Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended |
Jun. 30, 2014 | |
Document and Entity Information | ' |
Entity Registrant Name | 'Blue Earth, Inc. |
Document Type | '10-Q |
Document Period End Date | 30-Jun-14 |
Amendment Flag | 'false |
Entity Central Index Key | '0001422109 |
Current Fiscal Year End Date | '--12-31 |
Entity Common Stock, Shares Outstanding | 72,725,555 |
Entity Filer Category | 'Accelerated Filer |
Entity Current Reporting Status | 'Yes |
Entity Voluntary Filers | 'No |
Entity Well-known Seasoned Issuer | 'No |
Document Fiscal Year Focus | '2014 |
Document Fiscal Period Focus | 'Q2 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
CURRENT ASSETS | ' | ' |
Cash | $4,414,394 | $8,403,731 |
Accounts receivable, net | 4,027,867 | 5,844,119 |
Costs and revenues in excess of billings | 2,471,833 | 395,442 |
Inventory, net | 609,704 | 383,799 |
Construction in progress | 2,426,128 | 2,254,902 |
Other receivables | 2,223,759 | 2,195,554 |
Prepaid expenses and deposits | 1,612,608 | 1,936,743 |
Total Current Assets | 17,786,293 | 21,414,290 |
PROPERTY AND EQUIPMENT, net | 47,653,535 | 858,212 |
OTHER ASSETS | ' | ' |
Deposits | 55,331 | 50,692 |
Long term receivables | 913,741 | ' |
Construction in progress (noncurrent) | ' | 44,035,500 |
Contracts and technology, net | 22,207,010 | 19,820,580 |
Assets of discontinued operations | ' | 251,492 |
Total Other Assets | 23,176,082 | 64,158,264 |
TOTAL ASSETS | 88,615,910 | 86,430,766 |
CURRENT LIABILITIES | ' | ' |
Accounts payable | 2,303,446 | 2,658,368 |
Current portion of notes payable | 555,537 | 1,504,476 |
Related party payables | 1,333,147 | 1,337,151 |
Billings in excess of revenues | ' | 438,952 |
Deferred revenues | 9,584 | 11,993 |
Accrued expenses | 362,876 | 422,456 |
Payroll expenses payable | 53,504 | 125,052 |
Preferred dividends payable | 9,298 | 403,690 |
Liabilities of discontinued operations | ' | 190,609 |
Total Current Liabilities | 4,627,392 | 7,092,747 |
Total Liabilities | 4,627,392 | 7,092,747 |
Commitments and contingencies | ' | ' |
STOCKHOLDERS' EQUITY | ' | ' |
Preferred stock value | 7 | 570 |
Common stock value | 72,726 | 60,206 |
Additional paid-in capital | 159,655,802 | 143,605,036 |
Stock subscription receivable | 1,124,220 | 1,600,000 |
Accumulated deficit | -74,615,797 | -62,727,793 |
Total Stockholders' Equity | 83,988,518 | 79,338,019 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $88,615,910 | $86,430,766 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Balance Sheet | ' | ' |
Preferred stock, par value | $0.00 | $0.00 |
Preferred stock, shares authorized | 25,000,000 | 25,000,000 |
Preferred stock, shares issued | 472,900 | 570,000 |
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 72,725,555 | 60,205,843 |
Common stock, shares outstanding | 72,725,555 | 60,205,843 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Income Statement | ' | ' | ' | ' |
REVENUES | $3,560,572 | $2,534,967 | $6,794,789 | $4,698,297 |
COST OF SALES | 2,127,049 | 1,698,314 | 3,915,358 | 3,141,921 |
GROSS PROFIT | 1,433,523 | 836,653 | 2,879,431 | 1,556,376 |
OPERATING EXPENSES | ' | ' | ' | ' |
Depreciation and amortization | 1,206,360 | 600,822 | 2,282,386 | 1,198,682 |
General and administrative | 4,840,865 | 5,996,465 | 10,673,798 | 7,869,302 |
Total Operating Expenses | 6,047,225 | 6,597,287 | 12,956,184 | 9,067,984 |
LOSS FROM OPERATIONS | -4,613,702 | -5,760,634 | -10,076,753 | -7,511,608 |
OTHER INCOME (EXPENSE) | ' | ' | ' | ' |
Other income | 4,158 | ' | 5,098 | ' |
Interest expense | -102,297 | -224,700 | -337,881 | -296,074 |
Gain (loss) on settlement of debt | ' | -648,245 | ' | -637,097 |
Gain (loss) on sale of assets | ' | ' | -11,235 | ' |
Total Other Income (Expense) | -98,139 | 423,545 | -321,548 | 341,023 |
LOSS BEFORE INCOME TAXES | -4,711,841 | -5,337,089 | -10,398,301 | -7,170,585 |
INCOME TAX EXPENSE | ' | ' | ' | ' |
LOSS FROM CONTINUING OPERATIONS | -4,711,841 | -5,337,089 | -10,398,301 | -7,170,585 |
GAIN (LOSS) FROM DISCONTINUED OPERATIONS | ' | -3,054 | ' | -46,975 |
NET LOSS | -4,711,841 | -5,340,143 | -10,398,301 | -7,217,560 |
PREFERRED DIVIDENDS | -1,096,815 | -509,175 | -1,489,703 | -658,341 |
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS | ($5,808,656) | ($5,849,318) | ($11,888,004) | ($7,875,901) |
BASIC AND DILUTED LOSS PER SHARE, Continuing Operations | ($0.07) | ($0.23) | ($0.17) | ($0.32) |
BASIC AND DILUTED LOSS PER SHARE, Discontinued Operations | ' | $0 | ' | $0 |
NET LOSS PER SHARE | ($0.07) | ($0.23) | ($0.17) | ($0.32) |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING BASIC AND DILUTED | 65,782,587 | 23,665,659 | 63,866,054 | 22,469,825 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 6 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
OPERATING ACTIVITIES | ' | ' |
Net loss | ($10,398,301) | ($7,217,560) |
Adjustments to reconcile net loss to net cash used in operating activities: | ' | ' |
Stock option and warrants issued for services | 1,936,357 | 3,782,658 |
(Gain) loss on settlement of debt | ' | 637,097 |
(Gain) loss on sale of assets | 11,235 | ' |
Stock issued for services | 1,400,714 | 257,388 |
Depreciation and amortization | 2,282,386 | 1,197,853 |
Amortization of debt discount | ' | 58,366 |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable and billings in excess | -1,173,880 | -868,672 |
Inventory | -225,905 | -20,331 |
Construction in progress | -171,226 | -2,313,905 |
Prepaid expenses and deposits | 319,496 | 384,982 |
Accounts payable and accrued expenses | -927,411 | -1,301,776 |
Net Cash Used in Operating Activities | -6,969,005 | -6,678,094 |
Net Cash Provided by (Used in) Discontinued Operating Activities | ' | -64,672 |
INVESTING ACTIVITIES | ' | ' |
Other receivables (2) | 61,795 | ' |
Purchase of property and equipment | 2,688,446 | 12,460 |
Net Cash Used in Investing Activities | -2,626,651 | -12,460 |
Net Cash Used in Discontinued Investing Activities | -17,882 | ' |
FINANCING ACTIVITIES | ' | ' |
Proceeds from warrants and options exercised | 5,568,957 | 1,872,088 |
Repayment of line of credit | 1,324,336 | 1,500,000 |
Proceeds from related party loans | ' | 420,000 |
Proceeds from notes payable | 183,622 | ' |
Proceeds from preferred stock | ' | 8,832,200 |
Cash received on stock subscriptions | 1,145,880 | ' |
Proceeds from line of credit | 96,884 | 1,500,000 |
Repayment of notes payable | 42,802 | 512,253 |
Repayment of related party loans | 4,004 | 691,853 |
Net Cash Provided by Financing Activities | 5,624,201 | 9,920,182 |
Net Cash Provided by (Used in) Discontinued Financing Activities | ' | -10,647 |
NET INCREASE (DECREASE) IN CASH | -3,989,337 | 3,154,309 |
CASH AT BEGINNING OF PERIOD | 8,403,731 | 659,009 |
CASH AT END OF PERIOD | 4,414,394 | 3,813,318 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | ' | ' |
Cash paid for Interest | 136,447 | 232,809 |
NON CASH FINANCING ACTIVITIES: | ' | ' |
Common stock issued upon conversion of debt | ' | 201,822 |
Common stock issued for conversion of preferred stock | 1,884,095 | 540,399 |
Common stock issued for equipment | ' | 195,360 |
Common stock issued for acquisition of subsidiary | 4,602,500 | ' |
Common stock issued for debt discount | ' | 24,500 |
Common stock issued for line of credit fee | ' | 100,000 |
Common stock cancelled for assets | ' | -1,291,746 |
Debt issued for equipment | $137,693 | ' |
Condensed_Financial_Statements
Condensed Financial Statements | 3 Months Ended |
Jun. 30, 2014 | |
Notes | ' |
Condensed Financial Statements | ' |
NOTE 1 - CONDENSED FINANCIAL STATEMENTS | |
The accompanying financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows at June 30, 2014 and 2013, and for all periods presented herein, have been made. | |
Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s December 31, 2013 audited financial statements. The results of operations for the periods ended June 30, 2014 and 2013 are not necessarily indicative of the operating results for the full year. |
Significant_Accounting_Policie
Significant Accounting Policies | 3 Months Ended |
Jun. 30, 2014 | |
Notes | ' |
Significant Accounting Policies | ' |
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES | |
Inventory | |
Inventory is recorded at the lower of cost or market (net realizable value) using the average cost method. The inventory on hand as of June 30, 2014 consists of solar panels, battery components, motors, controllers, miscellaneous refrigeration parts and raw gasket material at costs of $609,704. The Company does not have any work in progress. | |
Use of Estimates | |
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. | |
Recent Accounting Pronouncements | |
The Company has evaluated recent accounting pronouncements and their adoption has not had, nor is expected to have a material impact on the Company’s financial position, or statements. |
Significant_Events
Significant Events | 3 Months Ended |
Jun. 30, 2014 | |
Notes | ' |
Significant Events | ' |
NOTE 3 - SIGNIFICANT EVENTS | |
Issuances of Common Stock | |
During the six months ended June 30, 2014, the Company issued 6,308,329 shares of its common stock upon the conversion of 563,000 shares of preferred stock and accrued dividends of $1,321,095. On February 12, 2014 the Company issued an aggregate of 1,750,000 shares of its common stock (including 1,725,000 shares for personal goodwill) to acquire all of the outstanding shares of Kenmont Solutions Capital GP, LLC a company owned by Donald Kendall, Jr. Thereupon the Company formed Blue Earth Capital, Inc. to operate as its finance raising subsidiary. The shares were valued at $2.63 per share. (See Note 5). The Company issued 3,898,422 common shares upon the exercise of warrants and options for cash and net subscriptions receivable of $6,239,056. The Company issued 562,961 common shares for services valued at $1,400,714. | |
Credit Line Payable | |
During the six months ended June 30, 2014, the Company repaid $1,324,336 on the line of credit. The line of credit is for up to $10,000,000 subject to approval of the use of proceeds by the lender. The line of credit accrues interest at 12% per annum and is secured by the Company’s assets. | |
Related Party Notes Payable | |
During the six months ended June 30, 2014, the Company also repaid $4,004 of principal on related party notes payable. The related party notes payable are due on demand, accrue interest at 12% per annum and are unsecured. | |
Loan Receivable | |
On August 30, 2013 the Company entered into a Strategic Partnership Agreement with Talesun Solar USA, Ltd. (“Talesun”) and New Generation Power LLC (“NGP”), as amended on October 23, 2013 which includes a commitment from Talesun to grant the Company engineering, procurement and construction contracts (“EPC”) for 18 MW of Talesun Solar PV projects. NGP granted the Company EPC contracts for a minimum of 147 MW of projects over the next 20 months. In addition, the Company had agreed to make a $6.5 million loan in solar projects. $2,000,000 was loaned as of December 31, 2013 and the balance was due by March 31, 2014, unless extended by the parties. The loan is collateralized by safe harbored solar panels to be utilized on NGP’s solar projects. NGP contracts with the Company to build the solar projects on a cost plus basis. The loan is to be repaid during the construction phase of the projects. On June 30, 2014 the Company agreed to accept solar panels in satisfaction of the loan receivable. |
Stock_Purchase_Warrants_and_Op
Stock Purchase Warrants and Options | 3 Months Ended | ||||||||||||
Jun. 30, 2014 | |||||||||||||
Notes | ' | ||||||||||||
Stock Purchase Warrants and Options | ' | ||||||||||||
NOTE 4 - STOCK PURCHASE WARRANTS AND OPTIONS | |||||||||||||
A summary of the Company’s warrant activity during the periods ended December 31, 2013 and June 30, 2014 is presented below: | |||||||||||||
Weighted | |||||||||||||
Weighted | Average | ||||||||||||
Average | Remaining | Aggregate | |||||||||||
No. of | Exercise | Contractual | Intrinsic | ||||||||||
Warrants | Price | Term | Value | ||||||||||
Balance Outstanding, December 31, 2012 | 19,807,876 | $ | 1.63 | 7.04 | $ | 32,194,216 | |||||||
Granted | 3,600,000 | 1.18 | 10 | ||||||||||
Granted | 3,000,000 | 0.01 | 10 | ||||||||||
Granted | 2,400,000 | 1.18 | 10 | ||||||||||
Granted | 1,400,000 | 0.01 | 10 | ||||||||||
Granted | 1,000,000 | 1 | 10 | ||||||||||
Granted | 200,000 | 0.01 | 10 | ||||||||||
Granted | 200,000 | 2 | 5 | ||||||||||
Granted | 250,000 | 0.01 | 5 | ||||||||||
Granted | 2,300,000 | 0.01 | 10 | ||||||||||
Granted | 4,292,500 | 3 | 3 | ||||||||||
Granted | 4,029,154 | 6 | 3 | ||||||||||
Granted | 430,902 | 1.75 | 5 | ||||||||||
Forfeited | -9,276,906 | -2.4 | -- | ||||||||||
Exercised | -8,001,119 | -1.6 | -- | ||||||||||
Balance Outstanding, December 31, 2013 | 25,632,407 | 1.69 | 6.52 | $ | 40,983,200 | ||||||||
Exercised | -4,476,429 | -1.75 | -- | ||||||||||
Forfeited | (1,200,00) | -2.5 | -- | ||||||||||
Balance Outstanding June 30, 2014 | 19,955,978 | $ | 1.59 | 6.02 | $ | 33,673,669 | |||||||
Exercisable, June 30, 2014 | 14,280,978 | $ | 2.36 | 4.9 | $ | 31,728,169 | |||||||
A summary of the Company’s option activity during the periods ended December 31, 2013 and June 30, 2014 is presented below: | |||||||||||||
Weighted | |||||||||||||
Weighted | Average | ||||||||||||
Average | Remaining | Aggregate | |||||||||||
No. of | Exercise | Contractual | Intrinsic | ||||||||||
Options | Price | Term | Value | ||||||||||
Balance Outstanding, December 31, 2012 | 960,761 | $ | 1.58 | 8.2 | $1,520,695 | ||||||||
Granted | 10,000 | 2.3 | 10 | ||||||||||
Granted | 100,000 | 2.9 | 10 | ||||||||||
Expired | -52,720 | 1.37 | -- | ||||||||||
Exercised | -6,751 | 1.57 | -- | ||||||||||
Balance Outstanding, December 31, 2013 | 1,011,290 | 1.85 | 8.22 | $1,851,695 | |||||||||
Granted | 1,500,000 | 2 | 10 | ||||||||||
Granted | 150,000 | 3 | 10 | ||||||||||
Granted | 52,720 | 1.37 | 10 | ||||||||||
Forfeited | -90,002 | 1.57 | 10 | ||||||||||
Exercised | -77,720 | 1.34 | 10 | ||||||||||
Balance Outstanding, June 30, 2014 | 2,546,288 | $ | 2.08 | 9.28 | $5,301,605 | ||||||||
Exercisable, June 30, 2014 | 750,051 | $ | 2.06 | 7.47 | $1,544,885 | ||||||||
Acquisitions_Note
Acquisitions, Note | 3 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Notes | ' | |||||||
Acquisitions, Note | ' | |||||||
NOTE 5 - ACQUISITIONS | ||||||||
Effective January 31, 2014, Blue Earth Capital. Inc., “BEC”, a newly formed subsidiary of the Company, entered into a merger agreement with Kenmont Solutions Capital GP, LLC “KSC” wherein BEC purchased all of the issued and outstanding shares of KSC for 1,750,000 shares of restricted common stock of the Company issued to Donald R. Kendall, Jr. the founder of KSC. These shares were valued based on the quoted market price on the effective date of the transaction, at $2.63 per share, or $4,602,500. The cost of assets acquired was capitalized and is to be amortized over the estimated useful life of 3 years. The Company purchased KSC to gain access to the knowledge and lending base accumulated over the years by the founder of KSC. | ||||||||
Purchase Price | Shares | Price | Total | |||||
Kenmont Solutions Capital GP, LLC | 1,750,000 | $2.63 | $ | 4,602,500 | ||||
Total Purchase Price | 4,602,500 | |||||||
Tangible Assets Acquired | - | |||||||
Total Liabilities Assumed | - | |||||||
Lender base | $ | 4,602,500 | ||||||
The pro forma, consolidated balance sheets and statements of operations of Blue Earth, Inc. and Kenmont Solutions Capital GP, LLC are omitted because KSC had no operations prior to the acquisition by BEC. |
Discontinued_Operations_Note
Discontinued Operations, Note | 3 Months Ended |
Jun. 30, 2014 | |
Notes | ' |
Discontinued Operations, Note | ' |
NOTE 6 - DISCONTINUED OPERATIONS | |
On January 24, 2014, the Company entered into an Acquisition Agreement (the Agreement). Pursuant to the Agreement, the buyers purchased from the Company, all of the issued and outstanding common stock of HVAC Controls Specialties, Inc. (HVAC), its wholly-owned subsidiary. The purchase price for HVAC was $160,000 to be paid as follows: $40,000 for the release of accrued compensation, $30,000 for the assumption of the debts of HVAC and $90,000 in the form of a promissory note. Accordingly, the Company’s financial statements have been retroactively restated for all periods presented to reflect the assets, liabilities and operations of HVAC as discontinued. |
Property_and_Equipment_Note
Property and Equipment, Note | 3 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Notes | ' | |||||||
Property and Equipment, Note | ' | |||||||
NOTE 7 - PROPERTY AND EQUIPMENT | ||||||||
The major classes of assets as of June 30, 2014 and December 31, 2013 are as follows: | ||||||||
2014 | 2013 | |||||||
Office and computer equipment | $ | 344,459 | $ | 323,185 | ||||
Software | 96,727 | 95,831 | ||||||
Manufacturing and installation equipment | 412,601 | 402,063 | ||||||
Leasehold improvements | 759,304 | 759,304 | ||||||
Cogeneration plants (under construction) | 46,658,436 | - | ||||||
Vehicles | 423,205 | 262,011 | ||||||
Sub Total | 48,694,732 | 1,842,493 | ||||||
Accumulated Depreciation | -1,041,197 | -984,282 | ||||||
Net | $ | 47,653,535 | $ | 858,212 | ||||
Depreciation expense was $66,316 and $39,134, for the six months ended June 30, 2014 and 2013, respectively. Approximately $423,205 of the Company’s property and equipment serves as security against its long-term debt. Depreciation of the cogeneration plants will commence when the plants are placed in service during the latter part of 2014 and early 2015. |
Commitments_and_Contingencies
Commitments and Contingencies | 3 Months Ended |
Jun. 30, 2014 | |
Notes | ' |
Commitments and Contingencies | ' |
NOTE 8 - COMMITMENTS AND CONTINGENCIES | |
Equipment Purchase Commitments | |
The Company has entered into equipment purchase agreements whereby it has committed to paying approximately $19,356,424 for electrical co-generation equipment. The Company has made deposits of approximately 7% ($1,383,672) included in construction in progress-short term) toward the purchase of the equipment. The balance of the purchase price will be due upon acceptance of the equipment by the Company in accordance with progress payments as set out in the purchase contracts. | |
Pending Arbitrations | |
The Company and two consultants, have filed demands for arbitration with the American Arbitration Association. Consultants allege that the Company, specifically Johnny R. Thomas, CEO, have violated the "no disparagement" clause of their Consulting Agreement dated February 17, 2014 with the Company. They alleged that the Company interfered with the ability of the Consultants to perform their consulting duties. The Company alleges that the Consultants failed to perform consulting work as required and never intended to perform under the consulting agreement. The Company expects to prevail in this arbitration proceeding and does not expect said action to have any material adverse consequences to the Company. | |
The Company has filed a demand for arbitration with the AAA and National Energy Partners and its subsidiary, Hawaii Solar, LLC, (“NEP”) has counter-claimed. The Company alleges that NEP is in arrears on the payment of EPC services performed by the Company for construction work on the 24 schools in Hawaii contracted for between the parties. The Company further alleges that NEP provided deficient design drawings and interfered with the construction of the projects and engaged in negligence, fraud and/or willful misconduct. NEP alleges that the Company has failed to perform the contracted EPC services in a timely, proper manner and desires to validate termination of the contract in the arbitration process. The Company expects to prevail in this dispute, which would result in no material adverse consequences to the Company, other than legal costs and a delay in the recognition of revenue. However, if NEP prevails, the Company is likely to lose about $1.6 million on the work performed to date, as well as a possibility of limited damage payments also. On August 6, 2014, the Company commenced a civil action for declaratory and injunctive relief and damages against NEP. Subsequent to the Company commencing the above-described arbitration, it learned that NEP did not possess a Hawaii contractor license. The Company then withdrew its demand for arbitration without prejudice. The Company is seeking damages in excess of $1,300,000 and a declaratory judgment and injunctive relief that the subcontracts are invalid, void and unenforceable, the arbitration provision in the subcontracts is unenforceable and the pending arbitration should be terminated. |
Operating_Segments_Note
Operating Segments, Note | 3 Months Ended | ||||||||||||
Jun. 30, 2014 | |||||||||||||
Notes | ' | ||||||||||||
Operating Segments, Note | ' | ||||||||||||
NOTE 9 - OPERATING SEGMENTS | |||||||||||||
Operating segments are defined as components of an enterprise about which separate and discreet financial information is available and is evaluated regularly by the chief operating decision-maker in assessing performance and determining how to best allocate Company resources. The Company’s chief operating decision makers direct the allocation of resources to operating segments based on the profitability and cash flows of each respective segment. | |||||||||||||
The Company has two principal operating segments: (1) energy efficiency and technology and (2) construction of energy facilities owned by third parties. Later this year, a third segment will be introduced when power is produced from facilities built and owned by the Company. These operating segments were delineated based on the nature of the products and services offered. | |||||||||||||
The Company evaluates the financial performance of the respective segments based on several factors, of which the primary measure is business segment income before taxes. All significant intercompany transactions and balances have been eliminated. The following tables show the operations of the Company’s reportable segments for the six months ended June 30, 2014 and 2013: | |||||||||||||
Energy | |||||||||||||
Efficiency and Technology | Construction | Corporate | Consolidated | ||||||||||
30-Jun-14 | |||||||||||||
Revenues | $ | 3,307,672 | $ | 3,487,117 | $ | -- | $ | 6,794,789 | |||||
Cost of sales | 1,234,039 | 2,681,319 | -- | 3,915,358 | |||||||||
Depreciation and amortization | 696,665 | 943,686 | 642,035 | 2,282,386 | |||||||||
General and administrative | 3,205,392 | 1,961,396 | 5,507,011 | 10,673,798 | |||||||||
Other income (expense) | -39,212 | 158,059 | -440,395 | -321,548 | |||||||||
Net income (loss) | $ | -1,867,636 | $ | -1,941,225 | $ | -6,589,441 | $ | -10,398,302 | |||||
Total assets | $ | 1,923,552 | $ | 7,619,491 | $ | 79,072,866 | $ | 88,615,909 | |||||
Energy | Construction and | ||||||||||||
Efficiency | Maintenance | Corporate | Consolidated | ||||||||||
30-Jun-13 | |||||||||||||
Revenues | $ | 1,538,188 | $ | 3,160,109 | $ | - | $ | 4,698,297 | |||||
Cost of sales | 621,999 | 2,519,922 | - | 3,141,921 | |||||||||
Depreciation and amortization | 257,726 | 930,235 | 10,721 | 1,198,682 | |||||||||
General and administrative | 1,349,120 | 1,195,919 | 5,324,263 | 7,869,302 | |||||||||
Other (expense) | -15,868 | - | 356,891 | 341,023 | |||||||||
Net income (loss) | $ | -706,525 | $ | -1,485,967 | $ | -4,978,093 | $ | -7,170,585 | |||||
Total assets | $ | 1,059,816 | $ | 5,087,734 | $ | 13,236,612 | $ | 19,384,162 | |||||
Subsequent_Events
Subsequent Events | 3 Months Ended |
Jun. 30, 2014 | |
Notes | ' |
Subsequent Events | ' |
NOTE 10 - SUBSEQUENT EVENTS | |
In April 2014 the Company signed a binding asset purchase agreement to sell the Waianae Solar project in Hawaii for $2,070,000. The closing is scheduled to occur in or about August 2014. Company had impaired the cost of the project as included in construction in progress at June 30, 2014 to the net realizable value of $2,070,000 accordingly the sale will result in no gain or loss. | |
Subsequent to June 30, 2014 the Company issued 78,400 common shares upon the conversion of 7,000 Series C preferred stock and the related accrued dividends. The Company also issued 25,050 common shares upon the exercise of 25,060 warrants for cash at $2.50 per share. | |
On July 17, 2014 the Company’s Board of Directors granted 180,000 stock purchase options to various employees. The options have a term of 10 years, an exercise price of $2.27 to $2.45 per share and various vesting periods. | |
At a shareholder meeting held on July 18, 2014, the Company’s shareholders approved an increase in the authorized common stock to 500,000,000 shares. | |
On July 28, 2014, the Company entered into a definitive asset purchase agreement to purchase certain assets in a partially completed solar project in Indianapolis, Indiana for $1,000,000. $250,000 was deposited into escrow and $750,000 is due upon the sale of the completed project. | |
In accordance with ASC 855-10, the Company’s management has reviewed all material events and there are no additional material subsequent events to report. |
Significant_Accounting_Policie1
Significant Accounting Policies: Inventory, Policy (Policies) | 3 Months Ended |
Jun. 30, 2014 | |
Policies | ' |
Inventory, Policy | ' |
Inventory | |
Inventory is recorded at the lower of cost or market (net realizable value) using the average cost method. The inventory on hand as of June 30, 2014 consists of solar panels, battery components, motors, controllers, miscellaneous refrigeration parts and raw gasket material at costs of $609,704. The Company does not have any work in progress. |
Significant_Accounting_Policie2
Significant Accounting Policies: Use of Estimates (Policies) | 3 Months Ended |
Jun. 30, 2014 | |
Policies | ' |
Use of Estimates | ' |
Use of Estimates | |
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. |
Significant_Accounting_Policie3
Significant Accounting Policies: Recent Accounting Pronouncements (Policies) | 3 Months Ended |
Jun. 30, 2014 | |
Policies | ' |
Recent Accounting Pronouncements | ' |
Recent Accounting Pronouncements | |
The Company has evaluated recent accounting pronouncements and their adoption has not had, nor is expected to have a material impact on the Company’s financial position, or statements. |
Stock_Purchase_Warrants_and_Op1
Stock Purchase Warrants and Options: Schedule of Stockholders' Equity Note, Warrants (Tables) | 3 Months Ended | ||||||||||
Jun. 30, 2014 | |||||||||||
Tables/Schedules | ' | ||||||||||
Schedule of Stockholders' Equity Note, Warrants | ' | ||||||||||
Weighted | |||||||||||
Weighted | Average | ||||||||||
Average | Remaining | Aggregate | |||||||||
No. of | Exercise | Contractual | Intrinsic | ||||||||
Warrants | Price | Term | Value | ||||||||
Balance Outstanding, December 31, 2012 | 19,807,876 | $ | 1.63 | 7.04 | $ | 32,194,216 | |||||
Granted | 3,600,000 | 1.18 | 10 | ||||||||
Granted | 3,000,000 | 0.01 | 10 | ||||||||
Granted | 2,400,000 | 1.18 | 10 | ||||||||
Granted | 1,400,000 | 0.01 | 10 | ||||||||
Granted | 1,000,000 | 1 | 10 | ||||||||
Granted | 200,000 | 0.01 | 10 | ||||||||
Granted | 200,000 | 2 | 5 | ||||||||
Granted | 250,000 | 0.01 | 5 | ||||||||
Granted | 2,300,000 | 0.01 | 10 | ||||||||
Granted | 4,292,500 | 3 | 3 | ||||||||
Granted | 4,029,154 | 6 | 3 | ||||||||
Granted | 430,902 | 1.75 | 5 | ||||||||
Forfeited | -9,276,906 | -2.4 | -- | ||||||||
Exercised | -8,001,119 | -1.6 | -- | ||||||||
Balance Outstanding, December 31, 2013 | 25,632,407 | 1.69 | 6.52 | $ | 40,983,200 | ||||||
Exercised | -4,476,429 | -1.75 | -- | ||||||||
Forfeited | (1,200,00) | -2.5 | -- | ||||||||
Balance Outstanding June 30, 2014 | 19,955,978 | $ | 1.59 | 6.02 | $ | 33,673,669 | |||||
Exercisable, June 30, 2014 | 14,280,978 | $ | 2.36 | 4.9 | $ | 31,728,169 |
Stock_Purchase_Warrants_and_Op2
Stock Purchase Warrants and Options: Schedule of Stockholders' Equity, Options (Tables) | 3 Months Ended | ||||||||||||
Jun. 30, 2014 | |||||||||||||
Tables/Schedules | ' | ||||||||||||
Schedule of Stockholders' Equity, Options | ' | ||||||||||||
Weighted | |||||||||||||
Weighted | Average | ||||||||||||
Average | Remaining | Aggregate | |||||||||||
No. of | Exercise | Contractual | Intrinsic | ||||||||||
Options | Price | Term | Value | ||||||||||
Balance Outstanding, December 31, 2012 | 960,761 | $ | 1.58 | 8.2 | $1,520,695 | ||||||||
Granted | 10,000 | 2.3 | 10 | ||||||||||
Granted | 100,000 | 2.9 | 10 | ||||||||||
Expired | -52,720 | 1.37 | -- | ||||||||||
Exercised | -6,751 | 1.57 | -- | ||||||||||
Balance Outstanding, December 31, 2013 | 1,011,290 | 1.85 | 8.22 | $1,851,695 | |||||||||
Granted | 1,500,000 | 2 | 10 | ||||||||||
Granted | 150,000 | 3 | 10 | ||||||||||
Granted | 52,720 | 1.37 | 10 | ||||||||||
Forfeited | -90,002 | 1.57 | 10 | ||||||||||
Exercised | -77,720 | 1.34 | 10 | ||||||||||
Balance Outstanding, June 30, 2014 | 2,546,288 | $ | 2.08 | 9.28 | $5,301,605 | ||||||||
Exercisable, June 30, 2014 | 750,051 | $ | 2.06 | 7.47 | $1,544,885 |
Acquisitions_Note_Schedule_of_
Acquisitions, Note: Schedule of Business Acquisitions (Tables) | 3 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Tables/Schedules | ' | |||||||
Schedule of Business Acquisitions | ' | |||||||
Purchase Price | Shares | Price | Total | |||||
Kenmont Solutions Capital GP, LLC | 1,750,000 | $2.63 | $ | 4,602,500 | ||||
Total Purchase Price | 4,602,500 | |||||||
Tangible Assets Acquired | - | |||||||
Total Liabilities Assumed | - | |||||||
Lender base | $ | 4,602,500 |
Property_and_Equipment_Note_Sc
Property and Equipment, Note: Schedule of Major Classes of Assets (Tables) | 3 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Tables/Schedules | ' | |||||||
Schedule of Major Classes of Assets | ' | |||||||
2014 | 2013 | |||||||
Office and computer equipment | $ | 344,459 | $ | 323,185 | ||||
Software | 96,727 | 95,831 | ||||||
Manufacturing and installation equipment | 412,601 | 402,063 | ||||||
Leasehold improvements | 759,304 | 759,304 | ||||||
Cogeneration plants (under construction) | 46,658,436 | - | ||||||
Vehicles | 423,205 | 262,011 | ||||||
Sub Total | 48,694,732 | 1,842,493 | ||||||
Accumulated Depreciation | -1,041,197 | -984,282 | ||||||
Net | $ | 47,653,535 | $ | 858,212 |
Operating_Segments_Note_Schedu
Operating Segments, Note: Schedule of Segment Reporting Information, by Segment (Tables) | 3 Months Ended | ||||||||||||
Jun. 30, 2014 | |||||||||||||
Tables/Schedules | ' | ||||||||||||
Schedule of Segment Reporting Information, by Segment | ' | ||||||||||||
Energy | |||||||||||||
Efficiency and Technology | Construction | Corporate | Consolidated | ||||||||||
30-Jun-14 | |||||||||||||
Revenues | $ | 3,307,672 | $ | 3,487,117 | $ | -- | $ | 6,794,789 | |||||
Cost of sales | 1,234,039 | 2,681,319 | -- | 3,915,358 | |||||||||
Depreciation and amortization | 696,665 | 943,686 | 642,035 | 2,282,386 | |||||||||
General and administrative | 3,205,392 | 1,961,396 | 5,507,011 | 10,673,798 | |||||||||
Other income (expense) | -39,212 | 158,059 | -440,395 | -321,548 | |||||||||
Net income (loss) | $ | -1,867,636 | $ | -1,941,225 | $ | -6,589,441 | $ | -10,398,302 | |||||
Total assets | $ | 1,923,552 | $ | 7,619,491 | $ | 79,072,866 | $ | 88,615,909 | |||||
Energy | Construction and | ||||||||||||
Efficiency | Maintenance | Corporate | Consolidated | ||||||||||
30-Jun-13 | |||||||||||||
Revenues | $ | 1,538,188 | $ | 3,160,109 | $ | - | $ | 4,698,297 | |||||
Cost of sales | 621,999 | 2,519,922 | - | 3,141,921 | |||||||||
Depreciation and amortization | 257,726 | 930,235 | 10,721 | 1,198,682 | |||||||||
General and administrative | 1,349,120 | 1,195,919 | 5,324,263 | 7,869,302 | |||||||||
Other (expense) | -15,868 | - | 356,891 | 341,023 | |||||||||
Net income (loss) | $ | -706,525 | $ | -1,485,967 | $ | -4,978,093 | $ | -7,170,585 | |||||
Total assets | $ | 1,059,816 | $ | 5,087,734 | $ | 13,236,612 | $ | 19,384,162 | |||||
Significant_Accounting_Policie4
Significant Accounting Policies: Inventory, Policy (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Details | ' | ' |
Inventory on hand | $609,704 | $383,799 |
Significant_Events_Details
Significant Events (Details) (USD $) | 3 Months Ended | 6 Months Ended | |||||||||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | |
Kenmont Solutions Capital GP | Issuances of Common Stock for Preferred Stock Conversions | Issuance of Common Stock for Exercise of warrants and options | Issuance of Common Stock for Services | Credit Line Payable | Related Party Notes Payable | Loan Receivable | |||||
Number of shares issued | ' | ' | ' | ' | 1,750,000 | 6,308,329 | 3,898,422 | 562,961 | ' | ' | ' |
Number of Preferred Stock Converted | ' | ' | ' | ' | ' | 563,000 | ' | ' | ' | ' | ' |
Accrued Dividends for Preferred Stock | ($1,096,815) | ($509,175) | ($1,489,703) | ($658,341) | ' | $1,321,095 | ' | ' | ' | ' | ' |
Value attributed to issuance | ' | ' | ' | ' | ' | ' | 6,239,056 | 1,400,714 | ' | ' | ' |
Line of credit repaid | ' | ' | 1,324,336 | 1,500,000 | ' | ' | ' | ' | 1,324,336 | ' | ' |
Amount of credit available subject to approval | ' | ' | ' | ' | ' | ' | ' | ' | 10,000,000 | ' | ' |
Related party notes repaid | ' | ' | 4,004 | 691,853 | ' | ' | ' | ' | ' | 4,004 | ' |
Loan receivable from a customer | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $2,000,000 |
Stock_Purchase_Warrants_and_Op3
Stock Purchase Warrants and Options: Schedule of Stockholders' Equity Note, Warrants (Details) (USD $) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Warrants outstanding | 19,955,978 | 25,632,407 | 19,807,876 |
Weighted average exercise price, warrants outstanding | $1.59 | $1.69 | $1.63 |
Aggregate intrinsic value, warrants outstanding | $33,673,669 | $40,983,200 | $32,194,216 |
Warrants exercised | -4,476,429 | -8,001,119 | ' |
Weighted average exercise price, warrants exercised | ($1.75) | ($1.60) | ' |
Warrants exercisable | 14,280,978 | ' | ' |
Weighted average exercise price, warrants exercisable | $2.36 | ' | ' |
Aggregate intrinsic value, warrants exercisable | $31,728,169 | ' | ' |
Grant (1) | ' | ' | ' |
Warrants granted | ' | 3,600,000 | ' |
Weighted average exercise price, warrants granted | ' | $1.18 | ' |
Grant (2) | ' | ' | ' |
Warrants granted | ' | 3,000,000 | ' |
Weighted average exercise price, warrants granted | ' | $0.01 | ' |
Grant (3) | ' | ' | ' |
Warrants granted | ' | 2,400,000 | ' |
Weighted average exercise price, warrants granted | ' | $1.18 | ' |
Grant (4) | ' | ' | ' |
Warrants granted | ' | 1,400,000 | ' |
Weighted average exercise price, warrants granted | ' | $0.01 | ' |
Grant (5) | ' | ' | ' |
Warrants granted | ' | 1,000,000 | ' |
Weighted average exercise price, warrants granted | ' | $1 | ' |
Grant (6) | ' | ' | ' |
Warrants granted | ' | 200,000 | ' |
Weighted average exercise price, warrants granted | ' | $0.01 | ' |
Grant (7) | ' | ' | ' |
Warrants granted | ' | 200,000 | ' |
Weighted average exercise price, warrants granted | ' | $2 | ' |
Grant (8) | ' | ' | ' |
Warrants granted | ' | 250,000 | ' |
Weighted average exercise price, warrants granted | ' | $0.01 | ' |
Grant (9) | ' | ' | ' |
Warrants granted | ' | 2,300,000 | ' |
Weighted average exercise price, warrants granted | ' | $0.01 | ' |
Grant (10) | ' | ' | ' |
Warrants granted | ' | 4,292,500 | ' |
Weighted average exercise price, warrants granted | ' | $3 | ' |
Grant (11) | ' | ' | ' |
Warrants granted | ' | 4,029,154 | ' |
Weighted average exercise price, warrants granted | ' | $6 | ' |
Grant (12) | ' | ' | ' |
Warrants granted | ' | 430,902 | ' |
Weighted average exercise price, warrants granted | ' | $1.75 | ' |
Forfeit (1) | ' | ' | ' |
Warrants forfeited | -120,000 | -9,276,906 | ' |
Weighted average exercise price, warrants forfeited | ($2.50) | ($2.40) | ' |
Stock_Purchase_Warrants_and_Op4
Stock Purchase Warrants and Options: Schedule of Stockholders' Equity, Options (Details) (USD $) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Stock options outstanding | 2,546,288 | 1,011,290 | 960,761 |
Weighted average exercise price, options outstanding | $2.08 | $1.85 | $1.58 |
Weighted average remaining contractual term, options outstanding | 9.28 | 8.22 | 8.2 |
Aggregate intrinsic value, option outstanding | $5,301,605 | $1,851,695 | $1,520,695 |
Stock options expired | ' | -52,720 | ' |
Weighted average exercise price, options expired | ' | $1.37 | ' |
Weighted average exercise price, options exercised | $1.34 | $1.57 | ' |
Stock options forfeited | -90,002 | ' | ' |
Weighted average exercise price, options forfeited | $1.57 | ' | ' |
Stock options exercisable | 750,051 | ' | ' |
Weighted average exercise price, options exercisable | $2.06 | ' | ' |
Weighted average remaining contractual term, options exercisable | 7.47 | ' | ' |
Aggregate intrinsic value, options exercisable | $1,544,885 | ' | ' |
Grant (1) | ' | ' | ' |
Stock options granted | 1,500,000 | 10,000 | ' |
Weighted average exercise price, options granted | $2 | $2.30 | ' |
Grant (2) | ' | ' | ' |
Stock options granted | 150,000 | 100,000 | ' |
Weighted average exercise price, options granted | $3 | $2.90 | ' |
Grant (4) | ' | ' | ' |
Stock options granted | 52,720 | ' | ' |
Weighted average exercise price, options granted | $1.37 | ' | ' |
Acquisitions_Note_Schedule_of_1
Acquisitions, Note: Schedule of Business Acquisitions (Details) (Kenmont Solutions Capital GP, USD $) | 1 Months Ended |
Jan. 31, 2014 | |
Kenmont Solutions Capital GP | ' |
Common stock issued for acquisition | 1,750,000 |
Price per share issued for acquisition | $2.63 |
Total Purchase Price | $4,602,500 |
Discontinued_Operations_Note_D
Discontinued Operations, Note (Details) (USD $) | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2013 | Jun. 30, 2013 | Jun. 30, 2014 | |
Loan Receivable | |||
Sale of discountinued operations, total price | ($3,054) | ($46,975) | $160,000 |
Property_and_Equipment_Note_Sc1
Property and Equipment, Note: Schedule of Major Classes of Assets (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Property and Equipment, asset value | $48,694,732 | $1,842,493 |
Accumulated depreciation on property and equipment assets | -1,041,197 | -984,282 |
Property and equipment, asset value, Net | 47,653,535 | 858,212 |
Computer Equipment | ' | ' |
Property and Equipment, asset value | 344,459 | 323,185 |
Software and Software Development Costs | ' | ' |
Property and Equipment, asset value | 96,727 | 95,831 |
Other Machinery and Equipment | ' | ' |
Property and Equipment, asset value | 412,601 | 402,063 |
Leasehold Improvements | ' | ' |
Property and Equipment, asset value | 759,304 | 759,304 |
Cogeneration plants | ' | ' |
Property and Equipment, asset value | 46,658,436 | ' |
Vehicles | ' | ' |
Property and Equipment, asset value | $423,205 | $262,011 |
Property_and_Equipment_Note_De
Property and Equipment, Note (Details) (USD $) | 6 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Details | ' | ' |
Depreciation expense on property and equipment | $66,316 | $39,134 |
Value of property and equipment serving as security against debt | $423,205 | ' |
Commitments_and_Contingencies_
Commitments and Contingencies (Details) (Equipment purchase agreements, USD $) | Jun. 30, 2014 |
Equipment purchase agreements | ' |
Commitment to pay | $19,356,424 |
Operating_Segments_Note_Schedu1
Operating Segments, Note: Schedule of Segment Reporting Information, by Segment (Details) (USD $) | 6 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Segment Revenues | $6,794,789 | $4,698,297 |
Segment cost of sales | 3,915,358 | 3,141,921 |
Segment Depreciation and Amortization | 2,282,386 | 1,198,682 |
Segment General and Administrative Expense | 10,673,798 | 7,869,302 |
Segment other income (expense) | -321,548 | 341,023 |
Segment Net Income (loss) | -10,398,302 | -7,170,585 |
Segment total assets | 88,615,909 | 19,384,162 |
Energy Efficiency and Technology | ' | ' |
Segment Revenues | 3,307,672 | 1,538,188 |
Segment cost of sales | 1,234,039 | 621,999 |
Segment Depreciation and Amortization | 696,665 | 257,726 |
Segment General and Administrative Expense | 3,205,392 | 1,349,120 |
Segment other income (expense) | -39,212 | -15,868 |
Segment Net Income (loss) | -1,867,636 | -706,525 |
Segment total assets | 1,923,552 | 1,059,816 |
Construction | ' | ' |
Segment Revenues | 3,487,117 | 3,160,109 |
Segment cost of sales | 2,681,319 | 2,519,922 |
Segment Depreciation and Amortization | 943,686 | 930,235 |
Segment General and Administrative Expense | 1,961,396 | 1,195,919 |
Segment other income (expense) | 158,059 | ' |
Segment Net Income (loss) | -1,941,225 | ' |
Segment total assets | 7,619,491 | 5,087,734 |
Corporate Segment | ' | ' |
Segment Depreciation and Amortization | 642,035 | 10,721 |
Segment General and Administrative Expense | 5,507,011 | 5,324,263 |
Segment other income (expense) | -440,395 | 356,891 |
Segment Net Income (loss) | -6,589,441 | -4,978,093 |
Segment total assets | $79,072,866 | $13,236,612 |
Subsequent_Events_Details
Subsequent Events (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 | Aug. 13, 2014 | Aug. 13, 2014 | Aug. 13, 2014 | Jul. 18, 2014 | Aug. 13, 2014 |
Issuance of Common Stock upon Conversion of Series C Preferred Stock | Issuance of Common Stock for Warrants Exercised | Various employees | Various employees | Project in Indianapolis | |||
Number of shares issued | ' | ' | 78,400 | 25,050 | ' | ' | ' |
Number of Preferred Stock Converted | ' | ' | 7,000 | ' | ' | ' | ' |
Number of Warrants Exercised | ' | ' | ' | 25,060 | ' | ' | ' |
Stock purchase options granted | ' | ' | ' | ' | 180,000 | ' | ' |
Authorized common stock shares | 100,000,000 | 100,000,000 | ' | ' | ' | 500,000,000 | ' |
Purchase of certain assets | ' | ' | ' | ' | ' | ' | $1,000,000 |