Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Nov. 07, 2019 | |
Document and Entity Information: | ||
Entity Registrant Name | Ocean Thermal Energy Corp | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2019 | |
Amendment Flag | false | |
Entity Central Index Key | 0000827099 | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 134,277,252 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Entity Current Reporting Status | Yes | |
Entity Shell Company | false | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Current Assets | ||
Cash | $ 16,234 | $ 8,398 |
Total Current Assets | 16,234 | 8,398 |
Property and equipment, net | 0 | 672 |
Total Assets | 16,234 | 9,070 |
Current Liabilities | ||
Accounts payables and accrued expense | 10,414,854 | 8,876,222 |
Notes payable - related party, net | 2,382,473 | 2,398,473 |
Convertible notes payable - related party- net | 87,500 | 87,500 |
Notes payable, net | 3,002,195 | 2,671,640 |
Convertible note payable, net | 1,184,477 | 1,283,824 |
Derivative liability | 1,562,687 | 2,292,254 |
Total Current Liabilities | 18,634,186 | 17,609,913 |
Convertible note payable | 26,000 | 0 |
Notes payable, net | 168,334 | 168,334 |
Total Liabilities | 18,828,520 | 17,778,247 |
Stockholders' deficiency | ||
Common stock, $0.001 par value; 200,000,000 shares authorized, 134,277,252 and 131,038,944 shares issued and outstanding, respectively | 134,277 | 131,039 |
Additional paid-in capital | 58,249,669 | 57,683,015 |
Accumulated deficit | (77,199,051) | (75,583,231) |
Total Stockholders' Deficiency | (18,812,286) | (17,769,177) |
Total Liabilities and Stockholders' Deficiency | 16,234 | 9,070 |
Preferred Stock Series B | ||
Stockholders' deficiency | ||
Preferred Stock | 519 | 0 |
Preferred Stock Series C | ||
Stockholders' deficiency | ||
Preferred Stock | $ 2,300 | $ 0 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2019 | Dec. 31, 2018 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 134,277,252 | 131,038,944 |
Common stock, shares outstanding | 134,277,252 | 131,038,944 |
Preferred Stock Series B | ||
Preferred stock, par value | $ .001 | $ .001 |
Preferred stock, shares authorized | 1,250,000 | 1,250,000 |
Preferred stock, shares issued | 518,750 | 0 |
Preferred stock, shares outstanding | 518,750 | 0 |
Preferred Stock Series C | ||
Preferred stock, par value | $ .001 | $ .001 |
Preferred stock, shares authorized | 2,700,000 | 2,700,000 |
Preferred stock, shares issued | 2,300,000 | 0 |
Preferred stock, shares outstanding | 2,300,000 | 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Operating Expenses | ||||
Salaries and wages | $ 331,790 | $ 257,776 | $ 647,635 | $ 876,723 |
Professional fees | 110,036 | 185,220 | 411,607 | 1,056,188 |
General and administrative | 83,866 | 91,302 | 214,031 | 510,361 |
Stock based compensation | 0 | 0 | 159,337 | 0 |
Total Operating Expenses | 525,692 | 534,298 | 1,432,610 | 2,443,272 |
Loss from Operations | (525,692) | (534,298) | (1,432,610) | (2,443,272) |
Other Income & Expenses | ||||
Interest expense, net | (323,717) | (190,417) | (766,815) | (526,342) |
Amortization of debt discount | (596) | (254,191) | (24,435) | (343,731) |
Income from legal settlement | 0 | 50,000 | 0 | 100,000 |
Change in FV of derivative liability | 156,031 | (72,065) | 608,040 | (72,065) |
Total Other Expense | (168,282) | (466,673) | (183,210) | (842,138) |
Loss Before Income Taxes | (693,974) | (1,000,971) | (1,615,820) | (3,285,410) |
Provision for Income Taxes | 0 | 0 | 0 | 0 |
Net Loss | $ (693,974) | $ (1,000,971) | $ (1,615,820) | $ (3,285,410) |
Net Loss per Common Share Basic and Diluted | $ (0.01) | $ (0.01) | $ (0.01) | $ (0.03) |
Weighted Average Number of Common Shares Outstanding | 134,062,862 | 124,361,407 | 133,300,484 | 123,370,391 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (Deficit) - USD ($) | Preferred Stock Series B | Preferred Stock Series C | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
Balance, shares at Dec. 31, 2017 | 0 | 0 | 122,642,247 | |||
Balance, value at Dec. 31, 2017 | $ 0 | $ 0 | $ 122,642 | $ 57,071,022 | $ (67,703,218) | $ (10,509,554) |
Common stock issued for exercise of warrants, shares | 39,000 | |||||
Common stock issued for exercise of warrants, value | $ 39 | 9,481 | 9,520 | |||
Common stock issued for services, shares | 673,345 | |||||
Common stock issued for services, value | $ 673 | 138,313 | 138,986 | |||
Stock issued for conversions of notes, shares | 400,000 | |||||
Stock issued for conversions of notes, value | $ 400 | 17,790 | 18,190 | |||
Common stock issued for cash, shares | 1,900,000 | |||||
Common stock issued for cash, value | $ 1,900 | 119,240 | 121,140 | |||
Beneficial conversion feature, value | 34,975 | 34,975 | ||||
Reclassification of derivative liabilities | 13,370 | 13,370 | ||||
Net loss | (3,285,410) | (3,285,410) | ||||
Balance, shares at Sep. 30, 2018 | 0 | 0 | 125,654,592 | |||
Balance, value at Sep. 30, 2018 | $ 0 | $ 0 | $ 125,654 | 57,404,191 | (70,988,628) | (13,458,783) |
Balance, shares at Jun. 30, 2018 | 0 | 0 | 123,306,904 | |||
Balance, value at Jun. 30, 2018 | $ 0 | $ 0 | $ 123,307 | 57,245,393 | (69,987,657) | (12,618,957) |
Common stock issued for exercise of warrants, shares | 5,000 | |||||
Common stock issued for exercise of warrants, value | $ 5 | 420 | 425 | |||
Common stock issued for services, shares | 42,688 | |||||
Common stock issued for services, value | $ 42 | 7,978 | 8,020 | |||
Common stock issued for cash, shares | 1,900,000 | |||||
Common stock issued for cash, value | $ 1,900 | 119,240 | 121,140 | |||
Beneficial conversion feature, shares | 400,000 | |||||
Beneficial conversion feature, value | $ 400 | 17,790 | 18,190 | |||
Reclassification of derivative liabilities | 13,370 | 13,370 | ||||
Net loss | (1,000,971) | (1,000,971) | ||||
Balance, shares at Sep. 30, 2018 | 0 | 0 | 125,654,592 | |||
Balance, value at Sep. 30, 2018 | $ 0 | $ 0 | $ 125,654 | 57,404,191 | (70,988,628) | (13,458,783) |
Balance, shares at Dec. 31, 2018 | 0 | 0 | 131,038,944 | |||
Balance, value at Dec. 31, 2018 | $ 0 | $ 0 | $ 131,039 | 57,683,015 | (75,583,231) | $ (17,769,177) |
Stock issued for conversions of notes, shares | 3,238,308 | 3,238,308 | ||||
Stock issued for conversions of notes, value | $ 3,238 | 81,109 | $ 84,347 | |||
Preferred stock issued for cash, shares | 518,750 | |||||
Preferred stock issued for cash, value | $ 519 | 206,981 | 207,500 | |||
Preferred stock issued for services, shares | 2,300,000 | |||||
Preferred stock issued for services, value | $ 2,300 | 157,037 | 159,337 | |||
Reclassification of derivative liabilities | 121,527 | 121,527 | ||||
Net loss | (1,615,820) | (1,615,820) | ||||
Balance, shares at Sep. 30, 2019 | 518,750 | 2,300,000 | 134,277,252 | |||
Balance, value at Sep. 30, 2019 | $ 519 | $ 2,300 | $ 134,277 | 58,249,669 | (77,199,051) | (18,812,286) |
Balance, shares at Jun. 30, 2019 | 62,500 | 2,300,000 | 133,838,944 | |||
Balance, value at Jun. 30, 2019 | $ 63 | $ 2,300 | $ 133,839 | 58,039,948 | (76,505,077) | (18,328,927) |
Stock issued for conversions of notes, shares | 438,308 | |||||
Stock issued for conversions of notes, value | $ 438 | 9,562 | 10,000 | |||
Preferred stock issued for cash, shares | 456,250 | |||||
Preferred stock issued for cash, value | $ 456 | 182,044 | 182,500 | |||
Reclassification of derivative liabilities | 18,115 | 18,115 | ||||
Net loss | (693,974) | (693,974) | ||||
Balance, shares at Sep. 30, 2019 | 518,750 | 2,300,000 | 134,277,252 | |||
Balance, value at Sep. 30, 2019 | $ 519 | $ 2,300 | $ 134,277 | $ 58,249,669 | $ (77,199,051) | $ (18,812,286) |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash Flows From Operating Activities: | ||
Net loss | $ (1,615,820) | $ (3,285,410) |
Adjustments to reconcile net loss to net cash used in operating activities | ||
Depreciation | 673 | 510 |
Change in derivative liability | (608,040) | 72,065 |
Stock issued for services | 0 | 138,986 |
Amortization of debt discount | 24,435 | 343,731 |
Preferred stock issued for services | 159,337 | 0 |
Changes in assets and liabilities: | ||
Prepaid expenses | 0 | 5,000 |
Accounts payable and accrued expenses | 1,538,631 | 1,171,630 |
Net Cash Used In Operating Activities | (500,784) | (1,553,488) |
Cash Flow From Investing Activities: | ||
Assets under construction | 0 | (30,000) |
Net Cash Used In Investing Activities | 0 | (30,000) |
Cash Flows From Financing Activities: | ||
Repayment of notes payable - related party | (16,000) | (64,376) |
Repayment of notes payable | (3,880) | (3,880) |
Repayment of convertible notes payable | (15,000) | 0 |
Proceeds from note payable | 310,000 | 499,156 |
Proceeds from convertible note payable | 26,000 | 615,087 |
Advance from related party | 32,000 | 0 |
Repayment of advance from related party | (32,000) | 0 |
Proceeds from exercise of warrants | 0 | 9,520 |
Proceeds from the sale of preferred stock | 207,500 | 0 |
Proceeds from issuance of common stock, net of offering costs | 0 | 121,140 |
Net Cash Provided by Financing Activities | 508,620 | 1,176,647 |
Net increase (decrease) in cash and cash equivalents | 7,836 | (406,841) |
Cash and cash equivalents at beginning of period | 8,398 | 425,015 |
Cash and cash equivalents at end of period | 16,234 | 18,174 |
Supplemental disclosure of cash flow information | ||
Cash paid for interest expense | 6,814 | 32,432 |
Cash paid for income taxes | 0 | 0 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Debt discount on note payable | 0 | 34,975 |
Reclassification of derivative liability | 121,527 | 13,370 |
Convertible note payable and accrued interest into common stock | $ 84,347 | $ 18,190 |
1. Nature of Business and Busin
1. Nature of Business and Business Presentation | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Business and Business Presentation | Ocean Thermal Energy Corporation is currently in the businesses of: ● OTEC and SWAC/LWAC ● EcoVillages We expect to use our technology in the development of our EcoVillages, which should add significant value to our existing line of business. 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 in accordance with U.S. generally accepted accounting principles (GAAP). 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 nine months ended September 30, 2019, 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, 2018, including the financial statements and notes. |
2. Summary of Significant Accou
2. Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Principal Subsidiary Undertakings Our condensed consolidated financial statements 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 We have an effective interest of 100% in each of our subsidiaries. Use of Estimates In preparing financial statements in conformity with GAAP, 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 valuation of equity-based transactions, valuation of derivative liabilities, 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 September 30, 2019, and December 31, 2018, we had no cash equivalents. Income Taxes We use the liability method of accounting for income taxes. Under the liability method, deferred tax assets and liabilities are determined based on temporary differences between financial reporting and tax bases of assets and liabilities and on the amount of operating loss carry-forwards and are measured using the enacted tax rates and laws that will be in effect when the temporary differences and carry-forwards are expected to reverse. An allowance against deferred tax assets is recorded when it is more likely than not that such tax benefits will not be realized. 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 Internal Revenue Code of 1986, as amended (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. 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, 2019 Headquarters US Territories Other Total Revenue $ - $ - $ - $ - Assets $ 16,234 $ - $ - $ 16,234 Net loss $ (1,615,820 ) $ - $ - $ (1,615,820 ) Property and equipment $ - $ - $ - $ - Assets under construction $ - $ - $ - $ - Depreciation $ 673 $ - $ - $ 673 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 Property and equipment $ - $ 30,000 $ - $ 30,000 During the year ended December 31, 2018, $892,639 of Guam and U.S. Virgin Islands assets under construction were determined to be impaired due to the uncertainty of the projects and were written off; consequently, there were no assets under construction as of September 30, 2019. 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 expense 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 capitalize direct interest costs associated with the projects. As of September 30, 2019 and 2018, we have no interest costs capitalized for any of these projects. 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 computer equipment and software are as follows: Years Computer Equipment 3 Software 5 Fair Value 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, 2019, and December 31, 2018, 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, 2019 and December 31, 2018 (see Note 5). Concentrations Cash, 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. Management believes the risk in these situations to be minimal. As of September 30, 2019, and December 31, 2018, $0 and $0, respectively, were deposited in excess of FDIC-insured limits. 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 350,073 and 333,573 shares issuable upon the exercise of warrants and 65,591,841 and 20,798,618 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 nine months ended September 30, 2019 and 2018, respectively. Revenue Recognition In May 2014, the FASB issued Accounting Standard Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606) Recent Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02 “Leases,” which will amend current lease accounting to require lessees to recognize (i) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis, and (ii) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. ASU 2016-02 does not significantly change lease accounting requirements applicable to lessors; however, certain changes were made to align, where necessary, lessor accounting with the lessee accounting model. This standard will be effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. We adopted the provisions of this ASU on January 1, 2019. The company is on a month-to-month lease for the office. The adoption had no impact on our condensed consolidated results of operations, cash floes, or financial conditions. In June 2018, the FASB issued 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. |
3. Going Concern
3. Going Concern | 9 Months Ended |
Sep. 30, 2019 | |
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 $1,615,820 and used $500,784 of cash in operating activities for the nine months ended September 30, 2019. We had a working capital deficiency of $18,617,952 and a stockholders’ deficiency of $18,812,286 as of September 30, 2019. 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. |
4. Convertible Notes and Notes
4. Convertible Notes and Notes Payable | 9 Months Ended |
Sep. 30, 2019 | |
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 interest rate is 6.25%, and the maturity date was January 5, 2013. During the nine months ended September 30, 2019, we made a repayment of $3,880. The loan principal was $5,500 with accrued interest of $0 as of September 30, 2019. This note is in default. On December 23, 2009, we borrowed funds from SICOG, the EDA-#273 loan. The interest rate is 7%, and the maturity date was December 23, 2014. The loan principal was $94,480 with accrued interest of $21,891 as of September 30, 2019. This note is in default. On December 23, 2009, we borrowed funds from SICOG, the MICRO I-#274 loan and MICRO II-#275 loan. The interest rate is 7%, and the maturity date was December 23, 2014. The loan principal was $47,239 with accrued interest of $10,414 as of September 30, 2019. These notes are in default. On December 1, 2007, we borrowed funds from the Eastern Idaho Development Corporation and the Economic Development Corporation. The interest rate is 7%, and the maturity date was September 1, 2015. The loan principal was $85,821 with accrued interest of $43,970 as of September 30, 2019. This note is in default. On September 25, 2009, we borrowed funds from the Pocatello Development Authority. The interest rate is 5%, and the maturity date was October 25, 2011. The loan principal was $50,000 with accrued interest of $22,636 as of September 30, 2019. 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., 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, 2019, the outstanding loan balance was $394,380 and the accrued but unpaid interest was $113,149 on the Consolidated Note. During 2016 and 2015, we borrowed $75,000 from JPF Venture Group, Inc. pursuant to promissory notes. The terms of the notes are as follows: (i) interest is payable at 6% per annum; (ii) the notes are 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 December 31, 2018, we have recorded a debt discount of $75,000 for the fair value derivative liability and fully amortized the debt discount. As of September 30, 2019, the outstanding balance was $75,000, plus accrued interest of $15,586. During 2016, we borrowed $112,500 from JPF Venture Group, Inc. pursuant to promissory notes. The terms of the notes are as follows: (i) interest is payable at 6% per annum; (ii) the notes are 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. On February 24, 2017, the notes were amended to eliminate the conversion features. As of September 30, 2019, the outstanding balance was $112,500, plus accrued interest of $23,315. 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 December 31, 2018, we have recorded a debt discount of $12,500 for the fair value of derivative liability and fully amortized the debt discount. As of September 30, 2019, the outstanding balance was $12,500, plus accrued interest of $2,323. During 2012, we issued a note payable for $1,000,000. 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. On March 6, 2018, the note was amended to extend the due date to December 31, 2018. On March 29, 2019, the maturity date of the note was extended to December 31, 2019. As of September 30, 2019, the outstanding balance was $1,000,000, plus accrued interest of $712,781. 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, and a security agreement. During 2013, we issued $525,000 of 10% promissory notes. As of September 30, 2019, the loan balance was $158,334 and the accrued interest was $96,954. During 2013, we issued a note payable for $290,000 in connection with the reverse merger transaction with Broadband Network Affiliates, Inc. 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 described in the litigation section of this filing, the note holder filed suit on May 21, 2019, and we remain confident that the court will decide in our favor by either voiding the note or awarding damages sufficient to offset the note value. As of September 30, 2019, the balance outstanding was $130,000, and the accrued interest as of that date was $58,744. This note is in default. On January 18, 2018, Jeremy P. Feakins & Associates, LLC, an investment entity owned by our chief executive, chief financial officer, and a director, agreed to extend the due date for repayment of a $2,265,000 note issued in 2014 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. As of September 30, 2019, the note balance was $1,102,500 and the accrued interest was $620,360. This note is in default. We have $300,000 in principal amount of outstanding notes due to unrelated parties, 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/LWAC project’s financial closing. Accrued interest totaled $297,095 as of September 30, 2019. This note is in default. The due date of April 7, 2017, on a $50,000 promissory note with an unaffiliated investor, was 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 $22,708 as of September 30, 2019. The note is in default. 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. During the year ended December 31, 2017, we received an additional $2,000 and repaid $25,000. As of September 30, 2019, the balance outstanding was $177,000, plus accrued interest of $46,274. During the third quarter of 2017, we completed a $2,000,000 convertible promissory note private placement offering. The terms of the notes are as follows: (i) interest is payable at 6% per annum; (ii) the notes are 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 notes (principal and interest) will be repaid in full. During the third quarter, $15,000 of the note was repaid. As of September 30, 2019, the outstanding balance for all four notes was $65,000, plus accrued interest of $8,657. As of the date of this report, the notes are in default. On November 6, 2017, we entered into an agreement and promissory note with JPF Venture Group, Inc. 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 (as defined therein), December 31, 2018, or when we are otherwise able to pay. During the first quarter of 2019, we repaid $5,000. As of September 30, 2019, the outstanding balance was $596,093 and the accrued interest was $126,669. This note is in default. In December 2017, we entered into a series of unsecured promissory notes and warrant purchase agreements with accredited investors. 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 received 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, 2019, the balance of the outstanding loans was $979,156 and the accrued interest was $141,241. During the nine months ended September 30, 2019, 98,000 warrants were transferred from a warrant holder to JPF Venture Group Inc. These warrants were issued in exchange for shares issued by JPF Venture Group to the warrant holders. The warrant terms remain the same. As of September 30, 2019, we have outstanding warrants to purchase 223,000 shares of common stock. As of the date of this report, these notes are 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 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 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, 2019, we have outstanding warrants to purchase 2,000 shares of common stock. As of September 30, 2019, the balance outstanding was $10,000 and the accrued interest was $627. On December 14, 2018, L2 Capital LLC purchased our note payable from Collier Investments, LLC. The total consideration was $371,250, including the outstanding note balance of $281,250, the accrued interest of $33,750, and liquidated damages of $56,250. There was also a default penalty of $153,123. In addition, we issued 400,000 shares of common stock to L2 Capital as commitment shares with a fair value of $21,200 in connection with the purchase of the note. We executed a replacement convertible note with L2 Capital in the amount of $371,250 with an interest rate of 12% per annum. The maturity date of the note is December 22, 2018. The holder of the note can convert the note, or any portion of it, into shares of common stock at any time after the issuance date. The conversion price is 65% of the market price, which is defined as the lowest trading price for our common stock during the 20-trading-day period prior to the conversion date. As of December 31, 2018, we have recorded a debt discount of $665,690 for the fair value of derivative liability and fully amortized the debt discount. During the nine months ended September 30, 2019, we issued 1,800,000 shares of common stock to L2 Capital for the conversion of a portion of our notes payable in the amount of $49,614. As of September 30, 2019, the outstanding balance was $474,759, which includes a default penalty of $153,123, and the accrued interest was $92,502. This note is in default. On January 2, 2019, we initiated a promissory note agreement pursuant to which we issued a series of promissory notes in the amount of $10,000 to accredited investors. Proceeds from these notes will be used to support the administrative and legal expenses of our lawsuit before the United District Court for the Western District of Tennessee, Ocean Thermal Energy Corporation v. Robert Coe, el al., On August 14, 2019, we executed a note payable for $26,000 with an unrelated party that bears interest at 8% per annum and has a maturity date of October 31, 2021. The note automatically converts into 1,300,000 shares of our common stock either at the time the closing sale price for our common stock is equal to or greater than $1.00 per share, as adjusted for stock splits, stock dividends, reclassification and the like, or The following convertible note and notes payable were outstanding at September 30, 2019: Related Party Non Related Party Date of Issuance Maturity Date Interest Rate In Default Original Principal Principal at September 30, 2019 Discount at September 30, 2019 Carrying Amount at September 30, 2019 Current Long-Term Current Long-Term 12/12/06 01/05/13 6.25% Yes 58,670 5,500 - 5,500 - - 5,500 - 12/01/07 09/01/15 7.00% Yes 125,000 85,821 - 85,821 - - 85,821 - 09/25/09 10/25/11 5.00% Yes 50,000 50,000 - 50,000 - - 50,000 - 12/23/09 12/23/14 7.00% Yes 100,000 94,480 - 94,480 - - 94,480 - 12/23/09 12/23/14 7.00% Yes 25,000 23,619 - 23,619 - - 23,619 - 12/23/09 12/23/14 7.00% Yes 25,000 23,620 - 23,620 - - 23,620 - 02/03/12 12/03/19 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% Yes 2,265,000 1,102,500 - 1,102,500 1,102,500 - - - 12/22/14 03/31/15 22.00% * Yes 200,000 200,000 - 200,000 - - 200,000 - 12/26/14 12/26/15 22.00% * Yes 100,000 100,000 - 100,000 - - 100,000 - 03/12/15 (1) 6.00% No 394,380 394,380 - 394,380 394,380 - - - 04/07/15 04/07/18 10.00% Yes 50,000 50,000 - 50,000 - - 50,000 - 11/23/15 (1) 6.00% No 50,000 50,000 - 50,000 50,000 - - - 02/25/16 (1) 6.00% No 50,000 50,000 - 50,000 50,000 - - - 05/20/16 (1) 6.00% No 50,000 50,000 - 50,000 50,000 - - - 10/20/16 (1) 6.00% No 50,000 12,500 - 12,500 12,500 - - - 10/20/16 (1) 6.00% No 12,500 12,500 - 12,500 12,500 - - - 12/21/16 (1) 6.00% No 25,000 25,000 - 25,000 25,000 - - - 03/09/17 (1) 10.00% No 200,000 177,000 - 177,000 177,000 - - - 07/13/17 07/13/19 6.00% No 25,000 25,000 - 25,000 - - 25,000 - 07/18/17 07/18/19 6.00% No 25,000 25,000 - 25,000 - - 25,000 - 07/26/17 07/26/19 6.00% No 15,000 15,000 - 15,000 - - 15,000 - 12/20/17 (2) 10.00% Yes 979,156 979,156 979,156 - - 979,156 - 11/06/17 12/31/18 10.00% Yes 646,568 596,093 - 596,093 596,093 - - - 02/19/18 (3) 18.00%* Yes 629,451 594,717 - 594,717 - - 594,717 - 09/19/18 09/28/21 6.00% No 10,000 10,000 - 10,000 - - - 10,000 12/14/18 12/22/18 24.00%* Yes 474,759 474,759 - 474,759 - - 474,759 - 01/02/19 (4) 17.00% No 310,000 310,000 310,000 310,000 08/14/19 10/31/21 8.00% No 26,000 26,000 26,000 26,000 $8,786,484 $ 6,850,979 $ - $ 6,850,979 $ 2,469,973 $ - $ 4,186,672 $ 194,334 (1) Maturity date is 90 days after demand. (2) Bridge loans were issued at 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). L2 - Note was drawn down in five tranches between 02/16/18 and 05/02/18. (4). Loans were issued from January 2, 2019 to March 23, 2019. Principal and interest are due when funds are received from the litigation between Ocean Thermal Energy Corporation vs., Robert Coe el al. * Default interest rate The following convertible notes and notes payable were outstanding at December 31, 2018: Related Party Non Related Party Date of Issuance Maturity Date Interest Rate In Default Original Principal Principal at December 31, 2018 Discount at December 31, 2018 Carrying Amount at December 31, 2018 Current Long-Term Current Long-Term 12/12/06 01/05/13 6.25% Yes 58,670 9,379 - 9,379 - - 9,379 - 12/01/07 09/01/15 7.00% Yes 125,000 85,821 - 85,821 - - 85,821 - 09/25/09 10/25/11 5.00% Yes 50,000 50,000 - 50,000 - - 50,000 - 12/23/09 12/23/14 7.00% Yes 100,000 94,480 - 94,480 - - 94,480 - 12/23/09 12/23/14 7.00% Yes 25,000 23,619 - 23,619 - - 23,619 - 12/23/09 12/23/14 7.00% Yes 25,000 23,620 - 23,620 - - 23,620 - 02/03/18 12/31/18 10.00% Yes 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% Yes 2,265,000 1,102,500 - 1,102,500 1,102,500 - - - 12/22/14 03/31/15 22.00%* Yes 200,000 200,000 - 200,000 - - 200,000 - 12/26/14 12/26/15 22.00%* Yes 100,000 100,000 - 100,000 - - 100,000 - 03/12/15 (1) 6.00% No 394,380 394,380 - 394,380 394,380 - - - 04/07/15 04/07/18 10.00% Yes 50,000 50,000 - 50,000 - - 50,000 - 11/23/15 (1) 6.00% No 50,000 50,000 - 50,000 50,000 - - - 02/25/16 (1) 6.00% No 50,000 50,000 - 50,000 50,000 - - - 05/20/16 (1) 6.00% No 50,000 50,000 - 50,000 50,000 - - - 10/20/16 (1) 6.00% No 50,000 12,500 - 12,500 12,500 - - - 10/20/16 (1) 6.00% No 12,500 12,500 - 12,500 12,500 - - - 12/21/16 (1) 6.00% No 25,000 25,000 - 25,000 25,000 - - - 03/09/17 (1) 10.00% No 200,000 177,000 - 177,000 177,000 - - - 07/13/17 07/13/19 6.00% No 25,000 25,000 - 25,000 - - 25,000 - 07/18/17 07/18/19 6.00% No 25,000 25,000 - 25,000 - - 25,000 - 07/26/17 07/26/19 6.00% No 15,000 15,000 - 15,000 - - 15,000 - 07/27/17 07/27/19 6.00% No 15,000 15,000 - 15,000 - - 15,000 - 12/20/17 (2) 10.00% Yes** 979,156 979,156 24,435 954,721 - - 954,721 - 11/06/17 12/31/18 10.00% Yes 646,568 612,093 - 612,093 612,093 - - - 02/19/18 (3) 18.00%* Yes 629,451 629,451 - 629,451 - - 629,451 - 09/19/18 09/28/21 6.00% No 10,000 10,000 - 10,000 - - - 10,000 12/14/18 12/22/18 24.00%* Yes 524,373 524,373 - 524,373 - - 524,373 - Totals $8,515,098 $ 6,634,206 $ 24,435 $ 6,609,771 $ 2,485,973 $ - $ 3,955,464 $ 168,334 (1) Maturity date is 90 days after demand. (2) Bridge loans were issued at 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). L2 - Note was drawn down in five tranches between 02/16/18 and 05/02/18. * Default interest rate ** Partially in default on December 31, 2018 |
5. Derivative Liability
5. Derivative Liability | 9 Months Ended |
Sep. 30, 2019 | |
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, we defaulted in payment of the note issued to L2 Capital on February 19, 2018. In accordance with the terms of the note, at any time on or after the occurrence of any event of default, the conversion price per share would 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 shares 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 market prices Significant Fair value at for identical Significant other unobservable September 30, assets/liabilities observable inputs inputs 2019 (Level 1) (Level 2) (Level 3) Derivative Liability $ 1,562,687 $ - $ - $ 1,562,687 Derivative Liability Derivative liability as of December 31, 2018 $ 2,292,254 Fair value at the commitment date for convertible instruments - Change in fair value of derivative liability (608,040 ) Reclassification to additional paid-in capital for financial instruments that ceased to be a derivative liability (121,527 ) Derivative liability as of September 30, 2019 $ 1,562,687 Fair Value of Derivative Liability* Change in fair value of derivative liability at the beginning of period $ 1,206,857 Day one gains/(losses) on valuation - Gains/(losses) from the change in fair value of derivative liability (1,814,897 ) Change in fair value of derivative liability at the end of the period $ (608,040 ) _______________ * 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: Remeasurement Date** Expected dividends 0% Expected volatility 48.8% to 487.3% Risk free interest rate 1.56% to 1.91% Expected term (in years) 0.08 to 3.88 _______________ ** The fair value at the remeasurement date is equal to the carrying value on the balance sheet. |
6. Stockholders' Equity
6. Stockholders' Equity | 9 Months Ended |
Sep. 30, 2019 | |
Stockholders' deficiency | |
Stockholders' Equity | Common Stock During the nine months ended September 30, 2019, we issued 3,238,308 shares of common stock to L2 Capital LLC for the conversion of a portion of our notes payable in the amount of $84,347. Preferred Stock On June 3, 2019, our board of directors approved the following issuances of Preferred Stock: Series B Preferred Stock Series C Preferred Stock Warrants The following table summarizes all warrants outstanding and exercisable for the nine months ended September 30, 2019: Number of Weighted Average Warrants Exercise Price Balance at December 31, 2018 350,073 $ 0.18 Granted - - Exercised - - Forfeited - - Balance at September 30, 2019 350,073 $ 0.18 Exercisable at September 30, 2019 350,073 $ 0.18 During the nine months ended September 30, 2019, no warrants were exercised. 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 $0.04 per share on September 30, 2019. The intrinsic value of warrants to purchase 350,073 shares on that date was $1,467. |
7. Commitments and Contingencie
7. Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [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, with a post-effective amendment effective April 15, 2019. During the nine months ended September 30, 2019, we did not execute any put options with L2 Capital to purchase any shares of common stock. 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. As of September 30, 2019, we have outstanding warrants to purchase 56,073 shares of common stock for L2 Capital equity transactions and warrants to purchase 69,000 shares of common stock for L2 Capital debt transactions for a total outstanding of warrants to purchase 125,073 shares of common stock, none of which has been exercised. These warrants have a fair value of $13,280 based on the Black-Scholes option-pricing model. The warrants have exercise prices 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. 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. On May 21, 2019, Theodore T. Herman filed a complaint against us in Theodore T. Herman v. Ocean Thermal Energy Corporation Consulting Agreements 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, as of September 30, 2019, we have not issued the shares. As of September 30, 2019, and December 31, 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, 2019, 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. |
8. Related-Party Transactions
8. Related-Party Transactions | 9 Months Ended |
Sep. 30, 2019 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions | For the nine months ended September 30, 2019, we paid rent of $90,000 to a company controlled by our chief executive officer. 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 $620,360 as of September 30, 2019. 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 $46,274 as of September 30, 2019. On November 6, 2017, we entered into an agreement and promissory note with JPF Venture Group, Inc. 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 are due and payable at the earliest of resolution of the Memphis litigation (as defined therein), December 31, 2018, or when we are otherwise able to pay. As of September 30, 2019, the outstanding balance was $596,093 and the accrued interest was $126,669. For the nine months ended September 30, 2019, we repaid $5,000. This note is in default. We remain liable for the loans made to us by JPF Venture Group before it was an affiliate. As of September 30, 2019, the outstanding balance of these loans was $581,880 and the accrued interest was $152,051. On June 27, 2019, JPF Venture Group agreed to provide a short-term advance to us for working capital in the amount of $32,000. This amount was repaid during the third quarter of 2019. The balance is $0 as of September 30, 2019. On June 3, 2019, we issued 1,000,000 shares of our Series C Preferred Stock to our chief executive officer for services with a fair value of $69,277. On June 3, 2019, we issued 400,000 shares of our Series C Preferred Stock to two members of our board of directors for services with a fair value of $27,711. |
9. Subsequent Events
9. Subsequent Events | 9 Months Ended |
Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | On August 14, 2019, we executed a note payable for $26,200 with an unrelated party that bears interest at 8% per annum and has a maturity date of October 31, 2021. As of September 30, 2019, the balance outstanding was $26,000. On October 21, 2019, we received an additional $200 and the outstanding balance as of the date of this filing is $26,200. During October and November 2019, we executed notes payable for a total of $105,000 with unrelated parties. The notes were issued in $5,000 increments and bear interest at 8% per annum. The maturity date for each note is October 31, 2021. Each note automatically converts into 250,000 shares of our common stock either at the time the closing sale price for our common stock is equal to or greater than $1.00 per share, as adjusted for stock splits, stock dividends, reclassification and the like, or at the maturity date of October 31, 2021, whichever occurs first. |
2. Summary of Significant Acc_2
2. Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Principal Subsidiary Undertakings | Our condensed consolidated financial statements 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 We have an effective interest of 100% in each of our subsidiaries. |
Use of Estimates | In preparing financial statements in conformity with GAAP, 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 valuation of equity-based transactions, valuation of derivative liabilities, 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 September 30, 2019, and December 31, 2018, we had no cash equivalents. |
Income Taxes | We use the liability method of accounting for income taxes. Under the liability method, deferred tax assets and liabilities are determined based on temporary differences between financial reporting and tax bases of assets and liabilities and on the amount of operating loss carry-forwards and are measured using the enacted tax rates and laws that will be in effect when the temporary differences and carry-forwards are expected to reverse. An allowance against deferred tax assets is recorded when it is more likely than not that such tax benefits will not be realized. 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 Internal Revenue Code of 1986, as amended (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. |
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, 2019 Headquarters US Territories Other Total Revenue $ - $ - $ - $ - Assets $ 16,234 $ - $ - $ 16,234 Net loss $ (1,615,820 ) $ - $ - $ (1,615,820 ) Property and equipment $ - $ - $ - $ - Assets under construction $ - $ - $ - $ - Depreciation $ 673 $ - $ - $ 673 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 Property and equipment $ - $ 30,000 $ - $ 30,000 During the year ended December 31, 2018, $892,639 of Guam and U.S. Virgin Islands assets under construction were determined to be impaired due to the uncertainty of the projects and were written off; consequently, there were no assets under construction as of September 30, 2019. |
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 expense 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 capitalize direct interest costs associated with the projects. As of September 30, 2019 and 2018, we have no interest costs capitalized for any of these projects. 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 computer equipment and software are as follows: Years Computer Equipment 3 Software 5 |
Fair Value | 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, 2019, and December 31, 2018, 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, 2019 and December 31, 2018 (see Note 5). |
Concentrations | Cash, 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. Management believes the risk in these situations to be minimal. As of September 30, 2019, and December 31, 2018, $0 and $0, respectively, were deposited in excess of FDIC-insured limits. |
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 350,073 and 333,573 shares issuable upon the exercise of warrants and 65,591,841 and 20,798,618 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 nine months ended September 30, 2019 and 2018, respectively. |
Revenue Recognition | In May 2014, the FASB issued Accounting Standard Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606) |
Recent Accounting Pronouncements | In February 2016, the FASB issued ASU 2016-02 “Leases,” which will amend current lease accounting to require lessees to recognize (i) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis, and (ii) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. ASU 2016-02 does not significantly change lease accounting requirements applicable to lessors; however, certain changes were made to align, where necessary, lessor accounting with the lessee accounting model. This standard will be effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. We adopted the provisions of this ASU on January 1, 2019. The company is on a month-to-month lease for the office. The adoption had no impact on our condensed consolidated results of operations, cash floes, or financial conditions. In June 2018, the FASB issued 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. |
2. Summary of Significant Acc_3
2. Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
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 |
Business segments | September 30, 2019 Headquarters US Territories Other Total Revenue $ - $ - $ - $ - Assets $ 16,234 $ - $ - $ 16,234 Net loss $ (1,615,820 ) $ - $ - $ (1,615,820 ) Property and equipment $ - $ - $ - $ - Assets under construction $ - $ - $ - $ - Depreciation $ 673 $ - $ - $ 673 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 Property and equipment $ - $ 30,000 $ - $ 30,000 |
Estimated useful lives | Years Computer Equipment 3 Software 5 |
4. Convertible Notes and Note_2
4. Convertible Notes and Notes Payable (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of convertible notes and notes payable | Related Party Non Related Party Date of Issuance Maturity Date Interest Rate In Default Original Principal Principal at September 30, 2019 Discount at September 30, 2019 Carrying Amount at September 30, 2019 Current Long-Term Current Long-Term 12/12/06 01/05/13 6.25% Yes 58,670 5,500 - 5,500 - - 5,500 - 12/01/07 09/01/15 7.00% Yes 125,000 85,821 - 85,821 - - 85,821 - 09/25/09 10/25/11 5.00% Yes 50,000 50,000 - 50,000 - - 50,000 - 12/23/09 12/23/14 7.00% Yes 100,000 94,480 - 94,480 - - 94,480 - 12/23/09 12/23/14 7.00% Yes 25,000 23,619 - 23,619 - - 23,619 - 12/23/09 12/23/14 7.00% Yes 25,000 23,620 - 23,620 - - 23,620 - 02/03/12 12/03/19 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% Yes 2,265,000 1,102,500 - 1,102,500 1,102,500 - - - 12/22/14 03/31/15 22.00% * Yes 200,000 200,000 - 200,000 - - 200,000 - 12/26/14 12/26/15 22.00% * Yes 100,000 100,000 - 100,000 - - 100,000 - 03/12/15 (1) 6.00% No 394,380 394,380 - 394,380 394,380 - - - 04/07/15 04/07/18 10.00% Yes 50,000 50,000 - 50,000 - - 50,000 - 11/23/15 (1) 6.00% No 50,000 50,000 - 50,000 50,000 - - - 02/25/16 (1) 6.00% No 50,000 50,000 - 50,000 50,000 - - - 05/20/16 (1) 6.00% No 50,000 50,000 - 50,000 50,000 - - - 10/20/16 (1) 6.00% No 50,000 12,500 - 12,500 12,500 - - - 10/20/16 (1) 6.00% No 12,500 12,500 - 12,500 12,500 - - - 12/21/16 (1) 6.00% No 25,000 25,000 - 25,000 25,000 - - - 03/09/17 (1) 10.00% No 200,000 177,000 - 177,000 177,000 - - - 07/13/17 07/13/19 6.00% No 25,000 25,000 - 25,000 - - 25,000 - 07/18/17 07/18/19 6.00% No 25,000 25,000 - 25,000 - - 25,000 - 07/26/17 07/26/19 6.00% No 15,000 15,000 - 15,000 - - 15,000 - 12/20/17 (2) 10.00% Yes 979,156 979,156 979,156 - - 979,156 - 11/06/17 12/31/18 10.00% Yes 646,568 596,093 - 596,093 596,093 - - - 02/19/18 (3) 18.00%* Yes 629,451 594,717 - 594,717 - - 594,717 - 09/19/18 09/28/21 6.00% No 10,000 10,000 - 10,000 - - - 10,000 12/14/18 12/22/18 24.00%* Yes 474,759 474,759 - 474,759 - - 474,759 - 01/02/19 (4) 17.00% No 310,000 310,000 310,000 310,000 08/14/19 10/31/21 8.00% No 26,000 26,000 26,000 26,000 $8,786,484 $ 6,850,979 $ - $ 6,850,979 $ 2,469,973 $ - $ 4,186,672 $ 194,334 (1) Maturity date is 90 days after demand. (2) Bridge loans were issued at 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). L2 - Note was drawn down in five tranches between 02/16/18 and 05/02/18. (4). Loans were issued from January 2, 2019 to March 23, 2019. Principal and interest are due when funds are received from the litigation between Ocean Thermal Energy Corporation vs., Robert Coe el al. * Default interest rate Related Party Non Related Party Date of Issuance Maturity Date Interest Rate In Default Original Principal Principal at December 31, 2018 Discount at December 31, 2018 Carrying Amount at December 31, 2018 Current Long-Term Current Long-Term 12/12/06 01/05/13 6.25% Yes 58,670 9,379 - 9,379 - - 9,379 - 12/01/07 09/01/15 7.00% Yes 125,000 85,821 - 85,821 - - 85,821 - 09/25/09 10/25/11 5.00% Yes 50,000 50,000 - 50,000 - - 50,000 - 12/23/09 12/23/14 7.00% Yes 100,000 94,480 - 94,480 - - 94,480 - 12/23/09 12/23/14 7.00% Yes 25,000 23,619 - 23,619 - - 23,619 - 12/23/09 12/23/14 7.00% Yes 25,000 23,620 - 23,620 - - 23,620 - 02/03/18 12/31/18 10.00% Yes 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% Yes 2,265,000 1,102,500 - 1,102,500 1,102,500 - - - 12/22/14 03/31/15 22.00%* Yes 200,000 200,000 - 200,000 - - 200,000 - 12/26/14 12/26/15 22.00%* Yes 100,000 100,000 - 100,000 - - 100,000 - 03/12/15 (1) 6.00% No 394,380 394,380 - 394,380 394,380 - - - 04/07/15 04/07/18 10.00% Yes 50,000 50,000 - 50,000 - - 50,000 - 11/23/15 (1) 6.00% No 50,000 50,000 - 50,000 50,000 - - - 02/25/16 (1) 6.00% No 50,000 50,000 - 50,000 50,000 - - - 05/20/16 (1) 6.00% No 50,000 50,000 - 50,000 50,000 - - - 10/20/16 (1) 6.00% No 50,000 12,500 - 12,500 12,500 - - - 10/20/16 (1) 6.00% No 12,500 12,500 - 12,500 12,500 - - - 12/21/16 (1) 6.00% No 25,000 25,000 - 25,000 25,000 - - - 03/09/17 (1) 10.00% No 200,000 177,000 - 177,000 177,000 - - - 07/13/17 07/13/19 6.00% No 25,000 25,000 - 25,000 - - 25,000 - 07/18/17 07/18/19 6.00% No 25,000 25,000 - 25,000 - - 25,000 - 07/26/17 07/26/19 6.00% No 15,000 15,000 - 15,000 - - 15,000 - 07/27/17 07/27/19 6.00% No 15,000 15,000 - 15,000 - - 15,000 - 12/20/17 (2) 10.00% Yes** 979,156 979,156 24,435 954,721 - - 954,721 - 11/06/17 12/31/18 10.00% Yes 646,568 612,093 - 612,093 612,093 - - - 02/19/18 (3) 18.00%* Yes 629,451 629,451 - 629,451 - - 629,451 - 09/19/18 09/28/21 6.00% No 10,000 10,000 - 10,000 - - - 10,000 12/14/18 12/22/18 24.00%* Yes 524,373 524,373 - 524,373 - - 524,373 - Totals $8,515,098 $ 6,634,206 $ 24,435 $ 6,609,771 $ 2,485,973 $ - $ 3,955,464 $ 168,334 (1) Maturity date is 90 days after demand. (2) Bridge loans were issued at 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). L2 - Note was drawn down in five tranches between 02/16/18 and 05/02/18. * Default interest rate ** Partially in default on December 31, 2018 |
5. Derivative Liability (Tables
5. Derivative Liability (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Derivative Liability [Abstract] | |
Fair value hierarchy | Quoted market prices Significant Fair value at for identical Significant other unobservable September 30, assets/liabilities observable inputs inputs 2019 (Level 1) (Level 2) (Level 3) Derivative Liability $ 1,562,687 $ - $ - $ 1,562,687 |
Changes in fair value financial liabilities | Derivative Liability Derivative liability as of December 31, 2018 $ 2,292,254 Fair value at the commitment date for convertible instruments - Change in fair value of derivative liability (608,040 ) Reclassification to additional paid-in capital for financial instruments that ceased to be a derivative liability (121,527 ) Derivative liability as of September 30, 2019 $ 1,562,687 Fair Value of Derivative Liability* Change in fair value of derivative liability at the beginning of period $ 1,206,857 Day one gains/(losses) on valuation - Gains/(losses) from the change in fair value of derivative liability (1,814,897 ) Change in fair value of derivative liability at the end of the period $ (608,040 ) _______________ * 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. |
Assumptions | Remeasurement Date** Expected dividends 0% Expected volatility 48.8% to 487.3% Risk free interest rate 1.56% to 1.91% Expected term (in years) 0.08 to 3.88 _______________ ** The fair value at the remeasurement date is equal to the carrying value on the balance sheet. |
6. Stockholders' Equity (Tables
6. Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Stockholders' deficiency | |
Schedule of warrants | Number of Weighted Average Warrants Exercise Price Balance at December 31, 2018 350,073 $ 0.18 Granted - - Exercised - - Forfeited - - Balance at September 30, 2019 350,073 $ 0.18 Exercisable at September 30, 2019 350,073 $ 0.18 |
2. Summary of Significant Acc_4
2. Summary of Significant Accounting Policies (Details) | 9 Months Ended |
Sep. 30, 2019 | |
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 |
2. Summary of Significant Acc_5
2. Summary of Significant Accounting Policies (Details 1) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Revenue | $ 0 | $ 0 | |||
Assets | $ 16,234 | $ 961,655 | 16,234 | 961,655 | $ 9,070 |
Net loss | (693,974) | (1,000,971) | (1,615,820) | (3,285,410) | |
Property and equipment | 0 | 842 | 0 | 842 | $ 672 |
Assets under construction | 0 | 922,639 | 0 | 922,639 | |
Depreciation | 673 | 510 | |||
Additions to assets under construction | 0 | 30,000 | |||
Headquarters | |||||
Revenue | 0 | 0 | |||
Assets | 16,234 | 39,016 | 16,234 | 39,016 | |
Net loss | (1,615,820) | (3,285,410) | |||
Property and equipment | 0 | 842 | 0 | 842 | |
Assets under construction | 0 | 0 | 0 | 0 | |
Depreciation | 673 | 510 | |||
Additions to assets under construction | 0 | 0 | |||
US Territories | |||||
Revenue | 0 | 0 | |||
Assets | 0 | 757,738 | 0 | 757,738 | |
Net loss | 0 | 0 | |||
Property and equipment | 0 | 0 | 0 | 0 | |
Assets under construction | 0 | 757,738 | 0 | 757,738 | |
Depreciation | 0 | 0 | |||
Additions to assets under construction | 0 | 30,000 | |||
Other | |||||
Revenue | 0 | 0 | |||
Assets | 0 | 164,901 | 0 | 164,901 | |
Net loss | 0 | 0 | |||
Property and equipment | 0 | 0 | 0 | 0 | |
Assets under construction | $ 0 | $ 164,901 | 0 | 164,901 | |
Depreciation | 0 | 0 | |||
Additions to assets under construction | $ 0 | $ 0 |
2. Summary of Significant Acc_6
2. Summary of Significant Accounting Policies (Details 2) | 9 Months Ended |
Sep. 30, 2019 | |
Computer Equipment | |
Estimated useful lives | 3 years |
Software | |
Estimated useful lives | 5 years |
2. Summary of Significant Acc_7
2. Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Cash in excess of FDIC | $ 0 | $ 0 | |
Warrants | |||
Antidilutive shares excluded from EPS calculation | 350,073 | 333,573 | |
Convertible Notes | |||
Antidilutive shares excluded from EPS calculation | 65,591,841 | 20,798,618 |
3. Going Concern (Details Narra
3. Going Concern (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Jun. 30, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||
Net loss | $ (693,974) | $ (1,000,971) | $ (1,615,820) | $ (3,285,410) | ||||
Net cash used in operating activities | (500,784) | (1,553,488) | ||||||
Working capital (deficiency) | (18,617,952) | (18,617,952) | ||||||
Total stockholders' deficiency | $ (18,812,286) | $ (13,458,783) | $ (18,812,286) | $ (13,458,783) | $ (18,328,927) | $ (17,769,177) | $ (12,618,957) | $ (10,509,554) |
4. Convertible Notes and Note_3
4. Convertible Notes and Notes Payable (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Debt original principal | $ 8,786,484 | $ 8,515,098 |
Debt amount at period end | 6,850,979 | 6,634,206 |
Unamortized discount | 0 | 24,435 |
Carrying amount at period end | 6,850,979 | 6,609,771 |
Debt related party current | 2,469,973 | 2,485,973 |
Debt related party noncurrent | 0 | 0 |
Debt current | 4,186,672 | 3,955,464 |
Debt noncurrent | $ 194,334 | $ 168,334 |
Notes payable 1 | ||
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 | 5,500 | 9,379 |
Unamortized discount | 0 | 0 |
Carrying amount at period end | 5,500 | 9,379 |
Debt related party current | 0 | 0 |
Debt related party noncurrent | 0 | 0 |
Debt current | 5,500 | 9,379 |
Debt noncurrent | $ 0 | $ 0 |
Notes payable 2 | ||
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 | ||
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 | ||
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 | ||
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 | ||
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 | ||
Debt issuance date | Feb. 3, 2012 | Feb. 3, 2018 |
Debt maturity date | Dec. 3, 2019 | Dec. 31, 2018 |
Debt stated interest rate | 10.00% | 10.00% |
Debt original principal | $ 1,000,000 | $ 1,000,000 |
Debt amount at period end | 1,000,000 | 1,000,000 |
Unamortized discount | 0 | 0 |
Carrying amount at period end | 1,000,000 | 1,000,000 |
Debt related party current | 0 | 0 |
Debt related party noncurrent | 0 | 0 |
Debt current | 1,000,000 | 1,000,000 |
Debt noncurrent | $ 0 | $ 0 |
Notes payable 8 | ||
Debt issuance date | Aug. 15, 2013 | Aug. 15, 2013 |
Debt maturity date | Oct. 31, 2023 | Oct. 31, 2023 |
Debt stated interest rate | 10.00% | 10.00% |
Debt original principal | $ 525,000 | $ 525,000 |
Debt amount at period end | 158,334 | 158,334 |
Unamortized discount | 0 | 0 |
Carrying amount at period end | 158,334 | 158,334 |
Debt related party current | 0 | 0 |
Debt related party noncurrent | 0 | 0 |
Debt current | 0 | 0 |
Debt noncurrent | $ 158,334 | $ 158,334 |
Notes payable 9 | ||
Debt issuance date | Dec. 31, 2013 | Dec. 31, 2013 |
Debt maturity date | Dec. 31, 2015 | Dec. 31, 2015 |
Debt stated interest rate | 8.00% | 8.00% |
Debt original principal | $ 290,000 | $ 290,000 |
Debt amount at period end | 130,000 | 130,000 |
Unamortized discount | 0 | 0 |
Carrying amount at period end | 130,000 | 130,000 |
Debt related party current | 0 | 0 |
Debt related party noncurrent | 0 | 0 |
Debt current | 130,000 | 130,000 |
Debt noncurrent | $ 0 | $ 0 |
Notes payable 10 | ||
Debt issuance date | Apr. 1, 2014 | Apr. 1, 2014 |
Debt maturity date | Dec. 31, 2018 | Dec. 31, 2018 |
Debt stated interest rate | 10.00% | 10.00% |
Debt original principal | $ 2,265,000 | $ 2,265,000 |
Debt amount at period end | 1,102,500 | 1,102,500 |
Unamortized discount | 0 | 0 |
Carrying amount at period end | 1,102,500 | 1,102,500 |
Debt related party current | 1,102,500 | 1,102,500 |
Debt related party noncurrent | 0 | 0 |
Debt current | 0 | 0 |
Debt noncurrent | $ 0 | $ 0 |
Notes payable 11 | ||
Debt issuance date | Dec. 22, 2014 | Dec. 22, 2014 |
Debt maturity date | Mar. 31, 2015 | Mar. 31, 2015 |
Debt stated interest rate | 22.00% | 22.00% |
Debt original principal | $ 200,000 | $ 200,000 |
Debt amount at period end | 200,000 | 200,000 |
Unamortized discount | 0 | 0 |
Carrying amount at period end | 200,000 | 200,000 |
Debt related party current | 0 | 0 |
Debt related party noncurrent | 0 | 0 |
Debt current | 200,000 | 200,000 |
Debt noncurrent | $ 0 | $ 0 |
Notes payable 12 | ||
Debt issuance date | Dec. 26, 2014 | Dec. 26, 2014 |
Debt maturity date | Dec. 26, 2015 | Dec. 26, 2015 |
Debt stated interest rate | 22.00% | 22.00% |
Debt original principal | $ 100,000 | $ 100,000 |
Debt amount at period end | 100,000 | 100,000 |
Unamortized discount | 0 | 0 |
Carrying amount at period end | 100,000 | 100,000 |
Debt related party current | 0 | 0 |
Debt related party noncurrent | 0 | 0 |
Debt current | 100,000 | 100,000 |
Debt noncurrent | $ 0 | $ 0 |
Notes payable 13 | ||
Debt issuance date | Mar. 12, 2015 | Mar. 12, 2015 |
Debt maturity date | Maturity date is 90 days after demand. | Maturity date is 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 14 | ||
Debt issuance date | Apr. 7, 2015 | Apr. 7, 2015 |
Debt maturity date | Apr. 7, 2018 | Apr. 7, 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 15 | ||
Debt issuance date | Nov. 23, 2015 | Nov. 23, 2015 |
Debt maturity date | Maturity date is 90 days after demand. | Maturity date is 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 16 | ||
Debt issuance date | Feb. 25, 2016 | Feb. 25, 2016 |
Debt maturity date | Maturity date is 90 days after demand. | Maturity date is 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 17 | ||
Debt issuance date | May 20, 2016 | May 20, 2016 |
Debt maturity date | Maturity date is 90 days after demand. | Maturity date is 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 18 | ||
Debt issuance date | Oct. 20, 2016 | Oct. 20, 2016 |
Debt maturity date | Maturity date is 90 days after demand. | Maturity date is 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 19 | ||
Debt issuance date | Oct. 20, 2016 | Oct. 20, 2016 |
Debt maturity date | Maturity date is 90 days after demand. | Maturity date is 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 | 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 20 | ||
Debt issuance date | Dec. 21, 2016 | Dec. 21, 2016 |
Debt maturity date | Maturity date is 90 days after demand. | Maturity date is 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 | 0 | 0 |
Carrying amount at period end | 25,000 | 25,000 |
Debt related party current | 25,000 | 25,000 |
Debt related party noncurrent | 0 | 0 |
Debt current | 0 | 0 |
Debt noncurrent | $ 0 | $ 0 |
Notes payable 21 | ||
Debt issuance date | Mar. 9, 2017 | Mar. 9, 2017 |
Debt maturity date | Maturity date is 90 days after demand. | Maturity date is 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 22 | ||
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 | 25,000 |
Debt noncurrent | $ 0 | $ 0 |
Notes payable 23 | ||
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 | 25,000 |
Debt noncurrent | $ 0 | $ 0 |
Notes payable 24 | ||
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 | 15,000 |
Debt noncurrent | $ 0 | $ 0 |
Notes payable 25 | ||
Debt issuance date | Jul. 27, 2017 | |
Debt maturity date | Jul. 27, 2019 | |
Debt stated interest rate | 6.00% | |
Debt original principal | $ 15,000 | |
Debt amount at period end | 15,000 | |
Unamortized discount | 0 | |
Carrying amount at period end | 15,000 | |
Debt related party current | 0 | |
Debt related party noncurrent | 0 | |
Debt current | 15,000 | |
Debt noncurrent | $ 0 | |
Notes payable 26 | ||
Debt issuance date | Dec. 20, 2017 | Dec. 20, 2017 |
Debt maturity date | Bridge loans were issued at 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. | Bridge loans were issued at 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 | $ 979,156 |
Debt amount at period end | 979,156 | 979,156 |
Unamortized discount | 0 | 24,435 |
Carrying amount at period end | 979,156 | 954,721 |
Debt related party current | 0 | 0 |
Debt related party noncurrent | 0 | 0 |
Debt current | 979,156 | 954,721 |
Debt noncurrent | $ 0 | $ 0 |
Notes payable 27 | ||
Debt issuance date | Nov. 6, 2017 | Nov. 6, 2017 |
Debt maturity date | Dec. 31, 2018 | Dec. 31, 2018 |
Debt stated interest rate | 10.00% | 10.00% |
Debt original principal | $ 646,568 | $ 646,568 |
Debt amount at period end | 596,093 | 612,093 |
Unamortized discount | 0 | 0 |
Carrying amount at period end | 596,093 | 612,093 |
Debt related party current | 596,093 | 612,093 |
Debt related party noncurrent | 0 | 0 |
Debt current | 0 | 0 |
Debt noncurrent | $ 0 | $ 0 |
Notes payable 28 | ||
Debt issuance date | Feb. 19, 2018 | Feb. 19, 2018 |
Debt maturity date | L2 - Note was drawn down in five tranches between 02/16/18 and 05/02/18. | L2 - Note was drawn down in five tranches between 02/16/18 and 05/02/18. |
Debt stated interest rate | 1800.00% | 18.00% |
Debt original principal | $ 629,451 | $ 629,451 |
Debt amount at period end | 594,717 | 629,451 |
Unamortized discount | 0 | 0 |
Carrying amount at period end | 594,717 | 629,451 |
Debt related party current | 0 | 0 |
Debt related party noncurrent | 0 | 0 |
Debt current | 594,717 | 629,451 |
Debt noncurrent | $ 0 | $ 0 |
Notes payable 29 | ||
Debt issuance date | Sep. 19, 2018 | Sep. 19, 2018 |
Debt maturity date | Sep. 28, 2021 | Sep. 28, 2021 |
Debt stated interest rate | 6.00% | 6.00% |
Debt original principal | $ 10,000 | $ 10,000 |
Debt amount at period end | 10,000 | 10,000 |
Unamortized discount | 0 | 0 |
Carrying amount at period end | 10,000 | 10,000 |
Debt related party current | 0 | 0 |
Debt related party noncurrent | 0 | 0 |
Debt current | 0 | 0 |
Debt noncurrent | $ 10,000 | $ 10,000 |
Notes payable 30 | ||
Debt issuance date | Dec. 14, 2018 | Dec. 14, 2018 |
Debt maturity date | Dec. 22, 2018 | Dec. 22, 2018 |
Debt stated interest rate | 24.00% | 24.00% |
Debt original principal | $ 474,759 | $ 524,373 |
Debt amount at period end | 474,759 | 524,373 |
Unamortized discount | 0 | 0 |
Carrying amount at period end | 474,759 | 524,373 |
Debt related party current | 0 | 0 |
Debt related party noncurrent | 0 | 0 |
Debt current | 474,759 | 524,373 |
Debt noncurrent | $ 0 | $ 0 |
Notes payable 31 | ||
Debt issuance date | Jan. 2, 2019 | |
Debt maturity date | Loans were issued from January 2, 2019 to March 23, 2019. Principal and interest are due when funds are received from the litigation between Ocean Thermal Energy Corporation vs., Robert Coe el al. | |
Debt stated interest rate | 17.00% | |
Debt original principal | $ 310,000 | |
Debt amount at period end | 310,000 | |
Unamortized discount | 0 | |
Carrying amount at period end | 310,000 | |
Debt related party current | 0 | |
Debt related party noncurrent | 0 | |
Debt current | 310,000 | |
Debt noncurrent | $ 0 | |
Notes payable 32 | ||
Debt issuance date | Aug. 14, 2019 | |
Debt maturity date | Oct. 31, 2021 | |
Debt stated interest rate | 8.00% | |
Debt original principal | $ 26,000 | |
Debt amount at period end | 26,000 | |
Unamortized discount | 0 | |
Carrying amount at period end | 26,000 | |
Debt related party current | 0 | |
Debt related party noncurrent | 0 | |
Debt current | 0 | |
Debt noncurrent | $ 26,000 |
5. Derivative Liability (Detail
5. Derivative Liability (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Derivative liability | $ 1,562,687 | $ 2,292,254 |
Level 1 | ||
Derivative liability | 0 | |
Level 2 | ||
Derivative liability | 0 | |
Level 3 | ||
Derivative liability | $ 1,562,687 |
5. Derivative Liability (Deta_2
5. Derivative Liability (Details 1) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Derivative Liability [Abstract] | ||||
Derivative liability, beginning | $ 2,292,254 | |||
Fair value at the commitment date for convertible instruments | 0 | |||
Change in fair value of derivative liability | $ (156,031) | $ 72,065 | (608,040) | $ 72,065 |
Reclassification to additional paid-in capital for financial instruments that ceased to be a derivative liability | (121,527) | |||
Derivative liability, ending | 1,562,687 | 1,562,687 | ||
Change in fair value of derivative liability, beginning | 1,206,857 | |||
Day one gains/(losses) on valuation | 0 | |||
Gains/(losses) from the change in fair value of derivative liability | (1,814,897) | |||
Change in fair value of derivative liability, ending | $ 608,040 | $ 608,040 |
5. Derivative Liability (Deta_3
5. Derivative Liability (Details 2) - Remeasurement Date | 9 Months Ended |
Sep. 30, 2019 | |
Expected dividends | 0.00% |
Minimum | |
Expected volatility | 48.80% |
Risk free interest rate | 1.56% |
Expected term (in years) | 29 days |
Maximum | |
Expected volatility | 487.30% |
Risk free interest rate | 1.91% |
Expected term (in years) | 3 years 10 months 17 days |
6. Stockholders' Equity (Detail
6. Stockholders' Equity (Details) - Warrants | 9 Months Ended |
Sep. 30, 2019$ / sharesshares | |
Number of Warrants | |
Warrants outstanding, beginning | shares | 350,073 |
Warrants granted | shares | 0 |
Warrants exercised | shares | 0 |
Warrants forfeited | shares | 0 |
Warrants outstanding, ending | shares | 350,073 |
Warrants exercisable | shares | 350,073 |
Weighted Average Exercise Price | |
Warrants outstanding, beginning | $ / shares | $ .18 |
Warrants granted | $ / shares | .00 |
Warrants exercised | $ / shares | .00 |
Warrants forfeited | $ / shares | .00 |
Warrants outstanding, ending | $ / shares | 0.18 |
Warrants exercisable | $ / shares | $ 0.18 |
6. Stockholders' Equity (Deta_2
6. Stockholders' Equity (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | |
Stockholders' deficiency | |||
Stock issued for conversions of notes payable, shares | 3,238,308 | ||
Stock issued for conversions of notes payable, value | $ 10,000 | $ 84,347 | $ 18,190 |
8. Related-party Transactions (
8. Related-party Transactions (Details Narrative) | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Company Controlled by the CEO | |
Rent expense | $ 90,000 |