Celsius (CELH) 10-Q 10 Nov 16 2016 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2016	Nov. 09, 2016
Document And Entity Information
Entity Registrant Name	Celsius Holdings, Inc.
Entity Central Index Key	1,341,766
Document Type	10-Q
Trading Symbol	CELH
Document Period End Date	Sep. 30, 2016
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity a Well-known Seasoned Issuer	No
Entity a Voluntary Filer	No
Entity's Reporting Status Current	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		38,666,451
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2,016

Consolidated Balance Sheets (Un

Consolidated Balance Sheets (Unaudited) - USD ($)	Sep. 30, 2016	Dec. 31, 2015	[1]
Current assets:
Cash	$ 7,765,707	$ 10,128,320
Accounts receivable, net	3,402,272	2,127,060
Inventories, net	2,106,329	2,322,904
Prepaid expenses and other current assets	937,534	666,267
Total current assets	14,211,842	15,244,551
Property and equipment, net	36,508	21,319
Total Assets	14,248,350	15,265,870
Current liabilities:
Accounts payable and accrued expenses	1,710,504	1,805,931
Accrued preferred dividend	314,888	190,847
Deferred revenue and other current liabilities	536,536	25,057
Total current liabilities	2,561,928	2,021,835
Long-term liabilities:
Line of credit note payable-related party	4,500,000	4,500,000
Total Liabilities	7,061,928	6,521,835
Stockholders' Equity:
Preferred Stock, $0.001 par value; 2,500,000 shares authorized, 6,380 and 6,380 shares issued and outstanding at September 30, 2016 and December 31, 2015	6	6
Common stock, $0.001 par value; 75,000,000 shares authorized, 38,666,451 and 38,380,380 shares issued and outstanding at September 30, 2016 and December 31, 2015, respectively	38,666	38,380
Additional paid-in capital	59,992,650	58,626,212
Accumulated deficit	(52,844,900)	(49,920,563)
Total Stockholders' Equity	7,186,422	8,744,035
Total Liabilities and Stockholders' Equity	$ 14,248,350	$ 15,265,870
[1]	Derived from Audited Financial Statements

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2016	Dec. 31, 2015	[1]
Statement of Financial Position [Abstract]
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, authorized	2,500,000	2,500,000
Preferred stock, issued	6,380	6,380
Preferred stock, outstanding	6,380	6,380
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, authorized	75,000,000	75,000,000
Common stock, issued	38,666,451	38,380,380
Common stock, outstanding	38,666,451	38,380,380
[1]	Derived from Audited Financial Statements

Consolidated Statements of Oper

Consolidated 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]
Revenue	$ 6,657,700	$ 3,652,424	$ 16,508,097	$ 12,957,334
Cost of revenue	3,772,948	2,143,676	9,339,302	7,581,897
Gross profit	2,884,752	1,508,748	7,168,795	5,375,437
Selling and marketing expenses	1,736,029	1,644,090	6,709,345	3,686,596
General and administrative expenses	1,081,273	616,703	2,936,273	2,508,088
Total operating expense	2,817,302	2,260,793	9,645,618	6,194,684
Income (Loss) from operations	67,450	(752,045)	(2,476,823)	(819,247)
Other Income (Expense):
Interest expense	(57,500)	(57,988)	(171,250)	(264,721)
Total Other Income (Expense)	(57,500)	(57,988)	(171,250)	(264,721)
Net Income (Loss)	9,950	(810,033)	(2,648,073)	(1,083,968)
Preferred stock dividend	(102,958)	(85,452)	(276,264)	(193,394)
Net (Loss) available to common stockholders	$ (93,008)	$ (895,485)	$ (2,924,337)	$ (1,277,362)
Income (Loss) per share:
Basic (in dollars per share)	$ 0	$ (0.02)	$ (0.08)	$ (0.04)
Diluted (in dollars per share)	$ 0	$ (0.02)	$ (0.08)	$ (0.04)
Weighted average shares outstanding:
Basic (in shares)	38,666,451	38,380,382	38,530,195	31,421,909
Diluted (in shares)	38,666,451	38,380,382	38,530,195	31,421,909

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Cash flows from operating activities:
Net Loss	$ (2,648,073)	$ (1,083,968)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization	12,346	26,521
Stock-based compensation expense	1,361,398	1,157,959
Changes in operating assets and liabilities:
Accounts receivable, net	(1,275,212)	1,005,816
Inventories net	216,575	(102,207)
Prepaid expenses and other current assets	(271,267)	(957,223)
Accounts payable and accrued expenses	(95,427)	867,115
Accrued preferred dividends	(152,197)	(156,105)
Deferred revenue and other current liabilities	511,479	187,467
Net cash provided by (used in) in operating activities	(2,340,378)	945,375
Cash flows from investing activities:
Purchase of property and equipment	(27,535)	(4,353)
Net cash (used in) investing activities	(27,535)	(4,353)
Cash flows from financing activities:
Borrowing under revolving note payable, related-party		450,000
Repayment on short term notes payable, related-party		(1,200,000)
Net proceeds from issuance of common stock		11,388,084
Proceeds from exercise of stock options	5,300
Payments on short term notes payable		(74,459)
Net cash provided by financing activities	5,300	10,563,625
Net (decrease) increase in cash	(2,362,613)	11,504,647
Cash at beginning of the period	10,128,320	349,072
Cash at end of the period	7,765,707	11,853,719
Cash paid during period for:
Interest	113,750	206,733
Income Taxes
Non-cash investing and financing activities:
Borrowing under short term notes payable for prepaid expense		91,099
Accrued preferred dividends	276,238	156,506
Preferred stock issuance in exchange for cancellation of revolving note payable, related-party		4,000,000
Conversion of convertible note to common shares, related-party		1,500,000
Conversion of accrued preferred dividend into preferred shares, related-party		$ 180,000

ORGANIZATION AND DESCRIPTION OF

ORGANIZATION AND DESCRIPTION OF BUSINESS	9 Months Ended
	Sep. 30, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
ORGANIZATION AND DESCRIPTION OF BUSINESS	1. ORGANIZATION AND DESCRIPTION OF BUSINESS Business Since the merger, the Company is engaged in the development, marketing, sale and distribution of “functional” calorie-burning fitness beverages under the Celsius® brand name.

BASIS OF PRESENTATION AND SUMMA

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	9 Months Ended
	Sep. 30, 2016
Accounting Policies [Abstract]
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principles of Consolidation – Significant Estimates Segment Reporting Disclosures About Segments of an Enterprise and Related Information Concentrations of Risk ® The Company uses single supplier relationships for its raw materials purchases and filling capacity, which potentially subjects the Company to a concentration of business risk. If these suppliers had operational problems or ceased making product available to the Company, operations could be adversely affected. Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and accounts receivable. The Company places its cash with high-quality financial institutions. At times, balances in the Company’s cash accounts may exceed the Federal Deposit Insurance Corporation limit. At September 30, 2016 the Company had approximately $7.5 million in excess of the Federal Deposit Insurance Corporation limit but has incurred no losses with respect to these accounts. For the nine months ended September 30, 2016 and 2015, the Company had the following 10 percent or greater concentrations of revenue with its customers: 2016 2015 A* 35.0 % 50.5 % B 11.1 % 0.1 % All other 53.9 % 49.4 % Total 100.0 % 100.0 % At September 30, 2016 and December 31, 2015, the Company had the following 10 percent or greater concentrations of accounts receivable with its customers: 2016 2015 A* 54.4 % 50.0 % B 8.1 % 11.8 % All other 37.5 % 38.2 % Total 100.0 % 100.0 % *Revenues and receivables from customer A are derived from a distributor located in Sweden. Cash Equivalents Accounts Receivable Inventories Property and Equipment Impairment of Long-Lived Assets Revenue Recognition Deferred Revenue Advertising Costs Research and Development Fair Value of Financial Instruments Fair Value Measurements Level 1: Observable inputs such as quoted market prices in active markets for identical assets or liabilities. Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data. Level 3: Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions. The Company did not have any assets or liabilities measured at fair value at September 30, 2016 and December 31, 2015. Income Taxes — Accounting for Uncertain Income Tax Positions. Income Taxes (continued) — The Company has adopted ASC 740-10-25 Definition of Settlement, The Company files its tax returns on a fiscal year September 30 th Earnings per Share Share-Based Payments Compensation Stock Compensation Shipping and Handling Costs Recent Accounting Pronouncements The Company adopts all applicable, new accounting pronouncements as of the specified effective dates. In September 2015, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2015-16, Simplifying the Accounting for Measurement-Period Adjustments Recent Accounting Pronouncements (continued) In August 2015, the FASB issued ASU No. 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements (Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting) In April 2015, the FASB issued ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs All new accounting pronouncements issued but not yet effective are not expected to have a material impact on our results of operations, cash flows or financial position. Liquidity

INVENTORIES

INVENTORIES	9 Months Ended
	Sep. 30, 2016
Inventory Disclosure [Abstract]
INVENTORIES	3. INVENTORIES Inventories consist of the following at: September 30, December 31, 2016 2015 Finished goods $ 2,011,775 $ 2,309,288 Raw Materials 260,093 342,691 Less: Inventory Reserve (165,539 ) (329,075 ) Inventories, net $ 2,106,329 $ 2,322,904

PREPAID EXPENSES AND OTHER CURR

PREPAID EXPENSES AND OTHER CURRENT ASSETS	9 Months Ended
	Sep. 30, 2016
Prepaid Expenses And Other Current Assets
PREPAID EXPENSES AND OTHER CURRENT ASSETS	4. PREPAID EXPENSES AND OTHER CURRENT ASSETS Prepaid expenses and other current assets total $937,534 and $666,267, at September 30, 2016 and December 31, 2015, respectively, and consist mainly of prepaid consulting agreement with D3M Licensing Group, advertising, prepaid insurance, prepaid slotting fees, deposits on purchases, and customer deposits.

PROPERTY AND EQUIPMENT

PROPERTY AND EQUIPMENT	9 Months Ended
	Sep. 30, 2016
Property, Plant and Equipment [Abstract]
PROPERTY AND EQUIPMENT	5. PROPERTY AND EQUIPMENT Property and equipment consist of the following at: September 30, December 31, 2016 2015 Furniture and equipment $ 292,030 $ 264,495 Less: accumulated depreciation (255,522 ) (243,176 ) Total $ 36,508 $ 21,319 Depreciation expense amounted to $12,346 and $26,521 during the nine months ended September 30, 2016 and 2015, respectively

ACCOUNTS PAYABLE AND ACCRUED EX

ACCOUNTS PAYABLE AND ACCRUED EXPENSES	9 Months Ended
	Sep. 30, 2016
Payables and Accruals [Abstract]
ACCOUNTS PAYABLE AND ACCRUED EXPENSES	6. ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses consist of the following at: September 30, December 31, 2016 2015 Accounts payable $ 1,054,091 $ 1,207,353 Accrued expenses 656,413 598,578 Total $ 1,710,504 $ 1,805,931

DEFERRED REVENUE AND OTHER CURR

DEFERRED REVENUE AND OTHER CURRENT LIABILITIES	9 Months Ended
	Sep. 30, 2016
Deferred Revenue And Other Current Liabilities
DEFERRED REVENUE AND OTHER CURRENT LIABILITIES	7. DEFERRED REVENUE AND OTHER CURRENT LIABILITIES Deferred revenue and other current liabilities consist of the following at: September 30, December 31, 2016 2015 Customer deposits $ 526,365 $ 13,063 State bottle bill liability 10,171 11,994 Total $ 536,536 $ 25,057

LINE OF CREDIT NOTE PAYABLE - R

LINE OF CREDIT NOTE PAYABLE - RELATED PARTIES	9 Months Ended
	Sep. 30, 2016
Debt Disclosure [Abstract]
LINE OF CREDIT NOTE PAYABLE - RELATED PARTIES	8. LINE OF CREDIT NOTE PAYABLE - RELATED PARTIES Line of credit note payable - related parties consists of the following as of: September 30, December 31, 2016 2015 Note Payable – line of credit In July 2010, the Company entered into a line of credit note payable with a related party which carries interest of five percent per annum. The Company can borrow up to $4,500,000. The Company has pledged all of its assets as security for the line of credit. The notes mature in January 2020, at which time the principal amount is due. During April 2015, the Company issued $4,000,000 of convertible series D preferred series in exchange for cancellation of $4,000,000 of this line. Long-term portion $ 4,500,000 $ 4,500,000

PREFERRED STOCK - RELATED PARTY

PREFERRED STOCK - RELATED PARTY	9 Months Ended
	Sep. 30, 2016
Equity [Abstract]
PREFERRED STOCK - RELATED PARTY	9. PREFERRED STOCK – RELATED PARTY On August 26, 2013, the Company entered into a securities purchase agreement (the “2013 Purchase Agreement”) with CDS Ventures of South Florida, LLC (“CDS”) and CD Financial, LLC (“CD”). CDS and CD are limited liability companies which are affiliates of Carl DeSantis, the Company’s principal shareholder. The Company issued 2,200 shares of its Series C Preferred Stock (the “Preferred C Shares”) in exchange for the conversion of a $550,000 short term loan from CDS and the conversion of $1,650,000 in indebtedness under the Company’s line of credit with CD (the “CD Line of Credit”). The Preferred C Shares are convertible into our common stock at the option of the holder thereof at a conversion price of $0.52 per share at any time until December 31, 2018, at which time they will automatically convert into shares of our common stock determined by dividing the liquidation preference of $1,000 per Preferred C Share by the conversion price then in effect. The conversion price is subject to adjustment in the event of stock dividends, stock splits and similar events. The Preferred C Shares accrue cumulative annual dividends at the rate of 6% per annum, payable by the issuance of additional Preferred C Shares. The holder of Preferred C Shares votes on an “as converted” basis, together with holders of common stock as a single class on all matters presented to shareholders for a vote, except as required by law. In April 2015, the Company issued 180 Preferred C Shares valued at $180,000 in settlement of $180,000 in accrued preferred C dividends. As of September 30, 2016, $263,777 of dividends has been accrued. The Preferred C Shares mature on December 31, 2018 and are redeemable only in exchange for shares of Company common stock. On April 16, 2015, the Company entered into an amendment to its existing Loan and Security Agreement (the “Amendment”) with CD an affiliate of CDS Ventures and Mr. DeSantis. Pursuant to the Amendment, the outstanding principal amount of the CD Line of Credit was reduced by $4.0 million, which amount was converted into 4,000 shares of a newly-designated Series D Preferred Stock (the “Preferred D Shares”). This related party was given a conversion price of $0.86 per common share, whereas other investors purchased common shares at $0.89 in the private placement, as discussed in note 12. The difference of $0.03 per share, which resulted in $139,535, was recorded as a dividend in accordance with ASC 470-20-35, subsequent measurement for debt with conversion and other options. The Preferred D Shares are convertible into our common stock at the option of the holder thereof at a conversion price of $0.86 per share until the earlier of the January 2, 2020 due date of our line of credit with CD Financial or such earlier date as the line of credit is satisfied (the “ Mandatory Redemption Date

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS	9 Months Ended
	Sep. 30, 2016
Related Party Transactions [Abstract]
RELATED PARTY TRANSACTIONS	10. RELATED PARTY TRANSACTIONS The Company’s office is rented from a company affiliated with CD which is controlled by Carl DeSantis, a principal shareholder (see note 13). Currently, the lease expires on October 2020 with monthly rent of $8,809. The rental fee is commensurate with other properties available in the market. In April 2015, the Company entered into a strategic marketing and advisory services agreement with All Def Digital. Tim Leissner, a director and shareholder of the Company is also a director and shareholder in All Def Digital. For the nine months ending as of September 30, 2016, the Company has paid All Def Digital $152,438, for services relating to the strategic marketing and advisory services agreement. Other related party transactions are discussed in notes 8 and 9.

STOCKHOLDERS' EQUITY

STOCKHOLDERS' EQUITY	9 Months Ended
	Sep. 30, 2016
Equity [Abstract]
STOCKHOLDERS' EQUITY	11. STOCKHOLDERS’ EQUITY Issuance of common stock pursuant to services performed In April 2016, the Company issued a total 250,000 “restricted” shares of its common stock as compensation pursuant to celebrity endorsement agreements at a fair value of $560,000, or $2.24 per share representing the closing stock price on that date. Issuance of common stock pursuant to conversion of note In April 2015, the Company issued 5,000,000 unregistered common shares upon conversion of $1,500,000 of convertible notes, at contractual terms. Issuance of common stock pursuant to private placement In April 2015, the Company issued a total of 12,921,348 shares of common stock at $0.89 per share for gross proceeds of $11.5 million (see note 2). Expenses incurred of $111,841 were charged to additional paid in capital and the Company received net proceeds of $11,388,084. Issuance of preferred stock pursuant to private placement Refer to note 9 for discussion on preferred stock issuances. Issuance of common stock pursuant to exercise of stock options During the nine months ended September 30, 2016, the Company issued an aggregate of 36,071 shares of its common stock pursuant to the exercise of stock options granted under the Company’s 2006 Stock Incentive Plan. The Company received aggregate proceeds of $5,300 for options exercised for cash, with the balance of the options having been exercised on a “cashless” basis.

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION	9 Months Ended
	Sep. 30, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
STOCK-BASED COMPENSATION	12. STOCK-BASED COMPENSATION The Company adopted an Incentive Stock Plan on January 18, 2007. This plan is intended to provide incentives which will attract and retain highly competent persons at all levels as employees of the Company, as well as independent contractors providing consulting or advisory services to the Company, by providing them opportunities to acquire the Company's common stock or to receive monetary payments based on the value of such shares pursuant to Awards issued. While the plan terminates 10 years after the adoption date, issued options have their own schedule of termination. During 2013 the majority of the shareholders approved to increase the total available shares in the plan from 2.5 million to 3.5 million shares of common stock. During May 2014, the majority of the shareholders approved to increase the total available shares in the plan from 3.5 million to 4.25 million shares of common stock, during February 2015, the majority of the shareholders approved to increase the total available shares in the plan from 4.25 million to 4.6 million shares of common stock and during April 2015, the majority of the shareholders approved to increase the total available shares in the plan from 4.6 million to 5.1 million shares of common stock. Until 2017, options to acquire shares of common stock may be granted at no less than fair market value on the date of grant. Upon exercise, shares of new common stock are issued by the Company. The Company adopted the 2015 Stock Incentive Plan on April 30, 2015. This plan is intended to provide incentives which will attract and retain highly competent persons at all levels as employees of the Company, as well as independent contractors providing consulting or advisory services to the Company, by providing them opportunities to acquire the Company's common stock or to receive monetary payments based on the value of such shares pursuant to Awards issued. The 2015 Plan permits the grant of options and shares for up to 5,147,000 shares. In addition, there is a provision for an annual increase of 15% of the issued shares under the plan to the shares included under the plan, with the shares to be added on the first day of each calendar year, beginning on January 1, 2016. On January 1 st Cumulatively since inception, the Company has issued options to purchase approximately 5.6 million shares at an average price of $1.00 with a fair value of approximately $1.1 million. For the nine months ended September 30, 2016 and 2015, the Company recognized an expense of $801,398 and $1,157,959, respectively, of non-cash compensation expense (included in General and Administrative expense in the accompanying Consolidated Statement of Operations) determined by application of a Black Scholes option pricing model with the following inputs: exercise price, dividend yields, risk-free interest rate, and expected annual volatility. As of September 30, 2016, the Company had approximately $2,583,593 of unrecognized pre-tax non-cash compensation expense related to non-vested option-based compensation arrangements under the Plan. The Company expects to recognize this expense based on a weighted-average period of 3 years. The Company uses straight-line amortization of compensation expense over the two to three year requisite service or vesting period of the grant. There are options to purchase approximately 4.4 million shares that have vested, of which 307,000 shares were exercised as of September 30, 2016. The Company uses the Black-Scholes option-pricing model to estimate the fair value of its stock option awards and warrant issuances. The calculation of the fair value of the awards using the Black - Scholes option-pricing model is affected by the Company’s stock price on the date of grant as well as assumptions regarding the following: Nine months ended September 30, 2016 2015 Expected volatility 368% - 390% 306% Expected term 4 Years 4 Years Risk-free interest rate 1.36% - 1.61% 0.91% - 1.69% Forfeiture Rate 0.00% 0.00% Expected dividend yield 0.00% 0.00% The expected volatility was determined with reference to the historical volatility of the Company’s stock. The Company uses historical data to estimate option exercise and employee termination within the valuation model. The expected term of options granted represents the period of time that options granted are expected to be outstanding. The risk-free interest rate for periods within the contractual life of the option is based on the U.S. Treasury rate in effect at the time of grant. A summary of the status of the Company’s outstanding stock options as of September 30, 2016 and changes during the period ending on that date is as follows: Weighted Aggregate Average Exercise Intrinsic Remaining Shares Price Value Term (Yrs) Options Balance at December 31, 2015 4,634,166 $ 0.81 $ 5,286,107 5.49 Granted 1,317,500 $ 2.01 Exercised (40,000 ) $ 0.42 Forfeiture and cancelled (140,801 ) $ 1.47 At September 30, 2016 5,770,865 $ 1.07 $ 5,933,912 5.26 Exercisable at September 30, 2016 4,388,296 $ 0.82

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	9 Months Ended
	Sep. 30, 2016
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	13. COMMITMENTS AND CONTINGENCIES The Company has entered into distribution agreements with liquidated damages in case the Company cancels the distribution agreements without cause. Cause has been defined in various ways. It is management’s belief that no such agreement has created any liability as of September 30, 2016. The Company entered into an office lease with a related party (see note 10) effective October 2015. The monthly rent amounts to $8,809 per month and the lease terminates in October 2020. Future annual minimum payments required under operating lease obligations at September 30, 2016 are as follows: Future Minimum Lease Payments Year ending December 31, 2016 $ 27,629 2017 $ 113,461 2018 $ 116,720 2019 $ 120,078 2020 $ 102,455 Total $ 480,343

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	9 Months Ended
	Sep. 30, 2016
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	14. SUBSEQUENT EVENTS We have evaluated events and transactions that occurred subsequent to September 30, 2016 through November 10, 2016, the date these financial statements were issued, for potential recognition or disclosure in the accompanying financial statements.

BASIS OF PRESENTATION AND SUM20

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	9 Months Ended
	Sep. 30, 2016
Accounting Policies [Abstract]
Basis of Presentation and Principles of Consolidation	Basis of Presentation and Principles of Consolidation –
Significant Estimates	Significant Estimates
Segment Reporting	Segment Reporting Disclosures About Segments of an Enterprise and Related Information
Concentrations of Risk	Concentrations of Risk ® The Company uses single supplier relationships for its raw materials purchases and filling capacity, which potentially subjects the Company to a concentration of business risk. If these suppliers had operational problems or ceased making product available to the Company, operations could be adversely affected. Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and accounts receivable. The Company places its cash with high-quality financial institutions. At times, balances in the Company’s cash accounts may exceed the Federal Deposit Insurance Corporation limit. At September 30, 2016 the Company had approximately $7.5 million in excess of the Federal Deposit Insurance Corporation limit but has incurred no losses with respect to these accounts. For the nine months ended September 30, 2016 and 2015, the Company had the following 10 percent or greater concentrations of revenue with its customers: 2016 2015 A* 35.0 % 50.5 % B 11.1 % 0.1 % All other 53.9 % 49.4 % Total 100.0 % 100.0 % At September 30, 2016 and December 31, 2015, the Company had the following 10 percent or greater concentrations of accounts receivable with its customers: 2016 2015 A* 54.4 % 50.0 % B 8.1 % 11.8 % All other 37.5 % 38.2 % Total 100.0 % 100.0 % *Revenues and receivables from customer A are derived from a distributor located in Sweden.
Cash Equivalents	Cash Equivalents
Accounts Receivable	Accounts Receivable
Inventories	Inventories
Property and Equipment	Property and Equipment
Impairment of Long-Lived Assets	Impairment of Long-Lived Assets
Revenue Recognition	Revenue Recognition
Deferred Revenue	Deferred Revenue
Advertising Costs	Advertising Costs
Research and Development	Research and Development
Fair Value of Financial Instruments	Fair Value of Financial Instruments
Fair Value Measurements	Fair Value Measurements Level 1: Observable inputs such as quoted market prices in active markets for identical assets or liabilities. Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data. Level 3: Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions. The Company did not have any assets or liabilities measured at fair value at September 30, 2016 and December 31, 2015.
Income Taxes	Income Taxes — Accounting for Uncertain Income Tax Positions. The Company has adopted ASC 740-10-25 Definition of Settlement, The Company files its tax returns on a fiscal year September 30 th
Earnings per Share	Share-Based Payments Compensation Stock Compensation
Share-Based Payments	Share-Based Payments Compensation Stock Compensation Equity Based Payments of Non-employees
Shipping and Handling Costs	Shipping and Handling Costs
Recent Accounting Pronouncements	Recent Accounting Pronouncements The Company adopts all applicable, new accounting pronouncements as of the specified effective dates. In September 2015, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2015-16, Simplifying the Accounting for Measurement-Period Adjustments In August 2015, the FASB issued ASU No. 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements (Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting) In April 2015, the FASB issued ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs All new accounting pronouncements issued but not yet effective are not expected to have a material impact on our results of operations, cash flows or financial position.
Liquidity	Liquidity

BASIS OF PRESENTATION AND SUM21

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)	9 Months Ended
	Sep. 30, 2016
Accounting Policies [Abstract]
Schedule of revenue & accounts receivable with customers	For the nine months ended September 30, 2016 and 2015, the Company had the following 10 percent or greater concentrations of revenue with its customers: 2016 2015 A* 35.0 % 50.5 % B 11.1 % 0.1 % All other 53.9 % 49.4 % Total 100.0 % 100.0 % At September 30, 2016 and December 31, 2015, the Company had the following 10 percent or greater concentrations of accounts receivable with its customers: 2016 2015 A* 54.4 % 50.0 % B 8.1 % 11.8 % All other 37.5 % 38.2 % Total 100.0 % 100.0 % *Revenues and receivables from customer A are derived from a distributor located in Sweden.

INVENTORIES (Tables)

INVENTORIES (Tables)	9 Months Ended
	Sep. 30, 2016
Inventory Disclosure [Abstract]
Schedule of inventories	Inventories consist of the following at: September 30, December 31, 2016 2015 Finished goods $ 2,011,775 $ 2,309,288 Raw Materials 260,093 342,691 Less: Inventory Reserve (165,539 ) (329,075 ) Inventories, net $ 2,106,329 $ 2,322,904

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 consist of the following at: September 30, December 31, 2016 2015 Furniture and equipment $ 292,030 $ 264,495 Less: accumulated depreciation (255,522 ) (243,176 ) Total $ 36,508 $ 21,319

ACCOUNTS PAYABLE AND ACCRUED 24

ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables)	9 Months Ended
	Sep. 30, 2016
Payables and Accruals [Abstract]
Schedule of accounts payable and accrued expenses	Accounts payable and accrued expenses consist of the following at: September 30, December 31, 2016 2015 Accounts payable $ 1,054,091 $ 1,207,353 Accrued expenses 656,413 598,578 Total $ 1,710,504 $ 1,805,931

DEFERRED REVENUE AND OTHER CU25

DEFERRED REVENUE AND OTHER CURRENT LIABILITIES (Tables)	9 Months Ended
	Sep. 30, 2016
Deferred Revenue And Other Current Liabilities
Schedule of deferred revenue and other current liabilities	Deferred revenue and other current liabilities consist of the following at: September 30, December 31, 2016 2015 Customer deposits $ 526,365 $ 13,063 State bottle bill liability 10,171 11,994 Total $ 536,536 $ 25,057

LINE OF CREDIT NOTE PAYABLE -26

LINE OF CREDIT NOTE PAYABLE - RELATED PARTIES (Tables)	9 Months Ended
	Sep. 30, 2016
Debt Disclosure [Abstract]
Schedule of line of credit note payable - related parties	Line of credit note payable - related parties consists of the following as of: September 30, December 31, 2016 2015 Note Payable – line of credit In July 2010, the Company entered into a line of credit note payable with a related party which carries interest of five percent per annum. The Company can borrow up to $4,500,000. The Company has pledged all of its assets as security for the line of credit. The notes mature in January 2020, at which time the principal amount is due. During April 2015, the Company issued $4,000,000 of convertible series D preferred series in exchange for cancellation of $4,000,000 of this line. Long-term portion $ 4,500,000 $ 4,500,000

STOCK-BASED COMPENSATION (Table

STOCK-BASED COMPENSATION (Tables)	9 Months Ended
	Sep. 30, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Schedule of black - scholes option-pricing model valuation assumption	The calculation of the fair value of the awards using the Black - Scholes option-pricing model is affected by the Company’s stock price on the date of grant as well as assumptions regarding the following: Nine months ended September 30, 2016 2015 Expected volatility 368% - 390% 306% Expected term 4 Years 4 Years Risk-free interest rate 1.36% - 1.61% 0.91% - 1.69% Forfeiture Rate 0.00% 0.00% Expected dividend yield 0.00% 0.00%
Schedule of outstanding stock options	A summary of the status of the Company’s outstanding stock options as of September 30, 2016 and changes during the period ending on that date is as follows: Weighted Aggregate Average Exercise Intrinsic Remaining Shares Price Value Term (Yrs) Options Balance at December 31, 2015 4,634,166 $ 0.81 $ 5,286,107 5.49 Granted 1,317,500 $ 2.01 Exercised (40,000 ) $ 0.42 Forfeiture and cancelled (140,801 ) $ 1.47 At September 30, 2016 5,770,865 $ 1.07 $ 5,933,912 5.26 Exercisable at September 30, 2016 4,388,296 $ 0.82

COMMITMENTS AND CONTINGENCIES (

COMMITMENTS AND CONTINGENCIES (Tables)	9 Months Ended
	Sep. 30, 2016
Commitments and Contingencies Disclosure [Abstract]
Schedule of future annual minimum payments	Future annual minimum payments required under operating lease obligations at September 30, 2016 are as follows: Future Minimum Lease Payments Year ending December 31, 2016 $ 27,629 2017 $ 113,461 2018 $ 116,720 2019 $ 120,078 2020 $ 102,455 Total $ 480,343

BASIS OF PRESENTATION AND SUM29

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - 10% or Greater Revenue [Member]		9 Months Ended
		Sep. 30, 2016	Sep. 30, 2015
Concentration Risk [Line Items]
Total		100.00%	100.00%
Customer A [Member]
Concentration Risk [Line Items]
Total	[1]	35.00%	50.50%
Customer B [Member]
Concentration Risk [Line Items]
Total		11.10%	0.10%
All Other [Member]
Concentration Risk [Line Items]
Total		53.90%	49.40%
[1]	Revenues and receivables from customer A are derived from a distributor located in Sweden.

BASIS OF PRESENTATION AND SUM30

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) - 10% or Accounts Receivable [Member]		9 Months Ended	12 Months Ended
		Sep. 30, 2016	Dec. 31, 2015
Concentration Risk [Line Items]
Total		100.00%	100.00%
Customer A [Member]
Concentration Risk [Line Items]
Total	[1]	54.40%	50.00%
Customer B [Member]
Concentration Risk [Line Items]
Total		8.10%	11.80%
All Other [Member]
Concentration Risk [Line Items]
Total		37.50%	38.20%
[1]	Revenues and receivables from customer A are derived from a distributor located in Sweden.

BASIS OF PRESENTATION AND SUM31

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)	Apr. 20, 2015	Apr. 30, 2016	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Amount excess of FDIC limit			$ 7,500,000		$ 7,500,000		$ 7,500,000
Allowance for doubtful accounts			79,332		79,332		79,332		$ 3,500
Inventory reserve			$ 165,539		165,539		165,539		329,075
Advertising expense							3,400,000	$ 1,900,000
Research and development expense					$ 66,700	$ 57,200
Freight expense							$ 1,478,000	844,000
Number of options outstanding							5,600,000
Exercise price of awards (in dollars per share)			$ 1		$ 1		$ 1
Accumulated deficit			$ (52,844,900)		$ (52,844,900)		$ (52,844,900)		$ (49,920,563)	[1]
Net (loss) available to common stockholders			$ (93,008)	$ (895,485)			(2,924,337)	(1,277,362)
Proceeds from sale of common stock								$ 11,388,084
Private Placement [Member]
Proceeds from sale of common stock	$ 11,500,000	$ 11,500,000
6% Series C Preferred Stock [Member]
Conversion price (in dollars per share)							$ 0.52
Number of preferred stock warrants outstanding							4,600,000
5% Series D Preferred Stock [Member]
Conversion price (in dollars per share)							$ 0.86
Number of preferred stock warrants outstanding							4,700,000
Minimum [Member]
Useful life							3 years
Maximum [Member]
Useful life							7 years
[1]	Derived from Audited Financial Statements

INVENTORIES (Details)

INVENTORIES (Details) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Inventory Disclosure [Abstract]
Finished goods	$ 2,011,775	$ 2,309,288
Raw Materials	260,093	342,691
Less: Inventory Reserve	(165,539)	(329,075)
Inventories, net	$ 2,106,329	$ 2,322,904	[1]
[1]	Derived from Audited Financial Statements

PREPAID EXPENSES AND OTHER CU33

PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details Narrative) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Prepaid Consulting Agreement [Member] | D3M Licensing Group [Member]
Prepaid expenses and other current assets	$ 937,534	$ 666,267

PROPERTY AND EQUIPMENT (Details

PROPERTY AND EQUIPMENT (Details) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Property, Plant and Equipment [Line Items]
Less: accumulated depreciation	$ (255,522)	$ (243,176)
Total	36,508	21,319	[1]
Furniture and Equipment [Member}
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	$ 292,030	$ 264,495
[1]	Derived from Audited Financial Statements

PROPERTY AND EQUIPMENT (Detai35

PROPERTY AND EQUIPMENT (Details Narrative) - USD ($)	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Property And Equipment Details Narrative
Depreciation expense	$ 12,346	$ 26,521

ACCOUNTS PAYABLE AND ACCRUED 36

ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Accounts Payable And Accrued Expenses Details
Accounts payable	$ 1,054,091	$ 1,207,353
Accrued expenses	656,413	598,578
Total	$ 1,710,504	$ 1,805,931	[1]
[1]	Derived from Audited Financial Statements

DEFERRED REVENUE AND OTHER CU37

DEFERRED REVENUE AND OTHER CURRENT LIABILITIES (Details) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Deferred Revenue And Other Current Liabilities
Customer deposits	$ 526,365	$ 13,063
State bottle bill liability	10,171	11,994
Total	$ 536,536	$ 25,057	[1]
[1]	Derived from Audited Financial Statements

LINE OF CREDIT NOTE PAYABLE -38

LINE OF CREDIT NOTE PAYABLE - RELATED PARTIES (Details) - USD ($)	1 Months Ended
	Apr. 30, 2015	Jul. 31, 2010	Sep. 30, 2016	Dec. 31, 2015
Long-term portion			$ 4,500,000	$ 4,500,000	[1]
5% Note Payable - Line of Credit [Member] | Carl DeSantis [Member] | CD Financial, LLC [Member]
Long-term portion			$ 4,500,000	$ 4,500,000
Maximum borrowing capacity		$ 4,500,000
Maturity date		Jan. 2, 2020
5% Note Payable - Line of Credit [Member] | Carl DeSantis [Member] | CD Financial, LLC [Member] | 5% Series D Preferred Stock [Member]
Number of shares issued upon debt cancellation	4,000,000
Debt cancelled amount	$ 4,000,000
[1]	Derived from Audited Financial Statements

PREFERRED STOCK - RELATED PAR39

PREFERRED STOCK - RELATED PARTY (Details Narrative) - USD ($)	Apr. 16, 2015	Aug. 26, 2013	Apr. 30, 2015	Sep. 30, 2016	Dec. 31, 2015	[1]
Accrued dividend				$ 314,888	$ 190,847
Share price (in dollars per share)				$ 1
6% Series C Preferred Stock [Member]
Conversion price (in dollars per share)				0.52
5% Series D Preferred Stock [Member]
Conversion price (in dollars per share)				$ 0.86
Securities Purchase Agreement [Member] | Carl DeSantis [Member] | CDS Ventures of South Florida, LLC & CD Financial, LLC [Member] | 6% Series C Preferred Stock [Member]
Number of shares issued upon debt conversion		2,200
Conversion price (in dollars per share)		$ 0.52
Liquidation preference (in dollars per share)		$ 1,000
Securities Purchase Agreement [Member] | Carl DeSantis [Member] | CDS Ventures of South Florida, LLC [Member] | Short Term Loan [Member]
Original debt conversion amount		$ 550,000
Securities Purchase Agreement [Member] | Carl DeSantis [Member] | CDS Ventures of South Florida, LLC [Member] | 6% Series C Preferred Stock [Member]
Number of shares issued upon accrued dividend			180
value of shares issued upon accrued dividend			$ 180,000
Accrued dividend				$ 263,777
Preferred stock redemption date				Dec. 31, 2018
Securities Purchase Agreement [Member] | Carl DeSantis [Member] | CD Financial, LLC [Member] | 5% Note Payable - Line of Credit [Member]
Original debt conversion amount		$ 1,650,000
Amendment Loan and Security Agreement [Member] | Carl DeSantis [Member] | CD Financial, LLC [Member] | 5% Note Payable - Line of Credit [Member]
Line of credit reduction borrowing capacity	$ 4,000,000
Amendment Loan and Security Agreement [Member] | Carl DeSantis [Member] | CD Financial, LLC [Member] | 5% Series D Preferred Stock [Member]
Number of shares issued upon debt conversion	4,000
Conversion price (in dollars per share)	$ 0.86
Liquidation preference (in dollars per share)	$ 1,000
Accrued dividend	$ 139,535			$ 51,111
Preferred stock redemption date	Jan. 2, 2020
Share price (in dollars per share)	$ 0.89
Dividend payable (in dollars per share)	$ 0.03
Preferred stock redemption price, percent	104.00%
[1]	Derived from Audited Financial Statements

RELATED PARTY TRANSACTIONS (Det

RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($)	1 Months Ended	9 Months Ended
	Apr. 30, 2015	Sep. 30, 2016
CD Financial, LLC [Member] | Carl DeSantis [Member] | Office [Member]
Lease expiration		2020-10
Monthly expense		$ 8,809
All Def Digital [Member] | Mr. Tim Leissner [Member] | Strategic Marketing and Advisory Services Agreement [Member]
Amount paid for services rendered	$ 152,438

STOCKHOLDERS' EQUITY (Details N

STOCKHOLDERS' EQUITY (Details Narrative) - USD ($)	Apr. 20, 2015	Apr. 30, 2016	Sep. 30, 2016	Sep. 30, 2015
Stock price (in dollars per sahre)			$ 1
Proceeds from sale of common stock				$ 11,388,084
2006 Stock Incentive Plan [Member]
Number of option shares granted			36,071
Value of option shares granted			$ 5,300
Private Placement [Member]
Proceeds from sale of common stock	$ 11,500,000	$ 11,500,000
Number of shares issued upon transaction		12,921,348
Share price (in dollars per share)		$ 0.89
Stock issuance cost included in additional paid in capital		$ 111,841
Net proceeds from sale of common stock		$ 11,388,084
Unregistered Common Shares [Member] | Convertible Notes Payable [Member]
Number of shares issued upon debt conversion		5,000,000
Original debt conversion amount		$ 1,500,000
Celebrity Endorsement Agreements [Member] | Restricted Common Stock [Member]
Number of shares issued upon services		250,000
Fair value of shares issued upon services rendered		$ 560,000
Stock price (in dollars per sahre)		$ 2.24

STOCK-BASED COMPENSATION (Detai

STOCK-BASED COMPENSATION (Details)	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Expected volatility		306.00%
Expected term	4 years	4 years
Forfeiture Rate	0.00%	0.00%
Expected dividend yield	0.00%	0.00%
Minimum [Member]
Expected volatility	368.00%
Risk-free interest rate	1.36%	0.91%
Maximum [Member]
Expected volatility	390.00%
Risk-free interest rate	1.61%	1.69%

STOCK-BASED COMPENSATION (Det43

STOCK-BASED COMPENSATION (Details 1) - USD ($)	9 Months Ended	137 Months Ended
	Sep. 30, 2016	Sep. 30, 2016
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Balance at beginning	4,634,166
Granted	1,317,500	5,600,000
Exercised	(40,000)
Forfeiture and cancelled	(140,801)
Balance at end	5,770,865	5,770,865
Exercisable at end	4,388,296	4,388,296
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward]
Balance at beginning	$ 0.81
Granted	2.01	$ 1
Exercised	0.42
Forfeiture and cancelled	1.47
Balance at end	1.07	1.07
Exercisable at end	$ 0.82	$ 0.82
Share-based Compensation Arrangement by Share-based Payment Award, Options, Intrinsic Value [Roll Forward]
Balance at beginning	$ 5,286,107
Balance at end	$ 5,933,912	$ 5,933,912
Share-based Compensation Arrangement by Share-based Payment Award, Options, Average Remaining Term [Roll Forward]
Balance at beginning	5 years 5 months 26 days
Balance at end	5 years 3 months 4 days

STOCK-BASED COMPENSATION (Det44

STOCK-BASED COMPENSATION (Details Narrative) - USD ($)	Jan. 18, 2007	Apr. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Jan. 02, 2016	Feb. 28, 2015	May 31, 2014	Dec. 31, 2013
Number of awards granted			1,317,500		5,600,000
Average share price (in dollars per share)			$ 2.01		$ 1
Fair value of shares granted					$ 1,100,000
Unrecognized pre-tax non-cash compensation expense to non-vested option			$ 2,583,593		$ 2,583,593
Period unrecognized pre-tax non-cash compensation expense to non-vested option			3 years
Number of shares exercised			307,000		307,000
Number of shares vested			4,400,000
Minimum [Member]
Vesting period			2 years
Maximum [Member]
Vesting period			3 years
General And Administrative Expense [Member]
Non-cash compensation expense			$ 801,398	$ 1,157,959
Stock Incentive Plan [Member]
Plan expiration term	10 years
Number of shares authorized	2,500,000	5,100,000					4,600,000	4,250,000	3,500,000
Stock Incentive Plan 2015 [Member]
Number of shares authorized		5,147,000
Description of plan		Provision for an annual increase of 15% of the issued shares under the plan to the shares included under the plan, with the shares to be added on the first day of each calendar year, beginning on January 1, 2016.
Number of option available for grant						147,000

COMMITMENTS AND CONTINGENCIES45

COMMITMENTS AND CONTINGENCIES (Details)	Sep. 30, 2016USD ($)
Commitments and Contingencies Disclosure [Abstract]
2,016	$ 27,629
2,017	113,461
2,018	116,720
2,019	120,078
2,020	102,455
Total	$ 480,343

COMMITMENTS AND CONTINGENCIES46

COMMITMENTS AND CONTINGENCIES (Details Narrative) - CD Financial, LLC [Member] - Carl DeSantis [Member] - Office [Member]	9 Months Ended
	Sep. 30, 2016USD ($)
Lease expiration	2020-10
Monthly expense	$ 8,809