| Summary of Significant Accounting Policies | NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES Basis of Consolidation The condensed consolidated financial
statements include the accounts of the Company and its wholly owned subsidiaries. Intercompany transactions and balances have been
eliminated in consolidation. Stock Split On July 7, 2015, the Companys
shareholders authorized its Board of Directors to effectuate a stock split of the Companys issued and outstanding shares
of common stock at a ratio of 6-for-1 (the Stock Split), which was ultimately declared effective by the Board of
Directors as of the close of business on September 1, 2015. As a result of the Stock Split, every one issued and outstanding share
of the Companys common stock was changed and converted into six shares of common stock. Share related information presented
in these financial statements and accompanying footnotes has been retroactively adjusted to reflect the reduced number of shares
resulting from this action. Income (Loss) Per Share Calculations Basic earnings (loss) per share are
computed by dividing income (loss) available to common shareholders by the weighted-average number of common shares available.
Shares of restricted stock subject to vesting are included in basic weighted average common shares outstanding from the time they
vest. Diluted earnings (loss) per share is computed similar to basic earnings (loss) per share except that the denominator is increased
to include the number of additional common shares that would have been outstanding if the potential common shares had been issued
and if the additional common shares were dilutive. Weighted average number of shares outstanding has been retroactively restated
for the equivalent number of shares received by the accounting acquirer as a result of the reverse merger as if these shares had
been outstanding as of the beginning of the earliest period presented. Revenue Recognition The Company recognizes revenue upon
shipment of the Companys products to its customers, provided that evidence of an arrangement exists, title and risk of loss
have passed to the customer, fees are fixed or determinable, and collection of the related receivable is reasonably assured. Title
to the Companys products primarily is transferred to the customer once the product is shipped from the Companys warehouses.
In certain cases, the products are shipped directly from the Companys vendors directly to the Companys customer,
in which case title is transferred once the product is received by the customer. Products are not shipped until there is a written
agreement with the customer with a specified payment arrangement. Any discounts that are offered are done as a reduction of the
invoiced amount at the time of billing. Payments received before the relevant
criteria for revenue recognition are satisfied are recorded as customer deposits. There were no customer deposits at September
30, 2016 and December 31, 2015. The Company does not offer a general
right of return on any of its sales and considers all sales as final. The Company generally provides a three-year warranty on its
ballasts. The Company does not maintain a warranty reserve as the Company is able to chargeback its vendors for all warranty claims.
As of September 30, 2016 and December 31, 2015, the Company recorded a reserve for returned product in the amount of $130,410,
which reduced the accounts receivable balances as of those periods. Use of Estimates The preparation of the consolidated
financial statements in conformity with accounting principles generally accepted in the U.S requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at
the financial statement date, and reported amounts of revenue and expenses during the reporting period. Significant estimates are
used in valuing our allowances for doubtful accounts and inventory valuations, among others. Actual results could differ from these
estimates. Property and Equipment Property and equipment are carried at
cost less accumulated depreciation and amortization. Depreciation is calculated using the straight-line method over the estimated
useful lives of the assets. The Company has determined the estimated useful lives of its property and equipment, as follows:
Machinery and equipment 5 years
Computer equipment 3 years
Furniture and fixtures 7 years Maintenance and repairs are charged
to expense as incurred. The cost and accumulated depreciation of assets sold or otherwise disposed of are removed from the related
accounts and the resulting gain or loss is reflected in the statements of operations. Income Taxes Income tax expense is based on pretax
financial accounting income. Deferred tax assets and liabilities are recognized for the expected tax consequences of temporary
differences between the tax bases of assets and liabilities and their reported amounts. Valuation allowances are recorded to reduce
deferred tax assets to the amount that will more likely than not be realized. The Company recorded a valuation allowance against
its deferred tax assets as of September 30, 2016 and December 31, 2015. The Company accounts for uncertainty
in income taxes using a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the
tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that
the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step
is to measure the tax benefit as the largest amount that is more than 50 percent likely of being realized upon settlement. The
Company classifies the liability for unrecognized tax benefits as current to the extent that the Company anticipates payment (or
receipt) of cash within one year. Interest and penalties related to uncertain tax positions are recognized in the provision for
income taxes. Concentration Risks The Company operates in markets that
are highly competitive and rapidly changing. Significant technological changes, shifting customer needs, the emergence of competitive
products or services with new capabilities, and other factors could negatively impact the Companys operating results. State
and federal government laws could have a material adverse impact on the Companys future revenues and results of operations. The Companys products require
specific components that currently are available from a limited number of sources. The Company purchases its key products and components
from single vendors. During the nine months ended September 30, 2016 and 2015, its ballasts, lamps and reflectors, which comprised
the vast majority of the Companys purchases during those periods, were each only purchased from one separate vendor. The
ballast vendor is a related party (see Note 4). The Company performs a regular review
of customer activity and associated credit risks and does not require collateral or other arrangements. There was one customer
that accounted for more than 10% of the Companys revenue for the three months ended September 30, 2016, accounting for 13%.
There were no customers that accounted for more than 10% of the Companys revenue for the nine months ended September 30,
2016. There was one customer that accounted for more than 10% of the Companys revenue for the three months ended September
30, 2015, accounting for 11%. There were no customers that accounted for more than 10% of the Companys revenue for the nine
months ended September 30, 2015. Shipments to customers outside the United States comprised 0.9% and 4% for the three months ended
September 30, 2016 and 2015, respectively. Shipments to customers outside the United States comprised 0.5% and 3% for the nine
months ended September 30, 2016 and 2015, respectively. As of September 30, 2016, three customers
accounted for 18%, 13% and 12% of the Companys trade accounts receivable balance, and as of December 31, 2015, two customers
accounted for 15% and 20% of the Companys trade accounts receivable balance. Customers outside the United States represented
0% and 8% of the Companys trade accounts receivable balance as of September 30, 2016 and December 31, 2015, respectively. Fair Value measurements The Company determines the fair value
of its assets and liabilities based on the exchange price in U.S. dollars that would be received for an asset or paid to transfer
a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between
market participants on the measurement date. Valuation techniques used to measure fair value maximize the use of observable inputs
and minimize the use of unobservable inputs. The Company uses a fair value hierarchy with three levels of inputs, of which the
first two are considered observable and the last unobservable, to measure fair value:
● Level 1
● Level 2
● Level 3 The carrying amounts of financial instruments
such as cash, accounts receivable, inventories, and accounts payable and accrued liabilities, approximate the related fair values
due to the short-term maturities of these instruments. Recently Issued Accounting Pronouncements In July 2015, the FASB issued Accounting
Standards Update 2015-11, Simplifying the Measurement of Inventory, which requires that inventory within the scope of ASU 2015-11
be measured at the lower of cost and net realizable value. Inventory measured using last-in, first-out (LIFO) and the retail inventory
method are not impacted by the new guidance. ASU 2015-11 applies to all other inventory, which includes inventory that is measured
using first-in, first-out (FIFO) or average cost. An entity should measure inventory within the scope of ASU 2015-11 at the lower
of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less
reasonably predictable costs of completion, disposal, and transportation. ASU 2015-11 is effective for public business entities
in fiscal years beginning after December 15, 2016, and interim periods within those years. Early adoption is permitted. The Company
is currently evaluating the impact the adoption of ASU 2015-11 on the Companys financial statements and disclosures. In May 2014, the Financial Accounting
Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers. ASU 2014-09
is a comprehensive revenue recognition standard that will supersede nearly all existing revenue recognition guidance under current
U.S. GAAP and replace it with a principle based approach for determining revenue recognition. 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.
ASU 2014-09 is effective for interim and annual periods beginning after December 15, 2017. Early adoption is permitted only in
annual reporting periods beginning after December 15, 2016, including interim periods therein. Entities will be able to 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 Companys financial statements and disclosures. In February 2016, the FASB issued Accounting
Standards Update (ASU) No. 2016-02, Leases. ASU 2016-02 requires a lessee to record a right of use asset and a corresponding lease
liability on the balance sheet for all leases with terms longer than 12 months. ASU 2016-02 is effective for all interim and annual
reporting periods beginning after December 15, 2018. Early adoption is permitted. A modified retrospective transition approach
is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative
period presented in the financial statements, with certain practical expedients available. The Company is in the process of evaluating
the impact of ASU 2016-02 on the Companys financial statements and disclosures. 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 Companys
present or future consolidated financial statements. |
