Water Now (WTNW) 10-Q 21 Aug 20 2020 Q2 Quarterly report Financial data

Cover

Cover - shares	6 Months Ended
	Jun. 30, 2020	Aug. 14, 2020
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2020
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2020
Current Fiscal Year End Date	--12-31
Entity Registrant Name	Water Now, Inc.
Entity Central Index Key	0001713909
Entity Incorporation, State or Country Code	TX
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Elected Not To Use the Extended Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		78,042,560

Balance Sheets (Unaudited)

Balance Sheets (Unaudited) - USD ($)	Jun. 30, 2020	Dec. 31, 2019
Current Assets
Cash	$ 8,973	$ 66,042
Accounts receivable	250	118,250
Inventory	515,722	517,849
Prepaid expenses	1,083	21,264
Total Currents Assets	526,028	723,405
Property and equipment - net	2,180,813	2,137,272
Operating lease right-of-use assets	591,520	753,432
Distributorship agreement, net	666,667	766,667
Security deposit	23,481	34,330
Total Assets	3,988,509	4,415,106
Current Liabilities
Accounts payable	1,199,571	1,285,214
Accrued expenses	588,710	532,512
Distributorship accrued expense	250,000	250,000
Derivative liability	2,663,585	508,323
Advances from related parties	173,649	4,407
Current portion of operating lease liabilities	240,541	247,070
Current portion of convertible notes payable, net of debt discounts	1,867,344	2,143,369
Current portion of notes payable	850,414	504,000
Current portion of revenue sharing liabilities	3,631,083
Total Current Liabilities	11,464,897	5,474,895
Long-term notes payable	107,844
Operating lease liabilities	425,079	520,137
Revenue sharing liabilities	1,940,833	5,042,455
Total Liabilities	13,938,653	11,037,487
Commitments and Contingencies
Stockholders' Deficit
Preferred stock – no par value, 10,000,000 shares authorized, zero issued and outstanding at June 30, 2020 and December 31, 2019
Common stock - no par value, 90,000,000 shares authorized, 74,942,560 and 55,663,191 shares issued and 74,746,368 and 55,466,999 shares outstanding as of June 30, 2020 and December 31, 2019, respectively	9,501,224	9,071,943
Additional paid-in capital	3,470,893	2,813,464
Subscription receivable	(50,000)	(50,000)
Treasury stock, at cost (100,000 shares held as of June 30, 2020 and December 31, 2019)	(10,000)	(10,000)
Accumulated deficit	(22,862,261)	(18,447,788)
Total Stockholders' Deficit	(9,950,144)	(6,622,381)
Total Liabilities and Stockholders' Deficit	$ 3,988,509	$ 4,415,106

Balance Sheets (Parenthetical)

Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2020	Dec. 31, 2019
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	74,942,560	55,663,191
Common Stock, shares outstanding	74,746,368	55,466,999
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
Treasury Stock, shares held	100,000	100,000

Statements of Operations (Unaud

Statements of Operations (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Income Statement [Abstract]
Revenues, net	$ 1,670	$ 235,749	$ 4,665	$ 314,301
Cost of goods sold		195,647	2,127	264,527
Gross Profit	1,670	40,102	2,538	49,774
Operating expenses
Salaries and wages	85,676	588,842	401,743	911,470
Professional fees	99,000	247,112	168,976	540,756
Selling, general and administrative	128,661	336,019	368,713	701,899
(Gain) Loss on sale of assets			19,988	(4,070)
Total operating expenses	313,337	1,171,973	959,420	2,150,055
Loss from operations	(311,667)	(1,131,871)	(956,882)	(2,100,281)
Other income (expense)
Interest expense	(1,153,572)	(980,341)	(2,148,808)	(1,585,937)
Loss on derivative liability	(758,952)		(1,309,678)
Other income			895
Loss on extinguishment of debt		(4,361)		(25,924)
Total other expense	(1,912,524)	(984,702)	(3,457,591)	(1,611,861)
Loss before provision for income taxes	(2,224,191)	(2,116,573)	(4,414,473)	(3,712,142)
Provision for income taxes
Net Loss	$ (2,224,191)	$ (2,116,573)	$ (4,414,473)	$ (3,712,142)
Loss per share
basic and fully diluted	$ (0.03)	$ (0.06)	$ (0.07)	$ (0.10)
Weighted-average number of shares of common stock
basic and fully diluted	74,019,483	38,001,547	66,386,451	36,982,233

Shareholders Equity (Unaudited)

Shareholders Equity (Unaudited) - USD ($)	Common Stock	Additional Paid-In Capital	Subscription Receivable [Member]	Treasury Stock	Retained Earnings / Accumulated Deficit	Total
Beginning Balance Common Stock, Shares at Dec. 31, 2018	35,816,808
Beginning Balance Common Stock, Value at Dec. 31, 2018	$ 6,463,705	$ 687,431	$ (50,000)		$ (7,979,177)	$ (878,041)
Common stock issuances for services and compensation, Shares	825,000
Common stock issuances for services and compensation, Value	$ 286,250					286,250
Common stock issued for debt issuance costs, Shares	465,384
Common stock issued for debt issuance costs, Value	$ 491,608					491,608
Share issued for conversion of debt, Shares	1,489,051
Share issued for conversion of debt, Value	$ 296,330					296,330
Beneficial conversion feature		477,772				477,772
Net loss					(3,712,142)	(3,712,142)
Ending Balance Common Stock, Shares at Jun. 30, 2019	38,596,243
Ending Balance Common Stock, Value at Jun. 30, 2019	$ 7,537,893	1,165,203	(50,000)		(11,691,319)	(3,038,223)
Beginning Balance Common Stock, Shares at Dec. 31, 2019	55,466,999
Beginning Balance Common Stock, Value at Dec. 31, 2019	$ 9,017,943	2,813,464	(50,000)	(10,000)	(18,447,788)	(6,622,381)
Common stock issuances for services and compensation, Shares	385,000
Common stock issuances for services and compensation, Value	$ 24,600					24,600
Common stock issued for debt issuance costs, Shares	17,894,369
Common stock issued for debt issuance costs, Value	$ 404,681					404,681
Reduction of derivative liability from conversion/redemption			657,429			657,429
Net loss					(4,414,473)	(4,414,473)
Ending Balance Common Stock, Shares at Jun. 30, 2020	74,746,368
Ending Balance Common Stock, Value at Jun. 30, 2020	$ 9,501,224	$ 3,470,893	$ (50,000)	$ (10,000)	$ (22,862,261)	$ (9,950,144)

Statements of Cash Flows (Unaud

Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Cash flows from operating activities:
Net loss	$ (4,414,473)	$ (3,712,142)
Adjustments to reconcile net loss to net cash used in operating activities:
Common stock issued as payment for services and employees’ compensation	24,600	255,500
Depreciation and amortization	149,332	127,871
Lease expense	60,325
Amortization of discounts	320,811	916,452
Derivative expense at issuance	1,108,013
Amortization of interest for revenue sharing agreements	529,461	294,708
Interest converted to common shares	41,345	5,486
Loss (Gain) on sale of assets	19,988	(4,070)
Change in fair value of derivative liability	1,309,678
Loss on extinguishment of debt		25,924
Changes in operating working capital items:
Accounts receivable		(295,800)
Other receivables		(15,000)
Inventory	2,127	27,876
Prepaid expenses	20,181	(24,611)
Security deposit	10,849	(23,481)
Accounts payable	32,357	744,876
Accrued expenses	56,198	(165,841)
Net cash used in operating activities	(729,208)	(1,842,252)
Cash flows from investing activities:
Purchases of property and equipment	(30,000)	(1,650,783)
Proceeds from sale of assets	59,500	60,000
Payment for distributorship agreement		(400,000)
Net cash provided by (used in) investing activities	29,500	(1,990,783)
Cash flows from financing activities:
Outstanding checks in excess of bank balance		71,474
Cash advances from related parties	367,036	182,000
Cash repayments to related parties	(197,794)	(421,965)
Borrowings on notes payable	340,400	365,000
Payments on notes payable	(28,503)	(165,000)
Borrowings on convertible notes payable	241,500	1,835,500
Payments on convertible notes payable	(80,000)	(510,745)
Borrowings on revenue sharing liabilities		2,436,000
Net cash provided by financing activities	642,639	3,792,264
Net decrease in cash	(57,069)	(40,771)
Cash at beginning of period	66,042	53,106
Cash at end of period	8,973	12,335
Supplemental Disclosure of Interest and Income Taxes Paid:
Interest paid during the period	37,543	306,191
Income taxes paid during the period
Non-cash disclosures:
Conversion of convertible notes payable into common shares	363,336	290,844
Purchase of property and equipment through issuance of notes payable	142,361
Reclass of derivative upon settlement	$ 657,429
Beneficial debt conversion feature		$ 1,078,874

1. Basis of Presentation_and Su

1. Basis of Presentation and Summary of Significant Accounting Policies	6 Months Ended
	Jun. 30, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation	1. Basis of Presentation and Summary of Significant Accounting Policies 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, 2019. 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. See Note 13 regarding the Company's prospective sale of substantially all of its assets subsequent to June 30, 2020. Fair Value Measurements ASC Topic 820, “ Fair Value Measurement” “Financial Instruments.” Nonfinancial assets, such as property, plant and equipment, and nonfinancial liabilities are recognized at their carrying amounts in the Company’s balance sheets. GAAP does not permit nonfinancial assets and liabilities to be remeasured at their fair values. However, GAAP requires the remeasurement of such assets and liabilities to their fair values upon the occurrence of certain events, such as the impairment of property, plant and equipment. In addition, if such an event occurs, GAAP requires the disclosure of the fair value of the asset or liability along with other information, including the gain or loss recognized in income in the period the remeasurement occurred. The Company did not have any Level 1 or Level 2 assets and liabilities at June 30, 2020 and 2019. The Derivative liabilities are Level 3 fair value measurements. The following is a summary of activity of Level 3 liabilities during the six months ended June 30, 2020: Derivative liability balance at December 31, 2019 $ 508,323 Additions to derivative liability for new debt 1,503,013 Reclass to equity upon conversion/cancellation (657,429 ) Change in fair value 1,309,678 Balance at June 30, 2020 $ 2,663,585 At June 30, 2020, the fair value of the derivative liabilities of convertible notes was estimated using the following weighted-average inputs: the price of the Company’s common stock of $0.05; a risk-free interest rate of 0.18%, and expected volatility of the Company’s common stock of 266.81%, and the various estimated reset exercise prices weighted by probability.

2. Going Concern

2. Going Concern	6 Months Ended
	Jun. 30, 2020
Going Concern
Going Concern	2. Going Concern At June 30, 2020 June 30, 2020

3. Revenues

3. Revenues	6 Months Ended
	Jun. 30, 2020
Revenues [Abstract]
Revenues	3. Revenues The Company’s revenues are generated from the sales of water purification products and the sales of hydrocarbons derived from the deployment and operation of Company owned oil recovery systems. The Company obtains purchase orders from its water purification customers for the sale of its products which sets forth the general terms and conditions including line item pricing and payment terms (generally due upon receipt). The Company recognizes revenue when its customers obtain control over the assets (generally when the title passes upon shipment) and it is probable that the Company will collect substantially all the amounts due. Individual promised goods are the Company’s only performance obligation. The Company earns revenue each month that the oil recovery systems are in place and operating. The Company generally receives 50% of the proceeds of the oil sales recovered using its systems. Water purification products that have been sold are not subject to returns unless the product is deemed defective. Credits or refunds are recognized when they are probable and reasonably estimated. The Company’s management reduces revenue to account for estimates of the Company’s credits and refunds. The Company included shipping and handling fees in net revenues. Shipping and handling costs are associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost and are included in cost of goods sold. Revenues, as disaggregated by revenue type and reportable segment (see Note 12), are shown below. For the three months ended For the six months ended June 30, June 30, 2020 2019 2020 2019 Revenues Water purification products $ — $ 230,192 $ 2,995 $ 308,744 Oil recovery systems 1,670 5,557 1,670 5,557 $ 1,670 $ 235,749 $ 4,665 $ 314,301

4. Distributorship Agreement

4. Distributorship Agreement	6 Months Ended
	Jun. 30, 2020
Accounting Policies [Abstract]
Distributorship Agreement	4. 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 will be AHT’s exclusive distributor of the Hydraspin Hydro Cyclone technology in the United States of America. The Company paid AHT $500,000 in cash and issued 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. is amortizing the asset to expense over the life of the Agreement of five years. As of June 30, 2020, the 500,000 shares remaining to be issued are recorded as distributorship accrued expense in the amount of $250,000 and are required to be issued prior to October 31, 2020. Amortization expense amounted to $100,000 and $100,000 for the six months ended June 30, 2020 and 2019, respectively.

5. Notes Payable

5. Notes Payable	6 Months Ended
	Jun. 30, 2020
Debt Disclosure [Abstract]
Notes Payable-Stockholders	5. Notes Payable During 2020 the Company entered into additional short-term loans with lenders. Total principal borrowed during 2020 was $50,000. Repayments of $25,000 were made during the six months ended June 30, 2020. The remaining $529,000 of principal was repaid or extended as of August 19, 2020. The notes are generally unsecured. On April 20, 2020, the Company obtained a Paycheck Protection Program (PPP) loan from a commercial bank in the amount of $290,400. The loan is unsecured, bears interest at 1.0% interest and is payable beginning November 20, 2020 in 18 equal installments. Interest accrues during the deferment period. The loan is subject to potential forgiveness in part or total, depending on the amount of certain costs incurred by the Company over an 8-week period after the loan’s disbursement date, including payroll costs, payment of interest on a covered obligation, rent and utilities. The principal balance at June 30, 2020 is $290,400.

6. Convertible Notes Payable

6. Convertible Notes Payable	6 Months Ended
	Jun. 30, 2020
Notes to Financial Statements
Convertible Notes Payable	6. Convertible Notes Payable The Company borrowed $50,000 from a lender on January 14, 2020. The note bears interest at 18% and is payable in one lump sum on June 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 at any time prior to the maturity date at the conversion price of $0.50 per share. The principal balance at June 30, 2020 is $50,000. The note is currently in default as of June 30, 2020. The Company borrowed $37,500 from a lender on February 5, 2020. The note is an extension of the existing Amended and Restated Secured Convertible Promissory Note dated June 18, 2018. The total principal due under the note is $100,000. The note bears interest at 18% and is payable in one lump sum on May 5, 2020. In the event 50% or more of the principal balance is paid prior to May 5, 2020 and the note is not in default, then the maturity date is extended to August 5, 2020. The required payment was not made by May 5, 2020 and the note is currently in default and outstanding. 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 a price per share equal to fifty percent of the average closing price of the Company’s common stock for the ten trading days prior to the conversion date. The conversion feature meets the definition of a derivative and therefore requires bifurcation and is accounted for as a derivative liability. The Company estimated the aggregate fair value of the conversion feature derivatives embedded in the debenture at the date the debt becomes convertible at $52,000, based on weighted probabilities of assumptions used in the Black Scholes pricing model. The key valuation assumptions used consist, in part, of the price of the Company’s common stock of $0.05, a risk-free interest rate of 1.57% and expected volatility of the Company’s common stock of 232.73%, and the various estimated reset exercise prices weighted by probability. The principal balance at June 30, 2020 is $100,000. The Company borrowed $175,000 from a lender on March 4, 2020. The note bears interest at 12% and is payable in one lump sum on September 4, 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 second lowest trade price of the Company’s common stock for the twenty trading days prior to the conversion date. In addition, the Company paid $17,500 as a discount on the note and paid $3,500 for debt issuance costs. The principal balance at June 30, 2020 is $175,000. During the six months ended June 30, 2020, the Company issued 1,000,000 shares to a lender as collateral held in escrow, to be cancelled upon payment of the debt.

7. Advances from Related Party

7. Advances from Related Party	6 Months Ended
	Jun. 30, 2020
Related Party Transactions [Abstract]
Advances from Related Party	7. Advances From Related Parties The Company has received non-interest bearing advances without a specified maturity date from a stockholder of the Company. The Company owed approximately $174,000 and $4,000 at June 30, 2020 and December 31, 2019, respectively, to the stockholder.

8. Revenue Sharing Agreements

8. Revenue Sharing Agreements	6 Months Ended
	Jun. 30, 2020
Notes to Financial Statements
Revenue Sharing Agreements	8. Revenue Sharing Agreements No additional revenue sharing agreements were entered into during the six months ended June 30, 2020. The Company recorded an additional $529,000 in interest expense during the six months ended June 30, 2020 related to the existing revenue sharing agreements. No payments have been made on existing revenue sharing agreements. As of August 19, 2020, the Company is obligated to purchase seven HydraSpin units with an aggregate cost of approximately $2 million awaiting shipment from Africa to the Company and there is approximately $1 million included in accounts payable for unpaid amounts on other units. No payment has been made on these units.

9. Equity Transactions

9. Equity Transactions	6 Months Ended
	Jun. 30, 2020
Notes to Financial Statements
Equity Transactions	9. Equity Transactions From January 1, 2019 to June 30, 2019, the Company issued 1,489,051 shares to lenders upon receipt of conversion notices. The Company also issued 465,384 shares to lenders for debt issuance costs. In addition, the Company issued 825,000 shares to employees and consultants valued at the share price on the date the services were earned. From January 1, 2020 to June 30, 2020, the Company issued 17,894,369 shares to lenders upon receipt of conversion notices for total principal, interest and fees of $404,681. The Company also issued 385,000 shares to employees and consultants valued at $24,600 and issued 1,000,000 shares as collateral held in escrow, to be cancelled upon payment of the debt.

10. Operating Leases _ Right of

10. Operating Leases – Right of Use Assets	6 Months Ended
	Jun. 30, 2020
Notes to Financial Statements
Operating Leases - Right of Use Assets	10. Operating Leases – Right of Use Assets The Company has an operating lease for office and warehouse space that expires in 2023. Below is a summary of the Company’s right of use assets and liabilities as of June 30, 2020 Right-of-use assets $ 591,520 Lease liability obligations, current $ 240,541 Lease liability obligations, less current portion 425,079 Total lease liability obligations $ 665,620 Weighted-average remaining lease term 2.9 years Weighted-average discount rate 10 % During the six months ended June 30, 2020 June 30, 2020 Approximate future minimum lease payments for the Company’s right of use assets over the remaining lease periods as of June 30, 2020 Year ending December 31, 2020 $ 196,000 2021 240,000 2022 246,000 2023 103,000 Total minimum payments $ 785,000

11. Income Taxes

11. Income Taxes	6 Months Ended
	Jun. 30, 2020
Income Tax Disclosure [Abstract]
Income Taxes	11. 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 2020 and 2019 annual effective tax rate is estimated to be 0% for the U.S. federal and state statutory tax rates because the Company is in a net operating loss position. The Company reviews tax uncertainties in light of changing facts and circumstances and adjust them accordingly. As of June 30, 2020 and December 31, 2019, 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. The Company had a net operating loss carry-forward for federal and state tax purposes of approximately $14,654,000 at June 30, 2020, 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 June 30, 2020 and December 31, 2019 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 allowance was approximately $419,000 and $779,000 for the six months ended June 30, 2020 and 2019, respectively.

12. Segment Information

12. Segment Information	6 Months Ended
	Jun. 30, 2020
Income Tax Disclosure [Abstract]
Segment Information	12. Segment Information The Company sells water purification products and operates oil recovery systems. 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 systems 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 For the six months ended June 30, June 30, 2020 2019 2020 2019 Revenues Water purification products $ — $ 230,192 $ 2,995 $ 308,744 Oil recovery systems 1,670 5,557 1,670 5,557 $ 1,670 $ 235,749 $ 4,665 $ 314,301 Loss from operations Water purification products $ 118,982 $ 605,739 $ 320,286 $ 1,328,293 Oil recovery systems 74,381 248,533 343,290 345,114 General corporate 118,304 277,599 293,306 426,874 $ 311,667 $ 1,131,871 $ 956,882 $ 2,100,281 Capital expenditures Water purification products $ — $ — $ — $ 92,158 Oil recovery systems — 930,000 30,000 1,558,625 General corporate — — — — $ — $ 930,000 $ 30,000 $ 1,650,783 June 30, 2020 December 31, 2019 Total assets Water purification products $ 545,917 $ 749,536 Oil recovery systems 2,635,455 2,576,758 General corporate 807,137 1,088,812 $ 3,988,509 $ 4,415,106 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.

13. Subsequent Events

13. Subsequent Events	6 Months Ended
	Jun. 30, 2020
Subsequent Events [Abstract]
Subsequent Events	13. Subsequent Events On July 13, 2020, a lender provided the Company with a Notice of Conversion to convert $78,000 of principal and interest into 3,000,000 shares of common stock. On July 31, 2020, the Company entered into an Asset Sale and Purchase Agreement to sell substantially all of its assets to RigMax H20, LLC for a total purchase price of $30.0 million in cash, subject to certain adjustments and credits. The transaction is targeted to close, subject to confirmatory due diligence and receipt of shareholder and other mandated regulatory approvals, on or before October 31, 2020. In August 2020 the Company issued 100,000 shares of common stock to a consultant.

2. Basis of Presentation and Si

2. Basis of Presentation and Significant Accounting Policies (Policies)	6 Months Ended
	May 30, 2020
Accounting Policies [Abstract]
Fair Value Measurements	Fair Value Measurements ASC Topic 820, “ Fair Value Measurement” “Financial Instruments.” Nonfinancial assets, such as property, plant and equipment, and nonfinancial liabilities are recognized at their carrying amounts in the Company’s balance sheets. GAAP does not permit nonfinancial assets and liabilities to be remeasured at their fair values. However, GAAP requires the remeasurement of such assets and liabilities to their fair values upon the occurrence of certain events, such as the impairment of property, plant and equipment. In addition, if such an event occurs, GAAP requires the disclosure of the fair value of the asset or liability along with other information, including the gain or loss recognized in income in the period the remeasurement occurred. The Company did not have any Level 1 or Level 2 assets and liabilities at June 30, 2020 and 2019. The Derivative liabilities are Level 3 fair value measurements. The following is a summary of activity of Level 3 liabilities during the six months ended June 30, 2020: Derivative liability balance at December 31, 2019 $ 508,323 Additions to derivative liability for new debt 1,503,013 Reclass to equity upon conversion/cancellation (622,781 ) Change in fair value (1,324,841 ) Balance at June 30, 2020 $ 2,713,396 At June 30, 2020, the fair value of the derivative liabilities of convertible notes was estimated using the following weighted-average inputs: the price of the Company’s common stock of $0.05; a risk-free interest rate of 0.18%, and expected volatility of the Company’s common stock of 266.81%, and the various estimated reset exercise prices weighted by probability.

1. Basis of Presentation (Table

1. Basis of Presentation (Tables)	6 Months Ended
	Jun. 30, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Summary of activity of Level 3	Derivative liability balance at December 31, 2019 $ 508,323 Additions to derivative liability for new debt 1,503,013 Reclass to equity upon conversion/cancellation (657,429 ) Change in fair value 1,309,678 Balance at June 30, 2020 $ 2,663,585

10. Operating Leases _ Right _2

10. Operating Leases – Right of Use Assets as of June 30, 2020 (Tables)	3 Months Ended
	Mar. 31, 2020
Notes to Financial Statements
Operating Leases - Right of Use Assets	Right-of-use assets $ 591,520 Lease liability obligations, current $ 240,541 Lease liability obligations, less current portion 425,079 Total lease liability obligations $ 665,620 Weighted-average remaining lease term 2.9 years Weighted-average discount rate 10 %

10. Operating Leases _ Remainin

10. Operating Leases – Remaining Right of Use Assets as of June 30, 2019 (Tables)	6 Months Ended
	Jun. 30, 2020
Notes to Financial Statements
Operating Leases - Remaining Right of Use Assets	Year ending December 31, 2020 $ 196,000 2021 240,000 2022 246,000 2023 103,000 Total minimum payments $ 785,000

12. Segment Information (Tables

12. Segment Information (Tables)	6 Months Ended
	Jun. 30, 2020
Income Tax Disclosure [Abstract]
Segment Information	For the three months ended For the six months ended June 30, June 30, 2020 2019 2020 2019 Revenues Water purification products $ — $ 230,192 $ 2,995 $ 308,744 Oil recovery systems 1,670 5,557 1,670 5,557 $ 1,670 $ 235,749 $ 4,665 $ 314,301 Loss from operations Water purification products $ 118,982 $ 605,739 $ 320,286 $ 1,328,293 Oil recovery systems 74,381 248,533 343,290 345,114 General corporate 118,304 277,599 293,306 426,874 $ 311,667 $ 1,131,871 $ 956,882 $ 2,100,281 Capital expenditures Water purification products $ — $ — $ — $ 92,158 Oil recovery systems — 930,000 30,000 1,558,625 General corporate — — — — $ — $ 930,000 $ 30,000 $ 1,650,783 June 30, 2020 December 31, 2019 Total assets Water purification products $ 545,917 $ 749,536 Oil recovery systems 2,635,455 2,576,758 General corporate 807,137 1,088,812 $ 3,988,509 $ 4,415,106

1. Basis of Presentation (Detai

1. Basis of Presentation (Details)	6 Months Ended
	Jun. 30, 2020USD ($)
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Derivative liability beginning balance	$ 508,323
Additions to derivative liability for new debt	1,503,013
Reclass to equity upon conversion/cancellation	(657,429)
Change in fair value	1,309,678
Derivative liability end balance	$ 2,663,585

1. Basis of Presentation (Det_2

1. Basis of Presentation (Details Narrative)	Jun. 30, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Price of company common stock	.05
Risk-free interest rate	18.00%
Expected volatility of company common stock	26681.00%

2. Going Concern (Details Narra

2. Going Concern (Details Narrative) - USD ($)	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Going Concern
Cash	$ 8,973		$ 66,042
Working capital	(10,939,000)
Net Loss	$ (4,414,473)	$ (3,712,142)

3. Revenues (Details)

3. Revenues (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Revenues [Abstract]
Water purification products		$ 230,192	$ 2,995	$ 308,744
Oil recovery machines	1,670	5,557	1,670	5,557
Total Revenues	$ 1,670	$ 235,749	$ 4,665	$ 314,301

4. Distributorship Agreement (D

4. Distributorship Agreement (Details Narrative) - USD ($)	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Accounting Policies [Abstract]
Payment for distributorship agreement	$ 500,000
Shares issued, distributorship agreement	500,000
Share value	$ 250,000
Share price	$ 0.5
Value of agreement	$ 1,000,000
Date of agreement	Oct. 31, 2018
Amortization Expense	$ 100,000	$ 100,000
Distributorship accrued expenses	250,000

5. Notes Payable (Details Narra

5. Notes Payable (Details Narrative) - USD ($)	6 Months Ended
	Jun. 30, 2020	Aug. 19, 2020	Apr. 20, 2020
Amount of principal repaid or extended		$ 529,000
Amount borrowed from lenders	$ 50,000
Paycheck Protection Program Loan [Member]
Loan amount			$ 290,400
Interest rate			1.00%

6. Convertible Notes Payable (D

6. Convertible Notes Payable (Details Narrative) - USD ($)	3 Months Ended	6 Months Ended
	Mar. 31, 2020	Jun. 30, 2020	Jun. 30, 2019	Mar. 04, 2020	Feb. 05, 2020	Jan. 14, 2020	Dec. 31, 2019
Principle amount of convertible notes payable		$ 1,867,344					$ 2,143,369
Embedded Beneficial Conversion Feature			$ 1,078,874
Shares issued held in escrow		1,000,000
January Convertible Note [Member]
Principle amount of convertible notes payable						$ 50,000
Interest rate on Convertible Notes						18.00%
Debt conversion per share						$ .5
Date of Maturity						Jun. 14, 2020
Balance remaining on note		$ 50,000
February Convertible Note [Member]
Principle amount of convertible notes payable					$ 37,500
Interest rate on Convertible Notes					18.00%
Debt conversion per share					$ .05
Embedded Beneficial Conversion Feature		52,000
Date of Maturity					May 5, 2020
Balance remaining on note		$ 100,000
Risk free interest rate		157.00%
Expected volatility		23273.00%
March Convertible Note [Member]
Principle amount of convertible notes payable				$ 175,000
Interest rate on Convertible Notes				12.00%
Date of Maturity				Sep. 4, 2020
Debt Issuance Cost				$ 3,500
Discount for Interest on Note				$ 17,500
Balance remaining on note	$ 175,000

Advances from Related Party (De

Advances from Related Party (Details Narrative) - USD ($)	Jun. 30, 2020	Dec. 31, 2019
Related Party Transactions [Abstract]
Balance outstanding on related party advance	$ 174,000	$ 4,000

8. Revenue Sharing Agreements (

8. Revenue Sharing Agreements (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Jul. 13, 2020
Interest expense	$ 1,153,572	$ 980,341	$ 2,148,808	$ 1,585,937
Accounts payable					$ 1,000,000
Existing Revenue Sharing Agreements [Member]
Interest expense			$ 529,000

9. Equity Transactions (Details

9. Equity Transactions (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Jun. 30, 2020	Jun. 30, 2019
Notes to Financial Statements
Shares issued to employees and consultants, Shares	385,000		385,000	825,000
Shares issued to employees and consultants, Value	$ 24,600		$ 24,600
Shares Issued for conversion, Shares	16,894,369	200,000
Shares issued for conversion, Value	$ 378,681
Common Stock issued, Shares	1,000,000		17,894,369	1,489,051
Common Stock issued, Value				$ 404,681
Shares issued for debt issuance cost		465,384		465,384

10. Operating Leases _ Right _3

10. Operating Leases – Right of Use Assets as of March 31, 2019 (Details)	Jun. 30, 2020USD ($)
Notes to Financial Statements
Right-of-use assets	$ 591,520
Lease liability obligations, current	240,541
Lease liability obligations, less current position	425,079
Total lease liability obligations	$ 665,620
Weighted-average remaining lease term	2 years 328 days 12 hours
Weighted-average discount rate	1000.00%

10. Operating Leases _ Remain_2

10. Operating Leases – Remaining Right of Use Assets as of March 31, 2019 (Details)	Jun. 30, 2020USD ($)
Notes to Financial Statements
2020	$ 196,000
2021	240,000
2022	246,000
2023	103,000
Total minimum payments	$ 785,000

10. Operating Leases _ Right _4

10. Operating Leases – Right of Use Assets (Details Narrative)	6 Months Ended
	Jun. 30, 2020USD ($)
Notes to Financial Statements
Operating lease costs	$ 82,000
Operating cash flows from operating leases	$ 116,000

11. Income Taxes (Details Narra

11. Income Taxes (Details Narrative) - USD ($)	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Income Tax Disclosure [Abstract]
Annual effective tax rate	0.00%	0.00%
Operating loss carry-forward	$ 14,654,000
Change in valuation allowance	$ 419,000	$ 779,000

12. Segment Information (Detail

12. Segment Information (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Revenues
Water purification products		$ 230,192	$ 2,995	$ 308,744
Oil recovery machines	1,670	5,557	1,670	5,557
Total Revenues	1,670	235,749	4,665	314,301
Loss from operations
Water purification products	118,982	605,739	320,286	1,328,293
Oil recovery machines	74,381	248,533	343,290	345,114
General corporate	118,304	277,599	293,306	426,874
Total Loss from Operations	311,667	1,131,871	956,882	2,100,281
Capital expenditures
Water purification products				92,158
Oil recovery machines		930,000	30,000	1,558,625
General corporate
Total Capital Expenditures		$ 930,000	30,000	$ 1,650,783
Total assets
Water purification products	545,917		545,917		$ 749,536
Oil recovery machines	2,635,455		2,635,455		2,576,758
General corporate	807,137		807,137		1,088,812
Total Assets	$ 3,988,509		$ 3,988,509		$ 4,415,106

13. Subsequent Events - Stock I

13. Subsequent Events - Stock Issuances (Details Narrative) - USD ($)	Jul. 31, 2020	Jul. 13, 2020
Subsequent Events [Abstract]
Amount being converted, Value		$ 78,000
Amount of shares being issued, Shares		3,000,000
Purchase Price	$ 30,000,000