Annual Statements Open main menu

Novo Integrated Sciences, Inc. - Quarter Report: 2010 June (Form 10-Q)

Form 10-Q
Table of Contents

 

 

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 June 30, 2010

 

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

For the transition period from             , 200    , to             , 200    .

Commission File Number

333-109118

 

 

Turbine Truck Engines, Inc.

(Exact Name of Registrant as Specified in Charter)

 

 

 

Nevada   59-3691650

(State or Other Jurisdiction of

Incorporation or Organization)

 

(I.R.S. Employer

Identification Number)

917 Biscayne Boulevard Suite 6, Deland, Florida 32724

(Address of Principal Executive Offices)

(386) 943-8358

(Registrant’s Telephone Number)

 

 

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ¨    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 definition of “accelerated filer, large accelerated filer and smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

 

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

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

There were 42,976,768 shares of the Registrant’s $0.001 par value common stock outstanding as of August 12, 2010.

 

 

 


Table of Contents

Turbine Truck Engines, Inc.

(A Development Stage Company)

Contents

 

Part I – Financial Information

  
Item 1.   

Financial Statements

   1
Item 2.   

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

   18
Item 3.   

Quantitative and Qualitative Disclosures About Market Risk

   22
Item 4T.   

Controls and Procedures

   22
Part II – Other Information   
Item 1.   

Legal Proceedings

   23
Item 2.   

Unregistered Sales of Equity Securities and Use of Proceeds

   23
Item 3.   

Defaults Upon Senior Securities

   24
Item 4.   

Removed and Reserved

   24
Item 5.   

Other Information

   24
Item 6.   

Exhibits

   24
Signatures    25


Table of Contents

PART I—FINANCIAL INFORMATION

Statements in this Form 10-Q Quarterly Report may be “forward-looking statements.” Forward-looking statements include, but are not limited to, statements that express our intentions, beliefs, expectations, strategies, predictions or any other statements relating to our future activities or other future events or conditions. These statements are based on our current expectations, estimates and projections about our business based, in part, on assumptions made by our management. These assumptions are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in the forward-looking statements due to numerous factors, including those risks discussed in this Form 10-Q Quarterly Report, under “Management’s Discussion and Analysis of Financial Condition or Plan of Operation” and in other documents which we file with the Securities and Exchange Commission.

In addition, such statements could be affected by risks and uncertainties related to our financial condition, factors that affect our industry, market and customer acceptance, changes in technology, fluctuations in our quarterly results, our ability to continue and manage our growth, liquidity and other capital resource issues, competition, fulfillment of contractual obligations by other parties and general economic conditions. Any forward-looking statements speak only as of the date on which they are made, and we do not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this Form 10-Q Quarterly Report, except as required by law.


Table of Contents
Item 1. Financial Statements

Turbine Truck Engines, Inc.

(A Development Stage Enterprise)

Financial Statements

As of June 30, 2010 (unaudited) and December 31, 2009 and

for the three and six months ended June 30, 2010 and 2009 (unaudited)

and the Period November 27, 2000 (Date of Inception)

through June 30, 2010 (unaudited)

Contents

Financial Statements:

 

Balance Sheets

   2

Statements of Operations

   3

Statements of Changes in Stockholders’ Deficit

   4

Statements of Cash Flows

   11

Notes to Financial Statements

   13

 

1


Table of Contents

Turbine Truck Engines, Inc.

(A Development Stage Enterprise)

Balance Sheets

 

     June 30, 2010
(Unaudited)
    December 31, 2009  

Assets

    

Current assets:

    

Cash

   $ 340,707      $ 603,001   

Prepaid expenses

     18,480        10,000   
                

Total current assets

     359,187        613,601   
                

Prepaid agency fee

     100,000     

Furniture and equipment, net of accumulated depreciation of $44,387 (2010) and $42,271 (2009)

     10,542        8,199   
                
   $ 469,729        621,800   
                

Liabilities and Stockholders’ Deficit

    

Current liabilities:

    

Accounts payable

   $ 167,216      $ 139,520   

Accrued expenses

     58,410        —     

Accrued interest

     14,718        14,349   

Accrued payroll

     35,182        51,231   

Note payable

     500        500   
                

Total current liabilities

     276,026        205,600   

Accrued expenses – long term

     269,250        269,250   

Accrued payroll – long term

     199,655        229,178   

Accrued royalty fees

     926,500        801,500   

Convertible note payable net of unamortized discount of $215,213 and $2,914, respectively

     37,787        86   

Note payable to related party

     1,901        1,901   
                

Total liabilities

     1,711,119        1,507,515   

Stockholders’ deficit:

    

Preferred stock; $.001 par value; 1,000,000 shares authorized; 0 shares issued and outstanding

     —          —     

Common stock; $.001 par value; 99,000,000 shares authorized; 43,292,351 (2010) and 39,693,484 (2009) shares issued and outstanding

     43,291        39,692   

Additional paid in capital

     12,164,505        10,914,424   

Deficit accumulated during development stage

     (13,422,648     (11,563,923

Prepaid consulting services paid with common stock

     (14,538     (79,908

Receivable for common stock

     (12,000     (196,000
                

Total stockholders’ deficit

     (1,241,390     (885,715
                
   $ 469,729      $ 621,800   
                

The accompanying notes are an integral part of the financial statements.

 

2


Table of Contents

Turbine Truck Engines, Inc.

(A Development Stage Company)

Statements of Operations

(unaudited)

 

     Three Months Ended June 30,     Six Months Ended June 30,     Period
November 27, 2000
 
     2010     2009     2010     2009     (Date of Inception)
through June 30, 2010
 

Research and development costs

   $ 67,226      $ 71,636      $ 125,740      $ 71,636      $ 3,652,890   

Operating costs

     1,102,765        247,794        1,698,665        540,931        9,372,151   
                                        
     1,169,991        319,430        1,824,405        612,567        13,025,041   

Interest (income) expense

     25,756        98,153        34,320        138,722        397,607   
                                        

Net loss

   $ (1,195,747 )   $ (417,583 )   $ (1,858,725 )   $ (751,289 )   $ (13,422,648 )
                                        

Net loss per share

   $ (0.03 )   $ (0.02 )   $ (0.04 )   $ (0.03 )   $ (0.85 )
                                        

Weighted average number of common shares outstanding

     42,997,959        26,730,153        41,687,640        24,898,053        15,876,208   
                                        

The accompanying notes are an integral part of the financial statements.

 

3


Table of Contents

Turbine Truck Engines, Inc.

(A Development Stage Company)

Statement of Changes in Stockholders’ Deficit

For the Six Months Ended June 30, 2010 and

For Each of the Years From November 27, 2000 (Date of Inception) through June 30, 2010

 

     Common Stock           Deficit  
     Shares     Amount     Additional Paid
in Capital
    Accumulated
During
Development
Stage
 

Issuance of common stock for option to acquire license and stock subscription receivable, December 2000

   10,390,000      $ 10,390       

Net loss for the period

         $ (4,029 )
                              

Balance, December 31, 2000

   10,390,000        10,390          (4,029 )

Issuance of common stock for cash, February 2001*

   10,000        10      $ 4,990     

Issuance of common stock for cash, March 2001*

   10,000        10        4,990     

Issuance of common stock for cash, August 2001*

   10,000        10        4,990     

Issuance of common stock for cash, September 2001*

   55,000        55        27,445     

Payment for common stock issued under subscription receivable

        

Net loss

           31,789   
                              

Balance, December 31, 2001

   10,475,000        10,475        42,415        (35,818 )

Issuance of common stock for cash, January 2002*

   5,000        5        2,495     

Issuance of common stock for cash, February 2002*

   10,000        10        4,990     

Issuance of common stock for cash, April 2002*

   25,000        25        12,475     

Issuance of common stock for cash, May 2002*

   65,000        65        32,435     

Issuance of common stock for cash, June 2002*

   70,000        70        34,930     

Issuance of common stock for cash, August 2002*

   10,000        10        4,990     

Issuance of common stock for cash, October 2002*

   10,000        10        4,990     

Issuance of common stock to acquire licensing agreement, July 2002*

   5,000,000        5,000        2,495,000     

Shares returned to treasury by founding stockholder, July 2002

   (5,000,000 )     (5.000 )     5,000     

Net loss

           (2,796,768 )
                              

Balance, December 31, 2002

   10,670,000        10,670        2,639,720        (2,832,586 )

Issuance of common stock for cash, February 2003*

   207,000        207        103,293     

Issuance of common stock for cash, September 2003*

   30,000        30        14,970     

Issuance of common stock for services, September 2003*

   290,000        290        144,710     

Payment for common stock issued under subscription agreement

        

Offering costs for private placement offering

         (33,774 )  

Net loss

           (190,567 )
                              

Balance, December 31, 2003

   11,197,000        11,197        2,868,919        (3,023,153 )

Issuance of notes payable with beneficial conversion feature

         19,507     

Issuance of common stock for services, September 2004 ($2.00 per share)

   20,000        20        39,980     

Conversion of notes payable, August 2004 ($2.00 per share)

   31,125        31        62,219     

Issuance of common stock for cash, September 2004 ($2.00 per share)

   25,025        25        50,025     

Issuance of common stock for cash, October 2004 ($2.00 per share)

   1,000        1        1,999     

Issuance of common stock for cash, November 2004 ($2.00 per share)

   3,500        4        6,996     

Issuance of common stock for cash, December 2004 ($2.00 per share)

   3,000        3        5,997     

Amortization of offering costs related to Form SB-2 filing

         (10,159 )  

Amortization of stock for services related to Form SB-2 offering

         (6,317 )  

Contribution from shareholder

         18,256     

Net loss

           (282,009 )
                              

Balance, December 31, 2004

   11,280,650        11,281        3,057,422        (3,305,162 )

 

* Common stock issued at $.50 per share.

The accompanying notes are an integral part of the financial statements.

 

4


Table of Contents
     Deferred
Non-Cash
Offering
Costs
    Prepaid
Consulting
Services Paid
for with
Common
Stock
   Receivable
for
Common
Stock
   Subscription
Receivable
    Total  

Issuance of common stock for option to acquire license and stock subscription receivable, December 2000

           $ (390 )   $ 10,000   

Net loss for the period

               (4,029 )
                                  

Balance, December 31, 2000

             (390 )     5,971   

Issuance of common stock for cash, February 2001*

               5,000   

Issuance of common stock for cash, March 2001*

               5,000   

Issuance of common stock for cash, August 2001*

               5,000   

Issuance of common stock for cash, September 2001*

               27,500   

Payment for common stock issued under subscription receivable

             300        300   

Net loss

               (31,789 )
                                  

Balance, December 31, 2001

             (90 )     16,982   

Issuance of common stock for cash, January 2002*

               2,500   

Issuance of common stock for cash, February 2002*

               5,000   

Issuance of common stock for cash, April 2002*

               12,500   

Issuance of common stock for cash, May 2002*

               32,500   

Issuance of common stock for cash, June 2002*

             (2,500 )     32,500   

Issuance of common stock for cash, August 2002*

               5,000   

Issuance of common stock for cash, October 2002*

               5,000   

Issuance of common stock to acquire licensing agreement, July 2002*

               2,500,000   

Shares returned to treasury by founding stockholder, July 2002

            

Net loss

               (2,796,768 )
                                  

Balance, December 31, 2002

             (2,590 )     (184,786 )

Issuance of common stock for cash, February 2003*

               103,500   

Issuance of common stock for cash, September 2003*

               15,000   

Issuance of common stock for services, September 2003*

   $ (74,850 )             70,150   

Payment for common stock issued under subscription agreement

             2,500        2,500   

Offering costs for private placement offering

               (33,774 )

Net loss

               (190,567 )
                                  

Balance, December 31, 2003

     (74,850 )           (90 )     (217,977 )

Issuance of notes payable with beneficial conversion feature

               19,507   

Issuance of common stock for services, September 2004 ($2.00 per share)

               40,000   

Conversion of notes payable, August 2004 ($2.00 per share)

               62,250   

Issuance of common stock for cash, September 2004 ($2.00 per share)

               50,050   

Issuance of common stock for cash, October 2004 ($2.00 per share)

               2,000   

Issuance of common stock for cash, November 2004 ($2.00 per share)

               7,000   

Issuance of common stock for cash, December 2004 ($2.00 per share)

               6,000   

Amortization of offering costs related to Form SB-2 filing

               (10,159 )

Amortization of stock for services related to Form SB-2 offering

     6,317             

Contribution from shareholder

               18,256   

Net loss

               (282,009 )
                                  

Balance, December 31, 2004

     (68,533 )           (90 )     (305,082 )

 

5


Table of Contents

Turbine Truck Engines, Inc.

(A Development Stage Company)

Statement of Changes in Stockholders’ Deficit

For the Six Months Ended June 30, 2010 and

For Each of the Years From November 27, 2000 (Date of Inception) through June 30, 2010

 

     Common Stock          Deficit  
     Shares    Amount    Additional
Paid in
Capital
    Accumulated
During
Development
Stage
 

Issuance of common stock for services, January 2005 ($2.00 per share)

   80,000    80    159,920     

Issuance of common stock in satisfaction of a note payable, February 2005 ($2.00 per share)

   125,000    125    249,875     

Issuance of common stock for cash, February 2005 ($2.00 per share)

   3,200    3    6,397     

Issuance of common stock for cash, March 2005 ($2.00 per share)

   1,500    1    2,999     

Amortization of offering costs related to Form SB-2 filing

         (31,216 )  

Amortization of stock for services related to Form SB-2 offering

         (19,413 )  

Issuance of common stock for services, April 2005 ($2.00 per share)

   5,000    5    9,995     

Capital contribution from stockholder, May 2005

         170,000     

Issuance of common stock for cash, May 2005 ($2.00 per share)

   15,550    16    31,084     

Write off of stock for services related to Form SB-2 filing

          

Issuance of common stock for cash, June 2005 ($2.00 per share)

   9,100    9    18,191     

Issuance of common stock for services, June 2005 ($1.70 per share)

   100,000    100    169,900     

Capital contribution from stockholder, June 2005

         450     

Issuance of common stock for cash, August 2005 ($1.00 per share)

   5,000    5    4,995     

Issuance of common stock for services, July 2005 ($1.00 per share)

   40,000    40    39,960     

Amortization of prepaid services paid for with common stock

          

Write off prepaid services paid for with common stock due to terminated agreement

          

Issuance of common stock for cash, October ($1.00 per share)

   25,000    25    24,975     

Issuance of common stock for cash, November ($1.00 per share)

   20,000    20    19,980     

Issuance of common stock for cash, December ($1.00 per share)

   5,000    5    4,995     

Net loss

           (1,068,738 )
                      

Balance, December 31, 2005

   11,715,000    11,715    3,920,509      (4,373,900 )

Issuance of common stock for cash, January ($1.00 per share)

   65,000    65    64,935     

Issuance of common stock for cash, February ($1.00 per share)

   1,500    2    1,498     

Amortization of prepaid services paid for with common stock

          

Issuance of common stock for cash, March ($1.00 per share)

   1,675    2    1,673     

Issuance of common stock for cash, April ($1.00 per share)

   5,000    5    4,995     

Issuance of common stock for services, May ($1.00 per share)

   10,000    10    9,990     

Issuance of common stock for services, May ($1.15 per share)

   10,000    10    11,490     

Issuance of common stock for cash, June ($.80 per share)

   15,000    15    11,985     

Issuance of common stock and warrants for cash, June ($.50 per share)

   200,000    200    99,800     

Issuance of common stock for services, June ($1.15 per share)

   150,000    150    172,350     

Issuance of common stock for services, July ($1.10 per share)

   109,091    109    119,891     

Issuance of common stock for services, July ($.50 per share)

   30,000    30    14,970     

Issuance of common stock for settlement of debt, August ($.85 per share)

   125,253    125    106,341     

Issuance of common stock for services, August ($.81 per share)

   10,000    10    8,065     

Issuance of common stock and warrants for cash, September ($.50 per share)

   167,200    167    83,433     

Issuance of common stock for services, September ($.50 per share)

   210,000    210    104,790     

Issuance of common stock for services, September ($.74 per share)

   10,000    10    7,385     

Issuance of common stock in settlement of a payable, September ($4.16 per share)

   100,000    100    416,567     

Issuance of options to employees, directors and consultants, September

         78,355     

The accompanying notes are an integral part of the financial statements.

 

6


Table of Contents
     Deferred
Non-Cash
Offering
Costs
   Prepaid
Consulting
Services Paid
for with
Common
Stock
    Receivable
for
Common
Stock
    Subscription
Receivable
    Total  

Issuance of common stock for services, January 2005 ($2.00 per share)

            160,000   

Issuance of common stock in satisfaction of a note payable, February 2005 ($2.00 per share)

            250,000   

Issuance of common stock for cash, February 2005 ($2.00 per share)

            6,400   

Issuance of common stock for cash, March 2005 ($2.00 per share)

            3,000   

Amortization of offering costs related to Form SB-2 filing

            (31,216 )

Amortization of stock for services related to Form SB-2 offering

   19,413         

Issuance of common stock for services, April 2005 ($2.00 per share)

            10,000   

Capital contribution from stockholder, May 2005

            170,000   

Issuance of common stock for cash, May 2005 ($2.00 per share)

            31,100   

Write off of stock for services related to Form SB-2 filing

   49,120          49,120   

Issuance of common stock for cash, June 2005 ($2.00 per share)

            18,200   

Issuance of common stock for services, June 2005 ($1.70 per share)

      $ (170,000 )      

Capital contribution from stockholder, June 2005

            450   

Issuance of common stock for cash, August 2005 ($1.00 per share)

            5000   

Issuance of common stock for services, July 2005 ($1.00 per share)

        (40,000 )      

Amortization of prepaid services paid for with common stock

        26,833          26,833   

Write off prepaid services paid for with common stock due to terminated agreement

        161,500        161,500   

Issuance of common stock for cash, October ($1.00 per share)

            25,000   

Issuance of common stock for cash, November ($1.00 per share)

            20,000   

Issuance of common stock for cash, December ($1.00 per share)

            5000   

Net loss

            (1,068,738 )
                               

Balance, December 31, 2005

        (21,667 )   (90   (463,433 )

Issuance of common stock for cash, January ($1.00 per share)

            65,000   

Issuance of common stock for cash, February ($1.00 per share)

            1,500   

Amortization of prepaid services paid for with common stock

        204,556        204,556   

Issuance of common stock for cash, March ($1.00 per share)

            1,675   

Issuance of common stock for cash, April ($1.00 per share)

            5,000   

Issuance of common stock for services, May ($1.00 per share)

            10,000   

Issuance of common stock for services, May ($1.15 per share)

            11,500   

Issuance of common stock for cash, June ($.80 per share)

            12,000   

Issuance of common stock and warrants for cash, June ($.50 per share)

            100,000   

Issuance of common stock for services, June ($1.15 per share)

        (172,500 )    

Issuance of common stock for services, July ($1.10 per share)

        (120,000 )    

Issuance of common stock for services, July ($.50 per share)

        (5,000 )     10,000   

Issuance of common stock for settlement of debt, August ($.85 per share)

            106,466   

Issuance of common stock for services, August ($.81 per share)

            8,075   

Issuance of common stock and warrants for cash, September ($.50 per share)

            83,600   

Issuance of common stock for services, September ($.50 per share)

        (12,500 )     92,500   

Issuance of common stock for services, September ($.74 per share)

            7,395   

Issuance of common stock in settlement of a payable, September ($4.16 per share)

            416,667   

Issuance of options to employees, directors and consultants, September

            78,355   

The accompanying notes are an integral part of the financial statements.

 

7


Table of Contents

Turbine Truck Engines, Inc.

(A Development Stage Company)

Statement of Changes in Stockholders’ Deficit

For the Six Months Ended June 30, 2010 and

For Each of the Years From November 27, 2000 (Date of Inception) through June 30, 2010

 

     Common Stock            
     Shares    Amount    Additional
Paid in
Capital
   Deficit
Accumulated
During
Development
Stage
 

Issuance of common stock for services, October ($0.50, per shares)

   30,000      30      14,970   

Issuance of options to employees, directors and consultants, October

           155,185   

Issuance of common stock for cash, October ($0.50 per share)

   16,000      16      7,984   

Issuance of common stock for services, October ($0.67, per shares)

   15,000      15      9,985   

Issuance of common stock for services, November ($0.50, per shares)

   188,000      188      93,812   

Issuance of common stock for cash, November ($0.50 per share)

   100,000      100      49,900   

Issuance of common stock for cash, November ($0.60 per share)

   2,833      3      1,697   

Net loss

              (1,465,077 )
                           

Balance December 31, 2006

   13,286,552      13,287      5,572,555      (5,838,977 )

Issuance of options to consultants, January

           155,188   

Issuance of common stock for cash, January ($0.50 per share)

   26,000      26      12,974   

Issuance of common stock for exercise of options, January ($0.50 per share)

   300,000      300      149,700   

Issuance of common stock for services, January ($0.66, per shares)

   50,000      50      32,950   

Issuance of common stock for services, January ($0.51, per shares)

   10,000      10      5,090   

Issuance of common stock for exercise of options, February ($0.50 per share)

   100,000      100      49,900   

Issuance of common stock for exercise of options, February ($0.60 per share)

   20,000      20      11,980   

Issuance of common stock for cash, February ($0.23 per share)

   239,130      239      54,761   

Issuance of common stock for services, February ($0.87, per shares)

   50,000      50      43,200   

Issuance of common stock for services, February ($0.72, per shares)

   20,000      20      14,280   

Issuance of common stock for cash, February ($0.23 per share)

   558,696      559      127,941   

Issuance of common stock for services, March ($0.65, per shares)

   25,000      25      16,225   

Issuance of common stock for services, March ($0.70, per shares)

   25,000      25      17,475   

Issuance of common stock for exchange of fixed assets, April ($0.50, per share)

   2,000      2      998   

Issuance of common stock for cash, May ($0.25, per share)

   24,000      24      5,976   

Issuance of common stock for cash, June ($0.25, per share)

   26,000      26      6,474   

Issuance of common stock for services, June ($0.43, per share)

   75,000      75      32,175   

Issuance of common stock for exchange of fixed assets, June ($0.50 per share)

   8,000      8      3,992   

Issuance of common stock for services, June ($0.44, per share)

   100,000      100      43,900   

Amortization of prepaid services paid for with common stock

           

Issuance of common stock and warrants for cash, July ($0.25, per share)

   72,000      72      17,928   

Issuance of common stock for services, August ($0.55, per share)

   160,000      160      87,840   

Issuance of common stock for services, August ($0.50, per share)

   3,000      3      1,497   

Issuance of common stock for services, August ($0.38, per share)

   28,600      28      10,839   

Issuance of common stock and warrants for cash, August ($0.25, per share)

   270,000      270      67,230   

Issuance of common stock for services, September ($0.50, per share)

   1,300,000      1,300      648,700   

Issuance of common stock for cash, September ($0.25, per share)

   164,000      164      40,836   

Issuance of common stock for cash, September ($0.30, per share)

   26,666      26      7,973   

Issuance of common stock for cash, September ($0.37, per share)

   54,243      53      19,646   

Issuance of options & warrants to employees & consultants, September

           108,470   

Issuance of common stock for services, October ($0.25, per share)

   6,000      6      1,494   

Issuance of common stock for services, October ($0.56, per share)

   2,700      3      1,497   

Issuance of common stock for cash, October ($0.50, per share)

   55,000      55      27,445   

Issuance of common stock for cash, October ($0.53, per share)

   1,905      2      998   

Issuance of common stock for cash, November ($0.28, per share)

   125,291      125      34,956   

Issuance of common stock for cash, November ($0.32, per share)

   1,563      1      499   

Issuance of common stock for cash, November ($0.37, per share)

   40,000      40      14,760   

Issuance of common stock for cash, November ($0.68, per share)

   25,000      25      16,850   

Issuance of common stock for cash, December ($0.25, per share)

   68,000      68      16,932   

Net loss

              (2,470,352 )
                           

Balance December 31, 2007

   17,349,346    $ 17,347    $ 7,484,124    $ (8,309,329 )

The accompanying notes are an integral part of the financial statements.

 

8


Table of Contents
     Deferred
Non-Cash
Offering
Costs
   Prepaid
Consulting
Services Paid
for with
Common
Stock
    Receivable
for
Common
Stock
    Subscription
Receivable
    Total  

Issuance of common stock for services, October ($0.50, per shares)

              15,000   

Issuance of options to employees, directors and consultants, October

              155,185   

Issuance of common stock for cash, October ($0.50 per share)

              8,000   

Issuance of common stock for services, October ($0.67, per shares)

              10,000   

Issuance of common stock for services, November ($0.50, per shares)

        (80,000 )         14,000   

Issuance of common stock for cash, November ($0.50 per share)

              50,000   

Issuance of common stock for cash, November ($0.60 per share)

              1,700   

Net loss

              (1,465,077 )
                                       

Balance December 31, 2006

        (207,111 )       (90 )     (460,336 )

Issuance of options to consultants, January

              155,188   

Issuance of common stock for cash, January ($0.50 per share)

              13,000   

Issuance of common stock for exercise of options, January ($0.50 per share)

          (150,000 )    

Issuance of common stock for services, January ($0.66, per shares)

        (33,000 )      

Issuance of common stock for services, January ($0.51, per shares)

              5,100   

Issuance of common stock for exercise of options, February ($0.50 per share)

          (15,000 )       35,000   

Issuance of common stock for exercise of options, February ($0.60 per share)

          (12,000 )    

Issuance of common stock for cash, February ($0.23 per share)

              55,000   

Issuance of common stock for services, February ($0.87, per share)

              43,250   

Issuance of common stock for services, February ($0.72, per share)

              14,300   

Issuance of common stock for cash, February ($0.23 per share)

              128,500   

Issuance of common stock for services, March ($0.65, per shares)

              16,250   

Issuance of common stock for services, March ($0.70, per shares)

        (17,500 )      

Issuance of common stock for exchange of fixed assets, April ($0.50, per share)

              1,000   

Issuance of common stock for cash, May ($0.25, per share)

              6,000   

Issuance of common stock for cash, June ($0.25, per share)

              6,500   

Issuance of common stock for services, June ($0.43, per share)

              32,250   

Issuance of common stock for exchange of fixed assets, June ($0.50 per share)

              4,000   

Issuance of common stock for services, June ($0.44, per share)

              44,000   

Amortization of prepaid services paid for with common stock

        890,111            890,111   

Issuance of common stock and warrants for cash, July ($0.25, per share)

              18,000   

Issuance of common stock for services, August ($0.55, per share)

              88,000   

Issuance of common stock for services, August ($0.50, per share)

              1,500   

Issuance of common stock for services, August ($0.38, per share)

              10,867   

Issuance of common stock and warrants for cash, August ($0.25, per share)

              67,500   

Issuance of common stock for services, September ($0.50, per share)

        (650,000 )      

Issuance of common stock for cash, September ($0.25, per share)

              41,000   

Issuance of common stock for cash, September ($0.30, per share)

              7,999   

Issuance of common stock for cash, September ($0.37, per share)

              19,699   

Issuance of options & warrants to employees & consultants, September

              108,470   

Issuance of common stock for services, October ($0.25, per share)

              1,500   

Issuance of common stock for services, October ($0.56, per share)

              1,500   

Issuance of common stock for cash, October ($0.50, per share)

              27,500   

Issuance of common stock for cash, October ($0.53, per share)

              1,000   

Issuance of common stock for cash, November ($0.28, per share)

              35,081   

Issuance of common stock for cash, November ($0.32, per share)

              500   

Issuance of common stock for cash, November ($0.37, per share)

              14,800   

Issuance of common stock for cash, November ($0.68, per share)

              16,875   

Issuance of common stock for cash, November ($0.25, per share)

              17,000   

Payment on receivable for common stock

          10,000          10,000   

Net loss

              (2,470,352 )
                                       

Balance December 31, 2007

   $      $ (17,500 )   $ (167,000 )   $ (90 )   $ (992,448 )

 

9


Table of Contents

Turbine Truck Engines, Inc.

(A Development Stage Company)

Statement of Changes in Stockholders’ Deficit

For the Six Months Ended June 30, 2010 and

For Each of the Years From November 27, 2000 (Date of Inception) through June 30, 2010

 

     Common Stock              
     Shares    Amount     Additional
Paid in
Capital
    Deficit
Accumulated
During
Development
Stage
 

Issuance of common stock and warrants for cash, January ($0.15, per shares)

     200,000      200        29,800     

Issuance of common stock for services, February ($0.38, per shares)

     160,000      160        60,640     

Issuance of common stock for services, February ($0.26, per shares)

     12,000      12        3,108     

Issuance of common stock for services, April ($0.12, per share)

     210,000      210        24,990     

Issuance of common stock for services, May ($0.20, per share)

     350,000      350        69,650     

Issuance of common stock for cash, May ($0.10, per share)

     145,000      145        14,355     

Issuance of common stock for cash, June ($0.10, per share)

     334,000      334        33,066     

Issuance of common stock for cash, June ($0.085, per share)

     150,000      150        12,600     

Issuance of common stock for cash, June ($0.08, per share)

     25,000      25        1,975     

Issuance of common stock for services, June ($0.16, per share)

     300,000      300        47,700     

Amortization of prepaid services paid for with common stock

         

Value of the beneficial conversion feature for the issuance of convertible debt

          25,000     

Issuance of common stock for cash, July ($0.10, per share)

     379,500      380        37,571     

Issuance of common stock for services, July ($0.15, per share)

     30,000      30        4,470     

Issuance of common stock for cash, August ($0.10, per share)

     101,000      101        9,999     

Issuance of common stock for cash, September ($0.10, per share)

     369,000      369        36,531     

Issuance of common stock for cash, September ($0.08, per share)

     306,250      306        24,194     

Issuance of common stock for cash, October ($0.08, per share)

     3,750      4        296     

Issuance of common stock for cash, October ($0.09, per share)

     40,000      40        3,560     

Issuance of common stock for cash, October ($0.10, per share)

     27,000      27        2,673     

Issuance of common stock for cash, November ($0.08, per share)

     12,500      13        987     

Issuance of common stock for cash, November ($0.10, per share)

     32,400      32        3,208     

Issuance of common stock for services, December ($0.071, per share)

     12,500      13        875     

Issuance of common stock for cash, December ($0.08, per share)

     161,250      161        12,739     

Issuance of common stock for cash, December ($0.10, per share)

     27,300      27        2,603     

Issuance of common stock for services, December ($0.09, per share)

     10,000      10        890     

Issuance of common stock for services, December ($0.13, per share)

     500,000      500        64,500     

Issuance of common stock for services, December ($0.17, per share)

     12,500      13        2,112     

Issuance of common stock for services, December ($0.1954, per share)

     100,000      100        19,435     

Issuance of common stock for conversion of notes, December ($0.08, per share)

     26,297      26        1,974     

Issuance of common stock for conversion of notes, December ($0.07, per share)

     270,468      270        19,730     

Issuance of common stock for conversion of notes, December ($0.10, per share)

     202,703      203        14,797     

Issuance of warrants for services, December

          29,578     

Net loss

            (982,677 )
                               

Balance December 31, 2008

     21,859,764      21,858        8,099,730        (9,292,006 )

Amortization of prepaid services paid for with common stock

         

Issuance of common stock for conversion of notes, January ($0.06, per share)

     255,965      256        14,744     

Issuance of common stock for cash, January ($0.50, per share)

     200      1        98     

Issuance of common stock for cash, January ($0.07, per share)

     294,999      295        20,355     

Issuance of common stock for cash, January ($0.08, per share)

     12,500      12        988     

Issuance of common stock for cash, January ($0.10, per share)

     255,000      255        25,245     

Issuance of common stock for conversion of notes, February ($0.06, per share)

     166,739      167        9,833     

Issuance of common stock for conversion of notes, February ($0.09, per share)

     221,984      222        19,778     

Issuance of common stock for cash, February ($0.07, per share)

     526,927      527        36,358     

Issuance of common stock for cash, February ($0.10, per share)

     110,500      110        10,940     

Issuance of common stock for services, March ($0.11, per share)

     300,000      300        32,700     

Issuance of common stock for conversion of notes, March ($0.07, per share)

     137,768      138        9,862     

Issuance of common stock for conversion of notes, March ($0.08, per share)

     316,241      316        24,684     

Issuance of common stock for cash, March ($0.07, per share)

     289,286      289        19,961     

Issuance of common stock for cash, March ($0.10, per share)

     10,000      10        990     

Value of the beneficial conversion feature for the issuance of convertible debt

          149,750     

Issuance of warrants for services, January

          36,644     

Issuance of common stock for services, April ($0.09, per share)

     20,000      20        1,780     

Issuance of common stock for services, April ($0.10, per share)

     510,000      510        50,490     

Issuance of common stock for cash, April ($0.07, per share)

     274,999      275        18,975     

Issuance of common stock for cash, April ($0.10, per share)

     29,500      30        2,920     

Issuance of common stock for conversion of notes, April ($0.07, per share)

     511,979      512        34,488     

Issuance of common stock for conversion of notes, April ($0.06, per share)

     158,897      159        9,841     

Issuance of common stock for conversion of notes, May ($0.06, per share)

     399,617      399        24,601     

Issuance of common stock for services, May ($0.09, per share)

     60,000      60        5,090     

Issuance of common stock for cash, May ($0.07, per share)

     77,000      77        5,313     

Issuance of common stock for conversion of notes, June ($0.06, per share)

     381,098      381        24,619     

Issuance of common stock for conversion of notes, June ($0.07, per share)

     934,516      935        54,065     

Issuance of common stock and warrants for cash, June ($0.07, per share)

     582,142      582        40,168     

Issuance of common stock for cash, June ($0.08, per share)

     420,000      420        34,562     

Issuance of common stock for cash, July ($0.07, per share)

     976,250      976        67,361     

Issuance of common stock for cash, July ($0.065, per share)

     215,500      216        13,792     

Issuance of common stock for cash, July ($0.10, per share)

     20,000      20        1,980     

Issuance of common stock for cash, July ($0.26, per share)

     3,846      4        996     

Issuance of common stock for conversion of notes, July ($0.065, per share)

     153,941      154        9,846     

Issuance of common stock for cash, August ($0.07, per share)

     130,000      130        8,970     

Issuance of common stock for cash, August ($0.085, per share)

     58,822      59        4,941     

Issuance of common stock and warrants for cash, August ($0.10, per share)

     1,480,000      1,480        146,520     

Issuance of common stock for cash, August ($0.11, per share)

     10,000      10        1,090     

Issuance of common stock for cash, August ($0.12, per share)

     100,000      100        11,900     

Issuance of common stock for cash, August ($0.24, per share)

     152,498      153        36,447     

Issuance of common stock for cash, August ($0.26, per share)

     140,384      140        36,360     

Issuance of common stock for cash, August ($0.28, per share)

     16,785      17        4,683     

Issuance of common stock for cash, August ($0.30, per share)

     164,000      164        49,036     

Issuance of common stock for cash, August ($0.33, per share)

     6,363      6        2,094     

Issuance of common stock for services, August ($0.09, per share)

     1,200,000      1,200        106,800     

Issuance of common stock for services, August ($0.25, per share)

     100,000      100        24,900     

Issuance of common stock for services, August ($0.10, per share)

     50,000      50        4,950     

Issuance of common stock for services, August ($0.16, per share)

     100,000      100        15,900     

Issuance of common stock for cash, September ($0.10, per share)

     20,000      20        1,980     

Issuance of common stock for cash, September ($0.20, per share)

     40,000      40        7,960     

Issuance of common stock for cash, September ($0.22, per share)

     286,361      286        62,714     

Issuance of common stock for cash, September ($0.23, per share)

     126,086      126        28,874     

Issuance of common stock for cash, September ($0.235, per share)

     29,787      30        6,970     

Issuance of common stock for cash, September ($0.25, per share)

     46,000      46        11,454     

Issuance of common stock for cash, September ($0.26, per share)

     84,230      84        21,816     

Issuance of common stock for cash, September ($0.30, per share)

     21,333      21        6,379     

Issuance of common stock for cash, September ($0.325, per share)

     1,230      1        399     

Issuance of common stock for cash, September ($0.33, per share)

     67,000      67        22,043     

Issuance of common stock for cash, September ($0.375, per share)

     10,000      10        3,740     

Issuance of common stock for services, September ($0.47, per share)

     100,000      100        46,900     

Issuance of common stock for services, September ($0.61, per share)

     500,000      500        304,500     

Issuance of common stock for services, September ($0.50, per share)

     5,000      5        2,495     

Issuance of common stock and exercise of warrants for a reduction in a payable, September ($0.10, per share)

     350,000      350        34,650     

Issuance of common stock options, July

          40,706     

Issuance of common stock for cash, October ($0.22, per share)

     11,363      11        2,489     

Issuance of common stock for cash, October ($0.18, per share)

     246,107      246        44,054     

Issuance of common stock for cash, October ($0.17, per share)

     25,882      26        4,374     

Issuance of common stock for cash, November ($0.18, per share)

     98,775      99        17,681     

Issuance of common stock for cash, November ($0.20, per share)

     167,500      168        33,332     

Issuance of common stock for cash, December ($0.19 per share)

     2,500      3        472     

Issuance of common stock for cash, December ($0.16, per share)

     100,000      100        15,900     

Issuance of common stock for cash, December ($0.17, per share)

     5,882      6        994     

Issuance of common stock for cash, December ($0.18, per share)

     102,111      102        18,278     

Issuance of common stock for cash, December ($0.20, per share)

     10,000      10        1,990     

Issuance of common stock for cash, December ($0.30, per share)

     1,100,000      1,100        328,900     

Issuance of common stock for services, October ($0.42, per share)

     100,000      100        41,900     

Issuance of common stock for services, December ($0.38, per share)

     345,000      345        130,755     

Issuance of common stock for conversion of notes, December ($0.1284, per share)

     1,495,327      1,495        190,505     

Value of the beneficial conversion feature for the issuance of convertible debt

          100,921     

Issuance of warrants

          10,161     

Payment on stock subscription receivable

         

Net loss

            (2,271,917 )
                               

Balance December 31, 2009

     39,693,484    $ 39,692      $ 10,914,424      $ (11,563,923 )

Payment on stock subscription receivables (unaudited)

         

Amortization of prepaid services paid for with common stock (unaudited)

         

Issuance of common stock for cash, February ($0.15, per share) (unaudited)

     135,000      135        20,115     

Issuance of common stock for cash, February ($0.16, per share) (unaudited)

     318,420      318        50,629     

Issuance of common stock for cash, February ($0.17, per share) (unaudited)

     159,647      160        26,980     

Issuance of common stock for cash, February ($0.18, per share) (unaudited)

     10,000      10        1,790     

Issuance of common stock for cash, February ($0.23, per share) (unaudited)

     553,261      553        126,697     

Issuance of common stock for settlement of accounts payable, February ($0.261, per share) (unaudited)

     121,212      120        31,504     

Issuance of common stock for cash, February ($0.30, per share) (unaudited)

     101,000      101        30,199     

Issuance of common stock for cash, February ($0.333, per share) (unaudited)

     100,000      100        33,233     

Issuance of common stock for cash, February ($0.42, per share) (unaudited)

     33,000      33        13,827     

Issuance of common stock for services, February ($0.475, per share) (unaudited)

     14,000      14        6,636     

Issuance of common stock for services, February ($0.575, per share) (unaudited)

     20,000      20        11,480     

Issuance of common stock for cash, March ($0.18, per share) (unaudited)

     10,000      10        1,790     

Issuance of common stock for cash, March ($0.21, per share) (unaudited)

     4,761      5        995     

Issuance of common stock for cash, March ($0.28, per share) (unaudited)

     357,142      357        99,643     

Issuance of common stock for cash, March ($0.294, per share) (unaudited)

     6,803      7        1,993     

Issuance of common stock for cash, March ($0.30, per share) (unaudited)

     152,666      153        45,647     

Issuance of common stock for cash, March ($0.35, per share) (unaudited)

     6,000      6        2,094     

Issuance of common stock for cash, March ($0.37, per share) (unaudited)

     13,514      14        4,986     

Issuance of common stock for cash, March ($0.38, per share) (unaudited)

     50,000      50        18,950     

Issuance of common stock for cash, March ($0.39, per share) (unaudited)

     1,025      1        399     

Issuance of common stock for cash, March ($0.40, per share) (unaudited)

     3,000      3        1,197     

Issuance of common stock for settlement of accounts payable, March ($0.269 per share) (unaudited)

     80,000      80        21,420     

Issuance of common stock for settlement of accounts payable, March ($0.53, per share) (unaudited)

     3,774      4        1,996     

Issuance of common stock for services, March ($0.485, per share) (unaudited)

     150,000      150        72,600     

Issuance of common stock for services, March ($0.49, per share) (unaudited)

     600,000      600        293,400     

Write off uncollectible stock subscription receivable, March (unaudited)

          (155,000 )  

Value of the beneficial conversion feature for the issuance of convertible debt (unaudited)

          248,889     

Issuance of common stock for cash, April ($0.34, per share) (unaudited)

     40,000      40        13,560     

Issuance of common stock for cash, April ($0.36, per share) (unaudited)

     24,000      24        8,568     

Issuance of common stock for cash, April ($0.39, per share) (unaudited)

     1,795      2        698     

Issuance of common stock for cash, April ($0.42, per share) (unaudited)

     3,570      4        1,496     

Issuance of common stock for cash, April ($0.43, per share) (unaudited)

     2,500      2        1,073     

Issuance of common stock for cash, April ($0.44, per share) (unaudited)

     7,955      8        3,492     

Issuance of common stock for cash, April ($0.45, per share) (unaudited)

     10,000      10        4,490     

Issuance of common stock for services, April ($0.49, per share) (unaudited)

     55,000      55        26,895     

Issuance of common stock for cash, May ($0.35, per share) (unaudited)

     28,572      29        9,971     

Issuance of common stock for cash, May ($0.40, per share) (unaudited)

     14,000      14        5,586     

Issuance of common stock for cash, May ($0.44, per share) (unaudited)

     116,500      116        51,144     

Issuance of common stock for cash, June ($0.28, per share) (unaudited)

     25,000      25        6,975     

Issuance of common stock for cash, June ($0.30, per share) (unaudited)

     11,000      11        3,289     

Issuance of common stock for cash, June ($0.31, per share) (unaudited)

     1,000      1        309     

Issuance of common stock for cash, June ($0.32, per share) (unaudited)

     3,750      4        1,196     

Issuance of common stock for services, June ($0.38, per share) (unaudited)

     150,000      150        56,850     

Issuance of common stock for services, June ($0.41, per share) (unaudited)

     100,000      100        40,400     

Payment received for stock subscription receivable, June (unaudited)

         

Net loss for the six months ended June 30, 2010 (unaudited)

            (1,858,725 )
                               

Balance June 30, 2010 (unaudited)

     43,292,351    $ 43,291      $ 12,164,505      $ (13,422,648 )
                               
     Deferred
Non-Cash
Offering Costs
   Prepaid
Consulting
Services Paid
for with
Common Stock
    Subscription
Receivable
    Total  

Issuance of common stock and warrants for cash, January ($0.15, per share)

            30,000   

Issuance of common stock for services, February ($0.38, per shares)

            60,800   

Issuance of common stock for services, February ($0.26, per share)

            3,120   

Issuance of common stock for services, April ($0.12, per share)

        (20,000       5,200   

Issuance of common stock for services, May ($0.20, per share)

        (61,600       8,400   

Issuance of common stock for cash, May ($0.10, per share)

            14,500   

Issuance of common stock for cash, June ($0.10, per share)

            33,400   

Issuance of common stock for cash, June ($0.085, per share)

            12,750   

Issuance of common stock for cash, June ($0.08, per share)

            2,000   

Issuance of common stock for services, June ($0.16, per share)

        (48,000    

Amortization of prepaid services paid for with common stock

        110,767          110,767   

Value of the beneficial conversion feature for the issuance of convertible debt

            25,000   

Issuance of common stock for cash, July ($0.10, per share)

            37,951   

Issuance of common stock for services, July ($0.15, per share)

            4,500   

Issuance of common stock for cash, August ($0.10, per share)

            10,100   

Issuance of common stock for cash, September ($0.10, per share)

            36,900   

Issuance of common stock for cash, September ($0.08, per share)

            24,500   

Issuance of common stock for cash, October ($0.08, per share)

            300   

Issuance of common stock for cash, October ($0.09, per share)

            3,600   

Issuance of common stock for cash, October ($0.10, per share)

            2,700   

Issuance of common stock for cash, November ($0.08, per share)

            1,000   

Issuance of common stock for cash, November ($0.10, per share)

            3,240   

Issuance of common stock for services, December ($0.071, per share)

            888   

Issuance of common stock for cash, December ($0.08, per share)

            12,900   

Issuance of common stock for cash, December ($0.10, per share)

            2,630   

Issuance of common stock for services, December ($0.09, per share)

            900   

Issuance of common stock for services, December ($0.13, per share)

        (65,000    

Issuance of common stock for services, December ($0.17, per share)

            2,125   

Issuance of common stock for services, December ($0.1954, per share)

            19,535   

Issuance of common stock for conversion of notes, December ($0.08, per share)

            2,000   

Issuance of common stock for conversion of notes, December ($0.07, per share)

            20,000   

Issuance of common stock for conversion of notes, December ($0.07, per share)

            15,000   

Issuance of warrants for services, December

            29,578   

Net loss

            (982,677
                               

Balance December 31, 2008

        (101,333     (167,090     (1,438,841

Amortization of prepaid services paid for with common stock

        571,625          571,625   

Issuance of common stock for conversion of notes, January ($0.06, per share)

            15,000   

Issuance of common stock for cash, January ($0.50, per share)

            99   

Issuance of common stock for cash, January ($0.07, per share)

            20,650   

Issuance of common stock for cash, January ($0.08, per share)

            1,000   

Issuance of common stock for cash, January ($0.10, per share)

            25,500   

Issuance of common stock for conversion of notes, February ($0.06, per share)

            10,000   

Issuance of common stock for conversion of notes, February ($0.09, per share)

            20,000   

Issuance of common stock for cash, February ($0.07, per share)

            36,885   

Issuance of common stock for cash, February ($0.10, per share)

            11,050   

Issuance of common stock for services, March ($0.11, per share)

        (33,000    

Issuance of common stock for conversion of notes, March ($0.07, per share)

            10,000   

Issuance of common stock for conversion of notes, March ($0.08, per share)

            25,000   

Issuance of common stock for cash, March ($0.07, per share)

            20,250   

Issuance of common stock for cash, March ($0.10, per share)

            1,000   

Value of the beneficial conversion feature for the issuance of convertible debt

            149,750   

Issuance of warrants for services, January

            36,644   

Issuance of common stock for services, April ($0.09, per share)

            1,800   

Issuance of common stock for services, April ($0.10, per share)

        (50,000       1,000   

Issuance of common stock for cash, April ($0.07, per share)

            19,250   

Issuance of common stock for cash, April ($0.10, per share)

            2,950   

Issuance of common stock for conversion of notes, April ($0.07, per share)

            35,000   

Issuance of common stock for conversion of notes, April ($0.06, per share)

            10,000   

Issuance of common stock for conversion of notes, May ($0.06, per share)

            25,000   

Issuance of common stock for services, May ($0.09, per share)

            5,150   

Issuance of common stock for cash, May ($0.07, per share)

            5,390   

Issuance of common stock for conversion of notes, June ($0.06, per share)

            25,000   

Issuance of common stock for conversion of notes, June ($0.07, per share)

            55,000   

Issuance of common stock and warrants for cash, June ($0.07, per share)

            40,750   

Issuance of common stock for cash, June ($0.08, per share)

            34,982   

Issuance of common stock for cash, July ($0.07, per share)

            68,337   

Issuance of common stock for cash, July ($0.065, per share)

            14,008   

Issuance of common stock for cash, July ($0.10, per share)

            2,000   

Issuance of common stock for cash, July ($0.26, per share)

            1,000   

Issuance of common stock for conversion of notes, July ($0.065, per share)

            10,000   

Issuance of common stock for cash, August ($0.07, per share)

            9,100   

Issuance of common stock for cash, August ($0.085, per share)

            5,000   

Issuance of common stock and warrants for cash, August ($0.10, per share)

            148,000   

Issuance of common stock for cash, August ($0.11, per share)

            1,100   

Issuance of common stock for cash, August ($0.12, per share)

            12,000   

Issuance of common stock for cash, August ($0.24, per share)

            36,600   

Issuance of common stock for cash, August ($0.26, per share)

            36,500   

Issuance of common stock for cash, August ($0.28, per share)

            4,700   

Issuance of common stock for cash, August ($0.30, per share)

            49,200   

Issuance of common stock for cash, August ($0.33, per share)

            2,100   

Issuance of common stock for services, August ($0.09, per share)

        (108,000    

Issuance of common stock for services, August ($0.25, per share)

        (25,000    

Issuance of common stock for services, August ($0.10, per share)

        (5,000    

Issuance of common stock for services, August ($0.16, per share)

        (16,000    

Issuance of common stock for cash, September ($0.10, per share)

            2,000   

Issuance of common stock for cash, September ($0.20, per share)

            8,000   

Issuance of common stock for cash, September ($0.22, per share)

            63,000   

Issuance of common stock for cash, September ($0.23, per share)

            29,000   

Issuance of common stock for cash, September ($0.235, per share)

            7,000   

Issuance of common stock for cash, September ($0.25, per share)

            11,500   

Issuance of common stock for cash, September ($0.26, per share)

            21,900   

Issuance of common stock for cash, September ($0.30, per share)

            6,400   

Issuance of common stock for cash, September ($0.325, per share)

            400   

Issuance of common stock for cash, September ($0.33, per share)

            22,110   

Issuance of common stock for cash, September ($0.375, per share)

            3,750   

Issuance of common stock for services, September ($0.47, per share)

            47,000   

Issuance of common stock for services, September ($0.61, per share)

        (305,000    

Issuance of common stock for services, September ($0.50, per share)

        (2,500    

Issuance of common stock and exercise of warrants for a reduction in a payable, September ($0.10, per share)

            35,000   

Issuance of common stock options, July

            40,706   

Issuance of common stock for cash, October ($0.22, per share)

            2,500   

Issuance of common stock for cash, October ($0.18, per share)

            44,300   

Issuance of common stock for cash, October ($0.17, per share)

            4,400   

Issuance of common stock for cash, November ($0.18, per share)

            17,780   

Issuance of common stock for cash, November ($0.20 per share)

            33,500   

Issuance of common stock for cash, December ($0.19, per share)

            475   

Issuance of common stock for cash, December ($0.16, per share)

          (16,000 )  

Issuance of common stock for cash, December ($0.17, per share)

          (1,000 )  

Issuance of common stock for cash, December ($0.18, per share)

          (12,000 )     6,380   

Issuance of common stock for cash, December ($0.20, per share)

            2,000   

Issuance of common stock for cash, December ($0.30, per share)

            330,000   

Issuance of common stock for services, October ($0.42, per share)

            42,000   

Issuance of common stock for services, December ($0.38, per share)

        (5,700 )       125,400   

Issuance of common stock for conversion of notes, December ($0.1284, per share)

            192,000   

Value of the beneficial conversion feature for the issuance of convertible debt

            100,921   

Issuance of warrants

            10,161   

Payment on stock subscription receivable

          90        90   

Net loss

            (2,271,917
                               

Balance, December 31, 2009

        (79,908     (196,000     (885,715

Payment on stock subscription receivables (unaudited)

          29,000        29,000   

Amortization of prepaid services paid for with common stock (unaudited)

        316,112          316,112   

Issuance of common stock for cash, February ($0.15, per share) (unaudited)

            20,250   

Issuance of common stock for cash, February ($0.16, per share) (unaudited)

            50,947   

Issuance of common stock for cash, February ($0.17, per share) (unaudited)

            27,140   

Issuance of common stock for cash, February ($0.18, per share) (unaudited)

            1,800   

Issuance of common stock for cash, February ($0.23, per share) (unaudited)

            127,250   

Issuance of common stock for settlement of accounts payable, February ($0.261, per share) (unaudited)

            31,624   

Issuance of common stock for cash, February ($0.30, per share) (unaudited)

            30,300   

Issuance of common stock for cash, February ($0.333, per share) (unaudited)

            33,333   

Issuance of common stock for cash, February ($0.42, per share) (unaudited)

            13,860   

Issuance of common stock for services, February ($0.475, per share) (unaudited)

        (950       5,700   

Issuance of common stock for services, February ($0.575, per share) (unaudited)

        (4,792       6,708   

Issuance of common stock for cash, March ($0.18, per share) (unaudited)

            1,800   

Issuance of common stock for cash, March ($0.21, per share) (unaudited)

            1,000   

Issuance of common stock for cash, March ($0.28, per share) (unaudited)

          (100,000  

Issuance of common stock for cash, March ($0.294, per share) (unaudited)

            2,000   

Issuance of common stock for cash, March ($0.30, per share) (unaudited)

            45,800   

Issuance of common stock for cash, March ($0.35, per share) (unaudited)

            2,100   

Issuance of common stock for cash, March ($0.37, per share) (unaudited)

            5,000   

Issuance of common stock for cash, March ($0.38, per share) (unaudited)

            19,000   

Issuance of common stock for cash, March ($0.39, per share) (unaudited)

            400   

Issuance of common stock for cash, March ($0.40, per share) (unaudited)

            1,200   

Issuance of common stock for settlement of accounts payable, March ($0.269 per share) (unaudited)

            21,500   

Issuance of common stock for settlement of accounts payable, March ($0.53, per share) (unaudited)

            2,000   

Issuance of common stock for services, March ($0.485, per share) (unaudited)

            72,750   

Issuance of common stock for services, March ($0.49, per share) (unaudited)

        (245,000       49,000   

Write off uncollectible stock subscription receivable, March (unaudited)

          155,000     

Value of the beneficial conversion feature for the issuance of convertible debt (unaudited)

            248,889   

Issuance of common stock for cash, April ($0.34, per share) (unaudited)

            13,600   

Issuance of common stock for cash, April ($0.36, per share) (unaudited)

            8,592   

Issuance of common stock for cash, April ($0.39, per share) (unaudited)

            700   

Issuance of common stock for cash, April ($0.42, per share) (unaudited)

            1,500   

Issuance of common stock for cash, April ($0.43, per share) (unaudited)

            1,075   

Issuance of common stock for cash, April ($0.44, per share) (unaudited)

            3,500   

Issuance of common stock for cash, April ($0.45, per share) (unaudited)

            4,500   

Issuance of common stock for services, April ($0.49, per share) (unaudited)

            26,950   

Issuance of common stock for cash, May ($0.35, per share) (unaudited)

            10,000   

Issuance of common stock for cash, May ($0.40, per share) (unaudited)

            5,600   

Issuance of common stock for cash, May ($0.44, per share) (unaudited)

            51,260   

Issuance of common stock for cash, June ($0.28, per share) (unaudited)

            7,000   

Issuance of common stock for cash, June ($0.30, per share) (unaudited)

            3,300   

Issuance of common stock for cash, June ($0.31, per share) (unaudited)

            310   

Issuance of common stock for cash, June ($0.32, per share) (unaudited)

            1,200   

Issuance of common stock for services, June ($0.38, per share) (unaudited)

            57,000   

Issuance of common stock for services, June ($0.41, per share) (unaudited)

            40,500   

Payment received for stock subscription receivable, June (unaudited)

          100,000        100,000   

Net loss for the six months ended June 30, 2010 (unaudited)

            (1,858,725
                               

Balance June 30, 2010 (unaudited)

   $      $ (14,538   $ (12,000   $ (1,241,390
                               

 

10


Table of Contents

Turbine Truck Engines, Inc.

(A Development Stage Company)

Statements of Cash Flows

 

    For the Six Months Ended        
    June 30,
2010
    June 30,
2009
    Period
November 27, 2000
(Date of Inception)
through
June 30,  2010
 
    (unaudited)     (unaudited)     (unaudited)  

OPERATING ACTIVITIES:

     

Net loss

  $ (1,858,725   $ (751,289   $ (13,422,648

Adjustments to reconcile net loss to net cash used in operating activities:

     

Common stock and long-term debt issued for acquisition of license agreement

        2,735,649   

Common stock issued for services and amortization of common stock issued for services

    574,720        117,999        3,585,768   

Options and warrants issued to employees, directors and consultants

      36,644        614,287   

Contribution from shareholder

        188,706   

Amortization of beneficial conversion feature

    36,590        131,098        309,348   

Amortization of deferred loan costs

      1,955        24,750   

Write off of deferred offering costs

        119,383   

Write off of deferred non cash offering costs

        49,120   

Depreciation

    2,116        3,937        44,387   

Amortization of discount on notes payable

        33,858   

Increase in prepaid expenses

    (108,480       (118,480

Increase (decrease) in:

     

Accounts payable

    82,821        (25,865     257,341   

Accrued expenses

    58,410        (6,000 )     327,660   

Accrued payroll

    (45,572 )     19,786        234,837   

Accrued royalty fees

    125,000        125,000        1,343,167   

Accrued interest

    369        (234 )     14,718   
                       

Net cash used by operating activities

    (1,132,751     (346,969 )     (3,658,149
                       

INVESTING ACTIVITIES:

     

Issuance of notes receivable from stockholders

        (23,000

Advances to related party

        805   

Repayment of notes receivable from stockholders

        22,095   

Purchase of fixed assets

    (4,459 )       (49,929
                       

Net cash used by investing activities

    (4,459 )       (50,029
                       

FINANCING ACTIVITIES:

     

Repayment of stockholder advances

      (23,854     (157,084

Advances from stockholders

        266,152   

Increase in deferred offering costs

        (194,534

Proceeds from issuance of common stock

    624,316        219,754        3,329,851   

Proceeds from exercise of options

        45,000   

Debt issuance costs

        (19,750

Repayment of convertible notes payable

      (10,000 )     (23,000

Proceeds from issuance of convertible notes payable

    250,000        200,000        802,250   
                       

Net cash provided by financing activities

    874,316        385,900        4,048,885   
                       

NET (DECREASE) INCREASE IN CASH

    (262,894 )     38,931        340,707   

CASH, BEGINNING OF PERIOD

    603,601        2,857     
                       

CASH, END OF PERIOD

  $ 340,707      $ 41,788      $ 340,707   
                       

The accompanying notes are an integral part of the financial statements

 

11


Table of Contents
    For the Six Months Ended    
    June 30,
2010
  June 30,
2009
  Period
November 27, 2000
(Date of Inception)
through
June 30, 2010
    (unaudited)   (unaudited)   (unaudited)

Supplemental disclosures of cash flow information and noncash investing and financing activities:

     

Cash paid for interest

  $ 0   $ 7,878   $ 21,477
                 

Subscription receivable for issuance of common stock

  $ 0   $ 0   $ 29,090
                 

Option to acquire license for issuance of common stock

  $ 0   $ 0   $ 10,000
                 

Deferred offering costs netted against issuance of common stock under private placement

  $ 0   $ 0   $ 33,774
                 

Deferred offering costs netted against issuance of common stock

  $ 0   $ 0   $ 41,735
                 

Value of beneficial conversion feature of notes payable

  $ 0   $ 0   $ 19,507
                 

Deferred offering costs in connection with private placement

  $ 0   $ 0   $ 74,850
                 

Application of amount due from shareholder against related party debt

  $ 0   $ 0   $ 8,099
                 

Amortization of offering costs related to stock for services

  $ 0   $ 0   $ 25,730
                 

Settlement of notes payable in exchange for common stock

  $ 0   $ 0   $ 356,466
                 

Common stock issued in exchange for services

  $ 312,150   $ 0   $ 2,137,450
                 

Common stock issued in exchange for accrued royalties

  $ 0   $ 0   $ 416,667
                 

Receivable issued for exercise of common stock options

  $ 0   $ 0   $ 167,000
                 

Common stock issued in exchange for fixed assets

  $ 0   $ 0   $ 5,000
                 

Beneficial conversion feature on convertible notes

  $ 248,889   $ 149,750   $ 524,561
                 

Conversion of convertible debt to equity (5,633,540 shares since inception)

  $ 0   $ 230,000   $ 469,000
                 

Write off uncollectible stock subscription receivable

  $ 155,000   $ 0   $ 155,000
                 

Common stock issued for accounts payable

  $ 55,125   $ 0   $ 90,125
                 

The accompanying notes are an integral part of the financial statements.

 

12


Table of Contents

Turbine Truck Engines, Inc.

(A Development Stage Enterprise)

Notes to Financial Statements

For the Six Months Ended June 30, 2010 and 2009 (unaudited)

and the Period November 27, 2000 (Date of Inception)

through June 30, 2010 (unaudited)

1. Background Information

Turbine Truck Engines, Inc. (the “Company”) is a development stage enterprise that was incorporated in the state of Delaware on November 27, 2000. To date, the Company’s activities have been limited to raising capital, organizational matters, and the structuring of its business plan. The corporate headquarters is located in DeLand, Florida. The Company’s planned line of business will be the design, development, and testing of turbine truck engine technology licensed through Alpha Engines Corporation (“Alpha”). Alpha owns the patents to a new gas turbine engine system called Detonation Cycle Gas Turbine Engine. If the Company can successfully demonstrate a highway truck engine using the technology, the Company intends to form a joint venture with a major heavy duty highway truck manufacturer to manufacture, market, and sell turbine truck engines for use in heavy duty highway trucks throughout the United States.

The Company entered into a Cooperative Agreement (the “Agreement”) dated April 27, 2010 with Beijing Royal Aerospace Facilities Co., Ltd., a PRC corporation (“Beijing Royal”), for the purpose of providing a framework for the collaboration between the two companies on the development and commercialization of the Detonation Cycle Gas Turbine Engine (“DGCT”) specifically for application to heavy duty trucks, with Beijing Royal to be the Company’s exclusive development partner with respect to 300 – 600 HP DCGT in the People’s Republic of China. The terms of the agreement replace the terms of the agreement dated January 21, 2009 with Aerospace Machinery and Electric Co., Ltd. The terms of the agreement call for the Company to complete the design plan for the 540 HP DCGT engine within three (3) months and submit it to Beijing Royal for further submission to PRC regulatory authorities for review and approval. The parties have agreed to execute a more detailed joint development contract upon the approval of the DCGT project by PRC regulatory authorities to specify the details of their cooperation on the development of the DCGT.

The Agreement further provides that all documentation provided by the Company to Beijing Royal at this stage shall be solely for the purpose of making a funding application, and that any further use shall be by agreement of the parties. The intellectual properties jointly developed under the Agreement would be owned by both parties equally.

The Company entered into various strategic alliance agreements with foreign companies during the year ended December 31, 2009. During the six months ended June 30, 2010, there were no material changes, as disclosed in the December 31, 2009 10-K, to these agreements that would warrant further disclosure in these financial statements.

2. Financial Statements

In the opinion of management, all adjustments consisting only of normal recurring adjustments necessary for a fair statement of (a) the results of operations for the three and six month periods ended June 30, 2010 and 2009 and the period November 27, 2000 (Date of Inception) through June 30, 2010, (b) the financial position at June 30, 2010 and December 31, 2009, and (c) cash flows for the six month periods ended June 30, 2010 and 2009, and the period November 27, 2000 (Date of Inception) through June 30, 2010, have been made.

The unaudited financial statements and notes are presented as permitted by Form 10-Q. Accordingly, certain information and note disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted. The accompanying financial statements and notes should be read in conjunction with the audited financial statements and notes of the Company for the fiscal year ended December 31, 2009. The results of operations for the three and six month periods ended June 30, 2010 are not necessarily indicative of those to be expected for the entire year.

 

13


Table of Contents

3. Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. For the three and six months ended June 30, 2010 and since November 27, 2000 (date of inception) through June 30, 2010, the Company has had net losses of $1,195,747, $1,858,725 and $13,422,648, respectively. As of June 30, 2010, the Company has not emerged from the development stage. In view of these matters, the Company’s ability to continue as a going concern is dependent upon the Company’s ability to begin operations and to achieve a level of profitability. Since inception, the Company has financed its activities principally from the sale of public equity securities. The Company intends on financing its future development activities and its working capital needs largely from the sale of public equity securities, joint venture agreements and other traditional financing sources, including term notes and proceeds from sub-licensing agreements until such time that funds provided by operations are sufficient to fund working capital requirements. The financial statements of the Company do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern.

4. Commitments and Contingencies

Once the Company becomes operational it will be obligated to pay production royalties to Alpha at the rate of eight percent of net sales of the Detonation Cycle Gas Turbine Engine. The minimum royalty amount is $250,000 per year, and the Company began accruing for the fee in February 2005. The royalty fee will be reduced by production royalties paid. Unpaid royalty fees amounted to $926,500 and $801,500 as of June 30, 2010 and December 31, 2009, respectively. During the three and six months ended June 30, 2010, the Company determined that it is probable that accrued royalty fees will be satisfied through the issuance of common stock, accordingly, the liability was classified as a long-term liability as of June 30,2010.

In March 2010, the Company issued 600,000 shares of common stock, valued at $294,000, to a consultant for various services to be performed through April 30, 2010. For the three and six months ended June 30, 2010, the Company amortized $245,000 and $294,000 into expense related to these services.

The Company entered into a Share Purchase Agreement in May 2010 with Hua Tec Enterprise Co. LTD, an international company incorporated in the Independent State of Samoa. HUA TEC owns all of the issued and outstanding shares of Guandong Kingtec Electrical Co., LTD, a wholly foreign owned enterprise established under the laws of the People’s Republic of China. Kingtec is primarily engaged in the business of manufacturing and selling automobile starters, generators and other accessories in the People’s Republic of China. The closing of this purchase agreement is contingent upon certain conditions as outlined in the agreement.

The Company has also entered into a Strategic Alliance Agreement with Falcon Power Co., Ltd., a Taiwan limited by share company for the purpose of collaborating on the engineering, technical development and commercialization of the Detonation Cycle Gas Turbine Engine (“DCGT”) and the Hydrogen Generator specifically for application opportunities in Taiwan, China and other markets. The terms of the Agreement call for Falcon and TTE to collaborate on modifying and applying the DCGT engine technology to integrate with Falcon’s Hydrogen Generator, for the purpose of allowing Falcon to be able to design a suitable device for the anticipated Joint Venture.

As part of the Agreement, the parties anticipate a mutually agreed stock swap between the two publically traded companies will be pursued. No agreement has been reached as to this proposed stock swap through the date of filing.

The Company also entered into an Exclusive Agency Agreement with Falcon Power Co., Ltd. The Agreement grants TTE the exclusive right to resell Falcons’ Products in the State of New York, State of Florida, State of Oklahoma and State of Colorado. As part of this agreement the company is to pay an Agency fee to Falcon in the amount of $1,000,000, with $100,000 due within three days of the agreement and the reminder to be paid within three month following execution of the agreement. As of June 30, 2010 the company has paid $100,000 of the Agency fee, which has been included as a prepaid agency fee on the accompanying balance sheet and will be amortized over the five year term of the agreement.

 

14


Table of Contents

5. Related Party Transactions

During the year ended December 31, 2003, the Company signed a note payable with a related party in the amount of $15,000. The balance at June 30, 2010 is $1,901. This note payable was unsecured, non-interest bearing and has no specific repayment terms, however, payment is not expected prior to December 31, 2010.

As of June 30, 2010 and December 31, 2009, accounts payable included 28,400 and $42,550, respectively, for various accounting services, due to the Company’s Chief Accounting Officer who is also a director of the Company.

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

6. Convertible Notes Payable

In June 2008, the Company issued a Convertible Debenture to Golden Gate Investors, Inc. (the “holder”) in the principal amount of $1,000,000, dated June 6, 2008, pursuant to Rule 506 promulgated by the Securities and Exchange Commission, for the purpose of accessing necessary funding to continue operations.

Pursuant to the terms of the Debenture, the related Securities Purchase Agreement, Secured Promissory Note and Stock Pledge Agreement, each executed in connection therewith, the Company has issued its $1,000,000 Convertible Debenture (the “Debenture”) for the payment by Golden Gate of $100,000 in cash and the execution and delivery by Golden Gate of a $900,000 Secured Promissory Note of even date (the “Note”), bearing interest at 8% per annum. For financial statement purposes, these items have been netted, as the Company has the legal right of offset.

The Debenture bears interest at 7.75% per annum, payable monthly, maturing June 30, 2012, and was secured by a Continuing Personal Guaranty, whereby the Company’s Chief Executive Officer and majority shareholder guaranteed the Company’s obligations for a period of eight months. Originally, the Debenture Holder was entitled to convert into common stock of the company at the conversion price equal to the lesser of (i) $0.50, or (ii) 80% of the average of the 3 lowest Volume Weighted Average Prices during the 20 Trading Days prior to Holder’s election to convert, as such terms are defined in the Debenture. The Holder can only convert that amount of the Debenture that has actually been paid for by either cash at closing or principal pre-payments made on the Promissory Note.

During 2010 and since inception, the Company has drawn $250,000 and $745,000 in proceeds related to the note, respectively. During 2010 and since inception, the Holder has converted $0 and $469,000 in convertible notes into 0 and 5,633,540 common shares, respectively.

In December 2009, the convertible debenture agreement was amended. As a result of the amendment, effective January 15, 2010, the conversion price has a $0.15 fixed floor price that limits the number of common shares upon conversion to an amount that is substantially below the Company’s authorized common shares that can be issued. Additionally, the penalty associated with the default provision to maintain timely filings of all reports required by the Securities and Exchange Commission was removed. Lastly, the default provision related to the interest rate adjustment indexed to changes in the Company’s common stock was removed. In the event of certain defaults, the Company would pay a default fixed interest rate of 9.75% per annum.

Based on the amended agreement, the Company determined that all potential derivative features associated with the original debenture agreement were removed.

The following table presents the activity during 2010 related to the debenture:

 

Principal balance of the debenture

  $   253,000   

Less reduction for:

 

Intrinsic value of beneficial conversion feature

    (251,803
       

Recorded at closing

  $ 1,197   

Amounts converted into common stock

 

Amortization of beneficial conversion feature (interest expense) through June 30, 2010

    37,773   
       

Carrying value at June 30, 2010

  $ 37,787   
       

 

15


Table of Contents

7. Stock Options and Warrants

The Company issues common stock to consultants for various services. Costs for these transactions are measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. The value of the common stock is measured at the earlier of (i) the date at which a firm commitment for performance by the counterparty to earn the equity instruments is reached or (i) the date at which the counterparty’s performance is complete. For the three and six month periods ended June 30, 2010 and 2009 the Company recognized $284,488, $377,521, $59,690 and $110,047, respectively, in consulting expenses related to stock issued for these services.

Stock-based compensation cost recognized during the three and six months ended June 30, 2010 and 2009 includes compensation cost for all share-based payments granted prior to, but not yet vested, as of January 1, 2006 and compensation cost for all share-based payments granted subsequent to January 1, 2006, based on their respective grant date fair values estimated in accordance with U.S. GAAP. The Company recognizes compensation expense on a straight-line basis over the requisite service period.

The aggregate intrinsic value of options outstanding and exercisable at June 30, 2010, based on the Company’s closing stock price of $0.37 was $259,000. The aggregate intrinsic value of options outstanding and exercisable at June 30, 2009, based on the Company’s closing stock price of $0.09 was $0. Intrinsic value is the amount by which the fair value of the underlying stock exceeds the exercise price of the options.

The Company’s 2006 Incentive Compensation Plan authorizes up to 2,000,000 shares of common stock to any employee or Consultant during any one calendar year for grants of both incentive stock options and non-qualified stock options to key employees, officers, directors, and consultants. Options granted under the Plan must be exercised within a term determined by the Board of Directors. The Option Price payable for the shares of Common Stock covered by any Option shall be determined by the Board of Directors, provided that such exercise price shall not be less than 100% of the Fair Market Value of a Share on the date of grant of the Option and shall not, in any event, be less than the par value of a Share on the date of grant of the Option. The Company granted 0 and 400,000 common stock options to consultants and directors and recognized $0 and $36,644 in compensation expense for the six month periods ended June 30, 2010 and 2009, respectively.

The Company’s 2008 Incentive Compensation Plan authorizes up to 5,000,000 shares of common stock to restrictions on resale upon the purchasers of the Stock from the employees or the consultants, unless contained in the written award approved by the Board of Directors. As of June 30, 2010, no shares have been issued under this plan.

The fair value of each option under the 2006 Incentive Compensation Plan was estimated on the date of grant using the Black Scholes model that uses assumptions noted in the following table. Expected volatility is based on the Company’s historical market price at consistent points in periods equal to the expected life of the options. The expected term of options granted is based on the Company’s historical experience. The risk-free interest rate for the periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The Company estimates forfeitures; both at the date of grant as well as throughout the requisite service period, based on the Company’s historical experience and future expectations.

During the six months ended June 30, 2010 and 2009, the Company issued 33,000 and 838,413 warrants, respectively, in conjunction with the issuance of common stock. The warrants entitle the holder to purchase 33,000 and 838,413 shares of the Company’s common stock, respectively, at any time, at exercise prices of $0.75 and ranging from $0.10 – $1.00 per share, respectively. The warrants issued during 2009 were an extension of the original term of warrants previously issued with stock. The fair value of the modification was not material to the financial statements.

 

16


Table of Contents

The following table represents our stock option and warrant activity for the six months ended June 30, 2010:

 

     Shares     Range of Exercise
Prices
   Weighted Average
Grant Date Fair
Value

Outstanding and Exercisable

       

Outstanding at December 31, 2009

   2,007,413      $ 0.10 – 2.00   

Options and warrants granted

   33,000      $ 0.75    $ 0.37

Options and warrants exercised

     $     

Options and warrants cancelled or expired

   (100,000   $ 0.30   
           

Outstanding at June 30, 2010

   1,940,413      $ 0.10 – $2.00   

Exercisable at June 30, 2010

   1,940,413      $ 0.10 – $2.00   

The following table summarizes information about options and warrants outstanding and exercisable as of June 30, 2010:

 

     Outstanding Options and Warrants    Exercisable Options and Warrants

Range of
Exercise Price

   Number
Outstanding
   Weighted
Average
Remaining Life
   Weighted
Average
Price
   Weighted
Average
Remaining Life
   Number
Exercisable
   Weighted
Average
Price
$ 0.10 – $2.00    1,940,413    4.04 Years    $ 0.49    4.04 Years    1,940,413    $ 0.49

Net cash proceeds from the exercise of options and warrants were $0 for each of the six months ended June 30, 2010 and 2009, respectively.

8. Earnings per Share

Basic loss per share is computed by dividing net loss attributable to common stockholders by the weighted average common shares outstanding for the period. Diluted loss per share is computed giving effect to all potentially dilutive common shares. Potentially dilutive common shares may consist of incremental shares issuable upon the exercise of stock options and warrants and the conversion of notes payable to common stock. In periods in which a net loss has been incurred, all potentially dilutive common shares are considered antidilutive and thus are excluded from the calculation. For the three and six month periods ended June 30, 2010 and 2009 and for the period from November 27, 2000 (Date of Inception) through June 30, 2010, the Company had 1,940,413, 1,940,413, 2,027,913, 2,027,913 and 1,940,413 potentially dilutive common stock options and warrants, respectively, which were not included in the computation of loss per share.

9. Subsequent Event

The Company entered into a Share Subscription Agreement (the “Agreement”) dated July 6, 2010 with Falcon Power Co., Ltd., a Taiwan limited by share company (“Falcon”) wherein the Company and Falcon each agree to subscribe to each other’s common stock. Pursuant to the terms of the Agreement, on the Closing Date, Falcon and the Company will each subscribe to the common shares of the other, with each company purchasing One Million Five Hundred Thousand Dollars US (US $1,500,000) worth of restricted shares.

The Closing Date shall be set by mutual agreement of the parties. The shares will be subject to a restriction on resale for a period of three (3) years. As of the filing date, the sale has not been consummated and no closing date has been set.

In July 2010, in connection with the Convertible Notes Payable discussed in Note 6, the holder’s converted $50,000 of convertible notes and received 207,727 shares of common stock. The conversion price $0.24 per share.

In August 2010, the Company entered into an employment agreement with the Company’s Vice President. Under the employment agreement, the employment term commences on January 1, 2010 through August 2011 and an annual base salary of $225,000. Additional performance-based bonuses are provided for up to 300,000 shares of the Company’s common stock, with the value not to exceed $200,000.

In August 2010, the Company entered into an employment agreement with the Company’s Chief Executive Officer. Under the employment agreement, the employment term runs through August 2013 and includes an annual base salary of $225,000. Additional performance-based bonuses are provided for up to 400,000 shares of the Company’s common stock, with the value not to exceed $500,000.

 

17


Table of Contents

PART I—FINANCIAL INFORMATION

 

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

THIS FILING CONTAINS FORWARD-LOOKING STATEMENTS. THE WORDS “ANTICIPATED,” “BELIEVE,” “EXPECT,” “PLAN,” “INTEND,” “SEEK,” “ESTIMATE,” “PROJECT,” “WILL,” “COULD,” “MAY,” AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS. THESE STATEMENTS INCLUDE, AMONG OTHERS, INFORMATION REGARDING FUTURE OPERATIONS, FUTURE CAPITAL EXPENDITURES, AND FUTURE NET CASH FLOW. SUCH STATEMENTS REFLECT THE COMPANY’S CURRENT VIEWS WITH RESPECT TO FUTURE EVENTS AND FINANCIAL PERFORMANCE AND INVOLVE RISKS AND UNCERTAINTIES, INCLUDING, WITHOUT LIMITATION, GENERAL ECONOMIC AND BUSINESS CONDITIONS, CHANGES IN FOREIGN, POLITICAL, SOCIAL, AND ECONOMIC CONDITIONS, REGULATORY INITIATIVES AND COMPLIANCE WITH GOVERNMENTAL REGULATIONS, THE ABILITY TO ACHIEVE FURTHER MARKET PENETRATION AND ADDITIONAL CUSTOMERS, AND VARIOUS OTHER MATTERS, MANY OF WHICH ARE BEYOND THE COMPANY’S CONTROL. SHOULD ONE OR MORE OF THESE RISKS OR UNCERTAINTIES OCCUR, OR SHOULD UNDERLYING ASSUMPTIONS PROVE TO BE INCORRECT, ACTUAL RESULTS MAY VARY MATERIALLY AND ADVERSELY FROM THOSE ANTICIPATED, BELIEVED, ESTIMATED, OR OTHERWISE INDICATED. CONSEQUENTLY, ALL OF THE FORWARD-LOOKING STATEMENTS MADE IN THIS FILING ARE QUALIFIED BY THESE CAUTIONARY STATEMENTS AND THERE CAN BE NO ASSURANCE OF THE ACTUAL RESULTS OR DEVELOPMENTS.

The following discussion and analysis of our financial condition and plan of operations should be read in conjunction with our financial statements and related notes appearing elsewhere herein. This discussion and analysis contains forward-looking statements including information about possible or assumed results of our financial conditions, operations, plans, objectives and performance that involve risk, uncertainties and assumptions. The actual results may differ materially from those anticipated in such forward-looking statements. For example, when we indicate that we expect to increase our product sales and potentially establish additional license relationships, these are forward-looking statements. The words expect, anticipate, estimate or similar expressions are also used to indicate forward-looking statements.

OVERVIEW OF THE COMPANY

We are a development-stage company and not yet generating any revenues. We expect to continue the commercialization of our Detonation Cycle Gas Turbine Engine (“DCGT”) technology. The licensor of the acquired technology has passed the research and development phase and has designed a working prototype. We need to redesign an engine for our application based on this proven Core Technology. We are relying on AbM Engineering in collaboration with AMEC to design, construct and test a 540 horsepower engine prototype for our licensed application (see “Business of the Company”, “Our Product.”).

The financing for our development activities to date has come from the sale of common stock. We intend to finance our future development activities and working capital needs largely from the sale of public equity securities with additional funding from a private placement or secondary offering of up to $10 million and other traditional financing sources, including term notes and proceeds from sub-licensing agreements until such time that funds provided by operations are sufficient to fund working capital requirements.

Since we have had a limited history of operations, we anticipate that our quarterly results of operations will fluctuate significantly for the foreseeable future. We believe that period-to-period comparisons of our operating results should not be relied upon as predictive of future performance. Our prospects must be considered in light of the risks,

 

18


Table of Contents

expenses and difficulties encountered by companies at an early stage of development, particularly companies commercializing new and evolving technologies such as the DCGT. In July 2002, we acquired the license for the DCGT technology for the manufacture and marketing of heavy-duty highway truck engine.

During September 2009, the Company entered into a letter of intent to form a joint venture with Genes Guohao Technology Co., Ltd. (“Guohao”), a Chinese corporation. The agreement stipulates that the companies will collaborate on modifying the Company’s DCGT engine for coal fired power generation applications utilizing Dry Coal Slurry Fuel. The agreement specifies that Guohao will fully fund the project and commit its industrial, engineering, and technical development resources to its success. Guohao has committed $300,000 U.S. dollars to initially fund the project. The agreement also stipulates that the Company and Guohao will form a joint venture whereby Guohao will be licensed to manufacture, market and sell the DCGT coal fired engines in Mongolia. The Joint Venture Letter of Intent further specifies that Guohao, as part of the Joint Venture Agreement, will form a new corporation, and that the Company will license the DCGT to the new entity for a 49% stake in the newly formed corporation. As of June 30, 2010 Abm engineering has been conducting research into the use of coal slurries as a fuel source for the DCGT, under our agreements scope of work. Upon completion Abm intends to conduct preliminary testing to demonstrate its viability. As of June 30, 2010, a joint venture agreement has not been entered into.

The Company entered into a Strategic Alliance Agreement dated August 10, 2009 with Tianjin Out Sky Technology, Co. Ltd., a Chinese corporation (“TIANJIN”). The Company entered into the Agreement for the purpose of collaborating on the engineering, technical development and commercialization of the DCGTE for motorcycle engine applications; and for the subsequent manufacturing, marketing and sale of the DCGT engines in China once commercial market potential has been achieved.

The Agreement provides in material part that the Company will (a) provide TIANJIN with milestones and get them up to speed on the current status of the development; (b) file for patent protection in China under Patent Cooperation Treaty; and (c) file for new engine application with World Intellectual Property Organization. In addition, the Company and TIANJIN intend to form a joint venture whereby TIANJIN will be licensed to manufacture, market and sell DCGT motorcycle engine in China.

TIANJIN and the Company have agreed to work in good faith towards modifying the engine for motorcycle engine applications. TIANJIN has committed to fund up to 10 million US dollars over the next 18 months for project development costs and will work with the Company’s development partners to aid in the development of a viable motorcycle application for the DCGT. TIANJIN will also purchase up to 5% of the Company’s common stock on the open market.

As of June 30, 2010 TIANJIN and their engineering team have been working at their own expense and have submitted Phase One design drawings for a motorcycle DCGT engine. The Company is currently reviewing the designs.

The Company entered into a Cooperative Agreement (the “Agreement”) dated April 27, 2010 with Beijing Royal Aerospace Facilities Co., Ltd., a PRC corporation (“Beijing Royal”), for the purpose of providing a framework for the collaboration between the two companies on the development and commercialization of the Detonation Cycle Gas Turbine Engine (“DGCT”) specifically for application to heavy duty trucks, with Beijing Royal to be the Company’s exclusive development partner with respect to 300 – 600 HP DCGT in the People’s Republic of China. The terms of the agreement replace the terms of the agreement dated January 21, 2009 with Aerospace Machinery and Electric Co., Ltd. The terms of the agreement call for the Company to complete the design plan for the 540 HP DCGT engine with three (3) months and submit it to Beijing Royal for further submission to PRC regulatory authorities for review and approval. The parties have agreed to execute a more detailed joint development contract upon the approval of the DCGT project by PRC regulatory authorities to specify the details of their cooperation on the development of the DCGT.

The Agreement further provides that all documentation provided by the Company to Beijing Royal at this stage shall be solely for the purpose of making a funding application, and that any further use shall be by agreement of the parties. The intellectual properties jointly developed under the Agreement would be owned by both parties equally.

 

19


Table of Contents

Alpha has completed the design and prototype of a 540 hp engine for use in highway trucks. The Company entered into a contractual agreement (the “Agreement”) dated July 1, 2008 with AbM Engineering, LLC (AbM) for the purpose of the continued development and testing of the current 540 horsepower DCGT engine and a 70 horsepower/50kw generator combination. AbM is currently working in a collaborative effort with AMEC’s engineers to modify and test other DCGT engine applications.

Under our Agreement with Alpha, they will continue to consult and advise with AbM Engineering on future developments of this 540 horsepower DCGT highway truck engine prototype at AbM’s facilities in Daytona Beach, Florida. We receive ongoing status reports of their progress but do not participate in the design, construction and/or testing of the engine. This new energy efficient detonation cycle gas turbine can be designed and manufactured as a new or replacement engine for all heavy duty trucks that utilize engines ranging from 300 to 1,000 horsepower.

It was our initial intention to target 18 wheel class 8 vehicles commonly used for transporting goods throughout the United States for distribution of our engine, however, the Company now intends to license other applications of the DCGT engine technology as deemed necessary and appropriate to further the development and commercialization of the engines.

The following steps have been or are being taken by the Company to demonstrate the viability of a final prototype engine:

 

Step 1    The completion of the design has been done and the prototype engine has been built
Step 2    The Company has leased its office and demonstration facilities
Step 3    The Engine is undergoing continuing testing and development, the cost of which is anticipated to be approximately $2,500,000

In Step 3, we will rely on AbM, AMEC, TIANJIN, GUOHAO and potentially other foreign or domestic partners to develop and test the prototype engine at their facilities. AbM, AMEC, and the others will conduct test demonstrations to show the viability and function of the engine. The cost of the on-going testing is expected to be funded from the proceeds of a private placement offering.

For the three months ended June 30, 2010 compared to the three months ended June 30, 2009:

Research and development costs for the three months ended June 30, 2010 and 2009, totaled $67,226 and $71,636, respectively. The decrease of $4,410 was primarily attributable to a reduction in the monies spent for research and development as they were paid for by Beijing Royal.

Operating Costs – During the three months ended June 30, 2010 and 2009, operating costs totaled $1,102,765 and $247,794, respectively. The increase of $854,971 was mainly attributable to a $340,000 increase in consulting expenses due to several new consulting contracts, the Company also had an approximate $224,200 increase in professional fees, an increase of approximately $150,000 in payroll costs due to additional employees, an increase of $57,000 in stock based compensation and an additional $63,500 increase in travel expenses related to the AMEC agreement.

Interest (Income) Expense - Net - During the three months ended June 30, 2010 and 2009 net interest expense totaled $25,756 and $98,153, respectively. The decrease of $72,397 was due to the Company issuing a convertible debenture to Golden Gate Investors, Inc. and the amortization of the beneficial conversion feature associated with the debentures during 2009. In 2010, the Company is amortizing the beneficial conversion feature over the life of the debt and the note holder has not yet elected to convert the convertible debenture.

The net loss for the three months ended June 30, 2010 and 2009 was $1,195,747 and $417,583, respectively. The increase of $778,164 was mainly attributable to the increase in operating costs.

 

20


Table of Contents

For the six months ended June 30, 2010 compared to the six months ended June 30, 2009:

Research and development costs for the six months ended June 30, 2010 and 2009, totaled $125,740 and $71,636, respectively. The increase of $54,104 was primarily attributable to additional costs incurred for the testing of the DCGT engine in 2010.

Operating Costs – During the six months ended June 30, 2010 and 2009, operating costs totaled $1,698,665 and $540,931, respectively. The increase of $1,157,734 was mainly attributable to an approximate $406,800 increase in consulting expenses due to several new consulting contracts, the Company also had an approximate $352,400 increase in professional fees, an increase of approximately $190,000 in payroll costs due to additional employees, an increase of $129,750 in stock based compensation and an additional $89,046 increase in travel expenses related to the AMEC agreement.

Interest (Income) Expense - Net - During the six months ended June 30, 2010 and 2009 net interest expense totaled $34,320 and $138,722, respectively. The decrease of $104,402 was due to the Company issuing a convertible debenture to Golden Gate Investors, Inc. and the amortization of the beneficial conversion feature associated with the debentures during 2009. In 2010, the Company is amortizing the beneficial conversion feature over the life of the debt and the note holder has not yet elected to convert the convertible debenture.

The net loss for the six months ended June 30, 2010 and 2009 was $1,858,725 and $751,289, respectively. The increase of $1,107,436 was mainly attributable to the increase in operating costs and research and development expenses.

LIQUIDITY AND CAPITAL RESOURCES

As shown in the accompanying financial statements, for the three and six months ended June 30, 2010 and since November 27, 2000 (date of inception) through June 30, 2010, the Company has had net losses of $1,195,747 and $1,858,725 and $13,422,648, respectively. As of June 30, 2010, the Company has not emerged from the development stage. In view of these matters, the Company’s ability to continue as a going concern is dependent upon the Company’s ability to begin operations and to achieve a level of profitability. Since inception, the Company has financed its activities principally from the sale of public equity securities. The Company intends on financing its future development activities and its working capital needs largely from the sale of public equity securities with some additional funding from other traditional financing sources, including term notes and proceeds from sub-licensing agreements until such time that funds provided by operations are sufficient to fund working capital requirements.

As previously mentioned, since inception, we have financed our operations largely from the sale of common stock. From inception through June 30, 2010 we raised cash of approximately $3,135,317 net of issuance costs, through private placements of common stock financings and $802,250 through the issuance of convertible notes payable. Additionally, we have raised net proceeds from stockholder advances of approximately $109,000.

Since our inception through June 30, 2010 we have incurred $3,652,890 of research and development costs. These expenses were principally related to the acquisition of a license agreement in July 2002 in the amount of $2,735,649, which was expensed to research and development costs for the DCGT technology and general and administrative expenses.

We have incurred significant net losses and negative cash flows from operations since our inception. As of June 30, 2010, we had an accumulated deficit of $13,422,648 and working capital of $83,161.

We anticipate that cash used in product development and operations, especially in the marketing, production and sale of our products, will increase significantly in the future.

On June 6, 2008, the Company issued a 7  3/4 Convertible Debenture to Golden Gate Investors, Inc. in the principal amount of $1,000,000, pursuant to Rule 506 promulgated by the Securities and Exchange Commission, for the purpose of accessing necessary funding to continue operations.

Pursuant to the terms of the Debenture, the related Securities Purchase Agreement, secured Promissory Note and Stock Pledge Agreement, each executed in connection therewith, the Company issued $1,000,000 Convertible Debenture (the “Debenture”) for the payment by Golden Gate of $100,000 in cash and the execution and delivery by Golden Gate of a $900,000 Secured Promissory Note of even date (the “Note”), bearing interest at 8% per annum.

 

21


Table of Contents

The Debenture bears interest at 7.75% per annum, payable monthly, maturing June 30, 2012, and is secured by a Continuing Personal Guaranty by Michael H. Rouse, the Company’s CEO. Originally, the Holder was entitled to convert into common stock of the company at the conversion price equal to the lesser of (i) $0.50, or (ii) 80% of the average of the 3 lowest Volume Weighted Average Prices during the 20 Trading Days prior to Holder’s election to convert, as such terms are defined in the Debenture. Effective January 15, 2010 the agreement was amended with the Holder and the conversion price having a $0.15 fixed floor price that limits the number of common shares upon conversion of a fixed amount. The Holder can only convert that amount of the Debenture that has actually been paid for by either cash at closing or principal pre-payments made on the Promissory Note.

Golden Gate’s secured Promissory Note is payable at the rate of 8% per annum, payable monthly and provides that for the prepayment of the Note in an amount not less than $200,000 monthly upon the happening of certain events. It matures on June 30, 2012. During 2010 and since inception, the Company has drawn $250,000 and $745,000, respectively, in proceeds related to the note. During 2010 and since inception, the Holder has converted $0 and $469,000 in convertible notes into 0 and 5,633,540 common shares, respectively.

Provided certain conditions are met, pursuant to the terms of the Securities Purchase Agreement executed between the parties, Golden Gate or its assigns has the right to enter into 4 additional Debentures with the Company upon similar terms. The Company incurred no additional expenses in this matter and the Company is utilizing the proceeds for its on-going working capital needs.

We will be dependent upon our existing cash, together with anticipated net proceeds from a public offering and future debt issuances and private placements of common stock and potential license fees, to finance our planned operations through the next 12 months. We will continue to proceed in the design and testing phase of the DCGT engine during the next 12 months and will require additional funding to continue operations. Based on our anticipated growth, we plan to add several employees to our staff.

Additional capital may not be available when required or on favorable terms. If adequate funds are not available, we may be required to significantly reduce or refocus our operations or to obtain funds through arrangements that may require us to relinquish rights to certain or potential markets, either of which could have a material adverse effect on our business, financial condition and results of operations. To the extent that additional capital is raised through the sale of equity or convertible debt securities, the issuance of such securities would result in ownership dilution to our existing stockholders.

The Company may receive proceeds in the future from the exercise of warrants and options outstanding as of June 30, 2010 in accordance with the following schedule:

 

     Approximate
Number of
Shares
   Approximate
Proceeds

2006 Non-Plan Options and Warrants

   1,940,413    $ 959,000

OFF-BALANCE SHEET ARRANGEMENTS

We do not have any 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 3. Quantitative and Qualitative Disclosures About Market Risk

Not applicable.

 

Item 4T. Controls and Procedures

The Company’s Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of and for the period covered by this Quarterly Report on Form 10-Q. Based upon such evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures were not effective. The controls were determined to be ineffective due to the lack

 

22


Table of Contents

of segregation of duties. Currently, management contracts with an outside CPA to perform the duties of the Chief Financial Officer and Principle Accounting Officer and an outside consultant to assist with the preparation of the filings. However, until the Company has received additional funding, they are unable to remediate the weakness.

Changes in Internal Control Over Financial Reporting

No change in the Company’s internal control over financial reporting occurred during the six months ended June 30, 2010, that materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II—OTHER INFORMATION

 

Item 1. Legal Proceedings

As of the date of this Quarterly Report, neither we nor any of our officers or directors is involved in any litigation either as plaintiffs or defendants. As of this date, there is not any threatened or pending litigation against us or any of our officers or directors.

 

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

During the three month period ended June 30, 2010, there was no modification of any instruments defining the rights of holders of the Company’s common stock and no limitation or qualification of the rights evidenced by the Company’s common stock as a result of the issuance of any other class of securities or the modification thereof.

During April 2010, the Company issued 40,000 shares of common stock for cash at a price of $0.34 per share.

During April 2010, the Company issued 24,000 shares of common stock for cash at a price of $0.36 per share.

During April 2010, the Company issued 1,795 shares of common stock for cash at a price of $0.39 per share.

During April 2010, the Company issued 3,570 shares of common stock for cash at a price of $0.42 per share.

During April 2010, the Company issued 2,500 shares of common stock for cash at a price of $0.43 per share.

During April 2010, the Company issued 7,955 shares of common stock for cash at a price of $0.44 per share.

During April 2010, the Company issued 10,000 shares of common stock for cash at a price of $0.45 per share.

During April 2010, the Company issued 55,000 shares of common stock for services valued at a price of $0.49 per share.

During May 2010, the Company issued 28,572 shares of common stock for cash at a price of $0.35 per share.

During May 2010, the Company issued 14,000 shares of common stock for cash at a price of $0.40 per share.

During May 2010, the Company issued 116,500 shares of common stock for cash at a price of $0.44 per share.

During June 2010, the Company issued 25,000 shares of common stock for cash at a price of $0.28 per share.

During June 2010, the Company issued 11,000 shares of common stock for services at a price of $0.30 per share.

During June 2010, the Company issued 1,000 shares of common stock for services at a price of $0.31 per share.

During June 2010, the Company issued 3,750 shares of common stock for cash at a price of $0.32 per share.

During June 2010, the Company issued 150,000 shares of common stock for services valued at a price of $0.38 per share.

During June 2010, the Company issued 100,000 shares of common stock for services valued at a price of $0.41 per share.

 

23


Table of Contents
Item 3. Defaults upon Senior Securities

There have been no defaults in any material payments during the covered period.

 

Item 4. Removed and Reserved

 

Item 5. Other Information

The Company does not have any other material information to report with respect to the three month period ended June 30, 2010.

 

Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits included herewith are:

 

31.1    Certification of the Chairman of the Board, Chief Executive Officer, and Principal Financial Officer (This certification required as Exhibit 31 under Item 601(a) of Regulation S-K
31.2    Certification of the Principal Accounting Officer (This certification required as Exhibit 31 under Item 601(a) of Regulation
S-K
32.1    Written Statements of the Chief Executive Officer, This certification required as Exhibit 32 under Item 601(a) of Regulation S-K is furnished in accordance with Item 601(b)(32)(iii) of Regulation S-K
32.2    Written Statements of the Chief Financial Officer and Principal Accounting Officer (This certification required as Exhibit 32 under Item 601(a) of Regulation S-K is furnished in accordance with Item 601(b)(32)(iii) of Regulation S-K

 

24


Table of Contents

SIGNATURES

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

 

  TURBINE TRUCK ENGINES, INC.
Dated: August 16, 2010   By:  

/S/ MICHAEL ROUSE

   

Chief Executive Officer and Chairman of the

Board (Principal Executive Officer and

Principal Financial Officer)

Dated: August 16, 2010   By:  

/S/ REBECCA A. MCDONALD

    Principal Accounting Officer

 

25