Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Apr. 11, 2014 | Jun. 28, 2013 | |
Document And Entity Information | |||
Entity Registrant Name | PREMIER HOLDING CORP. | ||
Entity Central Index Key | 1030916 | ||
Document Type | 10-K | ||
Document Period End Date | 31-Dec-13 | ||
Amendment Flag | TRUE | ||
Current Fiscal Year End Date | -19 | ||
Is Entity a Well-known Seasoned Issuer? | No | ||
Is Entity a Voluntary Filer? | No | ||
Is Entity's Reporting Status Current? | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $1,094,817 | ||
Entity Common Stock, Shares Outstanding | 148,697,016 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2013 | ||
Amendment description | Amendment is to revise financial statements |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Current assets: | ||
Cash | $781,569 | $44,311 |
Accounts Receivable | 438,976 | 0 |
Prepaid expenses | 13,134 | 15,467 |
Total current assets | 1,233,679 | 59,778 |
Notes Receivable | 869,000 | 0 |
Vehicles, net | 19,350 | 0 |
Intangible assets, net | 201,366 | 269,980 |
Goodwill | 4,555,750 | 138,000 |
Other assets | 0 | 52,500 |
Total Assets | 6,879,145 | 520,258 |
Current liabilities: | ||
Accounts payable and accrued liabilities | 315,063 | 42,746 |
Accrued commissions | 117,685 | 0 |
Related party payable | 86,138 | 120,098 |
Note payable | 32,000 | 0 |
Liabilities of discontinued operations | 0 | 116,138 |
Total current liabilities | 550,886 | 278,982 |
Stockholders' Equity: | ||
Common Stock, 100,000,000 shares authorized, par value $.0001, 151,003,328 and 55,794,549, respectively, issued and outstanding as of December 31, 2013 and 2012, respectively | 15,101 | 5,580 |
Common Stock Payable | 0 | 210,000 |
Additional Paid-in-Capital | 19,639,399 | 9,167,625 |
Accumulated deficit | -13,146,885 | -9,141,928 |
Total Premier Holding Corporation's Equity | 6,507,615 | 241,276 |
Non-controlling interest | -179,356 | 0 |
Total Stockholders' Equity | 6,328,259 | 241,276 |
Total Liabilities and Shareholders' Equity | $6,879,145 | $520,258 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Stockholders' Equity: | ||
Common stock, par value | $0.00 | $0.00 |
Common stock, authorized shares | 100,000,000 | 100,000,000 |
Common stock, issued shares | 151,003,328 | 55,794,549 |
Common stock, outstanding shares | 151,003,328 | 55,794,549 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Income Statement [Abstract] | ||
Revenues | $1,804,980 | $0 |
Cost of Sales | 39,214 | 0 |
Gross Profit | 1,765,766 | 0 |
Operating expenses | ||
Selling, general and administrative | 6,955,779 | 1,357,165 |
Total operating expenses | 6,955,779 | 1,357,165 |
Operating loss | -5,190,013 | -1,357,165 |
Other expense: | ||
Interest expense | 0 | -1,295 |
Total other expense | 0 | -1,295 |
Loss before income taxes, non-controlling interest, and discontinued operations | -5,190,013 | -1,358,460 |
Income taxes | 0 | 0 |
Loss before, non-controlling interest, and discontinued operations | -5,190,013 | -1,358,460 |
Income / (Loss) from discontinued operations | 985,138 | -756,912 |
Income (loss) | -4,204,875 | -2,115,372 |
Net loss attributable to non-controlling interest | 199,918 | 0 |
Net loss attibutable to Premier Holding Corporation | -4,004,957 | -2,115,372 |
Net Loss Attributable to Premier Holding Corporation per share - basic and diluted | ||
Loss attributable to continuing operations | -4,990,095 | -1,358,461 |
Net Loss per common share - basic and diluted | ($0.04) | ($0.03) |
Net Loss Attributable to Premier Holding Corporation per share - basic and diluted | ||
Net income (Loss) from discontinued operations | $985,138 | ($756,912) |
Net income (Loss) per common share from discontinued operations - basic and diluted | $0.01 | ($0.02) |
Weighted average number of common shares outstanding during the period - basic and diluted | 111,847,320 | 47,892,487 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Cash flows from operating activities | ||
Net loss attributable to Premier Holding Corporation | ($4,004,957) | ($2,115,372) |
Adjustments to reconcile net loss to cash used in operations: | ||
Share based payments used for services | 2,073,115 | 475,930 |
Amortization and depreciation expense | 70,374 | 28,589 |
Imputed interest expense | 0 | 298 |
Loss attributable to non-controlling interest of consolidated subsidiary | -199,918 | 0 |
Change in operating assets and liabilities: | ||
Accounts receivable | -310,300 | 0 |
Prepaid expenses | 2,334 | -15,467 |
Other assets | 52,500 | 0 |
Accounts payable | 340,178 | 32,746 |
Net cash provided by discontinued operations | -985,138 | 756,912 |
Accrued expenses | 0 | 116,138 |
Net cash used in operating activities | -2,961,812 | -1,477,138 |
Investing activities: | ||
Purchase of vehicle | -21,109 | 0 |
Cash paid for acquisition of Active ES | 0 | -31,570 |
Payments for Investment in the Power Company | 0 | -52,500 |
Net cash used in investing activities | -21,109 | -84,070 |
Financing activities: | ||
Advance from related party payable | 0 | 120,098 |
Proceeds from issuance of common stock | 3,698,180 | 1,230,473 |
Proceeds/payments - notes payable | 22,000 | -5,000 |
Net cash provided by financing activities | 3,720,180 | 1,345,571 |
Net increase (decrease) in cash | 737,259 | -215,637 |
Cash at beginning of period | 44,311 | 259,948 |
Cash at end of period | 781,570 | 44,311 |
Supplemental Schedule of Non-Cash Investing and Financing Activities | ||
Common stock issued for acquired assets | 4,500,000 | 390,000 |
Note receivable related to sale of subsidiary | 869,000 | 0 |
Supplemental Cash Flow Information | ||
Interest paid | 0 | 0 |
Income taxes paid | $0 | $0 |
Consolidated_Statements_of_Sha
Consolidated Statements of Shareholder's Equity (USD $) | Common Stock | Additional Paid-in Capital | Common Stock Payable | Minority Interest in Subsidiary | Accumulated Deficit | Deficit Accumulated During Development Stage | Total |
Beginning balance, value at Dec. 31, 2011 | $4,401 | $7,282,103 | ($7,026,556) | ($3,293,586) | $259,948 | ||
Beginning balance, shares at Dec. 31, 2011 | 44,007,020 | ||||||
Common stock options and warrants issued for services | 115,930 | 115,930 | |||||
Common stock issued after exercise of warrants, shares | 375,000 | ||||||
Common stock issued after exercise of warrants, value | 38 | 4,420 | 4,458 | ||||
Common stock issued for services, shares | 2,740,000 | ||||||
Common stock issued for services, value | 274 | 359,726 | 360,000 | ||||
Common stock issued for cash, shares | 7,922,529 | ||||||
Common stock issued for cash, value | 792 | 1,225,223 | 1,226,015 | ||||
Common stock issued for acquisition of Active ES, shares | 750,000 | ||||||
Common stock issued for acquisition of Active ES, value | 75 | 179,925 | 180,000 | ||||
Common stock payable for acquisition of Active ES | 210,000 | 210,000 | |||||
Imputed interest | 298 | 298 | |||||
Net loss | -2,115,372 | -2,115,372 | -2,115,372 | ||||
Ending balance, value at Dec. 31, 2012 | 5,580 | 9,167,625 | 210,000 | -9,141,928 | -5,408,958 | 241,276 | |
Ending balance, shares at Dec. 31, 2012 | 55,794,549 | ||||||
Common stock options and warrants issued for services | 37,682 | 37,682 | |||||
Common stock issued for services, shares | 10,639,362 | ||||||
Common stock issued for services, value | 1,064 | 2,034,369 | 2,035,433 | ||||
Common stock issued for cash, shares | 45,337,731 | ||||||
Common stock issued for cash, value | 4,534 | 3,107,205 | 3,111,739 | ||||
Common stock issued for acquisition of Active ES, shares | 875,000 | ||||||
Common stock issued for acquisition of Active ES, value | 88 | 209,912 | -210,000 | ||||
Common stock issued for cash with warrants, shares | 8,356,686 | ||||||
Common stock issued for cash with warrants, value | 836 | 585,606 | 586,441 | ||||
Minority interest in subsidiary | 20,562 | 20,562 | |||||
Shares for TPC, shares | 30,000,000 | ||||||
Shares for TPC, value | 3,000 | 4,497,000 | 4,500,000 | ||||
Net loss | -199,918 | -4,004,957 | -4,204,875 | ||||
Ending balance, value at Dec. 31, 2013 | $15,101 | $19,639,399 | $0 | ($179,356) | ($13,146,885) | ($5,408,958) | $6,328,259 |
Ending balance, shares at Dec. 31, 2013 | 151,003,328 |
1_DESCRIPTION_OF_BUSINESS
1. DESCRIPTION OF BUSINESS | 12 Months Ended |
Dec. 31, 2013 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NOTE 1 - DESCRIPTION OF BUSINESS | Premier Holding Corporation (“Premier”) is devoting substantially all of its efforts to establishing energy services companies. Premier was organized under the laws of the State of Nevada on October 18, 1971 under the name of Mr. Nevada, Inc. On November 13, 2008, Premier filed a Certificate of Amendment to Articles of Incorporation with the State of Nevada Secretary of State to change its name from OVM International Holding Corporation to Premier Holding Corporation. These businesses, which were started during 2012, are primarily focused on providing small and large-scale commercial companies with energy solutions to reduce the costs of utilities through consultations as well as product sales to complete those installations via shipment from inventory on hand to the customer site. Premier is organized with a holding company structure such that Premier provides financial and management expertise, which includes access to capital, financing, legal, insurance, mergers, acquisitions, joint ventures and management strategies. |
Premier’s wholly owned subsidiary Energy Efficiency Experts (“E3”) is a U.S. energy service company based in the Chicago area of Illinois offering energy efficiency products and services to commercial middle market companies, Fortune 500 brands, developers and management companies of large scale residential developments as well as the general public so long as the product and the solutions fit the market segment.. E3’s business is focused as an integrator of clean technology solutions in the U.S., with strategic expansion plans in Latin America, Asia and Europe. E3’s core business expects to deliver green solutions, branded specifically as E3, which include best-of-class alternative energy technology portfolio, and energy reduction technologies in smart lighting controls, LED lighting, battery storage power plants, energy and power control management systems, and other clean technologies specific to its market. | |
On February 28, 2013, Premier acquired an 80% interest in The Power Company USA, LLC (“TPC”) for 30,000,000 shares of Premier’s common stock valued at $4,500,000. TPC is based is a deregulated power broker which was originally formed as an Illinois limited liability company on November 29, 2010. TPC brokers power to both residential and commercial users in the 12 states that allow the distribution of deregulated power. |
2_SUMMARY_OF_SIGNIFICANT_ACCOU
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2013 | |
Accounting Policies [Abstract] | |
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Basis of Presentation |
The accompanying audited consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles ("U.S. GAAP"). | |
Principles of Consolidation | |
The audited consolidated financial statements include the accounts of Premier Holding Corporation, E3 and the accounts of THE POWER COMPANY USA, LLC as of and for the year ended December 31, 2013. All significant intercompany transactions have been eliminated in consolidation. | |
Use of Estimates | |
The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | |
Cash and Cash Equivalents | |
Cash and cash equivalents include short-term cash investments that have an initial maturity of 90 days or less. The Company had no cash equivalents as of and December 31, 2013 and 2012. | |
Revenue Recognition | |
The Company’s wholly owned Energy Efficiency Experts, Inc. and The Power Company USA, LLC. offer renewable energy production and energy efficiency products and services to both commercial middle market companies as well as residential customers. In accordance with the requirements of ASC 605-10-599, the Company recognizes revenue when (1) persuasive evidence of an arrangement exists (contracts); (2) delivery has occurred; (3) the seller’s price is fixed or determinable (per the customer’s contract); and (4) collectability is reasonably assured (based upon our credit policy). When consultations are provided to customers, the revenue is recognized at the completion of the service when collectability is reasonably assured. For products sold to customers revenue is recognized when title has passed to the customer and collectability is reasonably assured; and no further efforts are required. Revenue generated from commercial and residential electricity usage is supported by annual (or longer) contracts with users, which the Company earns commissions from power suppliers when executed. The commission revenue is recognized when the contract is signed, and the performance is completed, with an appropriate allowance for estimates cancellation. | |
Accounts Receivable | |
All accounts receivable are due thirty (30) days from the date billed. If the funds are not received within thirty (30) days the customer is contacted to arrange payment. The Company uses the allowance method to account for uncollectable accounts receivable. All accounts were considered collectible as of December 31, 2013 and no allowance for bad debts was considered necessary. | |
Non-controlling Interest | |
Non-controlling interests in our subsidiary is recorded as a component of our equity, separate from the parent’s equity. Purchase or sales of equity interests that do not result in a change of control are accounted for as equity transactions. Results of operations attributable to the non-controlling interest are included in our consolidated results of operations and, upon loss of control, the interest sold, as well as interest retained, if any, will be reported at fair value with any gain or loss recognized in earnings. | |
Earnings/Loss Per Share | |
The Company has adopted the FASB ASC Topic 260 regarding earnings / loss per share, which provides for calculation of “basic” and “diluted” earnings / loss per share. Basic earnings / loss per share includes no dilution and is computed by dividing net income / loss available to common shareholders by the weighted average common shares outstanding for the period. Diluted earnings / loss per share reflect the potential dilution of securities that could share in the earnings of an entity similar to fully diluted earnings / loss per share. | |
Income Tax | |
Deferred income tax is provided for differences between the bases of assets and liabilities for financial and income tax reporting. A deferred tax asset, subject to a valuation allowance, is recognized for estimated future tax benefits of tax-basis operating losses being carried forward. Income taxes are provided based upon the liability method of accounting pursuant to the FASB ASC Topic 740-10-30 concerning Income Taxes. Under this approach, deferred income taxes are recorded to reflect the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each year-end. A valuation allowance is recorded against the deferred tax asset if management does not believe the Company has met the “more likely than not” standard imposed by the FASB ASC Topic 740-10-30 concerning Income Taxes to allow recognition of such an asset. | |
Stock-Based Compensation | |
We periodically issue stock options and warrants to employees and non-employees in non-capital raising transactions for services and for financing costs. We account for stock option and warrant grants issued and vesting to employees based on Financial Accounting Standards Board (FASB) ASC Topic 718, “Compensation – Stock Compensation”, whereas the award is measured at its fair value at the date of grant and is amortized ratably over the vesting period. We account for stock option and warrant grants issued and vesting to non-employees in accordance with ASC Topic 505, “Equity”, whereas the value of the stock compensation is based upon the measurement date as determined at either (a) the date at which a performance commitment is reached, or (b) at the date at which the necessary performance to earn the equity instruments is complete. | |
Goodwill and Other Intangible Assets | |
The Company periodically reviews the carrying value of intangible assets not subject to amortization, including goodwill, to determine whether impairment may exist. Goodwill and certain intangible assets are assessed annually, or when certain triggering events occur, for impairment using fair value measurement techniques. These events could include a significant change in the business climate, legal factors, a decline in operating performance, competition, sale or disposition of a significant portion of the business, or other factors. Specifically, goodwill impairment is determined using a two-step process. The first step of the goodwill impairment test is used to identify potential impairment by comparing the fair value of a reporting unit with its carrying amount, including goodwill. Premier uses level 3 inputs and a discounted cash flow methodology to estimate the fair value of a reporting unit. A discounted cash flow analysis requires one to make various judgmental assumptions including assumptions about future cash flows, growth rates, and discount rates. The assumptions about future cash flows and growth rates are based on the Company’s budget and long-term plans. Discount rate assumptions are based on an assessment of the risk inherent in the respective reporting units. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired and the second step of the impairment test is unnecessary. If the carrying amount of a reporting unit exceeds its fair value, the second step of the goodwill impairment test is performed to measure the amount of impairment loss, if any. The second step of the goodwill impairment test compares the implied fair value of the reporting unit’s goodwill with the carrying amount of that goodwill. If the carrying amount of the reporting unit’s goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination. That is, the fair value of the reporting unit is allocated to all of the assets and liabilities of that unit (including any unrecognized intangible assets) as if the reporting unit had been acquired in a business combination and the fair value of the reporting unit was the purchase price paid to acquire the reporting unit. | |
As of December 31, 2013, amortizable intangible assets consist of patents, trade names, trademarks, domain names, website emails, and non-compete agreements, and contracts with suppliers and customers. See Note 4 for further information regarding the acquisition and amortization of these intangible assets. These intangibles are being amortized on a straight line basis over their estimated useful lives, two to ten years. | |
Fair Value Measurements | |
On January 1, 2011, Premier adopted guidance which defines fair value, establishes a framework for using fair value to measure financial assets and liabilities on a recurring basis, and expands disclosures about fair value measurements. Beginning on January 1, 2011, Premier also applied the guidance to non-financial assets and liabilities measured at fair value on a non-recurring basis, which includes goodwill and intangible assets. The guidance establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of Premier. Unobservable inputs are inputs that reflect Premier’s assumptions of what market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the reliability of the inputs as follows: | |
Level 1 - Valuation is based upon unadjusted quoted market prices for identical assets or liabilities in active markets that Premier has the ability to access. | |
Level 2 - Valuation is based upon quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in inactive markets; or valuations based on models where the significant inputs are observable in the market. | |
Level 3 - Valuation is based on models where significant inputs are not observable. The unobservable inputs reflect Premier's own assumptions about the inputs that market participants would use. | |
Premier’s financial instruments consist of cash, accounts receivable, note receivable, accounts payable, related party payable and accrued liabilities. The estimated fair value of cash, accounts receivable, note receivable, accounts payable, related party payable and accrued liabilities approximate their carrying amounts due to the short-term nature of these instruments. | |
Certain non-financial assets are measured at fair value on a nonrecurring basis. Accordingly, these assets are not measured and adjusted to fair value on an ongoing basis but are subject to periodic impairment tests. These items primarily include long-lived assets, goodwill and other intangible assets. | |
Concentration of Credit Risk | |
The Company maintains its cash in multiple financial institutions. The Company limits the amount of credit exposure to each individual financial institution and places its temporary cash into investments of high credit quality with a financial institution that exceeds federally insured limits. The Company has not experienced any losses related to these balances and believes its credit risk to be minimal. | |
Gain from Discontinued Operations | |
Gain from discontinued operations of $985,138 for the nine months ended September 30, 2013 consists of the sale of both intangible assets in the form of sales opportunities and leads, and the assumption of liabilities from the discontinued operations to WEPOWER ECO Corp (an unrelated company). The gain is based upon the estimated value of the $5,000,000 note received in the transaction. The provisional amounts are subject to revision until the evaluations are completed to the extent that additional information is obtained about the facts and circumstances that existed as of the acquisition date. The preliminary appraised value of the note is $869,000; $116,138 consists of liabilities which were assumed by the acquirer in the transaction. | |
RECENTLY ISSUED AND ADOPTED ACCOUNTING PRONOUNCEMENTS | |
Adopted | |
In February 2013, the FASB issued ASU No. 2013-04, “Liabilities (Topic 405): Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation Is Fixed at the Reporting Date.” The amendments in ASU 2013-04 provide guidance for the recognition, measurement, and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this Update is fixed at the reporting date, except for obligations addressed within existing guidance in U.S. GAAP. The guidance requires an entity to measure those obligations as the sum of the amount the reporting entity agreed to pay on the basis of its arrangement among its co-obligors and any additional amount the reporting entity expects to pay on behalf of its co-obligors. The guidance in this Update also requires an entity to disclose the nature and amount of the obligation as well as other information about those obligations. The amendments in this standard are effective retrospectively for fiscal years, and interim periods within those years, beginning after December 15, 2013. We are evaluating the effect, if any, adoption of ASU No. 2013-04 will have on our consolidated financial statements and related disclosures. | |
In April 2013, the FASB issued ASU No. 2013-07, “Presentation of Financial Statements (Top 205): Liquidation Basis of Accounting.” The objective of ASU No. 2013-07 is to clarify when an entity should apply the liquidation basis of accounting and to provide principles for the measurement of assets and liabilities under the liquidation basis of accounting, as well as any required disclosures. The amendments in this standard is effective prospectively for entities that determine liquidation is imminent during annual reporting periods beginning after December 15, 2013, and interim reporting periods therein. We are evaluating the effect, if any, adoption of ASU No. 2013-07 will have on our consolidated financial statements and related disclosures. | |
Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force) and the United States Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future financial statements. |
3_GOING_CONCERN
3. GOING CONCERN | 12 Months Ended |
Dec. 31, 2013 | |
Going Concern | |
NOTE 3 - GOING CONCERN | The Company has sustained operating losses of $13,146,885 since inception. The Company’s continuation as a going concern is dependent on management’s ability to develop profitable operations, and / or obtain additional financing from its stockholders and / or other third parties. |
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern; however, the above conditions raise substantial doubt about the Company’s ability to do so. The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern. | |
If management projections are not met, the Company may have to reduce its operating expenses and to seek additional funding through debt and/or equity offerings. |
4_ACQUISITIONS_GOODWILL
4. ACQUISITIONS & GOODWILL | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Business Combinations [Abstract] | |||||
NOTE 4 - ACQUISITIONS & GOODWILL | Active ES Lighting Controls, Inc. Acquisition | ||||
On July 25, 2012, Premier acquired the assets of the Active ES Lighting Controls, Inc. (“AES”) business by completing the transactions contemplated under an asset purchase agreement dated July 25, 2012 (the “Agreement”) with AES. In accordance with the terms of the Agreement, the purchase price for the acquisition consisted of the following components: (i) 750,000 shares of Premier’s common stock issued at closing; (ii) $30,000 in cash paid at closing; (iii) a payable, due December 31, 2012, of Premier in the principal amount of $15,000; (v) contingent shares payable (payable 12 months after closing of the transaction) of a number of shares of common stock of Premier equal to 875,000 shares based upon the following contingencies: | |||||
A. | 175,000 shares of common stock if the volume weighted average price (“VWAP”) is below $2.00 for 30 consecutive trading days during the 12 months following the contingent period (begins after stock received in transaction has had restricted legend (section 144) removed and continues for nine months) | ||||
B. | 175,000 shares of common stock if the VWAP is below $1.00 for 60 consecutive trading days during the contingent period; | ||||
C. | 175,000 shares of common stock if the VWAP is below $0.80 for 60 consecutive trading days during the contingent period; | ||||
D. | 175,000 shares of common stock if the VWAP is below $0.60 for 60 consecutive trading days during the contingent period; | ||||
E. | 175,000 shares of common stock if the VWAP is below $0.40 for 60 consecutive trading days during the contingent period; | ||||
As of December 31, 2012, the dollar value of the contingent shares payable is $210,000, which is recorded as a common stock payable on the accompanying balance sheet. During the year ended December 31, 2013, the Company issued all the 875,000 shares to AES. | |||||
The acquisition has been accounted for as a asset purchase and the Company valued all assets and liabilities acquired at their fair values on the date of acquisition. | |||||
As of December 31, 2012, the marketing results of operations of AES products are included in the Company’s consolidated financial statements from the date of acquisition. The allocation of the purchase price to assets and liabilities based upon fair value determinations was as follows: | |||||
IP/Technology – patents | $ | 167,570 | |||
Non-compete agreement | 76,000 | ||||
Trademarks & Service Marks | 55,000 | ||||
Goodwill | 138,000 | ||||
Total purchase price | $ | 436,570 | |||
The purchase price consideration consisted of the following: | |||||
Cash | $ | 31,570 | |||
Note Payable | 15,000 | ||||
Common Stock | 180,000 | ||||
Common Stock Payable | 210,000 | ||||
Total purchase price | $ | 436,570 | |||
Estimated Useful Lives of Acquired Intangibles | |||||
The estimated useful lives (years) of the acquired intangibles are as follows | |||||
Useful Life | |||||
IP/Technology - Patents | 5 | ||||
Non-compete Agreement | 10 | ||||
Trademarks & Service Marks | 2 | ||||
Goodwill | N/A | ||||
The Power Company USA, LLC Share Exchange | |||||
On February 28, 2013 Premier acquired 80% of the outstanding membership units of the The Power Company USA, LLC, an Illinois limited liability company (“TPC” or “The Power Company”), a deregulated power broker in Illinois for thirty million 30,000,000 shares of Premier’s common stock valued at $4,500,000. The Power Company had over 14,000 residential and commercial customers. The initial accounting for the business combination is not complete because the evaluations necessary to assess the fair values of certain net assets acquired and the amount of goodwill to be recognized are still in process. The provisional amounts are subject to revision until the evaluations are completed to the extent that additional information is obtained about the facts and circumstances that existed as of the acquisition date. Any changes to the fair value assessments will affect the acquisition-date fair value of goodwill. | |||||
The changes in the carrying amount of goodwill for the year ended December 31, 2013, are as follows: | |||||
Balance as of January 1, 2013 | |||||
Goodwill - Active ES | $ | 138,000 | |||
Accumulated impairment losses | – | ||||
138,000 | |||||
Goodwill acquired during the year - TPC | 4,500,000 | ||||
Impairment losses | – | ||||
Goodwill related to 20% non-controlling interest | (82,250 | ) | |||
Balance as of December 31, 2013 | |||||
Goodwill | 4,555,750 | ||||
Accumulated impairment losses | – | ||||
$ | 4,555,750 | ||||
5_INTANGIBLES_ASSETS_NET
5. INTANGIBLES ASSETS, NET | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||
5. INTANGIBLES ASSETS, NET | The following table presents details of the Company’s total purchased intangible assets as of December 31, 2013: | ||||||||||||||||||||
For the years ended December 31, 2013 and 2012, the Company’s recorded amortization expense related to the purchased intangibles of $51,461 and $0, respectively. | |||||||||||||||||||||
Balance 12/31/2012 | Additions | Amortization | Impairment | Balance | |||||||||||||||||
12/31/13 | |||||||||||||||||||||
IP/Technology – Patents | $ | 153,607 | $ | – | $ | (33,515 | ) | $ | – | $ | 120,092 | ||||||||||
Non-compete Agreement | 72,832 | – | (7,600 | ) | – | 65,232 | |||||||||||||||
Trademarks & Service Marks | 43,542 | – | (27,500 | ) | – | 16,042 | |||||||||||||||
$ | 269,980 | $ | – | $ | (68,615 | ) | $ | – | $ | 201,366 | |||||||||||
6_RELATED_PARTY_TRANSACTIONS
6. RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2013 | |
Related Party Transactions [Abstract] | |
NOTE 6. RELATED PARTY TRANSACTIONS | During the year ended December 31, 2013, Mr. Letcavage (directly or through related entities) was paid $240,000 as compensation for his role as our CEO and CFO, and $37,500 for consulting, for a total of $277,500 and $661,319 for contract labor, including payments to Nexalin Technology specifically for the direct costs related to independent contractors performing sales lead generation (Nexalin Technology is in an unrelated business to the Company, and Mr. Letcavage is its president and shareholder), which were not reported as income. In addition, the Company has also paid $28,787 to iCapital Advisory for consulting services received during the year 2013. Mr. Letcavage is president and shareholder of iCapital Advisory. |
Additionally, we have also reviewed the facts and circumstance of our relationship with Nexalin Technology and iCapital Advisory and have assessed whether these two companies are variable interest entities (VIE). Based on the guidance provided in ASC 810-10-50-5(a), these two companies are not considered VIEs. The Company is not the primary beneficiary, whether those two companies have any income (losses) as of December 31, 2013, it would not be absorbed by Premier Holding Corporation. |
7_CAPITAL_STOCK_TRANSACTIONS
7. CAPITAL STOCK TRANSACTIONS | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Equity [Abstract] | |||||||||||||
NOTE 7 - CAPITAL STOCK TRANSACTIONS | Preferred Stock | ||||||||||||
On June 3, 2013, the Company filed a Certificate of Amendment of Articles of Incorporation with the State of Nevada Secretary of State giving it the authority to issue 50,000,000 shares of preferred stock with a par value of $0.0001 per share. | |||||||||||||
Common Stock | |||||||||||||
On February 28, 2013 the company acquired 80% of the outstanding membership units of The Power Company USA, LLC, an Illinois limited liability company (“TPC” or “The Power Company”), for thirty million 30,000,000 shares of Premier’s common stock valued at $4,500,000. This transaction was exempt from registration under the Securities Act of 1933, based upon Section 4(2) for transactions by the issuer not involving any public offering. | |||||||||||||
On June 3, 2013, the Company filed a Certificate of Amendment of Articles of Incorporation with the State of Nevada Secretary of State giving it the authority to issue 450,000,000 shares of common stock with a par value of $0.0001 per share. | |||||||||||||
From October 1, 2013 to December 31, 2013, the Company issued 10,639,362 shares of common stock to various consultants for services. A compensation expense of $2,035,433 was recorded during the period ended December 31, 2013. | |||||||||||||
During the year 2013, the Company entered into several of stock purchase agreements with various investors for sale of 45,337,731 shares of its common stock. The sales closed and cash of an aggregated amount $3,111,739 was received. | |||||||||||||
During the year 2013, the Company entered into difference series of stock purchase agreements for cash and with warrants attached for a total of 8,356,686 shares of the Company’s common stock for the sale of $586,441. | |||||||||||||
Common Stock Options | |||||||||||||
On February 20, 2013, the Company granted 75,000 stock options to a Director, Woodrow W. Clark II, to purchase shares at $0.25 per share. The options expire February 20, 2016 and vested on the grant date. The total estimated value using the Black-Scholes Model, based on a volatility rate of 468%, expected term of 2 years, risk free rate of 0.42 percent, and a call option value of $0.17, was $12,749. As the stock options were immediately vested, the stock expensed was $12,749 on that date and for the year ended December 31, 2013. | |||||||||||||
On February 20, 2013, the Company granted 75,000 stock options to a Director, Lane Harrison to purchase shares at $0.25 per share. The options expire February 20, 2016 and vested on the grant date. The total estimated value using the Black-Scholes Model, based on a volatility rate of 468%, expected term of 2 years, risk free rate of 0.42 percent, and a call option value of $0.17, was $12,749. As the stock options were immediately vested, the stock expensed was $12,749 on that date and for the year ended December 31, 2013. | |||||||||||||
On April 9, 2013, the Company modified the 75,000 stock options granted to a Director, Lane Harrison on February 20, 2013, to purchase shares at $0.25 per share, the option was modified entitling Mr. Harrison to purchase 100,000 shares at $0.10, on or before April 30, 2015. The stock option provided for cashless exercise term. The total estimated value using the Black-Scholes Model, based on a volatility rate of 470%, expected term of 2 years, risk free rate of 0.42 percent, and a call option value of $0.0882, was $10,285. The stock expensed was $10,285 on that date and for the year ended December 31, 2013. | |||||||||||||
On April 9, 2013, the Company modified the 75,000 stock options granted to a Director, Woodrow Clark on February 20, 2013, to purchase shares at $0.25 per share, the option was modified entitling Mr. Clark to purchase 100,000 shares at $0.10, on or before April 30, 2015. The stock option provided for cashless exercise term. The total estimated value using the Black-Scholes Model, based on a volatility rate of 470%, expected term of 2 years, risk free rate of 0.42 percent, and a call option value of $0.0882, was $10,287. The stock expensed was $10,287 on that date and for the year ended December 31, 2013. | |||||||||||||
A summary of option activity as of December 31, 2013 and changes during the year ended is presented below: | |||||||||||||
Number Outstanding | Weighted-Average Exercise Price Per Share | Weighted-Average Remaining Contractual Life (Years) | |||||||||||
Outstanding at January 1, 2013 | 150,000 | $ | 0.33 | 2.25 | |||||||||
Granted | 50,000 | 0.25 | 4 | ||||||||||
Exercised | – | – | – | ||||||||||
Canceled/forfeited/expired | – | ||||||||||||
Outstanding at December 31, 2013 | 200,000 | $ | 0.25 | 3.61 | |||||||||
Options nonvested and exercisable at December 31, 2013 | – | – | – | ||||||||||
Options vested and exercisable at December 31, 2013 | 200,000 | $ | 0.25 | 3.61 | |||||||||
Common Stock Warrants | |||||||||||||
During the year 2013, the Company has issued 8,356,686 shares of common stock with warrants attached for an aggregated price of $586,441 and the terms of the subscription were: for each 4 shares purchased, the purchaser received 2 warrants, one warrant with future price of $0.15 and a second warrant with a future price of $0.20, both warrants expire two years from the closing date (1,071,847 at $0.15 and 1,071,847 at $0.20). The total estimated value using the Black-Scholes model. | |||||||||||||
On December 31, 2013, 650,000 warrants were issued to Rick Weed with an exercise price of $0.225. The Company valued these warrants at $146,250, and $17,110 was recognized as expense in 2013. | |||||||||||||
A summary of non-employee warrant activity during the year ended as of December 31, 2013 is presented below: | |||||||||||||
Number Outstanding | Weighted-Average Exercise Price Per Share | Weighted-Average Remaining Contractual Life (Years) | |||||||||||
Outstanding at January 1, 2013 | 450,000 | $ | 0.57 | 2.59 | |||||||||
Granted | 2,793,694 | 0.175 | 1.85 | ||||||||||
Exercised | – | – | – | ||||||||||
Canceled/forfeited/expired | 450,000 | 0.057 | – | ||||||||||
Outstanding at December 31, 2013 | 2,793,694 | $ | 0.175 | 1.85 | |||||||||
Warrants vested and exercisable at December 31, 2013 | 2,793,694 | $ | 0.175 | 1.85 | |||||||||
8_DISCONTINUED_OPERATIONS
8. DISCONTINUED OPERATIONS | 12 Months Ended |
Dec. 31, 2013 | |
Discontinued Operations and Disposal Groups [Abstract] | |
NOTE 8 - DISCONTINUED OPERATIONS | The Company acquired assets from WEPOWER, LLC during 2011. WEPOWER, Ecolutions, Inc. was expected to offer clean energy products and services to commercial markets, developers, and management companies of large scale residential developments. In 2012, WEPOWER Ecolutions, Inc was classified as held for sale under the requirements of ASC 360-10-45-9, and therefore, the result of its operations are reported in discontinued operations in accordance with ASC 205-20-45-3. On January 7, 2013, Premier Holding Corporation (“PRHL”), acting through its wholly owned subsidiary, WEPOWER Ecolutions, Inc., completed the sale of assets under an Asset Purchase Agreement with WEPOWER Eco Corp., a newly formed entity, controlled by Kevin B. Donovan, PRHL’s former CEO. PRHL sold certain assets related solar energy, wind power projects, energy efficiency projects in real estate, and fuel efficiency for diesel and gasoline engines for a note payable for $5,000,000, no interest (valuation on the note is $869,000 by using the Enterprise Value with discounted cash flows method) WEPOWER Eco Corp. assumed $116,138 in liabilities, acquired three patents, six trademarks, and twenty-eight contracts. Further, PRHL and WEPOWER Eco Corp. agreed to certain exclusive business opportunities, fifteen exclusive opportunities and nineteen exclusive for nine months. A Mutual General Release between PRHL, WEPOWER Ecolutions, Inc., WEPOWER Eco Corp., and the former directors and officers, Kevin Donovan, Frank Schulte, and Thomas C. Lynch was signed, and executed on January 4, 2013 releasing all parties from all claims, from whatever source. |
9_SUBSEQUENT_EVENTS
9. SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2013 | |
Subsequent Events [Abstract] | |
NOTE 9. SUBSEQUENT EVENTS | Subsequent to the period ended December 31, 2013 the Company entered into a series of stock purchase agreements with accredited investors for the sale of 4,035,350 shares of its common stock, the sales closed and cash of $421,776 was received. Additionally, 24,818 shares of common stock were issued for services. There was no underwriter, no underwriting discounts or commissions, no general solicitation, no advertisement, and resale restrictions were imposed by placing a Rule 144 legend on the certificates. The persons who received securities have such knowledge in business and financial matters that he/she/it is capable of evaluating the merits and risks of the transaction. This transaction was exempt from registration under the Securities Act of 1933, based upon Section 4(2) for transactions by the issuer not involving any public offering. |
Subsequent to the period ended December 31, 2013 the Company settled a disagreement with a former employee. In 2013 Brian Manahan alleged a complaint related to shares previously issued in 2012 related to his employment. On March 4, 2014 the parties agreed to a settlement whereby the Company would pay Mr. Manahan $35,000 payable over a period of one year, payment was personally guaranteed by Randall Letcavage. As well, Marvin Winkler agreed to transfer $15,000 in the form of 83,334 common shares of the Company to Mr. Manahan. In return, Mr. Manahan agreed to sell no more than 30,000 shares of the Company’s stock per month through June 30, 2014. Additionally, WePower LLC returned 5,000,000 common shares of the Company previously issued related to the sale of TPC, and in exchange for the promissory note in the face amount of $5,000,000 (and valued at 869,000 on the Company’s financial statements as of December 31, 2013), the Company had returned an additional 2,500,000 common shares. |
2_SUMMARY_OF_SIGNIFICANT_ACCOU1
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2013 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The accompanying audited consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles ("U.S. GAAP"). |
Principles of consolidation | The audited consolidated financial statements include the accounts of Premier Holding Corporation, E3 and the accounts of THE POWER COMPANY USA, LLC as of and for the year ended December 31, 2013. All significant intercompany transactions have been eliminated in consolidation. |
Use of Estimates | The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Cash and Cash Equivalents | Cash and cash equivalents include short-term cash investments that have an initial maturity of 90 days or less. The Company had no cash equivalents as of and December 31, 2013 and 2012. |
Revenue Recognition | Revenue Recognition |
The Company’s wholly owned Energy Efficiency Experts, Inc. and The Power Company USA, LLC. offer renewable energy production and energy efficiency products and services to both commercial middle market companies as well as residential customers. In accordance with the requirements of ASC 605-10-599, the Company recognizes revenue when (1) persuasive evidence of an arrangement exists (contracts); (2) delivery has occurred; (3) the seller’s price is fixed or determinable (per the customer’s contract); and (4) collectability is reasonably assured (based upon our credit policy). When consultations are provided to customers, the revenue is recognized at the completion of the service when collectability is reasonably assured. For products sold to customers revenue is recognized when title has passed to the customer and collectability is reasonably assured; and no further efforts are required. Revenue generated from commercial and residential electricity usage is supported by annual (or longer) contracts with users, which the Company earns commissions from power suppliers when executed. The commission revenue is recognized when the contract is signed, and the performance is completed, with an appropriate allowance for estimates cancellation. | |
Accounts Receivable | All accounts receivable are due thirty (30) days from the date billed. If the funds are not received within thirty (30) days the customer is contacted to arrange payment. The Company uses the allowance method to account for uncollectable accounts receivable. All accounts were considered collectible as of December 31, 2013 and no allowance for bad debts was considered necessary. |
Non-controlling Interest | Non-controlling interests in our subsidiary is recorded as a component of our equity, separate from the parent’s equity. Purchase or sales of equity interests that do not result in a change of control are accounted for as equity transactions. Results of operations attributable to the non-controlling interest are included in our consolidated results of operations and, upon loss of control, the interest sold, as well as interest retained, if any, will be reported at fair value with any gain or loss recognized in earnings. |
Earnings Loss Per Share | The Company has adopted the FASB ASC Topic 260 regarding earnings / loss per share, which provides for calculation of “basic” and “diluted” earnings / loss per share. Basic earnings / loss per share includes no dilution and is computed by dividing net income / loss available to common shareholders by the weighted average common shares outstanding for the period. Diluted earnings / loss per share reflect the potential dilution of securities that could share in the earnings of an entity similar to fully diluted earnings / loss per share. |
Income Tax | Deferred income tax is provided for differences between the bases of assets and liabilities for financial and income tax reporting. A deferred tax asset, subject to a valuation allowance, is recognized for estimated future tax benefits of tax-basis operating losses being carried forward. Income taxes are provided based upon the liability method of accounting pursuant to the FASB ASC Topic 740-10-30 concerning Income Taxes. Under this approach, deferred income taxes are recorded to reflect the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each year-end. A valuation allowance is recorded against the deferred tax asset if management does not believe the Company has met the “more likely than not” standard imposed by the FASB ASC Topic 740-10-30 concerning Income Taxes to allow recognition of such an asset. |
Stock-Based Compensation | We periodically issue stock options and warrants to employees and non-employees in non-capital raising transactions for services and for financing costs. We account for stock option and warrant grants issued and vesting to employees based on Financial Accounting Standards Board (FASB) ASC Topic 718, “Compensation – Stock Compensation”, whereas the award is measured at its fair value at the date of grant and is amortized ratably over the vesting period. We account for stock option and warrant grants issued and vesting to non-employees in accordance with ASC Topic 505, “Equity”, whereas the value of the stock compensation is based upon the measurement date as determined at either (a) the date at which a performance commitment is reached, or (b) at the date at which the necessary performance to earn the equity instruments is complete. |
Goodwill and Other Intangible Assets | The Company periodically reviews the carrying value of intangible assets not subject to amortization, including goodwill, to determine whether impairment may exist. Goodwill and certain intangible assets are assessed annually, or when certain triggering events occur, for impairment using fair value measurement techniques. These events could include a significant change in the business climate, legal factors, a decline in operating performance, competition, sale or disposition of a significant portion of the business, or other factors. Specifically, goodwill impairment is determined using a two-step process. The first step of the goodwill impairment test is used to identify potential impairment by comparing the fair value of a reporting unit with its carrying amount, including goodwill. Premier uses level 3 inputs and a discounted cash flow methodology to estimate the fair value of a reporting unit. A discounted cash flow analysis requires one to make various judgmental assumptions including assumptions about future cash flows, growth rates, and discount rates. The assumptions about future cash flows and growth rates are based on the Company’s budget and long-term plans. Discount rate assumptions are based on an assessment of the risk inherent in the respective reporting units. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired and the second step of the impairment test is unnecessary. If the carrying amount of a reporting unit exceeds its fair value, the second step of the goodwill impairment test is performed to measure the amount of impairment loss, if any. The second step of the goodwill impairment test compares the implied fair value of the reporting unit’s goodwill with the carrying amount of that goodwill. If the carrying amount of the reporting unit’s goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination. That is, the fair value of the reporting unit is allocated to all of the assets and liabilities of that unit (including any unrecognized intangible assets) as if the reporting unit had been acquired in a business combination and the fair value of the reporting unit was the purchase price paid to acquire the reporting unit. |
As of December 31, 2013, amortizable intangible assets consist of patents, trade names, trademarks, domain names, website emails, and non-compete agreements, and contracts with suppliers and customers. See Note 4 for further information regarding the acquisition and amortization of these intangible assets. These intangibles are being amortized on a straight line basis over their estimated useful lives, two to ten years. | |
Fair Value Measurements | On January 1, 2011, Premier adopted guidance which defines fair value, establishes a framework for using fair value to measure financial assets and liabilities on a recurring basis, and expands disclosures about fair value measurements. Beginning on January 1, 2011, Premier also applied the guidance to non-financial assets and liabilities measured at fair value on a non-recurring basis, which includes goodwill and intangible assets. The guidance establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of Premier. Unobservable inputs are inputs that reflect Premier’s assumptions of what market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the reliability of the inputs as follows: |
Level 1 - Valuation is based upon unadjusted quoted market prices for identical assets or liabilities in active markets that Premier has the ability to access. | |
Level 2 - Valuation is based upon quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in inactive markets; or valuations based on models where the significant inputs are observable in the market. | |
Level 3 - Valuation is based on models where significant inputs are not observable. The unobservable inputs reflect Premier's own assumptions about the inputs that market participants would use. | |
Premier’s financial instruments consist of cash, accounts receivable, note receivable, accounts payable, related party payable and accrued liabilities. The estimated fair value of cash, accounts receivable, note receivable, accounts payable, related party payable and accrued liabilities approximate their carrying amounts due to the short-term nature of these instruments. | |
Certain non-financial assets are measured at fair value on a nonrecurring basis. Accordingly, these assets are not measured and adjusted to fair value on an ongoing basis but are subject to periodic impairment tests. These items primarily include long-lived assets, goodwill and other intangible assets. | |
Concentration of Credit Risk | The Company maintains its cash in multiple financial institutions. The Company limits the amount of credit exposure to each individual financial institution and places its temporary cash into investments of high credit quality with a financial institution that exceeds federally insured limits. The Company has not experienced any losses related to these balances and believes its credit risk to be minimal. |
Gain from discontinued operations | Gain from discontinued operations of $985,138 for the nine months ended September 30, 2013 consists of the sale of both intangible assets in the form of sales opportunities and leads, and the assumption of liabilities from the discontinued operations to WEPOWER ECO Corp (an unrelated company). The gain is based upon the estimated value of the $5,000,000 note received in the transaction. The provisional amounts are subject to revision until the evaluations are completed to the extent that additional information is obtained about the facts and circumstances that existed as of the acquisition date. The preliminary appraised value of the note is $869,000; $116,138 consists of liabilities which were assumed by the acquirer in the transaction. |
Recent Accounting Pronouncements | Adopted |
In February 2013, the FASB issued ASU No. 2013-04, “Liabilities (Topic 405): Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation Is Fixed at the Reporting Date.” The amendments in ASU 2013-04 provide guidance for the recognition, measurement, and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this Update is fixed at the reporting date, except for obligations addressed within existing guidance in U.S. GAAP. The guidance requires an entity to measure those obligations as the sum of the amount the reporting entity agreed to pay on the basis of its arrangement among its co-obligors and any additional amount the reporting entity expects to pay on behalf of its co-obligors. The guidance in this Update also requires an entity to disclose the nature and amount of the obligation as well as other information about those obligations. The amendments in this standard are effective retrospectively for fiscal years, and interim periods within those years, beginning after December 15, 2013. We are evaluating the effect, if any, adoption of ASU No. 2013-04 will have on our consolidated financial statements and related disclosures. | |
In April 2013, the FASB issued ASU No. 2013-07, “Presentation of Financial Statements (Top 205): Liquidation Basis of Accounting.” The objective of ASU No. 2013-07 is to clarify when an entity should apply the liquidation basis of accounting and to provide principles for the measurement of assets and liabilities under the liquidation basis of accounting, as well as any required disclosures. The amendments in this standard is effective prospectively for entities that determine liquidation is imminent during annual reporting periods beginning after December 15, 2013, and interim reporting periods therein. We are evaluating the effect, if any, adoption of ASU No. 2013-07 will have on our consolidated financial statements and related disclosures. | |
Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force) and the United States Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future financial statements. |
4_ACQUISITION_Tables
4. ACQUISITION (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Business Combinations [Abstract] | |||||
Schedule of Purchase Price Allocation | The allocation of the purchase price to assets and liabilities based upon fair value determinations was as follows: | ||||
IP/Technology – patents | $ | 167,570 | |||
Non-compete agreement | 76,000 | ||||
Trademarks & Service Marks | 55,000 | ||||
Goodwill | 138,000 | ||||
Total purchase price | $ | 436,570 | |||
The purchase price consideration consisted of the following: | |||||
Cash | $ | 31,570 | |||
Note Payable | 15,000 | ||||
Common Stock | 180,000 | ||||
Common Stock Payable | 210,000 | ||||
Total purchase price | $ | 436,570 | |||
Schedule of Acquired Intangibles | Useful Life | ||||
IP/Technology - Patents | 5 | ||||
Non-compete Agreement | 10 | ||||
Trademarks & Service Marks | 2 | ||||
Goodwill | N/A | ||||
Schedule of goodwill | Balance as of January 1, 2013 | ||||
Goodwill - Active ES | $ | 138,000 | |||
Accumulated impairment losses | – | ||||
138,000 | |||||
Goodwill acquired during the year - TPC | 4,500,000 | ||||
Impairment losses | – | ||||
Goodwill related to 20% non-controlling interest | (82,250 | ) | |||
Balance as of December 31, 2013 | |||||
Goodwill | 4,555,750 | ||||
Accumulated impairment losses | – | ||||
$ | 4,555,750 |
5_INTANGIBLES_ASSETS_NET_Table
5. INTANGIBLES ASSETS, NET (Tables) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||
Schedule of Acquired Intangible Assets | Balance 12/31/2012 | Additions | Amortization | Impairment | Balance | ||||||||||||||||
12/31/13 | |||||||||||||||||||||
IP/Technology – Patents | $ | 153,607 | $ | – | $ | (33,515 | ) | $ | – | $ | 120,092 | ||||||||||
Non-compete Agreement | 72,832 | – | (7,600 | ) | – | 65,232 | |||||||||||||||
Trademarks & Service Marks | 43,542 | – | (27,500 | ) | – | 16,042 | |||||||||||||||
$ | 269,980 | $ | – | $ | (68,615 | ) | $ | – | $ | 201,366 |
7_CAPITAL_STOCK_TRANSACTIONS_T
7. CAPITAL STOCK TRANSACTIONS (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Equity [Abstract] | |||||||||||||
Common Stock Options | Number Outstanding | Weighted-Average Exercise Price Per Share | Weighted-Average Remaining Contractual Life (Years) | ||||||||||
Outstanding at January 1, 2013 | 150,000 | $ | 0.33 | 2.25 | |||||||||
Granted | 50,000 | 0.25 | 4 | ||||||||||
Exercised | – | – | – | ||||||||||
Canceled/forfeited/expired | – | ||||||||||||
Outstanding at December 31, 2013 | 200,000 | $ | 0.25 | 3.61 | |||||||||
Options nonvested and exercisable at December 31, 2013 | – | – | – | ||||||||||
Options vested and exercisable at December 31, 2013 | 200,000 | $ | 0.25 | 3.61 | |||||||||
Common Stock Warrants | Number Outstanding | Weighted-Average Exercise Price Per Share | Weighted-Average Remaining Contractual Life (Years) | ||||||||||
Outstanding at January 1, 2013 | 450,000 | $ | 0.57 | 2.59 | |||||||||
Granted | 2,793,694 | 0.175 | 1.85 | ||||||||||
Exercised | – | – | – | ||||||||||
Canceled/forfeited/expired | 450,000 | 0.057 | – | ||||||||||
Outstanding at December 31, 2013 | 2,793,694 | $ | 0.175 | 1.85 | |||||||||
Warrants vested and exercisable at December 31, 2013 | 2,793,694 | $ | 0.175 | 1.85 |
2_SUMMARY_OF_SIGNIFICANT_ACCOU2
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) (USD $) | 12 Months Ended |
Dec. 31, 2013 | |
Accounting Policies [Abstract] | |
Gain from discontinued operations | $985,138 |
4_ACQUISITIONS_GOODWILL_Detail
4. ACQUISITIONS & GOODWILL (Details - Allocation of Purchase Price) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Business Combinations [Abstract] | ||
IP/Technology - Patents | $167,570 | |
Non-compete Agreement | 76,000 | |
Trademarks & Service Marks | 55,000 | |
Goodwill | 138,000 | |
Total purchase price | 436,570 | |
Cash | 31,570 | |
Note Payable | 15,000 | |
Common Stock | 180,000 | |
Common Stock Payable | 0 | 210,000 |
Total purchase Price | $436,570 |
4_ACQUISITIONS_GOODWILL_Detail1
4. ACQUISITIONS & GOODWILL (Details-Estimated useful lives) | 12 Months Ended | |
Dec. 31, 2013 | ||
Goodwill | ||
Estimated useful lives (years) of the acquired intangibles | 0 years | [1] |
IP/Technology - Patents | ||
Estimated useful lives (years) of the acquired intangibles | 5 years | |
Non-compete Agreement | ||
Estimated useful lives (years) of the acquired intangibles | 10 years | |
Trademarks and Service Marks | ||
Estimated useful lives (years) of the acquired intangibles | 2 years | |
[1] | N/A |
4_ACQUISITION_Details_Goodwill
4. ACQUISITION (Details - Goodwill) (USD $) | 12 Months Ended |
Dec. 31, 2013 | |
Business Combinations [Abstract] | |
Goodwill, beginning balance | $138,000 |
Goodwill acquired | 4,500,000 |
Goodwill related to non-controlling interest | -82,250 |
Accumulated impairment losses | 0 |
Goodwill, ending balance | $4,555,750 |
5_INTANGIBLES_ASSETS_NET_Detai
5. INTANGIBLES ASSETS, NET (Details) (USD $) | 12 Months Ended |
Dec. 31, 2013 | |
Balance at beginning of period | $269,980 |
Additions | 0 |
Amortization | -68,615 |
Impairment | 0 |
Balance at end of period | 201,366 |
IP/Technology - Patents | |
Balance at beginning of period | 153,607 |
Additions | 0 |
Amortization | -33,515 |
Impairment | 0 |
Balance at end of period | 120,092 |
Non-compete Agreement | |
Balance at beginning of period | 72,832 |
Additions | 0 |
Amortization | -7,600 |
Impairment | 0 |
Balance at end of period | 65,232 |
Trademarks and Service Marks | |
Balance at beginning of period | 43,542 |
Additions | 0 |
Amortization | -27,500 |
Impairment | 0 |
Balance at end of period | $16,042 |
5_INTANGIBLES_ASSETS_NET_Detai1
5. INTANGIBLES ASSETS, NET (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense related to the purchased intangibles | $51,561 | $0 |
6_RELATED_PARTY_TRANSACTIONS_D
6. RELATED PARTY TRANSACTIONS (Details Narrative) (Letcavage, USD $) | 12 Months Ended |
Dec. 31, 2013 | |
Letcavage | |
Compensation | $240,000 |
Consulting | $37,500 |
7_CAPITAL_STOCK_TRANSACTIONS_D
7. CAPITAL STOCK TRANSACTIONS (Details-Option activity) (Options, USD $) | 12 Months Ended |
Dec. 31, 2013 | |
Options | |
Number Outstanding | |
Beginning Balance | 150,000 |
Granted | 50,000 |
Exercised | 0 |
Canceled/forfeited/expired | 0 |
Ending Balance | 200,000 |
Options nonvested and exercisable | 0 |
Options vested and exercisable Ending Balance | 200,000 |
Weighted - Average Exercise Price Per Share | |
Beginning Balance | $0.33 |
Granted | $0.25 |
Ending Balance | $0.25 |
Options vested and exercisable Ending Balance | $0.25 |
Weighted - Average Remaining Contractual Life (Years) | |
Beginning balance | 2 years 3 months |
Granted | 4 years |
Ending balance | 3 years 7 months 9 days |
Options vested and exercisable Ending Balance | 3 years 7 months 9 days |
7_CAPITAL_STOCK_TRANSACTIONS_D1
7. CAPITAL STOCK TRANSACTIONS (Details-Warrant activity) (Warrants, USD $) | 12 Months Ended |
Dec. 31, 2013 | |
Warrants | |
Number of Warrants Outstanding | |
Beginning Balance | 450,000 |
Granted | 2,793,694 |
Exercised | 0 |
Canceled/forfeited/expired | 450,000 |
Ending Balance | 2,793,694 |
Warrants vested and exercisable | 2,793,694 |
Weighted - Average Exercise Price Per Share | |
Beginning Balance | 0.57 |
Granted | $1.18 |
Exercised | $0 |
Canceled/forfeited/expired | $0.06 |
Ending Balance | 0.175 |
Warrants vested and exercisable price per share | $0.18 |
Weighted - Average Remaining Contractual Life (Years) | |
Beginning balance | 2 years 7 months 2 days |
Granted | 1 year 10 months 6 days |
Ending balance | 1 year 10 months 6 days |
Warrants vested and exercisable weighted average remaining contractual life | 1 year 10 months 6 days |
7_CAPITAL_STOCK_TRANSACTIONS_D2
7. CAPITAL STOCK TRANSACTIONS (Details Narrative) (USD $) | 12 Months Ended |
Dec. 31, 2013 | |
Warrants | |
Fair value of warrants granted | $146,250 |
Letcavage | |
Share based compensation | 269,126 |
Clark | |
Share based compensation | 12,749 |
Harrison | |
Share based compensation | 12,749 |
Harrison | |
Share based compensation | 10,285 |
Clark | |
Share based compensation | 10,287 |
Weed | |
Share based compensation | $17,110 |