 3 (a)(51) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and that has no specific business plan or purpose, or has indicated that its business plan is to merge with an unidentified company or companies.” Under SEC Rule 12b-2 under the Exchange Act, the Company also qualified as a “shell company,” because it had no or nominal assets (other than cash) and no or nominal operations. Many states have enacted statutes, rules and regulations limiting the sale of securities of “blank check” companies in their respective jurisdictions.

 

The Company was organized as a vehicle to investigate and, if such investigation warrants, acquire a target company or business seeking the perceived advantages of being a publicly held corporation. As of July 31, 2013, the Company had not entered into any definitive agreement with any party, nor had there been any specific discussions with any potential business combination candidate regarding business opportunities for the Company. Subsequent to our year-end we were subject to a change in control which has resulted in the new majority shareholder and our board of director members causing assets to be assigned to the Company.

 

On July 25, 2013, Dr. Ruggero M. Santilli acquired from Company’s existing shareholders, a control block of stock in the Company consisting of two million nine hundred forty thousand (2,940,000) shares of restricted common stock of the Company, in a private equity transaction. As a result of this acquisition, Dr. Ruggero M. Santilli owned 98% of the issued and outstanding shares of common stock of the Company.

 

On August 10, 2013, the Company entered into an Asset Assignment Agreement (the “IBR Assignment Agreement”) with Institute For Basic Research, Inc., a Florida corporation (“IBR”) that also is beneficially controlled by our Chief Executive Officer, Dr. Ruggero M. Santilli. Pursuant to the IBR Assignment Agreement, IBR irrevocably assigned to the Company all rights, title, ownership and interests in all of IBR’s internet website domain name assets, owned and hereinafter acquired by IBR including, but not limited to, all physical and intangible assets and intellectual property related to the assets.

 

 
3

 

On August 11, 2013, Thunder Energies Corporation (the “Company”) entered into an Asset Assignment Agreement (the “Assignment Agreement”) with HyFuels, Inc., a Florida corporation (“HyFuels”) beneficially controlled by our Chief Executive Officer, Dr. Ruggero M. Santilli. Pursuant to the Assignment Agreement, HyFuels irrevocably assigned to the Company all physical assets, intangible assets, accounts receivable, intellectual property, accounting software, billing software, client lists, client prospects, trade secrets, proprietary property, the intellectual and physical property known as intermediate nuclear fusion without radiation, the physical property consisting of seven (7) Hadronic reactors, all copyrights, patents, patent applications, patent assignments, trademarks and anything having commercial or exchange value and the like.

 

Consideration for the assignment agreements consisted of one million (1,000,000) shares of our common stock that were issued to Dr. Ruggero M. Santilli, as designee for IBR and HyFuels. Company management determined the amount of consideration based upon ASC 845-10-S99 pertaining to transfer of non-monetary assets. According to ASC 845-10-S99, transfers of non-monetary assets to a company by its promoters or shareholders in exchange for stock prior to or at the time of the entity’s initial public offering should be recorded at the transferors’ historical cost basis determined under Generally Accepted Accounting Principles. As such, the cost basis carried on the books and records of HyFuels and IBR was minimal or essentially zero. Therefore, the accounting principles in ASC 845-10-S99 were followed and the Company recorded the intellectual and physical properties at its historical cost basis, which was at the historical cost basis of a nominal amount. In connection with the aforementioned assignment agreements, 1,000,000 shares of our common stock were transferred in exchange for the assets. The transfer was valued at one thousand dollars ($1,000.00), the value of the shares issued at par ($0.001) in exchange for the assets. This amount was determined by the Company to be de-minimus to the value received in the exchange and approximates the basis of those assets.

 

The Company has recorded the property and intangibles (7 reactors, intellectual property rights to develop the technology, and website) as an intangible asset. The valuation of the properties will be the par value of the stock received in exchange for the rights and assets. The Company’s filings will include a disclosure in the MD&A section and notes to the financial statement under the heading “Non-Monetary Transaction”. Management believes that the $1,000.00 valuation is reflective of the salvage value of the physical property, at a minimum. Our Company purchased internet website domain name assets owned by IBR and the intellectual and physical property known as intermediate nuclear fusion without radiation, the physical property consisting of seven (7) Hadronic reactors, all copyrights, patents, patent applications, patent assignments, trademarks and anything having commercial or exchange value owned by HyFuels as related to the reactors. None of the assets purchased had ever generated revenue for IBR or HyFuels. Although the Asset Assignment Agreements were more comprehensive in their description of “assets”, the aforementioned items were the only assets assigned to the Company.

 

Our Company purchased internet website domain name assets owned by IBR and the intellectual and physical property known as intermediate nuclear fusion without radiation, the physical property consisting of seven (7) Hadronic reactors, all copyrights, patents, patent applications, patent assignments, trademarks and anything having commercial or exchange value owned by HyFuels as related to the reactors. None of the assets purchased had ever generated revenue for IBR or HyFuels. Although the Asset Assignment Agreements were more comprehensive in their description of “assets”, the aforementioned items were the only assets assigned to the Company.

 

A further description of the assignors, IBR and HyFuels, follows. IBR is a Florida Corporation whose only business operations are the publication of an internet blog relating to scientific and academic matters. IBR does not generate revenue and has no expenses. Furthermore, IBR has never maintained a checking account. This status has been consistent over the last several years. Our Chief Executive Officer and Director, Dr. Ruggero M. Santilli is president and a director for IBR. IBR does not have any ownership interest in any of our securities.

 

HyFuels is a Florida corporation that utilized research and development funds to create the seven Hadronic reactors, but otherwise has no business operations since its inception. Its sole purpose is to serve as a patent holding company. Our Chief Executive Officer and Director, Dr. Ruggero M. Santilli is president and a director for HyFuels. HyFuels also does not have any ownership interest in any of our securities.

 

Neither IBR nor HyFuels has made any effort to commercialize the assets for purposes of generating revenue. Both IBR and HyFuels continue to exist as Florida corporations separate and distinct from the Company. Though they are deemed “related” entities through a common officer and director with our Company, they remain otherwise “unaffiliated” with our Company.

 

 
4

 

IBR maintains its principal place of business at 90 East Winds Court, Palm Harbor, Florida 34689. HyFuels maintains its principal place of business at 35246 US Highway 19 North, #215, Palm Harbor, Florida 34684. There is no continuity of facilities with the Company.

 

Neither IBR nor HyFuels had an employee base, a distribution system, a sales force, a customer base, production techniques or trade names associated with the assets. Their ownership rights may arguably be referred to as operating rights but there were essentially no operations associated with the assets.

 

The only activities of the assignors involved the creation of the Internet website domain names and the creation of the seven Hadronic reactors and associated patents pending. These assets did not generate revenue prior to the assignment, so there is essentially no financial data to report regarding “revenue producing activity previously associated with the acquired assets”. Furthermore, there is no “sufficient continuity of operations with our Company so that disclosure of prior financial information regarding IBR or HyFuels is material to an understanding of future operations regarding our Company.

 

Description of Business, Principal Products, Services

 

The business of Thunder Energies Corporation ("TEC") is focused on the development of a new clean combustion of fossil fuels (oil, diesel, coal, etc.) with controlled minimal contaminants in the exhaust. Our business objective is achieved via new forms of processing fossil fuels, new additives to the combustion and the assistance of a high voltage electric discharges (patents pending) that burn combustible contaminants in fossil fuel exhaust while providing added on clean energy. The expected principal product, depending on funding, is a new type of furnace for the clean combustion of fossil fuel available in any desired size for any type of energy application, from home heating to large plants for the clean production of electricity. The expected services are to be rendered by providing technical assistance to the market consisting of existing fossil fuel electric power plants for their decrease of pollutants in the exhaust and their verification of EPA regulations on the release of contaminants in the atmosphere. A prototype new furnace is expected to be available within one year following the availability of the necessary funds. As we are a development stage company, we have not yet generated any revenue from the assets that were recently assigned to and acquired by the Company, including the Hadronic reactors. The Hadronic reactors have been utilized to test and confirm the technology for ultimate inclusion in the new furnaces. Thunder Energies Corp. is a developer of new technologies that are being brought to market by three divisions: 1) Division of Optical Instruments (TEC-DOI); 2) Division of Nuclear Instruments (TEC-DNI); and 3) Division of Fuel Combustion (TEC--DFC). All intellectual properties, including patents, patent applications, domain names, copyrights, know how, etc., are exclusively and irrevocably owned by Thunder Energies Corp. without any royalty payments.

 

Distribution Methods Of The Products and Services

 

Initially, we anticipate marketing via large advertisements on the internet, such as via PRWeb Releases. We expect to market through contacts that we are able to generate, and then via direct contacts of potential buyers of TEC new fossil fuel furnaces or TEC services for the improvement of existing fossil fuel burning plants.

 

Status of Any Publicly Announced New Product Or Service

 

We have not yet made any public announcement regarding our products or services. We do not contemplate making any such announcements until the availability of a prototype furnace for the clean combustion of fossil fuels as described above. We have only published announcements regarding the new sciences underlying the new clean combustion of fossil fuels as disclosed on our corporate website, www.thunder-energies.com.

 

Competitive Business Conditions And The Smaller Reporting Company’s Competitive Position In The Industry And Methods Of Competition

 

There exist many types of furnaces for the combustion of fossil fuels but they are all based on conventional combustion of fossil fuels and then the removal of contaminants in the exhaust. By contrast, the main function of TEC furnaces is that of improving the combustion with consequential reduction of contaminants in the exhaust while increasing the energy output for the same fossil fuel.

 

 
5

 

Sources And Availability Of Raw Materials And The Names Of Principal Suppliers

 

The raw material needed by the TEC furnaces is given by conventional fossil fuels all available in the U.S.A. by a large number of suppliers.

 

Dependence On One Or A Few Customers

 

We do not presently have any committed customers for our TEC furnaces. However, upon completion of the manufacture and testing of our prototype, we believe that there will be a large market that will be interested in our products and services.

 

Patents, Trademarks, Licenses, Franchises, Concessions, Royalty Agreements Or Labor Contracts, Including Duration

 

A first patent application is pending, while additional patent applications are expected depending on funding. Trademarks are expected to be applied for depending on funding. No franchisee or license is expected during the first three years of operation. Labor contracts for employees are planned for implementation following legal assistance and decisions by our Board of Directors.

 

Need For Any Government Approval Of Principal Products Or Services

 

No governmental approval or permits is expected for the development of the new furnaces for the clean combustion of fossil fuels. Following their availability, the TEC furnaces will be subject to and must comply with applicable EPA requirements for permitted levels of contaminants in the exhaust.

 

Effect Of Existing Or Probable Governmental Regulations On The Business

 

Due to its novel conception, a principal objective of TEC furnaces is that of surpassing current EPA requirements for the contaminants in the combustion exhaust released in the atmosphere.

 

Estimate Of The Amount Of Money Spent During Each Of The Last Two Fiscal Years On Research And Development

 

There have been no funds expended by the Company on research and development in the last two fiscal years. All funding for the development of our products to date has been derived from related entities, IBR and HyFuels, which are beneficially controlled by our Chief Executive Officer, Dr. Ruggero M. Santilli.

 

Costs and Effects Of Compliance With Environmental Laws

 

We are unable to estimate the costs and effects of compliance with environmental laws prior to completion of a TEC prototype furnace.

 

Number Of Total Employees And Number Of Full-Time Employees

 

At this time, the Company has two full time employees and five persons working part time in various functions.

 

Implications of Being an Emerging Growth Company

 

We qualify as an emerging growth company as that term is used in the JOBS Act. An emerging growth company may take advantage of specified reduced reporting and other burdens that are otherwise applicable generally to public companies. These provisions include: 

 

 

·

A requirement to have only two years of audited financial statements and only two years of related MD&A;

 

 

·

Exemption from the auditor attestation requirement in the assessment of the emerging growth company’s internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act of 2002;

 

 

·

Reduced disclosure about the emerging growth company’s executive compensation arrangements; and

 

 

·

No non-binding advisory votes on executive compensation or golden parachute arrangements.

 

 
6

 

We have already taken advantage of these reduced reporting burdens in this Form 10-K, which are also available to us as a smaller reporting company as defined under Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

 

In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended (the “Securities Act”) for complying with new or revised accounting standards. We are choosing to utilize the extended transition period for complying with new or revised accounting standards under Section 102(b)(2) of the JOBS Act. This election allows our Company to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies. As a result of this election, our financial statements may not be comparable to companies that comply with public company effective dates.

 

We could remain an emerging growth company for up to five years, or until the earliest of (i) the last day of the first fiscal year in which our annual gross revenues exceed $1 billion, (ii) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, or (iii) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three year period.

 

We are a reporting company and file all reports required under sections 13 and 15d of the Exchange Act.

 

Item 1A. Risk Factors.

 

Because we are a Smaller Reporting Company, we are not required to provide the information required by this item.

 

Item 1B. Unresolved Staff Comments.

 

NONE.

 

Item 2. Properties.

 

We neither rent nor own any properties. We utilize the office space and equipment of our management at no cost. Management estimates such amounts to be immaterial. We currently have no policy with respect to investments or interests in real estate, real estate mortgages or securities of, or interests in, persons primarily engaged in real estate activities.

 

Item 3. Legal Proceedings.

 

We are not currently a party to any legal proceedings nor are any contemplated by us at this time.

 

Item 4. Mine Safety Disclosures.

 

Not applicable.

 

 
7

 

PART II.

 

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

 

Market Information.

 

No public market for common stock

 

Although there have been a few trades of our stock on the OTC Markets Pink, the quotations have been limited and sporadic and thus, there is presently no public market for our common stock. There is no assurance that a trading market will develop, or, if developed, that it will be sustained. A purchaser of shares may, therefore, find it difficult to resell our securities offered herein should he or she desire to do so.

 

Holders.

 

On December 31, 2014 there were 42 shareholders of record of our common stock. As of March 15, 2015 there are 16,416,850 shares of our Common Stock issued and outstanding.

 

Dividends.

 

Since inception we have not paid any dividends on our common stock. We currently do not anticipate paying any cash dividends in the foreseeable future on our common stock. Although we intend to retain our earnings, if any, to finance the exploration and growth of our business, our Board of Directors will have the discretion to declare and pay dividends in the future. Payment of dividends in the future will depend upon our earnings, capital requirements, and other factors, which our Board of Directors may deem relevant.

 

Recent Sales of Unregistered Securities.

 

On April 21, 2011, 1,000,000 shares each were issued to Jay D. Solomon, Charles Godels and Nancy Hunt for cash consideration of $1,000.00 each for an aggregate amount of $3,000.00. Such shares were issued pursuant to an exemption from registration at Section 4(2) of the Securities Act of 1933. These shares of our common stock qualified for exemption under Section 4(2) of the Securities Act of 1933 since the issuance of shares by us did not involve a public offering. The offering was not a “public offering” as defined in Section 4(2) due to the insubstantial number of persons involved in the deal, size of the offering, manner of the offering and number of shares offered. We did not undertake an offering in which we sold a high number of shares to a high number of investors. In addition, these shareholders had necessary investment intent as required by Section 4(2) since they agreed to and received share certificates bearing a legend stating that such shares are restricted pursuant to Rule 144 of the 1933. This restriction ensures that these shares would not be immediately redistributed into the market and therefore not be part of a “public offering.” Based on an analysis of the above factors, we have met the requirements to qualify for exemption under section 4(2) of the Securities Act of 1933 for this transaction.

 

On October 10, 2013, we issued fifty million (50,000,000) shares of our Series “A” Convertible Preferred Stock (the “Preferred Stock”) to Hadronic Technologies Press, Inc. (“Hadronic”), a Florida corporation maintaining its principal place of business at 35246 US Highway 19 North, Suite #215, Palm Harbor, Florida 34684. Our Directors, Dr. Ruggero M. Santilli and Mrs. Carla Santilli each own fifty percent of the equity in Hadronic. The Series “A” Convertible Preferred Stock has 15 votes per share and is convertible into 10 shares of our common stock at the election of the shareholder.

 

 
8

 

During the period ending December 31, 2014, the Company engaged in the sale of its unregistered securities as described below. The shares of our common stock were issued pursuant to an exemption from registration in Section 4(2) of the Securities Act of 1933. These shares of our common stock qualified for exemption under Section 4(2) of the Securities Act of 1933 since the issuance of shares by us did not involve a public offering. The offering was not a “public offering” as defined in Section 4(2) due to the insubstantial number of persons involved in the deal, size of the offering, manner of the offering and number of shares offered. We did not undertake an offering in which we sold a high number of shares to a high number of investors. In addition, these shareholders had necessary investment intent as required by Section 4(2) since they agreed to receive shares certificates bearing a legend stating that such shares are restricted pursuant to Rule 144 of the 1933 Act. This restriction ensures that these shares would not be immediately redistributed into the market and therefore not be part of a “public offering.” All shareholders are “sophisticated investors” and are family members, friends or business acquaintances of our officers and directors. Based on an analysis of the above factors, we believe we have met the requirements to qualify for exemption under section 4(2) of the Securities Act of 1933 for this transaction.

 

During the month of April, 2014 the Company sold 32,500 shares of common stock by subscription in exchange for cash proceeds of $6,500 to various non-related parties at $0.20 per share.

 

During the month of April, 2014 the Company sold 300 shares of common stock by subscription in exchange for cash proceeds of $300 to a non-related party at $1.00 per share.

 

On October 16, 2014 the Company issued 500,000 shares of common stock, by subscription, in exchange for transfer agent services. The services are to be valued at the last trading price to unrelated parties ($0.20 per share) at the date of grant. The Company will recognize $100,000 of stock-based compensation for the issuance in October 2014.

 

Item 6. Selected Financial Data.

 

The registrant qualifies as a smaller reporting company, as defined by Rule 229.10(f)(1) and is not required to provide the information required by this Item.

 

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

 

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations contain forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Risk Factors” and elsewhere in this report. The management’s discussion, analysis of financial condition, and results of operations should be read in conjunction with our financial statements and notes thereto contained elsewhere in this prospectus.

 

Our Business Overview.

 

Thunder Energies Corporation f/k/a Thunder Fusion Corporation and CCJ Acquisition Corp. (“we”, “us”, “our”, or the “Company”) was incorporated in the State of Florida on April 21, 2011. Since inception, the Company has been engaged in organizational efforts and obtaining initial financing. The Company was formed as a vehicle to pursue a business combination and had made no efforts to identify a possible business combination. The business purpose of the Company has been to seek the acquisition of or merger with, an existing company. The Company selected December 31 as its fiscal year end.

 

As of July 1, 2013, the Company, based on proposed business activities, was a “blank check” company. The U.S. Securities and Exchange Commission (the “SEC”) defines those companies as “any development stage company that is issuing a penny stock, within the meaning of Section 3 (a)(51) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and that has no specific business plan or purpose, or has indicated that its business plan is to merge with an unidentified company or companies.” Under SEC Rule 12b-2 under the Exchange Act, the Company also qualified as a “shell company,” because it had no or nominal assets (other than cash) and no or nominal operations. Many states have enacted statutes, rules and regulations limiting the sale of securities of “blank check” companies in their respective jurisdictions.

 

 
9

 

The Company was organized as a vehicle to investigate and, if such investigation warrants, acquire a target company or business seeking the perceived advantages of being a publicly held corporation. As of July 31, 2013, the Company had not entered into any definitive agreement with any party, nor had there been any specific discussions with any potential business combination candidate regarding business opportunities for the Company. Subsequent to our year-end we were subject to a change in control which has resulted in the new majority shareholder and our board of director members causing assets to be assigned to the Company.

 

On August 10, 2013, the Company entered into an Asset Assignment Agreement (the “IBR Assignment Agreement”) with Institute For Basic Research, Inc., a Florida corporation (“IBR”) that also is beneficially controlled by our Chief Executive Officer, Dr. Ruggero M. Santilli. Pursuant to the IBR Assignment Agreement, IBR irrevocably assigned to the Company all rights, title, ownership and interests in all of IBR’s internet website domain name assets, owned and hereinafter acquired by IBR including, but not limited to, all physical and intangible assets and intellectual property related to the assets.

 

On August 11, 2013, Thunder Energies Corporation (the “Company”) entered into an Asset Assignment Agreement (the “Assignment Agreement”) with HyFuels, Inc., a Florida corporation (“HyFuels”) beneficially controlled by our Chief Executive Officer, Dr. Ruggero M. Santilli. Pursuant to the Assignment Agreement, HyFuels irrevocably assigned to the Company all physical assets, intangible assets, accounts receivable, intellectual property, accounting software, billing software, client lists, client prospects, trade secrets, proprietary property, the intellectual and physical property known as intermediate nuclear fusion without radiation, the physical property consisting of seven (7) Hadronic reactors, all copyrights, patents, patent applications, patent assignments, trademarks and anything having commercial or exchange value and the like.

 

Consideration for the assignment agreements consisted of one million (1,000,000) shares of our common stock that were issued to Dr. Ruggero M. Santilli, as designee for IBR and HyFuels. Company management determined the amount of consideration based upon ASC 845-10-S99 pertaining to transfer of non-monetary assets. According to ASC 845-10-S99, transfers of non-monetary assets to a company by its promoters or shareholders in exchange for stock prior to or at the time of the entity’s initial public offering should be recorded at the transferors’ historical cost basis determined under Generally Accepted Accounting Principles. As such, the cost basis carried on the books and records of HyFuels and IBR was minimal or essentially zero. Therefore, the accounting principles in ASC 845-10-S99 were followed and the Company recorded the intellectual and physical properties at its historical cost basis, which was at the historical cost basis of a nominal amount. In connection with the aforementioned assignment agreements, 1,000,000 shares of our common stock were transferred in exchange for the assets. The transfer was valued at one thousand dollars ($1,000.00), the value of the shares issued at par ($0.001) in exchange for the assets. This amount was determined by the Company to be de-minimus to the value received in the exchange and approximates the basis of those assets.

 

The Company has recorded the property and intangibles (7 reactors, intellectual property rights to develop the technology, and website) as an intangible asset. The valuation of the properties will be the par value of the stock received in exchange for the rights and assets. The Company’s filings will include a disclosure in the MD&A section and notes to the financial statement under the heading “Non-Monetary Transaction”. Management believes that the $1,000.00 valuation is reflective of the salvage value of the physical property, at a minimum. Our Company purchased internet website domain name assets owned by IBR and the intellectual and physical property known as intermediate nuclear fusion without radiation, the physical property consisting of seven (7) Hadronic reactors, all copyrights, patents, patent applications, patent assignments, trademarks and anything having commercial or exchange value owned by HyFuels as related to the reactors. None of the assets purchased had ever generated revenue for IBR or HyFuels. Although the Asset Assignment Agreements were more comprehensive in their description of “assets”, the aforementioned items were the only assets assigned to the Company.

 

Our Company purchased internet website domain name assets owned by IBR and the intellectual and physical property known as intermediate nuclear fusion without radiation, the physical property consisting of seven (7) Hadronic reactors, all copyrights, patents, patent applications, patent assignments, trademarks and anything having commercial or exchange value owned by HyFuels as related to the reactors. None of the assets purchased had ever generated revenue for IBR or HyFuels. Although the Asset Assignment Agreements were more comprehensive in their description of “assets”, the aforementioned items were the only assets assigned to the Company.

 

 
10

 

A further description of the assignors, IBR and HyFuels, follows. IBR is a Florida Corporation whose only business operations are the publication of an internet blog relating to scientific and academic matters. IBR does not generate revenue and has no expenses. Furthermore, IBR has never maintained a checking account. This status has been consistent over the last several years. Our Chief Executive Officer and Director, Dr. Ruggero M. Santilli is president and a director for IBR. IBR does not have any ownership interest in any of our securities.

 

HyFuels is a Florida corporation that utilized research and development funds to create the seven Hadronic reactors, but otherwise has no business operations since its inception. Its sole purpose is to serve as a patent holding company. Our Chief Executive Officer and Director, Dr. Ruggero M. Santilli is president and a director for HyFuels. HyFuels also does not have any ownership interest in any of our securities.

 

Neither IBR nor HyFuels has made any effort to commercialize the assets for purposes of generating revenue. Both IBR and HyFuels continue to exist as Florida corporations separate and distinct from the Company. Though they are deemed “related” entities through a common officer and director with our Company, they remain otherwise “unaffiliated” with our Company.

 

IBR maintains its principal place of business at 90 East Winds Court, Palm Harbor, Florida 34689. HyFuels maintains its principal place of business at 35246 US Highway 19 North, #215, Palm Harbor, Florida 34684. There is no continuity of facilities with the Company.

 

Neither IBR nor HyFuels had an employee base, a distribution system, a sales force, a customer base, production techniques or trade names associated with the assets. Their ownership rights may arguably be referred to as operating rights but there were essentially no operations associated with the assets.

 

The only activities of the assignors involved the creation of the Internet website domain names and the creation of the seven Hadronic reactors and associated patents pending. These assets did not generate revenue prior to the assignment, so there is essentially no financial data to report regarding “revenue producing activity previously associated with the acquired assets”. Furthermore, there is no “sufficient continuity of operations with our Company so that disclosure of prior financial information regarding IBR or HyFuels is material to an understanding of future operations regarding our Company.

 

Description of Business, Principal Products, Services

 

The business of Thunder Energies Corporation ("TEC") is focused on the development of a new clean combustion of fossil fuels (oil, diesel, coal, etc.) with controlled minimal contaminants in the exhaust. Our business objective is achieved via new forms of processing fossil fuels, new additives to the combustion and the assistance of a high voltage electric discharges (patents pending) that burn combustible contaminants in fossil fuel exhaust while providing added on clean energy. The expected principal product, depending on funding, is a new type of furnace for the clean combustion of fossil fuel available in any desired size for any type of energy application, from home heating to large plants for the clean production of electricity. The expected services are to be rendered by providing technical assistance to the market consisting of existing fossil fuel electric power plants for their decrease of pollutants in the exhaust and their verification of EPA regulations on the release of contaminants in the atmosphere. A prototype new furnace is expected to be available within one year following the availability of the necessary funds. As we are a development stage company, we have not yet generated any revenue from the assets that were recently assigned to and acquired by the Company, including the Hadronic reactors. The Hadronic reactors have been utilized to test and confirm the technology for ultimate inclusion in the new furnaces. Thunder Energies Corp. is a developer of new technologies that are being brought to market by three divisions: 1) Division of Optical Instruments (TEC-DOI); 2) Division of Nuclear Instruments (TEC-DNI); and 3) Division of Fuel Combustion (TEC--DFC). All intellectual properties, including patents, patent applications, domain names, copyrights, know how, etc., are exclusively and irrevocably owned by Thunder Energies Corp. without any royalty payments.

 

 
11

 

Distribution Methods Of The Products and Services

 

Initially, we anticipate marketing via large advertisements on the internet, such as via PRWeb Releases. We expect to market through contacts that we are able to generate, and then via direct contacts of potential buyers of TEC new fossil fuel furnaces or TEC services for the improvement of existing fossil fuel burning plants.

 

Status of Any Publicly Announced New Product Or Service

 

We have not yet made any public announcement regarding our products or services. We do not contemplate making any such announcements until the availability of a prototype furnace for the clean combustion of fossil fuels as described above. We have only published announcements regarding the new sciences underlying the new clean combustion of fossil fuels as disclosed on our corporate website, www.thunder-energies.com.

 

Competitive Business Conditions And The Smaller Reporting Company’s Competitive Position In The Industry And Methods Of Competition

 

There exist many types of furnaces for the combustion of fossil fuels but they are all based on conventional combustion of fossil fuels and then the removal of contaminants in the exhaust. By contrast, the main function of TEC furnaces is that of improving the combustion with consequential reduction of contaminants in the exhaust while increasing the energy output for the same fossil fuel.

 

Sources And Availability Of Raw Materials And The Names Of Principal Suppliers

 

The raw material needed by the TEC furnaces is given by conventional fossil fuels all available in the U.S.A. by a large number of suppliers.

 

Dependence On One Or A Few Customers

 

We do not presently have any committed customers for our TEC furnaces. However, upon completion of the manufacture and testing of our prototype, we believe that there will be a large market that will be interested in our products and services.

 

Patents, Trademarks, Licenses, Franchises, Concessions, Royalty Agreements Or Labor Contracts, Including Duration

 

A first patent application is pending, while additional patent applications are expected depending on funding. Trademarks are expected to be applied for depending on funding. No franchisee or license is expected during the first three years of operation. Labor contracts for employees are planned for implementation following legal assistance and decisions by our Board of Directors.

 

Need For Any Government Approval Of Principal Products Or Services

 

No governmental approval or permits is expected for the development of the new furnaces for the clean combustion of fossil fuels. Following their availability, the TEC furnaces will be subject to and must comply with applicable EPA requirements for permitted levels of contaminants in the exhaust.

 

Effect Of Existing Or Probable Governmental Regulations On The Business

 

Due to its novel conception, a principal objective of TEC furnaces is that of surpassing current EPA requirements for the contaminants in the combustion exhaust released in the atmosphere.

 

 
12

 

Estimate Of The Amount Of Money Spent During Each Of The Last Two Fiscal Years On Research And Development

 

There have been no funds expended by the Company on research and development in the last two fiscal years. All funding for the development of our products to date has been derived from related entities, IBR and HyFuels, which are beneficially controlled by our Chief Executive Officer, Dr. Ruggero M. Santilli.

 

Costs and Effects Of Compliance With Environmental Laws

 

We are unable to estimate the costs and effects of compliance with environmental laws prior to completion of a TEC prototype furnace.

 

Number Of Total Employees And Number Of Full-Time Employees

 

At this time, the Company has two full time employees and five persons working part time in various functions.

 

Implications of Being an Emerging Growth Company

 

We qualify as an emerging growth company as that term is used in the JOBS Act. An emerging growth company may take advantage of specified reduced reporting and other burdens that are otherwise applicable generally to public companies. These provisions include:

 

 

·

A requirement to have only two years of audited financial statements and only two years of related MD&A;

 

 

·

Exemption from the auditor attestation requirement in the assessment of the emerging growth company’s internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act of 2002;

 

 

·

Reduced disclosure about the emerging growth company’s executive compensation arrangements; and

 

 

·

No non-binding advisory votes on executive compensation or golden parachute arrangements.

 

We have already taken advantage of these reduced reporting burdens in this amendment to our Current Report on Form 8-K, which are also available to us as a smaller reporting company as defined under Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

 

In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended (the “Securities Act”) for complying with new or revised accounting standards. We are choosing to utilize the extended transition period for complying with new or revised accounting standards under Section 102(b)(2) of the JOBS Act. This election allows our Company to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies. As a result of this election, our financial statements may not be comparable to companies that comply with public company effective dates.

 

 
13

 

We could remain an emerging growth company for up to five years, or until the earliest of (i) the last day of the first fiscal year in which our annual gross revenues exceed $1 billion, (ii) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, or (iii) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three year period.

 

We are a reporting company and file all reports required under sections 13 and 15d of the Exchange Act.

 

Results of Operations and Critical Accounting Policies and Estimates.

 

The results of operations are based on preparation of financial statements in conformity with accounting principles generally accepted in the United States. The preparation of financial statements requires management to select accounting policies for critical accounting areas as well as estimates and assumptions that affect the amounts reported in the financial statements. The Company’s accounting policies are more fully described in Note 3 to the Notes of Financial Statements.

 

Results of Operations for the year ended December 31, 2014 and December 31, 2013.

 

The Company was organized as of April 21, 2011 and effected a reverse acquisition of CCJ Acquisition Corp on July 25, 2013. Due to the limited operations, the results of operations for the year ended December 31, 2014 are not necessarily comparable to the prior period.

 

Revenues.

 

Total Revenue. Total revenues for the year ended December 31, 2014 and 2013 were $-0- and $-0- respectively.

 

Expenses.

 

Total Expenses. Total expenses for the year ended December 31, 2014 and December 31, 2013 were $567,129 and $674,659, respectively. Total expenses consisted of research and development of $52,492 and $4,047, respectively; professional fees of $262,110 and $78,232, respectively; selling, general and administrative expenses of $249,723 and $592,036, respectively; and interest expense of $2,804 and $344, respectively.

 

Financial Condition.

 

Total Assets. Total assets at December 31, 2014 and December 31, 2013 were $5,017 and $5,522, respectively. Total assets consist of cash of $4,217 and $3,913, respectively; prepaid expense of $0 and $609, respectively; and intangible assets, net of accumulated amortization, of $800 and $1,000, respectively.

 

Total Liabilities. Total liabilities at December 31, 2014 and December 31, 2013 were $596,861 and $179,181, respectively. Total liabilities consist of accounts payable of $12,866 and $8,990, respectively; accrued interest of $3,148 and $344, respectively; accrued salaries of $361,847and $109,847, respectively; and note payable to related parties of $219,000 and $60,000, respectively.

 

 
14

 

Liquidity and Capital Resources.

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern which contemplates, among other things, the realization of assets and satisfaction of liabilities in the ordinary course of business.

 

The Company sustained a loss of $567,129 for the year ended December 31, 2014. The Company has accumulated losses totaling $1,241,788 at December 31, 2014. Because of the absence of positive cash flows from operations, the Company will require additional funding for continuing the development and marketing of products. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

We are presently able to meet our obligations as they come due through the support of our shareholders. At December 31, 2014 we had a working capital deficit of $592,644. Our working capital deficit is due to the results of operations.

 

Net cash used in operating activities for the year ended December 31, 2014 and 2013 were ($187,640) and ($56,479), respectively. Net cash used in operating activities includes our net loss, amortization, stock based compensation, prepaid expense, accounts payable, accrued salaries and accrued interest.

 

Net cash provided by financing activities for the year ended December 31, 2014 and December 31, 2013 were $187,944 and $60,000, respectively. Net cash provided by financing activities includes proceeds from notes payable- related party of $159,000 and proceeds from the issuance of common stock of $28,944.

 

We anticipate that our future liquidity requirements will arise from the need to fund our growth from operations, pay current obligations and future capital expenditures. The primary sources of funding for such requirements are expected to be cash generated from operations and raising additional funds from the private sources and/or debt financing. However, we can provide no assurances that we will be able to generate sufficient cash flow from operations and/or obtain additional financing on terms satisfactory to us, if at all, to remain a going concern. Our continuation as a going concern is dependent upon our ability to generate sufficient cash flow to meet our obligations on a timely basis and ultimately to attain profitability. Our Plan of Operation for the next twelve months is to raise capital to implement our strategy. We do not have the necessary cash and revenue to satisfy our cash requirements for the next twelve months. We cannot guarantee that additional funding will be available on favorable terms, if at all. If adequate funds are not available, then we may not be able to expand our operations. If adequate funds are not available, we believe that our officers and directors will contribute funds to pay for some of our expenses. However, we have not made any arrangements or agreements with our officers and directors regarding such advancement of funds. We do not know whether we will issue stock for the loans or whether we will merely prepare and sign promissory notes. If we are forced to seek funds from our officers or directors, we will negotiate the specific terms and conditions of such loan when made, if ever. Although we are not presently engaged in any capital raising activities, we anticipate that we may engage in one or more private offering of our company’s securities after the completion of this offering. We would most likely rely upon the transaction exemptions from registration provided by Regulation D, Rule 506 or conduct another private offering under Section 4(2) of the Securities Act of 1933. See “Note 2 – Going Concern” in our financial statements for additional information as to the possibility that we may not be able to continue as a “going concern.”

 

We are not aware of any trends or known demands, commitments, events or uncertainties that will result in or that are reasonably likely to result in material increases or decreases in liquidity.

 

 
15

 

Capital Resources.

 

We had no material commitments for capital expenditures as of December 31, 2014.

 

Off-Balance Sheet Arrangements.

 

We have made no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

  

Item 7A. Quantitative and Qualitative Disclosure About Market Risk.

 

The registrant qualifies as a smaller reporting company, as defined by Rule 229.10(f)(1) and is not required to provide the information required by this Item.

 

Item 8. Financial Statements and Supplementary Data.

 

The report of the independent registered public accounting firm and the financial statements listed on the accompanying index at page F-1 of this report are filed as part of this report and incorporated herein by reference.

 

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

 

We did not have any disagreements on accounting and financial disclosure with our accounting firm during the reporting period.

 

Item 9A. Controls and Procedures.

 

(a) Management’s Annual Report on Internal Control over Financial Reporting.

 

The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting. The Company’s internal control over financial reporting is a process designed under the supervision of the Company’s Principal Executive Officer and Principal Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external purposes in accordance with the U.S. generally accepted accounting principles.

 

As of December 31, 2014, under the supervision and with the participation of our management, we conducted an evaluation of the effectiveness of the design and operations of our disclosure controls and procedures, as defined in Rule 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934. Based on this evaluation, management concluded that our financial disclosure controls and procedures were not effective so as to timely identify, correct and disclose information required to be included on our Securities and Exchange Commission (“SEC”) reports due to the Company’s limited internal resources and lack of ability to have multiple levels of transaction review. Through the use of external consultants and the review process, management believes that the financial statements and other information presented herewith are materially correct.

 

 
16

 

As of December 31, 2014, under the supervision and with the participation of our management, we conducted an evaluation of the effectiveness of the design and operations of our internal control over financial reporting, as defined in Rules 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934 and based on the criteria for effective internal control described Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management concluded that our internal control over financial reporting was not effective so as to timely identify, correct and disclose information required to be included on our Securities and Exchange Commission (“SEC”) reports due to the Company’s limited internal resources and lack of ability to have multiple levels of transaction review. Through the use of external consultants and the review process, management believes that the financial statements and other information presented herewith are materially correct.

 

The management including its Principal Executive Officer and Principal Financial Officer, does not expect that its disclosure controls and procedures, or its internal controls over financial reporting will prevent all error and all fraud. A control system no matter how well conceived and operated, can provide only reasonable not absolute assurance that the objectives of the control system are met. Further, the design of control system must reflect the fact that there are resource constraints, and the benefit 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. 

 

This Annual Report does not include an attestation report of the Company’s independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s independent registered public accounting firm pursuant to the temporary rules of the SEC that permit the Company to provide only management’s report in this Annual Report.

 

This report shall not be deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liabilities of this section, and is not incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

 

(b) Change in Internal Control Over Financial Reporting

 

We have not made any significant changes to our internal controls subsequent to the Evaluation Date. We have not identified any significant deficiencies or material weaknesses or other factors that could significantly affect these controls, and therefore, no corrective action was taken.

 

Item 9B. Other Information.

 

NONE

 

 
17

 

PART III

 

Item 10. Directors, Executive Officers and Corporate Governance.

 

Directors and Executive Officers.

 

The names and ages of our directors and executive officers as of December 31, 2014 are set forth below. Our Bylaws provide for not less than one and not more than seven directors. All directors are elected annually by the stockholders to serve until the next annual meeting of the stockholders and until their successors are duly elected and qualified.

 

Name

  Age  

Position

 

 

 

Dr. Ruggero M. Santilli (1)

 

80

Chief Executive Officer, President, Principal Executive Officer, Principal Accounting Officer, Director (1)

 

 

 

Mrs. Carla Santilli (2)

 

75

Treasurer, Secretary, Director (2)

 

(1) Dr. Ruggero M. Santilli will serve as a director until the next annual shareholder meeting.

(2) Mrs. Carla Santilli will serve as a director until the next annual shareholder meeting.

 

Dr. Ruggero M. Santilli, Chief Executive Officer and Director

 

Dr. Ruggero Maria Santilli is 80 years of age. In the last 5 years Dr. Santilli has served as the Chairman of the Board and Chief Executive Officer for Magnegas Corporation, a publicly traded entity from which he voluntarily resigned on May 30, 2013. Dr. Santilli was born and educated in Italy where he achieved his Ph.D., in mathematics and physics, as well as a chair in nuclear physics at the Avogadro Institute in Turin, Italy. In 1967 Santilli was invited by the University of Miami in Florida to conduct research for NASA and he moved with his family to the U.S.A. where he subsequently became a U.S. citizen. In 1968 he joined the faculty of Boston University, under partial support from the U.S. Air Force, where he taught physics and applied mathematics from prep courses to seminar post-PhD. courses. In 1975-1977 he went to MIT and from 1978 to 1983 he was a member of Harvard University faculty where he received five grants from the U. S. Department of Energy to study a generalization of quantum mechanics and chemistry needed for new clean energies and fuels. Since 1984 he has been the President of the Institute for Basic Research, originally located in a Victorian building inside Harvard University grounds and moved to Florida in 1990. Since his time at Harvard University he studied new clean energies and related chemistry. None of the aforementioned entities are a parent, subsidiary or affiliate of the Company. Dr. Santilli has not engaged in any related party transactions with the Company.

 

Dr. Santilli is the author of over 250 technical articles and 18 post Ph.D. level monographs in mathematics, physics, cosmology, superconductivity, chemistry and biology published the world over. He is the founding editor of three journals in mathematics and physics and editor of several others.

 

 
18

 

Dr. Santilli is also internationally known for the discovery of the basic science and for the industrial development of the “Santilli MagneGas Technology”.

 

Dr. Santilli is the recipient of various honors, including: his nomination by the Estonia Academy of Sciences among the most illustrious applied mathematicians of all times; two gold medals for scientific merits; the listing as "Santilli Hall" of a class room at an Australian research center; and nominations for the Nobel Prize in physics as well as in chemistry from scientists the world over. A scientific meeting was organized in June 2005 at the University of Karlstad, Sweden, to honor Prof. Santilli on his 70th birthday with participation of scientists from 50 countries.

 

Dr. Santilli’s qualifications to serve on our board of directors include his extensive knowledge of energy products and his experience researching new clean energies and fuels.

 

Mrs. Carla Santilli

 

Carla Santilli is 75 years of age, has been a Director of Magnegas Corporation since May 2007 and is the spouse of Dr. Santilli. Carla Santilli holds a Master Degree in Human Services Administration from the School of Social Work of Boston University. She held positions of Clinical Social Worker and Community Programs Coordinator for the State of Massachusetts. Since the late 1980's, Mrs. Santilli has been employed as the President and Chief Executive Officer of Hadronic Press, Inc, a physics and mathematics academic publishing company. In this capacity, Mrs. Santilli has directed the growth of this company from start-up to become one of the world's leading physics and mathematics publishing companies. Books and journals published by Hadronic Press can be found in all of the leading University libraries across the world. Mrs. Santilli has been involved in the private sector as grant administrator and public relations specialist in the fields of academic publishing and environmental sciences. None of the aforementioned entities are a parent, subsidiary or affiliate of the Company. Mrs. Santilli has not engaged in any related party transactions with the Company. Mrs. Santilli is currently a Director of Magnegas Corporation.

 

Mrs. Santilli’s qualifications to serve on our board of directors include her thirty years of experience as President and Chief Executive Officer of Hadronic Press, Inc. and her experience in the environmental sciences field.

 

Involvement in Certain Legal Proceedings. There have been no events under any bankruptcy act, no criminal proceedings and no judgments, injunctions, orders of decrees material to the evaluation of the ability and integrity of any director, executive officer, promoter or control person of Registrant during the past ten years.

 

The Board of Directors acts as the Audit Committee, and the Board has no separates committees. The Company has no qualified financial expert at this time because it has not been able to hire a qualified candidate. Further, the Company believes that it has inadequate financial resources at this time to hire such expert. The Company intends to continue to search for a qualified individual for hire.

 

 

A.

Significant Employees. None.

 

 

 
 

B.

Family Relationships. None.

 

 

 
 

C.

Involvement in Certain Legal Proceedings. There have been no events under any bankruptcy act, no criminal proceedings and no judgments, injunctions, orders of decrees material to the evaluation of the ability and integrity of any director, executive officer, promoter or control person of Registrant during the past ten years.

 

 

 
 

D.

The Board of Directors acts as the Audit Committee, and the Board has no separates committees. The Company has no qualified financial expert at this time because it has not been able to hire a qualified candidate. Further, the Company believes that it has inadequate financial resources at this time to hire such expert. The Company intends to continue to search for a qualified individual for hire.

 

 
19

 

Legal Proceedings.

 

To the best of our knowledge, except as set forth herein, none of the directors or director designees to our knowledge has been convicted in a criminal proceeding, excluding traffic violations or similar misdemeanors, or has been a party to any judicial or administrative proceeding during the past five years that resulted in a judgment decree or final order enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities laws, or finding of any violation of federal or state securities laws, except for matters that were dismissed without sanction or settlement.

 

Meetings and Committees of the Board of Directors.

 

We do not have a nominating committee of the Board of Directors, or any committee performing similar functions. Nominees for election as a director are selected by the Board of Directors.

 

We do not yet have an audit committee or an audit committee financial expert. We expect to form such a committee composed of non-employee directors when such individuals are added to the board of directors. We may in the future attempt to add a qualified board member to serve as an audit committee financial expert in the future, subject to our ability to locate and compensate such a person. Despite the lack of an audit committee, those members of the board of directors that would otherwise be on our audit committee will continue to analyze and investigate our actual and potential businesses prospects as members of our board of directors. Furthermore, our entire board of directors is aware of the importance of the financial and accounting due diligence that must be undertaken in furtherance of our business and they intend to conduct a comprehensive accounting financial analysis of the Company’s business.

 

Item 11. Executive Compensation.

 

The following table sets forth information concerning the annual and long term compensation of our Chief Executive Officer, and the executive officers who served at the end of the fiscal year December 31, 2014, for services rendered in all capacities to us. The listed individuals shall hereinafter be referred to as the “Named Executive Officers.”

 

Summary Compensation Table - Officers

 

(a)

  (b)     (c)     (d)     (e)     (f)     (g)     (h)     (i)     (j)  
        Salary     Bonus     Stock Awards     Option Awards     Non-equity Incentive plan Compensation     Nonqualified deferred compensation earnings     All other Compensation     Total  

Name and principal position

  Year    

($)

   

($)

   

($)

   

($)

   

($)

   

($)

   

($)

   

($)

 

Dr. Ruggero M. Santilli,

 

2013

   

78,462

   

-0-

   

-0-

   

-0-

   

-0-

   

-0-

   

-0-

   

78,462

 
President, CEO (1)  

2014

     

180,000

     

-0-

     

-0-

     

-0-

     

-0-

     

-0-

     

-0-

      180,000  

 

 

 

 

 

 

 

 

 

 

Mrs. Carla Santilli,

 

2013

     

25,385

     

-0-

     

-0-

     

-0-

     

-0-

     

-0-

     

-0-

     

25,385

 
Secretary, Treasurer (2)  

2014

     

72,000

     

-0-

     

-0-

     

-0-

     

-0-

     

-0-

     

-0-

      72,000  

 

 

 

 

 

 

 

 

 

 

Jay D. Solomon, President (3)

 

2011

     

-0-

     

-0-

     

-0-

     

-0-

     

-0-

     

-0-

     

-0-

     

-0-

 

 

 

 

 

 

 

 

 

 

 

Jay D. Solomon, President

 

2012

     

-0-

     

-0-

     

-0-

     

-0-

     

-0-

     

-0-

     

-0-

     

-0-

 

 

 

 

 

 

 

 

 

 

 

Jay D. Solomon, President

 

2013

     

-0-

     

-0-

     

-0-

     

-0-

     

-0-

     

-0-

     

-0-

     

-0-

 

 

(1)

The Company has entered into employment contract with Dr. Santilli. The employment contract for Dr. Santilli provides for an annual base salary of $180,000 payable in weekly installments and annual stock option compensation equal to .01% of the issued and outstanding number of shares on July 25 each year at the average trading price of the company common stock on such date. Dr. Santilli has not received any compensation from the Company as of the date of this report and has agreed that all compensation due to him shall be accrued until such time as the Company generates sufficient income on a consistent basis to satisfy the obligations set forth in his agreement without jeopardizing the ongoing fiscal operations of the Company.

 

 
20

 

(2)

The Company has entered into a consulting agreement with Mrs. Santilli, at an annual rate of $72,000. Mrs. Santilli has not received any compensation from the Company as of the date of this report and has agreed that all compensation due to her shall be accrued until such time as the Company generates sufficient income on a consistent basis without jeopardizing the ongoing fiscal operations of the Company.

 

 

(3)

Jay D. Solomon resigned as an officer and director for the Company on July 25, 2013.

 

Director Compensation

 

(a)

  (b)     (c)     (d)     (e)     (f)     (g)(2)     (h)  
    Fees Earned or Paid in Cash     Stock Awards     Option Awards     Non-Equity Incentive Plan Compensation     Nonqualified deferred compensation earnings     All Other Compensation     Total  

Name and principal position (1)

  ($)     ($)     ($)     ($)     ($)     ($)     ($)  

Dr. Ruggero M. Santilli, President, CEO (1)

 

-0-

   

-0-

   

-0-

   

-0-

   

-0-

   

-0-

   

-0-

 

 

 

 

 

 

 

 

 

Mrs. Carla Santilli, Treasurer, Secretary (2)

   

-0-

     

-0-

     

-0-

     

-0-

     

-0-

     

-0-

     

-0-

 

 

 

 

 

 

 

 

 

Jay D. Solomon, Director (3)

   

-0-

     

-0-

     

-0-

     

-0-

     

-0-

     

-0-

     

-0-

 

 

(1)

The Company has entered into employment contract with Dr. Santilli. The employment contract for Dr. Santilli provides for an annual base salary of $180,000 payable in weekly installments and annual stock option compensation equal to .01% of the issued and outstanding number of shares on July 25 each year at the average trading price of the company common stock on such date. Dr. Santilli has not received any compensation from the Company as of the date of this report and has agreed that all compensation due to him shall be accrued until such time as the Company generates sufficient income on a consistent basis to satisfy the obligations set forth in his agreement without jeopardizing the ongoing fiscal operations of the Company.

 

 

(2)

The Company has entered into a consulting agreement with Mrs. Santilli. Mrs. Santilli has not received any compensation from the Company as of the date of this report and has agreed that all compensation due to her shall be accrued until such time as the Company generates sufficient income on a consistent basis without jeopardizing the ongoing fiscal operations of the Company.

 

 

(3)

Jay D. Solomon resigned as an officer and director for the Company on July 25, 2013.

 

No retirement, pension, profit sharing, stock option or insurance programs or other similar programs have been adopted by the Company for the benefit of its employees.

 

There are no understandings or agreements regarding compensation our management will receive after a business combination that is required to be included in this table, or otherwise.

 

 
21

 

Compensation Committee Interlocks and Insider Participation.

 

As of December 31, 2014 our Board of Directors consisted of Dr. Ruggero M. Santilli and Mrs. Carla Santilli. At present, the Board of Directors has not established any committees.

 

Director Compensation.

 

There are currently no compensation arrangements in place for members of the board of directors.

 

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

 

The following table sets forth information concerning the beneficial ownership of shares of our common stock with respect to stockholders who were known by us to be beneficial owners of more than 5% of our common stock as of December 31, 2014, and our officers and directors, individually and as a group. Unless otherwise indicated, the beneficial owner has sole voting and investment power with respect to such shares of common stock.

 

Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission (“SEC”) and generally includes voting or investment power with respect to securities. In accordance with the SEC rules, shares of our common stock which may be acquired upon exercise of stock options or warrants which are currently exercisable or which become exercisable within 60 days of the date of the table are deemed beneficially owned by the optionees, if applicable. Subject to community property laws, where applicable, the persons or entities named below have sole voting and investment power with respect to all shares of our common stock indicated as beneficially owned by them.

 

Title of Class

 

Name and Address of Beneficial Owner

Amount and Nature of Beneficial Owner (1)

 

Percent of
Class (2)

 

Common Stock

 

Dr. Ruggero M. Santilli (1)(2)(3)

1444 Rainville Road

Tarpon Springs, FL 34689

14,403,060

   

96.02

%

               

Common Stock

 

Mrs. Carla Santilli (1)(2)(3)

1444 Rainville Road

Tarpon Springs, FL 34689

 

14,403,060

     

96.02

%

 

 

 

 

 

 

Common Stock

 

Officers and Directors as a group

   

14,403,060

     

96.02

%

 

(1)

Dr. Ruggero M. Santilli and Mrs. Carla Santilli are married and each own fifty percent of the equity in Clean Energies Tech, Inc. which owns 4,403,060 shares of our common stock.

 

 
22

 

(2)

Dr. Ruggero M. Santilli and Mrs. Carla Santilli each own fifty percent of the equity in Global Beta, LLC which owns 7,000,000 shares of our common stock.

 

 

(3)

Mrs. Carla Santilli is a member of the board of directors of The R.M. Santilli Foundation, Inc., a non-profit Florida corporation. Dr. Santilli’s indirect beneficial interest is through his spouse, Mrs. Carla Santilli.

 

Dr. Santilli is our Chief Executive Officer and a director for our Company. Mrs. Carla Santilli is our Treasurer and a director for our Company.

 

The following table sets forth, as of December 31, 2014, the number of shares of our Series “A” Convertible Preferred Stock owned of record and beneficially by our executive officers, directors and persons who beneficially own more than 5% of such outstanding shares.

 

Name and Address of Beneficial Owner

  Amount and Nature of Beneficial Ownership     Percentage of Class  

Hadronic Technologies Press, Inc. (1)

35246 US Highway 19 North, Suite #215

Palm Harbor, FL 34684

 

50,000,000

   

100

%

 

(1)

Dr. Ruggero M. Santilli and Mrs. Carla Santilli are married and each own fifty percent of the equity in Hadronic Technologies Press, Inc. which owns 50,000,000 shares of our Series “A” Convertible Preferred Stock. The Series “A” Convertible Preferred Stock has 15 votes per share and is convertible into 10 shares of our common stock at the election of the shareholder.

 

Item 13. Certain Relationships and Related Transactions, and Director Independence.

 

Transactions with Related Persons, Promoters and Certain Control Persons.

 

We utilize the office space and equipment of our management at no cost. On April 21, 2011, 1,000,000 shares were issued to Jay D. Solomon, our sole officer and director. Except as set forth above, there have been no related party transactions, or any other transactions or relationships required to be disclosed.

 

We have not established our own definition for determining whether our director or nominees for directors are “independent” nor has it adopted any other standard of independence employed by any national securities exchange or inter-dealer quotation system, though our current directors would not be deemed to be “independent” under any applicable definition given that they are officers of the Company. We also have not established any committees of the Board of Directors.

 

Given the nature of our Company, its limited shareholder base and the current composition of management, the Board of Directors does not believe that we require any corporate governance committees at this time. As our operations generate revenue we intend to seek additional members for our board of directors and establish our own definition of “independent” as related to directors and nominees for directors. We further intend to establish committees that will be suitable for our operations as our business operations warrant.

 

 
23

 

Director Independence.

 

We have not:

 

 

·

Established our own definition for determining whether our director or nominees for directors are “independent” nor has it adopted any other standard of independence employed by any national securities exchange or inter-dealer quotation system, though our current directors would not be deemed to be “independent” under any applicable definition given that he is an officer of the Company; nor,

   

 

·

Established any committees of the Board of Directors.

 

Given the nature of our Company, its limited shareholder base and the current composition of management, the Board of Directors does not believe that we require any corporate governance committees at this time. The Board of Directors takes the position that management of a target business will establish:

 

 

·

Its own Board of Directors

     
 

·

Establish its own definition of “independent” as related to directors and nominees for directors,

     
 

·

Establish committees that will be suitable for its operations after the Company consummates a business combination

 

Item 14. Principal Accounting Fees and Services.

 

    2013     2014  

Audit fees

   

12,000

     

9,500

 

Audit related fees

   

---

     

---

 

Tax fees

   

---

     

---

 

All other fees

   

---

     

---

 

 

The Company does not currently have an audit committee. The normal functions of the audit committee are handled by the board of directors.

 

 
24

 

PART IV

 

Item 15. Exhibits, Financial Statement Schedule.

 

Exhibit Number and Description

 

Location Reference

 

 

 

 

(a)

Financial Statements

 

Filed herewith 

 

 

 

 

(b)

Exhibits required by Item 601, Regulation S-K;

 

 

 

 

 

 

 

(3.0)

Articles of Incorporation

 

 

 

 

 

 

 

 

 

(3.1)

Initial Articles of Incorporation filed with Form 10 Registration Statement on July 21, 2011.

 

See Exhibit Key

 

 

 

 

 

 

 

 

(3.2)

Amendment to Articles of Incorporation dated July 29, 2013.

 

See Exhibit Key

 

 

 

 

 

 

 

 

(3.3)

Amendment to Articles of Incorporation dated October 7, 2013.

 

See Exhibit Key 

 

 

 

 

 

 

 

 

(3.4)

Amendment to Articles of Incorporation dated April 25, 2014.

 

See Exhibit Key

 

 

 

 

 

 

 

 

(3.5) 

Bylaws filed with Form 10 Registration Statement on July 21, 2011.  

 

See Exhibit Key

 

 

 

 

 

 

 

(11.0)

Statement re: computation of per share Earnings.

 

Note 2 to Financial Stmts.

 

 

 

 

 

 

(14.0)

Code of Ethics

 

See Exhibit Key

 

 

 

 

 

 

(31.1)

Certificate of Chief Executive Officer And Principal Financial and Accounting Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

 

Filed herewith

 

 

 

 

 

 

(32.1)

Certification of Chief Executive Officer And Principal Financial and Accounting Officer pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 

Filed herewith

 

 

 

 

 

 

(101.INS)

XBRL Instance Document

 

Filed herewith 

 

 

 

 

 

 

(101.SCH)

XBRL Taxonomy Ext. Schema Document

 

Filed herewith 

 

 

 

 

 

 

(101.CAL)

XBRL Taxonomy Ext. Calculation Linkbase Document

 

Filed herewith 

 

 

 

 

 

 

(101.DEF)

XBRL Taxonomy Ext. Definition Linkbase Document

 

Filed herewith 

 

 

 

 

 

 

(101.LAB)

XBRL Taxonomy Ext. Label Linkbase Document

 

Filed herewith 

 

 

 

 

 

 

(101.PRE)

XBRL Taxonomy Ext. Presentation Linkbase Document

 

Filed herewith

 

Exhibit Key
 

3.1

Incorporated by reference herein to the Company’s Form 10 Registration Statement filed with the Securities and Exchange Commission on July 21, 2011.

 

 

3.2

Incorporated by reference herein to the Company’s Form 10-Q Quarterly Report filed with the Securities and Exchange Commission on November 15, 2013.

 

 

3.3 

Incorporated by reference herein to the Company’s Form 10-Q Quarterly Report filed with the Securities and Exchange Commission on November 15, 2013.

 

 

3.4 

Incorporated by reference herein to the Company’s Form 8-K Current Report filed with the Securities and Exchange Commission on May 5, 2014.  

 

 

3.5 

Incorporated by reference herein to the Company’s Form 10 Registration Statement filed with the Securities and Exchange Commission on July 21, 2011.  

 

 

14.0

Incorporated by reference herein to the Company’s Form 10-Q Quarterly Report filed with the Securities and Exchange Commission on January 17, 2012.

 

 
25

 

Signatures

 

Pursuant to the requirements of Section 13 or 15(d) 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.

 

THUNDER ENERGIES CORPORATION

 

NAME

 

TITLE

 

DATE

         

/s/ Dr. Ruggero M. Santilli

 

Principal Executive Officer,

 

March 26, 2015

Dr. Ruggero M. Santilli

  Principal Accounting Officer, Chief Financial Officer, Chairman of the Board of Directors    

 

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

NAME

 

TITLE

 

DATE

         

/s/ Dr. Ruggero M. Santilli

 

Principal Executive Officer,

 

March 26, 2015

Dr. Ruggero M. Santilli

  Principal Accounting Officer, Chief Financial Officer, Chairman of the Board of Directors    

 

 

 

/s/ Carla Santilli

 

Director

 

March 26, 2015

Carla Santilli

       

 

Supplemental Information to be Furnished With Reports Filed Pursuant to Section 15(d) of the Act by Registrants

Which Have Not Registered Securities Pursuant to Section 12 of the Act

 

None.

 

 
26

 

THUNDER ENERGIES CORPORATION

INDEX TO FINANCIAL STATEMENTS

 

 

Page

   

Report of Independent Registered Public Accounting Firm

F-2

   

Balance Sheets at December 31, 2014 and 2013

F-3

   

Statements of Operations for the years ended December 31, 2014 and 2013

F-4

   

Statements of Changes in Shareholders’ Deficit for the years ended December 31, 2014 and 2013

F-5

   

Statements of Cash Flows for the years ended December 31, 2014 and 2013

F-7

   

Notes to Financial Statements

F-8

 

 
F-1

 

Messineo & Co, CPAs LLC

2471 N McMullen Booth Rd, Ste. 302

Clearwater, FL 33759-1362

T: (518) 530-1122

F: (727) 674-0511

 

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Board of Directors and Stockholders

Thunder Energies Corporation

Tarpon Springs, Florida

 

We have audited the accompanying balance sheets of Thunder Energies Corporation, as of December 31, 2014 and 2013 and the related statements of operations, stockholders’ deficit and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

 

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as, evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

 

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Thunder Energies Corporation as of December 31, 2014 and 2013 and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has incurred losses, has not generated revenues and may be unable to raise further equity. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans regarding those matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

 

Messineo & Co, CPAs LLC

Clearwater, Florida

March 20, 2015

 

 
F-2

 

THUNDER ENERGIES CORPORATION

Balance Sheets

 

  December 31,     December 31,  
  2014     2013  
       

ASSETS

       

Current Assets

       

Cash and cash equivalents

 

$

4,217

   

$

3,913

 

Prepaid expenses

   

---

     

609

 

Total Current Assets

   

4,217

     

4,522

 
               

Non-current assets

               

Intangible assets, net of accumulated amortization of $200 and $0, respectively

   

800

     

1,000

 

Total non-current assets

   

800

     

1,000

 
               

TOTAL ASSETS

 

$

5,017

   

$

5,522

 
               

LIABILITIES AND STOCKHOLDERS' DEFICIT

               

Current Liabilities

               

Accounts payable

 

$

12,866

   

$

8,990

 

Accrued interest

   

3,148

     

344

 

Accrued compensation, related parties

   

361,847

     

109,847

 

Note payable, related parties

   

219,000

     

60,000

 

Total Current Liabilities

   

596,861

     

179,181

 
               

TOTAL LIABILITIES

   

596,861

     

179,181

 
               

COMMITMENTS AND CONTINGENCIES

               
               

Stockholders' Deficit

               

Preferred stock: $0.001 par value, 750,000,000 authorized; 50,000,000 and 50,000,000 shares issued and outstanding, respectively

   

50,000

     

50,000

 

Common stock: $0.001 par value 900,000,000 authorized; 16,366,950 and 16,000,000 shares issued and outstanding, respectively

   

16,367

     

16,000

 

Additional paid in capital

   

583,577

     

435,000

 

Accumulated deficit

 

(1,241,788

)

 

(674,659

)

Total Stockholders' Deficit

 

(591,844

)

 

(173,659

)

               

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT

 

$

5,017

   

$

5,522

 

 

See notes to financial statements

 

 
F-3

 

THUNDER ENERGIES CORPORATION

Statements of Operations

 

    Year Ended December 31,  
    2014     2013  
         

REVENUE

 

$

---

   

$

---

 
               

OPERATING EXPENSES

               

Research and development

   

52,492

     

4,047

 

Professional fees

   

262,110

     

78,232

 

Selling, general and administrative expenses

   

249,723

     

592,036

 

Total operating expenses

   

564,325

     

674,315

 
               

Net loss from operations

 

(564,325

)

 

(674,315

)

               

Other income (expense)

               

Interest expense

 

(2,804

)

 

(344

)

Net loss before income taxes

 

(567,129

)

 

(674,659

)

               

Income taxes

   

---

     

---

 
               

Net loss

 

$

(567,129

)

 

$

(674,659

)

               

Basic and diluted loss per share

 

$

(0.04

)

 

$

(0.04

)

               

Weighted average number of shares outstanding

   

16,066,425

     

15,394,521

 

 

See notes to financial statements

 

 
F-4

 

THUNDER FUSION CORPORATION

Statements of Changes in Stockholders’ Deficit

For the Years Ended December 31, 2014 and 2013

 

                  Additional          
  Preferred Stock     Common Stock     Paid in     Accumulated      
  Shares     Amount     Shares     Amount     Capital     Deficit     Total  
                           

Balance at January 1, 2013

 

---

   

$

---

   

15,000,000

   

$

15,000

   

$

(12,000

)

 

$

(3,248

)

 

$

(248

)

                                                       

Net loss, through July 25, 2013 (date of acquisition)

   

---

     

---

     

---

     

---

     

---

   

(3,684

)

 

(3,684

)

Accounting for reverse acquisition of CCJ Acquisition Corp., July 25, 2013

   

---

     

---

     

---

     

---

     

---

     

---

     

---

 

(a) Forgiveness of related party debt

   

---

     

---

     

---

     

3,932

     

---

     

---

     

3,932

 

(b) Elimination of CCJ Acquisition Corp.

   

---

     

---

     

---

   

(3,932

)

 

(3,000

)

   

6,932

     

---

 

Issued common stock in exchange for assignment of non-monetary assets to company by its shareholders

   

---

     

---

     

1,000,000

     

1,000

     

---

     

---

     

1,000

 

Issued 50 million shares of Series “A” Convertible Preferred stock at par value of $0.001 to a related party for services rendered on October 10, 2013

   

50,000,000

     

50,000

     

---

     

---

     

450,000

     

---

     

500,000

 
                                                       

Net loss

   

---

     

---

     

---

     

---

     

---

   

(674,659

)

 

(674,659

)

                                                       

Balance, December 31, 2013

   

50,000,000

   

$

50,000

     

16,000,000

   

$

16,000

   

$

435,000

   

$

(674,659

)

 

$

(173,659

)

                                                       

Sold common stock by subscription in exchange for cash

   

---

     

---

     

142,420

     

142

     

28,802

     

--

     

28,944

 

Cancellation of 295,470 shares of common stock undistributed from reverse-merger agreement

   

---

     

---

   

(295,470

)

 

(295

)

   

295

     

---

     

---

 

Issued common stock for services

   

---

     

---

     

520,000

     

520

     

119,480

     

---

     

120,000

 
                                                       

Net loss

   

---

     

---

     

---

     

---

     

---

   

(567,129

)

 

(567,129

)

                                                       

Balance, December 31, 2014

   

50,000,000

   

$

50,000

     

16,366,950

   

$

16,367

   

$

583,577

   

$

(1,241,788

)

 

$

(591,844

)

 

See notes to financial statements

 

 
F-5

 

THUNDER ENERGIES CORPORATION

Statements of Cash Flows

 

  December 31,  
  2014     2013  
       

CASH FLOWS FROM OPERATING ACTIVITIES:

       

Net loss

 

$

(567,129

)

 

$

(674,659

)

Adjustment to reconcile net loss to net cash provided (used in) in operations:

               

Amortization

   

200

     

---

 

Stock based compensation

   

120,000

     

500,000

 

Changes in assets and liabilities:

               

(Increase) decrease in operating assets:

               

Prepaid expense

   

609

   

(609

)

Increase (decrease) in operating liabilities:

               

Accounts payable

   

3.876

     

8,990

 

Accrued interest

   

2,804

     

344

 

Accrued expenses, related parties

   

252,000

     

109,847

 

Related party advances

   

---

   

(392

)

Net Cash provided by (used in) operating activities

 

(187,640

)

 

(56,479

)

               

CASH FLOWS FROM FINANCING ACTIVITIES:

               

Proceeds from shareholder loans

   

159,000

     

60,000

 

Proceeds from issuances of stock

   

28,944

     

---

 

Net Cash provided by financing activates

   

187,944

     

60,000

 
               

Net change in cash and cash equivalents

   

304

     

3,521

 
               

Cash and cash equivalents

               

Beginning of period

   

3,913

     

392

 

End of period

 

$

4,217

   

$

3,913

 
               

Supplemental cash flow information

               

Cash paid for interest

 

$

---

   

$

---

 

Cash paid for taxes

 

$

---

   

$

---

 
               

Non-cash Transactions:

               

Stock issued in payment of intellectual property

 

$

---

   

$

1,000

 

Forgiveness of debt by related party

 

$

---

   

$

3,932

 

 

See notes to financial statements.

 

 
F-6

 

Thunder Energies Corporation

Notes To Financial Statements

 

NOTE 1 – NATURE OF BUSINESS

 

Thunder Energies Corporation (“we”, “us”, “our”, “TEC” or the “Company”) was incorporated in the State of Florida on April 21, 2011. Since inception, the Company has been engaged in organizational efforts and obtaining initial financing. The Company was formed as a vehicle to pursue a business combination and had made no efforts to identify a possible business combination. The business purpose of the Company has been to seek the acquisition of or merger with, an existing company. The Company year-end was changed to December 31 upon a change in control.

 

On July 29, 2013, the Company filed with the Florida Secretary of State, Articles of Amendment to its Articles of Incorporation (the “Amendment”) which changed the name of the Company from CCJ Acquisition Corp. to Thunder Fusion Corporation. The Amendment also changed the principal office address of the Company to 150 Rainville Road, Tarpon Springs, Florida 34689. On May 1, 2014, the Company filed with the Florida Secretary of State, Articles of Amendment to its Articles of Incorporation (the “Amendment”) which changed the name of the Company from Thunder Fusion Corporation to Thunder Energies Corporation. The Amendment also changed the principal office address of the Company to 1444 Rainville Road, Tarpon Springs, Florida 34689.

 

Description of Business, Principal Products, Services

 

The business of Thunder Fusion Corporation ("TFC") is focused on the development of a new clean combustion of fossil fuels (oil, diesel, coal, etc.) with controlled minimal contaminants in the exhaust. Our business objective is achieved via new forms of processing fossil fuels, new additives to the combustion and the assistance of a high voltage electric discharges (patents pending) that burn combustible contaminants in fossil fuel exhaust while providing added on clean energy. The expected principal product, depending on funding, is a new type of furnace for the clean combustion of fossil fuel available in any desired size for any type of energy application, from home heating to large plants for the clean production of electricity. The expected services are to be rendered by providing technical assistance to the market consisting of existing fossil fuel electric power plants for their decrease of pollutants in the exhaust and their verification of EPA regulations on the release of contaminants in the atmosphere. A prototype new furnace is expected to be available within one year following the availability of the necessary funds. As we are a development stage company, we have not yet generated any revenue from the assets that were recently assigned to and acquired by the Company, including the Hadronic reactors. The Hadronic reactors have been utilized to test and confirm the technology for ultimate inclusion in the new furnaces.

 

NOTE 2 – GOING CONCERN

 

For the fiscal years ended December 31, 2014 and 2013, the Company had net losses of $567,129 and $674,659 and negative cash flows from operating activities of $187,640 and $56,479, respectively. As of December 31, 2014 the Company had a working capital deficit of $592,644. The company has not generated any revenues to date.

 

The Company’s financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating cost and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.

 

In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plan to obtain such resources for the Company include, obtaining capital from management and significant stockholders sufficient to meet its minimal operating expenses. However, management cannot provide any assurance that the Company will be successful in accomplishing any of its plans.

 

There is no assurance that the Company will be able to obtain sufficient additional funds when needed or that such funds, if available, will be obtainable on terms satisfactory to the Company. In addition, profitability will ultimately depend upon the level of revenues received from business operations. However, there is no assurance that the Company will attain profitability. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

 

 
F-7

 

Thunder Energies Corporation

Notes To Financial Statements

 

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

BASIS OF PRESENTATION AND USE OF ESTIMATES

 

The Company prepares its financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP"), which require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

RECLASSIFICATION

 

Certain reclassifications have been made to the prior period financial statement to conform to the current period presentation. The reclassifications had no effect on reported losses.

 

CASH AND CASH EQUIVALENTS

 

The Company considers all highly liquid investments with an original maturity of three months or less at the date of acquisition to be cash equivalents. Cash and cash equivalents totaled $4,217 at December 31, 2014 and $3,913 at December 31, 2013.

 

CASH FLOWS REPORTING

 

The Company follows ASC 230, Statement of Cash Flows, for cash flows reporting, classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method (“Indirect method”) as defined by ASC 230, Statement of Cash Flows, to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments. The Company reports the reporting currency equivalent of foreign currency cash flows, using the current exchange rate at the time of the cash flows and the effect of exchange rate changes on cash held in foreign currencies is reported as a separate item in the reconciliation of beginning and ending balances of cash and cash equivalents and separately provides information about investing and financing activities not resulting in cash receipts or payments in the period.

 

RELATED PARTIES

 

The Company follows ASC 850, “Related Party Disclosures,” for the identification of related parties and disclosure of related party transactions.

 

FINANCIAL INSTRUMENTS

 

The Company’s balance sheet includes financial instruments, including cash, accounts payable, accrued expenses and notes payable. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively short period of time between the origination of these instruments and their expected realization.

 

 
F-8

 

Thunder Energies Corporation

Notes To Financial Statements

 

ASC 820, Fair Value Measurements and Disclosures, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:

 

Level 1

Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

 

 

Level 2

Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

 

 

Level 3

Inputs that are both significant to the fair value measurement and unobservable.

 

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of December 31, 2014. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments.

 

INTANGIBLE ASSETS

 

The Company has applied the provisions of ASC topic 350 – Intangible – goodwill and other, in accounting for its intangible assets. Intangible assets are being amortized on a straight-line method on the basis of a useful life of 5 years. The balance at December 31, 2014 and December 31, 2013 was $800 and $1,000, respectively.

 

IMPAIRMENT OF LONG- LIVED ASSETS

 

The Company reviews and evaluates long-lived assets for impairment when events or changes in circumstances indicate that the related carrying amounts may not be recoverable. The assets are subject to impairment consideration under FASB ASC 360-10-35-17 if events or circumstances indicate that their carrying amount might not be recoverable. When the Company determines that an impairment analysis should be done, the analysis will be performed using the rules of FASB ASC 930-360-35, Asset Impairment, and 360-0 through 15-5, Impairment or Disposal of Long- Lived Assets.

 

NON-MONETARY TRANSACTION

 

According to ASC 845-10-S99, transfers of non-monetary assets to a company by its promoters or shareholders in exchange for stock prior to or at the time of the entity’s initial public offering should be recorded at the transferors' historical cost basis determined under Generally Accepted Accounting Principles. As such, the cost basis carried on Hyfuel’s books and records was nominal. Therefore, the accounting principles in ASC 845-10-S99 were followed and the Company recorded the intellectual and physical properties at its historical cost basis, which was at the historical cost basis of a nominal amount. In the transfer agreement 1,000,000 shares of common stock was transferred in exchange for the properties. The transfer was valued at $1,000 (the par value of the shares issued in exchange for the intellectual property); this amount was determined by the Company to be the value received in the exchange and approximates the basis of those assets.

 

RESEARCH AND DEVELOPMENT

 

The Company expenses research and development costs when incurred. Research and development costs include engineering and testing of product and outputs. Indirect costs related to research and developments are allocated based on percentage usage to the research and development. We spent $52,492 and $4,047 for the years ended December 31, 2014 and 2013, respectively.

 

 
F-9

 

Thunder Energies Corporation

Notes To Financial Statements

 

DEFERRED INCOME TAXES AND VALUATION ALLOWANCE

 

The Company accounts for income taxes under ASC 740, Income Taxes. Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the enactment occurs. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations. No deferred tax assets or liabilities were recognized as of December 31, 2014 or December 31, 2013.

 

NET INCOME (LOSS) PER COMMON SHARE

 

Net income (loss) per share is calculated in accordance with ASC 260, “Earnings Per Share.” The weighted-average number of common shares outstanding during each period is used to compute basic earning or loss per share. Diluted earnings or loss per share is computed using the weighted average number of shares and diluted potential common shares outstanding. Dilutive potential common shares are additional common shares assumed to be exercised.

 

Basic net income (loss) per common share is based on the weighted average number of shares of common stock outstanding at December 31, 2014. As of December 31, 2014 the Company had no dilutive potential common shares.

 

SHARE-BASED EXPENSE

 

ASC 718, Compensation – Stock Compensation, prescribes accounting and reporting standards for all share-based payment transactions in which employee services are acquired. Transactions include incurring liabilities, or issuing or offering to issue shares, options, and other equity instruments such as employee stock ownership plans and stock appreciation rights. Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the financial statements based on their fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period).

 

The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of ASC 505-50, Equity – Based Payments to Non-Employees. Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable: (a) the goods or services received; or (b) the equity instruments issued.

 

Share-based expense for the years ended December 31, 2014 and 2013 was $120,000 and $500,000, respectively.

 

COMMITMENTS AND CONTINGENCIES

 

The Company follows ASC 450-20, Loss Contingencies, to report accounting for contingencies. Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. There were no known commitments or contingencies as of December 31, 2014 and 2013.

 

 
F-10

 

Thunder Energies Corporation

Notes To Financial Statements

 

RECENT ACCOUNTING PRONOUNCEMENTS

 

In June 2014, FASB issued Accounting Standards Update (ASU) No. 2014-12 Compensation — Stock Compensation (Topic 718), Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. A performance target in a share-based payment that affects vesting and that could be achieved after the requisite service period should be accounted for as a performance condition under Accounting Standards Codification (ASC) 718, Compensation — Stock Compensation. As a result, the target is not reflected in the estimation of the award’s grant date fair value. Compensation cost would be recognized over the required service period, if it is probable that the performance condition will be achieved. The guidance is effective for annual periods beginning after 15 December 2015 and interim periods within those annual periods. Early adoption is permitted. Management has reviewed the ASU and believes that they currently account for these awards in a manner consistent with the new guidance, therefore there is no anticipation of any effect to the consolidated financial statements.

 

In June 2014, the Financial Accounting Standards Board issued Accounting Standards Update No. 2014-10, which eliminated certain financial reporting requirements of companies previously identified as “Development Stage Entities” (Topic 915). The amendments in this ASU simplify accounting guidance by removing all incremental financial reporting requirements for development stage entities. The amendments also reduce data maintenance and, for those entities subject to audit, audit costs by eliminating the requirement for development stage entities to present inception-to-date information in the statements of income, cash flows, and shareholder equity. Early application of each of the amendments is permitted for any annual reporting period or interim period for which the entity’s financial statements have not yet been issued (public business entities) or made available for issuance (other entities). Upon adoption, entities will no longer present or disclose any information required by Topic 915. The Company has adopted this standard.

 

In August 2014, FASB issued Accounting Standards Update (ASU) No. 2014-15 Preparation of Financial Statements – Going Concern (Subtopic 205-40), Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. Under generally accepted accounting principles (GAAP), continuation of a reporting entity as a going concern is presumed as the basis for preparing financial statements unless and until the entity’s liquidation becomes imminent. Preparation of financial statements under this presumption is commonly referred to as the going concern basis of accounting. If and when an entity’s liquidation becomes imminent, financial statements should be prepared under the liquidation basis of accounting in accordance with Subtopic 205-30, Presentation of Financial Statements—Liquidation Basis of Accounting. Even when an entity’s liquidation is not imminent, there may be conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern. In those situations, financial statements should continue to be prepared under the going concern basis of accounting, but the amendments in this Update should be followed to determine whether to disclose information about the relevant conditions and events. The amendments in this Update are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The Company will evaluate the going concern considerations in this ASU, however, at the current period management does not believe that it has met conditions which would subject these financial statements for additional disclosure.

 

Management does not believe that any recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying financial statements.

 

NOTE 4 – INTANGIBLE PROPERTY

 

On August 10, 2013, the Company entered into an Asset Assignment Agreement (the “IBR Assignment Agreement”) with Institute For Basic Research, Inc., a Florida corporation (“IBR”) that also is beneficially controlled by our Chief Executive Officer, Dr. Ruggero M. Santilli. Pursuant to the IBR Assignment Agreement, IBR irrevocably assigned to the Company all rights, title, ownership and interests in all of IBR’s internet website domain name assets, owned and hereinafter acquired by IBR including, but not limited to, all physical and intangible assets and intellectual property related to the assets.

 

 
F-11

 

Thunder Energies Corporation

Notes To Financial Statements

 

On August 11, 2013, Thunder Energies Corporation (f/k/a Thunder Fusion Corporation) entered into an Asset Assignment Agreement (the “Assignment Agreement”) with HyFuels, Inc., a Florida corporation (“HyFuels”) beneficially controlled by our Chief Executive Officer, Dr. Ruggero M. Santilli. Pursuant to the Assignment Agreement, HyFuels irrevocably assigned to the Company all physical assets, intangible assets, accounts receivable, intellectual property, accounting software, billing software, client lists, client prospects, trade secrets, proprietary property, the intellectual and physical property known as intermediate nuclear fusion without radiation, the physical property consisting of seven (7) Hadronic reactors, all copyrights, patents, patent applications, patent assignments, trademarks and anything having commercial or exchange value and the like.

 

Consideration for the assignment agreements consisted of one million (1,000,000) shares of our common stock that were issued to Dr. Ruggero M. Santilli, as designee for IBR and HyFuels. Company management determined the amount of consideration based upon ASC 845-10-S99 pertaining to transfer of non-monetary assets. According to ASC 845-10-S99, transfers of non-monetary assets to a company by its promoters or shareholders in exchange for stock prior to or at the time of the entity’s initial public offering should be recorded at the transferors’ historical cost basis determined under Generally Accepted Accounting Principles. As such, the cost basis carried on the books and records of HyFuels and IBR was minimal or essentially zero. Therefore, the accounting principles in ASC 845-10-S99 were followed and the Company recorded the intellectual and physical properties at its historical cost basis, which was at the historical cost basis of a nominal amount. In connection with the aforementioned assignment agreements, 1,000,000 shares of our common stock were transferred in exchange for the assets. The transfer was valued at one thousand dollars ($1,000.00), the value of the shares issued at par ($0.001) in exchange for the assets. This amount was determined by the Company to approximate the basis of those assets.

 

The Company recorded the property and intangibles (7 reactors, intellectual property rights to develop the technology, and website) as an intangible asset. The valuation of the properties was the par value of the stock received in exchange for the rights and assets.

 

The Company recognized $200 in amortization expense for the year ending December 31, 2014.

 

NOTE 5 – INCOME TAXES

 

At December 31, 2014, the Company had a net operating loss carry–forward for Federal income tax purposes of approximately $1,241,000 that may be offset against future taxable income through 2032 No tax benefit has been reported with respect to these net operating loss carry-forwards in the accompanying financial statements because the Company believes that the realization of the Company’s net deferred tax assets calculated at the effective rates note below, was not considered more likely than not and accordingly, the potential tax benefits of the net loss carry-forwards are fully offset by the valuation allowance.

 

Deferred tax assets consist primarily of the tax effect of NOL carry-forwards. The Company has provided a full valuation allowance on the deferred tax assets because of the uncertainty regarding its realizability.

 

The Company’s tax expense differs from the “expected” tax expense for Federal income tax purposes (computed by applying the United States Federal tax rate of 34% and State tax rate of 3.6% to income before taxes), as follows:

 

For the Year Ended December 31,

  2014     2013  

Tax expense (benefit) at the statutory rate

 

$

(193,000

)

 

$

(229,000

)

State income taxes, net of federal income tax benefit 

 

(20,000

)

 

(24,000

)

Change in valuation allowance

   

213,000

     

253,000

 

Total

 

$

---

   

$

---

 

 

 
F-12

 

Thunder Energies Corporation

Notes To Financial Statements

 

The tax effects of the temporary differences between reportable financial statement income and taxable income are recognized as deferred tax assets and liabilities.

 

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment.

 

For the year ended December 31, 2014 and for the year ended December 31, 2013, the Company has net operating losses from operations. The carry forwards expire through the year 2032. The Company’s net operating loss carry forward may be subject to annual limitations, which could reduce or defer the utilization of the losses as a result of an ownership change as defined in Section 382 of the Internal Revenue Code. A valuation allowance has been applied due to the uncertainty of realization.

 

The Company’s net deferred tax asset as of December 31, 2014 and December 31, 2013 is as follows:

 

    December 31,
2014
    December 31,
2013
 

Deferred tax assets

 

$

466,000

   

$

253,000

 

Valuation allowance

 

(466,000

)

 

(253,000

)

Net deferred tax asset

 

$

---

   

$

---

 

 

The Company is currently open to audit under the statute of limitations by the Internal Revenue Service for the period from inception ended December 31, 2013 through the year ended December 31, 2014. The Company recognizes interest and penalties related to income taxes in income tax expense. The Company had incurred no penalties and interest for the period from inception ended December 31, 2013 through the year ended December 31, 2014.

 

NOTE 6 – SHAREHOLDERS’ EQUITY

 

COMMON STOCK

 

The Company has been authorized to issue 900,000,000 shares of common stock, $.001 par value. Each share of issued and outstanding common stock shall entitle the holder thereof to fully participate in all shareholder meetings, to cast one vote on each matter with respect to which shareholders have the right to vote, and to share ratably in all dividends and other distributions declared and paid with respect to common stock, as well as in the net assets of the corporation upon liquidation or dissolution.

 

On July 25, 2013, Dr. Ruggero M. Santilli acquired from Company’s existing shareholders, a control block of stock in the Company consisting of two million nine hundred forty thousand (2,940,000) shares of restricted common stock of the Company, in a private equity transaction. As a result of this acquisition, Dr. Ruggero M. Santilli owns 98% of the issued and outstanding shares of common stock of the Company.

 

On August 11, 2013 the Company issued 1,000,000 shares of common stock in exchange for assignment of non-monetary intangible assets (See Intangible Assets, Note 4).

 

 
F-13

 

Thunder Energies Corporation

Notes To Financial Statements

 

On August 12, 2013, the Board of Directors effectuated a 5 for 1 forward stock split. All shares presented and per share amounts reflect the forward stock split.

 

During the period of February 14, 2014 through April 8, 2014, the Company issued 141,820 shares of common stock, by subscription, in exchange for cash proceeds of $28,344 to various non-related parties at $0.20 per share.

 

On April 10, 2014 the Company issued 600 shares of common stock, by subscription, in exchange for cash proceeds of $600 to a non-related party at $1.00 per share.

 

On June 27, 2014 the Company canceled 295,470 shares of common stock which were unissued and held in escrow from the reverse merger agreement. The shares were associated with the reverse acquisition of CCJ Acquisition Corp. The shares were valued at par $0.001.

 

October 16, 2014 the Company issued 500,000 shares of common stock in exchange for stock transfer services for a period of two years. The value of the transaction was $100,000 or $0.20 per share, the fair value of the shares at the date of grant.

 

On December 17, 2014 the Company issued 20,000 shares of common stock in exchange for services valued at $20,000 or $1.00 per share, the fair market value of the shares at the date of grant.

 

PREFERRED STOCK

 

The Company has been authorized to issue 750,000,000 shares of $.001 par value Preferred Stock. The Board of Directors is expressly vested with the authority to divide any or all of the Preferred Stock into series and to fix and determine the relative rights and preferences of the shares of each series so established, within certain guidelines established in the Articles of Incorporation.

 

Series A: The certificate of designation for the Preferred A Stock provides that as a class it possesses a number of votes equal to fifteen (15) votes per share and may be converted into ten (10) $0.001 par value common shares.

 

On October 10, 2013, the Company issued fifty million (50,000,000) shares of our Series “A” Convertible Preferred Stock (the “Preferred Stock”) to Hadronic Technologies Press, Inc. (“Hadronic”), a Florida corporation maintaining its principal place of business at 35246 US Highway 19 North, Suite #215, Palm Harbor, Florida 34684. Our Directors, Dr. Ruggero M. Santilli and Mrs. Carla Santilli each own fifty percent of the equity in Hadronic. The Series “A” Convertible Preferred Stock has 15 votes per share and is convertible into 10 shares of our common stock at the election of the shareholder. Shares were valued at the par value of the common stock equivalents, $500,000.

 

At December 31, 2014 there were Fifty million (50,000,000) shares of Series A Convertible Preferred Stock issued and outstanding.

 

 
F-14

 

Thunder Energies Corporation

Notes To Financial Statements

 

OPTIONS AND WARRANTS

 

In accordance with employment agreements, common stock options are issued annually to the officers of the Company. The number of shares is determined by the number of shares outstanding at the end of the year at a percentage per the employment agreements, as described below. The strike price is the fair value trading price as of the anniversary date of the employment agreements. The options are based on the number of shares outstanding of the Company at the year end, at an exercise price at market price at the employment agreements annual anniversary, July 25th. As of December 31, 2014, the officers are entitled to 24,505 options, at an exercise price of $0.20. There is no expiration date to these options and only vest upon a change in control. The options were valued at $24,505, however no expense has been recognized with the associated options, as no options have vested or are considered by management to probable vest. The options were valued using the Black Scholes Method, using the following assumptions:

 

Weighted Average:

   

Risk-free interest rate

 

2.48

%

Expected lives (years)

   

10.0

 

Expected price volatility

   

560.1

%

Dividend rate

   

0.0

%

Forfeiture Rate

   

0.0

%

 

There are no other warrants or options outstanding to acquire any additional shares of common stock of the Company as of December 31, 2014.

 

NOTE 7 – RELATED PARTY TRANSACTIONS

 

ADVANCES, PAYABLES AND ACCRUALS

 

Amounts included in accruals represent amounts due to the officers and directors for corporate obligations under the employment agreements. Payments on behalf of the Company and accruals made under contractual obligation are accrued (see below). As of December 31, 2014 and 2013 accrued expenses were $361,847 and $109,847, respectively.

 

NOTE PAYABLE

 

In support of the Company’s efforts and cash requirements, it has relied on advances from the majority shareholders until such time that the Company can support its operations or attains adequate financing through sales of its equity or traditional debt financing. There is no formal written commitment for continued support by shareholders. All advances made in support of the Company are formalized by demand notes, at a 2.15% interest rate.

 

During the years ended December 31, 2014 and 2013 our Chief Executive Officer, Dr. Ruggero M. Santilli and immediate family members have loaned the company $159,000 and $60,000 for operations.

 

At December 31, 2014 and 2013 the demand notes accumulative balances were $219,000 and $60,000, respectively. Accrued interest at December 31, 2014 and 2013 was $3,148 and $344, respectively.

 

EQUITY TRANSACTIONS

 

On July 25, 2013, Dr. Ruggero M. Santilli acquired from Company’s existing shareholders a control block of stock in the Company consisting of two million nine hundred forty thousand (2,940,000) shares of restricted common stock of the Company, in a private equity transaction. Dr. Santilli utilized his own funds to acquire the shares of common stock of the Company. As a result of this acquisition, Dr. Ruggero M. Santilli owns 98% of the issued and outstanding shares of common stock of the Company. On July 25, 2013, Dr. Ruggero M. Santilli and Ms. Carla Santilli were appointed to the Board of Directors of the Company. On July 25, 2013, Dr. Ruggero M. Santilli was appointed President, Chief Executive Officer, Principal Executive Officer and Principal Accounting Officer of the Company. Also on July 25, 2013, Carla Santilli was appointed Secretary and Treasurer for the Company.

 

 
F-15

 

Thunder Energies Corporation

Notes To Financial Statements

 

On August 11, 2013 the Company issued 1,000,000 shares of common stock in exchange for assignment of non-monetary intangible assets (See Intangible Assets, Note 4).

 

On October 10, 2013, the Company issued fifty million (50,000,000) shares of our Series “A” Convertible Preferred Stock (the “Preferred Stock”) to Hadronic Technologies Press, Inc. (“Hadronic”), a Florida corporation maintaining its principal place of business at 35246 US Highway 19 North, Suite #215, Palm Harbor, Florida 34684. Our Directors, Dr. Ruggero M. Santilli and Mrs. Carla Santilli each own fifty percent of the equity in Hadronic. The Series “A” Convertible Preferred Stock has 15 votes per share and is convertible into 10 shares of our common stock at the election of the shareholder. Preferred shares issued were valued at $500,000, based on the fair value of the common stock equivalents.

 

EMPLOYMENT CONTRACTS

 

The Company has employment contracts with its key employees, the controlling shareholders, who are its officers and directors of the Company.

 

 

·

Dr. Santilli, 5 year contract, annual salary of $180,000 and annual common stock options for .01% of the outstanding stock per calendar year at the average trading price of the anniversary date, July 25th.

     
 

·

Carla Santilli, 5 year consulting contract, annual salary of $72,000 and annual common stock options for .005% of the outstanding stock per calendar year at the average trading price of the anniversary date, July 25th.

 

OTHER

 

The Company does not own or lease property or lease office space. At the current time, the office space used by the Company was arranged by the majority shareholders of the Company to use at no charge. It is anticipated that the Company will enter into formal lease arrangements in the near future.

 

The amounts and terms of the above transactions may not necessarily be indicative of the amounts and terms that would have been incurred had comparable transactions been entered into with independent third parties.

 

NOTE 8 - COMMITMENTS AND CONTINGENCIES

 

From time to time the Company may be a party to litigation matters involving claims against the Company. Management believes that there are no current matters that would have a material effect on the Company’s financial position or results of operations.

 

NOTE 9 – SUBSEQUENT EVENTS

 

On January 26, 2015 the Company issued 50,000 shares to consultants for research services, recorded at the fair market value of the share price, in the amount of $50,000.

 

Management has evaluated subsequent events through the date the financial statements were available to be issued, considered to be the date of filing with the Securities and Exchange Commission. Based on our evaluation no events have occurred requiring adjustment to or disclosure in the financial statements.

 

 

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