Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2021 | Nov. 15, 2021 | |
Cover [Abstract] | ||
Entity Registrant Name | DAIS CORPORATION | |
Entity Central Index Key | 0001125699 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Entity Current Reporting Status | Yes | |
Document Period End Date | Sep. 30, 2021 | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2021 | |
Entity Common Stock Shares Outstanding | 9,415,425 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Interactive Data Current | Yes | |
Entity File Number | 000-53554 | |
Entity Incorporation State Country Code | NY | |
Entity Tax Identification Number | 14-1760865 | |
Entity Address Address Line 1 | 11552 Prosperous Drive | |
Entity Address City Or Town | Odessa | |
Entity Address State Or Province | FL | |
Entity Address Postal Zip Code | 33556 | |
City Area Code | 727 | |
Local Phone Number | 375-8484 |
CONDENSED BALANCE SHEETS
CONDENSED BALANCE SHEETS - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 133,584 | $ 36,516 |
Accounts receivable, net | 62,768 | 502 |
Other receivables | 0 | 6,169 |
Inventory | 92,917 | 65,656 |
Prepaid expenses | 69,691 | 30,670 |
Total Current Assets | 358,960 | 139,513 |
Property and equipment, net | 14,320 | 4,501 |
OTHER ASSETS: | ||
Deposits | 4,780 | 4,780 |
Patents, net | 153,124 | 153,592 |
Total Other Assets | 157,904 | 158,372 |
TOTAL ASSETS | 531,184 | 302,386 |
CURRENT LIABILITIES: | ||
Accounts payable, including related party payables of $313,808 and $305,081 at September 30, 2021 and December 31, 2020, respectively | 1,071,545 | 984,485 |
Accrued expenses, other, including interest due to related party of $877,141 and $679,239 at September 30, 2021 and December 31, 2020, respectively | 1,299,866 | 1,515,740 |
Accrued compensation and related benefits | 2,191,190 | 2,120,951 |
Customer deposits | 56,440 | 43,109 |
Notes payable to related parties | 2,174,897 | 2,125,600 |
Current portion of deferred revenue | 311,156 | 348,656 |
Derivative liabilities | 0 | 3,845,662 |
Note payable - due within one year, net of unamortized discount and debt costs of $95,154 and $0, respectively | 410,846 | 26,200 |
Convertible notes payable, net of unamortized discount and debt costs of $216,279 and $0, respectively | 3,721 | 1,453,960 |
Total Current Liabilities | 7,519,661 | 12,464,363 |
Notes payable - due after one year | 272,340 | 294,750 |
Total Liabilities | 7,792,001 | 12,759,113 |
STOCKHOLDERS' DEFICIT | ||
Preferred stock, undesignated; $0.01 par value; 7,990,000 shares authorized; no shares issued and outstanding | 0 | 0 |
Common stock; $0.01 par value; 1,100,000,000 shares authorized; 9,415,425 shares issued and 9,414,796 shares outstanding at September 30, 2021 and 278,757 shares issued and 278,128 shares outstanding at December 31, 2020, respectively | 94,154 | 2,788 |
Capital in excess of par value | 49,523,885 | 45,976,660 |
Accumulated deficit | (55,416,744) | (56,974,063) |
Total Stockholders Defict Non controling | (5,798,705) | (10,994,615) |
Treasury stock at cost, 629 shares at September 30, 2021 and December 31, 2020, respectively | (1,462,112) | (1,462,112) |
Total Stockholders' Deficit | (7,260,817) | (12,456,727) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | 531,184 | 302,386 |
Preferred Stock Series A [Member] | ||
STOCKHOLDERS' DEFICIT | ||
Preferred stock, undesignated; $0.01 par value; 7,990,000 shares authorized; no shares issued and outstanding | 0 | 0 |
Preferred Stock, Series B [Member] | ||
STOCKHOLDERS' DEFICIT | ||
Preferred stock, undesignated; $0.01 par value; 7,990,000 shares authorized; no shares issued and outstanding | $ 0 | $ 0 |
CONDENSED BALANCE SHEETS (Paren
CONDENSED BALANCE SHEETS (Parenthetical) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Common stock, shares par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 1,100,000,000 | 1,100,000,000 |
Common stock, shares issued | 9,415,425 | 278,757 |
Common stock, shares outstanding | 9,414,796 | 278,128 |
Treasury stock shares | 629 | 629 |
Related party payables included in accounts payable | $ 313,808 | $ 305,081 |
Note payable - due within one year, net of unamortized discount and debt costs | 95,154 | 0 |
Convertible notes payable, net of unamortized discount and debt costs | 216,279 | 0 |
Interest payable, related party included in accrued expenses | $ 877,141 | $ 679,239 |
Preferred Stock Series A [Member] | ||
Preferred stock, shares par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Preferred Stock, Series B [Member] | ||
Preferred stock, shares par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 10,000 | 10,000 |
Preferred stock, shares issued | 10 | 10 |
Preferred stock, shares outstanding | 10 | 10 |
Preferred Stock Undesignated [Member] | ||
Preferred stock, shares par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 7,990,000 | 7,990,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
CONDENSED STATEMENTS OF OPERATI
CONDENSED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
REVENUE | ||||
Sales | $ 116,864 | $ 360,764 | $ 288,854 | $ 828,796 |
Royalty and license fees | 12,500 | 12,500 | 37,500 | 37,500 |
Revenue | 129,364 | 373,264 | 326,354 | 866,296 |
COST OF GOODS SOLD | 90,749 | 213,485 | 173,639 | 481,704 |
GROSS MARGIN | 38,615 | 159,779 | 152,715 | 384,592 |
OPERATING EXPENSES | ||||
Research and development, net of government grant proceeds of $28,651, $34,716, $89,617 and $92,050, respectively | 29,814 | 10,573 | 69,660 | 84,799 |
Selling, general and administrative | 305,833 | 276,318 | 1,590,907 | 793,062 |
TOTAL OPERATING EXPENSES | 335,647 | 286,891 | 1,660,567 | 877,861 |
LOSS FROM OPERATIONS | (297,032) | (127,112) | (1,507,852) | (493,269) |
OTHER INCOME (EXPENSE) | ||||
Interest expense | (110,938) | (223,266) | (471,746) | (811,756) |
Forgiveness of debt income | 146,685 | 0 | 146,685 | 0 |
Change in fair value of derivative liabilities | 0 | (208,916) | 2,241,678 | 376,282 |
Gain on extinguishment of debt | 0 | 0 | 1,148,554 | 0 |
TOTAL OTHER INCOME (EXPENSE), NET | 38,459 | (432,182) | 3,067,883 | (435,474) |
NET INCOME (LOSS) | $ (261,285) | $ (559,294) | $ 1,557,319 | $ (928,743) |
NET INCOME (LOSS) PER COMMON SHARE, BASIC | $ (0.03) | $ (2.01) | $ 0.35 | $ (3.34) |
NET LOSS PER COMMON SHARE, DILUTED | $ (0.03) | $ (2.01) | $ (0.19) | $ (3.34) |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING, BASIC | 9,414,796 | 278,128 | 4,494,649 | 278,128 |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING, DILUTED | 9,414,796 | 278,128 | 8,360,950 | 278,128 |
CONDENSED STATEMENT OF STOCKHOL
CONDENSED STATEMENT OF STOCKHOLDERS DEFICIT (Unaudited) - USD ($) | Total | Preferred Stock | Common Stock | Capital in Excess of Par Value | Accumulated Deficit | Treasury Stock |
Balance, shares at Dec. 31, 2019 | 10 | 278,757 | ||||
Balance, amount at Dec. 31, 2019 | $ (9,668,994) | $ 0 | $ 2,788 | $ 45,976,660 | $ (54,186,330) | $ (1,462,112) |
Net loss | (1,830,965) | (1,830,965) | ||||
Balance, shares at Mar. 31, 2020 | 10 | 278,757 | ||||
Balance, amount at Mar. 31, 2020 | (11,499,959) | $ 0 | $ 2,788 | 45,976,660 | (56,017,295) | (1,462,112) |
Balance, shares at Dec. 31, 2019 | 10 | 278,757 | ||||
Balance, amount at Dec. 31, 2019 | (9,668,994) | $ 0 | $ 2,788 | 45,976,660 | (54,186,330) | (1,462,112) |
Net loss | (928,743) | |||||
Beneficial conversion feature of debt | 0 | |||||
Balance, shares at Sep. 30, 2020 | 10 | 278,757 | ||||
Balance, amount at Sep. 30, 2020 | (10,597,737) | $ 0 | $ 2,788 | 45,976,660 | (55,115,073) | (1,462,112) |
Balance, shares at Mar. 31, 2020 | 10 | 278,757 | ||||
Balance, amount at Mar. 31, 2020 | (11,499,959) | $ 0 | $ 2,788 | 45,976,660 | (56,017,295) | (1,462,112) |
Net loss | 1,461,516 | $ 0 | $ 0 | 0 | 1,461,516 | 0 |
Balance, shares at Jun. 30, 2020 | 10 | 278,757 | ||||
Balance, amount at Jun. 30, 2020 | (10,038,443) | $ 0 | $ 2,788 | 45,976,660 | (54,555,779) | (1,462,112) |
Net loss | (559,294) | $ 0 | $ 0 | 0 | (559,294) | 0 |
Balance, shares at Sep. 30, 2020 | 10 | 278,757 | ||||
Balance, amount at Sep. 30, 2020 | (10,597,737) | $ 0 | $ 2,788 | 45,976,660 | (55,115,073) | (1,462,112) |
Balance, shares at Dec. 31, 2020 | 10 | 278,757 | ||||
Balance, amount at Dec. 31, 2020 | (12,456,727) | $ 0 | $ 2,788 | 45,976,660 | (56,974,063) | (1,462,112) |
Net loss | 1,743,060 | $ 0 | $ 0 | 0 | 1,743,060 | 0 |
Balance, shares at Mar. 31, 2021 | 10 | 278,757 | ||||
Balance, amount at Mar. 31, 2021 | (10,713,667) | $ 0 | $ 2,788 | 45,976,660 | (55,231,003) | (1,462,112) |
Balance, shares at Dec. 31, 2020 | 10 | 278,757 | ||||
Balance, amount at Dec. 31, 2020 | (12,456,727) | $ 0 | $ 2,788 | 45,976,660 | (56,974,063) | (1,462,112) |
Net loss | 1,557,319 | |||||
Beneficial conversion feature of debt | 90,000 | |||||
Balance, shares at Sep. 30, 2021 | 10 | 9,415,425 | ||||
Balance, amount at Sep. 30, 2021 | (7,260,817) | $ 0 | $ 94,154 | 49,523,885 | (55,416,744) | (1,462,112) |
Balance, shares at Mar. 31, 2021 | 10 | 278,757 | ||||
Balance, amount at Mar. 31, 2021 | (10,713,667) | $ 0 | $ 2,788 | 45,976,660 | (55,231,003) | (1,462,112) |
Net loss | 75,544 | 0 | $ 0 | 0 | 75,544 | 0 |
Shares and warrants issued for services, shares | 2,100,000 | |||||
Shares and warrants issued for services, amount | 751,457 | 0 | $ 21,000 | 730,457 | 0 | 0 |
Shares and warrants issued for settlement of debt, shares | 7,036,668 | |||||
Shares and warrants issued for settlement of debt, amount | 2,687,134 | $ 0 | $ 70,366 | 2,616,768 | 0 | 0 |
Balance, shares at Jun. 30, 2021 | 10 | 9,415,425 | ||||
Balance, amount at Jun. 30, 2021 | (7,199,532) | $ 0 | $ 94,154 | 49,323,885 | (55,155,459) | (1,462,112) |
Net loss | (261,285) | 0 | 0 | 0 | (261,285) | 0 |
Warrants issued with debt | 110,000 | 0 | 0 | 110,000 | 0 | 0 |
Beneficial conversion feature of debt | 90,000 | $ 0 | $ 0 | 90,000 | 0 | 0 |
Balance, shares at Sep. 30, 2021 | 10 | 9,415,425 | ||||
Balance, amount at Sep. 30, 2021 | $ (7,260,817) | $ 0 | $ 94,154 | $ 49,523,885 | $ (55,416,744) | $ (1,462,112) |
CONDENSED STATEMENTS OF CASH FL
CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income (loss) | $ 1,557,319 | $ (928,743) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Amortization of deferred debt issue costs | 0 | 5,848 |
Depreciation and amortization | 15,767 | 33,301 |
Stock based compensation | 751,457 | 0 |
Change in fair value of derivative liability | (2,241,678) | (376,282) |
Forgiveness of debt | (146,685) | |
Gain on extinguishment of debt | (1,148,554) | 0 |
Non-cash interest expenses | 124,290 | 368,312 |
Amortization of debt discount and costs | 32,557 | 101,899 |
Gain on extinguishment of debt | 0 | 0 |
Legal fees paid through proceeds of notes payable | 0 | 0 |
(Increase) decrease in: | ||
Accounts receivable | (62,266) | 12,883 |
Inventory | (27,261) | 11,138 |
Other receivables | 6,169 | 22,019 |
Prepaid expenses/Other assets | (39,021) | (12,738) |
Increase (decrease) in: | ||
Accounts payable | 87,060 | 36,423 |
Accrued expenses | 388,764 | 412,291 |
Customer deposits | 13,331 | (41,152) |
Deferred revenue | (37,500) | (37,500) |
Net cash used in operating activities | (726,251) | (392,301) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of equipment | (11,541) | 0 |
Increase in patent costs | (13,577) | (18,633) |
Net cash used in investing activities | (25,118) | (18,633) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from notes payable - related parties | 49,297 | 135,000 |
Proceeds from notes payable | 825,340 | 348,750 |
Repayment of note | (26,200) | (54,000) |
Net cash provided by financing activities | 848,437 | 429,750 |
Net increase in cash | 97,068 | 18,816 |
Cash, beginning of period | 36,516 | 4,083 |
Cash, end of period | 133,584 | 22,899 |
SUPPLEMENTAL CASH FLOW INFORMATION: | ||
Cash paid for interest | 0 | 1,537 |
NON-CASH FINANCING AND FINANCING ACTIVITIES | ||
Issuance of common stock and warrants upon settlement of notes and accrued interest | 2,687,134 | 0 |
Notes and accrued interest settled with common stock and warrants | 2,107,414 | 0 |
Derivative liability extinguished | 1,728,274 | 0 |
Relative fair value of warrant, recorded as debt discount | 110,000 | 0 |
Beneficial conversion feature of debt | 90,000 | 0 |
Common stock to be issued for finance cost, accrued and recorded as debt discount | 120,990 | 0 |
Original issued discount, deducted from proceeds and recorded as debt discount | 20,000 | 0 |
Debt costs deducted from proceeds | $ 3,000 | $ 0 |
Background Information
Background Information | 9 Months Ended |
Sep. 30, 2021 | |
Background Information | |
Note 1. Background Information | Note 1. Background Information Dais Corporation (“Dais”, “us,” “we,”, the “Company”), a New York corporation, is a nano-structured polymer technology materials company having developed and now commercializing products using its platform of nanomaterial called Aqualyte™. The Company was incorporated in April 1993 and its corporate headquarters is in Odessa, Florida. Environmental, Societal, and Governance (ESG) The Company takes its role and responsibilities with an eye to the long view, and a sense of leadership. Below is the beginning of a new section to be found in the Company’s filings going forward. It is the beginning of our ESG programs, with the center piece being our products, driven by our deep concern about the value of ESG in the workplace. Environmental Dais has a serious focus on external environmental challenges (Climate Crisis, Sustainability) facing our country and our Planet. We believe with modest adoption of the Company’s products worldwide (having an estimated 15% market share in key HVAC, Water, and Energy markets) where Dais is focused our products alone could account for upwards of 5 billion metric tons saved (avoided) of CO 2 2 Social Concerns Dais, as a small company, is a diverse employer and manager of talented people from many countries around the world. The Company sees innovation and agility as massive (and expanding) benefits of diversity. Governance Twenty-Five percent of Dais’s Board of Director’s is classified as diverse. The Dais Board drives a high standard of business ethics, anti-competitive practices, looks for corruption, and seeks to provide accounting transparency for stakeholders. Our Products The Company’ uses its proprietary Aqualyte nanomaterial to integrate it into traditional or new product form factors. It is management’s belief based on 3 rd Nanomaterial Platform - Aqualyte™ Aqualyte Nanomaterial is made from commercially available polymer resin and industrial grade solvents which are mixed using a proprietary process with traditional industrial equipment, and solvents. The resin and the solvents are commercially available from chemical supply houses. Our process changes the molecular properties of the starting polymer resins such that in the final Aqualyte form there are very different properties. Aqualyte is a technology with carefully tailored properties for use in air, energy, and water applications. This modified block copolymer membrane with a nanoscale structure serves as the foundation of the Dais product line. The material forms a nonporous plastic membrane able to move water moisture through microscopic hydrophilic channels while blocking passage of most gases and volatile compounds. Company and third-party data suggest the membrane is robust, has no pores which will clog or accumulate bacterial or fungal growth. Multiple independent third parties have validated the performance of Aqualyte and the protection it provides from the harmful effects of viral and bacterial pathogens. This is a major feature which differentiates products made using the Aqualyte Nanomaterial Platform. The Company continues to develop next generation versions of its Aqualyte nanomaterial working to increase performance, add new features, and reduce production cost. The Company sells Aqualyte to skilled OEMs using it’s features and properties to create their own improved or new products in a range of applications. ConsERV™ We continue to work to expand sales channels to drive growth of revenues of the ConsERV product, which uses Aqualyte Nanomaterial in an HVAC energy conservation and emissions lowering product (branded ConsERV). According to various tests, the product saves on average 30% on HVAC operating costs, lowers CO 2 Basis of Presentation The Company’s accompanying condensed financial statements are unaudited, but in the opinion of management reflect all adjustments necessary to fairly state the Company’s financial position, results of operations, stockholders’ deficit and cash flows as of and for the dates and periods presented. The financial statements of the Company are prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information. The unaudited financial statements and notes are presented as permitted by Form 10-Q. Accordingly, certain information and note disclosures normally included in financial statements have been omitted although the Company generally believes that the disclosures are adequate to ensure that the information presented is not misleading. The accompanying financial statements and notes should be read in conjunction with the audited financial statements and notes of the Company for the fiscal year ended December 31, 2020 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on September 17, 2021. The results of operations for the three- and nine-month periods ended September 30, 2021 are not necessarily indicative of the results that may be expected for any future quarters or for the entire year ending December 31, 2021. |
Going Concern and Managements P
Going Concern and Managements Plans | 9 Months Ended |
Sep. 30, 2021 | |
Going Concern and Managements Plans | |
Note 2. Going Concern and Management's Plans | Note 2. Going Concern and Management’s Plans The accompanying financial statements have been prepared assuming the Company will continue as a going concern. Although the Company generated income of $1,557,319 for the nine months ended September 30, 2021, this resulted primarily from a noncash gain on change in derivative liabilities of $2,241,678 and a noncash gain on extinguishment of debt of $1,148,554, along with noncash gain on forgiveness of debt of $146,685. The Company has incurred significant losses since inception and, as of September 30, 2021, the Company has an accumulated deficit of $55,416,744, total stockholders’ deficit of $7,260,817, negative working capital of $7,160,701 and cash of $133,584. The Company used $726,251 and $392,301 of cash in operations during the nine months ended September 30, 2021 and 2020, respectively, which was funded primarily by loan proceeds from related parties and third parties. There is no assurance that any such financing will be available in the future. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The Company is currently pursuing the following sources of short and long-term working capital: 1. The Company is actively working with selected targeted parties who are interested in licensing, purchasing the rights to, or establishing a joint venture to commercialize applications of the Company’s technology; 2. The Company continues to seek capital from certain strategic and/or government grant opportunities and related sources. These sources may, pursuant to any agreements that may be developed in conjunction with such funding, assist in the product definition and design, roll-out and channel penetration of products; and 3. The Company is actively working with newer investors, private equity companies, purchase order financing parties, and its existing debt holders to restructure its existing debt and obtain short and long-term working and growth capital. Any failure by the Company to timely procure additional financing or investment adequate to fund the ongoing operations, including planned product development initiatives and commercialization efforts, will have material adverse consequences on the Company’s financial condition, results of operations and cash flows as could any unfavorable terms. There are no assurances the Company will be able to obtain the financing and planned product development commercialization. Accordingly, the Company may not have the ability to continue as a going concern. The financial statements of the Company do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company has experienced and increase in inquiries relating to its’ ConsERV product and has responded to bid requests generated through our network of sales representatives. Converting these bids into sales will increase cash-flow relating to operations, reducing the amount of anticipated short-term financing. |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2021 | |
Significant Accounting Policies | |
Note 3. Significant Accounting Policies | Note 3. Significant Accounting Policies The significant accounting policies followed are: Use of estimates - Significant estimates underlying the Company’s reported financial position and results of operations include the allowance for doubtful accounts, fair value of derivative liabilities, valuation allowance on deferred taxes and the warranty reserve. Revenue recognition - In certain instances, the Company’s ConsERV system product may carry a limited warranty of up to one year for all parts contained therein except for the energy recovery ventilator core produced and sold by the Company. The distributor of the ConsERV system may carry a limited warranty of up to ten years. The limited warranty includes replacement of defective parts for the ConsERV system and includes workmanship and material failure for the ConsERV core. The Company recorded an accrual of $91,531 for future warranty expenses at September 30, 2021 and December 31, 2020, which is included in accrued expenses, other. Royalty revenue is recognized as earned. The Company recognized royalty revenue of $0 for the three and nine months ended September 30, 2021 and 2020, respectively. Revenue derived from the sale of licenses is deferred and recognized as license fee revenue on a straight-line basis over the life of the license, or until the license arrangement is terminated. The Company recognized license fee revenue of $12,500 and $12,500 for the three months ended September 30, 2021 and 2020, respectively and $37,500 and $37,500 for the nine months ended September 30, 2021 and 2020, respectively. The Company accounts for revenue arrangements with multiple elements under the provisions of ASC Topic 605-25, “Revenue Recognition-Multiple-Element Arrangements.” To account for these agreements, the Company must identify the deliverables included within the agreement and evaluate which deliverables represent separate units of accounting based on certain criteria being met, including whether the delivered element has stand-alone value to the licensee. The consideration received is allocated among the separate units of accounting, and the applicable revenue recognition criteria are applied to each of the separate units. Shipping and handling fees billed to customers are included in revenue. Shipping and handling fees associated with freight are generally included in cost of revenue. Cash and cash equivalents - Concentrations – Fair Value of Financial Instruments - Inventory - Property and equipment - Intangible assets Research and development expenses and funding proceeds - Derivative Liability Fair Value Measurements The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below: · Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. · Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g. interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means. · Level 3 - Inputs that are both significant to the fair value measurement and unobservable. A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. The Company has recorded a derivative liability for its convertible notes which contain variable conversion prices. The table below summarizes the fair values of our financial liabilities as of September 30, 2021: Fair Value at September 30, Fair Value Measurement Using 2021 Level 1 Level 2 Level 3 Derivative liability $ - $ - $ - $ - The reconciliation of the derivative liability measured at fair value on a recurring basis using unobservable inputs (Level 3) is as follows for the nine months ended September 30, 2021 and 2020: September 30, September 30, 2021 2020 Balance, beginning of period $ 3,845,662 $ 2,349,471 Additions 124,290 368,312 Extinguished derivative liability (1,728,274 ) - Change in fair value of derivative liabilities (2,241,678 ) (376,282 ) Balance, end of period $ - $ 2,341,501 Earnings (loss) per share Reconciliation of diluted loss per share for the nine-month period ended September 30, 2021, is as follows: Nine Months Ended Net income attributable to common shareholders $ 1,557,319 Income attributable to note derivatives Change in fair value of derivatives (2,241,678 ) Gain on extinguishment of debt (1,148,554 ) Expense attributable to note derivatives Interest expense 216,378 Diluted loss attributable to common shareholders $ (1,616,535 ) Basic shares outstanding 4,494,649 Derivative notes and interest shares 3,866,301 Diluted shares outstanding 8,360,950 Diluted loss per share $ (0.19 ) Recent Accounting Pronouncements - In December 2019, the FASB issued ASU 2019-12, “ Simplifying the Accounting for Income Taxes Other recent accounting pronouncements issued by the FASB and the SEC did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statements. |
Accrued Expenses Other
Accrued Expenses Other | 9 Months Ended |
Sep. 30, 2021 | |
Accrued Expenses Other | |
Note 4. Accrued Expenses, Other | Note 4. Accrued Expenses, Other Accrued expenses, other consists of the following: September 30, December 31, 2021 2020 Accrued expenses, other $ 189,278 $ 185,656 Accrued common stock to be issued for financing cost 120,990 - Accrued interest 898,067 1,238,553 Accrued warranty costs 91,531 91,531 $ 1,299,866 $ 1,515,740 |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2021 | |
Related Party Transactions | |
Note 5. Related Party Transactions | Note 5. Related Party Transactions The Company rents a building that is owned by two stockholders of the Company, one of which is the Chief Executive Officer. Rent expense for this building is $4,066 per month, including sales tax. The Company recognized rent expense related to this lease of $12,198 and $12,198 for the three months ended September 30, 2021 and 2020, respectively and $36,594 and $36,594 for the nine months ended September 30, 2021 and 2020, respectively The lease term will terminate upon 30 days’ written notice from landlord or 90 days written termination from us. The lease is considered to be short term or month to month. On June 24, 2016, the Company entered into a Loan and Security Agreement (“Security Agreement”) with the entity now known as PKT Strategic Assets, LLC (the “Holder”) pursuant to which the Company issued a Senior Secured Promissory Note for $150,000(the “Note”). The Note has an interest rate is 12% per annum compounded daily with a minimum interest payment of $2,000. The Note grants the Holder a secured interest in all the assets of the Company. During 2016 to the period ended September 30, 2021, the Holder extended the Note pursuant to various amendments. Pursuant to the amendments, the principal amount and interest totaled $3,040,838 (not including possible fees and other expenses). The Holder’s corporation is majority controlled by Ms. Tangredi, related to Tim Tangredi: the Company’s CEO and stockholder, and therefore, is a Related Party of the Company. The Company is to pay the Holder the principal, plus all interest and fees due in accordance with terms and conditions of the Security Agreement on the earlier of: (i) the date upon which the Company secures funds, regardless of source, equal to or exceeding, in the aggregate, $1,000,000 or (ii.). November 1, 2021 which has expired. The Holder has not declared the Note in Default as the Parties are actively renegotiating a new Maturity Date (the “Maturity Date”) with changes terms and conditions. The Parties fully expect to come to reasonable terms on all issues during the fourth quarter of 2021. The Company has accrued compensation due to the Chief Executive Officer as of September 30, 2021 and December 31, 2020 of $2,053,878 and $1,983,639, respectively, included in accrued compensation and related benefits in the accompanying balance sheets. Subsequently, the Parties have agreed to exchange the sum for equity in the Company. See Note 11. Subsequent Events for more information. On October 12, 2019, the Company entered into a promissory note with an entity controlled by our Chief Executive Officer in the amount of $10,000. The note bears interest at 10% per year and matures on October 12, 2021. Interest expense on the note was $150 for each of the three month periods ended September 30, 2021 and 2020, respectively, and was $450 for each of the nine month periods ended September 30, 2021 and 2020, respectively. Accrued interest was $1,200 and $750 at September 30, 2021 and December 31, 2020, respectively. |
Equity Transactions
Equity Transactions | 9 Months Ended |
Sep. 30, 2021 | |
Equity Transactions | |
Note 6. Equity Transactions | Note 6. Equity Transactions Preferred Stock As of September 30, 2021 and December 31, 2020, the Company’s Board of Directors noted it had in previous years authorized a total of 10,000,000 shares of preferred stock with a par value of $0.01 to be issued in series with terms and conditions to be determined by the Board of Directors. 2,000,000 of the shares of preferred stock has been designated as Class A Preferred Stock. The Class A Preferred Stock shall entitle the holder thereof to 150 votes on all matters submitted to a vote of the stockholders of the Company. 10,000 of the shares of preferred stock has been designated as Class B Preferred Stock. The Class B Stock includes the right to vote in an amount equal to 51% of the votes to approve certain corporate actions, including, without limitation, changing the name of the Company and increasing the number of authorized shares. Upon any liquidation, dissolution or winding up of the Company, no distribution shall be made to the holders of shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Class A or Class B Preferred Stock unless, prior thereto, the holders of shares of Class A or Class B Preferred Stock shall have received $1.50 per share (the “Stated Amount”). The Class A and Class B Preferred Stock shall rank, with respect to the payment of liquidation, dividends and the distribution of assets, senior to the Company’s Common Stock. The Holder (as defined in the Class A Preferred Stock certificate of designations) of the Class A Preferred Stock may convert all or part of the outstanding and unpaid Stated Amount (as defined in the Class A Preferred Stock certificate of designations) into fully paid and non-assessable shares of the Company’s common stock at the Conversion Price (as defined in the Class A Preferred Stock certificate of designations). The number of shares receivable upon conversion equals the Stated Amount divided by the Conversion Price. The Conversion Price shall be equal to the 75% of the average closing price for the 30 trading days prior to the election to convert. At no time will the Company convert any of the Stated Amount into common stock if that would result in the Holder beneficially owning more than 49% of the sum of the voting power of the Company’s outstanding shares of common stock plus the voting power of the Class A Preferred Stock. No shares of Class A Preferred Stock have been issued. The shares of the Class B Preferred Stock shall be automatically redeemed by the Company at $0.01 per share on the date that Tim N. Tangredi ceases, for any reason, to serve as an officer, director, or consultant of the Company. Common Stock As of September 30, 2021 and December 31, 2020, the Company’s Board of Directors has authorized a total of 1,100,000,000 shares of common stock with a par value of $0.01 to be issued in series with terms and conditions to be determined by the Board of Directors. During the three months ended June 30, 2021, the Company issued 7,036,668 shares of common stock and 2,826,733 common stock purchase warrants in settlement of convertible notes payable and related accrued interest. The shares are valued at $1,829,534 and the Warrants are valued at $857,600. During the three months ended June 30, 2021, the Company issued 2,100,000 shares of common stock, valued at $567,000, for services. There were no common stock transactions in 2020. Options and Warrants In January 2021, outstanding Options and Warrants held by Employees, Board Members and the Company’s Secured Note Holder were surrendered by Holders to the Company. The 2,826,733 warrants issued in 2021 in connection with the settlement of debt have an exercise price of $0.30 per share and expire on June 30, 2022. The fair value of the warrants was $857,600, determined using the Black Scholes Model with the following assumptions: (1) risk free interest rate of 0.05%; (2) dividend yield of 0%; (3) volatility factor of the expected market price of the Company’s common stock of 367%; and (4) an expected life of 11.5 months. During the three months ended June 30, 2021, the Company issued 700,000 warrants for services. The warrants have an exercise price of $0.05 per share and expire on May 18, 2022. The fair value of the warrants was $184,457, determined using the Black Scholes Model with the following assumptions: (1) risk free interest rate of 0.06%; (2) dividend yield of 0%; (3) volatility factor of the expected market price of the Company’s common stock of 376%; and (4) an expected life of 1 year. In September 2021, the Company issued 1,466,666 warrants in connection with a note in the amount of $220,000. The warrants have an exercise price of $0.15 per share and expire on September 21, 2026. The relative fair value of the warrants was $110,000, determined using the Black Scholes Model with the following assumptions: (1) risk free interest rate of 0.84%; (2) dividend yield of 0%; (3) volatility factor of the expected market price of the Company’s common stock of 389%; and (4) an expected life of 5 years. |
Notes Payable
Notes Payable | 9 Months Ended |
Sep. 30, 2021 | |
Notes Payable | |
Note 7. Notes Payable | Note 7. Notes Payable Paycheck Protection Program Loans On January 25, 2021, the Company received $122,340 in a loan borrowed from a bank pursuant to the Paycheck Protection Program under the CARES Act guaranteed by the Small Business Administration (“SBA”), which we expect to be forgiven in part or in full, subject to our compliance with the conditions of the Paycheck Protection Program. If not forgiven, the terms on the note provide for interest at 1% per year and the note mature in 24 months, with 18 monthly payments of $8,146 beginning after the initial 6 month deferral period for payments. On April 29, 2020, the Company received $144,750 in a loan borrowed from a bank pursuant to the Paycheck Protection Program under the CARES Act guaranteed by the Small Business Administration (“SBA”), which we expect to be forgiven in part or in full, subject to our compliance with the conditions of the Paycheck Protection Program. If not forgiven, the terms on the note provide for interest at 1% per year and the note mature in 24 months, with 18 monthly payments of $8,146 beginning after the initial 6 month deferral period for payments. This loan was subsequently forgiven in full on August 29, 2021 and the Company recorded forgiveness of debt income of $146,685, including accrued interest forgiven of $1,935. Small Business Administration Loan On June 12, 2020, the Company received $150,000 in a loan borrowed from the SBA. Installment payments, including principal and interest, of $731 monthly, will begin 12 months from the date of the note. The balance of principal and interest will mature 30 years from the date of the note. Interest will accrue at the rate of 3.75% per year. On March 16, 2021, the U.S. Small Business Administration announced that the deferment period for the repayment would be extended an additional 12 months. JMS Investments Between April of 2021 and September 30, 2021, JMS Investments of Staten Island, NY, USA invested $376,000 in seven separate transactions. The sums are repayable in the form of one-year demand notes having an interest rate of 8.5%. GEX Management, Inc. On August 30, 2021, the Company entered into a promissory note with GEX Management, Inc. The note matures on February 28, 2022 and bears interest at 10% per year. In connection with this note, the Company has agreed to issue 1,000,000 shares of common stock to the lender. These shares have not been issued at September 30, 2021. The shares to be issued have been valued at $120,990, which has been recorded as debt discount. The discount will be amortized to interest expense over the term of the note, and $25,836 was amortized during the three and nine months ended September 30, 2021. The value of the shares has been included in accrued expenses at September 30, 2021. GS Capital Partners, LLC Convertible Note On September 20, 2021, the Company entered into a promissory note with GS Capital Partners, LLC. The note matures on September 20, 2022 and bears interest at 8% per year. The Company received proceeds of $197,000, after deduction of $20,000 of original issue discount and $3,000 of costs. In connection with this note, the Company has issued a warrant to purchase 1,466,666 shares of common stock to the lender. The warrants have an exercise price of $0.15 per share and expire on September 21, 2026. The relative fair value of the warrants was $110,000, determined using the Black Scholes Model with the following assumptions: (1) risk free interest rate of 0.84%; (2) dividend yield of 0%; (3) volatility factor of the expected market price of the Company’s common stock of 389%; and (4) an expected life of 5 years. The note is convertible into shares of common stock at a fixed conversion price of $0.10 per share. The company has recorded a beneficial conversion feature of $90,000. A total of $220,000 has been recorded as debt discount, and 3,000 has been recorded as deferred debt costs. The discount and costs will be amortized to interest expense over the term of the note, and $6,721 was amortized during the three and nine months ended September 30, 2021. The sums advanced by GS Capital Partners and JMS Investments together form a “bridge loan” for use by the Company to, among other actions, bring all filings current to return to fully reporting status with the SEC and OTC, and allow the Company to obtain the critical resources which allow Dais to grow as management and the bridge investors believe is possible using the company’s proven nanotechnology in sustainable product in a worldwide market. Currently, JMS Investments, the Company, and the Senior Secured Note Holder are negotiating the definitive investment plan along with terms and uses of proceeds. It is expected the full investment plan will be ready for announcement in the fourth quarter of 2021. |
Convertible Notes Payable and E
Convertible Notes Payable and Exchange Program | 9 Months Ended |
Sep. 30, 2021 | |
Convertible Notes Payable and Exchange Program | |
Note 8. Convertible Notes Payable and Exchange Program | Note 8. Convertible Notes Payable and Exchange Program Debt to Equity Exchange Program In the period from June 2017 through the end of December 2019, the Company entered eight Convertible Note Holder agreements with eight Note Holders totaling, with all fees, interest, and principal, $2,008,812 as of December 31, 2020. The notes were not considered to be in default and were being renegotiated at March 31, 2021. Subsequently, as of May 31, 2021, each Convertible Noteholder received their fees, interest, and principal totaling $2,107,414 in shares of Common stock of the Company (at $.030 per share) with 50% warrant coverage (1 year cash warrant with a strike price of $0.30). All documents were executed by June 30, 2021 with all equity/warrants issued by July 31, 2021. The Company issued 7,036,668 Common shares, and 2,826,733 Warrant shares in this transaction. The Company’s convertible promissory notes at September 30, 2021 and December 31, 2020 are as follows: September 30, 2021 December 31, 2020 Convertible notes payable, bearing interest at 8-10% $ - $ 1,453,960 Current portion $ - $ 1,453,960 The company entered into various convertible notes during 2019 and 2018, aggregating $1,453,960 at the time of settlement in the second quarter of 2021. During the second quarter of 2021 the Company issued 7,036,668 shares of common stock, valued at $1,829,534 and 3,576,733 warrants, valued at $857,600, in settlement of $1,453,960 of notes payable and $653,454 of accrued interest. Derivative liability of $1,728,274 was extinguished as a result of the settlement. The Company recorded a gain on extinguishment of $1,148,554. During the nine months ended September 30, 2020, the Company amortized $101,899 of debt discount and $5,848 of debt issue costs to interest expense. |
Derivative Liabilities
Derivative Liabilities | 9 Months Ended |
Sep. 30, 2021 | |
Derivative Liabilities | |
Note 9. Derivative Liabilities | Note 9. Derivative Liabilities The Company has identified certain embedded derivatives related to its convertible notes. Since the notes are convertible into a variable number of shares or have a price reset feature, the conversion features of those notes are recorded as derivative liabilities. The accounting treatment of derivative financial instruments requires that the Company record fair value of the derivatives as of the inception date and to adjust to fair value as of each subsequent balance sheet date. The Company has recorded additions to the derivative conversion liabilities related to the conversion feature attributable to interest accrued during the period. These additions totaled $0 and $106,366 for the three months ended September 30, 2021 and 2020, respectively, and $124,290 and $368,312 for the nine months ended September 30, 2021 and 2020, respectively and were charged to interest expense. During the three and nine months ended September 30, 2021, through the date of settlement of the debt, the Company recorded income of $0 and $2,241,678 related to the change in the fair value of the derivatives. The fair value of the embedded derivatives was $1,728,274 at the date of settlement, determined using the Black Scholes Model with the following assumptions: (1) risk free interest rate of 0.01%; (2) dividend yield of 0%; (3) volatility factor of the expected market price of the Company’s common stock of 315%; and (4) an expected life of 3 months. During the three and nine months ended September 30, 2020, the Company recorded expense of $208,916 and income of $376,282, respectively, related to the change in the fair value of the derivatives. During the second quarter of 2021 the Company issued 7,036,668 shares of common stock, valued at $1,829,534 and 2,826,733 warrants, valued at $857,600, in settlement of $1,453,960 of notes payable and $653,454 of accrued interest. Derivative liability of $1,728,274 was extinguished because of the settlement. The Company recorded a gain on extinguishment of $1,148,554. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies | |
Note 10. Commitments and Contingencies | Note 10. Commitments and Contingencies Litigation From time to time, claims are made against the Company in the ordinary course of its business, which could result in litigation. Claims and associated litigation are subject to inherent uncertainties and unfavorable outcomes could occur, such as monetary damages, fines, penalties, or injunctions prohibiting the Company from selling one or more products or engaging in other activities. The occurrence of an unfavorable outcome in any specific period could have a material adverse effect on the Company’s results of operations for that period or future periods. In 2015, the Company commenced an action for the cancellation of shares issued to Soex (the “Shares”) in connection with a breached Securities Purchase Agreement and Distribution Agreement entered 2014. The Soex Litigation was tried in U.S. District Court for the Middle District of Florida in October of 2018. The jury at the conclusion of the trial did not award monetary damages to either party for claims or counterclaims. On October 24, 2018, the Company initiated a third lawsuit against an affiliate of Soex, Zhongshan Trans-Tech New Material Technology Co. Ltd. Zhongshan, China, (“Transtech”), and the Chairperson of the affiliate and Soex, based on new information learned by the Company. The Company will seek maximum relief and damages for this on-going and growing illegal misuse the Company’s Intellectual Property. The Company feels this third action will lead in a judgment in favor of the Company. On October 8, 2021 the Company was notified of a usual order by the Federal District Court judge who oversaw the initial 2018 proceedings. This activity was initiated at the request of Soex’s counsel. The Order awards the defendant (Soex) $300,568 in attorney’s fees and $82,096.91 in costs for a total award of $382,664.91 to be paid by Dais. The Order doesn't specify the date by which the award needs to be paid. The Company will vigorously defend itself against this Order, as well as move on all possible avenues open to it to stop, what Management believes, is an on-going misuse of the Company’s core Intellectual Property. The Company believes – based on the content of the Order and other admissions and actions on the part of others – it has a chance to prevail in an appeal to the benefit of the Company and its shareholders. Accounts Payable The firms below have pursued legal action against the Company to collect overdue accounts payable sums. The Company is working with each to enter into a settlement plan, or “pay over time” payment plan. To date the Company has one agreement in place with SoftinWay. Company Sum Owned Payment Plan Legal Action Old Dominion Freight Line $ 13,576.95 No Yes Power Plant Services $ 85,199.11 No Yes SoftinWay $ 15,350.00 Yes Yes The O-Ring Store $ 10,334.00 No Yes Total $ 124,459.06 |
Subsequent Event
Subsequent Event | 9 Months Ended |
Sep. 30, 2021 | |
Subsequent Event | |
Note 11. Subsequent Events | Note 11. Subsequent Events 1. The Company has accrued compensation due to the Chief Executive Officer (“Employee”) beginning in 2004, of $2,053,878 and $1,983,639 at September 30, 2021 and December 31, 2020, respectively, included in accrued compensation and related benefits in the accompanying balance sheets. A Five-year cashless warrant for 5,134,690 shares with a strike price of $.08 will be issued to Employee to reduce the Company’s indebtedness by 75% leaving a balance of $536,000. 2. In November of 2021, the Company received additional advances from or through JMS Investments, LLC . Each advance is in the form of a demand note having an interest rate of 8.5%. The total investment between April 2021 and November 2021 is $536,000. The November 2021 additional sums are: Date Sum Received November 2, 2021 $ 30,000 November 3, 2021 $ 100,000 November 4, 2021 $ 30,000 No other material events have occurred after September 30, 2021 requiring recognition or disclosure in the financials. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Significant Accounting Policies | |
Use of estimates | Use of estimates - Significant estimates underlying the Company’s reported financial position and results of operations include the allowance for doubtful accounts, fair value of derivative liabilities, valuation allowance on deferred taxes and the warranty reserve. |
Revenue recognition | Revenue recognition - In certain instances, the Company’s ConsERV system product may carry a limited warranty of up to one year for all parts contained therein except for the energy recovery ventilator core produced and sold by the Company. The distributor of the ConsERV system may carry a limited warranty of up to ten years. The limited warranty includes replacement of defective parts for the ConsERV system and includes workmanship and material failure for the ConsERV core. The Company recorded an accrual of $91,531 for future warranty expenses at September 30, 2021 and December 31, 2020, which is included in accrued expenses, other. Royalty revenue is recognized as earned. The Company recognized royalty revenue of $0 for the three and nine months ended September 30, 2021 and 2020, respectively. Revenue derived from the sale of licenses is deferred and recognized as license fee revenue on a straight-line basis over the life of the license, or until the license arrangement is terminated. The Company recognized license fee revenue of $12,500 and $12,500 for the three months ended September 30, 2021 and 2020, respectively and $37,500 and $37,500 for the nine months ended September 30, 2021 and 2020, respectively. The Company accounts for revenue arrangements with multiple elements under the provisions of ASC Topic 605-25, “Revenue Recognition-Multiple-Element Arrangements.” To account for these agreements, the Company must identify the deliverables included within the agreement and evaluate which deliverables represent separate units of accounting based on certain criteria being met, including whether the delivered element has stand-alone value to the licensee. The consideration received is allocated among the separate units of accounting, and the applicable revenue recognition criteria are applied to each of the separate units. Shipping and handling fees billed to customers are included in revenue. Shipping and handling fees associated with freight are generally included in cost of revenue. |
Cash and cash equivalents | Cash and cash equivalents - |
Concentrations | Concentrations – |
Fair Value of Financial Instruments | Fair Value of Financial Instruments - |
Inventory | Inventory - |
Property and equipment | Property and equipment - |
Intangible assets | Intangible assets |
Research and development expenses and funding proceeds | Research and development expenses and funding proceeds - |
Derivative liability | Derivative Liability |
Fair Value Measurements | Fair Value Measurements The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below: · Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. · Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g. interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means. · Level 3 - Inputs that are both significant to the fair value measurement and unobservable. A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. The Company has recorded a derivative liability for its convertible notes which contain variable conversion prices. The table below summarizes the fair values of our financial liabilities as of September 30, 2021: Fair Value at September 30, Fair Value Measurement Using 2021 Level 1 Level 2 Level 3 Derivative liability $ - $ - $ - $ - The reconciliation of the derivative liability measured at fair value on a recurring basis using unobservable inputs (Level 3) is as follows for the nine months ended September 30, 2021 and 2020: September 30, September 30, 2021 2020 Balance, beginning of period $ 3,845,662 $ 2,349,471 Additions 124,290 368,312 Extinguished derivative liability (1,728,274 ) - Change in fair value of derivative liabilities (2,241,678 ) (376,282 ) Balance, end of period $ - $ 2,341,501 |
Earnings (loss) per share | Earnings (loss) per share Reconciliation of diluted loss per share for the nine-month period ended September 30, 2021, is as follows: Nine Months Ended Net income attributable to common shareholders $ 1,557,319 Income attributable to note derivatives Change in fair value of derivatives (2,241,678 ) Gain on extinguishment of debt (1,148,554 ) Expense attributable to note derivatives Interest expense 216,378 Diluted loss attributable to common shareholders $ (1,616,535 ) Basic shares outstanding 4,494,649 Derivative notes and interest shares 3,866,301 Diluted shares outstanding 8,360,950 Diluted loss per share $ (0.19 ) |
Recent Accounting Pronouncements | Recent Accounting Pronouncements - In December 2019, the FASB issued ASU 2019-12, “ Simplifying the Accounting for Income Taxes Other recent accounting pronouncements issued by the FASB and the SEC did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statements. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Significant Accounting Policies | |
Schedule of fair value of derivative liability | Fair Value at September 30, Fair Value Measurement Using 2021 Level 1 Level 2 Level 3 Derivative liability $ - $ - $ - $ - |
Schedule of reconciliation of the derivative liability | September 30, September 30, 2021 2020 Balance, beginning of period $ 3,845,662 $ 2,349,471 Additions 124,290 368,312 Extinguished derivative liability (1,728,274 ) - Change in fair value of derivative liabilities (2,241,678 ) (376,282 ) Balance, end of period $ - $ 2,341,501 |
Schedule of diluted loss per share | Nine Months Ended Net income attributable to common shareholders $ 1,557,319 Income attributable to note derivatives Change in fair value of derivatives (2,241,678 ) Gain on extinguishment of debt (1,148,554 ) Expense attributable to note derivatives Interest expense 216,378 Diluted loss attributable to common shareholders $ (1,616,535 ) Basic shares outstanding 4,494,649 Derivative notes and interest shares 3,866,301 Diluted shares outstanding 8,360,950 Diluted loss per share $ (0.19 ) |
Accrued Expenses Other (Tables)
Accrued Expenses Other (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Accrued Expenses Other | |
Schedule of accrued expenses, other | September 30, December 31, 2021 2020 Accrued expenses, other $ 189,278 $ 185,656 Accrued common stock to be issued for financing cost 120,990 - Accrued interest 898,067 1,238,553 Accrued warranty costs 91,531 91,531 $ 1,299,866 $ 1,515,740 |
Convertible Notes Payable and_2
Convertible Notes Payable and Exchange Program (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Convertible Notes Payable and Exchange Program | |
Schedule of convertible notes payable | September 30, 2021 December 31, 2020 Convertible notes payable, bearing interest at 8-10% $ - $ 1,453,960 Current portion $ - $ 1,453,960 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies | |
Schedule of pursued legal action | Company Sum Owned Payment Plan Legal Action Old Dominion Freight Line $ 13,576.95 No Yes Power Plant Services $ 85,199.11 No Yes SoftinWay $ 15,350.00 Yes Yes The O-Ring Store $ 10,334.00 No Yes Total $ 124,459.06 |
Subsequent Event (Tables)
Subsequent Event (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Subsequent Event | |
Schedule of subsequent events | Date Sum Received November 2, 2021 $ 30,000 November 3, 2021 $ 100,000 November 4, 2021 $ 30,000 |
Going Concern and Managements_2
Going Concern and Managements Plans (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||||||||
Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Equity Transactions | ||||||||||
Noncash gain on extinguishment of debt | $ 1,148,554 | $ 1,148,554 | ||||||||
Net income (loss) | (261,285) | $ 75,544 | $ 1,743,060 | $ (559,294) | $ 1,461,516 | $ (1,830,965) | 1,557,319 | $ (928,743) | ||
Noncash gain on forgiveness of debt | 146,685 | 146,685 | ||||||||
Accumulated deficit | (55,416,744) | (55,416,744) | $ (56,974,063) | |||||||
Total stockholders' deficit | (7,260,817) | $ (7,199,532) | $ (10,713,667) | $ (10,597,737) | $ (10,038,443) | $ (11,499,959) | (7,260,817) | (10,597,737) | (12,456,727) | $ (9,668,994) |
Derivative liabilties | 2,241,678 | 2,241,678 | ||||||||
Working capital deficit | (7,160,701) | (7,160,701) | ||||||||
Net cash used in operating activities | (726,251) | $ (392,301) | ||||||||
Cash and cash equivalents | $ 133,584 | $ 133,584 | $ 36,516 |
Significant Accounting Polici_4
Significant Accounting Policies (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Derivative Liability | $ 1,728,274 | |
Derivative Liability | 0 | $ 3,845,662 |
Level 1 [Member] | ||
Derivative Liability | 0 | |
Level 2 [Member] | ||
Derivative Liability | 0 | |
Level 3 [Member] | ||
Derivative Liability | $ 0 |
Significant Accounting Polici_5
Significant Accounting Policies (Details 1) - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Significant Accounting Policies | ||
Balance, beginning of year | $ 3,845,662 | $ 2,349,471 |
Additions | 124,290 | 368,312 |
Extinguished derivative liability | (1,728,274) | 0 |
Change in fair value of derivative liabilities | (2,241,678) | (376,282) |
Balance, ending of period | $ 0 | $ 2,341,501 |
Significant Accounting Polici_6
Significant Accounting Policies (Details 2) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Jun. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | |
Significant Accounting Policies | |||||
Net income attributable to common shareholders | $ 1,557,319 | ||||
Change in fair value of derivative liabilities | (2,241,678) | $ (376,282) | |||
Gain on extinguishment of debt | $ (1,148,554) | (1,148,554) | |||
Expense attributable to note derivatives | |||||
Interest expense | 216,378 | ||||
Diluted loss attributable to common shareholders | $ (1,616,535) | ||||
Basic shares outstanding | 4,494,649 | ||||
Derivative notes and interest shares | 3,866,301 | ||||
Diluted shares outstanding | 8,360,950 | ||||
Diluted loss per share | $ (0.03) | $ (2.01) | $ (0.19) | $ (3.34) |
Significant Accounting Polici_7
Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Amortization expense | $ 4,795 | $ 4,459 | $ 14,045 | $ 13,110 | |
Future warranty expenses | $ 91,531 | $ 91,531 | $ 91,531 | ||
Common share excluded from diluted earnings per share | 7,193,399 | 7,193,399 | 14,624,579 | 14,624,579 | |
Inventory raw materials | $ 73,094 | $ 73,094 | 48,734 | ||
Inventory in process | 3,953 | 3,953 | 4,843 | ||
Inventory finished goods | 15,870 | 15,870 | $ 12,079 | ||
2021 | 18,200 | ||||
2022 | 18,200 | ||||
2023 | 18,200 | ||||
2024 | 18,200 | ||||
2025 | 18,200 | ||||
Thereafter | 18,200 | ||||
Depreciation expense | 367 | $ 6,493 | 1,722 | $ 20,191 | |
Proceeds for research and development expenses | 28,651 | 34,716 | 89,617 | 92,050 | |
Research and development expenses | 58,465 | 45,289 | 159,277 | 176,849 | |
Royalty revenues | 0 | 0 | |||
License fees revenue | $ 12,500 | $ 12,500 | $ 37,500 | $ 37,500 | |
Estimated useful lives of patents | 17 years | ||||
Leasehold Improvements [Member] | |||||
Property plant and equipment, estimated useful lives | the shorter of their estimated useful lives of 5 years or the related lease term | ||||
Minimum [Member] | |||||
Property and equipment estimated useful life | 3 years | ||||
Maximum [Member] | |||||
Property and equipment estimated useful life | 7 years | ||||
Account receivables [Member] | |||||
Concentration of risk, percentage | 100.00% | 100.00% | |||
Revenue [Member] | |||||
Concentration of risk, percentage | 75.00% | 71.00% |
Accrued Expenses Other (Details
Accrued Expenses Other (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Accrued Expenses Other | ||
Accrued expenses, other | $ 189,278 | $ 185,656 |
Accrued common stock to be issued for financing cost | 120,990 | 0 |
Accrued interest | 898,067 | 1,238,553 |
Accrued warranty costs | 91,531 | 91,531 |
Total accrued Expenses | $ 1,299,866 | $ 1,515,740 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | Oct. 12, 2019 | Jun. 24, 2016 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 |
Accrued interest | $ 1,200 | ||||||
Rent expense | $ 12,198 | $ 12,198 | $ 36,594 | $ 36,594 | |||
Lease term description | The lease term will terminate upon 30 days’ written notice from landlord or 90 days written termination from us. The lease is considered to be short term or month to month | ||||||
Building [Member] | |||||||
Monthly rent expense | $ 4,066 | ||||||
Chief Executive Officer [Member] | |||||||
Debt instrument maturity date | Oct. 12, 2021 | ||||||
Interest expense | 150 | $ 150 | 450 | $ 450 | |||
Interest bearing per year | 10.00% | ||||||
Accrued compensation | $ 2,053,878 | $ 2,053,878 | $ 1,983,639 | ||||
Promissory note | $ 10,000 | ||||||
Loan And Security Agreement [Member] | Patricia Tangredi [Member] | |||||||
Principal amount and interest totaled | $ 3,040,838 | ||||||
Interest rate | 12.00% | ||||||
Senior secured debt, minimum interest payment | $ 2,000 | ||||||
Principal loan amount | $ 150,000 |
Equity Transactions (Details Na
Equity Transactions (Details Narrative) | 3 Months Ended | 6 Months Ended | 9 Months Ended | |
Jun. 30, 2021USD ($)shares | Jun. 30, 2021USD ($)shares | Sep. 30, 2021USD ($)integer$ / sharesshares | Dec. 31, 2020integer$ / sharesshares | |
Common stock par value | $ / shares | $ 0.01 | $ 0.01 | ||
Common stock shares issued, shares | 9,415,425 | 278,757 | ||
Common stock purchase warrants | 2,826,733 | 2,826,733 | ||
Common stock shares issued, amount | $ | $ 1,829,534 | $ 1,829,534 | ||
Common stock purchase warrants, amount | $ | $ 857,600 | $ 857,600 | ||
Common stock shares issued, shares | 2,100,000 | 2,100,000 | ||
Common stock shares issued, amount | $ | $ 567,000 | $ 567,000 | ||
Common stock shares authorized | 1,100,000,000 | 1,100,000,000 | ||
Shares and warrants issued for settlement of debt | 7,036,668 | 7,036,668 | ||
Volatility rate | 315.00% | |||
Expected life | 17 years | |||
Dividend yield | 0.00% | |||
Debt [Member] | ||||
Fair value of warrants | $ | $ 857,600 | |||
Risk free interest rate | 0.05% | |||
Volatility rate | 367.00% | |||
Expected life | 11 years 6 months | |||
Dividend yield | 0.00% | |||
Warrant expiry date | June 30, 2022 | |||
Warrants issued | 2,826,733 | |||
Warrants, per price | $ / shares | $ 0.30 | |||
Note [Member] | ||||
Fair value of warrants | $ | $ 110,000 | |||
Risk free interest rate | 0.84% | |||
Volatility rate | 389.00% | |||
Expected life | 5 years | |||
Dividend yield | 0.00% | |||
Warrant expiry date | September 21, 2026 | |||
Warrants issued | 1,466,666 | |||
Warrants, per price | $ / shares | $ 0.15 | |||
Note amount | $ | $ 220,000 | |||
Warrants [Member] | ||||
Exercise price | $ / shares | $ 0.05 | |||
Common stock shares issued for service | 700,000 | |||
Fair value of warrants | $ | $ 184,457 | |||
Risk free interest rate | 0.06% | |||
Volatility rate | 376.00% | |||
Expected life | 1 year | |||
Dividend yield | 0.00% | |||
Warrant expiry date | May 18, 2022 | |||
Board of Directors [Member] | ||||
Preferred stock shares authorized | 10,000,000 | 10,000,000 | ||
Preferred stock, par value | $ / shares | $ 0.01 | $ 0.01 | ||
Preferred Stock, Series B [Member] | ||||
Preferred stock, shares par value | $ / shares | $ 0.01 | $ 0.01 | ||
Preferred stock shares authorized | 10,000 | 10,000 | ||
Voting right description | equal to 51% of the votes to approve certain corporate actions, including, without limitation, changing the name of the Company and increasing the number of authorized shares | |||
Preferred Stock Undesignated [Member] | ||||
Class A preferred stock shares | 2,000,000 | 2,000,000 | ||
Preferred stock, shares par value | $ / shares | $ 0.01 | $ 0.01 | ||
Preferred stock shares authorized | 7,990,000 | 7,990,000 | ||
Preferred Stock, Series A [Member] | ||||
Preferred stock shares authorized | 2,000,000 | 2,000,000 | ||
Conversion price description | The Conversion Price shall be equal to the 75% of the average closing price for the 30 trading days prior to the election to convert | |||
Per share | $ / shares | $ 1.50 | $ 1.50 | ||
Voting power | 49.00% | |||
Preferred stock, number of votes | integer | 150 | 150 |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Amortization of debt discount | $ 32,557 | $ 101,899 | ||
Forgiveness of debt income | $ 146,685 | $ 0 | 146,685 | 0 |
Fair value of the warrants | $ 110,000 | $ 0 | ||
Risk free interest rate | 0.01% | |||
Dividend yield | 0.00% | |||
Volatility rate | 315.00% | |||
Expected life | 3 years | |||
GS Capital Partners, LLC [Member] | ||||
Maturity date | Sep. 20, 2022 | |||
Original issue discount | $ 20,000 | |||
Debt issuance related cost | 3,000 | |||
Proceeds rom issuance of debt | $ 197,000 | |||
Warrants issued to purchase common shares | 1,466,666 | |||
Warrant exercise price | $ 0.15 | |||
Fair value of the warrants | $ 110,000 | |||
Risk free interest rate | 0.84% | |||
Dividend yield | 0.00% | |||
Volatility rate | 389.00% | |||
Expected life | 5 years | |||
Fixed conversion price | $ 0.10 | |||
Beneficial conversion feature | $ 90,000 | |||
Debt discount | 220,000 | |||
Deferred debt costs | 3,000 | |||
Amortized interest expense | $ 6,721 | |||
Interest rate | 8.00% | |||
August 30, 2021 [Member] | GEX Management, Inc. [Member] | ||||
Maturity date | Feb. 28, 2022 | |||
Common stocl shares issuable | 1,000,000 | |||
Common stocl shares issuable, value | $ 120,990 | |||
Amortization of debt discount | $ 25,836 | $ 25,836 | ||
Interest rate | 10.00% | |||
January 25, 2021 [Member] | Senior Promissory Notes [Member] | ||||
Interest rate | 1.00% | |||
Loan agreement amount | $ 122,340 | |||
Debt instrument, payment terms | If not forgiven, the terms on the note provide for interest at 1% per year and the note mature in 24 months, with 18 monthly payments of $8,146 beginning after the initial 6 month deferral period for payments | |||
June 12, 2020 [Member] | Small Business Administration Loan [Member] | ||||
Interest rate | 3.75% | |||
Loan agreement amount | $ 150,000 | |||
Debt instrument, payment terms | Installment payments, including principal and interest, of $731 monthly, will begin 12 months from the date of the note. The balance of principal and interest will mature 30 years from the date of the note | |||
April 29, 2020 [Member] | Paycheck Protection Program [Member] | ||||
Interest rate | 1.00% | |||
Loan agreement amount | $ 144,750 | |||
Debt instrument, payment terms | If not forgiven, the terms on the note provide for interest at 1% per year and the note mature in 24 months, with 18 monthly payments of $8,146 beginning after the initial 6 month deferral period for payments | |||
Forgiveness of debt income | $ 146,685 | |||
Accrued interest forgiven | $ 1,935 | |||
April 2021 [Member] | JMS Investments of Staten Island [Member] | ||||
Interest rate | 8.50% | |||
Initial investment | $ 376,000 |
Convertible Notes Payable and_3
Convertible Notes Payable and Exchange Program (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Convertible Notes Payable and Exchange Program | ||
Convertible notes payable, bearing interest at 8- 10% | $ 0 | $ 1,453,960 |
Current portion | $ 0 | $ 1,453,960 |
Convertible Notes Payable and_4
Convertible Notes Payable and Exchange Program (Details Narrative) - USD ($) | 6 Months Ended | 9 Months Ended | |||
Jun. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | May 31, 2021 | Dec. 31, 2020 | |
Amortization of deferred debt issue costs | $ 5,848 | ||||
Amortization of debt discount | 101,899 | ||||
Accrued interest expenses | $ 653,454 | 0 | |||
Settlement of debt | $ 1,453,960 | ||||
Warrants issued | 2,826,733 | ||||
Common stock valued | $ 94,154 | $ 2,788 | |||
Derivative liability | 1,728,274 | ||||
Accrued interest expenses | 388,764 | $ 412,291 | |||
Gain on extingushment | $ 1,148,554 | $ 1,148,554 | |||
Warrants valued | $ 857,600 | ||||
2017 June Notes [Member] | |||||
Convertible notes payable | $ 2,107,414 | $ 2,008,812 | |||
Strike price | $ 0.030 | ||||
Common shares issued | 7,036,668 | ||||
Warrants issued | 2,826,733 | ||||
Common stock valued | $ 1,829,534 | ||||
2018 Notes [Member] | |||||
Convertible notes payable | $ 1,453,960 | ||||
Common shares issued | 7,036,668 | ||||
Warrants issued | 3,576,733 | ||||
Derivative liability | $ 1,728,274 | ||||
Accrued interest expenses | $ 653,454 | ||||
Gain on extingushment | 1,148,554 | ||||
Warrants valued | $ 857,600 |
Derivative Liabilities (Details
Derivative Liabilities (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Jun. 30, 2021 | Sep. 30, 2020 | Jun. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | |
Derivative Liabilities | ||||||
Gain on extingushment | $ 1,148,554 | $ 1,148,554 | ||||
Shares and warrants issued for settlement of debt, value | $ 1,829,534 | |||||
Warrants issued | 2,826,733 | |||||
Settlement of debt | $ 1,453,960 | |||||
Warrants valued | 857,600 | |||||
Accrued interest | $ 653,454 | $ 653,454 | ||||
Shares and warrants issued for settlement of debt | 7,036,668 | 7,036,668 | ||||
Change in fair value of derivative liabilities | $ 0 | $ (208,916) | 2,241,678 | $ 376,282 | ||
Non-cash interest expenses | 0 | $ 106,366 | 124,290 | 368,312 | ||
Derivative liability extinguished | $ 1,728,274 | 1,728,274 | $ 0 | |||
Derivative liability | $ 1,728,274 | $ 1,728,274 | ||||
Risk free interest rate | 0.01% | |||||
Volatility rate | 315.00% | |||||
Expected life | 3 years | |||||
Dividend yield | 0.00% |
Commitments and Contingencies_2
Commitments and Contingencies (Details) | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Sum Owned | $ 124,459 |
Old Dominion Freight Line [Member] | |
Sum Owned | $ 13,576 |
Payment Plan | No |
Legal Action | Yes |
SoftinWay[Member] | |
Sum Owned | $ 15,350 |
Payment Plan | Yes |
Legal Action | Yes |
The O-Ring Store [Member] | |
Sum Owned | $ 10,334 |
Payment Plan | No |
Legal Action | Yes |
Power Plant Services [Member] | |
Sum Owned | $ 85,199 |
Payment Plan | No |
Legal Action | Yes |
Commitments and Contingencies_3
Commitments and Contingencies (Details Narrative) - Soex [Member] - October 8, 2021 [Member] | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Attorneys fees | $ 300,568 |
Cost related to defendant | 82,096 |
Total award to defendant | $ 382,664 |
Subsequent Event (Details)
Subsequent Event (Details) - JMS Investments, LLC [Member] | Sep. 30, 2021USD ($) |
November 3, 2021 [Member] | |
Sum Received | $ 100,000 |
November 4, 2021 [Member] | |
Sum Received | 30,000 |
November 2, 2021 [Member] | |
Sum Received | $ 30,000 |
Subsequent Event (Details Narra
Subsequent Event (Details Narrative) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
April 2021 and November 2021 [Member] | ||
Total investment | $ 536,000 | |
Interest rate | 8.50% | |
Chief Executive Officer [Member] | ||
Accrued compensation | $ 2,053,878 | $ 1,983,639 |
Warrant issued description | A Five-year cashless warrant for 5,134,690 shares with a strike price of $.08 will be issued to Employee to reduce the Company’s indebtedness by 75% leaving a balance of $536,000 |