Renewable Energy and Power (RBNW) 10-Q 21 Mar 16 2015 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Dec. 31, 2015	Mar. 18, 2016
Document And Entity Information
Entity Registrant Name	Renewable Energy & Power, Inc.
Entity Central Index Key	1,608,430
Document Type	10-Q
Document Period End Date	Dec. 31, 2015
Amendment Flag	false
Current Fiscal Year End Date	--09-30
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		80,221,720
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2,015

Condensed Balance Sheets

Condensed Balance Sheets - USD ($)	Dec. 31, 2015	Sep. 30, 2015
Current Assets:
Cash		$ 60
Accounts receivable from others	$ 8,564	10,064
Accounts receivable from MDI (Notes 4)	182,883	1,554,400
Inventories	70,047	250,047
Total current assets	261,494	1,814,571
Property and equipment, net of accumulated depreciation of $144,623 and $131,021, respectively	305,877	319,479
Intangibles, net of accumulated amortization of $174,262 and $162,637, respectively	117,748	129,373
Other assets (security deposit)	5,000	5,000
Total Assets	690,119	$ 2,268,423
Current Liabilities:
Bank overdraft	311
Accounts payable to others	$ 46,158	$ 46,819
Accounts payable to MDI (Notes 4)		$ 1,429,046
Accrued interest payable to others	$ 1,529
Accrued interest payable to MDI (Notes 4)	61,804	$ 58,333
Payable to shareholder (Note 5)	74,110	74,110
Consulting fees payable to officers and shareholder	173,006	176,006
Short-term loan payable to officer (Note 5)	33,506	$ 25,901
Convertible notes payable, less discount and loan origination fees totaling $65,905 at December 31, 2015	29,845
Convertible notes payable to MDI less discount of $96,590 at December 31, 2015 (Note 4)	13,195
Total current liabilities	$ 433,464	$ 1,810,215
Convertible note payable to MDI (Note 4)		250,000
Total liabilities	$ 433,464	$ 2,060,215
Commitments and Contingencies (Note 4)
Shareholders' Equity:
Common stock, 200,000,000 shares authorized, par value $.001 per share, 80,221,720 and 74,521,720 shares issued and outstanding	$ 80,222	$ 74,522
Additional paid-in capital	1,025,947	798,530
Accumulated deficit	(849,514)	(664,844)
Total shareholders' equity	256,655	208,208
Total liabilities and stockholders' equity	$ 690,119	$ 2,268,423

Condensed Balance Sheets (Paren

Condensed Balance Sheets (Parenthetical) - USD ($)	Dec. 31, 2015	Sep. 30, 2015
Condensed Balance Sheets Parenthetical
Property and equipment, net of accumulated depreciation	$ 144,623	$ 131,021
Intangibles, net of accumulated amortization	174,262	$ 162,637
Convertible notes payable, less discount and loan origination fees	65,905
Convertible notes payable to MDI less discount	$ 96,590
Shareholders' Equity:
Common stock, par value	$ 0.001	$ .001
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares issued	80,221,720	74,521,720
Common stock, shares outstanding	80,221,720	74,521,720

Condensed Statements of Operati

Condensed Statements of Operations (Unaudited) - USD ($)	3 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Condensed Statements Of Operations
Revenues (Notes 4)	$ 170,000	$ 125,001
Cost of revenues	150,705	90,235
Gross profit	19,295	34,766
Operating expenses:
General and administrative	107,958	13,172
Amortization	11,625	13,601
Depreciation	13,602	11,625
Consultants	26,408	16,000
Total Operating Expanses	159,593	54,398
Loss from operations	(140,298)	(19,632)
Interest expense	(44,372)	(5,000)
Loss before federal income taxes	$ (184,670)	$ (24,632)
Federal income taxes
Net loss	$ (184,670)	$ (24,632)
Loss per share, basic and dilutive	$ 0	$ 0
Weighted average shares outstanding	77,878,242	74,521,720

Condensed Statements of Cash Fl

Condensed Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Cash flows from operating activities:
Net loss	$ (184,670)	$ (24,632)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	25,227	$ 25,226
Amortization of debt discount	39,372
Issuance of common stock for services	35,000
Changes in operating assets and liabilities:
Accounts receivable from MDI	(237,884)	$ (125,001)
Accounts receivable from others	1,500
Inventories	180,000	$ 87,296
Account payable to others	(661)	1,070
Accounts payable to MDI	45,140	17,666
Accrued interest payable to MDI	3,471	$ 5,000
Accrued interest payable to others	1,529
Consulting fees payable to officers	(3,000)	$ 13,000
Net cash provided by (used in) operating activities	$ (94,976)	$ (375)
Cash flows from investing activities
Cash flows from financing activities
Bank overdraft	$ 311
Proceeds from short-term loan payable to officer	7,605
Proceeds from issuance of convertible debt	87,000
Net cash provided by financing activities	94,916
Net increase (decrease) in cash	(60)	$ (375)
Cash at beginning of period	$ 60	462
Cash at end of period		$ 87
Supplemental Cash Flow Disclosures
Interest paid
Taxes paid
Supplemental Disclosures of Non-Cash Investing and Financing Activities
Payment of convertible note payable to MDI through netting of accounts receivable and accounts payable	$ 135,215
Conversion of convertible note payable to common stock	$ 5,000

Nature of Business

Nature of Business	3 Months Ended
	Dec. 31, 2015
Notes to Financial Statements
Note 1 - Nature of Business	Renewable Energy and Power (the Company or REAP) was incorporated on October 15, 2012, under the laws of the State of Nevada, for the purpose of conducting all legal business. The accompanying unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") and the rules and regulations of the U.S. Securities and Exchange Commission ("SEC"), as amended for interim financial information These financial statements should be read in conjunction with the audited financial statements and the notes thereto included in the Company's 2014 Annual Report on Form 10-K. The accompanying unaudited financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations and cash flows for the interim periods, but are not necessarily indicative of the results for any subsequent quarter or the entire year ending September 30, 2016. Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. It is management's opinion, however, that all material adjustments (consisting of normal recurring adjustments) have been made which are necessary for a fair financial statement presentation. The interim results for the three months ended December 31, 2015 are not necessarily indicative of results for the full fiscal year. The Company is engaged in the business of new and retrofit applications for LED lighting and innovative solar electrical generation. The LED products will lower the use of electrical power, lower maintenance costs for users and extend the useful life of lighting fixtures. The solar process will greatly increase the conversion of heat to electricity, and is patterned after technology that has been used in space exploration for many years. Management knows of no material adjustments needed in these financial statements to conform to Generally Accepted Accounting Principles.

Going Concern

Going Concern	3 Months Ended
	Dec. 31, 2015
Notes to Financial Statements
Note 2 - Going Concern	These financial statements for the three months ended December 31, 2015 were prepared assuming the Company will continue as a going concern. During the three months ended December 31, 2015, the Company has incurred a loss of $184,670 and has an accumulated deficit of $849,514. The Company will need to generate significant revenue in order to achieve profitability and may never become profitable. The Company has begun principal operations and, as is common with a start-up company, the Company has had recurring losses during its early stage. The Company's financial statements are prepared using generally accepted accounting principles applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, the Company does not have significant cash or other material assets, nor does it have an established source of revenue sufficient to cover its operating costs and to allow it to continue as a going concern. In the interim, shareholders of the Company have committed to meeting its minimal operating expenses.

Summary of Significant Accounti

Summary of Significant Accounting Policies	3 Months Ended
	Dec. 31, 2015
Notes to Financial Statements
Note 3 - Summary of Significant Accounting Policies	Basis of presentation The Company reports revenues and expenses using the accrual method of accounting for financial and tax reporting purposes. These financial statements are presented in United States dollars and have been prepared in accordance with United States generally accepted accounting principles. Management estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Revenue recognition The Company recognizes revenue from sales at the time the products are shipped, the price is determinable, the customers are invoiced and payment is reasonably assured. Invoices are due on a net 30 day basis.Shipping and handling costs are billed to customers and netted against shipping and handling expenses incurred by the Company, which are included in cost of revenues. All of the Company's sales are to Multichip Display, Inc. (MDI), a shareholder of the Company. See Note 4. Accounts receivable The Company grants credit, generally without collateral. The Company performs periodic credit evaluations of its customers' financial condition and believes that its customer acceptance, billing and collection policies are adequate to minimize potential credit risk. The Company has not incurred any credit losses to date. The Company provides an allowance for doubtful accounts that is based upon a review of outstanding receivables, historical collection information, and existing economic conditions. The allowance for bad debt is $0 at December 31, 2014 and 2015. Normal accounts receivable past due more than 30 days are considered delinquent. Delinquent receivables are written off based on individual credit evaluation and specific circumstances of the customer. See Note 4. Inventories Inventories are carried at the lower of cost (first-in, first-out, FIFO) or market (net realizable value) and include primarily Silicon wafers and displays with drivers. The inventories were purchased from two related parties during the period ended September 30, 2013. At September 30, 2015 and 2014, inventories consisted of parts and supplies. See Notes 4 and 5. Research and Development Costs During the three months ended December 31, 2015 and 2014, research and development costs totaled $16,153 and $0.

Related Party Transactions with

Related Party Transactions with Multichip Display, Inc. (MDI)	3 Months Ended
	Dec. 31, 2015
Notes to Financial Statements
Note 4 - Related Party Transactions with Multichip Display, Inc. (MDI)	MDI is owned by a minority shareholder (2,000,000 shares or 2.7%) of the Company. In addition, MDI became a minority shareholder (4,330,000 shares or 5.7%) through debt conversion (see below). The total direct and indirect ownership of REAP by MDI is 8.6% at December 31, 2014 and 2015. The Company has an exclusive contract to manufacture products under contract from MDI. MDI will be the sales agent for certain government and private company contracts; REAP manufactures products based on bid prices as agreed between the parties. The Company has also agreed to purchase parts from MDI. As part of the agreement, MDI has agreed to support the operations of the Company through December 31, 2015. MDI is both a significant customer and significant vendor of the Company. For the three months ending December 31, 2014 and 2015, all of the Company's sales resulted from transactions with MDI. The Company had the following related party transactions through December 31, 2015 for the time periods shown in the tables below. Three Months Ending December 31, 2015 2014 Sales to MDI $ 170,000 $ 125,001 Inventory purchases from MDI* 150,705 2,939 Rent expense paid to MDI - 7,500 Interest expense to MDI 3,471 5,000 Receivable from MDI 115,000 1,055,901 Accounts payable to MDI 112,118 1,036,497 Accrued interest payable to MDI 61,804 58,333 Convertible note payable to MDI, net of discount of $96,590 13,195 250,000 * Includes borrowings to pay for direct labor. The agreement with MDI includes an offset clause for accounts receivable from MDI and accounts payable to MDI. On November 11, 2015, the Company and MDI agreed to offset the receivable from MDI of $1,609,401, the accounts payable to MDI of $1,474,186 and $135,215 of the convertible note payable to MDI balance. The Company issued a new 8% Convertible Promissory Note for the remaining convertible note payable balance of $109,785. This note matures on December 31, 2016 and is convertible at the common stock par value of $0.001 per share.

Related Party Transactions wi10

Related Party Transactions with Initial Shareholder Group	3 Months Ended
	Dec. 31, 2015
Notes to Financial Statements
Note 5 - Related Party Transactions with Initial Shareholder Group	Consulting fees payable to officers and shareholder During the three months ended December 31, 2015 and 2014, the Company incurred $26,408 and $16,000, respectively, of consulting fees which are payable to two officers and to one shareholder of the Company. Total consulting fees payable to these officers and shareholder as of December 31, 2015 and September 30, 2015 were $173,006 and $176,006 respectively. Payable to shareholder Payable to shareholder totaled $74,110 at December 31, 2015 and September 30, 2015. Short-term loan payable to officer As of December 31, 2015 and September 30, 2015, officer advances to the Company totaled $33,506 and $25,901, respectively.

Share Capital

Share Capital	3 Months Ended
	Dec. 31, 2015
Notes to Financial Statements
Note 6 - Share Capital	The Company is authorized to issue 200,000,000 shares of common stock with a par value of $.001 and no preferred stock.

Income Taxes

Income Taxes	3 Months Ended
	Dec. 31, 2015
Notes to Financial Statements
Note 7 - Income Taxes	The difference between the expected income tax expense (benefit) and the actual tax expense (benefit) computed by using the Federal statutory rate of 34% is as follows: For the Three Months Ended December 31, 2015 2014 Expected income tax benefit at statutory rate of 34% $ 62,800 $ 36,900 Change in valuation allowance (62,800 ) ( 36,900 ) Income tax expense (benefit) $ 0 $ 0 Deferred tax assets and liabilities are provided for significant income and expense items recognized in different years for tax and financial reporting purposes. Temporary differences, which give rise to a net deferred tax asset, are as follows: Deferred tax assets: December 31, 2015 September 30, 2015 Tax benefit of net operating loss carry-forward $ 256,000 $ 190,600 Book and tax difference for amortization of intangibles 33,600 35,200 Less: valuation allowance (288,600 ) (225,800 ) Net deferred tax asset $ 0 $ 0 The Company had a federal net operating tax loss carry-forward of approximately $525,000 as of December 31, 2015. The tax loss carry-forwards are available to offset future taxable income with the federal carry-forwards beginning to expire in 2033. At December 31, 2015 the deferred tax valuation allowance increased by $62,800 from September 30, 2015. The realization of the tax benefits is subject to the sufficiency of taxable income in future years. The deferred tax assets represent the amounts expected to be realized before expiration. The Company periodically assesses the likelihood that it will be able to recover its deferred tax assets. The Company considers all available evidence, both positive and negative, including historical levels of income, expectations and risks associated with estimates of future taxable income and ongoing prudent and feasible profits. As of December 31, 2015 and September 30, 2015, the Company established valuation allowances equal to the full amount of the net deferred tax assets due to the uncertainty of the utilization of the operating losses in future periods. During the three months ended December 31, 2015 and 2014, no amounts have been recognized for uncertain tax positions and no amounts have been recognized related to interest or penalties related to uncertain tax positions. The Company has determined that it is not reasonably likely for the amounts of unrecognized tax benefits to significantly increase or decrease within the next twelve months. The Company is currently subject to a three year statute of limitations by major tax jurisdictions.

Summary of Significant Accoun13

Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Dec. 31, 2015
Summary Of Significant Accounting Policies Policies
Basis of presentation	The Company reports revenues and expenses using the accrual method of accounting for financial and tax reporting purposes. These financial statements are presented in United States dollars and have been prepared in accordance with United States generally accepted accounting principles.
Management estimates	The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Revenue recognition	The Company recognizes revenue from sales at the time the products are shipped, the price is determinable, the customers are invoiced and payment is reasonably assured. Invoices are due on a net 30 day basis.Shipping and handling costs are billed to customers and netted against shipping and handling expenses incurred by the Company, which are included in cost of revenues. All of the Company's sales are to Multichip Display, Inc. (MDI), a shareholder of the Company. See Note 4.
Accounts receivable	The Company grants credit, generally without collateral. The Company performs periodic credit evaluations of its customers' financial condition and believes that its customer acceptance, billing and collection policies are adequate to minimize potential credit risk. The Company has not incurred any credit losses to date. The Company provides an allowance for doubtful accounts that is based upon a review of outstanding receivables, historical collection information, and existing economic conditions. The allowance for bad debt is $0 at December 31, 2014 and 2015. Normal accounts receivable past due more than 30 days are considered delinquent. Delinquent receivables are written off based on individual credit evaluation and specific circumstances of the customer. See Note 4.
Inventories	Inventories are carried at the lower of cost (first-in, first-out, FIFO) or market (net realizable value) and include primarily Silicon wafers and displays with drivers. The inventories were purchased from two related parties during the period ended September 30, 2013. At September 30, 2015 and 2014, inventories consisted of parts and supplies. See Notes 4 and 5.
Research and Development Costs	During the three months ended December 31, 2015 and 2014, research and development costs totaled $16,153 and $0.

Related Party Transactions wi14

Related Party Transactions with Multichip Display, Inc. (MDI) (Tables)	3 Months Ended
	Dec. 31, 2015
Related Party Transactions With Multichip Display Inc. Mdi Tables
Schedule of Related Party Transactions	Three Months Ending December 31, 2015 2014 Sales to MDI $ 170,000 $ 125,001 Inventory purchases from MDI* 150,705 2,939 Rent expense paid to MDI - 7,500 Interest expense to MDI 3,471 5,000 Receivable from MDI 115,000 1,055,901 Accounts payable to MDI 112,118 1,036,497 Accrued interest payable to MDI 61,804 58,333 Convertible note payable to MDI, net of discount of $96,590 13,195 250,000 * Includes borrowings to pay for direct labor.

Income Taxes (Tables)

Income Taxes (Tables)	3 Months Ended
	Dec. 31, 2015
Income Taxes Tables
Summary of expected income tax expense (benefit) and the actual tax expense (benefit)	The difference between the expected income tax expense (benefit) and the actual tax expense (benefit) computed by using the Federal statutory rate of 34% is as follows: For the Three Months Ended December 31, 2015 2014 Expected income tax benefit at statutory rate of 34% $ 62,800 $ 36,900 Change in valuation allowance (62,800 ) ( 36,900 ) Income tax expense (benefit) $ 0 $ 0
Summary of Deferred tax assets and liabilities	Deferred tax assets and liabilities are provided for significant income and expense items recognized in different years for tax and financial reporting purposes. Temporary differences, which give rise to a net deferred tax asset, are as follows: Deferred tax assets: December 31, 2015 September 30, 2015 Tax benefit of net operating loss carry-forward $ 256,000 $ 190,600 Book and tax difference for amortization of intangibles 33,600 35,200 Less: valuation allowance (288,600 ) (225,800 ) Net deferred tax asset $ 0 $ 0

Going Concern (Details Narrativ

Going Concern (Details Narrative) - USD ($)	3 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Sep. 30, 2015
Going Concern Details Narrative
Net loss	$ (184,670)	$ (24,632)
Accumulated deficit	$ (849,514)		$ (664,844)

Summary of Significant Accoun17

Summary of Significant Accounting Policies (Details Narrative) - USD ($)	3 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Summary Of Significant Accounting Policies Details Narrative
Allowance for bad debt	$ 0	$ 0
Research and development costs	$ 16,153	$ 0

Related Party Transactions wi18

Related Party Transactions with Multichip Display, Inc. (MDI) (Details) - USD ($)		3 Months Ended
		Dec. 31, 2015	Dec. 31, 2014
Sales [Member]
Related Party Transactions with MDI, Amount		$ 170,000	$ 125,001
Inventory purchases [Member]
Related Party Transactions with MDI, Amount	[1]	$ 150,705	2,939
Rent expense [Member]
Related Party Transactions with MDI, Amount			7,500
Interest expense [Member]
Related Party Transactions with MDI, Amount		$ 3,471	5,000
Receivable [Member]
Related Party Transactions with MDI, Amount		115,000	1,055,901
Accounts payable [Member]
Related Party Transactions with MDI, Amount		112,118	1,036,497
Accrued interest payable [Member]
Related Party Transactions with MDI, Amount		61,804	58,333
Convertible note payable [Member]
Related Party Transactions with MDI, Amount		$ 13,195	$ 250,000
[1]	Includes borrowings to pay for direct labor.

Related Party Transactions wi19

Related Party Transactions with Multichip Display, Inc. (MDI) (Details Narrative) - shares	Dec. 31, 2015	Sep. 30, 2015
Related Party Transactions With Multichip Display Inc. Mdi Details Narrative
Owned by a minority shareholder	2,000,000	2,000,000
Shares of the company	2.70%	2.70%
The total direct and indirect ownership of REAP	8.60%	8.60%

Related Party Transactions wi20

Related Party Transactions with Initial Shareholder Group (Details Narrative) - USD ($)	3 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Sep. 30, 2015
Related Party Transactions With Initial Shareholder Group Details Narrative
Consulting fees payable to officers and shareholder	$ 26,408	$ 16,000
Consulting fees	173,006		$ 176,006
Payable to shareholder (Note 5)	74,110		74,110
Short-term loan payable to officer (Note 5)	$ 33,506		$ 25,901

Share Capital (Details Narrativ

Share Capital (Details Narrative) - $ / shares	Dec. 31, 2015	Sep. 30, 2015
Share Capital Details Narrative
Common stock, par value	$ 0.001	$ .001
Common stock, shares authorized	200,000,000	200,000,000

Income Taxes (Details)

Income Taxes (Details) - USD ($)	3 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Income Taxes Details
Expected income tax benefit at statutory rate of 34%	$ 62,800	$ 36,900
Change in valuation allowance	$ (62,800)	$ (36,900)
Income tax expense (benefit)

Income Taxes (Details 1)

Income Taxes (Details 1) - USD ($)	Dec. 31, 2015	Sep. 30, 2015
Deferred tax assets:
Tax benefit of net operating loss carry-forward	$ 256,000	$ 190,600
Book and tax difference for amortization of intangibles	33,600	35,200
Less: valuation allowance	$ (288,600)	$ (225,800)
Net deferred tax asset

Income Taxes (Details Narrative

Income Taxes (Details Narrative) - USD ($)	3 Months Ended
	Dec. 31, 2015	Sep. 30, 2015
Income Taxes Details Narrative
Federal net operating tax loss carry-forward	$ 525,000
Net operating loss carryforwards, expiration date	2,033
Deferred tax valuation		$ 62,800