EAU (EAUI) 10-Q 13 May 15 2015 Q1 Quarterly report Financial data

Document_and_Entity_Informatio

Document and Entity Information	3 Months Ended
	Mar. 31, 2015	12-May-15
Document And Entity Information
Entity Registrant Name	EAU TECHNOLOGIES, INC.
Entity Central Index Key	1170816
Document Type	10-Q
Document Period End Date	31-Mar-15
Amendment Flag	FALSE
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 Common Stock, Shares Outstanding		28,575,371
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2015

BALANCE_SHEETS_Unaudited

BALANCE SHEETS (Unaudited) (USD $)	Mar. 31, 2015	Dec. 31, 2014
CURRENT ASSETS
Cash	$311,651	$259,805
Accounts receivable, net	56,216	56,296
Accounts receivable - related party, net	1,500	1,500
Prepaid expense	3,281	47,438
Inventory, net	104,888	72,290
Total current assets	477,536	437,329
PROPERTY AND EQUIPMENT, net of accumulated depreciation of $120,721 and $120,721
OTHER ASSETS
Intellectual property, net of accumulated amortization of $7,767 and $7,428	143,975	138,101
Total other assets	143,975	138,101
Total assets	621,511	575,430
CURRENT LIABILITIES
Accounts payable	286,066	161,787
Accounts payable - related party	6,354	8,454
Accrued expenses	27,259	44,694
Accrued interest	2,770,161	2,611,490
Warranty reserve	140,000	140,000
Advance deposits on machine orders	365,368	542,793
Advance deposits on machine orders - related party	413,595	413,595
Short term notes payable - related party	330,000	1,290,000
Unsecured short term advances - related party	5,000	5,000
Convertible notes payable - related party, net of iscounts of $46,400 and $0	6,100,427	4,986,827
Total current liabilities	10,444,230	10,204,640
Total Liabilities	10,444,230	10,204,640
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, $.0001 par value; 50,000,000 shares authorized; 8,575,371 and 28,575,371 issued and outstanding, respectively	2,858	2,858
Additional paid in capital	45,772,527	45,726,127
Accumulated deficit	-55,598,104	-55,358,195
Total stockholders' equity (deficit)	-9,822,719	-9,629,210
Total liabilities and stockholders' equity (deficit)	$621,511	$575,430

BALANCE_SHEETS_Unaudited_Paren

BALANCE SHEETS (Unaudited) (Parenthetical) (USD $)	Mar. 31, 2015	Dec. 31, 2014
Assets
Accumulated Depreciation on Property and Equipment	$120,721	$120,721
Liabilities
Discount on Convertible notes payable	$46,400	$0
Stockholders Equity
Common Stock shares par value	$0.00	$0.00
Common Stock shares Authorized	50,000,000	50,000,000
Common Stock shares Issued	8,575,371	28,575,371
Common Stock shares Outstanding	8,575,371	28,575,371

UNAUDITED_STATEMENTS_OF_OPERAT

UNAUDITED STATEMENTS OF OPERATIONS (Unaudited) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Income Statement [Abstract]
NET REVENUES - RELATED PARTY	$2,331	$0
NET REVENUES	291,163	490,974
TOTAL REVENUES	293,494	490,974
COST OF GOODS SOLD	113,448	168,719
GROSS PROFIT	180,046	322,255
OPERATING EXPENSES
Depreciation and amortization	339	339
General and administrative	263,276	376,926
Total operating expenses	263,615	377,265
LOSS FROM OPERATIONS	-83,569	-55,010
OTHER INCOME (EXPENSE)
Interest expense	-158,768	-133,479
Interest income	28	25
Rental income	2,400	2,400
Total other income (expense)	-156,340	-131,054
LOSS BEFORE PROVISION FOR INCOME TAXES	-239,909	-186,064
PROVISION FOR INCOME TAXES	0	0
NET LOSS	($239,909)	($186,064)
BASIC AND DILUTED NET LOSS PER SHARE	($0.01)	($0.01)
WEIGHTED AVERAGE OF SHARES OUTSTANDING	28,575,371	28,575,371

STATEMENTS_OF_CASH_FLOWS_Unaud

STATEMENTS OF CASH FLOWS (Unaudited) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	($239,909)	($186,064)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	339	339
Warrants and options vested or issued for services	0	484
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable	80	17,877
Decrease in prepaid expense	44,157	44,695
(Increase) in inventory	-32,598	-36,344
Increase (decrease) in accounts payable	122,179	-25,491
(Decrease) in advance deposits for machine orders	-177,425	-17,605
Increase (decrease) in accrued expenses	-17,435	7,646
Increase in accrued interest	158,671	133,383
Net cash (used) in operating activities	-141,941	-61,080
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for intellectual property	-6,213	-115
Net cash (used) in investing activities	-6,213	-115
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from unsecured short term advances - related party	200,000	285,000
Net cash provided by financing activities	200,000	285,000
NET INCREASE IN CASH	51,846	223,805
Cash, beginning of period	259,805	2,654
Cash, end of period	311,651	226,459
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for: Interest paid	97	96
Cash paid during the period for: Income Taxes paid	$0	$0

1_BASIS_OF_PRESENTATION

1. BASIS OF PRESENTATION	3 Months Ended
	Mar. 31, 2015
Accounting Policies [Abstract]
BASIS OF PRESENTATION	The accompanying condensed financial statements were prepared by the Company without audit pursuant to the rules and regulations of the Securities and Exchange Commission (SEC).  Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations.  In management’s opinion all necessary adjustments, which consist primarily of normal recurring adjustments, to the financial statements have been made to present fairly the financial position and results of operations and cash flows.  The results of operations for the respective periods presented are not necessarily indicative of the results for the respective complete years.  The financial statements should be read in conjunction with the financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2014.
	Certain prior period amounts have been reclassified in the condensed financial statements to conform to current period presentation.

2_INVENTORIES

2. INVENTORIES	3 Months Ended
	Mar. 31, 2015
Inventory Disclosure [Abstract]
2. INVENTORIES	The composition of inventories is as follows at:
		March 31,			December 31,
		2015			2014
	Finished goods	$	17,768		$	-
	Raw materials		477,757			426,927
	Allowance for obsolete inventory		(390,637	)		(390,637	)
		$	104,888		$	72,290

3_WARRANTY_RESERVE

3. WARRANTY RESERVE	3 Months Ended
	Mar. 31, 2015
Guarantees [Abstract]
3. WARRANTY RESERVE	The Company warrants its products against defects in materials and workmanship for a period of three years.  The Company reviews the historical experience of failure rates and estimates the rate of warranty claims that will be made and has accrued a warranty reserve for these anticipated future warranty costs.  If actual results differ from the estimates, the Company would adjust the estimated warranty liability.  Changes in the warranty reserve for the three months ended March 31, 2015, and for the year ended December 31, 2014 are as follows:
		March 31,		December 31,
		2015		2014
	Warranty reserve at beginning of period	$	140,000	$	160,000
	Costs accrued for additional warranties		-		1,001
	Service obligations honored		-		(1,001	)
	Reduction in accrued estimate		-		(20,000	)
	Warranty reserve at end of period	$	140,000	$	140,000

4_CONVERTIBLE_NOTES_PAYABLE_RE

4. CONVERTIBLE NOTES PAYABLE - RELATED PARTIES	3 Months Ended
	Mar. 31, 2015
Debt Disclosure [Abstract]
4. CONVERTIBLE NOTES PAYABLE - RELATED PARTIES	At various times throughout 2014, funds totaling $1,160,000 were advanced to the Company by Mr. Ullrich, a related party.  In April 2015, the Company entered into a loan agreement with this related party which formalized those advances into a note payable.  This balance has been included on the balance sheet in related party notes payable as of December 31, 2014.  The loan agreement provides for interest at a rate of 10% annually and will mature on November 30, 2015.  The outstanding balance under the Loan Agreement is convertible into shares of the Company’s common stock at $0.31 per share and no principal or interest payments are due until maturity.  The Loan Agreement provides that accrued interest and the outstanding principal balance can be prepaid, in whole or in part, at any time without premium or penalty. In connection with the negotiation of the Loan Agreement, the Company also granted a warrant to purchase up to 1,160,000 shares of the Company’s common stock at an exercise of $0.31 per share. The warrant expires in April 2020.  Due to the warrants issued in connection with the loan, the Company recognized a debt discount of $46,400 in interest expense.
	In April 2014, the Company entered into a loan agreement with Mr. Ullrich, a related party, which formalized $303,300 in advances into a note payable.  The loan agreement provides for interest at a rate of 10% annually and has been extended to mature on November 30, 2015.  The outstanding balance under the Loan Agreement is convertible into shares of the Company’s common stock at $0.31 per share and no principal or interest payments are due until maturity.  The Loan Agreement provides that accrued interest and the outstanding principal balance can be prepaid, in whole or in part, at any time without premium or penalty. In connection with the negotiation of the Loan Agreement, the Company also granted a warrant to purchase up to 303,300 shares of the Company’s common stock at an exercise of $0.31 per share. The warrant expires in April, 2019.
	In May 2013, the Company entered into Promissory Notes (“Promissory Notes”) with Peter Ullrich and Theodore Jacoby, related parties.  Mr. Ullrich agreed to lend the Company $80,000 and Mr. Jacoby agreed to lend the Company $50,000.  The Promissory Notes provide for interest at a rate of 10% annually.  No principal or interest payments are due until maturity.  The Promissory Notes provide that accrued interest and the outstanding principal balance can be prepaid, in whole or in part, at any time without premium or penalty.  In November 2013, the Company entered into Amended Promissory Note agreements to extend the notes from November 2013 to May 2014. In May 2014, the Promissory Notes were again extended to May 2015.
	In January 2013, the Company entered into a loan agreement with a related party.  The principal amount of the Note is $1,325,000.  The Loan Agreement provides for interest at a rate of 10% annually and had an initial maturity of November 30, 2013. The loan agreement was subsequently amended to provide a maturity date of November 30, 2015. The outstanding balance under the Loan Agreement is convertible into shares of the Company’s common stock at $0.31 per share and no principal or interest payments are due until maturity.  The Loan Agreement provides that accrued interest and the outstanding principal balance can be prepaid, in whole or in part, at any time without premium or penalty. In connection with the negotiation of the Loan Agreement, the Company also granted a warrant to purchase up to 1,325,000 shares of the Company’s common stock at an exercise of $0.31 per share. The warrant expires on January 31, 2018.  Due to the warrants issued in connection with the loan, the Company recognized a debt discount of $26,500 in interest expense.  The Company also recognized approximately $26,500 in interest expense related to the amortization of this debt discount.
	In September 2005, the Company entered into a Senior Convertible Note (the “Note”) with Water Science, a related party, in exchange for $3,000,000. Pursuant to the debt agreement, the Note accrues interest at the rate of 3% per annum and was initially due, principal and interest together, on September 16, 2008.  In June 2008, Water Science agreed to extend the maturity date of the Note to March 16, 2009.
	In March 2009, the Company and Water Science agreed to extend the maturity date to September 16, 2009 and increase the interest rate to 10%.  No principal or interest payments need to be paid during the loan period.  In October 2008, as part of a new financing agreement, the Company amended the Note and changed the conversion rate from $3.00 per share to $1.00 per share.
	The Note may be converted into 3,000,000 shares of the Company’s $0.0001 par value common stock prior to the maturity date, and at any time, by the holder at a price per share equal to $1.00 per share, subject to certain other conversion adjustments.  The Company granted a security interest in all of the Company’s assets as collateral for the loan.  In connection with the original issuance of the Note, the Company granted a three year warrant to purchase up to two million shares of the Company’s $0.0001 par value common stock with an exercise price of $2.76 per share.
	Beginning in 2009 and each year thereafter, the Company entered into agreements with Water Science to extend the maturity date of the Note by an additional year. Most recently, in March 2015 the Company entered into an agreement with Water Science to extend the Note until November 30, 2015.
	In December 2011, the Company entered into an agreement to convert $358,527 of accrued interest into a new convertible note.  Simple interest accrued at a rate of 10% per annum on the unpaid principal amount outstanding and the loan was set to mature on November 30, 2013, at which time accrued interest and the outstanding principal balance shall be due.  The agreement contains an optional conversion right, whereby the Lender may convert all or any portion of the outstanding principal and interest due into shares of the Company’s common stock at a price per share equal to $1.00 per share.  In connection with the issuance of the convertible note, the Company granted a five year warrant to purchase up to 358,527 shares of the Company’s $0.0001 par value common stock with an exercise price of $0.31 per share.
	In March 2015, the Company entered into agreements with Mr. Ullrich to extend the $358,527 Note and the $1,325,000 Note until November 30, 2015.

5_RELATED_PARTY_TRANSACTIONS

5. RELATED PARTY TRANSACTIONS	3 Months Ended
	Mar. 31, 2015
Related Party Transactions [Abstract]
5. RELATED PARTY TRANSACTIONS	Sales to Affiliates – In September 2005, Water Science, a related party, paid to the Company $1,000,000 for the exclusive rights to sell our products in South America and Mexico.  This agreement also gives Water Science the rights to purchase machinery from the Company at cost plus 25 percent.  The Company had sales of $2,331 and $0 to Water Science during the three months ended March 31, 2015 and 2014.  The Company has received and recorded $413,595 in advance deposits from Water Science on machine orders at March 31, 2015, and December 31, 2014.
	Convertible Notes Payable – See Note 4 for disclosure of related party Convertible Notes Payable.
	Advances – Periodically throughout the year, the Company advances employees cash for certain reimbursable expenses.  As of March 31, 2015 and December 31, 2014, the Company had advances to an employee in the amount of $1,500 and $1,500, respectively.
	Unsecured Short Term Advances – In January and March 2015, the Company obtained an unsecured short term advances of $100,000 and $100,000 from Peter Ullrich a member of the Board of Directors of the Company.  The final agreement to document the advances has not been signed, and the material terms are not final. It is anticipated that the final loan will be at 10% simple interest and conversion rights into Company common stock.  The material terms of the final agreement will be disclosed in subsequent filings with the Securities and Exchange Commission.

6_CAPITAL_STOCK

6. CAPITAL STOCK	3 Months Ended
	Mar. 31, 2015
Equity [Abstract]
6. CAPITAL STOCK	The Company has certain notes payable to related parties that are convertible into shares of the Company’s common stock.  See Note 4.

7_GOING_CONCERN

7. GOING CONCERN	3 Months Ended
	Mar. 31, 2015
Organization, Consolidation and Presentation of Financial Statements [Abstract]
7. GOING CONCERN	At March 31, 2015 the Company had deficit working capital, deficit equity and has sustained recurring losses from operations, all of which raise substantial doubt about the Company’s ability to continue as a going concern.  The financial statements have been prepared on a going concern basis, which contemplates continuity of operations, realization of assets and satisfaction of liabilities in the ordinary course of business. However, as a result of recurring operating losses, such realization of assets and satisfaction of liabilities are subject to uncertainty, which raises substantial doubt about the Company's ability to continue as a going concern.   The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Our auditors have issued their Independent Registered Public Accountants’ Report on the Company's financial statements for the fiscal year ended December 31, 2014 with an explanatory paragraph regarding the Company's ability to continue as a going concern.
	The Company estimates that it may need up to $1,200,000 for the upcoming twelve months to execute our business plan.  Management plans to mitigate its losses in the near term through the further development and marketing of its trademarks, brand and product offerings.

8_SUMMARY_OF_SIGNIFICANT_ACCOU

8. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	3 Months Ended
	Mar. 31, 2015
Notes to Financial Statements
8. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	Receivables
	Receivables represent valid claims against debtors for sales or other charges arising on or before the balance-sheet date and are reduced to their estimated net realizable value.  The Company estimates allowances for doubtful accounts based on the aged receivable balances and historical losses.  The Company charges off uncollectible accounts receivable when management estimates no possibility of collecting the related receivable.
	Basic and Fully Diluted Loss Per Share
	Basic and Fully Diluted net loss per share is computed using the weighted-average number of common shares outstanding during the period.
		For the Three Months Ended
		March 31,
		2015			2014
	Net Loss (numerator)	$	(239,909	)	$	(186,064	)
	Shares (denominator)		28,575,371			28,575,371
	Per share amount	$	(0.01	)	$	(0.01	)
	The Company’s outstanding stock options and warrants have been excluded from the basic net loss per share calculation for the three month period ended March 31, 2015 and 2014, because they are anti-dilutive.
	Stock Based-Compensation Expense
	Stock-based compensation is calculated according to FASB ASC Topic 718, Compensation — Stock Compensation, which requires a fair-value-based measurement method to account for stock-based compensation. The Company uses the Binomial valuation formula, which is a closed-form model that uses an equation to determine the estimated fair value of stock options.  Stock-based compensation expense recognized for the three month period ended March 31, 2015 and 2014 was $0 and $484 respectively, related to employee and director stock options issued and vesting during the period.
	The following table is a summary of the status of the warrants and options granted and outstanding at March 31, 2015:
		Number of Options and Warrants			Weighted Average Exercise Price
	Outstanding at beginning of period		6,413,154		$	0.31
	Granted		1,160,000		$	0.31
	Exercised		-		$	-
	Forfeited		(7,500	)	$	0.31
	Expired		-		$	-
	Outstanding at end of period		7,565,654		$	0.31
	A summary of the status of the warrants and options outstanding at March 31, 2015 is presented below:
	Warrants Outstanding							Warrants Exercisable
	Range of				Weighted-Average			Weighted-Average		Weighted-Average
	Exercise		Number		Remaining			Exercise	Number	Exercise
	Prices		Outstanding		Contractual Life			Price	Exercisable	Price
	$.01-.50		7,565,654		3.5 years			$0.31	7,565,654	$0.31
	The fair value of each warrant and option granted is estimated on the date granted using the Binomial pricing model.

9_SUBSEQUENT_EVENTS

9. SUBSEQUENT EVENTS	3 Months Ended
	Mar. 31, 2015
Subsequent Events [Abstract]
9. SUBSEQUENT EVENTS	In accordance with ASC 855, management evaluated events subsequent to March 31, 2015 and concluded there were no other events or transactions during this period that required recognition or disclosure in its financial statements.

8_SUMMARY_OF_SIGNIFICANT_ACCOU1

8. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	3 Months Ended
	Mar. 31, 2015
Notes to Financial Statements
Receivables	Receivables represent valid claims against debtors for sales or other charges arising on or before the balance-sheet date and are reduced to their estimated net realizable value.  The Company estimates allowances for doubtful accounts based on the aged receivable balances and historical losses.  The Company charges off uncollectible accounts receivable when management estimates no possibility of collecting the related receivable.
Basic and Fully Diluted Loss Per Share	Basic and Fully Diluted net loss per share is computed using the weighted-average number of common shares outstanding during the period.
		For the Three Months Ended
		March 31,
		2015			2014
	Net Loss (numerator)	$	(239,909	)	$	(186,064	)
	Shares (denominator)		28,575,371			28,575,371
	Per share amount	$	(0.01	)	$	(0.01	)
	The Company’s outstanding stock options and warrants have been excluded from the basic net loss per share calculation for the three month period ended March 31, 2015 and 2014, because they are anti-dilutive.
Stock Based-Compensation Expense	Stock-based compensation is calculated according to FASB ASC Topic 718, Compensation — Stock Compensation, which requires a fair-value-based measurement method to account for stock-based compensation. The Company uses the Binomial valuation formula, which is a closed-form model that uses an equation to determine the estimated fair value of stock options.  Stock-based compensation expense recognized for the three month period ended March 31, 2015 and 2014 was $0 and $484 respectively, related to employee and director stock options issued and vesting during the period.
	The following table is a summary of the status of the warrants and options granted and outstanding at March 31, 2015:
		Number of Options and Warrants			Weighted Average Exercise Price
	Outstanding at beginning of period		6,413,154		$	0.31
	Granted		1,160,000		$	0.31
	Exercised		-		$	-
	Forfeited		(7,500	)	$	0.31
	Expired		-		$	-
	Outstanding at end of period		7,565,654		$	0.31
	A summary of the status of the warrants and options outstanding at March 31, 2015 is presented below:
	Warrants Outstanding							Warrants Exercisable
	Range of				Weighted-Average			Weighted-Average		Weighted-Average
	Exercise		Number		Remaining			Exercise	Number	Exercise
	Prices		Outstanding		Contractual Life			Price	Exercisable	Price
	$.01-.50		7,565,654		3.5 years			$0.31	7,565,654	$0.31
	The fair value of each warrant and option granted is estimated on the date granted using the Binomial pricing model.

2_INVENTORIES_Tables

2. INVENTORIES (Tables)	3 Months Ended
	Mar. 31, 2015
Inventory Disclosure [Abstract]
Composition of Inventories		March 31,			December 31,
		2015			2014
	Finished goods	$	17,768		$	-
	Raw materials		477,757			426,927
	Allowance for obsolete inventory		(390,637	)		(390,637	)
		$	104,888		$	72,290

3_WARRANTY_RESERVE_Tables

3. WARRANTY RESERVE (Tables)	3 Months Ended
	Mar. 31, 2015
Guarantees [Abstract]
Warranty Reserve		March 31,		December 31,
		2015		2014
	Warranty reserve at beginning of period	$	140,000	$	160,000
	Costs accrued for additional warranties		-		1,001
	Service obligations honored		-		(1,001	)
	Reduction in accrued estimate		-		(20,000	)
	Warranty reserve at end of period	$	140,000	$	140,000

8_SUMMARY_OF_SIGNIFICANT_ACCOU2

8. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)	3 Months Ended
	Mar. 31, 2015
Summary Of Significant Accounting Policies Tables
Basic and Fully Diluted net loss per share using weighted-average number of common shares outstanding		For the Three Months Ended
		March 31,
		2015			2014
	Net Loss (numerator)	$	(239,909	)	$	(186,064	)
	Shares (denominator)		28,575,371			28,575,371
	Per share amount	$	(0.01	)	$	(0.01	)
Summary of the status of warrants and options granted and outstanding		Number of Options and Warrants			Weighted Average Exercise Price
	Outstanding at beginning of period		6,413,154		$	0.31
	Granted		1,160,000		$	0.31
	Exercised		-		$	-
	Forfeited		(7,500	)	$	0.31
	Expired		-		$	-
	Outstanding at end of period		7,565,654		$	0.31
Status of warrants outstanding	Warrants Outstanding							Warrants Exercisable
	Range of				Weighted-Average			Weighted-Average		Weighted-Average
	Exercise		Number		Remaining			Exercise	Number	Exercise
	Prices		Outstanding		Contractual Life			Price	Exercisable	Price
	$.01-.50		7,565,654		3.5 years			$0.31	7,565,654	$0.31

2_INVENTORIES_INVENTORIES_Deta

2. INVENTORIES - INVENTORIES (Details) (USD $)	Mar. 31, 2015	Dec. 31, 2014
Notes to Financial Statements
Finished goods	$17,768	$0
Raw materials	477,757	426,927
Allowance for obsolete inventory	-390,637	-390,637
Total	$104,888	$72,290

3_WARRANTY_RESERVE_Details

3. WARRANTY RESERVE (Details) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014
Notes to Financial Statements
Warranty reserve at beginning of period	$140,000	$160,000
Costs accrued for additional warranties	0	1,001
Service obligations honored	0	-1,001
Reduction in accrued estimate	0	-20,000
Warranty reserve at end of period	$140,000	$140,000	$140,000

5_RELATED_PARTY_TRANSACTIONS_D

5. RELATED PARTY TRANSACTIONS (Details Narrative) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014
Related Party Transactions Details Narrative
Sales	$2,331	$0
Received and recorded advance from Water Science	413,595		413,595
Advances to employees	$1,500		$1,500

8_SUMMARY_OF_SIGNIFICANT_ACCOU3

8. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Notes to Financial Statements
Net Loss (numerator)	($239,909)	($186,064)
Shares (denominator)	28,575,371	28,575,371
Per share amount	($0.01)	($0.01)

8_SUMMARY_OF_SIGNIFICANT_ACCOU4

8. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) (USD $)	3 Months Ended
	Mar. 31, 2015
Number of Options and Warrants
Outstanding at beginning of period	6,413,154
Granted	1,160,000
Exercised	0
Forfeited	-7,500
Expired	0
Outstanding at end of period	7,565,654
Weighted Average Exercise Price
Outstanding at beginning of period	$0.31
Granted	$0.31
Exercised	$0
Forfeited	$0.31
Expired	$0
Outstanding at end of period	$0.31

8_SUMMARY_OF_SIGNIFICANT_ACCOU5

8. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) (USD $)	3 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Notes to Financial Statements
Exercise Prices, Range Minimum	$0.01
Exercise Prices, Range Maximum	$0.50
Warrants Outstanding
Number Outstanding	7,565,654	6,413,154
Weighted-Average Remaining Contractual Life	3 years 6 months
Weighted-Average Exercise Price	$0.31
Warrants Exercisable
Number Exercisable	7,565,654
Weighted-Average Exercise Price	$0.31

8_SUMMARY_OF_SIGNIFICANT_ACCOU6

8. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Notes to Financial Statements
Stock-based compensation expense recognized	$0	$484