HPEV, Inc. |
(Exact name of registrant as specified in its charter) |
Nevada
|
75-3076597
|
|
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
Large accelerated filer | o | Accelerated filer | o |
Non-accelerated filer | o | Smaller reporting company | x |
Item No.
|
|
Page No.
|
||||
1 |
Business
|
4 | ||||
1A |
Risk Factors
|
10 | ||||
1B |
Unresolved Staff Comments
|
19 | ||||
2 |
Properties
|
19 | ||||
3 |
Legal Proceedings
|
19 | ||||
4 |
Mine Safety Disclosures
|
20
|
||||
|
||||||
PART II | ||||||
5 |
Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
|
21 | ||||
6 |
Selected Financial Data
|
23 | ||||
7 |
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
23 | ||||
7A |
Quantitative and Qualitative Disclosures About Market Risk
|
26 | ||||
8 |
Financial Statements and Supplementary Data
|
27 | ||||
9 |
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|
67 | ||||
9A |
Controls and Procedures
|
67 | ||||
9B |
Other Information
|
68 | ||||
|
||||||
PART IV | ||||||
15 |
Exhibits, Financial Statement Schedules
|
69 | ||||
|
||||||
SIGNATURES
|
72 |
●
|
Motors/Generators,
|
●
|
Mobile auxiliary power,
|
●
|
Compressors,
|
●
|
Turbines (Wind, Micro),
|
●
|
Bearings,
|
●
|
Electric Vehicles: rail, off-highway, mining, delivery, refuse,
|
●
|
Brakes/rotors/calipers,
|
●
|
Pumps/fans,
|
●
|
Passenger vehicles: auto, bus, train, aircraft,
|
●
|
Commercial vehicles: SUV, light truck, tram, bucket truck
|
●
|
Military: boats, Humvee, truck, aircraft, and
|
●
|
Marine: boats ranging in size from 30 feet to 120 feet and beyond.
|
●
|
reduced maintenance costs,
|
●
|
the standardization of multiple platforms down to a single platform,
|
●
|
the standardization of drawings and data around existing platforms,
|
●
|
the ability to use standard designs and standard insulation systems versus customization, and
|
●
|
the ability to integrate and produce on existing production lines with no retooling and no additional or minimum capital investment.
|
●
|
technological innovation;
|
●
|
product quality and safety;
|
●
|
product performance; and
|
●
|
price. |
Number
Patent
|
|
Country
|
|
Filing
Date
|
|
Issue
Date
|
|
Expiration
Date
|
|
Title
|
8,283,818 B2
|
|
US
|
|
February 4, 2010
|
|
October 9, 2012
|
|
October 9, 2032
|
|
Electric Motor with Heat Pipes
|
8,134,260 B2
|
|
US
|
|
July 31, 2009
|
|
March 13, 2012
|
|
March 13, 2032
|
|
Electric Motor with Heat Pipes
|
8,148,858 B2
|
|
US
|
|
August 6, 2009
|
|
April 3, 2012
|
|
April 3, 2032
|
|
Totally Enclosed Heat Pipe Cooled Motor
|
8,198,770 B2
|
|
US
|
|
April 3, 2009
|
|
June 12, 2012
|
|
June 12, 2032
|
|
Heat Pipe Bearing Cooler Systems and Methods
|
7,569,955 B2
|
|
US
|
|
June 19, 2007
|
|
August 4, 2009
|
|
August 4, 2029
|
|
Electric Motor with Heat Pipes
|
●
|
lose net revenue;
|
●
|
incur increased costs such as costs associated with customer support;
|
●
|
experience delays, cancellations or rescheduling of conversions or orders for our products;
|
●
|
experience increased product returns or discounts; or
|
●
|
damage our reputation;
|
●
|
laws and policies affecting trade, investment and taxes, including laws and policies relating to the repatriation of funds and withholding taxes, and changes in these laws;
|
●
|
changes in local regulatory requirements, including restrictions on conversions;
|
●
|
differing cultural tastes and attitudes;
|
●
|
differing degrees of protection for intellectual property;
|
●
|
the instability of foreign economies and governments;
|
●
|
war and acts of terrorism.
|
●
|
The announcement of new products by our competitors
|
●
|
The release of new products by our competitors
|
●
|
Developments in our industry or target markets
|
●
|
General market conditions including factors unrelated to our operating performance
|
Quarter Ended
|
High
|
Low
|
||||||
March 31, 2012
|
$ | 1.15 | $ | 0.33 | ||||
June 30, 2012
|
$ | 1.50 | $ | 0.35 | ||||
September 30, 2012
|
$ | 0.45 | $ | 0.20 | ||||
December 31, 2012
|
$ | 0.35 | $ | 0.17 | ||||
March 31, 2013
|
$ | 0.97 | $ | 0.84 | ||||
June 30, 2013
|
$ | 0.52 | $ | 0.52 | ||||
September 30, 2013
|
$ | 0.42 | $ | 0.35 | ||||
December 31, 2013
|
$ | 0.50 | $ | 0.46 |
Plan category
|
Number of securities to be issued upon exercise of outstanding options, warrants and rights
|
Weighted-average exercise price of outstanding options, warrants and rights
|
Number of securities remaining available for future issuance under equity compensation plans
|
|||||||||
Equity compensation plans approved by security holders
|
0 | 0 | 0 | |||||||||
Equity compensation plans not approved by security holders
|
5,000,000 | (1) | $ | 5.5 | 0 |
(1)
|
Represents five options to purchase 1,000,000 shares each at such time as our common stock trades at $2.00, $3.00, $5.00, $7.50 and $10.00 for 20 consecutive days or upon a change of control of the Company, while Mr. Banzhaf serves as President and for one year following Mr. Banzhaf’s termination without cause. Exercise prices of these options will be equal to the closing price of the Company’s stock on the date of vesting.
|
Balance Sheet Data:
|
12/31/2013
|
|||
Cash in bank
|
$ | 477,549 | ||
Total assets
|
$ | 576,246 | ||
Total liabilities
|
$ | 536,429 | ||
Stockholders’ equity
|
$ | 39,817 |
Office Locations
Las Vegas, NV
New York, NY
Pune, India
Beijing, China
|
||
|
Year
Ended
|
Year
Ended
|
From inception
(March 24, 2011)
through
|
|||||||||
|
December 31,
2013
|
December 31,
2012
|
December 31,
2013
|
|||||||||
|
(Restated) |
(Restated)
|
(Restated) | |||||||||
|
||||||||||||
Revenue
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||
Cost of goods sold
|
-
|
-
|
-
|
|||||||||
Gross profit
|
-
|
-
|
-
|
|||||||||
|
||||||||||||
Operating expenses
|
||||||||||||
Director stock Compensation
|
-
|
(2,650,000
|
)
|
-
|
||||||||
Payroll and related expenses
|
29,485
|
-
|
29,485
|
|||||||||
Consulting
|
1,472,444
|
1,902,392
|
4,979,416
|
|||||||||
Professional fees
|
491,643
|
447,139
|
1,477,261
|
|||||||||
Research and development
|
486,160
|
242,717
|
843,232
|
|||||||||
General and administrative
|
395,476
|
110,063
|
547,340
|
|||||||||
Loss on deposit
|
-
|
-
|
100,000
|
|||||||||
Loss on intangible property
|
-
|
-
|
75,000
|
|||||||||
|
||||||||||||
Total operating expenses
|
2,875,208
|
52,311
|
8,051,734
|
|||||||||
|
||||||||||||
Other income and expenses
|
||||||||||||
Interest expense
|
(182,032
|
)
|
(277,545
|
)
|
(459,577
|
)
|
||||||
Interest income
|
171
|
-
|
171
|
|||||||||
Finance cost
|
-
|
(622,522
|
)
|
(622,522
|
)
|
|||||||
Gain on settlement of debt
|
19,475
|
256,021
|
275,496
|
|||||||||
|
||||||||||||
Net loss
|
$
|
(3,037,594
|
)
|
$
|
(696,357)
|
$
|
)
|
|||||
|
||||||||||||
Basic and fully diluted loss per common share
|
$
|
(0.07
|
)
|
$
|
(0.01)
|
|||||||
|
||||||||||||
Basic and fully diluted weighted average
common shares outstanding
|
45,327,116
|
47,646,411
|
Preferred Stock
|
Common Stock
|
A
dditional
Paid-in
|
Common
Stock
Held
In
|
Stock
|
Stock |
Accumulated
During
Development
Deficit
|
Total
Stockholders
'
|
|||||||||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amrount
|
Capital
|
Escrow
|
Receivable
|
Payable
|
Stage
|
Equity
|
|||||||||||||||||||||||||||||||
Inception, March 24, 2011
|
- | $ | - | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||||||||||||
Founder shares April 4, 2011
|
22,000,000 | 22,000 | - | - | - | - | 22,000 | |||||||||||||||||||||||||||||||||
Shares issued for reverse merger April 15, 2011
|
23,956,690 | 23,957 | 8,178,258 | - | (8,000,000 | ) | - | - | 202,215 | |||||||||||||||||||||||||||||||
Shares issued for consulting services April 1, 2011 @ $.70
|
1,100,000 | 1,100 | 768,900 | - | - | - | - | 770,000 | ||||||||||||||||||||||||||||||||
- | ||||||||||||||||||||||||||||||||||||||||
Shares issued for consulting services May 11, 2011 @ $.75
|
1,823,185 | 1,823 | 1,365,566 | - | - | - | - | 1,367,389 | ||||||||||||||||||||||||||||||||
Shares received through cancellation of shares written-off prior to reverse merger.
|
(416,750 | ) | (417 | ) | 417 | - | - | - | - | - | ||||||||||||||||||||||||||||||
Shares issued for direct investment November 8, 2011 @ $.33
|
150,000 | 150 | 49,850 | - | - | - | - | 50,000 | ||||||||||||||||||||||||||||||||
Options granted for legal services
|
- | - | - | - | 108,420 | - | - | - | - | 108,420 | ||||||||||||||||||||||||||||||
Shares issued to director by shareholder as compensation
|
- | - | - | - | 2,650,000 | - | - | - | - | 2,650,000 | ||||||||||||||||||||||||||||||
Net loss
|
- | - | - | - | - | - | - | - | (5,124,215 | ) | (5,124,215 | ) | ||||||||||||||||||||||||||||
Balance as of December 31, 2011
|
- | - | 48,613,125 | 48,613 | 13,121,411 | - | (8,000,000 | ) | - | (5,124,215 | ) | 45,809 | ||||||||||||||||||||||||||||
Shares received from rescinded transaction prior to reverse merger February 13, 2012
|
(1,920,000 | ) | (1,920 | ) | (7,998,080 | ) | 8,000,000 | - | ||||||||||||||||||||||||||||||||
Shares received through cancellation of shares written-off prior to reverse merger. February 17, 2012
|
(83,350 | ) | (83 | ) | 83 | - | ||||||||||||||||||||||||||||||||||
Shares issued for consulting services March 23, 2012 @$1.07
|
1,000,000 | 1,000 | 1,069,000 | 1,070,000 | ||||||||||||||||||||||||||||||||||||
Shares returned by director to shareholder April 13, 2012
|
(2,650,000 | ) | (2,650,000 | ) | ||||||||||||||||||||||||||||||||||||
Spirit Bear loan warrants finance cost April 27, 2012
|
516,992 | 516,992 | ||||||||||||||||||||||||||||||||||||||
Spirit Bear loan warrants finance cost May 22, 2012
|
64,560 | 64,560 |
Issuance of warrants of common stock June 1, 2012
|
99,229 | 99,229 | ||||||||||||||||||||||||||||||||||||||
Shares issued for direct investment June 12, 2012 @ $0.50
|
10,000 | 10 | 4,990 | 5,000 | ||||||||||||||||||||||||||||||||||||
Shares issued for manufacturing services June 12, 2012 @ $0.75
|
26,666 | 26 | 19,974 | 20,000 | ||||||||||||||||||||||||||||||||||||
Spirit Bear loan warrants finance cost June 28, 2012
|
1,621 | 1,621 | ||||||||||||||||||||||||||||||||||||||
Spirit Bear loan warrants finance cost July 11, 2012
|
39,349 | 39,349 | ||||||||||||||||||||||||||||||||||||||
Issuance of warrants of common stock August 6, 2012
|
110,029 | 110,029 | ||||||||||||||||||||||||||||||||||||||
Spirit Bear penalty warrants finance cost September 30, 2012
|
68,234 | 68,234 | ||||||||||||||||||||||||||||||||||||||
issunace of warrants of common stock November 9, 2012
|
72,748 | 72,748 | ||||||||||||||||||||||||||||||||||||||
Shares issued for direct investment December 5, 2012 @2,500
|
200 | - | 500,000 | 500,000 | ||||||||||||||||||||||||||||||||||||
Spirit Bear penalty warrants finance cost December 31, 2012
|
129,179 | 129,179 | ||||||||||||||||||||||||||||||||||||||
Debt settlement – escrow shares
|
(4,676,000 | ) | (4,676 | ) | (34,793 | ) | 39,469 | - | ||||||||||||||||||||||||||||||||
Debt settlement- forgiveness of debt
|
911,894 | 911,894 | ||||||||||||||||||||||||||||||||||||||
Officer contributed capital
|
70,000 | 70,000 | ||||||||||||||||||||||||||||||||||||||
Net Income
|
(696,357 | ) | (696,357 | ) | ||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2012
(restated)
|
200 | $ | - | 42,970,441 | $ | 42,970 | $ | 6,116,420 | $ | 39,469 | $ | - | $ | - | $ | (5,820,572 | ) | $ | 378,287 | |||||||||||||||||||||
Shares issued to settle debt for legal services February 27, 2013 @ $0.26
|
25,000 | 25 | 6,475 | 6,500 | ||||||||||||||||||||||||||||||||||||
Shares issued for cashless
exercise
of option February 27, 2013 @ $.55
|
90,000 | 90 | (90 | ) | - | |||||||||||||||||||||||||||||||||||
Escrow shares retuned to treasury and cancelled per debt settlement agreement
|
31,028 | (31,028 | ) | - | ||||||||||||||||||||||||||||||||||||
Warrant issued for corporate development advisory services May 6, 2013
|
245,376 | 245,376 | ||||||||||||||||||||||||||||||||||||||
Shares issued for direct investment May 16, 2013 @ $0.23
|
750,000 | 750 | 249,250 | 250,000 |
Vested Warrants granted as retainer, finance cost, May 28, 2013
|
103,994 | 103,994 | ||||||||||||||||||||||||||||||||||||||
Shares issued for direct investment June 10, 2013 @ $0.237
|
225,000 | 225 | 99,775 | 100,000 | ||||||||||||||||||||||||||||||||||||
Shares issued for direct investment July 1, 2013 @ $0.45
|
222,222 | 222 | 99,778 | 100,000 | ||||||||||||||||||||||||||||||||||||
Shares issued for direct investment July 1, 2013 @ $0.45
|
388,889 | 389 | 174,611 | 175,000 | ||||||||||||||||||||||||||||||||||||
Shares issued for direct investment July 1, 2013 @ $0.45
|
111,111 | 111 | 49,889 | 50,000 | ||||||||||||||||||||||||||||||||||||
Shares issued for direct investment July 9, 2013 @ $0.45
|
111,111 | 111 | 49,889 | 50,000 | ||||||||||||||||||||||||||||||||||||
Shares issued for direct investment July 10, 2013 @ $0.444
|
225,000 | 225 | 99,775 | 100,000 | ||||||||||||||||||||||||||||||||||||
Shares issued for conversion of preferred shares July 12, 2013 @ $0.50
|
(1 | ) | 50,000 | 50 | (50 | ) | - | |||||||||||||||||||||||||||||||||
Shares issued for direct investment July 15, 2013 @ $0.45
|
111,111 | 111 | 49,889 | 50,000 | ||||||||||||||||||||||||||||||||||||
Shares issued for direct investment July 16, 2013 @ $0.45
|
111,111 | 111 | 49,889 | 50,000 | ||||||||||||||||||||||||||||||||||||
Shares issued for direct investment July 16, 2013 @ $0.45
|
222,222 | 222 | 99,778 | 100,000 | ||||||||||||||||||||||||||||||||||||
Shares issued for direct investment July 16, 2013 @ $0.45
|
222,222 | 222 | 99,778 | 100,000 | ||||||||||||||||||||||||||||||||||||
Shares issued for direct investment July 16, 2013 @ $0.45
|
222,222 | 222 | 99,778 | 100,000 | ||||||||||||||||||||||||||||||||||||
Shares issued for direct investment July 17, 2013 @ $0.45
|
111,111 | 111 | 49,889 | 50,000 | ||||||||||||||||||||||||||||||||||||
Shares issued for direct investment July 17, 2013 @ $0.45
|
166,666 | 167 | 74,833 | 75,000 | ||||||||||||||||||||||||||||||||||||
Shares issued for direct investment July 19, 2013 @ $0.45
|
55,555 | 56 | 24,944 | 25,000 | ||||||||||||||||||||||||||||||||||||
Shares issued for direct investment July 22, 2013 @ $0.450
|
55,555 | 56 | 24,944 | 25,000 | ||||||||||||||||||||||||||||||||||||
Shares issued for direct investment July 22, 2013 @ $0.45
|
55,555 | 56 | 24,944 | 25,000 | ||||||||||||||||||||||||||||||||||||
Shares issued for direct investment July 22, 2013 @ $0.45
|
55,555 | 56 | 24,944 | 25,000 | ||||||||||||||||||||||||||||||||||||
Shares issued for direct investment August 2, 2013 @ $0.45
|
111,111 | 111 | 49,889 | 50,000 |
Shares issued for direct investment August 12, 2013 @ $0.45
|
166,667 | 167 | 74,833 | 75,000 | ||||||||||||||||||||||||||||||||||||
Shares issued for direct investment August 13, 2013 @ $0.45
|
111,111 | 111 | 49,889 | 50,000 | ||||||||||||||||||||||||||||||||||||
Shares issued for direct investment August 14, 2013 @ $0.45
|
336,956 | 337 | (337 | ) | - | |||||||||||||||||||||||||||||||||||
Shares issued for cashless exercise of warrant August 19, 2013 @ $0.45
|
48,328 | 48 | (48 | ) | - | |||||||||||||||||||||||||||||||||||
Shares issued for direct investment August 19, 2013 @ $0.45
|
111,111 | 111 | 49,889 | 50,000 | ||||||||||||||||||||||||||||||||||||
Shares issued for direct investment August 21, 2013 @ $0.45
|
55,555 | 56 | 24,944 | 25,000 | ||||||||||||||||||||||||||||||||||||
Shares issued for direct investment September 9, 2013 @ $0.45
|
196,875 | 197 | (197 | ) | - | |||||||||||||||||||||||||||||||||||
Spirit Bear penalty warrants finance cost October 6, 2013
|
174,977 | 174,977 | ||||||||||||||||||||||||||||||||||||||
Shares issued for direct investment October 11, 2013 @ $0.45
|
222,222 | 222 | 99,778 | 100,000 | ||||||||||||||||||||||||||||||||||||
Shares issued for direct investment December 17, 2013 @ $0.30
|
166,667 | 167 | 45,833 | 46,000 | ||||||||||||||||||||||||||||||||||||
Shares issued for direct investment December 17, 2013 @ $0.30
|
100,000 | 100 | 27,500 | 27,600 | ||||||||||||||||||||||||||||||||||||
Shares issued for direct investment December 17, 2013 @ $0.30
|
166,667 | 167 | 45,833 | 46,000 | ||||||||||||||||||||||||||||||||||||
Shares issued for direct investment December 17, 2013 @ $0.30
|
100,000 | 100 | 27,500 | 27,600 | ||||||||||||||||||||||||||||||||||||
Shares issued for direct investment December 17, 2013 @ $0.45
|
125,000 | 125 | 49,875 | 50,000 | ||||||||||||||||||||||||||||||||||||
Warrants issued as commission, finance cost, December 18, 2013
|
21,277 | 21,277 | ||||||||||||||||||||||||||||||||||||||
Warrants granted for service to be provided December 20, 2013 @ $.50
|
99,750 | 99,750 | ||||||||||||||||||||||||||||||||||||||
Shares issued for direct investment December 22, 2013 @ $0.45
|
125,000 | 125 | 49,875 | 50,000 | ||||||||||||||||||||||||||||||||||||
Net loss (restated)
|
(3,037,594
|
) |
(3,037,594
|
) | ||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2013 (restated)
|
$ | 199 | $ | - | $ | 48,700,929 | $ | 48,702 | $ |
8,840,840
|
$ | 8,441 | $ | - | $ | - | $ |
(8,858,166
|
) | $ | 39,817 |
Year
Ended
|
Year
Ended
|
From March 24, 2011
(Date of Inception)
Through
|
||||||||||
Dec. 31, 2013
|
Dec. 31, 2012
|
Dec. 31, 2013
|
||||||||||
(Restated) |
(Restated)
|
(Restated) | ||||||||||
Operating Activities: | ||||||||||||
Net loss
|
$
|
(3,037,594
|
)
|
$
|
(696,357
|
)
|
$
|
(8,858,166
|
)
|
|||
Adjustments to reconcile net loss to net cash used by operating activities:
|
||||||||||||
Stock issued to founder
|
-
|
-
|
22,000
|
|||||||||
Stock issued for consulting services
|
373,679
|
1,627,910
|
3,602,391
|
|||||||||
Gain on settlement of debt
|
(19,475
|
)
|
(256,021
|
)
|
(275,496
|
)
|
||||||
Warrants issued for loan penalty
|
-
|
197,413
|
197,413
|
|||||||||
Warrants issued for services
|
470,447
|
-
|
470,447
|
|||||||||
Warrants issued for interest
|
174,977
|
282,006
|
565,403
|
|||||||||
Director stock compensation from shareholder
|
-
|
(2,650,000
|
)
|
-
|
||||||||
Amortization of financing cost
|
-
|
622,522
|
622,522
|
|||||||||
Impairment of intangible asset and deposit
|
-
|
-
|
175,000
|
|||||||||
Changes in operating assets and liabilities:
|
||||||||||||
Increase in accrued interest
|
-
|
6,021
|
6,021
|
|||||||||
Increase in accrued payroll and related costs
|
10,428
|
-
|
10,428
|
|||||||||
Increase in accounts payable related party
|
220,259
|
52,305
|
272,564
|
|||||||||
Increase in accounts payable
|
79,222
|
143,579
|
314,865
|
|||||||||
Net cash used by operating activities
|
(1,728,057
|
)
|
(670,622
|
)
|
(2,874,608
|
)
|
||||||
Investing Activities:
|
||||||||||||
Increase of intangible assets
|
(25,115
|
)
|
(29,018
|
)
|
(98,697
|
)
|
||||||
Cash acquired through reverse merger
|
-
|
-
|
37
|
|||||||||
Net cash used by investing activities
|
(25,115
|
)
|
(29,018
|
)
|
(98,660
|
)
|
||||||
Financing Activities:
|
||||||||||||
Proceeds from sale of common stock
|
2,047,200
|
5,000
|
2,102,200
|
|||||||||
Proceeds from sale of preferred stock
|
-
|
500,000
|
500,000
|
|||||||||
Proceeds from loans payable
|
-
|
-
|
-
|
|||||||||
Proceeds from notes payable
|
-
|
439,722
|
439,722
|
|||||||||
Payments on notes payable
|
-
|
(189,722
|
)
|
(189,722
|
)
|
|||||||
Proceeds from notes payable – related party
|
900
|
62,200
|
611,507
|
|||||||||
Payments on notes payable – related party
|
(12,100
|
)
|
(1,200
|
)
|
(13,300
|
)
|
||||||
Bank overdraft
|
-
|
-
|
410
|
|||||||||
Net cash provided by financing activities
|
2,036,000
|
816,000
|
3,450,817
|
|||||||||
Net increase in cash
|
282,828
|
116,360
|
477,549
|
|||||||||
Cash, beginning of period
|
194,721
|
78,361
|
-
|
|||||||||
Cash, end of period
|
477,549
|
194,721
|
477,549
|
|||||||||
Supplemental Information
|
||||||||||||
Interest paid with cash
|
$
|
-
|
$
|
1,327
|
$
|
1,327
|
||||||
Supplemental schedule of non – cash activities
|
||||||||||||
Shares issued to settle accounts payable
|
$
|
(25,974
|
)
|
$
|
-
|
$
|
(25,974
|
)
|
||||
Shares held in escrow
|
$
|
(31,028
|
)
|
$
|
-
|
$
|
(31,028
|
)
|
||||
Accrued interest forgiven
|
$
|
-
|
$
|
6,021
|
$
|
6,021
|
||||||
Related party accrued salary forgiven
|
$
|
-
|
$
|
70,000
|
$
|
70,000
|
||||||
Related party notes payable forgiven
|
$
|
-
|
$
|
911,894
|
$
|
911,894
|
||||||
Shares issued for services
|
$
|
-
|
$
|
446,427
|
$
|
1,358,016
|
||||||
Warrants issued for services
|
$
|
245,376
|
$
|
-
|
$
|
245,376
|
||||||
Common stock receivable
|
$
|
-
|
$
|
(8,000,000
|
)
|
$
|
-
|
|||||
Assumed as part of reverse merger | ||||||||||||
Intangible assets
|
$
|
-
|
$
|
-
|
$
|
75,000
|
||||||
Deposit
|
$
|
-
|
$
|
-
|
$
|
100,000
|
||||||
Prepaid asset
|
$
|
-
|
$
|
-
|
$
|
375,002
|
||||||
Accounts payable
|
$
|
-
|
$
|
-
|
$
|
(11,637
|
)
|
|||||
Notes payable – related party
|
$
|
-
|
$
|
-
|
$
|
(336,187
|
)
|
|||||
Shares issued for prepaid services
|
$
|
-
|
$
|
1,090,000
|
$
|
1,090,000
|
December 31, 2013
|
||||||||||||
As previously
|
Error
|
|||||||||||
reported
|
correction
|
As restated
|
||||||||||
Net loss
|
$ | (3,141,538 | ) | $ | 103,944 | (a) | $ | (3,037,594 | ) | |||
Warrants issued for services
|
$ | 574,391 | $ | (103,944 | ) | (a) | $ | 470,447 |
|
For the Year Ended
December 31,
2013
|
For the Year Ended
December 31,
2012
|
||||||
|
(Restated)
|
|||||||
Net income (loss) attributable to common stockholders
|
$
|
(3,037,594
|
)
|
$
|
(696,357
|
)
|
||
|
||||||||
Basic and fully diluted loss per common share
|
$
|
(0.07
|
)
|
$
|
(0.01
|
)
|
||
Basic and fully diluted weighted average common shares outstanding
|
45,327,116
|
47,646,411
|
|
|
Number
of Warrants
|
|
|
Weighted-Average
Exercise Price
|
|
|
Weighted-Average
Remaining Life (Years)
|
|
|||
Outstanding at December 31, 2012
|
|
|
8,395,004
|
|
|
$
|
0.48
|
|
|
|
3.71
|
|
Granted
|
|
|
6,810,325
|
|
|
$
|
0.50
|
|
|
|
2.50
|
|
Exercised
|
|
|
(100,000)
|
|
|
$
|
0.275
|
|
|
|
-
|
|
Expired
|
|
|
-
|
|
|
$
|
-
|
|
|
|
-
|
|
Outstanding at December 31, 2013
|
|
|
145,105,329
|
|
|
$
|
0.46
|
|
|
|
2.49
|
|
Exercisable at December 31, 2013
|
|
|
145,105,329
|
|
|
$
|
0.46
|
|
|
|
2.49
|
|
|
|
Number
of Options
|
|
|
Weighted-Average
Exercise Price
|
|
|
Weighted-Average
Remaining Life (Years)
|
|
|||
Outstanding at December 31, 2012
|
|
|
200,000
|
|
|
$
|
0.55
|
|
|
|
1.8
|
|
Granted
|
|
|
-
|
|
|
$
|
-
|
|
|
|
-
|
|
Exercised
|
|
|
(200,000
|
)
|
|
$
|
0.55
|
|
|
|
1.68
|
|
Cancelled
|
|
|
-
|
|
|
$
|
-
|
|
|
|
-
|
|
Outstanding at December 31, 2013
|
|
|
-
|
|
|
$
|
-
|
|
|
|
-
|
|
Exercisable at December 31, 2013
|
|
|
-
|
|
|
$
|
-
|
|
|
|
-
|
|
Since Inception to
December
31,
2013
|
Since Inception to
December
31,
2012
|
|||||||
Net operating loss carry forward
|
$
|
1,215,458
|
$
|
483,525
|
||||
Valuation allowance
|
(1,215,458
|
)
|
(483,525
|
)
|
||||
Net deferred tax asset
|
$
|
--
|
$
|
--
|
As of
December
31,
2013
|
As of
December
31,
2012
|
|||||||
Tax at statutory rate (35%)
|
$
|
706,472
|
$
|
241,239
|
||||
Increase in valuation allowance
|
(706,472
|
)
|
(241,239
|
)
|
||||
Net deferred tax asset
|
$
|
--
|
$
|
--
|
Votes For
|
|
Votes Against
|
|
Votes Abstained
|
|
|
|
|
|
36,772,760
|
|
10,018,640
|
|
189,900
|
|
Votes For
|
Votes Against
|
Votes Abstained
|
Timothy Hassett
|
36,047,279
|
10,003,240
|
930,781
|
Judson Bibb
|
33,775,060
|
13,008,840
|
197,400
|
Quentin Ponder
|
34,028,300
|
12,755,600
|
197,400
|
Jay Palmer
|
10,058,900
|
36,715,000
|
207,400
|
Carrie Dwyer
|
10,062,140
|
36,711,760
|
207,400
|
Donica Holt
|
10,056,540
|
36,717,260
|
207,500
|
Votes For
|
Votes Against
|
Votes Abstained
|
||
36,391,260
|
10,397,840
|
192,200
|
1 Year
|
2 Years
|
3 Years
|
Abstained
|
|||
45,288,000
|
1,500,000
|
1,000
|
192,300
|
--
|
Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;
|
--
|
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and
|
--
|
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
|
Exhibit
Number
|
Description of Exhibit
|
|
3.1
|
Articles of Incorporation (incorporated by reference to Exhibit 3.1 to the Company’s Form SB-2 filed with the SEC on August 9, 2007)
|
|
3.2
|
Certificate of Amendment to the Articles of Incorporation (incorporated by reference to Exhibit 2.1 to the Company’s Form 8-K filed with the SEC on September 9, 2010)
|
|
3.3
|
Bylaws (incorporated by reference to Exhibit 3.2 to the Company’s Form SB-2 filed with the SEC on August 9, 2007)
|
|
3.4
|
Bylaws of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on April 11, 2012)
|
|
3.5
|
Certificate of Amendment to the Articles of Incorporation of the Company (incorporated by reference to Exhibit 3.3 to the Company’s Form 10-Q filed with the SEC on May 15, 2012)
|
|
3.6
|
Bylaws dated February 20, 2013 (
incorporated
by reference to Exhibit 3.6 to the Company’s Form 10-K filed with the SEC on April 15, 2013
|
|
3.6.1
|
Amendment to Article VII of the Bylaws (incorporated by reference to Exhibit 3.6.1 to the Company’s Form 8-K filed with the SEC on June 27, 2013)
|
|
3.7
|
Amendment to Article II, Section 2 of the Bylaws (incorporated by reference to Exhibit 3.7 to the Company’s Form 8-K filed with the SEC on January 17, 2014)
|
|
|
||
4.1
|
Certificate of Designation of the Series A Convertible Preferred Stock (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the SEC on December 20, 2012)
|
|
4.1.1
|
Amendment to the Certificate of Designation of the Series A Convertible Preferred Stock (incorporated by reference to Exhibit 4.1.1 to the Company’s Current Report on Form 8-K filed with the SEC on June 27, 2013)
|
|
10.1
|
Joint Venture Agreement dated September 3, 2010 between Phoenix Productions and Entertainment Group, LLC and the Company (incorporated by reference to Exhibit 1.1 to the Company’s Form 8-K filed with the SEC on September 9, 2010)
|
|
10.2
|
Loan Agreement between Phoenix Productions and Entertainment Group and the Company effective September 7, 2010 (incorporated by reference to Exhibit 10.2 to the Company’s Form 10-K filed with the SEC on October 3, 2011)
|
|
10.3
|
Stock Purchase and Sale Agreement dated November 17, 2010 between Phoenix Productions and Entertainment Group, LLC, Judson Bibb and the Company (incorporated by reference to Exhibit 1.1 to the Company’s Form 8-K filed with the SEC on December 28, 2010)
|
|
10.4
|
Agreement for the Exchange of Common Stock of HPEV, Inc. dated March 29, 2011 among the Company, HPEV, Inc., Timothy Hassett, C. Quentin Ponder, B. Mark Hodowanec and D. Darren Zellers (incorporated by reference to Exhibit 10.4 to the Company’s Form 10-K filed with the SEC on October 3, 2011)
|
|
10.5
|
Addendum to Share Exchange dated June 14, 2011 among the Company, HPEV, Inc., Timothy Hassett, C. Quentin Ponder, B. Mark Hodowanec and D. Darren Zellers (incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K filed with the SEC on August 19, 2011)
|
|
10.6
|
Memorandum of Agreement dated December 24, 2010 by and between the Company and Taharqa Aleem and Tunde Ra Aleem a/k/a Albert Allen and Arthur Allen (incorporated by reference to Exhibit 1.1 to the Company’s Form 8-K filed with the SEC on December 29, 2010)
|
10.7
|
Letter of Agreement dated September 17, 2010 among USEE, Inc., USEE, CA, Inc. and the Company (incorporated by reference to Exhibit 1.1 to the Company’s Form 8-K filed with the SEC on September 24, 2010)
|
|
10.8
|
Termination Letter dated November 15, 2010 from the Company to USEE, Inc. and USEE, CA, Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed with the SEC on November 15, 2010)
|
|
10.9
|
Amended and Restated Asset Purchase and Sale Agreement between Trinity Springs Ltd. and the Company effective January 26, 2011 (incorporated by reference to Exhibit 1.1 to the Company’s Form 8-K filed with the SEC on March 15, 2011)
|
|
10.10
|
Membership Interest Purchase Agreement related to Harvest Hartwell CCP, LLC dated September 30, 2010 between Richard Glisky and the Company (incorporated by reference to Exhibit 1.1 to the Company’s Form 8-K filed with the SEC on October 7, 2010)
|
|
10.11
|
Rescission Agreement dated September 2, 2011 between Richard Glisky and the Company (incorporated by reference to Exhibit 10.11 to the Company’s Form 10-K filed with the SEC on October 3, 2011)
|
|
10.12
|
Consulting Agreement dated April 1, 2011 between Summit Management and HPEV, Inc. (incorporated by reference to Exhibit 10.12 to the Company’s Form 10-K filed with the SEC on April 2, 2012)
|
|
10.13
|
Consulting Agreement dated April 1, 2011 between Timothy Hassett and HPEV, Inc. (incorporated by reference to Exhibit 10.13 to the Company’s Form 10-K filed with the SEC on April 2, 2012)
|
|
10.14
|
Addendum to Summit Management Consulting Agreement dated January 2, 2012. (incorporated by reference to Exhibit 10.14 to the Company’s Form 10-K filed with the SEC on April 2, 2012)
|
|
10.15
|
Addendum to Timothy Hassett Consulting Agreement dated January 2, 2012(incorporated by reference to Exhibit 10.15 to the Company’s Form 10-K filed with the SEC on April 2, 2012)
|
|
10.16
|
Consulting Agreement dated February 13, 2012 between Lagoon Labs, LLC and HPEV, Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Form 10-Q filed with the SEC on May 15, 2012)
|
|
10.17
|
Warrant issued to McMahon, Serepca LLP for financial accommodations dated June 4, 2012 (incorporated by reference to Exhibit 10.2 to the Company’s Form 10-Q filed with the SEC on November 19, 2012)
|
|
10.18
|
Spirit Bear Note and Warrant Purchase Agreement dated August 9, 2012 (incorporated by reference to Exhibit 10.3 to the Company’s Form 10-Q filed with the SEC on November 19, 2012)
|
|
10.19
|
Spirit Bear Promissory Note B-1 issued pursuant to the Note and Warrant Purchase Agreement and dated April 27, 2012 (incorporated by reference to Exhibit 10.4 to the Company’s Form 10-Q filed with the SEC on November 19, 2012)
|
|
10.20
|
Spirit Bear Promissory Note B-2 issued pursuant to the Note and Warrant Purchase Agreement and dated May 22, 2012. (incorporated by reference to Exhibit 10.5 to the Company’s Form 10-Q filed with the SEC on November 19, 2012)
|
|
10.21
|
Spirit Bear Promissory Note B-3 issued pursuant to the Note and Warrant Purchase Agreement and dated June 28, 2012 (incorporated by reference to Exhibit 10.6 to the Company’s Form 10-Q filed with the SEC on November 19, 2012)
|
|
10.22
|
Spirit Bear Promissory Note B-4 issued pursuant to the Note and Warrant Purchase Agreement and dated July 11, 2012 (incorporated by reference to Exhibit 10.7 to the Company’s Form 10-Q filed with the SEC on November 19, 2012)
|
|
10.23
|
Spirit Bear Loan Extension Agreement for Note B-1 dated October 26, 2012 (incorporated by reference to Exhibit 10.8 to the Company’s Form 10-Q filed with the SEC on November 19, 2012)
|
|
10.24
|
Securities Purchase Agreement, dated December 14, 2012, between Spirit Bear Limited and HPEV, Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on December 20, 2012)
|
10.25
|
Registration Rights Agreement dated December 14, 2012, between Spirit Bear Limited and HPEV, Inc. (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on December 20, 2012)
|
|
10.26
|
Form of Common Stock Purchase Warrant, between Spirit Bear Limited and HPEV, Inc. (incorporated by reference to Company’s Current Registration Statement on S-1filed with the SEC on January 11, 2013)
|
|
10.27
|
Form of Common Stock Purchase Warrant, between Spirit Bear Limited and HPEV, Inc (incorporated by reference to Company’s Current Registration Statement on S-1filed with the SEC on January 11, 2013)
|
|
10.28
|
Form of Common Stock Purchase Warrant, between Spirit Bear Limited and HPEV, Inc (incorporated by reference to Company’s Current Registration Statement on S-1filed with the SEC on January 11, 2013)
|
|
10.29
|
Patent and Security Agreement dated December 14, 2012, between Spirit Bear Limited and HPEV, Inc. (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed with the SEC on December 20, 2012)
|
|
10.30
|
Debt Settlement Agreement, dated December 11, 2012, by and among HPEV, Inc., Phoenix Productions and Entertainment Group and Action Media Group, LLC (incorporated by reference to Company’s Current Registration Statement on S-1filed with the SEC on January 11, 2013)
|
|
10.32
|
Loan Agreement dated March 7, 2012 between HPEV and Action Media Group LLC
(incorporated by reference to Exhibit 10.32 to the Company’s Annual Report on Form 10-K filed with the SEC on April 15, 2013)
|
|
10.33
|
Warrant issued to McMahon, Serepca, LLP for financial accommodation dated August 6, 2012
(incorporated by reference to Exhibit 10.33 to the Company’s Annual Report on Form 10-K filed with the SEC on April 15, 2013)
|
|
10.34
|
Recission Letter dated March 21, 2013 between Judson Bibb and the Company (incorporated by reference to Exhibit 10.34 to the Company’s Annual Report on Form 10-K filed with the SEC on April 15, 2013)
|
|
10.35
|
Rescission Letter dated March 24, 2013 between Theodore Banzhaf and the Company (incorporated by reference to Exhibit 10.32 to the Company’s Annual Report on Form 10-K filed with the SEC on April 15, 2013)
|
|
10.36
|
Settlement Agreement,
dated April 12, 2013 between Spirit Bear Limited and the Company (incorporated by reference to Exhibit 10.36 to the Company’s Annual Report on Form 10-K filed with the SEC on April 15, 2013)
|
|
10.38
|
Form of Subscription Agreement and Warrant Agreement (incorporated by reference to Exhibit 10.38 to the Company’s Current Report on Form 8-K filed with the SEC on February 10, 2014)
|
|
10.39
|
Employment Agreement, dated February 14, 2014, between the Company and Mark Hodowanec (incorporated by reference to Exhibit 10.40 to the Company’s Current Report on Form 8-K filed with the SEC on February 20, 2014)
|
|
10.40
|
Purchase Agreement, dated February 19, 2014, between the Company and Lincoln Park Capital Fund, LLC (incorporated by reference to Exhibit 10.40 to the Company’s Current Report on Form 8-K filed with the SEC on February 24, 2014)
|
|
10.41
|
Registration Rights Agreement, dated February 19, 2014, between the Company and Lincoln Park Capital Fund, LLC (incorporated by reference to Exhibit 10.41 to the Company’s Current Report on Form 8-K filed with the SEC on February 24, 2014)
|
|
10.42*
|
Consulting Agreement, dated May 1, 2012 with Bibb Productions & Consulting
|
|
10.43*
|
Employment Agreement, dated March 31, 2012 with Theodore Banzhaf
|
|
10.44*
|
Placement Agent and Advisory Services Agreement
|
|
21.1
|
Subsidiaries of the registrant (incorporated by reference to Exhibit 21.1 to the Company’s Form 10-K filed with the SEC on October 3, 2011).
|
|
31.1*
|
Certification of Chief Executive Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
31.2*
|
Certification of Chief Financial Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
32.1*
|
Certifications of Chief Executive Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
32.2*
|
Certifications of Chief Financial Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
HPEV, INC.
|
|||
Date: April 23, 2014
|
By:
|
/s/ Timothy Hassett
|
|
Timothy Hassett
Chairman and Chief Executive Officer,
(Principal Executive Officer)
|
Signature
|
Capacity
|
Date
|
||
/s/ Timothy Hassett
|
Chairman and Chief Executive Officer
|
April 23, 2014
|
||
Timothy Hassett
|
(Principal Executive Officer)
|
|||
/s/ Quentin Ponder
|
Vice-Chairman, Chief Financial Officer, Treasurer
|
April 23, 2014
|
||
Quentin Ponder
|
(Principal Financial and Accounting Officer)
|
|||
/s/ Judson Bibb
|
Vice-President and Secretary
|
April 23, 2014
|
||
Judson Bibb
|
·
|
Performance of the duties of Secretary of HPEV, Inc., preparation of promotional materials, submissions to the SEC, and other duties as required for performance of the contract.
|
Contract With Independent Contractor
|
Page 1 of 2 |
Contract With Independent Contractor
|
Page 2 of 2 |
Re:
|
Employment
|
●
|
Prior to raising $3.5 million investment for the Company, your compensation will be $1 per month.
|
●
|
Subsequent to raising $3.5 million as evidenced by an executed term sheet with a deposit committed, your compensation will be $20,000 per month.
|
2
|
Handling of your transition responsibilities over the next thirty (30) days in connection with your disengagement from Applied BioFuels Corporation, of which you are currently CEO, are expressly excluded
|
Sincerely
,
Z3 Enterprises, Inc., to be named HPEV, Inc.
|
|||
|
By:
|
||
Quentin Ponder, President and CEO | |||
On behalf of the Board of Directors | |||
ACCEPTED and AGREED TO this | |||
day of , 2012 | |||
_________________________________ | |||
Ted Banzhaf |
VWAP
Target
|
Number
of
Bonus
Shares
|
|
$2.00 |
1,000
,
000
|
|
$3.00 | 1,000,000 | |
$5 . 00 | 1,000,000 | |
$7.50 | 1,000 , 000 | |
$10 . 00 | 1,000,000 |
●
|
"VWAP Target" means the volume weighted average price of the Company's common stock (60 minute periods) on the OTCBB (or a national securities exchange, if applicable) for 20 consecutive trading days while Mr. Banzhaf is employed by the Company and serving as President, or within one (1) year after a Termination Without Cause.
|
●
|
"Number of Bonus Shares" means the number of shares of Common stock of the Company subject in each case to a Share Performance Bonus Option to be granted to Mr. Banzhaf.
|
1.
|
Engagement
of
MBS
: The Company hereby engages MBS, and MBS hereby accepts such engagement, to act as the Company's placement agent with respect to finding investors (the “Investors”) for one or more offerings of the Company’s securities (including placements of the Company’s debt) of no less than $750,000 and up to
$4,000,000 in a transaction or transactions exempt from registration under the Securities Act of 1933, as amended, and in compliance with the applicable laws and regulations of any jurisdiction in which securities are sold under this Agreement (each, a “
Financing
”); and
The Company acknowledges and agrees that MBS's obligations hereunder are on a reasonable best efforts basis only and that the execution of this Agreement does not constitute a commitment by MBS to purchase any securities and does not ensure the successful placement of any securities or any portion thereof or the success of MBS with respect to securing any other Financing on behalf of the Company. MBS will act solely as a broker with respect to identifying and negotiating with potential investors in a Financing. MBS will not act as an underwriter in any Financing.
|
2.
|
MBS's
Compensation
: The Company hereby agrees to pay MBS fees in such amount and upon such terms and conditions contained herein upon the successful completion of a Financing as follows:
Retainer:
The Company shall pay to MBS a non-refundable warrant retainer to purchase 400,000 shares of the Company’s common stock with a strike price equal to one hundred and ten percent (110%) of the closing market price on the Effective Date (the “Retainer Warrants”). One half of the Retainer Warrants shall vests upon the Effective Date and one half of the Retainer Warrants shall vest upon the closing of a Financing of at least $750,000.
Success
Fees:
The Company will pay MBS a Success Fee, as described below, when the Company closes on a Financing during the Term (as hereinafter defined) of this Agreement or during a two-year period thereafter.
|
(i)
|
Cash
Fee-MBS
Sourced-
For each Financing derived from a MBS Sourced Investor, the cash portion of the Success Fee will be ten percent (10%) of the gross proceeds raised in the Financing (including, without limitation, upon exercise of any warrants issued in the Financing) from MBS Sourced investors that closes on or before June 28, 2013 or eight percent (8%) of the gross proceeds raised in the Financing (including, without limitation, upon exercise of any
warrants issued in the Financing) from MBS Sourced investors that closes after June 28, 2013.
|
(ii)
|
Warrant
Fee.
For each Financing, the warrant portion of the Success Fee will be equal to twelve percent (12%) of the equity issuance in conjunction with each Financing, at the corresponding price per share of such Financing that closes on or before June 28, 2013, or eight percent (8%) of the equity issuance in conjunction with each Financing, at the corresponding price per share of such Financing that closes after June 28, 2013.
The Company agrees to provide to MBS in writing a list of Company Referrals within two days of the Effective Date of this Agreement and from time to time thereafter. The list of Company Referrals will be incorporated into this Agreement as Exhibit B and there shall be no Success Fees paid to MBS from Company Referrals.
|
(i)
|
Cash
Fee
:
The cash portion of the Success Fee will be due and payable upon the closing of each Financing and will be payable directly to MBS from the escrow established for such closing or in such other manner as may be acceptable to MBS. Immediately prior to closing of a Financing, the Company will sign a payment authorization letter, in a form to be prepared at the sole discretion of MBS, irrevocably instructing the Financing source or Escrow Agent to deduct the Success Fees due to MBS from the Financing and remit those Success Fees directly to MBS
.
|
(ii)
|
Warrants
:
The warrant portion of the Success Fee (“Warrants”) will be due and payable upon the closing of each Financing and issued to MBS in conjunction with issuance of other equity securities pursuant to the Financing. The Warrants and the Retainer Warrants will have a five (5) year term (or such longer term as is provided in any warrants issued in the Financing) and will provide for cashless exercise (even if the Investors do not have such a right). The shares underlying Warrants and the Retainer Warrants will be included in the first registration statement filed by the Company covering the securities issued in the Financing (or securities issuable upon conversion or exercise thereof). The Warrants and the Retainer Warrants will be transferable within MBS’s organization, at MBS’s discretion. The Warrants and the Retainer Warrants will contain such other terms and conditions no less favorable to MBS than the term and conditions of any warrants issued to the Investors in the Financing.
|
3.
|
Certain
Matters
Relating to MBS’s
Duties
:
|
(a)
|
MBS shall (i) assist the Company in the preparation of information documents to be shared with potential Investors (ii) identify and screen potential Investors, and
(i)
perform other related duties.
|
(b)
|
MBS shall perform its duties under this Agreement in a manner consistent with the instructions of the Company. Such performance shall include the delivery of information to potential interested parties, conducting due diligence, and leading discussions with potential Investors.
|
(c)
|
MBS shall not engage in any form of general solicitation or advertising in performing its duties under this Agreement. This prohibition includes, but is not limited to, any mass mailing, any advertisement, article or notice published in any magazine, newspaper or newsletter and any seminar or meeting where the attendees have been invited by any mass mailing, general solicitation or advertising.
|
(d)
|
MBS is and will hereafter act as an independent contractor and not as an employee of the Company and nothing in this Agreement shall be interpreted or construed to create any employment, partnership, joint venture, or other relationship between MBS and the Company. MBS will not hold itself out as having, and will not state to any person that MBS has, any relationship with the Company other than as an independent contractor. MBS shall have no right or power to find or create any liability or obligation for or in the name of the Company or to sign any documents on behalf of the Company.
|
4.
|
Certain
Matters
Relating to
Company’s
Dutie
s
:
|
(a)
|
The Company shall promptly provide MBS with all relevant information about the Company (to the extent available to the Company in the case of parties other than the Company) that shall be reasonably requested or required by MBS, which information shall be complete and accurate in all material respects at the time furnished.
|
(b)
|
The Company recognizes that in order for MBS to perform properly its obligations in a professional manner, it is necessary that MBS be informed of and, to the extent practicable, participate in meetings and discussions between the Company and any third party, including, without limitation, any prospective purchaser of the Company’s securities, relating to the matters covered by the terms of MBS's engagement.
|
(c)
|
The Company agrees that any report or opinion, oral or written, delivered to it by MBS is prepared solely for its confidential use and shall not be reproduced, summarized, or referred to in any public document or given or otherwise divulged to any other person without MBS's prior written consent, except as may be required by applicable law or regulation.
|
(d)
|
The Company represents and warrants that: (i) it has full right, power and authority to enter into this Agreement and to perform all of its obligations hereunder; (ii) this Agreement has been duly authorized and executed by and constitutes a valid and binding agreement of the Company enforceable in accordance with its terms; and (iii) the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby do not conflict
with or result in a breach of the Company's certificate of incorporation or by- laws. Further, this Agreement and the transactions contemplated herein shall not conflict with or result in the breach of any agreement to which the Company is a party at the time the transactions contemplated herein are consummated.
|
5.
|
Term;
Termination
of
Agreement
. The initial term of this Agreement shall be from the Effective Date through the first anniversary thereof (the “Initial Term”). After the Initial Term, the term of this Agreement will automatically be extended for additional successive one-month periods unless either party provides written notice to the other party of its intent not to so extend the term at least 30 days before the expiration of the then current term. The Initial Term and any extensions shall be defined as the “Term”. Either party may terminate this Agreement prior to its expiration by notifying the other party in writing upon a material breach by that other party, unless such breach is curable and is in fact cured within fifteen (15) days after such notice. Notwithstanding the foregoing, all provisions of this Agreement (including Exhibits A and B hereto) other than Sections 1, 3 and 4 (a) and (b) shall survive the termination or expiration of this Agreement. MBS shall be entitled to compensation under Section 2 (and payment for expenses under Section 12) based on the completion of a Financing prior to the termination of this Agreement, or in the event of the termination of this Agreement during the period two years following termination so long as any Investors (or any affiliate of any such person or entity) were introduced by MBS to the Company. MBS will provide to the Company within ten business days after the expiration or termination of this Agreement a list of all persons or entities introduced by MBS to the Company pursuant to this Agreement (the “Introduction List”). Within five business days following the delivery of the Introduction List to the Company, the Company will provide MBS with written notice of any objections to the inclusion of any person or entity in the Introduction List and state the basis for each objection in reasonable detail. The inclusion of a person or entity in the Introduction List shall be deemed conclusive in making a later determination as to whether a Success Fee is payable hereunder, unless the Company shall have made a timely and proper objection. The parties will cooperate to resolve the status of any person or entity as to which the Company shall have made a timely and proper objection.
|
6.
|
Indemnification
. The indemnification provisions set forth in Exhibit A hereto are incorporated by reference and are a part of this Agreement.
|
7.
|
Notices
. Any notice, consent, authorization or other communication to be given hereunder shall be in writing and shall be deemed duly given and received when delivered personally, when transmitted by fax during the normal business hours of the party receiving such notice so long a copy of that notice is also send by certified mail, return receipt requested at the time it is transmitted by fax, five business days after being mailed by certified mail, return receipt requested or one business day after being sent by a nationally recognized overnight delivery service, charges and postage prepaid, properly addressed to the party to receive such notice, at the following address or fax number for such party (or at such other address or fax number as shall hereafter be specified by such
party by like notice):
|
|
(a)
|
If to the Company,
to:
Timothy Hassett
Chief Executive Officer
HPEV, Inc.
27420 Breakers Drive
Wesley Chapel, FL 33544
Telephone Number: (707) 479-6114
Fax Number:
E-mail: tim@hpevinc.com
If to MBS, to:
Keith Moore, Principal
Monarch Bay Securities, LLC
5000 Birch Street, Suite 4800
Newport Beach, California 92660
Telephone Number:(949) 373-7281
Fax Number: (815) 301-8099
E-mail: keith@mbsecurities.com
|
8.
|
Company
to
Control
Transactions
.
The terms and conditions under which the Company would enter into a Financing shall be at the sole discretion of the Company. Nothing in this Agreement shall obligate the Company to actually consummate a Financing. The Company may terminate any negotiations or discussions at any time and reserves the right not to proceed with a Financing.
|
9.
|
Confidentiality
of
Company
Information
. MBS, and its officers, directors, employees and agents shall maintain in strict confidence and not copy, disclose or transfer to any other party (1) all confidential business and financial information regarding the Company and its affiliates, including without limitation, projections, business plans, marketing plans, product development plans, pricing, costs, customer, vendor and supplier lists and identification, channels of distribution, and terms of identification of proposed or actual contracts and (2) all confidential technology of the Company. In furtherance of the foregoing, MBS agrees that it shall not transfer, transmit, distribute, download or communicate, in any electronic, digitized or other form or media, any of the confidential technology of the Company. The foregoing is not intended to preclude MBS from utilizing, subject to the terms and conditions of this Agreement, the Financing or Offering Memorandum and/or other documents prepared or approved by the Company.
|
10.
|
Press
Releases,
Etc
. The Company shall control all press releases or announcements to the public, the media or the industry regarding any Financing or business relationship involving the Company or its affiliates. Except for communication to Investors in furtherance of this Agreement, MBS will not disclose the fact that discussions or negotiations are taking place concerning a possible Financing involving the Company, or the status or terms and conditions thereof
.
|
11.
|
Due
Diligence
:
Neither the Company, nor any of its directors, officers or stockholders, should, in any way rely on MBS to perform any due diligence with respect to the Company. It is expressly understood and agreed that the Investors will conduct their own due diligence on the Company and the opportunity.
|
12.
|
Expenses,
Etc
. . In the event a Financing closes on or before June 28, 2013 the Company will pay to MBS a non-accountable expense fee equal to two percent (2%) of gross proceeds raised in the Financing (the “Non-Accountable Fee”), which will be used to pay MBS’s travel and other expenses. The Non-Accountable Fee will be paid in the same time and manner as the Success Fee. In the event a Financing closes after June 28, 2013, the Company will reimburse MBS for all pre-approved (in writing) travel and other expenses. Such expenses shall be reimbursed within thirty (30) days of submission of MBS’s invoice with appropriate support to the Company. The Company will pay all other costs and expenses incident to the issuance, offer, sale and delivery of each Financing, including but are not limited to state “Blue Sky” fees, legal fees, printing costs, travel costs, mailing, couriers, and personal background checks.
|
13.
|
Compliance
with
Laws
. MBS represents and warrants that it shall conduct itself in compliance with applicable federal and state laws. MBS represents that it is not a party to any other Agreement, which would conflict with or interfere with the terms and conditions of this Agreement.
|
14.
|
Assignment
Permissable
. MBS reserves the right to assign a portion of this Agreement to one or more sub-agents with respect to any Financing, subject to the prior written consent of the Company. Any approved sub-agent shall be paid a portion of Success Fees as may be determined by MBS. The Company does acknowledge that MBS may pay other consultants or agents in connection with the Financing(s).
|
15.
|
Amendments
. Neither party may amend this Agreement or rescind any of its existing provisions without the prior written consent of the other party.
|
16.
|
Governing
Law;
Dispute
Resolution
. This Agreement shall be deemed to have been made in the State of California and shall be construed, and the rights and liabilities
determined, in accordance with the law of the State of California, without regard to the conflicts of laws rules of such jurisdiction. Any controversy or claim relating to or arising from this Agreement (an "Arbitrable Dispute") shall be settled by arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association (the "AAA") as such rules may be modified herein or as otherwise agreed by the parties in controversy. The forum for arbitration shall be Orange County, California. Following thirty (30) days’ notice by any party of intention to invoke arbitration, any Arbitrable Dispute arising under this Agreement and not mutually resolved within such thirty (30) day period shall be determined by a single arbitrator upon which the parties agree.
|
17.
|
Waiver
. Neither MBS’s nor the Company’s failure to insist at any time upon strict compliance with this Agreement or any of its terms nor any continued course of such conduct on their part shall constitute or be considered a waiver by MBS or the Company of any of their respective rights or privileges under this Agreement.
|
18.
|
Severability
. If any provision herein is or should become inconsistent with any present or future law, rule or regulation of any sovereign government or regulatory body having jurisdiction over the subject matter of this Agreement, such provision shall be deemed to be rescinded or modified in accordance with such law, rule or regulation. In all other respects, this Agreement shall continue to remain in full force and effect.
|
19.
|
Counterparts
. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, and will become effective and binding upon the parties at such time as all of the signatories hereto have signed a counterpart of this Agreement. All counterparts so executed shall constitute one Agreement binding on all of the parties hereto, notwithstanding that all of the parties are not signatory to the same counterpart. Each of the parties hereto shall sign a sufficient number of counterparts so that each party will receive a fully executed original of this Agreement.
|
20.
|
Entire
Agreement
. This Agreement (together with Exhibits A and B hereto) constitutes the entire agreement between the Company and MBS. No other agreements, covenants, representations or warranties, express or implied, oral or written, have been made by any party hereto to any other party concerning the subject matter hereof. All prior and contemporaneous conversations, negotiations, possible and alleged agreements, representations, covenants and warranties concerning the subject matter hereof are merged herein and shall be of no further force or effect.
|
1.
|
I have reviewed this Annual Report on Form 10-K/A of HPEV, Inc (the “registrant”) for the year ended December 31, 2013;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exhibit Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Dated: April 23, 2014
|
By:
|
/s/ Timothy Hassett
|
|
Timothy Hassett
|
|||
Chief Executive Officer
(Principal Executive Officer)
|
1.
|
I have reviewed this Annual Report on Form 10-K/A of HPEV, Inc. (the “registrant”) for the year ended December 31, 2013;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exhibit Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5. |
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting
.
|
Dated: April 23, 2014
|
By:
|
/s/ Quentin Ponder
|
|
|
Quentin Ponder
|
||
|
|
Chief Financial Officer
(Principal Financial and Accounting Officer)
|
(1)
|
The Report fully complies with the requirements of Sections 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Dated:
April 23, 2014
|
By:
|
/s/ Timothy Hassett
|
|
Timothy Hassett
|
|||
Chief Executive Officer
(Principal Executive Officer)
|
(1)
|
The Report fully complies with the requirements of Sections 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
Information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Dated: April 23, 2014
|
By:
|
/s/ Quentin Ponder
|
|
Quentin Ponder
|
|||
Chief Financial Officer
(Principal Financial and Accounting Officer)
|