Cleantech Biofuels (CLTH) 10-Q 5 Nov 15 2015 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2015	Nov. 04, 2015
Document And Entity Information
Entity Registrant Name	CleanTech Biofuels, Inc.
Entity Central Index Key	1,411,036
Document Type	10-Q
Document Period End Date	Sep. 30, 2015
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		87,488,413
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2,015

CONSOLIDATED BALANCE SHEETS (Un

CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Current Assets:
Cash and cash equivalents	$ 75,139	$ 162
Prepaids and other current assets	38,701	38,390
Total current assets	113,840	38,552
Property and equipment, net	0	0
Non-Current Assets:
Technology license	1,569,250	1,569,250
Patents	600,000	600,000
Total Assets	2,283,090	2,207,802
Current Liabilities:
Accounts payable	411,696	391,997
Accrued interest	687,316	555,189
Accrued payroll and professional fees	1,303,770	1,093,240
Notes payable, net	2,860,947	2,846,947
Total Current Liabilities	5,263,729	4,887,373
Note Payable - Long-Term	85,000	0
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock, $0.001 par value; 10,000,000 authorized shares; no shares issued or outstanding	0	0
Common stock, $0.001 par value; 240,000,000 authorized shares; 87,488,413 and 86,138,413 shares issued and outstanding at September 30, 2015 and December 31, 2014, respectively	87,488	86,138
Additional paid-in capital	7,178,514	7,089,664
Notes receivable - restricted common stock	(124,986)	(140,027)
Accumulated deficit	(10,206,655)	(9,715,346)
Total Stockholders' Equity (Deficit)	(3,065,639)	(2,679,571)
Total Liabilities and Stockholders' Equity (Deficit)	$ 2,283,090	$ 2,207,802

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Sep. 30, 2015	Dec. 31, 2014
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred Stock par value	$ 0.001	$ 0.001
Preferred Stock Shares Authorized	10,000,000	10,000,000
Preferred Stock Shares Issued	0	0
Preferred Stock Shares Outstanding	0	0
Common Stock par value	$ 0.001	$ 0.001
Common Stock Shares Authorized	240,000,000	240,000,000
Common Stock Shares Issued	87,488,413	86,138,413
Common Stock Shares Outstanding	87,488,413	86,138,413

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) - USD ($)	3 Months Ended				9 Months Ended
	Sep. 30, 2015		Sep. 30, 2014		Sep. 30, 2015	Sep. 30, 2014
Costs and expenses:
General and administrative	$ 88,278		$ 102,081		$ 273,974	$ 333,638
Professional fees	20,615		21,080		64,687	77,361
Operating Loss	108,893		123,161		338,661	410,999
Other expense (income):
Interest expense	52,544		50,444		152,607	146,340
Interest income, net of accrued interest written-off	(1,669)		3,002		41	(1,195)
Other expense (income) total	50,875		53,446		152,648	145,145
Income tax benefit	0		0		0	0
Net loss	$ 159,768		$ 176,607		$ 491,309	$ 556,144
Basic and diluted net loss per common share		[1]		[1]	$ 0.01	$ 0.01
Weighted average common shares outstanding	87,488,413		85,221,647		87,227,302	82,637,758
[1]	- less than $0.01

CONSOLIDATED STATEMENTS OF CHAN

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY(DEFICIT) (Unaudited) - 9 months ended Sep. 30, 2015 - USD ($)	Common Stock	Additional Paid-In Capital	Notes Rec-restricted Common Stock	Accumulated Deficit
Beginning Balance, Amount at Dec. 31, 2014	$ 86,138	$ 7,089,664	$ (140,027)	$ (9,715,346)
Beginning Balance, Shares at Dec. 31, 2014	86,138,413
Interest on Notes Receivable	$ 0	0	(5,008)	0
Issuance of restricted shares to employee at $0.01 per share, Amount	$ 500	4,700	0	0
Issuance of restricted shares to employee at $0.01 per share, Shares	500,000
Issuance of restricted shares to investors at $0.10/share, Amount	$ 1,000	99,000	0	0
Issuance of restricted shares to investors at $0.10/share, Shares	1,000,000
Expiration of Note Receivable in February at $0.10 per share, Amount	$ (150)	(14,850)	20,049	0
Expiration of Note Receivable in February at $0.10 per share, Shares	(150,000)
Net loss	$ 0	0	0	(491,309)
Ending Balance, Amount at Sep. 30, 2015	$ 87,488	$ 7,178,514	$ (124,986)	$ (10,206,655)
Ending Balance, Shares at Sep. 30, 2015	87,488,413

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Operating Activities
Net loss	$ (491,309)	$ (556,144)
Items that did not use (provide) cash:
Interest income, net of accrued interest written-off	41	(1,195)
Share-based compensation expense	0	2,128
Issuance of restricted common stock to employees, consultants or directors	5,200	40,000
Changes in operating assets and liabilities that provided (used) cash, net:
Prepaids and other current assets	(55)	(2,091)
Accounts payable	19,699	(11,363)
Other assets and other liabilities	152,127	145,660
Accrued liabilities	210,530	83,168
Net cash used by operating activities	(103,767)	(299,837)
Cash Flows Provided (Used) by Investing Activities
Expenditures for equipment	0	0
Net cash used by investing activities	0	0
Cash Flows Provided by Financing Activities
Advances - related parties	(256)	4,663
Issuance of Convertible Note Payable	85,000	100,000
Payment on Note Payable	(6,000)	0
Sale of common stock	100,000	222,500
Net cash provided by financing activities	178,744	327,163
Net increase (decrease) in cash and cash equivalents	74,977	27,326
Cash and cash equivalents at beginning of period	162	403
Cash and cash equivalents at end of period	75,139	27,729
Supplemental disclosure of cash flow information:
Cash paid for interest	479	681
Supplemental disclosure of noncash investing and financing activities:
Common stock issued to employees, directors and/or consultants	$ 5,200	$ 40,000

1. Organization and Business

1. Organization and Business	9 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
Note 1 - Organization and Business	Alternative Ethanol Technologies, Inc. (the “Company”), was incorporated in Delaware on December 20, 1996. Effective August 2, 2007, the Company changed its name to CleanTech Biofuels, Inc. On March 27, 2007, the Company acquired SRS Energy, Inc., a Delaware corporation (“SRS Energy”), pursuant to an Agreement and Plan of Merger and Reorganization. In accordance with the merger agreement, SRS Acquisition Sub, Inc., a Delaware corporation and wholly-owned subsidiary of the Company, merged with and into SRS Energy. The merger was consummated on May 31, 2007 and resulted in SRS Energy becoming a wholly-owned subsidiary of the Company. As a result of the merger, the stockholders of SRS Energy surrendered all of their issued and outstanding common stock and received shares of the Company’s common stock, $.001 par value per share (“Common Stock”). The former parent of SRS Energy, Supercritical Recovery Systems, Inc., immediately prior to the merger, distributed 78.8% of its 96% ownership in SRS Energy to its shareholders on a pro rata basis. For accounting purposes, because the Company had been a public shell company prior to the merger, the merger was treated as an acquisition of the Company and a recapitalization of SRS Energy. The Company is in its’ development stage and has been engaged in technology development and pre-operational activities since its formation. The Company is currently seeking outside sources of funding to design and build a commercial biomass recovery plant to provide biomass feedstock for customer evaluation and trial purchases. Initially, the biomass feedstock output is expected to be sold or provided to electric utilities, power and steam producers, and biofuel and chemical research firms for evaluation. In addition to research and development, the Company is also working towards licensing and/or developing potential commercial projects. These projects plan to focus on cleaning and separating municipal solid waste (also referred to as MSW) into its component parts in order to obtain: (i) a homogenous feedstock of cellulosic biomass for producing energy and other chemical products and (ii) recyclable products (metals, plastics, aluminum). The Company has no operating history as a producer of biomass or energy sources and has not constructed any plants to date. We have no revenues and will be required to secure outside funding in order to execute our business plan and commercialize our products. Our current cash is not sufficient to fund our current operations. Our liabilities are substantially greater than our current available funds and current assets. Although we continue to seek additional financing through the sale of additional equity, various government funding opportunities and/or possibly through strategic alliances with larger energy or waste management companies, we have not had recent success securing meaningful amounts of financing. The Company will require substantial additional financing to implement its business plan and it may be unable to obtain the capital required to do so. If we are not able to immediately and successfully raise additional capital and/or achieve profitability or positive cash flow, we may not be able to continue operations. The accompanying unaudited, consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Articles 8 and 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments, consisting of normal recurring items considered necessary for a fair presentation, have been included. Operating results for the three and nine months ended September 30, 2015 are not necessarily indicative of the results that may be expected for the year ended December 31, 2015. For further information, refer to the Company’s audited financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2014, filed with the Securities and Exchange Commission (“SEC”) on March 24, 2015.

2. Recent Accounting Pronouncem

2. Recent Accounting Pronouncements	9 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
Note 2 - Recent Accounting Pronouncements	In April 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ("ASU") No. 2015-03, "Simplifying the Presentation of Debt Issuance Costs." This ASU amends existing guidance to require the presentation of debt issuance costs in the balance sheet as a deduction from the carrying amount of the related debt liability instead of a deferred charge. It is effective for annual reporting periods beginning after December 15, 2015, but early adoption is permitted. The adoption of this guidance is not expected to have a material impact on our consolidated financial statements and related disclosures. In August 2014, the FASB issued ASU No. 2014-15, “Presentation of Financial Statements – Going Concern (Subtopic 205-40) – Disclosure of Uncertainties about an Entity’s ability to continue as a Going Concern.” This ASU provides guidance on determining when and how to disclose going-concern uncertainties in the financial statements and requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern within one year of the date the financial statements are issued. An entity must provide certain disclosures if conditions or events raise substantial doubt about the entity’s ability to continue as a going concern. This new guidance is effective for annual periods ending after December 15, 2016, and interim periods thereafter, with early adoption permitted. We are currently assessing the impact the guidance will have on our consolidated financial statements and related disclosures. In June 2014, the FASB issued ASU No. 2014-10, “Development Stage Entities (Topic 915) - Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation.” This ASU removes the definition of a development stage entity from the Master Glossary of the Accounting Standards Codification, thereby removing the financial reporting distinction between development stage entities and other reporting entities from U.S. GAAP. In addition, the amendments eliminate the requirements for development stage entities to (1) present inception-to-date information in the statements of income, cash flows, and shareholder equity, (2) label the financial statements as those of a development stage entity, (3) disclose a description of the development stage activities in which the entity is engaged, and (4) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage. This new guidance is effective for annual periods beginning on or after December 15, 2014 and interim periods within those years. Early application is permitted. The Company elected to early adopt this ASU for the annual period ended December 31, 2014. The adoption of this ASU allows the Company to remove the inception to date information and all references to development stage. In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers.” This ASU will supersede most of the existing revenue recognition requirements in U.S. GAAP and will require entities to recognize revenue at an amount that reflects the consideration to which the Company expects to be entitled in exchange for transferring goods or services to a customer. The new standard also specifies new accounting for costs associated with obtaining or fulfilling contracts with customers and expands the required disclosures related to revenue and cash flows from contracts with customers. This new guidance is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period and can be adopted either retrospectively to each prior reporting period presented or as a cumulative-effect adjustment as of the date of adoption, with early application not permitted. In August 2015, the FASB approved a one-year deferral of the effective date of this ASU. This standard will now become effective beginning with the first quarter 2018 and can be adopted either retrospectively to each prior reporting period presented or as a cumulative effect adjustment as of the date of adoption. The Company is currently evaluating the impact of adopting this new guidance on the consolidated financial statements. There were various other accounting standards updates recently issued, most of which represented technical corrections to the accounting literature or were applicable to specific industries, and are not expected to have a material impact on the Company's financial position, results of operations or cash flows.

3. Mergers_Acquisitions

3. Mergers/Acquisitions	9 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
Note 3 - Mergers/Acquisitions	On September 15, 2008, the Company consummated the acquisition of Biomass North America Licensing, Inc. (“Biomass”) pursuant to a merger between Biomass and a wholly-owned subsidiary of the Company (with Biomass as the surviving subsidiary of the Company) in accordance with an Agreement and Plan of Merger by and between the Company and Biomass. By virtue of the merger, the Company acquired a license agreement pursuant to which the Company holds a license in the United States and Canada to use patented technology licensed from Biomass North America, LLC, the former parent of Biomass (the “Licensor”), to clean and separate MSW (the “Biomass Recovery Process”). In July 2010, the United States Patent and Trademark Office issued US patent number 7,745,208 for this process (the “BRP Patent”). Upon consummation of the merger, the Company paid $20,000 in cash and issued a promissory note in the original principal amount of $80,000 bearing interest at an annual rate of 6% to a shareholder of the Licensor. This note has been paid in full. Additionally, the Company issued to the four shareholders of the Licensor a total of 1,895,000 shares of Common Stock and deposited an additional 4,000,000 shares of Common Stock into an escrow account (collectively, the “Shares”). The Shares were issued as part of the merger consideration received by the shareholders of the Licensor. In accordance with a November 2013 amendment, the Company has an exclusive license in the United States and Canada to use the Biomass Recovery Process and includes no performance requirements on the Company; the license agreement is for a term of 21 years from the date of the amendment or the life of any patent issued for the Biomass Recovery Process, including any amendments, modifications or extensions; the license requires that the Company pay a royalty in the amount of $2.00 per ton of MSW used in the Biomass Recovery Process to the Licensor; and the Company released the 4,000,000 shares of common stock to the Licensor previously held in escrow since the merger. The Company has recorded a long-term asset of approximately $1.6 million which it will begin to amortize upon utilizing the license in our operations.

4. Patent

4. Patent	9 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
Note 4 - Patent	The Company owns US Patent No. 6,306,248 (the “PSC Patent”), which is the underlying technology upon which the BRP Patent is based. The Company acquired the PSC Patent on October 22, 2008 pursuant to a Patent Purchase Agreement (“Agreement”) with World Waste Technologies, Inc. (“WWT”). As part of the acquisition of the PSC Patent, we also became the licensor of such technology under the existing license agreement between Bio-Products International, Inc., the licensee (“Bio-Products”) and WWT. The Company has paid WWT $600,000 and issued warrants to purchase 1,800,000 shares of Common Stock at $0.10 per share and 500,000 shares of Common Stock at $0.11 per share. WWT assigned all of its rights, title and interest in the note, warrants, security agreement and purchase agreement to Vertex Energy, Inc. (“Vertex”) as a result of a merger in March 2009. The warrants had an exercisable term of five years which expired on October 22, 2014. The cost of the PSC Patent acquisition of $600,000 is recorded as a long-term asset on the Balance Sheet. On September 1, 2010, the Company issued a promissory note to CMS Acquisition, LLC (“CMS”) in the amount of $100,000 and bearing interest at 6.0% per annum. The note is secured with a security interest in the PSC Patent. In connection with the financing, the Company issued a warrant to CMS to purchase 2,000,000 shares of Common Stock at a price of $0.05 per share. The warrant is exercisable at any time for five years from the date of issuance or re-issuance. The note was originally to mature on February 28, 2011. The Company and CMS have entered into various amendments extending the due date, the most recent of which was March 17, 2015, which extended the due date to September 17, 2016. As consideration in these amendments, the Company has: (i) paid $25,000 in February 2011 towards accrued interest to date and principal on the Note (ii) increased the interest rate to 10% as of May 15, 2011, (iii) re-dated the original warrants to March 17, 2015, (iv) issued new warrants for 300,000 shares of Common Stock with an exercise price of $0.05 and exercisable at any time until March 17, 2020, (v) issued new warrants for 150,000 shares of Common Stock with an exercise price of $0.10 and exercisable at any time until March 17, 2020, and (vi) the Company has approved the assignment of the note by CMS to the WL Meyer Legacy Trust as of the March 17, 2015 amendment.

5. Technology Licenses

5. Technology Licenses	9 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
Note 5 - Technology Licenses	Biomass North America Licensing, Inc. We own an exclusive license in the United States and Canada to use the Biomass Recovery Process (See Note 3 – Mergers/Acquisitions). We have recorded a long-term asset of approximately $1.6 million for the value of this license. Amortization of this asset will begin upon commencement of the use of the Biomass Recovery Process. In accordance with a November 2013 amendment, the Company has an exclusive license in the United States and Canada to use the Biomass Recovery Process and includes no performance requirements on the Company; the license agreement is for a term of 21 years from the date of the amendment or the life of any patent issued for the Biomass Recovery Process, including any amendments, modifications or extensions; and the license requires that the Company pay a royalty in the amount of $2.00 per ton of MSW used in the Biomass Recovery Process to the Licensor. Bio-Products International, Inc. As disclosed in Note 4 - Patent, the Company acquired the PSC Patent in 2008 and as a result, became the licensor to Bio-Products for the PSC Patent pursuant to a Master License Agreement dated as of August 18, 2003 (the “PSC License Agreement”). Pursuant to the terms of the PSC License Agreement, Bio-Products (a wholly-owned subsidiary of Clean Earth Solutions, Inc., “CES”) is the exclusive licensee of the PSC Patent and has the right to sublicense the technology that is part of the PSC Patent (but not the BRP Patent) to any party. In addition, we are entitled to be paid 5% of any revenue derived by Bio-Products from the use of the technology and 40% of any sublicensing fees paid to Bio-Products for the use of the technology. The Master License Agreement is for a term of 20 years that commenced on August 18, 2003. On September 22, 2010, the Company sent a Notice of Breach to Bio-Products, which included removing the exclusivity of the license. We received a response from Bio-Products on November 5, 2010 disputing our claims. In February 2011, we became aware that Bio-Products effected a transfer of the license in violation of the PSC License Agreement. As a result, on March 21, 2011, we sent a notice of termination to Bio-Products and the transferee terminating the License Agreement. In June 2011, Steve Vande Vegte, a shareholder in CES, filed a lawsuit against various parties, including the Company. The only Cause of Action against the Company is for Declaratory Relief seeking to avoid our March 2011 termination of the license to which Mr. Vande Vegte is not a party. On August 5, 2011, the Company filed a demurrer requesting that the court dismiss the case on the grounds that Mr. Vande Vegte lacks standing to pursue a claim concerning the license and that the claim raised in the complaint is not ripe. The court granted our demurrer to dismiss CleanTech from this lawsuit on December 8, 2011. All intangible assets are reviewed for impairment whenever events or other changes in circumstances indicate that the carrying amount may not be recoverable. An impairment charge is recognized if the carrying amount of an intangible asset exceeds its implied fair value.

6. Debt

6. Debt	9 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
Note 6 - Debt	Sep 30, 2015 Dec 31, 2014 Convertible Notes Payable (2009 Offering), which are made up of various individual notes with an aggregate face value of $199,790 on September 30, 2015 and $224,738 on December 31, 2014, due one year from date of note, 6.0% interest $ 199,790 $ 224,738 Convertible Notes Payable (11/10 Offering), which are made up of various individual notes with an aggregate face value of $1,874,074 on September 30, 2015 and $1,861,003 on December 31, 2014, due one year from date of note, 6.0% interest 1,874,074 1,861,003 WL Meyer Legacy Trust (fomerly CMS Acquisition LLC) Note Payable, with a face value of $77,696 due on September 17, 2016, interest at 6.0% thru May 15,2011; 10.0% thereafter 77,696 77,696 Convertible Notes Payable (5/12 Offering), made up of various individual notes with a face value of $583,510, due in 18 months from date of note, interest at 6.0% 583,510 583,510 Convertible Note Payable (2/14 Offering), which is made up of one note with a face value of $100,000 due in 18 months from date of note, interest at 6.0% 100,000 100,000 Convertible Note Payable (7.1.2015), which is made up of one note with a face value of $25,877, minimum quarterly payments of $3,000, interest at 6.0% 25,877 - Convertible Note Payable (2015 Offering), which is made up of one note with a face value of $85,000, due in 18 months from date of note, interest at 6.0% 85,000 - Total debt 2,945,947 2,846,947 Current maturities (2,860,947 ) (2,846,947 ) Long-term debt $ 85,000 $ - Convertible Notes Payable Offering Note Interest Rate Note Conversion Price Warrant Exercise Price Term Closed or Open 2008 Offering 6.0 % $ 0.25 $ 0.45 One-year Closed 2009 Offering 6.0 % $ 0.08 $ 0.30 One-year Closed 6/10 Offering 12.0 % $ 0.08 $ 0.30 One-year Closed 11/10 Offering 6.0 % $ 0.06 $ 0.30 One-year Closed 5/12 Offering 6.0 % $ 0.10 $ 0.35 18 months Closed 2/14 Offering 6.0 % $ 0.10 n/a 18 months Closed 2015 Offering 6.0 % $ 0.10 $ 0.15 18 months Open Each note holder retains the option of a cash repayment of the note plus interest, or the note can be converted at any time during the term of the note or prior to the closing of any Qualifying Equity Financing (minimum capital received of $5 million), into shares of Common Stock at the conversion price noted above. All notes have been recorded as debt (notes payable) in the financial statements, net of discounts for the conversion and warrant features (except for the 11/10, 5/12, 2/14, and 2015 Offerings which carried no discounts). See Subsequent Events footnote for further disclosure regarding our notes. 2008 Offering 2009 Offering 6/10 Offering 11/10 Offering 5/12 Offering 2/14 Offering 2015 Offering WL Meyer Legacy Trust (formerly CMS Acquisition, LLC) Note Payable 7.1.15 Convertible Note Payable The discounts on all notes payable have been amortized on a straight-line basis over the original term of each note. All discounts were fully amortized and expensed as of June 30, 2011. The following is a summary of warrants issued and outstanding as of the dates below, at the exercise price and the amount of shares of Common Stock (these warrants have not been exercised or converted to shares of Common Stock). Exercise September 30, December 31, Warrants issued to: Price 2015 2014 Noteholders, 11/10 Offering $ 0.30 842,221 798,649 Noteholders, 5/12 Offering $ 0.35 - 571,428 Noteholders, 2015 Offering $ 0.15 2,550,000 - Investors in Subscription Agrements (a) $ 0.15 16,605,000 13,605,000 WL Meyer Legacy Trust $ 0.05 2,300,000 2,300,000 WL Meyer Legacy Trust $ 0.10 150,000 - 22,447,221 17,275,077 (a) Warrants issued to investors under these Subscription Agreements can be exercised anytime within three years from date of Agreement. These warrants currently expire at various dates from August 2016 through May 2018.

7. Stockholders' Equity (Defici

7. Stockholders' Equity (Deficit)	9 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
Note 7 - Stockholders' Equity (Deficit)	In January 2014, the Company issued 500,000 restricted shares (at $0.012 per share) of our Common Stock per the consulting agreement with GWS Environmental Consultants. GWS has certain expertise and contacts in the collection, recycling, transfer, and disposal of MSW and will provide the Company consulting for a three-year period regarding these items. In April 2014, the Board approved a grant to certain Board members and management for an aggregate of 4,250,000 shares of restricted common stock (at $0.008 per share). In January 2015, the Board approved a grant to a member of management for 500,000 shares of restricted common stock ($0.01 per share). The Board granted these awards in recognition of the efforts of the recipients towards the furtherance and implementation of the Company’s strategic plan and to induce the recipients to continue those efforts on behalf of the Company. Based on the foregoing, the Board determined such grants were in the best interest of the Company and its stockholders. In September 2014, a note receivable from a former director matured and was not paid. The note was originally issued in September 2009 to purchase shares of our common stock. As a result, 150,000 shares of restricted common stock, issued at $0.10 per share were forfeited and cancelled. In February 2015, a note receivable from a former director matured and was not paid. The note was originally issued in February 2010 to purchase shares of our common stock. As a result, 150,000 shares of restricted common stock, issued at $0.10 per share were forfeited and cancelled. In October 2014, the Company issued 516,766 shares of restricted Common Stock ($0.08 per share) to an investor upon the conversion of a Convertible Note. Net Loss per share

8. Related Party Transactions

8. Related Party Transactions	9 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
Note 8 - Related Party Transactions	The Company has entered into stock purchase agreements with its executive officers and certain members of the Board of Directors (“Board”). The executive officers and directors issued notes to the Company in exchange for their stock purchases. These notes and accumulated interest are recorded as notes receivable in Stockholders’ Deficit. In September 2013, the Company hired, on a part-time basis, a Chief Technology Officer (CTO) and a VP-Business Development (VP-BD). These individuals maintain their engineering firm Fenton Engineering International (FEI) on a full-time basis and receive no salary in their part-time positions but are eligible for grants of stock options. We have used and continue to use their services. As of September 30, 2015, all amounts have been paid to FEI except for approximately $51,000. Two members of our current Board, James Russell and David Bransby, are parties in investments made in our convertible note offerings. As of September 30, 2015 and December 31, 2014, the aggregate amount of these investments, including interest, is approximately $667,000 and $557,000, respectively. Beginning in 2009, the Company has provided advances to two employees – Ed Hennessey and Mike Kime. Mr. Kime resigned from his positions with the Company effective June 21, 2010. As of both September 30, 2015 and December 31, 2014, the aggregate balances of advances totaled approximately $31,000. The balances are included in Prepaids and Other Current Assets on the Balance Sheet.

9. Share-based Payments

9. Share-based Payments	9 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
Note 9 - Share-based Payments	The Company recognizes share-based compensation expense for all share-based payment awards including stock options and restricted stock issued to employees, directors and consultants and is measured at the grant date, based on the estimated fair value of the award, and is recognized as expense over the requisite service period. The Company has no awards with market or performance conditions. The Company issued grants of restricted Common Stock: (i) in January 2015 for 500,000 shares to a member of management, (ii) in January 2014 for 500,000 shares to a consultant to provide services regarding the collection, recycling, transfer, and disposal of MSW, and (iii) in April 2014, to certain Board members and management for 4,250,000 shares. The shares issued to Board members and management were in recognition of the efforts of the recipients towards the furtherance and implementation of the Company’s strategic plan and to induce the recipients to continue those efforts on behalf of the Company. Total expense related to these grants for the nine months ended September 30, 2015 and 2014 were $5,200 and $40,000, respectively, and is included in our general and administrative expense and consulting expense, respectively. In March 2007, the Company assumed and adopted the 2007 Stock Option Plan (“Stock Plan”) for its employees, directors and consultants, which includes an equity compensation plan for non-employee directors pursuant to which stock options and shares of restricted stock may be granted. The Company currently has reserved a maximum of 14,000,000 shares of common stock to be issued for stock options or restricted shares awarded under the Stock Plan. In February 2015, the Company granted options under the Stock Plan to purchase an aggregate of 350,000 shares of Common Stock to a consultant in which one-half vested immediately and the remaining options vest in February 2016, with an exercise price of $0.10. As of September 30, 2015, none of these options were cancelled or expired and 175,000 shares of these options were vested. In September 2013, the Company granted options under the Stock Plan to purchase an aggregate of 1,000,000 shares of Common Stock to two part-time employees (newly hired CTO and VP–BD) in which one-third will vest ratably beginning in September 2014, with an exercise price of $0.10. As of September 30, 2015, none of these options were cancelled or expired and 666,667 shares of these options were vested. The following table provides a summary of the Company's share-based expense: Three months ended Nine months ended Sept 30, 2015 Sept 30, 2014 Sept 30, 2015 Sept 30, 2014 Pre-tax compensation expense: Stock options $ - $ 503 $ - $ 2,128 Warrants - - - - Total expense - 503 - 2,128 Tax benefit, net - - - - After-tax compensation expense $ - $ 503 $ - $ 2,128 The potential tax benefit realizable for the anticipated tax deductions of the exercise of share-based payment arrangements totaled approximately $312,000 at September 30, 2015 and December 31, 2014. However, due to the uncertainty that the tax benefits will be realized, these potential benefits were not recognized currently. As of September 30, 2015, there was no unrecognized compensation cost related to all current share-based payment arrangements. A summary of the Company's stock option activity and related information is set forth in the following table: Shares Under Option Weighted Average Exercise Price Aggregate intrinsic value Options outstanding at December 31, 2014 11,947,000 $ 0.10 (1) Granted 350,000 $ 0.10 Exercised - Forfeited - Options outstanding at September 30, 2015 12,297,000 $ 0.10 (1) Options exercisable at September 30, 2015 11,788,667 $ 0.10 (1) Unvested Options at September 30, 2015 508,333 $ 0.10 (1) (1) The weighted-average exercise price at September 30, 2015 and December 31, 2014 for all outstanding and exercisable options was greater than the fair value of the Company's common stock on that date, resulting in an aggregate intrinsic value of $-0-. The following table summarizes information about the Company's issuances of restricted stock under the Stock Plan: Restricted shares issued Weighted-Avg Exercise Price Balance as of December 31, 2014 1,320,000 0.10 Granted - Forfeited (150,000 ) 0.10 Balance as of September 30, 2015 1,170,000 0.10 Restricted stock vested as of September 30, 2015 1,170,000 0.10

10. Commitments and Contingenci

10. Commitments and Contingencies	9 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
Note 10 - Commitments and Contingencies	Commitments Lease – Contingencies The Company currently has no open litigation and/or claims.

11. Subsequent Events

11. Subsequent Events	9 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
Note 11 - Subsequent Events	All of the promissory notes in our 2009, 5/12 and 2/14 Offerings, and certain notes in our 11/10 Offering are now due. As of November 4, 2015, approximately $3.3 million is currently due, including interest. We plan to work with each remaining note holder to exchange, convert or repay these promissory notes. In August 2013, the Company commenced an offering of units, under a Subscription Agreement, at a purchase price of $1,000 per unit (Equity Offering 8/13). Each unit consists of: (i) 10,000 shares of the Company’s authorized but unissued restricted Common Stock and (ii) warrants to purchase 30,000 additional shares of Common Stock for a three year period from the date of issuance of the units at an initial exercise price of $0.15 per share. As of November 4, 2015, the Company has issued 5,535,000 restricted shares of our Common Stock in exchange for $553,500 in investment in this offering. In September 2015, the Company commenced a convertible note payable offering (2015 Offering). As of November 4, 2015, the Company has raised $85,000 of investment proceeds.

2. Recent Accounting Pronounc18

2. Recent Accounting Pronouncements (Policies)	9 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
Recent Accounting Pronouncements	In April 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ("ASU") No. 2015-03, "Simplifying the Presentation of Debt Issuance Costs." This ASU amends existing guidance to require the presentation of debt issuance costs in the balance sheet as a deduction from the carrying amount of the related debt liability instead of a deferred charge. It is effective for annual reporting periods beginning after December 15, 2015, but early adoption is permitted. The adoption of this guidance is not expected to have a material impact on our consolidated financial statements and related disclosures. In August 2014, the FASB issued ASU No. 2014-15, “Presentation of Financial Statements – Going Concern (Subtopic 205-40) – Disclosure of Uncertainties about an Entity’s ability to continue as a Going Concern.” This ASU provides guidance on determining when and how to disclose going-concern uncertainties in the financial statements and requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern within one year of the date the financial statements are issued. An entity must provide certain disclosures if conditions or events raise substantial doubt about the entity’s ability to continue as a going concern. This new guidance is effective for annual periods ending after December 15, 2016, and interim periods thereafter, with early adoption permitted. We are currently assessing the impact the guidance will have on our consolidated financial statements and related disclosures. In June 2014, the FASB issued ASU No. 2014-10, “Development Stage Entities (Topic 915) - Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation.” This ASU removes the definition of a development stage entity from the Master Glossary of the Accounting Standards Codification, thereby removing the financial reporting distinction between development stage entities and other reporting entities from U.S. GAAP. In addition, the amendments eliminate the requirements for development stage entities to (1) present inception-to-date information in the statements of income, cash flows, and shareholder equity, (2) label the financial statements as those of a development stage entity, (3) disclose a description of the development stage activities in which the entity is engaged, and (4) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage. This new guidance is effective for annual periods beginning on or after December 15, 2014 and interim periods within those years. Early application is permitted. The Company elected to early adopt this ASU for the annual period ended December 31, 2014. The adoption of this ASU allows the Company to remove the inception to date information and all references to development stage. In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers.” This ASU will supersede most of the existing revenue recognition requirements in U.S. GAAP and will require entities to recognize revenue at an amount that reflects the consideration to which the Company expects to be entitled in exchange for transferring goods or services to a customer. The new standard also specifies new accounting for costs associated with obtaining or fulfilling contracts with customers and expands the required disclosures related to revenue and cash flows from contracts with customers. This new guidance is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period and can be adopted either retrospectively to each prior reporting period presented or as a cumulative-effect adjustment as of the date of adoption, with early application not permitted. In August 2015, the FASB approved a one-year deferral of the effective date of this ASU. This standard will now become effective beginning with the first quarter 2018 and can be adopted either retrospectively to each prior reporting period presented or as a cumulative effect adjustment as of the date of adoption. The Company is currently evaluating the impact of adopting this new guidance on the consolidated financial statements. There were various other accounting standards updates recently issued, most of which represented technical corrections to the accounting literature or were applicable to specific industries, and are not expected to have a material impact on the Company's financial position, results of operations or cash flows.

6. Debt (Tables)

6. Debt (Tables)	9 Months Ended
	Sep. 30, 2015
Debt Tables
Debt	Sep 30, 2015 Dec 31, 2014 Convertible Notes Payable (2009 Offering), which are made up of various individual notes with an aggregate face value of $199,790 on September 30, 2015 and $224,738 on December 31, 2014, due one year from date of note, 6.0% interest $ 199,790 $ 224,738 Convertible Notes Payable (11/10 Offering), which are made up of various individual notes with an aggregate face value of $1,874,074 on September 30, 2015 and $1,861,003 on December 31, 2014, due one year from date of note, 6.0% interest 1,874,074 1,861,003 WL Meyer Legacy Trust (fomerly CMS Acquisition LLC) Note Payable, with a face value of $77,696 due on September 17, 2016, interest at 6.0% thru May 15,2011; 10.0% thereafter 77,696 77,696 Convertible Notes Payable (5/12 Offering), made up of various individual notes with a face value of $583,510, due in 18 months from date of note, interest at 6.0% 583,510 583,510 Convertible Note Payable (2/14 Offering), which is made up of one note with a face value of $100,000 due in 18 months from date of note, interest at 6.0% 100,000 100,000 Convertible Note Payable (7.1.2015), which is made up of one note with a face value of $25,877, minimum quarterly payments of $3,000, interest at 6.0% 25,877 - Convertible Note Payable (2015 Offering), which is made up of one note with a face value of $85,000, due in 18 months from date of note, interest at 6.0% 85,000 - Total debt 2,945,947 2,846,947 Current maturities (2,860,947 ) (2,846,947 ) Long-term debt $ 85,000 $ -
Convertible Notes Payable	Offering Note Interest Rate Note Conversion Price Warrant Exercise Price Term Closed or Open 2008 Offering 6.0 % $ 0.25 $ 0.45 One-year Closed 2009 Offering 6.0 % $ 0.08 $ 0.30 One-year Closed 6/10 Offering 12.0 % $ 0.08 $ 0.30 One-year Closed 11/10 Offering 6.0 % $ 0.06 $ 0.30 One-year Closed 5/12 Offering 6.0 % $ 0.10 $ 0.35 18 months Closed 2/14 Offering 6.0 % $ 0.10 n/a 18 months Closed 2015 Offering 6.0 % $ 0.10 $ 0.15 18 months Open
Schedule of warrants issued	Exercise September 30, December 31, Warrants issued to: Price 2015 2014 Noteholders, 11/10 Offering $ 0.30 842,221 798,649 Noteholders, 5/12 Offering $ 0.35 - 571,428 Noteholders, 2015 Offering $ 0.15 2,550,000 - Investors in Subscription Agrements (a) $ 0.15 16,605,000 13,605,000 WL Meyer Legacy Trust $ 0.05 2,300,000 2,300,000 WL Meyer Legacy Trust $ 0.10 150,000 - 22,447,221 17,275,077 (a) Warrants issued to investors under these Subscription Agreements can be exercised anytime within three years from date of Agreement. These warrants currently expire at various dates from August 2016 through May 2018.

9. Share-based Payments (Tables

9. Share-based Payments (Tables)	9 Months Ended
	Sep. 30, 2015
Share-based Payments Tables
Share-based expense	Three months ended Nine months ended Sept 30, 2015 Sept 30, 2014 Sept 30, 2015 Sept 30, 2014 Pre-tax compensation expense: Stock options $ - $ 503 $ - $ 2,128 Warrants - - - - Total expense - 503 - 2,128 Tax benefit, net - - - - After-tax compensation expense $ - $ 503 $ - $ 2,128
Stock Option Activity	Shares Under Option Weighted Average Exercise Price Aggregate intrinsic value Options outstanding at December 31, 2014 11,947,000 $ 0.10 (1) Granted 350,000 $ 0.10 Exercised - Forfeited - Options outstanding at September 30, 2015 12,297,000 $ 0.10 (1) Options exercisable at September 30, 2015 11,788,667 $ 0.10 (1) Unvested Options at September 30, 2015 508,333 $ 0.10 (1) (1) The weighted-average exercise price at September 30, 2015 and December 31, 2014 for all outstanding and exercisable options was greater than the fair value of the Company's common stock on that date, resulting in an aggregate intrinsic value of $-0-.
Issuances of restricted stock	Restricted shares issued Weighted-Avg Exercise Price Balance as of December 31, 2014 1,320,000 0.10 Granted - Forfeited (150,000 ) 0.10 Balance as of September 30, 2015 1,170,000 0.10 Restricted stock vested as of September 30, 2015 1,170,000 0.10

6. Debt (Details)

6. Debt (Details) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Debt
Total debt	$ 2,945,947	$ 2,846,947
Current maturities	(2,860,947)	$ (2,846,947)
Long-term portion, less current maturities	85,000
2009 Offering [Member]
Debt
Total debt	199,790	$ 224,738
11/10 Offering [Member]
Debt
Total debt	1,874,074	1,861,003
WL Meyer Legacy Trust (formerly CMS Acquisition LLC) [Member]
Debt
Total debt	77,696	77,696
05/12 Offering [Member]
Debt
Total debt	583,510	583,510
02/14 Offering [Member]
Debt
Total debt	100,000	100,000
7/1/2015 Offering [Member]
Debt
Total debt	25,877	0
2015 Offering [Member]
Debt
Total debt	$ 85,000	$ 0

6. Debt (Details 1)

6. Debt (Details 1)	9 Months Ended
	Sep. 30, 2015$ / shares
2008 Offering [Member]
Convertible promissory note and a warrant offering
Note Interest Rate	6.00%
Note Conversion Price	$ 0.25
Warrant Exercise Price	$ 0.45
Term	1 year
Closed or Open	Closed
2009 Offering [Member]
Convertible promissory note and a warrant offering
Note Interest Rate	6.00%
Note Conversion Price	$ 0.08
Warrant Exercise Price	$ 0.30
Term	1 year
Closed or Open	Closed
06/10 Offering [Member]
Convertible promissory note and a warrant offering
Note Interest Rate	12.00%
Note Conversion Price	$ 0.08
Warrant Exercise Price	$ 0.30
Term	1 year
Closed or Open	Closed
11/10 Offering [Member]
Convertible promissory note and a warrant offering
Note Interest Rate	6.00%
Note Conversion Price	$ 0.06
Warrant Exercise Price	$ 0.30
Term	1 year
Closed or Open	Closed
05/12 Offering [Member]
Convertible promissory note and a warrant offering
Note Interest Rate	6.00%
Note Conversion Price	$ 0.10
Warrant Exercise Price	$ 0.35
Term	18 months
Closed or Open	Closed
02/14 Offering [Member]
Convertible promissory note and a warrant offering
Note Interest Rate	6.00%
Note Conversion Price	$ 0.10
Warrant Exercise Price
Term	18 months
Closed or Open	Closed
2015 Offering [Member]
Convertible promissory note and a warrant offering
Note Interest Rate	6.00%
Note Conversion Price	$ .10
Warrant Exercise Price	$ 0.15
Term	18 months
Closed or Open	Open

6. Debt (Details 2)

6. Debt (Details 2) - shares	Sep. 30, 2015	Dec. 31, 2014
Warrants issued	22,447,221	17,275,077
Noteholders, 11/10 Offering [Member] | Exercise Price '0.30
Warrants issued	842,221	798,649
Noteholders, 5/12 Offering [Member] | Exercise Price 0.35 [Member]
Warrants issued	0	571,428
Noteholders, 2015 Offering [Member] | Exercise Price 0.15 [Member]
Warrants issued	2,550,000	0
Investors in Subscription Agreements | Exercise Price 0.15 [Member]
Warrants issued	16,605,000	13,605,000
WL Meyer Legacy Trust [Member] | Exercise Price 0.05 [Member]
Warrants issued	2,300,000	2,300,000
WL Meyer Legacy Trust [Member] | Exercise Price 0.10 [Member]
Warrants issued	150,000

7. Stockholders Equity (Deficit

7. Stockholders Equity (Deficit) (Detail Narrative) - shares	Sep. 30, 2015	Dec. 31, 2014
Stockholders Equity Deficit Detail Narrative
Anti-dilutive options, warrants and other convertible securities	86,000,000	78,000,000

8. Related Party Transactions (

8. Related Party Transactions (Details Narrative) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Aggregate balances of advances, employees	$ 31,000	$ 31,000
Aggregate amount of investments, including interest by board members	667,000	$ 557,000
FEI [Member]
Due to related party	$ 51,000

9. Share-based Payments (Detail

9. Share-based Payments (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Pre-tax compensation expense:
Stock options	$ 0	$ 503	$ 0	$ 2,128
Warrants	0	0	0	0
Total expense	0	503	0	2,128
Tax benefit, net	0	0	0	0
After-tax compensation expense	$ 0	$ 503	$ 0	$ 2,128

9. Share-based Payments (Deta27

9. Share-based Payments (Details 1)	9 Months Ended
	Sep. 30, 2015$ / sharesshares
Stock option activity
Options outstanding at December 31, 2014 | shares	11,947,000
Granted | shares	350,000
Exercised | shares	0
Forfeited | shares	0
Options outstanding at September 30, 2015 | shares	12,297,000
Options exercisable at September 30, 2015 | shares	11,788,667
Unvested Options at September 30, 2015 | shares	508,333
Options outstanding at December 31, 2014, weighted average exercise price	$ 0.10
Granted, weighted average exercise price	.10
Options outstanding at September 30, 2015, weighted average exercise price	.10
Options exercisable at September 30, 2015, weighted average exercise price	.10
Unvested Options at September 30, 2015, weighted average exercise price	.10
Options outstanding at December 31, 2014, Aggregate intrinsic value	(1)
Options outstanding at September 30, 2015, Aggregate intrinsic value	(1)
Options exercisable at September 30, 2015, Aggregate intrinsic value	(1)
Unvested Options at September 30, 2015, Aggregate intrinsic value	$ (1)

9. Share-based Payments (Deta28

9. Share-based Payments (Details 2) - Restricted Stock [Member]	9 Months Ended
	Sep. 30, 2015$ / sharesshares
Issuances of restricted stock
Balance as of December 31, 2014	1,320,000
Granted	0
Forfeited	(150,000)
Balance as of September 30, 2015	1,170,000
Restricted stock vested as of September 30, 2015	1,170,000
Restricted Stock - Weighted Average Price
Weighted Average Price as of December 31, 2014 | $ / shares	$ .10
Weighted Average Price, restricted stock forfeited | $ / shares	.10
Weighted Average Price as of September 30, 2015 | $ / shares	.10
Weighted Average Price, restricted stock vested as of September 30, 2015 | $ / shares	$ .10