Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Apr. 17, 2018 | Jun. 30, 2017 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | COATES INTERNATIONAL LTD \DE\ | ||
Entity Central Index Key | 948,426 | ||
Amendment Flag | false | ||
Trading Symbol | COTE | ||
Current Fiscal Year End Date | --12-31 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 4,812,254 | ||
Entity Common Stock, Shares Outstanding | 51,138,928 |
Balance Sheets
Balance Sheets - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Current Assets | ||
Cash | $ 6,807 | $ 9,163 |
Inventory, net | 103,610 | 191,482 |
Other current assets | 608 | 47,028 |
Total Current Assets | 111,025 | 247,673 |
Property, plant and equipment, net | 2,031,684 | 2,076,396 |
Deferred licensing costs, net | 33,882 | 38,166 |
Total Assets | 2,176,591 | 2,362,235 |
Current Liabilities | ||
Accounts payable and accrued liabilities | 2,544,003 | 2,461,175 |
Deferred compensation payable | 1,621,322 | 1,272,317 |
Promissory notes to related parties | 1,472,409 | 1,454,699 |
Mortgage loan payable | 1,273,158 | 60,000 |
Derivative liability related to convertible promissory notes | 358,996 | 153,472 |
Unearned Revenues | 150,595 | 150,595 |
Convertible promissory notes, net of unamortized discount | 96,816 | 45,801 |
Current portion of sublicense deposits | 60,725 | 60,725 |
Total Current Liabilities | 7,578,024 | 5,658,784 |
Non-current portion of mortgage loan payable | 1,273,158 | |
Non-current portion of sublicense deposits | 607,975 | 627,175 |
Total Liabilities | 8,185,999 | 7,559,117 |
Commitments and Contingencies | ||
Stockholders' Deficiency | ||
Preferred stock, $0.001 par value, 100,000,000 shares authorized: | ||
Series A Preferred Stock, 5,000 and 1,000,000 shares designated, 3,601 and 250 shares issued and outstanding at December 31, 2017 and 2016, respectively | 4 | |
Series B Convertible Preferred Stock, 345,000 and 75,000,000 shares designated, 228,471 and 81,263 shares issued and outstanding at December 31, 2017 and 2016, respectively | 228 | 81 |
Common Stock, $0.0001 par value, 120,000,000 and 12,000,000,000 shares authorized, 36,943,242 and 15,013,652 shares issued and outstanding at December 31, 2017 and 2016, respectively | 3,694 | 1,501 |
Additional paid-in capital | 67,699,876 | 60,128,626 |
Accumulated deficit | (73,713,210) | (65,327,090) |
Total Stockholders' Deficiency | (6,009,408) | (5,196,882) |
Total Liabilities and Stockholders' Deficiency | $ 2,176,591 | $ 2,362,235 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2017 | Dec. 31, 2016 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, authorized shares | 100,000,000 | 100,000,000 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, authorized shares | 120,000,000 | 12,000,000,000 |
Common stock, issued shares | 36,943,242 | 15,013,652 |
Common stock, outstanding shares | 36,943,242 | 15,013,652 |
Series A Preferred Stock | ||
Series A preferred stock, designated shares | 5,000 | 1,000,000 |
Series A Preferred stock, issued shares | 3,601 | 250 |
Series A Preferred stock, outstanding shares | 3,601 | 250 |
Series B Convertible Preferred Stock | ||
Series B convertible preferred stock, designated shares | 345,000 | 75,000,000 |
Series B Preferred stock, issued shares | 228,471 | 81,263 |
Series B Preferred stock, outstanding shares | 228,471 | 81,263 |
Statements of Operations
Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Statements of Operations [Abstract] | ||
Sublicensing fee revenue | $ 19,200 | $ 29,200 |
Total Revenues | 19,200 | 29,200 |
Expenses: | ||
Research and development costs | 284,243 | 244,877 |
Stock-based compensation expense | 5,676,626 | 6,875,514 |
Compensation and benefits | 448,320 | 450,222 |
General and administrative expenses | 323,098 | 403,253 |
Depreciation and amortization | 48,995 | 48,370 |
Total Operating Expenses | 6,781,282 | 8,022,236 |
Loss from Operations | (6,762,082) | (7,993,036) |
Other Income (Expense): | ||
(Increase) decrease in estimated fair value of embedded derivative liabilities | (205,524) | 479,455 |
Loss on conversion of convertible notes | (264,474) | (143,418) |
Interest expense, net | (1,154,040) | (699,093) |
Total other income (expense) | (1,624,038) | (363,056) |
Loss Before Income Taxes | (8,386,120) | (8,356,092) |
Provision for income taxes | ||
Net Loss | $ (8,386,120) | $ (8,356,092) |
Basic net loss per share | $ (0.35) | $ (0.81) |
Basic weighted average shares outstanding | 23,812,394 | 10,318,089 |
Diluted net loss per share | $ (0.35) | $ (0.81) |
Diluted weighted average shares outstanding | 23,812,394 | 10,318,089 |
Statements of Stockholders' Equ
Statements of Stockholders' Equity Deficiency - USD ($) | Total | Series A Preferred Stock, $0.001 par value per share | Series B Preferred Stock, $0.001 par value per share | Common Stock, $0.0001 par value per share | Additional Paid-in Capital | Accumulated Deficit |
Balance at Dec. 31, 2015 | $ (5,299,053) | $ 18 | $ 518 | $ 51,671,409 | $ (56,970,998) | |
Balance, shares at Dec. 31, 2015 | 250 | 17,464 | 5,183,956 | |||
Issuance of anti-dilution shares of Series B Convertible Preferred Stock to related parties | 6,875,513 | $ 64 | 6,875,449 | |||
Issuance of anti-dilution shares of Series B Convertible Preferred Stock to related parties ,shares | 64,389 | |||||
Conversion of convertible promissory notes | 752,268 | $ 675 | 751,593 | |||
Conversion of convertible promissory notes shares | 6,745,724 | |||||
Conversion of promissory notes to related parties to common stock | 156,843 | $ 106 | 156,737 | |||
Conversion of promissory notes to related parties to common stock shares | 1,056,592 | |||||
Issuance of common stock under equity purchase agreement with Southridge Partners II, LP | 199,306 | $ 86 | 199,220 | |||
Issuance of common stock under equity purchase agreement with Southridge Partners II, LP shares | 862,470 | |||||
Beneficial conversion feature on convertible promissory notes | 255,093 | 255,093 | ||||
Imputed interest on promissory note payable to related party | 144,240 | 144,240 | ||||
Conversions of Series B Convertible Preferred Stock to common stock | $ (1) | $ 59 | (58) | |||
Conversions of Series B Convertible Preferred Stock to common stock, shares | (590) | 589,910 | ||||
Issuance of common stock and warrants | 75,000 | $ 57 | 74,943 | |||
Issuance of common stock and warrants, shares | 575,000 | |||||
Net loss | (8,356,092) | (8,356,092) | ||||
Balance at Dec. 31, 2016 | (5,196,882) | $ 81 | $ 1,501 | 60,128,626 | (65,327,090) | |
Balance, Shares at Dec. 31, 2016 | 250 | 81,263 | 15,013,652 | |||
Issuance of anti-dilution shares of Series B Convertible Preferred Stock to related parties | 5,659,407 | $ 147 | 5,659,260 | |||
Issuance of anti-dilution shares of Series B Convertible Preferred Stock to related parties ,shares | 147,216 | |||||
Conversion of convertible promissory notes | 768,829 | $ 2,188 | 766,641 | |||
Conversion of convertible promissory notes shares | 21,879,384 | |||||
Beneficial conversion feature on convertible promissory notes | 981,214 | 981,214 | ||||
Imputed interest on promissory note payable to related party | 142,580 | 142,580 | ||||
Conversions of Series B Convertible Preferred Stock to common stock | $ 1 | (1) | ||||
Conversions of Series B Convertible Preferred Stock to common stock, shares | (7) | 6,860 | ||||
Net loss | (8,386,120) | (8,386,120) | ||||
Issuance of Series A Preferred Stock | 17,220 | $ 4 | 17,216 | |||
Issuance of Series A Preferred Stock, shares | 3,351 | |||||
Issuance of common stock | 4,344 | $ 4 | 4,340 | |||
Issuance of common stock, shares | 43,443 | |||||
Payment for fractional shares resulting from reverse stock split | (97) | |||||
Balance at Dec. 31, 2017 | $ (6,009,408) | $ 4 | $ 228 | $ 3,694 | $ 67,699,876 | $ (73,713,210) |
Balance, Shares at Dec. 31, 2017 | 3,601 | 228,471 | 36,943,242 |
Statements of Cash Flows
Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Net Cash Flows Used in Operating Activities | ||
Net loss for the year | $ (8,386,120) | $ (8,356,092) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock-based compensation expense | 5,676,626 | 6,875,514 |
Interest accrued, but not paid | 1,000,534 | 601,053 |
Loss on conversion of convertible notes | 264,474 | 143,418 |
Increase (decrease) in fair value of embedded derivative liabilities | 205,524 | (479,455) |
Depreciation and amortization | 48,995 | 48,370 |
Non-cash portion of inventory used for research and development | 60,101 | |
Recognition of non-cash licensing revenues | (19,200) | (19,200) |
Changes in Operating Assets and Liabilities: | ||
Inventory | 87,872 | 26,535 |
Other assets | 3,477 | (37,910) |
Accounts payable and accrued liabilities | 3,452 | 293,369 |
Deferred compensation payable | 349,005 | 350,173 |
Net Cash Used in Operating Activities | (765,361) | (494,125) |
Net Cash Used in Investing Activities: | ||
Acquisition of property, plant and equipment | (11,493) | |
Cash Flows Provided by Financing Activities: | ||
Issuance of convertible promissory notes | 810,050 | 175,750 |
Issuance of promissory notes to related parties | 102,011 | 182,143 |
Issuance of common stock under equity purchase agreements | 42,944 | 199,306 |
Issuance of common stock | 75,000 | |
Licensing Fee Revenue | 10,000 | |
Repayment of promissory notes and accrued interest to related parties | (132,000) | (93,000) |
Repayment of mortgage loan | (60,000) | (55,000) |
Finance Lease Obligation Payments | (8,625) | |
Net Cash Provided by Financing Activities | 763,005 | 485,574 |
Net Decrease in Cash | (2,356) | (20,044) |
Cash, beginning of period | 9,163 | 29,207 |
Cash, end of period | 6,807 | 9,163 |
Supplemental Disclosure of Cash Flow Information: | ||
Cash paid during the year for interest | 161,069 | 161,069 |
Supplemental Disclosure of Non-cash Financing Activities: | ||
Conversion of convertible promissory notes | $ 714,942 | $ 714,942 |
The Company and Summary of Sign
The Company and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
The Company and Summary of Significant Accounting Policies [Abstract] | |
THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Organization The Company has acquired the exclusive licensing rights to the patented Coates spherical rotary valve (“CSRV ® ® ® ® ® Management believes that the CSRV ® ● Improved fuel efficiency ● Lower levels of harmful emissions ● Adaptability to numerous types of engine fuels ● Longer engine life ● Longer intervals between engine servicing The CSRV ® ® ® ® ® ® ® Hydrogen Reactor Technology Owned by George J. Coates George J. Coates has developed a hydrogen reactor which rearranges H 2 ® ® The Company previously agreed to collaborate on the development of this technology with WTF Asia International Ltd. (“WTF Asia”), a Hong Kong-based entity to enable it to be applied to large industrial Gen Sets. We have determined that it is no longer feasible to work with WTF Asia due to the owner’s health and concerns with the status of WTF Asia’s technology. The Company intends to independently pursue further development of this technology at some indefinite point in the future. Applications for patent protection of this technology would be filed upon completion of the research and development. Although at this time, no arrangements have been made between the Company and George J. Coates, owner of the technology, regarding licensing of the hydrogen reactor, Mr. Coates has provided his commitment to license this technology to the Company, once the related patent protection is in place. Accordingly, the Company does not currently have any rights to manufacture, use, sell and distribute the hydrogen reactor technology, should it become commercially feasible to manufacture and distribute products powered by the Hydroxy-Gas fuel. The Company has been responsible for all costs incurred to date related to the development of this technology. Basis of Presentation The accompanying financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and rules and regulations of the Securities and Exchange Commission (the “SEC”). Since the Company’s inception, the Company has been responsible for the development costs of the CSRV ® ® ® As shown in the accompanying financial statements, the Company has incurred recurring losses from operations and, as of December 31, 2017, had a stockholders’ deficiency of ($6,009,000). In addition, our mortgage loan which had a principal balance of $1,273,000 at December 31, 2017, matures in July 2018. The Company will be required to renegotiate the terms of an extension of the mortgage loan or successfully refinance the property with another mortgage lender, if possible. Failure to do so could adversely affect the Company’s financial position and results of operations. Further, the recent trading price range of the Company’s common stock has introduced additional risk and difficulty to the Company’s challenge to secure needed additional working capital. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management has instituted a cost control program intended to restrict variable costs to only those expenses that are necessary to complete its activities related to entering the production phase of operations, develop additional commercially feasible applications of the CSRV ® During the years ended December 31, 2017 and 2016, the Company raised $959,000 and $642,000, respectively, of new working capital from the following: Description 2017 2016 Issuances of convertible promissory notes $ 810,000 $ 176,000 Issuances of promissory notes to related parties 102,000 182,000 Sales of common stock under equity purchase agreements 43,000 199,000 Private sales of shares of common stock and common stock warrants - 75,000 Licensing fee revenue - 10,000 $ 955,000 $ 642,000 The Company continues to actively seek out new sources of working capital; however, there can be no assurance that it will be successful in these efforts. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. Certain amounts included in the accompanying financial statements for the year ended December 31, 2016 have been reclassified in order to make them comparable to the amounts presented for the year ended December 31, 2017. Reverse Stock Split The Company effected a one-for-200 reverse stock split of all of its outstanding shares of common stock, Series A Preferred Stock, Series B Convertible Preferred Stock, common stock warrants and stock options as of the close of trading on December 1, 2017. All prior year balances of shares of capital stock, warrants and stock options outstanding and all presentations and disclosures of transactions in shares of capital stock, warrants and stock options have been restated on a pro forma basis as if the reverse stock split had occurred prior to the beginning of the year ended December 31, 2016. Such restatements include calculations regarding the Company’s weighted average shares outstanding and loss per share. The following presents the amounts previously reported before the reverse stock split and restated balances reflected in the accompanying balance sheets and statements of stockholders’ deficiency as of January 1, 2016 and December 31, 2016: December 31, 2016 January 1, 2016 Originally Reported Restatement Adjustment As Restated Originally Reported Restatement Adjustment As Restated Common Stock $ 300,273 ($ 298,772 ) $ 1,501 $ 103,679 ($ 103,161 ) $ 518 Series A Preferred Stock 50 (50 ) - 50 (50 ) - Series B Convertible Preferred Stock 16,253 (16,172 ) 81 3,493 (3,475 ) 18 Additional Paid-in Capital 59,813,632 314,994 60,128,626 51,564,723 106,686 51,671,409 Revenue Recognition License deposits, which are non-refundable, were received from the granting of sublicenses and are recognized as earned, generally commencing upon acceptance by the licensee. At that time, license revenue will be recognized ratably over the period of time that the sublicense has been granted using the straight-line method. Upon termination of a sublicense agreement, non-refundable license deposits, less any costs related to the termination of the sublicense agreement, are recognized as revenue. Revenue from research and development activities is recognized when earned and realization is reasonably assured, provided that financial risk has been transferred from the Company to its customer. The Company is recognizing the license deposit of $300,000 on a Canadian License as revenue on a straight-line basis over the approximate remaining life through 2027 of the last CSRV ® Research and Development Research and development costs are expensed when incurred. Included in accounts payable and accrued liabilities at December 31, 2017 and 2016 is $115,000 for the estimated remediation costs of previously sold Gen Sets that were determined to have cracked heads. Intellectual Property Under a licensing agreement with George J. Coates and Gregory G. Coates, the Company obtained the rights to manufacture, use and sell the CSRV ® Licensing Costs Under the CSRV ® ® ® Stock-Based Compensation Stock-based compensation expense, which does not require any outlay of cash, consists of the following: ● The estimated fair value of shares of the Company’s capital stock issued to key employees for anti-dilution protection pursuant to a resolution of the board of directors. This includes restricted shares of Series A Preferred Stock and Series B Convertible Stock. In 2014, the Company arranged for an independent professional services firm to determine the estimated fair value of Series A Preferred Stock issued in August 2014 and Series B Preferred Stock issued in July 2014. The approach to arriving at the estimated fair value of the Series A Preferred Stock and the Series B Convertible Preferred Stock were determined to have a close correlation to the trading price of the Company’s common stock. Accordingly, upon each subsequent issuance of shares of the Series A Preferred Stock and Series B Convertible Preferred Stock, the original estimated fair values determined by the independent valuation is adjusted, on a pro rata basis, to reflect the closing price of the Company’s common stock on each date of issuance. ● Compensation expense relating to stock options and stock awards under its stock option and incentive plans is recognized as an expense using the fair value measurement method. Under the fair value method, the estimated fair value of awards to employees is charged to income on a straight-line basis over the requisite service period, which is the earlier of the employee’s retirement eligibility date or the vesting period of the award. Deferred Compensation Deferred compensation represents salaries of George J. Coates, Gregory G. Coates, Bernadette Coates and one employee earned but not paid in order to preserve the Company’s working capital. The Company intends to repay these amounts at such time that it has sufficient working capital and after the related party notes to George J. Coates, Bernadette Coates and one employee have been repaid with interest thereon. Deferred compensation owed to Gregory G. Coates will be paid at such time that the Company has sufficient working capital. During the year ended December 31, 2017, $10,000 of deferred compensation was paid to George J. Coates. No other payments of deferred compensation were made during the years ended December 31, 2017 and 2016. Inventory Inventory consists of raw materials and work-in-process, including overhead and is stated at the lower of cost or market determined by the first-in, first-out method. Inventory items designated as obsolete or slow moving are reduced to net realizable value. Market value is determined using current replacement cost. Property, Plant and Equipment Property, plant and equipment is stated at cost. Depreciation is computed using the straight-line method over the estimated useful life of the assets: 40 years for buildings and building improvements, 3 to 7 years for machinery and equipment and 5 to 10 years for furniture and fixtures. Repairs and maintenance expenditures, which do not extend the useful lives of the related assets, are expensed as incurred. In the event that facts and circumstances indicate that long-lived assets may be impaired, an evaluation of recoverability is performed. Should such evaluation indicate that there has been an impairment of one or more long-lived assets, the cost basis of such assets would be adjusted accordingly, at that time. Income Taxes Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future. Such deferred income tax asset and liability computations are based on enacted tax laws and rates applicable to 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 and are adjusted when conditions indicate that deferred tax assets will be realized. Income tax expense (benefit) is the tax payable or refundable for the period, plus or minus the change during the period in deferred tax assets and liabilities. Deferred tax assets and the valuation allowance at December 31, 2017 and 2016, have been adjusted to reflect the change in effective tax rates that went into effect as of January 1, 2018, pursuant to the Tax Cuts and Jobs Act of 2017. The Company evaluates any uncertain tax positions for recognition by determining if the weight of available evidence indicates it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes. In the event recognition of an uncertain tax position is indicated, the Company measures the tax benefit as the largest amount which is more than 50% likely of being realized upon ultimate settlement. This process of evaluating and estimating uncertain tax positions and tax benefits requires the consideration of many factors, which may require periodic adjustments and which may not accurately forecast actual outcomes. Interest and penalties, if any, related to tax contingencies would be included in income tax expense. Loss per Share Basic net loss per share is based on the weighted average number of common shares outstanding without consideration of potentially dilutive shares of common stock. Diluted net income per share is based on the weighted average number of common and potentially dilutive common shares outstanding, when applicable. Net loss per share was determined on a pro forma basis assuming the one-for-200 reverse stock split, which occurred Use of Estimates The preparation of the Company’s financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These significant estimates include determining the fair value of convertible promissory notes containing embedded derivatives and variable conversion rates, determining a value for shares of Series A Preferred Stock and Series B Convertible Preferred Stock issued, assigning useful lives to the Company’s property, plant and equipment, determining an appropriate amount to reserve for obsolete and slow moving inventory, estimating a valuation allowance for deferred tax assets, assigning expected lives to, and estimating the rate of forfeitures of, stock options granted and selecting a trading price volatility factor for the Company’s common stock in order to estimate the fair value of the Company’s stock options on the date of grant or other appropriate measurement date. Actual results could differ from those estimates. |
Concentrations of Credit and Bu
Concentrations of Credit and Business Risk | 12 Months Ended |
Dec. 31, 2017 | |
Concentrations of Credit and Business Risk [Abstract] | |
CONCENTRATIONS OF CREDIT AND BUSINESS RISK | 2. CONCENTRATIONS OF CREDIT AND BUSINESS RISK The Company maintains cash balances with one financial institution. Monies on deposit are currently fully insured by the Federal Deposit Insurance Corporation. The Company’s operations are devoted to the development, application and marketing of the CSRV ® ® |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value of Financial Instruments [Abstract] | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | 3. FAIR VALUE OF FINANCIAL INSTRUMENTS Cash, Other Assets, Accounts Payable and Accrued Liabilities and Other Liabilities With the exception of convertible promissory notes, the carrying amount of these items approximates their fair value because of the short-term maturity of these instruments. The convertible promissory notes are reported at their estimated fair value, determined as described in more detail in Note 13. Limitations Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates. |
Licensing Agreement and Deferre
Licensing Agreement and Deferred Licensing Costs | 12 Months Ended |
Dec. 31, 2017 | |
Licensing Agreement and Deferred Licensing Costs [Abstract] | |
LICENSING AGREEMENT AND DEFERRED LICENSING COSTS | 4. LICENSING AGREEMENT AND DEFERRED LICENSING COSTS The Company holds a manufacturing, use, lease and sale license from George J. Coates and Gregory G. Coates for the CSRV ® ® ® ® ® Under the License Agreement, George J. Coates and Gregory G. Coates agreed that they will not grant any Western Hemisphere licenses to any other party with respect to the CSRV ® At December 31, 2017 and 2016 deferred licensing costs, comprised of expenditures for patent costs incurred pursuant to the CSRV ® |
Agreement Assigned to Almont En
Agreement Assigned to Almont Energy, Inc. | 12 Months Ended |
Dec. 31, 2017 | |
Agreement Assigned to Almont Energy, Inc. [Abstract] | |
AGREEMENT ASSIGNED TO ALMONT ENERGY, INC. | 5. AGREEMENT ASSIGNED TO ALMONT ENERGY, INC. In 2010, Almont Energy Inc. (“Almont”), a privately held, independent third-party entity based in Alberta, Canada became the assignee of a sublicense which covers the use of the CSRV ® ® In prior years, the Company received a non-refundable $300,000 deposit on the Canadian License. As the Company continues to be desirous of commencing shipments of its CSRV ® ® Year Ending Amount 2018 19,000 2019 19,000 2020 19,000 2021 19,000 Thereafter 94,000 $ 170,000 |
Non-Exclusive Distribution Subl
Non-Exclusive Distribution Sublicense with Renown Power Development, Ltd. | 12 Months Ended |
Dec. 31, 2017 | |
Non-Exclusive Distribution Sublicense with Renown Power Development, Ltd. [Abstract] | |
NON-EXCLUSIVE DISTRIBUTION SUBLICENSE WITH RENOWN POWER DEVELOPMENT, LTD. | 6. NON-EXCLUSIVE DISTRIBUTION SUBLICENSE WITH RENOWN POWER DEVELOPMENT, LTD. In February 2015, the Company granted a non-exclusive distribution sublicense to Renown Power Development, Ltd., a China-based sales and distribution company (“Renown”) covering the territory defined as the Western Hemisphere. Under this sublicense, Renown will be permitted to sell, lease and distribute CSRV ® ® ® ® At this time, as the Company’s intellectual property rights only cover the territory of North America, it does not have any rights to enter into a manufacturing and sale license agreement with Coates Power. These rights are currently held by George J. Coates, Gregory G. Coates and The Coates Trust, a trust controlled by George J. Coates. Coates Power and Renown are controlled and managed by Mr. James Pang, the Company’s liaison agent in China. The Company received a $131,000 cash deposit with an order from Coates Power to produce two Gen Sets. This amount is included in Deposits in the accompanying balance sheets at December 31, 2017 and 2016. The Company intends to build and ship these two generators at such time that Coates Power is able to commence production in accordance with the manufacturing license agreement and there is sufficient working capital for this purpose. |
Inventory
Inventory | 12 Months Ended |
Dec. 31, 2017 | |
Inventory [Abstract] | |
INVENTORY | 7. INVENTORY Inventory at December 31, consisted of the following: 2017 2016 Raw materials $ 104,000 $ 178,000 Work-in-process - 13,000 Total $ 104,000 $ 191,000 |
License Deposits
License Deposits | 12 Months Ended |
Dec. 31, 2017 | |
License Deposits [Abstract] | |
LICENSE DEPOSITS | 8. LICENSE DEPOSITS License deposits consist of monies received as deposits on sublicense agreements, primarily comprised of deposits from Renown in the amount of $498,000 and from Almont in the amount of $300,000. The Almont deposit is being recognized as income on a straight-line basis over the remaining period until expiration of the last remaining CSRV ® In December 2016, the Company entered into an exclusive sublicense agreement with a group of companies under common ownership referred to as the Secure Supplies Companies (“Secure Supplies”). Under this sublicense agreement, Secure Supplies intended to procure a substantial number of large industrial CSRV ® ® Sublicensing fee revenue for the years ended December 31, 2017 and 2016 amounted to $19,000 and $29,000, respectively. Included in sublicensing fee revenue for 2016, was a $10,000 sublicensing fee received from Secure Supplies. |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT | 9. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment at cost, less accumulated depreciation, consists of the following at December 31: 2017 2016 Land $ 1,235,000 $ 1,235,000 Building 964,000 964,000 Building improvements 83,000 83,000 Machinery and equipment 689,000 689,000 Furniture and fixtures 57,000 57,000 3,028,000 3,028,000 Less: Accumulated depreciation (996,000 ) (952,000 ) Total $ 2,032,000 $ 2,076,000 Depreciation expense amounted to $45,000 and $44,000 for the years ended December 31, 2017 and 2016, respectively. |
Mortgage Loan Payable
Mortgage Loan Payable | 12 Months Ended |
Dec. 31, 2017 | |
Mortgage Loan Payable [Abstract] | |
MORTGAGE LOAN PAYABLE | 10. MORTGAGE LOAN PAYABLE The Company has a mortgage loan on the land and building that serves as its headquarters and research and development facility which bears interest at the rate of 7.5% per annum and matures in July 2018. Interest expense for the years ended December 31, 2017 and 2016 on this mortgage amounted to $99,000 and $95,000, respectively. The loan requires monthly payments of interest, plus $5,000 which is being applied to the principal balance. The remaining principal balance at December 31, 2017 and 2016 was $1,273,000 and $1,333,000, respectively. The mortgage loan may be prepaid in whole, or, in part, at any time without penalty. The Company will be required to renegotiate the terms of a further extension of the mortgage loan or successfully refinance the property with another mortgage lender, if possible. Failure to do so, could adversely affect the Company’s financial position and results of operations. The loan is collateralized by a security interest in all of the Company’s assets, the pledge of 25,000 shares of common stock of the Company owned by George J. Coates, which were deposited into escrow for the benefit of the lender and the personal guarantee of George J. Coates. The Company is not permitted to create or permit any secondary mortgage or similar liens on the property or improvements thereon without prior consent of the lender. |
Accounts Payable and Accrued Li
Accounts Payable and Accrued Liabilities | 12 Months Ended |
Dec. 31, 2017 | |
Accounts Payable and Accrued Liabilities [Abstract] | |
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES | 11. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES Accounts payable and accrued liabilities at December 31, consisted of the following: 2017 2016 Legal and professional fees $ 1,427,000 $ 1,452,000 Accrued interest expense 582,000 502,000 General and administrative expenses 420,000 392,000 Research and development costs 115,000 115,000 Total $ 2,544,000 $ 2,461,000 |
Promissory Notes to Related Par
Promissory Notes to Related Parties | 12 Months Ended |
Dec. 31, 2017 | |
Promissory Notes to Related Parties [Abstract] | |
PROMISSORY NOTES TO RELATED PARTIES | 13. PROMISSORY NOTES TO RELATED PARTIES Promissory Notes Issued to George J. Coates During the years ended December 31, 2017 and 2016, the Company issued, in a series of transactions, promissory notes to George J. Coates and received cash proceeds of $50,000 and $177,000, respectively. During the years ended December 31, 2017 and 2016 the Company repaid promissory notes to George J. Coates in cash in the aggregate principal amount of $33,000 and $30,000, respectively, and $48,000 and $63,000 of interest in 2017 and 2016, respectively. In addition, during the year ended December 31, 2016, the Company and Mr. Coates mutually agreed to convert a total of $159,000 of promissory notes into common stock of the Company at exercise prices ranging from $0.0006 to $0.0011 per share. The exercise price was determined to be the closing trading price of the Company’s common stock on the dates of conversion. The promissory notes are payable on demand and provide for interest at the rate of 17% per annum, compounded monthly. At December 31, 2017, the outstanding balance consisted of $20,000 of principal and $318,000 of accrued interest. Promissory Note Issued to Gregory G. Coates The Company has a non-interest bearing note payable to Gregory G. Coates, son of George J. Coates, President, Technology Division and Director, with a principal balance of $1,418,000 at December 31, 2017 which is payable on demand. During the year ended December 31, 2017, the Company repaid $20,000 principal amount of this promissory note. Interest at the rate of 10% per annum amounting to $143,000 and $144,000 has been imputed on this promissory note for the years ended December 31, 2017 and 2016, respectively. Promissory Notes Issued to Bernadette Coates During the years ended December 31, 2017 and 2016, the Company issued, in a series of transactions, promissory notes to Bernadette Coates, spouse of George J. Coates, and received cash proceeds of $52,000 and $-0-, respectively. During the years ended December 31, 2017 and 2016 the Company repaid promissory notes to Bernadette Coates in cash in the aggregate principal amount of $31,000 and $-0-. The promissory notes are payable on demand and provide for interest at the rate of 17% per annum, compounded monthly. At December 31, 2017, the outstanding balance consisted of $29,000 of principal and $95,000 of accrued interest. Promissory Note to Employee During the year ended December 31, 2016, the Company issued a promissory note to an employee and received cash proceeds of $5,000. The promissory note is payable on demand and provides for interest at the rate of 17% per annum, compounded monthly. Accrued interest on this note amounted to $1,000 at December 31, 2017. For the years ended December 31, 2017 and 2016, aggregate interest expense on all promissory notes to related parties amounted to $223,000 and $293,000, respectively. |
Convertible Promissory Notes an
Convertible Promissory Notes and Embedded Derivative Liability | 12 Months Ended |
Dec. 31, 2017 | |
Convertible Promissory Notes and Embedded Derivative Liability [Abstract] | |
CONVERTIBLE PROMISSORY NOTES AND EMBEDDED DERIVATIVE LIABILITY | 14. CONVERTIBLE PROMISSORY NOTES AND EMBEDDED DERIVATIVE LIABILITY From time to time, the Company issues convertible promissory notes. At December 31, 2017, there was $186,000 principal amount of convertible promissory notes outstanding. The net proceeds from these convertible notes were used for general working capital purposes. During the years ended December 31, 2017 and 2016, $867,000 and $190,000, respectively, of convertible promissory notes were issued. The notes may be converted into unregistered shares of the Company’s common stock at discounts ranging from 30% to 38% of the defined trading price of the common stock on the date of conversion. The defined trading prices are based on the trading price of the stock during a defined trading period ranging from 10 to 25 trading days immediately preceding the date of conversion. The conversion rate discount establishes a beneficial conversion feature (“BCF”) or unamortized discount, which is required to be valued and accreted to interest expense over the six-month period until the conversion of the notes into restricted shares of common stock is permitted. In addition, the conversion formula meets the conditions that require accounting for convertible notes as derivative liability instruments. All of the convertible notes become convertible, in whole, or in part, beginning on the six-month anniversary of the issuance date and may be prepaid at the option of the Company, generally with a prepayment penalty ranging from 25% to 50% of the principal amount of the convertible note at any time prior to becoming eligible for conversion. In accordance with GAAP, the estimated fair value of the embedded derivative liability related to the convertible notes is required to be remeasured at each balance sheet date. The fair value measurement accounting standard establishes a valuation hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability developed based on independent market data sources. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors market participants would use in valuing the asset or liability developed based upon the best information available. The valuation hierarchy is composed of three categories. The three levels of the fair value hierarchy are as follows: ● Level 1 – Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. ● Level 2 – Inputs include quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. ● Level 3 – Inputs to the fair value measurement are unobservable inputs or valuation techniques. The estimated fair value of the embedded derivative liabilities related to promissory notes outstanding was measured as the aggregate estimated fair value, based on Level 2 inputs, which included the average of the quoted daily yield curve rates on six-month and one-year treasury securities and, because the actual volatility rate on the Company’s common stock is not available, a conservative estimated volatility rate of 200%. The embedded derivative liability arises because, based on historical trading patterns of the Company’s stock, the formula for determining the Conversion Rate is expected to result in a different Conversion Rate than the closing price of the stock on the actual date of conversion (hereinafter referred to as the “Variable Conversion Rate Differential”). The estimated fair values of the derivative liabilities have been calculated based on a Black-Scholes option pricing model. The following table presents the Company’s fair value hierarchy of financial assets and liabilities measured at fair value on: December 31, December 31, Level 1 Inputs $ - $ - Level 2 Inputs 359,000 153,000 Level 3 Inputs - - Total $ 359,000 $ 153,000 In a series of transactions, during the year ended December 31, 2017, convertible promissory notes with an aggregate principal balance of $726,000, including accrued interest thereon were converted into 21,879,033 unregistered shares of common stock. The Company incurred a loss on these conversions amounting to $264,000 for the year ended December 31, 2017. Included in this loss is $43,000 related to the issuance of 1,063,351 unregistered shares of common stock pursuant to the provisions of certain convertible notes which require additional shares of common stock to be issued if the trading price, as defined, declines during the 23-trading day period after conversions shares are delivered to the convertible noteholder. In a series of transactions, during the year ended December 31, 2016, convertible promissory notes with an aggregate principal balance of $715,000, including accrued interest thereon were converted into 6,745,724 unregistered shares of common stock. The Company incurred a loss on these conversions amounting to $143,000 for the year ended December 31, 2016. Included in this loss is $37,000 related to the issuance of 315,716 unregistered shares of common stock pursuant to the provisions of certain convertible notes which require additional shares of common stock to be issued if the trading price, as defined, declines during the 23-trading day period after conversions shares are delivered to the convertible noteholder. At December 31, 2017, the Company had reserved 46,037,325 shares of its unissued common stock for conversion of convertible promissory notes. The Company made the private placement of these securities in reliance upon Section 4(2) of the Securities Act of 1933, as amended (the “Act”), Rule 506 of Regulation D, and the rules and regulations promulgated thereunder, and/or upon any other exemption from the registration requirements of the Act, as applicable. |
Capital Stock
Capital Stock | 12 Months Ended |
Dec. 31, 2017 | |
Capital Stock/Stock Options [Abstract] | |
CAPITAL STOCK | 15. CAPITAL STOCK Common Stock The Company’s common stock is traded on OTC Pink Sheets. Investors can find real-time quotes and market information for the Company at www.otcmarkets.com At the close of trading in the Company’s common stock on December 1, 2017, a 1:200 reverse stock split of all of the Company’s shares of common stock, shares of preferred stock, common stock warrants and stock options became effective. Shareholders were paid cash-in-lieu of any fractional shares that would have resulted in connection with the reverse stock split. The reverse stock split was approved by the board of directors and the George J. Coates, the majority stockholder by means of a written consent. For purposes of presenting the accompanying financial statements for the years ended December 31, 2017 and 2016, all balances, transactions and calculations were restated on a pro forma basis as if the reverse stock split occurred prior to the beginning of the year ended December 31, 2016. The following common stock transactions occurred during the year ended December 31, 2017: ● In a series of transactions, convertible promissory notes with an aggregate principal balance of $767,000, including accrued interest thereon, were converted into 21,879,384 unregistered shares of common stock. ● In May 2017, the Company issued 44,443 shares of stock to a lender as payment for interest due on a $25,000 short term loan which was repaid in full. The amount of such interest was $4,000. ● In February 2017, Barry C. Kaye converted 6.86 shares of Series B Convertible Preferred Stock into 6,860 restricted shares of common stock. ● Fractional shares resulting from the reverse stock split, amounting to the equivalent of 97 post-reverse stock split shares of common stock were canceled as the holders were paid cash in lieu of receiving such fractional shares. The following common stock transactions occurred during the year ended December 31, 2016: ● In a series of transactions during the year ended December 31, 2016, convertible promissory notes with an aggregate principal balance of $715,000, including accrued interest thereon, were converted into 6,745,724 unregistered shares of common stock. ● In a series of transactions during the year ended December 31, 2016, the Company issued 862,470 registered shares of its common stock to Southridge Partners II LP (“Southridge”) under the 2015 EP Agreement, as discussed in Note 18, in consideration for $199,000. The proceeds were used for general working capital. The Company is required to deliver shares of its common stock to Southridge with each Put Notice based on the dollar amount of the Put Notice and the trading price of the common stock. ● During the year ended December 31, 2016, the Company made private sales, pursuant to stock purchase agreements, of 575,000 unregistered shares of its common stock and 575,000 common stock warrants to purchase one unregistered share of its common stock at exercise prices ranging from $0.10 to $0.20 per share, in consideration for $75,000. ● During the year ended December 31, 2016, George J. Coates and Barry C. Kaye converted 575.03 shares and 14.88 shares of Series B into 575,030 and 14,880 restricted shares of the Company’s common stock, respectively. ● During the year ended December 31, 2016, in a series of transactions by mutual consent between the Company and George J. Coates, $472,000 principal amount of promissory notes, including accrued interest of $315,000, was converted into 2,852,291 restricted, unregistered shares of the Company’s common stock at conversion rates ranging from $0.12 to $0.22 per share, which was the closing trading price of the stock on the respective dates of conversion. Effective December 31, 2016, by mutual agreement between the Company and Mr. Coates, the $315,000 portion of these conversions that represented accrued interest was rescinded. Accordingly, Mr. Coates returned 1,795,699 shares of the Company’s common stock which were restored to authorized, unissued status and the $315,000 was restored on the Company’s books as unpaid, accrued interest at December 31, 2016. At December 31, 2017, the Company had reserved 6,428,895 shares of its common stock to cover the potential conversion of convertible securities and exercise of stock options and warrants. Preferred Stock and Anti-dilution Rights The Company is authorized to issue 350,000 shares of preferred stock, par value, $0.001 per share (the “Preferred Stock”). The Company may issue any class of the Preferred Stock in any series. The board is authorized to establish and designate series, and to fix the number of shares included in each such series and the relative rights, preferences and limitations as between series, provided that, if the stated dividends and amounts payable on liquidation are not paid in full, the shares of all series of the same class shall share ratably in the payment of dividends including accumulations, if any, in accordance with the sums which would be payable on such shares if all dividends were declared and paid in full, and in any distribution of assets other than by way of dividends in accordance with the sums which would be payable on such distribution if all sums payable were discharged in full. Shares of each such series when issued shall be designated to distinguish the shares of each series from shares of all other series. There are two series of Preferred Stock that have been designated to date from the total 100,000,000 authorized shares of Preferred Stock. These are as follows: ● Series A Preferred Stock, par value $0.001 per share (“Series A”), 5,000 shares designated, 3,601 and 250 shares issued and outstanding as of December 31, 2017 and 2016, respectively. Shares of Series A entitle the holder to 10,000 votes per share on all matters brought before the shareholders for a vote. These shares are not entitled to receive dividends or share in distributions of capital and have no liquidation preference. All outstanding shares of Series A are owned by George J. Coates, which entitle him to 2,500,000 million votes in addition to his voting rights from the shares of common stock and the shares of Series B he holds. The Company may issue additional shares of Series A Preferred Stock to Mr. Coates if deemed necessary to provide anti-dilution protection and maintain his ownership percentage of eligible votes. Issuances of shares of Series A to George J. Coates do not have any effect on the share of dividends or liquidation value of the holders of the Company’s common stock. However, the voting rights of the holders of the Company’s common stock are diluted with each issuance. During the year ended December 31, 2017, the Company issued 3,351 shares of Series A with an estimated fair value of $17,000 to George J. Coates, representing anti-dilution shares to restore Mr. Coates’ percentage of eligible votes to 85.7%. This percentage increased during the year ended December 31, 2016, as a result of Mr. Coates’ acquisition of 1,056,592 shares of common stock upon conversion of promissory notes from the Company which he held with a principal amount of $157,000 and 575,030 shares of common stock upon conversion of 575.03 shares of Series B Convertible Preferred Stock, par value $0.001 per share (“Series B”). ● Series B Convertible Preferred Stock, par value $0.001 per share, 345,000 shares designated and 228,471 and 81,263 shares issued and outstanding as of December 31, 2017 and 2016, respectively. Shares of Series B do not earn any dividends and may be converted at the option of the holder at any time beginning on the second annual anniversary date after the date of issuance into 1,000 unregistered shares of the Company’s common stock. Holders of the Series B are entitled to one thousand votes per share held on all matters brought before the shareholders for a vote. In the event that either (i) the Company enters into an underwriting agreement for a secondary public offering of securities, or (ii) a change in control of the Company is consummated representing 50% more of the then outstanding shares of Company’s common stock, plus the number of shares of common stock into which any convertible preferred stock is convertible, regardless of whether or not such shares are otherwise eligible for conversion, then the Series B may be immediately converted at the option of the holder into restricted shares of the Company’s common stock. The Company provides anti-dilution protection for certain of its key employees. For each new share of common stock issued by the Company to non-Coates family members in the future, additional shares of Series B will be issued to maintain their fixed ownership percentage of the Company. The fixed ownership percentage is adjusted for acquisitions and dispositions of common stock, not related to conversions of Series B Convertible Preferred Stock, by these key employees. At December 31, 2017, the fixed ownership percentages were as follows: 1. George J. Coates – 80.63% 2. Gregory G. Coates – 6.10% 3. Barry C. Kaye – 0.048% These anti-dilution provisions do not apply to new shares of common stock issued in connection with exercises of employee stock options, a secondary public offering of the Company’s securities or a merger or acquisition. The number of shares of Series B outstanding at December 31, 2017, consisted of 211,105, 16,130 and 1,236 shares held by George J. Coates, Gregory G. Coates and Barry C. Kaye, respectively. The number of shares of Series B that become convertible into common stock, by year are as follows: Total 2018 2019 George J. Coates 211,105 74,506 136,599 Gregory G. Coates 16,130 5,484 10,646 Barry C. Kaye 1,236 413 823 During the year ended December 31, 2017, During the year ended December 31, 2017, Barry C. Kaye converted 6.86 shares of Series B into 6,860 shares of the Company’s common stock, respectively. During the year ended December 31, 2016, 59,694, 4,360 and 335 shares of Series B were issued to George J. Coates, Gregory G. Coates and Barry C. Kaye, respectively, having an estimated fair value of $6,386,000, $455,000 and $35,000, respectively. These amounts were included in stock-based compensation expense in the accompanying statement of operations for the year ended December 31, 2016. During the year ended December 31, 2016, George J. Coates and Barry C. Kaye converted 575.03 shares and 14.88 shares of Series B into 575,030 and 14,880 shares of the Company’s common stock, respectively. In the event that all of the 228,471 shares of Series B outstanding at December 31, 2017, were converted once the conversion restrictions lapse, an additional 228,471,000 new unregistered shares of common stock would be issued. On a pro forma basis, based on the number of shares of common stock outstanding at December 31, 2017, this would dilute the ownership percentage of non-affiliated stockholders from 91.8% to 12.8%. To the extent that additional shares of Series B are issued under the anti-dilution plan, the non-affiliated stockholders’ percentage ownership of the Company would be further diluted. |
Income (Loss) Per Share
Income (Loss) Per Share | 12 Months Ended |
Dec. 31, 2017 | |
Income (Loss) Per Share [Abstract] | |
INCOME (LOSS) PER SHARE | 16. INCOME (LOSS) PER SHARE At December 31, 2017, there were stock warrants outstanding to purchase 751,725 shares of common stock at exercise prices ranging from $0.10 to $13.50 per share, vested stock options outstanding to acquire 62,350 shares of common stock at exercise prices ranging from $5.60 to $88.00 per share and $186,000 of convertible promissory notes outstanding, which on a pro forma basis assuming all such promissory notes were converted into shares of common stock using the contractual conversion price determined as of the close of trading on the last trading day of 2017, would have been convertible into 17,275,869 shares of common stock. At December 31, 2016, there were stock warrants outstanding to purchase 751,725 shares of common stock at exercise prices ranging from $0.10 to $24.00 per share, vested stock options outstanding to acquire 62,350 shares of common stock at exercise prices ranging from $5.60 to $88.00 per share and $99,000 of convertible promissory notes outstanding, which on a pro forma basis assuming all such promissory notes were converted into shares of common stock using the contractual conversion price determined as of the close of trading on the last trading day of 2016, would have been convertible into 1,596,774 shares of common stock. For the years ended December 31, 2017 and 2016, none of the potentially issuable shares of common stock were assumed to be converted because the Company incurred a net loss in those periods and the effect of including them in the calculation would have been anti-dilutive. |
Stock Options
Stock Options | 12 Months Ended |
Dec. 31, 2017 | |
Capital Stock/Stock Options [Abstract] | |
STOCK OPTIONS | 17. STOCK OPTIONS The Company’s 2006 Stock Option and Incentive Plan (the “Stock Plan”) was adopted by the Company’s board in October 2006. In September 2007, the Stock Plan, by consent of George J. Coates, majority shareholder, was adopted by our shareholders. The Stock Plan provides for the grant of stock-based awards to employees, officers and directors of, and consultants or advisors to, the Company and its subsidiaries, if any. Under the Stock Plan, the Company may grant options that are intended to qualify as incentive stock options within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (“ISO’s”), options not intended to qualify as incentive stock options (“non-statutory options”), restricted stock and other stock-based awards. ISO’s may be granted only to employees of the Company. After adjusting for the reverse stock split, a total of 62,500 shares of common stock may be issued upon the exercise of options or other awards granted under the Stock Plan. The maximum number of shares with respect to which awards may be granted during any one year to any employee under the Stock Plan shall not exceed 25% of the 62,500 shares of common stock covered by the Stock Plan. All of the shares of common stock authorized under the Stock Plan have been granted and no further grants may be awarded thereunder. The Company established a 2014 Stock Option and Incentive Plan (the “2014 Stock Plan”) which was adopted by the Company’s board on May 30, 2014. On March 2, 2015, the 2014 Stock Plan, by consent of George J. Coates, majority shareholder, was adopted by our shareholders. The 2014 Stock Plan provides for the grant of stock-based awards to employees, officers and directors of, and consultants or advisors to, the Company and its subsidiaries, if any. Under the 2014 Stock Plan, the Company may grant ISO’s, non-statutory options, restricted stock and other stock-based awards. ISO’s may be granted only to employees of the Company. After adjusting for the reverse stock split, a total of 250,000 shares of common stock may be issued upon the exercise of options or other awards granted under the 2014 Stock Plan. The maximum number of shares with respect to which awards may be granted during any one year to any employee under the 2014 Stock Plan shall not exceed 25% of the 250,000 shares of common stock covered by the 2014 Stock Plan. At December 31, 2017, none of the shares of common stock authorized under the 2014 Stock Plan had been granted as stock options or awarded. The Stock Plan and the 2014 Stock Plan (the “Stock Plans”) are administered by the board and the Compensation Committee. Subject to the provisions of the Stock Plans, the board and the Compensation Committee each has the authority to select the persons to whom awards are granted and determine the terms of each award, including the number of shares of common stock subject to the award. Payment of the exercise price of an award may be made in cash, in a “cashless exercise” through a broker, or if the applicable stock option agreement permits, shares of common stock, or by any other method approved by the board or Compensation Committee. Unless otherwise permitted by the Company, awards are not assignable or transferable except by will or the laws of descent and distribution. Upon the consummation of an acquisition of the business of the Company, by merger or otherwise, the board shall, as to outstanding awards (on the same basis or on different bases as the board shall specify), make appropriate provision for the continuation of such awards by the Company or the assumption of such awards by the surviving or acquiring entity and by substituting on an equitable basis for the shares then subject to such awards either (a) the consideration payable with respect to the outstanding shares of common stock in connection with the acquisition, (b) shares of stock of the surviving or acquiring corporation, or (c) such other securities or other consideration as the board deems appropriate, the fair market value of which (as determined by the board in its sole discretion) shall not materially differ from the fair market value of the shares of common stock subject to such awards immediately preceding the acquisition. In addition to, or in lieu of the foregoing, with respect to outstanding stock options, the board may, on the same basis or on different bases as the board shall specify, upon written notice to the affected optionees, provide that one or more options then outstanding must be exercised, in whole or in part, within a specified number of days of the date of such notice, at the end of which period such options shall terminate, or provide that one or more options then outstanding, in whole or in part, shall be terminated in exchange for a cash payment equal to the excess of the fair market value (as determined by the board in its sole discretion) for the shares subject to such stock options over the exercise price thereof. Unless otherwise determined by the board (on the same basis or on different bases as the board shall specify), any repurchase rights or other rights of the Company that relate to a stock option or other award shall continue to apply to consideration, including cash, that has been substituted, assumed or amended for a stock option or other award pursuant to these provisions. The Company may hold in escrow all or any portion of any such consideration in order to effectuate any continuing restrictions. The board may at any time provide that any stock options shall become immediately exercisable in full or in part, that any restricted stock awards shall be free of some or all restrictions, or that any other stock-based awards may become exercisable in full or in part or free of some or all restrictions or conditions, or otherwise realizable in full or in part, as the case may be. The board or Compensation Committee may, in its sole discretion, amend, modify or terminate any award granted or made under the Stock Plan, so long as such amendment, modification or termination would not materially and adversely affect the participant. No stock options were issued during the years ended December 31, 2017 and 2016. There were no unvested stock options outstanding at December 31, 2017. A summary of the activity in the Company’s Stock Option Plan is as follows (all amounts adjusted to the reverse stock split, as if it had occurred on January 1, 2016): Exercise Price Per Share Number Outstanding Weighted Average Remaining Contractual Life Number Exercisable Weighted Average Exercise Price Weighted Average Fair Value Per Stock Option at Date of Grant Balance, 1/1/16 $ 5.60 – $88.00 62,350 11 62,350 $ 36.34 $ 33.84 Stock options vested - - Stock options expired - - Balance, 12/31/16 $ 5.60 – 88.00 62,350 10 62,350 36.34 33.84 Stock options vested - - Stock options expired - - Balance, 12/31/17 $ 5.60 – $88.00 62,350 9 62,350 $ 36.34 $ 33.84 The weighted average fair value of the Company’s stock options was estimated using the Black-Scholes option pricing model which requires highly subjective assumptions including the expected stock price volatility. These assumptions were as follows: ● Historical stock price volatility 139% - 325% ● Risk-free interest rate 0.21%-4.64% ● Expected life (in years) 4 ● Dividend yield 0.00 The valuation assumptions were determined as follows: ● Historical stock price volatility: The Company utilized the volatility in the trading of its common stock computed for the 12 months of trading immediately preceding the date of grant. ● Risk-free interest rate: The Company bases the risk-free interest rate on the interest rate payable on U.S. Treasury securities in effect at the time of the grant for a period that is commensurate with the assumed expected option life. ● Expected life: The expected life of the options represents the period of time options are expected to be outstanding. The Company has very limited historical data on which to base this estimate. Accordingly, the Company estimated the expected life based on its assumption that the executives will be subject to frequent blackout periods during the time that the stock options will be exercisable and based on the Company’s expectation that it will complete its research and development phase and commence its initial production phase. The vesting period of these options was also considered in the determination of the expected life of each stock option grant. ● No expected dividends. The following table sets forth information with respect to stock options outstanding at December 31, 2017: Name Title Number of Shares of Common Stock Underlying Stock Options (1) Exercise Price per Share Option George J. Coates Chairman, Chief Executive Officer and 5,000 $ 88.00 10/23/2021 President 250 80.00 11/4/2024 1,375 80.00 11/17/2025 9,000 50.00 7/25/2026 9,075 12.00 6/24/2027 Gregory G. Coates Director and President, Technology Division 2,500 88.00 10/23/2021 9,000 48.00 8/8/2026 1,757 5.60 4/30/2029 Barry C. Kaye Director, Treasurer and Chief Financial 625 88.00 10/18/2021 Officer 500 8.40 2/11/2028 1,758 5.60 4/30/2029 Dr. Frank J. Adipietro Non-employee Director 125 88.00 3/28/2022 250 80.00 11/3/2024 425 80.00 11/17/2025 3,335 12.00 6/24/2027 Dr. Richard W. Evans Consultant 125 88.00 3/28/2022 250 78.00 12/27/2024 1,000 50.00 2/15/2026 15,625 12.00 6/20/2027 Dr. Michael J. Suchar Consultant 125 88.00 3/28/2022 Richard Whitworth Non-employee Director 125 88.00 3/28/2022 William Wolf. Esq. Outside General Counsel 125 88.00 4/4/2022 (1) |
Equity Purchase and Registratio
Equity Purchase and Registration Rights Agreements | 12 Months Ended |
Dec. 31, 2017 | |
Equity Purchase and Registration Rights Agreements [Abstract] | |
EQUITY PURCHASE AND REGISTRATION RIGHTS AGREEMENTS | 18. EQUITY PURCHASE AND REGISTRATION RIGHTS AGREEMENTS In July 2015, the Company entered into an equity purchase agreement (the “EP Agreement”) with Southridge Partners II LP (“Southridge”). Pursuant to the terms of the EP Agreement, Southridge committed to purchase up to 1,025,000 shares of the Company’s common stock. In December 2016, the EP Agreement automatically terminated because Southridge had purchased all 1,025,000 registered shares of common stock under the EP Agreement. The terms of the EP Agreements provided that the purchase price for the shares of common stock shall be equal to 94% of the lowest closing price of the common stock during the ten trading days that comprise the defined pricing period. The Company was entitled to exercise a Put to Southridge by delivering a Put Notice, which required Southridge to remit the dollar amount stated in the Put Notice at the end of the pricing period, provided, however, that for each day during the pricing period, if any, that the daily closing price of the Company’s common stock was below the Floor Price, if any, stipulated in the Put Notice issued by the Company, then the dollar amount of the Put would be reduced by 10% for each such day. The Company also entered into a registration rights agreement (the “Registration Rights Agreement”) with Southridge, pursuant to which the Company filed a registration statement with the SEC covering 1,025,000 shares of common stock underlying the EP Agreement, which was declared effective August 5, 2015. In January 2017, the Company received proceeds of $43,000 from sales of 380,707 registered shares of common stock at the end of 2016, under the EP Agreement. During the year ended December 31, 2016, the Company sold 862,470 registered shares of common stock to Southridge and received proceeds of $156,000 under the EP Agreement. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Taxes [Abstract] | |
INCOME TAXES | 19. INCOME TAXES Deferred income taxes are determined using the liability method for the temporary differences between the financial reporting basis and income tax basis of the Company’s assets and liabilities. Deferred income taxes are measured based on the tax rates expected to be in effect when the temporary differences are included in the Company’s tax return. Deferred tax assets and liabilities are recognized based on anticipated future tax consequences attributable to differences between financial statement carrying amounts of assets and liabilities and their respective tax bases. Deferred tax assets decreased by ($4,273,000) and increased by $3,340,000 for the years ended December 31, 2017 and 2016, respectively. The decrease in 2017 primarily resulted from a reduction in the corporate income tax rate from 34% to 21% under Tax Cuts and Jobs Act of 2017, partially offset by a $1,609,000 increase in deferred tax assets. These amounts were fully offset by a corresponding (decrease) increase in the tax valuation allowance resulting in no net change in deferred tax assets, respectively, during these periods. No liability for unrecognized tax benefits was required to be reported at December 31, 2017 and 2016. Based on the Company’s evaluation, it has concluded that there are no significant uncertain tax positions requiring recognition in the Company’s financial statements. The Company’s evaluation was performed for the tax years ended 2013 through 2016, the only periods subject to examination. The Company believes that its income tax positions and deductions will be sustained on audit and does not anticipate that adjustments, if any, will result in a material change to its financial position. For the years ended December 31, 2017 and 2016, there were no penalties or interest related to the Company’s income tax returns. Total deferred tax assets and valuation allowances are as follows at December 31: 2017 2016 Current deferred tax asset - inventory reserve $ 137,000 $ 195,000 Non-Current Deferred Tax Assets: Stock-based compensation expense 8,639,000 10,022,000 Net operating loss carryforwards 5,091,000 7,558,000 Deferred compensation not paid within 2.5 months 363,000 509,000 Accrued liabilities not paid 313,000 466,000 Accrued interest on notes to related parties 163,000 199,000 Total long-term deferred tax assets 14,569,000 18,784,000 Total deferred tax assets 14,706,000 18,979,000 Less: valuation allowance (14,706,000 ) (18,979,000 ) Net deferred tax assets $ - $ - The differences between income tax (benefit) provision in the financial statements and the income tax (benefit) provision computed at the U.S. Federal statutory rate of 21% and 34% at December 31 2017 and 2016, respectively, are as follows: 2017 2016 Federal tax provision at the statutory rate 21.0 % 34.0 % State income tax benefit, net of federal benefit (0.8 ) (0.9 ) Stock-based compensation expense (19.0 ) (29.7 ) Deferred compensation not paid within 2.5 months (1.2 ) 0.6 Accrued interest not deductible for tax return purposes (3.3 ) (3.4 ) Net change in net operating loss carryforwards 29.8 (7.2 ) Loss on conversion of convertible notes (0.9 ) (1.1 ) Increase in estimated fair value of embedded derivative liabilities (0.7 ) (0.6 ) Accrued liabilities not deductible for tax return purposes 0.2 (0.1 ) Total 25.1 (8.4 ) Valuation allowance (25.1 ) 8.4 Effective tax rate 0.0 % 0.0 % At December 31, 2017, the Company had available, $20,717,000 of net operating loss carryforwards which may be used to reduce future federal taxable income, expiring between 2018 and 2037. At December 31, 2017, the Company had available $10,294,000 of net operating loss carryforwards which may be used to reduce future state taxable income, expiring between 2029 and 2037. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | 20. RELATED PARTY TRANSACTIONS Licensing Agreement for CSRV ® The Company’s intellectual property rights for the CSRV ® Non-Exclusive distribution sublicense to Renown Power Development, Ltd. The Company has granted a non-exclusive distribution sublicense to Renown, as more fully discussed in Note 6. Renown is controlled by James Pang, the Company’s exclusive liaison agent in China. Issuances of Common Stock upon Conversion of Series B Convertible Preferred Stock Issuances of common stock to related parties upon conversion of Series B Convertible Preferred Stock during the years ended December 31, 2017 and 2016, is discussed in detail in Note 15. Issuances of Promissory Notes to Related Parties Issuances of promissory notes to related parties during the years ended December 31, 2017 and 2016, are discussed in detail in Note 13. Promissory notes issued to George J. Coates, Bernadette Coates and an employee are payable on demand and provide for interest at the rate of 17% per annum, compounded monthly. The promissory note issued to Gregory G. Coates is non-interest bearing, however, the Company imputes interest at a rate of 10% per annum, which has been charged to interest expense in the accompanying statements of operations. At December 31, 2017, accrued, unpaid interest on outstanding promissory notes to related parties, aggregated $414,000. Stock Options Stock options previously granted to related parties, all of which are fully vested are more fully discussed in Note 17. Issuances and Conversions of Preferred Stock Shares of Series A Preferred Stock awarded to George J. Coates during the years ended December 31, 2017 are discussed in detail in Note 15. Shares of Series B Convertible Preferred Stock awarded to George J. Coates, Gregory G. Coates and Barry C. Kaye and shares converted during the year ended December 31, 2017 and 2016, are discussed in detail in Note 15. Personal Guaranty and Stock Pledge In connection with the Company’s mortgage loan on the Company’s headquarters facility, George J. Coates has pledged certain of his shares of common stock of the Company to the extent required by the lender and provided a personal guaranty as additional collateral. Compensation and Benefits Paid The approximate amount of compensation and benefits, all of which were approved by the board, paid to George J. Coates, Gregory G. Coates and Bernadette Coates, exclusive of stock-based compensation for unregistered, restricted shares of Preferred Stock awarded to George J. Coates and Gregory G. Coates and non-cash, stock-based compensation for employee stock options granted to Gregory G. Coates is summarized as follows: For the Year Ended, 2017 2016 George J. Coates (a) (b) $ 26,000 $ 16,000 Gregory G. Coates (c) (d) (e) 58,000 139,000 Bernadette Coates (f) -0- 5,000 (a) For the years ended December 31, 2017 and 2016, George J. Coates earned additional base compensation of $240,000 and $250,000, respectively, payment of which is being deferred until the Company has sufficient working capital. At December 31, 2017 and 2016, the total amount of deferred compensation was $1,221,000 and $981,000, respectively. These amounts are included in deferred compensation in the accompanying balance sheets at December 31, 2017 and 2016. (b) During the year ended December 31, 2017, the Company issued 3,351 shares of Series A Preferred Stock with an estimated fair value of $17,000 to George J. Coates representing anti-dilution shares to restore Mr. Coates’ percentage of eligible votes to 85.7%. (c) During the year ended December 31, 2017 and 2016, George J. Coates was awarded 136,599 and 59,694 shares of Series B Convertible Preferred Stock, respectively, with an estimated fair value of $5,204,000 and $6,386,000, respectively, for anti-dilution. Each share of Series B Convertible Preferred Stock becomes convertible into 1,000 shares of common stock at any time after the second anniversary of the date of issuance. (d) For the years ended December 31, 2017 and 2016, Gregory G. Coates earned additional base compensation of $110,000 and $33,000, respectively, payment of which is being deferred until the Company has sufficient working capital. At December 31, 2017 and 2016, the total amount of deferred compensation was $143,000 and $33,000, respectively. These amounts are included in deferred compensation in the accompanying balance sheets at December 31, 2017 and 2016. (e) During the years ended December 31, 2017 and 2016, Gregory G. Coates was awarded 10,646 and 4,360 shares of Series B Convertible Preferred Stock with an estimated fair value of $423,000 and $455,000, respectively, for anti-dilution. Each share of Series B Convertible Preferred Stock becomes convertible into 1,000 shares of common stock at any time after the second anniversary of the date of issuance. (f) For the year ended December 31, 2016, Bernadette Coates, who retired at the end of third quarter of 2016, earned additional base compensation of $50,000, respectively, payment of which is being deferred until the Company has sufficient working capital. At December 31, 2017 and 2016, the total amount of deferred compensation was $242,000. These amounts are included in deferred compensation in the accompanying balance sheets at December 31, 2017 and 2016. During the years ended December 31, 2017 and 2016, Barry C. Kaye, Treasurer and Chief Financial Officer was paid compensation of $63,000 and $6,000, respectively. For the years ended December 31, 2017 and 2016, Mr. Kaye earned compensation of $113,000 and $102,000, respectively, which was not paid and is being deferred until the Company has sufficient working capital to remit payment to him. During the year ended December 31, 2016, the Company agreed to accrue interest on the balance of his deferred compensation retroactive to when it began being deferred in May 2012, and, accordingly, recorded interest expense at the rate of 17% per annum, of $105,000. This amount is included in interest expense in the accompanying statement of operations for the year ended December 31, 2016. Interest continues to be accrued on the unpaid balance. During the year ended December 31, 2017, interest accrued on Mr. Kaye’s deferred compensation amounted to $60,000. At December 31, 2017, the total amount of Mr. Kaye’s unpaid, deferred compensation, including accrued interest thereon, was $418,000. This amount is included in accounts payable and accrued liabilities in the accompanying balance sheet at December 31, 2017. During the years ended December 31, 2017 and 2016, Barry C. Kaye was awarded 823 and 335 shares of Series B Convertible Preferred Stock, respectively, with an estimated fair value of At December 31, 2017, the Company owed deferred compensation to an employee in the amount of $16,000, payment of which is being deferred until the Company has sufficient working capital. This amount is included in deferred compensation in the accompanying balance sheet at December 31, 2017. |
Contractual Obligations and Com
Contractual Obligations and Commitments | 12 Months Ended |
Dec. 31, 2017 | |
Contractual Obligations and Commitments [Abstract] | |
CONTRACTUAL OBLIGATIONS AND COMMITMENTS | 21. CONTRACTUAL OBLIGATIONS AND COMMITMENTS The following table summarizes the Company’s contractual obligations and commitments at December 31, 2017, all of which are payable during the year ended December 31, 2018: Deferred compensation $ 1,621,322 Promissory notes to related parties 1,472,409 Mortgage loan payable 1,273,158 Convertible promissory notes 186,444 Total $ 4,553,333 |
Litigation and Contingencies
Litigation and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Litigation and Contingencies [Abstract] | |
LITIGATION AND CONTINGENCIES | 22. LITIGATION AND CONTINGENCIES The Company is not a party to any litigation that is material to its business. |
Recently Issued Accounting Stan
Recently Issued Accounting Standards | 12 Months Ended |
Dec. 31, 2017 | |
Recently Issued Accounting Standards [Abstract] | |
RECENTLY ISSUED ACCOUNTING STANDARDS | 23. RECENTLY ISSUED ACCOUNTING STANDARDS Revenue Recognition In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”), which amends the existing accounting standards for revenue recognition. ASU 2014-09 is based on principles that govern the recognition of revenue at an amount an entity expects to be entitled to when products are transferred to customers. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606) – Deferral of the Effective Date, which defers the effective date of ASU 2014-09 for one year and permits early adoption. Accordingly, the Company may adopt the standard in either its first quarter of 2018 or 2019. In April 2016, the FASB issued ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606) – Identifying Performance Obligations and Licensing (“ASU 2016-10”), which amends the guidance in ASU 2014-09 related to identifying performance obligations and accounting for licenses of intellectual property. The Company will adopt ASU 2016-10 with ASU 2014-09. The Company is currently evaluating the impact of adopting the new revenue recognition standard, as amended, but does not expect it to have a material impact on its financial statements. Stock Compensation In March 2016, the FASB issued ASU No. 2016-09, Compensation – Stock Compensation (Topic 718), which simplified certain aspects of the accounting for share-based payment transactions, including income taxes, classification of awards and classification in the statement of cash flows. ASU 2016-09 will be effective for the Company beginning in its first quarter of 2018. The Company is currently evaluating the impact of adopting the new stock compensation standard but does not expect it to have a material impact on its financial statements. Financial Instruments In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments – Overall (Subtopic 825-10) (“ASU 2016-01”), which updates certain aspects of recognition, measurement, presentation and disclosure of financial instruments. ASU 2016-01 will be effective for the Company beginning in its first quarter of 2019. The Company does not believe the adoption of the new financial instruments standard will have a material impact on its financial statements. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 24. SUBSEQUENT EVENTS Section 3(a)10 Exempt Securities Transaction On March 19, 2018, the Company entered into a Settlement Agreement and Stipulation (the “Settlement Agreement”) with Livingston Asset Management LLC, a Florida limited liability company (“LAM”), pursuant to which the Company agreed to issue common stock to LAM in exchange for the settlement of $69,000 (the “Settlement Amount”) of past-due obligations and accounts payable of the Company. LAM purchased the obligations and accounts payable from certain vendors of the Company as described below. On April 2, 2018, the Circuit Court of Baltimore County, Maryland (the “Court”), entered an order (the “LAM Order”) approving, among other things, the fairness of the terms and conditions of an exchange in reliance upon an exemption from registration provided for in Section 3(a)(10) of the Securities Act of 1933, as amended (the “Securities Act”), in accordance with a stipulation of settlement, pursuant to the Settlement Agreement between the Company and LAM. Pursuant to the court order, LAM commenced an action against the Company to recover an aggregate of $69,000 of past-due obligations and accounts payable of the Company, which LAM had purchased from certain vendors of the Company pursuant to the terms of separate claim purchase agreements between LAM and each of such vendors (the “LAM Assigned Accounts”). The LAM Assigned Accounts relate to certain accounting services provided to the Company and a supplier invoice. The Settlement Agreement became effective and binding upon the Company and LAM upon execution of the Order by the Court on April 2, 2018. Pursuant to the terms of the Settlement Agreement approved by the LAM Order, on April 2, 2018, the Registrant agreed to issue shares to LAM (the “LAM Settlement Shares”) of the Registrant’s common stock at a 30% discount from the selling price of the settlement shares sold by LAM, as defined in the settlement agreement. The Settlement Agreement provides that the LAM Settlement Shares will be issued in one or more tranches, as necessary, sufficient to satisfy the settlement amount through the issuance of freely trading securities issued in reliance upon an exemption provided for in Section 3(a)(10) of the Securities Act. The parties reasonably estimate that the fair market value of the LAM Settlement Shares to be received by LAM is equal to approximately $99,000. Additional tranche requests shall be made as requested by LAM until the LAM Settlement Amount is paid in full. The Settlement Agreement provides that in no event shall the number of shares of Common Stock issued to LAM or its designee in connection with the Settlement Agreement, when aggregated with all other shares of Common Stock then beneficially owned by LAM and its affiliates (as calculated pursuant to Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations thereunder), result in the beneficial ownership by LAM and its affiliates (as calculated pursuant to Section 13(d) of the Exchange Act and the rules and regulations thereunder) at any time of more than 9.99% of the Common Stock. The Company is required to reserve a sufficient number of shares of its Common Stock to provide for issuances thereof, upon full satisfaction of the Settlement Amount. On April 6, 2018, the Company issued 4,480,000 shares of Common Stock to LAM, upon which LAM paid $40,000 of the Settlement Amount of the Company's past due accounts payable purchased by LAM in accordance with the Settlement Agreement. Certificate of Validation On April 2, 2018, the Company filed a certificate of validation with the state of Delaware, (i) cure certain technical, procedural defects related to the 1:200 reverse stock split, which became effective at the close of trading on December 31, 2017, (ii) clarify that the reverse stock split effected a 1:200 reduction in the number of the Corporation’s authorized shares of common stock, from 12,000,000,000 to 60,000,000, with retroactive effect to the close of trading on December 1, 2017, (iii) clarify that the reverse stock split effected 1:200 reduction in the number of authorized shares of the Corporation’s preferred stock, from 100,000,000 to 500,000 with retroactive effect to the close of trading on December 1, 2017; and, (iv) concurrently therewith, further amend the Corporation’s Amended Certificate of Articles of Incorporation with the State of Delaware to increase the number of the Corporation’s authorized shares of common stock, par value $0.0001 from 60,000,000 to 120,000,000 and reduce the number of authorized shares of the Corporation’s preferred stock, par value $0.001 from 500,000 to 350,000. The above corporate action was authorized by the board of directors on February 28, 2018, and by means of obtaining the written consent of George J. Coates, the sole majority stockholder, was approved by the shareholders on March 1, 2018. Issuance of Convertible Promissory Notes During the period from January 1, 2018 to April 13, 2018, the Company issued convertible promissory notes and received aggregate net proceeds of $265,000, after transaction costs. The holders may convert the convertible note at any time beginning six months after funding, into shares of the Company’s common stock at a conversion price ranging from 62% to 70% of the trading price, as defined, of the Company’s common stock over a specified trading period prior to the date of conversion. Conversion of Convertible Promissory Notes During the period from January 1, 2018 to April 13, 2018, convertible promissory notes with an aggregate balance of $90,000, including accrued interest thereon, were converted into 9,715,685 unregistered shares of the Company’s common stock. Issuance of Anti-dilution shares During the period from January 1, 2018 to April 13, 2018, the Company issued 48,915, 3,702 and 290 shares of Series B Convertible Preferred Stock to George J. Coates, Gregory G. Coates and Barry C. Kaye, respectively, representing anti-dilution shares related to newly issued shares of common stock. The estimated fair value of these shares was $545,000, $41,000 and $3,000, respectively. Repayment of 17% Promissory Notes to Related Parties During the period from January 1, 2018 to April 13, 2018, the Company partially repaid promissory notes to George J. Coates, Gregory G. Coates. Deferred Compensation As of April 13, 2018, George J. Coates, Gregory G. Coates and Barry C. Kaye agreed to additional deferral of their compensation amounting to $72,000, $22,000, and $39,000, respectively, and Barry C. Kaye was paid $35,000 of his deferred compensation bringing their total deferred compensation to $1,293,000, $164,000, and $257,000, respectively. Compensatory Arrangement with Board Member In April 2018, the Company entered into a compensatory arrangement with Richard Whitworth, a member of the board of directors, pursuant to which the Company will pay Mr. Whitworth 10% of sales billed and collected from new business acquired as a direct result of Mr. Whitworth's efforts. |
The Company and Summary of Si30
The Company and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
The Company and Summary of Significant Accounting Policies [Abstract] | |
Nature of Organization | Nature of Organization The Company has acquired the exclusive licensing rights to the patented Coates spherical rotary valve (“CSRV ® ® ® ® ® Management believes that the CSRV ® ● Improved fuel efficiency ● Lower levels of harmful emissions ● Adaptability to numerous types of engine fuels ● Longer engine life ● Longer intervals between engine servicing The CSRV ® ® ® ® ® ® ® |
Hydrogen Reactor Technology Owned by George J. Coates | Hydrogen Reactor Technology Owned by George J. Coates George J. Coates has developed a hydrogen reactor which rearranges H 2 ® ® The Company previously agreed to collaborate on the development of this technology with WTF Asia International Ltd. (“WTF Asia”), a Hong Kong-based entity to enable it to be applied to large industrial Gen Sets. We have determined that it is no longer feasible to work with WTF Asia due to the owner’s health and concerns with the status of WTF Asia’s technology. The Company intends to independently pursue further development of this technology at some indefinite point in the future. Applications for patent protection of this technology would be filed upon completion of the research and development. Although at this time, no arrangements have been made between the Company and George J. Coates, owner of the technology, regarding licensing of the hydrogen reactor, Mr. Coates has provided his commitment to license this technology to the Company, once the related patent protection is in place. Accordingly, the Company does not currently have any rights to manufacture, use, sell and distribute the hydrogen reactor technology, should it become commercially feasible to manufacture and distribute products powered by the Hydroxy-Gas fuel. The Company has been responsible for all costs incurred to date related to the development of this technology. |
Basis of Presentation | Basis of Presentation The accompanying financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and rules and regulations of the Securities and Exchange Commission (the “SEC”). Since the Company’s inception, the Company has been responsible for the development costs of the CSRV ® ® ® As shown in the accompanying financial statements, the Company has incurred recurring losses from operations and, as of December 31, 2017, had a stockholders’ deficiency of ($6,009,000). In addition, our mortgage loan which had a principal balance of $1,273,000 at December 31, 2017, matures in July 2018. The Company will be required to renegotiate the terms of an extension of the mortgage loan or successfully refinance the property with another mortgage lender, if possible. Failure to do so could adversely affect the Company’s financial position and results of operations. Further, the recent trading price range of the Company’s common stock has introduced additional risk and difficulty to the Company’s challenge to secure needed additional working capital. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management has instituted a cost control program intended to restrict variable costs to only those expenses that are necessary to complete its activities related to entering the production phase of operations, develop additional commercially feasible applications of the CSRV ® During the years ended December 31, 2017 and 2016, the Company raised $959,000 and $642,000, respectively, of new working capital from the following: Description 2017 2016 Issuances of convertible promissory notes $ 810,000 $ 176,000 Issuances of promissory notes to related parties 102,000 182,000 Sales of common stock under equity purchase agreements 43,000 199,000 Private sales of shares of common stock and common stock warrants - 75,000 Licensing fee revenue - 10,000 $ 955,000 $ 642,000 The Company continues to actively seek out new sources of working capital; however, there can be no assurance that it will be successful in these efforts. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. Certain amounts included in the accompanying financial statements for the year ended December 31, 2016 have been reclassified in order to make them comparable to the amounts presented for the year ended December 31, 2017. |
Reverse Stock Split | Reverse Stock Split The Company effected a one-for-200 reverse stock split of all of its outstanding shares of common stock, Series A Preferred Stock, Series B Convertible Preferred Stock, common stock warrants and stock options as of the close of trading on December 1, 2017. All prior year balances of shares of capital stock, warrants and stock options outstanding and all presentations and disclosures of transactions in shares of capital stock, warrants and stock options have been restated on a pro forma basis as if the reverse stock split had occurred prior to the beginning of the year ended December 31, 2016. Such restatements include calculations regarding the Company’s weighted average shares outstanding and loss per share. The following presents the amounts previously reported before the reverse stock split and restated balances reflected in the accompanying balance sheets and statements of stockholders’ deficiency as of January 1, 2016 and December 31, 2016: December 31, 2016 January 1, 2016 Originally Reported Restatement Adjustment As Restated Originally Reported Restatement Adjustment As Restated Common Stock $ 300,273 ($ 298,772 ) $ 1,501 $ 103,679 ($ 103,161 ) $ 518 Series A Preferred Stock 50 (50 ) - 50 (50 ) - Series B Convertible Preferred Stock 16,253 (16,172 ) 81 3,493 (3,475 ) 18 Additional Paid-in Capital 59,813,632 314,994 60,128,626 51,564,723 106,686 51,671,409 |
Revenue Recognition | Revenue Recognition License deposits, which are non-refundable, were received from the granting of sublicenses and are recognized as earned, generally commencing upon acceptance by the licensee. At that time, license revenue will be recognized ratably over the period of time that the sublicense has been granted using the straight-line method. Upon termination of a sublicense agreement, non-refundable license deposits, less any costs related to the termination of the sublicense agreement, are recognized as revenue. Revenue from research and development activities is recognized when earned and realization is reasonably assured, provided that financial risk has been transferred from the Company to its customer. The Company is recognizing the license deposit of $300,000 on a Canadian License as revenue on a straight-line basis over the approximate remaining life through 2027 of the last CSRV ® |
Research and Development | Research and Development Research and development costs are expensed when incurred. Included in accounts payable and accrued liabilities at December 31, 2017 and 2016 is $115,000 for the estimated remediation costs of previously sold Gen Sets that were determined to have cracked heads. |
Intellectual Property | Intellectual Property Under a licensing agreement with George J. Coates and Gregory G. Coates, the Company obtained the rights to manufacture, use and sell the CSRV ® |
Licensing Costs | Licensing Costs Under the CSRV ® ® ® |
Stock-Based Compensation | Stock-Based Compensation Stock-based compensation expense, which does not require any outlay of cash, consists of the following: ● The estimated fair value of shares of the Company’s capital stock issued to key employees for anti-dilution protection pursuant to a resolution of the board of directors. This includes restricted shares of Series A Preferred Stock and Series B Convertible Stock. In 2014, the Company arranged for an independent professional services firm to determine the estimated fair value of Series A Preferred Stock issued in August 2014 and Series B Preferred Stock issued in July 2014. The approach to arriving at the estimated fair value of the Series A Preferred Stock and the Series B Convertible Preferred Stock were determined to have a close correlation to the trading price of the Company’s common stock. Accordingly, upon each subsequent issuance of shares of the Series A Preferred Stock and Series B Convertible Preferred Stock, the original estimated fair values determined by the independent valuation is adjusted, on a pro rata basis, to reflect the closing price of the Company’s common stock on each date of issuance. ● Compensation expense relating to stock options and stock awards under its stock option and incentive plans is recognized as an expense using the fair value measurement method. Under the fair value method, the estimated fair value of awards to employees is charged to income on a straight-line basis over the requisite service period, which is the earlier of the employee’s retirement eligibility date or the vesting period of the award. |
Deferred Compensation | Deferred Compensation Deferred compensation represents salaries of George J. Coates, Gregory G. Coates, Bernadette Coates and one employee earned but not paid in order to preserve the Company’s working capital. The Company intends to repay these amounts at such time that it has sufficient working capital and after the related party notes to George J. Coates, Bernadette Coates and one employee have been repaid with interest thereon. Deferred compensation owed to Gregory G. Coates will be paid at such time that the Company has sufficient working capital. During the year ended December 31, 2017, $10,000 of deferred compensation was paid to George J. Coates. No other payments of deferred compensation were made during the years ended December 31, 2017 and 2016. |
Inventory | Inventory Inventory consists of raw materials and work-in-process, including overhead and is stated at the lower of cost or market determined by the first-in, first-out method. Inventory items designated as obsolete or slow moving are reduced to net realizable value. Market value is determined using current replacement cost. |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment is stated at cost. Depreciation is computed using the straight-line method over the estimated useful life of the assets: 40 years for buildings and building improvements, 3 to 7 years for machinery and equipment and 5 to 10 years for furniture and fixtures. Repairs and maintenance expenditures, which do not extend the useful lives of the related assets, are expensed as incurred. In the event that facts and circumstances indicate that long-lived assets may be impaired, an evaluation of recoverability is performed. Should such evaluation indicate that there has been an impairment of one or more long-lived assets, the cost basis of such assets would be adjusted accordingly, at that time. |
Income Taxes | Income Taxes Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future. Such deferred income tax asset and liability computations are based on enacted tax laws and rates applicable to 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 and are adjusted when conditions indicate that deferred tax assets will be realized. Income tax expense (benefit) is the tax payable or refundable for the period, plus or minus the change during the period in deferred tax assets and liabilities. Deferred tax assets and the valuation allowance at December 31, 2017 and 2016, have been adjusted to reflect the change in effective tax rates that went into effect as of January 1, 2018, pursuant to the Tax Cuts and Jobs Act of 2017. The Company evaluates any uncertain tax positions for recognition by determining if the weight of available evidence indicates it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes. In the event recognition of an uncertain tax position is indicated, the Company measures the tax benefit as the largest amount which is more than 50% likely of being realized upon ultimate settlement. This process of evaluating and estimating uncertain tax positions and tax benefits requires the consideration of many factors, which may require periodic adjustments and which may not accurately forecast actual outcomes. Interest and penalties, if any, related to tax contingencies would be included in income tax expense. |
Loss per Share | Loss per Share Basic net loss per share is based on the weighted average number of common shares outstanding without consideration of potentially dilutive shares of common stock. Diluted net income per share is based on the weighted average number of common and potentially dilutive common shares outstanding, when applicable. Net loss per share was determined on a pro forma basis assuming the one-for-200 reverse stock split, which occurred |
Use of Estimates | Use of Estimates The preparation of the Company’s financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These significant estimates include determining the fair value of convertible promissory notes containing embedded derivatives and variable conversion rates, determining a value for shares of Series A Preferred Stock and Series B Convertible Preferred Stock issued, assigning useful lives to the Company’s property, plant and equipment, determining an appropriate amount to reserve for obsolete and slow moving inventory, estimating a valuation allowance for deferred tax assets, assigning expected lives to, and estimating the rate of forfeitures of, stock options granted and selecting a trading price volatility factor for the Company’s common stock in order to estimate the fair value of the Company’s stock options on the date of grant or other appropriate measurement date. Actual results could differ from those estimates. |
The Company and Summary of Si31
The Company and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
The Company and Summary of Significant Accounting Policies [Abstract] | |
Schedule of new working capital | Description 2017 2016 Issuances of convertible promissory notes $ 810,000 $ 176,000 Issuances of promissory notes to related parties 102,000 182,000 Sales of common stock under equity purchase agreements 43,000 199,000 Private sales of shares of common stock and common stock warrants - 75,000 Licensing fee revenue - 10,000 $ 955,000 $ 642,000 |
Schedule of accompanying balance sheets and statements of stockholders' deficiency | December 31, 2016 January 1, 2016 Originally Reported Restatement Adjustment As Restated Originally Reported Restatement Adjustment As Restated Common Stock $ 300,273 ($ 298,772 ) $ 1,501 $ 103,679 ($ 103,161 ) $ 518 Series A Preferred Stock 50 (50 ) - 50 (50 ) - Series B Convertible Preferred Stock 16,253 (16,172 ) 81 3,493 (3,475 ) 18 Additional Paid-in Capital 59,813,632 314,994 60,128,626 51,564,723 106,686 51,671,409 |
Agreement Assigned to Almont 32
Agreement Assigned to Almont Energy, Inc. (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Agreement Assigned to Almont Energy, Inc. [Abstract] | |
Summary of amortization | Year Ending Amount 2018 19,000 2019 19,000 2020 19,000 2021 19,000 Thereafter 94,000 $ 170,000 |
Inventory (Tables)
Inventory (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Inventory [Abstract] | |
Summary of inventory | 2017 2016 Raw materials $ 104,000 $ 178,000 Work-in-process - 13,000 Total $ 104,000 $ 191,000 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Summary of property, plant and equipment | 2017 2016 Land $ 1,235,000 $ 1,235,000 Building 964,000 964,000 Building improvements 83,000 83,000 Machinery and equipment 689,000 689,000 Furniture and fixtures 57,000 57,000 3,028,000 3,028,000 Less: Accumulated depreciation (996,000 ) (952,000 ) Total $ 2,032,000 $ 2,076,000 |
Accounts Payable and Accrued 35
Accounts Payable and Accrued Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accounts Payable and Accrued Liabilities [Abstract] | |
Summary of accounts payable and accrued liabilities | 2017 2016 Legal and professional fees $ 1,427,000 $ 1,452,000 Accrued interest expense 582,000 502,000 General and administrative expenses 420,000 392,000 Research and development costs 115,000 115,000 Total $ 2,544,000 $ 2,461,000 |
Convertible Promissory Notes 36
Convertible Promissory Notes and Embedded Derivative Liability (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Convertible Promissory Notes and Embedded Derivative Liability [Abstract] | |
Schedule of fair value hierarchy of financial assets and liabilities measured at fair value | December 31, December 31, Level 1 Inputs $ - $ - Level 2 Inputs 359,000 153,000 Level 3 Inputs - - Total $ 359,000 $ 153,000 |
Capital Stock (Tables)
Capital Stock (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Capital Stock/Stock Options [Abstract] | |
Schedule of conversion into shares of common stock | Total 2018 2019 George J. Coates 211,108 74,512 136,596 Gregory G. Coates 16,131 5,486 10,645 Barry C. Kaye 1,232 409 823 |
Stock Options (Tables)
Stock Options (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Capital Stock/Stock Options [Abstract] | |
Summary of stock options outstanding under the company's stock option plans | Exercise Price Per Share Number Outstanding Weighted Average Remaining Contractual Life Number Exercisable Weighted Average Exercise Price Weighted Average Fair Value Per Stock Option at Date of Grant Balance, 1/1/16 $ 5.60 – $88.00 62,350 11 62,350 $ 36.34 $ 33.84 Stock options vested - - Stock options expired - - Balance, 12/31/16 $ 5.60 – 88.00 62,350 10 62,350 36.34 33.84 Stock options vested - - Stock options expired - - Balance, 12/31/17 $ 5.60 – $88.00 62,350 9 62,350 $ 36.34 $ 33.84 |
Summary of assumptions used to determine weighted average fair value | ● Historical stock price volatility 139% - 325% ● Risk-free interest rate 0.21%-4.64% ● Expected life (in years) 4 ● Dividend yield 0.00 ● Historical stock price volatility: The Company utilized the volatility in the trading of its common stock computed for the 12 months of trading immediately preceding the date of grant. ● Risk-free interest rate: The Company bases the risk-free interest rate on the interest rate payable on U.S. Treasury securities in effect at the time of the grant for a period that is commensurate with the assumed expected option life. ● Expected life: The expected life of the options represents the period of time options are expected to be outstanding. The Company has very limited historical data on which to base this estimate. Accordingly, the Company estimated the expected life based on its assumption that the executives will be subject to frequent blackout periods during the time that the stock options will be exercisable and based on the Company’s expectation that it will complete its research and development phase and commence its initial production phase. The vesting period of these options was also considered in the determination of the expected life of each stock option grant. ● No expected dividends. |
Summary of stock options outstanding | Name Title Number of Shares of Common Stock Underlying Stock Options (1) Exercise Price per Share Option George J. Coates Chairman, Chief Executive Officer and 5,000 $ 88.00 10/23/2021 President 250 80.00 11/4/2024 1,375 80.00 11/17/2025 9,000 50.00 7/25/2026 9,075 12.00 6/24/2027 Gregory G. Coates Director and President, Technology Division 2,500 88.00 10/23/2021 9,000 48.00 8/8/2026 1,757 5.60 4/30/2029 Barry C. Kaye Director, Treasurer and Chief Financial 625 88.00 10/18/2021 Officer 500 8.40 2/11/2028 1,758 5.60 4/30/2029 Dr. Frank J. Adipietro Non-employee Director 125 88.00 3/28/2022 250 80.00 11/3/2024 425 80.00 11/17/2025 3,335 12.00 6/24/2027 Dr. Richard W. Evans Consultant 125 88.00 3/28/2022 250 78.00 12/27/2024 1,000 50.00 2/15/2026 15,625 12.00 6/20/2027 Dr. Michael J. Suchar Consultant 125 88.00 3/28/2022 Richard Whitworth Non-employee Director 125 88.00 3/28/2022 William Wolf. Esq. Outside General Counsel 125 88.00 4/4/2022 (1) |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Taxes [Abstract] | |
Schedule of total deferred tax assets and valuation allowances | 2017 2016 Current deferred tax asset - inventory reserve $ 137,000 $ 195,000 Non-Current Deferred Tax Assets: Stock-based compensation expense 8,639,000 10,022,000 Net operating loss carryforwards 5,091,000 7,558,000 Deferred compensation not paid within 2.5 months 363,000 509,000 Accrued liabilities not paid 313,000 466,000 Accrued interest on notes to related parties 163,000 199,000 Total long-term deferred tax assets 14,569,000 18,784,000 Total deferred tax assets 14,706,000 18,979,000 Less: valuation allowance (14,706,000 ) (18,979,000 ) Net deferred tax assets $ - $ - |
Schedule of differences in income tax (benefit) provision | 2017 2016 Federal tax provision at the statutory rate 21.0 % 34.0 % State income tax benefit, net of federal benefit (0.8 ) (0.9 ) Stock-based compensation expense (19.0 ) (29.7 ) Deferred compensation not paid within 2.5 months (1.2 ) 0.6 Accrued interest not deductible for tax return purposes (3.3 ) (3.4 ) Net change in net operating loss carryforwards 29.8 (7.2 ) Loss on conversion of convertible notes (0.9 ) (1.1 ) Increase in estimated fair value of embedded derivative liabilities (0.7 ) (0.6 ) Accrued liabilities not deductible for tax return purposes 0.2 (0.1 ) Total 25.1 (8.4 ) Valuation allowance (25.1 ) 8.4 Effective tax rate 0.0 % 0.0 % |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
Summary of approximate amount of base compensation and benefits | For the Year Ended, 2017 2016 George J. Coates (a) (b) $ 26,000 $ 16,000 Gregory G. Coates (c) (d) (e) 58,000 139,000 Bernadette Coates (f) -0- 5,000 (a) For the years ended December 31, 2017 and 2016, George J. Coates earned additional base compensation of $240,000 and $250,000, respectively, payment of which is being deferred until the Company has sufficient working capital. At December 31, 2017 and 2016, the total amount of deferred compensation was $1,221,000 and $981,000, respectively. These amounts are included in deferred compensation in the accompanying balance sheets at December 31, 2017 and 2016. (b) During the year ended December 31, 2017, the Company issued 3,351 shares of Series A Preferred Stock with an estimated fair value of $17,000 to George J. Coates representing anti-dilution shares to restore Mr. Coates’ percentage of eligible votes to 85.7%. (c) During the year ended December 31, 2017 and 2016, George J. Coates was awarded 135,741 and 59,694 shares of Series B Convertible Preferred Stock, respectively, with an estimated fair value of $5,137,000 and $6,386,000, respectively, for anti-dilution. Each share of Series B Convertible Preferred Stock becomes convertible into 1,000 shares of common stock at any time after the second anniversary of the date of issuance. (d) For the years ended December 31, 2017 and 2016, Gregory G. Coates earned additional base compensation of $110,000 and $33,000, respectively, payment of which is being deferred until the Company has sufficient working capital. At December 31, 2017 and 2016, the total amount of deferred compensation was $143,000 and $33,000, respectively. These amounts are included in deferred compensation in the accompanying balance sheets at December 31, 2017 and 2016. (e) During the years ended December 31, 2017 and 2016, Gregory G. Coates was awarded 10,645 and 4,360 shares of Series B Convertible Preferred Stock with an estimated fair value of $423,000 and $455,000, respectively, for anti-dilution. Each share of Series B Convertible Preferred Stock becomes convertible into 1,000 shares of common stock at any time after the second anniversary of the date of issuance. (f) For the year ended December 31, 2016, Bernadette Coates, who retired at the end of third quarter of 2016, earned additional base compensation of $50,000, respectively, payment of which is being deferred until the Company has sufficient working capital. At December 31, 2017 and 2016, the total amount of deferred compensation was $242,000. These amounts are included in deferred compensation in the accompanying balance sheets at December 31, 2017 and 2016. |
Contractual Obligations and C41
Contractual Obligations and Commitments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Contractual Obligations and Commitments [Abstract] | |
Summary of contractual obligations and commitments | Deferred compensation $ 1,621,322 Promissory notes to related parties 1,472,409 Mortgage loan payable 1,273,158 Convertible promissory notes 186,444 Total $ 4,553,333 |
The Company and Summary of Si42
The Company and Summary of Significant Accounting Policies (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
The Company and Summary of Significant Accounting Policies [Abstract] | ||
Issuances of convertible promissory notes | $ 810,000 | $ 176,000 |
Issuances of promissory notes to related parties | 102,000 | 182,000 |
Sales of common stock under equity purchase agreements | 43,000 | 199,000 |
Private sales of shares of common stock and common stock warrants | 75,000 | |
Licensing fee revenue | 10,000 | |
Working capital | $ 955,000 | $ 642,000 |
The Company and Summary of Si43
The Company and Summary of Significant Accounting Policies (Details 1) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Stockholder's equity reverse stock and restated balances | $ (6,009,408) | $ (5,196,882) | $ (5,299,053) |
Series A Preferred Stock [Member] | |||
Stockholder's equity reverse stock and restated balances | 4 | ||
Series A Preferred Stock [Member] | Originally Reported [Member] | |||
Stockholder's equity reverse stock and restated balances | 50 | 50 | |
Series A Preferred Stock [Member] | Restatement Adjustment [Member] | |||
Stockholder's equity reverse stock and restated balances | (50) | (50) | |
Series B Convertible Preferred Stock [Member] | |||
Stockholder's equity reverse stock and restated balances | 81 | 18 | |
Series B Convertible Preferred Stock [Member] | Originally Reported [Member] | |||
Stockholder's equity reverse stock and restated balances | 16,253 | 3,493 | |
Series B Convertible Preferred Stock [Member] | Restatement Adjustment [Member] | |||
Stockholder's equity reverse stock and restated balances | (16,172) | (3,475) | |
Common Stock [Member] | |||
Stockholder's equity reverse stock and restated balances | 3,694 | 1,501 | 518 |
Common Stock [Member] | Originally Reported [Member] | |||
Stockholder's equity reverse stock and restated balances | 300,273 | 103,679 | |
Common Stock [Member] | Restatement Adjustment [Member] | |||
Stockholder's equity reverse stock and restated balances | (298,772) | (103,161) | |
Additional Paid-in Capital [Member] | |||
Stockholder's equity reverse stock and restated balances | $ 67,699,876 | 60,128,626 | 51,671,409 |
Additional Paid-in Capital [Member] | Originally Reported [Member] | |||
Stockholder's equity reverse stock and restated balances | 59,813,632 | 51,564,723 | |
Additional Paid-in Capital [Member] | Restatement Adjustment [Member] | |||
Stockholder's equity reverse stock and restated balances | $ 314,994 | $ 106,686 |
The Company and Summary of Si44
The Company and Summary of Significant Accounting Policies (Details Textual) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
The Company and Summary of Significant Accounting Policies (Textual) | |||
Stockholder's deficiency | $ (6,009,408) | $ (5,196,882) | $ (5,299,053) |
Negative working capital | (7,467,000) | (5,411,000) | |
Mortgage loan of principal balance | $ 1,273,000 | 1,333,000 | |
Maturity date | Jul. 31, 2018 | ||
New working capital | $ 955,000 | 642,000 | |
Research and development costs | $ 115,000 | $ 115,000 | |
Uncertain tax position, description | In the event recognition of an uncertain tax position is indicated, the Company measures the tax benefit as the largest amount which is more than 50% likely of being realized upon ultimate settlement. | ||
System technology developed over a period | 20 years | ||
Reverse stock split, description | The Company effected a one-for-200 reverse stock split of all of its outstanding shares of common stock, Series A Preferred Stock, Series B Convertible Preferred Stock, common stock warrants and stock options as of the close of trading on December 1, 2017. | ||
Buildings and Building Improvements [Member] | |||
The Company and Summary of Significant Accounting Policies (Textual) | |||
Estimated useful life of the assets | 40 years | ||
Machinery and Equipment [Member] | Maximum [Member] | |||
The Company and Summary of Significant Accounting Policies (Textual) | |||
Estimated useful life of the assets | 7 years | ||
Machinery and Equipment [Member] | Minimum [Member] | |||
The Company and Summary of Significant Accounting Policies (Textual) | |||
Estimated useful life of the assets | 3 years | ||
Furniture and Fixtures [Member] | Maximum [Member] | |||
The Company and Summary of Significant Accounting Policies (Textual) | |||
Estimated useful life of the assets | 10 years | ||
Furniture and Fixtures [Member] | Minimum [Member] | |||
The Company and Summary of Significant Accounting Policies (Textual) | |||
Estimated useful life of the assets | 5 years | ||
License Deposits [Member] | |||
The Company and Summary of Significant Accounting Policies (Textual) | |||
License deposit | $ 300,000 | ||
Term of license deposit | Straight-line basis over the approximate remaining life through 2027 of the last CSRV® technology patent in force | ||
George J. Coates [Member] | |||
The Company and Summary of Significant Accounting Policies (Textual) | |||
Deferred Compensation | $ 10,000 |
Licensing Agreement and Defer45
Licensing Agreement and Deferred Licensing Costs (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Licensing Agreement and Deferred Licensing Costs (Textual) | ||
Accumulated amortization | $ 34,000 | $ 38,000 |
Amortization expense | $ 4,000 | $ 4,000 |
Agreement Assigned to Almont 46
Agreement Assigned to Almont Energy, Inc. (Details) | Dec. 31, 2017USD ($) |
Agreement Assigned to Almont Energy, Inc. [Abstract] | |
2,018 | $ 19,000 |
2,019 | 19,000 |
2,020 | 19,000 |
2,021 | 19,000 |
Thereafter | 94,000 |
Amortization amount | $ 170,000 |
Agreement Assigned to Almont 47
Agreement Assigned to Almont Energy, Inc. (Details Textual) | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Agreement Assigned to Almont Energy, Inc. (Textual) | |
Unamortized balance | $ 170,000 |
Canadian License [Member] | |
Agreement Assigned to Almont Energy, Inc. (Textual) | |
Amount of non-refundable deposit received in prior years | $ 300,000 |
Non-Exclusive Distribution Su48
Non-Exclusive Distribution Sublicense with Renown Power Development, Ltd. (Details) - USD ($) | 1 Months Ended | |
Feb. 28, 2015 | Dec. 31, 2017 | |
Renown Power Development, Ltd. [Member] | ||
Non-Exclusive Distribution Sublicense with Renown Power Development, Ltd. (Textual) | ||
Amount of non-refundable deposit received in prior years | $ 500,000 | |
Coates Power [Member] | ||
Non-Exclusive Distribution Sublicense with Renown Power Development, Ltd. (Textual) | ||
Deposit on order for two completed gen sets received in prior years | $ 131,000 |
Inventory (Details)
Inventory (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Summary of inventory | ||
Raw materials | $ 104,000 | $ 178,000 |
Work-in-process | 13,000 | |
Total | $ 104,000 | $ 191,000 |
License Deposits (Details)
License Deposits (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
License Deposits (Textual) | ||
Sublicensing fee revenue | $ 10,000 | |
License Deposits [Member] | ||
License Deposits (Textual) | ||
Original amount of license deposit from Renown received in prior years | $ 498,000 | |
Original amount of license deposit from Almont received in prior years | $ 300,000 | |
Period used for amortization of license deposits | Straight-line basis over the remaining period until expiration of the last remaining CSRV® patent in force in 2027. | |
Aggregate of all revenue recognized related to license deposit from Almont since received | $ 130,000 | |
Sublicensing fee revenue | $ 19,000 | $ 29,000 |
Property, Plant and Equipment51
Property, Plant and Equipment (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Summary of Property, plant and equipment | ||
Property, plant and equipment, Gross | $ 3,028,000 | $ 3,028,000 |
Less: Accumulated depreciation | (996,000) | (952,000) |
Total | 2,032,000 | 2,076,000 |
Land [Member] | ||
Summary of Property, plant and equipment | ||
Property, plant and equipment, Gross | 1,235,000 | 1,235,000 |
Building [Member] | ||
Summary of Property, plant and equipment | ||
Property, plant and equipment, Gross | 964,000 | 964,000 |
Building improvements [Member] | ||
Summary of Property, plant and equipment | ||
Property, plant and equipment, Gross | 83,000 | 83,000 |
Machinery and equipment [Member] | ||
Summary of Property, plant and equipment | ||
Property, plant and equipment, Gross | 689,000 | 689,000 |
Furniture and fixtures [Member] | ||
Summary of Property, plant and equipment | ||
Property, plant and equipment, Gross | $ 57,000 | $ 57,000 |
Property, Plant and Equipment52
Property, Plant and Equipment (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment (Textual) | ||
Depreciation expense | $ 45,000 | $ 44,000 |
Mortgage Loan Payable (Details)
Mortgage Loan Payable (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Mortgage Loan Payable (Textual) | ||
Maturity date | Jul. 31, 2018 | |
Mortgage loan payable, interest rate | 7.50% | |
Interest expense | $ 99,000 | $ 95,000 |
Mortgage loan payment terms | Monthly payments of interest, plus $5,000 which is being applied to the principal balance. | |
Monthly payment of principal | $ 5,000 | |
Principal balance of mortgage loan due | $ 1,273,000 | $ 1,333,000 |
Shares of common stock owned by George J. Coates pledged as collateral | 25,000 |
Accounts Payable and Accrued 54
Accounts Payable and Accrued Liabilities (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Summary of accounts payable and accrued liabilities | ||
Legal and professional fees | $ 1,427,000 | $ 1,452,000 |
Accrued interest expense | 582,000 | 502,000 |
General and administrative expenses | 420,000 | 392,000 |
Research and development costs | 115,000 | 115,000 |
Total | $ 2,544,000 | $ 2,461,000 |
Promissory Notes to Related P55
Promissory Notes to Related Parties (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Promissory Notes to Related Parties (Textual) | ||
Promissory note interest rate | 17.00% | |
George J. Coates [Member] | ||
Promissory Notes to Related Parties (Textual) | ||
Cash proceeds from related party promissory notes | $ 50,000 | $ 177,000 |
Repaid promissory notes principal amount | $ 33,000 | 30,000 |
Promissory note interest rate | 17.00% | |
Accrued interest included in amount of promissory notes to related parties converted into shares of common stock rescission | 315,000 | |
Principal amount outstanding | $ 20,000 | |
Interest paid during the year | 48,000 | $ 63,000 |
Unpaid balance of accrued interest on promissory notes | 318,000 | |
George J. Coates [Member] | Maximum [Member] | ||
Promissory Notes to Related Parties (Textual) | ||
Exercise prices | $ 0.0011 | |
George J. Coates [Member] | Minimum [Member] | ||
Promissory Notes to Related Parties (Textual) | ||
Exercise prices | $ 0.0006 | |
Gregory G. Coates [Member] | ||
Promissory Notes to Related Parties (Textual) | ||
Repaid promissory notes principal amount | 20,000 | |
Promissory notes interest expense | $ 143,000 | $ 144,000 |
Imputed interest rate on promissory note | 10.00% | |
Outstanding principal balance | $ 1,418,000 | |
Bernadette Coates [Member] | ||
Promissory Notes to Related Parties (Textual) | ||
Cash proceeds from related party promissory notes | 52,000 | 0 |
Repaid promissory notes principal amount | $ 31,000 | 0 |
Promissory note interest rate | 17.00% | |
Outstanding principal balance | $ 29,000 | |
Unpaid balance of accrued interest on promissory notes | 95,000 | |
Mr. Coates [Member] | ||
Promissory Notes to Related Parties (Textual) | ||
Amount of principal and interest on convertible notes converted to common stock before rescision | 472,000 | |
Aggregate principal amount of promissory notes converted into shares of common stock | 159,000 | |
Employee [Member] | ||
Promissory Notes to Related Parties (Textual) | ||
Cash proceeds from related party promissory notes | $ 5,000 | |
Promissory note interest rate | 17.00% | |
Promissory Note [Member] | ||
Promissory Notes to Related Parties (Textual) | ||
Aggregate amount of interest expense on all promissory notes to related parties | $ 223,000 | $ 293,000 |
Convertible Promissory Notes 56
Convertible Promissory Notes and Embedded Derivative Liability (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Financial assets and liabilities measured at fair value | ||
Total | $ 359,000 | $ 153,000 |
Level 1 Inputs [Member] | ||
Financial assets and liabilities measured at fair value | ||
Total | ||
Level 2 Inputs [Member] | ||
Financial assets and liabilities measured at fair value | ||
Total | 359,000 | 153,000 |
Level 3 Inputs [Member] | ||
Financial assets and liabilities measured at fair value | ||
Total |
Convertible Promissory Notes 57
Convertible Promissory Notes and Embedded Derivative Liability (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Convertible Promissory Notes and Embedded Derivative Liability (Textual) | ||
Principal balance of convertible notes issued | $ 186,000 | |
Principal amount of debt, including accrued interest converted into shares of common stock | $ 767,000 | $ 715,000 |
Common shares issued upon conversion of convertible notes | 21,879,384 | 6,745,724 |
Volatility rate | 200.00% | |
Convertible promissory notes [Member] | ||
Convertible Promissory Notes and Embedded Derivative Liability (Textual) | ||
Principal balance of convertible notes issued | $ 867,000 | $ 190,000 |
Conversion price, description for convertible note payable | The notes may be converted into unregistered shares of the Company's common stock at discounts ranging from 30% to 38% of the defined trading price of the common stock on the date of conversion. The defined trading prices are based on the trading price of the stock during a defined trading period ranging from 10 to 25 trading days immediately preceding the date of conversion. | |
Principal amount of debt, including accrued interest converted into shares of common stock | $ 767,000 | 715,000 |
Loss on conversion of convertible notes | $ 264,000 | $ 143,000 |
Common shares issued upon conversion of convertible notes | 21,879,033 | 6,745,724 |
Prepayment option, description | The convertible notes become convertible, in whole, or in part, beginning on the six-month anniversary of the issuance date and may be prepaid at the option of the Company, generally with a prepayment penalty ranging from 25% to 50% of the principal amount of the convertible note at any time prior to becoming eligible for conversion. | |
Common stock reserved for conversion of convertible notes | 46,037,325 | |
Additional unregistered shares of common stock issued due to stock price decline within 23 days after conversion | 1,063,351 | 315,716 |
Loss amount related to the additional unregistered shares of common stock issued due to stock price decline within 23 days after conversion | $ 43,000 | $ 37,000 |
Convertible promissory notes [Member] | Maximum [Member] | ||
Convertible Promissory Notes and Embedded Derivative Liability (Textual) | ||
Conversion price discount from defined trading price | 38.00% | |
Convertible promissory notes [Member] | Minimum [Member] | ||
Convertible Promissory Notes and Embedded Derivative Liability (Textual) | ||
Conversion price discount from defined trading price | 30.00% |
Capital Stock (Details)
Capital Stock (Details) | 12 Months Ended |
Dec. 31, 2017shares | |
George J. Coates [Member] | |
Number of shares of stock becoming eligible for conversion to shares of common stock by year [Line Items] | |
Total | 211,105 |
George J. Coates [Member] | 2018 [Member] | |
Number of shares of stock becoming eligible for conversion to shares of common stock by year [Line Items] | |
Total | 74,506 |
George J. Coates [Member] | 2019 [Member] | |
Number of shares of stock becoming eligible for conversion to shares of common stock by year [Line Items] | |
Total | 136,599 |
Gregory G. Coates [Member] | |
Number of shares of stock becoming eligible for conversion to shares of common stock by year [Line Items] | |
Total | 16,130 |
Gregory G. Coates [Member] | 2018 [Member] | |
Number of shares of stock becoming eligible for conversion to shares of common stock by year [Line Items] | |
Total | 5,484 |
Gregory G. Coates [Member] | 2019 [Member] | |
Number of shares of stock becoming eligible for conversion to shares of common stock by year [Line Items] | |
Total | 10,646 |
Barry C. Kaye [Member] | |
Number of shares of stock becoming eligible for conversion to shares of common stock by year [Line Items] | |
Total | 1,236 |
Barry C. Kaye [Member] | 2018 [Member] | |
Number of shares of stock becoming eligible for conversion to shares of common stock by year [Line Items] | |
Total | 413 |
Barry C. Kaye [Member] | 2019 [Member] | |
Number of shares of stock becoming eligible for conversion to shares of common stock by year [Line Items] | |
Total | 823 |
Capital Stock (Details Textual)
Capital Stock (Details Textual) - USD ($) | 1 Months Ended | 12 Months Ended | ||
May 31, 2017 | Feb. 28, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Capital Stock (Textual) | ||||
Common stock, authorized shares | 120,000,000 | 12,000,000,000 | ||
Common stock, par value | $ 0.0001 | $ 0.0001 | ||
Unregistered shares of common stock issued | 575,000 | |||
Unregistered shares of common stock and common stock warrants issued, value | $ 75,000 | |||
Number of common stock warrants issued | 575,000 | |||
Common stock shares, reserved for convertible instruments | 6,428,895 | |||
Preferred stock, authorized shares | 100,000,000 | 100,000,000 | ||
Preferred stock, par value | $ 0.001 | $ 0.001 | ||
Unregistered, restricted shares of common shares issued upon conversion of convertible promissory notes | 21,879,384 | 6,745,724 | ||
Principal amount of convertible debt, including accrued interest converted into shares of common stock | $ 767,000 | $ 715,000 | ||
Amount of promissory notes to related parties converted into shares of common stock | $ 156,843 | |||
Pro forma information for series B convertible preferred stock, description | Once the conversion restrictions lapse, an additional 228,471,000 new unregistered shares of common stock would be issued. On a pro forma basis, based on the number of shares of common stock outstanding at December 31, 2017, this would dilute the ownership percentage of non-affiliated stockholders from 91.8% to 12.8%. | |||
Minimum [Member] | ||||
Capital Stock (Textual) | ||||
Warrants to purchase common stock price per share | $ 0.10 | |||
Maximum [Member] | ||||
Capital Stock (Textual) | ||||
Warrants to purchase common stock price per share | $ 0.20 | |||
Series A Preferred Stock [Member] | ||||
Capital Stock (Textual) | ||||
Series A preferred stock, designated shares | 5,000 | 1,000,000 | ||
Series A convertible preferred stock, issued shares | 3,601 | 250 | ||
Series A Convertible preferred stock, outstanding shares | 3,601 | 250 | ||
Description of preferred stock voting rights | Shares of Series A entitle the holder to 10,000 votes per share on all matters brought before the shareholders for a vote. | Shares of Series A entitle the holder to 10,000 votes per share on all matters brought before the shareholders for a vote. | ||
Series B Preferred Stock [Member] | ||||
Capital Stock (Textual) | ||||
Preferred stock, par value | $ 0.001 | $ 0.001 | ||
Series B convertible preferred stock, designated shares | 345,000 | 75,000,000 | ||
Series B Convertible preferred stock, issued shares | 228,471 | 81,263 | ||
Series B Convertible preferred stock, outstanding shares | 228,471 | 81,263 | ||
Number shares of common stock into which each share of Series B Convertible Preferred Stock can be converted | 1,000 | 1,000 | ||
Description of preferred stock voting rights | Holders of the Series B are entitled to one thousand votes per share held on all matters brought before the shareholders for a vote. | Holders of the Series B are entitled to one thousand votes per share held on all matters brought before the shareholders for a vote. | ||
Percentage of non - affiliate shareholder ownership before assumed conversion | 91.80% | |||
Percentage of non - affiliate shareholder ownership after assumed conversion | 12.80% | |||
Convertible promissory note [Member] | ||||
Capital Stock (Textual) | ||||
Unregistered, restricted shares of common shares issued upon conversion of convertible promissory notes | 21,879,033 | 6,745,724 | ||
Principal amount of convertible debt, including accrued interest converted into shares of common stock | $ 767,000 | $ 715,000 | ||
Shares of common stock issued to lender as payment for interest | 44,443 | |||
Short term loan repaid | $ 25,000 | |||
Interest on short term loan | $ 4,000 | |||
George J. Coates [Member] | ||||
Capital Stock (Textual) | ||||
Series A Convertible preferred stock, outstanding shares | 2,500,000 | |||
Shares of series B stock outstanding that could be converted to common stock once all restrictions lapse | 211,105 | |||
Shares of Series B convertible preferred stock converted into common stock | 575.03 | |||
Shares issued upon conversion of promissory notes | 2,852,291 | |||
Conversion of promissory notes, including accrued interest to related parties into shares of common stock | $ 472,000 | |||
Accrued interest included in amount of promissory notes to related parties converted into shares of common stock, conversion of which was later rescinded | $ 315,000 | |||
George J. Coates [Member] | Minimum [Member] | ||||
Capital Stock (Textual) | ||||
Conversion price per share of promissory notes to related parties converted to common stock | $ 0.12 | |||
George J. Coates [Member] | Maximum [Member] | ||||
Capital Stock (Textual) | ||||
Conversion price per share of promissory notes to related parties converted to common stock | $ 0.22 | |||
George J. Coates [Member] | Series A Preferred Stock [Member] | ||||
Capital Stock (Textual) | ||||
Number of shares of Series A Preferred Stock granted | 3,351 | |||
Estimated fair value of Series A Preferred Stock Granted | $ 17,000 | |||
Percentage of eligible votes | 85.70% | |||
George J. Coates [Member] | Series B Preferred Stock [Member] | ||||
Capital Stock (Textual) | ||||
Series B stock, issued shares | 136,599 | 59,694 | ||
Fixed ownership percentage | 80.63% | |||
Estimated fair value of Series B convertible preferred stock granted | $ 5,204,000 | $ 6,386,000 | ||
Series B convertible preferred stock conversion basis | Each share of Series B Convertible Preferred Stock becomes convertible into 1,000 shares of common stock at any time after the second anniversary of the date of issuance. | |||
Shares of common stock issued upon conversion of shares of Series B Convertible preferred stock | 575,030 | |||
Gregory G. Coates [Member] | ||||
Capital Stock (Textual) | ||||
Shares of series B stock outstanding that could be converted to common stock once all restrictions lapse | 16,130 | |||
Gregory G. Coates [Member] | Series B Preferred Stock [Member] | ||||
Capital Stock (Textual) | ||||
Series B stock, issued shares | 10,646 | 4,360 | ||
Fixed ownership percentage | 6.10% | |||
Estimated fair value of Series B convertible preferred stock granted | $ 423,000 | $ 455,000 | ||
Series B convertible preferred stock conversion basis | Each share of Series B Convertible Preferred Stock becomes convertible into 1,000 shares of common stock at any time after the second anniversary of the date of issuance. | |||
Barry C. Kaye [Member] | ||||
Capital Stock (Textual) | ||||
Series B Convertible preferred stock, issued shares | 14.88 | |||
Series B stock, issued shares | 14.88 | |||
Series B convertible preferred stock conversion basis | Each share of Series B Convertible Preferred Stock becomes convertible into 1,000 shares of common stock at any time after the second anniversary of the date of issuance. | |||
Shares of common stock issued upon conversion of shares of Series B Convertible preferred stock | 6,860 | |||
Shares of series B stock outstanding that could be converted to common stock once all restrictions lapse | 1,236 | |||
Shares of Series B convertible preferred stock converted into common stock | 14.88 | |||
Barry C. Kaye [Member] | Series B Preferred Stock [Member] | ||||
Capital Stock (Textual) | ||||
Series B Convertible preferred stock, issued shares | 14,880 | |||
Series B stock, issued shares | 823 | 335 | ||
Fixed ownership percentage | 0.048% | |||
Estimated fair value of Series B convertible preferred stock granted | $ 27,000 | $ 35,000 | ||
Shares of common stock issued upon conversion of shares of Series B Convertible preferred stock | 6,860 | |||
Shares of Series B convertible preferred stock converted into common stock | 14,880 | |||
Southridge Partners II LP [Member] | ||||
Capital Stock (Textual) | ||||
Registered shares of common stock issued for sales under equity line of credit | 862,470 | |||
Registered shares of common stock sold, value | $ 199,000 | |||
Mr. Coates [Member] | ||||
Capital Stock (Textual) | ||||
Number of shares of common stock returned upon rescission of conversion of promissory notes to related parties | 1,795,699 | |||
Amount principal and interest on convertible notes converted to common stock before resxision | $ 472,000 | |||
Interest accrued, but not paid restored upon rescission | $ 315,000 | |||
Mr. Coates [Member] | Convertible promissory note [Member] | ||||
Capital Stock (Textual) | ||||
Shares of common stock issued upon conversion of shares of Series B Convertible preferred stock | 1,056,592 | |||
Principal amount of promissory notes converted to common stock | $ 157,000 |
Income (Loss) Per Share (Detail
Income (Loss) Per Share (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Income (Loss) Per Share (Textual) | ||
Warrants outstanding to purchase common stock | 751,725 | 751,725 |
Vested stock options outstanding | 62,350 | 62,350 |
Exercise prices, description | Stock warrants outstanding to purchase 751,725 shares of common stock at exercise prices ranging from $0.10 to $13.50 per share. | Stock warrants outstanding to purchase 751,725 shares of common stock at exercise prices ranging from $0.10 to $24.00 per share. |
Convertible promissory notes [Member] | ||
Income (Loss) Per Share (Textual) | ||
Convertible promissory notes outstanding, eligible for conversion | $ 186,000 | $ 99,000 |
Pro forma number of common shares issuable upon assumed conversion of promissory notes eligible for conversion | 17,275,869 | 1,596,774 |
Maximum [Member] | ||
Income (Loss) Per Share (Textual) | ||
Stock option exercise price | $ 88 | $ 24 |
Minimum [Member] | ||
Income (Loss) Per Share (Textual) | ||
Stock option exercise price | $ 5.60 | $ 0.10 |
Stock Options (Details)
Stock Options (Details) - Stock Option [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Stock options outstanding under stock option plan | ||
Number Outstanding, Beginning Balance | 62,350 | 62,350 |
Weighted Average Remaining Contractual Life, Beginning Balance | 10 years | 11 years |
Number Exercisable, Beginning Balance | 62,350 | 62,350 |
Weighted Average Exercise Price, Beginning Balance | $ 36.34 | $ 36.34 |
Weighted Average Fair Value Per Stock Option at Date of Grant, Beginning Balance | $ 33.84 | $ 33.84 |
Stock options vested, Number Outstanding | ||
Stock options vested, Number Exercisable | ||
Stock options expired, Number Outstanding | ||
Stock options expired, Number Exercisable | ||
Number Outstanding, Ending balance | 62,350 | 62,350 |
Weighted Average Remaining Contractual Life, Ending Balance | 9 years | 10 years |
Number Exercisable, Ending balance | 62,350 | 62,350 |
Weighted Average Exercise Price, Ending Balance | $ 36.34 | $ 36.34 |
Weighted Average Fair Value Per Stock Option at Date of Grant, Ending Balance | 33.84 | 33.84 |
Minimum [Member] | ||
Stock options outstanding under stock option plan | ||
Exercise Price Per Share, Beginning Balance | 5.60 | 5.60 |
Weighted Average Exercise Price, Ending balance | 5.60 | 5.60 |
Maximum [Member] | ||
Stock options outstanding under stock option plan | ||
Exercise Price Per Share, Beginning Balance | 88 | 88 |
Weighted Average Exercise Price, Ending balance | $ 88 | $ 88 |
Stock Options (Details 1)
Stock Options (Details 1) | 12 Months Ended | |
Dec. 31, 2017 | ||
Summary of assumptions used to determine weighted average fair value | ||
Historical stock price volatility, minimum | 139.00% | [1] |
Historical stock price volatility, maximum | 325.00% | [1] |
Risk-free interest rate, minimum | 0.21% | [2] |
Risk-free interest rate, maximum | 4.64% | [2] |
Expected life (in years) | 4 years | [3] |
Dividend yield | 0.00% | [4] |
[1] | Historical stock price volatility: The Company utilized the volatility in the trading of its common stock computed for the 12 months of trading immediately preceding the date of grant. | |
[2] | Risk-free interest rate: The Company bases the risk-free interest rate on the interest rate payable on U.S. Treasury securities in effect at the time of the grant for a period that is commensurate with the assumed expected option life. | |
[3] | Expected life: The expected life of the options represents the period of time options are expected to be outstanding. The Company has very limited historical data on which to base this estimate. Accordingly, the Company estimated the expected life based on its assumption that the executives will be subject to frequent blackout periods during the time that the stock options will be exercisable and based on the Company's expectation that it will complete its research and development phase and commence its initial production phase. The vesting period of these options was also considered in the determination of the expected life of each stock option grant. | |
[4] | No expected dividends. |
Stock Options (Details 2)
Stock Options (Details 2) | Dec. 31, 2017$ / sharesshares | |
George J. Coates [Member] | 10/23/2021 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Shares of Common Stock Underlying Stock Options | shares | 5,000 | [1] |
Exercise Price per Share | $ / shares | $ 88 | |
George J. Coates [Member] | 11/4/2024 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Shares of Common Stock Underlying Stock Options | shares | 250 | [1] |
Exercise Price per Share | $ / shares | $ 80 | |
George J. Coates [Member] | 11/17/2025 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Shares of Common Stock Underlying Stock Options | shares | 1,375 | [1] |
Exercise Price per Share | $ / shares | $ 80 | |
George J. Coates [Member] | 7/25/2026 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Shares of Common Stock Underlying Stock Options | shares | 9,000 | [1] |
Exercise Price per Share | $ / shares | $ 50 | |
George J. Coates [Member] | 6/24/2027 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Shares of Common Stock Underlying Stock Options | shares | 9,075 | [1] |
Exercise Price per Share | $ / shares | $ 12 | |
Gregory G. Coates [Member] | 10/23/2021 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Shares of Common Stock Underlying Stock Options | shares | 2,500 | [1] |
Exercise Price per Share | $ / shares | $ 88 | |
Gregory G. Coates [Member] | 8/8/2026 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Shares of Common Stock Underlying Stock Options | shares | 9,000 | [1] |
Exercise Price per Share | $ / shares | $ 48 | |
Gregory G. Coates [Member] | 4/30/2029 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Shares of Common Stock Underlying Stock Options | shares | 1,757 | [1] |
Exercise Price per Share | $ / shares | $ 5.60 | |
Barry C. Kaye [Member] | 10/18/2021 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Shares of Common Stock Underlying Stock Options | shares | 625 | [1] |
Exercise Price per Share | $ / shares | $ 88 | |
Barry C. Kaye [Member] | 2/11/2028 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Shares of Common Stock Underlying Stock Options | shares | 500 | [1] |
Exercise Price per Share | $ / shares | $ 8.40 | |
Barry C. Kaye [Member] | 4/30/2029 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Shares of Common Stock Underlying Stock Options | shares | 1,758 | [1] |
Exercise Price per Share | $ / shares | $ 5.60 | |
Dr. Frank J. Adipietro [Member] | 3/28/2022 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Shares of Common Stock Underlying Stock Options | shares | 125 | [1] |
Exercise Price per Share | $ / shares | $ 88 | |
Dr. Frank J. Adipietro [Member] | 11/3/2024 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Shares of Common Stock Underlying Stock Options | shares | 250 | [1] |
Exercise Price per Share | $ / shares | $ 80 | |
Dr. Frank J. Adipietro [Member] | 11/17/2025 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Shares of Common Stock Underlying Stock Options | shares | 425 | [1] |
Exercise Price per Share | $ / shares | $ 80 | |
Dr. Frank J. Adipietro [Member] | 6/24/2027 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Shares of Common Stock Underlying Stock Options | shares | 3,335 | [1] |
Exercise Price per Share | $ / shares | $ 12 | |
Dr. Richard W. Evans [Member] | 3/28/2022 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Shares of Common Stock Underlying Stock Options | shares | 125 | [1] |
Exercise Price per Share | $ / shares | $ 88 | |
Dr. Richard W. Evans [Member] | 12/27/2024 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Shares of Common Stock Underlying Stock Options | shares | 250 | [1] |
Exercise Price per Share | $ / shares | $ 78 | |
Dr. Richard W. Evans [Member] | 2/15/2026 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Shares of Common Stock Underlying Stock Options | shares | 1,000 | [1] |
Exercise Price per Share | $ / shares | $ 50 | |
Dr. Richard W. Evans [Member] | 6/20/2027 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Shares of Common Stock Underlying Stock Options | shares | 15,625 | [1] |
Exercise Price per Share | $ / shares | $ 12 | |
Dr. Michael J. Suchar [Member] | 3/28/2022 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Shares of Common Stock Underlying Stock Options | shares | 125 | [1] |
Exercise Price per Share | $ / shares | $ 88 | |
Richard Whitworth [Member] | 3/28/2022 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Shares of Common Stock Underlying Stock Options | shares | 125 | [1] |
Exercise Price per Share | $ / shares | $ 88 | |
William Wolf. Esq. [Member] | 4/4/2022 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Shares of Common Stock Underlying Stock Options | shares | 125 | [1] |
Exercise Price per Share | $ / shares | $ 88 | |
[1] | All outstanding stock options are fully vested. |
Stock Options (Details Textual)
Stock Options (Details Textual) | 12 Months Ended |
Dec. 31, 2017shares | |
Stock Options (Textual) | |
Historical stock price volatility, description | The Company utilized the volatility in the trading of its common stock computed for the 12 months of trading immediately preceding the date of grant. |
2006 Stock Option and Incentive Plan [Member] | |
Stock Options (Textual) | |
Common stock available for stock options or awards under the stock plan | 62,500 |
Maximum percentage of shares issuable in one year to one employee | 25.00% |
Maximum number of shares of common stock authorized for issue under plan | 62,500 |
2014 Stock Option and Incentive Plan [Member] | |
Stock Options (Textual) | |
Common stock available for stock options or awards under the stock plan | 250,000 |
Maximum percentage of shares issuable in one year to one employee | 25.00% |
Maximum number of shares of common stock authorized for issue under plan | 250,000 |
Equity Purchase and Registrat65
Equity Purchase and Registration Rights Agreements (Details) - USD ($) | Aug. 05, 2015 | Jan. 31, 2017 | Dec. 31, 2016 | Jul. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 |
Equity Purchase Agreement [Member] | ||||||
Equity Purchase and Registration Rights Agreements (Textual) | ||||||
Number of shares of common stock registered | 1,025,000 | |||||
Southridge Partners II LP [Member] | ||||||
Equity Purchase and Registration Rights Agreements (Textual) | ||||||
Proceeds from issuance of common stock under equity line of credit | $ 199,000 | |||||
Southridge Partners II LP [Member] | Equity Purchase Agreement [Member] | ||||||
Equity Purchase and Registration Rights Agreements (Textual) | ||||||
2015 equity purchase agreement, description | Pursuant to the terms of the EP Agreement, Southridge committed to purchase up to 1,025,000 shares of the Company's common stock. In December 2016, the EP Agreement automatically terminated because Southridge had purchased all 1,025,000 registered shares of common stock under the EP Agreement. | |||||
Number of shares of common stock registered | 1,025,000 | |||||
Registered shares of common stock sold, shares | 380,707 | 862,470 | ||||
Proceeds from issuance of common stock under equity line of credit | $ 43,000 | $ 156,000 | ||||
EP Agreements,description | The purchase price for the shares of common stock shall be equal to 94% of the lowest closing price of the common stock during the ten trading days that comprise the defined pricing period. The Company was entitled to exercise a Put to Southridge by delivering a Put Notice, which required Southridge to remit the dollar amount stated in the Put Notice at the end of the pricing period, provided, however, that for each day during the pricing period, if any, that the daily closing price of the Company's common stock was below the Floor Price, if any, stipulated in the Put Notice issued by the Company, then the dollar amount of the Put would be reduced by 10% for each such day. |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Income Taxes [Abstract] | ||
Current deferred tax asset - inventory reserve | $ 137,000 | $ 195,000 |
Non-Current Deferred Tax Assets: | ||
Stock-based compensation expense | 8,639,000 | 10,022,000 |
Net operating loss carryforwards | 5,091,000 | 7,558,000 |
Deferred compensation not paid within 2.5 months | 363,000 | 509,000 |
Accrued liabilities not paid | 313,000 | 466,000 |
Accrued interest on notes to related parties | 163,000 | 199,000 |
Total long-term deferred tax assets | 14,569,000 | 18,784,000 |
Total deferred tax assets | 14,706,000 | 18,979,000 |
Less: valuation allowance | (14,706,000) | (18,979,000) |
Net deferred tax assets |
Income Taxes (Details 1)
Income Taxes (Details 1) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Schedule of differences in Income tax (benefit) provision | ||
Federal tax provision at the statutory rate | 21.00% | 34.00% |
State income tax benefit, net of federal benefit | (0.80%) | (0.90%) |
Stock-based compensation expense | (19.00%) | (29.70%) |
Deferred compensation not paid within 2.5 months | (1.20%) | 0.60% |
Accrued interest not deductible for tax return purposes | (3.30%) | (3.40%) |
Net change in net operating loss carryforwards | 29.80% | (7.20%) |
Loss on conversion of convertible notes | (0.90%) | (1.10%) |
Increase in estimated fair value of embedded derivative liabilities | (0.70%) | (0.60%) |
Accrued liabilities not deductible for tax return purposes | 0.20% | (0.10%) |
Total | 25.10% | (8.40%) |
Valuation allowance | (25.10%) | 8.40% |
Effective tax rate | 0.00% | 0.00% |
Income Taxes (Details Textual)
Income Taxes (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Income Taxes (Textual) | ||
Increased in deferred tax assets | $ 3,340,000 | |
Decreased in deferred tax assets | $ (4,273,000) | |
Open income tax years, Description | 2013 through 2016. | |
Partially offset by increase in deferred tax assets | $ 1,609,000 | |
Maximum [Member] | ||
Income Taxes (Textual) | ||
Corporate income tax reduction, percentage | 34.00% | |
Minimum [Member] | ||
Income Taxes (Textual) | ||
Corporate income tax reduction, percentage | 21.00% | |
Federal [Member] | ||
Income Taxes (Textual) | ||
Operating loss carryforwards | $ 20,717,000 | |
Operating loss carryforwards expiration date, description | Expiring between 2018 and 2037. | |
State [Member] | ||
Income Taxes (Textual) | ||
Operating loss carryforwards | $ 10,294,000 | |
Operating loss carryforwards expiration date, description | Expiring between 2029 and 2037. |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | ||
George J. Coates [Member] | |||
Summary of approximate amount of base compensation and benefits | |||
Base compensation and benefits paid | [1],[2] | $ 26,000 | $ 16,000 |
Gregory G. Coates [Member] | |||
Summary of approximate amount of base compensation and benefits | |||
Base compensation and benefits paid | [3],[4],[5] | 58,000 | 139,000 |
Bernadette Coates [Member] | |||
Summary of approximate amount of base compensation and benefits | |||
Base compensation and benefits paid | [6] | $ 0 | $ 5,000 |
[1] | During the year ended December 31, 2017, the Company issued 3,351 shares of Series A Preferred Stock with an estimated fair value of $17,000 to George J. Coates representing anti-dilution shares to restore Mr. Coates' percentage of eligible votes to 85.7%. | ||
[2] | For the years ended December 31, 2017 and 2016, George J. Coates earned additional base compensation of $240,000 and $250,000, respectively, payment of which is being deferred until the Company has sufficient working capital. At December 31, 2017 and 2016, the total amount of deferred compensation was $1,221,000 and $981,000, respectively. These amounts are included in deferred compensation in the accompanying balance sheets at December 31, 2017 and 2016. | ||
[3] | During the year ended December 31, 2017 and 2016, George J. Coates was awarded 136,599 and 59,694 shares of Series B Convertible Preferred Stock, respectively, with an estimated fair value of $5,204,000 and $6,386,000, respectively, for anti-dilution. Each share of Series B Convertible Preferred Stock becomes convertible into 1,000 shares of common stock at any time after the second anniversary of the date of issuance. | ||
[4] | During the years ended December 31, 2017 and 2016, Gregory G. Coates was awarded 10,646 and 4,360 shares of Series B Convertible Preferred Stock with an estimated fair value of $423,000 and $455,000, respectively, for anti-dilution. Each share of Series B Convertible Preferred Stock becomes convertible into 1,000 shares of common stock at any time after the second anniversary of the date of issuance. | ||
[5] | For the years ended December 31, 2017 and 2016, Gregory G. Coates earned additional base compensation of $110,000 and $33,000, respectively, payment of which is being deferred until the Company has sufficient working capital. At December 31, 2017 and 2016, the total amount of deferred compensation was $143,000 and $33,000, respectively. These amounts are included in deferred compensation in the accompanying balance sheets at December 31, 2017 and 2016. | ||
[6] | For the year ended December 31, 2016, Bernadette Coates, who retired at the end of third quarter of 2016, earned additional base compensation of $50,000, respectively, payment of which is being deferred until the Company has sufficient working capital. At December 31, 2017 and 2016, the total amount of deferred compensation was $242,000. These amounts are included in deferred compensation in the accompanying balance sheets at December 31, 2017 and 2016. |
Related Party Transactions (D70
Related Party Transactions (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Related Party Transactions (Textual) | ||
Accrued, unpaid interest | $ 414,000 | |
Series A Preferred Stock [Member] | ||
Related Party Transactions (Textual) | ||
Series A convertible preferred stock, outstanding shares | 3,601 | 250 |
Series B Stock [Member] | ||
Related Party Transactions (Textual) | ||
Issuance of anti-dilution shares of series B stock to related parties, shares | 147,216 | 64,389 |
George J. Coates [Member] | ||
Related Party Transactions (Textual) | ||
Balance of deferred compensation outstanding | $ 1,221,000 | $ 981,000 |
Amount of compensation deferred during the year | 240,000 | 250,000 |
Patent maintenance costs related to licensing of intellectual proeprty | $ 32,000 | $ 39,000 |
Promissory note interest rate | 17.00% | |
George J. Coates [Member] | Series A Preferred Stock [Member] | ||
Related Party Transactions (Textual) | ||
Shares of series A preferred stock issued | 3,351 | |
Fair value of series A preferred stock issued | $ 17,000 | |
Percentage of eligible votes | 85.70% | |
George J. Coates [Member] | Series B Stock [Member] | ||
Related Party Transactions (Textual) | ||
Preferred stock, conversion basis | Each share of Series B Convertible Preferred Stock becomes convertible into 1,000 shares of common stock at any time after the second anniversary of the date of issuance. | |
Issuance of anti-dilution shares of series B stock to related parties, shares | 136,599 | 59,694 |
Estimated fair value of Series B convertible preferred stock granted | $ 5,204,000 | $ 6,386,000 |
Shares of Series B stock converted to shares of common stock | 575.03 | |
Gregory G. Coates [Member] | ||
Related Party Transactions (Textual) | ||
Balance of deferred compensation outstanding | $ 143,000 | 33,000 |
Amount of compensation deferred during the year | 110,000 | 33,000 |
Patent maintenance costs related to licensing of intellectual proeprty | $ 32,000 | $ 39,000 |
Imputed interest rate on promissory note | 10.00% | |
Gregory G. Coates [Member] | Series B Stock [Member] | ||
Related Party Transactions (Textual) | ||
Preferred stock, conversion basis | Each share of Series B Convertible Preferred Stock becomes convertible into 1,000 shares of common stock at any time after the second anniversary of the date of issuance. | |
Issuance of anti-dilution shares of series B stock to related parties, shares | 10,646 | 4,360 |
Estimated fair value of Series B convertible preferred stock granted | $ 423,000 | $ 455,000 |
Bernadette Coates [Member] | ||
Related Party Transactions (Textual) | ||
Balance of deferred compensation outstanding | $ 242,000 | 242,000 |
Amount of compensation deferred during the year | 50,000 | |
Promissory note interest rate | 17.00% | |
Barry C. Kaye [Member] | ||
Related Party Transactions (Textual) | ||
Amount of compensation paid | $ 63,000 | 6,000 |
Preferred stock, conversion basis | Each share of Series B Convertible Preferred Stock becomes convertible into 1,000 shares of common stock at any time after the second anniversary of the date of issuance. | |
Compensation earned by Barry C. Kaye | $ 113,000 | $ 102,000 |
Interest accrued on unpaid deferred compensation | 60,000 | |
Total balance of deferred compensation and accrued interest | $ 105,000 | |
Interest rate on unpaid deferred compensation | 17.00% | |
Barry C. Kaye [Member] | Series B Stock [Member] | ||
Related Party Transactions (Textual) | ||
Issuance of anti-dilution shares of series B stock to related parties, shares | 823 | 335 |
Total balance of deferred compensation and accrued interest | $ 418,000 | |
Estimated fair value of Series B convertible preferred stock granted | 27,000 | $ 35,000 |
Employee [Member] | ||
Related Party Transactions (Textual) | ||
Amount of deferred compensation | $ 16,000 | |
Promissory note interest rate | 17.00% | |
Accrued, unpaid interest | $ 1,000 |
Contractual Obligations and C71
Contractual Obligations and Commitments (Details) | Dec. 31, 2017USD ($) |
Summary of contractual obligations and commitments | |
Total | $ 4,553,333 |
Deferred compensation [Member] | |
Summary of contractual obligations and commitments | |
Total | 1,621,322 |
Promissory notes to related parties [Member] | |
Summary of contractual obligations and commitments | |
Total | 1,472,409 |
Mortgage loan payable [Member] | |
Summary of contractual obligations and commitments | |
Total | 1,273,158 |
Convertible promissory notes [Member] | |
Summary of contractual obligations and commitments | |
Total | $ 186,444 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | Apr. 06, 2018 | Apr. 02, 2018 | Mar. 19, 2018 | Apr. 13, 2018 | Dec. 31, 2017 |
Subsequent Event [Line Items] | |||||
Promissory note interest rate | 17.00% | ||||
George J. Coates [Member] | |||||
Subsequent Event [Line Items] | |||||
Promissory note interest rate | 17.00% | ||||
Bernadette Coates [Member] | |||||
Subsequent Event [Line Items] | |||||
Promissory note interest rate | 17.00% | ||||
Subsequent Events [Member] | |||||
Subsequent Event [Line Items] | |||||
Certificate of Validation, description | On April 2, 2018, the Company filed a certificate of validation with the state of Delaware, (i) cure certain technical, procedural defects related to the 1:200 reverse stock split, which became effective at the close of trading on December 31, 2017, (ii) clarify that the reverse stock split effected a 1:200 reduction in the number of the Corporation’s authorized shares of common stock, from 12,000,000,000 to 60,000,000, with retroactive effect to the close of trading on December 1, 2017, (iii) clarify that the reverse stock split effected 1:200 reduction in the number of authorized shares of the Corporation’s preferred stock, from 100,000,000 to 500,000 with retroactive effect to the close of trading on December 1, 2017; and, (iv) concurrently therewith, further amend the Corporation’s Amended Certificate of Articles of Incorporation with the State of Delaware to increase the number of the Corporation’s authorized shares of common stock, par value $0.0001 from 60,000,000 to 120,000,000 and reduce the number of authorized shares of the Corporation’s preferred stock, par value $0.001 from 500,000 to 350,000. | ||||
Value of the shares of common stock to be issued to LAM in total settlement of the Company accounts payables | $ 69,000 | ||||
Value of settlement agreed to be paid for by issuance of common stock to LAM | $ 69,000 | ||||
Subsequent Events [Member] | Barry C. Kaye [Member] | Deferred compensation [Member] | |||||
Subsequent Event [Line Items] | |||||
Total deferred compensation paid | $ 257,000 | ||||
Subsequent Events [Member] | Barry C. Kaye [Member] | |||||
Subsequent Event [Line Items] | |||||
Total deferred compensation paid | 35,000 | ||||
Subsequent Events [Member] | Convertible Promissory Note [Member] | |||||
Subsequent Event [Line Items] | |||||
Total amount of convertible notes issued | $ 265,000 | ||||
Conversion price, description | The Company's common stock at a conversion price ranging from 62% to 70% of the trading price, as defined, of the Company's common stock over a specified trading period prior to the date of conversion. | ||||
Unregistered shares of common stock issued upon conversion | 9,715,685 | ||||
Total amount of convertible notes converted to common stock | $ 90,000 | ||||
Subsequent Events [Member] | Promissory Note [Member] | |||||
Subsequent Event [Line Items] | |||||
Promissory note interest rate | 17.00% | ||||
Subsequent Events [Member] | Promissory Note [Member] | George J. Coates [Member] | |||||
Subsequent Event [Line Items] | |||||
Repayment of promissory note | $ 20,000 | ||||
Total deferred compensation paid | 1,293,000 | ||||
Additional deferred compensation | 72,000 | ||||
Subsequent Events [Member] | Promissory Note [Member] | Gregory G. Coates [Member] | |||||
Subsequent Event [Line Items] | |||||
Repayment of promissory note | 15,000 | ||||
Total deferred compensation paid | 164,000 | ||||
Additional deferred compensation | 22,000 | ||||
Subsequent Events [Member] | Promissory Note [Member] | Bernadette Coates [Member] | |||||
Subsequent Event [Line Items] | |||||
Repayment of promissory note | 15,000 | ||||
Subsequent Events [Member] | Promissory Note [Member] | One employee [Member] | |||||
Subsequent Event [Line Items] | |||||
Repayment of promissory note | $ 5,000 | ||||
Series B Convertible Preferred Stock [Member] | Subsequent Events [Member] | George J. Coates [Member] | |||||
Subsequent Event [Line Items] | |||||
Shares of series B stock issued | 48,915 | ||||
Fair value of series B stock issued | $ 545,000 | ||||
Series B Convertible Preferred Stock [Member] | Subsequent Events [Member] | Gregory G. Coates [Member] | |||||
Subsequent Event [Line Items] | |||||
Shares of series B stock issued | 3,702 | ||||
Fair value of series B stock issued | $ 41,000 | ||||
Series B Convertible Preferred Stock [Member] | Subsequent Events [Member] | Barry C. Kaye [Member] | |||||
Subsequent Event [Line Items] | |||||
Shares of series B stock issued | 290 | ||||
Fair value of series B stock issued | $ 3,000 | ||||
Lam Settlement Shares [Member] | Subsequent Events [Member] | |||||
Subsequent Event [Line Items] | |||||
Maximum percentage of common stock of the Company permitted to be held by LAM at any one time | 9.99% | ||||
Value of the shares of common stock to be issued to LAM in total settlement of the Company accounts payables | $ 99,000 | ||||
Value of shares of common stock issue to LAM in exchange for the first tranche of the settlement | $ 40,000 | ||||
Shares of common stock issued to LAM | 4,480,000 |