Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Oct. 31, 2016 | |
Document And Entity Information | ||
Entity Registrant Name | Strategic Environmental & Energy Resources, Inc. | |
Entity Central Index Key | 1,576,197 | |
Document Type | 10-Q | |
Trading Symbol | SENR | |
Document Period End Date | Sep. 30, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
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 | 54,525,079 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,016 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 | ||
Current assets: | ||||
Cash | $ 142,300 | $ 257,100 | [1] | |
Accounts receivable, net of allowance for doubtful accounts of $250,400 and $246,500, respectively | 1,929,600 | 1,298,900 | [1] | |
Costs and estimated earnings in excess billings on uncompleted contracts | [1] | 204,000 | ||
Prepaid expenses and other current assets | 520,500 | 534,000 | [1] | |
Total current assets | 2,592,400 | 2,294,000 | [1] | |
Property and equipment, net | 3,972,600 | 4,331,300 | [1] | |
Intangible assets, net | 755,800 | 786,600 | [1] | |
Asset related to pending settlement (Note 10) | 720,000 | |||
Other assets | 25,600 | 37,500 | [1] | |
TOTAL ASSETS | 8,066,400 | 7,449,400 | [1] | |
Current liabilities: | ||||
Accounts payable | 1,776,800 | 1,382,200 | [1] | |
Accrued liabilities | 938,100 | 889,500 | [1] | |
Billings in excess of costs and estimated earnings on uncompleted contracts | 700,400 | 587,900 | [1] | |
Deferred revenue | 188,300 | 133,900 | [1] | |
Payroll taxes payable | 987,600 | 970,500 | [1] | |
Customer deposits | 330,000 | 330,000 | [1] | |
Current portion of notes payable and capital lease obligations | 825,500 | 660,100 | [1] | |
Related party payable, including accrued interest | 46,400 | 31,800 | [1] | |
Total current liabilities | 5,793,100 | 4,985,900 | [1] | |
Deferred revenue, non-current | 330,600 | 337,200 | [1] | |
Notes payable and capital lease obligations, net of current portion | 1,296,700 | 1,161,400 | [1] | |
Total liabilities | 7,420,400 | 6,484,500 | [1] | |
Commitments and contingencies | [1] | |||
Stockholders' Equity): | ||||
Preferred stock; $.001 par value; 5,000,000 shares authorized; -0- shares issued | [1] | |||
Common stock; $.001 par value; 70,000,000 shares authorized; 54,525,079 and 52,375,079 shares issued and outstanding 2016 and 2015, respectively | 54,500 | 52,400 | [1] | |
Common stock subscribed | 25,000 | 50,000 | [1] | |
Additional paid-in capital | 19,074,700 | 17,690,900 | [1] | |
Stock subscription receivable | (25,000) | (25,000) | [1] | |
Accumulated deficit | (16,843,800) | (15,387,100) | [1] | |
Total stockholders' equity | 2,285,400 | 2,381,200 | [1] | |
Non-controlling interest | (1,639,400) | (1,416,300) | [1] | |
Total equity | 646,000 | 964,900 | [1] | |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 8,066,400 | $ 7,449,400 | [1] | |
[1] | These numbers were derived from the audited financial statements for the year ended December 31, 2015. |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 | [1] |
Statement of Financial Position [Abstract] | |||
Allowance for doubtful accounts | $ 250,400 | $ 246,500 | |
Preferred stock, par value (in dollars per shares) | $ 0.001 | $ 0.001 | |
Preferred stock, authorized | 5,000,000 | 5,000,000 | |
Preferred stock, issued | 0 | 0 | |
Common stock, par value (in dollars per shares) | $ 0.001 | $ 0.001 | |
Common stock, authorized | 70,000,000 | 70,000,000 | |
Common stock, issued | 54,525,079 | 52,375,079 | |
Common stock, outstanding | 54,525,079 | 52,375,079 | |
[1] | These numbers were derived from the audited financial statements for the year ended December 31, 2015. |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Revenue: | ||||
Products | $ 1,749,100 | $ 965,500 | $ 3,454,500 | $ 2,796,000 |
Services | 1,045,400 | 1,891,200 | 5,277,900 | 6,461,700 |
Solid waste | 42,000 | 111,500 | 170,100 | 183,400 |
Total revenue | 2,836,500 | 2,968,200 | 8,902,500 | 9,441,100 |
Operating expenses: | ||||
Products costs | 1,323,100 | 674,600 | 2,388,600 | 1,929,300 |
Services costs | 1,193,100 | 1,423,800 | 4,254,400 | 5,030,900 |
Solid waste costs | 79,800 | 194,900 | 245,400 | 490,400 |
General and administrative expenses | 532,200 | 668,800 | 1,582,800 | 2,093,500 |
Salaries and related expenses | 445,700 | 685,600 | 1,817,900 | 2,012,600 |
Total operating expenses | 3,573,900 | 3,647,700 | 10,289,100 | 11,556,700 |
Income (loss) from operations | (737,400) | (679,500) | (1,386,600) | (2,115,600) |
Other income (expense): | ||||
Interest expense | (56,000) | (5,500) | (258,300) | (45,000) |
Gain on debt settlement | 42,400 | 42,400 | ||
Loss contingency | (48,000) | (48,000) | ||
Other | (32,400) | (1,900) | (2,600) | 1,000 |
Total non-operating expense, net | (136,400) | 35,000 | (308,900) | (1,600) |
Net loss before earnings from equity method joint ventures | (873,800) | (644,500) | (1,695,500) | (2,117,200) |
Income from equity method joint ventures | 15,700 | |||
Net income (loss) | (873,800) | (644,500) | (1,679,800) | (2,117,200) |
Less: Net loss attributable to non-controlling interest | (83,600) | (107,700) | (223,100) | (380,500) |
Net income (loss) attributable to SEER common stockholders | $ (790,200) | $ (536,800) | $ (1,456,700) | $ (1,736,700) |
Net loss per share, basic and diluted (in dollars per share) | $ (0.02) | $ (0.01) | $ (0.03) | $ (0.04) |
Weighted average shares outstanding - basic and diluted (in shares) | 54,525,079 | 52,362,015 | 54,263,765 | 52,304,573 |
CONSOLIDATED STATEMENT OF CASH
CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) - USD ($) | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | |||
Cash flows from operating activities: | ||||
Net income (loss) | $ (1,679,800) | $ (2,117,200) | ||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||
Provision for doubtful accounts receivable | 3,900 | (17,100) | ||
Depreciation and amortization | [1] | 570,900 | 439,900 | |
Stock-based compensation expense | 84,000 | 175,800 | ||
Non-cash expense for interest, warrants - accretion of debt discount | 101,700 | 400 | ||
Gain on disposition of assets | (25,600) | (45,400) | ||
Changes in operating assets and liabilities: | ||||
Accounts receivable | (734,200) | 1,389,500 | ||
Costs in Excess of billings on uncompleted contracts | 204,000 | (358,400) | ||
Prepaid expenses and other assets | 304,000 | 150,500 | ||
Accounts payable and accrued liabilities | 509,400 | (118,900) | ||
Billings in excess of revenue on uncompleted contracts | 112,500 | 93,000 | ||
Deferred revenue | 47,800 | 620,500 | ||
Payroll taxes payable | 17,100 | 17,100 | ||
Net cash (used in) provided by operating activities | (484,300) | 229,700 | ||
Cash flows from investing activities: | ||||
Insurance proceeds from property damage | 59,000 | |||
Purchase of property and equipment | (177,300) | (448,300) | ||
Purchase of intangibles | (37,500) | (58,900) | ||
Net cash used in investing activities | (155,800) | (507,200) | ||
Cash flows from financing activities: | ||||
Payments of notes, short term financing and capital lease obligations | (559,600) | (354,800) | ||
Payments of related party notes payable and accrued interest | (20,000) | (42,000) | ||
Proceeds from convertible debt | 250,000 | 1,000,000 | ||
Proceeds from short term financing | 400,000 | |||
Proceeds from exercise of warrants | 25,000 | |||
Proceeds from warrant extensions | 29,900 | |||
Proceeds from the sale of common stock and warrants, net of expenses | 400,000 | |||
Net cash provided by (used in) financing activities | 525,300 | 603,200 | ||
Net increase (decrease) in cash | (114,800) | 325,700 | ||
Cash at the beginning of period | 257,100 | [2] | 443,000 | |
Cash at the end of period | 142,300 | 768,700 | ||
Supplemental disclosures of cash flow information: | ||||
Cash paid for interest | 207,600 | 32,400 | ||
Discount on convertible debt | 4,900 | 14,600 | ||
Conversion of debt and accrued interest to equity | 257,400 | |||
Financing of prepaid insurance premiums | 278,600 | 273,900 | ||
Capital lease additions | $ 214,400 | |||
Issuance of common stock for other asset | $ 720,000 | |||
[1] | Includes depreciation of property, equipment and leasehold improvement and amortization of intangibles. | |||
[2] | These numbers were derived from the audited financial statements for the year ended December 31, 2015. |
ORGANIZATION AND FINANCIAL COND
ORGANIZATION AND FINANCIAL CONDITION | 9 Months Ended |
Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND FINANCIAL CONDITION | NOTE 1 - ORGANIZATION AND FINANCIAL CONDITION Organization and Going Concern 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 four wholly-owned operating subsidiaries and two majority-owned subsidiaries; all of which together provide technology solutions and services to companies primarily in the oil and gas, refining, landfill, food, beverage & agriculture and renewable fuel industries. The four wholly-owned subsidiaries include: 1) REGS, LLC (d/b/a Resource Environmental Group Services (“REGS”)) provides industrial and proprietary cleaning services to refineries, oil fields and other private and governmental entities; 2) Tactical Cleaning Company, LLC (“Tactical”), provides proprietary 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 and odor control systems primarily for landfill operations, waste-water treatment facilities, oil and gas fields, refineries, municipalities and food, beverage & agriculture operations throughout the U.S.; 4) SEER Environmental Materials, LLC,(“SEM”), a materials technology company focused on development of cost-effective chemical absorbents. 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 etc i.e Reach (the trade name for BeneFuels, LLC), is currently owned 85% by SEER and focuses specifically on developing renewable biomethane projects that convert raw biogas to pipeline quality gas and/or compressed natural gas (“CNG”) for fleet vehicle fuel. Reach had minimal operations for the three months and nine months ended September 30, 2016 and 2015. Principals of Consolidation The accompanying consolidated financial statements include the accounts of SEER, its wholly-owned subsidiaries, REGS, TCC, MV and SEM 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. The Company has non-controlling interest in joint ventures, which are reported on the equity method. Going Concern As shown in the accompanying consolidated financial statements, the Company has experienced recurring losses, and has accumulated a deficit of approximately $16.8 million as of September 30, 2016, and $15.4 million as of December 31, 2015. For the nine months ended September 30, 2016 we had net loss before adjustment for losses attributable to non-controlling interest of approximately $1.7 million and for the years ended December 31, 2015, and 2014, we incurred net losses before adjustment for losses attributable to non-controlling interest of approximately $3.4 million and $726,000, respectively. The Company had a working capital deficit of approximately $3.2 million at September 30, 2016, an increase of approximately $500,000 in the working capital deficit of $2.7 million at December 31, 2015. REGS, a wholly owned subsidiary, was notified that effective April 1, 2016 it would no longer be providing routine maintenance services to its largest customer but would still be eligible to provide other industrial cleaning services. The projected loss of revenue from this customer is estimated to be between $2.5 and $3 million annually, but, as discussed below, the Company has implemented remedial measures to offset some of this loss in revenue. These factors raise substantial doubt about the ability of the Company to continue to operate as a going concern. Realization of a major portion of our assets as of September 30, 2016 and December 31, 2015, is dependent upon our continued operations. The Company is dependent on generating additional revenue or obtaining adequate capital to fund operating losses until it becomes profitable. The Company opened an additional rail car cleaning facility in the Midwest (Illinois) in April 2016 and operations have commenced and revenue is being generated. The revenue from this facility has offset some of the lost service revenue previously derived from the oil refinery sector. Additionally, on August 30, 2016 the Company was awarded a permit for its flaring equipment at its Kansas rail facility and this new service offering is projected to offset some of the lost service revenue previously derived from the oil refinery sector. Revenue from flaring operations commenced in September 2016. For the nine months ended September 30, 2016 we raised $425,000 from the sale of common stock and exercise of warrants and another $29,900 from the extension of warrants. In September 2016, we raised $250,000 in convertible debt financing. In addition, we have undertaken a number of specific steps to improve operating efficiencies, revenues and income to continue to operate as a going concern. We continue to focus on developing organic growth in our operating companies and improving gross and net margins through increased attention to pricing, aggressive cost management and overhead reductions. Critical to achieving profitability will be our ability to license and or sell, permit and operate our CoronaLux™ waste destruction units either though our joint ventures and/or licensees. We have increased our business development efforts to address opportunities identified in expanding markets attributable to increased interest in energy conservation and emission control regulations, particularly the landfill gas and oil field emissions sectors. In addition, the Company is evaluating various forms of financing which may be available to it, i.e., debt and/or equity financing while carefully evaluating the impact on share dilution. There can be no assurance that the Company will secure additional financing for working capital, increase revenues and achieve the desired result of net income and positive cash flow from operations in future years. These financial statements do not give any effect to any adjustments that would be necessary should the Company be unable to report on a going concern basis. 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, 2016 for the years ended December 31, 2015 and 2014. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2016 | |
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 $49,100 and $80,900 for the three months ended September 30, 2016 and 2015, respectively and $149,100 and $279,700 for the nine months ended September 30, 2016 and 2015, respectively. Income Taxes The Company accounts for income taxes pursuant to Accounting Standards Codification Income Taxes, 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 and nine months ended September 30, 2016 and 2015 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 September 30, 2016 and December 31, 2015. 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, 2015. The tax periods for the years ending December 31, 2008 through 2015 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. New Accounting Pronouncements Not Yet Adopted 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 was effective for annual reporting periods beginning on or after December 15, 2016, and interim periods within those annual periods. On July 9, 2015, the FASB approved a one year delay of the effective date. The Company will now adopt the new provisions of this accounting standard at the beginning of fiscal year 2018, unless it choose to early adopt in 2017. The Company will further study the implications of this statement in order to evaluate the expected impact on the consolidated financial statements. In July 2015, the FASB issued ASU 2015-11, “Simplifying the Measurement of Inventory.” Under this ASU, inventory will be measured at the “lower of cost and net realizable value” and options that currently exist for “market value” will be eliminated. The ASU defines net realizable value as the “estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation.” No other changes were made to the current guidance on inventory measurement. ASU 2015-11 is effective for interim and annual periods beginning after December 15, 2016. Early application is permitted and should be applied prospectively. Management is evaluating the provisions of this statement, including which period to adopt, and has not determined what impact the adoption of ASU 2015-11 will have on the Company’s financial position or results of operations. In November 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.2015-17, “Balance Sheet Classification of Deferred Taxes”. The new guidance eliminates the requirement to separate deferred income tax liabilities and assets into current and noncurrent amounts. The amendments will require that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The updated guidance will be effective for fiscal years beginning after December 15, 2016, including interim periods within those annual periods. Early adoption is permitted, and the amendments may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. The Company is in the process of evaluating this guidance. In January 2016, the FASB issued Accounting Standards Update No. 2016-01, Financial Instruments-Overall: Recognition and Measurement of Financial Assets and Financial Liabilities In February 2016, the FASB issued new guidance related to leases that outlines a comprehensive lease accounting model and supersedes the current lease guidance. The new guidance requires lessees to recognize lease liabilities and corresponding right-of-use assets for all leases with lease terms of greater than 12 months. It also changes the definition of a lease and expands the disclosure requirements of lease arrangements. The new guidance must be adopted using the modified retrospective approach and will be effective for the Company starting in the first quarter of fiscal 2019. Early adoption is permitted. The Company is in the process of determining the effects the adoption will have on its consolidated financial statements as well as whether to adopt the new guidance early. In March 2016, the FASB issued Accounting Standards Update 2016-09, Improvements to Employee Share-Based Payment Accounting Recently Adopted Accounting Standards 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 was effective January 1, 2016 and did not have a material effect on the consolidated financial statements. In April 2015, the FASB issued ASU 2015-03, ”Simplifying the Presentation of Debt Issuance Costs,” (“ASU 2015-03”). ASU 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. ASU 2015-03 is effective for the first interim period for fiscal years beginning after December 15, 2015. The guidance was effective January 1, 2016 and it did not have a material effect on the consolidated financial statements. In September 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-16, “Simplifying the Accounting for Measurement-Period Adjustments”. The new guidance eliminates the requirement to retrospectively account for adjustments to provisional amounts recognized in a business combination. Under the ASU, the adjustments to the provisional amounts will be recognized in the reporting period in which the adjustment amounts are determined. The updated guidance will be effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. The guidance was effective January 1, 2016 and did not have a material effect on the consolidated financial statements. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 9 Months Ended |
Sep. 30, 2016 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 3 - PROPERTY AND EQUIPMENT Property and equipment was comprised of the following: September 30, 2016 December 31, 2015 Field and shop equipment $ 2,319,400 $ 2,188,500 Vehicles 689,900 750,800 Waste destruction equipment, placed in service 1,288,700 1,276,600 Waste destruction equipment, not placed in service 1,521,100 1,521,100 Furniture and office equipment 322,800 321,400 Leasehold improvements 65,400 65,400 Building and improvements 21,200 18,600 Land 162,900 162,900 6,391,400 6,305,300 Less: accumulated depreciation and amortization (2,418,800 ) (1,974,000 ) Property and equipment, net $ 3,972,600 $ 4,331,300 Three Month Ended Nine months ended September September September September Cost of Goods Sold $ 141,400 $ 106,900 $ 430,100 $ 320,800 General & Administrative 24,200 19,600 72,500 58,900 Total Depreciation Expense $ 165,600 $ 126,500 $ 502,600 $ 379,700 Accumulated depreciation on leased CoronaLux™ units included in accumulated depreciation and amortization above is $271,700 and $149,500 as of September 30, 2016 and 2015, respectively. Property and equipment included the following amounts for leases that have been capitalized at: September 30, December 31, 2016 2015 Vehicles, field and shop equipment $ 462,700 $ 462,700 Less: accumulated amortization (199,400 ) (127,800 ) $ 263,300 $ 334,900 |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | NOTE 4 – INTANGIBLE ASSETS Intangible assets were comprised of the following: September 30, 2016 Gross carrying Accumulated Net carrying Goodwill $ 277,800 $ — $ 277,800 Customer list 42,500 (42,500 ) — Technology and Patents 1,064,600 (586,600 ) 478,000 Trade name 54,600 (54,600 ) — $ 1,439,500 $ (683,700 ) $ 755,800 December 31, 2015 Gross carrying Accumulated Net carrying Goodwill $ 277,800 $ — $ 277,800 Customer list 42,500 (42,500 ) — Technology and Patents 1,027,100 (518,300 ) 508,800 Trade name 54,600 (54,600 ) — $ 1,402,000 $ (615,400 ) $ 786,600 The estimated useful lives of the intangible assets range from seven to ten years. Amortization expense was $25,200 and $20,000 for the three months ended September 30, 2016 and 2015, respectively and $68,200 and $60,100 for the nine months ended September 30, 2016, respectively. |
ACCRUED LIABILITIES
ACCRUED LIABILITIES | 9 Months Ended |
Sep. 30, 2016 | |
Payables and Accruals [Abstract] | |
ACCRUED LIABILITIES | NOTE 5 - ACCRUED LIABILITIES Accrued liabilities were comprised of the following: September 30, December 31, Accrued compensation and related taxes $ 641,800 $ 579,800 Accrued interest 37,100 58,800 Other 259,200 250,900 Total Accrued Liabilities $ 938,100 $ 889,500 |
UNCOMPLETED CONTRACTS
UNCOMPLETED CONTRACTS | 9 Months Ended |
Sep. 30, 2016 | |
Contractors [Abstract] | |
UNCOMPLETED CONTRACTS | NOTE 6 - UNCOMPLETED CONTRACTS Costs, estimated earnings and billings on uncompleted contracts are as follows: September 30, December 31, 2016 2015 Revenue Recognized — $ 1,814,300 Less: Billings to date — (1,610,300 ) Costs and estimated earnings in excess of billings on — $ 204,000 Billings to date $ 2,430,100 $ 2,273,400 Revenue recognized (1,729,700 ) (1,685,500 ) Billings in excess of costs and estimated earnings on $ 700,400 $ 587,900 |
INVESTMENT IN PARAGON WASTE SOL
INVESTMENT IN PARAGON WASTE SOLUTIONS LLC | 9 Months Ended |
Sep. 30, 2016 | |
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. On August 31, 2016 Blackstone entered into a settlement agreement with a third party to rescind a stock exchange agreement dated July 1, 2013 between Blackstone and the third party and consideration exchanged by the parties in the July 1, 2013 agreement were returned by each party resulting in Blackstone getting back 10% membership units in PWS. At September 30, 2016 the Company owned 54% of the membership units, Black Stone owned 36% of the membership units and two related parties (as noted above), each owned 5% of the membership units. In August, 2011, we acquired certain intellectual property in regards to waste destruction technology (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 April 2016, the Company received Notice of Allowance of its application for a continuation patent. This patent continuation application incorporates all original and prior claims and will provide expanded and additional protection of the underlying and core waste destruction technology. 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 licensing revenues and sales of CoronaLux™ units of approximately $125,100 for the nine months ended September 30, 2016 and $890,100 for the year ended December 31, 2015, as such, royalties of $54,700 and $48,400 were due at September 30, 2016 and December 31, 2015, respectively. Since its inception through September 30, 2016, we have provided approximately $5.5 million in funding to PWS for working capital and the further development and construction of various prototypes and commercial waste destruction units. No members of PWS have made capital contributions or other funding to PWS other than SEER. 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 granted Sterall the use of the PWS Technology and the CoronaLux™ waste destruction units for an initial five year term in the State of Florida and 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 required 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 was to be paid to PWS by May 23, 2014, regardless of net operating profits of Sterall (“NOP”). During the initial 5-year term, a minimum of $500,000 of total royalty payments to PWS must be made either from 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. Sterall has not generated any NOP and has not paid any licensing fees to PWS as required by the License Agreement, including the minimum payments required under the agreement. Black Stone is a minority shareholder of Sterall. During the year ended December 31, 2014, Sterall ordered a total of six CoronaLux™ units, of which one unit was delivered after payment of a non-refundable placement fee of $236,250. The remaining five units have not been delivered as of September 30, 2016 as Sterall has defaulted on their purchase order for payment of the units ordered. The Company still retains a non-refundable deposit of $330,000 against the five units ordered. On February 22, 2014, SEER and PWS entered into an Agreement with Daniel McAteer & Associates (“DMA”) to develop, permit and exploit the PWS waste destruction technology in Ireland and United Kingdom (“Limited Territory”). The Agreement called for the formation of a Joint Venture to be owned 50% by SEER and 50% by DMA. In accordance with the agreement, DMA was to pay a one-time license fee of $350,000 for an exclusive license for the limited purpose of medical waste destruction in the Limited Territory. On June 10, 2014 Paragon Waste (UK) Ltd (“Paragon UK”, “UK Joint Venture”), was formed in accordance with the laws of Northern Ireland. A total of 300,100 shares were issued upon formation, 100 Ordinary A voting shares were issued, of which PWS received 50 Ordinary A shares and 300,000 Ordinary B non-voting shares were issued. In 2015, the Agreement with DMA was amended to where Paragon UK purchased the CoronaLux™ unit from PWS for $350,000. Operations to date of the Paragon UK Joint Venture have been limited to formation, the delivery of a CoronaLux™ unit with a third party in the United Kingdom and application and permitting efforts with regulatory entities. 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 requires a payment of $176,875 as a non-refundable initial licensing fee 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. As of September 30, 2016, eCycling is still in the process of permitting the unit, and therefore, has not yet generated any NOP. As a result of eCycling not generating any NOP, their licensing contract was amended to provide for an additional $176,875 to be paid as licensing fees, all of which has been paid as of September 30, 2016. 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 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. PWS and Medical Waste Services, LLC (“MWS”) formed a contractual joint venture to exploit the PWS medical waste destruction technology. MWS has received approval from the California Department of Public Health and a restricted permit from the South Coast Air Quality Management District (“SCAQMD”) to operate the CoronaLux™ unit licensed by MWS at its facility in Southern California. Operations to date have included the destruction of medical waste under this temporary operating permit issued by SCAQMD since May 2015. All required testing directed by SCAQMD has been successfully completed in 2016 and all required filings have been made to obtain a full operating permit from SCAQMD. The final issuance is pending. In February 2015, PWS entered into a License Agreement with Particle Science Tech of Environmental Protection, Inc (“Particle”) a US subsidiary of Xinhua Energy Environmental Technology Co., Ltd (“Xinhua”), a large multi-national environmental company based in China. 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 Particle) 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. In 2015, PWS sold a CoronaLux™ unit to Xinhua for $430,500. 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 non-refundable licensing and placement fees have been recorded as deferred revenue in the accompanying consolidated balance sheets at September 30, 2016 and December 31, 2015 and are recognized as revenue ratably over the term of the contract. |
PAYROLL TAXES PAYABLE
PAYROLL TAXES PAYABLE | 9 Months Ended |
Sep. 30, 2016 | |
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, accrued interest and penalties were incurred related to these unpaid payroll taxes. In or around 2010, REGS retained Washington D.C.-based legal counsel specializing in resolving federal tax matters. REGS has been represented by this firm throughout all phases of this tax matter and related proceedings. In September 2011, REGS received approval from the Internal Revenue Service (“IRS”) to begin paying the outstanding federal payroll tax liability plus the related incurred interest and penalties totaling approximately $971,000 in installments (the “Installment Plan”). Under the Installment Plan, REGS was 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 the installment plan and could demand the outstanding liability to be repaid through traditional enforcement proceedings available to the IRS. Additionally, the IRS has filed a notice of federal tax lien against certain of REGS assets in order to secure 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 personal liability exposure for a portion of the taxes if REGS does not pay them. For the tax periods 2009 through 2014, one of the officers of REGS has had personal income tax refunds totaling $34,262 seized by the IRS and applied to REGS IRS obligation. In May 2013, REGS filed an Offer in Compromise (“OIC”) with the IRS. While the OIC was under review by the IRS, the requirement to pay $25,000 a month under the Installment Plan was suspended. REGS was informed by its legal counsel that the IRS had accepted REGS’ OIC. However by a letter dated March 27, 2014, REGS was notified that the OIC had been rejected. REGS then appealed that rejections decision. However that appeal has been denied. As a result, the Installment Plan is terminated. In June 2014, REGS 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. The IRS has not taken any current action against REGS and REGS continues to be represented by its legal counsel. As of September 30, 2016 and December 31, 2015, the outstanding balance due to the IRS was $987,600, and $970,500, respectively. Other than this outstanding payroll tax matter arising in 2009, all state and federal taxes have been paid by REGS in a timely manner. |
DEBT
DEBT | 9 Months Ended |
Sep. 30, 2016 | |
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. 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. In August 2016, the note and all accrued interest was paid by an offset to trade accounts receivable from the note holder. September 30, December 31, June 2011 Note - In Default $ — $ 68,000 Convertible notes payable, interest at 8% per annum, $400,000 principal payment due December 31, 2016, remaining unpaid principal and interest due August 20, 2018 and September 29, 2019, convertible into common stock at the option of the lenders at a rate ranging from $.70 to $1.10 per share 1,500,000 1,250,000 Debt discount (see Note 13) (16,800 ) (16,600 ) Note payable dated October 13, 2015, interest at 8% per annum, payable in 24 monthly installments of principal and interest $4,523, due October 1, 2017. Secured by certain assets of SEM and guaranteed by SEER and MV 56,100 92,300 Note payable dated October 13, 2015, interest at 8% per annum, payable in 60 monthly installments of principal and interest $4,562, due October 1, 2020. Secured by real estate and other assets of SEM and guaranteed by SEER and MV 190,200 218,900 Note payable insurance premium financing, interest at 4.25% per annum, payable in 10 installments of $28,417, due November 1, 2016 56,500 — Short term note payable dated August 23, 2016 due October 23, 2016. Interest is $10,000 for the first two weeks and $1,000 per week thereafter. Note is secured by certain trade accounts receivables. (Note was paid in October 2016) 200,000 — Capital lease obligations, secured by certain assets, maturing through March 2019 136,200 208,900 Total notes payable and capital lease obligations 2,122,200 1,821,500 Less: current portion (825,500 ) (660,100 ) Notes payable and capital lease obligations, long-term, including debt discount $ 1,296,700 $ 1,161,400 In May 2016, the Company borrowed $200,000 in a short term financing arrangement. As an inducement to enter into the transaction the Company issued 500,000 warrants exercisable at $.50 per share for a period of four years. The warrants were valued at $97,200 and were recorded as additional interest. The short term debt was repaid in cash in June 2016 along with interest of $12,000. In connection with the issuance of convertible debt on September 30, 2016, the Company issued 50,000 warrants as an inducement to enter into the transaction. The warrants are exercisable for five years at $.85 per share and were valued at $4,900 using the Black Scholes valuation method and are being amortized over the term of the debt. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2016 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 10 – RELATED PARTY TRANSACTIONS Notes payable, related parties Related parties payable and accrued interest due to certain related parties as of September 30, 2016 and December 31, 2015 are as follows: 2016 2015 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 $ — $ 5,000 Accrued interest, unsecured note payable 11,800 26,800 Payable due officer for payment of IRS obligation (See Note 8 above) 34,600 — $ 46,400 $ 31,800 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 licensing revenues and sales of CoronaLux™ units of approximately $125,100 for the nine months ended September 30, 2016 and $890,500 for the year ended December 31, 2015, as such, royalties of $54,700 and $48,400 were due at September 30, 2016 and December 31, 2015, respectively. 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 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 and all acquired IP returned to Black Stone. In October 2014, PWS and Medical Waste Services, LLC ("MWS") formed a contractual joint venture to exploit the PWS medical waste destruction technology. In 2015, MWS licensed and installed a CoronaLux™ unit at an MWS facility, and subsequently received a limited permit to operate. Operations to date have included the destruction of medical waste. For the nine months ended September 30, 2016 PWS have recorded $15,700 in income which represents their 50% interest in the net income of the joint venture. In addition, for the nine months ended September 30, 2016, PWS billed the joint venture approximately $90,600 in costs incurred on behalf of the joint venture. 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. The determination of fair value shall occur by December 31, 2015. 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 as determined to 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 (December 31, 2015) 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 were considered contingently issuable shares and as such the 1,200,000 share not considered issued and outstanding at December 31, 2015. The 15% ownership interest in Sterall was considered contingently held until the conclusion of this transaction. As of December 31, 2015 an independent appraisal was not performed and the Amended Equity Agreement expired by its terms. The 1,200,000 shares subject to the original Equity Agreement and the Amended Equity Agreement became unrestricted in 2016 and are now considered issued and outstanding. The shares were valued at $720,000 and have been recorded as a long term other asset pending resolution of claims by the parties involved related to the Sterall licensing agreement from September 2013, Sterall equipment deposits of $330,000 from 2014 and the equity purchase agreement noted above. The ultimate resolution of the various claims by the parties and the ultimate disposition of the $720,000 are expected to be resolved no later than December 31, 2016. |
EQUITY TRANSACTIONS
EQUITY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2016 | |
Equity [Abstract] | |
EQUITY TRANSACTIONS | NOTE 11 – EQUITY TRANSACTIONS 2016 During the nine months ended September 30, 2016, the Company sold 600,000 shares of $.001 par value common stock at $.50 per share in a private placement, receiving proceeds of $300,000. During the nine months ended September 30, 2016 the Company (i) issued 100,000 shares of $.001 par value common stock in connection with the payment of a common stock subscription of $25,000. During the nine months ended September 30, 2016, the Company issued 250,000 shares of its $.001 par value common stock upon exercise of common stock warrants receiving proceeds of $125,000. During the nine months ended September 30, 2016, the Company treated as issued 1,200,000 shares of its $.001 par value common stock valued at $720,000 in connection with the Sterall transaction (see Note 10). During the nine months ended September 30, 2016, the Company issued 60,000 common stock options to employees exercisable at $.60 per share. In the third quarter of 2016, the Company issued $250,000 in convertible debt that is convertible into 357,142 shares of its $.001 par value common stock. In May 2016, the Company issued 500,000 warrants, in connection with a short term financing, exercisable at $.50 per share for a period of four years. On September 30, 2016, the Company issued 50,000 warrants, in connection with a convertible debt issuance, exercisable for five years at $.85 per share and were valued at $4,900 using the Black Scholes valuation method. 2015 During the nine months ended September 30, 2015, the Company issued 120,949 shares of $.001 par value common stock upon the cashless exercise of 200,000 warrants. 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. In the fourth quarter of 2015, the Company issued $1,250,000 in convertible debt that is convertible into 1,136,363 shares of its $.001 par value common stock. 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 | 9 Months Ended |
Sep. 30, 2016 | |
Risks and Uncertainties [Abstract] | |
CUSTOMER CONCENTRATIONS | NOTE 12 – CUSTOMER CONCENTRATIONS The Company had sales from operations to two customers for the three months ended September 30, 2016 and 2015 that represented approximately 38% and 49%, respectively of our total sales and sales from operations to one customer for the nine months ended September 30, 2016 that represented approximately 22% and sales from operations to two customers for the nine months ended September 30, 2015 that represented approximately 49%, 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. REGS, a wholly owned subsidiary, was notified that effective April 1, 2016 it would no longer be providing routine maintenance services to its largest customer but would still be eligible to provide other industrial cleaning services. The projected loss of revenue from this customer is estimated to be between $2.5 and $3 million annually. |
NET LOSS PER SHARE
NET LOSS PER SHARE | 9 Months Ended |
Sep. 30, 2016 | |
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: Nine months ended September 30, 2016 2015 Warrants 9,964,430 9,689,430 Options 990,000 1,974,950 Convertible notes payable, including accrued interest 1,493,505 909,091 Contingently issuable shares, Sterall LLC — 1,200,000 12,447,935 13,773,471 |
ENVIRONMENTAL MATTERS AND REGUL
ENVIRONMENTAL MATTERS AND REGULATION | 9 Months Ended |
Sep. 30, 2016 | |
Environmental Remediation Obligations [Abstract] | |
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 the 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. We believe we are in substantial compliance with all federal, state and local laws regulating our business. |
LITIGATION
LITIGATION | 9 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
LITIGATION | NOTE 15 – LITIGATION In March 2016, a complaint was filed by a lessor of property leased by REGS, a subsidiary of the Company. The month-to-month lease expired February 29, 2016, when REGS vacated the property. The landlord has made certain claims including property damage, and loss of rents, attorney fees and other costs totaling approximately $97,000. REGS has engaged defense counsel and intends to zealously oppose the claims. While the Company’s management believes the claims are without merit, the Company has accrued $48,400 as a loss against this claim. In January 2016, an employee of SEM was involved in a vehicle accident while on Company business. The accident resulted in one fatality and injuries to another party. The two parties filed lawsuits against SEM as a result of the accident and the claims were turned over to our insurance carrier. Defense counsel was provided for and appointed by the Company’s insurance carrier. In August 2016, both claimants each filed a claim with our insurance carrier for the full amount of our insurance coverage, approximately $6 million. Later in August 2016, an involuntary proceeding was commenced by one of the claimants against SEM under Chapter 7 of the Bankruptcy code by one claimant as a result of both claimants filing for the $6 million in insurance available under our policies. SEM engaged bankruptcy counsel who filed certain motions on behalf of SEM. In September, the case was converted to a Chapter 11 under the Bankruptcy code and the Bankruptcy court granted SEM’s motion and ordered that the $6 million in insurance proceeds under our policy would be an asset of the estate of SEM. In October 2016, the Company filed a plan of reorganization with the court that allows for an equitable split of the $6 million in insurance proceeds, as determined by the two claimants, and allows for all creditors of SEM, both secured and unsecured, to be paid in full if the two claimants can come to terms with an equitable allocation of the $6 million in insurance proceeds. At this time SEM continues to manage its affairs and is currently operating normally. The ultimate outcome of this Chapter 11 proceeding is uncertain at this time. Management does not currently believe that any assets of SEM are impaired as of September 30, 2016. Operations and production are continuing uninterupted. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | NOTE 16 - SEGMENT INFORMATION The Company currently has identified four segments as follows: REGS Industrial Cleaning Tactical Rail Car Cleaning MV and SEM Environmental Solutions PWS Solid Waste Reach has had minimal operations through June 30, 2016. 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 September 30, 2016 and 2015 is as follows: 2016 Industrial Railcar Environmental Solid Cleaning Cleaning Solutions Waste Corporate Total Revenue $ 416,000 $ 629,400 $ 1,749,100 $ 42,000 $ — $ 2,836,500 Depreciation and amortization (1) 81,800 10,000 42,700 31,500 24,800 190,800 Interest expense 7,600 300 5,300 — 42,800 56,000 Stock-based compensation — — — — 10,900 10,900 Net income (loss) (535,600 ) 34,200 217,000 (198,000 ) (391,400 ) (873,800 ) Capital expenditures (cash and 6,300 9,700 — 5,200 — 21,200 Total assets $ 1,118,400 $ 601,100 $ 2,349,300 $ 2,914,500 $ 1,083,100 $ 8,066,400 2015 Industrial Railcar Environmental Solid Cleaning Cleaning Solutions Waste Corporate Total Revenue $ 1,049,100 $ 842,100 $ 965,500 $ 111,500 $ — $ 2,968,200 Depreciation and amortization (1) 65,700 6,400 30,300 25,500 18,700 146,600 Interest expense 6,400 (5,100 ) — 300 3,900 5,500 Stock-based compensation — — — — 27,300 27,300 Net income (loss) (74,900 ) 172,600 (61,900 ) (234,000 ) (446,300 ) (644,500 ) Capital expenditures (cash and 10,500 15,500 11,400 60,100 — 97,500 Total assets $ 1,741,800 $ 635,700 $ 1,418,800 $ 3,766,400 $ 1,151,200 $ 8,713,900 ____________________ (1) Includes depreciation of property, equipment and leasehold improvement and amortization of intangibles. Segment information for the nine months ended September 30, 2016 and 2015 is as follows: 2016 Industrial Railcar Environmental Solid Cleaning Cleaning Solutions Waste Corporate Total Revenue $ 2,844,000 $ 2,433,900 $ 3,454,500 $ 170,100 $ — $ 8,902,500 Depreciation and amortization (1) 251,200 30,700 125,400 96,300 67,300 570,900 Interest expense 25,100 3,100 17,500 500 212,100 258,300 Stock-based compensation — — — — 83,400 83,400 Net income (loss) (517,000 ) 444,500 307,800 (501,400 ) (1,413,900 ) (1,679,800 ) Capital expenditures (cash and 129,400 22,900 12,900 12,100 — 177,300 Total assets $ 1,118,400 $ 601,100 $ 2,349,300 $ 2,914,500 $ 1,083,100 $ 8,066,400 2015 Industrial Railcar Environmental Solid Cleaning Cleaning Solutions Waste Corporate Total Revenue $ 4,198,300 $ 2,263,400 $ 2,796,000 $ 183,400 $ — $ 9,441,100 Depreciation and amortization (1) 197,100 19,200 91,000 76,400 56,100 439,800 Interest expense 29,000 5,100 500 300 10,100 45,000 Stock-based compensation — — — — 176,100 176,100 Net income (loss) 195,600 201,000 (78,800 ) (824,400 ) (1,610,600 ) (2,117,200 ) Capital expenditures (cash and 313,100 45,000 43,600 179,400 81,600 662,700 Total assets $ 1,741,800 $ 635,700 $ 1,418,800 $ 3,766,400 $ 1,151,200 $ 8,713,900 _____________________ (1) Includes depreciation of property, equipment and leasehold improvement and amortization of intangibles. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2016 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 17 - SUBSEQUENT EVENTS Management has evaluated the impact of events occurring after September 30, 2016 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 ACCOUN23
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
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 $49,100 and $80,900 for the three months ended September 30, 2016 and 2015, respectively and $149,100 and $279,700 for the nine months ended September 30, 2016 and 2015, respectively. |
Income Taxes | Income Taxes The Company accounts for income taxes pursuant to Accounting Standards Codification Income Taxes, 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 and nine months ended September 30, 2016 and 2015 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 September 30, 2016 and December 31, 2015. 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, 2015. The tax periods for the years ending December 31, 2008 through 2015 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. New Accounting Pronouncements Not Yet Adopted 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 was effective for annual reporting periods beginning on or after December 15, 2016, and interim periods within those annual periods. On July 9, 2015, the FASB approved a one year delay of the effective date. The Company will now adopt the new provisions of this accounting standard at the beginning of fiscal year 2018, unless it choose to early adopt in 2017. The Company will further study the implications of this statement in order to evaluate the expected impact on the consolidated financial statements. In July 2015, the FASB issued ASU 2015-11, “Simplifying the Measurement of Inventory.” Under this ASU, inventory will be measured at the “lower of cost and net realizable value” and options that currently exist for “market value” will be eliminated. The ASU defines net realizable value as the “estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation.” No other changes were made to the current guidance on inventory measurement. ASU 2015-11 is effective for interim and annual periods beginning after December 15, 2016. Early application is permitted and should be applied prospectively. Management is evaluating the provisions of this statement, including which period to adopt, and has not determined what impact the adoption of ASU 2015-11 will have on the Company’s financial position or results of operations. In November 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.2015-17, “Balance Sheet Classification of Deferred Taxes”. The new guidance eliminates the requirement to separate deferred income tax liabilities and assets into current and noncurrent amounts. The amendments will require that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The updated guidance will be effective for fiscal years beginning after December 15, 2016, including interim periods within those annual periods. Early adoption is permitted, and the amendments may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. The Company is in the process of evaluating this guidance. In January 2016, the FASB issued Accounting Standards Update No. 2016-01, Financial Instruments-Overall: Recognition and Measurement of Financial Assets and Financial Liabilities |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property plant and equipment | Property and equipment was comprised of the following: September 30, 2016 December 31, 2015 Field and shop equipment $ 2,319,400 $ 2,188,500 Vehicles 689,900 750,800 Waste destruction equipment, placed in service 1,288,700 1,276,600 Waste destruction equipment, not placed in service 1,521,100 1,521,100 Furniture and office equipment 322,800 321,400 Leasehold improvements 65,400 65,400 Building and improvements 21,200 18,600 Land 162,900 162,900 6,391,400 6,305,300 Less: accumulated depreciation and amortization (2,418,800 ) (1,974,000 ) Property and equipment, net $ 3,972,600 $ 4,331,300 |
Schedule of accumulated depreciation | Three Month Ended Nine months ended September September September September Cost of Goods Sold $ 141,400 $ 106,900 $ 430,100 $ 320,800 General & Administrative 24,200 19,600 72,500 58,900 Total Depreciation Expense $ 165,600 $ 126,500 $ 502,600 $ 379,700 |
Schedule of capital leased assets | Property and equipment included the following amounts for leases that have been capitalized at: September 30, December 31, 2016 2015 Vehicles, field and shop equipment $ 462,700 $ 462,700 Less: accumulated amortization (199,400 ) (127,800 ) $ 263,300 $ 334,900 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets | Intangible assets were comprised of the following: September 30, 2016 Gross carrying Accumulated Net carrying Goodwill $ 277,800 $ — $ 277,800 Customer list 42,500 (42,500 ) — Technology and Patents 1,064,600 (586,600 ) 478,000 Trade name 54,600 (54,600 ) — $ 1,439,500 $ (683,700 ) $ 755,800 December 31, 2015 Gross carrying Accumulated Net carrying Goodwill $ 277,800 $ — $ 277,800 Customer list 42,500 (42,500 ) — Technology and Patents 1,027,100 (518,300 ) 508,800 Trade name 54,600 (54,600 ) — $ 1,402,000 $ (615,400 ) $ 786,600 |
ACCRUED LIABILITIES (Tables)
ACCRUED LIABILITIES (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Payables and Accruals [Abstract] | |
Schedule of accrued liabilities | Accrued liabilities were comprised of the following: September 30, December 31, Accrued compensation and related taxes $ 641,800 $ 579,800 Accrued interest 37,100 58,800 Other 259,200 250,900 Total Accrued Liabilities $ 938,100 $ 889,500 |
UNCOMPLETED CONTRACTS (Tables)
UNCOMPLETED CONTRACTS (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Contractors [Abstract] | |
Schedule of uncompleted contracts | Costs, estimated earnings and billings on uncompleted contracts are as follows: September 30, December 31, 2016 2015 Revenue Recognized — $ 1,814,300 Less: Billings to date — (1,610,300 ) Costs and estimated earnings in excess of billings on — $ 204,000 Billings to date $ 2,430,100 $ 2,273,400 Revenue recognized (1,729,700 ) (1,685,500 ) Billings in excess of costs and estimated earnings on $ 700,400 $ 587,900 |
DEBT (Tables)
DEBT (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of debt | In August 2016, the note and all accrued interest was paid by an offset to trade accounts receivable from the note holder. September 30, December 31, June 2011 Note - In Default $ — $ 68,000 Convertible notes payable, interest at 8% per annum, $400,000 principal payment due December 31, 2016, remaining unpaid principal and interest due August 20, 2018 and September 29, 2019, convertible into common stock at the option of the lenders at a rate ranging from $.70 to $1.10 per share 1,500,000 1,250,000 Debt discount (see Note 13) (16,800 ) (16,600 ) Note payable dated October 13, 2015, interest at 8% per annum, payable in 24 monthly installments of principal and interest $4,523, due October 1, 2017. Secured by certain assets of SEM and guaranteed by SEER and MV 56,100 92,300 Note payable dated October 13, 2015, interest at 8% per annum, payable in 60 monthly installments of principal and interest $4,562, due October 1, 2020. Secured by real estate and other assets of SEM and guaranteed by SEER and MV 190,200 218,900 Note payable insurance premium financing, interest at 4.25% per annum, payable in 10 installments of $28,417, due November 1, 2016 56,500 — Short term note payable dated August 23, 2016 due October 23, 2016. Interest is $10,000 for the first two weeks and $1,000 per week thereafter. Note is secured by certain trade accounts receivables. (Note was paid in October 2016) 200,000 — Capital lease obligations, secured by certain assets, maturing through March 2019 136,200 208,900 Total notes payable and capital lease obligations 2,122,200 1,821,500 Less: current portion (825,500 ) (660,100 ) Notes payable and capital lease obligations, long-term, including debt discount $ 1,296,700 $ 1,161,400 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Related Party Transactions [Abstract] | |
Schedule of notes payable and accrued interest, related parties | Related parties payable and accrued interest due to certain related parties as of September 30, 2016 and December 31, 2015 are as follows: 2016 2015 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 $ — $ 5,000 Accrued interest, unsecured note payable 11,800 26,800 Payable due officer for payment of IRS obligation (See Note 8 above) 34,600 — $ 46,400 $ 31,800 |
NET LOSS PER SHARE (Tables)
NET LOSS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of potentially dilutive securities | Potentially dilutive securities were comprised of the following: Nine months ended September 30, 2016 2015 Warrants 9,964,430 9,689,430 Options 990,000 1,974,950 Convertible notes payable, including accrued interest 1,493,505 909,091 Contingently issuable shares, Sterall LLC — 1,200,000 12,447,935 13,773,471 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
Schedule of segment information | Segment information for the three months ended September 30, 2016 and 2015 is as follows: 2016 Industrial Railcar Environmental Solid Cleaning Cleaning Solutions Waste Corporate Total Revenue $ 416,000 $ 629,400 $ 1,749,100 $ 42,000 $ — $ 2,836,500 Depreciation and amortization (1) 81,800 10,000 42,700 31,500 24,800 190,800 Interest expense 7,600 300 5,300 — 42,800 56,000 Stock-based compensation — — — — 10,900 10,900 Net income (loss) (535,600 ) 34,200 217,000 (198,000 ) (391,400 ) (873,800 ) Capital expenditures (cash and 6,300 9,700 — 5,200 — 21,200 Total assets $ 1,118,400 $ 601,100 $ 2,349,300 $ 2,914,500 $ 1,083,100 $ 8,066,400 2015 Industrial Railcar Environmental Solid Cleaning Cleaning Solutions Waste Corporate Total Revenue $ 1,049,100 $ 842,100 $ 965,500 $ 111,500 $ — $ 2,968,200 Depreciation and amortization (1) 65,700 6,400 30,300 25,500 18,700 146,600 Interest expense 6,400 (5,100 ) — 300 3,900 5,500 Stock-based compensation — — — — 27,300 27,300 Net income (loss) (74,900 ) 172,600 (61,900 ) (234,000 ) (446,300 ) (644,500 ) Capital expenditures (cash and 10,500 15,500 11,400 60,100 — 97,500 Total assets $ 1,741,800 $ 635,700 $ 1,418,800 $ 3,766,400 $ 1,151,200 $ 8,713,900 ____________________ (1) Includes depreciation of property, equipment and leasehold improvement and amortization of intangibles. Segment information for the nine months ended September 30, 2016 and 2015 is as follows: 2016 Industrial Railcar Environmental Solid Cleaning Cleaning Solutions Waste Corporate Total Revenue $ 2,844,000 $ 2,433,900 $ 3,454,500 $ 170,100 $ — $ 8,902,500 Depreciation and amortization (1) 251,200 30,700 125,400 96,300 67,300 570,900 Interest expense 25,100 3,100 17,500 500 212,100 258,300 Stock-based compensation — — — — 83,400 83,400 Net income (loss) (517,000 ) 444,500 307,800 (501,400 ) (1,413,900 ) (1,679,800 ) Capital expenditures (cash and 129,400 22,900 12,900 12,100 — 177,300 Total assets $ 1,118,400 $ 601,100 $ 2,349,300 $ 2,914,500 $ 1,083,100 $ 8,066,400 2015 Industrial Railcar Environmental Solid Cleaning Cleaning Solutions Waste Corporate Total Revenue $ 4,198,300 $ 2,263,400 $ 2,796,000 $ 183,400 $ — $ 9,441,100 Depreciation and amortization (1) 197,100 19,200 91,000 76,400 56,100 439,800 Interest expense 29,000 5,100 500 300 10,100 45,000 Stock-based compensation — — — — 176,100 176,100 Net income (loss) 195,600 201,000 (78,800 ) (824,400 ) (1,610,600 ) (2,117,200 ) Capital expenditures (cash and 313,100 45,000 43,600 179,400 81,600 662,700 Total assets $ 1,741,800 $ 635,700 $ 1,418,800 $ 3,766,400 $ 1,151,200 $ 8,713,900 _____________________ (1) Includes depreciation of property, equipment and leasehold improvement and amortization of intangibles. |
ORGANIZATION AND FINANCIAL CO32
ORGANIZATION AND FINANCIAL CONDITION (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | ||
Accumulated deficit | $ (16,843,800) | $ (16,843,800) | $ (15,387,100) | [1] | |||
Net income (loss) before adjustment for losses attributable to non-controlling interest | (873,800) | $ (644,500) | (1,695,500) | $ (2,117,200) | (3,400,000) | $ (726,000) | |
Working capital deficit | $ 3,200,000 | 3,200,000 | $ 2,700,000 | ||||
Change in working capital | 500,000 | ||||||
Proceeds from sale of common stock and exercise of warrants | 425,000 | ||||||
Proceeds from warrant extensions | 29,900 | ||||||
Proceeds from convertible debt | $ 250,000 | $ 1,000,000 | |||||
Paragon Waste Solutions, LLC [Member] | |||||||
Percentage ownership | 54.00% | 54.00% | |||||
ReaCH4Biogas [Member] | |||||||
Percentage ownership | 85.00% | 85.00% | |||||
Resource Environmental Group Services [Member] | Sales Revenue [Member] | Lower Range [Member] | |||||||
Reduction in revenue | $ 2,500,000 | ||||||
Resource Environmental Group Services [Member] | Sales Revenue [Member] | Upper Range [Member] | |||||||
Reduction in revenue | $ 3,000,000 | ||||||
[1] | These numbers were derived from the audited financial statements for the year ended December 31, 2015. |
SUMMARY OF SIGNIFICANT ACCOUN33
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Accounting Policies [Abstract] | ||||
Research and development expenses | $ 49,100 | $ 80,900 | $ 149,100 | $ 279,700 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Property, Plant and Equipment [Line Items] | ||
Accumulated depreciation and amortization | $ 2,418,800 | $ 1,974,000 |
CoronaLux Units [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Accumulated depreciation and amortization | $ 271,700 | $ 149,500 |
PROPERTY AND EQUIPMENT (Detai35
PROPERTY AND EQUIPMENT (Details) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 6,391,400 | $ 6,305,300 | |
Less: accumulated depreciation and amortization | (2,418,800) | (1,974,000) | |
Property and equipment, net | 3,972,600 | 4,331,300 | [1] |
Field and Shop Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 2,319,400 | 2,188,500 | |
Vehicles [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 689,900 | 750,800 | |
Waste Destruction Equipment Placed In Service [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 1,288,700 | 1,276,600 | |
Waste Destruction Equipment, Not Placed In Service [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 1,521,100 | 1,521,100 | |
Furniture And Office Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 322,800 | 321,400 | |
Leasehold Improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 65,400 | 65,400 | |
Building and Improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 21,200 | 18,600 | |
Land [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 162,900 | $ 162,900 | |
[1] | These numbers were derived from the audited financial statements for the year ended December 31, 2015. |
PROPERTY AND EQUIPMENT (Detai36
PROPERTY AND EQUIPMENT (Details 1) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
StatementLineItemLineItems [Line Items] | ||||
Total Depreciation Expense | $ 165,600 | $ 126,500 | $ 502,600 | $ 379,700 |
Cost of Sales [Member] | ||||
StatementLineItemLineItems [Line Items] | ||||
Total Depreciation Expense | 141,400 | 106,900 | 430,100 | 320,800 |
Selling, general and administrative expense [Member] | ||||
StatementLineItemLineItems [Line Items] | ||||
Total Depreciation Expense | $ 24,200 | $ 19,600 | $ 72,500 | $ 58,900 |
PROPERTY AND EQUIPMENT (Detai37
PROPERTY AND EQUIPMENT (Details 2) - Vehicles, Field and Shop Equipment [Member] - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Property, Plant and Equipment [Line Items] | ||
Vehicles, field and shop equipment | $ 462,700 | $ 462,700 |
Less: accumulated amortization | (199,400) | (127,800) |
Capital lease, net | $ 263,300 | $ 334,900 |
INTANGIBLE ASSETS (Details Narr
INTANGIBLE ASSETS (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Amortization expense | $ 25,200 | $ 20,000 | $ 68,200 | $ 60,100 |
Lower Range [Member] | ||||
Estimated useful lives | 7 years | |||
Upper Range [Member] | ||||
Estimated useful lives | 10 years |
INTANGIBLE ASSETS (Details)
INTANGIBLE ASSETS (Details) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 | |
Finite-Lived Intangible Assets [Line Items] | |||
Gross carrying amount | $ 1,439,500 | $ 1,402,000 | |
Accumulated amortization | (683,700) | (615,400) | |
Net carrying value | 755,800 | 786,600 | [1] |
Goodwill [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross carrying amount | 277,800 | 277,800 | |
Net carrying value | 277,800 | 277,800 | |
Customer Lists [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross carrying amount | 42,500 | 42,500 | |
Accumulated amortization | (42,500) | (42,500) | |
Technology and Patents [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross carrying amount | 1,064,600 | 1,027,100 | |
Accumulated amortization | (586,600) | (518,300) | |
Net carrying value | 478,000 | 508,800 | |
Trade Name [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross carrying amount | 54,600 | 54,600 | |
Accumulated amortization | $ (54,600) | $ (54,600) | |
[1] | These numbers were derived from the audited financial statements for the year ended December 31, 2015. |
ACCRUED LIABILITIES (Details)
ACCRUED LIABILITIES (Details) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Payables and Accruals [Abstract] | ||
Accrued compensation and related taxes | $ 641,800 | $ 579,800 |
Accrued interest | 37,100 | 58,800 |
Other | 259,200 | 250,900 |
Total Accrued Liabilities | $ 938,100 | $ 889,500 |
UNCOMPLETED CONTRACTS (Details)
UNCOMPLETED CONTRACTS (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | ||
Revenue Recognized | $ (1,729,700) | $ (1,685,500) | |
Less: Billings to date | 2,430,100 | 2,273,400 | |
Costs and estimated earnings in excess of billings on uncompleted contracts | [1] | 204,000 | |
Billings in excess of costs and estimated earnings on uncompleted contracts | $ 700,400 | 587,900 | |
Contracts Receivable [Member] | |||
Revenue Recognized | 1,814,300 | ||
Less: Billings to date | $ 1,610,300 | ||
[1] | These numbers were derived from the audited financial statements for the year ended December 31, 2015. |
INVESTMENT IN PARAGON WASTE S42
INVESTMENT IN PARAGON WASTE SOLUTIONS LLC (Details Narrative) - USD ($) | Nov. 17, 2014 | Jun. 10, 2014 | Mar. 04, 2014 | Feb. 22, 2014 | Feb. 28, 2015 | Sep. 30, 2013 | Jun. 30, 2012 | Mar. 31, 2012 | Aug. 31, 2011 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2010 | Sep. 30, 2016 | |
Business Acquisition [Line Items] | ||||||||||||||||||
License initiation fee | $ 42,000 | $ 111,500 | $ 170,100 | $ 183,400 | ||||||||||||||
Customer deposits | 330,000 | 330,000 | $ 330,000 | [1] | $ 330,000 | |||||||||||||
Exclusive Use License and Joint Operations Agreement with Sterall Inc [Member] | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
License initiation fee | $ 300,000 | |||||||||||||||||
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 | |||||||||||||||||
Maximum payment of placement fee per unit | 207,000 | |||||||||||||||||
Minimum payment of placement fee per unit | $ 168,000 | |||||||||||||||||
Non-refundable placement fees received | $ 236,250 | |||||||||||||||||
Customer deposits | $ 330,000 | 330,000 | $ 330,000 | |||||||||||||||
Exclusive Use License and Equipment Lease Agreement with eCycling International [Member] | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
License initiation fee | $ 176,875 | |||||||||||||||||
Percentage of net operating profits to be distributed | 50.00% | |||||||||||||||||
Licensing fees paid | $ 176,875 | |||||||||||||||||
Exclusive Use License and Equipment Lease Agreement with Medical Waste Services, LLC [Member] | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
License initiation fee | $ 225,000 | |||||||||||||||||
Percentage of net operating profits to be distributed | 50.00% | |||||||||||||||||
Formation of Joint Venture Agreement [Member] | Ordinary A Voting Shares [Member] | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Membership units issued | 100 | |||||||||||||||||
Formation of Joint Venture Agreement [Member] | Ordinary B Non-Voting Shares [Member] | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Membership units issued | 300,000 | |||||||||||||||||
Related Parties [Member] | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Percentage ownership | 5.00% | 5.00% | 5.00% | |||||||||||||||
Irrevocable License & Royalty Agreement with PWS [Member] | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
License initiation fee | $ 125,100 | 890,100 | ||||||||||||||||
Royalty on revenue | $ 54,700 | $ 48,400 | ||||||||||||||||
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% | 54.00% | |||||||||||||||
Payment for funding of subsidiary | $ 5,500,000 | |||||||||||||||||
Paragon Waste Solutions, LLC [Member] | Irrevocable License & Royalty Agreement [Member] | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Percentage of royalty revenue | 5.00% | |||||||||||||||||
Black Stone Management Services [Member] | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Membership units acquired | 400,000 | |||||||||||||||||
Percentage ownership | 36.00% | 36.00% | 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 | |||||||||||||||||
Black Stone Management Services [Member] | Waste Destruction Technology [Member] | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Useful life | 10 years | |||||||||||||||||
Daniel McAteer & Associates ("DMA") [Member] | Formation of Joint Venture Agreement [Member] | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Percentage ownership | 50.00% | |||||||||||||||||
License initiation fee | $ 350,000 | |||||||||||||||||
Paragon Waste (UK) Ltd [Member] | Formation of Joint Venture Agreement [Member] | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Membership units issued | 300,100 | |||||||||||||||||
Paragon Waste (UK) Ltd [Member] | Formation of Joint Venture Agreement [Member] | Ordinary A Voting Shares [Member] | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Membership units issued | 50 | |||||||||||||||||
Xinhua Energy Environmental Technology [Member] | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Sale of waste destruction unit | $ 430,500 | |||||||||||||||||
Second phase royalty fees payment | $ 350,000 | |||||||||||||||||
Percentage of net operating profits to be distributed | 50.00% | |||||||||||||||||
[1] | These numbers were derived from the audited financial statements for the year ended December 31, 2015. |
PAYROLL TAXES PAYABLE (Details
PAYROLL TAXES PAYABLE (Details Narrative) - USD ($) | 9 Months Ended | 13 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2012 | Sep. 30, 2011 | May 31, 2013 | Dec. 31, 2015 | |
Payroll tax reduction of oustanding liability with IRS | $ 34,600 | ||||
IRS [Member] | |||||
Past due payroll taxes | $ 987,600 | $ 971,000 | $ 970,500 | ||
Monthly installment payments, payroll taxes | $ 25,000 | $ 12,500 | $ 25,000 | ||
Description of personal income tax refunds | For the tax periods 2009 through 2014, one of the officers of REGS has had personal income tax refunds totaling $34,262 seized by the IRS and applied to REGS IRS obligation. |
DEBT (Details Narrative)
DEBT (Details Narrative) - USD ($) | 1 Months Ended | 9 Months Ended |
May 31, 2016 | Sep. 30, 2016 | |
Debt Instrument [Line Items] | ||
Debt conversion, price | $ 0.50 | |
Warrants issued | $ 4,900 | |
Warrant terms | 4 years | 5 years |
Warrants issued, shares | 50,000 | |
Exercise price (in dollars per share) | $ 0.85 | |
Notes Payable, June 2011 Note [Member] | ||
Debt Instrument [Line Items] | ||
Debt, face amount | $ 40,000 | |
Debt, issue date | Jun. 1, 2011 | |
Debt, interest rate | 10.00% | |
Debt warrant, shares | 13,000 | |
Debt discount at issuance | $ 170 | |
Exercise price (in dollars per share) | $ 1 | |
Notes Payable, June 2011 2nd Note [Member] | ||
Debt Instrument [Line Items] | ||
Debt, face amount | $ 25,000 | |
Debt, accrued interest amount | $ 3,000 | |
Debt, issue date | Jun. 1, 2011 | |
Notes Payable, June 2011 Note [Member] | ||
Debt Instrument [Line Items] | ||
Debt, face amount | $ 68,000 | |
Notes Payable, June 2016 [Member] | ||
Debt Instrument [Line Items] | ||
Debt, face amount | $ 200,000 | |
Debt, accrued interest amount | 12,000 | |
Warrants issued | $ 97,200 | |
Warrant terms | 4 years | |
Warrants issued, shares | 500,000 | |
Exercise price (in dollars per share) | $ 0.50 |
DEBT (Details)
DEBT (Details) | 9 Months Ended | ||||
Sep. 30, 2016USD ($)Number$ / shares | Sep. 30, 2015USD ($) | May 31, 2016$ / shares | Dec. 31, 2015USD ($) | ||
Debt Instrument [Line Items] | |||||
Notes and capital lease obligation, total | $ 2,122,200 | $ 1,821,500 | |||
Notes and capital lease obligation, current | (825,500) | (660,100) | [1] | ||
Notes and capital lease obligation, long-term | 1,296,700 | 1,161,400 | [1] | ||
Debt conversion, price | $ / shares | $ 0.50 | ||||
Short term note payable due October 23, 2016 [Member] | |||||
Debt Instrument [Line Items] | |||||
Long term debt, carrying amount | $ 200,000 | ||||
Description pf debt instrument interest payment | Interest is $10,000 for the first two weeks and $1,000 per week thereafter. | ||||
Debt, maturity date | Oct. 23, 2016 | ||||
Description of the collateral | Note is secured by certain trade accounts receivables | ||||
Notes Payable, June 2011 Note [Member] | |||||
Debt Instrument [Line Items] | |||||
Long term debt, carrying amount | 68,000 | ||||
Convertible Secured Promissory Note due December 31, 2016 [Member] | |||||
Debt Instrument [Line Items] | |||||
Long term debt, carrying amount | $ 1,500,000 | 1,250,000 | |||
Interest rate | 8.00% | ||||
Payment amount | $ 400,000 | ||||
Debt, maturity date | Dec. 31, 2016 | ||||
Debt discount | $ (16,800) | (16,600) | |||
Convertible Secured Promissory Note due December 31, 2016 [Member] | Upper Range [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt conversion, price | $ / shares | $ 1.10 | ||||
Convertible Secured Promissory Note due December 31, 2016 [Member] | Lower Range [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt conversion, price | $ / shares | $ .70 | ||||
8% Secured Notes Payable Due October 1, 2017 [Member] | |||||
Debt Instrument [Line Items] | |||||
Long term debt, carrying amount | $ 56,100 | 92,300 | |||
Interest rate | 8.00% | ||||
Payment amount | $ 4,523 | ||||
Number of payments | Number | 24 | ||||
Debt, maturity date | Oct. 1, 2017 | ||||
Description of the collateral | Secured by certain assets of SEM and guaranteed by SEER and MV | ||||
8% Secured Notes Payable Due October 1, 2020 [Member] | |||||
Debt Instrument [Line Items] | |||||
Long term debt, carrying amount | $ 190,200 | 218,900 | |||
Interest rate | 8.00% | ||||
Payment amount | $ 4,562 | ||||
Number of payments | Number | 60 | ||||
Debt, maturity date | Oct. 1, 2020 | ||||
Description of the collateral | Secured by real estate and other assets of SEM and guaranteed by SEER and MV | ||||
4.25% Note Payable Insurance Premium Financing due November 1, 2016 [Member] | |||||
Debt Instrument [Line Items] | |||||
Long term debt, carrying amount | $ 56,500 | ||||
Interest rate | 4.25% | ||||
Payment amount | $ 28,417 | ||||
Number of payments | Number | 10 | ||||
Debt, maturity date | Nov. 1, 2016 | ||||
Capital lease obligations [Member] | |||||
Debt Instrument [Line Items] | |||||
Capital lease obligation, carrying amount | $ 136,200 | $ 208,900 | |||
[1] | These numbers were derived from the audited financial statements for the year ended December 31, 2015. |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 1 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2014 | Aug. 30, 2014 | Mar. 31, 2012 | Sep. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2010 | ||
Related Party Transaction [Line Items] | |||||||
Common stock, issued | 54,525,079 | 52,375,079 | [1] | ||||
Common stock, outstanding | 54,525,079 | 52,375,079 | [1] | ||||
Long term other asset | $ 25,600 | $ 37,500 | [1] | ||||
Income from joint venture | $ 15,700 | ||||||
Paragon Waste Solutions, LLC [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Membership interests acquired | 600,000 | ||||||
Percentage ownership | 54.00% | ||||||
Income from joint venture | $ 15,700 | ||||||
Percentage of net income in joint venture | 50.00% | ||||||
Cost incurred for joint venture | $ 90,600 | ||||||
Paragon Waste Solutions, LLC [Member] | Irrevocable License & Royalty Agreement [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Percentage of royalty revenue | 5.00% | ||||||
Irrevocable License & Royalty Agreement with PWS [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Revenue from customer | 125,100 | 890,500 | |||||
Royalty on revenue | $ 54,700 | $ 48,400 | |||||
New Technologies Agreement with Black Stone [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
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] | |||||||
Related Party Transaction [Line Items] | |||||||
Issuance of common stock for investment in unconsolidated subsidaiary | $ 1,212,000 | ||||||
Membership interests acquired | 22.5 | ||||||
Number of shares issued for investment in unconsolidated affiliate | 1,200,000 | ||||||
Common stock, fair value (in dollars per shares) | $ 0.83333 | ||||||
Percentage ownership | 15.00% | ||||||
Common stock, issued | 1,200,000 | ||||||
Common stock, outstanding | 1,200,000 | ||||||
Long term other asset | $ 720,000 | ||||||
Sterall equipment deposits | $ 330,000 | ||||||
[1] | These numbers were derived from the audited financial statements for the year ended December 31, 2015. |
RELATED PARTY TRANSACTIONS (D47
RELATED PARTY TRANSACTIONS (Details) - USD ($) | 9 Months Ended | ||
Sep. 30, 2016 | Dec. 31, 2015 | ||
Related Party Transaction [Line Items] | |||
Accrued interest, unsecured note payable | $ 11,800 | $ 26,800 | |
Payable due officer for payment of IRS obligation | 34,600 | ||
Notes payable - related parties, including accrued interest | $ 46,400 | 31,800 | [1] |
Chief Executive Officer [Member] | Promissory Note [Member] | |||
Related Party Transaction [Line Items] | |||
Notes Payable | $ 5,000 | ||
Interest rate | 8.00% | ||
Debt, maturity date | Jun. 1, 2016 | ||
[1] | These numbers were derived from the audited financial statements for the year ended December 31, 2015. |
EQUITY TRANSACTIONS (Details Na
EQUITY TRANSACTIONS (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
May 31, 2016 | Jan. 31, 2015 | Sep. 30, 2016 | Dec. 31, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Common stock shares issued upon warrant exercises, shares | 500,000 | 1,136,363 | ||||
Proceeds from warrant exercises | $ 1,250,000 | $ 25,000 | ||||
Number of stock options issued | 60,000 | 60,000 | ||||
Exercise price (in dollars per shares) | $ .60 | $ .60 | ||||
Per share value of convertible debt conversion | $ 0.50 | |||||
Value of convertible debt convesion | $ 250,000 | |||||
Number of convertible debt convesion | 357,142 | |||||
Warrants issued | $ 4,900 | |||||
Warrant terms | 4 years | 5 years | ||||
Warrants issued, shares | 50,000 | |||||
Exercise price (in dollars per share) | $ 0.85 | $ 0.85 | ||||
Equity Agreement With Third Party [Member] | ||||||
Number of shares issued | 1,200,000 | |||||
Value of shares issued | $ 720,000 | |||||
Common Stock Subscribed [Member] | ||||||
Number of shares issued | 100,000 | |||||
Payment for common stock subscription | $ 25,000 | |||||
Paragon Waste Solutions, LLC [Member] | ||||||
Noncontrolling interest | 46.00% | 46.00% | ||||
Convertible Secured Promissory Note due December 31, 2014 [Member] | ||||||
Promissory note and accrued interest converted to stock | $ 257,400 | |||||
Shares converted | 514,750 | |||||
Warrants [Member] | ||||||
Common stock shares issued upon warrant exercises, shares | 250,000 | |||||
Proceeds from warrant exercises | $ 125,000 | |||||
Shares issued in warrant exercise | 120,949 | |||||
Number of warrants exercised | 200,000 | |||||
2016 Private Placement [Member] | ||||||
Private placement, shares issued | 600,000 | 600,000 | ||||
Share price (in dollars per share) | $ 0.50 | $ 0.50 | ||||
Gross proceeds from private placement | $ 300,000 |
CUSTOMER CONCENTRATIONS (Detail
CUSTOMER CONCENTRATIONS (Details Narrative) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016Number | Sep. 30, 2015Number | Sep. 30, 2016USD ($)Number | Sep. 30, 2015Number | |
Sales [Member] | ||||
Concentration Risk [Line Items] | ||||
Number of customers | Number | 2 | 2 | 1 | 2 |
Concentration risk | 38.00% | 49.00% | 22.00% | 49.00% |
Sales Revenue [Member] | Resource Environmental Group Services [Member] | Lower Range [Member] | ||||
Concentration Risk [Line Items] | ||||
Reduction in revenue | $ 2,500,000 | |||
Sales Revenue [Member] | Resource Environmental Group Services [Member] | Upper Range [Member] | ||||
Concentration Risk [Line Items] | ||||
Reduction in revenue | $ 3,000,000 |
NET LOSS PER SHARE (Details)
NET LOSS PER SHARE (Details) - shares | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive securities | 12,447,935 | 13,773,471 |
Warrants [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive securities | 9,964,430 | 9,689,430 |
Options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive securities | 990,000 | 1,974,950 |
Convertible Notes Payable [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive securities | 1,493,505 | 909,091 |
Contingently Issuable Shares Sterall LLC [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive securities | 1,200,000 |
LITIGATION (Details Narrative)
LITIGATION (Details Narrative) - USD ($) | 1 Months Ended | |
Mar. 31, 2016 | Jan. 31, 2016 | |
Litigation Case - Property Leased [Member] | ||
Loss Contingencies [Line Items] | ||
Lease expiration date | Feb. 29, 2016 | |
Damages sought value | $ 97,000 | |
Damage paid | $ 48,400 | |
Description of allegation | Certain claims including property damage, and loss of rents, attorney fees and other costs | |
Name of plaintiff | Landlord | |
Name of defendant | REGS, a subsidiary of the Company | |
Litigation Case - Vehicle Accident [Member] | ||
Loss Contingencies [Line Items] | ||
Damages sought value | $ 6,000,000 | |
Description of allegation | The accident resulted in one fatality and injuries to another party. The two parties filed lawsuits against SEM as a result of the accident and the claims were turned over to our insurance carrier. | |
Name of plaintiff | Two Parties |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | ||
Segment Reporting Information [Line Items] | |||||
Revenue | $ 2,836,500 | $ 2,968,200 | $ 8,902,500 | $ 9,441,100 | |
Depreciation and amortization | [1] | 190,800 | 146,600 | 570,900 | 439,900 |
Interest expense | 56,000 | 5,500 | 258,300 | 45,000 | |
Stock-based compensation | 10,900 | 27,300 | 83,400 | 176,100 | |
Net income (loss) | (873,800) | (644,500) | (1,679,800) | (2,117,200) | |
Capital expenditures (cash and noncash) | 21,200 | 97,500 | 177,300 | 662,700 | |
Total assets | 8,066,400 | 8,713,900 | 8,066,400 | 8,713,900 | |
Industrial Cleaning [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 416,000 | 1,049,100 | 2,844,000 | 4,198,300 | |
Depreciation and amortization | [1] | 81,800 | 65,700 | 251,200 | 197,100 |
Interest expense | 7,600 | 6,400 | 25,100 | 29,000 | |
Net income (loss) | (535,600) | (74,900) | (517,000) | 195,600 | |
Capital expenditures (cash and noncash) | 6,300 | 10,500 | 313,100 | ||
Total assets | 1,118,400 | 1,741,800 | 1,118,400 | 1,741,800 | |
Railcar Cleaning [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 629,400 | 842,100 | 2,433,900 | 2,263,400 | |
Depreciation and amortization | [1] | 10,000 | 6,400 | 30,700 | 19,200 |
Interest expense | 300 | (5,100) | 3,100 | 5,100 | |
Net income (loss) | 34,200 | 172,600 | 444,500 | 201,000 | |
Capital expenditures (cash and noncash) | 9,700 | 15,500 | 22,900 | 45,000 | |
Total assets | 601,100 | 635,700 | 601,100 | 635,700 | |
Environmental Solutions [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 1,749,100 | 965,500 | 3,454,500 | 2,796,000 | |
Depreciation and amortization | [1] | 42,700 | 30,300 | 125,400 | 91,000 |
Interest expense | 5,300 | 17,500 | 500 | ||
Net income (loss) | 217,000 | (61,900) | 307,800 | (78,800) | |
Capital expenditures (cash and noncash) | 11,400 | 12,900 | 43,600 | ||
Total assets | 2,349,300 | 1,418,800 | 2,349,300 | 1,418,800 | |
Solid Waste [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 42,000 | 111,500 | 170,100 | 183,400 | |
Depreciation and amortization | [1] | 31,500 | 25,500 | 96,300 | 76,400 |
Interest expense | 300 | 500 | 300 | ||
Net income (loss) | (198,000) | (234,000) | (501,400) | (824,400) | |
Capital expenditures (cash and noncash) | 5,200 | 60,100 | 12,100 | 179,400 | |
Total assets | 2,914,500 | 3,766,400 | 2,914,500 | 3,766,400 | |
Corporate [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Depreciation and amortization | [1] | 24,800 | 18,700 | 67,300 | 56,100 |
Interest expense | 42,900 | 3,900 | 212,100 | 10,100 | |
Stock-based compensation | 10,900 | 27,300 | 83,400 | 176,100 | |
Net income (loss) | (391,400) | (446,300) | (1,413,900) | (1,610,600) | |
Capital expenditures (cash and noncash) | 81,600 | ||||
Total assets | $ 1,083,100 | $ 1,151,200 | $ 1,083,100 | $ 1,151,200 | |
[1] | Includes depreciation of property, equipment and leasehold improvement and amortization of intangibles. |