10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended:  September 30, 2018

OR

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

SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to _________

Commission File Number:  000-54015

POWIN ENERGY CORPORATION

(Exact name of registrant as specified in its charter)

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

20550 SW 115th Ave

Tualatin, OR 97062

(Address of principal executive offices)

T: (503) 598-6659

(Issuer’s telephone number)

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

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files).  Yes    ☐  No    ☒

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

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☐	Smaller reporting company ☒ Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.  As of November 13, 2018, there were 45,251,600 shares of Common Stock, $0.001 par value, outstanding.

1

POWIN ENERGY CORPORATION

Index

PART I.        FINANCIAL INFORMATION

Item 1.	Condensed Financial Statements	3
	Consolidated Balance Sheets as of September 30, 2018 (unaudited) and December 31, 2017	3
	Consolidated Statements of Operations for the three and nine months ended September 30, 2018 and 2017 (unaudited)	4
	Consolidated Statements of Cash Flows for the nine months ended September 30, 2018 and 2017 (unaudited)	5
	Notes to Unaudited Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
	Note Regarding Forward Looking Statements
	Overview	20
	Critical Accounting Policies	20
	Results of Operations	21
	Liquidity and Capital Resources	22
	Off-Balance Sheet Arrangements	22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	22
Item 4.	Controls and Procedures.	23
PART II.  OTHER INFORMATION
Item 1.	Legal Proceedings.	23
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	23
Item 3.	Defaults Upon Senior Securities.	23
Item 4.	Mine Safety Disclosures.	23
Item 5.	Other Information.	23
Item 6.	Exhibits.	23

2

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements. 

POWIN ENERGY CORPORATION

CONSOLIDATED BALANCE SHEETS

	September 30,			December 31,
	2018			2017
		(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	456,484		$	3,496,629
Restricted cash		-			27,400
Accounts receivable, net		38,216			11,270
Inventories, net		2,423,184			310,564
Project assets, current		-			8,018,076
Tax receivable		18,151			294,862
Notes receivable		131,250			131,250
Prepaid expenses and other current assets		432,138			232,230
Total current assets		3,499,423			12,522,281
Project assets, non-current		-			8,018,076
Property and equipment, net		79,394			71,877
Investments in unconsolidated affiliates		8,372,575			475,263
Land use right, net		3,028,260			-
Intangible assets, net		310,424			236,754
Notes receivable		612,335			677,574
Total assets	$	15,902,411		$	22,001,825
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	6,147,525		$	9,580,700
Accounts payable, related party		3,326,927			1,309,946
Tax payable		75,696			-
Deferred revenue		1,111,380			24,621
Accrued expenses		386,679			391,125
Current portion of interest payable		512,104			42,045
Current portion of long-term debt		3,651,250			1,350,472
Current portion of long-term debt, related party		5,891,328			3,159,516
Total current liabilities		21,102,889			15,858,425
Long-term debt		-			4,953,926
Long-term debt, related party		-			742,215
Interest payable		-			108,767
Other liabilities		671,382			58,500
Total liabilities		21,774,271			21,721,833
Stockholders' equity
Common stock, $0.001 par value, 575,000,000 shares
Authorized; 45,263,070 and 45,263,070 shares issued and outstanding as of September 30, 2018 and December 31, 2017, respectively		45,264			45,264
Additional paid-in capital		45,284,991			44,524,683
Accumulated deficit		(51,280,405	)		(44,274,990	)
Accumulated other comprehensive income (loss)		78,290			(14,965	)
Total stockholders' (deficit) equity		(5,871,860	)		279,992
Total liabilities and stockholders' equity	$	15,902,411		$	22,001,825

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

3

POWIN ENERGY CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months ended September 30,						Nine Months ended September 30,
	2018			2017			2018			2017
Sales
Product sales	$	4,290,864		$	240		$	5,973,208		$	42,432
Revenue from energy storage assets		-			104,643			8,460,538			259,738
Sales total		4,290,864			104,883			14,433,746			302,170
Cost of sales
Product sales		3,514,895			534			5,232,799			877,469
Cost from energy storage assets		-			67,633			8,716,233			184,354
Cost of sales total		3,514,895			68,167			13,949,032			1,061,823
Gross profit (loss)		775,969			36,716			484,714			(759,653	)
Operating Expenses
Research and development		235,717			94,945			721,513			252,598
Selling, general and administrative		2,211,913			1,424,867			5,890,722			3,960,907
Total operating expenses		2,447,630			1,519,812			6,612,235			4,213,505
Operating loss		(1,671,661	)		(1,483,096	)		(6,127,521	)		(4,973,158	)
Other income (expenses)
Interest expense, net		(224,681	)		(236,463	)		(558,398	)		(421,179	)
Other income		(6,126	)		51,452			(3,883	)		57,952
Equity in loss of unconsolidated affiliates		(107,324	)		-			(315,613	)		-
Other expenses		(338,131	)		(185,011	)		(877,894	)		(363,227	)
Loss before taxes		(2,009,792	)		(1,668,107	)		(7,005,415	)		(5,336,385	)
Provision for income taxes		-			4,655			-			8,405
Net loss		(2,009,792	)		(1,672,762	)		(7,005,415	)		(5,344,790	)
Basic and diluted net loss per share		(0.04	)		(0.05	)		(0.15	)		(0.14	)
Weighted-average number of shares used on per share calculations:
Basic and diluted		45,263,070			37,107,924			45,263,070			37,104,551

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

4

POWIN ENERGY CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Nine Months ended September 30,
	2018			2017
Cash flows from operating activities:
Net loss	$	(7,005,415	)	$	(5,344,790	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock based compensation		760,308			132,455
Depreciation and amortization		68,175			177,921
Non-cash interest expense		-			341,254
Impairment of inventory		-			851,206
Equity in loss of unconsolidated affiliate		315,613			-
Changes in operating assets and liabilities:
Accounts receivable		(26,946	)		2,527
Notes and other receivables		-			(378,157	)
Project assets		3,727,536			-
Inventories		(2,112,620	)		95,822
Tax receivable		276,711			-
Prepaid expenses and other current assets		(199,908	)		(329,802	)
Accounts payable		(3,433,175	)		(451,529	)
Accounts payable, related party		2,016,981			(951,937	)
Tax payable		75,696			-
Deferred revenue		1,086,759			-
Accrued expenses		969,728			240,859
Net cash used in operating activities		(3,480,557	)		(5,614,171	)
Cash flows from investing activities:
Proceeds of notes receivable		65,239			-
Cash paid for purchase of intangible assets		(90,193	)		(28,835	)
Cash paid for purchase of property and equipment		(33,722	)		-
Cash paid for purchase of land use rights		(3,053,707	)		-
Purchase of energy storage assets and equipment		-			(4,738,691	)
Net cash used in investing activities		(3,112,383	)		(4,767,526	)
Cash flows from financing activities:
Proceeds from third party borrowings		3,030,838			6,596,213
Payment on third party borrowings		(1,588,295	)		-
Proceeds from related party borrowings		3,099,113			6,159,321
Payment on related party borrowings		(1,109,516	)		(202,071	)
Net cash provided by financing activities		3,432,140			12,553,463
Effect of foreign exchange on cash		93,255			-
Net increase (decrease) in cash, cash equivalents and restricted cash		(3,067,545	)		2,171,766
Cash, cash equivalents and restricted cash, beginning of period		3,524,029			432,044
Cash, cash equivalents and restricted cash, end of period	$	456,484		$	2,603,810
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid	$	224,500		$	130,000
Income taxes paid	$	-		$	3,750
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
Preferred stock converted to common stock	$	-		$	1,150,900
Property and equipment increase by accounts payable	$	-		$	10,384,605
Deconsolidation of third party debt	$	4,095,691		$	-
Equity method investment retained upon sale of 50% of subsidiary	$	8,212,925		$	-

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

5

POWIN ENERGY CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements 
 

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

Description of Business and History

Powin Energy Corporation (“Powin”, “Company”, “we”, “us”) is a leading producer, designer and developer of commercially proven, cost-competitive, safe and scalable lithium-ion based energy storage solutions for utilities and microgrid. We are incorporated in the State of Nevada and were founded in 1989 in Oregon.  Our primary product is the Stack140 (“Stack”), a modular, flexible, purpose-built battery string that is easily and cost-effectively scalable from a single unit to multiple megawatts of capacity.  We are focused on the rapidly growing advanced energy storage industry and deploying our Stack modular battery system which features our patented Battery Pack Operating System (“bp-OS”) software that provides critical insight into system functions and lifespan via our proprietary Battery Odometer and Warranty Tracker™ controls.

For the periods presented the Company has the following subsidiaries:

As described in this Report		As described in 2017 Form 10K
Legal entity name	Business segment name	Legal entity name	Business segment Name
Powin Energy Corporation	Energy	Powin Energy Corporation	Energy
Powin China Holdings 1, LLC	Energy
Powin Energy (Ningbo) Co., Ltd.	Energy
Powin Canada B.C. Ltd (2)	Energy	Powin Canada B.C. Ltd	Energy
	Energy	PPA Grand Johanna, LLC (1)	Energy
	Energy	Powin SBI, LLC (1)	Energy
	Energy	Don Lee BESS, LLC (1)	Energy
Powin Energy Ontario Storage II, LP (2)	Energy	Powin Energy Ontario Storage II, LP	Energy
Powin Energy Storage 2, Inc. (2)	Energy	Powin Energy Storage 2, Inc.	Energy
Powin Energy Ontario Storage,  LLC	Energy	Powin Energy Ontario Storage,  LLC	Energy

(1)	Sold in December 2017.
(2)	Sold 50% interest in March 2018.

In 2017, as part of the sale of our projects and pipelines, we acquired a 10% ownership stake in esVolta, LP (“esVolta”) a developer, owner and operator of utility-scale energy storage projects across North America. esVolta has entered a strategic long-term agreement with us under which we will be esVolta’s exclusive provider of battery storage systems. We did not record any impairment losses related to our equity method investment during the years ended December 31, 2017. For the nine months ended September 30, 2018, we recorded equity in loss of unconsolidated affiliates of $276,884 for our ownership percentage in the investee’s net loss and reduced our investment in equity method investee by this amount. As of September 30, 2018, the balance of investment in unconsolidated affiliates for esVolta is $198,379.

In December 2017 the Company entered into a purchase and sale agreement with esVolta for the sale of Powin Canada B.C. Ltd., the sole limited partner of Powin Energy Ontario Storage II, LP and sole shareholder of Powin Energy Storage 2, Inc.  Powin Canada B.C. Ltd through its subsidiaries holds the assets of an 8.8 MW / 40.8 MWh energy storage project located in Stratford, Ontario. Pursuant to the agreement, at closing esVolta paid to Powin an aggregate amount equal to 50.0% of the sum of $20,681,000 adjusted for working capital and debt balances at the time of closing for 50% of the ownership interests in Powin Canada B.C. Ltd.  Additionally, the purchase agreement has an option whereby esVolta, may purchase the remaining 50% ownership interests in Powin Canada B.C. Ltd. within one year of the original closing date of March 2018.  On March 29, 2018, we sold the 50% ownership stake in this previously consolidated entity, Powin Canada BC, Ltd to esVolta. We now account for our remaining 50% ownership in Powin Canada B.C., Ltd using the equity method.  In 2018 we recorded our investment in unconsolidated affiliates of $8,212,925 for our 50% ownership in Powin Canada B.C., Ltd. For the period from the date of deconsolidation to September 30, 2018 we recorded equity in loss of unconsolidated affiliates of $38,729 for our ownership percentage in the investee’s net loss and reduced our investment in equity method investee by this amount. As of September 30, 2018, the balance of investment in unconsolidated affiliates for Powin Canada B.C. Ltd. is $8,174,196.

6

In January 2018, the Company formed Powin China Holdings 1, LLC, an Oregon limited liability company (“Powin China”).  In March 2018, Powin Energy (Ningbo) Co., Ltd (“Powin Ningbo”) was established in the People’s Republic of China as a subsidiary of Powin China. In April 2018, Powin Ningbo purchased land in Ningbo Yuyao, China for 19,192,246 RMB ($3,053,707 USD) plus a performance deposit of 1,852,000 RMB ($295,083 USD). The land will be the site for the planned construction of a battery manufacturing facility.

The Company’s client base includes developers, utilities and providers in the energy storage industry sector.  Operations outside the United States of America are subject to risks inherent in operating under different legal systems and various political and economic environments.  Among the risks are changes in existing tax laws, possible limitations on foreign investment and income repatriation, government price or foreign exchange controls, and restrictions on currency exchange.

Basis of Presentation

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Powin Energy Corporation and its subsidiaries. All intercompany transactions and balances have been eliminated during consolidation. Investments in unconsolidated affiliates through which the Company exercises significant influence over but does not control the investee and is not the primary beneficiary of the investee’s activities are accounted for using the equity method.

Foreign Currencies

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

The reporting currency of the Company is the U.S. dollars. The results of operations and cash flows conducted in foreign currency are translated at average exchange rates during the period, and assets and liabilities are translated at the unified exchange rates at the balance sheet dates, and equity is translated at the historical exchange rates. As a result, amounts related to assets and liabilities reported on the statements of cash flows will not necessarily agree with changes in the corresponding accounts on the balance sheets. Translation adjustments resulting from this process are included in accumulated other comprehensive income in the statements of stockholders’ equity. Translation adjustments for the nine months ended September 30, 2018 and 2017 were $93,255 and $0, respectively. The cumulative translation adjustment and effect of exchange rate changes on cash, which was recorded as accumulated other comprehensive income (loss) on the balance sheet, as of September 30, 2018 and December 31, 2017 were $78,290 and $(14,965), respectively. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred.

Unaudited interim financial statements

The accompanying unaudited consolidated balance sheet as of September 30, 2018, the consolidated statements of operations and condensed consolidated statements of comprehensive loss for the nine months ended September 30, 2018 and 2017 of cash flows for the nine months ended September 30, 2018 and 2017, and other information disclosed in the related notes are unaudited. The consolidated balance sheet as of December 31, 2017, was derived from our audited consolidated financial statements at that date. The accompanying condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes contained in our Form 10-K for the year ended December 31, 2017 filed with the Securities and Exchange Commission. The accompanying interim condensed consolidated financial statements and related disclosures have been prepared on the same basis as the annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments necessary for a fair statement of the results of operations for the periods presented. The condensed consolidated results of operations for any interim period are not necessarily indicative of the results to be expected for the full year or any other future year or interim period.

Advertising

The Company expenses the cost of advertising as incurred.  For the nine months ended September 30, 2018 and 2017, the amount charged to advertising expense was $118,590 and $24,175, respectively.

Cash and Cash Equivalents

The Company considers all highly liquid investments with original maturities of 90 days or less at the time of purchase to be cash equivalents. The cash deposits in U.S. financial institutions exceed the amounts insured by the U.S. government. The standard insurance amount is $250,000 per depositor, per insured bank. Non-performance by these institutions could expose the Company to losses for amounts in excess of insured balances. At September 30, 2018 and December 31, 2017, the Company’s bank balances exceeded insurances balances by $194,672 and $2,862,505, respectively. At September 30, 2018 and December 31, 2017, the Company had no cash equivalents.

7

Inventories

Inventory is reported at the lower of cost (first-in, first-out method) or net realizable value.  The Company capitalizes applicable direct and indirect costs incurred in the Company’s manufacturing operations to bring its products to a sellable state. These costs include direct material, direct labor, and indirect manufacturing costs, including depreciation and amortization. Inventories consist primarily of containers with partially or fully completed energy storage components, including batteries, inverters and battery management hardware and software.

As of September 30, 2018 and December 31, 2017, the components of inventories were as follows:

	September 30, 2018			December 31, 2017
Raw materials	$	2,837,485		$	543,373
Finished goods		1,126,489			1,307,981
Reserve for slow moving and obsolete inventory		(1,540,790	)		(1,540,790	)
Inventories, net	$	2,423,184		$	310,564

We regularly review the cost of inventories against their estimated net realizable value and record write-downs if any inventories have costs in excess of their net realizable values. We also regularly evaluate the quantities and values of our inventories in light of current market conditions and trends, among other factors, and record write-downs for any quantities in excess of demand or for any obsolescence. This evaluation considers the use of Stacks in our systems business, expected demand, anticipated sales prices, strategic raw material requirements, new product development schedules, the effect new products might have on the sale of existing products, product obsolescence, product merchantability, and other factors. Market conditions are subject to change, and actual consumption of our inventory could differ from forecasted demand.

Included in raw materials as of September 30, 2018 is $1,113,720 of inventory located at Yangzhou Finway manufacturing facility which will be used in production of Stack equipment for planned shipments to our customers.

Based on our assessment, $0 and $851,206 impairment expenses for inventories were recorded in cost of sales during the nine months ended September 30, 2018 and 2017, respectively.

Intangible Assets

Our intangible assets include websites, patents, and trademarks. Intangible assets that are subject to amortization are amortized using the straight-line method over their estimated period of benefit, ranging from 3 to 5 years. We evaluate the recoverability of intangible assets periodically by taking into account events or circumstances that may warrant revised estimates of useful lives or that indicates the asset may be impaired. Based on this assessment, no impairment expenses for intangible assets were recorded in operating expenses during the nine months ended September 30, 2018 and 2017. Intangible assets amounted $310,424 and $236,754 as of September 30, 2018 and December 31, 2017, respectively. Amortization expenses amounted to $16,523 and $2,041 for the nine months ended September 30, 2018 and 2017, respectively.

Equity Method Investments

We account for our unconsolidated venture using the equity method of accounting. As part of this evaluation, we consider our participating and protective rights in the venture as well as its legal form. We use the equity method of accounting for our investments when we have the ability to significantly influence, but not control, the operations or financial activities of the investee. We record our equity method investments at cost and subsequently adjust their carrying amount each period for our share of the earnings or losses of the investee and other adjustments required by the equity method of accounting. Distributions received from our equity method investments are recorded as reductions in the carrying value of such investments and are classified on the consolidated statements of cash flows pursuant to the cumulative earnings approach. Under this approach, distributions received are considered returns on investment and are classified as cash inflows from operating activities unless our cumulative distributions received, less distributions received in prior periods that were determined to be returns of investment, exceed our cumulative equity in earnings recognized from the investment. When such an excess occurs, the current period distributions up to this excess are considered returns of investment and are classified as cash inflows from investing activities.

8

We monitor our equity method investments, which are included in “Investment in unconsolidated affiliate” in the accompanying consolidated balance sheets, for impairment and record reductions in their carrying values if the carrying amount of an investment exceeds its fair value. An impairment charge is recorded when such impairment is deemed to be other-than-temporary. To determine whether impairment is other-than temporary, we consider our ability and intent to hold the investment until the carrying amount is fully recovered. Circumstances that indicate an other-than temporary impairment may have occurred include factors such as decreases in quoted market prices or declines in the operations of the investee. The evaluation of an investment for potential impairment requires us to exercise significant judgment and to make certain assumptions. The use of different judgments and assumptions could result in different conclusions.

In 2017, as part of our sale of our projects and pipeline, we acquired a 10% ownership stake in esVolta, As a result, our investment in unconsolidated affiliates has balance of $475,263 as of December 31, 2017. We did not record any impairment losses related to our equity method investment during the years ended December 31, 2017. In March 2018, we sold a 50% ownership stake in a previously consolidated entity, Powin Canada B.C., Ltd. to esVolta. We now account for our remaining 50% ownership in Powin Canada B.C., Ltd. using the equity method.  In 2018 we recorded our investment in unconsolidated affiliates of $8,212,925 for our 50% ownership in Powin Canada B.C., Ltd.

For the nine months ended September 30, 2018 we recorded equity in loss of unconsolidated affiliates of $315,613 for our ownership percentage in the investee’s net loss and reduced our investment in equity method investee by this amount. As of September 30, 2018, the balance of investment in unconsolidated affiliates is $8,372,575.

Stock-Based Compensation

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

The Powin Energy Corporation 2017 Equity Incentive Plan (“2017 Plan”) stipulates how directors, officers, employees, and consultants of Powin Energy Corp (including any of its subsidiaries) are eligible to participate in various forms of share-based compensation.  The 2017 Plan is administered by the compensation committee of our board of directors (or any other committee designated by our board of directors), which is authorized to, among other things, determine recipients of grants, exercise price and vesting schedule of the awards made under the 2017 Plan. The 2017 Plan provides for the grant of incentive stock options, non-qualified stock options, stock appreciation rights, restricted shares, restricted stock units, performance units, cash incentive awards, performance compensation awards, and other equity-based and equity-related awards. In addition, the shares underlying any forfeited, expired, terminated, or canceled awards, or shares surrendered as payment for taxes required to be withheld, become available for new award grants. We may not grant awards under the 2017 Plan after 2027, which is the tenth anniversary of the 2017 Plan’s approval by our stockholders. As of September 30, 2018, we had 4,134,079 shares available for future issuance under the 2017 Plan.

Land Use Rights

All urban land in China is owned by the State. Pursuant to Interim Regulations of the People’s Republic of China Concerning the Assignment and Transfer of the Right to the Use of the State-owned Land in the Urban Areas, which became effective on May 19, 1990, individuals and companies are permitted to acquire rights to use urban land or land use rights for specific purposes, including residential, industrial and commercial purposes. The land use rights are granted for a period of 70 years for residential purposes, 50 years for industrial purposes and 40 years for commercial purposes. These periods may be renewed at the expiration of the initial and any subsequent terms. Upon approval by both the land administrative authorities and city planning authorities, industrial parcel uses may be converted to other uses, and the duration and other clauses in the land use right granting agreement will be revised to match the new use. Granted land use rights are transferable and may be used as security for borrowings and other obligations. We have received the necessary land use right certificates for the properties described under Note 7.

Reclassifications

Certain prior year amounts have been reclassified to conform to the current year presentation. These reclassifications have no impact on our consolidated net earnings, financial position or cash flows.

9

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606), which amends the existing accounting standards for revenue recognition. The new guidance provides a new model to determine when and over what period revenue is recognized. Under this new model, revenue is recognized as goods or services are delivered in an amount that reflects the consideration we expect to collect. In March 2016, the FASB issued an ASU, Revenue from Contracts with Customers: Principal versus Agent Considerations (Reporting Revenue Gross versus Net), which clarifies the principal versus agent guidance in the new revenue recognition standard. In April 2016, the FASB issued another ASU, Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing, which clarifies the guidance on accounting for licenses of intellectual property and identifying performance obligations in the new revenue recognition standard. In May 2016, the FASB issued another ASU, Revenue from Contracts with Customers: Narrow-Scope Improvements and Practical Expedient, which clarifies the transition, collectability, noncash consideration and the presentation of sales and other similar taxes in the new revenue recognition standard. As an emerging growth company, the guidance is effective for fiscal years beginning after December 15, 2018; early adoption is permitted for periods beginning after December 15, 2016. The new standard is required to be applied retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying it recognized at the date of initial application. We have not yet selected a transition method and are evaluating the impact of adopting this guidance.

In February 2018, the FASB issued ASU 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220) – Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, to allow entities to reclassify the income tax effects of the Tax Act on items within accumulated other comprehensive income to retained earnings. ASU 2018-02 is effective for fiscal years and interim periods within those years beginning after December 15, 2018, and early adoption is permitted. We are currently evaluating the impact ASU 2018-02 will have on our consolidated financial statements and associated disclosures. 

Note 2: Going Concern

The Company sustained a net loss $7,005,415 and $5,344,790 during the nine months ended September 30, 2018 and 2017. The Company has accumulated deficit of $51,280,405 and $44,274,990 as of September 30, 2018 and December 31, 2017, respectively. The company has working capital deficit of $17,603,466 and working capital of $3,336,144 as of September 30, 2018 and December 31, 2017, respectively. The Company also has notes payable to unrelated parties due within 12 months amounting $3,651,250 and $1,350,472 as of September 30, 2018 and December 31, 2017, respectively. The Company’s continuation as a going concern is dependent on its ability to generate sufficient cash flows from operations to meet its obligations and/or obtain additional financing, as may be required. The above conditions raise substantial doubt about the Company’s ability to continue as going concern.

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

Management has assessed the Company’s ability to continue as a going concern as of the balance sheet date, and up to and including the financial statement issuance date. The assessment of a company’s ability to meet its obligations is inherently judgmental. Without additional funding, the company may not have sufficient available cash to meet its obligations coming due in the ordinary course of business within one year of the financial statement issuance date. However, the Company has historically been able to successfully secure funding to meet its obligations as they become due. The following conditions were considered in management’s evaluation of going concern:

· In March 2018, the Company completed a 8.8 MW / 40.8 MWh Battery Energy Storage System connected to a Canadian utility and sold a 50% interest in the project to esVolta. The project is the largest battery facility in Canada and illustrates the state of lithium-ion as a grid-scale technology.  esVolta has an option to purchase the remaining 50% interest in the project by March 29, 2019.

· Management is actively in discussions with several parties regarding various forms of funding, which if successful, would mitigate any going concern risks within one year from the date of issuance of its financial statements for the nine months ended September 30, 2018.

Note 3: Project Assets

Project assets primarily consist of costs related to battery energy storage projects in various stages of development that are capitalized prior to the completion of the sale of the project, including projects that may have begun commercial operation under power purchase agreements and are actively marketed and intended to be sold. These project related costs include costs for land, development, and construction of a battery energy storage system. Development costs may include legal, consulting, permitting, transmission upgrade, interconnection, and other similar costs. Once we enter into a definitive sales agreement, we classify such project assets as current, or non-current if the purchase option is greater than one year, until the sale is completed, and we have met all of the criteria to recognize the sale as revenue. If a project is completed and begins commercial operation prior to the closing of a sales arrangement, the completed project will remain in project assets until closing of sale. We present all expenditures related to the development and construction of project assets, whether fully or partially owned, as a component of cash flows from operating activities.

We review project assets for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. We consider a project commercially viable or recoverable if it is anticipated to be sold for a profit once it is either fully developed or fully constructed. We consider a partially developed or partially constructed project commercially viable or recoverable if the anticipated selling price is higher than the carrying value of the related project assets. We examine a number of factors to determine if the project is expected to be recoverable, including whether there are any changes in environmental, ecological, permitting, market pricing, or regulatory conditions that may impact the project. Such changes could cause the costs of the project to increase or the selling price of the project to decrease. If a project is not considered recoverable, we impair the respective project assets and adjust the carrying value to the estimated fair value, with the resulting impairment recorded within “Selling, general and administrative” expense.

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Energy storage systems business sales arrangements in which we construct a battery power system for a customer on land that is controlled by the customer and has not been previously controlled by Powin, are accounted for under ASC 605-35. For such sales arrangements, we use the completed contract method as our standard accounting policy since we are unable to reliably estimate the costs to complete the services or the total amount of the contract during construction.  Under the completed contract method we recognize all of the revenue and profit associated with a project only after the project has been completed and collectability is reasonably assured under the terms of the sales contract.  In applying the completed contract method, we recognize income only when a contract is completed or substantially completed, such as when the remaining costs to be incurred are not significant.  Under this method costs incurred are reflected on the balance sheet under project assets.

Project Assets	September 30, 2018		December 31, 2017
Powin Energy Ontario Storage II - 8.8 MW / 40.8 MWh energy storage project located in Stratford, Ontario	$	—	$	16,036,152
Total project assets	$	—	$	16,036,152

On December 4, 2017 the Company entered into a purchase and sale agreement with esVolta for the sale of Powin Canada B.C. Ltd., the sole limited partner of Powin Energy Ontario Storage II, LP and sole shareholder of Powin Energy Storage 2, Inc.  At closing, esVolta paid to Powin an aggregate amount equal to 50.0% of the sum of $20,681,000 adjusted for working capital and debt balances at the time of closing for 50% of the ownership interests in Powin Canada B.C. Ltd.  Closing occurred March 29, 2018, subsequent to date of project completion and commissioning. The Company lost control of Powin Canada B.C. Ltd upon closing and accounted for this transaction as deconsolidation of a subsidiary during the quarter ended September 30, 2018. Powin Canada B.C. Ltd through its subsidiaries holds the assets of an 8.8 MW / 40.8 MWh energy storage project located in Stratford, Ontario under development and included in project assets as of December 31, 2017.  Based on this, the 50% of the total project asset is presented as current asset, and the remaining 50% is presented as non-current asset as of December 31, 2017. Additionally, the purchase agreement has an option whereby esVolta may purchase the remaining 50% ownership interests in Powin Canada B.C. Ltd. within one year of the original closing date of March 29, 2018.

In March 2018, the Company recognized a net loss of $428,001 related to the deconsolidation of the subsidiary Powin Canada B.C., Ltd.   There was no gain or loss recognized related to the remeasurement of our 50% retained investment in the former subsidiary Powin Canada B.C., Ltd.  The $428,001 net loss related to deconsolidation is shown as a component of gross margin, equals to revenue from energy storage assets in the amount of $8,288,232, net of cost from energy storage assets in the amount of $8,716,233.  The valuation used to measure the fair value of our direct retained 50% investment in Powin Canada B.C., Ltd was based on the market approach.  Estimating the fair value of the noncontrolling interest we obtain begins with the valuation of the entire energy storage project being sold to the customer net of any associated debt.  Such valuation generally uses a market based valuation technique.  Under the market approach the cash received of $8,288,232 for the 50% interest sold approximates the retained 50% equity method investment of $8,212,925.  The Company retained a 50% ownership interest in the deconsolidated entity and will continue to have involvement in the operations of the entity with the acquiring entity esVolta, a related party in which Powin Energy Corporation holds a 10% ownership interest in.  The deconsolidated entity Powin Canada B.C., Ltd will continue to be a related party due to our remaining 50% ownership interest which is accounted for under the equity method of accounting. Since the transaction resulted in a loss, the Company recognized the total loss of $428,001 and did not defer the 10% loss from related party.

In June 2018, the Company recognized revenue of $172,306 from proceeds received from esVolta after including final working capital adjustments related to the Stratford, Ontario project and the resulting impact on the final sales price.

Note 4: Tax Payable

Tax payable as of September 30, 2018 is the GST/HST tax payable of $75,696. The GST/HST tax payable represents net amounts due from the Canada Revenue Agency (CRA) for Goods and Services Tax / Harmonized Sales Tax (GST/HST) on taxable goods and services purchased or sold in Canada.  The Company is registered for GST/HST with the CRA and files periodic tax returns for each reporting period listing the amount of GST/HST collected during the reporting period along with the amount of input tax credits claimed.  The net tax for each reporting period is the difference between the GST/HST charged on taxable supplies and the GST/HST paid on business purchases and expenses (input tax credits). This resulted in a GST/HST payable as of September 30, 2018, which occurs when the Company has collected more GST/HST than we paid. GST/HST tax payable at September 30, 2018 and December 31, 2017 is $75,696 and $0, respectively. 

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Note 5: Notes Receivable

Notes receivable consist of the following:

	September 30, 2018				December 31, 2017
	Current		Non Current		Current		Non Current
On October 3, 2016, the Company issued a promissory note to Rolland Holding Company LLC, an unrelated party. The principal amount is $800,000 and the interest rate is 5%, due on November 21, 2024.	$	100,000	$	549,835	$	100,000	$	615,074
On October 3, 2016, the Company issued a promissory note to Powin Mexico, an unrelated party. The principal amount is $125,000 with no interest rate, due on December 3, 2020.		31,250		62,500		31,250		62,500
	$	131,250	$	612,335	$	131,250	$	677,574

Effective October 3, 2016 (see Note 15), the Company entered into a Stock Purchase Agreement with Powin Industries, SA de CV (“Powin Mexico”) and Rolland Holding Company, LLC (“Rolland”).  At Closing, Rolland made a cash payment of $99,000 and delivered to the Company (i) its promissory note in the principal amount $100,000 bearing interest at 4% per annum with principal and interest payable in twelve (12) equal monthly installments (“Short Term Note”); and (ii) its promissory note in the principal amount of $800,000 bearing interest at 5% per annum with principal and interest payable in ninety-nine (96) equal monthly installments (“Long Term Note”). The interest rate on the Long Term Note will be renegotiated if and when the Prime Rate for the U.S reaches 5%. In addition, Powin Mexico delivered to the Company a non-interest bearing promissory note in the amount of $125,000 (“Powin Mexico Note”) which calls for four (4) equal monthly installments of $31,250 on each of December 31, 2017, December 31, 2018, December 31, 2019 and December 31, 2020. The Powin Mexico Note represents a compromised amount representing the difference between the amount of the Powin Mexico accounts receivable and the amount of the Powin Mexico accounts payable owing to the Company. Amounts due under the Short Term Note, the Long Term Note and the Powin Mexico Note, respectively, may be accelerated upon a failure to pay amounts due thereunder when due, unless waived or cured. The total amount collected under these notes receivable during 2017 is $202,703. The Company recognized interest income of $39,566 for the year ended December 31, 2017.  The total amount collected under these notes receivable for the nine months ended September 30, 2018 is $75,000. The Company recognized interest income of $25,735 for the nine months ended September 30, 2018.

The Company has performed an analysis of the notes receivable balance under ASC 810-10 guidance with respect to accounting for variable interest entities (“VIE”), and has determined the Company lacks the power to make key operating decisions considered to be most significant to the VIE, and is therefore not considered to be the primary beneficiary in this transaction.

Note 6: Property and Equipment, net

The components of property and equipment were as follows:

	September 30, 2018			December 31, 2017
Equipment	$	76,662		$	50,385
Leasehold improvements		7,564			7,564
Construction in progress		7,445			-
Computers		99,365			99,365
Vehicles		32,983			32,983
Accumulation depreciation		(144,625	)		(118,420	)
Property and equipment, net	$	79,394		$	71,877

For the three months ended September 30, 2018 and 2017, depreciation of property and equipment amounted $8,482 and $64,790, respectively. For the nine months ended September 30, 2018 and 2017, depreciation of property and equipment amounted $26,205 and $175,880, respectively.

Note 7: Land Use Rights, net

The Company’s land use rights consist of the following:

	September 30, 2018			December 31, 2017
Cost of land use rights	$	3,053,707		$	-
Accumulation amortization		(25,447	)		-
Land use rights, net	$	3,028,260		$	-

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 In April 2018, Powin Ningbo purchased land in Ningbo Yuyao, China for 19,192,246 RMB ($3,053,707 USD). The land will be the site for the planned construction of a battery manufacturing facility for industrial use. Land use rights are stated at cost less accumulated amortization. Amortization is provided using the straight-line method over the terms of the lease of 50 years obtained from the relevant PRC land authority.

For the three months ended September 30, 2018 and 2017, amortization of land use rights amounted $5,872 and $0, respectively. For the nine months ended September 30, 2018 and 2017, amortization of land use rights amounted $25,447 and $0, respectively

Note 8: Other Receivable

The Stock Purchase Agreement for the sale of Q Pacific Corporation (“QPM”) in 2016 contains a provision whereby Powin is due 35% of the annual EBITDA of QPM for fiscal years 2017, 2018 and 2019.  The amount calculated under this agreement and due to Powin is $0 for nine months ended September 30, 2018.  The Company records amounts earned under this agreement to other income and other current assets. The amount due of $109,074 as of December 31, 2017 was collected in March 2018.

The Company has performed an analysis of the notes receivable balance under ASC 810-10 guidance with respect to accounting for variable interest entities (“VIE”), and has determined the Company lacks the power to make key operating decisions considered to be most significant to the VIE, and is therefore not considered to be the primary beneficiary in this transaction.

Note 9: Loss Per Share

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

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

	For the nine months ended September 30,
	2018			2017
Net loss attributable to Powin Energy Corporation (A)	$	(7,005,415	)	$	(5,344,790	)
Weighted average outstanding shares of  common stock (B)		45,263,070			37,104,551
Dilutive effect of securities		-			-
Common stock and common stock equivalents (C)		45,263,070			37,104,551
Loss per share
Basic (A/B)	$	(0.15	)	$	(0.14	)
Diluted (A/C)	$	(0.15	)	$	(0.14	)

The Company has 2,318,921 shares and 2,128,603 shares of outstanding stock options as of September 30, 2018 and December 31, 2017, respectively.

On April 15, 2013, the Company entered into a Settlement Agreement and Mutual Release to settle a previously disclosed action as noted in our 8K filed on April 17, 2013. Pursuant to the Settlement Agreement, the Company issued a Warrant to Purchase Common Stock to Global Storage Group, LLC for 70,000 shares of the Company’s common stock at an exercise price of $25.00; and a Warrant to Purchase Common Stock to Virgil L. Beaston for 30,000 shares of the Company’s common Stock at an exercise price of $25.00. The exercise period of each Warrant is 60 months from the date of issuance and may be exercised in whole or in part at any time prior to April 15, 2018. As of the expiration date of April 15, 2018 none of the warrants have been exercised and have now expired.

The following sets forth the number of shares of common stock underlying if all outstanding options, warrants, and convertible debt were converted as of September 30, 2018 and December 31, 2017:

	September 30, 2018		December 31, 2017
Warrants		-		100,000
Stock options		2,318,921		2,128,603
		2,318,921		2,228,603

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For the nine months ended September 30, 2018 and 2017, the effect of warrants and stock options are excluded from loss per share because their impact is anti-dilutive since the company has a net loss both years.

Note 10: Long-term Debt

The total carrying value of long-term debt, including current and non-current classifications, was as follows:

	September 30, 2018				December 31, 2017
	Current		Non Current		Current		Non Current
Loan from a third party, originating March 16, 2017, due March 16, 2019, at 6% interest, with a security interest in the Company’s ownership stake in Powin Canada B.C. Ltd and a $1 million personal guarantee from Joseph Lu. Subject to meeting the requirements of a qualified financing event within 24 months of the date of this note, the note holder will have the right to convert the note balance into offered securities. The first $1 million of the note balance is eligible to be converted at 90% of the price paid per share under the qualified financing, and the remaining balance at the same price per share paid by the other participants.	$	2,000,000	$	-	$	-	$	2,000,000
Loan from a third party, originating September 13, 2017, due September 14, 2018, at 10% interest, with no collateral.  The loan was extended on September 14, 2018 with a new maturity date of June 14, 2019.		150,000		-		150,000		-
Loan from a third party, originating September 26, 2017, due September 27, 2020 at 8.75% interest. The loan is secured by Powin Energy Ontario Storage II, LP and guaranteed by Powin Canada B.C. Ltd. (a)		-		-		1,200,472		2,953,926
Loan from a third party, originating July 17, 2018, due September 16, 2018, at 18% interest, with personal guarantee from Joseph Lu. The loan was extended on September 16, 2018 with a new maturity date of December 31, 2018.		746,891		-		-		-
Loan from a third party, originating July 17, 2018, due September 16, 2018, at 18% interest, with personal guarantee from Joseph Lu. The loan was extended on September 16, 2018 with a new maturity date of December 31, 2018.		306,225		-		-		-
Loan from a third party, originating July 17, 2018, due September 16, 2018, at 18% interest, with personal guarantee from Joseph Lu. The loan was extended on September 16, 2018 with a new maturity date of December 31, 2018.		448,134		-		-		-
Total long-term debt	$	3,651,250	$	-	$	1,350,472	$	4,953,926

For the three months ended September 30, 2018 and 2017, interest expense related to short-term and long-term debt amounted to $102,278 and $52,858 respectively.  For the nine months ended September 30, 2018 and 2017, interest expense related to long-term debt amounted to $277,261 and $80,075, respectively.  Additionally, $92,052 was capitalized in project assets in 2018 prior to the deconsolidation of Powin Canada B.C., Ltd. 

(a) As discussed in note 3, Powin Energy Ontario Storage II, LP is no longer consolidated due to the sale to esVolta and as a result the loan balance is shown as $0 as of September 30, 2018.

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 Long-term debt related party

	September 30, 2018				December 31, 2017
	Current		Non Current		Current		Non Current
On May 31, 2017, the Company renewed two loans from Lu Pacific Properties, LLC. The principal amount is $150,000 and the annual interest rate is 6%, due on May 31, 2018, with no collateral. As of September 30, 2018, accrued interest is $22,101. Interest expense amounted to $7,149 for the nine months ended September 30, 2018.  The loan was renewed on May 31, 2018 with a new maturity date of May 31, 2019.	$	150,000	$	-	$	150,000	$	-
Loan originating July 5, 2016, due July 4, 2017, at a 6% annual interest rate, with no collateral On October 31, 2017, 3U Trading note transfer to Joseph Lu per agreement Principal and accrued interest may be converted into preferred stock. As of September 30, 2018, accrued interest is $0.  Interest expense amounted to $2,987 for the nine months ended September 30, 2018. The loan was paid off on January 19, 2018.		-		-		1,009,516		-
On October 26, 2016, the Company secured a loan from Lu Pacific Properties, LLC. The principal amount is $2,000,000, and the annual interest rate is 7%, due on October 26, 2018, secured by Company’s intellectual property. As of September 30, 2018, accrued interest is $71,694. Interest expense amounted to $104,713 for the nine months ended September 30, 2018. The loan was renewed on October 25, 2018, with a new maturity date of November 30, 2018.		2,000,000		-		2,000,000		-
On January 26, 2017, the Company borrowed the sum of $1,000,000 from Joseph Lu, and issued its note in the principal amount of $1,000,000, with an annual interest rate is 7%, due on January 26, 2019. The note is secured by the Company’s intellectual property. As of September 30, 2018, accrued interest is $51,955. Interest expense amounted to $38,860 for the nine months ended September 30, 2018. Partial of the Note, $247,785 principal was converted to common stock on October 16, 2017.		742,215		-		-		742,215
On March 14, 2018, the Company secured a loan from Joseph Lu. The principal amount is $585,730 and the annual interest rate is 12%, due in May 14, 2018, secured by 100% of equity of Powin China. As of September 30, 2018, accrued interest is $37,169. Interest expense amounted to $37,169 for the nine months ended September 30, 2018.  The loan was renewed with a new maturity date of December 31, 2018.		585,730		-		-		-
On April 13, 2018, the Company secured a loan from Mei-yi Lu due June 12, 2018 at 36% interest, with no collateral. The loan was renewed and due upon holder request, at 12% interest. As of September 30, 2018, accrued interest is $59,573. Interest expense amounted to $59,573 for the nine months ended September 30, 2018.		400,000		-		-		-
On April 13, 2018, the Company secured a loan from Lu Pacific Properties, LLC due June 12, 2018 at 36% interest, with no collateral. The loan was renewed and is due November 30, 2018, at 12% interest. As of September 30, 2018, accrued interest is $43,190.  Interest expense amounted to $43,190 for the nine months ended September 30, 2018.		290,000		-		-		-
On July 13, 2018, the Company secured a loan from J. Lu Investment, LLC due August 1, 2018 at 36% interest, with no collateral. On August 1, 2018 the loan was renewed and due upon holder request, at 7% interest. As of September 30, 2018, accrued interest is $10,605.  Interest expense amounted to $10,605 for the nine months ended September 30, 2018.		700,000		-		-		-

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On August 13, 2018, the Company secured a loan from Danny Lu due August 9, 2019 at 12% interest, with no collateral. As of September 30, 2018, accrued interest is $1,611.  Interest expense amounted to $1,611 for the nine months ended September 30, 2018.		100,000		-		-		-
On August 14, 2018, the Company secured a loan from Geoffrey Brown due August 9, 2019 at 12% interest, with no collateral. As of September 30, 2018, accrued interest is $1,578.  Interest expense amounted to $1,578 for the nine months ended September 30, 2018.		100,000		-		-		-
On September 10, 2018, the Company secured a loan from Joseph Lu due March 10, 2019 at 6% interest, secured by 100% of equity of Powin China. As of September 30, 2018, accrued interest is $77.  Interest expense amounted to $77 for the nine months ended September 30, 2018.		23,383		-		-		-
On September 28, 2018, the Company secured a loan from Meiyi Lu due upon holder request at 12% interest, with no collateral. As of September 30, 2018, accrued interest is $789.  Interest expense amounted to $789 for the nine months ended September 30, 2018.		800,000		-		-		-
Total	$	5,891,328	$	-	$	3,159,516	$	742,215

Interest expense related to loans from related parties amounted to $130,811 and $72,686 for the three months ended September 30, 2018 and 2017, respectively. Interest expense related to loans from related parties amounted to $308,531 and $130,250 for the nine months ended September 30, 2018 and 2017, respectively. 

Schedule of long term debt:

	December 31, 2017 Balance		Borrowed		Paid			Deconsolidated			Converted		September 30, 2018 Balance
Third party note, March 16, 2017	$	2,000,000	$	-		-		$	-		$	-	$	2,000,000
Third party note, September 26, 2017		4,154,398		-		(58,707	)		(4,095,691	)		-		-
Third party note, June 13, 2017		150,000		-		-			-			-		150,000
Third party note, April 17, 2018				1,529,588		(1,529,588	)		-			-		-
Third party note, July 17, 2018				746,891		-			-			-		746,891
Third party note, July 17, 2018				306,225		-			-			-		306,225
Third party note, July 17, 2018				448,134		-			-			-		448,134
Renewal of two notes from Lu Pacific Properties, LLC, May 31, 2017		150,000		-		-			-			-		150,000
3U Trading note transfer to Joseph Lu, October 31, 2017		1,009,516		-		(1,009,516	)		-			-		-
Lu Pacific Properties, LLC note,  October 26, 2016		2,000,000		-		-			-			-		2,000,000
Joseph Lu note, January 26, 2017,		742,215		-		-			-			-		742,215
Joseph Lu note, March 14, 2018,		-		585,730		-			-			-		585,730
Joseph Lu note, September 10, 2018,		-		23,383		-			-			-		23,383
J. Lu Investments note, June 20, 2018		-		100,000		(100,000	)		-			-		-
J. Lu Investments note, July 13, 2018		-		700,000		-			-			-		700,000
Mei-yi Lu note, April 13, 2018		-		400,000		-			-			-		400,000
Mei-yi Lu note, April 13, 2018		-		800,000		-			-			-		800,000
Danny Lu note, August 13, 2018		-		100,000		-			-			-		100,000
Geoff Brown note, August 14, 2018		-		100,000		-			-			-		100,000
Lu Pacific Properties, LLC note, April 13, 2018		-		290,000		-			-			-		290,000
Total	$	10,206,129	$	6,129,951	$	(2,697,811	)	$	(4,095,691	)	$	-	$	9,542,578

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Note 11: Commitments

Operating Leases

The Company leases the Company headquarters facility in Tualatin, Oregon from Lu Pacific Properties, LLC, a related party controlled by the Lu family. This lease is through September 30, 2021 and requires the Company to pay for all property taxes, utilities and facility maintenance.

Effective January 1, 2017, the Company entered into a lease amendment. The Company leased 28,275 square feet of the building. The lease term is through September 30, 2021 and all property taxes, utilities and facility maintenance were charged at $0.15 per square foot per month by Lu Pacific Properties, LLC. The monthly rental expense is $17,989.

The Company leases a facility from 3U Millikan, LLC, a company owned by Xilong Zhu, a member of the Company’s Board of Directors. The lease is for its Southern California Edison Project at Irvine, California location. This lease commenced on October 10, 2016 and will terminate on January 9, 2027 and requires the Company to pay for all property taxes, utilities and facility maintenance. The monthly base rental expense in 2018 is $18,077.  The Company subleases a portion of this facility to PPA Grand Johanna, LLC, a subsidiary sold to esVolta on December 4, 2017.  Rental income to Powin under the terms of the sublease is $4,120 per month in 2018 with annual rent increases through the lease term ending in 2027.  Under the terms of the sublease, Powin has the right to increase the base rent by an amount in proportion to the amount of added battery energy storage capacity relative to the existing battery energy storage capacity at then current market rates.

On September 27, 2017, the Company entered into a lease agreement for its project located in Stratford, Ontario. The Company leased 1 acre of land from an unrelated party. The lease term is for three years commenced upon commissioning and acceptance of the project, which occurred in March 2018. The annual rental expense is $30,100. The lease has term to renew two additional terms of 5 years each with nine months’ notice.  As discussed in note 3 Powin Energy Ontario Storage II, LP is no longer consolidated due to the sale to esVolta and as a result the lease is not included in the future minimum lease payment schedule below as of September 30, 2018.

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

Year ending September 30,
2019	$	437,673
2020		444,321
2021		397,211
2022		242,364
2023		249,639
Thereafter		863,448
Total	$	2,634,656

For the three months ended September 30, 2018 and 2017, total lease expense for all operating rents and leases was $62,160 and $130,481, respectively. For the nine months ended September 30, 2018 and 2017, total lease expense for all operating rents and leases was $278,558 and $354,092, respectively. These leases are also disclosed in Note 13, related party transactions.

Note 12:  Capital stock

The Company has one class of common stock.

Common Stock

On October 16, 2017, the Company issued an aggregate of 8,155,146 shares of common stock in satisfaction of certain outstanding indebtedness in the aggregate principal and accrued interest balance of $6,151,233. The fair market value of the common stock at time of conversion was $14,353,057. The $8,201,824 difference between the fair market value of the common stock and the balance of the principal and accrued interest was booked as loss on extinguishment of debt.

17

Warrants

On April 15, 2013, the Company entered into a Settlement Agreement and Mutual Release to settle a previously disclosed action as noted in our 8K filed on April 17, 2013. Pursuant to the Settlement Agreement, the Company issued a Warrant to Purchase Common Stock to Global Storage Group, LLC for 70,000 shares of the Company’s common stock at an exercise price of $25.00; and a Warrant to Purchase Common Stock to Virgil L. Beaston for 30,000 shares of the Company’s common Stock at an exercise price of $25.00. The exercise period of each Warrant is 60 months from the date of issuance and may be exercised in whole or in part at any time prior to April 15, 2018. As of the expiration date of April 15, 2018 none of the warrants have been exercised and have now expired.

					Average
			Weighted		Remaining
			average exercise		Contractual Life		Aggregate Intrinsic
	Warrants		price		(Years)		Value
Outstanding at December 31, 2017		100,000	$	25.00		0.4	$	-
Exercisable at December 31, 2017		100,000	$	25.00		0.4	$	-
Warrants granted		-		-		-		-
Warrants exercised		-		-		-		-
Warrants expired		100,000		25.00		-		-
Warrants forfeited		-		-		-		-
Outstanding at September 30, 2018		-	$	25.00		-	$	-
Exercisable at September 30, 2018		-	$	25.00		-	$	-

Note 13: Stock Options

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

In February 2011, the Company’s Board of Directors approved the adoption of the Powin Energy Corporation 2011 Stock Option Plan (“2011 Plan”) and submitted its ratification to the shareholders at the shareholders’ meeting held September 15, 2011, where the shareholders approved the 2011 Plan.  On September 15, 2011, the Company granted awards under the 2011 Plan in the form of incentive stock options to its key employees for 1,170,000 shares of common stock.  On August 6, 2013, the Company granted 1,640,000 stock options under the 2011 Plan to all employees. Awards are granted with an exercise price that approximates the market price of the Company’s common stock at the date of grant.

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

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

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

In June 2017, the Company’s Board of Directors approved the adoption of the Powin Energy Corporation 2017 Stock Option Plan (“2017 Plan”). During the year ended December 31, 2017 the Company granted awards under the 2017 Plan in the form of incentive stock options to its employees for a total of 2,041,603 shares of common stock.  Awards were granted with an exercise price ranging from $1.18 to $2.00, approximating the market price of the Company’s common stock at the date of each grant.  The stock options vesting provisions have various terms:1). Most 1/4 immediately, then 1/4 each of next 12 months, or 2). 1/3 immediately, then 1/3 each of next 12 months. or 3) fully vested immediately.

During the nine months ended September 30, 2018 the Company granted awards under the 2017 Plan in the form of incentive stock options to its employees for a total of 324,318 shares of common stock.  Awards were granted with an exercise price ranging from $2.01 to $3.00, approximating the market price of the Company’s common stock at the date of each grant.  The stock options vesting has various terms:1). Most 1/4 immediately, then 1/4 each of next 12 months, or 2). 1/3 immediately, then 1/3 each of next 12 months. or 3) fully vested immediately.

18

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

Dividend Yield	0	%
Expected volatility	140.10%-146.80	%
Risk-free interest rate	1.90%-2.92	%
Term in years	5.04-5.62

The Company has never paid a cash dividend and does not intend to pay cash dividends in the foreseeable future, so the dividend yield used in the calculation is 0%. The expected volatility is based on the daily historical volatility of comparative companies, measured over the expected term of the option.  The risk-free rate is based on the implied yield on a United States Treasury zero-coupon issue with a remaining term closest to the expected term of the option. The term of the option is the expiration as there is no ready market for employees to exercise and sell shares and to date no option has been exercised on the 2011 Plan, 2013 Plan and 2017 Plan.

A summary of option activity as is presented below:

	Number of Options			Wtd Avg. Exercise Price		Wtd Avg. Remaining Term		Exercisable		Intrinsic Value of Options
Outstanding at December 31, 2016		102,000		$	5.70		4.88		84,059	$	-
Granted		2,041,603			1.42		9.82
Forfeited/Expired		(15,000	)		3.50						-
Outstanding at December 31, 2017		2,128,603			1.61		9.54		674,432		1,338,418
Granted		324,318			2.10		9.44
Forfeited/Expired		(134,000	)		-						-
Outstanding at September 30, 2018		2,318,921		$	1.56		9.02		764,810	$	560,319

Stock option expense included in operating expense for the three months ended September 30, 2018 and 2017 is $212,300 and $108,894, respectively. Stock option expense included in operating expense for the nine months ended September 30, 2018 and 2017 is $760,308 and $132,454, respectively. As of September 30, 2018 and December 31, 2017, remaining unvested stock expenses amounted to $2,483,880 and $1,743,208, respectively.

Note 14:  Related Party Transactions

Rent expense related parties

The Company headquarter facilities located in Tualatin, Oregon are owned by Lu Pacific Properties, LLC, a related party controlled by the Lu family. Rent expenses were $53,968 and $53,120 for the three months ended September 30, 2018 and 2017, respectively. Rent expenses were $161,903 and $106,240 for the nine months ended September 30, 2018 and 2017, respectively. Rental rates are deemed to be and were derived by local market rates for the rents when the contracts were entered.

The Company’s facility in Irvine, California is owned by 3U Millikan, LLC, controlled by Xilong Zhu, a director of the Company. Rent expenses were $54,231 and $52,650 for the three months ended September 30, 2018 and 2017, respectively. Rent expenses were $122,337 and $157,950 for the nine months ended September 30, 2018 and 2017, respectively. Rental rates are deemed to be and were derived by local market rates for the rents when the contracts were entered.  The Company subleases a portion of this facility to PPA Grand Johanna, LLC, a subsidiary sold to esVolta on December 4, 2017.  Rental income to the Company under the terms of the sublease is $4,120 per month in 2018 with annual rent increases through the lease term ending in 2027.  Such rental income is recognized as net to rent expense.  Under the terms of the sublease, the Company has the right to increase the base rent by an amount in proportion to the amount of added battery energy storage capacity relative to the existing battery energy storage capacity at then current market rates.

Long-term debt related parties

The Company has long-term debt from related parties as disclosed in note 9.

Purchase from Related Parties

Yangzhou Finway Energy Tech Co. is owned 49% by the family of Joseph Lu, our CEO and a director of the Company, and 51% by Xilong Zhu, a director of the Company. The Company purchased equipment and parts from Yangzhou Finway Energy Tech Co. in the amount of $2,436,009 and $3,583 for the three months ended September 30, 2018 and 2017, respectively. The Company purchased equipment and parts from Yangzhou Finway Energy Tech Co. in the amount of $3,820,126 and $9,843 for the nine months ended September 30, 2018 and 2017, respectively. Amounts due to Yangzhou Finway Energy Tech Co. amounted to $3,315,527 and $1,309,946 at September 30, 2018 and December 31, 2017, respectively.

19

Included in raw materials as of September 30, 2018 is $1,113,720 of inventory located at Yangzhou Finway manufacturing facility which will be used in production of Stack equipment for planned shipments to our customers.

Quailhurst Vineyard Estates, LLC an Oregon limited liability company, is controlled by the Joseph Lu family. The Company purchased product from Quailhurst Vineyard Estates in the amount of $4,600 and $220 for the three months ended September 30, 2018 and 2017, respectively. The Company purchased product from Quailhurst Vineyard Estates in the amount of $15,100 and $3,177 for the nine months ended September 30, 2018 and 2017, respectively. Amounts due to Quailhurst Vineyard Estates amounted of $11,400 and $0 at September 30, 2018 and December 31, 2017, respectively.

Note 15: Subsequent events

 On October 10, 2018 the Company filed Schedule 13E-3 Amendment No. 4.  This Amendment No. 4 to the Issuer’s Rule 13E-3 Transaction Statement (“Transaction Statement”) is filed in connection with the Issuer’s going private transaction wherein the Issuer effected a 1-for-100 reverse stock split of its common stock, effective October 5, 2018.

Effective October 5, 2018, the Issuer completed a 1-for-100 reverse stock split of its outstanding common stock. In the reverse stock split, each 100 shares of the Issuer’s common stock was converted into one (1) share of common stock and holders thereafter of fractional shares became entitled to and received a cash payment in lieu of fractional shares in the amount of $176.00 for each pre-split share that became a fractional share.  As a result of the reverse stock split, shareholders who prior to the reverse stock split held less than 100 shares are no longer shareholders of the Issuer.

Immediately following the reverse stock split, the Issuer effected a 100-for-1 forward stock split for those shareholders who, following the reverse stock split, held at least one (1) whole share of common stock.

The reverse stock split resulted in the Issuer having 175 shareholders of record of its outstanding common stock. Accordingly, the Issuer has filed Form 15 contemporaneously with this amended Transaction Statement which immediately suspended the Issuer’s obligation to file periodic reports pursuant to Section 13 of the Securities Act of 1934, as amended, (“1934 Act”) and terminating the registration of the Issuer’s common stock under the 1934 Act.

Due to the above transactions, the Company’s total outstanding common shares decreased from 45,263,070 to 45,251,600. 

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

The following discussion and analysis should be read in conjunction with the audited consolidated financial statements and notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the year ended December 31, 2017 as filed with the Securities and Exchange Commission on April 16, 2018 and the unaudited condensed interim consolidated financial statements and notes thereto included in this Quarterly Report.

Overview

Incorporated in the State of Nevada, Powin Energy Corporation is a leading designer and developer of scalable battery energy storage solutions for utility-scale, commercial and industrial, and microgrid applications. We are focused on the rapidly growing advanced energy storage industry, and our Stack140 modular battery system features our patented Battery Pack Operating System (bp-OS) that provides critical insight into system functions and lifespan.  Our primary source of revenues derive from sales of our Stacks and energy storage systems.

Management Opportunities, Challenges and Risks

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

Critical Accounting Policies

Our significant accounting policies are summarized in Note 2 of our consolidated financial statements.  While all these significant accounting policies impact our financial condition and results of operations, we view certain of these policies as critical.  Policies determined to be critical are those policies that have the most significant impact on our financial statements and require management to use a greater degree of judgment and estimates.  Actual results may differ from those estimates.  Our management believes that given current facts and circumstances, it is unlikely that applying any other reasonable judgments or estimate methodologies would cause effect on our consolidated results of operations, financial position or liquidity for the periods presented in this report.

20

Results of Operations For the Three Months Ended September 30, 2018 and 2017

Revenues

Revenue for the three months ended September 30, 2018, increased $4,185,981 or 3,991.10% from $104,883 in the same period of 2017 to $4,290,864. The increase was due to the sale of energy storage products.

Cost of Sales and Gross Loss

Cost of sales for the three months ended September 30, 2018, increased $3,446,728 or 5,056.30%, from $68,167 in the same period of 2017 to $3,514,895 due to the reasons noted above.

Gross profit for the three months ended September 30, 2018, increased $739,253 or 2,013.43%, from a profit of $36,716 in the same period of 2017 to the profit of $775,969 due to the reasons noted above. 

Research and Development Expenses

Research and development expense for the three months ended September 30, 2018, increased $140,772 or 148.27%, from $94,945 in the same period of 2017 to $235,717. The change is due to the increase in the number of employees and Company resources in 2018 focused on Stack software and hardware technology research and development for the energy storage market.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the three months ended September 30, 2018, increased $787,046 or 55.24%, from $1,424,867 in the same period of 2017 to $2,211,913. Increase is primarily due to increased staffing costs for hiring new personnel and stock options granted to in 2018.

Interest Expense

Interest expense for the three months ended September 30, 2018, decreased $11,782 or 4.98%, from $236,463 in the same period of 2017 to $224,681. The decrease is due to some of the Company’s debt converted to common stock in October 2017.   

Provision for income taxes

Provision for income taxes for the three months ended September 30, 2018, decreased $4,655 or 100.00%, from $4,655 in the same period of 2017 to $0.

Net Loss

For the three months ended September 30, 2018, the Company had a net loss of $2,009,792 or $0.04 per share, compared to net loss of $1,672,762 or $0.05 per share for the same period of 2017.

Results of Operations For the Nine Months Ended September 30, 2018 and 2017

Revenues

Revenue for the nine months ended September 30, 2018, increased $14,131,576 or 4,676.70% from $302,170 in the same period of 2017 to $14,433,746. This increase was due to the sale of the energy storage product.

Cost of Sales and Gross Profit

Cost of sales for the nine months ended September 30, 2018, increased $12,887,210 or 1,213.69%, from $1,061,823 in the same period of 2017 to $13,949,032 due the reasons noted above. 

Gross profit for the nine months ended September 30, 2018, increased $1,244,367 or 163.81%, from the loss of $759,653 in the same period of 2017 to profit of $484,714 due the reasons noted above. 

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Research and Development Expenses

Research and development expense for the nine months ended September 30, 2018, increased $468,915 or 185.64%, from $252,598 in the same period of 2017 to $721,513. The change is due to the increase in the number of employees and Company resources in 2018 focused on Stack software and hardware technology research and development for the energy storage market.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the nine months ended September 30, 2018, increased $1,929,815 or 48.72%, from $3,960,907 in the same period of 2017 to $5,890,722. Increase is primarily due to increased staffing costs for hiring new personnel and stock options granted in 2018.

Interest Expense

Interest expenses for the nine months ended September 30, 2018, increased $137,219 or 32.58%, from $421,179 in the same period of 2017 to $558,398. The increase is due to interest on the Company’s debt.   

Provision for income taxes

Provision for income taxes for the nine months ended September 30, 2018, decreased $8,405 or 100.00%, from $8,405 in the same period of 2017 to $0.

Net Loss

For the nine months ended September 30, 2018, the Company had a net loss of $7,005,415 or $0.15 per share, compared to net loss of $5,344,790 or $0.14 per share for the same period of 2017.

Liquidity and Capital Resources

Cash used in operating activities was $3,480,557 for the nine months ended September 30, 2018 compared to $5,614,171 used in operating activities for the same period in 2017. The decrease of cash used in operating activities is mainly due to the sale of project assets and increased deferred revenue offset by repayment of accounts payable in 2018.

Cash used investing activities was $3,112,383 compared to cash used in investing activities of $4,767,526 during the nine months ended September 30, 2018 and 2017, respectively.  The decrease in cash used investing activities was due to the purchase of energy storage assets and equipment in 2017.

Cash provided by financing activities was approximately $3,432,140 for the nine months ended September 30, 2018, compared to $12,553,463 provided by financing activities for the same period in 2017. The decrease of cash provided by financing activities is due to reduction of debt borrowings in 2018.

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

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

Off Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Item 3.  Quantitative and Qualitative Disclosures about Market Risk.

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

22

Item 4.  Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our management has evaluated, under the supervision and with the participation of our principal executive and principal financial officers, the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (the “Exchange Act”).  Based on that evaluation, our principal executive and financial officers concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were not effective in ensuring that information required to be disclosed in our Exchange Act reports is (1) recorded, processed, summarized and reported in a timely manner, and (2) accumulated and communicated to our management, including our principal executive and financial officers, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

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

PART II.  OTHER INFORMATION

Item 1.  Legal Proceedings.

None

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

Equity Compensation Plan Information

During the period covered by this Report, the Company did not issue any shares of Common Stock in the form of equity compensation.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

We did not repurchase any of our Common Stock or other securities during the three-month period ended September 30, 2018.

Item 3.  Defaults Upon Senior Securities.

None

Item 4.  Mine Safety Disclosures.

Not Applicable.

Item 5.  Other Information.

None

Item 6.  Exhibits.

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

23

SIGNATURES

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

Dated: November 13, 2018

By:/s/ Joseph Lu

Chief Executive Officer

(Principal Executive Officer)

By:/s/ Geoffrey Brown

President

By:/s/ Joseph Lu

Chief Financial Officer

(Principal Financial Officer)

24

EX-31.1

Exhibit 31.1   Principal Executive Officer - Section 302 Certification

Certification of

Principal Executive Officer

Of Powin Energy Corporation

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

I, Joseph Lu, certify that:

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

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

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

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

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

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

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

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

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

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

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

Dated: November 13, 2018

By:/s/ Joseph Lu

Chief Executive Officer

(Principal Executive Officer)

EX-31.2

Exhibit 31.2 Principal Financial Officer - Section 302 Certification

Certification of

Principal Financial Officer

Of Powin Energy Corporation

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

I, Joseph Lu, certify that:

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

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

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

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

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

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

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

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

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

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

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

Dated: November 13, 2018

By:/s/ Joseph Lu

Chief Financial Officer

(Principal Financial Officer)

EX-32

Exhibit 32

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

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Powin Energy Corporation (the “Company”) on Form 10-Q for the quarter ended September 30, 2018, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned officers of the Company certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to such officer’s knowledge:

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

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

Dated:  November 13, 2018

By:/s/ Joseph Lu

Chief Executive Officer

(Principal Executive Officer)

By:/s/ Geoffrey Brown

President

By:/s/ Joseph Lu

Chief Financial Officer

 (Principal Financial Officer)

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2018	Nov. 13, 2018
Document and Entity Information [Abstract]
Entity Registrant Name	POWIN ENERGY CORP
Entity Central Index Key	0001468780
Document Type	10-Q
Trading Symbol	PWON
Document Period End Date	Sep. 30, 2018
Current Fiscal Year End Date	--12-31
Amendment Flag	false
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity's Reporting Status Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		45,251,600
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2018

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CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($)	Sep. 30, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 456,484	$ 3,496,629
Restricted cash		27,400
Accounts receivable, net	38,216	11,270
Inventories, net	2,423,184	310,564
Project assets, current		8,018,076
Tax receivable	18,151	294,862
Notes receivable	131,250	131,250
Prepaid expenses and other current assets	432,138	232,230
Total current assets	3,499,423	12,522,281
Project assets, non-current		8,018,076
Property and equipment, net	79,394	71,877
Investments in unconsolidated affiliates	8,372,575	475,263
Land use right, net	3,028,260
Intangible assets, net	310,424	236,754
Notes receivable	612,335	677,574
Total assets	15,902,411	22,001,825
Current liabilities:
Accounts payable	6,147,525	9,580,700
Accounts payable, related party	3,326,927	1,309,946
Tax payable	75,696
Deferred revenue	1,111,380	24,621
Accrued expenses	386,679	391,125
Current portion of interest payable	512,104	42,045
Current portion of long-term debt	3,651,250	1,350,472
Current portion of long-term debt, related party	5,891,328	3,159,516
Total current liabilities	21,102,889	15,858,425
Long-term debt		4,953,926
Long-term debt, related party		742,215
Interest payable		108,767
Other liabilities	671,382	58,500
Total liabilities	21,774,271	21,721,833
Stockholders' equity
Common stock, $0.001 par value, 575,000,000 shares Authorized; 45,263,070 and 45,263,070 shares issued and outstanding as of September 30, 2018 and December 31, 2017, respectively	45,264	45,264
Additional paid-in capital	45,284,991	44,524,683
Accumulated deficit	(51,280,405)	(44,274,990)
Accumulated other comprehensive income (loss)	78,290	(14,965)
Total stockholders' (deficit) equity	(5,871,860)	279,992
Total liabilities and stockholders' equity	$ 15,902,411	$ 22,001,825

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CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares	Sep. 30, 2018	Dec. 31, 2017
Statement of Financial Position [Abstract]
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, authorized	575,000,000	575,000,000
Common stock, issued	45,263,070	45,263,070
Common stock, outstanding	45,263,070	45,263,070

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CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Sales
Sales total	$ 4,290,864	$ 104,883	$ 14,433,746	$ 302,170
Cost of sales
Cost of sales total	3,514,895	68,167	13,949,032	1,061,823
Gross profit (loss)	775,969	36,716	484,714	(759,653)
Operating Expenses
Research and development	235,717	94,945	721,513	252,598
Selling, general and administrative	2,211,913	1,424,867	5,890,722	3,960,907
Total operating expenses	2,447,630	1,519,812	6,612,235	4,213,505
Operating loss	(1,671,661)	(1,483,096)	(6,127,521)	(4,973,158)
Other income (expenses)
Interest expense, net	(224,681)	(236,463)	(558,398)	(421,179)
Other income	(6,126)	51,452	(3,883)	57,952
Equity in loss of unconsolidated affiliates	(107,324)		(315,613)
Other expenses	(338,131)	(185,011)	(877,894)	(363,227)
Loss before taxes	(2,009,792)	(1,668,107)	(7,005,415)	(5,336,385)
Provision for income taxes		4,655		8,405
Net loss	$ (2,009,792)	$ (1,672,762)	$ (7,005,415)	$ (5,344,790)
Basic and diluted net loss per share (in dollars per share)	$ (0.04)	$ (0.05)	$ (0.15)	$ (0.14)
Weighted-average number of shares used on per share calculations:
Basic and diluted (in shares)	45,263,070	37,107,924	45,263,070	37,104,551
Product Sales [Member]
Sales
Sales total	$ 4,290,864	$ 240	$ 5,973,208	$ 42,432
Cost of sales
Cost of sales total	3,514,895	534	5,232,799	877,469
Revenue From Energy Storage Assets [Member]
Sales
Sales total		104,643	8,460,538	259,738
Cost of sales
Cost of sales total		$ 67,633	$ 8,716,233	$ 184,354

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CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Cash flows from operating activities:
Net loss	$ (2,009,792)	$ (1,672,762)	$ (7,005,415)	$ (5,344,790)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock based compensation			760,308	132,455
Depreciation and amortization			68,175	177,921
Non-cash interest expense				341,254
Impairment of inventory				851,206
Equity in loss of unconsolidated affiliate			315,613
Changes in operating assets and liabilities:
Accounts receivable			(26,946)	2,527
Notes and other receivables				(378,157)
Project assets			3,727,536
Inventories			(2,112,620)	95,822
Tax receivable			276,711
Prepaid expenses and other current assets			(199,908)	(329,802)
Accounts payable			(3,433,175)	(451,529)
Accounts payable, related party			2,016,981	(951,937)
Tax payable			75,696
Deferred revenue			1,086,759
Accrued expenses			969,728	240,859
Net cash used in operating activities			(3,480,557)	(5,614,171)
Cash flows from investing activities:
Proceeds of notes receivable			65,239		$ 202,703
Cash paid for purchase of intangible assets			(90,193)	(28,835)
Cash paid for purchase of property and equipment			(33,722)
Cash paid for purchase of land use rights			(3,053,707)
Purchase of energy storage assets and equipment				(4,738,691)
Net cash used in investing activities			(3,112,383)	(4,767,526)
Cash flows from financing activities:
Proceeds from third party borrowings			3,030,838	6,596,213
Payment on third party borrowings			(1,588,295)
Proceeds from related party borrowings			3,099,113	6,159,321
Payment on related party borrowings			(1,109,516)	(202,071)
Net cash provided by financing activities			3,432,140	12,553,463
Effect of foreign exchange on cash			93,255
Net increase (decrease) in cash, cash equivalents and restricted cash			(3,067,545)	2,171,766
Cash, cash equivalents and restricted cash, beginning of period			3,524,029	432,044	432,044
Cash, cash equivalents and restricted cash, end of period	$ 456,484	$ 2,603,810	456,484	2,603,810	$ 3,524,029
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid			224,500	130,000
Income taxes paid				3,750
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
Preferred stock converted to common stock				1,150,900
Property and equipment increase by accounts payable				10,384,605
Deconsolidation of third party debt			4,095,691
Equity method investment retained upon sale of 50% of subsidiary			$ 8,212,925

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CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Parenthetical)	Sep. 30, 2018
Statement of Cash Flows [Abstract]
Equity method investment, ownership percentage	50.00%

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Description of Business and History and Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2018

Description Of Business And History And Summary Of Significant Accounting Policies Abstract

Description of Business and History and Summary of Significant Accounting Policies

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

Description of Business and History 

Powin Energy Corporation (“Powin”, “Company”, “we”, “us”) is a leading producer, designer and developer of commercially proven, cost-competitive, safe and scalable lithium-ion based energy storage solutions for utilities and microgrid. We are incorporated in the State of Nevada and were founded in 1989 in Oregon.  Our primary product is the Stack140 (“Stack”), a modular, flexible, purpose-built battery string that is easily and cost-effectively scalable from a single unit to multiple megawatts of capacity.  We are focused on the rapidly growing advanced energy storage industry and deploying our Stack modular battery system which features our patented Battery Pack Operating System (“bp-OS”) software that provides critical insight into system functions and lifespan via our proprietary Battery Odometer and Warranty Tracker™ controls. 

For the periods presented the Company has the following subsidiaries: 

As described in this Report		As described in 2017 Form 10K
Legal entity name	Business  segment name	Legal entity name	Business segment  Name
Powin Energy  Corporation	Energy	Powin Energy  Corporation	Energy
Powin China Holdings 1, LLC	Energy
Powin Energy (Ningbo) Co., Ltd.	Energy
Powin Canada B.C. Ltd (2)	Energy	Powin Canada B.C. Ltd	Energy
	Energy	PPA Grand Johanna, LLC (1)	Energy
	Energy	Powin SBI, LLC (1)	Energy
	Energy	Don Lee BESS, LLC (1)	Energy
Powin Energy Ontario Storage II, LP (2)	Energy	Powin Energy Ontario Storage II, LP	Energy
Powin Energy Storage 2, Inc. (2)	Energy	Powin Energy Storage 2, Inc.	Energy
Powin Energy Ontario Storage,  LLC	Energy	Powin Energy Ontario Storage,  LLC	Energy

(1)	Sold in December 2017.
(2)	Sold 50% interest in March 2018.

In 2017, as part of the sale of our projects and pipelines, we acquired a 10% ownership stake in esVolta, LP (“esVolta”) a developer, owner and operator of utility-scale energy storage projects across North America. esVolta has entered a strategic long-term agreement with us under which we will be esVolta’s exclusive provider of battery storage systems. We did not record any impairment losses related to our equity method investment during the years ended December 31, 2017. For the nine months ended September 30, 2018, we recorded equity in loss of unconsolidated affiliates of $276,884 for our ownership percentage in the investee’s net loss and reduced our investment in equity method investee by this amount. As of September 30, 2018, the balance of investment in unconsolidated affiliates for esVolta is $198,379.

In December 2017 the Company entered into a purchase and sale agreement with esVolta for the sale of Powin Canada B.C. Ltd., the sole limited partner of Powin Energy Ontario Storage II, LP and sole shareholder of Powin Energy Storage 2, Inc.  Powin Canada B.C. Ltd through its subsidiaries holds the assets of an 8.8 MW / 40.8 MWh energy storage project located in Stratford, Ontario. Pursuant to the agreement, at closing esVolta paid to Powin an aggregate amount equal to 50.0% of the sum of $20,681,000 adjusted for working capital and debt balances at the time of closing for 50% of the ownership interests in Powin Canada B.C. Ltd.  Additionally, the purchase agreement has an option whereby esVolta, may purchase the remaining 50% ownership interests in Powin Canada B.C. Ltd. within one year of the original closing date of March 2018.  On March 29, 2018, we sold the 50% ownership stake in this previously consolidated entity, Powin Canada BC, Ltd to esVolta. We now account for our remaining 50% ownership in Powin Canada B.C., Ltd using the equity method.  In 2018 we recorded our investment in unconsolidated affiliates of $8,212,925 for our 50% ownership in Powin Canada B.C., Ltd. For the period from the date of deconsolidation to September 30, 2018 we recorded equity in loss of unconsolidated affiliates of $38,729 for our ownership percentage in the investee’s net loss and reduced our investment in equity method investee by this amount. As of September 30, 2018, the balance of investment in unconsolidated affiliates for Powin Canada B.C. Ltd. is $8,174,196.

In January 2018, the Company formed Powin China Holdings 1, LLC, an Oregon limited liability company (“Powin China”).  In March 2018, Powin Energy (Ningbo) Co., Ltd (“Powin Ningbo”) was established in the People’s Republic of China as a subsidiary of Powin China. In April 2018, Powin Ningbo purchased land in Ningbo Yuyao, China for 19,192,246 RMB ($3,053,707 USD) plus a performance deposit of 1,852,000 RMB ($295,083 USD). The land will be the site for the planned construction of a battery manufacturing facility.

The Company’s client base includes developers, utilities and providers in the energy storage industry sector.  Operations outside the United States of America are subject to risks inherent in operating under different legal systems and various political and economic environments.  Among the risks are changes in existing tax laws, possible limitations on foreign investment and income repatriation, government price or foreign exchange controls, and restrictions on currency exchange.

Basis of Presentation

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Powin Energy Corporation and its subsidiaries. All intercompany transactions and balances have been eliminated during consolidation. Investments in unconsolidated affiliates through which the Company exercises significant influence over but does not control the investee and is not the primary beneficiary of the investee’s activities are accounted for using the equity method. 

Foreign Currencies 

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

The reporting currency of the Company is the U.S. dollars. The results of operations and cash flows conducted in foreign currency are translated at average exchange rates during the period, and assets and liabilities are translated at the unified exchange rates at the balance sheet dates, and equity is translated at the historical exchange rates. As a result, amounts related to assets and liabilities reported on the statements of cash flows will not necessarily agree with changes in the corresponding accounts on the balance sheets. Translation adjustments resulting from this process are included in accumulated other comprehensive income in the statements of stockholders’ equity. Translation adjustments for the nine months ended September 30, 2018 and 2017 were $93,255 and $0, respectively. The cumulative translation adjustment and effect of exchange rate changes on cash, which was recorded as accumulated other comprehensive income (loss) on the balance sheet, as of September 30, 2018 and December 31, 2017 were $78,290 and $(14,965), respectively. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred.

Unaudited interim financial statements 

The accompanying unaudited consolidated balance sheet as of September 30, 2018, the consolidated statements of operations and condensed consolidated statements of comprehensive loss for the nine months ended September 30, 2018 and 2017 of cash flows for the nine months ended September 30, 2018 and 2017, and other information disclosed in the related notes are unaudited. The consolidated balance sheet as of December 31, 2017, was derived from our audited consolidated financial statements at that date. The accompanying condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes contained in our Form 10-K for the year ended December 31, 2017 filed with the Securities and Exchange Commission. The accompanying interim condensed consolidated financial statements and related disclosures have been prepared on the same basis as the annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments necessary for a fair statement of the results of operations for the periods presented. The condensed consolidated results of operations for any interim period are not necessarily indicative of the results to be expected for the full year or any other future year or interim period. 

Advertising 

The Company expenses the cost of advertising as incurred.  For the nine months ended September 30, 2018 and 2017, the amount charged to advertising expense was $118,590 and $24,175, respectively. 

Cash and Cash Equivalents 

The Company considers all highly liquid investments with original maturities of 90 days or less at the time of purchase to be cash equivalents. The cash deposits in U.S. financial institutions exceed the amounts insured by the U.S. government. The standard insurance amount is $250,000 per depositor, per insured bank. Non-performance by these institutions could expose the Company to losses for amounts in excess of insured balances. At September 30, 2018 and December 31, 2017, the Company’s bank balances exceeded insurances balances by $194,672 and $2,862,505, respectively. At September 30, 2018 and December 31, 2017, the Company had no cash equivalents. 

Inventories 

Inventory is reported at the lower of cost (first-in, first-out method) or net realizable value.  The Company capitalizes applicable direct and indirect costs incurred in the Company’s manufacturing operations to bring its products to a sellable state. These costs include direct material, direct labor, and indirect manufacturing costs, including depreciation and amortization. Inventories consist primarily of containers with partially or fully completed energy storage components, including batteries, inverters and battery management hardware and software. 

As of September 30, 2018 and December 31, 2017, the components of inventories were as follows: 

	September 30, 2018			December 31, 2017
Raw materials	$	2,837,485		$	543,373
Finished goods		1,126,489			1,307,981
Reserve for slow moving and obsolete inventory		(1,540,790	)		(1,540,790	)
Inventories, net	$	2,423,184		$	310,564

We regularly review the cost of inventories against their estimated net realizable value and record write-downs if any inventories have costs in excess of their net realizable values. We also regularly evaluate the quantities and values of our inventories in light of current market conditions and trends, among other factors, and record write-downs for any quantities in excess of demand or for any obsolescence. This evaluation considers the use of Stacks in our systems business, expected demand, anticipated sales prices, strategic raw material requirements, new product development schedules, the effect new products might have on the sale of existing products, product obsolescence, product merchantability, and other factors. Market conditions are subject to change, and actual consumption of our inventory could differ from forecasted demand. 

Included in raw materials as of September 30, 2018 is $1,113,720 of inventory located at Yangzhou Finway manufacturing facility which will be used in production of Stack equipment for planned shipments to our customers. 

Based on our assessment, $0 and $851,206 impairment expenses for inventories were recorded in cost of sales during the nine months ended September 30, 2018 and 2017, respectively. 

Intangible Assets 

Our intangible assets include websites, patents, and trademarks. Intangible assets that are subject to amortization are amortized using the straight-line method over their estimated period of benefit, ranging from 3 to 5 years. We evaluate the recoverability of intangible assets periodically by taking into account events or circumstances that may warrant revised estimates of useful lives or that indicates the asset may be impaired. Based on this assessment, no impairment expenses for intangible assets were recorded in operating expenses during the nine months ended September 30, 2018 and 2017. Intangible assets amounted $310,424 and $236,754 as of September 30, 2018 and December 31, 2017, respectively. Amortization expenses amounted to $16,523 and $2,041 for the nine months ended September 30, 2018 and 2017, respectively. 

Equity Method Investments 

We account for our unconsolidated venture using the equity method of accounting. As part of this evaluation, we consider our participating and protective rights in the venture as well as its legal form. We use the equity method of accounting for our investments when we have the ability to significantly influence, but not control, the operations or financial activities of the investee. We record our equity method investments at cost and subsequently adjust their carrying amount each period for our share of the earnings or losses of the investee and other adjustments required by the equity method of accounting. Distributions received from our equity method investments are recorded as reductions in the carrying value of such investments and are classified on the consolidated statements of cash flows pursuant to the cumulative earnings approach. Under this approach, distributions received are considered returns on investment and are classified as cash inflows from operating activities unless our cumulative distributions received, less distributions received in prior periods that were determined to be returns of investment, exceed our cumulative equity in earnings recognized from the investment. When such an excess occurs, the current period distributions up to this excess are considered returns of investment and are classified as cash inflows from investing activities. 

We monitor our equity method investments, which are included in “Investment in unconsolidated affiliate” in the accompanying consolidated balance sheets, for impairment and record reductions in their carrying values if the carrying amount of an investment exceeds its fair value. An impairment charge is recorded when such impairment is deemed to be other-than-temporary. To determine whether impairment is other-than temporary, we consider our ability and intent to hold the investment until the carrying amount is fully recovered. Circumstances that indicate an other-than temporary impairment may have occurred include factors such as decreases in quoted market prices or declines in the operations of the investee. The evaluation of an investment for potential impairment requires us to exercise significant judgment and to make certain assumptions. The use of different judgments and assumptions could result in different conclusions. 

In 2017, as part of our sale of our projects and pipeline, we acquired a 10% ownership stake in esVolta, As a result, our investment in unconsolidated affiliates has balance of $475,263 as of December 31, 2017. We did not record any impairment losses related to our equity method investment during the years ended December 31, 2017. In March 2018, we sold a 50% ownership stake in a previously consolidated entity, Powin Canada B.C., Ltd. to esVolta. We now account for our remaining 50% ownership in Powin Canada B.C., Ltd. using the equity method.  In 2018 we recorded our investment in unconsolidated affiliates of $8,212,925 for our 50% ownership in Powin Canada B.C., Ltd. 

For the nine months ended September 30, 2018 we recorded equity in loss of unconsolidated affiliates of $315,613 for our ownership percentage in the investee’s net loss and reduced our investment in equity method investee by this amount. As of September 30, 2018, the balance of investment in unconsolidated affiliates is $8,372,575. 

Stock-Based Compensation 

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

The Powin Energy Corporation 2017 Equity Incentive Plan (“2017 Plan”) stipulates how directors, officers, employees, and consultants of Powin Energy Corp (including any of its subsidiaries) are eligible to participate in various forms of share-based compensation.  The 2017 Plan is administered by the compensation committee of our board of directors (or any other committee designated by our board of directors), which is authorized to, among other things, determine recipients of grants, exercise price and vesting schedule of the awards made under the 2017 Plan. The 2017 Plan provides for the grant of incentive stock options, non-qualified stock options, stock appreciation rights, restricted shares, restricted stock units, performance units, cash incentive awards, performance compensation awards, and other equity-based and equity-related awards. In addition, the shares underlying any forfeited, expired, terminated, or canceled awards, or shares surrendered as payment for taxes required to be withheld, become available for new award grants. We may not grant awards under the 2017 Plan after 2027, which is the tenth anniversary of the 2017 Plan’s approval by our stockholders. As of September 30, 2018, we had 4,134,079 shares available for future issuance under the 2017 Plan. 

Land Use Rights 

All urban land in China is owned by the State. Pursuant to Interim Regulations of the People’s Republic of China Concerning the Assignment and Transfer of the Right to the Use of the State-owned Land in the Urban Areas, which became effective on May 19, 1990, individuals and companies are permitted to acquire rights to use urban land or land use rights for specific purposes, including residential, industrial and commercial purposes. The land use rights are granted for a period of 70 years for residential purposes, 50 years for industrial purposes and 40 years for commercial purposes. These periods may be renewed at the expiration of the initial and any subsequent terms. Upon approval by both the land administrative authorities and city planning authorities, industrial parcel uses may be converted to other uses, and the duration and other clauses in the land use right granting agreement will be revised to match the new use. Granted land use rights are transferable and may be used as security for borrowings and other obligations. We have received the necessary land use right certificates for the properties described under Note 7. 

Reclassifications 

Certain prior year amounts have been reclassified to conform to the current year presentation. These reclassifications have no impact on our consolidated net earnings, financial position or cash flows. 

Recent Accounting Pronouncements 

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606), which amends the existing accounting standards for revenue recognition. The new guidance provides a new model to determine when and over what period revenue is recognized. Under this new model, revenue is recognized as goods or services are delivered in an amount that reflects the consideration we expect to collect. In March 2016, the FASB issued an ASU, Revenue from Contracts with Customers: Principal versus Agent Considerations (Reporting Revenue Gross versus Net), which clarifies the principal versus agent guidance in the new revenue recognition standard. In April 2016, the FASB issued another ASU, Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing, which clarifies the guidance on accounting for licenses of intellectual property and identifying performance obligations in the new revenue recognition standard. In May 2016, the FASB issued another ASU, Revenue from Contracts with Customers: Narrow-Scope Improvements and Practical Expedient, which clarifies the transition, collectability, noncash consideration and the presentation of sales and other similar taxes in the new revenue recognition standard. As an emerging growth company, the guidance is effective for fiscal years beginning after December 15, 2018; early adoption is permitted for periods beginning after December 15, 2016. The new standard is required to be applied retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying it recognized at the date of initial application. We have not yet selected a transition method and are evaluating the impact of adopting this guidance. 

In February 2018, the FASB issued ASU 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220) – Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, to allow entities to reclassify the income tax effects of the Tax Act on items within accumulated other comprehensive income to retained earnings. ASU 2018-02 is effective for fiscal years and interim periods within those years beginning after December 15, 2018, and early adoption is permitted. We are currently evaluating the impact ASU 2018-02 will have on our consolidated financial statements and associated disclosures.

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Going Concern

9 Months Ended

Sep. 30, 2018

Going concern [Abstract]

Going Concern

Note 2: Going Concern 

The Company sustained a net loss $7,005,415 and $5,344,790 during the nine months ended September 30, 2018 and 2017. The Company has accumulated deficit of $51,280,405 and $44,274,990 as of September 30, 2018 and December 31, 2017, respectively. The company has working capital deficit of $17,603,466 and working capital of $3,336,144 as of September 30, 2018 and December 31, 2017, respectively. The Company also has notes payable to unrelated parties due within 12 months amounting $3,651,250 and $1,350,472 as of September 30, 2018 and December 31, 2017, respectively. The Company’s continuation as a going concern is dependent on its ability to generate sufficient cash flows from operations to meet its obligations and/or obtain additional financing, as may be required. The above conditions raise substantial doubt about the Company’s ability to continue as going concern.

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

Management has assessed the Company’s ability to continue as a going concern as of the balance sheet date, and up to and including the financial statement issuance date. The assessment of a company’s ability to meet its obligations is inherently judgmental. Without additional funding, the company may not have sufficient available cash to meet its obligations coming due in the ordinary course of business within one year of the financial statement issuance date. However, the Company has historically been able to successfully secure funding to meet its obligations as they become due. The following conditions were considered in management’s evaluation of going concern:

· In March 2018, the Company completed a 8.8 MW / 40.8 MWh Battery Energy Storage System connected to a Canadian utility and sold a 50% interest in the project to esVolta. The project is the largest battery facility in Canada and illustrates the state of lithium-ion as a grid-scale technology.  esVolta has an option to purchase the remaining 50% interest in the project by March 29, 2019.

· Management is actively in discussions with several parties regarding various forms of funding, which if successful, would mitigate any going concern risks within one year from the date of issuance of its financial statements for the nine months ended September 30, 2018.

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Project Assets

9 Months Ended

Sep. 30, 2018

Project Assets [Abstract]

Project Assets

Note 3: Project Assets

Project assets primarily consist of costs related to battery energy storage projects in various stages of development that are capitalized prior to the completion of the sale of the project, including projects that may have begun commercial operation under power purchase agreements and are actively marketed and intended to be sold. These project related costs include costs for land, development, and construction of a battery energy storage system. Development costs may include legal, consulting, permitting, transmission upgrade, interconnection, and other similar costs. Once we enter into a definitive sales agreement, we classify such project assets as current, or non-current if the purchase option is greater than one year, until the sale is completed, and we have met all of the criteria to recognize the sale as revenue. If a project is completed and begins commercial operation prior to the closing of a sales arrangement, the completed project will remain in project assets until closing of sale. We present all expenditures related to the development and construction of project assets, whether fully or partially owned, as a component of cash flows from operating activities.

We review project assets for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. We consider a project commercially viable or recoverable if it is anticipated to be sold for a profit once it is either fully developed or fully constructed. We consider a partially developed or partially constructed project commercially viable or recoverable if the anticipated selling price is higher than the carrying value of the related project assets. We examine a number of factors to determine if the project is expected to be recoverable, including whether there are any changes in environmental, ecological, permitting, market pricing, or regulatory conditions that may impact the project. Such changes could cause the costs of the project to increase or the selling price of the project to decrease. If a project is not considered recoverable, we impair the respective project assets and adjust the carrying value to the estimated fair value, with the resulting impairment recorded within “Selling, general and administrative” expense.

Energy storage systems business sales arrangements in which we construct a battery power system for a customer on land that is controlled by the customer and has not been previously controlled by Powin, are accounted for under ASC 605-35. For such sales arrangements, we use the completed contract method as our standard accounting policy since we are unable to reliably estimate the costs to complete the services or the total amount of the contract during construction.  Under the completed contract method we recognize all of the revenue and profit associated with a project only after the project has been completed and collectability is reasonably assured under the terms of the sales contract.  In applying the completed contract method, we recognize income only when a contract is completed or substantially completed, such as when the remaining costs to be incurred are not significant.  Under this method costs incurred are reflected on the balance sheet under project assets.

Project Assets	September 30, 2018		December 31, 2017
Powin Energy Ontario Storage II - 8.8 MW / 40.8 MWh energy storage project located in Stratford, Ontario	$	-	$	16,036,152
Total project assets	$	-	$	16,036,152

On December 4, 2017 the Company entered into a purchase and sale agreement with esVolta for the sale of Powin Canada B.C. Ltd., the sole limited partner of Powin Energy Ontario Storage II, LP and sole shareholder of Powin Energy Storage 2, Inc.  At closing, esVolta paid to Powin an aggregate amount equal to 50.0% of the sum of $20,681,000 adjusted for working capital and debt balances at the time of closing for 50% of the ownership interests in Powin Canada B.C. Ltd.  Closing occurred March 29, 2018, subsequent to date of project completion and commissioning. The Company lost control of Powin Canada B.C. Ltd upon closing and accounted for this transaction as deconsolidation of a subsidiary during the quarter ended September 30, 2018. Powin Canada B.C. Ltd through its subsidiaries holds the assets of an 8.8 MW / 40.8 MWh energy storage project located in Stratford, Ontario under development and included in project assets as of December 31, 2017.  Based on this, the 50% of the total project asset is presented as current asset, and the remaining 50% is presented as non-current asset as of December 31, 2017. Additionally, the purchase agreement has an option whereby esVolta may purchase the remaining 50% ownership interests in Powin Canada B.C. Ltd. within one year of the original closing date of March 29, 2018.

In March 2018, the Company recognized a net loss of $428,001 related to the deconsolidation of the subsidiary Powin Canada B.C., Ltd.   There was no gain or loss recognized related to the remeasurement of our 50% retained investment in the former subsidiary Powin Canada B.C., Ltd.  The $428,001 net loss related to deconsolidation is shown as a component of gross margin, equals to revenue from energy storage assets in the amount of $8,288,232, net of cost from energy storage assets in the amount of $8,716,233.  The valuation used to measure the fair value of our direct retained 50% investment in Powin Canada B.C., Ltd was based on the market approach.  Estimating the fair value of the noncontrolling interest we obtain begins with the valuation of the entire energy storage project being sold to the customer net of any associated debt.  Such valuation generally uses a market based valuation technique.  Under the market approach the cash received of $8,288,232 for the 50% interest sold approximates the retained 50% equity method investment of $8,212,925.  The Company retained a 50% ownership interest in the deconsolidated entity and will continue to have involvement in the operations of the entity with the acquiring entity esVolta, a related party in which Powin Energy Corporation holds a 10% ownership interest in.  The deconsolidated entity Powin Canada B.C., Ltd will continue to be a related party due to our remaining 50% ownership interest which is accounted for under the equity method of accounting. Since the transaction resulted in a loss, the Company recognized the total loss of $428,001 and did not defer the 10% loss from related party.

In June 2018, the Company recognized revenue of $172,306 from proceeds received from esVolta after including final working capital adjustments related to the Stratford, Ontario project and the resulting impact on the final sales price.

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Tax Payable

9 Months Ended

Sep. 30, 2018

Tax Payable

Tax Payable

Note 4: Tax Payable 

Tax payable as of September 30, 2018 is the GST/HST tax payable of $75,696. The GST/HST tax payable represents net amounts due from the Canada Revenue Agency (CRA) for Goods and Services Tax / Harmonized Sales Tax (GST/HST) on taxable goods and services purchased or sold in Canada.  The Company is registered for GST/HST with the CRA and files periodic tax returns for each reporting period listing the amount of GST/HST collected during the reporting period along with the amount of input tax credits claimed.  The net tax for each reporting period is the difference between the GST/HST charged on taxable supplies and the GST/HST paid on business purchases and expenses (input tax credits). This resulted in a GST/HST payable as of September 30, 2018, which occurs when the Company has collected more GST/HST than we paid. GST/HST tax payable at September 30, 2018 and December 31, 2017 is $75,696 and $0, respectively.

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Notes Receivable

9 Months Ended

Sep. 30, 2018

Receivables [Abstract]

Notes Receivable

Note 5: Notes Receivable 

Notes receivable consist of the following:

	September 30, 2018				December 31, 2017
	Current		Non Current		Current		Non Current
On October 3, 2016, the Company issued a promissory note to Rolland Holding Company LLC, an unrelated party. The principal amount is $800,000 and the interest rate is 5%, due on November 21, 2024.	$	100,000	$	549,835	$	100,000	$	615,074
On October 3, 2016, the Company issued a promissory note to Powin Mexico, an unrelated party. The principal amount is $125,000 with no interest rate, due on December 3, 2020.		31,250		62,500		31,250		62,500
	$	131,250	$	612,335	$	131,250	$	677,574

Effective October 3, 2016 (see Note 15), the Company entered into a Stock Purchase Agreement with Powin Industries, SA de CV (“Powin Mexico”) and Rolland Holding Company, LLC (“Rolland”).  At Closing, Rolland made a cash payment of $99,000 and delivered to the Company (i) its promissory note in the principal amount $100,000 bearing interest at 4% per annum with principal and interest payable in twelve (12) equal monthly installments (“Short Term Note”); and (ii) its promissory note in the principal amount of $800,000 bearing interest at 5% per annum with principal and interest payable in ninety-nine (96) equal monthly installments (“Long Term Note”). The interest rate on the Long Term Note will be renegotiated if and when the Prime Rate for the U.S reaches 5%. In addition, Powin Mexico delivered to the Company a non-interest bearing promissory note in the amount of $125,000 (“Powin Mexico Note”) which calls for four (4) equal monthly installments of $31,250 on each of December 31, 2017, December 31, 2018, December 31, 2019 and December 31, 2020. The Powin Mexico Note represents a compromised amount representing the difference between the amount of the Powin Mexico accounts receivable and the amount of the Powin Mexico accounts payable owing to the Company. Amounts due under the Short Term Note, the Long Term Note and the Powin Mexico Note, respectively, may be accelerated upon a failure to pay amounts due thereunder when due, unless waived or cured. The total amount collected under these notes receivable during 2017 is $202,703. The Company recognized interest income of $39,566 for the year ended December 31, 2017.  The total amount collected under these notes receivable for the nine months ended September 30, 2018 is $75,000. The Company recognized interest income of $25,735 for the nine months ended September 30, 2018.

The Company has performed an analysis of the notes receivable balance under ASC 810-10 guidance with respect to accounting for variable interest entities (“VIE”), and has determined the Company lacks the power to make key operating decisions considered to be most significant to the VIE, and is therefore not considered to be the primary beneficiary in this transaction.

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Property and Equipment, net

9 Months Ended

Sep. 30, 2018

Property, Plant and Equipment [Abstract]

Property and Equipment, net

Note 6: Property and Equipment, net 

The components of property and equipment were as follows:
	September 30, 2018			December 31, 2017
Equipment	$	76,662		$	50,385
Leasehold improvements		7,564			7,564
Construction in progress		7,445			-
Computers		99,365			99,365
Vehicles		32,983			32,983
Accumulation depreciation		(144,625	)		(118,420	)
Property and equipment, net	$	79,394		$	71,877

For the three months ended September 30, 2018 and 2017, depreciation of property and equipment amounted $8,482 and $64,790, respectively. For the nine months ended September 30, 2018 and 2017, depreciation of property and equipment amounted $26,205 and $175,880, respectively.

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Land Use Rights, net

9 Months Ended

Sep. 30, 2018

DeferredTaxAssetsOtherCurrent

Land Use Rights, net

 Note 7: Land Use Rights, net 

The Company’s land use rights consist of the following:
	September 30, 2018			December 31, 2017
Cost of land use rights	$	3,053,707		$	-
Accumulation amortization		(25,447	)		-
Land use rights, net	$	3,028,260		$	-

In April 2018, Powin Ningbo purchased land in Ningbo Yuyao, China for 19,192,246 RMB ($3,053,707 USD). The land will be the site for the planned construction of a battery manufacturing facility for industrial use. Land use rights are stated at cost less accumulated amortization. Amortization is provided using the straight-line method over the terms of the lease of 50 years obtained from the relevant PRC land authority.

For the three months ended September 30, 2018 and 2017, amortization of land use rights amounted $5,872 and $0, respectively. For the nine months ended September 30, 2018 and 2017, amortization of land use rights amounted $25,447 and $0, respectively

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Other Receivable

9 Months Ended

Sep. 30, 2018

Amount received in first closing as per amendment of agreement

Other Receivable

Note 8: Other Receivable

The Stock Purchase Agreement for the sale of Q Pacific Corporation (“QPM”) in 2016 contains a provision whereby Powin is due 35% of the annual EBITDA of QPM for fiscal years 2017, 2018 and 2019.  The amount calculated under this agreement and due to Powin is $0 for nine months ended September 30, 2018.  The Company records amounts earned under this agreement to other income and other current assets. The amount due of $109,074 as of December 31, 2017 was collected in March 2018.

The Company has performed an analysis of the notes receivable balance under ASC 810-10 guidance with respect to accounting for variable interest entities (“VIE”), and has determined the Company lacks the power to make key operating decisions considered to be most significant to the VIE, and is therefore not considered to be the primary beneficiary in this transaction.

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Loss Per Share

9 Months Ended

Sep. 30, 2018

Earnings Per Share [Abstract]

Loss Per Share

Note 9: Loss Per Share 

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

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

	For the nine months ended September 30,
	2018			2017
Net loss attributable to Powin Energy Corporation (A)	$	(7,005,415	)	$	(5,344,790	)
Weighted average outstanding shares of  common stock (B)		45,263,070			37,104,551
Dilutive effect of securities		-			-
Common stock and common stock equivalents (C)		45,263,070			37,104,551
Loss per share
Basic (A/B)	$	(0.15	)	$	(0.14	)
Diluted (A/C)	$	(0.15	)	$	(0.14	)

The Company has 2,318,921 shares and 2,128,603 shares of outstanding stock options as of September 30, 2018 and December 31, 2017, respectively.

 On April 15, 2013, the Company entered into a Settlement Agreement and Mutual Release to settle a previously disclosed action as noted in our 8K filed on April 17, 2013. Pursuant to the Settlement Agreement, the Company issued a Warrant to Purchase Common Stock to Global Storage Group, LLC for 70,000 shares of the Company’s common stock at an exercise price of $25.00; and a Warrant to Purchase Common Stock to Virgil L. Beaston for 30,000 shares of the Company’s common Stock at an exercise price of $25.00. The exercise period of each Warrant is 60 months from the date of issuance and may be exercised in whole or in part at any time prior to April 15, 2018. As of the expiration date of April 15, 2018 none of the warrants have been exercised and have now expired.

The following sets forth the number of shares of common stock underlying if all outstanding options, warrants, and convertible debt were converted as of September 30, 2018 and December 31, 2017: 

	September 30, 2018		December 31, 2017
Warrants		-		100,000
Stock options		2,318,921		2,128,603
		2,318,921		2,228,603

For the nine months ended September 30, 2018 and 2017, the effect of warrants and stock options are excluded from loss per share because their impact is anti-dilutive since the company has a net loss both years.

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Long-term Debt

9 Months Ended

Sep. 30, 2018

Debt Disclosure [Abstract]

Long-term Debt

Note 10: Long-term Debt 

The total carrying value of long-term debt, including current and non-current classifications, was as follows:

	September 30, 2018				December 31, 2017
	Current		Non Current		Current		Non Current
Loan from a third party, originating March 16, 2017, due March 16, 2019, at 6% interest, with a security interest in the Company’s ownership stake in Powin Canada B.C. Ltd and a $1 million personal guarantee from Joseph Lu. Subject to meeting the requirements of a qualified financing event within 24 months of the date of this note, the note holder will have the right to convert the note balance into offered securities. The first $1 million of the note balance is eligible to be converted at 90% of the price paid per share under the qualified financing, and the remaining balance at the same price per share paid by the other participants.	$	2,000,000	$	-	$	-	$	2,000,000
Loan from a third party, originating September 13, 2017, due September 14, 2018, at 10% interest, with no collateral.  The loan was extended on September 14, 2018 with a new maturity date of June 14, 2019.		150,000		-		150,000		-
Loan from a third party, originating September 26, 2017, due September 27, 2020 at 8.75% interest. The loan is secured by Powin Energy Ontario Storage II, LP and guaranteed by Powin Canada B.C. Ltd. (a)		-		-		1,200,472		2,953,926
Loan from a third party, originating July 17, 2018, due September 16, 2018, at 18% interest, with personal guarantee from Joseph Lu. The loan was extended on September 16, 2018 with a new maturity date of December 31, 2018.		746,891		-		-		-
Loan from a third party, originating July 17, 2018, due September 16, 2018, at 18% interest, with personal guarantee from Joseph Lu. The loan was extended on September 16, 2018 with a new maturity date of December 31, 2018.		306,225		-		-		-
Loan from a third party, originating July 17, 2018, due September 16, 2018, at 18% interest, with personal guarantee from Joseph Lu. The loan was extended on September 16, 2018 with a new maturity date of December 31, 2018.		448,134		-		-		-
Total long-term debt	$	3,651,250	$	-	$	1,350,472	$	4,953,926

For the three months ended September 30, 2018 and 2017, interest expense related to short-term and long-term debt amounted to $102,278 and $52,858 respectively.  For the nine months ended September 30, 2018 and 2017, interest expense related to long-term debt amounted to $277,261 and $80,075, respectively.  Additionally, $92,052 was capitalized in project assets in 2018 prior to the deconsolidation of Powin Canada B.C., Ltd. 

(a) As discussed in note 3, Powin Energy Ontario Storage II, LP is no longer consolidated due to the sale to esVolta and as a result the loan balance is shown as $0 as of September 30, 2018.

 Long-term debt related party

	September 30, 2018						December 31, 2017
	Current			Non Current			Current			Non Current
On May 31, 2017, the Company renewed two loans from Lu Pacific Properties, LLC. The principal amount is $150,000 and the annual interest rate is 6%, due on May 31, 2018, with no collateral. As of September 30, 2018, accrued interest is $22,101. Interest expense amounted to $7,149 for the nine months ended September 30, 2018.  The loan was renewed on May 31, 2018 with a new maturity date of May 31, 2019.		$	150,000		$	-		$	150,000		$	-
Loan originating July 5, 2016, due July 4, 2017, at a 6% annual interest rate, with no collateral On October 31, 2017, 3U Trading note transfer to Joseph Lu per agreement Principal and accrued interest may be converted into preferred stock. As of September 30, 2018, accrued interest is $0.  Interest expense amounted to $2,987 for the nine months ended September 30, 2018. The loan was paid off on January 19, 2018.			-			-			1,009,516			-
On October 26, 2016, the Company secured a loan from Lu Pacific Properties, LLC. The principal amount is $2,000,000, and the annual interest rate is 7%, due on October 26, 2018, secured by Company’s intellectual property. As of September 30, 2018, accrued interest is $71,694. Interest expense amounted to $104,713 for the nine months ended September 30, 2018. The loan was renewed on October 25, 2018, with a new maturity date of November 30, 2018.			2,000,000			-			2,000,000			-
On January 26, 2017, the Company borrowed the sum of $1,000,000 from Joseph Lu, and issued its note in the principal amount of $1,000,000, with an annual interest rate is 7%, due on January 26, 2019. The note is secured by the Company’s intellectual property. As of September 30, 2018, accrued interest is $51,955. Interest expense amounted to $38,860 for the nine months ended September 30, 2018. Partial of the Note, $247,785 principal was converted to common stock on October 16, 2017.			742,215			-			-			742,215
On March 14, 2018, the Company secured a loan from Joseph Lu. The principal amount is $585,730 and the annual interest rate is 12%, due in May 14, 2018, secured by 100% of equity of Powin China. As of September 30, 2018, accrued interest is $37,169. Interest expense amounted to $37,169 for the nine months ended September 30, 2018.  The loan was renewed with a new maturity date of December 31, 2018.			585,730			-			-			-
On April 13, 2018, the Company secured a loan from Mei-yi Lu due June 12, 2018 at 36% interest, with no collateral. The loan was renewed and due upon holder request, at 12% interest. As of September 30, 2018, accrued interest is $59,573. Interest expense amounted to $59,573 for the nine months ended September 30, 2018.			400,000			-			-			-
On April 13, 2018, the Company secured a loan from Lu Pacific Properties, LLC due June 12, 2018 at 36% interest, with no collateral. The loan was renewed and is due November 30, 2018, at 12% interest. As of September 30, 2018, accrued interest is $43,190.  Interest expense amounted to $43,190 for the nine months ended September 30, 2018.			290,000			-			-			-
On July 13, 2018, the Company secured a loan from J. Lu Investment, LLC due August 1, 2018 at 36% interest, with no collateral. On August 1, 2018 the loan was renewed and due upon holder request, at 7% interest. As of September 30, 2018, accrued interest is $10,605.  Interest expense amounted to $10,605 for the nine months ended September 30, 2018.			700,000			-			-			-
On August 13, 2018, the Company secured a loan from Danny Lu due August 9, 2019 at 12% interest, with no collateral. As of September 30, 2018, accrued interest is $1,611.  Interest expense amounted to $1,611 for the nine months ended September 30, 2018.			100,000			-			-			-
On August 14, 2018, the Company secured a loan from Geoffrey Brown due August 9, 2019 at 12% interest, with no collateral. As of September 30, 2018, accrued interest is $1,578.  Interest expense amounted to $1,578 for the nine months ended September 30, 2018.			100,000			-			-			-
On September 10, 2018, the Company secured a loan from Joseph Lu due March 10, 2019 at 6% interest, secured by 100% of equity of Powin China. As of September 30, 2018, accrued interest is $77.  Interest expense amounted to $77 for the nine months ended September 30, 2018.			23,383			-			-			-
On September 28, 2018, the Company secured a loan from Meiyi Lu due upon holder request at 12% interest, with no collateral. As of September 30, 2018, accrued interest is $789.  Interest expense amounted to $789 for the nine months ended September 30, 2018.			800,000			-			-			-
Total		$	5,891,328		$	-		$	3,159,516		$	742,215

Interest expense related to loans from related parties amounted to $130,811 and $72,686 for the three months ended September 30, 2018 and 2017, respectively. Interest expense related to loans from related parties amounted to $308,531 and $130,250 for the nine months ended September 30, 2018 and 2017, respectively. 

Schedule of long term debt:

	December 31, 2017 Balance		Borrowed		Paid			Deconsolidated			Converted		September 30, 2018 Balance
Third party note, March 16, 2017	$	2,000,000	$	-		-		$	-		$	-	$	2,000,000
Third party note, September 26, 2017		4,154,398		-		(58,707	)		(4,095,691	)		-		-
Third party note, June 13, 2017		150,000		-		-			-			-		150,000
Third party note, April 17, 2018				1,529,588		(1,529,588	)		-			-		-
Third party note, July 17, 2018				746,891		-			-			-		746,891
Third party note, July 17, 2018				306,225		-			-			-		306,225
Third party note, July 17, 2018				448,134		-			-			-		448,134
Renewal of two notes from Lu Pacific Properties, LLC, May 31, 2017		150,000		-		-			-			-		150,000
3U Trading note transfer to Joseph Lu, October 31, 2017		1,009,516		-		(1,009,516	)		-			-		-
Lu Pacific Properties, LLC note,  October 26, 2016		2,000,000		-		-			-			-		2,000,000
Joseph Lu note, January 26, 2017,		742,215		-		-			-			-		742,215
Joseph Lu note, March 14, 2018,		-		585,730		-			-			-		585,730
Joseph Lu note, September 10, 2018,		-		23,383		-			-			-		23,383
J. Lu Investments note, June 20, 2018		-		100,000		(100,000	)		-			-		-
J. Lu Investments note, July 13, 2018		-		700,000		-			-			-		700,000
Mei-yi Lu note, April 13, 2018		-		400,000		-			-			-		400,000
Mei-yi Lu note, April 13, 2018		-		800,000		-			-			-		800,000
Danny Lu note, August 13, 2018		-		100,000		-			-			-		100,000
Geoff Brown note, August 14, 2018		-		100,000		-			-			-		100,000
Lu Pacific Properties, LLC note, April 13, 2018		-		290,000		-			-			-		290,000
Total	$	10,206,129	$	6,129,951	$	(2,697,811	)	$	(4,095,691	)	$	-	$	9,542,578

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Commitments

9 Months Ended

Sep. 30, 2018

Commitments and Contingencies Disclosure [Abstract]

Commitments

Note 11: Commitments 

Operating Leases 

The Company leases the Company headquarters facility in Tualatin, Oregon from Lu Pacific Properties, LLC, a related party controlled by the Lu family. This lease is through September 30, 2021 and requires the Company to pay for all property taxes, utilities and facility maintenance.

Effective January 1, 2017, the Company entered into a lease amendment. The Company leased 28,275 square feet of the building. The lease term is through September 30, 2021 and all property taxes, utilities and facility maintenance were charged at $0.15 per square foot per month by Lu Pacific Properties, LLC. The monthly rental expense is $17,989. 

The Company leases a facility from 3U Millikan, LLC, a company owned by Xilong Zhu, a member of the Company’s Board of Directors. The lease is for its Southern California Edison Project at Irvine, California location. This lease commenced on October 10, 2016 and will terminate on January 9, 2027 and requires the Company to pay for all property taxes, utilities and facility maintenance. The monthly base rental expense in 2018 is $18,077.  The Company subleases a portion of this facility to PPA Grand Johanna, LLC, a subsidiary sold to esVolta on December 4, 2017.  Rental income to Powin under the terms of the sublease is $4,120 per month in 2018 with annual rent increases through the lease term ending in 2027.  Under the terms of the sublease, Powin has the right to increase the base rent by an amount in proportion to the amount of added battery energy storage capacity relative to the existing battery energy storage capacity at then current market rates. 

On September 27, 2017, the Company entered into a lease agreement for its project located in Stratford, Ontario. The Company leased 1 acre of land from an unrelated party. The lease term is for three years commenced upon commissioning and acceptance of the project, which occurred in March 2018. The annual rental expense is $30,100. The lease has term to renew two additional terms of 5 years each with nine months’ notice.  As discussed in note 3 Powin Energy Ontario Storage II, LP is no longer consolidated due to the sale to esVolta and as a result the lease is not included in the future minimum lease payment schedule below as of September 30, 2018.

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

Year ending September 30,
2019	$	437,673
2020		444,321
2021		397,211
2022		242,364
2023		249,639
Thereafter		863,448
Total	$	2,634,656

For the three months ended September 30, 2018 and 2017, total lease expense for all operating rents and leases was $62,160 and $130,481, respectively. For the nine months ended September 30, 2018 and 2017, total lease expense for all operating rents and leases was $278,558 and $354,092, respectively. These leases are also disclosed in Note 13, related party transactions.

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Capital stock

9 Months Ended

Sep. 30, 2018

Capital stock [Abstract]

Capital stock

Note 12:  Capital stock 

The Company has one class of common stock.

Common Stock

On October 16, 2017, the Company issued an aggregate of 8,155,146 shares of common stock in satisfaction of certain outstanding indebtedness in the aggregate principal and accrued interest balance of $6,151,233. The fair market value of the common stock at time of conversion was $14,353,057. The $8,201,824 difference between the fair market value of the common stock and the balance of the principal and accrued interest was booked as loss on extinguishment of debt. 

Warrants

On April 15, 2013, the Company entered into a Settlement Agreement and Mutual Release to settle a previously disclosed action as noted in our 8K filed on April 17, 2013. Pursuant to the Settlement Agreement, the Company issued a Warrant to Purchase Common Stock to Global Storage Group, LLC for 70,000 shares of the Company’s common stock at an exercise price of $25.00; and a Warrant to Purchase Common Stock to Virgil L. Beaston for 30,000 shares of the Company’s common Stock at an exercise price of $25.00. The exercise period of each Warrant is 60 months from the date of issuance and may be exercised in whole or in part at any time prior to April 15, 2018. As of the expiration date of April 15, 2018 none of the warrants have been exercised and have now expired.

					Average
			Weighted		Remaining
			average exercise		Contractual Life		Aggregate Intrinsic
	Warrants		price		(Years)		Value
Outstanding at December 31, 2017		100,000	$	25.00		0.4	$	-
Exercisable at December 31, 2017		100,000	$	25.00		0.4	$	-
Warrants granted		-		-		-		-
Warrants exercised		-		-		-		-
Warrants expired		100,000		25.00		-		-
Warrants forfeited		-		-		-		-
Outstanding at September 30, 2018		-	$	25.00		-	$	-
Exercisable at September 30, 2018		-	$	25.00		-	$	-

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Stock Options

9 Months Ended

Sep. 30, 2018

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

Stock Options

Note 13: Stock Options 

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

In February 2011, the Company’s Board of Directors approved the adoption of the Powin Energy Corporation 2011 Stock Option Plan (“2011 Plan”) and submitted its ratification to the shareholders at the shareholders’ meeting held September 15, 2011, where the shareholders approved the 2011 Plan.  On September 15, 2011, the Company granted awards under the 2011 Plan in the form of incentive stock options to its key employees for 1,170,000 shares of common stock.  On August 6, 2013, the Company granted 1,640,000 stock options under the 2011 Plan to all employees. Awards are granted with an exercise price that approximates the market price of the Company’s common stock at the date of grant. 

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

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

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

In June 2017, the Company’s Board of Directors approved the adoption of the Powin Energy Corporation 2017 Stock Option Plan (“2017 Plan”). During the year ended December 31, 2017 the Company granted awards under the 2017 Plan in the form of incentive stock options to its employees for a total of 2,041,603 shares of common stock.  Awards were granted with an exercise price ranging from $1.18 to $2.00, approximating the market price of the Company’s common stock at the date of each grant.  The stock options vesting provisions have various terms:1). Most 1/4 immediately, then 1/4 each of next 12 months, or 2). 1/3 immediately, then 1/3 each of next 12 months. or 3) fully vested immediately. 

During the nine months ended September 30, 2018 the Company granted awards under the 2017 Plan in the form of incentive stock options to its employees for a total of 324,318 shares of common stock.  Awards were granted with an exercise price ranging from $2.01 to $3.00, approximating the market price of the Company’s common stock at the date of each grant.  The stock options vesting has various terms:1). Most 1/4 immediately, then 1/4 each of next 12 months, or 2). 1/3 immediately, then 1/3 each of next 12 months. or 3) fully vested immediately. 

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

Dividend Yield	0	%
Expected volatility	140.10%-146.80	%
Risk-free interest rate	1.90%-2.92	%
Term in years	5.04-5.62

The Company has never paid a cash dividend and does not intend to pay cash dividends in the foreseeable future, so the dividend yield used in the calculation is 0%. The expected volatility is based on the daily historical volatility of comparative companies, measured over the expected term of the option.  The risk-free rate is based on the implied yield on a United States Treasury zero-coupon issue with a remaining term closest to the expected term of the option. The term of the option is the expiration as there is no ready market for employees to exercise and sell shares and to date no option has been exercised on the 2011 Plan, 2013 Plan and 2017 Plan.

A summary of option activity as is presented below: 

	Number of Options			Wtd Avg. Exercise Price		Wtd Avg. Remaining Term		Exercisable		Intrinsic Value of Options
Outstanding at December 31, 2016		102,000		$	5.70		4.88		84,059	$	-
Granted		2,041,603			1.42		9.82
Forfeited/Expired		(15,000	)		3.50						-
Outstanding at December 31, 2017		2,128,603			1.61		9.54		674,432		1,338,418
Granted		324,318			2.10		9.44
Forfeited/Expired		(134,000	)		-						-
Outstanding at September 30, 2018		2,318,921		$	1.56		9.02		764,810	$	560,319

Stock option expense included in operating expense for the three months ended September 30, 2018 and 2017 is $212,300 and $108,894, respectively. Stock option expense included in operating expense for the nine months ended September 30, 2018 and 2017 is $760,308 and $132,454, respectively. As of September 30, 2018 and December 31, 2017, remaining unvested stock expenses amounted to $2,483,880 and $1,743,208, respectively.

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Related Party Transactions

9 Months Ended

Sep. 30, 2018

Related Party Transactions [Abstract]

Related Party Transactions

Note 14:  Related Party Transactions 

Rent expense related parties 

The Company headquarter facilities located in Tualatin, Oregon are owned by Lu Pacific Properties, LLC, a related party controlled by the Lu family. Rent expenses were $53,968 and $53,120 for the three months ended September 30, 2018 and 2017, respectively. Rent expenses were $161,903 and $106,240 for the nine months ended September 30, 2018 and 2017, respectively. Rental rates are deemed to be and were derived by local market rates for the rents when the contracts were entered. 

The Company’s facility in Irvine, California is owned by 3U Millikan, LLC, controlled by Xilong Zhu, a director of the Company. Rent expenses were $54,231 and $52,650 for the three months ended September 30, 2018 and 2017, respectively. Rent expenses were $122,337 and $157,950 for the nine months ended September 30, 2018 and 2017, respectively. Rental rates are deemed to be and were derived by local market rates for the rents when the contracts were entered.  The Company subleases a portion of this facility to PPA Grand Johanna, LLC, a subsidiary sold to esVolta on December 4, 2017.  Rental income to the Company under the terms of the sublease is $4,120 per month in 2018 with annual rent increases through the lease term ending in 2027.  Such rental income is recognized as net to rent expense.  Under the terms of the sublease, the Company has the right to increase the base rent by an amount in proportion to the amount of added battery energy storage capacity relative to the existing battery energy storage capacity at then current market rates.

Long-term debt related parties 

The Company has long-term debt from related parties as disclosed in note 9. 

Purchase from Related Parties

Yangzhou Finway Energy Tech Co. is owned 49% by the family of Joseph Lu, our CEO and a director of the Company, and 51% by Xilong Zhu, a director of the Company. The Company purchased equipment and parts from Yangzhou Finway Energy Tech Co. in the amount of $2,436,009 and $3,583 for the three months ended September 30, 2018 and 2017, respectively. The Company purchased equipment and parts from Yangzhou Finway Energy Tech Co. in the amount of $3,820,126 and $9,843 for the nine months ended September 30, 2018 and 2017, respectively. Amounts due to Yangzhou Finway Energy Tech Co. amounted to $3,315,527 and $1,309,946 at September 30, 2018 and December 31, 2017, respectively. 

Included in raw materials as of September 30, 2018 is $1,113,720 of inventory located at Yangzhou Finway manufacturing facility which will be used in production of Stack equipment for planned shipments to our customers. 

Quailhurst Vineyard Estates, LLC an Oregon limited liability company, is controlled by the Joseph Lu family. The Company purchased product from Quailhurst Vineyard Estates in the amount of $4,600 and $220 for the three months ended September 30, 2018 and 2017, respectively. The Company purchased product from Quailhurst Vineyard Estates in the amount of $15,100 and $3,177 for the nine months ended September 30, 2018 and 2017, respectively. Amounts due to Quailhurst Vineyard Estates amounted of $11,400 and $0 at September 30, 2018 and December 31, 2017, respectively.

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Subsequent events

9 Months Ended

Sep. 30, 2018

Subsequent Events [Abstract]

Subsequent events

Note 15: Subsequent events 

 On October 10, 2018 the Company filed Schedule 13E-3 Amendment No. 4.  This Amendment No. 4 to the Issuer’s Rule 13E-3 Transaction Statement (“Transaction Statement”) is filed in connection with the  Issuer’s going private transaction wherein the Issuer effected a 1-for-100 reverse stock split of its  common stock, effective October 5, 2018.

Effective October 5, 2018, the Issuer completed a 1-for-100 reverse stock split of its outstanding common stock. In the reverse stock split, each 100 shares of the Issuer’s common stock was converted into one (1) share of common stock and holders thereafter of fractional shares became entitled to and received a cash payment in lieu of fractional shares in the amount of $176.00 for each pre-split share that became a fractional share.  As a result of the reverse stock split, shareholders who prior to the reverse stock split held less than 100 shares are no longer shareholders of the Issuer.

Immediately following the reverse stock split, the Issuer effected a 100-for-1 forward stock split for those shareholders who, following the reverse stock split, held at least one (1) whole share of common stock.

The reverse stock split resulted in the Issuer having 175 shareholders of record of its outstanding common stock. Accordingly, the Issuer has filed Form 15 contemporaneously with this amended Transaction Statement which immediately suspended the Issuer’s obligation to file periodic reports pursuant to Section 13 of the Securities Act of 1934, as amended, (“1934 Act”) and terminating the registration of the Issuer’s common stock under the 1934 Act.

Due to the above transactions, the Company’s total outstanding common shares decreased from 45,263,070 to 45,251,600. 

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

9 Months Ended

Sep. 30, 2018

Description Of Business And History And Summary Of Significant Accounting Policies Abstract

Description of Business and History

Description of Business and History 

Powin Energy Corporation (“Powin”, “Company”, “we”, “us”) is a leading producer, designer and developer of commercially proven, cost-competitive, safe and scalable lithium-ion based energy storage solutions for utilities and microgrid. We are incorporated in the State of Nevada and were founded in 1989 in Oregon.  Our primary product is the Stack140 (“Stack”), a modular, flexible, purpose-built battery string that is easily and cost-effectively scalable from a single unit to multiple megawatts of capacity.  We are focused on the rapidly growing advanced energy storage industry and deploying our Stack modular battery system which features our patented Battery Pack Operating System (“bp-OS”) software that provides critical insight into system functions and lifespan via our proprietary Battery Odometer and Warranty Tracker™ controls. 

For the periods presented the Company has the following subsidiaries:

As described in this Report		As described in 2017 Form 10K
Legal entity name	Business  segment name	Legal entity name	Business segment  Name
Powin Energy  Corporation	Energy	Powin Energy  Corporation	Energy
Powin China Holdings 1, LLC	Energy
Powin Energy (Ningbo) Co., Ltd.	Energy
Powin Canada B.C. Ltd (2)	Energy	Powin Canada B.C. Ltd	Energy
	Energy	PPA Grand Johanna, LLC (1)	Energy
	Energy	Powin SBI, LLC (1)	Energy
	Energy	Don Lee BESS, LLC (1)	Energy
Powin Energy Ontario Storage II, LP (2)	Energy	Powin Energy Ontario Storage II, LP	Energy
Powin Energy Storage 2, Inc. (2)	Energy	Powin Energy Storage 2, Inc.	Energy
Powin Energy Ontario Storage,  LLC	Energy	Powin Energy Ontario Storage,  LLC	Energy

(1)	Sold in December 2017.
(2)	Sold 50% interest in March 2018.

In 2017, as part of the sale of our projects and pipelines, we acquired a 10% ownership stake in esVolta, LP (“esVolta”) a developer, owner and operator of utility-scale energy storage projects across North America. esVolta has entered a strategic long-term agreement with us under which we will be esVolta’s exclusive provider of battery storage systems. We did not record any impairment losses related to our equity method investment during the years ended December 31, 2017. For the nine months ended September 30, 2018, we recorded equity in loss of unconsolidated affiliates of $276,884 for our ownership percentage in the investee’s net loss and reduced our investment in equity method investee by this amount. As of September 30, 2018, the balance of investment in unconsolidated affiliates for esVolta is $198,379.

In December 2017 the Company entered into a purchase and sale agreement with esVolta for the sale of Powin Canada B.C. Ltd., the sole limited partner of Powin Energy Ontario Storage II, LP and sole shareholder of Powin Energy Storage 2, Inc.  Powin Canada B.C. Ltd through its subsidiaries holds the assets of an 8.8 MW / 40.8 MWh energy storage project located in Stratford, Ontario. Pursuant to the agreement, at closing esVolta paid to Powin an aggregate amount equal to 50.0% of the sum of $20,681,000 adjusted for working capital and debt balances at the time of closing for 50% of the ownership interests in Powin Canada B.C. Ltd.  Additionally, the purchase agreement has an option whereby esVolta, may purchase the remaining 50% ownership interests in Powin Canada B.C. Ltd. within one year of the original closing date of March 2018.  On March 29, 2018, we sold the 50% ownership stake in this previously consolidated entity, Powin Canada BC, Ltd to esVolta. We now account for our remaining 50% ownership in Powin Canada B.C., Ltd using the equity method.  In 2018 we recorded our investment in unconsolidated affiliates of $8,212,925 for our 50% ownership in Powin Canada B.C., Ltd. For the period from the date of deconsolidation to September 30, 2018 we recorded equity in loss of unconsolidated affiliates of $38,729 for our ownership percentage in the investee’s net loss and reduced our investment in equity method investee by this amount. As of September 30, 2018, the balance of investment in unconsolidated affiliates for Powin Canada B.C. Ltd. is $8,174,196. 

In January 2018, the Company formed Powin China Holdings 1, LLC, an Oregon limited liability company (“Powin China”).  In March 2018, Powin Energy (Ningbo) Co., Ltd (“Powin Ningbo”) was established in the People’s Republic of China as a subsidiary of Powin China. In April 2018, Powin Ningbo purchased land in Ningbo Yuyao, China for 19,192,246 RMB ($3,053,707 USD) plus a performance deposit of 1,852,000 RMB ($295,083 USD). The land will be the site for the planned construction of a battery manufacturing facility. 

The Company’s client base includes developers, utilities and providers in the energy storage industry sector.  Operations outside the United States of America are subject to risks inherent in operating under different legal systems and various political and economic environments.  Among the risks are changes in existing tax laws, possible limitations on foreign investment and income repatriation, government price or foreign exchange controls, and restrictions on currency exchange.

Basis of Presentation

Basis of Presentation 

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

Principles of Consolidation

Principles of Consolidation 

The accompanying consolidated financial statements include the accounts of Powin Energy Corporation and its subsidiaries. All intercompany transactions and balances have been eliminated during consolidation. Investments in unconsolidated affiliates through which the Company exercises significant influence over but does not control the investee and is not the primary beneficiary of the investee’s activities are accounted for using the equity method.

Foreign Currencies

Foreign Currencies 

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

The reporting currency of the Company is the U.S. dollars. The results of operations and cash flows conducted in foreign currency are translated at average exchange rates during the period, and assets and liabilities are translated at the unified exchange rates at the balance sheet dates, and equity is translated at the historical exchange rates. As a result, amounts related to assets and liabilities reported on the statements of cash flows will not necessarily agree with changes in the corresponding accounts on the balance sheets. Translation adjustments resulting from this process are included in accumulated other comprehensive income in the statements of stockholders’ equity. Translation adjustments for the nine months ended September 30, 2018 and 2017 were $93,255 and $0, respectively. The cumulative translation adjustment and effect of exchange rate changes on cash, which was recorded as accumulated other comprehensive income (loss) on the balance sheet, as of September 30, 2018 and December 31, 2017 were $78,290 and $(14,965), respectively. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred.

Unaudited interim financial statements

Unaudited interim financial statements 

The accompanying unaudited consolidated balance sheet as of September 30, 2018, the consolidated statements of operations and condensed consolidated statements of comprehensive loss for the nine months ended September 30, 2018 and 2017 of cash flows for the nine months ended September 30, 2018 and 2017, and other information disclosed in the related notes are unaudited. The consolidated balance sheet as of December 31, 2017, was derived from our audited consolidated financial statements at that date. The accompanying condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes contained in our Form 10-K for the year ended December 31, 2017 filed with the Securities and Exchange Commission. The accompanying interim condensed consolidated financial statements and related disclosures have been prepared on the same basis as the annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments necessary for a fair statement of the results of operations for the periods presented. The condensed consolidated results of operations for any interim period are not necessarily indicative of the results to be expected for the full year or any other future year or interim period.

Advertising

Advertising 

The Company expenses the cost of advertising as incurred.  For the nine months ended September 30, 2018 and 2017, the amount charged to advertising expense was $118,590 and $24,175, respectively.

Cash and Cash Equivalents

Cash and Cash Equivalents 

The Company considers all highly liquid investments with original maturities of 90 days or less at the time of purchase to be cash equivalents. The cash deposits in U.S. financial institutions exceed the amounts insured by the U.S. government. The standard insurance amount is $250,000 per depositor, per insured bank. Non-performance by these institutions could expose the Company to losses for amounts in excess of insured balances. At September 30, 2018 and December 31, 2017, the Company’s bank balances exceeded insurances balances by $194,672 and $2,862,505, respectively. At September 30, 2018 and December 31, 2017, the Company had no cash equivalents.

Inventories

Inventories

Inventory is reported at the lower of cost (first-in, first-out method) or net realizable value.  The Company capitalizes applicable direct and indirect costs incurred in the Company’s manufacturing operations to bring its products to a sellable state. These costs include direct material, direct labor, and indirect manufacturing costs, including depreciation and amortization. Inventories consist primarily of containers with partially or fully completed energy storage components, including batteries, inverters and battery management hardware and software. 

As of September 30, 2018 and December 31, 2017, the components of inventories were as follows: 

	September 30, 2018			December 31, 2017
Raw materials	$	2,837,485		$	543,373
Finished goods		1,126,489			1,307,981
Reserve for slow moving and obsolete inventory		(1,540,790	)		(1,540,790	)
Inventories, net	$	2,423,184		$	310,564

We regularly review the cost of inventories against their estimated net realizable value and record write-downs if any inventories have costs in excess of their net realizable values. We also regularly evaluate the quantities and values of our inventories in light of current market conditions and trends, among other factors, and record write-downs for any quantities in excess of demand or for any obsolescence. This evaluation considers the use of Stacks in our systems business, expected demand, anticipated sales prices, strategic raw material requirements, new product development schedules, the effect new products might have on the sale of existing products, product obsolescence, product merchantability, and other factors. Market conditions are subject to change, and actual consumption of our inventory could differ from forecasted demand.

Included in raw materials as of September 30, 2018 is $1,113,720 of inventory located at Yangzhou Finway manufacturing facility which will be used in production of Stack equipment for planned shipments to our customers.

Based on our assessment, $0 and $851,206 impairment expenses for inventories were recorded in cost of sales during the nine months ended September 30, 2018 and 2017, respectively.

Intangible Assets

Intangible Assets 

Our intangible assets include websites, patents, and trademarks. Intangible assets that are subject to amortization are amortized using the straight-line method over their estimated period of benefit, ranging from 3 to 5 years. We evaluate the recoverability of intangible assets periodically by taking into account events or circumstances that may warrant revised estimates of useful lives or that indicates the asset may be impaired. Based on this assessment, no impairment expenses for intangible assets were recorded in operating expenses during the nine months ended September 30, 2018 and 2017. Intangible assets amounted $310,424 and $236,754 as of September 30, 2018 and December 31, 2017, respectively. Amortization expenses amounted to $16,523 and $2,041 for the nine months ended September 30, 2018 and 2017, respectively.

Equity Method Investments

Equity Method Investments 

We account for our unconsolidated venture using the equity method of accounting. As part of this evaluation, we consider our participating and protective rights in the venture as well as its legal form. We use the equity method of accounting for our investments when we have the ability to significantly influence, but not control, the operations or financial activities of the investee. We record our equity method investments at cost and subsequently adjust their carrying amount each period for our share of the earnings or losses of the investee and other adjustments required by the equity method of accounting. Distributions received from our equity method investments are recorded as reductions in the carrying value of such investments and are classified on the consolidated statements of cash flows pursuant to the cumulative earnings approach. Under this approach, distributions received are considered returns on investment and are classified as cash inflows from operating activities unless our cumulative distributions received, less distributions received in prior periods that were determined to be returns of investment, exceed our cumulative equity in earnings recognized from the investment. When such an excess occurs, the current period distributions up to this excess are considered returns of investment and are classified as cash inflows from investing activities. 

We monitor our equity method investments, which are included in “Investment in unconsolidated affiliate” in the accompanying consolidated balance sheets, for impairment and record reductions in their carrying values if the carrying amount of an investment exceeds its fair value. An impairment charge is recorded when such impairment is deemed to be other-than-temporary. To determine whether impairment is other-than temporary, we consider our ability and intent to hold the investment until the carrying amount is fully recovered. Circumstances that indicate an other-than temporary impairment may have occurred include factors such as decreases in quoted market prices or declines in the operations of the investee. The evaluation of an investment for potential impairment requires us to exercise significant judgment and to make certain assumptions. The use of different judgments and assumptions could result in different conclusions. 

In 2017, as part of our sale of our projects and pipeline, we acquired a 10% ownership stake in esVolta, As a result, our investment in unconsolidated affiliates has balance of $475,263 as of December 31, 2017. We did not record any impairment losses related to our equity method investment during the years ended December 31, 2017. In March 2018, we sold a 50% ownership stake in a previously consolidated entity, Powin Canada B.C., Ltd. to esVolta. We now account for our remaining 50% ownership in Powin Canada B.C., Ltd. using the equity method.  In 2018 we recorded our investment in unconsolidated affiliates of $8,212,925 for our 50% ownership in Powin Canada B.C., Ltd. 

For the nine months ended September 30, 2018 we recorded equity in loss of unconsolidated affiliates of $315,613 for our ownership percentage in the investee’s net loss and reduced our investment in equity method investee by this amount. As of September 30, 2018, the balance of investment in unconsolidated affiliates is $8,372,575.

Stock-Based Compensation

Stock-Based Compensation 

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

The Powin Energy Corporation 2017 Equity Incentive Plan (“2017 Plan”) stipulates how directors, officers, employees, and consultants of Powin Energy Corp (including any of its subsidiaries) are eligible to participate in various forms of share-based compensation.  The 2017 Plan is administered by the compensation committee of our board of directors (or any other committee designated by our board of directors), which is authorized to, among other things, determine recipients of grants, exercise price and vesting schedule of the awards made under the 2017 Plan. The 2017 Plan provides for the grant of incentive stock options, non-qualified stock options, stock appreciation rights, restricted shares, restricted stock units, performance units, cash incentive awards, performance compensation awards, and other equity-based and equity-related awards. In addition, the shares underlying any forfeited, expired, terminated, or canceled awards, or shares surrendered as payment for taxes required to be withheld, become available for new award grants. We may not grant awards under the 2017 Plan after 2027, which is the tenth anniversary of the 2017 Plan’s approval by our stockholders. As of September 30, 2018, we had 4,134,079 shares available for future issuance under the 2017 Plan.

Land Use Rights

Land Use Rights 

All urban land in China is owned by the State. Pursuant to Interim Regulations of the People’s Republic of China Concerning the Assignment and Transfer of the Right to the Use of the State-owned Land in the Urban Areas, which became effective on May 19, 1990, individuals and companies are permitted to acquire rights to use urban land or land use rights for specific purposes, including residential, industrial and commercial purposes. The land use rights are granted for a period of 70 years for residential purposes, 50 years for industrial purposes and 40 years for commercial purposes. These periods may be renewed at the expiration of the initial and any subsequent terms. Upon approval by both the land administrative authorities and city planning authorities, industrial parcel uses may be converted to other uses, and the duration and other clauses in the land use right granting agreement will be revised to match the new use. Granted land use rights are transferable and may be used as security for borrowings and other obligations. We have received the necessary land use right certificates for the properties described under Note 7.

Reclassifications

Reclassifications 

Certain prior year amounts have been reclassified to conform to the current year presentation. These reclassifications have no impact on our consolidated net earnings, financial position or cash flows.

Recent Accounting Pronouncements

Recent Accounting Pronouncements 

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606), which amends the existing accounting standards for revenue recognition. The new guidance provides a new model to determine when and over what period revenue is recognized. Under this new model, revenue is recognized as goods or services are delivered in an amount that reflects the consideration we expect to collect. In March 2016, the FASB issued an ASU, Revenue from Contracts with Customers: Principal versus Agent Considerations (Reporting Revenue Gross versus Net), which clarifies the principal versus agent guidance in the new revenue recognition standard. In April 2016, the FASB issued another ASU, Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing, which clarifies the guidance on accounting for licenses of intellectual property and identifying performance obligations in the new revenue recognition standard. In May 2016, the FASB issued another ASU, Revenue from Contracts with Customers: Narrow-Scope Improvements and Practical Expedient, which clarifies the transition, collectability, noncash consideration and the presentation of sales and other similar taxes in the new revenue recognition standard. As an emerging growth company, the guidance is effective for fiscal years beginning after December 15, 2018; early adoption is permitted for periods beginning after December 15, 2016. The new standard is required to be applied retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying it recognized at the date of initial application. We have not yet selected a transition method and are evaluating the impact of adopting this guidance. 

In February 2018, the FASB issued ASU 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220) – Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, to allow entities to reclassify the income tax effects of the Tax Act on items within accumulated other comprehensive income to retained earnings. ASU 2018-02 is effective for fiscal years and interim periods within those years beginning after December 15, 2018, and early adoption is permitted. We are currently evaluating the impact ASU 2018-02 will have on our consolidated financial statements and associated disclosures.

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Description of Business and History and Summary of Signifiant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2018

Description Of Business And History And Summary Of Significant Accounting Policies Abstract

Schedule of company subsidiaries

For the periods presented the Company has the following subsidiaries:

As described in this Report		As described in 2017 Form 10K
Legal entity name	Business  segment name	Legal entity name	Business segment  Name
Powin Energy  Corporation	Energy	Powin Energy  Corporation	Energy
Powin China Holdings 1, LLC	Energy
Powin Energy (Ningbo) Co., Ltd.	Energy
Powin Canada B.C. Ltd (2)	Energy	Powin Canada B.C. Ltd	Energy
	Energy	PPA Grand Johanna, LLC (1)	Energy
	Energy	Powin SBI, LLC (1)	Energy
	Energy	Don Lee BESS, LLC (1)	Energy
Powin Energy Ontario Storage II, LP (2)	Energy	Powin Energy Ontario Storage II, LP	Energy
Powin Energy Storage 2, Inc. (2)	Energy	Powin Energy Storage 2, Inc.	Energy
Powin Energy Ontario Storage,  LLC	Energy	Powin Energy Ontario Storage,  LLC	Energy

(1)	Sold in December 2017.
(2)	Sold 50% interest in March 2018.

Schedule of inventories

As of September 30, 2018 and December 31, 2017, the components of inventories were as follows: 

	September 30, 2018			December 31, 2017
Raw materials	$	2,837,485		$	543,373
Finished goods		1,126,489			1,307,981
Reserve for slow moving and obsolete inventory		(1,540,790	)		(1,540,790	)
Inventories, net	$	2,423,184		$	310,564

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Project Assets (Tables)

9 Months Ended

Sep. 30, 2018

Project Assets [Abstract]

Schedule of balance sheet under project assets

Under this method costs incurred are reflected on the balance sheet under project assets. 

Project Assets	September 30, 2018		December 31, 2017
Powin Energy Ontario Storage II - 8.8 MW / 40.8 MWh energy storage project located in Stratford, Ontario	$	-	$	16,036,152
Total project assets	$	-	$	16,036,152

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Notes Receivable (Tables)

9 Months Ended

Sep. 30, 2018

Receivables [Abstract]

Schedule of notes receivable

Notes receivable consist of the following: 

	September 30, 2018				December 31, 2017
	Current		Non Current		Current		Non Current
On October 3, 2016, the Company issued a promissory note to Rolland Holding Company LLC, an unrelated party. The principal amount is $800,000 and the interest rate is 5%, due on November 21, 2024.	$	100,000	$	549,835	$	100,000	$	615,074
On October 3, 2016, the Company issued a promissory note to Powin Mexico, an unrelated party. The principal amount is $125,000 with no interest rate, due on December 3, 2020.		31,250		62,500		31,250		62,500
	$	131,250	$	612,335	$	131,250	$	677,574

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Property and Equipment, net (Tables)

9 Months Ended

Sep. 30, 2018

Property, Plant and Equipment [Abstract]

Schedule of property and equipment

The components of property and equipment were as follows:
	September 30, 2018			December 31, 2017
Equipment	$	76,662		$	50,385
Leasehold improvements		7,564			7,564
Construction in progress		7,445			-
Computers		99,365			99,365
Vehicles		32,983			32,983
Accumulation depreciation		(144,625	)		(118,420
Property and equipment, net	$	79,394		$	71,877

XML

Land Use Rights, net (Tables)

9 Months Ended

Sep. 30, 2018

DeferredTaxAssetsOtherCurrent

Schedule of land use rights

The Company’s land use rights consist of the following:
	September 30, 2018			December 31, 2017
Cost of land use rights	$	3,053,707		$	-
Accumulation amortization		(25,447	)		-
Land use rights, net	$	3,028,260		$	-

XML

Loss Per Share (Tables)

9 Months Ended

Sep. 30, 2018

Earnings Per Share [Abstract]

Schedule of components of loss per share

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

	For the nine months ended September 30,
	2018			2017
Net loss attributable to Powin Energy Corporation (A)	$	(7,005,415	)	$	(5,344,790	)
Weighted average outstanding shares of  common stock (B)		45,263,070			37,104,551
Dilutive effect of securities		-			-
Common stock and common stock equivalents (C)		45,263,070			37,104,551
Loss per share
Basic (A/B)	$	(0.15	)	$	(0.14	)
Diluted (A/C)	$	(0.15	)	$	(0.14	)

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

The following sets forth the number of shares of common stock underlying if all outstanding options, warrants, and convertible debt were converted as of September 30, 2018 and December 31, 2017: 

	September 30, 2018		December 31, 2017
Warrants		-		100,000
Stock options		2,318,921		2,128,603
		2,318,921		2,228,603

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Long-term Debt (Tables)

9 Months Ended

Sep. 30, 2018

Debt Disclosure [Abstract]

Schedule of total carrying value of long-term debt

The total carrying value of long-term debt, including current and non-current classifications, was as follows: 

	September 30, 2018				December 31, 2017
	Current		Non Current		Current		Non Current
Loan from a third party, originating March 16, 2017, due March 16, 2019, at 6% interest, with a security interest in the Company’s ownership stake in Powin Canada B.C. Ltd and a $1 million personal guarantee from Joseph Lu. Subject to meeting the requirements of a qualified financing event within 24 months of the date of this note, the note holder will have the right to convert the note balance into offered securities. The first $1 million of the note balance is eligible to be converted at 90% of the price paid per share under the qualified financing, and the remaining balance at the same price per share paid by the other participants.	$	2,000,000	$	-	$	-	$	2,000,000
Loan from a third party, originating September 13, 2017, due September 14, 2018, at 10% interest, with no collateral.  The loan was extended on September 14, 2018 with a new maturity date of June 14, 2019.		150,000		-		150,000		-
Loan from a third party, originating September 26, 2017, due September 27, 2020 at 8.75% interest. The loan is secured by Powin Energy Ontario Storage II, LP and guaranteed by Powin Canada B.C. Ltd. (a)		-		-		1,200,472		2,953,926
Loan from a third party, originating July 17, 2018, due September 16, 2018, at 18% interest, with personal guarantee from Joseph Lu. The loan was extended on September 16, 2018 with a new maturity date of December 31, 2018.		746,891		-		-		-
Loan from a third party, originating July 17, 2018, due September 16, 2018, at 18% interest, with personal guarantee from Joseph Lu. The loan was extended on September 16, 2018 with a new maturity date of December 31, 2018.		306,225		-		-		-
Loan from a third party, originating July 17, 2018, due September 16, 2018, at 18% interest, with personal guarantee from Joseph Lu. The loan was extended on September 16, 2018 with a new maturity date of December 31, 2018.		448,134		-		-		-
Total long-term debt	$	3,651,250	$	-	$	1,350,472	$	4,953,926

(a) As discussed in note 3, Powin Energy Ontario Storage II, LP is no longer consolidated due to the sale to esVolta and as a result the loan balance is shown as $0 as of September 30, 2018.

Schedule of long-term debt related party

Long-term debt related party 

	September 30, 2018						December 31, 2017
	Current			Non Current			Current			Non Current
On May 31, 2017, the Company renewed two loans from Lu Pacific Properties, LLC. The principal amount is $150,000 and the annual interest rate is 6%, due on May 31, 2018, with no collateral. As of September 30, 2018, accrued interest is $22,101. Interest expense amounted to $7,149 for the nine months ended September 30, 2018.  The loan was renewed on May 31, 2018 with a new maturity date of May 31, 2019.		$	150,000		$	-		$	150,000		$	-
Loan originating July 5, 2016, due July 4, 2017, at a 6% annual interest rate, with no collateral On October 31, 2017, 3U Trading note transfer to Joseph Lu per agreement Principal and accrued interest may be converted into preferred stock. As of September 30, 2018, accrued interest is $0.  Interest expense amounted to $2,987 for the nine months ended September 30, 2018. The loan was paid off on January 19, 2018.			-			-			1,009,516			-
On October 26, 2016, the Company secured a loan from Lu Pacific Properties, LLC. The principal amount is $2,000,000, and the annual interest rate is 7%, due on October 26, 2018, secured by Company’s intellectual property. As of September 30, 2018, accrued interest is $71,694. Interest expense amounted to $104,713 for the nine months ended September 30, 2018. The loan was renewed on October 25, 2018, with a new maturity date of November 30, 2018.			2,000,000			-			2,000,000			-
On January 26, 2017, the Company borrowed the sum of $1,000,000 from Joseph Lu, and issued its note in the principal amount of $1,000,000, with an annual interest rate is 7%, due on January 26, 2019. The note is secured by the Company’s intellectual property. As of September 30, 2018, accrued interest is $51,955. Interest expense amounted to $38,860 for the nine months ended September 30, 2018. Partial of the Note, $247,785 principal was converted to common stock on October 16, 2017.			742,215			-			-			742,215
On March 14, 2018, the Company secured a loan from Joseph Lu. The principal amount is $585,730 and the annual interest rate is 12%, due in May 14, 2018, secured by 100% of equity of Powin China. As of September 30, 2018, accrued interest is $37,169. Interest expense amounted to $37,169 for the nine months ended September 30, 2018.  The loan was renewed with a new maturity date of December 31, 2018.			585,730			-			-			-
On April 13, 2018, the Company secured a loan from Mei-yi Lu due June 12, 2018 at 36% interest, with no collateral. The loan was renewed and due upon holder request, at 12% interest. As of September 30, 2018, accrued interest is $59,573. Interest expense amounted to $59,573 for the nine months ended September 30, 2018.			400,000			-			-			-
On April 13, 2018, the Company secured a loan from Lu Pacific Properties, LLC due June 12, 2018 at 36% interest, with no collateral. The loan was renewed and is due November 30, 2018, at 12% interest. As of September 30, 2018, accrued interest is $43,190.  Interest expense amounted to $43,190 for the nine months ended September 30, 2018.			290,000			-			-			-
On July 13, 2018, the Company secured a loan from J. Lu Investment, LLC due August 1, 2018 at 36% interest, with no collateral. On August 1, 2018 the loan was renewed and due upon holder request, at 7% interest. As of September 30, 2018, accrued interest is $10,605.  Interest expense amounted to $10,605 for the nine months ended September 30, 2018.			700,000			-			-			-
On August 13, 2018, the Company secured a loan from Danny Lu due August 9, 2019 at 12% interest, with no collateral. As of September 30, 2018, accrued interest is $1,611.  Interest expense amounted to $1,611 for the nine months ended September 30, 2018.			100,000			-			-			-
On August 14, 2018, the Company secured a loan from Geoffrey Brown due August 9, 2019 at 12% interest, with no collateral. As of September 30, 2018, accrued interest is $1,578.  Interest expense amounted to $1,578 for the nine months ended September 30, 2018.			100,000			-			-			-
On September 10, 2018, the Company secured a loan from Joseph Lu due March 10, 2019 at 6% interest, secured by 100% of equity of Powin China. As of September 30, 2018, accrued interest is $77.  Interest expense amounted to $77 for the nine months ended September 30, 2018.			23,383			-			-			-
On September 28, 2018, the Company secured a loan from Meiyi Lu due upon holder request at 12% interest, with no collateral. As of September 30, 2018, accrued interest is $789.  Interest expense amounted to $789 for the nine months ended September 30, 2018.			800,000			-			-			-
Total		$	5,891,328		$	-		$	3,159,516		$	742,215

Schedule of long term debt

Schedule of long term debt: 

	December 31, 2017 Balance		Borrowed		Paid			Deconsolidated			Converted		September 30, 2018 Balance
Third party note, March 16, 2017	$	2,000,000	$	-		-		$	-		$	-	$	2,000,000
Third party note, September 26, 2017		4,154,398		-		(58,707	)		(4,095,691	)		-		-
Third party note, June 13, 2017		150,000		-		-			-			-		150,000
Third party note, April 17, 2018				1,529,588		(1,529,588	)		-			-		-
Third party note, July 17, 2018				746,891		-			-			-		746,891
Third party note, July 17, 2018				306,225		-			-			-		306,225
Third party note, July 17, 2018				448,134		-			-			-		448,134
Renewal of two notes from Lu Pacific Properties, LLC, May 31, 2017		150,000		-		-			-			-		150,000
3U Trading note transfer to Joseph Lu, October 31, 2017		1,009,516		-		(1,009,516	)		-			-		-
Lu Pacific Properties, LLC note,  October 26, 2016		2,000,000		-		-			-			-		2,000,000
Joseph Lu note, January 26, 2017,		742,215		-		-			-			-		742,215
Joseph Lu note, March 14, 2018,		-		585,730		-			-			-		585,730
Joseph Lu note, September 10, 2018,		-		23,383		-			-			-		23,383
J. Lu Investments note, June 20, 2018		-		100,000		(100,000	)		-			-		-
J. Lu Investments note, July 13, 2018		-		700,000		-			-			-		700,000
Mei-yi Lu note, April 13, 2018		-		400,000		-			-			-		400,000
Mei-yi Lu note, April 13, 2018		-		800,000		-			-			-		800,000
Danny Lu note, August 13, 2018		-		100,000		-			-			-		100,000
Geoff Brown note, August 14, 2018		-		100,000		-			-			-		100,000
Lu Pacific Properties, LLC note, April 13, 2018		-		290,000		-			-			-		290,000
Total	$	10,206,129	$	6,129,951	$	(2,697,811	)	$	(4,095,691	)	$	-	$	9,542,578

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Commitments (Tables)

9 Months Ended

Sep. 30, 2018

Commitments and Contingencies Disclosure [Abstract]

Schedule of future minimum lease payments under non-cancelable operating leases

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

Year ending September 30,
2019	$	437,673
2020		444,321
2021		397,211
2022		242,364
2023		249,639
Thereafter		863,448
Total	$	2,634,656

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Capital stock (Tables)

9 Months Ended

Sep. 30, 2018

Capital stock [Abstract]

Schedule of warrants

As of the expiration date of April 15, 2018 none of the warrants have been exercised and have now expired. 

					Average
			Weighted		Remaining
			average exercise		Contractual Life		Aggregate Intrinsic
	Warrants		price		(Years)		Value
Outstanding at December 31, 2017		100,000	$	25.00		0.4	$	-
Exercisable at December 31, 2017		100,000	$	25.00		0.4	$	-
Warrants granted		-		-		-		-
Warrants exercised		-		-		-		-
Warrants expired		100,000		25.00		-		-
Warrants forfeited		-		-		-		-
Outstanding at September 30, 2018		-	$	25.00		-	$	-
Exercisable at September 30, 2018		-	$	25.00		-	$	-

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Stock Options (Tables)

9 Months Ended

Sep. 30, 2018

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

Schedule of fair value assumptions in options valuations

The following assumptions were used to determine the fair value of the options at date of original issuance on August 6, 2013: 

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

The following assumptions were used to determine the fair value of the options at date of original issuance:

Dividend Yield	0	%
Expected volatility	140.10%-146.80	%
Risk-free interest rate	1.90%-2.92	%
Term in years	5.04-5.62

Schedule of summary of stock option activity

A summary of option activity as is presented below: 

	Number of Options			Wtd Avg. Exercise Price		Wtd Avg. Remaining Term		Exercisable		Intrinsic Value of Options
Outstanding at December 31, 2016		102,000		$	5.70		4.88		84,059	$	-
Granted		2,041,603			1.42		9.82
Forfeited/Expired		(15,000	)		3.50						-
Outstanding at December 31, 2017		2,128,603			1.61		9.54		674,432		1,338,418
Granted		324,318			2.10		9.44
Forfeited/Expired		(134,000	)		-						-
Outstanding at September 30, 2018		2,318,921		$	1.56		9.02		764,810	$	560,319

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Description of Business and History and Summary of Signifiant Accounting Policies (Details) - USD ($)	Sep. 30, 2018	Dec. 31, 2017
Description Of Business And History And Summary Of Significant Accounting Policies Abstract
Raw materials	$ 2,837,485	$ 543,373
Finished goods	1,126,489	1,307,981
Reserve for slow moving and obsolete inventory	(1,540,790)	(1,540,790)
Inventories, net	$ 2,423,184	$ 310,564

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Description of Business and History and Summary of Signifiant Accounting Policies (Details Narrative) - USD ($)		3 Months Ended		9 Months Ended
	Dec. 04, 2017	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Defined Benefit Plan Disclosure [Line Items]
Equity in loss of unconsolidated affiliates		$ (107,324)		$ (315,613)
Investment in unconsolidated affiliate				315,613
Investment in unconsolidated affiliates		$ 8,372,575		$ 8,372,575		$ 475,263
Percentage of ownership interest		50.00%		50.00%
Cumulative translation adjustment and effect of exchange rate changes on cash		$ 78,290		$ 78,290		(14,965)
Advertising expense				118,590	24,175
Standard insurance amount per depositor, per insured bank		250,000		250,000
Bank balances exceeding insurances balances		194,672		194,672		2,862,505
Impairment expenses				0	851,206
Intangible assets, net		$ 310,424		310,424		$ 236,754
Amortization expenses				$ 16,523	2,041
2017 Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Number of shares available for future issuance		4,134,079		4,134,079
Accumulated Other Comp. Income [Member]
Defined Benefit Plan Disclosure [Line Items]
Translation adjustments				$ 93,255	$ 0
Powin Energy (Ningbo) [Member]
Defined Benefit Plan Disclosure [Line Items]
Principal amount of short term debt		$ 19,192,246		19,192,246
Performance deposit		1,852,000		1,852,000
Ningbo Yuyao [Member]
Defined Benefit Plan Disclosure [Line Items]
Principal amount of short term debt		3,053,707		3,053,707
Performance deposit		295,083		295,083
esVolta, LP [Member]
Defined Benefit Plan Disclosure [Line Items]
Investment in unconsolidated affiliate				198,379
esVolta, LP [Member] | Purchase and Sale Agreement [Member] | Powin Canada B.C. Ltd [Member]
Defined Benefit Plan Disclosure [Line Items]
Proceeds from sale of membership interests	$ 20,681,000
Description of ownership interest purchase	<p>T<font style="font: 10pt Times New Roman, Times, Serif">he remaining 50% ownership interests in Powin Canada B.C. Ltd. within one year of the original closing date.</font></p>
esVolta [Member]
Defined Benefit Plan Disclosure [Line Items]
Investment in unconsolidated affiliates		$ 8,212,925		$ 8,212,925
Percentage of ownership interest		50.00%		50.00%
esVolta [Member] | Purchase and Sale Agreement [Member] | Powin Canada B.C. Ltd [Member]
Defined Benefit Plan Disclosure [Line Items]
Percentage of ownership interest	50.00%

XML

Going Concern (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Going concern [Abstract]
Net loss	$ (2,009,792)	$ (1,672,762)	$ (7,005,415)	$ (5,344,790)
Accumulated deficit	51,280,405		51,280,405		$ 44,274,990
Working capital deficit	17,603,466		17,603,466		3,336,144
Notes payable to unrelated parties	$ 3,651,250		$ 3,651,250		$ 1,350,472

XML

Project Assets (Details) - USD ($)	Sep. 30, 2018	Dec. 31, 2017
Total project assets		$ 16,036,152
Powin Energy Ontario Storage II, LP [Member]
Total project assets		$ 16,036,152

XML

Project Assets (Details Narrative) - USD ($)		3 Months Ended		9 Months Ended
	Dec. 04, 2017	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Percentage of ownership interest		50.00%		50.00%
Net loss related to deconsolidation				$ 1
Revenue from energy storage		$ 4,290,864	$ 104,883	14,433,746	$ 302,170
Cost of energy storage		3,514,895	68,167	13,949,032	1,061,823
Revenue From Energy Storage Assets [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Revenue from energy storage			104,643	8,460,538	259,738
Cost of energy storage			$ 67,633	8,716,233	$ 184,354
Powin Canada B.C. Ltd [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Net loss related to deconsolidation				(428,001)
Equity method investment, quoted market value		$ 8,212,925		$ 8,212,925
esVolta [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Percentage of ownership interest		50.00%		50.00%
Purchase and Sale Agreement [Member] | esVolta [Member] | Powin Canada B.C. Ltd [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Percentage of ownership interest	50.00%
Purchase and Sale Agreement [Member] | esVolta, LP [Member] | Powin Canada B.C. Ltd [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Proceeds from sale of membership interests	$ 20,681,000
Description of ownership interest purchase	<p>T<font style="font: 10pt Times New Roman, Times, Serif">he remaining 50% ownership interests in Powin Canada B.C. Ltd. within one year of the original closing date.</font></p>

XML

Tax Payable (Details Narrative)	Sep. 30, 2018 USD ($)
GST/HST [Member]
Tax payable	$ 75,696

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Notes Receivable (Details) - USD ($)	9 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Notes receivables Current	$ 131,250	$ 131,250
Notes receivables Non Current	$ 612,335	677,574
Notes receivables On October 3, 2016 One [Member]
Notes receivables Current
Notes receivables Non Current
Maturity date	Nov. 21, 2024
Notes receivables On October 3, 2016 Two [Member]
Notes receivables Current	$ 100,000	100,000
Notes receivables Non Current	$ 549,835	615,074
Maturity date	Nov. 21, 2024
Notes receivables On October 3, 2016 Three [Member]
Notes receivables Current	$ 31,250	31,250
Notes receivables Non Current	$ 62,500	$ 62,500
Maturity date	Dec. 03, 2020

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Notes Receivable (Details Narrative) - USD ($)		9 Months Ended		12 Months Ended
	Oct. 03, 2016	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Promissory note		$ 9,542,578		$ 10,206,129
Proceeds from notes receivable		65,239		202,703
Interest income recognized		$ 25,735		39,566
Rolland Holding Company, LLC [Member]
Cash payment	$ 99,000
Principal amount of short term debt	$ 100,000
Interest rate on debt	4.00%
Promissory note	$ 800,000
Interest rate on long term debt	5.00%
Non-interest bearing promissory note	$ 125,000
Rolland Holding Company, LLC [Member] | Powin Mexico Note [Member]
Monthly installments				31,250
Rolland Holding Company, LLC [Member] | Powin Mexico Note [Member] | Installment on December 31, 2018 [Member]
Monthly installments				31,250
Rolland Holding Company, LLC [Member] | Powin Mexico Note [Member] | Installment on December 31, 2019 [Member]
Monthly installments				31,250
Rolland Holding Company, LLC [Member] | Powin Mexico Note [Member] | Installment on December 31, 2020 [Member]
Monthly installments				$ 31,250

XML

Property and Equipment, net (Details) - USD ($)	Sep. 30, 2018	Dec. 31, 2017	Dec. 30, 2017
Property, Plant and Equipment [Line Items]
Accumulated depreciation	$ (144,625)	$ (118,420)
Property and equipment - net	79,394	71,877
Equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	76,662	50,385
Leasehold Improvements [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	7,564	7,564
Construction in Progress [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	7,445
Computers [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	99,365	99,365
Vehicles [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 32,983	$ 32,983

XML

Property and Equipment, net (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments Other Than Options Nonvested Exercisable Weighted Average Exercise Price
Depreciation	$ 8,482	$ 64,790	$ 26,205	$ 175,880

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Land Use Rights, net (Details) - USD ($)	Sep. 30, 2018	Dec. 31, 2017
Finite-Lived Intangible Assets [Line Items]
Land use rights, net	$ 3,028,260
CHINA | Land use rights [Member]
Finite-Lived Intangible Assets [Line Items]
Cost of land use rights	3,053,707
Accumulation amortization	(25,447)
Land use rights, net	$ 3,028,260

XML

Land Use Rights, net (Details Narrative) - USD ($)		3 Months Ended		9 Months Ended
	Apr. 30, 2018	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Finite-Lived Intangible Assets [Line Items]
Payments to acquire land				$ 90,193	$ 28,835
Amortization				16,523	2,041
Land use rights [Member] | CHINA
Finite-Lived Intangible Assets [Line Items]
Payments to acquire land	$ 3,053,707
Amortization		$ 5,872	$ 0	$ 25,447	$ 0
Land use rights term				50 years
Amortization method				<p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"><font style="font: 10pt Times New Roman, Times, Serif">Amortization is provided using the straight-line method over the terms of the lease of 50 years obtained from the relevant PRC land authority.</font></p>
Land use rights [Member] | CHINA | RMB
Finite-Lived Intangible Assets [Line Items]
Payments to acquire land	$ 19,192,246

XML

Other Receivable (Details Narrative) - WeipingCai [Member] - Q Pacific Corproation [Member] - USD ($)		9 Months Ended	12 Months Ended
	Oct. 18, 2016	Sep. 30, 2018	Dec. 31, 2017
Percentage of EBITDA of QPM	35.00%
Amount recorded under agreement		$ 0
Proceeds under agreement		$ 109,074	$ 109,074

XML

Loss Per Share (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Earnings Per Share [Abstract]
Net loss attributable to Powin Energy Corporation (A)	$ (2,009,792)	$ (1,672,762)	$ (7,005,415)	$ (5,344,790)
Weighted average outstanding shares of common stock (B)			45,263,070	37,104,551
Dilutive effect of securities
Common stock and common stock equivalents (C)			45,263,070	37,104,551
Loss per share
Basic (A/B)			$ (0.15)	$ (0.14)
Diluted (A/C)			$ (0.15)	$ (0.14)

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Loss Per Share (Details 1) - shares	9 Months Ended	12 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Number of shares of common stock	2,318,921	2,228,603
Warrant [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Number of shares of common stock		100,000
Stock Options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Number of shares of common stock	2,318,921	2,128,603

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Loss Per Share (Details Narrative) - USD ($)			1 Months Ended
	Apr. 15, 2013	Apr. 15, 2013	Apr. 15, 2013	Sep. 30, 2018	Dec. 31, 2017
Class of Stock [Line Items]
Stock options outstanding				$ 2,318,921	$ 2,128,603
Virgil L. Beast [Member]
Class of Stock [Line Items]
Warrants issued to purchase common	$ 30,000	$ 30,000	$ 30,000
Exercise price	$ 25	$ 25.00	$ 25
Exercise period of warrant	60 days	60 months	60 months
Global Storage Group, LLC [Member]
Class of Stock [Line Items]
Warrants issued to purchase common	$ 70,000	$ 70,000	$ 70,000
Exercise price	$ 25.00	$ 25.00	$ 25
Exercise period of warrant	60 days	60 months	60 months

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Long-term Debt (Details) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Debt Instrument [Line Items]
Total long-term debt, including current portion and accrued interest, Current	$ 3,651,250	$ 1,350,472
Total long-term debt, including current portion And accrued interest, Non Current		4,953,926
Loan from Third Party Due March 16, 2019 [Member]
Debt Instrument [Line Items]
Total long-term debt, including current portion and accrued interest, Current	2,000,000
Total long-term debt, including current portion And accrued interest, Non Current		$ 2,000,000
Interest rate	6.00%	6.00%
Debt instrument, beginning maturity date	Mar. 16, 2017
Debt instrument, ending maturity date	Mar. 16, 2019
Loan from Third Party Due March 16, 2019 [Member] | Joseph Lu [Member]
Debt Instrument [Line Items]
Guarantees		$ 1,000,000
Financing event term		24 months
Conversion price percentage		90.00%
Loan from Third Party Due September 14, 2018 [Member]
Debt Instrument [Line Items]
Total long-term debt, including current portion and accrued interest, Current	$ 150,000	$ 150,000
Interest rate	10.00%
Debt instrument, beginning maturity date	Sep. 13, 2017
Debt instrument, ending maturity date	Jun. 14, 2019
Loan from Third Party Due September 27, 2020 [Member]
Debt Instrument [Line Items]
Total long-term debt, including current portion and accrued interest, Current		1,200,472
Total long-term debt, including current portion And accrued interest, Non Current		$ 2,953,926
Interest rate	8.75%
Loan from Third Party Due September 16, 2018 [Member]
Debt Instrument [Line Items]
Total long-term debt, including current portion and accrued interest, Current	$ 746,891
Interest rate	18.00%
Debt instrument, beginning maturity date	Jul. 17, 2018
Debt instrument, ending maturity date	Dec. 31, 2018
Loan from Third Party Due September 16, 2018 [Member]
Debt Instrument [Line Items]
Total long-term debt, including current portion and accrued interest, Current	$ 306,225
Interest rate	18.00%
Debt instrument, beginning maturity date	Jul. 17, 2018
Debt instrument, ending maturity date	Dec. 31, 2018
Loan from Third Party Due September 16, 2018 [Member]
Debt Instrument [Line Items]
Total long-term debt, including current portion and accrued interest, Current	$ 448,134
Interest rate	18.00%
Debt instrument, beginning maturity date	Jul. 17, 2018
Debt instrument, ending maturity date	Dec. 31, 2018

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Long-term Debt (Details 1) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Related Party Transaction [Line Items]
Loans from Related Parties, Current	$ 5,891,328		$ 5,891,328		$ 3,159,516
Loans from Related Parties, Non Current					742,215
Interest expense	$ 130,811	$ 72,686	308,531	$ 130,250
Borrowed from related parties			$ 3,099,113	$ 6,159,321
Percentage of equity	50.00%		50.00%
Related Party Loan Starting May 31, 2017 [Member]
Related Party Transaction [Line Items]
Loans from Related Parties, Current	$ 150,000		$ 150,000		150,000
Loans from Related Parties, Non Current
Principal amount	$ 150,000		$ 150,000		150,000
Interest rate	6.00%		6.00%
Maturity date			May 31, 2019
Accrued interest	$ 22,101		$ 22,101
Interest expense			7,149
Related Party Loan Starting July 5, 2016 One [Member]
Related Party Transaction [Line Items]
Loans from Related Parties, Current					1,009,516
Loans from Related Parties, Non Current
Interest rate	6.00%		6.00%
Maturity date			Jan. 19, 2018
Accrued interest	$ 0		$ 0		5,144
Interest expense			2,987
Related Party Loan Starting October 26, 2016 [Member]
Related Party Transaction [Line Items]
Loans from Related Parties, Current	2,000,000		2,000,000		2,000,000
Loans from Related Parties, Non Current
Principal amount	$ 2,000,000		$ 2,000,000		2,000,000
Interest rate	7.00%		7.00%
Maturity date			Nov. 30, 2018
Accrued interest	$ 71,694		$ 71,694
Interest expense			104,713
Related Party Loan Starting January 26, 2017 [Member]
Related Party Transaction [Line Items]
Loans from Related Parties, Current	742,215		742,215
Loans from Related Parties, Non Current					742,215
Principal amount	$ 1,000,000		$ 1,000,000		$ 1,000,000
Interest rate	7.00%		7.00%
Maturity date			Oct. 16, 2017
Accrued interest	$ 51,955		$ 51,955
Interest expense			38,860
Borrowed from related parties			$ 1,000,000
Share converted to common stock			247,785
Related Party Loan Starting March 14, 2018 [Member]
Related Party Transaction [Line Items]
Loans from Related Parties, Current	585,730		$ 585,730
Loans from Related Parties, Non Current
Interest rate	12.00%		12.00%
Maturity date			Dec. 31, 2018
Accrued interest	$ 37,169		$ 37,169
Interest expense			$ 37,169
Percentage of equity	100.00%		100.00%
Related Party Loan Starting April 13, 2018 [Member]
Related Party Transaction [Line Items]
Loans from Related Parties, Current	$ 400,000		$ 400,000
Interest rate	36.00%		36.00%
Accrued interest	$ 59,573		$ 59,573
Interest expense			59,573
Related Party Loan Starting April 13, 2018 [Member]
Related Party Transaction [Line Items]
Loans from Related Parties, Current	$ 290,000		$ 290,000
Interest rate	36.00%		36.00%
Maturity date			Nov. 30, 2018
Accrued interest	$ 43,190		$ 43,190
Interest expense			43,190
Related Party Loan Starting July 13, 2018 [Member]
Related Party Transaction [Line Items]
Loans from Related Parties, Current	$ 700,000		$ 700,000
Interest rate	36.00%		36.00%
Accrued interest	$ 10,605		$ 10,605
Interest expense			10,605
Related Party Loan Starting August 13, 2018 [Member]
Related Party Transaction [Line Items]
Loans from Related Parties, Current	$ 100,000		$ 100,000
Interest rate	12.00%		12.00%
Maturity date			Aug. 09, 2019
Accrued interest	$ 1,611		$ 1,611
Interest expense			1,611
Related Party Loan Starting August 14, 2018 [Member]
Related Party Transaction [Line Items]
Loans from Related Parties, Current	$ 100,000		$ 100,000
Interest rate	12.00%		12.00%
Maturity date			Aug. 09, 2019
Accrued interest	$ 1,578		$ 1,578
Interest expense			1,578
Related Party Loan Starting September 10, 2018 [Member]
Related Party Transaction [Line Items]
Loans from Related Parties, Current	$ 23,383		$ 23,383
Interest rate	6.00%		6.00%
Maturity date			Mar. 10, 2019
Accrued interest	$ 77		$ 77
Interest expense			$ 77
Percentage of equity	100.00%		100.00%
Related Party Loan Starting September 28, 2018 [Member]
Related Party Transaction [Line Items]
Loans from Related Parties, Current	$ 800,000		$ 800,000
Interest rate	12.00%		12.00%
Accrued interest	$ 789		$ 789
Interest expense			$ 789

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Long-term Debt (Details 2)	9 Months Ended
	Sep. 30, 2018 USD ($)
Balance Beginning	$ 10,206,129
Borrowed	6,129,951
Paid	(2,697,811)
Deconsolidated	(4,095,691)
Converted
Balance Ending	9,542,578
Third Party Note, March 16, 2017 [Member]
Balance Beginning	2,000,000
Borrowed
Paid
Deconsolidated
Converted
Balance Ending	2,000,000
Third Party Note, September 26, 2017 [Member]
Balance Beginning	4,154,398
Borrowed
Paid	(58,707)
Deconsolidated	(4,095,691)
Converted
Third Party Note, June 13, 2017, [Member]
Balance Beginning	150,000
Borrowed
Paid
Deconsolidated
Converted
Balance Ending	150,000
Third party note, April 17, 2018 [Member]
Balance Beginning
Borrowed	1,529,588
Paid	(1,529,588)
Deconsolidated
Converted
Balance Ending
Renewal of Two Notes From Lu Pacific Properties, LLC, May 31, 2017 [Member]
Balance Beginning	150,000
Borrowed
Paid
Deconsolidated
Converted
Balance Ending	150,000
3U Trading Note Transfer to Joseph Lu, October 31, 2017 [Member]
Balance Beginning	1,009,516
Borrowed
Paid	(1,009,516)
Deconsolidated
Converted
Lu Pacific Properties, LLC Note, October 26, 2016 [Member]
Balance Beginning	2,000,000
Borrowed
Paid
Deconsolidated
Converted
Balance Ending	2,000,000
Joseph Lu Note, January 26, 2017, [Member]
Balance Beginning	742,215
Borrowed
Paid
Deconsolidated
Converted
Balance Ending	742,215
Joseph Lu Note, March 14, 2018 [Member]
Balance Beginning
Borrowed	585,730
Paid
Deconsolidated
Converted
Balance Ending	585,730
J. Lu Investments note, June 20, 2018 [Member]
Balance Beginning
Borrowed	100,000
Paid	(100,000)
Deconsolidated
Converted
Balance Ending
Mei-yi Lu note, April 13, 2018 [Member]
Balance Beginning
Borrowed	400,000
Paid
Deconsolidated
Converted
Balance Ending	400,000
Lu Pacific Properties, LLC note, April 13, 2018 [Member]
Balance Beginning
Borrowed	290,000
Paid
Deconsolidated
Converted
Balance Ending	290,000
Third party note, July 17, 2018 [Member]
Borrowed	746,891
Paid
Deconsolidated
Converted
Balance Ending	746,891
Third party note, July 17, 2018 [Member]
Borrowed	306,225
Paid
Deconsolidated
Converted
Balance Ending	306,225
Third party note, July 17, 2018 [Member]
Borrowed	448,134
Paid
Deconsolidated
Converted
Balance Ending	448,134
Joseph Lu Note, September 10, 2018 [Member]
Balance Beginning
Borrowed	23,383
Paid
Deconsolidated
Converted
Balance Ending	23,383
J. Lu Investments note, July 13, 2018 [Member]
Balance Beginning
Borrowed	700,000
Paid
Deconsolidated
Converted
Balance Ending	700,000
Mei-yi Lu note, April 13, 2018 [Member]
Balance Beginning
Borrowed	800,000
Paid
Deconsolidated
Converted
Balance Ending	800,000
Danny Lu note, August 13, 2018 [Member]
Balance Beginning
Borrowed	100,000
Paid
Deconsolidated
Converted
Balance Ending	100,000
Geoff Brown note, August 14, 2018 [Member]
Balance Beginning
Borrowed	100,000
Paid
Deconsolidated
Converted
Balance Ending	$ 100,000

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Long-Term Debt (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Notes Payable And Long Term Debt Details Narrative Abstract
Interest expense related to notes payables short-term and long-term debt	$ 102,278	$ 52,858	$ 277,261	$ 80,075
Interest expenses payable to related parties	$ 130,811	$ 72,686	308,531	$ 130,250
Capitalized interest on related party notes			$ 92,052

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Commitments (Details)	Sep. 30, 2018 USD ($)
Commitments and Contingencies Disclosure [Abstract]
2019	$ 437,673
2020	444,321
2021	397,211
2022	242,364
2023	249,639
Thereafter	863,448
Total	$ 2,634,656

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Commitments (Details Narrative)		3 Months Ended		9 Months Ended
	Sep. 27, 2017 USD ($) a	Sep. 30, 2018 USD ($) a	Sep. 30, 2017 USD ($)	Sep. 30, 2018 USD ($) a	Sep. 30, 2017 USD ($)
Operating Leased Assets [Line Items]
Rent and lease expense		$ 62,160	$ 130,481	$ 278,558	$ 354,092
Rental income				4,120
3U Millikan, LLC [Member]
Operating Leased Assets [Line Items]
Rent and lease expense				$ 18,077
Lease expiration date				Jan. 09, 2027
Lu Pacific Properties LLC [Member]
Operating Leased Assets [Line Items]
Rent and lease expense				$ 17,989
Maintenance charge per square foot				0.15
Area of lease | a		28,275		28,275
Lease expiration date				Sep. 30, 2021
Ontario Project [Member]
Operating Leased Assets [Line Items]
Rent and lease expense	$ 30,100
Area of lease | a	1
Description of lease term renewal	<p style="margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">The lease has term to renew two additional terms of 5 years each with six months’ notice.</font></p>

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Capital stock (Details) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Average Remaining Contractual Life (Years)
Average Remaining Contractual Life	9 years 7 days
Aggregate Intrinsic Value
Outstanding at the end of the period	$ 2,318,921	$ 2,128,603
Warrant [Member]
Warrants
Outstanding beginning balance	100,000
Exercisable beginning balance	100,000
Warrants exercised	100,000
Outstanding ending balance		100,000
Exercisable ending balance		100,000
Weighted average exercise price
Outstanding beginning balance	$ 25.00
Exercisable beginning balance	25.00
Warrants expired	25.00
Outstanding ending balance	25.00	$ 25.00
Exercisable ending balance	$ 25.00	$ 25.00
Average Remaining Contractual Life (Years)
Average Remaining Contractual Life	4 months 24 days
Average Remaining Contractual Life, Exercisable	4 months 24 days
Aggregate Intrinsic Value
Warrants granted
Outstanding at the end of the period
Exercisable at the end of the period

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Capital stock (Details Narrative) - USD ($)				1 Months Ended	9 Months Ended
	Oct. 16, 2017	Apr. 15, 2013	Apr. 15, 2013	Apr. 15, 2013	Sep. 30, 2018
Class of Stock [Line Items]
Number of shares issued for outstanding indebtedness	8,155,146
Outstanding indebtedness	$ 6,151,233
Long-term debt, related party converted to common stock					$ 14,353,057
Loss on extinguishment of debt					$ 8,201,824
Global Storage Group, LLC [Member]
Class of Stock [Line Items]
Warrants issued to purchase common stock		$ 70,000	$ 70,000	$ 70,000
Warrant, exercie price		$ 25.00	$ 25.00	$ 25
Exercise period of warrant		60 days	60 months	60 months
Virgil L. Beast [Member]
Class of Stock [Line Items]
Warrants issued to purchase common stock		$ 30,000	$ 30,000	$ 30,000
Warrant, exercie price		$ 25	$ 25.00	$ 25
Exercise period of warrant		60 days	60 months	60 months

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Stock Options (Details)	9 Months Ended
	Sep. 30, 2018
August 6, 2013 [Member]
Dividend Yield	0.00%
Expected volatility	161.80%
Risk-free interest rate	1.39%
Term in years	9 years 11 months 1 day
February 21, 2017 [Member]
Dividend Yield	0.00%
February 21, 2017 [Member] | Minimum [Member]
Expected volatility	140.10%
Risk-free interest rate	1.90%
Term in years	5 years 14 days
February 21, 2017 [Member] | Maximum [Member]
Expected volatility	146.80%
Risk-free interest rate	2.92%
Term in years	5 years 7 months 13 days

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Stock Options (Details 1) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Options
Outstanding, Options	2,128,603
Options granted	324,318
Options forfeited	(134,000)
Outstanding, Options	2,318,921	2,128,603
Options exercisable at the beginnning of the period	674,432
Options exercisable at the end of the period	764,810	674,432
Weighted average exercise price
Outstanding, Options	$ 1.61
Options granted	2.10
Outstanding, Options	$ 1.56	$ 1.61
Average Remaining Contractual Life (Years)
Outstanding	9 years 7 days
Granted	9 years 5 months 8 days
Aggregate Intrinsic Value
Outstanding, Options	$ 560,319
Outstanding, Options		$ 560,319
Stock Options [Member]
Options
Outstanding, Options		102,000
Options granted	324,318	2,041,603
Options forfeited		(15,000)
Options exercisable at the beginnning of the period		84,059
Weighted average exercise price
Outstanding, Options		$ 5.70
Options granted	$ 2.10	1.42
Options exercised		$ 3.50
Average Remaining Contractual Life (Years)
Outstanding		9 years 6 months 14 days
Granted		9 years 10 months 9 days
Aggregate Intrinsic Value
Outstanding, Options		$ 1,338,418

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Stock Options (Details Narrative) - USD ($)		1 Months Ended	3 Months Ended		9 Months Ended		12 Months Ended
	Aug. 06, 2013	Sep. 15, 2011	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Options granted	1,640,000	1,170,000
Stock option expense			$ 212,300	$ 108,894	$ 760,308	$ 132,454
Remaining unvested stock expenses			$ 2,483,880		$ 2,483,880		$ 1,743,208
Stock options granted					324,318
Stock options grants exercise price					$ 2.10
Stock Options [Member]
Stock options granted					324,318		2,041,603
Stock options grants exercise price					$ 2.10		$ 1.42
Stock Options [Member] | Minimum [Member]
Stock options grants exercise price					2.01		1.18
Stock Options [Member] | Maximum [Member]
Stock options grants exercise price					$ 3.00		$ 2.00

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Related Party Transactions (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Related Party Transaction [Line Items]
Rent expense	$ 53,968	$ 53,120	$ 161,903	$ 106,240
Rental income			4,120
Accounts payable related parties	3,326,927		3,326,927		$ 1,309,946
Due to related parties	5,891,328		5,891,328		3,159,516
Raw materials	2,837,485		2,837,485		543,373
3U Millikan, LLC [Member]
Related Party Transaction [Line Items]
Rent expense	54,231	52,650	$ 122,337	$ 157,950
Yangzhou Finway Energy Tech Co. [Member]
Related Party Transaction [Line Items]
Ownership percentage by Lu Family			49.00%	51.00%
Purchases from related parties	2,436,009	3,583	$ 3,820,126	$ 9,843
Due to related parties	3,315,527		3,315,527		1,309,946
Quailhurst Vineyard Estates [Member]
Related Party Transaction [Line Items]
Purchases from related parties	4,600	$ 220	15,100	$ 3,177
Due to related parties	11,400		11,400		$ 0
Yangzhou Finway Manufacturing [Member]
Related Party Transaction [Line Items]
Raw materials	$ 1,113,720		$ 1,113,720

XML

Subsequent events (Details Narrative)	Oct. 05, 2018 USD ($) Number shares	Sep. 30, 2018 shares	Dec. 31, 2017 shares
Common stock, outstanding | shares		45,263,070	45,263,070
Subsequent Event [Member]
Description of reverse stock split ratio	<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif">1-for-100 reverse stock split of its outstanding common stock</font></p>
Cash payment in lieu of fractional shares | Number	176
Description of terms of reverse stock split	<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">As a result of the reverse stock split, shareholders who prior to the reverse stock split held less than 100 shares are no longer shareholders of the Issuer.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Immediately following the reverse stock split, the Issuer effected a 100-for-1 forward stock split for those shareholders who, following the reverse stock split, held at least one (1) whole share of common stock.</font></p>
Number of stockholder eligible for reverse stock split | Number	175
Effective date	Oct. 05, 2018
Common stock, outstanding | shares	45,251,600
previous common stock outstanding | $	$ 45,263,070