Document and Entity Information
Document and Entity Information | 9 Months Ended |
Sep. 30, 2018 | |
Document and Entity Information: | |
Entity Registrant Name | Ocean Thermal Energy Corp |
Document Type | POS AM |
Document Period End Date | Sep. 30, 2018 |
Trading Symbol | cpwr |
Amendment Flag | true |
Amendment Description | To update financials. |
Entity Central Index Key | 827,099 |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Non-accelerated Filer |
Entity Current Reporting Status | Yes |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Current Assets | |||
Cash | $ 18,174 | $ 425,015 | $ 7,495 |
Prepaid expenses | 20,000 | 25,000 | 30,549 |
Total Current Assets | 38,174 | 450,015 | 38,044 |
Property and Equipment | |||
Property and equipment, net | 842 | 1,352 | 2,366 |
Assets under construction | 922,639 | 892,639 | 846,285 |
Property and Equipment, net | 923,481 | 893,991 | 848,651 |
Total Assets | 961,655 | 1,344,006 | 886,695 |
Current Liabilities | |||
Accounts payables and accrued expense | 8,017,640 | 6,846,010 | 5,631,270 |
Due to related party | 0 | 0 | 36,822 |
Notes payable - related party, net | 3,528,573 | 3,592,948 | 1,886,000 |
Convertible notes payable - related party - net | 40,833 | 87,500 | 0 |
Notes payable, net | 1,518,352 | 589,812 | 300,000 |
Convertible note payable, net | 441,428 | 50,000 | 49,129 |
Derivative Liability | 705,278 | 0 | 0 |
Total Current Liabilities | 14,252,104 | 11,166,270 | 7,903,221 |
Notes payable - related party, net | 0 | 0 | 1,045,644 |
Notes payable, net of debt discount | 168,334 | 607,290 | 602,067 |
Convertible note payable, net of debt discount | 0 | 80,000 | 0 |
Total Liabilities | 14,420,438 | 11,853,560 | 9,550,932 |
Stockholders' deficiency | |||
Preferred Stock | 0 | 0 | 0 |
Common stock | 125,654 | 122,642 | 94,344 |
Additional paid-in capital | 57,404,191 | 57,071,022 | 44,352,962 |
Accumulated deficit | (70,988,628) | (67,703,218) | (53,111,543) |
Total Stockholders' Deficiency | (13,458,783) | (10,509,554) | (8,664,237) |
Total Liabilities and Stockholders' Deficiency | $ 961,655 | $ 1,344,006 | $ 886,695 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | |||
Preferred stock, par value | $ .001 | $ .001 | $ 0.001 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 | 200,000,000 |
Common stock, shares issued | 125,654,592 | 122,642,247 | 94,343,776 |
Common stock, shares outstanding | 125,654,592 | 122,642,247 | 94,343,776 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Operating Expenses | ||||||
Salaries and wages | $ 257,776 | $ 768,226 | $ 876,723 | $ 1,322,053 | $ 2,044,882 | $ 1,237,438 |
Professional fees | 185,220 | 416,484 | 1,056,188 | 920,257 | 1,669,202 | 1,505,586 |
General and administrative | 91,302 | 98,519 | 510,361 | 351,474 | 2,169,577 | 442,394 |
Warrant Expense | 0 | 0 | 0 | 6,769,562 | 6,769,562 | 0 |
Impairment of Assets | 0 | 0 | 0 | 0 | 48,998 | 244,284 |
Total Operating Expenses | 534,298 | 1,283,229 | 2,443,272 | 9,363,346 | 12,702,221 | 3,429,702 |
Loss from Operations | (534,298) | (1,283,229) | (2,443,272) | (9,363,346) | (12,702,221) | (3,429,702) |
Other Expenses | ||||||
Interest Expense, net | (190,417) | (239,384) | (526,342) | (477,484) | (659,709) | (2,678,415) |
Amortization of debt discount | (254,191) | 0 | (343,731) | (44,960) | 0 | 0 |
Loss on settlement of debt | 0 | (728,328) | 0 | (728,328) | (1,105,203) | 0 |
Change in fair value of derivative liability | (72,065) | 0 | (72,065) | 0 | (124,542) | 0 |
Income from legal settlement | 50,000 | 0 | 100,000 | 0 | 0 | 0 |
Total Other Expense | (466,673) | (967,712) | (842,138) | (1,250,772) | (1,889,454) | (2,678,415) |
Loss Before Income Taxes | (1,000,971) | (2,250,941) | (3,285,410) | (10,614,118) | (14,591,675) | (6,108,117) |
Provision for Income Taxes | 0 | 0 | 0 | 0 | 0 | 0 |
Net Loss | $ (1,000,971) | $ (2,250,941) | $ (3,285,410) | $ (10,614,118) | $ (14,591,675) | $ (6,108,117) |
Net Loss per Common Share Basic and Diluted | $ (0.01) | $ (0.02) | $ (0.03) | $ (0.10) | $ (0.13) | $ (0.07) |
Weighted Average Number of Common Shares Outstanding | 124,361,407 | 114,366,529 | 123,370,391 | 109,857,231 | 111,735,383 | 83,236,245 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (Deficit) - USD ($) | Preferred Stock | Common Stock | Additional Paid-In Capital | Retained Earnings / Accumulated Deficit | Total |
Balance, shares at Dec. 31, 2015 | 0 | 82,623,066 | |||
Balance, value at Dec. 31, 2015 | $ 0 | $ 82,623 | $ 38,722,035 | $ (47,003,426) | $ (8,198,768) |
Stock issued for $0.50 warrants, shares | 1,380,000 | ||||
Stock issued for $0.50 warrants, value | $ 1,380 | 688,620 | 690,000 | ||
Stock issued for $0.75 warrants, shares | 455,666 | ||||
Stock issued for $0.75 warrants, value | $ 456 | 341,294 | 341,750 | ||
Stock issued for $0.25 warrants, shares | 8,000,000 | ||||
Stock issued for $0.25 warrants, value | $ 8,000 | 1,992,000 | 2,000,000 | ||
Stock issued for services and commitment fee, shares | 1,197,753 | ||||
Stock issued for services and commitment fee, value | $ 1,198 | 1,016,892 | 1,018,090 | ||
Stock issued for accrued interest, shares | 687,291 | ||||
Stock issued for accrued interest, value | $ 687 | 583,511 | 584,198 | ||
Stock repurchased from related parties, value | 0 | ||||
Stock issued for employee bonuses, value | 0 | ||||
FV of warrant modifications | 0 | ||||
Debt discount on the JPF VF note | 1,008,610 | 1,008,610 | |||
Reclassification of derivative liability | 13,370 | 13,370 | |||
Net loss | (6,108,117) | (6,108,117) | |||
Balance, shares at Dec. 31, 2016 | 0 | 94,343,776 | |||
Balance, value at Dec. 31, 2016 | $ 0 | $ 94,344 | 44,352,962 | (53,111,543) | (8,664,237) |
Warrants and Options Exercised at $0.00: 1/1/17 to 5/8/17 (prior to merger), shares | 14,792,500 | ||||
Warrants and Options Exercised at $0.00: 1/1/17 to 5/8/17 (prior to merger), value | $ 14,793 | (14,793) | 0 | ||
D Warrants Exercised at $0.75: 1/1/17 to 5/8/17 (prior to merger), shares | 998,079 | ||||
D Warrants Exercised at $0.75: 1/1/17 to 5/8/17 (prior to merger), value | $ 998 | 747,537 | 748,535 | ||
Stock issued for services and commitment fee, shares | 3,887,802 | ||||
Stock issued for services and commitment fee, value | $ 3,888 | 2,898,876 | 2,902,764 | ||
Stock issued for cash, net of offering costs, shares | 11,250 | ||||
Stock issued for cash, net of offering costs, value | $ 11 | 44,989 | 45,000 | ||
Stock issued for conversion of note payable and accrued interest, shares | 7,386,872 | ||||
Stock issued for conversion of note payable and accrued interest, value | $ 7,387 | 2,348,008 | 2,355,395 | ||
Stock repurchased from related parties, shares | (148,588) | ||||
Stock repurchased from related parties, value | $ (149) | (111,291) | (111,440) | ||
Stock issued for conversion of accounts payable, shares | 425,000 | ||||
Stock issued for conversion of accounts payable, value | $ 425 | 702,700 | 703,125 | ||
Stock issued for employee bonuses, shares | 409,066 | ||||
Stock issued for employee bonuses, value | $ 409 | 919,990 | 920,399 | ||
Stock issued for TetriDyn Solutions, Inc., shares | 536,490 | ||||
Stock issued for TetriDyn Solutions, Inc., value | $ 536 | (1,628,562) | (1,628,026) | ||
FV of warrant modifications | 6,769,562 | 6,769,562 | |||
Beneficial conversion feature on notes payable | 41,044 | 41,044 | |||
Reclassification of derivative liability | 13,370 | 13,370 | |||
Net loss | (14,591,675) | (14,591,675) | |||
Balance, shares at Dec. 31, 2017 | 0 | 122,642,247 | |||
Balance, value at Dec. 31, 2017 | $ 0 | $ 122,642 | 57,071,022 | (67,703,218) | (10,509,554) |
Stock issued for warrants, shares | 39,000 | ||||
Stock issued for warrants, value | $ 39 | 9,481 | $ 9,520 | ||
Stock issued for services and commitment fee, shares | 673,345 | 673,345 | |||
Stock issued for services and commitment fee, value | $ 673 | 138,313 | $ 138,986 | ||
Stock issued for cash, net of offering costs, shares | 1,900,000 | ||||
Stock issued for cash, net of offering costs, value | $ 1,900 | 119,240 | 121,140 | ||
Stock issued for conversion of note payable and accrued interest, shares | 400,000 | ||||
Stock issued for conversion of note payable and accrued interest, value | $ 400 | 17,790 | 18,190 | ||
Stock repurchased from related parties, value | 0 | ||||
Stock issued for employee bonuses, value | 0 | ||||
Beneficial conversion feature on notes payable | 34,975 | 34,975 | |||
Reclassification of derivative liability | 13,370 | 13,370 | |||
Net loss | (3,285,410) | (3,285,410) | |||
Balance, shares at Sep. 30, 2018 | 0 | 125,654,592 | |||
Balance, value at Sep. 30, 2018 | $ 0 | $ 125,654 | $ 57,404,191 | $ (70,988,628) | $ (13,458,783) |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash Flows From Operating Activities: | ||||
Net loss | $ (3,285,410) | $ (10,614,118) | $ (14,591,675) | $ (6,108,117) |
Adjustments to reconcile net loss to net cash used in operating activities | ||||
Depreciation | 510 | 844 | 1,014 | 4,207 |
Change in fair value derivative liability | 72,065 | 0 | 124,542 | 0 |
Impairment of assets under construction | 0 | 0 | 48,998 | 244,284 |
Stock issued for services | 138,986 | 380,683 | 2,902,764 | 1,018,090 |
Stock issued for bonuses | 0 | 0 | 920,399 | 0 |
Loss on settlement of debt | 0 | 728,328 | 1,105,203 | 412,374 |
Warrant Expense | 0 | 6,769,562 | 6,769,562 | 0 |
Amortization of debt discount | 343,731 | 44,960 | 44,960 | 1,644,957 |
Changes in assets and liabilities: | ||||
Other current assets | 0 | 0 | 0 | 24,542 |
Prepaid expenses | 5,000 | 28,808 | 5,549 | (21,326) |
Accounts payable and accrued expenses | 1,171,630 | 1,574,149 | 1,199,515 | 723,110 |
Net Cash Used In Operating Activities | (1,553,488) | (1,086,784) | (1,469,169) | (2,057,879) |
Cash Flow From Investing Activities: | ||||
Cash paid to TetriDyn Solutions, Inc. | 0 | 4,512 | 4,512 | 0 |
Assets under construction | (30,000) | (72,853) | (95,352) | (119,722) |
Cash paid to TetriDyn Solutions, Inc. | 0 | (49,773) | (49,773) | 0 |
Net Cash Used In Investing Activities | (30,000) | (118,114) | (140,613) | (119,722) |
Cash Flows From Financing Activities: | ||||
Repayment of notes payable - related party | (64,376) | (25,000) | (64,432) | (5,000) |
Repayment of government loans | 0 | 0 | (4,539) | 0 |
Repayment of notes payable | (3,880) | 0 | 0 | 0 |
Proceeds from note payable | 499,156 | 0 | 490,000 | 999,025 |
Proceeds from convertible note payable | 615,087 | 80,000 | 80,000 | 0 |
Proceeds from notes payable - related party | 0 | 200,000 | 844,178 | 0 |
Proceeds from due to related party | 0 | 281,746 | 0 | 36,822 |
Proceeds from issuance of common stock | 121,140 | 45,000 | 45,000 | 1,031,750 |
Proceeds from exercise of warrants | 9,520 | 748,535 | 748,535 | 0 |
Stock repurchased from related parties | 0 | (111,440) | (111,440) | 0 |
Repayment of capital lease | 0 | 0 | 0 | (2,530) |
Net Cash Provided by Financing Activities | 1,176,647 | 1,218,841 | 2,027,302 | 2,060,067 |
Net (decrease) increase in cash and cash equivalents | (406,841) | 13,943 | 417,520 | (117,534) |
Cash and cash equivalents at beginning of year | 425,015 | 7,495 | 7,495 | 125,029 |
Cash and Cash Equivalents at End of Period | 18,174 | 21,438 | 425,015 | 7,495 |
Supplemental disclosure of cash flow information | ||||
Cash paid for interest expense | 32,432 | 18,012 | 17,162 | 45,849 |
Cash paid for income taxes | 0 | 0 | 0 | 0 |
Supplemental disclosure of non-cash investing and financing activities: | ||||
Debt discount on note payable | 34,975 | 0 | 41,044 | 0 |
Convertible note payable - related party converted to common stock | 0 | 81,342 | 80,275 | 0 |
Note Payable and accrued interest converted into common stock | 0 | 653,230 | 878,292 | 0 |
Note Payable and accrued interest - related party converted into common stock | 0 | 826,231 | 668,500 | 0 |
Convertible note payable converted to common stock | 18,190 | 0 | 0 | 0 |
Reclassification of derivative liability | 13,370 | 0 | 13,370 | 13,370 |
Accrued interest on related-party note converted to common stock | 0 | 0 | 0 | 171,823 |
Exercise of warrants in lieu of repayment of related-party note payable | 0 | 0 | 0 | 2,000,000 |
Debt discount on related-party note payable and extension of warrants | 0 | 0 | 0 | 1,008,610 |
Accounts payable converted into common stock | $ 0 | $ 0 | $ 326,250 | $ 0 |
Source of Business and Basis of
Source of Business and Basis of Presentation | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Source of Business and Basis of Presentation | Ocean Thermal Energy Corporation is currently in the businesses of: ● OTEC and SWAC ● EcoVillages We expect to use our technology in the development of our EcoVillages, which should add significant value to our existing line of business. On May 25, 2017, we received approval from the Financial Industry Regulatory Authority (“FINRA”) to change the trading symbol for our common stock to “CPWR,” pronounced “sea power” to reflect our core technology, from “TDYS.” Our common stock began formally trading under the symbol “CPWR” on June 21, 2017. On May 9, 2017, TetriDyn Solutions, Inc. (“TDYS”) acquired Ocean Thermal Energy Corporation (“OTE”) in a merger (the “Merger”), in which outstanding securities of OTE were converted into securities of TDYS, which changed its name to Ocean Thermal Energy Corporation. For accounting purposes, this transaction was accounted for as a reverse merger and has been treated as a recapitalization of TDYS with OTE as the accounting acquirer. The historical financial statements of the accounting acquirer became the financial statements of the company. We did not recognize goodwill or any intangible assets in connection with the transaction. The 110,273,767 shares issued to the shareholders of the accounting acquirer in conjunction with the share exchange transaction have been presented as outstanding for all periods. The historical financial statements include the operations of the accounting acquirer for all periods presented and the accounting acquiree for the period from May 9, 2017, through December 31, 2017. Our accounting year end is December 31, which was the year-end of the accounting acquirer. The condensed consolidated financial statements include the accounts of the company and our wholly owned subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation. In the opinion of management, our financial statements reflect all adjustments that are of a normal recurring nature necessary for presentation of financial statements for interim periods in accordance with U.S. generally accepted accounting principles (GAAP) and with the instructions to Form 10-Q in Article 10 of SEC Regulation S-X. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of our financial statements, and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. We condensed or omitted certain information and footnote disclosures normally included in our annual audited financial statements, which we prepared in accordance with GAAP. The operating results for the three and nine months ended September 30, 2018, are not necessarily indicative of the results to be expected for the year. Our interim financial statements should be read in conjunction with our annual report on Form 10-K for the year ended December 31, 2017, including the financial statements and notes. |
Organization and Summary of Sig
Organization and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Organization and Summary of Significant Accounting Policies | ( A). Source of Business and Basis of Presentation Ocean Thermal Energy Corporation (“Ocean Thermal”, the “Company”, “we”, and “us”) is currently in the business of designing Ocean Thermal Energy Conversion (“OTEC”) power plants and Seawater Air Conditioning (“SWAC”) plants for large commercial properties, utilities and municipalities. These technologies provide practical solutions to mankind’s three oldest and most fundamental needs: clean drinking water, plentiful food, and sustainable, affordable energy without the use of fossil fuels. OTEC is a clean technology that continuously extracts energy from the temperature difference between warm surface ocean water and cold deep seawater. In addition to producing electricity, some of the seawater running through an OTEC plant can be efficiently desalinated using the power generated by the OTEC technology, producing thousands of cubic meters of fresh water every day for the communities served by its plants for use in agriculture and human consumption. This cold deep nutrient-rich water can also be used to cool buildings (SWAC) and for fish farming/ aquaculture. In short, it’s a technology with many benefits, and its versatility makes OTEC unique. The Company previously operated under the corporate name of TetriDyn Solutions, Inc. (“TetriDyn”). On March 10, 2017, TetriDyn entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Ocean Thermal Energy Corporation, a Delaware corporation (“OTE”). On May 9, 2017, TetriDyn consummated the acquisition of all outstanding equity interests of OTE pursuant to the terms of the Merger Agreement, with a newly-created Delaware corporation that is wholly-owned by TetriDyn (“TetriDyn Merger Sub”), merging with and into OTE (the “Merger”) and OTE continuing as the surviving corporation and a wholly-owned subsidiary of TetriDyn. Effective upon the consummation of the Merger (the “Closing”), the OTE Stock issued and outstanding or existing immediately prior to the Closing of the Merger was converted at the Closing into the right to receive newly issued shares of TetriDyn common stock. As a result of the Merger, TetriDyn succeeded to the business and operations of OTE. In connection with the consummation of the Merger and upon the consent of the holders of a majority of the outstanding common shares, TetriDyn filed with the Nevada Secretary of State an amendment to its articles of incorporation changing its name to “Ocean Thermal Energy Corporation”. On April 13, 2017, the Company filed a Schedule 14C Information Statement with the Securities and Exchange Commission (the “Commission”) to notify stockholders that the following actions were approved without a meeting of the stockholders: ● An amendment to our Articles of Incorporation, as amended, to effect a change in the Company’s name from TetriDyn Solutions, Inc. to Ocean Thermal Energy Corporation; ● An amendment to our Articles of Incorporation, as amended, to effect and authorize 5,000,000 shares of preferred stock and 200,000,000 shares of common stock; and ● An amendment to our Articles of Incorporation, as amended, to effect a forward stock split of the issued and outstanding shares of common stock of the Company on an approximately 2.1676-for-1 basis. On May 25, 2017, the Company received approval from the Financial Industry Regulatory Authority (“FINRA”) to change the trading symbol for the Company’s common stock to “CPWR” from “TDYS.” The Company’s common stock began formally trading under the symbol “CPWR” on June 21, 2017. For accounting purposes, this transaction is being accounted for as a reverse merger and has been treated as a recapitalization of Tetridyn Solutions, Inc. with Ocean Thermal Energy Corporation as the accounting acquirer. The historical financial statements of the accounting acquirer became the financial statements of the Company. The Company did not recognize goodwill or any intangible assets in connection with the transaction. The 110,273,767 shares issued to the shareholder of OTE in conjunction with the share exchange transaction has been presented as outstanding for all periods. The historical financial statements include the operations of the accounting acquirer for all periods presented and the accounting acquiree for the period from May 9, 2017 through December 31, 2017. The Company’s accounting year end is December 31, which was the year end of Ocean Thermal Energy Corporation. The consolidated financial statements include the accounts of the Company and our wholly-owned subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation. In the opinion of management, our financial statements reflect all adjustments that are of a normal recurring nature necessary for presentation of financial statements for interim periods in accordance with U.S. generally accepted accounting principles (GAAP) and with the instructions to Form 10-K in Article 10 of SEC Regulation S-X. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of our financial statements, and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. (B) Principal Subsidiary Undertakings Our consolidated financial statements for the years ended December 31, 2017 and 2016, include the following subsidiaries: Name Place of Incorporation / Establishment Principal Activities Date Formed Ocean Thermal Energy Bahamas Ltd. Bahamas Intermediate holding company of OTE BM Ltd. and OTE Bahamas O&M Ltd. 07/04/2011 OTE BM Ltd. Bahamas OTEC/SDC development in the Bahamas 09/07/2011 OCEES International Inc. Hawaii, USA Research and development for the Pacific Rim 01/21/1998 Ocean Thermal Energy UK Limited England and Wales Dormant 07/22/2010 OTEC Innovation Group Inc. Delaware, USA Dormant 06/02/2011 OTE-BM Energy Partners LLC Delaware, USA Dormant 06/02/2011 OTE Bahamas O&M Ltd. Bahamas Dormant 09/07/2011 Ocean Thermal Energy Holdings Ltd. Bahamas Dormant 03/05/2012 Ocean Thermal Energy Cayman Ltd. Caymans Dormant 03/26/2013 OTE HC Ltd. Caymans Dormant 03/26/2013 Ocean Thermal Energy USVI, Inc. Virgin Islands Dormant 07/12/2016 We have an effective interest of 100% in each of our subsidiaries. (C) Use of Estimates In preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reported period. Actual results could differ from those estimates. Significant estimates include the assumptions used in valuing equity investments and issuances, valuation of deferred tax assets, and depreciable lives of property and equipment. (D) Cash and Cash Equivalents We consider all highly liquid temporary cash investments with an original maturity of three months or less to be cash equivalents. At December 31, 2017 and 2016, we had no cash equivalents. (E) Income Taxes We account for income taxes under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 740-10-25, “ Income Taxes—Overall—Recognition Our 2013 to 2017 tax years remain open to audit by the Internal Revenue Service and state tax authorities. (F) Business Segments We conduct operations in various foreign jurisdictions that use our technology. Our segments are based on the location of their operations. The U.S. territories segment consists of operations in the U.S. Virgin Islands and Guam; the Bahamas segment consists of operations specific to the Bahamas; and the other segment currently consists of operations in the Cayman Islands. Direct revenues and costs, depreciation, depletion, and amortization costs, general and administrative costs (“G&A”), and other income directly associated with their respective segments are detailed within the following discussion. Identifiable net property and equipment are reported by business segment for management reporting and reportable business segment disclosure purposes. Current assets, other assets, current liabilities, and long-term debt are not allocated to business segments for management reporting or business segment disclosure purposes. Reportable business segment information for the years ended December 31, 2017, and December 31, 2016, is as follows: December 31, 2017 Headquarters US Territories Bahamas Other Total Revenue $ - $ - $ - $ - $ - Assets 451,367 892,639 - 1,344,006 Net loss (14,591,675 ) - - - (14,591,675 ) Property and equipment 1,352 - - - 1,352 Assets under construction 892,639 - 892,639 Depreciation 1,014 - - - 1,014 Additions to assets under construction - 95,352 - - 95,352 December 31, 2016 Headquarters US Territories Bahamas Other Total Revenue $ - $ - $ - $ - $ - Assets 40,410 797,287 - 48,998 886,695 Net Loss (5,837,007 ) - (271,110 ) - (6,108,117 ) Property and equipment 2,366 - - - 2,366 Capitalized construction in process 797,287 - 48,998 846,285 Depreciation 4,207 - - - 4,207 Additions to assets under construction - 119,722 - - 119,722 For the year ended December 31, 2017, the U.S. territories are comprised of U.S. Virgin Islands project (approx. $728,000) and Guam project (approx. $165,000). Other territories are comprised of Cayman Islands project); however during the year ended December 31, 2017, $48,998 of Cayman Islands assets under construction was considered to be impaired due to the uncertainty of the project and were written off. The additions to assets under construction in 2017 were primarily salaries and consulting services. For the year ended December 31, 2016, the U.S. territories are comprised of U.S. Virgin Islands project (approx. $632,000) and Guam project (approx. $165,000). Other territories are comprised of Cayman Islands project (approx. $49,000). (G) Property and Equipment Furniture, equipment, and software are recorded at cost and include major expenditures that increase productivity or substantially increase useful lives. Maintenance, repairs, and minor replacements are charged to expenses when incurred. When furniture, vehicles, or equipment is sold or otherwise disposed of, the asset and related accumulated depreciation are removed from this account, and any gain or loss is included in the statement of operations. Assets under construction represent costs incurred by us for our renewable energy systems currently in process. Generally, all costs incurred during the development stage of our projects are capitalized and tracked on an individual project basis and are included in construction in progress until the project has been placed into service. If a project is abandoned, the associated costs that have been capitalized are charged to expense in the year of abandonment. Expenditures for repairs and maintenance are charged to expense as incurred. Interest costs incurred during the construction period of defined major projects from debt that is specifically incurred for those projects are capitalized. Direct labor costs incurred for specific major projects expected to have long-term benefits are capitalized. Direct labor costs subject to capitalization include employee salaries, as well as related payroll taxes and benefits. With respect to the allocation of salaries to projects, salaries are allocated based on the percentage of hours that our key managers, engineers, and scientists work on each project. These individuals track their time worked at each project. Major projects are generally defined as projects expected to exceed $500,000. Direct labor includes all of the time incurred by employees directly involved with construction and development activities. Time spent in general and indirect management and in evaluating the feasibility of potential projects is expensed when incurred. We capitalize costs incurred once the project has met the project feasibility stage. Costs include environmental engineering, permits, government approval, and site engineering costs. We currently have four projects in the development stage and one project in the construction phase. We capitalize direct interest costs associated with the projects. As of December 31, 2017 and 2016, we have no interest costs capitalized. The cost of furniture, vehicles, equipment, and software is depreciated over the estimated useful lives of the related assets. Depreciation is computed using the straight-line method for financial reporting purposes. The estimated useful lives and accumulated depreciation for land, buildings, furniture, vehicles, equipment, and software are as follows: Years Computer Equipment 3 Software 5 (H) Fair Value ASC Topic 820, “ Fair Value Measurements and Disclosures ● Level 1–Pricing inputs are quoted prices available in active markets for identical assets or liabilities as of the reporting date. ● Level 2–Pricing inputs are quoted for similar assets or inputs that are observable, either directly or indirectly, for substantially the full term through corroboration with observable market data. Level 2 includes assets or liabilities valued at quoted prices adjusted for legal or contractual restrictions specific to these investments. ● Level 3–Pricing inputs are unobservable for the assets or liabilities; that is, the inputs reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability. Management believes the carrying amounts of the short-term financial instruments, including cash and cash equivalents, accounts receivable, prepaid expense and other assets, accounts payable, accrued liabilities, notes payable, deferred compensation, and other liabilities reflected in the accompanying balance sheets approximate fair value at December 31, 2017 and 2016, due to the relatively short-term nature of these instruments. (I) Concentrations Cash and cash equivalents and restricted cash are deposited with major financial institutions, and at times, such balances with any one financial institution may be in excess of FDIC-insured limits. As of December 31, 2017 and 2016, $179,855 and $0 were deposited in excess of FDIC-insured limits. Management believes the risk in these situations to be minimal. (J) Loss per Share The basic loss per share is calculated by dividing our net loss available to common shareholders by the weighted average number of common shares during the period. The diluted loss per share is calculated by dividing our net loss by the diluted weighted average number of shares outstanding during the period. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. We have 134,000 and 16,012,210 shares issuable upon the exercise of warrants and options and 7,056,721 and 205,667 shares issuable upon the conversion of the green energy bonds and convertible notes that were not included in the computation of dilutive loss per share because their inclusion is antidilutive for the years ended December 31, 2017 and 2016, respectively. (K) Revenue Recognition We will recognize revenue on arrangements in accordance with FASB ASC Topic 605, “ Revenue Recognition (L) Recent Accounting Pronouncements In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. We have reviewed all recently issued, but not yet adopted, accounting standards in order to determine their effects, if any, on our consolidated results of operations, financial position, and cash flows. Based on that review, we believe that none of these pronouncements will have a significant effect on current or future earnings or operations. |
Going Concern
Going Concern | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Going Concern | The accompanying unaudited condensed consolidated financial statements have been prepared on the assumption that we will continue as a going concern. As reflected in the accompanying condensed consolidated financial statements, we had a net loss of $3,285,410 and used $1,553,488 of cash in operating activities for the nine months ended September 30, 2018. We had a working capital deficiency of $14,213,930 and a stockholders’ deficiency of $13,458,783 as of September 30, 2018. These factors raise substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern is dependent on our ability to increase sales and obtain external funding for our projects under development. The financial statements do not include any adjustments that may result from the outcome of this uncertainty. | We had a net loss of $14,591,675 and used cash in operations of $1,469,169 for the year ended December 31, 2017, and had an accumulated deficit of $67,703,218 and a working capital deficiency of $10,716,255 as of December 31, 2017. This raises substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern is dependent on our ability to raise additional capital through the sale of debt or equity securities or stockholder loans and to implement our business plan. The financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern. Management believes that we will be able to continue as a going concern through additional affiliate loans, implementation of our strategic operating plan, continuing a multi-focused plan to obtain external capital, and offering sales incentives to accelerate ocean thermal energy conversion (“OTEC”) project development. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2017 | |
Property and Equipment | |
Property and Equipment | Property and equipment consist of the following at December 31, 2017: Property & Equipment as of December 31, 2017 Estimated Accumulated Net Book Useful Life Cost Depreciation Value Life Computer & Office Equipment $ 13,751 12,399 $ 1,352 3 Years Software (Video System) 19,061 19,061 - 5 Years Construction in Process 892,639 892,639 $ 925,451 31,460 $ 893,991 Property and equipment consist of the following at December 31, 2016: Property & Equipment as of December 31, 2016 Estimated Accumulated Net Book Useful Life Cost Depreciation Value Life Computer & Office Equipment $ 13,751 11,385 $ 2,366 3 Years Software (Video System) 19,061 19,061 - 5 Years Construction in Process 846,285 846,285 $ 879,097 30,446 $ 848,651 Depreciation expense for the years ended December 31, 2017 and 2016 was $1,014 and $4,207, respectively. During the year ended December 31, 2016, $244,284 of Clifton Pier assets under construction were considered to be impaired due to the uncertainty of the project. During the year ended December 31, 2017, $48,998 of Cayman Islands assets under construction was considered to be impaired due to the uncertainty of the project and were written off. |
Income Taxes
Income Taxes | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Income Taxes | The Tax Cuts and Jobs Act (the “TCJA”) significantly reforms the Internal Revenue Code of 1986, as amended (the “Code”). The TCJA, among other things, reduced the corporate tax rate from a top marginal rate of 35% to a flat rate of 21%, effective as of January 1, 2018; limited the tax deduction for interest expense; limited the deduction for net operating losses to 80% of current year taxable income and eliminated net operating loss carrybacks, in each case, for losses arising in taxable years beginning after December 31, 2017 (though any such tax losses may be carried forward indefinitely); modified or repealed many business deductions and credits, including reducing the business tax credit for certain clinical testing expenses incurred in the testing of certain drugs for rare diseases or conditions generally referred to as “orphan drugs”; and repealed the federal alternative minimum tax. The staff of the U.S. Securities and Exchange Commission (“SEC”) issued Staff Accounting Bulletin No. 118 to address the application of GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the TCJA. In connection with the initial analysis of the impact of the TCJA, we remeasured our deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally 21%. The remeasurement of our deferred tax assets and liabilities was offset by a change in the valuation allowance. We are still in the process of analyzing the impact of the TCJA to us. Where we have been able to make reasonable estimates of the effects of the TCJA, we have recorded provisional amounts. However, our analysis is not yet complete. The ultimate impact of the TCJA to our consolidated financial statements may differ from the provisional amounts due to, among other things, additional analysis, changes in interpretations and assumptions we have made, additional regulatory guidance that may be issued, and actions we may take as a result of the TCJA. No income tax expense was recognized for the nine months ended September 30, 2018 and 2017, due to the net losses incurred in these periods. We are subject to audit by the Internal Revenue Service, various states, and foreign jurisdictions for the prior three years. There has not been a change in our unrecognized tax positions since December 31, 2017, and we do not believe there will be any material changes in our unrecognized tax positions over the next 12 months. Our policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. We do not have any accrued interest or penalties associated with any unrecognized tax benefits, and no interest expense related to unrecognized tax benefits was recognized during the nine months ended September 30, 2018. Our ability to use our net operating loss carryforwards may be substantially limited due to ownership change limitations that may have occurred or that could occur in the future, as required by Section 382 of the Code, as well as similar state provisions. These ownership changes may limit the amount of net operating loss that can be utilized annually to offset future taxable income and tax, respectively. In general, an “ownership change” as defined by Section 382 of the Code results from a transaction or series of transactions over a three-year period resulting in an ownership change of more than 50.0% of the outstanding stock of a company by certain stockholders or public groups. We have not completed a study to assess whether an ownership change has occurred or whether there have been multiple ownership changes since we became a “loss corporation” under the definition of Section 382. If we have experienced an ownership change, utilization of the net operating loss carryforwards would be subject to an annual limitation under Section 382 of the Code, which is determined by first multiplying the value of our stock at the time of the ownership change by the applicable long-term, tax-exempt rate, and then could be subject to additional adjustments, as required. Any limitation may result in expiration of a portion of the net operating loss carryforwards before utilization. Further, until a study is completed and any limitation known, no positions related to limitations are being considered as an uncertain tax position or disclosed as an unrecognized tax benefit. Any carryforwards that expire prior to utilization as a result of such limitations will be removed from deferred tax assets with a corresponding reduction of the valuation allowance. Due to the existence of the valuation allowance, it is not expected that any possible limitation will have an impact on our results of operations or financial position. | On December 22, 2017, President Trump signed into law the Tax Cuts and Jobs Act (the “TCJA”) that significantly reforms the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”). The TCJA, among other things, contains significant changes to corporate taxation, including reduction of the corporate tax rate from a top marginal rate of 35% to a flat rate of 21%, effective as of January 1, 2018; limitation of the tax deduction for interest expense; limitation of the deduction for net operating losses to 80% of current year taxable income and elimination of net operating loss carrybacks, in each case, for losses arising in taxable years beginning after December 31, 2017 (though any such tax losses may be carried forward indefinitely); modifying or repealing many business deductions and credits, including reducing the business tax credit for certain clinical testing expenses incurred in the testing of certain drugs for rare diseases or conditions generally referred to as “orphan drugs”; and repeal of the federal Alternative Minimum Tax (“AMT”). The staff of the Securities and Exchange Commission issued Staff Accounting Bulletin No. 118 to address the application of GAAP in situations when a registrant does not have the necessary information available, prepared or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the TCJA. In connection with the initial analysis of the impact of the TCJA, the Company remeasured its deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally 21%. The remeasurement of the Company's deferred tax assets and liabilities was offset by a change in the valuation allowance. The Company is still in the process of analyzing the impact to the Company of the TCJA. Where the Company has been able to make reasonable estimates of the effects related to which its analysis is not yet complete, the Company has recorded provisional amounts. The ultimate impact to the Company’s consolidated financial statements of the TCJA may differ from the provisional amounts due to, among other things, additional analysis, changes in interpretations and assumptions the Company has made, additional regulatory guidance that may be issued, and actions the Company may take as a result of the TCJA. The accounting is expected to be complete when the Company’s 2017 U.S. corporate income tax return is filed in 2018. A reconciliation of income tax expense and the amount computed by applying the statutory federal income tax rate of 34% to the income before provision for income taxes is as follows: For the Years Ended December 31 2017 2016 Statutory rate applied to loss before income taxes $ (5,903,355 ) $ (2,479,492 ) Increase (decrease) in income taxes results from: Nondeductible permanent differences 4,446,014 1,251,476 Change in tax rate estimates 3,566,781 - Change in valuation allowance (2,109,440 ) 1,228,016 Income tax expense (benefit) $ - $ - Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred tax assets and liabilities are as follows: For the Years Ended December 31 Deferred tax assets 2017 2016 Depreciation and impairment $ 2,100,958 $ 2,931,956 Operating loss carryforwards 6,705,907 7,984,349 Gross deferred tax assets 8,806,865 10,916,305 Valuation allowance (8,806,865 ) (10,916,305 ) Net deferred income tax asset $ - $ - We have net operating loss carryforwards for income tax purposes of approximately $23,200,000. This loss is allowed to be offset against future income. The tax benefits relating to all timing differences have been fully reserved for in the valuation allowance account due to the substantial losses incurred through December 31, 2017. The change in the valuation allowance for the years ended December 31, 2017 and 2016 was an increase (decrease) of ($2,109,440) and $1,228,016, respectively. Internal Revenue Code Section 382 imposes limitations on the availability of a company’s net operating |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures ● Level 1–Pricing inputs are quoted prices available in active markets for identical assets or liabilities as of the reporting date. ● Level 2–Pricing inputs are quoted for similar assets or inputs that are observable, either directly or indirectly, for substantially the full term through corroboration with observable market data. Level 2 includes assets or liabilities valued at quoted prices adjusted for legal or contractual restrictions specific to these investments. ● Level 3–Pricing inputs are unobservable for the assets or liabilities; that is, the inputs reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability. Management believes the carrying amounts of the short-term financial instruments, including cash and cash equivalents, prepaid expense and other assets, accounts payable, accrued liabilities, notes payable, deferred compensation, and other liabilities reflected in the accompanying balance sheets approximate fair value at September 30, 2018, and December 31, 2017, due to the relatively short-term nature of these instruments. We account for derivative liability at fair value, on a recurring basis under level 3 at September 30, 2018 (See Note 9). |
Net Loss Per Common Share
Net Loss Per Common Share | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Net Loss Per Common Share | The basic loss per share is calculated by dividing our net loss available to common shareholders by the weighted average number of common shares during the period. The diluted loss per share is calculated by dividing our net loss by the diluted weighted average number of shares outstanding during the period. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. We have 333,573 and 0 shares issuable upon the exercise of warrants and options and 20,798,618 and 7,576,778 shares issuable upon the conversion of convertible notes that were not included in the computation of dilutive loss per share because their inclusion is antidilutive for the interim periods ended September 30, 2018 and 2017, respectively. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2018 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recent Accounting Pronouncements | In June 2018, the FASB issued Accounting Standard Update (“ASU”) 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting Revenue from Contracts from Customers We have reviewed all recently issued, but not yet adopted, accounting standards in order to determine their effects, if any, on our consolidated results of operations, financial position, and cash flows. Based on that review, we believe that none of these pronouncements will have a significant effect on current or future earnings or operations. |
Business Segments
Business Segments | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Business Segments | We conduct operations in various foreign jurisdictions where we are developing projects to use our technology. Our segments are based on the location of these projects. The U.S. territories segment consists of projects in the U.S. Virgin Islands and Guam and the other segment currently consists of projects in the Cayman Islands. Direct revenues and costs, depreciation, depletion, and amortization costs, general and administrative costs, and other income directly associated with their respective segments are detailed within the following discussion. Identifiable net property and equipment are reported by business segment for management reporting and reportable business segment disclosure purposes. Current assets, other assets, current liabilities, and long-term debt are not allocated to business segments for management reporting or business segment disclosure purposes. Reportable business segment information is as follows: September 30, 2018 Headquarters US Territories Other Total Revenue $ - $ - $ - $ - Assets $ 39,016 $ 757,738 $ 164,901 $ 961,655 Net Loss $ (3,285,410 ) $ - $ - $ (3,285,410 ) Property and equipment $ 842 $ - $ - $ 842 Capitalized construction in process $ - $ 757,738 $ 164,901 $ 922,639 Depreciation $ 510 $ - $ - $ 510 Additions to capitalized construction in process $ - $ 30,000 $ - $ 30,000 September 30, 2017 Headquarters US Territories Other Total Revenue $ - $ - $ - $ - Assets $ 24,701 $ 870,140 $ 48,998 $ 943,839 Net loss $ (10,614,118 ) $ - $ - $ (10,614,118 ) Property and equipment $ 1,522 $ - $ - $ 1,522 Capitalized construction in process $ - $ 870,140 $ 48,998 $ 919,138 Depreciation $ 844 $ - $ - $ 844 Additions to capitalized construction in process $ - $ 72,853 $ - $ 72,853 For the period ended September 30, 2018, the U.S. territories are comprised of the U.S. Virgin Islands project (approx. $750,000) and the Guam project (approx. $165,000). Other territories are comprised of the Cayman Islands project; however during the year ended December 31, 2017, $48,998 of Cayman Islands assets under construction were considered to be impaired due to the uncertainty of the project and were written off. There were $30,000 additions and no write offs to assets under construction in the nine months of 2018. |
Convertible Notes and Notes Pay
Convertible Notes and Notes Payable | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Debt Disclosure [Abstract] | ||
Convertible notes and notes payable | On December 12, 2006, we borrowed funds from the Southeast Idaho Council of Governments (SICOG) (the “EDA-#180 loan”). The remaining balance on the loan at the date of the Merger was $14,974. The interest rate is 6.25%, and the maturity date was January 5, 2013. The loan principal was $8,392 with accrued interest of $0 as of September 30, 2018. This note is in default. On December 23, 2009, we borrowed funds from SICOG (the “EDA-#273 loan”). The remaining balance on the loan at the date of the Merger was $94,480. The interest rate is 7%, and the maturity date was December 23, 2014. The loan principal was $94,480 with accrued interest of $21,174 as of September 30, 2018. This note is in default. On December 23, 2009, we borrowed funds from SICOG (the “MICRO I-#274 loan”). The remaining balance on the loan at the date of the Merger was $23,619. The interest rate is 7%, and the maturity date was December 23, 2014. The loan principal was $23,619 with accrued interest of $4,601 as of September 30, 2018. This note is in default. On December 23, 2009, we borrowed funds from SICOG (the “MICRO II-#275 loan”). The remaining balance on the loan at the date of the Merger was $23,620. The interest rate is 7%, and the maturity date was December 23, 2014. The loan principal was $23,620 with accrued interest of $5,903 as of September 30, 2018. This note is in default. On December 1, 2007, we borrowed funds from the Eastern Idaho Development Corporation (the “EIDC loan”). The remaining balance on the loan at the date of the Merger was $85,821. The interest rate is 7%, and the maturity date was September 1, 2015. The loan principal was $85,821 with accrued interest of $37,879 as of September 30, 2018. This note is in default. On September 25, 2009, we borrowed funds from the Pocatello Development Authority. The remaining balance on the loan at the date of the Merger was $50,000. The interest rate is 5%, and the maturity date was October 25, 2011. The loan principal was $50,000 with accrued interest of $20,101 as of September 30, 2018. This note is in default. On March 12, 2015, we combined convertible notes issued in 2010, 2011, and 2012, payable to our officers and directors in the aggregate principal amount of $320,246, plus accrued but unpaid interest of $74,134, into a single, $394,380 consolidated convertible note (the “Consolidated Note”). The Consolidated Note was assigned to JPF Venture Group, Inc. (“JPF”), an investment entity that is majority-owned by Jeremy Feakins, our director, chief executive officer, and chief financial officer. The Consolidated Note was convertible to common stock at $0.025 per share, the approximate market price of our common stock as of the date of the issuance. On February 24, 2017, the Consolidated Note was amended to eliminate the conversion feature. The Consolidated Note bears interest at 6% per annum and is due and payable within 90 days after demand. As of September 30, 2018, the outstanding loan balance was $394,380 and the accrued but unpaid interest was $88,964 on the Consolidated Note. On November 23, 2015, we borrowed $50,000 from JPF pursuant to a promissory note. We received $37,500 before December 31, 2015, and $12,500 after the year-end. The terms of the note are as follows: (i) interest is payable at 6% per annum; (ii) the note is payable 90 days after demand; and (iii) payee is authorized to convert part or all of the note balance and accrued interest, if any, into shares of our common stock at the rate of one share each for $0.03 of principal amount of the note. This conversion share price was adjusted to $0.01384 for the reverse stock splits. As of September 30, 2018, the outstanding balance was $50,000, plus accrued interest of $8,323. We have recorded a debt discount of $50,000 for the fair value of derivative liability and amortized $23,333 of debt discount as of September 30, 2018 (see Note 9). On February 25, 2016, we borrowed $50,000 from JPF pursuant to a promissory note. The terms of the note are as follows: (i) interest is payable at 6% per annum; (ii) the note is payable 90 days after demand; and (iii) payee is authorized to convert part or all of the note balance and accrued interest, if any, into shares of our common stock at the rate of one share for each $0.03 of principal amount of the note. This conversion price is not required to adjust for the reverse stock split as per the note agreement. On February 24, 2017, the note was amended to eliminate the conversion feature. As of September 30, 2018, the outstanding balance was $50,000, plus accrued interest of $7,911. On May 20, 2016, we borrowed $50,000 from JPF pursuant to a promissory note. The terms of the note are as follows: (i) interest is payable at 6% per annum; (ii) the note is payable 90 days after demand; and (iii) the payee is authorized to convert part or all of the note balance and accrued interest, if any, into shares of our common stock at the rate of one share for each $0.03 of principal amount of the note. This conversion price is not required to adjust for the reverse stock split as per the note agreement. On February 24, 2017, the note was amended to eliminate the conversion feature. As of September 30, 2018, the outstanding balance was $50,000, plus accrued interest of $7,063. On October 20, 2016, we borrowed $12,500 from JPF pursuant to a promissory note. The terms of the note are as follows: (i) interest is payable at 6% per annum; (ii) the note is payable 90 days after demand; and (iii) the payee is authorized to convert part or all of the note balance and accrued interest, if any, into shares of our common stock at the rate of one share for each $0.03 of principal amount of the note. This conversion price is not required to adjust for the reverse stock split as per the note agreement. On February 24, 2017, the note was amended to eliminate the conversion feature. As of September 30, 2018, the outstanding balance was $12,500, plus accrued interest of $1,497. On October 20, 2016, we borrowed $12,500 from an independent director pursuant to a promissory note. The terms of the note are as follows: (i) interest is payable at 6% per annum; (ii) the note is payable 90 days after demand; and (iii) the payee is authorized to convert part or all of the note balance and accrued interest, if any, into shares of our common stock at the rate of one share for each $0.03 of principal amount of the note. This conversion share price was adjusted to $0.01384 for the reverse stock splits. As of September 30, 2018, the outstanding balance was $12,500, plus accrued interest of $1,563. We have recorded a debt discount of $12,500 for the fair value of derivative liability and amortized $5,833 of debt discount as of September 30, 2018 (see Note 9). On October 20, 2016, we borrowed $25,000 from a stockholder pursuant to a promissory note. The terms of the note are as follows: (i) interest is payable at 6% per annum; (ii) the note is payable 90 days after demand; and (iii) the payee is authorized to convert part or all of the note balance and accrued interest, if any, into shares of our common stock at the rate of one share for each $0.03 of principal amount of the note. This conversion share price was adjusted to $0.01384 for the reverse stock splits. As of September 5, 2017, the note holder converted the note principal of $25,000 into 1,806,298 shares common stock. As of September 30, 2018, there was an outstanding balance of accrued interest of $904. On December 21, 2016, we borrowed $25,000 from JPF pursuant to a promissory note. The terms of the note are as follows: (i) interest is payable at 6% per annum; (ii) the note is payable 90 days after demand; and (iii) the payee is authorized to convert part or all of the note balance and accrued interest, if any, into shares of our common stock at the rate of one share for each $0.03 of principal amount of the note. This conversion share price was adjusted to $0.01384 for the reverse stock splits. As of September 30, 2018, the outstanding balance was $25,000, plus accrued interest of $2,700. We have recorded a debt discount of $25,000 for the fair value of derivative liability and amortized $11,667 of debt discount as of September 30, 2018 (see Note 9). During 2012, we issued a note payable for $1,000,000 and three-year warrants to purchase 3,295,761 shares of common stock with an exercise price of $0.50 per share. The note had an interest rate of 10% per annum, was secured by a first lien in all of our assets, and was due on February 3, 2015. We determined the warrants had a fair value of $378,500 based on the Black-Scholes option-pricing model. The fair value was recorded as a discount on the note payable and was being amortized over the life of the note. We repriced the warrants during 2013 and took an additional charge to earnings of $1,269,380 related to the repricing. The warrants were exercised upon the repricing. On March 6, 2018, the note was amended to extend the due date to December 31, 2018. As of September 30, 2018, the outstanding balance was $1,000,000, plus accrued interest of $611,393. During 2013, we issued Series B units. Each unit is comprised of a note agreement, a $50,000 promissory note that matures on September 30, 2023, and bears interest at 10% per annum payable annually in arrears, a security agreement, and a warrant to purchase 10,000 shares of common stock at an exercise price to be determined pursuant to a specified formula and expires on September 30, 2023. During 2013, we issued $525,000 of 10% promissory notes and warrants to purchase 105,000 shares of common stock. We determined the warrants had a fair value of $60,068 based on the Black-Scholes option-pricing model. As part of our agreement with a proposed external financing source, the board repriced the warrants to $0.00, exercised the warrants, and issued shares of common stock. On August 15, 2017, loans of $316,666 and accrued interest of $120,898 were converted to 437,564 shares at $1.00 per share, which was ratified by a disinterested majority of the board of directors. The shares were recorded at fair value of $1,165,892, which resulted in a loss on settlement of debt of $728,328 on the conversion date. As of September 30, 2018, the loan balance was $158,334 and the accrued interest was $80,901. During 2013, we issued a note payable for $290,000 in connection with the reverse merger transaction. We have determined that no further payment of principal or interest on this note should be made because the note holder failed to perform his underlying obligations giving rise to this note. As such, we are confident that if the note holder were to seek legal redress, a court would decide in our favor by either voiding the note or awarding damages sufficient to offset the note value. As of September 30, 2018, the balance outstanding was $130,000, and the accrued interest as of that date was $48,200. On January 18, 2018, the holder of a $2,265,000 note issued in 2014 agreed to extend the due date for repayment to the earlier of December 31, 2018, or the date of the financial closings of our Baha Mar Project (or any other project of $25 million or more), whichever occurs first. On August 15, 2017, principal of $618,500 and accrued interest of $207,731 were converted to 826,231 shares at $1.00 per share, which was ratified by a disinterested majority of the board of directors. The conversion was recorded at historical cost due to the related-party nature of the transaction. For the nine months ended September 30, 2018, we repaid $35,000. As of September 30, 2018, the note balance was $1,102,500 and the accrued interest was $483,642. We have $300,000 in principal amount of outstanding notes, including $100,000 due to a related party, issued in 2014, in default since 2015, accruing interest at a default rate of 22%. We intend to repay the notes and accrued interest upon the Baha Mar SWAC project’s financial closing. Accrued interest totaled $230,179 as of September 30, 2018. The due date of April 17, 2017, on a $50,000 promissory note, has been extended to April 7, 2019. The note and accrued interest can be converted into our common stock at a conversion rate of $0.75 per share at any time prior to the repayment. This conversion price is not required to adjust for the reverse stock split as per the note agreement. Accrued interest totaled $17,639 as of September 30, 2018. We have recorded $149 of debt discount for the fair value derivative liability and fully amortized $149 of the debt discount as of September 30, 2018. On March 9, 2017, an entity owned and controlled by our chief executive officer agreed to provide up to $200,000 in working capital. The note bears interest of 10% and is due and payable within 90 days of demand. As of September 30, 2018, the balance outstanding was $177,000, plus accrued interest of $28,328. During the third quarter of 2017, we completed a $2,000,000 convertible promissory note private placement offering. The terms of the note are as follows: (i) interest is payable at 6% per annum; (ii) the note is payable two years after purchase; and (iii) all principal and interest on each note automatically converts on the conversion maturity date into shares of our common stock at a conversion price of $4.00 per share, as long as the closing share price of our common stock on the trading day immediately preceding the conversion maturity date is at least $4.00, as adjusted for stock splits, stock dividends, reclassification, and the like. If the price of our shares on such date is less than $4.00 per share, the note (principal and interest) will be repaid in full. As of September 30, 2018, the outstanding balance for all four notes was $80,000, plus accrued interest of $5,793. On November 6, 2017, we entered into an agreement and promissory note with JPF to loan up to $2,000,000 to us. The terms of the note are as follows: (i) interest is payable at 10% per annum; (ii) all unpaid principal and all accrued and unpaid interest is due and payable at the earliest of a resolution of the Memphis litigation, September 30, 2018, or when we are otherwise able to pay. For the nine months ended September 30, 2018, we repaid $18,500. As of September 30, 2018, the outstanding balance was $612,193 and the accrued interest was $64,926. On September 30, 2018, the note was amended to extend the maturity date to the earliest of a resolution of the Memphis litigation, December 31, 2018, or when we are otherwise able to pay. In December 2017, we entered into a note and warrant purchase agreement pursuant to which we issued a series of unsecured promissory notes to accredited investors, in the aggregate principal amount of $979,156 as of September 30, 2018. These notes accrue interest at a rate of 10% per annum payable on a quarterly basis and are not convertible into shares of our capital stock. The notes are payable within five business days after receipt of gross proceeds of at least $1,500,000 from L2 Capital, LLC, an unaffiliated Kansas limited liability company (“L2 Capital). We may prepay the notes in whole or in part, without penalty or premium, on or before the maturity date of July 30, 2019. In connection with the issuance of the notes, for each note purchased, the note holder will receive a warrant as follows: $10,000 note with a warrant to purchase 2,000 shares $20,000 note with a warrant to purchase 5,000 shares $25,000 note with a warrant to purchase 6,500 shares $30,000 note with a warrant to purchase 8,000 shares $40,000 note with a warrant to purchase 10,000 shares $50,000 note with a warrant to purchase 14,000 shares The exercise price per share of the warrants is equal to 85% of the closing price of our common stock on the day immediately preceding the exercise of the relevant warrant, subject to adjustment as provided in the warrant. The warrant includes a cashless net exercise provision whereby the holder can elect to receive shares equal to the value of the warrant minus the fair market value of shares being surrendered to pay the exercise price. As of September 30, 2018, and December 31, 2017, the balance outstanding was $979,156 and $490,000, respectively. As of September 30, 2018, and December 31, 2017, the accrued interest was $47,798 and $613, respectively. As of September 30, 2018, and December 31, 2017, we had issued warrants to purchase 262,000 and 134,000 shares of common stock, respectively. As of September 30, 2018, and December 31, 2017, we determined that the warrants had a fair value of $34,975 and $41,044, respectively, based on the Black-Scholes pricing model. The fair value was recorded as a discount on the notes payable and is being amortized over the life of the notes payable. As of September 30, 2018, we have amortized $41,153 of debt discount. As of September 30, 2018, warrants to purchase 39,000 shares have been exercised (see Note 9) and the debt discount related to the exercised warrants has been fully expensed. As of September 30, 2018, we have recorded a debt discount of $13,514 for the fair value of derivative liability and amortized $1,645 of debt discount. As of September 30, 2018, $21,367 of the principal payments of two notes is due and in default. On February 15, 2018, we entered into an agreement with L2 Capital for a loan of up to $565,555, together with interest at the rate of 8% per annum, which consists of up to $500,000 to us and a prorated original issuance discount of $55,555 and $10,000 for transactional expenses to L2 Capital. L2 Capital has the right at any time to convert all or any part of the note into fully paid and nonassessable shares of our common stock at the fixed conversion price, which is equal to $0.50 per share; however On May 22, 2018, we executed a convertible note with Collier Investments, LLC, an unaffiliated California company, in the amount of $281,250 with an interest rate of 12% per annum. The maturity date of the note is the earlier of: (i) seven months after the issuance date; or (ii) the date on which we consummate a capital-raising transaction for $6,000,000 or more primarily from the sale of equity in the company. The note, or any portion of it, can be convertible by the holder into shares of our common stock at any time after the issuance date. The conversion price is equal to the lesser of 80% multiplied by the price per share paid by the investors in a “qualified financing” (as defined in the note) or $0.20, subject to certain adjustments. At any time within a 90-day period following the issuance date, we have the option to prepay 145% of the outstanding balance. There was an original issue discount and transaction fees of $36,250, yielding net proceeds of $245,000 to us. In addition, we paid a finder’s fee of $20,914. The original issue discount and transaction and finder fees are being amortized over the life of the notes payable as debt issuance cost. For the nine months ended September 30, 2018, we amortized $34,459 of debt issuance cost. The accrued interest as of September 30, 2018, was $12,094. We have recorded a debt discount of $69,941 for the fair value of derivative liability and amortized $23,500 of debt discount as of September 30, 2018. On September 19, 2018, we executed a note payable for $10,000 with an unrelated party that bears interest at 6% per annum, which is due quarterly beginning as of September 30, 2018. The maturity date for the note is three years after date of issuance. In addition, the lender received warrants to purchase 2,000 shares of common stock upon signing the promissory note. The warrant can be exercised at a price per share equal to a 15% discount from the price of common stock on the last trading day before such purchase. As of September 30, 2018, we have recorded $125 of debt discount for the fair value derivative liability and fully amortized $125 of the debt discount. As of September 30, 2018 the balance outstanding was $10,000 and the accrued interest was $18. The following convertible notes and notes payable were outstanding at September 30, 2018: Related Party Non Related Party Issuance Date Maturity Date Interest Rate In Default Original Principal Principal at September 30, 2018 Debt Discount at September 30, 2018 Carrying Amount at September 30, 2018 Current Long-Term Current Long-Term 12/12/2006 1/5/2013 6.25 % Yes 58,670 8,392 — 8,392 — — 8,392 — 12/1/2007 9/1/2015 7.00 % Yes 125,000 85,821 — 85,821 — — 85,821 — 9/25/2009 10/25/2011 5.00 % Yes 50,000 50,000 — 50,000 — — 50,000 — 12/23/2009 12/23/2014 7.00 % Yes 100,000 94,480 — 94,480 — — 94,480 — 12/23/2009 12/23/2014 7.00 % Yes 25,000 23,619 — 23,619 — — 23,619 — 12/23/2009 12/23/2014 7.00 % Yes 25,000 23,620 — 23,620 — — 23,620 — 02/03/12 12/31/18 10.00 % No 1,000,000 1,000,000 — 1,000,000 1,000,000 — — — 08/15/13 10/31/23 10.00 % No 525,000 158,334 — 158,334 — — — 158,334 12/31/13 12/31/15 8.00 % Yes 290,000 130,000 — 130,000 130,000 — — — 04/01/14 12/31/18 10.00 % No 2,265,000 1,102,500 — 1,102,500 1,102,500 — — — 12/22/14 03/31/15 12.00 % Yes 200,000 200,000 — 200,000 — — 200,000 — 12/26/14 12/26/15 12.00 % Yes 100,000 100,000 — 100,000 — — 100,000 — 3/12/2015 (1 ) 6.00 % No 394,380 394,380 — 394,380 394,380 — — — 4/7/15 04/17/18 10.00 % No 50,000 50,000 — 50,000 — — 50,000 — 11/23/2015 (1 ) 6.00 % No 50,000 50,000 26,667 23,333 23,333 — — — 2/25/2016 (1 ) 6.00 % No 50,000 50,000 — 50,000 50,000 — — — 5/20/2016 (1 ) 6.00 % No 50,000 50,000 — 50,000 50,000 — — — 10/20/2016 (1 ) 6.00 % No 50,000 12,500 — 12,500 12,500 — — — 10/20/2016 (1 ) 6.00 % No 12,500 12,500 6,667 5,833 5,833 — — — 12/21/2016 (1 ) 6.00 % No 25,000 25,000 13,333 11,667 11,667 — — — 3/9/2017 (1 ) 10.00 % No 200,000 177,000 — 177,000 177,000 — — — 7/13/2017 7/13/2019 6.00 % No 25,000 25,000 — 25,000 — 25,000 7/18/2017 7/18/2019 6.00 % No 25,000 25,000 — 25,000 — 25,000 7/26/2017 7/26/2019 6.00 % No 15,000 15,000 — 15,000 — 15,000 7/27/2017 7/27/2019 6.00 % No 15,000 15,000 — 15,000 — 15,000 12/20/2017 (2 ) 10.00 % Yes** 979,156 979,156 46,735 932,421 — 932,421 11/6/2017 (3 ) 10.00 % No 646,568 612,193 — 612,193 612,193 — — — 2/19/2018 (4 ) 8.00 % Yes** 464,032 464,032 364,709 99,323 — 99,323 — 5/24/2018 12/24/2018 12.00 % No 281,250 281,250 69,146 212,104 — 212,104 — 9/19/2018 9/28/2021 6.00 % No 10,000 10,000 — 10,000 10,000 Totals $ 6,224,777 $ 527,257 $ 5,697,520 $ 3,569,406 $ — $ 1,959,780 $ 168,334 (1) Maturity date is 90 days after demand. (2) Note payables were issued on various dates between December 2017 and May 2018. Principal is due on the earlier of 18 months from the anniversary date or the completion of L2 financing with a gross proceeds of a minimum of $1.5 million. (3) Principal and accrued interest will be due and payable at the earliest of A). resolution of Memphis litigation; B). December 31, 2018 , or C). when OTE is able to pay. (4) Note payables were issued on various dates between February and May 2018 and are due in 6 months from issuance date. ** Partially in default as of September 30, 2018 The following convertible notes and notes payable were outstanding at December 31, 2017: Related Party Non Related Party Issuance Date Maturity Date Interest Rate In Default Original Principal Principal at December 31, 2017 Debt Discount at December 31, 2017 Carrying Amount at December 31, 2017 Current Long-Term Current Long-Term 12/12/2006 1/5/2013 6.25 % Yes 58,670 12,272 — 12,272 — — 12,272 — 12/1/2007 9/1/2015 7.00 % Yes 125,000 85,821 — 85,821 — — 85,821 — 9/25/2009 10/25/2011 5.00 % Yes 50,000 50,000 — 50,000 — — 50,000 — 12/23/2009 12/23/2014 7.00 % Yes 100,000 94,480 — 94,480 — — 94,480 — 12/23/2009 12/23/2014 7.00 % Yes 25,000 23,619 — 23,619 — — 23,619 — 12/23/2009 12/23/2014 7.00 % Yes 25,000 23,620 — 23,620 — — 23,620 — 02/03/12 12/31/18 10.00 % No 1,000,000 1,000,000 — 1,000,000 1,000,000 — — — 08/15/13 10/31/23 10.00 % No 525,000 158,334 — 158,334 — — 158,334 12/31/13 12/31/15 8.00 % Yes 290,000 130,000 — 130,000 130,000 — — — 04/01/14 12/31/18 10.00 % No 2,265,000 1,137,500 — 1,137,500 1,137,500 — — — 12/22/14 03/31/15 12.00 % Yes 200,000 200,000 — 200,000 — — 200,000 — 12/26/14 12/26/15 12.00 % Yes 100,000 100,000 — 100,000 — — 100,000 — 3/12/2015 (1 ) 6.00 % No 394,380 394,380 — 394,380 394,380 — — — 4/7/15 04/17/18 10.00 % No 50,000 50,000 — 50,000 — — 50,000 11/23/2015 (1 ) 6.00 % No 50,000 50,000 — 50,000 50,000 — — — 2/25/2016 (1 ) 6.00 % No 50,000 50,000 — 50,000 50,000 — — — 5/20/2016 (1 ) 6.00 % No 50,000 50,000 — 50,000 50,000 — — — 10/20/2016 (1 ) 6.00 % No 50,000 12,500 — 12,500 12,500 — — — 10/20/2016 (1 ) 6.00 % No 12,500 12,500 — 12,500 12,500 — — — 12/21/2016 (1 ) 6.00 % No 25,000 25,000 — 25,000 25,000 — — — 3/9/2017 (1 ) 10.00 % No 200,000 177,000 — 177,000 177,000 — — — 7/13/2017 7/13/2019 6.00 % No 25,000 25,000 — 25,000 — — — 25,000 7/18/2017 7/18/2019 6.00 % No 25,000 25,000 — 25,000 — — — 25,000 7/26/2017 7/26/2019 6.00 % No 15,000 15,000 — 15,000 — — — 15,000 7/27/2017 7/27/2019 6.00 % No 15,000 15,000 — 15,000 — — — 15,000 12/20/2017 (2 ) 10.00 % No 490,000 490,000 41,044 448,956 — — — 448,956 11/6/2017 (3 ) 10.00 % No 646,568 641,568 — 641,568 641,568 — — — Totals $ 5,048,594 $ 41,044 $ 5,007,550 $ 3,680,448 $ — $ 639,812 $ 687,290 (1) Maturity date is 90 days after demand. (2) Note payables were issued on various dates between December 2017 and May 2018. Principal is due on the earlier of 18 months from the anniversary date or the completion of L2 financing with a gross proceeds of a minimum of $1.5 million. (3) Principal and accrued interest will be due and payable at the earliest of A). resolution of Memphis litigation; B). December 31, 2018 , or C). when OTE is able to pay. | On December 12, 2006, TetriDyn Solutions, Inc. (TDYS) borrowed funds from the Southeast Idaho Council of Governments (SICOG). This is referred as the “EDA -#180” loan. At the time of the merger between TDYS and Ocean Thermal Energy Corporation (OTE) on May 8, 2017, OTE assumed the liability for this loan. The remaining balance on the loan at the date of merger was $14,974. The interest rate is 6.25% and the maturity date was January 5, 2013. The loan principal was $12,272 with no accrued interest as of December 31, 2017. This note is in default. On December 1, 2007, TetriDyn Solutions, Inc. (TDYS) borrowed funds from the Eastern Idaho Development Corporation; this is referred as the “EIDC ” loan. At the time of the merger between TDYS and Ocean Thermal Energy Corporation (OTE) on May 8, 2017, OTE assumed the liability for this loan. The remaining balance on the loan at the date of merger was $85,821. The interest rate is 7% and the maturity date was September 1, 2015. The loan principal was $85,821 with accrued interest of $33,323 as of December 31, 2017. This note is in default. On September 25, 2009, TetriDyn Solutions, Inc. (TDYS) borrowed funds from the Pocatello Development Authority. At the time of the merger between TDYS and Ocean Thermal Energy Corporation (OTE) on May 8, 2017, OTE assumed the liability for this loan. The remaining balance on the loan at the date of merger was $50,000. The interest rate is 5% and the maturity date was October 25, 2011. The loan principal was $50,000 with accrued interest of $18,206 as of December 31, 2017. This note is in default. On December 23, 2009, TetriDyn Solutions, Inc. (TDYS) borrowed funds from the Southeast Idaho Council of Governments (SICOG). This is referred as the “EDA - #273” loan. At the time of the merger between TDYS and Ocean Thermal Energy Corporation (OTE) on May 8, 2017, OTE assumed the liability for this loan. The remaining balance on the loan at the date of merger was $94,480. The interest rate is 7% and the maturity date was December 23, 2014. The loan principal was $94,480 with accrued interest of $21,150 as of December 31, 2017. This note is in default. On December 23, 2009, TetriDyn Solutions, Inc. (TDYS) borrowed funds from the Southeast Idaho Council of Governments (SICOG). This is referred as the “MICRO I - #274” loan. At the time of the merger between TDYS and Ocean Thermal Energy Corporation (OTE) on May 8, 2017, OTE assumed the liability for this loan. The remaining balance on the loan at the date of merger was $23,619. The interest rate is 7% and the maturity date was December 23, 2014. The loan principal was $23,619 with accrued interest of $4,596 as of December 31, 2017. This note is in default. On December 23, 2009, TetriDyn Solutions, Inc. (TDYS) borrowed funds from the Southeast Idaho Council of Governments (SICOG). This is referred as the “MICRO II - #275” loan. At the time of the merger between TDYS and Ocean Thermal Energy Corporation (OTE) on May 8, 2017, OTE assumed the liability for this loan. The remaining balance on the loan at the date of merger was $23,620. The interest rate is 7% and the maturity date was December 23, 2014. The loan principal was $23,620 with accrued interest of $5,897 as of December 31, 2017. This note is in default. During 2012, we issued a note payable for $1,000,000 and three-year warrants to purchase 3,295,761 shares of common stock with an exercise price of $0.50 per share. The note had an interest rate of 10% per annum, was secured by a first lien in all of our assets and was due on February 3, 2015. We determined the warrants had a fair value of $378,500 based on the Black-Scholes option-pricing model. The fair value was recorded as a discount on the note payable and was being amortized over the life of the note. We repriced the warrants during 2013 and took an additional charge to earnings of $1,269,380 related to the repricing. The warrants were exercised upon the repricing. On March 6, 2018, the note holder agreed to amend the note to extend the due date of the note to December 31, 2018. As of December 31, 2017, the outstanding balance was $1,000,000, plus accrued interest of $535,559. During 2013, we issued Series B units. Each unit is comprised of a note agreement, a $50,000 promissory note that matures on September 30, 2023, and bears interest at 10% per annum payable annually in arrears, a security agreement, and a warrant to purchase 10,000 shares of common stock at an exercise price to be determined pursuant to a specified formula. During 2013, we issued $525,000 of 10% promissory notes and warrants to purchase 105,000 shares of common stock. The warrants have an expiration date of September 30, 2023. We determined the warrants had a fair value of $60,068 based on the Black-Scholes option-pricing model. As part of our agreement with the Memphis Investors, the Board repriced the warrants to $0.00 and exercised the warrants and issued shares of common stock. On December 31, 2016, the accrued interest was $168,934. During 2015, one of the original note holders transferred its ownership of the note in the amount of $50,000 to Jeremy P. Feakins & Associates LLC through the JPF Venture Fund 1, LP. On August 15, 2017, loans in the amount of $316,666 and accrued interest of $120,898 were converted to 437,564 shares at $1.00 per share, which was ratified by the Board of Directors. The shares were recorded at fair value of $1,165,892. The Company recorded a loss on settlement of debt of $728,328 on conversion date. On November 8, 2017, Jeremy P. Feakins & Associates LLC, converted loans in the amount of $50,000 and accrued interest of $16,263 at $1.00 per share into 66,263 shares of common stock. As of December 31, 2017, the loan balance was $158,334 and the accrued interest was $68,894. During 2013, we paid cash of $10,000 and issued a note payable for $290,000 in connection with the reverse merger transaction. We repurchased and retired 7,546,464 shares of common stock simultaneously with the closing of the merger with Broad Band Network Associates. The note is unsecured and due the earlier of December 31, 2015, or upon our receiving $50,000 of proceeds from the exercise of the Class A warrants, $50,000 from the exercise of the Class B warrants, $60,000 from the exercise of the Class C warrants, $60,000 from the exercise of Class D warrants, and $70,000 from the exercise of the Class E warrants. During 2014, we paid $100,000 and during 2015, we paid $60,000, leaving a balance of $130,000. Accrued interest totaled $40,313 at December 31, 2017 and $29,769 at December 31, 2016. We have determined that no further payment of principal or interest on this note should be made because the note holder failed to perform his underlying obligations giving rise to this note. As such, we are confident that if the note holder were to seek legal redress, a court would decide in our favor by either voiding the note or awarding damages sufficient to offset the note value. During 2014, we issued a note payable for $2,265,000 and warrants to purchase 12,912,500 shares of common stock, with an exercise price equal to the greater of a 50% discount of the stock price when our shares are listed on a public exchange or $0.425 per share, to an entity owned by our chief executive officer, together our principal stockholders. The warrants expire one year after our shares are listed on a recognized public exchange. The unsecured note has an interest rate of 10% per annum and the balance was due on January 31, 2015. We determined the warrants had a fair value of $2,265,000 based on the Black-Scholes option-pricing model. The fair value was recorded as a discount on the note payable and is being amortized over the life of the note. As part of our agreement with the Memphis Investors, the Board repriced the warrants to $0.00 and exercised the warrants and issued shares of common stock. As of December 31, 2015, principal of $152,500 has been repaid and principal of $351,500 has been converted into 468,667 shares of common stock, leaving a note balance of $1,761,000. During 2016, a principal payment of $5,000 was made leaving a note balance of $1,756,000 at December 31, 2016. On December 31, 2016, the accrued interest was $453,093. On August 15, 2017, loans in the amount of $618,500 and accrued interest of $207,731 were converted to 826,231 shares at $1.00 per share, which was ratified by the Board of Directors. The conversion was recorded at historical cost due to the related party nature of the transaction. As of December 31, 2017, the loan balance was $1,137,500 and the accrued interest was $399,692. On January 18, 2018 the note holder agreed to extend the due date for the repayment of the loan and interest to the earlier of December 31, 2018 or the date for the Ocean Thermal Energy Corporation’s financial closings of its Baha Mar Project (or any other project of $25 million or more), or partial payments will begin as the Company draws upon investment provided by L2 Capital. whichever occurs first. (see note 9) During 2014, we issued Secured Convertible Promissory Notes (Bonds) totaling $166,800 through September 30, 2014. The bonds carry an interest rate ranging from 7.86% to 9.86% and mature on April 30, 2019 and December 31, 2019. In addition, the bondholders are entitled to convert each $1,200 bond into 1,000 shares of common stock at a price of $1.20 per share. Should our shares trade for 10 consecutive days at $1.80 per share or higher. On August 15, 2017, bonds in the amount of $166,800 and accrued interest of $48,866 were converted to 179,722 shares of common stock at $1.20 per share. During 2014, we issued a note payable of $100,000 to a related party and $200,000 to a third party, for a total of $300,000, and warrants to purchase 300,000 shares of common stock with an exercise price of $1.00 per share. As part of our agreement with the Memphis Investors, the Board repriced the warrants to $0.00 and exercised the warrants and issued shares of common stock. These unsecured notes have an interest rate of 12% per annum. The $100,000 note with a related party is due the earlier of December 26, 2015; the completion by us of an equity financing resulting in our receipt of gross proceeds of at least $2,000,000; or the financial close of the Baha Mar project and release of funds by the bank. The balance on the $200,000 note is due the earlier of March 31, 2015; the completion by us of an equity financing resulting in our receipt of gross proceeds of at least $2,000,000; or the financial close of the Baha Mar project and release of project financing funds by the bank. As of December 31, 2016, the notes are in default. Due to the delay in opening of the Baha Mar Resort, our Baha Mar SWAC Project’s financial closing was delayed causing us to default on the notes. We have accrued the interest at a default rate of 22%. We intend to repay the notes and accrued interest upon the project’s financial closing. As of December 31, 2017, the outstanding loan balance was $300,000. Accrued interest totaled $180,129 as of December 31, 2017 and $113,119 as of December 31, 2016. On April 7, 2015, we issued an unsecured convertible promissory note in the principal amount of $50,000 to an unrelated party. The note bears interest of 10% and is due on April 17, 2017. On April 6, 2017, the note holder agreed to extend the maturity date to April 7, 2018. The note and accrued interest can be converted into our common stock at a conversion rate of $0.75 per share at any time prior to the repayment. We recorded a debt discount of $6,667 for the fair value of the beneficial conversion feature. During the year ended December 31, 2017, we amortized debt discount of $871. As of December 31, 2017, the outstanding loan balance was $50,000. Accrued interest totaled $13,847 as of December 31, 2017 and $12,668 as of December 31, 2016. On March 12, 2015, the Company exchanged convertible notes issued in 2010, 2011, and 2012, payable to its officers and directors in the aggregate principal amount of $320,246, plus accrued but unpaid interest of $74,134, into a single, $394,380 consolidated convertible note (the “Consolidated Note”). The Consolidated Note was assigned to JPF Venture Group, Inc. (“JPF”), an investment entity that is majority-owned by Jeremy Feakins, the Company’s director, chief executive officer, and chief financial officer. The Consolidated Note was convertible to common stock at $0.025 per share, the approximate market price of the Company’s common stock as of the date of the issuance. On February 24, 2017 the Company completed an amendment with JPF to eliminate the conversion feature of the Consolidated Note. The Consolidated Note bears interest at 6% per annum and is due and payable within 90 days after demand. As of December 31, 2017, the outstanding loan balance was $394,380 and the accrued but unpaid interest on the Consolidated Note was $70,568. On March 12, 2015, the Company assigned the liabilities for unpaid salaries of two of its former officers in the amount of $213,436 to JPF. The assignment was evidenced by a consolidated promissory note dated December 31, 2014. The note does not bear any interest. On December 31, 2016, the $213,436 was reclassified to accrued expenses. On June 23, 2015, the Company borrowed $50,000 from JPF pursuant to a promissory note. The Company received $25,000 on July 31, 2015, and the remaining $25,000 on August 18, 2015. The terms of the note are as follows: (i) interest is payable at 6% per annum; (ii) the note is payable 90 days after demand; and (iii) payee is authorized to convert part or all of the note balance and accrued interest, if any, into shares of the Company’s common stock at the rate of one share for each $0.01384. On September 8, 2017, JPF elected to convert $50,000 of notes payable and accrued interest of $6,342 into 3,612,596 and 458,198 shares of common stock, respectively. On November 23, 2015, the Company borrowed $50,000 from JPF pursuant to a promissory note. The Company received $37,500 before December 31, 2015, and the remaining $12,500 was received after the year-end. The terms of the note are as follows: (i) interest is payable at 6% per annum; (ii) the note is payable 90 days after demand; and (iii) payee is authorized to convert part or all of the note balance and accrued interest, if any, into shares of the Company’s common stock at the rate of one share each for $0.01384. As of December 31, 2017, the outstanding balance was $50,000, plus accrued interest of $6,049. On February 25, 2016, the Company borrowed $50,000 from JPF pursuant to a promissory note. The terms of the note are as follows: (i) interest is payable at 6% per annum; (ii) the note is payable 90 days after demand; and (iii) payee is authorized to convert part or all of the note balance and accrued interest, if any, into shares of our common stock at the rate of one share for each $0.01384. On February 24, 2017 the Company completed an amendment with JPF to eliminate the conversion feature of the note. As of December 31, 2017, the outstanding balance was $50,000, plus accrued interest of $5,636 On May 20, 2016, the Company borrowed $50,000 from JPF pursuant to a promissory note. The terms of the note are as follows: (i) interest is payable at 6% per annum; (ii) the note is payable 90 days after demand; and (iii) the payee is authorized to convert part or all of the note balance and accrued interest, if any, into shares of our common stock at the rate of one share for each $0.01384. On February 24, 2017 the Company completed an amendment with JPF to eliminate the conversion feature of the note. As of December 31, 2017, the outstanding balance was $50,000, plus accrued interest of $4,788. On October 20, 2016, the Company borrowed $12,500 from JPF pursuant to a promissory note. The terms of the note are as follows: (i) interest is payable at 6% per annum; (ii) the note is payable 90 days after demand; and (iii) the payee is authorized to convert part or all of the note balance and accrued interest, if any, into shares of our common stock at the rate of one share for each $0.01384. On February 24, 2017 the Company completed an amendment with JPF to eliminate the conversion feature of the note. As of December 31, 2017, the outstanding balance was $12,500, plus accrued interest of $928. On October 20, 2016, the Company borrowed $12,500 from an independent director pursuant to a promissory note. The terms of the note are as follows: (i) interest is payable at 6% per annum; (ii) the note is payable 90 days after demand; and (iii) the payee is authorized to convert part or all of the note balance and accrued interest, if any, into shares of our common stock at the rate of one share for each $0.01384 of As of December 31, 2017, the outstanding balance was $12,500, plus accrued interest of $994. On October 20, 2016, the Company borrowed $25,000 from a stockholder pursuant to a promissory note. The terms of the note are as follows: (i) interest is payable at 6% per annum; (ii) the note is payable 90 days after demand; and (iii) the payee is authorized to convert part or all of the note balance and accrued interest, if any, into shares of our common stock at the rate of one share for each $0.01384. As of June 5, 2017 the note holder converted the note principal of $25,000 into 1,806,298 shares common stock. As of December 31, 2017, there was no outstanding balance and accrued interest was $904. . On December 21, 2016, the Company borrowed $25,000 from JPF pursuant to a promissory note. The terms of the note are as follows: (i) interest is payable at 6% per annum; (ii) the note is payable 90 days after demand; and (iii) the payee is authorized to convert part or all of the note balance and accrued interest, if any, into shares of our common stock at the rate of one share for each $0.01384. As of December 31, 2017, the outstanding balance was $25,000, plus accrued interest of $1,563. On March 9, 2017, an entity owned by our chief executive officer is an officer and director, agreed to provide up to $200,000 in working capital. The note bears interest of 10% and is due and payable with 90 days of demand. As of December 31, 2017, the balance of the loan outstanding was $177,000 and the accrued interest was $14,905. During the third quarter of 2017, the Company launched a $2,000,000 convertible promissory note private placement offering. The terms of the note are as follows: (i) interest is payable at 6% per annum; (ii) the note is payable two years after purchase; (iii) and all principal and interest on each Note shall automatically convert on the Conversion Maturity Date into shares of the Company’s common stock at a conversion price of $4.00 per share, as long as the closing share price of the Company’s common stock on the trading day immediately preceding the Conversion Maturity Date is at least $4.00, as adjusted for stock splits, stock dividends, reclassification, and the like. If the price of the Company’s shares on such date is less than $4.00 per share, the Note (principal and interest) will be repaid in full. As of December 31, 2017, the outstanding balance for all four loans was $80,000, plus accrued interest of $2,186. On November 6, 2017, the Company entered into an agreement with a promissory note with JPF Venture Group, Inc. (“JPF”), an investment entity that is majority-owned by Jeremy Feakins, the Company’s director, chief executive officer, and chief financial officer, to loan the Company up to $2,000,000. The terms of the note are as follows: (i) interest is payable at 10% per annum; (ii) all unpaid principal and all accrued and unpaid interest shall be due and payable at the earliest of (a) resolution of the Memphis litigation; (b) June 30, 2018; or (c) when the company is otherwise able to pay. As of December 31, 2017, the outstanding balance was $641,568 and the accrued interest was $14,372. In December 2017, the Company entered into a Note and Warrant Purchase Agreement pursuant to which we issued a series of unsecured promissory notes (the “Notes”) to accredited investors, in the aggregate principal amount of $490,000 as of December 31, 2017. The Notes accrue interest at a rate of 10% per annum payable on a quarterly basis and are not convertible into shares of capital stock of the Company. The Notes are payable within five business days after receipt of funds from L2 Capital under the Equity Purchase Agreement equal to 20% of the total funds received by the Company from L2 payable on a pro rata basis to all holders of the Notes. The Company may prepay the Notes in whole or in part without penalty or premium on or before the maturity date of July 30, 2019. In connection with the issuance of the Notes, for each Note purchased the Noteholder will receive a warrant exercised as follows: $10,000 note with a warrant to purchase 2,000 shares $20,000 note with a warrant to purchase 5,000 shares $25,000 note with a warrant to purchase 6,500 shares $30,000 note with a warrant to purchase 8,000 shares $40,000 note with a warrant to purchase 10,000 shares $50,000 note with a warrant to purchase 14,000 shares The exercise price per share of the Warrants is equal to Eighty-Five Percent (85%) of the closing price of the Company’s common stock on the day immediately preceding the exercise of the relevant Warrant, subject to adjustment as provided in the Warrant. The Warrant includes a cashless net exercise provision whereby the holder can elect to receive shares equal to the value of the Warrant minus the fair market value of shares being surrendered to pay the exercise. As of December 31, 2017, the balance outstanding was $490,000, the accrued interest was $613, and we had issued Warrants to purchase 134,000 shares of common stock. We determined that the warrants had a fair value of $41,044 based on the Black-Scholes option-pricing model. The fair value was recorded as a discount on the notes payable and is being amortized over the life of the notes payable. The following convertible note and notes payable were outstanding at December 31, 2017: Related Party Non Related Party Date of Issuance Maturity Date Interest Rate In Default Original Principal Principal at December 31, 2017 Discount at December 31 2017 Carrying Amount at December 31, 2017 Current Long-Term Current Long-Term 12/12/2006 1/5/2013 6.25 % Yes 58,670 12,272 - 12,272 - - 12,272 12/1/2007 9/1/2015 7.00 % Yes 125,000 85,821 - 85,821 - - 85,821 - 9/25/2009 10/25/2011 5.00 % Yes 50,000 50,000 - 50,000 - - 50,000 - 12/23/2009 12/23/2014 7.00 % Yes 100,000 94,480 - 94,480 - - 94,480 - 12/23/2009 12/23/2014 7.00 % Yes 25,000 23,619 - 23,619 - - 23,619 - 12/23/2009 12/23/2014 7.00 % Yes 25,000 23,620 - 23,620 - - 23,620 - 02/03/12 12/31/18 10.00 % No 1,000,000 1,000,000 - 1,000,000 1,000,000 - - - 08/15/13 10/31/23 10.00 % No 525,000 158,334 - 158,334 - - 158,334 12/31/13 12/31/15 8.00 % Yes 290,000 130,000 - 130,000 130,000 - - - 04/01/14 12/31/18 10.00 % No 2,265,000 1,137,500 - 1,137,500 1,137,500 - - - 12/22/14 03/31/15 12.00 % Yes 200,000 200,000 - 200,000 - - 200,000 - 12/26/14 12/26/15 12.00 % Yes 100,000 100,000 - 100,000 - - 100,000 - 3/12/2015 90 days after demand 6.00 % No 394,380 394,380 - 394,380 394,380 - - - 4/7/15 04/17/18 10.00 % No 50,000 50,000 - 50,000 - - 50,000 11/23/2015 90 days after demand 6.00 % No 50,000 50,000 - 50,000 50,000 - - - 2/25/2016 90 days after demand 6.00 % No 50,000 50,000 - 50,000 50,000 - - - 5/20/2016 90 days after demand 6.00 % No 50,000 50,000 - 50,000 50,000 - - - 10/20/2016 90 days after demand 6.00 % No 50,000 12,500 - 12,500 12,500 - - - 10/20/2016 90 days after demand 6.00 % No 12,500 12,500 - 12,500 12,500 - - - 12/21/2016 90 days after demand 6.00 % No 25,000 25,000 - 25,000 25,000 - - - 3/9/2017 90 days after demand 10.00 % No 200,000 177,000 - 177,000 177,000 - - - 7/13/2017 7/13/2019 6.00 % No 25,000 25,000 - 25,000 - - - 25,000 7/18/2017 7/18/2019 6.00 % No 25,000 25,000 - 25,000 - - - 25,000 7/26/2017 7/26/2019 6.00 % No 15,000 15,000 - 15,000 - - - 15,000 7/27/2017 7/27/2019 6.00 % No 15,000 15,000 - 15,000 - - - 15,000 12/20/2017 7/30/2019 10.00 % No 50,000 50,000 4,340 45,660 - - - 45,660 12/20/2017 7/30/2019 10.00 % No 10,000 10,000 620 9,380 - - - 9,380 12/21/2017 7/30/2019 10.00 % No 50,000 50,000 4,284 45,716 - - - 45,716 12/27/2017 7/30/2019 10.00 % No 10,000 10,000 600 9,400 - - - 9,400 12/27/2017 7/30/2019 10.00 % No 10,000 10,000 600 9,400 - - - 9,400 12/28/2017 7/30/2019 10.00 % No 250,000 250,000 21,000 229,000 - - - 229,000 12/29/2017 7/30/2019 10.00 % No 100,000 100,000 8,960 91,040 - - - 91,040 12/29/2017 7/30/2019 10.00 % No 10,000 10,000 640 9,360 - - - 9,360 11/6/2017 * See note below 10.00 % No 646,568 641,568 - 641,568 641,568 - - - Totals $ 5,048,594 $ 41,044 $ 5,007,550 $ 3,680,448 $ - $ 639,812 $ 687,290 * Note - Principle and accrued interest will be due and payable at the earliest of A). resolution of Memphis litigation (see note 9); B). June 30, 2018, or C). when OTE is able to pay The following convertible notes and notes payable were outstanding at December 31, 2016: Related Party Non Related Party Date of Issuance Maturity Date Interest Rate Original Principal Principal at December 31, 2016 Discount at December 31, 2016 Carrying Amount at December 31, 2016 Current Long-Term Current Long-Term 02/03/12 02/03/18 10.00 % 1,000,000 1,000,000 - 1,000,000 - 1,000,000 - - 08/15/13 10/31/23 10.00 % 525,000 525,000 44,089 480,911 - 45,644 - 435,267 12/31/13 12/31/15 8.00 % 290,000 130,000 - 130,000 130,000 - - - 04/01/14 12/31/17 10.00 % 2,265,000 1,756,000 - 1,756,000 1,756,000 - - - 04/16/14 04/30/19 9.86 % 6,000 6,000 - 6,000 - - - 6,000 05/09/14 04/30/19 9.86 % 50,400 50,400 - 50,400 - - - 50,400 05/28/14 04/30/19 9.86 % 25,200 25,200 - 25,200 - - - 25,200 07/21/14 12/31/19 9.86 % 78,000 78,000 - 78,000 - - - 78,000 08/18/14 12/31/19 7.86 % 7,200 7,200 - 7,200 - - - 7,200 12/22/14 03/31/15 12.00 % 200,000 200,000 - 200,000 - - 200,000 - 12/26/14 12/26/15 12.00 % 100,000 100,000 - 100,000 - - 100,000 - 04/07/15 04/17/17 10.00 % 50,000 50,000 871 49,129 - - 49,129 - Totals $ 4,596,800 $ 3,927,800 $ 44,960 $ 3,882,840 $ 1,886,000 $ 1,045,644 $ 349,129 $ 602,067 Maturities of Long-Term Obligations for Five Years and Beyond The minimum principal payments of notes payable at December 31, 2017: 2018 $ 4,320,260 2019 570,000 2020 - 2021 and thereafter 158,334 Total $ 5,048,594 |
Derivative Liability
Derivative Liability | 9 Months Ended |
Sep. 30, 2018 | |
Derivative Liability Abstract | |
Derivative Liability | We measure the fair value of our assets and liabilities under the guidance of ASC 820, Fair Value Measurements and Disclosures On August 19, 2018, the note issued to L2 Capital on February 19, 2018 went into default. In accordance with the terms of note, at any time on or after the occurrence of any event of default, the conversion price per share will adjust to the lesser of $0.50 or 65% multiplied by the lowest volume weighted average price of the common stock during the 20-trading-day period ending, in L2 Capital’s sole discretion on each conversion, on either the last complete trading day prior to the conversion date or the conversion date. We identified conversion features embedded within convertible debt issued. We have determined that the features associated with the embedded conversion option should be accounted for at fair value, as a derivative liability. We have elected to account for these instruments together with fixed conversion price instruments as derivative liabilities as we cannot determine if a sufficient number of sha+res would be available to settle all potential future conversion transactions. Following is a description of the valuation methodologies used to determine the fair value of our financial liabilities, including the general classification of such instruments pursuant to the valuation hierarchy: Quoted prices in Significant active markets for other Significant Fair value at identical assets/ observable unobservable September 30, liabilities inputs inputs 2018 (Level 1) (Level 2) (Level 3) Derivative Liability $ 705,278 $ - $ - $ 705,278 The tables below set forth a summary of changes in fair value of our Level 3 financial liabilities for the nine months ended September 30, 2018. The tables reflect changes for all financial liabilities at fair value categorized as Level 3 as of September 30, 2018: Derivative Liability Derivative liability as of December 31, 2017 $ - Fair value at the commitment date for convertible instruments 1,093,095 Change in fair value of derivative liability (374,447 ) Reclassification to additional paid-in capital for financial instruments that ceased to be a derivative liability (13,370 ) Derivative liability as of September 30, 2018 $ 705,278 Change in Fair Value of Derivative Liability* Change in fair value of derivative liability at the beginning of period $ - Day one gains/(losses) on valuation 446,512 Gains/(losses) from the change in fair value of derivative liability (374,447 ) Change in fair value of derivative liability at the end of period $ 72,065 _________________ * Gains/(losses) related to the revaluation of Level 3 financial liabilities is included in “Change in fair value of derivative liability” in the accompanying condensed consolidated unaudited statement of operations. The fair value of the derivative liability was estimated using the income approach and the Black-Scholes option-pricing model. The fair values at the commitment and remeasurement dates for our derivative liabilities were based upon the following management assumptions: Commitment Date Remeasurement Date** Expected dividends 0% 0% Expected volatility 81% to 499% 87% to 502% Risk free interest rate 2.05% to 2.96% 2.19% to 2.94% Expected term (in years) 0.25 to 5.0 0.23 to 4.98 _________________ ** The fair value at the remeasurement date is equal to the carrying value on the balance sheet. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Disclosure Text Block [Abstract] | ||
Stockholders' Equity | Common Stock For the nine months ended September 30, 2018, we issued 673,345 shares of common stock for services performed with a fair value of $138,986. For the nine months ended September 30, 2018, we issued 1,500,000 shares of common stock for financing to L2 Capital with a fair value of $81,140 in cash, net of offering cost. For the nine months ended September 30, 2018, we issued 400,000 shares of common stock for to L2 Capital for the conversion of a portion of L2 Capital’s notes payable in the amount of $18,190. For nine months ended September 30, 2018, note holders elected to exercise warrants to purchase 39,000 shares of common stock for $9,520 in cash. For the nine months ended September 30, 2018, we sold 400,000 shares of common stock for $40,000 in cash. Warrants and Options The following table summarizes all warrants outstanding and exercisable for the nine months ended September 30, 2018: Number of Weighted Average Warrants Warrants Exercise Price Balance at December 31, 2017 134,000 $ 0.27 Granted 238,573 $ 0.22 Exercised (39,000 ) $ 0.24 Forfeited - Balance at September 30, 2018 333,573 $ 0.19 The aggregate intrinsic value represents the excess amount over the exercise price that optionees would have received if all options had been exercised on the last business day of the period indicated, based on our closing stock price of $0.06 per share on September 30, 2018. The intrinsic value of warrants to purchase 333,573 shares on that date was $2,210. We calculated the fair value of the options by using the Black-Scholes option-pricing model with the following weighted average assumptions: no dividend yield for all the years; expected volatility ranging from 466-509%; risk-free interest rate ranging from 2.01-2.85%, and an expected life of three years. During the quarter ended September 30, 2018, we issued warrants to purchase 108,573 shares of our common stock, none of which has been exercised, to Craft Capital Management, LLC, as a finder’s fee for debt and equity transactions between L2 Capital and us. | (A) Common Stock For the year ended December 31, 2017, individuals exercised Series D warrants to purchase 998,079 shares of common stock at a price of $0.75 per share for cash totaling $748,535. These warrants were related to BBNA merger. For the year ended December 31, 2017, we issued 2,173,517 shares of common stock for services performed with a fair value of $2,388,478. For the year ended December 31, 2017, we issued 1,714,285 shares of common stock to L2C Capital, LLC with a fair value of $514,286 under the equity purchase agreement (See Note 9). For the year ended December 31, 2017, we issued 11,250 shares of common stock pursuant to our Private Placement Memorandum with a fair value of $45,000 ($4.00 per share). As part of the reverse merger on May 9, 2017, 94,343,776 shares of common stock were issued to the shareholders of OTE in exchange for common stock in the merged company. As a part of our agreement with the Memphis Investors, the Board re-priced 14,792,500 warrants and 100,000 options to $0.00 and exercised the warrants and options and issued 14,792,500 shares of common stock. These warrants had a fair value of $6,769,562. Per ASC Topic 718, this exchange is treated as a modification. The incremental value of $6,769,562 measured as the excess of the fair value of the modified award over the fair value of the original award immediately before the modification using the Black-Scholes option pricing model was expensed fully when they were exercised. We used the following assumptions for warrants and options on December 31, 2017: Expected volatility: 77% Expected lives: Various (30 days – 7 years) Risk-free interest rate: Various (0.50%-2.27%) Expected dividend yield: None On May 8, 2017, JPF Venture Group, Inc. (“JPF”), an investment entity that is majority-owned by Jeremy Feakins, the Company’s director, chief executive officer, and chief financial officer transferred 148,588 shares of common stock for $111,440 to the Company to fulfill an over commitment of “D” warrants. On May 9, 2017, the company issued 536,490 shares of common stock to the former shareholders of TetriDyn Solutions, Inc. for the assumption of $617,032 of accrued expenses and $1,015,506 of convertible notes and notes payable from related and unrelated parties. The company recorded a debit of $1,628,026 to the additional paid in capital as part of the recapitalization. On June 5, 2017, a note holder elected to convert a $25,000 convertible note payable for 1,806,298 shares of common stock ($0.014 per share). On June 29, 2017, the Board of Directors approved a stock bonus for the Chief Executive Officer and Sr Financial Advisor of 258,476 and 150,590 shares of common stock, respectively at fair value of $920,399. These shares were issued on November 1, 2017. On August 3, 2017, we entered into a compensation agreement with our former legal counsel wherein we agreed to pay an outstanding legal bill in the amount of $197,950 by issuance of 65,000 shares covered by a Form S-8 Registration Statement filed with the Securities and Exchange Commission (SEC) on August 25, 2017. The former legal counsel may, at any time and from time to time following the filing of the Form S-8, elect to call for the issuance of shares as payment for the outstanding legal bill. As the shares are sold into the market, the outstanding balance will be reduced. On October 17, 2017, the company issued 65,000 shares of common stock pursuant to the agreement with a fair value of $146,250. As of December 31, 2017, our former legal counsel has sold 704 shares with a total proceeds of $1,133. As of December 31, 2017, the fair value of the 64,296 shares of common stock was $20,575 and $124,542 was recorded as a change in fair value of liability. On August 15, 2017, Series B note holders elected to convert $316,666 in notes payable for 316,666 shares of common stock at a conversion rate of $1.00. In addition, they converted accrued interest in the amount of $120,898 for 120,898 shares of common stock. The shares were recorded at fair value of $1,165,892. The Company recorded a loss on the settlement of debt of $728,328 on the conversion date. On August 15, 2017, Clean Energy note holders elected to convert $166,800 in notes payable for 139,000 shares of common stock at a conversion rate of $1.20. In addition, they converted accrued interest in the amount of $48,866 for 40,722 shares of common stock. On August 15, 2017, Jeremy P. Feakins & Associates, LLC, an investment entity that is majority-owned by Jeremy Feakins, the Company’s director, chief executive officer, and chief financial officer, elected to convert $618,500 in notes payable for 618,500 shares of common stock at a conversion rate of $1.00. In addition, they converted accrued interest in the amount of $207,731 for 207,731 shares of common stock. On September 8, 2017, JPF Venture Group, Inc. (“JPF”), an investment entity that is majority-owned by Jeremy Feakins, the Company’s director, chief executive officer, and chief financial officer, elected to convert $50,000 in notes payable for 3,612,596 shares of common stock at a conversion rate of $0.014. In addition, they converted accrued interest in the amount of $6,342 for 458,198 shares of common stock. The Company entered into a settlement agreement to convert outstanding payable balance totaling $180,000 into 360,000 shares of common stock. The shares were recorded at fair value of $556,875. The Company recorded a loss on settlement of debt of $376,875 on settlement date. On November 8, 2017, Jeremy P. Feakins & Associates LLC, an investment entity that is majority-owned by Jeremy Feakins, the Company’s director, chief executive officer, and chief financial officer, elected to convert $50,000 of Series B notes payable into 50,000 shares of common stock at a conversion rate of $1.00. In addition, accrued interest of $16,263 was converted into 16,263 shares of common stock. Warrants and Options We used the following assumptions for options during the year ended December 31, 2017: Expected volatility: 485% Expected lives: 3 years Risk-free interest rate: 1.98% - 2.01% Expected dividend yield: None We used the following assumptions for options during the year ended December 31, 2016: Expected volatility: 61% Expected lives: Less than 1 Year Risk-free interest rate: 0.62% Expected dividend yield: None During 2012, we issued warrants to purchase 1,075,000 shares of common stock in conjunction with Series A notes payable that are exercisable at a price of $3.00 per share and expire on March 31, 2017. The warrants were fully exercised at $0.00 upon Board of Directors approval during the year ended December 31, 2017. . During 2013, we issued warrants to purchase 105,000 shares of common stock in conjunction with Series B notes payable that are exercisable at a price to be determined pursuant to a specified formula ( see During 2013, we issued warrants to purchase 300,000 shares of common stock, with an exercise price equal to the greater of a 50% discount off of the stock price at our initial public offering of shares in conjunction with a note payable to an entity owned by our chief executive officer in the amount of $100,000. Effective July 21, 2014, the Company was approved for listing on the GXG Markets First Quote platform with an $0.85 per share price, establishing a price of $0.425 per share for the warrants and making them all exercisable. The warrants were fully exercised at $0.00 upon Board of Directors approval during the year ended December 31, 2017 As part of the merger with BBNA, we assumed outstanding warrants to purchase 10,000,000 shares of common stock. These warrants are grouped into five tranches of 2,000,000 shares. The pricing for each tranche is as follows: Series A and Series B are $0.50 per share; Series C is $0.75 per share; Series D is $1.00 per share; and Series E is $1.25 per share. These warrants expire on December 31, 2018. During 2014, 5,786,635 of these warrants were exercised and 1,157,989 were exercised during 2015. In addition, we repriced the Series D warrants to $0.75 per share and Series E warrants to $0.50 per share. 998,079 were exercised during the year ended December 31, 2017. During 2014, we issued warrants to purchase 12,912,500 shares of common stock, with an exercise price equal to the greater of a 50% discount off of the stock price at our initial public offering of shares in conjunction with a note payable to an entity owned by our chief executive officer in the amount of $2,265,000 ( see During 2014, we issued warrants to purchase 300,000 shares of common stock, with an exercise price of $1.00 per share, in conjunction with notes payable to individuals, including a related party, in the amount of $300,000. These warrants expire on December 31, 2018. The warrants were fully exercised at $0.00 upon Board of Directors approval during the year ended December 31, 2017 ( see On July 28, 2015, we issued warrants to purchase 4,480,000 shares of common stock with an exercise price of $0.25 per share in conjunction with the loan agreement with a private venture fund, which is a related party, to provide us up to $1,000,000 in working capital. The warrants expire on April 30, 2016. We calculated the fair value of the warrant using the Black-Scholes option-pricing model with the following weighted average assumptions: no dividend yield for all the years; expected volatility of 54%; risk-free interest rate of 0.32%; and an expected life of one year ( see The following table summarizes all warrants outstanding and exercisable for the years ended December 31, 2017 and 2016: Warrants Number of Warrants Weighted Average Exercise Price Balance at December 31, 2015 22,227,876 $ 0.64 Granted 3,520,000 $ 0.25 Exercised (9,835,666 ) $ 0.31 Forfeited - - Balance at December 31, 2016 15,912,210 $ 0.76 Granted 134,000 * Exercised (998,079 ) $ 0.75 Exercised (re-priced to $0.00) (14,692,500 ) $ 0.00 Forfeited (221,631 ) Balance at December 31, 2017 134,000 $ 0.27 Exercisable December 31, 2017 134,000 $ 0.27 *Discount of 15% of CPWR closing price on OTCQB the day before the warrant is exercised. The aggregate intrinsic value represents the excess amount over the exercise price optionees would have received if all options had been exercised on the last business day of the period indicated, based on the Company’s closing stock price of $6,432 for such day. On, January 1, 2015, we issued to our vice president shareholder relations three-year options to purchase an aggregate of 100,000 shares of common stock at $0.75 per share. The options vest in four segments of 25,000 shares per quarter commencing on: March 31, 2015; June 30, 2015; September 30, 2015, and December 31, 2015. The options expire on January 1, 2018. We calculated the fair value of the options by using the Black-Scholes option-pricing model with the following weighted average assumptions: no dividend yield for all the years; expected volatility of 54%; risk-free interest rate of 0.25%; and an expected life of one year. The fair value of the options was $22,440 or $0.2244 per option. These options were fully exercised at $0.00 upon BOD approval during the year ended December 31, 2017. The following table summarizes all options outstanding and exercisable for the years ended December 31, 2017 and 2016: Number of Weighted Average Options Exercise Price Balance at December 31, 2015 100,000 $ 0.75 Granted - - Exercised - - Forfeited - - Balance at December 31, 2016 100,000 $ 0.75 Granted - Exercised (100,000 ) $ 0.75 Forfeited - Balance at December 31, 2017 - Exercisable December 31, 2017 - |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Disclosure Text Block [Abstract] | ||
Commitments and Contingencies | Commitments On December 11, 2017, we entered into an equity purchase agreement with L2 Capital, LLC, for up to $15,000,000. As provided in the agreement, we may require L2 Capital to purchase shares of common stock from time to time by delivering a “put” notice to L2 Capital specifying the total number of shares to be purchased. L2 Capital will pay a purchase price equal to 85% of the “market price,” which is defined as the lowest traded price on the OTCQB marketplace during the five consecutive trading days following the “put date,” or the date on which the applicable shares are delivered to L2 Capital. The number of shares may not exceed 300% of the average daily trading volume for our common stock during the five trading days preceding the date on which we deliver the applicable put notice. Additionally, such amount may not be lower than $10,000 or higher than $1,000,000. L2 Capital has no obligation to purchase shares under this agreement to the extent that such purchase would cause L2 Capital to own more than 4.99% of our common stock. Upon the execution of this agreement, we issued 1,714,285 shares of common stock valued at $514,286 as a commitment fee in connection with the agreement. The shares to be issued pursuant to this agreement were covered by a Registration Statement on Form S-1 effective on January 29, 2018. During the nine months ended September 30, 2018, we executed nine put options for L2 Capital to purchase 1,500,000 shares of common stock (see Note 10). On June 26, 2017, we entered a nonexclusive finder’s arrangement with Craft Capital Management LLC (“Craft”) in the event that proceeds with a debt and/or equity transaction or to finance a merger/acquisition and/or another transaction are arranged by Craft. We have no obligation to consummate any transaction, and we can choose to accept or reject any transaction in our sole and absolute discretion. Upon the successful completion of a placement, we will pay to Craft 8% of the gross proceeds from an equity placement and 3% for a debt placement. In addition, we will issue to Craft, at the time of closing, warrants with an aggregate exercise price equal to 3% of the amount raised. These warrants have a fair value of $13,280 based on the Black-Scholes option-pricing model. The warrants have an exercise price ranging from $0.0425 to $0.25 per share and are exercisable for a period of five years after the closing of the placement. If we, at any time while these warrants are outstanding, sell or grant any option to purchase or sell or grant any right to reprice, or otherwise dispose of or issue any common stock or securities entitling any person or entity to acquire shares of common stock, at an effective price per share less than the then-exercise price, then the exercise price will be reduced to equal the lower share price, at the option of Craft. Such adjustment will be made whenever such common stock is issued. We will notify Craft in writing, no later than the trading day following the issuance of any common stock, of the applicable issuance price or applicable reset price, exchange price, conversion price, and other pricing terms. As of September 30, 2018, we have issued to Craft warrants to purchase 108,573 shares of common stock, none of which has been exercised, as a finder’s fee for debt and equity transactions between L2 Capital and us (see Note 8). On August 7, 2018, we signed a non-binding letter of intent proposing to acquire a heavy-duty commercial air conditioning company. We believe that the acquisition will help support our existing projects and enable us to enter new markets. Closing is subject to additional due diligence, the negotiation of definitive agreements, satisfaction of agreed conditions, and financing. We continue to focus our efforts on satisfying the above conditions. Litigation From time to time, we are involved in legal proceedings and regulatory proceedings arising from operations. We establish reserves for specific liabilities in connection with legal actions that management deems to be probable and estimable. On May 4, 2018, we reached a settlement of the claims at issue in Ocean Thermal Energy Corp. v. Robert Coe, et al. Consulting Agreements For the nine months ended September 30, 2018, we issued 673,345 shares of common stock for services performed with a fair value of $138,986. On June 4, 2018, we entered into a consulting agreement to pay 20,000 shares of common stock when one of the conditions of the contract was satisfied. Although this condition was satisfied on August 31, 2018, we have not issued the shares. As of September 30, 2018, we have accrued the share compensation at fair value totaling $1,600. On August 14, 2018, we entered into a consulting agreement to pay $40,000 by issuing shares of common stock. As of September 30, 2018, we have not issued the shares and have accrued the amount. Employment Agreements On January 1, 2011, we entered into a five-year employment agreement with our chief executive officer, which provides for successive one-year term renewals unless it is expressly cancelled by either party 100 days prior to the end of the term. Under the agreement, our chief executive officer will receive an annual salary of $350,000, a car allowance of $12,000, and company-paid health insurance. The agreement also provides for bonuses equal to one times his annual salary plus 500,000 shares of common stock for each additional project that generates $25 million or more in revenue to us. Our chief executive officer is entitled to receive severance pay in the lesser amount of three years’ salary or 100% of the remaining salary if the remaining term is less than three years. On June 29, 2017, the board of directors approved extending the employment agreements for the chief executive officer and the senior financial advisor for an additional five years. The salary and other compensation were increased to account for inflation since the original employment agreements were executed and became effective June 30, 2017. These modifications were never reduced to writing. | Commitments On January 1, 2011, we entered into a five-year employment agreement with an individual to serve as our chief executive officer. The employment agreement provides for successive one-year term renewals unless it is expressly cancelled by either party 100 days prior to the end of the term. Under the agreement, the chief executive officer will receive an annual salary of $350,000, a car allowance of $12,000, and Company-paid health insurance. The agreement also provides for bonuses equal to one times annual salary plus 500,000 shares of common stock for each additional project that generates $25 million or more revenue to us. The chief executive officer is entitled to receive severance pay in the lesser amount of three years’ salary or 100% of the remaining salary if the remaining term is less than three years. On June 29, 2017, the Board of Directors approved extending the employment agreements for the chief executive officer and the senior financial advisor for an additional five (5) years. The salary and other compensation shall be increased to account for inflation since the original employment agreements were executed and became effective June 30, 2017. On June 29, 2017, the Board of Directors approved a stock bonus for the Chief Executive Officer and Sr Financial Advisor of 258,476 and 150,590 shares of common stock, respectively at fair value of $920,399. These shares were issued on November 1, 2017. The Company entered into a settlement agreement to convert outstanding payable balance in the amount of $180,000 into 360,000 share at $0.50 per share. These shares were recorded at fair value of $556,875. The company recorded a loss on settlement of debt of $376,875 on settlement date. During the year ended December 31, 2017, we issued 3,887,802 shares of common stock to consultants for services and commitment fee with fair value of $2,902,764. On December 11, 2017, the Company entered into an equity purchase agreement with L2 Capital, LLC for up to $15,000,000. On January 5, 2018, we issued 1,714,285 shares of common stock valued at $514,286 as a commitment fee in connection with the agreement. The shares to be issued pursuant to this agreement were covered by a Form S-1 Registration Statement approved the Securities and Exchange Commission (SEC) and effective on January 29, 2018. As of the date of this filing, no “put” options were exercised. Contingencies On June 29, 2015, with the Baha Mar resort an estimated 95% complete, Baha Mar Ltd., the developer of the resort, filed for Chapter 11 bankruptcy protection in U.S. Bankruptcy Court in Wilmington, Delaware. Baha Mar Ltd. is the entity with which our subsidiary entered into the Energy Services Agreement to build a SWAC system. The underlying cause of the filing was a commercial dispute between Baha Mar Ltd. and its construction company. Neither we nor our construction company is a party to the proceeding. At an early stage of the proceedings, the U.S. Bankruptcy Court in Wilmington, Delaware dismissed the action on September 15, 2015, agreeing with the Bahamas Supreme Court in finding that the case should properly be decided in Bahamian courts. The case is proceeding in the Bahamas Supreme Court with the September 2015 appointment of provisional liquidators (Bahamas-based KRyS Global and UK-based AlixPartners) for the specific purpose of preserving the assets of the unfinished resort pending a resolution of the dispute. In November 2015, the Bahamas Supreme Court named Deloitte & Touche LLP as a receiver to Baha Mar Ltd. at the request of the Export-Import Bank of China, which is a primary creditor having made a $2.45 billion loan to Baha Mar Ltd. in 2010. In March 2016, the receiver engaged Colliers International, an international real estate firm, to actively market the resort to a new owner. The June 2015 bankruptcy of the developer constituted an event of default under the Energy Services Agreement, but we have elected not to assert that default in favor of attempting to pursue the project. Under the terms of our Energy Services Agreement, in the event of default of the developer, we have the right to recover damages, including the amount invested in the project ($7.9 million at December 31, 2015), plus any fees earned at the time of breach and other direct damages, limited in aggregate amount to $25.0 million. The Energy Services Agreement is binding on any successor developer that takes over the development and finished construction. We believe that even though bankruptcy courts have substantial powers to void contracts, the Energy Services Agreement is likely to survive (either in full effect or with limited modifications) due to the energy requirements of the project, but there can be no guarantee that we will realize any future benefits from the project. Our Baha Mar project will be delayed until the new owner takes control of the resort and our ESA contract is either terminated or assumed by the new ownership. According to Bahamas prime minister Perry Christie, the Bahamas' long-delayed Baha Mar Resort will open under the ownership of Hong Kong-based Chow Tai Fook Enterprises (CTFE), whose companies include luxury-hotel operator Rosewood Hotels. We have elected not to intervene in the Bahamas proceeding, which we believe is in the nature of an equitable proceeding to preserve the project and seek to reorganize so that the project can be completed rather than liquidated. Our strategy is based on our conclusion that the completion of the resort by any new owner will require it to address the lack of capacity of the current electrical grid to provide air conditioning through conventional means and the projected energy cost savings derived from our SWAC system as compared to conventional electricity at prevailing rates, even if its lack of reliability in the Bahamas is discounted. By relying on this strategy, we believe we are avoiding significant legal representation costs. Further, we believe that we would have no legal position to differentiate us from other unsecured creditors with an aggregate of about $2.0 billion in claims. Litigation From time to time, we are involved in legal proceedings and regulatory proceedings arising from operations. We establish reserves for specific liabilities in connection with legal actions that management deems to be probable and estimable. In early 2016, three Principals from a family office based in Memphis, Tennessee contacted us about investing in Ocean Thermal Energy Corporation. After conducting extensive due diligence on our Company and its technology, prospects, Officers, and Directors, the investors presented us with a Term Sheet to invest $42.4 million in our Company. The Investors insisted on exclusivity, which prevented us from continuing our fundraising efforts. The Investors also insisted on confidentiality, preventing us from communicating their offer until closing. We, along with our lawyers, engaged in our own due diligence on the Investors, and found that the Investors were known in the Memphis community as having substantial net worths, and good reputations in the financial industry. The point person for the Investors is a Certified Financial Planner as well as a licensed broker and investment advisor. Based on our due diligence, we were comfortable and excited to move forward with these Investors. Despite the Investors’ promises, the Investors did not live up to their commitment and did not fund our Company as promised. In February of 2017, we instructed our attorneys to pursue the matter through the Courts and to seek significant damages from all potentially responsible parties. On May 16, 2017, we filed a civil suit in the United States District Court in the Western District of Tennessee. On March 12, 2018, the Company reached a settlement of the claims at issue in Ocean Thermal Energy Corp. v. Robert Coe et al., Case No. 2:17-cv-02343SHL-cgc, before the United States District Court for the Western District of Tennessee. The settlement requires the defendants to make a payment of $1,075,000 within 30 days and each side to pay its own legal costs. |
Related-party Transactions
Related-party Transactions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Disclosure Text Block [Abstract] | ||
Related-party Transactions | For the nine months ended September 30, 2018, we paid rent of $90,000 to a company controlled by our chief executive officer under an operating lease agreement. On January 18, 2018, the due date of a 2015 related-party note payable was extended to the earlier of December 31, 2018, or the date of the financial closings of our Baha Mar Project (or any other project of $25 million or more), whichever occurs first. The balance on the note payable was $1,102,500 and accrued interest was $483,642 as of September 30, 2018. On March 6, 2018, the due date of a 2012 related-party note payable was extended to December 31, 2018. The balance on the note payment was $1,000,000 and accrued interest was $611,393 as of September 30, 2018. On March 9, 2017, we issued a promissory note payable of $200,000 to a related party in which our chief executive officer is an officer and director. The note bears interest of 10% and is due and payable within 90 days after demand. The outstanding balance was $177,000 and accrued interest was $28,328 as of September 30, 2018. On November 6, 2017, we entered into an agreement and promissory note with JPF to loan up to $2,000,000 to us. The terms of the note are as follows: (i) interest is payable at 10% per annum; (ii) all unpaid principal and all accrued and unpaid interest is due and payable at the earliest of resolution of the Memphis litigation (as defined therein), September 30, 2018, or when we are otherwise able to pay. As of September 30, 2018, the outstanding balance was $612,193 and the accrued interest was $64,196. For the nine months ended September 30, 2018, we repaid $19,374. On September 30, 2018, the note was amended to extend the maturity date to the earliest of a resolution of the Memphis litigation, December 31, 2018, or when we are otherwise able to pay. We remain liable for the loans made to TDYS by JPF before the Merger. As of September 30, 2018, the outstanding balance of these loans was $581,880 and the accrued interest was $117,363. | For the year ended December 31, 2017, we paid rent of $95,000 to a company controlled by our chief executive officer under an operating lease agreement. On February 16, 2017, the due date of the Jeremy P. Feakins & Associates, LLC, an investment entity that is majority-owned by Jeremy Feakins, the Company’s director, chief executive officer, and chief financial officer note payable in the amount of $2,265,000 issued on January 31, 2015, was extended to December 31, 2018. On August 15, 2017, $618,500 of the note payable was converted into 618,500 shares of common stock. In addition, they converted accrued interest in the amount of $207,731 for 207,731 shares of common stock. The remaining balance on the note payable as of December 31, 2017 is $1,137,500 and the accrued interest is $399,692. On March 6, 2018, the due date of the related party note payable in the amount of $1,000,000 issued on February 3, 2012, was extended to December 31, 2018. On March 9, 2017, we issued a promissory note payable of $200,000 to a related party in which our chief executive officer is an officer and director. The note bears interest of 10% and is due and payable within 90 days after demand. The balance outstanding on December 31, 2017, is $177,000. On March 31, 2017, we made a repayment of note payable to a related party in the amount of $25,000. . On May 8, 2017, JPF Venture Group, Inc. (“JPF”), an investment entity that is majority-owned by Jeremy Feakins, the Company’s director, chief executive officer, and chief financial officer transferred 148,588 shares of common stock for $111,440 to the Company to fulfill an over commitment of “D” warrants. On June 5, 2017, a note holder elected to convert a $25,000 convertible note payable for 1,806,298 shares of common stock ($0.014 per share). On September 8, 2017, JPF Venture Group, Inc. (“JPF”), an investment entity that is majority-owned by Jeremy Feakins, the Company’s director, chief executive officer, and chief financial officer, elected to convert $50,000 in notes payable for 3,612,596 shares of common stock at a conversion rate of $0.014. In addition, accrued interest in the amount of $6,342 was converted to 458,198 shares. On November 6, 2017, the Company entered into an agreement with a promissory note with JPF Venture Group, Inc. (“JPF”), an investment entity that is majority-owned by Jeremy Feakins, the Company’s director, chief executive officer, and chief financial officer, to loan the Company up to $2,000,000. The terms of the note are as follows: (i) interest is payable at 10% per annum; (ii) all unpaid principal and all accrued and unpaid interest shall be due and payable at the earliest of (a) resolution of the Memphis litigation; (b) June 30, 2018; or (c) when the company is otherwise able to pay. As of December 31, 2017, the outstanding balance was $641,568 and the accrued interest was $14,372. On November 8, 2017, Jeremy P. Feakins & Associates, LLC, an investment entity that is majority-owned by Jeremy Feakins, the Company’s director, chief executive officer, and chief financial officer, a Series B note holder, elected to convert $50,000 in notes payable for 50,000 shares of common stock at a conversion rate of $1.00. In addition, they converted accrued interest in the amount of $16,263 for 16,263 shares As part of the merger between Ocean Thermal Energy Corporation and TetriDyn Solutions, Inc. (“TDYS”) on May 8, 2017, the Company assumed the loans made to “TDYS” by JPF Venture Group, Inc., an investment entity that is majority owned by Jeremy Feakins, the Company’s director, chief executive officer, and chief financial officer. As of December 31, 2017, the outstanding balance of all loans was $581,880. |
Subsequent Events
Subsequent Events | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Disclosure Text Block [Abstract] | ||
Subsequent Events | Subsequent to September 30, 2018, we executed three put options for L2 Capital to purchase 800,000 shares of common stock for $25,764 in cash, net of offering cost. Subsequent to September 30, 2018, we issued warrants to purchase 16,500 shares of our common stock to Craft Capital as a finder’s fee for debt and equity transactions between L2 Capital and us. None of the warrants been exercised. Subsequent to September 30, 2018, we issued 900,000 shares of common stock to L2 Capital for the conversion of a portion of L2 Capital’s notes payable in the amount of $25,197. | On December 11, 2017, the Company entered into an equity purchase agreement with L2 Capital, LLC for up to $15,000,000. We issued 1,714,285 shares of common stock valued at $514,286 as a commitment fee in connection with the agreement. The shares to be issued pursuant to this agreement were covered by a Form S-1 Registration Statement approved the Securities and Exchange Commission (SEC) and effective on January 29, 2018. As of the date of this filing, no “put” options were exercised. On December 28, 2017, we entered into a Note and Warrant Purchase Agreement pursuant to which we issued a series of unsecured promissory notes (the “Notes”) to accredited investors. See Note 5 – Convertible Notes Payable and Notes Payable. Subsequent to December 31, 2017, the company has raised an additional $444,156 and issued Warrants to purchase an additional 114,500 shares of common stock for a total of 248,500 shares. On January 16, 2018, 28,000 warrants were exercised at an average value of $0.2805 per share for a total of $7,854. On February 27, 2018, 2,000 warrants were exercised at an average value of $0.1785 per share for a total of $357. On February 15, 2018, the Company entered into an agreement with L2 Capital, LLC (L2), a Kansas limited liability company, for a loan of up to $565,555, together with interest at the rate of eight percent (8%) per annum (with the understanding that the initial six months of such interest of each tranche funded shall be guaranteed), at maturity or upon acceleration or otherwise, as set forth herein (the “Note”). The consideration to the Company for this Note is up to $500,000 due to the prorated original issuance discount of up to $55,555 (the “OID”) and a $10,000 credit for L2’s transactional expenses. L2 shall pay $100,000 of the Consideration (the “First Tranche”) within a reasonable amount of time of the full execution of the transactional documents related to this Note. At the closing of the First Tranche, the outstanding principal amount under this Note shall be $121,111, consisting of the First Tranche plus the prorated portion of the OID (as defined herein) and a $10,000 credit for L2’s transaction fees. As of the date of this filing, The Company has received two tranches totaling $204,444, which were allocated as follows: Original Issuance Discount - $19,444; L2’s Transaction Fee - $10,000; Broker-Dealer’s Fee - $14,000; Net Proceeds to Company - $161,000. The Note dated February 16, 2017 to Jeremy P. Feakins & Associates, LLC, an investment entity that is majority-owned by Jeremy Feakins, the Company’s director, chief executive officer, and chief financial officer was reduced by $15,000 for the payment of principal on January 4, 2018, reducing the outstanding balance to $1,122,500. In late 2016, we entered into a binding agreement with an investor group from Memphis, Tennessee to invest a substantial amount of capital into our company (the “Memphis Investors”). As part of the agreement, we were restricted from making changes to our capital structure and, consequently, suffered significant financial damages when the investors did not honor their commitment and defaulted on the agreement. On May 16, 2017, we filed a civil suit in the United States District Court in the Western District of Tennessee. On March 12, 2018, the Company reached a settlement of the claims at issue in Ocean Thermal Energy Corp. v. Robert Coe et al., Case No. 2:17-cv-02343SHL-cgc, before the United States District Court for the Western District of Tennessee. The settlement requires the defendants to make a payment of $1,075,000 within 30 days and each side to pay its own legal costs. |
Organization and Summary of S_2
Organization and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Source of Business and Basis of Presentation | Ocean Thermal Energy Corporation (“Ocean Thermal”, the “Company”, “we”, and “us”) is currently in the business of designing Ocean Thermal Energy Conversion (“OTEC”) power plants and Seawater Air Conditioning (“SWAC”) plants for large commercial properties, utilities and municipalities. These technologies provide practical solutions to mankind’s three oldest and most fundamental needs: clean drinking water, plentiful food, and sustainable, affordable energy without the use of fossil fuels. OTEC is a clean technology that continuously extracts energy from the temperature difference between warm surface ocean water and cold deep seawater. In addition to producing electricity, some of the seawater running through an OTEC plant can be efficiently desalinated using the power generated by the OTEC technology, producing thousands of cubic meters of fresh water every day for the communities served by its plants for use in agriculture and human consumption. This cold deep nutrient-rich water can also be used to cool buildings (SWAC) and for fish farming/ aquaculture. In short, it’s a technology with many benefits, and its versatility makes OTEC unique. The Company previously operated under the corporate name of TetriDyn Solutions, Inc. (“TetriDyn”). On March 10, 2017, TetriDyn entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Ocean Thermal Energy Corporation, a Delaware corporation (“OTE”). On May 9, 2017, TetriDyn consummated the acquisition of all outstanding equity interests of OTE pursuant to the terms of the Merger Agreement, with a newly-created Delaware corporation that is wholly-owned by TetriDyn (“TetriDyn Merger Sub”), merging with and into OTE (the “Merger”) and OTE continuing as the surviving corporation and a wholly-owned subsidiary of TetriDyn. Effective upon the consummation of the Merger (the “Closing”), the OTE Stock issued and outstanding or existing immediately prior to the Closing of the Merger was converted at the Closing into the right to receive newly issued shares of TetriDyn common stock. As a result of the Merger, TetriDyn succeeded to the business and operations of OTE. In connection with the consummation of the Merger and upon the consent of the holders of a majority of the outstanding common shares, TetriDyn filed with the Nevada Secretary of State an amendment to its articles of incorporation changing its name to “Ocean Thermal Energy Corporation”. On April 13, 2017, the Company filed a Schedule 14C Information Statement with the Securities and Exchange Commission (the “Commission”) to notify stockholders that the following actions were approved without a meeting of the stockholders: ● An amendment to our Articles of Incorporation, as amended, to effect a change in the Company’s name from TetriDyn Solutions, Inc. to Ocean Thermal Energy Corporation; ● An amendment to our Articles of Incorporation, as amended, to effect and authorize 5,000,000 shares of preferred stock and 200,000,000 shares of common stock; and ● An amendment to our Articles of Incorporation, as amended, to effect a forward stock split of the issued and outstanding shares of common stock of the Company on an approximately 2.1676-for-1 basis. On May 25, 2017, the Company received approval from the Financial Industry Regulatory Authority (“FINRA”) to change the trading symbol for the Company’s common stock to “CPWR” from “TDYS.” The Company’s common stock began formally trading under the symbol “CPWR” on June 21, 2017. For accounting purposes, this transaction is being accounted for as a reverse merger and has been treated as a recapitalization of Tetridyn Solutions, Inc. with Ocean Thermal Energy Corporation as the accounting acquirer. The historical financial statements of the accounting acquirer became the financial statements of the Company. The Company did not recognize goodwill or any intangible assets in connection with the transaction. The 110,273,767 shares issued to the shareholder of OTE in conjunction with the share exchange transaction has been presented as outstanding for all periods. The historical financial statements include the operations of the accounting acquirer for all periods presented and the accounting acquiree for the period from May 9, 2017 through December 31, 2017. The Company’s accounting year end is December 31, which was the year end of Ocean Thermal Energy Corporation. The consolidated financial statements include the accounts of the Company and our wholly-owned subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation. In the opinion of management, our financial statements reflect all adjustments that are of a normal recurring nature necessary for presentation of financial statements for interim periods in accordance with U.S. generally accepted accounting principles (GAAP) and with the instructions to Form 10-K in Article 10 of SEC Regulation S-X. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of our financial statements, and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. |
Principal Subsidiary Undertakings | Our consolidated financial statements for the years ended December 31, 2017 and 2016, include the following subsidiaries: Name Place of Incorporation / Establishment Principal Activities Date Formed Ocean Thermal Energy Bahamas Ltd. Bahamas Intermediate holding company of OTE BM Ltd. and OTE Bahamas O&M Ltd. 07/04/2011 OTE BM Ltd. Bahamas OTEC/SDC development in the Bahamas 09/07/2011 OCEES International Inc. Hawaii, USA Research and development for the Pacific Rim 01/21/1998 Ocean Thermal Energy UK Limited England and Wales Dormant 07/22/2010 OTEC Innovation Group Inc. Delaware, USA Dormant 06/02/2011 OTE-BM Energy Partners LLC Delaware, USA Dormant 06/02/2011 OTE Bahamas O&M Ltd. Bahamas Dormant 09/07/2011 Ocean Thermal Energy Holdings Ltd. Bahamas Dormant 03/05/2012 Ocean Thermal Energy Cayman Ltd. Caymans Dormant 03/26/2013 OTE HC Ltd. Caymans Dormant 03/26/2013 Ocean Thermal Energy USVI, Inc. Virgin Islands Dormant 07/12/2016 We have an effective interest of 100% in each of our subsidiaries. |
Use of Estimates | In preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reported period. Actual results could differ from those estimates. Significant estimates include the assumptions used in valuing equity investments and issuances, valuation of deferred tax assets, and depreciable lives of property and equipment. |
Cash and Cash Equivalents | We consider all highly liquid temporary cash investments with an original maturity of three months or less to be cash equivalents. At December 31, 2017 and 2016, we had no cash equivalents. |
Income Taxes | We account for income taxes under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 740-10-25, “ Income Taxes—Overall—Recognition Our 2013 to 2017 tax years remain open to audit by the Internal Revenue Service and state tax authorities. |
Business Segments | We conduct operations in various foreign jurisdictions that use our technology. Our segments are based on the location of their operations. The U.S. territories segment consists of operations in the U.S. Virgin Islands and Guam; the Bahamas segment consists of operations specific to the Bahamas; and the other segment currently consists of operations in the Cayman Islands. Direct revenues and costs, depreciation, depletion, and amortization costs, general and administrative costs (“G&A”), and other income directly associated with their respective segments are detailed within the following discussion. Identifiable net property and equipment are reported by business segment for management reporting and reportable business segment disclosure purposes. Current assets, other assets, current liabilities, and long-term debt are not allocated to business segments for management reporting or business segment disclosure purposes. Reportable business segment information for the years ended December 31, 2017, and December 31, 2016, is as follows: December 31, 2017 Headquarters US Territories Bahamas Other Total Revenue $ - $ - $ - $ - $ - Assets 451,367 892,639 - 1,344,006 Net loss (14,591,675 ) - - - (14,591,675 ) Property and equipment 1,352 - - - 1,352 Assets under construction 892,639 - 892,639 Depreciation 1,014 - - - 1,014 Additions to assets under construction - 95,352 - - 95,352 December 31, 2016 Headquarters US Territories Bahamas Other Total Revenue $ - $ - $ - $ - $ - Assets 40,410 797,287 - 48,998 886,695 Net Loss (5,837,007 ) - (271,110 ) - (6,108,117 ) Property and equipment 2,366 - - - 2,366 Capitalized construction in process 797,287 - 48,998 846,285 Depreciation 4,207 - - - 4,207 Additions to assets under construction - 119,722 - - 119,722 For the year ended December 31, 2017, the U.S. territories are comprised of U.S. Virgin Islands project (approx. $728,000) and Guam project (approx. $165,000). Other territories are comprised of Cayman Islands project); however during the year ended December 31, 2017, $48,998 of Cayman Islands assets under construction was considered to be impaired due to the uncertainty of the project and were written off. The additions to assets under construction in 2017 were primarily salaries and consulting services. For the year ended December 31, 2016, the U.S. territories are comprised of U.S. Virgin Islands project (approx. $632,000) and Guam project (approx. $165,000). Other territories are comprised of Cayman Islands project (approx. $49,000). |
Property and Equipment | Furniture, equipment, and software are recorded at cost and include major expenditures that increase productivity or substantially increase useful lives. Maintenance, repairs, and minor replacements are charged to expenses when incurred. When furniture, vehicles, or equipment is sold or otherwise disposed of, the asset and related accumulated depreciation are removed from this account, and any gain or loss is included in the statement of operations. Assets under construction represent costs incurred by us for our renewable energy systems currently in process. Generally, all costs incurred during the development stage of our projects are capitalized and tracked on an individual project basis and are included in construction in progress until the project has been placed into service. If a project is abandoned, the associated costs that have been capitalized are charged to expense in the year of abandonment. Expenditures for repairs and maintenance are charged to expense as incurred. Interest costs incurred during the construction period of defined major projects from debt that is specifically incurred for those projects are capitalized. Direct labor costs incurred for specific major projects expected to have long-term benefits are capitalized. Direct labor costs subject to capitalization include employee salaries, as well as related payroll taxes and benefits. With respect to the allocation of salaries to projects, salaries are allocated based on the percentage of hours that our key managers, engineers, and scientists work on each project. These individuals track their time worked at each project. Major projects are generally defined as projects expected to exceed $500,000. Direct labor includes all of the time incurred by employees directly involved with construction and development activities. Time spent in general and indirect management and in evaluating the feasibility of potential projects is expensed when incurred. We capitalize costs incurred once the project has met the project feasibility stage. Costs include environmental engineering, permits, government approval, and site engineering costs. We currently have four projects in the development stage and one project in the construction phase. We capitalize direct interest costs associated with the projects. As of December 31, 2017 and 2016, we have no interest costs capitalized. The cost of furniture, vehicles, equipment, and software is depreciated over the estimated useful lives of the related assets. Depreciation is computed using the straight-line method for financial reporting purposes. The estimated useful lives and accumulated depreciation for land, buildings, furniture, vehicles, equipment, and software are as follows: Years Computer Equipment 3 Software 5 |
Fair Value | ASC Topic 820, “ Fair Value Measurements and Disclosures ● Level 1–Pricing inputs are quoted prices available in active markets for identical assets or liabilities as of the reporting date. ● Level 2–Pricing inputs are quoted for similar assets or inputs that are observable, either directly or indirectly, for substantially the full term through corroboration with observable market data. Level 2 includes assets or liabilities valued at quoted prices adjusted for legal or contractual restrictions specific to these investments. ● Level 3–Pricing inputs are unobservable for the assets or liabilities; that is, the inputs reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability. Management believes the carrying amounts of the short-term financial instruments, including cash and cash equivalents, accounts receivable, prepaid expense and other assets, accounts payable, accrued liabilities, notes payable, deferred compensation, and other liabilities reflected in the accompanying balance sheets approximate fair value at December 31, 2017 and 2016, due to the relatively short-term nature of these instruments. |
Concentrations | Cash and cash equivalents and restricted cash are deposited with major financial institutions, and at times, such balances with any one financial institution may be in excess of FDIC-insured limits. As of December 31, 2017 and 2016, $179,855 and $0 were deposited in excess of FDIC-insured limits. Management believes the risk in these situations to be minimal. |
Loss per Share | The basic loss per share is calculated by dividing our net loss available to common shareholders by the weighted average number of common shares during the period. The diluted loss per share is calculated by dividing our net loss by the diluted weighted average number of shares outstanding during the period. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. We have 134,000 and 16,012,210 shares issuable upon the exercise of warrants and options and 7,056,721 and 205,667 shares issuable upon the conversion of the green energy bonds and convertible notes that were not included in the computation of dilutive loss per share because their inclusion is antidilutive for the years ended December 31, 2017 and 2016, respectively. |
Revenue Recognition | We will recognize revenue on arrangements in accordance with FASB ASC Topic 605, “ Revenue Recognition |
Recent Accounting Pronouncements | In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. We have reviewed all recently issued, but not yet adopted, accounting standards in order to determine their effects, if any, on our consolidated results of operations, financial position, and cash flows. Based on that review, we believe that none of these pronouncements will have a significant effect on current or future earnings or operations. |
Organization and Summary of S_3
Organization and Summary of Significant Accounting Policies (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Accounting Policies [Abstract] | ||
Subsidiaries | Name Place of Incorporation / Establishment Principal Activities Date Formed Ocean Thermal Energy Bahamas Ltd. Bahamas Intermediate holding company of OTE BM Ltd. and OTE Bahamas O&M Ltd. 07/04/2011 OTE BM Ltd. Bahamas OTEC/SDC development in the Bahamas 09/07/2011 OCEES International Inc. Hawaii, USA Research and development for the Pacific Rim 01/21/1998 Ocean Thermal Energy UK Limited England and Wales Dormant 07/22/2010 OTEC Innovation Group Inc. Delaware, USA Dormant 06/02/2011 OTE-BM Energy Partners LLC Delaware, USA Dormant 06/02/2011 OTE Bahamas O&M Ltd. Bahamas Dormant 09/07/2011 Ocean Thermal Energy Holdings Ltd. Bahamas Dormant 03/05/2012 Ocean Thermal Energy Cayman Ltd. Caymans Dormant 03/26/2013 OTE HC Ltd. Caymans Dormant 03/26/2013 Ocean Thermal Energy USVI, Inc. Virgin Islands Dormant 07/12/2016 | |
Business segments | September 30, 2018 Headquarters US Territories Other Total Revenue $ - $ - $ - $ - Assets $ 39,016 $ 757,738 $ 164,901 $ 961,655 Net Loss $ (3,285,410 ) $ - $ - $ (3,285,410 ) Property and equipment $ 842 $ - $ - $ 842 Capitalized construction in process $ - $ 757,738 $ 164,901 $ 922,639 Depreciation $ 510 $ - $ - $ 510 Additions to capitalized construction in process $ - $ 30,000 $ - $ 30,000 September 30, 2017 Headquarters US Territories Other Total Revenue $ - $ - $ - $ - Assets $ 24,701 $ 870,140 $ 48,998 $ 943,839 Net loss $ (10,614,118 ) $ - $ - $ (10,614,118 ) Property and equipment $ 1,522 $ - $ - $ 1,522 Capitalized construction in process $ - $ 870,140 $ 48,998 $ 919,138 Depreciation $ 844 $ - $ - $ 844 Additions to capitalized construction in process $ - $ 72,853 $ - $ 72,853 | December 31, 2017 Headquarters US Territories Bahamas Other Total Revenue $ - $ - $ - $ - $ - Assets 451,367 892,639 - 1,344,006 Net loss (14,591,675 ) - - - (14,591,675 ) Property and equipment 1,352 - - - 1,352 Assets under construction 892,639 - 892,639 Depreciation 1,014 - - - 1,014 Additions to assets under construction - 95,352 - - 95,352 December 31, 2016 Headquarters US Territories Bahamas Other Total Revenue $ - $ - $ - $ - $ - Assets 40,410 797,287 - 48,998 886,695 Net Loss (5,837,007 ) - (271,110 ) - (6,108,117 ) Property and equipment 2,366 - - - 2,366 Capitalized construction in process 797,287 - 48,998 846,285 Depreciation 4,207 - - - 4,207 Additions to assets under construction - 119,722 - - 119,722 |
Estimated useful lives | Years Computer Equipment 3 Software 5 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property and Equipment | |
Schedule of property plant and equipment | Property & Equipment as of December 31, 2017 Estimated Accumulated Net Book Useful Life Cost Depreciation Value Life Computer & Office Equipment $ 13,751 12,399 $ 1,352 3 Years Software (Video System) 19,061 19,061 - 5 Years Construction in Process 892,639 892,639 $ 925,451 31,460 $ 893,991 Property and equipment consist of the following at December 31, 2016: Property & Equipment as of December 31, 2016 Estimated Accumulated Net Book Useful Life Cost Depreciation Value Life Computer & Office Equipment $ 13,751 11,385 $ 2,366 3 Years Software (Video System) 19,061 19,061 - 5 Years Construction in Process 846,285 846,285 $ 879,097 30,446 $ 848,651 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Reconciliation of income tax expense | For the Years Ended December 31 2017 2016 Statutory rate applied to loss before income taxes $ (5,903,355 ) $ (2,479,492 ) Increase (decrease) in income taxes results from: Nondeductible permanent differences 4,446,014 1,251,476 Change in tax rate estimates 3,566,781 - Change in valuation allowance (2,109,440 ) 1,228,016 Income tax expense (benefit) $ - $ - |
Schedule of deferred income taxes | For the Years Ended December 31 Deferred tax assets 2017 2016 Depreciation and impairment $ 2,100,958 $ 2,931,956 Operating loss carryforwards 6,705,907 7,984,349 Gross deferred tax assets 8,806,865 10,916,305 Valuation allowance (8,806,865 ) (10,916,305 ) Net deferred income tax asset $ - $ - |
Business Segments (Tables)
Business Segments (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Segment Reporting [Abstract] | ||
Schedule of Segment Reporting Information, by Segment | September 30, 2018 Headquarters US Territories Other Total Revenue $ - $ - $ - $ - Assets $ 39,016 $ 757,738 $ 164,901 $ 961,655 Net Loss $ (3,285,410 ) $ - $ - $ (3,285,410 ) Property and equipment $ 842 $ - $ - $ 842 Capitalized construction in process $ - $ 757,738 $ 164,901 $ 922,639 Depreciation $ 510 $ - $ - $ 510 Additions to capitalized construction in process $ - $ 30,000 $ - $ 30,000 September 30, 2017 Headquarters US Territories Other Total Revenue $ - $ - $ - $ - Assets $ 24,701 $ 870,140 $ 48,998 $ 943,839 Net loss $ (10,614,118 ) $ - $ - $ (10,614,118 ) Property and equipment $ 1,522 $ - $ - $ 1,522 Capitalized construction in process $ - $ 870,140 $ 48,998 $ 919,138 Depreciation $ 844 $ - $ - $ 844 Additions to capitalized construction in process $ - $ 72,853 $ - $ 72,853 | December 31, 2017 Headquarters US Territories Bahamas Other Total Revenue $ - $ - $ - $ - $ - Assets 451,367 892,639 - 1,344,006 Net loss (14,591,675 ) - - - (14,591,675 ) Property and equipment 1,352 - - - 1,352 Assets under construction 892,639 - 892,639 Depreciation 1,014 - - - 1,014 Additions to assets under construction - 95,352 - - 95,352 December 31, 2016 Headquarters US Territories Bahamas Other Total Revenue $ - $ - $ - $ - $ - Assets 40,410 797,287 - 48,998 886,695 Net Loss (5,837,007 ) - (271,110 ) - (6,108,117 ) Property and equipment 2,366 - - - 2,366 Capitalized construction in process 797,287 - 48,998 846,285 Depreciation 4,207 - - - 4,207 Additions to assets under construction - 119,722 - - 119,722 |
Convertible notes and notes p_2
Convertible notes and notes payable (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Debt Disclosure [Abstract] | ||
Schedule of Convertible Note and Notes Payable | The following convertible notes and notes payable were outstanding at September 30, 2018: Related Party Non Related Party Issuance Date Maturity Date Interest Rate In Default Original Principal Principal at September 30, 2018 Debt Discount at September 30, 2018 Carrying Amount at September 30, 2018 Current Long-Term Current Long-Term 12/12/2006 1/5/2013 6.25 % Yes 58,670 8,392 — 8,392 — — 8,392 — 12/1/2007 9/1/2015 7.00 % Yes 125,000 85,821 — 85,821 — — 85,821 — 9/25/2009 10/25/2011 5.00 % Yes 50,000 50,000 — 50,000 — — 50,000 — 12/23/2009 12/23/2014 7.00 % Yes 100,000 94,480 — 94,480 — — 94,480 — 12/23/2009 12/23/2014 7.00 % Yes 25,000 23,619 — 23,619 — — 23,619 — 12/23/2009 12/23/2014 7.00 % Yes 25,000 23,620 — 23,620 — — 23,620 — 02/03/12 12/31/18 10.00 % No 1,000,000 1,000,000 — 1,000,000 1,000,000 — — — 08/15/13 10/31/23 10.00 % No 525,000 158,334 — 158,334 — — — 158,334 12/31/13 12/31/15 8.00 % Yes 290,000 130,000 — 130,000 130,000 — — — 04/01/14 12/31/18 10.00 % No 2,265,000 1,102,500 — 1,102,500 1,102,500 — — — 12/22/14 03/31/15 12.00 % Yes 200,000 200,000 — 200,000 — — 200,000 — 12/26/14 12/26/15 12.00 % Yes 100,000 100,000 — 100,000 — — 100,000 — 3/12/2015 (1 ) 6.00 % No 394,380 394,380 — 394,380 394,380 — — — 4/7/15 04/17/18 10.00 % No 50,000 50,000 — 50,000 — — 50,000 — 11/23/2015 (1 ) 6.00 % No 50,000 50,000 26,667 23,333 23,333 — — — 2/25/2016 (1 ) 6.00 % No 50,000 50,000 — 50,000 50,000 — — — 5/20/2016 (1 ) 6.00 % No 50,000 50,000 — 50,000 50,000 — — — 10/20/2016 (1 ) 6.00 % No 50,000 12,500 — 12,500 12,500 — — — 10/20/2016 (1 ) 6.00 % No 12,500 12,500 6,667 5,833 5,833 — — — 12/21/2016 (1 ) 6.00 % No 25,000 25,000 13,333 11,667 11,667 — — — 3/9/2017 (1 ) 10.00 % No 200,000 177,000 — 177,000 177,000 — — — 7/13/2017 7/13/2019 6.00 % No 25,000 25,000 — 25,000 — 25,000 7/18/2017 7/18/2019 6.00 % No 25,000 25,000 — 25,000 — 25,000 7/26/2017 7/26/2019 6.00 % No 15,000 15,000 — 15,000 — 15,000 7/27/2017 7/27/2019 6.00 % No 15,000 15,000 — 15,000 — 15,000 12/20/2017 (2 ) 10.00 % Yes** 979,156 979,156 46,735 932,421 — 932,421 11/6/2017 (3 ) 10.00 % No 646,568 612,193 — 612,193 612,193 — — — 2/19/2018 (4 ) 8.00 % Yes** 464,032 464,032 364,709 99,323 — 99,323 — 5/24/2018 12/24/2018 12.00 % No 281,250 281,250 69,146 212,104 — 212,104 — 9/19/2018 9/28/2021 6.00 % No 10,000 10,000 — 10,000 10,000 Totals $ 6,224,777 $ 527,257 $ 5,697,520 $ 3,569,406 $ — $ 1,959,780 $ 168,334 (1) Maturity date is 90 days after demand. (2) Note payables were issued on various dates between December 2017 and May 2018. Principal is due on the earlier of 18 months from the anniversary date or the completion of L2 financing with a gross proceeds of a minimum of $1.5 million. (3) Principal and accrued interest will be due and payable at the earliest of A). resolution of Memphis litigation; B). December 31, 2018 , or C). when OTE is able to pay. (4) Note payables were issued on various dates between February and May 2018 and are due in 6 months from issuance date. ** Partially in default as of September 30, 2018 The following convertible notes and notes payable were outstanding at December 31, 2017: Related Party Non Related Party Issuance Date Maturity Date Interest Rate In Default Original Principal Principal at December 31, 2017 Debt Discount at December 31, 2017 Carrying Amount at December 31, 2017 Current Long-Term Current Long-Term 12/12/2006 1/5/2013 6.25 % Yes 58,670 12,272 — 12,272 — — 12,272 — 12/1/2007 9/1/2015 7.00 % Yes 125,000 85,821 — 85,821 — — 85,821 — 9/25/2009 10/25/2011 5.00 % Yes 50,000 50,000 — 50,000 — — 50,000 — 12/23/2009 12/23/2014 7.00 % Yes 100,000 94,480 — 94,480 — — 94,480 — 12/23/2009 12/23/2014 7.00 % Yes 25,000 23,619 — 23,619 — — 23,619 — 12/23/2009 12/23/2014 7.00 % Yes 25,000 23,620 — 23,620 — — 23,620 — 02/03/12 12/31/18 10.00 % No 1,000,000 1,000,000 — 1,000,000 1,000,000 — — — 08/15/13 10/31/23 10.00 % No 525,000 158,334 — 158,334 — — 158,334 12/31/13 12/31/15 8.00 % Yes 290,000 130,000 — 130,000 130,000 — — — 04/01/14 12/31/18 10.00 % No 2,265,000 1,137,500 — 1,137,500 1,137,500 — — — 12/22/14 03/31/15 12.00 % Yes 200,000 200,000 — 200,000 — — 200,000 — 12/26/14 12/26/15 12.00 % Yes 100,000 100,000 — 100,000 — — 100,000 — 3/12/2015 (1 ) 6.00 % No 394,380 394,380 — 394,380 394,380 — — — 4/7/15 04/17/18 10.00 % No 50,000 50,000 — 50,000 — — 50,000 11/23/2015 (1 ) 6.00 % No 50,000 50,000 — 50,000 50,000 — — — 2/25/2016 (1 ) 6.00 % No 50,000 50,000 — 50,000 50,000 — — — 5/20/2016 (1 ) 6.00 % No 50,000 50,000 — 50,000 50,000 — — — 10/20/2016 (1 ) 6.00 % No 50,000 12,500 — 12,500 12,500 — — — 10/20/2016 (1 ) 6.00 % No 12,500 12,500 — 12,500 12,500 — — — 12/21/2016 (1 ) 6.00 % No 25,000 25,000 — 25,000 25,000 — — — 3/9/2017 (1 ) 10.00 % No 200,000 177,000 — 177,000 177,000 — — — 7/13/2017 7/13/2019 6.00 % No 25,000 25,000 — 25,000 — — — 25,000 7/18/2017 7/18/2019 6.00 % No 25,000 25,000 — 25,000 — — — 25,000 7/26/2017 7/26/2019 6.00 % No 15,000 15,000 — 15,000 — — — 15,000 7/27/2017 7/27/2019 6.00 % No 15,000 15,000 — 15,000 — — — 15,000 12/20/2017 (2 ) 10.00 % No 490,000 490,000 41,044 448,956 — — — 448,956 11/6/2017 (3 ) 10.00 % No 646,568 641,568 — 641,568 641,568 — — — Totals $ 5,048,594 $ 41,044 $ 5,007,550 $ 3,680,448 $ — $ 639,812 $ 687,290 (1) Maturity date is 90 days after demand. (2) Note payables were issued on various dates between December 2017 and May 2018. Principal is due on the earlier of 18 months from the anniversary date or the completion of L2 financing with a gross proceeds of a minimum of $1.5 million. (3) Principal and accrued interest will be due and payable at the earliest of A). resolution of Memphis litigation; B). December 31, 2018 , or C). when OTE is able to pay. | The following convertible note and notes payable were outstanding at December 31, 2017: Related Party Non Related Party Date of Issuance Maturity Date Interest Rate In Default Original Principal Principal at December 31, 2017 Discount at December 31 2017 Carrying Amount at December 31, 2017 Current Long-Term Current Long-Term 12/12/2006 1/5/2013 6.25 % Yes 58,670 12,272 - 12,272 - - 12,272 12/1/2007 9/1/2015 7.00 % Yes 125,000 85,821 - 85,821 - - 85,821 - 9/25/2009 10/25/2011 5.00 % Yes 50,000 50,000 - 50,000 - - 50,000 - 12/23/2009 12/23/2014 7.00 % Yes 100,000 94,480 - 94,480 - - 94,480 - 12/23/2009 12/23/2014 7.00 % Yes 25,000 23,619 - 23,619 - - 23,619 - 12/23/2009 12/23/2014 7.00 % Yes 25,000 23,620 - 23,620 - - 23,620 - 02/03/12 12/31/18 10.00 % No 1,000,000 1,000,000 - 1,000,000 1,000,000 - - - 08/15/13 10/31/23 10.00 % No 525,000 158,334 - 158,334 - - 158,334 12/31/13 12/31/15 8.00 % Yes 290,000 130,000 - 130,000 130,000 - - - 04/01/14 12/31/18 10.00 % No 2,265,000 1,137,500 - 1,137,500 1,137,500 - - - 12/22/14 03/31/15 12.00 % Yes 200,000 200,000 - 200,000 - - 200,000 - 12/26/14 12/26/15 12.00 % Yes 100,000 100,000 - 100,000 - - 100,000 - 3/12/2015 90 days after demand 6.00 % No 394,380 394,380 - 394,380 394,380 - - - 4/7/15 04/17/18 10.00 % No 50,000 50,000 - 50,000 - - 50,000 11/23/2015 90 days after demand 6.00 % No 50,000 50,000 - 50,000 50,000 - - - 2/25/2016 90 days after demand 6.00 % No 50,000 50,000 - 50,000 50,000 - - - 5/20/2016 90 days after demand 6.00 % No 50,000 50,000 - 50,000 50,000 - - - 10/20/2016 90 days after demand 6.00 % No 50,000 12,500 - 12,500 12,500 - - - 10/20/2016 90 days after demand 6.00 % No 12,500 12,500 - 12,500 12,500 - - - 12/21/2016 90 days after demand 6.00 % No 25,000 25,000 - 25,000 25,000 - - - 3/9/2017 90 days after demand 10.00 % No 200,000 177,000 - 177,000 177,000 - - - 7/13/2017 7/13/2019 6.00 % No 25,000 25,000 - 25,000 - - - 25,000 7/18/2017 7/18/2019 6.00 % No 25,000 25,000 - 25,000 - - - 25,000 7/26/2017 7/26/2019 6.00 % No 15,000 15,000 - 15,000 - - - 15,000 7/27/2017 7/27/2019 6.00 % No 15,000 15,000 - 15,000 - - - 15,000 12/20/2017 7/30/2019 10.00 % No 50,000 50,000 4,340 45,660 - - - 45,660 12/20/2017 7/30/2019 10.00 % No 10,000 10,000 620 9,380 - - - 9,380 12/21/2017 7/30/2019 10.00 % No 50,000 50,000 4,284 45,716 - - - 45,716 12/27/2017 7/30/2019 10.00 % No 10,000 10,000 600 9,400 - - - 9,400 12/27/2017 7/30/2019 10.00 % No 10,000 10,000 600 9,400 - - - 9,400 12/28/2017 7/30/2019 10.00 % No 250,000 250,000 21,000 229,000 - - - 229,000 12/29/2017 7/30/2019 10.00 % No 100,000 100,000 8,960 91,040 - - - 91,040 12/29/2017 7/30/2019 10.00 % No 10,000 10,000 640 9,360 - - - 9,360 11/6/2017 * See note below 10.00 % No 646,568 641,568 - 641,568 641,568 - - - Totals $ 5,048,594 $ 41,044 $ 5,007,550 $ 3,680,448 $ - $ 63 9,812 $ 687,290 * Note - Principle and accrued interest will be due and payable at the earliest of A). resolution of Memphis litigation (see note 9); B). June 30, 2018, or C). when OTE is able to pay The following convertible notes and notes payable were outstanding at December 31, 2016: Related Party Non Related Party Date of Issuance Maturity Date Interest Rate Original Principal Principal at December 31, 2016 Discount at December 31, 2016 Carrying Amount at December 31, 2016 Current Long-Term Current Long-Term 02/03/12 02/03/18 10.00 % 1,000,000 1,000,000 - 1,000,000 - 1,000,000 - - 08/15/13 10/31/23 10.00 % 525,000 525,000 44,089 480,911 - 45,644 - 435,267 12/31/13 12/31/15 8.00 % 290,000 130,000 - 130,000 130,000 - - - 04/01/14 12/31/17 10.00 % 2,265,000 1,756,000 - 1,756,000 1,756,000 - - - 04/16/14 04/30/19 9.86 % 6,000 6,000 - 6,000 - - - 6,000 05/09/14 04/30/19 9.86 % 50,400 50,400 - 50,400 - - - 50,400 05/28/14 04/30/19 9.86 % 25,200 25,200 - 25,200 - - - 25,200 07/21/14 12/31/19 9.86 % 78,000 78,000 - 78,000 - - - 78,000 08/18/14 12/31/19 7.86 % 7,200 7,200 - 7,200 - - - 7,200 12/22/14 03/31/15 12.00 % 200,000 200,000 - 200,000 - - 200,000 - 12/26/14 12/26/15 12.00 % 100,000 100,000 - 100,000 - - 100,000 - 04/07/15 04/17/17 10.00 % 50,000 50,000 871 49,129 - - 49,129 - Totals $ 4,596,800 $ 3,927,800 $ 44,960 $ 3,882,840 $ 1,886,000 $ 1,045,644 $ 349,129 $ 602,067 |
Derivative Liability (Tables)
Derivative Liability (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Derivative Liability Tables Abstract | |
Fair value hierarchy | Quoted prices in Significant active markets for other Significant Fair value at identical assets/ observable unobservable September 30, liabilities inputs inputs 2018 (Level 1) (Level 2) (Level 3) Derivative Liability $ 705,278 $ - $ - $ 705,278 |
Changes in fair value financial liabilities | Derivative Liability Derivative liability as of December 31, 2017 $ - Fair value at the commitment date for convertible instruments 1,093,095 Change in fair value of derivative liability (374,447 ) Reclassification to additional paid-in capital for financial instruments that ceased to be a derivative liability (13,370 ) Derivative liability as of September 30, 2018 $ 705,278 Change in Fair Value of Derivative Liability* Change in fair value of derivative liability at the beginning of period $ - Day one gains/(losses) on valuation 446,512 Gains/(losses) from the change in fair value of derivative liability (374,447 ) Change in fair value of derivative liability at the end of period $ 72,065 _________________ |
Assumptions | Commitment Date Remeasurement Date** Expected dividends 0% 0% Expected volatility 81% to 499% 87% to 502% Risk free interest rate 2.05% to 2.96% 2.19% to 2.94% Expected term (in years) 0.25 to 5.0 0.23 to 4.98 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Table Text Block Supplement [Abstract] | ||
Assumptions used | Expected volatility: 77% Expected lives: Various (30 days – 7 years) Risk-free interest rate: Various (0.50%-2.27%) Expected dividend yield: None We used the following assumptions for options during the year ended December 31, 2017: Expected volatility: 485% Expected lives: 3 years Risk-free interest rate: 1.98% - 2.01% Expected dividend yield: None We used the following assumptions for options during the year ended December 31, 2016: Expected volatility: 61% Expected lives: Less than 1 Year Risk-free interest rate: 0.62% Expected dividend yield: None | |
Schedule of Warrants | Number of Weighted Average Warrants Warrants Exercise Price Balance at December 31, 2017 134,000 $ 0.27 Granted 238,573 $ 0.22 Exercised (39,000 ) $ 0.24 Forfeited - Balance at September 30, 2018 333,573 $ 0.19 | Warrants Number of Warrants Weighted Average Exercise Price Balance at December 31, 2015 22,227,876 $ 0.64 Granted 3,520,000 $ 0.25 Exercised (9,835,666 ) $ 0.31 Forfeited - - Balance at December 31, 2016 15,912,210 $ 0.76 Granted 134,000 * Exercised (998,079 ) $ 0.75 Exercised (re-priced to $0.00) (14,692,500 ) $ 0.00 Forfeited (221,631 ) Balance at December 31, 2017 134,000 $ 0.27 Exercisable December 31, 2017 134,000 $ 0.27 |
Schedule of Stock Options | Number of Weighted Average Options Exercise Price Balance at December 31, 2015 100,000 $ 0.75 Granted - - Exercised - - Forfeited - - Balance at December 31, 2016 100,000 $ 0.75 Granted - Exercised (100,000 ) $ 0.75 Forfeited - Balance at December 31, 2017 - Exercisable December 31, 2017 - |
Organization and Summary of S_4
Organization and Summary of Significant Accounting Policies (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Ocean Thermal Energy Bahamas Ltd. | |
Place of Incorporation / Establishment | Bahamas |
Principal Activities | Intermediate holding company of OTE BM Ltd. and OTE Bahamas O&M Ltd. |
Date Formed | Jul. 4, 2011 |
OTE BM Ltd. | |
Place of Incorporation / Establishment | Bahamas |
Principal Activities | OTEC/SDC development in the Bahamas |
Date Formed | Sep. 7, 2011 |
OCEES International Inc. | |
Place of Incorporation / Establishment | Hawaii, USA |
Principal Activities | Research and development for the Pacific Rim |
Date Formed | Jan. 21, 1998 |
Ocean Thermal Energy UK Limited | |
Place of Incorporation / Establishment | England and Wales |
Principal Activities | Dormant |
Date Formed | Jul. 22, 2010 |
OTEC Innovation Group Inc. | |
Place of Incorporation / Establishment | Delaware, USA |
Principal Activities | Dormant |
Date Formed | Jun. 2, 2011 |
OTE-BM Energy Partners LLC | |
Place of Incorporation / Establishment | Delaware, USA |
Principal Activities | Dormant |
Date Formed | Jun. 2, 2011 |
OTE Bahamas O&M Ltd. | |
Place of Incorporation / Establishment | Bahamas |
Principal Activities | Dormant |
Date Formed | Sep. 7, 2011 |
Ocean Thermal Energy Holdings Ltd. | |
Place of Incorporation / Establishment | Bahamas |
Principal Activities | Dormant |
Date Formed | Mar. 5, 2012 |
Ocean Thermal Energy Cayman Ltd. | |
Place of Incorporation / Establishment | Caymans |
Principal Activities | Dormant |
Date Formed | Mar. 26, 2013 |
OTE HC Ltd. | |
Place of Incorporation / Establishment | Caymans |
Principal Activities | Dormant |
Date Formed | Mar. 26, 2013 |
Ocean Thermal Energy USVI, Inc. | |
Place of Incorporation / Establishment | Virgin Islands |
Principal Activities | Dormant |
Date Formed | Jul. 12, 2016 |
Organization and Summary of S_5
Organization and Summary of Significant Accounting Policies (Details 1) - USD ($) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenue | $ 0 | $ 0 | $ 0 | $ 0 |
Assets | 961,655 | 943,839 | 1,344,006 | 886,695 |
Net loss | (3,285,410) | (10,614,118) | (14,591,675) | (6,108,117) |
Property and equipment | 842 | 1,522 | 1,352 | 2,366 |
Assets under construction | 922,639 | 919,138 | 892,639 | 846,285 |
Depreciation | 510 | 844 | 1,014 | 4,207 |
Additions to assets under construction | 95,352 | 119,722 | ||
Headquarters [Member] | ||||
Revenue | 0 | 0 | 0 | 0 |
Assets | 39,016 | 24,701 | 451,367 | 40,410 |
Net loss | (3,285,410) | (10,614,118) | (14,591,675) | (5,837,007) |
Property and equipment | 842 | 1,522 | 1,352 | 2,366 |
Assets under construction | 0 | 0 | 0 | 0 |
Depreciation | 510 | 844 | 1,014 | 4,207 |
Additions to assets under construction | 0 | 0 | ||
US Territories [Member] | ||||
Revenue | 0 | 0 | 0 | 0 |
Assets | 757,738 | 870,140 | 892,639 | 797,287 |
Net loss | 0 | 0 | 0 | 0 |
Property and equipment | 0 | 0 | 0 | 0 |
Assets under construction | 757,738 | 870,140 | 892,639 | 797,287 |
Depreciation | 0 | 0 | 0 | 0 |
Additions to assets under construction | 95,352 | 119,722 | ||
Bahamas [Member] | ||||
Revenue | 0 | 0 | ||
Assets | 0 | 0 | ||
Net loss | 0 | (271,110) | ||
Property and equipment | 0 | 0 | ||
Assets under construction | 0 | 0 | ||
Depreciation | 0 | 0 | ||
Additions to assets under construction | 0 | 0 | ||
Other [Member] | ||||
Revenue | 0 | 0 | 0 | 0 |
Assets | 164,901 | 48,998 | 0 | 48,998 |
Net loss | 0 | 0 | 0 | 0 |
Property and equipment | 0 | 0 | 0 | 0 |
Assets under construction | 164,901 | 48,998 | 0 | 48,998 |
Depreciation | $ 0 | $ 0 | 0 | 0 |
Additions to assets under construction | $ 0 | $ 0 |
Organization and Summary of S_6
Organization and Summary of Significant Accounting Policies (Details 2) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Computer Equipment | ||
Estimated useful lives | 3 years | |
Software | ||
Estimated useful lives | 5 years | 5 years |
Organization and Summary of S_7
Organization and Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Net loss | $ (3,285,410) | $ (10,614,118) | $ (14,591,675) | $ (6,108,117) | |
Net cash used in operating activities | (1,469,169) | (2,057,879) | |||
Working capital | (14,213,930) | ||||
Stockholders' deficiency | (13,458,783) | (10,509,554) | (8,664,237) | $ (8,198,768) | |
Depreciation expense | $ 510 | $ 844 | $ 1,014 | $ 4,207 | |
Antidilutive shares excluded from EPS calculation | 7,056,721 | 205,667 | |||
2016 Long-Term Incentive Plan [Member] | |||||
Stock authorized to be issued under plan | 134,000 | 16,012,210 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2018 | Sep. 30, 2017 | |
Cost | $ 925,451 | $ 879,097 | ||
Accumulated Depreciation | 31,460 | 30,446 | ||
Construction in Process | 892,639 | 846,285 | $ 922,639 | $ 919,138 |
Net Book Value | 1,352 | 2,366 | $ 842 | $ 1,522 |
Computer & Office Equipment | ||||
Cost | 13,751 | 13,751 | ||
Accumulated Depreciation | 12,399 | 11,385 | ||
Construction in Process | 0 | 0 | ||
Net Book Value | $ 1,352 | $ 2,366 | ||
Estimated Useful Life | 3 years | 3 years | ||
Software | ||||
Cost | $ 19,061 | $ 19,061 | ||
Accumulated Depreciation | 19,061 | 19,061 | ||
Construction in Process | 0 | 0 | ||
Net Book Value | $ 0 | $ 0 | ||
Estimated Useful Life | 5 years | 5 years | ||
Construction in Process | ||||
Cost | $ 892,639 | $ 846,285 | ||
Accumulated Depreciation | 0 | 0 | ||
Construction in Process | 892,639 | 846,285 | ||
Net Book Value | $ 0 | $ 0 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | ||||||
Statutory rate applied to loss before income taxes | $ (5,903,355) | $ (2,479,492) | ||||
Nondeductible permanent differences | 4,446,014 | 1,251,476 | ||||
Change in tax rate estimates | 3,566,781 | 0 | ||||
Change in valuation allowance | (2,109,440) | 1,228,016 | ||||
Income tax expense (benefit) | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Income Tax Disclosure [Abstract] | ||
Depreciation and impairment | $ 2,100,958 | $ 2,931,956 |
Operating loss carryforwards | 6,705,907 | 7,984,349 |
Gross deferred tax assets | 8,806,865 | 10,916,305 |
Valuation allowance | (8,806,865) | (10,916,305) |
Net deferred income tax asset | $ 0 | $ 0 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | ||||||
Income Tax Expense (Benefit) | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 |
Going Concern (Details Narrativ
Going Concern (Details Narrative) - USD ($) | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||
Net loss | $ (3,285,410) | $ (10,614,118) | $ (14,591,675) | $ (6,108,117) | |
Net Cash Used In Operating Activities | (1,553,488) | $ (1,086,784) | (1,469,169) | (2,057,879) | |
Working capital (deficit) | (14,213,930) | ||||
Total Stockholders' Deficiency | $ (13,458,783) | $ (10,509,554) | $ (8,664,237) | $ (8,198,768) |
Net Loss Per Common Share (Deta
Net Loss Per Common Share (Details Narrative) - shares | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 7,056,721 | 205,667 | ||
Warrants and Options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 333,573 | 0 | ||
Green Energy Bonds and Notes | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 20,798,618 | 7,576,778 |
Business Segments (Details)
Business Segments (Details) - USD ($) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenue | $ 0 | $ 0 | $ 0 | $ 0 |
Assets | 961,655 | 943,839 | 1,344,006 | 886,695 |
Net Loss | (3,285,410) | (10,614,118) | (14,591,675) | (6,108,117) |
Property and equipment | 842 | 1,522 | 1,352 | 2,366 |
Capitalized construction in process | 922,639 | 919,138 | 892,639 | 846,285 |
Depreciation | 510 | 844 | 1,014 | 4,207 |
Additions to capitalized construction in process | 30,000 | 72,853 | ||
Headquarters [Member] | ||||
Revenue | 0 | 0 | 0 | 0 |
Assets | 39,016 | 24,701 | 451,367 | 40,410 |
Net Loss | (3,285,410) | (10,614,118) | (14,591,675) | (5,837,007) |
Property and equipment | 842 | 1,522 | 1,352 | 2,366 |
Capitalized construction in process | 0 | 0 | 0 | 0 |
Depreciation | 510 | 844 | 1,014 | 4,207 |
Additions to capitalized construction in process | 0 | 0 | ||
US Territories [Member] | ||||
Revenue | 0 | 0 | 0 | 0 |
Assets | 757,738 | 870,140 | 892,639 | 797,287 |
Net Loss | 0 | 0 | 0 | 0 |
Property and equipment | 0 | 0 | 0 | 0 |
Capitalized construction in process | 757,738 | 870,140 | 892,639 | 797,287 |
Depreciation | 0 | 0 | 0 | 0 |
Additions to capitalized construction in process | 30,000 | 72,853 | ||
Other [Member] | ||||
Revenue | 0 | 0 | 0 | 0 |
Assets | 164,901 | 48,998 | 0 | 48,998 |
Net Loss | 0 | 0 | 0 | 0 |
Property and equipment | 0 | 0 | 0 | 0 |
Capitalized construction in process | 164,901 | 48,998 | 0 | 48,998 |
Depreciation | 0 | 0 | $ 0 | $ 0 |
Additions to capitalized construction in process | $ 0 | $ 0 |
Convertible Notes and Notes P_3
Convertible Notes and Notes Payable (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Debt original principal | $ 4,596,800 | ||
Debt amount at period end | $ 6,224,777 | $ 5,048,594 | 3,927,800 |
Unamortized discount | 527,257 | 41,044 | 44,960 |
Carrying amount at period end | 5,697,520 | 5,007,550 | 3,882,840 |
Debt related party current | 3,569,406 | 3,680,448 | 1,886,000 |
Debt related party noncurrent | 0 | 0 | 1,045,644 |
Debt current | 1,959,780 | 639,812 | 349,129 |
Debt noncurrent | $ 168,334 | $ 687,290 | $ 602,067 |
Notes payable 1 [Member] | |||
Debt issuance date | Dec. 12, 2006 | Dec. 12, 2006 | |
Debt maturity date | Jan. 5, 2013 | Jan. 5, 2013 | |
Debt stated interest rate | 6.25% | 6.25% | |
Debt original principal | $ 58,670 | $ 58,670 | |
Debt amount at period end | 8,392 | 12,272 | |
Unamortized discount | 0 | 0 | |
Carrying amount at period end | 8,392 | 12,272 | |
Debt related party current | 0 | 0 | |
Debt related party noncurrent | 0 | 0 | |
Debt current | 8,392 | $ 12,272 | |
Debt noncurrent | $ 0 | ||
Notes payable 2 [Member] | |||
Debt issuance date | Dec. 1, 2007 | Dec. 1, 2007 | |
Debt maturity date | Sep. 1, 2015 | Sep. 1, 2015 | |
Debt stated interest rate | 7.00% | 7.00% | |
Debt original principal | $ 125,000 | $ 125,000 | |
Debt amount at period end | 85,821 | 85,821 | |
Unamortized discount | 0 | 0 | |
Carrying amount at period end | 85,821 | 85,821 | |
Debt related party current | 0 | 0 | |
Debt related party noncurrent | 0 | 0 | |
Debt current | 85,821 | 85,821 | |
Debt noncurrent | $ 0 | $ 0 | |
Notes payable 3 [Member] | |||
Debt issuance date | Sep. 25, 2009 | Sep. 25, 2009 | |
Debt maturity date | Oct. 25, 2011 | Oct. 25, 2011 | |
Debt stated interest rate | 5.00% | 5.00% | |
Debt original principal | $ 50,000 | $ 50,000 | |
Debt amount at period end | 50,000 | 50,000 | |
Unamortized discount | 0 | 0 | |
Carrying amount at period end | 50,000 | 50,000 | |
Debt related party current | 0 | 0 | |
Debt related party noncurrent | 0 | 0 | |
Debt current | 50,000 | 50,000 | |
Debt noncurrent | $ 0 | $ 0 | |
Notes payable 4 [Member] | |||
Debt issuance date | Dec. 23, 2009 | Dec. 23, 2009 | |
Debt maturity date | Dec. 23, 2014 | Dec. 23, 2014 | |
Debt stated interest rate | 7.00% | 7.00% | |
Debt original principal | $ 100,000 | $ 100,000 | |
Debt amount at period end | 94,480 | 94,480 | |
Unamortized discount | 0 | 0 | |
Carrying amount at period end | 94,480 | 94,480 | |
Debt related party current | 0 | 0 | |
Debt related party noncurrent | 0 | 0 | |
Debt current | 94,480 | 94,480 | |
Debt noncurrent | $ 0 | $ 0 | |
Notes payable 5 [Member] | |||
Debt issuance date | Dec. 23, 2009 | Dec. 23, 2009 | |
Debt maturity date | Dec. 23, 2014 | Dec. 23, 2014 | |
Debt stated interest rate | 7.00% | 7.00% | |
Debt original principal | $ 25,000 | $ 25,000 | |
Debt amount at period end | 23,619 | 23,619 | |
Unamortized discount | 0 | 0 | |
Carrying amount at period end | 23,619 | 23,619 | |
Debt related party current | 0 | 0 | |
Debt related party noncurrent | 0 | 0 | |
Debt current | 23,619 | 23,619 | |
Debt noncurrent | $ 0 | $ 0 | |
Notes payable 6 [Member] | |||
Debt issuance date | Dec. 23, 2009 | Dec. 23, 2009 | |
Debt maturity date | Dec. 23, 2014 | Dec. 23, 2014 | |
Debt stated interest rate | 7.00% | 7.00% | |
Debt original principal | $ 25,000 | $ 25,000 | |
Debt amount at period end | 23,620 | 23,620 | |
Unamortized discount | 0 | 0 | |
Carrying amount at period end | 23,620 | 23,620 | |
Debt related party current | 0 | 0 | |
Debt related party noncurrent | 0 | 0 | |
Debt current | 23,620 | 23,620 | |
Debt noncurrent | $ 0 | $ 0 | |
Notes payable 7 [Member] | |||
Debt issuance date | Feb. 3, 2012 | Feb. 3, 2012 | Feb. 3, 2012 |
Debt maturity date | Dec. 31, 2018 | Dec. 31, 2018 | Feb. 3, 2018 |
Debt stated interest rate | 10.00% | 10.00% | 10.00% |
Debt original principal | $ 1,000,000 | $ 1,000,000 | $ 1,000,000 |
Debt amount at period end | 1,000,000 | 1,000,000 | 1,000,000 |
Unamortized discount | 0 | 0 | 0 |
Carrying amount at period end | 1,000,000 | 1,000,000 | 1,000,000 |
Debt related party current | 1,000,000 | 1,000,000 | 0 |
Debt related party noncurrent | 0 | 0 | 1,000,000 |
Debt current | 0 | 0 | 0 |
Debt noncurrent | $ 0 | $ 0 | $ 0 |
Notes payable 8 [Member] | |||
Debt issuance date | Aug. 15, 2013 | Aug. 15, 2013 | Aug. 15, 2013 |
Debt maturity date | Oct. 31, 2023 | Oct. 31, 2023 | Oct. 31, 2023 |
Debt stated interest rate | 10.00% | 10.00% | 10.00% |
Debt original principal | $ 525,000 | $ 525,000 | $ 525,000 |
Debt amount at period end | 158,334 | 158,334 | 525,000 |
Unamortized discount | 0 | 0 | 44,089 |
Carrying amount at period end | 158,334 | 158,334 | 480,911 |
Debt related party current | 0 | 0 | 0 |
Debt related party noncurrent | 0 | 0 | 45,644 |
Debt current | 0 | 0 | 0 |
Debt noncurrent | $ 158,334 | $ 158,334 | $ 435,267 |
Notes payable 9 [Member] | |||
Debt issuance date | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 |
Debt maturity date | Dec. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2015 |
Debt stated interest rate | 8.00% | 8.00% | 8.00% |
Debt original principal | $ 290,000 | $ 290,000 | $ 290,000 |
Debt amount at period end | 130,000 | 130,000 | 130,000 |
Unamortized discount | 0 | 0 | 0 |
Carrying amount at period end | 130,000 | 130,000 | 130,000 |
Debt related party current | 130,000 | 130,000 | 130,000 |
Debt related party noncurrent | 0 | 0 | 0 |
Debt current | 0 | 0 | 0 |
Debt noncurrent | $ 0 | $ 0 | $ 0 |
Notes payable 10 [Member] | |||
Debt issuance date | Apr. 1, 2014 | Apr. 1, 2014 | Apr. 1, 2014 |
Debt maturity date | Dec. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 |
Debt stated interest rate | 10.00% | 10.00% | 10.00% |
Debt original principal | $ 2,265,000 | $ 2,265,000 | $ 2,265,000 |
Debt amount at period end | 1,102,500 | 1,137,500 | 1,756,000 |
Unamortized discount | 0 | 0 | 0 |
Carrying amount at period end | 1,102,500 | 1,137,500 | 1,756,000 |
Debt related party current | 1,102,500 | 1,137,500 | 1,756,000 |
Debt related party noncurrent | 0 | 0 | 0 |
Debt current | 0 | 0 | 0 |
Debt noncurrent | $ 0 | $ 0 | $ 0 |
Notes payable 11 [Member] | |||
Debt issuance date | Apr. 16, 2014 | ||
Debt maturity date | Apr. 30, 2019 | ||
Debt stated interest rate | 9.86% | ||
Debt original principal | $ 6,000 | ||
Debt amount at period end | 6,000 | ||
Unamortized discount | 0 | ||
Carrying amount at period end | 6,000 | ||
Debt related party current | 0 | ||
Debt related party noncurrent | 0 | ||
Debt current | 0 | ||
Debt noncurrent | $ 6,000 | ||
Notes payable 12 [Member] | |||
Debt issuance date | May 9, 2014 | ||
Debt maturity date | Apr. 30, 2019 | ||
Debt stated interest rate | 9.86% | ||
Debt original principal | $ 50,400 | ||
Debt amount at period end | 50,400 | ||
Unamortized discount | 0 | ||
Carrying amount at period end | 50,400 | ||
Debt related party current | 0 | ||
Debt related party noncurrent | 0 | ||
Debt current | 0 | ||
Debt noncurrent | $ 50,400 | ||
Notes payable 13 [Member] | |||
Debt issuance date | May 28, 2014 | ||
Debt maturity date | Apr. 30, 2019 | ||
Debt stated interest rate | 9.86% | ||
Debt original principal | $ 25,200 | ||
Debt amount at period end | 25,200 | ||
Unamortized discount | 0 | ||
Carrying amount at period end | 25,200 | ||
Debt related party current | 0 | ||
Debt related party noncurrent | 0 | ||
Debt current | 0 | ||
Debt noncurrent | $ 25,200 | ||
Notes payable 14 [Member] | |||
Debt issuance date | Jul. 21, 2014 | ||
Debt maturity date | Dec. 31, 2019 | ||
Debt stated interest rate | 9.86% | ||
Debt original principal | $ 78,000 | ||
Debt amount at period end | 78,000 | ||
Unamortized discount | 0 | ||
Carrying amount at period end | 78,000 | ||
Debt related party current | 0 | ||
Debt related party noncurrent | 0 | ||
Debt current | 0 | ||
Debt noncurrent | $ 78,000 | ||
Notes payable 15 [Member] | |||
Debt issuance date | Aug. 18, 2014 | ||
Debt maturity date | Dec. 31, 2019 | ||
Debt stated interest rate | 7.86% | ||
Debt original principal | $ 7,200 | ||
Debt amount at period end | 7,200 | ||
Unamortized discount | 0 | ||
Carrying amount at period end | 7,200 | ||
Debt related party current | 0 | ||
Debt related party noncurrent | 0 | ||
Debt current | 0 | ||
Debt noncurrent | $ 7,200 | ||
Notes payable 16 [Member] | |||
Debt issuance date | Dec. 22, 2014 | Dec. 22, 2014 | Dec. 22, 2014 |
Debt maturity date | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 |
Debt stated interest rate | 12.00% | 12.00% | 12.00% |
Debt original principal | $ 200,000 | $ 200,000 | $ 200,000 |
Debt amount at period end | 200,000 | 200,000 | 200,000 |
Unamortized discount | 0 | 0 | 0 |
Carrying amount at period end | 200,000 | 200,000 | 200,000 |
Debt related party current | 0 | 0 | 0 |
Debt related party noncurrent | 0 | 0 | 0 |
Debt current | 200,000 | 200,000 | 200,000 |
Debt noncurrent | $ 0 | $ 0 | $ 0 |
Notes payable 17 [Member] | |||
Debt issuance date | Dec. 26, 2014 | Dec. 26, 2014 | Dec. 26, 2014 |
Debt maturity date | Dec. 26, 2015 | Dec. 26, 2015 | Dec. 26, 2015 |
Debt stated interest rate | 12.00% | 12.00% | 12.00% |
Debt original principal | $ 100,000 | $ 100,000 | $ 100,000 |
Debt amount at period end | 100,000 | 100,000 | 100,000 |
Unamortized discount | 0 | 0 | 0 |
Carrying amount at period end | 100,000 | 100,000 | 100,000 |
Debt related party current | 0 | 0 | 0 |
Debt related party noncurrent | 0 | 0 | 0 |
Debt current | 100,000 | 100,000 | 100,000 |
Debt noncurrent | $ 0 | $ 0 | $ 0 |
Notes payable 18 [Member] | |||
Debt issuance date | Mar. 12, 2015 | Mar. 12, 2015 | |
Debt maturity date | 90 days after demand | 90 days after demand | |
Debt stated interest rate | 6.00% | 6.00% | |
Debt original principal | $ 394,380 | $ 394,380 | |
Debt amount at period end | 394,380 | 394,380 | |
Unamortized discount | 0 | 0 | |
Carrying amount at period end | 394,380 | 394,380 | |
Debt related party current | 394,380 | 394,380 | |
Debt related party noncurrent | 0 | 0 | |
Debt current | 0 | 0 | |
Debt noncurrent | $ 0 | $ 0 | |
Notes payable 19 [Member] | |||
Debt issuance date | Apr. 7, 2015 | ||
Debt maturity date | Apr. 17, 2017 | ||
Debt stated interest rate | 10.00% | ||
Debt original principal | $ 50,000 | ||
Debt amount at period end | 50,000 | ||
Unamortized discount | 871 | ||
Carrying amount at period end | 49,129 | ||
Debt related party current | 0 | ||
Debt related party noncurrent | 0 | ||
Debt current | 49,129 | ||
Debt noncurrent | $ 0 | ||
Notes payable 20 [Member] | |||
Debt issuance date | Apr. 7, 2015 | Apr. 7, 2015 | |
Debt maturity date | Apr. 17, 2018 | Apr. 17, 2018 | |
Debt stated interest rate | 10.00% | 10.00% | |
Debt original principal | $ 50,000 | $ 50,000 | |
Debt amount at period end | 50,000 | 50,000 | |
Unamortized discount | 0 | 0 | |
Carrying amount at period end | 50,000 | 50,000 | |
Debt related party current | 0 | 0 | |
Debt related party noncurrent | 0 | 0 | |
Debt current | 50,000 | 50,000 | |
Debt noncurrent | $ 0 | $ 0 | |
Notes payable 21 [Member] | |||
Debt issuance date | Nov. 23, 2015 | Nov. 23, 2015 | |
Debt maturity date | 90 days after demand | 90 days after demand | |
Debt stated interest rate | 6.00% | 6.00% | |
Debt original principal | $ 50,000 | $ 50,000 | |
Debt amount at period end | 50,000 | 50,000 | |
Unamortized discount | 26,667 | 0 | |
Carrying amount at period end | 23,333 | 50,000 | |
Debt related party current | 23,333 | 50,000 | |
Debt related party noncurrent | 0 | 0 | |
Debt current | 0 | 0 | |
Debt noncurrent | $ 0 | $ 0 | |
Notes payable 22 [Member] | |||
Debt issuance date | Feb. 25, 2016 | Feb. 25, 2016 | |
Debt maturity date | 90 days after demand | 90 days after demand | |
Debt stated interest rate | 6.00% | 6.00% | |
Debt original principal | $ 50,000 | $ 50,000 | |
Debt amount at period end | 50,000 | 50,000 | |
Unamortized discount | 0 | 0 | |
Carrying amount at period end | 50,000 | 50,000 | |
Debt related party current | 50,000 | 50,000 | |
Debt related party noncurrent | 0 | 0 | |
Debt current | 0 | 0 | |
Debt noncurrent | $ 0 | $ 0 | |
Notes payable 23 [Member] | |||
Debt issuance date | May 20, 2016 | May 20, 2016 | |
Debt maturity date | 90 days after demand | 90 days after demand | |
Debt stated interest rate | 6.00% | 6.00% | |
Debt original principal | $ 50,000 | $ 50,000 | |
Debt amount at period end | 50,000 | 50,000 | |
Unamortized discount | 0 | 0 | |
Carrying amount at period end | 50,000 | 50,000 | |
Debt related party current | 50,000 | 50,000 | |
Debt related party noncurrent | 0 | 0 | |
Debt current | 0 | 0 | |
Debt noncurrent | $ 0 | $ 0 | |
Notes payable 24 [Member] | |||
Debt issuance date | Oct. 20, 2016 | Oct. 20, 2016 | |
Debt maturity date | 90 days after demand | 90 days after demand | |
Debt stated interest rate | 6.00% | 6.00% | |
Debt original principal | $ 50,000 | $ 50,000 | |
Debt amount at period end | 12,500 | 12,500 | |
Unamortized discount | 0 | 0 | |
Carrying amount at period end | 12,500 | 12,500 | |
Debt related party current | 12,500 | 12,500 | |
Debt related party noncurrent | 0 | 0 | |
Debt current | 0 | 0 | |
Debt noncurrent | $ 0 | $ 0 | |
Notes payable 25 [Member] | |||
Debt issuance date | Oct. 20, 2016 | Oct. 20, 2016 | |
Debt maturity date | 90 days after demand | 90 days after demand | |
Debt stated interest rate | 6.00% | 6.00% | |
Debt original principal | $ 12,500 | $ 12,500 | |
Debt amount at period end | 12,500 | 12,500 | |
Unamortized discount | 6,667 | 0 | |
Carrying amount at period end | 5,833 | 12,500 | |
Debt related party current | 5,833 | 12,500 | |
Debt related party noncurrent | 0 | 0 | |
Debt current | 0 | 0 | |
Debt noncurrent | $ 0 | $ 0 | |
Notes payable 26 [Member] | |||
Debt issuance date | Dec. 21, 2016 | Dec. 21, 2016 | |
Debt maturity date | 90 days after demand | 90 days after demand | |
Debt stated interest rate | 6.00% | 6.00% | |
Debt original principal | $ 25,000 | $ 25,000 | |
Debt amount at period end | 25,000 | 25,000 | |
Unamortized discount | 13,333 | 0 | |
Carrying amount at period end | 11,667 | 25,000 | |
Debt related party current | 11,667 | 25,000 | |
Debt related party noncurrent | 0 | 0 | |
Debt current | 0 | 0 | |
Debt noncurrent | $ 0 | $ 0 | |
Notes payable 27 [Member] | |||
Debt issuance date | Mar. 9, 2017 | Mar. 9, 2017 | |
Debt maturity date | 90 days after demand | 90 days after demand | |
Debt stated interest rate | 10.00% | 10.00% | |
Debt original principal | $ 200,000 | $ 200,000 | |
Debt amount at period end | 177,000 | 177,000 | |
Unamortized discount | 0 | 0 | |
Carrying amount at period end | 177,000 | 177,000 | |
Debt related party current | 177,000 | 177,000 | |
Debt related party noncurrent | 0 | 0 | |
Debt current | 0 | 0 | |
Debt noncurrent | $ 0 | $ 0 | |
Notes payable 28 [Member] | |||
Debt issuance date | Jul. 13, 2017 | Jul. 13, 2017 | |
Debt maturity date | Jul. 13, 2019 | Jul. 13, 2019 | |
Debt stated interest rate | 6.00% | 6.00% | |
Debt original principal | $ 25,000 | $ 25,000 | |
Debt amount at period end | 25,000 | 25,000 | |
Unamortized discount | 0 | 0 | |
Carrying amount at period end | 25,000 | 25,000 | |
Debt related party current | 0 | 0 | |
Debt related party noncurrent | 0 | 0 | |
Debt current | 25,000 | 0 | |
Debt noncurrent | $ 0 | $ 25,000 | |
Notes payable 29 [Member] | |||
Debt issuance date | Jul. 18, 2017 | Jul. 18, 2017 | |
Debt maturity date | Jul. 18, 2019 | Jul. 18, 2019 | |
Debt stated interest rate | 6.00% | 6.00% | |
Debt original principal | $ 25,000 | $ 25,000 | |
Debt amount at period end | 25,000 | 25,000 | |
Unamortized discount | 0 | 0 | |
Carrying amount at period end | 25,000 | 25,000 | |
Debt related party current | 0 | 0 | |
Debt related party noncurrent | 0 | 0 | |
Debt current | 25,000 | 0 | |
Debt noncurrent | $ 0 | $ 25,000 | |
Notes payable 30 [Member] | |||
Debt issuance date | Jul. 26, 2017 | Jul. 26, 2017 | |
Debt maturity date | Jul. 26, 2019 | Jul. 26, 2019 | |
Debt stated interest rate | 6.00% | 6.00% | |
Debt original principal | $ 15,000 | $ 15,000 | |
Debt amount at period end | 15,000 | 15,000 | |
Unamortized discount | 0 | 0 | |
Carrying amount at period end | 15,000 | 15,000 | |
Debt related party current | 0 | 0 | |
Debt related party noncurrent | 0 | 0 | |
Debt current | 15,000 | 0 | |
Debt noncurrent | $ 0 | $ 15,000 | |
Notes payable 31 [Member] | |||
Debt issuance date | Jul. 27, 2017 | Jul. 27, 2017 | |
Debt maturity date | Jul. 27, 2019 | Jul. 27, 2019 | |
Debt stated interest rate | 6.00% | 6.00% | |
Debt original principal | $ 15,000 | $ 15,000 | |
Debt amount at period end | 15,000 | 15,000 | |
Unamortized discount | 0 | 0 | |
Carrying amount at period end | 15,000 | 15,000 | |
Debt related party current | 0 | 0 | |
Debt related party noncurrent | 0 | 0 | |
Debt current | 15,000 | 0 | |
Debt noncurrent | $ 0 | $ 15,000 | |
Notes payable 32 [Member] | |||
Debt issuance date | Dec. 20, 2017 | Dec. 20, 2017 | |
Debt maturity date | Note payables were issued on various dates between December 2017 and May 2018. Principal is due on the earlier of 18 months from the anniversary date or the completion of L2 financing with a gross proceeds of a minimum of $1.5 million. | Note payables were issued on various dates between December 2017 and May 2018. Principal is due on the earlier of 18 months from the anniversary date or the completion of L2 financing with a gross proceeds of a minimum of $1.5 million. | |
Debt stated interest rate | 10.00% | 10.00% | |
Debt original principal | $ 979,156 | $ 490,000 | |
Debt amount at period end | 979,156 | 490,000 | |
Unamortized discount | 46,735 | 41,044 | |
Carrying amount at period end | 932,421 | 448,956 | |
Debt related party current | 0 | 0 | |
Debt related party noncurrent | 0 | 0 | |
Debt current | 932,421 | 0 | |
Debt noncurrent | $ 0 | $ 448,956 | |
Notes payable 33 [Member] | |||
Debt issuance date | Nov. 6, 2017 | Nov. 6, 2017 | |
Debt maturity date | Principal and accrued interest will be due and payable at the earliest of A). resolution of Memphis litigation; B). December 31, 2018 , or C). when OTE is able to pay. | Principal and accrued interest will be due and payable at the earliest of A). resolution of Memphis litigation; B). December 31, 2018 , or C). when OTE is able to pay. | |
Debt stated interest rate | 10.00% | 10.00% | |
Debt original principal | $ 646,568 | $ 646,568 | |
Debt amount at period end | 612,193 | 641,568 | |
Unamortized discount | 0 | 0 | |
Carrying amount at period end | 612,193 | 641,568 | |
Debt related party current | 612,193 | 641,568 | |
Debt related party noncurrent | 0 | 0 | |
Debt current | 0 | 0 | |
Debt noncurrent | $ 0 | $ 0 | |
Notes payable 34 [Member] | |||
Debt issuance date | Feb. 19, 2018 | ||
Debt maturity date | Note payables were issued on various dates between February and May 2018 and are due in 6 months from issuance date. | ||
Debt stated interest rate | 8.00% | ||
Debt original principal | $ 464,032 | ||
Debt amount at period end | 464,032 | ||
Unamortized discount | 364,709 | ||
Carrying amount at period end | 99,323 | ||
Debt related party current | 0 | ||
Debt related party noncurrent | 0 | ||
Debt current | 99,323 | ||
Debt noncurrent | $ 0 | ||
Notes payable 35 [Member] | |||
Debt issuance date | May 24, 2018 | ||
Debt maturity date | Dec. 24, 2018 | ||
Debt stated interest rate | 12.00% | ||
Debt original principal | $ 281,250 | ||
Debt amount at period end | 281,250 | ||
Unamortized discount | 69,146 | ||
Carrying amount at period end | 212,104 | ||
Debt related party current | 0 | ||
Debt related party noncurrent | 0 | ||
Debt current | 212,104 | ||
Debt noncurrent | $ 0 | ||
Notes payable 36 [Member] | |||
Debt issuance date | Sep. 19, 2018 | ||
Debt maturity date | Sep. 28, 2021 | ||
Debt stated interest rate | 6.00% | ||
Debt original principal | $ 10,000 | ||
Debt amount at period end | 10,000 | ||
Unamortized discount | 0 | ||
Carrying amount at period end | 10,000 | ||
Debt related party current | 0 | ||
Debt related party noncurrent | 0 | ||
Debt current | 0 | ||
Debt noncurrent | $ 10,000 |
Convertible Notes and Notes P_4
Convertible Notes and Notes Payable (Details 1) | Dec. 31, 2017USD ($) |
Debt Disclosure [Abstract] | |
2,018 | $ 4,320,260 |
2,019 | 570,000 |
2,020 | 0 |
2021 and thereafter | 158,334 |
Total | $ 5,048,594 |
Derivative Liability (Details)
Derivative Liability (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Derivative Liability | $ 705,278 | $ 0 | $ 0 |
Fair Value Inputs Level 1 [Member] | |||
Derivative Liability | 0 | ||
Fair Value Inputs Level 2 [Member] | |||
Derivative Liability | 0 | ||
Fair Value Inputs Level 3 [Member] | |||
Derivative Liability | $ 705,278 |
Derivative Liability (Details 1
Derivative Liability (Details 1) | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Derivative Liability Details 1Abstract | |
Derivative liability as of December 31, 2017 | $ 0 |
Fair value at the commitment date for convertible instruments | 1,093,095 |
Change in fair value of derivative liability | (374,447) |
Reclassification to additional paid-in capital for financial instruments that ceased to be a derivative liability | (13,370) |
Derivative liability as of September 30, 2018 | 705,278 |
Change in fair value of derivative liability at the beginning of period | 0 |
Day one gains/(losses) on valuation | 446,512 |
Gains/(losses) from the change in fair value of derivative liability | (374,447) |
Change in fair value of derivative liability at the end of period | $ 72,065 |
Derivative Liability (Details 2
Derivative Liability (Details 2) | 9 Months Ended |
Sep. 30, 2018 | |
Commitment Date | |
Expected dividends | 0.00% |
Commitment Date | Minimum [Member] | |
Expected volatility | 81.00% |
Risk free interest rate | 2.05% |
Expected term (in years) | 3 months |
Commitment Date | Maximum [Member] | |
Expected volatility | 499.00% |
Risk free interest rate | 2.96% |
Expected term (in years) | 5 years |
Remeasurement Date | |
Expected dividends | 0.00% |
Remeasurement Date | Minimum [Member] | |
Expected volatility | 87.00% |
Risk free interest rate | 2.19% |
Expected term (in years) | 2 months 23 days |
Remeasurement Date | Maximum [Member] | |
Expected volatility | 502.00% |
Risk free interest rate | 2.94% |
Expected term (in years) | 4 years 11 months 23 days |
Stockholders' Equity (Details)
Stockholders' Equity (Details) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Common Stock | ||
Expected volatility | 77.00% | |
Expected lives | Various (30 days – 7 years) | |
Risk Free Interest Rate, Minimum | 0.50% | |
Risk Free Interest Rate, Maximum | 2.27% | |
Expected dividend yield | 0.00% | |
Warrants and Options | ||
Expected volatility | 485.00% | 61.00% |
Expected lives | 3 years | Less than 1 year |
Risk Free Interest Rate | 0.62% | |
Risk Free Interest Rate, Minimum | 1.98% | |
Risk Free Interest Rate, Maximum | 2.01% | |
Expected dividend yield | 0.00% | 0.00% |
Stockholders' Equity (Details 1
Stockholders' Equity (Details 1) - $ / shares | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Number of Warrants | |||
Warrants outstanding, beginning balance | 134,000 | ||
Warrants outstanding, ending balance | 134,000 | ||
Warrants [Member] | |||
Number of Warrants | |||
Warrants outstanding, beginning balance | 134,000 | 15,912,210 | 22,227,876 |
Warrants granted | 238,573 | 134,000 | 3,520,000 |
Warrants exercised | (39,000) | (998,079) | (9,835,666) |
Warrants exercised, repriced | (14,692,500) | 0 | |
Warrants forfeited | 0 | (221,631) | 0 |
Warrants outstanding, ending balance | 333,573 | 134,000 | 15,912,210 |
Warrants exercisable, December 31, 2017 | 134,000 | ||
Weighted Average Exercise Price | |||
Warrants outstanding, beginning balance | $ 0.27 | $ 0.76 | $ 0.64 |
Warrants granted | 0.22 | 0.25 | |
Warrants exercised | 0.24 | 0.75 | 0.31 |
Warrants exercised, repriced | 0 | ||
Warrants forfeited | 0 | 0 | 0 |
Warrants outstanding, ending balance | $ 0.19 | $ 0.27 | $ 0.76 |
Stockholders' Equity (Details 2
Stockholders' Equity (Details 2) - $ / shares | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Number of Options | ||
Options outstanding, beginning balance | 100,000 | 100,000 |
Options granted | 0 | 0 |
Options exercised | (100,000) | 0 |
Options forfeited | 0 | 0 |
Options outstanding, ending balance | 0 | 100,000 |
Weighted Average Exercise Price, beginning balance | $ 0.75 | $ 0.75 |
Weighted average exercise price, Exercised | $ 0.75 | |
Options [Member] | ||
Number of Options | ||
Options exercisable, December 31, 2017 | 0 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Disclosure Text Block [Abstract] | ||||
Stock issued for services, shares | 673,345 | |||
Stock issued for services, value | $ 138,986 | $ 2,902,764 | $ 1,018,090 | |
Common stock issued | 125,654,592 | 122,642,247 | 94,343,776 | |
Options outstanding | 0 | 100,000 | 100,000 | |
Warrants outstanding | 134,000 |
Related-party Transactions (Det
Related-party Transactions (Details Narrative) - USD ($) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Repayment of notes payable - related party | $ (64,376) | $ (25,000) | $ (64,432) | $ (5,000) |
Company controlled by the CEO [Member] | ||||
Rent expense | $ 90,000 |