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Novo Integrated Sciences, Inc. - Quarter Report: 2015 March (Form 10-Q)

 

 

UNITED STATES 

SECURITIES AND EXCHANGE COMMISSION 

Washington D.C. 20549

 

FORM 10-Q

 

x

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

 

For the quarterly period ended March 31, 2015

 

¨

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

 

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)

  

Nevada

 

59-3691650

(State or Other Jurisdiction of Incorporation or Organization)

 

(I.R.S. Employer Identification Number)

  

1575 Aviation Center Parkway, Suite 433, Daytona Beach, Florida 32114 
(Address of Principal Executive Offices)

 

(386) 275-1515 

(Registrant’s Telephone Number, Including Area Code)

 

Securities registered pursuant to Section 12(g) of the Act:

 

$.001 par value preferred stock

 

Over the Counter Bulletin Board

$.001 par value common stock

 

Over the Counter Bulletin Board

 

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

 

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

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of “accelerated filer, large accelerated filer and smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large accelerated filer

¨

Accelerated filer

¨

Non-accelerated filer

¨

Smaller reporting company

x

  

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

 

There were 416,538,330 shares of the Registrant’s $0.001 par value common stock outstanding as of April 27, 2015.

 

Documents incorporated by reference: none

 

 

 

Turbine Truck Engines, Inc. 

Contents

 

PART I – FINANCIAL INFORMATION

   
     

Item 1.

Financial Statements

 

4

 
       

Item 2.

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

   

5

 
       

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

   

12

 
       

Item 4T.

Controls and Procedures

   

12

 
       

PART II – OTHER INFORMATION

       
       

Item 1.

Legal Proceedings

   

13

 
       

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

   

13

 
       

Item 3.

Defaults Upon Senior Securities

   

13

 
       

Item 4.

Mine Safety Disclosures

   

13

 
       

Item 5.

Other Information

   

13

 
       

Item 6.

Exhibits

   

14

 
       

Signatures

   

15

 

 

 
2

 

 

PART I – FINANCIAL INFORMATION

 

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

 

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

 

 
3

 

ITEM 1. Financial Statements

 

Turbine Truck Engines, Inc. 

Financial Statements

 

As of March 31, 2015 (unaudited) and December 31, 2014 

and for the Three Months Ended March 31, 2015 and 2014 (unaudited)

 

Contents

   
     

Financial Statements:

   

Balance Sheets

 

F-1

Statements of Comprehensive Loss

 

F-2

Statements of Cash Flows

 

F-3

Notes to Financial Statements

 

F-4

 

 
4

 

Turbine Truck Engines, Inc.  

Balance Sheets

 

    March 31,     December 31,  
   

2015

   

2014

 
   

(unaudited)

       

ASSETS

           
             

CURRENT ASSETS:

           

Cash

  $ 8,720     $ 1,831  

Deposit, net of reserve of $237,414 (2015) and $237,414 (2014)

    -       -  

Total Current Assets

    8,720       1,831  
                 

Furniture and equipment, net of accumulated depreciation of $9,875 (2015) and $29,521 (2014)

    6,242       7,011  

Intangible asset

    13,750       13,750  
                 

TOTAL ASSETS

  $ 28,712     $ 22,592  
                 

LIABILITIES AND STOCKHOLDERS’ DEFICIT

               
                 

CURRENT LIABILITIES:

               

Accounts payable

  $ 101,252     $ 82,550  

Accrued payroll taxes

    -       68  

Accrued interest

    -       42,595  

Notes payable

    -       215,451  

Total Current Liabilities

    101,252       340,664  
                 

LONG-TERM LIABILITIES:

               

Notes payable

    -       307,598  

Total Long-Term Liabilities

    -       307,598  
                 

STOCKHOLDERS’ DEFICIT

               

Convertible Preferred Stock; $0.001 par value; 1,000,000 shares authorized; 0 (2015) and 0 (2014) shares issued and outstanding

    -       -  

Common stock; $0.001 par value; 499,000,000 shares authorized; 416,538,330 (2015) and 367,274,979 (2014) shares issued and outstanding

    416,537       367,274  

Additional paid in capital

    21,523,313       20,988,916  

Receivable for common stock

    (200,000 )     (200,000 )

Deferred non-cash debt offering costs

    -       (2,379,075 )

Accumulated other comprehensive income

    -       49,827  

Accumulated deficit

    (21,812,390 )     (19,452,612 )

Total Stockholders’ Deficit

    (72,540 )     (625,670 )
                 

TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT

  $ 28,712     $ 22,592  

 

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

 

 
F-1

 

Turbine Truck Engines, Inc.  

Statements of Comprehensive Loss  

(unaudited)

         
    For the Three Months Ended March 31,  
   

2015

   

2014

 
             
             

Operating costs

  $ 45,428     $ 48,050  
      45,428       48,050  

OTHER EXPENSE

               

Change in fair value of derivative liability

    -       5,129  

Interest and other expenses, net

    2,314,350       92,713  
                 

TOTAL OTHER EXPENSE

    2,314,350       97,842  
                 

NET LOSS

  $ (2,359,778 )   $ (145,892 )

Unrealized gain on foreign currency translation adjustment

    -       (25,014 )

COMPREHENSIVE LOSS

  $ (2,359,778 )   $ (120,878 )
                 

NET LOSS PER COMMON SHARE, BASIC AND DILUTED

  $ (0.01 )   $ (0.00 )
                 

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING, BASIC AND DILUTED

    374,349,130       272,373,029  

 

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

 

 
F-2

 

Turbine Truck Engines, Inc.  

Statements of Cash Flows  

(unaudited)

 

    For the Three Months Ended March 31,  
    2015   2014  
           
CASH FLOWS FROM OPERATING ACTIVITIES:              
Net loss   $ (2,359,778 ) $ (145,892 )
Adjustments to reconcile net loss to net cash used by operating activities:              
Common stock issued for services and amortization of common stock issued for services     -     5,112  
Unrealized loss on derivative liability     -     5,129  
Amortization of deferred offering costs     2,379,075     65,272  
Depreciation     769     1,206  
Amortization of discount on notes payable     -     21,763  
Gain on foreign currency transaction adjustment   (88,791 )   -  
(Decrease) Increase in:              
Accounts payable     18,702   (12,446 )
Accrued expenses     -     4,379  
Accrued payroll   (68 )   1,513  
Accrued royalty fees     -     6,250  
Accrued interest     24,056     5,677  
Net cash used by operating activities   (26,035 ) (42,037 )
               
CASH FLOWS FROM FINANCING ACTIVITIES:              
Proceeds from issuance of common stock     15,000     50,849  
Proceeds from issuance of notes payable     17,924     -  
Net cash provided by financing activities     32,924     50,849  
               
Net increase in cash     6,889     8,812  
               
Cash, beginning of period     1,831     3,423  
               
Cash, end of period   $ 8,720   $ 12,235  
               
     
           
SUPPLEMENTAL CASH FLOW INFORMATION:              
Cash paid for interest   $ -   $ 322  
               
NON-CASH FINANCING AND INVESTING ACTIVITIES:              
Conversion of convertible debt to equity (65,562,422 shares)   $ -   $ 10,356  
Settlement of notes payable with refund of deposits   $ 0   $ 48,385  
Foreign currency translation adjustment   $ 38,964   $ 25,014  
Deferred loan costs paid with common stock payable   $ -   $ 11,832  
Common stock issued for conversion of debt and accrued interest to equity (47,388,351 shares) includes $69,075 of accrued interest   $ 568,660   $ -  

  

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

 

 
F-3

  

Turbine Truck Engines, Inc. 

Notes to Financial Statements 

For the Three Months Ended March 31, 2015 and 2014 

(unaudited)

 

1. Background Information

 

Turbine Truck Engines, Inc. (“TTE” or “the Company”) was incorporated in Delaware on November 27, 2000. On February 20, 2008, the Company was re-domiciled to the State of Nevada. To date, the Company’s activities have been limited to raising capital, organizational matters, and the structuring of its business plan. The corporate headquarters are located in Daytona Beach, Florida. The company has not yet generated any revenues since inception.

 

To date, the Company’s principal operations are the development and ultimately the commercialization of the (a) Detonation Cycle Gas Turbine Engine (“DCGT”); (b) Hydrogen Production Burner System (“HPBS”); and (c) the Gas to Liquid Technology (“GTL”). In addition, the Company is aggressively pursuing to either purchase or merge an intellectual property asset and/or an existing operational company asset. To date, TTE has not entered into a contractual commitment to complete an asset purchase or merger.

 

The Company will need to raise capital to support its activities. The Company’s activities are subject to significant risks and uncertainties, including failing to secure additional funding to commercialize the Company’s current technology before another company develops similar technology.

 

On March 20, 2015, the Company received notification from OTC Markets Group, that it had successfully completed the verification process and was approved for its securities to remain on the OTC Markets Group’s OTCQB marketplace, an electronic quote and trade execution venture marketplace for entrepreneurial and development stage companies.  On March 26, 2014, OTC Markets Group introduced stringent standards and eligibility requirements designed to improve marketplace integrity and enhance transparency for investors of company securities trading on both the OTCQB and the OTCQX marketplace.  Companies verified and approved for the OTCQB are current in their reporting and will continue to undergo an annual verification and management certification process.

 

On April 6, 2015, the Company’s Board of Directors approved a 1 for 20 reverse stock split of the Company's issued and outstanding common stock (the "Reverse Stock Split").  The Reverse Stock Split shall have a record and effective date 10 days following the providing of notice to FINRA thereof or such other date as shall be determined by FINRA.  As of the date of this filing, the Company has not yet received approval from FINRA to effect the reverse stock split and therefore, no shares of common stock have been adjusted for the reverse stock split.

 

2. Financial Statements

 

In the opinion of management, all adjustments consisting only of normal recurring adjustments necessary for a fair statement of (a) the results of operations for the three month periods ended March 31, 2015 and 2014, (b) the financial position at March 31, 2015 and December 31, 2014, and (c) cash flows for the three month periods ended March 31, 2015 and 2014, have been made.

 

The unaudited financial statements and notes are presented as permitted by Form 10-Q. Accordingly, certain information and note disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States of America (US GAAP) have been omitted. The accompanying financial statements and notes should be read in conjunction with the audited financial statements and notes of the Company for the fiscal year ended December 31, 2014. The results of operations for the three month periods ended March 31, 2015 are not necessarily indicative of those to be expected for the entire year.

 

3. Going Concern

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. For the three months ended March 31, 2015, the Company had a net loss of $2,359,778. As of March 31, 2015, the Company has a working capital deficit of $92,532. 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. 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.

 

 
F-4

  

4. 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.

 

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 March 31, 2015 and December 31, 2014. Insurance coverage was $250,000 per depositor at each financial institution. At March 31, 2015 and December 31, 2014, there were no amounts held in excess of federally insured limits.

 

The Company’s financial instruments include cash and accounts payable. The carrying amounts of cash and accounts payable approximate their fair value, due to the short-term nature of these items.

 

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. There were no amounts charged to research and development for each of the three month periods ended March 31, 2015 and 2014.

 

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 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 March 31, 2015 and December 31, 2014. 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.

  

 
F-5

  

The Company entered into various loan agreements with a Canadian company. In accordance with the loan agreements, the Company issued shares of common stock to the Canadian company as additional costs in obtaining the financing. These shares have been accounted for as contra-equity deferred non-cash offering issuance costs and they have been amortized as interest expense over the life of the notes which is five years. Foreign currency transaction gains and losses, when material, have been recorded as other income or loss.  For the three months ended March 31, 2015 the Company recorded a foreign currency transaction gain of $88,791.  As of March 31, 2015, the Canadian company has converted all outstanding notes payable and related accrued interest into common stock, therefore, the remaining balance of the deferred non-cash offering issuance costs has been recorded as interest expense for the three months ended March 31, 2015. (see Note 6)

 

Basic loss per share is computed by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted losses per common share are computed by dividing net loss by the weighted average number of shares of common stock outstanding and dilutive options outstanding during the year. Common stock equivalents for the three month periods ended March 31, 2015 and 2014 were anti-dilutive due to the net losses sustained by the Company during these periods. For the three months ended March 31, 2015 and 2014 potentially dilutive common stock options and warrants of 2,308,000 and 6,655,413 have been excluded from dilutive losses per share due to the Company’s losses in all periods presented.

 

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 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.

 

Recent accounting pronouncements

 

Recent accounting pronouncements issued by the FASB, the AICPA and the SEC did not or are not believed by management to have a material effect on the Company’s financial statements.

 

5. Commitments and Contingencies

 

The Company leased its corporate headquarters on a month-to-month basis. For each of the three months ended March 31, 2015 and 2014, rent expense was approximately $1,300 and $6,250, respectively.

 

6. Notes Payable

 

On March 16, 2015, the Company’s Board of Directors accepted an offer, dated March 11, 2015, from 2367416 Ontario, Inc. to irrevocably convert eight separate Loan Agreements dated from June 19, 2013 through October 1, 2014, payable by the Company to 2367416 Ontario, Inc., with a cumulative principal balance of $499,585 and a cumulative accrued interest balance of $69,075 for a total amount of debt owed of $568,660 into 47,388,351 shares of the Company’s common stock.  The conversion price in this transaction was $0.012 per share.  At the March 16, 2015 commitment date the conversion was not beneficial to 2367416 Ontario, Inc. accordingly, no beneficial conversion feature was recorded for this conversion.  This conversion of debt into shares of common stock is full and final payment for the debt as evidenced by all eight Loan Agreements.  The shares were issued on March 18, 2015.  As part of the conversion of debt to common stock, the Company also expensed the deferred non-cash offering costs of $2,379,075.

 

 
F-6

  

7. Convertible Notes and Derivative liability

 

On April 24, 2012 (the “Closing date”), the Company issued a convertible promissory note for $278,000. The lender funded $75,000 to the Company, and the lender at their discretion may fund additional amounts to the Company. The note matures one year from the closing date. If the Company pays the note within 90 days of the closing date, the interest rate is 0%. If the note is not paid within 90 days of the closing date, a one-time interest charge of 5% will be applied to the unpaid principal amount. The conversion option price associated with the note is the lesser of $0.10 or 70% of the lowest trade price in the 25 trading days previous to any 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 $75,000 and $100,415, respectively. The debt discount was fully amortized since the Company fully converted the remaining principle of $10,356 into 1,479,000 shares of common stock during the three months ended March 31, 2014. The derivative liability has been adjusted to fair value each reporting period with unrealized gain (loss) reflected in other income and expense and extinguished due to it being fully converted.

 

For the three months ended March 31, 2014, the unrealized loss on the above derivatives was $5,129.

 

8. Subsequent Events

 

During April 2015, the Company entered into a common stock subscription agreement with 2367416 Ontario, Inc., a Canadian company, for a total of $45,000 and agreed to issue 5,625,000 shares of common stock at $0.008 per share.  As of the date of this filing, these shares have not been issued.

 

On April 6, 2015, the Company’s Board of Directors approved a 1 for 20 reverse stock split of the Company's issued and outstanding common stock (the "Reverse Stock Split").  The Reverse Stock Split shall have a record and effective date 10 days following the providing of notice to FINRA thereof or such other date as shall be determined by FINRA.  As of the date of this filing, the Company has not yet received approval from FINRA to effect the reverse stock split and therefore, no shares of common stock have been adjusted for the reverse stock split.

 

 
F-7

   

ITEM 2. 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.

 

OVERVIEW OF THE COMPANY

 

Turbine Truck Engines, Inc. is a clean-air technology company dedicated to identifying, developing and commercializing important scientific innovations designed to dramatically enhance both environmental conservation and cost savings in how the world consumes energy.

 

The Company has not yet generated any revenues. To date, the Company’s principal operations are the development and ultimately the commercialization of the (a) Detonation Cycle Gas Turbine Engine (“DCGT”); (b) the Gas to Liquid Technology; and (c) Hydrogen Production Burner System (“HPBS”). In addition, the Company is aggressively pursuing to either purchase or merge an intellectual property asset and/or an existing operational company asset. To date, TTE has not entered into a contractual commitment to complete an asset purchase or merger and no specific candidate has been identified at this time.

 

In August 2014, the Company changed a majority of its Board of Directors, management and corporate officer personnel to better position the Company to (a) access funding for operations and development; (b) increase its opportunity for the development of its core technologies; (c) pursue a contractual commitment for either the purchase or merger of an intellectual property asset and/or an existing operational company asset.

 

PRODUCT STATUS AND DESCRIPTION

 

I. THE DCGT ENGINE TECHNOLOGY

 

The DCGT Engine technology was successfully patented in December 1999 by the inventor, Robert Scragg, whom had earlier issued a master license for all rights and potential applications for the DCGT to his majority owned corporation, Alpha Engines, Inc. On December 15, 2000, TTE acquired the option rights for an exclusive License from Alpha Engines Corporation (“Alpha”), a company owned by Robert and Barbara Scragg, for manufacturing and marketing heavy-duty highway truck engines utilizing Alpha’s DCGT engine technology embodied in U.S. Patent No. 6,000,214 and other proprietary technology and rights owned by Alpha, at that time, including Marketing Survey Data in the highway trucking industry. TTE exercised its option and acquired the licensing rights on July 22, 2002.

 

 
5

  

Since the formation of Turbine Truck Engines, Inc., on November 27, 2000, the development of the DCGT Engine technology, for the application of heavy-duty highway trucks, has been at the core of the Company’s business operations. Up to August 13, 2014, the Company had funded the building and testing of Prototype #5, a 540HP 12-cylinder engine and Prototype #6, a 70HP 4-cylinder engine for the purpose of sufficiently advancing the research and development of the DCGT engine technology, for heavy-duty truck application, to a point of entering into a joint venture agreement with a heavy-duty truck engine manufacturer. To date, the Company has been unable to gather acceptable and reliable data required to advance the DCGT engine technology, for heavy-duty truck application, beyond the research and development phase. Additionally, to date, the DCGT engine technology is not ready for commercialization, for any application, and remains in the development and research phase.

 

Effective August 13, 2014, the Company changed a majority of its Board of Directors, management and corporate officer personnel. TTE’s new management and Board of Directors, in coordination with the inventor of the DCGT engine technology, continue to believe the patented DCGT technology can be developed for commercialization, but have determined that the focus of research and development of the DCGT technology should be on designing a DCGT engine for applications directly related to power generation. Based on this new focus, TTE no longer intends to expend resources on the development of the DCGT engine technology for the heavy-duty truck engine application and will continue to  pursue a path forward to develop the DCGT engine technology for other applications specifically related to power generation.

 

The Company believes that with ownership of all patents, intellectual property, trademarks, trade secrets, drawings and copyrights for the DCGT engine technology, the Company will have better leverage as it pursues both the necessary funding and development partners required to prove the technologies’ viability and ultimate commercialization.

 

The DCGT engine technology inventor, Robert Scragg, agreed and on November 14, 2014, the parties closed on the Asset Purchase Agreement and a Technology Sale, Transfer, Assignment Agreement for all Intellectual Property, dated October 14, 2014 (the “Asset Purchase Agreement”) between the Company,  Robert and Barbara Scragg and Alpha Engines Corporation, settling and ending all licensing agreements between TTE and Alpha Engines Corporation and completing the purchase by the Company of all patents, Intellectual Property, trademarks, copyrights, trade secrets, rights, title, and interest for both the DCGT technology and the electromagnetic process and apparatus for making methanol, also referred to as Gas-to-Liquid technology.

 

Under the terms of the Asset Purchase Agreement, all royalty payments due by TTE to Alpha Engines have been settled with no future royalty payments due. TTE owns the DCGT engine technology free and clear.

 

TTE has begun early stage discussions with several separate North American based entities to re-initiate research and development of the DCGT engine technology for applications directly related to turning a shaft for power generation.

 

II. THE SCRAGG PROCESS FOR GAS TO LIQUID

 

In addition to the DCGT engine technology, Robert Scragg is also the inventor of an expired patent for a process in which methane gas, the primary component of natural gas, is converted into liquid methanol. This process is referred to as Gas-to-Liquid (“GTL” or “the Scragg Process”).

 

In 1983, Robert Scragg received patent protection for his “Electromagnetic Process and Apparatus for Making Methanol”. Mr. Scragg’s 1983 patent proved that gentle oxidation of methane gas, a hydrocarbon, using precise electromagnetic activation produces methanol gas which is then condensed in the reactor chamber to form liquid methanol. The Scragg process for gas to liquid conversion provides for production of methanol on a low-volume scale using an easily transportable apparatus and system.

 

 
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Throughout the United States and the world, at sites where oil-drilling operations are producing natural gas as a by-product, a large portion of the natural gas is being flare burned, instead of being sold, as the site is either too far from a pipeline or the accessible pipeline has no additional capacity.

 

With the recent increase of drilling in the United States, including fracking, the production of natural gas as a by-product of drilling has increased. When taking into account cost analysis, environmental considerations and commodity pricing in today’s marketplace, TTE believes the demand for an easily transportable, self-sustaining apparatus capable of converting gas to liquid has elevated. As a result of the market’s willingness to consider other options, besides flare burning the on-site natural gas, several companies are working to develop low-volume, easily transportable apparatus for commercialization. To date, TTE is not aware of any company that has commercialized a GTL device which has proved viable as a self-supporting, profitable business. 

 

As noted above in the section on the Detonation Cycle Gas Turbine Engine, on November 14, 2014, the Company closed an Asset Purchase Agreement, with Robert and Barbara Scragg and Alpha Engines Corporation, completing the purchase, by Turbine Truck Engines, Inc. of all patents, intellectual property, trademarks, copyrights, trade secrets, rights, title, and interest for an electromagnetic process and apparatus for converting methane gas to methanol, the Scragg Process. While the Scragg Process patent has expired, certain intellectual property and trade secrets remain intact and protected and are now owned by TTE.

   

When the inventor received his patent for the GTL technology, he created a working GTL prototype for presentation to the U.S. Patent office. Today, that prototype no longer exists and a new prototype has to be built using the inventor’s notes, drawings and data collection to prove the viability of the GTL technology. TTE intends on pursuing a research and development partner that will work directly with the inventor to review and understand the inventor’s previous work, drawings and notes on the GTL technology and then build a working GTL prototype.

 

Currently, TTE is in discussions with a U.S. based engineering firm for the research & development to model, design, build, operate and collect data for a new GTL bench prototype using TTE’s intellectual property, notes, trade secrets and drawings recently purchased from Robert Scragg. Once this new bench prototype achieves satisfactory proof-of-concept and validates the Scragg Process GTL technology, TTE plans to pursue either a joint venture or a licensing agreement with a well-qualified partner to build a scaled-up prototype directed toward commercialization.

 

III. HYDROGEN PRODUCTION BURNER SYSTEMS (HPBS)

 

In 2010, TTE was working with various Chinese based partners to develop its licensed DCGT engine technology for use in various applications in Asia. At that time, TTE’s CEO was introduced to Falcon Power Co. Ltd. (“Falcon”), a Taiwan based business, that was developing a technology focused on converting methanol to hydrogen, on-demand, using a proprietary technology now known as the Hydrogen Production Burner System (“HPBS”). One of the potential fuel sources for the DCGT engine technology is hydrogen, thus TTE and Falcon began a diligence phase to consider a collaborative effort to blend the 2 technologies having the HPBS produce hydrogen that could then provide a hydrogen fuel source for the DCGT engine.

 

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.

 

The Hydrogen Production Burner System is an efficient methanol-to-hydrogen production and burner integrated technology which utilizes a steam reformation process, employs a proprietary chemical catalyst and a unique low temperature pyrolytic reaction to convert common methanol into clean-burning hydrogen gas, on-demand, for use as a fuel source to a proprietary burner assembly. The inventor of the HPBS is located in Taiwan and has been developing the technology for over 9 years.

 

 
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Having a technology available that can produce hydrogen on-demand and on-site eliminates the costly and difficult issues that surround the transportation and storage of hydrogen. Additionally, methanol (CH4O, also known as methyl alcohol or wood alcohol) is inexpensive, widely accessible, and easier to store, handle and transport. The HPBS technology provides a unique and marketable solution for those entities wanting to burn hydrogen as a thermal heat source.

 

The HPBS system is applicable to a wide array of industrial boilers and steam generators as well as other various residential and commercial applications. The efficiency of the HPBS technology could save the end user 30-60% on energy costs as compared to current sources of energy such as electricity, heavy oils, coal, and natural gas.

 

The following historical information is presented for market clarity:

 

On May 25, 2010, TTE entered into a Strategic Alliance Agreement with Falcon for the purpose of a collaborative engineering, technical development and commercialization effort to further advance and modify the DCGT engine technology to integrate with Falcon’s licensed HPBS technology for application possibilities in Taiwan, China and other markets to be defined in the future. Additionally, this agreement allowed for both TTE and Falcon to establish a Joint Venture to manufacture, market and sell the new product in Taiwan, China, and other appropriate countries once the new product was shown to be viable for commercialization. Both TTE and Falcon were to work independently and collectively, at their own expense, to aide in the design, modifications, construction and testing of their own devices, with integration costs to be shared equally by both parties. All designs, modifications and improvements jointly developed were to belong to both parties equally with any patent filing for patent protection to be indicated jointly. This Strategic Alliance agreement was terminated, by mutual consent, as defined in the June 16, 2011 Cooperation Agreement between TTE and Hydrogen Union Energy Co. Ltd.

 

On June 18, 2010, TTE and Falcon entered into an Exclusive Agency Agreement granting TTE the exclusive right to resell Falcons’ product offerings, including the Hydrogen Production Burner System, in certain U.S. regions. The terms and conditions of this Exclusive Agency Agreement were assigned to the June 16, 2011 Cooperation Agreement between TTE and Hydrogen Union Energy Co. Ltd. (“HUE”) as noted below.

 

On June 16, 2011, TTE entered into a Cooperation Agreement with HUE, a Taiwan subsidiary of Energy Technology Services Co. Ltd (“ETS”), also a Taiwan based business, which had obtained exclusive worldwide rights, from Falcon Power, to develop, market, manufacture and distribute the HPBS technology. By mutual consent this June 16, 2011 Cooperation Agreement terminated the May 25, 2010 Strategic Alliance Agreement, noted above. Additionally, the Exclusive Agency Agreement, between TTE and Falcon dated June 18, 2010, was assigned to HUE, by Falcon, and was now in-force under this June 16, 2011 Cooperation Agreement. Under certain terms and conditions of this June 16, 2011, TTE was to be granted first right of refusal to be the exclusive agent, throughout N. America, for the HPBS technology.

 

On March 15, 2012, TTE entered into a World Agency Agreement with ETS, the parent company of HUE, granting TTE full agency capacity worldwide to handle ETS’s products, including the HPBS technology. This March 15, 2012 World Agency Agreement designated TTE agency rights as exclusive for North America and non-exclusive for other world markets.

 

On May 18, 2012, SGS, Inc., a world leader for independent testing, inspection and certification, hired by TTE and ETS to validate the HPBS’s electricity consumption, methanol consumption and the concentration and flow rate of produced hydrogen gas, presented TTE and ETS with its report verifying the HPBS is converting methanol to hydrogen on-demand with specifications that support a potentially profitable venture.

 

July 11, 2012, TTE entered into a Joint Venture with ETS for the purpose of engaging both parties in the manufacture, leasing, sale, marketing, installation, training and maintenance of ETS’s HPBS units throughout Asia. Under the terms of the Joint Venture, TTE was to purchase and own all equipment for lease or sale and would have final approval on all lease or sale contracts. Additionally, TTE would be the sole signatory of the Joint Venture bank accounts, while ETS would be responsible for sales/leasing, manufacture, installation, training and maintenance of each HPBS unit with all generated revenue and all approved reasonable expenses provided to the Joint Venture with ETS and TTE splitting net profit 50/50. On December 12, 2012, ETS and TTE consented to terminate all agreements between TTE, ETS and HUE, due to lack of performance to date, with no further obligations or liabilities existing between the parties.

 

 
8

  

In the spring of 2013, TTE and ETS agreed to re-initiate its business relationship to pursue the commercialization of the HPBS technology.

 

On May 28, 2013, TTE entered into a 7-year equipment lease contract with Fujian Xinchang Leather Co. Ltd, a Chinese company (“Fujian”), for the lease of a 200m3 HPBS unit. This lease with Fujian was brokered and presented to TTE by the principal partners of ETS.

 

On July 30, 2013, TTE completed a Loan Agreement with 2367416 Ontario, Inc., an Ontario, Canada corporation (“236”), whereby 236 agreed to provide financing to TTE in the initial sum of $450,000 (CAN) and a maximum amount of $10,000,000 (CAN) to be used solely and specifically related to the HPBS technology.

 

In September 2013, with financing available to TTE and an equipment lease contract for a 200m3 HPBS unit in place, TTE and ETS agree to renew the terms and conditions of the July 11, 2012 Joint Venture Agreement. A total of $300,000 (CAN) was provided to ETS, on behalf of TTE, by 236 under the terms and conditions of the TTE Loan Agreement with 236. ETS accepts the terms of TTE’s June 2013 purchase order for the manufacture of a new 200m3 HPBS unit required for TTE to fulfill its conditions of the lease with Fujian.

 

On December 6, 2013, TTE and ETS amended the July 11, 2012 Joint Venture Agreement defining the terms and conditions for TTE to complete an Asset Purchase Agreement to acquire all Intellectual Property, rights, and trade secrets for the Hydrogen Production Burner System technology.

 

Despite positive status reports throughout the fall of 2013 and into January 2014 from ETS on the building of the new 200m3 HPBS unit to fulfill TTE’s , ETS has never delivered a new 200m3 HPBS unit as paid for by TTE. In 2014, ETS refunded $50,000 (CAD), which was used to pay down loans to 236.

 

In spring 2014, TTE hired Formosan Brothers, a Taiwan based law firm, and filed a criminal complaint, with the DA office in Taipei, Taiwan, seeking charges against ETS and its principals for fraud. TTE and its Taiwan attorneys are continuing to file briefs and pursue criminal charges against ETS and its principals. As a result of ETS and HUE’s failure to perform under the terms and conditions of their contractual obligations, all agreements in place between ETS, HUE and TTE are operationally terminated with TTE pursuing remedy against ETS for failure to perform. Additionally, the equipment lease contract with Fujian terminated of its own accord with no further obligation or liability for either party.

 

Since April 2014, the Company has been in ongoing negotiations directly with Dr. Ching-Chang Chang, the inventor of the HPBS technology, who claims to have title ownership of the HPBS technology. In October 2014, Dr. Chang presented TTE with both pictures and video of a new 60m3 HPBS unit he completed building, at his own expense. While TTE and Dr. Chang have negotiated proposed terms and conditions for TTE to acquire the HPBS technology, TTE is continuing to undergo extensive due diligence to validate and verify title ownership of the HPBS technology. Until TTE is satisfied with title ownership of the HPBS technology, any final agreement to purchase the HPBS technology is pending.

 

FINANCING

 

The financing for our development activities to date has come from the sale of common stock and notes payable. The Company is looking to the credit facility provided by 236 for financing the Company’s immediate ongoing operations, in addition to securing ownership and development of the DCGT engine technology, the GTL technology and the HPBS Equipment development. The Company’s working capital needs will continue to be funded largely from the sale of public equity securities with additional funding from a private placement or secondary offering and other traditional financing sources, including term notes and proceeds from sub-licensing agreements until such time that funds provided by operations are sufficient to fund working capital requirements.

 

 
9

  

Since we have had a limited history of operations, we anticipate that our quarterly results of operations will fluctuate significantly for the foreseeable future. We believe that period-to-period comparisons of our operating results should not be relied upon as predictive of future performance. Our prospects must be considered in light of the risks, expenses and difficulties encountered by companies at an early stage of development, particularly companies commercializing new and evolving technologies such as ours.

  

For the three months ended March 31, 2015 compared to the three months ended March 31, 2014

 

Operating Costs – During the three months ended March 31, 2015 and 2014, operating costs totaled $45,428 and $48,050, respectively. The decrease of $2,622 was mainly attributable to an approximately $2,200 decrease in utilities, a $9,200 decrease in payroll expenses, a decrease of $4,900 in rent expense, a decrease of $6,200 of royalty fees, a decrease of $4,900 of consulting expense, a decrease of $2,400 in miscellaneous expense, a decrease of $1,100 in office supplies, net of an increase of approximately $36,600 in professional fees.  The decrease in payroll expenses is due to the elimination of all employment agreements and the increase in professional fees is due to additional legal fees involved in the settlement agreements and an increase in accounting fees.

 

Interest and Other Expenses - During the three months ended March 31, 2015 and 2014, net interest expense totaled $2,403,141 and $92,713, respectively. The increase of $2,310,428 was primarily due to the amortization of all deferred non cash offering costs as a result of the Company converting all outstanding debt and related accrued interest into common stock.  Therefore, the Company fully amortized the balance of the deferred non-cash offering costs of $2,379,075 to interest expense.  During the three months ended March 31, 2015 and 2014, the Company recognized $88,791 and $0, respectively, of foreign currency transaction gain from transactions with 2367416 Ontario, Inc.  The increase is the result of the reduction of the foreign exchange rate during the period.

 

The net loss for the three months ended March 31, 2015 and 2014 was $2,359,778 and $145,892, respectively. The increase of $2,213,886 was mainly attributable to the increase in interest expense.

 

Liquidity and capital resources

 

As shown in the accompanying financial statements, for the three months ended March 31, 2015 and 2014, the Company has had net losses of $2,359,778 and $145,892, respectively. As of March 31, 2015, the Company has not generated any revenues. 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.

 

As previously mentioned, since inception, we have financed our operations largely from the sale of common stock and the issuance of notes payable. During the three months ended March 31, 2015 we raised cash of $15,000 through a common stock subscription agreement and $17,924 through the issuance of notes payable.  During the three months ended March 31, 2015, the Company converted all outstanding debt and related accrued interest into common stock, therefore, the Company fully amortized the balance of the deferred non-cash offering costs of $2,379,075 to interest expense.

 

We have incurred significant net losses and negative cash flows from operations since our inception. As of March 31, 2015, we had an accumulated deficit of $21,812,390.

 

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

 

We will be dependent upon our existing cash, together with anticipated net proceeds from any 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.

 

 
10

  

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 March 31, 2015 in accordance with the following schedule:

 

    Approximate Number of Shares     Approximate Proceeds*  
                 

Non-Plan Options and Warrants

   

2,308,000

   

$

817,250

 

____________ 

*

Based on weighted average exercise price.

 

During April 2015, the Company entered into a common stock subscription agreement with 2367416 Ontario, Inc., a Canadian company, for a total of $45,000 and agreed to issue 5,625,000 shares of common stock at $0.008 per share.  As of the date of this filing, these shares have not been issued.

 

On April 6, 2015, the Company’s Board of Directors approved a 1 for 20 reverse stock split of the Company's issued and outstanding common stock (the "Reverse Stock Split").  The Reverse Stock Split shall have a record and effective date 10 days following the providing of notice to FINRA thereof or such other date as shall be determined by FINRA.  As of the date of this filing, the Company has not yet received approval from FINRA to effect the reverse stock split and therefore, no shares of common stock have been adjusted for the reverse stock split.

 

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.

 

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.

 

The Company incurred deferred loan offering costs in connection with entering into note agreements with its lender. These costs are paid with the Company’s restricted common shares and are valued at the commitment dates. They are recorded as a contra-equity and are amortized as interest expense over the life of the notes, which is five years.

 

Research and development costs are charged to operations when incurred and are included in operating expenses.

 

 
11

  

New Accounting Pronouncements

 

Recent accounting pronouncements issued by the FASB, the AICPA and the SEC did not or are not believed by management to have a material effect on the Company’s financial statements.

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

Not applicable.

 

Item 4T. Controls and Procedures

 

The Company’s Board of Directors, Chief Executive Officer, President, Principal Accounting Officer and Secretary-Treasurer have evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of and for the period covered by this Quarterly Report on Form 10-Q. Based upon such evaluation, the Board of Directors, Chief Executive Officer, President, Principal Accounting Officer and Secretary-Treasurer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures were not effective. The controls were determined to be ineffective due to the lack of segregation of duties. Currently, management contracts with an outside CPA to perform the duties of the Principal Financial Officer and Principle Accounting Officer and an outside consultant to assist with the preparation of the filings. However, until the Company has received additional funding, they are unable to remediate the weakness.

 

Changes in Internal Control Over Financial Reporting

 

No change in the Company’s internal control over financial reporting occurred during the three months ended March 31, 2015, that materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

  

 
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PART II - OTHER INFORMATION

 

Item 1. Legal Proceedings

 

As of the date of this Quarterly Report, neither we nor any of our officers or directors is involved in any litigation as defendants. During the quarter ended March 31, 2015, the Company, through its Taiwan Legal team of Formosan Brothers Law Firm, filed a criminal complaint with the DA office in Taipei Taiwan, as a plaintiff, charging ETS and its principles of alleged fraud.

 

As of this date, there is not any threatened or pending litigation against us or any of our officers or directors.

 

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

 

During the three months ended March 31, 2015, there was no modification of any instruments defining the rights of holders of the Company’s common stock and no limitation or qualification of the rights evidenced by the Company’s common stock as a result of the issuance of any other class of securities or the modification thereof.

 

During March 2015, the Company issued 47,388,351 shares of common stock for the conversion of notes payable and accrued interest totaling $568,660 at a price of $0.012 per share.

 

During March 2015, the Company issued 1,875,000 shares of common stock for cash at a price of $0.008 per share.

 

The Company issued the common stock described above without registration pursuant to Section 4(2) of the Securities Act and Rule 506 promulgated thereunder.

 

Item 3. Defaults upon Senior Securities

 

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

 

Item 4. Mine Safety Disclosures

 

Not applicable.

 

Item 5. Other Information

 

The Company does not have any other material information to report with respect to the three month period ended March 31, 2015.

  

 
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Item 6. Exhibits and Reports on Form 8-K

 

(a) Exhibits included herewith are:

 

31.1

 

Certification of the Principal Executive Officer (This certification required as Exhibit 31 under Item 601(a) of Regulation S-K

     

31.2

 

Certification of the Principal Financial and Accounting Officer (This certification required as Exhibit 31 under Item 601(a) of Regulation S-K

     

32.1

 

Written Statements of the Principal Executive Officer, This certification required as Exhibit 32 under Item 601(a) of Regulation S-K is furnished in accordance with Item 601(b)(32)(iii) of Regulation S-K

     

32.2

 

Written Statements of the Principal Financial Accounting Officer (This certification required as Exhibit 32 under Item 601(a) of Regulation S-K is furnished in accordance with Item 601(b)(32)(iii) of Regulation S-K

 

101.INS **

 

XBRL Instance Document

     

101.SCH **

 

XBRL Taxonomy Extension Schema Document

     

101.CAL **

 

XBRL Taxonomy Extension Calculation Linkbase Document

     

101.DEF **

 

XBRL Taxonomy Extension Definition Linkbase Document

     

101.LAB **

 

XBRL Taxonomy Extension Label Linkbase Document

     

101.PRE **

 

XBRL Taxonomy Extension Presentation Linkbase Document

 ___________ 

** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

 

 
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SIGNATURES

 

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

 

 

TURBINE TRUCK ENGINES, INC.

 
       

Dated: May 1, 2015

By:

/s/ Enzo Cirillo

 
   

Enzo Cirillo

 
   

Interim Chief Executive Officer and Chairman of the Board and

 
   

Principal Executive Officer

 
       

Dated: May 1, 2015

By:

/s/ Judith Norstrud

 
   

Judith Norstrud

 
   

Principal Financial and Accounting Officer

 

 

 

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