Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | Jun. 23, 2020 | |
Cover [Abstract] | ||
Entity Registrant Name | QS Energy, Inc. | |
Entity Central Index Key | 0001103795 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2020 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 320,653,000 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2020 | |
Entity Small Business | true | |
Entity Emerging Growth | false | |
Entity Interactive Data Current | Yes | |
Entity Incorporation State Country Code | NV | |
Entity File Number | 000-29185 | |
Entity Shell Company | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash | $ 274,000 | $ 479,000 |
Prepaid expenses and other current assets | 55,000 | 96,000 |
Total current assets | 329,000 | 575,000 |
Property and equipment, net of accumulated depreciation of $82,000 and $80,000 at March 31, 2020 and December 31, 2019, respectively | 21,000 | 23,000 |
Other assets | 2,000 | 2,000 |
Total assets | 352,000 | 600,000 |
Current liabilities: | ||
Accounts payable-license agreements | 1,314,000 | 1,255,000 |
Accounts payable and accrued expenses | 649,000 | 557,000 |
Accrued expenses and accounts payable-related parties | 5,000 | 7,000 |
Convertible debentures, net of discounts of $86,000 and $153,000 at March 31, 2020 and December 31, 2019, respectively | 983,000 | 1,050,000 |
Total current liabilities | 2,951,000 | 2,869,000 |
Commitments and contingencies | ||
Stockholders' deficit | ||
Common stock, $.001 par value: 500,000,000 shares authorized, 314,972,209 and 310,111,536 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively | 314,972 | 310,111 |
Additional paid-in capital | 116,641,028 | 116,209,889 |
Accumulated deficit | (119,555,000) | (118,789,000) |
Total stockholders' deficit | (2,599,000) | (2,269,000) |
Total liabilities and stockholders' deficit | $ 352,000 | $ 600,000 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Accumulated depreciation | $ 82,000 | $ 80,000 |
Discounts on convertible debentures | $ 86,000 | $ 153,000 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 314,972,209 | 310,111,536 |
Common stock, shares outstanding | 314,972,209 | 310,111,536 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Statement [Abstract] | ||
Revenues | $ 0 | $ 0 |
Costs and Expenses | ||
Operating expenses | 532,000 | 478,000 |
Research and development expenses | 70,000 | 151,000 |
Loss from operations | (602,000) | (629,000) |
Other expense | ||
Interest and financing expense | (164,000) | (1,653,000) |
Net loss | $ (766,000) | $ (2,282,000) |
Net loss per common share, basic and diluted | $ 0 | $ (0.01) |
Weighted average common shares outstanding, basic and diluted | 311,063,681 | 265,880,777 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT (UNAUDITED) - USD ($) | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
Beginning balance, shares at Dec. 31, 2018 | 256,123,515 | |||
Beginning balance, value at Dec. 31, 2018 | $ 256,123 | $ 111,429,877 | $ (113,168,000) | $ (1,482,000) |
Common stock issued on exercise of warrants and options, shares | 1,962,153 | |||
Common stock issued on exercise of warrants and options, value | $ 1,962 | 170,038 | 172,000 | |
Fair value of common stock issued on conversion of notes payable, shares | 36,719,820 | |||
Fair value of common stock issued on conversion of notes payable, value | $ 36,720,000 | 1,799,280 | 1,836,000 | |
Fair value of warrants and beneficial conversion feature of issued convertible notes | 668,000 | 668,000 | ||
Fair value of options and warrants issued as compensation | 99,000 | 99,000 | ||
Net loss | (2,282,000) | (2,282,000) | ||
Ending balance, shares at Mar. 31, 2019 | 294,805,488 | |||
Ending balance, value at Mar. 31, 2019 | $ 294,805 | 114,166,195 | (115,450,000) | (989,000) |
Beginning balance, shares at Dec. 31, 2019 | 310,111,536 | |||
Beginning balance, value at Dec. 31, 2019 | $ 310,111 | 116,209,889 | (118,789,000) | (2,269,000) |
Common stock issued on exercise of warrants and options, shares | 1,215,000 | |||
Common stock issued on exercise of warrants and options, value | $ 1,215 | 59,785 | 61,000 | |
Fair value of common stock issued on conversion of notes payable, shares | 3,645,673 | |||
Fair value of common stock issued on conversion of notes payable, value | $ 3,646 | 215,354 | 219,000 | |
Fair value of warrants and beneficial conversion feature of issued convertible notes | 35,000 | 35,000 | ||
Fair value of options and warrants issued as compensation | 121,000 | 121,000 | ||
Net loss | (766,000) | (766,000) | ||
Ending balance, shares at Mar. 31, 2020 | 314,972,209 | |||
Ending balance, value at Mar. 31, 2020 | $ 314,972 | $ 116,641,028 | $ (119,555,000) | $ (2,599,000) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash flows from operating activities | ||
Net Loss | $ (766,000) | $ (2,282,000) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock based compensation expense | 121,000 | 99,000 |
Amortization of debt discount and of interest expense | 152,000 | 1,632,000 |
Depreciation and amortization | 2,000 | 1,000 |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other assets | 41,000 | (457,000) |
Accounts payable and accrued expenses | 92,000 | (100,000) |
Accounts payable - license agreements | 59,000 | 68,000 |
Accounts payable and accrued expenses - related parties | (2,000) | (30,000) |
Net cash used in operating activities | (301,000) | (1,069,000) |
Cash flows from financing activities | ||
Net proceeds from issuance of convertible notes and warrants | 35,000 | 668,000 |
Net proceeds from exercise of warrants and options | 61,000 | 172,000 |
Net cash provided by financing activities | 96,000 | 840,000 |
Net increase (decrease) in cash | (205,000) | (229,000) |
Cash, beginning of period | 479,000 | 1,153,000 |
Cash, end of period | 274,000 | 924,000 |
Supplemental disclosures of cash flow information | ||
Cash paid during the year for: Interest | 0 | 0 |
Cash paid during the year for: Income taxes | 0 | 0 |
Non-cash investing and financing activities | ||
Conversion of convertible debentures to common stock | 219,000 | 1,836,000 |
Fair value of warrants and beneficial conversion feature associated with issued convertible notes | $ 35,000 | $ 668,000 |
1. Description of Business
1. Description of Business | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | 1. Description of Business QS Energy, Inc. (“QS Energy”, “Company”) was incorporated on February 18, 1998, as a Nevada Corporation under the name Mandalay Capital Corporation. The Company changed its name to Save the World Air, Inc. on February 11, 1999. Effective August 11, 2015, the Company changed its name to QS Energy, Inc. The Company’s common stock is quoted under the symbol “QSEP” on the Over-the-Counter Bulletin Board. More information including the Company’s fact sheet, logos and media articles are available at our corporate website, www.qsenergy.com. QS Energy develops and commercializes energy efficiency technologies that assist in meeting increasing global energy demands, improving the economics of oil extraction and transport, and reducing greenhouse gas emissions. The Company's intellectual properties include a portfolio of domestic and international patents and patents pending, a substantial portion of which have been developed in conjunction with and exclusively licensed from Temple University of Philadelphia, PA (“Temple”). QS Energy's primary technology is called Applied Oil Technology (AOT), a commercial-grade crude oil pipeline transportation flow-assurance product. Engineered specifically to reduce pipeline pressure loss, increase pipeline flow rate and capacity, and reduce shippers’ reliance on diluents and drag reducing agents to meet pipeline maximum viscosity requirements, AOT is a 100% solid-state system that reduces crude oil viscosity by applying a high intensity electrical field to crude oil feedstock while in transit. The AOT product is seeking to transition from the research and development stage to initial production for continued testing in advance of our goal of seeking acceptance and adoption by the midstream pipeline marketplace. Basis of Presentation The accompanying condensed consolidated financial statements are unaudited. These unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020 filed with the SEC. The condensed consolidated balance sheet as of December 31, 2019 included herein was derived from the audited consolidated financial statements as of that date, but does not include all disclosures, including notes, required by GAAP. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary to fairly present the Company's financial position and results of operations for the interim periods reflected. Except as noted, all adjustments contained herein are of a normal recurring nature. Results of operations for the fiscal periods presented herein are not necessarily indicative of fiscal year-end results. |
2. Summary of Significant Accou
2. Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Consolidation Policy The accompanying consolidated financial statements of QS Energy Inc. include the accounts of QS Energy Inc. (the Parent) and its wholly owned subsidiaries, QS Energy Pool, Inc. and STWA Asia Pte. Limited. Intercompany transactions and balances have been eliminated in consolidation. Going Concern The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying consolidated financial statements, during the three-months ended March 31, 2020, the Company incurred a net loss of $766,000, used cash in operations of $301,000 and had a stockholders’ deficit of $2,599,000 as of that date. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to raise additional funds and implement its business plan. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. In addition, the Company's independent registered public accounting firm, in its report on the Company's December 31, 2019 financial statements, has raised substantial doubt about the Company's ability to continue as a going concern. At March 31, 2020, the Company had cash on hand in the amount of $274,000. Management estimates that the current funds on hand will be sufficient to continue operations through July 2020. Management is currently seeking additional funds, primarily through the issuance of debt and equity securities for cash to operate our business, including without limitation the expenses it will incur in connection with the license agreements with Temple; costs associated with product development and commercialization of the AOT technologies; costs to manufacture and ship the products; costs to design and implement an effective system of internal controls and disclosure controls and procedures; costs of maintaining our status as a public company by filing periodic reports with the SEC and costs required to protect our intellectual property. In addition, as discussed below, the Company has substantial contractual commitments, including without limitation salaries to our executive officers pursuant to employment agreements, certain payments to a former officer and consulting fees, during the remainder of 2020 and beyond. No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, it may contain undue restrictions on our operations, in the case of debt financing or cause substantial dilution for our stockholders in case of equity financing. Basic and Diluted Income (loss) per share Our computation of earnings per share (“EPS”) includes basic and diluted EPS. Basic EPS is measured as the income (loss) available to common stockholders divided by the weighted average common shares outstanding for the period. Diluted income (loss) per share reflects the potential dilution, using the treasury stock method, that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the income (loss) of the Company as if they had been converted at the beginning of the periods presented, or issuance date, if later. In computing diluted income (loss) per share, the treasury stock method assumes that outstanding options and warrants are exercised and the proceeds are used to purchase common stock at the average market price during the period. Options and warrants may have a dilutive effect under the treasury stock method only when the average market price of the common stock during the period exceeds the exercise price of the options and warrants. Potential common shares that have an antidilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. Income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the respective periods. Basic and diluted (loss) per common share is the same for periods in which the Company reported an operating loss because all warrants and stock options outstanding are anti-dilutive. At March 31, 2020 and 2019, we excluded the outstanding securities summarized below, which entitle the holders thereof to acquire shares of common stock as their effect would have been anti-dilutive. March 31, March 31, Options 42,390,601 39,711,022 Warrants 6,749,883 26,102,430 Common stock issuable upon conversion of notes payable 3,645,673 11,058,950 Total 52,786,157 76,872,402 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 of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include those related to accruals for potential liabilities, assumptions used in valuing equity instruments issued for financing and services and realization of deferred tax assets, among others. Actual results could differ from those estimates. Research and Development Costs Research and development costs are expensed as incurred, and consist primarily of fees paid to consultants and outside service providers, and other expenses relating to the acquisition, design, development and testing of the Company’s products. Certain research and development activities are incurred under contract. In those instances, research and development costs are charged to operations ratably over the life of the underlying contracts, unless the achievement of milestones, the completion of contracted work, or other information indicates that a different expensing schedule is more appropriate. Payments made pursuant to research and development contracts are initially recorded as advances on research and development contract services in the Company’s consolidated balance sheet and then charged to research and development costs in the Company’s consolidated statement of operations as those contract services are performed. In January 2019, the Company paid $500,000 as a deposit under terms of a work order for work to be performed by a pipeline operator. During the twelve months ended December 31, 2019, the Company amortized $483,000 of such amount as a research and development cost based on the progress of work performed as required by the contract, and reflected the $17,000 remaining $17,000 of such amount as a research and development cost based on the progress of work performed as required by the contract, and has reflected the $25,000 remaining For the three-month periods ended March 31, 2020 and 2019 research and development costs were $70,000 and $151,000, respectively. Patent Costs Patent costs consist of patent-related legal and filing fees. Due to the uncertainty associated with the successful development of our AOT product, all patent costs are expensed as incurred. During the three-month periods ended March 31, 2020 and 2019, patent costs were $6,000 and $7,000, respectively, and were included as part of operating expenses in the accompanying consolidated statements of operations. Recent Accounting Pronouncements Recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company's present or future consolidated financial statement presentation or disclosures. |
3. Accrued Expenses and Account
3. Accrued Expenses and Accounts Payable - Related Parties | 3 Months Ended |
Mar. 31, 2020 | |
Payables and Accruals [Abstract] | |
Accrued Expenses and Accounts Payable - Related Parties | 3. Accrued Expenses and Accounts Payable Accrued Expenses As of March 31, 2020 and December 31, 2019, the Company owed $197,000 and $207,000, respectively, pursuant to a separation agreement with a former executive officer effective April 1, 2017 as amended by letter agreements dated effective August 16, 2018 and March 31, 2019 which included as part of Accrued expenses and accounts payable on the accompanying balance sheet. The amount is to be repaid at an amount of $10,000 per month. During the three months ended March 31, 2020 the Company made $10,000 in payments reducing the outstanding balance to $197,000. Accrued Expenses and Accounts Payable – Related Parties Accrued expense – related parties consists of accrued current salaries of officers and fees due to members of the Board of Directors. As of March 31, 2020, and December 31, 2019, accrued expenses and accounts payable to related parties amounted to $5,000 and $7,000, respectively. |
4. Property and Equipment
4. Property and Equipment | 3 Months Ended |
Mar. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 4. Property and Equipment At March 31, 2020 and December 31, 2019, property and equipment consists of the following: March 31, December 31, Office equipment $ 36,000 $ 36,000 Furniture and fixtures 5,000 5,000 Testing Equipment 37,000 37,000 Leasehold Improvements 25,000 25,000 Subtotal 103,000 103,000 Less accumulated depreciation (82,000 ) (80,000 ) Total $ 21,000 $ 23,000 Depreciation expense for the three-month periods ended March 31, 2020 and 2019 was $2,000 and $1,000, respectively. |
5. Convertible Notes
5. Convertible Notes | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Convertible Notes | 5. Convertible Notes March 31, 2020 (unaudited) December 31, 2019 Balance due on convertible notes $ 854,000 $ 1,019,000 Accrued interest 215,000 184,000 Subtotal 1,069,000 1,203,000 Convertible note discount (86,000 ) (153,000 ) Balance on convertible notes, net of note discounts $ 983,000 $ 1,050,000 The Company issues convertible notes in exchange for cash. The notes typically do not bear any interest; however, there is an implied interest rate of 10% since the notes are typically issued at a 10% discount. The notes are unsecured, and usually mature twelve months from issuance. The notes are convertible at the option of the note holder into the Company’s common stock at a conversion price stipulated in the conversion agreement. In addition, the note holders receive warrants to purchase shares of common stock that are fully vested and will expire in one year from the date of issuance. As a result, the Company records a note discount to account for the relative fair value of the warrants, the notes’ beneficial conversion feature or BCF, and original issue discount of 10% (OID). The note discounts are amortized over the term of the notes or amortized in full upon its conversion to common stock. As of December 31, 2019, total outstanding notes payable amounted to $1,019,000 which are due through December 2019 and unamortized note discount of $153,000. During the three-month periods ended March 31, 2020, the Company issued similar convertible promissory notes in the aggregate of $39,000 for cash of $35,000 or a discount of $4,000. The notes do not bear any interest; however, the implied interest rate used was 10% since the notes were issued 10% less than its face value. The notes are unsecured, mature in twelve months from issuance and convertible at $0.035 per share. In addition, the Company also granted these note holders warrants to purchase 550,000 shares of the Company’ common stock. The warrants are fully vested, exercisable at $0.035 per share and will expire in one year. As a result, the Company recorded a note discount of $35,000 to account for the relative fair value of the warrants, the notes’ beneficial conversion feature (BCF), and original issue discount (OID). The note discounts are being amortized over the term of the note or amortized in full upon the conversion to common stock. During the three-month period ended March 31, 2020 notes payable of $219,000 were converted into 3,645,673 shares of common stock. As of March 31, 2020, total outstanding notes payable amounted to $854,000, accrued interest of $215,000 and unamortized note discount of $86,000 for a net balance of $983,000. A total of sixteen notes in the aggregate of $600,000 have reached maturity and are past due. |
6. Research and Development
6. Research and Development | 3 Months Ended |
Mar. 31, 2020 | |
Research and Development [Abstract] | |
Research and Development | 6. Research and Development The Company constructs, develops and tests the AOT technologies with internal resources and through the assistance of various third-party entities. Costs incurred and expensed include fees such as license fees, purchase of test equipment, pipeline pumping equipment, crude oil tank batteries, viscometers, SCADA systems, computer equipment, payroll and other related equipment and various logistical expenses for the purposes of evaluating and testing the Company’s AOT prototypes. Costs incurred for research and development are expensed as incurred. Purchased materials that do not have an alternative future use are also expensed. Furthermore, costs incurred in the construction of prototypes with no certainty of any alternative future use and established commercial uses are also expensed. For the three-month periods ended March 31, 2020 and 2019, our research and development expenses were $70,000 and $151,000, respectively. AOT Product Development and Testing The Company constructs, develops and tests the AOT technologies with internal resources and through the assistance of various third-party entities. Costs incurred and expensed include fees such as testing fees, purchase of test equipment, pipeline pumping equipment, crude oil tank batteries, viscometers, SCADA systems, computer equipment, payroll and other related equipment and various logistical expenses for the purposes of evaluating and testing the Company’s AOT prototypes. During the year ended December 31, 2019, the Company incurred costs related to a work order for work to be performed by a pipeline operator under which the Company paid a $500,000 deposit in advance of work to be performed. During the period ended December 31, 2019, the Company amortized $483,000 of such amount as a research and development cost based on the progress of work performed as required by the contract, and reflected the $17,000 remaining amount on deposit as Prepaid expenses and other current assets in the accompanying consolidated balance sheet as of December 31, 2019. During the period ended March 31, 2020, the Company amortized the remaining $17,000 of such amount as a research and development cost based on the progress of work performed as required by the contract. During the period ended March 31, 2020, the work order was increased by $25,000 and the Company paid an additional $25,000 deposit in advance of work to be performed, and has reflected the $25,000 remaining amount on deposit as Prepaid expenses and other current assets in the accompanying consolidated balance sheet as of March 31, 2020. Temple University Licensing Agreements On August 1, 2011, the Company and Temple University (“Temple”) entered into two (2) Exclusive License Agreements (collectively, the “License Agreements”) relating to Temple’s patent applications, patents and technical information pertaining to technology associated with an electric and/or magnetic field assisted fuel injector system (the “First Temple License”), and to technology to reduce crude oil viscosity (the “Second Temple License”). The License Agreements are exclusive, and the territory licensed to the Company is worldwide and replace previously issued License Agreements. Pursuant to the two licensing agreements, the Company paid Temple a non-refundable license maintenance fee of $300,000 and agreed to pay (i) annual maintenance fees of $187,500; (ii) royalty fee ranging from 4% up to 7% from revenues generated from the licensing agreements; and (iii) 25% of all revenues generated from sub-licensees to secure or maintain the sub-license or option thereon. The term of the licenses commenced in August 2011 and will expire upon expiration of the patents. The agreements can also be terminated by either party upon notification under terms of the licensing agreements or if the Company ceases the development of the patent or fails to commercialize the patent rights. Total expenses recognized during each three-month period ended March 31, 2020 and 2019 pursuant to these two License Agreements amounted to $47,000 and has been reflected in Research and Development expenses on the accompanying consolidated statements of operations. In the three-month periods ended March 31, 2020 and 2019, the Company also recognized penalty interest on past-due balances of $12,000 and $21,000, respectively, which is included as part of interest and financing expense in the accompanying statements of operations. As of March 31, 2020 and December 31, 2019, total unpaid fees due to Temple pursuant to these agreements are $1,314,000 and $1,255,000, respectively, which are included as part of Accounts Payable – license agreements in the accompanying consolidated balance sheets. With regards to the unpaid fees to Temple, a total of $135,000 are deferred until such time the Company achieves a revenue milestone of $835,000 or upon termination of the licensing agreements and the remaining $1,179,000 are deemed past due. The Company is currently in discussions with Temple to settle or cure the past due balance. No revenues were earned from the two License Agreements during the three-month periods ended March 31, 2020 and March 31,2019. |
7. Common Stock
7. Common Stock | 3 Months Ended |
Mar. 31, 2020 | |
Stockholders' Equity Note [Abstract] | |
Common Stock | 7. Common Stock During the three months ended March 31, 2020, the Company issued 4,860,673 shares of its common stock as follows: · The Company issued 3,645,673 shares of its common stock upon the conversion of $219,000 in convertible notes pursuant to the convertible notes conversion prices of $0.05 to $0.15 per share. · The Company issued 1,155,000 shares of its common stock upon the exercise of warrants for proceeds of $58,000 at exercise prices of $0.05 per share. · The Company issued 60,000 shares of its common stock upon the exercise of options for proceeds of $3,000 at exercise prices of $0.05 per share. |
8. Stock Options and Warrants
8. Stock Options and Warrants | 3 Months Ended |
Mar. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |
Stock Options and Warrants | 8. Stock Options and Warrants The Company periodically issues stock options and warrants to employees and non-employees in capital raising transactions, for services and for financing costs. Options vest and expire according to terms established at the grant date. Options Options vest according to the terms of the specific grant and expire from 2 to 10 years from date of grant. The weighted-average, remaining contractual life of employee and non-employee options outstanding at March 31, 2020 was 4.8 years. Stock option activity for the period January 1, 2020 up to March 31, 2020, was as follows: Options Weighted January 1, 2020 39,750,603 $ 0.20 Granted 2,699,998 $ 0.14 Exercised (60,000 ) $ 0.05 Forfeited – $ – March 31, 2020 42,390,601 $ 0.20 The weighted average exercise prices, remaining contractual lives for options granted, exercisable, and expected to vest as of March 31, 2020 were as follows: Outstanding Options Exercisable Options Option Exercise Price Per Share Shares Life (Years) Weighted Average Exercise Price Shares Weighted Average Exercise Price $0.05 - $0.24 20,855,551 7.6 $ 0.10 18,880,553 $ 0.10 $0.25 - $0.49 20,913,552 2.0 0.27 20,913,552 0.27 $0.50 - $0.99 471,052 4.1 0.85 471,052 0.85 $1.00 - $2.00 150,446 3.3 1.18 150,446 1.18 42,390,601 4.8 0.20 40,415,603 0.20 During the three-month period ending March 31, 2020, and pursuant to the Company’s Board Compensation policy approved by the Board June 19, 2015, the Company granted options to purchase 2,699,998 shares of common stock to members of the Company’s Board of Directors and an executive officer under terms of an employment agreement. The options are exercisable at $0.03 to $0.15 per share, vest monthly over a twelve-month period, and expire ten years from the date granted. Total fair value of these options at grant date was $338,000 using the Black-Scholes Option Pricing model with the following assumptions: life of 5.5 years; risk free interest rate of 1.6% to 1.7%; volatility of 128% to 138% and dividend yield of 0%. During the three-month periods ended March 31, 2020 and 2019, the Company recognized compensation costs based on the fair value of options that vested of $115,000 and $99,000 respectively. During the three-month periods ended March 31, 2020, a Board Member exercised an option to purchase 60,000 shares of common stock at an exercise price of $0.05 per share for a total exercise price of $3,000. At March 31, 2020, the Company’s closing stock price was $0.07 per share. The aggregate intrinsic value of the options outstanding at March 31, 2020 was $133,000. Future unamortized compensation expense on the unvested outstanding options at March 31, 2020 is approximately $245,000 to be recognized through December 2020. Warrants The following table summarizes certain information about the Company’s stock purchase warrants activity for the period starting January 1, 2020 up to March 31, 2020. Warrants Weighted Avg. January 1, 2020 13,065,084 $ 0.11 Granted 649,999 0.04 Exercised (1,155,000 ) 0.05 Cancelled (5,810,200 ) 0.05 March 31, 2020 6,749,883 $ 0.17 The weighted average exercise prices, remaining contractual lives for warrants granted, exercisable, and expected to vest as of March 31, 2020 were as follows: Outstanding Warrants Exercisable Warrants Warrant Exercise Price Per Share Shares Life Weighted Average Exercise Price Shares Weighted Average Exercise Price $0.05 - $0.24 4,679,883 0.7 $ 0.10 4,646,550 $ 0.11 $0.25 - $0.49 2,000,000 1.6 0.30 2,000,000 0.30 $0.50 - $1.00 70,000 4.1 0.80 70,000 0.80 6,749,883 1.0 0.17 6,716,550 0.17 In the three-month period ending March 31, 2020, pursuant to terms of convertible notes issued, the Company granted warrants to purchase 550,000 shares of common stock with an exercise price of $.05 per share, vesting immediately upon grant and expiring one year from the date of grant (see Note 5, above). In the three-month period ending March 31, 2020, the Company issued warrants to purchase 99,999 shares of common stock in exchange for services. The warrants are exercisable at a price of $0.04 to $0.14, vesting one month from the date of grant and expiring two years from the date of grant. Total fair value of these options at grant date was $7,000 using the Black-Scholes Option Pricing model with the following assumptions: life of 2 years; risk free interest rate of 0.4% to 1.5%; volatility of 163% to 173% and dividend yield of 0%. During the three-month periods ended March 31, 2020, the Company recognized compensation costs based on the fair value of warrants that vested of $7,000. During the three-month period ended March 31, 2020, warrants to acquire 1,155,000 shares of common stock were exercised resulting in net proceeds to the Company of $58,000. At March 31, 2020, the aggregate intrinsic value of the warrants outstanding was $20,000. |
9. Commitments and Contingencie
9. Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 9. Commitments and Contingencies There is no current or pending litigation of any significance with the exception of the matters that have arisen under, and are being handled in, the normal course of business. QS Energy is working to maintain normal operations during the current COVID-19 pandemic under social distancing and shelter-in-place guidelines as recommended or required by the CDC, federal, state and county government agencies. The Company has moved many operational functions to the cloud. Our employees can perform most vital functions remotely. Most day-to-day operations have been minimally impacted by COVID-19. It is unclear what impact COVID-19 may have on our supply chain, or on our ability to operate on-site at the demonstration project. The Company has experienced delays and cost overruns due to COVID-19 impacts on our supply chain. We have not been made aware of any COVID-19 restrictions at the demonstration site that would impact our ability to restart our demonstration testing. No assurances can be made that COVID-19 will not materially affect our supply chain, will not negatively affect access to the demonstration site, restrict operations at the demonstration site, or negatively impact our ability to fund continued operations. |
10. Subsequent Events
10. Subsequent Events | 3 Months Ended |
Mar. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | 10. Subsequent Events Unregistered Sales of Equity Securities From March 1, 2020, through June 23, 2020, the Company issued and sold to accredited US investors an aggregate of $230,000 Convertible Promissory Notes (the “Notes”) and warrants to purchase an aggregate of 2,735,238 shares of common stock (the “Warrants”). The Company received proceeds from the private placement of $209,000, which funds were used, and are being used, for general corporate purposes and working capital. The Notes are due twelve (12) months from their respective issuance dates (the “Maturity Date”). The Notes do not bear interest and were issued in the face amount equal to 110% of the purchasers’ commitments. The Notes are convertible into shares of the Company’s common stock at a rate of $0.035 per share. If the Notes are not paid in full by the Maturity Date, the balance remaining on the Maturity Date shall be increased by 10% and the Company shall be required to pay interest at a rate of 10% per annum thereon until all sums thereunder are paid in full. The Warrants are exercisable into shares of the Company’s common stock for a term of one (1) year at an exercise price of $0.035 per share. The Warrants also contain provisions that protect the holders against dilution by adjustment of the conversion price in certain events involving a reduction or increase in the Company’s shares. The offering was made to U.S. “accredited investors,” as the term is defined in Regulation D under the Securities Act of 1933, as amended (the “Securities Act”), and was made without general advertising or solicitation. The securities sold in the offering were not registered under the Securities Act, or the securities laws of any state, and were offered and sold in reliance on exemptions from registration including the exemption from registration afforded by Section 4(a)(2) of the Securities Act and Regulation S promulgated under the Securities Act, and corresponding provisions of state securities law, which, respectively, exempt transactions by an issuer not involving any public offering or transactions with non-U.S. Investors. Of these aggregate amounts, the Company received proceeds of $174,000 on the sale of $191,000 in Notes and Warrants to purchase 2,735,238 shares of common stock were purchased subsequent to the March 31, 2020 reporting date of this Form 10-Q. A copy of the offering is attached hereto as Exhibit 10.2. Conversion of Convertible Notes From April 1, 2020 up to June 26, 2020, Company issued 5,680,791 shares of common stock upon conversion of previously issued convertible notes in aggregate value of $235,000 Exercise of Warrants From April 1, 2020 up to June 26, 2020, the Company issued 1,045,000 shares of common stock upon the exercise of previously issued warrants for aggregate cash proceeds of $52,000 Cares Act Funding In June 2020, the Company (“Borrower”) entered into an unsecured promissory note with Cadence Bank (“Lender”) in the amount of $151,200 (“Note”). The Note is payable in 53 monthly consecutive principal and interest payments of $2,584.57 each, beginning January 2, 2021, with interest calculated on the unpaid principal balances using an interest rate of 1.000% per annum based on a year of 360 days. This estimated final payment is based on the assumption that all payments will be made exactly as scheduled; the actual final payment will be for all principal and accrued interest not yet paid, together with any other unpaid amounts under this Note. The Lender made this loan pursuant to the Paycheck Protection Program (the "PPP") created by Section 1102 of the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") and governed by the CARES Act, section 7(a)(36) of the Small Business Act, any rules or guidance that has been issued by the Small Business Administration implementing the PPP, or any other applicable Loan Program Requirements, as defined in 13 CFR 120.10, as amended from time to time (collectively "PPP Loan Program Requirements"). Notwithstanding anything to the contrary herein, Borrower (a) agrees that this Promissory Note shall be interpreted and construed to be consistent with the PPP Loan Program Requirements and (b) authorizes the Lender to unilaterally amend any provision to the Promissory Note to the extent required to comply with the PPP Loan Program Requirements. Borrower may apply to Lender for forgiveness of the amount due under terms of the Note. A copy of the Note is attached as Exhibit 10.1. |
2. Summary of Significant Acc_2
2. Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Consolidation Policy | Consolidation Policy The accompanying consolidated financial statements of QS Energy Inc. include the accounts of QS Energy Inc. (the Parent) and its wholly owned subsidiaries, QS Energy Pool, Inc. and STWA Asia Pte. Limited. Intercompany transactions and balances have been eliminated in consolidation. |
Going Concern | Going Concern The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying consolidated financial statements, during the three-months ended March 31, 2020, the Company incurred a net loss of $766,000, used cash in operations of $301,000 and had a stockholders’ deficit of $2,599,000 as of that date. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to raise additional funds and implement its business plan. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. In addition, the Company's independent registered public accounting firm, in its report on the Company's December 31, 2019 financial statements, has raised substantial doubt about the Company's ability to continue as a going concern. At March 31, 2020, the Company had cash on hand in the amount of $274,000. Management estimates that the current funds on hand will be sufficient to continue operations through July 2020. Management is currently seeking additional funds, primarily through the issuance of debt and equity securities for cash to operate our business, including without limitation the expenses it will incur in connection with the license agreements with Temple; costs associated with product development and commercialization of the AOT technologies; costs to manufacture and ship the products; costs to design and implement an effective system of internal controls and disclosure controls and procedures; costs of maintaining our status as a public company by filing periodic reports with the SEC and costs required to protect our intellectual property. In addition, as discussed below, the Company has substantial contractual commitments, including without limitation salaries to our executive officers pursuant to employment agreements, certain payments to a former officer and consulting fees, during the remainder of 2020 and beyond. No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, it may contain undue restrictions on our operations, in the case of debt financing or cause substantial dilution for our stockholders in case of equity financing. |
Basic and Diluted Income (Loss) per Share | Basic and Diluted Income (loss) per share Our computation of earnings per share (“EPS”) includes basic and diluted EPS. Basic EPS is measured as the income (loss) available to common stockholders divided by the weighted average common shares outstanding for the period. Diluted income (loss) per share reflects the potential dilution, using the treasury stock method, that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the income (loss) of the Company as if they had been converted at the beginning of the periods presented, or issuance date, if later. In computing diluted income (loss) per share, the treasury stock method assumes that outstanding options and warrants are exercised and the proceeds are used to purchase common stock at the average market price during the period. Options and warrants may have a dilutive effect under the treasury stock method only when the average market price of the common stock during the period exceeds the exercise price of the options and warrants. Potential common shares that have an antidilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. Income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the respective periods. Basic and diluted (loss) per common share is the same for periods in which the Company reported an operating loss because all warrants and stock options outstanding are anti-dilutive. At March 31, 2020 and 2019, we excluded the outstanding securities summarized below, which entitle the holders thereof to acquire shares of common stock as their effect would have been anti-dilutive. March 31, March 31, Options 42,390,601 39,711,022 Warrants 6,749,883 26,102,430 Common stock issuable upon conversion of notes payable 3,645,673 11,058,950 Total 52,786,157 76,872,402 |
Estimates | 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 of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include those related to accruals for potential liabilities, assumptions used in valuing equity instruments issued for financing and services and realization of deferred tax assets, among others. Actual results could differ from those estimates. |
Research and Development Costs | Research and Development Costs Research and development costs are expensed as incurred, and consist primarily of fees paid to consultants and outside service providers, and other expenses relating to the acquisition, design, development and testing of the Company’s products. Certain research and development activities are incurred under contract. In those instances, research and development costs are charged to operations ratably over the life of the underlying contracts, unless the achievement of milestones, the completion of contracted work, or other information indicates that a different expensing schedule is more appropriate. Payments made pursuant to research and development contracts are initially recorded as advances on research and development contract services in the Company’s consolidated balance sheet and then charged to research and development costs in the Company’s consolidated statement of operations as those contract services are performed. In January 2019, the Company paid $500,000 as a deposit under terms of a work order for work to be performed by a pipeline operator. During the twelve months ended December 31, 2019, the Company amortized $483,000 of such amount as a research and development cost based on the progress of work performed as required by the contract, and reflected the $17,000 remaining $17,000 of such amount as a research and development cost based on the progress of work performed as required by the contract, and has reflected the $25,000 remaining For the three-month periods ended March 31, 2020 and 2019 research and development costs were $70,000 and $151,000, respectively. |
Patent Costs | Patent Costs Patent costs consist of patent-related legal and filing fees. Due to the uncertainty associated with the successful development of our AOT product, all patent costs are expensed as incurred. During the three-month periods ended March 31, 2020 and 2019, patent costs were $6,000 and $7,000, respectively, and were included as part of operating expenses in the accompanying consolidated statements of operations. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company's present or future consolidated financial statement presentation or disclosures. |
2. Summary of Significant Acc_3
2. Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Antidilutive shares | March 31, March 31, Options 42,390,601 39,711,022 Warrants 6,749,883 26,102,430 Common stock issuable upon conversion of notes payable 3,645,673 11,058,950 Total 52,786,157 76,872,402 |
4. Property and Equipment (Tabl
4. Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and equipment | March 31, December 31, Office equipment $ 36,000 $ 36,000 Furniture and fixtures 5,000 5,000 Testing Equipment 37,000 37,000 Leasehold Improvements 25,000 25,000 Subtotal 103,000 103,000 Less accumulated depreciation (82,000 ) (80,000 ) Total $ 21,000 $ 23,000 |
5. Convertible Notes (Tables)
5. Convertible Notes (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Convertible Notes and Warrants | March 31, 2020 (unaudited) December 31, 2019 Balance due on convertible notes $ 854,000 $ 1,019,000 Accrued interest 215,000 184,000 Subtotal 1,069,000 1,203,000 Convertible note discount (86,000 ) (153,000 ) Balance on convertible notes, net of note discounts $ 983,000 $ 1,050,000 |
8. Stock Options and Warrants (
8. Stock Options and Warrants (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |
Stock options outstanding | Options Weighted January 1, 2020 39,750,603 $ 0.20 Granted 2,699,998 $ 0.14 Exercised (60,000 ) $ 0.05 Forfeited – $ – March 31, 2020 42,390,601 $ 0.20 |
Options outstanding by Per Share Price | Outstanding Options Exercisable Options Option Exercise Price Per Share Shares Life (Years) Weighted Average Exercise Price Shares Weighted Average Exercise Price $0.05 - $0.24 20,855,551 7.6 $ 0.10 18,880,553 $ 0.10 $0.25 - $0.49 20,913,552 2.0 0.27 20,913,552 0.27 $0.50 - $0.99 471,052 4.1 0.85 471,052 0.85 $1.00 - $2.00 150,446 3.3 1.18 150,446 1.18 42,390,601 4.8 0.20 40,415,603 0.20 |
Warrants outstanding | Warrants Weighted Avg. January 1, 2020 13,065,084 $ 0.11 Granted 649,999 0.04 Exercised (1,155,000 ) 0.05 Cancelled (5,810,200 ) 0.05 March 31, 2020 6,749,883 $ 0.17 |
Warrants outstanding by Per Share Price | Outstanding Warrants Exercisable Warrants Warrant Exercise Price Per Share Shares Life Weighted Average Exercise Price Shares Weighted Average Exercise Price $0.05 - $0.24 4,679,883 0.7 $ 0.10 4,646,550 $ 0.11 $0.25 - $0.49 2,000,000 1.6 0.30 2,000,000 0.30 $0.50 - $1.00 70,000 4.1 0.80 70,000 0.80 6,749,883 1.0 0.17 6,716,550 0.17 |
2. Summary of Significant Acc_4
2. Summary of Significant Accounting Policies (Details) - shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Antidilutive shares excluded from EPS | 52,786,157 | 76,872,402 |
Options [Member] | ||
Antidilutive shares excluded from EPS | 42,390,601 | 39,711,022 |
Warrants [Member] | ||
Antidilutive shares excluded from EPS | 6,749,883 | 26,102,430 |
Convertible Notes [Member] | ||
Antidilutive shares excluded from EPS | 3,645,673 | 11,058,950 |
2. Summary of Significant Acc_5
2. Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Net loss | $ (766,000) | $ (2,282,000) | ||
Cash flow from operations | (301,000) | (1,069,000) | ||
Stockholders' deficit | (2,599,000) | (989,000) | $ (2,269,000) | $ (1,482,000) |
Cash on Hand | 274,000 | 924,000 | 479,000 | $ 1,153,000 |
Prepaid expenses and other current assets | 55,000 | 96,000 | ||
Research and development costs | 70,000 | 151,000 | ||
Operating expenses | 532,000 | 478,000 | ||
Research And Development [Member] | Other Equipment [Member] | ||||
Payment for deposit | 25,000 | |||
Research And Development [Member] | Pipeline Operator [Member] | ||||
Payment for deposit | 500,000 | |||
Amortization of prepaid deposit | 17,000 | 483,000 | ||
Prepaid expenses and other current assets | 25,000 | $ 17,000 | ||
Patent Costs [Member] | ||||
Operating expenses | $ 6,000 | $ 7,000 |
3. Accrued Expenses and Accou_2
3. Accrued Expenses and Accounts Payable (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Accounts payable and accrued expenses | $ 649,000 | $ 557,000 |
Accrued salaries of officers and fees due to members of the Board of Directors | 5,000 | 7,000 |
Former Executive [Member] | Separation Agreement [Member] | ||
Accounts payable and accrued expenses | 197,000 | $ 207,000 |
Payment on separation agreement | $ 10,000 |
4. Property and Equipment (Deta
4. Property and Equipment (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Property and equipment, gross | $ 103,000 | $ 103,000 |
Less: accumulated depreciation | (82,000) | (80,000) |
Property and equipment, net | 21,000 | 23,000 |
Office equipment [Member] | ||
Property and equipment, gross | 36,000 | 36,000 |
Furniture and fixtures [Member] | ||
Property and equipment, gross | 5,000 | 5,000 |
Testing equipment [Member] | ||
Property and equipment, gross | 37,000 | 37,000 |
Leasehold Improvements [Member] | ||
Property and equipment, gross | $ 25,000 | $ 25,000 |
4. Property and Equipment (De_2
4. Property and Equipment (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 2,000 | $ 1,000 |
5. Convertible Notes (Details)
5. Convertible Notes (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Debt Disclosure [Abstract] | ||
Balance due on convertible notes | $ 854,000 | $ 1,019,000 |
Accrued Interest | 215,000 | 184,000 |
Convertible notes payable, gross | 1,069,000 | 1,203,000 |
Convertible note discount | (86,000) | (153,000) |
Balance on convertible notes, net of note discounts | $ 983,000 | $ 1,050,000 |
5. Convertible Notes (Details N
5. Convertible Notes (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |||
Notes payable balance | $ 854,000 | $ 1,019,000 | |
Unamortized discount | 86,000 | 153,000 | |
Convertible notes, face amount | 983,000 | ||
Proceeds from convertible notes | 35,000 | $ 668,000 | |
Discount on notes issued | $ 4,000 | ||
Warrants issued with notes, shares | 550,000 | ||
Discount on fair value of warrants, BCF and OID | $ 35,000 | ||
Debt converted, amount converted | $ 219,000 | ||
Debt converted, shares issued | 3,645,673 | ||
Accrued penalty interest | $ 215,000 | 184,000 | |
Convertible notes outstanding, net | 983,000 | $ 1,050,000 | |
Debt in default | $ 600,000 |
6. Research and Development (De
6. Research and Development (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |||
Research and development expenses | $ 70,000 | $ 151,000 | |
Accounts payable - licensing agreement | 1,314,000 | $ 1,255,000 | |
License revenue generated | 0 | 0 | |
Interest and financing expense | 164,000 | 1,653,000 | |
Prepaid expenses and other current assets | 55,000 | 96,000 | |
AOT Prototypes [Member] | |||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |||
Research and development expenses | 17,000 | ||
Payment for deposit | 25,000 | 500,000 | |
Amortization of prepaid deposit | 17,000 | 483,000 | |
Prepaid expenses and other current assets | 25,000 | 17,000 | |
Temple University License Agreements [Member] | |||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |||
Research and development expenses | 47,000 | 47,000 | |
Accounts payable - licensing agreement | 1,314,000 | $ 1,255,000 | |
Interest and financing expense | 12,000 | $ 21,000 | |
Temple University License Agreements [Member] | Accounts payable deferred [Member] | |||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |||
Accounts payable - licensing agreement | 135,000 | ||
Temple University License Agreements [Member] | Accounts payable past due [Member] | |||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |||
Accounts payable - licensing agreement | $ 1,179,000 |
7. Common Stock (Details Narrat
7. Common Stock (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Debt converted, shares issued | 3,645,673 | |
Debt converted, amount converted | $ 219,000 | |
Proceeds from warrant exercises | $ 61,000 | $ 172,000 |
Convertible Notes Payable [Member] | ||
Debt converted, shares issued | 3,645,673 | |
Debt converted, amount converted | $ 219,000 | |
Warrant Exercises [Member] | ||
Stock issued upon the exercise of warrants, shares issued | 1,155,000 | |
Proceeds from warrant exercises | $ 58,000 | |
Options Exercises [Member] | ||
Stock issued for exercise of options, shares | 60,000 | |
Proceeds from options exercised | $ 3,000 |
8. Stock Options and Warrants_2
8. Stock Options and Warrants (Details-Options Outstanding) - Options [Member] | 3 Months Ended |
Mar. 31, 2020$ / sharesshares | |
Beginning Balance | 39,750,603 |
Granted | 2,699,998 |
Exercised | (60,000) |
Forfeited | 0 |
Ending Balance | 42,390,601 |
Weighted Average Exercise Price, Outstanding Beginning Balance | $ / shares | $ 0.20 |
Weighted Average Exercise Price, Exercised | $ / shares | 0.05 |
Weighted Average Exercise Price, Forfeited | $ / shares | |
Weighted Average Exercise Price, Outstanding Ending Balance | $ / shares | $ 0.20 |
8. Stock Options and Warrants_3
8. Stock Options and Warrants (Details-Options by Exercise Price Per Share) - Options [Member] - $ / shares | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Outstanding Options | ||
Options outstanding | 42,390,601 | 39,750,603 |
Life (Years), options outstanding | 4 years 9 months 18 days | |
Weighted Average Exercise Price, options outstanding | $ 0.20 | $ 0.20 |
Exercisable Options | ||
Options exercisable | 40,415,603 | |
Weighted Average Exercise Price, options exercisable | $ 0.20 | |
$0.05 - $0.24 [Member] | ||
Outstanding Options | ||
Options outstanding | 20,855,551 | |
Life (Years), options outstanding | 7 years 7 months 6 days | |
Weighted Average Exercise Price, options outstanding | $ 0.10 | |
Exercisable Options | ||
Options exercisable | 18,880,553 | |
Weighted Average Exercise Price, options exercisable | $ 0.10 | |
$0.25 - $0.49 [Member] | ||
Outstanding Options | ||
Options outstanding | 20,913,552 | |
Life (Years), options outstanding | 2 years | |
Weighted Average Exercise Price, options outstanding | $ 0.27 | |
Exercisable Options | ||
Options exercisable | 20,913,552 | |
Weighted Average Exercise Price, options exercisable | $ 0.27 | |
$0.50 - $0.99 [Member] | ||
Outstanding Options | ||
Options outstanding | 471,052 | |
Life (Years), options outstanding | 4 years 1 month 6 days | |
Weighted Average Exercise Price, options outstanding | $ 0.85 | |
Exercisable Options | ||
Options exercisable | 471,052 | |
Weighted Average Exercise Price, options exercisable | $ 0.85 | |
$1.00 - $2.00 [Member] | ||
Outstanding Options | ||
Options outstanding | 150,446 | |
Life (Years), options outstanding | 3 years 3 months 19 days | |
Weighted Average Exercise Price, options outstanding | $ 1.18 | |
Exercisable Options | ||
Options exercisable | 150,446 | |
Weighted Average Exercise Price, options exercisable | $ 1.18 |
8. Stock Options and Warrants_4
8. Stock Options and Warrants (Details-Warrants Outstanding) - Warrants [Member] | 3 Months Ended |
Mar. 31, 2020$ / sharesshares | |
Warrants outstanding, beginning balance | shares | 13,065,084 |
Warrants exercised | shares | (1,155,000) |
Warrants cancelled | shares | (5,810,200) |
Warrants outstanding, ending balance | shares | 6,749,883 |
Weighted Average Exercise Price, Outstanding Beginning Balance | $ 0.11 |
Weighted Average Exercise Price, Granted | 0.04 |
Weighted Average Exercise Price, Exercised | 0.05 |
Weighted Average Exercise Price, Cancelled | 0.05 |
Weighted Average Exercise Price, Outstanding Ending Balance | $ 0.17 |
8. Stock Options and Warrants_5
8. Stock Options and Warrants (Details-Warrant Exercise Price per Share) - Warrants [Member] - $ / shares | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Outstanding Warrants | ||
Warrants outstanding | 6,749,883 | 13,065,084 |
Life (Years), warrants outstanding | 1 year | |
Weighted Average Exercise Price, warrants outstanding | $ 0.17 | |
Exercisable Warrants | ||
Warrants exercisable | 6,716,550 | |
Weighted Average Exercise Price, warrants exercisable | $ 0.17 | |
$0.05-$0.24 Price Per Share [Member] | ||
Outstanding Warrants | ||
Warrants outstanding | 4,679,883 | |
Life (Years), warrants outstanding | 8 months 12 days | |
Weighted Average Exercise Price, warrants outstanding | $ .10 | |
Exercisable Warrants | ||
Warrants exercisable | 4,646,550 | |
Weighted Average Exercise Price, warrants exercisable | $ 0.11 | |
$0.25-$0.49 Price Per Share [Member] | ||
Outstanding Warrants | ||
Warrants outstanding | 2,000,000 | |
Life (Years), warrants outstanding | 1 year 7 months 6 days | |
Weighted Average Exercise Price, warrants outstanding | $ 0.30 | |
Exercisable Warrants | ||
Warrants exercisable | 2,000,000 | |
Weighted Average Exercise Price, warrants exercisable | $ 0.30 | |
$0.50-$1.00 Price Per Share [Member] | ||
Outstanding Warrants | ||
Warrants outstanding | 70,000 | |
Life (Years), warrants outstanding | 4 years 7 months 6 days | |
Weighted Average Exercise Price, warrants outstanding | $ 0.80 | |
Exercisable Warrants | ||
Warrants exercisable | 70,000 | |
Weighted Average Exercise Price, warrants exercisable | $ 0.80 |
8. Stock options and Warrants_6
8. Stock options and Warrants (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Share based compensation expense | $ 121,000 | $ 99,000 |
Proceeds from warrant exercises | $ 61,000 | 172,000 |
Stock price | $ 0.07 | |
Warrants [Member] | ||
Aggregate intrinsic value of warrants outstanding | $ 20,000 | |
Warrants exercised | 1,155,000 | |
Proceeds from warrant exercises | $ 58,000 | |
Warrants [Member] | Consulting Agreement [Member] | ||
Warrants granted | 99,999 | |
Fair value of warrants granted | $ 7,000 | |
Warrants [Member] | Convertible Notes [Member] | ||
Warrants granted | 550,000 | |
Options [Member] | ||
Options granted | 2,699,998 | |
Options exercised | 60,000 | |
Fair value of options at grant date | $ 338,000 | |
Share based compensation expense | 115,000 | $ 99,000 |
Aggregate intrinsic value of options outstanding | 133,000 | |
Unamortized compensation expense | $ 245,000 | |
Weighted average life of options | 4 years 9 months 18 days | |
Options [Member] | Board of Directors [Member] | ||
Options exercised | 60,000 | |
Option exercise price | $ 3,000 |