10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  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 September 30, 2017

[  ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 000-54219

BOLLENTE COMPANIES, INC.

(Exact name of registrant as specified in its charter)

Nevada	26-2137574
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

8800 N. Gainey Center Dr., Suite 270
Scottsdale, Arizona	85258
(Address of principal executive offices)	(Zip Code)

(480) 275-7572

(Registrant’s telephone number, including area code)

Indicate by check mark whether the issuer (1) 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 [  ]

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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X]  No [  ]

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 definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Ruble 12b-2 of the Exchange Act.

Large accelerated filer  [  ]	Accelerated filer  [  ]
Non-accelerated filer  [  ]	Smaller reporting company  [X]
(Do not check if a smaller reporting company)	Emerging company  [  ]

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

The number of shares of Common Stock, $0.001 par value, outstanding on October 25, 2017, was 26,419,846 shares.

BOLLENTE COMPANIES INC.

QUARTERLY PERIOD ENDED SEPTEMBER 30, 2017

Index to Report on Form 10-Q

PART I - FINANCIAL INFORMATION	3
Item 1. Financial Statements	3
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.	17
Item 3. Quantitative and Qualitative Disclosure About Market Risk	25
Item 4. Controls and Procedures	25
PART II - OTHER INFORMATION	27
Item 1. Legal Proceedings.	27
Item 1A. Risk Factors	27
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.	27
Item 3. Defaults Upon Senior Securities.	28
Item 4. Mine Safety Disclosures	28
Item 5. Other Information.	28
Item 6. Exhibits.	28
SIGNATURES	29

2

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

BOLLENTE COMPANIES, INC.

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

			September 30, 2017		December 31, 2016
ASSETS
Current assets
	Cash		$	128,880	$	87,134
	Accounts receivable			83,721		116,333
	Inventory			117,815		62,836
	Prepaid expenses			198,710		220,306
		Total current assets		529,126		486,609
	Fixed assets, net of accumulated depreciation			551		1,478
Other Assets
	Security deposits			1,500		1,500
	Trademarks			11,916		11,912
	Software			4,167		6,667
	Website			-		1,628
		Total other assets		17,583		21,707
Total assets			$	547,260	$	509,794
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
	Accounts payable and accrued liabilities			535,315		461,704
	Accrued interest payable - related party			2,918		1,642
	Customer deposits			600		600
	Advances			4,300		1,300
	Line of credit - related party			4,513		-
	Notes payable- related party			34,150		34,150
	Notes payable, net of debt discount			495,826		488,866
	Convertible notes payable - related party, net			588,090		-
		Total current liabilities		1,665,712		988,262
	Convertible notes payable - related party, net			150,967		148,157
		Total long-term liabilities		150,967		148,157
Total liabilities				1,816,679		1,136,419
Stockholders' equity
	Preferred stock, $0.001 par value, 10,000,000 shares authorized, 76,000 shares and 61,000 issued and outstanding as of September 30, 2017 and December 31, 2016, respectively			76		61
	Common stock, $0.001 par value, 100,000,000 shares authorized, 26,419,842 and 23,722,342 shares issued and outstanding as of September 30, 2017 and December 31, 2016, respectively			26,419		23,724
	Additional paid in capital			21,070,579		20,382,603
	Subscriptions payable			173,000		40,000
	Accumulated earnings			(22,539,493)		(21,073,013)
		Total stockholders' equity		(1,269,419)		(626,625)
Total liabilities and stockholders' equity			$	547,260	$	509,794

See accompanying notes to consolidated financial statements.

3

BOLLENTE COMPANIES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

			For the three months ended				For the nine months  ended
			September 30, 2017		September 30, 2016		September 30, 2017		September 30, 2016
Revenue			$	131,364	$	84,775	$	389,503	$	266,577
Cost of goods sold				(105,685)		(72,192)		(295,433)		(223,667)
	Gross profit			25,679		12,583		94,070		42,910
Operating expenses
	General and administrative			86,520		334,823		628,422		1,236,643
	Exectutive compensation			-		-		-		-
	Research and development			48,223		5,000		134,942		7,549
	Professional fees			172,286		219,662		445,718		1,174,396
		Total operating expenses		307,029		559,485		1,209,082		2,418,588
Other expenses
	Other (expense) income			-		(11,900)		-		286
	Interest expense			(90,557)		(244,000)		(351,468)		(276,332)
		Total expenses		(90,557)		(255,900)		(351,468)		(276,046)
Net loss			$	(371,907)	$	(802,802)	$	(1,466,480)	$	(2,651,724)
Net loss per common share - basic			$	(0.02)	$	(0.04)	$	(0.06)	$	(0.13)
Weighted average number of common shares outstanding - basic			$	24,439,233	$	21,546,371	$	25,086,788	$	20,869,582

See accompanying notes to consolidated financial statements.

4

BOLLENTE COMPANIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

			For the nine months ended
			September 30, 2017		September 30, 2016
Cash Flows from Operating Activities
	Net loss		$	(1,466,480)	$	(2,651,724)
Adjustments to reconcile net loss to net cash provided by operating activities:
	Shares issued for services			255,531		1,244,000
	Shares issued for financing					160,889
	Depreciation and amortization			5,051		20,453
	Shares issued for prepaid stock compensation			-		186,912
	Amortization of debt discount			193,950		60,624
Changes in assets and liabilities
	Accounts receivable			32,612		26,104
	Inventory			(54,979)		113,668
	Prepaid expenses			21,596		5,840
	Accounts payable			73,612		(173,049)
	Accrued interest payable - related party			1,276		12,688
		Net cash used in operating activities		(937,831)		(993,595)
Cash Flows from Investing Activities:
	Purchase of trademarks			-		(3,831)
		Net cash used in investing activities		-		(3,831)
Cash Flows from Financing Activities:
	Advances			3,000		-
	Proceeds from convertible notes payable			420,000		510,000
	Proceeds from notes payable			15,000		200,550
	Repayments from notes payable			(26,414)		(88,000)
	Proceeds from line of credit - related party			22,500		36,000
	Repayments on line of credit - related party			(17,987)		(52,000)
	Proceeds from sale of common stock, net of offering costs			609,978		355,000
	Proceeds from sale of preferred stock			37,500		-
	Repurchase of  common stock			(84,000)		-
	Proceeds from royalty payments			-		75,000
		Net cash provided by financing activities		979,577		1,036,550
Net increase in cash				41,746		39,124
Cash, beginning of period				87,134		3,618
Cash, end of period			$	128,880	$	42,742
Supplemental disclosure of cash flow information
	Cash paid for interest		$	34,861	$	34,750
	Cash paid for taxes		$	-	$	-
Non-cash investing and financing activities:
	Shares issued for prepaid stock compensation		$	-	$	140,000

See accompanying notes to consolidated financial statements.

5

BOLLENTE COMPANIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2017

(UNAUDITED)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

The Company was incorporated on March 7, 2008 under the laws of the State of Nevada, as Alcantara Brands Corporation. On October 5, 2010, the Company amended its articles of incorporation and changed its name to Bollente Companies, Inc.

Nature of operations

The Company is involved in sales, marketing, research and development of a new high quality, whole-house, electric tankless water heater that is more energy efficient than conventional products.

Basis of presentation

The accompanying unaudited interim financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission, and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s most recent Annual Financial Statements filed with the SEC on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim period presented have been reflected herein. The results of operations for the interim period are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal period, as reported in the Form 10-K, have been omitted.

Principles of consolidation

The consolidated financial statements include the accounts of Bollente Companies, Inc. and its wholly owned subsidiaries. On May 16, 2010, the Company acquired 100% of the outstanding stock of Bollente, Inc. On the date of acquisition, Bollente, Inc. was 2.78% owned and controlled 100% by Robertson J. Orr, a majority shareholder and officer and director of Bollente Companies, Inc. and the acquisition was accounted for by means of a pooling of the entities from the date of inception of Bollente Companies, Inc. on March 7, 2008 because the entities were under common control. On November 21, 2013, the Company formed a wholly owned subsidiary, Nuvola, Inc. On August 13, 2015, the Company formed a wholly owned subsidiary, Bollente International, Inc. All significant inter-company transactions and balances have been eliminated.

Use of estimates

The preparation of financial statements in conformity with 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 revenue and expenses during the reporting period. Actual results could differ significantly from those estimates.

Cash and cash equivalents

For the statements of cash flows, all highly liquid investments with an original maturity of three months or less are cash equivalents. The carrying value of these investments approximates fair value.

6

BOLLENTE COMPANIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2017

(UNAUDITED)

Website

The Company capitalizes the costs associated with the development of the Company’s website pursuant to ASC Topic 350. Other costs related to the maintenance of the website are expensed as incurred. Amortization is provided over the estimated useful lives of 3 years using the straight-line method for financial statement purposes. The Company plans to commence amortization upon completion and release of the Company’s fully operational website.

Stock-based compensation

The Company records stock based compensation in accordance with the guidance in ASC Topic 505 and 718 which requires the Company to recognize expenses related to the fair value of its employee stock option awards. This eliminates accounting for share-based compensation transactions using intrinsic value and requires instead that such transactions be accounted for using a fair-value-based method. The Company recognizes the cost of all share-based awards on a graded vesting basis over the vesting period of the award.

The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with FASB ASC 718-10 and the conclusions reached by the FASB ASC 505-50. Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earliest of a performance commitment or completion of performance by the provider of goods or services as defined by FASB ASC 505-50.

Earnings per share

The Company follows ASC Topic 260 to account for the earnings per share. Basic earnings per common share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding. During periods when common stock equivalents, if any, are anti-dilutive they are not considered in the computation.

Inventory

The cost of our inventory includes the amount we pay to our suppliers to acquire inventory, freight costs incurred in connection with the delivery of product to our distribution centers.  Net realizable value represents the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution.

Revenue recognition

The Company records revenue when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable and collectability is probable. The Company records revenue from the sale of product upon shipment or delivery of the products to the customer. The Company also records the shipping income when the products are sent to the customer.

7

BOLLENTE COMPANIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2017

(UNAUDITED)

Fair value of financial instruments

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of September 30, 2016. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include cash and accounts payable. Fair values were assumed to approximate carrying values for cash and payables because they are short term in nature and their carrying amounts approximate fair values or they are payable on demand.

Level 1: The preferred inputs to valuation efforts are “quoted prices in active markets for identical assets or liabilities,” with the caveat that the reporting entity must have access to that market. Information at this level is based on direct observations of transactions involving the same assets and liabilities, not assumptions, and thus offers superior reliability. However, relatively few items, especially physical assets, trade in active markets.

Level 2: FASB acknowledged that active markets for identical assets and liabilities are relatively uncommon and, even when they do exist, they may be too thin to provide reliable information. To deal with this shortage of direct data, the board provided a second level of inputs that can be applied in three situations.

Level 3: If inputs from levels 1 and 2 are not available, FASB acknowledges that fair value measures of many assets and liabilities are less precise. The board describes Level 3 inputs as “unobservable,” and limits their use by saying they “shall be used to measure fair value to the extent that observable inputs are not available.” This category allows “for situations in which there is little, if any, market activity for the asset or liability at the measurement date”. Earlier in the standard, FASB explains that “observable inputs” are gathered from sources other than the reporting company and that they are expected to reflect assumptions made by market participants.

Recent Accounting Pronouncements

In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net). ASU 2016-08 clarifies the implementation guidance on principal versus agent considerations and includes indicators to assist an entity in determining whether it controls a specified good or service before it is transferred to the customers. ASU 2016-08 is effective January 1, 2018 to be in alignment with the effective date of ASU 2014-09, as discussed above. Management is currently assessing its procedures for determining revenues derived from principal versus agents in connection with the impact of adopting this new accounting standard on the Company’s condensed consolidated financial statements and does not believe that the adoption of ASU 2016-08 will have a material impact on the Company’s condensed consolidated financial statements.

In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing. The amendments in this update affect the guidance in ASU 2014-09, which is not yet effective. The amendments in ASU 2016-10 clarify the following two aspects of Topic 606: identifying performance obligations and the licensing implementation guidance, while retaining the related principles for those areas. ASU 2016-10 is effective January 1, 2018 to be in alignment with the effective date of ASU 2014-09, as discussed above. Management is currently assessing the potential impact of adopting this new accounting standard on the Company’s condensed consolidated financial statements in connection with revenues recognized from licensing its vast archive of photographic images.

8

BOLLENTE COMPANIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2017

(UNAUDITED)

In May 2016, the FASB issued ASU 2016-12, Revenue from Contracts from Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients. The amendments in this update affect the guidance in ASU 2014-09, which is not yet effective. The core principle of the guidance in Topic 606 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The amendments in ASU 2016-12 do not change the core principle of the guidance in Topic 606, but instead affect only the narrow aspects noted in Topic 606. ASU 2016-12 is effective January 1, 2018 to be in alignment with the effective date of ASU 2014-09, as discussed above. Management evaluated ASU 2016-12 and does not believe the adoption of ASU 2016-12 will have a material impact on the Company’s condensed consolidated financial statements.

In January 2016, the FASB issued ASU 2016-01, Financial Instruments-Overall: Recognition and Measurement of Financial Assets and Financial Liabilities. ASU 2016-01 addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments including requirements to measure most equity investments at fair value with changes in fair value recognized in net income, to perform a qualitative assessment of equity investments without readily determinable fair values, and to separately present financial assets and liabilities by measurement category and by type of financial asset on the balance sheet or the accompanying notes to the financial statements. ASU 2016-01 will be effective for the Company beginning on January 1, 2018, and will be applied by means of a cumulative effect adjustment to the balance sheet, except for effects related to equity securities without readily determinable values, which will be applied prospectively. Management is currently evaluating the potential impact of adopting this new accounting standard on the Company’s condensed consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases, which requires an entity to recognize long-term lease arrangements as assets and liabilities on the balance sheet of the lessee. Under ASU 2016-02, a right-of-use asset and lease obligation will be recorded for all long-term leases, whether operating or financing, while the income statement will reflect lease expense for operating leases and amortization/interest expense for financing leases. The amendments also require certain new quantitative and qualitative disclosures regarding leasing arrangements. ASU 2016-02 will be effective for the Company beginning on January 1, 2019. Lessees must apply a modified retrospective transition approach for leases existing at, or entered after, the beginning of the earliest comparative period presented in the financial statements. Early adoption is permitted. Management does not believe the adoption of ASU 2016-02 will have a material impact on the Company’s condensed consolidated financial statements.

In March 2016, the FASB issued ASU 2016-05, Derivatives and Hedging: Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships, which clarifies that a change in the counterparty to a derivative instrument that has been designated as a hedging instrument would not, in and of itself, be considered a termination of the derivative instrument, provided that all other hedge accounting criteria continue to be met. ASU 2016-05 is effective for the Company beginning on January 1, 2017. Early adoption is permitted, including in an interim period. Management evaluated ASU 2016-05 and does not believe the adoption of this new accounting standard will have a material impact on the Company’s condensed consolidated financial statements.

9

BOLLENTE COMPANIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2017

(UNAUDITED)

In March 2016, the FASB issued ASU 2016-06, Derivatives and Hedging (Topic 815): Contingent Put and Call Options in Debt Instruments, which aims to reduce the diversity of practice in identifying embedded derivatives in debt instruments. ASU 2016-06 clarifies that the nature of an exercise contingency is not subject to the “clearly and closely” criteria for purposes of assessing whether the call or put option must be separated from the debt instrument and accounted for separately as a derivative. ASU 2016-06 will be effective for the Company beginning on January 1, 2017. Management evaluated ASU 2016-06 and does not believe the adoption of this this new accounting standard will have a material impact on the Company’s condensed consolidated financial statements effective January 1, 2017.

In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation: Improvements to Employee Share-Based Payment Accounting. ASU 2016-09 simplifies several aspects of the accounting and presentation of share-based payment transactions, including the accounting for related income taxes consequences and certain classifications within the statement of cash flows. ASU 2016-09 is effective for the Company beginning on January 1, 2017. Management evaluated the impact of adopting ASU 2016-09 and does not believe the new accounting standard will have a material impact on the Company’s condensed consolidated financial statements.

In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments” (“ASU 2016-15”). ASU 2016-15 will make eight targeted changes to how cash receipts and cash payments are presented and classified in the statement of cash flows. ASU 2016-15 is effective for fiscal years beginning after December 15, 2017. The new standard will require adoption on a retrospective basis unless it is impracticable to apply, in which case it would be required to apply the amendments prospectively as of the earliest date practicable. The Company is currently in the process of evaluating the impact of ASU 2016-15 on its condensed consolidated financial statements.

In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230)”, requiring that the statement of cash flows explain the change in the total cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. This guidance is effective for fiscal years, and interim reporting periods therein, beginning after December 15, 2017 with early adoption permitted. The provisions of this guidance are to be applied using a retrospective approach which requires application of the guidance for all periods presented. The Company is currently evaluating the impact of the new standard. Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the consolidated financial statements filed with this annual report.

In December 2016, the FASB issued ASU 2016-20, “Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers”. The amendments in this Update affect the guidance in Update 2014-09, which is not yet effective. The effective date and transition requirements for the amendments are the same as the effective date and transition requirements for Topic 606 (and any other Topic amended by Update 2014-09). Accounting Standards Update No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, defers the effective date of Update 2014-09 by one year.

10

BOLLENTE COMPANIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2017

(UNAUDITED)

NOTE 2 - GOING CONCERN

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the recoverability of assets and the satisfaction of liabilities in the normal course of business. As a result, the Company incurred accumulated net losses for the year ended September 30, 2017 of ($22,539,493).

The ability of the Company to continue as a going concern is dependent upon its ability to raise additional capital from the sale of common stock and, ultimately, the achievement of significant operating revenues. These 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 result from this uncertainty.

NOTE 3 - INVENTORY

Inventories consist of the following at:

	September 30, 2017		December 31, 2016
Finished goods	$	117,815	$	62,836
Total	$	117,815	$	62,836

Inventory purchases are prepaid up to 70% during the manufacturing process, with the final 30% being paid upon shipment. The Company inventory is shipped from the manufacturer to the Company via FOB shipping point and as such is included in the Company’s inventory at the point of shipment. As of September 30, 2017, and December 31, 2016, the Company had prepaid inventory of $154,828 and $178,379, respectively.

NOTE 4 - WEBSITE

Website consists of the following at:

	September 30, 2017		December 31, 2016
Website	$	58,598	$	58,598
Less: Accumulated amortization		(58,598)		(56,970)
Website, net	$	--	$	1,628

Amortization expense from continuing operations for the nine months ended September 30, 2017 and 2016 was $1,628 and $17,149, respectively.

11

BOLLENTE COMPANIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2017

(UNAUDITED)

NOTE 5 - RELATED PARTY

As of September 30, 2017, and December 31, 2016, the Company had two notes payable due to an officer and director of the Company in amount of $34,150 and $34,150, respectively. The notes have interest rate that range from 0%-8% with due dates ranging from on demand through April 2017.

As of September 30, 2017, and December 31, 2016, the Company had line of credit due to a Company controlled by an officer and director of the Company in amount of $4,513 and $0, respectively. During the quarter ended September 30, 2017 and 2016 the Company received advances $22,500 and $0 and made payments of $17,987 and $0, respectively.

NOTE 6 - NOTES PAYABLE

Notes payable net of debt discount consist of the following at:

	September 30, 2017		December 31, 2016
Note payable from a shareholder, secured, 12% interest, due May 2017	$	55,826	$	82,240
Note payable from a shareholder, secured, 12% interest, due March 2017		300,000		300,000
Note payable, to an officer, director and shareholder, secured, 5% interest, due June 2017		140,000		125,000
Total Notes Payable	$	495,826	$	507,240
Less discounts		-		(18,374)
Total Notes Payable		495,826		488,866
Less current portion		(495,826)		(488,866)
Total Notes Payable - long term	$	--	$	233,000

Interest expense including amortization of the associated debt discount for the nine months ended September 30, 2017 and 2016 was $62,876 and $36,239, respectively.

12

BOLLENTE COMPANIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2017

(UNAUDITED)

NOTE 7 - CONVERTIBLE NOTES PAYABLE

Convertible notes payable, net of debt discount consist of the following:

	September 30, 2017		December 31, 2016
Convertible note payable from a shareholder, secured, 12% interest, due May 2018, convertible at $1 per share	$	10,000	$	10,000
Convertible note payable from a shareholder, secured, 12% interest, due May 2018, convertible at $1 per share		50,000		50,000
Convertible note payable from a shareholder, secured, 12% interest, due June 2018, convertible at $1 per share		50,000		50,000
Convertible note payable from a shareholder, secured, 12% interest, due August 2018, convertible at $1 per share		50,000		50,000
Convertible note payable from an entity owned and controlled by a shareholder, secured, 12% interest, due 120 days after delivery of payment notice from lender or August 2018, convertible at $0.25 per share		615,000		350,000
Convertible note payable from a shareholder, secured, 12% interest, due May 2020, convertible at $1 per share		100,000		--
Convertible note payable from a shareholder, secured, 12% interest, due May 2020, convertible at $1 per share		50,000		--
Convertible note payable from a shareholder, secured, 12% interest, due May 2020, convertible at $1 per share		5,000		--
Convertible notes payable - Long Term	$	930,000	$	510,000
Less discount		(190,943)		(361,843)
Convertible notes payable, net	$	739,057	$	148,157
Less current portion		588,090		--
Convertible notes payable, net - Long-term	$	150,967	$	148,157

13

BOLLENTE COMPANIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2017

(UNAUDITED)

On May 2, 2017, the Company issued $100,000 of principal amount of 10% secured convertible promissory notes and 20,000 warrants to purchase common stock. The note is due on May 2, 2020 and are secured by the Company’s accounts receivable and inventory. The outstanding principal amounts and accrued but unpaid interest of the notes are convertible at any time at the option of the holder into common stock at a conversion price of $0.50 per share. The notes the were issued with warrants to purchase up to 10,000 shares of the Company’s common stock at an exercise price of $1.00 per share. The warrants are exercisable at any time. The warrants are exercisable until four (4) years after the closing date.

On May 2, 2017, the Company issued $50,000 of principal amount of 10% secured convertible promissory notes and 10,000 warrants to purchase common stock. The note is due on May 2, 2020 and are secured by the Company’s accounts receivable and inventory. The outstanding principal amounts and accrued but unpaid interest of the notes are convertible at any time at the option of the holder into common stock at a conversion price of $0.50 per share. The notes the were issued with warrants to purchase up to 10,000 shares of the Company’s common stock at an exercise price of $1.00 per share. The warrants are exercisable at any time. The warrants are exercisable until four (4) years after the closing date.

On May 22, 2017, the Company issued $5,000 of principal amount of 10% secured convertible promissory notes and 1,000 warrants to purchase common stock. The note is due on May 22, 2020 and are secured by the Company’s accounts receivable and inventory. The outstanding principal amounts and accrued but unpaid interest of the notes are convertible at any time at the option of the holder into common stock at a conversion price of $0.50 per share. The notes the were issued with warrants to purchase up to 1,000 shares of the Company’s common stock at an exercise price of $1.00 per share. The warrants are exercisable at any time. The warrants are exercisable until four (4) years after the closing date.

Interest expense including amortization of the associated debt discount for the nine months ended September 30, 2017 and 2016 was $258,223 and $62,755, respectively.

NOTE 8 - COMMITMENTS AND CONTINGENCIES

Office Lease

In January 2015, the Company executed a sublease agreement with Perigon Companies, LLC, a related party. The lease term is one year at a rate of $4,000 per month with an option to continue a month to month basis. The Company paid a refundable security deposit of $1,500.

In January 2015, the Company executed a sublease agreement with Templar Asset Group, LLC, a related party. The lease term is one year at a rate of $2,800 per month with an option to continue a month to month basis. The Company was not required to pay a security deposit.

Rent expense for the nine months ended September 30, 2017 and 2016 was $57,600 and $61,200, respectively.

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BOLLENTE COMPANIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2017

(UNAUDITED)

Executive Employment Agreements

The Company has an employment agreement with the CEO to perform duties and responsibilities as may be assigned. The base salary is in the amount of $75,000 per annum plus an annual bonus of 120,000 shares of common stock commencing on March 31, 2016 and ending February 28, 2017 with an option renewal on (March 1) thereafter.

The Company has an employment agreement with the President to perform duties and responsibilities as may be assigned. The base salary is in the amount of $125,000 per annum plus a one-time bonus of 250,000 shares of common stock commencing on October 1, 2016 and ending September 30, 2017 with an option renewal on September 15, 2017.

NOTE 9 - STOCK WARRANTS

The following is a summary of stock warrants activity during the year ended September 30, 2017 and December 31, 2016.

	Number of Shares		Weighted Average Exercise Price
Balance, December 31, 2015	--	$	--
Warrants granted and assumed	--	$	--
Warrants expired	--		--
Warrants canceled	--		--
Warrants exercised	--		--
Balance, December 31, 2016	1,237,312	$	1.00
Warrants granted and assumed	163,000	$	--
Warrants expired	--		--
Warrants canceled	--		--
Warrants exercised	--		--
Balance, September 30, 2017	1,400,312	$	1.00

As of September 30, 2017, there are warrants exercisable to purchase 1,400,312 shares of common stock in the Company.

NOTE 10 - STOCKHOLDERS’ EQUITY

The Company is authorized to issue 10,000,000 shares of it $0.001 par value preferred stock and 100,000,000 shares of its $0.001 par value common stock.

Each share of Preferred Stock is convertible, at any time, at the option of the holder, is convertible into five shares of our common stock and one warrant to purchase one share of our common stock at $1.00 per share. All Preferred Stock will be automatically converted into shares of the Company’s common stock and warrants after three years from the original issue date of the Preferred Stock.

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BOLLENTE COMPANIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2017

(UNAUDITED)

During the nine months ended September 30, 2017, the Company issued 1,760,000 shares of common stock for cash received of $485,000, of which $30,000 of the funds were received during the year ended December 31, 2016 and recorded as stock payable.

During the nine months ended September 30, 2017, the Company received $155,000 cash for the purchase of common stock. As of September 30, 2017, no shares have been issued and the amount is recorded as stock payable.

During the nine months ended September 30, 2017, the Company issued 25,000 units consisting of shares of preferred stock and one warrant for $62,500 cash. During the nine months ended September 30, 2017, the Company a shareholder converted 10,000 shares of preferred stock into 50,000 shares of the Company’s common stock and 10,000 warrants.

During the nine months ended September 30, 2017, the Company repurchased and retired 300,000 shares of common stock for $84,000.

During the nine months ended September 30, 2017, the Company issued 1,287,500 shares of common stock with a fair value of $255,530 for services.

During the nine months ended September 30, 2017, the Company was obligated to issue 40,000 shares of common stock valued at $8,000 for services. As of September 30, 2017, the shares have not been issued and have be recorded as stock payable.

NOTE 11 - SUBSEQUENT EVENTS

Subsequent to September 30, 2017, the Company received 15,000 cash for the purchase of 30,000 shares and 6,000 warrants. As of the date of the filing the shares have not been issue.

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

This Quarterly Report on Form 10-Q contains forward-looking statements. Any statements contained herein that are not historical fact may deemed to be forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The words “believes,” “anticipates,” “plans,” “expects,” “intends,” and similar expressions identify some of the forward-looking statements. Forward-looking statements are not guarantees of performance or future results and involve risks, uncertainties and assumptions. These statements include, among other things, statements regarding:

·

our ability to diversify our operations;

·

inability to raise additional financing for working capital;

·

the fact that our accounting policies and methods are fundamental to how we report our financial condition and results of operations, and they may require our management to make estimates about matters that are inherently uncertain;

·

our ability to attract key personnel;

·

our ability to operate profitably;

·

deterioration in general or regional economic conditions;

·

adverse state or federal legislation or regulation that increases the costs of compliance, or adverse findings by a regulator with respect to existing operations;

·

changes in U.S. GAAP or in the legal, regulatory and legislative environments in the markets in which we operate;

·

the inability of management to effectively implement our strategies and business plan;

·

inability to achieve future sales levels or other operating results;

·

the unavailability of funds for capital expenditures;

·

other risks and uncertainties detailed in this report;

as well as other statements regarding our future operations, financial condition and prospects, and business strategies. These forward-looking statements are subject to certain risks and uncertainties that could cause our actual results to differ materially from those reflected in the forward-looking statements.  Factors that could cause or contribute to such differences include, but are not limited to, those discussed in this Quarterly Report on Form 10-Q, and in particular, the risks discussed under the heading “Risk Factors” in Part II, Item 1A and those discussed in other documents we file with the Securities and Exchange Commission. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.

References in the following discussion and throughout this Quarterly Report to “we”, “our”, “us”, “BOLC”, “Bollente”, “the Company”, and similar terms refer to Bollente Companies Inc. unless otherwise expressly stated or the context otherwise requires.

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AVAILABLE INFORMATION

We file annual, quarterly and other reports and other information with the SEC. You can read these SEC filings and reports over the Internet at the SEC's website at www.sec.gov or on our website at www.bollentecompanies.com. You can also obtain copies of the documents at prescribed rates by writing to the Public Reference Section of the SEC at 100 F Street, NE, Washington, DC 20549 on official business days between the hours of 10:00 am and 3:00 pm. Please call the SEC at (800) SEC-0330 for further information on the operations of the public reference facilities. We will provide a copy of our annual report to security holders, including audited financial statements, at no charge upon receipt to of a written request to us at Bollente Companies, Inc., 8800 N. Gainey Dr., Suite 270, Scottsdale, Arizona 85258.

General

Bollente Companies Inc. was incorporated in the state of Nevada on March 7, 2008. The Company is headquartered in Scottsdale, Arizona and currently operates through its wholly-owned subsidiary, Bollente, Inc., a Nevada corporation incorporated on December 3, 2009.

Bollente manufactures and sells a high quality, whole-house, electric tankless water heater that is more energy efficient than conventional products.

On August 13, 2015, we formed a wholly-owned subsidiary, Bollente International, Inc. (“Bollente International”), to begin international manufacturing and sales expansion for our trutankless® line of water hearters.

Bollente International has partnered with international manufacturing firm to increase production and efficiently handle distribution to customers in the United Kingdom and throughout Europe, Asia, Dubai, Australia and New Zealand.  We have begun the testing and certification process for several international standards, demonstrating that the product complies with the essential requirements of European health, safety and environmental protection legislation and opening the gate for future sales to more than 30 European countries.

On September 1, 2016, the Company filed a Certificate of Designation (the “Certificate of Designation”) with the Secretary of State of the State of Nevada to establish the preferences, limitations and relative rights of its 6% Series A Convertible Preferred Stock, convertible, at any time, at the option of the holder, into five shares of our common stock and one warrant to purchase one share of our common stock at $1.00 per share. All Preferred Stock will be automatically converted into shares of the Company’s common stock and warrants after three years from the original issue date of the Preferred Stock. The Certificate of Designation became effective upon filing.

Products

Trutankless®

We manufacture and distribute trutankless® water heaters, a line of new, high-quality, highly efficient electric tankless water heaters. Our trutankless® water heaters are engineered to outperform and outlast both its tank and tankless predecessors in energy efficiency, output, and durability. It provides endless hot water on demand for a whole household and it also integrates with home automation systems. We have several features and design innovations which are new to the electric tankless water heater market that we believe will give our products a sustainable competitive advantage over our rivals in the market.

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Our trutankless® water heaters are available through wholesale plumbing distributors, including Ferguson, Hajoca, Hughes Supply, WinSupply locations, Morrison Supply, and several regional distributors. A partial listing of wholesalers may be found on our website (www.trutankless.com).

Our trutankless® water heaters are designed to provide an endless hot water supply because they are designed to heat water as it flows through the system. We believe that our products are capable of higher temperature rise than competitive units at given flow rates because of its improved design and greater efficiency. Our trutankless® water heaters can save energy and reduce operating costs compared to tank systems because unlike tanks, if there is no hot water demand, no energy is being used. In addition, we intend to improve life-cycle costs with an improved design conceived not only to increase efficiency, but also the longevity of our products versus competitive units. Generally, a typical tank water heater lasts about 11 years, whereas gas tankless systems may last longer, but requires more routine maintenance. Our product line is designed to last longer than tank water heaters without any routine maintenance required under most conditions.

We created a custom heat exchanger for our trutankless® product line that utilizes our patent pending Velix technology to heat water as it flows through the system, which means customers need not worry about running out of hot water. We believe we’ve selected the best materials available and a collection of exclusive design elements and features to maximize capacity, minimize energy use, and provide a truly maintenance free experience.

Our trutankless® water heaters were officially launched in the first quarter of 2014 and is sold throughout the wholesale plumbing distribution channel. We began generating revenue in the first quarter of 2014. As of the fiscal year ended December 31, 2014, we generated $238,912 in revenue. As of the fiscal year ended December 31, 2015, we generated $265,504 in revenue. As of the fiscal year ended December 31, 2016, we generated $429,582 in revenue. As of the nine months ended September 30, 2017, we generated $389,503 in revenue.

In July of 2014, we launched MYtankless.com, a customizable online control panel for our trutankless® line of smart electric water heaters. From the dashboard, residential and commercial users can obtain real-time status reports, adjust unit temperature settings, view up to three years of water usage data, and change notification settings from anywhere in the world, using a computer or web-enabled smart device at www.mytankless.com.

Additionally, service professionals can also use the dashboard to monitor system status on every unit they install, allowing them to proactively contact their customers if a service or warranty appointment is needed.

Our primary markets, Florida, Texas, Arizona, and the rest of the Sunbelt region are centers of growth in the U.S. construction industry with green building at an all-time high, and an unprecedented appliance replacement cycle. We intend to take advantage of these powerful macro-economic trends.

MYTankless.com is available as a service to consumers of trutankless® water heaters. We have applications available for download from the Google Play and Apple iOS stores, which like the online control panels, allows monitoring and control of the tankless systems.

On March 21, 2017, we announced our exclusive partnership with Mr. Rooter®.

On April 4, 2017, we announced that our trutankless line of smart electric tanless water heaters is the exclusive water heating solution for luxury communities built by the award –winning Arizona home builder Cullum Homes.

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On April 11, 2017, we announced that our trutankless line of smart water heaters has been chosen for both a retrofit project and new construction of townhomes at Friendship Village, a retirement community touted as “senior living for the at heart,” located in Tempe, Arizona.

Industry Recognition and Awards

Bollente’s trutankless® received the Best of IBS 2014 Award for Best Home Technology Product from the National Association of Home Builders (NAHB) at this year’s International Builders Show (IBS) in Las Vegas. The IBS is produced by NAHB and is the largest annual light construction show in the world - featuring more than 1,100 exhibitors and attracting 75,000 attendees including high level decision makers from some of the largest home builders in the world as well as plumbing and HVAC professionals from top outfits in major markets.

Bollente’s trutankless® received the Governor's Award of Merit for Energy and Technology Innovation for the trutankless line of electric tankless heaters at Arizona Forward's 2014 Environmental Excellence Awards.

Bollente’s trutankless® received Kitchen and Bath Business Magazine’s 2014 K*BB Product Innovator’s Award Judges Choice Product.

truCirc

truCirc is a high-tech, smart-home water circulation pump. The energy reducing, water-saving truCirc can be used as a standalone product or with our multi-award winning trutankless® electric tankless water heater. truCirc represents the next step in our mission to pioneer forward-thinking technology that changes the way people think about hot water.

A traditional water circulation pump circulates hot water through a home’s pipes, enabling homeowners to have instant, on-demand hot water as soon as they turn on the faucet and saving countless gallons of water that would have been wasted. truCirc takes the traditional pump to the next level with multiple hot water delivery strategies including a self-aware learning mode that tracks water usage in a household and predicts when hot water will be needed-- thereby using energy to keep water hot only when it’s desired. truCirc’s simple, modern, high-tech interface allows homeowners to quickly and easily change delivery modes or choose a zone or fixture to send hot water. Thermostatic shut-off valves can be installed at showerhead points of use throughout a home to further eliminate wasted water.

Our new product, truCirc, was unveiled on January 20, 2015 at the 2015 International Builders’ Show in Las Vegas and is still in the development phase. While not yet commercially available, trutankless products are expected to be compatible. Alternatively, truCirc is expected to be a stand alone product for customers who don’t utilize trutankless.

Vero

On April 16, 2015, we announced the release of Vero, our new line of electric tankless water heaters geared towards budget-driven customers. Vero boasts the same water heating performance, durability and space savings of our flagship tankless water heater. Our trutankless® water heaters are available through wholesale plumbing distributors, including Ferguson, Hajoca, Hughes Supply, WinSupply locations, Morrison Supply, and several regional distributors. A partial listing of wholesalers may be found on our website (www.trutankless.com).

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Customers and Markets

We sell our products to plumbing wholesale distributors and dealers.

Wholesalers. Approximately 96.1% of our sales in 2016, 98.3% of our sales in 2015 and 93.5% of our sales in 2014 were to wholesale distributors for commercial and residential applications. We rely on commissioned manufacturers’ representatives to market our product lines. Additionally, our products are sold to independent dealers throughout the United States.

Manufacturing and Distribution

Our principal supplier is Sinbon Electronics, a contract manufacturer and engineering company based in Taiwan with manufacturing facilities in China. Sinbon handles procurement and supply chain management. We have an engineering agreement which is ongoing and our manufacturing agreement is currently being negotiated.

Finished products are generally shipped Free on Board (FOB) Shanghai via ocean freight and are warehoused at Associated Global Systems located in Phoenix, Arizona. Merchandise is typically shipped using common carriers or freight companies are selected at the time of shipment based on order volume and the best available rates.

RESULTS OF OPERATIONS

Results of Operations for the three months ended September 30, 2017 compared with the three months ended September 30, 2016.

Revenues

In the three months ended September 30, 2017, we generated $131,364 in revenues, as compared to $84,775 in revenues in the prior year. Cost of goods sold was $105,685, as compared to $72,192 in the three months ended September 30, 2016. This increase in cost of goods sold was primarily attributable to an increase in cost of inventory.

To the knowledge of management, the Company is unaware of any trends or uncertainties in the sales or costs of our products and services for the periods discussed.

Gross Profit

Our gross profit increased $13,096, or approximately 104%, to $25,679 for the three months ended September 30, 2017 from $12,583 for the three months ended September 30, 2016. This increase in gross profit was primarily attributable to an increase in products sold.

Expenses

Operating expenses totaled $307,029 during the three months ended September 30, 2017 as compared to $559,485 in the prior year. In the three month period ended September 30, 2017, our expenses primarily consisted of General and Administrative of $86,520, Research and Development of $48,223, and Professional fees of $172,286.

General and administrative fees decreased $248,303, or approximately 74% to $86,520 for the three months ended September 30, 2017 from $334,823 for the three months ended September 30, 2016.  This decrease was primarily due to a decrease in wages and marketing.

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Research and development increased $43,223, or approximately 864% to $48,223 for the three months ended September 30, 2017 from $5,000 for the three months ended September 30, 2016.  This increase is attributed primarily to the Company spending more towards developing its technology.

Professional fees decreased $47,376, or approximately 22% to $172,286 for the three months ended September 30, 2017 from $219,662 for the three months ended September 30, 2016.  Professional fees decreased due to a decrease in consulting fee associated with business development.

Other Expenses

Interest expense decreased $153,443 to $90,557 in the three months ended September 30, 2017 from $244,000 in the three months ended September 30, 2016. The decrease was the result of a decrease in notes payable with interest accruals.

Net Loss

In the three months ended September 30, 2017, we generated a net loss of $371,907, a decrease of $430,895 from $802,802 for the three months ended September 30, 2016. This decrease was attributable to decreased consulting fees associated with business development and the Company spending less towards developing its technology.

Results of Operations for the nine months ended September 30, 2017 compared with the nine months ended September 30, 2016.

Revenues

In the nine months ended September 30, 2017, we generated $389,503 in revenues, as compared to $266,577 in revenues in the prior year. Cost of goods sold was $295,433, as compared to $223,667 in the nine months ended September 30, 2016. This increase in cost of goods sold was primarily attributable to an increase in cost of inventory.

To the knowledge of management, the Company is unaware of any trends or uncertainties in the sales or costs of our products and services for the periods discussed.

Gross Profit

Our gross profit increased $51,160, or approximately 119%, to $94,070 for the nine months ended September 30, 2017 from $42,910 for the nine months ended September 30, 2016. This increase in gross profit was primarily attributable to an increase in products sold.

Expenses

Operating expenses totaled $1,209,082 during the nine months ended September 30, 2017 as compared to $2,418,588 in the prior year. In the nine month period ended September 30, 2017, our expenses primarily consisted of General and Administrative of $628,422, Research and Development of $134,942, and Professional fees of $445,718.

General and administrative fees decreased $608,221, or approximately 49% to $628,422 for the nine months ended September 30, 2017 from $1,236,643 for the nine months ended September 30, 2016.  This decrease was primarily due to a decrease in wages and marketing.

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Research and development increased $127,393, or approximately 1688% to $134,942 for the nine months ended September 30, 2017 from $7,549 for the nine months ended September 30, 2016.  This increase is attributed primarily to the Company spending more towards developing its technology.

Professional fees decreased $728,678, or approximately 62% to $445,718 for the nine months ended September 30, 2017 from $1,174,396 for the nine months ended September 30, 2016.  Professional fees decreased due to a decrease in consulting fee associated with business development.

Other Expenses

Interest expense increased $75,136 to $351,468 in the nine months ended September 30, 2017 from $276,332 in the nine months ended September 30, 2016. The increase was the result of an increase in notes payable with interest accruals.

Net Loss

In the nine months ended September 30, 2017, we generated a net loss of $1,466,480, a decrease of $1,185,244 from $2,651,724 for the nine months ended September 30, 2016. This decrease was attributable to decreased consulting fees associated with business development and the Company spending less towards developing its technology.

Going Concern

The financial statements included in this filing have been prepared in conformity with generally accepted accounting principles that contemplate the continuance of the Company as a going concern.  The Company may not have a sufficient amount of cash required to pay all of the costs associated with operating and marketing of its products. Management intends to use borrowings and security sales to mitigate the effects of cash flow deficits; however, no assurance can be given that debt or equity financing, if and when required, will be available. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets and classification of liabilities that might be necessary should the Company be unable to continue existence.

Liquidity and Capital Resources

At September 30, 2017, we had an accumulated deficit of $22,539,493. Primarily because of our history of operating losses and our recording of note payables, we have a working capital deficiency of $1,136,586 at September 30, 2017. Losses have been funded primarily through issuance of common stock and borrowings from our stockholders and third-party debt. As of September 30, 2017, we had $128,880 in cash, $83,721 in accounts receivable, $117,815 in inventory, and $198,710 in prepaid expenses. We used net cash in operating activities of $937,831 for the three months ended September 30, 2017.

Cash Flows from Operating, Investing and Financing Activites

The following table provides detailed information about our net cash flow for all financial statement periods presented in this Quarterly Report. To date, we have financed our operations through the issuance of stock and borrowings.

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The following table sets forth a summary of our cash flows for the nine months ended September 30, 2017 and 2016:

	Nine months ended September 30,
	2017		2016
Net cash used in operating activities	$	(937,831)	$	(993,595)
Net cash used in investing activities		-		(3,831)
Net cash provided by financing activities		979,577		1,036,550
Net increase/(decrease) in Cash		41,746		39,124
Cash, beginning		87,134		3,618
Cash, ending	$	128,880	$	42,742

Operating activities - Net cash used in operating activities was $937,831 for the nine months ended September 30, 2017, as compared to $993,595 used in operating activities for the same period in 2016. The decrease in net cash used in operating activities was primarily due to a higher volume of units sold and decrease in research and development and consulting contract cost.

Investing activities - Net cash provided by financing activities for the nine months ended September 30, 2017 was $0, as compared to $3,831 for the same period of 2016. The decrease of net cash provided by financing activities was mainly attributable to the purchase of trademarks during the prior period.

Financing activities - Net cash provided by financing activities for the nine months ended September 30, 2017 was $979,577, as compared to $1,036,550 for the same period of 2016. The decrease of net cash provided by financing activities was mainly attributable to less equity financing.

Ongoing Funding Requirements

As of September 30, 2017, we continue to use traditional and/or debt financing to provide the capital we need to run the business. It is possible that we may need additional funding to enable us to fund our operating expenses and capital expenditures requirements.

Until such time, if ever, as we can generate substantial product revenues, we intend to finance our cash needs through a combination of equity offerings, debt financings, collaborations, strategic alliances and licensing arrangements. There can be no assurance that any of those sources of funding will be available when needed on acceptable terms or at all. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interests of existing stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of existing stockholders. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise funds through collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or to grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings or relationships with third parties when needed or on acceptable terms, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts; abandon our business strategy of growth through acquisitions; or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

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Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Critical Accounting Policies and Estimates

The preparation of our financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and judgments that affect our reported assets, liabilities, revenues, and expenses, and the disclosure of contingent assets and liabilities. We base our estimates and judgments on historical experience and on various other assumptions we believe to be reasonable under the circumstances. Future events, however, may differ markedly from our current expectations and assumptions. See Note 1 - Summary of Significant Accounting Policies in our Notes to Consolidated Financial Statements.

Item 3. Quantitative and Qualitative Disclosure About Market Risk

This item in not applicable as we are currently considered a smaller reporting company.

Item 4. Controls and Procedures

Evaluation of disclosure controls and procedures

As required by Rule 13a-15 under the Exchange Act, as of the end of the Company’s last fiscal quarter, the Company carried out an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures. This evaluation was carried out under the supervision and with the participation of the Company’s current management, including the Company’s Chief Executive Officer and Principal Financial Officer (Principal Financial and Accounting Officer), who concluded that the Company’s disclosure controls and procedures are effective.

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in the Company reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in Company reports filed under the Exchange Act is accumulated and communicated to management, including the Company’s Chief Executive Officer and Principal Financial Officer (Principal Financial and Accounting Officer), as appropriate, to allow timely decisions regarding required disclosure.

Changes in internal control over financial reporting

Management reviews the Company’s system of internal control over financial reporting and makes changes to the Company’s processes and systems to improve controls and increase efficiency, while ensuring that the Company maintains an effective internal control environment. Changes may include such activities as implementing new, more efficient systems, consolidating activities and migrating processes.

During the Company’s last fiscal quarter, there was no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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Limitations on Effectiveness of Controls and Procedures

In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are not presently a party to any material litigation, nor to the knowledge of management is any litigation threatened against us, which may materially affect us.

Item 1A. Risk Factors

The risk factors listed in our 2016 Form 10-K, filed with the Securities Exchange Commission on July 26, 2017, are hereby incorporated by reference.

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

During the nine months ended September 30, 2017, the Company issued 1,760,000 shares of common stock for cash received of $485,000, of which $30,000 of the funds were received during the year ended December 31, 2016 and recorded as stock payable.

During the nine months ended September 30, 2017, the Company received $155,000 cash for the purchase of common stock. As of September 30, 2017, no shares have been issued and the amount is recorded as stock payable.

During the nine months ended September 30, 2017, the Company issued 25,000 units consisting of shares of preferred stock and one warrant for $62,500 cash. During the nine months ended September 30, 2017, the Company a shareholder converted 10,000 shares of preferred stock into 50,000 shares of the Company’s common stock and 10,000 warrants.

During the nine months ended September 30, 2017, the Company repurchased and retired 300,000 shares of common stock for $84,000.

During the nine months ended September 30, 2017, the Company issued 1,287,500 shares of common stock with a fair value of $255,530 for services.

During the nine months ended September 30, 2017, the Company was obligated to issue 40,000 shares of common stock valued at $8,000 for services. As of September 30, 2017, the shares have not been issued and have be recorded as stock payable.

Subsequent to September 30, 2017, the Company received 15,000 cash for the purchase of 30,000 shares and 6,000 warrants. As of the date of the filing the shares have not been issued.

We believe that the above issuances and sale of the securities was exempt from the registration and prospectus delivery requirements of the Securities Act of 1933 by virtue of Section 4(2) and Regulation D Rule. The securities were sold directly by us and did not involve a public offering or general solicitation. The recipients of the securities were afforded an opportunity for effective access to files and records of the Registrant that contained the relevant information needed to make their investment decision, including the financial statements and 34 Act reports.

27

We reasonably believed that the recipients, immediately prior to the sale of the securities, were accredited investors and had such knowledge and experience in our financial and business matters that they were capable of evaluating the merits and risks of their investment. The management of the recipients had the opportunity to speak with our management on several occasions prior to their investment decision. There were no commissions paid on the issuance and sale of the securities.

Issuer Purchases of Equity Securities

During the quarter ended March 31, 2017, we repurchased and retired 300,000 shares of common stock for $84,000.

The Company did not repurchase any of its equity securities during the third quarter ended September 30, 2017.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information.

None.

Item 6. Exhibits.

Exhibit No.	Description
31.1*	Certification of Chief Executive Officer and Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*	Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema
101.CAL	XBRL Taxonomy Extension Calculation Linkbase
101.DEF	XBRL Taxonomy Extension Definition Linkbase
101.LAB	XBRL Taxonomy Extension Label Linkbase
101.PRE	XBRL Taxonomy Extension Presentation Linkbase

*  Filed herewith.

28

SIGNATURES

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

BOLLENTE COMPANIES INC.

(Registrant)

By: /s/ Robertson J. Orr

Robertson J. Orr, President,

Principal Financial Officer and

Principal Executive Officer

Date: October 26, 2017

29

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, Robertson J. Orr, certify that:

1.

I have reviewed this Quarterly Report on Form 10-Q of Bollente Companies Inc.;

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.

I am 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 my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me 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 my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this 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.

I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors 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.

Date: October 26, 2017

/s/ Robertson J. Orr

Robertson J. Orr

President, Principal Financial Officer and

Principal Executive Officer

EX-32.1

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 Bollente Companies Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2017, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Robertson J. Orr, President, Principal Financial Officer, and Principal Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

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.

/s/ Robertson J. Orr

Robertson J. Orr

President, Principal Financial Officer, and

Principal Executive Officer

October 26, 2017

XML

Document and Entity Information	9 Months Ended
	Sep. 30, 2017 shares
Document and Entity Information:
Entity Registrant Name	Bollente Companies Inc.
Document Type	10-Q
Document Period End Date	Sep. 30, 2017
Amendment Flag	false
Entity Central Index Key	0001429393
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding	26,419,842
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q3
Trading Symbol	bolc

XML

Consolidated Balance Sheets - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Current assets:
Cash	$ 128,880	$ 87,134
Accounts receivable	83,721	116,333
Inventory	117,815	62,836
Prepaid expenses	198,710	220,306
Total current assets	529,126	486,609
Other assets:
Fixed assets, net	551	1,478
Security deposits	1,500	1,500
Trademarks	11,916	11,912
Software	4,167	6,667
Website		1,628
Total other assets	18,134	23,185
Total assets	547,260	509,794
Current liabilities:
Accounts payable and accrued liabilities	535,315	461,704
Accrued interest payable - related party	2,918	1,642
Customer deposits	600	600
Advances	4,300	1,300
Lines of credit - related party	4,513
Notes payable - related party	34,150	34,150
Note payable, net	495,826	488,866
Convertible notes payable - current, net	588,090
Total current liabilities	1,665,712	988,262
Non-current liabilities:
Convertible notes payable, net	150,967	148,157
Total non-current liabilities	150,967	148,157
Total liabilities	1,816,679	1,136,419
Stockholders' equity (deficit)
Preferred stock value	76	61
Common stock value	26,419	23,724
Additional paid-in capital	21,070,579	20,382,603
Subscriptions payable	173,000	40,000
Accumulated deficit	(22,539,493)	(21,073,013)
Total stockholders' equity (deficit)	(1,269,419)	(626,625)
Total liabilities and stockholders' equity (deficit)	$ 547,260	$ 509,794

XML

Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2017	Dec. 31, 2016
Balance Sheet
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	76,000	61,000
Preferred stock, shares outstanding	76,000	61,000
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	26,419,842	23,722,342
Common stock, shares outstanding	26,419,842	23,722,342

XML

Consolidated Statements of Operations - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Income Statement
Revenue	$ 131,364	$ 84,775	$ 389,503	$ 266,577
Cost of sales	105,685	72,192	295,433	223,667
Gross profit	25,679	12,583	94,070	42,910
Operating expenses:
General and administrative	86,520	334,823	628,422	1,236,643
Research and development	48,223	5,000	134,942	7,549
Professional fees	172,286	219,662	445,718	1,174,396
Total operating expenses	307,029	559,485	1,209,082	2,418,588
Other income (expenses):
Other income				286
Interest expense	90,557	244,000	351,468	276,332
Other expenses		11,900
Total other income (expenses)	(90,557)	(255,900)	(351,468)	(276,046)
Net income (loss)	$ (371,907)	$ (802,802)	$ (1,466,480)	$ (2,651,724)
Net income (loss) per share - basic	$ (0.02)	$ (0.04)	$ (0.06)	$ (0.13)
Weighted average number of common shares outstanding - basic	24,439,233	21,546,371	25,086,788	20,869,582

XML

Consolidated Statements of Cash Flows - USD ($)	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Operating activities
Net income (loss)	$ (1,466,480)	$ (2,651,724)
Adjustments to reconcile net loss to net cash used by operating activities:
Shares issued for services	255,531	1,244,000
Shares issued for financing		160,889
Depreciation and amortization	5,051	20,453
Shares issued for prepaid share compensation		186,912
Amortization of debt discount	193,950	60,624
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable	32,612	26,104
(Increase) decrease in inventory	(54,979)	113,668
(Increase) decrease in prepaid expenses	21,596	5,840
Increase (decrease) in accounts payable and accrued liabilities	73,612	(173,049)
Increase (decrease) in accrued interest payable - related party	1,276	12,688
Net cash provided (used) by operating activities	(937,831)	(993,595)
Cash flows from investing activities
Purchase of trademarks		3,831
Net cash provided (used) by investing activities		(3,831)
Cash flows from financing activities
Proceeds from advances	3,000
Proceeds from convertible notes payable	420,000	510,000
Proceeds from notes payable	15,000	200,550
Repayments of notes payable	26,414	88,000
Proceeds from lines of credit - related party	22,500	36,000
Repayments of lines of credit - related party	17,987	52,000
Proceeds from sale of common stock	609,978	355,000
Proceeds from sale of preferred stock	37,500
Proceeds from royalty payments		75,000
Repurchase of common stock	84,000
Net cash provided (used) by financing activities	979,577	1,036,550
Net increase (decrease) in cash	41,746	39,124
Cash - beginning of the period	87,134	3,618
Cash - ending of the period	128,880	42,742
Supplemental disclosures
Interest paid	34,861	34,750
Taxes paid
Non-cash investing and financing activities
Shares issued for prepaid services		140,000

XML

Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2017

Notes

Summary of Significant Accounting Policies

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

The Company was incorporated on March 7, 2008 under the laws of the State of Nevada, as Alcantara Brands Corporation. On October 5, 2010, the Company amended its articles of incorporation and changed its name to Bollente Companies, Inc.

Nature of operations

The Company is involved in sales, marketing, research and development of a new high quality, whole-house, electric tankless water heater that is more energy efficient than conventional products.

Basis of presentation

The accompanying unaudited interim financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission, and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s most recent Annual Financial Statements filed with the SEC on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim period presented have been reflected herein. The results of operations for the interim period are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal period, as reported in the Form 10-K, have been omitted.

Principles of consolidation

The consolidated financial statements include the accounts of Bollente Companies, Inc. and its wholly owned subsidiaries. On May 16, 2010, the Company acquired 100% of the outstanding stock of Bollente, Inc. On the date of acquisition, Bollente, Inc. was 2.78% owned and controlled 100% by Robertson J. Orr, a majority shareholder and officer and director of Bollente Companies, Inc. and the acquisition was accounted for by means of a pooling of the entities from the date of inception of Bollente Companies, Inc. on March 7, 2008 because the entities were under common control. On November 21, 2013, the Company formed a wholly owned subsidiary, Nuvola, Inc. On August 13, 2015, the Company formed a wholly owned subsidiary, Bollente International, Inc. All significant inter-company transactions and balances have been eliminated.

Use of estimates

The preparation of financial statements in conformity with 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 revenue and expenses during the reporting period. Actual results could differ significantly from those estimates.

Cash and cash equivalents

For the statements of cash flows, all highly liquid investments with an original maturity of three months or less are cash equivalents. The carrying value of these investments approximates fair value.

Website

The Company capitalizes the costs associated with the development of the Company’s website pursuant to ASC Topic 350. Other costs related to the maintenance of the website are expensed as incurred. Amortization is provided over the estimated useful lives of 3 years using the straight-line method for financial statement purposes. The Company plans to commence amortization upon completion and release of the Company’s fully operational website.

Stock-based compensation

The Company records stock based compensation in accordance with the guidance in ASC Topic 505 and 718 which requires the Company to recognize expenses related to the fair value of its employee stock option awards. This eliminates accounting for share-based compensation transactions using intrinsic value and requires instead that such transactions be accounted for using a fair-value-based method. The Company recognizes the cost of all share-based awards on a graded vesting basis over the vesting period of the award.

The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with FASB ASC 718-10 and the conclusions reached by the FASB ASC 505-50. Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earliest of a performance commitment or completion of performance by the provider of goods or services as defined by FASB ASC 505-50.

Earnings per share

The Company follows ASC Topic 260 to account for the earnings per share. Basic earnings per common share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding. During periods when common stock equivalents, if any, are anti-dilutive they are not considered in the computation.

Inventory

The cost of our inventory includes the amount we pay to our suppliers to acquire inventory, freight costs incurred in connection with the delivery of product to our distribution centers.  Net realizable value represents the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution.

Revenue recognition

The Company records revenue when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable and collectability is probable. The Company records revenue from the sale of product upon shipment or delivery of the products to the customer. The Company also records the shipping income when the products are sent to the customer.

Fair value of financial instruments

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of September 30, 2016. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include cash and accounts payable. Fair values were assumed to approximate carrying values for cash and payables because they are short term in nature and their carrying amounts approximate fair values or they are payable on demand.

Level 1: The preferred inputs to valuation efforts are “quoted prices in active markets for identical assets or liabilities,” with the caveat that the reporting entity must have access to that market. Information at this level is based on direct observations of transactions involving the same assets and liabilities, not assumptions, and thus offers superior reliability. However, relatively few items, especially physical assets, trade in active markets.

Level 2: FASB acknowledged that active markets for identical assets and liabilities are relatively uncommon and, even when they do exist, they may be too thin to provide reliable information. To deal with this shortage of direct data, the board provided a second level of inputs that can be applied in three situations.

Level 3: If inputs from levels 1 and 2 are not available, FASB acknowledges that fair value measures of many assets and liabilities are less precise. The board describes Level 3 inputs as “unobservable,” and limits their use by saying they “shall be used to measure fair value to the extent that observable inputs are not available.” This category allows “for situations in which there is little, if any, market activity for the asset or liability at the measurement date”. Earlier in the standard, FASB explains that “observable inputs” are gathered from sources other than the reporting company and that they are expected to reflect assumptions made by market participants.

Recent Accounting Pronouncements

In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net). ASU 2016-08 clarifies the implementation guidance on principal versus agent considerations and includes indicators to assist an entity in determining whether it controls a specified good or service before it is transferred to the customers. ASU 2016-08 is effective January 1, 2018 to be in alignment with the effective date of ASU 2014-09, as discussed above. Management is currently assessing its procedures for determining revenues derived from principal versus agents in connection with the impact of adopting this new accounting standard on the Company’s condensed consolidated financial statements and does not believe that the adoption of ASU 2016-08 will have a material impact on the Company’s condensed consolidated financial statements.

In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing. The amendments in this update affect the guidance in ASU 2014-09, which is not yet effective. The amendments in ASU 2016-10 clarify the following two aspects of Topic 606: identifying performance obligations and the licensing implementation guidance, while retaining the related principles for those areas. ASU 2016-10 is effective January 1, 2018 to be in alignment with the effective date of ASU 2014-09, as discussed above. Management is currently assessing the potential impact of adopting this new accounting standard on the Company’s condensed consolidated financial statements in connection with revenues recognized from licensing its vast archive of photographic images.

In May 2016, the FASB issued ASU 2016-12, Revenue from Contracts from Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients. The amendments in this update affect the guidance in ASU 2014-09, which is not yet effective. The core principle of the guidance in Topic 606 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The amendments in ASU 2016-12 do not change the core principle of the guidance in Topic 606, but instead affect only the narrow aspects noted in Topic 606. ASU 2016-12 is effective January 1, 2018 to be in alignment with the effective date of ASU 2014-09, as discussed above. Management evaluated ASU 2016-12 and does not believe the adoption of ASU 2016-12 will have a material impact on the Company’s condensed consolidated financial statements.

In January 2016, the FASB issued ASU 2016-01, Financial Instruments-Overall: Recognition and Measurement of Financial Assets and Financial Liabilities. ASU 2016-01 addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments including requirements to measure most equity investments at fair value with changes in fair value recognized in net income, to perform a qualitative assessment of equity investments without readily determinable fair values, and to separately present financial assets and liabilities by measurement category and by type of financial asset on the balance sheet or the accompanying notes to the financial statements. ASU 2016-01 will be effective for the Company beginning on January 1, 2018, and will be applied by means of a cumulative effect adjustment to the balance sheet, except for effects related to equity securities without readily determinable values, which will be applied prospectively. Management is currently evaluating the potential impact of adopting this new accounting standard on the Company’s condensed consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases, which requires an entity to recognize long-term lease arrangements as assets and liabilities on the balance sheet of the lessee. Under ASU 2016-02, a right-of-use asset and lease obligation will be recorded for all long-term leases, whether operating or financing, while the income statement will reflect lease expense for operating leases and amortization/interest expense for financing leases. The amendments also require certain new quantitative and qualitative disclosures regarding leasing arrangements. ASU 2016-02 will be effective for the Company beginning on January 1, 2019. Lessees must apply a modified retrospective transition approach for leases existing at, or entered after, the beginning of the earliest comparative period presented in the financial statements. Early adoption is permitted. Management does not believe the adoption of ASU 2016-02 will have a material impact on the Company’s condensed consolidated financial statements.

In March 2016, the FASB issued ASU 2016-05, Derivatives and Hedging: Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships, which clarifies that a change in the counterparty to a derivative instrument that has been designated as a hedging instrument would not, in and of itself, be considered a termination of the derivative instrument, provided that all other hedge accounting criteria continue to be met. ASU 2016-05 is effective for the Company beginning on January 1, 2017. Early adoption is permitted, including in an interim period. Management evaluated ASU 2016-05 and does not believe the adoption of this new accounting standard will have a material impact on the Company’s condensed consolidated financial statements.

In March 2016, the FASB issued ASU 2016-06, Derivatives and Hedging (Topic 815): Contingent Put and Call Options in Debt Instruments, which aims to reduce the diversity of practice in identifying embedded derivatives in debt instruments. ASU 2016-06 clarifies that the nature of an exercise contingency is not subject to the “clearly and closely” criteria for purposes of assessing whether the call or put option must be separated from the debt instrument and accounted for separately as a derivative. ASU 2016-06 will be effective for the Company beginning on January 1, 2017. Management evaluated ASU 2016-06 and does not believe the adoption of this this new accounting standard will have a material impact on the Company’s condensed consolidated financial statements effective January 1, 2017.

In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation: Improvements to Employee Share-Based Payment Accounting. ASU 2016-09 simplifies several aspects of the accounting and presentation of share-based payment transactions, including the accounting for related income taxes consequences and certain classifications within the statement of cash flows. ASU 2016-09 is effective for the Company beginning on January 1, 2017. Management evaluated the impact of adopting ASU 2016-09 and does not believe the new accounting standard will have a material impact on the Company’s condensed consolidated financial statements.

In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments” (“ASU 2016-15”). ASU 2016-15 will make eight targeted changes to how cash receipts and cash payments are presented and classified in the statement of cash flows. ASU 2016-15 is effective for fiscal years beginning after December 15, 2017. The new standard will require adoption on a retrospective basis unless it is impracticable to apply, in which case it would be required to apply the amendments prospectively as of the earliest date practicable. The Company is currently in the process of evaluating the impact of ASU 2016-15 on its condensed consolidated financial statements.

In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230)”, requiring that the statement of cash flows explain the change in the total cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. This guidance is effective for fiscal years, and interim reporting periods therein, beginning after December 15, 2017 with early adoption permitted. The provisions of this guidance are to be applied using a retrospective approach which requires application of the guidance for all periods presented. The Company is currently evaluating the impact of the new standard. Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the consolidated financial statements filed with this annual report.

In December 2016, the FASB issued ASU 2016-20, “Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers”. The amendments in this Update affect the guidance in Update 2014-09, which is not yet effective. The effective date and transition requirements for the amendments are the same as the effective date and transition requirements for Topic 606 (and any other Topic amended by Update 2014-09). Accounting Standards Update No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, defers the effective date of Update 2014-09 by one year.

XML

Going Concern Disclosure

9 Months Ended

Sep. 30, 2017

Notes

Going Concern Disclosure

NOTE 2 - GOING CONCERN

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the recoverability of assets and the satisfaction of liabilities in the normal course of business. As a result, the Company incurred accumulated net losses for the year ended September 30, 2017 of ($22,539,493).

The ability of the Company to continue as a going concern is dependent upon its ability to raise additional capital from the sale of common stock and, ultimately, the achievement of significant operating revenues. These 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 result from this uncertainty.

XML

Inventory, Disclosure

9 Months Ended

Sep. 30, 2017

Notes

Inventory, Disclosure

NOTE 3 - INVENTORY

Inventories consist of the following at:

	September 30, 2017		December 31, 2016
Finished goods	$	117,815	$	62,836
Total	$	117,815	$	62,836

Inventory purchases are prepaid up to 70% during the manufacturing process, with the final 30% being paid upon shipment. The Company inventory is shipped from the manufacturer to the Company via FOB shipping point and as such is included in the Company’s inventory at the point of shipment. As of September 30, 2017, and December 31, 2016, the Company had prepaid inventory of $154,828 and $178,379, respectively.

XML

Website, Disclosure

9 Months Ended

Sep. 30, 2017

Notes

Website, Disclosure

NOTE 4 - WEBSITE

Website consists of the following at:

	September 30, 2017		December 31, 2016
Website	$	58,598	$	58,598
Less: Accumulated amortization		(58,598)		(56,970)
Website, net	$	--	$	1,628

Amortization expense from continuing operations for the nine months ended September 30, 2017 and 2016 was $1,628 and $17,149, respectively.

XML

Related Party Disclosure

9 Months Ended

Sep. 30, 2017

Notes

Related Party Disclosure

NOTE 5 - RELATED PARTY

As of September 30, 2017, and December 31, 2016, the Company had two notes payable due to an officer and director of the Company in amount of $34,150 and $34,150, respectively. The notes have interest rate that range from 0%-8% with due dates ranging from on demand through April 2017.

As of September 30, 2017, and December 31, 2016, the Company had line of credit due to a Company controlled by an officer and director of the Company in amount of $4,513 and $0, respectively. During the quarter ended September 30, 2017 and 2016 the Company received advances $22,500 and $0 and made payments of $17,987 and $0, respectively.

XML

Notes Payable, Disclosure

9 Months Ended

Sep. 30, 2017

Notes

Notes Payable, Disclosure

NOTE 6 - NOTES PAYABLE

Notes payable net of debt discount consist of the following at:

	September 30, 2017		December 31, 2016
Note payable from a shareholder, secured, 12% interest, due May 2017	$	55,826	$	82,240
Note payable from a shareholder, secured, 12% interest, due March 2017		300,000		300,000
Note payable, to an officer, director and shareholder, secured, 5% interest, due June 2017		140,000		125,000
Total Notes Payable	$	495,826	$	507,240
Less discounts		-		(18,374)
Total Notes Payable		495,826		488,866
Less current portion		(495,826)		(488,866)
Total Notes Payable - long term	$	--	$	233,000

Interest expense including amortization of the associated debt discount for the nine months ended September 30, 2017 and 2016 was $62,876 and $36,239, respectively.

XML

Convertible Notes Payable, Disclosure

9 Months Ended

Sep. 30, 2017

Notes

Convertible Notes Payable, Disclosure

NOTE 7 - CONVERTIBLE NOTES PAYABLE

Convertible notes payable, net of debt discount consist of the following:

	September 30, 2017		December 31, 2016
Convertible note payable from a shareholder, secured, 12% interest, due May 2018, convertible at $1 per share	$	10,000	$	10,000
Convertible note payable from a shareholder, secured, 12% interest, due May 2018, convertible at $1 per share		50,000		50,000
Convertible note payable from a shareholder, secured, 12% interest, due June 2018, convertible at $1 per share		50,000		50,000
Convertible note payable from a shareholder, secured, 12% interest, due August 2018, convertible at $1 per share		50,000		50,000
Convertible note payable from an entity owned and controlled by a shareholder, secured, 12% interest, due 120 days after delivery of payment notice from lender or August 2018, convertible at $0.25 per share		615,000		350,000
Convertible note payable from a shareholder, secured, 12% interest, due May 2020, convertible at $1 per share		100,000		--
Convertible note payable from a shareholder, secured, 12% interest, due May 2020, convertible at $1 per share		50,000		--
Convertible note payable from a shareholder, secured, 12% interest, due May 2020, convertible at $1 per share		5,000		--
Convertible notes payable - Long Term	$	930,000	$	510,000
Less discount		(190,943)		(361,843)
Convertible notes payable, net	$	739,057	$	148,157
Less current portion		588,090		--
Convertible notes payable, net - Long-term	$	150,967	$	148,157

On May 2, 2017, the Company issued $100,000 of principal amount of 10% secured convertible promissory notes and 20,000 warrants to purchase common stock. The note is due on May 2, 2020 and are secured by the Company’s accounts receivable and inventory. The outstanding principal amounts and accrued but unpaid interest of the notes are convertible at any time at the option of the holder into common stock at a conversion price of $0.50 per share. The notes the were issued with warrants to purchase up to 10,000 shares of the Company’s common stock at an exercise price of $1.00 per share. The warrants are exercisable at any time. The warrants are exercisable until four (4) years after the closing date.

On May 2, 2017, the Company issued $50,000 of principal amount of 10% secured convertible promissory notes and 10,000 warrants to purchase common stock. The note is due on May 2, 2020 and are secured by the Company’s accounts receivable and inventory. The outstanding principal amounts and accrued but unpaid interest of the notes are convertible at any time at the option of the holder into common stock at a conversion price of $0.50 per share. The notes the were issued with warrants to purchase up to 10,000 shares of the Company’s common stock at an exercise price of $1.00 per share. The warrants are exercisable at any time. The warrants are exercisable until four (4) years after the closing date.

On May 22, 2017, the Company issued $5,000 of principal amount of 10% secured convertible promissory notes and 1,000 warrants to purchase common stock. The note is due on May 22, 2020 and are secured by the Company’s accounts receivable and inventory. The outstanding principal amounts and accrued but unpaid interest of the notes are convertible at any time at the option of the holder into common stock at a conversion price of $0.50 per share. The notes the were issued with warrants to purchase up to 1,000 shares of the Company’s common stock at an exercise price of $1.00 per share. The warrants are exercisable at any time. The warrants are exercisable until four (4) years after the closing date.

Interest expense including amortization of the associated debt discount for the nine months ended September 30, 2017 and 2016 was $258,223 and $62,755, respectively.

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2017

Notes

Commitments and Contingencies

NOTE 8 - COMMITMENTS AND CONTINGENCIES

Office Lease

In January 2015, the Company executed a sublease agreement with Perigon Companies, LLC, a related party.  The lease term is one year at a rate of $4,000 per month with an option to continue a month to month basis.  The Company paid a refundable security deposit of $1,500.

In January 2015, the Company executed a sublease agreement with Templar Asset Group, LLC, a related party.  The lease term is one year at a rate of $2,800 per month with an option to continue a month to month basis.  The Company was not required to pay a security deposit.

Rent expense for the nine months ended September 30, 2017 and 2016 was $57,600 and $61,200, respectively.

Executive Employment Agreements

The Company has an employment agreement with the CEO to perform duties and responsibilities as may be assigned. The base salary is in the amount of $75,000 per annum plus an annual bonus of 120,000 shares of common stock commencing on March 31, 2016 and ending February 28, 2017 with an option renewal on (March 1) thereafter.

The Company has an employment agreement with the President to perform duties and responsibilities as may be assigned. The base salary is in the amount of $125,000 per annum plus a one-time bonus of 250,000 shares of common stock commencing on October 1, 2016 and ending September 30, 2017 with an option renewal on September 15, 2017.

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Stock Warrants, Disclosure

9 Months Ended

Sep. 30, 2017

Notes

Stock Warrants, Disclosure

NOTE 9 - STOCK WARRANTS

The following is a summary of stock warrants activity during the year ended September 30, 2017 and December 31, 2016.

	Number of Shares		Weighted Average Exercise Price
Balance, December 31, 2015	--	$	--
Warrants granted and assumed	--	$	--
Warrants expired	--		--
Warrants canceled	--		--
Warrants exercised	--		--
Balance, December 31, 2016	1,237,312	$	1.00
Warrants granted and assumed	163,000	$	--
Warrants expired	--		--
Warrants canceled	--		--
Warrants exercised	--		--
Balance, September 30, 2017	1,400,312	$	1.00

As of September 30, 2017, there are warrants exercisable to purchase 1,400,312 shares of common stock in the Company.

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Stockholders' Equity Disclosure

9 Months Ended

Sep. 30, 2017

Notes

Stockholders' Equity Disclosure

NOTE 10 - STOCKHOLDERS’ EQUITY

The Company is authorized to issue 10,000,000 shares of it $0.001 par value preferred stock and 100,000,000 shares of its $0.001 par value common stock.

Each share of Preferred Stock is convertible, at any time, at the option of the holder, is convertible into five shares of our common stock and one warrant to purchase one share of our common stock at $1.00 per share. All Preferred Stock will be automatically converted into shares of the Company’s common stock and warrants after three years from the original issue date of the Preferred Stock.

During the nine months ended September 30, 2017, the Company issued 1,760,000 shares of common stock for cash received of $485,000, of which $30,000 of the funds were received during the year ended December 31, 2016 and recorded as stock payable.

During the nine months ended September 30, 2017, the Company received $155,000 cash for the purchase of common stock. As of September 30, 2017, no shares have been issued and the amount is recorded as stock payable.

During the nine months ended September 30, 2017, the Company issued 25,000 units consisting of shares of preferred stock and one warrant for $62,500 cash. During the nine months ended September 30, 2017, the Company a shareholder converted 10,000 shares of preferred stock into 50,000 shares of the Company’s common stock and 10,000 warrants.

During the nine months ended September 30, 2017, the Company repurchased and retired 300,000 shares of common stock for $84,000.

During the nine months ended September 30, 2017, the Company issued 1,287,500 shares of common stock with a fair value of $255,530 for services.

During the nine months ended September 30, 2017, the Company was obligated to issue 40,000 shares of common stock valued at $8,000 for services. As of September 30, 2017, the shares have not been issued and have be recorded as stock payable.

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Subsequent Events

9 Months Ended

Sep. 30, 2017

Notes

Subsequent Events

NOTE 11 - SUBSEQUENT EVENTS

Subsequent to September 30, 2017, the Company received 15,000 cash for the purchase of 30,000 shares and 6,000 warrants. As of the date of the filing the shares have not been issue.

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Summary of Significant Accounting Policies: Basis of Presentation, Policy (Policies)

9 Months Ended

Sep. 30, 2017

Policies

Basis of Presentation, Policy

Basis of presentation

The accompanying unaudited interim financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission, and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s most recent Annual Financial Statements filed with the SEC on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim period presented have been reflected herein. The results of operations for the interim period are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal period, as reported in the Form 10-K, have been omitted.

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Summary of Significant Accounting Policies: Principles of Consolidation (Policies)

9 Months Ended

Sep. 30, 2017

Policies

Principles of Consolidation

Principles of consolidation

The consolidated financial statements include the accounts of Bollente Companies, Inc. and its wholly owned subsidiaries. On May 16, 2010, the Company acquired 100% of the outstanding stock of Bollente, Inc. On the date of acquisition, Bollente, Inc. was 2.78% owned and controlled 100% by Robertson J. Orr, a majority shareholder and officer and director of Bollente Companies, Inc. and the acquisition was accounted for by means of a pooling of the entities from the date of inception of Bollente Companies, Inc. on March 7, 2008 because the entities were under common control. On November 21, 2013, the Company formed a wholly owned subsidiary, Nuvola, Inc. On August 13, 2015, the Company formed a wholly owned subsidiary, Bollente International, Inc. All significant inter-company transactions and balances have been eliminated.

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Summary of Significant Accounting Policies: Use of Estimates (Policies)

9 Months Ended

Sep. 30, 2017

Policies

Use of Estimates

Use of estimates

The preparation of financial statements in conformity with 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 revenue and expenses during the reporting period. Actual results could differ significantly from those estimates.

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Summary of Significant Accounting Policies: Cash and Cash Equivalents Policy (Policies)

9 Months Ended

Sep. 30, 2017

Policies

Cash and Cash Equivalents Policy

Cash and cash equivalents

For the statements of cash flows, all highly liquid investments with an original maturity of three months or less are cash equivalents. The carrying value of these investments approximates fair value.

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Summary of Significant Accounting Policies: Website Policy (Policies)

9 Months Ended

Sep. 30, 2017

Policies

Website Policy

Website

The Company capitalizes the costs associated with the development of the Company’s website pursuant to ASC Topic 350. Other costs related to the maintenance of the website are expensed as incurred. Amortization is provided over the estimated useful lives of 3 years using the straight-line method for financial statement purposes. The Company plans to commence amortization upon completion and release of the Company’s fully operational website.

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Summary of Significant Accounting Policies: Stock-based Compensation Policy (Policies)

9 Months Ended

Sep. 30, 2017

Policies

Stock-based Compensation Policy

Stock-based compensation

The Company records stock based compensation in accordance with the guidance in ASC Topic 505 and 718 which requires the Company to recognize expenses related to the fair value of its employee stock option awards. This eliminates accounting for share-based compensation transactions using intrinsic value and requires instead that such transactions be accounted for using a fair-value-based method. The Company recognizes the cost of all share-based awards on a graded vesting basis over the vesting period of the award.

The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with FASB ASC 718-10 and the conclusions reached by the FASB ASC 505-50. Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earliest of a performance commitment or completion of performance by the provider of goods or services as defined by FASB ASC 505-50.

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Summary of Significant Accounting Policies: Earnings Per Share Policy (Policies)

9 Months Ended

Sep. 30, 2017

Policies

Earnings Per Share Policy

Earnings per share

The Company follows ASC Topic 260 to account for the earnings per share. Basic earnings per common share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding. During periods when common stock equivalents, if any, are anti-dilutive they are not considered in the computation.

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Summary of Significant Accounting Policies: Inventory Policy (Policies)

9 Months Ended

Sep. 30, 2017

Policies

Inventory Policy

Inventory

The cost of our inventory includes the amount we pay to our suppliers to acquire inventory, freight costs incurred in connection with the delivery of product to our distribution centers.  Net realizable value represents the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution.

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Summary of Significant Accounting Policies: Revenue Recognition Policy (Policies)

9 Months Ended

Sep. 30, 2017

Policies

Revenue Recognition Policy

Revenue recognition

The Company records revenue when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable and collectability is probable. The Company records revenue from the sale of product upon shipment or delivery of the products to the customer. The Company also records the shipping income when the products are sent to the customer.

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Summary of Significant Accounting Policies: Fair Value of Financial Instruments Policy (Policies)

9 Months Ended

Sep. 30, 2017

Policies

Fair Value of Financial Instruments Policy

Fair value of financial instruments

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of September 30, 2016. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include cash and accounts payable. Fair values were assumed to approximate carrying values for cash and payables because they are short term in nature and their carrying amounts approximate fair values or they are payable on demand.

Level 1: The preferred inputs to valuation efforts are “quoted prices in active markets for identical assets or liabilities,” with the caveat that the reporting entity must have access to that market. Information at this level is based on direct observations of transactions involving the same assets and liabilities, not assumptions, and thus offers superior reliability. However, relatively few items, especially physical assets, trade in active markets.

Level 2: FASB acknowledged that active markets for identical assets and liabilities are relatively uncommon and, even when they do exist, they may be too thin to provide reliable information. To deal with this shortage of direct data, the board provided a second level of inputs that can be applied in three situations.

Level 3: If inputs from levels 1 and 2 are not available, FASB acknowledges that fair value measures of many assets and liabilities are less precise. The board describes Level 3 inputs as “unobservable,” and limits their use by saying they “shall be used to measure fair value to the extent that observable inputs are not available.” This category allows “for situations in which there is little, if any, market activity for the asset or liability at the measurement date”. Earlier in the standard, FASB explains that “observable inputs” are gathered from sources other than the reporting company and that they are expected to reflect assumptions made by market participants.

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Summary of Significant Accounting Policies: Recent Accounting Pronouncements (Policies)

9 Months Ended

Sep. 30, 2017

Policies

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net). ASU 2016-08 clarifies the implementation guidance on principal versus agent considerations and includes indicators to assist an entity in determining whether it controls a specified good or service before it is transferred to the customers. ASU 2016-08 is effective January 1, 2018 to be in alignment with the effective date of ASU 2014-09, as discussed above. Management is currently assessing its procedures for determining revenues derived from principal versus agents in connection with the impact of adopting this new accounting standard on the Company’s condensed consolidated financial statements and does not believe that the adoption of ASU 2016-08 will have a material impact on the Company’s condensed consolidated financial statements.

In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing. The amendments in this update affect the guidance in ASU 2014-09, which is not yet effective. The amendments in ASU 2016-10 clarify the following two aspects of Topic 606: identifying performance obligations and the licensing implementation guidance, while retaining the related principles for those areas. ASU 2016-10 is effective January 1, 2018 to be in alignment with the effective date of ASU 2014-09, as discussed above. Management is currently assessing the potential impact of adopting this new accounting standard on the Company’s condensed consolidated financial statements in connection with revenues recognized from licensing its vast archive of photographic images.

In May 2016, the FASB issued ASU 2016-12, Revenue from Contracts from Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients. The amendments in this update affect the guidance in ASU 2014-09, which is not yet effective. The core principle of the guidance in Topic 606 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The amendments in ASU 2016-12 do not change the core principle of the guidance in Topic 606, but instead affect only the narrow aspects noted in Topic 606. ASU 2016-12 is effective January 1, 2018 to be in alignment with the effective date of ASU 2014-09, as discussed above. Management evaluated ASU 2016-12 and does not believe the adoption of ASU 2016-12 will have a material impact on the Company’s condensed consolidated financial statements.

In January 2016, the FASB issued ASU 2016-01, Financial Instruments-Overall: Recognition and Measurement of Financial Assets and Financial Liabilities. ASU 2016-01 addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments including requirements to measure most equity investments at fair value with changes in fair value recognized in net income, to perform a qualitative assessment of equity investments without readily determinable fair values, and to separately present financial assets and liabilities by measurement category and by type of financial asset on the balance sheet or the accompanying notes to the financial statements. ASU 2016-01 will be effective for the Company beginning on January 1, 2018, and will be applied by means of a cumulative effect adjustment to the balance sheet, except for effects related to equity securities without readily determinable values, which will be applied prospectively. Management is currently evaluating the potential impact of adopting this new accounting standard on the Company’s condensed consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases, which requires an entity to recognize long-term lease arrangements as assets and liabilities on the balance sheet of the lessee. Under ASU 2016-02, a right-of-use asset and lease obligation will be recorded for all long-term leases, whether operating or financing, while the income statement will reflect lease expense for operating leases and amortization/interest expense for financing leases. The amendments also require certain new quantitative and qualitative disclosures regarding leasing arrangements. ASU 2016-02 will be effective for the Company beginning on January 1, 2019. Lessees must apply a modified retrospective transition approach for leases existing at, or entered after, the beginning of the earliest comparative period presented in the financial statements. Early adoption is permitted. Management does not believe the adoption of ASU 2016-02 will have a material impact on the Company’s condensed consolidated financial statements.

In March 2016, the FASB issued ASU 2016-05, Derivatives and Hedging: Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships, which clarifies that a change in the counterparty to a derivative instrument that has been designated as a hedging instrument would not, in and of itself, be considered a termination of the derivative instrument, provided that all other hedge accounting criteria continue to be met. ASU 2016-05 is effective for the Company beginning on January 1, 2017. Early adoption is permitted, including in an interim period. Management evaluated ASU 2016-05 and does not believe the adoption of this new accounting standard will have a material impact on the Company’s condensed consolidated financial statements.

In March 2016, the FASB issued ASU 2016-06, Derivatives and Hedging (Topic 815): Contingent Put and Call Options in Debt Instruments, which aims to reduce the diversity of practice in identifying embedded derivatives in debt instruments. ASU 2016-06 clarifies that the nature of an exercise contingency is not subject to the “clearly and closely” criteria for purposes of assessing whether the call or put option must be separated from the debt instrument and accounted for separately as a derivative. ASU 2016-06 will be effective for the Company beginning on January 1, 2017. Management evaluated ASU 2016-06 and does not believe the adoption of this this new accounting standard will have a material impact on the Company’s condensed consolidated financial statements effective January 1, 2017.

In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation: Improvements to Employee Share-Based Payment Accounting. ASU 2016-09 simplifies several aspects of the accounting and presentation of share-based payment transactions, including the accounting for related income taxes consequences and certain classifications within the statement of cash flows. ASU 2016-09 is effective for the Company beginning on January 1, 2017. Management evaluated the impact of adopting ASU 2016-09 and does not believe the new accounting standard will have a material impact on the Company’s condensed consolidated financial statements.

In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments” (“ASU 2016-15”). ASU 2016-15 will make eight targeted changes to how cash receipts and cash payments are presented and classified in the statement of cash flows. ASU 2016-15 is effective for fiscal years beginning after December 15, 2017. The new standard will require adoption on a retrospective basis unless it is impracticable to apply, in which case it would be required to apply the amendments prospectively as of the earliest date practicable. The Company is currently in the process of evaluating the impact of ASU 2016-15 on its condensed consolidated financial statements.

In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230)”, requiring that the statement of cash flows explain the change in the total cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. This guidance is effective for fiscal years, and interim reporting periods therein, beginning after December 15, 2017 with early adoption permitted. The provisions of this guidance are to be applied using a retrospective approach which requires application of the guidance for all periods presented. The Company is currently evaluating the impact of the new standard. Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the consolidated financial statements filed with this annual report.

In December 2016, the FASB issued ASU 2016-20, “Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers”. The amendments in this Update affect the guidance in Update 2014-09, which is not yet effective. The effective date and transition requirements for the amendments are the same as the effective date and transition requirements for Topic 606 (and any other Topic amended by Update 2014-09). Accounting Standards Update No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, defers the effective date of Update 2014-09 by one year.

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Inventory, Disclosure: Schedule of Inventory (Tables)

9 Months Ended

Sep. 30, 2017

Tables/Schedules

Schedule of Inventory

	September 30, 2017		December 31, 2016
Finished goods	$	117,815	$	62,836
Total	$	117,815	$	62,836

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Website, Disclosure: Schedule of Website Assets (Tables)

9 Months Ended

Sep. 30, 2017

Tables/Schedules

Schedule of Website Assets

	September 30, 2017		December 31, 2016
Website	$	58,598	$	58,598
Less: Accumulated amortization		(58,598)		(56,970)
Website, net	$	--	$	1,628

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Notes Payable, Disclosure: Schedule of Notes Payable (Tables)

9 Months Ended

Sep. 30, 2017

Tables/Schedules

Schedule of Notes Payable

	September 30, 2017		December 31, 2016
Note payable from a shareholder, secured, 12% interest, due May 2017	$	55,826	$	82,240
Note payable from a shareholder, secured, 12% interest, due March 2017		300,000		300,000
Note payable, to an officer, director and shareholder, secured, 5% interest, due June 2017		140,000		125,000
Total Notes Payable	$	495,826	$	507,240
Less discounts		-		(18,374)
Total Notes Payable		495,826		488,866
Less current portion		(495,826)		(488,866)
Total Notes Payable - long term	$	--	$	233,000

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Convertible Notes Payable, Disclosure: Schedule of Convertible Notes Payable (Tables)

9 Months Ended

Sep. 30, 2017

Tables/Schedules

Schedule of Convertible Notes Payable

	September 30, 2017		December 31, 2016
Convertible note payable from a shareholder, secured, 12% interest, due May 2018, convertible at $1 per share	$	10,000	$	10,000
Convertible note payable from a shareholder, secured, 12% interest, due May 2018, convertible at $1 per share		50,000		50,000
Convertible note payable from a shareholder, secured, 12% interest, due June 2018, convertible at $1 per share		50,000		50,000
Convertible note payable from a shareholder, secured, 12% interest, due August 2018, convertible at $1 per share		50,000		50,000
Convertible note payable from an entity owned and controlled by a shareholder, secured, 12% interest, due 120 days after delivery of payment notice from lender or August 2018, convertible at $0.25 per share		615,000		350,000
Convertible note payable from a shareholder, secured, 12% interest, due May 2020, convertible at $1 per share		100,000		--
Convertible note payable from a shareholder, secured, 12% interest, due May 2020, convertible at $1 per share		50,000		--
Convertible note payable from a shareholder, secured, 12% interest, due May 2020, convertible at $1 per share		5,000		--
Convertible notes payable - Long Term	$	930,000	$	510,000
Less discount		(190,943)		(361,843)
Convertible notes payable, net	$	739,057	$	148,157
Less current portion		588,090		--
Convertible notes payable, net - Long-term	$	150,967	$	148,157

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Stock Warrants, Disclosure: Schedule of Warrants Activity (Tables)

9 Months Ended

Sep. 30, 2017

Tables/Schedules

Schedule of Warrants Activity

	Number of Shares		Weighted Average Exercise Price
Balance, December 31, 2015	--	$	--
Warrants granted and assumed	--	$	--
Warrants expired	--		--
Warrants canceled	--		--
Warrants exercised	--		--
Balance, December 31, 2016	1,237,312	$	1.00
Warrants granted and assumed	163,000	$	--
Warrants expired	--		--
Warrants canceled	--		--
Warrants exercised	--		--
Balance, September 30, 2017	1,400,312	$	1.00

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Summary of Significant Accounting Policies: Principles of Consolidation (Details)	May 16, 2010
Details
Acquisition of outstanding stock of Bellente, Inc., acquired percent of stock	100.00%

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Summary of Significant Accounting Policies: Website Policy (Details)	9 Months Ended
	Sep. 30, 2017
Details
Estimated useful lives of Website using the straight-line method	3 years

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Going Concern Disclosure (Details) - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Details
Accumulated deficit	$ 22,539,493	$ 21,073,013

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Inventory, Disclosure: Schedule of Inventory (Details) - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Inventory	$ 117,815	$ 62,836
Finished goods
Inventory	$ 117,815	$ 62,836

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Inventory, Disclosure (Details) - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Prepaid expenses	$ 198,710	$ 220,306
Prepaid inventory
Prepaid expenses	$ 154,828	$ 178,379

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Website, Disclosure: Schedule of Website Assets (Details) - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Details
Website, gross	$ 58,598	$ 58,598
(Less) accumulated amortization of website	$ (58,598)	(56,970)
Website, net		$ 1,628

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Website, Disclosure (Details) - USD ($)	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Details
Amortization of website costs and software	$ 1,628	$ 17,149

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Related Party Disclosure (Details) - USD ($)	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2016
Notes payable - related party	$ 34,150		$ 34,150
Lines of credit - related party	4,513
Proceeds from lines of credit - related party	22,500	$ 36,000
Repayments of lines of credit - related party	17,987	$ 52,000
Two notes payable due to an officer and director
Notes payable - related party	34,150		$ 34,150
Company controlled by an officer and director
Lines of credit - related party	4,513
Proceeds from lines of credit - related party	22,500
Repayments of lines of credit - related party	$ 17,987

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Notes Payable, Disclosure: Schedule of Notes Payable (Details) - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Notes payable	$ 495,826	$ 507,240
Discounts on notes payable		(18,374)
Total Notes Payable	495,826	488,866
Note payable from a shareholder, secured (due May 2017)
Notes payable	55,826	82,240
Note payable from a shareholder, secured (due March 2017)
Notes payable	300,000	300,000
Note payable, to an officer, director and shareholder, unsecured (due June 2017)
Notes payable	$ 140,000	$ 125,000

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Notes Payable, Disclosure (Details) - USD ($)	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Notes payable, net of debt discount
Interest expense including amortization of the associated debt discount	$ 62,876	$ 36,239

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Convertible Notes Payable, Disclosure: Schedule of Convertible Notes Payable (Details) - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Convertible debt	$ 930,000	$ 510,000
Debt discount	(190,943)	(361,843)
Convertible notes payable, net	739,057	148,157
Convertible note payable from a shareholder, secured (due May 2018)
Convertible debt	10,000	10,000
Convertible note payable from a shareholder(2), secured (due May 2018)
Convertible debt	50,000	50,000
Convertible note payable from a shareholder, secured (due June 2018)
Convertible debt	50,000	50,000
Convertible note payable from a shareholder, secured (due August 2018)
Convertible debt	50,000	50,000
Convertible note payable from a shareholder-owned entity, secured (due August 2018 or 120 days after notice)
Convertible debt	615,000	$ 350,000
Convertible note payable from a shareholder, May 2, 2017, secured (due May 2020)
Convertible debt	100,000
Convertible note payable from a shareholder(2), May 2, 2017, secured (due May 2020)
Convertible debt	50,000
Convertible note payable from a shareholder, May 22, 2017, secured (due May 2020)
Convertible debt	$ 5,000

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Convertible Notes Payable, Disclosure (Details) - USD ($)	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Proceeds from convertible notes payable	$ 420,000	$ 510,000
Warrants issued, shares	163,000
Exercise price per share, warrants	$ 1.00
Convertible note payable from a shareholder, May 2, 2017, secured (due May 2020)
Proceeds from convertible notes payable	$ 100,000
Warrants issued, shares	20,000
Exercise price per share, warrants	$ 1.00
Convertible note payable from a shareholder(2), May 2, 2017, secured (due May 2020)
Proceeds from convertible notes payable	$ 50,000
Warrants issued, shares	10,000
Exercise price per share, warrants	$ 1.00
Convertible note payable from a shareholder, May 22, 2017, secured (due May 2020)
Proceeds from convertible notes payable	$ 5,000
Warrants issued, shares	1,000
Exercise price per share, warrants	$ 1.00
Convertible notes payable, net of debt discount
Interest expense including amortization of the associated debt discount	$ 258,223	$ 62,755

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Commitments and Contingencies (Details) - USD ($)	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2016
Security deposits	$ 1,500		$ 1,500
Rent expense	57,600	$ 61,200
Executive Employment Agreement - CEO
Base Salary per year	$ 75,000
Share bonus authorized	120,000
Executive Employment Agreement - President
Base Salary per year	$ 125,000
Share bonus authorized	250,000
SubleaseAgreementWithPerigonCompaniesLlcMember
Monthly lease payments due	$ 4,000
Security deposits	1,500
SubleaseAgreementWithTemplarAssetGroupLlcMember
Monthly lease payments due	$ 2,800

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Stock Warrants, Disclosure: Schedule of Warrants Activity (Details) - $ / shares	9 Months Ended
	Sep. 30, 2017	Dec. 31, 2016
Details
Warrants outstanding	1,400,312	1,237,312
Warrants issued, shares	163,000
Exercise price per share, warrants	$ 1.00

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Stockholders' Equity Disclosure (Details) - USD ($)	1 Months Ended	9 Months Ended
	Oct. 26, 2017	Sep. 30, 2017	Dec. 31, 2016
Preferred stock authorized		10,000,000	10,000,000
Par value of preferred stock		$ 0.001	$ 0.001
Common stock authorized		100,000,000	100,000,000
Par value of common stock		$ 0.001	$ 0.001
Preferred Stock conversion terms		Preferred Stock is convertible, at any time, at the option of the holder, is convertible into five shares of our common stock and one warrant to purchase one share of our common stock at $1.00 per share. All Preferred Stock will be automatically converted into shares of the Company’s common stock and warrants after three years from the original issue date of the Preferred Stock
Preferred shares converted		10,000
Common shares issued for conversion		50,000
Common stock repurchased and retired		300,000
Value of stock repurchased and retired		$ 84,000
Common stock for cash
Stock issued for cash	30,000	1,760,000
Proceeds from sale of stock	$ 15,000	$ 485,000
Common stock payable
Proceeds from sale of stock		$ 155,000
Preferred stock for cash
Stock issued for cash		25,000
Proceeds from sale of stock		$ 62,500
Common stock for services
Stock issued for services		1,287,500
Value of stock issued for services		$ 255,530

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Subsequent Events (Details) - Common stock for cash - USD ($)	1 Months Ended	9 Months Ended
	Oct. 26, 2017	Sep. 30, 2017
Proceeds from sale of stock	$ 15,000	$ 485,000
Stock issued for cash	30,000	1,760,000