XG Sciences 10-K 31 Mar 17 2016 FY Annual report Financial data

Document and Entity Information

Document and Entity Information - USD ($)	12 Months Ended
	Dec. 31, 2016	Mar. 31, 2017	Jun. 30, 2016
Document And Entity Information
Entity Registrant Name	XG SCIENCES INC
Entity Central Index Key	1,435,375
Document Type	10-K
Document Period End Date	Dec. 31, 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 Public Float			$ 7,462,352
Entity Common Stock, Shares Outstanding		1,981,650
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2,016

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($)	Dec. 31, 2016	Dec. 31, 2015
CURRENT ASSETS
Cash	$ 1,785,343	$ 1,060,224
Accounts receivable, less allowance for doubtful accounts of $10,000 in 2016 and 2015, respectively	99,078	54,413
Inventories	205,973	229,034
Incentive refunds receivable	165,635	86,000
Other current assets	174,495	108,096
Total current assets	2,430,524	1,537,767
PROPERTY, PLANT AND EQUIPMENT, NET	2,886,421	3,753,248
RESTRICTED CASH FOR LETTER OF CREDIT	195,499	195,206
INTANGIBLE ASSETS, NET	478,019	411,789
TOTAL ASSETS	5,990,463	5,898,010
CURRENT LIABILITIES
Accounts payable and other current liabilities	964,757	704,177
Short-term promissory notes		497,324
Deferred revenue	6,428
Current portion of capital lease obligations	268,667	178,487
Total current liabilities	1,239,852	1,379,988
LONG-TERM LIABILITIES
Long-term portion of capital lease obligations	115,106	354,483
Long term debt	1,862,120
Derivative liability - warrants	7,900,249	8,235,163
Total long-term liabilities	9,877,475	8,589,646
TOTAL LIABILITIES	11,117,327	9,969,634
STOCKHOLDERS' DEFICIT
Common stock, no par value, 25,000,000 shares authorized, 1,885,175 and 836,544 shares issued and outstanding at December 31, 2016 and December 31, 2015, respectively	15,647,839	8,565,225
Additional paid-in capital	6,490,230	5,791,074
Accumulated deficit	(48,899,530)	(43,371,368)
Total stockholders' deficit	(5,126,864)	(4,071,624)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	5,990,463	5,898,010
Series A Convertible Preferred Stock [Member]
STOCKHOLDERS' DEFICIT
Preferred stock, value	21,634,597	21,291,912
Preferred stock (B) [Member]
STOCKHOLDERS' DEFICIT
Preferred stock, value		$ 3,651,533

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)	Dec. 31, 2016	Dec. 31, 2015
Allowance for doubtful accounts	$ 10,000	$ 10,000
Common stock, no par value (in dollars per share)	$ 0	$ 0
Common stock, authorized	25,000,000	25,000,000
Common stock, issued	1,885,175	836,544
Common stock, outstanding	1,885,175	836,544
Series A Convertible Preferred Stock [Member]
Preferred stock, authorized	3,000,000	3,000,000
Preferred stock, issued	1,829,256	1,800,696
Preferred stock, outstanding	1,829,256	1,800,696
Preferred stock, liquidation value	$ 21,951,072	$ 21,608,352
Preferred stock (B) [Member]
Preferred stock, authorized	1,500,000	1,500,000
Preferred stock, issued	0	269,987
Preferred stock, outstanding	0	269,987
Preferred stock, liquidation value	$ 0	$ 4,319,792

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
REVENUES
Product sales	$ 356,730	$ 164,153
Grants	279,760	378,439
Licensing revenue	100,000	100,000
Total revenues	736,490	642,592
COST OF GOODS SOLD
Direct costs	172,394	97,590
Unallocated manufacturing expenses	1,414,268	1,750,124
Total cost of goods sold	1,586,662	1,847,714
GROSS LOSS	(850,172)	(1,205,122)
OPERATING EXPENSES
Research and development	1,124,165	1,485,283
Sales, general and administrative	3,548,605	4,119,329
Total operating expenses	4,672,770	5,604,612
OPERATING LOSS	(5,522,942)	(6,809,734)
OTHER INCOME (EXPENSE)
Incentive refund and interest income	80,259	94,507
Interest expense	(298,832)	(7,387,256)
Gain (loss) from change in fair value of derivative liability - warrants	283,496	(2,513,476)
Loss on disposal of equipment and intangible assets	(70,143)	(66,686)
Total other expense	(5,220)	(9,872,911)
NET LOSS	(5,528,162)	(16,682,645)
Deemed dividend on Series A convertible preferred stock		(2,214,856)
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS	$ (5,528,162)	$ (18,897,501)
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING - Basic and diluted (in shares)	1,112,647	836,225
NET LOSS PER SHARE - Basic and diluted (in dollars per share)	$ (4.97)	$ (22.60)

CONSOLIDATED STATEMENT OF CHANG

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT - USD ($)	Preferred stock (A) [Member]	Preferred stock (B) [Member]	Common stock [Member]	Additional paid-in capital [Member]	Accumulated Deficit [Member]	Total
Balances at beginning at Dec. 31, 2014	$ 3,475,686		$ 8,551,225	$ 5,192,295	$ (26,688,723)	$ (9,469,517)
Balances at beginning (in shares) at Dec. 31, 2014	316,010		835,144
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock issued for cash		$ 4,319,792	$ 14,000			4,333,792
Stock issued for cash (in shares)		269,987	1,400
Proceeds allocated to warrants		$ (668,259)				(668,259)
Convertible notes converted to preferred stock - Series A	$ 17,473,540					17,473,540
Convertible notes converted to preferred stock - Series A (in shares)	1,456,126
Preferred stock issued - beneficial conversion feature	$ (2,214,856)			2,214,856
Preferred stock issued - deemed dividend from beneficial conversion feature	2,214,856			(2,214,856)
Warrants issued with Bridge Financings
Preferred stock issued to pay capital lease obligations	$ 342,686					342,686
Preferred stock issued to pay capital lease obligations (in shares)	28,560
Employee stock option expense				598,779		598,779
Net loss					(16,682,645)	(16,682,645)
Balances at ending at Dec. 31, 2015	$ 21,291,912	$ 3,651,533	$ 8,565,225	5,791,074	(43,371,368)	(4,071,624)
Balances at ending (in shares) at Dec. 31, 2015	1,800,696	269,987	836,544
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock issued for cash			$ 4,069,255			4,069,255
Stock issued for cash (in shares)			508,657
Stock issuance fees and expenses			$ (638,174)			(638,174)
Series B stock exchanged for common stock		$ (3,651,533)	$ 3,651,533
Series B stock exchanged for common stock (in shares)		(269,987)	539,974
Reclassification of Derivative Liability Warrants to Equity				51,418		51,418
Warrants issued with Bridge Financings				24,060		24,060
Warrants issued with Dow Financing				143,146		143,146
Preferred stock issued to pay capital lease obligations	$ 342,685					342,685
Preferred stock issued to pay capital lease obligations (in shares)	28,560
Employee stock option expense				480,532		480,532
Net loss					(5,528,162)	(5,528,162)
Balances at ending at Dec. 31, 2016	$ 21,634,597		$ 15,647,839	$ 6,490,230	$ (48,899,530)	$ (5,126,864)
Balances at ending (in shares) at Dec. 31, 2016	1,829,256		1,885,175

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$ (5,528,162)	$ (16,682,645)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	908,896	964,382
Amortization of intangible assets	38,336	30,261
Loss on disposal of equipment and intangible assets	70,143	66,686
Provision for bad debts		6,527
Stock-based compensation expense	480,532	598,779
Non-cash interest expense	250,471	7,271,151
Deferred compensation - phantom stock		(254,400)
Loss (gain) from change in fair value of derivative liability - warrants	(283,496)	2,513,476
(Increase) Decrease in:
Accounts receivable	(44,665)	(35,957)
Inventories	23,061	(96,575)
Incentive refund receivable	(79,635)	92,430
Other current assets	(66,402)	10,020
Other assets	(293)	(4,290)
Increase (Decrease) in:
Accounts payable and other liabilities	303,112	(90,552)
Accrued compensation	(42,532)	(24,810)
Deferred revenue	6,428
NET CASH USED IN OPERATING ACTIVITIES	(3,964,206)	(5,635,517)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment	(93,002)	(131,842)
Purchases of intangible assets	(123,775)	(114,917)
NET CASH USED IN INVESTING ACTIVITIES	(216,777)	(246,759)
CASH FLOWS FROM FINANCING ACTIVITIES
Advances (repayments) on short-term notes, net	(550,000)	550,000
Advances (repayments) of capital lease obligations	25,021	(30,158)
Proceeds from long-term loan	2,000,000
Proceeds from issuance of preferred stock		4,319,792
Proceeds from issuance of common stock	4,069,255	14,000
Common stock issuance fees and expenses	(638,174)
NET CASH PROVIDED BY FINANCING ACTIVITIES	4,906,102	4,853,634
NET INCREASE (DECREASE) IN CASH	725,119	(1,028,642)
CASH AT BEGINNING OF PERIOD	1,060,224	2,088,866
CASH AT END OF PERIOD	1,785,343	1,060,224
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest	48,360	116,105
Value of preferred stock issued for AAOF capital lease obligations	342,686	342,686
Property and equipment additions under capital leases	38,998
Reclassification of derivative liability warrants to equity	51,418
Warrants issued with bridge financings	24,060
Warrants issued with Dow financing	143,146
Conversion of Series B stock to common stock	3,651,533
Conversion of convertible notes to preferred stock - Series A		$ 17,473,540

NATURE OF BUSINESS AND BASIS OF

NATURE OF BUSINESS AND BASIS OF PRESENTATION	12 Months Ended
	Dec. 31, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
NATURE OF BUSINESS AND BASIS OF PRESENTATION	NOTE 1 — NATURE OF BUSINESS AND BASIS OF PRESENTATION XG Sciences, Inc., a Michigan company located in Lansing, Michigan and its subsidiary XGS IP, LLC (“we”, “us”, “our”, or the “Company”) manufactures graphene nanoplatelets made from graphite, using a proprietary manufacturing process to split natural flakes of crystalline graphite into very small and thin particles. These nanoplatelets are then used in products like battery electrodes, thin sheets, films, inks and coatings that we sell to other companies. We also sell our xGnP ® Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). All normal adjustments considered necessary for a fair presentation have been included. The consolidated financial statements include the accounts of XG Sciences, Inc. and our wholly-owned subsidiary, XGS IP, LLC. We operate as one reportable segment. All intercompany accounts, transactions and profits have been eliminated in consolidation. Liquidity We have historically incurred losses from operations and we may continue to generate negative cash flows as we implement our business plan. Our consolidated financial statements are prepared using US GAAP as applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. As of December 31, 2016, we had cash on hand of $1,785,343 and at March 28, 2017 cash on hand of $1,138,157 and currently available funds of $3,000,000 under the Dow Facility, which we believe is sufficient to fund our operations through October 2017. We believe that we will need an additional approximately $1 million to sustain us for the next 12 months for which we have a commitment from a shareholder. Our financial projections show that we may need to raise an additional $15 million or more before we are capable of achieving sustainable cash flow from operations. We intend that the primary means for raising such funds will be through our IPO, the additional $3 million of currently available funds under the Dow Facility (see note 7), and up to an additional $5 million of proceeds from the Dow Facility after we have raised $10 million of additional equity capital in the period beginning on November 1, 2016. There can be no assurance that we will be able to raise additional equity capital in the IPO or in subsequent equity offerings or that the terms and conditions of any future financings will be workable or acceptable to us and our stockholders. In the event we are unable to fund our operations from existing cash on hand, operating cash flows, additional borrowings or raising equity capital, we may be forced to reduce our expenses, slow down our growth rate, or discontinue operations. Our consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern.

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	12 Months Ended
	Dec. 31, 2016
Accounting Policies [Abstract]
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Use of Estimates US GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, together with amounts disclosed in the related notes to the consolidated financial statements. Actual results and outcomes may differ from management’s estimates, judgments and assumptions. Significant estimates, judgments and assumptions used in these consolidated financial statements include, but are not limited to, those related to revenues, accounts receivable and related allowances, contingencies, useful lives and recovery of long-term assets, income taxes, and the fair values of stock-based compensation, warrants, and derivative financial instrument liabilities. These estimates, judgments, and assumptions are reviewed periodically and the effects of material revisions in estimates are reflected in the financial statements prospectively from the date of the change in estimate. Revenue Recognition We recognize revenues when (a) the price is fixed or determinable, (b) persuasive evidence of a sales arrangement exists, (c) the service is performed or delivery has occurred and (d) collectability of the resulting receivable is reasonably assured. We recognize product revenues when products are shipped to customers. At that time, product ownership and risk have transferred to the customer and we have no further obligations. We record product sales at net selling prices that are reflective of discounts and allowances. Shipping and handling costs are recorded as a component of direct costs, as are shipping and handling costs billed to customers. Revenue related to licensing agreements is recorded upon substantial performance of the terms of the licensing contract. In the case of licensing arrangements that involve up-front payments, revenue is recorded when management determines that the appropriate terms of the contract have been fulfilled. For example, this may occur when technology has been transferred via written documents or, if training is involved, whenever all contracted training has occurred. In the case of licenses where product delivery is also embedded in the deliverable, a portion of revenue would be recognized when products are delivered. In the case of licensing arrangements that involve ongoing royalties based on sales of products produced with our technology, royalty income is recorded when received or, in the case of minimum royalties due, in the period when due. Grant contract revenue is recognized over the life of the contracts as the services are performed. Amounts received in excess of revenues earned are recorded as deferred revenue. Cost of Products Sold We use a standard cost system to estimate the direct costs of products sold. Direct costs include estimates of raw material costs, packaging, freight charges net of those billed to customers, and an allocation for direct labor and manufacturing overhead. Because of the nature of our production processes, there is a substantial fixed manufacturing expense requirement that represents the ongoing cost of maintaining production facilities that are not directly related to products sold, so we use a “full capacity” allocation of overhead based on an estimate of what product costs would be if the manufacturing facilities were operating on a full-time basis and producing products at the designed capacity. This estimate involves estimating both the level of expenses as well as production amounts as if the manufacturing facility were operating on a continuous, three-shift, production basis. The remaining costs of operating the Company’s manufacturing facilities are recorded as Unallocated Manufacturing Expenses. Manufacturing expense includes the costs of operating our manufacturing facilities including personnel costs, rent, utilities, indirect supplies, depreciation, and related indirect expenses. Manufacturing expenses are expensed as incurred. Research and Development Research and development expenses include the compensation costs of research personnel, laboratory rent and utilities, depreciation of laboratory equipment, travel and laboratory supplies and are expensed as incurred. General and Administrative Expense General and administrative expenses include the compensation costs of personnel, rent, utilities, supplies, travel, depreciation of office equipment, and related expenses not included in other expense categories. General and administrative expenses also include non-cash compensation expenses related to the Company’s deferred compensation, management incentive bonus, and employee stock option programs. Sales and Marketing Expense Sales and marketing costs include compensation, travel, and business development expenses including free samples provided to customers. These costs are expensed as incurred. Product marketing allowances are recorded at the estimated out of pocket cost necessary to produce the product in the period the allowance is granted. Advertising costs are expensed at the time they are incurred and were not material for the years ended December 31, 2016 and 2015. Income Taxes It is our policy to provide for uncertain tax positions and the related interest and penalties based upon management’s assessment of whether a tax benefit is more likely than not to be sustained upon examination by tax authorities. To the extent that the probable tax outcome of these uncertain tax position changes, such changes in estimate will impact the income tax provision in the period in which such determination is made. At December 31, 2016, we believe we have appropriately accounted for any unrecognized tax benefits. We are not aware of any uncertain tax positions. To the extent we prevail in matters for which a liability for an unrecognized tax benefit is established or we are required to pay amounts in excess of the liability, our effective tax rate in a given financial statement period may be affected. We account for income taxes using an asset and liability approach. The difference between the financial statement and tax basis of assets and liabilities is determined annually. Deferred income tax assets and liabilities are computed for those differences that have future tax consequences using the currently enacted tax laws and rates that apply to the periods in which they are expected to affect taxable income. Income tax expense is the current tax payable or refundable for the period plus or minus the net change in the deferred tax assets and liabilities. The deferred tax effects of state and local income taxes are considered immaterial and have not been recorded. Valuation allowances are established, if necessary, to reduce deferred tax assets to the amount that is estimated to be realized. Because of the uncertainty related to future realization of deferred tax assets (see Note 14), we have established a valuation allowance equal to one hundred percent of the deferred tax assets. Net Income (Loss) Per Common Share We compute net income or (loss) per share in accordance with Financial Accounting Standards Board (“FASB”) Accountings Standards Codification (“ASC”) Topic 260: Earnings Per Share. Under the provisions of ASC 260, basic net income (loss) per share is computed by dividing the net income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted net loss per share is computed using the weighted average number of shares outstanding during the applicable period, plus the effect of potentially dilutive securities. Potentially dilutive securities consist of shares potentially issuable pursuant to stock options and warrants as well as shares that would result from full conversion of all outstanding convertible securities. These potentially dilutive securities were 3,594,582 and 2,857,839 as of December 31, 2016 and 2015 and are excluded from diluted net loss per share calculations because they are anti-dilutive. As a result, for the years ended December 31, 2016 and 2015, basic and diluted net loss per share was the same. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are stated at the amount management expects to collect from outstanding balances. Management provides for probable uncollectible amounts through a provision for bad debt expense and an adjustment to a valuation allowance based on their assessment of the current status of individual accounts. Balances that are still outstanding after management has used reasonable collection efforts are written off through a charge to the allowance account and a credit to accounts receivable. Statements of Cash Flows For the purposes of the statements of cash flows, we consider all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Fair Value of Financial Instruments and Concentrations of Credit Risk Financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of cash and accounts receivable. The Company places its cash with FDIC insured financial institutions. Although such balances may exceed the federally insured limits at certain times, in the opinion of management they are subject to minimal risk. The Company has established policies for extending credit to customers based upon factors including the customers’ credit worthiness, historical trends and other information. Nonetheless the collectability of accounts receivable is affected by regional economic conditions and other factors. Inventory Inventory consists of raw materials, work-in-process and finished goods, all of which are valued at standard cost, which approximates average cost. Property and Equipment Property and equipment are recorded at cost, net of accumulated depreciation and amortization. Property and equipment generally includes purchases of items with a cost greater than $3,000 and a useful life greater than one year. Depreciation and amortization are computed on the straight line basis over the estimated useful lives of the assets. Leasehold improvements are amortized over the shorter of the related lease terms or their estimated useful lives. We periodically review the estimated useful lives of property and equipment. Changes to the estimated useful lives are recorded prospectively from the date of the change. Upon retirement or sale, the cost of the assets disposed of and the related accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the statement of operations. Repairs and maintenance costs are expensed as incurred. Recoverability and Impairment of Long-Lived Assets We review our long-lived assets for recoverability if events or changes in circumstances indicate the assets may be impaired. This circumstance exists when the carrying amount of the asset exceeds the sum of the undiscounted cash flows expected to result from its use and eventual disposition. At December 31, 2016, we believe the carrying value of our long-lived assets is recoverable. Intangible Assets We have entered into a License Agreement with Michigan State University under which we have licensed certain intellectual property in the form of patents and patent applications and invention disclosures. We are responsible for managing the patent process and ongoing filings for this licensed intellectual property and for bearing the cost thereof. We capitalize all costs related to the acquisition and ongoing administration of this License Agreement and we amortize these costs over 15 years or the remaining life of the License Agreement, whichever is shorter. In addition to the costs of managing in-licensed intellectual property, we also file for patent protection for inventions and other intellectual property generated by our employees. All patents are evaluated for filing in international markets on a case-by-case basis, and are filed in the United States and in selected international markets as considered appropriate. All external legal and filing costs related to patent applications, patent filings, ongoing registrations, overseas filings, and legal opinions related thereto are capitalized as intangible assets at cost and amortized over a period of 15 years from the date incurred, or the remaining useful life of the associated patent, whichever is shorter. The cost of royalties or minimum payments specified under the license agreement for in-licensed technology is expensed as incurred. We have also out-licensed certain of our intellectual property to licensees under terms and conditions of license agreements that specify the intellectual property licensed, the territory, and the type of license. In exchange for these licenses, we have recorded revenues associated with the initial granting of the license and expect to receive royalties based on sales of products produced under these licenses. License revenues are recorded to reflect our performance of requirements under these license agreements. In addition, we record royalty revenues from licensees at the time they are earned. Our intangible assets are assessed for impairment on an annual basis. As part of this process, we take into account the cash flows which we have received from licensing certain of our intellectual property as well as our plans to continue licensing our intellectual property as part of our ongoing business model. Incentive Refund As of December 31, 2016 and 2015, we had $165,635 and $86,000 of incentive refunds due from the Michigan Economic Growth Authority under a five-year agreement signed on January 19, 2011. These incentive payments are awarded annually based on a pre-determined formula relating to the number of jobs created, average compensation, and total payroll and benefits for jobs created by XG Sciences in Michigan. These refunds are paid in cash during the year following the refund period. There is no requirement to have taxable income to receive these incentive payments. Stock-Based Compensation We recognize compensation expense in our statement of operations for all share-based option and stock awards, based on estimated grant-date fair values. We estimate the grant-date fair value of stock-based compensation awards using the Black-Scholes option valuation model. This model is affected by the estimated value of our common stock on the date of the grant as well as assumptions regarding a number of highly complex and subjective variables. These variables include the expected term of the option, the exercise price, expected risk-free rates of return, the expected volatility of our common stock, and expected dividend yield, each of which is more fully described below. The assumptions for the estimated value of our common stock, expected term and expected volatility are the assumptions that most significantly affect the grant date fair value. Estimated Value of our Common Stock:  Audit and Accounting Practice Aid Series: Valuation of Privately Held Company Equity Securities Issued as Compensation Expected Term Risk-free Interest Rate Expected Stock Price Volatility Dividend Yield The grant-date fair value of the award is recognized as expense over the requisite service period using the straight-line method. Fair Value Measurements FASB ASC 820: “Fair Value Measurements and Disclosures” defines fair value as the exchange price 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. ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value: Level 1 Level 2 Level 3 A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Our derivative liabilities are classified as Level 3 within the fair value hierarchy because they were valued using other unobservable inputs. The valuation technique used to measure fair value of the derivative liabilities is based on a lattice model with significant assumptions and inputs determined by the Company. A lattice model was used to estimate the fair value of the derivative liabilities because management believes it reflects all the assumptions that market participants would likely consider including early exercise of the warrants. The fair value of the derivative liabilities will be significantly influenced by the fair value of our common stock, stock price volatility and the risk-free interest components of the lattice technique. The following is a reconciliation of the beginning and ending balances for liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the years ended December 31, 2016 and 2015: 2016 2015 Balance at January 1 $ 8,235,163 $ 5,000,752 Warrants issued with private placement of Series B Preferred Stock — 660,378 Warrants issued with preferred stock sold under preemptive rights — 7,881 Warrants issued with bridge financing — 52,676 Warrants reclassified to equity (51,418 ) — (Gain) Loss recognized in earnings (283,496 ) 2,513,476 Balance at December 31 $ 7,900,249 $ 8,235,163 Derivative Financial Instruments We do not use derivative instruments to hedge exposures to cash flow, market or foreign currency risk. The terms of convertible preferred stock and convertible notes that we issue are reviewed to determine whether or not they contain embedded derivative instruments that are required by ASC 815: “Derivatives and Hedging” to be accounted for separately from the host contract, and recorded at fair value. In addition, freestanding warrants are also reviewed to determine if they achieve equity classification. Certain stock warrants that we have issued did not meet the conditions for equity classification and are classified as derivative instrument liabilities measured at fair value. The fair values of these derivative liabilities are revalued at each reporting date, with the change in fair value recognized in earnings. See Note 9 for additional information. Beneficial Conversion Feature of Preferred Stock Equity instruments that contain a Beneficial Conversion Feature (BCF) are recorded as a deemed dividend to the holders of the convertible equity instruments. The deemed dividend amount is recorded as an increase to additional paid-in capital. For the year ended December 31, 2015, we recorded a deemed dividend of $2,214,856 related to the adjustment of the conversion price of the Series A Preferred Stock from $12.00 to $6.40 per share. This resulted in a BCF due to the new conversion price being lower than the value of the underlying common stock. See Note 9 for additional information related to the BCF resulting from our Series A Preferred Stock. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update No. 2014-09, Revenue From Contracts With Customers In August 2014, FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern In April 2015, the FASB issued ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs On February 24, 2016, the FASB issued ASU No. 2016-02, Leases, requiring lessees to recognize a right-of-use asset and a lease liability on the balance sheet for all leases with the exception of short-term leases. For lessees, leases will continue to be classified as either operating or finance leases in the income statement. Lessor accounting is similar to the current model but updated to align with certain changes to the lessee model. Lessors will continue to classify leases as operating, direct financing or sales-type leases. The effective date of the new standard for public companies is for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Early adoption is permitted. The new standard must be adopted using a modified retrospective transition and requires application of the new guidance at the beginning of the earliest comparative period presented. We are currently evaluating the effect that the updated standard will have on our consolidated financial statements and related disclosures. On March 30, 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting, which simplifies various aspects related to the accounting and presentation of share-based payments. The amendments require entities to record all tax effects related to share-based payments at settlement or expiration through the income statement and the windfall tax benefit to be recorded when it arises, subject to normal valuation allowance considerations. All tax-related cash flows resulting from share-based payments are required to be reported as operating activities in the statement of cash flows. The updates relating to the income tax effects of the share-based payments including the cash flow presentation must be adopted either prospectively or retrospectively. Further, the amendments allow the entities to make an accounting policy election to either estimate forfeitures or recognize forfeitures as they occur. If an election is made, the change to recognize forfeitures as they occur must be adopted using a modified retrospective approach with a cumulative effect adjustment recorded to opening retained earnings. The effective date of the new standard for public companies is for fiscal years beginning after December 15, 2016 and interim periods within those fiscal years. Early adoption is permitted. We believe the adoption of this standard will have no material impact on our consolidated statements of financial position, results of operations or cash flows. In July 2015, the FASB issued ASU No. 2015-11, (“ASU 2015-11”), Inventory (Topic 330): Simplifying the Measurement of Inventory. ASU 2015-11 requires an entity to measure in scope inventory at the lower of cost and net realizable value. The amendment does not apply to inventory that is measured using last-in, first-out or the retail inventory method. For public entities, ASU 2015-11 is effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years, and is to be applied prospectively. We do not expect the adoption of this standard will have a material effect on our consolidated statements of financial position, results of operations, or cash flows. With the exception of the standards discussed above, we believe there have been no new accounting pronouncements effective or not yet effective that have significance, or potential significance, to our Consolidated Financial Statements. JOBS Act In April 2012, the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, was enacted. Section 107 of the JOBS Act provides that an “emerging growth company,” or EGC, can take advantage of the extended transition period for complying with new or revised accounting standards. Thus, an EGC can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have irrevocably elected not to avail ourselves of this extended transition period and, as a result, we will adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for other public companies. We are in the process of evaluating the benefits of relying on other exemptions and reduced reporting requirements under the JOBS Act. Subject to certain conditions, as an EGC, we intend to rely on certain of these exemptions, including exemptions from the requirement to provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act and from any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements, known as the auditor discussion and analysis. We will remain an EGC until the earlier of: the last day of the fiscal year in which we have total annual gross revenues of $1.0 billion or more; the last day of the fiscal year following the fifth anniversary of the date of the completion of our IPO; the date on which we have issued more than $1.0 billion in nonconvertible debt during the previous three years; or the date on which we are deemed to be a large accelerated filer under the rules of the SEC.

INVENTORY

INVENTORY	12 Months Ended
	Dec. 31, 2016
Inventory
INVENTORY	NOTE 3 — INVENTORY Inventory is carried at the lower of cost or market. Cost is determined using the first-in, first-out method for raw material and finished goods inventory. Market is based on current replacement cost for raw materials and net realizable value for finished goods . Raw materials include all components used in the production of our finished goods, which are our four major product lines, bulk materials, energy storage materials, thermal management materials and inks and coatings. The following amounts were included in inventory at the end of the period: Year Ended December 31 2016 2015 Raw materials $ 45,964 $ 46,660 Finished goods 160,009 182,374 Total $ 205,973 $ 229,034

PROPERTY, PLANT AND EQUIPMENT

PROPERTY, PLANT AND EQUIPMENT	12 Months Ended
	Dec. 31, 2016
Property, Plant and Equipment [Abstract]
PROPERTY, PLANT AND EQUIPMENT	NOTE 4 — PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment as of December 31 consist of the following: Depreciable 2016 2015 Plant and equipment not yet placed in service $ 49,200 $ 49,200 Leasehold improvements 5-10 399,060 399,060 Lab equipment 3-7 871,512 871,512 Production and other equipment 3-7 5,809,937 5,835,226 Software 3 39,144 39,144 7,168,853 7,194,142 Less accumulated depreciation and amortization (4,282,432 ) (3,440,894 ) Net property, plant and equipment $ 2,886,421 $ 3,753,248 Depreciation and amortization expense on property and equipment, including leased assets, for the years ended December 31, 2016 and 2015, was $908,895 and $964,382, respectively. These amounts are included as part of our statement of operations in Cost of Goods Sold, Research and Development, and General and Administrative Expenses - $756,029, $119,481, $33,385 and $783,153, $146,970, $34,259, respectively in 2016 and 2015. Property and equipment under capital leases included above consists of the following at December 31: 2016 2015 Lab equipment $ 73,202 $ 160,202 Production and other equipment 991,887 986,230 1,065,089 1,146,432 Less accumulated depreciation (386,314 ) (297,336 ) Net property, plant and equipment under capital leases $ 678,775 $ 849,096

INTANGIBLE ASSETS

INTANGIBLE ASSETS	12 Months Ended
	Dec. 31, 2016
Intangible Assets
INTANGIBLE ASSETS	NOTE 5 — INTANGIBLE ASSETS Intangible assets and related accumulated amortization as of December 31, 2016 and 2015 are as follows: Carrying Less Net Carrying Licenses $ 137,533 $ (75,140 ) $ 62,393 Patents 481,733 (69,526 ) 412,207 Trademarks, other intangibles 5,698 (2,279 ) 3,419 Balance, December 31, 2016 $ 624,964 $ (146,945 ) $ 478,019 Licenses $ 137,533 $ (65,522 ) $ 72,011 Patents 383,496 (47,524 ) 335,972 Trademarks, other intangibles 5,698 (1,892 ) 3,806 Balance, December 31, 2015 $ 526,727 $ (114,938 ) $ 411,789 Amortization expense of $38,337 and $30,261 was recorded for the years ended December 31, 2016 and 2015, respectively. Amortization expense for the next five years is estimated to be approximately $42,000 annually.

ACCOUNTS PAYABLE AND OTHER CURR

ACCOUNTS PAYABLE AND OTHER CURRENT LIABILITIES	12 Months Ended
	Dec. 31, 2016
Accounts Payable And Other Current Liabilities
ACCOUNTS PAYABLE AND OTHER CURRENT LIABILITIES	NOTE 6 — ACCOUNTS PAYABLE AND OTHER CURRENT LIABILITIES As of December 31, 2016 and 2015, our accounts payable and other current liabilities consisted of the following: 2016 2015 Accounts payable $ 731,518 $ 404,146 Accrued compensation 144,134 186,665 Accrued expenses 11,100 12,900 401(k) employer contribution expense 78,005 100,466 Accounts payable and other liabilities $ 964,757 $ 704,177

SECURED CONVERTIBLE NOTES, WARR

SECURED CONVERTIBLE NOTES, WARRANTS AND FINANCING AGREEMENTS	12 Months Ended
	Dec. 31, 2016
Secured Convertible Notes Warrants And Financing Agreements
SECURED CONVERTIBLE NOTES, WARRANTS AND FINANCING AGREEMENTS	NOTE 7 — SECURED CONVERTIBLE NOTES, WARRANTS AND FINANCING AGREEMENTS 2013 AAOF, Knox and XGS II Financings On March 18, 2013 we entered into a series of agreements with our former Chief Executive Officer, Michael R. Knox and two private funds: Aspen Advance Opportunity Fund, LP (“AAOF”) and XGS II, LLC (“XGS II”). These agreements were amended and restated on July 12, 2013 to provide for expanded financing commitments from AAOF and XGS II. Under these agreements, they agreed to provide financing to the Company in the form of Secured Convertible Notes and a provision that a portion of the AAOF funding could be funded under lease financing arrangements. AAOF had a financing commitment of a minimum of $6 million and, at the option of AAOF, a maximum of $10 million, of which a maximum of $3 million could be provided in the form of lease financing. XGS II agreed to provide a minimum of $250,000 and, at the option of XGS II, a maximum of $750,000. The agreements provided for Mr. Knox to lend the Company $700,000, to be funded by converting advances he had made under a revolving line of credit. All of the funding with the exception of the Knox financing, was scheduled according to minimum financing commitments on calendar dates ranging from the time the agreements were executed to a period of eighteen months into the future. With the exception of any lease financing, the financings provided by Knox, AAOF, and XGS II takes the form of Secured Convertible Notes with identical terms and provisions. On January 15, 2014, we consolidated the Secured Convertible Notes issued in 2013 to AAOF and XGS II, together with accrued interest, into a single note for each lender with terms and conditions similar to the original notes. We also increased the XGS II optional funding level to $1 million and extending the optional financing periods for both AAOF and XGS II through the end of 2014. The previously issued Certificate of Designation of Series A Convertible Preferred Stock was also amended to clarify the conditions related to Mandatory Conversion into Common Stock upon listing of the Company’s stock on a Qualified National Exchange and to add a provision that would exempt holders of Series A from future mandatory financing participation. The Secured Convertible Notes issued under these agreements bear interest at 12% per annum and have a due date of March 18, 2018. We had the option to accrue the interest payments through December 31, 2014 and add it to the principal of the notes. After December 31, 2014, the note holder had the option of receiving ongoing interest payments: 1) in cash; 2) in the form of Series A Preferred Stock at a price per share equal to the then-effective Series A Original Issue Price ($12 per share); 3) in the form of any other series of Preferred Stock outstanding at the time interest is due; or 4) they could elect to accrue the interest and add it to the balance of the Note. Beginning January 1, 2015, Mr. Knox chose to receive ongoing interest payments in cash, while all other note holders continue to have interest accrued and added to the balance of their Notes. These Notes are secured by all of the assets, both tangible and intangible, of the Company. Further, they are convertible into Series A Preferred Stock, at the option of the holder at a conversion price of $12 per share. The embedded conversion feature in the Secured Convertible Notes was analyzed under ASC 815 to determine if it achieved equity classification or required bifurcation as a derivative instrument. The Company’s common stock is not publicly traded so there is no mechanism outside the notes that would permit the holder to achieve net settlement and the underlying shares are not readily convertible to cash. Accordingly, the embedded conversion feature does not meet the definition of a derivative, and therefore, does not require bifurcation from the host instrument. Certain default put provisions were not considered to be clearly and closely related to the host instrument but we concluded that the value of these default put provisions was de minimus In conjunction with the sale of the Secured Convertible Notes to AAOF and XGS II, Stock Warrants to purchase an aggregate of 447,916 shares of Series A Preferred Stock were issued that vest as the financing occurs at a rate of one Stock Warrant for every $24.00 funded. On January 15, 2014, we exchanged the existing warrants for new warrants to purchase 916,666 shares of Series A Preferred Stock. In accordance with the terms of the amendment, the previously-issued Stock Warrants associated with these financings vest as the financings occur at a rate of one Stock Warrant for every $12.00 funded. The Stock Warrants have an exercise price of $12.00 per share and are indexed to Series A Preferred Stock which contains a feature that requires adjustment of the exercise price of the Preferred Stock if the Company issues any Common Stock or common stock equivalents for a price less than the exercise price in effect immediately before the issuance. The Stock Warrants expire on the earlier of i) March 18, 2023 or ii) the acquisition of the Company by another entity. The Stock Warrants required derivative liability accounting because the conversion price reset protection terms in the underlying Series A Preferred Stock was not consistent with the definition for financial instruments indexed only to a company’s own stock. As such, they are required to be marked to fair value each reporting period. After recording the Stock Warrants at fair value, a determination was made as to whether, in accordance with ASC 470, there was a BCF associated with the Secured Convertible Notes. A BCF is a non-detachable conversion feature that is in-the-money at the commitment date. An option is in-the-money if its effective conversion price is less than the current fair value of the share. For purposes of measuring a BCF, the effective conversion price is based on the proceeds allocated to the convertible debt instrument after considering allocations to detachable warrants. The cash proceeds from the AAOF and XGS II financings were allocated first to the derivative liabilities resulting from the Stock Warrants, at their fair values, then to the beneficial conversion feature, with the residual allocated to the host debt contracts. The amount allocated to the derivative liabilities and the BCF was recorded as a discount on the Secured Convertible Notes and was being amortized to interest expense over the remaining term of the notes using the effective interest method. As of December 31, 2015, AAOF and XGS II had purchased $10,000,000 of secured convertible notes and also provided $1,026,091 in equipment lease financing. Because the lease commitments exceed the $1,000,000 initial commitment by $26,091, AAOF increased the maximum potential funding from $11,000,000 to $11,026,091. All 833,332 Stock Warrants issued in conjunction with the Secured Convertible Notes and all 83,334 Stock Warrants issued in conjunction with the lease commitments, were vested as of December 31, 2015. No payments were made on the secured convertible notes and as mentioned in further detail below, on December 31, 2015, the AAOF and XGS II Notes were converted into Series A Preferred Stock. 2014 Samsung Financing and Warrants On January 15, 2014, we sold $3,000,000 of Secured Convertible Notes to SVIC No. 15 New Technology Business Investment L.L.P, a subsidiary of the Samsung Group (“Samsung”). These notes had terms and conditions that were substantially similar to those previously issued to Knox, AAOF, and XGS II. In connection with the sale of the notes, the Company issued to Samsung a total of 100,000 Stock Warrants with a term of 4 years that are exercisable into shares of Series A Preferred Stock at a price of $12.00. These Stock Warrants vest in four installments on the first, second, third and fourth anniversary of the issuance of the Stock Warrants according to the following formula: On each anniversary, the warrant vests according to the ratio of total Samsung payments to us during the previous twelve-month period divided by 250. Thus, the warrants will vest proportionately in relation to the first $25 million, or fraction thereof, that Samsung pays, in cash, to us over the four years beginning January 15, 2014. Samsung payments are defined as future total cash payments, including licensing, royalties and product purchases but not joint development or purchase of Secured Convertible Notes. As of December 31, 2016, no payments had been made by Samsung and none of the Stock Warrants associated with the Samsung note had vested. If and when Samsung provides funding to the Company in the future, the Stock Warrants will be measured at fair value and expensed at that time. Conversion of Secured Convertible Notes In conjunction with the Series B Private Placement, the holders of the Secured Convertible Notes agreed to convert their notes into Series A Preferred Stock upon the earlier of i) the Company raising at least $12 million through the sale of securities or ii) December 31, 2015, contingent on the Company raising at least $2 million through the sale of securities by that date. All the Secured Convertible Note agreements converted into shares of Series A Preferred Stock on December 31, 2015 in accordance with the terms of the agreements. The following table reflects the outstanding balances of the Notes on the date of conversion: AAOF XGS II KNOX SAMSUNG Total Face value of notes at issuance $ 9,000,000 $ 1,000,000 $ 700,000 $ 3,000,000 $ 13,700,000 Accrued interest on face value 2,520,232 310,068 166,721 776,519 3,773,540 Amount due – December 31, 2015 $ 11,520,232 $ 1,310,068 $ 866,721 $ 3,776,519 $ 17,473,540 Shares of Series A Convertible Preferred Stock Issued 960,019 109,172 72,226 314,709 1,456,126 On conversion, the fair value of the notes and accrued interest was credited to the capital accounts. The remaining unamortized discount of approximately $5.1 million was recorded as interest expense. Total interest expense of $ $7,154,905 was recognized for the year ended December 31, 2015. Bridge Financings From December 31, 2015 through April 7, 2016, we entered into private placement bridge financings, executed using15 separate short-term promissory notes totaling $1,124,750 (the “Bridge Financings”). Seven of these notes were executed by three board members. The Bridge Financings had maturity dates ranging from June 30, 2016 through December 31, 2016 and the interest rate was 8% The investors in the Bridge Financings received common stock warrant coverage of 30% for investments made prior to December 31, 2015 with an exercise price of $8.00 per share, and 20% coverage thereafter with an exercise price of $10.00 per share. The Company issued warrants indexed to 32,120 shares of common stock with a five year term and an exercise price of $8.00 per share. During the period from closing of the offering and ending on the earlier of i) December 31, 2017 and ii) the date the Company consummates the sale of new securities resulting in gross proceeds of at least $18 million, the warrant holders have the right to exchange their Warrants on a price per share basis into the new security on the relative price per share terms as the new securities are sold to the third party. Due to the Exchange Rights, the Warrants did not meet the conditions for equity classification and require classification as liabilities at fair value. The proceeds of the financing were allocated first to the derivative liabilities resulting from the Stock Warrants, at their fair value, with the residual allocated to the debt instrument as follows: 2015 2016 Total Derivative liabilities- warrants $ 52,676 $ 550,691 $ 603,367 Bridge Financing Notes 497,324 24,059 521,383 Total allocated proceeds $ 550,000 $ 574,750 $ 1,124,750 During June 2016, we repaid i) outstanding principal of $750,000 plus accrued interest of $27,032 to the Bridge Financing investors. These investors, who are also members of the board of directors of the Company, used the proceeds from repayment of their notes, plus additional funds, to purchase 199,879 additional shares of the Company’s common stock for approximately $1.6 million . During December 2016, we repaid the remaining $374,750 of outstanding principal plus accrued interest of $21,253. Members of the board of directors and their affiliates provided $800,000 of the principal for such Bridge Financings, and upon repayment they re-invested all of the principal plus an additional $1,013,032 to purchase 226,629 shares of the Company’s common stock. Dow Loan In December 2016, we entered into a draw loan note and agreement (the “Dow Loan”) with The Dow Chemical Company (“Dow”) to provide up to $10 million of secured debt financing to the Company at an interest rate of 5% per year, drawable at our request under certain conditions. We received $2 million at closing, with $3 million in additional funding available on or before December 1, 2017. After December 1, 2017, an additional $5 million becomes available if we have raised $10 million of equity capital after October 31, 2016. The Dow Loan is senior to most of our other debt, and is secured by the Company’s assets (Dow is subordinate only to the capital leases with AAOF, see note 13). The loan does not mature until December 1, 2021, (subject to certain mandatory prepayments based on our equity financing activities). Interest is payable beginning January 1, 2017 although we may elect to capitalize interest through January 1, 2019. Dow will receive warrant coverage of one share of common stock for each $40 received by the Company, equating to 20% warrant coverage, with an exercise price of $8.00 per share for the warrants issued at closing with the exercise price of future warrants subject to adjustment if the Company sells shares of common stock at a lower price. As of December 31, 2016, we issued 50,000 warrants to Dow which are exercisable on or before the expiration date of December 1, 2023. The warrants meet the criteria for classification within stockholders’ equity. The fair value of the warrants was determined using a lattice model with the following inputs: Stock price $7.63, strike price $8.00, equivalent volatility 38.38%, equivalent risk free rate 1.53%. The relative fair value of the warrants totaled approximately $143,146 which was recorded as a debt discount and is being amortized to interest expense over the life of the loan. During the fiscal year ended December 31, 2016, amortization expense of $5,266 was recognized resulting in a carrying value of $1,862,120 for the Dow Loan as of December 31, 2016. The Loan entitles Dow to appoint an observer to the Company’s board of directors. They will maintain their observation right until the later of December 1, 2019 or when the amount of principal and interest outstanding under the Loan is less than $5 million.

PRIVATE PLACEMENT AND PREEMPTIV

PRIVATE PLACEMENT AND PREEMPTIVE RIGHTS	12 Months Ended
	Dec. 31, 2016
Warrants and Rights Note Disclosure [Abstract]
PRIVATE PLACEMENT AND PREEMPTIVE RIGHTS	NOTE 8 — PRIVATE PLACEMENT AND PREEMPTIVE RIGHTS Private Placement In April 2015, we commenced a private placement offering of up to $18,000,000 in Series B Units consisting of up to 1,125,000 shares of Series B Preferred Stock and warrants to purchase common stock at an offering price of $16.00 per Series B Unit. As of December 31, 2016, we had sold 266,887 shares of Series B Convertible Preferred Stock and Warrants to purchase 222,262 shares of common stock, for aggregate gross proceeds of $4,270,192. The Series B Preferred Stock has a stated value of $16.00 per share and is convertible, at the option of the holder, at a conversion price of $16.00 per share, subject to adjustments for stock dividends, splits, combinations and similar events. The Warrants have an exercise price of $16.00 per share and expire in 7 years. During the period from closing of the offering and ending on the earlier of i) December 31, 2017 and ii) the date the Company consummates the sale of new securities resulting in gross proceeds of at least $18 million, the holder has the right to exchange their Series B Preferred Stock and Warrants on a price per share basis into the new security on the relative price per share terms as the new securities were sold to the third party. The cash proceeds from the private placement were allocated first to the derivative liabilities resulting from the Stock Warrants, at their fair values. There was no BCF present so the residual was allocated to the Series B Preferred Stock, as follows: Allocation Derivative liabilities – warrants $ 660,378 Series B Preferred Stock 3,609,814 Total allocated proceeds $ 4,270,192 The warrants issued in the private placement required derivative liability accounting and are required to be marked to fair value each reporting period. The initial fair value of the warrants was estimated using a binomial lattice model with the following assumptions: Fair value of underlying stock $12.00 Equivalent risk free interest rate 0.91% – 1.03% Expected term (in years) 7.00 Equivalent stock price volatility 30.47% – 31.22% Expected dividend yield — Equivalent amounts reflect the net results of multiple modeling simulations that the lattice model applies to underlying assumptions. The expected volatility of the Company’s stock was developed using historical volatility of a peer group for a period equal to the expected term of the Stock Warrants. The private placement Series B Unit offering was terminated on February 25, 2016. As a result of our IPO and pursuant to the exchange rights, holders of Series B Preferred Stock received the right to exchange each share of Series B Preferred Stock they owned into two shares of common stock. As of December 31, 2016, all holders of Series B Preferred Stock had exercised their Series B Exchange Rights, and as a result the Company issued 539,974 shares of restricted common stock in exchange for the 269,987 shares of Series B Preferred Stock that had been previously outstanding. All of the previously issued Series B Preferred Stock was cancelled. However, as of December 31, 2016, all of the warrants issued in connection with the Series B Units remain outstanding. Preemptive Rights On January 15, 2014, as part of our financing agreements with Samsung, AAOF and XGS II, we agreed to allow all shareholders to purchase one share of Series A Convertible Preferred Stock at a price of $12 per share for every two shares of Series A Convertible Preferred Stock or Common Stock owned by the shareholder. In addition, for every two preemptive shares purchased, the Company issued the shareholder a warrant to purchase one additional share of Series A Convertible Preferred Stock with the same terms as the warrants issued to AAOF and XGS II. The Company also agreed to issue warrants with the same terms to those shareholders who exercised preemptive rights in October 2013. These preemptive rights expired on March 31, 2014. Under the January 15, 2014 preemptive rights offering, 101,000 shares of Series A Preferred Stock were sold to existing stockholders at a price of $12.00 per share. Stock Warrants indexed to 56,054 shares of Series A Preferred Stock were issued in conjunction with these stock purchases, including 5,554 warrants related to the preemptive rights exercised in October 2013. Proceeds of $1,345,284 were allocated first to derivative liabilities-warrants at their fair value of $316,366, a BCF of $316,366 was recorded for the difference between the effective conversion price and the current fair value of the share, with the remaining $712,522 being allocated to the Series B Preferred Stock. As part of our private placement in April 2015, shareholders and holders of our convertible notes were provided the right to purchase their pro rata share of any class of stock that the Company sells or issues. The sale of Series B Preferred Stock in the April 2015 offering triggered the preemptive rights. This resulted in the issuance of additional Series B Units consisting of 3,100 shares of Series B Preferred Stock sold at a price of $16.00 per share and warrants to purchase 2,635 shares of Common Stock. Proceeds of $49,600 were allocated first to derivative liabilities-warrants at their fair value of $7,881 with the remaining $41,719 being allocated to the Series B Preferred Stock. There was no BCF associated with the April 2015 issuance. As of December 31, 2016, the total number of Stock Warrants issued due to the preemptive rights offerings was 58,689.

DERIVATIVE LIABILITY WARRANTS

DERIVATIVE LIABILITY WARRANTS	12 Months Ended
	Dec. 31, 2016
Derivative Instruments and Hedging Activities Disclosure [Abstract]
DERIVATIVE LIABILITY WARRANTS	NOTE 9 - DERIVATIVE LIABILITY WARRANTS The Stock Warrants issued in conjunction with the convertible notes, the equipment financing leases, the 2015 private placement transaction and the preemptive rights are derivative liabilities which require re-measurement at fair value each reporting period. Liability classification is required because the conversion price reset protection terms in the underlying Series A Convertible Preferred Stock, and the Exchange Rights are not consistent with the definition for financial instruments indexed only to a company’s own stock. The initial value of the Stock Warrants issued as consideration for the equipment financing leases was recorded as a reduction of the capital lease obligation and is being amortized as part of the effective interest cost on the capital lease obligation (see Note 13). The Bridge Financing Warrants issued in December 2015 provided the holder with the right to exchange their warrants on a price per share basis into a new security on the same relative price per share terms as any new securities sold to third parties resulting in gross proceeds of at least $18,000,000. As a result of these exchange rights, the December 2015 Bridge Financing warrants did not achieve equity classification at inception and were recorded as derivative liabilities, at fair value. During the second quarter of 2016, the warrant holders agreed to waive their exchange rights at which time the warrants were reclassified to equity and $51,418 of derivative liabilities related to such December 2015 Bridge Financing warrants was reclassified to equity. Shares indexed to derivative liabilities as of December 31, 2016 and 2015 were as follows: Type of shares Exercise Price 2016 2015 Warrants issued with Secured Convertible Notes Series A PS $ 6.40 833,333 833,333 Warrants issued with equipment financing leases Series A PS $ 6.40 83,333 83,333 Warrants issued with Series A preemptive rights Series A PS $ 6.40 56,054 56,054 Warrants issued with Series B preemptive rights Common $ 16.00 2,635 2,635 Warrants issued with Series B Units Common $ 16.00 222,262 222,262 Warrants issued with Bridge Financings Common $ 8.00 — 20,625 Total shares indexed to derivative liabilities 1,197,617 1,218,242 The following table summarizes the fair value of the derivative liabilities as of December 31, 2016 and 2015: 2016 2015 Warrants issued with Secured Convertible Notes $ 6,554,160 $ 6,743,997 Warrants issued with equipment financing leases 655,418 674,397 Warrants issued with preemptive rights 443,790 457,265 Warrants issued with 2015 Series B Units 246,881 306,828 Warrants issued with Bridge Financings — 52,676 Total derivative liabilities $ 7,900,249 $ 8,235,163 The Company estimated the fair value of their warrant derivative liabilities as of December 31, 2016 and December 31, 2015, using a lattice model and the following assumptions: 2016 2015 Fair value of underlying stock $7.63 – $12.64 $7.63 – $12.64 Equivalent risk free interest rate 1.27% – 1.46% 1.06% – 1.39% Expected term (in years) 5.33 – 7.04 5.01 – 8.05 Equivalent stock price volatility 37.44% – 37.92% 38.00% – 38.61% Expected dividend yield — — The value of the warrants is estimated using a binomial lattice model. Equivalent amounts reflect the net results of multiple modeling simulations that the lattice model applies to underlying assumptions. Because the Company is not publicly traded on a national exchange or to our knowledge, an over-the-counter market, the expected volatility of the Company’s stock was developed using historical volatility for a peer group for a period equal to the expected term of the warrants. The fair value of the warrants will be significantly influenced by the fair value of our common stock, stock price volatility, and the risk-free interest components of the lattice technique. Changes in the fair value of Derivative Liabilities, carried at fair value, are reported as “Change in fair value of derivative liability — warrants” in the Statement of Operations, and were as follows: Year ended December 31, 2016 2015 Warrants issued with Secured Convertible Notes $ 189,837 $ (2,459,830 ) Warrants issued with equipment financing leases 18,979 (245,986 ) Warrants issued with preemptive rights 13,475 (161,211 ) Warrants issued with 2015 Series B Units 59,947 353,551 Warrants issued with Bridge Financings 1,258 — Total Derivative Gain (Loss) $ 283,496 $ (2,513,476 )

CONVERTIBLE PREFERRED STOCK

CONVERTIBLE PREFERRED STOCK	12 Months Ended
	Dec. 31, 2016
Convertible Preferred Stock
CONVERTIBLE PREFERRED STOCK	NOTE 10 — CONVERTIBLE PREFERRED STOCK Series A Convertible Preferred Stock The Company is authorized to issue up to 3,000,000 shares of Series A Convertible Preferred Stock (“Series A Preferred”). Each share of the Series A Preferred, which has a liquidation preference of $12.00 per share, is convertible at any time, at the option of the holder, into one share of Common Stock at the lower of: (a) $12.00 per share, or (b) 80% of the price at which the Company sells any equity or equity-linked securities in the future. The Series A Preferred also contains typical anti-dilution provisions that provide for adjustment of the conversion price to reflect stock splits, stock dividends, or similar events. The Series A Preferred is subject to mandatory conversion into Common Stock upon the listing of the Company’s Common Stock on a Qualified National Exchange. When the Company issued Warrants for $8.00 per share in conjunction with the December 2015 Bridge Financing, the conversion price of the Series A Preferred reduced from $12.00 to $6.40 (80% of $8.00). The repricing of the Series A Preferred resulted in a beneficial conversion feature of approximately $2.21 million which was recorded as a deemed dividend. Series B Convertible Preferred Stock As of December 31, 2016, 1,500,000 shares have been designated as Series B Convertible Preferred Stock (“Series B Preferred”), of which none were issued and outstanding. Each share of the Series B Preferred, which has a liquidation preference of $16 per share, is convertible at any time, at the option of the holder, into one share of Common Stock at $16 per share. The Series B Preferred also contains typical anti-dilution provisions that provide for adjustment of the conversion price to reflect stock splits, stock dividends, or similar events. Each share of Series B Preferred is subject to mandatory conversion into common stock at the then-effective Series B conversion rate upon the public listing by the Company of its Common Stock on a Qualified National Exchange. However, the Series B Preferred is not subject to the mandatory conversion until all outstanding Convertible Securities are also converted into common stock. Holders of the Series B Preferred Stock have the right to exchange their Series B Units on a price per share basis into new securities on the relative price per share terms as new securities sold to a third party on the earlier of i) December 31, 2017 and ii) the date the Company consummates the sale of new securities resulting in gross proceeds of at least $18 million. As discussed in further detail in Note 8, as of December 31, 2016, all holders of Series B Preferred Stock have exercised their exchange rights and had exchanged all their Series B Preferred Stock for shares of restricted common stock. The Series B Preferred ranks senior to all other equity or equity equivalent securities of the Company other than those securities which are explicitly senior or pari passu in rights and liquidation preference to the Series B Preferred and pari passu with the Company’s Series A Preferred. The Series A and B Preferred are not redeemable for cash and the Company concluded that they are more akin to equity-type instruments than debt-type instruments. Accordingly, the embedded conversion option in each agreement is clearly and closely related to an equity-type host and the conversion option does not require classification and measurement as a derivative financial instrument. Therefore, the securities meet the conditions for stockholders’ equity classification.

INCENTIVE STOCK OPTION PLAN

INCENTIVE STOCK OPTION PLAN	12 Months Ended
	Dec. 31, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
INCENTIVE STOCK OPTION PLAN	NOTE 11 — INCENTIVE STOCK OPTION PLAN We have established an incentive stock option plan (the “Plan”) under which the Company may grant key employees and directors options to purchase common stock of the Company at not less than fair market value as of the grant date. Options for up to 600,000 shares may be awarded under the Plan. Each option is exercisable into one share of common stock of the Company. The Plan expires in December 2017. The fair value of the options granted was estimated on the dates of grant using the Black Scholes option-pricing model. As of December 31, 2016 and 2015, respectively, 369,750 and 419,750 option shares have been granted cumulatively at the end of each year. Vesting of the options ranges from immediately to 20% per year, with most options vesting on a straight-line basis over a three or four year period from the date issued. See discussion of CEO options below. Rights to exercise the options vest immediately upon a change in control of the Company or termination of the employee’s continuous service due to death or disability. The options expire at various dates through October 2023. The following table shows the stock option activity during the years ended December 31, 2016 and 2015: 2016 2015 Number Weighted Number Weighted Options outstanding at beginning of year 419,750 $ 12.00 464,750 $ 12.05 Changes during the year: Granted – at market price — 12.00 30,000 12.00 Expired (50,000 ) 13.20 (75,000 ) 12.00 Options outstanding at end of year 369,750 11.89 419,750 12.04 Options exercisable at end of year 268,565 11.86 190,080 12.00 Weighted average fair value exercise price of options granted during the year $ 0 $ 12.00 Costs incurred in respect of stock based compensation for employees and directors, for the years ended December 31, 2016 and 2015 were $480,532 and $598,779, respectively. Unrecognized compensation cost as of December 31, 2016 was $381,009, which amount is expected to be recognized over approximately 32 months. As of December 31, 2016, none of the currently exercisable stock options had intrinsic value. The intrinsic value of each option share is the difference between the fair market value of our common stock and the exercise price of such option share to the extent it is “in-the-money”. Aggregate intrinsic value represents the value that would have been received by the holders of in-the-money options had they exercised their options on the last trading day of the year and sold the underlying shares at the closing stock price on such day. The intrinsic value calculation is based on the assumed market value of our common stock on December 31, 2016 of $7.63 per share. There were no in-the-money options outstanding and exercisable as of December 31, 2016, since the exercise prices of the stock options outstanding and expected to vest were all greater than the fair value of our common stock. The following table presents changes in the number of non-exercisable options during 2016: Non-exercisable options Number Weighted Average Total non-exercisable options outstanding – December 31, 2015 229,670 $ 12.08 Options cancelled (35,000 ) $ 13.20 Options vested (93,485 ) $ 12.00 Total non-exercisable options outstanding – December 31, 2016 101,185 $ 12.00 The Company hired a new Chief Executive Officer who commenced his employment on January 6, 2014. As part of his compensation, on January 6, 2014, he was awarded 220,000 stock options, with an exercise price of $12 per share. Of the total option award, 160,000 options vest over the four year period ending January 6, 2018. The grant date fair value of these options was $987,648, which is expected to be recognized over the four year vesting period. The remaining 60,000 options are subject to certain performance targets being met. As of December 31, 2016 and 2015, $41,352 and $17,070 of expense was recognized when achievement of certain targets was deemed probable. The total fair value of options granted during the year ended December 31, 2015 was $44,721. There were no options granted during 2016. The fair value of the options granted in 2015 was estimated on the grant date using the Black-Scholes option-pricing model with the following assumptions: 2015 Fair value of underlying stock $7.63 Expected option life 5.00 years – 5.18 years Expected stock price volatility 36.12% – 36.36% Risk free interest rate 1.35% Expected dividend yield 0.00% The following table presents summary information concerning the options outstanding as of December 31, 2016: Exercise prices Number Number Weighted $ 8.00 10,000 10,000 .92 $ 12.00 359,750 258,565 4.92 369,750 268,565 5.84

STOCK WARRANTS

STOCK WARRANTS	12 Months Ended
	Dec. 31, 2016
Stock Warrants
STOCK WARRANTS	NOTE 12 — STOCK WARRANTS In addition to the warrants described in Note 9, which are accounted for as derivative liabilities, we had 42,694 common stock warrants that were issued in 2012 and prior years which are accounted for as equity instruments. During the period from July 2014 to July 2015, 30,294 of these warrants expired unexercised and 1,400 of the warrants were exercised in May 2015. The remaining 11,000 warrants have exercise prices ranging from $8.00 to $12.00 and expire at various dates through 2027. The following table summarizes the warrants outstanding at December 31, 2016, all of which are exercisable: Date Issued Expiration Date Exercise Price Number of 7/1/2009 7/1/2019 $ 8.00 6,000 10/8/2012 10/8/2027 $ 12.00 5,000 11,000

CAPITAL LEASES

CAPITAL LEASES	12 Months Ended
	Dec. 31, 2016
Capital Leases of Lessee [Abstract]
CAPITAL LEASES	NOTE 13 — CAPITAL LEASES As of December 31, 2016 and 2015, we have capital lease obligations to AAOF (see Note 7) and other lessors as follows: December 31, December 31, Capital lease obligations $ 449,368 $ 682,564 Unamortized warrant discount (65,595 ) (149,594 ) Net obligations 383,773 532,970 Short-term portion of obligations (268,667 ) (178,487 ) Long-term portion of obligations $ 115,106 $ 354,483 In connection with the lease agreements with AAOF, we issued to them preferred stock warrants with an initial fair value of $156,043 and $147,496 in 2015 and 2014, respectively (see Note 7). The initial fair value has been accounted for as a discount on the capital lease obligation and will be amortized as part of the interest expense on the leases. As discussed in Note 9, the warrants are accounted for as derivative instrument liabilities at fair value. Our AAOF capital lease obligations are four year leases starting on January 1, 2014 and January 1, 2015. The effective interest rates on the leases are 50% and 32% for the leases executed in 2015 and 2014, respectively. The present value of the lease payments are more than 90% of the fair value of the equipment and therefore the leases were capitalized. Our other capital leases expire at various dates in 2018, have average effective interest rates of 0% and contain bargain purchase options that allow us to purchase the leased property for a minimal amount upon the expiration of the lease term. Future minimum lease payments under capital lease obligations are as follows: For the year ending December 31: 2017 $ 362,184 2018 140,148 Total future minimum lease payments 502,332 Less amount representing interest (118,559 ) Present value of future minimum lease payments 383,773 Less current maturities (268,667 ) Obligations under capital leases – long term $ 115,106 Property and equipment acquired under capital lease agreements is pledged as collateral to secure the performance of the future minimum lease payments above.

INCOME TAXES

INCOME TAXES	12 Months Ended
	Dec. 31, 2016
Income Taxes
INCOME TAXES	NOTE 14 — INCOME TAXES Deferred tax assets (liabilities) consist of the following at December 31: 2016 2015 Current: Other temporary differences $ 75,000 $ 10,000 Non-current: Net operating loss carry forwards 12,985,000 9,955,000 Tax depreciation in excess of book depreciation (230,000 ) (220,000 ) Research and development credits 560,000 490,000 Net deferred tax asset 13,390,000 10,235,000 Deferred tax valuation allowance (13,390,000 ) (10,235,000 ) Net deferred tax asset $ — $ — Net operating loss carry forwards of $38,200,000 and $33,180,000 exist at December 31, 2016 and 2015, respectively. The primary difference between the net operating loss carry forwards and the accumulated deficit arises from certain stock option, warrants and other debt and equity transactions that are considered permanent differences. These losses were incurred in the years 2006 through 2016 and will expire between 2026 and 2036 and their utilization may be limited if we experience significant ownership changes. The Company has not conducted a full IRC Section 382 analysis to determine if a reduction in net operating loss carry forwards is required due to ownership changes. The analysis has not been undertaken due to the financial burden it would cause and changes, if any, resulting in a reduction to the deferred tax asset and related valuation would have no impact on the deferred tax asset or expense recognized. The research and development credits will expire between 2028 and 2036. A rate of 40% has been used to calculate the deferred tax assets and liabilities based on the expected effective tax rate, net of applicable credits, upon reversal of the differences above. A valuation allowance has been established against the entire deferred tax asset at December 31, 2016 and 2015. The valuation allowance is considered a significant estimate subject to material change in the near term. Below is a reconciliation of the statutory federal income tax rate to our effective tax rate for the fiscal years ended December 31, 2016 and 2015: 2016 2015 Federal tax provision 34.0 % 34.0 % State tax provision 6.0 % 6.0 % Valuation allowance (40.0 )% (40.0 )% 0.0 % 0.0 % We file income tax returns in the U.S. federal jurisdiction and in Michigan. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. Beginning in 2017 we will begin filing under the corporate income tax (CIT) versus the Michigan Business Tax (MBT) structure. Net operating losses incurred in 2016 and prior will not carry forward to the CIT tax structure, accordingly all losses are considered a permanent timing difference for state deferred tax calculations. For federal and state purposes, we have open tax years for all years in which we have filed tax returns. We are not currently subject to any ongoing income tax examinations.

CUSTOMER, SUPPLIER, COUNTRY AND

CUSTOMER, SUPPLIER, COUNTRY AND PRODUCT CONCENTRATIONS	12 Months Ended
	Dec. 31, 2016
Customer Supplier Country And Product Concentrations
CUSTOMER, SUPPLIER, COUNTRY AND PRODUCT CONCENTRATIONS	NOTE 15 — Customer, Supplier, country and Product Concentrations Grants and Licensing Revenue Concentration Two grantors accounted for 77% and 14% respectively of total grant revenue in 2016. In 2015 one grantor accounted for 100% of the revenue. The company’s licensing revenue in both 2016 and 2015 came from one licensor. Product Concentration For 2016, we had concentrations of product revenue from one product that was greater than 10% of total product revenues. Revenue from one of the Company’s graphene nanoplatelets materials , Grade C 300 m²/g – HP, was 24%. For 2015, we had concentrations of revenue from two products that were each greater than 10% of total revenues, Grade M 5µm was 11% and Grade C 750 m²/g was 12%. We attempt to minimize the risk associated with product concentrations by continuing to develop new products to add to our portfolio. Customer Concentration For 2016 we had one customer whose purchases accounted for 24% of total product revenues. In 2015 we had another customer that represented 12% of total product revenues. At December 31, 2016, there was one customer who had an accounts receivable balance greater than 10% of our outstanding receivable balance, at December 31, 2015 there were four customers who each had an accounts receivable balance greater than 10% of our outstanding receivable balance. Country Concentration We sell our products on a worldwide basis. International revenues in both 2016 and 2015 were 56% of total product revenues. All of these sales are denominated in U.S. dollars. One country (South Korea) other than the United States accounted for approximately 21% and 12% of total product revenue in the years ended December 31, 2016 and 2015, respectively. Suppliers We buy raw materials used in manufacturing from several sources. These materials are available from a large number of sources. A change in suppliers has no material effect on the Company’s operations. We did not have any purchases to one supplier that was more than 10% of total purchases in either 2016 or 2015.

RELATED PARTY TRANSACTIONS AND

RELATED PARTY TRANSACTIONS AND COMMITMENTS	12 Months Ended
	Dec. 31, 2016
Related Party Transactions [Abstract]
RELATED PARTY TRANSACTIONS AND COMMITMENTS	NOTE 16 — RELATED PARTY TRANSACTIONS AND COMMITMENTS We have a licensing agreement for exclusive use of patents and pending patents with Michigan State University (MSU), a stockholder via the MSU Foundation. During 2016 and 2015, we incurred $50,000 each year for royalties for these licenses. We have also entered into product licensing agreements with certain other stockholders. No royalty expenses have been recognized related to these agreements during 2016 and 2015. We entered into an employment agreement with our CEO during December 2013. The agreement calls for an annual salary of $275,000. In addition, this officer will receive an aggregate of 220,000 options to purchase common stock at $12 per share. The options have a life of 8 years provided the employee remains employed by the Company. The options vest as follows: 160,000 over a 48 month period with 40,000 options vesting on the first anniversary of the agreement and the balance over the remaining 36 months; 40,000 vesting over a provisional time based schedule and 20,000 vest based on certain performance requirements. The agreement has no termination date but may be terminated by either party at any time. If the Company terminates the agreement without cause it will be liable for 6 months of severance pay. In 2016, 2015, and 2014, POSCO, one of our shareholders, has a contractual obligation to pay us a minimum of $100,000 per year to license certain technologies we license from MSU. This obligation is due annually on February 28 of the following year. We recorded this license revenue at a rate of $25,000 per quarter for the years ended December 31, 2016 and 2015. POSCO is disputing that they are obligated to pay the royalties. This case is being arbitrated. An allowance in the amount of $150,000 has been recorded at December 31, 2016 to reflect an estimate of what portion of the 2014, 2015 and 2016 royalties may not be collectible. The accrued royalty and allowance are netted together and reflected in other current assets on the consolidated balance sheets. On March 18, 2013, the Company entered into financing arrangements with two private funds (AAOF and XGS II) that were formed for the sole purpose of investing in the Company by two investors affiliated with ASC-XGS, LLC, a stockholder of the Company. During 2013, these two funds purchased $4,503,847 of secured convertible notes and also provided $635,770 in equipment lease financing. In 2014, these two funds purchased $5,500,000 of secured convertible notes and also provided $390,321 in equipment lease financing. No payments have been made on the secured convertible note and the balance due, including interest, was converted to Series A Preferred Stock on December 31, 2015. During the year ended December 31, 2015, Michael R. Knox was paid $254,000 under the terms of a phantom stock agreement. During the year ended December 31, 2015, and during the second quarter of 2016, we issued 28,560 and 14,280 shares of Series A Preferred Stock, respectively to AAOF as payment for lease financing obligations under the terms of a Master Leasing Agreement. In April 2015, we commenced a private placement offering of up to $18,000,000 in Series B Units consisting of up to 1,125,000 shares of Series B Preferred Stock and warrants to purchase common stock at an offering price of $16.00 per Unit. Each of Steven Jones and Arnold Allemang invested $250,000 in the offering of Series B Units. On December 31, 2015, we issued notes (“December Notes”) and warrants (“December Warrants”) to Mr. Allemang, Jones and Pendell, each of whom is currently a member of the Board of Directors. The December Notes matured on June 30, 2016 and the December Warrants have a five year term and a strike price of $8.00. Each of Steven Jones, Arnold Allemang, and Dave Pendell purchased December Notes for $250,000, $250,000 and $50,000 respectively, which included December Warrants for 9,375, 9,375, and 1,875 shares of common stock, respectively. These notes were paid off in full as of June 30, 2016. Mr. Allemang and Mr. Jones and certain of their affiliates reinvested the proceeds from the repayment of the December Notes plus additional other funds into our IPO. On March 9, 2016, we issued a promissory note and warrants to purchase 2,000 shares of common stock to Mr. Arnold Allemang, our Chairman of the Board. The note matured on December 31, 2016 and the warrants have a five year term and a strike price of $10.00. Mr. Allemang purchased the note and warrants for $100,000. The note was paid off in full as of June 30, 2016. Mr. Allemang reinvested the proceeds from the repayment of this note plus additional other funds into our IPO. On March 25, 2016, we issued a promissory note and warrants to purchase 2,000 shares of common stock to Mr. Steven Jones, a member of our Board of Directors. The note matured on December 31, 2016 and the warrants have a five year term and a strike price of $10.00. Mr. Jones purchased the note and warrants for $100,000. The note was paid off in full as of June 30, 2016. Mr. Jones reinvested the proceeds from the repayment of this note plus additional other funds into our IPO. On March 25, 2016, we issued a promissory note and warrants to purchase 1,000 shares of common stock to Mr. David Pendell, a member of our Board of Directors. The note matured on December 31, 2016 and the warrants have a five year term and a strike price of $10.00. Mr. Pendell purchased the note and warrants for $50,000. The note was paid off in full as of December 31, 2016. Mr. Pendell re-invested $48,000 of these loan repayment proceeds into our IPO. During the period from June - December 2016, Mr. Allemang, Jones and Pendell and certain of their affiliates invested the following amounts into our IPO and purchased the number of shares indicated. Purchase Dates Amount Invested Shares Purchased Arnold Allemang and affiliates June 23 – 28 and Sept. 30 $ 965,000 120,625 Steven C. Jones and affiliates June 24 – 27 $ 748,000 93,500 David G. Pendell and affiliates June 27 and Dec. 5 $ 100,032 12,504 Total $ 1,813,032 226,629 Pursuant to our registration statement, as of December 31, 2016, we have issued and sold 120,625 shares of common stock to entities controlled by Mr. Arnold Allemang, our Chairman of the Board, 93,500 shares of common stock to entities controlled by Mr. Steven Jones, our Director, and 12,504 shares of common stock to entities controlled by Mr. Dave Pendell, our Director. In conjunction with a financing with AAOF, we and our stockholders listed therein entered into a Shareholder Agreement on March 18, 2013 that contains a number of specific provisions pertaining to the Board of Directors as well as individual Directors. On February 26, 2016, we amended the Shareholder Agreement. Among other things, the Shareholder Agreement provides for certain voting and nomination rights to be calculated on the basis of “Full Conversion” stock ownership (under which calculation, all convertible notes, preferred shares, or other convertible equity securities are deemed converted into common stock) as follows: • So long as AAOF or its affiliates own 10% of more of the aggregate outstanding Shareholder Stock (as defined in the Shareholder Agreement): - the size of the Board of Directors shall be set at seven individuals. - one person nominated by AAOF shall be elected to the Board of Directors. - two members of the Board of Directors, other than those nominated by AAOF, POSCO or Hanwha Chemical, shall qualify as independent Directors. • So long as POSCO owns 10% of more of the aggregate outstanding Shareholder Stock, one person nominated by POSCO shall be elected to the Board of Directors. POSCO does not currently own at least 10% of the aggregate outstanding Shareholder Stock and therefore, there is no POSCO representative on the Board of Directors. • So long as Hanwha Chemical owns 10% of more of the aggregate outstanding Shareholder Stock, one person nominated by Hanwha Chemical shall be elected to the Board of Directors. Hanwha does not currently own at least 10% of the aggregate outstanding Shareholder Stock and therefore, there is no Hanwha representative on the Board of Directors. As of December 31, 2016, the ownership percentage of AAOF, as calculated for purposes of Director voting, required the stockholders bound by the Shareholder Agreement to vote for a Director nominated by AAOF. Mr. Jones is the AAOF representative to the Board pursuant to the terms of the Shareholder Agreement. The Shareholder Agreement grants preemptive rights to shareholders and holders of convertible notes who are parties to the Shareholder Agreement. Pursuant to the terms therein, such shareholders and noteholders have the right to purchase their pro rata share of all shareholder stock that the Company may, from time to time, propose to sell, issue, or exchange after the date of the Shareholder Agreement, other than certain excluded stock which includes stock granted to employees or as merger consideration. Each shareholder’s pro rata shares shall be equal to the ratio of (i) the aggregate number of shares of the Company’s common stock on a fully diluted basis, owned by the such shareholder at the time of the delivery of a preemptive rights notice to (ii) the aggregate number of shares of Company’s common stock on a fully diluted basis owned by all of the Company’s shareholders at the time of the delivery of a preemptive rights notice. The Shareholder Agreement may be amended or terminated by agreement (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of (i) a majority of the Company’s board of directors, and (ii) persons holding, in the aggregate, shares of Shareholder Stock representing at least sixty percent (60%) of the voting power of all shares of Shareholder Stock then held by Shareholders and their permitted assignees. On February 26, 2016, the Shareholders Agreement was amended to provide that holders of Excluded Stock are not subject to the terms of the Shareholders Agreement. Excluded Stock means shares of common stock that are subject to a registration statement that has been filed with the SEC and has been declared effective, and, for the avoidance of any doubt, includes the 3,000,000 shares being offered under the IPO Registration Statement. This amendment took effect upon the effectiveness of our registration statement of our IPO Registration Statement. The Amendment to the Shareholder Agreement further clarifies that preemptive rights shall not apply to Excluded Stock (including, without limitation, the 3,000,000 shares being offered under the IPO Registration Statement), and amends the termination date of the Shareholders Agreement. Specifically, the Shareholder Agreement has been amended to provide that it continues in effect until (i) the date of the closing of a public offering of common stock pursuant to a registration statement filed with the SEC that is declared effective in which the Company receives gross proceeds of at least $10,000,000, on which date it shall terminate in its entirety, unless the Shareholder Agreement is earlier terminated in accordance with its terms, or (ii) the date on which the Company’s common stock is listed on the NASDAQ Stock Market of the New York Stock Exchange. As a result, in the event that the Company is unable to raise at least $10,000,000 in our IPO, the Shareholder Agreement will continue to remain in effect and the larger shareholders described above will be entitled to continue to exercise their rights under such Shareholders Agreement, but purchasers of shares of common stock under this registration statement, if it is made effective, will not be required to adopt the Shareholders Agreement.

OPERATING LEASES

OPERATING LEASES	12 Months Ended
	Dec. 31, 2016
Operating Leases
OPERATING LEASES	NOTE 17 — OPERATING LEASES We lease our primary manufacturing facility, laboratory and administrative office under two separate operating leases expiring in December 2017 and March 2022. A second manufacturing facility is leased on a month to month basis. Total rent expense, including common area maintenance costs, was $383,029 and $387,159 during the years ended December 31, 2016 and 2015, respectively. Operating lease commitments for the next 5 years are as follows: For the year ending December 31: 2017 $ 338,862 2018 $ 226,422 2019 $ 230,685 2020 $ 235,023 2021 $ 240,081

RETIREMENT PLAN

RETIREMENT PLAN	12 Months Ended
	Dec. 31, 2016
Retirement Plan
RETIREMENT PLAN	NOTE 18 — RETIREMENT PLAN We maintain a defined-contribution 401(k) retirement plan covering substantially all employees (as defined by our Plan Document). Employees may make voluntary contributions to the plan, subject to limitations based on IRS regulations and compensation. The plan allows for an employer match contribution. The employer match expense was $78,005 and $93,582 for the years ended December 31, 2016 and 2015, respectively.

LETTER OF CREDIT

LETTER OF CREDIT	12 Months Ended
	Dec. 31, 2016
Letter Of Credit
LETTER OF CREDIT	NOTE 19 — LETTER OF CREDIT We are required by one of our lease agreements to maintain a letter of credit of approximately $190,000 through February 2022. To support this letter of credit, we are required to maintain an equivalent cash deposit. As of December 31, 2016, there were no amounts outstanding on the letter of credit. The cash deposit is restricted and classified as a non-current asset. As of December 31, 2016 and 2015, the cash deposit for the letter of credit was $195,499 and $195,206, respectively.

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	12 Months Ended
	Dec. 31, 2016
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	NOTE 20 — SUBSEQUENT EVENTS We are extending our IPO offering being conducted pursuant to a Registration Statement on S-1 (Registration No. 333-209131) (the “Registration Statement”). Pursuant to Post-Effective Amendment No. 3 to the Registration Statement, filed with the U.S. Securities and Exchange Commission (the “SEC”) on January 10, 2017, the Offering will terminate on April 13, 2017 without an extension. Per SEC Rule 415(a)(1)(ix), we are choosing to file an extension which will allow us to continue our IPO to a date not later than April 13, 2019. A post-effective amendment to the Registration Statement will be filed after the filing date of this report and before April 13, 2017.

SUMMARY OF SIGNIFICANT ACCOUN27

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	12 Months Ended
	Dec. 31, 2016
Accounting Policies [Abstract]
Use of Estimates	Use of Estimates US GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, together with amounts disclosed in the related notes to the consolidated financial statements. Actual results and outcomes may differ from management’s estimates, judgments and assumptions. Significant estimates, judgments and assumptions used in these consolidated financial statements include, but are not limited to, those related to revenues, accounts receivable and related allowances, contingencies, useful lives and recovery of long-term assets, income taxes, and the fair values of stock-based compensation, warrants, and derivative financial instrument liabilities. These estimates, judgments, and assumptions are reviewed periodically and the effects of material revisions in estimates are reflected in the financial statements prospectively from the date of the change in estimate.
Revenue Recognition	Revenue Recognition We recognize revenues when (a) the price is fixed or determinable, (b) persuasive evidence of a sales arrangement exists, (c) the service is performed or delivery has occurred and (d) collectability of the resulting receivable is reasonably assured. We recognize product revenues when products are shipped to customers. At that time, product ownership and risk have transferred to the customer and we have no further obligations. We record product sales at net selling prices that are reflective of discounts and allowances. Shipping and handling costs are recorded as a component of direct costs, as are shipping and handling costs billed to customers. Revenue related to licensing agreements is recorded upon substantial performance of the terms of the licensing contract. In the case of licensing arrangements that involve up-front payments, revenue is recorded when management determines that the appropriate terms of the contract have been fulfilled. For example, this may occur when technology has been transferred via written documents or, if training is involved, whenever all contracted training has occurred. In the case of licenses where product delivery is also embedded in the deliverable, a portion of revenue would be recognized when products are delivered. In the case of licensing arrangements that involve ongoing royalties based on sales of products produced with our technology, royalty income is recorded when received or, in the case of minimum royalties due, in the period when due. Grant contract revenue is recognized over the life of the contracts as the services are performed. Amounts received in excess of revenues earned are recorded as deferred revenue.
Cost of Products Sold	Cost of Products Sold We use a standard cost system to estimate the direct costs of products sold. Direct costs include estimates of raw material costs, packaging, freight charges net of those billed to customers, and an allocation for direct labor and manufacturing overhead. Because of the nature of our production processes, there is a substantial fixed manufacturing expense requirement that represents the ongoing cost of maintaining production facilities that are not directly related to products sold, so we use a “full capacity” allocation of overhead based on an estimate of what product costs would be if the manufacturing facilities were operating on a full-time basis and producing products at the designed capacity. This estimate involves estimating both the level of expenses as well as production amounts as if the manufacturing facility were operating on a continuous, three-shift, production basis. The remaining costs of operating the Company’s manufacturing facilities are recorded as Unallocated Manufacturing Expenses. Manufacturing expense includes the costs of operating our manufacturing facilities including personnel costs, rent, utilities, indirect supplies, depreciation, and related indirect expenses. Manufacturing expenses are expensed as incurred.
Research and Development	Research and Development Research and development expenses include the compensation costs of research personnel, laboratory rent and utilities, depreciation of laboratory equipment, travel and laboratory supplies and are expensed as incurred.
General and Administrative Expense	General and Administrative Expense General and administrative expenses include the compensation costs of personnel, rent, utilities, supplies, travel, depreciation of office equipment, and related expenses not included in other expense categories. General and administrative expenses also include non-cash compensation expenses related to the Company’s deferred compensation, management incentive bonus, and employee stock option programs.
Sales and Marketing Expense	Sales and Marketing Expense Sales and marketing costs include compensation, travel, and business development expenses including free samples provided to customers. These costs are expensed as incurred. Product marketing allowances are recorded at the estimated out of pocket cost necessary to produce the product in the period the allowance is granted. Advertising costs are expensed at the time they are incurred and were not material for the years ended December 31, 2016 and 2015.
Income Taxes	Income Taxes It is our policy to provide for uncertain tax positions and the related interest and penalties based upon management’s assessment of whether a tax benefit is more likely than not to be sustained upon examination by tax authorities. To the extent that the probable tax outcome of these uncertain tax position changes, such changes in estimate will impact the income tax provision in the period in which such determination is made. At December 31, 2016, we believe we have appropriately accounted for any unrecognized tax benefits. We are not aware of any uncertain tax positions. To the extent we prevail in matters for which a liability for an unrecognized tax benefit is established or we are required to pay amounts in excess of the liability, our effective tax rate in a given financial statement period may be affected. We account for income taxes using an asset and liability approach. The difference between the financial statement and tax basis of assets and liabilities is determined annually. Deferred income tax assets and liabilities are computed for those differences that have future tax consequences using the currently enacted tax laws and rates that apply to the periods in which they are expected to affect taxable income. Income tax expense is the current tax payable or refundable for the period plus or minus the net change in the deferred tax assets and liabilities. The deferred tax effects of state and local income taxes are considered immaterial and have not been recorded. Valuation allowances are established, if necessary, to reduce deferred tax assets to the amount that is estimated to be realized. Because of the uncertainty related to future realization of deferred tax assets (see Note 14), we have established a valuation allowance equal to one hundred percent of the deferred tax assets.
Net Income (Loss) Per Common Share	Net Income (Loss) Per Common Share We compute net income or (loss) per share in accordance with Financial Accounting Standards Board (“FASB”) Accountings Standards Codification (“ASC”) Topic 260: Earnings Per Share. Under the provisions of ASC 260, basic net income (loss) per share is computed by dividing the net income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted net loss per share is computed using the weighted average number of shares outstanding during the applicable period, plus the effect of potentially dilutive securities. Potentially dilutive securities consist of shares potentially issuable pursuant to stock options and warrants as well as shares that would result from full conversion of all outstanding convertible securities. These potentially dilutive securities were 3,594,582 and 2,857,839 as of December 31, 2016 and 2015 and are excluded from diluted net loss per share calculations because they are anti-dilutive. As a result, for the years ended December 31, 2016 and 2015, basic and diluted net loss per share was the same.
Accounts Receivable and Allowance for Doubtful Accounts	Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are stated at the amount management expects to collect from outstanding balances. Management provides for probable uncollectible amounts through a provision for bad debt expense and an adjustment to a valuation allowance based on their assessment of the current status of individual accounts. Balances that are still outstanding after management has used reasonable collection efforts are written off through a charge to the allowance account and a credit to accounts receivable.
Statements of Cash Flows	Statements of Cash Flows For the purposes of the statements of cash flows, we consider all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.
Fair Value of Financial Instruments and Concentrations of Credit Risk	Fair Value of Financial Instruments and Concentrations of Credit Risk Financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of cash and accounts receivable. The Company places its cash with FDIC insured financial institutions. Although such balances may exceed the federally insured limits at certain times, in the opinion of management they are subject to minimal risk. The Company has established policies for extending credit to customers based upon factors including the customers’ credit worthiness, historical trends and other information. Nonetheless the collectability of accounts receivable is affected by regional economic conditions and other factors.
Inventory	Inventory Inventory consists of raw materials, work-in-process and finished goods, all of which are valued at standard cost, which approximates average cost.
Property and Equipment	Property and Equipment Property and equipment are recorded at cost, net of accumulated depreciation and amortization. Property and equipment generally includes purchases of items with a cost greater than $3,000 and a useful life greater than one year. Depreciation and amortization are computed on the straight line basis over the estimated useful lives of the assets. Leasehold improvements are amortized over the shorter of the related lease terms or their estimated useful lives. We periodically review the estimated useful lives of property and equipment. Changes to the estimated useful lives are recorded prospectively from the date of the change. Upon retirement or sale, the cost of the assets disposed of and the related accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the statement of operations. Repairs and maintenance costs are expensed as incurred.
Recoverability and Impairment of Long-Lived Assets	Recoverability and Impairment of Long-Lived Assets We review our long-lived assets for recoverability if events or changes in circumstances indicate the assets may be impaired. This circumstance exists when the carrying amount of the asset exceeds the sum of the undiscounted cash flows expected to result from its use and eventual disposition. At December 31, 2016, we believe the carrying value of our long-lived assets is recoverable.
Intangible Assets	Intangible Assets We have entered into a License Agreement with Michigan State University under which we have licensed certain intellectual property in the form of patents and patent applications and invention disclosures. We are responsible for managing the patent process and ongoing filings for this licensed intellectual property and for bearing the cost thereof. We capitalize all costs related to the acquisition and ongoing administration of this License Agreement and we amortize these costs over 15 years or the remaining life of the License Agreement, whichever is shorter. In addition to the costs of managing in-licensed intellectual property, we also file for patent protection for inventions and other intellectual property generated by our employees. All patents are evaluated for filing in international markets on a case-by-case basis, and are filed in the United States and in selected international markets as considered appropriate. All external legal and filing costs related to patent applications, patent filings, ongoing registrations, overseas filings, and legal opinions related thereto are capitalized as intangible assets at cost and amortized over a period of 15 years from the date incurred, or the remaining useful life of the associated patent, whichever is shorter. The cost of royalties or minimum payments specified under the license agreement for in-licensed technology is expensed as incurred. We have also out-licensed certain of our intellectual property to licensees under terms and conditions of license agreements that specify the intellectual property licensed, the territory, and the type of license. In exchange for these licenses, we have recorded revenues associated with the initial granting of the license and expect to receive royalties based on sales of products produced under these licenses. License revenues are recorded to reflect our performance of requirements under these license agreements. In addition, we record royalty revenues from licensees at the time they are earned. Our intangible assets are assessed for impairment on an annual basis. As part of this process, we take into account the cash flows which we have received from licensing certain of our intellectual property as well as our plans to continue licensing our intellectual property as part of our ongoing business model.
Incentive Refund	Incentive Refund As of December 31, 2016 and 2015, we had $165,635 and $86,000 of incentive refunds due from the Michigan Economic Growth Authority under a five-year agreement signed on January 19, 2011. These incentive payments are awarded annually based on a pre-determined formula relating to the number of jobs created, average compensation, and total payroll and benefits for jobs created by XG Sciences in Michigan. These refunds are paid in cash during the year following the refund period. There is no requirement to have taxable income to receive these incentive payments.
Stock-Based Compensation	Stock-Based Compensation We recognize compensation expense in our statement of operations for all share-based option and stock awards, based on estimated grant-date fair values. We estimate the grant-date fair value of stock-based compensation awards using the Black-Scholes option valuation model. This model is affected by the estimated value of our common stock on the date of the grant as well as assumptions regarding a number of highly complex and subjective variables. These variables include the expected term of the option, the exercise price, expected risk-free rates of return, the expected volatility of our common stock, and expected dividend yield, each of which is more fully described below. The assumptions for the estimated value of our common stock, expected term and expected volatility are the assumptions that most significantly affect the grant date fair value. Estimated Value of our Common Stock:  Audit and Accounting Practice Aid Series: Valuation of Privately Held Company Equity Securities Issued as Compensation Expected Term Risk-free Interest Rate Expected Stock Price Volatility Dividend Yield The grant-date fair value of the award is recognized as expense over the requisite service period using the straight-line method.
Fair Value Measurements	Fair Value Measurements FASB ASC 820: “Fair Value Measurements and Disclosures” defines fair value as the exchange price 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. ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value: Level 1 Level 2 Level 3 A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Our derivative liabilities are classified as Level 3 within the fair value hierarchy because they were valued using other unobservable inputs. The valuation technique used to measure fair value of the derivative liabilities is based on a lattice model with significant assumptions and inputs determined by the Company. A lattice model was used to estimate the fair value of the derivative liabilities because management believes it reflects all the assumptions that market participants would likely consider including early exercise of the warrants. The fair value of the derivative liabilities will be significantly influenced by the fair value of our common stock, stock price volatility and the risk-free interest components of the lattice technique. The following is a reconciliation of the beginning and ending balances for liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the years ended December 31, 2016 and 2015: 2016 2015 Balance at January 1 $ 8,235,163 $ 5,000,752 Warrants issued with private placement of Series B Preferred Stock — 660,378 Warrants issued with preferred stock sold under preemptive rights — 7,881 Warrants issued with bridge financing — 52,676 Warrants reclassified to equity (51,418 ) — (Gain) Loss recognized in earnings (283,496 ) 2,513,476 Balance at December 31 $ 7,900,249 $ 8,235,163
Derivative Financial Instruments	Derivative Financial Instruments We do not use derivative instruments to hedge exposures to cash flow, market or foreign currency risk. The terms of convertible preferred stock and convertible notes that we issue are reviewed to determine whether or not they contain embedded derivative instruments that are required by ASC 815: “Derivatives and Hedging” to be accounted for separately from the host contract, and recorded at fair value. In addition, freestanding warrants are also reviewed to determine if they achieve equity classification. Certain stock warrants that we have issued did not meet the conditions for equity classification and are classified as derivative instrument liabilities measured at fair value. The fair values of these derivative liabilities are revalued at each reporting date, with the change in fair value recognized in earnings. See Note 9 for additional information.
Beneficial Conversion Feature of Preferred Stock	Beneficial Conversion Feature of Preferred Stock Equity instruments that contain a Beneficial Conversion Feature (BCF) are recorded as a deemed dividend to the holders of the convertible equity instruments. The deemed dividend amount is recorded as an increase to additional paid-in capital. For the year ended December 31, 2015, we recorded a deemed dividend of $2,214,856 related to the adjustment of the conversion price of the Series A Preferred Stock from $12.00 to $6.40 per share. This resulted in a BCF due to the new conversion price being lower than the value of the underlying common stock. See Note 9 for additional information related to the BCF resulting from our Series A Preferred Stock.
Recent Accounting Pronouncements	Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update No. 2014-09, Revenue From Contracts With Customers In August 2014, FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern In April 2015, the FASB issued ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs On February 24, 2016, the FASB issued ASU No. 2016-02, Leases, requiring lessees to recognize a right-of-use asset and a lease liability on the balance sheet for all leases with the exception of short-term leases. For lessees, leases will continue to be classified as either operating or finance leases in the income statement. Lessor accounting is similar to the current model but updated to align with certain changes to the lessee model. Lessors will continue to classify leases as operating, direct financing or sales-type leases. The effective date of the new standard for public companies is for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Early adoption is permitted. The new standard must be adopted using a modified retrospective transition and requires application of the new guidance at the beginning of the earliest comparative period presented. We are currently evaluating the effect that the updated standard will have on our consolidated financial statements and related disclosures. On March 30, 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting, which simplifies various aspects related to the accounting and presentation of share-based payments. The amendments require entities to record all tax effects related to share-based payments at settlement or expiration through the income statement and the windfall tax benefit to be recorded when it arises, subject to normal valuation allowance considerations. All tax-related cash flows resulting from share-based payments are required to be reported as operating activities in the statement of cash flows. The updates relating to the income tax effects of the share-based payments including the cash flow presentation must be adopted either prospectively or retrospectively. Further, the amendments allow the entities to make an accounting policy election to either estimate forfeitures or recognize forfeitures as they occur. If an election is made, the change to recognize forfeitures as they occur must be adopted using a modified retrospective approach with a cumulative effect adjustment recorded to opening retained earnings. The effective date of the new standard for public companies is for fiscal years beginning after December 15, 2016 and interim periods within those fiscal years. Early adoption is permitted. We believe the adoption of this standard will have no material impact on our consolidated statements of financial position, results of operations or cash flows. In July 2015, the FASB issued ASU No. 2015-11, (“ASU 2015-11”), Inventory (Topic 330): Simplifying the Measurement of Inventory. ASU 2015-11 requires an entity to measure in scope inventory at the lower of cost and net realizable value. The amendment does not apply to inventory that is measured using last-in, first-out or the retail inventory method. For public entities, ASU 2015-11 is effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years, and is to be applied prospectively. We do not expect the adoption of this standard will have a material effect on our consolidated statements of financial position, results of operations, or cash flows. With the exception of the standards discussed above, we believe there have been no new accounting pronouncements effective or not yet effective that have significance, or potential significance, to our Consolidated Financial Statements.
JOBS Act	JOBS Act In April 2012, the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, was enacted. Section 107 of the JOBS Act provides that an “emerging growth company,” or EGC, can take advantage of the extended transition period for complying with new or revised accounting standards. Thus, an EGC can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have irrevocably elected not to avail ourselves of this extended transition period and, as a result, we will adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for other public companies. We are in the process of evaluating the benefits of relying on other exemptions and reduced reporting requirements under the JOBS Act. Subject to certain conditions, as an EGC, we intend to rely on certain of these exemptions, including exemptions from the requirement to provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act and from any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements, known as the auditor discussion and analysis. We will remain an EGC until the earlier of: the last day of the fiscal year in which we have total annual gross revenues of $1.0 billion or more; the last day of the fiscal year following the fifth anniversary of the date of the completion of our IPO; the date on which we have issued more than $1.0 billion in nonconvertible debt during the previous three years; or the date on which we are deemed to be a large accelerated filer under the rules of the SEC.

SUMMARY OF SIGNIFICANT ACCOUN28

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)	12 Months Ended
	Dec. 31, 2016
Accounting Policies [Abstract]
Schedule of liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3)	The following is a reconciliation of the beginning and ending balances for liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the years ended December 31, 2016 and 2015: 2016 2015 Balance at January 1 $ 8,235,163 $ 5,000,752 Warrants issued with private placement of Series B Preferred Stock — 660,378 Warrants issued with preferred stock sold under preemptive rights — 7,881 Warrants issued with bridge financing — 52,676 Warrants reclassified to equity (51,418 ) — (Gain) Loss recognized in earnings (283,496 ) 2,513,476 Balance at December 31 $ 7,900,249 $ 8,235,163

INVENTORY (Tables)

INVENTORY (Tables)	12 Months Ended
	Dec. 31, 2016
Inventory Tables
Schedule of inventory	The following amounts were included in inventory at the end of the period: Year Ended December 31 2016 2015 Raw materials $ 45,964 $ 46,660 Finished goods 160,009 182,374 Total $ 205,973 $ 229,034

PROPERTY, PLANT AND EQUIPMENT (

PROPERTY, PLANT AND EQUIPMENT (Tables)	12 Months Ended
	Dec. 31, 2016
Property Plant And Equipment Tables
Schedule of property, plant and equipment	Property, plant and equipment as of December 31 consist of the following: Depreciable 2016 2015 Plant and equipment not yet placed in service $ 49,200 $ 49,200 Leasehold improvements 5-10 399,060 399,060 Lab equipment 3-7 871,512 871,512 Production and other equipment 3-7 5,809,937 5,835,226 Software 3 39,144 39,144 7,168,853 7,194,142 Less accumulated depreciation and amortization (4,282,432 ) (3,440,894 ) Net property, plant and equipment $ 2,886,421 $ 3,753,248
Schedule of property and equipment under capital leases	Property and equipment under capital leases included above consists of the following at December 31: 2016 2015 Lab equipment $ 73,202 $ 160,202 Production and other equipment 991,887 986,230 1,065,089 1,146,432 Less accumulated depreciation (386,314 ) (297,336 ) Net property, plant and equipment under capital leases $ 678,775 $ 849,096

INTANGIBLE ASSETS (Tables)

INTANGIBLE ASSETS (Tables)	12 Months Ended
	Dec. 31, 2016
Intangible Assets Tables
Schedule of Intangible assets and related accumulated amortization	Intangible assets and related accumulated amortization as of December 31, 2016 and 2015 are as follows: Carrying Less Net Carrying Licenses $ 137,533 $ (75,140 ) $ 62,393 Patents 481,733 (69,526 ) 412,207 Trademarks, other intangibles 5,698 (2,279 ) 3,419 Balance, December 31, 2016 $ 624,964 $ (146,945 ) $ 478,019 Licenses $ 137,533 $ (65,522 ) $ 72,011 Patents 383,496 (47,524 ) 335,972 Trademarks, other intangibles 5,698 (1,892 ) 3,806 Balance, December 31, 2015 $ 526,727 $ (114,938 ) $ 411,789

ACCOUNTS PAYABLE AND OTHER CU32

ACCOUNTS PAYABLE AND OTHER CURRENT LIABILITIES (Tables)	12 Months Ended
	Dec. 31, 2016
Accounts Payable And Other Current Liabilities Tables
Schedule of accounts payable and other current liabilities	As of December 31, 2016 and 2015, our accounts payable and other current liabilities consisted of the following: 2016 2015 Accounts payable $ 731,518 $ 404,146 Accrued compensation 144,134 186,665 Accrued expenses 11,100 12,900 401(k) employer contribution expense 78,005 100,466 Accounts payable and other liabilities $ 964,757 $ 704,177

SECURED CONVERTIBLE NOTES, WA33

SECURED CONVERTIBLE NOTES, WARRANTS AND FINANCING AGREEMENTS (Tables)	12 Months Ended
	Dec. 31, 2016
Secured Convertible Notes Warrants And Financing Agreements Tables
Schedule of convertible notes	The following table reflects the outstanding balances of the Notes on the date of conversion: AAOF XGS II KNOX SAMSUNG Total Face value of notes at issuance $ 9,000,000 $ 1,000,000 $ 700,000 $ 3,000,000 $ 13,700,000 Accrued interest on face value 2,520,232 310,068 166,721 776,519 3,773,540 Amount due – December 31, 2015 $ 11,520,232 $ 1,310,068 $ 866,721 $ 3,776,519 $ 17,473,540 Shares of Series A Convertible Preferred Stock Issued 960,019 109,172 72,226 314,709 1,456,126
Schedule of liabilities at fair value	The proceeds of the financing were allocated first to the derivative liabilities resulting from the Stock Warrants, at their fair value, with the residual allocated to the debt instrument as follows: 2015 2016 Total Derivative liabilities- warrants $ 52,676 $ 550,691 $ 603,367 Bridge Financing Notes 497,324 24,059 521,383 Total allocated proceeds $ 550,000 $ 574,750 $ 1,124,750

PRIVATE PLACEMENT AND PREEMPT34

PRIVATE PLACEMENT AND PREEMPTIVE RIGHTS (Tables)	12 Months Ended
	Dec. 31, 2016
Private Placement And Preemptive Rights Tables
Schedule of derivative liabilities	The cash proceeds from the private placement were allocated first to the derivative liabilities resulting from the Stock Warrants, at their fair values. There was no BCF present so the residual was allocated to the Series B Preferred Stock, as follows: Allocation Derivative liabilities – warrants $ 660,378 Series B Preferred Stock 3,609,814 Total allocated proceeds $ 4,270,192
Schedule of fair value of the warrants	The initial fair value of the warrants was estimated using a binomial lattice model with the following assumptions: Fair value of underlying stock $12.00 Equivalent risk free interest rate 0.91% – 1.03% Expected term (in years) 7.00 Equivalent stock price volatility 30.47% – 31.22% Expected dividend yield —

DERIVATIVE LIABILITY WARRANTS (

DERIVATIVE LIABILITY WARRANTS (Tables)	12 Months Ended
	Dec. 31, 2016
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Schedule of shares indexed to derivative liabilities	Shares indexed to derivative liabilities as of December 31, 2016 and 2015 were as follows: Type of shares Exercise Price 2016 2015 Warrants issued with Secured Convertible Notes Series A PS $ 6.40 833,333 833,333 Warrants issued with equipment financing leases Series A PS $ 6.40 83,333 83,333 Warrants issued with Series A preemptive rights Series A PS $ 6.40 56,054 56,054 Warrants issued with Series B preemptive rights Common $ 16.00 2,635 2,635 Warrants issued with Series B Units Common $ 16.00 222,262 222,262 Warrants issued with Bridge Financings Common $ 8.00 — 20,625 Total shares indexed to derivative liabilities 1,197,617 1,218,242
Schedule of fair value of derivative liabilities	The following table summarizes the fair value of the derivative liabilities as of December 31, 2016 and 2015: 2016 2015 Warrants issued with Secured Convertible Notes $ 6,554,160 $ 6,743,997 Warrants issued with equipment financing leases 655,418 674,397 Warrants issued with preemptive rights 443,790 457,265 Warrants issued with 2015 Series B Units 246,881 306,828 Warrants issued with Bridge Financings — 52,676 Total derivative liabilities $ 7,900,249 $ 8,235,163
Schedule of warrant derivative liabilities	The Company estimated the fair value of their warrant derivative liabilities as of December 31, 2016 and December 31, 2015, using a lattice model and the following assumptions: 2016 2015 Fair value of underlying stock $7.63 – $12.64 $7.63 – $12.64 Equivalent risk free interest rate 1.27% – 1.46% 1.06% – 1.39% Expected term (in years) 5.33 – 7.04 5.01 – 8.05 Equivalent stock price volatility 37.44% – 37.92% 38.00% – 38.61% Expected dividend yield — —
Schedule of change in fair value of derivative liability - warrants	Changes in the fair value of Derivative Liabilities, carried at fair value, are reported as “Change in fair value of derivative liability — warrants” in the Statement of Operations, and were as follows: Year ended December 31, 2016 2015 Warrants issued with Secured Convertible Notes $ 189,837 $ (2,459,830 ) Warrants issued with equipment financing leases 18,979 (245,986 ) Warrants issued with preemptive rights 13,475 (161,211 ) Warrants issued with 2015 Series B Units 59,947 353,551 Warrants issued with Bridge Financings 1,258 — Total Derivative Gain (Loss) $ 283,496 $ (2,513,476 )

INCENTIVE STOCK OPTION PLAN (Ta

INCENTIVE STOCK OPTION PLAN (Tables)	12 Months Ended
	Dec. 31, 2016
Incentive Stock Option Plan Tables
Schedule of stock option activity	The following table shows the stock option activity during the years ended December 31, 2016 and 2015: 2016 2015 Number Weighted Number Weighted Options outstanding at beginning of year 419,750 $ 12.00 464,750 $ 12.05 Changes during the year: Granted – at market price — 12.00 30,000 12.00 Expired (50,000 ) 13.20 (75,000 ) 12.00 Options outstanding at end of year 369,750 11.89 419,750 12.04 Options exercisable at end of year 268,565 11.86 190,080 12.00 Weighted average fair value exercise price of options granted during the year $ 0 $ 12.00
Schedule of non-exercisable options	The following table presents changes in the number of non-exercisable options during 2016: Non-exercisable options Number Weighted Average Total non-exercisable options outstanding – December 31, 2015 229,670 $ 12.08 Options cancelled (35,000 ) $ 13.20 Options vested (93,485 ) $ 12.00 Total non-exercisable options outstanding – December 31, 2016 101,185 $ 12.00
Schedule of Black-Scholes option-pricing model	The fair value of the options granted in 2015 was estimated on the grant date using the Black-Scholes option-pricing model with the following assumptions: 2015 Fair value of underlying stock $7.63 Expected option life 5.00 years – 5.18 years Expected stock price volatility 36.12% – 36.36% Risk free interest rate 1.35% Expected dividend yield 0.00%
Schedule of options outstanding	The following table presents summary information concerning the options outstanding as of December 31, 2016: Exercise prices Number Number Weighted $ 8.00 10,000 10,000 .92 $ 12.00 359,750 258,565 4.92 369,750 268,565 5.84

STOCK WARRANTS (Tables)

STOCK WARRANTS (Tables)	12 Months Ended
	Dec. 31, 2016
Stock Warrants Tables
Schedule of warrants outstanding	The following table summarizes the warrants outstanding at December 31, 2016, all of which are exercisable: Date Issued Expiration Date Exercise Price Number of 7/1/2009 7/1/2019 $ 8.00 6,000 10/8/2012 10/8/2027 $ 12.00 5,000 11,000

CAPITAL LEASES (Tables)

CAPITAL LEASES (Tables)	12 Months Ended
	Dec. 31, 2016
Capital Leases of Lessee [Abstract]
Schedule of capital lease obligations	As of December 31, 2016 and 2015, we have capital lease obligations to AAOF (see Note 7) and other lessors as follows: December 31, December 31, Capital lease obligations $ 449,368 $ 682,564 Unamortized warrant discount (65,595 ) (149,594 ) Net obligations 383,773 532,970 Short-term portion of obligations (268,667 ) (178,487 ) Long-term portion of obligations $ 115,106 $ 354,483
Schedule of future minimum lease payments	Future minimum lease payments under capital lease obligations are as follows: For the year ending December 31: 2017 $ 362,184 2018 140,148 Total future minimum lease payments 502,332 Less amount representing interest (118,559 ) Present value of future minimum lease payments 383,773 Less current maturities (268,667 ) Obligations under capital leases – long term $ 115,106

INCOME TAXES (Tables)

INCOME TAXES (Tables)	12 Months Ended
	Dec. 31, 2016
Income Taxes Tables
Schedule of deferred tax assets liabilities	Deferred tax assets (liabilities) consist of the following at December 31: 2016 2015 Current: Other temporary differences $ 75,000 $ 10,000 Non-current: Net operating loss carry forwards 12,985,000 9,955,000 Tax depreciation in excess of book depreciation (230,000 ) (220,000 ) Research and development credits 560,000 490,000 Net deferred tax asset 13,390,000 10,235,000 Deferred tax valuation allowance (13,390,000 ) (10,235,000 ) Net deferred tax asset $ — $ —
Schedule of statutory income tax rate	Below is a reconciliation of the statutory federal income tax rate to our effective tax rate for the fiscal years ended December 31, 2016 and 2015: 2016 2015 Federal tax provision 34.0 % 34.0 % State tax provision 6.0 % 6.0 % Valuation allowance (40.0 )% (40.0 )% 0.0 % 0.0 %

RELATED PARTY TRANSACTIONS AN40

RELATED PARTY TRANSACTIONS AND COMMITMENTS (Tables)	12 Months Ended
	Dec. 31, 2016
Related Party Transactions And Commitments Tables
Schedule of purchased the number of shares	During the period from June - December 2016, Mr. Allemang, Jones and Pendell and certain of their affiliates invested the following amounts into our IPO and purchased the number of shares indicated. Purchase Dates Amount Invested Shares Purchased Arnold Allemang and affiliates June 23 – 28 and Sept. 30 $ 965,000 120,625 Steven C. Jones and affiliates June 24 – 27 $ 748,000 93,500 David G. Pendell and affiliates June 27 and Dec. 5 $ 100,032 12,504 Total $ 1,813,032 226,629

OPERATING LEASES (Tables)

OPERATING LEASES (Tables)	12 Months Ended
	Dec. 31, 2016
Operating Leases Tables
Schedule of operating lease commitments	Operating lease commitments for the next 5 years are as follows: For the year ending December 31: 2017 $ 338,862 2018 $ 226,422 2019 $ 230,685 2020 $ 235,023 2021 $ 240,081

NATURE OF BUSINESS AND BASIS 42

NATURE OF BUSINESS AND BASIS OF PRESENTATION (Details Narrative)	Nov. 01, 2016USD ($)	Dec. 31, 2016USD ($)Number	Mar. 28, 2017USD ($)	Dec. 31, 2015USD ($)	Dec. 31, 2014USD ($)
Number of reportable segments | Number		1
Cash on hand		$ 1,785,343		$ 1,060,224	$ 2,088,866
Face amount				$ 13,700,000
Amount of additional fund raise		1,000,000
Total financial projections		15,000,000
Draw Loan Note And Agreement [Member] | Senior Secured Debt Financing [Member]
Face amount		3,000,000
Proceeds from secured debt		$ 5,000,000
Additional equity capital	$ 10,000,000
Subsequent Event [Member]
Cash on hand			$ 1,138,157

SUMMARY OF SIGNIFICANT ACCOUN43

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - Significant Unobservable Inputs (Level 3) [Member] - Recurring [Member] - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]
Balance at beginning	$ 8,235,163	$ 5,000,752
Gain recognized in earnings	(283,496)	2,513,476
Balance at ending	7,900,249	8,235,163
Warrant [Member]
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]
Warrants issued	(51,418)
Warrant [Member] | Preferred stock (B) [Member] | Private Placement [Member]
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]
Warrants issued		660,378
Warrant [Member] | Preemptive Rights [Member] | Preferred Stock [Member]
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]
Warrants issued		7,881
Bridge Financings [Member]
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]
Warrants issued		$ 52,676

SUMMARY OF SIGNIFICANT ACCOUN44

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Potentially dilutive securities	3,594,582	2,857,839
Incentive refunds receivable	$ 165,635	$ 86,000
Dividend yield	0.00%	0.00%
Preferred stock (A) [Member]
Beneficial conversion feature	$ 2,214,856
Michigan Economic Growth Authority [Member]
Incentive refunds receivable	$ 165,635	$ 86,000
Agreement term	5 years
Patents [Member]
Amortization period of intangible assets	15 years
Leasehold Improvements [Member]
Description of useful life	Shorter of the related lease terms or their estimated useful lives.
Minimum [Member]
Property and equipment	$ 3,000
Useful life of property and equipment	1 year
Revenues	$ 1,000,000,000
Minimum [Member] | Preferred stock (A) [Member]
Conversion price (in dollars per share)	$ 12
Minimum [Member] | Leasehold Improvements [Member]
Useful life of property and equipment	5 years
Maximum [Member] | Preferred stock (A) [Member]
Conversion price (in dollars per share)	$ 6.40
Maximum [Member] | Leasehold Improvements [Member]
Useful life of property and equipment	10 years

INVENTORY (Details)

INVENTORY (Details) - USD ($)	Dec. 31, 2016	Dec. 31, 2015
Inventory Details
Raw materials	$ 45,964	$ 46,660
Finished goods	160,009	182,374
Total	$ 205,973	$ 229,034

PROPERTY, PLANT AND EQUIPMENT46

PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Gross property, plant and equipment	$ 7,168,853	$ 7,194,142
Less accumulated depreciation and amortization	(4,282,432)	(3,440,894)
Net property, plant and equipment	$ 2,886,421	3,753,248
Minimum [Member]
Depreciable life	1 year
Plant and Equipment Not Yet Placed in Service [Member]
Gross property, plant and equipment	$ 49,200	49,200
Leasehold Improvements [Member]
Gross property, plant and equipment	$ 399,060	399,060
Leasehold Improvements [Member] | Minimum [Member]
Depreciable life	5 years
Leasehold Improvements [Member] | Maximum [Member]
Depreciable life	10 years
Lab Equipment [Member]
Gross property, plant and equipment	$ 871,512	871,512
Lab Equipment [Member] | Minimum [Member]
Depreciable life	3 years
Lab Equipment [Member] | Maximum [Member]
Depreciable life	7 years
Production and Other Equipment [Member]
Gross property, plant and equipment	$ 5,809,937	5,835,226
Production and Other Equipment [Member] | Minimum [Member]
Depreciable life	3 years
Production and Other Equipment [Member] | Maximum [Member]
Depreciable life	7 years
Software [Member]
Gross property, plant and equipment	$ 39,144	$ 39,144
Depreciable life	3 years

PROPERTY, PLANT AND EQUIPMENT47

PROPERTY, PLANT AND EQUIPMENT (Details 1) - USD ($)	Dec. 31, 2016	Dec. 31, 2015
Gross property, plant and equipment	$ 7,168,853	$ 7,194,142
Less accumulated depreciation	(4,282,432)	(3,440,894)
Net property, plant and equipment	2,886,421	3,753,248
Lab Equipment [Member]
Gross property, plant and equipment	871,512	871,512
Production and Other Equipment [Member]
Gross property, plant and equipment	5,809,937	5,835,226
Capital Lease [Member]
Gross property, plant and equipment	1,065,089	1,146,432
Less accumulated depreciation	(386,314)	(297,336)
Net property, plant and equipment	678,775	849,096
Capital Lease [Member] | Lab Equipment [Member]
Gross property, plant and equipment	73,202	160,202
Capital Lease [Member] | Production and Other Equipment [Member]
Gross property, plant and equipment	$ 991,887	$ 986,230

PROPERTY, PLANT AND EQUIPMENT48

PROPERTY, PLANT AND EQUIPMENT (Details Narrative) - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Depreciation and amortization expense	$ 908,896	$ 964,382
Cost of goods sold	1,586,662	1,847,714
Research and development	1,124,165	1,485,283
Cost of Goods Sold [Member]
Cost of goods sold	756,029
Research and development		119,481
Research and Development [Member]
Cost of goods sold		783,153
General and administrative expenses	33,385
General and Administrative [Member]
Research and development	$ 146,970
General and administrative expenses		$ 34,259

INTANGIBLE ASSETS (Details)

INTANGIBLE ASSETS (Details) - USD ($)	Dec. 31, 2016	Dec. 31, 2015
Carrying Amount	$ 624,964	$ 526,727
Less Accumulated Amortization	(146,945)	(114,938)
Net Carrying Amount	478,019	411,789
Licensing [Member]
Carrying Amount	137,533	137,533
Less Accumulated Amortization	(75,140)	(65,522)
Net Carrying Amount	62,393	72,011
Patents [Member]
Carrying Amount	481,733	383,496
Less Accumulated Amortization	(69,526)	(47,524)
Net Carrying Amount	412,207	335,972
Trademarks and Other Intangible Assets [Member]
Carrying Amount	5,698	5,698
Less Accumulated Amortization	(2,279)	(1,892)
Net Carrying Amount	$ 3,419	$ 3,806

INTANGIBLE ASSETS (Details Narr

INTANGIBLE ASSETS (Details Narrative) - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Intangible Assets Details Narrative
Amortization expense	$ 38,336	$ 30,261
Amortization expense year one	42,000
Amortization expense year two	42,000
Amortization expense year three	42,000
Amortization expense year four	42,000
Amortization expense year five	$ 42,000

ACCOUNTS PAYABLE AND OTHER CU51

ACCOUNTS PAYABLE AND OTHER CURRENT LIABILITIES (Details) - USD ($)	Dec. 31, 2016	Dec. 31, 2015
Accounts Payable And Other Current Liabilities Details
Accounts payable	$ 731,518	$ 404,146
Accrued compensation	144,134	186,665
Accrued expenses	11,100	12,900
401(k) employer contribution expense	78,005	100,466
Accounts payable and other liabilities	$ 964,757	$ 704,177

SECURED CONVERTIBLE NOTES, WA52

SECURED CONVERTIBLE NOTES, WARRANTS AND FINANCING AGREEMENTS (Details)	Dec. 31, 2015USD ($)shares
Face value of notes at issuance	$ 13,700,000
Accrued interest on face value	3,773,540
Amount due	$ 17,473,540
Preferred stock (A) [Member]
Shares of Series A Convertible Preferred Stock Issued | shares	1,456,126
Mr.Michael R. Knox [Member]
Face value of notes at issuance	$ 700,000
Accrued interest on face value	166,721
Amount due	866,721
Aspen Advance Opportunity Fund, LP [Member]
Face value of notes at issuance	9,000,000
Accrued interest on face value	2,520,232
Amount due	$ 11,520,232
Aspen Advance Opportunity Fund, LP [Member] | Preferred stock (A) [Member]
Shares of Series A Convertible Preferred Stock Issued | shares	960,019
XGS II, LLC [Member]
Face value of notes at issuance	$ 1,000,000
Accrued interest on face value	310,068
Amount due	$ 1,310,068
XGS II, LLC [Member] | Preferred stock (A) [Member]
Shares of Series A Convertible Preferred Stock Issued | shares	109,172
New Technology Business Investment L.L.P, a Subsidiary Samsung Group [Member]
Face value of notes at issuance	$ 3,000,000
Accrued interest on face value	776,519
Amount due	$ 3,776,519
New Technology Business Investment L.L.P, a Subsidiary Samsung Group [Member] | Preferred stock (A) [Member]
Shares of Series A Convertible Preferred Stock Issued | shares	314,709
Mr.Michael R. Knox [Member] | Preferred stock (A) [Member]
Shares of Series A Convertible Preferred Stock Issued | shares	72,226

SECURED CONVERTIBLE NOTES, WA53

SECURED CONVERTIBLE NOTES, WARRANTS AND FINANCING AGREEMENTS (Details 1) - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Derivative liabilities- warrants	$ 603,367
Bridge Financing Notes	521,383
Total allocated proceeds	1,124,750
Bridge Financings [Member]
Bridge Financing Notes	24,059	$ 497,324
Bridge Financings & Warrant [Member]
Total allocated proceeds	574,750	550,000
Warrant [Member]
Derivative liabilities- warrants	$ 550,691	$ 52,676

SECURED CONVERTIBLE NOTES, WA54

SECURED CONVERTIBLE NOTES, WARRANTS AND FINANCING AGREEMENTS (Details Narrative) - USD ($)	Jan. 15, 2014	Apr. 30, 2015	Dec. 31, 2016	Dec. 31, 2015	Jan. 02, 2015	Jul. 12, 2013	Mar. 18, 2013
Face amount				$ 13,700,000
Amount of lease financing			$ 383,773
Private Placement [Member]
Proceeds from private placement			$ 4,270,192
Warrant [Member]
Exercise price (in dollars per share)			$ 8
Warrant [Member] | Private Placement [Member]
Exercise price (in dollars per share)			$ 16
Proceeds from private placement			$ 660,378
Preferred stock (B) [Member] | Private Placement [Member]
Proceeds from private placement		$ 18,000,000	$ 3,609,814
Mr.Michael R. Knox [Member]
Face amount				$ 700,000
Mr.Michael R. Knox [Member] | Revolving Line of Credit [Member]
Face amount						$ 700,000
Lease Financing [Member] | Warrant [Member]
Number of warrants vested				83,334
12% Secured Convertible Notes Due March 18, 2018 [Member]
Maturity date	Mar. 18, 2018
Interest rate	12.00%
Description of interest payable terms	After December 31, 2014, the note holder had the option of receiving ongoing interest payments: 1) in cash; 2) in the form of Series A Preferred Stock at a price per share equal to the then-effective Series A Original Issue Price ($12 per share); 3) in the form of any other series of Preferred Stock outstanding at the time interest is due; or 4) they could elect to accrue the interest and add it to the balance of the Note.
Description of collateral	Notes are secured by all of the assets, both tangible and intangible, of the Company.
Unamortized discount				$ 5,100,000
Interest expense				$ 7,154,905
12% Secured Convertible Notes Due March 18, 2018 [Member] | Warrant [Member]
Number of warrants vested				833,332
12% Secured Convertible Notes Due March 18, 2018 [Member] | Preferred stock (A) [Member]
Conversion price (in dollars per share)	$ 12
12% Secured Convertible Notes Due March 18, 2018 [Member] | Mr.Michael R. Knox [Member]
Description of interest payable terms					Receive ongoing interest payments in cash.
Minimum [Member] | Warrant [Member]
Exercise price (in dollars per share)			$ 8
Minimum [Member] | Preferred stock (B) [Member] | Private Placement [Member]
Proceeds from private placement		$ 12,000,000
Description of conversion terms		i) the Company raising at least $12 million through the sale of securities or ii) December 31, 2015, contingent on the Company raising at least $2 million through the sale of securities by that date.
Maximum [Member] | Warrant [Member]
Exercise price (in dollars per share)			$ 12
Aspen Advance Opportunity Fund, LP [Member]
Face amount				$ 9,000,000
Amount of lease financing			$ 383,773	532,970
Aspen Advance Opportunity Fund, LP [Member] | Minimum [Member]
Face amount						6,000,000
Aspen Advance Opportunity Fund, LP [Member] | Maximum [Member]
Face amount				11,026,091		10,000,000
Aspen Advance Opportunity Fund, LP [Member] | Maximum [Member] | Lease Financing [Member]
Face amount						3,000,000
XGS II, LLC [Member]
Face amount				1,000,000
XGS II, LLC [Member] | Minimum [Member]
Face amount						250,000
XGS II, LLC [Member] | Maximum [Member]
Face amount	$ 1,000,000					$ 750,000
Aspen Advance Opportunity Fund, LP And XGS II, LLC [Member] | Lease Financing [Member]
Amount of lease financing				1,026,091
Aspen Advance Opportunity Fund, LP And XGS II, LLC [Member] | 12% Secured Convertible Notes Due March 18, 2018 [Member]
Face amount				10,000,000
Aspen Advance Opportunity Fund, LP And XGS II, LLC [Member] | 12% Secured Convertible Notes Due March 18, 2018 [Member] | Warrant [Member]
Warrant expiration date	Mar. 18, 2023
Aspen Advance Opportunity Fund, LP And XGS II, LLC [Member] | 12% Secured Convertible Notes Due March 18, 2018 [Member] | Preferred stock (A) [Member] | Warrant [Member]
Number of shares purchased	916,666						447,916
Exercise price (in dollars per share)	$ 12						$ 24
New Technology Business Investment L.L.P, a Subsidiary Samsung Group [Member]
Face amount				$ 3,000,000
New Technology Business Investment L.L.P, a Subsidiary Samsung Group [Member] | 12% Secured Convertible Notes Due March 18, 2018 [Member]
Face amount	$ 3,000,000
New Technology Business Investment L.L.P, a Subsidiary Samsung Group [Member] | 12% Secured Convertible Notes Due March 18, 2018 [Member] | Warrant [Member]
Description of warrant vesting	Vest in four installments on the first, second, third and fourth anniversary of the issuance of the Stock Warrants according to the following formula: On each anniversary, the warrant vests according to the ratio of total Samsung payments to us during the previous twelve-month period divided by 250. Thus, the warrants will vest proportionately in relation to the first $25 million, or fraction thereof, that Samsung pays, in cash, to us over the four years beginning January 15, 2014.
New Technology Business Investment L.L.P, a Subsidiary Samsung Group [Member] | 12% Secured Convertible Notes Due March 18, 2018 [Member] | Preferred stock (A) [Member] | Warrant [Member]
Number of shares purchased	100,000
Exercise price (in dollars per share)	$ 12
Warrant term	4 years

SECURED CONVERTIBLE NOTES, WA55

SECURED CONVERTIBLE NOTES, WARRANTS AND FINANCING AGREEMENTS (Details Narrative 1) - USD ($)	1 Months Ended			3 Months Ended	12 Months Ended
	Dec. 31, 2016	Jun. 30, 2016	May 31, 2015	Apr. 07, 2016	Dec. 31, 2016	Dec. 31, 2015
Short-term loan						$ 497,324
Number of common stock warrants issued					11,000
Face amount						$ 13,700,000
Warrant [Member]
Exercise price (in dollars per share)	$ 8				$ 8
Number of common stock warrants issued			1,400		6,000
Warrant [Member]
Exercise price (in dollars per share)	12				$ 12
Number of common stock warrants issued					5,000
Minimum [Member]
Strike price (in dollars per share)	7.63				$ 7.63	$ 7.63
Volatility					37.44%	38.00%
Risk free rate					1.27%	1.06%
Minimum [Member] | Warrant [Member]
Exercise price (in dollars per share)	8				$ 8
Maximum [Member]
Strike price (in dollars per share)	12.64				$ 12.64	$ 12.64
Volatility					37.92%	38.61%
Risk free rate					1.46%	1.39%
Maximum [Member] | Warrant [Member]
Exercise price (in dollars per share)	$ 12				$ 12
Bridge Financings [Member] | 14 Investors [Member]
Short-term loan				$ 1,124,750
Interest rate	8.00%				8.00%
Proceeds from private placement					$ 18,000,000
Number of additional shares purchased	226,629	199,879
Number of additional shares purchased, value	$ 1,013,032	$ 1,600,000
Payoff accrued interest	21,253	27,032
Payoff of principal amount	$ 374,750	$ 750,000
Bridge Financings [Member] | 14 Investors [Member] | Warrant [Member]
Percentage of common stock warrant coverage					20.00%	30.00%
Exercise price (in dollars per share)	$ 10				$ 10	$ 8
Bridge Financings [Member] | 14 Investors [Member] | Warrant [Member]
Exercise price (in dollars per share)	$ 8				$ 8
Number of common stock warrants issued					32,120
Warrant term					5 years
Bridge Financings [Member] | 14 Investors [Member] | Minimum [Member]
Maturity date				Jun. 30, 2016
Bridge Financings [Member] | 14 Investors [Member] | Maximum [Member]
Maturity date				Dec. 31, 2016
Senior Secured Debt Financing [Member] | Draw Loan Note And Agreement [Member]
Face amount	$ 3,000,000				$ 3,000,000
Proceeds from secured debt					$ 5,000,000
Senior Secured Debt Financing [Member] | Draw Loan Note And Agreement [Member] | The Dow Chemical Company [Member]
Maturity date	Dec. 1, 2021
Interest rate	5.00%				5.00%
Face amount	$ 10,000,000				$ 10,000,000
Proceeds from secured debt	$ 2,000,000
Description of funding	$3 million in additional funding available on or before December 1, 2017. After December 1, 2017, an additional $5 million becomes available if we have raised $10 million of equity capital after October 31, 2016.
Description of collateral	Secured by the Company’s assets.
Description of interest payable terms	Payable beginning January 1, 2017 although we may elect to capitalize interest through January 1, 2019.
Senior Secured Debt Financing [Member] | Warrant [Member] | Draw Loan Note And Agreement [Member] | The Dow Chemical Company [Member]
Percentage of common stock warrant coverage	20.00%
Exercise price (in dollars per share)	$ 8				$ 8
Number of common stock warrants issued					50,000
Description of warrant coverage	Share of common stock for each $40 received by the Company.
Warrant expiration date					Dec. 1, 2023
Stock price (in dollars per share)	$ 7.63				$ 7.63
Strike price (in dollars per share)	$ 8				$ 8
Volatility	38.38%
Risk free rate	1.53%
Debt discount	$ 143,146
Amortization expense					$ 5,266
Secured debt carrying amount	$ 1,862,120				$ 1,862,120

PRIVATE PLACEMENT AND PREEMPT56

PRIVATE PLACEMENT AND PREEMPTIVE RIGHTS (Details) - Private Placement [Member] - USD ($)	1 Months Ended	12 Months Ended
	Apr. 30, 2015	Dec. 31, 2016
Total allocated proceeds		$ 4,270,192
Preferred stock (B) [Member]
Total allocated proceeds	$ 18,000,000	3,609,814
Warrant [Member]
Total allocated proceeds		$ 660,378

PRIVATE PLACEMENT AND PREEMPT57

PRIVATE PLACEMENT AND PREEMPTIVE RIGHTS (Details 1) - $ / shares	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Minimum [Member]
Fair value of underlying stock	$ 7.63	$ 7.63
Equivalent risk free interest rate	1.27%	1.06%
Expected term (in years)	5 years 3 months 29 days	5 years 4 days
Equivalent stock price volatility	37.44%	38.00%
Expected dividend yield
Maximum [Member]
Fair value of underlying stock	$ 12.64	$ 12.64
Equivalent risk free interest rate	1.46%	1.39%
Expected term (in years)	7 years 14 days	8 years 18 days
Equivalent stock price volatility	37.92%	38.61%
Expected dividend yield
Private Placement [Member] | Warrant [Member]
Fair value of underlying stock	$ 12
Expected term (in years)	7 years
Expected dividend yield
Private Placement [Member] | Warrant [Member] | Minimum [Member]
Equivalent risk free interest rate	0.91%
Equivalent stock price volatility	30.47%
Private Placement [Member] | Warrant [Member] | Maximum [Member]
Equivalent risk free interest rate	1.03%
Equivalent stock price volatility	31.22%

PRIVATE PLACEMENT AND PREEMPT58

PRIVATE PLACEMENT AND PREEMPTIVE RIGHTS (Details Narrative) - USD ($)	Jan. 15, 2014	Apr. 30, 2015	Oct. 31, 2013	Dec. 31, 2016	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2012
Number of shares issued				226,629
Warrant [Member]
Number of shares issued						156,043	147,496	42,694
Exercise price (in dollars per share)				$ 8	$ 8
Preferred stock (B) [Member]
Conversion price (in dollars per share)				16	16
Series A Convertible Preferred Stock [Member]
Conversion price (in dollars per share)				12	$ 12
Private Placement [Member]
Proceeds from private placement					$ 4,270,192
Description of private placement offering terms					From closing of the offering and ending on the earlier of i) December 31, 2017 and ii) the date the Company consummates the sale of new securities resulting in gross proceeds of at least $18 million, the holder has the right to exchange their Series B Preferred Stock and Warrants on a price per share basis into the new security on the relative price per share terms as the new securities were sold to the third party.
Private Placement [Member] | Warrant [Member]
Proceeds from private placement					$ 660,378
Number of shares issued					222,262
Exercise price (in dollars per share)				16	$ 16
Expiration period					7 years
Private Placement [Member] | Warrant [Member]
Share price (in dollars per unit)		$ 16
Private Placement [Member] | Preferred stock (B) [Member]
Proceeds from private placement		$ 18,000,000			$ 3,609,814
Number of shares issued		1,125,000			266,887
Share price (in dollars per share)		$ 16
Termination date		Feb. 25, 2016
Number of shares converted					269,987
Private Placement [Member] | Preferred stock (B) [Member] | Restricted Common Stock [Member]
Number of shares issued					539,974
Private Placement [Member] | Series B Convertible Preferred Stock [Member]
Share price (in dollars per share)				16	$ 16
Conversion price (in dollars per share)				16	$ 16
Preemptive Rights Offering [Member] | Warrant [Member]
Proceeds from private placement	$ 1,345,284
Number of shares issued					58,689
Beneficial conversion feature	316,366
Fair value of warrant	316,366
Preemptive Rights Offering [Member] | Preferred stock (B) [Member]
Proceeds from private placement		$ 41,719
Number of shares issued		3,100
Share price (in dollars per unit)		$ 16
Preemptive Rights Offering [Member] | Preferred stock (B) [Member] | Financing Agreements With Samsung, Ventures And Aspen Advanced Opportunity Fund LP, AAOF and XGS II [Member]
Proceeds from private placement	$ 712,522
Preemptive Rights Offering [Member] | Preferred stock (B) [Member] | Warrant [Member]
Proceeds from private placement		$ 49,600
Number of shares issued		2,635
Fair value of warrant		$ 7,881
Preemptive Rights Offering [Member] | Series A Convertible Preferred Stock [Member] | Financing Agreements With Samsung, Ventures And Aspen Advanced Opportunity Fund LP, AAOF and XGS II [Member]
Number of shares issued	1
Share price (in dollars per share)	$ 12
Number of shares held by shareholders	2
Preemptive Rights Offering [Member] | Series A Convertible Preferred Stock [Member] | Warrant [Member] | Financing Agreements With Samsung, Ventures And Aspen Advanced Opportunity Fund LP, AAOF and XGS II [Member]
Number of shares issued					56,054	56,054
Exercise price (in dollars per share)				$ 6.40	$ 6.40
Preemptive Rights Offering [Member] | Preemptive Shares [Member] | Financing Agreements With Samsung, Ventures And Aspen Advanced Opportunity Fund LP, AAOF and XGS II [Member]
Number of shares issued					1
Number of shares held by shareholders					2
Preemptive Rights Offering [Member] | Preemptive Shares [Member] | Warrant [Member] | Financing Agreements With Samsung, Ventures And Aspen Advanced Opportunity Fund LP, AAOF and XGS II [Member]
Number of shares issued	56,054		5,554
Preemptive Rights Offering [Member] | Preemptive Shares [Member] | Series A Convertible Preferred Stock [Member] | Financing Agreements With Samsung, Ventures And Aspen Advanced Opportunity Fund LP, AAOF and XGS II [Member]
Number of shares issued	101,000
Share price (in dollars per share)	$ 12

DERIVATIVE LIABILITY WARRANTS59

DERIVATIVE LIABILITY WARRANTS (Details) - $ / shares	Jan. 15, 2014	Dec. 31, 2016	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2012
Number of shares issued		226,629
Financing Agreements With Samsung, Ventures And Aspen Advanced Opportunity Fund LP, AAOF and XGS II [Member] | Preemptive Rights Offering [Member] | Series A Convertible Preferred Stock [Member]
Number of shares issued	1
Warrant [Member]
Number of shares issued				156,043	147,496	42,694
Exercise Price		$ 8	$ 8
Warrant [Member] | Preemptive Rights Offering [Member]
Number of shares issued			58,689
Warrant [Member] | Private Placement [Member]
Number of shares issued			222,262
Exercise Price		16	$ 16
Warrant [Member] | Private Placement [Member] | Existing Stockholders [Member]
Number of shares issued			2,635	2,635
Exercise Price		16	$ 16
Type Of Shares Indexed			Common
Warrant [Member] | Financing Agreements With Samsung, Ventures And Aspen Advanced Opportunity Fund LP, AAOF and XGS II [Member] | Preemptive Rights Offering [Member] | Series A Convertible Preferred Stock [Member]
Number of shares issued			56,054	56,054
Exercise Price		6.40	$ 6.40
Type Of Shares Indexed			Series A PS
Warrant [Member]
Number of shares issued			1,197,617	1,218,242
Exercise Price		12	$ 12
Secured Convertible Notes [Member] | Warrant [Member]
Number of shares issued			833,333	833,333
Exercise Price		6.40	$ 6.40
Type Of Shares Indexed			Series A PS
Equipment Financing Leases [Member] | Warrant [Member]
Number of shares issued			83,333	83,333
Exercise Price		6.40	$ 6.40
Type Of Shares Indexed			Series A PS
Bridge Financings [Member] | Warrant [Member] | 14 Investors [Member]
Number of shares issued				20,625
Exercise Price		10	$ 10	$ 8
Type Of Shares Indexed			Common
Bridge Financings [Member] | Warrant [Member] | 14 Investors [Member]
Number of shares issued			222,262	222,262
Exercise Price		8	$ 8
Type Of Shares Indexed			Common
Bridge Financings [Member] | Warrant [Member] | Series A Convertible Preferred Stock [Member]
Exercise Price		$ 8	$ 8

DERIVATIVE LIABILITY WARRANTS60

DERIVATIVE LIABILITY WARRANTS (Details 1) - USD ($)	Dec. 31, 2016	Dec. 31, 2015
Total derivative liabilities	$ 7,900,249	$ 8,235,163
Financing Agreements With Samsung, Ventures And Aspen Advanced Opportunity Fund LP, AAOF and XGS II [Member] | Preemptive Rights Offering [Member] | Series A Convertible Preferred Stock [Member]
Total derivative liabilities	443,790	457,265
Warrant [Member] | Private Placement [Member]
Total derivative liabilities	246,881	306,828
Secured Convertible Notes [Member] | Warrant [Member]
Total derivative liabilities	6,554,160	6,743,997
Equipment Financing Leases [Member] | Warrant [Member]
Total derivative liabilities	655,418	674,397
Bridge Financings [Member] | Warrant [Member] | 14 Investors [Member]
Total derivative liabilities		$ 52,676

DERIVATIVE LIABILITY WARRANTS61

DERIVATIVE LIABILITY WARRANTS (Details 2) - $ / shares	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Minimum [Member]
Fair value of underlying stock	$ 7.63	$ 7.63
Equivalent risk free interest rate	1.27%	1.06%
Expected term (in years)	5 years 3 months 29 days	5 years 4 days
Equivalent stock price volatility	37.44%	38.00%
Expected dividend yield
Maximum [Member]
Fair value of underlying stock	$ 12.64	$ 12.64
Equivalent risk free interest rate	1.46%	1.39%
Expected term (in years)	7 years 14 days	8 years 18 days
Equivalent stock price volatility	37.92%	38.61%
Expected dividend yield

DERIVATIVE LIABILITY WARRANTS62

DERIVATIVE LIABILITY WARRANTS (Details 3) - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Total Derivative Gain (Loss)	$ 283,496	$ (2,513,476)
Warrant [Member] | Private Placement [Member]
Total Derivative Gain (Loss)	59,947	353,551
Warrant [Member] | Financing Agreements With Samsung, Ventures And Aspen Advanced Opportunity Fund LP, AAOF and XGS II [Member] | Preemptive Rights Offering [Member] | Series A Convertible Preferred Stock [Member]
Total Derivative Gain (Loss)	13,475	(161,211)
Secured Convertible Notes [Member] | Warrant [Member]
Total Derivative Gain (Loss)	189,837	(2,459,830)
Equipment Financing Leases [Member] | Warrant [Member]
Total Derivative Gain (Loss)	18,979	(245,986)
Bridge Financings [Member] | Warrant [Member] | 14 Investors [Member]
Total Derivative Gain (Loss)	$ 1,258

DERIVATIVE LIABILITY WARRANTS63

DERIVATIVE LIABILITY WARRANTS (Details Narrative) - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Proceeds from issuance of Warrants		$ 4,319,792
Bridge Financings [Member] | 14 Investors [Member] | Warrant [Member]
Proceeds from issuance of Warrants		18,000,000
Derivative liability		$ 51,418

CONVERTIBLE PREFERRED STOCK (De

CONVERTIBLE PREFERRED STOCK (Details Narrative) - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Warrant [Member]
Exercise price (in dollars per share)	$ 12
Series A Convertible Preferred Stock [Member]
Preferred stock, authorized	3,000,000	3,000,000
Liquidation (in dollars per share)	$ 12
Description of conversion of stock	one share of Common Stock at the lower of: (a) $12.00 per share, or (b) 80% of the price at which the Company sells any equity or equity-linked securities in the future.
Conversion price (in dollars per share)	$ 12
Series A Convertible Preferred Stock [Member] | Warrant [Member] | Bridge Financings [Member]
Reduction in share price (in dollars per share)	6.40
Exercise price (in dollars per share)	$ 8
Beneficial conversion feature	$ 221,000
Preferred stock (B) [Member]
Preferred stock, authorized	1,500,000	1,500,000
Liquidation (in dollars per share)	$ 16
Conversion price (in dollars per share)	$ 16
Proceeds from sale of stock	$ 18,000,000

INCENTIVE STOCK OPTION PLAN (De

INCENTIVE STOCK OPTION PLAN (Details) - $ / shares	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Options outstanding at beginning of year	419,750	464,750
Changes during the year:
Granted - at market price		30,000
Expired	(50,000)	(75,000)
Options outstanding at end of year	369,750	419,750
Options exercisable at end of year	268,565	190,080
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Rollforward]
Options outstanding at beginning of year	$ 12.04	$ 12.05
Changes during the year:
Granted - at market price	12	12
Expired	13.2	12
Options outstanding at end of year	11.89	12.04
Options exercisable at end of year	11.86	12
Weighted average fair value of options granted during the year	$ 0	$ 12

INCENTIVE STOCK OPTION PLAN (66

INCENTIVE STOCK OPTION PLAN (Details 1)	12 Months Ended
	Dec. 31, 2016$ / sharesshares
Share-based Compensation Arrangement by Share-based Payment Award, Non-Exercisable Options, Outstanding [Roll Forward]
Total non-exercisable options outstanding at beginning | shares	229,670
Options cancelled | shares	(35,000)
Options vested | shares	(93,485)
Total non-exercisable options outstanding at end | shares	101,185
Share-based Compensation Arrangement by Share-based Payment Award, Non-Exercisable Options, Weighted Average Exercise Price [Roll Forward]
Total non-exercisable options outstanding at beginning | $ / shares	$ 12.08
Options cancelled | $ / shares	13.2
Options vested | $ / shares	12
Total non-exercisable options outstanding at end | $ / shares	$ 12

INCENTIVE STOCK OPTION PLAN (67

INCENTIVE STOCK OPTION PLAN (Details 2)	12 Months Ended
	Dec. 31, 2016shares
Number Outstanding	369,750
Number Exercisable	268,565
Weighted Average Remaining Contractual Life (Years)	5 years 10 months 2 days
Exercise Price 8.00 [Member]
Number Outstanding	10,000
Number Exercisable	10,000
Weighted Average Remaining Contractual Life (Years)	11 months 1 day
Exercise Price 12.00 [Member]
Number Outstanding	359,750
Number Exercisable	258,565
Weighted Average Remaining Contractual Life (Years)	4 years 11 months 1 day

INCENTIVE STOCK OPTION PLAN (68

INCENTIVE STOCK OPTION PLAN (Details 3) - $ / shares	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Fair value of underlying stock		$ 7.63
Risk free interest rate		1.35%
Expected dividend yield	0.00%	0.00%
Minimum [Member]
Expected option life		5 years
Expected stock price volatility		36.12%
Maximum [Member]
Expected option life		5 years 2 months 5 days
Expected stock price volatility		36.36%

INCENTIVE STOCK OPTION PLAN (69

INCENTIVE STOCK OPTION PLAN (Details Narrative) - USD ($)	Jan. 06, 2014	Dec. 31, 2016	Dec. 31, 2015
Number of options granted			30,000
Stock based compensation		$ 480,532	$ 598,779
Unrecognized compensation cost		$ 381,009
Intrinsic value (in dollars per share)		$ 7.63
Exersice price		$ 12	$ 12
MR. Philip L. Rose [Member]
Number of shares awarded	220,000
Stock based compensation		$ 41,352	$ 17,070
Exersice price	$ 12
Number of stock options vested	160,000
Vesting period	4 years
Amount of options granted	$ 987,648		$ 44,721
Incentive Stock Option Plan [Member]
Number of shares awarded		600,000
Number of options granted		369,750	419,750
Vesting percentage		20.00%
Description of option execisable terms		Each option is exercisable into one share of common stock of the Company.
Description of vesting terms		Vesting of the options ranges from immediately to 20% per year, with most options vesting on a straight-line basis over a three or four year period from the date issued.

STOCK WARRANTS (Details)

STOCK WARRANTS (Details) - $ / shares	1 Months Ended	12 Months Ended
	May 31, 2015	Dec. 31, 2016
Number of Warrants		11,000
Warrant [Member]
Date Issued		Jan. 7, 2009
Expiration Date		Jan. 7, 2019
Exercise Price		$ 8
Number of Warrants	1,400	6,000
Warrant [Member]
Date Issued		Aug. 10, 2012
Expiration Date		Aug. 10, 2027
Exercise Price		$ 12
Number of Warrants		5,000

STOCK WARRANTS (Details Narrati

STOCK WARRANTS (Details Narrative) - $ / shares	1 Months Ended	7 Months Ended	12 Months Ended				13 Months Ended
	May 31, 2015	Dec. 31, 2016	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2012	Jul. 31, 2015
Number of shares issued		226,629
Number of Warrants			11,000
Warrant [Member]
Number of shares issued				156,043	147,496	42,694
Exercise price (in dollars per share)		$ 8	$ 8
Number of warrants expired unexercised							30,294
Number of Warrants	1,400		6,000
Warrant [Member] | Maximum [Member]
Exercise price (in dollars per share)		12	$ 12
Warrant [Member] | Minimum [Member]
Exercise price (in dollars per share)		$ 8	$ 8

CAPITAL LEASES (Details)

CAPITAL LEASES (Details) - USD ($)	Dec. 31, 2016	Dec. 31, 2015
Net obligations	$ 383,773
Short-term portion of obligations	(268,667)	$ (178,487)
Long-term portion of obligations	115,106	354,483
Aspen Advance Opportunity Fund, LP [Member]
Capital lease obligations	449,368	682,564
Unamortized warrant discount	(65,595)	(149,594)
Net obligations	383,773	532,970
Short-term portion of obligations	(268,667)	(178,487)
Long-term portion of obligations	$ 115,106	$ 354,483

CAPITAL LEASES (Details 1)

CAPITAL LEASES (Details 1) - USD ($)	Dec. 31, 2016	Dec. 31, 2015
For the year ending December 31:
2,017	$ 362,184
2,018	140,148
Total future minimum lease payments	502,332
Less amount representing interest	(118,559)
Present value of future minimum lease payments	383,773
Less current maturities	268,667	$ 178,487
Obligations under capital leases - long term	$ 115,106	$ 354,483

CAPITAL LEASES (Details Narrati

CAPITAL LEASES (Details Narrative) - shares	7 Months Ended	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2012
Number of shares issued	226,629
Warrant [Member]
Number of shares issued		156,043	147,496	42,694
Interest rate		50.00%	32.00%

INCOME TAXES (Details)

INCOME TAXES (Details) - USD ($)	Dec. 31, 2016	Dec. 31, 2015
Current:
Other temporary differences	$ 75,000	$ 10,000
Non-current:
Net operating loss carry forwards	12,985,000	9,955,000
Tax depreciation in excess of book depreciation	(230,000)	(220,000)
Research and development credits	560,000	490,000
Net deferred tax asset	13,390,000	10,235,000
Deferred tax valuation allowance	(13,390,000)	(10,235,000)
Net deferred tax asset

INCOME TAXES (Details 1)

INCOME TAXES (Details 1)	3 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Income Taxes Details 1
Federal tax provision	34.00%	34.00%
State tax provision	6.00%	6.00%
Valuation allowance	(40.00%)	(40.00%)
Total effective tax rate	0.00%	0.00%

INCOME TAXES (Details Narrative

INCOME TAXES (Details Narrative) - USD ($)	Dec. 31, 2016	Dec. 31, 2015
Income Taxes Details Narrative
Net operating loss carryforward	$ 38,200,000	$ 33,180,000

CUSTOMER, SUPPLIER, COUNTRY A78

CUSTOMER, SUPPLIER, COUNTRY AND PRODUCT CONCENTRATIONS (Details Narrative) - Number	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Grants and Licensing Revenue Concentration [Member] | Total Grant Revenue [Member] | Grantor One [Member]
Concentration of risk	77.00%	100.00%
Grants and Licensing Revenue Concentration [Member] | Total Grant Revenue [Member] | Grantor Two [Member]
Concentration of risk	14.00%
Customer Concentration Risk [Member] | Total Product Revenues [Member] | Customer One [Member]
Concentration of risk	24.00%
Customer Concentration Risk [Member] | Total Product Revenues [Member] | Customer Two [Member]
Concentration of risk		12.00%
Customer Concentration Risk [Member] | Accounts Receivable Greater Than 10% [Member] | Customer [Member]
Number of customers	1	4
Country Concentration Risk [Member] | Total Product Revenues [Member] | Korea (South), Won
Concentration of risk	21.00%	12.00%
Country Concentration Risk [Member] | Total Product Revenues [Member] | Foreign [Member]
Concentration of risk	56.00%	56.00%
Product Concentration Risk [Member] | Total Product Revenues [Member] | Product One [Member]
Concentration of risk	24.00%
Description of product	Graphene nanoplatelets materials , Grade C 300 m²/g – HP
Product Concentration Risk [Member] | Total Product Revenues [Member] | Product Two [Member]
Concentration of risk		11.00%
Description of product		Grade M 5µm
Product Concentration Risk [Member] | Total Product Revenues [Member] | Product Three [Member]
Concentration of risk		12.00%
Description of product		Grade C 750 m²/g.

RELATED PARTY TRANSACTIONS AN79

RELATED PARTY TRANSACTIONS AND COMMITMENTS (Details) - USD ($)	7 Months Ended	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2016
Amount Invested	$ 1,813,032
Shares Purchased	226,629
Mr. Arnold Allemang [Member]
Purchase Dates	June 23 – 28 and Sept. 30
Amount Invested	$ 965,000
Shares Purchased	120,625	120,625
Mr. Steven Jones [Member]
Purchase Dates	June 24 – 27
Amount Invested	$ 748,000
Shares Purchased	93,500	93,500
Mr. Dave Pendell [Member]
Purchase Dates	June 27 and Dec. 5
Amount Invested	$ 100,032
Shares Purchased	12,504	12,504

RELATED PARTY TRANSACTIONS AN80

RELATED PARTY TRANSACTIONS AND COMMITMENTS (Details Narrative) - USD ($)	Mar. 25, 2016	Mar. 09, 2016	Feb. 26, 2016	Apr. 30, 2015	Jun. 30, 2016	Dec. 31, 2016	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2013	Dec. 31, 2014
Number of option granted								30,000
Debt face amount								$ 13,700,000
Transaction amount						$ 1,813,032
Number of shares issued						226,629
Value of units issued							$ 4,069,255	$ 4,333,792
Common Stock [Member]
Number of shares issued							508,657	1,400
Value of units issued							$ 4,069,255	$ 14,000
Preferred stock (B) [Member] | Private Placement [Member]
Number of shares issued				1,125,000			266,887
Number of units issued				18,000,000
Sale of stock offering price (in dollars per unit)				$ 16
Aspen Advance Opportunity Fund, LP [Member]
Debt face amount								9,000,000
Mr.Michael R. Knox [Member]
Debt face amount								700,000
Mr. Steven Jones [Member]
Transaction amount						$ 748,000
Number of shares issued						93,500	93,500
Mr. Steven Jones [Member] | Preferred stock (B) [Member] | Private Placement [Member]
Value of units issued				$ 250,000
Mr. Steven Jones [Member] | December Notes Due June 30, 2016 [Member]
Debt face amount								$ 250,000
Number of warrants called								9,375
Warrant strike price (in dollars per share)								$ 8
Warrant term								5 years
Mr. Steven Jones [Member] | Notes Payable Due December 31, 2016 [Member]
Debt face amount	$ 100,000
Number of warrants called	2,000
Warrant strike price (in dollars per share)	$ 10
Warrant term	5 years
Mr. Arnold Allemang [Member]
Transaction amount						$ 965,000
Number of shares issued						120,625	120,625
Mr. Arnold Allemang [Member] | Preferred stock (B) [Member] | Private Placement [Member]
Value of units issued				$ 250,000
Mr. Arnold Allemang [Member] | December Notes Due June 30, 2016 [Member]
Debt face amount								$ 250,000
Number of warrants called								9,375
Warrant strike price (in dollars per share)								$ 8
Warrant term								5 years
Mr. Arnold Allemang [Member] | Notes Payable Due December 31, 2016 [Member]
Debt face amount		$ 100,000
Number of warrants called		2,000
Warrant strike price (in dollars per share)		$ 10
Warrant term		5 years
Mr. Dave Pendell [Member]
Transaction amount						$ 100,032
Number of shares issued						12,504	12,504
Mr. Dave Pendell [Member] | December Notes Due June 30, 2016 [Member]
Debt face amount								$ 50,000
Number of warrants called								1,875
Warrant strike price (in dollars per share)								$ 8
Warrant term								5 years
Mr. Dave Pendell [Member] | Notes Payable Due December 31, 2016 [Member]
Debt face amount	$ 50,000
Number of warrants called	1,000
Warrant strike price (in dollars per share)	$ 10
Warrant term	5 years
Proceeds from issuance initial public offering	$ 48,000
Licensing Agreement [Member] | POSCO [Member]
Minimum yearly contractual obligation						$ 100,000	$ 100,000	$ 100,000		$ 100,000
Quarterly license revenue						25,000	25,000	25,000
Allowance contractual obligation						$ 150,000	150,000
Licensing Agreement [Member] | Michigan State University (Patents and Pending Patents) [Member]
Licensing expenses							$ 50,000	50,000
Employment Agreement [Member] | MR. Philip L. Rose [Member]
Annual salary									$ 275,000
Number of option granted									220,000
Share price (in dollars per share)									$ 12
Award expiration period									8 years
Description of vesting rights									The options vest as follows: 160,000 over a 48 month period with 40,000 options vesting on the first anniversary of the agreement and the balance over the remaining 36 months; 40,000 vesting over a provisional time based schedule and 20,000 vest based on certain performance requirements.
Severance pay period									6 months
Employment Agreement [Member] | MR. Philip L. Rose [Member] | Tranche One [Member]
Number of option vested									40,000
Vesting period									12 months
Employment Agreement [Member] | MR. Philip L. Rose [Member] | Tranche Two [Member]
Number of option vested									120,000
Vesting period									36 months
Employment Agreement [Member] | MR. Philip L. Rose [Member] | Tranche Three [Member]
Number of option vested									40,000
Employment Agreement [Member] | MR. Philip L. Rose [Member] | Tranche Four [Member]
Number of option vested									20,000
Financing Arrangements [Member] | ASC-XGS, LLC [Member] | Aspen Advance Opportunity Fund, LP And XGS II, LLC [Member] | Secured Convertible Notes [Member]
Debt face amount									$ 4,503,847	5,500,000
Financing Arrangements [Member] | ASC-XGS, LLC [Member] | Aspen Advance Opportunity Fund, LP And XGS II, LLC [Member] | Equipment Lease Financing [Member]
Debt face amount									$ 635,770	$ 390,321
Phantom Stock Agreement [Member] | Mr.Michael R. Knox [Member]
Transaction amount								$ 254,000
Master Leasing Agreement [Member] | Aspen Advance Opportunity Fund, LP [Member] | Preferred stock (A) [Member]
Number of shares issued					14,280			28,560
Shareholders Agreement [Member]
Number of excluded stock offered			3,000,000
Description of excluded stock			The Amendment to Shareholders Agreement further clarifies that preemptive rights shall not apply to Excluded Stock (including, without limitation, the 3,000,000 shares being offered hereunder), and amends the termination date of the Shareholders Agreement. Specifically, the Shareholder Agreement has been amended to provide that it continues in effect until (i) the date of the closing of a public offering of common stock pursuant to a registration statement filed with the SEC that is declared effective in which the Company receives gross proceeds of at least $10,000,000, on which date it shall terminate in its entirety, unless the Shareholder Agreement is earlier terminated in accordance with its terms, or (ii) the date on which the Company’s common stock is listed on the NASDAQ Stock Market of the New York Stock Exchange.

OPERATING LEASES (Details)

OPERATING LEASES (Details)	Dec. 31, 2016USD ($)
For the year ending December 31:
2,017	$ 338,862
2,018	226,422
2,019	230,685
2,020	235,023
2,021	$ 240,081

OPERATING LEASES (Details Narra

OPERATING LEASES (Details Narrative)	12 Months Ended
	Dec. 31, 2016USD ($)Number	Dec. 31, 2015USD ($)
Number of separate operating leases | Number	2
Total rent expense | $	$ 383,029	$ 387,159
Operating Lease One [Member]
Lease expiration date	Dec. 31, 2017
Operating Lease Two [Member]
Lease expiration date	Mar. 31, 2022

RETIREMENT PLAN (Details Narrat

RETIREMENT PLAN (Details Narrative) - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Retirement Plan Details Narrative
Employer contribution expense	$ 78,005	$ 93,582

LETTER OF CREDIT (Details Narra

LETTER OF CREDIT (Details Narrative) - Letter of Credit [Member] - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Letter of credit	$ 190,000
Expiration date	Feb. 28, 2022
Cash deposit	$ 195,499	$ 195,206