Water Now (WTNW) 10-Q 15 May 19 2019 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2019	May 07, 2019
Document And Entity Information
Entity Registrant Name	Water Now, Inc.
Entity Central Index Key	0001713909
Document Type	10-Q
Document Period End Date	Mar. 31, 2019
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity's Reporting Status Current?	Yes
Elected Not To Use the Extended Transition Period	false
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Common Stock, Shares Outstanding		37,739,692
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2019

Balance Sheets (Unaudited)

Balance Sheets (Unaudited) - USD ($)	Mar. 31, 2019	Dec. 31, 2018
Current Assets
Cash	$ 65,941	$ 53,106
Accounts receivable	70,921	1,250
Other receivables	36,000
Inventory	515,393	506,845
Prepaid expenses	541,130
Total Currents Assets	1,229,385	561,201
Property and equipment - net	1,034,001	382,551
Operating lease right-of-use assets	140,340
Distributorship agreement, net	916,667	966,667
Security deposit	34,330	10,849
Total Assets	3,354,723	1,921,268
Current Liabilities
Accounts payable	174,175	417,972
Accrued expenses	352,533	598,564
Distributorship accrued expense	250,000	650,000
Advances from related parties	42,497	302,497
Current portion of operating lease liabilities	82,438
Current portion of convertible notes payable	620,470	428,257
Notes payable – stockholders	300,000
Total Current Liabilities	1,822,113	2,397,290
Long-term convertible notes payable		82,519
Operating lease liabilities	52,994
Revenue sharing liabilities	2,482,500	319,500
Total Liabilities	4,357,607	2,799,309
Commitments and Contingencies
Stockholders' Deficit
Preferred stock – no par value, 10,000,000 shares authorized, zero issued and outstanding at March 31, 2019 and December 31, 2018
Common stock - no par value, 90,000,000 shares authorized, 36,678,384 and 36,013,000 shares issued and 36,482,192 and 35,816,808 shares outstanding as of March 31, 2019 and December 31, 2018, respectively	7,055,313	6,463,705
Additional paid-in capital	1,561,635	687,431
Subscription receivable	(50,000)	(50,000)
Accumulated deficit	(9,569,832)	(7,979,177)
Total Stockholders' Deficit	(1,002,884)	(878,041)
Total Liabilities and Stockholders' Deficit	$ 3,354,723	$ 1,921,268

Balance Sheets (Parenthetical)

Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2019	Dec. 31, 2018
Statement of Financial Position [Abstract]
Common Stock, par or stated value	$ 0	$ 0
Common Stock, shares authorized	90,000,000	90,000,000
Common Stock, shares issued	36,678,384	36,013,000
Common Stock, shares outstanding	36,482,192	35,816,808
Preferred Stock, par or stated value	$ 0	$ 0
Preferred Stock, shares authorized	10,000,000	10,000,000
Preferred Stock, shares issued	0	0
Preferred Stock, shares outstanding	0	0

Statements of Operations (Unaud

Statements of Operations (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Income Statement [Abstract]
Revenues, net	$ 78,552	$ 128,130
Cost of goods sold	68,880	60,332
Gross Profit	9,672	67,798
Operating expenses
Salaries and wages	322,628	298,927
Professional fees	293,644	312,043
Selling, general and administrative	365,881	271,180
Gain on sale of assets	(4,070)
Total operating expenses	978,083	882,150
Loss from operations	(968,411)	(814,352)
Other expense
Interest expense	(605,595)	(3,360)
Loss on extinguishment of debt	(21,563)
Total other expense	(627,158)	(3,360)
Loss before provision for income taxes	(1,595,569)	(817,712)
Provision for income taxes
Net Loss	$ (1,595,569)	$ (817,712)
Loss per share
basic and fully diluted	$ (0.04)	$ (0.03)
Weighted-average number of shares of common stock
basic and fully diluted	35,962,919	31,386,597

Statements of Cash Flows (Unaud

Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Cash flows from operating activities:
Net loss	$ (1,595,569)	$ (817,712)
Adjustments to reconcile net loss to net cash used in operating activities:
Common stock issued as payment for services and employees compensation		305,000
Depreciation of equipment	63,403	6,902
Non-cash interest expense	480,296
Gain on sale of assets	(4,070)
Loss on extinguishment of debt	21,563
Changes in operating working capital items:
Accounts receivable	(69,671)	(118,130)
Other receivables	(6,000)
Inventory	(8,548)	(7,927)
Prepaid expenses	(49,522)
Security deposit	(23,481)	(1,700)
Accounts payable	(243,797)	(39,298)
Accrued expenses	(277,986)	17,726
Net cash used in operating activities	(1,713,382)	(655,139)
Cash flows from investing activities:
Purchases of property and equipment	(720,783)
Proceeds from sale of assets	30,000
Payment for distributorship agreement	(400,000)
Net cash used in investing activities	(1,090,783)
Cash flows from financing activities:
Outstanding checks in excess of bank balance		(6,597)
Borrowings on notes payable stockholders	300,000
Net advances from related party	(260,000)	(47,000)
Borrowings on convertible notes payable	1,041,500
Payments on convertible notes payable	(310,500)
Issuances of common stock		778,000
Borrowings on revenue sharing liabilities	2,046,000
Net cash provided by financing activities	2,817,000	724,403
Net increase in cash	12,835	69,264
Cash at beginning of period	53,106	2,049
Cash at end of period	65,941	71,313
Supplemental Disclosure of Interest and Income Taxes Paid:
Interest paid during the period	99,632	2,000
Income taxes paid during the period
Non-cash disclosures:
Conversion of convertible note payable into 200,000 common shares	100,000
Issuance of common stock for prepaid interest	491,608
Beneficial debt conversion feature	$ 959,467

1. Basis of Presentation

1. Basis of Presentation	3 Months Ended
	Mar. 31, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation	1. Basis of Presentation The accompanying unaudited financial statements of Water Now, Inc. and subsidiary (collectively, the “Company”) have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission, or the SEC, including the instructions to Regulation S-X. Certain information and note disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America have been or omitted from these statements pursuant to such rules and regulations and, accordingly, they do not include all the information and notes necessary for comprehensive financial statements and should be read in conjunction with our audited financial statements for the year ended December 31, 2018. In the opinion of the management of the Company, all adjustments, which are of a normal recurring nature, necessary for a fair statement of the results for the three-month period have been made. Results for the interim period presented are not necessarily indicative of the results that might be expected for the entire fiscal year. When used in these notes, the terms “Company”, “we”, “us” or “our” mean Water Now, Inc. and subsidiary. Certain amounts in our Condensed Consolidated Statement of Operations for the period ended March 31, 2018 have been reclassified to conform with the current period presentation. Recently Adopted Accounting Pronouncements Effective January 1, 2019, we adopted the Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2016-02, Leases Targeted Improvements to ASC 842 Leases Additional information and disclosures required by this new standard are contained in Note 9.

2. Going Concern

2. Going Concern	3 Months Ended
	Mar. 31, 2019
Going Concern
Going Concern	2. Going Concern At March 31, 2019, the Company had approximately $66,000 in cash and had net working capital deficit of approximately $593,000. The Company, which generated a net loss of approximately $1,596,000 and $818,000 for the three months ended March 31, 2019 and 2018, respectively, may not have sufficient cash to fund its current and future operations. There is no assurance that future operations will result in profitability. No assurance can be given that management will be successful in its efforts to raise additional capital. The failure to raise additional capital needed to achieve its business plans will have a material adverse effect on the Company’s financial position, results of operations, and ability to continue as a going concern.

3. Distributorship Agreement

3. Distributorship Agreement	3 Months Ended
	Mar. 31, 2019
Accounting Policies [Abstract]
Distributorship Agreement	3. Distributorship Agreement On October 31, 2018, the Company entered into an Exclusive Sales Distribution Agreement (the “Agreement”) with African Horizon Technologies (Pty) Ltd (“AHT”) whereby the Company serves as AHT’s exclusive distributor of the Hydraspin Hydro Cyclone technology in the United States of America. The Company is obligated to pay AHT $500,000 and issue AHT 500,000 shares valued at $250,000 based on the closing price of the Company’s shares of $0.50 on the date of the Agreement. In addition, the Company will issue AHT 500,000 shares at the earlier of 24 months from the commencement date of the Agreement or the sale of 50 units to the Company. The Company will also pay AHT a royalty of 2% of total net profits generated by the Company from the sale of oil generated using the Hydraspin units. The term of the Agreement is for five years with an automatic renewal term of five years unless terminated prior to the expiration of the current term. The Company recorded the value of the Agreement of $1,000,000 as an other asset and is amortizing the asset to expense over the life of the Agreement of five years. As of March 31, 2019, $500,000 was paid and the remaining 500,000 shares to be issued is included as an accrued expense.

4. Notes Payable-Stockholders

4. Notes Payable-Stockholders	3 Months Ended
	Mar. 31, 2019
Debt Disclosure [Abstract]
Notes Payable-Stockholders	4. Notes Payable – Stockholders The Company borrowed $200,000 and $100,000 from two stockholders on March 25, 2019. The notes bear interest at 18% and are payable beginning on April 25, 2019, at which time the entire amount of principal and any accrued interest is due and payable. The notes are unsecured, and the $200,000 note is guaranteed by the Company’s Chief Executive Officer. Subsequent to March 31, 2019, the Company paid $100,000 on these notes and $200,000 remains outstanding.

5. Convertible Notes Payable

5. Convertible Notes Payable	3 Months Ended
	Mar. 31, 2019
Notes to Financial Statements
Convertible Notes Payable	5. Convertible Notes Payable The Company borrowed $68,000 from a lender on September 4, 2018. The note bears interest at 8% and matures on September 4, 2019, at which time the entire amount of principal and accrued interest is due and payable. The note is unsecured. The outstanding principal and interest amount is convertible by the holder into shares of the Company’s common stock beginning 170 days after the issuance date and prior to the maturity date at a price per share equal to sixty-five percent of the average of the lowest two trading prices of the Company’s common stock for the twenty trading days prior to the conversion date. The value of the embedded beneficial conversion feature on the note payable was estimated to be $39,748. In addition, the Company paid $2,500 for debt issuance costs. This note was paid in full on January 3, 2019 and the Company recorded a gain on extinguishment of this debt of $14,351. The Company borrowed $200,000 from a lender on September 17, 2018. The note does not bear interest and matures September 17, 2021, at which time the entire amount of principal is due and payable. The note is unsecured. The outstanding principal amount is convertible by the holder into shares of the Company’s common stock at any time prior to the maturity date at a price per share equal to $0.75 per share if before 180 days after the issuance date, or if 180 days after the issuance date, the lesser of $0.75 per share or seventy percent of the second lowest trading price of the Company’s common stock for the twenty trading days prior to the conversion date. The value of the embedded beneficial conversion feature on the note payable was estimated to be $37,333. In addition, the Company granted 60,000 shares of the Company’s common stock valued at $53,400 based on the Company’s share price on the date of the note agreement, paid $34,400 as a discount for interest on the note, and paid $5,000 for debt issuance costs. For the period ended March 31, 2019, the Company recorded $86,370 of interest expense related to the value of the embedded beneficial conversion feature and debt issuance costs. This note was paid in full on March 25, 2019 and the Company recorded a loss on extinguishment of this debt of $31,111. The Company borrowed $100,000 from a shareholder on August 30, 2018. The note bears interest at 10% and is payable in one lump sum on March 4, 2019, at which time the entire amount of principal and accrued interest is due and payable. The note is unsecured. The outstanding principal and interest amount is convertible by the holder into shares of the Company’s common stock at any time prior to the maturity date at the conversion price of $0.50 per share. The value of the embedded beneficial conversion feature on the note payable was estimated to be $72,000. For the period ended March 31, 2019, the Company recorded $26,557 of interest expense related to the value of the embedded beneficial conversion feature. This note was converted into 200,000 shares of the Company’s common stock on March 28, 2019. The Company borrowed $42,500 from a lender on October 15, 2018. The note bears interest at 8% and is payable in one lump sum on October 15, 2019, at which time the entire amount of principal and accrued interest is due and payable. The note is unsecured. The outstanding principal and interest amount is convertible by the holder into shares of the Company’s common stock beginning 170 days after the issuance date and prior to the maturity date at a price per share equal to sixty-five percent of the average of the lowest two trading prices of the Company’s common stock for the twenty trading days prior to the conversion date. The value of the embedded beneficial conversion feature on the note payable was estimated to be $24,160. In addition, the Company paid $2,500 for debt issuance costs. For the period ended March 31, 2019, the Company recorded $21,745 of interest expense related to the value of the embedded beneficial conversion feature and debt issuance costs. This note was paid in full on March 26, 2019 and the Company recorded a loss on extinguishment of this debt of $4,803. The Company borrowed $86,500 from a lender on January 2, 2019. The note bears interest at 8% and is payable in one lump sum on January 2, 2020, at which time the entire amount of principal and accrued interest is due and payable. The note is unsecured. The outstanding principal and interest amount is convertible by the holder into shares of the Company’s common stock beginning 180 days after the issuance date and prior to the maturity date at a price per share equal to sixty-five percent of the average of the lowest two trading prices of the Company’s common stock for the twenty trading days prior to the conversion date. The principal balance at March 31, 2019 is $86,500. The interest expense incurred on the note payable was approximately $1,730 for the period ended March 31, 2019. The value of the embedded beneficial conversion feature on the note payable was estimated to be $72,334. In addition, the Company paid $2,500 for debt issuance costs. For the period ended March 31, 2019, the Company recorded $18,709 of interest expense related to the value of the embedded beneficial conversion feature and debt issuance costs. The Company borrowed $102,500 from a lender on February 14, 2019. The note bears interest at 8% and is payable in one lump sum on February 14, 2020, at which time the entire amount of principal and accrued interest is due and payable. The note is unsecured. The outstanding principal and interest amount is convertible by the holder into shares of the Company’s common stock beginning 180 days after the issuance date and prior to the maturity date at a price per share equal to sixty-five percent of the average of the lowest two trading prices of the Company’s common stock for the twenty trading days prior to the conversion date. The principal balance at March 31, 2019 is $102,500. The interest expense incurred on the note payable was approximately $1,025 for the period ended March 31, 2019. The value of the embedded beneficial conversion feature on the note payable was estimated to be $102,500. In addition, the Company paid $2,500 for debt issuance costs. For the period ended March 31, 2019, the Company recorded $13,125 of interest expense related to the value of the embedded beneficial conversion feature and debt issuance costs. The Company borrowed $100,000 from a lender on February 20, 2019. The note bears interest at 10%, and is payable in one lump sum on February 20, 2020, at which time the entire amount of principal and accrued interest is due and payable. The note is unsecured. The outstanding principal amount is convertible by the holder into shares of the Company’s common stock beginning six months after the issuance date and prior to the maturity date at a price per share equal to sixty percent of the lowest trading price of the Company’s common stock for the fifteen trading days prior to the conversion date. The principal balance at March 31, 2019 is $100,000. The interest expense incurred on the note payable was approximately $1,250 for the period ended March 31, 2019. The value of the embedded beneficial conversion feature on the note payable was estimated to be $100,000. In addition, the Company paid $5,000 for debt issuance costs. For the period ended March 31, 2019, the Company recorded $13,071 of interest expense related to the value of the embedded beneficial conversion feature and debt issuance costs. The Company borrowed $560,000 from a lender on February 21, 2019. The note bears interest at 12% and is payable in one lump sum on August 21, 2019, at which time the entire amount of principal and accrued interest is due and payable. The note is unsecured. The outstanding principal and interest amount is convertible by the holder into shares of the Company’s common stock beginning 180 days after the issuance date and prior to the maturity date at a price per share equal to sixty-five percent of the second lowest trade price of the Company’s common stock for the twenty trading days prior to the conversion date. The principal balance at March 31, 2019 is $560,000. The interest expense incurred on the note payable was approximately $8,400 for the period ended March 31, 2019. The value of the embedded beneficial conversion feature on the note payable was estimated to be $560,000. In addition, the Company granted the lender 450,000 shares of the Company’s common stock, paid $56,000 as a discount on the note, and paid $4,000 for debt issuance costs. The shares granted must be returned if the note is fully repaid and satisfied prior to 180 days after the issuance date. The Company recorded the value of the shares at $400,455, based on the Company’s share price on the date of the note agreement, as prepaid interest. For the period ended March 31, 2019, the Company recorded $155,000 of interest expense related to the value of the embedded beneficial conversion feature and debt issuance costs. The Company borrowed $42,500 from a lender on March 11, 2019. The note bears interest at 8% and is payable in one lump sum on March 11, 2020, at which time the entire amount of principal and accrued interest is due and payable. The note is unsecured. The outstanding principal and interest amount is convertible by the holder into shares of the Company’s common stock beginning 180 days after the issuance date and prior to the maturity date at a price per share equal to sixty-five percent of the average of the lowest two trading prices of the Company’s common stock for the twenty trading days prior to the conversion date. The principal balance at March 31, 2019 is $42,500. The interest expense incurred on the note payable was approximately $142 for the period ended March 31, 2019. The value of the embedded beneficial conversion feature on the note payable was estimated to be $31,556. In addition, the Company paid $2,500 for debt issuance costs. For the period ended March 31, 2019, the Company recorded $1,419 of interest expense related to the value of the embedded beneficial conversion feature and debt issuance costs. The Company borrowed $150,000 from a lender on March 18, 2019. The note bears interest at 12% and is payable in one lump sum on September 18, 2019, at which time the entire amount of principal and accrued interest is due and payable. The note is unsecured. The outstanding principal and interest amount is convertible by the holder into shares of the Company’s common stock beginning 180 days after the issuance date and prior to the maturity date at a price per share equal to sixty-five percent of the second lowest trade price of the Company’s common stock for the twenty trading days prior to the conversion date. The principal balance at March 31, 2019 is $150,000. The interest expense incurred on the note payable was approximately $750 for the period ended March 31, 2019. The value of the embedded beneficial conversion feature on the note payable was estimated to be $93,077. In addition, the Company granted 115,384 shares of the Company’s common stock and paid $15,000 as a discount on the note. The shares granted must be returned if the note is fully repaid and satisfied prior to 180 days after the issuance date. The Company recorded the value of the shares at $91,153, based on the Company’s share price on the date of the note agreement, as prepaid interest. For the period ended March 31, 2019, the Company recorded $9,256 of interest expense related to the value of the embedded beneficial conversion feature and debt issuance costs.

6. Advances from Related Party

6. Advances from Related Party	3 Months Ended
	Mar. 31, 2019
Related Party Transactions [Abstract]
Advances from Related Party	6. Advances From Related Parties The Company has received non-interest bearing advances without a specified maturity date from certain stockholders of the Company. The Company owed approximately $42,000 and $302,000, respectively, at March 31, 2019 and December 31, 2018 to the stockholders.

7. Revenue Sharing Agreements

7. Revenue Sharing Agreements	3 Months Ended
	Mar. 31, 2019
Notes to Financial Statements
Revenue Sharing Agreements	7. Revenue Sharing Agreements The Company borrowed $50,000 from a lender on November 29, 2018, whereby the proceeds are to be used to purchase a certain HydraSpin unit in exchange for the lender to receive five percent of the revenues net of costs generated from the HydraSpin unit. On March 3, 2019, the Company cancelled this original agreement and entered into a new agreement whereby the lender is to receive fifty percent of the revenues net of costs and has guaranteed that the lender would receive $150,000 in net revenues by March 3, 2021, or the Company would pay the lender the difference between the $150,000 and the purchase price of $50,000 on or before March 31, 2021. For the period ended March 31, 2019, the Company recorded $12,500 of interest expense related to the value of the revenue sharing liability. The agreement remains in full force and effect until the earlier of (a) the Company is unable to satisfy its obligations under the terms of the agreement and action is brought by the lender to enforce same, (b) the expiration of the operating life of the unit, as confirmed by the manufacturer (five years), or (c) the mutual written agreement of the parties. The Company borrowed $264,000 from a lender on December 13, 2018, whereby the proceeds are to be used to purchase certain HydraSpin units. On February 27, 2019, the Company cancelled this original agreement and entered into a new agreement to borrow an additional $66,000, whereby the proceeds were used to purchase a certain HydraSpin unit in exchange for the lender to receive fifty percent of the revenues net of costs generated from the HydraSpin unit. The Company has guaranteed that the lender would receive $495,000 in net revenues by March 3, 2021, or the Company would pay the lender the difference between the $495,000 and the purchase price of $330,000 on or before March 31, 2021. For the period ended March 31, 2019, the Company recorded $1,375 of interest expense related to the value of the revenue sharing liability. The agreement remains in full force and effect until the earlier of (a) the Company is unable to satisfy its obligations under the terms of the agreement and action is brought by the lender to enforce same, (b) the expiration of the operating life of the unit, as confirmed by the manufacturer (five years), or (c) the mutual written agreement of the parties. The Company borrowed $660,000 from a lender on January 2, 2019, whereby the proceeds were used to purchase certain HydraSpin units in exchange for the lender to receive fifty percent of the revenues net of costs generated from the HydraSpin units. The Company has guaranteed that the lender would receive $990,000 in net revenues by January 2, 2021, or the Company would pay the lender the difference between the $990,000 and the purchase price of $660,000 on or before January 15, 2021. For the period ended March 31, 2019, the Company recorded $41,250 of interest expense related to the value of the revenue sharing liability. The agreement remains in full force and effect until the earlier of (a) the Company is unable to satisfy its obligations under the terms of the agreement and action is brought by the lender to enforce same, (b) the expiration of the operating life of the units, as confirmed by the manufacturer (five years), or (c) the mutual written agreement of the parties. The Company borrowed $660,000 from a lender on January 16, 2019, whereby the proceeds were used to purchase certain HydraSpin units in exchange for the lender to receive fifty percent of the revenues net of costs generated from the HydraSpin units. The Company has guaranteed that the lender would receive $990,000 in net revenues by January 15, 2021, or the Company would pay the lender the difference between the $990,000 and the purchase price of $660,000 on or before January 17, 2021. For the period ended March 31, 2019, the Company recorded $34,375 of interest expense related to the value of the revenue sharing liability. The agreement remains in full force and effect until the earlier of (a) the Company is unable to satisfy its obligations under the terms of the agreement and action is brought by the lender to enforce same, (b) the expiration of the operating life of the units, as confirmed by the manufacturer (five years), or (c) the mutual written agreement of the parties. The Company borrowed $330,000 from a lender on January 30, 2019, whereby the proceeds were used to purchase a certain HydraSpin unit in exchange for the lender to receive sixty percent of the revenues net of forty percent of costs generated from the HydraSpin unit until the lender receives revenue equal to 120% of the $330,000 investment, then the lender shall receive fifty percent of the revenues net of costs generated from the HydraSpin unit. The Company has guaranteed that the lender would receive $495,000 in net revenues by January 30, 2021, or the Company would pay the lender the difference between the $495,000 and the purchase price of $330,000 on or before February 6, 2021. For the period ended March 31, 2019, the Company recorded $13,750 of interest expense related to the value of the revenue sharing liability. The agreement remains in full force and effect until the earlier of (a) the Company is unable to satisfy its obligations under the terms of the agreement and action is brought by the lender to enforce same, (b) the expiration of the operating life of the unit, as confirmed by the manufacturer (five years), or (c) the mutual written agreement of the parties. The Company borrowed $330,000 from a lender on January 30, 2019, whereby the proceeds were used to purchase a certain HydraSpin unit in exchange for the lender to receive sixty percent of the revenues net of forty percent of costs generated from the HydraSpin unit until the lender receives revenue equal to 120% of the $330,000 investment, then the lender shall receive fifty percent of the revenues net of costs generated from the HydraSpin unit. The Company has guaranteed that the lender would receive $495,000 in net revenues by January 30, 2021, or the Company would pay the lender the difference between the $495,000 and the purchase price of $330,000 on or before February 6, 2021. For the period ended March 31, 2019, the Company recorded $13,750 of interest expense related to the value of the revenue sharing liability. The agreement remains in full force and effect until the earlier of (a) the Company is unable to satisfy its obligations under the terms of the agreement and action is brought by the lender to enforce same, (b) the expiration of the operating life of the unit, as confirmed by the manufacturer (five years), or (c) the mutual written agreement of the parties.

8. Equity Transactions

8. Equity Transactions	3 Months Ended
	Mar. 31, 2019
Notes to Financial Statements
Equity Transactions	8. Equity Transactions From January 1, 2018 to March 31, 2018, the Company issued 1,656,000 shares to investors at $0.50 per share for cash, with total proceeds of $828,000, including subscription receivable of $50,000. In addition, the Company issued 610,000 shares to executives, employees working in research and development at the Company, and consultants. The value of these shares at $0.50 per share was $305,000. From January 1, 2019 to March 31, 2019, the Company issued 200,000 shares to a lender upon receipt of a conversion notice. The Company also issued 565,384 shares to lenders for debt issuance costs. See Note 5.

9. Operating Leases _ Right of

9. Operating Leases – Right of Use Assets	3 Months Ended
	Mar. 31, 2019
Notes to Financial Statements
Operating Leases - Right of Use Assets	9. Operating Leases – Right of Use Assets The Company has an operating lease for office and warehouse space that expires in 2020. Below is a summary of the Company’s right of use assets and liabilities as of March 31, 2019: Right-of-use assets $ 140,340 Lease liability obligations, current $ 82,438 Lease liability obligations, less current portion 52,994 Total lease liability obligations $ 135,432 Weighted-average remaining lease term 1.6 years Weighted-average discount rate 10% During the three months ended March 31, 2019, the Company recognized approximately $22,798 in operating lease costs and are included in selling, general and administrative expenses in our consolidated statement of operations. During the three months ended March 31, 2019, operating cash flows from operating leases was $22,791. Approximate future minimum lease payments for the Company’s right of use assets over the remaining lease periods as of March 31, 2019, are as follows: Year ending December 31, 2019 $ 69,000 2020 78,000 Total minimum payments $ 147,000 As of March 31, 2019, the Company has an additional operating lease for office and warehouse space that has not yet commenced of approximately $956,000. This lease term began in April 2019, with a term of 4 years.

10. Income Taxes

10. Income Taxes	3 Months Ended
	Mar. 31, 2019
Income Tax Disclosure [Abstract]
Income Taxes	10. Income Taxes The Company accounts for income taxes under the liability method. Deferred tax assets and liabilities are recorded based on the differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purpose, referred to as temporary differences. Deferred tax assets and liabilities at the end of each period are determined using the currently enacted tax rates applied to taxable income in the periods in which the deferred tax assets and liabilities are expected to be settled or realized. The Company’s tax provision is determined using an estimate of an annual effective tax rate adjusted for discrete items, if any, that are taken into account in the relevant period. The 2019 and 2018 annual effective tax rate was 0% for the U.S. federal and state statutory tax rates. The Company reviews tax uncertainties in light of changing facts and circumstances and adjusts them accordingly. As of March 31, 2019 and December 31, 2018, there were no tax contingencies recorded. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities recognized for financial reporting, and the amounts recognized for income tax purposes. We had a net operating loss carry-forward for federal and state tax purposes of approximately $9,500,000 at March 31, 2019, that is potentially available to offset future taxable income. The TCJA (Tax Cut and Jobs Act) changes the rules on NOL carryforwards. The 20-year limitation was eliminated, giving the taxpayer the ability to carry forward losses indefinitely. However, NOL carry forward arising after January 1, 2018, will now be limited to 80 percent of taxable income. For financial reporting purposes, no deferred tax asset was recognized at March 31, 2019 and December 31, 2018 because management estimates that it is more likely than not that substantially all of the net operating losses will expire unused. As a result, the amount of the deferred tax assets considered realizable was reduced 100% by a valuation allowance. The change in the valuation allowances were approximately $334,000 and $172,000 for the three months ended March 31, 2019 and 2018, respectively.

11. Segment Information

11. Segment Information	3 Months Ended
	Mar. 31, 2019
Income Tax Disclosure [Abstract]
Segment Information	11. Segment Information The Company sells water purification products and operates oil recovery machines. The Company has identified such reportable segments based on management responsibility and the nature of the Company’s products, services, and costs. To date, the Company primarily sells its water purification products internationally and operates its oil recovery machines in the United States. The Company measures segment profit (loss) as income (loss) from operations. Segment assets are those assets controlled by each reportable segment. Below is the financial information related to the Company’s segments: For the Three Months Ended March 31, 2019 2018 Revenues Water purification products $ 78,552 $ 128,130 Oil recovery machines — — $ 78,552 $ 128,130 Loss from operations Water purification products $ 722,554 $ 718,285 Oil recovery machines 96,581 — General corporate 149,276 96,067 $ 968,411 $ 814,352 Capital expenditures Water purification products $ 92,158 $ — Oil recovery machines 628,625 — General corporate — — $ 720,783 $ — March 31, 2019 December 31, 2018 Total assets Water purification products $ 733,504 $ 612,498 Oil recovery machines 1,829,517 1,244,814 General corporate 791,702 63,956 $ 3,354,723 $ 1,921,268 General corporate expenses include corporate salaries, health insurance and social security taxes for officers and corporate employees, corporate insurance, legal and accounting fees, and other corporate costs such as transfer agent and travel costs. Management considers these to be non-allocable costs for segment purposes.

12. Subsequent Events

12. Subsequent Events	3 Months Ended
	Mar. 31, 2019
Subsequent Events [Abstract]
Subsequent Events	12. Subsequent Events The Company has evaluated all material events or transactions that occurred after March 31, 2019 up to May 15, 2019, the date these financial statements were available to be issued and noted no material subsequent events which would require disclosure. Financing The Company borrowed $175,000 from a lender on April 9, 2019. The note bears interest at 12% and is payable in one lump sum on January 9, 2020, at which time the entire amount of principal and accrued interest is due and payable. The note is unsecured. The outstanding principal and interest amount is convertible by the holder into shares of the Company’s common stock beginning 180 days after the issuance date and prior to the maturity date at a price per share equal to the lesser of (1) the lowest trading price during the previous twenty-five trading days prior to the date of the note and (2) fifty-five percent of the lowest trading price of the Company’s common stock for the twenty-five trading days prior to the conversion date. The Company borrowed $102,500 from a lender on April 10, 2019. The note bears interest at 8% and is payable in one lump sum on April 10, 2020, at which time the entire amount of principal and accrued interest is due and payable. The note is unsecured. The outstanding principal and interest amount is convertible by the holder into shares of the Company’s common stock beginning 180 days after the issuance date and prior to the maturity date at a price per share equal to sixty-five percent of the average of the lowest two trading prices of the Company’s common stock for the twenty trading days prior to the conversion date. HydraSpin Contracts The Company borrowed $330,000 from a lender on April 1, 2019, whereby the proceeds were used to purchase a certain HydraSpin unit in exchange for the lender to receive fifty percent of the revenues net of costs generated from the HydraSpin unit. The Company has guaranteed that the lender would receive $495,000 in net revenues by April 8, 2021, or the Company would pay the lender the difference between the $495,000 and the net revenues received on or before April 30, 2021. Lease The Company has an additional operating lease for office and warehouse space of approximately $956,000. This lease term began in April 2019, with a term of 4 years.

1. Basis of Presentation (Polic

1. Basis of Presentation (Policies)	3 Months Ended
	Mar. 31, 2019
Accounting Policies [Abstract]
Recently Adopted Accounting Pronouncements	Recently Adopted Accounting Pronouncements Effective January 1, 2019, we adopted the Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2016-02, Leases Targeted Improvements to ASC 842 Leases Additional information and disclosures required by this new standard are contained in Note 9.

9. Operating Leases _ Right o_2

9. Operating Leases – Right of Use Assets as of March 31, 2019 (Tables)	3 Months Ended
	Mar. 31, 2019
Notes to Financial Statements
Operating Leases - Right of Use Assets	Right-of-use assets $ 140,340 Lease liability obligations, current $ 82,438 Lease liability obligations, less current portion 52,994 Total lease liability obligations $ 135,432 Weighted-average remaining lease term 1.6 years Weighted-average discount rate 10%

9. Operating Leases _ Remaining

9. Operating Leases – Remaining Right of Use Assets as of March 31, 2019 (Tables)	3 Months Ended
	Mar. 31, 2019
Notes to Financial Statements
Operating Leases - Remaining Right of Use Assets	Year ending December 31, 2019 $ 69,000 2020 78,000 Total minimum payments $ 147,000

11. Segment Information (Tables

11. Segment Information (Tables)	3 Months Ended
	Mar. 31, 2019
Income Tax Disclosure [Abstract]
Segment Information	For the Three Months Ended March 31, 2019 2018 Revenues Water purification products $ 78,552 $ 128,130 Oil recovery machines — — $ 78,552 $ 128,130 Loss from operations Water purification products $ 722,554 $ 718,285 Oil recovery machines 96,581 — General corporate 149,276 96,067 $ 968,411 $ 814,352 Capital expenditures Water purification products $ 92,158 $ — Oil recovery machines 628,625 — General corporate — — $ 720,783 $ — March 31, 2019 December 31, 2018 Total assets Water purification products $ 733,504 $ 612,498 Oil recovery machines 1,829,517 1,244,814 General corporate 791,702 63,956 $ 3,354,723 $ 1,921,268

2. Going Concern (Details Narra

2. Going Concern (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Going Concern
Cash	$ 65,941		$ 53,106
Working capital	(593,000)
Net Loss	$ (1,595,569)	$ (817,712)

4. Notes Payable (Details Narra

4. Notes Payable (Details Narrative) - USD ($)	Mar. 31, 2019	Mar. 25, 2019
Amount paid	$ 100,000
Note 1 [Member]
Amount borrowed from shareholder		$ 200,000
Interest rate on note		18.00%
Date of Maturity		Apr. 25, 2019
Note 2 [Member]
Amount borrowed from shareholder		$ 100,000
Interest rate on note		18.00%
Date of Maturity		Apr. 25, 2019

5. Convertible Notes Payable (D

5. Convertible Notes Payable (Details Narrative) - USD ($)	3 Months Ended		4 Months Ended	5 Months Ended	6 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Jan. 03, 2019	Mar. 26, 2019	Mar. 25, 2019	Mar. 28, 2019	Mar. 18, 2019	Mar. 11, 2019	Feb. 21, 2019	Feb. 20, 2019	Feb. 14, 2019	Jan. 02, 2019	Dec. 31, 2018	Oct. 15, 2018	Sep. 17, 2018	Sep. 04, 2018	Aug. 30, 2018
Principle amount of convertible notes payable	$ 620,470												$ 428,257
Interest Expense	$ 605,595	$ 3,360
Shares Issued, Shares	36,678,384												36,013,000
Shares Issued, Value	$ 7,055,313												$ 6,463,705
Gain (Loss) on Extinguishment of Debt	(21,563)
September Convertible Notes[Member]
Principle amount of convertible notes payable																$ 68,000
Interest rate on Convertible Notes																8.00%
Embedded Beneficial Conversion Feature			$ 39,748
Date of Maturity																Sep. 4, 2019
Debt Issuance Cost																$ 2,500
Gain (Loss) on Extinguishment of Debt			$ 14,351
September Convertible Notes 3[Member]
Principle amount of convertible notes payable															$ 200,000
Interest rate on Convertible Notes															0.00%
Debt conversion per share															$ 0.75
Interest Expense	86,370
Embedded Beneficial Conversion Feature					$ 37,333
Date of Maturity															Sep. 17, 2021
Debt Issuance Cost															$ 5,000
Discount for Interest on Note															$ 34,440
Shares Issued, Shares															60,000
Shares Issued, Value															$ 53,400
Gain (Loss) on Extinguishment of Debt					$ (31,111)
August Convertible Notes 2 [Member]
Principle amount of convertible notes payable																	$ 100,000
Interest rate on Convertible Notes																	10.00%
Debt conversion per share																	$ 0.5
Interest Expense	26,557
Embedded Beneficial Conversion Feature	72,000
Embedded Beneficial Conversion Feature - Interest Expense	48,000
Date of Maturity																	Mar. 4, 2019
Shares Issued, Shares						200,000
October Convertible Notes 3[Member]
Principle amount of convertible notes payable														$ 42,500
Interest rate on Convertible Notes														8.00%
Interest Expense	21,745
Embedded Beneficial Conversion Feature				$ 24,160
Date of Maturity														Oct. 15, 2019
Debt Issuance Cost														$ 2,500
Gain (Loss) on Extinguishment of Debt				$ 4,803
January Convertible Notes [Member]
Principle amount of convertible notes payable	86,500											$ 86,500
Interest rate on Convertible Notes												8.00%
Interest Expense	1,730
Embedded Beneficial Conversion Feature	72,334
Embedded Beneficial Conversion Feature - Interest Expense	18,709
Date of Maturity												Jan. 2, 2020
Debt Issuance Cost	2,500
February Convertible Notes [Member]
Principle amount of convertible notes payable	102,500										$ 102,500
Interest rate on Convertible Notes											8.00%
Interest Expense	1,025
Embedded Beneficial Conversion Feature	102,500
Embedded Beneficial Conversion Feature - Interest Expense	13,125
Date of Maturity											Feb. 14, 2020
Debt Issuance Cost	2,500
February Convertible Notes 2 [Member]
Principle amount of convertible notes payable	100,000									$ 100,000
Interest rate on Convertible Notes										10.00%
Interest Expense	1,250
Embedded Beneficial Conversion Feature	100,000
Embedded Beneficial Conversion Feature - Interest Expense	13,071
Date of Maturity										Feb. 20, 2020
Debt Issuance Cost	5,000
February Convertible Notes 3 [Member]
Principle amount of convertible notes payable	560,000								$ 560,000
Interest rate on Convertible Notes									12.00%
Interest Expense	8,400
Embedded Beneficial Conversion Feature	560,000
Embedded Beneficial Conversion Feature - Interest Expense	155,000
Date of Maturity									Aug. 21, 2019
Debt Issuance Cost	4,000
Discount for Interest on Note	$ 56,000
Shares Issued, Shares	450,000
Shares Issued, Value	$ 400,455
March Convertible Notes [Member]
Principle amount of convertible notes payable	42,500							$ 42,500
Interest rate on Convertible Notes								8.00%
Interest Expense	142
Embedded Beneficial Conversion Feature	31,556
Embedded Beneficial Conversion Feature - Interest Expense	1,419
Date of Maturity								Mar. 11, 2020
Debt Issuance Cost	2,500
March Convertible Notes 2 [Member]
Principle amount of convertible notes payable	150,000						$ 150,000
Interest rate on Convertible Notes							12.00%
Interest Expense	750
Embedded Beneficial Conversion Feature	93,077
Embedded Beneficial Conversion Feature - Interest Expense	9,256
Date of Maturity							Sep. 19, 2019
Discount for Interest on Note	$ 1,500
Shares Issued, Shares	115,384						115,384
Shares Issued, Value	$ 91,153

6. Advances from Related Party

6. Advances from Related Party (Details Narrative) - USD ($)	Mar. 31, 2019	Dec. 31, 2018
Related Party Transactions [Abstract]
Balance outstanding on related party advance	$ 42,000	$ 302,000

7. Revenue Sharing Agreements (

7. Revenue Sharing Agreements (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Apr. 01, 2019	Jan. 30, 2019	Jan. 16, 2019	Jan. 02, 2019	Dec. 13, 2018	Nov. 29, 2018
Payable to lender FV			$ 495,000
Interest expense	$ 605,595	$ 3,360
November HydraSpin Loan [Member]
Amount borrowed								$ 50,000
% Revenue for lender in exchange								5.00%
Date of cancellation	Mar. 3, 2019
Payable to lender FV								$ 150,000
Interest expense	$ 12,500
December HydraSpin Loan [Member]
Amount borrowed							$ 264,000
% Revenue for lender in exchange							50.00%
Date of cancellation	Feb. 27, 2019
Payable to lender FV							$ 495,000
Interest expense	$ 1,375
January HydraSpin Loan [Member]
Amount borrowed						$ 660,000
% Revenue for lender in exchange						50.00%
Payable to lender FV						$ 990,000
Interest expense	41,250
January HydraSpin Loan 2 [Member]
Amount borrowed					$ 660,000
% Revenue for lender in exchange					50.00%
Payable to lender FV					$ 990,000
Interest expense	34,375
January HydraSpin Loan 3 [Member]
Amount borrowed				$ 330,000
% Revenue for lender in exchange				40.00%
Payable to lender FV				$ 495,000
Interest expense	13,750
January HydraSpin Loan 4 [Member]
Amount borrowed				$ 330,000
% Revenue for lender in exchange				60.00%
Payable to lender FV				$ 495,000
Interest expense	$ 13,750

8. Equity Transactions (Details

8. Equity Transactions (Details Narrative)	3 Months Ended
	Mar. 31, 2018USD ($)shares
Notes to Financial Statements
Shares issued to executives	610,000
Price per share	.5
Proceeds from executive stock issue | $	$ 305,000
Proceeds from stock issue | $	$ 828,000
Shares Issued for conversion	200,000
Common Stock shares issued	1,656,000
Subscription receivable | $	$ 50,000
Shares issued for debt issuance cost	565,384

9. Operating Leases _ Right o_3

9. Operating Leases – Right of Use Assets as of March 31, 2019 (Details)	Mar. 31, 2019USD ($)
Notes to Financial Statements
Right-of-use assets	$ 140,340
Lease liability obligations, current	82,438
Lease liability obligations, less current position	52,994
Total lease liability obligations	$ 135,432
Weighted-average remaining lease term	1 year 219 days
Weighted-average discount rate	10.00%

9. Operating Leases _ Remaini_2

9. Operating Leases – Remaining Right of Use Assets as of March 31, 2019 (Details)	Mar. 31, 2019USD ($)
Notes to Financial Statements
2019	$ 69,000
2020	78,000
Total minimum payments	$ 147,000

9. Operating Leases _ Right o_4

9. Operating Leases – Right of Use Assets (Details Narrative)	3 Months Ended
	Mar. 31, 2019USD ($)
Notes to Financial Statements
Operating lease costs	$ 22,798
Operating cash flows from operating leases	$ 22,791

10. Income Taxes (Details Narra

10. Income Taxes (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Income Tax Disclosure [Abstract]
Annual effective tax rate	0.00%
Operating loss carry-forward	$ 9,500,000
Change in valuation allowance	$ 334,000	$ 172,000

11. Segment Information (Detail

11. Segment Information (Details) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Revenues
Water purification products	$ 78,552	$ 128,130
Oil recovery machines
Total Revenues	78,552	128,130
Loss from operations
Water purification products	722,554	718,285
Oil recovery machines	96,581
General corporate	149,276	96,067
Total Loss from Operations	968,411	814,352
Capital expenditures
Water purification products	92,158
Oil recovery machines	628,625
General corporate
Total Capital Expenditures	720,783
Total assets
Water purification products	733,504		$ 612,498
Oil recovery machines	1,829,517		1,244,814
General corporate	791,702		63,956
Total Assets	$ 3,354,723		$ 1,921,268

12. Subsequent Events - Financi

12. Subsequent Events - Financing (Details Narrative) - USD ($)	Apr. 10, 2019	Apr. 09, 2019	Mar. 31, 2019	Dec. 31, 2018
Principle amount of convertible notes payable			$ 620,470	$ 428,257
April Convertible Notes [Member]
Principle amount of convertible notes payable		$ 175,000
Interest rate on Convertible Notes		12.00%
Date of Maturity		Jan. 9, 2020
April Convertible Notes 2 [Member]
Principle amount of convertible notes payable	$ 102,500
Interest rate on Convertible Notes	8.00%
Date of Maturity	Apr. 10, 2020

12. Subsequent Events - HydraSp

12. Subsequent Events - HydraSpin Contracts (Details Narrative)	Apr. 01, 2019USD ($)
Subsequent Events [Abstract]
Amount Borrowed	$ 330,000
Loan Payable - FV	$ 495,000

12. Subsequent Events - Other C

12. Subsequent Events - Other Contracts (Details Narrative) - USD ($)	Apr. 01, 2019	Mar. 31, 2019	Dec. 31, 2018
Subsequent Events [Abstract]
Operating Lease	$ 956,000	$ 52,994
Lease Term	4 years