Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Nov. 14, 2017 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | ORIGINCLEAR, INC. | |
Entity Central Index Key | 1,419,793 | |
Trading Symbol | OCLN | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,017 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 99,756,011 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
CURRENT ASSETS | ||
Cash | $ 342,164 | $ 351,321 |
Contracts receivable, less allowance for doubtful accounts of $50,000 and $50,000 respectively | 523,548 | 382,895 |
Inventory | 13,614 | |
Cost in excess of billing | 9,238 | 47,612 |
Work in progress | 84,157 | 86,085 |
Prepaid expenses | 17,991 | 42,128 |
TOTAL CURRENT ASSETS | 990,712 | 910,041 |
NET PROPERTY AND EQUIPMENT | 156,252 | 161,912 |
OTHER ASSETS | ||
Other asset | 19,538 | 19,538 |
Goodwill | 682,145 | 682,145 |
Trademark | 4,467 | 4,467 |
Security deposit | 3,500 | 3,500 |
TOTAL OTHER ASSETS | 709,650 | 709,650 |
TOTAL ASSETS | 1,856,614 | 1,781,603 |
Current Liabilities | ||
Accounts payable and other payable | 830,539 | 480,064 |
Accrued expenses | 847,114 | 715,281 |
Billing in excess of cost | 233,394 | |
Customer deposit | 113,950 | 113,950 |
Warranty reserve | 20,000 | 20,000 |
Loans payable, current portion | 11,090 | |
Derivative liabilities | 10,728,464 | 8,702,083 |
Convertible promissory notes, net of discount of $54,440 and $591,835, respectively | 296,722 | 1,935,233 |
Total Current Liabilities | 13,081,273 | 11,966,611 |
Long Term Liabilities | ||
Loan payable, long term portion | 12,282 | |
Convertible promissory notes, net of discount of $235,268 and $11,429, respectively | 3,080,628 | 1,613,571 |
Total Long Term Liabilities | 3,092,910 | 1,613,571 |
Total Liabilities | 16,174,183 | 13,580,182 |
SHAREHOLDERS' DEFICIT | ||
Common stock, $0.0001 par value, 300,000,000 shares authorized 78,151,781 and 21,428,454 equity shares issued and outstanding, respectively | 7,815 | 2,143 |
Preferred treasury stock, 1,000 and 1,000 shares of Series C outstanding, respectively | ||
Additional paid in capital | 57,564,158 | 51,428,976 |
Accumulated other comprehensive loss | (134) | (92) |
Accumulated deficit | (71,889,409) | (63,229,607) |
TOTAL SHAREHOLDERS' DEFICIT | (14,317,569) | (11,798,579) |
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT | 1,856,614 | 1,781,603 |
Series B Preferred Stock | ||
SHAREHOLDERS' DEFICIT | ||
Preferred stock value | 1 | 1 |
Series C Preferred Stock | ||
SHAREHOLDERS' DEFICIT | ||
Preferred stock value |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Allowance for doubtful accounts | $ 50,000 | $ 50,000 |
Discount on debt | 54,440 | 591,835 |
Net of discount non current | $ 235,268 | $ 11,429 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 25,000,000 | 25,000,000 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, shares issued | 78,151,781 | 21,428,454 |
Common stock, shares outstanding | 78,151,781 | 21,428,454 |
Series B Preferred Stock | ||
Preferred stock, shares issued | 6,666 | 6,666 |
Preferred stock, shares outstanding | 6,666 | 6,666 |
Series C Preferred Stock | ||
Preferred stock, shares issued | 1,000 | 1,000 |
Preferred stock, shares outstanding | 1,000 | 1,000 |
Preferred treasury stock, shares outstanding | 1,000 | 1,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Statement [Abstract] | ||||
Sales | $ 1,112,438 | $ 1,019,919 | $ 2,294,891 | $ 4,321,378 |
Cost of Goods Sold | 949,657 | 574,105 | 2,031,334 | 2,899,507 |
Gross Profit | 162,781 | 445,814 | 263,557 | 1,421,871 |
Operating Expenses | ||||
Selling and marketing expenses | 539,975 | 303,496 | 2,165,213 | 1,419,566 |
General and administrative expenses | 830,444 | 629,455 | 1,842,815 | 1,860,239 |
Research and development | 53,939 | 106,259 | 136,582 | 447,034 |
Depreciation and amortization expense | 12,961 | 11,331 | 39,506 | 33,902 |
Total Operating Expenses | 1,437,319 | 1,050,541 | 4,184,116 | 3,760,741 |
Loss from Operations | (1,274,538) | (604,727) | (3,920,559) | (2,338,870) |
OTHER INCOME (EXPENSE) | ||||
Foreign exchange (loss) | (6) | (6) | ||
Commitment fee | (736,052) | (787,971) | (1,409,655) | (787,971) |
Loss on net change in derivative liability and settlement of debt | (2,693,599) | (7,417,750) | (2,787,138) | (1,959,230) |
Interest expense | (173,448) | (206,164) | (542,450) | (641,977) |
TOTAL OTHER INCOME (EXPENSE) | (3,603,099) | (8,411,891) | (4,739,243) | (3,389,184) |
NET (LOSS) INCOME | $ (4,877,637) | $ (9,016,618) | $ (8,659,802) | $ (5,728,054) |
BASIC AND DILUTED (LOSS) EARNING PER SHARE ATTRIBUTABLE TO SHAREHOLDERS' | $ (0.090) | $ (0.657) | $ (0.222) | $ (0.492) |
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING, BASIC AND DILUTED | 54,334,415 | 13,724,144 | 38,977,842 | 11,644,611 |
Condensed Consolidated Stateme5
Condensed Consolidated Statement of Shareholders' Deficit - 9 months ended Sep. 30, 2017 - USD ($) | Total | Preferred stock | Common stock | Additional Paid-in Capital | Accumulated Other Comprehensive loss | Accumulated Deficit |
Beginning balance at Dec. 31, 2016 | $ (11,798,579) | $ 1 | $ 2,143 | $ 51,428,976 | $ (92) | $ (63,229,607) |
Beginning balance, shares at Dec. 31, 2016 | 7,666 | 21,433,571 | ||||
Common stock issuance for cash | 1,297,750 | $ 1,078 | 1,296,672 | |||
Common stock issuance for cash, shares | 10,775,722 | |||||
Common stock issuance for conversion of debt | 1,234,972 | $ 932 | 1,234,040 | |||
Common stock issuance for conversion of debt, shares | 9,321,555 | |||||
Common stock issuance for settlement of accounts payable | 117,931 | $ 89 | 117,842 | |||
Common stock issuance for settlement of accounts payable, shares | 886,700 | |||||
Common stock issued at fair value for services and commitment fees | 3,418,598 | $ 3,573 | 3,415,025 | |||
Common stock issued at fair value for services and commitment fees, shares | 35,734,233 | |||||
Stock compensation cost | 71,603 | 71,603 | ||||
Other comprehensive loss | (42) | (42) | ||||
Net loss | (8,659,802) | (8,659,802) | ||||
Ending balance at Sep. 30, 2017 | $ (14,317,569) | $ 1 | $ 7,815 | $ 57,564,158 | $ (134) | $ (71,889,409) |
Ending balance, shares at Sep. 30, 2017 | 7,666 | 78,151,781 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (8,659,802) | $ (5,728,054) |
Adjustment to reconcile net loss to net cash used in operating activities | ||
Depreciation and amortization | 39,506 | 33,902 |
Common stock and warrants issued for services | 3,418,598 | 1,787,902 |
Stock option and warrant compensation expense | 71,603 | 155,112 |
Loss on net change in valuation of derivative liability and conversion of debt | 2,787,138 | 1,959,230 |
Debt discount and original issue discount recognized as interest expense | 313,546 | 373,434 |
Change in Assets (Increase) Decrease in: | ||
Contracts receivable | (140,653) | 675,188 |
Cost in excess of billing | 38,374 | (12,954) |
Inventory asset | (13,614) | |
Prepaid expenses | 24,137 | 1,797 |
Work in progress | 1,928 | 518 |
Other asset | (88,548) | |
Change in Liabilities Increase (Decrease) in: | ||
Accounts payable | 468,406 | 299,584 |
Accrued expenses | 121,047 | 257,501 |
Billing in excess of cost | 209,294 | (474,741) |
Deferred income | 24,100 | (150,000) |
NET CASH USED IN OPERATING ACTIVITIES | (1,296,392) | (910,129) |
CASH FLOWS USED FROM INVESTING ACTIVITIES: | ||
Purchase of fixed assets | (33,845) | (5,699) |
CASH USED IN INVESTING ACTIVITIES | (33,845) | (5,699) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Loans payable | 23,372 | |
Proceeds from convertible promissory notes | 125,000 | |
Proceeds for issuance of common stock for cash | 1,297,750 | 963,217 |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 1,321,122 | 1,088,217 |
Foreign currency effect on cash flow | (42) | (23) |
NET (DECREASE) INCREASE IN CASH | (9,157) | 172,366 |
CASH BEGINNING OF PERIOD | 351,321 | 695,295 |
CASH END OF PERIOD | 342,164 | 867,661 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | ||
Interest paid | 1,823 | 2,199 |
Taxes paid | ||
SUPPLEMENTAL DISCLOSURES OF NON CASH TRANSACTIONS | ||
Common stock issued at fair value for conversion of debt and accrued interest | 1,234,972 | 878,040 |
Common stock issued at fair value on settlement of accounts payable | 117,931 | |
Common stock issued at fair value for supplemental shares | 1,409,655 | 787,971 |
Beneficial conversion feature on convertible note | 16,771 | |
Conversion of accounts payable into a convertible note | $ 430,896 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2017 | |
Basis of Presentation [Abstract] | |
BASIS OF PRESENTATION | 1. The accompanying unaudited condensed financial statements of OriginClear, Inc. (the “Company”) (formerly OriginOil, Inc.) have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all normal recurring adjustments considered necessary for a fair presentation have been included. Operating results for the nine months ended September 30, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017. For further information refer to the financial statements and footnotes thereto included in the Company’s Form 10-K for the year ended December 31, 2016. Going Concern The accompanying condensed financial statements have been prepared on a going concern basis of accounting, which contemplates continuity of operations, realization of assets and liabilities and commitments in the normal course of business. The accompanying condensed financial statements do not reflect any adjustments that might result if the Company is unable to continue as a going concern. The Company’s revenue is not yet sufficient to cover its operating expenditures and has negative cash flows from operations, which raise substantial doubt about the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern and appropriateness of using the going concern basis is dependent upon, among other things, additional cash infusion. Management believes the existing shareholders, the prospective new investors, current and future sales will provide the additional cash needed to meet the Company’s obligations as they become due, and will allow the development of its core business operations. No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, it may contain undue restrictions on our operations, in the case of debt financing, or cause substantial dilution for our stockholders, in case of equity financing. |
Summary of Significant Accounti
Summary of Significant Accounting Polices | 9 Months Ended |
Sep. 30, 2017 | |
Summary of Significant Accounting Polices [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICES This summary of significant accounting policies of the Company is presented to assist in understanding the Company’s financial statements. The financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the financial statements. Principles of Consolidation The accompanying consolidated financial statements include the accounts of OriginClear, Inc. and its wholly owned operating subsidiaries, Progressive Water Treatment, Inc., and OriginClear (HK) Company, Ltd. All material intercompany transactions have been eliminated upon consolidation of these entities. Loss per Share Calculations Basic loss per share calculations are computed by dividing income (loss) available to common shareholders by the weighted-average number of common shares available. Diluted earnings per share is computed similar to basic earnings per share except that the denominator is increased to include securities or other contracts to issue common stock that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. The Company has excluded 3,697,495 of stock options, 474,335 warrants, and the shares issuable from convertible debt of $3,667,068 and shares issuable from convertible preferred stock for the nine months ended September 30, 2017, because their impact on the loss per share is anti-dilutive. The Company has excluded 113,916,311 stock options, 17,824,259 warrants, and the shares issuable from convertible debt of $4,214,068 and shares issuable from convertible preferred stock for the for the nine months ended September 30, 2016, because their impact on the earnings per share is anti-dilutive. Work-in-Process The Company recognizes as an asset the accumulated costs for work-in-process on projects expected to be delivered to customers. Work in Process includes the cost price of materials and labor related to the construction of equipment to be sold to customers. Stock-Based Compensation The Company periodically issues stock options and warrants to employees and non-employees in non-capital raising transactions for services and for financing costs. The Company accounts for stock option and warrant grants issued and vesting to employees based on the authoritative guidance provided by the Financial Accounting Standards Board whereas the value of the award is measured on the date of grant and recognized over the vesting period. The Company accounts for stock option and warrant grants issued and vesting to non-employees in accordance with the authoritative guidance of the Financial Accounting Standards Board whereas the value of the stock compensation is based upon the measurement date as determined at either a) the date at which a performance commitment is reached, or b) at the date at which the necessary performance to earn the equity instruments is complete. Non-employee stock-based compensation charges generally are amortized over the vesting period on a straight-line basis. In certain circumstances where there are no future performance requirements by the non-employee, option grants are immediately vested and the total stock-based compensation charge is recorded in the period of the measurement date. Revenue Recognition Equipment sales We recognize revenue upon delivery of equipment, provided that evidence of an arrangement exists, title, and risk of loss have passed to the customer, fees are fixed or determinable, and collection of the related receivable is reasonably assured. Title to the equipment is transferred to the customer once the last payment is received. We record revenue as goods are shipped, and the equipment has been fully accepted by the customer. Generally, we extend credit to our customers and do not require collateral. We do not ship a product until we have a purchase agreement signed by the customer with a payment arrangement. Percentage of completion Revenues and related costs on construction contracts are recognized using the “percentage of completion method” of accounting in accordance with ASC 605-35 – “ Accounting for Performance of Construction-Type and Certain Production Type Contracts”. The asset “Costs in excess of billings” represents revenues recognized in excess of amounts billed on contracts in progress. The liability “Billings in excess of costs” represents billings in excess of revenues recognized on contracts in progress. Assets and liabilities related to long-term contracts are included in current assets and current liabilities in the accompanying balance sheets, as they will be liquidated in the normal course of the contract completion. The cost in excess of billings for the nine months ending September 30, 2017 was $9,238 and at December 31, 2016 was $47,612. The billing in excess of cost for the nine months ending September 30, 2017, was $209,294 and at December 31, 2016 was $0. Revisions in cost and profit estimates during the course of the contract are reflected in the accounting period in which the facts for the revisions become known. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Changes in job performance, job conditions, and estimated profitability, including those arising from contract penalty provisions, and final contract settlements, may result in revisions to costs and income, which are recognized in the period the revisions are determined. Contract receivables are recorded on contracts for amounts currently due based upon progress billings, as well as retention, which are collectible upon completion of the contracts. Accounts payable to material suppliers and subcontractors are recorded for amounts currently due based upon work completed or materials received, as are retention due subcontractors, which are payable upon completion of the contract. General and administrative expenses are charged to operations as incurred and are not allocated to contract costs. Contract Receivable The Company bills its customers in accordance with contractual agreements. The agreements generally require billing to be on a progressive basis as work is completed. Credit is extended based on evaluation of clients financial condition and collateral is not required. The Company maintains an allowance for doubtful accounts for estimated losses that may arise if any customer is unable to make required payments. Management performs a quantitative and qualitative review of the receivables past due from customers on a monthly basis. The Company records an allowance against uncollectible items for each customer after all reasonable means of collection have been exhausted, and the potential for recovery is considered remote. The allowance for doubtful accounts was approximately $50,000 as of September 30, 2017 and December 31, 2016, respectively. The net contract receivable balance was $523,548 and $382,895 at September 30, 2017 and December 31, 2016, respectively. Fair Value of Financial Instruments Fair Value of Financial Instruments, requires disclosure of the fair value information, whether or not recognized in the balance sheet, where it is practicable to estimate that value. As of September 30, 2017, the balances reported for cash, contract receivables, cost in excess of billing, prepaid expenses, accounts payable, billing in excess of cost, and accrued expenses approximate the fair value because of their short maturities. We adopted ASC Topic 820 for financial instruments measured as fair value on a recurring basis. ASC Topic 820 defines fair value, established a framework for measuring fair value in accordance with accounting principles generally accepted in the United States and expands disclosures about fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 established a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). These tiers include: ● Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets; ● Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and ● Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. The following table presents certain investments and liabilities of the Company’s financial assets measured and recorded at fair value on the Company’s balance sheets on a recurring basis and their level within the fair value hierarchy as of September 30, 2017. Total (Level 1) (Level 2) (Level 3) Derivative Liability $ 10,728,464 $ - $ - $ 10,728,464 Total liabilities measured at fair value $ 10,728,464 $ - $ - $ 10,728,464 The following is a reconciliation of the derivative liability for which level 3 inputs were used in determining the approximate fair value: Balance as of January 1, 2017 $ 8,702,083 Fair Value of derivative liabilities issued - Change in derivative liability, excluding loss on settlement of debt 2,026,381 Balance as of September 30, 2017 10,728,464 For purpose of determining the fair market value of the derivative liability, the Company used Binomial lattice formula valuation model. The significant assumptions used in the Binomial lattice formula valuation of the derivative are as follows: 09/30/2017 Risk free interest rate .01% - 1.92 % Stock volatility factor 4.72% - 189.09 % Weighted average expected option life 6 months - 5 years Expected dividend yield None Segment Reporting The Company’s business currently operates in one segment based upon the Company’s organizational structure and the way in which the operations are managed and evaluated. Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-2, which creates ASC Topic 842, “Leases.” This update increases transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This guidance is effective for interim and annual reporting periods beginning after December 15, 2018. We are evaluating what impact, if any, the adoption of this guidance will have on our financial condition, results of operations, cash flows or financial disclosures. In August 2016, the FASB issued ASU No. 2016-15 which amends ASC Topic 230, “Classification of Certain Cash Receipts and Cash Payments.” The amendments in this Update address eight specific cash flow issues with the objective of reducing the existing diversity in practice. The update outlines the classification of specific transactions as either cash inflows or outflows from financing activities, operating activities, investing activities or non-cash activities. This guidance is effective for interim and annual reporting periods beginning after December 15, 2017. We are evaluating what impact, if any, the adoption of this guidance will have on our financial condition, results of operations, cash flows or financial disclosures. In May 2017, FASB issued accounting standards update ASU-2017-09, “Compensation-Stock Compensation” (Topic 718) –Modification Accounting”, to provide clarity and reduce both (1) diversity in practice and (2) cost and complexity when applying the guidance in Topic 718, Compensation-Stock Compensation, to a change to the terms or conditions of a share-based payment award. The amendments in this ASU are effective for all entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted, including adoption in an interim period for public entities for reporting periods for which financial statements have not yet been issued, and all other entities for reporting periods for which financial statements have not yet been made available for issuance. The Company is currently evaluating the impact of the adoption of ASU 2017-09 on the Company’s financial statements. In August 2017, FASB issued accounting standards update ASU-2017-12, “D” (Topic 815) – “Targeted Improvements to Accounting for Hedging Activities”, to require an entity to present the earnings effect of the hedging instrument in the same statement line item in which the earnings effect of the hedged item is reported. The amendments in this update are effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods with the fiscal years beginning after December 15, 2020. Early adoption is permitted in any interim period after issuance of the update. The Company is currently evaluating the impact of the adoption of ASU 2017-12 on the Company’s financial statements. Management reviewed currently issued pronouncements during the period ended September 30, 2017, and does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the accompanying condensed financial statements. |
Capital Stock
Capital Stock | 9 Months Ended |
Sep. 30, 2017 | |
Capital Stock [Abstract] | |
CAPITAL STOCK | 3. CAPITAL STOCK Preferred Stock Series A On March 30, 2017, the Board of Directors of the Company authorized the withdrawal of the Series A preferred stock. As of September 30, 2017, no shares of Series A preferred stock were outstanding. Series B On October 1, 2015, the Company filed a Certificate of Designation for Series B preferred stock with the Secretary of State of Nevada and the shares of Series B preferred stock were issued to the shareholders of Progressive Water Treatment, Inc. in connection with the share exchange agreement. One third (1/3) of the shares received by the holder may be converted into common stock beginning one (1) year after the first date on which a share of Series B Preferred Stock was issued (the “Original Issue Date); one third (1/3) may be converted beginning two (2) years after the Original Issue Date; and the remaining one third (1/3) may be converted beginning three years after the Original Issue Date. The number of shares of common stock issuable for each share of converted Series B preferred stock shall be calculated by dividing the stated value by the market price, the market price shall be the average of the closing trade prices of the twenty-five (25) days prior to the date of the conversion notice. On August 12, 2016, the agreement was amended to include make-good-shares. The conversion price set forth in Section 1.2 of the agreement shall be adjusted to reflect the lower of $1.05 or the price of the Company’s common stock calculated using the average closing prices of the Company’s common stock on the last three (3) trading days prior to the date of conversion, provided, however, if the Average Closing Price is less than $0.35 per share, the adjusted conversion price shall be $0.35 per share. See Note 3. The conversion price is subject to adjustment in the case of reverse splits, stock dividends, reclassifications and the like. In addition, the conversion price is subject to certain full ratchet anti-dilution protection. Accordingly, the preferred stock is valued under the provision of ASC Topic 815, Derivatives and Hedging, because the conversion feature of the preferred stock was not afforded the exemption for conventional convertible instruments due to its variable conversion rate. The Series B preferred stock shall have the rights, preferences and privileges as set forth in the exchange agreement. As of September 30, 2017, there are 6,666 shares of Series B preferred stock outstanding. Series C On March 14, 2017, the Board of Directors authorized the issuance of 1,000 shares of Series C preferred stock, par value $0.0001 per share, to T. Riggs Eckelberry in exchange for his continued employment with the Company. The purchase price of the Series C preferred stock was $0.0001 per share representing a total purchase price of $0.10 for 1,000 shares. Common Stock On April 7, 2017, the Company filed a certificate of amendment to its articles of incorporation with the State of Nevada effectuating a reverse split of the Company’s common stock at a ratio of 1 for 35 (the “Reverse Split”). The Reverse Split became effective in the State of Nevada on April 12, 2017. Unless otherwise indicated, all share amounts, per share data, share prices, exercise prices, and conversion rates set forth in this Quarterly Report and the accompanying unaudited condensed consolidated financial statement have, where applicable been adjusted retroactively to reflect this reverse stock split. On June 30, 2017, the Company filed a certificate of amendment (the “Certificate of Amendment”) to amend Article 3 of its articles of incorporation with the State of Nevada, effectuating a decrease of the number of authorized shares of the Company. Pursuant to the Certificate of Amendment, the Company reduced the number of authorized shares of its common stock to 300,000,000. The Certificate of Amendment became effective upon filing with the State of Nevada on June 30, 2017. The reduction in the number of authorized shares does not affect the shares of the Company’s stock issued and outstanding. Nine months ended September 30, 2017 The Company issued 10,775,722 shares of common stock through private placements at prices of $0.05 to $0.175 per share for cash in the amount of $1,297,750. The Company issued 9,321,555 shares of common stock for the settlement of convertible promissory notes in an aggregate principal in the amount of $485,000, plus interest in the amount of $107,145, with an aggregate fair value loss on settlement of $732,826, based upon conversion prices of $0.0651 to $0.2205. The Company issued 886,700 shares of common stock for the settlement of accounts payable with a fair value of $90,000, with a fair value loss on settlement of $27,931. The Company issued 35,734,233 shares of common stock for services at fair value of $3,418,598. |
Convertible Promissory Notes
Convertible Promissory Notes | 9 Months Ended |
Sep. 30, 2017 | |
Convertible Promissory Notes [Abstract] | |
CONVERTIBLE PROMISSORY NOTES | 4. CONVERTIBLE PROMISSORY NOTES As of September 30, 2017, the outstanding convertible promissory notes are summarized as follows: Convertible Promissory Notes $ 3,667,068 Less debt discount 289,718 Convertible Promissory Notes, net of discount $ 3,377,350 Less current portion 296,722 Long term portion $ 3,080,628 At September 30, 2017, the $3,667,068 in convertible promissory notes has a remaining debt discount of $289,718, leaving a net balance of $3,377,350. On various dates, the Company entered into unsecured convertible notes (the “Convertible Promissory Notes” or “Notes”), that matured during the period and were extended sixty (60) days from the effective date of each Note. The Notes bear interest at 10% per annum. The Notes may be converted into shares of the Company’s common stock at conversion prices ranging from the lesser of $2.10 to $4.90 (subject to adjustment for stock splits, dividends, combinations and other similar transactions) or 50% of the lowest trade price on any trade day following issuance of the Notes. In addition, for as long as the Notes or other convertible notes in effect between the purchaser and the Company are outstanding, if the Company issues any security with terms more favorable than the terms of the Notes or such other convertible notes or a term was not similarly provided to the purchaser of the Notes or such other convertible notes, then such more favorable or additional term shall, at the purchaser’s option, become part of the Notes and such other convertible notes. The conversion feature of the Notes was considered a derivative in accordance with current accounting guidelines because of the reset conversion features of the Notes. During the nine months ended September 30, 2017, the Company issued 9,321,555 shares of common stock, upon conversion of $395,000 in principal, plus accrued interest of $107,145, with a fair value loss on settlement of $732,826. As of September 30, 2017, the Notes had an aggregate remaining balance of $1,560,000. As of September 30, 2017, unsecured convertible promissory notes (the “OID Notes”) had an aggregate remaining principal balance of $184,124, plus accrued interest of $13,334 were amended. The OID Notes included an original issue discount and one time interest, which has been fully amortized. The OID Notes were extended through December 31, 2017. The OID Notes were convertible into shares of the Company’s common stock at a conversion price initially of $15.31. After the amendment, the conversion price changed to the lesser of $2.80 per share, or b) fifty percent (50%) of the lowest trade price of common stock recorded since the original effective date of this note, or c) the lowest effective price per share granted to any person or entity after the effective date. The conversion feature of the notes was considered a derivative in accordance with current accounting guidelines, because of the reset conversion features of the notes. The Company entered into various, unsecured convertible notes (the “Notes”), on various dates ending on May 19, 2016. The Notes matured and were extended from the date of each tranche through maturity dates ending on May 19, 2020. The Notes bear interest at 10% per annum. The Notes may be converted into shares of the Company’s common stock at conversion prices ranging from the lesser of $0.70 to $2.80 (subject to adjustment for stock splits, dividends, combinations and other similar transactions) or 50% of the lowest trade price on any trade day following issuance of the Notes. The conversion feature of the Notes was considered a derivative in accordance with current accounting guidelines because of the reset conversion features of the Notes. The remaining balance of the note as of September 30, 2017, was $1,325,000. The Company recorded amortization of debt discount, which was recognized as interest expense in the amount of $11,479 during the nine months ended September 30, 2017. The Company issued a convertible note in exchange for an accounts payable in the amount of $432,048, which could be converted into shares of the Company’s common stock after December 31, 2015. The note was accounted for under ASC 470, whereby, a beneficial conversion feature was recorded at time of issuance. The note did not meet the criteria of a derivative, and was accounted for as a beneficial conversion feature, which was amortized over the life of the note and recognized as interest expense in the financial statements. On January 1, 2016, the note met the criteria of a derivative and was accounted for under ASC 815. The note has zero stated interest rate, and the conversion price shall be equal to 75% of the average three lowest last sale prices traded during the 25 trading days immediately prior to conversion. As of December 31, 2016, the remaining balance was $257,048. During the nine months ended September 30, 2017, the Company issued 886,700 shares of common stock upon conversion of principal in the amount of $90,000, with a fair value loss on settlement of $27,931. As of September 30, 2017, the Note had a remaining balance of $167,048. The Company recorded amortization of debt discount, which was recognized as interest expense in the amount of $161,574 during the nine months ended September 30, 2017. The Company issued a convertible note in exchange for an accounts payable in the amount of $430,896, which could be converted into shares of the Company’s common stock after September 15, 2016. The note was accounted for under ASC 470, whereby, a beneficial conversion feature was recorded at time of issuance. On September 15, 2016, the note met the criteria of a derivative and was accounted for under ASC 815. The note has zero stated interest rate, and the conversion price shall be equal to 75% of the average three lowest last sale prices traded during the 25 trading days immediately prior to conversion. The note did not meet the criteria of a derivative at the time it was entered into, and was accounted for as a beneficial conversion feature, which was amortized over the life of the note and recognized as interest expense in the financial statements. The conversion feature of the Note was considered a derivative in accordance with current accounting guidelines because of the reset conversion feature of the Note. The Company recorded amortization of debt discount, which was recognized as interest expense in the amount of $140,543 during the nine months ended September 30, 2017. We evaluated the financing transactions in accordance with ASC Topic 815, Derivatives and Hedging, and determined that the conversion feature of the convertible promissory notes was not afforded the exemption for conventional convertible instruments due to its variable conversion rate. The note has no explicit limit on the number of shares issuable so they did not meet the conditions set forth in current accounting standards for equity classification. The Company elected to recognize the note under paragraph 815-15-25-4, whereby, there would be a separation into a host contract and derivative instrument. The Company elected to initially and subsequently measure the note in its entirety at fair value, with changes in fair value recognized in earnings. The Company recorded a derivative liability representing the imputed interest associated with the embedded derivative. The derivative liability is adjusted periodically according to the stock price fluctuations. The derivative liability recognized in the financial statements as of September 30, 2017 was $10,728,464. |
Options and Warrants
Options and Warrants | 9 Months Ended |
Sep. 30, 2017 | |
Options and Warrants [Abstract] | |
OPTIONS AND WARRANTS | 5. OPTIONS AND WARRANTS Options On May 25, 2012, the Board of Directors adopted a new OriginOil, Inc. 2012 Incentive Stock Option Plan (the “2012 Plan”) for the purposes of granting stock options to its employees and others providing services to the Company, which reserves and sets aside for the granting of options for 28,571 shares of common stock. Options granted under these plans may be either incentive options or nonqualified options and shall be administered by the Company’s Board of Directors. Each option shall be exercisable to the nearest whole share, in installments or otherwise, as the respective option agreements may provide. Notwithstanding any other provision of the 2012 Plan or of any option agreement, each option shall expire on the date specified in the option agreement, which date shall not be later than the tenth (10th) anniversary from the effective date of grant. On June 14, 2013, the Board of Directors adopted a new OriginOil, Inc. 2013 Incentive Stock Option Plan (the “2013 Plan”) for the purposes of granting stock options to its employees and others providing services to the Company, which reserves and sets aside for the granting of options for 114,286 shares of common stock. Options granted under the Plan may be either incentive options or nonqualified options and shall be administered by the Company’s Board of Directors. Each option shall state the number of shares to which it pertains. The exercise price will be determined by the holders’ percentage owned as follows: If the holder owns more than 10% of the total combined voting power or value of all classes of stock of the Company, then the exercise price will be no less than 110% of the fair market value of the stock as of the date of grant; if the person is not a 10% holder, then the exercise price will be no less than 100% of the fair market value of the stock as of the date of grant. Notwithstanding any other provision of the 2013 Plan or of any option agreement, each option shall expire on the date specified in the option agreement, which date shall not be later than the tenth (10th) anniversary from the date of grant. If the status of an employee terminates for any reason other than disability or death, then the optionee or their representative shall have the right to exercise the portion of any options which were exercisable as of the date of such termination, in whole or in part, not less than 30 days nor more than three (3) months after such termination. On September 29, 2015, the Board of Directors adopted a new OriginClear, Inc. 2015 Equity Incentive Stock Option Plan (the “2015 Plan”) for the purposes of granting stock options to its employees and others providing services to the Company, which reserves and sets aside for the granting of options for 3,315,714 shares of common stock. On October 2, 2015, the Board of Directors amended the number of shares to reserve for issuance to 4,571,429 shares. Options granted under these plans may be either incentive options or nonqualified options and shall be administered by the Company’s Board of Directors. Each option shall be exercisable to the nearest whole share, in installments or otherwise, as the respective option agreements may provide. Notwithstanding any other provision of the 2015 Plan or of any option agreement, each option shall expire on the date specified in the option agreement, which date shall not be later than the fifth (5th) anniversary from the effective date of grant. During the year ended December 31, 2016, the Company granted 31,429 shares of incentive stock options to employees, and 428,571 shares of non-statutory options to consultants. Each option shall be exercisable to the nearest whole share, in installments or otherwise, as the respective option agreements may provide. The stock options mature on March 29, 2021 and October 17, 2021, at prices of $0.29 and $1.31. With respect to Non-Statutory Options granted to employees, directors or consultants, the Board of Directors or Committee of the Board of Directors may specify such period for exercise that the option shall automatically terminate following the termination of employment or services as to shares covered by the option as the Board of Directors or Committee of the Board of Directors deems reasonable and appropriate. A summary of the Company’s stock option activity and related information follows: September 30, 2017 Weighted Number of average exercise Options price Outstanding, beginning of period 3,697,495 $ 1.505 Granted - - Exercised - - Forfeited/Expired - - Outstanding, end of period 3,697,495 $ 1.505 Exercisable at the end of the period 2,682,644 $ 1.035 Weighted average fair value of options granted during the period $ - The weighted average remaining contractual life of options outstanding issued under the 2009 Plan, 2012 Plan, and 2013 Plan as of September 30, 2017 was as follows: Weighted Average Stock Stock Remaining Exercisable Options Options Contractual Prices Outstanding Exercisable Life (years) $ 6.65 - 147.00 52,276 50,401 4.84 - 7.02 $ 10.15 - 15.40 32,362 32,362 5.96 $ 1.31 3,612,857 2,599,881 3.22 - 4.05 3,697,495 2,682,644 Stock-based compensation expense recognized during the year is based on the value of the portion of stock-based payment awards that is ultimately expected to vest. Stock-based compensation expense recognized in the financial statements of operations during the nine months ended September 30, 2017 and 2016 were $71,603 and $155,112, respectively. As of September 30, 2017, there was no intrinsic value with regards to the outstanding options. Restricted Stock to CEO On May 12, 2016, the Company entered into a Restricted Stock Grant Agreement (the “RSGA”) with its Chief Executive Officer, Riggs Eckelberry, to create management incentives to improve the economic performance of the Company and to increase its value and stock price. All shares issuable under the RSGA are performance based shares and none have yet vested nor have any been issued. The RSGA provides for the issuance of up to 1,714,286 shares of the Company’s common stock to the Employees provided certain milestones are met in certain stages; a) If the Company’s consolidated gross revenue, calculated in accordance with generally accepted accounting principles, consistently applied, equals or exceeds $15,000,000 for the trailing twelve month period as reported in the Company’s quarterly or annual financial statements, the Company will issue up to 857,143 shares of its common stock; b) If the Company’s consolidated operating profit ( Operating Profit = Operating Revenue - Cost of Goods Sold - Operating Expenses - Depreciation & Amortization), On August 10, 2016, the Company entered into a Restricted Stock Grant Agreement (the “August RSGA”) with its Chief Executive Officer, Riggs Eckelberry, to create management incentives to improve the economic performance of the Company and to increase its value and stock price. All shares issuable under the August RSGA are performance based shares and none have yet vested nor have any been issued. The August RSGA provides for the issuance of up to 1,714,286 shares of the Company’s common stock to the CEO provided certain milestones are met in certain stages; a) If the Company’s consolidated gross revenue, calculated in accordance with generally accepted accounting principles, consistently applied, equals or exceeds $15,000,000 for the trailing twelve month period, the Company will issue up to 857,143 shares of its common stock; b) If the Company’s consolidated operating profit ( Operating Profit = Operating Revenue - Cost of Goods Sold - Operating Expenses - Depreciation & Amortization), Restricted Stock to Employees and Consultants On May 12, 2016, the Company entered into a Restricted Stock Grant Agreement (the “First Employee RSGA”) with an employee, to create management incentives to improve the economic performance of the Company and to increase its value and stock price. All shares issuable under the First Employee RSGA are performance based shares and none have yet vested nor have any been issued. The First Employee RSGA provides for the issuance of up to 857,143 shares of the Company’s common stock to the employee provided certain milestones are met in certain stages; a) If the Company’s consolidated gross revenue, calculated in accordance with generally accepted accounting principles, consistently applied, equals or exceeds $15,000,000 for the trailing twelve month period as reported in the Company’s quarterly or annual financial statements, the Company will issue up to 428,571 shares of its common stock; b) If the Company’s consolidated operating profit ( Operating Profit = Operating Revenue - Cost of Goods Sold - Operating Expenses - Depreciation & Amortization), On May 12, 2016, the Company entered into a Restricted Stock Grant Agreement (the “Second Employee RSGA”) with an employee, to create management incentives to improve the economic performance of the Company and to increase its value and stock price. All shares issuable under the Second Employee RSGA are performance based shares and none have yet vested nor have any been issued. The Second Employee RSGA provides for the issuance of up to 571,429 shares of the Company’s common stock to the employee provided certain milestones are met in certain stages; a) If the Company’s consolidated gross revenue, calculated in accordance with generally accepted accounting principles, consistently applied, equals or exceeds $15,000,000 for the trailing twelve month period as reported in the Company’s quarterly or annual financial statements, the Company will issue up to 285,714 shares of its common stock; b) If the Company’s consolidated operating profit ( Operating Profit = Operating Revenue - Cost of Goods Sold - Operating Expenses - Depreciation & Amortization), On August 10, 2016, the Company entered into a Restricted Stock Grant Agreement (the “Consultants RSGA”) with two of its’ consultants, to create management incentives to improve the economic performance of the Company and to increase its value and stock price. All shares issuable under the Consultants RSGA are performance based shares and none have yet vested nor have any been issued. The Consultants RSGA provides to each of the consultants the issuance of up to 285,714 shares of the Company’s common stock provided certain milestones are met in certain stages; a) If the Company’s consolidated gross revenue, calculated in accordance with generally accepted accounting principles, consistently applied, equals or exceeds $15,000,000 for the trailing twelve month period, the Company will issue to each of the consultants up to 142,857 shares of its common stock; b) If the Company’s consolidated operating profit ( Operating Profit = Operating Revenue - Cost of Goods Sold - Operating Expenses - Depreciation & Amortization), Warrants During the nine months ended September 30, 2017, the Company issued 22,825,000 purchase warrants to prospective investors in connection with a private offering pursuant to Section 4(2) of the Securities Act of 1933, as amended, Rule 506 promulgated under Regulation D of the Securities Act and Regulation S of the Securities Act. A summary of the Company’s warrant activity and related information follows for the nine months ended September 30, 2017: September 30, 2017 Weighted Number average of exercise Warrants price Outstanding-beginning of the period 506,026 $ 5.25 Granted 22,825,000 $ 0.02 Exercised - - Forfeited (27,296 ) $ (22.37 ) Outstanding - end of the period 23,303,730 $ 0.13 At September 30, 2017, the weighted average remaining contractual life of warrants outstanding: Weighted Average Remaining Exercisable Warrants Warrants Contractual Prices Outstanding Exercisable Life (years) $ 5.25 - 22.75 461,537 461,537 0.24 - 0.70 $ 0.35 - 0.12 22,825,000 22,825,000 0.67 – 1.17 $ 31.50 2,858 2,858 5.13 $ 8.75 - 22.75 14,335 14,335 0.05 – 0.97 23,303,730 23,303,730 At September 30, 2017, the aggregate intrinsic value of the warrants outstanding was $253,930. |
Foreign Subsidiary
Foreign Subsidiary | 9 Months Ended |
Sep. 30, 2017 | |
Foreign Subsidiary [Abstract] | |
FOREIGN SUBSIDIARY | 6. FOREIGN SUBSIDIARY On December 31, 2014, the Company formed a wholly owned subsidiary, OriginClear (HK) Company, Ltd (OCHK), in Hong Kong, China. The Company has granted OCHK a master license for the People’s Republic of China, and a non-exclusive license for the rest of Asia. In turn, OCHK is expected to license regional joint ventures for the commercial development of EWS:AOx Technology. A research and manufacturing center are also planned. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 7. COMMITMENTS AND CONTINGENCIES Operating Lease – Related Party The Company entered into a month-to-month lease agreement with a shareholder of the Company for office space in McKinney, Texas at a base rent of $4,750 per month. Warranty Reserve Generally, a PWT project is guaranteed against defects in material and workmanship for one year from the date of completion, while certain areas of construction and materials may have guarantees extending beyond one year. The Company has various insurance policies relating to the guarantee of completed work, which in the opinion of management will adequately cover any potential claims. A warranty reserve has been provided under PWT based on the opinion of management and based on Company history in the amount of $20,000 as of September 30, 2017. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 8. SUBSEQUENT EVENTS Management has evaluated subsequent events according to the requirements of ASC TOPIC 855 and has determined that there are the following subsequent events: On October 3, 2017, a holder of Series B Preferred Stock converted 3,333 shares of the Company’s Series B Preferred Stock into an aggregate of 1,428,429 shares of the Company’s common stock. The shares of common stock issued included 476,143 shares issued upon conversion of the 3,333 shares of Series B Preferred Stock at $1.05 per share and 952,286 shares as a one-time make good issuance as per the Certificate of Designation of Series B Preferred Stock and agreement between the Company and the holder. As previously reported, the Company has commenced an offering under Regulation 506c of Regulation D (the “Private Placement”) of the Securities Act of 1933, as amended (the “Securities Act”) pursuant to which the Company shall sell units of its securities (the “Units”) with each Unit consisting of (i) one restricted share of its common stock, (ii) a Class A Warrant to purchase one share of its common stock, (iii) a Class B Warrant to purchase one share of its common stock, (iv) a Class C Warrant to purchase one share of its common stock and (v) a Class D Warrant to purchase one share of its common stock to qualified investors. Between October 12, 2017 and November 13, 2017, the Company sold, in the Private Placement, an aggregate of 11,100,000 shares of its common stock to accredited investors for an aggregate consideration of $277,500. On October 20, 2017, holders of convertible promissory notes converted an aggregate principal and interest amount of $31,410 into an aggregate of 2,052,968 shares of the Company’s common stock. In connection with certain one-time make good agreements, between October 2, 2017 and October 31, 2017, the Company issued an aggregate of 1,342,185 shares of its common stock to certain holders of its common stock. On November 10, 2017, the Company entered into a Restricted Stock Grant Agreement (the “RSGA”) with Jean Louis Kindler, the Company’s Chief Commercial Officer and Director, to create management incentives to improve the economic performance of the Company and to increase its value and stock price. The RSGA provides for the issuance of up to 2,000,000 shares of the Company’s common stock provided certain milestones are met in certain stages. All shares issuable under the RSGA are performance based shares and none have yet vested nor have any been issued. Between October 31, 2017 and November 13, 2017, the Company issued to consultants an aggregate of 5,680,648 shares of the Company’s common stock in lieu of cash consideration. |
Summary of Significant Accoun15
Summary of Significant Accounting Polices (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Summary of Significant Accounting Polices [Abstract] | |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of OriginClear, Inc. and its wholly owned operating subsidiaries, Progressive Water Treatment, Inc., and OriginClear (HK) Company, Ltd. All material intercompany transactions have been eliminated upon consolidation of these entities. |
Loss per Share Calculations | Loss per Share Calculations Basic loss per share calculations are computed by dividing income (loss) available to common shareholders by the weighted-average number of common shares available. Diluted earnings per share is computed similar to basic earnings per share except that the denominator is increased to include securities or other contracts to issue common stock that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. The Company has excluded 3,697,495 of stock options, 474,335 warrants, and the shares issuable from convertible debt of $3,667,068 and shares issuable from convertible preferred stock for the nine months ended September 30, 2017, because their impact on the loss per share is anti-dilutive. The Company has excluded 113,916,311 stock options, 17,824,259 warrants, and the shares issuable from convertible debt of $4,214,068 and shares issuable from convertible preferred stock for the for the nine months ended September 30, 2016, because their impact on the earnings per share is anti-dilutive. |
Work-in-Process | Work-in-Process The Company recognizes as an asset the accumulated costs for work-in-process on projects expected to be delivered to customers. Work in Process includes the cost price of materials and labor related to the construction of equipment to be sold to customers. |
Stock-Based Compensation | Stock-Based Compensation The Company periodically issues stock options and warrants to employees and non-employees in non-capital raising transactions for services and for financing costs. The Company accounts for stock option and warrant grants issued and vesting to employees based on the authoritative guidance provided by the Financial Accounting Standards Board whereas the value of the award is measured on the date of grant and recognized over the vesting period. The Company accounts for stock option and warrant grants issued and vesting to non-employees in accordance with the authoritative guidance of the Financial Accounting Standards Board whereas the value of the stock compensation is based upon the measurement date as determined at either a) the date at which a performance commitment is reached, or b) at the date at which the necessary performance to earn the equity instruments is complete. Non-employee stock-based compensation charges generally are amortized over the vesting period on a straight-line basis. In certain circumstances where there are no future performance requirements by the non-employee, option grants are immediately vested and the total stock-based compensation charge is recorded in the period of the measurement date. |
Revenue Recognition | Revenue Recognition Equipment sales We recognize revenue upon delivery of equipment, provided that evidence of an arrangement exists, title, and risk of loss have passed to the customer, fees are fixed or determinable, and collection of the related receivable is reasonably assured. Title to the equipment is transferred to the customer once the last payment is received. We record revenue as goods are shipped, and the equipment has been fully accepted by the customer. Generally, we extend credit to our customers and do not require collateral. We do not ship a product until we have a purchase agreement signed by the customer with a payment arrangement. Percentage of completion Revenues and related costs on construction contracts are recognized using the “percentage of completion method” of accounting in accordance with ASC 605-35 – “ Accounting for Performance of Construction-Type and Certain Production Type Contracts”. The asset “Costs in excess of billings” represents revenues recognized in excess of amounts billed on contracts in progress. The liability “Billings in excess of costs” represents billings in excess of revenues recognized on contracts in progress. Assets and liabilities related to long-term contracts are included in current assets and current liabilities in the accompanying balance sheets, as they will be liquidated in the normal course of the contract completion. The cost in excess of billings for the nine months ending September 30, 2017 was $9,238 and at December 31, 2016 was $47,612. The billing in excess of cost for the nine months ending September 30, 2017, was $209,294 and at December 31, 2016 was $0. Revisions in cost and profit estimates during the course of the contract are reflected in the accounting period in which the facts for the revisions become known. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Changes in job performance, job conditions, and estimated profitability, including those arising from contract penalty provisions, and final contract settlements, may result in revisions to costs and income, which are recognized in the period the revisions are determined. Contract receivables are recorded on contracts for amounts currently due based upon progress billings, as well as retention, which are collectible upon completion of the contracts. Accounts payable to material suppliers and subcontractors are recorded for amounts currently due based upon work completed or materials received, as are retention due subcontractors, which are payable upon completion of the contract. General and administrative expenses are charged to operations as incurred and are not allocated to contract costs. |
Contract Receivable | Contract Receivable The Company bills its customers in accordance with contractual agreements. The agreements generally require billing to be on a progressive basis as work is completed. Credit is extended based on evaluation of clients financial condition and collateral is not required. The Company maintains an allowance for doubtful accounts for estimated losses that may arise if any customer is unable to make required payments. Management performs a quantitative and qualitative review of the receivables past due from customers on a monthly basis. The Company records an allowance against uncollectible items for each customer after all reasonable means of collection have been exhausted, and the potential for recovery is considered remote. The allowance for doubtful accounts was approximately $50,000 as of September 30, 2017 and December 31, 2016, respectively. The net contract receivable balance was $523,548 and $382,895 at September 30, 2017 and December 31, 2016, respectively. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair Value of Financial Instruments, requires disclosure of the fair value information, whether or not recognized in the balance sheet, where it is practicable to estimate that value. As of September 30, 2017, the balances reported for cash, contract receivables, cost in excess of billing, prepaid expenses, accounts payable, billing in excess of cost, and accrued expenses approximate the fair value because of their short maturities. We adopted ASC Topic 820 for financial instruments measured as fair value on a recurring basis. ASC Topic 820 defines fair value, established a framework for measuring fair value in accordance with accounting principles generally accepted in the United States and expands disclosures about fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 established a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). These tiers include: ● Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets; ● Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and ● Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. The following table presents certain investments and liabilities of the Company’s financial assets measured and recorded at fair value on the Company’s balance sheets on a recurring basis and their level within the fair value hierarchy as of September 30, 2017. Total (Level 1) (Level 2) (Level 3) Derivative Liability $ 10,728,464 $ - $ - $ 10,728,464 Total liabilities measured at fair value $ 10,728,464 $ - $ - $ 10,728,464 The following is a reconciliation of the derivative liability for which level 3 inputs were used in determining the approximate fair value: Balance as of January 1, 2017 $ 8,702,083 Fair Value of derivative liabilities issued - Change in derivative liability, excluding loss on settlement of debt 2,026,381 Balance as of September 30, 2017 10,728,464 For purpose of determining the fair market value of the derivative liability, the Company used Binomial lattice formula valuation model. The significant assumptions used in the Binomial lattice formula valuation of the derivative are as follows: 09/30/2017 Risk free interest rate .01% - 1.92 % Stock volatility factor 4.72% - 189.09 % Weighted average expected option life 6 months - 5 years Expected dividend yield None |
Segment Reporting | Segment Reporting The Company’s business currently operates in one segment based upon the Company’s organizational structure and the way in which the operations are managed and evaluated. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-2, which creates ASC Topic 842, “Leases.” This update increases transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This guidance is effective for interim and annual reporting periods beginning after December 15, 2018. We are evaluating what impact, if any, the adoption of this guidance will have on our financial condition, results of operations, cash flows or financial disclosures. In August 2016, the FASB issued ASU No. 2016-15 which amends ASC Topic 230, “Classification of Certain Cash Receipts and Cash Payments.” The amendments in this Update address eight specific cash flow issues with the objective of reducing the existing diversity in practice. The update outlines the classification of specific transactions as either cash inflows or outflows from financing activities, operating activities, investing activities or non-cash activities. This guidance is effective for interim and annual reporting periods beginning after December 15, 2017. We are evaluating what impact, if any, the adoption of this guidance will have on our financial condition, results of operations, cash flows or financial disclosures. In May 2017, FASB issued accounting standards update ASU-2017-09, “Compensation-Stock Compensation” (Topic 718) –Modification Accounting”, to provide clarity and reduce both (1) diversity in practice and (2) cost and complexity when applying the guidance in Topic 718, Compensation-Stock Compensation, to a change to the terms or conditions of a share-based payment award. The amendments in this ASU are effective for all entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted, including adoption in an interim period for public entities for reporting periods for which financial statements have not yet been issued, and all other entities for reporting periods for which financial statements have not yet been made available for issuance. The Company is currently evaluating the impact of the adoption of ASU 2017-09 on the Company’s financial statements. In August 2017, FASB issued accounting standards update ASU-2017-12, “D” (Topic 815) – “Targeted Improvements to Accounting for Hedging Activities”, to require an entity to present the earnings effect of the hedging instrument in the same statement line item in which the earnings effect of the hedged item is reported. The amendments in this update are effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods with the fiscal years beginning after December 15, 2020. Early adoption is permitted in any interim period after issuance of the update. The Company is currently evaluating the impact of the adoption of ASU 2017-12 on the Company’s financial statements. Management reviewed currently issued pronouncements during the period ended September 30, 2017, and does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the accompanying condensed financial statements. |
Summary of Significant Accoun16
Summary of Significant Accounting Polices (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Summary of Significant Accounting Polices [Abstract] | |
Schedule of fair value of financial instruments | Total (Level 1) (Level 2) (Level 3) Derivative Liability $ 10,728,464 $ - $ - $ 10,728,464 Total liabilities measured at fair value $ 10,728,464 $ - $ - $ 10,728,464 |
Schedule of reconciliation of the derivative liability for which level 3 inputs | Balance as of January 1, 2017 $ 8,702,083 Fair Value of derivative liabilities issued - Change in derivative liability, excluding loss on settlement of debt 2,026,381 Balance as of September 30, 2017 10,728,464 |
Schedule of fair market value of derivative liability assumptions | 09/30/2017 Risk free interest rate .01% - 1.92 % Stock volatility factor 4.72% - 189.09 % Weighted average expected option life 6 months - 5 years Expected dividend yield None |
Convertible Promissory Notes (T
Convertible Promissory Notes (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Convertible Promissory Notes [Abstract] | |
Schedule of outstanding convertible promissory notes | Convertible Promissory Notes $ 3,667,068 Less debt discount 289,718 Convertible Promissory Notes, net of discount $ 3,377,350 Less current portion 296,722 Long term portion $ 3,080,628 |
Options and Warrants (Tables)
Options and Warrants (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Options and Warrants [Abstract] | |
Schedule of Company's stock option activity and related information | September 30, 2017 Weighted Number of average exercise Options price Outstanding, beginning of period 3,697,495 $ 1.505 Granted - - Exercised - - Forfeited/Expired - - Outstanding, end of period 3,697,495 $ 1.505 Exercisable at the end of the period 2,682,644 $ 1.035 Weighted average fair value of options granted during the period $ - |
Schedule of weighted average remaining contractual life of options outstanding issued under 2009 Plan, 2012 Plan, and 2013 Plan | Weighted Average Stock Stock Remaining Exercisable Options Options Contractual Prices Outstanding Exercisable Life (years) $ 6.65 - 147.00 52,276 50,401 4.84 - 7.02 $ 10.15 - 15.40 32,362 32,362 5.96 $ 1.31 3,612,857 2,599,881 3.22 - 4.05 3,697,495 2,682,644 |
Schedule of Company's warrant activity and related information | September 30, 2017 Weighted Number average of exercise Warrants price Outstanding-beginning of the period 506,026 $ 5.25 Granted 22,825,000 $ 0.02 Exercised - - Forfeited (27,296 ) $ (22.37 ) Outstanding - end of the period 23,303,730 $ 0.13 |
Schedule of weighted average remaining contractual life of warrants outstanding | Weighted Average Remaining Exercisable Warrants Warrants Contractual Prices Outstanding Exercisable Life (years) $ 5.25 - 22.75 461,537 461,537 0.24 - 0.70 $ 0.35 - 0.12 22,825,000 22,825,000 0.67 – 1.17 $ 31.50 2,858 2,858 5.13 $ 8.75 - 22.75 14,335 14,335 0.05 – 0.97 23,303,730 23,303,730 |
Summary of Significant Accoun19
Summary of Significant Accounting Polices (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Schedule of fair value of financial instruments | ||
Derivative Liability | $ 10,728,464 | $ 8,702,083 |
Total liabilities measured at fair value | 10,728,464 | |
(Level 1) [Member] | ||
Schedule of fair value of financial instruments | ||
Derivative Liability | ||
Total liabilities measured at fair value | ||
(Level 2) [Member] | ||
Schedule of fair value of financial instruments | ||
Derivative Liability | ||
Total liabilities measured at fair value | ||
(Level 3) [Member] | ||
Schedule of fair value of financial instruments | ||
Derivative Liability | 10,728,464 | |
Total liabilities measured at fair value | $ 10,728,464 |
Summary of Significant Accoun20
Summary of Significant Accounting Polices (Details 1) - Level 3 Inputs [Member] | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Schedule of reconciliation of the derivative liability for which level 3 inputs | |
Balance as of January 1, 2017 | $ 8,702,083 |
Fair Value of derivative liabilities issued | |
Change in derivative liability, excluding loss on settlement of debt | 2,026,381 |
Balance as of September 30, 2017 | $ 10,728,464 |
Summary of Significant Accoun21
Summary of Significant Accounting Polices (Details 2) | 9 Months Ended |
Sep. 30, 2017 | |
Schedule of fair market value of derivative liability assumptions | |
Expected dividend yield | |
Minimum [Member] | |
Schedule of fair market value of derivative liability assumptions | |
Risk free interest rate | 0.01% |
Stock volatility factor | 4.72% |
Weighted average expected option life | 6 months |
Maximum [Member] | |
Schedule of fair market value of derivative liability assumptions | |
Risk free interest rate | 1.92% |
Stock volatility factor | 189.09% |
Weighted average expected option life | 5 years |
Summary of Significant Accoun22
Summary of Significant Accounting Polices (Details Textual) | 9 Months Ended | ||
Sep. 30, 2017USD ($)Segmentsshares | Sep. 30, 2016shares | Dec. 31, 2016USD ($) | |
Summary of Significant Accounting Polices (Textual) | |||
Cost in excess of billing | $ 9,238 | $ 47,612 | |
Billing in excess of cost | 233,394 | ||
Contract receivable | 523,548 | 382,895 | |
Allowance for doubtful accounts | $ 50,000 | $ 50,000 | |
Number of segment reporting | Segments | 1 | ||
Convertible debt [Member] | |||
Summary of Significant Accounting Polices (Textual) | |||
Antidilutive securities excluded from computation of earnings per share | shares | 3,667,068 | 4,214,068 | |
Stock options [Member] | |||
Summary of Significant Accounting Polices (Textual) | |||
Antidilutive securities excluded from computation of earnings per share | shares | 3,697,495 | 113,916,311 | |
Warrants [Member] | |||
Summary of Significant Accounting Polices (Textual) | |||
Antidilutive securities excluded from computation of earnings per share | shares | 474,335 | 17,824,259 |
Capital Stock (Details)
Capital Stock (Details) - USD ($) | Apr. 07, 2017 | Mar. 14, 2017 | Oct. 01, 2015 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 |
Capital Stock (Textual) | ||||||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | ||||
Preferred stock, shares authorized | 25,000,000 | 25,000,000 | ||||
Common stock issuance for settlement of accounts payable | $ 117,931 | |||||
Common stock through private placement for cash | $ 1,297,750 | |||||
Common stock, shares authorized | 300,000,000 | 300,000,000 | ||||
Convertible promissory notes [Member] | ||||||
Capital Stock (Textual) | ||||||
Fair value loss on settlement | $ 732,826 | |||||
Private placement [Member] | ||||||
Capital Stock (Textual) | ||||||
Common stock through private placement for cash, shares | 10,775,722 | |||||
Common stock through private placement for cash | $ 1,297,750 | |||||
Maximum [Member] | Private placement [Member] | ||||||
Capital Stock (Textual) | ||||||
Private placement price per share | $ 0.175 | |||||
Minimum [Member] | Private placement [Member] | ||||||
Capital Stock (Textual) | ||||||
Private placement price per share | $ 0.05 | |||||
Series B preferred stock [Member] | ||||||
Capital Stock (Textual) | ||||||
Stock conversion basis, description | Company’s common stock on the last three (3) trading days prior to the date of conversion, provided, however, if the Average Closing Price is less than $0.35 per share, the adjusted conversion price shall be $0.35 per share | |||||
Preferred stock, shares outstanding | 6,666 | 6,666 | ||||
Conversion price | $ 1.05 | |||||
Series C preferred Stock [Member] | ||||||
Capital Stock (Textual) | ||||||
Preferred stock, shares outstanding | 1,000 | 1,000 | ||||
Preferred stock, par value | $ 0.0001 | |||||
Preferred stock, shares authorized | 1,000 | |||||
Purchase price of the Series C preferred stock | $ 0.10 | |||||
Total purchase price Series C preferred stock, shares | 1,000 | |||||
Common Stock [Member] | ||||||
Capital Stock (Textual) | ||||||
Common stock for settlement of convertible promissory notes | 9,321,555 | |||||
Aggregate principal amount | $ 485,000 | |||||
Interest amount | 107,145 | |||||
Reverse split ratio | 1 for 35 | |||||
Common stock issuance for settlement of accounts payable | $ 89 | |||||
Common stock issued for settlement of accounts payable, shares | 886,700 | |||||
Common stock through private placement for cash, shares | 10,775,722 | |||||
Common stock through private placement for cash | $ 1,078 | |||||
Common stock issued for services, shares | 35,734,233 | |||||
Common stock issued at fair value for services | $ 3,418,598 | |||||
Share exchange agreement, description | One third (1/3) of the shares received by the holder may be converted into common stock beginning one (1) year after the first date on which a share of Series B Preferred Stock was issued (the "Original Issue Date); one third (1/3) may be converted beginning two (2) years after the Original Issue Date; and the remaining one third (1/3) may be converted beginning three years after the Original Issue Date. The number of shares of common stock issuable for each share of converted Series B preferred stock shall be calculated by dividing the stated value by the market price, the market price shall be the average of the closing trade prices of the twenty-five (25) days prior to the date of the conversion notice. | |||||
Fair value loss on settlement | $ 27,931 | |||||
Settlement of accounts payable with a fair value | $ 90,000 | |||||
Common Stock [Member] | Maximum [Member] | ||||||
Capital Stock (Textual) | ||||||
Conversion price | $ 0.2205 | |||||
Common Stock [Member] | Minimum [Member] | ||||||
Capital Stock (Textual) | ||||||
Conversion price | $ 0.0651 |
Convertible Promissory Notes (D
Convertible Promissory Notes (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Short-term Debt [Line Items] | ||
Convertible Promissory Notes | $ 3,667,068 | |
Less debt discount | 289,718 | |
Convertible Promissory Notes, net of discount | 3,377,350 | |
Less current portion | 296,722 | $ 1,935,233 |
Long term portion | $ 3,080,628 | $ 1,613,571 |
Convertible Promissory Notes 25
Convertible Promissory Notes (Details Textual) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
Convertible Promissory Notes (Textual) | ||
Convertible promissory notes | $ 3,080,628 | $ 1,613,571 |
Remaining debt discount | 289,718 | |
Net balance | 3,377,350 | |
Converted an aggregate principal amount | 1,234,972 | |
Derivative liability | 10,728,464 | 8,702,083 |
Convertible Note [Member] | ||
Convertible Promissory Notes (Textual) | ||
Converted an aggregate principal amount | $ 90,000 | |
Number of shares converted into common stock | 886,700 | |
Aggregate remaining amount | $ 167,048 | $ 257,048 |
Recognized interest expense | $ 161,574 | |
Description of debt instrument | The note has zero stated interest rate, and the conversion price shall be equal to 75% of the average three lowest last sale prices traded during the 25 trading days immediately prior to conversion. | |
Conversion of accounts payable into a convertible note | $ 432,048 | |
Percentage of average of lowest closing prices | 75.00% | |
Number of trading days previous to conversion | 25 days | |
Fair value loss on settlement | $ 27,931 | |
Convertible Promissory Notes [Member] | ||
Convertible Promissory Notes (Textual) | ||
Debt instrument interest rate | 10.00% | |
Converted an aggregate principal amount | $ 395,000 | |
Number of shares converted into common stock | 9,321,555 | |
Aggregate remaining amount | $ 1,560,000 | |
Recognized interest expense | 140,543 | |
Accrued interest | $ 107,145 | |
Description of debt instrument | The note has zero stated interest rate, and the conversion price shall be equal to 75% of the average three lowest last sale prices traded during the 25 trading days immediately prior to conversion. | |
Conversion price per share of debt, description | 50% of the lowest trade price on any trade day following issuance of the Notes. | |
Conversion of accounts payable into a convertible note | $ 430,896 | |
Fair value loss on settlement | $ 732,826 | |
Convertible Promissory Notes [Member] | Maximum [Member] | ||
Convertible Promissory Notes (Textual) | ||
Conversion price of debt | $ 4.90 | |
Convertible Promissory Notes [Member] | Minimum [Member] | ||
Convertible Promissory Notes (Textual) | ||
Conversion price of debt | $ 2.10 | |
OID Notes [Member] | ||
Convertible Promissory Notes (Textual) | ||
Debt instrument, maturity date | Dec. 31, 2017 | |
Accrued interest | $ 13,334 | |
Conversion price of debt | $ 15.31 | |
Conversion price per share of debt, description | After the amendment, the conversion price changed to the lesser of $2.80 per share, or b) fifty percent (50%) of the lowest trade price of common stock recorded since the original effective date of this note, or c) the lowest effective price per share granted to any person or entity after the effective date. | |
Original issue discount on promissory notes | $ 184,124 | |
Unsecured convertible notes [Member] | ||
Convertible Promissory Notes (Textual) | ||
Debt instrument interest rate | 10.00% | |
Debt instrument, maturity date | May 19, 2020 | |
Aggregate remaining amount | $ 1,325,000 | |
Recognized interest expense | $ 11,479 | |
Conversion price per share of debt, description | 50% of the lowest trade price on any trade day following issuance of the Notes. | |
Unsecured convertible notes [Member] | Maximum [Member] | ||
Convertible Promissory Notes (Textual) | ||
Conversion price of debt | $ 2.80 | |
Unsecured convertible notes [Member] | Minimum [Member] | ||
Convertible Promissory Notes (Textual) | ||
Conversion price of debt | $ 0.70 | |
Convertible promissory notes [Member] | ||
Convertible Promissory Notes (Textual) | ||
Fair value loss on settlement | $ 732,826 |
Options and Warrants (Details)
Options and Warrants (Details) - Stock options [Member] | 9 Months Ended |
Sep. 30, 2017$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of Options, Outstanding, beginning of period | shares | 3,697,495 |
Number of Options, Granted | shares | |
Number of Options, Exercised | shares | |
Number of Options, Forfeited/Expired | shares | |
Number of Options, Outstanding, end of period | shares | 3,697,495 |
Number of Options, Exercisable at the end of the period | shares | 2,682,644 |
Weighted average exercise price, Outstanding, beginning of period | $ 1.505 |
Weighted average exercise price, Granted | |
Weighted average exercise price, Exercised | |
Weighted average exercise price, Forfeited/Expired | |
Weighted average exercise price, Outstanding, end of period | 1.505 |
Weighted average exercise price, Exercisable at the end of the period | 1.035 |
Weighted average fair value of options granted during the period |
Options and Warrants (Details 1
Options and Warrants (Details 1) - Stock Options [Member] - 2009 Plan, 2012 Plan, and 2013 Plan [Member] | 9 Months Ended |
Sep. 30, 2017$ / sharesshares | |
Share-Based Compensation, Shares Authorized Under Stock Option Plans, Exercise Price Range [Line Items] | |
Stock Options Outstanding | 3,697,495 |
Stock Options Exercisable | 2,682,644 |
6.65 - 147.00 [Member] | |
Share-Based Compensation, Shares Authorized Under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercisable Prices, Range Minimum | $ / shares | $ 6.65 |
Exercisable Prices, Range Maximum | $ / shares | $ 147 |
Stock Options Outstanding | 52,276 |
Stock Options Exercisable | 50,401 |
6.65 - 147.00 [Member] | Minimum [Member] | |
Share-Based Compensation, Shares Authorized Under Stock Option Plans, Exercise Price Range [Line Items] | |
Weighted Average Remaining Contractual Life (years) | 4 years 10 months 3 days |
6.65 - 147.00 [Member] | Maximum [Member] | |
Share-Based Compensation, Shares Authorized Under Stock Option Plans, Exercise Price Range [Line Items] | |
Weighted Average Remaining Contractual Life (years) | 7 years 7 days |
10.15 - 15.40 [Member] | |
Share-Based Compensation, Shares Authorized Under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercisable Prices, Range Minimum | $ / shares | $ 10.15 |
Exercisable Prices, Range Maximum | $ / shares | $ 15.40 |
Stock Options Outstanding | 32,362 |
Stock Options Exercisable | 32,362 |
Weighted Average Remaining Contractual Life (years) | 5 years 11 months 15 days |
1.31 [Member] | |
Share-Based Compensation, Shares Authorized Under Stock Option Plans, Exercise Price Range [Line Items] | |
Stock Options Outstanding | 3,612,857 |
Stock Options Exercisable | 2,599,881 |
Exercisable Prices | $ / shares | $ 1.31 |
1.31 [Member] | Minimum [Member] | |
Share-Based Compensation, Shares Authorized Under Stock Option Plans, Exercise Price Range [Line Items] | |
Weighted Average Remaining Contractual Life (years) | 3 years 2 months 19 days |
1.31 [Member] | Maximum [Member] | |
Share-Based Compensation, Shares Authorized Under Stock Option Plans, Exercise Price Range [Line Items] | |
Weighted Average Remaining Contractual Life (years) | 4 years 18 days |
Options and Warrants (Details 2
Options and Warrants (Details 2) - Warrants [Member] | 9 Months Ended |
Sep. 30, 2017$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of Warrants, Outstanding - beginning of the period | shares | 506,026 |
Number of Warrants, Granted | shares | 22,825,000 |
Number of Warrants, Exercised | shares | |
Number of Warrants, Forfeited | shares | (27,296) |
Number of Warrants, Outstanding - end of the period | shares | 23,303,730 |
Weighted average exercise price, Outstanding - beginning of the period | $ / shares | $ 5.25 |
Weighted average exercise price, Granted | $ / shares | 0.02 |
Weighted average exercise price, Exercised | $ / shares | |
Weighted average exercise price, Forfeited | $ / shares | (22.37) |
Weighted average exercise price, Outstanding - end of the period | $ / shares | $ 0.13 |
Options and Warrants (Details 3
Options and Warrants (Details 3) - Warrants [Member] | 9 Months Ended |
Sep. 30, 2017$ / sharesshares | |
Share-Based Compensation, Shares Authorized Under Stock Option Plans, Exercise Price Range [Line Items] | |
Warrants Outstanding | 23,303,730 |
Warrants Exercisable | 23,303,730 |
5.25 - 22.75 [Member] | |
Share-Based Compensation, Shares Authorized Under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercisable Prices, Range Minimum | $ / shares | $ 5.25 |
Exercisable Prices, Range Maximum | $ / shares | $ 22.75 |
Warrants Outstanding | 461,537 |
Warrants Exercisable | 461,537 |
5.25 - 22.75 [Member] | Minimum [Member] | |
Share-Based Compensation, Shares Authorized Under Stock Option Plans, Exercise Price Range [Line Items] | |
Weighted Average Remaining Contractual Life (years) | 2 months 27 days |
5.25 - 22.75 [Member] | Maximum [Member] | |
Share-Based Compensation, Shares Authorized Under Stock Option Plans, Exercise Price Range [Line Items] | |
Weighted Average Remaining Contractual Life (years) | 8 months 12 days |
0.35 - 0.12 [Member] | |
Share-Based Compensation, Shares Authorized Under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercisable Prices, Range Minimum | $ / shares | $ 0.35 |
Exercisable Prices, Range Maximum | $ / shares | $ 0.12 |
Warrants Outstanding | 22,825,000 |
Warrants Exercisable | 22,825,000 |
0.35 - 0.12 [Member] | Minimum [Member] | |
Share-Based Compensation, Shares Authorized Under Stock Option Plans, Exercise Price Range [Line Items] | |
Weighted Average Remaining Contractual Life (years) | 8 months 2 days |
0.35 - 0.12 [Member] | Maximum [Member] | |
Share-Based Compensation, Shares Authorized Under Stock Option Plans, Exercise Price Range [Line Items] | |
Weighted Average Remaining Contractual Life (years) | 1 year 2 months 1 day |
31.50 [Member] | |
Share-Based Compensation, Shares Authorized Under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercisable Prices, Range Maximum | $ / shares | $ 31.50 |
Weighted Average Remaining Contractual Life (years) | 5 years 1 month 16 days |
Warrants Outstanding | 2,858 |
Warrants Exercisable | 2,858 |
8.75 - 22.75 [Member] | |
Share-Based Compensation, Shares Authorized Under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercisable Prices, Range Minimum | $ / shares | $ 8.75 |
Exercisable Prices, Range Maximum | $ / shares | $ 22.75 |
Warrants Outstanding | 14,335 |
Warrants Exercisable | 14,335 |
8.75 - 22.75 [Member] | Minimum [Member] | |
Share-Based Compensation, Shares Authorized Under Stock Option Plans, Exercise Price Range [Line Items] | |
Weighted Average Remaining Contractual Life (years) | 18 days |
8.75 - 22.75 [Member] | Maximum [Member] | |
Share-Based Compensation, Shares Authorized Under Stock Option Plans, Exercise Price Range [Line Items] | |
Weighted Average Remaining Contractual Life (years) | 11 months 19 days |
Options and Warrants (Details T
Options and Warrants (Details Textual) - USD ($) | Aug. 10, 2016 | May 12, 2016 | Jun. 14, 2013 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Oct. 02, 2015 | Sep. 29, 2015 | May 25, 2012 |
Options and Warrants (Textual) | |||||||||
Stock options mature | Oct. 17, 2021 | ||||||||
Stock options prices | $ 1.31 | ||||||||
Stock based compensation | $ 71,603 | $ 155,112 | |||||||
Aggregate intrinsic value of the warrants outstanding | $ 253,930 | ||||||||
Purchase of warrants | 22,825,000 | ||||||||
Chief Executive Officer [Member] | Restricted Stock Grant Agreement ("RSGA") [Member] | |||||||||
Options and Warrants (Textual) | |||||||||
Issuance of common stock, shares | 1,714,286 | 1,714,286 | |||||||
Restricted stock grant agreement, description | The CEO provided certain milestones are met in certain stages; a) If the Company's consolidated gross revenue, calculated in accordance with generally accepted accounting principles, consistently applied, equals or exceeds $15,000,000 for the trailing twelve month period, the Company will issue up to 857,143 shares of its common stock; b) If the Company's consolidated operating profit (Operating Profit = Operating Revenue - Cost of Goods Sold - Operating Expenses - Depreciation & Amortization), calculated in accordance with generally accepted accounting principles, equals or exceeds $1,500,000 for the trailing twelve month period as reported as reported in the Company's SEC Reports, the Company will issue up to 857,143 shares of its common stock. | The Employees provided certain milestones are met in certain stages; a) If the Company's consolidated gross revenue, calculated in accordance with generally accepted accounting principles, consistently applied, equals or exceeds $15,000,000 for the trailing twelve month period as reported in the Company's quarterly or annual financial statements, the Company will issue up to 857,143 shares of its common stock; b) If the Company's consolidated operating profit (Operating Profit = Operating Revenue - Cost of Goods Sold - Operating Expenses - Depreciation & Amortization), calculated in accordance with generally accepted accounting principles, equals or exceeds $1,500,000 for the trailing twelve month period as reported as reported in the Company's SEC Reports, the Company will issue up to 857,143 shares of its common stock. | |||||||
Employees [Member] | |||||||||
Options and Warrants (Textual) | |||||||||
Issuance of shares | 31,429 | ||||||||
Stock options mature | Mar. 29, 2021 | ||||||||
Stock options prices | $ 0.29 | ||||||||
Employees [Member] | Restricted Stock Grant Agreement ("RSGA") [Member] | |||||||||
Options and Warrants (Textual) | |||||||||
Issuance of common stock, shares | 285,714 | 857,143 | |||||||
Restricted stock grant agreement, description | The Company's common stock provided certain milestones are met in certain stages; a) If the Company's consolidated gross revenue, calculated in accordance with generally accepted accounting principles, consistently applied, equals or exceeds $15,000,000 for the trailing twelve month period, the Company will issue to each of the consultants up to 142,857 shares of its common stock; b) If the Company's consolidated operating profit (Operating Profit = Operating Revenue - Cost of Goods Sold - Operating Expenses - Depreciation & Amortization), calculated in accordance with generally accepted accounting principles, equals or exceeds $1,500,000 for the trailing twelve month period as reported as reported in the Company's SEC Reports, the Company will issue up to 142,857 shares to each of the consultants, its common stock. | The employee provided certain milestones are met in certain stages; a) If the Company's consolidated gross revenue, calculated in accordance with generally accepted accounting principles, consistently applied, equals or exceeds $15,000,000 for the trailing twelve month period as reported in the Company's quarterly or annual financial statements, the Company will issue up to 428,571 shares of its common stock; b) If the Company's consolidated operating profit (Operating Profit = Operating Revenue - Cost of Goods Sold - Operating Expenses - Depreciation & Amortization), calculated in accordance with generally accepted accounting principles, equals or exceeds $1,500,000 for the trailing twelve month period as reported as reported in the Company's SEC Reports, the Company will issue up to 428,571 shares of its common stock | |||||||
Employees One [Member] | Restricted Stock Grant Agreement ("RSGA") [Member] | |||||||||
Options and Warrants (Textual) | |||||||||
Issuance of common stock, shares | 571,429 | ||||||||
Restricted stock grant agreement, description | The employee provided certain milestones are met in certain stages; a) If the Company's consolidated gross revenue, calculated in accordance with generally accepted accounting principles, consistently applied, equals or exceeds $15,000,000 for the trailing twelve month period as reported in the Company's quarterly or annual financial statements, the Company will issue up to 285,714 shares of its common stock; b) If the Company's consolidated operating profit (Operating Profit = Operating Revenue - Cost of Goods Sold - Operating Expenses - Depreciation & Amortization), calculated in accordance with generally accepted accounting principles, equals or exceeds $1,500,000 for the trailing twelve month period as reported as reported in the Company's SEC Reports, the Company will issue up to 285,714 shares of its common stock. | ||||||||
2012 Incentive Stock Option Plan [Member] | |||||||||
Options and Warrants (Textual) | |||||||||
Common stock shares reserves and sets aside for the granting of options (in shares) | 28,571 | ||||||||
2013 Incentive Stock Option Plan [Member] | |||||||||
Options and Warrants (Textual) | |||||||||
Common stock shares reserves and sets aside for the granting of options (in shares) | 114,286 | ||||||||
Employee termination, description | Not less than 30 days nor more than three (3) months after such termination. | ||||||||
Fair market value of stock grant, description | The exercise price will be determined by the holders' percentage owned as follows: If the holder owns more than 10% of the total combined voting power or value of all classes of stock of the Company, then the exercise price will be no less than 110% of the fair market value of the stock as of the date of grant; if the person is not a 10% holder, then the exercise price will be no less than 100% of the fair market value of the stock as of the date of grant. | ||||||||
2015 Equity Incentive Stock Option Plan [Member] | |||||||||
Options and Warrants (Textual) | |||||||||
Common stock shares reserves and sets aside for the granting of options (in shares) | 4,571,429 | 3,315,714 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
Commitments and Contingencies (Textual) | ||
Warranty reserve | $ 20,000 | $ 20,000 |
McKinney [Member] | ||
Commitments and Contingencies (Textual) | ||
Base rent | $ 4,750 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Events [Member] - USD ($) | Nov. 13, 2017 | Nov. 10, 2017 | Oct. 20, 2017 | Oct. 03, 2017 | Oct. 31, 2017 |
Subsequent Events (Textual) | |||||
Aggregate shares of common stock | 3,333 | ||||
Conversion into common stock | 1,428,429 | ||||
Subsequent event, description | (i) one restricted share of its common stock, (ii) a Class A Warrant to purchase one share of its common stock, (iii) a Class B Warrant to purchase one share of its common stock, (iv) a Class C Warrant to purchase one share of its common stock and (v) a Class D Warrant to purchase one share of its common stock to qualified investors. Between October 12, 2017 and November 13, 2017, the Company sold, in the Private Placement, an aggregate of 11,100,000 shares of its common stock to accredited investors for an aggregate consideration of $277,500. | ||||
Issue of common stock to certain holders | 1,342,185 | ||||
Restricted Stock Grant Agreement ("RSGA") [Member] | |||||
Subsequent Events (Textual) | |||||
Issuance of shares | 2,000,000 | ||||
Consultants [Member] | |||||
Subsequent Events (Textual) | |||||
Common stock in lieu of cash consideration | 5,680,648 | ||||
Series B Preferred Stock [Member] | |||||
Subsequent Events (Textual) | |||||
Conversion into common stock | 476,143 | ||||
Common stock price per share | $ 1.05 | ||||
Series B Preferred Stock [Member] | Certificate of Designation [Member] | |||||
Subsequent Events (Textual) | |||||
Conversion into common stock | 952,286 | ||||
Convertible promissory notes [Member] | |||||
Subsequent Events (Textual) | |||||
Aggregate shares of common stock | 2,052,968 | ||||
Aggregate principal and interest amount | $ 31,410 |