10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2012.

Or

o TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________ to ______________

Commission File Number 000-49805

SOLAR3D, INC.

(Name of registrant in its charter)

Delaware (State or other jurisdiction of incorporation or organization) 01-05922991 (I.R.S. Employer Identification No.)

6500 Hollister Avenue, Suite 130 , Goleta, California 93117

(Address of principal executive offices) (Zip Code)

Issuer’s telephone Number: (805) 690-9000

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§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 o

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

Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer (Do not check if a smaller reporting company)	o	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 o No x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date.

The number of shares of registrant’s common stock outstanding as of October 31, 2012 was 136,640,260.

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION
ITEM 1.	FINANCIAL STATEMENTS (Unaudited)	1
	Balance Sheets at September 30, 2012 (Unaudited) and December 31, 2011	1
	Statements of Operations for the Three and Nine Months Ended September 30, 2012 and September 30, 2011 (Unaudited)	2
	Statement of Shareholders' Deficit at September 30, 2012 (Unaudited)	3
	Statements of Cash Flows for the Nine Months Ended September 30, 2012 and September 30, 2011 (Unaudited)	4
	Notes to the Financial Statements (Unaudited)	5
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	10
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	13
ITEM 4.	CONTROLS AND PROCEDURES	14
PART II - OTHER INFORMATION
ITEM 1.	LEGAL PROCEEDINGS	15
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	15
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	15
ITEM 4.	MINE SAFETY DISCLOSURES	15
ITEM 5.	OTHER INFORMATION	15
ITEM 6.	EXHIBITS	15
SIGNATURES		16

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

SOLAR3D, INC.

(A Development Stage Company)

BALANCE SHEETS

	September 30, 2012			December 31, 2011
	(Unaudited)
ASSETS
CURRENT ASSETS
Cash	$	8,879		$	-
Prepaid expense		8,639			25,000
TOTAL CURRENT ASSETS		17,518			25,000
PROPERTY & EQUIPMENT, at cost
Machinery & equipment		13,080			13,080
Computer equipment		57,795			57,795
Furniture & fixture		7,883			4,670
		78,758			75,545
Less accumulated depreciation		(71,016	)		(69,514	)
NET PROPERTY AND EQUIPMENT		7,742			6,031
OTHER ASSETS
Security deposit		-			2,975
TOTAL OTHER ASSETS		-			2,975
TOTAL ASSETS	$	25,260		$	34,006
LIABILITIES AND SHAREHOLDERS'  EQUITY/(DEFICIT)
CURRENT LIABILITIES
Bank Overdraft	$	-		$	12,916
Accounts payable		91,722			17,349
Accrued expenses		46,695			-
Accrued interest, related parties		2,861			-
Derivative liability		39,661			-
Convertible promissory note payable,  net of discount $40,611		1,889			-
Promissory notes payable, net of discount $53,594		60,906			-
TOTAL CURRENT LIABILITIES		243,734			30,265
SHAREHOLDERS'  EQUITY/(DEFICIT)
Common stock, $.001 par value; 550,000,000 authorized shares; 135,035,630 and 118,283,724 shares issued and outstanding, respectively		135,035			118,283
Additional paid in capital		10,866,832			9,974,861
Deficit accumulated  during the development stage		(11,220,341	)		(10,089,403	)
TOTAL SHAREHOLDERS' EQUITY/(DEFICIT)		(218,474	)		3,741
TOTAL LIABILITIES AND SHAREHOLDERS'  EQUITY/(DEFICIT)	$	25,260		$	34,006

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

1

SOLAR3D, INC.

(A Development Stage Company)

STATEMENTS OF OPERATIONS

(Unaudited)

													From Inception
													January 30, 2002
	Three Months Ended						Nine Months Ended						through
	September 30, 2012			September 30, 2011			September 30, 2012			September 30, 2011			September 30, 2012
REVENUE	$	-		$	-		$	-		$	-		$	1,127,406
COST OF SERVICES		-			-			-			-			496,177
GROSS PROFIT		-			-			-			-			631,229
OPERATING EXPENSES
Selling, general and administrative expenses		326,656			347,731			928,796			963,091			7,215,944
Research and development		28,120			49,627			126,877			97,960			1,735,980
Impairment loss		-			-			-			-			1,753,502
Depreciation and amortization expense		563			455			1,502			1,136			123,340
TOTAL OPERATING EXPENSES		355,339			397,813			1,057,175			1,062,187			10,828,766
LOSS FROM OPERATIONS		(355,339	)		(397,813	)		(1,057,175	)		(1,062,187	)		(10,197,537	)
OTHER INCOME/(EXPENSES)
Interest income		-			21			-			21			10,321
Interest expense		(23,414	)		(29	)		(42,740	)		(2,122	)		(314,546	)
Penalties		(56	)		-			(112	)		-			(296	)
Gain on derivative liability		2,839			-			2,839			-			2,839
Loss on investment		-			-			-			-			(73,121	)
Loss on settlement of debt		-			-			(33,750	)		(45,988	)		(647,038	)
Loss on sale of asset		-			-			-			-			(963	)
TOTAL OTHER INCOME/(EXPENSES)		(20,631	)		(8	)		(73,763	)		(48,089	)		(1,022,804	)
NET LOSS	$	(375,970	)	$	(397,821	)	$	(1,130,938	)	$	(1,110,276	)	$	(11,220,341	)
BASIC AND DILUTED LOSS PER SHARE	$	(0.00	)	$	(0.00	)	$	(0.01	)	$	(0.01	)
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING    BASIC AND DILUTED		130,333,909			112,026,112			124,416,096			107,302,392

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

2

SOLAR3D, INC.

(A Development Stage Company)

STATEMENT OF SHAREHOLDERS' EQUITY/(DEFICIT)

							Accumulated
							Deficit During
					Additional		the
	Common stock				Paid-in		Development
	Shares		Amount		Capital		Stage			Total
Balance at December 31, 2011		118,283,724	$	118,283	$	9,974,861	$	(10,089,403	)	$	3,741
Issuance of common stock for cash and subscription payable (price per share between $0.015 and $0.05) (unaudited)		14,876,906		14,877		316,623		-			331,500
Issuance of common stock at fair value  for accounts payable & services (unaudited)		1,875,000		1,875		106,875		-			108,750
Debt discount on promissory notes (unaudited)		-		-		91,580		-			91,580
Stock compensation cost (unaudited)		-		-		376,893		-			376,893
Net loss for the nine months ended September 30, 2012 (unaudited)		-		-		-		(1,130,938	)		(1,130,938	)
Balance at September 30, 2012 (unaudited)		135,035,630	$	135,035	$	10,866,832	$	(11,220,341	)	$	(218,474	)

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

3

SOLAR3D, INC.

(A Development Stage Company)

STATEMENTS OF CASH FLOWS

(Unaudited)

							From Inception
							January 30, 2002
	Nine Months Ended						through
	September 30, 2012			September 30, 2011			September 30, 2012
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(1,130,938	)	$	(1,110,276	)	$	(11,220,341	)
Adjustments to reconcile net loss to net cash    used in operating activities
Depreciation and amortization		1,502			1,136			123,340
Issuance of common shares and warrants for  services		-			7,148			832,361
Issuance of common shares in conversion of debt		-			-			400,000
(Gain)/loss on investment		-			-			73,121
Stock Compensation Cost		376,893			374,400			1,153,876
Change in derivative liability		(2,839	)		-			(2,839	)
Gain on sale of asset		-			-			963
Impairment loss		-			-			1,753,502
Amortization of debt discount recognized as interest		39,875			-			39,875
Loss on settlement of debt		33,750			45,988			647,038
Changes in Assets and Liabilities
(Increase) Decrease in:
Prepaid expenses		16,361			18,000			(8,639	)
Deposits and other assets		2,975			-			5,000
Increase (Decrease) in:
Accounts payable		149,373			14,574			246,222
Accrued expenses		49,556			1,950			636,837
NET CASH USED IN OPERATING ACTIVITIES		(463,492	)		(647,080	)		(5,319,684	)
NET CASH FLOWS USED IN INVESTING ACTIVITIES:
Purchase of property and equipment		(3,213	)		(2,078	)		(84,411	)
Sale of asset		-			-			3,963
Investment in companies		-			-			(6,121	)
NET CASH USED IN INVESTING ACTIVITIES		(3,213	)		(2,078	)		(86,569	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of bank overdraft		(12,916	)		-			-
Proceeds from notes payable related parties		114,500			47,000			1,288,842
Proceeds from convertible promissory note		42,500			-			171,500
Repayment of notes payable related party		-			(47,000	)		(184,000	)
Contributed capital by shareholder		-			-			19,197
Proceeds from subsidiary		-			-			300,000
Proceeds from issuance of common stock and subscription payable		331,500			656,500			3,811,943
NET CASH PROVIDED BY FINANCING ACTIVITIES		475,584			656,500			5,407,482
NET INCREASE IN CASH		8,879			7,342			1,229
CASH, BEGINNING OF PERIOD		-			3,311			7,650
CASH, END OF PERIOD	$	8,879		$	10,653		$	8,879
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Interest paid	$	-		$	134		$	137,657
Income taxes	$	-		$	-		$	-

SUPPLEMENTAL DISCLOSURES OF NON-CASH TRANSACTIONS

During the nine months ended September 30, 2011, the Company sold WDTI its subsidiary, for a secured note receivable of $100,000. The sale included the net book value of the assets and liabilities of $(560,036).

Also, 2,000,000 warrants to purchase shares of common stock were exercised through a cashless conversion for 1,375,000 shares of common stock; 133,334 shares were issued for a subscription receivable; issued 1,839,500 shares of common stock for convertible debt.

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

4

SOLAR3D, INC.

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS-UNAUDITED

SEPTEMBER 30, 2012

1.  BASIS OF PRESENTATION

The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all normal recurring adjustments considered necessary for a fair presentation have been included.  Operating results for the nine months ended September 30, 2012 are not necessarily indicative of the results that may be expected for the year ending December 31, 2012. For further information refer to the consolidated financial statements and footnotes thereto included in the Company's Form 10-K for the year ended December 31, 2011.

Going Concern

The accompanying financial statements have been prepared on a going concern basis of accounting, which contemplates continuity of operations, realization of assets and liabilities and commitments in the normal course of business.  The accompanying financial statements do not reflect any adjustments that might result if the Company is unable to continue as a going concern.  The Company does not generate significant revenue, and has negative cash flows from operations, which raise substantial doubt about the Company’s ability to continue as a going concern.  The ability of the Company to continue as a going concern and appropriateness of using the going concern basis is dependent upon, among other things, an additional cash infusion. The Company has obtained funds from its shareholders since its inception through September 30, 2012. It is Management's plan to generate additional working capital from investors, and then continue to pursue its business plan and purposes.

2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

This summary of significant accounting policies of Solar3D, Inc. is presented to assist in understanding the Company’s financial statements. The financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the financial statements.

        Development Stage Activities and Operations

The Company has been in its initial stages of formation and for the nine months ended September 30, 2012, had no revenues.  A development stage activity is one in which all efforts are devoted substantially to establishing a new business and even if planned principal operations have commenced, revenues are insignificant.

Cash and Cash Equivalent

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

Stock-Based Compensation

Share based payments applies to transactions in which an entity exchanges its equity instruments for goods or services, and also applies to liabilities an entity may incur for goods or services that are to follow a fair value of those equity instruments. We will be required to follow a fair value approach using an option-pricing model, such as the Black-Scholes option valuation model, at the date of a stock option grant. The deferred compensation calculated under the fair value method would then be amortized over the respective vesting period of the stock option. The adoption of share based compensation has no material impact on our results of operations.

        Loss per Share Calculations

Loss per Share dictates the calculation of basic earnings per share and diluted earnings per share. Basic earnings per share are computed by dividing income available to common shareholders by the weighted-average number of common shares available. Diluted earnings per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. No shares for employee options or warrants were used in the calculation of the loss per share as they were all anti-dilutive. The Company’s diluted loss per share is the same as the basic loss per share for the nine months ended September 30, 2012 and 2011 as the inclusion of any potential shares would have had an anti-dilutive effect due to the Company generating a loss.

5

SOLAR3D, INC.

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS-UNAUDITED

SEPTEMBER 30, 2012

2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Revenue Recognition

We recognize revenue upon delivery, provided that evidence of an arrangement exists, title, and risk of loss have passed to the customer, fees are fixed or determinable, and collection of the related receivable is reasonably assured.  We record revenue net of estimated product returns, which is based upon our return policy, sales agreements, management estimates of potential future product returns related to current period revenue, current economic trends, changes in customer composition and historical experience.  We accrue for warranty costs, sales returns, and other allowances based on our experience, which tells us we have less than $25,000 per year in warranty returns and allowances. Generally, we extend credit to our customers and do not require collateral.  We perform ongoing credit evaluations of our customers and historic credit losses have been within our expectations.  We do not ship a product until we have either a purchase agreement or rental agreement signed by the customer with a payment arrangement.  This is a critical policy, because we want our accountings to show only sales which are “final” with a payment arrangement.  We do not make consignment sales or inventory sales subject to a “buy back” or return arrangement from customers.  Accordingly, original equipment manufacturers do not presently have a right to return unsold products to us.

We also grant exclusive licenses for the use of the technology required to operate our products.  Software license revenue is recognized over the contract period, for those contracts that either do not contain a service component or that have services which are not essential to the functionality of any other element of the contract.

Fair Value of Financial Instruments

Disclosures about fair value of financial instruments, requires disclosure of the fair value information, whether or not recognized in the balance sheet, where it is practicable to estimate that value. As of September 30, 2012, the amounts reported for cash, accrued interest and other expenses, and notes payable approximate the fair value because of their short maturities.

We adopted ASC Topic 820 (originally issued as SFAS 157, “Fair Value Measurements”) as of January 1, 2008 for financial instruments measured as fair value on a recurring basis. ASC Topic 820 defines fair value, established a framework for measuring fair value in accordance with accounting principles generally accepted in the United States and expands disclosures about fair value measurements.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 established a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1measurements) and the lowest priority to unobservable inputs (level 3 measurements). These tiers include:

·   Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets;

·   Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and

·   Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

6

SOLAR3D, INC.

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS-UNAUDITED

SEPTEMBER 30, 2012

2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

We measure certain financial instruments at fair value on a recurring basis. Assets and liabilities measured at fair value on a recurring basis are as follows at September 30, 2012:

	Total		(Level 1)		(Level 2)		(Level 3)
Assets	$	-	$	-	$	-	$	-
Total assets measured at fair value	$	-	$	-	$	-	$	-
Liabilities
Derivative liability		39,661		-		-		39,661
Convertible promissory note		1,889		-		-		1,889
Promissory notes, net of discount		60,906		-		-		60,906
Total liabilities measured at fair value	$	102,456	$	-	$	-	$	102,456

Recently adopted pronouncements

Management reviewed accounting pronouncements issued during the nine months ended September 30, 2012, and adopted  the following:

The Company adopted ASC 815 “Accounting for Derivative Instruments and Hedging Activities”. This pronouncement addresses the accounting for derivative instruments including certain derivative instruments embedded in other contracts, and hedging activities. Derivative instruments that meet the definition of assets and liabilities should be reported in the financial statements at fair value, and any gain or loss should be recognized in current earnings. The adoption of this pronouncement did not have a material effect on the financial statements of the Company.

The Company adopted ASC 835 "Accounting for Interest". This pronouncement addresses the appropriate accounting when the face amount of a note does not reasonably represent the present value of the consideration given or received in the exchange. A note issued solely for cash equal to its face amount is presumed to earn the stated rate of interest, however, in some cases the parties may also exchange unstated or stated rights or privileges, which are given accounting recognition by establishing a note discount or premium account. In such instances, the effective interest rate differs from the stated rate.  The note discount shall be amortized as interest expense over the life of the note. The Company recognized interest expense on the promissory notes in prior periods of $99,500, before the adoption of the pronouncement. During the current period the Company reclassified $61,514 of interest expense from earnings and recognized a debt discount netted against the face amount of the notes. The adoption of this pronouncement had a material effect on the financial statements of the Company.

3.    CAPITAL STOCK AND WARRANTS

During the nine months ended September 30, 2012, the Company issued 5,333,334 shares of common stock, with 8,000,000 stock purchase warrants at a price of $0.015 per share for cash of $80,000; issued 2,025,000 shares of common stock at a price of $0.020 per share for cash of $40,500; issued 3,180,000 shares of common stock, with 6,360,000 stock purchase warrants  at a price of $0.025 per share for cash of $79,500; issued 2,150,000 shares of common stock at a price of $0.025 per share for cash of $53,750; issued 1,125,000 shares of common stock for services at a fair value of $78,750, recognizing a loss of $33,750 on settlement of debt; issued 300,000 shares of common stock at a price of $0.03 per share for cash of $9,000; issued 428,572 shares of common stock with 857,144 stock purchase warrants at a price of $0.035 per share for cash of $15,000; issued 25,000 shares of common stock at a price of $0.05 per share for cash of $1,250; issued 800,000 shares of common stock with 1,600,000 stock purchase warrants at a price of $0.05 per share for cash of $40,000; issued 135,000 shares of common stock at a price of $0.05 for a subscription payable of $6,750; issued 500,000 shares of common stock at a price of $0.025 for a subscription payable of $12,500; issued 750,000 shares of common stock for accounts payable at fair value of $30,000.

7

SOLAR3D, INC.

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS-UNAUDITED

SEPTEMBER 30, 2012

4.      STOCK OPTIONS AND WARRANTS

As of September 30, 2012, the Board of Directors of the Company granted non-qualified stock options for 18,000,000 shares of common stock to its employees, directors and consultants, as agreements may provide. Notwithstanding any other provisions of the Option agreements, each Option expires on the date specified in the Option agreements, which date shall not be later than the fifth (5th) anniversary from the grant date of the options. The stock options vest at various times, and are exercisable for a period of seven years from the date of grant at  exercise prices ranging from $0.03 to $0.05 per share, the market value of the Company’s common stock on the date of grant. The Company determined the fair market value of these options by using the Black Scholes option valuation model with the following significant assumptions:

Risk free interest rate		1.01% -2.38	%
Stock volatility factor		213.03% -229	%
Weighted average expected option life	7 years
Expected dividend yield	None

A summary of the Company’s stock option activity and related information follows:

	9/30/2012
			Weighted
	Number		average
	of		exercise
	Options		price
Outstanding, beginning of period		15,000,000	$	0.05
Granted		3,000,000		0.01
Exercised		-		-
Expired		-		-
Outstanding, end of period		18,000,000	$	0.04
Exercisable at the end of period		10,916,667	$	0.05
Weighted average fair value of    options granted during the period			$	0.01

The stock-based compensation expense recognized in the statement of operations during the nine months ended September 30, 2012 was $376,893.

       WARRANTS

During the nine months ended September 30, 2012, the Company granted 16,817,144 stock purchase warrants associated with the issuance of 9,741,906 shares of common stock through a private placement at prices between $0.015 and $0.05. Also, the Company granted 9,194,286 common stock purchase warrants associated with the promissory notes in the amount of $114,500 as collateral.  As of September 30, 2012, the Company had a total of 40,244,770 common stock purchase warrants outstanding.

5.   RELATED PARTY TRANSACTIONS

During the nine months ended September 30, 2012, the Company signed promissory notes for funds received in the amount of $114,500 for operating expenses from an existing shareholder. The notes bear interest at 5% per annum, and are due within one year. Also, as collateral the shareholder was assigned common stock purchase warrants to purchase 9,194,286 shares of common stock. The warrants were evaluated for purposes of classification under ASC Topic 480-10. “Distinguishing Liabilities from Equity” (pre-codification SFAS 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity). The warrants did not embody any of the conditions for liability classification under the ASC 480-10 context. The warrants were then evaluated under ASC 815, and were accounted for under the equity classification, and the proceeds were allocated based on the relative fair value of the instruments.

8

SOLAR3D, INC.

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS-UNAUDITED

SEPTEMBER 30, 2012

6.   CONVERTIBLE PROMISSORY NOTE

During the period ended September 30, 2012, the Company entered into a securities purchase agreement dated September 19, 2012, providing for the issuance of the 8% Convertible Promissory Note (“Note”) in the principal amount of $42,500 with a maturity date of June 21, 2013. The note bears interest at the rate of 8% per annum from the date of issuance. The note can be converted into common stock at a variable conversion price. The variable conversion price is 58% multiplied by the market price, representing a 42% discount rate. The market price is the average of the lowest three (3) trading prices for the common stock during the ten (10) trading days prior to the conversion date.

We evaluated the financing transactions in accordance with ASC Topic 815, Derivatives and Hedging, and determined that the conversion feature of the convertible promissory note was not afforded the exemption for conventional convertible instruments due to its variable conversion rate. The note has no explicit limit on the number of shares issuable so they did not meet the conditions set forth in current accounting standards for equity classification.  The Company elected to recognize the note under paragraph 815-15-25-4, whereby, there would be a separation into a host contract and derivative instrument. The Company elected to initially and subsequently measure the note in its entirety at fair value, with changes in fair value recognized in earnings. The Company recorded a derivative liability of $42,500 representing the imputed interest associated with the embedded derivative. The discount is amortized over the life of the note, and for the period ended September 30, 2012, the Company recognized $1,889 as interest expense. The derivative liability is adjusted periodically according to the stock price fluctuations. At the time of conversion, any remaining derivative liability will be charged to additional paid-in capital.  For purpose of determining the fair value of the note, the Company used the Black Scholes option valuation model. The significant assumptions used in the Black Scholes valuation are as follows:

Stock price on the valuation date	$	0.04
Conversion price for the note	$	0.0232
Years to maturity		1
Risk free rate		0.17	%
Expected volatility		110.16	%

The change in derivative liability recognized in the financial statements as of September 30, 2012 was $2,839.

7.   SUBSEQUENT EVENTS

Management has evaluated subsequent events according to the requirements of ASC TOPIC 855 and has reported the following events:

On October 3, 2012, the Company issued 575,000 shares of common stock for settlement of debt for services at a fair value of $26,000.

On October 10, 2012, the Company issued 1,029,630 shares of common stock for settlement of debt for services at a fair value of $41,185.

Management concluded there were no other subsequent events or transactions that require recognition or disclosure in the financial statements.

9

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Cautionary Statements

This Form 10-Q contains financial projections and other “forward-looking statements,” as that term is used in federal securities laws, about Solar3D, Inc.’s (“Solar3D,” “we,” “us,” or the “Company”) financial condition, results of operations and business.  These statements include, among others: statements concerning the potential for revenues and expenses and other matters that are not historical facts.  These statements may be made expressly in this Form 10-Q.  You can find many of these statements by looking for words such as “believes,” “expects,” “anticipates,” “estimates,” or similar expressions used in this Form 10-Q.  These forward-looking statements are subject to numerous assumptions, risks and uncertainties that may cause the Company’s actual results to be materially different from any future results expressed or implied by the Company in those statements.  The most important facts that could prevent the Company from achieving its stated goals include, but are not limited to, the following:

(a) inability to complete research and development of the new Solar3D technology with little or no current revenue;

(b) volatility or decline of the Company’s stock price;

(c) potential fluctuation in quarterly results;

(d) failure of the Company to earn revenues or profits;

(e) inadequate capital to continue business;

(f) barriers to raising the additional capital or to obtaining the financing needed to implement its business plans;

(g) lack of demand for the Company’s products and services;

(h) rapid and significant changes in markets;

(i) litigation with or legal claims and allegations by outside parties;

(j) insufficient revenues to cover operating costs;

(k) inability to start or acquire new businesses, or lack of success of new businesses started or acquired by the Company, if any;

(l) inability to effectively develop or commercialize our new Solar3D technology; and

(m) inability to obtain patent or other protection for the Company’s proprietary intellectual property.

Because the statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by the forward-looking statements.  The Company cautions you not to place undue reliance on the statements, which speak only as of the date of this Form 10-Q.  The cautionary statements contained or referred to in this section should be considered in connection with any subsequent written or oral forward-looking statements that the Company or persons acting on its behalf may issue.

10

The Company does not undertake any obligation to review or confirm analysts’ expectations or estimates or to release publicly any revisions to any forward-looking statements to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect the occurrence of unanticipated events.

The following discussion should be read in conjunction with our condensed financial statements and notes to those statements.  In addition to historical information, the following discussion and other parts of this quarterly report contain forward-looking information that involves risks and uncertainties.

Overview

On August 5, 2010, the holders of a majority of the outstanding voting stock of the Company voted by written consent to (1) effect a one-for-five reverse stock split, and (2) change the name of the Company to Solar 3D, Inc.  Our new business focus is centered on the acquisition, development, and commercialization of new proprietary technology to significantly increase the efficiency and energy production of solar photovoltaic cells that are currently offered in the market and that may be developed in the future.  In furtherance of our new business focus, we recently applied for patents covering a novel nine-dimensional solar cell technology that is designed to maximize the conversion of sunlight into electricity.  We believe our new technology will dramatically increase the efficiency of solar cells.

Almost all conventional solar cells have a two-dimensional design where up to 30 percent of incident is sunlight reflected off of each solar cell’s surface and more light energy absorbed and lost inside the solar cell materials than is converted into energy.  By contrast, our Solar3D design uses a matrix of light-collecting elements that guide sunlight into a corresponding array of nine-dimensional, micro-photovoltaic structures.  The sunlight, in the form of photons, is trapped among these micro-structures, where it bounces around until virtually all of the energy is converted into electricity.Solar3D aims to create a better solar cell using this innovative technique by eliminating surface reflection and maximizing the conversion of photons into electrons to achieve greater efficiency and a lower cost per watt.

We currently have one full time employee, our chief executive officer.  We also retain the services of several research consultants who are responsible for product development and a receptionist/secretary who oversees bookkeeping and office coordination.

Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America.  The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities.  On an ongoing basis, we evaluate our estimates, including those related to impairment of property, plant and equipment, intangible assets, deferred tax assets and fair value computation using the Black Scholes option pricing model.  We base our estimates on historical experience and on various other assumptions, such as the trading value of our common stock and estimated future undiscounted cash flows, that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources.  Actual results may differ from these estimates under different assumptions or conditions; however, we believe that our estimates, including those for the above-described items, are reasonable.

11

Use of Estimates

In accordance with accounting principles generally accepted in the United States, management utilizes estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements as well as the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.  These estimates and assumptions relate to recording net revenue, collectability of accounts receivable, useful lives and impairment of tangible and intangible assets, accruals, income taxes, inventory realization, stock-based compensation expense and other factors.  Management believes it has exercised reasonable judgment in deriving these estimates. Consequently, a change in conditions could affect these estimates.

Fair Value of Financial Instruments

Our cash, accounts receivable and accounts payable are stated at cost which approximates fair value due to the short-term nature of these instruments.

Revenue Recognition

We will continue to recognize revenue in accordance with the Securities and Exchange Commission Staff Accounting Bulletin No. 104, “Revenue Recognition in Financial Statements” (“SAB 104”).  We will continue to recognize revenue upon delivery, provided that evidence of an arrangement exists, title, and risk of loss have passed to the customer, fees are fixed or determinable, and collection of the related receivable is reasonably assured.  We will continue to record revenue net of estimated product returns, which is based upon our return policy, sales agreements, management estimates of potential future product returns related to current period revenue, current economic trends, changes in customer composition and historical experience.  We will continue to accrue for warranty costs, sales returns, and other allowances based on our prior experience in servicing customers and products.  We may extend credit to our customers based upon credit evaluations and do not require collateral.  We do not and will not ship a product until we have either a purchase agreement or rental agreement signed by the customer with a payment arrangement.  This is a critical policy, because we want our accounting to show only sales which are “final” with a payment arrangement.  We do not and will not make consignment sales or inventory sales subject to a “buy back” or return arrangement from customers.

Provision For Sales Returns, Allowances and Bad Debts

We will continue to maintain a provision for sales allowances, returns and bad debts.  Sales returns and allowances result from equipment damaged in delivery or customer dissatisfaction, as provided by agreement.  The provision will continue to be provided for by reducing gross revenue by a portion of the amount invoiced during the relevant period.  The amount of the reduction will continue to be estimated based on historical experience.

RESULTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2012 COMPARED TO THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2011

REVENUE AND COST OF SALES

For the three and nine months ended September 30, 2012 and 2011, the Company had no revenue or cost of sales and is in its development stage.

SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES

Selling, general, and administrative (“SG&A”) expenses decreased by $(21,075) to $326,656 for the three months ended September 30, 2012 compared to $347,731 for the three months ended September 30, 2011.  SG&A expenses decreased by $(34,295) to $928,796 for the nine months ended September 30, 2012, compared to $963,091 for the nine months ended September 30, 2011.  SG&A expenses decreased primarily due to a decrease in public relations expense, and overall SG&A expenses.

12

RESEARCH AND DEVELOPMENT

Research and development (“R&D”) costs decreased by $(21,507) to $28,120 for the three months ended September 30, 2012 compared to $49,627 for the three months ended September 30, 2011.  R&D costs increased by $28,917 to $126,877 for the nine months ended September 30, 2012, compared to $97,960 for the nine months ended September 30, 2011. This net increase in R&D costs was the result of an increase in consulting fees and outside services related to review of the technology.

NET LOSS

Net loss decreased by $(99,719) to $(298,102) for the three months ended September 30, 2012, compared to $(397,821) for the three months ended September 30, 2011. Net loss increased by $24,452 to (1,134,728) for the nine months ended September 30, 2012, compared to $(1,110,276) for the nine months ended September 30, 2011. The increase in net loss was the result of a net increase in overall operating expenses.  Currently, operating costs exceed revenue because sales have not yet commenced.  We cannot assure when or if revenue will exceed operating costs.

LIQUIDITY AND CAPITAL RESOURCES

As of September 30, 2012, we had a working capital deficit of $(187,506) as compared to a working capital deficit of $(5,265) at December 31, 2011.  This increase in working capital deficit was due primarily to an overall increase in accounts payable, accrued expenses, and promissory notes payable.

Cash flow used in operating activities was $(463,492) for the nine months ended September 30, 2012, as compared to cash used of $(647,080) for the nine months ended September 30, 2011.  This decrease of cash used in operating activities of $(183,588) was primarily attributable to the increase in net loss plus the payment of prepaid expenses and the increase in accounts payable and accrued expenses.

Cash used in investing activities was $(3,213) for the nine months ended September 30, 2012, compared to $(2,078) for the nine months ended September 30, 2011.  The increase of $1,135 in the use of cash in investing activities was due to higher purchases of tangible assets during the current period.

Cash provided from financing activities during the nine months ended September 30, 2012 was $475,584 as compared to cash provided of $656,500 for the nine months ended September 30, 2011.  The decrease of $(180,916) was primarily due to a decrease in equity financing.

Off-Balance Sheet Arrangements

We do not have any off balance sheet arrangements that are reasonably likely to have a current or future effect on our financial condition, revenues, results of operations, liquidity, or capital expenditures.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not Applicable.

13

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed by us is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission.

Our management, under the direction of our Chief Executive Officer and Principal Financial Officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as such terms are defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of September 30, 2012.  As part of such evaluation, management considered the matters discussed below relating to internal control over financial reporting.  Based on this evaluation our management, including our Chief Executive Officer and Principal Financial Officer, has concluded that our disclosure controls and procedures were effective as of September 30, 2012.

Internal Control over Financial Reporting

The Company’s Chief Executive Officer and Principal Financial Officer is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act).  Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes of accounting principles generally accepted in the United States.  Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives.

Changes in Internal Controls over Financial Reporting

There were no changes in the Company’s internal control over financial reporting identified in connection with the evaluation of it that occurred during the nine month period ended September 30, 2012 that materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting.

14

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

None.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

In addition to the sales of equity reported by us on Form 8K during the three month period ended September 30, 2012, we issued 2,725,000 shares of common stock at prices between $0.020 and $0.025 per share for $45,500 in cash; 3,066,668 shares of common stock, with 3,066,668 common stock purchase warrants, at prices ranging from $0.015 to $0.025 per unit, each unit consisting of one (1) share of common stock and one (1) common stock purchase warrants, for cash of $50,000; 2,666,668 shares of common stock, with 5,333,332 common stock purchase warrants, at a price of $0.015 per unit, each unit consisting of one (1) share of common stock and two (2) common stock purchase warrants, for cash of $40,000, pursuant to the private placement exemption available under Rule 506 of Regulation D of the Securities Act of 1933, as amended.  The proceeds from the sale of these shares are being used for general working capital.

During the three month period ended September 30, 2012, the Company issued 2,000,000 common stock purchase warrants to purchase 2,000,000 shares of the Company’s common stock in conjunction with the issuance of a $15,000 promissory note pursuant to the private placement exemption available under Rule 506 of Regulation D of the Securities Act of 1933, as amended.

During the three month period ended September 30, 2012, the Company issued 750,000 shares of common stock for settlement of debt for accounts payable at a fair value of $30,000.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. MINE SAFETY DISCLOSURES.

None.

ITEM 5. OTHER INFORMATION.

None.

ITEM 6. EXHIBITS.

Exhibit	Description
31.1	Section 302 Certification of Principal Executive Officer
31.2	Section 302 Certification of Principal Financial Officer
32.1	Section 906 Certification of Principal Executive Officer
32.2	Section 906 Certification of Principal Financial Officer

101.INS	XBRL Instance Document *
101.SCH	XBRL Taxonomy Extension Schema Document *
101.CAL	XBRL Taxonomy Extension Calculation Linkbase *
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document *
101.LAB	XBRL Taxonomy Extension Label Linkbase Document **
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document *

* Furnished herewith. Pursuant to Rule 406T of Regulation S-T, the interactive data files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, and otherwise are not subject to liability under those sections.

15

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 SOLAR3D, INC.

Dated:  November 6, 2012                                                           By: /s/James B. Nelson                                                                           

James B. Nelson, Director, Chief Executive Officer, President, and Interim Chief Financial Officer (Principal Executive Officer/Principal Financial Officer)

16

EX-31.1

EXHIBIT 31.1

SECTION 302 CERTIFICATION

EXHIBIT 31.1

CERTIFICATION

I, James B. Nelson, certify that:

1.           I have reviewed this report on Form 10-Q of Solar3D, Inc.;

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

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

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

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

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

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

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

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 (of 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 small business issuer’s internal control over financial reporting.

Dated:  November 6, 2012

/s/ James B. Nelson                                                                      

James B. Nelson, Chief Executive Officer and President

(Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

SECTION 302 CERTIFICATION

EXHIBIT 31.2

CERTIFICATION

I, James B. Nelson, certify that:

1.           I have reviewed this report on Form 10-Q of Solar3D, Inc.;

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

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

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

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

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

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

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

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 (of 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 small business issuer’s internal control over financial reporting.

Dated:  November 6, 2012

/s/ James B. Nelson                                                                      

James B. Nelson, Interim Chief Financial Officer

(Principal Financial Officer)

EX-32.1

EXHIBIT 32.1

SECTION 906 CERTIFICATION

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Solar3D, Inc. (the “Company”) on Form 10-Q for the period ending September 30, 2012 (the “Report”) I, James B. Nelson, Chief Executive Officer and President of the Company, certify, pursuant to 18 USC Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge and belief:

(1) The Report fully complies with the requirements of Section 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:  November 6, 2012

/s/ James B. Nelson                                                                      

James B. Nelson, Chief Executive Officer and President

(Principal Executive Officer)

This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

EX-32.2

EXHIBIT 32.2

SECTION 906 CERTIFICATION

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Solar3D, Inc. (the “Company”) on Form 10-Q for the period ending September 30, 2012 (the “Report”) I, James B. Nelson, Interim Chief Financial Officer of the Company, certify, pursuant to 18 USC Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge and belief:

(1) The Report fully complies with the requirements of Section 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:  November 6, 2012

/s/ James B. Nelson                                                                      

James B. Nelson, Interim Chief Financial Officer

(Principal Financial Officer)

This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

XML

4. STOCK OPTIONS AND WARRANTS (Detail) - Schedule of valuation assumptions	9 Months Ended
	Sep. 30, 2012
Minimum [Member]
Risk free interest rate	1.01%
Stock volatility factor	213.03%
Weighted average expected option life	7 years
Expected dividend yield	0.00%
Maximum [Member]
Risk free interest rate	2.38%
Stock volatility factor	229.00%
Weighted average expected option life	7 years
Expected dividend yield	0.00%

XML

1. BASIS OF PRESENTATION

9 Months Ended

Sep. 30, 2012

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

1.  BASIS OF PRESENTATION

The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all normal recurring adjustments considered necessary for a fair presentation have been included.  Operating results for the nine months ended September 30, 2012 are not necessarily indicative of the results that may be expected for the year ending December 31, 2012. For further information refer to the consolidated financial statements and footnotes thereto included in the Company's Form 10-K for the year ended December 31, 2011.

Going Concern

The accompanying financial statements have been prepared on a going concern basis of accounting, which contemplates continuity of operations, realization of assets and liabilities and commitments in the normal course of business.  The accompanying financial statements do not reflect any adjustments that might result if the Company is unable to continue as a going concern.  The Company does not generate significant revenue, and has negative cash flows from operations, which raise substantial doubt about the Company’s ability to continue as a going concern.  The ability of the Company to continue as a going concern and appropriateness of using the going concern basis is dependent upon, among other things, an additional cash infusion. The Company has obtained funds from its shareholders since its inception through September 30, 2012. It is Management's plan to generate additional working capital from investors, and then continue to pursue its business plan and purposes.

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6. CONVERTIBLE PROMISSORY NOTE (Detail) - Schedule of significant assumptions (USD $)	9 Months Ended
	Sep. 30, 2012
Stock price on the valuation date (in Dollars per share)	$ 0.04
Conversion price for the note (in Dollars per share)	$ 0.0232
Years to maturity	1 year
Risk free rate	0.17%
Expected volatility	110.16%

XML

6. CONVERTIBLE PROMISSORY NOTE (Detail) (USD $)	3 Months Ended	9 Months Ended	128 Months Ended
	Sep. 30, 2012	Sep. 30, 2012	Sep. 30, 2012
Debt Instrument, Face Amount	$ 114,500	$ 114,500	$ 114,500
Debt Instrument, Interest Rate, Stated Percentage	5.00%	5.00%	5.00%
Amortization of Debt Discount (Premium)		39,875	39,875
Derivative, Gain (Loss) on Derivative, Net	2,839	2,839	2,839
Convertible promissory note, September 19, 2012 [Member]
Debt Instrument, Face Amount	42,500	42,500	42,500
Debt Instrument, Interest Rate, Stated Percentage	8.00%	8.00%	8.00%
Debt Instrument, Convertible, Terms of Conversion Feature		58% multiplied by the market price, representing a 42% discount rate. The market price is the average of the lowest three (3) trading prices for the common stock during the ten (10) trading days prior to the conversion date
Amortization of Debt Discount (Premium)		1,889
Derivative, Gain (Loss) on Derivative, Net		$ 2,839

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7. SUBSEQUENT EVENTS (Detail) (USD $)	1 Months Ended	9 Months Ended
	Oct. 31, 2012	Sep. 30, 2012
Stock Issued During Period, Shares, Other	575,000	1,375,000
Stock Issued During Period, Value, Other (in Dollars)	$ 26,000	$ 108,750
Stock Issued During Period, Shares, Issued for Services	1,029,630
Stock Issued During Period, Value, Issued for Services (in Dollars)	$ 41,185

XML

SUPPLEMENTAL DISCLOSURES OF NON-CASH TRANSACTIONS

9 Months Ended

Sep. 30, 2012

Cash Flow, Supplemental Disclosures [Text Block]

SUPPLEMENTAL DISCLOSURES OF NON-CASH TRANSACTIONS

During the nine months ended September 30, 2011, the Company sold WDTI its subsidiary, for a secured note receivable of $100,000. The sale included the net book value of the assets and liabilities of $(560,036).

Also, 2,000,000 warrants to purchase shares of common stock were exercised through a cashless conversion for 1,375,000 shares of common stock; 133,334 shares were issued for a subscription receivable; issued 1,839,500 shares of common stock for convertible debt.

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BALANCE SHEETS (USD $)	Sep. 30, 2012	Dec. 31, 2011
CURRENT ASSETS
Cash	$ 8,879	$ 0
Prepaid expense	8,639	25,000
TOTAL CURRENT ASSETS	17,518	25,000
PROPERTY & EQUIPMENT, at cost
Machinery & equipment	13,080	13,080
Computer equipment	57,795	57,795
Furniture & fixture	7,883	4,670
	78,758	75,545
Less accumulated depreciation	(71,016)	(69,514)
NET PROPERTY AND EQUIPMENT	7,742	6,031
OTHER ASSETS
Security deposit		2,975
TOTAL OTHER ASSETS		2,975
TOTAL ASSETS	25,260	34,006
CURRENT LIABILITIES
Bank Overdraft		12,916
Accounts payable	91,722	17,349
Accrued expenses	46,695
Accrued interest, related parties	2,861
Derivative liability	39,661
Convertible promissory note payable, net of discount $40,611	1,889
Promissory notes payable, net of discount $53,594	60,906
TOTAL CURRENT LIABILITIES	243,734	30,265
SHAREHOLDERS' EQUITY/(DEFICIT)
Common stock, $.001 par value; 550,000,000 authorized shares; 135,035,630 and 118,283,724 shares issued and outstanding, respectively	135,035	118,283
Additional paid in capital	10,866,832	9,974,861
Deficit accumulated during the development stage	(11,220,341)	(10,089,403)
TOTAL SHAREHOLDERS' EQUITY/(DEFICIT)	(218,474)	3,741
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY/(DEFICIT)	$ 25,260	$ 34,006

XML

STATEMENT OF SHAREHOLDERS' EQUITY (DEFICIT) (Parentheticals) (Common Stock [Member])	9 Months Ended
	Sep. 30, 2012
Common Stock [Member]
Common stock, price per share	price per share between $0.015 and $0.05

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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Detail) - Schedule of fair value, assets and liabilities, measured on recurring basis (USD $)	Sep. 30, 2012
Assets	$ 0
Total assets measured at fair value	0
Derivative liability	39,661
Convertible promissory note	1,889
Promissory notes, net of discount	60,906
Total liabilities measured at fair value	102,456
Fair Value, Inputs, Level 1 [Member]
Assets	0
Total assets measured at fair value	0
Derivative liability	0
Convertible promissory note	0
Promissory notes, net of discount	0
Fair Value, Inputs, Level 2 [Member]
Assets	0
Total assets measured at fair value	0
Derivative liability	0
Convertible promissory note	0
Promissory notes, net of discount	0
Fair Value, Inputs, Level 3 [Member]
Assets	0
Total assets measured at fair value	0
Derivative liability	39,661
Convertible promissory note	1,889
Promissory notes, net of discount	60,906
Total liabilities measured at fair value	$ 102,456

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4. STOCK OPTIONS AND WARRANTS (Detail) (USD $)	9 Months Ended		128 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012
Share-based Compensation Arrangement by Share-based Payment Award, Terms of Award	each Option expires on the date specified in the Option agreements, which date shall not be later than the fifth (5 th ) anniversary from the grant date of the options. The stock options vest at various times, and are exercisable for a period of seven years from the date of grant
Share-based Compensation (in Dollars)	$ 376,893	$ 374,400	$ 1,153,876
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Granted (in Shares)	16,817,144
Debt Instrument, Face Amount (in Dollars)	$ 114,500		$ 114,500
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding, Number (in Shares)	40,244,770		40,244,770
Warrants issued with debt [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Granted (in Shares)	9,194,286
Minimum [Member]
Investment Warrants, Exercise Price	$ 0.03
Maximum [Member]
Investment Warrants, Exercise Price	$ 0.05
Minimum [Member]
Sale of Stock, Price Per Share	$ 0.015		$ 0.015
Maximum [Member]
Sale of Stock, Price Per Share	$ 0.05		$ 0.05

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STATEMENTS OF CASH FLOWS (Unaudited) (USD $)	9 Months Ended		128 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (1,130,938)	$ (1,110,276)	$ (11,220,341)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization	1,502	1,136	123,340
Issuance of common shares and warrants for services		7,148	832,361
Issuance of common shares in conversion of debt			400,000
(Gain)/loss on investment			73,121
Stock Compensation Cost	376,893	374,400	1,153,876
Change in derivative liability	(2,839)		(2,839)
Gain on sale of asset			963
Impairment loss			1,753,502
Amortization of debt discount recognized as interest	39,875		39,875
Loss on settlement of debt	33,750	45,988	647,038
(Increase) Decrease in:
Prepaid expenses	16,361	18,000	(8,639)
Deposits and other assets	2,975		5,000
Increase (Decrease) in:
Accounts payable	149,373	14,574	246,222
Accrued expenses	49,556	1,950	636,837
NET CASH USED IN OPERATING ACTIVITIES	(463,492)	(647,080)	(5,319,684)
NET CASH FLOWS USED IN INVESTING ACTIVITIES:
Purchase of property and equipment	(3,213)	(2,078)	(84,411)
Sale of asset			3,963
Investment in companies			(6,121)
NET CASH USED IN INVESTING ACTIVITIES	(3,213)	(2,078)	(86,569)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of bank overdraft	(12,916)
Proceeds from notes payable related parties	114,500	47,000	1,288,842
Proceeds from convertible promissory note	42,500		171,500
Repayment of notes payable related party		(47,000)	(184,000)
Contributed capital by shareholder			19,197
Proceeds from subsidiary			300,000
Proceeds from issuance of common stock and subscription payable	331,500	656,500	3,811,943
NET CASH PROVIDED BY FINANCING ACTIVITIES	475,584	656,500	5,407,482
NET INCREASE IN CASH	8,879	7,342	1,229
CASH, BEGINNING OF PERIOD		3,311	7,650
CASH, END OF PERIOD	8,879	10,653	8,879
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Interest paid		134	137,657
Income taxes	$ 0	$ 0	$ 0

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BALANCE SHEETS (Parentheticals) (USD $)	Sep. 30, 2012	Dec. 31, 2011
Discount, convertible promissory note payable (in Dollars)	$ 40,611	$ 0
Discount, promissory notes payable (in Dollars)	$ 53,594	$ 0
Common stock, par value (in Dollars per share)	$ 0.001	$ 0.001
Common stock, shares issued (in Shares)	135,035,630	118,283,724
Common stock, shares outstanding (in Shares)	135,035,630	118,283,724
Common stock, authorized shares (in Shares)	550,000,000	550,000,000

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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

9 Months Ended

Sep. 30, 2012

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]

We measure certain financial instruments at fair value on a recurring basis. Assets and liabilities measured at fair value on a recurring basis are as follows at September 30, 2012:

	Total		(Level 1)		(Level 2)		(Level 3)
Assets	$	-	$	-	$	-	$	-
Total assets measured at fair value	$	-	$	-	$	-	$	-
Liabilities
Derivative liability		39,661		-		-		39,661
Convertible promissory note		1,889		-		-		1,889
Promissory notes, net of discount		60,906		-		-		60,906
Total liabilities measured at fair value	$	102,456	$	-	$	-	$	102,456

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Document And Entity Information	9 Months Ended
	Sep. 30, 2012	Oct. 31, 2012
Document and Entity Information [Abstract]
Entity Registrant Name	SOLAR3D, INC.
Document Type	10-Q
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		136,640,260
Amendment Flag	false
Entity Central Index Key	0001172631
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Smaller Reporting Company
Entity Well-known Seasoned Issuer	No
Document Period End Date	Sep. 30, 2012
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q3

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4. STOCK OPTIONS AND WARRANTS (Tables)

9 Months Ended

Sep. 30, 2012

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]

The Company determined the fair market value of these options by using the Black Scholes option valuation model with the following significant assumptions:

Risk free interest rate		1.01	%		2.38	%
Stock volatility factor	213.03		%		229	%
Weighted average expected option life		7	years		7	years
Expected dividend yield	None			None

Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]

A summary of the Company’s stock option activity and related information follows:

	9/30/2012
			Weighted
	Number		average
	of		exercise
	Options		price
Outstanding, beginning of period		15,000,000	$	0.05
Granted		3,000,000		0.01
Exercised		-		-
Expired		-		-
Outstanding, end of period		18,000,000	$	0.04
Exercisable at the end of period		10,916,667	$	0.05
Weighted average fair value of    options granted during the period			$	0.01

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STATEMENTS OF OPERATIONS (Unaudited) (USD $)	3 Months Ended		9 Months Ended		128 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012
REVENUE					$ 1,127,406
COST OF SERVICES					496,177
GROSS PROFIT					631,229
OPERATING EXPENSES
Selling, general and administrative expenses	326,656	347,731	928,796	963,091	7,215,944
Research and development	28,120	49,627	126,877	97,960	1,735,980
Impairment loss					1,753,502
Depreciation and amortization expense	563	455	1,502	1,136	123,340
TOTAL OPERATING EXPENSES	355,339	397,813	1,057,175	1,062,187	10,828,766
LOSS FROM OPERATIONS	(355,339)	(397,813)	(1,057,175)	(1,062,187)	(10,197,537)
OTHER INCOME/(EXPENSES)
Interest income		21		21	10,321
Interest expense	(23,414)	(29)	(42,740)	(2,122)	(314,546)
Penalties	(56)		(112)		(296)
Gain on derivative liability	2,839		2,839		2,839
Loss on investment					(73,121)
Loss on settlement of debt			(33,750)	(45,988)	(647,038)
Loss on sale of asset					(963)
TOTAL OTHER INCOME/(EXPENSES)	(20,631)	(8)	(73,763)	(48,089)	(1,022,804)
NET LOSS	$ (375,970)	$ (397,821)	$ (1,130,938)	$ (1,110,276)	$ (11,220,341)
BASIC AND DILUTED LOSS PER SHARE (in Dollars per share)	$ 0.00	$ 0.00	$ (0.01)	$ (0.01)
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING BASIC AND DILUTED (in Shares)	130,333,909	112,026,112	124,416,096	107,302,392

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4. STOCK OPTIONS AND WARRANTS

9 Months Ended

Sep. 30, 2012

Stock Options And Warrants

4.      STOCK OPTIONS AND WARRANTS

As of September 30, 2012, the Board of Directors of the Company granted non-qualified stock options for 18,000,000 shares of common stock to its employees, directors and consultants, as agreements may provide. Notwithstanding any other provisions of the Option agreements, each Option expires on the date specified in the Option agreements, which date shall not be later than the fifth (5th) anniversary from the grant date of the options. The stock options vest at various times, and are exercisable for a period of seven years from the date of grant at  exercise prices ranging from $0.03 to $0.05 per share, the market value of the Company’s common stock on the date of grant. The Company determined the fair market value of these options by using the Black Scholes option valuation model with the following significant assumptions:

Risk free interest rate		1.01	%		2.38	%
Stock volatility factor	213.03		%		229	%
Weighted average expected option life		7	years		7	years
Expected dividend yield	None			None

A summary of the Company’s stock option activity and related information follows:

	9/30/2012
			Weighted
	Number		average
	of		exercise
	Options		price
Outstanding, beginning of period		15,000,000	$	0.05
Granted		3,000,000		0.01
Exercised		-		-
Expired		-		-
Outstanding, end of period		18,000,000	$	0.04
Exercisable at the end of period		10,916,667	$	0.05
Weighted average fair value of    options granted during the period			$	0.01

The stock-based compensation expense recognized in the statement of operations during the nine months ended September 30, 2012 was $376,893.

       WARRANTS

During the nine months ended September 30, 2012, the Company granted 16,817,144 stock purchase warrants associated with the issuance of 9,741,906 shares of common stock through a private placement at prices between $0.015 and $0.05. Also, the Company granted 9,194,286 common stock purchase warrants associated with the promissory notes in the amount of $114,500 as collateral.  As of September 30, 2012, the Company had a total of 40,244,770 common stock purchase warrants outstanding.

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3. CAPITAL STOCK AND WARRANTS

9 Months Ended

Sep. 30, 2012

Stockholders' Equity Note Disclosure [Text Block]

3.    CAPITAL STOCK AND WARRANTS

During the nine months ended September 30, 2012, the Company issued 5,333,334 shares of common stock, with 8,000,000 stock purchase warrants at a price of $0.015 per share for cash of $80,000; issued 2,025,000 shares of common stock at a price of $0.020 per share for cash of $40,500; issued 3,180,000 shares of common stock, with 6,360,000 stock purchase warrants  at a price of $0.025 per share for cash of $79,500; issued 2,150,000 shares of common stock at a price of $0.025 per share for cash of $53,750; issued 1,125,000 shares of common stock for services at a fair value of $78,750, recognizing a loss of $33,750 on settlement of debt; issued 300,000 shares of common stock at a price of $0.03 per share for cash of $9,000; issued 428,572 shares of common stock with 857,144 stock purchase warrants at a price of $0.035 per share for cash of $15,000; issued 25,000 shares of common stock at a price of $0.05 per share for cash of $1,250; issued 800,000 shares of common stock with 1,600,000 stock purchase warrants at a price of $0.05 per share for cash of $40,000; issued 135,000 shares of common stock at a price of $0.05 for a subscription payable of $6,750; issued 500,000 shares of common stock at a price of $0.025 for a subscription payable of $12,500; issued 750,000 shares of common stock for accounts payable at fair value of $30,000.

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3. CAPITAL STOCK AND WARRANTS (Detail) (USD $)	1 Months Ended	9 Months Ended		128 Months Ended
	Oct. 31, 2012	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Granted (in Shares)		16,817,144
Stock Issued During Period, Shares, New Issues		133,334
Gains (Losses) on Extinguishment of Debt (in Dollars)		$ (33,750)	$ (45,988)	$ (647,038)
Stock Issued During Period, Shares, Other	575,000	1,375,000
Stock Issued During Period, Value, Other (in Dollars)	26,000	108,750
Common stock issued for $0.015 per share [Member]
Stock Issued During Period, Shares, Issued for Cash		5,333,334
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Granted (in Shares)		8,000,000
Sale of Stock, Price Per Share (in Dollars per share)		$ 0.015		$ 0.015
Stock Issued During Period, Value, Issued for Cash (in Dollars)		80,000
Common stock issued for $0.020 per share [Member]
Sale of Stock, Price Per Share (in Dollars per share)		$ 0.020		$ 0.020
Stock Issued During Period, Value, Issued for Cash (in Dollars)		40,500
Stock Issued During Period, Shares, New Issues		2,025,000
Common stock issued for $0.025 per share [Member]
Stock Issued During Period, Shares, Issued for Cash		3,180,000
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Granted (in Shares)		6,360,000
Sale of Stock, Price Per Share (in Dollars per share)		$ 0.025		$ 0.025
Stock Issued During Period, Value, Issued for Cash (in Dollars)		79,500
Common stock issued at $0.025 per share [Member]
Stock Issued During Period, Shares, Issued for Cash		2,150,000
Common stock issued at $0.025 per share [Member]
Sale of Stock, Price Per Share (in Dollars per share)		$ 0.025		$ 0.025
Stock Issued During Period, Value, Issued for Cash (in Dollars)		53,750
Common stock issued at $0.03 [Member]
Sale of Stock, Price Per Share (in Dollars per share)		$ 78,750		$ 78,750
Stock Issued During Period, Value, Issued for Cash (in Dollars)		1,125,000
Gains (Losses) on Extinguishment of Debt (in Dollars)		(33,750)
Common stock issued for cash at $0.03 [Member]
Stock Issued During Period, Shares, Issued for Cash		300,000
Sale of Stock, Price Per Share (in Dollars per share)		$ 0.03		$ 0.03
Stock Issued During Period, Value, Issued for Cash (in Dollars)		9,000
Common stock issued for cash at $0.035 [Member]
Stock Issued During Period, Shares, Issued for Cash		428,572
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Granted (in Shares)		857,144
Sale of Stock, Price Per Share (in Dollars per share)		$ 0.035		$ 0.035
Stock Issued During Period, Value, Issued for Cash (in Dollars)		15,000
Common stock issued at $0.05 per share [Member]
Stock Issued During Period, Shares, Issued for Cash		25,000
Sale of Stock, Price Per Share (in Dollars per share)		$ 0.05		$ 0.05
Stock Issued During Period, Value, New Issues (in Dollars)		1,250
Common stock issued for cash for $0.05 [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Granted (in Shares)		1,600,000
Sale of Stock, Price Per Share (in Dollars per share)		$ 0.05		$ 0.05
Stock Issued During Period, Shares, New Issues		800,000
Stock Issued During Period, Value, New Issues (in Dollars)		40,000
Shares of common stock issued for cash at $0.05 per share [Member]
Sale of Stock, Price Per Share (in Dollars per share)		$ 0.05		$ 0.05
Stock Issued During Period, Shares, New Issues		135,000
Stock Issued During Period, Value, New Issues (in Dollars)		6,750
Common stock issued at $0.025 per share for cash [Member]
Sale of Stock, Price Per Share (in Dollars per share)		$ 0.025		$ 0.025
Stock Issued During Period, Shares, New Issues		500,000
Stock Issued During Period, Value, New Issues (in Dollars)		12,500
Common stock issued for accounts payable [Member]
Stock Issued During Period, Shares, Other		750,000
Stock Issued During Period, Value, Other (in Dollars)		$ 30,000

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6. CONVERTIBLE PROMISSORY NOTE (Tables)

9 Months Ended

Sep. 30, 2012

Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Table Text Block]

The significant assumptions used in the Black Scholes valuation are as follows:

Stock price on the valuation date	$	0.04
Conversion price for the note	$	0.0232
Years to maturity		1
Risk free rate		0.17	%
Expected volatility		110.16	%

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7. SUBSEQUENT EVENTS

9 Months Ended

Sep. 30, 2012

Subsequent Events [Text Block]

7.   SUBSEQUENT EVENTS

Management has evaluated subsequent events according to the requirements of ASC TOPIC 855 and has reported the following events:

On October 3, 2012, the Company issued 575,000 shares of common stock for settlement of debt for services at a fair value of $26,000.

On October 10, 2012, the Company issued 1,029,630 shares of common stock for settlement of debt for services at a fair value of $41,185.

Management concluded there were no other subsequent events or transactions that require recognition or disclosure in the financial statements.

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5. RELATED PARTY TRANSACTIONS

9 Months Ended

Sep. 30, 2012

Related Party Transactions Disclosure [Text Block]

5.   RELATED PARTY TRANSACTIONS

During the nine months ended September 30, 2012, the Company signed promissory notes for funds received in the amount of $114,500 for operating expenses from an existing shareholder. The notes bear interest at 5% per annum, and are due within one year. Also, as collateral the shareholder was assigned common stock purchase warrants to purchase 9,194,286 shares of common stock. The warrants were evaluated for purposes of classification under ASC Topic 480-10. “Distinguishing Liabilities from Equity” (pre-codification SFAS 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity). The warrants did not embody any of the conditions for liability classification under the ASC 480-10 context. The warrants were then evaluated under ASC 815, and were accounted for under the equity classification, and the proceeds were allocated based on the relative fair value of the instruments.

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6. CONVERTIBLE PROMISSORY NOTE

9 Months Ended

Sep. 30, 2012

Debt Disclosure [Text Block]

6.   CONVERTIBLE PROMISSORY NOTE

During the period ended September 30, 2012, the Company entered into a securities purchase agreement dated September 19, 2012, providing for the issuance of the 8% Convertible Promissory Note (“Note”) in the principal amount of $42,500 with a maturity date of June 21, 2013. The note bears interest at the rate of 8% per annum from the date of issuance. The note can be converted into common stock at a variable conversion price. The variable conversion price is 58% multiplied by the market price, representing a 42% discount rate. The market price is the average of the lowest three (3) trading prices for the common stock during the ten (10) trading days prior to the conversion date.

We evaluated the financing transactions in accordance with ASC Topic 815, Derivatives and Hedging, and determined that the conversion feature of the convertible promissory note was not afforded the exemption for conventional convertible instruments due to its variable conversion rate. The note has no explicit limit on the number of shares issuable so they did not meet the conditions set forth in current accounting standards for equity classification.  The Company elected to recognize the note under paragraph 815-15-25-4, whereby, there would be a separation into a host contract and derivative instrument. The Company elected to initially and subsequently measure the note in its entirety at fair value, with changes in fair value recognized in earnings. The Company recorded a derivative liability of $42,500 representing the imputed interest associated with the embedded derivative. The discount is amortized over the life of the note, and for the period ended September 30, 2012, the Company recognized $1,889 as interest expense. The derivative liability is adjusted periodically according to the stock price fluctuations. At the time of conversion, any remaining derivative liability will be charged to additional paid-in capital.  For purpose of determining the fair value of the note, the Company used the Black Scholes option valuation model. The significant assumptions used in the Black Scholes valuation are as follows:

Stock price on the valuation date	$	0.04
Conversion price for the note	$	0.0232
Years to maturity		1
Risk free rate		0.17	%
Expected volatility		110.16	%

The change in derivative liability recognized in the financial statements as of September 30, 2012 was $2,839.

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Accounting Policies, by Policy (Policies)

9 Months Ended

Sep. 30, 2012

Development Stage Enterprise General Disclosures [Text Block]

Development Stage Activities and Operations

The Company has been in its initial stages of formation and for the nine months ended September 30, 2012, had no revenues.  A development stage activity is one in which all efforts are devoted substantially to establishing a new business and even if planned principal operations have commenced, revenues are insignificant.

Cash and Cash Equivalents, Policy [Policy Text Block]

Cash and Cash Equivalent

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

Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block]

Stock-Based Compensation

Share based payments applies to transactions in which an entity exchanges its equity instruments for goods or services, and also applies to liabilities an entity may incur for goods or services that are to follow a fair value of those equity instruments. We will be required to follow a fair value approach using an option-pricing model, such as the Black-Scholes option valuation model, at the date of a stock option grant. The deferred compensation calculated under the fair value method would then be amortized over the respective vesting period of the stock option. The adoption of share based compensation has no material impact on our results of operations.

Earnings Per Share, Policy [Policy Text Block]

Loss per Share Calculations

Loss per Share dictates the calculation of basic earnings per share and diluted earnings per share. Basic earnings per share are computed by dividing income available to common shareholders by the weighted-average number of common shares available. Diluted earnings per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. No shares for employee options or warrants were used in the calculation of the loss per share as they were all anti-dilutive. The Company’s diluted loss per share is the same as the basic loss per share for the nine months ended September 30, 2012 and 2011 as the inclusion of any potential shares would have had an anti-dilutive effect due to the Company generating a loss.

Revenue Recognition, Policy [Policy Text Block]

Revenue Recognition

We recognize revenue upon delivery, provided that evidence of an arrangement exists, title, and risk of loss have passed to the customer, fees are fixed or determinable, and collection of the related receivable is reasonably assured.  We record revenue net of estimated product returns, which is based upon our return policy, sales agreements, management estimates of potential future product returns related to current period revenue, current economic trends, changes in customer composition and historical experience.  We accrue for warranty costs, sales returns, and other allowances based on our experience, which tells us we have less than $25,000 per year in warranty returns and allowances. Generally, we extend credit to our customers and do not require collateral.  We perform ongoing credit evaluations of our customers and historic credit losses have been within our expectations.  We do not ship a product until we have either a purchase agreement or rental agreement signed by the customer with a payment arrangement.  This is a critical policy, because we want our accountings to show only sales which are “final” with a payment arrangement.  We do not make consignment sales or inventory sales subject to a “buy back” or return arrangement from customers.  Accordingly, original equipment manufacturers do not presently have a right to return unsold products to us.

We also grant exclusive licenses for the use of the technology required to operate our products.  Software license revenue is recognized over the contract period, for those contracts that either do not contain a service component or that have services which are not essential to the functionality of any other element of the contract.

Fair Value of Financial Instruments, Policy [Policy Text Block]

Fair Value of Financial Instruments

Disclosures about fair value of financial instruments, requires disclosure of the fair value information, whether or not recognized in the balance sheet, where it is practicable to estimate that value. As of September 30, 2012, the amounts reported for cash, accrued interest and other expenses, and notes payable approximate the fair value because of their short maturities.

We adopted ASC Topic 820 (originally issued as SFAS 157, “Fair Value Measurements”) as of January 1, 2008 for financial instruments measured as fair value on a recurring basis. ASC Topic 820 defines fair value, established a framework for measuring fair value in accordance with accounting principles generally accepted in the United States and expands disclosures about fair value measurements.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 established a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1measurements) and the lowest priority to unobservable inputs (level 3 measurements). These tiers include:

·   Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets;

·   Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and

·   Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

We measure certain financial instruments at fair value on a recurring basis.

New Accounting Pronouncements, Policy [Policy Text Block]

Recently adopted pronouncements

Management reviewed accounting pronouncements issued during the nine months ended September 30, 2012, and adopted  the following:

The Company adopted ASC 815 “Accounting for Derivative Instruments and Hedging Activities”. This pronouncement addresses the accounting for derivative instruments including certain derivative instruments embedded in other contracts, and hedging activities. Derivative instruments that meet the definition of assets and liabilities should be reported in the financial statements at fair value, and any gain or loss should be recognized in current earnings. The adoption of this pronouncement did not have a material effect on the financial statements of the Company.

The Company adopted ASC 835 "Accounting for Interest". This pronouncement addresses the appropriate accounting when the face amount of a note does not reasonably represent the present value of the consideration given or received in the exchange. A note issued solely for cash equal to its face amount is presumed to earn the stated rate of interest, however, in some cases the parties may also exchange unstated or stated rights or privileges, which are given accounting recognition by establishing a note discount or premium account. In such instances, the effective interest rate differs from the stated rate.  The note discount shall be amortized as interest expense over the life of the note. The Company recognized interest expense on the promissory notes in prior periods of $99,500, before the adoption of the pronouncement. During the current period the Company reclassified $61,514 of interest expense from earnings and recognized a debt discount netted against the face amount of the notes. The adoption of this pronouncement had a material effect on the financial statements of the Company.

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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Detail) (USD $)	9 Months Ended
	Sep. 30, 2012	Dec. 31, 2011
Interest Expense, Debt (in Dollars)	$ 99,500
Debt Instrument, Unamortized Discount (in Dollars)	40,611	0
Reclassification as debt discount [Member]
Debt Instrument, Unamortized Discount (in Dollars)	$ 61,514

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4. STOCK OPTIONS AND WARRANTS (Detail) - Schedule of option activity (USD $)	9 Months Ended
	Sep. 30, 2012
Number of options [Member]
Number of options outstanding (in Shares)	15,000,000
Exercisable at the end of period (in Shares)	10,916,667
Granted (in Shares)	3,000,000
Exercised (in Shares)	0
Expired (in Shares)	0
Number of options outstanding (in Shares)	18,000,000
Weighted average exercise price [Member]
Weighted average exercise price of options outstanding	0.05
Exercisable at the end of period	0.05
Weighted average fair value of options granted during the period	0.01
Granted	0.01
Exercised	0
Expired	0
Weighted average exercise price of options outstanding	0.04

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STATEMENT OF SHAREHOLDERS' EQUITY (DEFICIT) (USD $)	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Total
Balance at Dec. 31, 2011	$ 118,283	$ 9,974,861	$ (10,089,403)	$ 3,741
Balance (in Shares) at Dec. 31, 2011	118,283,724			118,283,724
Issuance of common stock for cash and subscription payable (price per share between $0.015 and $0.05) (unaudited)	14,877	316,623		331,500
Issuance of common stock for cash and subscription payable (price per share between $0.015 and $0.05) (unaudited) (in Shares)	14,876,906			133,334
Issuance of common stock at fair value for accounts payable & services (unaudited)	1,875	106,875		108,750
Issuance of common stock at fair value for accounts payable & services (unaudited) (in Shares)	1,875,000			1,375,000
Debt discount on promissory notes (unaudited)		91,580		91,580
Stock compensation cost (unaudited)		376,893		376,893
Net loss for the nine months ended September 30, 2012 (unaudited)			(1,130,938)	(1,130,938)
Balance at Sep. 30, 2012	$ 135,035	$ 10,866,832	$ (11,220,341)	$ (218,474)
Balance (in Shares) at Sep. 30, 2012	135,035,630			135,035,630

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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Sep. 30, 2012

Significant Accounting Policies [Text Block]

2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

This summary of significant accounting policies of Solar3D, Inc. is presented to assist in understanding the Company’s financial statements. The financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the financial statements.

        Development Stage Activities and Operations

The Company has been in its initial stages of formation and for the nine months ended September 30, 2012, had no revenues.  A development stage activity is one in which all efforts are devoted substantially to establishing a new business and even if planned principal operations have commenced, revenues are insignificant.

Cash and Cash Equivalent

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

Stock-Based Compensation

Share based payments applies to transactions in which an entity exchanges its equity instruments for goods or services, and also applies to liabilities an entity may incur for goods or services that are to follow a fair value of those equity instruments. We will be required to follow a fair value approach using an option-pricing model, such as the Black-Scholes option valuation model, at the date of a stock option grant. The deferred compensation calculated under the fair value method would then be amortized over the respective vesting period of the stock option. The adoption of share based compensation has no material impact on our results of operations.

        Loss per Share Calculations

Loss per Share dictates the calculation of basic earnings per share and diluted earnings per share. Basic earnings per share are computed by dividing income available to common shareholders by the weighted-average number of common shares available. Diluted earnings per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. No shares for employee options or warrants were used in the calculation of the loss per share as they were all anti-dilutive. The Company’s diluted loss per share is the same as the basic loss per share for the nine months ended September 30, 2012 and 2011 as the inclusion of any potential shares would have had an anti-dilutive effect due to the Company generating a loss.

Revenue Recognition

We recognize revenue upon delivery, provided that evidence of an arrangement exists, title, and risk of loss have passed to the customer, fees are fixed or determinable, and collection of the related receivable is reasonably assured.  We record revenue net of estimated product returns, which is based upon our return policy, sales agreements, management estimates of potential future product returns related to current period revenue, current economic trends, changes in customer composition and historical experience.  We accrue for warranty costs, sales returns, and other allowances based on our experience, which tells us we have less than $25,000 per year in warranty returns and allowances. Generally, we extend credit to our customers and do not require collateral.  We perform ongoing credit evaluations of our customers and historic credit losses have been within our expectations.  We do not ship a product until we have either a purchase agreement or rental agreement signed by the customer with a payment arrangement.  This is a critical policy, because we want our accountings to show only sales which are “final” with a payment arrangement.  We do not make consignment sales or inventory sales subject to a “buy back” or return arrangement from customers.  Accordingly, original equipment manufacturers do not presently have a right to return unsold products to us.

We also grant exclusive licenses for the use of the technology required to operate our products.  Software license revenue is recognized over the contract period, for those contracts that either do not contain a service component or that have services which are not essential to the functionality of any other element of the contract.

Fair Value of Financial Instruments

Disclosures about fair value of financial instruments, requires disclosure of the fair value information, whether or not recognized in the balance sheet, where it is practicable to estimate that value. As of September 30, 2012, the amounts reported for cash, accrued interest and other expenses, and notes payable approximate the fair value because of their short maturities.

We adopted ASC Topic 820 (originally issued as SFAS 157, “Fair Value Measurements”) as of January 1, 2008 for financial instruments measured as fair value on a recurring basis. ASC Topic 820 defines fair value, established a framework for measuring fair value in accordance with accounting principles generally accepted in the United States and expands disclosures about fair value measurements.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 established a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1measurements) and the lowest priority to unobservable inputs (level 3 measurements). These tiers include:

·   Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets;

·   Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and

·   Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

We measure certain financial instruments at fair value on a recurring basis. Assets and liabilities measured at fair value on a recurring basis are as follows at September 30, 2012:

	Total		(Level 1)		(Level 2)		(Level 3)
Assets	$	-	$	-	$	-	$	-
Total assets measured at fair value	$	-	$	-	$	-	$	-
Liabilities
Derivative liability		39,661		-		-		39,661
Convertible promissory note		1,889		-		-		1,889
Promissory notes, net of discount		60,906		-		-		60,906
Total liabilities measured at fair value	$	102,456	$	-	$	-	$	102,456

Recently adopted pronouncements

Management reviewed accounting pronouncements issued during the nine months ended September 30, 2012, and adopted  the following:

The Company adopted ASC 815 “Accounting for Derivative Instruments and Hedging Activities”. This pronouncement addresses the accounting for derivative instruments including certain derivative instruments embedded in other contracts, and hedging activities. Derivative instruments that meet the definition of assets and liabilities should be reported in the financial statements at fair value, and any gain or loss should be recognized in current earnings. The adoption of this pronouncement did not have a material effect on the financial statements of the Company.

The Company adopted ASC 835 "Accounting for Interest". This pronouncement addresses the appropriate accounting when the face amount of a note does not reasonably represent the present value of the consideration given or received in the exchange. A note issued solely for cash equal to its face amount is presumed to earn the stated rate of interest, however, in some cases the parties may also exchange unstated or stated rights or privileges, which are given accounting recognition by establishing a note discount or premium account. In such instances, the effective interest rate differs from the stated rate.  The note discount shall be amortized as interest expense over the life of the note. The Company recognized interest expense on the promissory notes in prior periods of $99,500, before the adoption of the pronouncement. During the current period the Company reclassified $61,514 of interest expense from earnings and recognized a debt discount netted against the face amount of the notes. The adoption of this pronouncement had a material effect on the financial statements of the Company.

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5. RELATED PARTY TRANSACTIONS (Detail) (USD $)	9 Months Ended
	Sep. 30, 2012
Debt Instrument, Face Amount (in Dollars)	$ 114,500
Debt Instrument, Interest Rate, Stated Percentage	5.00%
Debt Instrument, Maturity Date, Description	due within one year
Debt Instrument, Convertible, Number of Equity Instruments	9,194,286

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SUPPLEMENTAL DISCLOSURES OF NON-CASH TRANSACTIONS (Detail) (USD $)	1 Months Ended	9 Months Ended
	Oct. 31, 2012	Sep. 30, 2012
Notes, Loans and Financing Receivable, Gross, Current (in Dollars)		$ 100,000
Gain (Loss) on Sale of Business (in Dollars)		$ (560,036)
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Exercised		2,000,000
Stock Issued During Period, Shares, Other	575,000	1,375,000
Stock Issued During Period, Shares, New Issues		133,334
Stock Issued During Period, Shares, Conversion of Convertible Securities		1,839,500