Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Mar. 29, 2019 | Jun. 30, 2018 | |
Document and Entity Information: | |||
Entity Registrant Name | POWERVERDE, INC. | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Amendment Flag | false | ||
Entity Central Index Key | 0000933972 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Common Stock, Shares Outstanding | 31,750,106 | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | true | ||
Entity Shell Company | false | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | No | ||
Document Fiscal Year Focus | 2018 | ||
Document Fiscal Period Focus | FY | ||
Entity Public Float | $ 2,392,000 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Current Assets: | ||
Cash and cash equivalents | $ 8,482 | $ 1,336 |
Accounts receivable | 10,000 | 369,959 |
Note receivable | 34,000 | |
Prepaid expenses | 10,866 | 8,694 |
Total Current Assets | 29,348 | 413,989 |
Property and Equipment | ||
Property and equipment, net of accumulated depreciation of $107,007 and $99,418, respectively | 633 | 8,222 |
Other Assets | ||
Intellectual property, net of accumulated amortization of $692,274 and $689,900, respectively | 2,374 | |
License, net of accumulated amortization of $25,822 and $15,822, respectively | 74,178 | 84,178 |
Total Other Assets | 74,178 | 86,552 |
Total Assets | 104,160 | 508,763 |
Current Liabilities: | ||
Accounts payable and accrued expenses | 39,136 | 95,310 |
Notes payable to related parties | 150,000 | |
Total Current Liabilities | 39,136 | 245,310 |
Total Liabilities | 39,136 | 245,310 |
Stockholders' Equity | ||
Preferred stock: 50,000,000 shares authorized, 0 shares issued at December 31, 2018 and 2017 | ||
Common stock: 200,000,000 common shares authorized, par value $0.0001 per share, 40,300,106 common shares issued and 31,750,106 shares outstanding at December 31, 2018 and December 31, 2017, respectively | 3,981 | 3,981 |
Additional paid-in capital | 12,609,980 | 12,129,331 |
Treasury stock, 8,550,000 shares at cost | (491,139) | (491,139) |
Accumulated deficit | (12,057,798) | (11,378,720) |
Total Stockholders' Equity | 65,024 | 263,453 |
Total Liabilities and Stockholders' Equity | $ 104,160 | $ 508,763 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Assets | ||
Property and equipment, net of accumulated depreciation | $ 107,007 | $ 99,418 |
Intellectual Property, net of accumulated amortization | 692,274 | 689,900 |
License, net of accumulated amortization | $ 25,822 | $ 15,822 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common Stock, par value | $ 0.0001 | $ 0.0001 |
Common Stock, shares authorized | 200,000,000 | 200,000,000 |
Common Stock, shares issued | 40,300,106 | 40,300,106 |
Common Stock, shares outstanding | 31,750,106 | 31,750,106 |
Treasury stock | 8,550,000 | 8,550,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues [Abstract] | ||
Revenue, Net | $ 190,094 | $ 852,443 |
Operating Expenses | ||
Research and development | 630,742 | 210,624 |
General and administrative | 239,352 | 210,491 |
Total Operating Expenses | 870,094 | 421,115 |
(Loss) Income from Operations | (680,000) | 431,328 |
Other Income (Expenses) | ||
Interest income | 1,621 | 806 |
Interest expense | (699) | (27,781) |
Total Other Income (Expenses) | 922 | (26,975) |
(Loss) Income before Income Taxes | (679,078) | 404,353 |
Provision for Income Taxes | ||
Net (Loss) Income | $ (679,078) | $ 404,353 |
Net (Loss) Income per Share - Basic and Diluted | $ (0.02) | $ 0.01 |
Weighted Average Common Shares Outstanding - Basic and Diluted | 31,750,106 | 31,750,106 |
Consolidated Statements Of Chan
Consolidated Statements Of Changes In Stockholders' Equity - USD ($) | Common Stock | Additional Paid in Capital | Treasury Stock | Accumulated Deficit | Total |
Balance at Dec. 31, 2016 | $ 3,981 | $ 12,129,331 | $ (491,139) | $ (11,783,073) | $ (140,900) |
Balance, Shares at Dec. 31, 2016 | 31,750,106 | ||||
Net income (loss) | 404,353 | 404,353 | |||
Balance at Dec. 31, 2017 | $ 3,981 | 12,129,331 | (491,139) | (11,378,720) | 263,453 |
Balance, Shares at Dec. 31, 2017 | 31,750,106 | ||||
Stock-based compensation | 480,649 | 480,649 | |||
Net income (loss) | (679,078) | (679,078) | |||
Balance at Dec. 31, 2018 | $ 3,981 | $ 12,609,980 | $ (491,139) | $ (12,057,798) | $ 65,024 |
Balance, Shares at Dec. 31, 2018 | 31,750,106 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Cash Flows from Operating Activities | ||
Net (loss) income | $ (679,078) | $ 404,353 |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||
Depreciation and amortization | 19,963 | 36,446 |
Stock based compensation | 480,649 | |
Changes in operating assets and liabilities | ||
Accounts receivable and prepaid expenses | 357,030 | (184,730) |
Interest receivable | 756 | (756) |
Accounts payable and accrued expenses | (56,174) | 16,237 |
Note receivable | 34,000 | |
Cash Provided by Operating Activities | 157,146 | 271,550 |
Cash Flows from Financing Activities | ||
Principal payments on notes payable, related parties | (150,000) | (275,000) |
Cash (Used in) Financing Activities | (150,000) | (275,000) |
Net (Decrease) in Cash and Cash Equivalents | 7,146 | (3,450) |
Cash and cash equivalents at Beginning of Period | 1,336 | 4,786 |
Cash and cash equivalents at End of Period | 8,482 | 1,336 |
Supplemental Disclosure of Cash Flow Information | ||
Cash Paid for Interest | 699 | 48,235 |
Supplemental Schedule of Non-Cash Activities | ||
Note receivable in connection with Liberty accounts receivable | $ 3,000 | $ 34,000 |
Nature of Business
Nature of Business | 12 Months Ended |
Dec. 31, 2018 | |
Nature of Business | |
Nature of Business | Note 1 – Nature of Business PowerVerde, Inc. (the “Company”) is a “C” Corporation organized under the Laws of Delaware with operations in Scottsdale, Arizona. The Company’s two founders, now its largest shareholders, have conceived and developed the use of a power systems patent. For several years, the Company has been undertaking research and development on a power generating system based on the patent and related intellectual property, which it hopes to commercialize. |
Going Concern
Going Concern | 12 Months Ended |
Dec. 31, 2018 | |
Going Concern: | |
Going Concern | Note 2 – Going Concern The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. The Company has incurred recurring operating losses (other than in 2017) and negative cashflows from operations. Additionally, 84% and 96% of the Company’s 2018 and 2017 revenues, respectively, result from royalties related to a license that expired in March 2018, so such revenues will not recur beyond that date, and the Company currently has limited additional sources of revenues for the foreseeable future. The Company has historically relied upon unrelated and related party debt and equity financing to fund its cash flow shortages and will require either additional debt or equity financing to sustain its operations. The Company had a net loss of $679,078 in 2018 because the royalties under its biotech licensing agreement expired in March 2018. Those factors create substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. The Company continues to seek funding from private debt and equity investors, as it needs to promptly raise substantial additional capital in order to finance its plan of operations. There can be no assurance that the Company will be able to promptly raise the necessary funds on commercially acceptable terms, if at all. If the Company does not raise the necessary funds, it may be forced to cease operations. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Policy Text Block [Abstract] | |
Summary of Significant Accounting Policies | Note 3 – Summary of Significant Accounting Policies Principles of Consolidation The consolidated financial statements include the accounts of PowerVerde, Inc. and its wholly-owned subsidiary, PowerVerde Systems, Inc. All significant intercompany balances and transactions have been eliminated in consolidation. Nature of Business The Company is devoting substantially all of its present efforts to establish a new business involving the development and commercialization of clean energy electric power generation systems, and none of its planned principal operations have commenced. However, royalties from licenses unrelated to planned principal operations were recognized as revenue through March 2018. No revenues from this planned principal operation have been generated. Cash Equivalents The Company considers primarily all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Accounts Receivable Accounts receivable consist of balances due for royalties (2017) and assembly services (2018). The Company monitors accounts receivable and provides allowances when considered necessary. At December 31, 2018 and 2017, accounts receivable were considered to be fully collectible. Accordingly, no allowance for doubtful accounts was provided. Note Receivable Note receivable consisted of amounts due from a customer in connection with the assembly agreement dated April 15, 2017. The note was paid in full in June 2018, along with accrued interest in the amount of $371. Revenue Recognition Revenue from royalties and assembly services are unrelated to the Company’s planned operations. Royalties were recognized as earned in the period the sales to which the royalties relate occurred. Manufacturing assembly services are recognized as revenue when the assembled product is delivered to the customer. Revenues recognized under these agreements amount to 100% of total revenues for the years ended December 31, 2018 and 2017. Intellectual Property The Company reviews intangible assets with finite lives for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company uses an estimate of the undiscounted cash flows over the remaining life of its long-lived assets, or related group of assets where applicable, in measuring whether the assets to be held and used will be realizable (Step 1 test). In the event of impairment, the Company would discount the future cash flows using its then estimated incremental borrowing rate to estimate the amount of the impairment. Property and Equipment Property and equipment are stated at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets. Expenditures for major betterments and additions are capitalized, while replacement, maintenance and repairs, which do not extend the lives of the respective assets, are expensed as incurred. Depreciation of property and equipment were $7,589 and $14,262 for the years ended December 31, 2018 and 2017, respectively. Impairment of Long-Lived Assets Impairment losses are recorded on long-lived assets (property, equipment, license and intellectual property) used in operations when impairment indicators are present and the undiscounted expected cash flows estimated to be generated by those assets are less than the carrying value of such assets. No impairment losses have been recognized during the years ended December 31, 2018 or 2017. Stock-based compensation The Company has accounted for stock-based compensation under the provisions of Accounting Standards Codification (“ASC”) Topic 718 – “Stock Compensation” which requires the use of the fair-value based method to determine compensation for all arrangements under which employees and others receive shares of stock or equity instruments (stock options and common stock purchase warrants). The fair value of each stock option award is estimated on the date of grant using the Black-Scholes valuation model that uses assumptions for expected volatility, expected dividends, expected term, and the risk-free interest rate. Expected volatilities are based on historical volatility of peer companies and other factors estimated over the expected term of the stock options. The expected term of options granted is derived using the “simplified method” which computes expected term as the average of the sum of the vesting term plus the contract term. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for the period of the expected term. Common Stock Purchase Warrants The Company accounts for common stock purchase warrants in accordance with ASC Topic 815- 40, “Derivatives and Hedging – Contracts in Entity’s Own Equity” (“ASC 815-40”). Based on the provisions of ASC 815- 40, the Company classifies as equity any contracts that (i) require physical settlement or net-share settlement, or (ii) gives the Company a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement). The Company classifies as assets or liabilities any contracts that (i) require net-cash settlement including a requirement to net cash settle the contract if an event occurs and if that event is outside the control of the Company, or (ii) give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement). All outstanding warrants as of December 31, 2018 and 2017 were classified as equity. Accounting for Uncertainty in Income Taxes The Company follows the provisions of ASC Topic 740-10, “Accounting for Uncertainty in Income Taxes” which clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements, and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. This topic also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. Based on our evaluation, we have concluded that there are no significant uncertain tax positions requiring recognition in our consolidated financial statements. Our evaluation was performed for the tax years ended December 31, 2015, 2016, 2017 and 2018, the tax years which remain subject to examination by major tax jurisdictions as of December 31, 2018. We may from time to time be assessed interest or penalties by major tax jurisdictions, although any such assessments historically have been minimal and immaterial to our financial results. In the event we received an assessment for interest and/or penalties, it has been classified in the consolidated financial statements as general and administrative expense. Research and Development Costs The Company’s research and development costs are expensed in the period in which they are incurred. Such expenditures amounted to $630,742 and $210,624 for the years ended December 31, 2018 and 2017, respectively. Earnings (Loss) Per Share Earnings (loss) per share is computed in accordance with ASC Topic 260, “Earnings per Share”. Diluted earnings per share is computed by dividing net income (loss) by the weighted-average number of shares of common stock, common stock equivalents and other potentially dilutive securities outstanding during the period. Certain common stock equivalents were not included in the earnings (loss) per share calculation as their effect would be anti-dilutive. Warrants exercisable for 975,000 shares and options for 11,180,500 shares were excluded from weighted average common shares outstanding on a diluted basis. Financial instruments The Company carries cash and cash equivalents, accounts receivable, accounts payable and accrued expenses at historical costs. The respective estimated fair values of these assets and liabilities approximate carrying values due to their current nature. Use of Estimates The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 12 Months Ended |
Dec. 31, 2018 | |
Recent Accounting Prouncements | |
Recent Accounting Pronouncements | Note 4 – Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-09, Revenue from Contracts with Customers (“Topic 606”). Topic 606 supersedes the revenue recognition requirements in ASU Topic 605, Revenue Recognition (“Topic 605”), and requires the recognition of revenue when promised goods or services are transferred to customers in an amount that reflects the considerations to which the entity expects to be entitled to in exchange for those goods or services. ASU 2014-09 also includes Subtopic 340-40, Other Assets and Deferred Costs- Contracts with Customers The two permitted transition methods under the new standard were the full retrospective method, in which the new standard would be applied to each prior reporting period presented, and the cumulative effect of applying the new standard would be recognized at the earliest period shown, or the modified retrospective method, in which the cumulative effect of applying the new standard would be recognized at the date of initial application. Based on our assessment, the impact of the new standard on our revenue recognition in prior periods was not significant; accordingly, while the Company would have used the modified retrospective method of adoption of the new standard, there was no cumulative effect of adoption on January 1, 2018 retained earnings. We have reviewed each of our current contracts for the related performance obligations and related revenue and expense recognition implications. A performance obligation under the new revenue standard is defined as a promise to provide a “distinct” good or service to a customer. The Company has determined that the assembly services is a performance obligation for which a transaction price has been established in the manufacturing agreement. The assembly of each unit stands on its own. Revenue related to assembly services is recognized as revenue when the assembled product is delivered to the customer. The Company has also determined that the performance obligation associated with our royalty revenues was the ongoing delivery of the license to which the royalties relate. Royalty revenues were recognized based on the contract royalty rate applied to licensee sales in the periods during which such sales occur. In February 2016, the FASB issued ASU 2016-02, “Leases,” In June 2018, the FASB issued ASU 2018-07, “Compensation – Stock Compensation (Topic 718).” |
Intellectual Property
Intellectual Property | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Intellectual Property | Note 5 – Intellectual Property Intellectual Property partially consists of technology acquired from the purchase of 100% of the membership interests of Cornerstone Conservation Group LLC (“Cornerstone”) on March 30, 2012 for $659,440. Accumulated amortization with respect to this intellectual property was $659,440 at December 31, 2018 and 2017. On June 30, 2015, the Company entered into an Assignment Agreement with VyrexIP Holdings Inc., a company owned by Company shareholder Edward Gomez for the purchase of intellectual property. The net price of these assets was comprised of a down payment of $16,116 and a $58,436 promissory note to the seller due July 15, 2016, partially offset by assignment by the seller to the Company of a $38,000 promissory note due November 14, 2015, issued by the seller’s licensee Epalex Corporation, a company in which Mr. Gomez is chairman and a major stockholder. This note was paid in full in November 2015. On June 1, 2016, the Company entered into a ten-year License Agreement with Helidyne LLC for total consideration of $100,000 to utilize the Helidyne intellectual property in the manufacturing of planetary rotor expanders and the incorporation of same in the Company’s distributed electric power generation systems. The license agreement also grants the Company an exclusive license to sell the expanders whether manufactured by Helidyne or by the Company. The Company’s royalty obligation begins on the earlier of the commercialization of the product or three years from the effective date of the agreement. Once the royalty obligation begins, the minimum annual royalty is $50,000 for each of the first six years, and $100,000 for the remainder of the agreement. For the years ended December 31, 2018 and 2017, amortization expense was $12,374 and $22,184 respectively, and accumulated amortization of all intangible assets was $718,096 and $705,722 at December 31, 2018 and 2017, respectively. Future amortization of the intangible assets was as follows as of December 31, 2018: Year ending December 31: 2019 $ 10,000 2020 10,000 2021 10,000 Thereafter 44,178 Total $ 74,178 |
Stockholders' Equity (Deficit)
Stockholders' Equity (Deficit) | 12 Months Ended |
Dec. 31, 2018 | |
Equity: | |
Stockholders’ Equity (Deficit) | Note 6 – Stockholders’ Equity (Deficit) Warrants During March 2013, the Company issued its Chief Executive Officer and Chief Financial Officer five –year warrants to purchase common stock at an exercise price of $0.30 per share (market price on date of grant) in the amounts of 1,000,000 and 500,000 shares, respectively. The Company recognized $210,000 in compensation expense. As of December 31, 2015, all of these warrants were outstanding. In October 2015, these warrants were repriced and extended with an exercise price of $0.15 and a new expiration date of October 26, 2022 in connection with a general repricing and extension of the Company options and warrants as set forth below in this Note 6. During 2018, these warrants were converted to stock options. On December 1, 2013, the Company issued additional three-year warrants to purchase 400,000 unregistered shares of the Company’s common stock at an exercise price equal to $0.21 per share (the average closing price of the common stock during the 10 trading days prior to December 1, 2013). This was in association with the Secured Promissory Note (See Note 8). In December 2015, the expiration date of these warrants was extended to December 31, 2018. As of December 31, 2018, all of these warrants had expired. During the fourth quarter of 2014, the Company revised the terms of the 400,000 original warrants issued December 2012 and January 2013, extending the maturity dates to December 31, 2017 and the exercise price was reduced from $0.41 per share to $0.39 per share. The Company also revised the terms of the additional 400,000 warrants issued December 1, 2013, to extend the maturity date to December 31, 2018 and the exercise price was reduced from $0.21 per share to $0.17 per share. During September 2015, the Company issued five-year warrants to a stockholder for the purchase 25,000 shares of common stock at an exercise price of $.12 per share as additional consideration for a $25,000 loan. These warrants expire in September 2020. As of December 31, 2018, all of these warrants were outstanding. During June 2016, the Company issued warrants to a stockholder for the purchase of 900,000 shares of common stock at an exercise price of $0.11 per share in consideration for the Company utilizing his facility space from January 2013 to December 2015. These warrants expire in June 2021. As of December 31, 2018, all of these warrants were outstanding. In July 2016, a warrant for the purchase of 25,000 shares of common stock at an exercise price of $.19 per share was issued to a stockholder as additional consideration for a $25,000 loan. These warrants expire in July 2021. As of December 31, 2018, all of these warrants were outstanding. In October 2016, another warrant for the purchase of 25,000 shares of common stock was issued to the same stockholder at an exercise price of $.15 per share as additional consideration for extending the maturity of the $25,000 loan for an additional 90 days. These warrants expire in October 2021. As of December 31, 2018, all of these warrants were outstanding. A summary of warrants issued, exercised and expired during the year ending December 31, 2018 is as follows: Shares Weighted Average Exercise Price Aggregate Intrinsic Value Balance at December 31, 2017 3,675,000 $ .15 $ 45,000 Issued — — — Cancelled (replaced with Common Stock Options) (2,300,000 ) $ .15 Expired (400,000 ) $ .22 — Balance at December 31, 2018 975,000 $ 0.11 $ 45,000 |
Stock Options
Stock Options | 12 Months Ended |
Dec. 31, 2018 | |
Stock Options | |
Stock Options | Note 7 – Stock Options Stock option activity for the year ended December 31, 2018, is summarized as follows: Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Options outstanding at December 31, 2017 5,750,000 $ 0.31 4.12 Granted 3,130,000 0.12 — Warrants cancelled and replaced with Common Stock Options 2,300,000 0.12 — Cancelled for Repricing (3,675,000 ) 0.16 — Reissued for Repricing 3,675,000 0.12 Options outstanding at December 31, 2018 11,180,500 $ 0.20 7.02 On May 30, 2018, the Board of Directors agreed to extend all outstanding management and non-employee stock options and warrants (covering 5,975,000 shares) to a common expiration date of June 30, 2026 and adjust the exercise prices to $0.12 (“adjusted terms”). 2,300,000 warrants were cancelled and replaced with common stock options and 3,675,000 options were terminated and reissued with the adjusted terms. These transactions were accounted for as modifications of the original instruments. The net effect of the change in the value of the repriced options and warrants was an incremental increase in stock-based compensation expense of $136,349 during the year ended December 31, 2018. On May 30, 2018, the Company also issued new, immediately vesting, stock options with an exercise price of $0.12 and an expiration date of June 30, 2026, to: Richard Davis for 1,300,000 shares; Hank Leibowitz for 500,000 shares; John Hofmann for 800,000 shares; Richard McKee for 500,000 shares; and Michael McKee for 30,000 shares. The fair market value of these options was determined to be $0.11 per option, or $344,300, which was recognized as stock-based compensation expense. Total stock option compensation was $480,649 for the year ended December 31, 2018. There is no unrecognized compensation expense associated with the options. |
Notes Payable to Related Partie
Notes Payable to Related Parties | 12 Months Ended |
Dec. 31, 2018 | |
Notes Payable to Related Parties | |
Notes Payable to Related Parties | Note 8 - Notes Payable to Related Parties Notes payable to related parties at December 31, 2017 consisted of notes payable to stockholders of $150,000 (issued in 2012). The notes had been due in one principal payment on September 30, 2017, but were extended to April 30, 2018, after extensions granted by the Note holders in the third quarter of 2017. Interest was payable semiannually at 10%. The notes were collateralized by all receivables existing pursuant to the license agreement with VDF FutureCeuticals, Inc. discussed in Notes 3 and 9. The notes were paid in full in January 2018. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitment and Contingencies: | |
Commitments and Contingencies | Note 9 - Commitments and Contingencies On June 25, 2015, Company consultant Hank Leibowitz assigned to the Company a patent he obtained for a system and method for using high temperature sources in Rankine cycle power systems. The Company has agreed to pay Mr. Leibowitz a 2% royalty for any and all revenues of products and/or project sales by the Company based on the subject patent. The Company’s license agreement with VDF FutureCeuticals, Inc., which has generated substantially all of the Company’s revenues since 2012, terminated in March 2018, when the underlying patents expired. On June 1, 2016, the Company entered into a ten-year License Agreement with Helidyne LLC to utilize the Helidyne intellectual property in order to use Helidyne expanders in Powerverde systems and to sell Helidyne expanders. As part of the licensing agreement the Company committed to purchase two 50 kW expanders, at a price of $25,000 each, on or before the sixth month anniversary of the agreement. The $50,000 was payable in two monthly installments of $25,000 beginning October 2016. The Company made payments totaling $38,750 towards the purchase of the expanders and recorded these payments as prepaid expenses. Due to Helidyne’s failure to perform under the agreement, the Company has not made any further payments to Helidyne and does not intend to do so unless and until Helidyne performs as required. Helidyne has not objected to the Company’s position, and it is very unlikely that Helidyne will ever be able to perform. Consequently, in the third quarter of 2017, the Company wrote off the $38,750 paid to Helidyne. The Company agreed to pay Helidyne LLC a royalty of 3% of sales, subject to a minimum annual royalty of $50,000 beginning on the earlier of commercialization of the product or three years from the effective date of the agreement. This minimum royalty would be payable only if Helidyne performs as required, which is very unlikely, or if the Company elects to produce its own expanders using Helidyne technology. The Company does intend to produce these expanders directly or through a contract manufacturer in the future. See Note 5. On April 15, 2017, the Company entered into an assembly agreement with Liberty Plugins, Inc. (“Liberty”) to assemble Liberty’s Hydra electronic vehicle charging systems and ship completed Hydras to Liberty’s facility in Santa Barbara, California (the “Liberty Agreement”). Liberty has agreed to pay $1,000 for the first 10 Hydras assembled in a month, $750 per Hydra for the next 10 Hydras assembled per month and $500 per Hydra for each Hydra assembled above 20 per month. As of December 31, 2018, the Company has built and shipped 65 Hydras. Revenue of $31,000 and $34,000 for these products is reflected in the net revenue on the Company’s condensed consolidated statements of operations for the years ended December 31, 2018 and 2017, respectively. On September 30, 2017, the Company converted the outstanding accounts receivable from Liberty, totaling $25,000, into a Promissory Note with 12% interest and a maturity date of January 31, 2018. On December 31, 2017, the Company converted an additional $9,000 from accounts receivable from Liberty to the principal balance of the Promissory Note and extended the maturity date of the Note to April 30, 2018. On May 1, 2018, the Company converted an additional $3,000 from accounts receivable from Liberty to the principal balance of the Promissory Note and extended the maturity date of the Note to June 30, 2018. The note was paid in full in June 2018, along with accrued interest in the amount of $371. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Taxes: | |
Income Taxes | Note 10 – Income Taxes Deferred income taxes are provided based on the provisions of ASC Topic 740, “Accounting for Income Taxes”, to reflect the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Significant components of the Company’s net deferred income taxes are as follows: December 31, 2018 2017 Deferred tax assets: Net operating loss carryforwards $ 1,672,766 $ 1,557,027 Start-up cost 153,964 174,679 Goodwill 363,979 408,552 Stock based compensation 535,901 414,080 Other 2,564 2,972 Deferred tax assets 2,729,174 2,557,309 Less valuation allowance (2,729,174 ) (2,557,309 ) Net deferred tax assets after valuation allowance $ — $ — A reconciliation of the U.S. statutory federal income tax rate to the effective income tax rate (benefit) follows: Rate Reconciliation December 31, 2018 2017 Federal income tax at statutory rate $ (142,606 ) $ 137,480 State Tax (29,506 ) 14,678 Permanent Differences 57 433 Other 186 (1,285 ) Change in Valuation Allowance 171,869 (151,306 ) $ — $ — In assessing the ability to realize a portion of the deferred tax assets, management considers whether it is more than likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities and projected future taxable income in making the assessment. After consideration of the evidence, both positive and negative, management has determined that a $2,729,174 valuation allowance at December 31, 2018 is necessary. The change in the valuation allowance for the current year is $171,869, which represents the changes in the deferred items. At December 31, 2018, the Company has available net operating loss carry forwards for federal income tax purposes of $6,590,323 expiring at various times from 2028 through 2033. Valuation and Qualifying Accounts Description Balance at Beginning of Period Charged to Cost and Expenses Write-offs Other Charges Balance at End of Period Deferred tax asset valuation allowance Year ended December 31, 2018 $ 2,557,309 $ 171,868 — $ — $ 2,729,177 Year ended December 31, 2017 $ 4,063,436 $ (1,506,127 ) — $ — $ 2,557,309 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions | |
Related Party Transactions | Note 11- Related Party Transactions From July 2010 until December 2017, the accounting firm J.L. Hofmann & Associates, P.A. (“JLHPA”), whose principal is our CFO John L. Hofmann, provided financial consulting and accounting services to the Company. In December 2017, J.L. Hofmann & Associates, P.A. merged with Kabat, Schertzer, De La Torre, Taraboulos & Co, LLC (“KSDT”). The Company paid $37,280 and $28,215 to KSDT for its services in the years ended December 31, 2018 and 2017, respectively. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 12 – Subsequent Events In the first quarter 2019, the Company issued Series B Convertible Promissory Notes totaling $290,000 to stockholders in connection with a loan in the same amount. The notes are to be paid in one principal payment, along with any unpaid interest, by December 31, 2021. Interest is payable semiannually at 10%. The notes are convertible into common stock at a price of $.20 per share through December 31, 2019, $.30 per share from January 1, 2020, through December 31, 2020, and $.40 per share thereafter. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Policy Text Block [Abstract] | |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of PowerVerde, Inc. and its wholly-owned subsidiary, PowerVerde Systems, Inc. All significant intercompany balances and transactions have been eliminated in consolidation. |
Nature of Business | Nature of Business The Company is devoting substantially all of its present efforts to establish a new business involving the development and commercialization of clean energy electric power generation systems, and none of its planned principal operations have commenced. However, royalties from licenses unrelated to planned principal operations were recognized as revenue through March 2018. No revenues from this planned principal operation have been generated. |
Cash Equivalents | Cash Equivalents The Company considers primarily all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. |
Accounts Receivables | Accounts Receivable Accounts receivable consist of balances due for royalties (2017) and assembly services (2018). The Company monitors accounts receivable and provides allowances when considered necessary. At December 31, 2018 and 2017, accounts receivable were considered to be fully collectible. Accordingly, no allowance for doubtful accounts was provided. |
Note Receivable | Note Receivable Note receivable consisted of amounts due from a customer in connection with the assembly agreement dated April 15, 2017. The note was paid in full in June 2018, along with accrued interest in the amount of $371. |
Revenue Recognition | Revenue Recognition Revenue from royalties and assembly services are unrelated to the Company’s planned operations. Royalties were recognized as earned in the period the sales to which the royalties relate occurred. Manufacturing assembly services are recognized as revenue when the assembled product is delivered to the customer. Revenues recognized under these agreements amount to 100% of total revenues for the years ended December 31, 2018 and 2017. |
Intellectual Property | Intellectual Property The Company reviews intangible assets with finite lives for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company uses an estimate of the undiscounted cash flows over the remaining life of its long-lived assets, or related group of assets where applicable, in measuring whether the assets to be held and used will be realizable (Step 1 test). In the event of impairment, the Company would discount the future cash flows using its then estimated incremental borrowing rate to estimate the amount of the impairment. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets. Expenditures for major betterments and additions are capitalized, while replacement, maintenance and repairs, which do not extend the lives of the respective assets, are expensed as incurred. Depreciation of property and equipment were $7,589 and $14,262 for the years ended December 31, 2018 and 2017, respectively. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Impairment losses are recorded on long-lived assets (property, equipment, license and intellectual property) used in operations when impairment indicators are present and the undiscounted expected cash flows estimated to be generated by those assets are less than the carrying value of such assets. No impairment losses have been recognized during the years ended December 31, 2018 or 2017. |
Stock-based Compensation | Stock-based compensation The Company has accounted for stock-based compensation under the provisions of Accounting Standards Codification (“ASC”) Topic 718 – “Stock Compensation” which requires the use of the fair-value based method to determine compensation for all arrangements under which employees and others receive shares of stock or equity instruments (stock options and common stock purchase warrants). The fair value of each stock option award is estimated on the date of grant using the Black-Scholes valuation model that uses assumptions for expected volatility, expected dividends, expected term, and the risk-free interest rate. Expected volatilities are based on historical volatility of peer companies and other factors estimated over the expected term of the stock options. The expected term of options granted is derived using the “simplified method” which computes expected term as the average of the sum of the vesting term plus the contract term. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for the period of the expected term. |
Common Stock Purchase Warrants | Common Stock Purchase Warrants The Company accounts for common stock purchase warrants in accordance with ASC Topic 815- 40, “Derivatives and Hedging – Contracts in Entity’s Own Equity” (“ASC 815-40”). Based on the provisions of ASC 815- 40, the Company classifies as equity any contracts that (i) require physical settlement or net-share settlement, or (ii) gives the Company a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement). The Company classifies as assets or liabilities any contracts that (i) require net-cash settlement including a requirement to net cash settle the contract if an event occurs and if that event is outside the control of the Company, or (ii) give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement). All outstanding warrants as of December 31, 2018 and 2017 were classified as equity. |
Accounting for Uncertainty in Income Taxes | Accounting for Uncertainty in Income Taxes The Company follows the provisions of ASC Topic 740-10, “Accounting for Uncertainty in Income Taxes” which clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements, and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. This topic also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. Based on our evaluation, we have concluded that there are no significant uncertain tax positions requiring recognition in our consolidated financial statements. Our evaluation was performed for the tax years ended December 31, 2015, 2016, 2017 and 2018, the tax years which remain subject to examination by major tax jurisdictions as of December 31, 2018. We may from time to time be assessed interest or penalties by major tax jurisdictions, although any such assessments historically have been minimal and immaterial to our financial results. In the event we received an assessment for interest and/or penalties, it has been classified in the consolidated financial statements as general and administrative expense. |
Research and Development Costs | Research and Development Costs The Company’s research and development costs are expensed in the period in which they are incurred. Such expenditures amounted to $630,742 and $210,624 for the years ended December 31, 2018 and 2017, respectively. |
Earnings (Loss) Per Share | Earnings (Loss) Per Share Earnings (loss) per share is computed in accordance with ASC Topic 260, “Earnings per Share”. Diluted earnings per share is computed by dividing net income (loss) by the weighted-average number of shares of common stock, common stock equivalents and other potentially dilutive securities outstanding during the period. Certain common stock equivalents were not included in the earnings (loss) per share calculation as their effect would be anti-dilutive. Warrants exercisable for 975,000 shares and options for 11,180,500 shares were excluded from weighted average common shares outstanding on a diluted basis. |
Financial instruments | Financial instruments The Company carries cash and cash equivalents, accounts receivable, accounts payable and accrued expenses at historical costs. The respective estimated fair values of these assets and liabilities approximate carrying values due to their current nature. |
Use of Estimates | Use of Estimates The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. |
Intellectual Property (Tables)
Intellectual Property (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Future amortization of the intangible asset | Future amortization of the intangible assets was as follows as of December 31, 2018: Year ending December 31: 2019 $ 10,000 2020 10,000 2021 10,000 Thereafter 44,178 Total $ 74,178 |
Stockholders' Equity (Deficit)
Stockholders' Equity (Deficit) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Equity: | |
Summary of warrants | A summary of warrants issued, exercised and expired during the year ending December 31, 2018 is as follows: Shares Weighted Average Exercise Price Aggregate Intrinsic Value Balance at December 31, 2017 3,675,000 $ .15 $ 45,000 Issued — — — Cancelled (replaced with Common Stock Options) (2,300,000 ) $ .15 Expired (400,000 ) $ .22 — Balance at December 31, 2018 975,000 $ 0.11 $ 45,000 |
Stock Options (Tables)
Stock Options (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Stock Options | |
Stock Option | Stock option activity for the year ended December 31, 2018, is summarized as follows: Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Options outstanding at December 31, 2017 5,750,000 $ 0.31 4.12 Granted 3,130,000 0.12 — Warrants cancelled and replaced with Common Stock Options 2,300,000 0.12 — Cancelled for Repricing (3,675,000 ) 0.16 — Reissued for Repricing 3,675,000 0.12 Options outstanding at December 31, 2018 11,180,500 $ 0.20 7.02 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Taxes: | |
Schedule of Deferred Tax Assets and Liabilities | Significant components of the Company’s net deferred income taxes are as follows: December 31, 2018 2017 Deferred tax assets: Net operating loss carryforwards $ 1,672,766 $ 1,557,027 Start-up cost 153,964 174,679 Goodwill 363,979 408,552 Stock based compensation 535,901 414,080 Other 2,564 2,972 Deferred tax assets 2,729,174 2,557,309 Less valuation allowance (2,729,174 ) (2,557,309 ) Net deferred tax assets after valuation allowance $ — $ — |
Schedule of Effective Income Tax Rate Reconciliation | A reconciliation of the U.S. statutory federal income tax rate to the effective income tax rate (benefit) follows: Rate Reconciliation December 31, 2018 2017 Federal income tax at statutory rate $ (142,606 ) $ 137,480 State Tax (29,506 ) 14,678 Permanent Differences 57 433 Other 186 (1,285 ) Change in Valuation Allowance 171,869 (151,306 ) $ — $ — |
Summary of Valuation Allowance | Valuation and Qualifying Accounts Description Balance at Beginning of Period Charged to Cost and Expenses Write-offs Other Charges Balance at End of Period Deferred tax asset valuation allowance Year ended December 31, 2018 $ 2,557,309 $ 171,868 — $ — $ 2,729,177 Year ended December 31, 2017 $ 4,063,436 $ (1,506,127 ) — $ — $ 2,557,309 |
Going Concern (Details Narrativ
Going Concern (Details Narrative) | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Going Concern Details Narrative | |
Net Income (Loss) | $ (679,078) |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2018 | |
Accrued interest | $ 371 | $ 371 | |
Revenue percentage | 100.00% | 100.00% | |
Depreciation of property and equipment | $ 7,589 | $ 14,262 | |
Impairment losses | 0 | 0 | |
Research and development cost | $ 630,742 | $ 210,624 | |
Warrants | |||
Antidilutive Excluded from Computation of Earnings Per Share, Amount | 975,000 | ||
Option | |||
Antidilutive Excluded from Computation of Earnings Per Share, Amount | 11,180,500 |
Intellectual Property (Details)
Intellectual Property (Details) | Dec. 31, 2018USD ($) |
Year ending December 31: | |
2019 | $ 10,000 |
2020 | 10,000 |
2021 | 10,000 |
Thereafter | 44,178 |
Total | $ 74,178 |
Intellectual Property (Details
Intellectual Property (Details Narrative) - USD ($) | Jun. 02, 2016 | Jun. 30, 2015 | Dec. 31, 2018 | Dec. 31, 2017 | Jun. 01, 2016 | Mar. 30, 2012 |
Amortization expense | $ 12,374 | $ 22,184 | ||||
Accumulated amortization of the intangible asset- intellectual property | $ 692,274 | 689,900 | ||||
Promissory note down payment | $ 16,116 | |||||
Promissory note due | $ 58,436 | 38,000 | ||||
Promissory note due date | Jul. 15, 2016 | Nov. 14, 2015 | ||||
Helidyne LLC [Member] | ||||||
Commercial royalty obligation | $ 100,000 | |||||
Annual royalty | $ 50,000 | |||||
Cornerstone Acquisition | ||||||
Percentage of membership interests purchased | 100.00% | |||||
Business Acquisition, Transaction Costs | $ 659,440 | |||||
Accumulated amortization of the intangible asset- intellectual property | $ 659,440 | $ 659,440 |
Stockholders' Equity (Deficit_2
Stockholders' Equity (Deficit) (Details) | 12 Months Ended |
Dec. 31, 2018$ / sharesshares | |
Warrants term | |
Balance at December 31, 2017 | shares | 3,675,000 |
Shares Issued | shares | |
Cancelled (replaced with Common Stock Options) | shares | (2,300,000) |
Shares Expired | shares | (400,000) |
Balance at December 31, 2018 | shares | 975,000 |
Weighted Average Exercise Price Balance at December 31, 2017 | $ 0.15 |
Weighted Average Exercise Price Issued | |
Weighted Average Exercise Price Cancelled (replaced with Common Stock Options) | 0.15 |
Weighted Average Exercise Price Expired | 0.22 |
Weighted Average Exercise Price Balance at December 31, 2018 | 0.11 |
Aggregate Intrinsic Value Balance at December 31, 2017 | 45,000 |
Aggregate Intrinsic Value Issued | |
Aggregate Intrinsic Value Expired | |
Aggregate Intrinsic Value Balance at December 31, 2018 | $ 45,000 |
Stockholders' Equity (Deficit_3
Stockholders' Equity (Deficit) (Details Narrative) - USD ($) | Oct. 31, 2016 | Jun. 30, 2016 | Dec. 01, 2013 | Jul. 31, 2016 | Sep. 30, 2015 | Mar. 31, 2013 | Dec. 31, 2014 |
Issuance of warrants to purchase common stock | 25,000 | 400,000 | 25,000 | 1,000,000 | |||
Exercise price | $ .15 | $ 0.21 | $ 0.19 | ||||
Compensation expense | $ 210,000 | ||||||
Warrants expiration date | Oct. 31, 2021 | Jul. 31, 2021 | |||||
Warrants issued | 400,000 | ||||||
Extending maturity date | the Company revised the terms of the 400,000 original warrants issued December 2012 and January 2013, extending the maturity dates to December 31, 2017 and the exercise price was reduced from $0.41 per share to $0.39 per share. The Company also revised the terms of the additional 400,000 warrants issued December 1, 2013, to extend the maturity date to December 31, 2018 and the exercise price was reduced from $0.21 per share to $0.17 per share. | ||||||
Additional consideration for loan | $ 25,000 | $ 25,000 | |||||
Chief Executive Officer [Member] | |||||||
Issuance of warrants to purchase common stock | 500,000 | ||||||
Exercise price | $ 0.30 | ||||||
Warrants term | 5 years | ||||||
Chief Financial Officer [Member] | |||||||
Issuance of warrants to purchase common stock | 500,000 | ||||||
Exercise price | $ 0.30 | ||||||
Warrants term | 5 years | ||||||
Stockholder | |||||||
Issuance of warrants to purchase common stock | 900,000 | 25,000 | |||||
Exercise price | $ 0.11 | $ 0.11 | |||||
Warrants expiration date | Jun. 30, 2021 | Sep. 30, 2020 | |||||
Additional consideration for loan | $ 25,000 |
Stock Options (Details)
Stock Options (Details) - $ / shares | 1 Months Ended | 12 Months Ended |
May 30, 2018 | Dec. 31, 2018 | |
Shares | ||
Granted | ||
Warrants cancelled and replaced with Common Stock Options | 2,300,000 | |
Weighted Average Exercise Price | ||
Options Outstanding, Ending Balance, Weighted Average Exercise Price | $ 0.12 | |
Employee Stock Option [Member] | ||
Shares | ||
Begining Balance | 5,750,000 | |
Granted | 3,130,000 | |
Warrants cancelled and replaced with Common Stock Options | 2,300,000 | |
Cancelled for Repricing | (3,675,000) | |
Reissued for Repricing | 3,675,000 | |
Ending Balance | 11,180,500 | |
Weighted Average Exercise Price | ||
Options Outstanding, Begining Balance, Weighted Average Exercise Price | $ 0.31 | |
Granted | 0.12 | |
Warrants cancelled and replaced with Common Stock Options | $ 0.12 | |
Cancelled for Repricing | 0.16 | |
Reissued for Repricing | $ 0.12 | |
Options Outstanding, Ending Balance, Weighted Average Exercise Price | $ 0.20 | |
Weighted Average Remaining Contractual Life (Years) | ||
Options outstanding Begining | 4 years 1 month 13 days | |
Options outstanding Ending | 7 years 7 days |
Stock Options (Details Narrativ
Stock Options (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |
May 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Stock-based compensation expense | $ 344,300 | $ 480,649 | |
Unrecognized stock-based compensation | $ 0 | ||
Srock options and warrants converted | 5,975,000 | ||
Exercise price | $ 0.12 | ||
Expiration date | Jun. 30, 2026 | ||
Options terminated and reissued | 3,675,000 | ||
Increase in stock-based compensation expense | $ 136,349 | ||
Warrants cancelled and replaced with Common Stock Options | 2,300,000 | ||
Fair market value of options | $ 344,300 | ||
Richard Davis | |||
Stock options vested | 1,300,000 | ||
Hank Leibowitz | |||
Stock options vested | 500,000 | ||
John Hofmann | |||
Stock options vested | 800,000 | ||
Richard McKee | |||
Stock options vested | 500,000 | ||
Michael McKee | |||
Stock options vested | 30,000 |
Notes Payable to Related Part_2
Notes Payable to Related Parties (Details Narrative) | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Notes Payable To Related Parties | |
Notes payable to stockholders | $ 150,000 |
Maturity date | Apr. 1, 2018 |
Interest rate | 10.00% |
Repayments of notes payable | $ 150,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2018 | May 01, 2018 | Sep. 30, 2017 | Oct. 01, 2016 | Jun. 01, 2016 | Jun. 25, 2015 |
Royalty percentage | 2.00% | |||||||||
Company made payments | $ 38,750 | |||||||||
Two monthly installments | $ 25,000 | |||||||||
Revenue from product | 31,000 | $ 34,000 | ||||||||
Accrued interest | $ 371 | $ 371 | ||||||||
Helidyne LLC [Member] | ||||||||||
Royalty percentage | 3.00% | |||||||||
Annual royalty | $ 50,000 | |||||||||
Company made payments | $ 38,750 | |||||||||
Two monthly installments | 50,000 | |||||||||
Committed to purchase price | $ 25,000 | |||||||||
Liberty [Member] | ||||||||||
Promissory note interest rate | 12.00% | |||||||||
Maturity date | Jun. 30, 2018 | |||||||||
Accounts receivable from related party | $ 9,000 | $ 9,000 | $ 9,000 | $ 3,000 | $ 25,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 1,672,766 | $ 1,557,027 |
Start-up cost | 153,964 | 174,679 |
Goodwill | 363,979 | 408,552 |
Stock based compensation | 535,901 | 414,080 |
Other | 2,564 | 2,972 |
Deferred tax assets | 2,729,174 | 2,557,309 |
Less valuation allowance | (2,729,174) | (2,557,309) |
Net deferred tax assets after valuation allowance | $ 0 | $ 0 |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Rate Reconciliation | ||
Federal income tax at statutory rate | $ (142,606) | $ 137,480 |
State Tax | (29,506) | 14,678 |
Permanent Differences | 57 | 433 |
Other | 186 | (1,285) |
Change in Valuation Allowance | 171,869 | (151,306) |
Rate Reconciliation |
Income taxes (Details 3)
Income taxes (Details 3) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Taxes Valuation And Qualifying Accounts Details | ||
Balance at Beginning of Period | $ 2,557,309 | $ 4,063,436 |
Charged to Cost and Expenses | 171,868 | (1,506,127) |
Write-offs | ||
Other Charges | ||
Balance at End of Period | $ 2,729,177 | $ 2,557,309 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Taxes: | ||
Valuation allowance | $ 2,729,174 | $ 2,557,309 |
Change in Valuation allowance | 171,869 | |
Net operating loss carry forwards for federal income tax purposes | $ 6,590,323 | |
Net operating loss carry forwards for federal income tax purposes, expiration date | Expiring at various times from 2028 through 2033. |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Related Party Transactions | ||
Payments to related party | $ 37,280 | $ 28,215 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2017 | |
Notes payable to stockholders | $ 150,000 | |
Maturity date | Apr. 1, 2018 | |
Interest rate | 10.00% | |
Subsequent Event [Member] | ||
Notes payable to stockholders | $ 290,000 | |
Maturity date | Dec. 31, 2021 | |
Interest rate | 10.00% | |
Subsequent Event, Description | The notes are convertible into common stock at a price of $.20 per share through December 31, 2019, $.30 per share from January 1, 2020, through December 31, 2020, and $.40 per share thereafter. |