10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

Form 10-Q

x	Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the Quarterly Period ended March 31, 2015

o Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission file number: 000-27866

POWERVERDE, INC.

(Exact name of Registrant as specified in its charter)

Delaware	88-0271109
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

420 S. Dixie Highway Suite 4-B
Coral Gables, FL33146

(Address of principal executive offices)

(305) 666-0024

(Registrant’s telephone number including area code)

(Former name, former address and former fiscal year, if changed since last report)

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 past 12 months (or for 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   o  No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).   x  Yes   o  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.

o	Large accelerated filer	o	Accelerated filer
o	Non-accelerated filer	x	Smaller reporting company

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

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: As of May 13, 2015 the issuer had 31,750,106 shares of common stock outstanding.

Index to Form 10-Q

		Page
PART I	FINANCIAL INFORMATION	1
Item 1.	Condensed Consolidated Financial Statements (Unaudited)	1
	Condensed Consolidated Balance Sheets at March 31, 2015 (Unaudited) and December 31, 2014	1
	Condensed Consolidated Statements of Operations for the three months ended March 31, 2015 and 2014 (Unaudited)	2
	Condensed Consolidated Statements of Cash Flows for the three months Ended March 31, 2015 and 2014 (Unaudited)	3
	Notes to Unaudited Condensed Consolidated Financial Statements	4
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	8
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	10
Item 4.	Controls and Procedures	11
PART II	OTHER INFORMATION	12
Item 1.	Legal Proceedings	12
Item 1A.	Risk Factors	12
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	12
Item 3.	Defaults upon Senior Securities	12
Item 4.	Mine Safety Disclosures	12
Item 5.	Other Information	12
Item 6.	Exhibits	12
SIGNATURES		13

PART I FINANCIAL INFORMATION

Item 1.  Condensed Consolidated Financial Statements

PowerVerde, Inc. and Subsidiary

Condensed Consolidated Balance Sheets

March 31, 2015 (Unaudited) and December 31, 2014

	2015			2014
Assets
Current Assets:
Cash and cash equivalents	$	3,427		$	4,736
Accounts receivable		154,887			189,220
Employee advances		6,292			12,292
Prepaid expenses		12,163			14,238
Total Current Assets		176,769			220,486
Property and Equipment
Property and equipment, net of accumulated depreciation of $59,141 and $55,258, respectively		48,500			52,383
Other Assets
Intellectual Property, net of accumulated amortization of $659,440 and $604,487, respectively		—			54,953
Total Assets	$	225,269		$	327,822
Liabilities and Stockholders’ Deficiency
Current Liabilities
Accounts payable and accrued expenses	$	47,609		$	100,006
Payable to related parties		41,900			41,900
Total Current Liabilities		89,509			141,906
Long-Term Liabilities
Notes payable to related parties		377,411			374,235
Total Long-Term Liabilities		377,411			374,235
Total Liabilities		466,920			516,141
Stockholders’ Deficiency
Preferred Stock:
50,000,000 preferred shares authorized, 0 preferred shares issued at March 31, 2015 and December 31, 2014		—			—
Common stock:
200,000,000 common shares authorized, par value $0.0001 per share, 31,750,106 common shares issued at March 31, 2015 and December 31, 2014		3,981			3,981
Additional paid-in capital		11,531,516			11,531,516
Treasury stock, 8,550,000 shares at cost		(491,139	)		(491,139	)
Accumulated deficit		(11,286,009	)		(11,232,677	)
Total Stockholders’ Deficiency		(241,651	)		(188,319	)
Total Liabilities and Stockholders’ Deficiency	$	225,269		$	327,822

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

1

PowerVerde, Inc. and Subsidiary

Condensed Consolidated Statements of Operations

For the three months ended March 31, 2015 and 2014

(Unaudited)

	2015			2014
Royalty revenue	$	154,887		$	40,154
Operating Expenses
Research and development		84,656			151,481
General and administrative		109,784			153,435
Total Operating Expenses		194,440			304,916
Loss from Operations		(39,553	)		(264,762	)
Other Income (Expenses)
Interest expense		(13,779	)		(21,188	)
Total Other Income (Expense)		(13,779	)		(21,188	)
Loss before Income Taxes		(53,332	)		(285,950	)
Provision for Income Taxes		—			—
Net Loss	$	(53,332	)	$	(285,950	)
Net Loss per Share - Basic and Diluted	$	(0.00	)	$	(0.01	)
Weighted Average Common Shares Outstanding - Basic and Diluted		31,750,106			13,000,046

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

2

PowerVerde, Inc. and Subsidiary

Condensed Consolidated Statements of Cash Flows

For the three months ended March 31, 2015 and 2014

(Unaudited)

	2015			2014
Cash Flows from Operating Activities
Net loss	$	(53,332	)	$	(285,950	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		58,836			58,954
Amortization of discount		3,176			10,586
Changes in operating assets and liabilities:
Accounts receivable, prepaid expenses and other assets		36,408			18,127
Employee advances		6,000			—
Accounts payable and accrued expenses		(52,397	)		77,934
Payable to related parties		—			(117,000	)
Cash Used in Operating Activities		(1,309	)		(237,349	)
Cash Flows From Investing Activities
Purchase of property and equipment		—			(13,591	)
Cash Used in Investing Activities		—			(13,591	)
Cash Flows from Financing Activities
Proceeds from issuance of common stock		—			240,000
Cash Provided by Financing Activities		—			240,000
Net Decrease in Cash and Cash Equivalents		(1,309	)		(10,940	)
Cash and Cash Equivalents at Beginning of Period		4,736			48,306
Cash and Cash Equivalents at End of Period	$	3,427		$	37,366
Supplemental Disclosure of Cash Flow Information
Cash paid during the period for interest	$	—		$	—
Cash paid during the period for income taxes	$	—		$	—

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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PowerVerde, Inc. and Subsidiary

Notes to Unaudited Condensed Consolidated Financial Statements

March 31, 2015

Note 1 – Condensed Consolidated Financial Statements

The accompanying unaudited condensed consolidated financial statements prepared in accordance with instructions for Form 10-Q, include all adjustments (consisting only of normal recurring accruals) which are necessary for a fair presentation of the results for the periods presented. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed consolidated financial statements be read in conjunction with the Annual Report of PowerVerde, Inc. (“PowerVerde,” “we,” “us,” “our,” or the “Company”) as of and for the year ended December 31, 2014. The results of operations for the three months ended March 31, 2015, are not necessarily indicative of the results to be expected for the full year or for future periods. The condensed consolidated financial statements include the accounts of PowerVerde, Inc., formerly known as Vyrex Corporation (the “Company”), and PowerVerde Systems, Inc., formerly known as PowerVerde, Inc., its wholly-owned subsidiary. Intercompany balances and transactions have been eliminated in consolidation.

Note 2 – Going Concern

The accompanying condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern. The Company has had recurring operating losses and negative cash flows from operations. Those factors, as well as uncertainty in securing additional funds for continued operations, create an uncertainty about the Company’s ability to continue as a going concern. The condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Note 3 – Summary of Significant Accounting Policies

Nature of Business

The Company is devoting substantially all of its present efforts to establish a new business involving the development and commercialization of clean energy electric power generation systems, and none of its planned principal operations have commenced. However, royalties from licenses unrelated to planned principal operations continue to be recognized as revenue.

Cash Equivalents

The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.

Accounts Receivable

Accounts receivable consist of balances due from sales and royalties. The Company monitors accounts receivable and provides allowances when considered necessary. At March 31, 2015, accounts receivable were considered to be fully collectible. Accordingly, no allowance for doubtful accounts was provided.

Employee Advances

The employee advances represent the payroll taxes due on the issuance of common stock as compensation prior to 2014.

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Revenue Recognition

Licensing and royalty revenue from royalty agreements is recognized in accordance with the terms of the specific agreement. Revenues recognized under these agreements amount to 100% of total revenues of the three months ended March 31, 2015 and 2014.

Property and Equipment

Property and equipment are stated at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets. Expenditures for major betterments and additions are capitalized, while replacement, maintenance and repairs, which do not extend the lives of the respective assets, are expensed as incurred.

Impairment of Long-Lived Assets

Impairment losses are recorded on long-lived assets (property, equipment and intellectual property) used in operations when impairment indicators are present and the undiscounted expected cash flows estimated to be generated by those assets are less than the carrying value of such assets. No impairment losses have been recognized during the three months ended March 31, 2015 or 2014.

Stock-based Compensation

The Company has accounted for stock-based compensation under the provisions of ASC Topic 718 – “Stock Compensation”which requires the use of the fair-value based method to determine compensation for all arrangements under which employees and others receive shares of stock or equity instruments (stock options and common stock purchase warrants). The fair value of each stock option award is estimated on the date of grant using the Black-Scholes valuation model that uses assumptions for expected volatility, expected dividends, expected term, and the risk-free interest rate. Expected volatilities are based on historical volatility of peer companies and other factors estimated over the expected term of the stock options. The expected term of options granted is derived using the “simplified method” which computes expected term as the average of the sum of the vesting term plus the contract term. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for the period of the expected term.

Common Stock Purchase Warrants

The Company accounts for common stock purchase warrants in accordance with ASC Topic 815- 40, “Derivatives and Hedging – Contracts in Entity’s Own Equity” (“ASC 815-40”). Based on the provisions of ASC 815- 40, the Company classifies as equity any contracts that (i) require physical settlement or net-share settlement, or (ii) gives the Company a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement). The Company classifies as assets or liabilities any contracts that (i) require net-cash settlement including a requirement to net cash settle the contract if an event occurs and if that event is outside the control of the Company, or (ii) give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement).

Accounting for Uncertainty in Income Taxes

The Company follows the provisions of ASC Topic 740-10, “Accounting for Uncertainty in Income Taxes” which clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements, and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. This topic also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.

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Research and Development Costs

The Company’s research and development costs are expensed in the period in which they are incurred.

Earnings (Loss) Per Share

Earnings (loss) per share is computed in accordance with FASB ASC Topic 260, “Earnings per Share”. Diluted earnings per share is computed by dividing net income (loss) by the weighted-average number of shares of common stock, common stock equivalents and other potentially dilutive securities outstanding during the period. Certain common stock equivalents were not included in the earnings (loss) per share calculation as their effect would be anti-dilutive. Warrants exercisable for 5,086,000 shares and options for 2,750,000 shares were excluded from weighted average common shares outstanding on a diluted basis.

Financial instruments

The Company carries cash and cash equivalents, accounts receivable, accounts payable and accrued expenses at historical costs. The respective estimated fair values of these assets and liabilities approximate carrying values due to their current nature. The Company also carries notes payable to related parties at historical cost less discounts from warrants issued as loan financing costs.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.

Note 4 – Recent Accounting Pronouncements

Refer to the consolidated financial statements and footnotes thereto included in the PowerVerde, Inc. Annual Report on Form 10-K for the year ended December 31, 2014 for recent accounting pronouncements. Other pronouncements have been issued but the Company does not believe that their adoption will have a significant impact on the financial position or results of operations. We have adopted ASU 2014-10 on our condensed consolidated financial statements effective January 1, 2015.

On June 10, 2014, the FASB issued Accounting Standards Update No. 2014-10 (ASU 2014-10), which eliminates development stage reporting requirements under ASC 915, as well as amends provisions of existing variable interest entity guidance under ASC 810. Additionally, the ASU indicates that the lack of commencement of principal operations represents a risk and uncertainty and, accordingly, is subject to the disclosure requirements of ASC 275. As a result of the changes, existing development stage entity presentation and disclosure requirements are eliminated.

We have adopted ASU 2014-10 on our condensed consolidated financial statements effective January 1, 2015.

Note 5 – Intellectual Property

Intellectual property consists of technology acquired from the purchase of 100% of the membership interests of Cornerstone Conservation Group LLC (“Cornerstone”).

For each of the three months ended March 31, 2015 and 2014, amortization expense was $54,953 and accumulated amortization of the intangible asset- intellectual property was $659,440 at March 31, 2015.

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Note 6 – Stockholders’ Deficiency

Warrants

Expenses related to warrants issued in conjunction with settlement of certain disputes are included in the condensed consolidated statements of operations.

A summary of warrants issued, exercised and expired during the three months ended March 31, 2015 is as follows:

	Shares			Weighted Average Exercise Price			Aggregate Intrinsic Value
Balance at December 31, 2014		5,586,000		$	.99		$	45,000
Issued		—			—			—
Expired		(500,000	)		(1.00	)		—
Balance at March 31, 2015		5,086,000		$	.99		$	45,000

Note 7 – Stock Options

Stock option activity for the quarter ended March 31, 2015, is summarized as follows:

	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value
Options outstanding at December 31, 2014		2,750,000	$	0.78		9.00	$	—
Granted		—		—		—		—
Expired/forfeited		—		—		—		—
Options outstanding at March 31, 2015		2,750,000	$	0.78		9.00	$	—

Total stock option compensation for the three months ended March 31, 2015 and 2014 was $0. There is no unrecognized compensation expense associated with the options.

Note 8 – Payables to Related Parties

Notes payable to related parties at March 31, 2015 consist of notes payable to stockholders of $400,000 (issued in 2012), less unamortized discount of $22,589 related to common stock warrants that had been issued to the stockholders with the notes. The discount is being amortized over the extended term of the notes, which are due in one principal payment on December 31, 2016. Interest is payable semiannually at 10%. The note is collaterized by all receivables now or hereafter existing pursuant to the license agreement with VDF FutureCeuticals, Inc. discussed in Note 3.

Payable to related party at March 31, 2015 consists primarily of a $30,000 unsecured note payable to Edward Gomez bearing interest at 10%. The note was due in full in May 2015. However, during May 2015, $10,000 of the note balances and all accrued interest was paid and the lender extended the maturity date on the balance of the note to July 2015.

7

 Note 9 - Commitments and Contingencies

On November 2, 2012, Keith Johnson, the Company’s former Chief Technical Officer, filed suit against the Company’s operating subsidiary PowerVerde Systems, Inc., in Maricopa County, Arizona, Superior Court. The suit included claims for breach of his employment agreement, for back pay and related claims. Mr. Johnson, whose salary was $12,500 per month, sought back pay of $37,500, reimbursement of expenses totaling approximately $5,012 and other unspecified damages. The Company believes that Mr. Johnson voluntarily terminated his employment in accordance with the agreement and that he has been paid in full. In an abundance of caution, the Company also gave Mr. Johnson 30 days’ notice of termination without cause pursuant to the employment agreement, with this notice to be effective only if the Court determines that his employment was not previously terminated by him. Mr. Johnson ceased working for the Company in early September 2012. Based on the foregoing, the Company believed that it had substantial defenses to Mr. Johnson’s claims, which were denied in the Company’s answer.

In May 2014, the case was settled pursuant to the Company’s agreement to pay Mr. Johnson $30,088, with $5,088 due upon execution of the settlement agreement plus an additional $25,000 payable in installments of $12,500 each in July and August 2014. The installments due in July and August are included in the Payable to Related Parties on the condensed consolidated financial statements. As of the date of this filing, all of the settlement payments have been made, and this case is concluded.

Note 10 - Related Party Transactions

See Note 8 for discussion of transactions with stockholders.

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

Forward Looking Statements

Readers are cautioned that the statements in this Report that are not descriptions of historical facts may be forward-looking statements that are subject to risks and uncertainties. This Report contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements are based on the beliefs of our management, as well as on assumptions made by and information currently available to us as of the date of this Report. When used in this Report, the words “plan,” “will,” “may,” “anticipate,” “believe,” “estimate,” “expect,” “intend,” “project” and similar expressions are intended to identify such forward-looking statements. Although we believe these statements are reasonable, actual actions, operations and results could differ materially from those indicated by such forward-looking statements as a result of the risk factors included in our 2014 Annual Report, or other factors. We must caution, however, that this list of factors may not be exhaustive and that these or other factors, many of which are outside of our control, could have a material adverse effect on us and our ability to achieve our objectives. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements set forth above.

The following discussion and analysis should be read in conjunction with the financial statements and notes thereto appearing elsewhere herein.

Critical Accounting Policies

The condensed consolidated financial statements of PowerVerde, Inc. are prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of these condensed consolidated financial statements requires our management to make estimates and assumptions about future events that effect the amounts reported in the financial statements and related notes. Future events and their effects cannot be determined with absolute certainty. Therefore, the determination of estimates requires the exercise of judgment. We believe the following critical accounting policies affect its more significant judgments and estimates used in the preparation of financial statements.

8

Accounting for Uncertainty in Income Taxes

The Company follows the provisions of ASC Topic 740-10, “Accounting for Uncertainty in Income Taxes” which clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements, and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. This topic also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.

Based on our evaluation, we have concluded that there are no significant uncertain tax positions requiring recognition in our condensed consolidated financial statements. Our evaluation was performed for the tax years ended December 31, 2011, 2012, and 2013, the tax years which remain subject to examination by major tax jurisdictions as of March 31, 2015.

We may from time to time be assessed interest or penalties by major tax jurisdictions, although any such assessments historically have been minimal and immaterial to our financial results. In the event we have received an assessment for interest and/or penalties, it has been classified in the condensed consolidated financial statements as general and administrative expense.

Revenue Recognition

Licensing and royalty revenue from royalty agreements is recognized as earned in accordance with the terms of the specific agreement.

Common Stock Purchase Warrants

The Company accounts for common stock purchase warrants in accordance with ASC Topic 815- 40, Derivatives and Hedging – Contracts in Entity’s Own Equity (“ASC 815-40”). Based on the provisions of ASC 815- 40, the Company classifies as equity any contracts that (i) require physical settlement or net-share settlement, or (ii) gives the Company a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement). The Company classifies as assets or liabilities any contracts that (i) require net-cash settlement including a requirement to net cash settle the contract if an event occurs and if that event is outside the control of the Company, or (ii) give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement).

Intellectual Property

The Company reviews intangible assets with finite lives for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company uses an estimate of the undiscounted cash flows over the remaining life of its long-lived assets, or related group of assets where applicable, in measuring whether the assets to be held and used will be realizable. In the event of impairment, the Company would discount the future cash flows using its then estimated incremental borrowing rate to estimate the amount of the impairment.

Stock-based compensation.

We account for stock-based compensation based on ASC Topic 718-Stock Compensation which requires expensing of stock options and other share-based payments based on the fair value of each stock option awarded. The fair value of each stock option is estimated on the date of grant using the Black-Scholes valuation model. This model requires management to estimate the expected volatility, expected dividends, and expected term as inputs to the valuation model.

Overview

From January 1991 until October 2005, the Company devoted substantially all of its efforts and resources to research and development related to its unsuccessful Biotech Business, in particular the study of biological oxidation and antioxidation directed to the development of potential therapeutic products for the treatment of various diseases and conditions. In the most recent years, the Company’s research focused mainly on targeted antioxidant therapeutics and nutraceuticals. The Company, has generated only limited revenue from product sales and has relied primarily on equity financing, licensing revenues, and various debt instruments for its working capital. The Company has been unprofitable since its inception.

9

Following the cessation of material Biotech Business operations in October 2005, the Company turned its primary focus to seeking an appropriate merger partner for its public shell. This resulted in the February 2008 merger with Vyrex (the “Merger”). In March 2009, we assigned our Biotech IP to an investor in exchange for his agreement to pay all future expenses relating to the Biotech IP and to pay us 20% of any net proceeds received from sale and/or licensing of the Biotech IP. We do not expect this post-Merger arrangement to generate material revenues; however, since 2011 we have generated material Biotech IP licensing fees based on pre-Merger contracts.

Since the Merger, we have focused on the development, testing and commercialization of our electric power systems, in particular, their applicability to thermal and natural gas pipeline operations. Our business is subject to significant risks, including the risks inherent in our research and development efforts, uncertainties associated with obtaining and enforcing patents and intense competition. See “Risk Factors.”

Except as specifically noted to the contrary, the following discussion relates only to PowerVerde since, as a result of the Merger, the only historical financial statements presented for the Company in periods following the Merger are those of the operating entity, PowerVerde.

Results of Operations

Three Months Ended March 31, 2015 as Compared to Three Months Ended March 31, 2014

Since inception, we have focused on the development, testing and commercialization of our clean energy electric power generation systems. We had no revenues from sales in the first quarter of 2015 and 2014 — but we recorded $154,887 and $40,154 in Biotech IP licensing fees, respectively. Our research and development expenses decreased by $66,825 (44.1%) in the first quarter of 2015 as compared to 2014. This decrease is because we are in the process of testing and are not currently building any new generator systems. Our general and administrative expenses decreased by $43,651 (28.5%) in the first quarter of 2015 as compared to 2014, due mainly to decreased expenses in 2015 for legal fees and employee compensation. Our net loss was $53,332 in the first quarter of 2015, an 81.4% decrease from the net loss of $285,950 in the first quarter of 2014. Substantial net losses will continue until we are able to successfully commercialize and market our products, as to which there can be no assurance. 

Liquidity and Capital Resources

We have financed our operations since inception through the sale of debt and equity securities. As of March 31, 2015, we had a working capital surplus of $87,260 compared to a working capital surplus of $78,580 at December 31, 2014.

We expect 2015 Biotech IP revenues to approximate the 2014 levels; however, there can be no assurance that this revenue level will be achieved.

We continue to seek funding from private debt and equity investors, as we need to promptly raise substantial additional capital in order to finance our plan of operations. There can be no assurance that we will be able to raise the necessary funds on commercially acceptable terms if at all. If we do not raise the necessary funds, we may be forced to cease operations.

Item 3.  Quantitative and Qualitative Disclosures about Market Risk.

Not applicable.

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Item 4.  Controls and Procedures.

Disclosure Controls and Procedures

The Company, under the supervision and with the participation of its management, including the Chief Executive Officer and President, evaluated the effectiveness of the design and operation of the Company’s “disclosure controls and procedures” (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective.

Management’s Annual Report on Internal Control Over Financial Reporting

Management of the Company is responsible for establishing and maintaining adequate control over financial reporting. Our internal control system was designed to provide reasonable assurance to our management and Board of Directors regarding the preparation and fair presentation of financial statements.

All internal controls over financial reporting, no matter how well designed, have inherent limitations, including the possibility of human error and the circumvention of overriding of controls. Therefore, even effective internal control over financial reporting can provide only reasonable, and not absolute, assurance with respect to financial statement preparation and presentation. Further, because of changes in conditions, the effectiveness of internal controls over financial reporting may vary over time. Because of its inherent limitations, internal controls over financial reporting may also fail to prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives.

Our Chief Executive Officer and Chief Financial Officer assessed the effectiveness of our internal control over financial reporting as of December 31, 2014. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control—An Integrated Framework. Based on this evaluation, our management concluded that, as of March 31, 2015, our internal control over financial reporting was effective.

No Attestation Report

This quarterly 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 registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this quarterly report.

Changes in Internal Control Over Financial Reporting

There were no significant changes in internal control over financial reporting during the first quarter of 2015 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II OTHER INFORMATION

Item 1.  Legal Proceedings.

None.

Item 1A.  Risk Factors.

           There are no material changes to the risk factors set forth in Part I, Item 1A, “Risk Factors,” of the 2014 Annual Report. Please refer to that section for disclosure regarding the risks and uncertainties related to our business.

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

None.

Item 3.  Defaults Upon Senior Securities.

None.

Item 4.  Mine Safety Disclosures.

Not applicable.

Item 5.  Other Information.

Not applicable.

Item 6.  Exhibits.

(a) Exhibits

31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL INSTANCE DOCUMENT
101.SCH	XBRL TAXONOMY EXTENSION SCHEMA
101.CAL	XBRL TAXONOMY EXTENSION CALCULATION LINKBASE
101.DEF	XBRL TAXONOMY EXTENSION DEFINITION LINKBASE
101.LAB	XBRL TAXONOMY EXTENSION LABEL LINKBASE
101.PRE	XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE

__________________

12

SIGNATURES

In accordance with Section 13(a) or 15(d) of the Exchange Act, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

	POWERVERDE, INC.
Dated: May 15, 2015	By:	/s/ Richard H. Davis
		Richard H. Davis
		Chief Executive Officer
Dated: May 15, 2015	By:	/s/ John L. Hofmann
		John L. Hofmann
		Chief Financial Officer

13

Exhibit Index

Exhibit No.	Description
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	XBRL INSTANCE DOCUMENT
101.SCH	XBRL TAXONOMY EXTENSION SCHEMA
101.CAL	XBRL TAXONOMY EXTENSION CALCULATION LINKBASE
101.DEF	XBRL TAXONOMY EXTENSION DEFINITION LINKBASE
101.LAB	XBRL TAXONOMY EXTENSION LABEL LINKBASE
101.PRE	XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Richard H. Davis, certify that:

1. I have reviewed this Form 10-Q of PowerVerde, Inc.

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated:  May 15, 2015	/s/ Richard H. Davis
	Richard H. Davis, Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, John L. Hofmann, certify that:

1. I have reviewed this Form 10-Q of PowerVerde, Inc.

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated:  May 15, 2015	/s/ John L. Hofmann
	John L. Hofmann, Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Richard H. Davis, certify as follows:

1. To the best of my knowledge, the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2015, fully complies in all material respects with the requirements of Section 13(a) of the Securities Exchange Act of 1934, as amended; and

2. To the best of my knowledge, based upon a review of the report, the information contained in the report fairly presents, in all material respects, the financial condition and results of operations of the Company.

By:	/s/ Richard H. Davis
	Richard H. Davis
	Chief Executive Officer May 15, 2015

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, John L. Hofmann, certify as follows:

1. To the best of my knowledge, the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2015, fully complies in all material respects with the requirements of Section 13(a) of the Securities Exchange Act of 1934, as amended; and

2. To the best of my knowledge, based upon a review of the report, the information contained in the report fairly presents, in all material respects, the financial condition and results of operations of the Company.

By:	/s/ John L. Hofmann
	John L. Hofmann
	Chief Financial Officer May 15, 2015

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Commitments and Contingencies (Details) (Chief Technical Officer [Member], USD $)	1 Months Ended
	May 31, 2014	Nov. 30, 2012
Chief Technical Officer [Member]
Officers salary		$ 12,500
Sought back pay to officers		37,500
Expenses reimbursement		5,012
Settlement, Amount	30,088
Due amount on settlement	5,088
Additional amount payble on settlement	25,000
Monthly Installment	$ 12,500

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Recent Accounting Pronouncements

3 Months Ended

Mar. 31, 2015

Recent Accounting Prouncements

Recent Accounting Pronouncements

Note 4 – Recent Accounting Pronouncements

Refer to the consolidated financial statements and footnotes thereto included in the PowerVerde, Inc. Annual Report on Form 10-K for the year ended December 31, 2014 for recent accounting pronouncements. Other pronouncements have been issued but the Company does not believe that their adoption will have a significant impact on the financial position or results of operations. We have adopted ASU 2014-10 on our condensed consolidated financial statements effective January 1, 2015.

On June 10, 2014, the FASB issued Accounting Standards Update No. 2014-10 (ASU 2014-10), which eliminates development stage reporting requirements under ASC 915, as well as amends provisions of existing variable interest entity guidance under ASC 810. Additionally, the ASU indicates that the lack of commencement of principal operations represents a risk and uncertainty and, accordingly, is subject to the disclosure requirements of ASC 275. As a result of the changes, existing development stage entity presentation and disclosure requirements are eliminated.

We have adopted ASU 2014-10 on our condensed consolidated financial statements effective January 1, 2015.

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Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2015

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Note 3 – Summary of Significant Accounting Policies

Nature of Business

The Company is devoting substantially all of its present efforts to establish a new business involving the development and commercialization of clean energy electric power generation systems, and none of its planned principal operations have commenced. However, royalties from licenses unrelated to planned principal operations continue to be recognized as revenue.

Cash Equivalents

The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.

Accounts Receivable

Accounts receivable consist of balances due from sales and royalties. The Company monitors accounts receivable and provides allowances when considered necessary. At March 31, 2015, accounts receivable were considered to be fully collectible. Accordingly, no allowance for doubtful accounts was provided.

Employee Advances

The employee advances represent the payroll taxes due on the issuance of common stock as compensation prior to 2014. 

Revenue Recognition

Licensing and royalty revenue from royalty agreements is recognized in accordance with the terms of the specific agreement. Revenues recognized under these agreements amount to 100% of total revenues of the three months ended March 31, 2015 and 2014.

Property and Equipment

Property and equipment are stated at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets. Expenditures for major betterments and additions are capitalized, while replacement, maintenance and repairs, which do not extend the lives of the respective assets, are expensed as incurred.

Impairment of Long-Lived Assets

Impairment losses are recorded on long-lived assets (property, equipment and intellectual property) used in operations when impairment indicators are present and the undiscounted expected cash flows estimated to be generated by those assets are less than the carrying value of such assets. No impairment losses have been recognized during the three months ended March 31, 2015 or 2014.

Stock-based Compensation

The Company has accounted for stock-based compensation under the provisions of ASC Topic 718 – “Stock Compensation” which requires the use of the fair-value based method to determine compensation for all arrangements under which employees and others receive shares of stock or equity instruments (stock options and common stock purchase warrants). The fair value of each stock option award is estimated on the date of grant using the Black-Scholes valuation model that uses assumptions for expected volatility, expected dividends, expected term, and the risk-free interest rate. Expected volatilities are based on historical volatility of peer companies and other factors estimated over the expected term of the stock options. The expected term of options granted is derived using the “simplified method” which computes expected term as the average of the sum of the vesting term plus the contract term. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for the period of the expected term.

Common Stock Purchase Warrants

The Company accounts for common stock purchase warrants in accordance with ASC Topic 815- 40, “Derivatives and Hedging – Contracts in Entity’s Own Equity” (“ASC 815-40”). Based on the provisions of ASC 815- 40, the Company classifies as equity any contracts that (i) require physical settlement or net-share settlement, or (ii) gives the Company a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement). The Company classifies as assets or liabilities any contracts that (i) require net-cash settlement including a requirement to net cash settle the contract if an event occurs and if that event is outside the control of the Company, or (ii) give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement).

Accounting for Uncertainty in Income Taxes

The Company follows the provisions of ASC Topic 740-10, “Accounting for Uncertainty in Income Taxes” which clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements, and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. This topic also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. 

Research and Development Costs

The Company’s research and development costs are expensed in the period in which they are incurred.

Earnings (Loss) Per Share

Earnings (loss) per share is computed in accordance with FASB ASC Topic 260, “Earnings per Share”. Diluted earnings per share is computed by dividing net income (loss) by the weighted-average number of shares of common stock, common stock equivalents and other potentially dilutive securities outstanding during the period. Certain common stock equivalents were not included in the earnings (loss) per share calculation as their effect would be anti-dilutive. Warrants exercisable for 5,086,000 shares and options for 2,750,000 shares were excluded from weighted average common shares outstanding on a diluted basis.

Financial instruments

The Company carries cash and cash equivalents, accounts receivable, accounts payable and accrued expenses at historical costs. The respective estimated fair values of these assets and liabilities approximate carrying values due to their current nature. The Company also carries notes payable to related parties at historical cost less discounts from warrants issued as loan financing costs.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.

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Condensed Consolidated Balance Sheets (Unaudited) (USD $)	Mar. 31, 2015	Dec. 31, 2014
Current Assets:
Cash and cash equivalents	$ 3,427	$ 4,736
Accounts receivable	154,887	189,220
Employee advances	6,292	12,292
Prepaid expenses	12,163	14,238
Total Current Assets	176,769	220,486
Property and Equipment
Property and equipment, net of accumulated depreciation of $59,141 and $55,258, respectively	48,500	52,383
Other Assets
Intellectual Property, net of accumulated amortization of $659,440 and $604,487, respectively		54,953
Total Assets	225,269	327,822
Current Liabilities
Accounts payable and accrued expenses	47,609	100,006
Payable to related parties	41,900	41,900
Total Current Liabilities	89,509	141,906
Long-Term Liabilities
Notes payable to related parties	377,411	374,235
Total Long-Term Liabilities	377,411	374,235
Total Liabilities	466,920	516,141
Stockholders' Deficiency
Preferred Stock: 50,000,000 preferred shares authorized, 0 preferred shares issued at March 31, 2015 and December 31, 2014
Common stock: 200,000,000 common shares authorized, par value $0.0001 per share, 31,750,106 common shares issued at March 31, 2015 and December 31, 2014	3,981	3,981
Additional paid-in capital	11,531,516	11,531,516
Treasury stock, 8,550,000 shares at cost	(491,139)	(491,139)
Accumulated deficit	(11,286,009)	(11,232,677)
Total Stockholders' Deficiency	(241,651)	(188,319)
Total Liabilities and Stockholders' Deficiency	$ 225,269	$ 327,822

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Condensed Consolidated Financial Statements

3 Months Ended

Mar. 31, 2015

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Condensed Consolidated Financial Statements

Note 1 – Condensed Consolidated Financial Statements

The accompanying unaudited condensed consolidated financial statements prepared in accordance with instructions for Form 10-Q, include all adjustments (consisting only of normal recurring accruals) which are necessary for a fair presentation of the results for the periods presented. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed consolidated financial statements be read in conjunction with the Annual Report of PowerVerde, Inc. (“PowerVerde,” “we,” “us,” “our,” or the “Company”) as of and for the year ended December 31, 2014. The results of operations for the three months ended March 31, 2015, are not necessarily indicative of the results to be expected for the full year or for future periods. The condensed consolidated financial statements include the accounts of PowerVerde, Inc., formerly known as Vyrex Corporation (the “Company”), and PowerVerde Systems, Inc., formerly known as PowerVerde, Inc., its wholly-owned subsidiary. Intercompany balances and transactions have been eliminated in consolidation.

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Stock Options (Detail) - Stock Option Activity, Current Period (USD $)	3 Months Ended	12 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Shares
Balance at December 31, 2014	5,586,000
Granted
Expired/forfeited	(500,000)
Balance at March 31, 2015	5,086,000
Options
Shares
Balance at December 31, 2014	2,750,000
Granted	0
Expired/forfeited	0
Balance at March 31, 2015	2,750,000	2,750,000
Weighted Average Exercise Price
Balance at December 31, 2014	$ 0.78
Granted	$ 0
Expired/forfeited	$ 0
Balance at March 31, 2015	$ 0.78	$ 0.78
Weighted Average Remaining Contractual Life (Years)
Options outstanding	9 years	9 years
Aggregate Intrinsic Value
Options outstanding	$ 0	$ 0

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Notes Payable to Related Parties (Details) (USD $)	1 Months Ended	3 Months Ended
	May 31, 2015	Mar. 31, 2015	Dec. 31, 2014
Notes payable to stockholders		$ 400,000
Unamortized discount		22,589
Maturity date		Dec. 31, 2016
Interest rate		10.00%
Edward Gomez [Member]
Interest rate			10.00%
Unsecured note payable			30,000
Note balances and all accrued interest paid	$ 10,000
Extending maturity date		July 2015

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Going Concern

3 Months Ended

Mar. 31, 2015

Going Concern:

Going Concern

Note 2 – Going Concern

The accompanying condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern. The Company has had recurring operating losses and negative cash flows from operations. Those factors, as well as uncertainty in securing additional funds for continued operations, create an uncertainty about the Company’s ability to continue as a going concern. The condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

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Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $)	Mar. 31, 2015	Dec. 31, 2014
Assets
Property and equipment, net of accumulated depreciation	$ 59,141	$ 55,258
Intellectual Property, net of accumulated amortization	$ 659,440	$ 604,487
Preferred stock, shares authorized	50,000,000	50,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common Stock, no par value	$ 0.0001	$ 0.0001
Common Stock, shares authorized	200,000,000	200,000,000
Common Stock, shares issued	31,750,106	31,750,106
Common Stock, shares outstanding	31,750,106	31,750,106
Treasury stock	8,550,000	8,550,000

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Stockholders' Deficiency (Tables)

3 Months Ended

Mar. 31, 2015

Stockholders Deficiency Tables

Summary of warrants

A summary of warrants issued, exercised and expired during the three months ended March 31, 2015 is as follows:

	Shares			Weighted Average Exercise Price			Aggregate Intrinsic Value
Balance at December 31, 2014		5,586,000		$	.99		$	45,000
Issued		—			—			—
Expired		(500,000	)		(1.00	)		—
Balance at March 31, 2015		5,086,000		$	.99		$	45,000

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Document and Entity Information	3 Months Ended
	Mar. 31, 2015	May 13, 2015
Document and Entity Information:
Entity Registrant Name	POWERVERDE, INC.
Document Type	10-Q
Document Period End Date	Mar. 31, 2015
Amendment Flag	false
Entity Central Index Key	0000933972
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		31,750,106
Entity Filer Category	Smaller Reporting Company
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q1

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Stock Options (Tables)

3 Months Ended

Mar. 31, 2015

Stock option activity:

Stock Option

Stock option activity for the quarter ended March 31, 2015, is summarized as follows:

	Shares		Weighted  Average  Exercise Price		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value
Options outstanding at December 31, 2014		2,750,000	$	0.78		9.00	$	—
Granted		—		—		—		—
Expired/forfeited		—		—		—		—
Options outstanding at March 31, 2015		2,750,000	$	0.78		9.00	$	—

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Condensed Consolidated Statements of Operations (Unaudited) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Revenues [Abstract]
Royalty revenue	$ 154,887	$ 40,154
Operating Expenses
Research and development	84,656	151,481
General and administrative	109,784	153,435
Total Operating Expenses	194,440	304,916
Loss from Operations	(39,553)	(264,762)
Other Income (Expenses)
Interest expense	(13,779)	(21,188)
Total Other Income (Expense)	(13,779)	(21,188)
Loss before Income Taxes	(53,332)	(285,950)
Provision for Income Taxes
Net Loss	$ (53,332)	$ (285,950)
Net Loss per Share - Basic and Diluted	$ 0.00	$ (0.01)
Weighted Average Common Shares Outstanding - Basic and Diluted	31,750,106	13,000,046

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Stock Options

3 Months Ended

Mar. 31, 2015

Stock Options

Stock Options

Note 7 – Stock Options

Stock option activity for the quarter ended March 31, 2015, is summarized as follows:

	Shares		Weighted  Average  Exercise Price		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value
Options outstanding at December 31, 2014		2,750,000	$	0.78		9.00	$	—
Granted		—		—		—		—
Expired/forfeited		—		—		—		—
Options outstanding at March 31, 2015		2,750,000	$	0.78		9.00	$	—

Total stock option compensation for the three months ended March 31, 2015 and 2014 was $0. There is no unrecognized compensation expense associated with the options.

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Stockholders' Deficiency

3 Months Ended

Mar. 31, 2015

Equity:

Stockholders' Deficiency

Warrants

Expenses related to warrants issued in conjunction with settlement of certain disputes are included in the condensed consolidated statements of operations.

A summary of warrants issued, exercised and expired during the three months ended March 31, 2015 is as follows:

	Shares			Weighted Average Exercise Price			Aggregate Intrinsic Value
Balance at December 31, 2014		5,586,000		$	.99		$	45,000
Issued		—			—			—
Expired		(500,000	)		(1.00	)		—
Balance at March 31, 2015		5,086,000		$	.99		$	45,000

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Stock Options (Details) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Share-based Compensation	$ 0	$ 0
Unrecognized stock-based compensation	$ 0

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Summary of Significant Accounting Policies (Details)	3 Months Ended
	Mar. 31, 2015
Antidilutive Securities Excluded and Imapirment charges
Number of warrants excluded from weighted average common shares outstanding on a diluted basis.	5,086,000
Number of options excluded from weighted average common shares outstanding on a diluted basis.	2,750,000

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Related Party Transactions

3 Months Ended

Mar. 31, 2015

Related Party Transactions

Related Party Transactions

Note 10 - Related Party Transactions

See Note 8 for discussion of transactions with stockholders.

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Payables to Related Parties

3 Months Ended

Mar. 31, 2015

Notes Payable to Related Parties

Payables to Related Parties

Note 8 – Payables to Related Parties

Notes payable to related parties at March 31, 2015 consist of notes payable to stockholders of $400,000 (issued in 2012), less unamortized discount of $22,589 related to common stock warrants that had been issued to the stockholders with the notes. The discount is being amortized over the extended term of the notes, which are due in one principal payment on December 31, 2016. Interest is payable semiannually at 10%. The note is collaterized by all receivables now or hereafter existing pursuant to the license agreement with VDF FutureCeuticals, Inc. discussed in Note 3.

Payable to related party at March 31, 2015 consists primarily of a $30,000 unsecured note payable to Edward Gomez bearing interest at 10%. The note was due in full in May 2015. However, during May 2015, $10,000 of the note balances and all accrued interest was paid and the lender extended the maturity date on the balance of the note to July 2015.

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2015

Commitment and Contingencies:

Commitments and Contingencies

Note 9 - Commitments and Contingencies

On November 2, 2012, Keith Johnson, the Company’s former Chief Technical Officer, filed suit against the Company’s operating subsidiary PowerVerde Systems, Inc., in Maricopa County, Arizona, Superior Court. The suit included claims for breach of his employment agreement, for back pay and related claims. Mr. Johnson, whose salary was $12,500 per month, sought back pay of $37,500, reimbursement of expenses totaling approximately $5,012 and other unspecified damages. The Company believes that Mr. Johnson voluntarily terminated his employment in accordance with the agreement and that he has been paid in full. In an abundance of caution, the Company also gave Mr. Johnson 30 days’ notice of termination without cause pursuant to the employment agreement, with this notice to be effective only if the Court determines that his employment was not previously terminated by him. Mr. Johnson ceased working for the Company in early September 2012. Based on the foregoing, the Company believed that it had substantial defenses to Mr. Johnson’s claims, which were denied in the Company’s answer.

In May 2014, the case was settled pursuant to the Company’s agreement to pay Mr. Johnson $30,088, with $5,088 due upon execution of the settlement agreement plus an additional $25,000 payable in installments of $12,500 each in July and August 2014. The installments due in July and August are included in the Payable to Related Parties on the condensed consolidated financial statements. As of the date of this filing, all of the settlement payments have been made, and this case is concluded.

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2015

Summary of Significant Accounting Policies

Nature of Business

Nature of Business

The Company is devoting substantially all of its present efforts to establish a new business involving the development and commercialization of clean energy electric power generation systems, and none of its planned principal operations have commenced. However, royalties from licenses unrelated to planned principal operations continue to be recognized as revenue.

Cash Equivalents

Cash Equivalents

The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.

Accounts Receivables

Accounts Receivable

Accounts receivable consist of balances due from sales and royalties. The Company monitors accounts receivable and provides allowances when considered necessary. At March 31, 2015, accounts receivable were considered to be fully collectible. Accordingly, no allowance for doubtful accounts was provided.

Employee Advances

Employee Advances

The employee advances represent the payroll taxes due on the issuance of common stock as compensation prior to 2014.

Revenue Recognition

Revenue Recognition

Licensing and royalty revenue from royalty agreements is recognized in accordance with the terms of the specific agreement. Revenues recognized under these agreements amount to 100% of total revenues of the three months ended March 31, 2015 and 2014.

Property and Equipment

Property and Equipment

Property and equipment are stated at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets. Expenditures for major betterments and additions are capitalized, while replacement, maintenance and repairs, which do not extend the lives of the respective assets, are expensed as incurred.

Impairment of Long-Lived Assets

Impairment of Long-Lived Assets

Impairment losses are recorded on long-lived assets (property, equipment and intellectual property) used in operations when impairment indicators are present and the undiscounted expected cash flows estimated to be generated by those assets are less than the carrying value of such assets. No impairment losses have been recognized during the three months ended March 31, 2015 or 2014.

Stock-based Compensation

Stock-based Compensation

The Company has accounted for stock-based compensation under the provisions of ASC Topic 718 – “Stock Compensation” which requires the use of the fair-value based method to determine compensation for all arrangements under which employees and others receive shares of stock or equity instruments (stock options and common stock purchase warrants). The fair value of each stock option award is estimated on the date of grant using the Black-Scholes valuation model that uses assumptions for expected volatility, expected dividends, expected term, and the risk-free interest rate. Expected volatilities are based on historical volatility of peer companies and other factors estimated over the expected term of the stock options. The expected term of options granted is derived using the “simplified method” which computes expected term as the average of the sum of the vesting term plus the contract term. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for the period of the expected term.

Common Stock Purchase Warrants

Common Stock Purchase Warrants

The Company accounts for common stock purchase warrants in accordance with ASC Topic 815- 40, “Derivatives and Hedging – Contracts in Entity’s Own Equity” (“ASC 815-40”). Based on the provisions of ASC 815- 40, the Company classifies as equity any contracts that (i) require physical settlement or net-share settlement, or (ii) gives the Company a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement). The Company classifies as assets or liabilities any contracts that (i) require net-cash settlement including a requirement to net cash settle the contract if an event occurs and if that event is outside the control of the Company), or (ii) give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement).

Accounting for Uncertainty in Income Taxes

Accounting for Uncertainty in Income Taxes

The Company follows the provisions of ASC Topic 740-10, “Accounting for Uncertainty in Income Taxes” which clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements, and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. This topic also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.

Research and Development Costs

Research and Development Costs

The Company’s research and development costs are expensed in the period in which they are incurred.

Earnings (Loss) Per Share

Earnings (Loss) Per Share

Earnings (loss) per share is computed in accordance with FASB ASC Topic 260, “Earnings per Share”. Diluted earnings per share is computed by dividing net income (loss) by the weighted-average number of shares of common stock, common stock equivalents and other potentially dilutive securities outstanding during the period. Certain common stock equivalents were not included in the earnings (loss) per share calculation as their effect would be anti-dilutive. Warrants exercisable for 5,086,000 shares and options for 2,750,000 shares were excluded from weighted average common shares outstanding on a diluted basis.

Financial instruments

Financial instruments

The Company carries cash and cash equivalents, accounts receivable, accounts payable and accrued expenses at historical costs. The respective estimated fair values of these assets and liabilities approximate carrying values due to their current nature. The Company also carries notes payable to related parties at historical cost less discounts from warrants issued as loan financing costs.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.

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Stockholders' Deficiency-warrants issued, exercised and expired (Details) (USD $)	3 Months Ended
	Mar. 31, 2015
Summary of warrants issued, exercised and expired during the year
Balance at December 31, 2014	5,586,000
Shares Issued
Shares Expired	(500,000)
Balance at March 31, 2015	5,086,000
Weighted Average Exercise Price Balance at December 31, 2014	$ 0.99
Weighted Average Exercise Price Issued
Weighted Average Exercise Price Expired	$ (1.00)
Weighted Average Exercise Price Balance at March 31, 2015	$ 0.99
Aggregate Intrinsic Value Balance at December 31, 2014	$ 45,000
Aggregate Intrinsic Value Issued
Aggregate Intrinsic Value Expired
Aggregate Intrinsic Value Balance at March 31, 2015	$ 45,000

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Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Cash Flows from Operating Activities
Net loss	$ (53,332)	$ (285,950)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	58,836	58,954
Amortization of discount	3,176	10,586
Changes in operating assets and liabilities:
Accounts receivable, prepaid expenses and other assets	36,408	18,127
Employee advances	6,000
Accounts payable and accrued expenses	(52,397)	77,934
Payable to related parties		(117,000)
Cash Used in Operating Activities	(1,309)	(237,349)
Cash Flows From Investing Activities
Purchase of property and equipment		(13,591)
Cash Used in Investing Activities		(13,591)
Cash Flows from Financing Activities
Proceeds from issuance of common stock		240,000
Cash Provided by Financing Activities		240,000
Net Decrease in Cash and Cash Equivalents	(1,309)	(10,940)
Cash and Cash Equivalents at Beginning of Period	4,736	48,306
Cash and Cash Equivalents at End of Period	3,427	37,366
Supplemental Disclosure of Cash Flow Information
Cash paid during the period for interest
Cash paid during the period for income taxes

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Intellectual Property

3 Months Ended

Mar. 31, 2015

Business Combinations [Abstract]

Intellectual Property

Note 5 – Intellectual Property

Intellectual property consists of technology acquired from the purchase of 100% of the membership interests of Cornerstone Conservation Group LLC (“Cornerstone”).

For each of the three months ended March 31, 2015 and 2014, amortization expense was $54,953 and accumulated amortization of the intangible asset- intellectual property was $659,440 at March 31, 2015. 

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Intellectual Property (Detail) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014	Dec. 31, 2013
Amortization expense	$ 54,953	$ 54,953
Accumulated amortization of the intangible asset- intellectual property	$ 659,440		$ 604,487	$ 384,673
Cornerstone
Percentage of membership interests purchased	100.00%