UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

 

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

 

For the quarterly period ended March 31, 2015

 

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

 

For the transition period from ____ to ____

 

Commission file number 000-53982

 

 

 

SOLARIS POWER CELLS, INC.

(Exact name of registrant as specified in its charter)

 

Nevada		46-3386352
(State or other jurisdiction		(I.R.S. Employer
of incorporation or organization)		Identification No.

 

3111 E. Tahquitz Canyon Way, Palm Springs, California, 92262

(Address of principal executive offices) (zip code)

 

760-600-5272

(Registrant’s telephone number, including area code)

 

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

 

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 definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large accelerated filer [  ]	Accelerated filer [  ]
	(Do not check if a smaller reporting company)
Non-accelerated filer [  ]	Smaller reporting company [X]

 

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

 

APPLICABLE ONLY TO CORPORATE ISSUERS

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date 84,716,684 common shares issued and outstanding as at May 12, 2015.

 

 

  

Table of Contents

 

PART I – FINANCIAL INFORMATION
	Item 1. Financial Statements		F-1
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		3
	Item 3. Quantitative and Qualitative Disclosures About Market Risk		12
	Item 4. Controls and Procedures.		12
PART II - OTHER INFORMATION
	Item 1. Legal Proceedings		13
	Item 1A. Risk Factors		13
	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		13
	Item 3. Defaults Upon Senior Securities		13
	Item 4. Mine Safety Disclosures		13
	Item 5. Other Information		13
	Item 6. Exhibits		14
SIGNATURES			15

 

 

PART I – FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS.

 

Our unaudited consolidated financial statements are stated in United States dollars and are prepared in accordance with United States generally accepted accounting principles.

 

It is the opinion of management that the unaudited consolidated interim financial statements for the quarter ended March 31, 2015 includes all adjustments necessary in order to ensure that the unaudited consolidated interim financial statements are not misleading.

  

 

Solaris Power Cells, Inc.

Condensed Balance Sheets

(unaudited)

 

		March 31, 2015				December 31, 2014
Assets
Current assets
Cash and cash equivalents		$	99,575			$	65,580
Total current assets			99,575				65,580
Long term assets
Property, and equipment, net			24,088				26,755
Total long term assets			24,088				26,755
Total assets		$	123,663			$	92,335
Liabilities and Stockholders’ Equity (Deficit)
Current liabilities
Accounts payable and accrued expenses		$	5,780			$	18,102
Deferred compensation			99,368				112,368
Derivative liability			194,913				114,143
Total current liabilities			300,061				244,613
Long-term liabilities
Convertible note payable, net of discount			13,674				9,132
Total long-term liabilities			13,674				9,132
Total liabilities			313,735				253,745
Stockholders’ equity (Deficit)
Common stock, $0.001 par value, 2,160,000,000 shares authorized; 82,336,683 and 71,286,683 shares issued and outstanding, as of March 31, 2015 and December 31, 2014			82,337				71,286
Additional paid in capital			4,816,270				4,288,501
Stock warrants			127,056				127,056
Accumulated deficit			(5,215,735	)			(4,648,253	)
Total stockholders’ equity (deficit)			(190,072	)			(161,410	)
Total liabilities and stockholders’ deficit		$	123,663			$	92,335

 

See accompanying notes to unaudited financial statements

 

 

Solaris Power Cells, Inc.

Condensed Statements of Operations

(unaudited)

 

		For the three months ended
		March 31,
		2015				2014
Revenue		$	25,068			$	-
Cost of goods sold			18,125				-
Gross profit			6,943				-
Operating expenses
Advertising			8,383				1,453
Consulting			5,500				-
Depreciation			2,669				2,784
Filing fees			1,404				5,082
General and administrative			22,247				2,506
Professional fees			6,800				123,582
Rent			5,184				4,955
Research and development			-				41,330
Stock based compensation			445,100				-
Supplies			-				5,593
Travel and entertainment			10,524				9,422
Wages, taxes and employee benefits			-				116,698
Total operating expenses			507,811				313,405
Loss from operations			(500,868	)			(313,405	)
Other income (expense)
Amortization of debt discount			(8,512	)			-
Derivative expense			(181,197	)			-
Interest expenses			(7,333	)			-
Change in fair market value of derivative liability			130,427				-
Interest income			-				7
Total other income (expense)			(66,615	)			7
Net loss		$	(567,483	)		$	(313,398	)
Basic and diluted loss per share		$	(0.01	)		$	(0.005	)
Weighted average shares outstanding Basic and diluted			76,087,794				62,830,000

 

See accompanying notes to unaudited financial statements

 

 

Solaris Power Cells, Inc.

Condensed Statements of Cash Flow

(unaudited)

 

		For the three months ended
		March 31,
		2015				2014
Cash flows from operating activities
Net loss			(567,483	)			(313,398	)
Adjustments to reconcile net loss to cash used in operating activities
Change in fair market value of derivative liability			(130,427	)			-
Depreciation expense			2,669				2,784
Debt discount amortization			8,512				-
Cost of derivative liability			181,197				-
Stock based compensation			445,100				92,499
(Increase) decrease in current assets
(Increase) decrease in prepaid expenses			-				10,708
(Increase) in inventory			-				(19,831	)
Increase (decrease) in current liabilities:
Decrease in deferred compensation			(13,000	)			-
Increase in accounts payable and accrued liabilities			1,678				(17,676	)
Net cash used in operating activities			(71,754	)			(244,914	)
Cash flows from investing activities
Purchase of property and equipment			-				(2,821	)
Net cash used in investing activities			-				(2,821	)
Cash flows from financing activities
Deposits on common share purchase			-				200,000
Proceeds from issuance of common stock			75,750				-
Proceeds of loan payable			30,000				-
Net cash provided by financing activities			105,750				200,000
Net increase (decrease) in cash and cash equivalents			33,996				(47,735	)
Cash and cash equivalents, beginning balance			65,580				151,881
Cash and cash equivalents, ending balance			99,576				104,146
Supplementary information
Cash paid during the year for:
Interest		$	-			$	-
Income taxes		$	-			$	-
Non cash investing and financing activity
Common stock issued for conversion of notes payable		$	17,970				-

 

See accompanying notes to unaudited financial statements

 

 

SOLARIS POWER CELLS, INC.
NOTES TO THE CONDENSED FINANCIAL STATEMENTS

March 31, 2015

(Unaudited)

 

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Nature of Business

 

Solaris Power Cells, Inc. (formerly Rolling Technologies, Inc.) (“Solaris” and the “Company”) was incorporated in Nevada on July 27, 2007.

 

The Company is developing a renewable energy storage device to market to residential and commercial industrial users. Solaris currently has developed a prototype of our Solaris Power Cell, which is a 100% lead-free, solid state digital storage device. The device provides a PCBA (Printed Circuit Board Assembly) that creates an intelligent power cell creating a digital energy storage solution capable of providing energy storage to applications normally reliant and equipped with highly toxic inefficient lead acid, nickel metal hydride or lithium-ion batteries. The products can use any renewable energy source including sun, wind, water, motion or thermal to provide the energy to be stored. The product may also be used with non-renewable energy sources.

 

The Company’s system stores DC energy at a rate limited only by the network feeding it, as it has efficiencies up to 98%. The product design allows for mass production and the anticipation is it will compete head on with lead acid or lithium-ion batteries.

 

Solaris incorporates and implements a digital balancing design to insure the proper voltage is maintained on each power cell, thus making each cell smart. The energy is available to the regulator circuits that will regulate the output current and voltage. The capacity of the storage transfer rate is not limited in voltage or current and is controlled by the intelligent power controller and can be configured per application. The output of regulator section can be greater or less that the input voltage provided by the power cell. The output from the power cell system is regulated AC or DC power provided to the connected electrical systems.

 

Basis of Presentation

 

The accompanying financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial positions, results of operation, and cash flows on March 31, 2015, and for all periods presented herein, have been made.

 

Certain information and footnote disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes included in the Company’s December 31, 2014 audited financial statements as reported in its form 10K. The results of operations for the three months ended March 31, 2015 are not necessarily indicative of the operating results for the full year ended December 31, 2015.

 

Fiscal Year End

 

In 2013 the Company changed its fiscal year-end from July 31 to December 31.

 

Cash and Cash Equivalents

 

Solaris considers all highly liquid investments with maturities of six months or less to be cash equivalents. At March 31, 2015 and December 31, 2014, the Company had $99,575 and $65,580 of cash and cash equivalents, respectively.

 

 

SOLARIS POWER CELLS, INC.
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
March 31, 2015

(Unaudited)

 

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 

Fair Value of Financial Instruments

 

The Company’s financial instruments consist of cash and cash equivalents, prepaid expenses, inventory, and accounts payable and accrued expenses. The carrying amount of these financial instruments approximates fair value due either to length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these financial statements.

 

Inventory

 

Inventory consists of ancillary products such as Golf Car chassis, Solar Panels, Power Cells, and various devices and components to support our finished goods. Inventory value is determined by the average cost method and management maintains inventory levels based on historical and industry trends. We regularly assess inventory quantities for excess and obsolescence primarily based on forecasted product demand. See Note 3.

 

Property and equipment

 

Property and equipment are being depreciated over their estimated useful lives, 3 to 5 years, using the straight-line method of depreciation for book purposes.

 

Long-Lived Assets

 

In accordance with ASC 350, the Company regularly reviews the carrying value of intangible and other long-lived assets for the existence of facts or circumstances, both internally and externally, that may suggest impairment. If impairment testing indicates a lack of recoverability, an impairment loss is recognized by the Company if the carrying amount of a long-lived asset exceeds its fair value.

 

Research and development

 

We incur research and development costs to develop our new and next-generation products. Our products reach technological feasibility shortly before the products are released and therefore R&D costs are expensed as incurred.

 

Income Taxes

 

Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized.

 

Use of Estimates

 

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

Revenue Recognition

 

The Company recognizes revenue when products are fully delivered or services have been provided and collection is reasonably assured.

 

 

SOLARIS POWER CELLS, INC.
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
March 31, 2015

(Unaudited)

 

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 

Advertising Costs

 

Advertising costs are expensed as incurred. The Company incurred advertising costs of $8,383 for the three months end March 31, 2015 and $1,453 for the three months ended March 31, 2014.

 

Stock-Based Compensation

 

Stock-based compensation is accounted for at fair value in accordance with ASC 718. To date, the Company has not adopted a stock option plan and has not granted any stock options. As of March 31, 2015, the Company has not issued any stock-based payments to its employees.

 

Basic Income (Loss) Per Share

 

Basic income (loss) per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company’s net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. There are no such common stock equivalents outstanding as of March 31, 2015 and March 31, 2014.

 

Recent Accounting Pronouncements

 

On June 10, 2014, the Financial Accounting Standards Board (“FASB”) issued update ASU 2014-10, Development Stage Entities (Topic 915). Amongst other things, the amendments in this update removed the definition of development stage entity from Topic 915, thereby removing the distinction between development stage entities and other reporting entities from US GAAP. In addition, the amendments eliminate the requirements for development stage entities to (1) present inception-to-date information on the statements of income, cash flows and shareholders’ equity, (2) label the financial statements as those of a development stage entity; (3) disclose a description of the development stage activities in which the entity is engaged and (4) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage.

 

The amendments are effective for annual reporting periods beginning after December 31, 2014 and interim reporting periods beginning after December 15, 2015, however entities are permitted to early adopt for any annual or interim reporting period for which the financial statements have yet to be issued. The Company has elected to early adopt these amendments and accordingly have not labeled the financial statements as those of a development stage entity and have not presented inception-to-date information on the respective financial statements.

 

There are no other recent accounting pronouncements that are expected to have a material effect on the Company’s financial statements.

 

NOTE 2 – PREPAID EXPENSES

 

Prepaid expenses at March 31, 2015 and March 31, 2014 were nil.

 

NOTE 3 – INVENTORY

 

Inventory has consisted of 100% finished goods. During the year ended December 31, 2014, the Company disposed of all its existing finished goods inventory for gross proceeds of $30,110 and expensed the costs of production, which at the time of disposition amounted to $54,231.

 

NOTE 4 – PROPERTY AND EQUIPMENT

 

Property and equipment consisted of the following at March 31, 2015 and December 31, 2014:

 

		March 31, 2015				December 31, 2014
Office equipment		$	9,894			$	9,894
Furniture and fixtures			20,272				20,272
Computer equipment			5,487				5,487
Software			4,478				4,478
			40,131				40,131
Less: accumulated depreciation			(16,044	)			(13,376	)
		$	24,087			$	26,755

 

Depreciation expense was $2,269 for the three months ended March 31, 2015 and $2,784 for the three months ended March 31, 2014.

 

 

SOLARIS POWER CELLS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2015

(Unaudited)

 

NOTE 5 – INTANGIBLE ASSETS

 

On August 23, 2013, the Company acquired intellectual property from four shareholders in exchange for 8,880,000 shares of common stock. The common stock was valued at $0.30 per share for a total value of $2,664,000.

 

In accordance with ASC 805-50, assets acquired from entities under common control are recorded at their carrying value. In this case, the carrying value was $0, so a non-cash distribution to the four shareholders of $2,664,000 was recorded.

 

NOTE 6 – LOANS PAYABLE – RELATED PARTY

 

During the year ended December 31, 2014, the Company accrued unpaid salaries of $112,368, to three officers, one of whom resigned on September 29, 2014 and ceased his accrual as of that date. The remaining employment contracts were terminated December 31, 2014. At March 31, 2015 there remained $99,368 unpaid.

 

NOTE 7 – LOAN PAYABLE

 

On September 2, 2014, and February 25, 2015 the Company entered into loan agreements with JMJ Financial to repay $55,556 which consisted of a $50,000 cash advance and a $5,556 issue discount, and $37,733 consisting of a $30,000 cash advance and $7,333 original issue discount respectively.. As a condition of the loans the Company was required to reserve 135,000,000 shares of its common stock. The Lender has the right, at its election, to convert all or part of the outstanding and unpaid Principal Sum and accrued interest (and any other fees) Into shares of fully paid and non-assessable shares of common stock of the Borrower as per this conversion formula: Number of shares receivable upon conversion equals the dollar conversion amount divided by the Conversion Price. The Conversion Price is the lesser of $0.26 or 60% of the lowest trade price in the 25 trading days previous to the conversion. On March 3, and March 25, 2015 the Company issued 700,000 and 400,000 shares to JMJ, in response to conversion notices received. Accordingly, the September 2, 2014 advance was reduced by $8,750 and $9,220. The Company recorded discounts in the amount of $50,000 and $30,000, respectively, in connection with the initial valuation of the conversion feature to be amortized utilizing the interest method of accretion over the term of the note. In accordance with ASC 815, we have bifurcated the conversion feature of the note and recorded a derivative liability. As of, December 31, 2014 the value of the derivative liability was $114,143 and we recognized a derivative expense of $68,131 for the year ended December 31, 2014. During the year ended December 31, 2014, the Company recorded a derivative expense of $68,131, a debt discount of $9,132 minus a fair market value change of $3,988. On March 31, 2015, the value of the combined derivative liability was $194,913. An additional derivative expense of $181,197, a debt discount of $8,512 minus a fair market value change of $130,427 was recorded.

 

NOTE 8 – EQUITY TRANSACTIONS

 

The Company has 2,160,000,000 shares of $0.001 par value common stock authorized.

 

During the six months ended June 30, 2014, the Company issued 1,333,331 units, which consisted of one share of common stock and one common stock purchase warrant for total proceeds of $400,000. The warrants are exercisable at $0.40 for a period of three years. The warrants were valued using the Black-Scholes Option Pricing Method on their respective grant dates. The proceeds were then allocated between the common stock and the common stock purchase warrants.

 

On October 2, 2014 the company entered into a consulting agreement with the Consultant to provide sales and marketing and was paid, 5,823,352 fully vested shares, in advance, relying on an S-8 exemption recorded at a cost of $0.071 per shares or a total cost of $413,458.

 

On November 8, 2014 and December 31, 2014 the Company issued 1,300,000 shares of its restricted common stock, to two investors, for cash, at an average price of $0.04 for a total consideration of $54,550.

 

 

SOLARIS POWER CELLS, INC.
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
March 31, 2015

(Unaudited)

 

NOTE 8 – EQUITY TRANSACTIONS (CONTINUED)

 

The inputs for the 2014 warrant valuations are as follows:

 

		May 21, 2014				August 14, 2013				September 4, 2013				December 12,  2013				December 27,  2013
Number of units			1,333,331				1,666,666				100,000				166,667				166,667
Stock price at grant date		$	0.14			$	0.005			$	0.30			$	0.75			$	0.75
Exercise price			0.40			$	0.40			$	0.40			$	0.40			$	0.40
Expected life			3 years				3 years				3 years				3 years				3 years
Volatility			59	%			83	%			83	%			85	%			84	%
Risk-free rate			0.79	%			0.67	%			0.89	%			0.67	%			0.79	%

 

 

SOLARIS POWER CELLS, INC.
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
March 31, 2015

(Unaudited)

 

NOTE 9 – COMMITMENTS AND CONTINGENCIES

 

On October 1, 2013, the Company entered into a lease agreement to rent office space. The lease is month-to-month and requires monthly rental payments of $1728.00.

 

On December 31, 2014, the Company did not extend the employment agreements with its two directors and officers.

 

NOTE 10 – LIQUIDITY AND GOING CONCERN

 

Solaris has negative working capital, has incurred losses since inception, and has received minimal revenues from sales of products or services. These factors create substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustment that might be necessary if the Company is unable to continue as a going concern.

 

The ability of Solaris to continue as a going concern is dependent on the Company generating cash from the sale of its common stock and/or obtaining debt financing and attaining future profitable operations. Management’s plans include selling its equity securities and obtaining debt financing to fund its capital requirement and ongoing operations; however, there can be no assurance the Company will be successful in these efforts.

 

NOTE 11 – SUBSEQUENT EVENTS

 

In accordance with ASC 855-10, the Company has analyzed its operations subsequent to March 31, 2015 to the date these financial statements were issued, and has determined that it does not have any material subsequent events to disclose in these financial statements other than the events described above.

 

 

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

 

Forward-Looking Statements

 

This quarterly report on Form 10-Q contains forward-looking statements. Forward-looking statements are projections of events, revenues, income, future economic performance or management’s plans and objectives for future operations. In some cases, you can identify forward-looking statements by the use of terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. Examples of forward-looking statements made in this quarterly report on Form 10-Q include statements about:

 

	●	our marketing plan;
	●	our plans to hire industry experts and expand our management team;
	●	our beliefs regarding the future of our competitors;
	●	our anticipated development schedule;
	●	the anticipated benefits of our product;
	●	our expectation that the demand for our products will eventually increase; and
	●	our expectation that we will be able to raise capital when we need it.

 

These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including:

 

	●	general economic and business conditions;
	●	we may have product liability claims;
	●	we may not be successful in commercialization of our products;
	●	regulatory changes may hurt the market for our products;
	●	we may not be able to protect our intellectual property rights;
	●	our auditors have issued a going concern opinion regarding our company;
	●	competition for, among other things, capital, products and skilled personnel; and
	●	other factors discussed under the section entitled “Risk Factors”,

 

any of which may cause our company’s or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

 

While these forward-looking statements and any assumptions upon which they are based are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

 

As used in this report, the terms “we”, “us” and “our” mean Solaris Power Cells, Inc., a Nevada corporation. In this report, unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to “common shares” refer to the common shares in our capital stock.

 

Corporate Overview

 

We were formed as a Nevada corporation, “Rolling Technologies, Inc.” on July 27, 2007. On August 12, 2013, we changed our name to Solaris Power Cells, Inc. Effective August 12, 2013, we effected a 24 for 1 forward stock split of our authorized, and issued and outstanding shares of common stock. Our authorized common stock increased from 90,000,000 shares of common stock to 2,160,000,000 shares of common stock.

 

  

We are developing a renewable energy storage device, known as a “passive electron storage array”, to market to residential and commercial industrial users. We currently have developed a prototype of our Solaris Power Cell, which is a 100% lead-free, solid state digital storage device. Our device provides a PCBA (Printed Circuit Board Assembly) that creates an intelligent power cell creating digital energy storage solution capable of providing energy storage to applications normally reliant and equipped with highly toxic lead acid, nickel metal hydride batteries. Our products can use any renewable or non-renewable energy source including sun, wind, water, motion or thermal to provide the energy to be stored. To date we do not have any sales contracts.

 

Our system stores DC energy at a rate limited only by the network feeding it, as it has efficiencies reaching 98%. Our product design allows for mass production and we anticipate it will compete head on with lead acid batteries.

 

Off-grid lithium-ion and other battery types currently used in energy storage is limited in the flow of energy that can be accepted and stored at any given time and suffer from deficiencies such as short-life-cycles and are a hazardous waste product. In a typical battery, only a percentage of the energy sent to the battery is accepted; the balance is wasted. Our product is anticipated to accept close to 100% of its storage capacity very quickly because our charging process is only limited by the network, and not our technology.

 

A normal battery can take hours to recharge, whereas our product can recharge in significantly less time compared to similar voltage storage capacity. A typical battery has a lifespan of 400-500 charge/discharge cycles, whereas our product can have 1,000,000 charge/discharge cycles.

 

Solar panel manufacturers and other energy providers are working to maximize the amount of electrical power they can generate, but they are losing that power to poor battery performance. We hope we can provide a better solution to those manufactures for use by the end users, and into new markets.

 

We incorporate and implement a digital balancing design to insure the proper voltage is maintained on each power cell, thus making each cell smart. The energy is available to the regulator circuits that will regulate the output current and voltage. The capacity of the storage transfer rate is not limited in voltage or current and is controlled by our intelligent power controller and can be configured per application. The output of regulator section can be greater or less than the input voltage provided by the power cell. The output from the power cell system is regulated AC or DC power provided to the connected electrical systems.

 

Results of Operations

 

The following summary of our results of operations should be read in conjunction with our unaudited financial statements for the fiscal periods ended March 31, 2015 and March 31, 2014, which are included herein.

 

		Unaudited three months
		ended March 31
		2015				2014
Revenue		$	25,068			$	-
Cost of Goods			(18,125	)			-
Operating Expenses			(507,811	)			(313,405	)
Other Income			-				7
Other Expense			(66,615	)			-
Net Loss		$	(567,483	)		$	(313,398	)

 

Revenues

 

We have limited operational history. We do not anticipate earning adequate revenues until we procure additional financing to manufacture and market our products. There is no assurance that we will earn adequate revenues or amounts that will enable us to continue as a going concern.

 

  

Expenses

 

Our operating expenses for the fiscal quarter ended March 31, 2015 and 2014 are outlined below:

 

		unaudited three months ended March 31,
		2015				2014
Advertising		$	8,383			$	1,453
Consulting			5,500				-
Depreciation			2,669				2,784
Filing fees			1,404				5,082
General and administrative			22,247				2,506
Professional fees			6,800				123,582
Rent			5,184				4,955
Research and development			-				41,330
Stock based compensation			445,100				-
Supplies			-				5,593
Travel and entertainment			10,524				9,422
Wages, taxes and employee benefits			-				116,698
Total operating expenses		$	507,811			$	313,405

 

Our expenses increased as a result of our acquisition of the IP relating to our renewable energy storage device. Prior to that acquisition, we had limited operations.

 

Liquidity and Capital Resources

 

Working Capital as at March 31, 2015

 

		As of				As of
		March, 31, 2015				December 31, 2014
Current Assets		$	99,575			$	65,580
Current Liabilities		$	(300,061	)		$	(244,613	)
Working Capital (Deficiency)		$	(200,486	)		$	(179,033	)

 

Our working capital deficiency increased from a deficiency of $179,033 to a working capital deficiency of $200,486 primarily as a result of continued operational costs, additional stock based payroll costs and ongoing research and development.

 

We have incurred operating losses since inception, and this is likely to continue in the foreseeable future. We require funds to enable us to address our minimum current and ongoing expenses.

 

Cash Flows

 

		Three months ended				Three months ended
		March 31, 2015				March 31, 2014
Cash (used in) Operating Activities		$	(71,754	)		$	(244,914	)
Cash (used in) Investing Activities		$	-			$	(2,821	)
Cash provided by Financing Activities		$	105,750			$	200,000
Net (Decrease) in Cash		$	33,996			$	(47,735	)

 

During the three months ended March 31, 2015, we used net cash in operating activities in the amount of $71,754 compared to $244,914 for the three months ended March 31, 2014.

 

The cash used in the three months ended March 31, 2015 was primarily due to expenses associated with research and development, advertising, marketing, accounting, legal and wages.

 

Our cash provided by financing activities for the three months ended March 31, 2015 decreased to $105,750 from $200,000 as the result of normal timing differences in the process of raising funds..

 

No cash was used for investing activities during the three months ended March 31, 2015 as compared to $2,821 during the three months ended March 31, 2014.

 

  

Cash Requirements

 

Our primary objective for the next twelve months is to continue research and development with the goal of commercializing our first solar powered limited use vehicles such as golf carts to a market ready status.

 

Specifically, we estimate our operating expenses, excluding non-cash charges for stock-based compensation and amortization, for the next 12 months to be as follows:

 

Expense		Amount
Bank charges and interest		$	1,200
Filing fees			13,600
Investor relations			30,000
Legal and accounting fees			127,000
Licenses and permits			1,200
Marketing expense			30,000
Insurance expense			7,440
Personnel and consulting expense			444,400
Research & Development			240,000
Transfer agent fees			1,200
Other general & administrative expense			224,294
Total:		$	1,120,334

 

There can be no assurance that we will generate revenues significant enough to offset these expenses to some or any degree and those we will not have significant needs for other financing to support the activities of our company.

 

Going Concern

 

We anticipate that our cash on hand will not be sufficient to satisfy all of our cash requirements for the next twelve month period. We currently do not have committed sources of additional financing and may not be able to obtain additional financing, particularly, if the volatile conditions in the stock and financial markets persist. If we require any additional financing, we plan to raise any such additional capital primarily through equity financing and loans from our directors, provided that such funding continues to be available to our company. We plan to continue to seek additional funds from our directors to fund our day-to-day operations until equity financing can be pursued. We have no guarantee that our directors will continue to fund our day-today operations. The issuance of additional equity securities by our company may result in a significant dilution in the equity interests of our current stockholders. There is no assurance that we will be able to obtain further funds required for our continued operations or that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain additional financing as required on a timely basis, we will not be able to meet certain obligations as they become due and we will be forced to scale down or perhaps even cease our operations.

 

Future Financings

 

We will require additional financing to fund our planned operations, including further development, regulatory requirements, and commercializing our existing assets. We currently do not have committed sources of additional financing and may not be able to obtain additional financing, particularly, if the volatile conditions in the stock and financial markets, and more particularly, the market for early development stage company stocks persist.

 

There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis, if and when it is needed, we will be forced to delay or scale down some or all of our development activities or perhaps even cease the operation of our business.

 

 

Since inception, we have funded our operations primarily through equity and debt financings and we expect that we will continue to fund our operations through the equity and debt financing. If we raise additional financing by issuing equity securities, our existing stockholders’ ownership will be diluted. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.

 

There is no assurance that we will be able to maintain operations at a level sufficient for an investor to obtain a return on his, her, or its investment in our common stock. Further, we may continue to be unprofitable.

 

Off-Balance Sheet Arrangements

 

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

 

Risks Associated with our Business

 

We will encounter manufacturing risks and may face product liability claims.

 

Our manufacture and sale of battery systems may expose us to significant risk of product liability claims. We may obtain product liability insurance, but such coverage may be inadequate to protect us from any liabilities we may incur, or we may not be able to maintain adequate product liability insurance at acceptable rates. If a product liability claim or series of claims were brought against us for uninsured liabilities or for amounts in excess of insurance coverage, and it is ultimately determined that we are liable, we may be liable to pay the claim, which could exceed the resources available to us. In addition, we could experience some material design or manufacturing failure, a quality system failure, other safety issues or heightened regulatory scrutiny that may warrant a recall of our products. A recall of any of our products could also result in increased product liability claims and damage to our reputation.

 

Since we lack a meaningful operating history, it is difficult for potential investors to evaluate our business.

 

Our limited operating history makes it difficult for potential investors to evaluate our business or prospective operations. We are subject to all the risks inherent in the initial organization, financing, expenditures, complications and delays inherent in a new business. Investors should evaluate an investment in us in light of the uncertainties encountered by new companies in an intensely competitive industry. Our business is dependent upon the implementation of our business plan, as well as our ability to enter into agreements with third parties for, among other things, the manufacturing of our products on commercially favorable terms. There can be no assurance that our efforts will be successful or that we will be able to attain profitability.

 

We may not be able to achieve commercialization of any products on the timetable we anticipate, or at all.

 

We cannot guarantee that we will be able to continue to develop commercially viable battery systems on the timetable we anticipate, or at all. The continued commercialization of our battery system requires substantial technological advances to improve the efficiency, functionality, durability, reliability, cost and performance of these products and to develop commercial volume manufacturing processes for our future products. Developing our technology may require substantial capital, and we cannot assure you that we will be able to generate or secure sufficient funding on acceptable terms to pursue commercialization plans on a larger scale. In addition, before any product can be released to market, it must be subjected to numerous field tests. These field tests may encounter problems and delays for a number of reasons, many of which are beyond our control. If these field tests reveal technical defects or reveal that our potential products do not meet performance goals, including useful life, reliability, and durability, our commercialization schedule could be delayed, and potential purchasers may decline to purchase future systems and products.

 

The commercialization of our battery systems also may depend on our ability to significantly reduce the costs of future systems and products. We cannot assure you that we will be able to sufficiently reduce the cost of these products versus existing technologies without reducing performance, reliability and durability, which would adversely affect consumers’ willingness to buy future products.

 

  

We cannot assure you that we will be able to successfully execute our business plan.

 

The execution of our business plan poses many challenges and is based on a number of assumptions. We cannot assure you that we will be able to execute our business plan. Narrowing the scope of our development activities may not accelerate product commercialization. If we experience significant cost overruns on any of our product development programs, or if our business plan is more costly than anticipated, certain research and development activities may be delayed or eliminated, resulting in changes or delays to our commercialization plans.

 

Potential fluctuations in our financial and business results makes forecasting difficult and may restrict our access to funding for our commercialization plan.

 

We expect our operating results to vary significantly from quarter to quarter and even year to year. As a result, quarter to quarter or year to year comparisons of these operating results are not expected to be meaningful. Due to our business’ stage of development, it is difficult to predict potential future revenues, if any, or results of operations accurately. It is likely that in one or more future quarters our operating results will fall below the expectations of investors or securities analysts, if any, who follow our Company. In addition, investors or security analysts may misunderstand our business decisions or have expectations that are inconsistent with our business plan. This may result in our business activities not meeting their expectations. Not meeting investor or security analyst expectations may materially and adversely impact the trading price of our common shares, and increase the cost and restrict our ability to secure required funding to pursue our commercialization plans.

 

A mass market for our products may never develop or may take longer to develop than we anticipate.

 

We do not know whether end-users will want to use our products. The development of a mass market for our battery system may be affected by many factors, some of which are beyond our control, including the emergence of newer, more competitive technologies and products, the future cost of raw materials used by our systems, regulatory requirements, consumer perceptions of the safety of any developed products and consumer reluctance to buy a new product.

 

If a mass market fails to develop or develops more slowly than anticipated, we may be unable to recover the losses it will have incurred in the development of our current and potential future products and may never achieve profitability. In addition, we cannot guarantee that we will be able to develop, manufacture or market any products if sales levels do not support the continuation of those products.

 

Regulatory changes could hurt the market for our products.

 

Changes in existing government regulations and the emergence of new regulations with respect to our products may hurt the market for our future products. Environmental laws and regulations in the U.S. and other countries have driven interest in alternate energy systems. We cannot guarantee that these laws and policies will not change. Changes in these laws and other laws and policies or the failure of these laws and policies to become more widespread could result in consumers abandoning their interest in our products in favor of alternative technologies. In addition, as alternative energy products are introduced into the market, the governments in countries we intend to market our products may impose burdensome requirements and restrictions on the use of these technologies that could reduce or eliminate demand for some or all of our potential products.

 

If we fail to protect our intellectual property rights, competitors may be able to use our technology, which could weaken our competitive position, eliminate the potential for future revenue and increase costs.

 

We believe that our long-term success will depend to a large degree on our ability to protect the proprietary technology that we have developed or any other technology that we may develop or acquire in the future. Although we intend to aggressively pursue anyone we reasonably believe is infringing upon our intellectual property rights, initiating and maintaining suits against third parties that may infringe upon those intellectual property rights will require substantial financial resources. In addition, significant financial resources could be required to defend against any suits brought against us claiming our infringement of others’ intellectual property rights. We may not have the financial resources to bring or defend such suits, and if such suits emerge, we may not prevail. Regardless of our success in any such actions, we could incur significant expenses in connection with such suits.

 

  

Failure to protect any intellectual property rights could seriously harm our business and prospects because we believe that developing new systems and products that are unique to us is critical to our success. We will rely on patent, trade secret, trademark and copyright law to protect our intellectual property. However, some of the intellectual property may not be covered by any patent or patent application, and certain patents will eventually expire. We cannot assure that any present or future issued patents will protect the technology. Moreover, our patent position is subject to complex factual and legal issues that may give rise to uncertainty as to the validity, scope and enforceability of a particular patent. Accordingly, there is no assurance that:

 

●	any of the patents or patent applications developed, acquired or licensed by us will not be invalidated, circumvented, challenged, or rendered unenforceable; or
●	any potential future patent applications will be issued with the breadth of claim coverage sought by us, if issued at all.

 

In addition, effective patent, trademark, copyright and trade secret protection may be unavailable, limited or not applied for in certain countries.

 

We may also seek to protect any proprietary intellectual property, including intellectual property that may not be patented or patentable, in part by confidentiality agreements and, if applicable, inventors’ rights agreements with strategic partners and employees. We can provide no assurance that these agreements will not be breached, that we will have adequate remedies for any breach or that such persons or institutions will not assert rights to intellectual property arising out of these relationships.

 

Future intellectual property may be acquired without typical representations and warranties. If necessary or desirable, we may seek further licenses under the patents or other intellectual property rights of others. However, we can give no assurances that we will obtain such licenses or that the terms of any offered licenses will be acceptable to us. The failure to obtain a license from a third party for intellectual property we use could cause us to incur substantial liabilities and to suspend the development, manufacture or shipment of products or our use of processes requiring the use of such intellectual property.

 

We may be involved in intellectual property litigation that causes us to incur significant expenses or prevents us from selling any developed products.

 

We may become subject to lawsuits in which it is alleged that we have infringed the intellectual property rights of others or commence lawsuits against others who we believe are infringing upon our rights. Involvement in intellectual property litigation could result in significant expense, adversely affecting the development of the challenged product or intellectual property and diverting the efforts of our technical and management personnel, whether or not such litigation is resolved in its favor. In the event of an adverse outcome as a defendant in any such litigation, we may, among other things, be required to:

 

●	pay substantial damages;
●	cease the development, manufacture, use, sale or importation of any developed products that infringe upon other patented intellectual property;
●	expend significant resources to develop or acquire non-infringing intellectual property;
●	discontinue processes incorporating infringing technology; or
●	obtain licenses to the infringing intellectual property.

 

We can provide no assurance that we would be successful in such development or acquisition, or that such licenses would be available upon reasonable terms. Any such development, acquisition or license could require the expenditure of substantial time and other resources and could have a material adverse effect on our business and financial results.

 

We will face significant competition.

 

As alternative energy technologies have the potential to replace existing power products, competition for those products will come from current power technologies, from improvements to current power technologies, and from new alternative power technologies, including other types of alternative energy technologies. Each of our target markets is currently serviced by existing manufacturers with existing customers and suppliers. These manufacturers use proven and widely accepted technologies.

 

  

Additionally, there are competitors working on developing other technologies related to our system, such as advanced lithium-ion batteries and battery/fuel cell hybrids in each of our targeted markets. Some of these technologies are as capable of fulfilling existing and proposed regulatory requirements as our technology.

 

There are many different individuals, institutions and companies across the United States, Canada, Europe and Japan, including corporations, national laboratories and universities that are actively engaged in the development and manufacture of alternative energy technologies. Each of these competitors has the potential to capture market share in any of our future target markets.

 

Many of these competitors have substantial financial resources, customer bases, strategic alliances, manufacturing, marketing and sales capabilities, and businesses or other resources which give them significant competitive advantages over our company.

 

The loss of the services of certain key employees, or the failure to attract additional key individuals, would materially adversely affect our business.

 

Our success will depend on the continued services of certain technology development and marketing personnel. In addition, our success depends in large part on our ability in the future to attract and retain key management, engineering, scientific, manufacturing and operating personnel. Recruiting personnel for the alternative energy industries is highly competitive. We cannot guarantee that we will be able to attract and retain qualified executive, managerial and technical personnel needed for the development of potential products business. Our failure to attract or retain qualified personnel could have a material adverse effect on our business. Liquidity issues, discussed earlier, could severely impact our ability to attract qualified key personnel or retain existing personnel.

 

New legislation, including the Sarbanes-Oxley Act of 2002, may make it more difficult for us to retain or attract officers and directors.

 

The Sarbanes-Oxley Act of 2002 was enacted in response to public concerns regarding corporate accountability in connection with recent accounting scandals. The stated goals of the Sarbanes-Oxley Act of 2002 are to increase corporate responsibility, to provide for enhanced penalties for accounting and auditing improprieties at publicly traded companies, and to protect investors by improving the accuracy and reliability of corporate disclosures pursuant to the securities laws. The Sarbanes-Oxley Act of 2002 generally applies to all companies that file or are required to file periodic reports with the SEC, under the Securities Exchange Act of 1934. Upon becoming a public company, we will be required to comply with the Sarbanes-Oxley Act of 2002. The enactment of the Sarbanes-Oxley Act of 2002 has resulted in a series of rules and regulations by the SEC that increase responsibilities and liabilities of directors and executive officers. The perceived increased personal risk associated with these recent changes may deter qualified individuals from accepting these roles. As a result, it may be more difficult for us to attract and retain qualified persons to serve on our board of directors or as executive officers. We continue to evaluate and monitor developments with respect to these rules, and we cannot predict or estimate the amount of additional costs we may incur or the timing of such costs.

 

Risks Associated with our Financial Condition

 

Because our auditor has issued a going concern opinion regarding our company, there is an increased risk associated with an investment in our company.

 

We have incurred cumulative net losses of $5,215,735 since July 27, 2007. We have not attained profitable operations. As of March 31, 2015 we had cash in the amount of $99,575. Our future is dependent upon our ability to obtain financing or upon future profitable operations. We reserve the right to seek additional funds through private placements of our common stock and/or through debt financing. Our ability to raise additional financing is unknown. We do not have any formal commitments or arrangements for the advancement or loan of funds. For these reasons, our auditors stated in their report to our financial statements for the year ended December 31, 2014 that they have substantial doubt we will be able to continue as a going concern. As a result, there is an increased risk that you could lose the entire amount of your investment in our company.

 

  

Risks Related to Our Securities

 

If a market for our common stock does not develop, shareholders may be unable to sell their shares.

 

A market for our common stock may never develop. We are listed for trading on the OTC Bulletin Board but have limited trading. A public market may not materialize. If a public market for our common stock does not develop, investors may not be able to sell the shares of our common stock that they have purchased and may lose all of their investment.

 

If we issue shares of preferred stock with superior rights than the common stock, it could result in the decrease the value of our common stock and delay or prevent a change in control of us.

 

Our board of directors is authorized to issue up to 10,000,000 shares of preferred stock. Our board of directors has the power to establish the dividend rates, liquidation preferences, voting rights, redemption and conversion terms and privileges with respect to any series of preferred stock. The issuance of any shares of preferred stock having rights superior to those of the common stock may result in a decrease in the value or market price of the common stock. Holders of preferred stock may have the right to receive dividends, certain preferences in liquidation and conversion rights. The issuance of preferred stock could, under certain circumstances, have the effect of delaying, deferring or preventing a change in control of us without further vote or action by the stockholders and may adversely affect the voting and other rights of the holders of common stock.

 

If a public market for our common stock develops, short selling could increase the volatility of our stock price.

 

Short selling occurs when a person sells shares of stock which the person does not yet own and promises to buy stock in the future to cover the sale. The general objective of the person selling the shares short is to make a profit by buying the shares later, at a lower price, to cover the sale. Significant amounts of short selling, or the perception that a significant amount of short sales could occur, could depress the market price of our common stock. In contrast, purchases to cover a short position may have the effect of preventing or retarding a decline in the market price of our common stock, and together with the imposition of the penalty bid, may stabilize, maintain or otherwise affect the market price of our common stock. As a result, the price of our common stock may be higher than the price that otherwise might exist in the open market. If these activities are commenced, they may be discontinued at any time. These transactions may be effected on over-the-counter bulletin board or any other available markets or exchanges. Such short selling, if it were to occur, could impact the value of our stock in an extreme and volatile manner to the detriment of our shareholders.

 

Because we do not expect to pay dividends for the foreseeable future, investors seeking cash dividends should not purchase our common stock.

 

We have never declared or paid any cash dividends on our common stock. We currently intend to retain future earnings, if any, to finance the expansion of our business. As a result, we do not anticipate paying any cash dividends in the foreseeable future. Our payment of any future dividends will be at the discretion of our board of directors after taking into account various factors, including, but not limited to, our financial condition, operating results, cash needs, growth plans and the terms of any credit agreements that we may be a party to at the time. Accordingly, investors must rely on sales of their own common stock after price appreciation, which may never occur, as the only way to realize their investment. Investors seeking cash dividends should not purchase our common stock.

 

Because we will be subject to the “Penny Stock” rules, the level of trading activity in our stock may be limited.

 

  

Broker-dealer practices in connection with transactions in “penny stocks” are regulated by penny stock rules adopted by the Securities and Exchange Commission. Penny stocks generally are equity securities with a price of less than $5.00 (other than securities registered on some national securities exchanges or quoted on NASDAQ). The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and, if the broker-dealer is the sole market maker, the broker-dealer must disclose this fact and the broker-dealer’s presumed control over the market, and monthly account statements showing the market value of each penny stock held in the customer’s account. In addition, broker-dealers who sell these securities to persons other than established customers and “accredited investors” must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. Consequently, these requirements may have the effect of reducing the level of trading activity, if any, in the secondary market for a security subject to the penny stock rules, and investors in our common stock may find it difficult to sell their shares.

 

We will be required to remain current in our filings with the SEC and our securities will not be eligible for quotation on the over-the-counter bulletin board if we are not current in our filings with the SEC.

 

In the event that our shares are quoted on the over-the-counter bulletin board, we will be required order to remain current in our filings with the SEC in order for shares of our common stock to be eligible for quotation on the over-the-counter bulletin board. In the event that we become delinquent in our required filings with the SEC, quotation of our common stock will be terminated following a 30 day grace period if we do not make our required filing during that time. If our shares are not eligible for quotation on the over-the-counter bulletin board, investors in our common stock may find it difficult to sell their shares.

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

 

Not applicable.

 

ITEM 4. CONTROLS AND PROCEDURES.

 

Disclosure Controls and Procedures

 

As required by paragraph (b) of Rules 13a-15 or 15d-15 under the Securities Exchange Act of 1934, our management, with the participation of our principal executive officer and principal financial officer, evaluated our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on this evaluation, management concluded that as of the end of the period covered by this Quarterly Report on Form 10-Q, these disclosure controls and procedures were ineffective. The ineffectiveness of our disclosure controls and procedures was due to material weaknesses identified in our internal control over financial reporting, as described in our annual report on Form 10-K for the period ended December 31, 2014.

 

Because of the inherent limitations in all control systems, our management believes that no evaluation of controls can provide absolute assurance that all control issues, if any, within our company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake.

 

Changes in Internal Control over Financial Reporting

 

There were no changes in our internal control over financial reporting during the fiscal quarter ended March 31, 2014, that have materially affected, or are reasonably likely to materially affect our internal control over financial reporting.

 

  

PART II - OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS.

 

We know of no material pending legal proceedings to which our company is a party or of which any of our properties is the subject. In addition, we do not know of any such proceedings contemplated by any governmental authorities.

 

We know of no material proceedings in which any of our directors, officers or affiliates, or any registered or beneficial stockholder is a party adverse to our company or has a material interest adverse to our company.

 

ITEM 1A. RISK FACTORS.

 

Smaller reporting companies are not required to provide the information required by this item.

 

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

 

Since the beginning of the fiscal interim period ended September 30, 2014, we have not sold any equity securities that were not registered under the Securities Act of 1933 that were not previously reported in an annual report on Form 10-K, a quarterly report on Form 10-Q or a current report on Form 8-K.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

None.

 

ITEM 4. MINE SAFETY DISCLOSURES.

 

Not applicable.

 

ITEM 5. OTHER INFORMATION.

 

On July 21, 2014, Raymond Madick resigned as Chief Sales Officer and a director of our company due to other increased business commitments. Mr. Madick’ resignation was not as a result of a disagreement with our Company on any matter relating to our operations, policies or practices.

 

On September 2, 2014, Vincent Palmieri resigned as Chief Executive Officer due to differences in management philosophies.

 

On September 2, 2014, and February 25, 2015 the Company entered into loan agreements with JMJ Financial to repay $55,556.00 which consisted of a $50,000.00 cash advance and a $5,556.00 loan processing fee and $30,000 plus a loan origination fee of $7,333. As a condition of the loan the Company was required to reserve 135,000,000 shares of its common stock.

 

  

ITEM 6. EXHIBITS.

 

Exhibit Number		Description of Exhibit
(3)		Articles of Incorporation and Bylaws
3.1		Articles of Incorporation (incorporated by reference from our Registration Statement on Form SB-2 filed on September 18, 2007)
3.2		Certificate of Change dated effective August 12, 2013 (incorporated by reference from our Current Report on Form 8-K filed on August 16, 2013)
3.3		Bylaws (incorporated by reference from our Registration Statement on Form SB-2 filed on September 18, 2007)
(5)		Departure of Directors or Certain Officers
5.1		Departure of Raymond Madick on July 21, 2014 (incorporated by reference from our Current Report on Form 8-K filed on July 22, 2014)
5.2		Departure of Vincent Palmieri on September 2, 2014 as its CEO. (incorporated by reference from our Current Report on Form 8-K filed on September 19, 2014)
5.3		Departure of Vincent Palmieri on September 29, 2014 as a board member. (incorporated by reference from our Current Report on Form 8-K filed on September 30, 2014)
(10)		Material Contracts
10.1		Lease Agreement dated April 1, 2014 (incorporated by reference from our Current Report on Form 8-K filed on April 4, 2014)
10.2		Sale of exempt non-affiliate unregistered equities dated May 20, 2014 (incorporated by reference from our Current Report on Form 8-K filed on May 20, 2014)
10.3		Debt financing secured by 135,000,000 shares on September 2, 2014 (incorporated by reference from our Current Report on Form 8-K filed on September 8, 2014)
(21)		Subsidiaries
21.1		None
(31)		Rule 13a-14 Certifications
31.1*		Section 302 Certification under Sarbanes-Oxley Act of 2002 of Leonard M. Caprino
(32)		Section 1350 Certifications
32.1*		Section 906 Certification under Sarbanes-Oxley Act of 2002 of Leonard M. Caprino

 

*Filed herewith

 

 

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.

 

SOLARIS POWER CELLS, INC.
/s/ Leonard M. Caprino
Leonard M. Caprino
Chief Executive Officer
(Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)
Date: May 21, 2015