Generation Alpha (GNAL) 10-Q 8 May 17 2017 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2017	May 08, 2017
Document And Entity Information
Entity Registrant Name	Solis Tek, Inc./NV
Entity Central Index Key	1,398,137
Document Type	10-Q
Document Period End Date	Mar. 31, 2017
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		36,593,077
Trading Symbol	SLTK
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2,017

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($)	Mar. 31, 2017	Dec. 31, 2016
CURRENT ASSETS
Cash	$ 414,937	$ 275,783
Accounts Receivable, net of allowance for doubtful accounts of $411,822 and $359,395	1,286,373	628,691
Inventories	2,014,820	2,880,804
Advances to suppliers	192,857
Prepaid expenses and other current assets	77,363	75,109
Total current assets	3,986,350	3,860,387
Property and equipment, net	190,391	204,936
Other assets	32,072	32,071
TOTAL ASSETS	4,208,813	4,097,394
CURRENT LIABILITIES
Accounts payable and accrued expenses	735,519	552,057
Due to related party vendor	422,526	1,083,764
Note payable - related parties	545,000	265,000
Amount due to related parties	137,508	134,086
Capital lease obligations, current portion	11,919	13,711
Loans payable, current portion	8,161	8,262
Total Current Liabilities	1,860,633	2,056,880
Capital lease obligations, net of current portion	8,102	9,665
Loans payable, net of current portion	24,020	25,958
Notes payable related parties, net of current portion	600,000	600,000
Total liabilities	2,492,755	2,692,503
Commitments and contingencies
Shareholders' Equity
Preferred stock, no par value, 20,000,000 shares authorized; no shares issued and outstanding
Common stock, $0.001 par value, 100,000,000 shares authorized; 36,593,077 and 29,721,998 shares issued and outstanding at March 31, 2017 and December 31, 2016, respectively	3,660	2,972
Additional paid-in-capital	6,885,058	2,822,592
Accumulated deficit	(5,172,660)	(1,420,673)
Total Shareholders' Equity	1,716,058	1,404,891
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$ 4,208,813	$ 4,097,394

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($)	Mar. 31, 2017	Dec. 31, 2016
Statement of Financial Position [Abstract]
Accounts Receivable net of allowance for doubtful accounts and returns	$ 411,822	$ 359,395
Preferred stock, no par value
Preferred stock, shares authorized	20,000,000	20,000,000
Preferred stock, shares issued
Preferred stock, shares outstanding
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	36,593,077	29,721,998
Common stock, shares outstanding	36,593,077	29,721,998

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Income Statement [Abstract]
Sales	$ 2,901,826	$ 2,584,668
Cost of goods sold (including $1,465,996 and $1,366,622 from related party)	1,781,304	1,658,711
Gross profit	1,120,522	925,957
Operating expenses
Selling, general and administrative expenses	4,764,655	753,694
Research and development	82,770	57,000
Total operating expenses	4,847,425	810,694
Loss from operations	(3,726,903)	115,263
Interest expense	(24,171)	(26,774)
Loss before income taxes	(3,751,074)	88,489
Provision for income taxes	913	43,529
NET INCOME (LOSS)	$ (3,751,987)	$ 44,960
BASIC AND DILUTED LOSS PER SHARE	$ (0.10)	$ 0
WEIGHTED - AVERAGE COMMON SHARES OUTSTANDING BASIC AND DILUTED	36,388,724	29,594,800

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Operations (Unaudited) (Parenthetical) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Income Statement [Abstract]
Cost of goods sold from related party	$ 1,465,996	$ 1,366,622

Condensed Consolidated Stateme6

Condensed Consolidated Statement of Shareholders' Equity (Unaudited) - 3 months ended Mar. 31, 2017 - USD ($)	Common Stock [Member]	Additional Paid-In Capital [Member]	Accumulated Deficit [Member]	Total
Balance at Dec. 31, 2016	$ 2,972	$ 2,822,592	$ (1,420,673)	$ 1,404,891
Balance, shares at Dec. 31, 2016	29,721,998
Net proceeds from the sale of common stock	$ 38	299,962		300,000
Net proceeds from the sale of common stock, shares	375,000
Fair value of common stock issued for services	$ 30	512,970		513,000
Fair value of common stock issued for services, shares	300,000
Fair value of common stock issued to employees	$ 620	3,184,380		3,185,000
Fair value of common stock issued to employees, shares	6,196,079
Fair Value of vested options		65,154		65,154
Net loss			(3,751,987)	(3,751,987)
Balance at Mar. 31, 2017	$ 3,660	$ 6,885,058	$ (5,172,660)	$ 1,716,058
Balance, shares at Mar. 31, 2017	36,593,077

Condensed Consolidated Stateme7

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Cash Flows from Operating Activities
Net Loss	$ (3,751,987)	$ 44,960
Adjustments to reconcile net loss to net cash used in operating activities
Provision for bad debt expense	52,487	38,935
Depreciation and amortization	17,745	17,515
Amortization of loan fees		10,000
Interest expense on loans payable to officers		3,889
Interest expense on loans payable - related parties	3,422	4,378
Fair value of common stock issued for services	3,763,154	36,000
(Increase) Decrease in:
Accounts receivable	(710,169)	(412,030)
Inventories	865,984	805,924
Advances to suppliers	(192,857)	(43,741)
Prepaid expenses and other	(2,254)	(14,430)
(Decrease) Increase in:
Accounts payable and accrued expenses	183,461	(164,145)
Due to related party vendor	(661,238)	(93,436)
Income taxes payable		43,529
Net cash used in operating activities	(432,252)	277,348
Cash Flows from Investing Activities
Purchase of property and equipment	(3,200)
Net cash used in investing activities	(3,200)
Cash Flows from Financing Activities
Net proceeds from sale of common stock	300,000
Payments on capital lease obligations	(3,355)	(3,127)
Payments on loans payable	(2,039)	(193,518)
Proceeds from notes payable related parties	300,000	110,000
Payments on notes payable related parties	(20,000)
Net cash provided by financing activities	574,606	(86,645)
Net increase (decrease) in cash	139,154	190,703
Cash beginning of period	275,783	106,316
Cash end of period	414,937	297,019
Interest paid	10,999	18,507
Taxes paid		$ 3,126

Basis of Presentation

Basis of Presentation	3 Months Ended
	Mar. 31, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation	NOTE 1 – BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements of Solis Tek Inc. and Subsidiaries (the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all normal recurring adjustments considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017. History and Organization Solis Tek Inc. (the “Company”) was originally incorporated under the laws of the State of Nevada on March 2, 2007 as Cinjet, Inc. (“Cinjet”). Effective September 1, 2015, Cinjet changed its corporate name to Solis Tek Inc. On June 23, 2015, the Company entered into an Agreement of Merger and Plan of Reorganization (the “Agreement”) with Solis Tek Inc., a California corporation (“STI”), and CJA Acquisition Corp., a California corporation and a wholly owned subsidiary of the Company (“Merger Sub”), providing for the merger of Merger Sub with and into STI (the “Merger”), with STI surviving the Merger as a wholly-owned subsidiary of the Company. The Merger was accounted for as a recapitalization of the Company with STI being deemed the accounting acquirer. Overview of Business Solis Tek Inc. is focused on the research, design, development and manufacturing of advanced, energy efficient indoor horticulture lighting and ancillary equipment. Our vision is to apply the latest advances in high efficiency lighting and controls technology as well as effective manufacturing techniques to deliver highly differentiated products with clear benefits at competitive prices to the greenhouse and indoor horticulture markets.

Summary of Significant Accounti

Summary of Significant Accounting Policies	3 Months Ended
	Mar. 31, 2017
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries Solis Tek East Corporation (“STE”), an entity incorporated under the laws of the State of New Jersey and GrowPro Solutions, Inc. (“GrowPro”), and entity incorporated under the laws of the State of California. Intercompany transactions and balances have been eliminated in consolidation. 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. Options to acquire 3,000,000 shares of common stock have been excluded from the calculation of weighted average common shares outstanding at March 31, 2017 as their effect would have been anti-dilutive. 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. Revenue Recognition The Company recognizes revenue upon shipment of the Company’s 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 Company’s products primarily is transferred to the customer once the product is shipped from the Company’s warehouses. 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 all of the relevant criteria for revenue recognition are satisfied are recorded as customer deposits. 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. However, the Company does not maintain a warranty reserve as the Company is able to chargeback its vendors for all warranty claims. As of March 31, 2017 and December 31, 2016, the Company recorded a reserve for returned product in the amount of $45,410 and $45,410, respectively, which reduced the accounts receivable balances as of those periods. 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 Company’s operating results. State and federal government laws could have a material adverse impact on the Company’s future revenues and results of operations. The Company’s 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 three months ended March 31, 2017 and 2016, its ballasts, lamps and reflectors, which comprised the vast majority of the Company’s 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 12% and 11% of the Company’s revenue for the three months ended March 31, 2017 and 2016, respectively. Shipments to customers outside the United States comprised 0.3% and 0.3% for the three months ended March 31, 2017 and 2016, respectively. As of March 31, 2017, one customer accounted for 12% of the Company’s trade accounts receivable balance and a s of December 31, 2016, a different customer accounted for 13% of the Company’s trade accounts receivable balance. Recently Issued Accounting Pronouncements 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 Company’s 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 Company’s 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 Company’s present or future consolidated financial statements.

Property and Equipment

Property and Equipment	3 Months Ended
	Mar. 31, 2017
Property, Plant and Equipment [Abstract]
Property and Equipment	NOTE 3 - PROPERTY AND EQUIPMENT Property and equipment consists of the following at March 31, 2017 and December 31, 2016: March 31, 2017 December 31, 2016 Machinery and equipment $ 234,706 $ 231,506 Computer equipment 12,448 12,448 Furniture and fixtures 97,451 97,451 Leasehold improvements 7,000 7,000 351,605 348,405 Less: accumulated depreciation and amortization (161,214 ) (143,469 ) Property and equipment, net $ 190,391 $ 204,936 Depreciation and amortization expense for the three months ended March 31, 2017 and 2016 was $17,745 and $17,515, respectively. Property and equipment include assets acquired under capital leases of $64,632 and $64,632 at March 31, 2017 and December 31, 2016, respectively.

Related Party Transactions

Related Party Transactions	3 Months Ended
	Mar. 31, 2017
Related Party Transactions [Abstract]
Related Party Transactions	NOTE 4 - RELATED PARTY TRANSACTIONS Supplier A family member of an officer/shareholder owns a minority interest in a company in China, which is the sole supplier of ballasts to the Company. Purchases from the related party for the three months ended March 31, 2017 and 2016 totaled approximately $848,000 and $902,000, respectively. The Company believes purchase prices from the related party approximate what the Company would have to pay from an independent third party vendor. At March 31, 2017 and December 31, 2016, the Company owed the related party $422,526 and $1,083,764, respectively. Amounts Due to Related Parties As of March 31, 2017 and December 31, 2016, the Company owed related parties $137,508 and $134,086, respectively. Included in the balances were short-term loans from the two officers/shareholders to the Company totaling $3,297 as of March 31, 2017 and December 31, 2016, respectively. The balances are payable on demand, noninterest bearing and are unsecured. The balances also included interest owed on the notes payable to related parties, which totaled to $81,892 and $56,590 at March 31, 2017 and December 31, 2016, respectively. Also included is $52,319 and $62,319 of unpaid compensation, which was owed to the officers/shareholders at March 31, 2017 and December 31, 2016, respectively.

Notes Payable to Related Partie

Notes Payable to Related Parties	3 Months Ended
	Mar. 31, 2017
Debt Disclosure [Abstract]
Notes Payable to Related Parties	NOTE 5 – NOTES PAYABLE TO RELATED PARTIES Notes payable to related parties consists of the following at March 31, 2017 and December 31, 2016: March 31, 2017 December 31, 2016 Notes payable to officers/shareholders (a) $ 195,000 $ 195,000 Notes payable to officers/shareholders (b) 600,000 600,000 Notes payable to related parties (c) 300,000 - Notes payable to related parties (d) 50,000 70,000 1,145,000 865,000 Less: current portion (545,000 ) (265,000 ) Non-current portion $ 600,000 $ 600,000 a. On July 1, 2012, the Company entered into unsecured notes payable agreements with two of its officers/shareholders. The maximum borrowings allowed under each individual note are $200,000. Through December 31, 2013, each note bore interest at 20% per annum. Beginning on January 1, 2014, the interest rate on the notes was reduced to 8% per annum. The notes are due 30 days after demand. Amounts owed on the combined note balances were $195,000 at March 31, 2017 and December 31, 2016, respectively. b. In May 2016, the Company entered into two separate notes payable agreements with the aforementioned two officers/shareholders. Under each of the agreements, the Company borrowed $300,000 from each of the officers/shareholders. The notes accrue interest at 8% per annum, are unsecured and are due on or before May 31, 2018. A total of $600,000 was due on the combined notes at March 31, 2017, and December 31, 2016. c. In February 2017, the Company executed two separate promissory notes and borrowed $300,000 from the relatives of one of the directors of the Company. The notes are unsecured, payable on demand and carry an interest of 14% per annum. A total of $300,000 was due on the combined notes at March 31, 2017. d. The Company entered into note agreements with the parents of one of the Company’s officer/shareholders. The loans accrues interest at 10% per annum, are unsecured and were due on or before December 31, 2016. A total of $50,000 and $70,000 was owed on the loans as of March 31, 2017 and December 31, 2016, respectively. Interest expense on the notes to related parties for the three months ended March 31, 2017 and 2016 was $23,622 and $4,378, respectively. Accrued interest included in Amounts due to related parties at March 31, 2017 and December 31, 2016 was $70,012 and $68,471, respectively.

Loans Payable

Loans Payable	3 Months Ended
	Mar. 31, 2017
Debt Disclosure [Abstract]
Loans Payable	NOTE 6 – LOANS PAYABLE Loans payable consist of the following at March 31, 2017 and December 31, 2016: March 31, 2017 December 31, 2016 Automobile loans (a) 32,181 34,220 Less: current portion (8,161 ) (8,262 ) Non-current portion $ 24,020 $ 25,958 In 2015, the Company entered into two loan agreements to purchase automobiles. The combined principal amount of the loans was $44,093 and they mature by November 2021. The loans require a combined monthly payment of principal and interest of $747. A total of $32,181 and $34,220 was owed on the loans as of March 31, 2017 and December 31, 2016, respectively.

Shareholders' Equity

Shareholders' Equity	3 Months Ended
	Mar. 31, 2017
Equity [Abstract]
Shareholders' Equity	NOTE 7 – SHAREHOLDERS’ EQUITY Agreement with Chief Executive Officer On January 6, 2017, the company extended an offer to Dennis G. Forchic to become CEO. Mr. Forchic accepted the offer and contracts were executed on March 27, 2017. As part of the Employment Agreement, the Company issued a total of 5,411,765 shares valued at $2,760,000, the purchase of an additional 784,314 shares valued at $400,000 for a consideration of $100,000. The fair value of the shares on the date of grant over consideration received was $3,060,000, which was recorded as stock compensation expense. In addition Mr. Forchic was granted an option to purchase 3,000,000 shares at $0.60 per share, with 33.3% of these shares vesting on the one year anniversary of the date of grant and the remainder vesting in equal installments at the end of each month over the next two years. The options were valued at $835,767 using a Black Scholes options pricing model and will be amortized as an expense over the vesting period. The amount amortized as stock based compensation during the three months ended March 31, 2017 was $65,154. The fair value of the options of $835,767 was based on a probability effected Black-Scholes option pricing model with a stock price of $0.51, volatility of 198.3% and risk-free rates of 0.83% - 1.03%. As of March 31, 2017, there was $770,613 of unvested stock compensation that will amortized over the next two years. Other issuances In February 2017, the Company entered into a Consulting Agreement with a third party (“Consultant”) for providing numerous services including but not limited to business development, sales promotion, introduction to new business opportunities, strategic analysis, and, sales and marketing activities. As part of the Agreement, the Company issued 300,000 shares to the Consultant on February 1, 2017 valued at $255,000. In addition, the consultant is entitled to receive an additional 600,000 shares that vest over the next 150 days from the initial issuance. As of March 31, 2017, 200,000 of these shares with a fair value of $258,000 had been earned (and yet been issued). As such, the Company recorded the aggregate fair value of these shares of $513,000 as compensation expense at March 31, 2017. Shares issued for cash In March, 2017, the Board of Directors of the Company authorized a Private Placement Offering per Reg. D of up to $1,650,000 in shares of common stock to accredited investors providing for stock to be issued at $.80 per share. For the three months ended march 31, 2017, the Company issued 375,000 shares for a total of $300,000. Technology License Agreement The Company entered into a Technology License Agreement with a third party vendor for consulting services. Under the agreement, the Company will pay the vendor a minimum consulting amount of $100,000 per year, plus a royalty of 7% of all net sales of the vendor’s products above $1,428,571 per calendar year. For each of the three months ended March 31, 2017 and 2016, $25,000 was recorded as research and development expense under the agreement on the consolidated Statements of Operations related to the minimum annual fee. .A total of $14,685 of royalty fees were owed under the amended agreement for the three months ended March 31, 2017 and were recorded in cost of goods sold on the consolidated Statements of Operations. No royalty fees were owed under the agreement for the three months ended March 31, 2016. A total of $180,238 and $165,553 was owed under the amended agreement at March 31, 2017 and December 31, 2016, respectively.

Subsequent Events

Subsequent Events	3 Months Ended
	Mar. 31, 2017
Subsequent Events [Abstract]
Subsequent Events	NOTE 8 – SUBSEQUENT EVENTS In April 2017, the Company entered into a strategic communication counsel agreement (“Agreement”) with a third party to create a strategic, corporate communication program to support sales and branding efforts, as well as help the Company communicate its broader vision to the marketplace. The Agreement is for a period of twelve months with a cash compensation of $6,500 a month from April 2017 to June 2017, and $12,500 a month thereafter and stock compensation of 187,000 shares of the Company’s common stock, currently valued at $231,880 which will be recognized as an expense as the shares are issued.

Summary of Significant Accoun16

Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2017
Accounting Policies [Abstract]
Basis of Consolidation	Basis of Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries Solis Tek East Corporation (“STE”), an entity incorporated under the laws of the State of New Jersey and GrowPro Solutions, Inc. (“GrowPro”), and entity incorporated under the laws of the State of California. Intercompany transactions and balances have been eliminated in consolidation.
Income (Loss) Per Share Calculations	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. Options to acquire 3,000,000 shares of common stock have been excluded from the calculation of weighted average common shares outstanding at March 31, 2017 as their effect would have been anti-dilutive.
Use of Estimates	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.
Revenue Recognition	Revenue Recognition The Company recognizes revenue upon shipment of the Company’s 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 Company’s products primarily is transferred to the customer once the product is shipped from the Company’s warehouses. 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 all of the relevant criteria for revenue recognition are satisfied are recorded as customer deposits. 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. However, the Company does not maintain a warranty reserve as the Company is able to chargeback its vendors for all warranty claims. As of March 31, 2017 and December 31, 2016, the Company recorded a reserve for returned product in the amount of $45,410 and $45,410, respectively, which reduced the accounts receivable balances as of those periods.
Concentration Risks	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 Company’s operating results. State and federal government laws could have a material adverse impact on the Company’s future revenues and results of operations. The Company’s 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 three months ended March 31, 2017 and 2016, its ballasts, lamps and reflectors, which comprised the vast majority of the Company’s 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 12% and 11% of the Company’s revenue for the three months ended March 31, 2017 and 2016, respectively. Shipments to customers outside the United States comprised 0.3% and 0.3% for the three months ended March 31, 2017 and 2016, respectively. As of March 31, 2017, one customer accounted for 12% of the Company’s trade accounts receivable balance and a s of December 31, 2016, a different customer accounted for 13% of the Company’s trade accounts receivable balance.
Recently Issued Accounting Pronouncements	Recently Issued Accounting Pronouncements 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 Company’s 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 Company’s 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 Company’s present or future consolidated financial statements.

Property and Equipment (Tables)

Property and Equipment (Tables)	3 Months Ended
	Mar. 31, 2017
Property, Plant and Equipment [Abstract]
Schedule of Property and Equipment	Property and equipment consists of the following at March 31, 2017 and December 31, 2016: March 31, 2017 December 31, 2016 Machinery and equipment $ 234,706 $ 231,506 Computer equipment 12,448 12,448 Furniture and fixtures 97,451 97,451 Leasehold improvements 7,000 7,000 351,605 348,405 Less: accumulated depreciation and amortization (161,214 ) (143,469 ) Property and equipment, net $ 190,391 $ 204,936

Notes Payable to Related Part18

Notes Payable to Related Parties (Tables)	3 Months Ended
	Mar. 31, 2017
Debt Disclosure [Abstract]
Schedule of Note Payable to Related Parties	Notes payable to related parties consists of the following at March 31, 2017 and December 31, 2016: March 31, 2017 December 31, 2016 Notes payable to officers/shareholders (a) $ 195,000 $ 195,000 Notes payable to officers/shareholders (b) 600,000 600,000 Notes payable to related parties (c) 300,000 - Notes payable to related parties (d) 50,000 70,000 1,145,000 865,000 Less: current portion (545,000 ) (265,000 ) Non-current portion $ 600,000 $ 600,000 a. On July 1, 2012, the Company entered into unsecured notes payable agreements with two of its officers/shareholders. The maximum borrowings allowed under each individual note are $200,000. Through December 31, 2013, each note bore interest at 20% per annum. Beginning on January 1, 2014, the interest rate on the notes was reduced to 8% per annum. The notes are due 30 days after demand. Amounts owed on the combined note balances were $195,000 at March 31, 2017 and December 31, 2016, respectively. b. In May 2016, the Company entered into two separate notes payable agreements with the aforementioned two officers/shareholders. Under each of the agreements, the Company borrowed $300,000 from each of the officers/shareholders. The notes accrue interest at 8% per annum, are unsecured and are due on or before May 31, 2018. A total of $600,000 was due on the combined notes at March 31, 2017, and December 31, 2016. c. In February 2017, the Company executed two separate promissory notes and borrowed $300,000 from the relatives of one of the directors of the Company. The notes are unsecured, payable on demand and carry an interest of 14% per annum. A total of $300,000 was due on the combined notes at March 31, 2017. d. The Company entered into note agreements with the parents of one of the Company’s officer/shareholders. The loans accrues interest at 10% per annum, are unsecured and were due on or before December 31, 2016. A total of $50,000 and $70,000 was owed on the loans as of March 31, 2017 and December 31, 2016, respectively.

Loans Payable (Tables)

Loans Payable (Tables)	3 Months Ended
	Mar. 31, 2017
Debt Disclosure [Abstract]
Schedule of Loans Payable	Loans payable consist of the following at March 31, 2017 and December 31, 2016: March 31, 2017 December 31, 2016 Automobile loans (a) 32,181 34,220 Less: current portion (8,161 ) (8,262 ) Non-current portion $ 24,020 $ 25,958

Summary of Significant Accoun20

Summary of Significant Accounting Policies (Details Narrative) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Anti-dilutive shares excluded from calculation of weighted average common shares	$ 3,000,000
Reserve of returned products	$ 45,410		$ 45,410
United States [Member]
Concentration risks percentage	0.30%	0.30%
Customers One [Member] | Sales Revenue, Net [Member]
Concentration risks percentage	12.00%	11.00%
Customers One [Member] | Accounts Receivable [Member]
Concentration risks percentage	12.00%
Different Customer [Member] | Accounts Receivable [Member]
Concentration risks percentage			13.00%

Property and Equipment (Details

Property and Equipment (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Property, Plant and Equipment [Abstract]
Depreciation and amortization expense	$ 17,745	$ 17,515
Property and equipment include assets acquired under capital leases	$ 64,632		$ 64,632

Property and Equipment - Schedu

Property and Equipment - Schedule of Property and Equipment (Details) - USD ($)	Mar. 31, 2017	Dec. 31, 2016
Property and equipment, gross	$ 351,605	$ 348,405
Less: accumulated depreciation and amortization	(161,214)	(143,469)
Property and equipment, net	190,391	204,936
Machinery and Equipment [Member]
Property and equipment, gross	234,706	231,506
Computer Equipment [Member]
Property and equipment, gross	12,448	12,448
Furniture and Fixtures [Member]
Property and equipment, gross	97,451	97,451
Leasehold Improvements [Member]
Property and equipment, gross	$ 7,000	$ 7,000

Related Party Transactions (Det

Related Party Transactions (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Related Party Transactions [Abstract]
Purchases from related party	$ 848,000	$ 902,000
Due from related party	422,526		$ 1,083,764
Due to shareholders	137,508		134,086
Short term loan	3,297		3,297
Notes payable to related parties	81,892		56,590
Unpaid compensation	$ 52,319		$ 62,319

Notes Payable to Related Part24

Notes Payable to Related Parties (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Debt Disclosure [Abstract]
Interest expense on notes to related parties	$ 3,422	$ 4,378
Accrued interest	$ 70,012		$ 68,471

Notes Payable to Related Part25

Notes Payable to Related Parties - Schedule of Note Payable to Related Parties (Details) - USD ($)		Mar. 31, 2017	Dec. 31, 2016
Note payable, net		$ 1,145,000	$ 865,000
Less: current portion		(545,000)	(265,000)
Non-current portion		600,000	600,000
Notes Payable to Officers/Shareholders [Member]
Note payable, net	[1]	195,000	195,000
Notes Payable to Officers/Shareholders 1 [Member]
Note payable, net	[2]	600,000	600,000
Notes Payable to Related Parties [Member]
Note payable, net	[3]	300,000
Notes Payable to Related Parties 1 [Member]
Note payable, net	[4]	$ 50,000	$ 70,000
[1]	On July 1, 2012, the Company entered into unsecured notes payable agreements with two of its officers/shareholders. The maximum borrowings allowed under each individual note are $200,000. Through December 31, 2013, each note bore interest at 20% per annum. Beginning on January 1, 2014, the interest rate on the notes was reduced to 8% per annum. The notes are due 30 days after demand. Amounts owed on the combined note balances were $195,000 at March 31, 2017 and December 31, 2016, respectively.
[2]	In May 2016, the Company entered into two separate notes payable agreements with the aforementioned two officers/shareholders. Under each of the agreements, the Company borrowed $300,000 from each of the officers/shareholders. The notes accrue interest at 8% per annum, are unsecured and are due on or before May 31, 2018. A total of $600,000 was due on the combined notes at March 31, 2017, and December 31, 2016.
[3]	In February 2017, the Company executed two separate promissory notes and borrowed $300,000 from the relatives of one of the directors of the Company. The notes are unsecured, payable on demand and carry an interest of 14% per annum. A total of $300,000 was due on the combined notes at March 31, 2017.
[4]	The Company entered into note agreements with the parents of one of the Company's officer/shareholders. The loans accrues interest at 10% per annum, are unsecured and were due on or before December 31, 2016. A total of $50,000 and $70,000 was owed on the loans as of March 31, 2017 and December 31, 2016, respectively.

Notes Payable to Related Part26

Notes Payable to Related Parties - Schedule of Note Payable to Related Parties (Details) (Parenthetical) - USD ($)	1 Months Ended	3 Months Ended
	May 31, 2016	Mar. 31, 2017	Mar. 31, 2016	Feb. 28, 2017	Dec. 31, 2016	Jan. 02, 2014	Dec. 31, 2013	Jul. 01, 2012
Note payable		$ 1,145,000			$ 865,000
Interest rate on notes						8.00%	20.00%
Purchases from related party		848,000	$ 902,000
Note payable, current		81,892			56,590
Officers and Shareholders [Member]
Note payable		195,000		$ 300,000	195,000			$ 200,000
Interest rate on notes				14.00%
Percentage of accrued interest			10.00%
Note payable, current		600,000			600,000
Loan amount owed		50,000			$ 70,000
Officers [Member]
Purchases from related party	$ 300,000
Percentage of accrued interest	8.00%
Debt instruments maturity	May 31, 2018
Shareholders [Member]
Purchases from related party	$ 300,000
Percentage of accrued interest	8.00%
Debt instruments maturity	May 31, 2018
Officers and Shareholders 1 [Member]
Note payable, current		$ 300,000

Loans Payable (Details Narrativ

Loans Payable (Details Narrative) - USD ($)	12 Months Ended
	Dec. 31, 2015	Mar. 31, 2017	Dec. 31, 2016
Due to related parties		$ 422,526	$ 1,083,764
Loan Agreement to Purchase an Automobile [Member]
Loan principal amount	$ 44,093
Line of credit expiration date	Nov. 30, 2021
Debt repayment	$ 747
Due to related parties		$ 32,181	$ 34,220

Loans Payable - Schedule of Loa

Loans Payable - Schedule of Loans Payable (Details) - USD ($)	Mar. 31, 2017	Dec. 31, 2016
Loan Payable	$ 32,181	$ 34,220
Less: current portion	(8,161)	(8,262)
Non-current portion	24,020	25,958
Automobile Loans [Member]
Loan Payable	$ 32,181	$ 34,220

Stockholders' Equity (Details N

Stockholders' Equity (Details Narrative) - USD ($)	1 Months Ended	3 Months Ended
	Feb. 28, 2017	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Number of shares issued		375,000
Number of shares issued value		$ 300,000
Purchase of an additional shares value		3,185,000
Consideration received		300,000
Fair Value of vested options		65,154
Amortized stock based compensation		$ 3,763,154	$ 36,000
Stock price		$ 0.51
Volatility rate		198.30%
Unvested stock compensation		$ 770,613
Research and development expense		$ 82,770	57,000
Consultant [Member]
Number of shares issued	300,000
Number of shares issued value	$ 255,000
Purchase of an additional shares	600,000
Option granted		200,000
Fair value of shares on date of grants		$ 258,000
Amortized stock based compensation		513,000
Accredited Investors [Member] | Private Placement [Member]
Number of shares issued value		$ 1,650,000
Stock issued per share		$ .80
Minimum [Member]
Risk-free interest rate		0.83%
Maximum [Member]
Risk-free interest rate		1.03%
Mr. Forchic [Member]
Option granted		3,000,000
Stock option per share		$ 0.60
Stock option shares vesting percentage		33.30%
Fair value of shares on date of grants		$ 835,767
Employment Agreement [Member]
Number of shares issued		5,411,765
Number of shares issued value		$ 2,760,000
Purchase of an additional shares		784,314
Purchase of an additional shares value		$ 400,000
Purchase consideration		100,000
Consideration received		3,060,000
Technology License Agreement [Member]
Research and development expense		25,000	25,000
Technology License Agreement [Member] | Third Party Vendor [Member]
Minimum consulting amount		$ 100,000
Royalty percentage of net sales		7.00%
Royalty expenses		$ 1,428,571
Amended Agreement [Member]
Royalty fees		14,685
Total royalty owed under agreement		$ 180,238		$ 165,553

Subsequent Events (Details Narr

Subsequent Events (Details Narrative) - Subsequent Event [Member] - Agreement [Member]	1 Months Ended
	Apr. 30, 2017USD ($)shares
Cash compensation	$ 12,500
Number of stock compensation issued during period, shares | shares	187,000
Number of stock compensation issued during period	$ 231,880
April 2017 to June 2017 [Member]
Cash compensation	$ 6,500