Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | May 15, 2017 | |
Document And Entity Information | ||
Entity Registrant Name | TETRIDYN SOLUTIONS INC | |
Entity Central Index Key | 827,099 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 247,178 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,017 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Current Assets | ||
Cash | $ 1,784 | $ 14,343 |
Total Current Assets | 1,784 | 14,343 |
Total Assets | 1,784 | 14,343 |
Current Liabilities | ||
Accounts Payable | 202,867 | 201,586 |
Accrued liabilities | 414,765 | 393,794 |
Notes payable | 294,353 | 294,353 |
Convertible note payable, related party | 162,500 | 671,380 |
Notes payable, related party | 549,031 | 0 |
Total Current Liabilities | 1,623,516 | 1,561,113 |
Total Liabilities | 1,623,516 | 1,561,113 |
COMMITMENTS AND CONTINGENCIES (See Note 7) | ||
STOCKHOLDERS' DEFICIT | ||
Preferred stock - $0.001 par value; Authorized: 5,000,000 shares; Issued and outstanding: 0 shares and 0 shares, respectively | 0 | 0 |
Common stock - $0.001 par value: Authorized December 31, 2016 400,000 shares, Authorized March 31, 2017 400,000 shares; Issued and outstanding December 31, 2016 247,178 shares; Issued and outstanding March 31, 2017 247,178 shares | 246 | 246 |
Additional paid-in capital | 3,723,609 | 3,723,609 |
Accumulated deficit | (5,345,587) | (5,270,625) |
Total Stockholders' Deficit | (1,621,732) | (1,546,770) |
Total Liabilities and Stockholders' Deficit | $ 1,784 | $ 14,343 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.001 | $ .001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ .001 |
Common stock, shares authorized | 400,000 | 400,000 |
Common stock, shares issued | 247,178 | 247,178 |
Common stock, shares outstanding | 247,178 | 247,178 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Income Statement [Abstract] | ||
Revenue | $ 0 | $ 49 |
Cost of Revenue | 0 | 0 |
Gross Profit | 0 | 49 |
Operating Expenses | ||
General and administrative | 24,692 | 21,167 |
Professional fees | 36,061 | 25,076 |
Total Operating Expenses | 60,753 | 46,243 |
Net Loss from Operations | (60,753) | (46,194) |
Other Income (Expenses) | ||
Interest Expense | (14,209) | (31,497) |
Total Other Income (Expenses) | (14,209) | (31,497) |
Net Loss before Provision for Income Taxes | (74,962) | (77,691) |
Provision for Income Taxes | 0 | 0 |
Net Loss | $ (74,962) | $ (77,691) |
Total Basic and Diluted Loss Per Common Share | $ (.30) | $ (.36) |
Basic and Diluted Weighted-Average Common Shares Outstanding | 247,178 | 213,617 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Cash Flows from Operating Activities | ||
Net Loss | $ (74,962) | $ (77,691) |
Adjustments to reconcile net loss from operations to net cash used in operating activities: | ||
Amortization of note discount | 0 | 17,105 |
Changes in operating assets and liabilities: | ||
Prepaid expenses | 0 | 2,478 |
Accrued expenses | 20,971 | 16,513 |
Accounts payable | 1,281 | (30,207) |
Net Cash Used in Operating Activities | (52,710) | (71,802) |
Cash Flows from Investing Activities | ||
Net Cash Provided by Investing Activities | 0 | 0 |
Cash Flows from Financing Activities | ||
Proceeds from related party debt | 40,151 | 67,500 |
Net Cash provided by Financing Activities | 40,151 | 67,500 |
Net Increase (Decrease) in Cash | (12,559) | (4,302) |
Cash at Beginning of Period | 14,343 | 4,667 |
Cash at End of Period | 1,784 | 365 |
Supplemental Disclosure of Cash Flow Information: | ||
Cash paid for income taxes | 0 | 0 |
Cash paid for interest expense and lines of credit | 2,600 | 4,256 |
Noncash Transactions | ||
Beneficial conversion feature on convertible note payable | 0 | 3,333 |
Amendment to remove conversion on convertible related party debt | $ 549,031 | $ 0 |
1. Nature of Business and Basis
1. Nature of Business and Basis of Presentation | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Nature of Business and Basis of Presentation | TetriDyn Solutions, Inc. (“TetriDyn”, the “Company”, “we”, and “us”) is currently in the business of facilitating the development of sustainable living communities by creating ecologically sustainable “EcoVillages” powered by 100% fossil-fuel free electricity, buildings cooled by energy efficient and chemical free systems, and on-site water produced for drinking, aquaculture and agriculture (the “EcoVillages Business”). As previously reported in the Current Report on Form 8-K filed by the Company with the Securities and Exchange Commission (“SEC”) on December 12, 2016 (the “Form 8-K”), as subsequently amended by that certain Current Report on Form 8-K/A filed by the Company with the SEC on December 20, 2016 (the “Form 8-K/A” and together with the Form 8-K, the “December Form 8-K”), on December 8, 2016 the Company completed the purchase of all assets of JPF Venture Group, Inc. (“JPF”) used primarily in connection with the EcoVillages Business, pursuant to the terms of an Asset Purchase Agreement dated December 8, 2016 (the “EcoVillage Acquisition”). JPF is an entity owned and controlled by Jeremy Feakins, the Chief Executive Officer and Chief Financial Officer of the Company and a member of the Board of Directors of the Company. These assets were recorded at a historical cost of $0.00. Subsequent to the EcoVillage Acquisition, the Company refocused on a possible merger with Ocean Thermal Energy Corporation, a Delaware corporation, which is developing projects for renewable power generation, desalinated water production, and air conditioning using its proprietary technologies designed to extract energy from the temperature differences between warm surface water and cold deep water. On March 1, 2017, an Agreement and Plan of Merger was entered into between TetriDyn Solutions Inc. and Ocean Thermal Energy Corporation. The intent of entering into such agreement is to achieve the business goals of both companies. See Note 7–Commitments and Contingencies and Note 8 – Subsequent Events for more details about this merger. Prior to the EcoVillage Acquisition, the Company specialized in providing business information technology (IT) solutions to our customers through the optimization of business and IT processes by using systems engineering methodologies, strategic planning, and system integration to develop radio frequency identification products to address location tracking issues in the healthcare industry, including issues surrounding patient care; optimization of business processes for healthcare providers, improved reporting of incidents, and increased revenues for provided services. The condensed consolidated financial statements include the accounts of the Company and our wholly-owned subsidiary, an Idaho corporation also named TetriDyn Solutions, Inc. Intercompany accounts and transactions have been eliminated in consolidation. In the opinion of management, our financial statements reflect all adjustments that are of a normal recurring nature necessary for presentation of financial statements for interim periods in accordance with U.S. generally accepted accounting principles (GAAP) and with the instructions to Form 10-Q in Article 10 of SEC Regulation S-X. As used in this report, the terms “we,” “us,” and “our” mean TetriDyn Solutions, Inc., and its subsidiary, unless the context indicates otherwise. We condensed or omitted certain information and footnote disclosures normally included in our annual audited financial statements, which we prepared in accordance with GAAP. Our interim financial statements should be read in conjunction with our annual report on Form 10-K for the year ended December 31, 2016, including the financial statements and notes thereto. In preparing financial statements in conformity with GAAP, we are required to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reported period. |
2. Organization and Summary of
2. Organization and Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Organization and Summary of Significant Accounting Policies | Principles of Consolidation– Business Segments– Use of Estimates– Cash and Cash Equivalents– Revenue Recognition– Going Concern Income Taxes– No income tax expense was recognized for the three-month periods ended March 31, 2017 and 2016, due to net losses being incurred in these periods. We are subject to audit by the Internal Revenue Service and various states for the prior three years. There has not been a change in our unrecognized tax positions since December 31, 2016, and we do not believe there will be any material changes in our unrecognized tax positions over the next 12 months. Our policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. We do not have any accrued interest or penalties associated with any unrecognized tax benefits, and no interest expense related to unrecognized tax benefits was recognized during the three months ended March 31, 2017. Fair Value of Financial Instruments The accounting standard for fair value measurements provides a framework for measuring fair value and requires expanded disclosures regarding fair value measurements. Fair value is defined as the price that would be received for an asset or the exit price that would be paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. The accounting standard establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs, where available. The following summarizes the three levels of inputs required as well as the assets and liabilities that we value using those levels of inputs. • Level 1 • Level 2 • Level 3 A review of fair value hierarchy classifications is conducted on a quarterly basis. Changes in the observability of valuation inputs may result in a reclassification for certain financial assets or liabilities. We did not have any significant nonfinancial assets or nonfinancial liabilities that would be recognized or disclosed at fair value on a recurring basis as of March 31, 2017, nor did we have any assets or liabilities measured at fair value on a nonrecurring basis to report in the first three months of 2017. Property and Equipment– Net Loss per Common Share– Earnings Per Share |
3. Recent Accounting Pronouncem
3. Recent Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | In August 2016, the FASB issued Accounting Standards Update 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments . We have reviewed all other 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. |
4. Accounts Payable and Accrued
4. Accounts Payable and Accrued Liabilities | 3 Months Ended |
Mar. 31, 2017 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Liabilities | As of March 31, 2017, the Company had $202,867 in accounts payable, the majority of which is for professional services performed for us in prior periods and other obligations to former directors. As of March 31, 2017, the Company had $414,765 in accrued liabilities. The accrued liabilities included interest of $147,875 and $213,436 in unpaid salaries to two of the Company’s former officers, which were assigned by the officers to JPF pursuant to an Investment Agreement dated March 12, 2015 ( see |
5. Notes Payable and Advances O
5. Notes Payable and Advances Owed to Related Parties | 3 Months Ended |
Mar. 31, 2017 | |
Related Party Transactions [Abstract] | |
Notes Payable and Advances Owed to Related Parties | On March 12, 2015, the Company exchanged convertible notes issued in 2010, 2011, and 2012, payable to its officers and directors in the aggregate principal amount of $320,246, plus accrued but unpaid interest of $74,134, into a single, $394,380 consolidated convertible note. The consolidated convertible note was assigned to JPF, the Company’s principal stockholder and an investment entity that is majority-owned by Jeremy Feakins, the Company’s director, chief executive officer, and chief financial officer. The new consolidated note was convertible to common stock at $6.25 per share (as adjusted by reason of the Company’s 1 for 250 reverse stock split, as reported in the December Form 8-K), the approximate market price of the Company’s common stock as of the date of the issuance. However, as further discussed in the Current Report on Form 8-K filed by the Company with the SEC on March 2, 2017 (the “ March Form 8-K On March 12, 2015, the Company assigned the liabilities for unpaid salaries of two of its former officers in the amount of $213,436, evidenced by a consolidated promissory note dated December 31, 2014, to JPF. This note does not bear any interest. On December 31, 2016, the $213,436 was reclassified as Accrued Expenses. On June 23, 2015, the Company borrowed $50,000 from its principal stockholder JPF, as evidenced by a convertible promissory note issued to JPF by the Company. The Company received $25,000 on July 31, 2015, and the remaining $25,000 on August 18, 2015. The terms of the note are as follows: (i) interest is payable at 6% per annum; (ii) the note is payable 90 days after demand; and (iii) the payee is authorized to convert part or all of the note balance and accrued interest, if any, into shares of the Company’s common stock at the rate of one share each for $0.03 of principal amount of the note. This conversion price is not required to adjust for the Company’s 1 for 250 reverse stock split pursuant to the terms of the promissory note. As of March 31, 2017, the outstanding balance was $50,000, plus accrued interest of $5,000. The Company recorded a debt discount of $50,000 for the fair value of the beneficial conversion feature. As of December 31, 2015, the Company amortized $50,000 of the debt discount. On November 23, 2015, the Company borrowed $50,000 from its principal stockholder JPF, as evidenced by a convertible promissory note issued to JPF by the Company. The Company received $37,500 before December 31, 2015, and the remaining $12,500 was received after the year-end. The terms of the note are as follows: (i) interest is payable at 6% per annum; (ii) the note is payable 90 days after demand; and (iii) the payee is authorized to convert part or all of the note balance and accrued interest, if any, into shares of the Company’s common stock at the rate of one share each for $0.03 of principal amount of the note. This conversion price is not required to adjust for the Company’s 1 for 250 reverse stock split pursuant to the terms of the promissory note. As of March 31, 2017, the outstanding balance was $50,000, plus accrued interest of $3,757. The Company recorded a debt discount of $24,667 for the fair value of the beneficial conversion feature. As of December 31, 2015, the Company amortized $10,415 of the debt discount. On February 25, 2016, the Company borrowed $50,000 from JPF as evidenced by a promissory note issued by the Company to JPF. The terms of the note are as follows: (i) interest is payable at 6% per annum; and (ii) the note is payable 90 days after demand. Originally, the payee was authorized to convert part or all of the note balance and accrued interest, if any, into shares of the Company’s common stock at the rate of one share for each $0.03 of principal amount of the note and this conversion price was not required to adjust for the Company’s 1 for 250 reverse stock split pursuant to the terms of the promissory note. However, as disclosed in the March Form 8-K on February 24, 2017, the Company entered into an amendment with JPF to eliminate the conversion feature of the note. As of March 31, 2017, the outstanding balance was $50,000, plus accrued interest of $3,345. On May 20, 2016, the Company borrowed $50,000 from its principal stockholder JPF as evidenced by a promissory note issued by the Company to JPF. The terms of the note are as follows: (i) interest is payable at 6% per annum; and (ii) the note is payable 90 days after demand. Originally, the payee was authorized to convert part or all of the note balance and accrued interest, if any, into shares of the Company’s common stock at the rate of one share for each $0.03 of principal amount of the note and this conversion price was not required to adjust for the Company’s 1 for 250 reverse stock split pursuant to the terms of the promissory note. However, as disclosed in the March Form 8-K on February 24, 2017, the Company entered into an amendment with JPF to eliminate the conversion feature of the note. As of March 31, 2017, the outstanding balance was $50,000, plus accrued interest of $2,497. On October 20, 2016, the Company borrowed $12,500 from its principal stockholder JPF as evidenced by a promissory note issued by the Company to JPF. The terms of the note are as follows: (i) interest is payable at 6% per annum; and (ii) the note is payable 90 days after demand. Originally, the payee was authorized to convert part or all of the note balance and accrued interest, if any, into shares of the Company’s common stock at the rate of one share for each $0.03 of principal amount of the note and this conversion price was not required to adjust for the Company’s 1 for 250 reverse stock split pursuant to the terms of the promissory note. However, as disclosed in the March Form 8-K on February 24, 2017, the Company entered into an amendment with JPF to eliminate the conversion feature of the note. As of March 31, 2017, the outstanding balance was $12,500, plus accrued interest of $918. Also on October 20, 2016, the Company borrowed $12,500 from its independent director as evidenced by a convertible promissory note issued by the Company to the independent director. 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 the Company’s common stock at the rate of one share for each $0.03 of principal amount of the note. This conversion price is not required to adjust for the Company’s 1 for 250 reverse stock split pursuant to the terms of the promissory note. As of March 31, 2017, the outstanding balance was $12,500, plus accrued interest of $421. Also on October 20, 2016, the Company borrowed $25,000 from a stockholder as evidenced by a convertible promissory note issued by the Company to the stockholder. 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 the Company’s common stock at the rate of one share for each $0.03 of principal amount of the note. This conversion price was not required to adjust for the Company’s 1 for 250 reverse stock split pursuant to the terms of the promissory note. As of March 31, 2017, the outstanding balance was $25,000, plus accrued interest of $654. On November 29, 2016, the Company received a $2,000 non-interest bearing loan from Jeremy P. Feakins & Associates, an investment entity that is majority-owned by Jeremy Feakins, the Company’s director, chief executive officer, and chief financial officer. On December 21, 2016, the Company borrowed $25,000 from its principal stockholder JPF as evidenced by a convertible promissory note issued by the Company to JPF. 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 the Company’s common stock at the rate of one share for each $0.03 of principal amount of the note. This conversion price is not required to adjust for the Company’s 1 for 250 reverse stock split pursuant to the terms of the promissory note. As of March 31, 2017, the outstanding balance was $25,000, plus accrued interest of $417. On March 8, 2017, the Company received a $34,773 non-interest bearing loan from the Ocean Thermal Energy Corporation, whose director and chief executive officer is Jeremy Feakins, the Company’s director, chief executive officer, and chief financial officer. On March 31, 2017, the Company received a $5,377 non-interest bearing loan from JPF. As of March 31, 2017, the Company had $711,531 in notes payable due to related parties. |
6. Notes Payable in Default
6. Notes Payable in Default | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Notes Payable in Default | Since October 25, 2011, the Company has been in default on a loan from an economic development entity. The loan principal was $50,000 with accrued interest of $16,296 through March 31, 2017. As of March 31, 2017, the Company was delinquent in payments on two loans to a second economic development entity. The Company owed this economic entity $94,493 in late payments, with an outstanding balance of $158,532 and accrued interest of $33,151 as of March 31, 2017. Both loans are guaranteed by two of the Company’s officers. One loan is secured by liens on the Company’s intangible software assets, and the other loan is secured by the officers’ personal property. The Company is working with this entity to bring the payments current as soon as the Company’s cash flow permits. As of March 31, 2017, the Company was delinquent in payments on a loan to a third economic development entity. The Company owed the third economic entity $85,821 in late payments, with an outstanding balance of $85,821 and accrued interest of $28,734 as of March 31, 2017. This loan is secured by a junior lien on all the Company’s assets and shares of the Company’s common stock owned by certain founders of the Company. The Company is working with this entity to bring the payments current as soon as cash flow permits. |
7. Commitments and Contingencie
7. Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Due to the nature of our business, certain legal or administrative proceedings may arise from time to time in the ordinary course of business. In our opinion, there are no material pending legal proceedings to which we are a party, of which any of our property is the subject, or for which an outcome adverse to us would have a material adverse effect on our financial condition, results of operations, or cash flows. Common Stock – Increase in Authorized shares - Merger, Forward Stock Split and Name Change In order to effect the Merger, immediately prior to the consummation of the Merger, TetriDyn shall effect a recapitalization that consists of a 2.1676 forward split (the “Forward Stock Split”) of its 247,178 shares of issued and outstanding stock. The Forward Stock Split was approved by the Board on February 28, 2017 and the holders of a majority of the outstanding shares of the Company’s common stock on April 12, 2017, and will be effected by the filing of the Amendment with the Secretary of State of the State of Nevada. Effective upon the consummation of the Merger (the “Closing”), each share of the common stock of OTE issued and outstanding immediately prior to the Closing (“OTE Stock”) will be converted into the right to receive one fully-paid and nonassessable newly-issued share of TetriDyn’s Common Stock following the Forward Stock Split (the (the “New TetriDyn Stock”), subject to certain restrictions on transfer as provided in the Merger Agreement and subject to the rights of certain holders of shares of OTE Stock to exercise their rights as dissenters to seek an appraisal of the fair value thereof as provided under Delaware Law (each, a “Dissenting OTE Stockholder”). The number of shares of New TetriDyn Stock issued to the stockholders OTE, including shares that would have been issuable to Dissenting OTE Stockholders had they not dissented, together with the number of shares issuable on the exercise of outstanding warrants and the conversion of outstanding bonds of OTE shall constitute, on a fully diluted basis, 90% of the number of shares of common stock of TetriDyn to on a fully-diluted basis after giving effect only to the Merger. The shares of common stock of TetriDyn, par value $0.001 per share (“TetriDyn Stock”), issued and outstanding immediately prior to the Closing will remain issued and outstanding. No shares of preferred stock of TetriDyn are issued and outstanding, and TetriDyn has no existing convertible securities or stock equivalent securities convertible or exercisable for shares of TetriDyn preferred stock. In connection with the consummation of the Merger, immediately prior to the Closing, TetriDyn shall file with the Amendment with the Nevada Secretary of State in order to change its name to “Ocean Thermal Energy Corporation” (the “Name Change”) or such other name as may be available and acceptable to the parties to the Merger Agreement. On March 1, 2015, the Company entered into a lease agreement with a company whose managing partner is the Company’s Chief Executive Officer, and rents space on a month-to-month basis with no long-term commitment. On January 1, 2017 the Company signed an amendment with the landlord increasing the monthly rent to $5,000 per month commencing on January 1, 2017. Rent expense per this agreement was $15,000 for the three months ending March 31, 2017. |
8. Subsequent Events
8. Subsequent Events | 3 Months Ended |
Mar. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | As discussed above in Note 7, on April 14, 2017, the Company filed the Schedule 14C with the SEC disclosing the approval by the Board and the holders of a majority of the outstanding shares of common stock of the Company of the Amendment in order to effect the Forward Stock Split, the Authorized Share Increase and the Name Change to for the principal purpose of facilitating the Merger, as well as the approval of the Merger. The Company currently has 400,000 shares of Common Stock authorized for issuance, of which 247,178 shares are outstanding and the remaining 152,822 shares are available for issuance. The Company also has 5,000,000 shares of Preferred Stock of which no shares are outstanding. As discussed in Note 7 above, pursuant to the Amendment, immediately prior to the consummation of the Merger, the Company will effect a forward stock split of the issued and outstanding shares of common stock on an approximately 2.1676-for-1 basis. At the Closing of the Merger, the Company will issue a maximum of approximately 109,970,443 shares of its common stock to the current stockholders of OTE and reserve a maximum of approximately 508,986 additional shares for issuance upon the exercise of warrants and convertible debentures that they will issue in the Merger in exchange for outstanding warrants and convertible debentures to purchase shares of OTE common stock. At present, therefore, the Company does not have sufficient available authorized shares to complete the Merger. The principal purpose of the Amendment is to increase our authorized shares (to 200,000,000 shares) for this purpose. The Company has no present commitment to issue any shares of common stock or preferred stock other than in connection with the Merger, except upon conversion of the convertible promissory notes (See Note 5). The Amendment will also change our corporate name to “Ocean Thermal Energy Corporation” to reflect that, as a result of the Merger, the Company will succeed to the business and operations of OTE. The Merger is anticipated to be effective on or around May 9, 2017. |
2. Organization and Summary o14
2. Organization and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation– |
Business Segments | Business Segments– |
Use of Estimates | Use of Estimates– |
Cash and Cash Equivalents | Cash and Cash Equivalents– |
Revenue Recognition | Revenue Recognition– |
Going Concern | Going Concern |
Income Taxes | Income Taxes– No income tax expense was recognized for the three-month periods ended March 31, 2017 and 2016, due to net losses being incurred in these periods. We are subject to audit by the Internal Revenue Service and various states for the prior three years. There has not been a change in our unrecognized tax positions since December 31, 2016, and we do not believe there will be any material changes in our unrecognized tax positions over the next 12 months. Our policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. We do not have any accrued interest or penalties associated with any unrecognized tax benefits, and no interest expense related to unrecognized tax benefits was recognized during the three months ended March 31, 2017. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The accounting standard for fair value measurements provides a framework for measuring fair value and requires expanded disclosures regarding fair value measurements. Fair value is defined as the price that would be received for an asset or the exit price that would be paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. The accounting standard establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs, where available. The following summarizes the three levels of inputs required as well as the assets and liabilities that we value using those levels of inputs. · Level 1 · Level 2 · Level 3 A review of fair value hierarchy classifications is conducted on a quarterly basis. Changes in the observability of valuation inputs may result in a reclassification for certain financial assets or liabilities. We did not have any significant nonfinancial assets or nonfinancial liabilities that would be recognized or disclosed at fair value on a recurring basis as of March 31, 2017, nor did we have any assets or liabilities measured at fair value on a nonrecurring basis to report in the first three months of 2017. |
Property and Equipment | Property and Equipment– |
Net Loss per Common Share | Net Loss per Common Share– Earnings Per Share |
2. Organization and Summary o15
2. Organization and Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Net loss | $ (74,962) | $ (77,691) | |
Net cash used in operating activities | (52,710) | $ (71,802) | |
Working capital | (1,621,732) | ||
Stockholders' deficit | $ (1,621,732) | $ (1,546,770) | |
Stock Options [Member] | |||
Antidilutive shares excluded from EPS calculation | 0 | 0 | |
Convertible Notes Payable [Member] | |||
Antidilutive shares excluded from EPS calculation | 5,740,640 | 5,342,042 |
4. Accounts Payable and Accru16
4. Accounts Payable and Accrued Liabilities (Details Narrative) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Accounts payable | $ 202,867 | $ 201,586 |
Accrued liabilities | 414,765 | $ 393,794 |
Interest payable [Member] | ||
Accrued liabilities | 147,875 | |
Salaries payable [Member] | ||
Accrued liabilities | $ 213,436 |
5. Notes Payable and Advances17
5. Notes Payable and Advances Owed to Related Partiesl (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Accrued expenses | $ 414,765 | $ 393,794 | |
Debt current amount outstanding | 549,031 | $ 0 | |
Proceeds from related party debt | 40,151 | $ 67,500 | |
Notes payable due to related parties | $ 711,531 | ||
JPF Convertible Notes [Member] | |||
Debt issuance date | Mar. 12, 2015 | ||
Debt face amount | $ 394,380 | ||
Debt stated interest rate | 6.00% | ||
Accrued interest | $ 52,685 | ||
Promissory Note 2 [Member] | |||
Accrued expenses | $ 213,436 | ||
Promissory Note 3 [Member] | |||
Debt issuance date | Jun. 23, 2015 | ||
Debt face amount | $ 50,000 | ||
Accrued interest | 5,000 | ||
Debt current amount outstanding | $ 50,000 | ||
Promissory Note 4 [Member] | |||
Debt issuance date | Nov. 23, 2015 | ||
Debt face amount | $ 50,000 | ||
Accrued interest | 3,757 | ||
Debt current amount outstanding | $ 50,000 | ||
Promissory Note 5 [Member] | |||
Debt issuance date | Feb. 25, 2016 | ||
Debt face amount | $ 50,000 | ||
Accrued interest | 3,345 | ||
Debt current amount outstanding | $ 50,000 | ||
Promissory Note 6 [Member] | |||
Debt issuance date | May 20, 2016 | ||
Debt face amount | $ 50,000 | ||
Accrued interest | 2,497 | ||
Debt current amount outstanding | $ 50,000 | ||
Promissory Note 7 [Member] | |||
Debt issuance date | Oct. 20, 2016 | ||
Debt face amount | $ 12,500 | ||
Accrued interest | 918 | ||
Debt current amount outstanding | $ 12,500 | ||
Promissory Note 8 [Member] | |||
Debt issuance date | Oct. 20, 2016 | ||
Debt face amount | $ 12,500 | ||
Accrued interest | 421 | ||
Debt current amount outstanding | $ 12,500 | ||
Promissory Note 9 [Member] | |||
Debt issuance date | Oct. 20, 2016 | ||
Debt face amount | $ 25,000 | ||
Accrued interest | 654 | ||
Debt current amount outstanding | $ 25,000 | ||
Promissory Note 10 [Member] | |||
Debt issuance date | Nov. 29, 2016 | ||
Debt face amount | $ 2,000 | ||
Debt current amount outstanding | $ 2,000 | ||
Promissory Note 11 [Member] | |||
Debt issuance date | Dec. 21, 2016 | ||
Debt face amount | $ 25,000 | ||
Accrued interest | 417 | ||
Debt current amount outstanding | $ 25,000 | ||
Promissory Note 13 [Member] | |||
Debt issuance date | Mar. 8, 2017 | ||
Debt face amount | $ 34,773 | ||
Proceeds from related party debt | $ 34,773 | ||
Promissory Note 12 [Member] | |||
Debt issuance date | Mar. 31, 2017 | ||
Debt face amount | $ 5,377 | ||
Proceeds from related party debt | $ 5,377 |
6. Notes Payable in Default (De
6. Notes Payable in Default (Details Narrative) | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Economic Development Entity [Member] | |
Debt issuance date | Oct. 25, 2011 |
Debt face amount | $ 50,000 |
Accrued interest | 16,296 |
Economic Development Entity 2 [Member] | |
Accrued interest | 33,151 |
Notes payable in default | 158,532 |
Late payments owed | 94,493 |
Economic Development Entity 3 [Member] | |
Accrued interest | 28,734 |
Notes payable in default | 85,821 |
Late payments owed | $ 85,821 |
7. Commitments and Contingenc19
7. Commitments and Contingencies (Details Narrative) | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Reverse stock split | 1-for-250 basis |
Rent expense | $ 15,000 |