ExeLED (ELED) 10-Q 13 Nov 15 2015 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2015	Nov. 06, 2015
Document And Entity Information
Entity Registrant Name	Energie Holdings, Inc.
Entity Central Index Key	774,937
Document Type	10-Q
Document Period End Date	Sep. 30, 2015
Amendment Flag	false
Current Fiscal Year End Date	--12-31
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		100,107,673
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2,015

Balance Sheets (Unaudited)

Balance Sheets (Unaudited) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Current assets:
Cash and cash equivalents	$ 3,427	$ 43,879
Accounts receivable, net	15,250	27,337
Inventory, net	233,422	248,662
Prepaid expenses and other	50,331	68,291
Total current assets	302,430	388,169
Noncurrent assets:
Other assets	112,705	22,611
Total noncurrent assets	112,705	22,611
Total assets	415,135	410,780
Current liabilities:
Accounts payable	2,361,152	2,228,645
Accrued liabilities	916,164	572,973
Debt, current portion, net of discount	4,529,439	2,373,307
Total current liabilities	7,806,755	5,174,925
Debt, long-term portion, net of discount	1,934,710	2,893,214
Total liabilities	$ 9,741,465	$ 8,068,139
Commitments and contingencies (Note 7)
Equity (Deficit):
Preferred stock, $.0001 par value; 5,000,000 shares authorized; no shares issued and outstanding at September 30, 2015 or December 31, 2014
Common stock, $.0001 par value; 250,000,000 shares authorized; 92,684,779 and 53,816,667 shares issued and outstanding at September 30, 2015 and December 31, 2014	$ 9,068	$ 5,182
Additional paid-in capital	2,201,718	1,848,172
Accumulated deficit	(11,537,116)	(9,510,713)
Total deficit	(9,326,330)	(7,657,359)
Total liabilities and equity (deficit)	$ 415,135	$ 410,780

Balance Sheets (Parenthetical)

Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2015	Dec. 31, 2014
Statement of Financial Position [Abstract]
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	250,000,000	250,000,000
Common stock, shares issued	92,685,779	53,816,667
Common stock, shares outstanding	92,685,779	53,816,667
Preferred Stock, Par Value	$ 0.0001	$ 0.0001
Preferred Stock, Shares Authorized	5,000,000	5,000,000
Preferred Stock, Shares Issued	0	0
Preferred Stock, Shares Outstanding	0	0

Statements of Operations (Unaud

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 revenue	$ 117,002	$ 248,549	$ 421,636	$ 587,920
Cost of goods sold	(66,767)	(135,509)	(212,759)	(313,532)
Gross profit	50,235	113,040	208,877	274,388
Operating expenses:
Research and development	64,715	69,841	192,087	184,608
Sales and marketing	28,882	55,521	98,784	126,667
General and administrative	275,301	601,379	1,060,021	1,526,374
Total operating expenses	368,898	726,741	1,350,892	1,837,649
Loss from operations	(318,663)	(613,701)	(1,142,015)	(1,563,261)
Other income (expense):
Interest expense	(365,861)	(104,429)	(856,817)	(284,406)
Other	(10,041)	42,437	(27,571)	126,735
Other income (expense), net	(375,902)	(61,992)	(884,388)	(157,671)
Net loss	$ (694,565)	$ (675,693)	$ (2,026,403)	$ (1,720,932)
Net loss per common share (Note 9): Basic and diluted	$ (0.01)	$ (0.01)	$ (0.03)	$ (0.04)
Weighted average common shares outstanding: Basic and diluted	89,992,553	51,587,729	64,985,322	38,755,604

Statements of Cash Flows (Unaud

Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Operating Activities:
Net loss	$ (2,026,403)	$ (1,720,932)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		$ 166,662
Amortization of debt issuance costs	$ 60,254
Amortization of debt discount	72,310
Common stock issued for services	$ 40,400
Expense converted to debt		$ 284,406
Changes in operating assets and liabilities (net of Share Exchange):
Accounts receivable	$ 12,087	(5,969)
Inventory	15,240	(21,477)
Prepaid expenses and other	17,310	1,053
Accounts payable	785,683	1,087,974
Accrued liabilities	400,156	(387)
Net cash used in operating activities	$ (622,963)	(165,716)
Investing Activities:
Intangible assets		$ (25,097)
Property and equipment
Net cash used in investing activities		$ (25,097)
Financing Activities:
Proceeds from debt	$ 1,287,112	$ 307,777
Payments of debt	$ (704,601)
Member activity		$ (136,534)
Net cash provided by financing activities	$ 582,511	171,243
Net change in cash	(40,452)	(19,570)
Cash, beginning of period	43,879	37,874
Cash, end of period	3,427	$ 18,304
Cash paid for:
Interest	279,060
Debt converted to common stock	95,395
Accounts payable converted to debt	653,176
Accrued liabilities converted to debt	53,053
Debt issuance costs	$ 149,698

1. Description of Business and

1. Description of Business and Summary of Significant Accounting Policies	9 Months Ended
	Sep. 30, 2015
Accounting Policies [Abstract]
1. Description of Business and Summary of Significant Accounting Policies	Note 1 — Description of Business and Summary of Significant Accounting Policies Formation of the Company On December 31, 2013, Energie Holdings, Inc. (“we,” “us,” “our,” the “Company” or “Holdings”) entered into a Share Exchange Agreement (the “Share Exchange Agreement”) with OELC, LLC, a Delaware limited liability company, and its wholly-owned subsidiary, Energie LLC (hereinafter referred to as, “Energie”). The Share Exchange Agreement was not effective until July 2, 2014, due to a variety of conditions subsequent that needed to be met which were met or waived. Upon effectiveness, Holdings issued 33,000,000 “restricted” shares of its common stock, representing approximately 65% of the then issued and outstanding voting securities, in exchange for all of the issued and outstanding member interests of Energie. This transaction is considered to be a capital transaction, rather than a business combination, equivalent to the issuance of ownership interests by Energie for the net assets of Holdings, accompanied by a recapitalization (the “Share Exchange”). The accounting is identical to that resulting from a reverse acquisition, except that no goodwill or other intangible is recorded. Thereafter, on January 27, 2014, Holdings entered into an Agreement and Plan of Merger (the “Merger Agreement”) with two of its then wholly owned subsidiaries, Energie Holdings and Alas Acquisition Company (“Alas”). The Merger Agreement effectively merged Alas with and into Holdings, with Holdings being the surviving corporation. The net effect of the Merger Agreement was to effectuate a name change from Alas Aviation Corp., to Energie Holdings, Inc. in order to provide a better understanding to investors of the Company’s entry into the LED lighting industry. The Company’s management also changed. Description of Business We are focused on acquiring and growing specialized LED lighting companies for the architecture and interior design markets for both commercial and residential applications. The lighting products include both conventional fixtures and advanced solid-state technology that can integrate with digital controls and day-lighting to create energy efficiencies and a better visual environment. Our objective is to grow, innovate, and fully capture the rapidly growing lighting market opportunities associated with solid state lighting. Énergie was founded in 2001 and is engaged in the import and sale of specialized interior lighting solutions to the architecture and interior design markets in North America. Our headquarters is located in Wheat Ridge, Colorado, and we also maintain a production and assembly facility in Zeeland, Michigan. Basis of Presentation As a result of the Share Exchange, Energie is considered to be the “accounting acquirer” and, accordingly, is treated as the predecessor company. The condensed consolidated financial statements include the results of operations and financial position of Energie for all periods, and the results of operations and financial position of Holdings as of and for the three and nine months ended September 30, 2015 and as of December 31, 2014. The accompanying condensed consolidated balance sheet as of December 31, 2014, has been derived from audited financial statements. The accompanying unaudited interim condensed consolidated financial statements have been prepared on the same basis as the annual audited financial statements and in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial statements. In the opinion of management, such unaudited information includes all adjustments (consisting only of normal recurring accruals) necessary for a fair presentation of this interim information. All intercompany transactions have been eliminated in consolidation. Operating results and cash flows for interim periods are not necessarily indicative of results that can be expected for the entire year. The information included in this report should be read in conjunction with our audited financial statements and notes thereto included in our Annual Report on Form 10-K for the period ended December 31, 2014. Going Concern As shown in the accompanying financial statements, we had an equity deficit of $9,326,330 and a working capital deficit of $7,504,325 as of September 30, 2015, and have reported net losses of $2,026,403 and $1,720,932 for the nine months ended September 30, 2015 and 2014, respectively. These factors raise substantial doubt regarding our ability to continue as a going concern. Our ability to continue as a going concern is dependent on our ability to further implement our business plan, attract additional capital and, ultimately, upon our ability to develop future profitable operations. We intend to fund our business development, acquisition endeavors and operations through equity and debt financing arrangements. However, there can be no assurance that these arrangements will be sufficient to fund our ongoing capital expenditures, working capital, and other cash requirements. The outcome of these matters cannot be predicted at this time. These matters raise substantial doubt about our ability to continue as a going concern. The condensed consolidated financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern. Reclassifications Certain prior year amounts have been reclassified to conform with the current year presentation. Recently Issued Accounting Pronouncements In July 2015, the FASB issued ASU No. 2015-11 (ASU 2015-11), Inventory (Topic 330): Simplifying the Measurement of Inventory. In July 2015, the FASB issued ASU No. 2015-12 (ASU 2015-12), Plan Accounting: Defined Benefit Pension Plans (Topic 960), Defined Contribution Pension Plans (Topic 962), Health and Welfare Benefit Plans (Topic 965): (Part I) Fully Benefit-Responsive Investment Contracts, (Part II) Plan Investment Disclosures, (Part III) Measurement Date Practical Expedient (consensuses of the FASB Emerging Issues Task Force) Practical Expedient for the Measurement Date of an Employer’s Defined Benefit Obligation and Plan Assets In August 2015, the FASB issued ASU No. 2015-13 (ASU 2015-13), Derivatives and Hedging (Topic 815): Application of the Normal Purchases and Normal Sales Scope Exception to Certain Electricity Contracts within Nodal Energy Markets (a consensus of the FASB Emerging Issues Task Force) In August 2015, the FASB issued ASU No. 2015-14 (ASU 2015-14), Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date Revenue from Contracts with Customers In August 2015, the FASB issued ASU No. 2015-15 (ASU 2015-15), Interest—Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements—Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting (SEC Update) In September 2015, the FASB issued ASU No. 2015-16 (ASU 2015-16), Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments

2. Recapitalization

2. Recapitalization	9 Months Ended
	Sep. 30, 2015
Business Combinations [Abstract]
2. Recapitalization	Note 2 — Recapitalization On July 2, 2014, we completed the Share Exchange Agreement with Energie. The impact to equity of the Share Exchange includes a) the issuance of 33,000,000 shares of Holdings’ common stock valued at $0.05 per share, the closing price of Holdings’ common stock on December 31, 2013, the date of the Share Exchange Agreement, for total consideration effectively transferred of $1,650,000; and b) removing Holdings’ accumulated deficit and adjusting equity for the recapitalization. The accompanying condensed consolidated statements of operations include the results of the Share Exchange Agreement from the share exchange date of July 2, 2014. The pro forma effects of the acquisition on the results of operations as if the transaction had been completed on January 1, 2014, are as follows: Nine months ended September 30, 2014 Pro forma results: Total net revenues $ 587,920 Net loss (1,994,849 ) Net loss per common share: Basic and diluted $ (0.04 ) The assets and liabilities of Holdings on the effective date of the Share Exchange Agreement were as follows: Accounts payable $ 363,676 Preferred stock $ — Common stock 194,604 Additional paid-in capital 91,046,859 Accumulated deficit (91,605,139 ) Total stockholders’ deficit $ (363,676 )

3. Accounts receivable

3. Accounts receivable	9 Months Ended
	Sep. 30, 2015
Receivables [Abstract]
3. Accounts receivable	Note 3 — Accounts receivable The following is a summary of accounts receivable: September 30, 2015 December 31, 2014 Customer receivables $ 28,130 $ 41,234 Less: Allowance for uncollectible accounts (12,880 ) (13,897 ) $ 15,250 $ 27,337

4. Inventory

4. Inventory	9 Months Ended
	Sep. 30, 2015
Inventory Disclosure [Abstract]
4. Inventory	Note 4 — Inventory The following is a summary of inventory: September 30, 2015 December 31, 2014 Raw materials $ 347,103 $ 420,424 Less: reserve (113,681 ) (171,762 ) $ 233,422 $ 248,662

5. Other assets

5. Other assets	9 Months Ended
	Sep. 30, 2015
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
5. Other assets	Note 5 — Other assets The following is a summary of other assets: September 30, 2015 December 31, 2014 Debt issuance costs $ 100,360 $ 10,916 Deposits 12,345 11,695 $ 112,705 $ 22,611

6. Debt

6. Debt	9 Months Ended
	Sep. 30, 2015
Debt Disclosure [Abstract]
6. Debt	Note 6 — Debt Debt is comprised of the following: Description Note September 30, 2015 December 31, 2014 Line of credit A $ 47,000 $ 47,000 Note payable to distribution partner B 550,000 580,000 Investor debt C 267,787 267,787 Related party debt D 5,340,709 3,840,749 Other notes payable E 68,952 57,692 Cash draw notes F 146,432 255,793 Convertible promissory notes G 188,684 217,500 Total 6,609,564 5,266,521 Less: unamortized discount (145,415 ) — Debt, net of unamortized discount 6,464,149 5,266,521 Less: current portion, net of unamortized discount (4,529,439 ) (2,373,307 ) Debt, long-term portion $ 1,934,710 $ 2,893,214 A – Line of Credit B Note payable to distribution partner C Investor Debt – September 30, 2015 December 31, 2014 Interest Rate $ 87,787 $ 87,787 24 % 50,000 50,000 24 % 50,000 50,000 24 % 25,000 25,000 8 % 25,000 25,000 8 % 20,000 20,000 2 % 10,000 10,000 24 % $ 267,787 $ 267,787 D Related Parties Debt – September 30, 2015 December 31, 2014 Interest Rate D1 $ 3,850,465 $ 3,152,231 6 % D2 527,380 497,130 12 % D3 34,888 34,888 12 % D4 274,800 156,500 24 % D5 653,176 — 18 % Total $ 5,340,709 $ 3,840,749 D1 We evaluated the agreements for derivatives and determined that they do not qualify for derivative treatment for financial reporting purposes, because the agreements relate to our own equity, and the debt and the equity are not closely related. We also determined this does not qualify as a beneficial conversion feature. D2 D3 D4 D5 E Other Notes Payable – F – Cash draw agreements G Convertible promissory notes – Debt issuance costs of $100,360 are included in Other assets as of September 30, 2015, and are being amortized over the life of the respective notes.

7. Contingencies

7. Contingencies	9 Months Ended
	Sep. 30, 2015
Commitments and Contingencies Disclosure [Abstract]
7. Contingencies	Note 7 — Contingencies Current management discovered that the Company’s former management recorded various obligations to itself and to third parties for expenditures not deemed benefitting the Company or authorized by the Company’s sole director, as required. The amount of these unauthorized expenditures totaled $91,172, including $60,000 in management fees. These expenditures were reversed and are not part of the accompanying financial statements. While current management believes that none of the $91,172 is an obligation of ours, it is not known what representations were made to these parties or whether we could, in fact, be eventually responsible to pay some or all of the indicated amount.

8. Subsequent Events

8. Subsequent Events	9 Months Ended
	Sep. 30, 2015
Subsequent Events [Abstract]
8. Subsequent Events	Note 8 — Subsequent Events On October 1, 2015, one of the convertible debt holders converted $2,771 in exchange for 1,365,014 shares of our common stock. On October 15, 2015, one of the convertible debt holders converted $7,086 in exchange for 3,054,275 shares of our common stock. On November 2, 2015, one of the convertible debt holders converted $6,097 in exchange for 3,003,605 shares of our common stock.

9. Net Loss Per Share

9. Net Loss Per Share	9 Months Ended
	Sep. 30, 2015
Earnings Per Share [Abstract]
9. Net Loss Per Share	Note 9 — Net Loss Per Share Basic net loss per share is computed by dividing net income by the weighted-average number of common shares outstanding during the reporting period. Diluted net loss per share is computed similarly to basic net loss per share, except that it includes the potential dilution that could occur if dilutive securities are exercised. Since Energie, the “predecessor company,” was an LLC, it did not have common shares outstanding prior to the Share Exchange on July 2, 2014. Accordingly, we have prepared the calculation of Net Loss per Share using the weighted-average number of common shares of Holdings that were outstanding during the three and nine months ended September 30, 2015. The following table presents a reconciliation of the denominators used in the computation of net loss per share – basic and diluted: Three months ended September 30, Nine months ended September 30, 2015 2014 2015 2014 Net loss $ (694,565 ) $ (675,693 ) $ (2,026,403 ) $ (1,720,932 ) Weighted average outstanding shares of common stock 89,992,553 51,587,729 64,985,322 38,755,604 Dilutive effect of stock options and warrants — — — — Common stock and equivalents 89,992,553 51,587,729 64,985,322 38,755,604 Net loss per share – Basic and diluted $ (0.01 ) $ (0.01 ) $ (0.03 ) $ (0.04 )

1. Description of Business an15

1. Description of Business and Summary of Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2015
Accounting Policies [Abstract]
Formation of the Company	Formation of the Company On December 31, 2013, Energie Holdings, Inc. (“we,” “us,” “our,” the “Company” or “Holdings”) entered into a Share Exchange Agreement (the “Share Exchange Agreement”) with OELC, LLC, a Delaware limited liability company, and its wholly-owned subsidiary, Energie LLC (hereinafter referred to as, “Energie”). The Share Exchange Agreement was not effective until July 2, 2014, due to a variety of conditions subsequent that needed to be met which were met or waived. Upon effectiveness, Holdings issued 33,000,000 “restricted” shares of its common stock, representing approximately 65% of the then issued and outstanding voting securities, in exchange for all of the issued and outstanding member interests of Energie. This transaction is considered to be a capital transaction, rather than a business combination, equivalent to the issuance of ownership interests by Energie for the net assets of Holdings, accompanied by a recapitalization (the “Share Exchange”). The accounting is identical to that resulting from a reverse acquisition, except that no goodwill or other intangible is recorded. Thereafter, on January 27, 2014, Holdings entered into an Agreement and Plan of Merger (the “Merger Agreement”) with two of its then wholly owned subsidiaries, Energie Holdings and Alas Acquisition Company (“Alas”). The Merger Agreement effectively merged Alas with and into Holdings, with Holdings being the surviving corporation. The net effect of the Merger Agreement was to effectuate a name change from Alas Aviation Corp., to Energie Holdings, Inc. in order to provide a better understanding to investors of the Company’s entry into the LED lighting industry. The Company’s management also changed.
Description of Business	Description of Business We are focused on acquiring and growing specialized LED lighting companies for the architecture and interior design markets for both commercial and residential applications. The lighting products include both conventional fixtures and advanced solid-state technology that can integrate with digital controls and day-lighting to create energy efficiencies and a better visual environment. Our objective is to grow, innovate, and fully capture the rapidly growing lighting market opportunities associated with solid state lighting. Énergie was founded in 2001 and is engaged in the import and sale of specialized interior lighting solutions to the architecture and interior design markets in North America. Our headquarters is located in Wheat Ridge, Colorado, and we also maintain a production and assembly facility in Zeeland, Michigan.
Basis of Presentation	Basis of Presentation As a result of the Share Exchange, Energie is considered to be the “accounting acquirer” and, accordingly, is treated as the predecessor company. The condensed consolidated financial statements include the results of operations and financial position of Energie for all periods, and the results of operations and financial position of Holdings as of and for the three and nine months ended September 30, 2015 and as of December 31, 2014. The accompanying condensed consolidated balance sheet as of December 31, 2014, has been derived from audited financial statements. The accompanying unaudited interim condensed consolidated financial statements have been prepared on the same basis as the annual audited financial statements and in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial statements. In the opinion of management, such unaudited information includes all adjustments (consisting only of normal recurring accruals) necessary for a fair presentation of this interim information. All intercompany transactions have been eliminated in consolidation. Operating results and cash flows for interim periods are not necessarily indicative of results that can be expected for the entire year. The information included in this report should be read in conjunction with our audited financial statements and notes thereto included in our Annual Report on Form 10-K for the period ended December 31, 2014.
Going Concern	Going Concern As shown in the accompanying financial statements, we had an equity deficit of $9,326,330 and a working capital deficit of $7,504,325 as of September 30, 2015, and have reported net losses of $2,026,403 and $1,720,932 for the nine months ended September 30, 2015 and 2014, respectively. These factors raise substantial doubt regarding our ability to continue as a going concern. Our ability to continue as a going concern is dependent on our ability to further implement our business plan, attract additional capital and, ultimately, upon our ability to develop future profitable operations. We intend to fund our business development, acquisition endeavors and operations through equity and debt financing arrangements. However, there can be no assurance that these arrangements will be sufficient to fund our ongoing capital expenditures, working capital, and other cash requirements. The outcome of these matters cannot be predicted at this time. These matters raise substantial doubt about our ability to continue as a going concern. The condensed consolidated financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.
Reclassifications	Reclassifications Certain prior year amounts have been reclassified to conform with the current year presentation.
Recently Issued Accounting Pronouncements	Recently Issued Accounting Pronouncements In July 2015, the FASB issued ASU No. 2015-11 (ASU 2015-11), Inventory (Topic 330): Simplifying the Measurement of Inventory. In July 2015, the FASB issued ASU No. 2015-12 (ASU 2015-12), Plan Accounting: Defined Benefit Pension Plans (Topic 960), Defined Contribution Pension Plans (Topic 962), Health and Welfare Benefit Plans (Topic 965): (Part I) Fully Benefit-Responsive Investment Contracts, (Part II) Plan Investment Disclosures, (Part III) Measurement Date Practical Expedient (consensuses of the FASB Emerging Issues Task Force) Practical Expedient for the Measurement Date of an Employer’s Defined Benefit Obligation and Plan Assets In August 2015, the FASB issued ASU No. 2015-13 (ASU 2015-13), Derivatives and Hedging (Topic 815): Application of the Normal Purchases and Normal Sales Scope Exception to Certain Electricity Contracts within Nodal Energy Markets (a consensus of the FASB Emerging Issues Task Force) In August 2015, the FASB issued ASU No. 2015-14 (ASU 2015-14), Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date Revenue from Contracts with Customers In August 2015, the FASB issued ASU No. 2015-15 (ASU 2015-15), Interest—Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements—Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting (SEC Update) In September 2015, the FASB issued ASU No. 2015-16 (ASU 2015-16), Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments

2. Recapitalization (Tables)

2. Recapitalization (Tables)	9 Months Ended
	Sep. 30, 2015
Business Combinations [Abstract]
Effects of Acquisition	Nine months ended September 30, 2014 Pro forma results: Total net revenues $ 587,920 Net loss (1,994,849 ) Net loss per common share: $ (0.04 ) Basic and diluted The assets and liabilities of Holdings on the effective date of the Share Exchange Agreement were as follows: Accounts payable $ 363,676 Preferred stock $ — Common stock 194,604 Additional paid-in capital 91,046,859 Accumulated deficit (91,605,139 ) Total stockholders’ deficit $ (363,676 )

3. Accounts receivable (Tables)

3. Accounts receivable (Tables)	9 Months Ended
	Sep. 30, 2015
Receivables [Abstract]
Accounts Receivable	September 30, 2015 December 31, 2014 Customer receivables $ 28,130 $ 41,234 Less: Allowance for uncollectible accounts (12,880 ) (13,897 ) $ 15,250 $ 27,337

4. Inventory (Tables)

4. Inventory (Tables)	9 Months Ended
	Sep. 30, 2015
Inventory Disclosure [Abstract]
Inventory	September 30, 2015 December 31, 2014 Raw materials $ 347,103 $ 420,424 Less: reserve (113,681 ) (171,762 ) $ 233,422 $ 248,662

5. Other assets (Tables)

5. Other assets (Tables)	9 Months Ended
	Sep. 30, 2015
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Other Assets	September 30, 2015 December 31, 2014 Debt issuance costs $ 100,360 $ 10,916 Deposits 12,345 11,695 $ 112,705 $ 22,611

6. Debt (Tables)

6. Debt (Tables)	9 Months Ended
	Sep. 30, 2015
Debt Disclosure [Abstract]
Debt	Description Note September 30, 2015 December 31, 2014 Line of credit A $ 47,000 $ 47,000 Note payable to distribution partner B 550,000 580,000 Investor debt C 267,787 267,787 Related party debt D 5,340,709 3,840,749 Other notes payable E 68,952 57,692 Cash draw notes F 146,432 255,793 Convertible promissory notes G 188,684 217,500 Total 6,609,564 5,266,521 Less: unamortized discount (145,415 ) — Debt, net of unamortized discount 6,464,149 5,266,521 Less: current portion, net of unamortized discount (4,529,439 ) (2,373,307 ) Debt, long-term portion $ 1,934,710 $ 2,893,214
Investor Debt	September 30, 2015 December 31, 2014 Interest Rate $ 87,787 $ 87,787 24 % 50,000 50,000 24 % 50,000 50,000 24 % 25,000 25,000 8 % 25,000 25,000 8 % 20,000 20,000 2 % 10,000 10,000 24 % $ 267,787 $ 267,787
Related Parties Debt	September 30, 2015 December 31, 2014 Interest Rate D1 $ 3,850,465 $ 3,152,231 6 % D2 527,380 497,130 12 % D3 34,888 34,888 12 % D4 274,800 156,500 24 % D5 653,176 — 18 % Total $ 5,340,709 $ 3,840,749

9. Net Loss Per Share (Tables)

9. Net Loss Per Share (Tables)	9 Months Ended
	Sep. 30, 2015
Earnings Per Share [Abstract]
Net Loss Per Share	Three months ended September 30, Nine months ended September 30, 2015 2014 2015 2014 Net loss $ (694,565 ) $ (675,693 ) $ (2,026,403 ) $ (1,720,932 ) Weighted average outstanding shares of common stock 89,992,553 51,587,729 64,985,322 38,755,604 Dilutive effect of stock options and warrants — — — — Common stock and equivalents 89,992,553 51,587,729 64,985,322 38,755,604 Net loss per share – Basic and diluted $ (0.01 ) $ (0.01 ) $ (0.03 ) $ (0.04 )

1. Description of Business an22

1. Description of Business and Summary of Significant Accounting Policies (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, 2013	Dec. 31, 2014
Accounting Policies [Abstract]
Restricted Shares Issued in Share Exchange Agreement					33,000,000
Ownership Represented					65.00%
Equity Deficit	$ (9,326,330)		$ (9,326,330)			$ (7,657,359)
Working Capital Deficit	(7,504,325)		(7,504,325)
Net Income Loss	$ (694,565)	$ (675,693)	$ (2,026,403)	$ (1,720,932)

2. Recapitalization - Effects o

2. Recapitalization - Effects of Acquisition (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Net loss	$ (694,565)	$ (675,693)	$ (2,026,403)	$ (1,720,932)
Net loss per common share - Basic and diluted	$ (0.01)	$ (0.01)	$ (0.03)	$ (0.04)
Accounts payable	$ 2,361,152		$ 2,361,152		$ 2,228,645
Preferred stock
Common stock	$ 9,068		$ 9,068		$ 5,182
Additional paid-in capital	2,201,718		2,201,718		1,848,172
Accumulated deficit	(11,537,116)		(11,537,116)		(9,510,713)
Total stockholders deficit	(9,326,330)		(9,326,330)		$ (7,657,359)
Acquisition-related Costs [Member]
Total net revenues			587,920
Net loss			$ (1,994,849)
Net loss per common share - Basic and diluted			$ (0.04)
Accounts payable	$ 363,676		$ 363,676
Preferred stock
Common stock	$ 194,604		$ 194,604
Additional paid-in capital	91,046,859		91,046,859
Accumulated deficit	(91,605,139)		(91,605,139)
Total stockholders deficit	$ (363,676)		$ (363,676)

2. Recapitalization (Details Na

2. Recapitalization (Details Narrative)	12 Months Ended
	Dec. 31, 2014USD ($)$ / sharesshares
Accounting Policies [Abstract]
Stock Issued in Share Exchange, Shares | shares	33,000,000
Stock Issued in Share Exchange, Price Per Share | $ / shares	$ 0.05
Stock Issued in Share Exchange, Consideration Received	$ 1,650,000

3. Accounts receivable - Accoun

3. Accounts receivable - Accounts Receivable (Details) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Receivables [Abstract]
Customer receivables	$ 28,130	$ 41,234
Less: Allowance for uncollectible accounts	(12,880)	(13,897)
Receivables, Net	$ 15,250	$ 27,337

4. Inventory - Inventory (Detai

4. Inventory - Inventory (Details) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Inventory Disclosure [Abstract]
Raw materials	$ 347,103	$ 420,424
Less: Reserve	(113,681)	(171,762)
Inventory, Net	$ 233,422	$ 248,662

5. Other assets - Other Assets

5. Other assets - Other Assets (Details) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Debt issuance costs	$ 100,360	$ 10,916
Deposits	12,345	11,695
Other Assets	$ 112,705	$ 22,611

6. Debt - Debt (Details)

6. Debt - Debt (Details) - USD ($)		Sep. 30, 2015	Dec. 31, 2014
Debt Disclosure [Abstract]
Line of credit	[1]	$ 47,000	$ 47,000
Note payable to distribution partner	[2]	550,000	580,000
Investor debt	[3]	267,787	267,787
Related party debt	[4]	5,340,709	3,840,749
Other notes payable	[5]	68,952	57,692
Cash draw agreements	[6]	146,432	255,793
Convertible promissory notes	[7]	188,684	217,500
Total		6,609,564	$ 5,266,521
Less: unamortized discount		(145,415)
Debt, net of unamortized discount		6,464,149	$ 5,266,521
Less: current portion		(4,529,439)	(2,373,307)
Debt, long-term portion		$ 1,934,710	$ 2,893,214
[1]	A - Line of Credit - We utilized this entire bank line of credit for working capital purposes. The outstanding obligation is due on demand, has a stated initial interest rate of 10.5% that is subject to adjustment, and is guaranteed by our majority shareholder/CEO. Energie and our CEO were served with a summons and complaint, wherein the bank brought an action to collect the amount due, including interest, costs and attorney's fees. We have filed a response to the complaint and are engaged in settlement discussions with the bank. Accordingly, the amounts due are classified as current liabilities in the accompanying condensed, consolidated balance sheets.
[2]	B - Note payable to distribution partner - Note payable to a significant European distribution partner, entered into in October 2014, bearing interest at 5% payable quarterly, with principal payable monthly through September 2019. The 2014 note payable aggregated the 2007 promissory note, accrued interest and accounts payable.
[3]	C - Investor Debt - Notes payable to lenders having an ownership interest in Holdings at September 30, 2015 and December 31, 2014. These loans are not collateralized. The following summarizes the terms and balances of the investor debt:
[4]	D - Related Parties Debt - The following summarizes notes payable to related parties:
[5]	E - Other Notes Payable - Represents the outstanding principal balance on two separate notes bearing interest at approximately 12% annually. In the event we receive proceeds as the beneficiary of a life insurance policy covering our majority shareholder/CEO, repayment of principal and interest is due on these notes prior to using the proceeds for any other purpose.
[6]	F - Cash draw agreements - Under these agreements, the lender advances us the principal balance and then automatically withdraws a stated amount each business day. Accordingly, there is no stated interest rate. The total remaining daily payments due under these arrangements was $194,170 as of September 30, 2015. The maturity dates of the agreements range from October 2015 to February 2016.
[7]	G - Convertible promissory notes - Represents the outstanding principal balance on two separate convertible promissory notes payable to an entity with interest of 8% annually, due in August 2016. During the third quarter of 2015, the current holder of the notes purchased all of our similar outstanding convertible notes from another entity and consolidated those notes into two new notes. At the option of the holder, the notes may be settled in cash or converted into shares of our common stock at any time beginning 180 days from the date of the notes at a price equal to 61% of the average closing bid price of our common stock during the 10 trading days immediately preceding the date of conversion. In the event we fail to pay the notes when they become due, the balance due under the notes incurs interest at the rate of 22% per annum. The notes contain additional terms and conditions normally included in instruments of this kind, including a right of first refusal wherein we have granted the holders the right to match the terms of any future financing in which we engage on the same terms and contemplated in such future financing. We estimate that the fair value of the conversion feature is minimal, so no value has been assigned to the beneficial conversion feature. During the nine months ended September 30, 2015, $95,395 of principal and $3,912 of interest was converted into 34,768,112 shares of common stock.

6. Debt - Investor Debt (Detail

6. Debt - Investor Debt (Details) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Investor Debt Balances	$ 6,609,564	$ 5,266,521
Investor 1
Investor Debt Balances	$ 87,787	87,787
Investor Debt, Interest Rate	24.00%
Investor 2
Investor Debt Balances	$ 50,000	50,000
Investor Debt, Interest Rate	24.00%
Investor 3
Investor Debt Balances	$ 50,000	50,000
Investor Debt, Interest Rate	24.00%
Investor 4
Investor Debt Balances	$ 25,000	25,000
Investor Debt, Interest Rate	8.00%
Investor 5
Investor Debt Balances	$ 25,000	25,000
Investor Debt, Interest Rate	8.00%
Investor 6
Investor Debt Balances	$ 20,000	20,000
Investor Debt, Interest Rate	2.00%
Investor 7
Investor Debt Balances	$ 10,000	10,000
Investor Debt, Interest Rate	24.00%
Investor Debt Total
Investor Debt Balances	$ 267,787	$ 267,787

6. Debt - Related Parties Debt

6. Debt - Related Parties Debt (Details) - USD ($)		9 Months Ended
		Sep. 30, 2015	Dec. 31, 2014
D1
Related Party Debt	[1]	$ 3,850,465	$ 3,152,231
Related Party Debt, Interest Rate		6.00%
D2
Related Party Debt	[2]	$ 527,380	497,130
Related Party Debt, Interest Rate		12.00%
D3
Related Party Debt	[3]	$ 34,888	34,888
Related Party Debt, Interest Rate		12.00%
D4
Related Party Debt	[4]	$ 274,800	$ 156,500
Related Party Debt, Interest Rate		24.00%
D5
Related Party Debt	[5]	$ 653,176
Related Party Debt, Interest Rate		18.00%
Related Parties Debt Total
Related Party Debt		$ 5,340,709	$ 3,840,749
[1]	D1 - Notes payable to Symbiote, Inc. ("Symbiote"), entered into from December 2014 through August 2015, with monthly principal and interest payable through November 2017. The 2014 notes aggregated previous notes payable, accrued interest and accounts payable. Neither the 2014 nor the 2015 notes are convertible. The previous note agreement gave Symbiote, at its option at any time after default, the right to convert any remaining balance of the notes to equity at a rate equal to the proportion of the remaining balance of the note divided by $4,000,000 enterprise value. Symbiote holds a large ownership percentage in Holdings, is the lessor of our manufacturing facility, and the provider of our payroll services. We evaluated the agreements for derivatives and determined that they do not qualify for derivative treatment for financial reporting purposes, because the agreements relate to our own equity, and the debt and the equity are not closely related. We also determined this does not qualify as a beneficial conversion feature.
[2]	D2 - Notes payable to an executive vice president, entered into from December 2014 through July 2015, with monthly principal and interest payable through November 2017. The 2014 note aggregated previous notes payable, accrued interest and accounts payable.
[3]	D3 - Note payable to our Chief Executive Officer ("CEO"), entered into in December 2014, with monthly principal and interest payable through November 2015.
[4]	D4 - Notes payable to the spouse of our CEO, due upon demand.
[5]	D5 - Notes payable to the consulting firm that employs our Chief Financial Officer, entered into in June 2015. These notes aggregate the previous accounts payable and accrued interest due to the consulting firm. If we have not paid $300,000 by December 31, 2015, then beginning January 1, 2016, the notes are convertible into shares of our common stock at a conversion rate of 75% of the volume weighted average market price of our stock over the 20 days preceding the notification of conversion. We determined that this conversion feature does not meet the requirements to be treated as a derivative; however, we did determine it was a beneficial conversion feature. Accordingly, we recorded a debt discount of $217,725, which is being amortized through interest expense over the life of the notes.

7. Contingencies (Details Narra

7. Contingencies (Details Narrative)	Sep. 30, 2015USD ($)
Unauthorized Expenditures
Unauthorized Expenditures	$ 91,172
Unauthorized Management Fees
Unauthorized Expenditures	$ 60,000

8. Subsequent Events (Details N

8. Subsequent Events (Details Narrative) - USD ($)	Nov. 02, 2015	Oct. 15, 2015	Oct. 01, 2015
Subsequent Events [Abstract]
Debt Converted	$ 6,097	$ 7,086	$ 2,771
Debt Converted, Shares Issued Upon Conversion	3,003,605	3,054,275	1,365,014

9. Net Loss Per Share - Net Los

9. Net Loss Per Share - Net 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	$ (694,565)	$ (675,693)	$ (2,026,403)	$ (1,720,932)
Weighted average outstanding shares of common stock	89,992,553	51,587,729	64,985,322	38,755,604
Dilutive effect of stock options and warrants
Common stock and equivalents	$ 89,992,553	$ 51,587,729	$ 64,985,322	$ 38,755,604
Net loss per share - Basic and diluted	$ (0.01)	$ (0.01)	$ (0.03)	$ (0.04)