Reed's (REED) 10-Q 20 Oct 16 2016 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information	9 Months Ended
	Sep. 30, 2016shares
Document And Entity Information
Entity Registrant Name	REED'S, INC.
Entity Central Index Key	1,140,215
Document Type	10-Q
Document Period End Date	Sep. 30, 2016
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding	13,908,247
Trading Symbol	REED
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2,016

Condensed Balance Sheets

Condensed Balance Sheets - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Current assets:
Cash	$ 1,947,000	$ 1,816,000
Trade accounts receivable, net of allowance for doubtful accounts and returns and discounts of $256,000 and $356,000, respectively	3,055,000	2,894,000
Inventory, net of reserve for obsolescence of $50,000 and $290,000, respectively	7,805,000	7,927,000
Prepaid inventory	115,000	47,000
Prepaid and other current assets	695,000	769,000
Total Current Assets	13,617,000	13,453,000
Property and equipment, net of accumulated depreciation of $4,719,000 and $4,216,000, respectively	6,844,000	5,369,000
Brand names	1,029,000	1,029,000
Total assets	21,490,000	19,851,000
Current Liabilities:
Accounts payable	7,157,000	7,458,000
Accrued expenses	220,000	168,000
Line of credit, net of discount of $4,000 and $0, respectively	4,901,000	4,443,000
Current portion of long term financing obligations	182,000	160,000
Current portion of capital leases payable	179,000	153,000
Current portion of capital expansion loan	704,000	341,000
Total current liabilities	13,343,000	12,723,000
Other Long Term Liabilities	130,000
Long term financing obligation, less current portion, net of discount of $852,000 and $953,000, respectively	1,387,000	1,443,000
Capital leases payable, less current portion	419,000	490,000
Capital expansion loan, less current portion	2,318,000	1,542,000
Term loan, net of discount $79,000 and $132,000	2,921,000	2,868,000
Total Liabilities	20,518,000	19,066,000
Stockholders' equity:
Series A Convertible Preferred stock, $10 par value, 500,000 shares authorized, 9,411 shares issued and outstanding	94,000	94,000
Common stock, $.0001 par value, 19,500,000 shares authorized, 13,908,846 and 13,160,860 shares issued and outstanding, respectively	1,000	1,000
Additional paid in capital	30,182,000	27,399,000
Accumulated deficit	(29,305,000)	(26,709,000)
Total stockholders' equity	972,000	785,000
Total liabilities and stockholders' equity	$ 21,490,000	$ 19,851,000

Condensed Balance Sheets (Paren

Condensed Balance Sheets (Parenthetical) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Statement of Financial Position [Abstract]
Trade accounts receivable, allowance for doubtful accounts and returns and discounts	$ 256,000	$ 356,000
Inventory, reserve for obsolescence net	50,000	290,000
Property and equipment, accumulated depreciation	4,719,000	4,216,000
Line of credit, discount	4,000	0
Long term financing obligation, discount	852,000	953,000
Term loan, discount	$ 79,000	$ 132,000
Series A Convertible Preferred stock, par value	$ 10	$ 10
Series A Convertible Preferred stock, shares authorized	500,000	500,000
Series A Convertible Preferred stock, shares issued	9,411	9,411
Series A Convertible Preferred stock, shares outstanding	9,411	9,411
Common stock, par value	$ .0001	$ .0001
Common stock, shares authorized	19,500,000	19,500,000
Common stock, shares issued	13,908,846	13,160,860
Common stock, shares outstanding	13,908,846	13,160,860

Condensed Statements of Operati

Condensed Statements of Operations (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Income Statement [Abstract]
Net Sales	$ 12,329,000	$ 10,713,000	$ 33,326,000	$ 33,561,000
Cost of goods sold	9,443,000	9,153,000	25,945,000	25,104,000
Gross profit	2,886,000	1,560,000	7,381,000	8,457,000
Operating expenses:
Delivery and handling expenses	901,000	1,354,000	2,815,000	3,952,000
Selling and marketing expense	918,000	1,242,000	2,911,000	3,770,000
General and administrative expense	871,000	1,108,000	3,007,000	3,332,000
Total operating expenses	2,690,000	3,704,000	8,733,000	11,054,000
Income (Loss) from operations	196,000	(2,144,000)	(1,352,000)	(2,597,000)
Interest expense	(415,000)	(321,000)	(1,239,000)	(826,000)
Net loss	(219,000)	(2,465,000)	(2,591,000)	(3,423,000)
Preferred Stock Dividends			(5,000)	(5,000)
Net loss attributable to common stockholders	$ (219,000)	$ (2,465,000)	$ (2,596,000)	$ (3,428,000)
Loss per share - basic and diluted	$ (0.02)	$ (0.19)	$ (0.19)	$ (0.26)
Weighted average number of shares outstanding - basic and diluted	13,908,247	13,133,424	13,504,223	13,102,614

Condensed Statement of Changes

Condensed Statement of Changes in Stockholders' Equity (Unaudited) - 9 months ended Sep. 30, 2016 - USD ($)	Common Stock [Member]	Preferred Stock [Member]	Additional Paid In Capital [Member]	Accumulated Deficit [Member]	Total
Balance at Dec. 31, 2015	$ 1,000	$ 94,000	$ 27,399,000	$ (26,709,000)	$ 785,000
Balance, Shares at Dec. 31, 2015	13,160,860	9,411
Common shares issued upon exercise of warrants			45,000		45,000
Common shares issued upon exercise of warrants, shares	16,260
Common shares issued upon exercise of options
Common shares issued upon exercise of options, shares	7,211				7,211
Fair value of vested options			449,000		$ 449,000
Common shares issued upon sale of securities			2,230,000		2,230,000
Common shares issued upon sale of securities, shares	722,412
Fair value of warrants issued as debt discount			54,000		54,000
Common Stock paid for Series A Preferred Stock Dividend			5,000	(5,000)
Common Stock paid for Series A Preferred Stock Dividend, shares	1,504
Net loss				(2,591,000)	(2,591,000)
Balance at Sep. 30, 2016	$ 1,000	$ 94,000	$ 30,182,000	$ (29,305,000)	$ 972,000
Balance, Shares at Sep. 30, 2016	13,908,247	9,411

Condensed Statements of Cash Fl

Condensed Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Cash flows from operating activities:
Net loss	$ (2,591,000)	$ (3,423,000)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	689,000	683,000
Fair value of vested stock options	449,000	715,000
(Decrease) increase in allowance for doubtful accounts	(100,000)	163,000
Changes in assets and liabilities:
Accounts receivable	(61,000)	(1,090,000)
Inventory	122,000	(1,594,000)
Prepaid Inventory	(68,000)	597,000
Prepaid expenses and other current assets	74,000	66,000
Accounts payable	(301,000)	1,816,000
Accrued expenses	182,000	21,000
Net cash used in operating activities	(1,605,000)	(2,046,000)
Cash flows from investing activities:
Purchase of property and equipment	(585,000)	(415,000)
Net cash used in investing activities	(585,000)	(415,000)
Cash flows from financing activities:
Proceeds from sale of common stock	2,230,000
Proceeds from short term borrowing		1,500,000
Proceeds from stock option and warrant exercises	45,000	74,000
Principal repayments on long term financial obligation	(117,000)	(97,000)
Principal repayments on capital lease obligation	(131,000)	(91,000)
Net draw down on line of credit	462,000	1,319,000
Payments on capital expansion loan	(168,000)
Net cash provided by financing activities	2,321,000	2,705,000
Net Increase in cash	131,000	244,000
Cash at beginning of period	1,816,000	959,000
Cash at end of period	1,947,000	1,203,000
Supplemental disclosures of cash flow information:
Interest	843,000	826,000
Non Cash Investing and Financing Activities
Property and equipment acquired through capital expansion loan	1,307,000	910,000
Property and equipment acquired through capital lease obligations	86,000
Other current assets acquired through capital expansion loan		250,000
Fair value of warrants granted as debt discount	54,000
Dividends payable in common stock	$ 5,000	$ 5,000

Basis of Presentation and Liqui

Basis of Presentation and Liquidity	9 Months Ended
	Sep. 30, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation and Liquidity	1. Basis of Presentation and Liquidity The accompanying interim condensed financial statements are unaudited, but in the opinion of management of Reed’s, Inc. (the “Company”), contain all adjustments, which include normal recurring adjustments necessary to present fairly the financial position at September 30, 2016 and the results of operations and cash flows for the nine months ended September 30, 2016 and 2015. The balance sheet as of December 31, 2015 is derived from the Company’s audited financial statements. Certain information and footnote disclosures normally included in financial statements that have been prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission, although management of the Company believes that the disclosures contained in these condensed financial statements are adequate to make the information presented herein not misleading. For further information, refer to the financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K, as filed with the Securities and Exchange Commission on March 23, 2016. The results of operations for the Nine Months Ended September 30, 2016 are not necessarily indicative of the results of operations to be expected for the full fiscal year ending December 31, 2016. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expense during the reporting period. Actual results could differ from those estimates. Those estimates and assumptions include estimates for reserves of uncollectible accounts, inventory obsolescence, analysis of impairments of recorded intangibles, accruals for potential liabilities and assumptions made in valuing stock instruments issued for services. Liquidity As of September 30, 2016, we had stockholders equity of $972,000 and working capital of $274,000 compared to stockholders equity of $785,000 and working capital of $730,000 at December 31, 2015. We believe that the Company currently has the necessary working capital to support existing operations until our line of credit and all of the long term loans become due on October 1, 2017. Consistent with past refinancing practices regarding the Line of Credit, the Company believes that it will be successful in renewing the Line of Credit for another time frame similar to what it has done in the past. There are no assurances that this refinancing will be completed. We believe our primary capital source will be positive cash flow from operations. If our sales goals do not materialize as planned, we believe that the Company can reduce its operating costs and can be managed to maintain positive cash flow from operations. Historically, we have financed our operations primarily through cash generated from operations and a line of credit from a financial institution. Additionally, we have done private sales of common stock to fund operations. We may not generate sufficient revenues from product sales in the future to achieve profitable operations. If we are not able to achieve profitable operations at some point in the future, we eventually may have insufficient working capital to maintain our operations as we presently intend to conduct them or to fund our expansion and marketing and product development plans. In addition, our losses may increase in the future as we expand our manufacturing capabilities and fund our marketing plans and product development. These losses, among other things, have had and may continue to have an adverse effect on our working capital, total assets and stockholders’ equity. If we are unable to achieve profitability, the market value of our common stock would decline and there would be a material adverse effect on our financial condition. If we suffer losses from operations, our working capital may be insufficient to support our ability to expand our business operations as rapidly as we would deem necessary at any time, unless we are able to obtain additional financing. There can be no assurance that we will be able to obtain such financing on acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, we may not be able to pursue our business objectives and would be required to reduce our level of operations, including reducing infrastructure, promotions, personnel and other operating expenses. These events could adversely affect our business, results of operations and financial condition. If adequate funds are not available or if they are not available on acceptable terms, our ability to fund the growth of our operations, take advantage of opportunities, develop products or services or otherwise respond to competitive pressures could be significantly limited.

Significant Accounting Policies

Significant Accounting Policies	9 Months Ended
	Sep. 30, 2016
Accounting Policies [Abstract]
Significant Accounting Policies	2. Significant Accounting Policies Income (loss) per common share Basic earnings (loss) per share is computed by dividing the net income (loss) applicable to common stockholders by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per share is computed by dividing the net income applicable to common stock holders by the weighted average number of common shares outstanding plus the number of additional common shares that would have been outstanding if all dilutive potential common shares had been issued, using the treasury stock method. Potential common shares are excluded from the computation when their effect is antidilutive. For the three and nine months ended September 30, 2016 and 2015, the calculations of basic and diluted loss per share are the same because potential dilutive securities would have an anti-dilutive effect. The Company had potentially dilutive securities that consisted of: September 30, 2016 September 30, 2015 Warrants 803,909 216,261 Series A Preferred Stock 37,644 37,644 Options 952,000 990,000 Total 1,793,553 1,243,905 Use of estimates The preparation of financial statements in conformity with generally accepted accounting principles 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 financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Those estimates and assumptions include estimates for reserves of uncollectible accounts, inventory obsolescence, depreciable lives of property and equipment, analysis of impairments of recorded intangibles, accruals for potential liabilities and assumptions made in valuing stock instruments issued for services. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2014-09 (ASU 2014-09), Revenue from Contracts with Customers. ASU 2014-09 will eliminate transaction- and industry-specific revenue recognition guidance under current U.S. GAAP and replace it with a principle based approach for determining revenue recognition. On August 12, 2015, FASB delayed the required implementation to fiscal years ending after December 15, 2017 but now permitted organizations such a Reeds to adopt earlier. ASU 2014-09 will require that companies recognize revenue based on the value of transferred goods or services as they occur in the contract. The ASU also will require additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. Entities can transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption. The Company is in the process of evaluating the impact of ASU 2014-09 on the Company’s financial statements and disclosures. In August 2014, the FASB issued Accounting Standards Update No. 2014-15 (ASU 2014-15), Presentation of Financial Statements - Going Concern (Subtopic 205-10). ASU 2014-15 provides guidance as to management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. In connection with preparing financial statements for each annual and interim reporting period, an entity’s management should evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued (or within one year after the date that the financial statements are available to be issued when applicable). Management’s evaluation should be based on relevant conditions and events that are known and reasonably knowable at the date that the financial statements are issued (or at the date that the financial statements are available to be issued when applicable). Substantial doubt about an entity’s ability to continue as a going concern exists when relevant conditions and events, considered in the aggregate, indicate that it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued (or available to be issued). ASU 2014-15 is effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The Company will adopt ASU 2014-15 on the Company’s financial statement presentation and disclosures after the effective date. In February 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-02, Leases Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statements. Concentrations The Company’s cash balances on deposit with banks are guaranteed by the Federal Deposit Insurance Corporation up to $250,000. The Company may be exposed to risk for the amounts of funds held in one bank in excess of the insurance limit. In assessing the risk, the Company’s policy is to maintain cash balances with high quality financial institutions. The Company had cash balances in excess of $250,000 during the nine months ended September 30, 2016. During the nine months ended September 30, 2016, the Company had two customers that accounted for 24% and 13% of sales. During the nine months ended September 30, 2015, the Company had two customers that accounted for 29% and 12% of sales respectively. No other customer accounted for more than 10% of sales in either period. During the three months ended September 30, 2016 and 2015, the Company had two customers that accounted for 22% and 19% of sales in 2016, and two customers that accounted for 24% and 9% of sales in 2015, respectively. No other customers accounted for more than 10% of sales in either period. As of September 30, 2016, the Company had accounts receivable due from two customers who comprised 29% and 11% of its total accounts receivable and as of December 31, 2015 the Company had accounts receivable due from two customers who comprised 24% and 12% of its total accounts receivable. No other customer accounted for more than 10% of accounts receivable in the periods. During the Nine Months Ended September 30, 2016, the Company had one vendor who accounted for 24% of all purchases and in the Nine Months Ended September 30, 2015, one vendor accounted for 26% of all purchases. No other vendor accounted for more than 10% of all purchases in either period. As of September 30, 2016, the Company had one vendor, which accounted for 21% of total accounts payable and as of December 31, 2015, the Company had two vendors, which accounted for 11% and 10% of total accounts payable. Fair Value of Financial Instruments The Company uses various inputs in determining the fair value of its investments and measures these assets on a recurring basis. Financial assets recorded at fair value in the balance sheets are categorized by the level of objectivity associated with the inputs used to measure their fair value. Authoritative guidance provided by the FASB defines the following levels directly related to the amount of subjectivity associated with the inputs to fair valuation of these financial assets: Level 1—Quoted prices in active markets for identical assets or liabilities. Level 2—Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly. Level 3—Unobservable inputs based on the Company’s assumptions. The Company had no such assets or liabilities recorded to be valued on the basis above at September 30, 2016 or December 31, 2015. The carrying amounts of financial assets and liabilities, such as cash and cash equivalents, accounts receivable, short-term bank loans, accounts payable, notes payable and other payables, approximate their fair values because of the short maturity of these instruments. The carrying values of capital lease obligations and long-term financing obligations approximate their fair values due to the fact that the interest rates on these obligations are based on prevailing market interest rates.

Inventory

Inventory	9 Months Ended
	Sep. 30, 2016
Inventory Disclosure [Abstract]
Inventory	3. Inventory Inventory is valued at the lower of cost (first-in, first-out or market) and, net of reserves, is comprised of the following as of: September 30, 2016 December 31, 2015 Raw Materials and packaging $ 4,311,000 $ 4,364,000 Finished Goods 3,494,000 3,563,000 $ 7,805,000 $ 7,927,000

Property and Equipment

Property and Equipment	9 Months Ended
	Sep. 30, 2016
Property, Plant and Equipment [Abstract]
Property and Equipment	4. Property and Equipment Property and equipment are comprised of the following as of: September 30, 2016 December 31, 2015 Land $ 1,107,000 $ 1,107,000 Building 1,875,000 1,875,000 Vehicles 600,000 500,000 Machinery and equipment 3,695,000 3,800,000 Equipment under capital leases 226,000 857,000 Office equipment 476,000 469,000 Construction in Progress 3,584,000 977,000 11,563,000 9,585,000 Accumulated depreciation (4,719,000 ) (4,216,000 ) $ 6,844,000 $ 5,369,000 Depreciation expense for the nine months ended September 30, 2016 and 2015 was $503,000 and $615,000 respectively.

Notes Payable

Notes Payable	9 Months Ended
	Sep. 30, 2016
Debt Disclosure [Abstract]
Notes Payable	5. Notes Payable Line of Credit September 30, 2016 December 31, 2015 Line of credit $ 4,905,000 $ 4,443,000 Valuation discount (4,000 ) - Net $ 4,901,000 $ 4,443,000 On November 9, 2011, the Company entered into a Loan and Security Agreement with PMC Financial Services Group, LLC (PMC), which was amended and extended for two years on December 5, 2014, that provides a $6,000,000 revolving line of credit. The Amended Agreement extends and amends the Revolving Loan and Term Loan (see discussion below) and adds a new Capital Expansion Loan (the “Capex Loan”) (see discussion below). At September 30, 2016 and December 31, 2015, the aggregate amount outstanding under the line of credit was $4,905,000 and $4,443,000 respectively. The revolving line of credit is based on 85% of accounts receivable and 60% of eligible inventory and is secured by substantially all of the Company’s assets. The interest rate on the Revolving Loan was the prime rate plus .35% (9% at September 30, 2016). However, the interest rate has been adjusted as described below in term loans. The monthly management fee is .45% of the average monthly loan balance. As of September 30, 2016, the Company had a maximum borrowing availability of $946,000 under the line of credit agreement. On April 25, 2016, the Company agreed with PMC to amend the definition of eligible inventory to include certain glass containers in exchange for 10,000 warrants. The total value of the line did not increase and the inclusion of the glass as defined under the amendment will expire December 31, 2016. In connection with the agreement, the Company granted PMC 10,000 warrants at an exercise price of $3.90 per share with a term of five years and six months. The 10,000 warrants were valued at $15,000 using the Black Scholes Merton option pricing model and were recorded as a valuation discount. The following assumptions were made in valuing the 10,000 warrants; term of 5.5 years, volatility of 56.35%, expected dividends of 0% and discount rate of 1.50%. The warrants value of $15,000 is being amortized over the 8 months of the length of the time for the change to the eligible inventory definition. During the six months ending September 30, 2016, $11,000 of valuation discount was amortized resulting in an unamortized balance of $4,000 at September 30, 2016. On May 13, 2016, PMC agreed to an extension of the maturity date until October 1, 2017 for the line of credit that was to mature on December 5, 2016 as part of the restructuring of all debt at PMC. See discussion of the consideration given PMC below under term loans. All other terms for the line of credit remain the same. Term Loans The Company has the following term loans outstanding with PMC Financial Services Corporation; September 30, 2016 December 31, 2015 Term Loans $ 3,000,000 $ 3,000,000 Valuation discount (79,000 ) (132,000 ) Net $ 2,921,000 $ 2,868,000 In connection with the Loan and Security Agreement with PMC, the Company entered into a Term Loan. The Term Loan was for $750,000, and was secured by all of the unencumbered assets of the Company. Effective December 5, 2014 the Term Loan’s outstanding principal balance was increased to $1,500,000 and the annual interest rate was revised to prime plus 5.75% (currently 9%) subject to adjustment as described below. Effective September 1, 2015 the Company entered into an additional Term Loan with a principal balance of $1,500,000 at prime plus 11.60% (currently 14.85%) with PMC. As of September 30, 2016 and December 31, 2015, the aggregate amount under the Term Loans outstanding was $3,000,000. The interest rate on the line of credit and Term Loans described above are subject to adjustment as follows: The rate charge will be calculated on a sliding scale based on the trailing 6 month EBITDA. If the EBITDA measuring point stays below $1,000,000 where it is now, the rate will be 12%. If EBITDA rises to $1,500,000 then the rate will be reduced to 9%. Notwithstanding the other borrowing terms above, if Excess Borrowing Availability under the $6 million Revolving line of credit remains more than $1,500,000 at all times during the preceding month (currently Reed’s Borrowing Availability is zero) the Interest Rate shall remain unchanged for the asset based lending that includes the Revolving working capital loan, CAPEX capital improvement loan and Term Loan A. The six month Term Loan B rates will remain the same at 14.85%. On November 9, 2015, the Company completed a restructuring of the Term Loans with PMC. The aggregated amount of the principal for affected term loans is $3,000,000. Under the new agreement, the maturity of both loans was to be due in lump sum on April 1, 2017 under the same rates and conditions as before. In connection with the agreement, the Company granted PMC 125,000 warrants at an exercise price of $4.50 per share with a term of five years and six months. The 125,000 warrants were valued at $141,000 using the Black Scholes Merton option pricing model and were recorded as a valuation discount. The following assumptions were made in valuing the 125,000 warrants; term of 5.5 years, volatility of 56.04%, expected dividends of 0% and discount rate of 0.68%. The warrants value of $141,000 is being amortized over the remainder of the term loans. On May 13, 2016, the Company agreed with PMC to extend the loan maturity date to October 1, 2017 for all loans outstanding at PMC under the same rates and conditions as before. In connection with the agreement, the Company granted PMC 50,000 warrants at an exercise price of $4.50 per share with a term of five years and six months. The 50,000 warrants were valued at $38,000 using the Black Scholes Merton option pricing model and were recorded as a valuation discount. The following assumptions were made in valuing the 50,000 warrants; term of 5.5 years, volatility of 54.17%, expected dividends of 0% and discount rate of 1.49%. The warrants value of $38,000 is being amortized over the 16 months until the maturity date of all loans. During the nine months ended September 30, 2016, $91,000 of valuation discount was amortized resulting in an unamortized balance of $79,000 at September 30, 2016. Capital Expansion (“CAPEX”) Loan In connection with the loan and security agreement with PMC, the Company entered into a CAPEX loan in the aggregate outstanding amount not to exceed $3,000,000. The CAPEX loan will finance new asset purchases for modernization and improvement of the beverage bottling equipment in the Los Angeles plant. Interest only on the CAPEX loan shall be paid from time to time until the end of each fiscal quarter, at which time the principal amounts of each outstanding CAPEX loan will be aggregated and repaid in 48 equal monthly installments of principal plus accrued but unpaid interest beginning July 31, 2016, or if earlier, the revolver maturity of October 1, 2017. The maximum amount that can be borrowed under the CAPEX loan was increased to $3,210,000 on May 13, 2016. The interest rate on the CAPEX loan is the prime rate plus 5.75% (7% at September 30, 2016). At September 30, 2016 and December 31, 2015, the balance on the CAPEX loan balance was $3,022,000 and $1,883,000 respectively. On September 30, 2016, the loan funding closed and the Company began repayments in July, 2016. In conjunction with this loan the Company has placed equipment with a cost of $341,000 at a co-packing facility to enable the co-packer to manufacture our products. Should the Company be unable to secure access to the equipment in the event of failure of the co-packer, the amount will become due and payable by the Company immediately. The Company has the following capital expansion loan outstanding with PMC Financial Services Corporation; September 30, 2016 December 31, 2015 Capital expansion loan $ 3,022,000 $ 1,883,000 Current portion (704,000 ) (341,000 ) Long-term portion $ 2,318,000 $ 1,542,000

Obligations under Capital Lease

Obligations under Capital Leases	9 Months Ended
	Sep. 30, 2016
Leases [Abstract]
Obligations under Capital Leases	6. Obligations under Capital Leases The Company leases equipment for its brewery operations with an aggregate value of $943,000 under twelve non-cancelable capital leases. Most of the leases are personally guaranteed by the Company’s chief executive officer. Monthly payments range from $341 to $10,441 per month, including interest, at interest rates ranging from 6.51% to 17.31% per annum. At September 30, 2016, monthly payments under these leases aggregated to $16,000. The leases expire at various dates through 2020. Future minimum lease payments under capital leases are as follows: Years Ending December 31, 2016 $ 56,000 2017 213,000 2018 213,000 2019 174,000 2020 38,000 Total payments 694,000 Less: Amount representing interest (96,000 ) Present value of net minimum lease payments 598,000 Less: Current portion (179,000 ) Non-current portion $ 419,000

Long-term Financing Obligation

Long-term Financing Obligation	9 Months Ended
	Sep. 30, 2016
Debt Disclosure [Abstract]
Long-term Financing Obligation	7. Long-term Financing Obligation On June 15, 2009, the Company closed escrow on the sale of its two buildings and its brewery equipment and concurrently entered into a long-term lease agreement for the same property and equipment. In connection with the lease the Company has the option to repurchase the buildings and brewery equipment from 12 months after the commencement date to the end of the lease term at the greater of the fair market value or an agreed upon amount. Since the lease contains a buyback provision and other related terms, the Company determined it had continuing involvement that did not warrant the recognition of a sale; therefore, the transaction has been accounted for as a long-term financing. The proceeds from the sale, net of transaction costs, have been recorded as a financing obligation in the amount of $3,056,000. Monthly payments under the financing agreement are recorded as interest expense and a reduction in the financing obligation at an implicit rate of 9.9%. The financing obligation was personally guaranteed up to a limit of $150,000 by the principal shareholder and Chief Executive Officer, Christopher J. Reed. In connection with the financing obligation, the Company issued an aggregate of 400,000 warrants to purchase its common stock at $1.20 per share for five years. The 400,000 warrants were valued at $752,000 and reflected as a debt discount, using the Black Scholes Merton option pricing model. The following assumptions were utilized in valuing the 400,000 warrants: strike price of $2.10 to $2.25; term of 5 years; volatility of 91.36% to 110.9%; expected dividends of 0%; and discount rate of 2.15% to 2.20%. The 400,000 warrants were recorded as valuation discount and are being amortized over 15 years, the term of the purchase option. Effective October 1, 2014, the Company executed Amendment #1 to the Long-term Financing Obligation. In exchange for a release from the $150,000 personal guarantee by the principal shareholder and Chief Executive Office, and a release of the brewery equipment which was collateral for the lease agreement, the Company issued 200,000 warrants to purchase its common stock for $5.60 per share with a term of five years. The 200,000 warrants were valued at $584,000 using the Black Scholes Merton option pricing model and were recorded as a valuation discount. The following assumptions were made in valuing the 200,000 warrants; term of 5 years, volatility of 59.53%, expected dividends of 0% and discount rate of 1.25%. The warrants value of $584,000 is being amortized over the remaining term of the purchase option. Amortization of valuation discount was $83,000 and $68,000 during the nine months ended September 30, 2016 and 2015. Long term financing obligation is comprised of the following as of: September 30, 2016 December 31, 2015 Financing obligation $ 2,421,000 2,538,000 Valuation discount (852,000 ) (935,000 ) 1,569,000 1,603,000 Less current portion (182,000 ) (160,000 ) Long term financing obligation $ 1,387,000 1,443,000

Stockholders' Equity

Stockholders' Equity	9 Months Ended
	Sep. 30, 2016
Equity [Abstract]
Stockholders' Equity	8. Stockholders’ Equity Common Stock On June 2, 2016, the Company entered into a securities purchase agreement with institutional investors in a private financing transaction for the issuance and sale of 692,412 shares of the Company’s common stock and warrants to purchase 346,206 shares of common stock. The net proceeds to the Company from the offering were $2,113,000 after deducting underwriting discounts, commissions and offering expenses. The investor warrants have an exercise price of $4.25 per share and a term of 5 years. As per the terms of the offering, the placement agent received 72,703 warrants and a term of 5 years at an exercise price of $3.74. During the nine months ended September 30, 2016, the Company sold 30,000 shares of its common stock to certain officers of the Company at $3.90 per share with total proceeds of $117,000. Stock Options Stock options granted under our equity incentive plans generally vest over 3 years from the date of grant, at 33% per year or over 4 years at 25% per year and expire 5 years from the date of grant. The following table summarizes stock option activity for the Nine Months Ended September 30, 2016: Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Terms (Years) Aggregate Intrinsic Value Outstanding at January 1, 2016 984,500 4.54 3.10 Granted 2,500 2.50 5.00 Exercised (15,000 ) 2.43 Forfeited or expired (20,000 ) 5.01 Outstanding at September 30, 2016 952,000 4.53 2.71 182,500 Exercisable at September 30, 2016 565,001 4.23 2.36 179,400 During the nine months ended September 30, 2016, the Company granted options to purchase 2,500 shares at $2.50 for consulting services with a fair value of $4,000. The fair value was calculated using a Black-Scholes option pricing model with the following assumptions: (i) volatility rate of 73%, (ii) discount rate between of 1.64%, (iii) zero expected dividend yield, and (iv) expected term of 5 years based upon the average of the term of the option and the vesting period. The aggregate intrinsic value was calculated as the difference between the closing market price, which was $3.74, and the exercise price of the Company’s stock options as of September 30, 2016. Stock-based compensation recognized on the Company’s statement of operations for the nine months ended September 30, 2016 and 2015 was $449,000 and $715,000, respectively and is included in the selling and marketing and general and administrative expenses in the accompanying statements of operations. During the nine months ended September 30, 2016, the Company issued 7,211 shares of the Company’s common stock upon exercise of 15,000 stock options on a cashless basis. Stock Warrants Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Terms (Years) Aggregate Intrinsic Value Outstanding at December 31, 2015 341,261 3.74 3.87 Granted 478,909 4.19 4.60 Exercised (16,260 ) 2.77 Forfeited or expired (1 ) Outstanding at September 30, 2016 803,909 4.59 4.60 Exercisable at September 30, 2016 743,909 4.61 4.20 During the nine months ended September 30, 2016, 16,260 warrants were exercised into 16,260 shares of common stock for $45,000. The intrinsic value was calculated as the difference between the closing market price, which was $3.74 and the exercise price of the Company’s warrants common stock, as of September 30, 2016. There was no intrinsic value for warrants outstanding as of September 30, 2016, based on the fair value of the Company’s common stock on September 30, 2016.

Significant Accounting Polici15

Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2016
Accounting Policies [Abstract]
Income (Loss) per Common Share	Income (loss) per common share Basic earnings (loss) per share is computed by dividing the net income (loss) applicable to common stockholders by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per share is computed by dividing the net income applicable to common stock holders by the weighted average number of common shares outstanding plus the number of additional common shares that would have been outstanding if all dilutive potential common shares had been issued, using the treasury stock method. Potential common shares are excluded from the computation when their effect is antidilutive. For the three and nine months ended September 30, 2016 and 2015, the calculations of basic and diluted loss per share are the same because potential dilutive securities would have an anti-dilutive effect. The Company had potentially dilutive securities that consisted of: September 30, 2016 September 30, 2015 Warrants 803,909 216,261 Series A Preferred Stock 37,644 37,644 Options 952,000 990,000 Total 1,793,553 1,243,905
Use of Estimates	Use of estimates The preparation of financial statements in conformity with generally accepted accounting principles 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 financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Those estimates and assumptions include estimates for reserves of uncollectible accounts, inventory obsolescence, depreciable lives of property and equipment, analysis of impairments of recorded intangibles, accruals for potential liabilities and assumptions made in valuing stock instruments issued for services.
Recent Accounting Pronouncements	Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2014-09 (ASU 2014-09), Revenue from Contracts with Customers. ASU 2014-09 will eliminate transaction- and industry-specific revenue recognition guidance under current U.S. GAAP and replace it with a principle based approach for determining revenue recognition. On August 12, 2015, FASB delayed the required implementation to fiscal years ending after December 15, 2017 but now permitted organizations such a Reeds to adopt earlier. ASU 2014-09 will require that companies recognize revenue based on the value of transferred goods or services as they occur in the contract. The ASU also will require additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. Entities can transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption. The Company is in the process of evaluating the impact of ASU 2014-09 on the Company’s financial statements and disclosures. In August 2014, the FASB issued Accounting Standards Update No. 2014-15 (ASU 2014-15), Presentation of Financial Statements - Going Concern (Subtopic 205-10). ASU 2014-15 provides guidance as to management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. In connection with preparing financial statements for each annual and interim reporting period, an entity’s management should evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued (or within one year after the date that the financial statements are available to be issued when applicable). Management’s evaluation should be based on relevant conditions and events that are known and reasonably knowable at the date that the financial statements are issued (or at the date that the financial statements are available to be issued when applicable). Substantial doubt about an entity’s ability to continue as a going concern exists when relevant conditions and events, considered in the aggregate, indicate that it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued (or available to be issued). ASU 2014-15 is effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The Company will adopt ASU 2014-15 on the Company’s financial statement presentation and disclosures after the effective date. In February 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-02, Leases Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statements.
Concentrations	Concentrations The Company’s cash balances on deposit with banks are guaranteed by the Federal Deposit Insurance Corporation up to $250,000. The Company may be exposed to risk for the amounts of funds held in one bank in excess of the insurance limit. In assessing the risk, the Company’s policy is to maintain cash balances with high quality financial institutions. The Company had cash balances in excess of $250,000 during the nine months ended September 30, 2016. During the nine months ended September 30, 2016, the Company had two customers that accounted for 24% and 13% of sales. During the nine months ended September 30, 2015, the Company had two customers that accounted for 29% and 12% of sales respectively. No other customer accounted for more than 10% of sales in either period. During the three months ended September 30, 2016 and 2015, the Company had two customers that accounted for 22% and 19% of sales in 2016, and two customers that accounted for 24% and 9% of sales in 2015, respectively. No other customers accounted for more than 10% of sales in either period. As of September 30, 2016, the Company had accounts receivable due from two customers who comprised 29% and 11% of its total accounts receivable and as of December 31, 2015 the Company had accounts receivable due from two customers who comprised 24% and 12% of its total accounts receivable. No other customer accounted for more than 10% of accounts receivable in the periods. During the Nine Months Ended September 30, 2016, the Company had one vendor who accounted for 24% of all purchases and in the Nine Months Ended September 30, 2015, one vendor accounted for 26% of all purchases. No other vendor accounted for more than 10% of all purchases in either period. As of September 30, 2016, the Company had one vendor, which accounted for 21% of total accounts payable and as of December 31, 2015, the Company had two vendors, which accounted for 11% and 10% of total accounts payable.
Fair Value of Financial Instruments	Fair Value of Financial Instruments The Company uses various inputs in determining the fair value of its investments and measures these assets on a recurring basis. Financial assets recorded at fair value in the balance sheets are categorized by the level of objectivity associated with the inputs used to measure their fair value. Authoritative guidance provided by the FASB defines the following levels directly related to the amount of subjectivity associated with the inputs to fair valuation of these financial assets: Level 1—Quoted prices in active markets for identical assets or liabilities. Level 2—Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly. Level 3—Unobservable inputs based on the Company’s assumptions. The Company had no such assets or liabilities recorded to be valued on the basis above at September 30, 2016 or December 31, 2015. The carrying amounts of financial assets and liabilities, such as cash and cash equivalents, accounts receivable, short-term bank loans, accounts payable, notes payable and other payables, approximate their fair values because of the short maturity of these instruments. The carrying values of capital lease obligations and long-term financing obligations approximate their fair values due to the fact that the interest rates on these obligations are based on prevailing market interest rates.

Significant Accounting Polici16

Significant Accounting Policies (Tables)	9 Months Ended
	Sep. 30, 2016
Accounting Policies [Abstract]
Schedule of Potentially Dilutive Securities	The Company had potentially dilutive securities that consisted of: September 30, 2016 September 30, 2015 Warrants 803,909 216,261 Series A Preferred Stock 37,644 37,644 Options 952,000 990,000 Total 1,793,553 1,243,905

Inventory (Tables)

Inventory (Tables)	9 Months Ended
	Sep. 30, 2016
Inventory Disclosure [Abstract]
Schedule of Inventory	Inventory is valued at the lower of cost (first-in, first-out or market) and, net of reserves, is comprised of the following as of: September 30, 2016 December 31, 2015 Raw Materials and packaging $ 4,311,000 $ 4,364,000 Finished Goods 3,494,000 3,563,000 $ 7,805,000 $ 7,927,000

Property and Equipment (Tables)

Property and Equipment (Tables)	9 Months Ended
	Sep. 30, 2016
Property, Plant and Equipment [Abstract]
Schedule of Property and Equipment	Property and equipment are comprised of the following as of: September 30, 2016 December 31, 2015 Land $ 1,107,000 $ 1,107,000 Building 1,875,000 1,875,000 Vehicles 600,000 500,000 Machinery and equipment 3,695,000 3,800,000 Equipment under capital leases 226,000 857,000 Office equipment 476,000 469,000 Construction in Progress 3,584,000 977,000 11,563,000 9,585,000 Accumulated depreciation (4,719,000 ) (4,216,000 ) $ 6,844,000 $ 5,369,000

Notes Payable (Tables)

Notes Payable (Tables)	9 Months Ended
	Sep. 30, 2016
Notes Payable [Abstract]
Schedule of Line of Credit	Line of Credit September 30, 2016 December 31, 2015 Line of credit $ 4,905,000 $ 4,443,000 Valuation discount (4,000 ) - Net $ 4,901,000 $ 4,443,000
Schedule of Term Loans Outstanding	The Company has the following term loans outstanding with PMC Financial Services Corporation; September 30, 2016 December 31, 2015 Term Loans $ 3,000,000 $ 3,000,000 Valuation discount (79,000 ) (132,000 ) Net $ 2,921,000 $ 2,868,000
Schedule of Capital Expansion Loan	The Company has the following capital expansion loan outstanding with PMC Financial Services Corporation; September 30, 2016 December 31, 2015 Capital expansion loan $ 3,022,000 $ 1,883,000 Current portion (704,000 ) (341,000 ) Long-term portion $ 2,318,000 $ 1,542,000

Obligations under Capital Lea20

Obligations under Capital Leases (Tables)	9 Months Ended
	Sep. 30, 2016
Leases [Abstract]
Schedule of Future Minimum Lease Payments under Capital Leases	Future minimum lease payments under capital leases are as follows: Years Ending December 31, 2016 $ 56,000 2017 213,000 2018 213,000 2019 174,000 2020 38,000 Total payments 694,000 Less: Amount representing interest (96,000 ) Present value of net minimum lease payments 598,000 Less: Current portion (179,000 ) Non-current portion $ 419,000

Long Term Financing Obligation

Long Term Financing Obligation (Tables)	9 Months Ended
	Sep. 30, 2016
Debt Disclosure [Abstract]
Schedule of Long Term Financing Obligation	Long term financing obligation is comprised of the following as of: September 30, 2016 December 31, 2015 Financing obligation $ 2,421,000 2,538,000 Valuation discount (852,000 ) (935,000 ) 1,569,000 1,603,000 Less current portion (182,000 ) (160,000 ) Long term financing obligation $ 1,387,000 1,443,000

Stockholders' Equity (Tables)

Stockholders' Equity (Tables)	9 Months Ended
	Sep. 30, 2016
Equity [Abstract]
Schedule of Stock Option Activity	The following table summarizes stock option activity for the Nine Months Ended September 30, 2016: Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Terms (Years) Aggregate Intrinsic Value Outstanding at January 1, 2016 984,500 4.54 3.10 Granted 2,500 2.50 5.00 Exercised (15,000 ) 2.43 Forfeited or expired (20,000 ) 5.01 Outstanding at September 30, 2016 952,000 4.53 2.71 182,500 Exercisable at September 30, 2016 565,001 4.23 2.36 179,400
Schedule of Stock Warrants Activity	Stock Warrants Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Terms (Years) Aggregate Intrinsic Value Outstanding at December 31, 2015 341,261 3.74 3.87 Granted 478,909 4.19 4.60 Exercised (16,260 ) 2.77 Forfeited or expired (1 ) Outstanding at September 30, 2016 803,909 4.59 4.60 Exercisable at September 30, 2016 743,909 4.61 4.20

Basis of Presentation and Liq23

Basis of Presentation and Liquidity (Details Narrative) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Stockholders equity	$ 972,000	$ 785,000
Working capital deficit	$ 274,000	$ 730,000

Significant Accounting Polici24

Significant Accounting Policies (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Maximum cash deposit guaranteed by FDIC	$ 250,000		$ 250,000
Cash balances in excess during period	$ 250,000		$ 250,000
Customer One [Member] | Sales Revenue, Net [Member]
Percentage of sale accounted to customer	22.00%		24.00%
Customer One [Member] | Accounts Receivable [Member]
Percentage of sale accounted to customer			29.00%		24.00%
Customer Two [Member] | Sales Revenue, Net [Member]
Percentage of sale accounted to customer	19.00%		13.00%
Customer Two [Member] | Accounts Receivable [Member]
Percentage of sale accounted to customer			11.00%		12.00%
Customer One [Member] | Sales Revenue, Net [Member]
Percentage of sale accounted to customer		24.00%		29.00%
Customer Two [Member] | Sales Revenue, Net [Member]
Percentage of sale accounted to customer		9.00%		12.00%
No Other Customer [Member] | Sales Revenue, Net [Member] | Maximum [Member]
Percentage of sale accounted to customer		10.00%		10.00%
No Other Customer [Member] | Accounts Receivable [Member] | Maximum [Member]
Percentage of sale accounted to customer					10.00%
Vendor One [Member]
Percentage of sale accounted to customer			24.00%	26.00%
Vendor One [Member] | Accounts Payable [Member]
Percentage of sale accounted to customer			21.00%		11.00%
No Other Vendor [Member] | Maximum [Member]
Percentage of sale accounted to customer			10.00%
Vendor Two [Member] | Accounts Payable [Member]
Percentage of sale accounted to customer					10.00%

Significant Accounting Polici25

Significant Accounting Policies - Schedule of Potentially Dilutive Securities (Details) - shares	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Potentially dilutive securities	1,793,553	1,243,905
Warrants [Member]
Potentially dilutive securities	803,909	216,261
Series A Preferred Stock [Member]
Potentially dilutive securities	37,644	37,644
Options [Member]
Potentially dilutive securities	952,000	990,000

Inventory - Schedule of Invento

Inventory - Schedule of Inventory (Details) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Inventory Disclosure [Abstract]
Raw Materials and packaging	$ 4,311,000	$ 4,364,000
Finished Goods	3,494,000	3,563,000
Inventory, total	$ 7,805,000	$ 7,927,000

Property and Equipment (Details

Property and Equipment (Details Narrative) - USD ($)	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 503,000	$ 615,000

Property and Equipment - Schedu

Property and Equipment - Schedule of Property and Equipment (Details) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Property, Plant and Equipment [Abstract]
Land	$ 1,107,000	$ 1,107,000
Building	1,875,000	1,875,000
Vehicles	600,000	500,000
Machinery and equipment	3,695,000	3,800,000
Equipment under capital leases	226,000	857,000
Office equipment	476,000	469,000
Construction in progress	3,584,000	977,000
Property and equipment, gross	11,563,000	9,585,000
Accumulated depreciation	(4,719,000)	(4,216,000)
Property and equipment, net	$ 6,844,000	$ 5,369,000

Notes Payable (Details Narrativ

Notes Payable (Details Narrative)	May 13, 2016USD ($)$ / sharesshares	Apr. 25, 2016USD ($)$ / sharesshares	Nov. 09, 2015USD ($)$ / sharesshares	Sep. 01, 2015USD ($)	Dec. 05, 2014USD ($)	Nov. 09, 2011USD ($)	Sep. 01, 2015USD ($)	Sep. 30, 2016USD ($)Installments$ / shares	Sep. 30, 2015USD ($)	Dec. 31, 2015USD ($)
Line of credit								$ 4,905,000		$ 4,443,000
Percentage of borrowing based on accounts receivable								85.00%
Percentage of borrowing based on eligible inventory								60.00%
Revolving loan, effective interest rate								9.00%
Percentage of monthly management fee as average monthly loan balance								0.45%
Line of credit borrowing availability								$ 946,000
Unamortized balance								4,000
Term loan amount									$ 1,500,000
Equipment loan cost								$ 341,000
Capex Loan [Member]
Loan maturity date								Oct. 1, 2017
Number of monthly installments | Installments								48
Capex loan interest rate								7.00%
Loan balance amount								$ 3,022,000		1,883,000
Maximum amount borrowing increased	$ 3,210,000
Capex Loan [Member] | Maximum [Member]
Term loan outstanding principal balance								3,000,000
Term Loans [Member]
Revolving loan, effective interest rate							14.85%
Term loan outstanding principal balance				$ 1,500,000			$ 1,500,000	$ 3,000,000		$ 3,000,000
Term Loans [Member] | Below $1,000,000 [Member]
Revolving loan, effective interest rate								12.00%
Term loan outstanding principal balance								$ 1,000,000
Term Loans [Member] | Rises To $1,500,000 [Member]
Revolving loan, effective interest rate								9.00%
Term loan outstanding principal balance								$ 1,500,000
Six Month Term Loan B [Member] | Capex Loan [Member]
Revolving loan, effective interest rate								14.85%
Line of credit borrowing availability								$ 6,000,000
Term loan amount								$ 1,500,000
Warrants [Member]
Warrants exercise per share | $ / shares								$ 3.74
Valuation discount amortized during the period								$ 83,000	$ 68,000
Prime Rate [Member]
Revolving loan, effective interest rate								0.35%
Prime Rate [Member] | Capex Loan [Member]
Capex loan interest rate								5.75%
Prime Rate [Member] | Term Loans [Member]
Revolving loan, effective interest rate				11.60%
PMC Financial Services Group, LLC [Member]
Line of credit						$ 6,000,000
Extended line of credit period						2 years
Number of warrants issued during period | shares	50,000
Warrants exercise per share | $ / shares	$ 4.50
Loan maturity date	Oct. 1, 2017
Warrants granted | shares	50,000
Warrants value	$ 38,000
Warrants term	5 years 6 months
Volatility rate	54.17%
Expected dividends	0.00%
Discount rate	1.49%
Warrants amortized period	16 months
Valuation discount amortized during the period								$ 91,000
Unamortized balance								79,000
Line of credit maturity date	Dec. 5, 2016
PMC Financial Services Group, LLC [Member] | Term Loans [Member]
Revolving loan, effective interest rate					9.00%
Number of warrants issued during period | shares			125,000
Warrants exercise per share | $ / shares			$ 4.50
Loan maturity date			Apr. 1, 2017
Warrants granted | shares			125,000
Warrants value			$ 141,000
Warrants term			5 years 6 months
Volatility rate			56.04%
Expected dividends			0.00%
Discount rate			0.68%
Term loan amount								$ 750,000
Term loan outstanding balance increased amount					$ 1,500,000
Loan bears interest, description					Term Loan’s outstanding principal balance was increased to $1,500,000 and the annual interest rate was revised to prime plus 5.75% (currently 9%) subject to adjustment as described below.
Term loan outstanding principal balance			$ 3,000,000
PMC Financial Services Group, LLC [Member] | Warrants [Member]
Number of warrants issued during period | shares		10,000
Warrants exercise per share | $ / shares		$ 3.90
Loan maturity date		Dec. 31, 2016
Warrants granted | shares		10,000
Warrants value		$ 15,000
Warrants term		5 years 6 months
Volatility rate		56.35%
Expected dividends		0.00%
Discount rate		1.50%
Warrants amortized period		8 months
PMC Financial Services Group, LLC [Member] | Prime Rate [Member] | Term Loans [Member]
Revolving loan, effective interest rate					5.75%

Notes Payable - Schedule of Lin

Notes Payable - Schedule of Line of Credit (Details) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Debt Disclosure [Abstract]
Line of credit	$ 4,905,000	$ 4,443,000
Valuation discount	(4,000)	0
Net	$ 4,901,000	$ 4,443,000

Notes Payable - Schedule of Ter

Notes Payable - Schedule of Term Loans Outstanding (Details) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Valuation discount	$ (4,000)
Net	2,921,000	$ 2,868,000
PMC Financial Services Corporation [Member]
Term Loans	3,000,000	3,000,000
Valuation discount	(79,000)	(132,000)
Net	$ 2,921,000	$ 2,868,000

Notes Payable - Schedule of Cap

Notes Payable - Schedule of Capital Expansion Loan (Details) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Debt Disclosure [Abstract]
Capital expansion loan	$ 3,022,000	$ 1,883,000
Current portion	(704,000)	(341,000)
Long-term portion	$ 2,318,000	$ 1,542,000

Obligations under Capital Lea33

Obligations under Capital Leases (Details Narrative)	9 Months Ended
	Sep. 30, 2016USD ($)Installments
Equipment held under capital leases	$ 943,000
Number of non-cancelable capital leases | Installments	12
Payment of lease amount	$ 16,000
Lease expire year	2,020
Minimum [Member]
Payment of lease range per month	$ 341
Percentage of interest for lease amount	6.51%
Maximum [Member]
Payment of lease range per month	$ 10,441
Percentage of interest for lease amount	17.31%

Obligations under Capital Lea34

Obligations under Capital Leases - Schedule of Future Minimum Lease Payments under Capital Leases (Details) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Leases [Abstract]
2,016	$ 56,000
2,017	213,000
2,018	213,000
2,019	174,000
2,020	38,000
Total payments	694,000
Less: Amount representing interest	(96,000)
Present value of net minimum lease payments	598,000
Less: Current portion	(179,000)	$ (153,000)
Non-current portion	$ 419,000	$ 490,000

Long-term Financing Obligation

Long-term Financing Obligation (Details Narrative) - USD ($)	Oct. 02, 2014	Sep. 30, 2016	Sep. 30, 2015
Proceeds from sale of transaction cost		$ 3,056,000
Percentage of interest expense and reduction in the financing obligation at implicit rate		9.90%
Chief Executive Officer [Member]
Proceeds financial obligation limit guaranteed by related party	$ 150,000
Warrants [Member]
Warrants exercise per share		$ 3.74
Amortization of valuation discount		$ 83,000	$ 68,000
Warrants [Member] | Financing Obligation [Member]
Number of warrants issued to purchase of common stock	200,000	400,000
Warrants exercise per share	$ 5.60	$ 1.20
Warrants term	5 years	5 years
Fair value of warrants	$ 584,000	$ 752,000
Warrants expected term	5 years	5 years
Warrants volatility rate	59.53%
Warrants expected dividends	0.00%	0.00%
Warrants discount rate	1.25%
Amortization of warrant, term		15 years
Warrants [Member] | Financing Obligation [Member] | Minimum [Member]
Warrants strike price		$ 2.10
Warrants volatility rate		91.36%
Warrants discount rate		2.15%
Warrants [Member] | Financing Obligation [Member] | Maximum [Member]
Warrants strike price		$ 2.25
Warrants volatility rate		110.90%
Warrants discount rate		2.20%
Christopher J. Reed [Member]
Proceeds financial obligation limit guaranteed by related party		$ 150,000

Long-term Financing Obligatio36

Long-term Financing Obligation - Schedule of Long Term Financing Obligation (Details) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Valuation discount	$ (852,000)	$ (953,000)
Less current portion	182,000	160,000
Long term financing obligation	1,387,000	1,443,000
Long Term Financing Obligation [Member]
Financing obligation	2,421,000	2,538,000
Valuation discount	(852,000)	(935,000)
Net obligation	1,569,000	1,603,000
Less current portion	(182,000)	(160,000)
Long term financing obligation	$ 1,387,000	$ 1,443,000

Stockholders' Equity (Details N

Stockholders' Equity (Details Narrative) - USD ($)	Jun. 02, 2016	Jun. 02, 2016	Sep. 30, 2016	Sep. 30, 2015
Option expire term			5 years
Stock options granted shares			2,500
Shares issued price per share			$ 2.50
Stock options fair value			$ 4,000
Stock options volatility rate			73.00%
Stock options discount rate			1.64%
Stock options dividend yield			0.00%
Weighted average, vesting period			5 years
Exercise price per share			$ 3.74
Stock based compensation			$ 449,000	$ 715,000
Stock options exercised			7,211
Number of option issued under cash-less exercise			15,000
Warrants [Member]
Warrant exercise price per share			$ 3.74
Number of warrants exercised into shares of common stock			16,260
Number of common stock shares exercised during the period			16,260
Number of common stock exercised during the period			$ 45,000
Share-based Compensation Award, Tranche One [Member]
Share based compensation cost amortized option vest period			3 years
Percentage of stock options granted under equity incentive plan			33.00%
Share-based Compensation Award, Tranche Two [Member]
Share based compensation cost amortized option vest period			4 years
Percentage of stock options granted under equity incentive plan			25.00%
Institutional Investors [Member]
Number of shares issuance and sale of common stock during period		692,412
Number of warrants to purchase of common stock shares	346,206	346,206
Net proceeds from offering		$ 2,113,000
Warrant exercise price per share	$ 4.25	$ 4.25
Warrant term		5 years
Placement Agent [Member]
Number of warrants to purchase of common stock shares	72,703	72,703
Warrant exercise price per share	$ 3.74	$ 3.74
Warrant term	5 years
Officers [Member]
Number of shares issuance and sale of common stock during period			30,000
Sale of stock price per share			$ 3.90
Proceeds from sale of stock			$ 117,000

Stockholders' Equity - Schedule

Stockholders' Equity - Schedule of Stock Option Activity (Details)	9 Months Ended
	Sep. 30, 2016USD ($)$ / sharesshares
Shares, Granted	2,500
Shares, Exercised	(7,211)
Options [Member]
Shares Outstanding, Beginning Balance	984,500
Shares, Granted	2,500
Shares, Exercised	(15,000)
Shares, Forfeited or expired	(20,000)
Shares Outstanding, Ending Balance	952,000
Shares Exercisable, Ending Balance	565,001
Weighted-Average Exercise Price, Outstanding Beginning Balance | $ / shares	$ 4.54
Weighted-Average Exercise Price, Granted | $ / shares	2.50
Weighted-Average Exercise Price, Exercised | $ / shares	2.43
Weighted-Average Exercise Price, Forfeited or expired | $ / shares	5.01
Weighted-Average Exercise Price, Outstanding Ending Balance | $ / shares	4.53
Weighted-Average Exercise Price, Exercisable Ending Balance | $ / shares	$ 4.23
Weighted-Average Remaining Contractual Terms (Years), Outstanding Beginning Balance	3 years 1 month 6 days
Weighted-Average Remaining Contractual Terms (Years), Granted	5 years
Weighted-Average Remaining Contractual Terms (Years), Outstanding Ending Balance	2 years 8 months 16 days
Weighted-Average Remaining Contractual Terms (Years), Exercisable Ending Balance	2 years 4 months 10 days
Aggregate Intrinsic Value Shares Outstanding | $	$ 182,500
Aggregate Intrinsic Value Shares Exercisable | $	$ 179,400

Stockholders' Equity - Schedu39

Stockholders' Equity - Schedule of Stock Warrants Activity (Details) - Warrants [Member]	9 Months Ended
	Sep. 30, 2016USD ($)$ / sharesshares
Shares Outstanding, Beginning Balance | shares	341,261
Shares, Granted | shares	478,909
Shares, Exercised | shares	(16,260)
Shares, Forfeited or expired | shares	(1)
Shares Outstanding, Ending Balance | shares	803,909
Shares Exercisable, Ending Balance | shares	743,909
Weighted-Average Exercise Price, Outstanding Beginning Balance | $ / shares	$ 3.74
Weighted-Average Exercise Price, Granted | $ / shares	4.19
Weighted-Average Exercise Price, Exercised | $ / shares	2.77
Weighted-Average Exercise Price, Forfeited or expired | $ / shares
Weighted-Average Exercise Price, Outstanding Ending Balance | $ / shares	4.59
Weighted-Average Exercise Price, Exercisable Ending Balance | $ / shares	$ 4.61
Weighted-Average Remaining Contractual Terms (Years), Outstanding Beginning Balance	3 years 10 months 13 days
Weighted-Average Remaining Contractual Terms (Years), Granted	4 years 7 months 6 days
Weighted-Average Remaining Contractual Terms (Years), Outstanding Ending Balance	4 years 7 months 6 days
Weighted-Average Remaining Contractual Terms (Years), Exercisable Ending Balance	4 years 2 months 12 days
Aggregate Intrinsic Value Shares Outstanding | $
Aggregate Intrinsic Value Shares Exercisable | $