Cover
Cover | 6 Months Ended |
Jun. 30, 2021 | |
Cover [Abstract] | |
Entity Registrant Name | Midwest Energy Emissions Corp. |
Entity Central Index Key | 0000728385 |
Document Type | S-1 |
Amendment Flag | false |
Entity Small Business | true |
Entity Emerging Growth Company | false |
Entity Filer Category | Non-accelerated Filer |
Entity Incorporation State Country Code | DE |
Entity Tax Identification Number | 87-0398271 |
Entity Address Address Line 1 | 1810 Jester Drive |
Entity Address City Or Town | Corsicana |
Entity Address State Or Province | TX |
Entity Address Postal Zip Code | 75109 |
City Area Code | 614 |
Local Phone Number | 505-6115 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Current assets | |||
Cash | $ 1,689,352 | $ 591,019 | $ 1,499,287 |
Accounts receivable | 1,112,184 | 1,116,082 | 1,222,874 |
Inventory | 543,743 | 560,127 | 513,498 |
Prepaid expenses and other assets | 487,700 | 107,443 | 316,199 |
Total current assets | 3,832,979 | 2,374,671 | 3,551,858 |
Security deposits | 10,175 | 0 | |
Property and equipment, net | 1,842,653 | 1,887,029 | 2,082,343 |
Right of use asset | 595,471 | 795,869 | 1,106,575 |
Intellectual property, net | 2,216,496 | 2,318,796 | 2,532,462 |
Total assets | 8,497,774 | 7,376,365 | 9,273,238 |
Current liabilities | |||
Accounts payable and accrued expenses (related party of $206,250 and $168,750) | 2,253,088 | 1,611,956 | 1,676,757 |
Current portion of equipment notes payable | 13,845 | 29,255 | 53,304 |
Current portion of operating lease liability | 409,201 | 407,975 | 383,307 |
Note payable | 24,501 | 34,661 | 0 |
Accrued interest | 2,118 | 259,230 | 226,065 |
Customer credits | 167,000 | 167,000 | 167,000 |
Accrued salaries | 747,270 | 848,706 | 357,095 |
Total current liabilities | 3,617,023 | 3,358,783 | 3,853,528 |
Equipment notes payable, less current portion | 0 | 789 | 22,386 |
Operating leases liability | 191,965 | 394,625 | 807,409 |
Note payables | 274,879 | 299,300 | 0 |
Convertible notes payable, net of discount and issuance costs | 20,000 | 4,055,122 | 2,951,137 |
Profit share liability - related party | 2,555,133 | 2,305,308 | 2,328,845 |
Secured note payable - related party | 271,686 | 271,686 | 271,686 |
Unsecured note payable, net of discount and issuance costs - related party | 10,874,645 | 9,894,284 | 7,911,898 |
Total liabilities | 17,805,331 | 20,579,897 | 18,146,889 |
COMMITMENTS AND CONTINGENCIES (Note 11) | 0 | 0 | 0 |
Stockholders' deficit | |||
Preferred stock, $0.001 par value: 2,000,000 shares authorized | 0 | 0 | 0 |
Common stock; $0.001 par value; 150,000,000 shares authorized; 89,245,951 and 78,096,326 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively | 89,246 | 78,096 | 76,748 |
Additional paid-in capital | 56,234,920 | 50,202,478 | 48,708,085 |
Accumulated deficit | (65,631,723) | (63,484,106) | (57,658,484) |
Total stockholders' deficit | (9,307,557) | (13,203,532) | (8,873,651) |
Total stockholders' deficit | (9,307,557) | (13,203,532) | (8,873,651) |
Total liabilities and stockholders' deficit | $ 8,497,774 | $ 7,376,365 | $ 9,273,238 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
CONDENSED CONSOLIDATED BALANCE SHEETS | |||
Accounts payable and accrued expenses related party | $ 206,250 | $ 168,750 | $ 43,750 |
Stockholders' deficit | |||
Preferred stock, par value | $ 0.001 | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 2,000,000 | 2,000,000 | 2,000,000 |
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 150,000,000 | 150,000,000 | 150,000,000 |
Common stock, shares issued | 89,245,951 | 78,096,326 | 76,747,750 |
Common stock, shares outstanding | 89,245,951 | 78,096,326 | 76,747,750 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) | ||||||
Revenues | $ 2,270,696 | $ 1,883,502 | $ 5,297,334 | $ 3,000,178 | $ 8,158,448 | $ 11,417,027 |
Costs and expenses: | ||||||
Cost of sales | 1,489,833 | 1,385,849 | 2,980,566 | 2,316,383 | 5,440,395 | 8,335,436 |
Selling, general and administrative expenses (related party of $75,373, $62,500, $175,373, and $125,000) | 1,260,411 | 1,133,470 | 2,713,636 | 2,305,445 | 5,935,517 | 6,428,580 |
Interest expense & letter of credit fees (related party of $497,660, $503,190, $1,000,851, and $1,006,015) | 1,120,086 | 650,359 | 1,795,706 | 1,314,747 | 2,657,554 | 2,391,395 |
Gain on extinguishment of debt | 0 | 0 | (299,300) | 0 | ||
(Gain) loss on change in fair value of profit share | 128,771 | (376,040) | 249,825 | (252,390) | (23,537) | 374,462 |
Gain on sale of equipment | 0 | (5,919) | 0 | (5,919) | (35,859) | (29,560) |
Total costs and expenses | 3,999,101 | 2,787,719 | 7,440,433 | 5,678,266 | 13,974,070 | 17,500,313 |
Loss before provision for income taxes | (1,728,405) | (904,217) | (2,143,099) | (2,678,088) | (5,815,622) | (6,083,286) |
Provision for income taxes | (1,278) | 0 | (4,518) | 0 | 10,000 | 14,000 |
Net loss | $ (1,729,683) | $ (904,217) | $ (2,147,617) | $ (2,678,088) | $ (5,825,622) | $ (6,097,286) |
Net loss per common share-basic and diluted: | $ (0.02) | $ (0.01) | $ (0.03) | $ (0.03) | $ (0.07) | $ (0.08) |
Weighted average common shares outstanding - basic and diluted | 84,190,073 | 77,747,750 | 82,320,840 | 77,742,225 | 77,818,780 | 76,534,957 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities | ||||
Net loss | $ (2,147,617) | $ (2,678,088) | $ (5,825,622) | $ (6,097,286) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||
Stock-based compensation - amortization of prepaid services | 249,963 | 249,749 | ||
Stock-based compensation | 5,945 | 0 | 1,710,226 | 1,810,267 |
Amortization of discount of notes payable | 1,314,760 | 981,462 | 1,974,080 | 1,752,639 |
Amortization of debt issuance costs | 60,478 | 60,812 | 122,291 | 101,852 |
Amortization of right to use assets | 200,398 | 192,686 | 310,706 | 378,261 |
Amortization of customer acquisition costs | 0 | 34,467 | ||
Amortization of patent rights | 102,300 | 111,366 | 213,666 | 201,200 |
Depreciation expense | 44,379 | 122,604 | 188,675 | 314,908 |
Gain on sale of equipment | 0 | (5,919) | (35,859) | (29,560) |
Gain on forgiveness of debt | (299,300) | 0 | ||
(Gain) Loss on change in fair value of profit share | 249,825 | (252,390) | (23,537) | 374,462 |
Changes in operating assets and liabilities | ||||
Decrease in accounts receivable | 3,898 | 288,826 | 106,792 | 419,252 |
Decrease in inventory | 16,383 | 52,100 | (46,629) | (4,082) |
Decrease in prepaid expenses and other assets | 1,775 | 13,862 | (5,730) | 34,915 |
Decrease in security deposits | 2,080 | 0 | ||
(Decrease) Increase in accounts payable and accrued liabilities | 897,922 | (267,820) | (64,802) | (426,638) |
Increase (Decrease) in accrued salaries | 491,610 | (198,782) | ||
Increase in accrued interest | 33,164 | 129,163 | ||
Decrease in operating lease liability | (201,434) | (194,749) | (388,116) | (371,986) |
Net cash provided by (used in) operating activities | 501,755 | (1,325,499) | (1,239,085) | (1,576,948) |
Cash flows from investing activities | ||||
Cash received from sale of equipment | 0 | 9,500 | 42,500 | 30,000 |
Net cash provided by investing activities | 0 | 9,500 | 42,500 | 30,000 |
Cash flows from financing activities | ||||
Payments of notes payable | (34,661) | (64,691) | (165,339) | 0 |
Payments of equipment notes payable | (16,199) | (22,559) | (45,646) | (91,960) |
Proceeds from exercise of warrants | 246,808 | 0 | ||
Proceeds from exercise of stock options | 101,250 | 0 | ||
Proceeds from the issuance of notes payable | 299,380 | 499,300 | 499,300 | 0 |
Payments on secured promissory note | 0 | (46,682) | ||
Proceeds from the issuance of convertible promissory notes and related warrants | 0 | 2,600,000 | ||
Net cash provided by financing activities | 596,578 | 412,050 | 288,315 | 2,461,358 |
Net increase (decrease) in cash and cash equivalents | 1,098,333 | (903,949) | (908,268) | 914,410 |
Cash and cash equivalents - beginning of period | 591,019 | 1,499,287 | 1,499,287 | 584,877 |
Cash and cash equivalents - end of period | 1,689,352 | 595,338 | 591,019 | 1,499,287 |
SUPPLEMENTAL CASH FLOW INFORMATION: | ||||
Interest | 41,082 | 228,458 | 534,960 | 0 |
Taxes | 4,518 | 0 | 0 | 14,000 |
SUPPLEMENTAL DISCLOSURE OF NON-CASH TRANSACTIONS | ||||
Cumulative effect on accumulated deficit of lease accounting change | 0 | 77,866 | ||
Discount on convertible promissory notes payable | 0 | 485,640 | ||
Net adjustment for extension of lease | 0 | 145,267 | ||
Stock Issued for consulting services | 102,000 | 0 | ||
Stock issued for prepaid services | 644,250 | 200,000 | 200,000 | 0 |
Stock warrants issued for prepaid services | 0 | 243,294 | ||
Stock options issued for prepaid services | 0 | 18,723 | ||
Stock issued for conversion of convertible notes | 4,430,000 | 0 | ||
Stock issued for interest payable | $ 615,339 | $ 0 | ||
Capital contribution | $ 0 | $ (3,412,204) |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS DEFICIT - USD ($) | Total | Common Stock | Additional Paid-In Capital | Retained Earnings (Accumulated Deficit) |
Balance, shares at Dec. 31, 2018 | 76,246,113 | |||
Balance, amount at Dec. 31, 2018 | $ (8,621,096) | $ 76,246 | $ 42,785,990 | $ (51,483,332) |
Cumulative effect of change in accounting principle related to accounting for leases | (77,866) | 0 | 0 | (77,866) |
Issuance of warrants, recorded as discount on convertible notes payable | 485,640 | 485,640 | ||
Issuance of stock options | 898,207 | 0 | 898,207 | 0 |
Extension of certain stock option expiration | 745,989 | $ 0 | 745,989 | 0 |
Stock issued per resignation agreements, shares | 464,517 | |||
Stock issued per resignation agreements, amount | 118,540 | $ 465 | 118,075 | 0 |
Stock issued upon cashless warrant exercise, shares | 37,120 | |||
Stock issued upon cashless warrant exercise, amount | 0 | $ 37 | (37) | 0 |
Stock warrants issued for prepaid services | 243,294 | 0 | 243,294 | 0 |
Stock options issued for prepaid services | 18,723 | 0 | 18,723 | 0 |
Capital contribution related to debt restructuring Note 8 | 3,412,204 | 0 | 3,412,204 | 0 |
Net loss | $ (6,097,286) | $ 0 | 0 | (6,097,286) |
Stock issued for cashless exercise of warrants, shares | 12,563,326 | |||
Balance, shares at Dec. 31, 2019 | 76,747,750 | |||
Balance, amount at Dec. 31, 2019 | $ (8,873,651) | $ 76,748 | 48,708,085 | (57,658,484) |
Net loss | (1,773,871) | $ 0 | 0 | (1,773,871) |
Stock issued for prepaid services, shares | 1,000,000 | |||
Stock issued for prepaid services, amount | 200,000 | $ 1,000 | 199,000 | 0 |
Balance, shares at Mar. 31, 2020 | 77,747,750 | |||
Balance, amount at Mar. 31, 2020 | (10,447,522) | $ 77,748 | 48,907,085 | (59,432,355) |
Balance, shares at Dec. 31, 2019 | 76,747,750 | |||
Balance, amount at Dec. 31, 2019 | (8,873,651) | $ 76,748 | 48,708,085 | (57,658,484) |
Net loss | (2,678,088) | |||
Balance, shares at Jun. 30, 2020 | 77,747,750 | |||
Balance, amount at Jun. 30, 2020 | (11,331,818) | $ 77,748 | 48,927,006 | (60,336,572) |
Balance, shares at Dec. 31, 2019 | 76,747,750 | |||
Balance, amount at Dec. 31, 2019 | (8,873,651) | $ 76,748 | 48,708,085 | (57,658,484) |
Issuance of stock options | 1,163,168 | 0 | 1,163,168 | 0 |
Stock warrants issued for prepaid services | 243,294 | |||
Stock options issued for prepaid services | 18,723 | |||
Net loss | (6,097,286) | $ 0 | 0 | (5,825,622) |
Stock issued for prepaid services, shares | 1,000,000 | |||
Stock issued for prepaid services, amount | 200,000 | $ 1,000 | 199,000 | 0 |
Cashless exercise of stock options/warrants, shares | 48,576 | |||
Cashless exercise of stock options/warrants, amount | 0 | $ 48 | (48) | 0 |
Modification of stock warrant | 30,573 | $ 0 | 30,573 | 0 |
Stock issued for consulting services, shares | 300,000 | |||
Stock issued for consulting services, amount | $ 102,000 | $ 300 | 101,700 | 0 |
Stock issued for cashless exercise of warrants, shares | 16,093,326 | |||
Balance, shares at Dec. 31, 2020 | 78,096,326 | |||
Balance, amount at Dec. 31, 2020 | $ (13,203,532) | $ 78,096 | 50,202,478 | (63,484,106) |
Balance, shares at Mar. 31, 2020 | 77,747,750 | |||
Balance, amount at Mar. 31, 2020 | (10,447,522) | $ 77,748 | 48,907,085 | (59,432,355) |
Issuance of stock options | 19,921 | 0 | 19,921 | 0 |
Net loss | (904,217) | $ 0 | 0 | (904,217) |
Balance, shares at Jun. 30, 2020 | 77,747,750 | |||
Balance, amount at Jun. 30, 2020 | (11,331,818) | $ 77,748 | 48,927,006 | (60,336,572) |
Balance, shares at Dec. 31, 2020 | 78,096,326 | |||
Balance, amount at Dec. 31, 2020 | (13,203,532) | $ 78,096 | 50,202,478 | (63,484,106) |
Net loss | (417,934) | $ 0 | 0 | (417,934) |
Stock issued for interest payable on convertible notes, shares | 494,400 | |||
Stock issued for interest payable on convertible notes, amount | 247,200 | $ 494 | 246,706 | 0 |
Stock issued for conversion of convertible notes, shares | 3,700,000 | |||
Stock issued for conversion of convertible notes, amount | 1,850,000 | $ 3,700 | 1,846,300 | 0 |
Stock issued for exercise of warrants, shares | 705,166 | |||
Stock issued for exercise of warrants, amount | 246,808 | $ 705 | 246,103 | 0 |
Stock issued for cashless exercise of warrants, shares | 194,690 | |||
Stock issued for cashless exercise of warrants, amount | 0 | $ 195 | (195) | 0 |
Stock issued for services, shares | 525,000 | |||
Stock issued for services, amount | 644,250 | $ 525 | 643,725 | 0 |
Share based compensation expense | 5,878 | $ 0 | 5,878 | 0 |
Balance, shares at Mar. 31, 2021 | 83,715,582 | |||
Balance, amount at Mar. 31, 2021 | (10,627,330) | $ 83,715 | 53,190,995 | (63,902,040) |
Balance, shares at Dec. 31, 2020 | 78,096,326 | |||
Balance, amount at Dec. 31, 2020 | (13,203,532) | $ 78,096 | 50,202,478 | (63,484,106) |
Net loss | $ (2,147,617) | |||
Stock issued for cashless exercise of warrants, shares | 16,068,326 | |||
Balance, shares at Jun. 30, 2021 | 89,245,951 | |||
Balance, amount at Jun. 30, 2021 | $ (9,307,557) | $ 89,246 | 56,234,920 | (65,631,723) |
Balance, shares at Mar. 31, 2021 | 83,715,582 | |||
Balance, amount at Mar. 31, 2021 | (10,627,330) | $ 83,715 | 53,190,995 | (63,902,040) |
Net loss | (1,729,683) | $ 0 | 0 | (1,729,683) |
Stock issued for interest payable on convertible notes, shares | 229,500 | |||
Stock issued for interest payable on convertible notes, amount | 368,139 | $ 230 | 367,909 | 0 |
Stock issued for conversion of convertible notes, shares | 5,160,000 | |||
Stock issued for conversion of convertible notes, amount | 2,580,000 | $ 5,160 | 2,574,840 | 0 |
Share based compensation expense | 67 | $ 0 | 67 | 0 |
Stock issued for exercise of stock options, shares | 125,000 | |||
Stock issued for exercise of stock options, amount | 101,250 | $ 125 | 101,125 | 0 |
Stock issued for cashless exercise of stock options, shares | 15,869 | |||
Stock issued for cashless exercise of stock options, amount | 0 | $ 16 | (16) | 0 |
Balance, shares at Jun. 30, 2021 | 89,245,951 | |||
Balance, amount at Jun. 30, 2021 | $ (9,307,557) | $ 89,246 | $ 56,234,920 | $ (65,631,723) |
Organization
Organization | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Organization | ||
Note 1 - Organization | Note 1 - Organization Midwest Energy Emissions Corp. Midwest Energy Emissions Corp. (the “Company”) is organized under the laws of the State of Delaware with 150,000,000 authorized shares of common stock, par value $0.001 per share and 2,000,000 authorized shares of preferred stock, par value $0.001 per share. MES, Inc. MES, Inc. is incorporated in the State of North Dakota. MES, Inc. is a wholly owned subsidiary of Midwest Energy Emissions Corp. and is engaged in the business of developing and commercializing state of the art control technologies relating to the capture and control of mercury emissions from coal fired boilers in the United States and Canada. | Note 1 - Organization Midwest Energy Emissions Corp. Midwest Energy Emissions Corp. (the “Company”) is organized under the laws of the State of Delaware with 150,000,000 authorized shares of common stock, par value $.001 per share and 2,000,000 authorized shares of preferred stock, par value $0.001 per share. MES, Inc. MES, Inc. is incorporated in the State of North Dakota. MES, Inc. is a wholly owned subsidiary of Midwest Energy Emissions Corp. and is engaged in the business of developing and commercializing state of the art control technologies relating to the capture and control of mercury emissions from coal fired boilers in the United States and Canada. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Summary of Significant Accounting Policies | ||
Note 2 - Summary of Significant Accounting Policies | Note 2 - Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of Rule 8-03 of Regulation S-X promulgated by the United States Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, these financial statements do not include all of the information and footnotes required for complete financial statements and should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 filed on April 5, 2021, from which the accompanying condensed consolidated balance sheet dated December 31, 2020 was derived. In management’s opinion, the unaudited condensed consolidated financial statements reflect all adjustments necessary to present fairly the financial position as of June 30, 2021, and results of operations, changes in stockholders’ deficit and cash flows for all periods presented. The interim results presented are not necessarily indicative of results that can be expected for a full year. Principles of Consolidation The condensed consolidated financial statements include the accounts of Midwest Energy Emissions Corp. and its wholly-owned subsidiary, MES, Inc. Intercompany balances and transactions have been eliminated in consolidation. Use of Estimates The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, valuation of equity issuances and disclosures of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. The Company uses estimates in accounting for, among other items, profit share liability, revenue recognition, allowance for doubtful accounts, stock-based compensation, income tax provisions, excess and obsolete inventory reserve and impairment of intellectual property. Actual results could differ from those estimates. Recoverability of Long-Lived and Intangible Assets Long-lived assets and certain identifiable intangibles held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Events relating to recoverability may include significant unfavorable changes in business conditions, recurring losses or a forecasted inability to achieve break-even operating results over an extended period. The Company evaluates the recoverability of long-lived assets based upon forecasted undiscounted cash flows. Should impairment in value be indicated, the carrying value of the long-lived and/or intangible assets would be adjusted, based on estimates of future discounted cash flows. The Company evaluated the recoverability of the carrying value of the Company’s property and equipment, right of use asset and intellectual property. No impairment charges were recognized for both of the three and six months ended June 30, 2021 and 2020. Fair Value of Financial Instruments The fair value hierarchy has three levels based on the inputs used to determine fair value, which are as follows: ☐ Level 1 ☐ Level 2 ☐ Level 3 — The fair value hierarchy requires the use of observable market data when available. In instances where the inputs used to measure fair value fall into different levels of the fair value hierarchy, the fair value measurement has been determined based on the lowest level input significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular item to the fair value measurement in its entirety requires judgment, including the consideration of inputs specific to the asset or liability. Cash was the only asset measured at fair value on a recurring basis by the Company at June 30, 2021 and December 31, 2020 and is considered to be Level 1. Financial instruments include cash, accounts receivable, accounts payable, customer credits and short-term debt. The carrying amounts of these financial instruments approximated fair value at June 30, 2021 and December 31, 2020 due to their short-term maturities. The fair value of the promissory notes payable at June 30, 2021 and December 31, 2020 approximated the carrying amount as the notes were recently issued at interest rates prevailing in the market and interest rates have not significantly changed as of June 30, 2021 and December 31, 2020. The fair value of the promissory notes payable was determined on a Level 2 measurement. Discounts on issued debt, as well as debt issuance costs, are amortized over the term of the individual promissory notes. The fair value of the profit share liability at June 30, 2021 and December 31, 2020 was calculated using a discounted cash flow model based on estimated future cash payments. The fair value of the profit share liability was determined on a Level 3 measurement. These values are determined using pricing models for which the assumptions utilized management’s estimates. The following tables present the Company’s assets and liabilities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy. Fair Value Measurement as of June 30, 2021 Total Level 1 Level 2 Level 3 Assets: Cash 1,689,352 1,689,352 - - Total Assets $ 1,689,352 $ 1,689,352 $ - $ - Liabilities Promissory notes 11,479,556 - 11,479,556 - Profit share liability – related party 2,555,133 - - 2,555,133 Total Liabilities $ 14,034,689 $ - $ 11,479,556 $ 2,555,133 Fair Value Measurement as of December 31, 2020 Total Level 1 Level 2 Level 3 Assets: Cash 591,019 591,019 - - Total Assets $ 591,019 $ 591,019 $ - $ - Liabilities Promissory notes 14,585,097 - 14,585,097 - Profit share liability 2,305,308 - - 2,305,308 Total Liabilities $ 16,890,405 $ - $ 14,585,097 $ 2,305,308 Foreign Currency Translation The Company’s functional currency is the United States Dollar (the “U.S. Dollar”). The Company engages in foreign currency denominated transactions with customers that operate in functional currencies other than the U.S. Dollar. Assets and liabilities denominated in foreign currencies are translated into U.S. Dollar amounts at the period-end exchange rates. Sales and purchases and income and expense transactions that are denominated in foreign currencies are translated into U.S. Dollar amounts at the prevailing rates of exchange on the transaction date. Adjustments arising from foreign currency transactions are reflected in the statement of operations. For the three and six months ended June 30, 2021 and 2020, there were no material foreign exchange gains or losses recognized by the Company in its statements of operations. Revenue Recognition The Company records revenue in accordance with ASC 606, Revenue from Contracts with Customers Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation. Revenue is recognized when the Company satisfies its performance obligation under the contract by transferring the promised product to its customer that obtains control of the product. A performance obligation is a promise in a contract to transfer a distinct product to a customer. Most of the Company’s contracts have a single performance obligation, as the promise to transfer products or services is not separately identifiable from other promises in the contract and, therefore, not distinct. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products. As such, revenue is recorded net of returns, allowances, customer discounts, and incentives. Sales and other taxes are excluded from revenues. Invoiced shipping and handling costs are included in revenue. Disaggregation of Revenue The Company generated revenue for the three and six months ended June 30, 2021 and 2020 by (i) delivering product to its commercial customers, (ii) completing and commissioning equipment projects at commercial customer sites and (iii) performing demonstrations of its technology at customers with the intent of entering into long term supply agreements based on the performance of the Company’s products during the demonstrations and (iv) licensing its technology to customers. Revenue for product sales is recognized at the point of time in which the customer obtains control of the product, at the time title passes to the customer upon shipment or delivery of the product based on the applicable shipping terms. Revenue for equipment sales is recognized upon commissioning and customer acceptance of the installed equipment per the terms of the purchase contract. Revenue for demonstrations and consulting services is recognized when performance obligations contained in the contract have been completed, typically the completion of necessary field work and the delivery of any required analysis per the terms of the agreement. The following table presents sales by operating segment disaggregated based on the type of product and geographic region for the three months ended June 30, 2021 and 2020. Three months ended June 30, 2021 Three months ended June 30, 2020 United States International Total United States International Total Product revenue $ 2,060,949 $ - $ 2,060,949 $ 1,809,115 $ 28,400 $ 1,837,515 License revenue 145,547 - 145,547 - - - Demonstrations & Consulting revenue 27,000 - 27,000 39,335 - 39,335 Equipment revenue 37,200 - 37,200 2,895 3,757 6,652 $ 2,270,696 $ - $ 2,270,696 $ 1,851,345 $ 32,157 $ 1,883,502 The following table presents sales by operating segment disaggregated based on the type of product and geographic region for the six months ended June 30, 2021 and 2020. Six months ended June 30, 2021 Six months ended June 30, 2020 United States International Total United States International Total Product revenue $ 4,092,050 $ - $ 4,092,050 $ 2,793,485 $ 113,600 $ 2,907,085 License revenue 1,091,094 - 1,091,094 - - - Demonstrations & Consulting revenue 61,310 - 61,310 81,892 - 81,892 Equipment revenue 52,880 - 52,880 7,444 3,757 11,201 $ 5,297,334 $ - $ 5,297,334 $ 2,882,821 $ 117,357 $ 3,000,178 Income Taxes The Company follows the asset and liability method of accounting for income taxes under FASB ASC 740, Income Taxes FASB ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. There were no unrecognized tax benefits as of June 30, 2021 and December 31, 2020. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception. In response to the COVID-19 pandemic, the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) was signed into law in March 2020. The CARES Act lifts certain deduction limitations originally imposed by the Tax Cuts and Jobs Act of 2017 (“ 2017 Tax Act In addition, the CARES Act raises the corporate charitable deduction limit to 25% of taxable income and makes qualified improvement property generally eligible for 15-year cost-recovery and 100% bonus depreciation. The enactment of the CARES Act did not result in any material adjustments to our income tax provision. Basic and Diluted Loss Per Common Share Basic net loss per common share is computed using the weighted average number of common shares outstanding. Diluted loss per share reflects the potential dilution from common stock equivalents, such as stock issuable pursuant to the exercise of stock options and warrants. There were no dilutive potential common shares as of June 30, 2021 and 2020, because the Company incurred net losses and basic and diluted losses per common share are the same. The following common stock equivalents were excluded from the computation of diluted net loss per share of common stock because they were anti-dilutive. The exercise of these common stock equivalents would dilute earnings per share if the Company becomes profitable in the future. June 30, June 30, 2021 2020 Stock Options 16,068,326 12,447,326 Warrants 4,285,000 5,690,378 Convertible debt 42,000 9,414,200 Total common stock equivalents excluded from diluted net loss per share 20,395,326 27,551,904 Concentration of Credit Risk Financial instruments that subject the Company to credit risk consist of cash and equivalents on deposit with financial institutions and accounts receivable. The Company’s cash as of June 30, 2021 and December 31, 2020 is maintained at high-quality financial institutions and has not incurred any losses to date. Customer and Supplier Concentration For each of the six months ended June 30, 2021 and 2020, 100% of the Company’s revenue related to fifteen and nine customers respectively. At June 30, 2021 and 2020, 100% of the Company’s accounts receivable related to nine and seven customers, respectively. For each of the six months ended June 30, 2021 and 2020, 94% and 83% of the Company’s purchases related to two suppliers, respectively. At June 30, 2021 and 2020, 61% and 59% of the Company’s accounts payable and accrued expenses related to two vendors, respectively. The Company believes there are numerous other suppliers that could be substituted should the supplier become unavailable or non-competitive. Contingencies Certain conditions may exist which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company’s management and its legal counsel assess such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company, or unasserted claims that may result in such proceedings, the Company’s legal counsel evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they arise from guarantees, in which case the guarantees would be disclosed. Recently Adopted Accounting Standards Effective January 1, 2020, the Company adopted ASU No. 2018-07, Compensation — Stock Compensation (Topic 718) Effective January 1, 2020, the Company adopted ASU No. 2018-13, Fair Value Measurement (Topic 820) In December 2019, the FASB issued authoritative guidance intended to simplify the accounting for income taxes (ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes”). This guidance eliminates certain exceptions to the general approach to the income tax accounting model and adds new guidance to reduce the complexity in accounting for income taxes. This guidance is effective for annual periods after December 15, 2020, including interim periods within those annual periods (beginning with the quarter ended March 31, 2021 for the Company). The adoption of ASU 2019-12 did not have a material impact on its consolidated financial statements. Recently Issued Accounting Standards Management does not believe that any recently issued, but not yet effective accounting pronouncements, when adopted, will have a material effect on the accompanying consolidated financial statements. | Note 2 - Summary of Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with the Generally Accepted Accounting Principles in the United States of America (“GAAP”). Principles of Consolidation The consolidated financial statements include the accounts of Midwest Energy Emissions Corp. and its wholly owned subsidiary, MES, Inc. Intercompany balances and transactions have been eliminated in consolidation. Restatement of previously issued financial statements On April 13, 2020, the Company concluded that a gain on debt restructuring recognized during the first quarter of 2019 (relating to the New AC Midwest Unsecured Note) should have been accounted for as a capital transaction. Since the New AC Midwest Unsecured Note was held by a related party, the gain should have been recorded as a capital transaction under ASC 470-50-40. The profit-sharing portion also should have been bifurcated from the loan and shown separately on the unaudited condensed consolidated balance sheets of the financial statements for the quarters ended March 31 2019, June 30, 2019 and September 30, 2019. For more information please see Note 15. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, valuation of equity issuances and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. The Company uses estimates in accounting for, among other items, revenue recognition, profit share liability, allowance for doubtful accounts, stock-based compensation, income tax provision, excess and obsolete inventory reserve and impairment of intellectual property. Actual results could differ from those estimates. Cash Cash and cash equivalents include all highly liquid monetary instruments with original maturities of three months or less when purchased. These investments are carried at cost, which approximates fair value. Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash deposits. The Company maintains its cash in institutions insured by the Federal Deposit Insurance Corporation (“FDIC”). At times, the Company’s cash and cash equivalent balances may be uninsured or in amounts that exceed the FDIC insurance limits. The Company has not experienced any loses on such accounts. At December 31, 2020 and 2019, the Company had no cash equivalents. As of December 31, 2020, approximately $91,000 of cash exceeded the FDIC insurance limits. Accounts Receivable Trade accounts receivable are stated at the amount the Company expects to collect. The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. Management considers the following factors when determining the collectability of specific customer accounts: customer credit-worthiness, past transaction history with the customer, current economic industry trends, and changes in customer payment terms. Past due balances over 90 days and other higher risk amounts are reviewed individually for collectability. If the financial condition of the Company’s customers were to deteriorate, adversely affecting their ability to make payments, additional allowances would be required. Based on management’s assessment, the Company provides for estimated uncollectible amounts through a charge to earnings and a credit to a valuation allowance. Balances that remain outstanding after the Company has used reasonable collection efforts are written off through a charge to the valuation allowance and a credit to accounts receivable. At December 31, 2020 and 2019, the allowance for doubtful accounts was zero. Inventory Inventories are stated at the lower of cost (first-in, first-out basis) or net realizable value. Inventories are periodically evaluated to identify obsolete or otherwise impaired products and are written off when management determines usage is not probable. The Company estimates the balance of excess and obsolete inventory by analyzing inventory by age using last used and original purchase date and existing sales pipeline for which the inventory could be used. As of December 31, 2020 and 2019, the Company has no valuation allowance. Property and Equipment Property and equipment are stated at cost. When retired or otherwise disposed, the related carrying value and accumulated depreciation are removed from the respective accounts and the net difference less any amount realized from disposition, is reflected in earnings. For consolidated financial statement purposes, equipment is recorded at cost and depreciated using the straight-line method over their estimated useful lives of 2 to 5 years. Leasehold improvements are recorded at cost and depreciated using the straight-line method over the lesser of their estimated useful lives or the remaining term of the lease. Expenditures for repairs and maintenance which do not materially extend the useful lives of property and equipment are charged to operations. Management reviews the carrying value of its property and equipment for impairment on an annual basis. Intellectual Property Intellectual property is recorded at cost and amortized over its estimated useful life of 15 years. Management reviews intellectual property for impairment when events or changes in circumstances indicate the carrying amount of an asset or asset group may not be recoverable. In the event that impairment indicators exist, a further analysis is performed and if the sum of the expected undiscounted future cash flows resulting from the use of the asset or asset group is less than the carrying amount of the asset or asset group, an impairment loss equal to the excess of the asset or asset group’s carrying value over its fair value is recorded. Management considers historical experience and all available information at the time the estimates of future cash flows are made, however, the actual cash values that could be realized may differ from those that are estimated. Recoverability of Long-Lived and Intangible Assets Long-lived assets and certain identifiable intangibles held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Events relating to recoverability may include significant unfavorable changes in business conditions, recurring losses or a forecasted inability to achieve break-even operating results over an extended period. The Company evaluates the recoverability of long-lived assets based upon forecasted undiscounted cash flows. Should impairment in value be indicated, the carrying value of the long-lived and or intangible assets would be adjusted, based on estimates of future discounted cash flows. The Company evaluated the recoverability of the carrying value of the Company’s equipment. No impairment charges were recognized for the years ended December 31, 2020 and 2019, respectively. Leases In February 2016, the FASB issued new guidance which requires lessees to recognize a lease liability for the obligation to make lease payments and a right-of-use asset for the right to use the underlying asset for the lease term. The accounting standard, effective January 1, 2019, requires virtually all leases to be recognized on the Balance Sheet. Effective January 1, 2019, we adopted the standard using the modified retrospective method, under which we elected the package of practical expedients and transition provisions allowing us to bring our existing operating leases onto the Consolidated Balance Sheet without adjusting comparative periods, but recognizing a cumulative-effect adjustment to the opening balance of accumulated deficit on January 1, 2019. Under the guidance, we have also elected not to separate lease and non-lease components in recognition of the lease-related assets and liabilities, as well as the related lease expense. We have operating leases for office space in two multi-tenant facilities, which are not recorded as assets and liabilities as those leases do not have terms greater than 12 months. We have an operating leases for a multi-purpose facility and bulk trailers used in operations which is recorded as an asset and liability as the lease has a terms greater than 12 months. Lease-related assets, or right-of-use assets, are recognized at the lease commencement date at amounts equal to the respective lease liabilities, adjusted for prepaid lease payments, initial direct costs, and lease incentives received. Lease-related liabilities are recognized at the present value of the remaining contractual fixed lease payments, discounted using our incremental borrowing rate. Operating lease expense is recognized on a straight-line basis over the lease term, while variable lease payments are expensed as incurred. Upon adoption of the standard on January 1, 2019, we recorded $1,339,569 of right of use assets and $1,417,435 of lease-related liabilities, with the difference charged to accumulated deficit at that date. Stock-Based Compensation The Company accounts for stock-based compensation awards in accordance with the provisions of Accounting Standards Codification (“ASC”) 718, Compensation-Stock Compensation Fair Value of Financial Instruments The fair value hierarchy has three levels based on the inputs used to determine fair value, which are as follows: ☐ Level 1 ☐ Level 2 ☐ Level 3 — The fair value hierarchy requires the use of observable market data when available. In instances where the inputs used to measure fair value fall into different levels of the fair value hierarchy, the fair value measurement has been determined based on the lowest level input significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular item to the fair value measurement in its entirety requires judgment, including the consideration of inputs specific to the asset or liability. Cash was the only asset measured at fair value on a recurring basis by the Company at December 31, 2020 and 2019 and is considered to be Level 1. Financial instruments include cash, accounts receivable, accounts payable, customer credits and short-term debt. The carrying amounts of these financial instruments approximated fair value at December 31, 2020 and 2019 due to their short-term maturities. The fair value of the promissory notes payable at December 31, 2020 and 2019 approximated the carrying amount as the notes were recently issued at interest rates prevailing in the market and interest rates have not significantly changed as of December 31, 2020 and 2019. The fair value of the promissory notes payable was determined on a Level 2 measurement. Discounts on issued debt, as well as debt issuance costs, are amortized over the term of the individual promissory notes. The fair value of the profit share liability at December 31, 2020 was calculated using a discounted cash flow model based on estimated future cash payments. The fair value of the profit share liability was determined on a Level 3 measurement. These values are determined using pricing models for which the assumptions utilized management’s estimates. The following tables present the Company’s assets and liabilities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy. Fair Value Measurement as of December 31, 2020 Total Level 1 Level 2 Level 3 Assets: Cash $ 591,019 $ 591,019 $ - $ - Total Assets $ 591,019 $ 591,019 $ - $ - Liabilities: Promissory notes $ 14,585,097 $ - $ 14,585,097 $ - Profit share liability 2,305,308 - - 2,305,308 Total Liabilities $ 16,890,405 $ - $ 14,585,097 $ 2,305,308 Fair Value Measurement as of December 31, 2019 Total Level 1 Level 2 Level 3 Assets: Cash $ 1,499,287 $ 1,499,287 $ - $ - Total Assets $ 1,499,287 $ 1,499,287 $ - $ - Liabilities: Promissory notes $ 12,200,411 $ - $ 12,200,411 $ - Profit share liability 2,328,845 - - 2,328,845 Total Liabilities $ 14,529,256 $ - $ 12,200,411 $ 2,328,845 Foreign Currency Translation The Company’s functional currency is the United States Dollar (the “U.S. Dollar”). The Company engages in foreign currency denominated transactions with customers that operate in functional currencies other than the U.S. Dollar. Assets and liabilities denominated in foreign currencies are translated into U.S. Dollar amounts at the period-end exchange rates. Sales and purchases and income and expense transactions that are denominated in foreign currencies are translated into U.S. Dollar amounts at the prevailing rates of exchange on the transaction date. Adjustments arising from foreign currency transactions are reflected in the statement of operations. For the years ended December 31, 2020 and 2019, there were no material foreign exchange gains or losses recognized by the Company in its statements of operations. Revenue Recognition The Company records revenue in accordance with ASC 606, Revenue from Contracts with Customers Step 1: Identify the contract(s) with a customer. Step 2: Identify the performance obligations in the contract. Step 3: Determine the transaction price. Step 4: Allocate the transaction price to the performance obligations in the contract. Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation. Revenue is recognized when the Company satisfies its performance obligation under the contract by transferring the promised product to its customer that obtains control of the product. A performance obligation is a promise in a contract to transfer a distinct product to a customer. Most of the Company’s contracts have a single performance obligation, as the promise to transfer products or services is not separately identifiable from other promises in the contract and, therefore, not distinct. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products. As such, revenue is recorded net of returns, allowances, customer discounts, and incentives. Sales and other taxes are excluded from revenues. Invoiced shipping and handling costs are included in revenue. The adoption of this standard did not have a material impact on the Company’s financial statements. Disaggregation of Revenue The Company generated revenue for the years ended December 31, 2020 and 2019 by (i) delivering product to its commercial customers, (ii) completing and commissioning equipment projects at commercial customer sites, (iii) performing demonstrations of its technology at customers with the intent of entering into long term supply agreements based on the performance of the Company’s products during the demonstrations and (iv) licensing its technology to customers. Revenue for product sales is recognized at the point of time in which the customer obtains control of the product, at the time title passes to the customer upon shipment or delivery of the product based on the applicable shipping terms. Revenue for licensing is recognized at the point of time in which the customer obtains the license. Lump sum payments made pursuant to agreements in which the primary consideration is a license to the company’s technology is accounted for as license revenue. Certain arrangements provide for repayment of license fees in the event the company enters into a supply agreement that results in a specified amount of sales. Nothing is recognized for this contingency. Revenue for equipment sales is recognized upon commissioning and customer acceptance of the installed equipment per the terms of the purchase contract. Revenue for demonstrations and consulting services is recognized when performance obligations contained in the contract have been completed, typically the completion of necessary field work and the delivery of any required analysis per the terms of the agreement. The following table presents sales by operating segment disaggregated based on the type of product and geographic region for the years ended December 31, 2020, and 2019. Year ended December 31, 2020 Year ended December 31, 2019 United States International Total United States International Total Product revenue $ 7,306,382 $ 113,600 $ 7,419,982 $ 10,746,715 $ 297,840 $ 11,044,555 License revenue 545,547 - 545,547 - - - Demonstrations & Consulting revenue 148,553 - 148,553 183,448 95,543 278,991 Equipment revenue 38,000 6,366 44,366 93,481 - 93,481 $ 8,038,482 $ 119,966 $ 8,158,448 $ 11,023,644 $ 393,383 $ 11,417,027 Income Taxes The Company follows the asset and liability method of accounting for income taxes under FASB ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. FASB ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. There were no unrecognized tax benefits as of December 31, 2020. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception. The Company may be subject to potential examination by federal, state, and city taxing authorities in the areas of income taxes. These potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions, and compliance with federal, state, and city tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months. The Company is no longer subject to tax examinations by tax authorities for years prior to 2017. Basic and Diluted Loss Per Common Share Basic net loss per common share is computed using the weighted average number of common shares outstanding. Diluted loss per share reflects the potential dilution from common stock equivalents, such as stock issuable pursuant to the exercise of stock options and warrants. For the years ended December 31, 2020 and 2019 basic and diluted earnings per share approximated each other. There were no dilutive potential common shares as of December 31, 2020 and 2019, because the Company incurred net losses and basic and diluted losses per common share are the same. The following common stock equivalents were excluded from the computation of diluted net loss per share of common stock because they were anti-dilutive. The exercise of these common stock equivalents would dilute earnings per share if the Company becomes profitable in the future. December 31, December 31, 2020 2019 Stock Options 16,093,326 12,553,326 Warrants 5,595,378 5,690,378 Convertible debt 9,414,200 9,351,400 Total common stock equivalents excluded from diluted net loss per share 31,102,904 27,595,104 Concentration of Credit Risk Financial instruments that subject the Company to credit risk consist of cash and equivalents on deposit with financial institutions and accounts receivable. The Company’s cash as of December 31, 2020 is maintained at high-quality financial institutions and has not incurred any losses to date. Customer and Supplier Concentration For each of the years ended December 31, 2020 and 2019, 100% of the Company’s revenue related to thirteen and eleven customers, respectively. At December 31, 2020 and 2019, 100% of the Company’s accounts receivable related to nine and eight customers, respectively. For each of the years ended December 31, 2020 and 2019, 88% and 91% of the Company’s purchases related to two suppliers, respectively. At December 31, 2020 and 2019, 45% and 74% of the Company’s accounts payable and accrued expenses related to two vendors. The Company believes there are numerous other suppliers that could be substituted should the supplier become unavailable or non-competitive. Contingencies Certain conditions may exist which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company’s management and its legal counsel assess such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company, or unasserted claims that may result in such proceedings, the Company’s legal counsel evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they arise from guarantees, in which case the guarantees would be disclosed. Recently Adopted Accounting Standards In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) In July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815) The guidance in ASU 2017-11 is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted, and the guidance is to be applied using a full or modified retrospective approach. The Company early adopted ASU 2017-11 and changed its method of accounting for certain warrants that were initially recorded as liabilities during the year ended December 31, 2014 on a full retrospective basis. The adoption of ASU 2017-11 did not have a material impact on the Company’s consolidated financial statements. Effective January 1, 2020, the Company adopted ASU No. 2018-07, Compensation — Stock Compensation (Topic 718) Effective January 1, 2020, the Company adopted ASU No. 2018-13, Fair Value Measurement (Topic 820) Recently Issued Accounting Standards In December 2019, the FASB issued authoritative guidance intended to simplify the accounting for income taxes (ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes”). This guidance eliminates certain exceptions to the general approach to the income tax accounting model and adds new guidance to reduce the complexity in accounting for income taxes. This guidance is effective for annual periods after December 15, 2020, including interim periods within those annual periods. The Company is currently evaluating the potential impact of this guidance on its consolidated financial statements. Management does not believe that any recently issued, but not yet effective accounting pronouncements, when adopted, will have a material effect on the accompanying consolidated financial statements. |
Going Concern and Financial Con
Going Concern and Financial Condition | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Going Concern and Financial Condition | ||
Note 3 - Going Concern and Financial Condition | Note 3 - Liquidity and Financial Condition Under ASC 205-40, Presentation of Financial Statements—Going Concern As reflected in the condensed consolidated financial statements, the Company had $1.7 million in cash on its balance sheet at June 30, 2021. The Company had working capital of $216,000 and an accumulated deficit of $65.6 million. Additionally, the Company had a net loss in the amount of $2.1 million and cash provided by operating activities of $502,000 for the six months ended June 30, 2021. The accompanying condensed consolidated financial statements as of June 30, 2021 have been prepared assuming the Company will continue as a going concern. During the first six months of 2021, the Company eliminated $4,430,000 of convertible notes through conversions to shares of common stock. In June 2021, the Company announced that it had entered into a Debt Repayment and Exchange Agreement with its principal lender which, subject to various closing conditions including but not limited to the completion of an offering of equity securities resulting in net proceeds of at least $12.0 million by December 31, 2021, will repay all existing secured and unsecured debt obligations held by such lender. Based upon the elimination of convertible notes in the principal amount of $4,430,000, the agreement entered into with its principal lender, the Company’s current cash position and recent positive cash flow trends, management believes substantial doubt regarding the Company’s ability to continue as a going concern has been mitigated. The Company believes it will have sufficient working capital to fund operations for at least the next twelve months from the date of issuance of these financial statements. | Note 3 – Going Concern and Financial Condition Under ASC 205-40, Presentation of Financial Statements—Going Concern The accompanying consolidated financial statements as of December 31, 2020 have been prepared assuming the Company will continue as a going concern. As reflected in the consolidated financial statements, the Company had an accumulated deficit of $63 million and a negative working capital of $984,112 at December 31, 2020. Additionally, the Company had a net loss in the amount of $5.8 million and cash used by operating activities of $1.2 million for the year ended December 31, 2020. These factors raise substantial doubt about the Company’s ability to continue as a going concern for the next twelve months from the issuance of these consolidated financial statements within the Company’s Annual Report on Form 10-K. Although we anticipate continued significant revenues for products used in MATS compliance activities and from licensing of our technologies, no assurances can be given that the Company can obtain sufficient working capital through these activities and additional financing may be needed to meet its obligations. In February 2021, the Company received second draw loan proceeds in the amount of $299,380 pursuant to the Paycheck Protection Program under the CARES Act which was enacted on March 27, 2020 as a result of the COVID-19 pandemic. In January and February 2021, certain warrant holders exercised warrants for cash and the Company received proceeds of approximately $246,808. Also, in January and February 2021, the Company substantially reduced the aggregate principal amount outstanding on various debt obligations. In this regard, $940,000 of the outstanding principal amount of convertible promissory notes issued in 2013 was converted to common stock, leaving $50,000 remaining outstanding on such notes issued in 2013. In March 2021, the Company eliminated $860,000 of outstanding convertible notes issued in 2018 by force converting all of such notes based on the terms thereof. Nevertheless, the Company may need to raise additional equity or debt financing. While the Company believes in its ability to raise additional funds, no assurances can be given that the Company can maintain sufficient working capital through these efforts, or that the continued implementation of its business plan will generate sufficient revenues in the future to sustain ongoing operations. The accompanying consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the possible inability of the Company to continue as a going concern. |
Inventory
Inventory | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Inventory | ||
Note 4 - Inventory | Note 4 - Inventory Inventory was comprised of the following at June 30, 2021 and December 31, 2020: June 30, 2021 December 31, 2020 Raw Materials $ 161,005 $ 169,803 Spare Parts 23,434 23,432 Finished goods 359,304 366,892 $ 543,743 $ 560,127 | Note 4 - Inventory Inventory was comprised of the following at December 31, 2020 and 2019: December 31, 2020 December 31, 2019 Raw Materials $ 169,803 $ 223,790 Work in Process - 43,814 Spare Parts 23,432 27,632 Finished goods 366,892 218,262 $ 560,127 $ 513,498 |
Property And Equipment Net
Property And Equipment Net | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Property And Equipment Net | ||
Note 5 - Property and Equipment, Net | Note 5 - Property and Equipment, Net Property and equipment at June 30, 2021 and December 31, 2020 are as follows: June 30, December 31, 2021 2020 Equipment & installation $ 1,965,659 $ 1,965,659 Trucking equipment 834,375 834,375 Computer equipment and software 14,768 67,126 Office equipment 5,528 27,155 Total equipment 2,820,330 2,894,315 Less: accumulated depreciation (2,785,384 ) (2,814,993 ) Construction in process 1,807,707 1,807,707 Property and equipment, net $ 1,842,653 $ 1,887,029 The Company uses the straight-line method of depreciation over 2 to 5 years. During the three months ended June 30, 2021 and 2020 depreciation expense was $20,575, and $56,015, respectively. During the six months ended June 30, 2021 and 2020 depreciation expense was $44,379, and $122,604, respectively. | Note 5 - Property and Equipment, Net Property and equipment at December 31, 2020 and 2019 are as follows: December 31, December 31, 2020 2019 Equipment & Installation $ 1,965,659 $ 1,965,659 Trucking equipment 834,375 922,441 Computer equipment and software 67,126 67,126 Office equipment 27,155 27,155 Total equipment 2,894,315 2,982,381 Less: accumulated depreciation (2,814,993 ) (2,707,745 ) Construction in process 1,807,707 1,807,707 Property and equipment, net $ 1,887,029 $ 2,082,343 The Company uses the straight-line method of depreciation over 2 to 5 years. During the years ended December 31, 2020 and 2019 depreciation expense was $188,675, and $314,908, respectively. |
Intellectual Property
Intellectual Property | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Intellectual Property | ||
Note 6 - Intellectual Property | Note 6 - Intellectual Property On January 15, 2009, the Company entered into an “Exclusive Patent and Know-How License Agreement Including Transfer of Ownership” with the Energy and Environmental Research Center Foundation, a non-profit entity. Under the terms of the Agreement, the Company has been granted an exclusive license by the Energy and Environmental Research Center Foundation for the technology to develop, make, have made, use, sell, offer to sell, lease, and import the technology in any coal-fired combustion systems (power plant) worldwide and to develop and perform the technology in any coal-fired power plant in the world. On April 24, 2017, the Company closed on the acquisition of all patent rights from the Energy and Environmental Research Center Foundation including all patents and patents pending, domestic and foreign, relating to the foregoing technology. A total of 42 domestic and foreign patents and patent applications were included in the acquisition. In accordance with the terms of the License Agreement, the patent rights were acquired for the purchase price of (i) $2,500,000 in cash, and (ii) 925,000 shares of common stock of which 628,998 shares were issued to the Energy and Environmental Research Center Foundation and 296,002 were issued to the inventors who had been designated by the Energy and Environmental Research Center Foundation. The shares issued were valued at $518,000 ($0.56 per share), representing the value as of the closing date. License and patent costs capitalized as of June 30, 2021 and December 31, 2020 are as follows: Amortization expense for the three months ended June 30, 2021 and 2020 was $51,150 and $61,066, respectively. Amortization expense for the six months ended June 30, 2021 and 2020 was $102,300 and $111,366, respectively. Estimated annual amortization for each of the next five years is $204,600. | Note 6 – Intellectual Property On January 15, 2009, the Company entered into an “Exclusive Patent and Know-How License Agreement Including Transfer of Ownership” with the Energy and Environmental Research Center Foundation, a non-profit entity. Under the terms of the Agreement, the Company has been granted an exclusive license by the Energy and Environmental Research Center Foundation for the technology to develop, make, have made, use, sell, offer to sell, lease, and import the technology in any coal-fired combustion systems (power plant) worldwide and to develop and perform the technology in any coal-fired power plant in the world. On April 24, 2017, the Company closed on the acquisition of all patent rights from the Energy and Environmental Research Center Foundation including all patents and patents pending, domestic and foreign, relating to the foregoing technology. A total of 42 domestic and foreign patents and patent applications were included in the acquisition. In accordance with the terms of the License Agreement, the patent rights were acquired for the purchase price of (i) $2,500,000 in cash, and (ii) 925,000 shares of common stock of which 628,998 shares were issued to the Energy and Environmental Research Center Foundation and 296,002 were issued to the inventors who had been designated by the Energy and Environmental Research Center Foundation. The shares issued were valued at $518,000 ($0.56 per share), representing the value as of the closing date. License and patent costs capitalized as of December 31, 2020 and 2019 are as follows: December 31 December 31 2020 2019 Patents $ 3,068,995 $ 3,068,995 Less: Accumulated amortization (750,199 ) (536,533 ) License, net $ 2,318,796 $ 2,532,462 Amortization expense for the years ended December 31, 2020 and 2019 was $213,666 and $201,200, respectively. Estimated annual amortization for each of the next five years is $204,600. |
Notes Payable
Notes Payable | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Notes Payable | ||
Note 7 - Notes Payable | Note 7 - Notes Payable On February 25, 2020, and pursuant to a Business Loan Agreement entered into with a banking institution, the Company’s wholly owned subsidiary, MES, Inc. closed on a one-year secured loan in the principal amount of $200,000 bearing interest at 8.75% per annum. Principal and interest is to be paid in equal monthly installments until the loan is paid in full on February 26, 2021. The note is secured by substantially all of the assets of MES, Inc. In February 2021, the loan was repaid in full. On April 14, 2020, the Company received loan proceeds in the amount of $299,300 from First International Bank & Trust pursuant to the Paycheck Protection Program (the “PPP Loan”) under the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), which was enacted on March 27, 2020. The loan, which is in the form of a Note dated April 14, 2020, matures on April 14, 2022 and bears interest at a rate of 1.0% per annum, with one interest payment on April 14, 2021 and one principal and interest payment on maturity. The principal and accrued interest under the PPP Loan is forgivable after eight or twenty-four weeks if the Company uses the PPP Loan proceeds for eligible purposes, including payroll, benefits, rent and utilities, and otherwise complies with the PPP requirements. In order to obtain forgiveness of the PPP Loan, the Company must submit a request and provide satisfactory documentation regarding its compliance with applicable requirements. In January 2021, the PPP Loan was forgiven, and the Company recorded a gain on extinguishment of debt of $299,300. In February 2021, the Company received second draw loan proceeds in the amount of $299,380 from First International Bank & Trust pursuant to the Paycheck Protection Program (the “Second PPP Loan”) under the CARES Act. The Second PPP Loan is in the form of a Note dated February 2, 2021, matures on April 14, 2026 and bears interest at a rate of 1.0% per annum, with one interest payment on February 2, 2022, 47 monthly consecutive principal and interest payments of $6,366.89 each, beginning March 2, 2022, and one final principal and interest payment of $6,366.92 on February 2, 2026. The principal and accrued interest under the Second PPP Loan is forgivable after eight or twenty-four weeks if the Company uses the Second PPP Loan proceeds for eligible purposes, including payroll, benefits, rent and utilities, and otherwise complies with the PPP requirements. | Note 7 –Notes Payable On February 25, 2020, and pursuant to a Business Loan Agreement entered into with a banking institution, the Company’s wholly owned subsidiary, MES, Inc. closed on a one-year secured loan in the principal amount of $200,000 bearing interest at 8.75% per annum. Principal and interest is to be paid in equal monthly installments until the loan is paid in full on February 26, 2021. The note is secured by substantially all of the assets of MES, Inc. During the year ended December 31, 2020 the Company repaid $165,339 of principal and $9,428 of interest. In February 2021, the loan was repaid in full. See Note 16. On April 14, 2020, the Company received loan proceeds in the amount of $299,300 from First International Bank & Trust pursuant to the Paycheck Protection Program (the “PPP Loan”) under the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”), which was enacted on March 27, 2020. The PPP Loan, which is in the form of a Note dated April 14, 2020, matures on April 14, 2022 and bears interest at a rate of 1.0% per annum, with one interest payment on April 14, 2021 and one principal and interest payment on maturity. The principal and accrued interest under the PPP Loan is forgivable after eight or twenty-four weeks if the Company uses the PPP Loan proceeds for eligible purposes, including payroll, benefits, rent and utilities, and otherwise complies with the PPP requirements. In order to obtain forgiveness of the PPP Loan, the Company must submit a request and provide satisfactory documentation regarding its compliance with applicable requirements. In January 2021, the PPP Loan was forgiven. See Note 16. |
Convertible Notes Payable
Convertible Notes Payable | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Convertible Notes Payable | ||
Note 8 - Convertible Notes Payable | Note 8 - Convertible Notes Payable The Company has the following convertible notes payable outstanding as of June 31, 2021 and December 31, 2020: June 30, December 31, 2021 2020 Secured convertible promissory notes which mature upon the retirement of the New AC Midwest Secured Debt (see Note 9), bear interest at 10% per annum, are convertible into shares of common stock at $0.50 per share, and are secured by the assets of the Company. $ 20,000 $ 990,000 Unsecured convertible promissory notes which mature beginning on June 15, 2023 through October 31, 2023, bear interest at 12% per annum, and are convertible into shares of common stock at $0.50 per share. - 860,000 Unsecured convertible promissory notes which mature beginning on June 18, 2024 through October 23, 2024, bear interest at 12% per annum, and are convertible into shares of common stock at $0.50 per share. - 2,600,000 Total convertible notes payable before discount 20,000 4,450,000 Less discounts and debt issuance costs - (394,878 ) Total convertible notes payable 20,000 4,055,122 Less current portion - - Convertible notes payable, net of current portion $ 20,000 $ 4,055,122 From July 30, 2013 through December 24, 2013, the Company sold convertible notes and warrants to unaffiliated accredited investors totaling $1,902,500. The notes bear interest at 10% per annum, are secured by the Company’s assets, and are convertible into one share of common stock, par value $0.001 per share, with the initial conversion ratio equal to $0.50 per share. The notes had an initial term of three years, but the maturity of the notes was extended during 2014 to match the retirement of the New AC Midwest Secured Debt. From February 8, 2021 to February 15, 2021, the Company issued 1,880,000 shares of common stock to certain holders of such convertible promissory notes issued in 2013 for the conversion of the outstanding principal of such notes in the aggregate amount of $940,000, based upon a conversion rate of $0.50 per share. On April 9, 2021, the Company issued 60,000 shares of common stock to another certain holder of such notes issued in 2013 for the conversion of outstanding principal in the amount of $30,000, based upon a conversion rate of $0.50 per share. As of June 30, 2021 and December 31, 2020, total principal of $20,000 and $990,000, respectively, was outstanding on these notes. On June 15, 2018, the Company issued 2018 Unsecured Convertible Notes (the “2018 Unsecured Notes”) totaling $560,000 and warrants to certain holders of the 2013 Notes in exchange for their secured 2013 Notes. The 2018 Unsecured Notes have a term of five years, bear interest at 12% per annum, and are convertible into one share of common stock, par value $0.001 per share, with the initial conversion ratio equal to $0.50 per share. For each dollar exchanged, the investor received a warrant to purchase one share of common stock of the Company at an exercise price of $0.70 per share. The 2018 Unsecured Notes may be converted at any time and from time to time in whole or in part prior to the maturity date thereof. From August 31, 2018 through October 30, 2018, the Company issued additional 2018 Unsecured Notes totaling $300,000 and warrants to unaffiliated investors. Pursuant to the terms of the 2018 Unsecured Notes, if at any time after six months from the issuance of the 2018 Notes, the closing price of the Company’s common stock exceeds $1.00 per share for 10 consecutive trading days, the Company shall have the right to force convert all of the outstanding principal of such Notes. Pursuant to notice dated February 17, 2021, the Company notified all such holders that as a result closing price of the Company’s common stock having exceeded $1.00 per share for 10 consecutive trading days, the Company was electing to force convert all such outstanding principal. Between February 26, 2021 and March 8, 2021, the Company issued 690,000 shares of common stock to certain holders of the 2018 Unsecured Notes for conversion of the outstanding principal of such Notes in the aggregate amount of $345,000, and on March 17, 2021, the Company issued 1,030,000 shares of common stock to the remaining holders of the 2018 Unsecured Notes for the conversion of the remaining outstanding principal in the aggregate amount of $515,000, all based upon a conversion rate of $0.50 per share. As of June 30, 2021 and December 31, 2020, total principal of $0 and $860,000, respectively, was outstanding on the 2018 Unsecured Notes. From June 18, 2019 through October 23, 2019, the Company sold 2019 Unsecured Convertible Notes (the “2019 Unsecured Notes”) totaling $2,600,000 and warrants to unaffiliated accredited investors. The 2019 Unsecured Notes bear interest at 12% per annum, and are convertible into one share of common stock, par value $0.001 per share, with the initial conversion ratio equal to $0.50 per share. The 2019 Unsecured Notes have a term of five years. On February 26, 2021, the Company issued 100,000 shares of common stock to a certain holder of the 2019 Unsecured Notes for the conversion of outstanding principal in the amount of $50,000, based upon a conversion rate of $0.50 per share. Pursuant to a letter dated June 14, 2021, the Company offered each of the holders of the 2019 Unsecured Notes the opportunity to voluntarily convert the outstanding principal into shares of common stock at conversion ratio of $0.50 per share and, if converted prior to June 30, 2021, still be paid interest through September 30, 2021. With such offer, all accrued and unpaid interest, and additional interest through September 30, 2021, would be paid in shares of common stock at a rate of $1.00 per share, in lieu of payment in cash. As a result thereof, and between June 17, 2021 and June 23, 2021, (i) the outstanding principal totaling $2,550,000 was voluntarily converted by the holders thereof into an aggregate of 5,100,000 shares of common stock of the Company at a conversion price of $0.50 per share, and (ii) all accrued and unpaid interest thereon, together with additional interest through September 30, 2021, which together totaled $229,500, was converted into an aggregate of 229,500 shares of common stock of the Company. The Company recognized a conversion inducement cost of $98,515 related to the conversion. As of June 30, 2021 and December 31, 2020, total principal of $0 and $2,600,000, respectively, was outstanding on the 2019 Unsecured Notes. There is no further liability related to the profit share due to the voluntary conversion of all of the 2019 Unsecured Notes. As of June 30, 2021, remaining scheduled principal payments due on convertible notes payable are as follows: Twelve months ended June 30, 2022 $ - 2023 20,000 $ 20,000 | Note 8 –Convertible Notes Payable The Company has the following convertible notes payable outstanding as of December 31, 2020 and 2019: December 31, December 31, 2020 2019 Secured convertible promissory notes which mature upon the retirement of the New AC Midwest Secured Debt (see Note 9) bear interest at 10% per annum, and are convertible into shares of common stock at $0.50 per share, and are secured by the assets of the Company. $ 990,000 $ 990,000 Unsecured convertible promissory notes which mature beginning on June 15, 2023 through October 31, 2023, bear interest at 12% per annum, and are convertible into shares of common stock at $0.50 per share. 860,000 860,000 Unsecured convertible promissory notes which mature beginning on June 18, 2024 through October 23, 2024, bear interest at 12% per annum, and are convertible into shares of common stock at $0.50 per share. 2,600,000 2,600,000 Total convertible notes payable before discount 4,450,000 4,450,000 Less unamortized discounts and debt issuance costs (394,878 ) (508,863 ) Total convertible notes payable 4,055,122 3,941,137 Less current portion - (990,000 ) Convertible notes payable, net of current portion $ 4,055,122 $ 2,951,137 F-40 Table of Contents As of December 31, 2020, remaining scheduled principal payments due on convertible notes payable are as follows: Twelve months ended December 31, 2021 $ - 2022 990,000 2023 860,000 2024 2,600,000 $ 4,450,000 As of December 31, 2020, the remaining future amortization of discounts are as follows: Twelve months ended December 31, Discounts 2021 $ 114,334 2022 114,334 2023 105,477 2024 60,733 $ 394,878 From July 30, 2013 through December 24, 2013, the Company sold convertible notes and warrants to unaffiliated accredited investors totaling $1,902,500. The notes bear interest at 10% per annum, are secured by the Company’s assets, and are convertible into one share of common stock, par value $0.001 per share, with the initial conversion ratio equal to $0.50 per share. The notes had an initial term of three years, but the maturity of the notes was extended during 2014 to match the retirement of the New AC Midwest Secured Debt. These securities were sold in reliance upon the exemption provided by Section 4(2) of the Securities Act and the safe harbor of Rule 506 under Regulation D promulgated under the Securities Act. Interest expense for the years ended December 31, 2020 and 2019, was $99,000 and $99,000, respectively. A discount on the notes payable of $841,342 was recorded based on the value of the warrants issued using a Black-Scholes options pricing model and was amortized over the initial five year life of the notes. Amortized interest expense for the years ended December 31, 2020 and 2019 on this discount was $0. As of December 31, 2020 and 2019, total principal of $990,000, was outstanding on these notes. See Note 16 for information on the conversion of $940,000 of the principal of these notes which have been converted into shares of common stock. On June 15, 2018, the Company issued 2018 Unsecured Convertible Notes (the “2018 Unsecured Notes”) totaling $560,000 and warrants to certain holders of the 2013 Notes in exchange for their secured 2013 Notes (see description above of the private placement offering commenced during the second quarter of 2018). The 2018 Unsecured Notes have a term of five years, bear interest at 12% per annum, and are convertible into one share of common stock, par value $0.001 per share, with the initial conversion ratio equal to $0.50 per share. For each dollar exchanged, the investor received a warrant to purchase one share of common stock of the Company at an exercise price of $0.70 per share. The 2018 Unsecured Notes may be converted at any time and from time to time in whole or in part prior to the maturity date thereof. Loss on this debt exchange was $44,036. A discount on the notes payable of $89,500 was recorded based on the value of the fair value of the note and warrants exchanged. The included warrants were valued using a Black-Scholes options pricing model. From August 31, 2018 through October 30, 2018, the Company issued additional 2018 Notes totaling $300,000 and warrants to unaffiliated accredited investors. A discount on the notes payable of $40,350 was recorded based on the fair value of the warrants issued with this note using a Black-Scholes options pricing model. Amortized interest expense for the years ended December 31, 2020 and 2019 on these discounts was $16,176 and $24,323, respectively. Interest expense for the years ended December 31, 2020 and 2019, was $103,200 and $202,200, respectively. As of December 31, 2020 and 2019, total principal of $860,000 was outstanding on the 2018 Unsecured Notes. The significant assumptions utilized for these Black-Scholes calculations consist of an expected life of equal to the expiration term of the option, historical volatility of 100% respectively, and a risk free interest rate of 3%. See Note 16 for information on the forced conversion of all of the outstanding principal of the 2018 Unsecured Notes. From June 18, 2019 through October 23, 2019, the Company sold 2019 Unsecured Convertible Notes (the “2019 Unsecured Notes”) totaling $2,600,000 and warrants to unaffiliated accredited investors. The 2019 Unsecured Notes bear interest at 12% per annum, and are convertible into one share of common stock, par value $0.001 per share, with the initial conversion ratio equal to $0.50 per share. The 2019 Unsecured Notes have a term of five years. Interest expense for the years ended December 31, 2020 and 2019 was $312,000 and $124,600, respectively. A discount on the notes payable of $488,245 was recorded based on the relative fair value of the warrants issued using a Black-Scholes options pricing model and was amortized over the initial five year life of the notes. Amortized interest expense for the years ended December 31, 2020 and 2019 on this discount was $97,809 and $37,737, respectively. As of December 31, 2020 and 2019, total principal of $2,600,000 was outstanding on the 2019 Unsecured Notes. |
Related Party
Related Party | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Related Party | ||
Note 9 - Related Party | Note 9 - Related Party Secured Note Payable On November 29, 2016, pursuant to a new restated financing agreement entered with AC Midwest Energy, LLC (“AC Midwest”) on November 1, 2016, the Company closed on a new secured note with AC Midwest (the “AC Midwest Secured Note”) in the original principal amount of $9,646,686, which was to mature on December 15, 2018. AC Midwest is wholly-owned by a stockholder of the Company. The AC Midwest Secured Note is guaranteed by MES, is non-convertible and bears interest at a rate of 15.0% per annum, payable quarterly in arrears on or before the last day of each fiscal quarter. Interest expense for the three months ended June 30, 2021 and 2020 was $10,302 and $10,301, respectively. Interest expense for the six months ended June 30, 2021 and 2020 was $20,490 and $20,238 respectively. On February 25, 2019, per Amendment No. 3 to the Amended and Restated Financing Agreement, AC Midwest agreed to waive compliance with a certain financial covenant of the Restated Financing Agreement and strike this covenant in its entirety as of the effective date of the amendment. Also, pursuant to Amendment No. 3, the parties agreed that the maturity date for the remaining principal balance due under the AC Midwest Secured Note would be extended from December 15, 2018 to August 25, 2022. The amendment was accounted for as an extinguishment in accordance with ASC 470-50 with no gain or loss recorded. As of both June 30, 2021 and December 31, 2020, total principal of $271,686 was outstanding on this note. Unsecured Note Payable The Company has the following unsecured note payable - related party outstanding as of June 30, 2021 and December 31, 2020: June 31, December 31, 2021 2020 Unsecured note payable $ 13,154,931 $ 13,154,931 Less discounts and debt issuance costs (2,280,286 ) (3,260,647 ) Total unsecured note payable 10,874,645 9,894,284 Less current portion - - Unsecured note payable, net of current portion $ 10,874,645 $ 9,894,284 On November 29, 2016, pursuant to a new restated financing agreement entered with AC Midwest on November 1, 2016, the Company closed on an unsecured note with AC Midwest (the “AC Midwest Subordinated Note”) in the principal amount of $13,000,000, which was to mature on December 15, 2020. On February 25, 2019, the Company, entered into an Unsecured Note Financing Agreement (the “Unsecured Note Financing Agreement”) with AC Midwest, pursuant to which AC Midwest issued an unsecured note in the principal amount of $13,154,931 (the “New AC Midwest Unsecured Note”), which represented the outstanding principal and accrued and unpaid interest at closing. In accordance with ASC 470-60-15-5, since the present value of the cash flows under the new debt instrument was at least ten percent different from the present value of the remaining cash flows under the terms of the original debt instrument, the Company accounted for the amendment to note as a debt extinguishment. Accordingly, the Company wrote off the remaining debt discount on the original debentures of $1,070,819. Since the amendment was with a related party defined in ASC 470-50-40-2 the Company recorded a Capital contribution of $3,412,204 on this exchange which is primarily related to the difference in fair value of the note on the date of the exchange. The Company determined that the rate of interest on the AC Midwest Subordinated Note was a below market rate of interest and determined that a discount of $6,916,687 should be recorded. This discount is based on an applicable market rate for unsecured debt for the Company of 21% and will be amortized as interested expense over the life of the loan. Amortized discount recorded as interest expense for the six months ended June 30, 2021 and 2020 was $980,360 and $985,777, respectively. As of June 30, 2021, the unamortized balance of the discount was $2,139,618 and unamortized balance of the debt issuance costs was $140,668 at June 30, 2021. The New AC Midwest Unsecured Note, which has been issued in exchange for the AC Midwest Subordinated Note which has now been cancelled, will mature on August 25, 2022 (the “Maturity Date”). It bears a zero cash interest rate. AC Midwest shall be entitled to a profit participation preference equal to 1.0 times the original principal amount (the “Profit Share”). If the original principal amount had been paid in full on or prior to August 25, 2020, AC Midwest would have been entitled to a profit participation preference equal to 0.5 times the original principal amount. The Profit Share is “non-recourse” and shall only be derived from and computed on the basis of, and paid from, Net Litigation Proceeds from claims relating to the Company’s intellectual property, Net Revenue Share and Adjusted Free Cash Flow (as such terms are defined in the Unsecured Note Financing Agreement). The Profit Share In connection with the New AC Midwest Unsecured Note the Company shall pay the principal outstanding, as well as the Profit Share, in an amount equal to 60.0% of Net Litigation Proceeds until such time as any litigation funder has been paid in full and, thereafter, in an amount equal to 75.0% of such Net Litigation Proceeds until the Unsecured Note and Profit Share have been paid in full. In addition, and within 30 days following the end of each fiscal quarter, the Company shall pay the principal outstanding and Profit Share in an aggregate amount equal to the Net Revenue Share (which means 60.0% of Net Licensing Revenue (as defined) from licensing the Company’s intellectual property) plus Adjusted Free Cash Flow until the Unsecured Note and Profit Share have been paid in full, provided, however, that such payments shall exclude the first $3,500,000 of Net Licensing Revenue and Adjusted Free Cash Flow achieved commencing with the fiscal quarter ending March 31, 2019. Any remaining principal balance due on the Unsecured Note shall be due and payable in full on the Maturity Date. The Profit Share, however, if not paid in full on or before the Maturity Date, shall remain subject to Unsecured Note Financing Agreement until full and final payment. The Company is utilizing the methodology behind the ASC 815, Derivatives and Hedging Distinguishing Liabilities from Equity The following are the changes in the profit share liabilities during the six months ended June 30, 2021 and 2020. Profit Share as of January 1, 2021 $ 2,305,308 Addition - Loss on change in fair value of profit share 249,825 Profit Share as of June 30, 2021 $ 2,555,133 Profit Share as of January 1, 2020 $ 2,328,845 Addition - Gain on change in fair value of profit share (252,390 ) Profit Share as of June 30, 2020 $ 2,076,455 Debt Repayment and Exchange Agreement On June 1, 2021, the Company, along with MES, entered into a Debt Repayment and Exchange Agreement with AC Midwest, which will repay all existing secured and unsecured debt obligations presently held by AC Midwest (the “Debt Repayment Agreement”). Pursuant to the Debt Repayment Agreement, the Company shall at closing repay the principal balance outstanding on the AC Midwest Secured Note in cash, together with any other amounts due and owing under such note, and repay the outstanding debt under the New AC Midwest Unsecured Note by paying and issuing a combination of cash and shares of common stock which AC Midwest has agreed to accept in full and complete repayment of the obligations thereunder. At closing, and with regard to the New AC Midwest Unsecured Note, the Company shall pay AC Midwest $6,577,465.30 in cash representing 50.0% of the aggregate outstanding principal balance of such note, and issue shares of common stock to AC Midwest in exchange for the remaining 50.0% of the aggregate outstanding principal balance at an exchange price equal to 100% of the offering price of common stock in the Qualifying Offering (as defined below). With regard to the Profit Share, at closing the Company shall pay AC Midwest $2,305,308.00 in cash representing the Profit Share Valuation, and issue shares of common stock for $4,026,567.76 representing the Adjusted Profit Share Valuation (as such terms are defined in the Debt Repayment Agreement) at the same exchange price indicated above. The Company has agreed to provide certain registration rights with respect to the shares issued thereunder. The closing is subject to various conditions including but not limited to the completion of an offering of equity securities resulting in net proceeds of at least $12.0 million by December 31, 2021 (the “Qualifying Offering”). In the event that the closing does not occur by December 31, 2021, either party may terminate the Debt Repayment Agreement and the existing notes with AC Midwest will continue in their current forms. Related Party Transactions Kaye Cooper Kay & Rosenberg, LLP provides certain legal services to the Company and was paid $137,500 and $100,000 for the six months ended June 30, 2021 and 2020, respectively, for legal services rendered and disbursement incurred. David M. Kaye, a Director and Secretary of the Company, is a partner of the law firm. At June 30, 2021 and December 31, 2020, $206,250 and $168,750, respectively, was owed to the firm for services rendered. | Note 9 - Related Party Secured Note Payable On November 29, 2016, pursuant to a new restated financing agreement entered with AC Midwest Energy, LLC (“AC Midwest”) on November 1, 2016, the Company closed on a new secured note with AC Midwest (the “New AC Midwest Secured Note”) in the original principal amount of $9,646,686, which was to mature on December 15, 2018. The New AC Midwest Secured Note is guaranteed by MES, is non-convertible and bears interest at a rate of 15.0% per annum, payable quarterly in arrears on or before the last day of each fiscal quarter. The New AC Midwest Secured Note is secured by all of the assets of the Company. Interest expense for the years ended December 31, 2020 and 2019 was $41,432 and $40,753, respectively. On February 25, 2019, per Amendment No. 3 to the Amended and Restate Financing Agreement, AC Midwest agreed to waive compliance with a certain financial covenant of the Restated Financing Agreement and strike this covenant in its entirety as of the effective date of the amendment. Also, pursuant to Amendment No. 3, the parties agreed that the maturity date for the remaining principal balance due under the AC Midwest Secured Note would be extended from December 15, 2018 to August 25, 2022. The amendment was accounted for as an extinguishment in accordance with ASC 470-50 with no gain or loss recorded. As of December 31, 2020 and 2019, total principal of $271,686 was outstanding on this note. Unsecured Note Payable The Company has the following unsecured note payable - related party outstanding as of December 31, 2020 and 2019: December 31, 2020 December 31, 2019 Unsecured Note Payable $ 13,154,931 $ 13,154,931 Less unamortized discounts and debt issuance costs (3,260,647 ) (5,243,033 ) Total unsecured notes payable 9,894,284 7,911,898 Less current portion - - Unsecured notes payable, net of current portion $ 9,894,284 $ 7,911,898 On November 29, 2016, pursuant to a new restated financing agreement entered with AC Midwest on November 1, 2016, the Company closed on an unsecured note with AC Midwest (the “AC Midwest Subordinated Note”) in the principal amount of $13,000,000, which was to mature on December 15, 2020. On February 25, 2019, the Company, entered into an Unsecured Note Financing Agreement (the “Unsecured Note Financing Agreement”) with AC Midwest, pursuant to which AC Midwest issued an unsecured note in the principal amount of $13,154,931 (the “New AC Midwest Unsecured Note”), which represented the outstanding principal and accrued and unpaid interest at closing. In accordance with ASC 470-60-15-5, since the present value of the cash flows under the new debt instrument was at least ten percent different from the present value of the remaining cash flows under the terms of the original debt instrument, the Company accounted for the amendment to note as a debt extinguishment. Accordingly, the Company wrote off the remaining debt discount on the original Debentures of $1,070,819. Since the amendment was with a related party defined in ASC 470-50-40-2 the Company recorded a Capital contribution of $3,412,204 on this exchange which is primarily related to the difference in fair value of the note on the date of the exchange. The Company determined that the rate of interest on the AC Midwest Subordinated Note was a below market rate of interest and determined that a discount of $6,916,687 should be recorded. This discount is based on an applicable market rate for unsecured debt for the Company of 21% and will be amortized as interested expense over the life of the loan. Amortized discount recorded as interest expense for the years ended December 31, 2020 and 2019 was $1,860,096 and $1,763,024, respectively. As of December 31, 2020 and 2019, the unamortized balance of the discount was $3,260,647 and $5,243,033, respectively. The New AC Midwest Unsecured Note, which has been issued in exchange for the AC Midwest Subordinated Note which has now been cancelled, will mature on August 25, 2022 (the “Maturity Date”). It bears a zero cash interest rate. AC Midwest shall be entitled to a profit participation preference equal to 1.0 times the original principal amount (the “Profit Share”). If the original principal amount had been paid in full on or prior to August 25, 2020, AC Midwest would have been entitled to a profit participation preference equal to 0.5 times the original principal amount. The Profit Share is “non-recourse” and shall only be derived from and computed on the basis of, and paid from, Net Litigation Proceeds from claims relating to the Company’s intellectual property, Net Revenue Share and Adjusted Free Cash Flow (as such terms are defined in the Unsecured Note Financing Agreement). The Profit Share In connection with the New AC Midwest Unsecured Note the Company shall pay the principal outstanding, as well as the Profit Share, in an amount equal to 60.0% of Net Litigation Proceeds until such time as any litigation funder has been paid in full and, thereafter, in an amount equal to 75.0% of such Net Litigation Proceeds until the Unsecured Note and Profit Share have been paid in full. In addition, and within 30 days following the end of each fiscal quarter, the Company shall pay the principal outstanding and Profit Share in an aggregate amount equal to the Net Revenue Share (which means 60.0% of Net Licensing Revenue (as defined) from licensing the Company’s intellectual property) plus Adjusted Free Cash Flow until the Unsecured Note and Profit Share have been paid in full, provided, however, that such payments shall exclude the first $3,500,000 of Net Licensing Revenue and Adjusted Free Cash Flow achieved commencing with the fiscal quarter ending March 31, 2019. Any remaining principal balance due on the Unsecured Note shall be due and payable in full on the Maturity Date. The Profit Share, however, if not paid in full on or before the Maturity Date, shall remain subject to Unsecured Note Financing Agreement until full and final payment. The Company is utilizing the methodology in ASC 815 and ASC 480 to determine how to account for the profit-sharing portion of the note payable. Although the transaction is not indexed to MEEC’s stock the profit sharing seems like a freestanding financial instrument because the profit sharing is not callable by the lender, it will be paid out past the maturity of the note payable and, the fair value will fluctuate over time based on payment predictions. The Profit Share was determined to have a fair value of $1,954,383 upon grant. The discounted cash flow model assumptions used at December 31, 2020 to calculate the Profit Share liability included: estimated term of sixteen years with between $100,000 to $350,000 paid quarterly after the first three years, and an annual market interest rate of 21%. The profit share liability will be marked to market every quarter utilizing management’s estimates. The following are the changes in the profit share liabilities during the years ended December 31, 2020 and 2019. Profit Share as of January 1, 2020 $ 2,328,845 Addition - Gain on change in fair value of profit share (23,537 ) Profit Share as of December 31, 2020 $ 2,305,308 Profit Share as of January 1, 2019 $ - Addition 1,954,383 Loss on change in fair value of profit share 374,462 Profit Share as of December 31, 2019 $ 2,328,845 Related Party Transactions Kaye Cooper Kay & Rosenberg, LLP provides certain legal services to the Company and was paid $175,275 and $329,729 in 2020 and 2019, respectively, for legal services rendered and disbursements incurred. David M. Kaye, a Director and Secretary of the Company, is a partner of the law firm. At December 31, 2020 and 2019, $168,750 and $43,750, respectively, was owed to the firm for services rendered. |
Operating Leases
Operating Leases | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Operating Leases | ||
Note 10 - Operating Leases | Note 10 - Operating Leases In 2016, the Company entered into a six-year agreement to lease trailers used in the delivery of its products. Monthly payments currently total $32,820. On January 27, 2015, the Company entered into a lease for office space in Lewis Center, Ohio, commencing February 1, 2015 which lease as amended expired in February 2020. The lease provides for the option to extend the lease for up to five additional years. Monthly rent is $1,575 through February 2020. The Company did not renew this lease. On July 1, 2015, the Company entered into a five-year lease for warehouse space in Corsicana, Texas. Rent is $3,750 monthly throughout the term of the lease. The Company is also responsible for the pro rata share of the projected monthly expenses for the property taxes. The current pro rata share is $882. The lease was extended on June 1, 2019 for five years. The Company recorded a right of use asset and an operating lease liability of $145,267. This amount represents the difference between the value from the remaining lease and the extended lease. On September 1, 2019, the Company entered into a one-year lease for office space in Grand Forks, North Dakota. Monthly rent is $590 a month through August 2020. The lease was not renewed and the Company vacated the space. Future remaining minimum lease payments under these non-cancelable leases are as follows: For the twelve months ended June 30, 2022 $ 429,760 2023 163,260 2024 33,760 Total 626,780 Less discount (25,614 ) Total lease liabilities 601,166 Less current portion (409,201 ) Operating lease obligation, net of current portion $ 191,965 The weighted average remaining lease term for operating leases is 1.6 years and the weighted average discount rate used in calculating the operating lease asset and liability is 5.0%. For the six months ended June 30, 2021, payments on lease obligations were $219,420 and amortization on the right of use assets was $200,398. For the three and six months ended June 30, 2021, the Company’s lease cost consists of the following components, each of which is included in costs and expenses within the Company’s consolidated statements of operations: Three Months Ended June 30, 2021 Six Months Ended June 30, 2021 Operating lease cost $ 101,867 $ 201,434 Short-term lease cost (1) 1,770 3,540 Total lease cost $ 103,637 $ 204,974 _____________ (1) Short-term lease costs includes any lease with a term of less than 12 months | Note 10 - Operating Leases In 2016, the Company entered into a six-year agreement to lease trailers used in the delivery of its products. Monthly payments currently total $32,820. On January 27, 2015, the Company entered into a lease for office space in Lewis Center, Ohio, commencing February 1, 2015 which lease as amended expired in February 2020. The lease provides for the option to extend the lease for up to five additional years. Monthly rent is $1,575 through February 2020. The Company did not renew this lease. On July 1, 2015, the Company entered into a five-year lease for warehouse space in Corsicana, Texas. Rent is $3,750 monthly throughout the term of the lease. The Company is also responsible for the pro rata share of the projected monthly expenses for the property taxes. The current pro rata share is $882. The lease was extended on June 1, 2019 for five years. The company recorded a right of use asset and an operating lease liability of $145,267. This amount represents the difference between the value from the remaining lease and the extended lease. On September 1, 2019, the Company entered into a one-year lease for office space in Grand Forks, North Dakota. Monthly rent is $590 a month through August 2020. This lease was not renewed and the Company vacated the space. Future remaining minimum lease payments under these non-cancelable leases are as follows: For the twelve months ended December 31 2021 $ 438,840 2022 351,100 2023 45,000 2024 11,250 Total 846,190 Less discount (43,590 ) Total lease liabilities 802,600 Less current portion (407,975 ) Operating lease obligation, net of current portion $ 394,625 The weighted average remaining lease term for operating leases is 2 years and the weighted average discount rate used in calculating the operating lease asset and liability is 5%. For the year ended December 31, 2020, payments on lease obligations were $438,840 and amortization on the right of use assets was $310,706. For the year ended December 31, 2020, the Company’s lease cost consists of the following components, each of which is included in costs and expenses within the Company’s consolidated statements of operations: Year Ended December 31, 2020 Operating lease cost $ 363,100 Short-term lease cost (1) 7,080 Total lease cost $ 370,180 (1) Short-term lease costs includes any lease with a term of less than 12 months |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Commitments and Contingencies | ||
Note 11 - Commitments and Contingencies | Note 11 - Commitments and Contingencies Fixed Price Contract The Company’s multi-year contracts with its commercial customers contain fixed prices for product. These contracts expire between 2021 and 2025 and expose the Company to the potential risks associated with rising material costs during that same period. Revenue reported during interim periods were recorded based on the facts and circumstances at the time and any differences noted when the final revenue is determined is considered to be a change in estimate for the period. Legal proceedings On July 17, 2019, the Company initiated patent litigation against certain defendants in the U.S. District Court for the District of Delaware for infringement of United States Patent Nos. 10,343,114 (the “‘114 Patent”) and 8,168,147 (the “‘147 Patent”) owned by the Company. These patents relate to the Company’s two-part Sorbent Enhancement Additive (SEA ® During 2020, each of the four major utility defendants in the above action filed petitions for Inter Partes Review with the United States Patent and Trademark Office, seeking to invalidate certain claims to the patents which are subject to the litigation. Between July 2020 and January 2021, we entered into agreements with each of the four major utility defendants in such action which included certain monetary arrangements and pursuant to which we have dismissed all claims brought against each of them and their affiliates, and such parties have withdrawn from petitions for Inter Partes Review with the United States Patent and Trademark Office. Such agreements entered into with such parties provide each of them and their affiliates with a non-exclusive license to certain Company patents (related to the Company’s two-part Sorbent Enhancement Additive (SEA®) process) for use in connection with such parties’ coal-fired power plants. The above described proceedings are continuing with respect to the other parties involved. On May 20, 2021, a U.S. District Court Magistrate Judge issued a report and recommendation that the above action should be permitted to proceed against 16 refined coal defendants named in the action directly involved in the refined coal program and operations, and be dismissed against 12 other defendants, primarily affiliated entities of the refined coal operators. Such report was issued in connection with certain motions to dismiss filed by the refined coal defendants. Such report and recommendation is not a final decision and will be reviewed, along with objections by the parties, by the District Judge for the United States District Court for the District of Delaware. Except for the foregoing disclosures, the Company is not presently aware of any other material pending legal proceedings to which the Company is a party or of which any of its property is the subject. Litigation, including patent litigation, is inherently subject to uncertainties. As such, there can be no assurance that the Company will be successful in litigating and/or settling any of these claims. | Note 11 – Commitments and Contingencies Fixed Price Contract The Company’s multi-year contracts with its commercial customers contain fixed prices for product. These contracts expire through 2020 and 2025 and expose the Company to the potential risks associated with rising material costs during that same period. Revenue reported during interim periods were recorded based on the facts and circumstances at the time and any differences noted when the final revenue is determined is considered to be a change in estimate for the period. Legal proceedings On July 17, 2019, the Company initiated patent litigation against certain defendants in the U.S. District Court for the District of Delaware for infringement of United States Patent Nos. 10,343,114 (the “‘114 Patent”) and 8,168,147 (the “‘147 Patent”) owned by the Company. These patents relate to the Company’s two-part Sorbent Enhancement Additive (SEA ® During 2020, each of the four major utility defendants in the above action filed petitions for Inter Partes Review with the United States Patent and Trademark Office, seeking to invalidate certain claims to the patents which are subject to the litigation. Between July 2020 and January 2021, we entered into agreements with each of the four major utility defendants in such action which included certain monetary arrangements and pursuant to which we have dismissed all claims brought against each of them and their affiliates, and such parties have withdrawn from petitions for Inter Partes Review with the United States Patent and Trademark Office. Such agreements entered into with such parties provide each of them and their affiliates with a non-exclusive license to certain Company patents (related to the Company’s two-part Sorbent Enhancement Additive (SEA ® The above described proceedings will continue with respect to the other parties involved. Except for the foregoing disclosures, the Company is not presently aware of any other material pending legal proceedings to which the Company is a party or of which any of its property is the subject. Litigation, including patent litigation, is inherently subject to uncertainties. As such, there can be no assurance that the Company will be successful in litigating and/or settling any of these claims. |
Stock Based Compensation
Stock Based Compensation | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Stock Based Compensation | ||
Note 12 - Stock Based Compensation | Note 12 - Stock Based Compensation Stock Based Compensation Stock based compensation consists of the amortization of common stock, stock options and warrants issued for prepaid services. For the three months ended June 30, 2021 and 2020, stock based compensation expense amounted to $223,998 and $135,109, respectively. For the six months ended June 30, 2021 and 2020, stock based compensation expense amounted to $255,908 and $249,749, respectively. Such expense is classified in selling, general and administrative expenses. Common Stock As of January 1, 2020, and pursuant to an advisory agreement dated as of November 20, 2019 and effective as of January 1, 2020 for a term of one year with a nonaffiliated third party, the Company issued 1,000,000 shares of common stock of the Company to such third party as and for the entire compensation to be paid for all services to be rendered during the term. These shares of common stock were valued at $200,000 in accordance with FASB ASC Topic 718. The fair value of the shares is being amortized to selling, general and administrative expenses within the Company’s condensed consolidated statements of operations over one year. On March 23, 2021, and pursuant to a consulting agreement dated November 1, 2020, as amended on March 19, 2021, with a nonaffiliated third party, the Company issued 500,000 shares of common stock to such party as part of its compensation thereunder. These shares of common stock were valued at $615,000 in accordance with FASB ASC Topic 718. The fair value of the shares is being amortized to selling, general and administrative expenses within the Company’s condensed consolidated statements of operations over ten months. On March 30, 2021, and pursuant to a business development agreement dated March 30, 2021 with a nonaffiliated third party, the Company issued 25,000 shares of common stock to such party for its compensation thereunder. These shares of common stock were valued at $29,250 in accordance with FASB ASC Topic 718. The fair value of the shares is being amortized to selling, general and administrative expenses within the Company’s condensed consolidated statements of operations over three months. Stock Options The Company accounts for stock-based compensation awards in accordance with the provisions of ASC 718, which addresses the accounting for employee stock options which requires that the cost of all employee stock options, as well as other equity-based compensation arrangements, be reflected in the condensed consolidated financial statements over the vesting period based on the estimated fair value of the awards. A summary of stock option activity for the six months ended June 30, 2021 is presented below: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (years) Aggregate Intrinsic Value January 1, 2021 16,218,326 $ 0.50 $ 3.57 $ 3,588,631 Grants - - - - Exercises (150,000 ) 0.75 - - Expirations - - - - June 30, 2021 16,068,326 $ 0.49 $ 3.10 $ 8,720,095 Options exercisable at: June 30, 2021 16,068,326 $ 0.49 $ 3.10 $ 8,720,095 The aggregate intrinsic value in the table above represents the total intrinsic value, based on the Company’s closing stock price of $1.02 as of June 30, 2021, which would have been received by the option holders had all option holders exercised their options as of that date. On May 1, 2021, the Company issued 15,869 shares of common stock to a certain option holder upon the cashless exercise of an option to purchase 25,000 shares of common stock at an exercise price off $0.42 based upon a market price of $1.15 per share as determined under the terms of the option. On June 30, 2021, the Company issued 125,000 shares of common stock to a certain option holder upon a cash exercise of an option to purchase 125,000 shares of common stock at an exercise price of $0.81 or $101,250 in the aggregate. | Note 12 - Stock Based Compensation Common Stock As of January 1, 2020, and pursuant to an advisory agreement dated as of November 20, 2019 and effective as of January 1, 2020 for a term of one year with a nonaffiliated third party, the Company issued 1,000,000 shares of common stock of the Company to such third party as and for the entire compensation to be paid for all services to be rendered during the term. These shares of common stock were valued at $200,000 in accordance with FASB ASC Topic 718. The fair value of the shares was amortized to selling, general and administrative expenses within the Company’s condensed consolidated statements of operations during 2020. On October 5, 2020, the Company issued 300,000 shares of common stock of the Company to a nonaffiliated third-party pursuant to a consulting agreement entered into on October 1, 2020. The value of the stock award was $102,000 and was charged to selling, general and administrative expenses in the statement of operations. Stock. Options The Company accounts for stock-based compensation awards in accordance with the provisions of ASC 718, which addresses the accounting for employee stock options which requires that the cost of all employee stock options, as well as other equity-based compensation arrangements, be reflected in the consolidated financial statements over the vesting period based on the estimated fair value of the awards. A summary of stock option activity for the years ended December 31, 2020 and 2019 is presented below: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (years) Aggregate Intrinsic Value December 31, 2018 9,161,510 $ 1.15 2.00 $ - Grants 4,700,000 0.27 5.00 - Expirations (1,308,184 ) 0.27 - - December 31, 2019 12,553,326 $ 0.55 4.02 $ 927 Grants 4,425,000 $ 0.38 4.73 $ - Exercised (1,500 ) 0.17 - - Expirations (758,500 ) 0.68 - - December 31, 2020 16,218,326 $ 0.50 3.57 $ 3,588,631 Options exercisable at: December 31, 2019 12,563,326 $ 0.55 4.02 $ 927 December 31, 2020 16,093,326 $ 0.50 3.56 $ 3,532,381 The Company utilized the Black-Scholes options pricing model to value its options granted. The assumptions used for options granted during the years ended December 31, 2020 and 2019 are as follows: December 31, 2020 December 31, 2019 Exercise price $0.19 - $0.58 $0.25-$0.27 Expected dividends 0 % 0 % Expected volatility 84%-103 % 100%-109 % Risk free interest rate 0.30-0.37 % 1.73-3 % Expected life 4.12-5 years 5 years On May 14, 2019, Frederick Van Zijl resigned as a director of the Company. In connection with such resignation, the Company has agreed to issue, and Mr. Van Zijl has agreed to accept, an aggregate of 235,184 shares of common stock of the Company in full and complete payment for service on the Board since his appointment in October 2018. Compensation of $63,500 based on the market price of the shares on the date of issuance was included in selling, general and administrative expenses within the Company’s consolidated statements of operations. On June 4, 2019, Allan T. Grantham resigned as a director of the Company. In connection with such resignation, the Company has agreed to issue, and Mr. Grantham has agreed to accept, an aggregate of 229,333 shares of common stock of the Company in full and complete payment for service on the Board for 2018 and 2019. Compensation of $55,040 based on the market price of the shares on the date of issuance was included in selling, general and administrative expenses within the Company’s consolidated statements of operations. On June 28, 2019, the Company granted nonqualified stock options to acquire an aggregate of 4,600,000 shares of the Company’s common stock under the Company’s 2017 Equity Plan to certain executive officers, employees and others. The options granted are exercisable at $0.27 per share, representing the fair market value of the common stock on the date of grant as determined under the 2017 Equity Plan. The options are fully vested and exercisable as of the date of grant and will expire five years thereafter. Based on a Black-Scholes valuation model, these options were valued at $898,207 in accordance with FASB ASC Topic 718 which was included in selling, general and administrative expenses within the Company’s consolidated statements of operations. Also on June 28, 2019, the Company extended the expiration dates of previously granted nonqualified stock options to acquire an aggregate of 4,675,000 shares of the Company’s common stock under the Company’s 2014 Equity Plan to certain executive officers, employees and others. The extended options are exercisable from $0.42 to $1.36 per share, representing the original fair market value of the common stock on the date of grant as determined under the 2014 Equity Plan. The options are fully vested and exercisable and will now expire five years from the date of the extension. Based on a Black-Scholes valuation model, the stock option modification was valued at $745,989 in accordance with FASB ASC Topic 718 which was included in selling, general and administrative expenses within the Company’s consolidated statements of operations. On December 20, 2019, the Company granted nonqualified stock options to acquire an aggregate of 100,000 shares of the Company’s common stock under the Company’s 2017 Equity Plan. The options were granted as compensation for a one year consulting agreement. The options granted are exercisable at $0.25 per share, representing the fair market value of the common stock on the date of grant as determined under the 2017 Equity Plan. The options are fully vested and exercisable as of the date of grant and will expire five years thereafter. Based on a Black-Scholes valuation model, these options were valued at $18,723 in accordance with FASB ASC Topic 718. The fair value of the option will be amortized to selling, general and administrative expenses within the Company’s consolidated statements of operations over one year. On June 15, 2020, the Company granted nonqualified stock options to acquire an aggregate of 250,000 shares of the Company’s common stock under the Company’s 2017 Equity Incentive Plan (the “2017 Plan”) to an employee. The options granted are exercisable at $0.19 per share, representing the fair market value of the common stock on the date of grant as determined under the 2017 Plan. Fifty percent of the options are fully vested and exercisable as of the date of grant and fifty percent of the options vest on April 1, 2021. The options will expire five years from the date of grant. Based on a Black-Scholes valuation model, these options were valued at $37,882 in accordance with FASB ASC Topic 718 which will be expensed over the vesting period in selling, general and administrative expenses within the Company’s consolidated statements of operations. On July 8, 2020, the Board of Directors of the Company approved an amendment to the 2017 Plan to increase the maximum number of shares of common stock that may be issued under the 2017 Plan from 8,000,000 to 12,000,000 shares. On the same date, the Company granted nonqualified stock options to the following executive officers to each acquire 500,000 shares of the Company’s common stock: Richard MacPherson (President and Chief Executive Officer), John Pavlish (Senior Vice President and Chief Technology Officer) and James Trettel (Vice President of Operations); and, also granted nonqualified stock options to the following persons to each acquire 250,000 shares of the Company’s common stock: Christopher Greenberg (Chairman of the Board) and David M. Kaye (director). All of such options were granted under the 2017 Plan and are exercisable at $0.19 per share, representing the fair market value of the common stock on the date of grant as determined under the 2017 Plan. The options are fully vested and exercisable as of the date of grant and will expire five years thereafter. Based on a Black-Scholes valuation model, these options were valued at $246,965 in accordance with FASB ASC Topic 718 which was expensed on the grant date in selling, general and administrative expenses within the Company’s consolidated statements of operations. On December 14, 2020, the Company granted nonqualified stock options to the following executive officers to each acquire 500,000 shares of the Company’s common stock: Richard MacPherson (President and Chief Executive Officer), John Pavlish (Senior Vice President and Chief Technology Officer) and James Trettel (Vice President of Operations); and, also granted nonqualified stock options to the following persons to each acquire 250,000 shares of the Company’s common stock: Christopher Greenberg (Chairman of the Board) and David M. Kaye (director); and, also granted nonqualified stock options to the following persons to acquire 125,000 and 50,000, respectively, shares of the Company’s common stock: Jami Satterthwaite and Stacey Hyatt. All of such options were granted under the 2017 Plan and are exercisable at $0.58 per share, representing the fair market value of the common stock on the date of grant as determined under the 2017 Plan. The options are fully vested and exercisable as of the date of grant and will expire five years thereafter. Based on a Black-Scholes valuation model, these options were valued at $884,264 in accordance with FASB ASC Topic 718 which was expensed on the grant date in selling, general and administrative expenses within the Company’s consolidated statements of operations. In December 2020, the Company issued 1,082 shares of common stock to a certain option holder upon the cashless exercise of an option to purchase 1,500 shares of common stock at an exercise price of $0.17 per share based upon a market value of $0.61 per share as determined under the terms of the option. |
Restatement of previously issue
Restatement of previously issued financial statements (unaudited) | 12 Months Ended |
Dec. 31, 2020 | |
Restatement of previously issued financial statements (unaudited) | |
Note 15 - Restatement of previously issued financial statements (unaudited) | Note 15 - Restatement of previously issued financial statements (unaudited) On April 13, 2020, the Company concluded that a gain on debt restructuring recognized during the first quarter of 2019 (relating to the New AC Midwest Unsecured Note) should have been accounted for as a capital transaction. Since the New AC Midwest Unsecured Note was held by a related party, the gain should have been recorded as a capital transaction under ASC 470-50-40. The profit-sharing portion also should have been bifurcated from the loan and shown separately on the Condensed Consolidated Balance Sheets of the financial statements. See Note 9. The following tables summarize the effects of the restatements on the specific items presented in the Company’s historical unaudited interim condensed consolidated financial statements previously included in the Company’s Quarterly Reports on Form 10-Q as of and for the three month period ended March 31, 2019: CONDENSED CONSOLIDATED BALANCE SHEETS MARCH 31, 2019 As previously reported Adjustment As restated LIABILITIES AND STOCKHOLDERS’ DEFICIT Profit Share liability $ - $ 1,991,940 $ 1,991,940 Unsecured note payable, net of discount and issuance costs 8,403,968 (1,981,568 ) 6,422,400 Total liabilities 14,801,425 10,372 14,811,797 Stockholders’ deficit Additional paid-in capital 42,785,990 3,412,204 46,198,194 Accumulated deficit (49,197,401 ) (3,422,576 ) (52,619,977 ) Total stockholders’ deficit (6,335,165 ) (10,372 ) (6,345,537 ) Total liabilities and stockholders’ deficit $ 8,466,260 $ - $ 8,466,260 MIDWEST ENERGY EMISSIONS CORP. AND SUBSIDIARIES FOR THE THREE MONTHS ENDED MARCH 31, 2019 As previously reported Adjustment As restated Interest expense & letter of credit fees $ 529,193 $ (27,185 ) $ 502,008 Loss on change in fair value of profit share - 37,557 37,557 Gain on debt restructuring (3,412,204 ) 3,412,204 - Total costs and expenses 423,524 3,422,576 3,846,100 Net income (loss) $ 2,363,797 $ (3,422,576 ) $ (1,058,779 ) Net loss per common share - basic and diluted: $ 0.03 $ (0.04 ) $ (0.01 ) CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 2019 As previously reported Adjustment As restated Cash flows from operating activities Net income (loss) $ 2,363,797 $ (3,422,576 ) $ (1,058,779 ) Adjustments to reconcile net loss to net cash Amortization of discount of notes payable 303,697 (27,185 ) 276,512 Loss on change in fair value of profit share - 37,557 37,557 Gain on debt restructuring (3,412,204 ) 3,412,204 - Net cash provided by (used in) operating activities $ 68,245 $ - $ 68,245 The following tables summarize the effects of the restatements on the specific items presented in the Company’s historical unaudited interim condensed consolidated financial statements previously included in the Company’s Quarterly Reports on Form 10-Q as of and for the three and six month periods ended June 30, 2019: CONDENSED CONSOLIDATED BALANCE SHEETS JUNE 30, 2019 As previously reported Adjustment As restated LIABILITIES AND STOCKHOLDERS’ DEFICIT Profit Share liability $ - $ 2,097,655 $ 2,097,655 Secured note payable 271,686 - 271,686 Unsecured note payable, net of discount and issuance costs 9,095,119 (2,179,831 ) 6,915,288 Total liabilities 16,654,136 (82,176 ) 16,571,960 Stockholders’ deficit Additional paid-in capital 44,745,926 3,412,204 48,158,130 Accumulated deficit (52,036,522 ) (3,330,028 ) (55,366,550 ) Total stockholders’ deficit (7,213,886 ) 82,176 (7,131,710 ) Total liabilities and stockholders’ deficit $ 9,440,250 $ - $ 9,440,250 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 2019 FOR THE SIX MONTHS ENDED JUNE 30, 2019 As previously reported Adjustment As restated As previously reported Adjustment As restated Interest expense & letter of credit fees $ 763,873 $ (198,263 ) $ 565,610 $ 1,293,067 $ (225,448 ) $ 1,067,619 Loss on change in fair value of profit share - 105,715 105,715 - 143,272 143,272 (Gain)/Loss on debt restructuring - - - (3,412,204 ) 3,412,204 - Total costs and expenses 5,348,871 (92,548 ) 5,256,323 5,772,394 3,330,028 9,102,422 Net loss $ (2,839,121 ) $ 92,548 $ (2,746,573 ) $ (475,324 ) $ (3,330,028 ) $ (3,805,352 ) Net loss per common share - basic and diluted: $ (0.04 ) $ (0.00 ) $ (0.04 ) $ (0.01 ) $ (0.04 ) $ (0.05 ) CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2019 As previously reported Adjustment As restated Cash flows from operating activities Net loss $ (475,324 ) $ (3,330,028 ) $ (3,805,352 ) Adjustments to reconcile net loss to net cash used in operating activities: Amortization of discount of notes payable 938,532 (225,448 ) 713,084 Loss on change in fair value of profit share - 143,272 143,272 Gain on debt restructuring (3,412,204 ) 3,412,204 - Net cash used in operating activities $ (506,674 ) $ - $ (506,674 ) The following tables summarize the effects of the restatements on the specific items presented in the Company’s historical unaudited interim condensed consolidated financial statements previously included in the Company’s Quarterly Reports on Form 10-Q as of and for the three and nine month periods ended September 30, 2019: CONDENSED CONSOLIDATED BALANCE SHEETS SEPTEMBER 30, 2019 As previously reported Adjustment As restated LIABILITIES AND STOCKHOLDERS’ DEFICIT Current liabilities Profit Share liability $ - $ 2,210,230 $ 2,210,230 Unsecured note payable, net of discount and issuance costs 9,752,882 (2,339,289 ) 7,413,593 Total liabilities 17,177,693 (129,059 ) 17,048,634 Stockholders’ deficit Additional paid-in capital 44,882,209 3,412,204 48,294,413 Accumulated deficit (52,887,063 ) (3,283,145 ) (56,170,208 ) Total stockholders’ deficit (7,928,107 ) 129,059 (7,799,048 ) Total liabilities and stockholders’ deficit $ 9,249,586 $ - $ 9,249,586 CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2019 FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2019 As previously reported Adjustment As restated As previously reported Adjustment As restated Interest expense & letter of credit fees $ 782,695 $ (159,458 ) $ 623,237 $ 2,075,761 $ (384,906 ) $ 1,690,855 Loss on change in fair value of profit share - 112,575 112,575 - 255,847 255,847 (Gain)/Loss on debt restructuring - - - (3,412,204 ) 3,412,204 - Total costs and expenses 4,446,648 (46,883 ) 4,399,765 10,219,042 3,283,145 13,502,187 Net loss $ (850,541 ) $ 46,883 $ (803,658 ) $ (1,325,865 ) $ (3,283,145 ) $ (4,609,010 ) Net loss per common share-basic and diluted: $ (0.01 ) $ - $ (0.01 ) $ (0.02 ) $ (0.04 ) $ (0.06 ) CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2019 As previously reported Adjustment As restated Cash flows from operating activities Net loss $ (1,325,865 ) $ (3,283,145 ) $ (4,609,010 ) Adjustments to reconcile net loss to net cash used in operating activities: Amortization of discount of notes payable 1,585,686 (384,906 ) 1,200,780 Loss on change in fair value of profit share - 255,847 255,847 Gain on debt restructuring (3,412,204 ) 3,412,204 - Net cash used in operating activities $ (1,304,626 ) $ - $ (1,304,626 ) CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT FOR THE MONTHS ENDED MARCH 31, 2019, THE SIX MONTHS ENDED JUNE 30, 2019 AND THE NINE MONTHS ENDED SEPTEMBER 30, 2019 (Restated) Common Stock Additional Accumulated Shares Par Value Paid-in Capital (Deficit) Total Balance - January 1, 2019 76,246,113 $ 76,246 $ 42,785,990 $ (51,483,332 ) $ (8,621,096 ) Cumulative effect of change in accounting principle related to accounting for leases - - - (77,866 ) (77,866 ) Capital contribution - - 3,412,204 - 3,412,204 Net income - - - (1,058,779 ) (1,058,779 ) Balance - March 31, 2019 76,246,113 $ 76,246 $ 46,198,194 $ (52,619,977 ) $ (6,345,537 ) Stock issued per resignation agreements 464,517 464 118,076 - 118,540 Issuance of stock options - - 898,207 - 898,207 Extension of certain stock option expiration - - 745,989 - 745,989 Issuance of warrants, recorded as discount on convertible notes payable - - 197,664 - 197,664 Net loss - - - (2,746,573 ) (2,746,573 ) Balance - June 30, 2019 76,710,630 $ 76,710 $ 48,158,130 $ (55,366,550 ) $ (7,131,710 ) Stock issued upon cashless warrant exercise 37,120 37 (37 ) - - Issuance of warrants, recorded as discount on convertible notes payable - - 136,320 - 136,320 Net loss - - - (803,658 ) (803,658 ) Balance - September 30, 2019 76,747,750 $ 76,747 $ 48,294,413 $ (56,170,208 ) $ (7,799,048 ) |
Warrants
Warrants | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Warrants | ||
Note 13 - Warrants | Note 13 - Warrants Sold and issued warrants are subject to the provisions of FASB ASC 815-10, the Company utilized a Black-Scholes options pricing model to value the warrants sold and issued. This model requires the input of highly subjective assumptions such as the expected stock price volatility and the expected period until the warrants are exercised. When calculating the value of warrants issued, the Company uses a volatility factor, a risk-free interest rate and the life of the warrant for the exercise period. From January 23, 2021 to February 16, 2021, the Company issued 705,166 shares of common stock to certain warrant holders upon the cash exercise of warrants to purchase an aggregate of 705,166 shares of common stock at an exercise price of $0.35 per share or $246,808 in the aggregate. On February 17, 2021, the Company issued 97,675 shares of common stock to a certain warrant holder upon the cashless exercise of a warrant to purchase 150,000 shares of common stock at an exercise price of $0.45 per share based upon a market value of $1.29 per share as determined under the terms of the warrant. On March 8, 2021, the Company issued an aggregate of 97,015 shares of common stock to certain warrant holders upon the cashless exercise of warrants to purchase an aggregate of 175,000 shares of common stock at an exercise price of $0.70 per share based upon market values from $1.44 to $1.63 per share as determined under the terms of the warrants. The following is a summary of the Company’s warrant activity: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (years) Aggregate Intrinsic Value January 1, 2021 5,595,378 $ 0.63 2.85 $ 314,260 Grants - Exercises (1,030,166 ) $ 0.42 - - Expirations (280,212 ) $ 0.35 - - June 30, 2021 4,285,000 $ 0.70 2.98 $ 1,371,200 Warrants exercisable at: June 30, 2021 4,285,000 $ 0.70 2.98 $ 1,371,200 The aggregate intrinsic value in the table above represents the total intrinsic value, based on the Company’s closing stock price of $1.02 as of June 30, 2021, which would have been received by the option holders had all option holders exercised their options as of that date. The following table summarizes information about common stock warrants outstanding at June 30, 2021: Outstanding and Exercisable Exercise Price Number Outstanding Weighted Average Remaining Contractual Life (years) Weighted Average Exercise Price $ 0.70 4,285,000 2.98 $ 0.70 $ 0.70 4,285,000 2.98 $ 0.70 | Note 13 - Warrants Sold and issued warrants are subject to the provisions of FASB ASC 815-10, the Company utilized a Black-Scholes options pricing model to value the warrants sold and issued. This model requires the input of highly subjective assumptions such as the expected stock price volatility and the expected period until the warrants are exercised. When calculating the value of warrants issued, the Company uses a volatility factor, a risk free interest rate and the life of the warrant for the exercise period. The following is a summary of the Company’s warrant activity: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (years) Aggregate Intrinsic Value December 31, 2018 4,105,398 $ 0.59 1.79 $ - Grants 3,600,000 0.70 5.00 - Expirations (2,015,020 ) 0.69 - - December 31, 2019 5,690,378 $ 0.63 3.72 $ - Grants - - - - Exercised (95,000 ) 0.35 - - December 31, 2020 5,595,378 $ 0.63 2.85 $ 314,260 Warrants exercisable at: December 31, 2019 5,690,378 $ 0.63 3.72 $ - December 31, 2020 5,595,378 $ 0.63 2.85 $ 314,260 The following table summarizes information about common stock warrants outstanding at December 31, 2020: Outstanding Exercisable Exercise Price Number Outstanding Weighted Average Remaining Contractual Life (years) Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price $ 0.70 4,460,000 3.44 $ 0.70 4,460,000 $ 0.70 0.45 150,000 2.92 0.45 150,000 0.45 0.35 985,378 0.13 0.35 985,378 0.35 $ 0.35-0.70 5,595,378 2.85 $ 0.63 5,595,378 $ 0.63 * 110,000 warrants exercisable at $0.35 contain dilution protections that increase the number of shares purchasable at exercise upon the issuance of securities at a price below the current exercise price. The Company utilized the Black-Scholes options pricing model. The assumptions used for warrants granted during the year ended December 31, 2019 are as follows. There were no warrants granted during the year ended December 31, 2020. December 31, 2019 Exercise price $ 0.70 Expected dividends 0 % Expected volatility 100% - 112 % Risk free interest rate 1.58% - 3 % Expected life 5 years On August 12, 2019, the Company issued 37,210 shares of common stock upon the cashless exercise of warrants to purchase 167,039 shares of common stock for $0.35 per share based on a market value of $0.45 per share as determined under the terms of the warrant. From June through October 2019, the Company issued unsecured convertible notes and five-year warrants to unaffiliated accredited investors totaling $2,600,000. The notes are convertible into shares of common stock, with the initial conversion ratio equal to $0.50 per share. The investors received warrants to purchase a total of 2,600,000 shares of common stock with an exercise price of $0.70 per share. These securities were sold in reliance upon the exemption provided by Section 4(a)(2) of the Securities Act and the safe harbor of Rule 506 under Regulation D promulgated under the Securities Act. Using a Black-Scholes Valuation model these warrants had a value of $525,142 which was recorded as a discount on the notes payable and will be amortized over the life of the associated notes payable. On October 23, 2019, and pursuant to an advisory agreement executed on that date for a term of one year with an unaffiliated third party, the Company granted such unaffiliated third party a vested three-year warrant to purchase 1,000,000 shares of common stock with an exercise price of $0.70 per share, exercisable on a cash basis only. Such warrants were issued as and for the entire compensation to paid to the advisor for all services to be rendered during the term. Based on a Black-Scholes valuation model, these options were valued at $243,294 in accordance with FASB ASC Topic 718. The fair value of the option will be amortized to selling, general and administrative expenses within the Company’s consolidated statements of operations over one year. On October 1, 2020, the Company extended the expiration date of a previously issued warrant to acquire 150,000 shares of common stock of the Company at an exercise price of $0.45 per share. Such warrant was issued to a nonaffiliated third-party providing investor relations consulting services to the Company. The warrant will now expire November 30, 2023. Based on a Black-Scholes valuation model, the warrant modification was valued at $30,573 in accordance with FASB ASC Topic 718 which was included in selling, general and administrative expenses within the Company’s consolidated statements of operations. On December 14, 2020, the Company issued 47,494 shares of common stock to a certain warrant holder upon the cashless exercise of a warrant to purchase 95,000 shares of common stock at an exercise price of $0.35 per share based upon a market value of $0.6999 per share as determined under the terms of the warrant. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income Taxes | |
Note 14 - Income Taxes | Note 14 - Income Taxes Below is breakdown of the income tax provisions for the years ended December 31: 2020 2019 Federal Current $ - $ - Deferred (1,833,000 ) (1,278,000 ) State and local Current 10,000 14,000 Deferred (251,000 ) (196,000 ) Change in valuation allowance 2,084,000 1,474,000 Income tax provision $ 10,000 $ 14,000 The expected tax expense (benefit) based on the statutory rate is reconciled with actual tax expense benefit as follows: For the Year Ended December 31, 2020 For the Year Ended December 31, 2019 U.S. federal statutory rate 21.0 % 21.0 % State taxes 4.3 % 4.3 % Other permanent and prior period adjustments 10.6 % (1.4 )% Valuation allowance (36.1 )% (24.2 )% Income tax provision (0.2 )% (0.3 )% Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows at December 31: 2020 2019 Deferred tax assets: Net operating loss carryforwards $ 7,189,000 $ 5,456,000 Stock based compensation 1,518,000 1,285,000 Other 212,000 81,000 Total deferred tax assets 8,919,000 6,822,000 Deferred tax liabilities: Property and equipment (48,000 ) (57,000 ) Other (67,000 ) (44,000 ) Total deferred tax liabilities (115,000 ) (101,000 ) Valuation Allowance (8,804,000 ) (6,721,000 ) Net deferred tax asset $ - $ - The Company has U.S. federal net operating loss carryovers of approximately $33,366,000 and $22,640,000 at December 31, 2020 and 2019, respectively, available to offset taxable net income in a given year. The Company has state net operating loss carryovers of $4,188,000 and $3,531,815 at December 31, 2020 and 2019, respectively. If not used, these net operating loss carryovers may be subject to limitation under Internal Revenue Code Section 382 should there be a greater than 50% ownership change as determined under the regulations. The Company plans on undertaking a detailed analysis of any historical and/or current Section 382 ownership changes that may limit the utilization of the net operating loss carryovers. In response to the COVID-19 pandemic, the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) was signed into law in March 2020. The CARES Act lifts certain deduction limitations originally imposed by the Tax Cuts and Jobs Act of 2017 (“2017 Tax Act”). Corporate taxpayers may carryback net operating losses ( “ In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon future generation for taxable income during the periods in which temporary differences representing net future deductible amounts become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. After consideration of all the information available, Management believes that significant uncertainty exists with respect to future realization of the deferred tax assets and has therefore established a full valuation allowance. For the years ended December 31, 2020 and 2019, the change in the valuation allowance was $2,084,000 and $1,474,000, respectively. The Company evaluated the provisions of ASC 740-10 related to the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. ASC 740-10 prescribes a comprehensive model for how a company should recognize, present, and disclose uncertain positions that the Company has taken or expects to take in its tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. Differences between tax positions taken or expected to be taken in a tax return and the net benefit recognized and measured pursuant to the interpretation are referred to as “unrecognized benefits.” A liability is recognized (or amount of net operating loss carry forward or amount of tax refundable is reduced) for unrecognized tax benefit because it represents an enterprise’s potential future obligation to the taxing authority for a tax position that was not recognized as a result of applying the provisions of ASC 740-10. If applicable, interest costs related to the unrecognized tax benefits are required to be calculated and would be classified as “Other expenses – Interest” in the statement of operations. Penalties would be recognized as a component of “General and administrative.” No interest or penalties on unpaid tax were recorded during the years ended December 31, 2020 and 2019, respectively. As of December 31, 2020 and 2019, no liability for unrecognized tax benefits was required to be reported. The Company does not expect any significant changes in its unrecognized tax benefits in the next year. |
Subsequent Events
Subsequent Events | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Subsequent Events | ||
Note 16 - Subsequent Events | Note 14 - Subsequent Events On August 9, 2021, the Company notified the remaining holders of the secured convertible promissory notes issued in 2013 that the Company would be prepaying the remaining outstanding principal balance on such notes which totals $20,000 on August 24, 2021. Such holders shall have the option to convert the outstanding principal balance into shares of common stock of the Company at a conversion rate of $0.50 per share at any time before August 18, 2021. | Note 16 – Subsequent Events See Note 11 for information on the agreements entered into between July 2020 and January 2021with each of the four major utility defendants in the patent litigation commenced in 2019, two of which agreements were entered into in January 2021 and which provide such defendants and their affiliated entities a non-exclusive license to certain Company patents (related to the Company’s two-part Sorbent Enhancement Additive (SEA ® See Note 7 for information on loan proceeds in the amount of $299,300 which the Company received on April 14, 2020 from First International Bank & Trust pursuant to the Paycheck Protection Program under the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), which was enacted on March 27, 2020. Such loan was forgiven in January 2021 pursuant to the applicable PPP requirements. From January 27, 2021 to January 31, 2021, the Company issued 494,400 shares of common stock to certain holders of convertible promissory notes issued in 2013, 2018 and 2019 as payment for accrued interest due on January 1, 2021 in the aggregate amount of $247,200, based upon a rate of $0.50 per share. From February 8, 2021 to February 15, 2021, the Company issued 1,880,000 shares of common stock to certain holders of convertible promissory notes issued in 2013 for the conversion of the outstanding principal of such notes in the aggregate amount of $940,000, based upon a conversion rate of $0.50 per share. From January 23, 2021 to February 16, 2021, the Company issued 705,166 shares of common stock to certain warrant holders upon the cash exercise of warrants to purchase an aggregate of 705,166 shares of common stock at an exercise price of $0.35 per share or $246,808 in the aggregate. On February 17, 2021, the Company issued 97,675 shares of common stock to a certain warrant holder upon the cashless exercise of a warrant to purchase 150,000 shares of common stock at an exercise price of $0.45 per share based upon a market value of $1.29 per share as determined under the terms of the warrant. On March 8, 2021, the Company issued an aggregate of 97,015 shares of common stock to certain warrant holders upon the cashless exercise of warrants to purchase an aggregate of 175,000 shares of common stock at an exercise price of $0.70 per share based upon market values from $1.44 to $1.63 per share as determined under the terms of the warrants. From February 26, 2021 to March 8, 2021, the Company issued 790,000 shares of common stock to certain holders of convertible promissory notes issued in 2018 and 2019 for the conversion of the outstanding principal of such notes in the aggregate amount of $395,000, based upon a conversion rate of $0.50per share. On March 17, 2021, as a result of the election by the Company to force convert all of the outstanding principal of certain convertible promissory notes issued in 2018 if the closing price of the Company’s common stock exceeds $1.00 per share for 10 consecutive trading days, the Company issued 1,030,000 shares of common stock to such holders for the conversion of the remaining outstanding principal of such notes in the aggregate amount of $515,000, based upon a conversion rate of $0.50 per share. On March 23, 2021, and pursuant to a consulting agreement dated November 1, 2020, as amended on March 19, 2021, with a nonaffiliated third party, the Company issued 500,000 shares of common stock to such party as part of its compensation thereunder. On March 30, 2021, and pursuant to a business development agreement dated March 30, 2021 with a nonaffiliated third party, the Company issued 25,000 shares of common stock to such party for its compensation thereunder. See Note 7 for information on a one-year secured loan in the principal amount of $200,000 which the Company received on February 25, 2020. Such loan was repaid in full in February 2021. In February 2021, the Company received second draw loan proceeds in the amount of $299,380 from First International Bank & Trust pursuant to the Paycheck Protection Program (the “Second PPP Loan”) under the CARES Act. The Second PPP Loan is in the form of a Note dated February 2, 2021, matures on April 14, 2026 and bears interest at a rate of 1.0% per annum, with one interest payment on February 2, 2022, 47 monthly consecutive principal and interest payments of $6,366.89 each, beginning March 2, 2022, and one final principal and interest payment of $6,366.92 on February 2, 2026. The principal and accrued interest under the Second PPP Loan is forgivable after eight or twenty-four weeks if the Company uses the Second PPP Loan proceeds for eligible purposes, including payroll, benefits, rent and utilities, and otherwise complies with the PPP requirements. |
Summary Of Significant Accoun_2
Summary Of Significant Accounting Policies (Policies) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Summary of Significant Accounting Policies | ||
Principles of Consolidation | The condensed consolidated financial statements include the accounts of Midwest Energy Emissions Corp. and its wholly-owned subsidiary, MES, Inc. Intercompany balances and transactions have been eliminated in consolidation. | The consolidated financial statements include the accounts of Midwest Energy Emissions Corp. and its wholly owned subsidiary, MES, Inc. Intercompany balances and transactions have been eliminated in consolidation. |
Basis of Presentation | The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of Rule 8-03 of Regulation S-X promulgated by the United States Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, these financial statements do not include all of the information and footnotes required for complete financial statements and should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 filed on April 5, 2021, from which the accompanying condensed consolidated balance sheet dated December 31, 2020 was derived. In management’s opinion, the unaudited condensed consolidated financial statements reflect all adjustments necessary to present fairly the financial position as of June 30, 2021, and results of operations, changes in stockholders’ deficit and cash flows for all periods presented. The interim results presented are not necessarily indicative of results that can be expected for a full year. | The accompanying consolidated financial statements have been prepared in accordance with the Generally Accepted Accounting Principles in the United States of America (“GAAP”). |
Use of Estimates | The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, valuation of equity issuances and disclosures of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. The Company uses estimates in accounting for, among other items, profit share liability, revenue recognition, allowance for doubtful accounts, stock-based compensation, income tax provisions, excess and obsolete inventory reserve and impairment of intellectual property. Actual results could differ from those estimates. | The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, valuation of equity issuances and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. The Company uses estimates in accounting for, among other items, revenue recognition, profit share liability, allowance for doubtful accounts, stock-based compensation, income tax provision, excess and obsolete inventory reserve and impairment of intellectual property. Actual results could differ from those estimates. |
Fair Value of Financial Instruments | The fair value hierarchy has three levels based on the inputs used to determine fair value, which are as follows: ☐ Level 1 ☐ Level 2 ☐ Level 3 — The fair value hierarchy requires the use of observable market data when available. In instances where the inputs used to measure fair value fall into different levels of the fair value hierarchy, the fair value measurement has been determined based on the lowest level input significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular item to the fair value measurement in its entirety requires judgment, including the consideration of inputs specific to the asset or liability. Cash was the only asset measured at fair value on a recurring basis by the Company at June 30, 2021 and December 31, 2020 and is considered to be Level 1. Financial instruments include cash, accounts receivable, accounts payable, customer credits and short-term debt. The carrying amounts of these financial instruments approximated fair value at June 30, 2021 and December 31, 2020 due to their short-term maturities. The fair value of the promissory notes payable at June 30, 2021 and December 31, 2020 approximated the carrying amount as the notes were recently issued at interest rates prevailing in the market and interest rates have not significantly changed as of June 30, 2021 and December 31, 2020. The fair value of the promissory notes payable was determined on a Level 2 measurement. Discounts on issued debt, as well as debt issuance costs, are amortized over the term of the individual promissory notes. The fair value of the profit share liability at June 30, 2021 and December 31, 2020 was calculated using a discounted cash flow model based on estimated future cash payments. The fair value of the profit share liability was determined on a Level 3 measurement. These values are determined using pricing models for which the assumptions utilized management’s estimates. The following tables present the Company’s assets and liabilities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy. Fair Value Measurement as of June 30, 2021 Total Level 1 Level 2 Level 3 Assets: Cash 1,689,352 1,689,352 - - Total Assets $ 1,689,352 $ 1,689,352 $ - $ - Liabilities Promissory notes 11,479,556 - 11,479,556 - Profit share liability – related party 2,555,133 - - 2,555,133 Total Liabilities $ 14,034,689 $ - $ 11,479,556 $ 2,555,133 Fair Value Measurement as of December 31, 2020 Total Level 1 Level 2 Level 3 Assets: Cash 591,019 591,019 - - Total Assets $ 591,019 $ 591,019 $ - $ - Liabilities Promissory notes 14,585,097 - 14,585,097 - Profit share liability 2,305,308 - - 2,305,308 Total Liabilities $ 16,890,405 $ - $ 14,585,097 $ 2,305,308 | The fair value hierarchy has three levels based on the inputs used to determine fair value, which are as follows: ☐ Level 1 ☐ Level 2 ☐ Level 3 — The fair value hierarchy requires the use of observable market data when available. In instances where the inputs used to measure fair value fall into different levels of the fair value hierarchy, the fair value measurement has been determined based on the lowest level input significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular item to the fair value measurement in its entirety requires judgment, including the consideration of inputs specific to the asset or liability. Cash was the only asset measured at fair value on a recurring basis by the Company at December 31, 2020 and 2019 and is considered to be Level 1. Financial instruments include cash, accounts receivable, accounts payable, customer credits and short-term debt. The carrying amounts of these financial instruments approximated fair value at December 31, 2020 and 2019 due to their short-term maturities. The fair value of the promissory notes payable at December 31, 2020 and 2019 approximated the carrying amount as the notes were recently issued at interest rates prevailing in the market and interest rates have not significantly changed as of December 31, 2020 and 2019. The fair value of the promissory notes payable was determined on a Level 2 measurement. Discounts on issued debt, as well as debt issuance costs, are amortized over the term of the individual promissory notes. The fair value of the profit share liability at December 31, 2020 was calculated using a discounted cash flow model based on estimated future cash payments. The fair value of the profit share liability was determined on a Level 3 measurement. These values are determined using pricing models for which the assumptions utilized management’s estimates. The following tables present the Company’s assets and liabilities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy. Fair Value Measurement as of December 31, 2020 Total Level 1 Level 2 Level 3 Assets: Cash $ 591,019 $ 591,019 $ - $ - Total Assets $ 591,019 $ 591,019 $ - $ - Liabilities: Promissory notes $ 14,585,097 $ - $ 14,585,097 $ - Profit share liability 2,305,308 - - 2,305,308 Total Liabilities $ 16,890,405 $ - $ 14,585,097 $ 2,305,308 Fair Value Measurement as of December 31, 2019 Total Level 1 Level 2 Level 3 Assets: Cash $ 1,499,287 $ 1,499,287 $ - $ - Total Assets $ 1,499,287 $ 1,499,287 $ - $ - Liabilities: Promissory notes $ 12,200,411 $ - $ 12,200,411 $ - Profit share liability 2,328,845 - - 2,328,845 Total Liabilities $ 14,529,256 $ - $ 12,200,411 $ 2,328,845 |
Foreign Currency Transactions | The Company’s functional currency is the United States Dollar (the “U.S. Dollar”). The Company engages in foreign currency denominated transactions with customers that operate in functional currencies other than the U.S. Dollar. Assets and liabilities denominated in foreign currencies are translated into U.S. Dollar amounts at the period-end exchange rates. Sales and purchases and income and expense transactions that are denominated in foreign currencies are translated into U.S. Dollar amounts at the prevailing rates of exchange on the transaction date. Adjustments arising from foreign currency transactions are reflected in the statement of operations. For the three and six months ended June 30, 2021 and 2020, there were no material foreign exchange gains or losses recognized by the Company in its statements of operations. | The Company’s functional currency is the United States Dollar (the “U.S. Dollar”). The Company engages in foreign currency denominated transactions with customers that operate in functional currencies other than the U.S. Dollar. Assets and liabilities denominated in foreign currencies are translated into U.S. Dollar amounts at the period-end exchange rates. Sales and purchases and income and expense transactions that are denominated in foreign currencies are translated into U.S. Dollar amounts at the prevailing rates of exchange on the transaction date. Adjustments arising from foreign currency transactions are reflected in the statement of operations. For the years ended December 31, 2020 and 2019, there were no material foreign exchange gains or losses recognized by the Company in its statements of operations. |
Revenue Recognition | The Company records revenue in accordance with ASC 606, Revenue from Contracts with Customers Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation. Revenue is recognized when the Company satisfies its performance obligation under the contract by transferring the promised product to its customer that obtains control of the product. A performance obligation is a promise in a contract to transfer a distinct product to a customer. Most of the Company’s contracts have a single performance obligation, as the promise to transfer products or services is not separately identifiable from other promises in the contract and, therefore, not distinct. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products. As such, revenue is recorded net of returns, allowances, customer discounts, and incentives. Sales and other taxes are excluded from revenues. Invoiced shipping and handling costs are included in revenue. | The Company records revenue in accordance with ASC 606, Revenue from Contracts with Customers Step 1: Identify the contract(s) with a customer. Step 2: Identify the performance obligations in the contract. Step 3: Determine the transaction price. Step 4: Allocate the transaction price to the performance obligations in the contract. Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation. Revenue is recognized when the Company satisfies its performance obligation under the contract by transferring the promised product to its customer that obtains control of the product. A performance obligation is a promise in a contract to transfer a distinct product to a customer. Most of the Company’s contracts have a single performance obligation, as the promise to transfer products or services is not separately identifiable from other promises in the contract and, therefore, not distinct. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products. As such, revenue is recorded net of returns, allowances, customer discounts, and incentives. Sales and other taxes are excluded from revenues. Invoiced shipping and handling costs are included in revenue. The adoption of this standard did not have a material impact on the Company’s financial statements. |
Disaggregation of Revenue | The Company generated revenue for the three and six months ended June 30, 2021 and 2020 by (i) delivering product to its commercial customers, (ii) completing and commissioning equipment projects at commercial customer sites and (iii) performing demonstrations of its technology at customers with the intent of entering into long term supply agreements based on the performance of the Company’s products during the demonstrations and (iv) licensing its technology to customers. Revenue for product sales is recognized at the point of time in which the customer obtains control of the product, at the time title passes to the customer upon shipment or delivery of the product based on the applicable shipping terms. Revenue for equipment sales is recognized upon commissioning and customer acceptance of the installed equipment per the terms of the purchase contract. Revenue for demonstrations and consulting services is recognized when performance obligations contained in the contract have been completed, typically the completion of necessary field work and the delivery of any required analysis per the terms of the agreement. The following table presents sales by operating segment disaggregated based on the type of product and geographic region for the three months ended June 30, 2021 and 2020. Three months ended June 30, 2021 Three months ended June 30, 2020 United States International Total United States International Total Product revenue $ 2,060,949 $ - $ 2,060,949 $ 1,809,115 $ 28,400 $ 1,837,515 License revenue 145,547 - 145,547 - - - Demonstrations & Consulting revenue 27,000 - 27,000 39,335 - 39,335 Equipment revenue 37,200 - 37,200 2,895 3,757 6,652 $ 2,270,696 $ - $ 2,270,696 $ 1,851,345 $ 32,157 $ 1,883,502 The following table presents sales by operating segment disaggregated based on the type of product and geographic region for the six months ended June 30, 2021 and 2020. Six months ended June 30, 2021 Six months ended June 30, 2020 United States International Total United States International Total Product revenue $ 4,092,050 $ - $ 4,092,050 $ 2,793,485 $ 113,600 $ 2,907,085 License revenue 1,091,094 - 1,091,094 - - - Demonstrations & Consulting revenue 61,310 - 61,310 81,892 - 81,892 Equipment revenue 52,880 - 52,880 7,444 3,757 11,201 $ 5,297,334 $ - $ 5,297,334 $ 2,882,821 $ 117,357 $ 3,000,178 | The Company generated revenue for the years ended December 31, 2020 and 2019 by (i) delivering product to its commercial customers, (ii) completing and commissioning equipment projects at commercial customer sites, (iii) performing demonstrations of its technology at customers with the intent of entering into long term supply agreements based on the performance of the Company’s products during the demonstrations and (iv) licensing its technology to customers. Revenue for product sales is recognized at the point of time in which the customer obtains control of the product, at the time title passes to the customer upon shipment or delivery of the product based on the applicable shipping terms. Revenue for licensing is recognized at the point of time in which the customer obtains the license. Lump sum payments made pursuant to agreements in which the primary consideration is a license to the company’s technology is accounted for as license revenue. Certain arrangements provide for repayment of license fees in the event the company enters into a supply agreement that results in a specified amount of sales. Nothing is recognized for this contingency. Revenue for equipment sales is recognized upon commissioning and customer acceptance of the installed equipment per the terms of the purchase contract. Revenue for demonstrations and consulting services is recognized when performance obligations contained in the contract have been completed, typically the completion of necessary field work and the delivery of any required analysis per the terms of the agreement. The following table presents sales by operating segment disaggregated based on the type of product and geographic region for the years ended December 31, 2020, and 2019. Year ended December 31, 2020 Year ended December 31, 2019 United States International Total United States International Total Product revenue $ 7,306,382 $ 113,600 $ 7,419,982 $ 10,746,715 $ 297,840 $ 11,044,555 License revenue 545,547 - 545,547 - - - Demonstrations & Consulting revenue 148,553 - 148,553 183,448 95,543 278,991 Equipment revenue 38,000 6,366 44,366 93,481 - 93,481 $ 8,038,482 $ 119,966 $ 8,158,448 $ 11,023,644 $ 393,383 $ 11,417,027 |
Income Taxes | The Company follows the asset and liability method of accounting for income taxes under FASB ASC 740, Income Taxes FASB ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. There were no unrecognized tax benefits as of June 30, 2021 and December 31, 2020. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception. In response to the COVID-19 pandemic, the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) was signed into law in March 2020. The CARES Act lifts certain deduction limitations originally imposed by the Tax Cuts and Jobs Act of 2017 (“ 2017 Tax Act In addition, the CARES Act raises the corporate charitable deduction limit to 25% of taxable income and makes qualified improvement property generally eligible for 15-year cost-recovery and 100% bonus depreciation. The enactment of the CARES Act did not result in any material adjustments to our income tax provision. | The Company follows the asset and liability method of accounting for income taxes under FASB ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. FASB ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. There were no unrecognized tax benefits as of December 31, 2020. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception. The Company may be subject to potential examination by federal, state, and city taxing authorities in the areas of income taxes. These potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions, and compliance with federal, state, and city tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months. The Company is no longer subject to tax examinations by tax authorities for years prior to 2017. |
Basic and Diluted Loss Per Common Share | Basic net loss per common share is computed using the weighted average number of common shares outstanding. Diluted loss per share reflects the potential dilution from common stock equivalents, such as stock issuable pursuant to the exercise of stock options and warrants. There were no dilutive potential common shares as of June 30, 2021 and 2020, because the Company incurred net losses and basic and diluted losses per common share are the same. The following common stock equivalents were excluded from the computation of diluted net loss per share of common stock because they were anti-dilutive. The exercise of these common stock equivalents would dilute earnings per share if the Company becomes profitable in the future. June 30, June 30, 2021 2020 Stock Options 16,068,326 12,447,326 Warrants 4,285,000 5,690,378 Convertible debt 42,000 9,414,200 Total common stock equivalents excluded from diluted net loss per share 20,395,326 27,551,904 | Basic net loss per common share is computed using the weighted average number of common shares outstanding. Diluted loss per share reflects the potential dilution from common stock equivalents, such as stock issuable pursuant to the exercise of stock options and warrants. For the years ended December 31, 2020 and 2019 basic and diluted earnings per share approximated each other. There were no dilutive potential common shares as of December 31, 2020 and 2019, because the Company incurred net losses and basic and diluted losses per common share are the same. The following common stock equivalents were excluded from the computation of diluted net loss per share of common stock because they were anti-dilutive. The exercise of these common stock equivalents would dilute earnings per share if the Company becomes profitable in the future. December 31, December 31, 2020 2019 Stock Options 16,093,326 12,553,326 Warrants 5,595,378 5,690,378 Convertible debt 9,414,200 9,351,400 Total common stock equivalents excluded from diluted net loss per share 31,102,904 27,595,104 |
Concentration of Credit Risk | Financial instruments that subject the Company to credit risk consist of cash and equivalents on deposit with financial institutions and accounts receivable. The Company’s cash as of June 30, 2021 and December 31, 2020 is maintained at high-quality financial institutions and has not incurred any losses to date. | Financial instruments that subject the Company to credit risk consist of cash and equivalents on deposit with financial institutions and accounts receivable. The Company’s cash as of December 31, 2020 is maintained at high-quality financial institutions and has not incurred any losses to date. |
Customer and Supplier Concentration | For each of the six months ended June 30, 2021 and 2020, 100% of the Company’s revenue related to fifteen and nine customers respectively. At June 30, 2021 and 2020, 100% of the Company’s accounts receivable related to nine and seven customers, respectively. For each of the six months ended June 30, 2021 and 2020, 94% and 83% of the Company’s purchases related to two suppliers, respectively. At June 30, 2021 and 2020, 61% and 59% of the Company’s accounts payable and accrued expenses related to two vendors, respectively. The Company believes there are numerous other suppliers that could be substituted should the supplier become unavailable or non-competitive. | For each of the years ended December 31, 2020 and 2019, 100% of the Company’s revenue related to thirteen and eleven customers, respectively. At December 31, 2020 and 2019, 100% of the Company’s accounts receivable related to nine and eight customers, respectively. For each of the years ended December 31, 2020 and 2019, 88% and 91% of the Company’s purchases related to two suppliers, respectively. At December 31, 2020 and 2019, 45% and 74% of the Company’s accounts payable and accrued expenses related to two vendors. The Company believes there are numerous other suppliers that could be substituted should the supplier become unavailable or non-competitive. |
Contingencies | Certain conditions may exist which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company’s management and its legal counsel assess such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company, or unasserted claims that may result in such proceedings, the Company’s legal counsel evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they arise from guarantees, in which case the guarantees would be disclosed. | Certain conditions may exist which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company’s management and its legal counsel assess such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company, or unasserted claims that may result in such proceedings, the Company’s legal counsel evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they arise from guarantees, in which case the guarantees would be disclosed. |
Recently Adopted Accounting Standards | Effective January 1, 2020, the Company adopted ASU No. 2018-07, Compensation — Stock Compensation (Topic 718) Effective January 1, 2020, the Company adopted ASU No. 2018-13, Fair Value Measurement (Topic 820) In December 2019, the FASB issued authoritative guidance intended to simplify the accounting for income taxes (ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes”). This guidance eliminates certain exceptions to the general approach to the income tax accounting model and adds new guidance to reduce the complexity in accounting for income taxes. This guidance is effective for annual periods after December 15, 2020, including interim periods within those annual periods (beginning with the quarter ended March 31, 2021 for the Company). The adoption of ASU 2019-12 did not have a material impact on its consolidated financial statements. | In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) In July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815) The guidance in ASU 2017-11 is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted, and the guidance is to be applied using a full or modified retrospective approach. The Company early adopted ASU 2017-11 and changed its method of accounting for certain warrants that were initially recorded as liabilities during the year ended December 31, 2014 on a full retrospective basis. The adoption of ASU 2017-11 did not have a material impact on the Company’s consolidated financial statements. Effective January 1, 2020, the Company adopted ASU No. 2018-07, Compensation — Stock Compensation (Topic 718) Effective January 1, 2020, the Company adopted ASU No. 2018-13, Fair Value Measurement (Topic 820) |
Intellectual properties | Intellectual property is recorded at cost and amortized over its estimated useful life of 15 years. Management reviews intellectual property for impairment when events or changes in circumstances indicate the carrying amount of an asset or asset group may not be recoverable. In the event that impairment indicators exist, a further analysis is performed and if the sum of the expected undiscounted future cash flows resulting from the use of the asset or asset group is less than the carrying amount of the asset or asset group, an impairment loss equal to the excess of the asset or asset group’s carrying value over its fair value is recorded. Management considers historical experience and all available information at the time the estimates of future cash flows are made, however, the actual cash values that could be realized may differ from those that are estimated. | |
Stock-Based Compensation | The Company accounts for stock-based compensation awards in accordance with the provisions of Accounting Standards Codification (“ASC”) 718, Compensation-Stock Compensation | |
Recently Issued Accounting Standards | Management does not believe that any recently issued, but not yet effective accounting pronouncements, when adopted, will have a material effect on the accompanying consolidated financial statements. | In December 2019, the FASB issued authoritative guidance intended to simplify the accounting for income taxes (ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes”). This guidance eliminates certain exceptions to the general approach to the income tax accounting model and adds new guidance to reduce the complexity in accounting for income taxes. This guidance is effective for annual periods after December 15, 2020, including interim periods within those annual periods. The Company is currently evaluating the potential impact of this guidance on its consolidated financial statements. Management does not believe that any recently issued, but not yet effective accounting pronouncements, when adopted, will have a material effect on the accompanying consolidated financial statements. |
Restatement of previously issued financial statements | On April 13, 2020, the Company concluded that a gain on debt restructuring recognized during the first quarter of 2019 (relating to the New AC Midwest Unsecured Note) should have been accounted for as a capital transaction. Since the New AC Midwest Unsecured Note was held by a related party, the gain should have been recorded as a capital transaction under ASC 470-50-40. The profit-sharing portion also should have been bifurcated from the loan and shown separately on the unaudited condensed consolidated balance sheets of the financial statements for the quarters ended March 31 2019, June 30, 2019 and September 30, 2019. For more information please see Note 15. | |
Leases | In February 2016, the FASB issued new guidance which requires lessees to recognize a lease liability for the obligation to make lease payments and a right-of-use asset for the right to use the underlying asset for the lease term. The accounting standard, effective January 1, 2019, requires virtually all leases to be recognized on the Balance Sheet. Effective January 1, 2019, we adopted the standard using the modified retrospective method, under which we elected the package of practical expedients and transition provisions allowing us to bring our existing operating leases onto the Consolidated Balance Sheet without adjusting comparative periods, but recognizing a cumulative-effect adjustment to the opening balance of accumulated deficit on January 1, 2019. Under the guidance, we have also elected not to separate lease and non-lease components in recognition of the lease-related assets and liabilities, as well as the related lease expense. We have operating leases for office space in two multi-tenant facilities, which are not recorded as assets and liabilities as those leases do not have terms greater than 12 months. We have an operating leases for a multi-purpose facility and bulk trailers used in operations which is recorded as an asset and liability as the lease has a terms greater than 12 months. Lease-related assets, or right-of-use assets, are recognized at the lease commencement date at amounts equal to the respective lease liabilities, adjusted for prepaid lease payments, initial direct costs, and lease incentives received. Lease-related liabilities are recognized at the present value of the remaining contractual fixed lease payments, discounted using our incremental borrowing rate. Operating lease expense is recognized on a straight-line basis over the lease term, while variable lease payments are expensed as incurred. Upon adoption of the standard on January 1, 2019, we recorded $1,339,569 of right of use assets and $1,417,435 of lease-related liabilities, with the difference charged to accumulated deficit at that date. | |
Property and Equipment | June 30, December 31, 2021 2020 Equipment & installation $ 1,965,659 $ 1,965,659 Trucking equipment 834,375 834,375 Computer equipment and software 14,768 67,126 Office equipment 5,528 27,155 Total equipment 2,820,330 2,894,315 Less: accumulated depreciation (2,785,384 ) (2,814,993 ) Construction in process 1,807,707 1,807,707 Property and equipment, net $ 1,842,653 $ 1,887,029 | Property and equipment are stated at cost. When retired or otherwise disposed, the related carrying value and accumulated depreciation are removed from the respective accounts and the net difference less any amount realized from disposition, is reflected in earnings. For consolidated financial statement purposes, equipment is recorded at cost and depreciated using the straight-line method over their estimated useful lives of 2 to 5 years. Leasehold improvements are recorded at cost and depreciated using the straight-line method over the lesser of their estimated useful lives or the remaining term of the lease. Expenditures for repairs and maintenance which do not materially extend the useful lives of property and equipment are charged to operations. Management reviews the carrying value of its property and equipment for impairment on an annual basis. |
Inventory | Inventories are stated at the lower of cost (first-in, first-out basis) or net realizable value. Inventories are periodically evaluated to identify obsolete or otherwise impaired products and are written off when management determines usage is not probable. The Company estimates the balance of excess and obsolete inventory by analyzing inventory by age using last used and original purchase date and existing sales pipeline for which the inventory could be used. As of December 31, 2020 and 2019, the Company has no valuation allowance. | |
Accounts Receivable | Trade accounts receivable are stated at the amount the Company expects to collect. The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. Management considers the following factors when determining the collectability of specific customer accounts: customer credit-worthiness, past transaction history with the customer, current economic industry trends, and changes in customer payment terms. Past due balances over 90 days and other higher risk amounts are reviewed individually for collectability. If the financial condition of the Company’s customers were to deteriorate, adversely affecting their ability to make payments, additional allowances would be required. Based on management’s assessment, the Company provides for estimated uncollectible amounts through a charge to earnings and a credit to a valuation allowance. Balances that remain outstanding after the Company has used reasonable collection efforts are written off through a charge to the valuation allowance and a credit to accounts receivable. At December 31, 2020 and 2019, the allowance for doubtful accounts was zero. | |
Cash | Cash and cash equivalents include all highly liquid monetary instruments with original maturities of three months or less when purchased. These investments are carried at cost, which approximates fair value. Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash deposits. The Company maintains its cash in institutions insured by the Federal Deposit Insurance Corporation (“FDIC”). At times, the Company’s cash and cash equivalent balances may be uninsured or in amounts that exceed the FDIC insurance limits. The Company has not experienced any loses on such accounts. At December 31, 2020 and 2019, the Company had no cash equivalents. As of December 31, 2020, approximately $91,000 of cash exceeded the FDIC insurance limits. | |
Recoverability of Long-Lived and Intangible Assets | Long-lived assets and certain identifiable intangibles held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Events relating to recoverability may include significant unfavorable changes in business conditions, recurring losses or a forecasted inability to achieve break-even operating results over an extended period. The Company evaluates the recoverability of long-lived assets based upon forecasted undiscounted cash flows. Should impairment in value be indicated, the carrying value of the long-lived and/or intangible assets would be adjusted, based on estimates of future discounted cash flows. The Company evaluated the recoverability of the carrying value of the Company’s property and equipment, right of use asset and intellectual property. No impairment charges were recognized for both of the three and six months ended June 30, 2021 and 2020. | Long-lived assets and certain identifiable intangibles held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Events relating to recoverability may include significant unfavorable changes in business conditions, recurring losses or a forecasted inability to achieve break-even operating results over an extended period. The Company evaluates the recoverability of long-lived assets based upon forecasted undiscounted cash flows. Should impairment in value be indicated, the carrying value of the long-lived and or intangible assets would be adjusted, based on estimates of future discounted cash flows. The Company evaluated the recoverability of the carrying value of the Company’s equipment. No impairment charges were recognized for the years ended December 31, 2020 and 2019, respectively. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Summary of Significant Accounting Policies | ||
Schedule of fair value assets and liabilities measured on recurring basis | Fair Value Measurement as of June 30, 2021 Total Level 1 Level 2 Level 3 Assets: Cash 1,689,352 1,689,352 - - Total Assets $ 1,689,352 $ 1,689,352 $ - $ - Liabilities Promissory notes 11,479,556 - 11,479,556 - Profit share liability – related party 2,555,133 - - 2,555,133 Total Liabilities $ 14,034,689 $ - $ 11,479,556 $ 2,555,133 Fair Value Measurement as of December 31, 2020 Total Level 1 Level 2 Level 3 Assets: Cash 591,019 591,019 - - Total Assets $ 591,019 $ 591,019 $ - $ - Liabilities Promissory notes 14,585,097 - 14,585,097 - Profit share liability 2,305,308 - - 2,305,308 Total Liabilities $ 16,890,405 $ - $ 14,585,097 $ 2,305,308 | |
Schedule of sales by operating segment | Three months ended June 30, 2021 Three months ended June 30, 2020 United States International Total United States International Total Product revenue $ 2,060,949 $ - $ 2,060,949 $ 1,809,115 $ 28,400 $ 1,837,515 License revenue 145,547 - 145,547 - - - Demonstrations & Consulting revenue 27,000 - 27,000 39,335 - 39,335 Equipment revenue 37,200 - 37,200 2,895 3,757 6,652 $ 2,270,696 $ - $ 2,270,696 $ 1,851,345 $ 32,157 $ 1,883,502 Six months ended June 30, 2021 Six months ended June 30, 2020 United States International Total United States International Total Product revenue $ 4,092,050 $ - $ 4,092,050 $ 2,793,485 $ 113,600 $ 2,907,085 License revenue 1,091,094 - 1,091,094 - - - Demonstrations & Consulting revenue 61,310 - 61,310 81,892 - 81,892 Equipment revenue 52,880 - 52,880 7,444 3,757 11,201 $ 5,297,334 $ - $ 5,297,334 $ 2,882,821 $ 117,357 $ 3,000,178 | |
Schedule of earnings per share basic and diluted | June 30, June 30, 2021 2020 Stock Options 16,068,326 12,447,326 Warrants 4,285,000 5,690,378 Convertible debt 42,000 9,414,200 Total common stock equivalents excluded from diluted net loss per share 20,395,326 27,551,904 |
Inventory (Tables)
Inventory (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Inventory | ||
Schedule of Inventory | June 30, 2021 December 31, 2020 Raw Materials $ 161,005 $ 169,803 Spare Parts 23,434 23,432 Finished goods 359,304 366,892 $ 543,743 $ 560,127 |
Property And Equipment Net (Tab
Property And Equipment Net (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Property And Equipment Net | ||
Schedule of property and equipment | June 30, December 31, 2021 2020 Equipment & installation $ 1,965,659 $ 1,965,659 Trucking equipment 834,375 834,375 Computer equipment and software 14,768 67,126 Office equipment 5,528 27,155 Total equipment 2,820,330 2,894,315 Less: accumulated depreciation (2,785,384 ) (2,814,993 ) Construction in process 1,807,707 1,807,707 Property and equipment, net $ 1,842,653 $ 1,887,029 | Property and equipment are stated at cost. When retired or otherwise disposed, the related carrying value and accumulated depreciation are removed from the respective accounts and the net difference less any amount realized from disposition, is reflected in earnings. For consolidated financial statement purposes, equipment is recorded at cost and depreciated using the straight-line method over their estimated useful lives of 2 to 5 years. Leasehold improvements are recorded at cost and depreciated using the straight-line method over the lesser of their estimated useful lives or the remaining term of the lease. Expenditures for repairs and maintenance which do not materially extend the useful lives of property and equipment are charged to operations. Management reviews the carrying value of its property and equipment for impairment on an annual basis. |
Intellectual Property (Tables)
Intellectual Property (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Property And Equipment Net | ||
Schedule of patent costs capitalized | June 30, December 31, 2021 2020 Patents $ 3,068,995 $ 3,068,995 Less: Accumulated amortization (852,499 ) (750,199 ) License, net $ 2,216,496 $ 2,318,796 | December 31 December 31 2020 2019 Patents $ 3,068,995 $ 3,068,995 Less: Accumulated amortization (750,199 ) (536,533 ) License, net $ 2,318,796 $ 2,532,462 |
Convertible Notes Payable (Tabl
Convertible Notes Payable (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Convertible Notes Payable (Tables) | ||
scheduled of principal payments due on convertible notes payable | June 30, December 31, 2021 2020 Secured convertible promissory notes which mature upon the retirement of the New AC Midwest Secured Debt (see Note 9), bear interest at 10% per annum, are convertible into shares of common stock at $0.50 per share, and are secured by the assets of the Company. $ 20,000 $ 990,000 Unsecured convertible promissory notes which mature beginning on June 15, 2023 through October 31, 2023, bear interest at 12% per annum, and are convertible into shares of common stock at $0.50 per share. - 860,000 Unsecured convertible promissory notes which mature beginning on June 18, 2024 through October 23, 2024, bear interest at 12% per annum, and are convertible into shares of common stock at $0.50 per share. - 2,600,000 Total convertible notes payable before discount 20,000 4,450,000 Less discounts and debt issuance costs - (394,878 ) Total convertible notes payable 20,000 4,055,122 Less current portion - - Convertible notes payable, net of current portion $ 20,000 $ 4,055,122 | |
Schedule of payments due on convertible notes payable | Twelve months ended June 30, 2022 $ - 2023 20,000 $ 20,000 |
Related Party (Tables)
Related Party (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Related Party (Tables) | ||
Schedule of Unsecured notes payable | June 31, December 31, 2021 2020 Unsecured note payable $ 13,154,931 $ 13,154,931 Less discounts and debt issuance costs (2,280,286 ) (3,260,647 ) Total unsecured note payable 10,874,645 9,894,284 Less current portion - - Unsecured note payable, net of current portion $ 10,874,645 $ 9,894,284 | |
Schedule of profit share liabilities | Profit Share as of January 1, 2021 $ 2,305,308 Addition - Loss on change in fair value of profit share 249,825 Profit Share as of June 30, 2021 $ 2,555,133 Profit Share as of January 1, 2020 $ 2,328,845 Addition - Gain on change in fair value of profit share (252,390 ) Profit Share as of June 30, 2020 $ 2,076,455 |
Operating Leases (Tables)
Operating Leases (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Operating Leases | ||
Schedule of future minimum lease payments | For the twelve months ended June 30, 2022 $ 429,760 2023 163,260 2024 33,760 Total 626,780 Less discount (25,614 ) Total lease liabilities 601,166 Less current portion (409,201 ) Operating lease obligation, net of current portion $ 191,965 | |
Schedule of lease cost | Three Months Ended June 30, 2021 Six Months Ended June 30, 2021 Operating lease cost $ 101,867 $ 201,434 Short-term lease cost (1) 1,770 3,540 Total lease cost $ 103,637 $ 204,974 |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Stock Based Compensation | ||
Schedule of stock option activity | Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (years) Aggregate Intrinsic Value January 1, 2021 16,218,326 $ 0.50 $ 3.57 $ 3,588,631 Grants - - - - Exercises (150,000 ) 0.75 - - Expirations - - - - June 30, 2021 16,068,326 $ 0.49 $ 3.10 $ 8,720,095 Options exercisable at: June 30, 2021 16,068,326 $ 0.49 $ 3.10 $ 8,720,095 | |
Schedule of Black sholes options |
Warrants (Tables)
Warrants (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Convertible Notes Payable | ||
Schedule of warrant | Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (years) Aggregate Intrinsic Value January 1, 2021 5,595,378 $ 0.63 2.85 $ 314,260 Grants - Exercises (1,030,166 ) $ 0.42 - - Expirations (280,212 ) $ 0.35 - - June 30, 2021 4,285,000 $ 0.70 2.98 $ 1,371,200 Warrants exercisable at: June 30, 2021 4,285,000 $ 0.70 2.98 $ 1,371,200 | |
Schedule of options pricing model | ||
Summary of common stock warrants outstanding | Outstanding and Exercisable Exercise Price Number Outstanding Weighted Average Remaining Contractual Life (years) Weighted Average Exercise Price $ 0.70 4,285,000 2.98 $ 0.70 $ 0.70 4,285,000 2.98 $ 0.70 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Convertible Notes Payable | |
Schedule of expected tax expense | |
Schedule of income tax provision | |
Schedule of Deferred income taxes |
Organization (Details Narrative
Organization (Details Narrative) - $ / shares | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Organization | |||
Common stock, shares authorized | 150,000,000 | 150,000,000 | 150,000,000 |
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 2,000,000 | 2,000,000 | 2,000,000 |
Preferred stock, par value | $ 0.001 | $ 0.001 | $ 0.001 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Total Assets | $ 8,497,774 | $ 7,376,365 | $ 9,273,238 |
Total Liabilities | 17,805,331 | 20,579,897 | 18,146,889 |
Total [Member] | |||
Cash | 1,689,352 | 591,019 | 1,499,287 |
Total Assets | 1,689,352 | 591,019 | 1,499,287 |
Promissory notes | 11,479,556 | 14,585,097 | 12,200,411 |
Profit share liability | 2,555,133 | 2,305,308 | 2,328,845 |
Total Liabilities | 14,034,689 | 16,890,405 | 14,529,256 |
Level 1 [Member] | |||
Cash | 1,689,352 | 591,019 | 1,499,287 |
Total Assets | 1,689,352 | 591,019 | 1,499,287 |
Promissory notes | 0 | 0 | 0 |
Profit share liability | 0 | 0 | 0 |
Total Liabilities | 0 | 0 | 0 |
Level 2 [Member] | |||
Cash | 0 | 0 | 0 |
Total Assets | 0 | 0 | 0 |
Promissory notes | 11,479,556 | 14,585,097 | 12,200,411 |
Profit share liability | 0 | 0 | 0 |
Total Liabilities | 11,479,556 | 14,585,097 | 12,200,411 |
Level 3 [Member] | |||
Cash | 0 | 0 | 0 |
Total Assets | 0 | 0 | 0 |
Promissory notes | 0 | 0 | 0 |
Profit share liability | 2,555,133 | 2,305,308 | 2,328,845 |
Total Liabilities | $ 2,555,133 | $ 2,305,308 | $ 2,328,845 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details 1) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Total [Member] | ||||||
Product revenue | $ 145,547 | $ 0 | $ 4,092,050 | $ 2,907,085 | $ 7,419,982 | $ 11,044,555 |
License revenue | 2,060,949 | 1,837,515 | 1,091,094 | 0 | 545,547 | 0 |
Demonstrations & Consulting revenue | 27,000 | 39,335 | 61,310 | 81,892 | 148,553 | 278,991 |
Equipment revenue | 37,200 | 6,652 | 52,880 | 11,201 | 44,366 | 93,481 |
Total | 2,270,696 | 1,883,502 | 5,297,334 | 3,000,178 | 8,158,448 | 11,417,027 |
United States [Member] | ||||||
Product revenue | 2,060,949 | 1,809,115 | 4,092,050 | 2,793,485 | 7,306,382 | 10,746,715 |
License revenue | 145,547 | 0 | 1,091,094 | 0 | 545,547 | 0 |
Demonstrations & Consulting revenue | 27,000 | 39,335 | 61,310 | 81,892 | 148,553 | 183,448 |
Equipment revenue | 37,200 | 2,895 | 52,880 | 7,444 | 38,000 | 93,481 |
Total | 2,270,696 | 1,851,345 | 5,297,334 | 2,882,821 | 8,038,482 | 11,023,644 |
International [Member] | ||||||
Product revenue | 0 | 28,400 | 0 | 113,600 | 113,600 | 297,840 |
License revenue | 0 | 0 | 0 | 0 | ||
Demonstrations & Consulting revenue | 0 | 0 | 0 | 0 | 0 | 95,543 |
Equipment revenue | 0 | 3,757 | 0 | 3,757 | 6,366 | 0 |
Total | $ 0 | $ 32,157 | $ 0 | $ 117,357 | $ 119,966 | $ 393,383 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details 2) - shares | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Total common stock equivalents excluded from diluted net loss per share | 20,395,326 | 27,551,904 | 31,102,904 | 27,595,104 |
Stock Options [Member] | ||||
Total common stock equivalents excluded from diluted net loss per share | 16,068,326 | 12,447,326 | 16,093,326 | 12,553,326 |
Warrants [Member] | ||||
Total common stock equivalents excluded from diluted net loss per share | 4,285,000 | 5,690,378 | 5,595,378 | 5,690,378 |
Convertible Debt [Member] | ||||
Total common stock equivalents excluded from diluted net loss per share | 42,000 | 9,414,200 | 9,414,200 | 9,351,400 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies (Details Narrative) | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2021integer | Jun. 30, 2020integer | Dec. 31, 2020USD ($)integer | Dec. 31, 2019integer | |
Cash exceeded FDIC | $ 91,000 | |||
January 1, 2019 [Member] | ||||
Right of use assets | 1,339,569 | |||
Lease-related liabilities | $ 1,417,435 | |||
Intellectual Property [Member] | ||||
Estimated useful lives | 15 years | |||
Maximum [Member] | ||||
Estimated useful lives | 5 years | |||
Minimum [Member] | ||||
Estimated useful lives | 2 years | |||
Two Suppliers [Member] | Purchase [Member] | ||||
Concentration risk percentage | 94.00% | 83.00% | 88.00% | 91.00% |
Revenue [Member] | Customers [Member] | ||||
Concentration risk percentage | 100.00% | 100.00% | 100.00% | 100.00% |
Number of Customers | integer | 15 | 9 | 13 | 11 |
Accounts Payable And Accrued Expenses [Member] | Two Vendors [Member] | ||||
Concentration risk percentage | 61.00% | 59.00% | 45.00% | 74.00% |
Accounts Receivable [Member] | Customers [Member] | ||||
Concentration risk percentage | 100.00% | 100.00% | 100.00% | 100.00% |
Number of Customers | integer | 9 | 7 | 9 | 8 |
Liquidity and Financial Conditi
Liquidity and Financial Condition (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Mar. 31, 2021 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Cash provided by operating activities | $ 501,755 | $ (1,325,499) | $ (1,239,085) | $ (1,576,948) | $ (1,576,948) | |
Accumulated deficit | (65,631,723) | (63,484,106) | (57,658,484) | |||
Cash | 1,689,352 | 591,019 | $ 1,499,287 | |||
Proceeds from issuance of warrants | $ 246,808 | |||||
February 2021 [Member] | ||||||
Proceeds from issuance of warrants | 246,808 | |||||
Proceeds from issuance of debt | 299,380 | |||||
March 2013 [Member] | ||||||
Debt conversion converted instrument amount | 50,000 | |||||
Principal outstanding on notes | 940,000 | |||||
March 2021 [Member] | ||||||
Principal outstanding on notes | 860,000 | |||||
Going Concern [Member] | ||||||
Cash provided by operating activities | 502,000 | 1,200,000 | ||||
Working capital | 216,000 | (984,112) | ||||
Accumulated deficit | 65,600,000 | 63,000,000 | ||||
Cash | 1,700,000 | |||||
Net loss | 2,100,000 | $ 5,800,000 | ||||
Net proceeds | 12,000,000 | |||||
Convertible notes | 4,430,000 | |||||
Principal amount | $ 4,430,000 |
Inventory (Details)
Inventory (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Inventory | |||
Raw materials | $ 161,005 | $ 169,803 | $ 223,790 |
Work in process | 43,814 | ||
Spare parts | 23,434 | 23,432 | 27,632 |
Finished goods | 359,304 | 366,892 | 218,262 |
Inventory | $ 543,743 | $ 560,127 | $ 513,498 |
Property And Equipment Net (Det
Property And Equipment Net (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Total Equipment | $ 2,820,330 | $ 2,894,315 | $ 2,982,381 |
Less: accumulated depreciation | (2,785,384) | (2,814,993) | (2,707,745) |
Construction in process | 1,807,707 | 1,807,707 | 1,807,707 |
Property and equipment, net | 1,842,653 | 1,887,029 | 2,082,343 |
Trucking Equipment [Member] | |||
Total Equipment | 834,375 | 834,375 | 922,441 |
Computer Equipment and Software [Member] | |||
Total Equipment | 14,768 | 67,126 | 67,126 |
Office Equipment [Member] | |||
Total Equipment | 5,528 | 27,155 | 27,155 |
Equipment & Installation [Member] | |||
Total Equipment | $ 1,965,659 | $ 1,965,659 | $ 1,965,659 |
Property And Equipment Net (D_2
Property And Equipment Net (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Property And Equipment Net | ||||||
Straight-line method description | The Company uses the straight-line method of depreciation over 2 to 5 years | |||||
Depreciation expense | $ 20,575 | $ 56,015 | $ 44,379 | $ 122,604 | $ 188,675 | $ 314,908 |
Intellectual Property (Details)
Intellectual Property (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Intellectual Property | |||
Patents | $ 3,068,995 | $ 3,068,995 | $ 3,068,995 |
Less: accumulated amortization | (852,499) | (750,199) | (536,533) |
License, net | $ 2,216,496 | $ 2,318,796 | $ 2,532,462 |
Intellectual Property (Details
Intellectual Property (Details Narrative) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2021USD ($)integer$ / sharesshares | Jun. 30, 2020USD ($) | Jun. 30, 2021USD ($)integer$ / sharesshares | Jun. 30, 2020USD ($) | Dec. 31, 2020USD ($)integer$ / sharesshares | Dec. 31, 2019USD ($)shares | |
Amortization expense charged to cost and expenses | $ 51,150 | $ 61,066 | $ 102,300 | $ 111,366 | $ 213,666 | $ 201,200 |
Estimated amortization cost for 2021 | 204,600 | 204,600 | 204,600 | |||
Estimated amortization cost for 2022 | 204,600 | 204,600 | 204,600 | |||
Estimated amortization cost for 2023 | 204,600 | 204,600 | 204,600 | |||
Estimated amortization cost for 2024 | 204,600 | 204,600 | 204,600 | |||
Estimated amortization cost for 2025 | $ 204,600 | $ 204,600 | $ 204,600 | |||
Shares issued | shares | 89,245,951 | 89,245,951 | 78,096,326 | 76,747,750 | ||
On April 24, 2017 [Member] | ||||||
Shares issued | shares | 925,000 | 925,000 | 925,000 | |||
Purchase price of intellectual property | $ 2,500,000 | $ 2,500,000 | ||||
Shares issued, value | $ 518,000 | $ 518,000 | $ 518,000 | |||
Shares issued, price per share | $ / shares | $ 0.56 | $ 0.56 | $ 0.56 | |||
On April 24, 2017 [Member] | EERCF [Member] | ||||||
Shares issued | shares | 628,998 | 628,998 | 628,998 | |||
Number of patent applications | integer | 42 | 42 | 42 | |||
On April 24, 2017 [Member] | Inventors designated by EERCF [Member] | ||||||
Shares issued | shares | 296,002 | 296,002 | 296,002 |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) - USD ($) | Apr. 14, 2020 | Feb. 28, 2021 | Jan. 31, 2021 | Feb. 25, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 |
Interest expenses | $ 10,302 | $ 10,301 | $ 20,490 | $ 20,238 | $ 41,432 | $ 40,753 | ||||
Paycheck Protection Program [Member] | ||||||||||
Secured loan, principal amount | $ 299,300 | |||||||||
Rate of interest | 1.00% | |||||||||
Maturity date | Apr. 14, 2022 | |||||||||
Extinguishment of debt | $ 299,300 | |||||||||
First International Bank [Member] | ||||||||||
Rate of interest | 1.00% | 8.75% | ||||||||
Proceeds from loan | $ 299,380 | |||||||||
Business Loan Agreement [Member] | MES, Inc. [Member] | ||||||||||
Repaid Principal Amount | 165,339 | |||||||||
Secured loan, principal amount | $ 200,000 | |||||||||
Term of loan | 1 year | |||||||||
Rate of interest | 8.75% | |||||||||
Maturity date | Feb. 26, 2021 | |||||||||
Interest expenses | $ 9,428 |
Convertible Notes Payable (Deta
Convertible Notes Payable (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Total convertible notes payable before discount | $ 20,000 | $ 4,450,000 | $ 4,450,000 |
Less unamortized discounts and debt issuance costs | 0 | (394,878) | (508,863) |
Total convertible notes payable | 20,000 | 4,055,122 | 3,941,137 |
Less current portion | 0 | 0 | (990,000) |
Convertible notes payable, net of current portion | 20,000 | 4,055,122 | 2,951,137 |
Secured Convertible Promissory Notes [Member] | |||
Total convertible notes payable before discount | 20,000 | 990,000 | 990,000 |
Unsecured Convertible Promissory Notes [Member] | |||
Total convertible notes payable before discount | 0 | 860,000 | 860,000 |
Unsecured Convertible Promissory Notes One [Member] | |||
Total convertible notes payable before discount | $ 0 | $ 2,600,000 | $ 2,600,000 |
Convertible Notes Payable (De_2
Convertible Notes Payable (Details 1) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Convertible Notes Payable | ||
2021 | $ 0 | |
2022 | $ 0 | 990,000 |
2023 | 20,000 | 860,000 |
2024 | 2,600,000 | |
Total | $ 20,000 | $ 4,450,000 |
Convertible Notes Payable (De_3
Convertible Notes Payable (Details 2) | 12 Months Ended |
Dec. 31, 2020USD ($) | |
2021 [Member] | |
Amortization of discounts | $ 114,334 |
2022 [Member] | |
Amortization of discounts | 114,334 |
2023 [Member] | |
Amortization of discounts | 105,477 |
2024 [Member] | |
Amortization of discounts | 60,733 |
Total [Member] | |
Amortization of discounts | $ 394,878 |
Convertible Notes Payable (De_4
Convertible Notes Payable (Details Narrative) - USD ($) | Mar. 07, 2021 | Jun. 15, 2018 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Feb. 17, 2021 | Jan. 22, 2021 | Dec. 14, 2020 |
Common stock shares issued, amount | $ 50,000 | |||||||||||
Interest expense | $ 1,120,086 | $ 650,359 | 1,795,706 | $ 1,314,747 | $ 2,657,554 | $ 2,391,395 | ||||||
Unsecured convertible notes and warrants | $ 10,874,645 | $ 10,874,645 | $ 9,894,284 | $ 7,911,898 | ||||||||
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||
Loss on debt exchange | $ 0 | $ 0 | $ (299,300) | $ 0 | ||||||||
Exercise price | $ 0.70 | $ 0.45 | $ 0.35 | $ 0.35 | ||||||||
Debt conversion | 20,000 | 20,000 | $ 4,055,122 | $ 3,941,137 | ||||||||
August 31, 2018 through October 30, 2018 [Member] | ||||||||||||
Discount on notes payable | 40,350 | |||||||||||
Principal outstanding on notes | 860,000 | |||||||||||
Amortized interest expense on note discount | 16,176 | 24,323 | ||||||||||
Interest expense | 103,200 | 202,200 | ||||||||||
Unsecured convertible notes and warrants | $ 300,000 | $ 300,000 | $ 300,000 | |||||||||
Volatility | 100.00% | |||||||||||
Risk free interest rate | 3.00% | |||||||||||
Notes 2013 [Member] | ||||||||||||
Discount on notes payable | $ 89,500 | |||||||||||
Conversion ratio | equal to $0.50 per share | |||||||||||
Unsecured convertible notes and warrants | $ 560,000 | |||||||||||
Common stock, par value | $ 0.001 | |||||||||||
Interest rate | 12.00% | |||||||||||
Debt term | 5 years | |||||||||||
Loss on debt exchange | $ 44,036 | |||||||||||
Exercise price | $ 0.70 | |||||||||||
July 30, 2013 through December 24, 2013 [Member] | ||||||||||||
Discount on notes payable | $ 841,342 | |||||||||||
Principal outstanding on notes | 990,000 | 990,000 | ||||||||||
Amortized interest expense on note discount | 0 | 0 | ||||||||||
Interest expense | $ 99,000 | 99,000 | ||||||||||
Conversion ratio | equal to $0.50 per share | equal to $0.50 per share | ||||||||||
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||
Interest rate | 10.00% | 10.00% | ||||||||||
Debt term | 5 years | 5 years | ||||||||||
Debt conversion | $ 940,000 | |||||||||||
Convertible note | $ 1,902,500 | $ 1,902,500 | 1,902,500 | |||||||||
February 26, 2021 and March 8, 2021 [Member] | ||||||||||||
Common stock shares issued, amount | $ 515,000 | 345,000 | ||||||||||
Principal outstanding on notes | $ 0 | $ 0 | ||||||||||
Common stock, par value | $ 0.50 | $ 0.50 | ||||||||||
Commen stock shares issued | 1,030,000 | 690,000 | ||||||||||
February 8, 2021 to February 15, 2021 [Member] | ||||||||||||
Common stock shares issued, amount | $ 940,000 | |||||||||||
Principal outstanding on notes | $ 20,000 | $ 20,000 | ||||||||||
Common stock, par value | $ 0.50 | $ 0.50 | ||||||||||
Commen stock shares issued | 1,880,000 | |||||||||||
June 17, 2021 and June 23, 2021 [Member] | ||||||||||||
Common stock shares issued, amount | $ 5,100,000 | |||||||||||
Convertible note | $ 2,550,000 | $ 2,550,000 | ||||||||||
Commen stock shares issued | 229,500 | |||||||||||
Conversion cost | $ 98,515 | |||||||||||
Converted amount | $ 229,500 | |||||||||||
June 18, 2019 through October 23, 2019 [Member] | ||||||||||||
Discount on notes payable | 488,245 | |||||||||||
Principal outstanding on notes | 2,600,000 | |||||||||||
Amortized interest expense on note discount | 97,809 | 37,737 | ||||||||||
Interest expense | $ 312,000 | $ 124,600 | ||||||||||
Conversion ratio | equal to $0.50 per share | equal to $0.50 per share | ||||||||||
Unsecured convertible notes and warrants | $ 2,600,000 | $ 2,600,000 | $ 2,600,000 | |||||||||
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||
Interest rate | 12.00% | 12.00% | ||||||||||
Debt term | 5 years | 5 years | ||||||||||
February 26, 2021 [Member] | ||||||||||||
Principal outstanding on notes | $ 0 | $ 0 | ||||||||||
Common stock, par value | $ 0.50 | $ 0.50 | ||||||||||
Commen stock shares issued | 100,000 |
Related party (Details)
Related party (Details) - Note Payable Related Party [Member] - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Unsecured Note Payable | $ 13,154,931 | $ 13,154,931 | $ 13,154,931 |
Less discounts and debt issuance costs | (2,280,286) | (3,260,647) | (5,243,033) |
Total unsecured note payable | 10,874,645 | 9,894,284 | 7,911,898 |
Less current portion | 0 | 0 | 0 |
Unsecured note payable, net of current portion | $ 10,874,645 | $ 9,894,284 | $ 7,911,898 |
Related party (Details 1)
Related party (Details 1) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Related Party | ||||
Profit Share, Beginning balance | $ 2,305,308 | $ 2,328,845 | $ 2,328,845 | $ 0 |
Addition | 0 | 0 | 0 | 1,954,383 |
Loss on change in fair value of profit share | 249,825 | (252,390) | (23,537) | 374,462 |
Profit Share, Ending balance | $ 2,555,133 | $ 2,076,455 | $ 2,305,308 | $ 2,328,845 |
Related party (Details Narrativ
Related party (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||
Feb. 25, 2019 | Nov. 29, 2016 | Jun. 30, 2021 | Jun. 30, 2020 | Mar. 31, 2019 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Interest expenses | $ 10,302 | $ 10,301 | $ 20,490 | $ 20,238 | $ 41,432 | $ 40,753 | ||||
Amortized discount | 1,860,096 | 1,763,024 | ||||||||
Profit Share liability description | The discounted cash flow model assumptions used at June 30, 2021 to calculate the Profit Share liability included: estimated term of sixteen years with between $100,000 to $350,000 paid quarterly starting in February 2024 | |||||||||
Unamortized balance of discount | $ 2,139,618 | 3,260,647 | 5,243,033 | |||||||
Debt issuance costs | 140,668 | 140,668 | ||||||||
Proceeds from issuance of equity securities | 12,000,000 | |||||||||
Remaining debt discount | 1,314,760 | 981,462 | $ 1,974,080 | 1,752,639 | 1,752,639 | |||||
Secured Note [Member] | ||||||||||
Principal outstanding on notes | $ 9,646,686 | 271,686 | $ 271,686 | $ 271,686 | 271,686 | |||||
Maturity Date | Dec. 15, 2018 | Aug. 25, 2022 | Aug. 25, 2022 | |||||||
Interest rate | 15.00% | 15.00% | ||||||||
Debt Repayment Agreement [Member] | ||||||||||
Profit share valuation | $ 2,305,308 | |||||||||
Profit share valuation adjusted | 4,026,567 | |||||||||
AC Midwest Unsecured Note [Member] | AC Midwest [Member] | ||||||||||
Principal outstanding on notes | $ 13,154,931 | $ 13,000,000 | 6,577,465 | $ 6,577,465 | ||||||
Percentages of remaining outstanding principal balance | 50.00% | |||||||||
Percentages of aggregate outstanding principal balance | 50.00% | |||||||||
AC Midwest Unsecured Note [Member] | ||||||||||
Principal outstanding on notes | $ 13,154,931 | $ 13,000,000 | ||||||||
Net licensing revenue | $ 3,500,000 | |||||||||
Maturity Date | Aug. 25, 2022 | Dec. 15, 2020 | ||||||||
Repayment of debt description | In connection with the New AC Midwest Unsecured Note the Company shall pay the principal outstanding, as well as the Profit Share, in an amount equal to 60.0% of Net Litigation Proceeds until such time as any litigation funder has been paid in full and, thereafter, in an amount equal to 75.0% of such Net Litigation Proceeds until the Unsecured Note and Profit Share have been paid in full. In addition, and within 30 days following the end of each fiscal quarter | In connection with the New AC Midwest Unsecured Note the Company shall pay the principal outstanding, as well as the Profit Share, in an amount equal to 60.0% of Net Litigation Proceeds until such time as any litigation funder has been paid in full and, thereafter, in an amount equal to 75.0% of such Net Litigation Proceeds until the Unsecured Note and Profit Share have been paid in full. In addition, and within 30 days following the end of each fiscal quarter | ||||||||
AC Midwest Subordinated Note [Member] | ||||||||||
Interest expenses | 985,777 | $ 980,360 | ||||||||
Remaining debt discount | 1,070,819 | $ 1,070,819 | ||||||||
Discount on debentures | 6,916,687 | 6,916,687 | 6,916,687 | |||||||
Related party debt restructuring resulting in capital contribution | $ 3,412,204 | $ 3,412,204 | ||||||||
Market rate of interest | 21.00% | 21.00% | ||||||||
David M. Kaye [Member] | ||||||||||
Related party debt | $ 206,250 | $ 206,250 | $ 168,750 | 43,750 | ||||||
MEEC [Member] | ||||||||||
Interest rate | 21.00% | 21.00% | ||||||||
Fair Value of sharing profit | $ 1,954,383 | $ 1,954,383 | ||||||||
Estimated time of profit sharing | 16 years | |||||||||
Yearly payment description | between $100,000 to $350,000 paid quarterly after the first three years | |||||||||
Kaye Cooper Kay & Rosenberg, LLP [Member] | ||||||||||
Legal services expense | $ 137,500 | $ 100,000 | $ 175,275 | $ 329,729 |
Operating Leases (Details)
Operating Leases (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Operating Leases | ||
2021 | $ 438,840 | |
2022 | $ 429,760 | 351,100 |
2023 | 163,260 | 45,000 |
2024 | 33,760 | 11,250 |
Total | 626,780 | 846,190 |
Less discount | (25,614) | (43,590) |
Total lease liabilities | 601,166 | 802,600 |
Less current portion | (409,201) | (407,975) |
Operating lease obligation, net of current portion | $ 191,965 | $ 394,625 |
Operating Leases (Details 1)
Operating Leases (Details 1) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Jun. 30, 2021 | Dec. 31, 2020 | |
Operating Leases | |||
Operating lease cost | $ 101,867 | $ 201,434 | $ 363,100 |
Short-term lease cost (1) | 1,770 | 3,540 | 7,080 |
Total lease cost | $ 103,637 | $ 204,974 | $ 370,180 |
Operating Leases (Details Narra
Operating Leases (Details Narrative) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Weighted average discount rate | 5.00% | 5.00% |
Weighted average remaining lease term | 1 year 7 months 6 days | 2 years |
Lease obligations | $ 219,420 | $ 438,840 |
Right-of-use asset, amortization | $ 200,398 | $ 310,706 |
Short Term Lease | 12 years | |
Lewis Center Office [Member] | ||
Monthly rent expenses | $ 1,575 | |
Lease commencement date | Feb. 1, 2015 | |
Lease expiry date | February 2020 | |
2016 [Member] | Trailers [Member] | ||
Monthly payments | $ 32,820 | |
July 1, 2015 [Member] | Corsicana Warehouse [Member] | ||
Lease term | five-year | |
Monthly rent expenses | $ 3,750 | |
Operating lease liability | 145,267 | |
Monthly expenses pro rata basis | $ 882 | |
September 1, 2019 [Member] | Grand Forks Office [Member] | ||
Lease term | one-year | |
Monthly rent expenses | $ 590 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) | 12 Months Ended |
Dec. 31, 2020 | |
Commercial Customers [Member] | |
Contracts expiry date, description | These contracts expire between 2021 and 2025 and expose the Company to the potential risks associated with rising material costs during that same period |
Stock Based Compensation (Detai
Stock Based Compensation (Details) - USD ($) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Number of shares | |||
Number of shares, Beginning balance | 16,218,326 | 12,553,326 | 9,161,510 |
Number of shares, Grants | 0 | 4,425,000 | 4,700,000 |
Number of shares, Exercised | (150,000) | (1,500) | |
Number of shares, Expiration | (758,500) | (1,308,184) | |
Number of shares, Ending balance | 16,068,326 | 16,218,326 | 12,553,326 |
Options exercisable, Ending balance | 16,068,326 | 16,093,326 | 12,563,326 |
Weighted Average Exercise Price | |||
Weighted Average Exercise Price, Beginning balance | $ 0.50 | $ 0.55 | $ 1.15 |
Weighted Average Exercise Price, Exercised | 0.75 | 0.17 | |
Weighted Average Exercise Price, Grants | 0.38 | 0.27 | |
Weighted Average Exercise Price, Expiration | 0.68 | 0.27 | |
Weighted Average Exercise Price, Ending balance | 0.49 | 0.50 | 0.55 |
Options exercisable, Ending balance | $ 0.49 | $ 0.50 | $ 0.55 |
Weighted Average Remaining Contractual Life (years) | |||
Weighted Average Remaining Contractual Life (years), Beginning balance | 3 years 6 months 25 days | 4 years 7 days | 2 years |
Weighted Average Remaining Contractual Life (years), Grants | 4 years 8 months 23 days | 5 years | |
Weighted Average Remaining Contractual Life (years), Ending balance | 3 years 1 month 6 days | 3 years 6 months 25 days | 4 years 7 days |
Options exercisable, Ending balance | 3 years 1 month 6 days | 3 years 6 months 21 days | 4 years 7 days |
Aggregate Intrinsic Value | |||
Aggregate Intrinsic Value, Beginning balance | $ 3,588,631 | $ 927 | |
Aggregate Intrinsic Value, Ending balance | 8,720,095 | 3,588,631 | $ 927 |
Options exercisable, Ending balance, Intrinsic value | $ 8,720,095 | $ 3,532,381 | $ 927 |
Stock Based Compensation (Det_2
Stock Based Compensation (Details 1) - $ / shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Stock Options [Member] | ||
Expected life | 5 years | |
Expected dividends | 0.00% | 0.00% |
Stock Options [Member] | Minimum [Member] | ||
Exercise price | $ 0.19 | $ 0.25 |
Expected volatility | 84.00% | 100.00% |
Risk free interest rate | 0.30% | 1.73% |
Expected life | 4 years 1 month 13 days | |
Stock Options [Member] | Maximum [Member] | ||
Exercise price | $ 0.58 | $ 0.27 |
Expected volatility | 103.00% | 109.00% |
Risk free interest rate | 0.37% | 3.00% |
Expected life | 5 years |
Stock Based Compensation (Det_3
Stock Based Compensation (Details Narrative) - USD ($) | Mar. 30, 2021 | Mar. 23, 2021 | Mar. 08, 2021 | Feb. 15, 2021 | Jan. 31, 2021 | Dec. 14, 2020 | Jun. 04, 2019 | May 14, 2019 | Mar. 17, 2021 | Feb. 17, 2021 | Feb. 16, 2021 | Jul. 08, 2020 | Jun. 15, 2020 | Dec. 20, 2019 | Jun. 28, 2019 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2020 | Jun. 30, 2020 | Sep. 30, 2019 | Jun. 30, 2021 | Jun. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2020 | Dec. 31, 2019 |
Stock based compensation | $ 223,998 | $ 369,427 | $ 135,109 | $ 0 | $ 255,908 | $ 249,749 | $ 1,762,736 | $ 619,176 | |||||||||||||||||
Exercise price | $ 0.50 | $ 0.50 | $ 0.50 | $ 0.50 | $ 0.45 | $ 0.35 | |||||||||||||||||||
Extension of certain stock option expiration | $ 745,989 | ||||||||||||||||||||||||
Debt conversion description | as a result of the election by the Company to force convert all of the outstanding principal of certain convertible promissory notes issued in 2018 if the closing price of the Company’s common stock exceeds $1.00 per share for 10 consecutive trading days | ||||||||||||||||||||||||
Common stock shares issued, amount | $ 50,000 | ||||||||||||||||||||||||
Stock Issued During Period, Value | $ 395,000 | $ 940,000 | $ 247,200 | $ 515,000 | $ 246,808 | $ 644,250 | |||||||||||||||||||
Nonqualified Stock Options[Member] | |||||||||||||||||||||||||
Exercise price | $ 0.19 | $ 0.25 | $ 0.27 | ||||||||||||||||||||||
Common stock shares issued for services | 25,000 | 500,000 | 250,000 | 100,000 | 4,600,000 | ||||||||||||||||||||
Debt conversion description | The options granted are exercisable at $0.19 per share, representing the fair market value of the common stock on the date of grant as determined under the 2017 Plan. Fifty percent of the options are fully vested and exercisable as of the date of grant and fifty percent of the options vest on April 1, 2021 | The options granted are exercisable at $0.25 per share, representing the fair market value of the common stock on the date of grant as determined under the 2017 Equity Plan. The options are fully vested and exercisable as of the date of grant and will expire five years thereafter | The options granted are exercisable at $0.27 per share, representing the fair market value of the common stock on the date of grant as determined under the 2017 Equity Plan. The options are fully vested and exercisable as of the date of grant and will expire five years thereafter | ||||||||||||||||||||||
Stock Issued During Period, Value | $ 29,250 | $ 615,000 | $ 37,882 | $ 18,723 | $ 898,207 | ||||||||||||||||||||
Board of Directors [Member] | |||||||||||||||||||||||||
Exercise price | $ 0.58 | $ 0.19 | |||||||||||||||||||||||
General and administrative expenses | $ 884,264 | $ 246,965 | |||||||||||||||||||||||
Vested and exercisable expire | 5 years | 5 years | |||||||||||||||||||||||
Stock options descripton | the Company granted nonqualified stock options to the following executive officers to each acquire 500,000 shares of the Company’s common stock: Richard MacPherson (President and Chief Executive Officer), John Pavlish (Senior Vice President and Chief Technology Officer) and James Trettel (Vice President of Operations); and, also granted nonqualified stock options to the following persons to each acquire 250,000 shares of the Company’s common stock: Christopher Greenberg (Chairman of the Board) and David M. Kaye (director); and, also granted nonqualified stock options to the following persons to acquire 125,000 and 50,000, respectively | the Company approved an amendment to the 2017 Plan to increase the maximum number of shares of common stock that may be issued under the 2017 Plan from 8,000,000 to 12,000,000 shares. On the same date, the Company granted nonqualified stock options to the following executive officers to each acquire 500,000 shares of the Company’s common stock: Richard MacPherson (President and Chief Executive Officer), John Pavlish (Senior Vice President and Chief Technology Officer) and James Trettel (Vice President of Operations); and, also granted nonqualified stock options to the following persons to each acquire 250,000 shares of the Company’s common stock: Christopher Greenberg (Chairman of the Board) and David M. Kaye (director) | |||||||||||||||||||||||
Stock Options [Member] | |||||||||||||||||||||||||
Exercise price | $ 0.81 | ||||||||||||||||||||||||
Common stock shares issued | 125,000 | ||||||||||||||||||||||||
Stock Issued During Period, Value | $ 101,250 | ||||||||||||||||||||||||
May 1, 2021 [Member] | |||||||||||||||||||||||||
Exercise price | $ 0.42 | ||||||||||||||||||||||||
Stock option, shares | 25,000 | ||||||||||||||||||||||||
Common stock shares issued | 15,869 | ||||||||||||||||||||||||
Market value per share | $ 1.15 | ||||||||||||||||||||||||
January 1, 2020 [Member] | |||||||||||||||||||||||||
Common stock shares issued for services | 1,000,000 | ||||||||||||||||||||||||
Stock Issued During Period, Value | $ 200,000 | ||||||||||||||||||||||||
Frederick Van Zijl [Member] | |||||||||||||||||||||||||
Compensation Included included in selling, general and administrative expenses | $ 63,500 | ||||||||||||||||||||||||
Common stock shares issued for services | 235,184 | ||||||||||||||||||||||||
Allan T. Grantham [Member] | |||||||||||||||||||||||||
Compensation Included included in selling, general and administrative expenses | $ 55,040 | ||||||||||||||||||||||||
Common stock shares issued for services | 229,333 | ||||||||||||||||||||||||
Non affiliated Third Party [Member] | October 5, 2020 [Member] | |||||||||||||||||||||||||
Common stock shares issued | 300,000 | ||||||||||||||||||||||||
Common stock shares issued, amount | $ 102,000 | ||||||||||||||||||||||||
Intrinsic Value [Member] | |||||||||||||||||||||||||
Exercise price | $ 0.17 | ||||||||||||||||||||||||
Stock option, shares | 1,500 | ||||||||||||||||||||||||
Common stock shares issued | 1,082 | ||||||||||||||||||||||||
Market value per share | $ 0.61 | ||||||||||||||||||||||||
Common stock price per share | $ 1.02 | $ 1.02 | |||||||||||||||||||||||
2014 Equity Plan [Member] | |||||||||||||||||||||||||
common stock aggregate acquire shares | 4,675,000 | ||||||||||||||||||||||||
Extension of certain stock option expiration | $ 745,989 | ||||||||||||||||||||||||
Debt conversion description | The extended options are exercisable from $0.42 to $1.36 per share, representing the original fair market value of the common stock on the date of grant as determined under the 2014 Equity Plan |
Warrants (Details)
Warrants (Details) - USD ($) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Weighted Average Exercise Price | |||
Weighted Average Exercise Price, Expirations | $ 0.68 | $ 0.27 | |
Aggregate Intrinsic Value | |||
Aggregate Intrinsic Value, Beginning balance | $ 3,588,631 | $ 927 | |
Warrants [Member] | |||
Number of Shares | |||
Number of warrants, Beginning balance | 5,595,378 | 5,690,378 | 4,105,398 |
Number of warrants, grants | 0 | 0 | 3,600,000 |
Number of warrants, Exercises | (1,030,166) | ||
Number of warrants, Expiration | (280,212) | (95,000) | (2,015,020) |
Number of warrants, Ending balance | 4,285,000 | 5,595,378 | 5,690,378 |
Warrants Exercisable, Ending balance | 4,285,000 | 5,595,378 | 5,690,378 |
Weighted Average Exercise Price | |||
Weighted Average Exercise Price, Beginning balance | $ 0.63 | $ 0.63 | $ 0.59 |
Weighted Average Exercise Price, Grants | 0 | 0.70 | |
Weighted Average Exercise Price, Exercises | 0.42 | ||
Weighted Average Exercise Price, Expirations | 0.35 | 0.35 | 0.69 |
Weighted Average Exercise Price, Ending balance | 0.70 | 0.63 | 0.63 |
Weighted Average Exercise Price, Exercisable | $ 0.70 | $ 0.63 | $ 0.63 |
Weighted Average Remaining Contractual Life (years) | |||
Beginning Balance | 2 years 10 months 6 days | 3 years 8 months 19 days | 1 year 9 months 14 days |
Weighted Average Remaining Contractual Life years, granted | 5 years | ||
Weighted Average Remaining Contractual Life years, exercisable | 2 years 11 months 23 days | 2 years 10 months 6 days | 3 years 8 months 19 days |
Ending Balance | 2 years 11 months 23 days | 2 years 10 months 6 days | 3 years 8 months 19 days |
Aggregate Intrinsic Value | |||
Warrants exercisable | $ 1,371,200 | $ 314,260 | $ 0 |
Aggregate Intrinsic Value, Beginning balance | 314,260 | 0 | 0 |
Aggregate Intrinsic Value, Ending balance | $ 1,371,200 | $ 314,260 | $ 0 |
Warrants (Details 1)
Warrants (Details 1) - $ / shares | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Warrants [Member] | ||
Weighted Average Remaining Contractual Life (years) | 2 years 11 months 23 days | 2 years 10 months 6 days |
Number outstanding | 4,285,000 | 5,595,378 |
Exercise Price | $ 0.70 | |
Number Exercisable | 5,595,378 | |
Weighted Average Exercise Price Outstanding | $ 0.63 | |
Weighted Average Exercise Price Exercisable | $ 0.70 | 0.63 |
Warrants [Member] | Minimum [Member] | ||
Exercise Price | 0.35 | |
Warrants [Member] | Maximum [Member] | ||
Exercise Price | $ 0.70 | |
Warrant One [Member] | ||
Weighted Average Remaining Contractual Life (years) | 2 years 11 months 23 days | 3 years 5 months 8 days |
Number outstanding | 4,285,000 | 4,460,000 |
Exercise Price | $ 0.70 | $ 0.70 |
Number Exercisable | 4,460,000 | |
Weighted Average Exercise Price Outstanding | $ 0.70 | |
Weighted Average Exercise Price Exercisable | $ 0.70 | $ 0.70 |
Warrant Two [Member] | ||
Weighted Average Remaining Contractual Life (years) | 2 years 11 months 1 day | |
Number outstanding | 150,000 | |
Exercise Price | $ 0.45 | |
Number Exercisable | 150,000 | |
Weighted Average Exercise Price Outstanding | $ 0.45 | |
Weighted Average Exercise Price Exercisable | $ 0.45 | |
Warrant Three [Member] | ||
Weighted Average Remaining Contractual Life (years) | 1 month 17 days | |
Number outstanding | 985,378 | |
Exercise Price | $ 0.35 | |
Number Exercisable | 985,378 | |
Weighted Average Exercise Price Outstanding | $ 0.35 | |
Weighted Average Exercise Price Exercisable | $ 0.35 |
Warrants (Details 2)
Warrants (Details 2) - Warrants [Member] | 12 Months Ended |
Dec. 31, 2019$ / shares | |
Exercise price | $ 0.70 |
Expected dividends | 0.00% |
Expected life | 5 years |
Minimum [Member] | |
Expected volatility | 100.00% |
Risk free interest rate | 1.58% |
Maximum [Member] | |
Expected volatility | 112.00% |
Risk free interest rate | 3.00% |
Warrants (Details Narrative)
Warrants (Details Narrative) - USD ($) | Mar. 08, 2021 | Feb. 17, 2021 | Dec. 14, 2020 | Aug. 12, 2019 | Jan. 23, 2021 | Oct. 23, 2019 | Mar. 31, 2021 | Oct. 31, 2019 | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Mar. 07, 2021 | Jan. 22, 2021 |
Warrants descriptions | 110,000 warrants exercisable at $0.35 contain dilution protections that increase the number of shares purchasable at exercise upon the issuance of securities at a price below the current exercise price. | ||||||||||||
Warrants issued upon cashless exercise of warrants | 97,015 | 97,675 | 47,494 | ||||||||||
Warrants purchase upon common stock shares | 175,000 | 150,000 | 95,000 | 705,166 | |||||||||
Warrants exercise price | $ 0.45 | $ 0.35 | $ 0.70 | $ 0.35 | |||||||||
Warrants, market value | $ 1.29 | 0.6999 | |||||||||||
Fair value of warrant exercise | $ 246,808 | ||||||||||||
Unsecured convertible notes and warrants | $ 10,874,645 | $ 9,894,284 | $ 7,911,898 | ||||||||||
Stock issued upon cashless warrant exercise | 16,068,326 | 16,093,326 | 12,563,326 | ||||||||||
Fair value of warrants | $ 246,808 | ||||||||||||
Maximum [Member] | |||||||||||||
Warrants, market value | $ 1.63 | 0.6999 | |||||||||||
Minimum [Member] | |||||||||||||
Warrants, market value | $ 1.44 | $ 0.6999 | |||||||||||
Warrants [Member] | |||||||||||||
Warrants exercise price | $ 0.70 | $ 0.70 | |||||||||||
Warrants, market value | $ 0.45 | ||||||||||||
Discount on notes payable | $ 243,294 | $ 525,142 | |||||||||||
Warrants exercisable | 1,000,000 | 2,600,000 | |||||||||||
Unsecured convertible notes and warrants | $ 2,600,000 | ||||||||||||
Conversion ratio | equal to $0.50 per share | ||||||||||||
Common stock price per share | $ 0.35 | ||||||||||||
Stock issued upon cashless warrant exercise | 37,210 | ||||||||||||
Warrants to purchase common shares | 167,039 | ||||||||||||
Warrants [Member] | October 1, 2020 [Member] | |||||||||||||
Warrants exercise price | $ 0.45 | ||||||||||||
Warrant acquire upon common stock shares | 150,000 | ||||||||||||
Fair value of warrants | $ 30,573 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Change in valuation allowance | $ 2,084,000 | $ 1,474,000 |
Income tax provision (benefit) | 10,000 | 14,000 |
Federal [Member] | ||
Current | 0 | 0 |
Deferred | (1,833,000) | (1,278,000) |
State and local [Member] | ||
Deferred | (251,000) | (196,000) |
Current | $ 10,000 | $ 14,000 |
Income Taxes (Details 1)
Income Taxes (Details 1) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Taxes | ||
U.S. federal statutory rate | 21.00% | 21.00% |
State taxes | 4.30% | 4.30% |
Other permanent and prior period adjustments | 10.60% | (1.40%) |
Valuation allowance | (36.10%) | (24.20%) |
Income tax provision | (0.20%) | (0.30%) |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 7,189,000 | $ 5,456,000 |
Stock based compensation | 1,518,000 | 1,285,000 |
Other | 212,000 | 81,000 |
Total deferred tax assets | 8,919,000 | 6,822,000 |
Deferred tax liabilities: | ||
Property and equipment | (48,000) | (57,000) |
Other | (67,000) | (44,000) |
Total deferred tax liabilities | (115,000) | (101,000) |
Valuation Allowance | (8,804,000) | (6,721,000) |
Net deferred tax asset | $ 0 | $ 0 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income tax descriptions | The CARES Act also eliminates the 80% of taxable income limitations by allowing corporate entities to fully utilize NOL carryforwards to offset taxable income in 2018, 2019 or 2020. Taxpayers may generally deduct interest up to the sum of 50% of adjusted taxable income plus business interest income (30% limit under the 2017 Tax Act) for 2019 and 2020. The CARES Act allows taxpayers with alternative minimum tax credits to claim a refund in 2020 for the entire amount of the credits instead of recovering the credits through refunds over a period of years, as originally enacted by the 2017 Tax Act. In addition, the CARES Act raises the corporate charitable deduction limit to 25% of taxable income and makes qualified improvement property generally eligible for 15-year cost-recovery and 100% bonus depreciation. | |
Change in valuation allowance | $ 2,084,000 | $ 1,474,000 |
State [Member] | ||
Net operating loss | 4,188,000 | 3,531,815 |
US Federal [Member] | ||
Net operating loss | $ 33,366,000 | $ 22,640,000 |
Restatement of previously iss_2
Restatement of previously issued financial statements (unaudited) (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 |
Profit Share liability | $ 2,555,133 | $ 2,305,308 | $ 2,328,845 | |||
Secured note payable | 271,686 | 271,686 | 271,686 | |||
Unsecured convertible notes and warrants | 10,874,645 | 9,894,284 | 7,911,898 | |||
Total liabilities | 17,805,331 | 20,579,897 | 18,146,889 | |||
Stockholders' deficit | ||||||
Additional paid-in capital | 56,234,920 | 50,202,478 | 48,708,085 | |||
Accumulated deficit | (65,631,723) | (63,484,106) | (57,658,484) | |||
Total liabilities and stockholders' deficit | $ 8,497,774 | $ 7,376,365 | $ 9,273,238 | |||
As restated [Member] | ||||||
Profit Share liability | $ 2,210,230 | $ 2,097,655 | $ 1,991,940 | |||
Secured note payable | 271,686 | |||||
Unsecured convertible notes and warrants | 7,413,593 | 6,915,288 | 6,422,400 | |||
Total liabilities | 17,048,634 | 16,571,960 | 14,811,797 | |||
Stockholders' deficit | ||||||
Additional paid-in capital | 48,294,413 | 48,158,130 | 46,198,194 | |||
Accumulated deficit | (56,170,208) | (55,366,550) | (52,619,977) | |||
Total liabilities and stockholders' deficit | 9,249,586 | 9,440,250 | 8,466,260 | |||
Total stockholders' deficit | (7,799,048) | (7,131,710) | (6,345,537) | |||
Adjustment [Member] | ||||||
Profit Share liability | 2,210,230 | 2,097,655 | 1,991,940 | |||
Secured note payable | 0 | |||||
Unsecured convertible notes and warrants | (2,339,289) | (2,179,831) | (1,981,568) | |||
Total liabilities | (129,059) | (82,176) | 10,372 | |||
Stockholders' deficit | ||||||
Additional paid-in capital | 3,412,204 | 3,412,204 | 3,412,204 | |||
Accumulated deficit | (3,283,145) | (3,330,028) | (3,422,576) | |||
Total liabilities and stockholders' deficit | 0 | 0 | 0 | |||
Total stockholders' deficit | 129,059 | 82,176 | (10,372) | |||
As previously reported [Member] | ||||||
Profit Share liability | 0 | 0 | 0 | |||
Secured note payable | 271,686 | |||||
Unsecured convertible notes and warrants | 9,752,882 | 9,095,119 | 8,403,968 | |||
Total liabilities | 17,177,693 | 16,654,136 | 14,801,425 | |||
Stockholders' deficit | ||||||
Additional paid-in capital | 44,882,209 | 44,745,926 | 42,785,990 | |||
Accumulated deficit | (52,887,063) | (52,036,522) | (49,197,401) | |||
Total liabilities and stockholders' deficit | 9,249,586 | 9,440,250 | 8,466,260 | |||
Total stockholders' deficit | $ (7,928,107) | $ (7,213,886) | $ (6,335,165) |
Restatement of previously iss_3
Restatement of previously issued financial statements (unaudited) (Details 1) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||
Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | Sep. 30, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Loss on change in fair value of profit share | $ 249,825 | $ (252,390) | $ (23,537) | $ 374,462 | ||||||||||
Total costs and expenses | $ 3,999,101 | $ 2,787,719 | 7,440,433 | 5,678,266 | $ 13,974,070 | 17,500,313 | 17,500,313 | |||||||
Net loss | $ (1,729,683) | $ (417,934) | $ (904,217) | $ (1,773,871) | $ (2,147,617) | $ (2,678,088) | $ (5,825,622) | $ (6,097,286) | $ (6,097,286) | |||||
Net loss per common share-basic and diluted: | $ (0.02) | $ (0.01) | $ (0.03) | $ (0.03) | $ (0.07) | $ (0.08) | $ (0.08) | |||||||
As restated [Member] | ||||||||||||||
Loss on change in fair value of profit share | $ 112,575 | $ 105,715 | $ 37,557 | $ 143,272 | $ 255,847 | |||||||||
Total costs and expenses | 4,399,765 | 5,256,323 | 3,846,100 | 9,102,422 | 13,502,187 | |||||||||
Net loss | $ (803,658) | $ (2,746,573) | $ (1,058,779) | $ (3,805,352) | $ (4,609,010) | |||||||||
Net loss per common share-basic and diluted: | $ (0.01) | $ (0.04) | $ (0.01) | $ (0.05) | $ (0.06) | |||||||||
Interest expense & letter of credit fees | $ 623,237 | $ 565,610 | $ 502,008 | $ 1,067,619 | $ 1,690,855 | |||||||||
Gain on debt restructuring | 0 | 0 | 0 | 0 | 0 | |||||||||
Adjustment [Member] | ||||||||||||||
Loss on change in fair value of profit share | 112,575 | 105,715 | 37,557 | 143,272 | 255,847 | |||||||||
Total costs and expenses | 46,883 | 92,548 | 3,422,576 | 3,330,028 | 3,283,145 | |||||||||
Net loss | $ 46,883 | $ 92,548 | $ (3,422,576) | $ (3,330,028) | $ (3,283,145) | |||||||||
Net loss per common share-basic and diluted: | $ 0 | $ 0 | $ (0.04) | $ (0.04) | $ (0.04) | |||||||||
Interest expense & letter of credit fees | $ (159,458) | $ (198,263) | $ (27,185) | $ 225,448 | $ (384,906) | |||||||||
Gain on debt restructuring | 0 | 0 | 3,412,204 | 3,412,204 | 3,412,204 | |||||||||
As previously reported [Member] | ||||||||||||||
Loss on change in fair value of profit share | 0 | 0 | 0 | 0 | 0 | |||||||||
Total costs and expenses | 4,446,648 | 5,348,871 | 423,524 | 5,772,394 | 10,219,042 | |||||||||
Net loss | $ (850,541) | $ (2,839,121) | $ 2,363,797 | $ (475,324) | $ (1,325,865) | |||||||||
Net loss per common share-basic and diluted: | $ (0.01) | $ (0.04) | $ 0.03 | $ (0.01) | $ (0.02) | |||||||||
Interest expense & letter of credit fees | $ 782,695 | $ 763,873 | $ 529,193 | $ 1,293,067 | $ 2,075,761 | |||||||||
Gain on debt restructuring | $ 0 | $ 0 | $ (3,412,204) | $ (3,412,204) | $ (3,412,204) |
Restatement of previously iss_4
Restatement of previously issued financial statements (unaudited) (Details 2) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||
Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | Sep. 30, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Cash flows from operating activities | ||||||||||||||
Net loss | $ (1,729,683) | $ (417,934) | $ (904,217) | $ (1,773,871) | $ (2,147,617) | $ (2,678,088) | $ (5,825,622) | $ (6,097,286) | $ (6,097,286) | |||||
Adjustments to reconcile net loss to net cash | ||||||||||||||
Amortization of discount of notes payable | 1,314,760 | 981,462 | 1,974,080 | 1,752,639 | 1,752,639 | |||||||||
Loss on change in fair value of profit share | (23,537) | 374,462 | ||||||||||||
Net cash provided by (used in) operating activities | $ 501,755 | $ (1,325,499) | $ (1,239,085) | $ (1,576,948) | $ (1,576,948) | |||||||||
As restated [Member] | ||||||||||||||
Cash flows from operating activities | ||||||||||||||
Net loss | $ (803,658) | $ (2,746,573) | $ (1,058,779) | $ (3,805,352) | $ (4,609,010) | |||||||||
Adjustments to reconcile net loss to net cash | ||||||||||||||
Amortization of discount of notes payable | 276,512 | 713,084 | 1,200,780 | |||||||||||
Loss on change in fair value of profit share | 37,557 | 143,272 | 255,847 | |||||||||||
Net cash provided by (used in) operating activities | 68,245 | (506,674) | (1,304,626) | |||||||||||
Gain on debt restructuring | 0 | 0 | 0 | 0 | 0 | |||||||||
Adjustment [Member] | ||||||||||||||
Cash flows from operating activities | ||||||||||||||
Net loss | 46,883 | 92,548 | (3,422,576) | (3,330,028) | (3,283,145) | |||||||||
Adjustments to reconcile net loss to net cash | ||||||||||||||
Amortization of discount of notes payable | (27,185) | (225,448) | (384,906) | |||||||||||
Loss on change in fair value of profit share | 37,557 | 143,272 | 255,847 | |||||||||||
Net cash provided by (used in) operating activities | 0 | 0 | 0 | |||||||||||
Gain on debt restructuring | 0 | 0 | 3,412,204 | 3,412,204 | 3,412,204 | |||||||||
As previously reported [Member] | ||||||||||||||
Cash flows from operating activities | ||||||||||||||
Net loss | (850,541) | (2,839,121) | 2,363,797 | (475,324) | (1,325,865) | |||||||||
Adjustments to reconcile net loss to net cash | ||||||||||||||
Amortization of discount of notes payable | 303,697 | 938,532 | 1,585,686 | |||||||||||
Loss on change in fair value of profit share | 0 | 0 | 0 | |||||||||||
Net cash provided by (used in) operating activities | 68,245 | (506,674) | (1,304,626) | |||||||||||
Gain on debt restructuring | $ 0 | $ 0 | $ (3,412,204) | $ (3,412,204) | $ (3,412,204) |
Restatement of previously iss_5
Restatement of previously issued financial statements (unaudited) (Details 3) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||||
Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Cumulative effect of change in accounting principle related to accounting for leases | $ (77,866) | ||||||||||||
Stock issued per resignation agreements, amount | 118,540 | ||||||||||||
Issuance of stock options | $ 19,921 | $ 1,163,168 | 898,207 | ||||||||||
Extension of certain stock option expiration | 745,989 | ||||||||||||
Issuance of warrants, recorded as discount on convertible notes payable | 485,640 | ||||||||||||
Net loss | $ (1,729,683) | $ (417,934) | $ (904,217) | $ (1,773,871) | $ (2,147,617) | $ (2,678,088) | $ (5,825,622) | (6,097,286) | (6,097,286) | ||||
Stock issued upon cashless warrant exercise, amount | $ 0 | ||||||||||||
Capital contribution | $ 0 | $ (3,412,204) | |||||||||||
Total [Member] | Restated [Member] | |||||||||||||
Cumulative effect of change in accounting principle related to accounting for leases | $ (77,866) | ||||||||||||
Stock issued per resignation agreements, amount | $ 118,540 | ||||||||||||
Issuance of stock options | 898,207 | ||||||||||||
Extension of certain stock option expiration | 745,989 | ||||||||||||
Issuance of warrants, recorded as discount on convertible notes payable | $ 136,320 | 197,664 | |||||||||||
Net loss | (803,658) | (2,746,573) | (1,058,779) | ||||||||||
Shares Outstanding, amount, Begining balance | (7,131,710) | (6,345,537) | (8,621,096) | ||||||||||
Capital contribution | 3,412,204 | ||||||||||||
Shares Outstanding, amount, Ending balance | (7,799,048) | (7,131,710) | (6,345,537) | $ (8,621,096) | |||||||||
Common Stock [Member] | Restated [Member] | |||||||||||||
Stock issued per resignation agreements, amount | 464 | ||||||||||||
Stock issued upon cashless warrant exercise, amount | 37 | ||||||||||||
Shares Outstanding, amount, Begining balance | 76,747 | 76,710 | 76,246 | ||||||||||
Shares Outstanding, amount, Ending balance | $ 76,747 | $ 76,710 | $ 76,246 | $ 76,246 | |||||||||
Shares Outstanding,shares, Begining balance | 76,747,750 | 76,710,630 | 76,246,113 | 76,246,113 | |||||||||
Stock issued per resignation agreements, shares | $ 464,517 | ||||||||||||
Stock issued upon cashless warrant exercise, shares | 37,120 | ||||||||||||
Shares Outstanding,shares, Ending balance | 76,747,750 | 76,710,630 | 76,246,113 | ||||||||||
Accumulated (Deficit) [Member] | Restated [Member] | |||||||||||||
Cumulative effect of change in accounting principle related to accounting for leases | $ (77,866) | ||||||||||||
Net loss | $ (803,658) | $ (2,746,573) | (1,058,779) | ||||||||||
Shares Outstanding, amount, Begining balance | (55,366,550) | (52,619,977) | (51,483,332) | ||||||||||
Capital contribution | 0 | ||||||||||||
Shares Outstanding, amount, Ending balance | (56,170,208) | (55,366,550) | (52,619,977) | $ (51,483,332) | |||||||||
Additional Paid in Capital [Member] | Restated [Member] | |||||||||||||
Stock issued per resignation agreements, amount | 118,076 | ||||||||||||
Issuance of stock options | 898,207 | ||||||||||||
Extension of certain stock option expiration | 745,989 | ||||||||||||
Issuance of warrants, recorded as discount on convertible notes payable | 136,320 | 197,664 | |||||||||||
Stock issued upon cashless warrant exercise, amount | (37) | ||||||||||||
Shares Outstanding, amount, Begining balance | 48,158,130 | 46,198,194 | 42,785,990 | ||||||||||
Capital contribution | 3,412,204 | ||||||||||||
Shares Outstanding, amount, Ending balance | $ 48,294,413 | $ 48,158,130 | $ 46,198,194 | $ 42,785,990 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Mar. 08, 2021 | Feb. 15, 2021 | Jan. 31, 2021 | Aug. 24, 2021 | Mar. 17, 2021 | Feb. 28, 2021 | Feb. 17, 2021 | Feb. 16, 2021 | Feb. 25, 2020 | Mar. 31, 2021 | Dec. 31, 2020 | Jun. 30, 2021 | Dec. 31, 2019 |
Conversion rate | $ 0.50 | ||||||||||||
Remaining outstanding principal balance | $ 20,000 | ||||||||||||
Stock option shares issued | 175,000 | 150,000 | 705,166 | ||||||||||
Shares issued upon cashless exercise | 97,675 | 705,166 | |||||||||||
Stock Issued During Period, Value | $ 395,000 | $ 940,000 | $ 247,200 | $ 515,000 | $ 246,808 | $ 644,250 | |||||||
Exercise price | $ 0.50 | $ 0.50 | $ 0.50 | $ 0.50 | $ 0.45 | $ 0.35 | |||||||
Debt conversion converted instrument, shares issued | 790,000 | 1,880,000 | 494,400 | 1,030,000 | |||||||||
Market value | $ 1.29 | ||||||||||||
Debt conversion description | as a result of the election by the Company to force convert all of the outstanding principal of certain convertible promissory notes issued in 2018 if the closing price of the Company’s common stock exceeds $1.00 per share for 10 consecutive trading days | ||||||||||||
Common stock shares issued | 78,096,326 | 89,245,951 | 76,747,750 | ||||||||||
Warrants [Member] | |||||||||||||
Shares issued upon cashless exercise | 97,015 | ||||||||||||
Minimum [Member] | |||||||||||||
Market value | $ 1.44 | ||||||||||||
Maximum [Member] | |||||||||||||
Market value | $ 1.63 | ||||||||||||
First International Bank [Member] | |||||||||||||
Interest rate | 1.00% | 8.75% | |||||||||||
April 14, 2020 [Member] | |||||||||||||
Note Payable | $ 299,300 | $ 0 | |||||||||||
February 2021 [Member] | First International Bank [Member] | |||||||||||||
Debt conversion description | one interest payment on February 2, 2022, 47 monthly consecutive principal and interest payments of $6,366.89 each, beginning March 2, 2022, and one final principal and interest payment of $6,366.92 on February 2, 2026. | ||||||||||||
Note Payable | $ 299,380 | $ 0 | |||||||||||
Interest rate | 1.00% | ||||||||||||
Maturity Date | Apr. 14, 2026 | ||||||||||||
March 30, 2021 [Member] | |||||||||||||
Common stock shares issued | 25,000 | ||||||||||||
March 23, 2021 [Member] | |||||||||||||
Common stock shares issued | 500,000 |