Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Nov. 12, 2015 | |
Document And Entity Information | ||
Entity Registrant Name | Windstream Technologies, Inc. | |
Entity Central Index Key | 1,439,133 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2015 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 2,272,905,112 | |
Trading Symbol | WSTI | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,015 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
CURRENT ASSETS | ||
Cash | $ 177,338 | $ 594,508 |
Accounts receivable, net | 305,566 | 1,017,522 |
Inventories | 1,901,052 | 1,184,957 |
Prepaid expenses | 287,112 | 77,349 |
Investor notes receivable | 1,535,000 | 2,175,260 |
TOTAL CURRENT ASSETS | 4,206,068 | 5,049,596 |
Property and equipment, net | 340,945 | 253,640 |
OTHER ASSETS | ||
Deposits | 62,762 | 62,059 |
TOTAL ASSETS | 4,609,775 | 5,365,295 |
CURRENT LIABILITIES | ||
Accounts payable | 1,465,105 | 1,154,283 |
Accrued liabilities | 1,702,971 | 1,052,891 |
Short term debt - third parties | 2,509,084 | 2,476,605 |
Current maturities of note payable | 107,838 | 107,838 |
Convertible notes payable, net of unamortized debt discount of $0 and $166,668, respectively | 2,180,364 | 3,041,332 |
Derivative liabilities | 839,644 | 1,939,292 |
Short term debt - related parties | 221,000 | 221,000 |
TOTAL CURRENT LIABILITIES | 9,026,006 | 9,993,241 |
LONG TERM LIABILITY | ||
Note payable, non-current | 1,172,162 | 1,217,162 |
TOTAL LIABILITIES | 10,198,168 | 11,210,403 |
STOCKHOLDERS' EQUITY (DEFICIT) | ||
Common stock; $0.001 par value; unlimited shares authorized; 392,921,528 and 88,617,154 shares issued and outstanding, respectively | 173,562 | 87,283 |
Additional paid in capital | 19,225,521 | 15,881,419 |
Accumulated deficit | (24,716,976) | (21,750,309) |
Deficit attributable to Windstream Technologies, Inc. | (5,317,893) | (5,781,606) |
Noncontrolling interest | (270,500) | (63,501) |
TOTAL STOCKHOLDERS' DEFICIT | (5,588,393) | (5,845,108) |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY DEFICIT | $ 4,609,775 | $ 5,365,295 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2015 | Dec. 31, 2014 | |
Statement of Financial Position [Abstract] | ||
Convertible notes payable, unamortized debt discount | $ 0 | $ (166,668) |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | Unlimited | Unlimited |
Common stock, shares issued | 392,921,528 | 86,617,154 |
Common stock, shares outstanding | 392,921,528 | 86,617,154 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Income Statement [Abstract] | ||||
SALES | $ 1,732,507 | $ 373,538 | $ 2,821,149 | $ 825,798 |
COST OF GOODS SOLD | 1,564,746 | 685,528 | 2,349,329 | 1,235,126 |
GROSS (LOSS) PROFIT | 167,761 | (311,990) | 471,820 | (409,328) |
OPERATING EXPENSES: | ||||
Research and development | $ 1,425 | $ 91,666 | $ 24,884 | 128,117 |
Write down of inventory | 111,000 | |||
Stock compensation expense | $ 36,528 | $ 39,898 | $ 246,399 | 122,126 |
General and administrative expenses | 1,202,565 | 827,196 | 3,583,921 | 2,178,365 |
TOTAL OPERATING EXPENSES | 1,240,518 | 958,760 | 3,855,204 | 2,539,608 |
LOSS FROM OPERATIONS | $ (1,072,757) | (1,270,750) | (3,383,384) | (2,948,936) |
OTHER INCOME (EXPENSE) | ||||
Other expense | (2,904) | (800) | (2,105) | |
Interest expense, net | $ (164,790) | $ (213,705) | (675,895) | $ (595,748) |
Gain on change in fair value of derivative liabilities | 326,258 | 888,011 | ||
TOTAL OTHER INCOME (EXPENSE) | 161,468 | $ (216,609) | 211,316 | $ (597,853) |
NET LOSS | (911,289) | $ (1,487,359) | (3,172,068) | $ (3,546,789) |
Non Controlling Interest | (228,780) | (206,999) | ||
NET LOSS ATTRIBUTABLE TO WINDSTREAM TECHNOLOGIES | $ (682,509) | $ (1,487,359) | $ (3,172,068) | $ (3,546,789) |
Net Loss Per Share - Basic and Diluted | $ 0 | $ (0.02) | $ (0.02) | $ (0.04) |
Weighted Average Shares Outstanding - Basic and Diluted | 202,234,762 | 86,741,574 | 139,103,989 | 85,200,993 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Cash Flows from Operating Activities | |||||
Net loss | $ (682,509) | $ (1,487,359) | $ (3,172,068) | $ (3,546,789) | |
Adjustments to reconcile net loss to net cash used in operating activities: | |||||
Depreciation | $ 103,202 | 93,325 | |||
Interest expense converted into Common Stock | 7,422 | ||||
Amortization of debt discount and deferred financing costs | $ 166,669 | 384,032 | |||
Write-down of inventory | $ 111,000 | $ 111,000 | |||
Provision for bad debt | $ 10,000 | ||||
Gain from change in fair value of derivative liabilities | $ (326,258) | (888,011) | |||
Stock based compensation | 36,528 | $ 39,898 | 246,399 | $ 122,126 | |
Changes in assets and liabilities: | |||||
Accounts receivable | 701,956 | (82,384) | |||
Inventories | (716,095) | (441,687) | |||
Prepaid expenses | (209,763) | (211,584) | |||
Deposits | (703) | (10,535) | |||
Accounts payable | 310,822 | 89,434 | |||
Accrued liabilities | 713,089 | 178,118 | |||
Net cash used in operating activities | (2,734,503) | (3,307,522) | |||
Cash Flows from Investing Activities | |||||
Purchase of property and equipment | (190,507) | (6,185) | |||
Net cash used in investing activities | (190,507) | $ (6,185) | |||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||
Payment on stock subscription receivable | 799,505 | ||||
Borrowings on line of credit, net | 7,479 | $ 1,349,756 | |||
Borrowings on short term debt | 755,000 | $ 200,000 | |||
Principal payments on short term debt | $ (125,750) | ||||
Proceeds from short term debt - related parties | $ 50,000 | ||||
Payments on short term debt - related parties | $ (55,000) | ||||
Borrowings on long-term debt | $ 100,000 | ||||
Principal payments on long term debt | (45,000) | $ (60,000) | |||
Proceeds from issuance of convertible debt, net of discounts | $ 627,395 | 650,000 | |||
Net proceeds from issuance of Common Stock and Warrants | $ 1,248,856 | ||||
Payment on investor note receivables | $ 389,211 | ||||
Net cash provided by financing activities | 2,507,840 | $ 3,383,612 | |||
Net increase (decrease) in Cash and Cash Equivalents | (417,170) | 69,605 | |||
Cash and Cash Equivalents, Beginning of Year | 594,508 | 203,534 | 203,534 | ||
Cash and Cash Equivalents, End of Year | $ 177,338 | $ 273,439 | 177,338 | 273,439 | $ 594,508 |
Supplemental Cash Flows Information | |||||
Interest paid | 385,139 | 51,468 | |||
Income taxes | $ 800 | 0 | |||
NON-CASH INVESTING AND FINANCING ACTIVITIES | |||||
Common stock and paid in capital resulting from non-cash conversions of convertible notes including interest expense and accrued interest | 207,500 | ||||
Debt discount on warrants issued with convertible debt | 400,000 | ||||
Debt discount on warrants issued with convertible debt - Typenex | 511,460 | ||||
Contributed capital | $ 50,000 | ||||
Non-cash issuance of common stock | $ 2,570,719 |
Basis of Presentation and Natur
Basis of Presentation and Nature of Organization | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Nature of Organization | NOTE 1 BASIS OF PRESENTATION AND NATURE OF ORGANIZATION WindStream Technologies, Inc. (the Company), is engaged in the development and commercialization of wind driven electrical generation. The Companys facilities are located in North Vernon, Indiana. The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (SEC) and expressed in U.S. dollars. The Companys fiscal year end is December 31. On March 24, 2014, Windaus Global Energy, Inc. filed an Articles of Amendment with the Secretary of State of the State of Wyoming effecting a name change of Windaus Global Energy, Inc. to WindStream Technologies, Inc. (the Name Change). Windaus Global Energy, Inc. has notified the Financial Industry Regulatory Authority (FINRA) of the Name Change and a new trading symbol, WSTI was assigned effective March 27, 2014. The new CUSIP number for the Companys common stock is 97382J102. India On October 26, 2013, the Company formed a 99.9% owned subsidiary company in India, Windstream Energy Technologies India Private Limited, (WET), located in Hyderabad to perform various commercial activities including reselling, manufacturing, repairing, importing and exporting various types of renewable energy sources including turbines, windmills, solar-wind hybrids and other devices. A Board of Directors was established consisting of the Chief Executive Officer of the Company and an Indian national. At the time of formation, the Parent Company received 10,000 shares of stock in the wholly-owned subsidiary, and WET did not have any significant assets or liabilities. On December 11, 2013, WET held a board of directors meeting to approve opening a bank account and the investor began funding the working capital line. India - Noncontrolling interest In October 2014, the Company entered into an agreement with unrelated third parties, whereby in exchange for $2 million, these investors would receive 8,184 shares of stock in WET, or a 45% interest of WET. These are in addition to the 10,000 shares owned by the Company, and the Company retained a 55% ownership in WET, making it a majority-owned subsidiary. The Company also has three of the five board seats on the board of directors of WET. In November and December 2014, WET leased office space, approximately 9,500 square feet, and manufacturing space, approximately 50,000 square feet, in India in connection with expanding its operations. The office space lease is a month-to-month lease with annual rent of approximately $24,000. The office space was occupied in December 2014. The manufacturing facility lease is a six-year lease with annual rent of approximately $120,000. The manufacturing space lease commenced on April 1, 2015 when WET occupied the space. As of September 30, 2015, approximately $1,259,000 of the $2 million purchase price of the WET stock had been funded by the third party investors. Peru In December 2013, the Company filed documents to incorporate a 100% owned subsidiary in Peru, Windstream Technologies Latin America S.A (the Peru subsidiary). The Peru subsidiary has appointed a temporary board of directors as required by local regulation, but the Peru subsidiary has had no operations, has entered into no contracts, opened no bank accounts and has not begun any business activity. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES This summary of significant accounting policies is presented to assist the reader in understanding and evaluating the Companys financial statements. The consolidated financial statements and notes are representations of the Companys management, which is responsible for their integrity and objectivity. These accounting policies conform to generally accepted accounting principles and have been consistently applied in the preparation of the financial statements. Consolidations The consolidated financial statements include the accounts of the Company and companies in which the Company has a controlling interest including the accounts of Windstream Technologies, Inc., (fka, Windaus Global Energy, Inc.), Windstream Technologies, Inc. (a California corporation), Windstream Energy Technologies Pvt Ltd. and Windstream Technologies Latin America S. A. For consolidated subsidiaries where the Companys ownership in the subsidiary is less than 100%, the equity interest not held by the Company is shown as non-controlling interest. Management also evaluates whether an investee company is a variable interest entity and whether the Company is the primary beneficiary. Consolidation is required if both of these criteria are met. The Company did not have any variable interest entities requiring consolidation during the nine months ended September 30, 2015 and 2014. Reclassifications Certain prior period amounts have been reclassified to conform to the current presentation. The reclassifications did not impact prior period results of operations, cash flows, total assets, total liabilities or total equity. Comprehensive Income The Company reports comprehensive income in accordance with FASB ASC Topic 220 Comprehensive Income, which established standards for reporting and displaying comprehensive income and its components in a financial statement that is displayed with the same prominence as other financial statements. Total comprehensive income is defined as all changes in stockholders equity during a period, other than those resulting from investments by and distributions to stockholders (i.e., issuance of equity securities and dividends). Generally, for the Company, total comprehensive income (loss) equals net income (loss) plus or minus adjustments for currency translation. Comprehensive income was de minimus Foreign Currency Transactions and Translation The Companys subsidiary in India conducts business primarily denominated in its local currency, which is its functional currency. Assets and liabilities have been translated to U.S. dollars at the period-end exchange rates. Revenues and expenses have been translated at exchange rates which approximate the average of the rates prevailing during each period. Translation adjustments are de minimus Use of Estimates The preparation of the consolidated financial statements in conformity with US GAAP requires the Company to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant accounting estimates reflected in the Companys consolidated financial statements include the allowance for doubtful accounts and sales returns reserves, inventory write-downs, the estimated useful lives of long-lived assets, the impairment of long-lived assets, fair value of derivative liabilities, valuation allowance on deferred income tax assets, accrued warranty expenses, the grant-date fair value of share-based compensation awards and related forfeiture rates, and fair value of financial instruments. Changes in facts and circumstances may result in revised estimates. The current economic environment has increased the degree of uncertainty inherent in those estimates and assumptions. Deferred Financing Costs Deferred financing costs represent costs incurred in connection with obtaining the debt financing. These costs are amortized ratably and charged to interest expense over the term of the related debt. In connection with one of the five debt issuances as discussed in Note 11, the Company paid finders fees of approximately $42,000 as well as 140,000 common stock warrants at $0.05 per share. The warrants vest immediately and have a three year term. The fair value of the warrants was determined to be approximately $48,000 using the Black-Scholes option pricing model with the same assumptions as the warrants discussed in Notes 11 and 16, except the exercise price used for the warrants. The combined value of the warrants, including the finders fees, is $90,000, which was capitalized as a financing cost and is being amortized to interest expense over the life of the notes. As of September 30, 2015 and December 31, 2014, the deferred financing costs had an unamortized balance of $0. Amortization of deferred financing costs, which has been included in interest expense, was approximately $0 and $23,000 for the nine months ended September 30, 2015 and 2014, respectively. Cash and Cash Equivalents The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents. Accounts Receivable Trade accounts receivable are periodically evaluated for collectability based on past credit history with customers and their current financial condition. Bad debts expense or write offs of receivables are determined on the basis of loss experience, known and inherent risks in the receivable portfolio and current economic conditions. The Company believes its allowance for doubtful accounts as of September 30, 2015 and December 31, 2014 are adequate, but actual write-offs could exceed the recorded allowance. During the nine months ended September 30, 2015, the Company wrote off $12,402 in accounts receivable against the allowance and increased the allowance by $10,000 of bad debt expense. There were no such transactions in 2014. Export Import Bank Credit Insurance The Company sells its products outside the United States under the terms of a short term multi-buyer export credit insurance policy with the Export Import Bank (Ex Im Bank) of the United States, an agency of the United States Government. Under the terms of the policy, the Ex Im Bank agrees to pay the Company up to 95% of the outstanding invoice amounts, on qualified sales, due after ninety days or depending on the specific terms with each customer. The limit of the policy was $2,000,000 and $4,000,000 at September 30, 2015 and December 31, 2014, respectively, having been reduced on June 26, 2015. Inventories Inventories are primarily raw materials. Inventories are valued at the lower of cost, as determined on a first-in-first-out (FIFO) basis, or market. Market value is determined by reference to selling prices after the balance sheet date or to managements estimates based on prevailing market conditions. Management writes down the inventories to market value if it is below cost. Management also regularly evaluates the composition of its inventories to identify slow-moving and obsolete inventories to determine if a valuation allowance is required. Costs of raw material inventories include the purchase prices of the component parts and related costs incurred in bringing the products to their present location and condition. Property and Equipment Property and equipment consists of manufacturing equipment, factory equipment, furniture and fixtures, leasehold improvements and tooling costs. These assets are recorded at cost and are being depreciated on the straight-line basis over estimated lives of two to seven years. Leasehold improvements are being depreciated over their useful life or the term of the related lease, whichever is shorter. Repair and maintenance expenditures, which do not result in improvements, are charged to expense as incurred. Long-Lived Assets The Companys long-lived assets consisted of property and equipment and are reviewed for impairment in accordance with the guidance of FASB ASC Topic, 360, Property, Plant and Equipment, Presentation of Financial Statements. Deferred Revenues The Company typically receives advance payments on certain individual sales. These advance payments are recorded as deferred revenues within accrued liabilities, on the accompanying Consolidated Balance Sheets and reclassified as revenue in the Consolidated Statements of Operations only after the product has been delivered and the revenue has been earned. Revenue Recognition Sales revenue consists of amounts earned from customers through the sale of its primary products, the TurboMill and the SolarMill, power generation devices which use alternative energy sources, primarily wind, to generate electricity. The Company also provides accessory products in support of these devices in the form of mounting equipment, data collection/monitoring equipment, batteries, inverters and various wiring solutions and accessories. Sales revenue is recognized when persuasive evidence of an arrangement exists, title to and risk of loss for the product has passed, which is generally when the products are shipped to its customers and collection is reasonably assured. Sales Returns The Company allows customers to return defective products when they meet certain established criteria as outlined in the Companys sales terms and conditions. It is the Companys practice to regularly review and revise, Warranty Policy For the Companys products it sells, the Company warrants to the original purchaser only that the products will be free from defects in workmanship and material for five years after the shipment date with exclusions for improper installation, ordinary wear and tear, improper maintenance or accident or damage. Estimated future warranty obligations related to certain products are provided by charges to operations in the period in which the related revenue is recognized. Estimates are based on, in part, historical experience. At September 30, 2015 and December 31, 2014, the Company had accrued warranty expense liability of $253,000. For the nine months ended September 30, 2015 and 2014, the Company had warranty expense of $365 and $204,141, respectively. Cost of goods sold Cost of goods sold consists primarily of raw materials, utility and supply costs consumed in the manufacturing process, manufacturing labor, depreciation expense and direct overhead expenses necessary to manufacture finished goods as well as warehousing and distribution costs such as inbound freight charges, shipping and handling costs, purchasing and receiving costs. Shipping and Handling Costs Shipping and handling costs for all sales transactions are billed to the customer and are included in cost of goods sold for all periods presented. Income Taxes The Company accounts for income taxes pursuant to the provisions of ASC 740, Income Taxes, whereby deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amount of existing assets and liabilities and their respective tax bases and the future tax benefits derived from operating loss and tax credit carryforwards. The Company provides a valuation allowance on its deferred tax assets when it is more likely than not that such deferred tax assets will not be realized. ASC 740 requires that the Company recognize in the consolidated financial statements the effect of a tax position that is more likely than not to be sustained upon examination based on the technical merits of the position. The first step is to determine whether or not a tax benefit should be recognized. A tax benefit will be recognized if the weight of available evidence indicates that the tax position is more likely than not to be sustained upon examination by the relevant tax authorities. The recognition and measurement of benefits related to the Companys tax positions requires significant judgment as uncertainties often exist with respect to new laws, new interpretations of existing laws, and rulings by taxing authorities. Differences between actual results and the Companys assumptions, or changes in the Companys assumptions in future periods, are recorded in the period they become known. The Company accrues any interest or penalties related to its uncertain tax positions as part of its income tax expense. No reserve for uncertain tax positions was booked by the Company for the nine months ended September 30, 2015 and 2014. No liability for unrecognized tax benefits was recorded as of September 30, 2015 and December 31, 2014. Profits from non-U.S. activities are subject to local taxes, but not subject to U.S. tax until repatriated to the U.S. It is the Companys intention to permanently reinvest these earnings outside the U.S., subject to our managements continuing assessment as to whether repatriation may, in some cases, still be in the best interests of the Company. The calculation of tax liabilities involves dealing with uncertainties in the application of complex global tax regulations. Stock Based Payments The Company accounts for stock based awards to employees in accordance with ASC 718 Stock Compensation. Under this guidance, stock compensation expense is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the estimated service period (generally the vesting period) on the straight-line attribute method. Share-based awards to non-employees are accounted for in accordance with ASC 505-50 Equity, wherein such awards are expensed over the period in which the related services are rendered. General and Administrative Expenses General and administrative expenses consist of business development, commissions, insurance costs, marketing, salary and benefit expenses, rent, professional fees, travel and entertainment expenses and other general and administrative overhead costs. Expenses are recognized when incurred. Research and Development Costs incurred in developing the ability to create and manufacture products for sale are included in research and development in the Companys Consolidated Statements of Operations. Once a product is commercially feasible and starts to sell to third party customers, the classification of such costs as development costs stops and such costs are recorded as costs of production, which is included in cost of goods sold. Research and development costs are expensed when incurred. For the nine months ended September 30, 2015 and 2014, research and development expenses were approximately $25,000 and $128,000, respectively. Basic and Diluted Net Loss per Share The Company computes loss per share in accordance with ASC 260, Earnings per Share. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and trade receivables. The Company places its cash with high credit quality financial institutions. At times such cash may be in excess of the FDIC limit of $250,000. The Company sells primarily to companies and governmental entities across the globe. Receivables arising from those sales domestically are not collateralized; however, credit risk is minimized by continuing to diversify the customer base. International sales typically take place under the auspices of the Export Import Bank, a U.S. government entity, and are guaranteed by that entity under the terms of an insurance policy with a limit of $2 million. The limit had been $4 million, but was reduced to $2 million at June 26, 2015. The Company establishes an allowance for doubtful accounts based upon factors surrounding the credit risk of the specific customers, historical trends and other information. As of September 30, 2015, four customers represented approximately 78% of outstanding accounts receivable. As of December 31, 2014, two customers represented approximately 90% of outstanding accounts receivable balances. For the nine months ended September 30, 2015 and 2014, two customers represented approximately 77% and 85% of revenue, respectively. For the nine months ended September 30, 2015 and 2014, four vendors represented approximately 47% and 59% of total cost of goods sold, respectively. Related parties A party is considered to be related to the Company if the party directly or indirectly or through one or more intermediaries, controls, is controlled by, or is under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. A party which can significantly influence the management or operating policies of the transacting parties or if it has an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests is also a related party. An officer of the Company is also a relative of the mayor of North Vernon, which has a loan with the Company as described in Notes 12 and 13. The officer has an employment contract with the Company. Management believes compensation is based on market value comparisons and is not impacted by the related party officers relationship to the mayor of the lender, relationships have been disclosed, and transactions have been entered into on an unrelated, third party basis. Financial Instruments and Fair Value of Financial Instruments The Company applies the provisions of accounting guidance, FASB Topic ASC 825 , Financial Instruments The Company defines fair value as the price that would be received to sell an asset or be paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company applies the following fair value hierarchy upon the lowest level of input that is available and significant to the fair value measurement. The Company applies the following fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). ● Level 1 Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. ● Level 2 Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. If the asset or liability has a specified (contractual) term, a Level 2 input must be observable for substantially the full term of the asset or liability. ● Level 3 Level 3 inputs are unobservable inputs for the asset or liability in which there is little, if any, market activity for the asset or liability at the measurement date. The Company uses quoted marked prices to determine the fair values when available. If quoted market prices are not available, the Company measures fair value using valuation techniques that use, when possible, current market-based or independently-sourced market parameters, such as interest rates and currency rates. The carrying value of financial assets and liabilities recorded at fair value is measured on a recurring or nonrecurring basis. Financial assets and liabilities measured on a non-recurring basis are those that are adjusted to fair value when a significant event occurs. The Company had no financial assets or liabilities carried and measured on a nonrecurring basis during the reporting periods. Financial assets and liabilities measured on a recurring basis are those that are adjusted to fair value each time a financial statement is prepared. Accounting for Derivatives Liabilities The Company evaluates stock options, stock warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for under the relevant sections of ASC Topic 815-40, Derivative Instruments and Hedging: Contracts in Entitys Own Equity Equity Instruments Issued to Non-Employees for Acquiring Goods or Services Issuances of the Companys common stock or warrants for acquiring goods or services are measured at the fair value of the consideration or the fair value of the equity instruments issued, whichever is more reliably measurable. The measurement date for the fair value of the equity instruments issued to consultants or vendors is determined at the earlier of (i) the date at which a commitment for performance to earn the equity instruments is reached (a performance commitment which would include a penalty considered to be of a magnitude that is sufficiently large disincentive for non-performance) or (ii) the date at which performance is complete. When it is appropriate for the Company to recognize the cost of a transaction during the financial reporting periods prior to the measurement date, for purposes of recognition of costs during those periods, the equity instrument is measured at the then-current fair values at each of those interim financial reporting dates. Segment Information The Company operates in two segments in accordance with accounting guidance FASB ASC Topic 280, Segment Reporting Recently Issued Accounting Pronouncements, not yet adopted On May 28, 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entitys Ability to Continue as a Going Concern. In February 2015, the FASB issued ASU 2015-02, Consolidation (Topic 810) - Amendments to the Consolidation Analysis, In June 2014, the FASB issued ASU 2014-12, Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved After the Requisite Service Period Compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. If the performance target becomes probable of being achieved before the end of the requisite service period, the remaining unrecognized compensation cost should be recognized prospectively over the remaining requisite service period. The total amount of compensation cost recognized during and after the requisite service period should reflect the number of awards that are expected to vest and should be adjusted to reflect those awards that ultimately vest. The requisite service period ends when the employee can cease rendering service and still be eligible to vest in the award if the performance target is achieved. The amendments in this ASU are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted. The adoption of this standard is not expected to have a material impact on the Companys financial position and results of operations. |
Going Concern
Going Concern | 9 Months Ended |
Sep. 30, 2015 | |
Going Concern | |
Going Concern | NOTE 3 GOING CONCERN The accompanying financial statements have been prepared assuming the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. The Company had accumulated deficits of approximately $24,700,000 at September 30, 2015 and $21,800,000 at December 31, 2014, had net losses of approximately $2,965,000 and $3,547,000 for the nine months ended September 30, 2015 and 2014, respectively, as well as working capital deficits of approximately $4,820,000 at September 30, 2015 and approximately $4,943,000 at December 31, 2014. These matters, among others, raise substantial doubt about the Companys ability to continue as a going concern. While the Company is attempting to increase operations and generate additional revenues, the Companys cash position may not be significant enough to support the Companys daily operations. The Company will continue to pursue additional equity and/or debt financing while managing cash flows from operations in an effort to provide funds to meet its obligations on a timely basis and to support future business development. There is no assurance that these efforts will be successful. Management believes that the actions presently being taken to further implement its business plan and generate additional revenues provide the opportunity for the Company to continue as a going concern. While the Company believes in the viability of its strategy to generate additional revenues and in its ability to raise the additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Companys ability to further implement its business plans and generate additional revenues. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. |
Reverse Merger
Reverse Merger | 9 Months Ended |
Sep. 30, 2015 | |
Business Combinations [Abstract] | |
Reverse Merger | NOTE 4 REVERSE MERGER Effective May 22, 2013, Windaus Global Energy, Inc. entered into a Share Exchange Agreement with WindStream Technologies, Inc., (a California corporation) pursuant to which, the Company agreed to exchange the outstanding common and preferred stock of WindStream held by the WindStream shareholders for shares of common stock of the Company on a 1:25.808 basis. At the Closing, there were approximately 955,000 shares of WindStream common stock and 581,961 shares of WindStream preferred stock outstanding. Pursuant to the Share Exchange Agreement, the shares of WindStream common stock and preferred stock were exchanged for 39,665,899 (24,646,646 for the Windstream common shares and 15,019,253 for the Windstream preferred shares) new shares of the Companys common stock, par value of $0.001 per share. At the closing of the agreement, Windaus Global Energy, Inc. had approximately 24,000,000 shares of common stock issued outstanding and no preferred stock. The Company has retroactively restated the common shares outstanding and weighted average shares outstanding for prior years pursuant to the reverse merger share exchange ratio of 1:25.808. For accounting purposes, this transaction is being accounted for as a reverse merger and has been treated as a recapitalization of Windaus Global Energy, Inc., with WindStream Technologies, Inc. considered the accounting acquirer, and the financial statements of the accounting acquirer became the financial statements of the registrant. The Company did not recognize goodwill or any intangible assets in connection with the transaction. The 39,665,899 shares issued to the shareholder of WindStream Technologies, Inc., and its designees in conjunction with the share exchange transaction have been presented as outstanding for all periods. The historical consolidated financial statements include the operations of the accounting acquirer for all periods presented. |
Accounts Receivable
Accounts Receivable | 9 Months Ended |
Sep. 30, 2015 | |
Receivables [Abstract] | |
Accounts Receivable | NOTE 5 ACCOUNTS RECEIVABLE Accounts receivable consisted of the following as of: September 30, 2015 December 31, 2014 Accounts Receivable EXIM insured $ 82,147 $ 1,013,938 Accounts Receivable not insured 249,419 31,986 331,566 1,045,924 Allowances for doubtful accounts and sales returns and allowances (26,000 ) (28,402 ) $ 305,566 $ 1,017,522 Under the terms of a revolving line of credit agreement with the Export Import Bank as discussed in Note 10, 95% of customers outstanding balances under the terms of the Export Import Bank are guaranteed by the Export Import Bank, an agency of the United States government. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2015 | |
Inventory Disclosure [Abstract] | |
Inventories | NOTE 6 INVENTORIES Inventories consist of raw materials (which consists principally of components), work in process and finished goods. Inventory, consisting mostly of raw materials (which principally consist of components) are stated at the lower of cost or market on the first-in, first-out basis, or market. Inventories are classified as current assets. Inventories consisted of the following as of: September 30, 2015 December 31, 2014 Raw Materials $ 1,403,602 $ 729,981 Work in process 142,713 384,213 Finished goods 354,737 70,763 $ 1,901,052 $ 1,184,957 During the year ended December 31, 2014, the Company evaluated its inventory and wrote down inventory by approximately $111,000, which has been included in the accompanying Consolidated Statements of Operations. There was no such write down for the nine months ended September 30, 2015 and 2014. |
Prepaid Expenses
Prepaid Expenses | 9 Months Ended |
Sep. 30, 2015 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepaid Expenses | NOTE 7 PREPAID EXPENSES Prepaid expenses consisted of the following as of: September 30, 2015 December 31, 2014 Prepaid expenses, primarily inventory $ 287,112 $ 77,349 |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2015 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | NOTE 8 PROPERTY AND EQUIPMENT Property and equipment consisted of the following as of: September 30, 2015 December 31, 2014 Manufacturing equipment $ 155,145 $ 154,666 Factory equipment 114,561 15,800 Furniture and fixtures 7,888 7,888 Leasehold improvements 64,582 64,582 Tooling 565,160 473,893 Total 907,336 716,829 Less accumulated depreciation (566,391 ) (463,189 ) Net property, plant and equipment $ 340,945 $ 253,640 Depreciation expense for the periods ended amounted to: Nine months ended September 30, 2015 Nine months ended September 30, 2014 Depreciation Expense $ 103,000 $ 93,000 |
Accrued Liabilities
Accrued Liabilities | 9 Months Ended |
Sep. 30, 2015 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities | NOTE 9 ACCRUED LIABILITIES Accrued expenses consisted of the following as of: September 30, 2015 December 31, 2014 Accrued interest $ 717,693 $ 426,938 Accrued liabilities 282,837 25,618 Accrued payroll 432,747 332,909 Accrued warranty liability 253,000 253,000 Accrued property taxes 16,694 14,426 Total $ 1,702,971 $ 1,052,891 |
Short Term Debt
Short Term Debt | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
Short Term Debt | NOTE 10 SHORT TERM DEBT Short term debt consisted of the following: September 30, 2015 December 31, 2014 Short term debt Revolving line of credit $ 1,999,084 $ 1,991,605 2012 and 2013 notes payable to individuals 260,000 285,000 April 2014 note payable to an individual 200,000 200,000 April 2015 note payable to an individual 50,000 - $ 2,509,084 $ 2,476,605 Interest expense for the short term debt for the nine months ended September 30, 2015 and 2014 is summarized as follows: Nine months ended Nine months ended September 30, 2015 September 30, 2014 Interest expense on short term debt Revolving line of credit $ 66,562 $ 51,468 2012 and 2013 notes payable to individuals 15,933 16,793 April 2014 note payable to an individual 11,967 - April 2015 note payable to an individual 2,315 - $ 96,777 $ 68,261 Revolving Line of Credit On February 25, 2013, the Company entered into a working capital revolving line of credit with a bank, with a credit limit of $500,000 which was increased to $2 million when the line was renewed on June 26, 2014. The line is used in financing overseas sales of the Companys products. The Companys draws under the line are transaction specific and are guaranteed by the Export Import Bank, a U.S. government entity. The line is secured by a perfected first security interest on all of the Company assets. Drawdowns on the line are used to meet the working capital needs of the Company to purchase materials and fund the labor and overhead to manufacture specific products for export to specific customers. The current line, which accrues interest at a fixed rate of 6.0%, was set to expire on June 26, 2015, but was extended until October 26, 2015, and has a total credit limit of $2,000,000. The loan expired on October 26, 2015 and the lender and the Company are in discussions to renew the loan. The lender has not communicated to the Company that the loan is in default or called the loan as of the date of this filing. As the line of credits maturity date has passed, the debt has been classified as current on the accompanying Consolidated Balance Sheet. The loan is guaranteed by the Companys President. For the nine months ended September 30, 2015 and 2014, there were total draws on the line of credit of $1,070,000 and $2,045,000, respectively, and repayments of approximately $1,062,000 and $695,000 respectively. 2012 and 2013 short term notes to individuals During 2013 and 2012, the Company entered into other various notes with individuals totaling $300,000, at interest rates ranging from 5% to 18%, which are due on demand. During the nine months ended September 30, 2015 and 2014, the Company repaid $25,000 and $0, respectively, on these various notes. April 2014 short term note payable to an individual On April 15, 2014, the Company entered into a note payable for $200,000 with a term of one year and interest accruing at a rate of 8%, which is accruing and due in full at the end of the term of the note. The note was not repaid on April 15, 2015, instead the terms were amended, making this obligation due on demand. April 2015 short term note payable to an individual In April 2015, the Company entered into a $50,000 note payable with an individual at an interest of 10% and due on demand. |
Convertible Notes Payable
Convertible Notes Payable | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
Convertible Notes Payable | NOTE 11 CONVERTIBLE NOTES PAYABLE Convertible notes payable consisted of the following as of: September 30, 2015 December 31, 2014 Short term convertible notes 2013 and 2014 convertible notes payable $ 350,000 $ 550,000 Debt discount - (166,668 ) 2015 convertible notes payable 937,864 - Typenex note payable - 342,000 Vista note payable - 132,000 Redwood note payable 892,500 2,184,000 $ 2,180,364 $ 3,041,332 Derivative and warrant liability Typenex $ - $ 893,347 Vista - 195,506 2015 convertible notes payable 569,550 - Redwood 270,094 850,439 $ 839,644 $ 1,939,292 September 30, 2015 December 31, 2014 Investor Notes Typenex $ - $ 255,260 Redwood 1,535,000 1,920,000 Total Investor Notes Receivable $ 1,535,000 $ 2,175,260 Interest expense for the short term debt for the nine months ended September 30, 2015 and 2014 is summarized as follows: Nine months ended September 30, 2015 Nine Months ended September 30, 2014 Interest expense on short term convertible notes 2013 and 2014 convertible notes payable $ 36,074 $ 42,551 Debt discount 166,669 353,389 2015 convertible notes payable 41,672 - Typenex note payable 10,774 1,666 Vista note payable 21,166 14,927 Redwood note payable 135,650 - $ 412,005 $ 412,533 2013 and 2014 short term convertible notes payable, net of discount On June 1, 2014, the Company entered into a subscription agreement with one accredited investor for the issuance of a convertible promissory note in the aggregate principal amount of $400,000, which is convertible into shares of common stock of the Company at $0.40 per share, and a warrant entitling the holder to purchase up to an aggregate of 50,000 of shares of common stock of the Company at $0.40 per share. The warrant has a term of three years and vested immediately. The note bears interest at 12% for the first ninety days of the term and then bears interest at 18% for the next nine months. The note was due one year after issuance. In connection with this transaction, a major shareholder and a related party (the Pledgor) signed a pledge and security agreement, which grants a security interest in one million shares of the Companys common stock owned by the Pledgor. The Company evaluated the embedded conversion features within the convertible debt under ASC 815 Derivatives and Hedging and determined that neither the embedded conversion feature nor the warrants qualified for derivative accounting. Additionally, the instruments were evaluated under ASC 470-20 Debt with Conversion and Other Options for consideration of any beneficial conversion features. It was concluded that a beneficial conversion feature existed for the convertible debt due to the relative fair value of the warrants issued with the debt. The total debt discount recorded on the note with the June 1, 2014 date of issuance was $400,000 (warrant relative fair value of approximately $42,000 and the beneficial conversion feature was approximately $358,000) which is being amortized to interest expense over the term of the note. The warrant and beneficial conversion feature was recorded as additional paid in capital. The balance outstanding on the above note was $0 and $200,000 at September 30, 2015 and December 31, 2014, respectively. On June 1, 2015, the Company did not repay the outstanding principal and accrued interest due on June 1, 2015. In exchange for not declaring a default on the note, and after transfer of the one million shares of the Companys common stock owned by a related party to the lender, the Company and the note holder signed Amendment One to the note which reduced the conversion price of $0.40 per share to a price that was the average of the three (3) lowest closing bid prices per share for the last twenty (20) trading days prior to the date of the Notice of Conversion, discounted by 20%. Between July 9 and July 27, 2015, the assignee converted all of the outstanding principal balance and accrued interest into 29,165,277 shares of the Companys common stock at prices ranging from $0.008 to $0.015 per share. On June 1, 2013, the Company entered into subscription agreements with five accredited investors for the issuance of convertible promissory notes in the aggregate principal amount of $550,000, which are convertible into shares of common stock of the Company at $0.25 per share, and warrants entitling the holder to purchase up to an aggregate of 1,600,000 of shares of common stock of the Company at $0.25 per share. The warrants have a term of three years and vested immediately. The notes bear interest at 8% and are due in one year. Four notes, with a value of $200,000 at December 31, 2013, were converted to stock in 2014 as disclosed in Note 14. One note, for $350,000 at December 31, 2013, was not repaid timely and went into default in 2014. The interest rate on this note rose to 12% as a consequence. The Company evaluated the embedded conversion features within the convertible debt under ASC 815 Derivatives and Hedging and determined that neither the embedded conversion feature nor the warrants qualified for derivative accounting. Additionally, the instruments were evaluated under ASC 470-20 Debt with Conversion and Other Options for consideration of any beneficial conversion features. It was concluded that a beneficial conversion feature existed for the convertible debt due to the relative fair value of the warrants issued with the debt. The total debt discount recorded on the note with the June 1, 2013 date of issuance was $528,058 (warrant relative fair value of approximately $253,000 and the beneficial conversion feature was approximately $275,000) which is being amortized to interest expense over the term of the note. The unamortized debt discount balance at September 30, 2015 and December 31, 2014 was approximately $0 and $167,000, respectively and is being netted against the total convertible promissory notes principal amount of $350,000 and $550,000, respectively, for presentation in the accompanying Consolidated Balance Sheets. For the nine months ended September 30, 2015 and 2014, the Company amortized approximately $167,000 and $353,000 (including approximately $64,000 of debt discount related to notes converted to common stock, see below), respectively, to interest expense. In connection with one of the five debt issuances in 2013, the Company paid finders fees of approximately $42,000 as well as 140,000 common stock warrants at $0.05 per share. The warrants vest immediately and have a three year term. The fair value of the warrants was determined to be approximately $48,000 based on the Black Scholes option pricing model, using the same assumptions as those used for the warrants above, except the exercise price was $0.05 per share. The combined value of the warrants of $48,000 and cash of $42,000 amounted to approximately $90,000 which was capitalized as a deferred financing cost and is being amortized to interest expense over the life of the notes. Amortization of deferred financing costs, which has been included interest expense, for the nine months ended September 30, 2015 and 2014, was approximately $0 and $28,000, respectively. 2015 convertible notes payable LG Capital Financing Note 1 On March 5, 2015, the Company entered into a securities purchase agreement with LG Capital Funding, LLC, an accredited investor (LG) whereby the Company issued and sold to LG an 8% convertible note (the LG Note) in the principal amount of $105,000 for $105,000. The LG Note is due on the first anniversary of issuance and bears interest at the rate of 8% per annum. The LG Note is convertible, in whole or in part, into shares of Common Stock at the option of LG, at a conversion price equal to 60% of the lowest trading price of the Common Stock for the 15 trading days immediately preceding, and including, the date of conversion, subject to adjustment and further discount upon certain events, as set forth in the LG Note. The Company has the right, at any time prior to the six month anniversary of the issuance date of the LG Note to redeem the outstanding LG Note at a redemption price equal to an amount between 115% and 145% of the amount of principal plus interest being redeemed, depending on the date of prepayment. The convertibility of the LG Note may be limited if, upon conversion, the holder thereof or any of its affiliates would beneficially own more than 9.9% of Common Stock. The Company reimbursed LG for all costs and expenses incurred by it in connection with the transactions in an amount equal to $5,000 and paid $8,000 to Carter Terry & Company for due diligence fees. See Note 21 for conversions of outstanding debt subsequent to September 30, 2015. JSJ Investments Financing Note 1 On March 6, 2015, the Company issued and sold to JSJ Investments Inc. (JSJ) a convertible note (the JSJ Note) in the principal amount of $100,000, for $100,000. The JSJ Note is due on demand and bears interest at the rate of 12% per annum. The JSJ Note is convertible, in whole or in part, into shares of Common Stock at the option of JSJ, at a conversion price equal to the lesser of (i) 55% of the lowest trading price of the Common Stock for the 20 trading days immediately preceding the date of issuance of the JSJ Note or (ii) 55% of the lowest trading price of the Common Stock for the 20 trading days immediately preceding the date of conversion subject to adjustment and further discount upon certain events, as set forth in the JSJ Note. The Company has the right to redeem the outstanding JSJ Note at a redemption price equal to 150% of the amount of principal and interest being redeemed, provided that any repayment, including at maturity, can only be made with the consent of JSJ. The Company reimbursed JSJ for all costs and expenses incurred by it in connection with the transactions in an amount equal to $2,000 and paid $10,000 to Carter Terry & Company in connection with due diligence fees. Since the inception of Note #1, through September 30, 2015, JSJ converted approximately $59,515 of the outstanding balance of Note #1 into 27,125,836 shares of common stock at prices based on a formula which resulted in prices from $0.0013 to $0.0033. See Note 21 for conversions of outstanding debt subsequent to September 30, 2015. JMJ Financial Financing On March 9, 2015, the Company issued and sold to JMJ Financial (JMJ) a convertible note (the JMJ Note) in the principal amount of $100,000 for $90,000. JMJ has the right to invest an additional $400,000 on the same terms and conditions from time to time at its sole discretion. Each portion funded of the JMJ Note is due on the second anniversary of funding and bears no interest for the first three months and then a one-time interest charge of 12% will be due. The JMJ Note is convertible, in whole or in part, into shares of Common Stock at the option of JMJ at a conversion price equal to the lesser of (i) $0.084 or (ii) 60% of the lowest trading price of the Common Stock for the 25 trading days immediately preceding the date of conversion subject to adjustment and further discount upon certain events, as set forth in the JMJ Note. The convertibility of the JMJ Note may be limited if, upon conversion, the holder thereof or any of its affiliates would beneficially own more than 4.99% of Common Stock. The Company granted JMJ piggyback registration rights on the shares issuable upon conversion of the JMJ Note. If the Company fails to include such shares, the Company shall pay JMJ liquidated damages of 25% of the outstanding principal amount of the JMJ Note, but not less than $25,000. Since the inception of the JMJ Note through September 30, 2015, JMJ converted approximately $23,040 of the outstanding balance of the JMJ Note into approximately 20,000,000 shares of common stock at prices based on a formula which resulted in prices from $0.0006 to $0.0036. See Note 21 for conversions of outstanding debt subsequent to September 30, 2015. EMA Financial Financing On March 10, 2015, the Company entered into a securities purchase agreement with EMA Financial, LLC, an accredited investor (EMA) whereby the Company issued and sold to EMA an 8% convertible note (the EMA Note) in the principal amount of $100,000 for $90,000. The EMA Note is due on the first anniversary of issuance and bears interest at the rate of 10% per annum. The EMA Note is convertible, in whole or in part, into shares of Common Stock at the option of EMA at a conversion price equal to 60% of the lowest trading price of the Common Stock for the 15 trading days immediately preceding the date of conversion subject to adjustment and further discount upon certain events, as set forth in the EMA Note. The Company has the right, at any time prior to the four month anniversary of the issuance date of the EMA Note, upon at least five trading days prior written notice, to redeem the outstanding EMA Note at a redemption price equal to 135% of the amount of principal and interest being redeemed. The convertibility of the EMA Note may be limited if, upon conversion, the holder thereof or any of its affiliates would beneficially own more than 4.9% of Common Stock. The Company granted EMA a right of first refusal on all future financings for a year from the date of issuance of the EMA Note. The Company reimbursed EMA for all costs and expenses incurred by it in connection with the transactions in an amount equal to $3,500. Since the inception of the EMA Note through September 30, 2015, EMA converted approximately $27,932 of the outstanding balance of the EMA Note into 17,529,855 shares of common stock at prices based on a formula which resulted in prices from $0.00108 to $0.0027. See Note 21 for conversions of outstanding debt subsequent to September 30, 2015. Adar Bays Financing On March 20, 2015, the Company entered into a securities purchase agreement with Adar Bays, LLC, an accredited investor (Adar) whereby the Company issued and sold to Adar an 8% convertible note (the Adar Note) in the principal amount of $50,000 for $50,000. The Adar Note is due on the first anniversary of issuance and bears interest at the rate of 8% per annum. The Adar Note is convertible, in whole or in part, into shares of Common Stock at the option of Adar at a conversion price equal to 65% of the lowest trading price of the Common Stock for the 15 trading days immediately preceding and including the date of conversion, subject to adjustment and further discount upon certain events, as set forth in the Adar Note. The Company has the right, at any time prior to the six month anniversary of the issuance date of the Adar Note to redeem the outstanding Adar Note at a redemption price equal to 150% of the amount of principal being redeemed plus interest. The convertibility of the Adar Note may be limited if, upon conversion, the holder thereof or any of its affiliates would beneficially own more than 9.9% of Common Stock. The Company reimbursed Adar for all costs and expenses incurred by it in connection with the transaction in an amount equal to $2,500 and paid $4,000 to Carter Terry & Company in connection with due diligence fees. Union Capital Note In April 2015, the Company entered into a securities purchase agreement with Union Capital, LLC, an accredited investor (Union Capital) whereby the Company issued and sold to Union Capital an 8% convertible note (the Union Capital Note) in the principal amount of $75,000 for $75,000. The Union Capital Note is due on the first anniversary of issuance and bears interest at the rate of 8% per annum. The Union Capital Note is convertible, in whole or in part, into shares of Common Stock at the option of Union Capital, at a conversion price equal to 60% of the lowest trading price of the Common Stock for the 15 trading days immediately preceding, and including, the date of conversion, subject to adjustment and further discount upon certain events, as set forth in the Union Capital Note. The Company reimbursed Union Capital for all costs and expenses incurred by it in connection with the transactions in an amount equal to $3,500 and paid $6,000 to Carter Terry & Company in connection with due diligence fees. See Note 21 for conversions of outstanding debt subsequent to September 30, 2015. JSJ Investments Financing Note 2 On April 20, 2015, the Company issued and sold to JSJ Investments a convertible note (the JSJ Note II) in the principal amount of $112,000, for $112,000. The JSJ Note II is due on demand and bears interest at the rate of 12% per annum. The JSJ Note II is convertible, in whole or in part, into shares of Common Stock at the option of JSJ, at a conversion price equal to the lesser of (i) 45% of the lowest trading price of the Common Stock for the 20 trading days immediately preceding the date of issuance of the JSJ Note II or (ii) 45% of the lowest trading price of the Common Stock for the 20 trading days immediately preceding the date of conversion subject to adjustment and further discount upon certain events, as set forth in the JSJ Note II. The Company has the right to redeem the outstanding JSJ Note II at a redemption price equal to 135% to 145% of the amount of principal and interest being redeemed, provided that any repayment, including at maturity, can only be made with the consent of JSJ. The Company reimbursed JSJ for all costs and expenses incurred by it in connection with the transactions in an amount equal to $2,000 and paid $8,000 to Carter Terry & Company in connection with due diligence fees. Black Forest Capital LLC, Financing On July 16, 2015, the Company issued and sold to Black Forest Capital LLC (Black Forest) a convertible note (the Black Forest Note) in the principal amount of $150,000 for $140,000. The Black Forest Note is due on the first anniversary of funding and bears interest at a rate of 8%. The Black Forest Note is convertible, in whole or in part, into shares of Common Stock at the option of Black Forest at a conversion price equal to 60% of the lowest trading price of the Common Stock for the 20 trading days immediately preceding the date of conversion subject to adjustment and further discount upon certain events, as set forth in the Black Forest Note. The Company has the right within 180 days of the date of the note to redeem the outstanding Black Forest Note at a redemption price equal to 130% of the amount of principal and interest being redeemed, provided that any repayment, including at maturity, can only be made with the consent of Black Forest. The Company reimbursed Black Forest for all costs and expenses incurred by it in connection with the transactions in an amount equal to $12,000 and paid $12,000 to Carter Terry & Company in connection with due diligence fees. GW Holdings Group LLC On August 11, 2015, the Company issued and sold to GW Holdings Group, LLC. (GW) a convertible note (the GW Note) in the principal amount of $61,000 for $50,000. The GW Note is due on the first anniversary of funding and bears interest at a rate of 8%. The GW Note is convertible, in whole or in part, into shares of Common Stock at the option of GW at a conversion price equal to 60% of the lowest trading price of the Common Stock for the 15 trading days immediately preceding the date of conversion subject to adjustment and further discount upon certain events, as set forth in the GW Note. The Company has the right within 180 days of the date of the note to redeem the outstanding GW Note at a redemption price starting at 135% to The Company reimbursed GW for all costs and expenses incurred by it in connection with the transactions in an amount equal to $3,000 and paid $3,000 in connection with legal fees and an amount equal to $4,000 and paid $4,000 to Carter Terry & Company in connection with due diligence fees. LG Capital Financing Note 2 On August 14, 2015, the Company entered into a securities purchase agreement with LG whereby the Company issued and sold to LG an 8% convertible note (the LG Note #2) in the principal amount of $105,000 for $90,000. The LG Note #2 is due on the first anniversary of issuance and bears interest at the rate of 8% per annum. The LG Note #2 is convertible, in whole or in part, into shares of Common Stock at the option of LG, at a conversion price equal to 60% of the lowest trading price of the Common Stock for the 15 trading days immediately preceding, and including, the date of conversion, subject to adjustment and further discount upon certain events, as set forth in the LG Note #2. The Company has the right, at any time prior to the six month anniversary of the issuance date of the LG Note #2 to redeem the outstanding LG Note at a redemption price equal to an amount between 115% and 145% of the amount of principal plus interest being redeemed, depending on the date of prepayment. The convertibility of the LG Note may be limited if, upon conversion, the holder thereof or any of its affiliates would beneficially own more than 9.9% of Common Stock. The Company reimbursed LG for all costs and expenses incurred by it in connection with the transactions in an amount equal to $5,000 and paid $5,000 for legal fees and an amount equal to $10,000 paid $10,000 to Carter Terry & Company for due diligence fees. Identification and Valuation of Derivatives in the Above Ten Notes The Company evaluated the embedded derivative criteria in ASC 815, and concluded that because the above notes could be readily convertible to cash by the Investor, the conversion feature meets the definition of an embedded derivative that should be separated from the note and accounted for as a derivative liability. The Company has not elected to initially and subsequently measure the note as a hybrid instrument in its entirety at fair value. Therefore, in accordance with ASC 815, the Company is accounting for all the embedded derivatives identified in the note as a single compound embedded derivative. The fair value of the embedded derivative liability is measured in accordance with ASC 820, using monte carlo simulation modeling. The compound embedded derivative was recorded as a derivative liability on the Consolidated Balance Sheet at its fair value of approximately $569,550 at September 30, 2015. At inception, the carrying value of the above ten notes was as follows: Face amount of note $ 958,000 Derivative and warrant liability - $ 958,000 At September 30, 2015, the carrying value of the above ten notes was as follows: Face amount of note $ 937,864 Derivative and warrant liability 569,550 $ 1,507,414 Convertible Note Payable to Typenex Co-Investment, LLC On September 26, 2014 (the Effective Date), the Company entered into a Securities Purchase Agreement with Typenex Co-Investment, LLC (Investor or Lender) whereby it sold in a private placement a 10% Collateralized Convertible Promissory note with a $550,000 principal amount, which was issued at a $50,000 discount from the face amount (the OID), and three warrants to purchase the Companys Common Stock at an exercise price of $.80 per share, exercisable at various dates (the Investor Warrants), in exchange for $250,000 cash and two 8% Investor Notes (Investor Note #1 and Investor Note #2) with principal balances of $125,000 each. The note is collateralized by the Investor Notes. The note is separated into three Conversion Eligible Tranches (discussed under Lender Conversion Initial Tranche $ 275,000 First Subsequent Tranche 137,500 Second Subsequent Tranche 137,500 $ 550,000 The note accrues interest at 10%, and is repayable in eight monthly installments beginning March 26, 2015, until the Maturity Date of October 26, 2015 (Installment Dates). At each of the Installment Dates, the Company is required to pay to the Lender the applicable Installment Amount due on such date. Installment Amount means $68,750 ($550,000 ÷ 8), plus the sum of any accrued and unpaid interest that has been added to the lowest-numbered then-current Conversion Eligible Tranche as of the applicable Installment Date and accrued and unpaid late charges that have been added to the lowest-numbered then current Conversion Eligible Tranche, if any, under the note as of the applicable Installment Date, and any other amounts accruing or owing to Lender under the note as of such Installment Date, provided, however, that if the remaining amount owing under all then-existing Conversion Eligible Tranches or otherwise with respect to the note as of the applicable Installment Date is less than the Installment Amount set forth above, then the Installment Amount for such Installment Date (and only such Installment Amount) will be reduced by the amount necessary to cause such Installment Amount to equal such outstanding amount. Installment Conversions At the option of the Company or the Lender, payments of each Installment Amount may be made (a) in cash, or (b) by converting such Installment Amount into a number of shares of Common Stock (Installment Conversion Shares) derived by dividing the portion of the applicable Installment Amount being converted by the Installment Conversion Price) an Installment Conversion), or (c) by any combination of the foregoing, so long as the cash is delivered to the Lender on the applicable Installment Date and the Installment Conversion Shares are delivered to the Lender on or before the applicable delivery date. The Installment Conversion Price is the lesser of (i) the Lender Conversion Price (defined under Lender Conversion On the date that is twenty (20) trading days (a True-Up Date) from each date Borrower delivers Free Trading (as defined below) Installment Conversion Shares to the Lender, there will be a true-up where the Company will deliver to the Lender additional Installment Conversion Shares (True-Up Shares) if the Installment Conversion Price as of the True-Up Date is less than the Installment Conversion Price used in the applicable Installment Notice. In such event, the Company must deliver to the Lender within three (3) trading days of the True-Up Date (the True-Up Share Delivery Date) a number of True-Up Shares equal to the difference between the number of Installment Conversion Shares that would have been delivered to the Lender on the True-Up Date based on the Installment Conversion Price as of the True-Up Date and the number of Installment Conversion Shares originally delivered to the Lender pursuant to the applicable Installment Notice. The Company evaluated the note under the requirements of ASC 480 Distinguishing Liabilities From Equity Derivatives and Hedging Lender Conversion The Company evaluated the embedded derivative criteria in ASC 815, and concluded that because the Common Stock that would be delivered by the Company if an Installment Conversion is elected (including True-Up Shares) would be readily convertible to cash by the Investor, the Installment Conversion feature meets the definition of an embedded derivative that should be separated from the note and accounted for as a derivative liability. During the nine months ended September 30, 2015, the Company converted the required Installment Amounts into shares of the Companys common stock. Using the formula outlined above, the Company made installment payments of approximately $279,272, by issuing approximately 20,577,648 shares of the Companys common stock to the Lender. On August 31, 2015, the Lender provided the true up notice, as discussed about, for the June 26, 215 installment, installment #4 and the July 26, 2015 installment, installment #5. Consequently the Company issued 5,767,145 additional shares of the Companys common stock based on the Lenders calculation of the installment #4 true up and 2,646,216 shares of the Companys common stock based on the Lenders calculation of the installment #5 true up. See Note 21 for conversions of outstanding debt subsequent to September 30, 2015. Lender Conversion The Lender has the right at any time after the Effective Date until the outstanding balance of the note has been paid in full, including without limitation (i) until any Optional Prepayment Date or at any time thereafter with respect to any amount that is not prepaid, and (ii) during or after any Fundamental Default Measuring Period, at its election, to convert (each instance of conversion is referred to as a Lender Conversion) all or any part of the outstanding balance into shares (Lender Conversion Shares) of the Companys common stock, of the portion of the outstanding balance being converted (the Conversion Amount) divided by the Lender Conversion Price of $0.80, subject to potential future adjustments described below. The conversion by the Lender of any portion of the outstanding balance is only exercisable in three (3) tranches (each, a Tranche), consisting of (i) an initial Tranche in an amount equal to $275,000 and any interest, costs, fees or charges accrued thereon or added thereto under the terms of the note and the other Transaction Documents (as defined in the Securities Purchase Agreement) (the Initial Tranche), and (ii) two (2) additional Tranches, each in the amount of $137,500, plus any interest, costs, fees or charges accrued thereon or added thereto under the terms of the note and the other Transaction Documents (each, a Subsequent Tranche). The Initial Tranche corresponds to the initial cash proceeds of $250,000 plus $25,000 of the OID, and may be converted any time subsequent to the Effective Date. The first Subsequent Tranche corresponds to Investor Note #1 plus $12,500 of the OID, and the second Subsequent Tranche corresponds to Investor Note #2 plus $12,500 of the OID. The Lenders right to convert any portion of any of the Subsequent Tranches is conditioned upon the Lenders payment in full of the Investor Note corresponding to such Subsequent Tranche (upon the satisfaction of such condition, such Subsequent Tranche becomes a Conversion Eligible Tranche). The Initial Tranche was immediately a Conversion Eligible Tranche at the Effective Date. The Company evaluated the note under the requirements of ASC 815, Derivatives and Hedging The Company also evaluated the embedded derivative criteria in ASC 815, and concluded that the default and remedy provisions of the note (see Default Provisions The Company evaluated the Companys option to settle the Lender Conversion in cash in the event the Lender elects to convert subsequent to the occurrence of an Event of Default under the requirements of ASC 815, and included that it meets the definition of an embedded derivative that should be separated from the note and accounted for as a derivative liability. The Company evaluated the Lender Conversion Delay provision under the requirements of ASC 815 and concluded it meets the definition of an embedded derivative that should be separated from the note and accounted for as a derivative liability. The Company evaluated the embedded derivative criteria in ASC 815, and concluded that because certain of the Events of Default under the note are factors that are unrelated to a deterioration of the creditworthiness of the Company, the Events of Default and Default Interest provisions of the note are not considered clearly and closely related to the characteristics of debt. Based on meeting all the criteria in the definition, the Company concluded that the Events of Default and Default Interest provisions each meet the definition of an embedded derivative that should be separated from the note and accounted for as a derivative liability. Company Prepayment Option So long as no Event of Default has occurred subsequent to the effective date, the Company may at any time up to the maturity date optionally prepay, in full, the outstanding balance of the note at a price of 125% of the aggregate principal amount of the note, plus accrued and unpaid interest, if any, at the date of prepayment (Optional Prepayment Amount). The Company evaluated the embedded derivative criteria in ASC 815, and concluded that the Companys prepayment option is not the type of call option that meets the definition of an embedded derivative. However, the Optional Prepayment Liquidated Damages clause does meet the definition of an embedded derivative that should be separated from the note and accounted for as a derivative liability. Investor Warrants The Investor Warrants allow the Investor to purchase the number of shares of common stock (Warrant Shares) equal to the purchase price allocated to each Investor Warrant divided by the market price of the Companys common stock immediately preceding the date each Investor Warrant first becomes exercisable, as such the number may be adjusted from time to time pursuant to the antidilution provisions of the Investor Warrant. The Purc |
Note Payable
Note Payable | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
Note Payable | NOTE 12 NOTE PAYABLE In July 2011, the Company entered into a $1,400,000 note agreement with the City of North Vernon, Indiana. Interest accrues at 5.5% and the note matures on August 1, 2016. As of September 30, 2015 and December 31, 2014, the note had an outstanding balance of $1,280,000 and $1,325,000, respectively. The Company was unable to pay the interest and principal payments due on August 1, 2012 and was in default of such payment. The Company was able to negotiate payment terms with the City of North Vernon, Indiana, which allowed the Company to delay scheduled repayments of the loan. During the nine months ended September 30, 2015 and 2014, the Company made $45,000 and $60,000, respectively, in payments to the City of North Vernon for principal. Principal and interest payments are expected to be paid in each fiscal year as follows: Principal Interest Total 2015 $ 62,838 $ 177,259 $ 240,097 2016 1,217,162 114,276 1,331,438 $ 1,280,000 $ 291,535 $ 1,571,535 Interest expense incurred and accrued on the note payable was approximately $53,000 and $68,000 for the nine months ended September 30, 2015 and 2014, respectively. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 13 RELATED PARTY TRANSACTIONS Short Term Debt - Related Parties During the nine months ended September 30, 2015 and 2014, the Companys President advanced $0 and $50,000, respectively, to the Company and the Company repaid $0 and $55,000, respectively. As of September 30, 2015 and December 31, 2014, the outstanding balance of short term debt related parties was $221,000. The amounts accrue interest at 10% and are due on demand. Interest expense incurred and accrued on Short Term Debt Related Parties was approximately $16,000 and $7,800 for the nine months ended September 30, 2015 and 2014, respectively. Chief Operating Officer and the City of North Vernon The Companys Chief Operating Officer is a relative of the mayor of North Vernon. The City of North Vernon loaned the Company $1,400,000 as described in Note 12. The terms of the loan were presented to and approved by the city council. The related party officer is an employee under the terms of an employment contract and his continued employment is based solely on performance. Management believes all compensation paid to the Chief Operating Officer is based on market value comparisons and is not impacted at all by the related party officers relationship with the mayor of the lender. |
Common Stock
Common Stock | 9 Months Ended |
Sep. 30, 2015 | |
Equity [Abstract] | |
Common Stock | NOTE 14 - COMMON STOCK Common and Preferred Stock As described in Note 4, the Company entered into a Share Exchange Agreement with WindStream Technologies, Inc., a California corporation, pursuant to which the Company agreed to exchange the outstanding common and preferred stock of WindStream held by the WindStream shareholders for shares of common stock of the Company on a 1:25.808 basis. At the Closing, there were approximately 955,000 shares of WindStream common stock and 581,961 shares of WindStream preferred stock outstanding. Pursuant to the Share Exchange Agreement, the shares of WindStream common stock and preferred stock were exchanged for 39,665,899 (24,646,646 for the Windstream common shares and 15,019,253 for the Windstream preferred shares) new shares of the Companys common stock, par value of $0.001 per share. At the closing of the agreement, Windaus Global Energy, Inc. had approximately 24,000,000 shares of common stock issued outstanding and no preferred stock. The Companys Articles of Incorporation and Bylaws permit the Company to issue, without any further vote or action by the stockholders, shares of preferred stock in one or more series, and with respect to each series, to fix the number of shares constituting the series and the designation of the series the voting powers (if any) of the shares of the series, and the preferences and relative, participating, optional, and other special rights, if any, and any qualifications, limitations, or restrictions of the shares of the series. The Companys Articles of Incorporation and Wyoming law allow the Company to issue an unlimited number of shares of equity stock, both common and preferred. During the nine months ended September 30, 2015 and 2014, after the date of the share Agreement, May 13, 2013, the Company has issued no preferred shares and has not sought the approval of the Board of Directors to issue any preferred shares. See Notes 11 and 21 for a description of the conversion by certain lenders of their outstanding convertible debt into shares of the Companys common stock in 2015. As discussed in Note 18, the Company has an agreement with Carter Terry to provide various investment banking services. Under the terms of the agreement, Carter Terry was to receive warrants in connection with various fundings. On April 10, 2015, the Company and Carter Terry agreed to issue 300,000 shares of the Companys stock to Carter Terry to eliminate the issuance of warrants to Carter Terry. The Company had entered into an agreement with an individual for consulting services in connection with fund raising with potential investors. On April 22, 2015, the Company and the individual entered into an agreement whereby the Company would issue 125,000 shares of the Companys common stock to the individual for payment of these services rendered. On April 24, 2015, a convertible debt holder exercised their warrant exercisable into 199,396 at a price determined by a formula which resulted in the Company issuing 3,647,023 shares of the Companys common stock to the convertible debt holder. On June 17, 2015, the Company issued an aggregate of 11,344,886 shares of common stock to certain investors who participated in the Companys private placements of securities on August 29, 2014, September 22, 2014 and October 3, 2014 in connection with a settlement agreement and general release with these investors. As discussed in Note 11 on September 18, 2015, a convertible debt holder notified the Company of their intention to exercise their warrant for 31,719 exercise shares as defined in the warrant at a price determined by a formula defined in the warrant which resulted in the Company issuing 36,150,462 shares of the Companys common stock to the Lender. |
Stock Options
Stock Options | 9 Months Ended |
Sep. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Options | NOTE 15 STOCK OPTIONS Stock based compensation Stock option activity is presented in the table below: Number of Shares Weighted average Exercise Price Weight average Contractual Term (years) Aggregate Intrinsic Value Outstanding at December 31, 2013 10,110,640 $ 0.08 2.75 - Granted 16,100,000 0.15 10.00 - Exercised (448,993 ) (0.05 ) (3.00 ) Outstanding at December 31, 2014 25,761,647 0.09 6.20 - Granted 250,000 .15 3.0 - Exercised - - - - Outstanding at September 30, 2015 26,011,647 $ 0.09 6.19 - The Company recognized stock compensation expense as follows: Nine months ended September 30, 2015 Nine months ended September 30, 2014 $ 246,399 $ 122,126 The total remainder of stock compensation expense to be recognized through the vesting period of the above options, at September 30, 2015, was approximately $169,000. The total number of options vested as of September 30, 2015 was 26,011,647 and the total options expected to vest, as of September 30, 2015, was 26,011,647. Stock Incentive Plan On November 11, 2014, the Company adopted the 2014 Stock Incentive Plan. The plan provides for Options, Stock Appreciation Rights, Dividend Equivalent Rights Restricted Stock, Restricted Stock Units or other rights or benefits under the Plan. The maximum aggregate number of shares which may be issued pursuant to all awards (including Incentive Stock Options) is five million (5,000,000) shares. The shares may be authorized, but unissued, or reacquired common stock In addition, Dividend Equivalent Rights shall be payable solely in cash and therefore the issuance of Dividend Equivalent Rights shall not be deemed to reduce the maximum aggregate number of shares which may be issued under the plan. The plan has a term of ten years. Under the terms of this plan, shares vest as follows: 25% of the shares subject to the option shall vest twelve (12) months after the Vesting Commencement Date, and 1/48 of the shares subject to the option shall vest on each monthly anniversary of the Vesting Commencement Date, thereafter. Stock option activity under the Incentive Stock Option Plan is presented in the table below: Number of Shares Weighted average Exercise Price Weight average Contractual Term (years) Outstanding at December 31, 2013 - $ - - Granted 700,000 0.15 3.00 Outstanding at December 31, 2014 700,000 $ 0.15 3.00 Forfeited (106,250 ) - - Outstanding at September 30, 2015 593,750 $ 0.15 2.14 During the nine months ended September 30, 2015 options for approximately |
Warrants
Warrants | 9 Months Ended |
Sep. 30, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Warrants | NOTE 16 WARRANTS Fair value of warrants is generally based on independent sources such as quoted market prices or dealer price quotations. To the extent certain financial instruments trade infrequently or are non-marketable securities, they may not have readily determinable fair values. The Company estimated the fair value of the warrants using a Black-Scholes option pricing model and available information that management deems most relevant. The stock price is the closing price of the Companys stock on the valuation date; the risk free interest rate is based on the U.S. Government Securities average rate for 1 and 2 year maturities on the date of issuance; the volatility is a statistical measure (standard deviation) of the tendency of the Companys stock price to change over time; the exercise price is the price at which the warrants can be purchased by exercising prior to its expiration; the dividend yield is not applicable due to the Company not intending to declare dividends; the contractual life is based on the average exercise period of the warrants; and the fair market value is value of the warrants based on the Black-Scholes model on the valuation date. In April 2015, a convertible debt holder notified the Company of their intention to exercise their warrant exercisable into 199,396 at a price determined by a formula which resulted in the Company issuing 3,647,023 shares of the Companys common stock to the convertible debt holder. On September 18, 2015, a convertible debt holder notified the Company of their intention to exercise their warrant for 71,342 exercise shares as defined in the warrant at a price determined by a formula defined in the warrant which resulted in the Company issuing 20,800,157 shares of the Companys common stock to the Lender. In connection with the various agreements with an investment advisor (See Note 18) and in settlement of various disputes between the Company and the investment advisor, between May 1, and May 12, 2015, the Company issued warrants to purchase 522,983 shares of the Companys common stock at a price of $0.40 per share with a term of five years from the date of the original investments by investors which came to the Company through this investment advisor in August through October 2014. The warrants were made effective as of those dates of investments. None of the warrants have been exercised at September 30, 2015. The following represents a summary of the warrants outstanding at September 30, 2015 and December 31, 2014 and changes during the periods then ended: Warrants Weighted Average Exercise Price Outstanding, December 31, 2013 9,106,000 $ 0.42 Granted 722,472 0.65 Warrants exchanged for common stock (135,932 ) (0.05 ) Outstanding, December 31, 2014 9,692,540 $ 0.44 Granted 522,983 0.04 Warrants exchanged for common stock (199,396 ) (0.40 ) Outstanding, June 30, 2015 10,016,127 $ 0.45 Warrants exchanged for common stock (71,342 ) (0.40 ) Outstanding, September 30, 2015 9,944,785 $ 0.45 |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | NOTE 17 - EARNINGS PER SHARE FASB ASC Topic 260, Earnings Per Share Basic earnings (loss) per share are computed by dividing the net loss available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted loss per share is computed similar to basic loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares are dilutive. As the Company has net losses, the Company had no potential dilutive securities for the nine months ended September 30, 2015 and 2014 as they would be anti-dilutive. Therefore, there is no difference in the basic and dilutive loss per share. The following table sets for the computation of basic and diluted net loss per share: For the For the Nine months Nine months Ended Ended September 30, 2015 September 30, 2014 Net loss attributable to common stockholders $ (2,965,069 ) $ (3,546,789 ) Basic weighted average outstanding shares of common stock 139,103,989 85,200,993 Dilutive effect of common stock equivalents Dilutive weighted average common stock equivalents 139,103,989 85,200,993 Net loss per share of voting and nonvoting common stock Basic and Diluted $ (0.02 ) $ (0.04 ) |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 18 COMMITMENTS AND CONTINGENCIES Legal From time to time, the Company may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm the Companys business. Except as disclosed below, the Company is currently not aware of any such legal proceedings or claims that the Company believes will have, individually or in the aggregate, a material adverse effect on the Companys business, financial conditions or operating results. On May 28, 2015, a former employee filed a complaint in U.S. District Court against the Company to recover unpaid wages, unreimbursed expenses, liquidated damages, attorneys fees and costs under the provisions of the Fair Labor Standards Act of 1938. The Company filed an answer to the complaint on July 27, 2015. The wages and unreimbursed business expenses have always been accrued in the Companys financial statements since those obligations arose in accordance with generally accepted accounting principles. The two parties do not appear to disagree on the unpaid wages and unreimbursed expenses due the former employee. Counsels for the parties continue to be in discussion to attempt to work out a settlement in order to avoid the costs of pursuing and defending this matter in court. The next step for this action is a settlement conference with the magistrate and the various parties tentatively scheduled for early December 2015. Depositions may start just before or just after that conference, if not resolution is reached. The Company believes that this case is too early in its development for the Company to recognize any additional liabilities except those the Company has already recognized. While incapable of estimation, in the opinion of management, the individual regulatory and legal matters in which it might involve in the future are not expected to have a material adverse effect on the Companys financial position, results of operations, or cash flows. Leases The Company leased various facilities under a non-cancelable operating lease which expired on September 30, 2013. That lease required minimum monthly rental payments of $4,750 plus various expenses incidental to use of the property. The Company had an option to extend the lease for one twelve month period. Effective October 1, 2014, the Company entered into a new lease agreement for this facility with a term of twenty-four months with an option for another twelve months. Rent in the first twenty-four months is $7,800 per month plus various expenses incidental to use of the property. If the Company exercises its option for another twelve months, the rent during that period will be $8,500 per month plus various expenses incidental to use of the property. In 2014, WET leased office, approximately 9,500 square feet, and manufacturing space, approximately 50,000 square feet, in India in connection with expanding its operations. The office space lease is a month to month lease with annual rent of approximately $24,000 and was occupied in December 2014. The manufacturing facility lease is a six year lease with annual rent of approximately $120,000. The manufacturing space lease commenced on April 1, 2015 when WET occupied the space. Rent expense for the nine months ended September 30, 2015 and 2014 was $188,534 and $55,915, respectively. Sales During the second quarter of 2014, the Company received two signed purchase orders from one customer, Jamaicas national utility company, Jamaica Public Service Co., for the delivery of the Companys clean energy products as well as related energy storage, back-up emergency power equipment and custom energy monitoring, data collection and system analysis over the next eighteen to twenty four months. The purchase orders contain the Companys customary terms regarding payment terms, return of products and are consistent with the Companys terms with other customers. Sales and Distribution Agreements In the ordinary course of business, the Company enters into sales and distribution agreements with various parties in defined geographic areas around the world. The agreements are usually non-exclusive and contain general commercial terms, but no specific financial terms. It is the Companys practice that such agreements do not contain performance related terms or favorable payment terms. These agreements are usually cancellable with written notice by either party and do not have terms greater than one year. Investment Advisory Services WestPark Capital Inc. During 2014, the Company entered into multiple agreements with the same investment banking firm, as follows: ● Side letter agreement, dated May 1, 2014, which among other terms, for the first $2 million raised required fees of 1.25% of fully diluted equity of the Company and for each $1.5 million raised thereafter, 500,000 shares of the Companys common stock. No funds were raised under this side letter agreement; ● Institutional Financing Engagement agreement, dated July 30, 2014, which among other terms, had a term of nine months, required the completion of an institutional financing offering, and if successful, the Company was to pay a fee in cash of 10% of the qualifying investments at closing as well as issue warrants to the investment banking firm with a five year term equal to 10% amount raised in the institutional offering. No funds have been raised under the terms of this agreement and this agreement has expired and was not renewed; and ● Investment Banking Engagement agreement, dated September 11, 2014, which among other terms, had a term of one year, with an option to terminate the agreement after nine months, the investment banking firm will provide advisory services in the area of corporate development, corporate finance and/or capital placement transactions. The Agreement specifies that all fees be on a success basis. If no debt or equity transaction is completed, the Company has no obligation under the terms of this agreement other than a monthly fee of $10,000 per month. The value of the services, and the amount due to the investment banker under this agreement, have not been agreed to by the two parties. In connection with the various agreements with WestPark and in settlement of various disputes between the Company and WestPark, between May 1, and May 12, 2015, the Company issued warrants to purchase 522,983 shares of the Companys common stock at a price of $0.40 per share with a term of five years from the date of the original investments by investors which came to the Company through WestPark in August through October 2014. The warrants were made effective as of those dates of investments. None of the warrants have been exercised at September 30, 2015. Carter Terry On August 18, 2014, the Company entered into a private placement offering agreement with an investment banking firm for advisory services in the areas of corporate development, corporate finance and/or capital placement transactions. The agreement was on an exclusive basis for sixty days from the date of the agreement and then reverted to a non-exclusive basis, expiring one year from the date the agreement was signed, with an option to extend the agreement after nine months, or either party can terminate in writing to the other party. The agreement specifies that all fees be on a success basis. If no debt or equity transaction is completed, the Company has no obligation under the terms of this agreement. In the event of a successful transaction, the investment banking firm will earn fees, 8% of the amount of any equity or hybrid equity raised up to $5 million, and 6% over $5 million, payable when the Company receives proceeds from the transaction. In addition, the Company agreed to grant the investment banking firm warrants to purchase that number of shares of the Companys common stock equal to 6% of the value of successful common stock equity raised at 100% of the price at closing of a transaction for a period of two years and/or grant investment banking firm warrants to purchase that number of shares of the Companys common stock equal to 6% of the value of a successful preferred stock, debt, hybrid debt of any kind (convertibles, warrants, etc.) or debt and equity combination common stock equity raised at 100% of the price at closing of a transaction for a period of two years. These shares shall be delivered in a cashless exercise and issuable from the investment closing date up to no more than five years from the date and upon exercise shall be fully paid and non-assessable. The Companys common stock obtainable upon exercise of such warrants shall carry unlimited piggyback registration rights of the Company. The investment firm was successful in completing a debt transaction with the Company and will be paid a combination of cash and receive warrants as the proceeds from the debt transaction are received by the Company. In connection with their successful completion of a number of investment transactions, the investment banker was paid $136,000 during the nine months ended September 30, 2015 and $15,000 during the nine months ended September 30, 2014. Under the terms of the agreement, Carter Terry was to receive warrants in connection with various fundings. As discussed in Note 14, on April 10, 2015, the Company and Carter Terry agreed to issue 300,000 shares of the Companys stock to Carter Terry to eliminate the issuance of warrants to Carter Terry. Employment Contracts During 2014, the Company entered into employment contracts with three key executives with initial terms of between two and five years and automatic renewals for successive one year terms. The contracts cover such items as compensation, salary deferrals, termination for cause and change in control features. In addition, these contracts included the granting of 13,500,000 in options for three individuals to acquire the Companys common stock which vested immediately upon the signing of the employment contracts. See Note 15 for related options. On January 1, 2015, the Company entered into an employment contract with a key executive with an initial term of three years and automatic renewals for successive one year terms. The contract covers such items as compensation, salary deferrals, termination for cause and change in control features. In addition, this contract included the granting of 250,000 in options for the individual to acquire the Companys common stock, which vested immediately upon the signing of the employment contract. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 19 INCOME TAXES Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The Company must assess the likelihood that our deferred tax assets will be recovered from future taxable income, and to the extent that it is more likely than not that such deferred tax assets will not be realized, the Company must establish a valuation allowance. During the nine months ended September 30, 2015 and 2014, the Company incurred net losses, and therefore, had no tax liability. The net deferred asset generated by the loss carry-forward has been fully reserved. The cumulative net operating loss carry-forward is approximately $16,400,000 and $14,791,000, respectively as of September 30, 2015 and December 31, 2014 and will expire in years 2020 through 2034. Deferred tax assets consist of the tax effect of NOL carry-forwards. The Company has provided a full valuation allowance on the deferred tax assets because of the uncertainty regarding its realizability. Deferred tax assets consisted of the following as of: September 30, 2015 September 30, 2014 Net operating loss carry forwards $ 6,210,000 $ 2,459,000 Valuation allowance (6,210,000 ) (2,459,000 ) $ - $ - In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities (including the impact of available carry back and carry forward periods), projected future taxable income, and tax-planning strategies in making this assessment. Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible, management believes it is more likely than not that the Company will realize the benefits of these deductible differences. The amount of the deferred tax asset considered realizable, however, could be reduced in the near term if estimates of future taxable income during the carry forward period are reduced. The reconciliation of the results of applying the Companys effective statutory federal tax rate of 35% for the nine months ended September 30, 2015 and 2014 to the Companys provision for income taxes follows: For the Nine months ended September 30, 2015 For the Nine months ended September 30, 2014 Federal income tax rate 32 % 32 % State income tax 6 % 8 % Charge for deferred tax asset (38 )% (40 )% - % - % The Companys income tax filings are subject to audit by various taxing authorities. For state tax purposes, the Companys 2012 through 2014 tax years remain open for examination by the tax authorities under the normal three year statute of limitations. On February 27, 2015, the Company received a notice from the Internal Revenue Service (IRS) that the IRS intended to audit the Companys federal income tax returns for tax years 2011, 2012 and 2013. The Company believes that the tax returns for the periods under examination were prepared appropriately and were filed correctly with the IRS. Any adjustments resulting from these audits will not result in additional cash payments by the Company, but merely decrease the Companys net operating loss carry forwards. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2015 | |
Segment Reporting [Abstract] | |
Segment Information | NOTE 20 SEGMENT INFORMATION The Companys operations are classified into the sales of products within the United States and outside the United States. The Company determined its operating segments in accordance with FASB Topic 280, Segment Reporting. Results of the operating segments are as follows: For the Nine months ended September 30, 2015: Domestic International Total Sales $ 56,758 $ 2,764,391 $ 2,821,149 Cost of goods sold 47,265 2,302,063 2,349,329 Gross profit $ 9,492 $ 462,328 $ 471,820 Accounts receivable, gross $ 10,666 $ 320,902 $ 331,568 For the Nine months ended September 30, 2014: Domestic International Total Sales $ 14,763 $ 811,035 $ 825,798 Cost of goods sold 8,862 1,213,045 1,235,126 Gross profit $ 2,092 $ (402,010 ) $ (409,328 ) The Company presents its financial statements in two segments, as shown above. Except for the accounts receivable, which relate to the international business, all assets and liabilities are domiciled in the United States and are therefore associated with the domestic business. While the gross margin information is allocated between the domestic and international business based on sales, the majority of the expenses are paid in the United States, the domestic segment. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 21 SUBSEQUENT EVENTS October 2015 Installment Loan Agreement On October 1, 2015, the Company obtained cash under an installment loan agreement (the Agreement) with PowerUp Lending Limited, (PowerUp) in the principal amount of $195,000 for $150,000. Under the terms of the Agreement, the Company will pay, via ACH Debit, a daily charge of $1,326.53 per day until the note for $195,000 is repaid. The Agreement states that there is no interest payable under the terms of the Agreement but the difference between the amount received, $150,000, and the principal amount of $195,000, will be recognized as interest expense over the life of the Agreement. The Agreement is unsecured and is based on future sales and collections on those sales. The Company reimbursed Power Up for all costs and expenses incurred by it in connection with the transaction and paid $2,995 as an origination fee and paid $11,600 to Carter Terry & Company for due diligence fees. Typenex Co-Investment, LLC Note Subsequent to September 30, 2015, the convertible debt holder exercised a portion of their warrant for 54,769 exercise shares as defined in the warrant at a price determined by a formula defined in the warrant, which resulted in the Company issuing 224,561,651 shares of the Companys common stock to the Lender. JSJ Investments Financing Note 1 Subsequent to September 30, 2015, the Lender converted a portion of their outstanding convertible debt, approximately $36,765, into shares of the Companys common stock at prices ranging from $0.000055 to $0.00055. Using the formula provided for in the related convertible debt agreement, this Lender received 220,177,408, shares of the Companys common stock. EMA Financial Financing Subsequent to September 30, 2015, the Lender converted a portion of their outstanding convertible debt, approximately $18,095, into shares of the Companys common stock at prices ranging from $0.000090 to $0.000495. Using the formula provided for in the related convertible debt agreement, this Lender received 134,529,956, shares of the Companys common stock. JMJ Financial Financing Subsequent to September 30, 2015, the Lender converted a portion of their outstanding convertible debt, approximately $25,488, into shares of the Companys common stock at prices ranging from $0.00006 to $0.00060. Using the formula provided for in the related convertible debt agreement, this Lender received 141,800,000, shares of the Companys common stock. Union Capital Note Subsequent to September 30, 2015, the Lender converted a portion of their outstanding convertible debt, approximately $58,927, into shares of the Companys common stock at prices ranging from $0.00060 to $0.00006. Using the formula provided for in the related convertible debt agreement, this Lender received 583,354,617, shares of the Companys common stock. LG Capital Note Subsequent to September 30, 2015, the Lender converted a portion of their outstanding convertible debt, approximately $7,873, into shares of the Companys common stock at prices ranging from $0.0001 to $0.0002. Using the formula provided for in the related convertible debt agreement, this Lender received 72,926,888, shares of the Companys common stock. Redwood Investors Convertible Note Subsequent to September 30, 2015, the Lender converted a portion of their outstanding convertible debt, approximately $49,434, into shares of the Companys common stock at prices ranging from $0.0000520 to $0.000572. Using the formula provided for in the related convertible debt agreement, this Lender received 273,900,000 shares of the Companys common stock. |
Summary of Significant Accoun27
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Consolidations | Consolidations The consolidated financial statements include the accounts of the Company and companies in which the Company has a controlling interest including the accounts of Windstream Technologies, Inc., (fka, Windaus Global Energy, Inc.), Windstream Technologies, Inc. (a California corporation), Windstream Energy Technologies Pvt Ltd. and Windstream Technologies Latin America S. A. For consolidated subsidiaries where the Companys ownership in the subsidiary is less than 100%, the equity interest not held by the Company is shown as non-controlling interest. Management also evaluates whether an investee company is a variable interest entity and whether the Company is the primary beneficiary. Consolidation is required if both of these criteria are met. The Company did not have any variable interest entities requiring consolidation during the nine months ended September 30, 2015 and 2014. |
Reclassifications | Reclassifications Certain prior period amounts have been reclassified to conform to the current presentation. The reclassifications did not impact prior period results of operations, cash flows, total assets, total liabilities or total equity. |
Comprehensive Income | Comprehensive Income The Company reports comprehensive income in accordance with FASB ASC Topic 220 Comprehensive Income, which established standards for reporting and displaying comprehensive income and its components in a financial statement that is displayed with the same prominence as other financial statements. Total comprehensive income is defined as all changes in stockholders equity during a period, other than those resulting from investments by and distributions to stockholders (i.e., issuance of equity securities and dividends). Generally, for the Company, total comprehensive income (loss) equals net income (loss) plus or minus adjustments for currency translation. Comprehensive income was de minimus |
Foreign Currency Translation and Translation | Foreign Currency Transactions and Translation The Companys subsidiary in India conducts business primarily denominated in its local currency, which is its functional currency. Assets and liabilities have been translated to U.S. dollars at the period-end exchange rates. Revenues and expenses have been translated at exchange rates which approximate the average of the rates prevailing during each period. Translation adjustments are de minimus |
Use of Estimates | Use of Estimates The preparation of the consolidated financial statements in conformity with US GAAP requires the Company to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant accounting estimates reflected in the Companys consolidated financial statements include the allowance for doubtful accounts and sales returns reserves, inventory write-downs, the estimated useful lives of long-lived assets, the impairment of long-lived assets, fair value of derivative liabilities, valuation allowance on deferred income tax assets, accrued warranty expenses, the grant-date fair value of share-based compensation awards and related forfeiture rates, and fair value of financial instruments. Changes in facts and circumstances may result in revised estimates. The current economic environment has increased the degree of uncertainty inherent in those estimates and assumptions. |
Deferred Financing Costs | Deferred Financing Costs Deferred financing costs represent costs incurred in connection with obtaining the debt financing. These costs are amortized ratably and charged to interest expense over the term of the related debt. In connection with one of the five debt issuances as discussed in Note 11, the Company paid finders fees of approximately $42,000 as well as 140,000 common stock warrants at $0.05 per share. The warrants vest immediately and have a three year term. The fair value of the warrants was determined to be approximately $48,000 using the Black-Scholes option pricing model with the same assumptions as the warrants discussed in Notes 11 and 16, except the exercise price used for the warrants. The combined value of the warrants, including the finders fees, is $90,000, which was capitalized as a financing cost and is being amortized to interest expense over the life of the notes. As of September 30, 2015 and December 31, 2014, the deferred financing costs had an unamortized balance of $0. Amortization of deferred financing costs, which has been included in interest expense, was approximately $0 and $23,000 for the nine months ended September 30, 2015 and 2014, respectively. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents. |
Accounts Receivable | Accounts Receivable Trade accounts receivable are periodically evaluated for collectability based on past credit history with customers and their current financial condition. Bad debts expense or write offs of receivables are determined on the basis of loss experience, known and inherent risks in the receivable portfolio and current economic conditions. The Company believes its allowance for doubtful accounts as of September 30, 2015 and December 31, 2014 are adequate, but actual write-offs could exceed the recorded allowance. During the nine months ended September 30, 2015, the Company wrote off $12,402 in accounts receivable against the allowance and increased the allowance by $10,000 of bad debt expense. There were no such transactions in 2014. |
Export Import Bank Credit Insurance | Export Import Bank Credit Insurance The Company sells its products outside the United States under the terms of a short term multi-buyer export credit insurance policy with the Export Import Bank (Ex Im Bank) of the United States, an agency of the United States Government. Under the terms of the policy, the Ex Im Bank agrees to pay the Company up to 95% of the outstanding invoice amounts, on qualified sales, due after ninety days or depending on the specific terms with each customer. The limit of the policy was $2,000,000 and $4,000,000 at September 30, 2015 and December 31, 2014, respectively, having been reduced on June 26, 2015. |
Inventories | Inventories Inventories are primarily raw materials. Inventories are valued at the lower of cost, as determined on a first-in-first-out (FIFO) basis, or market. Market value is determined by reference to selling prices after the balance sheet date or to managements estimates based on prevailing market conditions. Management writes down the inventories to market value if it is below cost. Management also regularly evaluates the composition of its inventories to identify slow-moving and obsolete inventories to determine if a valuation allowance is required. Costs of raw material inventories include the purchase prices of the component parts and related costs incurred in bringing the products to their present location and condition. |
Property and Equipment | Property and Equipment Property and equipment consists of manufacturing equipment, factory equipment, furniture and fixtures, leasehold improvements and tooling costs. These assets are recorded at cost and are being depreciated on the straight-line basis over estimated lives of two to seven years. Leasehold improvements are being depreciated over their useful life or the term of the related lease, whichever is shorter. Repair and maintenance expenditures, which do not result in improvements, are charged to expense as incurred. |
Long-Lived Assets | Long-Lived Assets The Companys long-lived assets consisted of property and equipment and are reviewed for impairment in accordance with the guidance of FASB ASC Topic, 360, Property, Plant and Equipment, Presentation of Financial Statements. |
Deferred Revenues | Deferred Revenues The Company typically receives advance payments on certain individual sales. These advance payments are recorded as deferred revenues within accrued liabilities, on the accompanying Consolidated Balance Sheets and reclassified as revenue in the Consolidated Statements of Operations only after the product has been delivered and the revenue has been earned. |
Revenue Recognition | Revenue Recognition Sales revenue consists of amounts earned from customers through the sale of its primary products, the TurboMill and the SolarMill, power generation devices which use alternative energy sources, primarily wind, to generate electricity. The Company also provides accessory products in support of these devices in the form of mounting equipment, data collection/monitoring equipment, batteries, inverters and various wiring solutions and accessories. Sales revenue is recognized when persuasive evidence of an arrangement exists, title to and risk of loss for the product has passed, which is generally when the products are shipped to its customers and collection is reasonably assured. |
Sales Returns | Sales Returns The Company allows customers to return defective products when they meet certain established criteria as outlined in the Companys sales terms and conditions. It is the Companys practice to regularly review and revise, |
Warranty Policy | Warranty Policy For the Companys products it sells, the Company warrants to the original purchaser only that the products will be free from defects in workmanship and material for five years after the shipment date with exclusions for improper installation, ordinary wear and tear, improper maintenance or accident or damage. Estimated future warranty obligations related to certain products are provided by charges to operations in the period in which the related revenue is recognized. Estimates are based on, in part, historical experience. At September 30, 2015 and December 31, 2014, the Company had accrued warranty expense liability of $253,000. For the nine months ended September 30, 2015 and 2014, the Company had warranty expense of $365 and $204,141, respectively. |
Cost of goods sold | Cost of goods sold Cost of goods sold consists primarily of raw materials, utility and supply costs consumed in the manufacturing process, manufacturing labor, depreciation expense and direct overhead expenses necessary to manufacture finished goods as well as warehousing and distribution costs such as inbound freight charges, shipping and handling costs, purchasing and receiving costs. |
Shipping and Handling Costs | Shipping and Handling Costs Shipping and handling costs for all sales transactions are billed to the customer and are included in cost of goods sold for all periods presented. |
Income Taxes | Income Taxes The Company accounts for income taxes pursuant to the provisions of ASC 740, Income Taxes, whereby deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amount of existing assets and liabilities and their respective tax bases and the future tax benefits derived from operating loss and tax credit carryforwards. The Company provides a valuation allowance on its deferred tax assets when it is more likely than not that such deferred tax assets will not be realized. ASC 740 requires that the Company recognize in the consolidated financial statements the effect of a tax position that is more likely than not to be sustained upon examination based on the technical merits of the position. The first step is to determine whether or not a tax benefit should be recognized. A tax benefit will be recognized if the weight of available evidence indicates that the tax position is more likely than not to be sustained upon examination by the relevant tax authorities. The recognition and measurement of benefits related to the Companys tax positions requires significant judgment as uncertainties often exist with respect to new laws, new interpretations of existing laws, and rulings by taxing authorities. Differences between actual results and the Companys assumptions, or changes in the Companys assumptions in future periods, are recorded in the period they become known. The Company accrues any interest or penalties related to its uncertain tax positions as part of its income tax expense. No reserve for uncertain tax positions was booked by the Company for the nine months ended September 30, 2015 and 2014. No liability for unrecognized tax benefits was recorded as of September 30, 2015 and December 31, 2014. Profits from non-U.S. activities are subject to local taxes, but not subject to U.S. tax until repatriated to the U.S. It is the Companys intention to permanently reinvest these earnings outside the U.S., subject to our managements continuing assessment as to whether repatriation may, in some cases, still be in the best interests of the Company. The calculation of tax liabilities involves dealing with uncertainties in the application of complex global tax regulations. |
Stock Based Payments | Stock Based Payments The Company accounts for stock based awards to employees in accordance with ASC 718 - Stock Compensation. Under this guidance, stock compensation expense is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the estimated service period (generally the vesting period) on the straight-line attribute method. Share-based awards to non-employees are accounted for in accordance with ASC 505-50 Equity, wherein such awards are expensed over the period in which the related services are rendered. |
General and Administrative Expenses | General and Administrative Expenses General and administrative expenses consist of business development, commissions, insurance costs, marketing, salary and benefit expenses, rent, professional fees, travel and entertainment expenses and other general and administrative overhead costs. Expenses are recognized when incurred. |
Research and Development | Research and Development Costs incurred in developing the ability to create and manufacture products for sale are included in research and development in the Companys Consolidated Statements of Operations. Once a product is commercially feasible and starts to sell to third party customers, the classification of such costs as development costs stops and such costs are recorded as costs of production, which is included in cost of goods sold. Research and development costs are expensed when incurred. For the nine months ended September 30, 2015 and 2014, research and development expenses were approximately $25,000 and $128,000, respectively. |
Basic and Diluted Net Loss per Share | Basic and Diluted Net Loss per Share The Company computes loss per share in accordance with ASC 260, - Earnings per Share. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and trade receivables. The Company places its cash with high credit quality financial institutions. At times such cash may be in excess of the FDIC limit of $250,000. The Company sells primarily to companies and governmental entities across the globe. Receivables arising from those sales domestically are not collateralized; however, credit risk is minimized by continuing to diversify the customer base. International sales typically take place under the auspices of the Export Import Bank, a U.S. government entity, and are guaranteed by that entity under the terms of an insurance policy with a limit of $2 million. The limit had been $4 million, but was reduced to $2 million at June 26, 2015. The Company establishes an allowance for doubtful accounts based upon factors surrounding the credit risk of the specific customers, historical trends and other information. As of September 30, 2015, four customers represented approximately 78% of outstanding accounts receivable. As of December 31, 2014, two customers represented approximately 90% of outstanding accounts receivable balances. For the nine months ended September 30, 2015 and 2014, two customers represented approximately 77% and 85% of revenue, respectively. For the nine months ended September 30, 2015 and 2014, four vendors represented approximately 47% and 59% of total cost of goods sold, respectively. |
Related parties | Related parties A party is considered to be related to the Company if the party directly or indirectly or through one or more intermediaries, controls, is controlled by, or is under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. A party which can significantly influence the management or operating policies of the transacting parties or if it has an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests is also a related party. An officer of the Company is also a relative of the mayor of North Vernon, which has a loan with the Company as described in Notes 12 and 13. The officer has an employment contract with the Company. Management believes compensation is based on market value comparisons and is not impacted by the related party officers relationship to the mayor of the lender, relationships have been disclosed, and transactions have been entered into on an unrelated, third party basis. |
Financial Instruments and Fair Value of Financial Instruments | Financial Instruments and Fair Value of Financial Instruments The Company applies the provisions of accounting guidance, FASB Topic ASC 825 , Financial Instruments The Company defines fair value as the price that would be received to sell an asset or be paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company applies the following fair value hierarchy upon the lowest level of input that is available and significant to the fair value measurement. The Company applies the following fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). ● Level 1 Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. ● Level 2 Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. If the asset or liability has a specified (contractual) term, a Level 2 input must be observable for substantially the full term of the asset or liability. ● Level 3 Level 3 inputs are unobservable inputs for the asset or liability in which there is little, if any, market activity for the asset or liability at the measurement date. The Company uses quoted marked prices to determine the fair values when available. If quoted market prices are not available, the Company measures fair value using valuation techniques that use, when possible, current market-based or independently-sourced market parameters, such as interest rates and currency rates. The carrying value of financial assets and liabilities recorded at fair value is measured on a recurring or nonrecurring basis. Financial assets and liabilities measured on a non-recurring basis are those that are adjusted to fair value when a significant event occurs. The Company had no financial assets or liabilities carried and measured on a nonrecurring basis during the reporting periods. Financial assets and liabilities measured on a recurring basis are those that are adjusted to fair value each time a financial statement is prepared. |
Accounting for Derivatives Liabilities | Accounting for Derivatives Liabilities The Company evaluates stock options, stock warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for under the relevant sections of ASC Topic 815-40, Derivative Instruments and Hedging: Contracts in Entitys Own Equity |
Equity Instruments Issued to Non-Employees for Acquiring Goods or Services | Equity Instruments Issued to Non-Employees for Acquiring Goods or Services Issuances of the Companys common stock or warrants for acquiring goods or services are measured at the fair value of the consideration or the fair value of the equity instruments issued, whichever is more reliably measurable. The measurement date for the fair value of the equity instruments issued to consultants or vendors is determined at the earlier of (i) the date at which a commitment for performance to earn the equity instruments is reached (a performance commitment which would include a penalty considered to be of a magnitude that is sufficiently large disincentive for non-performance) or (ii) the date at which performance is complete. When it is appropriate for the Company to recognize the cost of a transaction during the financial reporting periods prior to the measurement date, for purposes of recognition of costs during those periods, the equity instrument is measured at the then-current fair values at each of those interim financial reporting dates. |
Segment Information | Segment Information The Company operates in two segments in accordance with accounting guidance FASB ASC Topic 280, Segment Reporting |
Recently Issued Accounting Pronouncements, not yet adopted | Recently Issued Accounting Pronouncements, not yet adopted On May 28, 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entitys Ability to Continue as a Going Concern. In February 2015, the FASB issued ASU 2015-02, Consolidation (Topic 810) - Amendments to the Consolidation Analysis, In June 2014, the FASB issued ASU 2014-12, Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved After the Requisite Service Period Compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. If the performance target becomes probable of being achieved before the end of the requisite service period, the remaining unrecognized compensation cost should be recognized prospectively over the remaining requisite service period. The total amount of compensation cost recognized during and after the requisite service period should reflect the number of awards that are expected to vest and should be adjusted to reflect those awards that ultimately vest. The requisite service period ends when the employee can cease rendering service and still be eligible to vest in the award if the performance target is achieved. The amendments in this ASU are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted. The adoption of this standard is not expected to have a material impact on the Companys financial position and results of operations. |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Receivables [Abstract] | |
Schedule of Accounts Receivable by Major Categories | Accounts receivable consisted of the following as of: September 30, 2015 December 31, 2014 Accounts Receivable EXIM insured $ 82,147 $ 1,013,938 Accounts Receivable not insured 249,419 31,986 331,566 1,045,924 Allowances for doubtful accounts and sales returns and allowances (26,000 ) (28,402 ) $ 305,566 $ 1,017,522 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories consisted of the following as of: September 30, 2015 December 31, 2014 Raw Materials $ 1,403,602 $ 729,981 Work in process 142,713 384,213 Finished goods 354,737 70,763 $ 1,901,052 $ 1,184,957 |
Prepaid Expenses (Tables)
Prepaid Expenses (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Prepaid Expenses | Prepaid expenses consisted of the following as of: September 30, 2015 December 31, 2014 Prepaid expenses, primarily inventory $ 287,112 $ 77,349 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consisted of the following as of: September 30, 2015 December 31, 2014 Manufacturing equipment $ 155,145 $ 154,666 Factory equipment 114,561 15,800 Furniture and fixtures 7,888 7,888 Leasehold improvements 64,582 64,582 Tooling 565,160 473,893 Total 907,336 716,829 Less accumulated depreciation (566,391 ) (463,189 ) Net property, plant and equipment $ 340,945 $ 253,640 |
Schedule of Depreciation Expense | Depreciation expense for the periods ended amounted to: Nine months ended September 30, 2015 Nine months ended September 30, 2014 Depreciation Expense $ 103,000 $ 93,000 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses | Accrued expenses consisted of the following as of: September 30, 2015 December 31, 2014 Accrued interest $ 717,693 $ 426,938 Accrued liabilities 282,837 25,618 Accrued payroll 432,747 332,909 Accrued warranty liability 253,000 253,000 Accrued property taxes 16,694 14,426 Total $ 1,702,971 $ 1,052,891 |
Short Term Debt (Tables)
Short Term Debt (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Short Term Debt Tables | |
Schedule of Short Term Debt | Short term debt consisted of the following: September 30, 2015 December 31, 2014 Short term debt Revolving line of credit $ 1,999,084 $ 1,991,605 2012 and 2013 notes payable to individuals 260,000 285,000 April 2014 note payable to an individual 200,000 200,000 April 2015 note payable to an individual 50,000 - September 2015 factoring agreement - $ 2,509,084 $ 2,476,605 |
Schedule of Interest Expense Short Term Debt | Interest expense for the short term debt for the nine months ended September 30, 2015 and 2014 is summarized as follows: Nine months ended Nine months ended September 30, 2015 September 30, 2014 Interest expense on short term debt Revolving line of credit $ 66,562 $ 51,468 2012 and 2013 notes payable to individuals 15,933 16,793 April 2014 note payable to an individual 11,967 - April 2015 note payable to an individual 2,315 - September 2015 factoring agreement - $ 96,777 $ 68,261 |
Convertible Note Payable (Table
Convertible Note Payable (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Schedule of Short Term Convertible Notes | Convertible notes payable consisted of the following as of: September 30, 2015 December 31, 2014 Short term convertible notes 2013 and 2014 convertible notes payable $ 350,000 $ 550,000 Debt discount - (166,668 ) 2015 convertible notes payable 937,864 - Typenex note payable - $ 342,000 Vista note payable - 132,000 Redwood note payable 892,500 2,184,000 $ 2,180,364 $ 3,041,332 Derivative and warrant liability Typenex $ - $ 893,347 Vista - 195,506 2015 convertible notes payable 569,550 - Redwood 270,094 850,439 $ 839,644 $ 1,939,292 |
Schedule of Investors Notes Receivable | September 30, 2015 December 31, 2014 Investor Notes Typenex $ - $ 255,260 Redwood 1,535,000 1,920,000 Total Investor Notes Receivable $ 1,535,000 $ 2,175,260 |
Schedule of Interest Expense for Short Term Convertible Notes | Interest expense for the short term debt for the nine months ended September 30, 2015 and 2014 is summarized as follows: Nine months ended September 30, 2015 Nine Months ended September 30, 2014 Interest expense on short term convertible notes 2013 and 2014 convertible notes payable $ 36,074 $ 42,551 Debt discount 166,669 353,389 2015 convertible notes payable 41,672 - Typenex note payable 10,774 1,666 Vista note payable 21,166 14,927 Redwood note payable 135,650 - $ 412,005 $ 412,533 |
Schedule of Debt | At inception, the carrying value of the above ten notes was as follows: Face amount of note $ 958,000 Derivative and warrant liability - $ 958,000 At September 30, 2015, the carrying value of the above ten notes was as follows: Face amount of note $ 937,864 Derivative and warrant liability 569,550 $ 1,507,414 |
Schedule of Investor Warrants | The Purchase Price allocated to each Investor Warrant at inception was: Investor Warrant #1: $ 275,000 Investor Warrant #2: 137,500 Investor Warrant #3: 137,500 $ 550,000 |
Schedule of Fair Value Hierarchy of Outstanding Derivative Liability | The fair values and corresponding classifications under the appropriate levels of the fair value hierarchy of the outstanding derivative liability recorded as recurring liabilities in the Consolidated Balance Sheets consisted of the following: Level September 30, 2015 December 31, 2014 Included in current liabilities: Derivative Liability 3 $ 839,644 $ 1,939,292 Valuation Unobservable Technique Input Included in current liabilities: Derivative Liability Monte Carlo Pricing Model Prevailing interest rates Companys stock volatility Expected term |
Prepayment Option [Member] | |
Schedule of Debt | At September 30, 2015, the carrying value of the note was as follows: Face amount of note $ 892,500 Derivative and warrant liability 270,094 $ 1,162,594 At December 31, 2014, the carrying value of the note was as follows: Face amount of note $ 2,184,000 Derivative and warrant liability 850,439 $ 3,034,439 |
Investors Warrants $ 39,000 [Member] | |
Schedule of Debt | Accordingly, the initial carrying amount of the note is approximately $39,000, derived as follows: Face amount of note $ 550,000 Original issuance discount (50,000 ) Allocation to Investor Warrants (182,000 ) Allocated to embedded derivatives (279,000 ) $ 39,000 At September 30, 2015, the carrying value of the note was as follows: Face amount of note $ - Derivative and warrant liability - $ - At December 31, 2014, the carrying value of the note was as follows: Face amount of note $ 342,000 Derivative and warrant liability 893,347 $ 1,235,347 |
Investors Warrants $ 100,000 [Member] | |
Schedule of Debt | Accordingly, the carrying amount of the note at inception is approximately $100,000, derived as follows: Face amount of note $ 100,000 Allocated to embedded derivatives - $ 100,000 At September 30, 2015, the carrying value of the note was as follows: Face amount of note $ - Derivative and warrant liability - $ - At December 31, 2014, the carrying value of the note was as follows: Face amount of note $ 132,000 Derivative and warrant liability 195,506 $ 327,506 |
Typenex Co-Investment, LLC [Member] | |
Schedule of Conversion Eligible Tranches | The note is separated into three Conversion Eligible Tranches (discussed under Lender Conversion Initial Tranche $ 275,000 First Subsequent Tranche 137,500 Second Subsequent Tranche 137,500 $ 550,000 |
Vista Capital Investments LLC [Member] | |
Schedule of Conversion Eligible Tranches | The note is separated into three Conversion Eligible Tranches (discussed under Lender Conversion Initial Consideration $ 100,000 Subsequent Consideration 100,000 $ 200,000 |
Note Payable (Tables)
Note Payable (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
Schedule of Principal and Interest Payments | Principal and interest payments are expected to be paid in each fiscal year as follows: Principal Interest Total 2015 $ 62,838 $ 177,259 $ 240,097 2016 1,217,162 114,276 1,331,438 $ 1,280,000 $ 291,535 $ 1,571,535 |
Stock Options (Tables)
Stock Options (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Stock Option Activity | Stock option activity is presented in the table below: Number of Shares Weighted average Exercise Price Weight average Contractual Term (years) Aggregate Intrinsic Value Outstanding at December 31, 2013 10,110,640 $ 0.08 2.75 - Granted 16,100,000 0.15 10.00 - Exercised (448,993 ) (0.05 ) (3.00 ) Outstanding at December 31, 2014 25,761,647 0.09 6.20 - Granted 250,000 .15 3.0 - Exercised - - - - Outstanding at September 30, 2015 26,011,647 $ 0.09 6.19 - |
Schedule of Stock Compensation Expense | The Company recognized stock compensation expense as follows: Nine months ended September 30, 2015 Nine months ended September 30, 2014 $ 246,399 $ 122,126 |
Schedule of Stock Option Plan Activity | Stock option activity under the Incentive Stock Option Plan is presented in the table below: Number of Shares Weighted average Exercise Price Weight average Contractual Term (years) Outstanding at December 31, 2013 - $ - - Granted 700,000 0.15 3.00 Outstanding at December 31, 2014 700,000 $ 0.15 3.00 Forfeited (106,250 ) - - Outstanding at September 30, 2015 593,750 $ 0.15 2.14 |
Warrants (Tables)
Warrants (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Stock Warrants Activity | The following represents a summary of the warrants outstanding at September 30, 2015 and December 31, 2014 and changes during the periods then ended: Warrants Weighted Average Exercise Price Outstanding, December 31, 2013 9,106,000 $ 0.42 Granted 722,472 0.65 Warrants exchanged for common stock (135,932 ) (0.05 ) Outstanding, December 31, 2014 9,692,540 $ 0.44 Granted 522,983 0.04 Warrants exchanged for common stock (199,396 ) (0.40 ) Outstanding, June 30, 2015 10,016,127 $ 0.45 Warrants exchanged for common stock (71,342 ) (0.40 ) Outstanding, September 30, 2015 9,944,785 $ 0.45 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share [Abstract] | |
Schedule of Computation of Basic and Diluted Net Income Loss Per Share | The following table sets for the computation of basic and diluted net income (loss) per share: For the For the Nine months Nine months Ended Ended September 30, 2015 September 30, 2014 Net loss attributable to common stockholders $ (2,965,069 ) $ (3,546,789 ) Basic weighted average outstanding shares of common stock 139,103,989 85,200,993 Dilutive effect of common stock equivalents Dilutive weighted average common stock equivalents 139,103,989 85,200,993 Net loss per share of voting and nonvoting common stock Basic and Diluted $ (0.02 ) $ (0.04 ) |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Income Tax Disclosure [Abstract] | |
Schedule of Deferred Income Tax Assets | Deferred tax assets consisted of the following as of: September 30, 2015 September 30, 2014 Net operating loss carry forwards $ 6,210,000 $ 2,459,000 Valuation allowance (6,210,000 ) (2,459,000 ) $ - $ - |
Schedule of Effective Statutory Federal Tax Rate | The reconciliation of the results of applying the Companys effective statutory federal tax rate of 35% for the nine months ended September 30, 2015 and 2014 to the Companys provision for income taxes follows: For the Nine months ended September 30, 2015 For the Nine months ended September 30, 2014 Federal income tax rate 32 % 32 % State income tax 6 % 8 % Charge for deferred tax asset (38 )% (40 )% - % - % |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Segment Reporting [Abstract] | |
Schedule of Operating Segments | Results of the operating segments are as follows: For the Nine months ended September 30, 2015: Domestic International Total Sales $ 56,758 $ 2,764,391 $ 2,821,149 Cost of goods sold 47,265 2,302,063 2,349,329 Gross profit $ 9,492 $ 462,328 $ 471,820 Accounts receivable, gross $ 10,666 $ 320,902 $ 331,568 For the Nine months ended September 30, 2014: Domestic International Total Sales $ 14,763 $ 811,035 $ 825,798 Cost of goods sold 8,862 1,213,045 1,235,126 Gross profit $ 2,092 $ (402,010 ) $ (409,328 ) |
Basis of Presentation and Nat41
Basis of Presentation and Nature of Organization (Details Narrative) | Oct. 26, 2013shares | Dec. 31, 2014USD ($)ft² | Oct. 31, 2014USD ($)shares | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Nov. 30, 2014ft² | Dec. 31, 2013 |
Percentage of formed owned subsidiary | 99.90% | ||||||
Annual rent | $ 188,534 | $ 55,915 | |||||
Windstream India [Member] | |||||||
Common stock shares received from wholly-owned subsidiary | shares | 10,000 | ||||||
Area of land | ft² | 9,500 | 9,500 | |||||
Annual rent | $ 24,000 | ||||||
Windstream India [Member] | Manufacturing Facility [Member] | |||||||
Area of land | ft² | 50,000 | ||||||
Annual rent | $ 120,000 | ||||||
Lease term | 6 years | ||||||
Windstream India [Member] | Third Party Investors [Member] | |||||||
Percentage of formed owned subsidiary | 55.00% | ||||||
Percentage of outstanding common stock | 45.00% | ||||||
Notes exchange shares amount | 1,259,000 | ||||||
Purchase price of common stock | $ 2,000,000 | $ 2,000,000 | |||||
Windstream Energy Technologies India Private Limited [Member] | |||||||
Common stock shares received from wholly-owned subsidiary | shares | 8,184 | ||||||
Additional shares owed from the company | shares | 10,000 | ||||||
Peru Subsidiary [Member] | |||||||
Percentage of formed owned subsidiary | 100.00% |
Summary of Significant Accoun42
Summary of Significant Accounting Policies (Details Narrative) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2015USD ($)$ / shares | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)Investor$ / sharesshares | Sep. 30, 2014USD ($) | Dec. 31, 2014USD ($)$ / shares | Oct. 26, 2013 | |
Percentage of ownership in subsidiary less than equity interest | 99.90% | |||||
Number of debt issuances | Investor | 5 | |||||
Finder's fees | $ 42,000 | |||||
Issuance of common stock shares to purchase of warrant | shares | 140,000 | |||||
Warrants term | 3 years | |||||
Fair value of warrants | $ 0 | $ 0 | $ 48,000 | |||
Warrants exercise price per share | $ / shares | $ 0.05 | $ 0.05 | $ 0.05 | |||
Capitalized financing cost | $ 90,000 | |||||
Deferred financing costs | $ 0 | 0 | ||||
Amortization of deferred financing costs | 166,669 | $ 384,032 | ||||
Interest expense | 0 | 23,000 | ||||
Accounts receivable bad debt expense | 12,402 | 233,514 | ||||
Bad debt expense | $ 10,000 | 0 | ||||
Percentage of outstanding invoice amount | 95.00% | |||||
Export Import Bank Credit Insurance limit | $ 2,000,000 | $ 4,000,000 | ||||
Sales returns and allowances | 16,000 | 16,000 | ||||
Accrued warranty expense liability | $ 253,000 | 253,000 | $ 253,000 | |||
Warranty expense | $ 365 | 204,141 | ||||
Unrecognized tax benefits | ||||||
Research and development expenses | $ 1,425 | $ 91,666 | $ 24,884 | $ 128,117 | ||
FDIC limit | $ 250,000 | $ 250,000 | ||||
Insurance policy description | The limit had been $4 million, but was reduced to $2 million at June 26, 2015 | |||||
Insurance policy limit | $ 2,000,000 | |||||
Accounts Receivable [Member] | ||||||
Concentration Risk Percentage | 78.00% | 90.00% | ||||
Number of customer | 4 | 2 | ||||
Revenue [Member] | ||||||
Concentration Risk Percentage | 77.00% | 85.00% | ||||
Number of customer | 2 | 2 | ||||
Cost of Goods, Total [Member] | ||||||
Concentration Risk Percentage | 47.00% | 59.00% | ||||
Number of vendor | 4 | 4 | ||||
Maximum [Member] | ||||||
Percentage of ownership in subsidiary less than equity interest | 100.00% | 100.00% | ||||
Estimated useful lives | 7 years | |||||
Minimum [Member] | ||||||
Estimated useful lives | 2 years |
Going Concern (Details Narrativ
Going Concern (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Going Concern | |||||
Accumulated deficit | $ 24,716,976 | $ 24,716,976 | $ 21,750,309 | ||
Net loss | 682,509 | $ 1,487,359 | 3,172,068 | $ 3,546,789 | |
Working capital deficit | $ 4,820,000 | $ 4,820,000 | $ 4,943,000 |
Reverse Merger (Details Narrati
Reverse Merger (Details Narrative) - $ / shares | May. 22, 2013 | Sep. 30, 2015 | Dec. 31, 2014 |
Common stock outstanding | 392,921,528 | 86,617,154 | |
Common stock issued | 392,921,528 | 86,617,154 | |
Common stock, par value | $ 0.001 | $ 0.001 | |
Common stock issued to stockholders, shares | 39,665,899 | ||
Windaus Global Energy, Inc. [Member] | |||
Common stock outstanding | 955,000 | 955,000 | |
Preferred stock outstanding | 581,961 | 581,961 | |
Windaus Global Energy, Inc. [Member] | Share Exchange Agreement [Member] | |||
Stockholders' equity, description | 1:25.808 basis | 1:25.808 basis | |
Common stock outstanding | 24,646,646 | 24,646,646 | |
Preferred stock outstanding | 15,019,253 | 15,019,253 | |
Number of shares exchanged in share exchange agreement | 39,665,899 | 39,665,899 | |
Common stock issued | 24,000,000 | 24,000,000 | |
Common stock, par value | $ 0.001 | $ 0.001 |
Accounts Receivable (Details Na
Accounts Receivable (Details Narrative) | 9 Months Ended |
Sep. 30, 2015 | |
Revolving Line Of Credit Agreement [Member] | Export Import Bank [Member] | |
Percentage of customer's outstanding balance | 95.00% |
Accounts Receivable - Schedule
Accounts Receivable - Schedule of Accounts Receivable by Major Categories (Details) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Accounts receivable gross | $ 331,566 | $ 1,045,924 |
Allowances for doubtful accounts and sales returns and allowances | (26,000) | (28,402) |
Accounts receivable net | 305,566 | 1,017,522 |
Accounts Receivable - EXIM Insured [Member] | ||
Accounts receivable gross | 82,147 | 1,013,938 |
Accounts Receivable - Not Insured [Member] | ||
Accounts receivable gross | $ 249,419 | $ 31,986 |
Inventories (Details Narrative)
Inventories (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Inventory Disclosure [Abstract] | |||||
Write down of inventory | $ 111,000 | $ 111,000 |
Inventories - Schedule of Inven
Inventories - Schedule of Inventories (Details) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 1,403,602 | $ 729,981 |
Work in process | 142,713 | 384,213 |
Finished goods | 354,737 | 70,763 |
Inventories | $ 1,901,052 | $ 1,184,957 |
Prepaid Expenses - Schedule of
Prepaid Expenses - Schedule of Prepaid Expenses (Details) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid expenses, primarily inventory | $ 287,112 | $ 77,349 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Property, plant and equipment gross | $ 907,336 | $ 716,829 |
Less accumulated depreciation | (566,391) | (463,189) |
Net property, plant and equipment | 340,945 | 253,640 |
Manufacturing Equipment [Member] | ||
Property, plant and equipment gross | 155,145 | 154,666 |
Factory Equipment [Member] | ||
Property, plant and equipment gross | 114,561 | 15,800 |
Furniture and Fixtures [Member] | ||
Property, plant and equipment gross | 7,888 | 7,888 |
Leasehold Improvements [Member] | ||
Property, plant and equipment gross | 64,582 | 64,582 |
Tooling [Member] | ||
Property, plant and equipment gross | $ 565,160 | $ 473,893 |
Property and Equipment - Sche51
Property and Equipment - Schedule of Depreciation Expense (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation Expense | $ 103,000 | $ 93,000 |
Accrued Liabilities - Schedule
Accrued Liabilities - Schedule of Accrued Expenses (Details) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Payables and Accruals [Abstract] | ||
Accrued interest | $ 717,693 | $ 426,938 |
Accrued liabilities | 282,837 | 25,618 |
Accrued payroll | 432,747 | 332,909 |
Accrued warranty liability | 253,000 | 253,000 |
Accrued property taxes | 16,694 | 14,426 |
Total | $ 1,702,971 | $ 1,052,891 |
Short Term Debt (Details Narrat
Short Term Debt (Details Narrative) - USD ($) | Feb. 25, 2013 | Jul. 31, 2011 | Sep. 30, 2015 | Sep. 30, 2014 | Apr. 30, 2015 | Dec. 31, 2014 | Apr. 15, 2014 |
Line of credit renewal date | Jun. 26, 2014 | ||||||
Accrued interest percentage | 6.00% | ||||||
Line of credit, expiration date | Jun. 26, 2015 | Oct. 26, 2015 | |||||
Total credit limit | $ 2,000,000 | ||||||
Line of credit withdrawals | $ 1,070,000 | $ 2,045,000 | |||||
Repayment of short term debt | 1,062,000 | 695,000 | |||||
Short term debt aggregate amount | $ 2,509,084 | $ 2,476,605 | |||||
Notes payable repaid date | Aug. 1, 2016 | ||||||
Note interest rate | 10.00% | 10.00% | |||||
2012 and 2013 Notes Payable to Individuals [Member] | |||||||
Short term debt aggregate amount | $ 300,000 | ||||||
2012 and 2013 Notes Payable to Individuals [Member] | |||||||
Note interest rate range minimum | 5.00% | ||||||
Note interest rate range maximum | 18.00% | ||||||
Repayment of notes | $ 25,000 | $ 0 | |||||
Short term debt aggregate amount | 260,000 | $ 285,000 | |||||
April 2014 note payable to an individual [Member] | |||||||
Short term debt aggregate amount | $ 200,000 | $ 200,000 | $ 200,000 | ||||
Notes payable repaid date | Apr. 15, 2015 | ||||||
Note interest rate | 8.00% | ||||||
April 2015 note payable to an individual [Member] | |||||||
Short term debt aggregate amount | $ 50,000 | $ 50,000 | |||||
Note interest rate | 10.00% | ||||||
Minimum [Member] | |||||||
Line of credit, maximum borrowing capacity | 500,000 | ||||||
Maximum [Member] | |||||||
Line of credit, maximum borrowing capacity | $ 2,000,000 |
Short Term Debt - Schedule of S
Short Term Debt - Schedule of Short Term Debt (Details) - USD ($) | Sep. 30, 2015 | Apr. 30, 2015 | Dec. 31, 2014 | Apr. 15, 2014 |
Short Term debt | $ 2,509,084 | $ 2,476,605 | ||
Revolving Line of Credit [Member] | ||||
Short Term debt | 1,999,084 | 1,991,605 | ||
2012 and 2013 Notes Payable to Individuals [Member] | ||||
Short Term debt | 260,000 | 285,000 | ||
April 2014 note payable to an individual [Member] | ||||
Short Term debt | 200,000 | $ 200,000 | $ 200,000 | |
April 2015 note payable to an individual [Member] | ||||
Short Term debt | $ 50,000 | $ 50,000 | ||
September 2015 factoring agreement [Member] | ||||
Short Term debt |
Short Term Debt - Schedule of I
Short Term Debt - Schedule of Interest Expense Short Term Debt (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Interest expense on short term debt | $ 412,005 | $ 412,533 |
Revolving Line of Credit [Member] | ||
Interest expense on short term debt | 66,562 | 51,468 |
2012 and 2013 Notes Payable to Individuals [Member] | ||
Interest expense on short term debt | 15,933 | $ 16,793 |
April 2014 note payable to an individual [Member] | ||
Interest expense on short term debt | 11,967 | |
April 2015 note payable to an individual [Member] | ||
Interest expense on short term debt | $ 2,315 | |
September 2015 factoring agreement [Member] | ||
Interest expense on short term debt | ||
Interest Expense on Short Term Debt [Member] | ||
Interest expense on short term debt | $ 96,777 | $ 68,261 |
Convertible Notes Payable (Deta
Convertible Notes Payable (Details Narrative) | Sep. 18, 2015USD ($)shares | Aug. 31, 2015shares | Aug. 14, 2015USD ($) | Aug. 11, 2015USD ($) | Jul. 26, 2015shares | Jul. 16, 2015USD ($) | Jun. 01, 2015$ / shares | Apr. 24, 2015shares | Apr. 20, 2015USD ($) | Mar. 10, 2015USD ($) | Mar. 09, 2015USD ($) | Mar. 06, 2015USD ($) | Mar. 05, 2015USD ($) | Sep. 26, 2014USD ($)$ / shares | Jun. 01, 2014USD ($)Investor$ / sharesshares | Jun. 01, 2013USD ($)Investor$ / sharesshares | Jul. 27, 2015$ / sharesshares | Apr. 30, 2015USD ($)shares | Mar. 20, 2015USD ($) | Jul. 31, 2011USD ($) | Sep. 30, 2015USD ($)$ / sharesshares | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)Investor$ / sharesshares | Sep. 30, 2014USD ($) | Dec. 31, 2014USD ($)$ / sharesshares | Dec. 31, 2013USD ($) | Apr. 02, 2015USD ($) | Oct. 17, 2014USD ($)Investor | Jun. 30, 2014USD ($) |
Convertible promissory notes principal amount | $ 1,005,000 | $ 1,005,000 | $ 555,000 | ||||||||||||||||||||||||||
Warrants issued for purchase of common stock | shares | 36,150,462 | 3,647,023 | 100,000 | ||||||||||||||||||||||||||
Warrants expiration term | 3 years | ||||||||||||||||||||||||||||
Note interest rate | 10.00% | 10.00% | 10.00% | ||||||||||||||||||||||||||
Original debt amount | $ 64,000 | ||||||||||||||||||||||||||||
Fair value of warrants | $ 0 | $ 0 | 48,000 | ||||||||||||||||||||||||||
Beneficial conversion feature | 400,000 | ||||||||||||||||||||||||||||
Notes payable outstanding | 0 | 0 | $ 200,000 | ||||||||||||||||||||||||||
Promissory notes principal amount | $ 1,400,000 | 350,000 | 350,000 | 550,000 | |||||||||||||||||||||||||
Debt redemption price, percentage | 20.00% | ||||||||||||||||||||||||||||
Unamortized debt discount | $ 0 | 0 | 167,000 | ||||||||||||||||||||||||||
Amortized debt discount | $ 99,999 | $ 233,514 | |||||||||||||||||||||||||||
Embedded derivative | $ 1,235,347 | ||||||||||||||||||||||||||||
Number of warrants issued during period | shares | 140,000 | 140,000 | |||||||||||||||||||||||||||
Finder’s fees | $ 42,000 | ||||||||||||||||||||||||||||
Warrants exercised price per share | $ / shares | $ 0.05 | $ 0.05 | $ 0.05 | ||||||||||||||||||||||||||
Deferred financing costs | $ 0 | $ 0 | |||||||||||||||||||||||||||
Deferred financing costs amortized | 0 | 0 | $ 28,000 | ||||||||||||||||||||||||||
Fair value of embedded derivative liability | 569,550 | 569,550 | |||||||||||||||||||||||||||
Convertible price per share | $ / shares | $ 0.40 | ||||||||||||||||||||||||||||
Interest income | 4,600 | 0 | |||||||||||||||||||||||||||
Amortization of deferred financing cost | $ 166,669 | $ 384,032 | |||||||||||||||||||||||||||
Purchase of common stock | shares | 199,396 | ||||||||||||||||||||||||||||
Derivative liabilities | 3 | $ 3 | $ 1,045,945 | ||||||||||||||||||||||||||
Change in fair value of derivative liabilities | 326,258 | 888,011 | |||||||||||||||||||||||||||
Derivative liability related note | $ 270,094 | $ 850,439 | |||||||||||||||||||||||||||
Percentage of accrued interest | 10.00% | ||||||||||||||||||||||||||||
Number of debt installments | Investor | 8 | ||||||||||||||||||||||||||||
Debt instruments installment period description | eight monthly installments beginning March 26, 2015, until the Maturity Date of October 26, 2015 (Installment Dates). | ||||||||||||||||||||||||||||
Installment amount include of accrued and unpaid interest | $ 68,750 | ||||||||||||||||||||||||||||
Change in fair value of the embedded derivative liability | $ 580,345 | 0 | |||||||||||||||||||||||||||
Percentage of average conversion factor | 70.00% | ||||||||||||||||||||||||||||
Installment conversion price per share | $ / shares | $ 0.40 | ||||||||||||||||||||||||||||
Percentage of conversion factor reduced | 65.00% | ||||||||||||||||||||||||||||
Percentage of conversion factor automatically reduced | 5.00% | ||||||||||||||||||||||||||||
Percentage of additional conversion factor automatically reduced | 5.00% | ||||||||||||||||||||||||||||
Installment payments | $ 279,272 | ||||||||||||||||||||||||||||
Number of shares issued during period | shares | 20,577,648 | ||||||||||||||||||||||||||||
Debt maturity date | Aug. 1, 2016 | ||||||||||||||||||||||||||||
Debt conversion of convertible debt into shares | shares | 136,000 | ||||||||||||||||||||||||||||
Proceeds from issuance of warrants | $ 500,000 | ||||||||||||||||||||||||||||
Proceeds from issuance of debt | 627,395 | 650,000 | |||||||||||||||||||||||||||
Original issue discount interest | $ 20,000 | ||||||||||||||||||||||||||||
Percentage of outstanding price of note | 125.00% | ||||||||||||||||||||||||||||
Investment warrants exercise price | $ / shares | $ 0.80 | ||||||||||||||||||||||||||||
Fair value of compound embedded derivative liability | $ 0 | 0 | |||||||||||||||||||||||||||
Initial carrying amount | 0 | 0 | 327,506 | $ 327,506 | |||||||||||||||||||||||||
Fair value of derivative liabilities | 0 | 0 | |||||||||||||||||||||||||||
Two Investors [Member] | |||||||||||||||||||||||||||||
Convertible promissory notes principal amount | $ 125,000 | ||||||||||||||||||||||||||||
Note interest rate | 8.00% | ||||||||||||||||||||||||||||
Warrant exchange for cash | $ 250,000 | ||||||||||||||||||||||||||||
One Investors [Member] | |||||||||||||||||||||||||||||
Convertible promissory notes principal amount | 125,000 | ||||||||||||||||||||||||||||
Redwood Fund III, LLC, [Member] | |||||||||||||||||||||||||||||
Notes Payable | $ 253,000 | ||||||||||||||||||||||||||||
Initial subscription amount | $ 712,500 | ||||||||||||||||||||||||||||
Percentage of original issue discount | 5.00% | ||||||||||||||||||||||||||||
Initial cash at closing | $ 622,500 | ||||||||||||||||||||||||||||
Four Investors [Member] | |||||||||||||||||||||||||||||
Original debt amount | $ 200,000 | ||||||||||||||||||||||||||||
Convertible price per share | $ / shares | $ 0.25 | ||||||||||||||||||||||||||||
Debt conversion of convertible debt into shares | shares | 829,689 | ||||||||||||||||||||||||||||
Typenex Co-Investment, LLC [Member] | |||||||||||||||||||||||||||||
Convertible promissory notes principal amount | 550,000 | ||||||||||||||||||||||||||||
Amortized debt discount | $ 50,000 | ||||||||||||||||||||||||||||
Percentage of collateral convertible promissory note | 10.00% | ||||||||||||||||||||||||||||
Convertible notes payable exchange | 209,900 | $ 209,900 | |||||||||||||||||||||||||||
Conversion eligible outstanding balance shares | shares | 9,950,000 | ||||||||||||||||||||||||||||
Redwood Note Payable [Member] | |||||||||||||||||||||||||||||
Debt conversion of convertible debt into shares | shares | 140,351,127 | ||||||||||||||||||||||||||||
Convertible debt principal amount | $ 1,411,679 | $ 1,411,679 | |||||||||||||||||||||||||||
Convertible Notes Payable [Member] | |||||||||||||||||||||||||||||
Amortized debt discount | 167,000 | 353,000 | |||||||||||||||||||||||||||
Debt discount related to notes converted to common stock | $ 64,000 | ||||||||||||||||||||||||||||
One of Five Debt Issuance [Member] | |||||||||||||||||||||||||||||
Fair value of warrants | $ 48,000 | ||||||||||||||||||||||||||||
Warrants exercised price per share | $ / shares | $ 0.05 | $ 0.05 | |||||||||||||||||||||||||||
Deferred financing costs | $ 90,000 | $ 90,000 | |||||||||||||||||||||||||||
LG Capital Financing [Member] | |||||||||||||||||||||||||||||
Convertible promissory notes principal amount | $ 105,000 | $ 105,000 | |||||||||||||||||||||||||||
Note interest rate | 8.00% | 8.00% | |||||||||||||||||||||||||||
Original debt amount | $ 90,000 | $ 105,000 | |||||||||||||||||||||||||||
Percentage of issued convertible debt | 8.00% | ||||||||||||||||||||||||||||
Percentage of conversion price | 60.00% | 60.00% | |||||||||||||||||||||||||||
Percentage of affiliates own common stock | 9.90% | 9.90% | |||||||||||||||||||||||||||
Transaction document amount | $ 5,000 | $ 5,000 | |||||||||||||||||||||||||||
Transaction cost paid | 5,000 | $ 8,000 | |||||||||||||||||||||||||||
Legal fees | 10,000 | ||||||||||||||||||||||||||||
Paid legal fees | $ 10,000 | ||||||||||||||||||||||||||||
JSJ Investments Financing [Member] | |||||||||||||||||||||||||||||
Convertible promissory notes principal amount | $ 112,000 | $ 100,000 | |||||||||||||||||||||||||||
Note interest rate | 12.00% | 12.00% | |||||||||||||||||||||||||||
Original debt amount | $ 112,000 | ||||||||||||||||||||||||||||
Percentage of issued convertible debt | 45.00% | ||||||||||||||||||||||||||||
Percentage of conversion price | 55.00% | ||||||||||||||||||||||||||||
Redemption price percentage equal to principal plus interest being redeemed | 150.00% | ||||||||||||||||||||||||||||
Transaction document amount | $ 2,000 | $ 2,000 | |||||||||||||||||||||||||||
Transaction cost paid | $ 8,000 | $ 10,000 | |||||||||||||||||||||||||||
Notes Payable | 59,515 | $ 59,515 | |||||||||||||||||||||||||||
Debt conversion of convertible debt into shares | shares | 27,125,836 | ||||||||||||||||||||||||||||
JMJ Financial Financing [Member] | |||||||||||||||||||||||||||||
Convertible promissory notes principal amount | $ 100,000 | ||||||||||||||||||||||||||||
Note interest rate | 12.00% | ||||||||||||||||||||||||||||
Original debt amount | $ 90,000 | ||||||||||||||||||||||||||||
Percentage of conversion price | 8.40% | ||||||||||||||||||||||||||||
Percentage of affiliates own common stock | 4.99% | ||||||||||||||||||||||||||||
Invest additional amount | $ 400,000 | ||||||||||||||||||||||||||||
Notes Payable | 23,040 | $ 23,040 | |||||||||||||||||||||||||||
Percentage of damages outstanding principal amount | 25.00% | ||||||||||||||||||||||||||||
Debt conversion of convertible debt into shares | shares | 20,000,000 | ||||||||||||||||||||||||||||
Convertible debt principal amount | $ 25,000 | ||||||||||||||||||||||||||||
EMA Financial Financing [Member] | |||||||||||||||||||||||||||||
Convertible promissory notes principal amount | $ 100,000 | ||||||||||||||||||||||||||||
Note interest rate | 10.00% | ||||||||||||||||||||||||||||
Original debt amount | $ 90,000 | ||||||||||||||||||||||||||||
Percentage of issued convertible debt | 8.00% | ||||||||||||||||||||||||||||
Percentage of conversion price | 60.00% | ||||||||||||||||||||||||||||
Redemption price percentage equal to principal plus interest being redeemed | 135.00% | ||||||||||||||||||||||||||||
Percentage of affiliates own common stock | 4.90% | ||||||||||||||||||||||||||||
Transaction document amount | $ 3,500 | ||||||||||||||||||||||||||||
Notes Payable | $ 27,932 | $ 27,932 | |||||||||||||||||||||||||||
Debt conversion of convertible debt into shares | shares | 17,529,855 | ||||||||||||||||||||||||||||
Adar Bays Financing [Member] | |||||||||||||||||||||||||||||
Convertible promissory notes principal amount | $ 50,000 | ||||||||||||||||||||||||||||
Note interest rate | 8.00% | ||||||||||||||||||||||||||||
Original debt amount | $ 50,000 | ||||||||||||||||||||||||||||
Percentage of issued convertible debt | 8.00% | ||||||||||||||||||||||||||||
Percentage of conversion price | 65.00% | ||||||||||||||||||||||||||||
Redemption price percentage equal to principal plus interest being redeemed | 150.00% | ||||||||||||||||||||||||||||
Percentage of affiliates own common stock | 9.90% | ||||||||||||||||||||||||||||
Transaction document amount | $ 2,500 | ||||||||||||||||||||||||||||
Transaction cost paid | $ 4,000 | ||||||||||||||||||||||||||||
Union Captial Note [Member] | |||||||||||||||||||||||||||||
Convertible promissory notes principal amount | $ 75,000 | ||||||||||||||||||||||||||||
Note interest rate | 8.00% | ||||||||||||||||||||||||||||
Original debt amount | $ 75,000 | ||||||||||||||||||||||||||||
Percentage of issued convertible debt | 8.00% | ||||||||||||||||||||||||||||
Percentage of conversion price | 60.00% | ||||||||||||||||||||||||||||
Transaction document amount | $ 3,500 | ||||||||||||||||||||||||||||
Transaction cost paid | $ 6,000 | ||||||||||||||||||||||||||||
Black Forest Capital LLC [Member] | |||||||||||||||||||||||||||||
Convertible promissory notes principal amount | $ 150,000 | ||||||||||||||||||||||||||||
Note interest rate | 8.00% | ||||||||||||||||||||||||||||
Original debt amount | $ 140,000 | ||||||||||||||||||||||||||||
Debt redemption price, percentage | 130.00% | ||||||||||||||||||||||||||||
Percentage of conversion price | 60.00% | ||||||||||||||||||||||||||||
Transaction document amount | $ 12,000 | ||||||||||||||||||||||||||||
Transaction cost paid | $ 12,000 | ||||||||||||||||||||||||||||
GW Holdings Group LLC [Member] | |||||||||||||||||||||||||||||
Convertible promissory notes principal amount | $ 61,000 | ||||||||||||||||||||||||||||
Note interest rate | 8.00% | ||||||||||||||||||||||||||||
Original debt amount | $ 50,000 | ||||||||||||||||||||||||||||
Transaction document amount | 3,000 | ||||||||||||||||||||||||||||
Transaction cost paid | 3,000 | ||||||||||||||||||||||||||||
Legal fees | 4,000 | ||||||||||||||||||||||||||||
Paid legal fees | $ 4,000 | ||||||||||||||||||||||||||||
Tranche One [Member] | |||||||||||||||||||||||||||||
Note interest rate | 1.25% | 1.25% | |||||||||||||||||||||||||||
Original debt amount | $ 25,000 | ||||||||||||||||||||||||||||
Debt discount related to notes converted to common stock | 12,500 | ||||||||||||||||||||||||||||
Notes Payable | $ 275,000 | 275,000 | |||||||||||||||||||||||||||
Proceeds from issuance of debt | 250,000 | ||||||||||||||||||||||||||||
Tranche Two [Member] | |||||||||||||||||||||||||||||
Debt discount related to notes converted to common stock | 12,500 | ||||||||||||||||||||||||||||
Notes Payable | $ 137,500 | $ 137,500 | |||||||||||||||||||||||||||
Repayment of Notes [Member] | |||||||||||||||||||||||||||||
Warrants issued for purchase of common stock | shares | 3,647,023 | ||||||||||||||||||||||||||||
Fair value of warrants | $ 199,396 | ||||||||||||||||||||||||||||
Debt conversion of convertible debt into shares | shares | 4,656,000 | ||||||||||||||||||||||||||||
Convertible debt principal amount | $ 117,000 | ||||||||||||||||||||||||||||
Amortization Amount [Member] | |||||||||||||||||||||||||||||
Convertible price per share | $ / shares | $ 0.4634 | $ 0.4634 | |||||||||||||||||||||||||||
Percentage of premium over payments | 30.00% | 30.00% | |||||||||||||||||||||||||||
Senior Secured Convertible Debentures [Member] | Redwood Fund III, LLC, [Member] | |||||||||||||||||||||||||||||
Convertible debt principal amount | 3,520,000 | ||||||||||||||||||||||||||||
Secured Investor Notes Payable [Member] | Redwood Fund III, LLC, [Member] | |||||||||||||||||||||||||||||
Convertible notes payable exchange | $ 3,520,000 | ||||||||||||||||||||||||||||
Minimum [Member] | LG Capital Financing [Member] | |||||||||||||||||||||||||||||
Debt redemption price, percentage | 115.00% | ||||||||||||||||||||||||||||
Redemption price percentage equal to principal plus interest being redeemed | 115.00% | ||||||||||||||||||||||||||||
Minimum [Member] | JSJ Investments Financing [Member] | |||||||||||||||||||||||||||||
Debt redemption price, percentage | 135.00% | ||||||||||||||||||||||||||||
Convertible price per share | $ / shares | $ 0.0013 | $ 0.0013 | |||||||||||||||||||||||||||
Minimum [Member] | JMJ Financial Financing [Member] | |||||||||||||||||||||||||||||
Convertible price per share | $ / shares | 0.0006 | 0.0006 | |||||||||||||||||||||||||||
Minimum [Member] | EMA Financial Financing [Member] | |||||||||||||||||||||||||||||
Convertible price per share | $ / shares | 0.00108 | 0.00108 | |||||||||||||||||||||||||||
Minimum [Member] | GW Holdings Group LLC [Member] | |||||||||||||||||||||||||||||
Debt redemption price, percentage | 135.00% | ||||||||||||||||||||||||||||
Maximum [Member] | LG Capital Financing [Member] | |||||||||||||||||||||||||||||
Debt redemption price, percentage | 145.00% | ||||||||||||||||||||||||||||
Redemption price percentage equal to principal plus interest being redeemed | 145.00% | ||||||||||||||||||||||||||||
Maximum [Member] | JSJ Investments Financing [Member] | |||||||||||||||||||||||||||||
Debt redemption price, percentage | 145.00% | ||||||||||||||||||||||||||||
Convertible price per share | $ / shares | 0.0033 | 0.0033 | |||||||||||||||||||||||||||
Maximum [Member] | JMJ Financial Financing [Member] | |||||||||||||||||||||||||||||
Convertible price per share | $ / shares | 0.0036 | 0.0036 | |||||||||||||||||||||||||||
Maximum [Member] | EMA Financial Financing [Member] | |||||||||||||||||||||||||||||
Convertible price per share | $ / shares | $ 0.0027 | $ 0.0027 | |||||||||||||||||||||||||||
Maximum [Member] | GW Holdings Group LLC [Member] | |||||||||||||||||||||||||||||
Debt redemption price, percentage | 150.00% | ||||||||||||||||||||||||||||
Assignee [Member] | |||||||||||||||||||||||||||||
Convertible debt shares issued upon conversion | shares | 29,165,277 | ||||||||||||||||||||||||||||
Assignee [Member] | Minimum [Member] | |||||||||||||||||||||||||||||
Common stock price per share | $ / shares | $ 0.008 | ||||||||||||||||||||||||||||
Assignee [Member] | Maximum [Member] | |||||||||||||||||||||||||||||
Common stock price per share | $ / shares | $ 0.015 | ||||||||||||||||||||||||||||
Lender [Member] | |||||||||||||||||||||||||||||
Number of shares issued during period | shares | 5,261,445 | 10,627,611 | |||||||||||||||||||||||||||
Additional share issued during period | shares | 5,761,145 | 2,646,216 | |||||||||||||||||||||||||||
Purchaser [Member] | |||||||||||||||||||||||||||||
Number of purchasers | Investor | 3 | ||||||||||||||||||||||||||||
Notes Payable | $ 2,631,503 | ||||||||||||||||||||||||||||
Investors Warrants $ 39,000 [Member] | |||||||||||||||||||||||||||||
Convertible promissory notes principal amount | $ 39,000 | $ 39,000 | |||||||||||||||||||||||||||
Promissory notes principal amount | $ 550,000 | $ 550,000 | |||||||||||||||||||||||||||
Investors Warrants $ 39,000 [Member] | Carrying Value [Member] | |||||||||||||||||||||||||||||
Convertible promissory notes principal amount | 1,235,347 | ||||||||||||||||||||||||||||
Promissory notes principal amount | 342,000 | ||||||||||||||||||||||||||||
Embedded derivative | 183,000 | ||||||||||||||||||||||||||||
Fair value of embedded derivative liability | 279,000 | ||||||||||||||||||||||||||||
Derivative liabilities | 893,347 | ||||||||||||||||||||||||||||
Change in fair value of the embedded derivative liability | $ 893,347 | $ 0 | |||||||||||||||||||||||||||
Typenex Note Payable [Member] | |||||||||||||||||||||||||||||
Change in fair value of derivative liabilities | 265,179 | ||||||||||||||||||||||||||||
Warrant [Member] | |||||||||||||||||||||||||||||
Warrants issued for purchase of common stock | shares | 20,800,157 | 3,647,023 | |||||||||||||||||||||||||||
Warrants issued for purchase of common stock exercise price | $ / shares | $ 0.80 | ||||||||||||||||||||||||||||
Fair value of warrants | $ 71,342 | ||||||||||||||||||||||||||||
Debt conversion of convertible debt into shares | shares | 71,342 | 199,396 | |||||||||||||||||||||||||||
Investors Warrants [Member] | Interest Expense Two [Member] | |||||||||||||||||||||||||||||
Fair value of warrants | $ 0 | $ 0 | |||||||||||||||||||||||||||
Investor Warrant #1 [Member] | |||||||||||||||||||||||||||||
Warrants exercised price per share | $ / shares | $ 0.65 | $ 0.65 | |||||||||||||||||||||||||||
Warrants exercisable | shares | 423,076 | ||||||||||||||||||||||||||||
Warrant expiration date | Sep. 27, 2019 | ||||||||||||||||||||||||||||
Investor Warrant #2: [Member] | |||||||||||||||||||||||||||||
Warrants exercised price per share | $ / shares | 0.65 | $ 0.65 | |||||||||||||||||||||||||||
Warrants exercisable | shares | 846,153 | ||||||||||||||||||||||||||||
Warrant expiration date | Sep. 27, 2019 | ||||||||||||||||||||||||||||
Investor Warrant #3: [Member] | |||||||||||||||||||||||||||||
Warrants exercised price per share | $ / shares | $ 0.65 | $ 0.65 | |||||||||||||||||||||||||||
Warrants exercisable | shares | 846,153 | ||||||||||||||||||||||||||||
Warrant expiration date | Sep. 27, 2019 | ||||||||||||||||||||||||||||
Note and Investor Warrants [Member] | |||||||||||||||||||||||||||||
Proceeds from issuance of note and Investor Warrants | $ 100,000 | ||||||||||||||||||||||||||||
Subscription Agreement [Member] | |||||||||||||||||||||||||||||
Number of accredited investors | Investor | 1 | 5 | |||||||||||||||||||||||||||
Convertible promissory notes principal amount | $ 400,000 | $ 550,000 | |||||||||||||||||||||||||||
Warrants issued for purchase of common stock | shares | 50,000 | 1,600,000 | |||||||||||||||||||||||||||
Warrants issued for purchase of common stock exercise price | $ / shares | $ 0.25 | ||||||||||||||||||||||||||||
Warrants expiration term | 3 years | ||||||||||||||||||||||||||||
Note expiration period | 1 year | 1 year | |||||||||||||||||||||||||||
Note interest rate | 8.00% | ||||||||||||||||||||||||||||
Issuance of warrant | $ 400,000 | $ 528,058 | |||||||||||||||||||||||||||
Fair value of warrants | 42,000 | 253,000 | |||||||||||||||||||||||||||
Beneficial conversion feature | $ 358,000 | 275,000 | |||||||||||||||||||||||||||
Amortized debt discount | $ 453,000 | ||||||||||||||||||||||||||||
Number of warrants issued during period | shares | 1,740,000 | ||||||||||||||||||||||||||||
Debt maturity date | Oct. 17, 2015 | ||||||||||||||||||||||||||||
Subscription Agreement [Member] | Four Notes Member [Member] | |||||||||||||||||||||||||||||
Note interest rate | 12.00% | ||||||||||||||||||||||||||||
Original debt amount | $ 200,000 | ||||||||||||||||||||||||||||
Subscription Agreement [Member] | One Notes Member [Member] | |||||||||||||||||||||||||||||
Note interest rate | 12.00% | ||||||||||||||||||||||||||||
Original debt amount | $ 350,000 | ||||||||||||||||||||||||||||
Subscription Agreement [Member] | Warrant [Member] | |||||||||||||||||||||||||||||
Warrants issued for purchase of common stock exercise price | $ / shares | $ 0.40 | ||||||||||||||||||||||||||||
Warrants expiration term | 3 years | ||||||||||||||||||||||||||||
Subscription Agreement [Member] | Warrant [Member] | First Ninety Days of Term [Member] | |||||||||||||||||||||||||||||
Note interest rate | 12.00% | ||||||||||||||||||||||||||||
Subscription Agreement [Member] | Warrant [Member] | Next Nine Months of Term [Member] | |||||||||||||||||||||||||||||
Note interest rate | 18.00% |
Convertible Note Payable - Sche
Convertible Note Payable - Schedule of Short Term Convertible Notes (Details) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Debt discount | $ 0 | $ (166,668) |
Short term convertible notes | 2,180,364 | 3,041,332 |
Derivative and warrant liability | $ 839,644 | 1,939,292 |
Typenex Note Payable [Member] | ||
Short term convertible notes | 342,000 | |
Derivative and warrant liability | 893,347 | |
Vista Note Payable [Member] | ||
Short term convertible notes | 132,000 | |
Derivative and warrant liability | 195,506 | |
Redwood Note Payable [Member] | ||
Short term convertible notes | $ 892,500 | 2,184,000 |
Derivative and warrant liability | 270,094 | 850,439 |
2013 and 2014 Convertible Notes Payable [Member] | ||
Short term convertible notes | 350,000 | $ 550,000 |
2015 Convertible Notes Payable [Member] | ||
Short term convertible notes | 937,864 | |
Derivative and warrant liability | $ 569,550 |
Convertible Notes Payable - Sch
Convertible Notes Payable - Schedule of Investors Notes Receivable (Details) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Total Investor Notes Receivable | $ 1,535,000 | $ 2,175,260 |
Typenex [Member] | ||
Total Investor Notes Receivable | 255,260 | |
Redwood [Member] | ||
Total Investor Notes Receivable | $ 1,535,000 | $ 1,920,000 |
Convertible Note Payable - Sc59
Convertible Note Payable - Schedule of Interest Expense for Short Term Convertible Notes (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Interest expense on short term convertible notes | $ 412,005 | $ 412,533 |
Debt discount | 166,669 | 353,389 |
Typenex Note Payable [Member] | ||
Interest expense on short term convertible notes | 10,774 | 1,666 |
Vista Note Payable [Member] | ||
Interest expense on short term convertible notes | 21,166 | $ 14,927 |
Redwood Note Payable [Member] | ||
Interest expense on short term convertible notes | 135,650 | |
2013 and 2014 Convertible Notes Payable [Member] | ||
Interest expense on short term convertible notes | 36,074 | $ 42,551 |
2015 Convertible Notes Payable [Member] | ||
Interest expense on short term convertible notes | $ 41,672 |
Convertible Notes Payable - S60
Convertible Notes Payable - Schedule of Debt (Details) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 | Jul. 31, 2011 |
Face amount of note | $ 350,000 | $ 550,000 | $ 1,400,000 |
Derivative and warrant liability | $ 3 | 1,045,945 | |
Allocated to embedded derivatives | 1,235,347 | ||
Notes Payable | $ 1,005,000 | 555,000 | |
Investors Warrants $ 39,000 [Member] | |||
Face amount of note | 550,000 | ||
Original issuance discount | (50,000) | ||
Allocation to investor warrants | (182,000) | ||
Allocated to embedded derivatives | (279,000) | ||
Notes Payable | 39,000 | ||
Investors Warrants $ 100,000 [Member] | |||
Face amount of note | $ 100,000 | ||
Allocated to embedded derivatives | |||
Notes Payable | $ 100,000 | ||
Carrying Value [Member] | Investors Warrants $ 39,000 [Member] | |||
Face amount of note | 342,000 | ||
Derivative and warrant liability | 893,347 | ||
Allocated to embedded derivatives | 183,000 | ||
Notes Payable | 1,235,347 | ||
Carrying Value [Member] | Investors Warrants $ 100,000 [Member] | |||
Face amount of note | 132,000 | ||
Derivative and warrant liability | 195,506 | ||
Notes Payable | 327,506 | ||
JSJ Investments Financing - Note 2 [Member] | Carrying Value [Member] | |||
Face amount of note | $ 937,864 | ||
Derivative and warrant liability | 569,550 | ||
Notes Payable | 1,507,414 | ||
JSJ Investments Financing - Note 2 [Member] | Carrying Value [Member] | Inception [Member] | |||
Face amount of note | $ 958,000 | ||
Derivative and warrant liability | |||
Notes Payable | $ 958,000 | ||
Prepayment Option [Member] | Carrying Value [Member] | |||
Face amount of note | 892,000 | 2,184,000 | |
Derivative and warrant liability | 270,094 | 850,439 | |
Notes Payable | $ 162,594 | $ 3,034,439 |
Convertible Notes Payable - S61
Convertible Notes Payable - Schedule of Conversion Eligible Tranches (Details) | Sep. 30, 2015USD ($) |
Typenex Co-Investment, LLC [Member] | |
Convertible debt | $ 550,000 |
Vista Capital Investments LLC [Member] | |
Convertible debt | 200,000 |
Initial Tranche [Member] | Typenex Co-Investment, LLC [Member] | |
Convertible debt | 275,000 |
First Subsequent Tranche [Member] | Typenex Co-Investment, LLC [Member] | |
Convertible debt | 137,500 |
Second Subsequent Tranche [Member] | Typenex Co-Investment, LLC [Member] | |
Convertible debt | 137,500 |
Initial Consideration [Member] | Vista Capital Investments LLC [Member] | |
Convertible debt | 100,000 |
Subsequent Consideration [Member] | Vista Capital Investments LLC [Member] | |
Convertible debt | $ 100,000 |
Convertible Notes Payable - S62
Convertible Notes Payable - Schedule of Investor Warrants (Details) | Sep. 30, 2015USD ($) |
Purchase price allocated to each investor warrant | $ 550,000 |
Investor Warrant #1 [Member] | |
Purchase price allocated to each investor warrant | 275,000 |
Investor Warrant #2: [Member] | |
Purchase price allocated to each investor warrant | 137,500 |
Investor Warrant #3: [Member] | |
Purchase price allocated to each investor warrant | $ 137,500 |
Convertible Notes Payable - S63
Convertible Notes Payable - Schedule of Fair Value Hierarchy of Outstanding Derivative Liability (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2015 | Dec. 31, 2014 | |
Included in current liabilities: Derivative Liability | $ 3 | $ 1,045,945 |
Derivative liability valuation technique | Monte Carlo Pricing Model | |
Derivative liability unobservable input | Prevailing interest rates Companys stock volatility Expected term | |
Fair Value, Inputs, Level 3 [Member] | ||
Included in current liabilities: Derivative Liability | $ 839,644 | $ 1,939,292 |
Note Payable (Details Narrative
Note Payable (Details Narrative) - USD ($) | 1 Months Ended | 9 Months Ended | ||
Jul. 31, 2011 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Note payable | $ 1,400,000 | $ 350,000 | $ 550,000 | |
Percentage of accrued interest rate | 5.50% | |||
Debt instrument, maturity date | Aug. 1, 2016 | |||
Notes payable, outstanding | 1,280,000 | $ 1,325,000 | ||
Notes, principal payment | 1,280,000 | |||
City Of North Vernon [Member] | ||||
Notes, principal payment | 45,000 | $ 60,000 | ||
Interest expense incurred and accrued on note payable | $ 53,000 | $ 68,000 |
Note Payable - Schedule of Prin
Note Payable - Schedule of Principal and Interest Payments (Details) | 9 Months Ended |
Sep. 30, 2015USD ($) | |
Notes payable, Principal | $ 1,280,000 |
Notes payable, Interest | 291,535 |
Notes payable, Total | 1,571,535 |
2015 [Member] | |
Notes payable, Principal | 62,838 |
Notes payable, Interest | 177,259 |
Notes payable, Total | 240,097 |
2016 [Member] | |
Notes payable, Principal | 1,217,162 |
Notes payable, Interest | 114,276 |
Notes payable, Total | $ 1,331,438 |
Related Party Transaction (Deta
Related Party Transaction (Details Narrative) - USD ($) | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Advances from president for fund operations | $ 50,000 | ||
Repayment of advances received from president | 55,000 | ||
Short term debt to related parties | $ 221,000 | $ 221,000 | |
Accrued interest due on demand | 10.00% | ||
Interest expense of related parties | $ 16,000 | $ 7,800 | |
City Of North Vernon [Member] | |||
Short term debt to related parties | $ 1,400,000 |
Common Stock (Details Narrative
Common Stock (Details Narrative) - $ / shares | Sep. 18, 2015 | Jun. 17, 2015 | Apr. 24, 2015 | Apr. 22, 2015 | Apr. 10, 2015 | May. 22, 2013 | Sep. 30, 2015 | Dec. 31, 2014 |
Common stock outstanding | 392,921,528 | 86,617,154 | ||||||
Common stock issued | 392,921,528 | 86,617,154 | ||||||
Common stock, par value | $ 0.001 | $ 0.001 | ||||||
Number of shares issued for service | 125,000 | |||||||
Warrants issued for purchase of common stock | 36,150,462 | 3,647,023 | 100,000 | |||||
Number of warrants exercisable | 31,719 | 199,396 | ||||||
Carter Terry [Member] | ||||||||
Issuance of common stock shares to eliminate the issuance of warrants | 300,000 | |||||||
Windaus Global Energy, Inc. [Member] | ||||||||
Common stock outstanding | 955,000 | 955,000 | ||||||
Preferred stock outstanding | 581,961 | 581,961 | ||||||
Windaus Global Energy, Inc. [Member] | Share Exchange Agreement [Member] | ||||||||
Stockholders' equity, description | 1:25.808 basis | 1:25.808 basis | ||||||
Common stock outstanding | 24,646,646 | 24,646,646 | ||||||
Preferred stock outstanding | 15,019,253 | 15,019,253 | ||||||
Number of shares exchanged in share exchange agreement | 39,665,899 | 39,665,899 | ||||||
Common stock issued | 24,000,000 | 24,000,000 | ||||||
Common stock, par value | $ 0.001 | $ 0.001 | ||||||
Investors [Member] | ||||||||
Number of common stock shares issued | 11,344,886 |
Stock Options (Details Narrativ
Stock Options (Details Narrative) | 9 Months Ended |
Sep. 30, 2015USD ($)shares | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Total remainder of stock compensation expense | $ | $ 169,000 |
Options vested | 26,011,647 |
Total options expected to vest | 26,011,647 |
Stock option incentives shares | 5,000,000 |
Percentage of shares subject to option vest | 25.00% |
Number of common stock forfeited | 106,250 |
Stock Options - Schedule of Sto
Stock Options - Schedule of Stock Option Activity (Details) - USD ($) | Jan. 02, 2015 | Sep. 30, 2015 | Dec. 31, 2014 |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Number of Shares, Outstanding, Beginning balance | 25,761,647 | 10,110,640 | |
Number of Shares, Granted | 250,000 | 250,000 | 16,100,000 |
Number of shares, Exercised | (448,993) | ||
Number of Shares, Outstanding, Ending balance | 26,011,647 | 25,761,647 | |
Weighted average Exercise Price, Outstanding, Beginning balance | $ 0.09 | $ 0.08 | |
Weighted average Exercise Price, Granted | $ 0.15 | 0.15 | |
Weighted average Exercise Price, Exercised | (0.05) | ||
Weighted average Exercise Price, Outstanding, Ending balance | $ 0.09 | $ 0.09 | |
Weight average Contractual Term (years), Outstanding | 6 years 2 months 12 days | 2 years 9 months | |
Weight average Contractual Term (years), Granted | 0 years | 10 years | |
Weight average Contractual Term (years), Exercised | 0 years | 3 years | |
Weight average Contractual Term (years), Ending balance | 6 years 2 months 9 days | 6 years 2 months 12 days | |
Aggregate Intrinsic Value, Outstanding |
Stock Options - Schedule of S70
Stock Options - Schedule of Stock Compensation Expense (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Stock compensation expense | $ 246,399 | $ 122,126 |
Stock Options - Schedule of S71
Stock Options - Schedule of Stock Option Plan Activity (Details) - $ / shares | Jan. 02, 2015 | Sep. 30, 2015 | Dec. 31, 2014 |
Number of Shares, Outstanding, Beginning balance | 25,761,647 | 10,110,640 | |
Number of Shares, Granted | 250,000 | 250,000 | 16,100,000 |
Number of Shares, Outstanding, Ending balance | 26,011,647 | 25,761,647 | |
Weighted average Exercise Price, Outstanding, Beginning balance | $ 0.09 | $ 0.08 | |
Weighted average Exercise Price, Granted | 0.15 | 0.15 | |
Weighted average Exercise Price, Outstanding, Ending balance | $ 0.09 | $ 0.09 | |
Weight average Contractual Term (years), Beginning balance | 6 years 2 months 12 days | 2 years 9 months | |
Weight average Contractual Term (years), Granted | 0 years | 10 years | |
Weight average Contractual Term (years), Ending balance | 6 years 2 months 9 days | 6 years 2 months 12 days | |
Incentive Stock Option Plan [Member] | |||
Number of Shares, Outstanding, Beginning balance | 700,000 | ||
Number of Shares, Granted | 700,000 | ||
Forfeited | (106,250) | ||
Number of Shares, Outstanding, Ending balance | 593,750 | 700,000 | |
Weighted average Exercise Price, Outstanding, Beginning balance | $ 0.15 | ||
Weighted average Exercise Price, Granted | $ 0.15 | ||
Weighted average Exercise Price, Forfeited | |||
Weighted average Exercise Price, Outstanding, Ending balance | $ 0.15 | $ 0.15 | |
Weight average Contractual Term (years), Beginning balance | 3 years | 0 years | |
Weight average Contractual Term (years), Granted | 3 years | ||
Weight average Contractual Term (years), Ending balance | 2 years 1 month 21 days | 3 years |
Warrants (Details Narrative)
Warrants (Details Narrative) - $ / shares | Sep. 18, 2015 | May. 12, 2015 | Apr. 24, 2015 | Apr. 30, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Sep. 30, 2015 | Dec. 31, 2014 |
Warrants issued for purchase of common stock | 36,150,462 | 3,647,023 | 100,000 | |||||
Number of common stock issued for debt conversion | 136,000 | |||||||
Warrants issued to purchase common stock | 522,983 | |||||||
Common stock price per share | $ 0.40 | |||||||
Warrant [Member] | ||||||||
Warrants issued for purchase of common stock | 20,800,157 | 3,647,023 | ||||||
Number of common stock issued for debt conversion | 71,342 | 199,396 | ||||||
Warrants issued to purchase common stock | 522,983 | 722,472 | ||||||
Common stock price per share | $ 0.04 | $ 0.65 |
Warrants - Schedule of Stock Wa
Warrants - Schedule of Stock Warrants Activity (Details) - $ / shares | May. 12, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Dec. 31, 2014 |
Shares Granted | 522,983 | |||
Weighted Average Exercise Price, Granted | $ 0.40 | |||
Warrant [Member] | ||||
Shares Outstanding, Beginning Balance | 10,016,127 | 9,692,540 | 9,106,000 | |
Shares Granted | 522,983 | 722,472 | ||
Warrants exchanged for common stock | (71,342) | (199,396) | (135,932) | |
Shares Outstanding, Ending Balance | 9,944,785 | 10,016,127 | 9,692,540 | |
Weighted Average Exercise Price, Outstanding, Beginning | $ 0.45 | $ 0.44 | $ 0.42 | |
Weighted Average Exercise Price, Granted | 0.04 | 0.65 | ||
Weighted Average Exercise Price, Warrants exchanged for common stock | $ (0.40) | (0.40) | (0.05) | |
Weighted Average Exercise Price, Outstanding, Ending | $ 0.45 | $ 0.45 | $ 0.44 |
Earnings Per Share (Details Nar
Earnings Per Share (Details Narrative) - shares | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Earnings Per Share [Abstract] | ||
Potential dilutive securities |
Earnings Per Share - Schedule o
Earnings Per Share - Schedule of Computation of Basic and Diluted Net Income (Loss) Per Share (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Earnings Per Share [Abstract] | ||||
Net loss attributable to common stockholders | $ (2,965,069) | $ (3,546,789) | ||
Basic weighted average outstanding shares of common stock | 139,103,989 | 85,200,993 | ||
Dilutive effect of common stock equivalents | ||||
Dilutive weighted average common stock equivalents | 139,103,989 | 85,200,993 | ||
Net loss per share of voting and nonvoting common stock Basic and Diluted | $ 0 | $ (0.02) | $ (0.02) | $ (0.04) |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) | May. 12, 2015$ / sharesshares | Apr. 10, 2015shares | Jan. 02, 2015shares | Oct. 02, 2014USD ($) | Sep. 11, 2014USD ($) | Aug. 18, 2014USD ($) | Jul. 30, 2014 | May. 02, 2014USD ($)shares | Sep. 30, 2015USD ($)shares | Sep. 30, 2014USD ($) | Dec. 31, 2014USD ($)ft²shares |
Monthly rental payment under operating lease | $ 4,750 | ||||||||||
Lease term description | Extend the lease for one twelve month period | ||||||||||
Rent expense | $ 188,534 | $ 55,915 | |||||||||
Warrants issued to purchase common stock | shares | 522,983 | ||||||||||
Common stock price per share | $ / shares | $ 0.40 | ||||||||||
Percentage of amount equity raised | 100.00% | ||||||||||
Proceeds from repayment of debt | $ 136,000 | $ 15,000 | |||||||||
Percentage of common stock equal value | 6.00% | ||||||||||
Acquire common stock shares | shares | 13,500,000 | ||||||||||
Number of Shares, Granted | shares | 250,000 | 250,000 | 16,100,000 | ||||||||
Carter Terry [Member] | |||||||||||
Issuance of common stock shares to eliminate the issuance of warrants | shares | 300,000 | ||||||||||
Preferred Stock [Member] | |||||||||||
Percentage of amount equity raised | 100.00% | ||||||||||
Percentage of common stock equal value | 6.00% | ||||||||||
Institutional Financing Engagement Agreement [Member] | |||||||||||
Percentage of qualifying placements | 10.00% | ||||||||||
Percentage of stock and warrants sold | 10.00% | ||||||||||
Term of warrant | 5 years | ||||||||||
Investment Banking Engagement Agreement [Member] | |||||||||||
Term of warrant | 1 year | ||||||||||
Monthly fees paid | $ 10,000 | ||||||||||
First $2 Million Raised [Member] | |||||||||||
Amount raised for successful transaction | $ 2,000,000 | ||||||||||
Percentage of diluted outstanding equity at day closing | 1.25% | ||||||||||
Each $1.5 Million Raised [Member] | |||||||||||
Amount raised for successful transaction | $ 1,500,000 | ||||||||||
Number common stock issued during period | shares | 500,000 | ||||||||||
8% Of Equity Raised [Member] | |||||||||||
Percentage of amount equity raised | 8.00% | ||||||||||
Hybrid equity raised amount | $ 5,000,000 | ||||||||||
6% Of Equity Raised [Member] | |||||||||||
Percentage of amount equity raised | 6.00% | ||||||||||
Hybrid equity raised amount | $ 5,000,000 | ||||||||||
Proceeds from repayment of debt | $ 5,000,000 | ||||||||||
Subsidiary Leased Office [Member] | |||||||||||
Area of office | ft² | 9,500 | ||||||||||
Rent expense | $ 24,000 | ||||||||||
Manufacturing Space [Member] | |||||||||||
Area of office | ft² | 50,000 | ||||||||||
Rent expense | $ 120,000 | ||||||||||
First Twenty-four Months [Member] | |||||||||||
Monthly rental payment under operating lease | $ 7,800 | ||||||||||
Lease, term | 24 months | ||||||||||
Another 12 Months [Member] | |||||||||||
Monthly rental payment under operating lease | $ 8,500 | ||||||||||
Lease, term | 12 months |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
Operating loss carry forwards | $ 16,400,000 | $ 14,791,000 | |
Operating loss expiration date | Will expire in years 2020 through 2034 | ||
Statutory federal tax rate | 32.00% | 32.00% |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Income Tax Assets (Details) - USD ($) | Sep. 30, 2015 | Jun. 30, 2014 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carry forwards | $ 6,210,000 | $ 2,459,000 |
Valuation allowance | $ (6,210,000) | $ (2,459,000) |
Net deferred income tax asset |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Statutory Federal Tax Rate (Details) | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Income Tax Disclosure [Abstract] | ||
Federal income tax rate | 32.00% | 32.00% |
State income tax | 6.00% | 8.00% |
Charge for deferred tax asset | (38.00%) | (40.00%) |
Total |
Segment Information - Schedule
Segment Information - Schedule of Operating Segments (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Sales | $ 1,732,507 | $ 373,538 | $ 2,821,149 | $ 825,798 |
Cost of goods sold | 1,564,746 | 685,528 | 2,349,329 | 1,235,126 |
Gross profit | 167,761 | $ (311,990) | 471,820 | (409,328) |
Accounts receivable, gross | 331,568 | 331,568 | ||
Domestic [Member] | ||||
Sales | 56,758 | 14,763 | ||
Cost of goods sold | 47,265 | 8,862 | ||
Gross profit | 9,492 | 2,092 | ||
Accounts receivable, gross | 10,666 | 10,666 | ||
International [Member] | ||||
Sales | 2,764,391 | 811,035 | ||
Cost of goods sold | 2,302,063 | 1,213,045 | ||
Gross profit | 462,328 | $ (402,010) | ||
Accounts receivable, gross | $ 320,902 | $ 320,902 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Oct. 01, 2015 | Oct. 01, 2015 | Aug. 14, 2015 | Apr. 20, 2015 | Mar. 10, 2015 | Mar. 09, 2015 | Mar. 06, 2015 | Mar. 05, 2015 | Apr. 30, 2015 | Sep. 30, 2015 | Apr. 02, 2015 | Dec. 31, 2014 |
Convertible promissory notes principal amount | $ 1,005,000 | $ 555,000 | ||||||||||
Original debt amount | 64,000 | |||||||||||
Interest payable | $ 717,693 | $ 426,938 | ||||||||||
Number of warrants issued during period | 140,000 | |||||||||||
Typenex Co-Investment, LLC [Member] | Lender [Member] | ||||||||||||
Number of warrants issued during period | 224,561,651 | |||||||||||
JSJ Investments Financing [Member] | ||||||||||||
Convertible promissory notes principal amount | $ 112,000 | $ 100,000 | ||||||||||
Original debt amount | 112,000 | |||||||||||
Transaction document amount | 2,000 | 2,000 | ||||||||||
Transaction cost paid | $ 8,000 | $ 10,000 | ||||||||||
EMA Financial Financing [Member] | ||||||||||||
Convertible promissory notes principal amount | $ 100,000 | |||||||||||
Original debt amount | 90,000 | |||||||||||
Transaction document amount | $ 3,500 | |||||||||||
JMJ Financial Financing [Member] | ||||||||||||
Convertible promissory notes principal amount | $ 100,000 | |||||||||||
Original debt amount | $ 90,000 | |||||||||||
Union Captial Note [Member] | ||||||||||||
Convertible promissory notes principal amount | $ 75,000 | |||||||||||
Original debt amount | $ 75,000 | |||||||||||
Transaction document amount | 3,500 | |||||||||||
Transaction cost paid | $ 6,000 | |||||||||||
LG Capital Financing [Member] | ||||||||||||
Convertible promissory notes principal amount | $ 105,000 | $ 105,000 | ||||||||||
Original debt amount | 90,000 | 105,000 | ||||||||||
Transaction document amount | 5,000 | 5,000 | ||||||||||
Transaction cost paid | 5,000 | $ 8,000 | ||||||||||
Legal fees | 10,000 | |||||||||||
Paid legal fees | $ 10,000 | |||||||||||
Redwood Investors Convertible Note [Member] | ||||||||||||
Convertible debt outstanding | $ 49,434 | |||||||||||
Convertible debt shares issued upon conversion | 273,900,000 | |||||||||||
Redwood Investors Convertible Note [Member] | Minimum [Member] | ||||||||||||
Common stock price per share | $ 0.0000520 | |||||||||||
Redwood Investors Convertible Note [Member] | Maximum [Member] | ||||||||||||
Common stock price per share | $ 0.000572 | |||||||||||
Subsequent Event [Member] | PowerUp Lending Limited [Member] | ||||||||||||
Convertible promissory notes principal amount | $ 195,000 | $ 195,000 | ||||||||||
Original debt amount | 150,000 | |||||||||||
Payment to daily charge for notes | $ 1,327 | |||||||||||
Interest payable | ||||||||||||
Transaction document amount | $ 2,995 | |||||||||||
Transaction cost paid | 2,995 | |||||||||||
Legal fees | 11,600 | |||||||||||
Paid legal fees | 11,600 | |||||||||||
Subsequent Event [Member] | PowerUp Lending Limited [Member] | Factoring Agreement [Member] | ||||||||||||
Convertible promissory notes principal amount | $ 195,000 | $ 195,000 | ||||||||||
Original debt amount | $ 15,000 | |||||||||||
Subsequent Event [Member] | Typenex Co-Investment, LLC [Member] | ||||||||||||
Warrants exercisable | 54,769 | |||||||||||
Subsequent Event [Member] | JSJ Investments Financing [Member] | ||||||||||||
Convertible debt outstanding | $ 36,765 | |||||||||||
Convertible debt shares issued upon conversion | 220,177,408 | |||||||||||
Subsequent Event [Member] | JSJ Investments Financing [Member] | Minimum [Member] | ||||||||||||
Common stock price per share | $ 0.000055 | |||||||||||
Subsequent Event [Member] | JSJ Investments Financing [Member] | Maximum [Member] | ||||||||||||
Common stock price per share | $ 0.00055 | |||||||||||
Subsequent Event [Member] | EMA Financial Financing [Member] | ||||||||||||
Convertible debt outstanding | $ 18,095 | |||||||||||
Convertible debt shares issued upon conversion | 134,529,956 | |||||||||||
Subsequent Event [Member] | EMA Financial Financing [Member] | Minimum [Member] | ||||||||||||
Common stock price per share | $ 0.000090 | |||||||||||
Subsequent Event [Member] | EMA Financial Financing [Member] | Maximum [Member] | ||||||||||||
Common stock price per share | $ 0.000495 | |||||||||||
Subsequent Event [Member] | JMJ Financial Financing [Member] | ||||||||||||
Convertible debt outstanding | $ 25,488 | |||||||||||
Convertible debt shares issued upon conversion | 141,800,000 | |||||||||||
Subsequent Event [Member] | JMJ Financial Financing [Member] | Minimum [Member] | ||||||||||||
Common stock price per share | $ 0.00006 | |||||||||||
Subsequent Event [Member] | JMJ Financial Financing [Member] | Maximum [Member] | ||||||||||||
Common stock price per share | $ 0.00060 | |||||||||||
Subsequent Event [Member] | Union Captial Note [Member] | ||||||||||||
Convertible debt outstanding | $ 58,927 | |||||||||||
Convertible debt shares issued upon conversion | 583,354,617 | |||||||||||
Subsequent Event [Member] | Union Captial Note [Member] | Minimum [Member] | ||||||||||||
Common stock price per share | $ 0.00060 | |||||||||||
Subsequent Event [Member] | Union Captial Note [Member] | Maximum [Member] | ||||||||||||
Common stock price per share | $ 0.00006 | |||||||||||
Subsequent Event [Member] | LG Capital Financing [Member] | ||||||||||||
Convertible debt outstanding | $ 7,873 | |||||||||||
Convertible debt shares issued upon conversion | 72,926,888 | |||||||||||
Subsequent Event [Member] | LG Capital Financing [Member] | Minimum [Member] | ||||||||||||
Common stock price per share | $ 0.0001 | |||||||||||
Subsequent Event [Member] | LG Capital Financing [Member] | Maximum [Member] | ||||||||||||
Common stock price per share | $ 0.0002 |