Water Now (WTNW) 10-Q 8 Apr 21 2020 Q3 Quarterly report Financial data

Cover

Cover - shares	9 Months Ended
	Sep. 30, 2020	Apr. 06, 2021
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2020
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2020
Current Fiscal Year End Date	--12-31
Entity File Number	000-55825
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		80,890,981

Balance Sheets (Unaudited)

Balance Sheets (Unaudited) - USD ($)	Sep. 30, 2020	Dec. 31, 2019
Current Assets
Cash	$ 30,908	$ 66,042
Accounts receivable	250	118,250
Inventory	513,589	517,849
Prepaid expenses		21,264
Total Currents Assets	544,747	723,405
Property and equipment - net	2,155,916	2,137,272
Operating lease right-of-use assets	549,030	753,432
Distributorship agreement, net	616,667	766,667
Security deposit	23,481	34,330
Total Assets	3,889,841	4,415,106
Current Liabilities
Accounts payable	1,382,295	1,285,214
Accrued expenses	811,278	532,512
Distributorship accrued expense	250,000	250,000
Derivative liability	746,049	508,323
Advances from related parties	53,591	4,407
Deposits received on sale of assets	625,000
Current portion of operating lease liabilities	190,213	247,070
Current portion of convertible notes payable, net of debt discounts	2,050,696	2,143,369
Current portion of notes payable	835,414	504,000
Current portion of revenue sharing liabilities	3,795,258
Total Current Liabilities	10,739,794	5,474,895
Long-term notes payable	101,189
Operating lease liabilities	374,994	520,137
Revenue sharing liabilities	2,041,389	5,042,455
Total Liabilities	13,257,366	11,037,487
Stockholders’ Deficit
Preferred stock – no par value, 10,000,000 shares authorized, zero issued and outstanding at September 30, 2020 and December 31, 2019
Common stock – no par value, 90,000,000 shares authorized, 77,242,560 and 55,663,191 shares issued and 77,046,368 and 55,466,999 shares outstanding as of September 30, 2020 and December 31, 2019, respectively	9,376,224	9,071,943
Additional paid-in capital	5,208,650	2,813,464
Subscription receivable	(50,000)	(50,000)
Treasury stock, at cost (100,000 shares held as of September 30, 2020 and December 31, 2019)	(10,000)	(10,000)
Accumulated deficit	(23,892,399)	(18,447,788)
Total Stockholders’ Deficit	(9,367,525)	(6,622,381)
Total Liabilities and Stockholders’ Deficit	$ 3,889,841	$ 4,415,106

Balance Sheets (Parenthetical)

Balance Sheets (Parenthetical) - $ / shares	Sep. 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	77,242,560	55,663,191
Common Stock, shares outstanding	77,046,368	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		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Income Statement [Abstract]
Revenues, net	$ 2,970	$ 20,092	$ 7,635	$ 334,393
Cost of goods sold	2,133	16,553	4,260	281,080
Gross Profit	837	3,539	3,375	53,313
Operating expenses
Salaries and wages	218,958	398,579	620,701	1,310,049
Professional fees	255,871	271,661	424,847	812,417
Selling, general and administrative	213,751	385,772	582,464	1,087,673
(Gain) Loss on sale of assets			19,988	(4,070)
Total operating expenses	688,580	1,056,012	1,648,000	3,206,069
Loss from operations	(687,743)	(1,052,473)	(1,644,625)	(3,152,756)
Other income (expense)
Interest expense	(784,712)	(3,760,191)	(2,933,520)	(4,885,981)
Gain (Loss) on derivative liability	442,317	832,566	(867,361)	646,557
Other income			895
Loss on extinguishment of debt		(130,052)		(182,877)
Total other expense	(342,395)	(3,057,677)	(3,799,986)	(4,422,301)
Loss before provision for income taxes	(1,030,138)	(4,110,150)	(5,444,611)	(7,575,057)
Provision for income taxes
Net Loss	$ (1,030,138)	$ (4,110,150)	$ (5,444,611)	$ (7,575,057)
Loss per share
basic and fully diluted	$ (0.01)	$ (0.10)	$ (0.08)	$ (0.20)
Weighted-average number of shares of common stock
basic and fully diluted	77,463,408	41,444,725	70,078,770	38,469,731

Shareholders Equity (Unaudited)

Shareholders Equity (Unaudited) - USD ($)	Common Stock	Additional Paid-In Capital	Subscription Receivable [Membe	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 cash, Shares	1,180,000
Common stock issuances for cash, Value	$ 299,387					299,387
Common stock issuances for services and compensation, Shares	1,125,000
Common stock issuances for services and compensation, Value	$ 370,275					370,275
Common stock issued for debt issuance costs, Shares	1,190,384
Common stock issued for debt issuance costs, Value	$ 572,858					572,858
Reduction of derivative liability from conversion/redemption		721,043				721,043
Share issued for conversion of debt, Shares	5,672,203
Share issued for conversion of debt, Value	$ 585,168					585,168
Shares issued in settlement claim, Shares	1,502,389
Shares issued in settlement claim, Value	$ 585,932					585,932
Net loss					(7,575,057)	(7,575,057)
Ending Balance Common Stock, Shares at Sep. 30, 2019	46,486,784
Ending Balance Common Stock, Value at Sep. 30, 2019	$ 8,877,325	1,408,474	(50,000)		(15,554,234)	(5,318,435)
Beginning Balance Common Stock, Shares at Dec. 31, 2019	55,466,999
Beginning Balance Common Stock, Value at Dec. 31, 2019	$ 9,071,943	2,813,464	(50,000)	(10,000)	(18,447,788)	(6,622,381)
Common stock issuances for services and compensation, Shares	485,000
Common stock issuances for services and compensation, Value	$ 33,600					33,600
Common stock issued for debt issuance costs, Shares	20,894,369
Common stock issued for debt issuance costs, Value	$ 482,681					482,681
Reduction of derivative liability from conversion/redemption		2,395,186				2,395,186
Common stock issued as collateral for loan	1,000,000
Common stock retired, Shares	(800,000)
Common stock retired, Value	$ (212,000)					(212,000)
Net loss					(5,444,611)	(5,444,611)
Ending Balance Common Stock, Shares at Sep. 30, 2020	77,046,368
Ending Balance Common Stock, Value at Sep. 30, 2020	$ 9,376,224	$ 5,208,650	$ (50,000)	$ (10,000)	$ (23,892,399)	$ (9,367,525)

Statements of Cash Flows (Unaud

Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Cash flows from operating activities:
Net loss	$ (5,444,611)	$ (7,575,057)
Adjustments to reconcile net loss to net cash used in operating activities:
Common stock issued as payment for services and employee’s compensation	33,600	370,275
Depreciation and amortization	224,229	192,338
Lease expense	2,402
Amortization of discounts	794,192	1,345,498
Derivative expense at issuance	1,370,551	2,765,228
Amortization of interest for revenue sharing agreements	794,192	462,277
Interest converted to common shares	43,885	59,049
Loss (Gain) on sale of assets	19,988	(4,070)
Change in fair value of derivative liability	867,361	(646,557)
Loss on extinguishment of debt		182,877
Changes in operating working capital items:
Accounts receivable		(295,800)
Other receivables		(30,000)
Inventory	4,260	(14,174)
Prepaid expenses	21,264	(5,663)
Security deposit	10,849	(23,481)
Accounts payable	3,081	847,944
Accrued expenses	278,766	(136,581)
Net cash used in operating activities	(1,262,622)	(2,505,897)
Cash flows from investing activities:
Purchases of property and equipment	(30,000)	(1,650,783)
Proceeds from sale of assets	684,500	60,000
Payment for distributorship agreement		(400,000)
Net cash provided by (used in) investing activities	654,500	(1,990,783)
Cash flows from financing activities:
Cash advances from related parties	367,036	417,997
Cash repayments to related parties	(317,852)	(700,494)
Borrowings on notes payable	340,400	630,000
Payments on notes payable	(50,158)	(430,000)
Borrowings on convertible notes payable	631,195	2,562,935
Payments on convertible notes payable	(397,633)	(945,122)
Issuances of common stock		299,387
Borrowings on revenue sharing liabilities		2,736,000
Net cash provided by financing activities	572,988	4,570,703
Net increase (decrease) in cash	(35,134)	74,023
Cash at beginning of period	66,042	53,106
Cash at end of period	30,908	127,129
Supplemental Disclosure of Interest and Income Taxes Paid:
Interest paid during the period	75,718	132,507
Non-cash disclosures:
Conversion of convertible notes payable into common shares	438,796	585,168
Purchase of property and equipment through issuance of notes payable	142,361
Reclass of derivative upon settlement	2,395,186	1,114,472
Original Issue Discount	78,805	231,565
Discount from derivative		145,000
Discount from shares issued for issuance costs		$ 572,858

1. Basis of Presentation_and Su

1. Basis of Presentation and Summary of Significant Accounting Policies	9 Months Ended
	Sep. 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 3 regarding the Company's prospective sale of substantially all of its assets subsequent to September 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 September 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 nine months ended September 30, 2020: Derivative liability balance at December 31, 2019 $ 508,323 Additions to derivative liability for new debt 1,765,551 Reclass to equity upon conversion/cancellation (2,395,186 ) Change in fair value 867,361 Balance at September 30, 2020 $ 746,049 At September 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 $0.09; a risk-free interest rate of 0.11%, and expected volatility of the Company’s common stock of 242.37%, and the various estimated reset exercise prices weighted by probability.

2. Going Concern

2. Going Concern	9 Months Ended
	Sep. 30, 2020
Going Concern
Going Concern	2. Going Concern At September 30, 2020, the Company had approximately $31,000 in cash and had net working capital deficit of approximately $9,983,000. The Company, which generated a net loss of approximately $5,445,000 and $7,575,000 for the nine months ended September 30, 2020 and 2019, 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. Sale of Assets

3. Sale of Assets	9 Months Ended
	Sep. 30, 2020USD ($)
Revenues [Abstract]
Sale of Assets	3. Sale of Assets On July 31, 2020, the Company entered into an Asset Sale and Purchase Agreement (the “Agreement”) to sell substantially all of its assets to RigMax H20, LLC (the “Buyer”) for a total purchase price of $30.0 million in cash, subject to certain adjustments and credits. On November 24, 2020, the Company exercised its right to unilaterally terminate the Agreement. The termination of the Agreement was the result of the Buyer’s inability to fund the purchase price. The Company continues to evaluate the matter with the Buyer.​ As of September 30, 2020, the Company received $625,000 in advance deposits related to the sale of these assets.
Advance deposits received related to sale of assets	$ 625,000

4. Revenues

4. Revenues	9 Months Ended
	Sep. 30, 2020
Revenues [Abstract]
Revenues	4. 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 nine months ended September 30, September 30, 2020 2019 2020 2019 Revenues Water purification products $ 2,970 $ — $ 5,965 $ 308,744 Oil recovery systems — 20,092 1,670 25,649 $ 2,970 $ 20,092 $ 7,635 $ 334,393

5. Distributorship Agreement

5. Distributorship Agreement	9 Months Ended
	Sep. 30, 2020
Accounting Policies [Abstract]
Distributorship Agreement	5. Distributorship Agreement On October 31, 2018, the Company entered into an Exclusive Sales Distribution Agreement (the “Agreement”) with African Horizon Technologies (Pty) Ltd (“ AHT”) As of September 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. The Company has not issued the 5000,000 shares as of April 6, 2021. Amortization expense amounted to $150,000 and $150,000 for the nine months ended September 30, 2020 and 2019, respectively.

6. Notes Payable

6. Notes Payable	9 Months Ended
	Sep. 30, 2020
Debt Disclosure [Abstract]
Notes Payable	6. Notes Payable During 2020 the Company entered into additional short-term loans with lenders. Total principal borrowed during 2020 was $50,000. Repayments of $40,000 were made during the nine months ended September 30, 2020. The remaining $514,000 of principal was repaid or extended as of April 6, 2021. 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 disbursement date, including payroll costs, payment of interest on a covered obligation, rent and utilities. The principal balance at September 30, 2020 is $290,400.

7. Convertible Notes Payable

7. Convertible Notes Payable	9 Months Ended
	Sep. 30, 2020
Notes to Financial Statements
Convertible Notes Payable	7. 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 September 30, 2020 is $50,000. The note is currently in default as of September 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 September 30, 2020 is $100,000. The note is currently in default as of September 30, 2020. 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. 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 $263,000, 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 $0.10, a risk-free interest rate of 0.11% and expected volatility of the Company’s common stock of 254.43%, and the various estimated reset exercise prices weighted by probability. 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 September 30, 2020 is $175,000. The note is currently in default as of September 30, 2020. The Company borrowed $447,500 from a lender on July 14, 2020, using approximately $338,000 of the proceeds to pay off existing loans in default to the lender. The note bears interest at 12% and becomes due on July 14, 2021. Principal and interest payments of $48,180 are due monthly beginning October 12, 2020. 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 $44,750 as a discount on the note and paid $13,055 for debt issuance costs. The principal balance at September 30, 2020 is $447,500. During the nine months ended September 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.

8. Advances from Related Party

8. Advances from Related Party	9 Months Ended
	Sep. 30, 2020
Related Party Transactions [Abstract]
Advances from Related Party	8. 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 $54,000 and $4,000 at September 30, 2020 and December 31, 2019, respectively, to the stockholder.

9. Revenue Sharing Agreements

9. Revenue Sharing Agreements	9 Months Ended
	Sep. 30, 2020
Notes to Financial Statements
Revenue Sharing Agreements	9. Revenue Sharing Agreements No additional revenue sharing agreements were entered into during the nine months ended September 30, 2020. The Company recorded an additional $794,000 in interest expense during the nine months ended September 30, 2020 related to the existing revenue sharing agreements. No payments have been made on existing revenue sharing agreements. As of April 6, 2021, 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.

10. Equity Transactions

10. Equity Transactions	9 Months Ended
	Sep. 30, 2020
Notes to Financial Statements
Equity Transactions	10. Equity Transactions From January 1, 2019 to September 30, 2019, the Company issued 5,672,203 shares to lenders upon receipt of conversion notices for total principal, interest and fees of $585,168. The Company also issued 1,190,384 shares to lenders for debt issuance costs. In addition, the Company issued 1,125,000 shares to employees and consultants valued at the share price on the date the services were earned and issued 1,180,000 shares to investors for total cash proceeds of $299,387. From January 1, 2020 to September 30, 2020, the Company issued 20,894,369 shares to lenders upon receipt of conversion notices for total principal, interest and fees of $482,681. The Company also issued 485,000 shares to employees and consultants valued at $33,600 and issued 1,000,000 shares as collateral held in escrow, to be cancelled upon payment of the debt. The Company retired 800,000 shares.

11. Operating Leases _ Right of

11. Operating Leases – Right of Use Assets	9 Months Ended
	Sep. 30, 2020
Notes to Financial Statements
Operating Leases - Right of Use Assets	11. Operating Lease 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 September 30, 2020: Right-of-use assets $ 549,030 Lease liability obligations, current $ 190,213 Lease liability obligations, less current portion 374,994 Total lease liability obligations $ 565,207 Weighted-average remaining lease term 2.7 years Weighted-average discount rate 10 % During the nine months ended September 30, 2020, the Company recognized approximately $124,000 in operating lease costs and are included in selling, general and administrative expenses in our consolidated statement of operations. During the nine months ended September 30, 2020, operating cash flows from operating leases was $175,000. Approximate future minimum lease payments for the Company’s right of use assets over the remaining lease periods as of September 30, 2020, are as follows: Year ending December 31, 2020 $ 59,000 2021 240,000 2022 246,000 2023 103,000 $ 648,000

12. Income Taxes

12. Income Taxes	9 Months Ended
	Sep. 30, 2020
Income Tax Disclosure [Abstract]
Income Taxes	12. 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 September 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 $15,413,000 at September 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 September 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 $673,000 and $1,590,000 for the nine months ended September 30, 2020 and 2019, respectively.

13. Segment Information

13. Segment Information	9 Months Ended
	Sep. 30, 2020
Income Tax Disclosure [Abstract]
Segment Information	13. 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 September 30, For the nine months ended September 30, 2020 2019 2020 2019 Revenues Water purification products $ 2,970 $ — $ 5,965 $ 308,744 Oil recovery systems — 20,092 1,670 25,649 $ 2,970 $ 20,092 $ 7,635 $ 334,393 Loss from operations Water purification products $ 177,851 $ 608,469 $ 498,137 $ 1,936,762 Oil recovery systems 141,196 196,485 484,486 541,599 General corporate 368,696 247,519 662,002 674,395 $ 687,743 $ 1,052,473 $ 1,644,625 $ 3,152,756 Capital expenditures Water purification products $ — $ — $ — $ 92,158 Oil recovery systems — — 30,000 1,558,625 General corporate — — — — $ — $ — $ 30,000 $ 1,650,783 September 30, 2020 December 31, 2019 Total assets Water purification products $ 537,970 $ 749,536 Oil recovery systems 2,582,206 2,576,758 General corporate 769,665 1,088,812 $ 3,889,841 $ 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.

14. Subsequent Events

14. Subsequent Events	9 Months Ended
	Sep. 30, 2020
Subsequent Events [Abstract]
Subsequent Events	14. Subsequent Events The Company borrowed $605,000 from a lender on January 7, 2021. The note bears interest at 12% and is payable in one lump sum on January 7, 2022, at which time the entire amount of principal and accrued interest is due and payable. The note is unsecured. Upon and event of default, the outstanding principal and interest amount is convertible by the holder into shares of the Company’s common stock at a price per share equal to $0.025. In addition, the Company paid $60,500 as a discount on the note and paid $4,500 for debt issuance costs.

1. Basis of Presentation and Si

1. 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 September 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 nine months ended September 30, 2020: Derivative liability balance at December 31, 2019 $ 508,323 Additions to derivative liability for new debt 1,765,551 Reclass to equity upon conversion/cancellation (2,395,186 ) Change in fair value 867,361 Balance at September 30, 2020 $ 746,049 At September 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 $0.09; a risk-free interest rate of 0.11%, and expected volatility of the Company’s common stock of 242.37%, and the various estimated reset exercise prices weighted by probability.

1. Basis of Presentation (Table

1. Basis of Presentation (Tables)	9 Months Ended
	Sep. 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 1,765,551 Reclass to equity upon conversion/cancellation (2,395,186 ) Change in fair value 867,361 Balance at September 30, 2020 $ 746,049

4. Revenues (Tables)

4. Revenues (Tables)	9 Months Ended
	Sep. 30, 2020
Revenues [Abstract]
Revenues	For the three months ended September 30, For the nine months ended September 30, 2020 2019 2020 2019 Revenues Water purification products $ 2,970 $ — $ 5,965 $ 308,744 Oil recovery systems — 20,092 1,670 25,649 $ 2,970 $ 20,092 $ 7,635 $ 334,393

11. Operating Leases _ Right _2

11. Operating Leases – Right of Use Assets as of September 30, 2020 (Tables)	3 Months Ended
	Mar. 31, 2020
Notes to Financial Statements
Operating Leases - Right of Use Assets	Right-of-use assets $ 549,030 Lease liability obligations, current $ 190,213 Lease liability obligations, less current portion 374,994 Total lease liability obligations $ 565,207 Weighted-average remaining lease term 2.7 years Weighted-average discount rate 10 %

11. Operating Leases _ Remainin

11. Operating Leases – Remaining Right of Use Assets as of September 30, 2020 (Tables)	9 Months Ended
	Sep. 30, 2020
Notes to Financial Statements
Operating Leases - Remaining Right of Use Assets	Year ending December 31, 2020 $ 59,000 2021 240,000 2022 246,000 2023 103,000 $ 648,000

13. Segment Information (Tables

13. Segment Information (Tables)	9 Months Ended
	Sep. 30, 2020
Income Tax Disclosure [Abstract]
Segment Information	For the three months ended September 30, For the nine months ended September 30, 2020 2019 2020 2019 Revenues Water purification products $ 2,970 $ — $ 5,965 $ 308,744 Oil recovery systems — 20,092 1,670 25,649 $ 2,970 $ 20,092 $ 7,635 $ 334,393 Loss from operations Water purification products $ 177,851 $ 608,469 $ 498,137 $ 1,936,762 Oil recovery systems 141,196 196,485 484,486 541,599 General corporate 368,696 247,519 662,002 674,395 $ 687,743 $ 1,052,473 $ 1,644,625 $ 3,152,756 Capital expenditures Water purification products $ — $ — $ — $ 92,158 Oil recovery systems — — 30,000 1,558,625 General corporate — — — — $ — $ — $ 30,000 $ 1,650,783 September 30, 2020 December 31, 2019 Total assets Water purification products $ 537,970 $ 749,536 Oil recovery systems 2,582,206 2,576,758 General corporate 769,665 1,088,812 $ 3,889,841 $ 4,415,106

1. Basis of Presentation (Detai

1. Basis of Presentation (Details)	9 Months Ended
	Sep. 30, 2020USD ($)
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Derivative liability beginning balance	$ 508,323
Additions to derivative liability for new debt	1,765,551
Reclass to equity upon conversion/cancellation	(2,395,186)
Change in fair value	867,361
Derivative liability end balance	$ 746,049

1. Basis of Presentation (Det_2

1. Basis of Presentation (Details Narrative)	Sep. 30, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Price of company common stock	.09
Risk-free interest rate	0.11%
Expected volatility of company common stock	242.37%

2. Going Concern (Details Narra

2. Going Concern (Details Narrative) - USD ($)	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Going Concern
Cash	$ 30,908		$ 66,042
Working capital	(9,983,000)
Net Loss	$ (5,444,611)	$ (7,575,057)

4. Revenues (Details)

4. Revenues (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Revenues [Abstract]
Water purification products	$ 2,970		$ 5,965	$ 308,744
Oil recovery machines		20,092	1,670	25,649
Total Revenues	$ 2,970	$ 20,092	$ 7,635	$ 334,393

5. Distributorship Agreement (D

5. Distributorship Agreement (Details Narrative) - USD ($)	9 Months Ended
	Sep. 30, 2020	Sep. 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	$ 150,000	$ 150,000
Distributorship accrued expenses	250,000

6. Notes Payable (Details Narra

6. Notes Payable (Details Narrative) - USD ($)	9 Months Ended
	Sep. 30, 2020	Aug. 19, 2020	Apr. 20, 2020
Amount borrowed from lenders	$ 50,000
Amounts repaid	$ 40,000
Loan amount		$ 514,000
Paycheck Protection Program Loan [Member]
Loan amount			$ 290,400
Interest rate			1.00%

7. Convertible Notes Payable (D

7. Convertible Notes Payable (Details Narrative) - USD ($)	3 Months Ended	9 Months Ended
	Mar. 31, 2020	Sep. 30, 2020	Sep. 30, 2019	Jan. 07, 2021	Mar. 04, 2020	Feb. 05, 2020	Jan. 14, 2020	Dec. 31, 2019
Principle amount of convertible notes payable		$ 2,050,696						$ 2,143,369
Interest rate on Convertible Notes				12.00%
Debt conversion per share				$ .025
Embedded Beneficial Conversion Feature		$ 78,805	$ 231,565
Date of Maturity				Jan. 7, 2022
Debt Issuance Cost				$ 4,500
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							$ 0.5
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						$ 0.05
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

8. Advances from Related Party

8. Advances from Related Party (Details Narrative) - USD ($)	Sep. 30, 2020	Dec. 31, 2019
Related Party Transactions [Abstract]
Balance outstanding on related party advance	$ 54,000	$ 4,000

9. Revenue Sharing Agreements (

9. Revenue Sharing Agreements (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Apr. 06, 2021
Interest expense	$ 784,712	$ 3,760,191	$ 2,933,520	$ 4,885,981
Accounts payable					$ 1,000,000
Existing Revenue Sharing Agreements [Member]
Interest expense			$ 794,000

10. Equity Transactions (Detail

10. Equity Transactions (Details Narrative) - USD ($)	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Notes to Financial Statements
Shares issued to employees and consultants, Shares	485,000	1,125,000
Shares issued to employees and consultants, Value	$ 33,600
Shares Issued for conversion, Shares	20,894,369	5,672,203
Shares issued for conversion, Value	$ 482,681	$ 585,168
Common Stock issued, Shares		1,180,000
Common Stock issued, Value		$ 299,387
Common stock issued, collateral, shares	1,000,000
Shares issued for debt issuance cost		1,190,384

11. Operating Leases _ Right _3

11. Operating Leases – Right of Use Assets as of September 30, 2020 (Details)	Sep. 30, 2020USD ($)
Notes to Financial Statements
Right-of-use assets	$ 549,030
Lease liability obligations, current	190,213
Lease liability obligations, less current position	374,994
Total lease liability obligations	$ 565,207
Weighted-average remaining lease term	2 years 255 days 12 hours
Weighted-average discount rate	10.00%

11. Operating Leases _ Remain_2

11. Operating Leases – Remaining Right of Use Assets as of September 30, 2020 (Details)	Sep. 30, 2020USD ($)
Notes to Financial Statements
2020	$ 59,000
2021	240,000
2022	246,000
2023	103,000
Total minimum payments	$ 648,000

11. Operating Leases _ Right _4

11. Operating Leases – Right of Use Assets (Details Narrative)	9 Months Ended
	Sep. 30, 2020USD ($)
Notes to Financial Statements
Operating lease costs	$ 124,000
Operating cash flows from operating leases	$ 175,000

12. Income Taxes (Details Narra

12. Income Taxes (Details Narrative) - USD ($)	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Income Tax Disclosure [Abstract]
Annual effective tax rate	0.00%	0.00%
Operating loss carry-forward	$ 15,413,000
Change in valuation allowance	$ 673,000	$ 1,590,000

13. Segment Information (Detail

13. Segment Information (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Revenues
Water purification products	$ 2,970		$ 5,965	$ 308,744
Oil recovery machines		20,092	1,670	25,649
Total Revenues	2,970	20,092	7,635	334,393
Loss from operations
Water purification products	177,851	608,469	498,137	1,936,762
Oil recovery machines	141,196	196,485	484,486	541,599
General corporate	368,696	247,519	662,002	674,395
Total Loss from Operations	687,743	1,052,473	1,644,625	3,152,756
Capital expenditures
Water purification products				92,158
Oil recovery machines			30,000	1,558,625
General corporate
Total Capital Expenditures			30,000	$ 1,650,783
Total assets
Water purification products	537,970		537,970		$ 749,536
Oil recovery machines	2,582,206		2,582,206		2,576,758
General corporate	769,665		769,665		1,088,812
Total Assets	$ 3,889,941		$ 3,889,941		$ 4,415,106

14. Subsequent Events - Stock I

14. Subsequent Events - Stock Issuances (Details Narrative)	Jan. 07, 2021USD ($)$ / shares
Subsequent Events [Abstract]
Amount borrowed from lenders	$ 605,000
Date of Maturity	Jan. 7, 2022
Interest rate on Convertible Notes	12.00%
Debt conversion per share | $ / shares	$ .025
Discount on note	$ 60,500
Debt Issuance Cost	$ 4,500