0001477932-18-004199.txt : 20180820 0001477932-18-004199.hdr.sgml : 20180820 20180820061059 ACCESSION NUMBER: 0001477932-18-004199 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 48 CONFORMED PERIOD OF REPORT: 20180630 FILED AS OF DATE: 20180820 DATE AS OF CHANGE: 20180820 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Renewable Energy & Power, Inc. CENTRAL INDEX KEY: 0001608430 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC LIGHTING & WIRING EQUIPMENT [3640] IRS NUMBER: 461294868 STATE OF INCORPORATION: NV FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-55237 FILM NUMBER: 181026986 BUSINESS ADDRESS: STREET 1: 3395 WEST CHEYENNE AVE #111 CITY: LAS VEGAS STATE: NV ZIP: 89032 BUSINESS PHONE: (702) 294-0111 MAIL ADDRESS: STREET 1: 3395 WEST CHEYENNE AVE #111 CITY: LAS VEGAS STATE: NV ZIP: 89032 10-Q 1 reap_10q.htm FORM 10-Q reap_10q.htm

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the Quarterly Period Ended June 30, 2018

 

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 000-55237

 

RENEWABLE ENERGY AND POWER, INC.

(Exact name of registrant as specified in its charter)

 

Nevada

 

46-1294868

(State or other jurisdiction

of incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

3395 Cheyenne Ave. #111 N. Las Vegas, NV

 

89032

(Address of principal executive offices)

 

(Zip Code)

 

Telephone: (702) 685-9524

(Registrant's telephone number, including area code)

 

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 x No o

 

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 x No o

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

¨

Accelerated filer

o

Non-accelerated filer

o

Smaller reporting company

x

(Do not check if a 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 o No x

 

The number of outstanding shares of the registrant's common stock was 1,597,878,840 as of August 17, 2018.

 

 
 
 
 

RENEWABLE ENERGY AND POWER, INC. FORM 10-Q

FOR THE QUARTER ENDED JUNE 30, 2018

 

TABLE OF CONTENTS

 

PART I

FINANCIAL INFORMATION

 

ITEM 1.

FINANCIAL STATEMENTS.

 

4

 

CONDENSED BALANCE SHEETS AS OF JUNE 30, 2018 (UNAUDITED) AND SEPTEMBER 30, 2017

 

4

 

CONDENSED STATEMENTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED JUNE 30, 2018 AND 2017 (UNAUDITED)

 

5

 

CONDENSED STATEMENTS OF CASH FLOWS FOR THE THREE AND NINE MONTHS ENDED JUNE 30, 2018 AND 2017 (UNAUDITED)

 

6

 

NOTES TO CONDENSED FINANCIAL STATEMENTS

 

7

 

ITEM 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

 

15

 

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES.

 

22

 

ITEM 4.

CONTROLS AND PROCEDURES.

 

22

 

PART II

OTHER INFORMATION

 

ITEM 1.

LEGAL PROCEEDINGS.

 

23

 

ITEM 1A.

RISK FACTORS.

 

23

 

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

 

23

 

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES.

 

23

 

ITEM 4.

MINE SAFETY DISCLOSURES.

 

23

 

ITEM 5.

OTHER INFORMATION.

 

23

 

ITEM 6.

EXHIBITS.

 

24

 

 
2
 

 

FORWARD-LOOKING STATEMENTS

 

This Quarterly Report on Form 10-Q ("Quarterly Report") contains forward-looking statements that are subject to risks and uncertainties. All statements other than statements of historical fact included in this Quarterly Report are forward-looking statements. Forward-looking statements give our current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance, and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as "anticipate," "estimate," "expect," "project," "plan," "intend," "believe," "may," "will," "should," "can have," "likely," and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events. For example, all statements we make relating to our estimated and projected costs, expenditures, cash flows, and financial results, our plans and objectives for future operations, growth or initiatives, strategies, plans to repurchase shares of our common stock, or the expected outcome or impact of pending or threatened litigation are forward-looking statements. All forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those that we expected, including:

 

We derive many of our forward-looking statements from our operating budgets and forecasts, which are based upon many detailed assumptions. While we believe that our assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors, and it is impossible for us to anticipate all factors that could affect our actual results. For the discussion of these risks and other risks and uncertainties that could cause actual results to differ materially from those contained in our forward-looking statements, please refer to "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended September 30, 2017 ("Annual Report"), filed with the Securities and Exchange Commission ("SEC") on February 16, 2016, and "Part II - Item 1A. Risk Factors" of this Quarterly Report. The forward-looking statements included in this Quarterly Report are made only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events, or otherwise, except as otherwise required by law.

 

 

·

changes in or new government regulations or increased enforcement of the same,

 

·

unavailability of desirable acquisitions, inability to complete them or inability to integrate them,

 

·

increased costs, including from increased raw material or energy prices,

 

·

changes in general worldwide economic or political conditions,

 

·

adverse publicity or negative consumer perception regarding solar investments,

 

·

issues with obtaining raw materials of adequate quality or quantity,

 

·

litigation and claims, including product liability, intellectual property and other types,

 

·

disruptions from or following acquisitions, including the loss of customers,

 

·

increased competition,

 

·

slow or negative growth in the solar power industry,

 

·

the loss of key personnel or the inability to manage our operations efficiently,

 

·

problems with information management systems, manufacturing efficiencies and operations,

 

·

insurance coverage issues,

 

·

the volatility of the stock market generally and of our stock specifically,

 

·

increases in the cost of borrowings or unavailability of additional debt or equity capital, or both, or fluctuations in foreign currencies and

 

·

interruption of business or negative impact on sales and earnings due to acts of God, acts of war, terrorism, bio-terrorism, civil unrest and other factors outside of our control.

 

 
3
 
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PART I – FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS. 

 

Renewable Energy and Power, Inc.

Condensed Balance Sheets

 

 

 

June 30,

 

 

September 30,

 

 

 

2018

 

 

2017

 

Assets

 

(Unaudited)

 

 

 

Current assets:

 

 

 

 

 

 

Cash

 

$ -

 

 

$ -

 

Accounts receivable from MDI

 

 

1,743,320

 

 

 

1,328,053

 

Accounts Receivable from others

 

 

3,650

 

 

 

11,417

 

Inventory

 

 

176,020

 

 

 

66,574

 

Total current assets

 

 

1,922,990

 

 

 

1,406,044

 

Property, plant and equipment, net of depreciation

 

 

195,595

 

 

 

229,381

 

Intangible asset, net of amortization

 

 

-

 

 

 

12,567

 

Deposits

 

 

5,000

 

 

 

5,000

 

Total Assets

 

$ 2,123,585

 

 

$ 1,652,992

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders’ Deficit

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$ 104,636

 

 

$ 44,560

 

Accounts payable MDI

 

 

1,709,508

 

 

 

1,291,772

 

Accrued interest (MDI $1,500 at June 30, 2018 and $87,785 at September 30, 2017)

 

 

29,555

 

 

 

131,308

 

Amounts due to officers and shareholder

 

 

264,275

 

 

 

180,175

 

Short term notes payable to officer

 

 

59,774

 

 

 

56,974

 

Convertible note payable, officer

 

 

5,700

 

 

 

5,700

 

Convertible note payable to MDI

 

 

25,000

 

 

 

103,785

 

Convertible note payable, net of discounts

 

 

590,508

 

 

 

293,600

 

Derivative liability

 

 

366,803

 

 

 

3,047,887

 

Total current liabilities

 

 

3,155,759

 

 

 

5,155,761

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies (Note 9)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shareholders’ deficit:

 

 

 

 

 

 

 

 

Series A preferred stock, $0.001 par value; 10,000,000 shares authorized; 10,000,000 shares issued and outstanding at June 30, 2018

 

 

10,000

 

 

 

-

 

Common stock, $0.001 par value; 10,010,000,000 shares authorized; 2,471,850,507 shares issued and outstanding at June 30, 2018 and 109,393,022 at September 30, 2017

 

 

2,471,850

 

 

 

109,393

 

Additional paid in capital

 

 

8,538,437

 

 

 

8,124,248

 

Accumulated deficit

 

 

(12,052,461 )

 

 

(11,736,410 )

Total shareholders’ deficit

 

 

(1,032,174 )

 

 

(3,502,769 )

Total Liabilities and Shareholders’ deficit

 

$ 2,123,585

 

 

$ 1,652,992

 

 

See the accompanying notes to the condensed financial statements

 

 
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Renewable Energy and Power, Inc.

Condensed Statements of Operations

Three Months and Nine Months Ended June 30, 2018 and 2017

(Unaudited)

 

 

 

 

For the Three Months Ended

June 30,

 

 

For the Nine Months Ended

June 30,

 

 

 

2018

 

 

2017

 

 

2018

 

 

2017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$ 139,410

 

 

$ 184,749

 

 

446,166

 

 

$ 559,650

 

Cost of revenue

 

 

118,871

 

 

 

144,000

 

 

 

388,381

 

 

 

470,395

 

Gross profit

 

 

20,539

 

 

 

40,749

 

 

 

57,785

 

 

 

89,255

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

 

81,911

 

 

 

201,119

 

 

 

307,550

 

 

 

412,784

 

Depreciation and Amortization

 

 

11,262

 

 

 

25,863

 

 

 

46,353

 

 

 

77,589

 

Total operating expenses

 

 

93,173

 

 

 

226,982

 

 

 

353,903

 

 

 

490,373

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating loss

 

 

(72,634 )

 

 

(186,233 )

 

 

(296,118 )

 

 

(401,118 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expenses):

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(241,398 )

 

 

(76,430 )

 

 

(861,586 )

 

 

(156,399 )

Fair value of stock compensation

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(6,227,500 )

Change in derivative liability

 

 

97,989

 

 

 

(700,800 )

 

 

841,653

 

 

 

(814,000 )

 

 

 

(143,409 )

 

 

(777,230 )

 

 

(19,933 )

 

 

(7,197,899 )

Net loss

 

$ (216,043 )

 

$ (963,463 )

 

$ (316,051 )

 

$ (7,599,017 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Per share information - basic:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per share

 

$ (0.00 )

 

$ (0.03 )

 

$ 0.00

 

 

$ (0.65 )

Primary weighted average shares outstanding

 

 

1,898,704,646

 

 

 

27,655,096

 

 

 

1,059,900,819

 

 

 

11,653,799

 

 

See the accompanying notes to the condensed financial statements

 

 
5
 
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Renewable Energy and Power, Inc.

Condensed Statements of Cash Flow

Nine Months Ended June 30, 2018 and 2017

(Unaudited)

 

 

 

For the Nine Months Ended

 

 

 

June 30,

 

 

 

2018

 

 

2017

 

 

 

 

 

 

 

 

Net cash used in operating activities

 

$ (201,500 )

 

$ (221,915 )

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Proceeds from issuance of convertible notes payable

 

 

187,000

 

 

 

378,354

 

Repayment of convertible note payable

 

 

(10,000 )

 

 

-

 

Proceeds from MDI notes payable

 

 

30,200

 

 

 

-

 

Repayment of amounts due to officers and shareholder

 

 

(8,500 )

 

 

(75,000 )

Proceeds from short term notes payable to officer

 

 

2,800

 

 

 

3,720

 

Net cash provided by financing activities

 

 

201,500

 

 

 

307,074

 

 

 

 

 

 

 

 

 

 

Net increase in cash

 

 

-

 

 

 

85,159

 

Cash at beginning of period

 

 

-

 

 

 

571

 

Cash at end of period

 

$ -

 

 

$ 85,730

 

 

 

 

 

 

 

 

 

 

Supplemental Cash Flow Disclosures

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest paid

 

$ -

 

 

$ -

 

Taxes paid

 

$ -

 

 

$ -

 

 

 

 

 

 

 

 

 

 

Supplemental Disclosures of Non-Cash Investing and Financing Activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Conversion of convertible note payable and accrued interest to common stock

 

$ 947,927

 

 

$ 4,650

 

 

 

 

 

 

 

 

 

 

Debt discount on convertible notes payable

 

$ 341,977

 

 

$ 13,500

 

 

 

 

 

 

 

 

 

 

Non-cash additions to convertible notes payable:

 

 

 

 

 

 

 

 

Conversion of MDI note

 

$ 191,570

 

 

$ -

 

Consulting fees payable to officers and shareholder exchanged for convertible notes payable

 

$ -

 

 

$ 25,000

 

 

 

 

 

 

 

 

 

 

Convertible notes payable to officers exchanges for common stock

 

$ -

 

 

$ 25,000

 

 

See the accompanying notes to the condensed financial statements

 

 
6
 
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Renewable Energy and Power, Inc.

Notes to Condensed Financial Statements

(Unaudited)

 

Note 1 – Nature of Business

 

Renewable Energy and Power (the Company or REAP) was incorporated on October 15, 2012, under the laws of the State of Nevada, for the purpose of conducting all legal business.

 

The accompanying unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") and the rules and regulations of the U.S. Securities and Exchange Commission ("SEC"), as amended for interim financial information.

 

These financial statements should be read in conjunction with the audited financial statements and the notes thereto included in the Company's 2017 Annual Report on Form 10-K. The accompanying unaudited financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations and cash flows for the interim periods but are not necessarily indicative of the results for any subsequent quarter or the entire year ending September 30, 2018.

 

Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. It is management's opinion, however, that all material adjustments (consisting of normal recurring adjustments) have been made which are necessary for a fair financial statement presentation. The interim results for the three months ended June 30, 2018 are not necessarily indicative of results for the full fiscal year.

 

The Company is engaged in the business of new and retrofit applications for LED lighting and innovative solar electrical generation. The LED products will lower the use of electrical power, lower maintenance costs for users and extend the useful life of lighting fixtures.

 

The solar process will greatly increase the conversion of heat to electricity, and is patterned after technology that has been used in space exploration for many years.

 

Management knows of no material adjustments needed in these financial statements to conform to Generally Accepted Accounting Principles.

 

 
7
 
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Renewable Energy and Power, Inc.

Notes to Condensed Financial Statements

(Unaudited)

 

Note 2 – Going Concern

 

These financial statements for the nine months ended June 30, 2018 were prepared assuming the Company will continue as a going concern. During the nine months ended June 30, 2018, the Company had a loss from operations of $296,118, negative working capital of $1,232,769 and has an accumulated deficit of $12,052,461 at June 30, 2018. These factors raise a substantial doubt about the company’s ability to continue as a going concern. In view of the matters described above, recoverability of a major portion of the recorded asset amounts shown in the accompanying balance sheets is dependent upon continued operations of the Company, which in turn is dependent upon the Company's ability to raise additional capital, obtain financing and to succeed in its future operations. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

 

The Company has begun principal operations and, as is common with a start-up company, the Company has had recurring losses during its early stage. The Company's financial statements are prepared using generally accepted accounting principles applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, the Company does not have significant cash or other material assets, nor does it have an established source of revenue sufficient to cover its operating costs and to allow it to continue as a going concern. In the interim, shareholders of the Company have committed to meeting its minimal operating expenses.

 

Note 3 – Summary of Significant Accounting Policies

 

Basis of presentation

 

The Company reports revenues and expenses using the accrual method of accounting for financial and tax reporting purposes. These financial statements are presented in United States dollars and have been prepared in accordance with United States generally accepted accounting principles.

 

Management estimates

 

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

Revenue recognition

 

The Company recognizes revenue from sales at the time the products are shipped, the price is determinable, the customers are invoiced and payment is reasonably assured. Invoices are due on a net 30 day basis. Shipping and handling costs are billed to customers and netted against shipping and handling expenses incurred by the Company, which are included in cost of revenues. All of the Company's sales are to Multichip Display, Inc. (MDI), a shareholder of the Company. See Note 4.

 

 
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 Renewable Energy and Power, Inc.

Notes to Condensed Financial Statements

(Unaudited)

 

Accounts receivable

 

The Company grants credit, generally without collateral. The Company performs periodic credit evaluations of its customers' financial condition and believes that its customer acceptance, billing and collection policies are adequate to minimize potential credit risk. The Company has not incurred any credit losses to date. The Company provides an allowance for doubtful accounts that is based upon a review of outstanding receivables, historical collection information, and existing economic conditions. The allowance for bad debt is $0 at June 30, 2018 and September 30, 2017. Normal accounts receivable past due more than 30 days are considered delinquent. Delinquent receivables are written off based on individual credit evaluation and specific circumstances of the customer. See Note 4.

 

Inventories

 

Inventories are carried at the lower of cost (first-in, first-out, FIFO) or net realizable value and include primarily LED light fixtures. The inventories were purchased from vendors in Asia.

 

Research and Development Costs

 

Expenditures for research activities relating to product development and improvement are charged to expense as incurred. During the three months ended June 30, 2018 and 2017, research and development costs totaled $0 and $18,957, respectively, and for the nine months ended June 30, 2018 and 2017 was $0 and $31,277, respectively.

 

Fair Value Measurement

 

Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurement (“ASC 820”), provides a comprehensive framework for measuring fair value and expands disclosures which are required about fair value measurements. Specifically, ASC 820 sets forth a definition of fair value and establishes a hierarchy prioritizing the inputs to valuation techniques, giving the highest priority to quoted prices in active markets for identical assets and liabilities and the lowest priority to unobservable value inputs. ASC 820 defines the hierarchy as follows:

 

 

Level 1 - Quoted prices are available in active markets for identical assets or liabilities as of the reported date. The types of assets and liabilities included in Level 1 are highly liquid and actively traded instruments with quoted prices, such as equities listed on the New York Stock Exchange.

 

Level 2 - Pricing inputs are other than quoted prices in active markets, but are either directly or indirectly observable as of the reported date. The types of assets and liabilities in Level 2 are typically either comparable to actively traded securities or contracts or priced with models using highly observable inputs.

 

Level 3 - Significant inputs to pricing that are unobservable as of the reporting date. The types of assets and liabilities included in Level 3 are those with inputs requiring significant management judgment or estimation, such as complex and subjective models and forecasts used to determine the fair value of financial transmission rights.

 

Our financial instruments consist of accounts receivable, accounts payable, accrued expenses and convertible and term debt. The carrying value of our financial instruments approximates their fair value due to their relative short maturities and the nature of the debt.

  
 
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Renewable Energy and Power, Inc.

Notes to Condensed Financial Statements

(Unaudited)

Derivative Financial Instruments

 

We do not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks. We evaluate all of our financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, we used a Black Scholes valuation model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date.

 

A reconciliation of the changes in the Company’s Level 3 derivative liability at fair value is as follows:

 

Balance at September 30, 2017

 

$ 3,047,887

 

Conversions of debt to equity

 

 

(1,463,978 )

Decrease in fair value of the liability

 

 

(1,737,784 )

Additions to the liability

 

 

520,678

 

Balance at June 30, 2018

 

$ 366,803

 

 

Note 4 – Multichip Display, Inc. (MDI)

 

The Company has an exclusive contract to manufacture products under contract from MDI. MDI will be the sales agent for certain government and private company contracts; REAP manufactures products based on bid prices as agreed between the parties. The Company has also agreed to purchase parts from MDI. As part of the agreement, MDI has agreed to support the operations of the Company through December 31, 2018. MDI is both a significant customer and significant vendor of the Company. For the nine months ended June 30, 2018 and 2017, substantially all of the Company's sales resulted from transactions with MDI. The Company had the following related party transactions through June 30, 2018 for the time periods shown in the tables below. 

 

 

 

Nine Months ended

June 30,

 

 

 

2018

 

 

2017

 

 

 

 

 

 

 

 

Sales to MDI

 

$ 446,166

 

 

$ 554,739

 

Inventory purchases from MDI*

 

 

241,919

 

 

 

430,502

 

Interest expense to MDI

 

 

1,500

 

 

 

123,063

 

Receivable from MDI

 

 

1,743,320

 

 

 

1,163,053

 

Accounts payable to MDI

 

 

1,709,508

 

 

 

995,637

 

Accrued interest payable to MDI

 

 

1,500

 

 

 

123,063

 

Convertible note payable to MDI, net of discount of $18,298 in 2017

 

 

25,000

 

 

 

109,765

 

____________  

* Includes borrowings to pay for direct labor.

 

 
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 Renewable Energy and Power, Inc.

Notes to Condensed Financial Statements

(Unaudited)

 

The agreement with MDI includes an offset clause for accounts receivable from MDI and accounts payable to MDI. The Company issued three new 8% Convertible Promissory Notes in the amounts of $15,000, $5,000 and $5,000 during the nine months ended June 30, 2018. These notes mature on December 31, 2018 and are convertible at the lower of common stock par value of $0.001 per share or 50% of the current market price at the time of conversion. These notes originated in Q1 (November 2017). During the quarter ended June 30, 2018, two unrelated lenders purchased the prior convertible note and accrued interest from MDI. The lenders exercised the conversion rights stipulated in the note and the Company issued an aggregate of 288,052,345 shares of $.001 par value common stock related thereto.

 

Note 5 – Related Party Transactions with Initial Shareholder Group

 

Consulting fees payable to officers and shareholder

 

During the nine months ended June 30, 2018 and 2017, the Company incurred $91,900 and $152,612, respectively, of consulting fees which are payable to two officers and two shareholders of the Company. Total consulting fees payable to these officers and shareholder as of June 30, 2018 and September 30, 2017 were $203,415 and $112,315 respectively.

 

Payable to shareholder

 

Payable to shareholder totaled $60,860 and $67,860 at June 30, 2018 and September 30, 2017, respectively.

 

Short-term and convertible notes payable to officers

 

As of June 30, 2018 and September 30, 2017, convertible notes payable, officer totaled $5,700 and short term notes payable to officer amounted to $59,774 and $56,974 respectively.

 

 
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Renewable Energy and Power, Inc.

Notes to Condensed Financial Statements

(Unaudited)

 

Note 6 – Convertible Notes Payable

 

The carrying value of convertible notes at June 30, 2018 and September 30, 2017 was comprised of:

 

 

 

June 30,

 

 

September 30,

 

 

 

2018

 

 

2017

 

Convertible notes payable

 

$ 678,039

 

 

$ 598,765

 

Unamortized original issue discount and debt discount

 

 

(87,531 )

 

 

(305,165 )

 

 

$ 590,508

 

 

$ 293,600

 

  

Interest expense for the nine months ended June 30, 2018 was $861,586 and includes $511,030 of amortization of debt discount and loan fees, origination interest of $276,867 and $22,081 of amortization of original issue discount. Interest expense for the nine months ended June 30, 2017 amounted to $156,399.

 

During the years ended September 30, 2017 and 2016 and the nine months ended June 30, 2018, we executed a series of Promissory Notes (the “Notes”) to seven unrelated entities. The Notes have initial terms of one year or less. The notes carry face interest rates from 8% to 12% per annum. The Lenders have the rights, at any time and/or after 180 days at their election to convert all or part of the outstanding and unpaid principal and accrued interest into shares of our common stock. The conversion price is generally a range of between 50% and 58% of a two-day average of the lowest trading price in the 15 to 25 range of trading days prior the conversion. During the quarter ending June 30, 2018 two of the lenders have sued for payment, which terminates their conversion rights. Aggregate amounts claimed pursuant to the lawsuits amounted to $448,833 including certain penalties and interest. Amounts included in convertible notes payable for these lenders amounted to $321,516 after the write-off of unamortized loan discounts of $181,869. Additionally, the Company eliminated $467,529 of the derivative liability related to these loans. Negotiations for settlement of the suits is currently in process. On July 6, 2018 a judgement in favor of one lender was entered in the amount of $219,460 which amount has been fully recorded in the financial statements.

 

During the nine months ended June 30, 2018 the Company’s lenders converted an aggregate of $420,394 of the face value of notes payable plus accrued interest into an aggregate of 2,362,457,485 shares of $.001 par value common stock.

 

We valued the derivative liability at the end of each accounting period and the difference in value is recognized as gain or loss. At June 30, 2018, we determined the valuation using the Black-Sholes valuation model with the following assumptions: dividend yield of zero, 0.01 to 01.25 years to maturity, risk free interest rate of 2.25% and annualized volatility of 158% to 486%. We recognized $841,653 of income for the change in value of the derivative for the nine months ended June 30, 2018.  

 

 
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Renewable Energy and Power, Inc.

Notes to Condensed Financial Statements

(Unaudited)

 

Note 7 – Share Capital

 

The Company is authorized to issue 10,010,000,000 shares of common stock with a par value of $.001 and 10,000,000 of $.001 par value preferred stock. The Company had 2,471,850,507 shares of $.001 par value common stock outstanding and 10,000,000 shares of $.001 par value preferred stock outstanding at June 30, 2018. Additionally, at June 30, 2018 there were 2,726,409,064 contingently issuable shares related to the Company’s convertible notes payable.

 

Common Stock Purchase Warrants For warrants granted to non-employees in exchange for services, we recorded the fair value of the equity instrument using the Black-Scholes pricing model unless the value of the services is more reliably measurable. On July 11, 2017 we issued a common stock purchase warrant to a lender as additional compensation for its services provided to date. The warrant provides for the issuance of 167,667 shares of our $.001 par value common stock at a variable exercise price based on the market price of our stock but with a “floor price” of $.01 per share. The warrants are exercisable for a period of 5 years from the date of issue.

 

The aggregate intrinsic value of the 167,667 outstanding and exercisable warrants at September 30, 2017 was approximately $8,500. The intrinsic value is the difference between the closing stock price on September 30, 2017 and the exercise price, multiplied by the number of in-the money warrants had all warrant holders exercised their warrants on September 30, 2017. The lender will be entitled to similar warrants issuances under a master lending agreement as additional funding to the Company is received.

 

No warrants were exercised and no additional warrants were issued during the nine months ended June 30, 2018.

  

Note 8 – Income Taxes

 

The difference between the expected income tax expense (benefit) and the actual tax expense (benefit) computed by using the Federal statutory rates is as follows:

 

 

 

For the Nine

 

 

 

Months Ended

 

 

 

June 30,

 

 

 

2018

 

 

2017

 

Expected income tax (benefit) at statutory 

 

 

 

 

 

 

  rates of 34%

 

$ 107,457

 

 

$ (2,183,000 )
Change in non-deductable expenses

 

 

(338,633 )

 

 

2,155,800

 

Change in valuation allowance

 

 

231,176

 

 

 

27,200

 

 

 

$ -

 

 

$ -

 

 

 
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Renewable Energy and Power, Inc.

Notes to Condensed Financial Statements

(Unaudited)

 

The Company had a federal net operating tax loss carry-forward of approximately $3,652,000 as of June 30, 2018. The tax loss carry-forwards are available to offset future taxable income with the federal carry-forwards beginning to expire in 2033.

 

At June 30, 2018 the deferred tax valuation allowance increased by $231,176 from September 30, 2017. The realization of the tax benefits is subject to the sufficiency of taxable income in future years. The deferred tax assets represent the amounts expected to be realized before expiration. The Company periodically assesses the likelihood that it will be able to recover its deferred tax assets. The Company considers all available evidence, both positive and negative, including historical levels of income, expectations and risks associated with estimates of future taxable income and ongoing prudent and feasible profits. As of June 30, 2018 and September 30, 2017, the Company established valuation allowances equal to the full amount of the net deferred tax assets due to the uncertainty of the utilization of the operating losses in future periods.

 

During the nine months ended June 30, 2018 and 2017, no amounts have been recognized for uncertain tax positions and no amounts have been recognized related to interest or penalties related to uncertain tax positions. The Company has determined that it is not reasonably likely for the amounts of unrecognized tax benefits to significantly increase or decrease within the next twelve months. The Company is currently subject to a three-year statute of limitations by major tax jurisdictions.

 

Note 9 – Commitments and Contingencies

 

Office space lease  

 

The Company leases office space from BKM Capital with the term commencing September 1, 2015 and ending August 31, 2020 at a monthly rate of $7,205.  

 
 
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

 

The following management discussion and analysis of financial condition and results of operations should be read in connection with the accompanying unaudited condensed financial statements and related notes thereto included elsewhere in this Report and the audited consolidated financial statements and notes thereto included in the Company's Form 10-K for the fiscal year ended September 30, 2017.

 

Cautionary Notice Regarding Forward Looking Statements

 

Readers are cautioned that the following discussion contains certain forward-looking statements and should be read in conjunction with the "Special Note Regarding Forward-Looking Statements" appearing at the beginning of this Annual Report.

 

The information contained in Item 7 contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Actual results may materially differ from those projected in the forward-looking statements as a result of certain risks and uncertainties set forth in this report. Although management believes that the assumptions made and expectations reflected in the forward-looking statements are reasonable, there is no assurance that the underlying assumptions will, in fact, prove to be correct or that actual results will not be different from expectations expressed in this report.

 

We desire to take advantage of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. This filing contains a number of forward-looking statements, which reflect management's current views and expectations with respect to our business, strategies, products, future results and events, and financial performance. All statements made in this filing other than statements of historical fact, including statements addressing operating performance, events, or developments which management expects or anticipates will or may occur in the future, including statements related to distributor channels, volume growth, revenues, profitability, new products, adequacy of funds from operations, statements expressing general optimism about future operating results, and non-historical information, are forward looking statements. In particular, the words "believe," "expect," "intend," "anticipate," "estimate," "may," variations of such words, and similar expressions identify forward-looking statements, but are not the exclusive means of identifying such statements, and their absence does not mean that the statement is not forward-looking. These forward-looking statements are subject to certain risks and uncertainties, including those discussed below. Our actual results, performance or achievements could differ materially from historical results as well as those expressed in, anticipated, or implied by these forward-looking statements. We do not undertake any obligation to revise these forward-looking statements to reflect any future events or circumstances.

 

Readers should not place undue reliance on these forward-looking statements, which are based on management's current expectations and projections about future events, are not guarantees of future performance, are subject to risks, uncertainties and assumptions (including those described below), and apply only as of the date of this filing. Our actual results, performance or achievements could differ materially from the results expressed in, or implied by, these forward looking statements. Factors which could cause or contribute to such differences include, but are not limited to, the risks to be discussed in our Annual Report on form 10-K and in the press releases and other communications to shareholders issued by us from time to time which attempt to advise interested parties of the risks and factors which may affect our business. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

 

Overview

 

We were incorporated in Nevada in October 15, 2012 and maintain our principal executive offices at 3395 W. Cheyenne Ave, North Las Vegas, NV 89032. For convenience in this report, the terms "Company," "Renewable," "REAP," "we" and "us" may be used to refer to Renewable Energy and Power, Inc. except where indicated otherwise. Our telephone number is (702) 685-9524.

 

 
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Company Overview

 

Mission Statement of Renewable Energy and Power Inc.: Provide investors with products expanding markets.

 

Renewable Energy and Power Inc. plans to provide renewable energy that is competitive with fossil fuels by employing proprietary new technologies, and combining them with existing solar and wind power generation and LED lighting. At this time, all solar and wind power energy products are in development and none have been delivered to a customer, all revenues are from MDI and LED Lites USA sales.

 

Renewable Energy and Power is a combination of two synergistic:

 

1.

Solar Hybrid (Sol-Hy) (All products in development at this time)

 

2.

LED Lites USA (All products sold through MDI)

 

These two divisions operating together within REAP create a synergistic effect for providing green energy. Both companies will function in international markets that are in vigorous growth stages of development, with long-term prospects in both the USA and international markets such as Germany, Spain and possibly South America. Within the USA, solar components are driven by federal and state legislation with tax incentives which vary by state and time.

 

Solar Hybrid (Sol-Hy)

 

The primary technology of Solar Hybrid, trade name Sol-Hy, is in solar energy concentration and conversion to electricity. A proprietary holographic lens structure, optical light guide, multi-junction semiconductor, and licensing of patented interconnect technology enables Sol-Hy to offer more efficient collection of solar energy than most existing conventional technologies. These patented processes increase solar cell interconnect reliability, providing higher electrical efficiency and significant production cost savings while conserving expensive semiconductor materials. The Company has licensed a number of patents for this process, and will file proprietary patents on developing technology as well as trademarks, trade names and copyrights.

 

Sol-Hy's competitive advantages in this field include:

 

 

·

A product in development in multi-junction solar panel that uses a technology developed for space satellites which outputs twice the power in the same amount of space as multi-crystalline silicon solar panel competitors. The core technology has been proven for years in space satellites and is now ready for wide-spread general power generation. REAP is actively developing a solar panel utilizing this technology and expects to be in limited production by 4th quarter 2016.

 

·

Solar cell efficiencies vary from 6% for amorphous silicon-based solar cells to 44.0% with multiple-junction production cells and 44.4% with multiple dies assembled into a hybrid package.[11][12] Solar cell energy conversion efficiencies for commercially available multi-crystalline Si solar cells are around 15%.

 

 

 

 

___________

[11]-"Solar Junction Breaks Concentrated Solar World Record with 43.5% Efficiency". Cnet.com.

 

[12]- Green, M.A. (2003).Third Generation Photovoltaics. Springer-Verlag. ISBN3-540-26562-7.

 

 

·

The foundational intellectual property is protected and will continue to be built upon to maintain a competitive edge. REAP has licensed the patents listed below to enable it to produce multi-junction solar cell products and feels that the purchased and licensed technologies are important in providing a secure basis for this development effort.

 

 

 

 

·

U.S. Patent Number 7,215,025

 

·

U.S. Patent Number 7,205,635

 

·

U.S. Patent Number 7,205,181

 

·

U.S. Patent Number 6,982,475

 

·

U.S. Patent Number 6,753,208

 

 
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The key to Solar Hybrid's success will be the performance and reliability of its panels. All of our products and their components will be rigorously tested to stringent industry standards. Our products are being designed to meet or exceed reliability and life-cycle viability for industry approval under the Energy Star criteria; however these products have not been tested or approved by the authorized agencies at this time. Certification by Underwriter Labs (UL) and other certification organizations are in process and the corporate ground work for ISO 9001:2008 and ISO 14001:2004 certifications are underway. These certification guarantees and underwriting will allow worldwide product distribution and installation once completed. Time for initial completion of UL and ISO is currently set for fourth quarter of 2016.

 

LED Lites USA

 

LED Lites USA is in the business of producing and marketing LED (Light Emitting Diode) light fixtures and components for both the residential and commercial markets. LED lighting is a green technology that consumes far less energy and requires much less maintenance than competing lighting technologies, making it highly competitive for both retrofit and new lighting systems.

 

Federal and State Legislation and Federal and State Tax Benefits are driving the LED lighting market not just in the United States but all over the world.

 

Federal Legislation includes the Energy Independence and Security Act of 2007 passed December 2007, confirmed July 15, 2011, requiring phasing out low efficiency incandescent lighting starting in the year 2012 in favor of CFL (Compact Fluorescent Light) bulbs and other high Lumen per Watt technologies. But CFL is at best an interim solution, far less efficient and more toxic (using mercury) than LED lighting which can be expected to be the lighting of choice as costs come down with the expansion of the market.

 

The Federal Energy Policy Act of 2005 offers tax incentives to energy-efficient commercial buildings. Any building that can cut its lighting power density by 25-50 percent is eligible to receive a tax reduction of 60 cents per square foot. By converting to LED bulbs, companies can reduce their electricity consumption for lighting by 60 percent. Not only do LED users see immediate reductions in their energy bills, they also receive government endorsed tax incentives for making their buildings more energy efficient.

 

LED Lites USA has its background in power supply technology and thermal management having been a spin-off of Multichip Display, Inc. in late 2012. For more than 20 years, Multichip Display and its predecessor Multichip Assembly have engineered and manufactured power supplies and electronic circuits for demanding military and commercial applications. These power supplies use multi-output switchers, linear and ferro-resonant topologies for the aerospace, defense, telecom, networking and industrial markets, in both custom and standard (VME, PCI, etc.) form factors.

 

 
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LED Lites USA will both leverage the technology of suppliers and develop technologies and intellectual properties of its own. Hundreds of millions of dollars have already been invested by component suppliers, for example in the LED chips themselves. Although, LED Lites USA has the flexibility to use several different suppliers of LED chips, they have developed special pricing contracts with primary suppliers. Flexibility of design will protect us from becoming someone else's captive customer with high pricing.

 

Our design approach gives LED Lites USA a platform for the Sun Harvesting, Motion Detection and light level selection options. Sun Harvesting provides energy savings through the sensing of ambient light conditions to reduce power on fixtures located near windows or other well illuminated areas while maintaining full light intensity on other fixtures in the same room. Motion Detection adjusts the light intensity to Light Level Selected intensity (reduced levels) when no motion is detected in the room.

 

LED Lites USA will use its core skills in thermal management, system packaging and manufacturing to develop and advance technology for two key purposes:

 

 

·

To develop product solutions that maintain a leadership position over its competitors based upon superior cost-benefit to its customers, as well as greater product functionality.

 

·

To drive down unit cost while maintaining the key domestic work-force through the advancement of manufacturing and assembly technology and processes.

 

Federal Legislation

 

The new energy bill (passed December 2007, confirmed July 15, 2011) began phasing out sales of incandescent lighting in 2012.

 

Tax Incentives

 

The Federal Energy Policy Act of 2005 offers tax incentives to energy-efficient commercial buildings. Any building that can cut its lighting power density by 25-50 percent is eligible to receive a tax reduction of 60 cents per square foot. By converting to LED bulbs, companies can reduce their electricity consumption for lighting by 60 percent. Not only do LED users see immediate reductions in their energy bills, they also receive government endorsed tax incentives for making their buildings more energy efficient.

 

"LED lighting is 70-80% more efficient than traditional lighting and can create some very dramatic lighting effects," states Roger Hale, energy consultant and owner of Commercial LED Lighting in Florida, "but the real asset of LED technology is the length of time these lights last." "Conservatively, we estimate that LED lights will last for at least 12 to 15 years, giving them a clear advantage over halogen and compact fluorescent lighting, (CFL)".

 

Business Strategy

 

The immediate business strategy is to pursue contracts with customers with lighting needs for outdoor newly installed and retrofit of existing facilities. We are in negotiations with a Cannabis growing company to supply their growing structures with computer controlled LED lights. We are in early production stage of this process. We will continue to manufacture and deliver lighting products for MDI, while the above negotiations are continuing. The company is currently delivering LED lighting to customers in the lighting market. The solar component of our business is not presently operating awaiting funding.

 

 
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Products

 

We presently produce lighting products under subcontract for MDI Industries, Inc. These products are for the aeronautical industry, commercial, and industrial applications. We have access to a full line of lighting from both domestic and foreign sources to supply lighting for new installations and/or to retrofit existing lighting installations.

 

Marketing and Sales

 

We employ commissioned salesmen to sell our products to various business groups, including the outdoor advertising industry, parking lot lights and lighting of sales and inventory areas for car dealers.

 

When funding to begin operations in the solar power area is available, we will employ the sales force needed to pursue customers in this area.

 

Manufacturing

 

Our manufacturing process generally consists of the following operations: (i) designing customer specific lighting products and specifying the parts, (ii) sourcing parts for products, (iii) warehousing these parts, (iv) assembling these parts into the products according to the specifications of the customer involved, (v) testing the products to insure that the specifications of the customer are met, (vi) shipping the products to the customer location, and (vii) arranging and overseeing the installation of the products at the customer's facility.

 

The assembly process entails the use of various mechanical and electronic tools that are housed in our facility in North Las Vegas. We employ, as contractors, skilled and experienced engineers and technicians.

 

Management Information and Communication Systems

 

We use customized computer software systems, as well as commercially-packaged software, for handling order entry and invoicing, manufacturing, inventory management, shipping, warehouse operations, customer service inquiries, accounting operations and management information. We believe that these systems have improved operating efficiencies and customer service.

 

Materials and Suppliers

 

We employ a purchasing staff that works with marketing, product development, formulations and quality control personnel to source raw materials for products as well as other items purchased by us. Raw materials are sourced principally from the United States, Europe and China. Raw materials used by us are available from a variety of suppliers. We seek to mitigate the risk of a shortage of parts and materials through our relationships with our principal suppliers, including identification of alternative suppliers for the same, or similar, parts and materials where available.

 

Government Regulation

 

At this time there are no government regulations other than SEC, IRS and Nevada State corporate compliance rules that apply to the Company's operations. The Company believes it is in compliance with all of these agencies rules and regulations.

 

 
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Competition

 

We are engaged in industries with a high degree of competition. There are many Lighting companies pursuing the same customers. We have a history of excellent products with our present customer, MDI Industries, Inc. and have a management team with years of experience in our chosen areas of operation. We intend to compete based on price, performance, and quality of the products offered to customers.

 

Intellectual Property

 

We have exclusives licenses for six patents covering for the solar manufacturing activity when the funding to begin this activity is achieved. As we derive additional products they will be patented and trademarked as necessary. 

 

Employees

 

At June 30, 2018, we employed approximately 5 full-time and approximately 5 part-time employees. None of our employees is represented by a collective bargaining unit. We believe that we have good relationships with our employees.

 

RESULTS OF OPERATIONS

 

For the three and nine months ended June 30, 2018 compared to the three and nine months ended June 30, 2017:

 

Revenues

 

Revenues for the three months ended June 30, 2018 totaled $139,410 as compared to $184,749 for the three months ended June 30, 2017.   

 

Revenues for the nine months ended June 30, 2018 totaled $446,166 as compared to $559,650 for the nine months ended June 30, 2017. The decrease in revenue is attributed to the slow down in sales to our primary customer. 

 

Gross Profit

 

Gross profit decreased by $20,210 to $20,539 for the three months ended June 30, 2018 from $40,749 for the three months ended June 30, 2017. A significant portion of this lower profit margin was due to increases in sales costs and materials as a result of low inventory levels. As a percentage of net sales, gross profit was 14.7% for the three months ended June 30, 2018 and 22.1% for the three months ended June 30, 2017.

 

Gross profit decreased by $31,470 to $57,785 for the nine months ended June 30, 2018 from $89,255 for the nine months ended June 30, 2017. A significant portion of this lower profit margin was due to increases in sales costs and materials as a result of low inventory levels.. As a percentage of net sales, gross profit was 13.0% for the nine months ended June 30, 2018 and 15.9% for the nine months ended June 30, 2017.

 

General and Administrative Expenses

 

General and administrative expenses decreased by $119,208 to $81,911 for the three months ended June 30, 2018 from $201,119 for the three months ended June 30, 2017. The decrease in general and administrative expenses is due to several factors,such as management and officers accepting a reduced salary.

 

General and administrative expenses increased by $105,234 to $307,550 for the nine months ended June 30, 2018 from $412,784 for the nine months ended June 30, 2017. The decrease in general and administrative expenses is due to several factors, such as management and officers accepting a reduced salary.

 

 
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Amortization of Intangible Assets

 

Amortization of intangible assets was $12,567 for the nine months ended June 30, 2018 and $43,803 for the nine months ended June 30, 2017. For each period, amortization expense was primarily related to intangible assets recorded in connection with the purchase of assets.

 

Amortization of intangible assets was $0 for the three months ended June 30, 2018 and $14,601 for the three months ended June 30, 2017. For each period, amortization expense was primarily related to intangible assets recorded in connection with the purchase of assets.

 

Depreciation of Property and Equipment

 

Depreciation of property and equipment totaled $33,786 for each of the nine months ended June 30, 2018 and 2017.

 

Depreciation of property and equipment totaled $11,262 for each of the three months ended June 30, 2018 and 2017.

 

Consultants

 

Consultants incurred from services provided by the officers of the Company and others totaled $172,850 and $236,959 for the nine months ended June 30, 2018 and 2017, respectively. The decrease in the expense was related to reduced work and time spent.

 

Consultants incurred from services provided by the officers of the Company and others totaled $39,471 and $154,070 for the three months ended June 30, 2018 and 2017, respectively. The decrease in the expense was related to reduced work and time spent.

 

Interest Expense

 

Interest expense for the nine months ended June 30, 2018 was $861,586 and includes $511,030 of amortization of debt discount and loan fees, origination interest of $276,867 and $22,081 of amortization of original issue discount. Interest expense for the nine months ended June 30, 2017 amounted to $156,399.

 

Interest expense for the three months ended June 30, 2018 was $241,398 and includes $68,887 of amortization of debt discount and loan fees, origination interest of $56,687 and $2,375 of amortization of original issue discount. Interest expense for the three months ended June 30, 2017 amounted to $76,430.

 

Liquidity and Capital Resources

 

As of June 30, 2018, we had cash of $-. Net cash used in operating activities was $201,500 and $221,915 for the nine months ended June 30, 2018 and 2017, respectively.

 

Our cash reserves will not be sufficient to meet our operational needs and we need to raise additional capital to pay for our operational expenses and provide for capital expenditures above the basic operational expenses, which are estimated at $20,000 per month. If we are not able to raise additional working capital, we may have to cease operations altogether.

 

Our future depends upon our relationship with MDI as well as MDI's future relies upon us. MDI Corporation is a minority owned government contractor, which previously assembled all of the products that were being sold by MDI. The owner of MDI no longer wished to be engaged in the assembly and manufacture of the products, but to become only a sales organization. Renewable purchased the equipment, inventory and business knowledge to begin business as a separate entity. Not only is MDI the sole customer of Renewable, but Renewable is the sole assembly and manufacture provider for MDI. As part of the agreement, MDI has agreed to support the operations of the Company through December 31, 2018.

 

 
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Summary

 

Our existing sources of liquidity will not provide cash to fund operations and make the required payments on our debt service for the next twelve months. Our ability to continue as a going concern is dependent entirely on raising funds through the sale of equity or debt. We will continue our attempt to raise additional capital. Some of the possibilities available to us are through private equity transactions, to develop a credit facility with a lender or the exercise of options and warrants. However, such additional capital may not be available to us at acceptable terms or at all. In the event that we are unable to obtain additional capital, we would be forced to cease operations altogether.

 

Off Balance Sheet Arrangements

 

During the three months ended June 30, 2018, we did not engage in any off balance sheet arrangements as defined in item 303(a)(4) of the SEC's Regulation S-K.

 

ITEM 3. QUANTITATIVE AND QUALITATIVE.

 

Quantitative and Qualitative Disclosures

 

Not Applicable.

 

ITEM 4. CONTROLS AND PROCEDURES.

 

Evaluation of Disclosure Controls and Procedures

 

Under the supervision of, and the participation of, our management, including our Chief Executive Officer and Chief Financial Officer, we have conducted an evaluation of our disclosure controls and procedures (as defined in Rules 13a-15 (e) and 15d-15(e) under the Securities and Exchange Act of 1934, as amended (the "Exchange Act")) as of the end of the period covered by this Quarterly Report on Form 10-Q to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms, and is accumulated and communicated to our management as appropriate to allow timely decisions regarding required disclosure.

 

Based on this evaluation and taking into account that certain material weaknesses existed as of September 30, 2017, our Chief Executive Officer and Chief Financial Officer have each concluded that our disclosure controls and procedures were not effective. As a result of this conclusion, the financial statements for the period covered by this Quarterly Report on Form 10-Q were prepared with particular attention to the material weaknesses. Notwithstanding the material weaknesses in internal controls that continue to exist as of June 30, 2018, we have concluded that the financial statements included in this Quarterly Report on Form 10-Q present fairly, the financial position, results of operations and cash flows of the Company as required for interim financial statements.

 

Due to the small number of employees dealing with general administrative and financial matters and the expenses associated with increases to remediate the disclosure controls and procedures that have been identified, the Company continued to operate without changes to its internal controls over financial reporting for the period covered by this Quarterly Report on Form 10-Q while continuing to seek the expertise it needs to remediate the material weaknesses at an appropriate cost benefit basis.

 

 
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PART II – OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS.

 

Two lawsuits have been filed for collection of convertible debentures having gone into default. On July 17, 2018 the company received notice that the Federal Court in Boston had ruled in favor of Labrys Fund in the amount of two hundred nineteen thousand four hundred sixty and sixteen cents ($219,460.16. These are being negotiated to arrive at an equitable solution. At the present time these notes have lost their conversion feature and cannot be converted unless the negotiation allows such. Current negotiation is aimed at allowing conversion at a controlled rate to preserve share price by limiting the rate of conversion.

 

ITEM 1A. RISK FACTORS.

 

In addition to the other information set forth in this Quarterly Report, careful consideration should be given to the following risk factors as well as the risk factors set forth in Part I, Item 1A, Risk Factors, of our Annual Report on Form 10-K for the fiscal year ended September 30, 2017, any of which could materially affect our business, operations, financial position, stock price, or future results. The risks described herein and in our Annual Report on Form 10-K for the fiscal year ended September 30, 2017 are important to an understanding of the statements made in this Quarterly Report, in our other filings with the SEC and in any other discussion of our business. These risk factors, which contain forward-looking information, should be read in conjunction with Item 2, Management's Discussion and Analysis of Financial Condition and Results of Operations, and the unaudited consolidated financial statements and related notes included in this Quarterly Report.

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

 

No sales of unregistered equity securities were made during the period.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

 

None.

 

ITEM 4. MINE SAFETY DISCLOSURES.

 

None.

 

ITEM 5. OTHER INFORMATION.

 

None.

 

 
23
 
Table of Contents

 

ITEM 6. EXHIBITS.

 

Exhibit

 

Description

 

31.1**

 

Certification of CEO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

 

31.2**

 

Certification of CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

 

32.1**

 

Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 

32.2**

 

Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 

 

 

101**

 

Interactive data files pursuant to Rule 405 of Regulation S-T

______________  

**  Filed herewith electronically 

 

 
24
 
Table of Contents

 

SIGNATURES

 

In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

RENEWABLE ENERGY AND POWER, INC.

 

Date: August 20, 2018

By:

/s/ Donald MacIntyre

 

Donald MacIntyre

 

Chief Executive Officer

 

By:

/s/ Bruce Parsons

 

Bruce Parsons

 

Chief Financial Officer

 

 

25

 

EX-31.1 2 reap_ex311.htm CERTIFICATION reap_ex311.htm

EXHIBIT 31.1

 

CERTIFICATION

 

I, Donald MacIntyre, certify that:

 

1.

I have reviewed this quarterly report on Form 10-Q of Renewable Energy and Power, Inc. (the "Registrant");

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 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 report;

4.

The Registrant's other certifying officer 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 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 report our conclusions about the effectiveness of the disclosure controls and procedures, and evaluated the effectiveness of our internal control over financial reporting, and printed in this report our conclusions about the effectiveness of our internal control over financial reporting as of the end of the period covered by this report based on such evaluation; and

d)

Disclosed in this 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 fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and

 

5.

The Registrant's other certifying officer 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 the Registrant's board of directors (or persons performing the equivalent functions):

 

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: August 20, 2018

By:

/s/ Donald MacIntyre

Donald MacIntyre

Chief Executive Officer

Renewable Energy and Power, Inc.

 

EX-31.2 3 reap_ex312.htm CERTIFICATION reap_ex312.htm

EXHIBIT 31.2

 

CERTIFICATION

 

I, Bruce Parsons, certify that:

 

1.

I have reviewed this quarterly report on Form 10-Q of Renewable Energy and Power, Inc. (the "Registrant");

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 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 report;

4.

The Registrant's other certifying officer 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 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 report our conclusions about the effectiveness of the disclosure controls and procedures, and evaluated the effectiveness of our internal control over financial reporting, and printed in this report our conclusions about the effectiveness of our internal control over financial reporting as of the end of the period covered by this report based on such evaluation; and

d)

Disclosed in this 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 fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and

 

5.

The Registrant's other certifying officer 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 the Registrant's board of directors (or persons performing the equivalent functions):

 

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: August 20, 2018

By:

/s/ Bruce Parsons

Bruce Parsons

Chief Financial Officer

Renewable Energy and Power, Inc.

 

EX-32.1 4 reap_ex321.htm CERTIFICATION reap_ex321.htm

EXHIBIT 32.1

 

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 Renewable Energy and Power, Inc. (the "Company") on Form 10-Q for the period ended June 30, 2018, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Donald MacIntyre, the Chief Executive Officer of the Company, hereby certifies, pursuant to and for purposes of 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his 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.

 

Dated: August 20, 2018

By:

/s/ Donald MacIntyre

Donald MacIntyre

Chief Executive Officer

 

EX-32.2 5 reap_ex322.htm CERTIFICATION reap_ex322.htm

EXHIBIT 32.2

 

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 Renewable Energy and Power, Inc. (the "Company") on Form 10-Q for the period ended June 30, 2018, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Bruce Parsons, the Chief Financial Officer of the Company, hereby certifies, pursuant to and for purposes of 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his 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.

 

Dated: August 20, 2018

By:

/s/ Bruce Parsons

Bruce Parsons

Chief Financial Officer

 

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Entity Filer Category Entity Common Stock, Shares Outstanding Document Fiscal Period Focus Document Fiscal Year Focus Statement [Table] Statement [Line Items] Assets Current assets: Cash Accounts receivable from MDI Accounts Receivable from others Inventory Total current assets Property, plant and equipment, net of depreciation Intangible asset, net of amortization Deposits Total Assets Liabilities and Shareholders' Deficit Current liabilities: Accounts payable Accounts payable MDI Accrued interest (MDI $1,500 at June 30, 2018 and $87,785 at September 30, 2017) Amounts due to officers and shareholder Short term notes payable to officer Convertible note payable, officer Convertible note payable to MDI Convertible note payable, net of discounts Derivative liability Total current liabilities Commitments and contingencies (Note 9) Shareholders' deficit: Preferred stock value Common stock, $0.001 par value; 10,010,000,000 shares authorized; 2,471,850,507 shares issued and outstanding at June 30, 2018 and 109,393,022 at September 30, 2017 Additional paid in capital Accumulated deficit Total shareholders' deficit Total Liabilities and Shareholders’ deficit Accrued interest MDI Common stock, par value Common stock, shares authorized Common stock, shares issued Common stock, shares outstanding Preferred Stock, Par Value Preferred Stock, Shares Authorized Preferred Stock, Shares Issued Preferred Stock, Shares Outstanding Condensed Statements Of Operations Revenue Cost of revenue Gross profit Operating expenses: General and administrative Depreciation and Amortization Total operating expenses Operating loss Other income (expenses): Interest expense Fair value of stock compensation Change in derivative liability Total Net loss Per share information - basic: Net loss per share Primary weighted average shares outstanding Condensed Statements Of Cash Flow Net cash used in operating activities Cash flows from financing activities: Proceeds from issuance of convertible notes payable Repayment of convertible note payable Proceeds from MDI notes payable Repayment of amounts due to officers and shareholder Proceeds from short term notes payable to officer Net cash provided by financing activities Net increase in cash Cash at beginning of period Cash at end of period Supplemental Cash Flow Disclosures Interest paid Taxes paid Supplemental Disclosures of Non-Cash Investing and Financing Activities Conversion of convertible note payable and accrued interest to common stock Debt discount on convertible notes payable Non-cash additions to convertible notes payable: Conversion of MDI note Consulting fees payable to officers and shareholder exchanged for convertible notes payable Convertible notes payable to officers exchanges for common stock Notes to Financial Statements Note 1 - Nature of Business Note 2 - Going Concern Note 3 - Summary of Significant Accounting Policies Note 4 - Multichip Display, Inc. (MDI) Note 5 - Related Party Transactions with Initial Shareholder Group Note 6 - Convertible Notes Payable Note 7 - Share Capital Note 8 - Income Taxes Note 9 - Commitments and Contingencies Summary Of Significant Accounting Policies Basis of presentation Management estimates Revenue recognition Accounts receivable Inventories Research and Development Costs Fair Value Measurement Derivative Financial Instruments Summary Of Significant Accounting Policies Reconciliation of fair value derivative liability Multichip Display Inc. Mdi Summary of sales and accounts receivable MDI Convertible Notes Payable Schedule of convertible notes Income Taxes Schedule of Components of Income Tax Expense Nature Of Business State or Country of Incorporation Date of incorporation Going Concern Loss from operations Working capital deficit Summary Of Significant Accounting Policies Balance at September 30, 2017 Conversion of debt to equity Decrease in fair value of the liability Additions to the liability Balance at June 30, 2018 Summary Of Significant Accounting Policies Allowance for bad debt Research and development costs Related Party Transactions with MDI, Amount Interest rate Maturity date Terms of convertible conversion description Conversion rate Common stock aggregate shares issued upon conversion of debt Consulting fees payable Consulting fees Due to related party Proceeds from short-term loan payable to officer Short-term loan payable to officer Convertible notes payable Unamortized original issue discount and debt discount Number of unrelated parties Convertible notes payable interest rate Conversion description Conversion price, description Maturity period Expected volatility Risk-free interest rate Expected dividend yield Debt conversion converted instrument shares issue Debt conversion converted amount Interest expense Amortization of debt discount and loan fees Amortization of original issue discount Origination interest Penalties and interest Unamortized loan discounts Litigation settlement, amount payable Contingently Issuable Shares Common stock for issuance of outstanding warrants Warranty exercisable period Exercise price description Outstanding and exercisable warrants, aggregate intrinsic value Warrants Outstanding and Exercisable Income Taxes Expected income tax (benefit) at statutory rates of 34% Change in non-deductible expenses Change in valuation allowance Income tax expense (benefit) Income Taxes Federal net operating tax loss carry-forward Net operating loss carryforwards, expiration year Deferred Tax Assets, Valuation Allowance Monthly lease rate Lease expire date custom:AccruedInterestPayableMember custom:ConvertibleNotePayableMember custom:InventoryPurchasesMember custom:NetOperatingLossCarryforwardsExpirationDate custom:ReceivableMember custom:SummaryOfSalesAndAccountsReceivableMdiTableTextBlock Assets, Current Assets [Default Label] Liabilities, Current Stockholders' Equity Attributable to Parent Liabilities and Equity Gross Profit Operating Expenses Other Nonoperating Income (Expense) Net Income (Loss) Attributable to Parent Repayments of Convertible Debt Repayments of Related Party Debt Net Cash Provided by (Used in) Financing Activities Cash and Cash Equivalents, Period Increase (Decrease) Derivative, Loss on Derivative EX-101.PRE 11 reap-20180630_pre.xml XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE XML 12 R1.htm IDEA: XBRL DOCUMENT v3.10.0.1
Document and Entity Information - shares
9 Months Ended
Jun. 30, 2018
Aug. 17, 2018
Document And Entity Information    
Entity Registrant Name Renewable Energy & Power, Inc.  
Entity Central Index Key 0001608430  
Document Type 10-Q  
Document Period End Date Jun. 30, 2018  
Amendment Flag false  
Current Fiscal Year End Date --09-30  
Is Entity a Well-known Seasoned Issuer? No  
Is Entity a Voluntary Filer? No  
Is Entity's Reporting Status Current? Yes  
Entity Filer Category Smaller Reporting Company  
Entity Common Stock, Shares Outstanding   1,597,878,840
Document Fiscal Period Focus Q3  
Document Fiscal Year Focus 2018  
XML 13 R2.htm IDEA: XBRL DOCUMENT v3.10.0.1
Condensed Balance Sheets - USD ($)
Jun. 30, 2018
Sep. 30, 2017
Current assets:    
Cash
Accounts receivable from MDI 1,743,320 1,328,053
Accounts Receivable from others 3,650 11,417
Inventory 176,020 66,574
Total current assets 1,922,990 1,406,044
Property, plant and equipment, net of depreciation 195,595 229,381
Intangible asset, net of amortization 12,567
Deposits 5,000 5,000
Total Assets 2,123,585 1,652,992
Current liabilities:    
Accounts payable 104,636 44,560
Accounts payable MDI 1,709,508 1,291,772
Accrued interest (MDI $1,500 at June 30, 2018 and $87,785 at September 30, 2017) 29,555 131,308
Amounts due to officers and shareholder 264,275 180,175
Short term notes payable to officer 59,774 56,974
Convertible note payable, officer 5,700 5,700
Convertible note payable to MDI 25,000 103,785
Convertible note payable, net of discounts 590,508 293,600
Derivative liability 366,803 3,047,887
Total current liabilities 3,155,759 5,155,761
Commitments and contingencies (Note 9)
Shareholders' deficit:    
Common stock, $0.001 par value; 10,010,000,000 shares authorized; 2,471,850,507 shares issued and outstanding at June 30, 2018 and 109,393,022 at September 30, 2017 2,471,850 109,393
Additional paid in capital 8,538,437 8,124,248
Accumulated deficit (12,052,461) (11,736,410)
Total shareholders' deficit (1,032,174) (3,502,769)
Total Liabilities and Shareholders’ deficit 2,123,585 1,652,992
Series A Preferred Stock [Member]    
Shareholders' deficit:    
Preferred stock value $ 10,000
XML 14 R3.htm IDEA: XBRL DOCUMENT v3.10.0.1
Condensed Balance Sheets (Parenthetical) - USD ($)
Jun. 30, 2018
Sep. 30, 2017
Current liabilities:    
Accrued interest MDI $ 1,500 $ 87,785
Shareholders' deficit:    
Common stock, par value $ 0.001 $ 0.001
Common stock, shares authorized 10,010,000,000 10,010,000,000
Common stock, shares issued 2,471,850,507 109,393,022
Common stock, shares outstanding 2,471,850,507 109,393,022
Preferred Stock, Par Value $ 0.001  
Preferred Stock, Shares Authorized 10,000,000  
Preferred Stock, Shares Issued 10,000,000  
Preferred Stock, Shares Outstanding 10,000,000  
Series A Preferred Stock [Member]    
Shareholders' deficit:    
Preferred Stock, Par Value $ 0.001  
Preferred Stock, Shares Authorized 10,000,000  
Preferred Stock, Shares Issued 10,000,000  
Preferred Stock, Shares Outstanding 10,000,000  
XML 15 R4.htm IDEA: XBRL DOCUMENT v3.10.0.1
Condensed Statements of Operations (Unaudited) - USD ($)
3 Months Ended 9 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Condensed Statements Of Operations        
Revenue $ 139,410 $ 184,749 $ 446,166 $ 559,650
Cost of revenue 118,871 144,000 388,381 470,395
Gross profit 20,539 40,749 57,785 89,255
Operating expenses:        
General and administrative 81,911 201,119 307,550 412,784
Depreciation and Amortization 11,262 25,863 46,353 77,589
Total operating expenses 93,173 226,982 353,903 490,373
Operating loss (72,634) (186,233) (296,118) (401,118)
Other income (expenses):        
Interest expense (241,398) (76,430) (861,586) (156,399)
Fair value of stock compensation (6,227,500)
Change in derivative liability 97,989 (700,800) 841,653 (814,000)
Total (143,409) (777,230) (19,933) (7,197,899)
Net loss $ (216,043) $ (963,463) $ (316,051) $ (7,599,017)
Per share information - basic:        
Net loss per share $ (0.00) $ (0.03) $ 0.00 $ (0.65)
Primary weighted average shares outstanding 1,898,704,646 27,655,096 1,059,900,819 11,653,799
XML 16 R5.htm IDEA: XBRL DOCUMENT v3.10.0.1
Condensed Statements of Cash Flow (Unaudited) - USD ($)
9 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Condensed Statements Of Cash Flow    
Net cash used in operating activities $ (201,500) $ (221,915)
Cash flows from financing activities:    
Proceeds from issuance of convertible notes payable 187,000 378,354
Repayment of convertible note payable (10,000)
Proceeds from MDI notes payable 30,200
Repayment of amounts due to officers and shareholder (8,500) (75,000)
Proceeds from short term notes payable to officer 2,800 3,720
Net cash provided by financing activities 201,500 307,074
Net increase in cash 85,159
Cash at beginning of period 571
Cash at end of period 85,730
Supplemental Cash Flow Disclosures    
Interest paid
Taxes paid
Supplemental Disclosures of Non-Cash Investing and Financing Activities    
Conversion of convertible note payable and accrued interest to common stock 947,927 4,650
Debt discount on convertible notes payable 341,977 13,500
Non-cash additions to convertible notes payable:    
Conversion of MDI note 191,570
Consulting fees payable to officers and shareholder exchanged for convertible notes payable 25,000
Convertible notes payable to officers exchanges for common stock $ 25,000
XML 17 R6.htm IDEA: XBRL DOCUMENT v3.10.0.1
Nature of Business
9 Months Ended
Jun. 30, 2018
Notes to Financial Statements  
Note 1 - Nature of Business

Renewable Energy and Power (the Company or REAP) was incorporated on October 15, 2012, under the laws of the State of Nevada, for the purpose of conducting all legal business.

 

The accompanying unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") and the rules and regulations of the U.S. Securities and Exchange Commission ("SEC"), as amended for interim financial information.

 

These financial statements should be read in conjunction with the audited financial statements and the notes thereto included in the Company's 2017 Annual Report on Form 10-K. The accompanying unaudited financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations and cash flows for the interim periods but are not necessarily indicative of the results for any subsequent quarter or the entire year ending September 30, 2018.

 

Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. It is management's opinion, however, that all material adjustments (consisting of normal recurring adjustments) have been made which are necessary for a fair financial statement presentation. The interim results for the three months ended June 30, 2018 are not necessarily indicative of results for the full fiscal year.

 

The Company is engaged in the business of new and retrofit applications for LED lighting and innovative solar electrical generation. The LED products will lower the use of electrical power, lower maintenance costs for users and extend the useful life of lighting fixtures.

 

The solar process will greatly increase the conversion of heat to electricity, and is patterned after technology that has been used in space exploration for many years.

 

Management knows of no material adjustments needed in these financial statements to conform to Generally Accepted Accounting Principles.

XML 18 R7.htm IDEA: XBRL DOCUMENT v3.10.0.1
Going Concern
9 Months Ended
Jun. 30, 2018
Notes to Financial Statements  
Note 2 - Going Concern

These financial statements for the nine months ended June 30, 2018 were prepared assuming the Company will continue as a going concern. During the nine months ended June 30, 2018, the Company had a loss from operations of $296,118, negative working capital of $1,232,769 and has an accumulated deficit of $12,052,461 at June 30, 2018. These factors raise a substantial doubt about the company’s ability to continue as a going concern. In view of the matters described above, recoverability of a major portion of the recorded asset amounts shown in the accompanying balance sheets is dependent upon continued operations of the Company, which in turn is dependent upon the Company's ability to raise additional capital, obtain financing and to succeed in its future operations. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

 

The Company has begun principal operations and, as is common with a start-up company, the Company has had recurring losses during its early stage. The Company's financial statements are prepared using generally accepted accounting principles applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, the Company does not have significant cash or other material assets, nor does it have an established source of revenue sufficient to cover its operating costs and to allow it to continue as a going concern. In the interim, shareholders of the Company have committed to meeting its minimal operating expenses.

XML 19 R8.htm IDEA: XBRL DOCUMENT v3.10.0.1
Summary of Significant Accounting Policies
9 Months Ended
Jun. 30, 2018
Notes to Financial Statements  
Note 3 - Summary of Significant Accounting Policies

Basis of presentation

 

The Company reports revenues and expenses using the accrual method of accounting for financial and tax reporting purposes. These financial statements are presented in United States dollars and have been prepared in accordance with United States generally accepted accounting principles.

 

Management estimates

 

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

Revenue recognition

 

The Company recognizes revenue from sales at the time the products are shipped, the price is determinable, the customers are invoiced and payment is reasonably assured. Invoices are due on a net 30 day basis. Shipping and handling costs are billed to customers and netted against shipping and handling expenses incurred by the Company, which are included in cost of revenues. All of the Company's sales are to Multichip Display, Inc. (MDI), a shareholder of the Company. See Note 4.

 

Accounts receivable

 

The Company grants credit, generally without collateral. The Company performs periodic credit evaluations of its customers' financial condition and believes that its customer acceptance, billing and collection policies are adequate to minimize potential credit risk. The Company has not incurred any credit losses to date. The Company provides an allowance for doubtful accounts that is based upon a review of outstanding receivables, historical collection information, and existing economic conditions. The allowance for bad debt is $0 at June 30, 2018 and September 30, 2017. Normal accounts receivable past due more than 30 days are considered delinquent. Delinquent receivables are written off based on individual credit evaluation and specific circumstances of the customer. See Note 4.

 

Inventories

 

Inventories are carried at the lower of cost (first-in, first-out, FIFO) or net realizable value and include primarily LED light fixtures. The inventories were purchased from vendors in Asia.

 

Research and Development Costs

 

Expenditures for research activities relating to product development and improvement are charged to expense as incurred. During the three months ended June 30, 2018 and 2017, research and development costs totaled $0 and $18,957, respectively, and for the nine months ended June 30, 2018 and 2017 was $0 and $31,277, respectively.

 

Fair Value Measurement

 

Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurement (“ASC 820”), provides a comprehensive framework for measuring fair value and expands disclosures which are required about fair value measurements. Specifically, ASC 820 sets forth a definition of fair value and establishes a hierarchy prioritizing the inputs to valuation techniques, giving the highest priority to quoted prices in active markets for identical assets and liabilities and the lowest priority to unobservable value inputs. ASC 820 defines the hierarchy as follows:

 

  Level 1 - Quoted prices are available in active markets for identical assets or liabilities as of the reported date. The types of assets and liabilities included in Level 1 are highly liquid and actively traded instruments with quoted prices, such as equities listed on the New York Stock Exchange.
   
  Level 2 - Pricing inputs are other than quoted prices in active markets, but are either directly or indirectly observable as of the reported date. The types of assets and liabilities in Level 2 are typically either comparable to actively traded securities or contracts or priced with models using highly observable inputs.
   
  Level 3 - Significant inputs to pricing that are unobservable as of the reporting date. The types of assets and liabilities included in Level 3 are those with inputs requiring significant management judgment or estimation, such as complex and subjective models and forecasts used to determine the fair value of financial transmission rights.

 

Our financial instruments consist of accounts receivable, accounts payable, accrued expenses and convertible and term debt. The carrying value of our financial instruments approximates their fair value due to their relative short maturities and the nature of the debt.

  

Derivative Financial Instruments

 

We do not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks. We evaluate all of our financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, we used a Black Scholes valuation model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date.

 

A reconciliation of the changes in the Company’s Level 3 derivative liability at fair value is as follows:

 

Balance at September 30, 2017   $ 3,047,887  
Conversions of debt to equity     (1,463,978 )
Decrease in fair value of the liability     (1,737,784 )
Additions to the liability     520,678  
Balance at June 30, 2018   $ 366,803  
XML 20 R9.htm IDEA: XBRL DOCUMENT v3.10.0.1
Multichip Display, Inc. (MDI)
9 Months Ended
Jun. 30, 2018
Notes to Financial Statements  
Note 4 - Multichip Display, Inc. (MDI)

The Company has an exclusive contract to manufacture products under contract from MDI. MDI will be the sales agent for certain government and private company contracts; REAP manufactures products based on bid prices as agreed between the parties. The Company has also agreed to purchase parts from MDI. As part of the agreement, MDI has agreed to support the operations of the Company through December 31, 2018. MDI is both a significant customer and significant vendor of the Company. For the nine months ended June 30, 2018 and 2017, substantially all of the Company's sales resulted from transactions with MDI. The Company had the following related party transactions through June 30, 2018 for the time periods shown in the tables below. 

 

   

Nine Months ended

June 30,

 
    2018     2017  
             
Sales to MDI   $ 446,166     $ 554,739  
Inventory purchases from MDI*     241,919       430,502  
Interest expense to MDI     1,500       123,063  
Receivable from MDI     1,743,320       1,163,053  
Accounts payable to MDI     1,709,508       995,637  
Accrued interest payable to MDI     1,500       123,063  
Convertible note payable to MDI, net of discount of $18,298 in 2017     25,000       109,765  

____________  

* Includes borrowings to pay for direct labor.

 

The agreement with MDI includes an offset clause for accounts receivable from MDI and accounts payable to MDI. The Company issued three new 8% Convertible Promissory Notes in the amounts of $15,000, $5,000 and $5,000 during the nine months ended June 30, 2018. These notes mature on December 31, 2018 and are convertible at the lower of common stock par value of $0.001 per share or 50% of the current market price at the time of conversion. These notes originated in Q1 (November 2017). During the quarter ended June 30, 2018, two unrelated lenders purchased the prior convertible note and accrued interest from MDI. The lenders exercised the conversion rights stipulated in the note and the Company issued an aggregate of 288,052,345 shares of $.001 par value common stock related thereto.

XML 21 R10.htm IDEA: XBRL DOCUMENT v3.10.0.1
Related Party Transactions with Initial Shareholder Group
9 Months Ended
Jun. 30, 2018
Notes to Financial Statements  
Note 5 - Related Party Transactions with Initial Shareholder Group

Consulting fees payable to officers and shareholder

 

During the nine months ended June 30, 2018 and 2017, the Company incurred $91,900 and $152,612, respectively, of consulting fees which are payable to two officers and two shareholders of the Company. Total consulting fees payable to these officers and shareholder as of June 30, 2018 and September 30, 2017 were $203,415 and $112,315 respectively.

 

Payable to shareholder

 

Payable to shareholder totaled $60,860 and $67,860 at June 30, 2018 and September 30, 2017, respectively.

 

Short-term and convertible notes payable to officers

 

As of June 30, 2018 and September 30, 2017, convertible notes payable, officer totaled $5,700 and short term notes payable to officer amounted to $59,774 and $56,974 respectively.

XML 22 R11.htm IDEA: XBRL DOCUMENT v3.10.0.1
Convertible Notes Payable
9 Months Ended
Jun. 30, 2018
Notes to Financial Statements  
Note 6 - Convertible Notes Payable

The carrying value of convertible notes at June 30, 2018 and September 30, 2017 was comprised of:

 

    June 30,     September 30,  
    2018     2017  
Convertible notes payable   $ 678,039     $ 598,765  
Unamortized original issue discount and debt discount     (87,531 )     (305,165 )
    $ 590,508     $ 293,600  

 

Interest expense for the nine months ended June 30, 2018 was $861,586 and includes $511,030 of amortization of debt discount and loan fees, origination interest of $276,867 and $22,081 of amortization of original issue discount. Interest expense for the nine months ended June 30, 2017 amounted to $156,399.

 

During the years ended September 30, 2017 and 2016 and the nine months ended June 30, 2018, we executed a series of Promissory Notes (the “Notes”) to seven unrelated entities. The Notes have initial terms of one year or less. The notes carry face interest rates from 8% to 12% per annum. The Lenders have the rights, at any time and/or after 180 days at their election to convert all or part of the outstanding and unpaid principal and accrued interest into shares of our common stock. The conversion price is generally a range of between 50% and 58% of a two-day average of the lowest trading price in the 15 to 25 range of trading days prior the conversion. During the quarter ending June 30, 2018 two of the lenders have sued for payment, which terminates their conversion rights. Aggregate amounts claimed pursuant to the lawsuits amounted to $448,833 including certain penalties and interest. Amounts included in convertible notes payable for these lenders amounted to $321,516 after the write-off of unamortized loan discounts of $181,869. Additionally, the Company eliminated $467,529 of the derivative liability related to these loans. Negotiations for settlement of the suits is currently in process. On July 6, 2018 a judgement in favor of one lender was entered in the amount of $219,460 which amount has been fully recorded in the financial statements.

 

During the nine months ended June 30, 2018 the Company’s lenders converted an aggregate of $420,394 of the face value of notes payable plus accrued interest into an aggregate of 2,362,457,485 shares of $.001 par value common stock.

 

We valued the derivative liability at the end of each accounting period and the difference in value is recognized as gain or loss. At June 30, 2018, we determined the valuation using the Black-Sholes valuation model with the following assumptions: dividend yield of zero, 0.01 to 01.25 years to maturity, risk free interest rate of 2.25% and annualized volatility of 158% to 486%. We recognized $841,653 of income for the change in value of the derivative for the nine months ended June 30, 2018.

XML 23 R12.htm IDEA: XBRL DOCUMENT v3.10.0.1
Share Capital
9 Months Ended
Jun. 30, 2018
Notes to Financial Statements  
Note 7 - Share Capital

The Company is authorized to issue 10,010,000,000 shares of common stock with a par value of $.001 and 10,000,000 of $.001 par value preferred stock. The Company had 2,471,850,507 shares of $.001 par value common stock outstanding and 10,000,000 shares of $.001 par value preferred stock outstanding at June 30, 2018. Additionally, at June 30, 2018 there were 2,726,409,064 contingently issuable shares related to the Company’s convertible notes payable.

 

Common Stock Purchase Warrants For warrants granted to non-employees in exchange for services, we recorded the fair value of the equity instrument using the Black-Scholes pricing model unless the value of the services is more reliably measurable. On July 11, 2017 we issued a common stock purchase warrant to a lender as additional compensation for its services provided to date. The warrant provides for the issuance of 167,667 shares of our $.001 par value common stock at a variable exercise price based on the market price of our stock but with a “floor price” of $.01 per share. The warrants are exercisable for a period of 5 years from the date of issue.

 

The aggregate intrinsic value of the 167,667 outstanding and exercisable warrants at September 30, 2017 was approximately $8,500. The intrinsic value is the difference between the closing stock price on September 30, 2017 and the exercise price, multiplied by the number of in-the money warrants had all warrant holders exercised their warrants on September 30, 2017. The lender will be entitled to similar warrants issuances under a master lending agreement as additional funding to the Company is received.

 

No warrants were exercised and no additional warrants were issued during the nine months ended June 30, 2018.

XML 24 R13.htm IDEA: XBRL DOCUMENT v3.10.0.1
Income Taxes
9 Months Ended
Jun. 30, 2018
Notes to Financial Statements  
Note 8 - Income Taxes

The difference between the expected income tax expense (benefit) and the actual tax expense (benefit) computed by using the Federal statutory rates is as follows:

 

    For the Nine  
    Months Ended  
    June 30,  
    2018     2017  
Expected income tax (benefit) at statutory             
  rates of 34%   $ 107,457     $ (2,183,000 )
Change in non-deductable expenses     (338,633 )     2,155,800  
Change in valuation allowance     231,176       27,200  
    $ -     $ -  

 

The Company had a federal net operating tax loss carry-forward of approximately $3,652,000 as of June 30, 2018. The tax loss carry-forwards are available to offset future taxable income with the federal carry-forwards beginning to expire in 2033.

 

At June 30, 2018 the deferred tax valuation allowance increased by $231,176 from September 30, 2017. The realization of the tax benefits is subject to the sufficiency of taxable income in future years. The deferred tax assets represent the amounts expected to be realized before expiration. The Company periodically assesses the likelihood that it will be able to recover its deferred tax assets. The Company considers all available evidence, both positive and negative, including historical levels of income, expectations and risks associated with estimates of future taxable income and ongoing prudent and feasible profits. As of June 30, 2018 and September 30, 2017, the Company established valuation allowances equal to the full amount of the net deferred tax assets due to the uncertainty of the utilization of the operating losses in future periods.

 

During the nine months ended June 30, 2018 and 2017, no amounts have been recognized for uncertain tax positions and no amounts have been recognized related to interest or penalties related to uncertain tax positions. The Company has determined that it is not reasonably likely for the amounts of unrecognized tax benefits to significantly increase or decrease within the next twelve months. The Company is currently subject to a three-year statute of limitations by major tax jurisdictions.

XML 25 R14.htm IDEA: XBRL DOCUMENT v3.10.0.1
Commitments and Contingencies
9 Months Ended
Jun. 30, 2018
Notes to Financial Statements  
Note 9 - Commitments and Contingencies

Office space lease  

 

The Company leases office space from BKM Capital with the term commencing September 1, 2015 and ending August 31, 2020 at a monthly rate of $7,205.  

XML 26 R15.htm IDEA: XBRL DOCUMENT v3.10.0.1
Summary of Significant Accounting Policies (Policies)
9 Months Ended
Jun. 30, 2018
Summary Of Significant Accounting Policies  
Basis of presentation

The Company reports revenues and expenses using the accrual method of accounting for financial and tax reporting purposes. These financial statements are presented in United States dollars and have been prepared in accordance with United States generally accepted accounting principles.

Management estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Revenue recognition

The Company recognizes revenue from sales at the time the products are shipped, the price is determinable, the customers are invoiced and payment is reasonably assured. Invoices are due on a net 30 day basis. Shipping and handling costs are billed to customers and netted against shipping and handling expenses incurred by the Company, which are included in cost of revenues. All of the Company's sales are to Multichip Display, Inc. (MDI), a shareholder of the Company. See Note 4.

Accounts receivable

The Company grants credit, generally without collateral. The Company performs periodic credit evaluations of its customers' financial condition and believes that its customer acceptance, billing and collection policies are adequate to minimize potential credit risk. The Company has not incurred any credit losses to date. The Company provides an allowance for doubtful accounts that is based upon a review of outstanding receivables, historical collection information, and existing economic conditions. The allowance for bad debt is $0 at June 30, 2018 and September 30, 2017. Normal accounts receivable past due more than 30 days are considered delinquent. Delinquent receivables are written off based on individual credit evaluation and specific circumstances of the customer. See Note 4.

Inventories

Inventories are carried at the lower of cost (first-in, first-out, FIFO) or net realizable value and include primarily LED light fixtures. The inventories were purchased from vendors in Asia.

Research and Development Costs

Expenditures for research activities relating to product development and improvement are charged to expense as incurred. During the three months ended June 30, 2018 and 2017, research and development costs totaled $0 and $18,957, respectively, and for the nine months ended June 30, 2018 and 2017 was $0 and $31,277, respectively.

Fair Value Measurement

Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurement (“ASC 820”), provides a comprehensive framework for measuring fair value and expands disclosures which are required about fair value measurements. Specifically, ASC 820 sets forth a definition of fair value and establishes a hierarchy prioritizing the inputs to valuation techniques, giving the highest priority to quoted prices in active markets for identical assets and liabilities and the lowest priority to unobservable value inputs. ASC 820 defines the hierarchy as follows:

 

  Level 1 - Quoted prices are available in active markets for identical assets or liabilities as of the reported date. The types of assets and liabilities included in Level 1 are highly liquid and actively traded instruments with quoted prices, such as equities listed on the New York Stock Exchange.
   
  Level 2 - Pricing inputs are other than quoted prices in active markets, but are either directly or indirectly observable as of the reported date. The types of assets and liabilities in Level 2 are typically either comparable to actively traded securities or contracts or priced with models using highly observable inputs.
   
  Level 3 - Significant inputs to pricing that are unobservable as of the reporting date. The types of assets and liabilities included in Level 3 are those with inputs requiring significant management judgment or estimation, such as complex and subjective models and forecasts used to determine the fair value of financial transmission rights.

 

Our financial instruments consist of accounts receivable, accounts payable, accrued expenses and convertible and term debt. The carrying value of our financial instruments approximates their fair value due to their relative short maturities and the nature of the debt.

Derivative Financial Instruments

We do not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks. We evaluate all of our financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, we used a Black Scholes valuation model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date.

 

A reconciliation of the changes in the Company’s Level 3 derivative liability at fair value is as follows:

 

Balance at September 30, 2017   $ 3,047,887  
Conversions of debt to equity     (1,463,978 )
Decrease in fair value of the liability     (1,737,784 )
Additions to the liability     520,678  
Balance at June 30, 2018   $ 366,803  
XML 27 R16.htm IDEA: XBRL DOCUMENT v3.10.0.1
Summary of Significant Accounting Policies (Tables)
9 Months Ended
Jun. 30, 2018
Summary Of Significant Accounting Policies Tables Abstract  
Reconciliation of fair value derivative liability

Balance at September 30, 2017   $ 3,047,887  
Conversions of debt to equity     (1,463,978 )
Decrease in fair value of the liability     (1,737,784 )
Additions to the liability     520,678  
Balance at June 30, 2018   $ 366,803  

XML 28 R17.htm IDEA: XBRL DOCUMENT v3.10.0.1
Multichip Display, Inc. (MDI) (Tables)
9 Months Ended
Jun. 30, 2018
Multichip Display Inc. Mdi  
Summary of sales and accounts receivable MDI

   

Nine Months ended

June 30,

 
    2018     2017  
             
Sales to MDI   $ 446,166     $ 554,739  
Inventory purchases from MDI*     241,919       430,502  
Interest expense to MDI     1,500       123,063  
Receivable from MDI     1,743,320       1,163,053  
Accounts payable to MDI     1,709,508       995,637  
Accrued interest payable to MDI     1,500       123,063  
Convertible note payable to MDI, net of discount of $18,298 in 2017     25,000       109,765  

XML 29 R18.htm IDEA: XBRL DOCUMENT v3.10.0.1
Convertible Notes Payable (Tables)
9 Months Ended
Jun. 30, 2018
Convertible Notes Payable  
Schedule of convertible notes

    June 30,     September 30,  
    2018     2017  
Convertible notes payable   $ 678,039     $ 598,765  
Unamortized original issue discount and debt discount     (87,531 )     (305,165 )
    $ 590,508     $ 293,600  

XML 30 R19.htm IDEA: XBRL DOCUMENT v3.10.0.1
Income Taxes (Tables)
9 Months Ended
Jun. 30, 2018
Income Taxes  
Schedule of Components of Income Tax Expense
    For the Nine  
    Months Ended  
    June 30,  
    2018     2017  
Expected income tax (benefit) at statutory             
  rates of 34%   $ 107,457     $ (2,183,000 )
Change in non-deductable expenses     (338,633 )     2,155,800  
Change in valuation allowance     231,176       27,200  
    $ -     $ -  
XML 31 R20.htm IDEA: XBRL DOCUMENT v3.10.0.1
Nature of Business (Details Narrative)
9 Months Ended
Jun. 30, 2018
Nature Of Business  
State or Country of Incorporation Nevada
Date of incorporation Oct. 15, 2012
XML 32 R21.htm IDEA: XBRL DOCUMENT v3.10.0.1
Going Concern (Details Narrative) - USD ($)
3 Months Ended 9 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Sep. 30, 2017
Going Concern          
Loss from operations $ (72,634) $ (186,233) $ (296,118) $ (401,118)  
Accumulated deficit (12,052,461)   (12,052,461)   $ (11,736,410)
Working capital deficit $ (1,232,769)   $ (1,232,769)    
XML 33 R22.htm IDEA: XBRL DOCUMENT v3.10.0.1
Summary of Significant Accounting Policies (Details)
9 Months Ended
Jun. 30, 2018
USD ($)
Summary Of Significant Accounting Policies Details Abstract  
Balance at September 30, 2017 $ 3,047,887
Conversion of debt to equity (1,463,978)
Decrease in fair value of the liability (1,737,784)
Additions to the liability 520,678
Balance at June 30, 2018 $ 366,803
XML 34 R23.htm IDEA: XBRL DOCUMENT v3.10.0.1
Summary of Significant Accounting Policies (Details Narrative) - USD ($)
3 Months Ended 9 Months Ended 12 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Sep. 30, 2017
Summary Of Significant Accounting Policies Details Narrative Abstract          
Allowance for bad debt     $ 0   $ 0
Research and development costs $ 0 $ 18,957 $ 0 $ 31,277  
XML 35 R24.htm IDEA: XBRL DOCUMENT v3.10.0.1
Multichip Display, Inc. (MDI) (Details) - USD ($)
9 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Sales [Member]    
Related Party Transactions with MDI, Amount $ 446,166 $ 554,739
Inventory purchases [Member]    
Related Party Transactions with MDI, Amount [1] 241,919 430,502
Interest Expense [Member]    
Related Party Transactions with MDI, Amount 1,500 123,063
Receivable [Member]    
Related Party Transactions with MDI, Amount 1,743,320 1,163,053
Accounts payable [Member]    
Related Party Transactions with MDI, Amount 1,709,508 995,637
Accrued interest payable [Member]    
Related Party Transactions with MDI, Amount 1,500 123,063
Convertible note payable [Member]    
Related Party Transactions with MDI, Amount $ 25,000 $ 109,765
[1] * Includes borrowings to pay for direct labor.
XML 36 R25.htm IDEA: XBRL DOCUMENT v3.10.0.1
Multichip Display, Inc. (MDI) (Details Narrative) - USD ($)
9 Months Ended
Jun. 30, 2018
Sep. 30, 2017
Common stock, par value $ 0.001 $ 0.001
Convertible Notes Payable [Member]    
Interest rate 8.00%  
Maturity date Dec. 31, 2018  
Terms of convertible conversion description These notes mature on December 31, 2018 and are convertible at the lower of common stock par value of $0.001 per share or 50% of the current market price at the time of conversion.  
Conversion rate $ 0.001  
Convertible Notes Payable One [Member]    
Related Party Transactions with MDI, Amount $ 15,000  
Convertible Notes Payable Two [Member]    
Related Party Transactions with MDI, Amount 5,000  
Convertible Notes Payable Three [Member]    
Related Party Transactions with MDI, Amount $ 5,000  
MULTICHIP DISPLAY, INC. [Member]    
Common stock aggregate shares issued upon conversion of debt 288,052,345  
Common stock, par value $ 0.001  
XML 37 R26.htm IDEA: XBRL DOCUMENT v3.10.0.1
Related Party Transactions with Initial Shareholder Group (Details Narrative) - USD ($)
9 Months Ended 12 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Sep. 30, 2017
Short-term loan payable to officer $ 59,774   $ 56,974
Shareholder [Member]      
Due to related party 60,860   67,860
Two officers and two shareholders [Member]      
Consulting fees payable 91,900 $ 152,612  
Consulting fees 203,415   112,315
Officer [Member]      
Proceeds from short-term loan payable to officer $ 5,700   $ 5,700
XML 38 R27.htm IDEA: XBRL DOCUMENT v3.10.0.1
Convertible Notes Payable (Details) - USD ($)
Jun. 30, 2018
Sep. 30, 2017
Convertible note payable, net of discounts $ 590,508 $ 293,600
Convertible Notes Payable [Member]    
Convertible notes payable 678,039 598,765
Unamortized original issue discount and debt discount (87,531) (305,165)
Convertible note payable, net of discounts $ 590,508 $ 293,600
XML 39 R28.htm IDEA: XBRL DOCUMENT v3.10.0.1
Convertible Notes Payable (Details Narrative)
3 Months Ended 9 Months Ended 12 Months Ended
Jun. 30, 2018
USD ($)
$ / shares
Jun. 30, 2017
USD ($)
Jun. 30, 2018
USD ($)
Number
$ / shares
shares
Jun. 30, 2017
USD ($)
Sep. 30, 2017
USD ($)
Number
$ / shares
Sep. 30, 2016
Number
Jul. 06, 2018
USD ($)
Derivative liability $ 366,803   $ 366,803   $ 3,047,887    
Change in derivative liability 97,989 $ (700,800) 841,653 $ (814,000)      
Interest expense $ 241,398 $ 76,430 $ 861,586 156,399      
Common stock, par value | $ / shares $ 0.001   $ 0.001   $ 0.001    
Convertible promissory note [Member]              
Derivative liability $ 467,529   $ 467,529        
Interest expense     861,586 $ 156,399      
Amortization of debt discount and loan fees     511,030        
Amortization of original issue discount     22,081        
Origination interest     276,867        
Penalties and interest     448,833        
Convertible notes payable 321,516   321,516        
Unamortized loan discounts $ 181,869   $ 181,869        
Litigation settlement, amount payable             $ 219,460
Convertible promissory note [Member] | 2017 Notes [Member]              
Number of unrelated parties | Number     7   7    
Conversion description    

The Lenders have the rights, at any time and/or after 180 days at their election to convert all or part of the outstanding and unpaid principal and accrued interest into shares of our common stock

 

The Lenders have the rights, at any time and/or after 180 days at their election to convert all or part of the outstanding and unpaid principal and accrued interest into shares of our common stock.

   
Conversion price, description    

The conversion price is generally a range of between 50% and 58% of a two-day average of the lowest trading price in the 15 to 25 range of trading days prior the conversion

 

The conversion price is generally a range of between 50% and 58% of a two-day average of the lowest trading price in the 15 to 25 range of trading days prior the conversion

   
Maturity period     1 year   1 year    
Debt conversion converted instrument shares issue | shares     2,362,457,485        
Debt conversion converted amount     $ 420,394        
Common stock, par value | $ / shares $ 0.001   $ 0.001        
Convertible promissory note [Member] | 2016 Notes [Member]              
Number of unrelated parties | Number           7  
Conversion description          

The Lenders have the rights, at any time and/or after 180 days at their election to convert all or part of the outstanding and unpaid principal and accrued interest into shares of our common stock

 
Conversion price, description          

The conversion price is generally a range of between 50% and 58% of a two-day average of the lowest trading price in the 15 to 25 range of trading days prior the conversion

 
Maturity period           1 year  
Convertible promissory note [Member] | Minimum [Member] | 2017 Notes [Member]              
Convertible notes payable interest rate     8.00%   8.00%    
Convertible promissory note [Member] | Minimum [Member] | 2016 Notes [Member]              
Convertible notes payable interest rate           8.00%  
Convertible promissory note [Member] | Maximum [Member] | 2017 Notes [Member]              
Convertible notes payable interest rate     12.00%   12.00%    
Convertible promissory note [Member] | Maximum [Member] | 2016 Notes [Member]              
Convertible notes payable interest rate           12.00%  
Convertible promissory note [Member] | Derivative liability [Member]              
Risk-free interest rate     2.25%        
Expected dividend yield     0.00%        
Change in derivative liability     $ 841,653        
Convertible promissory note [Member] | Derivative liability [Member] | Minimum [Member]              
Maturity period     4 days        
Expected volatility     158.00%        
Convertible promissory note [Member] | Derivative liability [Member] | Maximum [Member]              
Maturity period     1 year 2 months 30 days        
Expected volatility     486.00%        
XML 40 R29.htm IDEA: XBRL DOCUMENT v3.10.0.1
Share Capital (Details Narrative) - USD ($)
12 Months Ended
Jul. 11, 2017
Sep. 30, 2017
Jun. 30, 2018
Common stock, par value   $ 0.001 $ 0.001
Common stock, shares authorized   10,010,000,000 10,010,000,000
Preferred Stock, Par Value     $ 0.001
Preferred Stock, Shares Authorized     10,000,000
Preferred Stock, Shares Outstanding     10,000,000
Common stock, shares outstanding   109,393,022 2,471,850,507
Outstanding and exercisable warrants, aggregate intrinsic value   $ 8,500  
Warrants Outstanding and Exercisable   167,667  
Common Stock Purchase Warrants [Member]      
Common stock for issuance of outstanding warrants 167,667    
Warranty exercisable period 5 years    
Exercise price description The warrant provides for the issuance of 167,667 shares of our $.001 par value common stock at a variable exercise price based on the market price of our stock but with a “floor price” of $.01 per share.    
Convertible Notes Payable [Member]      
Contingently Issuable Shares     2,726,409,064
XML 41 R30.htm IDEA: XBRL DOCUMENT v3.10.0.1
Income Taxes (Details) - USD ($)
9 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Income Taxes Details Abstract    
Expected income tax (benefit) at statutory rates of 34% $ 107,457 $ (2,183,000)
Change in non-deductible expenses (338,633) 2,155,800
Change in valuation allowance 231,176 27,200
Income tax expense (benefit)
XML 42 R31.htm IDEA: XBRL DOCUMENT v3.10.0.1
Income Taxes (Details Narrative)
9 Months Ended
Jun. 30, 2018
USD ($)
Income Taxes Details Narrative Abstract  
Federal net operating tax loss carry-forward $ 3,652,000
Net operating loss carryforwards, expiration year 2033
Deferred Tax Assets, Valuation Allowance $ 231,176
XML 43 R32.htm IDEA: XBRL DOCUMENT v3.10.0.1
Commitments and Contingencies (Details Narrative) - BKM Capital [Member]
9 Months Ended
Jun. 30, 2018
USD ($)
Monthly lease rate $ 7,205
Lease expire date Aug. 31, 2020
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