UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q/A
(Amendment No. 1)
(Mark One)
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2013
¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______________ to _______________.
Commission file number: 000-53443
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HPEV, INC. |
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(Exact name of registrant as specified in its charter) |
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Nevada |
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75-3076597 |
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(State or other jurisdiction of incorporation or organization) |
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(I.R.S. Employer Identification No.) |
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8875 Hidden River Parkway, Suite 300 Tampa, FL |
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33637 |
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(Address of principal executive offices) |
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(Zip Code) |
Registrant’s telephone number, including area code: (813) 975-7467
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 ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer |
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Accelerated filer |
¨ |
| Non-accelerated filer | ¨ | Smaller reporting company | x |
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(Do not check if a smaller reporting company) |
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x
As of March 20, 2015, there were 61,728,102 shares of common stock, $0.001 par value, issued and outstanding.
EXPLANATORY NOTE
We are filing this Amendment No. 1 on Form 10-Q/A to amend and restate in their entirety Part I of our Quarterly Report on Form 10-Q for the quarter ended September 30, 2013, as originally filed with the Securities and Exchange Commission on November 19, 2013. This Form 10-Q/A includes Exhibits 31.1, 31.2, 32.1 and 32.2, new certifications by our principal executive officer and principal financial officer, as required by Rule 12b-15.
During the closing process for our December 31, 2013 Annual Report on Form 10-K, accounting errors were discovered that required restatement of amounts previously reported, related to under-accrued consulting fees, warrants issued for services, and shares issued for cash. Additionally, during the analysis of the restatement for the three and nine months ended September 30, 2013, we identified an error in the statement of operations for the nine months ended September 30, 2012, that were presented for comparative purposes in our September 30, 2013 Form 10-Q, related to the return of previously issued shares resulting in the reversal of expense. As a result of correcting these errors, our net loss decreased by $105,423 for the three months ended September 30, 2013, increased by $247,846 for the nine months ended September 30, 2013, and decreased $2,650,000 for the nine months ended September 30, 2012.
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2
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HPEV, INC.
Table of Contents
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Part I – FINANCIAL INFORMATION |
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Item 1. |
Financial Statements |
5 |
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Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
16 |
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Item 3. |
Quantitative and Qualitative Disclosures About Market Risk |
19 |
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Item 4. |
Controls and Procedures |
19 |
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Part II – OTHER INFORMATION |
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Item 6. |
Exhibits |
21 |
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3
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CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION
This Quarterly Report on Form 10-Q/A contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements discuss matters that are not historical facts. Because they discuss future events or conditions, forward-looking statements may include words such as “anticipate,” “believe,” “estimate,” “intend,” “could,” “should,” “would,” “may,” “seek,” “plan,” “might,” “will,” “expect,” “anticipate,” “predict,” “project,” “forecast,” “potential,” “continue” negatives thereof or similar expressions. Forward-looking statements speak only as of the date they are made, are based on various underlying assumptions and current expectations about the future and are not guarantees. Such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, level of activity, performance or achievement to be materially different from the results of operations or plans expressed or implied by such forward-looking statements.
We cannot predict all of the risks and uncertainties. Accordingly, such information should not be regarded as representations that the results or conditions described in such statements or that our objectives and plans will be achieved and we do not assume any responsibility for the accuracy or completeness of any of these forward-looking statements. These forward-looking statements are found at various places throughout this Quarterly Report on Form 10-Q/A and include information concerning possible or assumed future results of our operations, including statements about potential acquisition or merger targets; business strategies; future cash flows; financing plans; plans and objectives of management; any other statements regarding future acquisitions, future cash needs, future operations, business plans and future financial results, and any other statements that are not historical facts.
These forward-looking statements represent our intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors. Many of those factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of the Quarterly Report on Form 10-Q/A. All subsequent written and oral forward-looking statements concerning other matters addressed in this Quarterly Report on Form 10-Q/A and attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this Quarterly Report on Form 10-Q/A.
Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise.
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4
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PART I. Financial Information
Item 1. Financial Statements
HPEV, Inc.
Condensed Consolidated Balance Sheets
| September 30, 2013 (Restated) (Unaudited) | December 31, 2012 (Previously Restated) | |||||||
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ASSETS |
||||||||
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Current assets: |
||||||||
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Cash |
$ |
889,420 |
$ |
194,721 |
||||
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Prepaid finance costs |
-- |
373,679 |
||||||
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Total current assets |
889,420 |
568,400 |
||||||
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Intangibles |
98,697 |
73,582 |
||||||
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Total assets |
$ |
988,117 |
$ |
641,982 |
||||
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
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Current liabilities: |
||||||||
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Accounts payable |
$ |
210,237 |
$ |
177,280 |
||||
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Accrued liabilities – related parties |
208,250 |
52,305 |
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Note payable – related party |
22,910 |
34,110 |
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Total current liabilities |
441,397 |
263,695 |
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Commitments and contingencies (Note 3) |
-- |
-- |
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Stockholders’ equity: |
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Preferred stock, $.001 par value; 15,000,000 shares authorized; 199 and 200 shares issued and outstanding at September 30, 2013 and December 31, 2012, respectively |
-- |
-- |
||||||
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Common stock, $.001 par value; 100,000,000 shares authorized; 47,695,373 and 42,970,441 shares issued and outstanding at September 30, 2013 and December 31, 2012, respectively |
47,696 |
42,970 |
||||||
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Additional paid-in capital |
8,198,592 |
6,116,420 |
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Common stock held in escrow |
8,441 |
39,469 |
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Accumulated deficit |
(7,708,009 |
) |
(5,820,572 |
) |
||||
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Total stockholders’ equity |
546,720 |
378,287 |
||||||
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Total liabilities and stockholders’ equity |
$ |
988,117 |
$ |
641,982 |
||||
See accompanying notes to condensed consolidated financial statements.
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5
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HPEV, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
| 2013 (Restated) |
2012 (Restated) |
2013 (Restated) |
2012 (Restated) |
|||||||||||||
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Revenues |
$ |
-- |
$ |
-- |
$ |
-- |
$ |
-- |
||||||||
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Cost of revenues |
-- |
-- |
-- |
-- |
||||||||||||
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Gross profit |
-- |
-- |
-- |
-- |
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Operating expenses |
||||||||||||||||
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Consulting |
30,615 |
491,923 |
1,052,932 |
1,398,002 |
||||||||||||
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Professional fees |
142,635 |
139,450 |
229,004 |
362,616 |
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Research and development |
212,389 |
4,744 |
302,089 |
453,875 |
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General and administrative |
203,965 |
4,620 |
322,887 |
84,053 |
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Director stock compensation |
-- |
-- |
-- |
(2,650,000 |
) |
|||||||||||
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Total operating expense (gain) |
589,604 |
640,737 |
1,906,912 |
(351,454 |
) |
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Operating income (loss) |
(589,604 |
) |
(640,737 |
) |
(1,906,912 |
) |
351,454 |
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Other income and (expense) |
||||||||||||||||
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Interest expense, net |
-- |
(70,685 |
) |
-- |
(73,613 |
) |
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Finance costs |
-- |
(315,773 |
) |
-- |
(513,599 |
) |
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Gain on settlement of debt |
-- |
-- |
19,475 |
-- |
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Net loss |
$ |
(589,604 |
) |
$ |
(1,027,195 |
) |
$ |
(1,887,437 |
) |
$ |
(235,758 |
) |
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Net loss per common share: |
||||||||||||||||
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Basic and diluted |
$ |
(0.01 |
) |
$ |
(0.02 |
) |
$ |
(0.04 |
) |
$ |
(0.00 |
) |
||||
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Weighted average common shares outstanding: |
||||||||||||||||
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Basic and diluted |
46,181,529 |
47,646,411 |
45,545,420 |
47,864,741 |
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See accompanying notes to condensed consolidated financial statements.
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6
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HPEV, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
| Nine months ended September 30, | ||||||||
| 2013 (Restated) |
2012 (Restated) |
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Operating Activities: |
||||||||
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Net loss |
$ |
(1,887,437 |
) |
$ |
(235,758 |
) |
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Adjustments to reconcile net loss to net cash used in operating activities: |
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Stock issued for services |
373,679 |
1,201,520 |
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Warrants issued for services |
349,370 |
-- |
||||||
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Warrants issued for interest |
-- |
209,258 |
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Warrants issued for loan penalties |
-- |
68,233 |
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Gain on settlement of debt |
(19,475 |
) |
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Director stock compensation |
-- |
(2,650,000 |
) |
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Amortization of financing costs |
-- |
513,599 |
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Changes in operating assets and liabilities: |
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Accounts payable |
58,932 |
272,627 |
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Accrued interest |
-- |
5,380 |
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Accrued liabilities – related parties |
155,945 |
66,500 |
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Net cash used in operating activities |
(968,986 |
) |
(548,641 |
) |
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Investing Activities: |
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Intangible assets |
(25,115 |
) |
(25,193 |
) |
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Net cash used in investing activities |
(25,115 |
) |
(25,193 |
) |
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Financing Activities: |
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Proceeds from sale of common stock |
1,700,000 |
5,000 |
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Proceeds from notes payable |
-- |
436,222 |
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Proceeds from note payable – related party |
900 |
55,470 |
||||||
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Payments on note payable – related party |
(12,100 |
) |
(1,200 |
) |
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Net cash provided by financing activities |
1,688,800 |
495,492 |
||||||
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Net increase (decrease) in cash |
694,699 |
(78,342 |
) |
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Cash, beginning of period |
194,721 |
78,361 |
||||||
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Cash, end of period |
$ |
889,420 |
$ |
19 |
||||
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Cash paid for: |
||||||||
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Interest |
$ |
-- |
$ |
-- |
||||
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Income taxes |
$ |
-- |
$ |
-- |
||||
See accompanying notes to condensed consolidated financial statements.
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7
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HPEV, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Note 1 – Description of Business and Summary of Significant Accounting Policies
Description of Business
HPEV, Inc., (we, us, our, the “Company” or “HPEV”) was incorporated in the State of Nevada in July 2002. We were formerly known as Bibb Corporation and Z3 Enterprises.
We have developed and intend to commercialize dispersion technologies in various product platforms, and have developed and intend to commercialize an electric load assist technology around which we have designed a vehicle retrofit system. We believe that our proprietary technologies, including our patent portfolio and trade secrets, can help increase the efficiency and positively affect manufacturing cost structure in several large industries beginning with motor/generator and fleet vehicles. The markets for products utilizing our technology include consumer, industrial and military markets, both in the U.S. and worldwide.
Our technologies are divided into three distinct but complementary categories: heat dispersion technology, mobile electric power and electric load assist. As of September 30, 2013, we have 5 patents and 5 patent applications pending in the area of composite heat structures, motors, and related structures, heat pipe architecture, applications (commonly referred to as “thermal” or “heat dispersion technology”) and a parallel vehicle power platform. We intend to commercialize our patents by licensing our thermal technologies and applications to electric motor, pump and vehicle component manufacturers; by licensing or selling a mobile electric power system powered by our proprietary gearing system to commercial vehicle and fleet owners; and by licensing a plug-in hybrid conversion system for heavy duty trucks, buses and tractor trailers to fleet owners and service centers.
Basis of Presentation
The accompanying condensed consolidated balance sheet as of December 31, 2012, has been derived from audited financial statements. The accompanying unaudited interim condensed consolidated financial statements have been prepared on the same basis as the annual audited financial statements and in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial statements. In the opinion of management, such unaudited information includes all adjustments (consisting only of normal recurring accruals) necessary for a fair presentation of this interim information. All intercompany transactions have been eliminated in consolidation. Operating results and cash flows for interim periods are not necessarily indicative of results that can be expected for the entire year. The information included in this report should be read in conjunction with our audited financial statements and notes thereto included in our Annual Report on Form 10-K/A for the year ended December 31, 2012.
The condensed consolidated financial statements as of and for the three and nine months ended September 30, 2013 and 2012, have been restated (see Note 8).
Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications had no impact on net earnings or financial position.
Going Concern
The accompanying condensed consolidated financial statements have been prepared assuming we will continue as a going concern. We have incurred net losses since inception and have not fully commenced operations, raising substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern is dependent on our ability to generate revenue, achieve profitable operations and repay our obligations when they come due. We have entered into an agreement whereby we may sell up to $10,000,000 of our common stock to Lincoln Park Capital Fund LLC, subject to certain limitations, over a 36-month period. These condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty. As of the filing date of this Quarterly Report on Form 10-Q/A, management believes that it has adequate funding to ensure completion of the initial phases of our business plan: to license its thermal technologies and applications, including submersible dry-pit applications; to license and sell mobile generation retrofit kits (our Ultimate Power Truck business) driven by our proprietary gearing system; and to license a plug-in hybrid conversion system for heavy duty trucks, tractor trailers and buses. There can be no assurance, however, that we will be successful in accomplishing these objectives.
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8
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Recently Issued Accounting Pronouncements
In June, 2014, the FASB issued ASU No. 2014-10, Development Stage Entities (Topic 915) – Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation, which eliminates the concept of a development stage entity (DSE) its entirety from current accounting guidance. We have elected early adoption of this standard, which eliminates the designation of DSEs and the requirement to disclose results of operations and cash flows since inception.
We have evaluated the other recent accounting pronouncements through ASU 2015-02 and believe that none of them will have a material effect on our financial statements.
Note 2 – Debt
As of December 31, 2011, we had interest-free debt of $911,894 with Phoenix Productions and Entertainment Group (“PPEG”).
In March 2012, we borrowed $250,000 under a 3% note with Action Media Group, LLC (“Action Media”).
In April, May, June and July of 2012, we borrowed a total of $186,222 from Spirit Bear Limited (“Spirit Bear”), payable within 180 days from each date of funding. We also granted 665,374 common stock warrants to Spirit Bear with an exercise price of $0.35 per share. We estimated the value of the warrants using the Black-Scholes option pricing model with the following assumptions: volatility of 250%, risk-free interest rate of 0.33%, expected life of two years and no dividend yield. We recorded the estimated value of the warrants of $622,253 as prepaid financing costs and recorded the amortization of the expense as financing costs.
In December 2012, we negotiated a debt settlement agreement with PPEG, Action Media and Spirit Bear (“Debt Settlement Agreement”). Under the terms of the debt settlement agreement, PPEG and Action Media forgave the debt of $911,894 and $250,000, respectively. We entered into an agreement with Spirit Bear pursuant to which we sold 200 shares of our Series A Convertible Preferred Stock and three separate tranches of warrants to 2,000,000 shares of our common stock, for a total of 6,000,000 warrants. The exercise prices the warrants within each tranche were $0.35, $0.50 and $0.75 per share. In consideration, we received $313,777 in cash and $186,222 for the settlement of the debt with Spirit Bear.
Note 3 – Commitments and Contingencies
In December, 2012, pursuant to the Debt Settlement Agreement, PPEG and Action Media were to return to escrow a total of 4,676,000 shares of our common stock. 3,676,000 of these shares were returned and cancelled on January 14, 2013, following our filing a registration statement with the SEC on January 11, 2013. The remaining 1,000,000 shares will be purchased by the Company or a nominee of the Company at $0.40 per share (or $400,000) at the rate of $10,000 per month commencing within 90 days of the Company achieving $1,000,000 in gross revenues for products or services from business operations. PPEG and Action Media will divide the $400,000 on a pro rata basis, based on each company’s respective amount of debt forgiven. The historical cost of the shares held in escrow are reflected in equity on the balance sheets as common stock held in escrow.
We are a party to various legal proceedings with Spirit Bear, which we are defending vigorously. At this time we cannot predict the outcome or estimate the cost to us, if any. Accordingly, we have not recorded any expense or liability associated with these proceedings. If these proceedings are not resolved in our favor, in future periods there may be an adverse impact to our results of operations and financial position.
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9
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Note 4 – Equity
Common Stock
In April 2012, we amended our articles of incorporation to increase our authorized shares of common stock to 100,000,000.
In April 2012, a director of the Company returned 5,000,000 shares that had been issued to him by a shareholder as compensation, resulting in a reversal of expense of $2,650,000.
Note 5 – Equity-based compensation
Amounts recognized in the condensed consolidated statements of operations related to equity-based compensation are as follows:
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||
|
|
||||||||||||||||
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Total expense charged against income |
$ |
-- |
$ |
217,612 |
$ |
723,049 |
$ |
1,992,610 |
||||||||
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Impact on net loss per common share: |
||||||||||||||||
|
Basic and diluted |
$ |
-- |
$ |
(0.00 |
) |
$ |
(0.02 |
) |
$ |
(0.04 |
) |
|||||
Common stock
We may issue our common stock to non-employees in exchange for services, financing costs and interest.
Common stock warrants - Overview
We routinely issue warrants for our common stock to non-employees in exchange for services, as part of the sale of our common stock, or to settle long-term debt, including penalties and interest. Historically, we have issued warrants that are fully-vested at the date of grant.
Common stock warrants -- Fully-vested
The following summarizes the activity for warrants that were fully-vested upon issuance:
| Number of Warrants | Weighted-average Exercise Price | Weighted-average Remaining Life (Years) | Aggregate Intrinsic Value | |||||||||||||
|
Outstanding, December 31, 2012 |
8,395,004 |
$ |
0.47 |
2.4 |
$ |
238,044 |
||||||||||
|
Granted |
4,685,019 |
0.69 |
23,333 |
|||||||||||||
|
Exercised |
(100,000 |
) |
0.28 |
|||||||||||||
|
Outstanding, September 30, 2013 |
12,980,023 |
0.50 |
2.4 |
249,877 |
||||||||||||
|
Exercisable, September 30, 2013 |
12,980,023 |
0.50 |
2.4 |
249,877 |
||||||||||||
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10
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The fair value of each warrant is estimated on the date of grant using the Black-Scholes option pricing model (“Black-Scholes”). We use historical data to estimate the expected price volatility, the expected life and the expected forfeiture rate. The risk-free interest rate is based on the United States Treasury yield curve in effect at the time of the grant for the estimated life of the warrant. The following summarizes the Black-Scholes assumptions used for fully-vested warrant grants that were expensed:
|
Nine months ended September 30, |
|||
|
2013 |
|
2012 |
|
|
Volatility |
325 – 360 % |
|
245 – 250 % |
|
Risk-free interest rate |
0.2 – 1.2 % |
|
0.3 – 0.6 % |
|
Expected life (years) |
2.5 – 5.0 |
|
2.0 |
|
Dividend yield |
-- |
|
-- |
Non-employee stock options – Fully-vested
In 2011, we granted 200,000 stock options to one of our attorneys for services provided. These options were exercised in February 2013 on a cashless basis, and 90,000 shares of common stock were issued.
Employee stock options – Market-based
We granted certain options that vest upon the achievement of certain stock prices for 20 days, as follows:
|
Market Price |
Number of Options |
|||||
| $ | 2.00 | 1,000,000 | ||||
| 3.00 | 1,000,000 | |||||
| 4.00 | 1,000,000 | |||||
| 4.50 | 1,000,000 | |||||
| 5.00 | 1,000,000 | |||||
| 5,000,000 | ||||||
The following is a summary of market-based stock option activity:
| Number of Shares | Weighted-average Exercise Price per Share | Weighted-average Remaining Contractual Term | Aggregate Intrinsic Value | ||||||||||||
|
Outstanding, December 31, 2012 |
5,000,000 |
$ |
3.70 |
No expiration |
$ |
-- |
|||||||||
|
Stock options granted |
-- |
||||||||||||||
|
Outstanding, September 30, 2013 |
5,000,000 |
3.70 |
No expiration |
-- |
|||||||||||
|
Exercisable, September 30, 2013 |
-- |
-- |
|||||||||||||
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11
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Note 6 – Net Loss per Share
Basic net loss per share is computed by dividing net loss by the weighted-average number of common shares outstanding during the reporting period. Diluted net loss per share is computed similarly to basic loss per share, except that it includes the potential dilution that could occur if dilutive securities are exercised.
The following table presents a reconciliation of the denominators used in the computation of net loss per share – basic and diluted:
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||
|
Net loss available for stockholders |
$ |
(589,604 |
) |
$ |
(1,027,195 |
) |
$ |
(1,887,437 |
) |
$ |
(235,758 |
) |
||||
|
Weighted average outstanding shares of common stock |
46,181,529 |
47,646,411 |
45,545,420 |
47,864,741 |
||||||||||||
|
Dilutive effect of stock options and warrants |
-- |
-- |
-- |
-- |
||||||||||||
|
Common stock and equivalents |
46,181,529 |
47,646,411 |
45,545,420 |
47,864,741 |
||||||||||||
|
Net loss per share – Basic and diluted |
$ |
(0.01 |
) |
$ |
(0.02 |
) |
$ |
(0.04 |
) |
$ |
(0.00 |
) |
||||
Outstanding stock options and common stock warrants are considered anti-dilutive because we are in a net loss position.
Note 7 – Subsequent Events
In February 2014, we entered into an agreement with Lincoln Park Capital Fund, LLC (“Lincoln Park”), pursuant to which we have the right to sell to Lincoln Park up to $10,000,000 in shares of our common stock, subject to certain limitations, from time to time over a 36-month period commencing on the date that a registration statement is declared effective by the SEC.
In April 2014, we formed Ultimate Power Truck, LLC (“UPT”), of which we own 95% and a shareholder of HPEV owns 5%. UPT was formed to support and sell our mobile electric power system platform.
Note 8 – Restatements
Three and nine months ended September 30, 2013
During the closing process for our December 31, 2013 Annual Report on Form 10-K, accounting errors were discovered that required restatement of amounts previously reported, related to under-accrued consulting fees, warrants issued for services, and shares issued for cash. It was also discovered that 200,000 warrants to be issued to Monarch Bay per the May 28, 2013 agreement had been treated as fully vested. It was subsequently determined that Monarch Bay had not met its contractual obligations and the warrants had not vested. This caused the previously issued financial statements to over-report consulting expense and additional paid in capital. These errors were corrected and properly reflected in our Annual Report on Form 10-K/A as of and for the year ended December 31, 2013. Accordingly, there is no restatement of the December 31, 2013 condensed consolidated balance sheet. We have also reclassified certain amounts to conform to our current period presentation. The following tables reflect the impact of these corrections on our September 30, 2013, statements of operations and cash flows.
|
12
|
| Condensed Consolidated Statements of Operations | ||||||||||||||||||||||||
| Three months ended September 30, 2013 | Nine months ended September 30, 2013 | |||||||||||||||||||||||
| Originally Stated | Adjustments (a) | Restated | Originally Stated | Adjustments (b) | Restated | |||||||||||||||||||
|
Gross profit |
$ |
-- |
$ |
-- |
$ |
-- |
$ |
-- |
$ |
-- |
$ |
-- |
||||||||||||
|
Operating expenses |
||||||||||||||||||||||||
|
Consulting |
220,493 |
(189,878 |
) |
30,615 |
805,086 |
247,846 |
1,052,932 |
|||||||||||||||||
|
Professional fees |
123,160 |
19,475 |
142,635 |
209,529 |
19,475 |
229,004 |
||||||||||||||||||
|
Research and development |
212,389 |
-- |
212,389 |
302,089 |
-- |
302,089 |
||||||||||||||||||
|
General and administrative |
138,985 |
64,980 |
203,965 |
322,887 |
-- |
322,887 |
||||||||||||||||||
|
Total operating expenses |
695,027 |
(105,423 |
) |
589,604 |
1,639,591 |
267,321 |
1,906,912 |
|||||||||||||||||
|
Operating loss |
(695,027 |
) |
105,423 |
(589,604 |
) |
(1,639,591 |
) |
(267,321 |
) |
(1,906,912 |
) |
|||||||||||||
|
Gain on settlement of debt |
-- |
-- |
-- |
-- |
19,475 |
19,475 |
||||||||||||||||||
|
Net loss |
$ |
(695,027 |
) |
$ |
105,423 |
$ |
(589,604 |
) |
$ |
(1,639,591 |
) |
$ |
(247,846 |
) |
$ |
(1,887,437 |
) |
|||||||
|
Net loss per common share: |
||||||||||||||||||||||||
|
Basic and diluted |
$ |
(0.02 |
) |
$ |
(0.01 |
) |
$ |
(0.01 |
) |
$ |
(0.04 |
) |
$ |
-- |
$ |
(0.04 |
) |
|||||||
| Weighted average common shares outstanding: | ||||||||||||||||||||||||
|
Basic and diluted |
46,181,529 |
46,181,529 |
46,181,529 |
45,545,420 |
45,545,420 |
45,545,420 |
||||||||||||||||||
(a) To reduce consulting expense for the unvested warrants ($103,944) and to reclassify certain amounts to conform presentation.
(b) To record additional consulting expense for warrants issued for services ($349,370), reduce consulting expense for the unvested warrants ($103,944), and to reclassify certain amounts to conform presentation.
|
13
|
| Condensed Consolidated Statements of Cash Flows | |||||||||||||
| Nine months ended September 30, 2013 | |||||||||||||
| Originally Stated | Adjustments | Restated | |||||||||||
|
Operating Activities: |
|||||||||||||
|
Net loss |
$ |
(1,639,591 |
) |
$ |
(247,846 |
) |
$ |
(1,887,437 |
) |
(a) |
|||
|
Stock issued for services |
373,679 |
-- |
373,679 |
||||||||||
|
Warrants issued for services |
-- |
349,370 |
349,370 |
(b) |
|||||||||
|
Gain on settlement of debt |
-- |
(19,475 |
) |
(19,475 |
) |
(c) |
|||||||
|
Changes in operating assets and liabilities: |
|||||||||||||
|
Accounts payable |
(91,451 |
) |
150,383 |
58,932 |
(d) |
||||||||
|
Accrued liabilities – related party |
(52,305 |
) |
208,250 |
155,945 |
(e) |
||||||||
|
Net cash used in operating activities |
(1,409,668 |
) |
440,682 |
(968,986 |
) |
||||||||
|
Investing Activities: |
|||||||||||||
|
Intangible assets |
(25,115 |
) |
-- |
(25,115 |
) |
||||||||
|
Loan receivable |
(17,858 |
) |
17,858 |
-- |
(d) |
||||||||
|
Net cash used in investing activities |
(42,973 |
) |
17,858 |
(25,115 |
) |
||||||||
|
Financing Activities: |
|||||||||||||
|
Proceeds from sale of common stock |
1,950,290 |
(250,290 |
) |
1,700,000 |
(d) |
||||||||
|
Proceeds from notes payable – related party |
(11,200 |
) |
12,100 |
900 |
(e) |
||||||||
|
Payments on notes payable – related party |
208,250 |
(220,350 |
) |
(12,100 |
) |
(e) |
|||||||
|
Net cash provided by financing activities |
2,147,340 |
(458,540 |
) |
1,688,800 |
|||||||||
|
Net increase (decrease) in cash |
694,699 |
694,699 |
|||||||||||
|
Cash, beginning of period |
194,721 |
194,721 |
|||||||||||
|
Cash, end of period |
$ |
889,420 |
$ |
889,420 |
|||||||||
(a) Additional consulting expense for warrants issued for services ($349,370), and reduced consulting expense for the unvested warrants ($103,944).
(b) Additional consulting expense for warrants issued for services is a non-cash adjustment.
(c) Gain on settlement of debt was previously shown as a change in accounts payable.
(d) The above transactions were improperly recorded to accounts payable, loan receivable and equity.
(e) Certain accrued liabilities to related parties were improperly categorized as notes payable to related parties.
|
14
|
Three and nine months ended September 30, 2012
During the analysis of the restatement for the three and nine months ended September 30, 2013, we identified an error in the statement of operations for the nine months ended September 30, 2012, that were presented for comparative purposes in our September 30, 2013 10-Q. In April 2012, a director of the Company returned 5,000,000 shares that had been issued to him by a shareholder as compensation, resulting in a reversal of expense of $2,650,000. This was not reflected in the statement of operations for the nine months ended September 30, 2012, however, it was included in the September 30, 2012 10-Q. We have also reclassified certain amounts to conform to our current period presentation. The following table reflects the impact of these corrections on our September 30, 2012, statements of operations.
| Condensed Consolidated Statements of Operations | ||||||||||||||||||||||||
| Three months ended September 30, 2012 | Nine months ended September 30, 2012 | |||||||||||||||||||||||
| Originally Stated | Adjustments (a) | Restated | Originally Stated | Adjustments (b) | Restated | |||||||||||||||||||
|
Gross profit |
$ |
-- |
$ |
-- |
$ |
-- |
$ |
-- |
$ |
-- |
$ |
-- |
||||||||||||
|
Operating expenses |
||||||||||||||||||||||||
|
Consulting |
501,923 |
(10,000 |
) |
491,923 |
1,408,002 |
(10,000 |
) |
1,398,002 |
||||||||||||||||
|
Professional fees |
19,480 |
119,970 |
139,450 |
162,984 |
199,632 |
362,616 |
||||||||||||||||||
|
Research and development |
4,744 |
-- |
4,744 |
453,875 |
-- |
453,875 |
||||||||||||||||||
|
General and administrative |
4,561 |
59 |
4,620 |
64,427 |
19,626 |
84,053 |
||||||||||||||||||
|
Director stock compensation |
-- |
-- |
-- |
-- |
(2,650,000 |
) |
(2,650,000 |
) |
||||||||||||||||
|
Total operating expenses |
530,708 |
110,029 |
640,737 |
2,089,288 |
(2,440,742 |
) |
(351,454 |
) |
||||||||||||||||
|
Operating gain (loss) |
(530,708 |
) |
(110,029 |
) |
(640,737 |
) |
(2,089,288 |
) |
2,440,742 |
351,454 |
||||||||||||||
|
Interest expense |
(180,714 |
) |
110,029 |
(70,685 |
) |
(282,871 |
) |
209,258 |
(73,613 |
) |
||||||||||||||
|
Finance cost |
(315,773 |
) |
-- |
(315,773 |
) |
(513,599 |
) |
-- |
(513,599 |
) |
||||||||||||||
|
Net loss |
$ |
(1,027,195 |
) |
$ |
-- |
$ |
(1,027,195 |
) |
$ |
(2,885,758 |
) |
$ |
2,650,000 |
$ |
(235,758 |
) |
||||||||
|
Net loss per common share: |
||||||||||||||||||||||||
|
Basic and diluted |
$ |
(0.02 |
) |
$ |
-- |
$ |
(0.02 |
) |
$ |
(0.06 |
) |
$ |
0.06 |
$ |
-- |
|||||||||
| Weighted average common shares outstanding: | ||||||||||||||||||||||||
|
Basic and diluted |
47,646,411 |
47,646,411 |
47,646,411 |
47,864,741 |
47,864,741 |
47,864,741 |
||||||||||||||||||
(a) Reclassification of certain amounts to conform to current period presentation.
(b) Record reversal of expense associated with the return of the previously issued shares and reclassification of certain amounts to conform to current period presentation.
|
15
|
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
General Discussion and Outlook
HPEV, Inc., (we, us, our, the “Company” or “HPEV”) was incorporated in the State of Nevada on July 22, 2002. We were formerly known as Bibb Corporation and Z3 Enterprises. We have developed and intend to commercialize dispersion technologies in various product platforms, and have developed and intend to commercialize an electric load assist technology around which we have designed a vehicle retrofit system. In preparation, we have applied for trademarks for one of our technologies and its acronym. We believe that our proprietary technologies, including our patent portfolio and trade secrets, can help increase the efficiency and positively impact the manufacturing cost structure in several large industries beginning with motor/generator and fleet vehicles. The markets for products utilizing our technology include consumer, industrial and military markets, both in the U.S. and worldwide. As of September 30, 2013, we have 5 patents and 5 patent applications pending in the area of composite heat structures, motors, and related structures, heat pipe architecture, applications (commonly referred to as “thermal” or ”heat dispersion technology”) and a parallel vehicle power platform. The Company intends to commercialize our patents by licensing our thermal technologies and applications to electric motor, pump and vehicle component manufacturers; by licensing or selling a mobile electric power system powered by the Company’s proprietary gearing system to commercial vehicle and fleet owners; and by licensing a plug-in hybrid conversion system for heavy duty trucks, buses and tractor trailers to fleet owners and service centers.
The patents and patents-pending cover heat pipe architecture(s) and their applications, a parallel power platform and a parallel power gearing system. Additionally, we believe that the technology enhances the lifespan and effectiveness of many types of heat-producing mechanical equipment including vehicle components. HPEV thermal technology delivers the power density of a water-cooled motor or generator in a totally enclosed and nearly maintenance free enclosure. We project that our patent-pending Radial Vent Thermal technology can increase power density in several classes of motor enclosure ratings including Open, WPI (Weather Protected I) and WPII (Weather Protected II) enclosures by up to 20%. The parallel power platform enables vehicles, regardless of their fuel type (diesel, gas, CNG, LNG, fuel cell and battery operated), to alternate between two sources of power and forms the basis of the electric load assist delivered to the engine. The parallel power input gearing unit enables vehicles to run an on-board generator to deliver mobile electric power.
We intend to license heat pipe technology to manufacturers of electric motors, electric generators, as well as manufacturers of vehicle parts, such as brakes, resistors and calipers. In Mobile Generation, we have nearly completed the conversion of our 25 kilowatt (“kW”) demonstration vehicle and we intend to commercialize the product through retrofit on three vehicle platforms this year. We also intend to develop and commercialize Mobile Generation in power output ranges from 25kW up to 200kW in 2014. The demonstration vehicles will be used to showcase the effectiveness of the technology, generate data and as a marketing tool to generate orders. The target markets include public utilities, commercial and fleet vehicles, including heavy duty pick-up trucks, tractor trailer trucks and buses. We have executed product development agreements with two multi-national manufacturers. We are currently negotiating with a number of fleet owners and manufacturers to install our Mobile Generation system in their work vehicles.
|
16
|
Results of Operations
The following table sets forth, for the periods indicated, condensed consolidated statements of operations data. The table and the discussion below should be read in conjunction with the accompanying condensed consolidated financial statements and the notes thereto, appearing elsewhere in this report.
| Three months ended September 30, | |||||||||||||||||
| 2013 (Restated) |
2012 (Restated) |
Change | % | ||||||||||||||
|
|
|||||||||||||||||
|
Revenues |
$ |
-- |
$ |
-- |
N/A |
N/A |
|||||||||||
|
Operating expenses |
|||||||||||||||||
|
Consulting |
$ |
30,615 |
$ |
491,923 |
$ |
(461,308 |
) |
(94)% |
|||||||||
|
Professional fees |
142,635 |
139,450 |
3,185 |
2% |
|
||||||||||||
|
Research and development |
212,389 |
4,744 |
207,645 |
4,377% |
|
||||||||||||
|
General and administrative |
203,965 |
4,620 |
199,345 |
4,315% |
|
||||||||||||
|
Total operating expenses |
$ |
589,604 |
$ |
640,737 |
$ |
(51,113 |
) |
(8)% |
|
||||||||
|
Other income and (expense) |
$ |
-- |
$ |
(386,458 |
) |
$ |
386,458 |
(100)% |
|
||||||||
|
Net loss |
$ |
(589,604 |
) |
$ |
(1,027,195 |
) |
$ |
437,591 |
(43)% |
|
|||||||
| Nine months ended September 30, | |||||||||||||||||
| 2013 (Restated) |
2012 |
Change | % | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
|
Revenues |
$ |
-- |
$ |
-- |
N/A |
N/A |
|||||||||||
|
Operating expenses |
|||||||||||||||||
|
Consulting |
$ |
1,052,932 |
$ |
1,398,002 |
$ |
(345,070 |
) |
(25)% |
|
||||||||
|
Professional fees |
229,004 |
362,616 |
(133,612 |
) |
(37)% |
|
|||||||||||
|
Research and development |
302,089 |
453,875 |
(151,786 |
) |
(33)% |
|
|||||||||||
|
General and administrative |
322,887 |
84,053 |
238,834 |
284% |
|
||||||||||||
|
Director stock compensation |
-- |
(2,650,000 |
) |
2,650,000 |
(100)% |
|
|||||||||||
|
Total operating expenses |
$ |
1,906,912 |
$ |
(351,454 |
) |
$ |
2,258,366 |
(643)% |
|
||||||||
|
Other income and (expense) |
$ |
19,475 |
$ |
(587,212 |
) |
$ |
606,687 |
(103)% |
|
||||||||
|
Net loss |
$ |
(1,887,437 |
) |
$ |
(235,758 |
) |
$ |
(1,651,679 |
) |
701% |
|
||||||
|
17
|
Revenues
During the three and nine months ended September 30, 2013 and 2012, and since inception, we have not generated any revenues.
Operating Expenses
Three months ended September 30, 2013 compared to 2012
Consulting expense was higher in 2012 due to equity-based payments to companies that assisted us with raising capital, which did not recur in 2013. Equity-based consideration is typically higher than cash-based consideration. Research and development expense was higher in 2013 due to the timing of efforts by our subcontractors to develop our technology. General and administrative expense was higher in 2013 primarily due to expenses incurred by management in raising capital.
Nine months ended September 30, 2013 compared to 2012
Consulting expense was higher in 2012 due to equity-based payments to companies that assisted us with raising capital, while in 2013 the equity-based expense for raising capital was significantly lower. Equity-based consideration is typically higher than cash-based consideration. Research and development expense was higher in 2012 due to the timing of efforts by our subcontractors to develop our technology. General and administrative expense was higher in 2013 primarily due to expenses incurred by management in raising capital. The reversal of the director stock compensation expense in 2012 relates to the return of stock by a director of the Company that had been issued to him by a shareholder as compensation.
Other Income and Expense
The decrease in other expense related to our debt structure, as we had a gain on debt settlement during the nine months ended September 30, 2013, while we incurred interest expense and finance costs during the three and nine months ended September 30, 2012.
Net Loss
Since we have incurred losses since inception, we have not recorded any income tax expense or benefit. Accordingly, our net loss is driven by our operating and other expenses.
Liquidity and Capital Resources
We have historically met our liquidity requirements primarily through the public sale and private placement of equity securities, debt financing, and exchanging common stock warrants and options for professional and consulting services. At September 30, 2013, we had cash and cash equivalents of $889,420.
We executed an agreement on February 19, 2014, with Lincoln Park Capital Fund, LLC (“Lincoln Park”), which gives us the right to sell to Lincoln Park up to $10,000,000 in shares of our common stock, subject to certain limitations, over a 36-month period. The registration statement with respect to 4,671,785 of our common stock was declared effective July 3, 2014. We hope that the funds from selling shares to Lincoln Park will be sufficient to meet our liquidity needs until we begin generating cash flows from revenues.
Working capital is the amount by which current assets exceed current liabilities. We had working capital of $448,023 and $304,705, respectively, at September 30, 2013 and December 31, 2012. The increase in working capital was due primarily to an increase in cash from the sale of our common stock.
We currently have no off-balance sheet arrangements.
|
18
|
Cash Flows
Our cash flows from operating, investing and financing activities were as follows:
| Nine months ended September 30, |
||||||||
| 2013 (Restated) |
2012 (Restated) |
|||||||
|
Net cash used in operating activities |
$ |
(968,986 |
) |
$ |
(548,641 |
) |
||
|
Net cash used in investing activities |
(25,115 |
) |
(25,193 |
) |
||||
|
Net cash provided by financing activities |
1,688,800 |
495,492 |
||||||
Net cash used in operating activities increased primarily due to increased efforts to raise capital and an increase in cash-based payments over equity-based payments. Our investing activity relates to the development of patents, and has remained steady since inception. Our improvement in cash provided by financing activities reflects our successful efforts to raise capital.
Going Concern
We have incurred net losses since inception and have not fully commenced operations, raising substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern is dependent on our ability to generate revenue, achieve profitable operations and repay our obligations when they come due. The accompanying condensed consolidated financial statements have been prepared assuming we will continue as a going concern.
Critical Accounting Estimates
Our condensed consolidated financial statements and the accompanying notes have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires management to make estimates, judgments and assumptions that affect reported amounts of assets, liabilities, and expenses. We continually evaluate the accounting policies and estimates used to prepare the condensed consolidated financial statements. The estimates are based on historical experience and assumptions believed to be reasonable under current facts and circumstances. Actual amounts and results could differ from these estimates made by management. Certain accounting policies that require significant management estimates and are deemed critical to our results of operations and financial position are discussed in our Annual Report on Form 10-K/A for the year ended December 31, 2013 in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
Item 3. Quantitative and Qualitative Disclosures About Market Risk
As a smaller reporting company, we are not required to provide the information required by this Item.
Item 4. Controls and Procedures
Our management does not expect that our internal controls over financial reporting will prevent all errors and all fraud. Control systems, no matter how well conceived and managed, can provide only reasonable assurance that the objectives of the control system are met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake.
|
19
|
Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, as of September 30, 2013, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended. Based on this evaluation, our principal executive officer and principal financial officer have concluded that, based on the material weaknesses discussed below, our disclosure controls and procedures were not effective as of such date to ensure that information required to be disclosed by us in reports filed or submitted under the Securities Exchange Act were recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Act Commission’s rules and forms and that our disclosure controls are not effectively designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act is accumulated and communicated to management, including our principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Our internal controls are not effective for the following reasons, (1) there are no entity level controls, because of the limited time and abilities of the Company’s five officers, (2) there is no separate audit committee, and (3) there is a lack of segregation of duties, due to our limited personnel. As a result, the Company’s internal controls have inherent weaknesses, which may increase the risks of errors in financial reporting under current operations and accordingly are not effective as evaluated against the criteria set forth in the Internal Control – Integrated Framework issued by the committee of Sponsoring Organizations of the Treadway Commission. Based on our evaluation, our management concluded that our internal controls over financial reporting were not effective as of September 30, 2013.
Going forward, we intend to evaluate our processes and procedures and, where practicable, implement changes in order to have more effective controls over financial reporting.
Changes in Internal Control over Financial Reporting
There have been no changes in our internal control over financial reporting during the last quarterly period covered by this report that have materially affected, or are reasonably likely to affect, our internal control over financial reporting.
|
20
|
Part II. Other Information
Item 6. Exhibits
|
31.1 |
Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer. |
|
31.2 |
Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer. |
|
32.1 |
Chief Executive Officer Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|
32.2 |
Chief Financial Officer Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|
21
|
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
HPEV, Inc. |
|||
|
Dated: March 27, 2015 |
/s/ Timothy Hassett |
||
|
By: |
Timothy Hassett |
||
|
Its: |
Chief Executive Officer (Principal Executive Officer) |
||
|
Dated: March 27, 2015 |
/s/ Quentin Ponder |
||
|
By: |
Quentin Ponder |
||
|
Its: |
Chief Financial Officer (Principal Financial and Accounting Officer) |
||
22
EXHIBIT 31.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO SECTION 302 OF THE
SARBANES-OXLEY ACT OF 2002
I, Timothy Hassett, certify that:
|
1. |
I have reviewed this Quarterly Report on Form 10-Q/A of HPEV, Inc (the “registrant”) for the quarter ended September 30, 2013; |
|
|
|
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
|
|
|
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
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4. |
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exhibit Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
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(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; |
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(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; |
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(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 |
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(d) |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
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5. |
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
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(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 |
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(b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Dated: March 27, 2015 | By: |
/s/ Timothy Hassett |
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Timothy Hassett |
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Chief Executive Officer (Principal Executive Officer) |
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EXHIBIT 31.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO SECTION 302 OF THE
SARBANES-OXLEY ACT OF 2002
I, Quentin Ponder, certify that:
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1. |
I have reviewed this Quarterly Report on Form 10-Q/A of HPEV, Inc. (the “registrant”) for the quarter ended September 30, 2013; |
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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; |
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2. |
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; |
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4. |
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exhibit Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
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(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; |
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(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; |
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(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 |
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(d) |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
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5. |
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
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(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 |
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(b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Dated: March 27, 2015 | By: |
/s/ Quentin Ponder |
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Quentin Ponder |
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Chief Financial Officer (Principal Financial and Accounting Officer) |
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EXHIBIT 32.1
CERTIFICATION PURSUANT TO 18 USC, SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of HPEV, Inc. (the “Company”) on Form 10-Q/A for the quarter ended September 30, 2013, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Timothy Hassett, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Sec. 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:
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(1) |
The Report fully complies with the requirements of Sections 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
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(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| Dated: March 27, 2015 | By: |
/s/ Timothy Hassett |
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Timothy Hassett |
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Chief Executive Officer (Principal Executive Officer) |
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EXHIBIT 32.2
CERTIFICATION PURSUANT TO 18 USC, SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of HPEV, Inc. (the “Company”) on Form 10-Q/A for the quarter ended September 30, 2013, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Quentin Ponder, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Sec. 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:
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(1) |
The Report fully complies with the requirements of Sections 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
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(2) |
Information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| Dated: March 27, 2015 | By: |
/s/ Quentin Ponder |
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Quentin Ponder |
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Chief Financial Officer (Principal Financial and Accounting Officer) |
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