Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Nov. 16, 2018 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | ORIGINCLEAR, INC. | |
Entity Central Index Key | 1,419,793 | |
Trading Symbol | OCLN | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,018 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Ex Transition Period | false | |
Entity Common Stock, Shares Outstanding | 1,410,006,088 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
CURRENT ASSETS | ||
Cash | $ 899,687 | $ 439,822 |
Contracts receivable, less allowance for doubtful accounts of $6,996 and $6,996 respectively | 384,937 | 490,441 |
Convertible note receivable | 82,883 | |
Inventory | 13,737 | 13,614 |
Prepaid expenses and other assets | 34,086 | 61,607 |
Contract assets | 36,761 | 88,589 |
Work in progress | 84,157 | 84,157 |
TOTAL CURRENT ASSETS | 1,536,248 | 1,178,230 |
NET PROPERTY AND EQUIPMENT | 167,161 | 150,628 |
OTHER ASSETS | ||
Fair value investment-securities | 16,400 | |
Other asset | 19,538 | 19,538 |
Trademark | 4,467 | 4,467 |
Security deposit | 3,500 | 3,500 |
TOTAL OTHER ASSETS | 43,905 | 27,505 |
TOTAL ASSETS | 1,747,314 | 1,356,363 |
Current Liabilities | ||
Accounts payable and other payable | 676,391 | 827,656 |
Accrued expenses | 1,109,505 | 932,092 |
Cumulative preferred stock dividends payable | 1,976 | |
Contract liabilities | 250,184 | 154,048 |
Capital lease, current portion | 9,088 | |
Customer deposit | 113,950 | 113,950 |
Warrant reserve | 20,000 | 20,000 |
Deferred income | 65,000 | 15,500 |
Loans payable, truck | 11,090 | |
Loan Payable, merchant cash advances, net of finance fees of $378,775 and $0, respectively | 698,771 | |
Loans payable, related party | 235,243 | |
Promissory note, current portion | 93 | |
Derivative liabilities | 6,158,447 | 5,531,183 |
Convertible promissory notes, net of discount of $321,292 and $591,835, respectively | 968,438 | 766,931 |
Total Current Liabilities | 10,307,086 | 8,372,450 |
Long Term Liabilities | ||
Capital lease, long term portion | 29,190 | |
Promissory note, long term portion | 74,902 | |
Loan payable, long term portion | 4,609 | |
Convertible promissory notes | 2,754,124 | 2,811,000 |
Total Long Term Liabilities | 2,858,216 | 2,815,609 |
Total Liabilities | 13,165,302 | 11,188,059 |
Series F 8% Convertible Preferred Stock, redeemable value of $750,000 and $0, respectively | 750,000 | |
COMMITMENTS AND CONTINGENCIES (See Note 12) | ||
SHAREHOLDERS' DEFICIT | ||
Common stock, $0.0001 par value, 8,000,000,000 shares authorized 690,853,446 and 112,888,964 equity shares issued and outstanding, respectively | 69,086 | 11,289 |
Preferred treasury stock,1,000 and 1,000 shares outstanding, respectively | ||
Additional paid in capital | 61,544,104 | 58,618,560 |
Accumulated other comprehensive loss | (134) | (134) |
Accumulated deficit | (73,784,139) | (68,461,412) |
TOTAL SHAREHOLDERS' DEFICIT | (12,167,988) | (9,831,696) |
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT | 1,747,314 | 1,356,363 |
Series B Preferred stock | ||
SHAREHOLDERS' DEFICIT | ||
Preferred stock value | 1 | 1 |
Series C Preferred stock | ||
SHAREHOLDERS' DEFICIT | ||
Preferred stock value | ||
Series E Preferred Stock | ||
SHAREHOLDERS' DEFICIT | ||
Preferred stock value | 3,094 | |
Series F Preferred Stock | ||
SHAREHOLDERS' DEFICIT | ||
Preferred stock value | ||
Series D-1 Preferred Stock | ||
SHAREHOLDERS' DEFICIT | ||
Preferred stock value |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Allowance for doubtful accounts | $ 6,996 | $ 6,996 |
Net of discount current | 321,775 | 591,835 |
Merchant cash advances, net of finance fees | $ 378,775 | $ 0 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 550,000,000 | 550,000,000 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 8,000,000,000 | 8,000,000,000 |
Common stock, shares issued | 690,853,446 | 112,888,964 |
Common stock, shares outstanding | 690,853,446 | 112,888,964 |
Preferred treasury stock, shares outstanding | 1,000 | 1,000 |
Convertible preferred stock, redeemable value | $ 750,000 | |
Series B Preferred stock | ||
Preferred stock, shares issued | 3,333 | 3,333 |
Preferred stock, shares outstanding | 3,333 | 3,333 |
Series C Preferred stock | ||
Preferred stock, shares issued | 1,000 | 1,000 |
Preferred stock, shares outstanding | 1,000 | 1,000 |
Series E Preferred Stock | ||
Preferred stock, shares issued | 2,440,871 | 2,440,871 |
Preferred stock, shares outstanding | 2,440,871 | 2,440,871 |
Series D-1 Preferred Stock | ||
Preferred stock, shares issued | 28,500,000 | 28,500,000 |
Preferred stock, shares outstanding | 28,500,000 | 28,500,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Statement [Abstract] | ||||
Sales | $ 1,094,118 | $ 1,112,438 | $ 3,678,261 | $ 2,294,891 |
Cost of Goods Sold | 754,214 | 949,657 | 2,766,244 | 2,031,334 |
Gross Profit | 339,904 | 162,781 | 912,017 | 263,557 |
Operating Expenses | ||||
Selling and marketing expenses | 470,926 | 539,975 | 1,336,512 | 2,165,213 |
General and administrative expenses | 771,944 | 830,444 | 2,143,859 | 1,842,815 |
Research and development | 49,880 | 53,939 | 167,944 | 136,582 |
Depreciation and amortization expense | 14,739 | 12,961 | 43,857 | 39,506 |
Total Operating Expenses | 1,307,489 | 1,437,319 | 3,692,172 | 4,184,116 |
Loss from Operations | (967,585) | (1,274,538) | (2,780,155) | (3,920,559) |
OTHER INCOME (EXPENSE) | ||||
Other income | 2,017 | 32,883 | ||
Unrealized gain on investment securities | 200 | (13,600) | ||
Realized loss on investment | (20,000) | (20,000) | ||
Gain on sale of asset | (406) | |||
Commitment fees | (41,498) | (736,052) | (425,824) | (1,409,655) |
Loss on conversion of debt at fair value | (597,090) | (59,936) | (860,880) | (760,758) |
Gain/(Loss) on net change in derivative liability | 7,680,163 | (2,633,663) | (60,952) | (2,026,380) |
Interest expense | (737,319) | (173,448) | (1,193,793) | (542,450) |
TOTAL OTHER INCOME (EXPENSE) | 6,286,473 | (3,603,099) | (2,542,572) | (4,739,243) |
NET INCOME (LOSS) | 5,318,888 | (4,877,637) | (5,322,727) | (8,659,802) |
PREFERRED STOCK DIVIDENDS | (1,976) | (1,976) | ||
NET INCOME (LOSS) AVAILABLE TO SHAREHOLDERS | $ 5,316,912 | $ (5,324,703) | ||
BASIC AND DILUTED EARNINGS (LOSS) PER SHARE | $ 0.021 | $ (0.09) | $ (0.031) | $ (0.222) |
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING, BASIC AND DILUTED | 252,473,213 | 54,334,415 | 173,594,567 | 38,977,842 |
Condensed Consolidated Statem_2
Condensed Consolidated Statement of Shareholders' Deficit - 9 months ended Sep. 30, 2018 - USD ($) | Total | Preferred stock | Common stock | Additional Paid-in Capital | Accumulated Other Comprehensive loss | Accumulated Deficit |
Beginning balance at Dec. 31, 2017 | $ (9,831,696) | $ 1 | $ 11,289 | $ 58,618,560 | $ (134) | $ (68,461,412) |
Beginning balance, shares at Dec. 31, 2017 | 4,333 | 112,888,964 | ||||
Common stock issuance for conversion of debt and accrued interest | 1,448,262 | $ 29,298 | 1,418,964 | |||
Common stock issuance for conversion of debt and accrued interest, shares | 292,974,292 | |||||
Common stock issued at fair value for services | 994,689 | $ 11,772 | 982,917 | |||
Common stock issued at fair value for services, shares | 117,724,284 | |||||
Common stock issued thru a private placement for purchase of Series F Preferred stock | $ 16,727 | (16,727) | ||||
Common stock issued thru a private placement for purchase of Series F Preferred stock, shares | 167,265,906 | |||||
Series D Preferred stock issued through a private placement | 280,000 | $ 1,581 | 278,419 | |||
Series D Preferred stock issued through a private placement, shares | 15,805,554 | |||||
Series D Preferred stock converted to Series E Preferred stock | (280,000) | $ (1,581) | (278,419) | |||
Series D Preferred stock converted to Series E Preferred stock, shares | (15,805,554) | |||||
Series D-1 Preferred stock issued for services | $ 2,850 | (2,850) | ||||
Series D-1 Preferred stock issued for services, shares | 28,500,000 | |||||
Series E Preferred stock issued thru a private placement | 507,098 | $ 244 | 506,854 | |||
Series E Preferred stock issued thru a private placement, shares | 2,440,871 | |||||
Stock option compensation cost | 38,362 | 38,362 | ||||
Cumulative preferred stock dividend | (1,976) | (1,976) | ||||
Net loss | (5,322,727) | (5,322,727) | ||||
Ending balance at Sep. 30, 2018 | $ (12,167,988) | $ 3,095 | $ 69,086 | $ 61,544,104 | $ (134) | $ (73,784,139) |
Ending balance, shares at Sep. 30, 2018 | 30,945,204 | 690,853,446 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (5,322,727) | $ (8,659,802) |
Adjustment to reconcile net loss to net cash used in operating activities | ||
Depreciation and amortization | 43,857 | 39,506 |
Common stock and warrants issued for services | 994,689 | 3,418,598 |
Stock option and warrant compensation expense | 38,362 | 71,603 |
(Gain)/Loss on net change in valuation of derivative liability | 60,952 | 2,026,380 |
Loss on conversion of debt | 860,880 | 760,758 |
Debt discount recognized as interest expense | 483,577 | 313,546 |
Loss on sale of asset | 406 | |
Net unrealized loss on fair value of security | 13,600 | |
Realized loss on security investment | 20,000 | |
Exchange of investment for services | 80,000 | |
Amortization of financing cost | 246,035 | |
Change in Assets (Increase) Decrease in: | ||
Contracts receivable | 75,504 | (140,653) |
Prepaid expenses | 27,521 | 24,137 |
Contract assets | 51,828 | 38,374 |
Inventory asset | (123) | (13,614) |
Work in progress | 1,928 | |
Change in Liabilities Increase (Decrease) in: | ||
Accounts payable | (151,264) | 468,406 |
Accrued expenses | 320,235 | 121,047 |
Contract liabilities | 96,136 | 209,294 |
Deferred income | 49,500 | 24,100 |
NET CASH USED IN OPERATING ACTIVITIES | (2,011,034) | (1,296,392) |
CASH FLOWS USED FROM INVESTING ACTIVITIES: | ||
Fair value investment - security | (100,000) | |
Convertible note receivable | (80,000) | |
Proceeds from sale of asset | 2,000 | |
Purchase of fixed assets | (17,357) | (33,845) |
CASH USED IN INVESTING ACTIVITIES | (195,357) | (33,845) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Loan payable, truck | (15,699) | 23,372 |
Payments on capital lease | (7,162) | |
Loans payable, financing | 1,366,246 | |
Payments made on financing loans | (987,471) | |
Loan payable, related party | 248,870 | |
Payments made on related party loans | (13,626) | |
Promissory note payable | 67,500 | |
Proceeds from convertible promissory notes | 750,500 | |
Proceeds for issuance of common stock for cash | 1,257,098 | 1,297,750 |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 2,666,256 | 1,321,122 |
Foreign currency effect on cash flow | (42) | |
NET DECREASE IN CASH | 459,865 | (9,157) |
CASH BEGINNING OF PERIOD | 439,822 | 351,321 |
CASH END OF PERIOD | 899,687 | 342,164 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | ||
Interest paid | 212,284 | 1,823 |
Taxes paid | ||
SUPPLEMENTAL DISCLOSURES OF NON CASH TRANSACTIONS | ||
Common stock issued at fair value for conversion of debt and accrued interest | 1,448,262 | 1,234,972 |
Common stock issued at fair value on settlement of accounts payable | 117,931 | |
Common stock issued at fair value for supplemental shares | 424,245 | 1,409,655 |
Capitalized lease asset | $ 45,440 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2018 | |
Basis of Presentation [Abstract] | |
BASIS OF PRESENTATION | 1. The accompanying unaudited condensed consolidated financial statements of OriginClear, Inc. (the “Company”) (formerly OriginOil, Inc.) have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all normal recurring adjustments considered necessary for a fair presentation have been included. Operating results for the nine months ended September 30, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018. For further information refer to the financial statements and footnotes thereto included in the Company’s Form 10-K for the year ended December 31, 2017. Going Concern The accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis of accounting, which contemplates continuity of operations, realization of assets and liabilities and commitments in the normal course of business. The accompanying unaudited condensed consolidated financial statements do not reflect any adjustments that might result if the Company is unable to continue as a going concern. The Company’s revenue is not yet sufficient to cover its operating expenditures and has negative cash flows from operations, which raise substantial doubt about the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern and appropriateness of using the going concern basis is dependent upon, among other things, additional cash infusion. Management believes the existing shareholders, the prospective new investors, current and future sales will provide the additional cash needed to meet the Company’s obligations as they become due, and will allow the development of its core business operations. 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. |
Summary of Significant Accounti
Summary of Significant Accounting Polices | 9 Months Ended |
Sep. 30, 2018 | |
Summary of Significant Accounting Polices [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICES This summary of significant accounting policies of the Company is presented to assist in understanding the Company’s financial statements. The financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the financial statements. Principles of Consolidation The accompanying unaudited condensed consolidated financial statements include the accounts of OriginClear, Inc. and its wholly owned operating subsidiaries, Progressive Water Treatment, Inc., and OriginClear Technology Limited. All material intercompany transactions have been eliminated upon consolidation of these entities. Loss per Share Calculations Basic loss per share calculations are computed by dividing income (loss) available to common shareholders by the weighted-average number of common shares available. Diluted earnings per share is computed similar to basic earnings per share except that the denominator is increased to include securities or other contracts to issue common stock that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. The Company has excluded 3,609,143 stock options, 261,149,413 warrants, convertible debt of $3,494,546 and shares issuable from convertible preferred stock for the nine months ended September 30, 2018, because their impact on the loss per share is anti-dilutive. The Company did include convertible debt of $549,308 in its diluted earnings per share, because their impact on the earnings per share is dilutive. The Company has excluded 3,697,495 of stock options, 474,335 warrants, and the shares issuable from convertible debt of $3,667,068 and shares issuable from convertible preferred stock for the nine months ended September 30, 2018, because their impact on the loss per share is anti-dilutive. Work-in-Process The Company recognizes as an asset the accumulated costs for work-in-process on projects expected to be delivered to customers. Work in Process includes the cost price of materials and labor related to the construction of equipment to be sold to customers. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, 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. Actual results could differ from those estimates. Significant estimates include estimates used to review the Company’s impairments and estimations of long-lived assets, revenue recognition on percentage of completion type contracts, allowances for uncollectible accounts, warranty reserves, inventory valuation, debt beneficial conversion features, fair value investments, valuations of non-cash capital stock issuances and the valuation allowance on deferred tax assets. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable in the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Stock-Based Compensation The Company periodically issues stock options and warrants to employees and non-employees in non-capital raising transactions for services and for financing costs. The Company accounts for stock option and warrant grants issued and vesting to employees based on the authoritative guidance provided by the Financial Accounting Standards Board whereas the value of the award is measured on the date of grant and recognized over the vesting period. The Company accounts for stock option and warrant grants issued and vesting to non-employees in accordance with the authoritative guidance of the Financial Accounting Standards Board whereas the value of the stock compensation is based upon the measurement date as determined at either a) the date at which a performance commitment is reached, or b) at the date at which the necessary performance to earn the equity instruments is complete. Non-employee stock-based compensation charges generally are amortized over the vesting period on a straight-line basis. In certain circumstances where there are no future performance requirements by the non-employee, option grants are immediately vested and the total stock-based compensation charge is recorded in the period of the measurement date. Revenue Recognition We recognize revenue when services are performed, and at the time of shipment of products, provided that evidence of an arrangement exists, title and risk of loss have passed to the customer, fees are fixed or determinable, and collection of the related receivable is reasonably assured. Revenues and related costs on construction contracts are recognized as the performance obligations for work are satisfied over time in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers. Under ASC 606, revenue and associated profit, will be recognized as the customer obtains control of the goods and services promised in the contract (i.e., performance obligations). All un-allocable indirect costs and corporate general and administrative costs are charged to the periods as incurred. However, in the event a loss on a contract is foreseen, the Company will recognize the loss as it is determined. Revisions in cost and profit estimates during the course of the contract are reflected in the accounting period in which the facts for the revisions become known. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Changes in job performance, job conditions, and estimated profitability, including those arising from contract penalty provisions, and final contract settlements, may result in revisions to costs and income, which are recognized in the period the revisions are determined. Contract receivables are recorded on contracts for amounts currently due based upon progress billings, as well as retention, which are collectible upon completion of the contracts. Accounts payable to material suppliers and subcontractors are recorded for amounts currently due based upon work completed or materials received, as are retention due subcontractors, which are payable upon completion of the contract. General and administrative expenses are charged to operations as incurred and are not allocated to contract costs. Contract Receivable The Company bills its customers in accordance with contractual agreements. The agreements generally require billing to be on a progressive basis as work is completed. Credit is extended based on evaluation of clients financial condition and collateral is not required. The Company maintains an allowance for doubtful accounts for estimated losses that may arise if any customer is unable to make required payments. Management performs a quantitative and qualitative review of the receivables past due from customers on a monthly basis. The Company records an allowance against uncollectible items for each customer after all reasonable means of collection have been exhausted, and the potential for recovery is considered remote. The allowance for doubtful accounts was approximately $6,996 as of September 30, 2018 and December 31, 2017, respectively. The net contract receivable balance was $384,937 and $490,441 at September 30, 2018 and December 31, 2017, respectively. Fair Value of Financial Instruments Fair Value of Financial Instruments, requires disclosure of the fair value information, whether or not recognized in the balance sheet, where it is practicable to estimate that value. As of September 30, 2018, the balances reported for cash, contract receivables, cost in excess of billing, prepaid expenses, accounts payable, billing in excess of cost, and accrued expenses approximate the fair value because of their short maturities. We adopted ASC Topic 820 for financial instruments measured as fair value on a recurring basis. ASC Topic 820 defines fair value, established a framework for measuring fair value in accordance with accounting principles generally accepted in the United States and expands disclosures about fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 established a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). These tiers include: ● Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets; ● Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and ● Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. The following table presents certain investments and liabilities of the Company’s financial assets and liabilities measured and recorded at fair value on the Company’s balance sheets on a recurring basis and their level within the fair value hierarchy as of September 30, 2018. Total (Level 1) (Level 2) (Level 3) Investment at fair value-securities $ 16,400 $ - $ - $ 16,400 Total Assets measured at fair value $ 16,400 $ - $ - $ 16,400 The following is a reconciliation of the fair value securities for which level 3 inputs were used in determining the approximate fair value: Balance as of May 17, 2018 $ 130,000 Investment exchanged for services (80,000 ) Net realized loss on asset (20,000 ) Net unrealized loss on asset (13,600 ) Balance as of September 30, 2018 $ 16,400 Total (Level 1) (Level 2) (Level 3) Derivative Liability $ 6,158,447 $ - $ - $ 6,158,447 Total liabilities measured at fair value $ 6,158,447 $ - $ - $ 6,158,447 The following is a reconciliation of the derivative liability for which level 3 inputs were used in determining the approximate fair value: Balance as of January 1, 2018 $ 5,531,183 Fair Value of derivative liabilities issued 566,312 Loss on change in derivative liability 60,952 Balance as of September 30, 2018 $ 6,158,447 For purpose of determining the fair market value of the derivative liability, the Company used Binomial lattice formula valuation model. The significant assumptions used in the Binomial lattice formula valuation of the derivative are as follows: 9/30/2018 Risk free interest rate 2.15% - 2.94% Stock volatility factor 131.0% - 241.0% Weighted average expected option life 3 months - 5 years Expected dividend yield None Segment Reporting The Company’s business currently operates in one segment based upon the Company’s organizational structure and the way in which the operations are managed and evaluated. Marketable Securities The Company adopted ASU 2016-01, “Financial Instruments – Recognition and Measurement of Financial Assets and Financial Liabilities.” ASU 2016-01 requires investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income. It requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purpose, and separate presentation of financial assets and financial liabilities by measurement category and form of financial asset. It eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost. The Company has evaluated the potential impact this standard may have on the condensed consolidated financial statements and determined that it had a significant impact on the condensed consolidated financial statements. The Company accounts for its investment in Water Technologies International, Inc. as available-for-sale securities, and the unrealized gain on the available-for-sale securities is recognized in net income. Licensing agreement The Company analyzed the licensing agreement using ASU 606 to determine the timing of revenue recognition. The licensing of the intellectual property (IP) is distinct from the non-license goods or services and has significant standalone functionality that provides a benefit or value. The functionality will not change during the license period due to the licensor’s activities. Because the significant standalone functionality is delivered immediately, the revenue is generally recognized when the license is delivered. Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-2, which creates ASC Topic 842, “Leases.” This update increases transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This guidance is effective for interim and annual reporting periods beginning after December 15, 2018. We are evaluating what impact, if any, the adoption of this guidance will have on our financial condition, results of operations, cash flows or financial disclosures. In August 2017, FASB issued accounting standards update ASU-2017-12, “D” (Topic 815) – “Targeted Improvements to Accounting for Hedging Activities”, to require an entity to present the earnings effect of the hedging instrument in the same statement line item in which the earnings effect of the hedged item is reported. The amendments in this update are effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods with the fiscal years beginning after December 15, 2020. Early adoption is permitted in any interim period after issuance of the update. The Company is currently evaluating the impact of the adoption of ASU 2017-12 on the Company’s financial statements. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (ASC 606), to clarify the principles of recognizing revenue and create common revenue recognition guidance between U.S. GAAP and International Financial Reporting Standards. Under ASC 606, revenue is recognized when a customer obtains control of promised goods or services and is recognized at an amount that reflects the consideration expected to be received in exchange for such goods or services. In addition, ASC 606 requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The ASC is effective for fiscal years beginning after December 15, 2017. The Company has adopted ASC 606 beginning on January 1, 2018. The adoption of ASC 606 did not have a significant impact on the Company’s revenue recognition policies. See Note 7 for additional disclosures in accordance with the new revenue recognition standard. The Company adopted ASU 2016-01, “Financial Instruments - Overall: Recognition and Measurement of Financial Assets and Financial Liabilities.” ASU 2016-01 requires equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income, requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset, and eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost. The Company has evaluated the potential impact this standard may have on the condensed consolidated financial statements and determined that it had a significant impact on the condensed consolidated financial statements. In June 2018, FASB issued accounting standards update ASU 2018-07, (Topic 505) – “Shared-Based Payment Arrangements with Nonemployees”, which simplifies the accounting for share-based payments granted to nonemployees for goods and services. Under the ASU, most of the guidance on such payments to nonemployees will be aligned with the requirements for share-based payments granted to employees. Under the ASU 2018-07, the measurement of equity-classified nonemployee share-based payments will be fixed on the grant date, as defined in ASC 718, and will use the term nonemployee vesting period, rather than requisite service period. The amendments in this update are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted if financial statements have not yet been issued. The Company is currently evaluating the impact of the adoption of ASU 2018-07 on the Company’s financial statements. Management reviewed currently issued pronouncements and does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the accompanying condensed financial statements. |
Capital Stock
Capital Stock | 9 Months Ended |
Sep. 30, 2018 | |
Capital Stock [Abstract] | |
CAPITAL STOCK | 3. CAPITAL STOCK Preferred Stock As of April 11, 2018, the Board of Directors authorized an increase in shares of preferred stock, par value $0.0001 per share to 550,000,000 shares from 750,000 shares. The Board adopted a Certificate of Designation establishing the rights, preferences, privileges and other terms of Series D preferred stock and Series D-1 preferred stock, par value $0.0001 per share. The Board authorized and approved 400,000,000 shares of Series D and 50,000,000 shares of Series D-1 preferred stock. Series B On October 1, 2015, the Company filed a Certificate of Designation for Series B preferred stock with the Secretary of State of Nevada and the shares of Series B preferred stock were issued to the shareholders of Progressive Water Treatment, Inc. in connection with the share exchange agreement. One third (1/3) of the shares received by the holder may be converted into common stock beginning one (1) year after the first date on which a share of Series B preferred stock was issued (the “Original Issue Date); one third (1/3) may be converted beginning two (2) years after the Original Issue Date; and the remaining one third (1/3) may be converted beginning three years after the Original Issue Date. The number of shares of common stock issuable for each share of converted Series B preferred stock shall be calculated by dividing the stated value by the market price, the market price shall be the average of the closing trade prices of the twenty-five (25) days prior to the date of the conversion notice. On August 12, 2016, the agreement was amended to include make-good-shares. The conversion price set forth in Section 1.2 of the agreement shall be adjusted to reflect the lower of $1.05 or the price of the Company’s common stock calculated using the average closing prices of the Company’s common stock on the last three (3) trading days prior to the date of conversion, provided, however, if the Average Closing Price is less than $0.35 per share, the adjusted conversion price shall be $0.35 per share. See Note 3. The conversion price is subject to adjustment in the case of reverse splits, stock dividends, reclassifications and the like. In addition, the conversion price is subject to certain full ratchet anti-dilution protection. Accordingly, the preferred stock is valued under the provision of ASC Topic 815, Derivatives and Hedging, because the conversion feature of the preferred stock was not afforded the exemption for conventional convertible instruments due to its variable conversion rate. The Series B preferred stock shall have the rights, preferences and privileges as set forth in the exchange agreement. As of September 30, 2018, there are 3,333 shares of Series B preferred stock outstanding. Series C On March 14, 2017, the Board of Directors authorized the issuance of 1,000 shares of Series C preferred stock, par value $0.0001 per share, to T. Riggs Eckelberry in exchange for his continued employment with the Company. The purchase price of the Series C preferred stock was $0.0001 per share representing a total purchase price of $0.10 for 1,000 shares. As of September 30, 2018, there are 1,000 shares of Series C preferred stock outstanding. Series D On April 13, 2018, the Board adopted resolutions creating a series of shares of convertible preferred stock designated as 0% Series D preferred stock (the “Series D preferred stock”) with a par value of $0.0001. The shares of Series D preferred stock do not have a dividend rate or liquidation preference and do not carry any voting rights. The purchase price shall be $0.02 per unit for an aggregate investment amount of less than $50,000; $0.018 for an aggregate amount of $50,000 or greater, but less than $100,000; $0.016 for an aggregate amount of $100,000 or greater, but less than $250,000; $0.014 for an aggregate amount of $250,000 or greater. At no time may all or a portion of the Series D preferred stock be converted if the number of shares of common stock to be issued pursuant to such conversion would exceed, when aggregated with all other shares of common stock owned by the holder at such time, the number of shares of common stock that would result in the holder beneficially owning (as determined in accordance with Section 13(d) of the Exchange Act and the rules thereunder) more than 4.99% of all of the common stock outstanding at such time, which amount may be increased to 9.99% at the holders discretion. As of June 30, 2018, the Company issued 15,805,554 shares of Series D preferred stock through a private placement for a cash value of $280,000 at prices ranging $0.016 to $0.020. During the period ended September 30, 2018, the Series D shares were exchanged for Series E preferred stock. As of September 30, 2018, there were no outstanding Series D preferred stock. Series D-1 On April 13, 2018, the Company filed a Certificate of Designation for its Series D-1 Convertible preferred stock (the “Series D-1 preferred stock”) with the Secretary of State of Nevada designating 50,000,000 shares of its authorized preferred stock as Series D-1 preferred stock. The shares of Series D-1 preferred stock have a par value of $0.0001 per share. The shares of Series D-1 preferred stock do not have a dividend rate or liquidation preference. Each share of Series D-1 preferred stock is convertible into one share of common stock. The shares of Series D-1 preferred stock do not carry any voting rights. At no time may all or a portion of the Series D-1 preferred stock be converted if the number of shares of common stock to be issued pursuant to such conversion would exceed, when aggregated with all other shares of common stock owned by the holder at such time, the number of shares of common stock that would result in the holder beneficially owning (as determined in accordance with Section 13(d) of the Exchange Act and the rules thereunder) more than 4.99% of all of the common stock outstanding at such time, which amount may be increased to 9.99% at the holders discretion. The Company issued 28,500,000 preferred shares for services. As of September 30, 2018, there were 28,500,000 shares issued and outstanding. Series E On August 14, 2018, the Company filed a Certificate of Designation for its 0% Series E Convertible preferred stock (the “Series E preferred stock”) with the Secretary of State of Nevada designating 4,000,000 shares of its authorized preferred stock as Series E preferred stock, accompanied with one hundred (100) warrants each for the purchase of one (1) share of common stock. The shares of Series E preferred stock have a par value of $0.0001 per share. The shares of Series E preferred stock do not have a dividend rate or liquidation preference. Each share of Series E preferred stock is convertible into one share of common stock. The shares of Series E preferred stock do not carry any voting rights. At no time may all or a portion of the Series E preferred stock be converted if the number of shares of common stock to be issued pursuant to such conversion would exceed, when aggregated with all other shares of common stock owned by the holder at such time, the number of shares of common stock that would result in the holder beneficially owning (as determined in accordance with Section 13(d) of the Exchange Act and the rules thereunder) more than 4.99% of all of the common stock outstanding at such time, which amount may be increased to 9.99% at the holders discretion. As of September 30, 2018, there were 2,440,871 shares issued and outstanding. Series F On August 14, 2018, the Company filed a Certificate of Designation for its Series F Convertible preferred stock (the “Series F preferred stock”) with the Secretary of State of Nevada designating $2,000,000 units, with each unit consisting of 100 shares of the Company’s Series F preferred stock. The shares of Series F preferred stock have a par value of $0.0001 per share. The shares of Series F preferred stock do not have a liquidation preference. Each share of Series F preferred stock is convertible into one share of common stock. The shares of Series F preferred stock do not carry any voting rights. The Company may, in its sole discretion, at any time while the Series F preferred stock is outstanding, redeem all or any portion of the outstanding Series preferred stock at a price equal to the stated value, plus any accrued but unpaid dividends. The Company may exercise such redemption right by providing a minimum of 5 days written notice of such redemption to the Holders. In the event the Company exercises such redemption right for less than all of the then-outstanding shares of Series F preferred stock, the Company shall redeem the outstanding shares of the Holders of a pro-rata basis. The Series F is mandatorily redeemable on September 1, 2020. At no time may all or a portion of the Series F preferred stock be converted if the number of shares of common stock to be issued pursuant to such conversion would exceed, when aggregated with all other shares of common stock owned by the holder at such time, the number of shares of common stock that would result in the holder beneficially owning (as determined in accordance with Section 13(d) of the Exchange Act and the rules thereunder) more than 4.99% of all of the common stock outstanding at such time, which amount may be increased to 9.99% at the holders discretion. As of September 30, 2018, the Company accrued dividends in the amount of $1,976, and has 750 shares issued and outstanding. Common Stock On August 9, 2018, the Company and Board of Directors increased the aggregate number of authorized shares of common stock of the Corporation to 8,000,000,000 shares from 2,000,000,000 shares. Nine months ended September 30, 2018 The Company issued 292,974,292 shares of common stock for the settlement of convertible promissory notes in an aggregate principal in the amount of $524,714, plus interest in the amount of $62,668, with an aggregate fair value loss on conversion of debt in the amount of $860,880, based upon conversion prices of $0.0019 to $0.0329. The Company issued 117,724,284 shares of common stock for services at fair value of $994,689. The Company issued 167,265,906 shares of common stock through a private placement for purchase of Series F preferred stock. |
Convertible Promissory Notes
Convertible Promissory Notes | 9 Months Ended |
Sep. 30, 2018 | |
Convertible Promissory Notes [Abstract] | |
CONVERTIBLE PROMISSORY NOTES | 4. CONVERTIBLE PROMISSORY NOTES As of September 30, 2018, the outstanding convertible promissory notes are summarized as follows: Convertible Promissory Notes, net of debt discount $ 3,722,562 Less current portion 968,438 Total long-term liabilities $ 2,754,124 Maturities of long-term debt for the next five years are as follows: Period Ending September 30, Amount 2020 2,245,000 2021 325,000 2022 - 2023 184,124 $ 2,754,124 At September 30, 2018, the $4,043,854 in convertible promissory notes has a remaining debt discount of $321,292, leaving a net balance of $3,722,562. On various dates through May, 2015, the Company issued unsecured convertible promissory notes (the “2014-2015 Notes”), that matured on various dates and were extended sixty (60) months from the effective date of each Note. The 2014-2015 Notes bear interest at 10% per annum. The 2014-2015 Notes may be converted into shares of the Company’s common stock at conversion prices ranging from the lesser of $2.10 to $4.90 (subject to adjustment for stock splits, dividends, combinations and other similar transactions) or 50% of the lowest trade price on any trade day following issuance of the 2014-2015 Notes. In addition, for as long as the 2014-2015 Notes or other convertible notes in effect between the purchaser and the Company are outstanding, if the Company issues any security with terms more favorable than the terms of the 2014-2015 Notes or such other convertible notes or a term was not similarly provided to the purchaser of the 2014-2015 Notes or such other convertible notes, then such more favorable or additional term shall, at the purchaser’s option, become part of the 2014-2015 Notes and such other convertible notes. The conversion feature of the 2014-2015 Notes was considered a derivative in accordance with current accounting guidelines because of the reset conversion features of the 2014-2015 Notes. During the nine months ended September 30, 2018, the Company issued 50,762,187 shares of common stock, upon conversion of $121,600 in principal, plus accrued interest of $44,064, with a fair value loss on settlement of $328,540. As of September 30, 2018, the 2014-2015 Notes had an aggregate remaining balance of $1,364,400. As of September 30, 2018, the unsecured convertible promissory notes (the “OID Notes”) had an aggregate remaining principal balance of $184,124, plus accrued interest of $13,334 were amended. The OID Notes included an original issue discount and one time interest, which has been fully amortized. The OID Notes matured on December 31, 2017, and were extended through September 30, 2018. The OID Notes were convertible into shares of the Company’s common stock at a conversion price initially of $15.31. After the amendment, the conversion price changed to the lesser of $2.80 per share, or b) fifty percent (50%) of the lowest trade price of common stock recorded since the original effective date of this note, or c) the lowest effective price per share granted to any person or entity after the effective date. The conversion feature of the notes was considered a derivative in accordance with current accounting guidelines, because of the reset conversion features of the notes. As of September 30, 2018, the remaining balance on the note was $184,124. The Company issued various, unsecured convertible promissory notes (the “2015-2016 Notes”), on various dates ending on May 19, 2016. The 2015-2016 Notes matured and were extended from the date of each tranche through maturity dates ending on May 19, 2020. The 2015-2016 Notes bear interest at 10% per annum. The 2015-2016 Notes may be converted into shares of the Company’s common stock at conversion prices ranging from the lesser of $0.70 to $2.80 (subject to adjustment for stock splits, dividends, combinations and other similar transactions) or 50% of the lowest trade price on any trade day following issuance of the 2015-2016 Notes. The conversion feature of the 2015-2016 Notes was considered a derivative in accordance with current accounting guidelines because of the reset conversion features of the 2015-2016 Notes. The remaining balance of the 2015-2016 Notes as of September 30, 2018, was $1,325,000. The Company issued a convertible note (the “Dec 2015 Note”) in exchange for an accounts payable in the amount of $432,048, which could be converted into shares of the Company’s common stock after December 31, 2015. The Dec 2015 Note was accounted for under ASC 470, whereby, a beneficial conversion feature was recorded at time of issuance. The Dec 2015 Note did not meet the criteria of a derivative, and was accounted for as a beneficial conversion feature, which was amortized over the life of the Dec 2015 Note and recognized as interest expense in the financial statements. On January 1, 2016, the Dec 2015 Note met the criteria of a derivative and was accounted for under ASC 815. The Dec 2015 Note has zero stated interest rate, and the conversion price shall be equal to 75% of the average three lowest last sale prices traded during the 25 trading days immediately prior to conversion. As of September 30, 2018, the remaining balance on the Dec 2015 Note was $167,048. The Company issued a convertible note (the “Sep 2016 Note”) in exchange for an accounts payable in the amount of $430,896, which could be converted into shares of the Company’s common stock after September 15, 2016. The Sep 2016 Note was accounted for under ASC 470, whereby, a beneficial conversion feature was recorded at time of issuance. On September 15, 2016, the Sep 2016 Note met the criteria of a derivative and was accounted for under ASC 815. The Sep 2016 Note has zero stated interest rate, and the conversion price shall be equal to 75% of the average three lowest last sale prices traded during the 25 trading days immediately prior to conversion. The Sep 2016 Note did not meet the criteria of a derivative at the time it was entered into, and was accounted for as a beneficial conversion feature, which was amortized over the life of the Sep 2016 Note and recognized as interest expense in the financial statements. The conversion feature of the Sep 2016 Note was considered a derivative in accordance with current accounting guidelines because of the reset conversion feature of the Sep 2016 Note. The Company recorded amortization of debt discount, which was recognized as interest expense in the amount of $140,543 during the nine months ended September 30, 2018. As of September 30, 2018, the remaining balance on the Sep 2016 Note was $430,896. The Company issued an unsecured convertible promissory note (the “Dec 20 Note”), in the amount of $150,000 on December 20, 2017. The Dec 20 Note matures on December 20, 2018. The Dec 20 Note bears interest at 10% per annum. The Dec 20 Note may be converted into shares of the Company’s common stock at a conversion price of the lesser of $0.05 per share or 50% of the lowest trade price during the twenty trading days immediately before the conversion. The conversion feature of the Dec 20 Note was considered a derivative in accordance with current accounting guidelines because of the reset conversion features of the Dec 20 Note. During the nine months ended the Company issued 72,963,066 shares of common stock, upon conversion of principal in the amount of $123,500, plus accrued interest of $8,033, with a fair value loss on settlement of $197,877.The Company recorded amortization of debt discount, which was recognized as interest expense in the amount of $33,603 during the nine months ended September 30, 2018. As of September 30, 2018, the remaining balance on the note was $26,500. The Company issued an unsecured convertible promissory note (the “Dec 22 Note”), in the amount of $75,000 on December 22, 2017. The Dec 22 Note matures on December 22, 2018. The Dec 22 Note bears interest at 10% per annum. The Dec 22 Note may be converted into shares of the Company’s common stock at a conversion price of the lesser of $0.05 per share or 50% of the lowest trade price during the twenty trading days upon default of the prepayment date. The conversion feature of the Dec 22 Note was considered a derivative in accordance with current accounting guidelines because of the reset conversion features of the Dec 22 Note. During the nine months ended the Company issued 40,129,653 shares of common stock, upon conversion of principal in the amount of $69,864, with a fair value loss on settlement of $80,509. The Company recorded amortization of debt discount, which was recognized as interest expense in the amount of $6,450 during the nine months ended September 30, 2018. As of September 30, 2018, the remaining balance on the note was $5,136. The Company issued various unsecured convertible promissory notes (the “Jan-Aug 2018 Notes”), in the aggregate amount of $293,000 on various dates from January 24, 2018 thru August 28, 2018. The Jan-Aug 2018 Notes matures on dates from January 24, 2018 thru August 28, 2019. The Jan-Aug 2018 Notes bear interest at 10% per annum. The Jan-Aug 2018 Notes may be converted into shares of the Company’s common stock at a variable conversion price of 61% of the lowest one (1) trading day during the ten (10) trading days prior to conversion. The conversion feature of the Jan-Aug 2018 Notes was considered a derivative in accordance with current accounting guidelines because of the reset conversion features of the Jan-Aug 2018 Notes. During the nine months ended the Company issued 97,506,179 shares of common stock, upon conversion of principal in the amount of $174,000, plus accrued interest of $ 8,700, with a fair value loss on settlement of $175,027. The Company recorded amortization of debt discount, which was recognized as interest expense in the amount of $201,834 during the nine months ended September 30, 2018. As of September 30, 2018, the balance remaining on the Jan-Aug 2018 Notes was $119,000. The Company issued (2) unsecured convertible promissory notes (the “Feb 2018 Notes”), in the aggregate principal amount of $157,500 (each in the amount of $78,750) on February 23, 2018. The Feb 2018 Notes matures on February 23, 2019, and bear interest at 10% per annum. The first of the two Feb 2018 Notes shall be paid for by the Buyer. The second of the two Feb 2018 Notes shall initially be paid for by the issuance of an offsetting $78,750 secured note issued to the Company by the Buyer. The first of the two notes was funded with cash and the Company must agree to the funding of the second of the two Feb 2018 Notes, before it can be funded with cash. The second of the two Feb 2018 Notes is secured by assets of the Buyer having a fair market value of at least $78,750. The second of the Feb 2018 Notes was issued on August 23, 2018 in the amount of $78,750. The second of the Feb 2018 Notes may be converted into shares of the Company’s common stock at a conversion price of $0.03 or 50% discount of the lowest trading price during the twenty (20) trading days prior to conversion. The conversion feature of the Feb 2018 Notes was considered a derivative in accordance with current accounting guidelines because of the reset conversion features of the Feb 2018 Notes. During the nine months ended September 30, 2018, the Company issued 31,613,207 shares of common stock, upon conversion of principal in the amount of $35,750, plus accrued interest of $1,872, with a fair value loss on settlement of $78,927. The Company recorded amortization of debt discount, which was recognized as interest expense in the amount of $34,065 during the nine months ended September 30, 2018. As of September 30, 2018, the balance remaining on the Feb 2018 Notes was $121,750. The Company issued various unsecured convertible promissory notes (the “Apr & May 2018 Notes”), in the aggregate amount of $300,000 on various dates of April 2, 2018 and May 31, 2018. The Apr & May 2018 Notes matures on dates of April 2, 2019 and May 31, 2019. The Apr & May 2018 Notes bear interest at 10% per annum. The Apr & May 2018 Notes may be converted into shares of the Company’s common stock at a variable conversion price of 50% of the lesser of the lowest trading price twenty five (25) trading days prior to conversion. The conversion feature of the Apr & May 2018 Notes was considered a derivative in accordance with current accounting guidelines because of the reset conversion features of the Notes. The Company recorded amortization of debt discount, which was recognized as interest expense in the amount of $67,082 during the nine months ended September 30, 2018. As of September 30, 2018, the remaining balance on the Apr & May 2018 Notes were $300,000. We evaluated the financing transactions in accordance with ASC Topic 815, Derivatives and Hedging, and determined that the conversion feature of the convertible promissory notes was not afforded the exemption for conventional convertible instruments due to its variable conversion rate. The note has no explicit limit on the number of shares issuable so they did not meet the conditions set forth in current accounting standards for equity classification. The Company elected to recognize the note under paragraph 815-15-25-4, whereby, there would be a separation into a host contract and derivative instrument. The Company elected to initially and subsequently measure the note in its entirety at fair value, with changes in fair value recognized in earnings. The Company recorded a derivative liability representing the imputed interest associated with the embedded derivative. The derivative liability is adjusted periodically according to the stock price fluctuations. The derivative liability recognized in the financial statements as of September 30, 2018 was $6,158,447. |
Derivative Liabilities
Derivative Liabilities | 9 Months Ended |
Sep. 30, 2018 | |
Derivative Liabilities [Abstract] | |
DERIVATIVE LIABILITIES | 5. DERIVATIVE LIABILITIES We evaluated the financing transactions in accordance with ASC Topic 815, Derivatives and Hedging, and determined that the conversion feature of the convertible promissory note was not afforded the exemption for conventional convertible instruments due to its variable conversion rate. The note has no explicit limit on the number of shares issuable so they did not meet the conditions set forth in current accounting standards for equity classification. The Company elected to recognize the note under paragraph 815-15-25-4, whereby, there would be a separation into a host contract and derivative instrument. The Company elected to initially and subsequently measure the note in its entirety at fair value, with changes in fair value recognized in earnings. The Company recorded a derivative liability representing the imputed interest associated with the embedded derivative. The derivative liability is adjusted periodically per the stock price fluctuations. The convertible notes issued and described in Note 4 do not have fixed settlement provisions because their conversion prices are not fixed. The conversion feature has been characterized as derivative liabilities to be re-measured at the end of every reporting period with the change in value reported in the statement of operations. During the nine months ended September 30, 2018, as a result of the convertible notes (“Notes”) issued that were accounted for as derivative liabilities, we determined that the fair value of the conversion feature of the convertible notes at issuance was $566,312, based upon a Binomial-Model calculation. We recorded the full value of the derivative as a liability at issuance with an offset to valuation discount, which will be amortized over the life of the Notes. During the nine months ended September 30, 2018, the Company converted $524,714 in principal of convertible promissory notes, plus accrued interest of $62,668. As a result of the conversion of these notes and the change in fair value of the remaining notes, the Company recorded a loss on conversion of debt in the amount of $860,880 in the statement of operations for the nine months ended September 30, 2018. At September 30, 2018, the fair value of the derivative liability was $6,158,447. For purpose of determining the fair market value of the derivative liability for the embedded conversion, the Company used the Binomial lattice valuation model. The significant assumptions used in the Binomial lattice valuation model for the derivative are as follows: 9/30/2018 Risk free interest rate 2.15% - 2.94% Stock volatility factor 131.0% - 241.0.0% Weighted average expected option life 3 months - 5 years Expected dividend yield None |
Options and Warrants
Options and Warrants | 9 Months Ended |
Sep. 30, 2018 | |
Options and Warrants [Abstract] | |
OPTIONS AND WARRANTS | 6. OPTIONS AND WARRANTS Options The Board of Directors adopted Equity Incentive Stock Option Plans for the purposes of granting stock options to its employees and others providing services to the Company, which reserves and sets aside for the granting of options for 3,614,285 shares of common stock. The Options granted under these plans may be either incentive options or nonqualified options and shall be administered by the Company’s Board of Directors. Each option shall be exercisable to the nearest whole share, in installments or otherwise, as the respective option agreements may provide. Notwithstanding any other provision of the Plans or of any option agreement, each option shall expire on the date specified in the option agreement, which date shall not be later than the fifth (5th) anniversary from the effective date of grant. Each option shall be exercisable to the nearest whole share, in installments or otherwise, as the respective option agreements may provide. The stock options mature on July 5, 2019 through October 17, 2021, at exercise prices of $1.31 and $31.15. With respect to Non-Statutory Options granted to employees, directors or consultants, the Board of Directors or Committee of the Board of Directors may specify such period for exercise that the option shall automatically terminate following the termination of employment or services as to shares covered by the option as the Board of Directors or Committee of the Board of Directors deems reasonable and appropriate. A summary of the Company’s stock option activity and related information follows: September 30, 2018 Weighted Number of average exercise Options price Outstanding, beginning of period 3,697,495 $ 1.51 Granted - - Exercised - - Forfeited/Expired (88,352 ) $ 0.91 Outstanding, end of period 3,609,143 $ 1.31 Exercisable at the end of the period 2,685,690 $ 1.03 Weighted average fair value of options granted during the period $ - The weighted average remaining contractual life of options outstanding issued under the Plan as of September 30, 2018 was as follows: Weighted Average Stock Stock Remaining Exercisable Options Options Contractual Prices Outstanding Exercisable Life (years) $ 6.65 18,571 18,571 6.02 $ 31.15 9,143 9,143 3.84 - 3.92 $ 1.31 3,581,429 2,657,976 2.02 – 2.50 3,609,143 2,685,690 Stock-based compensation expense recognized during the year is based on the value of the portion of stock-based payment awards that is ultimately expected to vest. Stock-based compensation expense recognized in the financial statements of operations during the nine months ended September 30, 2018 and 2017 were $38,361 and $71,603, respectively. Restricted Stock to CEO On May 12, 2016, the Company entered into a Restricted Stock Grant Agreement (the “RSGA”) with its Chief Executive Officer, Riggs Eckelberry, to create management incentives to improve the economic performance of the Company and to increase its value and stock price. All shares issuable under the RSGA are performance based shares and none have yet vested nor have any been issued. The RSGA provides for the issuance of up to 1,714,286 shares of the Company’s common stock to the Employees provided certain milestones are met in certain stages; a) If the Company’s consolidated gross revenue, calculated in accordance with generally accepted accounting principles, consistently applied, equals or exceeds $15,000,000 for the trailing twelve month period as reported in the Company’s quarterly or annual financial statements, the Company will issue up to 857,143 shares of its common stock; b) If the Company’s consolidated operating profit ( Operating Profit = Operating Revenue - Cost of Goods Sold - Operating Expenses - Depreciation & Amortization), On August 10, 2016, the Company entered into a Restricted Stock Grant Agreement (the “August RSGA”) with its Chief Executive Officer, Riggs Eckelberry, to create management incentives to improve the economic performance of the Company and to increase its value and stock price. All shares issuable under the August RSGA are performance based shares and none have yet vested nor have any been issued. The August RSGA provides for the issuance of up to 1,714,286 shares of the Company’s common stock to the CEO provided certain milestones are met in certain stages; a) If the Company’s consolidated gross revenue, calculated in accordance with generally accepted accounting principles, consistently applied, equals or exceeds $15,000,000 for the trailing twelve month period, the Company will issue up to 857,143 shares of its common stock; b) If the Company’s consolidated operating profit ( Operating Profit = Operating Revenue - Cost of Goods Sold - Operating Expenses - Depreciation & Amortization), On May 16, 2018, the Company entered into a Restricted Stock Grant Agreement (the “May RSGA”) with its Chief Executive Officer, Riggs Eckelberry, to create management incentives to improve the economic performance of the Company and to increase its value and stock price. All shares issuable under the May RSGA are performance based shares and none have yet vested nor have any been issued. The May RSGA provides for the issuance of up to 30,000,000 shares of the Company’s common stock to the CEO provided certain milestones are met in certain stages; a) If the Company’s consolidated gross revenue, calculated in accordance with generally accepted accounting principles, consistently applied, equals or exceeds $15,000,000 for the trailing twelve month period, the Company will issue up to 15,000,000 shares of its common stock; b) If the Company’s consolidated operating profit ( Operating Profit = Operating Revenue - Cost of Goods Sold - Operating Expenses - Depreciation & Amortization), On September 28, 2018, the Company entered into a Restricted Stock Grant Agreement (the “September RSGA”) with its Chief Executive Officer, Riggs Eckelberry, to create management incentives to improve the economic performance of the Company and to increase its value and stock price. All shares issuable under the September RSGA are performance based shares and none have yet vested nor have any been issued. The September RSGA provides for the issuance of up to 30,000,000 shares of the Company’s common stock to the CEO provided certain milestones are met in certain stages; a) If the Company’s consolidated gross revenue, calculated in accordance with generally accepted accounting principles, consistently applied, equals or exceeds $15,000,000 for the trailing twelve month period, the Company will issue up to 15,000,000 shares of its common stock; b) If the Company’s consolidated operating profit ( Operating Profit = Operating Revenue - Cost of Goods Sold - Operating Expenses - Depreciation & Amortization), Restricted Stock to Employees and Consultants On May 12, 2016, the Company entered into a Restricted Stock Grant Agreement (the “First Employee RSGA”) with an employee, to create management incentives to improve the economic performance of the Company and to increase its value and stock price. All shares issuable under the First Employee RSGA are performance based shares and none have yet vested nor have any been issued. The First Employee RSGA provides for the issuance of up to 857,143 shares of the Company’s common stock to the employee provided certain milestones are met in certain stages; a) If the Company’s consolidated gross revenue, calculated in accordance with generally accepted accounting principles, consistently applied, equals or exceeds $15,000,000 for the trailing twelve month period as reported in the Company’s quarterly or annual financial statements, the Company will issue up to 428,571 shares of its common stock; b) If the Company’s consolidated operating profit ( Operating Profit = Operating Revenue - Cost of Goods Sold - Operating Expenses - Depreciation & Amortization), On May 12, 2016, the Company entered into a Restricted Stock Grant Agreement (the “Second Employee RSGA”) with an employee, to create management incentives to improve the economic performance of the Company and to increase its value and stock price. All shares issuable under the Second Employee RSGA are performance based shares and none have yet vested nor have any been issued. The Second Employee RSGA provides for the issuance of up to 571,429 shares of the Company’s common stock to the employee provided certain milestones are met in certain stages; a) If the Company’s consolidated gross revenue, calculated in accordance with generally accepted accounting principles, consistently applied, equals or exceeds $15,000,000 for the trailing twelve month period as reported in the Company’s quarterly or annual financial statements, the Company will issue up to 285,714 shares of its common stock; b) If the Company’s consolidated operating profit ( Operating Profit = Operating Revenue - Cost of Goods Sold - Operating Expenses - Depreciation & Amortization), On August 10, 2016, the Company entered into a Restricted Stock Grant Agreement (the “Consultants RSGA”) with two of its’ consultants, to create management incentives to improve the economic performance of the Company and to increase its value and stock price. All shares issuable under the Consultants RSGA are performance based shares and none have yet vested nor have any been issued. The Consultants RSGA provides to each of the consultants the issuance of up to 285,714 shares of the Company’s common stock provided certain milestones are met in certain stages; a) If the Company’s consolidated gross revenue, calculated in accordance with generally accepted accounting principles, consistently applied, equals or exceeds $15,000,000 for the trailing twelve month period, the Company will issue to each of the consultants up to 142,857 shares of its common stock; b) If the Company’s consolidated operating profit ( Operating Profit = Operating Revenue - Cost of Goods Sold - Operating Expenses - Depreciation & Amortization), On November 10, 2017, the Company entered into a Restricted Stock Grant Agreement (the “Third Employee RSGA”) with nine of its’ consultants, to create management incentives to improve the economic performance of the Company and to increase its value and stock price. All shares issuable under the Second Consultants RSGA are performance based shares and none have yet vested nor have any been issued. The Second Consultants RSGA provides to the respective consultants the issuance of an aggregate of 2,000,000 shares of the Company’s common stock provided certain milestones are met in certain stages; a) If the Company’s consolidated gross revenue, calculated in accordance with generally accepted accounting principles, consistently applied, equals or exceeds $15,000,000 for the trailing twelve month period, the Company will issue to the respective consultants an aggregate of 1,000,000 shares of its common stock; b) If the Company’s consolidated operating profit ( Operating Profit = Operating Revenue - Cost of Goods Sold - Operating Expenses - Depreciation & Amortization), On May 16, 2018, the Company entered into a Restricted Stock Grant Agreement (the “Employee and Consultant RSGA”) with one of its’ employee and one consultant, to create management incentives to improve the economic performance of the Company and to increase its value and stock price. All shares issuable under the Employee and Consultant RSGA are performance based shares and none have yet vested nor have any been issued. The Employee and Consultant RSGA provides to the employee and consultant the issuance of an aggregate of 4,000,000 shares of the Company’s common stock provided certain milestones are met in certain stages; a) If the Company’s consolidated gross revenue, calculated in accordance with generally accepted accounting principles, consistently applied, equals or exceeds $15,000,000 for the trailing twelve month period, the Company will issue to the respective consultants in various amounts an aggregate of 2,000,000 shares in common stock; b) If the Company’s consolidated operating profit ( Operating Profit = Operating Revenue - Cost of Goods Sold - Operating Expenses - Depreciation & Amortization), On August 9, 2018, the Company entered into a Restricted Stock Grant Agreement (the “Employees and Consultants RSGA”) with two of its’ consultants and two employees, to create management incentives to improve the economic performance of the Company and to increase its value and stock price. All shares issuable under the Employees and Consultants RSGA are performance based shares and none have yet vested nor have any been issued. The Employees and Consultants RSGA provides to the employees and consultants the issuance of an aggregate of 8,500,000 shares of the Company’s common stock provided certain milestones are met in certain stages; a) If the Company’s consolidated gross revenue, calculated in accordance with generally accepted accounting principles, consistently applied, equals or exceeds $15,000,000 for the trailing twelve month period, the Company will issue to the respective consultants in various amounts an aggregate of 4,250,000 shares in common stock; b) If the Company’s consolidated operating profit ( Operating Profit = Operating Revenue - Cost of Goods Sold - Operating Expenses - Depreciation & Amortization), On September 28, 2018, the Company entered into a Restricted Stock Grant Agreement (the “Sep 2018 Consultants RSGA”) with two of its’ consultants, to create management incentives to improve the economic performance of the Company and to increase its value and stock price. All shares issuable under the Sep 2018 Consultants RSGA are performance based shares and none have yet vested nor have any been issued. The Sep 2018 Consultants RSGA provides to the consultants the issuance of an aggregate of 27,000,000 shares of the Company’s common stock provided certain milestones are met in certain stages; a) If the Company’s consolidated gross revenue, calculated in accordance with generally accepted accounting principles, consistently applied, equals or exceeds $15,000,000 for the trailing twelve month period, the Company will issue to the respective consultants in various amounts an aggregate of 13,500,000 shares in common stock; b) If the Company’s consolidated operating profit ( Operating Profit = Operating Revenue - Cost of Goods Sold - Operating Expenses - Depreciation & Amortization), Warrants As of September 30, 2018, the Company issued no warrants during the period. A summary of the Company’s warrant activity and related information follows for the nine months ended September 30, 2018: September 30, 2018 Weighted Number average of exercise Warrants price Outstanding -beginning of the period 53,562,961 $ 5.40 Granted 244,087,101 - Exercised - - Forfeited (36,500,649 ) $ (0.093 ) Outstanding - end of the period 261,149,413 $ 0.0018 At September 30, 2018, the weighted average remaining contractual life of warrants outstanding: Weighted Average Remaining Exercisable Warrants Warrants Contractual Prices Outstanding Exercisable Life (years) $ 0.080 10,237,388 10,237,388 0.17 $ 0.012 6,824,924 6,824,924 0.67 $ 0.250 244,087,101 244,087,101 2.87 261,149,413 261,149,413 At September 30, 2018, the aggregate intrinsic value of the warrants outstanding was $0. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 9 Months Ended |
Sep. 30, 2018 | |
Revenue from Contracts with Customers [Abstract] | |
REVENUE FROM CONTRACTS WITH CUSTOMERS | 7. REVENUE FROM CONTRACTS WITH CUSTOMERS Equipment Contracts Revenues and related costs on equipment contracts are recognized as the performance obligations for work are satisfied over time in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers. Under ASC 606, revenue and associated profit, will be recognized as the customer obtains control of the goods and services promised in the contract (i.e., performance obligations). All un-allocable indirect costs and corporate general and administrative costs are charged to the periods as incurred. However, in the event a loss on a contract is foreseen, the Company will recognize the loss as it is determined. The following table represents a disaggregation of revenue by type of good or service from contracts with customers for the six months ended September 30, 2018 and 2017. Nine Months Ended September 30, 2018 2018 2017 Equipment Contracts $ 2,486,426 $ 1,325,617 Component Sales 1,003,879 896,333 Services Sales 157,956 61,941 Licensing Fees 30,000 11,000 $ 3,678,261 $ 2,294,891 Revenue recognition for other sales arrangements, such as sales for components, service and licensing fees will remain materially consistent. Contract assets represents revenues recognized in excess of amounts billed on contracts in progress. Contract liabilities represents billings in excess of revenues recognized on contracts in progress. Assets and liabilities related to long-term contracts are included in current assets and current liabilities in the accompanying balance sheets, as they will be liquidated in the normal course of the contract completion. The contract asset for the nine months ending September 30, 2018 was $36,761 and for the year ending December 31, 2017 was $88,589. The contract liability for the nine months ending September 30, 2018 was $250,184 and for the year ending December 31, 2017 was $154,048. During the period ended September 30, 2018, Progressive Water Treatment a wholly-owned subsidiary of OriginClear, Inc., acquired a new division, which offers a unique product line of prefabricated water treatment systems. The Company has contracted with Modern Water System to commercialize his inventions. |
Financial Assets
Financial Assets | 9 Months Ended |
Sep. 30, 2018 | |
Financial Assets [Abstract] | |
FINANCIAL ASSETS | 8. FINANCIAL ASSETS Convertible Note Receivable The Company purchased a 10% convertible note in the amount of $80,000, through a private placement with Water Technologies International, Inc (“WTII”). The Note is convertible into common stock of WTII at a price of 65% of the lowest trading price for the ten (10) trading days immediately prior to the conversion date. The conversion price shall not be lower than a price of $0.0001 per share. As of September 30, 2018, the note included principal of $80,000 plus accrued interest of $2,883. Fair value investment in Securities The Company purchased 10,000,000 shares of WTII stock through a private placement for cash of $100,000. ASU 2016-01 requires equity investments to be measured at fair value with changes in fair value recognized in net income. During the period the Company exchanged the shares for services in the amount of $80,000, and recognized a loss of $20,000 in the statement of operations. During the period ended September 30, 2018, the Company exchanged the shares for services in the amount of $80,000, incurring a loss on investment of $20,000. On May 15, 2018, the Company received 4,000 shares of WTII preferred stock for the use of OriginClear, Inc. technology associated with their proprietary electro water separation system. The stock was valued at fair market value of $0.0075 for a price of $30,000 on the date of issuance. The preferred shares are convertible into 4,000,000 shares of common stock. The Company analyzed the licensing agreement using ASU 606 to determine the timing of revenue recognition. The licensing of the intellectual property (IP) is distinct from the non-license goods or services and has significant standalone functionality that provides a benefit or value. The functionality will not change during the license period due to the licensor’s activities. Because the significant standalone functionality was delivered immediately, the revenue was recognized in the financial statements as of June 30, 2018. As of September 30, 2018, the fair value of the preferred shares was $16,400. |
Loans Payable
Loans Payable | 9 Months Ended |
Sep. 30, 2018 | |
Loans Payable [Abstract] | |
LOANS PAYABLE | 9. LOANS PAYABLE Secured Loans Payable The Company entered into short term loans with various lenders for capital expansion secured by the Company’s assets in the amount of $1,749,970, which included finance cost of $624,810. The finance cost was amortized over the terms of the loans, which have various maturity dates ranging from October 2018 through February 2019. The term of the loans range from two months to six months. The net balance as of September 30, 2018 was $698,771, the finance cost of $378,775. Promissory Note Payable The Company entered into a promissory note payable on July 18, 2018 for the sum of $75,000. The principal consists of $67,500 plus a $7,500 origination fee. The interest is sixty-nine percent per annum. The first payment of $6,330 is due September 1, 2018, and $4,318 thereafter. The maturity date of the Note is August 1, 2028. The note is personally guaranteed by the Company’s CEO. As of September 30, 2018, the maturities are summarized as follows: Promissory note payable $ 74,995 Less current portion 93 Long term portion $ 74,902 Long term maturities for the next five years are as follows: 2019 $ 181 2020 355 2021 693 2022 1,356 2023 thru 2028 72,317 $ 74,902 |
Loans Payable - Related Party
Loans Payable - Related Party | 9 Months Ended |
Sep. 30, 2018 | |
Loans Payable - Related Party [Abstract] | |
LOANS PAYABLE - RELATED PARTY | 10. LOANS PAYABLE – RELATED PARTY The Company’s CEO loaned the Company $248,870 during the nine months ended September 30, 2018. The loans bear interest at various rates to be repaid over a period of three (3) years at various maturity dates. The funds were used for operating expenses. Principal payments were made in the amount of $13,626, leaving a balance of $235,243 as of September 30, 2018. |
Capital Leases
Capital Leases | 9 Months Ended |
Sep. 30, 2018 | |
Capital Leases [Abstract] | |
CAPITAL LEASES | 11. CAPITAL LEASES The Company entered into a capital lease for the purchase of equipment during the nine months ended September 30, 2018. The lease is for a sixty (60) month term, with a purchase option at the end of the lease for $1.00. As of September 30, 2018, the maturities are summarized as follows: Capital lease $ 38,278 Less current portion 9,088 Total long-term liabilities $ 29,190 Long term maturities for the next four years are as follows: Period Ending September 30, 2019 $ 2,272 2020 9,088 2021 9,088 2022 8,742 $ 29,190 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 12. COMMITMENTS AND CONTINGENCIES Operating Lease – Related Party The Company entered into a month-to-month lease agreement with a shareholder of the Company for office space in McKinney, Texas at a base rent of $4,750 per month. Operating Lease – Equipment The Company entered into a five (5) year equipment lease in the amount of $45,440, which was recorded as a capital lease. There are no escalation or renewal options associated with this lease. The lease has a purchase option to buy the equipment at the end of the lease for one dollar ($1). The monthly lease payments are $757 per month. The future minimum lease payments due as September 30, 2018 is $40,551. Warranty Reserve Generally, a PWT project is guaranteed against defects in material and workmanship for one year from the date of completion, while certain areas of construction and materials may have guarantees extending beyond one year. The Company has various insurance policies relating to the guarantee of completed work, which in the opinion of management will adequately cover any potential claims. A warranty reserve has been provided under PWT based on the opinion of management and based on Company history in the amount of $20,000. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 13. SUBSEQUENT EVENTS Management has evaluated subsequent events according to the requirements of ASC TOPIC 855 and has determined that there are the following subsequent events: Between October 3, 2018 and November 8, 2018, holders of convertible promissory notes converted an aggregate principal and interest amount of $307,250 into an aggregate of 492,630,452 shares of the Company’s common stock. Between October 23, 2018 and October 31, 2018, the Company issued to consultants an aggregate of 45,673,913 shares of the Company’s common stock for services. In connection with certain one-time make good agreements, on October 31, 2018, the Company issued an aggregate of 12,413,226 shares of its common stock to certain holders of its common stock. Between October 2, 2018 and November 6, 2018, the Company entered into subscription agreements with certain accredited investors pursuant to which the Company sold an aggregate of 616 of the Company’s Series F preferred stock for an aggregate purchase price of $616,000. In connection with the Series F Certificate of Designation and subscription agreements entered into with investors, between October 2, 2018 and November 6, 2018, the Company issued an aggregate of 168,435,051 shares of its common stock to certain holders of its Series F preferred stock. |
Summary of Significant Accoun_2
Summary of Significant Accounting Polices (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Summary of Significant Accounting Polices [Abstract] | |
Principles of Consolidation | Principles of Consolidation The accompanying unaudited condensed consolidated financial statements include the accounts of OriginClear, Inc. and its wholly owned operating subsidiaries, Progressive Water Treatment, Inc., and OriginClear Technology Limited. All material intercompany transactions have been eliminated upon consolidation of these entities. |
Loss per Share Calculations | Loss per Share Calculations Basic loss per share calculations are computed by dividing income (loss) available to common shareholders by the weighted-average number of common shares available. Diluted earnings per share is computed similar to basic earnings per share except that the denominator is increased to include securities or other contracts to issue common stock that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. The Company has excluded 3,609,143 stock options, 261,149,413 warrants, convertible debt of $3,494,546 and shares issuable from convertible preferred stock for the nine months ended September 30, 2018, because their impact on the loss per share is anti-dilutive. The Company did include convertible debt of $549,308 in its diluted earnings per share, because their impact on the earnings per share is dilutive. The Company has excluded 3,697,495 of stock options, 474,335 warrants, and the shares issuable from convertible debt of $3,667,068 and shares issuable from convertible preferred stock for the nine months ended September 30, 2018, because their impact on the loss per share is anti-dilutive. |
Work-in-Process | Work-in-Process The Company recognizes as an asset the accumulated costs for work-in-process on projects expected to be delivered to customers. Work in Process includes the cost price of materials and labor related to the construction of equipment to be sold to customers. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, 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. Actual results could differ from those estimates. Significant estimates include estimates used to review the Company’s impairments and estimations of long-lived assets, revenue recognition on percentage of completion type contracts, allowances for uncollectible accounts, warranty reserves, inventory valuation, debt beneficial conversion features, fair value investments, valuations of non-cash capital stock issuances and the valuation allowance on deferred tax assets. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable in the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. |
Stock-Based Compensation | Stock-Based Compensation The Company periodically issues stock options and warrants to employees and non-employees in non-capital raising transactions for services and for financing costs. The Company accounts for stock option and warrant grants issued and vesting to employees based on the authoritative guidance provided by the Financial Accounting Standards Board whereas the value of the award is measured on the date of grant and recognized over the vesting period. The Company accounts for stock option and warrant grants issued and vesting to non-employees in accordance with the authoritative guidance of the Financial Accounting Standards Board whereas the value of the stock compensation is based upon the measurement date as determined at either a) the date at which a performance commitment is reached, or b) at the date at which the necessary performance to earn the equity instruments is complete. Non-employee stock-based compensation charges generally are amortized over the vesting period on a straight-line basis. In certain circumstances where there are no future performance requirements by the non-employee, option grants are immediately vested and the total stock-based compensation charge is recorded in the period of the measurement date. |
Revenue Recognition | Revenue Recognition We recognize revenue when services are performed, and at the time of shipment of products, provided that evidence of an arrangement exists, title and risk of loss have passed to the customer, fees are fixed or determinable, and collection of the related receivable is reasonably assured. Revenues and related costs on construction contracts are recognized as the performance obligations for work are satisfied over time in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers. Under ASC 606, revenue and associated profit, will be recognized as the customer obtains control of the goods and services promised in the contract (i.e., performance obligations). All un-allocable indirect costs and corporate general and administrative costs are charged to the periods as incurred. However, in the event a loss on a contract is foreseen, the Company will recognize the loss as it is determined. Revisions in cost and profit estimates during the course of the contract are reflected in the accounting period in which the facts for the revisions become known. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Changes in job performance, job conditions, and estimated profitability, including those arising from contract penalty provisions, and final contract settlements, may result in revisions to costs and income, which are recognized in the period the revisions are determined. Contract receivables are recorded on contracts for amounts currently due based upon progress billings, as well as retention, which are collectible upon completion of the contracts. Accounts payable to material suppliers and subcontractors are recorded for amounts currently due based upon work completed or materials received, as are retention due subcontractors, which are payable upon completion of the contract. General and administrative expenses are charged to operations as incurred and are not allocated to contract costs. |
Contract Receivable | Contract Receivable The Company bills its customers in accordance with contractual agreements. The agreements generally require billing to be on a progressive basis as work is completed. Credit is extended based on evaluation of clients financial condition and collateral is not required. The Company maintains an allowance for doubtful accounts for estimated losses that may arise if any customer is unable to make required payments. Management performs a quantitative and qualitative review of the receivables past due from customers on a monthly basis. The Company records an allowance against uncollectible items for each customer after all reasonable means of collection have been exhausted, and the potential for recovery is considered remote. The allowance for doubtful accounts was approximately $6,996 as of September 30, 2018 and December 31, 2017, respectively. The net contract receivable balance was $384,937 and $490,441 at September 30, 2018 and December 31, 2017, respectively. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair Value of Financial Instruments, requires disclosure of the fair value information, whether or not recognized in the balance sheet, where it is practicable to estimate that value. As of September 30, 2018, the balances reported for cash, contract receivables, cost in excess of billing, prepaid expenses, accounts payable, billing in excess of cost, and accrued expenses approximate the fair value because of their short maturities. We adopted ASC Topic 820 for financial instruments measured as fair value on a recurring basis. ASC Topic 820 defines fair value, established a framework for measuring fair value in accordance with accounting principles generally accepted in the United States and expands disclosures about fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 established a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). These tiers include: ● Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets; ● Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and ● Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. The following table presents certain investments and liabilities of the Company’s financial assets and liabilities measured and recorded at fair value on the Company’s balance sheets on a recurring basis and their level within the fair value hierarchy as of September 30, 2018. Total (Level 1) (Level 2) (Level 3) Investment at fair value-securities $ 16,400 $ - $ - $ 16,400 Total Assets measured at fair value $ 16,400 $ - $ - $ 16,400 The following is a reconciliation of the fair value securities for which level 3 inputs were used in determining the approximate fair value: Balance as of May 17, 2018 $ 130,000 Investment exchanged for services (80,000 ) Net realized loss on asset (20,000 ) Net unrealized loss on asset (13,600 ) Balance as of September 30, 2018 $ 16,400 Total (Level 1) (Level 2) (Level 3) Derivative Liability $ 6,158,447 $ - $ - $ 6,158,447 Total liabilities measured at fair value $ 6,158,447 $ - $ - $ 6,158,447 The following is a reconciliation of the derivative liability for which level 3 inputs were used in determining the approximate fair value: Balance as of January 1, 2018 $ 5,531,183 Fair Value of derivative liabilities issued 566,312 Loss on change in derivative liability 60,952 Balance as of September 30, 2018 $ 6,158,447 For purpose of determining the fair market value of the derivative liability, the Company used Binomial lattice formula valuation model. The significant assumptions used in the Binomial lattice formula valuation of the derivative are as follows: 9/30/2018 Risk free interest rate 2.15% - 2.94% Stock volatility factor 131.0% - 241.0% Weighted average expected option life 3 months - 5 years Expected dividend yield None |
Segment Reporting | Segment Reporting The Company’s business currently operates in one segment based upon the Company’s organizational structure and the way in which the operations are managed and evaluated. |
Marketable Securities | Marketable Securities The Company adopted ASU 2016-01, “Financial Instruments – Recognition and Measurement of Financial Assets and Financial Liabilities.” ASU 2016-01 requires investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income. It requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purpose, and separate presentation of financial assets and financial liabilities by measurement category and form of financial asset. It eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost. The Company has evaluated the potential impact this standard may have on the condensed consolidated financial statements and determined that it had a significant impact on the condensed consolidated financial statements. The Company accounts for its investment in Water Technologies International, Inc. as available-for-sale securities, and the unrealized gain on the available-for-sale securities is recognized in net income. |
Licensing agreement | Licensing agreement The Company analyzed the licensing agreement using ASU 606 to determine the timing of revenue recognition. The licensing of the intellectual property (IP) is distinct from the non-license goods or services and has significant standalone functionality that provides a benefit or value. The functionality will not change during the license period due to the licensor’s activities. Because the significant standalone functionality is delivered immediately, the revenue is generally recognized when the license is delivered. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-2, which creates ASC Topic 842, “Leases.” This update increases transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This guidance is effective for interim and annual reporting periods beginning after December 15, 2018. We are evaluating what impact, if any, the adoption of this guidance will have on our financial condition, results of operations, cash flows or financial disclosures. In August 2017, FASB issued accounting standards update ASU-2017-12, “D” (Topic 815) – “Targeted Improvements to Accounting for Hedging Activities”, to require an entity to present the earnings effect of the hedging instrument in the same statement line item in which the earnings effect of the hedged item is reported. The amendments in this update are effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods with the fiscal years beginning after December 15, 2020. Early adoption is permitted in any interim period after issuance of the update. The Company is currently evaluating the impact of the adoption of ASU 2017-12 on the Company’s financial statements. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (ASC 606), to clarify the principles of recognizing revenue and create common revenue recognition guidance between U.S. GAAP and International Financial Reporting Standards. Under ASC 606, revenue is recognized when a customer obtains control of promised goods or services and is recognized at an amount that reflects the consideration expected to be received in exchange for such goods or services. In addition, ASC 606 requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The ASC is effective for fiscal years beginning after December 15, 2017. The Company has adopted ASC 606 beginning on January 1, 2018. The adoption of ASC 606 did not have a significant impact on the Company’s revenue recognition policies. See Note 7 for additional disclosures in accordance with the new revenue recognition standard. The Company adopted ASU 2016-01, “Financial Instruments - Overall: Recognition and Measurement of Financial Assets and Financial Liabilities.” ASU 2016-01 requires equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income, requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset, and eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost. The Company has evaluated the potential impact this standard may have on the condensed consolidated financial statements and determined that it had a significant impact on the condensed consolidated financial statements. In June 2018, FASB issued accounting standards update ASU 2018-07, (Topic 505) – “Shared-Based Payment Arrangements with Nonemployees”, which simplifies the accounting for share-based payments granted to nonemployees for goods and services. Under the ASU, most of the guidance on such payments to nonemployees will be aligned with the requirements for share-based payments granted to employees. Under the ASU 2018-07, the measurement of equity-classified nonemployee share-based payments will be fixed on the grant date, as defined in ASC 718, and will use the term nonemployee vesting period, rather than requisite service period. The amendments in this update are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted if financial statements have not yet been issued. The Company is currently evaluating the impact of the adoption of ASU 2018-07 on the Company’s financial statements. Management reviewed currently issued pronouncements and does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the accompanying condensed financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Polices (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Summary of Significant Accounting Polices [Abstract] | |
Schedule of fair value of financial instruments | Total (Level 1) (Level 2) (Level 3) Investment at fair value-securities $ 16,400 $ - $ - $ 16,400 Total Assets measured at fair value $ 16,400 $ - $ - $ 16,400 |
Schedule of reconciliation of the fair value securities for which level 3 inputs | Balance as of May 17, 2018 $ 130,000 Investment exchanged for services (80,000 ) Net realized loss on asset (20,000 ) Net unrealized loss on asset (13,600 ) Balance as of September 30, 2018 $ 16,400 |
Schedule of fair value of (liability) financial instruments | Total (Level 1) (Level 2) (Level 3) Derivative Liability $ 6,158,447 $ - $ - $ 6,158,447 Total liabilities measured at fair value $ 6,158,447 $ - $ - $ 6,158,447 |
Schedule of reconciliation of the derivative liability for which level 3 inputs | Balance as of January 1, 2018 $ 5,531,183 Fair Value of derivative liabilities issued 566,312 Loss on change in derivative liability 60,952 Balance as of September 30, 2018 $ 6,158,447 |
Schedule of fair market value of derivative liability assumptions | 9/30/2018 Risk free interest rate 2.15% - 2.94% Stock volatility factor 131.0% - 241.0% Weighted average expected option life 3 months - 5 years Expected dividend yield None |
Convertible Promissory Notes (T
Convertible Promissory Notes (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Convertible Promissory Notes [Abstract] | |
Schedule of outstanding convertible promissory notes | Convertible Promissory Notes, net of debt discount $ 3,722,562 Less current portion 968,438 Total long-term liabilities $ 2,754,124 |
Schedule of maturities of long-term debt | Period Ending September 30, Amount 2020 2,245,000 2021 325,000 2022 - 2023 184,124 $ 2,754,124 |
Derivative Liabilities (Tables)
Derivative Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Derivative Liabilities [Abstract] | |
Schedule of fair market value of the derivative liability | 9/30/2018 Risk free interest rate 2.15% - 2.94% Stock volatility factor 131.0% - 241.0.0% Weighted average expected option life 3 months - 5 years Expected dividend yield None |
Options and Warrants (Tables)
Options and Warrants (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Options and Warrants [Abstract] | |
Schedule of stock option activity | September 30, 2018 Weighted Number of average exercise Options price Outstanding, beginning of period 3,697,495 $ 1.51 Granted - - Exercised - - Forfeited/Expired (88,352 ) $ 0.91 Outstanding, end of period 3,609,143 $ 1.31 Exercisable at the end of the period 2,685,690 $ 1.03 Weighted average fair value of options granted during the period $ - |
Schedule of weighted average remaining contractual life of options outstanding issued plan | Weighted Average Stock Stock Remaining Exercisable Options Options Contractual Prices Outstanding Exercisable Life (years) $ 6.65 18,571 18,571 6.02 $ 31.15 9,143 9,143 3.84 - 3.92 $ 1.31 3,581,429 2,657,976 2.02 – 2.50 3,609,143 2,685,690 |
Schedule of warrant activity | September 30, 2018 Weighted Number average of exercise Warrants price Outstanding -beginning of the period 53,562,961 $ 5.40 Granted 244,087,101 - Exercised - - Forfeited (36,500,649 ) $ (0.093 ) Outstanding - end of the period 261,149,413 $ 0.0018 |
Schedule of weighted average remaining contractual life of warrants outstanding | Weighted Average Remaining Exercisable Warrants Warrants Contractual Prices Outstanding Exercisable Life (years) $ 0.080 10,237,388 10,237,388 0.17 $ 0.012 6,824,924 6,824,924 0.67 $ 0.250 244,087,101 244,087,101 2.87 261,149,413 261,149,413 |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Revenue from Contracts with Customers [Abstract] | |
Schedule of disaggregation of revenue by type of good or service from contracts with customers | Nine Months Ended September 30, 2018 2018 2017 Equipment Contracts $ 2,486,426 $ 1,325,617 Component Sales 1,003,879 896,333 Services Sales 157,956 61,941 Licensing Fees 30,000 11,000 $ 3,678,261 $ 2,294,891 |
Loans Payable (Tables)
Loans Payable (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Loans Payable [Abstract] | |
Schedule of loans payable | Promissory note payable $ 74,995 Less current portion 93 Long term portion $ 74,902 |
Schedule of long term maturities | Long term maturities for the next five years are as follows: 2019 $ 181 2020 355 2021 693 2022 1,356 2023 thru 2028 72,317 $ 74,902 |
Capital Leases (Tables)
Capital Leases (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Capital Leases [Abstract] | |
Schedule of maturities | Capital lease $ 38,278 Less current portion 9,088 Total long-term liabilities $ 29,190 |
Schedule of long term maturities | Period Ending September 30, 2019 $ 2,272 2020 9,088 2021 9,088 2022 8,742 $ 29,190 |
Summary of Significant Accoun_4
Summary of Significant Accounting Polices (Details) | Sep. 30, 2018USD ($) |
Fair Value, Assets and Liabilities Measured On Recurring and Nonrecurring Basis [Line Items] | |
Investment at fair value-securities | $ 16,400 |
Total Assets measured at fair value | 16,400 |
(Level 1) [Member] | |
Fair Value, Assets and Liabilities Measured On Recurring and Nonrecurring Basis [Line Items] | |
Investment at fair value-securities | |
Total Assets measured at fair value | |
(Level 2) [Member] | |
Fair Value, Assets and Liabilities Measured On Recurring and Nonrecurring Basis [Line Items] | |
Investment at fair value-securities | |
Total Assets measured at fair value | |
(Level 3) [Member] | |
Fair Value, Assets and Liabilities Measured On Recurring and Nonrecurring Basis [Line Items] | |
Investment at fair value-securities | 16,400 |
Total Assets measured at fair value | $ 16,400 |
Summary of Significant Accoun_5
Summary of Significant Accounting Polices (Details 1) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Schedule of Reconciliation of Derivative Asset [Abstract] | ||||
Balance as of May 17, 2018 | ||||
Net unrealized loss on assets | $ 200 | (13,600) | ||
Balance as of June 30, 2018 | 16,400 | 16,400 | ||
(Level 3) [Member] | ||||
Schedule of Reconciliation of Derivative Asset [Abstract] | ||||
Balance as of May 17, 2018 | 130,000 | |||
Investment exchanged for services | (80,000) | |||
Net realized loss on asset | (20,000) | |||
Net unrealized loss on assets | (13,600) | |||
Balance as of June 30, 2018 | $ 16,400 | $ 16,400 |
Summary of Significant Accoun_6
Summary of Significant Accounting Polices (Details 2) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Schedule of fair value of financial instruments | ||
Derivative Liability | $ 6,158,447 | $ 5,531,183 |
Total liabilities measured at fair value | 10,307,086 | $ 8,372,450 |
(Level 1) [Member] | ||
Schedule of fair value of financial instruments | ||
Derivative Liability | ||
Total liabilities measured at fair value | ||
(Level 2) [Member] | ||
Schedule of fair value of financial instruments | ||
Derivative Liability | ||
Total liabilities measured at fair value | ||
(Level 3) [Member] | ||
Schedule of fair value of financial instruments | ||
Derivative Liability | 6,158,447 | |
Total liabilities measured at fair value | $ 6,158,447 |
Summary of Significant Accoun_7
Summary of Significant Accounting Polices (Details 3) - Level 3 Inputs [Member] | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Schedule of reconciliation of the derivative liability for which level 3 inputs | |
Balance as of January 1, 2018 | $ 5,531,183 |
Fair Value of derivative liabilities issued | 566,312 |
Loss on change in derivative liability | 60,952 |
Balance as of September 30, 2018 | $ 6,158,447 |
Summary of Significant Accoun_8
Summary of Significant Accounting Polices (Details 4) - Fair Value of Financial Instruments [Member] | 9 Months Ended |
Sep. 30, 2018 | |
Schedule of fair market value of derivative liability assumptions | |
Expected dividend yield | |
Minimum [Member] | |
Schedule of fair market value of derivative liability assumptions | |
Risk free interest rate | 2.15% |
Stock volatility factor | 131.00% |
Weighted average expected option life | 3 months |
Maximum [Member] | |
Schedule of fair market value of derivative liability assumptions | |
Risk free interest rate | 2.94% |
Stock volatility factor | 241.00% |
Weighted average expected option life | 5 years |
Summary of Significant Accoun_9
Summary of Significant Accounting Polices (Details Textual) | 9 Months Ended | |
Sep. 30, 2018USD ($)Segmentsshares | Dec. 31, 2017USD ($) | |
Summary of Significant Accounting Polices (Textual) | ||
Antidilutive securities excluded from computation of earnings per share | 549,308 | |
Contract receivable | $ | $ 384,937 | $ 490,441 |
Allowance for doubtful accounts | $ | $ 6,996 | $ 6,996 |
Number of segment reporting | Segments | 1 | |
Convertible debt [Member] | ||
Summary of Significant Accounting Polices (Textual) | ||
Antidilutive securities excluded from computation of earnings per share | 3,494,546 | |
Convertible debt one [Member] | ||
Summary of Significant Accounting Polices (Textual) | ||
Antidilutive securities excluded from computation of earnings per share | 3,667,068 | |
Stock options [Member] | ||
Summary of Significant Accounting Polices (Textual) | ||
Antidilutive securities excluded from computation of earnings per share | 3,609,143 | |
Warrants [Member] | ||
Summary of Significant Accounting Polices (Textual) | ||
Antidilutive securities excluded from computation of earnings per share | 261,149,413 | |
Stock options one [Member] | ||
Summary of Significant Accounting Polices (Textual) | ||
Antidilutive securities excluded from computation of earnings per share | 3,697,495 | |
Warrant one [Member] | ||
Summary of Significant Accounting Polices (Textual) | ||
Antidilutive securities excluded from computation of earnings per share | 474,335 |
Capital Stock (Details)
Capital Stock (Details) - USD ($) | Aug. 14, 2018 | Apr. 13, 2018 | Apr. 11, 2018 | Mar. 14, 2017 | Oct. 01, 2015 | Sep. 30, 2018 | Aug. 09, 2018 | Jun. 30, 2018 | Dec. 31, 2017 |
Capital Stock (Textual) | |||||||||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | |||||||
Series D Preferred stock issued through a private placement | $ 280,000 | ||||||||
Preferred stock, shares authorized | 550,000,000 | 550,000,000 | |||||||
Common stock, shares authorized | 8,000,000,000 | 8,000,000,000 | |||||||
Series B preferred stock [Member] | |||||||||
Capital Stock (Textual) | |||||||||
Stock conversion basis, description | Company's common stock on the last three (3) trading days prior to the date of conversion, provided, however, if the Average Closing Price is less than $0.35 per share. | ||||||||
Preferred stock, shares outstanding | 3,333 | 3,333 | |||||||
Preferred stock, shares issued | 3,333 | 3,333 | |||||||
Conversion price | $ 1.05 | ||||||||
Series C preferred Stock [Member] | |||||||||
Capital Stock (Textual) | |||||||||
Preferred stock, shares outstanding | 1,000 | 1,000 | |||||||
Preferred stock, shares issued | 1,000 | 1,000 | |||||||
Preferred stock, par value | $ 0.0001 | ||||||||
Purchase price of the Series C preferred stock | $ 0.10 | ||||||||
Total purchase price Series C preferred stock, shares | 1,000 | ||||||||
Series C preferred Stock [Member] | T. Riggs Eckelberry [Member] | |||||||||
Capital Stock (Textual) | |||||||||
Preferred stock, shares issued | 1,000 | ||||||||
Preferred stock, par value | $ 0.0001 | ||||||||
Series D Preferred Stock [Member] | |||||||||
Capital Stock (Textual) | |||||||||
Preferred stock, shares issued | 15,805,554 | ||||||||
Series D Preferred stock issued through a private placement | $ 280,000 | ||||||||
Description of convertible preferred stock terms | The Board adopted resolutions creating a series of shares of convertible preferred stock designated as 0% Series D preferred stock (the "Series D Preferred Stock") with a par value of $0.0001. The shares of Series D Preferred Stock do not have a dividend rate or liquidation preference and do not carry any voting rights. The purchase price shall be $0.02 per unit for an aggregate investment amount of less than $50,000; $0.018 for an aggregate amount of $50,000 or greater, but less than $100,000; $0.016 for an aggregate amount of $100,000 or greater, but less than $250,000; $0.014 for an aggregate amount of $250,000 or greater. At no time may all or a portion of the Series D Preferred Stock be converted if the number of shares of common stock to be issued pursuant to such conversion would exceed, when aggregated with all other shares of common stock owned by the holder at such time, the number of shares of common stock that would result in the holder beneficially owning (as determined in accordance with Section 13(d) of the Exchange Act and the rules thereunder) more than 4.99% of all of the common stock outstanding at such time, which amount may be increased to 9.99% at the holders discretion. | ||||||||
Series D Preferred Stock [Member] | Maximum [Member] | |||||||||
Capital Stock (Textual) | |||||||||
Preferred stock, par value | $ 0.016 | ||||||||
Series D Preferred Stock [Member] | Minimum [Member] | |||||||||
Capital Stock (Textual) | |||||||||
Preferred stock, par value | $ 0.020 | ||||||||
Series E Preferred Stock [Member] | |||||||||
Capital Stock (Textual) | |||||||||
Preferred stock, shares outstanding | 2,440,871 | 2,440,871 | |||||||
Preferred stock, shares issued | 2,440,871 | 2,440,871 | |||||||
Preferred stock, par value | $ 0.0001 | ||||||||
Preferred stock, shares authorized | 4,000,000 | ||||||||
Description of convertible preferred stock terms | The Company filed a Certificate of Designation for its 0% Series E Convertible preferred stock (the "Series E preferred stock") with the Secretary of State of Nevada designating 4,000,000 shares of its authorized preferred stock as Series E preferred stock, accompanied with one hundred (100) warrants each for the purchase of one (1) share of common stock. The shares of Series E preferred stock have a par value of $0.0001 per share. The shares of Series E preferred stock do not have a dividend rate or liquidation preference. Each share of Series E preferred stock is convertible into one share of common stock. The shares of Series E preferred stock do not carry any voting rights. At no time may all or a portion of the Series E preferred stock be converted if the number of shares of common stock to be issued pursuant to such conversion would exceed, when aggregated with all other shares of common stock owned by the holder at such time, the number of shares of common stock that would result in the holder beneficially owning (as determined in accordance with Section 13(d) of the Exchange Act and the rules thereunder) more than 4.99% of all of the common stock outstanding at such time, which amount may be increased to 9.99% at the holders discretion. As of September 30, 2018, there were 2,440,871 shares issued and outstanding. | ||||||||
Series F Preferred Stock [Member] | |||||||||
Capital Stock (Textual) | |||||||||
Preferred stock, shares issued | 100 | ||||||||
Preferred stock, par value | $ 0.0001 | ||||||||
Description of convertible preferred stock terms | The Company filed a Certificate of Designation for its Series F Convertible preferred stock (the "Series F preferred stock") with the Secretary of State of Nevada designating $2,000,000 units, with each unit consisting of 100 shares of the Company's Series F preferred stock. The shares of Series F preferred stock have a par value of $0.0001 per share. The shares of Series F preferred stock do not have a liquidation preference. Each share of Series F preferred stock is convertible into one share of common stock. The shares of Series F preferred stock do not carry any voting rights. The Company may, in its sole discretion, at any time while the Series F preferred stock is outstanding, redeem all or any portion of the outstanding Series preferred stock at a price equal to the stated value, plus any accrued but unpaid dividends. The Company may exercise such redemption right by providing a minimum of 5 days written notice of such redemption to the Holders. In the event the Company exercises such redemption right for less than all of the then-outstanding shares of Series F preferred stock, the Company shall redeem the outstanding shares of the Holders of a pro-rata basis. The Series F is mandatorily redeemable on September 1, 2020. At no time may all or a portion of the Series F preferred stock be converted if the number of shares of common stock to be issued pursuant to such conversion would exceed, when aggregated with all other shares of common stock owned by the holder at such time, the number of shares of common stock that would result in the holder beneficially owning (as determined in accordance with Section 13(d) of the Exchange Act and the rules thereunder) more than 4.99% of all of the common stock outstanding at such time, which amount may be increased to 9.99% at the holders discretion. As of September 30, 2018, the Company accrued dividends in the amount of $1,976, and has 750 shares issued and outstanding. | ||||||||
Accrued dividends | $ 1,976 | $ 167,265,906 | |||||||
Series D-1 Preferred Stock [Member] | |||||||||
Capital Stock (Textual) | |||||||||
Preferred stock, shares outstanding | 28,500,000 | 28,500,000 | |||||||
Preferred stock, shares issued | 28,500,000 | 28,500,000 | |||||||
Description of convertible preferred stock terms | The Company filed a Certificate of Designation for its Series D-1 Convertible preferred stock (the "Series D-1 preferred stock") with the Secretary of State of Nevada designating 50,000,000 shares of its authorized preferred stock as Series D-1 preferred stock. The shares of Series D-1 preferred stock have a par value of $0.0001 per share. The shares of Series D-1 preferred stock do not have a dividend rate or liquidation preference. Each share of Series D-1 preferred stock is convertible into one share of common stock. The shares of Series D-1 preferred stock do not carry any voting rights. At no time may all or a portion of the Series D-1 preferred stock be converted if the number of shares of common stock to be issued pursuant to such conversion would exceed, when aggregated with all other shares of common stock owned by the holder at such time, the number of shares of common stock that would result in the holder beneficially owning (as determined in accordance with Section 13(d) of the Exchange Act and the rules thereunder) more than 4.99% of all of the common stock outstanding at such time, which amount may be increased to 9.99% at the holders discretion. The Company issued 28,500,000 preferred shares for services. As of September 30, 2018, there were 28,500,000 shares issued and outstanding. | ||||||||
Common Stock [Member] | |||||||||
Capital Stock (Textual) | |||||||||
Common stock for settlement of convertible promissory notes | 292,974,292 | ||||||||
Aggregate principal amount | $ 524,714 | ||||||||
Interest amount | $ 62,668 | ||||||||
Common stock issued for services, shares | 117,724,284 | ||||||||
Common stock issued at fair value for services | $ 994,689 | ||||||||
Share exchange agreement, description | One third (1/3) of the shares received by the holder may be converted into common stock beginning one (1) year after the first date on which a share of Series B Preferred Stock was issued (the "Original Issue Date); one third (1/3) may be converted beginning two (2) years after the Original Issue Date; and the remaining one third (1/3) may be converted beginning three years after the Original Issue Date. The number of shares of common stock issuable for each share of converted Series B preferred stock shall be calculated by dividing the stated value by the market price, the market price shall be the average of the closing trade prices of the twenty-five (25) days prior to the date of the conversion notice. | ||||||||
Debt conversion amount | $ 860,880 | ||||||||
Common Stock [Member] | Maximum [Member] | |||||||||
Capital Stock (Textual) | |||||||||
Conversion price | $ 0.0329 | ||||||||
Common stock, shares authorized | 8,000,000,000 | ||||||||
Common Stock [Member] | Minimum [Member] | |||||||||
Capital Stock (Textual) | |||||||||
Conversion price | $ 0.0019 | ||||||||
Common stock, shares authorized | 2,000,000,000 | ||||||||
Preferred Stock [Member] | |||||||||
Capital Stock (Textual) | |||||||||
Preferred stock, par value | $ 0.0001 | ||||||||
Issuance of common stock, shares | 15,805,554 | ||||||||
Series D Preferred stock issued through a private placement | $ 1,581 | ||||||||
Common stock for settlement of convertible promissory notes | |||||||||
Preferred Stock [Member] | Maximum [Member] | |||||||||
Capital Stock (Textual) | |||||||||
Preferred stock, shares authorized | 550,000,000 | ||||||||
Preferred Stock [Member] | Minimum [Member] | |||||||||
Capital Stock (Textual) | |||||||||
Preferred stock, shares authorized | 750,000 | ||||||||
Preferred Stock [Member] | Series D Preferred Stock [Member] | |||||||||
Capital Stock (Textual) | |||||||||
Description of convertible preferred stock terms | The Board adopted a Certificate of Designation establishing the rights, preferences, privileges and other terms of Series D preferred stock and Series D-1 preferred stock, par value $0.0001 per share. The Board authorized and approved 400,000,000 shares of Series D and 50,000,000 shares of Series D-1 preferred stock. |
Convertible Promissory Notes (D
Convertible Promissory Notes (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Short-term Debt [Line Items] | ||
Convertible Promissory Notes, net of debt discount | $ 3,722,562 | |
Less current portion | 968,438 | $ 766,931 |
Total long-term liabilities | $ 2,754,124 | $ 2,811,000 |
Convertible Promissory Notes _2
Convertible Promissory Notes (Details 1) | Sep. 30, 2018USD ($) |
Maturities of long-term debt | |
2,020 | $ 2,245,000 |
2,021 | 325,000 |
2,022 | |
2,023 | 184,124 |
Total | $ 2,754,124 |
Convertible Promissory Notes _3
Convertible Promissory Notes (Details Textual) - USD ($) | Dec. 22, 2017 | Dec. 20, 2017 | Feb. 23, 2018 | Aug. 28, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2016 |
Convertible Promissory Notes (Textual) | |||||||
Convertible promissory notes | $ 2,754,124 | $ 2,811,000 | |||||
Converted an aggregate principal amount | 1,448,262 | ||||||
Derivative liability | 6,158,447 | $ 5,531,183 | |||||
Dec 2015 Note [Member] | |||||||
Convertible Promissory Notes (Textual) | |||||||
Aggregate remaining amount | $ 167,048 | ||||||
Description of debt instrument | Note has zero stated interest rate, and the conversion price shall be equal to 75% of the average three lowest last sale prices traded during the 25 trading days immediately prior to conversion. | ||||||
Conversion of accounts payable into a convertible note | $ 432,048 | ||||||
Percentage of average of lowest closing prices | 75.00% | ||||||
Number of trading days previous to conversion | 25 days | ||||||
Sep 2016 Note [Member] | |||||||
Convertible Promissory Notes (Textual) | |||||||
Recognized interest expense | $ 140,543 | ||||||
Description of debt instrument | Note has zero stated interest rate, and the conversion price shall be equal to 75% of the average three lowest last sale prices traded during the 25 trading days immediately prior to conversion. | ||||||
Conversion of accounts payable into a convertible note | $ 430,896 | ||||||
Convertible Promissory Notes [Member] | |||||||
Convertible Promissory Notes (Textual) | |||||||
Convertible promissory notes | 4,043,854 | ||||||
Remaining debt discount | 321,292 | ||||||
Net balance | $ 3,722,562 | ||||||
Debt instrument interest rate | 10.00% | ||||||
Converted an aggregate principal amount | $ 121,600 | ||||||
Number of shares converted into common stock | 50,762,187 | ||||||
Aggregate remaining amount | $ 1,364,400 | $ 430,896 | |||||
Accrued interest | $ 44,064 | ||||||
Conversion price per share of debt, description | 50% of the lowest trade price on any trade day following issuance of the 2014-2015 Notes. | ||||||
Fair value loss on settlement | $ 328,540 | ||||||
Convertible Promissory Notes [Member] | Maximum [Member] | |||||||
Convertible Promissory Notes (Textual) | |||||||
Conversion price of debt | $ 4.90 | ||||||
Convertible Promissory Notes [Member] | Minimum [Member] | |||||||
Convertible Promissory Notes (Textual) | |||||||
Conversion price of debt | $ 2.10 | ||||||
OID Notes [Member] | |||||||
Convertible Promissory Notes (Textual) | |||||||
Debt instrument, maturity date | Dec. 31, 2017 | ||||||
Aggregate remaining amount | $ 184,124 | ||||||
Accrued interest | $ 13,334 | ||||||
Conversion price of debt | $ 15.31 | ||||||
Conversion price per share of debt, description | After the amendment, the conversion price changed to the lesser of $2.80 per share, or b) fifty percent (50%) of the lowest trade price of common stock recorded since the original effective date of this note, or c) the lowest effective price per share granted to any person or entity after the effective date. | ||||||
Original issue discount on promissory notes | $ 184,124 | ||||||
Unsecured convertible promissory notes [Member] | |||||||
Convertible Promissory Notes (Textual) | |||||||
Debt instrument interest rate | 10.00% | ||||||
Debt instrument, maturity date | May 19, 2020 | ||||||
Aggregate remaining amount | $ 1,325,000 | ||||||
Conversion price per share of debt, description | 50% of the lowest trade price on any trade day following issuance of the 2015-2016 Notes. | ||||||
Unsecured convertible promissory notes [Member] | Maximum [Member] | |||||||
Convertible Promissory Notes (Textual) | |||||||
Conversion price of debt | $ 2.80 | ||||||
Unsecured convertible promissory notes [Member] | Minimum [Member] | |||||||
Convertible Promissory Notes (Textual) | |||||||
Conversion price of debt | $ 0.70 | ||||||
Dec 20 Note [Member] | |||||||
Convertible Promissory Notes (Textual) | |||||||
Debt instrument interest rate | 10.00% | ||||||
Debt instrument, maturity date | Dec. 20, 2018 | ||||||
Converted an aggregate principal amount | $ 150,000 | $ 123,500 | |||||
Number of shares converted into common stock | 72,963,066 | ||||||
Aggregate remaining amount | $ 26,500 | ||||||
Recognized interest expense | 33,603 | ||||||
Accrued interest | $ 8,033 | ||||||
Conversion price per share of debt, description | The Dec 20 Note may be converted into shares of the Company's common stock at a conversion price of the lesser of $0.05 per share or 50% of the lowest trade price during the twenty trading days immediately before the conversion. | ||||||
Fair value loss on settlement | $ 197,877 | ||||||
Dec 22 Note [Member] | |||||||
Convertible Promissory Notes (Textual) | |||||||
Debt instrument interest rate | 10.00% | ||||||
Converted an aggregate principal amount | $ 75,000 | $ 69,864 | |||||
Number of shares converted into common stock | 40,129,653 | ||||||
Aggregate remaining amount | $ 5,136 | ||||||
Recognized interest expense | $ 6,450 | ||||||
Conversion price per share of debt, description | The Dec 22 Note may be converted into shares of the Company's common stock at a conversion price of the lesser of $0.05 per share or 50% of the lowest trade price during the twenty trading days upon default of the prepayment date. | ||||||
Fair value loss on settlement | $ 80,509 | ||||||
Notes maturity date | Dec. 22, 2018 | ||||||
Jan-Aug 2018 Notes [Member] | |||||||
Convertible Promissory Notes (Textual) | |||||||
Debt instrument interest rate | 10.00% | ||||||
Converted an aggregate principal amount | $ 293,000 | $ 174,000 | |||||
Number of shares converted into common stock | 97,506,179 | ||||||
Aggregate remaining amount | $ 119,000 | ||||||
Recognized interest expense | 201,834 | ||||||
Accrued interest | $ 8,700 | ||||||
Conversion price per share of debt, description | The Company's common stock at a variable conversion price of 61% of the lowest one (1) trading day during the ten (10) trading days prior to conversion. | ||||||
Fair value loss on settlement | $ 175,027 | ||||||
Feb 2018 Notes [Member] | |||||||
Convertible Promissory Notes (Textual) | |||||||
Debt instrument interest rate | 10.00% | ||||||
Additional notes issuance | $ 78,750 | ||||||
Converted an aggregate principal amount | 157,500 | $ 35,750 | |||||
Number of shares converted into common stock | 31,613,207 | ||||||
Aggregate remaining amount | $ 121,750 | ||||||
Recognized interest expense | 34,065 | ||||||
Accrued interest | $ 1,872 | ||||||
Conversion price per share of debt, description | The second of the two Feb 2018 Notes shall initially be paid for by the issuance of an offsetting $78,750 secured note issued to the Company by the Buyer. The first of the two notes was funded with cash and the Company must agree to the funding of the second of the two Feb 2018 Notes, before it can be funded with cash. The second of the two Feb 2018 Notes is secured by assets of the Buyer having a fair market value of at least $78,750. The second of the Feb 2018 Notes was issued on August 23, 2018 in the amount of $78,750. The second of the Feb 2018 Notes may be converted into shares of the Company's common stock at a conversion price of $0.03 or 50% discount of the lowest trading price during the twenty (20) trading days prior to conversion. | ||||||
Fair value loss on settlement | $ 78,927 | ||||||
Aggregate principal each amount | $ 78,750 | ||||||
Notes maturity date | Feb. 23, 2019 | ||||||
Apr & May 2018 Notes [Member] | |||||||
Convertible Promissory Notes (Textual) | |||||||
Debt instrument interest rate | 10.00% | ||||||
Converted an aggregate principal amount | $ 300,000 | ||||||
Aggregate remaining amount | 300,000 | ||||||
Recognized interest expense | $ 67,082 | ||||||
Conversion price per share of debt, description | The Apr & May 2018 Notes may be converted into shares of the Company's common stock at a variable conversion price of 50% of the lesser of the lowest trading price twenty five (25) trading days prior to conversion. |
Derivative Liabilities (Details
Derivative Liabilities (Details) - Derivative liability [Member] | 9 Months Ended |
Sep. 30, 2018 | |
Summary of significant assumptions used in the Binomial lattice valuation model for the derivative | |
Expected dividend yield | |
Minimum [Member] | |
Summary of significant assumptions used in the Binomial lattice valuation model for the derivative | |
Risk free interest rate | 2.15% |
Stock volatility factor | 131.00% |
Weighted average expected option life | 3 months |
Maximum [Member] | |
Summary of significant assumptions used in the Binomial lattice valuation model for the derivative | |
Risk free interest rate | 2.94% |
Stock volatility factor | 2.41% |
Weighted average expected option life | 5 years |
Derivative Liabilities (Detai_2
Derivative Liabilities (Details Textual) - USD ($) | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
Derivative Liabilities (Textual) | ||
Loss on conversion of debt amount | $ 860,880 | |
Fair value of the derivative liability | 6,158,447 | $ 5,531,183 |
Fair value of conversion note issuance | 566,312 | |
Convertible Promissory Notes [Member] | ||
Derivative Liabilities (Textual) | ||
Fair value of conversion feature notes | 524,714 | |
Principal amount of convertible promissory notes | $ 62,668 |
Options and Warrants (Details)
Options and Warrants (Details) - Stock options [Member] | 9 Months Ended |
Sep. 30, 2018$ / sharesshares | |
Number of Options | |
Outstanding, beginning of period | shares | 3,697,495 |
Granted | shares | |
Exercised | shares | |
Forfeited/Expired | shares | (88,352) |
Outstanding, end of period | shares | 3,609,143 |
Exercisable at the end of the period | shares | 2,685,690 |
Weighted average exercise price | |
Outstanding, beginning of period | $ 1.51 |
Granted | |
Exercised | |
Forfeited/Expired | 0.91 |
Outstanding, end of period | 1.31 |
Exercisable at the end of the period | 1.03 |
Weighted average fair value of options granted during the period |
Options and Warrants (Details 1
Options and Warrants (Details 1) | 9 Months Ended |
Sep. 30, 2018$ / sharesshares | |
$31.15 [Member] | Maximum [Member] | |
Share-Based Compensation, Shares Authorized Under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercisable Prices | $ / shares | $ 31.15 |
Stock Options Outstanding | 9,143 |
Stock Options Exercisable | 9,143 |
Stock Options [Member] | |
Share-Based Compensation, Shares Authorized Under Stock Option Plans, Exercise Price Range [Line Items] | |
Stock Options Outstanding | 3,609,143 |
Stock Options Exercisable | 2,685,690 |
Stock Options [Member] | $6.65 [Member] | |
Share-Based Compensation, Shares Authorized Under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercisable Prices | $ / shares | $ 6.65 |
Stock Options Outstanding | 18,571 |
Stock Options Exercisable | 18,571 |
Weighted Average Remaining Contractual Life (years) | 6 years 7 days |
Stock Options [Member] | $1.31 [Member] | |
Share-Based Compensation, Shares Authorized Under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercisable Prices | $ / shares | $ 1.31 |
Stock Options Outstanding | 3,581,429 |
Stock Options Exercisable | 2,657,976 |
Stock Options [Member] | $1.31 [Member] | Minimum [Member] | |
Share-Based Compensation, Shares Authorized Under Stock Option Plans, Exercise Price Range [Line Items] | |
Weighted Average Remaining Contractual Life (years) | 2 years 7 days |
Stock Options [Member] | $1.31 [Member] | Maximum [Member] | |
Share-Based Compensation, Shares Authorized Under Stock Option Plans, Exercise Price Range [Line Items] | |
Weighted Average Remaining Contractual Life (years) | 2 years 6 months |
Stock Options [Member] | $31.15 [Member] | Minimum [Member] | |
Share-Based Compensation, Shares Authorized Under Stock Option Plans, Exercise Price Range [Line Items] | |
Weighted Average Remaining Contractual Life (years) | 3 years 10 months 3 days |
Stock Options [Member] | $31.15 [Member] | Maximum [Member] | |
Share-Based Compensation, Shares Authorized Under Stock Option Plans, Exercise Price Range [Line Items] | |
Weighted Average Remaining Contractual Life (years) | 3 years 11 months 1 day |
Options and Warrants (Details 2
Options and Warrants (Details 2) - Warrants [Member] | 9 Months Ended |
Sep. 30, 2018$ / sharesshares | |
Number of Warrants | |
Outstanding - beginning of the period | shares | 53,562,961 |
Granted | shares | 244,087,101 |
Exercised | shares | |
Forfeited | shares | (36,500,649) |
Outstanding - end of the period | shares | 261,149,413 |
Weighted average exercise price | |
Outstanding - beginning of the period | $ / shares | $ 5.40 |
Granted | $ / shares | |
Exercised | $ / shares | |
Forfeited | $ / shares | (0.093) |
Outstanding - end of the period | $ / shares | $ 0.0018 |
Options and Warrants (Details 3
Options and Warrants (Details 3) | 9 Months Ended |
Sep. 30, 2018$ / sharesshares | |
Share-Based Compensation, Shares Authorized Under Stock Option Plans, Exercise Price Range [Line Items] | |
Warrants Outstanding | 261,149,413 |
Warrants Exercisable | 261,149,413 |
Warrants [Member] | |
Share-Based Compensation, Shares Authorized Under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercisable Prices, Range Minimum | $ / shares | $ 0.250 |
Weighted Average Remaining Contractual Life (years) | 2 years 10 months 14 days |
Warrants Outstanding | 244,087,101 |
Warrants Exercisable | 244,087,101 |
Warrants [Member] | 0.08 - 0.12 [Member] | |
Share-Based Compensation, Shares Authorized Under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercisable Prices, Range Minimum | $ / shares | $ 0.080 |
Weighted Average Remaining Contractual Life (years) | 2 months 1 day |
Warrants Outstanding | 10,237,388 |
Warrants Exercisable | 10,237,388 |
Warrants [Member] | 8.75 - 9.10 [Member] | |
Share-Based Compensation, Shares Authorized Under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercisable Prices, Range Minimum | $ / shares | $ 0.012 |
Weighted Average Remaining Contractual Life (years) | 8 months 2 days |
Warrants Outstanding | 6,824,924 |
Warrants Exercisable | 6,824,924 |
Options and Warrants (Details T
Options and Warrants (Details Textual) - USD ($) | Aug. 09, 2018 | Nov. 10, 2017 | Aug. 10, 2016 | May 12, 2016 | Sep. 28, 2018 | May 16, 2018 | Sep. 30, 2018 | Sep. 30, 2017 |
Options and Warrants (Textual) | ||||||||
Common stock shares reserves and sets aside for the granting of options (in shares) | 3,614,285 | |||||||
Stock options mature, description | The stock options mature on July 5, 2019 through October 17, 2021, at exercise prices of $1.31 and $31.15. | |||||||
Stock based compensation | $ 38,362 | $ 71,603 | ||||||
Warrants outstanding | $ 0 | |||||||
T. Riggs Eckelberry [Member] | Restricted Stock Grant Agreement ("RSGA") [Member] | ||||||||
Options and Warrants (Textual) | ||||||||
Issuance of common stock, shares | 1,714,286 | 1,714,286 | 30,000,000 | |||||
Restricted stock grant agreement, description | The Company's common stock to the CEO provided certain milestones are met in certain stages; a) If the Company's consolidated gross revenue, calculated in accordance with generally accepted accounting principles, consistently applied, equals or exceeds $15,000,000 for the trailing twelve month period, the Company will issue up to 857,143 shares of its common stock; b) If the Company's consolidated operating profit (Operating Profit = Operating Revenue - Cost of Goods Sold - Operating Expenses - Depreciation & Amortization), calculated in accordance with generally accepted accounting principles, equals or exceeds $1,500,000 for the trailing twelve month period as reported as reported in the Company's SEC Reports, the Company will issue up to 857,143 shares of its common stock. | The Company's common stock to the Employees provided certain milestones are met in certain stages; a) If the Company's consolidated gross revenue, calculated in accordance with generally accepted accounting principles, consistently applied, equals or exceeds $15,000,000 for the trailing twelve month period as reported in the Company's quarterly or annual financial statements, the Company will issue up to 857,143 shares of its common stock; b) If the Company's consolidated operating profit (Operating Profit = Operating Revenue - Cost of Goods Sold - Operating Expenses - Depreciation & Amortization), calculated in accordance with generally accepted accounting principles, equals or exceeds $1,500,000 for the trailing twelve month period as reported as reported in the Company's SEC Reports, the Company will issue up to 857,143 shares of its common stock. | The Company's common stock to the CEO provided certain milestones are met in certain stages; a) If the Company's consolidated gross revenue, calculated in accordance with generally accepted accounting principles, consistently applied, equals or exceeds $15,000,000 for the trailing twelve month period, the Company will issue up to 15,000,000 shares of its common stock; b) If the Company's consolidated operating profit (Operating Profit = Operating Revenue - Cost of Goods Sold - Operating Expenses - Depreciation & Amortization), calculated in accordance with generally accepted accounting principles, equals or exceeds $1,500,000 for the trailing twelve month period as reported as reported in the Company's SEC Reports, the Company will issue up to 15,000,000 shares of its common stock. | |||||
First Employee [Member] | Restricted Stock Grant Agreement ("RSGA") [Member] | ||||||||
Options and Warrants (Textual) | ||||||||
Issuance of common stock, shares | 857,143 | |||||||
Restricted stock grant agreement, description | The First Employee RSGA are performance based shares and none have yet vested nor have any been issued. The First Employee RSGA provides for the issuance of up to 857,143 shares of the Company's common stock to the employee provided certain milestones are met in certain stages; a) If the Company's consolidated gross revenue, calculated in accordance with generally accepted accounting principles, consistently applied, equals or exceeds $15,000,000 for the trailing twelve month period as reported in the Company's quarterly or annual financial statements, the Company will issue up to 428,571 shares of its common stock; b) If the Company's consolidated operating profit (Operating Profit = Operating Revenue - Cost of Goods Sold - Operating Expenses - Depreciation & Amortization), calculated in accordance with generally accepted accounting principles, equals or exceeds $1,500,000 for the trailing twelve month period as reported as reported in the Company's SEC Reports, the Company will issue up to 428,571 shares of its common stock. | |||||||
Second Employee [Member] | Restricted Stock Grant Agreement ("RSGA") [Member] | ||||||||
Options and Warrants (Textual) | ||||||||
Issuance of common stock, shares | 571,429 | |||||||
Restricted stock grant agreement, description | The employee provided certain milestones are met in certain stages; a) If the Company's consolidated gross revenue, calculated in accordance with generally accepted accounting principles, consistently applied, equals or exceeds $15,000,000 for the trailing twelve month period as reported in the Company's quarterly or annual financial statements, the Company will issue up to 285,714 shares of its common stock; b) If the Company's consolidated operating profit (Operating Profit = Operating Revenue - Cost of Goods Sold - Operating Expenses - Depreciation & Amortization), calculated in accordance with generally accepted accounting principles, equals or exceeds $1,500,000 for the trailing twelve month period as reported as reported in the Company's SEC Reports, the Company will issue up to 285,714 shares of its common stock. | |||||||
Consultants [Member] | Restricted Stock Grant Agreement ("RSGA") [Member] | ||||||||
Options and Warrants (Textual) | ||||||||
Issuance of common stock, shares | 285,714 | |||||||
Restricted stock grant agreement, description | The Company's common stock provided certain milestones are met in certain stages; a) If the Company's consolidated gross revenue, calculated in accordance with generally accepted accounting principles, consistently applied, equals or exceeds $15,000,000 for the trailing twelve month period, the Company will issue to each of the consultants up to 142,857 shares of its common stock; b) If the Company's consolidated operating profit (Operating Profit = Operating Revenue - Cost of Goods Sold - Operating Expenses - Depreciation & Amortization), calculated in accordance with generally accepted accounting principles, equals or exceeds $1,500,000 for the trailing twelve month period as reported as reported in the Company's SEC Reports, the Company will issue up to 142,857 shares to each of the consultants, its common stock. | |||||||
May RSGA [Member] | Restricted Stock Grant Agreement ("RSGA") [Member] | ||||||||
Options and Warrants (Textual) | ||||||||
Issuance of common stock, shares | 30,000,000 | |||||||
Restricted stock grant agreement, description | The Company's common stock to the CEO provided certain milestones are met in certain stages; a) If the Company's consolidated gross revenue, calculated in accordance with generally accepted accounting principles, consistently applied, equals or exceeds $15,000,000 for the trailing twelve month period, the Company will issue up to 15,000,000 shares of its common stock; b) If the Company's consolidated operating profit (Operating Profit = Operating Revenue - Cost of Goods Sold - Operating Expenses - Depreciation & Amortization), calculated in accordance with generally accepted accounting principles, equals or exceeds $1,500,000 for the trailing twelve month period as reported as reported in the Company's SEC Reports, the Company will issue up to 15,000,000 shares of its common stock. | |||||||
Third Employee RSGA [Member] | Restricted Stock Grant Agreement ("RSGA") [Member] | ||||||||
Options and Warrants (Textual) | ||||||||
Issuance of common stock, shares | 2,000,000 | |||||||
Restricted stock grant agreement, description | The Company's common stock provided certain milestones are met in certain stages; a) If the Company's consolidated gross revenue, calculated in accordance with generally accepted accounting principles, consistently applied, equals or exceeds $15,000,000 for the trailing twelve month period, the Company will issue to the respective consultants an aggregate of 1,000,000 shares of its common stock; b) If the Company's consolidated operating profit (Operating Profit = Operating Revenue - Cost of Goods Sold - Operating Expenses - Depreciation & Amortization), calculated in accordance with generally accepted accounting principles, equals or exceeds $1,500,000 for the trailing twelve month period as reported as reported in the Company's SEC Reports, the Company will issue an aggregate of 1,000,000 shares to the respective consultants, its common stock. | |||||||
Consultant and Employee RSGA [Member] | Restricted Stock Grant Agreement ("RSGA") [Member] | ||||||||
Options and Warrants (Textual) | ||||||||
Issuance of common stock, shares | 8,500,000 | 27,000,000 | 4,000,000 | |||||
Restricted stock grant agreement, description | The Company's common stock provided certain milestones are met in certain stages; a) If the Company's consolidated gross revenue, calculated in accordance with generally accepted accounting principles, consistently applied, equals or exceeds $15,000,000 for the trailing twelve month period, the Company will issue to the respective consultants in various amounts an aggregate of 4,250,000 shares in common stock; b) If the Company's consolidated operating profit (Operating Profit = Operating Revenue - Cost of Goods Sold - Operating Expenses - Depreciation & Amortization), calculated in accordance with generally accepted accounting principles, equals or exceeds $1,500,000 for the trailing twelve month period as reported as reported in the Company's SEC Reports, the Company will issue an aggregate of 4,250,000 shares of its common stock | The Company's common stock provided certain milestones are met in certain stages; a) If the Company's consolidated gross revenue, calculated in accordance with generally accepted accounting principles, consistently applied, equals or exceeds $15,000,000 for the trailing twelve month period, the Company will issue to the respective consultants in various amounts an aggregate of 13,500,000 shares in common stock; b) If the Company's consolidated operating profit (Operating Profit = Operating Revenue - Cost of Goods Sold - Operating Expenses - Depreciation & Amortization), calculated in accordance with generally accepted accounting principles, equals or exceeds $1,500,000 for the trailing twelve month period as reported as reported in the Company's SEC Reports, the Company will issue an aggregate of 13,500,000 shares of its common stock | The Company's common stock provided certain milestones are met in certain stages; a) If the Company's consolidated gross revenue, calculated in accordance with generally accepted accounting principles, consistently applied, equals or exceeds $15,000,000 for the trailing twelve month period, the Company will issue to the respective consultants in various amounts an aggregate of 2,000,000 shares in common stock; b) If the Company's consolidated operating profit (Operating Profit = Operating Revenue - Cost of Goods Sold - Operating Expenses - Depreciation & Amortization), calculated in accordance with generally accepted accounting principles, equals or exceeds $1,500,000 for the trailing twelve month period as reported as reported in the Company's SEC Reports, the Company will issue an aggregate of 2,000,000 shares of its common stock |
Revenue from Contracts with C_3
Revenue from Contracts with Customers (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenue from Contracts with Customers [Abstract] | ||||
Equipment Contracts | $ 2,486,426 | $ 1,325,617 | ||
Component Sales | 1,003,879 | 896,333 | ||
Services Sales | 157,956 | 61,941 | ||
Licensing Fees | 30,000 | 11,000 | ||
Total | $ 1,094,118 | $ 1,112,438 | $ 3,678,261 | $ 2,294,891 |
Revenue from Contracts with C_4
Revenue from Contracts with Customers (Details Textual) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Revenue from Contracts with Customers (Textual) | ||
Contract assets | $ 36,761 | $ 88,589 |
Contract liability | $ 250,184 | $ 154,048 |
Financial Assets (Details)
Financial Assets (Details) - USD ($) | May 15, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 |
Financial Assets (Textual) | ||||||
Stock purchased | 10,000,000 | |||||
Stock purchased for cash | $ 100,000 | |||||
Recognized loss | $ 200 | (13,600) | ||||
Shares exchange for service amount | 994,689 | |||||
Financial asset, description | The Company received 4,000 shares of WTII preferred stock for the use of OriginClear, Inc. technology associated with their proprietary electro water separation system. The stock was valued at fair market value of $0.0075 for a price of $30,000 on the date of issuance. The preferred shares are convertible into 4,000,000 shares of common stock. The Company analyzed the licensing agreement using ASU 606 to determine the timing of revenue recognition. The licensing of the intellectual property (IP) is distinct from the non-license goods or services and has significant standalone functionality that provides a benefit or value. The functionality will not change during the license period due to the licensor's activities. Because the significant standalone functionality was delivered immediately, the revenue was recognized in the financial statements as of June 30, 2018. As of September 30, 2018, the fair value of the preferred shares was $16,400. | |||||
Preferred shares fair value | $ 16,400 | $ 16,400 | ||||
10% Convertible Note [Member] | ||||||
Financial Assets (Textual) | ||||||
Convertible note percentage | 10.00% | 10.00% | ||||
Convertible note amount | $ 80,000 | $ 80,000 | ||||
Convertible note price | 65.00% | |||||
Conversion price per share | $ 0.0001 | |||||
Convertible note principal amount | $ 80,000 | |||||
Convertible note accrued interest | $ 2,883 |
Loans Payable (Details)
Loans Payable (Details) | Sep. 30, 2018USD ($) |
Summary of maturities | |
Promissory note payable | $ 74,995 |
Less current portion | 93 |
Long term portion | $ 74,902 |
Loans Payable (Details 1)
Loans Payable (Details 1) | Sep. 30, 2018USD ($) |
Summary of long term maturities: | |
2,019 | $ 181 |
2,020 | 355 |
2,021 | 693 |
2,022 | 1,356 |
2023 thru 2028 | 72,317 |
Long term portion | $ 74,902 |
Loans Payable (Details Textual)
Loans Payable (Details Textual) | 9 Months Ended |
Sep. 30, 2018 | |
Short-term Debt [Member] | |
Loans Payable (Textual) | |
Description of debt instrument | Short term loans with various lenders for capital expansion secured by the Company's assets in the amount of $1,749,970, which included finance cost of $624,810. The finance cost was amortized over the terms of the loans, which have various maturity dates ranging from October 2018 through February 2019. The term of the loans range from two months to six months. The net balance as of September 30, 2018 was $698,771, the finance cost of $378,775. |
Promissory Note Payable [Member] | |
Loans Payable (Textual) | |
Description of debt instrument | Promissory note payable on July 18, 2018 for the sum of $75,000. The principal consists of $67,500 plus a $7,500 origination fee. The interest is sixty-nine percent per annum. The first payment of $6,330 is due September 1, 2018, and $4,318 thereafter. The maturity date of the Note is August 1, 2028. |
Loans Payable-Related Party (De
Loans Payable-Related Party (Details) - USD ($) | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Loans Payable-Related Party (Textual) | |||
Loan payable, related party | $ 248,870 | ||
Maturity date, description | The loans bear interest at various rates to be repaid over a period of three (3) years at various maturity dates. | ||
Payments made on related party loans | $ 13,626 | ||
Loans payable, related party | $ 235,243 |
Capital Leases (Details)
Capital Leases (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Capital Leases [Abstract] | ||
Capital lease | $ 38,278 | |
Less current portion | 9,088 | |
Total long-term liabilities | $ 29,190 |
Capital Leases (Details 1)
Capital Leases (Details 1) | Sep. 30, 2018USD ($) |
Capital Leases [Abstract] | |
2,019 | $ 2,272 |
2,020 | 9,088 |
2,021 | 9,088 |
2,022 | 8,742 |
Total | $ 29,190 |
Capital Leases (Details Textual
Capital Leases (Details Textual) | 9 Months Ended |
Sep. 30, 2018$ / shares | |
Capital Lease (Textual) | |
Capital lease term | 60 months |
Lease price | $ 1 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
Commitments and Contingencies (Textual) | ||
Warrant reserve | $ 20,000 | $ 20,000 |
Equipment lease term | 5 years | |
Capital lease amount | $ 45,440 | |
Description of operating lease | There are no escalation or renewal options associated with this lease. The lease has a purchase option to buy the equipment at the end of the lease for one dollar ($1). The monthly lease payments are $757 per month. | |
Future minimum lease payments due | $ 40,551 | |
McKinney [Member] | ||
Commitments and Contingencies (Textual) | ||
Base rent | $ 4,750 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event [Member] - USD ($) | 1 Months Ended | |||
Nov. 08, 2018 | Nov. 06, 2018 | Oct. 31, 2018 | Oct. 23, 2018 | |
Subsequent Events (Textual) | ||||
Aggregate principal and interest amount | $ 307,250 | |||
Aggregate shares of common stock | 492,630,452 | 45,673,913 | 45,673,913 | |
Common Stock [Member] | ||||
Subsequent Events (Textual) | ||||
Aggregate shares of common stock | 12,413,226 | |||
Series F Preferred Stock [Member] | ||||
Subsequent Events (Textual) | ||||
Aggregate shares of common stock | 168,435,051 | |||
Subsequent event, description | The Company sold an aggregate of 616 of the Company's Series F preferred stock for an aggregate purchase price of $616,000. |