Quest Resource Holding (QRHC) 10-Q 15 May 18 2018 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2018	May 01, 2018
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2018
Document Fiscal Year Focus	2,018
Document Fiscal Period Focus	Q1
Trading Symbol	QRHC
Entity Registrant Name	Quest Resource Holding Corporation
Entity Central Index Key	1,442,236
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		15,302,455

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 1,083,575	$ 1,055,281
Accounts receivable, less allowance for doubtful accounts of $470,652 and $699,102 as of March 31, 2018 and December 31, 2017, respectively	17,183,870	16,263,276
Prepaid expenses and other current assets	1,549,564	1,508,014
Total current assets	19,817,009	18,826,571
Goodwill	58,208,490	58,337,290
Intangible assets, net	4,038,168	5,031,595
Property and equipment, net, and other assets	1,344,199	1,320,342
Total assets	83,407,866	83,515,798
Current liabilities:
Accounts payable and accrued liabilities	17,076,484	14,253,818
Deferred revenue and other current liabilities	162,277	328,763
Total current liabilities	17,238,761	14,582,581
Revolving credit facility, net	5,100,957	6,763,497
Other long-term liabilities	8,814	21,990
Total liabilities	22,348,532	21,368,068
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.001 par value, 10,000,000 shares authorized, no shares issued or outstanding as of March 31, 2018 and December 31, 2017, respectively
Common stock, $0.001 par value, 200,000,000 shares authorized, 15,302,455 shares issued and outstanding as of March 31, 2018 and December 31, 2017	15,302	15,302
Additional paid-in capital	159,091,723	158,867,600
Accumulated deficit	(98,047,691)	(96,735,172)
Total stockholders’ equity	61,059,334	62,147,730
Total liabilities and stockholders’ equity	$ 83,407,866	$ 83,515,798

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (Unaudited) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Statement Of Financial Position [Abstract]
Allowance for doubtful accounts receivable	$ 470,652	$ 699,102
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	200,000,000	200,000,000
Common stock, shares issued	15,302,455	15,302,455
Common stock, shares outstanding	15,302,455	15,302,455

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Income Statement [Abstract]
Revenue	$ 24,695,923	$ 42,539,822
Cost of revenue	21,148,096	38,354,070
Gross profit	3,547,827	4,185,752
Operating expenses:
Selling, general, and administrative	3,751,760	4,980,095
Depreciation and amortization	984,581	1,000,734
Total operating expenses	4,736,341	5,980,829
Operating loss	(1,188,514)	(1,795,077)
Other expense:
Interest expense	(124,005)	(114,275)
Total other expense	(124,005)	(114,275)
Loss before taxes	(1,312,519)	(1,909,352)
Net loss	(1,312,519)	(1,909,352)
Net loss applicable to common stockholders	$ (1,312,519)	$ (1,909,352)
Net loss per share
Basic and diluted	$ (0.09)	$ (0.13)
Weighted average number of common shares outstanding
Basic and diluted	15,302,455	15,272,575

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED) - 3 months ended Mar. 31, 2018 - USD ($)	Total	Common Stock [Member]	Additional Paid-in Capital [Member]	Accumulated Deficit [Member]
Beginning Balance at Dec. 31, 2017	$ 62,147,730	$ 15,302	$ 158,867,600	$ (96,735,172)
Beginning Balance, Shares at Dec. 31, 2017		15,302,455
Stock-based compensation	224,123		224,123
Net loss	(1,312,519)			(1,312,519)
Ending Balance at Mar. 31, 2018	$ 61,059,334	$ 15,302	$ 159,091,723	$ (98,047,691)
Ending Balance, Shares at Mar. 31, 2018		15,302,455

CONDENSED CONSOLIDATED STATEME6

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Cash flows from operating activities:
Net loss	$ (1,312,519)	$ (1,909,352)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation	103,310	115,246
Amortization of intangibles	926,567	926,563
Amortization of debt issuance costs	23,475	7,825
Provision for doubtful accounts	39,915	100,000
Stock-based compensation	224,123	614,265
Changes in operating assets and liabilities:
Accounts receivable	(960,509)	1,915,997
Prepaid expenses and other current assets	(41,550)	84,907
Security deposits and other assets	128,785	193,329
Accounts payable and accrued liabilities	2,822,666	(4,169,411)
Deferred revenue and other liabilities	(166,700)	(324)
Net cash provided by (used in) operating activities	1,787,563	(2,120,955)
Cash flows from investing activities:
Purchase of property and equipment	(9,367)	(19,950)
Purchase of capitalized software development	(50,925)	(89,228)
Net cash used in investing activities	(60,292)	(109,178)
Cash flows from financing activities:
Proceeds from credit facilities	21,936,963	6,717,706
Repayments of credit facilities	(23,622,978)	(3,431,077)
Debt issuance costs		(234,522)
Repayments of capital lease obligations	(12,962)	(22,169)
Net cash provided by (used in) financing activities	(1,698,977)	3,029,938
Net increase in cash and cash equivalents	28,294	799,805
Cash and cash equivalents at beginning of period	1,055,281	1,328,174
Cash and cash equivalents at end of period	1,083,575	2,127,979
Supplemental cash flow information:
Cash paid for interest	74,394	68,749
Supplemental non-cash activities:
Sale of goodwill and intangible assets	246,585
Investment in Earth Media Partners, LLC	$ (246,585)
Repayment of Regions line of credit		(9,250,000)
ABL Facility [Member]
Supplemental non-cash activities:
Draw on Citizens ABL facility		9,250,000
Draw on Citizens ABL facility for repayment of capital lease obligation		212,609
Debt issuance costs financed with Citizens ABL facility		$ 234,985

The Company, Description of Bus

The Company, Description of Business, and Liquidity	3 Months Ended
	Mar. 31, 2018
Accounting Policies [Abstract]
The Company, Description of Business, and Liquidity	1. The Company, Description of Business, and Liquidity The accompanying condensed consolidated financial statements include the accounts of Quest Resource Holding Corporation (“QRHC”) and its subsidiaries, Quest Resource Management Group, LLC (“Quest”), Landfill Diversion Innovations, LLC (“LDI”), Youchange, Inc. (“Youchange”), Quest Vertigent Corporation (“QVC”), and Quest Vertigent One, LLC (“QV One”), and Quest Sustainability Services, Inc. (“QSS”) (collectively, “we,” “us,” “our,” or “our company”). Operations – We are a national provider of reuse, recycling, and disposal services that enable our customers to achieve and satisfy their environmental and sustainability goals and responsibilities. We provide businesses across multiple industry sectors with single source solutions for the reuse, recycling, and disposal of a wide variety of waste streams and recyclables generated by their operations. Liquidity – As of March 31, 2018 and December 31, 2017, our working capital balance was $2,578,248 and $4,243,990, respectively.

Summary of Significant Accounti

Summary of Significant Accounting Policies	3 Months Ended
	Mar. 31, 2018
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	2. Summary of Significant Accounting Policies Principles of Presentation and Consolidation The condensed consolidated financial statements included herein have been prepared by us without audit pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and should be read in conjunction with our audited financial statements for the year ended December 31, 2017. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted as permitted by the SEC, although we believe the disclosures that are made are adequate to make the information presented herein not misleading. The accompanying condensed consolidated financial statements reflect, in our opinion, all normal recurring adjustments necessary to present fairly our financial position at March 31, 2018 and the results of our operations and cash flows for the periods presented. We derived the December 31, 2017 condensed consolidated balance sheet data from audited financial statements; however, we did not include all disclosures required by GAAP. As Quest, LDI, Youchange, QVC, QV One, and QSS each operate as environmental based service companies, we did not deem segment reporting necessary. All intercompany accounts and transactions have been eliminated in consolidation. Interim results are subject to seasonal variations, and the results of operations for the three months ended March 31, 2018 are not necessarily indicative of the results to be expected for the full year. Net Loss Per Share We compute basic net loss per share by dividing net loss applicable to common stockholders by the weighted average number of shares of common stock outstanding during the period. We have other potentially dilutive securities outstanding that are not shown in a diluted net loss per share calculation because their effect in both 2018 and 2017 would be anti-dilutive. These potentially dilutive securities include stock options and warrants and totaled 3,497,424 and 3,313,907 shares at March 31, 2018 and 2017, respectively. The following table sets forth the anti-dilutive securities excluded from diluted loss per share: March 31, 2018 2017 (Unaudited) (Unaudited) Anti-dilutive securities excluded from diluted loss per share: Stock options 1,763,859 1,375,216 Warrants 1,733,565 1,938,691 Total anti-dilutive securities excluded from diluted loss per share 3,497,424 3,313,907 Recent Accounting Pronouncements Adopted In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606) Pending Adoption In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326) There have been no other recent accounting pronouncements or changes in accounting pronouncements that have been issued but not yet adopted that are of significance, or potential significance to us.

Property and Equipment, Net, an

Property and Equipment, Net, and Other Assets	3 Months Ended
	Mar. 31, 2018
Property Plant And Equipment [Abstract]
Property and Equipment, Net, and Other Assets	3. Property and Equipment, net, and Other Assets At March 31, 2018 and December 31, 2017, property and equipment, net, and other assets consisted of the following: March 31, December 31, 2018 2017 (Unaudited) Property and equipment, net of accumulated depreciation of $2,296,541 and $2,193,231 as of March 31, 2018 and December 31, 2017, respectively $ 862,924 $ 956,867 Security deposits and other assets 481,275 363,475 Property and equipment, net, and other assets $ 1,344,199 $ 1,320,342 We compute depreciation using the straight-line method over the estimated useful lives of the property and equipment. Depreciation expense for the three months ended March 31, 2018 was $103,310, inclusive of $45,296 of depreciation expense reflected within “Cost of revenue” in our condensed consolidated statement of operations as it related to assets used in directly servicing customer contracts. Depreciation expense for the three months ended March 31, 2017 was $115,246, inclusive of $41,075 of depreciation expense reflected within “Cost of revenue.” At March 31, 2018, the carrying value of our capital lease assets was $217,729, net of $282,368 of accumulated depreciation. At December 31, 2017, the carrying value of our capital lease assets was $243,778, net of $256,319 of accumulated depreciation. On February 20, 2018 (“Closing Date”), we entered into an Asset Purchase Agreement with Earth Media Partners, LLC to sell certain assets of our wholly owned subsidiary, Earth911, Inc., in exchange for a 19% interest in Earth Media Partners, LLC, which was recorded as an investment in the amount of $246,585 as of the Closing Date, and a potential future earn-out amount of approximately $350,000. The net assets sold related to the Earth911.com website business and consisted primarily of the website and its content and customers, deferred revenues, and accounts receivable as of the Closing Date. Earth911, Inc. was subsequently renamed Quest Sustainability Services, Inc. In addition to our investment in Earth Media Partners, LLC, we accrued a receivable in the amount of $8,086 related to the earn-out as of March 31, 2018. The carrying amount of our investment and the accrued earn-out receivable are included in other assets.

Goodwill and Other Intangible A

Goodwill and Other Intangible Assets	3 Months Ended
	Mar. 31, 2018
Goodwill And Intangible Assets Disclosure [Abstract]
Goodwill and Other Intangible Assets	4. Goodwill and Other Intangible Assets The components of goodwill and other intangible assets were as follows: March 31, 2018 (Unaudited) Estimated Useful Life Gross Carrying Amount Accumulated Amortization Net Finite lived intangible assets: Customer relationships 5 years $ 12,720,000 $ 11,978,000 $ 742,000 Trademarks 7 years 6,242,055 4,192,258 2,049,797 Patents 7 years 230,683 230,683 — Software 7 years 1,781,785 552,914 1,228,871 Customer lists 5 years 307,153 289,653 17,500 Total finite lived intangible assets $ 21,281,676 $ 17,243,508 $ 4,038,168 December 31, 2017 Estimated Useful Life Gross Carrying Amount Accumulated Amortization Net Finite lived intangible assets: Customer relationships 5 years $ 12,720,000 $ 11,342,000 $ 1,378,000 Trademarks 7 years 6,242,055 3,969,576 2,272,479 Patents 7 years 230,683 230,683 — Software 7 years 1,904,279 548,163 1,356,116 Customer lists 5 years 307,153 282,153 25,000 Total finite lived intangible assets $ 21,404,170 $ 16,372,575 $ 5,031,595 Carrying Amount Changes in goodwill: Goodwill balance at December 31, 2017 $ 58,337,290 Adjustment related to Earth911 asset sale (128,800 ) Goodwill balance at March 31, 2018 $ 58,208,490 We compute amortization using the straight-line method over the estimated useful lives of the finite lived intangible assets. Amortization expense related to finite lived intangible assets was $926,567 and $926,563 for the three months ended March 31, 2018 and 2017, respectively. We have no indefinite-lived intangible assets other than goodwill. The goodwill is not deductible for tax purposes. See Note 3 for discussion of sale of certain assets related to Earth911. We performed our annual impairment analysis for goodwill and other intangible assets in the second quarter of 2017 with no impairment recorded.

Accounts Payable and Accrued Li

Accounts Payable and Accrued Liabilities	3 Months Ended
	Mar. 31, 2018
Accounts Payable And Accrued Liabilities Current [Abstract]
Accounts Payable and Accrued Liabilities	5. Accounts Payable and Accrued Liabilities The components of Accounts payable and accrued liabilities were as follows: March 31, December 31, 2018 2017 (Unaudited) Accounts payable $ 15,827,780 $ 12,739,117 Accrued taxes 627,046 807,037 Employee compensation 289,853 434,358 Other 331,805 273,306 $ 17,076,484 $ 14,253,818

Revolving Credit Facility

Revolving Credit Facility	3 Months Ended
	Mar. 31, 2018
Debt Disclosure [Abstract]
Revolving Credit Facility	6. Revolving Credit Facility We entered into a Loan, Security and Guaranty Agreement (the “Citizens Loan Agreement”), dated as of February 24, 2017, with Citizens Bank, National Association as a lender, and as administrative agent, collateral agent, and issuing bank, which provides for an asset-based revolving credit facility (the “ABL Facility”) of up to $20 million and an equipment loan facility in the maximum principal amount of $2.0 million. Each loan under the ABL Facility bears interest, at our option, at either the Base Rate, as defined in the agreement, plus a margin ranging from 1.0% to 1.5% (6.25% as of March 31, 2018), or the LIBOR lending rate for the interest period in effect, plus a margin ranging from 2.0% to 2.5% (4.28% as of March 31, 2018). The maturity date of the revolving credit facility is February 24, 2022. Loans under the equipment loan facility may be requested at any time until February 24, 2019. Each loan under the equipment loan facility bears interest, at our option, at either the Base Rate, as defined in the agreement, plus 2.00%, or the LIBOR lending rate for the interest period in effect, plus 3.00%. The maturity date of the equipment loan facility is February 24, 2022. The ABL Facility contains certain specific financial covenants regarding a minimum liquidity requirement and a minimum fixed charge coverage ratio. The minimum fixed charge coverage ratio covenant applies commencing May 15, 2018, when the trailing 12-month period ending March 31, 2018 is reported. In addition, the ABL Facility contains negative covenants limiting, among other things, additional indebtedness, transactions with affiliates, additional liens, sales of assets, dividends, investments and advances, mergers and acquisitions, and other matters customarily restricted in such agreements. The amount of interest expense related to borrowings for the three months ended March 31, 2018 and 2017 was $84,288 and $110,381, respectively. Debt issuance cost of $469,507 is being amortized to interest expense over the life of the new revolving credit facility beginning March 1, 2017. As of March 31, 2018, the unamortized portion of the debt issuance costs was $367,781. The amount of interest expense related to the amortization of the discount on the revolving credit facility for was $23,475.

Capital Lease Obligations

Capital Lease Obligations	3 Months Ended
	Mar. 31, 2018
Debt Disclosure [Abstract]
Capital Lease Obligations	7. Capital Lease Obligations At March 31, 2018 and December 31, 2017, total capital lease obligations outstanding consisted of the following: March 31, December 31, 2018 2017 (Unaudited) Capital lease obligations, imputed interest at 4.88% to 13.29%, with monthly payments of approximately $6,000, expiring through September 2019, secured by computer and office equipment $ 28,701 $ 41,664 Total 28,701 41,664 Less: current maturities (27,132 ) (39,067 ) Long-term portion $ 1,569 $ 2,597 Our capital lease obligations are included within “Deferred revenue and other current liabilities” and “Other long-term liabilities” in our condensed consolidated balance sheets. The amount of interest expense related to our capital leases for the three months ended March 31, 2018 and 2017 was $618 and $2,462, respectively.

Revenue

Revenue	3 Months Ended
	Mar. 31, 2018
Revenue From Contract With Customer [Abstract]
Revenue	8. Revenue Operating Revenues We provide businesses with services to reuse, recycle, and dispose of a wide variety of waste streams and recyclables generated by their operations. In addition, we have product sales and other revenue primarily from sales of products such as antifreeze and windshield washer fluid as well as minor ancillary services. Revenue Recognition We recognize revenue as services are performed or products are delivered. For example, revenue is recognized as waste and recyclable material is collected or when products are delivered. We generally recognize revenues for the gross amount of consideration received as we are generally the primary obligor (or principal) in our contracts with customers as we hold complete responsibility to the customer for contract fulfillment. We previously had a contract accounted for as a net basis management fee contract, with revenue of $44,088 and gross billings of $1,294,459 for the three months ended March 31, 2017. This management fee contract ended in the second quarter of 2017, and we currently have no other net basis contracts. Disaggregation of Revenue The following table presents our revenue disaggregated by source. Sales and usage-based taxes are excluded from revenue. Three customers accounted for 48.4% of revenue for the three months ended March 31, 2018, and two customers accounted for 55.1% of revenue for the three months ended March 31, 2017. We operate primarily in the United States, with minor services in Canada. March 31, 2018 2017 (Unaudited) (Unaudited) Revenue Type: Services $ 22,005,572 $ 39,835,675 Product sales and other 2,690,351 2,704,147 Total Revenue $ 24,695,923 $ 42,539,822 Contract Balances Our incremental direct costs of obtaining a customer contract are generally deferred and amortized to selling, general, and administrative expense or as a reduction to revenue (depending on the nature of the cost) over the estimated life of the customer contract. Our contract acquisition costs are classified as current or noncurrent based on the timing of when we expect to recognize the amortization and are included in other assets. As of March 31, 2018 and December 31, 2017, we had $199,736 and $136,139, respectively, of deferred contract costs. During the three months ended March 31, 2018, we amortized $33,333 and $18,069 of deferred contract costs to selling, general, and administrative expense and as a reduction to income, respectively. During the three months ended March 31, 2017, we amortized $100,000 and $18,069 of deferred contract costs to selling, general and administrative expense and as a reduction to income, respectively. Certain customers are billed in advance, and, accordingly, recognition of related revenues is deferred as a contract liability until the services are provided and control transferred to the customer. As of March 31, 2018 and December 31, 2017, we had $142,389 and $309,089, respectively, of deferred revenue, the majority of which was classified in “Deferred revenue and other current liabilities.”

Income Taxes

Income Taxes	3 Months Ended
	Mar. 31, 2018
Income Tax Disclosure [Abstract]
Income Taxes	9. Income Taxes We compute income taxes using the asset and liability method in accordance with FASB ASC Topic 740, Income Taxes On December 22, 2017, The Tax Cuts and Jobs Act (the “2017 Act”) was enacted. The most significant impact to us of the 2017 Act was a decrease in the federal corporate income tax rate from 35% to 21% starting in 2018.

Fair Value of Financial Instrum

Fair Value of Financial Instruments	3 Months Ended
	Mar. 31, 2018
Fair Value Disclosures [Abstract]
Fair Value of Financial Instruments	10. Fair Value of Financial Instruments Our financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities, deferred revenue, revolving credit facility, and capital lease obligations. We do not believe that we are exposed to significant interest, currency, or credit risks arising from these financial instruments. The fair values of these financial instruments approximate their carrying values using Level 3 inputs, based on their short maturities or, for long-term portions of capital lease obligations and revolving credit facility, based on borrowing rates currently available to us for loans with similar terms and maturities.

Stockholders' Equity

Stockholders' Equity	3 Months Ended
	Mar. 31, 2018
Equity [Abstract]
Stockholders' Equity	11. Stockholders’ Equity Preferred Stock Our authorized preferred stock includes 10,000,000 shares of preferred stock with a par value of $0.001, of which no shares have been issued or are outstanding. Common Stock – Our authorized common stock includes 200,000,000 shares of common stock with a par value of $0.001, of which 15,302,455 shares were issued and outstanding as of March 31, 2018 and December 31, 2017. Warrants – At March 31, 2018, we had outstanding exercisable warrants to purchase 1,733,565 shares of common stock. The following table summarizes the warrants issued and outstanding as of March 31, 2018: Date of Exercise Shares of Description Issuance Expiration Price Common Stock Exercisable warrants Warrants 09/24/2014 09/24/2019 $ 20.00 1,125,005 Warrants 10/20/2014 10/20/2019 $ 20.00 87,500 Warrants 3/30/2016 03/30/2021 $ 3.88 521,060 Total warrants issued and outstanding 1,733,565 Employee Stock Purchase Plan – On September 17, 2014, our stockholders approved our 2014 Employee Stock Purchase Plan (“ESPP”). We recorded expense of $2,044 and $1,738 related to the ESPP during the three months ended March 31, 2018 and 2017, respectively. Stock Options – We recorded stock option expense of $222,079 and $193,777 for the three months ended March 31, 2018 and 2017, respectively. The following table summarizes the stock option activity for the three month period ended March 31, 2018: Stock Options Weighted- Exercise Average Number Price Per Exercise Price of Shares Share Per Share Outstanding at December 31, 2017 1,389,816 $1.17 — $26.00 $ 8.39 Granted 398,000 $2.39 — $2.39 $ 2.39 Canceled/Forfeited (23,957 ) $2.39 — $6.40 $ 2.65 Outstanding at March 31, 2018 1,763,859 $1.17 — $26.00 $ 7.12

Summary of Significant Accoun18

Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2018
Accounting Policies [Abstract]
Principles of Presentation and Consolidation	Principles of Presentation and Consolidation The condensed consolidated financial statements included herein have been prepared by us without audit pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and should be read in conjunction with our audited financial statements for the year ended December 31, 2017. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted as permitted by the SEC, although we believe the disclosures that are made are adequate to make the information presented herein not misleading. The accompanying condensed consolidated financial statements reflect, in our opinion, all normal recurring adjustments necessary to present fairly our financial position at March 31, 2018 and the results of our operations and cash flows for the periods presented. We derived the December 31, 2017 condensed consolidated balance sheet data from audited financial statements; however, we did not include all disclosures required by GAAP. As Quest, LDI, Youchange, QVC, QV One, and QSS each operate as environmental based service companies, we did not deem segment reporting necessary. All intercompany accounts and transactions have been eliminated in consolidation. Interim results are subject to seasonal variations, and the results of operations for the three months ended March 31, 2018 are not necessarily indicative of the results to be expected for the full year.
Net Loss Per Share	Net Loss Per Share We compute basic net loss per share by dividing net loss applicable to common stockholders by the weighted average number of shares of common stock outstanding during the period. We have other potentially dilutive securities outstanding that are not shown in a diluted net loss per share calculation because their effect in both 2018 and 2017 would be anti-dilutive. These potentially dilutive securities include stock options and warrants and totaled 3,497,424 and 3,313,907 shares at March 31, 2018 and 2017, respectively. The following table sets forth the anti-dilutive securities excluded from diluted loss per share: March 31, 2018 2017 (Unaudited) (Unaudited) Anti-dilutive securities excluded from diluted loss per share: Stock options 1,763,859 1,375,216 Warrants 1,733,565 1,938,691 Total anti-dilutive securities excluded from diluted loss per share 3,497,424 3,313,907
Recent Accounting Pronouncements	Recent Accounting Pronouncements Adopted In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606) Pending Adoption In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326) There have been no other recent accounting pronouncements or changes in accounting pronouncements that have been issued but not yet adopted that are of significance, or potential significance to us.

Summary of Significant Accoun19

Summary of Significant Accounting Policies (Tables)	3 Months Ended
	Mar. 31, 2018
Accounting Policies [Abstract]
Schedule of Anti-dilutive Securities Excluded from Diluted Loss Per Share	The following table sets forth the anti-dilutive securities excluded from diluted loss per share: March 31, 2018 2017 (Unaudited) (Unaudited) Anti-dilutive securities excluded from diluted loss per share: Stock options 1,763,859 1,375,216 Warrants 1,733,565 1,938,691 Total anti-dilutive securities excluded from diluted loss per share 3,497,424 3,313,907

Property and Equipment, Net, 20

Property and Equipment, Net, and Other Assets (Tables)	3 Months Ended
	Mar. 31, 2018
Property Plant And Equipment [Abstract]
Components Property and Equipment, Net, and Other Assets	At March 31, 2018 and December 31, 2017, property and equipment, net, and other assets consisted of the following: March 31, December 31, 2018 2017 (Unaudited) Property and equipment, net of accumulated depreciation of $2,296,541 and $2,193,231 as of March 31, 2018 and December 31, 2017, respectively $ 862,924 $ 956,867 Security deposits and other assets 481,275 363,475 Property and equipment, net, and other assets $ 1,344,199 $ 1,320,342

Goodwill and Other Intangible21

Goodwill and Other Intangible Assets (Tables)	3 Months Ended
	Mar. 31, 2018
Goodwill And Intangible Assets Disclosure [Abstract]
Schedule of Finite-Lived Intangible Assets	The components of goodwill and other intangible assets were as follows: March 31, 2018 (Unaudited) Estimated Useful Life Gross Carrying Amount Accumulated Amortization Net Finite lived intangible assets: Customer relationships 5 years $ 12,720,000 $ 11,978,000 $ 742,000 Trademarks 7 years 6,242,055 4,192,258 2,049,797 Patents 7 years 230,683 230,683 — Software 7 years 1,781,785 552,914 1,228,871 Customer lists 5 years 307,153 289,653 17,500 Total finite lived intangible assets $ 21,281,676 $ 17,243,508 $ 4,038,168 December 31, 2017 Estimated Useful Life Gross Carrying Amount Accumulated Amortization Net Finite lived intangible assets: Customer relationships 5 years $ 12,720,000 $ 11,342,000 $ 1,378,000 Trademarks 7 years 6,242,055 3,969,576 2,272,479 Patents 7 years 230,683 230,683 — Software 7 years 1,904,279 548,163 1,356,116 Customer lists 5 years 307,153 282,153 25,000 Total finite lived intangible assets $ 21,404,170 $ 16,372,575 $ 5,031,595
Schedule of Changes in Goodwill	Carrying Amount Changes in goodwill: Goodwill balance at December 31, 2017 $ 58,337,290 Adjustment related to Earth911 asset sale (128,800 ) Goodwill balance at March 31, 2018 $ 58,208,490

Accounts Payable and Accrued 22

Accounts Payable and Accrued Liabilities (Tables)	3 Months Ended
	Mar. 31, 2018
Accounts Payable And Accrued Liabilities Current [Abstract]
Components of Accounts Payable and Accrued Liabilities	The components of Accounts payable and accrued liabilities were as follows: March 31, December 31, 2018 2017 (Unaudited) Accounts payable $ 15,827,780 $ 12,739,117 Accrued taxes 627,046 807,037 Employee compensation 289,853 434,358 Other 331,805 273,306 $ 17,076,484 $ 14,253,818

Capital Lease Obligations (Tabl

Capital Lease Obligations (Tables)	3 Months Ended
	Mar. 31, 2018
Debt Disclosure [Abstract]
Summary of Capital Lease Obligations	At March 31, 2018 and December 31, 2017, total capital lease obligations outstanding consisted of the following: March 31, December 31, 2018 2017 (Unaudited) Capital lease obligations, imputed interest at 4.88% to 13.29%, with monthly payments of approximately $6,000, expiring through September 2019, secured by computer and office equipment $ 28,701 $ 41,664 Total 28,701 41,664 Less: current maturities (27,132 ) (39,067 ) Long-term portion $ 1,569 $ 2,597

Revenue (Tables)

Revenue (Tables)	3 Months Ended
	Mar. 31, 2018
Revenue From Contract With Customer [Abstract]
Summary of Revenue Disaggregated by Source	The following table presents our revenue disaggregated by source. March 31, 2018 2017 (Unaudited) (Unaudited) Revenue Type: Services $ 22,005,572 $ 39,835,675 Product sales and other 2,690,351 2,704,147 Total Revenue $ 24,695,923 $ 42,539,822

Stockholders' Equity (Tables)

Stockholders' Equity (Tables)	3 Months Ended
	Mar. 31, 2018
Equity [Abstract]
Summary of Warrants Issued and Outstanding	The following table summarizes the warrants issued and outstanding as of March 31, 2018: Date of Exercise Shares of Description Issuance Expiration Price Common Stock Exercisable warrants Warrants 09/24/2014 09/24/2019 $ 20.00 1,125,005 Warrants 10/20/2014 10/20/2019 $ 20.00 87,500 Warrants 3/30/2016 03/30/2021 $ 3.88 521,060 Total warrants issued and outstanding 1,733,565
Summary of Stock Option Activity	The following table summarizes the stock option activity for the three month period ended March 31, 2018 Stock Options Weighted- Exercise Average Number Price Per Exercise Price of Shares Share Per Share Outstanding at December 31, 2017 1,389,816 $1.17 — $26.00 $ 8.39 Granted 398,000 $2.39 — $2.39 $ 2.39 Canceled/Forfeited (23,957 ) $2.39 — $6.40 $ 2.65 Outstanding at March 31, 2018 1,763,859 $1.17 — $26.00 $ 7.12

The Company, Description of B26

The Company, Description of Business, and Liquidity - Additional Information (Detail) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Risks And Uncertainties [Abstract]
Working Capital	$ 2,578,248	$ 4,243,990

Summary of Significant Accoun27

Summary of Significant Accounting Policies - Additional Information (Detail) - shares	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Accounting Policies [Abstract]
Potentially dilutive securities include options and warrants	3,497,424	3,313,907

Summary of Significant Accoun28

Summary of Significant Accounting Policies - Schedule of Anti-dilutive Securities Excluded from Diluted Loss Per Share (Detail) - shares	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Anti-dilutive securities excluded from diluted loss per share	3,497,424	3,313,907
Stock options [Member]
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Anti-dilutive securities excluded from diluted loss per share	1,763,859	1,375,216
Warrants [Member]
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Anti-dilutive securities excluded from diluted loss per share	1,733,565	1,938,691

Property and Equipment, Net, 29

Property and Equipment, Net, and Other Assets - Components of Property and Equipment, Net, and Other Assets (Detail) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Property Plant And Equipment [Abstract]
Property and equipment, net of accumulated depreciation of $2,296,541 and $2,193,231 as of March 31, 2018 and December 31, 2017, respectively	$ 862,924	$ 956,867
Security deposits and other assets	481,275	363,475
Property and Equipment net and other assets	$ 1,344,199	$ 1,320,342

Property and Equipment, Net, 30

Property and Equipment, Net, and Other Assets - Components of Property and Equipment, Net, and Other Assets ( Parenthetical) (Detail) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Property Plant And Equipment [Abstract]
Accumulated depreciation, Property and equipment	$ 2,296,541	$ 2,193,231

Property and Equipment, Net, 31

Property and Equipment, Net, and Other Assets - Additional Information (Detail) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Feb. 20, 2018	Dec. 31, 2017
Property Plant And Equipment [Line Items]
Depreciation	$ 103,310	$ 115,246
Depreciation reflected in cost of revenue	45,296	$ 41,075
Carrying value of capital lease assets, net	217,729			$ 243,778
Capital lease assets, accumulated depreciation	282,368			$ 256,319
Asset Purchase Agreement [Member] | Earth Media Partners, LLC [Member]
Property Plant And Equipment [Line Items]
Percentage of ownership interest			19.00%
Ownership interest amount recorded as investment			$ 246,585
Accrued earn-out amount	$ 8,086
Asset Purchase Agreement [Member] | Earth Media Partners, LLC [Member] | Wholly Owned Subsidiary and Earth911, Inc. [Member] | Disposal Group, Not Discontinued Operations [Member]
Property Plant And Equipment [Line Items]
Future earn-out amount			$ 350,000

Goodwill and Other Intangible32

Goodwill and Other Intangible Assets - Schedule of Finite-Lived Intangible Assets (Detail) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2018	Dec. 31, 2017
Finite Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 21,281,676	$ 21,404,170
Accumulated Amortization	17,243,508	16,372,575
Net	$ 4,038,168	$ 5,031,595
Customer relationships [Member]
Finite Lived Intangible Assets [Line Items]
Estimated Useful Life	5 years	5 years
Gross Carrying Amount	$ 12,720,000	$ 12,720,000
Accumulated Amortization	11,978,000	11,342,000
Net	$ 742,000	$ 1,378,000
Trademarks [Member]
Finite Lived Intangible Assets [Line Items]
Estimated Useful Life	7 years	7 years
Gross Carrying Amount	$ 6,242,055	$ 6,242,055
Accumulated Amortization	4,192,258	3,969,576
Net	$ 2,049,797	$ 2,272,479
Patents [Member]
Finite Lived Intangible Assets [Line Items]
Estimated Useful Life	7 years	7 years
Gross Carrying Amount	$ 230,683	$ 230,683
Accumulated Amortization	$ 230,683	$ 230,683
Software [Member]
Finite Lived Intangible Assets [Line Items]
Estimated Useful Life	7 years	7 years
Gross Carrying Amount	$ 1,781,785	$ 1,904,279
Accumulated Amortization	552,914	548,163
Net	$ 1,228,871	$ 1,356,116
Customer lists [Member]
Finite Lived Intangible Assets [Line Items]
Estimated Useful Life	5 years	5 years
Gross Carrying Amount	$ 307,153	$ 307,153
Accumulated Amortization	289,653	282,153
Net	$ 17,500	$ 25,000

Goodwill and Other Intangible33

Goodwill and Other Intangible Assets - Schedule of Changes in Goodwill (Detail)	3 Months Ended
	Mar. 31, 2018USD ($)
Goodwill And Intangible Assets Disclosure [Abstract]
Goodwill beginning balance	$ 58,337,290
Adjustment related to Earth911 asset sale	(128,800)
Goodwill ending balance	$ 58,208,490

Goodwill and Other Intangible34

Goodwill and Other Intangible Assets - Additional Information (Detail) - USD ($)	3 Months Ended
	Mar. 31, 2018	Jun. 30, 2017	Mar. 31, 2017
Goodwill And Intangible Assets Disclosure [Abstract]
Amortization of intangibles	$ 926,567		$ 926,563
Indefinite-lived intangible assets other than goodwill	$ 0
Impairment of goodwill and other intangible assets		$ 0

Accounts Payable and Accrued 35

Accounts Payable and Accrued Liabilities - Components of Accounts Payable and Accrued Liabilities (Detail) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Accounts Payable And Accrued Liabilities Current [Abstract]
Accounts payable	$ 15,827,780	$ 12,739,117
Accrued taxes	627,046	807,037
Employee compensation	289,853	434,358
Other	331,805	273,306
Accounts payable and accrued liabilities	$ 17,076,484	$ 14,253,818

Revolving Credit Facility - Add

Revolving Credit Facility - Additional Information (Detail) - USD ($)	Feb. 24, 2017	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017
Line of Credit Facility [Line Items]
Interest expense related to borrowings		$ 124,005	$ 114,275
Interest expense related to amortization of discount		23,475	7,825
Revolving credit facility, net		5,100,957		$ 6,763,497
ABL Facility [Member]
Line of Credit Facility [Line Items]
Revolving credit facility maximum principal amount	$ 20,000,000
Debt instrument maturity date	Feb. 24, 2022
Interest expense related to borrowings		84,288	$ 110,381
Revolving credit current borrowing facility		11,545,000
Revolving credit facility, net		5,100,957
Unamortized debt issuance cost		$ 367,781
ABL Facility [Member] | Base Rate [Member]
Line of Credit Facility [Line Items]
Debt instrument interest rate		6.25%
ABL Facility [Member] | LIBOR [Member]
Line of Credit Facility [Line Items]
Debt instrument interest rate		4.28%
ABL Facility [Member] | Minimum [Member] | Base Rate [Member]
Line of Credit Facility [Line Items]
Debt instrument, margin on variable rate	1.00%
ABL Facility [Member] | Minimum [Member] | LIBOR [Member]
Line of Credit Facility [Line Items]
Debt instrument, margin on variable rate	2.00%
ABL Facility [Member] | Maximum [Member] | Base Rate [Member]
Line of Credit Facility [Line Items]
Debt instrument, margin on variable rate	1.50%
ABL Facility [Member] | Maximum [Member] | LIBOR [Member]
Line of Credit Facility [Line Items]
Debt instrument, margin on variable rate	2.50%
Equipment Loan Facility [Member]
Line of Credit Facility [Line Items]
Revolving credit facility maximum principal amount	$ 2,000,000
Debt instrument maturity date	Feb. 24, 2022
Revolving credit facility, net		$ 0
Equipment Loan Facility [Member] | Base Rate [Member]
Line of Credit Facility [Line Items]
Debt instrument, margin on variable rate	2.00%
Equipment Loan Facility [Member] | LIBOR [Member]
Line of Credit Facility [Line Items]
Debt instrument, margin on variable rate	3.00%
Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Debt issuance cost		469,507
Unamortized portion of debt discount		367,781
Interest expense related to amortization of discount		$ 23,475

Capital Lease Obligations - Sum

Capital Lease Obligations - Summary of Capital Lease Obligations (Detail) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Leases [Abstract]
Capital lease obligations, imputed interest at 4.88% to 13.29%, with monthly payments of approximately $6,000, expiring through September 2019, secured by computer and office equipment	$ 28,701	$ 41,664
Less: current maturities	(27,132)	(39,067)
Long-term portion	$ 1,569	$ 2,597

Capital Lease Obligations - S38

Capital Lease Obligations - Summary of Capital Lease Obligations (Parenthetical) (Detail) - Capital lease obligations, imputed interest at 4.88% to 13.29% [Member] - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2018	Dec. 31, 2017
Debt Instrument [Line Items]
Imputed interest rate for capital lease obligation, minimum	4.88%	4.88%
Imputed interest rate for capital lease obligation, maximum	13.29%	13.29%
Monthly installment capital lease obligation	$ 6,000	$ 6,000
Debt instrument expiring date, description	expiring through September 2019

Capital Lease Obligations - Add

Capital Lease Obligations - Additional Information (Detail) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Debt Disclosure [Abstract]
Interest expense related to capital leases	$ 618	$ 2,462

Revenue - Additional Informatio

Revenue - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2018USD ($)Customer	Mar. 31, 2017USD ($)Customer	Dec. 31, 2017USD ($)
Revenue Recognition [Line Items]
Management fees revenue		$ 44,088
Management fees gross billings		1,294,459
Deferred contract costs	$ 199,736		$ 136,139
Deferred revenue	142,389		$ 309,089
Selling, General and Administrative Expense [Member]
Revenue Recognition [Line Items]
Amortized deferred contract costs	33,333	100,000
Reduction to Income [Member]
Revenue Recognition [Line Items]
Amortized deferred contract costs	$ 18,069	$ 18,069
Revenue [Member] | Customer Concentration Risk [Member]
Revenue Recognition [Line Items]
Number of customer | Customer	3	2
Percentage of revenue	48.40%	55.10%

Revenue - Summary of Revenue Di

Revenue - Summary of Revenue Disaggregated by Source (Detail) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Disaggregation Of Revenue [Line Items]
Total Revenue	$ 24,695,923	$ 42,539,822
Services [Member]
Disaggregation Of Revenue [Line Items]
Total Revenue	22,005,572	39,835,675
Product Sales and Other [Member]
Disaggregation Of Revenue [Line Items]
Total Revenue	$ 2,690,351	$ 2,704,147

Income Taxes - Additional Infor

Income Taxes - Additional Information (Detail) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2018	Dec. 31, 2017
Income Tax Disclosure [Abstract]
Valuation allowance	$ 12,800,000	$ 12,150,000
Federal income tax net operating loss carry forward	$ 20,200,000	$ 19,700,000
Net operating loss carry forwards expiration beginning year	2,031
Federal corporate income tax rate	21.00%	35.00%

Stockholders' Equity - Addition

Stockholders' Equity - Additional Information (Detail) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017
Equity [Abstract]
Preferred stock, shares authorized	10,000,000		10,000,000
Preferred stock, par value	$ 0.001		$ 0.001
Preferred stock, shares issued	0		0
Preferred stock, shares outstanding	0		0
Common stock, shares authorized	200,000,000		200,000,000
Common stock, par value	$ 0.001		$ 0.001
Common stock, shares issued	15,302,455		15,302,455
Common stock, shares outstanding	15,302,455		15,302,455
Employee stock purchase plan expense	$ 2,044	$ 1,738

Stockholders' Equity - Additi44

Stockholders' Equity - Additional Information - Warrants (Detail)	Mar. 31, 2018shares
Class Of Warrant Or Right [Line Items]
Warrants outstanding	1,733,565
Exercisable Warrants [Member]
Class Of Warrant Or Right [Line Items]
Warrants outstanding	1,733,565

Stockholders' Equity - Summary

Stockholders' Equity - Summary of Warrants Issued and Outstanding (Detail)	3 Months Ended
	Mar. 31, 2018$ / sharesshares
Class Of Warrant Or Right [Line Items]
Shares of Common Stock	1,733,565
Exercisable Warrants [Member]
Class Of Warrant Or Right [Line Items]
Shares of Common Stock	1,733,565
Exercisable Warrants [Member] | Warrants One [Member]
Class Of Warrant Or Right [Line Items]
Date of Issuance	Sep. 24, 2014
Date of Expiration	Sep. 24, 2019
Exercise Price | $ / shares	$ 20
Shares of Common Stock	1,125,005
Exercisable Warrants [Member] | Warrants Two [Member]
Class Of Warrant Or Right [Line Items]
Date of Issuance	Oct. 20, 2014
Date of Expiration	Oct. 20, 2019
Exercise Price | $ / shares	$ 20
Shares of Common Stock	87,500
Exercisable Warrants [Member] | Warrants Three [Member]
Class Of Warrant Or Right [Line Items]
Date of Issuance	Mar. 30, 2016
Date of Expiration	Mar. 30, 2021
Exercise Price | $ / shares	$ 3.88
Shares of Common Stock	521,060

Stockholders' Equity - Additi46

Stockholders' Equity - Additional Information - Stock Options (Detail) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Equity [Abstract]
Stock options expense	$ 222,079	$ 193,777

Stockholders' Equity - Summar47

Stockholders' Equity - Summary of Stock Option Activity (Detail)	3 Months Ended
	Mar. 31, 2018$ / sharesshares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Outstanding Beginning Balance, Number of Shares | shares	1,389,816
Granted, Number of Shares | shares	398,000
Canceled/Forfeited, Number of Shares | shares	(23,957)
Outstanding Ending Balance, Number of Shares | shares	1,763,859
Outstanding Beginning Balance, Weighted-Average Exercise Price Per Share	$ 8.39
Granted, Weighted-Average Exercise Price Per Share	2.39
Canceled/Forfeited, Weighted-Average Exercise Price Per Share	2.65
Outstanding Ending Balance, Weighted-Average Exercise Price Per Share	7.12
Outstanding, 1.17 — 26.00 [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Exercise Price Per Share, Minimum	1.17
Exercise Price Per Share, Maximum	26
Granted, 2.39 — 2.39 [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Exercise Price Per Share, Minimum	2.39
Exercise Price Per Share, Maximum	2.39
Canceled/Forfeited, 2.39 — 6.40 [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Exercise Price Per Share, Minimum	2.39
Exercise Price Per Share, Maximum	6.40
Outstanding, 1.17 — 26.00 [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Exercise Price Per Share, Minimum	1.17
Exercise Price Per Share, Maximum	$ 26