Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2015 | Apr. 30, 2015 | |
Document And Entity Information | ||
Entity Registrant Name | Strategic Environmental & Energy Resources, Inc. | |
Entity Central Index Key | 1576197 | |
Document Type | 10-Q | |
Document Period End Date | 31-Mar-15 | |
Amendment Flag | FALSE | |
Current Fiscal Year End Date | -19 | |
Entity a Well-known Seasoned Issuer | No | |
Entity a Voluntary Filer | No | |
Entity's Reporting Status Current | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 52,362,015 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2015 |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash | $661,900 | $229,200 |
Cash - restricted | 147,800 | 213,800 |
Accounts receivable, net of allowance for doubtful accounts of $246,500 and $263,600, respectively | 2,113,200 | 3,017,800 |
Costs and estimated earnings in excess billings on uncompleted contracts | 243,200 | 61,100 |
Prepaid expenses and other current assets | 417,400 | 202,500 |
Total current assets | 3,583,500 | 3,724,400 |
Property and equipment, net | 5,106,400 | 4,848,800 |
Intangible assets, net | 368,700 | 371,400 |
Other assets | 52,500 | 52,500 |
TOTAL ASSETS | 9,111,100 | 8,997,100 |
Current liabilities: | ||
Accounts payable | 1,376,000 | 1,675,900 |
Accrued liabilities | 826,000 | 925,700 |
Billings in excess of costs and estimated earnings on uncompleted contracts | 443,500 | 308,500 |
Deferred revenue | 922,000 | 456,600 |
Current portion of payroll taxes payable | 953,400 | 947,700 |
Customer deposits | 380,000 | 380,000 |
Current portion of notes payable and capital lease obligations | 382,600 | 363,000 |
Notes payable - related parties, including accrued interest | 61,800 | 73,800 |
Total current liabilities | 5,345,300 | 5,131,200 |
Payroll taxes payable, net of current portion | ||
Notes payable and capital lease obligations, net of current portion | 182,700 | 60,900 |
Total liabilities | 5,528,000 | 5,192,100 |
Commitments and contingencies | ||
Stockholders' Equity) : | ||
Common stock; $.001 par value; 70,000,000 shares authorized; 52,362,015 and 51,726,316 shares issued and outstanding 2015 and 2014, respectively | 52,400 | 51,700 |
Common stock subscribed | 50,000 | 50,000 |
Additional paid-in capital | 17,462,800 | 17,108,100 |
Stock subscription receivable | -25,000 | -25,000 |
Accumulated deficit | -12,955,700 | -12,499,800 |
Total stockholders' equity | 4,584,500 | 4,685,000 |
Non-controlling interest | -1,001,400 | -880,000 |
Total equity | 3,583,100 | 3,805,000 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $9,111,100 | $8,997,100 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per shares) | $0.00 | $0.00 |
Preferred stock, authorized | 5,000,000 | 5,000,000 |
Preferred stock, issued | 0 | 0 |
Common stock, par value (in dollars per shares) | $0.00 | $0.00 |
Common stock, authorized | 70,000,000 | 70,000,000 |
Common stock, issued | 52,362,015 | 51,726,316 |
Common stock, outstanding | 52,362,015 | 51,726,316 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Revenue: | ||
Products | $889,000 | $520,100 |
Services | 2,576,700 | 2,262,900 |
Solid waste | 28,000 | |
Total revenue | 3,493,700 | 2,783,000 |
Operating expenses: | ||
Products costs | 665,800 | 380,200 |
Services costs | 1,866,400 | 1,581,400 |
Solid waste costs | 128,300 | |
Selling, general and administrative expenses | 1,393,100 | 1,908,700 |
Total operating expenses | 4,053,600 | 3,870,300 |
Loss from operations | -559,900 | -1,087,300 |
Other income (expense): | ||
Interest income | ||
Interest expense | -17,400 | -23,600 |
Penalties and late fees | -1,100 | |
Gain on debt settlements | 24,400 | |
Other | -15,700 | |
Total non-operating expense, net | -17,400 | -16,000 |
Net loss | -577,300 | -1,103,300 |
Less: Net loss attributable to non-controlling interest | -121,400 | -68,100 |
Net loss attributable to SEER common stockholders | ($455,900) | ($1,035,200) |
Net loss per share, basic and diluted | ($0.01) | ($0.02) |
Weighted average shares outstanding - basic and diluted | 52,187,776 | 49,348,566 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) (USD $) | 3 Months Ended | |||
Mar. 31, 2015 | Mar. 31, 2014 | |||
Cash flows from operating activities: | ||||
Net loss | ($577,300) | ($1,103,300) | ||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||
Provision for doubtful accounts receivable | -17,100 | -1,100 | ||
Depreciation and amortization | 146,600 | [1] | 93,100 | [1] |
Stock-based compensation expense | 98,000 | 648,700 | ||
Gain on extinguishment of debt | -24,400 | |||
Changes in operating assets and liabilities: | ||||
Cash - restricted | 66,000 | |||
Accounts receivable | 921,700 | -276,500 | ||
Costs in Excess of billings on uncompleted contracts | -182,100 | -23,500 | ||
Prepaid expenses and other assets | 59,000 | 82,000 | ||
Accounts payable and accrued liabilities | -367,200 | -201,100 | ||
Billings in excess of revenue on uncompleted contracts | 135,000 | 7,900 | ||
Deferred revenue | 465,400 | 317,600 | ||
Payroll taxes payable | 5,700 | 34,200 | ||
Net cash provided by (used in) operating activities | 753,700 | -446,400 | ||
Cash flows from investing activities: | ||||
Purchase of property and equipment | -169,800 | -784,900 | ||
Purchase of intangible assets | -17,300 | -5,900 | ||
Net cash used in investing activities | -187,100 | -790,800 | ||
Cash flows from financing activities: | ||||
Payments of notes payments and capital lease obligations | -121,900 | -96,800 | ||
Payments of related party notes payable and accrued interest | -12,000 | |||
Proceeds from excercise of warrants | 305,000 | |||
Proceeds from the sale of common stock and warrants, net of expenses | 776,000 | |||
Net cash provided by financing activities | -133,900 | 984,200 | ||
Net increase (decrease) in cash | 432,700 | -253,000 | ||
Cash at the beginning of year | 229,200 | 2,419,100 | ||
Cash at the end of year | 661,900 | 2,166,100 | ||
Supplemental disclosures of cash flow information: | ||||
Cash paid for interest | 54,100 | 45,300 | ||
Conversion of debt and accrued interest to equity | 257,400 | |||
Financing of prepaid insurance premiums | 273,900 | |||
Capital lease additions | $214,400 | |||
[1] | Includes depreciation of property, equipment and leasehold improvement and amortization of intangibles |
ORGANIZATION_AND_FINANCIAL_CON
ORGANIZATION AND FINANCIAL CONDITION | 3 Months Ended |
Mar. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NOTE 1 - ORGANIZATION AND FINANCIAL CONDITION | NOTE 1 - ORGANIZATION AND FINANCIAL CONDITION |
Organization | |
Strategic Environmental & Energy Resources, Inc. ("SEER," "we," or the "Company"), a Nevada corporation, is a provider of next-generation clean-technologies, waste management innovations and related services. SEER has three wholly-owned operating subsidiaries and two majority-owned subsidiaries; all of which together provide technology solutions and services to companies in the oil and gas, refining, landfill, food, beverage & agriculture and renewable fuel industries. The three wholly-owned subsidiaries include: 1) REGS, LLC (d/b/a Resource Environmental Group Services ("REGS")) provides industrial and cleaning services to refineries, oil fields and other private and governmental entities; 2) Tactical Cleaning Company, LLC ("Tactical"), provides cleaning services related to railcar tankers, tank trucks and frac tanks to customers from its sites in Colorado and Kansas; 3) MV, LLC (d/b/a MV Technologies) ("MV"), designs and builds biogas conditioning solutions for the production of renewable natural gas, odor control systems and natural gas vapor capture for landfill operations, waste-water treatment facilities, oil and gas fields, refineries, municipalities and food, beverage & agriculture operations throughout the U.S. | |
The two majority-owned subsidiaries include; 1) Paragon Waste Solutions, LLC ("PWS") and 2) ReaCH4Biogas ("Reach"). PWS is currently owned 54% by SEER (see Note 7) and Reach is owned 85% by SEER. | |
PWS is developing specific opportunities to deploy and commercialize patented technologies for a non-thermal plasma-assisted oxidation process that makes possible the clean and efficient destruction of solid hazardous chemical and biological waste (i.e., regulated medical waste, chemicals, pharmaceuticals and refinery tank waste, etc.) without landfilling or traditional incineration and without harmful emissions. Additionally, PWS’ technology "cleans" and conditions emissions and gaseous waste streams (i.e., volatile organic compounds and other greenhouse gases) generated from diverse sources such as refineries, oil fields, and many others. | |
Reach (the trade name for BeneFuels, LLC), is currently owned 85% by SEER and focuses specifically on treating biogas for conversion to pipeline quality gas and/or compressed natural gas ("CNG") for fleet vehicle fuel. Reach had minimal operations for the three months ended March 31, 2015 and 2014. | |
Principals of Consolidation | |
The accompanying consolidated financial statements include the accounts of SEER, its wholly-owned subsidiaries, REGS, TCC and MV and its majority-owned subsidiaries PWS and Reach, since their respective acquisition or formation dates. All material intercompany accounts, transactions, and profits have been eliminated in consolidation. | |
Basis of presentation Unaudited Interim Financial Information | |
The accompanying interim condensed consolidated financial statements are unaudited. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all of the normal recurring adjustments necessary to present fairly the financial position and results of operations as of and for the periods presented. The interim results are not necessarily indicative of the results to be expected for the full year or any future period. | |
Certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The Company believes that the disclosures are adequate to make the interim information presented not misleading. These consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto included in the Company’s Report on Form 10-K filed on April 14, 2015 for the years ended December 31, 2014 and 2013. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2015 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
Use of Estimates | |
The preparation of these consolidated financial statements in conformity with accounting principles generally accepted in the United States (U.S. GAAP) requires management to make a number of estimates and assumptions related to the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the period. Significant items subject to such estimates and assumptions include the carrying amount of intangible assets; valuation allowances and reserves for receivables and inventory and deferred income taxes; revenue recognition related to contracts accounted for under the percentage of completion method; share-based compensation; and loss contingencies, including those related to litigation. Actual results could differ from those estimates. | |
Reclassifications | |
Certain amounts in the prior period financial statements have been reclassified to conform to the current period presentation. These reclassifications had no effect on reported consolidated net income (loss). | |
Research and Development | |
Research and development ("R&D") costs are charged to expense as incurred. R&D expenses consist primarily of salaries, project materials, contract labor and other costs associated with ongoing product development and enhancement efforts. R&D expenses were $72,000 and $57,400 for the three months ended March 31, 2015 and 2014, respectively. | |
Income Taxes | |
The Company accounts for income taxes pursuant to Accounting Standards Codification (“ASC”) 740, Income Taxes, which utilizes the asset and liability method of computing deferred income taxes. The objective of this method is to establish deferred tax assets and liabilities for any temporary differences between the financial reporting basis and the tax basis of the Company's assets and liabilities at enacted tax rates expected to be in effect when such amounts are realized or settled. | |
ASC 740 also provides detailed guidance for the financial statement recognition, measurement and disclosure of uncertain tax positions recognized in the financial statements. Tax positions must meet a “more-likely-than-not” recognition threshold at the effective date to be recognized. During the three months ended March 31, 2014 and 2013 the Company recognized no adjustments for uncertain tax positions. | |
The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. No interest and penalties related to uncertain tax positions were recognized at March 31, 2014 and December 31, 2013. The Company expects no material changes to unrecognized tax positions within the next twelve months. | |
The Company has filed federal and state tax returns through December 31, 2013. The tax periods for the years ending December 31, 2008 through 2013 are open to examination by federal and state authorities. | |
Recently issued accounting pronouncements | |
Changes to accounting principles generally accepted in the United States of America (U.S. GAAP) are established by the Financial Accounting Standards Board (FASB) in the form of accounting standards updates (ASU’s) to the FASB’s Accounting Standards Codification. The Company considers the applicability and impact of all new or revised ASU’s. | |
In May 2014, the Financial Accounting Standards Board (FASB) issued guidance creating Accounting Standards Codification (“ASC”) Section 606, “Revenue from Contracts with Customers”. The new section will replace Section 605, “Revenue Recognition” and creates modifications to various other revenue accounting standards for specialized transactions and industries. The section is intended to conform revenue accounting principles with a concurrently issued International Financial Reporting Standards with previously differing treatment between United States practice and those of much of the rest of the world, as well as, to enhance disclosures related to disaggregated revenue information. The updated guidance is effective for annual reporting periods beginning on or after December 15, 2016, and interim periods within those annual periods. The Company will adopt the new provisions of this accounting standard at the beginning of fiscal year 2017, given that early adoption is not an option. The Company will further study the implications of this statement in order to evaluate the expected impact on the consolidated financial statements. | |
In June 2014, the FASB issued Accounting Standards Update No. 2014-12, “Compensation - Stock Compensation (Topic 718): Accounting for Share-Based Payments when the terms of an award provide that a performance target could be achieved after the requisite service period,” (“ASU 2014-12”). Current U.S. GAAP does not contain explicit guidance on whether to treat a performance target that could be achieved after the requisite service period as a performance condition that affects vesting or as a nonvesting condition that affects the grant-date fair value of an award. The new guidance requires that a performance target that affects vesting and that could be achieved after the requisite service period is treated as a performance condition. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. The updated guidance will be effective for annual reporting periods beginning after December 15, 2015, including interim periods within that reporting period. Early adoption is permitted. The Company is in the process of evaluating this guidance; however, it is not expected to have a material effect on the consolidated financial statements upon adoption. |
PROPERTY_AND_EQUIPMENT
PROPERTY AND EQUIPMENT | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Property, Plant and Equipment [Abstract] | |||||||||
PROPERTY AND EQUIPMENT | NOTE 3 - PROPERTY AND EQUIPMENT | ||||||||
Property and equipment was comprised of the following: | |||||||||
31-Mar-15 | 31-Dec-14 | ||||||||
Field and shop equipment | $ | 1,776,300 | $ | 1,690,900 | |||||
Vehicles | 943,900 | 672,300 | |||||||
Waste destruction equipment, leased | 1,148,000 | 1,145,600 | |||||||
Waste destruction equipment, not placed in service | 2,340,100 | 2,325,900 | |||||||
Furniture and office equipment | 301,900 | 291,300 | |||||||
Leasehold improvements | 65,400 | 65,400 | |||||||
6,575,600 | 6,191,400 | ||||||||
Less: accumulated depreciation and amortization | (1,469,200 | ) | (1,342,600 | ) | |||||
Property and equipment, net | $ | 5,106,400 | $ | 4,848,800 | |||||
Depreciation expense for the three months ended March 31, 2015 and 2014 was $126,600 and $71,900, respectively. For the three months ended March 31, 2015 depreciation expense included in cost of goods sold and selling, general and administrative expenses was $106,900 and $19,700 respectively. For the three months ended March 31, 2014 depreciation expense included in cost of goods sold and selling, general and administrative expenses was $65,800 and $6,100, respectively. | |||||||||
Accumulated depreciation on leased waste destruction equipment included in accumulated depreciation and amortization above is $24,500 and $0 for the three months ended March 31, 2015 and 2014, respectively. | |||||||||
Property and equipment included the following amounts for leases that have been capitalized at: | |||||||||
March 31, | 31-Mar | ||||||||
2015 | 2014 | ||||||||
Vehicles, field and shop equipment | $ | 347,800 | $ | 241,500 | |||||
Less: accumulated amortization | (81,100 | ) | (30,500 | ) | |||||
$ | 266,700 | $ | 211,000 | ||||||
INTANGIBLE_ASSETS
INTANGIBLE ASSETS | 3 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||
INTANGIBLE ASSETS | NOTE 4 – INTANGIBLE ASSETS | ||||||||||||
Intangible assets were comprised of the following: | |||||||||||||
31-Mar-15 | |||||||||||||
Gross carrying amount | Accumulated amortization | Net carrying value | |||||||||||
Customer list | $ | 42,500 | $ | (41,500 | ) | $ | 1,000 | ||||||
Technology | 823,000 | (456,600 | ) | 366,400 | |||||||||
Trade name | 54,600 | (53,300 | ) | 1,300 | |||||||||
$ | 920,100 | $ | (551,400 | ) | $ | 368,700 | |||||||
31-Dec-14 | |||||||||||||
Gross carrying amount | Accumulated amortization | Net carrying value | |||||||||||
Customer list | $ | 42,500 | $ | (40,000 | ) | $ | 2,500 | ||||||
Technology | 805,700 | (440,000 | ) | 365,700 | |||||||||
Trade name | 54,600 | (51,400 | ) | 3,200 | |||||||||
$ | 902,800 | $ | (531,400 | ) | $ | 371,400 | |||||||
The estimated useful lives of the intangible assets range from seven to ten years. Amortization expense was $20,000 and $21,400 for the three months ended March 31, 2015 and 2014, respectively. The estimated aggregate amortization expense for each of the next five years is as follows: | |||||||||||||
Remaining 2015 | $ | 60,200 | |||||||||||
2016 | 74,400 | ||||||||||||
2017 | 74,400 | ||||||||||||
2018 | 38,700 | ||||||||||||
2019 | 10,500 | ||||||||||||
Thereafter | 110,500 | ||||||||||||
$ | 368,700 |
ACCRUED_LIABILITIES
ACCRUED LIABILITIES | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Notes to Financial Statements | |||||||||
ACCRUED LIABILITIES | NOTE 5 - ACCRUED LIABILITIES | ||||||||
Accrued liabilities were comprised of the following: | |||||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
Accrued compensation and related taxes | $ | 600,400 | $ | 616,600 | |||||
Accrued interest | 49,000 | 56,600 | |||||||
Accrued material and other job related costs | — | ||||||||
Other | 176,600 | 252,500 | |||||||
Total Accrued Liabilities | $ | 826,000 | $ | 925,700 |
UNCOMPLETED_CONTRACTS
UNCOMPLETED CONTRACTS | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Contractors [Abstract] | |||||||||
UNCOMPLETED CONTRACTS | NOTE 6 - UNCOMPLETED CONTRACTS | ||||||||
Costs, estimated earnings and billings on uncompleted contracts are as follows: | |||||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
Revenue Recognized | $ | 439,000 | $ | 168,700 | |||||
Less: Billings to date | (195,800 | ) | (107,600 | ) | |||||
Costs and estimated earnings in excess of | $ | 243,200 | $ | 61,100 | |||||
billings on uncompleted contracts | |||||||||
Billings to date | $ | 2,845,100 | $ | 1,250,900 | |||||
Revenue recognized | (2,401,600 | ) | (942,400 | ) | |||||
Billings in excess of costs and estimated | $ | 443,500 | $ | 308,500 | |||||
earnings on uncompleted contracts | |||||||||
INVESTMENT_IN_PARAGON_WASTE_SO
INVESTMENT IN PARAGON WASTE SOLUTIONS LLC | 3 Months Ended | ||
Mar. 31, 2015 | |||
Business Combinations [Abstract] | |||
INVESTMENT IN PARAGON WASTE SOLUTIONS LLC | NOTE 7– INVESTMENT IN PARAGON WASTE SOLUTIONS LLC | ||
In 2010, the Company and Black Stone Management Services, LLC ("Black Stone") formed PWS, whereby a total of 1,000,000 membership units were issued, 600,000 membership units to the Company and 400,000 membership units to Black Stone. Fortunato Villamagna, who serves as President of our PWS subsidiary, is a managing member and Chairman of Black Stone. In June 2012, the Company and Blackstone each allocated 10% of their respective membership units in PWS to Mr. J John Combs III, an officer and shareholder of the Company and Mr. Michael Cardillo, a shareholder of the Company and an officer of a subsidiary. There was no value attributable to the units at the time of the allocation. At March 31, 2015 and December 31, 2014 the Company owned 54% of the membership units, Black Stone owned 26% of the membership units, an outside third party 10% of the membership units and two related parties (as noted above), each owned 5% of the membership units. | |||
In August, 2011, we acquired certain waste destruction technology intellectual property (the "IP") from Black Stone in exchange for 1,000,000 shares of our common stock valued at $100,000. We estimated the useful life of the IP at ten years, which was consistent with the useful life of other technology included in our intangible assets, and management’s initial assessment of the potential marketability of the IP. In March 2012, the Company entered into an Irrevocable License & Royalty Agreement with PWS that grants PWS an irrevocable world-wide license to the IP in exchange for a 5% royalty on all revenues from PWS and its affiliates. The term commenced as of the date of the Agreement and shall continue for a period not to exceed the life of the patent or patents filed by the Company. PWS may sub license the IP and any revenue derived from sub licensing shall be included in the calculation of Gross Revenue for purposes of determining royalty payments due the Company. Royalty payments are due 30 days after the end of each calendar quarter. PWS generated revenues of approximately $28,000 and $0 for the three months ended March 31, 2015 and 2014, respectively, as such, royalties of $1,400 and $0 were due for March 31, 2015 and 2014, respectively. | |||
Since its inception through March 31, 2015, we have provided approximately $4.4 million in funding to PWS for working capital and the further development and construction of various prototypes and commercial waste destruction units. Black Stone has made no capital contributions or other funding to PWS. The intent of the operating agreement is that we will provide the funding as an advance against future earnings distributions made by PWS. | |||
Licensing Agreements | |||
In September 2013, PWS entered into an Exclusive Use License and Joint Operations Agreement ("License Agreement") with Sterall Inc. ("Sterall"). The License Agreement grants to Sterall the use of the PWS Technology and the CoronaLux™ waste destruction units for an initial five year term for the State of Florida, renewable for two additional five year terms, for the treatment and/or destruction of any and all regulated medical waste from any sources. The agreement requires Sterall to pay a $300,000 License Initiation Fee and in order for Sterall to maintain its exclusive license for the State of Florida, a total of $200,000 shall be paid to PWS by May 23, 2014 regardless of net operating profits of Sterall ("NOP"). For the year ended December 31, 2014, no fees had been paid to PWS. During the initial 5-year term, a minimum of $500,000 of total royalty payments to PWS must be made, out of NOP or otherwise (in addition to the $300,000 Initial Fee, set forth below), in order for the second-phase five-year term to be exclusive. During the second-phase five-year term, a minimum of $750,000 of royalty must be paid, out of NOP or otherwise, in order for the third phase five-year term to be exclusive. PWS will receive a one-time license initiation fee of $300,000 payable from NOP of Sterall as a priority payment before any other distributions or payouts. Sterall can take delivery of additional CoronaLux™ waste destruction units upon payment of a placement fee per unit of either $168,000 or $207,000 depending upon the size of the unit. The unit placement fees do not include freight, start-up and commissioning costs, which shall be borne by the facility. PWS, at its sole discretion will select the installation, startup and commissioning teams. Black Stone is a minority shareholder of Sterall. | |||
During 2014, Sterall ordered a total of six CoronaLux™ units, of which one unit has been delivered, and five units are pending delivery at March 31, 2015 and December 31, 2014. Sterall paid a non-refundable placement fee of $236,300 for the one unit delivered in 2014 and has paid a deposit of $330,000 for the five units ordered and a balance of $851,500 is still owed. | |||
Commencing immediately, royalty fees based on Sterall’s NOP for the Initial Facility Fee and ongoing royalties shall be paid on the fifteenth of each month for the succeeding month’s revenue for PWS’s specified allocation of NOP as set forth below, except that effective January 1, 2014 Sterall shall pay the greater of i) a minimum of $7,500 or 2) PWS’s effective NOP allocation. | |||
· | Phase I Distribution- All NOP shall first be allocated and paid out 75% to PWS and 25% to Sterall until the first $1,200,000 in distributions are made to the joint venture partners ($900,000PWS/$300,000 Sterall). | ||
· | Phase II Distribution - Thereafter, NOP shall be allocated and paid out 25% to PWS and 75% to Sterall until the next $800,000 in distributions are made to the joint venture partners ($200,000 PWS/$600,000 Sterall). | ||
· | Phase III Distribution - Thereafter, all NOP shall be allocated and paid out 50%-50% to each joint venture partner for so long as Sterall’s Initial Facility operates and generates NOP. | ||
The License Agreement also specifies payments of unit placement fees and NOP distributions for each new facility established by Sterall either within the exclusive license territory or non-exclusive territory. In accordance with the License Agreement, Sterall has been granted a non-exclusive use license in several other states and minimum royalty payments are due if CoronaLux™ waste destruction units are placed in these territories in addition to NOP distributions. For the three months ended March 31, 2015 and for the year ended December 31, 2014 Sterall has not yet generated any NOP, as such, no payments have been made to PWS including the minimum required under the agreement. | |||
On March 4, 2014, PWS entered into a Licensing and Equipment Lease Agreement with eCycling International of South Carolina, LLC ("eCycling"). The License Agreement grants to eCycling the use of the PWS Technology and the CoronaLux™ waste destruction units for an initial term of five years and required a payment of $176,875 as a non-refundable initial licensing fee, which was paid in 2014, and distributions of 50% of net operating profits, as defined in the agreement, in lieu of continuing royalty payments for the use of the licensed technology. For the three months ended March 31, 2015 and for the year ended December 31, 2014 eCycling is still in the process of permitting the unit, and therefore, has not yet generated any NOP. As such, eCycling has made no payments to PWS. | |||
On November 17, 2014, PWS entered into an Exclusive Licensing and Equipment Lease Agreement, for a limited license territory, with Medical Waste Services, LLC ("MWS"). The License Agreement grants to MWS the use of the PWS Technology and the CoronaLux™ waste destruction units for an initial term of seven years and requires a payment of $225,000 as a non-refundable initial licensing fee, of which $112,500 was paid in December 2014, and distributions of 50% of net operating profits, as defined in the agreement, in lieu of continuing royalty payments for the use of the licensed technology. For the three months ended March 31, 2015 and for the year ended December 31, 2014 MWS has not yet generated any NOP, as such, no payments have been made to PWS. MWS received approval from regional authorities to continue the permitting process, enabling full operation of the PWS technology. The installed unit has been issued a temporary operating permit and has commenced limited operations in April, 2015. | |||
In February 2015, PWS entered into a License Agreement with Xinhua Energy Environmental Technology Co., Ltd, a large multi-national environmental company based in China (“Xinhua”). The agreement provides for the exclusive rights to distribute PWS’s patented technology in China, Hong Kong, Macau and the Taiwan territories (“Territory”). The grant was for both the medical waste, as well as the refinery vertical markets within the Territory. The Agreement calls for, among other things, the formation of a U.S. joint venture company, ("P&P Company"), to be owned 50/50 by PWS and Xinhua or its designee (“JV Entity”) and an obligation by Xinhua to fund all necessary and reasonable capital requirements to permit and roll out the PWS technology in the Territory as well as staff and manage the JV Entity’s operations. The Agreement also calls for the payment of a $430,000 placement fee for the first PWS CoronaLux™ unit to be commissioned in China of which $322,500 was paid March 31, 2015 and the remaining $107,500 will be paid upon shipment of the unit to China. Upon the occurrence of certain events and timely performance by Xinhua, a second placement fee of $350,000 is required to be paid and, upon that second payment, it will then be granted exclusive manufacturing rights to produce the units to be deployed in the Territory. | |||
Payments received for licensing and placement fees have been recorded as deferred revenue in the accompanying condensed consolidated balance sheets at March 31, 2015 and December 31, 2014 and are recognized as revenue ratably over the term of the contract. |
PAYROLL_TAXES_PAYABLE
PAYROLL TAXES PAYABLE | 3 Months Ended |
Mar. 31, 2015 | |
Notes to Financial Statements | |
PAYROLL TAXES PAYABLE | NOTE 8 - PAYROLL TAXES PAYABLE |
In 2009 and 2010, REGS, a subsidiary of the Company, became delinquent for unpaid federal employer and employee payroll taxes and accrued interest and penalties related to the unpaid payroll taxes. | |
In September 2011, we received approval from the Internal Revenue Service ("IRS") to begin paying the outstanding federal payroll tax and related interest and penalties liabilities totaling approximately $971,000, for the aforementioned years in installments (the "Installment Plan"). Under the Installment Plan, we were required to pay minimum monthly installments of $12,500 commencing September 2011, which increased to $25,000 per month in September 2012, until the liability was paid in full. Through the duration of the Installment Plan, the IRS continues to charge penalties and interest at statutory rates. If the conditions of the Installment Plan were not met, the IRS could cancel it and could demand the outstanding liability to be repaid through a levy on income, bank accounts or other assets, or by seizing certain of our assets. Additionally, the IRS has filed a notice of federal tax lien against certain of our assets to satisfy the obligation. The IRS is to release this lien if and when we pay the full amount due. | |
Two of the officers of REGS also have liability exposure for a portion of the taxes if REGS does not pay them. | |
In May 2013, REGS filed an Offer in Compromise with the IRS. While the Offer in Compromise was under review by the IRS, the requirement to pay $25,000 a month under the Installment Plan was suspended. REGS received a letter from the IRS, dated March 27, 2014, rejecting our Offer in Compromise and in accordance with the rejection letter the Company has submitted a written appeal. As a result of the IRS rejection of the Offer in Compromise, the Installment Plan, mentioned above, is terminated. In June 2014, the Company received notices of intent to levy property or rights to property from the IRS for the amounts owed for the past due payroll taxes, penalty and interest. Currently our appeal is pending and as such the IRS cannot levy our property while the appeal process is still pending. | |
As of March 31, 2015 and December 31, 2014, the outstanding balance due to the IRS was $953,400, and $947,700, respectively. |
DEBT
DEBT | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Debt Disclosure [Abstract] | |||||||||
DEBT | NOTE 9 – DEBT | ||||||||
In June 2011, we issued an unsecured promissory note to a third party in the amount of $40,000 (the "June 2011 Note") bearing interest at a rate of 10% per annum and a three year warrant to purchase 13,000 shares of our common stock at an exercise price of $1.00 per share. In addition, a second note payable, to the same third party, in the amount of $25,000 plus $3,000 of accrued interest was also converted into the June 2011 Note, resulting in a new principal balance of $68,000. Principal payments were due beginning November 2011 and the June 2011 Note is in default as of December 31, 2014 and 2013, as no payments have been made to date. We valued the warrant at $170 using the Black-Scholes model and recorded this amount as a debt discount. The debt discount was fully amortized during 2011. | |||||||||
The Company entered into a loan agreement evidenced by a convertible secured promissory note with Advanced Technology Materials, Inc. ("ATMI") on February 14, 2012. The amount of the convertible secured promissory note was $225,000. The loan agreement allows for an additional $225,000 to be borrowed upon meeting certain defined milestones and stipulates the Company provide the lenders, among other things, a security agreement which also identifies the collateral, a development agreement, and use the loan proceeds for projects and transactions contemplated in the term sheet and development agreement. The registration rights agreement has not been executed by the parties to the loan. The note bears interest at 5 percent per annum. The entire loan and/or unpaid balance of the loan and accrued interest can be converted into the Company’s common stock at $0.50 per share at any time at the option of the holder. In December 2014, the promissory note and accrued interest was purchased by two shareholders of the Company from ATMI. In January 2015 the convertible promissory note and accrued interest totaling $257,400 was converted into approximately 514,800 shares on common stock in accordance with the terms on the original convertible note. | |||||||||
Debt as of March 31, 2015 and December 31, 2014, was comprised of the following: | |||||||||
2015 | 2014 | ||||||||
June 2011 Note (See above) | $ | 68,000 | $ | 68,000 | |||||
Note payable dated February 2012, interest at 5% per annum, $112,500 is due December 31, 2014, convertible in whole or in part to common stock at $.50 per share. (see Note 11) | — | 225,000 | |||||||
Note payable insurance premium financing, interest at 4.25% per annum, payable in 10 installments of $27,927, due November 1, 2015 | 192,700 | — | |||||||
Capital lease obligations, secured by certain assets, maturing through March 2019 | 304,600 | 130,900 | |||||||
Total notes payable and capital lease obligations | 565,300 | 423,900 | |||||||
Less: current portion, including debt discount | (382,600 | ) | (363,000 | ) | |||||
Notes payable and capital lease obligations, long-term | $ | 182,700 | $ | 60,900 |
RELATED_PARTY_TRANSACTIONS_NOT
RELATED PARTY TRANSACTIONS NOT DISCLOSED ELSEWHERE | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Related Party Transactions [Abstract] | |||||||||
RELATED PARTY TRANSACTIONS NOT DISCLOSED ELSEWHERE | NOTE 10 – RELATED PARTY TRANSACTIONS | ||||||||
Notes payable, related parties | |||||||||
Notes payable, related parties and accrued interest due to certain related parties as of March 31, 2015 and December 31, 2014 are as follows: | |||||||||
2015 | 2014 | ||||||||
Unsecured note payable dated February 2004, bearing interest at 8% per annum, originally due January 2008; assigned to CEO by a third party in 2010; due June 1, 2016 | $ | 37,000 | $ | 37,000 | |||||
Accrued interest | 24,800 | 36,800 | |||||||
$ | 61,800 | $ | 73,800 | ||||||
We believe the stated interest rates on the related party notes payable represent reasonable market rates based on the note payable arrangements we have executed with third parties. | |||||||||
In March 2012, the Company entered into an Irrevocable License & Royalty Agreement with PWS that grants PWS an irrevocable world-wide license to the IP in exchange for a 5% royalty on all revenues from PWS and its affiliates. The term shall commence as of the date of this Agreement and shall continue for a period not to exceed the life of the patent or patents filed by the Company. PWS may sub license the IP and any revenue derived from sub licensing shall be included in the calculation of Gross Revenue for purposes of determining royalty payments due the Company. Royalty payments are due 30 days after the end of each calendar quarter. PWS generated revenues of approximately $28,000 and $0 for the three months ended March 31, 2015 and 2014, as such, royalties of $1,400 and $0 are due March 31, 2015 and 2014. | |||||||||
In August 2014, the Company entered into a second Exchange and Acquisition Agreement ("New Technologies Agreement") with Black Stone for the acquisition of additional intellectual property ("IP") from Black Stone in exchange for 1,000,000 shares of common stock valued at $1,050,000. In March 2015 the Company and Black Stone executed a rescission agreement of the New Technologies Agreement noted above that was effective December 31, 2014. The shares issued by the Company in accordance with the agreement were returned to the Company and all acquired IP returned to Black Stone. | |||||||||
In September 2014, the Company entered into an Equity Purchase Agreement ("Equity Agreement") with a third party ("Seller") whereby the Company issued 1,200,000 shares of the Company’s common stock, valued at $1,212,000, in exchange for 22.5 membership interest units, representing 15% ownership interest in Sterall, LLC, a Delaware corporation. In March 2015 the Company and the Seller entered into a revised agreement whereby the 1,200,000 shares issued by the Company would be held by the Seller until the completion of an independent third party valuation. Based on the fair market value of the Purchased Units from the valuation obtained by the Company, an amount of Consideration Shares will be returned to the Company to the extent that the fair market value of the Consideration Shares issued (see below) are greater than the fair market value of the Purchased Units. In no event shall the Company be obligated to issue additional shares as consideration for the Purchased Units. For purposes of this amendment, the fair market value of each Consideration Share will be $0.83333. In the event the parties are unwilling to accept the fair market value of the Purchased Units, as determined by the independent valuation specialist, on or before the Closing Date this Agreement, the transaction covered by this Agreement (the “Contemplated Transaction”) may be rescinded by either Party in writing. Due to the ability of the Company to rescind the shares issued at the commencement of the transaction the shares held by the Seller are considered contingently issuable shares and as such the 1,200,000 share not considered issued and outstanding at December 31, 2014. | |||||||||
In December 2014, PWS, Sterall, Inc and Sterall LLC entered into a Successor-In-Interest Agreement. The Successor-In-Interest Agreement states that Sterall Inc and Sterall LLC are in the process of consolidating their business under Sterall LLC and all agreements between PWS and Sterall Inc shall be binding in all regards Sterall LLC. | |||||||||
EQUITY_TRANSACTIONS
EQUITY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2015 | |
Equity [Abstract] | |
EQUITY TRANSACTIONS | NOTE 11 – EQUITY TRANSACTIONS |
In October 2013, we initiated a private placement ("October 2013 PP") for the sale of a unit comprised of 70,000 shares and 35,000 warrants for $50,000. Each warrant is exercisable for a period of five years at an exercise price of $1.00 per share. A total of 64.25 units (4,497,500 common shares and 2,248,750 warrants) were sold in 2013 for gross proceeds of $3,212,500 and proceeds net of $254,800 in offering costs were $2,957,700. In addition to the commission, a warrant was issued for 50,000 shares, exercisable for a period of five years at $1.00 per share. The fair market value of the common stock warrant was determined using the Black-Scholes valuation model and resulted in a valuation of $.115. As such, the $.715 unit price was allocated $.60 and $.115 to the common stock and warrant, respectively. | |
During the three months ended March 31, 2014 we sold a total of 4.125 Units (consisting of 1,155,000 shares of common stock and 577,500 warrants) for gross proceeds of $825,000 less $49,000 in offering costs for net proceeds of $776,000. | |
During the three months ended March 31, 2015, the Company issued 120,949 shares of $.001 par value common stock upon the cashless exercise of 200,000 warrants. During the three months ended March 31, 2014 the Company issued 396,934 shares of common stock in connection with the cashless exercise of 669,600 common stock options. | |
During the three months ended March 31, 2014 the Company issued 610,000 shares of common stock in connection with the exercise of warrants at $.50 per share, resulting in proceeds of $305,000. | |
During the three months ended March 31, 2014, we issued 500,000 shares of common stock for consulting services valued at $550,000. The consulting services are related to financial advisory services, potential strategic acquisition evaluations, strategic planning and market evaluations. | |
As noted in Note 9, in January 2015 a convertible promissory note and accrued interest totaling $257,400 was converted into 514,750 shares on common stock in accordance with the terms on the original convertible note. | |
Non-controlling Interest | |
The non-controlling interest presented in our condensed consolidated financial statements reflects a 46% non-controlling equity interest in PWS (see Note 7). Net loss attributable to non-controlling interest, as reported on our condensed consolidated statements of operations, represents the net loss of PWS attributable to the non-controlling equity interest. The non-controlling interest is reflected within stockholders’ equity on the condensed consolidated balance sheet. |
CUSTOMER_CONCENTRATIONS
CUSTOMER CONCENTRATIONS | 3 Months Ended |
Mar. 31, 2015 | |
Risks and Uncertainties [Abstract] | |
CUSTOMER CONCENTRATIONS | NOTE 12 – CUSTOMER CONCENTRATIONS |
The Company had sales from operations to one customer for the three months ended March 31, 2015 and 2014 that represented approximately 48% and 47%, respectively, of our total sales. The concentration of the Company’s business with a relatively small number of customers may expose us to a material adverse effect if one or more of these large customers were to experience financial difficulty or were to cease being customer for non-financial related issues. |
NET_LOSS_PER_SHARE
NET LOSS PER SHARE | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Earnings Per Share [Abstract] | |||||||||
NET LOSS PER SHARE | NOTE 13 – NET LOSS PER SHARE | ||||||||
Basic net loss per share is computed by dividing net loss attributable to common shareholders by the weighted average number of common shares outstanding. Diluted net loss per share is computed by dividing net loss attributable to common shareholders by the weighted average number of common shares outstanding plus the number of common shares that would be issued assuming exercise or conversion of all potentially dilutive common shares. Potentially dilutive securities are excluded from the calculation when their effect would be anti-dilutive. For all years presented in the consolidated financial statements, all potentially dilutive securities have been excluded from the diluted share calculations as they were anti-dilutive as a result of the net losses incurred for the respective years. Accordingly, basic shares equal diluted shares for all years presented. | |||||||||
Potentially dilutive securities were comprised of the following: | |||||||||
Three Months Ended March 31, | |||||||||
2015 | 2014 | ||||||||
Warrants | 8,681,750 | 9,678,750 | |||||||
Options | 2,077,400 | 2,062,500 | |||||||
Convertible notes payable | — | 225,000 | |||||||
Contingently issuable shares upon equity purchase | 1,200,000 | — | |||||||
11,959,150 | 11,966,250 |
ENVIRONMENTAL_MATTERS_AND_REGU
ENVIRONMENTAL MATTERS AND REGULATION | 3 Months Ended |
Mar. 31, 2015 | |
Environmental Matters And Regulation | |
ENVIRONMENTAL MATTERS AND REGULATION | NOTE 14 - ENVIRONMENTAL MATTERS AND REGULATION |
Significant federal environmental laws affecting us are the Resource Conservation and Recovery Act ("RCRA"), the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"), also known as the "Superfund Act", the Clean Air Act, the Clean Water Act, and the Toxic Substances Control Act ("TSCA"). | |
Pursuant to the EPA's authorization of their RCRA equivalent programs, a number of states have regulatory programs governing the operations and permitting of hazardous waste facilities. Our facilities are regulated pursuant to state statutes, including those addressing clean water and clean air. Our facilities are also subject to local siting, zoning and land use restrictions. Although our facilities occasionally have been cited for regulatory violations, we believe we are in substantial compliance with all federal, state and local laws regulating our business. |
SEGMENT_INFORMATION_AND_MAJOR_
SEGMENT INFORMATION AND MAJOR SEGMENT CUSTOMERS | 3 Months Ended | ||||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||
SEGMENT INFORMATION AND MAJOR SEGMENT CUSTOMERS | NOTE 15 - SEGMENT INFORMATION AND MAJOR CUSTOMERS | ||||||||||||||||||||||||
The Company currently has identified four segments as follows: | |||||||||||||||||||||||||
REGS | Industrial Cleaning | ||||||||||||||||||||||||
Tactical | Rail Car Cleaning | ||||||||||||||||||||||||
MV and Reach | Environmental Solutions | ||||||||||||||||||||||||
PWS | Solid Waste | ||||||||||||||||||||||||
Reach has had minimal operations through March 31, 2015. | |||||||||||||||||||||||||
The composition of our reportable segments is consistent with that used by our Chief Operating Decision Maker ("CODM") to evaluate performance and allocate resources. All of our operations are located in the U.S. We have not allocated corporate selling, general and administrative expenses, and stock-based compensation to the segments. All intercompany transactions have been eliminated. | |||||||||||||||||||||||||
Segment information for the three months ended March 31, 2015 and 2014 is as follows: | |||||||||||||||||||||||||
2015 | Industrial | Railcar | Environmental | Solid | Corporate | Total | |||||||||||||||||||
Cleaning | Cleaning | Solutions | Waste | ||||||||||||||||||||||
Revenue | $ | 1,863,600 | $ | 713,100 | $ | 889,000 | $ | 28,000 | $ | — | $ | 3,493,700 | |||||||||||||
Depreciation and amortization (1) | 65,700 | 6,400 | 30,300 | 25,500 | 18,700 | 146,600 | |||||||||||||||||||
Interest expense | 10,200 | 3,500 | 300 | — | 3,400 | 17,400 | |||||||||||||||||||
Stock-based compensation | — | — | — | — | 98,100 | 98,100 | |||||||||||||||||||
Net income (loss) | 312,800 | 81,800 | (30,000 | ) | (262,900 | ) | (679,000 | ) | (577,300 | ) | |||||||||||||||
Capital expenditures (cash and | 4,300 | 1,900 | 16,700 | 79,800 | 384,200 | ||||||||||||||||||||
noncash) | 281,500 | ||||||||||||||||||||||||
Total assets | $ | 2,170,500 | $ | 764,900 | $ | 1,560,900 | $ | 3,580,100 | $ | 1,034,700 | $ | 9,111,100 | |||||||||||||
2014 | Industrial | Railcar | Environmental | Solid | Corporate | Total | |||||||||||||||||||
Cleaning | Cleaning | Solutions | Waste | ||||||||||||||||||||||
Revenue | $ | 1,657,600 | $ | 605,300 | $ | 520,100 | — | — | $ | 2,783,000 | |||||||||||||||
Depreciation and amortization (1) | $ | 48,700 | $ | 5,100 | $ | 33,400 | $ | 300 | $ | 5,600 | $ | 93,100 | |||||||||||||
Interest expense | $ | 10,600 | $ | 7,900 | $ | 1,700 | $ | 200 | $ | 3,200 | $ | 23,600 | |||||||||||||
Stock-based compensation | — | — | — | — | $ | 648,700 | $ | 648,700 | |||||||||||||||||
Net income (loss) | $ | 217,700 | $ | 31,700 | $ | (118,700 | ) | $ | (147,800 | ) | $ | (1,086,200 | ) | $ | (1,103,300 | ) | |||||||||
Capital expenditures (cash and noncash) | $ | 27,100 | $ | — | $ | 55,700 | $ | 639,900 | $ | 62,200 | $ | 784,900 | |||||||||||||
Total assets | $ | 1,679,200 | $ | 612,100 | $ | 795,700 | $ | 1,508,500 | $ | 2,440,500 | $ | 7,036,000 | |||||||||||||
-1 | Includes depreciation of property, equipment and leasehold improvement and amortization of intangibles |
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2015 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 16 - SUBSEQUENT EVENTS |
Management has evaluated the impact of events occurring after March 31, 2015 up to the date of the filing of these interim unaudited condensed consolidated financial statements. These statements contain all necessary adjustments and disclosures resulting from that evaluation. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2015 | |
Accounting Policies [Abstract] | |
Use of estimates | Use of Estimates |
The preparation of these consolidated financial statements in conformity with accounting principles generally accepted in the United States (U.S. GAAP) requires management to make a number of estimates and assumptions related to the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the period. Significant items subject to such estimates and assumptions include the carrying amount of intangible assets; valuation allowances and reserves for receivables and inventory and deferred income taxes; revenue recognition related to contracts accounted for under the percentage of completion method; share-based compensation; and loss contingencies, including those related to litigation. Actual results could differ from those estimates | |
Reclassifications | Reclassifications |
Certain amounts in the prior period financial statements have been reclassified to conform to the current period presentation. These reclassifications had no effect on reported consolidated net income (loss). | |
Research and Development | Research and Development |
Research and development ("R&D") costs are charged to expense as incurred. R&D expenses consist primarily of salaries, project materials, contract labor and other costs associated with ongoing product development and enhancement efforts. R&D expenses were $72,000 and $57,400 for the three months ended March 31, 2015 and 2014, respectively. | |
Income Taxes | Income Taxes |
The Company accounts for income taxes pursuant to Accounting Standards Codification (“ASC”) 740, Income Taxes, which utilizes the asset and liability method of computing deferred income taxes. The objective of this method is to establish deferred tax assets and liabilities for any temporary differences between the financial reporting basis and the tax basis of the Company's assets and liabilities at enacted tax rates expected to be in effect when such amounts are realized or settled. | |
ASC 740 also provides detailed guidance for the financial statement recognition, measurement and disclosure of uncertain tax positions recognized in the financial statements. Tax positions must meet a “more-likely-than-not” recognition threshold at the effective date to be recognized. During the three months ended March 31, 2014 and 2013 the Company recognized no adjustments for uncertain tax positions. | |
The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. No interest and penalties related to uncertain tax positions were recognized at March 31, 2014 and December 31, 2013. The Company expects no material changes to unrecognized tax positions within the next twelve months. | |
The Company has filed federal and state tax returns through December 31, 2013. The tax periods for the years ending December 31, 2008 through 2013 are open to examination by federal and state authorities. | |
Recently issued accounting pronouncements | Recently issued accounting pronouncements |
Changes to accounting principles generally accepted in the United States of America (U.S. GAAP) are established by the Financial Accounting Standards Board (FASB) in the form of accounting standards updates (ASU’s) to the FASB’s Accounting Standards Codification. The Company considers the applicability and impact of all new or revised ASU’s. | |
In May 2014, the Financial Accounting Standards Board (FASB) issued guidance creating Accounting Standards Codification (“ASC”) Section 606, “Revenue from Contracts with Customers”. The new section will replace Section 605, “Revenue Recognition” and creates modifications to various other revenue accounting standards for specialized transactions and industries. The section is intended to conform revenue accounting principles with a concurrently issued International Financial Reporting Standards with previously differing treatment between United States practice and those of much of the rest of the world, as well as, to enhance disclosures related to disaggregated revenue information. The updated guidance is effective for annual reporting periods beginning on or after December 15, 2016, and interim periods within those annual periods. The Company will adopt the new provisions of this accounting standard at the beginning of fiscal year 2017, given that early adoption is not an option. The Company will further study the implications of this statement in order to evaluate the expected impact on the consolidated financial statements. | |
In June 2014, the FASB issued Accounting Standards Update No. 2014-12, “Compensation - Stock Compensation (Topic 718): Accounting for Share-Based Payments when the terms of an award provide that a performance target could be achieved after the requisite service period,” (“ASU 2014-12”). Current U.S. GAAP does not contain explicit guidance on whether to treat a performance target that could be achieved after the requisite service period as a performance condition that affects vesting or as a nonvesting condition that affects the grant-date fair value of an award. The new guidance requires that a performance target that affects vesting and that could be achieved after the requisite service period is treated as a performance condition. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. The updated guidance will be effective for annual reporting periods beginning after December 15, 2015, including interim periods within that reporting period. Early adoption is permitted. The Company is in the process of evaluating this guidance; however, it is not expected to have a material effect on the consolidated financial statements upon adoption. |
PROPERTY_AND_EQUIPMENT_Tables
PROPERTY AND EQUIPMENT (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Property, Plant and Equipment [Abstract] | |||||||||
Schedule of property plant and equipment | Property and equipment was comprised of the following: | ||||||||
31-Mar-15 | 31-Dec-14 | ||||||||
Field and shop equipment | $ | 1,776,300 | $ | 1,690,900 | |||||
Vehicles | 943,900 | 672,300 | |||||||
Waste destruction equipment, leased | 1,148,000 | 1,145,600 | |||||||
Waste destruction equipment, not placed in service | 2,340,100 | 2,325,900 | |||||||
Furniture and office equipment | 301,900 | 291,300 | |||||||
Leasehold improvements | 65,400 | 65,400 | |||||||
6,575,600 | 6,191,400 | ||||||||
Less: accumulated depreciation and amortization | (1,469,200 | ) | (1,342,600 | ) | |||||
Property and equipment, net | $ | 5,106,400 | $ | 4,848,800 | |||||
Schedule of capital leased assets | Property and equipment included the following amounts for leases that have been capitalized at: | ||||||||
March 31, | 31-Mar | ||||||||
2015 | 2014 | ||||||||
Vehicles, field and shop equipment | $ | 347,800 | $ | 241,500 | |||||
Less: accumulated amortization | (81,100 | ) | (30,500 | ) | |||||
$ | 266,700 | $ | 211,000 |
INTANGIBLE_ASSETS_Tables
INTANGIBLE ASSETS (Tables) | 3 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||
Schedule of intangible assets | Intangible assets were comprised of the following: | ||||||||||||
31-Mar-15 | |||||||||||||
Gross carrying amount | Accumulated amortization | Net carrying value | |||||||||||
Customer list | $ | 42,500 | $ | (41,500 | ) | $ | 1,000 | ||||||
Technology | 823,000 | (456,600 | ) | 366,400 | |||||||||
Trade name | 54,600 | (53,300 | ) | 1,300 | |||||||||
$ | 920,100 | $ | (551,400 | ) | $ | 368,700 | |||||||
31-Dec-14 | |||||||||||||
Gross carrying amount | Accumulated amortization | Net carrying value | |||||||||||
Customer list | $ | 42,500 | $ | (40,000 | ) | $ | 2,500 | ||||||
Technology | 805,700 | (440,000 | ) | 365,700 | |||||||||
Trade name | 54,600 | (51,400 | ) | 3,200 | |||||||||
$ | 902,800 | $ | (531,400 | ) | $ | 371,400 | |||||||
Schedule of expected amortization expense | The estimated aggregate amortization expense for each of the next five years is as follows: | ||||||||||||
Remaining 2015 | $ | 60,200 | |||||||||||
2016 | 74,400 | ||||||||||||
2017 | 74,400 | ||||||||||||
2018 | 38,700 | ||||||||||||
2019 | 10,500 | ||||||||||||
Thereafter | 110,500 | ||||||||||||
$ | 368,700 |
ACCRUED_LIABILITIES_Tables
ACCRUED LIABILITIES (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Payables and Accruals [Abstract] | |||||||||
Schedule of accrued liabilities | Accrued liabilities were comprised of the following: | ||||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
Accrued compensation and related taxes | $ | 600,400 | $ | 616,600 | |||||
Accrued interest | 49,000 | 56,600 | |||||||
Accrued material and other job related costs | — | ||||||||
Other | 176,600 | 252,500 | |||||||
Total Accrued Liabilities | $ | 826,000 | $ | 925,700 |
UNCOMPLETED_CONTRACTS_Tables
UNCOMPLETED CONTRACTS (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Contractors [Abstract] | |||||||||
Schedule of uncompleted contracts | Costs, estimated earnings and billings on uncompleted contracts are as follows: | ||||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
Revenue Recognized | $ | 439,000 | $ | 168,700 | |||||
Less: Billings to date | (195,800 | ) | (107,600 | ) | |||||
Costs and estimated earnings in excess of | $ | 243,200 | $ | 61,100 | |||||
billings on uncompleted contracts | |||||||||
Billings to date | $ | 2,845,100 | $ | 1,250,900 | |||||
Revenue recognized | (2,401,600 | ) | (942,400 | ) | |||||
Billings in excess of costs and estimated | $ | 443,500 | $ | 308,500 | |||||
earnings on uncompleted contracts | |||||||||
DEBT_Tables
DEBT (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Debt Disclosure [Abstract] | |||||||||
Schedule of debt | Debt as of March 31, 2015 and December 31, 2014, was comprised of the following: | ||||||||
2015 | 2014 | ||||||||
June 2011 Note (See above) | $ | 68,000 | $ | 68,000 | |||||
Note payable dated February 2012, interest at 5% per annum, $112,500 is due December 31, 2014, convertible in whole or in part to common stock at $.50 per share. (see Note 11) | — | 225,000 | |||||||
Note payable insurance premium financing, interest at 4.25% per annum, payable in 10 installments of $27,927, due November 1, 2015 | 192,700 | — | |||||||
Capital lease obligations, secured by certain assets, maturing through March 2019 | 304,600 | 130,900 | |||||||
Total notes payable and capital lease obligations | 565,300 | 423,900 | |||||||
Less: current portion, including debt discount | (382,600 | ) | (363,000 | ) | |||||
Notes payable and capital lease obligations, long-term | $ | 182,700 | $ | 60,900 | |||||
RELATED_PARTY_TRANSACTIONS_Tab
RELATED PARTY TRANSACTIONS (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Related Party Transactions [Abstract] | |||||||||
Schedule of notes payable and accrued interest, related parties | Notes payable, related parties and accrued interest due to certain related parties as of March 31, 2015 and December 31, 2014 are as follows: | ||||||||
2015 | 2014 | ||||||||
Unsecured note payable dated February 2004, bearing interest at 8% per annum, originally due January 2008; assigned to CEO by a third party in 2010; due June 1, 2016 | $ | 37,000 | $ | 37,000 | |||||
Accrued interest | 24,800 | 36,800 | |||||||
$ | 61,800 | $ | 73,800 | ||||||
NET_LOSS_PER_SHARE_Tables
NET LOSS PER SHARE (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Earnings Per Share [Abstract] | |||||||||
Schedule of potentially dilutive securities | Potentially dilutive securities were comprised of the following: | ||||||||
Three Months Ended March 31, | |||||||||
2015 | 2014 | ||||||||
Warrants | 8,681,750 | 9,678,750 | |||||||
Options | 2,077,400 | 2,062,500 | |||||||
Convertible notes payable | — | 225,000 | |||||||
Contingently issuable shares upon equity purchase | 1,200,000 | — | |||||||
11,959,150 | 11,966,250 |
SEGMENT_INFORMATION_AND_MAJOR_1
SEGMENT INFORMATION AND MAJOR CUSTOMERS (Tables) | 3 Months Ended | ||||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||||
Segment Information And Major Customers Tables | |||||||||||||||||||||||||
Schedule of segment information | Segment information for the three months ended March 31, 2015 and 2014 is as follows: | ||||||||||||||||||||||||
2015 | Industrial | Railcar | Environmental | Solid | Corporate | Total | |||||||||||||||||||
Cleaning | Cleaning | Solutions | Waste | ||||||||||||||||||||||
Revenue | $ | 1,863,600 | $ | 713,100 | $ | 889,000 | $ | 28,000 | $ | — | $ | 3,493,700 | |||||||||||||
Depreciation and amortization (1) | 65,700 | 6,400 | 30,300 | 25,500 | 18,700 | 146,600 | |||||||||||||||||||
Interest expense | 10,200 | 3,500 | 300 | — | 3,400 | 17,400 | |||||||||||||||||||
Stock-based compensation | — | — | — | — | 98,100 | 98,100 | |||||||||||||||||||
Net income (loss) | 312,800 | 81,800 | (30,000 | ) | (262,900 | ) | (679,000 | ) | (577,300 | ) | |||||||||||||||
Capital expenditures (cash and | 4,300 | 1,900 | 16,700 | 79,800 | 384,200 | ||||||||||||||||||||
noncash) | 281,500 | ||||||||||||||||||||||||
Total assets | $ | 2,170,500 | $ | 764,900 | $ | 1,560,900 | $ | 3,580,100 | $ | 1,034,700 | $ | 9,111,100 | |||||||||||||
2014 | Industrial | Railcar | Environmental | Solid | Corporate | Total | |||||||||||||||||||
Cleaning | Cleaning | Solutions | Waste | ||||||||||||||||||||||
Revenue | $ | 1,657,600 | $ | 605,300 | $ | 520,100 | — | — | $ | 2,783,000 | |||||||||||||||
Depreciation and amortization (1) | $ | 48,700 | $ | 5,100 | $ | 33,400 | $ | 300 | $ | 5,600 | $ | 93,100 | |||||||||||||
Interest expense | $ | 10,600 | $ | 7,900 | $ | 1,700 | $ | 200 | $ | 3,200 | $ | 23,600 | |||||||||||||
Stock-based compensation | — | — | — | — | $ | 648,700 | $ | 648,700 | |||||||||||||||||
Net income (loss) | $ | 217,700 | $ | 31,700 | $ | (118,700 | ) | $ | (147,800 | ) | $ | (1,086,200 | ) | $ | (1,103,300 | ) | |||||||||
Capital expenditures (cash and noncash) | $ | 27,100 | $ | — | $ | 55,700 | $ | 639,900 | $ | 62,200 | $ | 784,900 | |||||||||||||
Total assets | $ | 1,679,200 | $ | 612,100 | $ | 795,700 | $ | 1,508,500 | $ | 2,440,500 | $ | 7,036,000 | |||||||||||||
-1 | Includes depreciation of property, equipment and leasehold improvement and amortization of intangibles | ||||||||||||||||||||||||
ORGANIZATION_AND_FINANCIAL_CON1
ORGANIZATION AND FINANCIAL CONDITION (Details Narrative) | Mar. 31, 2015 |
BeneFuels, LLC [Member] | |
Percentage ownership | 85.00% |
Paragon Waste Solutions, LLC [Member] | |
Percentage ownership | 54.00% |
SUMMARY_OF_SIGNIFICANT_ACCOUNT2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Accounting Policies [Abstract] | ||
Research and development expenses | $72,000 | $57,400 |
PROPERTY_AND_EQUIPMENT_Details
PROPERTY AND EQUIPMENT (Details Narrative) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation and amortization | $24,500 | $0 |
Depreciation | 126,600 | 71,900 |
Cost of goods sold | 106,900 | 65,800 |
Depreciation Nonproduction | $19,700 | $6,100 |
PROPERTY_AND_EQUIPMENT_Details1
PROPERTY AND EQUIPMENT (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $6,575,600 | $6,191,400 |
Less: accumulated depreciation and amortization | -1,469,200 | -1,342,600 |
Property and equipment, net | 5,106,400 | 4,848,800 |
Field and Shop Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 1,776,300 | 1,690,900 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 943,900 | 672,300 |
Waste destruction equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 1,148,000 | 1,145,600 |
Waste destruction equipment in progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 2,340,100 | 2,325,900 |
Furniture and office equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 301,900 | 291,300 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $65,400 | $65,400 |
PROPERTY_AND_EQUIPMENT_Details2
PROPERTY AND EQUIPMENT (Details 1) (Field and Shop Equipment [Member], USD $) | Mar. 31, 2015 | Mar. 31, 2014 |
Field and Shop Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Capital leased assets, gross | $347,800 | $241,500 |
Less: accumulated amortization | -81,100 | -30,500 |
Capital leased assets, net | $266,700 | $211,000 |
INTANGIBLE_ASSETS_Details_Narr
INTANGIBLE ASSETS (Details Narrative) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Amortization expense | $20,000 | $21,400 |
Upper Range [Member] | ||
Estimated useful lives | 10 years | |
Lower Range [Member] | ||
Estimated useful lives | 7 years |
INTANGIBLE_ASSETS_Details
INTANGIBLE ASSETS (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Intangible assets, gross | $920,100 | $902,800 |
Accumulated amortization | -551,400 | -531,400 |
Intangible assets, net | 368,700 | 371,400 |
Customer Lists [Member] | ||
Intangible assets, gross | 42,500 | 42,500 |
Accumulated amortization | -41,500 | -40,000 |
Intangible assets, net | 1,000 | 2,500 |
Technology [Member] | ||
Intangible assets, gross | 823,000 | 805,700 |
Accumulated amortization | -456,600 | -440,000 |
Intangible assets, net | 366,400 | 365,700 |
Trade Name [Member] | ||
Intangible assets, gross | 54,600 | 54,600 |
Accumulated amortization | -53,300 | -51,400 |
Intangible assets, net | $1,300 | $3,200 |
INTANGIBLE_ASSETS_Details_1
INTANGIBLE ASSETS (Details 1) (USD $) | Mar. 31, 2015 |
Estimated aggregate amortization expense: | |
Remaining 2015 | $60,200 |
2016 | 74,400 |
2017 | 74,400 |
2018 | 38,700 |
2019 | 10,500 |
Thereafter | 110,500 |
Total | $368,700 |
ACCRUED_LIABILITIES_Details
ACCRUED LIABILITIES (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Accrued Liabilities Details | ||
Accrued compensation and related taxes | $600,400 | $616,600 |
Accrued interest | 49,000 | 56,600 |
Accrued material and other job related costs | ||
Other | 176,600 | 252,500 |
Total Accrued Liabilities | $826,000 | $925,700 |
UNCOMPLETED_CONTRACTS_Details
UNCOMPLETED CONTRACTS (Details) (USD $) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Dec. 31, 2014 | |
Revenue Recognized | ($2,401,600) | ($942,400) |
Less: Billings to date | 2,845,100 | 1,250,900 |
Costs and estimated earnings in excess of billings on uncompleted contracts | 243,200 | 61,100 |
Billings in excess of costs and estimated earnings on uncompleted contracts | 443,500 | 308,500 |
Contracts Receivable [Member] | ||
Revenue Recognized | 439,000 | 168,700 |
Less: Billings to date | -195,800 | -107,600 |
Costs and estimated earnings in excess of billings on uncompleted contracts | $243,200 | $61,100 |
INVESTMENT_IN_PARAGON_WASTE_SO1
INVESTMENT IN PARAGON WASTE SOLUTIONS LLC (Details Narrative) (USD $) | 3 Months Ended | 1 Months Ended | 0 Months Ended | 1 Months Ended | 12 Months Ended | 41 Months Ended | |||||||
Mar. 31, 2015 | Mar. 31, 2014 | Feb. 28, 2015 | Sep. 30, 2013 | Mar. 04, 2014 | Nov. 17, 2014 | Jun. 30, 2012 | Aug. 31, 2011 | Dec. 31, 2010 | Mar. 31, 2015 | Dec. 31, 2014 | |||
Business Acquisition [Line Items] | |||||||||||||
License initiation fee | $28,000 | ||||||||||||
Revenues | 3,493,700 | 2,783,000 | |||||||||||
Officer of the Company [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Percentage ownership | 5.00% | ||||||||||||
Shareholder of the Company [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Percentage ownership | 5.00% | ||||||||||||
Xinhua Energy Environmental Technology | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Initial fees paid | 322,500 | ||||||||||||
First phase royalty fees payment | 430,000 | ||||||||||||
Second phase royalty fees payment | 350,000 | ||||||||||||
Remaining Portion of fee | 107,500 | 107,500 | |||||||||||
Exclusive Use License and Joint Operations Agreement with Sterall Inc [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Description of business acquisition reason | The License Agreement grants to Sterall the use of the PWS Technology and the CoronaLux™ waste destruction units for an initial five year term for the State of Florida, renewable for two additional five year terms, for the treatment and/or destruction of any and all regulated medical waste from any sources. The agreement requires Sterall to pay a $300,000 License Initiation Fee and in order for Sterall to maintain its exclusive license for the State of Florida. | ||||||||||||
Initial fees paid | 200,000 | ||||||||||||
First phase royalty fees payment | 500,000 | ||||||||||||
Second phase royalty fees payment | 750,000 | ||||||||||||
Third phase royalty fees payment | 750,000 | ||||||||||||
License initiation fee | 300,000 | ||||||||||||
Maximum payment of placement fee per unit | 207,000 | ||||||||||||
Minimum payment of placement fee per unit | 168,000 | ||||||||||||
Description of Net operating profit allocation | Commencing immediately royalty fees based on Sterall’s NOP for the Initial Facility Fee and ongoing royalties shall be paid on the fifteenth of each month for the succeeding month’s revenue for PWS’s specified allocation of NOP as set forth below, except that effective January 1, 2014 Sterall shall pay the greater of i) a minimum of $7,500 or 2) PWS’s effective NOP allocation. | ||||||||||||
• | Phase I Distribution- All NOP shall first be allocated and paid out 75% to PWS and 25% to Sterall until the first $1,200,000 in distributions are made to the joint venture partners ($900,000PWS/$300,000 Sterall). | ||||||||||||
• | Phase II Distribution - Thereafter, NOP shall be allocated and paid out 25% to PWS and 75% to Sterall until the next $800,000 in distributions are made to the joint venture partners ($200,000 PWS/$600,000 Sterall). | ||||||||||||
• | Phase III Distribution - Thereafter, all NOP shall be allocated and paid out 50%-50% to each joint venture partner for so long as Sterall’s Initial Facility operates and generates NOP. | ||||||||||||
Exclusive Use License and Equipment Lease Agreement with eCycling International [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
License initiation fee | 176,875 | ||||||||||||
Percentage of revenue to be distributed | 50.00% | ||||||||||||
Exclusive Use License and Equipment Lease Agreement with Medical Waste Services, LLC [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
License initiation fee | 225,000 | ||||||||||||
Percentage of revenue to be distributed | 50.00% | ||||||||||||
Black Stone Management Services [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Membership units acquired | 400,000 | ||||||||||||
Percentage ownership | 36.00% | ||||||||||||
Percentage allocated to two individuals | 10.00% | ||||||||||||
Stock issued for acquisition of intellectual property | 100,000 | ||||||||||||
Stock issued for acquisition of intellectual property (shares) | 1,000,000 | ||||||||||||
Paragon Waste Solutions, LLC [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Membership units issued | 1,000,000 | ||||||||||||
Membership units acquired | 600,000 | ||||||||||||
Percentage ownership | 54.00% | 54.00% | |||||||||||
Payment for funding of subsidiary | 4,400,000 | ||||||||||||
Royalty Revenue | 1,400 | ||||||||||||
Revenues | $28,000 | ||||||||||||
BeneFuels, LLC [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Percentage ownership | 85.00% | 85.00% |
PAYROLL_TAXES_PAYABLE_Details_
PAYROLL TAXES PAYABLE (Details Narrative) (IRS [Member], USD $) | 9 Months Ended | 12 Months Ended | |||
31-May-13 | Aug. 31, 2012 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2011 | |
IRS [Member] | |||||
Past due payroll taxes | $953,400 | $947,700 | $971,000 | ||
Payroll tax reduction of oustanding liability with IRS | 250,000 | ||||
Monthly installment payments, payroll taxes | $25,000 | $12,500 |
DEBT_Details_Narrative
DEBT (Details Narrative) (USD $) | 1 Months Ended | 3 Months Ended | |
Jan. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | |
Debt warrant, shares | 1,486,500 | ||
Notes Payable, June 2011 Note [Member] | |||
Debt, face amount | $40,000 | ||
Debt, issue date | 1-Jun-11 | ||
Debt, interest rate | 10.00% | ||
Debt warrant, shares | 13,000 | ||
Debt warrant, exercise price | $1 | ||
Debt discount at issuance | 170 | ||
Convertible Secured Promissory Note [Member] | |||
Debt, face amount | 225,000 | ||
Debt, issue date | 14-Feb-12 | ||
Debt, interest rate | 5.00% | ||
Debt conversion, price | $0.50 | ||
Debt, date principal and interest due if not converted | 31-Dec-14 | ||
Debt, principal amount due if not converted | 257,400 | ||
Additional borrowings under loan agreement | 225,000 | ||
Shares Converted | 514,800 | ||
Notes Payable, June 2011 2nd Note [Member] | |||
Debt, face amount | 25,000 | ||
Debt, accrued interest amount | 3,000 | ||
Debt, issue date | 1-Jun-11 | ||
Notes Payable, June 2011 New Note [Member] | |||
Debt, face amount | $68,000 |
DEBT_Details
DEBT (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Dec. 31, 2014 | |
Notes and capital lease obligation, total | $565,300 | $423,900 |
Notes and capital lease obligation, current | -382,600 | -363,000 |
Notes and capital lease obligation, long-term | 182,700 | 60,900 |
Number of payments | 10 | |
Notes Payable, June 2011 Note [Member] | ||
Long term debt, carrying amount | 192,700 | |
Interest rate | 10.00% | |
Payment amount | 27,927 | |
Debt, maturity date | 1-Nov-15 | |
Debt discount | 170 | |
Notes Payable, June 2011 New Note [Member] | ||
Long term debt, carrying amount | 68,000 | 68,000 |
Capital lease obligations [Member] | ||
Capital lease obligation, carrying amount | 304,600 | 130,900 |
Convertible Secured Promissory Note [Member] | ||
Long term debt, carrying amount | ||
Interest rate | 5.00% |
RELATED_PARTY_TRANSACTIONS_Det
RELATED PARTY TRANSACTIONS (Details Narrative) (USD $) | 3 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Reveune from customer | $442,700 | $494,700 | |
Irrevocable License & Royalty Agreement with PWS [Member] | |||
Percentage of royalty revenue | 5.00% | ||
Reveune from customer | 69,000 | 3,500 | |
New Technologies Agreement with Black Stone [Member] | |||
Issuance of common stock for intangible assets | 1,050,000 | ||
Number of shares of common stock issued for intangible asset | 1,000,000 | ||
Equity Agreement With Third Party [Member] | |||
Issuance of common stock for investment in unconsolidated subsidaiary | $1,212,000 | ||
Membership interests acquired | 22.5 membership interest units | ||
Number of shares issued for investment in unconsolidated affiliate | 1,200,000 | ||
Common stock, fair value (in dollars per shares) | $0.83 |
RELATED_PARTY_TRANSACTIONS_Det1
RELATED PARTY TRANSACTIONS (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Accrued interest | $24,800 | $36,800 |
Notes payable - related parties, including accrued interest | 61,800 | 73,800 |
Chief Executive Officer [Member] | Promissory Note [Member] | ||
Notes Payable | $37,000 | $37,000 |
Interest rate | 8.00% |
EQUITY_TRANSACTIONS_Details_Na
EQUITY TRANSACTIONS (Details Narrative) (USD $) | 3 Months Ended | 1 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Oct. 31, 2013 | Dec. 31, 2014 | |
Warrant, exercise price | $0.50 | |||
Net proceeds from private placement | $776,000 | |||
Number of units sold in private placement | 4,125 | |||
Number of shares sold in private placement | 1,155,000 | |||
Gross proceeds from private placement | 825,000 | |||
Number of warrant sold in private placement | 577,500 | |||
Commission paid | 49,000 | |||
Shares issued in warrant exercise | 120,949 | 610,000 | ||
Proceeds from warrant exercise | 305,000 | |||
Options exercised in cashless option exercise | 669,600 | |||
Common stock shares issued for services, value | 550,000 | |||
Common stock shares issued for services | 500,000 | |||
Share price for private investor (in dollars per share) | $0.50 | |||
Delinquent note payable | 446,500 | |||
Debt warrant, shares | 1,486,500 | |||
Fair value of warrants | 743,800 | |||
Warrants issued for services | 396,934 | |||
Noncontrolling ownership percentage | 46.00% | |||
October 2013 Private Placement [Member] | ||||
Private placement, shares issued per unit | 70,000 | |||
Private placement, warrants issued per unit | 35,000 | |||
Private placement, value per unit | 50,000 | |||
Debt warrant, term | 5 years | |||
Warrant, exercise price | $1 | |||
Net proceeds from private placement | 2,957,700 | |||
Number of units sold in private placement | 64.25 | |||
Number of shares sold in private placement | 4,497,500 | |||
Gross proceeds from private placement | 3,212,500 | |||
Number of warrant sold in private placement | 2,248,750 | |||
Fair market value common stock warrant (in dollars per share) | $0.12 | |||
Fair market value common stock (in dollars per unit) | 0.6 | |||
Fair market value warrant (in dollars per unit) | 0.115 | |||
Commission paid | $254,800 |
CUSTOMER_CONCENTRATIONS_Detail
CUSTOMER CONCENTRATIONS (Detail Narratives) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Risks and Uncertainties [Abstract] | ||
Number of customers | One customer | One customer |
Percentage of concentration risk | 48.00% | 47.00% |
NET_LOSS_PER_SHARE_Details
NET LOSS PER SHARE (Details) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive securities | 11,959,150 | 11,966,250 |
Warrants [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive securities | 8,681,750 | 9,678,750 |
Options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive securities | 2,077,400 | 2,062,500 |
Convertible notes payable [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive securities | 225,000 | |
Contingently issuable shares [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive securities | 1,200,000 |
SEGMENT_INFORMATION_AND_MAJOR_2
SEGMENT INFORMATION AND MAJOR CUSTOMERS (Details) (USD $) | 3 Months Ended | ||||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |||
Total revenue | $3,493,700 | $2,783,000 | |||
Depreciation and amortization | 146,600 | [1] | 93,100 | [1] | |
Interest expense | 17,400 | 23,600 | |||
Stock-based compensation expense | 98,100 | 648,700 | |||
Net income (loss) | -577,300 | -1,103,300 | |||
Capital expenditures (cash and noncash) | 384,200 | 784,900 | |||
Total assets | 9,111,100 | 7,036,000 | 8,997,100 | ||
Industrial Cleaning [Member] | |||||
Total revenue | 1,863,600 | 1,657,600 | |||
Depreciation and amortization | 65,700 | [1] | 48,700 | [1] | |
Interest expense | 10,200 | 10,600 | |||
Stock-based compensation expense | |||||
Net income (loss) | 312,800 | 217,700 | |||
Capital expenditures (cash and noncash) | 281,500 | 27,100 | |||
Total assets | 2,170,500 | 1,679,200 | |||
Railcar Cleaning [Member] | |||||
Total revenue | 713,100 | 605,300 | |||
Depreciation and amortization | 6,400 | [1] | 5,100 | [1] | |
Interest expense | 3,500 | 7,900 | |||
Stock-based compensation expense | |||||
Net income (loss) | 81,800 | 31,700 | |||
Capital expenditures (cash and noncash) | 4,300 | ||||
Total assets | 764,900 | 688,300 | |||
Environmental Solutions [Member] | |||||
Total revenue | 889,000 | 520,100 | |||
Depreciation and amortization | 30,300 | [1] | 33,400 | [1] | |
Interest expense | 300 | 1,700 | |||
Stock-based compensation expense | |||||
Net income (loss) | -30,000 | -118,700 | |||
Capital expenditures (cash and noncash) | 1,900 | 55,700 | |||
Total assets | 1,560,900 | 1,671,200 | |||
Solid Waste [Member] | |||||
Total revenue | 28,000 | ||||
Depreciation and amortization | 25,500 | [1] | 300 | [1] | |
Interest expense | 200 | ||||
Stock-based compensation expense | |||||
Net income (loss) | -262,900 | -147,800 | |||
Capital expenditures (cash and noncash) | 16,700 | 639,900 | |||
Total assets | 3,580,100 | 3,468,300 | |||
Corporate [Member] | |||||
Total revenue | |||||
Depreciation and amortization | 18,700 | [1] | 5,600 | [1] | |
Interest expense | 3,400 | 3,200 | |||
Stock-based compensation expense | 98,100 | 648,700 | |||
Net income (loss) | -679,000 | -1,086,200 | |||
Capital expenditures (cash and noncash) | 79,800 | 62,200 | |||
Total assets | $1,034,700 | $627,400 | |||
[1] | Includes depreciation of property, equipment and leasehold improvement and amortization of intangibles |