Novo Integrated Sciences, Inc. - Annual Report: 2011 (Form 10-K)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-K
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ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
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For the fiscal year ended December 31, 2011
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
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For the transition period from , 20 , to , 20 .
Commission File Number 333-109118
Turbine Truck Engines, Inc.
(Exact Name of Registrant as Specified in its Charter)
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Nevada
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59-3691650
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(State or Other Jurisdiction of
Incorporation or Organization)
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(I.R.S. Employer
Identification Number)
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46600 Deep Woods Road, Paisley Florida 32767
(Address of Principal Executive Offices)
(386) 943-8358
(Registrant’s Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(g) of the Act:
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$.001 par value preferred stock
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Over the Counter Bulletin Board
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$.001 par value common stock
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Over the Counter Bulletin Board
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Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No x
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No x
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
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 (Section 232.405) during the preceding 12 months. Yes o No o
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x
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 definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
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Large accelerated filer
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Accelerated filer
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Smaller reporting company
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act): Yes o No x
The Aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter, June 30, 2011 was $8,044,593.
There were 63,901,396 shares of the Registrant’s $0.001 par value common stock outstanding as of March 26, 2012.
Documents incorporated by reference: none
TURBINE TRUCK ENGINES, INC.
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Certifications
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TURBINE TRUCK ENGINES, INC.
This Annual Report on Form 10-K and the documents incorporated herein by reference contain forward-looking statements that have been made pursuant to the provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on current expectations, estimates and projections about Turbine Truck Engines Inc.’s industry, management beliefs, and assumptions made by management. Words such as “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict; therefore, actual results and outcomes may differ materially from what is expressed or forecasted in any such forward-looking statements.
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DESCRIPTION OF BUSINESS
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Turbine Truck Engines, Inc. was incorporated in Delaware on November 27, 2000. On February 20, 2008, the Company was re-domiciled to the State of Nevada. The Company is currently pursuing the continued development of the Detonation Cycle Gas Turbine Engine” (“DCGT”).
The development of the DCGT Engine has been at the core of the Company’s business for many years. On December 15, 2000, we acquired the option rights for an exclusive License from Alpha Engines Corporation (“Alpha”) for manufacturing and marketing heavy duty highway truck engines utilizing Alpha’s DCGT technology embodied in U.S. Patent No. 6,000,214 and other proprietary technology and rights owned by Alpha including Marketing Survey Data in the highway trucking industry. We exercised our option and acquired the licensing rights on July 22, 2002. Alpha has completed the design and prototype of a 540 hp engine for use in highway trucks.
The Company has a number of agreements regarding the development and manufacture of the DCGT Engine over the last few years that have terminated of their own accord, but which the Company classifies as “on hold”, pending the successful completion the testing of the 6th generation prototype that is a condition precedent to the development of the engine which would serve as a platform for these companies to work off of. Upon the successful completion of the testing of the 6th generation prototype, the Company intends revisit these strategic alliances and potential joint ventures
The Company, through AbM Engineering, completed the 6th generation prototype in June 2011 and intends on continuing the testing thereof over the next quarter, subject to the receipt of adequate funding.
KINGTEC AGREEMENT
The Company entered into a Share Purchase Agreement in May 2010 with Hua Tec Enterprise Co. LTD, (“Hua Tec”) 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 terms of which are currently being negotiated.
OTHER AGREEMENTS
The Company entered into various strategic alliances with foreign companies during 2009 and 2010. During the year ended December 31, 2011, there were no material changes as disclosed in the December 31, 2010 Form 10K which would warrant further disclosure to these financial statements. The agreements with GUOHAO, TIANJIN and BEIJING ROYAL are based on the Company building, testing and demonstrating a prototype that will meet the efficiencies required to commercialize the engine for their respective products. Once the Company has demonstrated that it can produce an engine with the power output and efficiencies required, the time line set in the original agreements for the respective companies to fulfill their agreements and fund the Company to bring the engine to full commercialization for that product will begin.
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PRODUCT STATUS
THE DCGT ENGINE
To date, our DCGT Engine is not yet marketable, but we have completed initial testing of the 6th generation prototype. The Company continues to demonstrate the engine to investors and potential joint venture partners. Over the course of the last few years, the Company has entered into numerous strategic alliances and potential joint ventures for the development of the engine; however, those agreements have been placed on hold pending the successful completion of the testing on the 6th generation prototype. The prototype was completed in June 2011, and preliminary testing has been completed. Comprehensive testing will continue over the next quarter or longer, dependent upon adequate funding being received by the Company. Costs incurred for the prototype was included research and development costs for the year ended December 31, 2011.
Once the company has demonstrated that it can produce an engine with the power output and efficiencies required of the marketplace, the Company will revisit the prior agreements, as they have indicated that they remain interested. The Company continues to pursue funding to bring the engine to full commercialization.
GOLDEN GATE
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 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. As of December 31, 2011, the Company has $205,000 available to draw on the Convertible Debenture.
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. Effective January 15, 2010, the agreement was amended with the Holder and the conversion price has a $0.15 fixed floor price that limits the number of common shares that can be issued upon conversion to 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 with interest, payable monthly and provides for the prepayment of the Note in an amount not less than $200,000 upon the triggering of certain events. It matures on June 30, 2012. During 2011, the Company has drawn $50,000 in proceeds related to the note and converted $50,000 in convertible notes into 333,334 common shares. For financial statement purposes, the Securities Purchase Agreement and the Convertible Promissory Note have been netted, as the Company has the legal right of offset.
OUR PRODUCTS AND BUSINESS LINES
Detonation Cycle Gas Turbine Engine
Our product is slated to be a new energy-efficient, Detonation Cycle Gas Turbine Engine (“DCGT”) for heavy-duty highway trucks as well as other potential applications. To date, we have no marketable product and will rely on the research firms of AbM Engineering and AMEC and our Strategic Alliance partners to continue the development and testing of a 540 horsepower prototype that will conform to our licensed application. Since our inception, we have continued to raise capital to bring this patented technology closer to where it can be utilized in a common market. The application demanding the most change is the highway trucking market.
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Detonation refers to an instant burning of a fuel-air mixture producing an explosion. Cycle refers to the explosion happening in one chamber and then in another chamber, repeating over and over again. Gas is the fuel which is in a gaseous state. Turbine is a rotating wheel or disk connected to a shaft spinning in one direction. This combined process along with the Electromagnetic Isothermal Combustion “(EIC”) process creates the high efficiency, low emission engine that we intend to bring to market.
Alpha has completed the design and prototype of a 540 hp engine for use in highway trucks. Therefore compliance with state and federal regulators will not be a factor until we have an engineered prototype in a test vehicle here in the United States. Alpha completed all research and development in 1997, which resulted in a patent being issued in 1999. Alpha has completed the design for the truck engine. The Company is currently testing the 6th generation prototype, however, this takes a considerable amount of money.
Under our Agreement with Alpha, they will continue to consult and advise with AbM Engineering on future development of this 540 horsepower DCGT highway truck engine prototype at AbM’s facilities in Daytona Beach, Florida. 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 solely to target 18 wheel class 8 vehicles commonly used for transporting goods throughout the United States for distribution of our engine, however, based on the interest among numerous Chinese companies, the Company has expand that goal by pursuing other applications of the DCGT engine technology as deemed necessary and appropriate to further the development and commercialization of the engines.
PATENTS AND LICENSE
Patent #6000214 is a novel patent with a 20-year life from the filing date of December 16, 1997. The patent was based on research and development beginning in 1984, which included the design, construction, and testing of four (4) working prototypes. The patent attorneys were Schoemaker & Mattare Ltd. The inventor has and will file additional patents to protect any new developments in the engine technology. We will have access to any new patent filings on the highway truck engines as provided for in our licensing agreement.
This patent in its simplicity makes it very unique. A detonation cycle gas turbine engine includes a turbine rotor contained in a housing. The exhaust ports of respective valveless combustion chambers are located on opposite sides of the rotor directing combustion gases toward the turbine. The chambers are connected by a valveless manifold fed with fuel and oxidizer. When combustible gases are detonated by an igniter in one of the combustion chambers, the back pressure from the detonation shuts off the fuel and oxidizer flow to that chamber and redirects the fuel and oxidizer to the opposite chamber, where detonation occurs. The process repeats cyclically. Power is taken off the rotor shaft mechanically or electrically.
The invention utilizes a water wheel as the turbine wheel which has blades that are positively displaced through a blade race by the rapid expansion of gases exiting from combustion chambers via nozzles, rather than pistons or gas turbines.
Our engine has a blower, rather than a compressor, to supply less air per horsepower hour than required by existing gas turbines or piston engines, thereby producing less exhaust gases per horsepower hour.
The blower supplies low pressure air via a single manifold to two combustion chambers simultaneously thereby requiring less work to complete a detonation cycle, resulting in higher thermo mechanical efficiencies than gas turbines or piston engines.
The engine manifolds, combustion chambers, and ignition system has the capability of cyclically detonating fuel-air mixtures without using valves. The engine uses a fuel pump and vaporizers to gasify wet fuels prior to mixing with combustion air in the manifolds to produce complete combustion of all fuel-air mixtures in the detonation process. The engine uses a plasma arc ignition, a visibly constant illuminating plasma flame between two electrodes to detonate fuel-air mixtures and does not require critical ignition timing.
Low pressure air and fuel mixtures are detonated instantaneously–in less than one millisecond–producing high velocity shock waves that kinetically compress inert gases resulting in higher working pressures than the pressures produced in constant pressure heating utilized in gas turbine engines, and Otto and Diesel cycle piston engines.
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The detonation cycle engine uses less working fluid and produces less exhaust gas per horsepower hour than Brayton cycle turbines and Otto or Diesel cycle piston engines.
Alpha has developed six working prototypes as described below:
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First engine was developed in 1987. The engine consisted of one 8-inch diameter, 26-pound turbine wheel, driven by two horizontally opposed combustion chambers. The engine produced 78 horsepower at 12,500 rpm.
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The second engine was developed in 1989. The engine consisted of two 5-inch diameter, 11-pound turbine wheels mounted on a single shaft, driven by four horizontally opposed combustion chambers. The engine produced 130 horsepower at 14,000 rpm.
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The third engine was developed in 1991. The engine consisted of two 7-inch diameter, 19.6 pound turbine wheels mounted on a single shaft, driven by four horizontally opposed combustion chambers. The engine produced 256 horsepower at 8,300 rpm.
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The fourth engine was developed in 1997. The engine consists of four 6-inch diameter, 12 pound turbine wheels mounted on a single shaft, driven by eight horizontally opposed combustion chambers. The engine produces 130 horsepower at 8,400 rpm. This engine is currently used for demonstration and can be seen by appointment.
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The fifth engine was developed in 2006. The engine consists of six 15-inch diameter, 20-pound turbine wheels mounted on a single shaft, driven by 12 horizontally opposed combustion chambers producing an estimated 540 horsepower at 3,000 rpm.
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The 6th generation prototype engine was developed in June 2011. The engine consists of two 7-inch, 8-pound turbine wheels mounted on a single shaft, driven by 4 horizontally opposed combustion chambers producing an estimated 70 horsepower at 20,000 rpm
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The DCGT includes an Electromagnetic Isothermal Combustion (“EIC”) process that powers the engine. The EIC process produces complete combustion of fuel-oxidizer mixtures in cyclic detonations that negate unwanted nitrogen oxide and carbon monoxide emissions. The high pressure gases produced by the detonations drive a unique turbine producing shaft horsepower.
The EIC process enables the DCGT to operate with blower air at low static pressure, negating the necessity of compressing and preheating fuel-oxidizer mixtures prior to combustion. By eliminating the compression of fuel-oxidizer mixtures, the DCGT achieves higher thermal efficiencies in a simplified mechanical structure. The DCGT has the following proprietary and competitive advantages over current diesel, gasoline and gas turbine engines:
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Air cooled - less than 2 pounds per horsepower
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Fewer moving parts - less maintenance
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Flex-fuel and mixed fuels capability
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Operates on all hydrocarbon fuels, hydrogen and syn fuels
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Cold start capability with any fuels
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Burns 30% less fuel “Greenhouse exhaust gases”
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Less nitrogen oxides and carbon monoxide exhaust emissions
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Less hydrocarbon exhaust emissions
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No lube oil, filters or pumps
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Alpha has completed basic research, exploratory development, and advanced development with the design, construction and testing of four experimental prototype engines.
Our 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. We are currently exploring additional applications, such as motorcycle engines, generators and various other shaft driven applications.
We will not require governmental approval until such time as the engine is placed in vehicles for use. Our engine will meet the new more stringent tailpipe emission requirements set forth by the Environmental Protection Agency (“EPA”).
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Research and development of our engine was completed in 1997 with patents obtained in 1999. Through testing, we hope to be able to comply with existing and future environmental laws. We intend to supply our fuel efficient, lower emission engine to a marketplace that must comply with more stringent governmental regulations. In each of the last two years, the Company has spent $146,779 (2011) and $208,565 (2010) on research and development.
We acquired our license from Alpha on July 22, 2002. The material terms of the license agreement, as amended, are as follows:
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$250,000 licensing note payable August 23, 2005 or agreement is terminated
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Eight percent (8%) of net sales royalty payment after manufacturing and sales commence
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$250,000 minimum royalty payment each year after licensing note is settled
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Additional contract fees will be paid to Alpha for design and engineering services.
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During the year ended December 31, 2006, the Company issued 125,000 shares of common stock in satisfaction of the $250,000 note payable to Alpha and the accrual of minimum royalty fees began. In addition, during the year ended December 31, 2006, the Company paid $416,667 of royalty fees through the issuance of 100,000 shares of common stock. As of December 31, 2011, the Company has accrued $1,301,500 of royalty fees related to this agreement.
Other than being the licensor and a principal shareholder, we have no affiliation with Alpha.
HYDROGEN GENERATORS
The Company entered into a Contract of World Agency Agreement dated March 15, 2012 with Energy Technology Services Co., Ltd. (“ETS”) granting the Company full agency capacity worldwide to handle ETS’s energy related products, including hydrogen burning systems and other energy saving devices. The agency is exclusive for North America and non-exclusive for other world markets.
Under the terms of the Agreement, ETS will provide all products to the Company’s sales channels, and will provide, plan, install & maintain all products and training. The Company will be responsible for setting up its own sales and education system, organizing sales and promotional meetings and will report to ETS monthly.
The Agreement is effective from March 1, 2012 through March 1, 2016. The Company must sell at least ten 200 M3/Hr hydrogen burning machines in the first year, and 20 or more machines for each of the subsequent years or ETS will have the right to terminate the Agreement. The Agency fees have yet to be determined.
Each machine will have an end user price of $750,000 and the Company will remit 50% of the total payment upon ordering and the balance will be due in full at port of Taiwan, after inspection. The Company will be responsible for shipping costs.
The Company agrees to a non-compete for 5 years from the Agreement date that it will not compete with ETS with any similar or derivative products.
The ETS hydrogen generator provides a unique marketable hydrogen generator, unlike anything currently in the commercial market. Hydrogen (H2) is an ideal fuel for combustion — it burns easily and efficiently at very high temperatures and emits pure water vapor (H2O) as its only by-product. But the gas is a difficult fuel to work with. Existing methods for transporting and storing hydrogen (namely high-pressure compression and liquefaction) are complex, inefficient, and expensive. It’s also the smallest molecule in existence and tends naturally to leak; only exacerbating these problems.
In contrast, Methanol (CH4O, also known as methyl alcohol or wood alcohol) is abundant, widely accessible, easy to handle, and inexpensive. Utilizing a gas reformation process employing a proprietary chemical catalyst and a unique low temperature pyrolytic reaction, ETS’s extraordinary generator converts common methanol into clean-burning hydrogen gas for immediate on-site use. The process removes all harmful emissions except for food grade carbon dioxide, which can be captured and sold to the food and beverage industry.
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The hydrogen generator can be used in a wide range of residential and commercial applications. It is also ideal for use in industrial equipment such as boilers, steam generators, and dryers. On-demand hydrogen generation eliminates the need for operators to have expensive high pressure storage tanks and infrastructure while still providing the many environmental benefits of using hydrogen fuel. Operators additionally have seen savings of 30% to 60% of their energy costs as compared to using electricity or heavy oils do to the same job.
PATENTS AND LICENSE
To date there are no patents or patents pending for the Hydrogen Generator. However, in the future ETS and the Company will share in patent applications and approvals on any part of the Hydrogen Generator that is able to be patented.
COMPETITION
The Company has identified seven (7) major engine manufacturers, including Ford, Caterpillar, Cummins, Detroit Diesel, Mack Trucks, Navistar International and Volvo Truck that each manufacture heavy duty truck engines, both gasoline and diesel, which are likely to be the major competitors to our company as to the DCGT Engine, once our product is ready for market. To the Company’s knowledge, at this time, none of the Company’s major competitors are working on the development of a turbine engine that would be in direct competition to the Company’s engine, and although we would be competing with them for customers, the Company believes that the technological differences between its product and those that are currently on the market, will provide the Company with a market niche that it can expand upon, even in the face of such established competitors.
The Company has identified a handful of competitors, including Air-Gas, that manufacture hydrogen generators. There are however, three main types of hydrogen generators, those that (a) convert methane to hydrogen through a catalyst; (b) convert water through electrolysis; and (c) convert methanol through catalysis. There are commercialized units for each method, however, to our knowledge, there are no commercialized units, like the ETS generator that produce hydrogen on demand, without the safety issues involved with storage and transportation. In that regard, the Company considers itself uniquely positioned to provide the market with a hydrogen generator that is uniquely different than its competitors.
EMPLOYEES
We presently have three full-time employees. Staffing levels will be determined as we progress and grow. We also plan to add several employees to our staff. The level of employees is primarily contingent on the level of success of an offering. Our board of directors will determine the compensation of all new employees based upon job description.
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RISK FACTORS
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Not applicable.
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UNRESOLVED STAFF COMMENTS
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None.
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DESCRIPTION OF PROPERTY
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The Company leases a 55 acre parcel located outside Paisley, Florida with two home/office buildings and one storage/demonstration facility from J.K. Schmale. The lease agreement is currently being extended on a month to month basis. Base rent is $25,000 per year and the lease agreement contains an option to purchase the property and all buildings located on the property.
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LEGAL PROCEEDINGS
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As of the date of this Report, neither we nor any of our officers or directors is involved in any litigation either as plaintiffs or defendants. As of this date, there is not any threatened or pending litigation against us or any of our officers or directors.
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MINE SAFETY DISCLOUSRES
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None.
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MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
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Since the August 2004 closing of the Company’s initial public offering, the Company’s Common Stock has traded in the over-the-counter market on the National Association of Securities Dealers, Inc. OTC Bulletin Board System (“OTCBB”) under the symbol “TTEG.” The following table sets forth the range of high and low closing bid quotations of the Common Stock as reported by the OTCBB for each fiscal quarter for the past two fiscal years. High and low bid quotations reflect inter-dealer prices without adjustment for retail mark-ups, markdowns or commissions and may not necessarily represent actual transactions.
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Bid Prices
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Low
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FISCAL 2011
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First Quarter (January 1, 2011 through March 31, 2011)
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$
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0.24
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$
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0.12
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Second Quarter (April 1, 2011 through June 30, 2011)
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$
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0.28
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$
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0.10
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Third Quarter (July 1, 2011 through September 30, 2011)
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$
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0.19
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$
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0.10
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Fourth Quarter (October 1, 2011 through December 31, 2011)
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$
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0.10
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$
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0.04
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FISCAL 2010
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First Quarter (January 1, 2010 through March 31, 2010)
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$
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0.60
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$
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0.32
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Second Quarter (April 1, 2010 through June 30, 2010)
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$
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0.65
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$
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0.33
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Third Quarter (July 1, 2010 through September 30, 2010)
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$
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0.35
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$
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0.18
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Fourth Quarter (October 1, 2010 through December 31, 2010)
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$
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0.25
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$
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0.12
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On March 26, 2012 the closing bid price of the Company’s Common Stock as reported by the OTCBB was $0.16 and there were approximately 429 shareholders of record.
DIVIDENDS
We have not paid any cash dividends on our common or preferred stock and do not anticipate paying any such cash dividends in the foreseeable future. Earnings, if any, will be retained to finance future growth. We may issue shares of our common stock and preferred stock in private or public offerings to obtain financing, capital or to acquire other businesses that can improve our performance and growth. Issuance and or sales of substantial amounts of common stock could adversely affect prevailing market prices in our common stock.
Common Stock
During the year ended December 31, 2011, there was no modification of any instruments issued herein for the fourth quarter, 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.
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During October 2011, the Company issued 50,000 shares of common stock to a qualified investor for services valued at $0.05 per share for a total of $2,500.
During October 2011, the Company issued 50,000 shares of common stock to a qualified investor for $0.10 per share for a total of $5,000.
During October 2011, the Company issued 578,000 shares of common stock to a former employee in settlement of accounts payable valued at $0.10 per share for a total of $57,800.
During October 2011, the Company issued 850,000 shares of common stock to employees for services valued at $0.10 per share for a total of $85,000.
During October 2011, the Company issued 100,000 shares of common stock to a qualified investor for services valued at $0.14 per share for a total of $14,000.
During October 2011, the Company issued 1,000,000 shares of common stock to a qualified investor for services valued at $0.20 per share for a total of $200,000.
The sale and issuance of securities above was deemed to be exempt from registration under the Securities Act of 1933, as amended, by virtue of Rule 506 of Regulation D promulgated there under.
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SELECTED FINANCIAL DATA
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Not required.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
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.
10
For the year ended December 31, 2011 compared to the year ended December 31, 2010:
Research and Development Costs – During the years ended December 31, 2011 and 2010, research and development costs totaled $146,779 and $208,565, respectively. The decrease of $61,786 was mainly attributable to pausing research and development while waiting for funding.
Operating Costs – During the years ended December 31, 2011 and 2010, operating costs totaled $2,077,436 and $2,121,168, respectively. The decrease of $43,732 was mainly attributable to a $95,645 decrease in consulting expenses, a $145,274 decrease in travel and entertainment expenses which were partially offset by an increase of $226,789 in stock based compensation expense.
Interest (Income) Expense - Net - During the years ended December 31, 2011 and 2010 net interest expense totaled $15,540 and $239,490, respectively. The decrease of $223,950 was primarily due to the Company issuing less convertible debentures to Golden Gate Investors, Inc. of $50,000 in 2011 and $250,000 in 2010.
The net loss for the years ended December 31, 2011 and 2010 was ($2,238,011) and ($2,569,223), respectively. The decrease of $331,212 was mainly attributable to the decrease in research and development expenses, operating costs and interest expenses.
Liquidity and capital resources
As shown in the accompanying financial statements, for the years ended December 31, 2011 and 2010 and since November 27, 2000 (date of inception) through December 31, 2011, the Company has had net losses of $2,238,011, $2,569,223 and $16,371,158, respectively. As of December 31, 2011, 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. However, there can be no assurance that the Company will be able to raise capital or begin operations to achieve a level of profitability to continue as a going concern. 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 December 31, 2011 we raised cash of approximately $3,683,259 net of issuance costs, through private placements of common stock financings and $894,750 through the issuance of convertible notes payable. Additionally, we have raised net proceeds from stockholder advances of $114,068.
Since our inception through December 31, 2011 we have incurred $3,882,494 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 December 31, 2011, we had an accumulated deficit of $16,371,158 and working capital deficit of $122,333.
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 7¾ 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.
11
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 2011 and since inception, the Company has drawn $50,000 and $795,000, respectively, in proceeds related to the note. During 2011 and since inception, the Holder has converted $50,000 and $747,000 in convertible notes into 333,334 and 7,340,152 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 December 31, 2011 in accordance with the following schedule:
|
Approximate
Number of
Shares
|
Approximate
Proceeds*
|
|||||||
|
2006 Non-Plan Options and Warrants
|
5,405,413
|
$
|
1,597,569
|
|||||
|
*
|
Based on weighted average exercise price.
|
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.
Critical Accounting Policies and Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
We believe that the following critical policies affect our more significant judgments and estimates used in preparation of our financial statements.
12
We account for stock option grants in accordance with US GAAP. Stock-based compensation cost recognized during the years ended December 31, 2011 and 2010 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 relative grant date fair values estimated in accordance with US GAAP. The Company recognizes compensation expenses on a straight-line basis over the requisite service period.
Determination of the fair values of stock option grants at the grant date requires judgment, including estimating the expected term of the relevant grants and the expected volatility of the Company’s stock. Additionally, management must estimate the amount of stock option grants that are expected to be forfeited. The expected term of options granted represents the period of time that the options are expected outstanding and is based on historical experience of similar grants, giving consideration to the contractual terms of the grants, vesting schedules and expectations of future employee behavior. The expected volatility is based upon our historical market price at consistent points in a period equal to the expected life of the options. Expected forfeitures are based on historical experience and expectations of future employee behavior.
Furniture and equipment are recorded at cost and depreciated on a declining balance and straight-line basis over their estimated useful lives, principally two to seven years. Accelerated methods are used for tax depreciation. Maintenance and repairs are charged to operations when incurred. Betterments and renewals are capitalized. When furniture and equipment are sold or otherwise disposed of, the asset account and related accumulated depreciation account are relieved, and any gain or loss is included in operations.
The Company has incurred deferred offering costs in connection with raising additional capital through the sale of its common stock. These costs are capitalized and charged against additional paid-in capital when common stock is issued. If there is no issuance of common stock, the costs incurred are charged to operations.
Research and development costs are charged to operations when incurred and are included in operating expenses.
New Accounting Pronouncements
For a description of recent accounting standards, including the expected dates of adoption and estimated effects, if any, on our financial statements, see “Note 3: Significant Accounting Polices: Recent Accounting Standards” in Part II, Item 8 of this Form 10-K.
|
ITEM 7A.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Not applicable.
|
FINANCIAL STATEMENTS
|
13
Turbine Truck Engines, Inc.
(A Development Stage Enterprise)
Financial Statements
For the Years Ended December 31, 2011 and 2010,
and the Period November 27, 2000 (Date of Inception)
through December 31, 2011
Contents
14
Report of Independent Registered Public Accounting Firm
Board of Directors and Stockholders
Turbine Truck Engines, Inc.
(A Development Stage Enterprise)
Paisley, Florida
We have audited the accompanying balance sheets of Turbine Truck Engines, Inc. (a development stage enterprise) (“the Company”) as of December 31, 2011 and 2010 and the related statements of operations, changes in stockholders’ deficit, and cash flows for the years ended December 31, 2011 and 2010 and the period from November 27, 2000 (Date of Inception) through December 31, 2011. These financial statements are the responsibility of the management of Turbine Truck Engines, Inc. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we expressed no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Turbine Truck Engines, Inc. as of December 31, 2011 and 2010 and the results of its operations and its cash flows for the years ended December 31, 2011 and 2010 and the period from November 27, 2000 (Date of Inception) through December 31, 2011 in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2, the Company incurred a net loss of $2,238,011 during the year ended December 31, 2011 and has an accumulated deficit of $16,371,158 since inception and has a working capital deficit of $122,333 as of December 31, 2011. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Pender Newkirk & Company LLP
Certified Public Accountants
Tampa, Florida
March 30, 2012
15
Turbine Truck Engines, Inc.
(A Development Stage Enterprise)
Balance Sheets
|
December 31,
2011
|
December 31,
2010
|
|||||||
|
Assets
|
||||||||
|
Current assets:
|
||||||||
|
Cash
|
$
|
11,638
|
$
|
128,264
|
||||
|
Prepaid expenses
|
7,118
|
108,891
|
||||||
|
Total current assets
|
18,756
|
237,155
|
||||||
|
Agency fee- intangible, net of accumulated amortization of $0 (2011) and $57,368 (2010)
|
942,632
|
|||||||
|
Furniture and equipment, net of accumulated depreciation of $47,863 (2011) and $44,025 (2010)
|
7,056
|
7,285
|
||||||
|
$
|
25,812
|
1,187,072
|
||||||
|
Liabilities and Stockholders’ Deficit
|
||||||||
|
Current liabilities:
|
||||||||
|
Accounts payable
|
$
|
116,290
|
$
|
162,281
|
||||
|
Accrued agency fee
|
900,000
|
|||||||
|
Accrued interest
|
14,955
|
14,718
|
||||||
|
Accrued payroll
|
1,029
|
4,635
|
||||||
|
Convertible note, net
|
8,315
|
|||||||
|
Note payable
|
500
|
500
|
||||||
|
Total current liabilities
|
141,089
|
1,082,134
|
||||||
|
Accrued expenses – long term
|
318,606
|
273,250
|
||||||
|
Accrued payroll – long term
|
585,827
|
270,376
|
||||||
|
Accrued royalty fees
|
1,301,500
|
1,051,500
|
||||||
|
Note payable to related party
|
6,901
|
1,901
|
||||||
|
Total liabilities
|
2,353,923
|
2,679,161
|
||||||
|
Stockholders’ deficit:
|
||||||||
|
Preferred stock; $0.001 par value; 1,000,000 shares authorized; 0 shares issued and outstanding
|
||||||||
|
Common stock; $0.001 par value; 99,000,000 shares authorized; 56,503,946 (2011) and 45,844,161 (2010) shares issued and outstanding
|
56,503
|
45,842
|
||||||
|
Additional paid in capital
|
14,277,622
|
12,526,812
|
||||||
|
Deficit accumulated during development stage
|
(16,371,158
|
)
|
(14,133,147
|
)
|
||||
|
Common stock payable
|
3,650
|
274,000
|
||||||
|
Prepaid consulting services paid with common stock
|
(82,728
|
)
|
(193,596
|
)
|
||||
|
Receivable for common stock
|
(212,000
|
)
|
(12,000
|
)
|
||||
|
Total stockholders’ deficit
|
(2,328,111
|
)
|
(1,492,089
|
)
|
||||
|
$
|
25,812
|
$
|
1,187,072
|
|||||
The accompanying notes are an integral part of the financial statements.
16
Turbine Truck Engines, Inc.
(A Development Stage Enterprise)
Statements of Operations
|
Years Ended December 31,
|
Period
November 27,
2000 (Date of
Inception) through
December 31,
2011
|
|||||||||||
|
2011
|
2010
|
|||||||||||
|
Research and development costs
|
$
|
146,779
|
$
|
208,565
|
$
|
3,882,494
|
||||||
|
Operating costs
|
2,077,436
|
2,121,168
|
11,872,091
|
|||||||||
|
2,224,215
|
2,329,733
|
15,754,585
|
||||||||||
|
Unrealized gain on derivative
|
(1,744
|
)
|
(1,744
|
)
|
||||||||
|
Interest (income) expense
|
15,540
|
239,490
|
618,317
|
|||||||||
|
Net loss
|
$
|
(2,238,011
|
)
|
$
|
(2,569,223
|
)
|
$
|
(16,371,158
|
)
|
|||
|
Net loss per share
|
$
|
(0.04
|
)
|
$
|
(0.06
|
)
|
$
|
(0.80
|
)
|
|||
|
Weighted average number of common shares outstanding
|
52,412,362
|
43,256,282
|
20,477,687
|
|||||||||
The accompanying notes are an integral part of the financial statements.
17
Turbine Truck Engines, Inc.
(A Development Stage Company)
Statement of Changes in Stockholders’ Deficit
For the Year Ended December 31, 2011 and
For Each of the Years From November 27, 2000 (Date of Inception) through December 31, 2011
|
Common Stock
|
Additional
Paid
in Capital
|
Deficit
Accumulated
During
Development
Stage
|
||||||||||||||
|
Shares
|
Amount
|
|||||||||||||||
|
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.
18
|
Deferred
Non-Cash
Offering
Costs
|
Common
Stock
Payable
|
Prepaid
Consulting
Services
Paid for with
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
|
)
|
||||||||||||||
19
Turbine Truck Engines, Inc.
(A Development Stage Company)
Statement of Changes in Stockholders’ Deficit
For the Year Ended December 31, 2011 and
For Each of the Years From November 27, 2000 (Date of Inception) through December 31, 2011
|
Common Stock
|
Additional
Paid
in Capital
|
Deficit
Accumulated
During
Development
Stage
|
||||||||||||||
|
Shares
|
Amount
|
|||||||||||||||
|
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.
20
|
Deferred
Non-Cash
Offering
Costs
|
Common
Stock
Payable
|
Prepaid
Consulting
Services
Paid
for with
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.
21
Turbine Truck Engines, Inc.
(A Development Stage Company)
Statement of Changes in Stockholders’ Deficit
For the Year Ended December 31, 2011 and
For Each of the Years From November 27, 2000 (Date of Inception) through December 31, 2011
|
Common Stock
|
Additional
Paid in Capital
|
Deficit Accumulated During Development Stage | ||||||||||||||
|
Shares
|
Amount
|
|||||||||||||||
|
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.
22
|
Deferred
Non-Cash
Offering
Costs
|
Common
Stock
Payable
|
Prepaid
Consulting
Services
Paid
for with
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
|
)
|
$
|
(167,090
|
)
|
$
|
(992,448
|
)
|
||||||||
23
Turbine Truck Engines, Inc.
(A Development Stage Company)
Statement of Changes in Stockholders’ Deficit
For the Year Ended December 31, 2011 and
For Each of the Years From November 27, 2000 (Date of Inception) through December 31, 2011
|
Common Stock
|
Additional Paid in Capital |
Deficit Accumulated During Development Stage | ||||||||||||||
|
Shares
|
Amount
|
|||||||||||||||
|
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
|
24
|
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
|
25
|
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
|
26
|
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
|
||||||||||||||||
|
Amortization of prepaid services paid for with common stock
|
||||||||||||||||
|
Issuance of common stock for cash, February ($0.15, per share)
|
135,000
|
135
|
20,115
|
|||||||||||||
|
Issuance of common stock for cash, February ($0.16, per share)
|
318,420
|
318
|
50,629
|
|||||||||||||
|
Issuance of common stock for cash, February ($0.17, per share)
|
159,647
|
160
|
26,980
|
|||||||||||||
|
Issuance of common stock for cash, February ($0.18, per share)
|
10,000
|
10
|
1,790
|
|||||||||||||
|
Issuance of common stock for cash, February ($0.23, per share)
|
553,261
|
553
|
126,697
|
|||||||||||||
|
Issuance of common stock for settlement of accounts payable, February ($0.261, per share)
|
121,212
|
120
|
31,504
|
27
|
Issuance of common stock for cash, February ($0.30, per share)
|
101,000
|
101
|
30,199
|
|||||||||||||
|
Issuance of common stock for cash, February ($0.333, per share)
|
100,000
|
100
|
33,233
|
|||||||||||||
|
Issuance of common stock for cash, February ($0.42, per share)
|
33,000
|
33
|
13,827
|
|||||||||||||
|
Issuance of common stock for services, February ($0.475, per share)
|
14,000
|
14
|
6,636
|
|||||||||||||
|
Issuance of common stock for services, February ($0.575, per share)
|
20,000
|
20
|
11,480
|
|||||||||||||
|
Issuance of common stock for cash, March ($0.18, per share)
|
10,000
|
10
|
1,790
|
|||||||||||||
|
Issuance of common stock for cash, March ($0.21, per share)
|
4,761
|
5
|
995
|
|||||||||||||
|
Issuance of common stock for cash, March ($0.28, per share)
|
357,142
|
357
|
99,643
|
|||||||||||||
|
Issuance of common stock for cash, March ($0.294, per share)
|
6,803
|
7
|
1,993
|
|||||||||||||
|
Issuance of common stock for cash, March ($0.30, per share)
|
152,666
|
153
|
45,647
|
|||||||||||||
|
Issuance of common stock for cash, March ($0.35, per share)
|
6,000
|
6
|
2,094
|
|||||||||||||
|
Issuance of common stock for cash, March ($0.37, per share)
|
13,514
|
14
|
4,986
|
|||||||||||||
|
Issuance of common stock for cash, March ($0.38, per share)
|
50,000
|
50
|
18,950
|
|||||||||||||
|
Issuance of common stock for cash, March ($0.39, per share)
|
1,025
|
1
|
399
|
|||||||||||||
|
Issuance of common stock for cash, March ($0.40, per share)
|
3,000
|
3
|
1,197
|
|||||||||||||
|
Issuance of common stock for settlement of accounts payable, March ($0.269 per share)
|
80,000
|
80
|
21,420
|
|||||||||||||
|
Issuance of common stock for settlement of accounts payable, March ($0.53, per share)
|
3,774
|
4
|
1,996
|
|||||||||||||
|
Issuance of common stock for services, March ($0.485, per share)
|
150,000
|
150
|
72,600
|
|||||||||||||
|
Issuance of common stock for services, March ($0.49, per share)
|
600,000
|
600
|
293,400
|
|||||||||||||
|
Write off uncollectible stock subscription receivable, March
|
(155,000
|
)
|
||||||||||||||
|
Value of the beneficial conversion feature for the issuance of convertible debt
|
248,889
|
|||||||||||||||
|
Issuance of common stock for cash, April ($0.34, per share)
|
40,000
|
40
|
13,560
|
|||||||||||||
|
Issuance of common stock for cash, April ($0.36, per share)
|
24,000
|
24
|
8,568
|
|||||||||||||
|
Issuance of common stock for cash, April ($0.39, per share)
|
1,795
|
2
|
698
|
|||||||||||||
|
Issuance of common stock for cash, April ($0.42, per share)
|
3,570
|
4
|
1,496
|
|||||||||||||
|
Issuance of common stock for cash, April ($0.43, per share)
|
2,500
|
2
|
1,073
|
|||||||||||||
|
Issuance of common stock for cash, April ($0.44, per share)
|
7,955
|
8
|
3,492
|
|||||||||||||
|
Issuance of common stock for cash, April ($0.45, per share)
|
10,000
|
10
|
4,490
|
28
|
Issuance of common stock for services, April ($0.49, per share)
|
55,000
|
55
|
26,895
|
|||||||||||||
|
Issuance of common stock for cash, May ($0.35, per share)
|
28,572
|
29
|
9,971
|
|||||||||||||
|
Issuance of common stock for cash, May ($0.40, per share)
|
14,000
|
14
|
5,586
|
|||||||||||||
|
Issuance of common stock for cash, May ($0.44, per share)
|
116,500
|
116
|
51,144
|
|||||||||||||
|
Issuance of common stock for cash, June ($0.28, per share)
|
25,000
|
25
|
6,975
|
|||||||||||||
|
Issuance of common stock for cash, June ($0.30, per share)
|
11,000
|
11
|
3,289
|
|||||||||||||
|
Issuance of common stock for cash, June ($0.31, per share)
|
1,000
|
1
|
309
|
|||||||||||||
|
Issuance of common stock for cash, June ($0.32, per share)
|
3,750
|
4
|
1,196
|
|||||||||||||
|
Issuance of common stock for services, June ($0.38, per share)
|
150,000
|
150
|
56,850
|
|||||||||||||
|
Issuance of common stock for services, June ($0.41, per share)
|
100,000
|
100
|
40,400
|
|||||||||||||
|
Payment received for stock subscription receivable, June
|
||||||||||||||||
|
Issuance of common stock for cash, July ($0.21, per share)
|
76,190
|
76
|
15,924
|
|||||||||||||
|
Issuance of common stock for conversion of notes, July ($0.24, per share)
|
207,727
|
208
|
49,792
|
|||||||||||||
|
Issuance of common stock for cash, August ($0.19, per share)
|
65,788
|
66
|
12,434
|
|||||||||||||
|
Issuance of common stock for conversion of notes, August ($0.19, per share)
|
393,288
|
393
|
74,607
|
|||||||||||||
|
Issuance of common stock for cash, August ($0.20, per share)
|
22,500
|
23
|
4,477
|
|||||||||||||
|
Issuance of common stock for cash, September ($0.17, per share)
|
1,500,000
|
1,500
|
253,500
|
|||||||||||||
|
Issuance of common stock for conversion of notes, September ($0.18, per share)
|
269,472
|
269
|
49,731
|
|||||||||||||
|
Forfeiture of common stock issued for services, September
|
(600,000
|
)
|
(600
|
)
|
(293,400
|
)
|
||||||||||
|
Common stock commitment at $0.25 - $0.27
|
||||||||||||||||
|
Issuance of common stock for cash, October ($0.17, per share)
|
20,589
|
21
|
3,479
|
|||||||||||||
|
Issuance of common stock for cash, October ($0.18, per share)
|
20,000
|
20
|
3,580
|
|||||||||||||
|
Issuance of common stock for cash, October ($0.19, per share)
|
52,632
|
53
|
9,947
|
|||||||||||||
|
Issuance of common stock for cash, November ($0.14, per share)
|
2,000
|
2
|
278
|
|||||||||||||
|
Issuance of common stock for cash, November ($0.15, per share)
|
1,333
|
1
|
199
|
|||||||||||||
|
Issuance of common stock for cash, December ($0.104, per share)
|
10,000
|
10
|
1,030
|
|||||||||||||
|
Issuance of common stock for conversion of notes, October ($0.155, per share)
|
258,732
|
259
|
39,741
|
|||||||||||||
|
Issuance of common stock for conversion of notes, November ($0.156, per share)
|
244,059
|
244
|
37,756
|
29
|
Issuance of common stock for services, November ($0.23, per share)
|
5,000
|
5
|
1,145
|
|||||||||||||
|
Issuance of common stock for services, December ($0.15, per share)
|
2,500
|
2
|
373
|
|||||||||||||
|
Issuance of warrants for services, December
|
97,714
|
|||||||||||||||
|
Net loss
|
(2,569,223
|
)
|
||||||||||||||
|
Balance December 31, 2010
|
45,844,161
|
$
|
45,842
|
$
|
12,526,812
|
$
|
(14,133,147
|
)
|
||||||||
|
Issuance of common stock for settlement of accounts payable, January ($0.15, per share)
|
443,667
|
444
|
66,106
|
|||||||||||||
|
Issuance of common stock for services, January ($0.15, per share)
|
2,500
|
3
|
373
|
|||||||||||||
|
Issuance of common stock for accrued payroll, January ($0.10, per share)
|
150,000
|
150
|
14,850
|
|||||||||||||
|
Issuance of common stock for services, January ($0.24, per share)
|
300,000
|
300
|
71,700
|
|||||||||||||
|
Issuance of common stock for cash, February ($0.10, per share)
|
401,000
|
401
|
39,699
|
|||||||||||||
|
Issuance of common stock for services, February ($0.25, per share)
|
700,000
|
700
|
174,300
|
|||||||||||||
|
Issuance of common stock for services, February ($0.27, per share)
|
100,000
|
100
|
26,900
|
|||||||||||||
|
Issuance of common stock for cash, March ($0.10, per share)
|
997,000
|
997
|
98,703
|
|||||||||||||
|
Value of the beneficial conversion feature for the issuance of convertible debt
|
7,000
|
|||||||||||||||
|
Issuance of common stock for conversion of note, March ($0.15, per share)
|
166,667
|
167
|
24,833
|
|||||||||||||
|
Issuance of common stock for cash, April ($0.10, per share)
|
260,000
|
260
|
25,740
|
|||||||||||||
|
Issuance of common stock for cash, April ($0.14, per share)
|
71,428
|
71
|
9,929
|
|||||||||||||
|
Issuance of common stock for conversion of note, April ($0.15, per share)
|
166,667
|
167
|
24,833
|
|||||||||||||
|
Issuance of common stock for cash, April ($0.17, per share)
|
82,353
|
82
|
13,918
|
|||||||||||||
|
Issuance of common stock for services, April ($0.27, per share)
|
65,000
|
65
|
17,972
|
|||||||||||||
|
Issuance of common stock for services, April ($0.15, per share)
|
3,000,000
|
3,000
|
447,000
|
|||||||||||||
|
Issuance of common stock for cash, April ($0.13, per share)
|
106,154
|
106
|
13,694
|
|||||||||||||
|
Issuance of common stock for cash, June ($0.10, per share)
|
6,000
|
6
|
594
|
|||||||||||||
|
Issuance of common stock for services, June ($0.13, per share)
|
250,000
|
250
|
32,250
|
|||||||||||||
|
Issuance of common stock for cash, June ($0.18, per share)
|
2,000
|
2
|
358
|
|||||||||||||
|
Issuance of common stock for cash, July ($0.10, per share)
|
200,000
|
200
|
19,800
|
|||||||||||||
|
Issuance of common stock for services, July ($0.14, per share)
|
250,000
|
250
|
34,750
|
|||||||||||||
|
Issuance of common stock subscription, July
|
||||||||||||||||
|
Issuance of common stock for settlement of accounts payable, July ($0.14, per share)
|
169,734
|
170
|
23,593
|
|||||||||||||
|
Issuance of common stock for cash, August ($0.08, per share)
|
130,000
|
130
|
10,270
|
|||||||||||||
|
Issuance of common stock for cash, September ($0.10, per share)
|
9,615
|
10
|
990
|
|||||||||||||
|
Issuance of common stock for cash, September ($0.18, per share)
|
2,000
|
2
|
358
|
|||||||||||||
|
Issuance of warrants for services, September
|
104,778
|
|||||||||||||||
|
Issuance of common stock for services, October ($0.05, per share)
|
50,000
|
50
|
2,450
|
|||||||||||||
|
Issuance of common stock for cash, October ($0.10, per share)
|
50,000
|
50
|
4,950
|
|||||||||||||
|
Issuance of common stock for settlement of accounts payable, October ($0.10, per share)
|
578,000
|
578
|
57,222
|
|||||||||||||
|
Issuance of common stock for services, October ($0.10, per share)
|
850,000
|
850
|
84,150
|
|||||||||||||
|
Issuance of common stock for services, October ($0.14, per share)
|
100,000
|
100
|
13,900
|
|||||||||||||
|
Issuance of common stock for services, October ($0.20, per share)
|
1,000,000
|
1,000
|
199,000
|
|||||||||||||
|
Issuance of warrants for services, October
|
83,847
|
|||||||||||||||
|
Commitment for common stock for cash, November ($0.05 per share)
|
||||||||||||||||
|
Amortization of stock for services
|
||||||||||||||||
|
Net loss
|
(2,238,011
|
)
|
||||||||||||||
|
Balance December 31, 2011
|
56,503,946
|
$
|
56,503
|
$
|
14,277,622
|
$
|
(16,371,158
|
)
|
30
|
Deferred
Non-Cash
Offering
Costs
|
Common
Stock
Payable
|
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
|
|||||||||||||||||||
31
|
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
|
32
|
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
|
33
|
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
|
34
|
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
|
35
|
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
|
29,000
|
29,000
|
||||||||||||||||||
|
Amortization of prepaid services paid for with common stock
|
98,058
|
98,058
|
||||||||||||||||||
|
Issuance of common stock for cash, February ($0.15, per share)
|
20,250
|
|||||||||||||||||||
|
Issuance of common stock for cash, February ($0.16, per share)
|
50,947
|
|||||||||||||||||||
|
Issuance of common stock for cash, February ($0.17, per share)
|
27,140
|
|||||||||||||||||||
|
Issuance of common stock for cash, February ($0.18, per share)
|
1,800
|
|||||||||||||||||||
|
Issuance of common stock for cash, February ($0.23, per share)
|
127,250
|
|||||||||||||||||||
|
Issuance of common stock for settlement of accounts payable, February ($0.261, per share)
|
31,624
|
|||||||||||||||||||
|
Issuance of common stock for cash, February ($0.30, per share)
|
30,300
|
|||||||||||||||||||
|
Issuance of common stock for cash, February ($0.333, per share)
|
33,333
|
|||||||||||||||||||
|
Issuance of common stock for cash, February ($0.42, per share)
|
13,860
|
|||||||||||||||||||
|
Issuance of common stock for services, February ($0.475, per share)
|
(6,650
|
)
|
||||||||||||||||||
|
Issuance of common stock for services, February ($0.575, per share)
|
(11,500
|
)
|
||||||||||||||||||
|
Issuance of common stock for cash, March ($0.18, per share)
|
1,800
|
|||||||||||||||||||
|
Issuance of common stock for cash, March ($0.21, per share)
|
1,000
|
|||||||||||||||||||
|
Issuance of common stock for cash, March ($0.28, per share)
|
(100,000
|
)
|
||||||||||||||||||
|
Issuance of common stock for cash, March ($0.294, per share)
|
2,000
|
36
|
Issuance of common stock for cash, March ($0.30, per share)
|
45,800
|
|||||||||||||||||||
|
Issuance of common stock for cash, March ($0.35, per share)
|
2,100
|
|||||||||||||||||||
|
Issuance of common stock for cash, March ($0.37, per share)
|
5,000
|
|||||||||||||||||||
|
Issuance of common stock for cash, March ($0.38, per share)
|
19,000
|
|||||||||||||||||||
|
Issuance of common stock for cash, March ($0.39, per share)
|
400
|
|||||||||||||||||||
|
Issuance of common stock for cash, March ($0.40, per share)
|
1,200
|
|||||||||||||||||||
|
Issuance of common stock for settlement of accounts payable, March ($0.269 per share)
|
21,500
|
|||||||||||||||||||
|
Issuance of common stock for settlement of accounts payable, March ($0.53, per share)
|
2,000
|
|||||||||||||||||||
|
Issuance of common stock for services, March ($0.485, per share)
|
72,750
|
|||||||||||||||||||
|
Issuance of common stock for services, March ($0.49, per share)
|
(294,000
|
)
|
||||||||||||||||||
|
Write off uncollectible stock subscription receivable, March
|
155,000
|
|||||||||||||||||||
|
Value of the beneficial conversion feature for the issuance of convertible debt
|
248,889
|
|||||||||||||||||||
|
Issuance of common stock for cash, April ($0.34, per share)
|
13,600
|
|||||||||||||||||||
|
Issuance of common stock for cash, April ($0.36, per share)
|
8,592
|
|||||||||||||||||||
|
Issuance of common stock for cash, April ($0.39, per share)
|
700
|
|||||||||||||||||||
|
Issuance of common stock for cash, April ($0.42, per share)
|
1,500
|
|||||||||||||||||||
|
Issuance of common stock for cash, April ($0.43, per share)
|
1,075
|
|||||||||||||||||||
|
Issuance of common stock for cash, April ($0.44, per share)
|
3,500
|
|||||||||||||||||||
|
Issuance of common stock for cash, April ($0.45, per share)
|
4,500
|
|||||||||||||||||||
|
Issuance of common stock for services, April ($0.49, per share)
|
26,950
|
|||||||||||||||||||
|
Issuance of common stock for cash, May ($0.35, per share)
|
10,000
|
|||||||||||||||||||
|
Issuance of common stock for cash, May ($0.40, per share)
|
5,600
|
|||||||||||||||||||
|
Issuance of common stock for cash, May ($0.44, per share)
|
51,260
|
|||||||||||||||||||
|
Issuance of common stock for cash, June ($0.28, per share)
|
7,000
|
|||||||||||||||||||
|
Issuance of common stock for cash, June ($0.30, per share)
|
3,300
|
37
|
Issuance of common stock for cash, June ($0.31, per share)
|
310
|
|||||||||||||||||||
|
Issuance of common stock for cash, June ($0.32, per share)
|
1,200
|
|||||||||||||||||||
|
Issuance of common stock for services, June ($0.38, per share)
|
57,000
|
|||||||||||||||||||
|
Issuance of common stock for services, June ($0.41, per share)
|
40,500
|
|||||||||||||||||||
|
Payment received for stock subscription receivable, June
|
100,000
|
100,000
|
||||||||||||||||||
|
Issuance of common stock for cash, July ($0.21, per share)
|
16,000
|
|||||||||||||||||||
|
Issuance of common stock for conversion of notes, July ($0.24, per share)
|
50,000
|
|||||||||||||||||||
|
Issuance of common stock for cash, August ($0.19, per share)
|
12,500
|
|||||||||||||||||||
|
Issuance of common stock for conversion of notes, August ($0.19, per share)
|
75,000
|
|||||||||||||||||||
|
Issuance of common stock for cash, August ($0.20, per share)
|
4,500
|
|||||||||||||||||||
|
Issuance of common stock for cash, September ($0.17, per share)
|
255,000
|
|||||||||||||||||||
|
Issuance of common stock for conversion of notes, September ($0.18, per share)
|
50,000
|
|||||||||||||||||||
|
Forfeiture of common stock issued for services, September
|
294,000
|
|||||||||||||||||||
|
Common stock commitment at $0.25 - $0.27
|
274,000
|
(193,596
|
)
|
80,404
|
||||||||||||||||
|
Issuance of common stock for cash, October ($0.17, per share)
|
3,500
|
|||||||||||||||||||
|
Issuance of common stock for cash, October ($0.18, per share)
|
3,600
|
|||||||||||||||||||
|
Issuance of common stock for cash, October ($0.19, per share)
|
10,000
|
|||||||||||||||||||
|
Issuance of common stock for cash, November ($0.14, per share)
|
280
|
|||||||||||||||||||
|
Issuance of common stock for cash, November ($0.15, per share)
|
200
|
|||||||||||||||||||
|
Issuance of common stock for cash, December ($0.104, per share)
|
1,040
|
|||||||||||||||||||
|
Issuance of common stock for conversion of notes, October ($0.155, per share)
|
40,000
|
38
|
Issuance of common stock for conversion of notes, November ($0.156, per share)
|
38,000
|
|||||||||||||||||||
|
Issuance of common stock for services, November ($0.23, per share)
|
1,150
|
|||||||||||||||||||
|
Issuance of common stock for services, December ($0.15, per share)
|
375
|
|||||||||||||||||||
|
Issuance of warrants for services, December
|
97,714
|
|||||||||||||||||||
|
Net loss
|
(2,569,223
|
)
|
||||||||||||||||||
|
December 31, 2010
|
$
|
274,000
|
$
|
(193,596
|
)
|
$
|
(12,000
|
)
|
$
|
(1,492,089
|
)
|
|||||||||
|
Issuance of common stock for settlement of accounts payable, January ($0.15, per share)
|
66,550
|
|||||||||||||||||||
|
Issuance of common stock for services, January ($0.15, per share)
|
376
|
|||||||||||||||||||
|
Issuance of common stock for accrued payroll, January ($0.10, per share)
|
15,000
|
|||||||||||||||||||
|
Issuance of common stock for services, January ($0.24, per share)
|
(72,000
|
) | ||||||||||||||||||
|
Issuance of common stock for cash, February ($0.10, per share)
|
40,100
|
|||||||||||||||||||
|
Issuance of common stock for services, February ($0.25, per share)
|
(175,000
|
) | ||||||||||||||||||
|
Issuance of common stock for services, February ($0.27, per share)
|
(27,000
|
) | ||||||||||||||||||
|
Issuance of common stock for cash, March ($0.10, per share)
|
99,700
|
|||||||||||||||||||
|
Value of beneficial conversion feature for the issuance of convertible debt
|
7,000
|
|||||||||||||||||||
|
Issuance of common stock for conversion of note, March ($0.15, per share)
|
25,000
|
|||||||||||||||||||
|
Issuance of common stock for cash, April ($0.10, per share)
|
26,000
|
|||||||||||||||||||
|
Issuance of common stock for cash, April ($0.14, per share)
|
10,000
|
|||||||||||||||||||
|
Issuance of common stock for conversion of note, April ($0.15, per share)
|
25,000
|
|||||||||||||||||||
|
Issuance of common stock for cash, April ($0.17, per share)
|
14,000
|
|||||||||||||||||||
|
Issuance of common stock for services, April ($0.27, per share)
|
18,037
|
39
|
Issuance of common stock for services, April ($0.15, per share)
|
450,000
|
|||||||||||||||||||
|
Issuance of common stock for cash, April ($0.13, per share)
|
13,800
|
|||||||||||||||||||
|
Issuance of common stock for cash, June ($0.10, per share)
|
600
|
|||||||||||||||||||
|
Issuance of common stock for services, June ($0.13, per share)
|
32,500
|
|||||||||||||||||||
|
Issuance of common stock for cash, June ($0.18, per share)
|
360
|
|||||||||||||||||||
|
Issuance of common stock for cash, July ($0.10, per share)
|
20,000
|
|||||||||||||||||||
|
Issuance of common stock for services, July ($0.14, per share)
|
35,000
|
|||||||||||||||||||
|
Issuance of common stock subscription, July
|
(200,000
|
) |
(200,000
|
) | ||||||||||||||||
|
Issuance of common stock for settlement of accounts payable, July ($0.14, per share)
|
23,763
|
|||||||||||||||||||
|
Issuance of common stock for cash, August ($0.08, per share)
|
10,400
|
|||||||||||||||||||
|
Issuance of common stock for cash, September ($0.10, per share)
|
1,000
|
|||||||||||||||||||
|
Issuance of common stock for cash, September ($0.18, per share)
|
360
|
|||||||||||||||||||
|
Issuance of warrants for services, September
|
104,778
|
|||||||||||||||||||
|
Issuance of common stock for services, October ($0.05, per share)
|
2,500
|
|||||||||||||||||||
|
Issuance of common stock for cash, October ($0.10, per share)
|
5,000
|
|||||||||||||||||||
|
Issuance of common stock for settlement of accounts payable, October ($0.10, per share)
|
57,800
|
|||||||||||||||||||
|
Issuance of common stock for services, October ($0.10, per share)
|
85,000
|
|||||||||||||||||||
|
Issuance of common stock for services, October ($0.14, per share)
|
14,000
|
|||||||||||||||||||
|
Issuance of common stock for services, October ($0.20, per share)
|
200,000
|
|||||||||||||||||||
|
Issuance of warrants for services, October
|
83,847
|
|||||||||||||||||||
|
Commitment for common stock, November ($0.05 per share)
|
3,650
|
3,650
|
||||||||||||||||||
|
Amortization of stock for services
|
110,868
|
110,868
|
||||||||||||||||||
|
Net loss
|
(2,238,011
|
) | ||||||||||||||||||
|
December 31, 2011
|
|
$
|
3,650
|
$
|
(82,728
|
)
|
$
|
(212,000
|
)
|
$
|
(2,328,111
|
)
|
40
(A Development Stage Company)
Statements of Cash Flows
|
Year Ended December 31,
|
Period November 27, 2000 (Date of Inception) through December 31, 2011 |
|||||||||||
|
2011
|
2010
|
|||||||||||
|
Operating activities
|
||||||||||||
|
Net loss
|
$
|
(2,238,011
|
)
|
$
|
(2,569,223
|
)
|
$
|
(16,371,158
|
)
|
|||
|
Adjustments to reconcile net loss to net cash used by operating activities:
|
||||||||||||
|
Common stock and long-term debt issued for acquisition of license agreement
|
2,735,649
|
|||||||||||
|
Common stock, options and warrants issued for services and amortization of common stock issued for services
|
1,038,270
|
474,900
|
5,040,790
|
|||||||||
|
Contribution from shareholder
|
188,706
|
|||||||||||
|
Amortization of beneficial conversion feature
|
15,315
|
251,803
|
539,876
|
|||||||||
|
Amortization of deferred loan costs
|
24,750
|
|||||||||||
|
Write off deferred offering costs
|
119,383
|
|||||||||||
|
Write off of deferred non cash offering costs
|
49,120
|
|||||||||||
|
Gain on disposal of fixed assets
|
(1,965
|
)
|
(1,965
|
)
|
||||||||
|
Depreciation
|
3,838
|
4,837
|
50,946
|
|||||||||
|
Amortization of agency fee
|
42,632
|
57,368
|
100,000
|
|||||||||
|
Amortization of discount on notes payable
|
33,858
|
|||||||||||
|
Decrease (increase) in prepaid expenses
|
4,059
|
(98,891
|
)
|
(7,118
|
)
|
|||||||
|
Increase (decrease) in:
|
||||||||||||
|
Accounts payable
|
72,722
|
77,886
|
325,128
|
|||||||||
|
Accrued expenses
|
32,256
|
4,000
|
305,506
|
|||||||||
|
Accrued payroll
|
326,845
|
|
(5,398
|
)
|
601,856
|
|||||||
|
Accrued royalty fees
|
250,000
|
250,000
|
1,718,167
|
|||||||||
|
Accrued interest
|
237
|
369
|
14,955
|
|||||||||
|
Net cash used by operating activities
|
(451,837
|
)
|
(1,554,314
|
)
|
(4,531,551
|
)
|
||||||
|
Investing activities
|
||||||||||||
|
Payments for agency rights
|
(100,000
|
)
|
(100,000
|
)
|
||||||||
|
Issuance of notes receivable from stockholders
|
(23,000
|
)
|
||||||||||
|
Repayment of notes receivable from stockholders
|
22,095
|
|||||||||||
|
Advances to related party
|
805
|
|||||||||||
|
Proceeds from sale of fixed assets
|
2,500
|
2,500
|
||||||||||
|
Purchase of fixed assets
|
(3,609
|
)
|
(4,459
|
)
|
(53,538
|
)
|
||||||
|
Net cash used by investing activities
|
(3,609
|
)
|
(101,959
|
)
|
(151,138
|
)
|
||||||
|
Financing activities
|
||||||||||||
|
Repayment of stockholder advances
|
(157,084
|
)
|
||||||||||
|
Advances from stockholders
|
5,000
|
271,152
|
||||||||||
|
Increase in deferred offering costs
|
(194,534
|
)
|
||||||||||
|
Proceeds from issuance of common stock
|
241,320
|
930,936
|
3,877,793
|
|||||||||
|
Proceeds from exercise of options
|
45,000
|
|||||||||||
|
Debt issuance cots
|
(19,750
|
)
|
||||||||||
|
Repayment of convertible notes payable
|
(23,000
|
)
|
||||||||||
|
Proceeds from issuance of convertible notes payable
|
92,500
|
250,000
|
894,750
|
|||||||||
|
Net cash provided by financing activities
|
338,820
|
1,180,936
|
4,694,327
|
|||||||||
|
Net (decrease) increase in cash
|
(116,626
|
)
|
(475,337
|
)
|
11,638
|
|||||||
|
Cash at beginning of year/period
|
128,264
|
603,601
|
||||||||||
|
Cash at end of year/period
|
$
|
11,638
|
$
|
128,264
|
$
|
11,638
|
||||||
The accompanying notes are an integral part of the financial statements.
41
|
Year Ended
December 31,
|
Period
November 27,
2000 (Date of
Inception)
through
December 31,
2011
|
|||||||||||
|
2011
|
2010
|
|||||||||||
|
Supplemental disclosures of cash flow information and non cash investing and financing activities:
|
||||||||||||
|
Cash paid for interest
|
$
|
0
|
$
|
0
|
$
|
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 non-cash 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 prepaid services
|
$
|
99,000
|
$
|
409,864
|
$
|
2,344,164
|
||||||
|
Common stock issued in exchange for accrued royalties
|
$
|
0
|
$
|
0
|
$
|
416,667
|
||||||
|
Receivable issued for exercise of common stock options
|
$
|
200,000
|
$
|
0
|
$
|
367,000
|
||||||
|
Common stock issued in exchange for fixed assets
|
$
|
0
|
$
|
0
|
$
|
5,000
|
||||||
|
Acquisition of agency fee intangible through accrued expenses
|
$
|
0
|
$
|
900,000
|
$
|
900,000
|
||||||
|
Beneficial conversion feature on convertible notes payable
|
$
|
7,000
|
$
|
251,803
|
$
|
531,561
|
||||||
|
Conversion of convertible debt to equity since inception (7,340,152 shares of common stock)
|
$
|
50,000
|
$
|
253,000
|
$
|
772,000
|
||||||
|
Common stock issued for accounts payable
|
$
|
118,713
|
$
|
55,125
|
$
|
208,838
|
||||||
|
Write off uncollectible stock subscription receivables
|
$
|
0
|
$
|
155,000
|
$
|
155,000
|
||||||
|
Common stock issued for accrued payroll
|
$
|
15,000
|
$
|
0
|
$
|
15,000
|
||||||
|
Write off of intangible asset and agency fee payable
|
$
|
900,000
|
$
|
0
|
$
|
900,000
|
||||||
|
Issuance of common stock payable to employees
|
$
|
0
|
$
|
274,000
|
$
|
274,000
|
||||||
|
Common stock issued for accrued expenses
|
$
|
29,400
|
$
|
0
|
$
|
29,400
|
||||||
|
Derivative liability and debt discount
|
$
|
42,500
|
$
|
0
|
$
|
42,500
|
||||||
The accompanying notes are an integral part of the financial statements.
42
(A Development Stage Enterprise)
Notes to Financial Statements
For the Years Ended December 31, 2011 and 2010,
and the Period November 27, 2000 (Date of Inception)
through December 31, 2011
|
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, and converted to a Nevada corporation in 2008 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 Paisley, Florida.
The Company’s planned lines of business are 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.
|
2.
|
Going Concern
|
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. For the year ended December 31, 2011 and since November 27, 2000 (date of inception) through December 31, 2011, the Company had a net loss of $2,238,011 and $16,371,158, respectively. As of December 31, 2011, the Company has not emerged from the development stage and has a working capital deficit of $122,333. 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. 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.
|
3.
|
Significant Accounting Policies
|
The significant accounting policies followed are:
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
43
Cash is maintained at financial institutions and, at times, balances may exceed federally insured limits. We have never experienced any losses related to these balances. All of our non-interest bearing cash balances were fully insured at December 31, 2011 and 2010 due to a temporary federal program in effect from December 31, 2010 through December 31, 2012. Under the program, there is no limit to the amount of insurance for eligible accounts. Beginning 2013, insurance coverage will revert to $250,000 per depositor at each financial institution, and our non-interest bearing cash balances may again exceed federally insured limits. At December 31, 2011 and 2010, there were no amounts held in interest bearing accounts.
The Company’s financial instruments include cash, accounts payable, accrued liabilities and notes payable. The carrying amounts of cash, accounts payable and accrued liabilities approximate their fair value, due to the short-term nature of these items. The carrying amount of notes payable approximates their fair value due to the use of market rates of interest and maturity schedules for similar issues. The derivative liability is recorded at fair value (see Note 11).
Furniture and equipment are recorded at cost and depreciated on a declining balance and straight-line basis over their estimated useful lives, principally two to seven years. Accelerated methods are used for tax depreciation. Maintenance and repairs are charged to operations when incurred. Betterments and renewals are capitalized. When furniture and equipment are sold or otherwise disposed of, the asset account and related accumulated depreciation account are relieved, and any gain or loss is included in operations.
The Company evaluates the recoverability of its long-lived assets or asset groups whenever adverse events or changes in business climate indicate that the expected undiscounted future cash flows from the related assets may be less than previously anticipated. If the net book value of the related assets exceed the undiscounted future cash flows of the assets, the carrying amount would be reduced to the present value of their expected future cash flows and an impairment loss would be recognized. There have been no impairment losses in any of the periods presented.
Research and development costs are charged to operations when incurred and are included in operating expenses. The amounts charged for the year ended December 31, 2011 and 2010 and the period November 27, 2000 (date of inception) to December 31, 2011 amounted to $146,779, $208,565 and $3,882,494, respectively.
Deferred income tax assets and liabilities arise from temporary differences associated with differences between the financial statements and tax basis of assets and liabilities, as measured by the enacted tax rates, which are expected to be in effect when these differences reverse. Deferred tax assets and liabilities are classified as current or non-current, depending on the classification of the assets or liabilities to which they relate. Deferred tax assets and liabilities not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse. The principal types of temporary differences between assets and liabilities for financial statements and tax return purposes are set forth in Note 8.
The Company follows the provisions of FASB ASC 740-10 “Uncertainty in Income Taxes” (ASC 740-10), January 1, 2007. The Company has not recognized a liability as a result of the implementation of ASC 740-10. A reconciliation of the beginning and ending amount of unrecognized tax benefits has not been provided since there are no unrecognized benefits at December 31, 2011 or 2010 and since the date of adoption. The Company has not recognized interest expense or penalties as a result of the implementation of ASC 740-10. If there were an unrecognized tax benefit, the Company would recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses.
Basic earnings per share are computed by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per common share are computed by dividing net income by the weighted average number of shares of common stock outstanding and dilutive options outstanding during the year. Common stock equivalents for the years ended December 31, 2011 and 2010 were anti-dilutive due to the net losses sustained by the Company during these periods. For the years ended December 31, 2011 and 2010 potentially dilutive common stock options and warrants of 5,405,413and 3,215,413 have been excluded from dilutive earnings per share due to the Company’s losses in all periods presented. Additionally, a convertible note payable was convertible into approximately 1,801,000 shares of common stock based on the conversion price at December 31, 2011.
44
The Company recognizes all share-based payments to employees, including grants of employee stock options, as compensation expense in the financial statements based on their fair values. That expense will be recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period).
The value of each grant is estimated at the grant date using the Black-Scholes option model with the following assumptions for options granted during the years ended December 31, 2011 and 2010:
| Years Ended December 31, | ||||||||
|
2011
|
2010
|
|||||||
|
Dividend rate
|
0 | % | 0 | % | ||||
|
Risk free interest rate
|
0.87% - 2.21 | % | 1.49% - 2.04 | % | ||||
|
Expected term
|
5 years
|
5 years
|
||||||
|
Expected volatility
|
119.6% - 168.1 | % | 168.9% - 176 | % | ||||
The basis for the above assumptions are as follows: the dividend rate is based upon the Company’s history of dividends; the risk-free interest rate for periods within the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of grant; the expected term was calculated based on the Company’s historical pattern of options granted and the period of time they are expected to be outstanding; expected volatility was based on the Company’s historical market price at consistent points in a period equal to the expected life of the options. The Company estimates forfeitures both at the date of grant as well as throughout the requisite service periods based on the Company’s historical experience and future expectations.
The Company issues common stock and common stock options and warrants to consultants for various services. For these transactions, the Company follows the guidance in FASB ASC Topic 505. Costs for these transactions are measured at the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measureable. 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 instrument is reached or (ii) the date at which the counterparty’s performance is complete. For the periods ended December 31, 2011 and 2010, the Company recognized $560,000 and $98,058, respectively, in consulting expenses (see Note 7).
|
3.
|
Significant Accounting Policies (continued)
|
In September 2006, the Financial Accounting Standards Board (FASB) introduced a framework for measuring fair value and expanded required disclosure about fair value measurements of assets and liabilities. The Company adopted the standard for those financial assets and liabilities as of the beginning of the 2008 fiscal year and the impact of adoption was not significant. FASB Accounting Standards Codification (ASC) 820 “Fair Value Measurements and Disclosures” (ASC 820) defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:
|
●
|
Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.
|
|
●
|
Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means.
|
|
●
|
Level 3 - Inputs that are both significant to the fair value measurement and unobservable.
|
45
Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of December 31, 2011. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments. These financial instruments include accounts receivable, other current assets, accounts payable, accrued compensation and accrued expenses. The Company had a derivative liability associated with an embedded conversion option that is included as a level 2 input (see Note 11).
Recent accounting pronouncements
Other recent accounting pronouncements issued by the FASB (including its EITF), the AICPA, and the SEC did not or are not believed by management to have a material impact on the Company’s present or future financial statements.
|
4.
|
Option to Acquire License
|
In July 2002, the Company exercised its option to obtain a license to commercially exploit certain turbine truck engine technology owned by Alpha. The original agreement required the Company to complete and file a registration statement with the Securities and Exchange Commission (SEC) and once the public offering was filed and declared effective by the SEC, Alpha was to grant the license in exchange for 10,000,000 shares of common stock of the Company and other licensing considerations as follows:
|
●
|
Licensing fee – $250,000 licensing note payable on August 23, 2005 or agreement is terminated;
|
|
●
|
Minimum royalties – $250,000 due minimum royalty payment each year once licensing note is settled;
|
|
●
|
Royalties – eight percent of net sales after manufacturing and sales commence; and
|
|
●
|
Contract fees for design and engineering services.
|
In July 2002, Alpha modified the agreement to allow the Company to acquire the license agreement in advance of completing its registration statement and accepted a note as payment for the licensing fee and for the issuance of 5,000,000 shares of common stock in lieu of the original 10,000,000 shares. The value of these shares was based on $0.50 per share, which was the issuance price for common stock under the Company’s private placement offering. In August 2003 and 2004, the agreement was further amended to extend the term of the note and to establish that minimum royalty payments shall begin after the note is settled.
During the year ended December 31, 2005, the Company issued 125,000 shares of common stock in satisfaction of the $250,000 note and the accrual of the minimum royalty fees began. In addition, during the year ended December 31, 2006, the Company paid $416,667 of royalty fees through the issuance of 100,000 shares of common stock. As of December 31, 2011 and 2010, the Company has accrued $1,301,500 and $1,051,500 of royalty fees related to this agreement, respectively.
Alpha owns the patents to a new gas turbine engine system called Detonation Cycle Gas Turbine Engine (DCGT). Alpha is in the business of licensing the use of its DCGT technology for many different applications, including the manufacture of heavy duty highway truck engines. Alpha and CNF Transportation (formerly Consolidated Freightways, Inc.) have an agreement to form and finance a potential 50/50 joint venture after the demonstration of a highway truck engine for the manufacture and marketing of heavy duty highway truck engines, both for the fleet of CNF Transportation and exclusive sales to the highway trucking industry. CNF Transportation is a large, over the road freight hauling company and manufacturer of heavy duty highway trucks. Upon the receipt of its licensing agreement with Alpha, the Company has assumed Alpha’s right to enter into this joint venture.
46
The Company has recognized $2,735,649 of research and development expense since inception related to the license agreement, as the license is exclusively for the development, manufacturing and sales of the DCGT and has no future economic benefit relative to other research and development projects.
|
5.
|
Furniture and equipment
|
Furniture and equipment at December 31 consist of the following:
|
2011
|
2010
|
|||||||
|
Furniture and fixtures
|
$
|
1,505
|
$
|
1,505
|
||||
|
Equipment
|
18,091
|
14,482
|
||||||
|
Leasehold improvements
|
35,323
|
35,323
|
||||||
|
54,919
|
51,310
|
|||||||
|
Less accumulated depreciation and amortization
|
47,863
|
44,025
|
||||||
|
$
|
7,056
|
$
|
7,285
|
|||||
|
6.
|
Options and warrants
|
The Company’s 2008 Incentive Compensation Plan (the 2008 Plan) authorizes up to 5,000,000 shares of common stock to employees or consultants, unless contained in the written award approved by the Board of Directors. The Company granted 1,600,000 options to consultants under this plan during the year ended December 31, 2011. During the year ended December 31, 2011, the Company adopted the 2011 Incentive Compensation Plan (the 2011 Plan) which superseded the 2008 Plan. As a result, there are no future options are to be issued from the Company’s 2008 Plan.
The Company’s 2011 Plan authorizes up to 5,000,000 shares of common stock to persons employed by the Company either as an employee, officer, director or independent consultant or other person employed by the Company, provided that no person can be granted shares under the 2011 Plan for services related to raising capital or promotional activities. There are no restrictions on resale upon the purchases of the stock from the employees or the consultants, unless contained in the written award approved by the Board of Directors. During 2011, the Company granted 850,000 common stock options to consultants, directors and employees related to the Plan. As of December 31, 2011, 4,150,000 shares are available under the Plan for future grants.
The fair value of each option under the 2008 and 2011 Incentive Compensation Plans were 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.
The aggregate intrinsic value of options outstanding and exercisable at December 31, 2011, based on the Company’s closing stock price of $0.04 was $0. The aggregate intrinsic value of options outstanding and exercisable at December 31, 2010, based on the Company’s closing stock price of $0.10 was $45,000. Intrinsic value is the amount by which the fair value of the underlying stock exceeds the exercise price of the options.
During the year ended December 31, 2011, the Company issued 800,000 warrants in conjunction with the issuance of common stock. The warrants entitle the holder to purchase 800,000 shares of the Company’s common stock at any time, at an exercise price of $0.30 per share.
47
The following table represents our stock option and warrant activity for the years ended December 31, 2011:
|
Shares
|
Range of Exercise
Prices
|
Weighted Average
Grant Date
Fair Value |
||||||||||
|
Outstanding and Exercisable
|
||||||||||||
|
Outstanding at December 31, 2010
|
3,215,413
|
$
|
0.10 – 2.00
|
|||||||||
|
Options and warrants granted
|
2,450,000
|
$
|
0.15 – 0.30
|
$
|
0.17
|
|||||||
|
Options and warrants cancelled or expired
|
(260,000
|
)
|
$
|
2.00
|
||||||||
|
Outstanding at December 31, 2011
|
5,405,413
|
$
|
0.10 – $2.00
|
|||||||||
|
Exercisable at December 31, 2011
|
5,405,413
|
$
|
0.10 – $2.00
|
|||||||||
The following table summarizes information about options and warrants outstanding and exercisable as of December 31, 2011:
|
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
|
5,405,413
|
3.87 Years
|
$
|
0.29
|
3.87 Years
|
5,405,413
|
$
|
0.29
|
||||||||||
Net cash proceeds from the exercise of options and warrants were $0 for each of the years ended December 31, 2011 and 2010, respectively. During 2011 and 2010, the Company recognized approximately $200,000 and $2,000 in compensation expense related to stock option grants. As of December 31, 2011 unrecognized compensation expense related to common stock options was approximately $76,000, which is expected to be recognized over a weighted average period of 4 years.
|
7.
|
Commitments and Contingencies
|
On February 1, 2006, the Company entered into an agreement with Embry-Riddle Aeronautical University to complete a 3D model and certain modifications to the original Detonation Gas Turbine Engine in exchange for a fixed price amount. The Company has expensed $10,670 related to this agreement which expired on June 30, 2007. On August 31, 2007, the Company extended the original agreement through December 31, 2009 with a total additional amount not to exceed approximately $297,000. The Company incurred approximately $54,600 and $47,900 in additional costs during the years ended December 31, 2011 and 2010, respectively.
The Company leased its corporate headquarters on a month-to-month basis. For the periods ended December 31, 2011 and 2010, rent expense was approximately $27,700 and $31,900, respectively.
During 2011, the Company issued common stock for various consulting services. The fair value of the services recorded was based on the fair value of the Company’s stock price at the commitment date for the respective services. The Company issued 4,143,000 shares of common stock at prices ranging between $.10 and $.28 per share, and recognized approximately $560,000 in consulting or professional expenses related to these agreements during 2011. All shares of common stock related to the above consulting services were issued and became fully vested during 2011.
The Company entered into a Share Purchase Agreement in May 2010 with Hua Tec Enterprise Co. LTD, (“Hua Tec”) 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 and is currently being negotiated.
48
The Company entered into a Cooperation Agreement (the “Agreement”) with Hydrogen Union Energy Co., Ltd. (“HUE”) for the purpose of the joint development of the hydrogen generator. Under the terms of the Agreement, HUE will provide hydrogen generators at cost to the Company for demonstration purposes. Once the Company purchases the first H2 generator and pays 90% of the purchase price, the Company will be given first refusal to act as agent for any future business relating to hydrogen generators with HUE’s technology in North America. The Company was to pay the cost of production of a 200 cubic meter H2 generator at 10,000,000 TWD ($328,000 USD as of December 31, 2011) for up to two machines. As previously disclosed, the Company is continuing negotiations with payment terms and accordingly no equipment has been received and no liability has been recorded as of December 31, 2011. At year end the company was in negotiations with HUE’s parent corporation Energy Technology Services Co., Ltd. (“ETS”) and all agreements with ETS may potentially impact or supersede the agreement with HUE.
The Company entered into various strategic alliances with foreign companies during 2009 and 2010. During the year ended December 31, 2011, there were no material changes as disclosed in the December 31, 2010 Form 10K which would warrant further disclosure to these financial statements. The agreements with GUOHAO, TIANJIN and BEIJING ROYAL are based on the Company building, testing and demonstrating a prototype that will meet the efficiencies required to commercialize the engine for their respective products. Once the Company has demonstrated that it can produce an engine with the power output and the efficiencies required, the time line set in the original agreements for the respective companies to fulfill their agreements and fund the Company to bring the engine to full commercialization for that product will begin.
In October 2011, the Company entered into employment agreements with terms that commence on October 1, 2011 and run through a range of dates with the latest being September 2014. These agreements have a cumulative annual salary of approximately $156,000 annually and cumulative grants of fully vested stock issuances of 850,000 shares of stock. Upon signing the employment agreements, all unearned stock compensation from the previous employment agreements was recognized in full, as the employees were not required to forfeit their previous granted shares of common stock. At the October 1, 2011 grant date, the Company recognized approximately $279,000 in stock-based compensation related to the above grants of common stock, and grants made during 2010. Additionally, the employees were granted 850,000 fully vested common stock options, with an exercise price of $.25 per share, and expire five years from the date of grant. The grants of common stock and common stock options were essentially sign-on bonuses, and accordingly, the grant-date fair values were recognized as compensation expense at the October 1, 2011 grant date.
|
8.
|
Income Taxes
|
Deferred taxes are recorded for all existing temporary differences in the Company’s assets and liabilities for income tax and financial reporting purposes. Due to the valuation allowance for deferred tax assets, as noted below, there was no net deferred tax benefit or expense for the years ended December 31, 2011 or 2010.
There is no current or deferred income tax expense or benefit allocated to continuing operations for the years ended December 31, 2011 or 2010 or the period November 27, 2000 (Date of inception) through December 31, 2011.
The provision for income taxes is different from that which would be obtained by applying the statutory federal income tax rate to income before income taxes. The items causing this difference are as follows:
|
2011
|
2010
|
|||||||
|
Tax expense (benefit) at U.S. statutory rate
|
$
|
(760,900
|
)
|
$
|
(873,500
|
)
|
||
|
State income tax expense (benefit), net of federal benefit
|
(81,700
|
)
|
(93,300
|
)
|
||||
|
Stock option expense
|
||||||||
|
Effect of non-deductible expenses
|
500
|
2,700
|
||||||
|
Other
|
(200
|
)
|
(3,600
|
)
|
||||
|
Change in valuation allowance
|
842,300
|
967,700
|
||||||
|
$
|
—
|
$
|
—
|
|||||
49
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2011 and 2010 are as follows:
|
2011
|
2010
|
|||||||
|
Deferred tax assets (liability), noncurrent:
|
||||||||
|
Depreciation
|
$
|
5,000
|
6,600
|
|||||
|
License agreement
|
316,700
|
395,900
|
||||||
|
Capitalized start up costs
|
4,612,600
|
3,725,900
|
||||||
|
Net operating loss
|
486,100
|
412,500
|
||||||
|
Stock compensation
|
114,400
|
115,700
|
||||||
|
Contribution carryover
|
2,700
|
2,700
|
||||||
|
Intangible agency fee
|
21,600
|
|||||||
|
Debt issuance
|
700
|
2,100
|
||||||
|
Amortization expense and beneficial conversion features
|
(12,900
|
)
|
||||||
|
Valuation allowance
|
(5,525,300
|
)
|
(4,683,000
|
)
|
||||
|
$
|
—
|
$
|
—
|
|||||
Since management of the Company believes that it is more likely than not that the net deferred tax assets will not provide future benefit, the Company has established a 100 percent valuation allowance on the net deferred tax assets as of December 31, 2011 and 2010.
As of December 31, 2011, the Company had federal and state net operating loss carry-forwards totaling approximately $1,292,000 which begin expiring in 2022.
We are subject to income tax audits by the Internal Revenue Service and the State of Florida for the years 2008 – 2011.
|
9.
|
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 December 31, 2011 and 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, 2012.
As of December 31, 2011 and 2010, accounts payable included $12,220 and $40,150, respectively, for various accounting services, due to the Company’s Chief Accounting Officer who is also a director of the Company.
As of December 31, 2011 and 2010, accounts payable included $0 and $47,557 due to a Company owned by the Company’s Chief Technology Officer.
During the year ended December 31, 2011, the Company’s President advanced the Company $5,000 with no specific repayment terms or stated interest.
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.
|
10.
|
Convertible Note 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.
50
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 2011 and since inception, the Company has drawn $50,000 and $795,000 in proceeds related to the note, respectively. During 2011 and since inception, the Holder has converted $50,000 and $772,000 in convertible notes into 333,334 and 7,340,152 common shares, respectively. As of December 31, 2011, the Company has $205,000 available to draw on the convertible debenture.
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.
|
11.
|
Derivative liability
|
In November 2011, the Company issued a convertible promissory note for $42,500. The note pays interest at 8% per annum, and principal and accrued interest is due on the maturity date of August 9, 2012. The conversion option price associated with the note has a 41 percent discount to the market price of the stock. The market price is based on the average of the three lowest trading prices during a ten day period prior to conversion. The note is convertible at any time. As a result of the variable feature associated with the conversion option, pursuant to ASC Topic 815, the Company bifurcated the conversion option, and utilized the black Scholes model to determine the fair value of the conversion option. At the issuance date, the Company recorded a debt discount and derivative liability of approximately$42,000 and $49,000, respectively. The debt discount will be amortized over the life of the note, and the Company recognized approximately $8,000 of interest expense related to amortization during 2011. As of December 31, 2011 the unamortized discount related to the note was approximately $34,000. The derivative liability will be adjusted to fair value each reporting period with unrealized gain (loss) reflected in other income and expense. The unrealized gain associated with the derivative liability was approximately $2,000 at December 31, 2011.
Liabilities measured at fair value on a recurring basis by level within the fair value hierarchy as of December 31, 2011 and 2010 related to the above derivative liability are as follows:
|
Fair Value Measurements at
December 31, 2011 (1)
|
Fair Value Measurements
at December 31, 2010 (1) |
|||||||||||||||
|
Using Level 2
|
Total
|
Using Level 2
|
Total
|
|||||||||||||
|
Liabilities:
|
||||||||||||||||
|
Derivative liabilities
|
$ | (40,756 | ) | $ | (40,756 | ) | $ | -0- | $ | -0- | ||||||
|
Total liabilities
|
$ | (40,756 | ) | $ | (40,756 | ) | $ | -0- | $ | -0- | ||||||
|
|
(1)
|
The Company did not have any assets or liabilities measured at fair value using Level 1 or Level 3 of the fair value hierarchy as of December 31, 2011 or 2010.
|
51
The Company’s derivative liabilities are classified within Level 2 of the fair value hierarchy. The Company utilizes the Black-Scholes Option Pricing Model to value the derivative liabilities utilizing observable inputs such as the Company’s common stock price, the exercise price of the warrants, and expected volatility, which is based on historical volatility. The Black-Scholes model employs the market approach in determining fair value.
|
12.
|
Subsequent Events
|
Subsequent to the year ended December 31, 2011, the Company issued 6,348,951 shares of common stock for cash amounting to approximately $344,150 through March 26, 2012.
The Company entered into a Contract of World Agency Agreement (the “Agreement”) dated March 15, 2012 with Energy Technology Services Co., Ltd. (“Energy Tech”) granting the Company full agency capacity worldwide to handle Energy Tech’s Energy related products, including hydrogen burning systems and other energy saving devices. The agency is exclusive for North America and non-exclusive for other world markets.
Under the terms of the Agreement, Energy Tech will provide all products to TTE’s sales channels, and will provide, plan, install & maintain all products and training. TTE will be responsible for setting up its own sales and education system, organizing sales and promotional meetings and will report to Energy Tech monthly.
The Agreement is effective from March 1, 2012 through March 1, 2016. TTE must sell at least ten 200 M3/Hr hydrogen burning machines in the first year, and 20 or more machines for each of the subsequent years or Energy Tech will have the right to terminate the Agreement. The Agency fees have yet to be determined.
Each machine will have an end user price of $750,000 and the Company will remit 50% of the total payment upon ordering and the balance will be due in full at port of Taiwan, after inspection. The Company will be responsible for shipping costs.
The Company agrees to a non-compete for 5 years from the Agreement date that it will not compete with Energy Tech with any similar or derivative products.
Additionally, the Company and Energy Tech have agreed to form a new company subsequent to March 31, 2012. The Company is to be named Global Hydrogen Energy Corp (“GH”). Through the date of this filing, the Company has contributed approximately $198,000 related to this agreement.
On March 15, 2012, the Board of Directors resolved to issue 500,000 shares of Series A Convertible Preferred Stock to Michael Rouse, the Company’s President & CEO, in exchange for $335,000 of accrued salary. The voting rights of the Series A Convertible Preferred give Mr. Rouse, effective majority control over the common shareholders vote.
In January 2012, the Company entered into a consulting agreement for services to be rendered related to certain Carbon Credit projects and financing. The terms of this agreement require the Company to pay approximately $25,000 in addition to 400,000 shares of common stock.
In February 2012, the Company entered into a consulting agreement for services to be rendered related to certain marketing services. The terms of this agreement require the Company to pay approximately $25,000 in addition to 500,000 shares of common stock.
On March 16, 2012, the Board of Directors created a separate series of preferred stock, called “Series A Convertible Preferred, which is being documented by the filing of an Amendment to the Articles of Incorporation filed with the State of Nevada. The Series A Convertible Preferred, par value $0.001, provides for: voting rights on each matter submitted to the common stockholders of 306 votes per each share and shares are convertible after six months on a 1 to 1 ratio at the option of the preferred shareholder.
52
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
None.
|
CONTROLS AND PROCEDURES
|
Disclosure Controls and Procedures
The Company’s Chief Executive Officer and Chief Financial Officer has 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 the fiscal period ending December 31, 2011 covered by this Annual Report on Form 10-K. Based upon such evaluation, the Chief Executive Officer and acting Chief Financial Officer has concluded that, as of the end of such period, the Company’s disclosure controls and procedures were not effective as required under Rules 13a – 15(e) and 15d – 15(e) under the Exchange Act. This conclusion by the Company’s Chief Executive Officer and Chief Financial Officer does not relate to reporting periods after December 31, 2011.
Management’s Report on Internal Control over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rue 13a-15(f) and 15d – 15(f) of the Exchange Act) of the Company. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.
The Company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.
Because of inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.
Management, under the supervision of the Company’s Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of internal control over financial reporting based on the framework in Internal control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management concluded that the Company’s internal control over financial reporting was not effective as of December 31, 2011 under the criteria set forth in the Internal Control – Integrated Framework.
A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. Management has determined that material weaknesses exist due to a lack of formalized controls and procedures as well as a lack of segregation of duties, as well as the absence of an independent audit committee chair, resulting from the Company’s limited resources.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting that occurred during the fourth fiscal quarter ended December 31, 2011 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
53
|
OTHER INFORMATION
|
None
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
Set forth below is certain information concerning the directors and executive officers of the Company.
|
Name
|
Age
|
Position
|
||
|
Michael Rouse
|
55
|
President, Chief Executive Officer and Chairman of the Board (Principal Executive Officer And Principal Financial Officer)
|
||
|
Phyllis J. Rouse
|
53
|
Vice President, Secretary, Treasurer and Director
|
||
|
Rebecca McDonald
|
45
|
Chief Accounting Officer
|
||
|
John R. Dickinson
|
45
|
Audit Committee Member
|
Biographies
Michael Rouse is the founder of the Company and currently serves as its Chairman and Chief Executive Officer. Mr. Rouse is Vice President of Cox-Rouse Construction & Development Corporation, a commercial real estate developer located in Deland, Florida. Mr. Rouse is a commercial building contractor and developer, and licensed commercial aircraft pilot. Mr. Rouse was President of M&D Aircraft Leasing and Skydive Palatka, a successful parachute center, from October 1995 to June 2002, until he sold Skydive Palatka. He received his schooling in Management Training at United States Steel Corporation in 1975; Computer Programming at Daytona Beach Community College in 1993; and Science, Art and Drafting at Valpraiso Industrial Arts School in 1973. He is a former Production Manager for United States Steel, and General Manager of Freefall Express, Inc., an airplane leasing company, from 1989 to 1990.
Phyllis J. Rouse serves as the Company’s Vice President, Secretary, Treasurer and as a Director. From 1997 to present, Mrs. Rouse is a public school administrator at Yulee Elementary School in Yulee, Florida. She has extensive administrative experience and training in accountability for all budgets, curriculum, student performance, personnel, facilities, discipline, while supervising over 70 personnel and 650 students on a daily basis. Mrs. Rouse is the sister-in-law of Michael Rouse.
Rebecca A. McDonald, is a Certified Public Accountant with over 18 years experience in accounting, information systems and taxation. She has been the owner and Vice President of the Certified Public Accounting firm of Dickinson & McDonald since January 2005. A CPA firm servicing central Florida, Dickinson & McDonald provides personal and confidential services including bookkeeping, financial statement preparation, corporate, individual, estate and trust tax preparation. From July 1996 to January 2005 she was a Senior Accountant with Cohen, Smith & Company, P.A. Ms. McDonald is a graduate of the University of Central Florida with a Bachelor of Science in Business Administration with a major in Accounting. She is a member of the Florida Institute of Certified Public Accountants.
John R. Dickinson, CPA serves as an independent member of the Company’s Audit Committee. Mr. Dickinson has spent over nineteen years in public accounting, including four years with the seventh largest CPA firm in the United States. During his career, he has gained extensive knowledge in individual and corporate taxation, financial reporting, and accounting information systems. His diverse background includes the performance of financial statement audits; litigation support services; mergers and acquisitions; business valuations; general business consulting; and tax compliance. After noticing a need for quality CPA firms in the Central Florida marketplace, Mr. Dickinson started a full service CPA firm in 2003. The firm has experienced significant growth since inception and is currently servicing a wide range of industries including construction, distribution, medical, insurance, individuals, litigation, manufacturing, technology, transportation, and non-profits. He is a Certified Public Accountant, and is a member of the Florida Institute of Certified Public Accountants. He is also very active in his community including the finance committee chairman of the DeLand First Presbyterian Church, treasurer of the Neighborhood Center, and sat on the board of directors for Hugh Ash Manor. In addition, he is a YMCA basketball coach, and member of the DeLand Quarterback Club.
54
Mr. Dickinson is a Cum Laud graduate of Geneva College with a Bachelor of Science degree in Business Administration and Accounting. Mr. Dickinson also attended Stetson University to obtain additional credit hours to meet Florida CPA licensing requirements.
AUDIT COMMITTEE
The Audit Committee consists of Michael Rouse, John R. Dickinson, CPA and Rebecca McDonald, Chief Accounting Officer. The Audit Committee selects the independent auditors; reviews the results and scope of the audit and other services provided by the Company’s independent auditors and reviews and evaluate the Company’s internal control functions. The board of directors has determined that John Dickinson is the audit committee “financial expert” as such term is defined under federal securities law, and is independent. Mr. Dickinson is an expert by virtue of: (i) education and experience as a principal financial officer, principal accounting officer, controller, public accountant or auditor or experience in one or more positions that involve the performance of similar functions; (ii) experience actively supervising a principal financial officer, principal accounting officer, controller, public accountant, auditor or person performing similar functions; (iii) experience overseeing or assessing the performance of companies or public accountants with respect to the preparation, auditing or evaluation of financial statements; and (iv) other relevant experience.
CODE OF ETHICS
We have adopted a code of ethics meeting the requirements of Section 406 of the Sarbanes-Oxley Act of 2002. We believe our code of ethics is reasonably designed to deter wrong doing and promote honest and ethical conduct; provide full, fair, accurate, timely and understandable disclosure in public reports; comply with applicable laws; ensure prompt internal reporting of violations; and provide accountability for adherence to the provisions of the code of ethic.
|
EXECUTIVE COMPENSATION
|
The following table sets forth information concerning the aggregate compensation paid or to be paid by the Company to its executive officers.
SUMMARY COMPENSATION TABLE
|
Name and Principal Position
|
Year
|
Salary ($)
|
Bonus
($)
|
Stock
Awards
($)
|
Option
Awards
($)
|
Non-Equity
Incentive Plan
Compensation
($)
|
Nonqualified
Deferred
Compensation
($)
|
All Other
Compensation
($)
|
Total ($)
|
|||||||||||||||||||||||||||
|
Michael Rouse, President, CEO, Chairman of the
|
2011
|
$
|
181,750
|
0
|
126,244
|
35,647
|
0
|
0
|
0
|
$
|
343,641
|
|||||||||||||||||||||||||
|
Board (1)
|
2010
|
$
|
196,502
|
0
|
0
|
0
|
0
|
0
|
0
|
$
|
196,502
|
|||||||||||||||||||||||||
|
Phyllis J. Rouse Vice
President, Secretary, Treasurer and |
2011
|
$
|
181,750
|
0
|
$
|
58,413
|
26,735
|
0
|
0
|
0
|
$
|
266,898
|
||||||||||||||||||||||||
|
Director (2)
|
2010
|
$
|
201,790
|
0
|
$
|
0
|
0
|
0
|
0
|
0
|
$
|
201,790
|
||||||||||||||||||||||||
|
(1)
|
For the year ended December 31, 2011 and 2010, per Mr. Rouses’ employment agreement, his annual salary was $52,000 and $225,000, respectively.
|
|
(2)
|
For the year ended December 31, 2011 and 2010, per Ms. Rouses’ employment agreement, her annual salary was $52,000 and $225,000, respectively.
|
55
OUTSTANDING EQUITY AWARDS AT DECEMBER 31, 2011
|
Option Awards
|
Stock Awards
|
|||||||||||||||||||||||||||||||||||
|
Name
|
Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
|
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
|
Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options (#)
|
Option
Exercise
Price ($)
|
Option
Expiration
Date
|
Number
of
Shares
of Stock
That
Have
Not
Vested
(#)
|
Market
Value
of
Shares
of
Stock
That
Have
Not
Vested
($)
|
Equity
Incentive
Plan
Awards:
Number
of
Unearned
Shares or
Other
Rights
That
Have Not
Vested
(#)
|
Equity
Incentive
Plan
Awards:
Market
or Payout
Value of
Unearned
Shares or
Other
Rights
That
Have
Note
Vested
($)
|
|||||||||||||||||||||||||||
|
Michael Rouse, President, CEO, Chairman of the Board
|
400,000
|
400,000
|
0*
|
$ |
0.25
|
10/1/2016
|
0*
|
0*
|
0*
|
0*
|
||||||||||||||||||||||||||
|
Phyllis Rouse, Vice President, Secretary, Treasurer and Director
|
800,000
|
800,000
|
0*
|
$ |
0.10 - $0.25
|
7/9/2014 - 10/1/2016
|
0*
|
0*
|
0*
|
0*
|
||||||||||||||||||||||||||
*All options and stock awards are fully vested and earned at the date of grant.
DIRECTOR COMPENSATION
Directors receive no compensation for serving on the Board.
The following table summarizes compensation paid to all of our non-employee directors:
|
Name
|
Fees
Earned
or Paid
in
Cash
($)
|
Stock
Awards
($)
|
Option
Awards
($)
|
Non-Equity
Incentive Plan
Compensation
($)
|
Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings ($)
|
All Other
Compensation
($)
|
Total
($)
|
|||||||||||||||||||||
|
not applicable
|
||||||||||||||||||||||||||||
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
|||||||||||||
|
Plan category
|
Number of
securities
to be issued
upon
exercise of
outstanding
options,
warrants
and rights
(a)
|
Weighted-
average
exercise
price of
outstanding
options,
warrants
and rights
(b)
|
Number of
securities
remaining
available for
future
issuance
under equity
compensation
plans
(excluding
securities
reflected in
column (a))
(c)
|
|||||||||
|
Equity compensation plans approved by security holders
|
0
|
$
|
0.00
|
0
|
||||||||
|
Equity compensation plans not approved by security holders
|
5,405,413
|
$
|
0.29
|
1,567,569
|
||||||||
56
The Company’s 2008 Incentive Compensation Plan (the “2008 Plan”) authorizes up to 5,000,000 shares of common stock to any person employed by the Company either as an employee, officer, director or independent consultant or other person employed by the Company, provided that no person can be granted shares under the 2008 Plan for services related to capital raising or promotional activities. There are no restrictions on resale upon the purchases of the stock from the employees or the consultants, unless contained in the written award approved by the Board of Directors. During the year ended December 31, 2011, the Company adopted the 2011 Incentive Compensation Plan (the “2011 Plan”) which superseded the 2008 Plan. As a result, there are no future options to be issued from the Company’s 2008 Plan.
The Company’s 2011 Plan authorizes up to 5,000,000 shares of common stock to any person employed by the Company either as an employee, officer, director or independent consultant or other person employed by the Company, provided that no person can be granted shares under the 2011 Plan for services related to raising capital or promotional activities. There are no restrictions on resale upon the purchases of the stock from the employees or the consultants, unless contained in the written award approved by the Board of Directors.
The following table sets forth certain information as of December 31, 2011, with respect to the beneficial ownership of our common stock by each beneficial owner of more than 5% of the outstanding shares of common stock of the Company, each director, each executive officer named in the “Summary Compensation Table” and all executive officers and directors of the Company as a group, and sets forth the number of shares of common stock owned by each such person and group. Unless otherwise indicated, the owners have sole voting and investment power with respect to their respective shares.
|
Name of Beneficial Owner
|
Number of
Shares
Beneficially
Owned
|
Percentage
of
Outstanding
Common
Stock
Owned
|
||||||
|
Michael Rouse
|
5,418,555
|
9.6
|
%
|
|||||
|
Alpha Engines Corporation (1)
|
2,812,752
|
5.0
|
%
|
|||||
|
Phyllis J. Rouse (2)
|
950,000
|
1.7
|
%
|
|||||
|
All directors and executive officers as a group (4 persons)
|
9,181,307
|
16.2
|
%
|
|||||
|
1.
|
Robert L. and Barbara J. Scragg are majority shareholders of Alpha, the Licensor of our company. Alpha Engines has granted Michael Rouse a proxy to vote all of its beneficially owned shares of the Company’s common stock.
|
|
2.
|
Phyllis J. Rouse is the sister-in-law of Michael Rouse.
|
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
None
|
PRINCIPAL ACCOUNTANT FEES AND SERVICES
|
Audit Fees
During 2011 and 2010, we were billed by our accountants, Pender Newkirk & Company, approximately $69,016 and $69,400 for audit and review fees associated with our 10-K and 10-Q filings.
Tax Fees
During 2011 and 2010, we were billed by our accountants, Pender Newkirk & Company, approximately $0 and $0 for tax work.
All Other Fees
During 2011 and 2010 we were billed by our accountants, Pender Newkirk & Company, approximately $0 and $0 for other work.
Board of Directors Pre-Approval Process, Policies and Procedures
Our principal auditors have performed their audit procedures in accordance with pre-approved policies and procedures established by our Board of Directors. Our principal auditors have informed our Board of Directors of the scope and nature of each service provided. With respect to the provisions of services other than audit, review, or attest services, our principal accountants brought such services to the attention of our Board of Directors prior to commencing such services.
57
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
|
Regulation
Number
|
Exhibit
|
|
|
31.1
|
Rule 13a-14(a) Certification
|
|
|
31.2
|
Rule 13a-14(a) Certification
|
|
|
32.1
|
Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
32.2
|
Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
TURBINE TRUCK ENGINES, INC.
|
|||
|
Dated: April 6, 2012
|
By:
|
/s/ Michael Rouse
|
|
|
Chief Executive Officer, Chief Financial Officer and
Chairman of the Board (Principal Executive Officer and Principal Financial Officer)
|
|||
|
Dated: April 6, 2012
|
By:
|
/s/ Rebecca A. McDonald
|
|
|
Principal Accounting Officer
|
|||
58