Enova Systems (ENVS) 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	Oct. 31, 2015
Document And Entity Information
Entity Registrant Name	ENOVA SYSTEMS INC
Entity Central Index Key	922,237
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		64,520,000
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2,015

BALANCE SHEETS

BALANCE SHEETS - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Current assets:
Cash and cash equivalents
Accounts receivable, net
Inventories and supplies, net	$ 112,000	$ 368,000
Prepaid expenses and other current assets		7,000
Total current assets	$ 112,000	$ 375,000
Property and equipment, net
Total assets	$ 112,000	$ 375,000
Current liabilities:
Accounts payable	614,000	560,000
Loans from employees	$ 123,000	55,000
Deferred revenues		213,000
Accrued payroll and related expenses	$ 220,000	211,000
Accrued loss for litigation settlement	2,014,000	2,014,000
Other accrued liabilities	594,000	$ 431,000
Current portion of accrued interest payable	1,543,000
Current portion of notes payable	1,278,000	$ 40,000
Total current liabilities	$ 6,386,000	3,524,000
Accrued interest payable		1,482,000
Notes payable, net of current portion		1,238,000
Total liabilities	$ 6,386,000	6,244,000
Stockholders' deficit:
Common stock to be issued	553,000	553,000
Common Stock — no par value, 750,000,000 shares authorized; 64,520,000 shares issued and outstanding as of September 30, 2015 and December 31, 2014	145,735,000	145,735,000
Additional paid-in capital	9,641,000	9,619,000
Accumulated deficit	(163,297,000)	(162,870,000)
Total stockholders' deficit	(6,274,000)	(5,869,000)
Total liabilities and stockholders' deficit	$ 112,000	$ 375,000
Series A Preferred Stock
Stockholders' deficit:
Preferred Stock: Series A convertible preferred stock — no par value, 30,000,000 shares authorized; 0 shares issued and outstanding; liquidating preference at $0.60 per share as of June 30, 2015 and December 31, 2014, Series B convertible preferred stock — no par value, 5,000,000 shares authorized; 546,000 shares issued and outstanding; liquidating preference at $2 per share as of September 30, 2015 and December 31, 2014
Series B Preferred Stock
Stockholders' deficit:
Preferred Stock: Series A convertible preferred stock — no par value, 30,000,000 shares authorized; 0 shares issued and outstanding; liquidating preference at $0.60 per share as of June 30, 2015 and December 31, 2014, Series B convertible preferred stock — no par value, 5,000,000 shares authorized; 546,000 shares issued and outstanding; liquidating preference at $2 per share as of September 30, 2015 and December 31, 2014		$ 109,400
Series A Preferred Stock
Stockholders' deficit:
Preferred Stock: Series A convertible preferred stock — no par value, 30,000,000 shares authorized; 0 shares issued and outstanding; liquidating preference at $0.60 per share as of June 30, 2015 and December 31, 2014, Series B convertible preferred stock — no par value, 5,000,000 shares authorized; 546,000 shares issued and outstanding; liquidating preference at $2 per share as of September 30, 2015 and December 31, 2014
Series B Preferred Stock
Stockholders' deficit:
Preferred Stock: Series A convertible preferred stock — no par value, 30,000,000 shares authorized; 0 shares issued and outstanding; liquidating preference at $0.60 per share as of June 30, 2015 and December 31, 2014, Series B convertible preferred stock — no par value, 5,000,000 shares authorized; 546,000 shares issued and outstanding; liquidating preference at $2 per share as of September 30, 2015 and December 31, 2014	$ 1,094,000

BALANCE SHEETS (Parenthetical)

BALANCE SHEETS (Parenthetical) - $ / shares	Sep. 30, 2015	Dec. 31, 2014
Stockholders' equity:
Common stock, par value	$ 0	$ 0
Common stock, shares authorized	750,000,000	750,000,000
Common stock, shares issued	64,520,000	44,520,000
Common stock, shares outstanding	64,520,000	44,520,000
Series A Preferred Stock
Stockholders' equity:
Series A convertible preferred stock , par value		$ 0
Series A convertible preferred stock , shares authorized		30,000,000
Series A convertible preferred stock , shares issued		0
Series A convertible preferred stock , shares outstanding		0
Series A convertible preferred stock liquidating preference		$ 0.60
Series B Preferred Stock
Stockholders' equity:
Series A convertible preferred stock , par value		$ 0
Series A convertible preferred stock , shares authorized		5,000,000
Series A convertible preferred stock , shares issued		546,000
Series A convertible preferred stock , shares outstanding		546,000
Series A convertible preferred stock liquidating preference		$ 2
Series A Preferred Stock
Stockholders' equity:
Series A convertible preferred stock , par value	$ 0
Series A convertible preferred stock , shares authorized	30,000,000
Series A convertible preferred stock , shares issued	0
Series A convertible preferred stock , shares outstanding	0
Series A convertible preferred stock liquidating preference	$ 0.6
Series B Preferred Stock
Stockholders' equity:
Series A convertible preferred stock , par value	$ 0
Series A convertible preferred stock , shares authorized	5,000,000
Series A convertible preferred stock , shares issued	546,000
Series A convertible preferred stock , shares outstanding	546,000
Series A convertible preferred stock liquidating preference	$ 2

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]
Revenues
Cost of revenues	$ 109,000		$ 181,000	$ 60,000
Gross loss	(109,000)		(181,000)	(60,000)
Operating expenses
Selling, general & administrative	58,000	$ 87,000	176,000	342,000
Total operating expenses	58,000	87,000	176,000	342,000
Operating loss	(167,000)	(87,000)	(357,000)	(402,000)
Other income and (expense), net
Interest and other income (expense), net	(21,000)	(20,000)	(70,000)	(92,000)
Total other income and (expense), net	(21,000)	(20,000)	(70,000)	(92,000)
Net loss	$ (188,000)	$ (107,000)	$ (427,000)	$ (494,000)
Basic and diluted loss per share	$ 0	$ 0	$ (0.01)	$ (0.01)
Weighted average number of common shares outstanding	64,520,000	64,520,000	64,520,000	58,659,000

STATEMENTS OF CASH FLOWS (Unaud

STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Cash flows from operating activities:
Net loss	$ (427,000)	$ (494,000)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		29,000
Inventory reserve	$ 256,000	59,000
Loss on Asset Impairment	7,000	32,000
Stock option expense	$ 22,000	18,000
(Increase) decrease in operating assets:
Prepaid expenses and other current assets		3,000
Increase (decrease) in operating liabilities:
Accounts payable	$ 54,000	$ (95,000)
Deferred revenue	(213,000)
Accrued payroll and related expense	9,000	$ 14,000
Other accrued liabilities	163,000	132,000
Accrued interest payable	61,000	60,000
Net cash used in operating activities	$ (68,000)	(242,000)
Cash flows from financing activities:
Net proceeds from the issuance of common stock		223,000
Proceeds from related party loans, net	$ 68,000	18,000
Net cash provided by financing activities	$ 68,000	241,000
Net decrease in cash and cash equivalents		(1,000)
Cash and cash equivalents, beginning of period		$ 1,000
Cash and cash equivalents, end of period

Description of the Company and

Description of the Company and its Business	9 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
Description of the Company and its Business	Enova Systems, Inc., (“Enova”, “We” or “the Company”), a California corporation, was incorporated in July 1976, and trades on the OTCQB under the trading symbol “ENVS” and on the London Stock Exchange under the symbol “ENV” or “ENVS”. The Company believes it has been a globally recognized leader as a supplier of efficient, environmentally-friendly digital power components and systems products, in conjunction with associated engineering services. The Company’s core competencies are focused on the commercialization of power management and conversion systems for mobile and stationary applications. THE DISCUSSION SET FORTH BELOW AND ELSEWHERE IN THIS 10-Q IS QUALIFIED IN ITS ENTIRETY BY THE FOLLOWING: ENOVA REMAINS INSOLVENT AND OWES IN EXCESS OF $4.7 MILLION IN THE AGGREGATE TO ITS TWO PRINCIPAL CREDITORS, THE CREDIT MANAGERS ASSOCIATION AND ARENS CONTROLS COMPANY, L.L.C. (“ARENS"). WITHOUT IMMEDIATE ADDITIONAL FINANCING, THE COMPANY WILL NEED TO CEASE OPERATIONS. THE COMPANY CURRENTLY HAS NO VISIBILITY AS TO EITHER ADDITIONAL FINANCING OR THE COLLECTION OF RECEIVABLES. SPECIFICALLY, WITHOUT A MUTUALLY ACCEPTABLE SETTLEMENT OF THE ARENS JUDGMENT ARISING OUT OF ARENS CONTROLS COMPANY, L.L.C. v. ENOVA SYSTEMS, INC., CASE NO. 13-1102 (7TH CIRCUIT) IN THE AMOUNT OF $2.0 MILLION, THE COMPANY DOES NOT CURRENTLY BELIEVE IT HAS ANY ALTERNATIVE OTHER THAN TO CEASE OPERATIONS. THE COMPANY CURRENTLY EMPLOYS ONLY TWO PERSONNEL, JOHN MICEK, THE COMPANY'S CEO, CFO AND SECRETARY, AND ONE ADDITIONAL INDIVIDUAL IN THE FINANCE DEPARTMENT. ON SEPTEMBER 24, 2013, THE COMPANY ENTERED INTO A SETTLEMENT AGREEMENT AND MUTUAL RELEASE WITH ARENS PROVIDING A PERIOD OF 120 DAYS TO SETTLE THE JUDGMENT FOR THE AMOUNT OF $300,000. THE COMPANY WAS NOT ABLE TO MAKE THE PAYMENT BY THE DUE DATE OF JANURY 22, 2014. THEREFORE, THE JUDGMENT AGAINST THE COMPANY CAN BE ENFORCED WITHOUT FURTHER NOTICE.

Summary of Significant Accounti

Summary of Significant Accounting Policies	9 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
Summary of Significant Accounting Policies	Basis of Presentation — Interim Financial Statements The financial position, results of operations and cash flows for the three and nine months ended September 30, 2015 and 2014 is unaudited but includes all adjustments (consisting only of normal recurring adjustments) that the Company considers necessary for a fair statement of its financial position at such dates and the operating results and cash flows for those periods. The year-end balance sheet data was derived from audited financial statements, and certain information and note disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to SEC rules or regulations; however, the Company believes the disclosures made are adequate to make the information presented not misleading. 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. Although management believes these estimates and assumptions are adequate, actual results could differ from the estimates and assumptions used. The results of operations for the interim periods presented are not necessarily indicative of the results of operations to be expected for the year. These interim financial statements should be read in conjunction with the audited financial statements for the year ended December 31, 2014, which are included in the Company’s Annual Report on Form 10-K for the year then ended. Liquidity and Going Concern The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. However, historically the Company has experienced significant recurring net losses and operating cash flow deficits. The Company’s ability to continue as a going concern is dependent on many factors, including among others, its ability to raise additional funding, and its ability to successfully restructure operations. To date, the Company has incurred recurring net losses and negative cash flows from operations. At September 30, 2015, the Company had an accumulated deficit of approximately $163.3 million, working capital of approximately negative $6.3 million and shareholders’ equity deficit of approximately $6.3 million. Until the Company can generate significant cash from its operations, the Company expects to continue to fund its operations with borrowings from employees, proceeds from one or more private placement agreements, or potentially through debt financing or the sale of equity securities. However, the Company may not be successful in obtaining additional funding. In addition, the Company cannot be sure that additional financing will be available when needed or that, if available, financing will be obtained on terms favorable to the Company or its shareholders. Our operations will require us to make necessary investments in human and production resources, regulatory compliance, as well as sales and marketing efforts. We do not currently have adequate internal liquidity to meet these objectives. On June 21, 2012, we reported in a Form 8-K filing that, as part of cost cutting measures in response to our decrease in revenue amid continued delays in industry adoption of EV technology resulting from ongoing battery cost and reliability concerns, in excess of 90% of our workforce left our Company, including the resignation of members of our senior management. We continue to evaluate strategic partnering opportunities and other external sources of liquidity, including the public and private financial markets and strategic partners. As a result of having insufficient funds, the Company has delayed all of its product development. Failure to obtain adequate financing also will adversely affect the Company’s ability to continue in business. If the Company raises additional funds by issuing equity securities, substantial dilution to existing stockholders would likely result. If the Company raises additional funds by incurring debt financing, the terms of the debt may involve significant cash payment obligations, as well as covenants and specific financial ratios that may restrict its ability to operate its business. The Company continues to pursue other options to raise additional capital to fund its operations; however, there can be no assurance that we can successfully raise additional funds through the capital markets. As of September 30, 2015, the Company had no cash and cash equivalents and received loans from an employee in order to maintain minimal operations. We do not anticipate that our remaining assets will be sufficient to meet projected operating requirements through the end of 2015 to continue operations and market trading. Significant Accounting Policies The accounting and reporting policies of the Company conform to US GAAP. There have been no significant changes in the Company's significant accounting policies during the nine months ended September 30, 2015 compared to what was previously disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2014. Revenue Recognition The Company business is the manufacture of proprietary products and other products based on design specifications provided by its customers. The Company recognizes revenue only when all of the following criteria have been met: • Persuasive Evidence of an Arrangement — • Delivery Has Occurred or Services Have Been Rendered — • The Fee for the Arrangement is Fixed or Determinable — • Collectability is Reasonably Assured — The Company recognizes revenue from milestone payments over the remaining minimum period of performance obligations. The Company also recognizes engineering and construction contract revenues using the percentage-of-completion method, based primarily on contract costs incurred to date compared with total estimated contract costs. Customer-furnished materials, labor, and equipment, and in certain cases subcontractor materials, labor, and equipment, are included in revenues and cost of revenues when management believes that the company is responsible for the ultimate acceptability of the project. Contracts are segmented between types of services, such as engineering and construction, and accordingly, revenue and gross margin related to each activity is recognized as those separate services are rendered. Changes to total estimated contract costs or losses, if any, are recognized in the period in which they are determined. Claims against customers are recognized as revenue upon settlement. Revenues recognized in excess of amounts received are classified as current assets. Amounts billed to clients in excess of revenues recognized to date are classified as current liabilities on contracts. Changes in project performance and conditions, estimated profitability, and final contract settlements may result in future revisions to engineering and development contract costs and revenue. These accounting policies were applied consistently for all periods presented. Information about the impact on our operating results is included in the footnotes to our financial statements. Deferred Revenues The Company recognizes revenues as earned. Amounts received or collected advance of the period in which service is rendered are recorded as a liability under deferred revenues. When the Company enters into production and development contracts with customers, an evaluation is made to ascertain the specific revenue generating activities of each contract and establishes the units of accounting for each activity. Revenue on these units of accounting is not recognized until a) there is persuasive evidence of the existence of a contract, b) the service has been rendered and delivery has occurred, c) there is a fixed and determinable price, and d) collectability is reasonable assured. Warranty Costs The Company provides product warranties for specific product lines and accrues for estimated future warranty costs in the period in which revenue is recognized. Our products are generally warranted to be free of defects in materials and workmanship for a period of 12 to 24 months from the date of installation, subject to standard limitations for equipment that has been altered by other than Enova Systems personnel and equipment which has been subject to negligent use. Warranty provisions are based on past experience of product returns, number of units repaired and our historical warranty incidence over the past twenty-four month period. The warranty liability is evaluated on an ongoing basis for adequacy and may be adjusted as additional information regarding expected warranty costs becomes known. Stock Based Compensation We measure the compensation cost for stock-based awards classified as equity at their fair value on the date of grant and recognize compensation expense over the service period for awards expected to vest, net of estimated forfeitures. Loss Per Share Basic loss per share is computed by dividing loss available to common stockholders by the weighted-average number of common shares outstanding. 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 were dilutive. Common equivalent shares are excluded from the computation if their effect is anti-dilutive. The Company’s common share equivalents consist of stock options, warrants and preferred stock. The potential shares, which are excluded from the determination of basic and diluted net loss per share as their effect is anti-dilutive, are as follows: Nine Months Ended September 30, 2015 2014 Options to purchase common stock 8,361,000 8,891,000 Warrants to purchase common stock 11,250,000 11,250,000 Common shares to be issued for debt conversion 1,250,000 1,250,000 Series A and B preferred shares conversion 83,000 83,000 Potential equivalent shares excluded 20,944,0000 21,474,000 Accounting Changes and Recent Accounting Pronouncements Certain accounting standards that have been issued or proposed by the FASB or other standards-setting bodies are not expected to have a material impact on the Company’s financial position, results of operations and cash flows.

Inventory

Inventory	9 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
Inventory	Inventory, consisting of materials, labor and manufacturing overhead, is stated at the lower of cost (first-in, first-out) or market and consisted of the following at: September 30, 2015 December 31, 2014 Raw materials $ 3,098,000 $ 3,098,000 Work-in-process 222,000 222,000 Finished goods 449,000 449,000 Reserve for obsolescence (3,657,0000 ) (3,401,000 ) $ 112,000 $ 368,000 The Company did not have production operations in the nine months ended September 30, 2015. Therefore, there was no change in the balance of inventory between September 30, 2015 and December 31, 2014. Inventory valuation adjustments amounted to $110,000 and $256,000 for the three and nine months ended September 30, 2015 and $59,000 for the three and nine months ended September 20, 2014.

Property and Equipment

Property and Equipment	9 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
Property and Equipment	Property and equipment consisted of the following at: September 30, 2015 December 31, 2014 Computers and software $ 59,000 $ 59,000 Machinery and equipment 209,000 209,000 Furniture and office equipment 86,000 86,000 Demonstration vehicles and buses 127,000 127,000 Sub-total 481,000 481,000 Less accumulated depreciation and amortization (481,000 ) (481,000 ) Total $ - $ - Depreciation and amortization expense was $0 and $9,000 for the three months ended September 30, 2015 and 2014, respectively. Depreciation and amortization expense was $0 and $29,000 for the nine months ended September 30, 2015 and 2014, respectively.

Other Accrued Liabilities

Other Accrued Liabilities	9 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
Other Accrued Liabilities	Other accrued liabilities consisted of the following at: September 30, 2014 December 31, 2014 Accrued inventory received $ 10,000 $ 10,000 Accrued professional services 330,000 298,000 Accrued warranty - 74,000 Other 254,000 49,000 Total $ 594,000 $ 431,000 Accrued warranty consisted of the following activities during the nine months ended September 30: 2015 2014 Balance at beginning of year $ 74,000 $ 74,000 Accruals for warranties issued during the period - - Expired warranty (74,000 ) Warranty claims - - Balance at end of quarter $ - $ 74,000

Notes Payable, Long-Term Debt a

Notes Payable, Long-Term Debt and Other Financing	9 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
Notes Payable, Long-Term Debt and Other Financing	Notes payable consisted of the following at: September 30, 2015 December 31, 2014 Secured note payable to Credit Managers Association of California, bearing interest at prime plus 3% (6.25% as of September 30, 2015), and is adjusted annually in April through maturity. Principal and unpaid interest due in April 2016. A sinking fund escrow may be funded with 10% of future equity financing, as defined in the Agreement $ 1,238,000 $ 1,238,000 Secured note payable to Coca Cola Enterprises in the original amount of $40,000, bearing interest at 10% per annum. Principal and unpaid interest due on demand 40,000 40,000 1,278,000 1,278,000 Less current portion of notes payable (1,278,000 ) (40,000 ) Notes payable, net of current portion $ - $ 1,238,000 As of September 30, 2015 and December 31, 2014, the balance of interest payable amounted to $1,543,000 and $1,482,000, respectively, of which the Credit Managers Association of California note amounted to $1,500,000 and $1,442,000, respectively. Interest expense on notes payable amounted to approximately $20,000 for the three months ended September 30, 2015 and 2014, respectively. Interest expense on notes payable amounted to approximately $61,000 and $60,000 for the nine months ended September 30, 2014 and 2013, respectively. In June 2013, the vehicle that secured the note payable due March 10, 2016 was repossessed by the secured lender. The Company was invoiced by the lender for $8,000 for final settlement, which is included in accounts payable at September 30, 2015 and December 31, 2014, respectively. In the fourth quarter of 2013, three vehicles that secured notes due on February 19, 2014, August 25, 2014 and April 9, 2015 were repossessed by the secured lenders. The Company has accrued approximately $17,000 for final settlements for the three vehicles, which is included in other accrued liabilities at September 30, 2015 and December 31, 2014, respectively.

Deferred Revenues

Deferred Revenues	9 Months Ended
	Sep. 30, 2015
Deferred Revenue Disclosure [Abstract]
Deferred Revenues	The Company had deferred revenue of $0 and $213,000 in revenue related to a production contract at September 30, 2015 and December 31, 2014. The Company’s management does not anticipate that funding can be obtained to complete the order in 2015. Therefore, the full amount of deferred revenue has been reclassed to other accrued liabilities as of September 30, 2015.

Stockholders' Equity

Stockholders' Equity	9 Months Ended
	Sep. 30, 2015
Equity [Abstract]
Stockholders' Equity	On February 23, 2014, Enova Systems, Inc, entered into Subscription Agreements with various offshore investors to sell approximately GBP 150,000 (approximately US$249,000) in gross proceeds by a private subscription of 19,999,998 common shares to be newly issued on the Alternative Investment Market of the London Stock Exchange (the "AIM Exchange"). The common shares were issued at a price of 0.0075 pence (approximately US$0.01per share) to certain eligible offshore investors (the "Subscription"). In connection with the Subscription, Enova entered into an Agreement for the Provision of Receiving Agent Services (the "Agreement") with Daniel Stewart & Company PLC (UK) for receiving agent services. Daniel Stewart presently serves as the Nominated Adviser for the listing of Enova's common shares on the AIM Exchange. The newly issued common shares for the Subscription were issued in three tranches of approximately GBP 50,000 each. Daniel Stewart received an introducing agent's fee of 10% of the aggregate funds raised pursuant to the subscription in addition to reimbursement of expenses. Factoring in the commission, legal and other expenses of the offering, Enova received approximately US$223,000 in net proceeds. The offer and sale of the shares were made pursuant to Regulation S under the Securities Act of 1933, as amended (the "Securities Act"). Among other things, each investor purchasing shares of Enova's common stock in the offering represented that the investor is not a United States person as defined in Regulation S. In addition, neither Enova nor the receiving agent conducted any selling efforts directed at the United States in connection with the offering. All shares of common stock issued in the offering included a restrictive legend indicating that the shares were issued pursuant to Regulation S under the Securities Act and are deemed to be "restricted securities." As a result, the purchasers of such shares will not be able to resell the shares unless in accordance with Regulation S, pursuant to a registration statement, or upon reliance of an applicable exemption from registration under the Securities Act. The shares to be sold pursuant to the Subscription Agreements were not registered under the Securities Act, and there is no obligation on the part of Enova to so register such shares. During the three and nine months ended September 30, 2015, the Company did not issue any shares of common stock to directors or employees as compensation.

Stock Options

Stock Options	9 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
Stock Options	Stock Option Program Description As of September 30, 2015, the Company had one equity compensation plan, the 2006 equity compensation plan (the “2006 Plan”). The 1996 Stock Option Plan (the “1996 Plan”) expired during the third quarter of 2015 due to expiration and forfeiture of the last grant under the plan. The 2006 Plan was approved by the Company’s shareholders. Equity compensation grants are designed to reward employees and executives for their long term contributions to the Company and to provide incentives for them to remain with the Company. The number and frequency of equity compensation grants are based on competitive practices, operating results of the company, and government regulations. The maximum number of shares issuable over the term of the 1996 Plan was limited to 65 million shares (without giving effect to subsequent stock splits). Options granted under the 1996 Plan typically have an exercise price of 100% of the fair market value of the underlying stock on the grant date and expire no later than ten years from the grant date. On August 27, 2013, the Board of Directors of Enova Systems approved amendments to Enova's 2006 Equity Compensation Plan (a) to increase the number of shares authorized for issuance from 3,000,000 shares to 9,000,000 shares and (b) to increase the number of shares of common stock that may be issued to an individual in any calendar year from 500,000 shares to 5,000,000 shares. Of the 9,000,000 shares reserved for issuance under the amended 2006 Plan, none were granted in the nine months ended September 30, 2015 and 3,750,000 were granted in the nine months ended September 30, 2014. As of September 30, 2015, 530,000 shares were available for grant. Options granted under the 2006 Plan have terms of between three and ten years and generally vest and become fully exercisable from one to three years from the date of grant or vest according to the price performance of our shares. Stock-based compensation expense related to stock options was $22,000 and $18,000 for the nine months ended September 30, 2015 and 2014, respectively. As of September 30, 2015, the total compensation cost related to non-vested awards not yet recognized is $33,000. The remaining period over which the future compensation cost is expected to be recognized is 17 months. The following table summarizes information about stock options outstanding and exercisable at September 30, 2015: Number of Share Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term in Years Aggregate Intrinsic Value (1) Outstanding at December 31, 2014 8,641,000 $ 0.06 2.03 $ — Granted — $ — — $ — Exercised — $ — — $ — Forfeited or Cancelled (280,000) $ — — $ — Outstanding at September 30, 2015 8,361,000 $ 0.05 1.33 $ — Exercisable at September 30, 2015 211,000 $ 1.13 4.60 $ — Vested and expected to vest (2) 8,361,000 $ 0.05 1.33 $ — (1) Aggregate intrinsic value represents the value of the closing price per share of our common stock on the last trading day of the fiscal period in excess of the exercise price multiplied by the number of options outstanding or exercisable, except for the “Exercised” line, which uses the closing price on the date exercised. (2) Number of shares includes options vested and those expected to vest net of estimated forfeitures. The exercise prices of the options outstanding at September 30, 2015 ranged from $0.02 to $3.81. The Company’s policy is to issue shares from its authorized shares upon the exercise of stock options. Unvested share activity for the nine months ended September 30, 2015 is summarized below: Unvested Number of Options Weighted Average Grant Date Fair Value Unvested balance at December 31, 2014 8,192,000 $ 0.01 Granted — $ — Vested (42,000 ) $ 0.04 Forfeited — $ — Unvested balance at September 30, 2015 8,150,000 $ 0.01 The fair values of all stock options granted are estimated on the date of grant using the Black-Scholes option-pricing model. During the nine months ended September 30, 2015, no options were granted. Options granted during the nine months ended Sepember 30, 2014 were 3,750,000. The estimated fair value of grants of stock options to nonemployees of the Company is charged to expense in the financial statements. These options vest in the same manner as the employee options granted under each of the option plans as described above.

Warrants

Warrants	9 Months Ended
	Sep. 30, 2015
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Warrants	In December 2011, the Company completed a private equity placement of 11,250,000 shares of common stock for $1,245,000 together with warrants to purchase up to 11,250,000 shares of common stock to a group of 17 shareholders (the “Low-Beer Managed Accounts”). The warrants are exercisable for a period of five years and exercisable at a price of $0.22 per share. The warrants further provide that if, for a twenty consecutive trading day period, the average of the closing price quoted on the OTCQB market is greater than or equal to $0.44 per share, with at least an average of 10,000 shares traded per day, then, on the 10th calendar day following written notice from the Company, any outstanding warrants will be deemed automatically exercised pursuant to the cashless/net exercise provisions under the warrants. The following is a summary of changes to outstanding warrants during the nine months ended September 30, 2015: Number of Share Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life Outstanding at December 31, 2014 11,250,000 $ 0.22 2.00 Granted — $ — — Exercised — $ — — Forfeited or Cancelled — $ — — Outstanding at September 30, 2015 11,250,000 $ 0.22 1.25 Exercisable at September 30, 2015 11,250,000 $ 0.22 1.25

Concentrations

Concentrations	9 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
Concentrations	The Company's trade receivables are concentrated with a few customers. The Company performs credit evaluations on its customers’ financial condition and generally requires no collateral from its customers. Concentrations of credit risk, with respect to accounts receivable, exist to the extent of amounts presented in the financial statements. Two customers represented 62% and 38%, respectively, of gross accounts receivable at September 30, 2015 and December 31, 2014, respectively. There were no inventory purchases in 2014 or 2015.

Summary of Significant Accoun17

Summary of Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2015
Summary Of Significant Accounting Policies Policies
Basis of Presentation	The financial position, results of operations and cash flows for the three and nine months ended September 30, 2015 and 2014 is unaudited but includes all adjustments (consisting only of normal recurring adjustments) that the Company considers necessary for a fair statement of its financial position at such dates and the operating results and cash flows for those periods. The year-end balance sheet data was derived from audited financial statements, and certain information and note disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to SEC rules or regulations; however, the Company believes the disclosures made are adequate to make the information presented not misleading. 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. Although management believes these estimates and assumptions are adequate, actual results could differ from the estimates and assumptions used. The results of operations for the interim periods presented are not necessarily indicative of the results of operations to be expected for the year. These interim financial statements should be read in conjunction with the audited financial statements for the year ended December 31, 2014, which are included in the Company’s Annual Report on Form 10-K for the year then ended.
Liquidity and Going Concern	The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. However, historically the Company has experienced significant recurring net losses and operating cash flow deficits. The Company’s ability to continue as a going concern is dependent on many factors, including among others, its ability to raise additional funding, and its ability to successfully restructure operations. To date, the Company has incurred recurring net losses and negative cash flows from operations. At September 30, 2015, the Company had an accumulated deficit of approximately $163.3 million, working capital of approximately negative $6.3 million and shareholders’ equity deficit of approximately $6.3 million. Until the Company can generate significant cash from its operations, the Company expects to continue to fund its operations with borrowings from employees, proceeds from one or more private placement agreements, or potentially through debt financing or the sale of equity securities. However, the Company may not be successful in obtaining additional funding. In addition, the Company cannot be sure that additional financing will be available when needed or that, if available, financing will be obtained on terms favorable to the Company or its shareholders. Our operations will require us to make necessary investments in human and production resources, regulatory compliance, as well as sales and marketing efforts. We do not currently have adequate internal liquidity to meet these objectives. On June 21, 2012, we reported in a Form 8-K filing that, as part of cost cutting measures in response to our decrease in revenue amid continued delays in industry adoption of EV technology resulting from ongoing battery cost and reliability concerns, in excess of 90% of our workforce left our Company, including the resignation of members of our senior management. We continue to evaluate strategic partnering opportunities and other external sources of liquidity, including the public and private financial markets and strategic partners. As a result of having insufficient funds, the Company has delayed all of its product development. Failure to obtain adequate financing also will adversely affect the Company’s ability to continue in business. If the Company raises additional funds by issuing equity securities, substantial dilution to existing stockholders would likely result. If the Company raises additional funds by incurring debt financing, the terms of the debt may involve significant cash payment obligations, as well as covenants and specific financial ratios that may restrict its ability to operate its business. The Company continues to pursue other options to raise additional capital to fund its operations; however, there can be no assurance that we can successfully raise additional funds through the capital markets. As of September 30, 2015, the Company had no cash and cash equivalents and received loans from an employee in order to maintain minimal operations. We do not anticipate that our remaining assets will be sufficient to meet projected operating requirements through the end of 2015 to continue operations and market trading.
Significant accounting policies	The accounting and reporting policies of the Company conform to US GAAP. There have been no significant changes in the Company's significant accounting policies during the nine months ended September 30, 2015 compared to what was previously disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2014.
Revenue Recognition	The Company business is the manufacture of proprietary products and other products based on design specifications provided by its customers. The Company recognizes revenue only when all of the following criteria have been met: • Persuasive Evidence of an Arrangement — • Delivery Has Occurred or Services Have Been Rendered — • The Fee for the Arrangement is Fixed or Determinable — • Collectability is Reasonably Assured — The Company recognizes revenue from milestone payments over the remaining minimum period of performance obligations. The Company also recognizes engineering and construction contract revenues using the percentage-of-completion method, based primarily on contract costs incurred to date compared with total estimated contract costs. Customer-furnished materials, labor, and equipment, and in certain cases subcontractor materials, labor, and equipment, are included in revenues and cost of revenues when management believes that the company is responsible for the ultimate acceptability of the project. Contracts are segmented between types of services, such as engineering and construction, and accordingly, revenue and gross margin related to each activity is recognized as those separate services are rendered. Changes to total estimated contract costs or losses, if any, are recognized in the period in which they are determined. Claims against customers are recognized as revenue upon settlement. Revenues recognized in excess of amounts received are classified as current assets. Amounts billed to clients in excess of revenues recognized to date are classified as current liabilities on contracts. Changes in project performance and conditions, estimated profitability, and final contract settlements may result in future revisions to engineering and development contract costs and revenue. These accounting policies were applied consistently for all periods presented. Information about the impact on our operating results is included in the footnotes to our financial statements.
Deferred Revenue	The Company recognizes revenues as earned. Amounts received or collected advance of the period in which service is rendered are recorded as a liability under deferred revenues. When the Company enters into production and development contracts with customers, an evaluation is made to ascertain the specific revenue generating activities of each contract and establishes the units of accounting for each activity. Revenue on these units of accounting is not recognized until a) there is persuasive evidence of the existence of a contract, b) the service has been rendered and delivery has occurred, c) there is a fixed and determinable price, and d) collectability is reasonable assured.
Warranty Costs	The Company provides product warranties for specific product lines and accrues for estimated future warranty costs in the period in which revenue is recognized. Our products are generally warranted to be free of defects in materials and workmanship for a period of 12 to 24 months from the date of installation, subject to standard limitations for equipment that has been altered by other than Enova Systems personnel and equipment which has been subject to negligent use. Warranty provisions are based on past experience of product returns, number of units repaired and our historical warranty incidence over the past twenty-four month period. The warranty liability is evaluated on an ongoing basis for adequacy and may be adjusted as additional information regarding expected warranty costs becomes known.
Stock Based Compensation	We measure the compensation cost for stock-based awards classified as equity at their fair value on the date of grant and recognize compensation expense over the service period for awards expected to vest, net of estimated forfeitures.
Loss Per Share	Basic loss per share is computed by dividing loss available to common stockholders by the weighted-average number of common shares outstanding. 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 were dilutive. Common equivalent shares are excluded from the computation if their effect is anti-dilutive. The Company’s common share equivalents consist of stock options, warrants and preferred stock. The potential shares, which are excluded from the determination of basic and diluted net loss per share as their effect is anti-dilutive, are as follows: Nine Months Ended September 30, 2015 2014 Options to purchase common stock 8,361,000 8,891,000 Warrants to purchase common stock 11,250,000 11,250,000 Common shares to be issued for debt conversion 1,250,000 1,250,000 Series A and B preferred shares conversion 83,000 83,000 Potential equivalent shares excluded 20,944,0000 21,474,000
Accounting changes and recent accounting pronouncements	Certain accounting standards that have been issued or proposed by the FASB or other standards-setting bodies are not expected to have a material impact on the Company’s financial position, results of operations and cash flows.

Summary of Significant Accoun18

Summary of Significant Accounting Policies (Tables)	9 Months Ended
	Sep. 30, 2015
Summary Of Significant Accounting Policies Tables
Anti-dilutive shares excluded from computation of Earnings per Share	Nine Months Ended September 30, 2015 2014 Options to purchase common stock 8,361,000 8,891,000 Warrants to purchase common stock 11,250,000 11,250,000 Common shares to be issued for debt conversion 1,250,000 1,250,000 Series A and B preferred shares conversion 83,000 83,000 Potential equivalent shares excluded 20,944,0000 21,474,000

Inventory (Tables)

Inventory (Tables)	9 Months Ended
	Sep. 30, 2015
Inventory Tables
Inventory	September 30, 2015 December 31, 2014 Raw materials $ 3,098,000 $ 3,098,000 Work-in-process 222,000 222,000 Finished goods 449,000 449,000 Reserve for obsolescence (3,657,0000 ) (3,401,000 ) $ 112,000 $ 368,000

Property and Equipment (Tables)

Property and Equipment (Tables)	9 Months Ended
	Sep. 30, 2015
Property And Equipment Tables
Property and equipment	September 30, 2015 December 31, 2014 Computers and software $ 59,000 $ 59,000 Machinery and equipment 209,000 209,000 Furniture and office equipment 86,000 86,000 Demonstration vehicles and buses 127,000 127,000 Sub-total 481,000 481,000 Less accumulated depreciation and amortization (481,000 ) (481,000 ) Total $ - $ -

Other Accrued Liabilities (Tabl

Other Accrued Liabilities (Tables)	9 Months Ended
	Sep. 30, 2015
Other Accrued Liabilities Tables
Other accrued liabilities	September 30, 2014 December 31, 2014 Accrued inventory received $ 10,000 $ 10,000 Accrued professional services 330,000 298,000 Accrued warranty - 74,000 Other 254,000 49,000 Total $ 594,000 $ 431,000
Accrued warranty	2015 2014 Balance at beginning of year $ 74,000 $ 74,000 Accruals for warranties issued during the period - - Expired warranty (74,000 ) Warranty claims - - Balance at end of quarter $ - $ 74,000

Notes Payable, Long-Term Debt22

Notes Payable, Long-Term Debt and Other Financing (Tables)	9 Months Ended
	Sep. 30, 2015
Notes Payable Long-Term Debt And Other Financing Tables
Notes payable	September 30, 2015 December 31, 2014 Secured note payable to Credit Managers Association of California, bearing interest at prime plus 3% (6.25% as of September 30, 2015), and is adjusted annually in April through maturity. Principal and unpaid interest due in April 2016. A sinking fund escrow may be funded with 10% of future equity financing, as defined in the Agreement $ 1,238,000 $ 1,238,000 Secured note payable to Coca Cola Enterprises in the original amount of $40,000, bearing interest at 10% per annum. Principal and unpaid interest due on demand 40,000 40,000 1,278,000 1,278,000 Less current portion of notes payable (1,278,000 ) (40,000 ) Notes payable, net of current portion $ - $ 1,238,000

Stock Options (Tables)

Stock Options (Tables)	9 Months Ended
	Sep. 30, 2015
Stock Options Tables
Stock options outstanding and exercisable	Number of Share Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term in Years Aggregate Intrinsic Value (1) Outstanding at December 31, 2014 8,641,000 $ 0.06 2.03 $ — Granted — $ — — $ — Exercised — $ — — $ — Forfeited or Cancelled (280,000) $ — — $ — Outstanding at September 30, 2015 8,361,000 $ 0.05 1.33 $ — Exercisable at September 30, 2015 211,000 $ 1.13 4.60 $ — Vested and expected to vest (2) 8,361,000 $ 0.05 1.33 $ — (1) Aggregate intrinsic value represents the value of the closing price per share of our common stock on the last trading day of the fiscal period in excess of the exercise price multiplied by the number of options outstanding or exercisable, except for the “Exercised” line, which uses the closing price on the date exercised. (2) Number of shares includes options vested and those expected to vest net of estimated forfeitures.
Unvested share activity	Unvested Number of Options Weighted Average Grant Date Fair Value Unvested balance at December 31, 2014 8,192,000 $ 0.01 Granted — $ — Vested (42,000 ) $ 0.04 Forfeited — $ — Unvested balance at September 30, 2015 8,150,000 $ 0.01

Warrants (Tables)

Warrants (Tables)	9 Months Ended
	Sep. 30, 2015
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Outstanding warrants	Number of Share Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life Outstanding at December 31, 2014 11,250,000 $ 0.22 2.00 Granted — $ — — Exercised — $ — — Forfeited or Cancelled — $ — — Outstanding at September 30, 2015 11,250,000 $ 0.22 1.25 Exercisable at September 30, 2015 11,250,000 $ 0.22 1.25

Description of the Company an25

Description of the Company and its Business (Details Narrative)	9 Months Ended
	Sep. 30, 2015USD ($)
Description Of Comany And Its Business Details Narrative
Current debt to creditors	$ 4,700,000
Judgement	2,000,000
Settlement	$ 300,000

Summary of Significant Accoun26

Summary of Significant Accounting Policies (Details Narrative) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Summary Of Significant Accounting Policies Details Narrative
Net working capital	$ (6,100,000)
Accumulated deficit	(163,297,000)	$ (162,870,000)
Shareholders' equity deficit	$ (6,274,000)	$ (5,869,000)

Summary of Significant Accoun27

Summary of Significant Accounting Policies (Details 1) - shares	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Potential equivalent shares excluded	20,944,000	21,474,000
Options [Member]
Potential equivalent shares excluded	8,361,000	8,891,000
Warrants [Member]
Potential equivalent shares excluded	11,250,000	11,250,000
Convertible Debt Securities [Member]
Potential equivalent shares excluded	1,250,000	1,250,000
Series A and B Preferred Stock [Member]
Potential equivalent shares excluded	83,000	83,000

Inventory (Details)

Inventory (Details) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Inventory
Raw Materials	$ 3,098,000	$ 3,098,000
Work In Progress	222,000	222,000
Finished Goods	449,000	449,000
Reserve for Obsolescence	(3,657,000)	(3,401,000)
Total	$ 112,000	$ 368,000

Inventory (Details Narrative)

Inventory (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Inventory Details
Inventory valuation adjustment	$ 111,000	$ 59,000	$ 256,000	$ 59,000

Property and Equipment (Details

Property and Equipment (Details) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Property and Equipment
Computers and software	$ 59,000	$ 59,000
Machinery and equipment	209,000	209,000
Furniture and office equipment	86,000	86,000
Demonstration vehicles and buses	127,000	127,000
Sub-total	481,000	(481,000)
Less accumulated depreciation and amortization	$ (481,000)	$ (481,000)
Total

Property and Equipment (Detai31

Property and Equipment (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Property and Equipment
Depreciation and amortization expense	$ 0	$ 9,000	$ 0	$ 29,000

Other Accrued Liabilities (Deta

Other Accrued Liabilities (Details) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Other accrued liabilities
Accrued inventory received	$ 10,000	$ 10,000
Accrued professional services	$ 330,000	298,000
Accrued warranty		74,000
Other	$ 254,000	49,000
Total	$ 594,000	$ 431,000

Other Accrued Liabilities (De33

Other Accrued Liabilities (Details 1) - USD ($)	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Accrued warranty
Balance at beginning of period	$ 74,000	$ 74,000
Accruals for warranties issued during the period
Expired warranty	$ (74,000)
Warranty claims
Balance at end of period	$ 74,000	$ 74,000

Notes Payable, Long-Term Debt34

Notes Payable, Long-Term Debt and Other Financing (Details) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Notes Payable, Long-Term Debt and Other Financing
Notes payable, Gross	$ 1,278,000	$ 1,278,000
Less current portion of notes payable	$ (1,278,000)	(40,000)
Notes payable, net of current portion		1,238,000
PrimePlusThreePercentNoteMember
Notes Payable, Long-Term Debt and Other Financing
Notes payable, Gross	$ 1,238,000	1,238,000
TenPercentNoteMember
Notes Payable, Long-Term Debt and Other Financing
Notes payable, Gross	$ 40,000	$ 40,000

Notes Payable, Long-Term Debt35

Notes Payable, Long-Term Debt and Other Financing (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Notes Payable, Long-Term Debt and Other Financing
Long term interest payable	$ 1,543,000		$ 1,543,000		$ 1,482,000
Interest expense on notes payable	20,000	$ 20,000	61,000	$ 60,000
Accrued liability	8,000		8,000
Accrued settlements for vehicles	17,000		17,000
CreditManagersAssociationofCaliforniaMember
Notes Payable, Long-Term Debt and Other Financing
Long term interest payable	$ 1,500,000		$ 1,500,000		$ 1,442,000

Deferred Revenues (Details Narr

Deferred Revenues (Details Narrative) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Deferred Revenue Disclosure [Abstract]
Deferred revenue	$ 0	$ 213,000

Stockholders' Equity (Details N

Stockholders' Equity (Details Narrative) - Subscription Arrangement [Member]	3 Months Ended
	Apr. 14, 2014USD ($)$ / sharesshares
Shares issued for cash proceeds | shares	19,999,998
Proceeds	$ 249,000
Purchase agreement share price | $ / shares	$ .01
Tranche amount	$ 50,000
Agent fee rate	10.00%
Net proceeds	$ 223,000

Stock Options (Details)

Stock Options (Details)	9 Months Ended
	Sep. 30, 2015USD ($)$ / sharesshares
Number of Share Options
Outstanding at beginning of period | shares	8,641,000
Granted | shares
Exercised | shares
Forfeited or Cancelled | shares	(280,000)
Outstanding at end of period | shares	8,361,000
Exercisable at end of period | shares	211,000
Vested and expected to vest | shares	8,361,000
Weighted Average Exercise Price
Outstanding at beginning of period	$ .06
Granted
Exercised
Forfeited or Cancelled
Outstanding at end of period	$ .05
Exercisable at end of period	1.13
Vested and expected to vest	$ .05
Outstanding at beginning of period	2 years 11 days
Outstanding at end of period	1 year 3 months 29 days
Exercisable at end of period	4 years 7 months 6 days
Vested and expected to vest	1 year 3 months 29 days
Outstanding at beginning of period | $
Exercised | $
Forfeited or Cancelled
Outstanding at end of period | $
Exercisable at end of period | $
Vested and expected to vest | $

Stock Options (Details 1)

Stock Options (Details 1)	9 Months Ended
	Sep. 30, 2015$ / sharesshares
Stock Options Details 1
Unvested balance at beginning	8,192,000
Granted
Vested	(42,000)
Forfeited
Unvested balance at end	8,150,000
Unvested balance at beginning | $ / shares	$ .01
Granted | $ / shares
Vested | $ / shares	$ .04
Forfeited | $ / shares
Unvested balance at end | $ / shares	$ .01

Stock Options (Details Narrativ

Stock Options (Details Narrative) - USD ($)	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Notes to Financial Statements
Maximum shares issuable pursuant to plan	65,000,000
Shares reserved for issuance	9,000,000
Authorized amount of shares issuable to any individual per calendar year	5,000,000
Granted shares		3,750,000
Shares available for grant	530,000
Stock based compensation expense	$ 22,000	$ 18,000
Total compensation cost related to non-vested awards not yet recognized	$ 33,000
Future compensation cost is expected to be recognized	17 months
Exercise prices of the options outstanding Minimum	$ .02
Exercise prices of the options outstanding Maximum	$ 3.81
Weighted average grant-date fair value of options

Warrants (Details)

Warrants (Details)	9 Months Ended
	Sep. 30, 2015$ / sharesshares
Number of Share Options
Outstanding at beginning of period	11,250,000
Granted
Exercised
Forfeited or Cancelled
Outstanding at end of period	11,250,000
Exercisable at end of period	11,250,000
Weighted Average Exercise Price
Outstanding at beginning of period | $ / shares	$ .22
Granted | $ / shares
Exercised | $ / shares
Forfeited or Cancelled | $ / shares
Outstanding at end of period | $ / shares	$ .22
Exercisable at end of period | $ / shares	$ .22
Weighted Average Remaining Contractual Life
Outstanding at beginning of period	2 years
Outstanding at end of period	1 year 3 months
Exercisable at end of period	1 year 3 months

Warrants (Details Narrative)

Warrants (Details Narrative)	9 Months Ended
	Sep. 30, 2015$ / sharesshares
Warrants Details Narrative
Private equity placement	11,250,000
Warrants issued	1,245,000
Warrant exercise price | $ / shares	$ 0.22
Closing price limit | $ / shares	$ 0.44
Daily trading minimum	10,000

Concentration (Details Narrativ

Concentration (Details Narrative)	9 Months Ended	12 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
TwoCustomers [Member] | Accounts Receivable [Member]
Concentration risk	62.00%	38.00%