10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended:  September 30, 2016

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to _________

Commission File Number:  000-54015

POWIN ENERGYCORPORATION

(Exact name of registrant as specified in its charter)

NEVADA	87-0455378
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification Number)

20550 SW 115th Ave

Tualatin, OR 97062

(Address of principal executive offices)

T: (503) 598-6659

(Issuer’s telephone number)

(Former name, former address and former fiscal year, if changed since last report)       Powin Corporation

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes    ☒  No    ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes    ☒  No    ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or smaller reporting company.  See definition of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (check one)  Large accelerated filer ☐ Accelerated filer    ☐   Non-accelerated filer    ☐ Smaller reporting company    ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes    ☐   No    ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.  As of November 16, 2016, there were 29,977,626 shares of Common Stock, $0.001 par value, outstanding.

POWIN ENERGY CORPORATION

Index

PART I.        FINANCIAL INFORMATION

Item 1.	Financial Statements.	3
	Condensed Consolidated Balance Sheets as of September 30, 2016  (unaudited) and December 31, 2015 (audited)	3
	Condensed Consolidated Statements of Operations for the Three and Nine months ended September 30,2016 and 2015 (unaudited)	4
	Condensed Consolidated Statements of Comprehensive Loss for the Three and Nine months ended September 30, 2016 and 2015 (unaudited)
	Condensed Consolidated Statements of Cash Flows for the Nine months ended September 30,2016 and 2015 (unaudited)	5
	Notes to Unaudited Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of   Operations	23
	Note Regarding Forward Looking Statements	23
	Overview
	Critical Accounting Policies	29
	Results of Operations
	Liquidity and Capital Resources	27
	Off-Balance Sheet Arrangements	29
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	29
Item 4.	Controls and Procedures.	29
PART II.  OTHER INFORMATION
Item 1.	Legal Proceedings.	29
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	29
Item 3.	Defaults Upon Senior Securities.	30
Item 4.	Mine Safety Disclosures.	30
Item 5.	Other Information.	30
Item 6.	Exhibits.	30

2

PART I.       FINANCIAL INFORMATION

Item 1.  Financial Statements.

POWIN ENERGY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
	September 30,			December 31,
	2016			2015
	(unaudited)			(audited)
Assets
Current Assets
Cash	$	551,804		$	2,866,507
Accounts receivable, net		14,326			22,903
Notes and other receivables, net		-			883
Inventories, net		1,190,868			623,399
Prepaid expenses and deposits		676,332			258,199
Assets  held for sale		3,055,639			4,317,419
Total current assets		5,488,969			8,089,310
Property and equipment, net		195,588			159,507
Intangible assets, net		177,168			182,911
Assets held for sale	$	850,491			1,077,143
Total assets	$	6,712,216		$	9,508,871
Liabilities and shareholders' equity
Current Liabilities
Accounts payable	$	302,412		$	152,861
Accrued payroll and other accrued liabilities		331,163			330,370
Notes payable - current portion of long-term debt and accrued interest		1,505,586			19,271
Liabilities held for sale		1,915,443			1,682,603
Total current liabilities		4,054,604			2,185,105
Total liabilities		4,054,604			2,185,105
Stockholders' Equity
Preferred stock, 25,000,000 shares authorized:
Series A stock: $100 par value, Conversion rate 1 to 20, 10,855 and 10,237 shares issued and outstanding, respectively		1,085,500			1,023,700
2015 August stock: $0.56 par value, Conversion rate 1 to 1, 0 and 13,625,826 shares issued and outstanding, respectively		-			7,630,464
Common stock, $0.001 par value, 575,000,000 shares
Authorized; 29,977,626 and 16,243,839 shares issued and outstanding, respectively		29,978			16,256
Additional paid-in capital		30,751,748			23,909,992
Accumulated other comprehensive loss		(91,871	)		(56,176	)
Accumulated deficit		(26,256,731	)		(22,060,870	)
Total Powin Energy Corporation stockholders' equity		5,518,624			10,463,366
Non-controlling interest		(2,861,012	)		(3,139,600	)
Total liabilities and shareholders' equity	$	6,712,216		$	9,508,871

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

3

POWIN ENERGY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
	Three months ended September 30,						Nine Months ended September 30,
	2016			2015			2016			2015
Net sales	$	11,847		$	40,979		$	33,243		$	127,638
Cost of sales		14,726			20,991			55,549			172,948
Gross profit(loss)		(2,879	)		19,988			(22,306	)		(45,310	)
Operating Expenses
Payroll expenses		354,491			322,075			973,416			928,315
Professional expenses		297,074			523,486			1,205,598			1,460,080
Rent expenses		70,681			105,540			212,042			316,620
General and administrative expenses		266,960			323,658			553,597			720,140
Total operating expenses		989,206			1,274,759			2,944,653			3,425,155
Loss from operations		(992,085	)		(1,254,771	)		(2,966,959	)		(3,470,465	)
Other income (expense)
Other income		0			0			0			25,059
Interest expense		(21,463	)		(18,601	)		(21,634	)		(233,074	)
Other income (expense)		-			0			-			149,855
Other expenses		(21,463	)		(18,601	)		(21,634	)		(58,160	)
Loss before income taxes		(1,013,548	)		(1,273,372	)		(2,988,593	)		(3,528,625	)
Provision for income taxes		3,849			11,250			11,349			11,250
Net loss from continuing operations		(1,017,397	)		(1,284,622	)		(2,999,942	)		(3,539,875	)
Loss from discontinued operations, net of income taxes		(965,666	)		(430,795	)		(1,719,907	)		(941,915	)
Net loss before NCI		(1,983,063	)		(1,715,417	)		(4,719,849	)		(4,481,790	)
Net loss attributable to non-controlling interest		(174,108	)		(277,073	)		(523,988	)		(788,584	)
Net loss attributable to Powin energy corporation		(1,808,955	)		(1,438,344	)		(4,195,861	)		(3,693,206	)
Loss per share:
Basic and diluted loss per share
From continuing operations		(0.04	)		(0.06	)		(0.13	)		(0.17	)
From discontinued operations		(0.04	)		(0.03	)		(0.09	)		(0.06	)
Combined loss per share attributable to Common Shareholders	$	(0.08	)	$	(0.09	)	$	(0.22	)	$	(0.23	)
Weighted average shares outstanding:
Basic and Diluted		23,853,422			16,249,839			18,807,783			16,246,850

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

4

POWIN ENERGY CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Nine Months ended September 30,
	2016			2015
OPERATING ACTIVITIES
Net loss from continuing operations	$	(2,999,942	)	$	(3,539,875	)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization		42,054			41,280
Reserve for slow moving and obsolete inventory		-			49,198
Share based compensation		41,788			55,009
Provision for doubtful accounts receivable		-			(1,500	)
Changes in operating assets and liabilities
Accounts receivable		8,577			10,825
Notes and other receivables		883			(2,174	)
Inventories		(567,469	)		(201,249	)
Prepaid expenses and deposits		(418,133	)		113,095
Other receivable		-			(2,483,970	)
Accounts payable		149,551		(131,155)
Accrued payroll and other liabilities		793		(168,250)
Net cash used in operating activities – continuing operations		(3,741,899	)	(6,258,766)
Net cash (used in) provided by operating activities – discontinued operations		(221,128	)	1,248,630
Net cash used in operating activities		(3,963,027	)	(5,010,136)
INVESTING ACTIVITIES
Acquisition of intangible assets		(11,365	)	-
Cash paid to acquire non-controlling interest		(15,747	)	-
Purchase of equipment and leasehold improvements		(61,027	)	-
Net cash used in investing activities – continuing operations		(88,139	)	-
Net cash provided by(used in) investing activities – discontinued operations		13,273		(119,876)
Net cash used in investing activities		(74,866	)	(119,876)
FINANCING ACTIVITIES
Proceeds from notes payables and debt		1,505,586			-
Repayments of notes payables and debt		(19,271	)		-
Proceeds from stock issuance		-			8,930,000
Net cash provided by financing activities – continuing operations		1,486,315			8,930,000
Net cash provided by(used in) financing activities – discontinued operations		272,570		(231,572)
Net cash provided by financing activities		1,758,885		8,698,428
Impact of foreign exchange on cash		(35,695	)		(25,868	)
Net (decrease) increase in cash		(2,314,703	)		3,542,548
Cash at beginning of period		2,866,507			344,020
Cash at end of period	$	551,804		$	3,886,568
SUPPLEMENTAL DISCLOURSE OF CASH FLOW INFORMATION
Interest paid	$	171		$	570,042
Income taxes paid	$	11,349		$	11,250

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

5

POWIN ENERGY CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements 

Note 1 – Description of Business and History And Summary of Significant Accounting Policies

Description of Business and History

Powin Energy Corporation (“Company”, “we”, “us”) was founded in 1989 in Oregon under its original name of Powin Corporation by Joseph Lu, who developed a strategy of manufacturing a number of diverse products for leading North American retailers, with careful attention to quality and value-added service. As a contract manufacturer, the Company provides manufacturing coordination, design and logistics services for companies to outsource its manufacturing needs. Manufacturing is provided through the Company’s subsidiary, Q Pacific Manufacturing Corporation (“Q Pacific Manufacturing”), with a leased metal fabrication plant in Tualatin, Oregon; its 100% owned subsidiary in Mexico, with a leased metal fabrication plant in Saltillo; or through very strong relationships with factories located in The People’s Republic of China and in Taiwan.

Throughout its life-cycle, the Company has expanded into additional lines of business, all based on the values of delivering customers a high quality product and value-added service. For the periods presented the Company have the following subsidiaries:

As described in this Form 10Q and 2015 Form 10K				As described in previously filings
Legal entity name	Business  segment name			Legal entity name	Business  segment name
Powin Corporation	Holding company			Powin Corporation	Holding company
Q Pacific Contract Manufacturing Corporation	Contract manufacturing			Powin Contract Manufacturing Corporation	Contract manufacturing
Q Pacific Manufacturing Corporation	Manufacturing			Powin Manufacturing Corporation	Manufacturing
Powin Energy Corporation	Energy			Powin Energy Corporation	Energy
Powin Industries S.A. de C.V.	Mexico			Powin Industries S.A. de C.V.	Mexico
Powin Product  Service, Inc.	Contract Manufacturing			Powin Product service, Inc.	Warehousing

The Company’s client base includes distributors in the transportation, medical, sports, camping, fitness, and packaging and furniture industries.  Operations outside the United States of America are subject to risks inherent in operating under different legal systems and various political and economic environments.  Among the risks are changes in existing tax laws, possible limitations on foreign investment and income repatriation, government price or foreign exchange controls, and restrictions on currency exchange.

Effective October 3, 2016(see Note13 &14), the Company entered into a Stock Purchase Agreement with Powin Industries, SA de CV (“Powin Mexico”) and Rolland Holding Company, LLC (“Rolland”)pursuant to which   Company sold to Rolland 99 shares of  the Series A Common Stock and the 167,452 shares of the Series B Common Stock of  Powin Mexico  which represents 99% of the Series A Common Stock and 100% of the Series B Common Stock (collectively the “Shares”) of  Powin Mexico.  The closing date of the Agreement was October 4, 2016 (“Closing”).The purchase price for the Shares was $999,000. At Closing, Rolland made a cash payment of $99,000 and delivered to the Company (i) its promissory note in the  principal amount $100,000 bearing interest at 4% per annum with principal and interest payable in twelve (12) equal monthly installments (“Short Term Note”); and (ii) its promissory note in the principal amount of $800,000 bearing interest at 5% per annum with principal and interest payable in ninety-six (96) equal monthly installments (“Long Term Note”). The interest rate on the Long Term Note will be renegotiated if and when the Prime Rate for the U.S reaches 5%. In addition, Powin Mexico delivered to the Company a non-interest bearing promissory note in the amount of $125,000 (“Powin Mexico Note”) which calls for four (4) equal monthly installments of $31,250 on each of December 31, 2017, December 31, 2018, December 31, 2019 and December 31, 2020. The Powin Mexico Note represents a compromised amount representing the difference between the amount of the Powin Mexico accounts receivable and the amount of the Powin Mexico accounts payable owing to the Company. The Purchase Agreement contains customary warranties and representation.  Amounts due under the Short Term Note, the Long Term Note and the Powin Mexico Note, respectively,  may be accelerated upon a failure to pay amounts due thereunder when due, unless waived or cured. As a consequence of the Purchase Agreement, Powin Mexico ceased being a subsidiary of Powin Corporation.

6

Effective October 18, 2016(see Note13&14), the Company entered into a Stock Purchase Agreement with Weiping Cai (“Cai”) pursuant to which the Company sold to Cai all of the issued and outstanding shares of Common Stock (“Shares”) of   Q Pacific Corporation, the Company’s wholly-owned subsidiary, which wholly-owns and operates Q Pacific Contract Manufacturing and Q Pacific Manufacturing Corporation, the Company’s second tier subsidiaries, collectively referred to as (“QPM”). In addition to the sale of the Shares, the Company also transferred and assigned to Cai the Company’s right, title and interest in and to the “Huntsman” tradename held by Q Pacific Contract Manufacturing Corporation.

Basis of preparation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information required by GAAP for complete annual financial statement presentation.

In the opinion of management, all adjustments (consisting only of normal and recurring adjustments) necessary for a fair presentation of the results of operations have been included in the accompanying unaudited condensed consolidated financial statements. Operating results for the nine-month period ended September 30, 2016, are not necessarily indicative of the results to be expected for other interim periods or for the full year ended December 31, 2016. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and accompanying notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, as filed with the Securities Exchange Commission.

Principles of consolidation

The accompanying unaudited condensed consolidated financial statements include the accounts of Powin Energy Corporation and its subsidiaries. All intercompany transactions and balances have been eliminated. Equity investments through which the Company exercises significant influence over but does not control the investee and is not the primary beneficiary of the investee’s activities are accounted for using the equity method. Investments through which the Company is not able to exercise significant influence over the investee are accounted for under the cost method.

Foreign currencies

Assets and liabilities recorded in foreign currencies are translated to U.S. dollars at the exchange rate on the balance sheet date. Revenue and expenses are translated to U.S. dollars at average rates of exchange prevailing during the year. Translation adjustments resulting from this process are recorded to other comprehensive income (“OCI”).

The reporting currency of the Company is the U.S. dollars. The Company’s Mexico subsidiary Powin Industries S.A. de C.V uses Mexican Peso as its functional currency. The results of operations and cash flows are translated at average exchange rates during the period, and assets and liabilities are translated at the unified exchange rates at the balance sheet dates, and equity is translated at the historical exchange rates. As a result, amounts related to assets and liabilities reported on the statements of cash flows will not necessarily agree with changes in the corresponding accounts on the balance sheets. Translation adjustments resulting from this process are included in accumulated other comprehensive income in the statements of stockholders’ equity. Translation adjustments for the nine months ended September 30, 2016 and 2015 were $(35,695) and $(25,868), respectively. Translation adjustments for the three months ended September 30, 2016 and 2015 were $(33,126) and $(3,595), respectively. The cumulative translation adjustment and effect of exchange rate changes on cash, which was recorded as accumulated other comprehensive loss on the balance sheet, as of September 30, 2016 and December 31, 2015 were $(91,871) and $(56,176), respectively. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred.

Assets and liabilities were translated at 19.41PESO and 17.34 PESO to $1.00 at September 30, 2016 and December 31, 2015, respectively. The equity accounts were stated at their historical rates. The average translation rates applied to income statements for the nine months ended September 30, 2016 and 2015 were 19.41PESO and 17.58 PESO to $1.00, respectively. Cash flows are also translated at average translation rates for the period; therefore, amounts reported on the statement of cash flows will not necessarily agree with changes in the corresponding balances on the balance sheet.

7

Use of estimates

The preparation of consolidated financial statements in accordance with GAAP requires the use of management’s estimates. These estimates are subjective in nature and involve judgments that affect the reported amounts of assets and liabilities, and the reported amounts of revenues and expenses during the periods presented. Actual results could differ from those estimates.

We maintain allowances for accounts receivable for estimated uncollectable accounts receivable due to the inability of our customers to make required payments. We maintain impairment for inventory for estimated inventory loss. We maintain allowances for returns for estimated losses resulting from product returns. These estimates have historically been within our expectations and the provisions established.

Revenue recognition

The Company recognizes revenue when persuasive evidence of an arrangement exists, the service is performed or delivery has occurred, the price is fixed or determinable, and collectability is reasonably assured.

For product shipped directly from the Company’s warehouse or manufactured by the Company in the United States and then shipped to the customer, revenue is recognized at time of shipment as it is determined that ownership and title has passed to the customer at shipment and revenue is recognized.  Amounts billed to customers for freight and shipping are classified as revenue.

Products imported from China and shipped directly to the customer may be either FOB Port of Origin or FOB Shipping Destination United States. If the product is shipped FOB Port of Origin revenue is recognized at time of delivery to the Company’s representative in China, when the proper bills-of-lading have been signed by the customer’s agent and ownership passed to the customer.  For product shipped FOB Shipping Destination U.S., revenue is recognized when product is off-loaded at the United States Port of Entry and delivered to the customer, when all delivery documents have been signed by the receiving customer, and ownership has passed to the customer. 

For orders placed requiring customized manufacturing, the Company requires the customer to issue its signed purchase order with documentation identifying the specifics of the product to be manufactured. Revenue is recognized on customized manufactured products upon delivery of the product.  If the customer cancels the purchase order after the manufacturing process has begun, the Company invoices the customer for any manufacturing costs incurred and revenue is recognized.  Orders canceled after delivery has occurred are fully invoiced to the customer and revenue is recognized, provided all other revenue recognition criteria are met.

Cost of goods sold

Cost of goods sold includes cost of inventory sold during the period, net of discounts and allowances, freight and shipping costs, warranty and rework costs, and sales tax.

Advertising

The Company expenses the cost of advertising as incurred.  For the nine months ended September 30, 2016 and 2015, the amount charged to advertising expense was $21,280 and $118,255, respectively. For the three months ended September 30, 2016 and 2015, the amount charged to advertising expense was $16,187 and $71,169, respectively.

Research and development

Research and development expenses include payroll, employee benefits, stock-based compensation expense, and other headcount-related expenses associated with product development. Research and development expenses also include third-party development and programming costs, localization costs incurred to translate software for international markets, and the amortization of purchased software code and services content. Such costs related to software development are included in research and development expense until the point that technological feasibility is reached, which for our software products, is generally shortly before the products are released to manufacturing. Once technological feasibility is reached, such costs are capitalized and amortized to cost of revenue over the estimated lives of the products.

8

Loss Per Share

Basic loss per share is based on the weighted-average effect of all common shares issued and outstanding, and is calculated by dividing net loss by the weighted-average shares outstanding during the year. Diluted loss per share is calculated by dividing net income by the weighted-average number of common shares used in the basic loss per share calculation plus the number of common shares that would be issued assuming exercise or conversion of all potentially dilutive common shares outstanding. The Company excludes equity instruments from the calculation of diluted earnings per share if the effect of including such instruments is antidilutive. Please refer to Note 6 for further discussion.

Comprehensive loss

Comprehensive loss is defined to include all changes in equity except those resulting from investments by owners and distributions to owners. Among other disclosures, ASC 220, Comprehensive loss requires that all items that are required to be recognized under current accounting standards as components of comprehensive loss be reported in a financial statement that is displayed with the same prominence as other financial statements. For the years presented, the Company’s comprehensive loss includes net loss and foreign currency translation adjustments and is presented in the consolidated statements of comprehensive loss.

Cash

The Company considers all highly liquid investments with maturity of nine months or less to be cash equivalents. The cash deposits in U.S. financial institutions exceed the amounts insured by the U.S. government. The standard insurance amount is $250,000 per depositor, per insured bank. Non-performance by these institutions could expose the Company to losses for amounts in excess of insured balances. At September 30, 2016 and December 31, 2015, the Company’s bank balances exceeded insurances balances by $181,546 and $2,583,046, respectively. At September 30, 2016 and December 31, 2015, the Company had no cash equivalents.

Accounts receivable

Accounts receivable are carried at their estimated collectible amounts. Credit is generally extended on a short-term basis; thus, accounts receivable do not bear interest. Accounts receivable are periodically evaluated for collectability based on past credit history with customers and their current financial condition.  Balances outstanding after management has used reasonable collection efforts are written off through a charge to the valuation allowance and a credit to trade accounts receivable. Bad debt expense for the nine months ended September 30, 2016 and 2015 was $0 and $1,500, respectively.

Inventories, net

Inventories consist of parts and equipment including electronic parts and components, furniture, rubber products, plastic products and exercise equipment.  Inventory is valued at the lower of cost (first-in, first-out method) or market.  The Company capitalizes applicable direct and indirect costs incurred in the Company’s manufacturing operations to bring its products to a sellable state. For the nine months ended September 30, 2016 and 2015, the Company recorded an inventory obsolescence recovery of $0 and provision for inventory obsolescence of $49,198, respectively, which is included in cost of sales. The components of inventories were as follows:

	September 30, 2016 (unaudited)			December 31, 2015
Raw materials	$	719,943		$	303,730
Work in progress		246,700			196,092
Finished goods		721,951			621,303
Reserve for slow moving  and obsolete inventory		(497,726	)		(497,726	)
Inventories, net	$	1,190,868		$	623,399

Property and Equipment

Property and equipment are carried at cost less accumulated depreciation and amortization.  For financial reporting and income tax purposes, the costs of property and equipment are depreciated and amortized over the assets estimated useful lives, using principally the straight-line method for financial reporting purposes and an accelerated method for income tax purposes.  Costs associated with repair and maintenance of property and equipment are expensed as incurred.  Changes in circumstances, such as technological advances, changes to the Company’s business model or capital strategy could result in actual useful lives differing from the Company’s estimates.  In those cases where the Company determines that the useful life of property and equipment should be shortened, the Company would depreciate the asset over its revised remaining useful life thereby increasing depreciation expense.

9

The Company depreciates property and equipment over the following estimated useful lives:

Equipment	7-15 years
Leasehold improvements	39 years
Computers	3-5 years
Vehicles	5-7 years
Furniture and fixtures	3-5 years

The Company reviews the carrying value of property, and equipment for impairment whenever events and circumstances indicate that the carrying value of an asset may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition. In cases where undiscounted expected future cash flows are less than the carrying value, an impairment loss is recognized equal to an amount by which the carrying value exceeds the fair value of assets. The factors considered by management in performing this assessment include current operating results, trends and prospects, the manner in which the property is used, and the effects of obsolescence, demand, competition and other economic factors. Based on this assessment, no impairment expenses for property, and equipment was recorded in operating expenses during the nine months ended September 30, 2016 and 2015.

Intangible Assets

All of our intangible assets include websites and also patents that are subject to amortization and are amortized using the straight-line method over their estimated period of benefit, ranging from 3 to 5 years. We evaluate the recoverability of intangible assets periodically by taking into account events or circumstances that may warrant revised estimates of useful lives or that indicates the asset may be impaired.

Non-controlling interests

As of September 30, 2016, non-controlling interests on the consolidated financial statements represented the minority stockholders’ proportionate share of the net income/losses of the Company, an 82.35% owned subsidiary from April 2, 2015.

On August 8, 2014, the Company and its then wholly-owned subsidiary, Powin Energy Corporation (collectively “Powin”) and SF Suntech, Inc. (“Suntech”) signed a Share Subscription Agreement (“Subscription Agreement”) for an investment of $12,500,000 from Suntech. On April 1, 2015 and April 2, 2015, Powin Energy issued 1,765 shares and 378 shares of Powin Energy Common Stock to Suntech, respectively. Professional expenses of $750,000 related to the issuances were deducted from the proceeds received. After the shares issuance, the Company owns 82.35% of Powin Energy.

Non-controlling interests on the consolidated financial statements as of December 31, 2015 includes minority interest of Mexico, an 85% owned subsidiary from February 2011 to January 2016. On January 2016, the company spent $15,747 and bought the 15% minority interest in the company’s Mexico subsidiary. As of September 30, 2016, the Company owns 100% of the Mexico subsidiary.

Income taxes

Deferred tax assets and liabilities are recorded based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company calculates a provision for income taxes using the asset and liability method, under which deferred tax assets and liabilities are recognized by identifying the temporary differences arising from the different treatment of items for tax and accounting purposes. In determining the future tax consequences of events that have been recognized in the consolidated financial statements or tax returns, judgment and interpretation of statutes is required. Additionally, the Company uses tax planning strategies as a part of its tax compliance program. Judgments and interpretation of statutes are inherent in this process.

The accounting guidance for uncertainties in income tax prescribes a comprehensive model for the financial statement recognition, measurement, presentation, and disclosure of uncertain tax positions taken or expected to be taken in income tax returns. The Company recognizes a tax benefit from an uncertain tax position in the consolidated financial statements only when it is more likely than not that the position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits and a consideration of the relevant taxing authority’s widely understood administrative practices and precedents.

10

Prior to July 8, 2008, the Company had elected under the Internal Revenue Code to be taxed as an S Corporation.  In lieu of corporation income taxes, the stockholder of an S Corporation is taxed on his proportionate share of the Company’s taxable income. Due to the merger on July 8, 2008, the Company is now subject to Federal income tax.

Fair Value Measurements

The fair value accounting guidance defines fair value as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.” The definition is based on an exit price rather than an entry price, regardless of whether the entity plans to hold or sell the asset. This guidance also establishes a fair value hierarchy to prioritize inputs used in measuring fair value as follows:

• Level 1:  Observable inputs such as quoted prices in active markets;

• Level 2:  Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and

• Level 3:  Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

The carrying value of the Company’s equipment borrowing and short term line of credit borrowing at September 30, 2016 and December 31, 2015, is considered to approximate fair market value, as the interest rates of these instruments are based predominantly on variable reference rates. The carrying value of accounts receivable, trade payables and accrued liabilities approximates the fair value due to their short-term maturities.

Stock-Based Compensation

The Company measures stock-based compensation expense for all share-based awards granted to employees based on the estimated fair value of those awards at grant-date under ASC 718.  The cost of restricted stock awards is determined using the fair market value of our common stock on the date of grant.  The fair values of stock option awards are estimated using a Black-Scholes valuation model. The compensation costs are recognized net of any estimated forfeitures on a straight-line basis over the employee requisite service period. Forfeiture rates are estimated at grant-date based on historical experience and adjusted in subsequent periods for any differences in actual forfeitures from those estimates.

Recently Issued Accounting Pronouncements –Not Adopted

The FASB has issued Accounting Standards Update (ASU) No. 2014-15, Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.  ASU 2014-15 is intended to define management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosures.

Under Generally Accepted Accounting Principles (GAAP), financial statements are prepared under the presumption that the reporting organization will continue to operate as a going concern, except in limited circumstances. Financial reporting under this presumption is commonly referred to as the going concern basis of accounting. The going concern basis of accounting is critical to financial reporting because it establishes the fundamental basis for measuring and classifying assets and liabilities.

Currently, GAAP lacks guidance about management’s responsibility to evaluate whether there is substantial doubt about the organization’s ability to continue as a going concern or to provide related footnote disclosures.

This ASU provides guidance to an organization’s management, with principles and definitions that are intended to reduce diversity in the timing and content of disclosures that are commonly provided by organizations today in the financial statement footnotes.

The amendments are effective for annual periods ending after December 15, 2016, and interim periods within annual periods beginning after December 15, 2016. Early application is permitted for annual or interim reporting periods for which the financial statements have not previously been issued.

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The FASB and IASB (the Boards) have issued converged standards on revenue recognition. Specifically, the Boards have issued the following documents:

• FASB Accounting Standards Update (ASU) No. 2014-09,  Revenue from Contracts with Customers: Topic 606  ; and

• IFRS 15,  Revenue from Contracts with Customers.

The issuance of these documents completes the joint effort by the Boards to improve financial reporting by creating common revenue recognition guidance for U.S. GAAP and IFRS.

ASU 2014-09 affects any entity using U.S. GAAP that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards (e.g., insurance contracts or lease contracts). This ASU will supersede the revenue recognition requirements in Topic 605,  Revenue Recognition,  and most industry-specific guidance. This ASU also supersedes some cost guidance included in Subtopic 605-35,  Revenue Recognition—Construction-Type and Production-Type Contracts.  In addition, the existing requirements for the recognition of a gain or loss on the transfer of nonfinancial assets that are not in a contract with a customer (e.g., assets within the scope of Topic 360,  Property, Plant, and Equipment,  and intangible assets within the scope of Topic 350,  Intangibles—Goodwill and Other)  are amended to be consistent with the guidance on recognition and measurement (including the constraint on revenue) in this ASU.

The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps:

• Step 1: Identify the contract(s) with a customer.

• Step 2: Identify the performance obligations in the contract.

• Step 3: Determine the transaction price.

• Step 4: Allocate the transaction price to the performance obligations in the contract.

• Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation.

For a public entity, the amendments in this ASU are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted.

Segment reporting

ASC 280, Segment Reporting, formerly known as Statement of Financial Accounting Standards No. 131, Disclosure about Segments of an Enterprise and Related Information, requires use of the “management approach” model for segment reporting. Under this model, segment reporting is consistent with the manner that the Company’s management organizes segments within the company for making operating decisions and assessing performance. Reportable segments are based on products and services, geography, legal structure, management structure or any other manner in which management disaggregates a company.

A description of our operating segments as of September 30, 2016 and December 31, 2015, follows.

Contract manufacturing (formerly OEM):

Outsourced manufacturing for North American companies, including senior citizen safety products; steel gun safes; outdoor cooking equipment; trampolines; plastic products and small electronic appliances. Contract manufacturing also offers logistic services and a qualified engineer team to support and provide in-house design.

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Manufacturing (formerly QBF):

Our manufacturing segment, Powin Manufacturing formerly named Quality Bending and Fabrication (“QBF”), manufactures various truck parts and components primarily for Freightliner Trucks, a division of Daimler Trucks North America, the largest manufacturer of heavy-duty vehicles in North America. Daimler Trucks North America designs, builds and markets a wide range of Class 3-8 vehicles including long-haul highway tractors, heavy-duty construction and vocational trucks, mid-range trucks for distribution and service, school and transit buses, fire and emergency service apparatus, and chassis for step vans, school and shuttle buses, and motor homes.  Freightliner Trucks is headquartered in Portland, Oregon, with truck manufacturing facilities located in Portland and throughout the United States and Mexico.

Manufacturing is completed at the Company’s leased facility in Tualatin, Oregon as well as arranging the outsourced manufacturing at a third-party factory in Qingdao, China.

Energy:

Powin Energy has developed market leading architecture that utilizes proprietary patent-pending energy storage technology for scalable grid energy storage systems, power supply units for electric vehicles, and transportation applications. Through December 31, 2014, the Energy segment has focused on identifying target markets and applications and finalizing the development of products to serve those markets and applications. In 2015, The Company has continued to develop products and marketing strategies for this operating entity.

Product & Service (formerly Channel Partner Program, Warehousing and Wooden)

The Product & Service segment contains the legacy operations of Channel Partner Program, a distribution channel for North American companies to sell their products in China as well as selling certain consumer products through U.S.-based retailers and marketplaces, including online; and Warehousing, which provides warehousing services in support of the Company’s customers across all segments. On January 1, 2015, the Product & Service segment had been incorporated into our contract manufacturing segment.

Powin Mexico:

Powin Mexico is a manufacturing segment, currently manufacturing gun safes, but also capable of manufacturing heavy truck parts. Operations began in 2013.

Note 2: Going concern

The Company sustained net loss attributable to Powin Corporation of $4,195,861 and $3,693,206 during the nine months ended September 30, 2016 and 2015. The Company has accumulated deficit of $26,256,731 as of September 30, 2016. The Company’s continuation as a going concern is dependent on its ability to generate sufficient cash flows from operations to meet its obligations and/or obtain additional financing, as may be required.

The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern; however, the above condition raises substantial doubt about the Company’s ability to do so. The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result should the Company be unable to continue as a going concern.

In recent months, the Company has taken significant steps toward restoration of operating profits and financial stability. Cost cutting measures, including reductions to staff, have been implemented within the Contract Manufacturing and Manufacturing segments. The Mexican segment is working on getting additional sales volume with several US manufacturers and distributors of commercial safes. As discussed in Notes 13 & 14 the Company is selling all non-Powin Energy related operations to focus exclusively on the Company’s energy segment.

Note 3: Notes and other receivables

Notes and other receivables consist of the following:

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	September 30,2016 (unaudited)		December 31,2015
VAT receivable, Mexico	$	-	$	-
Notes receivable from third parties		-		-
Other		-		883
Reserve for uncollectible VAT receivable		-		-
Notes and other receivables, net	$	-	$	883

The Company has fully reserved for its Mexico VAT tax receivable as there is no expectation of collection.

Note 4: Property and equipment, net

The components of property and equipment were as follows: 

	September 30, 2016 (unaudited)			December 31, 2015
Equipment	$	50,385		$	50,385
Leasehold improvements		92,131			92,131
Computers		99,365			38,338
Vehicles		32,983			32,983
Furniture and fixtures		-			-
		274,864			213,837
Accumulation depreciation		(79,276	)		(54,330	)
Property and equipment - net	$	195,588		$	159,507

For the nine months ended September 30, 2016 and 2015, depreciation of property and equipment amounted $24,946 and $18,061, respectively. For the three months ended September 30, 2016 and 2015, depreciation of property and equipment amounted $9,640 and $6,021, respectively.

Note 5: Loss per share

Basic loss per share is based on the weighted-average effect of all common shares issued and outstanding, and is calculated by dividing net loss by the weighted-average shares outstanding during the year.  Diluted loss per share is calculated by dividing net income by the weighted-average number of common shares used in the basic loss per share calculation plus the number of common shares that would be issued assuming exercise or conversion of all potentially dilutive common shares outstanding. The Company excludes equity instruments from the calculation of diluted earnings per share if the effect of including such instruments is antidilutive. 

The components of basic and diluted loss per share are as follows:

	For the three months ended September 30,						For the nine months ended September 30,
	2016 (Unaudited)			2015 (Unaudited)			2016 (Unaudited)			2015 (Unaudited)
Net loss attributable to Powin Corporation(A)		(1,808,955	)		(1,438,344	)		(4,195,861	)		(3,693,206	)
Less preferred share dividends		-			-			(61,800	)		(55,000	)
Net loss available to Powin Corporation (B)		(1,808,955	)		(1,438,344	)		(4,257,661	)		(3,748,206	)
Weighted average outstanding shares of  common stock (C)		23,853,422			16,249,839			18,807,783			16,246,850
Dilutive effect of securities		-			-			-			-
Common stock and common stock equivalents (D)		23,853,422			16,249,839			18,807,783			16,246,850
Loss per share
Basic (B/D)	$	(0.08	)	$	(0.09	)	$	(0.22	)	$	(0.23	)
Diluted (B/D)	$	(0.08	)	$	(0.09	)	$	(0.22	)	$	(0.23	)

14

The Company has 10,855 and 10,237 shares of outstanding Series A preferred stock as of September 30, 2016 and December 31, 2015, respectively. These Series A share has par value of $100 and is convertible at 1 to 20 rate. The Company has 0 and 13,625,826 shares of outstanding August 2015 preferred stock as of September 30, 2016 and December 31, 2015, respectively. These August 2015 share has par value of $0.56 and is convertible at 1 to 1 rate. In August 2016, 13,625,826 shares of August 2015 preferred stock had converted into common stock.

On June 15, 2011, the Company granted awards in the form of incentive stock options to its key employees for 117,000 shares of common stock.  There were no stock options granted in 2012. On August 6, 2013, the Company granted another 164,000 stock options under the same plan to all employees. The Company has 135,000 and 158,000 shares of outstanding stock options as of September 30, 2016 and December 31, 2015, respectively.

On April 15, 2013, The Company issued a Warrant to Purchase Common Stock to Global Storage Group, LLC for 70,000 shares of the Company’s common stock at an exercise price of $25.00; and a Warrant to Purchase Common Stock to Virgil L. Beast on for 30,000 shares of the Company’s common Stock at an exercise price of $25.00. The exercise period of each Warrant is 60 months from the date of issuance and may be exercised in whole or in part at any time prior to April 15, 2018. As of September 30, 2016 and December 31, 2015, all 100,000 warrants remain outstanding.

The following sets forth the number of shares of common stock underlying if all outstanding options, warrants, and convertible debt were converted as of September 30, 2016 and December 31, 2015:

	September 30, 2016 (unaudited)		December 31, 2015
Series A preferred stock		217,100		204,740
Warrants		100,000		100,000
Stock options		135,000		158,000
August 2015 preferred stock		-		13,625,826
		452,100		14,088,566

For the nine months ended September 30, 2016 and 2015, the effect of warrants, stock options and convertible preferred stock and preferred stock dividends are excluded from loss per share because their impact is considered to be anti-dilutive.

Note 6: Notes Payable and Long Term Debt

The total carrying value of notes payable and long-term debt, including current and long-term portions, was as follows:

	September 30, 2016 (unaudited)				December 31, 2015
	Current		Non Current		Current		Non Current
Equipment loan starting December 18, 2012, due January 1, 2017, with 3.05% interest rate, with  no collateral	$	-	$	-	$	19,271	$	-
Loan from a third party, starting July 5, 2016, due July 4, 2017, with 6% interest  rate, with no collateral		1,484,118		-		-		-
Accrued interest		21,468		-		-		-
Total long-term debt, including current portion and accrued interest	$	1,505,586	$	-	$	19,271	$	-

Interest expenses related to notes payables and long-term debt amounted to $21,634 and $233,074for the nine months ended September 30, 2016 and 2015, respectively. Interest expenses related to notes payables and long-term debt amounted to $21,463 and $18,601 for the three months ended September 30, 2016 and 2015, respectively.

15

On July 5, 2016, the Company’s subsidiary, Powin Energy Corporation issued an unsecured promissory note in the amount of $1,484,118 to 3U (HK) Trading Co. Limited. The note is due on or before July 4, 2017 and accrues interest at 6% per annum.

During the year ended December 31, 2015, the Company issued its preferred stock designed as “August 2015 Preferred Stock”, in satisfaction of certain notes payable (Note 8).There was no gain or loss related to the issuance of the preferred stock.

Note 7: Commitments

Operating Leases

The Company leases a facility from Lu Pacific Properties, LLC(“Lu Pacific)(formerly, Powin Pacific Properties, LLC, a company owned by Joseph Lu, the Company’s largest shareholder, Chairman of the Board and CEO, which serves as the Company’s corporate headquarters as well as the base of all operations, except Q Pacific Manufacturing and Powin Mexico. This lease is through September 30, 2021 and requires the Company to pay for all property taxes, utilities and facility maintenance.

Effective January 1, 2016, the Company entered into a lease amendment. The Company’s subsidiary, Powin Energy leased 35,048 square feet of the building. The new lease term is through September 30, 2021 and all property taxes, utilities and facility maintenance were charge at $0.15 per square foot per month by Lu Pacific Properties, LLC. The monthly rental expense is $18,303.

Effective January 1, 2016, the Company’s affiliate, Q Pacific Contract Manufacturing, entered into a lease agreement. The Company leased 9,500 square feet of the building. The lease term is through September 30, 2021.This lease required the Company to pay for all property taxes, utilities and facility maintenance (“fees”). The monthly rental expense and fees is $5,518.

The Company leased a facility to Q Pacific Manufacturing, which is owned by Lu Pacific Properties, LLC, which lease expired on October 31, 2014 and which was extended to October 31, 2019.  This lease required the Company to pay for all property taxes, utilities and facility maintenance. The monthly rental expense is $15,594.

The Powin Mexico leases a manufacturing facility owned by Lu Pacific Properties, LLC in Saltillo Coahuila Mexico. This lease is through May 31, 2021 and requires the Company to pay for all property taxes, utilities and facility maintenance. The monthly rental expense is $12,133.

Minimum future lease payments under non-cancelable operating leases are as follows:

Year ending September 30,
2017	$	282,722
2018		282,722
2019		282,722
2020		282,722
2021		212,042
Thereafter		-
Total	$	1,342,930

For the nine months ended September 30, 2016 and 2015, total lease expense paid for all operating rents and leases was $212,042 and $316,620, respectively. For the three months ended September 30, 2016 and 2015, total lease expense paid for all operating rents and leases was $70,681 and $105,540, respectively. These leases are also disclosed in Note 10, related party transactions.

Note 8:  Capital stock

The Company has two classes of preferred stock and one class of common stock. The Series A Preferred Stock has a $100 face value per share with a conversion rate of one (1) share of Preferred Stock for twenty (20) shares of Common Stock. The 2015 August Preferred Stock carries a par value of $0.56 per shares and is convertible into Common Stock at the rate of 1for1.

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Preferred Stock

The Series A Preferred Stock is convertible at a rate of one (1) preferred share to twenty (20) shares of Powin Corporation common stock. The Series A Preferred Stock calls for dividends of 12%, declared semi-annually, and paid in additional Series A Preferred Stock. In 2016 and 2015, we issued 618 and 1,135shares of Series A Preferred Stock as dividends respectively, increasing the Series A Preferred Stock by $61,800 and $113,500 and decreasing additional paid in capital. As of September 30, 2016 and December 31, 2015, there are 1,085,500 and 1,023,700 shares of Series A Preferred Stock outstanding, respectively.

Common Stock

For the three months ended March 31, 2015 the Company issued 3,000 shares of common stock to six members of its Board of Directors as compensation for their services based on the fair value of the shares valued at $1.95 per share for their service. The value of these shares is $5,850.  For the three months ended June 30, 2015 the Company issued 3,000 shares of common stock to six members of its Board of Directors as compensation for their services based on the fair value of the shares valued at $0.56 per share for their service. The value of these shares is $1,680. For the three months ended September 30, 2015 the Company issued 3,000 shares of common stock to six members of its Board of Directors as compensation for their services based on the fair value of the shares valued at $0.90 per share for their service. The value of these shares is $2.700. For the three months ended December 31, 2015 the Company issued 3,000 shares of common stock to six members of its Board of Directors as compensation for their services based on the fair value of the shares valued at $0.65 per share for their service. The value of these shares is $1,980.

For the three months ended June 30, 2016 the Company issued 6,000 shares of common stock to the six members of its Board of Directors as compensation for their services based on the fair value of the shares valued at $0.30 per share.

On September 6, 2016, the Company issued 89,961 shares to Quidnick Energy Development, LLC as compensation for consulting services.

The Company issued its August 2015 Preferred Stock (“Preferred Stock”)  in August 2015 in satisfaction of the notes payable described in the table below. The holders of the Preferred Stock do not have a dividend preference over the Company’s common stock and have the same voting rights as the holders of common stock. The Preferred Stock is convertible into the Company’s common stock at the rate of one (1) share of Preferred Stock for one (1) share of common stock. The holders of the Preferred Stock are entitled to a liquidation preference over the holders of common stock equal to $0.56 per share. The full rights, preferences and privileges of the Preferred Stock are set forth in the Certificate of Designation which was filed in the 8K report on August 6, 2015. In August 2016, 13,625,826 shares of August 2015 preferred stock had converted into common stock.

Lender	Borrower	Amount	Number of Shares of Preferred Stock
3U Trading Co., Limited	Powin Corporation	$2,451,195	4,377,133
3U Trading Co., Limited	Powin Industries S.A. DE C.V.	$211,474	377,631
Joseph Lu	Powin Corporation	$3,333,091	5,951,947
Danny Lu	Powin Corporation	$560,565	1,001,009
Peter Lu	Powin Corporation	$560,565	1,001,009
Lu Pacific Properties, LLC	Powin Corporation	$513,574	917,097
Total		$7,630,464	13,625,826

In addition, on April 15, 2013, the Company issued a Warrant to Purchase Common Stock to Global Storage Group, LLC for 70,000 shares of the Company’s common stock at an exercise price of $25.00; and a Warrant to Purchase Common Stock to Virgil L. Beast on for 30,000 shares of the Company’s common Stock at an exercise price of $25.00. The exercise period of each Warrant is 60 months from the date of issuance and may be exercised in whole or in part at any time prior to April 15, 2018. As of September 30, 2016 and December 31, 2015, all 100,000 warrants remain outstanding.

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					Average
			Weighted		Remaining
			average exercise		Contractual Life		Aggregate
	Warrants		price		(Years)		Intrinsic Value
Outstanding at December 31, 2015		100,000	$	25		2.4	$	-
Exercisable at December 31, 2015		100,000	$	25		2.4	$	-
Warrants granted		-		-		-		-
Warrants exercised		-		-		-		-
Warrants forfeited		-		-		-		-
Outstanding at September 30, 2016		100,000	$	25		1.65	$	-
Exercisable at September 30, 2016		100,000	$	25		1.65	$	-

Note 9: Stock options
 

In February 2011, the Company’s Board of Directors approved the adoption of the Powin Corporation 2011 Stock Option Plan (“the Plan”) and submitted its ratification to the shareholders at the shareholders’ meeting held June 15, 2011, where the shareholders approved the Plan.

The Company records stock-based compensation expense related to stock options and the stock incentive plan in accordance with ASC 718, “Compensation – Stock Compensation”.

On June 15, 2011, the Company granted awards in the form of incentive stock options to its key employees for 1,170,000 shares of common stock.  There were no stock options granted in 2012. On August 6, 2013, the Company granted another 1,640,000 stock options under the same plan to all employees. Awards are granted with an exercise price that approximates the market price of the Company’s common stock at the date of grant. The 2013 grant included immediate vesting of 20% of the options resulting in greater expense recognized than in previous years.

The fair value of each option award is estimated on the date of grant using the Black-Scholes option valuation model using. The following assumptions were used to determine the fair value of the options at date of original issuance on August 6, 2013:

Dividend Yield	0	%
Expected volatility	161.80	%
Risk-free interest rate	1.39	%
Term in years	9.92

The Company has never paid a cash dividend and does not intend to pay cash dividends in the foreseeable future, so the dividend yield used in the calculation is 0%.The expected volatility is based on the daily historical volatility of comparative companies, measured over the expected term of the option.  The risk-free rate is based on the implied yield on a United States Treasury zero-coupon issue with a remaining term closest to the expected term of the option. The term of the option is the expiration as there is no ready market for employees to exercise and sell shares and to date no option has been exercised on the 2011 plan.

A summary of option activity as is presented below:

							Average
				Weighted			Remaining
				average exercise			Contractual Life		Aggregate
	Options			price			(Years)		Intrinsic Value
Outstanding at December 31, 2015		158,000			$	5.8		5.84		$	312,000
Exercisable at December 31, 2015		99,095			$	6.8		5.05		$	149,931
Options granted		-				-		-			-
Options exercised		-				-		-			-
Options forfeited		(23,000	)			5.8		-			-
Outstanding at September 30, 2016		135,000			$	5.8		5.09		$	-
Exercisable at September 30, 2016		104,878			$	6.6		4.46		$	-

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Stock option expense included in operating expense for the nine months ended September 30, 2016 and 2015 is $55,060 and $127,737, respectively. Stock option expense included in operating expense for the three months ended September 30, 2016 and 2015 is $34,436 and $41,062, respectively. As of September 30, 2016 and December 31, 2015, remaining unvested stock expenses amounted to $92,604 and $225,017, respectively.

Note 10:  Related party transactions

Rent From Related Parties

All of the Company’s facilities are owned by Lu Pacific Properties, LLC, an Oregon limited liability company, controlled by Joseph Lu (“Mr. Lu”), CEO and Chairman of the Board. Rent expenses were $212,042 and $316,620 for the nine months ended September 30, 2016 and 2015, respectively. Rent expenses were $70,681 and $105,540 for the three months ended September 30, 2016 and 2015, respectively. Rental rates are deemed to be and were derived by local market rates for the rents when the contracts were entered.

Purchase from Related Parties

Mr. Lu’s son, Danny Lu, owns 49% of Yangzhou Finway Energy Tech Co. since May 2016. The Company made purchase from Yangzhou Finway Energy Tech Co. in the amount of $171,417 and $0for the nine months ended September 30, 2016 and 2015, respectively. Amounts due to Yangzhou Finway Energy Tech Co. amounted to $174,003 and $43,156 at September 30, 2016 and December 31, 2015, respectively.

The Company made purchases from Quailhurst Vineyard Estates, an Oregon company, controlled by Joseph Lu in the amount of $8,529 and $0 for the nine months ended September 30, 2016 and 2015, respectively. Amounts due to Quailhurst Vineyard Estates amounted to $3,332 and $0 at September 30, 2016 and December 31, 2015, respectively.

Note 11:  Business segment reporting

Basis for Presentation

Our operating businesses are organized based on the nature of markets and customers. Segment accounting policies are the same as described in Note 1.

Effects of transactions between related companies are eliminated and consist primarily of inter-company transactions and transfers of cash or cash equivalents from corporate to support each business segment’s payroll, inventory sourcing and overall operations when each segment has working capital requirements. Corporate overhead costs are allocated to segments based on management’s estimates of the consumption of such services by each segment.

A description of our operating segments as of September 30, 2016 and December 31, 2015, follows.

Contract manufacturing (formerly OEM):

Outsourced manufacturing for North American companies, including senior citizen safety products; steel gun safes; outdoor cooking equipment; trampolines; plastic products and small electronic appliances. Contract manufacturing also offers logistic services and a qualified engineer team to support and provide in-house design.

Manufacturing (formerly QBF):

Our manufacturing segment, Powin Manufacturing formerly named Quality Bending and Fabrication (“QBF”), manufactures various truck parts and components primarily for Freightliner Trucks, a division of Daimler Trucks North America, the largest manufacturer of heavy-duty vehicles in North America. Daimler Trucks North America designs, builds and markets a wide range of Class 3-8 vehicles including long-haul highway tractors, heavy-duty construction and vocational trucks, mid-range trucks for distribution and service, school and transit buses, fire and emergency service apparatus, and chassis for step vans, school and shuttle buses, and motor homes.  Freightliner Trucks is headquartered in Portland, Oregon, with truck manufacturing facilities located in Portland and throughout the United States and Mexico.

19

Manufacturing is completed at the Company’s leased facility in Tualatin, Oregon as well as arranging the outsourced manufacturing at a third-party factory in Qingdao, China.

Energy:

Powin Energy has developed market leading architecture that utilizes proprietary patent-pending energy storage technology for scalable grid energy storage systems, power supply units for electric vehicles, and transportation applications. Through December 31, 2014, the Energy segment has focused on identifying target markets and applications and finalizing the development of products to serve those markets and applications. In 2015, The Company has continued to develop products and marketing strategies for this operating entity.

Product & Service (formerly Channel Partner Program, Warehousing and Wooden)

The Product & Service segment contains the legacy operations of Channel Partner Program, a distribution channel for North American companies to sell their products in China as well as selling certain consumer products through U.S.-based retailers and marketplaces, including online; and Warehousing, which provides warehousing services in support of the Company’s customers across all segments. On January 1, 2015, the Product & Service segment had been incorporated into our contract manufacturing segment.

Powin Mexico:

Powin Mexico is a manufacturing segment, currently manufacturing gun safes, but also capable of manufacturing heavy truck parts. Operations began in 2013.

Effective October 3, 2016(see Note13&14), the Company entered into a Stock Purchase Agreement with Powin Industries, SA de CV (“Powin Mexico”) and Rolland Holding Company, LLC (“Rolland”)pursuant to which   Company sold to Rolland 99 shares of  the Series A Common Stock and the 167,452 shares of the Series B Common Stock of  Powin Mexico  which represents 99% of the Series A Common Stock and 100% of the Series B Common Stock (collectively the “Shares”) of  Powin Mexico.  The closing date of the Agreement was October 4, 2016 (“Closing”).The purchase price for the Shares was $999,000. At Closing, Rolland made a cash payment of $99,000 and delivered to the Company (i) its promissory note in the  principal amount $100,000 bearing interest at 4% per annum with principal and interest payable in twelve (12) equal monthly installments (“Short Term Note”); and (ii) its promissory note in the principal amount of $800,000 bearing interest at 5% per annum with principal and interest payable in ninety-six (96) equal monthly installments (“Long Term Note”). The interest rate on the Long Term Note will be renegotiated if and when the Prime Rate for the U.S reaches 5%.In addition, Powin Mexico delivered to the Company a non-interest bearing promissory note in the amount of $125,000 (“Powin Mexico Note”) which calls for four (4) equal monthly installments of $31,250 on each of December 31, 2017, December 31, 2018, December 31, 2019 and December 31, 2020. The Powin Mexico Note represents a compromised amount representing the difference between the amount of the Powin Mexico accounts receivable and the amount of the Powin Mexico accounts payable owing to the Company.The Purchase Agreement contains customary warranties and representation.  Amounts due under the Short Term Note, the Long Term Note and the Powin Mexico Note, respectively,  may be accelerated upon a failure to pay amounts due thereunder when due, unless waived or cured. As a consequence of the Purchase Agreement, Powin Mexico ceased being a subsidiary of Powin Corporation.

Effective October 18, 2016(see Note13&14), the Company entered into a Stock Purchase Agreement with Weiping Cai (“Cai”) pursuant to which the Company sold to Cai all of the issued and outstanding shares of Common Stock (“Shares”) of   Q Pacific Corporation, the Company’s wholly-owned subsidiary, which wholly-owns and operates Q Pacific Contract Manufacturing and Q Pacific Manufacturing Corporation, the Company’s second tier subsidiaries, collectively referred to as (“QPM”). In addition to the sale of the Shares, the Company also transferred and assigned to Cai all of the Company’s right, title and interest in and to the “Huntsman” tradename held by Q Pacific Contract Manufacturing Corporation.

Revenues and net loss before income taxes of each of the Company’s segments are as follows:  

	Nine months ended September 30,
	2016 (unaudited)		2015 (unaudited)
Revenue
Energy		33,243		127,638
Consolidated	$	33,243	$	127,638

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	Three months ended September 30,
	2016 (unaudited)		2015 (unaudited)
Revenue
Energy		11,847		40,979
Consolidated	$	11,847	$	40,979

	Nine months ended September 30,
	2016 (unaudited)			2015 (unaudited)
(Loss) before income taxes
Energy		(2,969,105	)		(3,639,139	)
Corporate		(19,488	)		110,514
Consolidated	$	(2,988,593	)	$	(3,528,625	)

	Three months ended September 30,
	2016 (unaudited)			2015 (unaudited)
(Loss) before income taxes
Energy		(986,558	)		(1,266,330	)
Corporate		(26,990	)		(7,042	)
Consolidated	$	(1,013,548	)	$	(1,273,372	)

Note 12: Non-Controlling Interest

On August 8, 2014, Powin Corporation and its wholly-owned subsidiary, Powin Energy Corporation (collectively “Powin”) and SF Suntech, Inc. (“Suntech”) signed a Share Subscription Agreement (“Subscription Agreement”) for an investment of $25,000,000 from Suntech. Suntech is a third party.

Effective April 2, 2015, Powin and Suntech signed the Fourth Supplemental Agreement (“Supplement”).Under the Supplement, the First Closing Date of the Subscription Agreement was April 2, 2015 (“First Closing”) at which time Suntech made a payment to Powin in the amount of $7,450,000. That payment plus the previous payments of $3,000,000 on August 29, 2014; $2,000,000 on January 15, 2015 and $50,000 on March 2, 2015 represent a total $12,500,000 paid toward the full $25,000,000 owing under the Subscription Agreement.  On April 1, 2015 and April 2, 2015, Powin Energy issued 1,765 shares and 378 shares of Powin Energy Common Stock to Suntech, respectively for $12,500,000 received. Professional expenses of $750,000 were recorded as deduction of the cash received.

Per ASC 810-10-45-22, Powin Corporation’s ownership interest in Powin Energy has changed as Powin Corporation sold 2,143 shares (approximately 17.65% of outstanding shares after the sales of 2,143 shares) of Powin Energy’s common shares to Suntech. After this transaction, Powin Corporation's ownership interest in Powin Energy is 82.35%. Since, Powin Corporation retained its controlling financial interest in Powin Energy after the shares issuance for cash to Suntech; the sale of the subsidiary shares was accounted for as an equity transaction in accordance with ASC 810-10-45-23. Specifically, the proceeds received from the sale $12,500,000 offset by professional expenses of $750,000 are reflected as an increase to additional paid in capital and the net asset value associated with this sold interest $1,552,272 was reclassified from additional paid in capital to no controlling interests. 

The Supplement further established the Second Closing Date of the Subscription Agreement as May 31, 2015 (“Second Closing”) when the balance of $12,500,000 was to be paid. If that payment was made, Powin would issue to Suntech an additional 2,143 shares of Powin Energy Common Stock.  In the event Suntech was unable or unwilling to pay the remaining subscription balance, Powin would be free to sell the 2,143 shares to another purchaser for the same price per share as paid by Suntech. Suntech failed to make the required payment on May 31, 2015. Accordingly, the Company elected to terminate the Subscription Agreement, as it pertained to the remaining $12,500,000 owing thereunder.

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On January 2016, the company paid $15,747 and bought the 15% interest in the company’s Mexico subsidiary. The Company now owns 100% of the Mexico subsidiary. As of the purchase date, the non-controlling interest of Mexico amounted to $802,577. The difference of purchase price and balance of non-controlling interest is booked as additional paid in capital.

Note 13: Discontinued Operations

Effective October 3, 2016(see Note 14- “Subsequent events”), the Company entered into a Stock Purchase Agreement with Powin Industries, SA de CV (“Powin Mexico”) and Rolland Holding Company, LLC (“Rolland”)pursuant to which the Company sold to Rolland 99 shares of  the Series A Common Stock and the 167,452 shares of the Series B Common Stock of  Powin Mexico  which represents 99% of the Series A Common Stock and 100% of the Series B Common Stock (collectively the “Shares”) of  Powin Mexico.  The closing date of the Agreement was October 4, 2016 (“Closing”).

Effective October 18, 2016(see Note 14 - “Subsequent events”), the Company entered into a Stock Purchase Agreement with Weiping Cai (“Cai”) pursuant  to which the Company sold to Cai all of the issued and outstanding shares of  Common Stock (“Shares”) of   Q Pacific Corporation, the Company’s wholly-owned subsidiary, which wholly-owns and operates Q Pacific Contract Manufacturing and Q Pacific Manufacturing Corporation, the Company’s second tier subsidiaries, collectively referred to as (“QPM”). In addition to the sale of the Shares, the Company also transferred and assigned to Cai all of the Company’s right, title and interest in and to the “Huntsman” tradename held by Q Pacific Contract Manufacturing Corporation.

The Company’s results of operations related to Powin Mexico and Q Pacific Corporation which wholly-owns and operates Q Pacific Contract Manufacturing and Q Pacific Manufacturing Corporation have been reclassified as discontinued operations on a retrospective basis for all periods presented.

Balances for Powin Mexico and Q Pacific Corporation as of September 30, 2016 and December 31, 2015 are as follows:

	September 30, 2016		December 31, 2015
Assets held for sale - current	$	3,055,639	$	4,317,419
Assets held for sale- noncurrent		850,491		1,077,143
Liabilities held for sale - current		1,915,443		1,682,603

The operating results of Powin Mexico and Q Pacific Corporation for the nine months ending September 30, 2016 and 2015 classified as discontinued operations are summarized below:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2016			2015			2016			2015
Sales	$	2,246,978		$	2,499,630		$	7,135,534		$	8,267,937
Cost of Goods Sold		1,917,861			2,234,723			6,121,675			7,063,565
Gross Profit		329,117			264,907			1,013,859			1,204,372
Operating Expenses		1,380,366			691,597			2,831,687			2,128,840
Other Income (Expense)		85,583			(4,105	)		97,921			(17,447	)
Income Tax Expense		-			-			-			-
Net loss from discontinued operations	$	(965,666	)	$	(430,795	)	$	(1,719,907	)	$	(941,915	)

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Note 14: Subsequent events

Effective October 3, 2016, the Company entered into a Stock Purchase Agreement with Powin Industries, SA de CV (“Powin Mexico”) and Rolland Holding Company, LLC (“Rolland”) pursuant to which the Company sold to Rolland 99 shares of the Series A Common Stock and the 167,452 shares of the Series B Common Stock of Powin Mexico which represents 99% of the Series A Common Stock and 100% of the Series B Common Stock (collectively the “Shares”) of Powin Mexico. The closing date of the Agreement was October 4, 2016 (“Closing”).The purchase price for the Shares was $999,000. At Closing, Rolland made a cash payment of $99,000 and delivered to the Company (i) its promissory note in the principal amount $100,000 bearing interest at 4% per annum with principal and interest payable in twelve (12) equal monthly installments (“Short Term Note”); and (ii) its promissory note in the principal amount of $800,000 bearing interest at 5% per annum with principal and interest payable in ninety-six (96) equal monthly installments (“Long Term Note”). The interest rate on the Long Term Note will be renegotiated if and when the Prime Rate for the U.S reaches 5%. In addition, Powin Mexico delivered to the Company a non-interest bearing promissory note in the amount of $125,000 (“Powin Mexico Note”) which calls for four (4) equal monthly installments of $31,250 on each of December 31, 2017, December 31, 2018, December 31, 2019 and December 31, 2020. The Powin Mexico Note represents a compromised amount representing the difference between the amount of the Powin Mexico accounts receivable and the amount of the Powin Mexico accounts payable owing to the Company. The Purchase Agreement contains customary warranties and representation.  Amounts due under the Short Term Note, the Long Term Note and the Powin Mexico Note, respectively,  may be accelerated upon a failure to pay amounts due thereunder when due, unless waived or cured. As a consequence of the Purchase Agreement, Powin Mexico ceased being a subsidiary of Powin Corporation.

Effective October 18, 2016, the Company entered into a Stock Purchase Agreement with Weiping Cai (“Cai”) pursuant to which the Company sold to Cai all of the issued and outstanding shares of Common Stock (“Shares”) of Q Pacific Corporation, the Company’s wholly-owned subsidiary, which wholly-owns and operates Q Pacific Contract Manufacturing and Q Pacific Manufacturing Corporation, the Company’s second tier subsidiaries, collectively referred to as (“QPM”). In addition to the sale of the Shares, the Company also transferred and assigned to Cai the Company’s right, title and interest in and to the “Huntsman” tradename held by Q Pacific Contract Manufacturing Corporation.

On October 6, 2016, the merger between Powin Corporation and Powin Energy Corporation became effective, pursuant to a First Amended and Restated Agreement and Plan of Merger and Liquidation dated, (the "Merger Agreement"). Powin Corporation is the surviving entity with a name change to Powin Energy Corporation and will continue to be traded under the stock symbol PWON.

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Note Regarding Forward Looking Statements

This information should be read in conjunction with the audited consolidated financial statements and notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the year ended December 31, 2015 as filed with the Securities and Exchange Commission on April 4, 2016, and the unaudited condensed interim consolidated financial statements and notes thereto included in this Quarterly Report.

References to “Powin,” the “Company,” “we,” “our” and “us” refer to Powin Corporation and its wholly owned and majority-owned subsidiaries, unless the context specifically states otherwise.

Basis of presentation

Effective October1, 2015, the Company reorganized and renamed certain segments and changed the methodology for allocating corporate overhead costs. The below table lists legal entities and corresponding business segments as defined in the 10-Q compared to those described in previous filings.

As described in this Form 10Q and 2015 Form 10K		As described in previously filings
Legal entity name	Business  segment name	Legal entity name	Business  segment name
Powin Corporation	Holding company	Powin Corporation	Holding company
Q Pacific Contract Manufacturing Corporation	Contract manufacturing	Powin Contract Manufacturing Corporation	Contract manufacturing
Q Pacific Manufacturing Corporation	Manufacturing	Powin Manufacturing Corporation	Manufacturing
Powin Energy Corporation	Energy	Powin Energy Corporation	Energy
Powin Industries S.A. de C.V.	Mexico	Powin Industries S.A. de C.V.	Mexico
Powin Product  Service, Inc.	Contract Manufacturing	Powin Product service, Inc.	Warehousing(a)

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(a) Effective January 1, 2014, the business segments formerly known as Warehousing and CPP were combined into a legal entity that was renamed Powin Product and Service Corporation. Effective January 1, 2015, the Powin Product and Service Corporation was merged into Contract Manufacturing.

Discontinued operations

Effective October 3, 2016, the Company entered into a Stock Purchase Agreement with Powin Industries, SA de CV (“Powin Mexico”) and Rolland Holding Company, LLC (“Rolland”) pursuant to which Company sold to Rolland 99 shares of the Series A Common Stock and the 167,452 shares of the Series B Common Stock of Powin Mexico which represents 99% of the Series A Common Stock and 100% of the Series B Common Stock (collectively the “Shares”) of Powin Mexico. The closing date of the Agreement was October 4, 2016 (“Closing”).

Effective October 18, 2016, the Company entered into a Stock Purchase Agreement with Weiping Cai (“Cai”) pursuant to which the Company sold to Cai all of the issued and outstanding shares of Common Stock (“Shares”) of Q Pacific Corporation, the Company’s wholly-owned subsidiary, which wholly-owns and operates Q Pacific Contract Manufacturing and Q Pacific Manufacturing Corporation, the Company’s second tier subsidiaries, collectively referred to as (“QPM”). In addition to the sale of the Shares, the Company also transferred and assigned to Cai the Company’s right, title and interest in and to the “Huntsman” tradename held by Q Pacific Contract Manufacturing Corporation.

The Company’s results of operations related to Powin Mexico and Q Pacific Corporation which wholly-owns and operates Q Pacific Contract Manufacturing and Q Pacific Manufacturing Corporation have been reclassified to discontinued operations on a retrospective basis for all periods presented.

Balances for Powin Mexico and Q Pacific Corporation as of September 30, 2016 and December 31, 2015 are as follows:

	September 30,		December 31,
	2016		2015
Cash	$	625,651		$	694,646
Accounts receivable, net		1,181,239			1,828,193
Notes and other receivables, net		5,672			131,571
Inventories, net		1,119,509			1,529,917
Prepaid expenses and deposits		123,568			133,092
Assets held for sale - current		3,055,639			4,317,419
Property and equipment, net		849,429			1,074,209
Intangible assets, net		1,062			2,934
Assets held for sale - noncurrent	$	850,491		$	1,077,143
Accounts payable	$	1,311,364		$	1,392,276
Accrued payroll and other accrued liabilities		331,509			290,327
Payable to related parties - current		272,570			-
Liabilities held for sale - current	$	1,915,443		$	1,682,603

The operating results of Powin Mexico and Q Pacific Corporation for the three and nine months ending September 30, 2016 and 2015 classified as discontinued operations are summarized below:

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	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2016			2015			2016			2015
Sales	$	2,246,978		$	2,499,630		$	7,135,534		$	8,267,937
Cost of Goods Sold		1,917,861			2,234,723			6,121,675			7,063,565
Gross Profit		329,117			264,907			1,013,859			1,204,372
Operating Expenses		1,380,366			691,597			2,831,687			2,128,840
Other Income (Expense)		85,583			(4,105	)		97,921			(17,447	)
Income Tax Expense		-			-			-			-
Net loss from discontinued operations	$	(965,666	)	$	(430,795	)	$	(1,719,907	)	$	(941,915	)

The operating results of Powin Mexico for the three and nine months ending September 30, 2016 and 2015 classified as discontinued operations are summarized below:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2016			2015			2016			2015
Sales	$	108,506		$	33,776		$	247,617		$	201,157
Cost of Goods Sold		147,700			276,642			345,933			662,319
Gross Profit		(39,194	)		(242,866	)		(98,316	)		(461,162	)
Operating Expenses		166,836			113,918			518,993			508,128
Other Income (Expense)		86,123			(486	)		84,792			(6,361	)
Income Tax Expense		-			-			-			-
Net loss from Powin Mexico	$	(119,907	)	$	(357,270	)	$	(532,517	)	$	(975,651	)

The operating results of Powin Q Pacific Corporation for the three and nine months ending September 30, 2016 and 2015 classified as discontinued operations are summarized below:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2016			2015			2016			2015
Sales	$	2,141,422		$	2,465,854		$	6,887,917		$	8,066,780
Cost of Goods Sold		1,773,111		1,958,081			5,775,742			6,401,246
Gross Profit		368,311			507,773			1,112,175			1,665,534
Operating Expenses		1,213,530			577,679			2,312,694			1,620,712
Other Income (Expense)		(540	)		(3,619	)		13,129			(11,086	)
Income Tax Expense		-			-			-			-
Net loss from Powin Q Pacific Corporation	$	(845,759	)	$	(73,525	)	$	(1,187,390	)	$	33,736

Results of Continuing Operations

The following table presents the Company’s revenues for its remaining business segment Powin Energy, for the three months ended September 30, 2016 and 2015:

	Three months ended September 30,
	2016(Unaudited)		2015(Unaudited)		$ Change			% Change
Revenue
Energy	$	11,847	$	40,979		(29,132	)		(71.1	)%
Consolidated	$	11,847	$	40,979		(29,132	)		(71.1	)%

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Net sales for the three months ended September 30, 2016, decreased approximately $29,000 or 71.1% from the same period of 2015due to a pause in sales of our electrical vehicle charge stations. Powin Energy has been focusing on the commercialization of its electricity storage products and expects to book orders in 2016.

Operating expenses for the three months ended September 30, 2016, decreased approximately $286,000 or 22.4%, from $1.27 million in the same period of 2015 to $0.99 million.  Decrease is primarily due to shift from product research and development on prior year to production on current year.

For the three months ended September 30, 2016, the Company had net loss of approximately $1.02 million or $0.04 per share, compared to net loss of approximately $1.28 million or $0.06 per share for the same period of 2015.

The following table presents the Company’s revenues for its remaining business segment Powin Energy, for the nine months ended September 30, 2016 and 2015:

	Nine months ended September 30,
	2016(Unaudited)		2015(Unaudited)		$ Change			% Change
Revenue
Energy	$	33,243	$	127,638		(94,395	)	(74.0	)%
Consolidated	$	33,243	$	127,638		(94,395	)	(74.0	)%

Consolidated net sales for the nine months ended September 30, 2016, decreased approximately $94,000 or 74.0% from the same period of 2015due to a pause in sales of our electrical vehicle charge stations. Powin Energy has been focusing on the commercialization of its electricity storage products and expects to book orders in 2016.

Operating expenses for the nine months ended September 30, 2016, decreased approximately $480,000 or 14.0%, from $3.43 million in the same period of 2015 to $2.94 million.  Decrease is primarily due to shift from product research and development on prior year to production on current year.

For the nine months ended September 30, 2016, the Company had net loss of approximately $3.00 million or $0.13 per share, compared to net loss of approximately $3.54 million or $0.17 per share for the same period of 2015.

Discontinued Operations

Net sales from discontinued operations for the three months ended September 30, 2016, decreased approximately $253,000 or 10.1% from the same period of 2015. The decrease is due to reduce demand from Daimler Truck North America.

Operating expenses from discontinued operations for the three months ended September 30, 2016, increased approximately $0.69 million or 99.6%, from $0.69 million in the same period of 2015 to $1.38 million.  Increase is primarily due to write off of net intercompany AP and AR balance carried over several prior years.

For the three months ended September 30, 2016, net loss from discontinued operations were approximately $0.97 million or $0.04 per share, compared to net loss of approximately $0.43 million or $0.03 per share for the same period of 2015.

Net sales from discontinued operations for the nine months ended September 30, 2016, decreased approximately $1,132,000 or 13.7% from the same period of 2015. The decrease is due to reduce demand from Daimler Truck North America.

Operating expenses from discontinued operations for the nine months ended September 30, 2016, increased approximately $703,000 or 33.0%, from $2.13 million in the same period of 2015 to $2.83 million.  Increase is primarily due to write off of net intercompany AP and AR balance carried over several prior years.

For the nine months ended September 30, 2016, net loss from discontinued operations were approximately $1.72 million or $0.09 per share, compared to net loss of approximately $0.94 million or $0.06 per share for the same period of 2015.

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2016 Outlook

In 2016, Powin Energy Corporation entered into sale agreements for Powin Industries S.A. de CV and Q Pacific Corporation, which contained Q Pacific Contract Manufacturing (OEM) and Q Pacific Manufacturing (QBF).  Both sales occurred in October 2016, subsequent to Q3 2016.  The sale of these entities allows Powin Energy Corporation to turn full focus to Powin Energy and the emerging, high growth energy market.

Industry experts project the energy market to grow an average of 60% per year over the next five years.  During the same five-year period, Powin Energy forecasts securing 4% - 7% of the contracts in that market.   The conservative contract acquisition rate allows Powin Energy to grow at a manageable rate and achieve profitability.  Powin will also continue to pursue strategic investment which will allow for more aggressive growth in future years.

Liquidity and Capital Resources

Cash used in operating activities was approximately $3,963,027 for the nine months ended September 30, 2016, compared to $5,010,136 used in operating activities for the same period in 2015. The decrease of cash used in operating activities is mainly due to more increase in accounts receivable, more increase in prepaid expenses and deposits, less purchase of inventories, offset by more increased accrued payroll and other liabilities, more increase of accounts payable and more bad debt expense,.

Cash used in investing activities was $74,866 and $119,876 during the nine months ended September 30, 2016 and 2015, respectively, as the Company acquired less properties and equipment during the nine months ended September 30, 2016.

Cash provided by financing activities were approximately $1,758,884 for the nine months ended September 30, 2016, compared to $8,698,428 provided by financing activities for the same period in 2015. The decrease of cash provided from financing activities is due to net proceeds received from stock issuance for Energy.

The Company issued Preferred Stock in August 2015 to settle the following notes payable:

Lender	Borrower	Amount	Number of Shares of Preferred Stock
3U Trading Co., Limited	Powin Corporation	$2,451,195	4,377,133
3U Trading Co., Limited	Powin Industries S.A. DE C.V.	$211,474	377,631
Joseph Lu	Powin Corporation	$3,333,091	5,951,947
Danny Lu	Powin Corporation	$560,565	1,001,009
Peter Lu	Powin Corporation	$560,565	1,001,009
Lu Pacific Properties, LLC	Powin Corporation	$513,574	917,097
Total		$7,630,464	13,625,826

In August 2016, 13,625,826 shares of August 2015 preferred stock had converted into common stock.

The Company’s management does not believe the current cash and cash flow from operations will be sufficient to meet anticipated cash needs, including cash for working capital and capital expenditures in the foreseeable future. The Company will likely require additional cash resources that will require the Company to sell additional equity securities or debt securities. The sale of convertible debt securities or additional equity securities could result in additional dilution to the company’s stockholders. The incurrence of additional indebtedness would result in increased debt service obligations and could result in operating and financing covenants that would restrict our operations and liquidity.

The Company’s ability to obtain additional capital on acceptable terms is subject to a variety of uncertainties including: investors’ perception of, and demand for, securities of alternative manufacturing companies; conditions of the United States and other capital markets in which we may seek to raise funds; and future results of operations, financial condition and cash flow.  Therefore, the Company’s management cannot assure that financing will be available in amounts or on terms acceptable to the Company, if at all.  Any failure by the Company’s management to raise additional funds on terms favorable to the Company could have a material adverse effect on the Company’s liquidity and financial condition.

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On August 8, 2014, Powin Corporation and its wholly-owned subsidiary, Powin Energy Corporation (collectively “Powin”) and SF Suntech, Inc. (“Suntech”) signed a Share Subscription Agreement (“Subscription Agreement”) for an investment of $25,000,000 from Suntech.

Effective April 2, 2015, Powin and Suntech signed the Fourth Supplemental Agreement (“Supplement”). Under the Supplement, the First Closing Date of the Subscription Agreement was April 2, 2015 (“First Closing”) at which time Suntech made a payment to Powin in the amount of $7,450,000. That payment plus the previous payments of $3,000,000 on August 29, 2014; $2,000,000 on January 15, 2015 and $50,000 on March 2, 2015 represent a total $12,500,000 paid toward the full $25,000,000 owing under the Subscription Agreement.  On April 1, 2015 and April 2, 2015, Powin Energy issued 1,765 shares and 378 shares of Powin Energy Common Stock to Suntech, respectively.

After the shares issuance, the Company owns 82.35% of Powin Energy.

The Supplement further establishes the Second Closing Date of the Subscription Agreement as May 31, 2015 (“Second Closing”) when the balance of $12,500,000 is to be paid. If that payment is made, Powin will issue to Suntech an additional 2,143 shares of Powin Energy Common Stock.  In the event Suntech is unable or unwilling to pay the remaining subscription balance, Powin will be free to sell the 2,143 shares to another purchaser for the same price per share as paid by Suntech. Suntech failed to make the required payment on May 31, 2015. Accordingly, the Company has elected to terminate the Subscription Agreement, as it pertains to the remaining $12,500,000 owing thereunder.

On January 2016, the Company paid $15,747 and bought the 15% interest in the company’s Mexico subsidiary. The Company now owns 100% of the Mexico subsidiary. As of the purchase date, the non-controlling interest of Mexico amounted to $625,750. The difference of purchase price and balance of non-controlling interest is booked as additional paid in capital.

Subsequent events

Effective October 3, 2016, the Company entered into a Stock Purchase Agreement with Powin Industries, SA de CV (“Powin Mexico”) and Rolland Holding Company, LLC (“Rolland”)pursuant to which   Company sold to Rolland ninety-nine (99) shares of  the Series A Common Stock and one hundred sixty-seven thousand four hundred fifty-two (167,452) shares of the Series B Common Stock of  Powin Mexico  which represents 99% of the Series A Common Stock and 100% of the Series B Common Stock (collectively the “Shares”) of  Powin Mexico.  The closing date of the Agreement was October 4, 2016 (“Closing”).The purchase price for the Shares was $999,000.00. At Closing, Rolland made a cash payment of $99,000.00 and delivered to the Company (i) its promissory note in the principal amount $100,000.00 bearing interest at 4% per annum with principal and interest payable in twelve (12) equal monthly installments (“Short Term Note”); and (ii) its promissory note in the principal amount of $800,000.00 bearing interest at 5% per annum with principal and interest payable in ninety-six (96) equal monthly installments (“Long Term Note”). The interest rate on the Long Term Note will be renegotiated if and when the Prime Rate for the U.S reaches 5%. In addition, Powin Mexico delivered to the Company a non-interest bearing promissory note in the amount of $125,000.00 (“Powin Mexico Note”) which calls for four (4) equal monthly installments of $31,250.00 on each of December 31, 2017, December 31, 2018, December 31, 2019 and December 31, 2020. The Powin Mexico Note represents a compromised amount representing the difference between the amount of the Powin Mexico accounts receivable and the amount of the Powin Mexico accounts payable owing to the Company. The Purchase Agreement contains customary warranties and representation.  Amounts due under the Short Term Note, the Long Term Note and the Powin Mexico Note, respectively,  may be accelerated upon a failure to pay amounts due thereunder when due, unless waived or cured. As a consequence of the Purchase Agreement, Powin Mexico ceased being a subsidiary of Powin Corporation.

Effective October 18, 2016, the Company entered into a Stock Purchase Agreement with Weiping Cai (“Cai”) pursuant to which the Company sold to Cai all of the issued and outstanding shares of Common Stock (“Shares”) of   Q Pacific Corporation, the Company’s wholly-owned subsidiary, which wholly-owns and operates Q Pacific Contract Manufacturing and Q Pacific Manufacturing Corporation, the Company’s second tier subsidiaries, collectively referred to as (“QPM”). In addition to the sale of the Shares, the Company also transferred and assigned to Cai the Company’s right, title and interest in and to the “Huntsman” tradename held by Q Pacific Contract Manufacturing Corporation.

On October 6, 2016, the merger between Powin Corporation and Powin Energy Corporation became effective, pursuant to a First Amended and Restated Agreement and Plan of Merger and Liquidation dated, (the "Merger Agreement"). Powin Corporation is the surviving entity with a name change to Powin Energy Corporation and will continue to be traded under the stock symbol PWON.

28

Critical Accounting Policies

Our significant accounting policies are summarized in Note 1 of our consolidated financial statements.  While all these significant accounting policies impact our financial condition and results of operations, we view certain of these policies as critical.  Policies determined to be critical are those policies that have the most significant impact on our financial statements and require management to use a greater degree of judgment and estimates.  Actual results may differ from those estimates.  Our management believes that given current facts and circumstances, it is unlikely that applying any other reasonable judgments or estimate methodologies would cause effect on our consolidated results of operations, financial position or liquidity for the periods presented in this report.

Off Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Item 3.  Quantitative and Qualitative Disclosures about Market Risk.

We are a smaller reporting company, as defined by Rule 229.10(f)(1) and is not required to provide the information required by this Item.

Item 4.  Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our management has evaluated, under the supervision and with the participation of our principal executive and principal financial officers, the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (the “Exchange Act”).  Based on that evaluation, our principal executive and financial officers concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective in ensuring that information required to be disclosed in our Exchange Act reports is (1) recorded, processed, summarized and reported in a timely manner, and (2) accumulated and communicated to our management, including our principal executive and financial officers, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II.  OTHER INFORMATION

Item 1.  Legal Proceedings.

None

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.

Equity Compensation Plan Information

In nine months ended September 30, 2016, we issued a total of 6,000 shares of Common Stock to our directors for their services on the Board of Director. The shares were issued pursuant to the exemption from the registration requirements of Section 5 of the Securities Act of 1933, as amended ( “1933 Act”) , provided by Section 4(a)(2) of the 1933 Act.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

We did not repurchase any of our Common Stock or other securities during the nine-month period ended September 30, 2016.

29

In August 2016, 13,625,826 shares of August 2015 preferred stock had converted into common stock.

Item 3.  Defaults Upon Senior Securities.

None

Item 4.  Mine Safety Disclosures.

Not Applicable.

Item 5.  Other Information.

None

Item 6.  Exhibits.

31.1	Certification of the Chief Executive Officer  Pursuant to 13a-14 and 15d-14 of the Securities Exchange Act of 1934, as adopted pursuant  Section  302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of the  Principal Financial Officer Pursuant to 13a-14 and 15d-14 of the Securities Exchange Act of 1934, , as adopted pursuant  Section  302 of the Sarbanes-Oxley Act of 2002
32	Certification of the Chief Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

30

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this quarterly report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: November16, 2016

By:/s/ Joseph Lu

Chief Executive Officer and Interim Chief Financial Officer

(Principal Executive Officer and Principal Financial Officer)

By:/s/ Geoffrey Brown

President

31

EX-31.1

Exhibit 31.1   Principal Executive Officer - Section 302 Certification

Certification of

Principal Executive Officer

Of Powin Energy Corporation

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Joseph Lu, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Powin Energy Corporation;

2. Based on my knowledge, this  report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this  report;

3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant  as of, and for, the periods presented in this l report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the  registrant and we have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,  to ensure that material information relating to the  registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this  report based on such evaluation; and

d) Disclosed in this annual report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of small business issuer’s board of directors (or persons performing the equivalent function):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report  financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated:  November 16, 2016

By:/s/ Joseph Lu

Chief Executive Officer and Interim Chief Financial Officer

(Principal Executive Officer and Principal Financial Officer)

EX-31.2

Exhibit 31.2 Principal Financial Officer - Section 302 Certification

Certification of

Principal Financial Officer

Of Powin Energy Corporation

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Joseph Lu, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Powin Energy Corporation;

2. Based on my knowledge, this  report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this  report;

3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant  as of, and for, the periods presented in this l report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the  registrant and we have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,  to ensure that material information relating to the  registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this  report based on such evaluation; and

d) Disclosed in this annual report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of small business issuer’s board of directors (or persons performing the equivalent function):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report  financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated:  November16, 2016

By:/s/ Joseph Lu

Chief Executive Officer and Interim Chief Financial Officer

(Principal Executive Officer and Principal Financial Officer)

EX-32

Exhibit 32

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Powin Energy Corporation (the “Company”) on Form 10-Q for the quarter ended September 30, 2016, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned officers of the Company certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to such officer’s knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report.

Dated:  November 16, 2016

By:/s/ Joseph Lu

Chief Executive Officer and Interim Chief Financial Officer

(Principal Executive Officer and Principal Financial Officer)

By:/s/ Geoffrey Brown

President

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2016	Nov. 16, 2016
Document and Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2016
Entity Registrant Name	POWIN ENERGY CORP
Entity Central Index Key	0001468780
Current Fiscal Year End Date	--12-31
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2016
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		29,977,626

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Current Assets
Cash	$ 551,804	$ 2,866,507
Accounts receivable, net	14,326	22,903
Notes and other receivables, net		883
Inventories, net	1,190,868	623,399
Prepaid expenses and deposits	676,332	258,199
Assets held for sale	3,055,639	4,317,419
Total current assets	5,488,969	8,089,310
Property and equipment, net	195,588	159,507
Intangible assets, net	177,168	182,911
Assets held for sale	850,491	1,077,143
Total assets	6,712,216	9,508,871
Current Liabilities
Accounts payable	302,412	152,861
Accrued payroll and other accrued liabilities	331,163	330,370
Notes payable - current portion of long-term debt and accrued interest	1,505,586	19,271
Liabilities held for sale	1,915,443	1,682,603
Total current liabilities	4,054,604	2,185,105
Total liabilities	4,054,604	2,185,105
Stockholders' Equity
Common stock, $0.001 par value, 575,000,000 shares Authorized; 29,977,626 and 16,243,839 shares issued and outstanding, respectively	29,978	16,256
Additional paid-in capital	30,751,748	23,909,992
Accumulated other comprehensive loss	(91,871)	(56,176)
Accumulated deficit	(26,256,731)	(22,060,870)
Total Powin Energy Corporation stockholders' equity	5,518,624	10,463,366
Non-controlling interest	(2,861,012)	(3,139,600)
Total liabilities and shareholders' equity	6,712,216	9,508,871
Series A Preferred Stock [Member]
Stockholders' Equity
Preferred stock	1,085,500	1,023,700
2015 August stock [Member]
Stockholders' Equity
Preferred stock		$ 7,630,464

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical)	9 Months Ended
	Sep. 30, 2016 $ / shares shares	Dec. 31, 2015 $ / shares shares
Preferred stock, shares authorized	25,000,000	25,000,000
Common stock, par value per share | $ / shares	$ 0.001	$ 0.001
Common stock, shares authorized	575,000,000	575,000,000
Common stock, shares issued	29,977,626	16,243,839
Common stock, shares outstanding	29,977,626	16,243,839
Series A Preferred Stock [Member]
Preferred stock, face value | $ / shares	$ 100	$ 100
Preferred stock, conversion rate	1
Preferred stock, shares issued	10,855	10,237
Preferred stock, shares outstanding	10,855	10,237
2015 August stock [Member]
Preferred stock, face value | $ / shares	$ 0.56	$ 0.56
Preferred stock, conversion rate	1
Preferred stock, shares issued	0	13,625,826
Preferred stock, shares outstanding	0	13,625,826

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Income Statement [Abstract]
Net sales	$ 11,847	$ 40,979	$ 33,243	$ 127,638
Cost of sales	14,726	20,991	55,549	172,948
Gross profit(loss)	(2,879)	19,988	(22,306)	(45,310)
Operating expenses
Payroll expenses	354,491	322,075	973,416	928,315
Professional expenses	297,074	523,486	1,205,598	1,460,080
Rent expenses	70,681	105,540	212,042	316,620
General and administrative expenses	266,960	323,658	553,597	720,140
Total operating expenses	989,206	1,274,759	2,944,653	3,425,155
Loss from operations	(992,085)	(1,254,771)	(2,966,959)	(3,470,465)
Other income (expense)
Other income	0	0	0	25,059
Interest expense	(21,463)	(18,601)	(21,634)	(233,074)
Other income (expense)		0		149,855
Other expenses	(21,463)	(18,601)	(21,634)	(58,160)
Loss before income taxes	(1,013,548)	(1,273,372)	(2,988,593)	(3,528,625)
Provision for income taxes	3,849	11,250	11,349	11,250
Net loss from continuing operations	(1,017,397)	(1,284,622)	(2,999,942)	(3,539,875)
Loss from discontinued operations, net of income taxes	(965,666)	(430,795)	(1,719,907)	(941,915)
Net loss before NCI	(1,983,063)	(1,715,417)	(4,719,849)	(4,481,790)
Net loss attributable to non-controlling interest	(174,108)	(277,073)	(523,988)	(788,584)
Net loss attributable to Powin energy corporation	$ (1,808,955)	$ (1,438,344)	$ (4,195,861)	$ (3,693,206)
Basic and diluted loss per share
From continuing operations	$ (0.04)	$ (0.06)	$ (0.13)	$ (0.17)
From discontinued operations	(0.04)	(0.03)	(0.09)	(0.06)
Combined loss per share attributable to Common Shareholders	$ (0.08)	$ (0.09)	$ (0.22)	$ (0.23)
Weighted average shares outstanding:
Basic and diluted	23,853,422	16,249,839	18,807,783	16,246,850

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
OPERATING ACTIVITIES
Net loss from continuing operations	$ (2,999,942)	$ (3,539,875)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization	42,054	41,280
Reserve for slow moving and obsolete inventory		49,198
Share based compensation	41,788	55,009
Provision for doubtful accounts receivable		(1,500)
Changes in operating assets and liabilities
Accounts receivable	8,577	10,825
Notes and other receivables	883	(2,174)
Inventories	(567,469)	(201,249)
Prepaid expenses and deposits	(418,133)	113,095
Other receivable		(2,483,970)
Accounts payable	149,551	(131,155)
Accrued payroll and other liabilities	793	(168,250)
Net cash used in operating activities - continuing operations	(3,741,899)	(6,258,766)
Net cash (used in) provided by operating activities - discontinued operations	(221,128)	1,248,630
Net cash used in operating activities	(3,963,027)	(5,010,136)
INVESTING ACTIVITIES
Acquisition of intangible assets	(11,365)
Cash paid to acquire non-controlling interest	(15,747)
Purchase of equipment and leasehold improvements	(61,027)
Net cash used in investing activities - continuing operations	(88,139)
Net cash provided by(used in) investing activities - discontinued operations	13,273	(119,876)
Net cash used in investing activities	(74,866)	(119,876)
FINANCING ACTIVITIES
Proceeds from notes payables and debt	1,505,586
Repayments of notes payables and debt	(19,271)
Proceeds from stock issuance		8,930,000
Net cash provided by financing activities - continuing operations	1,486,315	8,930,000
Net cash provided by(used in) financing activities - discontinued operations	272,570	(231,572)
Net cash provided by financing activities	1,758,885	8,698,428
Impact of foreign exchange on cash	(35,695)	(25,868)
Net (decrease) increase in cash	(2,314,703)	3,542,548
Cash at beginning of period	2,866,507	344,020
Cash at end of period	551,804	3,886,568
SUPPLEMENTAL DISCLOURSE OF CASH FLOW INFORMATION
Interest paid	171	570,042
Income taxes paid	$ 11,349	$ 11,250

XML

Description of Business and History And Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Description of Business and History And Summary of Significant Accounting Policies

Note 1 – Description of Business and History And Summary of Significant Accounting Policies

Description of Business and History

Powin Energy Corporation (“Company”, “we”, “us”) was founded in 1989 in Oregon under its original name of Powin Corporation by Joseph Lu, who developed a strategy of manufacturing a number of diverse products for leading North American retailers, with careful attention to quality and value-added service. As a contract manufacturer, the Company provides manufacturing coordination, design and logistics services for companies to outsource its manufacturing needs. Manufacturing is provided through the Company’s subsidiary, Q Pacific Manufacturing Corporation (“Q Pacific Manufacturing”), with a leased metal fabrication plant in Tualatin, Oregon; its 100% owned subsidiary in Mexico, with a leased metal fabrication plant in Saltillo; or through very strong relationships with factories located in The People’s Republic of China and in Taiwan.

Throughout its life-cycle, the Company has expanded into additional lines of business, all based on the values of delivering customers a high quality product and value-added service. For the periods presented the Company have the following subsidiaries:

As described in this Form 10Q and 2015 Form 10K				As described in previously filings
Legal entity name	Business  segment name			Legal entity name	Business  segment name
Powin Corporation	Holding company			Powin Corporation	Holding company
Q Pacific Contract Manufacturing Corporation	Contract manufacturing			Powin Contract Manufacturing Corporation	Contract manufacturing
Q Pacific Manufacturing Corporation	Manufacturing			Powin Manufacturing Corporation	Manufacturing
Powin Energy Corporation	Energy			Powin Energy Corporation	Energy
Powin Industries S.A. de C.V.	Mexico			Powin Industries S.A. de C.V.	Mexico
Powin Product  Service, Inc.	Contract Manufacturing			Powin Product service, Inc.	Warehousing

The Company’s client base includes distributors in the transportation, medical, sports, camping, fitness, and packaging and furniture industries.  Operations outside the United States of America are subject to risks inherent in operating under different legal systems and various political and economic environments.  Among the risks are changes in existing tax laws, possible limitations on foreign investment and income repatriation, government price or foreign exchange controls, and restrictions on currency exchange.

Effective October 3, 2016(see Note13 &14), the Company entered into a Stock Purchase Agreement with Powin Industries, SA de CV (“Powin Mexico”) and Rolland Holding Company, LLC (“Rolland”)pursuant to which   Company sold to Rolland 99 shares of  the Series A Common Stock and the 167,452 shares of the Series B Common Stock of  Powin Mexico  which represents 99% of the Series A Common Stock and 100% of the Series B Common Stock (collectively the “Shares”) of  Powin Mexico.  The closing date of the Agreement was October 4, 2016 (“Closing”).The purchase price for the Shares was $999,000. At Closing, Rolland made a cash payment of $99,000 and delivered to the Company (i) its promissory note in the  principal amount $100,000 bearing interest at 4% per annum with principal and interest payable in twelve (12) equal monthly installments (“Short Term Note”); and (ii) its promissory note in the principal amount of $800,000 bearing interest at 5% per annum with principal and interest payable in ninety-six (96) equal monthly installments (“Long Term Note”). The interest rate on the Long Term Note will be renegotiated if and when the Prime Rate for the U.S reaches 5%. In addition, Powin Mexico delivered to the Company a non-interest bearing promissory note in the amount of $125,000 (“Powin Mexico Note”) which calls for four (4) equal monthly installments of $31,250 on each of December 31, 2017, December 31, 2018, December 31, 2019 and December 31, 2020. The Powin Mexico Note represents a compromised amount representing the difference between the amount of the Powin Mexico accounts receivable and the amount of the Powin Mexico accounts payable owing to the Company. The Purchase Agreement contains customary warranties and representation.  Amounts due under the Short Term Note, the Long Term Note and the Powin Mexico Note, respectively,  may be accelerated upon a failure to pay amounts due thereunder when due, unless waived or cured. As a consequence of the Purchase Agreement, Powin Mexico ceased being a subsidiary of Powin Corporation.

Effective October 18, 2016(see Note13&14), the Company entered into a Stock Purchase Agreement with Weiping Cai (“Cai”) pursuant to which the Company sold to Cai all of the issued and outstanding shares of Common Stock (“Shares”) of   Q Pacific Corporation, the Company’s wholly-owned subsidiary, which wholly-owns and operates Q Pacific Contract Manufacturing and Q Pacific Manufacturing Corporation, the Company’s second tier subsidiaries, collectively referred to as (“QPM”). In addition to the sale of the Shares, the Company also transferred and assigned to Cai the Company’s right, title and interest in and to the “Huntsman” tradename held by Q Pacific Contract Manufacturing Corporation.

Basis of preparation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information required by GAAP for complete annual financial statement presentation.

In the opinion of management, all adjustments (consisting only of normal and recurring adjustments) necessary for a fair presentation of the results of operations have been included in the accompanying unaudited condensed consolidated financial statements. Operating results for the nine-month period ended September 30, 2016, are not necessarily indicative of the results to be expected for other interim periods or for the full year ended December 31, 2016. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and accompanying notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, as filed with the Securities Exchange Commission.

Principles of consolidation

The accompanying unaudited condensed consolidated financial statements include the accounts of Powin Energy Corporation and its subsidiaries. All intercompany transactions and balances have been eliminated. Equity investments through which the Company exercises significant influence over but does not control the investee and is not the primary beneficiary of the investee’s activities are accounted for using the equity method. Investments through which the Company is not able to exercise significant influence over the investee are accounted for under the cost method.

Foreign currencies

Assets and liabilities recorded in foreign currencies are translated to U.S. dollars at the exchange rate on the balance sheet date. Revenue and expenses are translated to U.S. dollars at average rates of exchange prevailing during the year. Translation adjustments resulting from this process are recorded to other comprehensive income (“OCI”).

The reporting currency of the Company is the U.S. dollars. The Company’s Mexico subsidiary Powin Industries S.A. de C.V uses Mexican Peso as its functional currency. The results of operations and cash flows are translated at average exchange rates during the period, and assets and liabilities are translated at the unified exchange rates at the balance sheet dates, and equity is translated at the historical exchange rates. As a result, amounts related to assets and liabilities reported on the statements of cash flows will not necessarily agree with changes in the corresponding accounts on the balance sheets. Translation adjustments resulting from this process are included in accumulated other comprehensive income in the statements of stockholders’ equity. Translation adjustments for the nine months ended September 30, 2016 and 2015 were $(35,695) and $(25,868), respectively. Translation adjustments for the three months ended September 30, 2016 and 2015 were $(33,126) and $(3,595), respectively. The cumulative translation adjustment and effect of exchange rate changes on cash, which was recorded as accumulated other comprehensive loss on the balance sheet, as of September 30, 2016 and December 31, 2015 were $(91,871) and $(56,176), respectively. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred.

Assets and liabilities were translated at 19.41PESO and 17.34 PESO to $1.00 at September 30, 2016 and December 31, 2015, respectively. The equity accounts were stated at their historical rates. The average translation rates applied to income statements for the nine months ended September 30, 2016 and 2015 were 19.41PESO and 17.58 PESO to $1.00, respectively. Cash flows are also translated at average translation rates for the period; therefore, amounts reported on the statement of cash flows will not necessarily agree with changes in the corresponding balances on the balance sheet.

Use of estimates

The preparation of consolidated financial statements in accordance with GAAP requires the use of management’s estimates. These estimates are subjective in nature and involve judgments that affect the reported amounts of assets and liabilities, and the reported amounts of revenues and expenses during the periods presented. Actual results could differ from those estimates.

We maintain allowances for accounts receivable for estimated uncollectable accounts receivable due to the inability of our customers to make required payments. We maintain impairment for inventory for estimated inventory loss. We maintain allowances for returns for estimated losses resulting from product returns. These estimates have historically been within our expectations and the provisions established.

Revenue recognition

The Company recognizes revenue when persuasive evidence of an arrangement exists, the service is performed or delivery has occurred, the price is fixed or determinable, and collectability is reasonably assured.

For product shipped directly from the Company’s warehouse or manufactured by the Company in the United States and then shipped to the customer, revenue is recognized at time of shipment as it is determined that ownership and title has passed to the customer at shipment and revenue is recognized.  Amounts billed to customers for freight and shipping are classified as revenue.

Products imported from China and shipped directly to the customer may be either FOB Port of Origin or FOB Shipping Destination United States. If the product is shipped FOB Port of Origin revenue is recognized at time of delivery to the Company’s representative in China, when the proper bills-of-lading have been signed by the customer’s agent and ownership passed to the customer.  For product shipped FOB Shipping Destination U.S., revenue is recognized when product is off-loaded at the United States Port of Entry and delivered to the customer, when all delivery documents have been signed by the receiving customer, and ownership has passed to the customer. 

For orders placed requiring customized manufacturing, the Company requires the customer to issue its signed purchase order with documentation identifying the specifics of the product to be manufactured. Revenue is recognized on customized manufactured products upon delivery of the product.  If the customer cancels the purchase order after the manufacturing process has begun, the Company invoices the customer for any manufacturing costs incurred and revenue is recognized.  Orders canceled after delivery has occurred are fully invoiced to the customer and revenue is recognized, provided all other revenue recognition criteria are met.

Cost of goods sold

Cost of goods sold includes cost of inventory sold during the period, net of discounts and allowances, freight and shipping costs, warranty and rework costs, and sales tax.

Advertising

The Company expenses the cost of advertising as incurred.  For the nine months ended September 30, 2016 and 2015, the amount charged to advertising expense was $21,280 and $118,255, respectively. For the three months ended September 30, 2016 and 2015, the amount charged to advertising expense was $16,187 and $71,169, respectively.

Research and development

Research and development expenses include payroll, employee benefits, stock-based compensation expense, and other headcount-related expenses associated with product development. Research and development expenses also include third-party development and programming costs, localization costs incurred to translate software for international markets, and the amortization of purchased software code and services content. Such costs related to software development are included in research and development expense until the point that technological feasibility is reached, which for our software products, is generally shortly before the products are released to manufacturing. Once technological feasibility is reached, such costs are capitalized and amortized to cost of revenue over the estimated lives of the products.

Loss Per Share

Basic loss per share is based on the weighted-average effect of all common shares issued and outstanding, and is calculated by dividing net loss by the weighted-average shares outstanding during the year. Diluted loss per share is calculated by dividing net income by the weighted-average number of common shares used in the basic loss per share calculation plus the number of common shares that would be issued assuming exercise or conversion of all potentially dilutive common shares outstanding. The Company excludes equity instruments from the calculation of diluted earnings per share if the effect of including such instruments is antidilutive. Please refer to Note 6 for further discussion.

Comprehensive loss

Comprehensive loss is defined to include all changes in equity except those resulting from investments by owners and distributions to owners. Among other disclosures, ASC 220, Comprehensive loss requires that all items that are required to be recognized under current accounting standards as components of comprehensive loss be reported in a financial statement that is displayed with the same prominence as other financial statements. For the years presented, the Company’s comprehensive loss includes net loss and foreign currency translation adjustments and is presented in the consolidated statements of comprehensive loss.

Cash

The Company considers all highly liquid investments with maturity of nine months or less to be cash equivalents. The cash deposits in U.S. financial institutions exceed the amounts insured by the U.S. government. The standard insurance amount is $250,000 per depositor, per insured bank. Non-performance by these institutions could expose the Company to losses for amounts in excess of insured balances. At September 30, 2016 and December 31, 2015, the Company’s bank balances exceeded insurances balances by $181,546 and $2,583,046, respectively. At September 30, 2016 and December 31, 2015, the Company had no cash equivalents.

Accounts receivable

Accounts receivable are carried at their estimated collectible amounts. Credit is generally extended on a short-term basis; thus, accounts receivable do not bear interest. Accounts receivable are periodically evaluated for collectability based on past credit history with customers and their current financial condition.  Balances outstanding after management has used reasonable collection efforts are written off through a charge to the valuation allowance and a credit to trade accounts receivable. Bad debt expense for the nine months ended September 30, 2016 and 2015 was $0 and $1,500, respectively.

Inventories, net

Inventories consist of parts and equipment including electronic parts and components, furniture, rubber products, plastic products and exercise equipment.  Inventory is valued at the lower of cost (first-in, first-out method) or market.  The Company capitalizes applicable direct and indirect costs incurred in the Company’s manufacturing operations to bring its products to a sellable state. For the nine months ended September 30, 2016 and 2015, the Company recorded an inventory obsolescence recovery of $0 and provision for inventory obsolescence of $49,198, respectively, which is included in cost of sales. The components of inventories were as follows:

	September 30, 2016 (unaudited)			December 31, 2015
Raw materials	$	719,943		$	303,730
Work in progress		246,700			196,092
Finished goods		721,951			621,303
Reserve for slow moving  and obsolete inventory		(497,726	)		(497,726	)
Inventories, net	$	1,190,868		$	623,399

Property and Equipment

Property and equipment are carried at cost less accumulated depreciation and amortization.  For financial reporting and income tax purposes, the costs of property and equipment are depreciated and amortized over the assets estimated useful lives, using principally the straight-line method for financial reporting purposes and an accelerated method for income tax purposes.  Costs associated with repair and maintenance of property and equipment are expensed as incurred.  Changes in circumstances, such as technological advances, changes to the Company’s business model or capital strategy could result in actual useful lives differing from the Company’s estimates.  In those cases where the Company determines that the useful life of property and equipment should be shortened, the Company would depreciate the asset over its revised remaining useful life thereby increasing depreciation expense.

The Company depreciates property and equipment over the following estimated useful lives:

Equipment	7-15 years
Leasehold improvements	39 years
Computers	3-5 years
Vehicles	5-7 years
Furniture and fixtures	3-5 years

The Company reviews the carrying value of property, and equipment for impairment whenever events and circumstances indicate that the carrying value of an asset may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition. In cases where undiscounted expected future cash flows are less than the carrying value, an impairment loss is recognized equal to an amount by which the carrying value exceeds the fair value of assets. The factors considered by management in performing this assessment include current operating results, trends and prospects, the manner in which the property is used, and the effects of obsolescence, demand, competition and other economic factors. Based on this assessment, no impairment expenses for property, and equipment was recorded in operating expenses during the nine months ended September 30, 2016 and 2015.

Intangible Assets

All of our intangible assets include websites and also patents that are subject to amortization and are amortized using the straight-line method over their estimated period of benefit, ranging from 3 to 5 years. We evaluate the recoverability of intangible assets periodically by taking into account events or circumstances that may warrant revised estimates of useful lives or that indicates the asset may be impaired.

Non-controlling interests

As of September 30, 2016, non-controlling interests on the consolidated financial statements represented the minority stockholders’ proportionate share of the net income/losses of the Company, an 82.35% owned subsidiary from April 2, 2015.

On August 8, 2014, the Company and its then wholly-owned subsidiary, Powin Energy Corporation (collectively “Powin”) and SF Suntech, Inc. (“Suntech”) signed a Share Subscription Agreement (“Subscription Agreement”) for an investment of $12,500,000 from Suntech. On April 1, 2015 and April 2, 2015, Powin Energy issued 1,765 shares and 378 shares of Powin Energy Common Stock to Suntech, respectively. Professional expenses of $750,000 related to the issuances were deducted from the proceeds received. After the shares issuance, the Company owns 82.35% of Powin Energy.

Non-controlling interests on the consolidated financial statements as of December 31, 2015 includes minority interest of Mexico, an 85% owned subsidiary from February 2011 to January 2016. On January 2016, the company spent $15,747 and bought the 15% minority interest in the company’s Mexico subsidiary. As of September 30, 2016, the Company owns 100% of the Mexico subsidiary.

Income taxes

Deferred tax assets and liabilities are recorded based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company calculates a provision for income taxes using the asset and liability method, under which deferred tax assets and liabilities are recognized by identifying the temporary differences arising from the different treatment of items for tax and accounting purposes. In determining the future tax consequences of events that have been recognized in the consolidated financial statements or tax returns, judgment and interpretation of statutes is required. Additionally, the Company uses tax planning strategies as a part of its tax compliance program. Judgments and interpretation of statutes are inherent in this process.

The accounting guidance for uncertainties in income tax prescribes a comprehensive model for the financial statement recognition, measurement, presentation, and disclosure of uncertain tax positions taken or expected to be taken in income tax returns. The Company recognizes a tax benefit from an uncertain tax position in the consolidated financial statements only when it is more likely than not that the position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits and a consideration of the relevant taxing authority’s widely understood administrative practices and precedents.

Prior to July 8, 2008, the Company had elected under the Internal Revenue Code to be taxed as an S Corporation.  In lieu of corporation income taxes, the stockholder of an S Corporation is taxed on his proportionate share of the Company’s taxable income. Due to the merger on July 8, 2008, the Company is now subject to Federal income tax.

Fair Value Measurements

The fair value accounting guidance defines fair value as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.” The definition is based on an exit price rather than an entry price, regardless of whether the entity plans to hold or sell the asset. This guidance also establishes a fair value hierarchy to prioritize inputs used in measuring fair value as follows:

• Level 1:  Observable inputs such as quoted prices in active markets;

• Level 2:  Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and

• Level 3:  Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

The carrying value of the Company’s equipment borrowing and short term line of credit borrowing at September 30, 2016 and December 31, 2015, is considered to approximate fair market value, as the interest rates of these instruments are based predominantly on variable reference rates. The carrying value of accounts receivable, trade payables and accrued liabilities approximates the fair value due to their short-term maturities.

Stock-Based Compensation

The Company measures stock-based compensation expense for all share-based awards granted to employees based on the estimated fair value of those awards at grant-date under ASC 718.  The cost of restricted stock awards is determined using the fair market value of our common stock on the date of grant.  The fair values of stock option awards are estimated using a Black-Scholes valuation model. The compensation costs are recognized net of any estimated forfeitures on a straight-line basis over the employee requisite service period. Forfeiture rates are estimated at grant-date based on historical experience and adjusted in subsequent periods for any differences in actual forfeitures from those estimates.

Recently Issued Accounting Pronouncements –Not Adopted

The FASB has issued Accounting Standards Update (ASU) No. 2014-15, Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.  ASU 2014-15 is intended to define management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosures.

Under Generally Accepted Accounting Principles (GAAP), financial statements are prepared under the presumption that the reporting organization will continue to operate as a going concern, except in limited circumstances. Financial reporting under this presumption is commonly referred to as the going concern basis of accounting. The going concern basis of accounting is critical to financial reporting because it establishes the fundamental basis for measuring and classifying assets and liabilities.

Currently, GAAP lacks guidance about management’s responsibility to evaluate whether there is substantial doubt about the organization’s ability to continue as a going concern or to provide related footnote disclosures.

This ASU provides guidance to an organization’s management, with principles and definitions that are intended to reduce diversity in the timing and content of disclosures that are commonly provided by organizations today in the financial statement footnotes.

The amendments are effective for annual periods ending after December 15, 2016, and interim periods within annual periods beginning after December 15, 2016. Early application is permitted for annual or interim reporting periods for which the financial statements have not previously been issued.

The FASB and IASB (the Boards) have issued converged standards on revenue recognition. Specifically, the Boards have issued the following documents:

• FASB Accounting Standards Update (ASU) No. 2014-09,  Revenue from Contracts with Customers: Topic 606  ; and

• IFRS 15,  Revenue from Contracts with Customers.

The issuance of these documents completes the joint effort by the Boards to improve financial reporting by creating common revenue recognition guidance for U.S. GAAP and IFRS.

ASU 2014-09 affects any entity using U.S. GAAP that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards (e.g., insurance contracts or lease contracts). This ASU will supersede the revenue recognition requirements in Topic 605,  Revenue Recognition,  and most industry-specific guidance. This ASU also supersedes some cost guidance included in Subtopic 605-35,  Revenue Recognition—Construction-Type and Production-Type Contracts.  In addition, the existing requirements for the recognition of a gain or loss on the transfer of nonfinancial assets that are not in a contract with a customer (e.g., assets within the scope of Topic 360,  Property, Plant, and Equipment,  and intangible assets within the scope of Topic 350,  Intangibles—Goodwill and Other)  are amended to be consistent with the guidance on recognition and measurement (including the constraint on revenue) in this ASU.

The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps:

• Step 1: Identify the contract(s) with a customer.

• Step 2: Identify the performance obligations in the contract.

• Step 3: Determine the transaction price.

• Step 4: Allocate the transaction price to the performance obligations in the contract.

• Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation.

For a public entity, the amendments in this ASU are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted.

Segment reporting

ASC 280, Segment Reporting, formerly known as Statement of Financial Accounting Standards No. 131, Disclosure about Segments of an Enterprise and Related Information, requires use of the “management approach” model for segment reporting. Under this model, segment reporting is consistent with the manner that the Company’s management organizes segments within the company for making operating decisions and assessing performance. Reportable segments are based on products and services, geography, legal structure, management structure or any other manner in which management disaggregates a company.

A description of our operating segments as of September 30, 2016 and December 31, 2015, follows.

Contract manufacturing (formerly OEM):

Outsourced manufacturing for North American companies, including senior citizen safety products; steel gun safes; outdoor cooking equipment; trampolines; plastic products and small electronic appliances. Contract manufacturing also offers logistic services and a qualified engineer team to support and provide in-house design.

Manufacturing (formerly QBF):

Our manufacturing segment, Powin Manufacturing formerly named Quality Bending and Fabrication (“QBF”), manufactures various truck parts and components primarily for Freightliner Trucks, a division of Daimler Trucks North America, the largest manufacturer of heavy-duty vehicles in North America. Daimler Trucks North America designs, builds and markets a wide range of Class 3-8 vehicles including long-haul highway tractors, heavy-duty construction and vocational trucks, mid-range trucks for distribution and service, school and transit buses, fire and emergency service apparatus, and chassis for step vans, school and shuttle buses, and motor homes.  Freightliner Trucks is headquartered in Portland, Oregon, with truck manufacturing facilities located in Portland and throughout the United States and Mexico.

Manufacturing is completed at the Company’s leased facility in Tualatin, Oregon as well as arranging the outsourced manufacturing at a third-party factory in Qingdao, China.

Energy:

Powin Energy has developed market leading architecture that utilizes proprietary patent-pending energy storage technology for scalable grid energy storage systems, power supply units for electric vehicles, and transportation applications. Through December 31, 2014, the Energy segment has focused on identifying target markets and applications and finalizing the development of products to serve those markets and applications. In 2015, The Company has continued to develop products and marketing strategies for this operating entity.

Product & Service (formerly Channel Partner Program, Warehousing and Wooden)

The Product & Service segment contains the legacy operations of Channel Partner Program, a distribution channel for North American companies to sell their products in China as well as selling certain consumer products through U.S.-based retailers and marketplaces, including online; and Warehousing, which provides warehousing services in support of the Company’s customers across all segments. On January 1, 2015, the Product & Service segment had been incorporated into our contract manufacturing segment.

Powin Mexico:

Powin Mexico is a manufacturing segment, currently manufacturing gun safes, but also capable of manufacturing heavy truck parts. Operations began in 2013.

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Going concern

9 Months Ended

Sep. 30, 2016

Going concern [Abstract]

Going concern

Note 2: Going concern

The Company sustained net loss attributable to Powin Corporation of $4,195,861 and $3,693,206 during the nine months ended September 30, 2016 and 2015. The Company has accumulated deficit of $26,256,731 as of September 30, 2016. The Company’s continuation as a going concern is dependent on its ability to generate sufficient cash flows from operations to meet its obligations and/or obtain additional financing, as may be required.

The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern; however, the above condition raises substantial doubt about the Company’s ability to do so. The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result should the Company be unable to continue as a going concern.

In recent months, the Company has taken significant steps toward restoration of operating profits and financial stability. Cost cutting measures, including reductions to staff, have been implemented within the Contract Manufacturing and Manufacturing segments. The Mexican segment is working on getting additional sales volume with several US manufacturers and distributors of commercial safes. As discussed in Notes 13 & 14 the Company is selling all non-Powin Energy related operations to focus exclusively on the Company’s energy segment.

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Notes and other receivables

9 Months Ended

Sep. 30, 2016

Receivables [Abstract]

Notes and other receivables

Note 3: Notes and other receivables

Notes and other receivables consist of the following:

	September 30,2016 (unaudited)		December 31,2015
VAT receivable, Mexico	$	-	$	-
Notes receivable from third parties		-		-
Other		-		883
Reserve for uncollectible VAT receivable		-		-
Notes and other receivables, net	$	-	$	883

The Company has fully reserved for its Mexico VAT tax receivable as there is no expectation of collection.

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Property and equipment, net

9 Months Ended

Sep. 30, 2016

Property, Plant and Equipment [Abstract]

Property and equipment, net

Note 4: Property and equipment, net

The components of property and equipment were as follows: 

	September 30, 2016 (unaudited)			December 31, 2015
Equipment	$	50,385		$	50,385
Leasehold improvements		92,131			92,131
Computers		99,365			38,338
Vehicles		32,983			32,983
Furniture and fixtures		-			-
		274,864			213,837
Accumulation depreciation		(79,276	)		(54,330	)
Property and equipment - net	$	195,588		$	159,507

For the nine months ended September 30, 2016 and 2015, depreciation of property and equipment amounted $24,946 and $18,061, respectively. For the three months ended September 30, 2016 and 2015, depreciation of property and equipment amounted $9,640 and $6,021, respectively.

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Loss per share

9 Months Ended

Sep. 30, 2016

Loss per share:

Loss per share

Note 5: Loss per share

Basic loss per share is based on the weighted-average effect of all common shares issued and outstanding, and is calculated by dividing net loss by the weighted-average shares outstanding during the year.  Diluted loss per share is calculated by dividing net income by the weighted-average number of common shares used in the basic loss per share calculation plus the number of common shares that would be issued assuming exercise or conversion of all potentially dilutive common shares outstanding. The Company excludes equity instruments from the calculation of diluted earnings per share if the effect of including such instruments is antidilutive. 

The components of basic and diluted loss per share are as follows:

	For the three months endedSeptember 30,						For the nine months ended September30,
	2016 (Unaudited)			2015 (Unaudited)			2016 (Unaudited)			2015 (Unaudited)
Net loss attributable to Powin Corporation(A)		(1,808,955	)		(1,438,344	)		(4,195,861	)		(3,693,206	)
Less preferred share dividends		-			-			(61,800	)		(55,000	)
Net loss available to Powin Corporation (B)		(1,808,955	)		(1,438,344	)		(4,257,661	)		(3,748,206	)
Weighted average outstanding shares of  common stock (C)		23,853,422			16,249,839			18,807,783			16,246,850
Dilutive effect of securities		-			-			-			-
Common stock and common stock equivalents (D)		23,853,422			16,249,839			18,807,783			16,246,850
Loss per share
Basic (B/D)	$	(0.08	)	$	(0.09	)	$	(0.22	)	$	(0.23	)
Diluted (B/D)	$	(0.08	)	$	(0.09	)	$	(0.22	)	$	(0.23	)

The Company has 10,855 and 10,237 shares of outstanding Series A preferred stock as of September 30, 2016 and December 31, 2015, respectively. These Series A share has par value of $100 and is convertible at 1 to 20 rate. The Company has 0 and 13,625,826 shares of outstanding August 2015 preferred stock as of September 30, 2016 and December 31, 2015, respectively. These August 2015 share has par value of $0.56 and is convertible at 1 to 1 rate. In August 2016, 13,625,826 shares of August 2015 preferred stock had converted into common stock.

On June 15, 2011, the Company granted awards in the form of incentive stock options to its key employees for 117,000 shares of common stock.  There were no stock options granted in 2012. On August 6, 2013, the Company granted another 164,000 stock options under the same plan to all employees. The Company has 135,000 and 158,000 shares of outstanding stock options as of September 30, 2016 and December 31, 2015, respectively.

On April 15, 2013, The Company issued a Warrant to Purchase Common Stock to Global Storage Group, LLC for 70,000 shares of the Company’s common stock at an exercise price of $25.00; and a Warrant to Purchase Common Stock to Virgil L. Beast on for 30,000 shares of the Company’s common Stock at an exercise price of $25.00. The exercise period of each Warrant is 60 months from the date of issuance and may be exercised in whole or in part at any time prior to April 15, 2018. As of September 30, 2016 and December 31, 2015, all 100,000 warrants remain outstanding.

The following sets forth the number of shares of common stock underlying if all outstanding options, warrants, and convertible debt were converted as of September 30, 2016 and December 31, 2015:

	September 30, 2016 (unaudited)		December 31, 2015
Series A preferred stock		217,100		204,740
Warrants		100,000		100,000
Stock options		135,000		158,000
August 2015 preferred stock		-		13,625,826
		452,100		14,088,566

For the nine months ended September 30, 2016 and 2015, the effect of warrants, stock options and convertible preferred stock and preferred stock dividends are excluded from loss per share because their impact is considered to be anti-dilutive.

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Notes Payable and Long Term Debt

9 Months Ended

Sep. 30, 2016

Debt Disclosure [Abstract]

Notes Payable and Long Term Debt

Note 6: Notes Payable and Long Term Debt

The total carrying value of notes payable and long-term debt, including current and long-term portions, was as follows:

	September 30, 2016 (unaudited)				December 31, 2015
	Current		Non Current		Current		Non Current
Equipment loan starting December 18, 2012, due January 1, 2017, with 3.05% interest rate, with  no collateral	$	-	$	-	$	19,271	$	-
Loan from a third party, starting July 5, 2016, due July 4, 2017, with 6% interest  rate, with no collateral		1,484,118		-		-		-
Accrued interest		21,468		-		-		-
Total long-term debt, including current portion and accrued interest	$	1,505,586	$	-	$	19,271	$	-

Interest expenses related to notes payables and long-term debt amounted to $21,634 and $233,074for the nine months ended September 30, 2016 and 2015, respectively. Interest expenses related to notes payables and long-term debt amounted to $21,463 and $18,601 for the three months ended September 30, 2016 and 2015, respectively.

On July 5, 2016, the Company’s subsidiary, Powin Energy Corporation issued an unsecured promissory note in the amount of $1,484,118 to 3U (HK) Trading Co. Limited. The note is due on or before July 4, 2017 and accrues interest at 6% per annum.

During the year ended December 31, 2015, the Company issued its preferred stock designed as “August 2015 Preferred Stock”, in satisfaction of certain notes payable (Note 8).There was no gain or loss related to the issuance of the preferred stock.

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Commitments

9 Months Ended

Sep. 30, 2016

Commitments and Contingencies Disclosure [Abstract]

Commitments

Note 7: Commitments

Operating Leases

The Company leases a facility from Lu Pacific Properties, LLC(“Lu Pacific)(formerly, Powin Pacific Properties, LLC, a company owned by Joseph Lu, the Company’s largest shareholder, Chairman of the Board and CEO, which serves as the Company’s corporate headquarters as well as the base of all operations, except Q Pacific Manufacturing and Powin Mexico. This lease is through September 30, 2021 and requires the Company to pay for all property taxes, utilities and facility maintenance.

Effective January 1, 2016, the Company entered into a lease amendment. The Company’s subsidiary, Powin Energy leased 35,048 square feet of the building. The new lease term is through September 30, 2021 and all property taxes, utilities and facility maintenance were charge at $0.15 per square foot per month by Lu Pacific Properties, LLC. The monthly rental expense is $18,303.

Effective January 1, 2016, the Company’s affiliate, Q Pacific Contract Manufacturing, entered into a lease agreement. The Company leased 9,500 square feet of the building. The lease term is through September 30, 2021.This lease required the Company to pay for all property taxes, utilities and facility maintenance (“fees”). The monthly rental expense and fees is $5,518.

The Company leased a facility to Q Pacific Manufacturing, which is owned by Lu Pacific Properties, LLC, which lease expired on October 31, 2014 and which was extended to October 31, 2019.  This lease required the Company to pay for all property taxes, utilities and facility maintenance. The monthly rental expense is $15,594.

The Powin Mexico leases a manufacturing facility owned by Lu Pacific Properties, LLC in Saltillo Coahuila Mexico. This lease is through May 31, 2021 and requires the Company to pay for all property taxes, utilities and facility maintenance. The monthly rental expense is $12,133.

Minimum future lease payments under non-cancelable operating leases are as follows:

Year ending September 30,
2017	$	282,722
2018		282,722
2019		282,722
2020		282,722
2021		212,042
Thereafter		-
Total	$	1,342,930

For the nine months ended September 30, 2016 and 2015, total lease expense paid for all operating rents and leases was $212,042 and $316,620, respectively. For the three months ended September 30, 2016 and 2015, total lease expense paid for all operating rents and leases was $70,681 and $105,540, respectively. These leases are also disclosed in Note 10, related party transactions.

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Capital stock

9 Months Ended

Sep. 30, 2016

Capital stock [Abstract]

Capital stock

Note 8:  Capital stock

The Company has two classes of preferred stock and one class of common stock. The Series A Preferred Stock has a $100 face value per share with a conversion rate of one (1) share of Preferred Stock for twenty (20) shares of Common Stock. The 2015 August Preferred Stock carries a par value of $0.56 per shares and is convertible into Common Stock at the rate of 1for1.

Preferred Stock

The Series A Preferred Stock is convertible at a rate of one (1) preferred share to twenty (20) shares of Powin Corporation common stock. The Series A Preferred Stock calls for dividends of 12%, declared semi-annually, and paid in additional Series A Preferred Stock. In 2016 and 2015, we issued 618 and 1,135shares of Series A Preferred Stock as dividends respectively, increasing the Series A Preferred Stock by $61,800 and $113,500 and decreasing additional paid in capital. As of September 30, 2016 and December 31, 2015, there are 1,085,500 and 1,023,700 shares of Series A Preferred Stock outstanding, respectively.

Common Stock

For the three months ended March 31, 2015 the Company issued 3,000 shares of common stock to six members of its Board of Directors as compensation for their services based on the fair value of the shares valued at $1.95 per share for their service. The value of these shares is $5,850.  For the three months ended June 30, 2015 the Company issued 3,000 shares of common stock to six members of its Board of Directors as compensation for their services based on the fair value of the shares valued at $0.56 per share for their service. The value of these shares is $1,680. For the three months ended September 30, 2015 the Company issued 3,000 shares of common stock to six members of its Board of Directors as compensation for their services based on the fair value of the shares valued at $0.90 per share for their service. The value of these shares is $2.700. For the three months ended December 31, 2015 the Company issued 3,000 shares of common stock to six members of its Board of Directors as compensation for their services based on the fair value of the shares valued at $0.65 per share for their service. The value of these shares is $1,980.

For the three months ended June 30, 2016 the Company issued 6,000 shares of common stock to the six members of its Board of Directors as compensation for their services based on the fair value of the shares valued at $0.30 per share.

On September 6, 2016, the Company issued 89,961 shares to Quidnick Energy Development, LLC as compensation for consulting services.

The Company issued its August 2015 Preferred Stock (“Preferred Stock”)  in August 2015 in satisfaction of the notes payable described in the table below. The holders of the Preferred Stock do not have a dividend preference over the Company’s common stock and have the same voting rights as the holders of common stock. The Preferred Stock is convertible into the Company’s common stock at the rate of one (1) share of Preferred Stock for one (1) share of common stock. The holders of the Preferred Stock are entitled to a liquidation preference over the holders of common stock equal to $0.56 per share. The full rights, preferences and privileges of the Preferred Stock are set forth in the Certificate of Designation which was filed in the 8K report on August 6, 2015. In August 2016, 13,625,826 shares of August 2015 preferred stock had converted into common stock.

Lender	Borrower	Amount	Number of Shares of Preferred Stock
3U Trading Co., Limited	Powin Corporation	$2,451,195	4,377,133
3U Trading Co., Limited	Powin Industries S.A. DE C.V.	$211,474	377,631
Joseph Lu	Powin Corporation	$3,333,091	5,951,947
Danny Lu	Powin Corporation	$560,565	1,001,009
Peter Lu	Powin Corporation	$560,565	1,001,009
Lu Pacific Properties, LLC	Powin Corporation	$513,574	917,097
Total		$7,630,464	13,625,826

In addition, on April 15, 2013, the Company issued a Warrant to Purchase Common Stock to Global Storage Group, LLC for 70,000 shares of the Company’s common stock at an exercise price of $25.00; and a Warrant to Purchase Common Stock to Virgil L. Beast on for 30,000 shares of the Company’s common Stock at an exercise price of $25.00. The exercise period of each Warrant is 60 months from the date of issuance and may be exercised in whole or in part at any time prior to April 15, 2018. As of September 30, 2016 and December 31, 2015, all 100,000 warrants remain outstanding.

					Average
			Weighted		Remaining
			average exercise		Contractual Life		Aggregate
	Warrants		price		(Years)		Intrinsic Value
Outstanding at December 31, 2015		100,000	$	25		2.4	$	-
Exercisable at December 31, 2015		100,000	$	25		2.4	$	-
Warrants granted		-		-		-		-
Warrants exercised		-		-		-		-
Warrants forfeited		-		-		-		-
Outstanding at September 30, 2016		100,000	$	25		1.65	$	-
Exercisable at September 30, 2016		100,000	$	25		1.65	$	-

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Stock options

9 Months Ended

Sep. 30, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock options

Note 9: Stock options
 

In February 2011, the Company’s Board of Directors approved the adoption of the Powin Corporation 2011 Stock Option Plan (“the Plan”) and submitted its ratification to the shareholders at the shareholders’ meeting held June 15, 2011, where the shareholders approved the Plan.

The Company records stock-based compensation expense related to stock options and the stock incentive plan in accordance with ASC 718, “Compensation – Stock Compensation”.

On June 15, 2011, the Company granted awards in the form of incentive stock options to its key employees for 1,170,000 shares of common stock.  There were no stock options granted in 2012. On August 6, 2013, the Company granted another 1,640,000 stock options under the same plan to all employees. Awards are granted with an exercise price that approximates the market price of the Company’s common stock at the date of grant. The 2013 grant included immediate vesting of 20% of the options resulting in greater expense recognized than in previous years.

The fair value of each option award is estimated on the date of grant using the Black-Scholes option valuation model using. The following assumptions were used to determine the fair value of the options at date of original issuance on August 6, 2013:

Dividend Yield	0	%
Expected volatility	161.80	%
Risk-free interest rate	1.39	%
Term in years	9.92

The Company has never paid a cash dividend and does not intend to pay cash dividends in the foreseeable future, so the dividend yield used in the calculation is 0%.The expected volatility is based on the daily historical volatility of comparative companies, measured over the expected term of the option.  The risk-free rate is based on the implied yield on a United States Treasury zero-coupon issue with a remaining term closest to the expected term of the option. The term of the option is the expiration as there is no ready market for employees to exercise and sell shares and to date no option has been exercised on the 2011 plan.

A summary of option activity as is presented below:

							Average
				Weighted			Remaining
				average exercise			Contractual Life		Aggregate
	Options			price			(Years)		Intrinsic Value
Outstanding at December 31, 2015		158,000			$	5.8		5.84		$	312,000
Exercisable at December 31, 2015		99,095			$	6.8		5.05		$	149,931
Options granted		-				-		-			-
Options exercised		-				-		-			-
Options forfeited		(23,000	)			5.8		-			-
Outstanding at September 30, 2016		135,000			$	5.8		5.09		$	-
Exercisable at September 30, 2016		104,878			$	6.6		4.46		$	-

Stock option expense included in operating expense for the nine months ended September 30, 2016 and 2015 is $55,060 and $127,737, respectively. Stock option expense included in operating expense for the three months ended September 30, 2016 and 2015 is $34,436 and $41,062, respectively. As of September 30, 2016 and December 31, 2015, remaining unvested stock expenses amounted to $92,604 and $225,017, respectively.

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Related party transactions

9 Months Ended

Sep. 30, 2016

Related Party Transactions [Abstract]

Related party transactions

Note 10:  Related party transactions

Rent From Related Parties

All of the Company’s facilities are owned by Lu Pacific Properties, LLC, an Oregon limited liability company, controlled by Joseph Lu (“Mr. Lu”), CEO and Chairman of the Board. Rent expenses were $212,042 and $316,620 for the nine months ended September 30, 2016 and 2015, respectively. Rent expenses were $70,681 and $105,540 for the three months ended September 30, 2016 and 2015, respectively. Rental rates are deemed to be and were derived by local market rates for the rents when the contracts were entered.

Purchase from Related Parties

Mr. Lu’s son, Danny Lu, owns 49% of Yangzhou Finway Energy Tech Co. since May 2016. The Company made purchase from Yangzhou Finway Energy Tech Co. in the amount of $171,417 and $0for the nine months ended September 30, 2016 and 2015, respectively. Amounts due to Yangzhou Finway Energy Tech Co. amounted to $174,003 and $43,156 at September 30, 2016 and December 31, 2015, respectively.

The Company made purchases from Quailhurst Vineyard Estates, an Oregon company, controlled by Joseph Lu in the amount of $8,529 and $0 for the nine months ended September 30, 2016 and 2015, respectively. Amounts due to Quailhurst Vineyard Estates amounted to $3,332 and $0 at September 30, 2016 and December 31, 2015, respectively.

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Business segment reporting

9 Months Ended

Sep. 30, 2016

Segment Reporting [Abstract]

Business segment reporting

Note 11:  Business segment reporting

Basis for Presentation

Our operating businesses are organized based on the nature of markets and customers. Segment accounting policies are the same as described in Note 1.

Effects of transactions between related companies are eliminated and consist primarily of inter-company transactions and transfers of cash or cash equivalents from corporate to support each business segment’s payroll, inventory sourcing and overall operations when each segment has working capital requirements. Corporate overhead costs are allocated to segments based on management’s estimates of the consumption of such services by each segment.

A description of our operating segments as of September 30, 2016 and December 31, 2015, follows.

Contract manufacturing (formerly OEM):

Outsourced manufacturing for North American companies, including senior citizen safety products; steel gun safes; outdoor cooking equipment; trampolines; plastic products and small electronic appliances. Contract manufacturing also offers logistic services and a qualified engineer team to support and provide in-house design.

Manufacturing (formerly QBF):

Our manufacturing segment, Powin Manufacturing formerly named Quality Bending and Fabrication (“QBF”), manufactures various truck parts and components primarily for Freightliner Trucks, a division of Daimler Trucks North America, the largest manufacturer of heavy-duty vehicles in North America. Daimler Trucks North America designs, builds and markets a wide range of Class 3-8 vehicles including long-haul highway tractors, heavy-duty construction and vocational trucks, mid-range trucks for distribution and service, school and transit buses, fire and emergency service apparatus, and chassis for step vans, school and shuttle buses, and motor homes.  Freightliner Trucks is headquartered in Portland, Oregon, with truck manufacturing facilities located in Portland and throughout the United States and Mexico.

Manufacturing is completed at the Company’s leased facility in Tualatin, Oregon as well as arranging the outsourced manufacturing at a third-party factory in Qingdao, China.

Energy:

Powin Energy has developed market leading architecture that utilizes proprietary patent-pending energy storage technology for scalable grid energy storage systems, power supply units for electric vehicles, and transportation applications. Through December 31, 2014, the Energy segment has focused on identifying target markets and applications and finalizing the development of products to serve those markets and applications. In 2015, The Company has continued to develop products and marketing strategies for this operating entity.

Product & Service (formerly Channel Partner Program, Warehousing and Wooden)

The Product & Service segment contains the legacy operations of Channel Partner Program, a distribution channel for North American companies to sell their products in China as well as selling certain consumer products through U.S.-based retailers and marketplaces, including online; and Warehousing, which provides warehousing services in support of the Company’s customers across all segments. On January 1, 2015, the Product & Service segment had been incorporated into our contract manufacturing segment.

Powin Mexico:

Powin Mexico is a manufacturing segment, currently manufacturing gun safes, but also capable of manufacturing heavy truck parts. Operations began in 2013.

Effective October 3, 2016(see Note13&14), the Company entered into a Stock Purchase Agreement with Powin Industries, SA de CV (“Powin Mexico”) and Rolland Holding Company, LLC (“Rolland”)pursuant to which   Company sold to Rolland 99 shares of  the Series A Common Stock and the 167,452 shares of the Series B Common Stock of  Powin Mexico  which represents 99% of the Series A Common Stock and 100% of the Series B Common Stock (collectively the “Shares”) of  Powin Mexico.  The closing date of the Agreement was October 4, 2016 (“Closing”).The purchase price for the Shares was $999,000. At Closing, Rolland made a cash payment of $99,000 and delivered to the Company (i) its promissory note in the  principal amount $100,000 bearing interest at 4% per annum with principal and interest payable in twelve (12) equal monthly installments (“Short Term Note”); and (ii) its promissory note in the principal amount of $800,000 bearing interest at 5% per annum with principal and interest payable in ninety-six (96) equal monthly installments (“Long Term Note”). The interest rate on the Long Term Note will be renegotiated if and when the Prime Rate for the U.S reaches 5%.In addition, Powin Mexico delivered to the Company a non-interest bearing promissory note in the amount of $125,000 (“Powin Mexico Note”) which calls for four (4) equal monthly installments of $31,250 on each of December 31, 2017, December 31, 2018, December 31, 2019 and December 31, 2020. The Powin Mexico Note represents a compromised amount representing the difference between the amount of the Powin Mexico accounts receivable and the amount of the Powin Mexico accounts payable owing to the Company.The Purchase Agreement contains customary warranties and representation.  Amounts due under the Short Term Note, the Long Term Note and the Powin Mexico Note, respectively,  may be accelerated upon a failure to pay amounts due thereunder when due, unless waived or cured. As a consequence of the Purchase Agreement, Powin Mexico ceased being a subsidiary of Powin Corporation.

Effective October 18, 2016(see Note13&14), the Company entered into a Stock Purchase Agreement with Weiping Cai (“Cai”) pursuant to which the Company sold to Cai all of the issued and outstanding shares of Common Stock (“Shares”) of   Q Pacific Corporation, the Company’s wholly-owned subsidiary, which wholly-owns and operates Q Pacific Contract Manufacturing and Q Pacific Manufacturing Corporation, the Company’s second tier subsidiaries, collectively referred to as (“QPM”). In addition to the sale of the Shares, the Company also transferred and assigned to Cai all of the Company’s right, title and interest in and to the “Huntsman” tradename held by Q Pacific Contract Manufacturing Corporation.

Revenues and net loss before income taxes of each of the Company’s segments are as follows:  

	Nine months ended September 30,
	2016 (unaudited)		2015 (unaudited)
Revenue
Energy		33,243		127,638
Consolidated	$	33,243	$	127,638

	Three months ended September 30,
	2016 (unaudited)		2015 (unaudited)
Revenue
Energy		11,847		40,979
Consolidated	$	11,847	$	40,979

	Nine months ended September 30,
	2016 (unaudited)			2015 (unaudited)
(Loss) before income taxes
Energy		(2,969,105	)		(3,639,139	)
Corporate		(19,488	)		110,514
Consolidated	$	(2,988,593	)	$	(3,528,625	)

	Three months ended September 30,
	2016 (unaudited)			2015 (unaudited)
(Loss) before income taxes
Energy		(986,558	)		(1,266,330	)
Corporate		(26,990	)		(7,042	)
Consolidated	$	(1,013,548	)	$	(1,273,372	)

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Non-Controlling Interest

9 Months Ended

Sep. 30, 2016

Noncontrolling Interest [Abstract]

Non-Controlling Interest

Note 12: Non-Controlling Interest

On August 8, 2014, Powin Corporation and its wholly-owned subsidiary, Powin Energy Corporation (collectively “Powin”) and SF Suntech, Inc. (“Suntech”) signed a Share Subscription Agreement (“Subscription Agreement”) for an investment of $25,000,000 from Suntech. Suntech is a third party.

Effective April 2, 2015, Powin and Suntech signed the Fourth Supplemental Agreement (“Supplement”).Under the Supplement, the First Closing Date of the Subscription Agreement was April 2, 2015 (“First Closing”) at which time Suntech made a payment to Powin in the amount of $7,450,000. That payment plus the previous payments of $3,000,000 on August 29, 2014; $2,000,000 on January 15, 2015 and $50,000 on March 2, 2015 represent a total $12,500,000 paid toward the full $25,000,000 owing under the Subscription Agreement.  On April 1, 2015 and April 2, 2015, Powin Energy issued 1,765 shares and 378 shares of Powin Energy Common Stock to Suntech, respectively for $12,500,000 received. Professional expenses of $750,000 were recorded as deduction of the cash received.

Per ASC 810-10-45-22, Powin Corporation’s ownership interest in Powin Energy has changed as Powin Corporation sold 2,143 shares (approximately 17.65% of outstanding shares after the sales of 2,143 shares) of Powin Energy’s common shares to Suntech. After this transaction, Powin Corporation's ownership interest in Powin Energy is 82.35%. Since, Powin Corporation retained its controlling financial interest in Powin Energy after the shares issuance for cash to Suntech; the sale of the subsidiary shares was accounted for as an equity transaction in accordance with ASC 810-10-45-23. Specifically, the proceeds received from the sale $12,500,000 offset by professional expenses of $750,000 are reflected as an increase to additional paid in capital and the net asset value associated with this sold interest $1,552,272 was reclassified from additional paid in capital to no controlling interests. 

The Supplement further established the Second Closing Date of the Subscription Agreement as May 31, 2015 (“Second Closing”) when the balance of $12,500,000 was to be paid. If that payment was made, Powin would issue to Suntech an additional 2,143 shares of Powin Energy Common Stock.  In the event Suntech was unable or unwilling to pay the remaining subscription balance, Powin would be free to sell the 2,143 shares to another purchaser for the same price per share as paid by Suntech. Suntech failed to make the required payment on May 31, 2015. Accordingly, the Company elected to terminate the Subscription Agreement, as it pertained to the remaining $12,500,000 owing thereunder.

On January 2016, the company paid $15,747 and bought the 15% interest in the company’s Mexico subsidiary. The Company now owns 100% of the Mexico subsidiary. As of the purchase date, the non-controlling interest of Mexico amounted to $802,577. The difference of purchase price and balance of non-controlling interest is booked as additional paid in capital.

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Discontinued Operations

9 Months Ended

Sep. 30, 2016

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

Note 13: Discontinued Operations

Effective October 3, 2016(see Note 14- “Subsequent events”), the Company entered into a Stock Purchase Agreement with Powin Industries, SA de CV (“Powin Mexico”) and Rolland Holding Company, LLC (“Rolland”)pursuant to which the Company sold to Rolland 99 shares of  the Series A Common Stock and the 167,452 shares of the Series B Common Stock of  Powin Mexico  which represents 99% of the Series A Common Stock and 100% of the Series B Common Stock (collectively the “Shares”) of  Powin Mexico.  The closing date of the Agreement was October 4, 2016 (“Closing”).

Effective October 18, 2016(see Note 14 - “Subsequent events”), the Company entered into a Stock Purchase Agreement with Weiping Cai (“Cai”) pursuant  to which the Company sold to Cai all of the issued and outstanding shares of  Common Stock (“Shares”) of   Q Pacific Corporation, the Company’s wholly-owned subsidiary, which wholly-owns and operates Q Pacific Contract Manufacturing and Q Pacific Manufacturing Corporation, the Company’s second tier subsidiaries, collectively referred to as (“QPM”). In addition to the sale of the Shares, the Company also transferred and assigned to Cai all of the Company’s right, title and interest in and to the “Huntsman” tradename held by Q Pacific Contract Manufacturing Corporation.

The Company’s results of operations related to Powin Mexico and Q Pacific Corporation which wholly-owns and operates Q Pacific Contract Manufacturing and Q Pacific Manufacturing Corporation have been reclassified as discontinued operations on a retrospective basis for all periods presented.

Balances for Powin Mexico and Q Pacific Corporation as of September 30, 2016 and December 31, 2015 are as follows:

	September 30, 2016		December 31,2015
Assets held for sale - current	$	3,055,639	$	4,317,419
Assets held for sale- noncurrent		850,491		1,077,143
Liabilities held for sale - current		1,915,443		1,682,603

The operating results of Powin Mexico and Q Pacific Corporation for the nine months ending September 30, 2016 and 2015 classified as discontinued operations are summarized below:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2016			2015			2016			2015
Sales	$	2,246,978		$	2,499,630		$	7,135,534		$	8,267,937
Cost of Goods Sold		1,917,861			2,234,723			6,121,675			7,063,565
Gross Profit		329,117			264,907			1,013,859			1,204,372
Operating Expenses		1,380,366			691,597			2,831,687			2,128,840
Other Income (Expense)		85,583			(4,105	)		97,921			(17,447	)
Income Tax Expense		-			-			-			-
Net loss from discontinued operations	$	(965,666	)	$	(430,795	)	$	(1,719,907	)	$	(941,915	)

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Subsequent events

9 Months Ended

Sep. 30, 2016

Subsequent Events [Abstract]

Subsequent events

Note 14: Subsequent events

Effective October 3, 2016, the Company entered into a Stock Purchase Agreement with Powin Industries, SA de CV (“Powin Mexico”) and Rolland Holding Company, LLC (“Rolland”) pursuant to which the Company sold to Rolland 99 shares of the Series A Common Stock and the 167,452 shares of the Series B Common Stock of Powin Mexico which represents 99% of the Series A Common Stock and 100% of the Series B Common Stock (collectively the “Shares”) of Powin Mexico. The closing date of the Agreement was October 4, 2016 (“Closing”).The purchase price for the Shares was $999,000. At Closing, Rolland made a cash payment of $99,000 and delivered to the Company (i) its promissory note in the principal amount $100,000 bearing interest at 4% per annum with principal and interest payable in twelve (12) equal monthly installments (“Short Term Note”); and (ii) its promissory note in the principal amount of $800,000 bearing interest at 5% per annum with principal and interest payable in ninety-six (96) equal monthly installments (“Long Term Note”). The interest rate on the Long Term Note will be renegotiated if and when the Prime Rate for the U.S reaches 5%. In addition, Powin Mexico delivered to the Company a non-interest bearing promissory note in the amount of $125,000 (“Powin Mexico Note”) which calls for four (4) equal monthly installments of $31,250 on each of December 31, 2017, December 31, 2018, December 31, 2019 and December 31, 2020. The Powin Mexico Note represents a compromised amount representing the difference between the amount of the Powin Mexico accounts receivable and the amount of the Powin Mexico accounts payable owing to the Company. The Purchase Agreement contains customary warranties and representation.  Amounts due under the Short Term Note, the Long Term Note and the Powin Mexico Note, respectively,  may be accelerated upon a failure to pay amounts due thereunder when due, unless waived or cured. As a consequence of the Purchase Agreement, Powin Mexico ceased being a subsidiary of Powin Corporation.

Effective October 18, 2016, the Company entered into a Stock Purchase Agreement with Weiping Cai (“Cai”) pursuant to which the Company sold to Cai all of the issued and outstanding shares of Common Stock (“Shares”) of Q Pacific Corporation, the Company’s wholly-owned subsidiary, which wholly-owns and operates Q Pacific Contract Manufacturing and Q Pacific Manufacturing Corporation, the Company’s second tier subsidiaries, collectively referred to as (“QPM”). In addition to the sale of the Shares, the Company also transferred and assigned to Cai the Company’s right, title and interest in and to the “Huntsman” tradename held by Q Pacific Contract Manufacturing Corporation.

On October 6, 2016, the merger between Powin Corporation and Powin Energy Corporation became effective, pursuant to a First Amended and Restated Agreement and Plan of Merger and Liquidation dated, (the "Merger Agreement"). Powin Corporation is the surviving entity with a name change to Powin Energy Corporation and will continue to be traded under the stock symbol PWON.

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Description of Business and History And Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of preparation

Basis of preparation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information required by GAAP for complete annual financial statement presentation.

In the opinion of management, all adjustments (consisting only of normal and recurring adjustments) necessary for a fair presentation of the results of operations have been included in the accompanying unaudited condensed consolidated financial statements. Operating results for the nine-month period ended September 30, 2016, are not necessarily indicative of the results to be expected for other interim periods or for the full year ended December 31, 2016. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and accompanying notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, as filed with the Securities Exchange Commission.

Principles of consolidation

Principles of consolidation

The accompanying unaudited condensed consolidated financial statements include the accounts of Powin Energy Corporation and its subsidiaries. All intercompany transactions and balances have been eliminated. Equity investments through which the Company exercises significant influence over but does not control the investee and is not the primary beneficiary of the investee’s activities are accounted for using the equity method. Investments through which the Company is not able to exercise significant influence over the investee are accounted for under the cost method.

Foreign currencies

Foreign currencies

Assets and liabilities recorded in foreign currencies are translated to U.S. dollars at the exchange rate on the balance sheet date. Revenue and expenses are translated to U.S. dollars at average rates of exchange prevailing during the year. Translation adjustments resulting from this process are recorded to other comprehensive income (“OCI”).

The reporting currency of the Company is the U.S. dollars. The Company’s Mexico subsidiary Powin Industries S.A. de C.V uses Mexican Peso as its functional currency. The results of operations and cash flows are translated at average exchange rates during the period, and assets and liabilities are translated at the unified exchange rates at the balance sheet dates, and equity is translated at the historical exchange rates. As a result, amounts related to assets and liabilities reported on the statements of cash flows will not necessarily agree with changes in the corresponding accounts on the balance sheets. Translation adjustments resulting from this process are included in accumulated other comprehensive income in the statements of stockholders’ equity. Translation adjustments for the nine months ended September 30, 2016 and 2015 were $(35,695) and $(25,868), respectively. Translation adjustments for the three months ended September 30, 2016 and 2015 were $(33,126) and $(3,595), respectively. The cumulative translation adjustment and effect of exchange rate changes on cash, which was recorded as accumulated other comprehensive loss on the balance sheet, as of September 30, 2016 and December 31, 2015 were $(91,871) and $(56,176), respectively. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred.

Assets and liabilities were translated at 19.41PESO and 17.34 PESO to $1.00 at September 30, 2016 and December 31, 2015, respectively. The equity accounts were stated at their historical rates. The average translation rates applied to income statements for the nine months ended September 30, 2016 and 2015 were 19.41PESO and 17.58 PESO to $1.00, respectively. Cash flows are also translated at average translation rates for the period; therefore, amounts reported on the statement of cash flows will not necessarily agree with changes in the corresponding balances on the balance sheet.

Use of estimates

Use of estimates

The preparation of consolidated financial statements in accordance with GAAP requires the use of management’s estimates. These estimates are subjective in nature and involve judgments that affect the reported amounts of assets and liabilities, and the reported amounts of revenues and expenses during the periods presented. Actual results could differ from those estimates.

We maintain allowances for accounts receivable for estimated uncollectable accounts receivable due to the inability of our customers to make required payments. We maintain impairment for inventory for estimated inventory loss. We maintain allowances for returns for estimated losses resulting from product returns. These estimates have historically been within our expectations and the provisions established.

Revenue recognition

Revenue recognition

The Company recognizes revenue when persuasive evidence of an arrangement exists, the service is performed or delivery has occurred, the price is fixed or determinable, and collectability is reasonably assured.

For product shipped directly from the Company’s warehouse or manufactured by the Company in the United States and then shipped to the customer, revenue is recognized at time of shipment as it is determined that ownership and title has passed to the customer at shipment and revenue is recognized.  Amounts billed to customers for freight and shipping are classified as revenue.

Products imported from China and shipped directly to the customer may be either FOB Port of Origin or FOB Shipping Destination United States. If the product is shipped FOB Port of Origin revenue is recognized at time of delivery to the Company’s representative in China, when the proper bills-of-lading have been signed by the customer’s agent and ownership passed to the customer.  For product shipped FOB Shipping Destination U.S., revenue is recognized when product is off-loaded at the United States Port of Entry and delivered to the customer, when all delivery documents have been signed by the receiving customer, and ownership has passed to the customer. 

For orders placed requiring customized manufacturing, the Company requires the customer to issue its signed purchase order with documentation identifying the specifics of the product to be manufactured. Revenue is recognized on customized manufactured products upon delivery of the product.  If the customer cancels the purchase order after the manufacturing process has begun, the Company invoices the customer for any manufacturing costs incurred and revenue is recognized.  Orders canceled after delivery has occurred are fully invoiced to the customer and revenue is recognized, provided all other revenue recognition criteria are met.

Cost of goods sold

Cost of goods sold

Cost of goods sold includes cost of inventory sold during the period, net of discounts and allowances, freight and shipping costs, warranty and rework costs, and sales tax.

Advertising

Advertising

The Company expenses the cost of advertising as incurred.  For the nine months ended September 30, 2016 and 2015, the amount charged to advertising expense was $21,280 and $118,255, respectively. For the three months ended September 30, 2016 and 2015, the amount charged to advertising expense was $16,187 and $71,169, respectively.

Research and development

Research and development

Research and development expenses include payroll, employee benefits, stock-based compensation expense, and other headcount-related expenses associated with product development. Research and development expenses also include third-party development and programming costs, localization costs incurred to translate software for international markets, and the amortization of purchased software code and services content. Such costs related to software development are included in research and development expense until the point that technological feasibility is reached, which for our software products, is generally shortly before the products are released to manufacturing. Once technological feasibility is reached, such costs are capitalized and amortized to cost of revenue over the estimated lives of the products.

Loss Per Share

Loss Per Share

Basic loss per share is based on the weighted-average effect of all common shares issued and outstanding, and is calculated by dividing net loss by the weighted-average shares outstanding during the year. Diluted loss per share is calculated by dividing net income by the weighted-average number of common shares used in the basic loss per share calculation plus the number of common shares that would be issued assuming exercise or conversion of all potentially dilutive common shares outstanding. The Company excludes equity instruments from the calculation of diluted earnings per share if the effect of including such instruments is antidilutive. Please refer to Note 6 for further discussion.

Comprehensive loss

Comprehensive loss

Comprehensive loss is defined to include all changes in equity except those resulting from investments by owners and distributions to owners. Among other disclosures, ASC 220, Comprehensive loss requires that all items that are required to be recognized under current accounting standards as components of comprehensive loss be reported in a financial statement that is displayed with the same prominence as other financial statements. For the years presented, the Company’s comprehensive loss includes net loss and foreign currency translation adjustments and is presented in the consolidated statements of comprehensive loss.

Cash

Cash

The Company considers all highly liquid investments with maturity of nine months or less to be cash equivalents. The cash deposits in U.S. financial institutions exceed the amounts insured by the U.S. government. The standard insurance amount is $250,000 per depositor, per insured bank. Non-performance by these institutions could expose the Company to losses for amounts in excess of insured balances. At September 30, 2016 and December 31, 2015, the Company’s bank balances exceeded insurances balances by $181,546 and $2,583,046, respectively. At September 30, 2016 and December 31, 2015, the Company had no cash equivalents.

Accounts receivable

Accounts receivable

Accounts receivable are carried at their estimated collectible amounts. Credit is generally extended on a short-term basis; thus, accounts receivable do not bear interest. Accounts receivable are periodically evaluated for collectability based on past credit history with customers and their current financial condition.  Balances outstanding after management has used reasonable collection efforts are written off through a charge to the valuation allowance and a credit to trade accounts receivable. Bad debt expense for the nine months ended September 30, 2016 and 2015 was $0 and $1,500, respectively.

Inventories, net

Inventories, net

Inventories consist of parts and equipment including electronic parts and components, furniture, rubber products, plastic products and exercise equipment.  Inventory is valued at the lower of cost (first-in, first-out method) or market.  The Company capitalizes applicable direct and indirect costs incurred in the Company’s manufacturing operations to bring its products to a sellable state. For the nine months ended September 30, 2016 and 2015, the Company recorded an inventory obsolescence recovery of $0 and provision for inventory obsolescence of $49,198, respectively, which is included in cost of sales. The components of inventories were as follows:

	September 30, 2016 (unaudited)			December 31, 2015
Raw materials	$	719,943		$	303,730
Work in progress		246,700			196,092
Finished goods		721,951			621,303
Reserve for slow moving  and obsolete inventory		(497,726	)		(497,726	)
Inventories, net	$	1,190,868		$	623,399

Property and Equipment

Property and Equipment

Property and equipment are carried at cost less accumulated depreciation and amortization.  For financial reporting and income tax purposes, the costs of property and equipment are depreciated and amortized over the assets estimated useful lives, using principally the straight-line method for financial reporting purposes and an accelerated method for income tax purposes.  Costs associated with repair and maintenance of property and equipment are expensed as incurred.  Changes in circumstances, such as technological advances, changes to the Company’s business model or capital strategy could result in actual useful lives differing from the Company’s estimates.  In those cases where the Company determines that the useful life of property and equipment should be shortened, the Company would depreciate the asset over its revised remaining useful life thereby increasing depreciation expense.

The Company depreciates property and equipment over the following estimated useful lives:

Equipment	7-15 years
Leasehold improvements	39 years
Computers	3-5 years
Vehicles	5-7 years
Furniture and fixtures	3-5 years

The Company reviews the carrying value of property, and equipment for impairment whenever events and circumstances indicate that the carrying value of an asset may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition. In cases where undiscounted expected future cash flows are less than the carrying value, an impairment loss is recognized equal to an amount by which the carrying value exceeds the fair value of assets. The factors considered by management in performing this assessment include current operating results, trends and prospects, the manner in which the property is used, and the effects of obsolescence, demand, competition and other economic factors. Based on this assessment, no impairment expenses for property, and equipment was recorded in operating expenses during the nine months ended September 30, 2016 and 2015.

Intangible Assets

Intangible Assets

All of our intangible assets include websites and also patents that are subject to amortization and are amortized using the straight-line method over their estimated period of benefit, ranging from 3 to 5 years. We evaluate the recoverability of intangible assets periodically by taking into account events or circumstances that may warrant revised estimates of useful lives or that indicates the asset may be impaired.

Non-controlling interests

Non-controlling interests

As of September 30, 2016, non-controlling interests on the consolidated financial statements represented the minority stockholders’ proportionate share of the net income/losses of the Company, an 82.35% owned subsidiary from April 2, 2015.

On August 8, 2014, the Company and its then wholly-owned subsidiary, Powin Energy Corporation (collectively “Powin”) and SF Suntech, Inc. (“Suntech”) signed a Share Subscription Agreement (“Subscription Agreement”) for an investment of $12,500,000 from Suntech. On April 1, 2015 and April 2, 2015, Powin Energy issued 1,765 shares and 378 shares of Powin Energy Common Stock to Suntech, respectively. Professional expenses of $750,000 related to the issuances were deducted from the proceeds received. After the shares issuance, the Company owns 82.35% of Powin Energy.

Non-controlling interests on the consolidated financial statements as of December 31, 2015 includes minority interest of Mexico, an 85% owned subsidiary from February 2011 to January 2016. On January 2016, the company spent $15,747 and bought the 15% minority interest in the company’s Mexico subsidiary. As of September 30, 2016, the Company owns 100% of the Mexico subsidiary.

Income taxes

Income taxes

Deferred tax assets and liabilities are recorded based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company calculates a provision for income taxes using the asset and liability method, under which deferred tax assets and liabilities are recognized by identifying the temporary differences arising from the different treatment of items for tax and accounting purposes. In determining the future tax consequences of events that have been recognized in the consolidated financial statements or tax returns, judgment and interpretation of statutes is required. Additionally, the Company uses tax planning strategies as a part of its tax compliance program. Judgments and interpretation of statutes are inherent in this process.

The accounting guidance for uncertainties in income tax prescribes a comprehensive model for the financial statement recognition, measurement, presentation, and disclosure of uncertain tax positions taken or expected to be taken in income tax returns. The Company recognizes a tax benefit from an uncertain tax position in the consolidated financial statements only when it is more likely than not that the position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits and a consideration of the relevant taxing authority’s widely understood administrative practices and precedents.

Prior to July 8, 2008, the Company had elected under the Internal Revenue Code to be taxed as an S Corporation.  In lieu of corporation income taxes, the stockholder of an S Corporation is taxed on his proportionate share of the Company’s taxable income. Due to the merger on July 8, 2008, the Company is now subject to Federal income tax.

Fair Value Measurements

Fair Value Measurements

The fair value accounting guidance defines fair value as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.” The definition is based on an exit price rather than an entry price, regardless of whether the entity plans to hold or sell the asset. This guidance also establishes a fair value hierarchy to prioritize inputs used in measuring fair value as follows:

• Level 1:  Observable inputs such as quoted prices in active markets;

• Level 2:  Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and

• Level 3:  Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

The carrying value of the Company’s equipment borrowing and short term line of credit borrowing at September 30, 2016 and December 31, 2015, is considered to approximate fair market value, as the interest rates of these instruments are based predominantly on variable reference rates. The carrying value of accounts receivable, trade payables and accrued liabilities approximates the fair value due to their short-term maturities.

Stock-Based Compensation

Stock-Based Compensation

The Company measures stock-based compensation expense for all share-based awards granted to employees based on the estimated fair value of those awards at grant-date under ASC 718.  The cost of restricted stock awards is determined using the fair market value of our common stock on the date of grant.  The fair values of stock option awards are estimated using a Black-Scholes valuation model. The compensation costs are recognized net of any estimated forfeitures on a straight-line basis over the employee requisite service period. Forfeiture rates are estimated at grant-date based on historical experience and adjusted in subsequent periods for any differences in actual forfeitures from those estimates.

Recently Issued Accounting Pronouncements -Not Adopted

Recently Issued Accounting Pronouncements –Not Adopted

The FASB has issued Accounting Standards Update (ASU) No. 2014-15, Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.  ASU 2014-15 is intended to define management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosures.

Under Generally Accepted Accounting Principles (GAAP), financial statements are prepared under the presumption that the reporting organization will continue to operate as a going concern, except in limited circumstances. Financial reporting under this presumption is commonly referred to as the going concern basis of accounting. The going concern basis of accounting is critical to financial reporting because it establishes the fundamental basis for measuring and classifying assets and liabilities.

Currently, GAAP lacks guidance about management’s responsibility to evaluate whether there is substantial doubt about the organization’s ability to continue as a going concern or to provide related footnote disclosures.

This ASU provides guidance to an organization’s management, with principles and definitions that are intended to reduce diversity in the timing and content of disclosures that are commonly provided by organizations today in the financial statement footnotes.

The amendments are effective for annual periods ending after December 15, 2016, and interim periods within annual periods beginning after December 15, 2016. Early application is permitted for annual or interim reporting periods for which the financial statements have not previously been issued.

The FASB and IASB (the Boards) have issued converged standards on revenue recognition. Specifically, the Boards have issued the following documents:

• FASB Accounting Standards Update (ASU) No. 2014-09,  Revenue from Contracts with Customers: Topic 606  ; and

• IFRS 15,  Revenue from Contracts with Customers.

The issuance of these documents completes the joint effort by the Boards to improve financial reporting by creating common revenue recognition guidance for U.S. GAAP and IFRS.

ASU 2014-09 affects any entity using U.S. GAAP that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards (e.g., insurance contracts or lease contracts). This ASU will supersede the revenue recognition requirements in Topic 605,  Revenue Recognition,  and most industry-specific guidance. This ASU also supersedes some cost guidance included in Subtopic 605-35,  Revenue Recognition—Construction-Type and Production-Type Contracts.  In addition, the existing requirements for the recognition of a gain or loss on the transfer of nonfinancial assets that are not in a contract with a customer (e.g., assets within the scope of Topic 360,  Property, Plant, and Equipment,  and intangible assets within the scope of Topic 350,  Intangibles—Goodwill and Other)  are amended to be consistent with the guidance on recognition and measurement (including the constraint on revenue) in this ASU.

The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps:

• Step 1: Identify the contract(s) with a customer.

• Step 2: Identify the performance obligations in the contract.

• Step 3: Determine the transaction price.

• Step 4: Allocate the transaction price to the performance obligations in the contract.

• Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation.

For a public entity, the amendments in this ASU are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted.

Segment reporting

Segment reporting

ASC 280, Segment Reporting, formerly known as Statement of Financial Accounting Standards No. 131, Disclosure about Segments of an Enterprise and Related Information, requires use of the “management approach” model for segment reporting. Under this model, segment reporting is consistent with the manner that the Company’s management organizes segments within the company for making operating decisions and assessing performance. Reportable segments are based on products and services, geography, legal structure, management structure or any other manner in which management disaggregates a company.

A description of our operating segments as of September 30, 2016 and December 31, 2015, follows.

Contract manufacturing (formerly OEM):

Outsourced manufacturing for North American companies, including senior citizen safety products; steel gun safes; outdoor cooking equipment; trampolines; plastic products and small electronic appliances. Contract manufacturing also offers logistic services and a qualified engineer team to support and provide in-house design.

Manufacturing (formerly QBF):

Our manufacturing segment, Powin Manufacturing formerly named Quality Bending and Fabrication (“QBF”), manufactures various truck parts and components primarily for Freightliner Trucks, a division of Daimler Trucks North America, the largest manufacturer of heavy-duty vehicles in North America. Daimler Trucks North America designs, builds and markets a wide range of Class 3-8 vehicles including long-haul highway tractors, heavy-duty construction and vocational trucks, mid-range trucks for distribution and service, school and transit buses, fire and emergency service apparatus, and chassis for step vans, school and shuttle buses, and motor homes.  Freightliner Trucks is headquartered in Portland, Oregon, with truck manufacturing facilities located in Portland and throughout the United States and Mexico.

Manufacturing is completed at the Company’s leased facility in Tualatin, Oregon as well as arranging the outsourced manufacturing at a third-party factory in Qingdao, China.

Energy:

Powin Energy has developed market leading architecture that utilizes proprietary patent-pending energy storage technology for scalable grid energy storage systems, power supply units for electric vehicles, and transportation applications. Through December 31, 2014, the Energy segment has focused on identifying target markets and applications and finalizing the development of products to serve those markets and applications. In 2015, The Company has continued to develop products and marketing strategies for this operating entity.

Product & Service (formerly Channel Partner Program, Warehousing and Wooden)

The Product & Service segment contains the legacy operations of Channel Partner Program, a distribution channel for North American companies to sell their products in China as well as selling certain consumer products through U.S.-based retailers and marketplaces, including online; and Warehousing, which provides warehousing services in support of the Company’s customers across all segments. On January 1, 2015, the Product & Service segment had been incorporated into our contract manufacturing segment.

Powin Mexico:

Powin Mexico is a manufacturing segment, currently manufacturing gun safes, but also capable of manufacturing heavy truck parts. Operations began in 2013.

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Description of Business and History And Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Description of Business and History

As described in this Form 10Q and 2015 Form 10K				As described in previously filings
Legal entity name	Business  segment name			Legal entity name	Business  segment name
Powin Corporation	Holding company			Powin Corporation	Holding company
Q Pacific Contract Manufacturing Corporation	Contract manufacturing			Powin Contract Manufacturing Corporation	Contract manufacturing
Q Pacific Manufacturing Corporation	Manufacturing			Powin Manufacturing Corporation	Manufacturing
Powin Energy Corporation	Energy			Powin Energy Corporation	Energy
Powin Industries S.A. de C.V.	Mexico			Powin Industries S.A. de C.V.	Mexico
Powin Product  Service, Inc.	Contract Manufacturing			Powin Product service, Inc.	Warehousing

Schedule of Inventories

	September 30, 2016 (unaudited)			December 31, 2015
Raw materials	$	719,943		$	303,730
Work in progress		246,700			196,092
Finished goods		721,951			621,303
Reserve for slow moving  and obsolete inventory		(497,726	)		(497,726	)
Inventories, net	$	1,190,868		$	623,399

Schedule of Property and Equipment Estimated Useful Lives

Equipment	7-15 years
Leasehold improvements	39 years
Computers	3-5 years
Vehicles	5-7 years
Furniture and fixtures	3-5 years

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Notes and other receivables (Tables)

9 Months Ended

Sep. 30, 2016

Receivables [Abstract]

Schedule of Notes and Other Receivables

	September 30,2016 (unaudited)		December 31,2015
VAT receivable, Mexico	$	-	$	-
Notes receivable from third parties		-		-
Other		-		883
Reserve for uncollectible VAT receivable		-		-
Notes and other receivables, net	$	-	$	883

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Property and equipment, net (Tables)

9 Months Ended

Sep. 30, 2016

Property, Plant and Equipment [Abstract]

Schedule of Property and Equipment

	September 30, 2016 (unaudited)			December 31, 2015
Equipment	$	50,385		$	50,385
Leasehold improvements		92,131			92,131
Computers		99,365			38,338
Vehicles		32,983			32,983
Furniture and fixtures		-			-
		274,864			213,837
Accumulation depreciation		(79,276	)		(54,330	)
Property and equipment - net	$	195,588		$	159,507

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Loss per share (Tables)

9 Months Ended

Sep. 30, 2016

Loss per share:

Components of Loss per Share

	For the three months endedSeptember 30,						For the nine months ended September30,
	2016 (Unaudited)			2015 (Unaudited)			2016 (Unaudited)			2015 (Unaudited)
Net loss attributable to Powin Corporation(A)		(1,808,955	)		(1,438,344	)		(4,195,861	)		(3,693,206	)
Less preferred share dividends		-			-			(61,800	)		(55,000	)
Net loss available to Powin Corporation (B)		(1,808,955	)		(1,438,344	)		(4,257,661	)		(3,748,206	)
Weighted average outstanding shares of  common stock (C)		23,853,422			16,249,839			18,807,783			16,246,850
Dilutive effect of securities		-			-			-			-
Common stock and common stock equivalents (D)		23,853,422			16,249,839			18,807,783			16,246,850
Loss per share
Basic (B/D)	$	(0.08	)	$	(0.09	)	$	(0.22	)	$	(0.23	)
Diluted (B/D)	$	(0.08	)	$	(0.09	)	$	(0.22	)	$	(0.23	)

Number of shares of common stock underlying outstanding options, warrants, and convertible debt

	September 30, 2016 (unaudited)		December 31, 2015
Series A preferred stock		217,100		204,740
Warrants		100,000		100,000
Stock options		135,000		158,000
August 2015 preferred stock		-		13,625,826
		452,100		14,088,566

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Notes Payable and Long Term Debt (Tables)

9 Months Ended

Sep. 30, 2016

Debt Disclosure [Abstract]

Schedule of Total Carrying Value of Long-Term Debt

	September 30, 2016 (unaudited)				December 31, 2015
	Current		Non Current		Current		Non Current
Equipment loan starting December 18, 2012, due January 1, 2017, with 3.05% interest rate, with  no collateral	$	-	$	-	$	19,271	$	-
Loan from a third party, starting July 5, 2016, due July 4, 2017, with 6% interest  rate, with no collateral		1,484,118		-		-		-
Accrued interest		21,468		-		-		-
Total long-term debt, including current portion and accrued interest	$	1,505,586	$	-	$	19,271	$	-

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Commitments (Tables)

9 Months Ended

Sep. 30, 2016

Commitments and Contingencies Disclosure [Abstract]

Schedule of Future Minimum Lease Payments Under Non-Cancelable Operating Leases

Year ending September 30,
2017	$	282,722
2018		282,722
2019		282,722
2020		282,722
2021		212,042
Thereafter		-
Total	$	1,342,930

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Capital stock (Tables)

9 Months Ended

Sep. 30, 2016

Capital stock [Abstract]

Schedule of preferred stock issued to settle notes payable

Lender	Borrower	Amount	Number of Shares of Preferred Stock
3U Trading Co., Limited	Powin Corporation	$2,451,195	4,377,133
3U Trading Co., Limited	Powin Industries S.A. DE C.V.	$211,474	377,631
Joseph Lu	Powin Corporation	$3,333,091	5,951,947
Danny Lu	Powin Corporation	$560,565	1,001,009
Peter Lu	Powin Corporation	$560,565	1,001,009
Lu Pacific Properties, LLC	Powin Corporation	$513,574	917,097
Total		$7,630,464	13,625,826

Schedule of Warrants

					Average
			Weighted		Remaining
			average exercise		Contractual Life		Aggregate
	Warrants		price		(Years)		Intrinsic Value
Outstanding at December 31, 2015		100,000	$	25		2.4	$	-
Exercisable at December 31, 2015		100,000	$	25		2.4	$	-
Warrants granted		-		-		-		-
Warrants exercised		-		-		-		-
Warrants forfeited		-		-		-		-
Outstanding at September 30, 2016		100,000	$	25		1.65	$	-
Exercisable at September 30, 2016		100,000	$	25		1.65	$	-

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Stock options (Tables)

9 Months Ended

Sep. 30, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Fair Value Assumptions in Options Valuations

Dividend Yield	0	%
Expected volatility	161.80	%
Risk-free interest rate	1.39	%
Term in years	9.92

Summary of Stock Option Activity

							Average
				Weighted			Remaining
				average exercise			Contractual Life		Aggregate
	Options			price			(Years)		Intrinsic Value
Outstanding at December 31, 2015		158,000			$	5.8		5.84		$	312,000
Exercisable at December 31, 2015		99,095			$	6.8		5.05		$	149,931
Options granted		-				-		-			-
Options exercised		-				-		-			-
Options forfeited		(23,000	)			5.8		-			-
Outstanding at September 30, 2016		135,000			$	5.8		5.09		$	-
Exercisable at September 30, 2016		104,878			$	6.6		4.46		$	-

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Business segment reporting (Tables)

9 Months Ended

Sep. 30, 2016

Segment Reporting [Abstract]

Summary of Information by Segment

	Nine months ended September 30,
	2016 (unaudited)		2015 (unaudited)
Revenue
Energy		33,243		127,638
Consolidated	$	33,243	$	127,638

	Three months ended September 30,
	2016 (unaudited)		2015 (unaudited)
Revenue
Energy		11,847		40,979
Consolidated	$	11,847	$	40,979

	Nine months ended September 30,
	2016 (unaudited)			2015 (unaudited)
(Loss) before income taxes
Energy		(2,969,105	)		(3,639,139	)
Corporate		(19,488	)		110,514
Consolidated	$	(2,988,593	)	$	(3,528,625	)

	Three months ended September 30,
	2016 (unaudited)			2015 (unaudited)
(Loss) before income taxes
Energy		(986,558	)		(1,266,330	)
Corporate		(26,990	)		(7,042	)
Consolidated	$	(1,013,548	)	$	(1,273,372	)

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Discontinued Operations (Tables)

9 Months Ended

Sep. 30, 2016

Discontinued Operations and Disposal Groups [Abstract]

Schedule of Balances for Powin Mexico and Q Pacific Corporation

	September 30, 2016		December 31,2015
Assets held for sale - current	$	3,055,639	$	4,317,419
Assets held for sale- noncurrent		850,491		1,077,143
Liabilities held for sale - current		1,915,443		1,682,603

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2016			2015			2016			2015
Sales	$	2,246,978		$	2,499,630		$	7,135,534		$	8,267,937
Cost of Goods Sold		1,917,861			2,234,723			6,121,675			7,063,565
Gross Profit		329,117			264,907			1,013,859			1,204,372
Operating Expenses		1,380,366			691,597			2,831,687			2,128,840
Other Income (Expense)		85,583			(4,105	)		97,921			(17,447	)
Income Tax Expense		-			-			-			-
Net loss from discontinued operations	$	(965,666	)	$	(430,795	)	$	(1,719,907	)	$	(941,915	)

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Description of Business and History And Summary of Significant Accounting Policies (Narrative) (Details)				1 Months Ended	3 Months Ended		9 Months Ended
	Oct. 03, 2016 USD ($) shares	Apr. 03, 2015 shares	Apr. 02, 2015 shares	Aug. 31, 2014 USD ($)	Sep. 30, 2016 USD ($)	Sep. 30, 2015 USD ($)	Sep. 30, 2016 USD ($)	Sep. 30, 2015 USD ($)	Jan. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)	Aug. 08, 2014	Feb. 28, 2011
Translation adjustments					$ (33,126)	$ (3,595)	$ (35,695)	$ (25,868)
Effect of exchange rate changes on cash					(91,871)		(91,871)			$ (56,176)
Advertising expense					16,187	$ 71,169	21,280	118,255
Standard insurance amount per depositor, per insured bank					250,000		250,000
Bank balances exceeding insurances balances					181,546		181,546			2,583,046
Bad debt expense							0	1,500
Provision for inventory obsolescence included in cost of sales							0	$ 49,198
Professional expenses							750,000
Minority Interest					$ (2,861,012)		$ (2,861,012)			$ (3,139,600)
Subsequent Event [Member] | Rolland Holding Company, LLC [Member]
Purchase price	$ 999,000
Cash payment	99,000
Principal amount of short term debt	$ 100,000
Interest rate on debt	4.00%
Promissory note	$ 800,000
Interest rate on long term debt	5.00%
Non-interest bearing promissory note	$ 125,000
Monthly installments	$ 31,250
Series A Common Stock [Member] | Subsequent Event [Member] | Rolland Holding Company, LLC [Member]
Number of shares sold in purchase agreement | shares	99
Percentage of common stock represents	99.00%
Series B Common Stock [Member] | Subsequent Event [Member] | Rolland Holding Company, LLC [Member]
Number of shares sold in purchase agreement | shares	167,452
Percentage of common stock represents	100.00%
Mexican Pesos [Member] | Income Statement [Member]
Foreign currency translation rate					19.41	17.58	19.41	17.58
Mexican Pesos [Member] | Assets and Liabilities [Member]
Foreign currency translation rate					19.41		19.41			17.34
Subscription Arrangement [Member] | Powin Energy [Member]
Ownership interest											82.35%
Subscription Arrangement [Member] | SF Suntech, Inc. [Member]
Professional expenses				$ 750,000
Investment through subscription				$ 12,500,000
Powin Energy Corporation [Member]
Ownership interest					82.35%		82.35%
Number of shares issued in investment repurchase agreement | shares		378	1,765
POWIN Industries CA de CV [Member]
Ownership interest												85.00%
Minimum [Member]
Estimated useful life							3 years
Maximum [Member]
Estimated useful life							5 years
Mexico subsidiary [Member]
Ownership interest					100.00%		100.00%		100.00%
Ownership interest held									15.00%
Minority Interest									$ 15,747

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Description of Business and History And Summary of Significant Accounting Policies (Schedule of Inventory) (Details) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Raw materials	$ 719,943	$ 303,730
Work in progress	246,700	196,092
Finished goods	721,951	621,303
Reserve for slow moving and obsolete inventory	(497,726)	(497,726)
Inventories, net	$ 1,190,868	$ 623,399

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Description of Business and History And Summary of Significant Accounting Policies (Schedule of Property and Equipment Estimated Useful Lives) (Details)	9 Months Ended
	Sep. 30, 2016
Leasehold improvements [Member]
Property, Plant and Equipment [Line Items]
Estimated useful life	39 years
Minimum [Member] | Equipment [Member]
Property, Plant and Equipment [Line Items]
Estimated useful life	7 years
Minimum [Member] | Computers [Member]
Property, Plant and Equipment [Line Items]
Estimated useful life	3 years
Minimum [Member] | Vehicles [Member]
Property, Plant and Equipment [Line Items]
Estimated useful life	5 years
Minimum [Member] | Furniture and fixtures [Member]
Property, Plant and Equipment [Line Items]
Estimated useful life	3 years
Maximum [Member] | Equipment [Member]
Property, Plant and Equipment [Line Items]
Estimated useful life	15 years
Maximum [Member] | Computers [Member]
Property, Plant and Equipment [Line Items]
Estimated useful life	5 years
Maximum [Member] | Vehicles [Member]
Property, Plant and Equipment [Line Items]
Estimated useful life	7 years
Maximum [Member] | Furniture and fixtures [Member]
Property, Plant and Equipment [Line Items]
Estimated useful life	5 years

XML

Going concern (Narrative) (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Going Concern Narrative Details
Operating losses	$ 1,808,955	$ 1,438,344	$ 4,195,861	$ 3,693,206
Accumulated deficit	$ 26,256,731		$ 26,256,731		$ 22,060,870

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Notes and other receivables (Schedule of Notes and Other Receivables) (Details) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Receivables [Abstract]
VAT receivable, Mexico
Notes receivable from third parties
Other		883
Reserve for uncollectible VAT receivable
Notes and other receivables, net		$ 883

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Property and equipment, net (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 274,864		$ 274,864		$ 213,837
Accumulated depreciation	(79,276)		(79,276)		(54,330)
Property and equipment - net	195,588		195,588		159,507
Depreciation	9,640	$ 6,021	24,946	$ 18,061
Equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	50,385		50,385		50,385
Leasehold improvements [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	92,131		92,131		92,131
Computers [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	99,365		99,365		38,338
Vehicles [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	32,983		32,983		32,983
Furniture and fixtures [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross

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Loss per share (Narrative) (Details)			1 Months Ended		3 Months Ended		9 Months Ended
	Aug. 06, 2013 shares	Aug. 06, 2013 shares	Apr. 15, 2013 USD ($) $ / shares	Jun. 15, 2011 shares	Sep. 30, 2016 USD ($) $ / shares shares	Sep. 30, 2015 USD ($)	Sep. 30, 2016 USD ($) $ / shares shares	Sep. 30, 2015 USD ($)	Aug. 31, 2016 shares	Dec. 31, 2015 USD ($) $ / shares shares
Options granted	1,640,000	164,000		117,000
Stock option comp expense | $					$ 34,436	$ 41,062	$ 55,060	$ 127,737
Stock options outstanding | $					$ 135,000		$ 135,000			$ 158,000
Warrants outstanding					100,000		100,000			100,000
Global Storage Group, LLC [Member]
Warrants issued to purchase common stock | $			$ 70,000
Exercise price | $ / shares			$ 25.00
Exercise period of warrant			60 months
Virgil L. Beast [Member]
Warrants issued to purchase common stock | $			$ 30,000
Exercise price | $ / shares			$ 25.00
Exercise period of warrant			60 months
Series A Preferred Stock [Member]
Preferred stock, face value | $ / shares					$ 100		$ 100			$ 100
Preferred stock, conversion rate							1
Preferred stock, shares outstanding					10,855		10,855			10,237
2015 August stock [Member]
Preferred stock, face value | $ / shares					$ 0.56		$ 0.56			$ 0.56
Preferred stock, conversion rate							1
Preferred stock, shares outstanding					0		0			13,625,826
Preferred stock converted into common stock									13,625,826

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Loss per share (Components of Basic and Diluted Loss Per Share) (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Loss per share:
Net loss attributable to Powin Corporation (A)	$ (1,808,955)	$ (1,438,344)	$ (4,195,861)	$ (3,693,206)
Less preferred share dividends			(61,800)	(55,000)
Net loss available to Powin Corporation (B)	$ (1,808,955)	$ (1,438,344)	$ (4,257,661)	$ (3,748,206)
Weighted average outstanding shares of common stock (C)	23,853,422	16,249,839	18,807,783	16,246,850
Dilutive effect of securities
Common stock and common stock equivalents (D)	23,853,422	16,249,839	18,807,783	16,246,850
Loss per share
Basic (B/D)	$ (0.08)	$ (0.09)	$ (0.22)	$ (0.23)
Diluted (B/D)	$ (0.08)	$ (0.05)	$ (0.22)	$ (0.23)

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Loss per share (Shares In Event of Conversion) (Details) - shares	9 Months Ended	12 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Number of shares of common stock	452,100	14,088,566
Series A Preferred Stock [Member]
Number of shares of common stock	217,100	204,740
Warrant [Member]
Number of shares of common stock	100,000	100,000
Stock Options [Member]
Number of shares of common stock	135,000	158,000
August 2015 preferred stock[Member]
Number of shares of common stock		13,625,826

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Notes Payable and Long Term Debt (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Debt Instrument [Line Items]
Total long-term debt, including current portion and accrued interest, Current	$ 1,505,586		$ 1,505,586		$ 19,271
Total long-term debt, including current portion And accrued interest, Non Current
Interest rate on related party loan
Accrued interest	21,468		21,468
Interest expenses related to notes payables and long-term debt	21,463	$ 18,601	21,634	$ 233,074
Equipment loan due January 1, 2017 [Member]
Debt Instrument [Line Items]
Total long-term debt, including current portion and accrued interest, Current					19,271
Total long-term debt, including current portion And accrued interest, Non Current
Interest rate on related party loan	3.05%		3.05%
Debt instrument, beginning maturity date			Dec. 18, 2012
Debt instrument, ending maturity date			Jan. 01, 2017
Loan from a third party, due July 5, 2016 [Member]
Debt Instrument [Line Items]
Total long-term debt, including current portion and accrued interest, Current	$ 1,484,118		$ 1,484,118
Total long-term debt, including current portion And accrued interest, Non Current
Interest rate on related party loan	6.00%		6.00%
Debt instrument, beginning maturity date			Jul. 05, 2016
Debt instrument, ending maturity date			Jul. 04, 2017

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Commitments (Narrative) (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Operating Leased Assets [Line Items]
Rent and lease expense	$ 70,681	$ 105,540	$ 212,042	$ 316,620
Lu Pacific Properties LLC [Member]
Operating Leased Assets [Line Items]
Rent and lease expense			18,303
Q Pacific Contract Manufacturing [Member]
Operating Leased Assets [Line Items]
Rent and lease expense			5,518
Powin Manufacturing [Member]
Operating Leased Assets [Line Items]
Rent and lease expense			15,594
Powin Mexico leases [Member]
Operating Leased Assets [Line Items]
Rent and lease expense			$ 12,133

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Commitments (Schedule of Future Minimum Lease Payments Under Non-Cancelable Operating Leases) (Details)	Sep. 30, 2016 USD ($)
Commitments and Contingencies Disclosure [Abstract]
2017	$ 282,722
2018	282,722
2019	282,722
2020	282,722
2021	212,042
Thereafter
Total	$ 1,342,930

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Capital stock (Narrative) (Details) - USD ($)		1 Months Ended	3 Months Ended					9 Months Ended	12 Months Ended
	Sep. 06, 2016	Apr. 15, 2013	Jun. 30, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Sep. 30, 2016	Dec. 31, 2015	Aug. 31, 2016
Class of Stock [Line Items]
Preferred shares dividend, percentage								12.00%
Preferred dividends declared
Shares issued for services rendered			6,000	3,000	3,000	3,000	3,000
Shares issued for services rendered, value				$ 1,980	$ 2,700	$ 1,680	$ 5,850
Price per share			$ 0.30	$ 0.65	$ 0.90	$ 0.56	$ 1.95	$ 0.30	$ 0.65
Warrants outstanding				100,000				100,000	100,000
2015 August stock [Member]
Class of Stock [Line Items]
Number of shares of convertible preferred stock that can be converted										13,625,826
Preferred stock shares outstanding				13,625,826				0	13,625,826
Preferred Stock liquidation preference per share								$ 0.56
Preferred stock, face value				$ 0.56				$ 0.56	$ 0.56
Series A Preferred Stock [Member]
Class of Stock [Line Items]
Preferred dividends declared, shares								618	1,135
Preferred dividends declared								$ 61,800	$ 113,500
Preferred stock shares outstanding				10,237				10,855	10,237
Preferred stock, face value				$ 100				$ 100	$ 100
Conversion rate								$ 1
Quidnick Energy Development, LLC [Member]
Class of Stock [Line Items]
Shares issued for services rendered	89,961
Virgil L. Beast [Member]
Class of Stock [Line Items]
Warrants issued to purchase common stock		$ 30,000
Warrant, exercie price		$ 25.00
Exercise period of warrant		60 months
Global Storage Group, LLC [Member]
Class of Stock [Line Items]
Warrants issued to purchase common stock		$ 70,000
Warrant, exercie price		$ 25.00
Exercise period of warrant		60 months

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Capital stock (Schedule of Preferred Stock Issued to Settle Notes Payable) (Details)	1 Months Ended
	Aug. 31, 2015 USD ($) shares
Debt Conversion [Line Items]
Notes payable amount | $	$ 7,630,464
Preferred Shares [Member]
Debt Conversion [Line Items]
Number of Shares of Preferred Stock | shares	13,625,826
Three U Trading Co Limited [Member] | Powin Corporation [Member]
Debt Conversion [Line Items]
Notes payable amount | $	$ 2,451,195
Three U Trading Co Limited [Member] | Powin Corporation [Member] | Preferred Shares [Member]
Debt Conversion [Line Items]
Number of Shares of Preferred Stock | shares	4,377,133
Three U Trading Co Limited [Member] | Powin Industries SADECV [Member]
Debt Conversion [Line Items]
Notes payable amount | $	$ 211,474
Three U Trading Co Limited [Member] | Powin Industries SADECV [Member] | Preferred Shares [Member]
Debt Conversion [Line Items]
Number of Shares of Preferred Stock | shares	377,631
Chief Executive Officer [Member] | Powin Corporation [Member]
Debt Conversion [Line Items]
Notes payable amount | $	$ 3,333,091
Chief Executive Officer [Member] | Powin Corporation [Member] | Preferred Shares [Member]
Debt Conversion [Line Items]
Number of Shares of Preferred Stock | shares	5,951,947
Danny Lu [Member] | Powin Corporation [Member]
Debt Conversion [Line Items]
Notes payable amount | $	$ 560,565
Danny Lu [Member] | Powin Corporation [Member] | Preferred Shares [Member]
Debt Conversion [Line Items]
Number of Shares of Preferred Stock | shares	1,001,009
Peter Lu [Member] | Powin Corporation [Member]
Debt Conversion [Line Items]
Notes payable amount | $	$ 560,565
Peter Lu [Member] | Powin Corporation [Member] | Preferred Shares [Member]
Debt Conversion [Line Items]
Number of Shares of Preferred Stock | shares	1,001,009
Lu Pacific Properties LLC [Member] | Powin Corporation [Member]
Debt Conversion [Line Items]
Notes payable amount | $	$ 513,574
Lu Pacific Properties LLC [Member] | Powin Corporation [Member] | Preferred Shares [Member]
Debt Conversion [Line Items]
Number of Shares of Preferred Stock | shares	917,097

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Capital stock (Schedule of Warrants) (Details) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Aggregate Intrinsic Value
Outstanding at the end of the period	$ 135,000	$ 158,000
Warrant [Member]
Warrants
Outstanding at the beginning of the period	100,000	100,000
Warrants granted
Warrants exercised
Warrants forfeited
Outstanding at the end of the period	100,000	100,000
Exercisable at the end of the period	100,000	100,000
Weighted average exercise price
Outstanding at the beginning of the period	$ 25	$ 25
Warrants granted
Warrants exercised
Warrants forfeited
Outstanding at the end of the period	25	25
Exercisable at the end of the period	$ 25	$ 25
Average Remaining Contractual Life (Years)
Average Remaining Contractual Life	1 year 7 months 24 days	2 years 4 months 24 days
Average Remaining Contractual Life, Exercisable	1 year 7 months 24 days	2 years 4 months 24 days
Aggregate Intrinsic Value
Warrants granted
Outstanding at the end of the period
Exercisable at the end of the period

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Stock options (Narrative) (Details) - USD ($)			1 Months Ended	3 Months Ended		9 Months Ended
	Aug. 06, 2013	Aug. 06, 2013	Jun. 15, 2011	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Options granted	1,640,000	164,000	117,000
Stock option comp expense				$ 34,436	$ 41,062	$ 55,060	$ 127,737
Remaining unvested stock expenses				$ 92,604		$ 92,604		$ 225,017
Vested Immediately [Member]
Vesting percentage	20.00%

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Stock options (Fair Value Assumptions in Options Valuation) (Details)	9 Months Ended
	Sep. 30, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Dividend Yield	0.00%
Expected volatility	161.80%
Risk-free interest rate	1.39%
Term in years	9 years 11 months 1 day

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Stock options (Summary of Stock Option Activity) (Details) - Stock Options [Member] - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Options
Outstanding, Options	158,000
Options exercisable	99,095
Options granted
Options exercised
Options forfeited	(23,000)
Outstanding, Options	135,000	158,000
Options exercisable at the end of the period	104,878	99,095
Weighted average exercise price
Outstanding, Options	$ 5.8
Options exercisable	6.8
Options granted
Options exercised
Options forfeited	5.8
Outstanding, Options	5.8	$ 5.8
Options exercisable at the end of the period	$ 6.6	$ 6.8
Average Remaining Contractual Life (Years)
Outstanding	5 years 1 month 2 days	5 years 10 months 2 days
Exercisable	4 years 5 months 16 days	5 years 18 days
Aggregate Intrinsic Value
Outstanding, Options	$ 312,000
Options exercisable	$ 149,931
Options granted
Options exercised
Options forfeited
Outstanding, Options		$ 312,000
Options exercisable at the end of the period

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Related party transactions (Narrative) (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Related Party Transaction [Line Items]
Rent expense	$ 70,681	$ 105,540	$ 212,042	$ 316,620
Lu Pacific Properties LLC [Member]
Related Party Transaction [Line Items]
Rent expense	70,681	$ 105,540	212,042	316,620
Quailhurst Vineyard Estates [Member]
Related Party Transaction [Line Items]
Purchases from related parties			8,529	0
Due to related parties	3,332		$ 3,332		$ 0
Yangzhou Finway Energy Tech Co. [Member]
Related Party Transaction [Line Items]
Ownership percentage by Lu Family			49.00%
Purchases from related parties			$ 171,417	$ 0
Due to related parties	$ 174,003		$ 174,003		$ 43,156

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Business segment reporting (By Business Segment) (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Segment Reporting Information [Line Items]
Revenue	$ 11,847	$ 40,979	$ 33,243	$ 127,638
(Loss) before income taxes	(1,013,548)	(1,273,372)	(2,988,593)	(3,528,625)
Energy [Member]
Segment Reporting Information [Line Items]
Revenue	11,847	40,979	33,243	127,638
(Loss) before income taxes	(986,558)	(1,266,330)	(2,969,105)	(3,639,139)
Corporate [Member]
Segment Reporting Information [Line Items]
(Loss) before income taxes	$ (26,990)	$ (7,042)	$ (19,488)	$ 110,514

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Business segment reporting (Narrative) (Details) - Subsequent Event [Member] - Rolland Holding Company, LLC [Member]	Oct. 03, 2016 USD ($) shares
Purchase price	$ 999,000
Cash payment	99,000
Principal amount of short term debt	$ 100,000
Interest rate on debt	4.00%
Promissory note	$ 800,000
Interest rate on long term debt	5.00%
Non-interest bearing promissory note	$ 125,000
Monthly installments	$ 31,250
Series A Common Stock [Member]
Number of shares sold in purchase agreement | shares	99
Percentage of common stock represents	99.00%
Series B Common Stock [Member]
Number of shares sold in purchase agreement | shares	167,452
Percentage of common stock represents	100.00%

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Non-Controlling Interest (Details) - USD ($)									9 Months Ended
	May 31, 2015	Apr. 03, 2015	Apr. 02, 2015	Apr. 02, 2015	Mar. 02, 2015	Jan. 15, 2015	Aug. 29, 2014	Aug. 08, 2014	Sep. 30, 2016	Sep. 30, 2015	Jan. 31, 2016	Dec. 31, 2015
Noncontrolling Interest [Line Items]
Professional expenses									$ 750,000
Proceeds received from the sale									12,500,000
Net asset value associated with sold interest									1,552,272
Cash paid to acquire non controlling interest									15,747
Equity attributable to non-controlling interest									$ (2,861,012)			$ (3,139,600)
Powin Energy Corporation [Member]
Noncontrolling Interest [Line Items]
Number of shares issued in investment repurchase agreement		378	1,765
Amount outstanding in subscription agreement								$ 12,500,000
Ownership interest									82.35%
First Closing Date April 2, 2015 [Member] | Powin Energy Corporation [Member]
Noncontrolling Interest [Line Items]
Amount received in first closing as per amendment of agreement				$ 7,450,000	$ 50,000	$ 2,000,000	$ 3,000,000
Aggregate amount received as per amendment of agreement				$ 12,500,000
Second Closing Date May 31, 2015 [Member] | Powin Energy Corporation [Member]
Noncontrolling Interest [Line Items]
Amount outstanding in subscription agreement	$ 12,500,000
Number of contingently shares issuable in investment repurchase agreement	2,143
Number of contingently shares sold in investment repurchase agreement	2,143
Amount outstanding to be receivable from proceeds of second closing	$ 12,500,000
Suntech [Member]
Noncontrolling Interest [Line Items]
Equity attributable to non-controlling interest								$ 25,000,000
Mexico subsidiary [Member]
Noncontrolling Interest [Line Items]
Non-controlling Interest, Ownership Percentage by Parent											15.00%
Ownership interest									100.00%		100.00%
Cash paid to acquire non controlling interest									$ 15,747
Stake acquired in non-controlling interest									15.00%
Equity attributable to non-controlling interest											$ 15,747

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Discontinued Operations (Schedule of Balances for Powin Mexico and Q Pacific Corporation) (Details) - Powin Mexico and Q Pacific Corporation [Member] - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Assets held for sale - current	$ 3,055,639	$ 4,317,419
Assets held for sale- noncurrent	850,491	1,077,143
Liabilities held for sale - current	$ 1,915,443	$ 1,682,603

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Discontinued Operations (Schedule of Operating results of Powin Mexico and Q Pacific Corporation) (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Net loss from discontinued operations	$ (965,666)	$ (430,795)	$ (1,719,907)	$ (941,915)
Powin Mexico and Q Pacific Corporation [Member]
Sales	2,246,978	2,499,630	7,135,534	8,267,937
Cost of Goods Sold	1,917,861	2,234,723	6,121,675	7,063,565
Gross Profit	329,117	264,907	1,013,859	1,204,372
Operating Expenses	1,380,366	691,597	2,831,687	2,128,840
Other Income (Expense)	85,583	(4,105)	97,921	(17,447)
Income Tax Expense
Net loss from discontinued operations	$ (965,666)	$ (430,795)	$ (1,719,907)	$ (941,915)

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Discontinued Operations (Narrative) (Details) - Subsequent Event [Member] - Rolland Holding Company, LLC [Member]	Oct. 03, 2016 shares
Series A Common Stock [Member]
Number of shares sold in purchase agreement	99
Percentage of common stock represents	99.00%
Series B Common Stock [Member]
Number of shares sold in purchase agreement	167,452
Percentage of common stock represents	100.00%

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Subsequent events (Narrative) (Details) - Subsequent Event [Member] - Rolland Holding Company, LLC [Member]	Oct. 03, 2016 USD ($) shares
Purchase price	$ 999,000
Cash payment	99,000
Principal amount of short term debt	$ 100,000
Interest rate on debt	4.00%
Promissory note	$ 800,000
Interest rate on long term debt	5.00%
Non-interest bearing promissory note	$ 125,000
Monthly installments	$ 31,250
Series A Common Stock [Member]
Number of shares sold in purchase agreement | shares	99
Percentage of common stock represents	99.00%
Series B Common Stock [Member]
Number of shares sold in purchase agreement | shares	167,452
Percentage of common stock represents	100.00%