10-Q/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

Amendment No. 1

x Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2019

¨ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from _______ to _______

Commission File No. 000-53554

DAIS CORPORATION

(Exact name of Registrant as specified in its charter)

New York	14-1760865
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

11552 Prosperous Drive, Odessa, Florida	33556
(Address of principal executive offices)	(Zip Code)

Registrant's telephone number, including area code: (727) 375-8484

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
N/A	N/A	N/A

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for at least the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer”, "accelerated filer”, “smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	x	Smaller reporting company	x
Emerging Growth Company	o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

There were 369,237,319 shares of the Registrant's $0.01 par value common stock outstanding as of August 21, 2019.

EXPLANATORY NOTE

This Amendment No. 1 on Form 10-Q/A (this “Amendment”) to the Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2019 (the “Form 10-Q”) of Dais Corporation is being filed solely for the purpose of furnishing Exhibit 101 (Interactive Data File) to the Form 10-Q, which was not included in the original filing of the Form 10-Q with the Securities and Exchange Commission on August 19, 2019 (the “Original Filing Date”).

No other changes have been made to the Form 10-Q. This Amendment speaks as of the Original Filing Date and does not reflect events that may have occurred subsequent to the Original Filing Date, and does not modify or update in any way the disclosures made in the Form 10-Q.

2

PART II – OTHER INFORMATION

ITEM 6. EXHIBITS

Exhibit		Incorporated by Reference			Filed
Number	Exhibit Description	Form	Exhibit	Filing Date	Herewith
31.1	Certification by the Principal Executive Officer of Registrant pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a) or Rule 15d-14(a))				x
31.2	Certification by the Principal Financial Officer of Registrant pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a) or Rule 15d-14(a))				x
32.1	Certification by the Principal Executive Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002				x
32.2	Certification by the Principal Financial Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002				x
101.INS	XBRL Instance Document				x
101.SCH	XBRL Taxonomy Extension Schema Document				x
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document				x
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document				x
101.LAB	XBRL Taxonomy Extension Label Linkbase Document				x
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document				x

3

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	DAIS CORPORATION
Date: August 22, 2019	By:	/s/ Timothy N. Tangredi
		Timothy N. Tangredi
		President and Chief Executive Officer
		(Principal Executive Officer)
		(Principal Financial and Accounting Officer)

4

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, Timothy N. Tangredi, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Dais Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonable likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting.

Date: August 22, 2019	By:	/s/ Timothy N. Tangredi
		Timothy N. Tangredi
		Principal Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, Timothy N. Tangredi, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Dais Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonable likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting.

Date: August 22, 2019	By:	/s/ Timothy N. Tangredi
		Timothy N. Tangredi
		Principal Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATIONS OF CHIEF EXECUTIVE OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Timothy N. Tangredi, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report of Dais Corporation on Form 10-Q for the quarter ended June 30, 2019 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in this Quarterly Report on Form 10-Q fairly presents in all material respects the financial condition and results of operations of Dais Corporation.

Date: August 22, 2019	By:	/s/ Timothy N. Tangredi
		Timothy N. Tangredi
		Principal Executive Officer

EX-32.2

EXHIBIT 32.2

CERTIFICATIONS OF CHIEF FINANCIAL OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Timothy N. Tangredi, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report of Dais Corporation on Form 10-Q for the quarter ended June 30, 2019 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in this Quarterly Report on Form 10-Q fairly presents in all material respects the financial condition and results of operations of Dais Corporation.

Date: August 22, 2019	By:	/s/ Timothy N. Tangredi
		Timothy N. Tangredi
		Principal Financial Officer

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Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2019	Aug. 21, 2019
Document And Entity Information
Entity Registrant Name	DAIS Corp
Entity Central Index Key	0001125699
Document Type	10-Q
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Small Business	true
Entity Shell Company	false
Entity Emerging Growth Company	false
Entity Current Reporting Status	Yes
Document Period End Date	Jun. 30, 2019
Entity Filer Category	Non-accelerated Filer
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2019
Entity Common Stock Shares Outstanding		369,237,319

XML

CONDENSED BALANCE SHEETS - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Assets Current
Cash and cash equivalents	$ 15,742	$ 29,300
Accounts receivable, net	8,183	34,043
Other receivables	27,122	14,348
Inventory	111,630	53,184
Prepaid expenses	83,895	48,654
Total Current Assets	246,572	179,529
Property and equipment, net, including accumulated depreciation of $414,519 and $401,797 at June 30, 2019 and December 31, 2018, respectively	44,698	57,420
Deposits	4,780	4,780
Patents, net, including accumulated amortization of $300,732 and $288,423 at June 30, 2019 and December 31, 2018, respectively	142,480	150,842
Total Other Assets	147,260	155,622
TOTAL ASSETS	438,530	392,571
Accounts payable, including related party payables of $200,969 and $165,076 at June 30, 2019 and December 31, 2018, respectively	838,865	632,574
Accrued expenses, other, including interest due to related party of $346,257 and $261,901 at June 30, 2019 and December 31, 2018, respectively	911,484	702,601
Accrued compensation and related benefits	1,969,932	1,909,936
Customer deposits	128,880	78,816
Note payable to related party	1,501,000	1,332,000
Current portion of deferred revenue	423,656	448,656
Derivative liabilities	886,463	1,280,188
Convertible notes payable, net of unamortized debt discount and deferred debt issuance costs	986,407	809,197
Total Current Liabilities	7,646,687	7,193,968
Total Liabilities	7,646,687	7,193,968
Preferred stock, undesignated; $0.01 par value; 7,990,000 shares authorized; no shares issued and outstanding
Common stock; $0.01 par value; 1,100,000,000 shares authorized; 252,645,621 and 149,819,895 shares issued; and 251,388,408 and 148,562,682 shares outstanding at June 30, 2019 and December 31, 2018, respectively	2,526,457	1,498,200
Capital in excess of par value	42,916,755	43,299,705
Accumulated deficit	(51,189,257)	(50,137,190)
Total	(5,746,045)	(5,339,285)
Treasury stock at cost, 1,257,213 shares	(1,462,112)	(1,462,112)
Total Stockholders' Deficit	(7,208,157)	(6,801,397)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	438,530	392,571
Series A Preferred Stock [Member]
Assets Current
Preferred stock, Series A; $0.01 par value; 2,000,000 shares authorized; no shares issued and outstanding
Series B Preferred Stock [Member]
Assets Current
Preferred stock, Series B; $0.01 par value; 10,000 shares authorized; 10 and 10 shares issued and outstanding, respectively

XML

CONDENSED BALANCE SHEETS (Parenthetical) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Preferred stock, shares par value	$ 0.01	$ 0.01
Preferred stock, undesignated, shares authorized	7,990,000	7,990,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, shares par value	$ 0.01	$ 0.01
Common stock, shares authorized	1,100,000,000	1,100,000,000
Common stock, shares issued	252,645,621	149,819,895
Common stock, shares outstanding	251,388,408	148,562,682
Accumulated depreciation	$ 414,519	$ 401,797
Accumulated amortization	300,732	288,423
Accounts payable related party payables	200,969	165,076
Interest due to related party	$ 346,257	$ 261,901
Series A Preferred Stock [Member]
Preferred stock, shares par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	2,000,000	2,000,000
Series B Preferred Stock [Member]
Preferred stock, shares par value	$ 0.01	$ 0.01
Preferred stock, shares issued	10	10
Preferred stock, shares outstanding	10	10
Preferred stock, shares authorized	10,000	10,000

XML

CONDENSED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
REVENUE
Sales	$ 200,258	$ 295,604	$ 570,098	$ 536,278
Royalty and license fees	12,500	12,500	25,000	25,000
Total revenue	212,758	308,104	595,098	561,278
COST OF GOODS SOLD	184,949	221,330	358,807	393,502
GROSS MARGIN	27,809	86,774	236,291	167,776
OPERATING EXPENSES
Research and development, net	64,066	64,749	115,835	140,212
Selling, general and administrative	310,313	712,405	670,148	1,090,420
TOTAL OPERATING EXPENSES	374,379	777,154	785,983	1,230,632
LOSS FROM OPERATIONS	(346,570)	(690,380)	(549,692)	(1,062,856)
OTHER INCOME (EXPENSE)
Interest expense	(396,531)	(262,353)	(836,845)	(489,712)
Change in fair value of derivative liabilities	209,015	86,967	280,921	(21,607)
Gain on extinguishment of debt	45,476	195,675	53,549	195,675
TOTAL OTHER INCOME (EXPENSE), NET	(142,040)	20,288	(502,375)	(315,646)
NET LOSS	$ (488,610)	$ (670,091)	$ (1,052,067)	$ (1,378,501)
NET LOSS PER COMMON SHARE, BASIC AND DILUTED	$ (0.00)	$ (0.00)	$ (0.01)	$ (0.01)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING, BASIC AND DILUTED	190,333,742	142,546,872	171,045,306	140,957,979

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CONDENSED STATEMENT OF STOCKHOLDERS' DEFICIT (Unaudited) - USD ($)	Total	Common Stock Shares	Accumulated Deficit	Capital in Excess of Par Value	Treasury Stock
Beginning Balance, Shares at Dec. 31, 2017		140,608,645
Beginning Balance, Amount at Dec. 31, 2017	$ (4,165,451)	$ 1,406,087	$ (47,112,429)	$ 43,003,003	$ (1,462,112)
Net loss	(708,410)		(708,410)
Ending Balance, Shares at Mar. 31, 2018		140,608,645
Ending Balance, Amount at Mar. 31, 2018	(4,873,861)	$ 1,406,087	(47,820,839)	43,003,003
Net loss	(670,091)		(670,091)
Shares issued for services		8,148,750
Shares issued for services	348,925	$ 81,488		267,437
Ending Balance, Shares at Jun. 30, 2018		148,757,395
Ending Balance, Amount at Jun. 30, 2018	(5,195,027)	$ 1,487,575	(48,490,930)	43,270,440	(1,462,112)
Beginning Balance, Shares at Dec. 31, 2018		149,819,895
Beginning Balance, Amount at Dec. 31, 2018	(6,801,397)	$ 1,498,200	(50,137,190)	43,299,705	(1,462,112)
Shares issued upon conversion of debt, Shares		8,853,398
Warrants issued for finance cost
Net loss	(563,457)		(563,457)
Shares issued upon conversion of debt, Amount	88,534	88,534
Warrants issued for finance cost, Amount	25,320			25,320
Ending Balance, Shares at Mar. 31, 2019		158,673,293
Ending Balance, Amount at Mar. 31, 2019	(7,251,000)	$ 1,586,734	(50,700,647)	43,325,025	(1,462,112)
Shares issued upon conversion of debt, Shares		92,872,328
Net loss	(488,610)		(488,610)
Shares issued for finance cost, Shares		1,100,000
Warrants issued for finance cost
Shares issued upon conversion of debt, Amount	379,609	928,723		(549,114)
Warrants issued for finance cost, Amount	141,844			141,844
Shares issued for finance cost, Amount	10,000	$ 11,000		(1,000)
Ending Balance, Shares at Jun. 30, 2019		252,645,621
Ending Balance, Amount at Jun. 30, 2019	$ (7,208,157)	$ 2,526,457	$ (51,189,257)	$ 42,916,755	$ (1,462,112)

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CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$ (1,052,067)	$ (1,378,501)
Adjustments to reconcile net loss to net cash and cash equivalents used in operating activities:
Amortization of deferred debt issue costs	26,824	5,971
Depreciation and amortization	25,031	32,033
Change in fair value of derivative liability	(280,921)	21,607
Non-cash interest expenses	286,887	196,797
Amortization of debt discount	327,885	125,756
Gain on extinguishment of debt	(53,549)	(195,675)
Stock compensation		300,000
(Increase) decrease in:
Accounts receivable	25,860	(51,498)
Inventory	(58,446)	38,432
Other receivables	(12,774)	774
Prepaid expenses/Other current assets	(35,241)	(69,063)
Deposits		300
Increase (decrease) in:
Accounts payable	206,291	130,232
Accrued expenses	281,725	271,328
Customer Deposits	50,064	(46,846)
Deferred revenue	(25,000)	(25,000)
Net cash used in operating activities	(287,431)	(643,353)
CASH FLOWS FROM INVESTING ACTIVITIES:
Increase in patent costs	(3,947)	(30,740)
Net cash used in investing activities	(3,947)	(30,740)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from note payable - related party	169,000
Proceeds from note payable	142,500	810,000
Repayment of note	(33,680)	(134,000)
Net cash provided by financing activities	277,820	676,000
Net increase (decrease) in cash and cash equivalents	(13,558)	1,907
Cash and cash equivalents, beginning of period	29,300	122,036
Cash and cash equivalents, end of period	15,742	123,943
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest	9,111	4,993
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Issuance of common stock upon conversion of notes and accrued interest	468,143
Notes and accrued interest converted to common stock	191,926
Debt costs deducted from proceeds of notes	12,500	11,750
Issuance of shares for finance cost	10,000
Issuance of warrants for debt modification	167,164
Initial derivative liability at issuance of note	213,998	372,969
Initial debt discount at issuance of note	$ 142,500	$ 273,175

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Background Information

6 Months Ended

Jun. 30, 2019

Background Information

Note 1. Background Information

Dais Corporation (the “Company”), a New York corporation, has developed and is commercializing applications using its nanostructure polymer technology. The first commercial product, ConsERV ^TM is an energy recovery ventilator (“ERV”) (core and systems) for use in commercial Heating, Ventilating, and Air Conditioning (HVAC) applications. The second commercial product is NanoClear ^TM , a water cleanup process useful in the creation of potable water from most forms of contaminated water including industrial process wastewater (petrochemical, steel, etc.) sea, brackish, or wastewater. In addition to direct sales, the Company licenses its nanostructures polymer technology to strategic partners in the aforementioned applications and is in various stages of deployment with regard to other applications employing its base technologies. The Company was incorporated in April 1993 and its corporate headquarters is located in Odessa, Florida.

The Company is dependent on third parties to manufacture the key components needed for its nanostructured based materials and some portion of the value-added products made with these materials. Accordingly, a suppliers’ failure to supply components in a timely manner, or to supply components that meet the Company’s quality, quantity and cost requirements or technical specifications, or the inability to obtain alternative sources of these components on a timely basis or on acceptable terms, would create delays in production of the Company’s products and/or increase its unit costs of production. Certain of the components or the processes of the Company’s suppliers are proprietary. If the Company was ever required to replace any of its suppliers, it should be able to obtain comparable components from alternative suppliers at comparable costs, but this would create a delay in production and may briefly affect the Company’s operations.

The Company’s accompanying condensed financial statements are unaudited, but in the opinion of management reflect all adjustments necessary to fairly state the Company’s financial position, results of operations, stockholders’ deficit and cash flows as of and for the dates and periods presented. The financial statements of the Company are prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information.

The unaudited financial statements and notes are presented as permitted by Form 10-Q. Accordingly, certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted although the Company generally believes that the disclosures are adequate to ensure that the information presented is not misleading. The accompanying financial statements and notes should be read in conjunction with the audited financial statements and notes of the Company for the fiscal year ended December 31, 2018 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on April 10, 2019. The results of operations for the three- and six-month periods ended June 30, 2019 are not necessarily indicative of the results that may be expected for any future quarters or for the entire year ending December 31, 2019.

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Going Concern and Management's Plans

6 Months Ended

Jun. 30, 2019

Going Concern and Management's Plans

Note 2. Going Concern and Management's Plans

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. For the six months ended June 30, 2019, the Company generated a net loss of $1,052,067 and the Company has incurred significant losses since inception. As of June 30, 2019, the Company had an accumulated deficit of $51,189,257, a stockholders’ deficit of $7,208,157 and cash and cash equivalents of $15,742. The Company used $287,431 and $643,353 of cash from operations during the six months ended June 30, 2019 and 2018, respectively, which was funded by proceeds from borrowings from notes and debentures. There is no assurance that such financing will be available in the future. These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. The Company is currently pursuing the following sources of short and long-term working capital: 

1.	The Company is holding preliminary discussions with parties who are interested in licensing, purchasing the rights to or establishing a joint venture to commercialize applications of the Company’s technology.
2.	The Company is seeking growth capital from certain strategic and/or government (grant) related sources. These sources may, pursuant to any agreements that may be developed in conjunction with such funding, assist in the product definition and design, roll-out and channel penetration of products.
3.	The Company is holding discussions with investors, potential strategic partners, and investment banks to obtain debt and/or equity financing.

Any failure by the Company to timely procure additional financing or investment adequate to fund the ongoing operations, including planned product development initiatives and commercialization efforts, will have material adverse consequences on the Company’s financial condition, results of operations and cash flows as could any unfavorable terms. There are no assurances the Company will be able to obtain the financing and planned product development commercialization. Accordingly, the Company may not have the ability to continue as a going concern. The financial statements of the Company do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern.

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Significant Accounting Policies

6 Months Ended

Jun. 30, 2019

Significant Accounting Policies

Note 3. Significant Accounting Policies

In the opinion of management, all adjustments necessary for a fair statement of (a) the results of operations for the three and six-month periods ended June 30, 2019 and 2018, (b) the financial position at June 30, 2019 and December 31, 2018, and (c) the cash flows for the six month periods ended June 30, 2019 and 2018 have been made.

The significant accounting policies followed are:

Use of estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Significant estimates underlying the Company’s reported financial position and results of operations include the allowance for doubtful accounts, fair value of stock-based compensation, fair value of derivative liabilities, valuation allowance on deferred taxes and the warranty reserve.

Cash and cash equivalents – For the purposes of the Statements of Cash Flows, the Company considers all highly liquid debt instruments with a maturity of three months or less to be cash equivalents. Cash and cash equivalents are maintained at financial institutions and, at times, balances may exceed federally insured limits. The Company has never experienced losses related to these balances.

Fair Value of Financial Instruments – The Company’s financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, deferred revenue, customer deposits and notes payable are carried at historical cost. At June 30, 2019 and December 31, 2018, the carrying amounts of these instruments approximated their fair values because of the short-term nature of these instruments.

Inventory – Inventory consists of raw materials, work-in-process and finished goods and is stated at the lower of cost, determined by first-in, first-out method, or market. Market is determined based on the net realizable value, with appropriate consideration given to obsolescence, excessive levels, deterioration and other factors. At June 30, 2019 and December 31, 2018, the Company had $101,154 and $40,341 of raw materials, $5,031 and $12,191 of in-process inventory, and $5,443 and $652 of finished inventory, respectively. A reserve is recorded for any inventory deemed excessive or obsolete. No reserve is considered necessary at June 30, 2019 and December 31, 2018.

Property and equipment – Property and equipment are recorded at cost. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets ranging from 3 to 7 years. Leasehold improvements are amortized over the shorter of their estimated useful lives of 5 years or the related lease term. Depreciation expense was $2,856 and $9,865 for the three months ended June 30, 2019 and 2018, respectively, and $12,722 and $19,731 for the six months ended June 30, 2019 and 2018, respectively. Gains and losses upon disposition are reflected in the Statements of Operations in the period of disposition. Maintenance and repair expenditures are charged to expense as incurred.

Intangible assets – Identified intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The Company’s existing intangible assets consist solely of patents. Patents are amortized over their estimated useful or economic lives of 17 to 20 years. Patent amortization expense was $5,805 and $11,925 for the three months ended June 30, 2019 and 2018, respectively and $12,309 and $12,302 for the six months ended June 30, 2019 and 2018, respectively. Based on current capitalized costs, total patent amortization expense is estimated to be approximately $22,000 per year for the next five years and thereafter.

Research and development expenses and funding proceeds – Expenditures for research and development are expensed as incurred. The Company incurred research and development costs of $39,957 and $81,098 for the three months ended June 30, 2019 and 2018, respectively and $114,644 and $165,227 for the six months ended June 30, 2019 and 2018, respectively. The Company accounts for proceeds received from government funding for research as a reduction in research and development costs. The Company recorded proceeds against research and development expenses on the Statements of Operations of $(24,109) and $16,349 for the three months ended June 30, 2019 and 2018, respectively and $(1,191) and $25,015 for the six months ended June 30, 2019 and 2018, respectively.

Revenue recognition – The Company has adopted the new revenue recognition guidelines in accordance with ASC 606, Revenue from Contracts with Customers (ASC 606), commencing from the period under this report. The Company analyzes its contracts to assess that they are within the scope and in accordance with ASC 606. In determining the appropriate amount of revenue to be recognized as the Company fulfills its obligations under each of its agreements, whether for goods and services or licensing, the Company performs the following steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations based on estimated selling prices; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. The Company acts as a principal in its revenue transactions as the Company is the primary obligor in the transactions. Generally, the Company recognizes revenue for its products upon shipment to customers, provided no significant obligations remain and collection is probable.

In certain instances, the Company’s ConsERV system product may carry a limited warranty of up to two years for all parts contained therein with the exception of the energy recovery ventilator core produced and sold by the Company. The distributor of the ConsERV system may carry a limited warranty of up to ten years. The limited warranty includes replacement of defective parts for the ConsERV system and includes workmanship and material failure for the ConsERV core. The Company recorded an accrual of $91,531 for future warranty expenses at June 30, 2019 and December 31, 2018, which is included in accrued expenses, other. 

Royalty revenue is recognized as earned. The Company recognized royalty revenue of $0 for the three and six months ended June 30, 2019 and 2018, respectively. Revenue derived from the sale of licenses is deferred and recognized as license fee revenue on a straight-line basis over the life of the license, or until the license arrangement is terminated. The Company recognized license fee revenue of $12,500 and $12,500 for the three months ended June 30, 2019 and 2018, respectively and $25,000 and $25,000 for the three months ended June 30, 2019 and 2018, respectively.

The Company accounts for revenue arrangements with multiple elements under the provisions of the Financial Accounting Standards Boards (FASB) Accounting Standards Codification (ASC) Topic 605-25, “Revenue Recognition-Multiple-Element Arrangements.” In order to account for these agreements, the Company must identify the deliverables included within the agreement and evaluate which deliverables represent separate units of accounting based on if certain criteria are met, including whether the delivered element has stand-alone value to the licensee. The consideration received is allocated among the separate units of accounting, and the applicable revenue recognition criteria are applied to each of the separate units.

In December 2017, the Company and Zhejiang MENRED Environmental Tech Co, Ltd., Zhejiang Province, China (“Menred”), entered into a License and Supply Agreement (the “Agreement”), effective December 21, 2017. Pursuant to the Agreement, the Company licensed certain intellectual property and improvements to Menred, for use in the manufacture and sale of energy recovery ventilators (“ERV”) and certain other HVAC systems for installation in commercial, residential or industrial buildings in China. Menred also agreed to purchase its requirements of certain products from the Company for Menred’s use, pursuant to the terms and conditions of the Agreement. Menred will also pay royalties, as defined, to the Company on a quarterly basis, based on price and production volume as provided by Menred. No royalties are due within the first year of the Agreement. Also pursuant to the Agreement, the Company is required to purchase 50,000 square meters of Product from Menred for delivery as an annual minimum with a 10,000 square meter minimum order quantity per delivery. The Agreement has a ten-year term with mutually agreed upon five-year extensions.

Shipping and handling fees billed to customers are included in revenue. Shipping and handling fees associated with freight are generally included in cost of revenue. 

Derivative Liability – The Company has financial instruments that are considered derivatives or contain embedded features subject to derivative accounting. Embedded derivatives are valued separately from the host instrument and are recognized as derivative liabilities in the Company’s balance sheet. The Company measures these instruments at their estimated fair value and recognizes changes in their estimated fair value in results of operations during the period of change.

Fair Value Measurements – The Company accounts for financial instruments in accordance with FASB Accounting Standards Codification (ASC) 820 “Fair value Measurement and Disclosures” (ASC 820). ASC 820 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs).

The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:

· Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

· Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g. interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

· Level 3 - Inputs that are both significant to the fair value measurement and unobservable.

A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. The Company has recorded a derivative liability for its convertible notes which contain variable conversion prices. The table below summarizes the fair values of our financial liabilities as of June 30, 2019:

	Fair Value at June 30,		Fair Value Measurement Using
	2019		Level 1		Level 2		Level 3
Derivative liability	$	886,463	$	-	$	-	$	886,463

The reconciliation of the derivative liability measured at fair value on a recurring basis using unobservable inputs (Level 3) is as follows for the six months ended June 30, 2019:

Balance at beginning of period	$	1,280,188
Additions to derivative instruments		262,223
Extinguished derivative liability		(375,027	)
Gain on change in fair value of derivative liability		(280,921	)
Balance at end of period	$	886,463

Earnings (loss) per share – Basic income (loss) per share is computed by dividing net income (loss) attributable to common stockholders by the weighted average common shares outstanding for the period. Diluted loss per share is computed giving effect to all potentially dilutive common shares. Potentially dilutive common shares may consist of incremental shares issuable upon the exercise of stock options and warrants. In periods in which a net loss has been incurred, all potentially dilutive common shares are considered anti-dilutive and are excluded from the calculation. Common share equivalents of 797,100,504 and 60,878,439 were excluded from the computation of diluted earnings per share for the three and six months ended June 30, 2019 and 2018, respectively, because their effect is anti-dilutive.

Recent Accounting Pronouncements – There are new accounting pronouncements issued by the Financial Accounting Standards Board (“FASB”) which are have been adopted, or not yet effective as follows:

In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases. The new standard establishes a right-of-use (ROU) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement.

The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The adoption of this ASU did not have a material effect on the Company's financial statements. 

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Accrued Expenses, Other

6 Months Ended

Jun. 30, 2019

Accrued Expenses, Other

Note 4. Accrued Expenses, Other

Accrued expenses consist of the following:

	June 30, 2019		December 31, 2018
Accrued expenses, other	$	208,278	$	174,489
Accrued interest		611,675		436,581
Accrued warranty costs		91,531		91,531
	$	911,484	$	702,601

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Related Party Transactions

6 Months Ended

Jun. 30, 2019

Related Party Transactions

Note 5. Related Party Transactions

The Company rents a building that is owned by two stockholders of the Company, one of which is the Chief Executive Officer. Rent expense for this building is $4,066 per month, including sales tax. The Company recognized rent expense related to this lease of $12,198 and $12,198 for the three months ended June 30, 2019 and 2018, respectively and $24,396 and $24,396 for the six months ended June 30, 2019 and 2018, respectively. The lease term will terminate upon 30 days’ written notice from landlord or 90 days written termination from us.

The Company has accrued compensation due to the Chief Executive Officer as of June 30, 2019 and December 31, 2018 of $1,835,627 and $1,772,623, respectively, included in accrued compensation and related benefits in the accompanying balance sheets.

On June 24, 2016, the Company entered into a Loan and Security Agreement (“Security Agreement”) with Patricia Tangredi (the “Holder”) pursuant to which the Company issued a Senior Secured Promissory Note for $150,000 (the “Note”). The interest rate is 12% per annum compounded daily with a minimum interest payment of $2,000. The Note grants the Holder a secured interest in the assets of the Company. Ms. Tangredi is the wife of Timothy Tangredi, the Company’s CEO and stockholder, and therefore is a related party of the Company. Pursuant to the Note, the Company is to pay the Holder the principal amount of $150,000 plus all interest due thereon in accordance with terms and conditions of the Security Agreement on the earlier of: (i) the date upon which the Company secures funds, regardless of source, equal to or exceeding, in the aggregate, $1,000,000 or (ii) October 31, 2016 (the “Maturity Date”). 

During 2016 to the period ended June 30, 2019, the Holder extended the Note pursuant to various amendments. Pursuant to the amendments, the principal amount due was increased to $1,501,000 with an extended maturity date of August 20, 2019. As consideration for the additional proceeds and modification of the maturity date, the Company issued to the related party warrants to purchase an aggregate of 28,250,000 shares of common stock with an exercise price of $0.01 with a ten year exercise period, from the date of issuance and 480,000 shares of common stock in 2017, valued at $17,200, of which $15,400 was recorded against debt due to related party. On January 28, 2019, the Holder further extended the Note pursuant to an amendment. The maturity date was extended to April 8, 2019, effective as of November 16, 2018. As consideration for the additional extension of the maturity date, the Company issued a warrant to purchase 2,000,000 shares of common stock with an exercise price of $0.01 and a ten-year exercise period. The Company calculated the relative fair value of the warrant as $25,320, using the Black Scholes Model based on the following assumptions: (1) risk free interest rate of 2.75%; (2) dividend yield of 0%; (3) volatility factor of the expected market price of the Company's common stock of 244%; and (4) an expected life of 10 years. The fair value of the warrant was charged to expense as finance cost. During the three months ended June 30, 2019 the maturity date was extended twice, to May 30, 2019 and then to August 20, 2019. The Company also received additional proceeds of $100,000. As consideration for the additional extensions of the maturity date and the additional proceeds, the Company issued warrants to purchase 40,000,000 shares of common stock with an exercise price of $0.01 and a ten-year exercise period. The Company calculated the relative fair value of the warrants as $141,844, using the Black Scholes Model based on the following assumptions: (1) risk free interest rate of 2.46%; (2) dividend yield of 0%; (3) volatility factor of the expected market price of the Company's common stock of 246%; and (4) an expected life of 10 years. The fair value of the warrants was charged to expense as finance cost.

The Company is using the proceeds of the Note and related amendments for working capital purposes. Interest expense on the Note was $42,901 and $39,851 for the three-month periods ended June 30, 2019 and 2018, respectively and $84,356 and $79,264 for the six-month periods ended June 30, 2019 and 2018, respectively. Accrued interest on the Note was $346,257 and $261,901 at June 30, 2019 and December 31, 2018, respectively.

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Equity Transactions

6 Months Ended

Jun. 30, 2019

Equity Transactions

Note 6. Equity Transactions

Preferred Stock

At June 30, 2019 and December 31, 2018, the Company’s Board of Directors has authorized 10,000,000 shares of preferred stock with a par value of $0.01 to be issued in series with terms and conditions to be determined by the Board of Directors.

2,000,000 of the shares of preferred stock has been designated as Class A Preferred Stock. The Class A Preferred Stock shall entitle the holder thereof to 150 votes on all matters submitted to a vote of the stockholders of the Company.

10,000 of the shares of preferred stock has been designated as Class B Preferred Stock. The Class A Preferred Stock shall entitle the holder thereof to 150 votes on all matters submitted to a vote of the stockholders of the Company. The Class B Stock includes the right to vote in an amount equal to 51% of the votes to approve certain corporate actions, including, without limitation, changing the name of the Company and increasing the number of authorized shares.

On November 1, 2018, the Company issued ten shares of Class B Redeemable Preferred Stock par value $0.01 per share (“Class B Stock”) having a stated value of $1.50 per share to Timothy N. Tangredi, the Company’s Chief Executive Officer, in exchange for $15, pursuant to approval of the Board of Directors of the Company.

Upon any liquidation, dissolution or winding up of the Company, no distribution shall be made to the holders of shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Class A or Class B Preferred Stock unless, prior thereto, the holders of shares of Class A or Class B Preferred Stock shall have received $1.50 per share (the “Stated Amount”). The Class A and Class Preferred Stock shall rank, with respect to the payment of liquidation, dividends and the distribution of assets, senior to the Company’s Common Stock.

The Holder (as defined in the Class A Preferred Stock certificate of designations) of the Class A Preferred Stock may convert all or part of the outstanding and unpaid Stated Amount (as defined in the Class A Preferred Stock certificate of designations) into fully paid and non-assessable shares of the Company’s common stock at the Conversion Price (as defined in the Class A Preferred Stock certificate of designations). The number of shares receivable upon conversion equals the Stated Amount divided by the Conversion Price. The Conversion Price shall be equal to the 75% of the average closing price for the 30 trading days prior to the election to convert. At no time will the Company convert any of the Stated Amount into common stock if that would result in the Holder beneficially owning more than 49% of the sum of the voting power of the Company’s outstanding shares of common stock plus the voting power of the Class A Preferred Stock. No shares of Class A Preferred Stock have been issued.

The shares of the Class B Preferred Stock shall be automatically redeemed by the Company at $0.01 per share on the date that Tim N. Tangredi ceases, for any reason, to serve as an officer, director or consultant of the Company. 

Common Stock

At June 30, 2019, the Company’s Board of Directors has authorized 1,100,000,000 shares of common stock with a par value of $0.01 to be issued in series with terms and conditions to be determined by the Board of Directors.

During the six months ended June 30, 2019, the Company issued 101,725,726 shares of common stock upon the conversion of $179,080 principal amount of notes and related accrued interest of $12,846.

During the six months ended June 30, 2019, the Company issued 1,100,000 shares of common stock, valued at $10,000, as a finance cost.

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Convertible Notes Payable

6 Months Ended

Jun. 30, 2019

Convertible Notes Payable

Note 7. Convertible Notes Payable

The Company’s convertible promissory notes at June 30, 2019 and December 31, 2018 are as follows:

	June 30, 2019			December 31, 2018
Convertible notes payable, bearing interest at 8%-10%	$	1,226,490		$	1,284,250
Unamortized debt discount		(224,344	)		(440,315	)
Unamortized deferred debt issuance cost		(15,739	)		(34,738	)
Total	$	986,407		$	809,197
Current portion		986,407			809,197

February 2019 Note

On February 20, 2019, the Company issued a convertible note with a face amount of $155,000. The note and related accrued interest are convertible, at the option of the holder, into shares of the Company’s common stock at a conversion price of 60% of the lowest trading price for 15 days prior to conversion. The note bears interest at 8% per year and matures on February 20, 2019. The note contains original issue discount aggregating $12,500 which is being amortized over the life of the note. The Company has also agreed to issue 1,100,000 shares of common stock with a value of $10,000 in connection with the note. The shares have been valued at $10,000. This cost will also be amortized over the life of the note. The Company received cash proceeds of $142,500.

2018 Notes

The company entered into various convertible notes during 2018, aggregating $1,071,490 at June 30, 2019. The notes all mature during 2019. During the six months ended June 30, 2019, four notes that came due during the period were extended to August 15, 2019. Pursuant to the terms of the extensions, we have agreed to issue one million shares of common stock for each month that the notes are outstanding, commencing in April 2019. The shares have not been issued at June 30, 2019. We have accrued $27,300 as interest expense during the three months ended June 30, 2019 for the 9 million shares due for the extensions. The four notes are currently being renegotiated.

During the three months ended June 30, 2019, the Company amortized $158,186 of debt discount and $12,723 of debt issue costs to interest expense. During the six months ended June 30, 2019, the Company amortized $327,885 of debt discount and $26,825 of debt issue costs to interest expense.

During the three months ended June 30, 2018, the Company amortized $68,672 of debt discount and $3,357 of debt issue costs to interest expense. During the six months ended June 30, 2018, the Company amortized $125,756 of debt discount and $5,971 of debt issue costs to interest expense.

During the six months ended June 30, 2019, the Company issued 101,725,726 shares of common stock upon the conversion of $179,080 principal amount of notes and related accrued interest of $12,846. The Company also made a cash payment of $33,680 against principal.

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Derivative Liabilities

6 Months Ended

Jun. 30, 2019

Derivative Liabilities

Note 8. Derivative Liabilities

The Company has identified certain embedded derivatives related to its convertible notes. Since the notes are convertible into a variable number of shares or have a price reset feature, the conversion features of those notes are recorded as derivative liabilities. The accounting treatment of derivative financial instruments requires that the Company record fair value of the derivatives as of the inception date and to adjust to fair value as of each subsequent balance sheet date.

February 2019 Note

The company entered into various convertible notes during 2018, aggregating $1,071,490 at June 30, 2019. The notes all mature during 2019. During the six months ended June 30, 2019, four notes that came due during the period were extended to August 15, 2019. Pursuant to the terms of the extensions, we have agreed to issue one million shares of common stock for each month that the notes are outstanding, commencing in April 2019. The shares have not been issued at June 30, 2019. We have accrued $27,300 as interest expense during the three months ended June 30, 2019 for the 9 million shares due for the extensions. The four notes are currently being renegotiated.

The Company has recorded additions to the derivative conversion liabilities related to the conversion feature attributable to interest accrued during the period. These additions totaled $5,244 and $7,844 for the three and six months ended June 30, 2019, respectively, and were charged to interest expense.

During the three and six months ended June 30, 2019, the Company recorded income of $33,870 and expense of $49,137 related to the change in the fair value of the derivative. The fair value of the embedded derivative was $270,498 at June 30, 2019, determined using the Black Scholes Model with the following assumptions: (1) risk free interest rate of 2.01%; (2) dividend yield of 0%; (3) volatility factor of the expected market price of the Company's common stock of 289%; and (4) an expected life of 8 months. 

2018 Notes

The Company identified embedded derivatives related to the conversion features of the various 2018 notes. The accounting treatment of derivative financial instruments requires that the Company record the fair value of the Dais derivatives as of the inception date of the note and to adjust the fair value as of each subsequent balance sheet date.

The Company has recorded additions to the derivative conversion liabilities related to the conversion feature attributable to interest accrued during the periods. These additions totaled $18,247 and $40,862 for the three and six months ended June 30, 2019, respectively, and were charged to interest expense.

During the three and six months ended June 30, 2019, the Company recorded income of $175,145 and $330,058 related to the change in the fair value of the derivative. The fair value of the embedded derivative was $615,965 at June 30, 2019, determined using the Black Scholes Model with the following assumptions: (1) risk free interest rate of 2.09% - 2.18%; (2) dividend yield of 0%; (3) volatility factor of the expected market price of the Company's common stock of 282% - 322%; and (4) an expected life of 1 – 5 months.

During the six months ended June 30, 2019, the Company issued 101,725,726 shares of common stock upon the conversion of $179,080 principal amount of notes and related accrued interest of $12,846 and made a cash principal payment of $33,680. As a result of the conversions and payment, derivative liability in the amount of $375,027 was extinguished.

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Deferred Revenue

6 Months Ended

Jun. 30, 2019

Deferred Revenue

Note 9. Deferred Revenue

In December 2017, the Company and Zhejiang MENRED Environmental Tech Co, Ltd., Zhejiang Province, China (“Menred”), entered into a License and Supply Agreement (the “License and Supply Agreement”), effective December 21, 2017. Pursuant to the License and Supply Agreement, the Company licensed certain intellectual property and improvements to Menred, for use in the manufacture and sale of energy recovery ventilators (“ERV”) and certain other HVAC systems for installation in commercial, residential or industrial buildings in China. Menred also agreed to purchase its requirements of certain products from the Company for Menred’s use, pursuant to the terms and conditions of the License and Supply Agreement. Menred will also pay royalties, as defined, to the Company on a quarterly basis, based on price and production volume as provided by Menred. No royalties are due within the first year of the License and Supply Agreement. Also pursuant to the License and Supply Agreement, the Company is required to purchase 50,000 square meters of Product from Menred for delivery as an annual minimum with a 10,000 square meter minimum order quantity per delivery. The License and Supply Agreement has a ten-year term with mutually agreed upon five-year extensions.

The Company recognized license revenue of $12,500 for each of the three-month periods ended June 30, 2019 and 2018 and $25,000 for each of the six-month periods ended June 30, 2019 and 2018. Deferred revenue for the agreement was $423,656 and $448,656 at June 30, 2019 and December 31, 2018, respectively.

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Litigation

6 Months Ended

Jun. 30, 2019

Litigation

Note 10. Litigation

From time to time, claims are made against the Company in the ordinary course of its business, which could result in litigation. Claims and associated litigation are subject to inherent uncertainties and unfavorable outcomes could occur, such as monetary damages, fines, penalties or injunctions prohibiting the Company from selling one or more products or engaging in other activities. The occurrence of an unfavorable outcome in any specific period could have a material adverse effect on the Company’s results of operations for that period or future periods.

In the third quarter of 2015, the Company commenced an action for the cancellation of the 37,500,000 shares issued to Soex (the “Shares”) in connection with a Securities Purchase Agreement, dated January 21, 2014 (“Soex SPA”), and 3,750,000 shares issued to Zan Investment Advisory Limited (“Zan”), which is affiliated with Soex through Aifan Liu, who was appointed as a Company board observer by SOEX and her husband, Xinghong Hua. Sharon Han, General Manager and Chairwoman of Soex, served on our board pursuant to the provisions of the Soex SPA. Ms. Han resigned from the Board of Directors effective February 1, 2016.

On April 24, 2014, we entered into a Distribution Agreement (the “Distribution Agreement”), with Soex to distribute certain of the Company’s products in China. As reported in the Company’s Form 10-K for the year ended December 31, 2014 and filed with the Securities and Exchange Commission on April 1, 2015, the Company was entitled to receive, pursuant to the Distribution Agreement, royalties and a $500,000 payment, of which $50,000 has been received, that was due on or before October 24, 2014. Further, the Company reported it had not received any royalties from Soex. Soex is in breach of the Distribution Agreement.

As first reported in the Company’s Form 10-Q for the quarter ended June 30, 2015, the Company began pursuing legal action against Soex for breach of the Soex SPA and Distribution Agreement. On July 8, 2015, the Company filed a lawsuit in state courts in Florida against Soex and Zan. 

Pursuant to the Distribution Agreement, Soex is in material breach of the following:

(1)	Section 1(a) of the Distribution Agreement for Soex's failure to make a $225,000 payment to the Company for the appointment of Soex as the exclusive distributor of the Products in the Field and Territory (the "Distribution Payment Default") in accordance with the terms set forth in the Distribution Agreement. Such payment was due on October 20, 2014 (the "Payment Date").
(2)	Section 8(b) of the Distribution Agreement for Soex's failure to make a $225,000 payment to the Company for the grant of the license and right to manufacture, sell, lease and distribute Products (excluding manufacture of MTM), and to use the Intellectual Property in connection therewith (the "License Payment Default" and, together with the Distribution Payment Default, the "Payment Default") in accordance with the terms set forth in the Distribution Agreement. Such payment was due on the Payment Date.
(3)	Section 15(b) of the Distribution Agreement for Soex's failure to issue to the Company 25% of the equity (the "Equity Default") of SOEX (Beijing) Environmental Protection Technology Company Limited (the "China Subsidiary").

As a result of the above, we terminated the Soex Distribution Agreement. As provided in Section 14(e) of the Soex Distribution Agreement, the Company has the right to enforce any obligation due to us by Soex. As a result, Soex still must (a) pay the remaining $450,000 due under the Distribution Agreement and the amount of Royalties due, plus interest at 1.5% per month (18% per year) with interest accruing from the date that payment was due and (b) issue to us 25% of the equity of SOEX (Beijing) Environmental Protection Technology Company Limited. As provided in Section 14(b), neither us nor Soex shall be liable for compensation, reimbursement or damages due to loss of profits on sales or anticipated sales or losses due to expenditures, investments or commitments made or in connection with the establishment, development or maintenance of the business.

The Soex Litigation was moved to the U.S. District Court for the Middle District of Florida where Soex has instituted a counterclaim (Civil Docket Case #: 8:15-CV-02362-MSS-EAJ). On September 19, 2018, a pre-trial conference was held in Tampa finding a trial date set for October 22, 2018. The trial for the original case was held between October 22 and 24, 2018. The jury at the conclusion of the trial did not award monetary damages to either party for claims or counterclaims.

On October 24, 2018, the Company initiated a third lawsuit against an affiliate of Soex, Zhongshan Trans-Tech New Material Technology Co. Ltd. Zhongshan, China, (“Transtech”), and the Chairperson of the affiliate and Soex, based on new information learned by the Company. The Company will seek maximum relief and damages for this on-going and growing illegal misuse the Company’s Intellectual Property. The Company feels this third action will lead in a judgment in favor of the Company. 

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Subsequent Event

6 Months Ended

Jun. 30, 2019

Related Party Transactions

Note 11. Subsequent Event

No material events have occurred after June 30, 2019 that requires recognition or disclosure in the financial statements except as follows:

Subsequent to June 30, 2019, the Company issued 116,848,911 shares of common stock upon the conversion of $48,674 principal amount of notes and related accrued interest of $2,866.

On July 3, 2019, the Company issued a convertible note with a face amount of $100,000. The note and related accrued interest are convertible, at the option of the holder, into shares of the Company’s common stock at the conversion price of 60% of the lowest trading price for 15 days prior to conversion. The note bears interest at 8% per year and matures on July 3, 2020. The Company incurred costs of $5,000 which are being amortized over the life of the note. The Company received cash proceeds of $95,000.

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Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2019

Significant Accounting Policies (Policies)

Use of estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Significant estimates underlying the Company’s reported financial position and results of operations include the allowance for doubtful accounts, fair value of stock-based compensation, fair value of derivative liabilities, valuation allowance on deferred taxes and the warranty reserve.

Cash and cash equivalents

For the purposes of the Statements of Cash Flows, the Company considers all highly liquid debt instruments with a maturity of three months or less to be cash equivalents. Cash and cash equivalents are maintained at financial institutions and, at times, balances may exceed federally insured limits. The Company has never experienced losses related to these balances.

Fair Value of Financial Instruments

The Company’s financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, deferred revenue, customer deposits and notes payable are carried at historical cost. At June 30, 2019 and December 31, 2018, the carrying amounts of these instruments approximated their fair values because of the short-term nature of these instruments.

Inventory

Inventory consists of raw materials, work-in-process and finished goods and is stated at the lower of cost, determined by first-in, first-out method, or market. Market is determined based on the net realizable value, with appropriate consideration given to obsolescence, excessive levels, deterioration and other factors. At June 30, 2019 and December 31, 2018, the Company had $101,154 and $40,341 of raw materials, $5,031 and $12,191 of in-process inventory, and $5,443 and $652 of finished inventory, respectively. A reserve is recorded for any inventory deemed excessive or obsolete. No reserve is considered necessary at June 30, 2019 and December 31, 2018.

Property and equipment

Property and equipment are recorded at cost. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets ranging from 3 to 7 years. Leasehold improvements are amortized over the shorter of their estimated useful lives of 5 years or the related lease term. Depreciation expense was $2,856 and $9,865 for the three months ended June 30, 2019 and 2018, respectively, and $12,722 and $19,731 for the six months ended June 30, 2019 and 2018, respectively. Gains and losses upon disposition are reflected in the Statements of Operations in the period of disposition. Maintenance and repair expenditures are charged to expense as incurred.

Intangible assets

Identified intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The Company’s existing intangible assets consist solely of patents. Patents are amortized over their estimated useful or economic lives of 17 to 20 years. Patent amortization expense was $5,805 and $11,925 for the three months ended June 30, 2019 and 2018, respectively and $12,309 and $12,302 for the six months ended June 30, 2019 and 2018, respectively. Based on current capitalized costs, total patent amortization expense is estimated to be approximately $22,000 per year for the next five years and thereafter.

Research and development expenses and funding proceeds

Expenditures for research and development are expensed as incurred. The Company incurred research and development costs of $39,957 and $81,098 for the three months ended June 30, 2019 and 2018, respectively and $114,644 and $165,227 for the six months ended June 30, 2019 and 2018, respectively. The Company accounts for proceeds received from government funding for research as a reduction in research and development costs. The Company recorded proceeds against research and development expenses on the Statements of Operations of $(24,109) and $16,349 for the three months ended June 30, 2019 and 2018, respectively and $(1,191) and $25,015 for the six months ended June 30, 2019 and 2018, respectively.

Revenue recognition

The Company has adopted the new revenue recognition guidelines in accordance with ASC 606, Revenue from Contracts with Customers (ASC 606), commencing from the period under this report. The Company analyzes its contracts to assess that they are within the scope and in accordance with ASC 606. In determining the appropriate amount of revenue to be recognized as the Company fulfills its obligations under each of its agreements, whether for goods and services or licensing, the Company performs the following steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations based on estimated selling prices; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. The Company acts as a principal in its revenue transactions as the Company is the primary obligor in the transactions. Generally, the Company recognizes revenue for its products upon shipment to customers, provided no significant obligations remain and collection is probable.

In certain instances, the Company’s ConsERV system product may carry a limited warranty of up to two years for all parts contained therein with the exception of the energy recovery ventilator core produced and sold by the Company. The distributor of the ConsERV system may carry a limited warranty of up to ten years. The limited warranty includes replacement of defective parts for the ConsERV system and includes workmanship and material failure for the ConsERV core. The Company recorded an accrual of $91,531 for future warranty expenses at June 30, 2019 and December 31, 2018, which is included in accrued expenses, other. 

Royalty revenue is recognized as earned. The Company recognized royalty revenue of $0 for the three and six months ended June 30, 2019 and 2018, respectively. Revenue derived from the sale of licenses is deferred and recognized as license fee revenue on a straight-line basis over the life of the license, or until the license arrangement is terminated. The Company recognized license fee revenue of $12,500 and $12,500 for the three months ended June 30, 2019 and 2018, respectively and $25,000 and $25,000 for the three months ended June 30, 2019 and 2018, respectively.

The Company accounts for revenue arrangements with multiple elements under the provisions of the Financial Accounting Standards Boards (FASB) Accounting Standards Codification (ASC) Topic 605-25, “Revenue Recognition-Multiple-Element Arrangements.” In order to account for these agreements, the Company must identify the deliverables included within the agreement and evaluate which deliverables represent separate units of accounting based on if certain criteria are met, including whether the delivered element has stand-alone value to the licensee. The consideration received is allocated among the separate units of accounting, and the applicable revenue recognition criteria are applied to each of the separate units.

In December 2017, the Company and Zhejiang MENRED Environmental Tech Co, Ltd., Zhejiang Province, China (“Menred”), entered into a License and Supply Agreement (the “Agreement”), effective December 21, 2017. Pursuant to the Agreement, the Company licensed certain intellectual property and improvements to Menred, for use in the manufacture and sale of energy recovery ventilators (“ERV”) and certain other HVAC systems for installation in commercial, residential or industrial buildings in China. Menred also agreed to purchase its requirements of certain products from the Company for Menred’s use, pursuant to the terms and conditions of the Agreement. Menred will also pay royalties, as defined, to the Company on a quarterly basis, based on price and production volume as provided by Menred. No royalties are due within the first year of the Agreement. Also pursuant to the Agreement, the Company is required to purchase 50,000 square meters of Product from Menred for delivery as an annual minimum with a 10,000 square meter minimum order quantity per delivery. The Agreement has a ten-year term with mutually agreed upon five-year extensions.

Shipping and handling fees billed to customers are included in revenue. Shipping and handling fees associated with freight are generally included in cost of revenue. 

Derivative liability

The Company has financial instruments that are considered derivatives or contain embedded features subject to derivative accounting. Embedded derivatives are valued separately from the host instrument and are recognized as derivative liabilities in the Company’s balance sheet. The Company measures these instruments at their estimated fair value and recognizes changes in their estimated fair value in results of operations during the period of change.

Fair Value Measurements

The Company accounts for financial instruments in accordance with FASB Accounting Standards Codification (ASC) 820 “Fair value Measurement and Disclosures” (ASC 820). ASC 820 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs).

The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:

· Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

· Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g. interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

· Level 3 - Inputs that are both significant to the fair value measurement and unobservable.

A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. The Company has recorded a derivative liability for its convertible notes which contain variable conversion prices. The table below summarizes the fair values of our financial liabilities as of June 30, 2019:

	Fair Value at June 30,		Fair Value Measurement Using
	2019		Level 1		Level 2		Level 3
Derivative liability	$	886,463	$	-	$	-	$	886,463

The reconciliation of the derivative liability measured at fair value on a recurring basis using unobservable inputs (Level 3) is as follows for the six months ended June 30, 2019:

Balance at beginning of period	$	1,280,188
Additions to derivative instruments		262,223
Extinguished derivative liability		(375,027	)
Gain on change in fair value of derivative liability		(280,921	)
Balance at end of period	$	886,463

Earnings (loss) per share

Basic income (loss) per share is computed by dividing net income (loss) attributable to common stockholders by the weighted average common shares outstanding for the period. Diluted loss per share is computed giving effect to all potentially dilutive common shares. Potentially dilutive common shares may consist of incremental shares issuable upon the exercise of stock options and warrants. In periods in which a net loss has been incurred, all potentially dilutive common shares are considered anti-dilutive and are excluded from the calculation. Common share equivalents of 797,100,504 and 60,878,439 were excluded from the computation of diluted earnings per share for the three and six months ended June 30, 2019 and 2018, respectively, because their effect is anti-dilutive.

Recent Accounting Pronouncements

– There are new accounting pronouncements issued by the Financial Accounting Standards Board (“FASB”) which are have been adopted, or not yet effective as follows:

In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases. The new standard establishes a right-of-use (ROU) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement.

The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The adoption of this ASU did not have a material effect on the Company's financial statements. 

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Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2019

Significant Accounting Policies (Tables)

Derivative Financial Instruments

	Fair Value at June 30,		Fair Value Measurement Using
	2019		Level 1		Level 2		Level 3
Derivative liability	$	886,463	$	-	$	-	$	886,463

Reconciliation of derivative liability

Balance at beginning of period	$	1,280,188
Additions to derivative instruments		262,223
Extinguished derivative liability		(375,027	)
Gain on change in fair value of derivative liability		(280,921	)
Balance at end of period	$	886,463

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Accrued Expenses, Other (Tables)

6 Months Ended

Jun. 30, 2019

Accrued Expenses, Other (Tables)

Accrued Expenses

	June 30, 2019		December 31, 2018
Accrued expenses, other	$	208,278	$	174,489
Accrued interest		611,675		436,581
Accrued warranty costs		91,531		91,531
	$	911,484	$	702,601

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Convertible Notes Payable (Tables)

6 Months Ended

Jun. 30, 2019

Convertible Notes Payable (Tables)

Convertible Notes Payable

	June 30, 2019			December 31, 2018
Convertible notes payable, bearing interest at 8%-10%	$	1,226,490		$	1,284,250
Unamortized debt discount		(224,344	)		(440,315	)
Unamortized deferred debt issuance cost		(15,739	)		(34,738	)
Total	$	986,407		$	809,197
Current portion		986,407			809,197

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Background Information (Details Narrative)	6 Months Ended
	Jun. 30, 2019
Background Information (Details Narrative)
Date of incorporation	Apr. 1993
State of incorporation	New York

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Going Concern and Management's Plans (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Mar. 31, 2019	Dec. 31, 2018	Mar. 31, 2018	Dec. 31, 2017
Going Concern and Management's Plans (Details Narrative)
Net loss	$ (488,610)	$ (670,091)	$ (1,052,067)	$ (1,378,501)
Accumulated deficit	(51,189,257)		(51,189,257)			$ (50,137,190)
Stockholders' deficit	(7,208,157)	(5,195,027)	(7,208,157)	(5,195,027)	$ (7,251,000)	(6,801,397)	$ (4,873,861)	$ (4,165,451)
Cash and cash equivalents	$ 15,742	$ 123,943	15,742	123,943		$ 29,300		$ 122,036
Net cash used by operating activities			$ (287,431)	$ (643,353)

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Significant Accounting Policies (Details 1) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Derivative Liability	$ 886,463	$ 1,280,188
Level 1 [Member]
Derivative Liability
Level 2 [Member]
Derivative Liability
Level 3 [Member]
Derivative Liability	$ 886,463

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Significant Accounting Policies (Details 2) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Significant Accounting Policies (Details 2)
Balance at beginning of period			$ 1,280,188
Additions to derivative instruments			262,223
Extinguished derivative liabilities			(375,027)
Change in fair value of derivative liability	$ (209,015)	$ (86,967)	(280,921)	$ 21,607
Balance at end of period	$ 886,463		$ 886,463

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Significant Accounting Policies (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Inventory raw materials	$ 101,154		$ 101,154		$ 40,341
Inventory in process	5,031		5,031		12,191
Inventory finished goods	5,443		5,443		$ 652
Depreciation and amortization expense	2,856	$ 9,865	12,722	$ 19,731
Patent amortization expense	5,805	11,925	12,309	12,302
Future amortization expense, 2019	22,000		22,000
Future amortization expense, 2020	22,000		22,000
Future amortization expense, 2021	22,000		22,000
Future amortization expense, 2022	22,000		22,000
Future amortization expense, 2023	22,000		22,000
Future amortization expense, thereafter	22,000		22,000
Research and development costs	39,957	81,098	114,644	165,227
Research and development expenses, net of government grant	(24,109)	16,349	(1,191)	25,015
License revenue	$ 12,500	$ 12,500	$ 25,000	$ 25,000
Common share excluded from diluted earnings per share	797,100,504	60,878,439	797,100,504	60,878,439
Description for product warranty			In certain instances, the Company’s ConsERV system product may carry a limited warranty of up to two years for all parts contained therein with the exception of the energy recovery ventilator core produced and sold by the Company. The distributor of the ConsERV system may carry a limited warranty of up to ten years.
Leasehold Improvements [Member]
Property plant and equipment, estimated useful lives			The shorter of their estimated useful lives of 5 years or the related lease term.
Minimum [Member]
Estimated useful lives of patents			17 years
Property and equipment estimated useful life			3 years
Maximum [Member]
Estimated useful lives of patents			20 years
Property and equipment estimated useful life			7 years

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Accrued Expenses (Details) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Accrued Expenses (Details)
Accrued expenses, other	$ 208,278	$ 174,489
Accrued interest	611,675	436,581
Accrued warranty costs	91,531	91,531
Accrued Expenses	$ 911,484	$ 702,601

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Related Party Transactions (Details Narrative) - USD ($)	1 Months Ended			3 Months Ended		6 Months Ended		12 Months Ended
	Jul. 03, 2019	Jan. 28, 2019	Jun. 24, 2016	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2017	Dec. 31, 2018
Rent expense				$ 12,198	$ 12,198	$ 24,396	$ 24,396
Lease term description						The lease term will terminate upon 30 days’ written notice from landlord or 90 days written termination from us.
Expected life				10 years		10 years
Warrants issued for finance cost				$ 141,844		$ 25,320
Additional proceeds				100,000
Debt instrument maturity date	Jul. 03, 2020
Chief Executive Officer [Member]
Accrued compensation				1,835,627		1,835,627			$ 1,772,623
Loan And Security Agreement [Member] | Patricia Tangredi [Member]
Senior secured Promissory Note			$ 150,000
Senior secured debt, minimum interest payment			2,000
Principal loan amount			$ 150,000	$ 1,501,000		$ 1,501,000
Debt instrument maturity date		Aug. 20, 2019	Oct. 31, 2016	May 30, 2019		Aug. 20, 2019
Interest expense				$ 42,901	$ 39,851	$ 84,356	$ 79,264
Accrued interest				$ 346,257		$ 346,257			$ 261,901
Description for the terms of repayment of senior debt			The Company is to pay the Holder the principal amount of $150,000 plus all interest due thereon in accordance with terms and conditions of the Security Agreement on the earlier of: (i) the date upon which the Company secures funds, regardless of source, equal to or exceeding, in the aggregate, $1,000,000 or (ii) October 31, 2016 (the “Maturity Date”).
Issuance of common stock in lieu of cash payment to related party, Shares								480,000
Issuance of common stock in lieu of cash payment to related party, value								$ 17,200
Due to related party								$ 15,400
Loan And Security Agreement [Member] | Patricia Tangredi [Member] | Warrant [Member]
Shares issuable upon exercise of warrants or rights				40,000,000		28,250,000
Exercise price				$ 0.01		$ 0.01
Exercise period		10 years		10 years		10 years
Building [Member]
Monthly rent expense						$ 4,066

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Equity Transactions (Details Narrative)		3 Months Ended	6 Months Ended
	Nov. 01, 2018 $ / shares shares	Jun. 30, 2019 USD ($) integer $ / shares shares	Jun. 30, 2019 USD ($) integer $ / shares shares	Dec. 31, 2018 $ / shares shares
Shares issued for finance cost, Amount | $			$ 10,000
Accrued interest | $			$ 12,846
Common stock par value | $ / shares		$ 0.01	$ 0.01	$ 0.01
Shares issued for finance cost, Shares			1,100,000
Common stock shares authorized		1,100,000,000	1,100,000,000	1,100,000,000
Preferred stock, shares issued		0	0	0
Common stock shares issued upon conversion of debt			101,725,726
Debt instrument converted amount, principal | $			$ 179,080
Equity Transactions [Member]
Preferred stock shares authorized		10,000,000	10,000,000
Preferred stock, par value | $ / shares		$ 0.01	$ 0.01
Preferred Class A [Member]
Conversion price description			75% of the average closing price for the 30 trading days prior to the election to convert. At no time will the Company convert any of the Stated Amount into common stock if that would result in the Holder beneficially owning more than 49% of the sum of the voting power of the Company’s outstanding shares of common stock plus the voting power of the Class A Preferred Stock.
Preferred stock shares authorized		2,000,000	2,000,000
Preferred stock, number of votes | integer		150	150
Preferred Class B [Member]
Preferred stock, number of votes | integer		150	150
Voting right description			equal to 51% of the votes to approve certain corporate actions,
Preferred stock shares authorized		10,000	10,000
Class B Redeemable Preferred Stock [Member] | Timothy N. Tangredi [Member]
Preferred stock, shares issued	10
Preferred stock, par value | $ / shares	$ 0.01
Preferred stock redemption price per share | $ / shares		$ 0.01	$ 0.01
Preferred Stock, stated value | $ / shares	$ 1.50
Preferred stock description	in exchange for $15, pursuant to approval of the Board of Directors of the Company.

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Convertible Notes Payable (Details) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Convertible Notes Payable (Details)
Convertible notes payable, bearing interest at 8%-10%	$ 1,226,490	$ 1,284,250
Unamortized debt discount	(224,344)	(440,315)
Unamortized deferred debt issuance cost	(15,739)	(34,738)
Total	986,407	809,197
Current portion	$ 986,407	$ 809,197

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Convertible Notes Payable (Details Narrative) - USD ($)	1 Months Ended		3 Months Ended		6 Months Ended		12 Months Ended
	Jul. 03, 2019	Feb. 20, 2019	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Conversion amount					$ 179,080
Accured interest					12,846
Cash payment					33,680
Debt issue costs			$ 12,723	$ 3,357	26,824	$ 5,971
Debt discount			158,186	68,672	327,885	125,756
Interest expense			(396,531)	$ (262,353)	(836,845)	(489,712)
Accrued interest expenses					281,725	271,328
Maturity date of convertible notes payable	Jul. 03, 2020
Cash proceeds	$ 95,000
Debt discount					327,885	$ 125,756
2018 Notes [Member]
Convertible notes payable			1,070,490		1,070,490
Accrued interest expenses			27,300
Maturity date description							The notes all mature during 2019.
February 2019 Note [Member]
Interest expense			7,844		5,244
Convertible notes payable		$ 155,000
Accrued interest expenses			$ 27,300
Maturity date of convertible notes payable		Feb. 20, 2019
Original issue discount		$ 12,500
Common stock issuable. shares		1,100,000
Common stock issuable. value		$ 10,000
Cash proceeds		$ 142,500
Description of conversion price		Conversion price of 60% of the lowest trading price for 15 days prior to conversion.
TermsOfExtensionsdescription					Pursuant to the terms of the extensions, we have agreed to issue one million shares of common stock for each month that the notes are outstanding, commencing in April 2019. The shares have not been issued at June 30, 2019. We have accrued $27,300 as interest expense during the three months ended June 30, 2019 for the 9 million shares due for the extensions.
Debt discount					$ 142,500

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Derivative Liabilities (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Fair value of embedded derivative	$ 270,498		$ 270,498
Expected life			8 months
Change in fair value of derivative recorded income/expense	$ 49,137		$ 33,870
Debt instrument converte amount, principal			179,080
Debt instrument converte amount, accrued interest			$ 33,680
Common stock shares issued upon conversion of debt			101,725,726
Gain on change in fair value of derivative liability			$ 375,027
Accrued interest	12,846		12,846
Interest expense	(396,531)	$ (262,353)	(836,845)	$ (489,712)
Accrued interest expenses			281,725	$ 271,328
2018 Notes [Member]
Fair value of embedded derivative	615,965		615,965
Change in fair value of derivative recorded income/expense	330,058		175,145
Interest expense	40,862		$ 18,247
2018 Notes [Member] | Maximum [Member]
Expected life			5 months
2018 Notes [Member] | Minimum [Member]
Expected life			1 month
February 2019 Note [Member]
Interest expense	7,844		$ 5,244
Convertible notes payable	1,071,490		1,071,490
Accrued interest expenses	$ 27,300
TermsOfExtensionsdescription			Pursuant to the terms of the extensions, we have agreed to issue one million shares of common stock for each month that the notes are outstanding, commencing in April 2019. The shares have not been issued at June 30, 2019. We have accrued $27,300 as interest expense during the three months ended June 30, 2019 for the 9 million shares due for the extensions.

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Deferred Revenue (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2017	Dec. 31, 2018
License revenue	$ 12,500	$ 12,500	$ 25,000	$ 25,000
Deferred revenue	$ 423,656		$ 423,656			$ 448,656
Zhejiang Province [Member]
License and supply agreement description					The Company is required to purchase 50,000 square meters of Product from Menred for delivery as an annual minimum with a 10,000 square meter minimum order quantity per delivery. The License and Supply Agreement has a ten-year term with mutually agreed upon five-year extensions

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Litigation (Details Narrative) - USD ($)		1 Months Ended
	Jul. 08, 2015	Apr. 24, 2014	Sep. 30, 2017	Sep. 30, 2015
Soex [Member]
Royalty payments paid		$ 500,000
Royalty received		$ 50,000
Payment due date	Oct. 20, 2014
Failure to make payment	$ 225,000
Soex [Member] | Securities Purchase Agreement [Member]
Cancellation of shares issued				37,500,000
Soex [Member] | Employment Agreement [Member]
Remaining balance to pay			$ 450,000
Zan [Member]
Failure to make payment	$ 225,000
Zan [Member] | Securities Purchase Agreement [Member]
Cancellation of shares issued				3,750,000

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Subsequent Event (Details Narrative) - USD ($)	1 Months Ended	6 Months Ended
	Jul. 03, 2019	Jun. 30, 2019
Face amount of convertible note	$ 100,000
Maturity date of convertible notes payable	Jul. 03, 2020
Incurred cost	$ 5,000
Proceeds for cash	$ 95,000
Subsequent Event [Member]
Debt conversion converted instrument, shares issued		116,848,911
Debt conversion converted amount, principal		$ 48,674
Debt conversion converted amount, accrued interest		$ 2,866