Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2022 | Nov. 14, 2022 | |
Cover [Abstract] | ||
Entity Registrant Name | MIDWEST ENERGY EMISSIONS CORP. | |
Entity Central Index Key | 0000728385 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Entity Current Reporting Status | Yes | |
Document Period End Date | Sep. 30, 2022 | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2022 | |
Entity Common Stock Shares Outstanding | 92,871,132 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 000-33067 | |
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 | |
Entity Interactive Data Current | Yes |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets | ||
Cash | $ 1,257,148 | $ 1,388,307 |
Accounts receivable | 3,298,449 | 1,015,053 |
Inventory | 959,589 | 1,075,401 |
Prepaid expenses and other current assets (related party of $0 and $70,000) | 562,805 | 312,008 |
Total current assets | 6,077,991 | 3,790,769 |
Security deposits | 10,175 | 10,175 |
Property and equipment, net | 1,829,067 | 1,829,544 |
Right of use asset - operating lease | 108,577 | 390,098 |
Intellectual property, net | 1,960,747 | 2,114,197 |
Total assets | 9,986,557 | 8,134,783 |
Current liabilities | ||
Accounts payable and accrued expenses (related party of $145,833 and $206,554) | 3,086,097 | 2,267,711 |
Current portion of equipment notes payable | 0 | 2,677 |
Current portion of operating lease liability | 78,494 | 340,207 |
Customer credits | 189,500 | 167,000 |
Accrued salaries | 287,341 | 562,430 |
Short term debt - related party | 250,000 | 0 |
Secured note payable - related party | 0 | 271,686 |
Unsecured note payable, net of discount and issuance costs - related party | 0 | 11,871,254 |
Total current liabilities | 3,891,432 | 15,482,965 |
Operating lease liability | 33,190 | 54,551 |
Secured note payable - related party | 271,686 | 0 |
Unsecured note payable, net of discount and issuance costs - related party | 12,666,657 | 0 |
Profit share liability - related party | 3,312,896 | 2,836,743 |
Total liabilities | 20,175,861 | 18,374,259 |
Stockholders' deficit | ||
Preferred stock, $0.001 par value: 2,000,000 shares authorized, no shares issued | 0 | 0 |
Common stock; $0.001 par value; 150,000,000 shares authorized; 89,871,132 and 89,115,951 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively | 89,871 | 89,116 |
Additional paid-in capital | 57,773,207 | 56,788,321 |
Accumulated deficit | (68,052,382) | (67,116,913) |
Total stockholders' deficit | (10,189,304) | (10,239,476) |
Total liabilities and stockholders' deficit | $ 9,986,557 | $ 8,134,783 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Prepaid expenses and other current assets, related party | $ 0 | $ 70,000 |
Accounts payable and accrued expenses, related party | $ 145,833 | $ 206,554 |
Preferred stock, par value per share | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value per share | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 89,871,132 | 89,115,951 |
Common stock, shares outstanding | 89,871,132 | 89,115,951 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) | ||||
Revenues | $ 7,485,972 | $ 5,019,717 | $ 15,956,439 | $ 10,317,051 |
Costs and expenses: | ||||
Cost of sales | 5,104,887 | 3,240,507 | 10,810,365 | 6,221,073 |
Selling, general and administrative expenses (related party of $75,000, $75,000, $225,385, and $250,373) | 1,325,460 | 1,342,140 | 4,285,638 | 4,060,294 |
Interest expense (related party of $317,510, $503,189, $1,319,752, and $1,504,152) | 317,510 | 506,592 | 1,319,752 | 2,302,298 |
Loss on change in fair value of profit share | 168,736 | 137,126 | 476,153 | 386,951 |
Gain on extinguishment of debt | 0 | 0 | (299,300) | |
Total costs and expenses | 6,916,593 | 5,226,365 | 16,891,908 | 12,671,316 |
Income (Loss) before provision for income taxes | 569,379 | (206,648) | (935,469) | (2,354,265) |
Benefit (Provision) for income taxes | 0 | 0 | 0 | 0 |
Net income (loss) | $ 569,379 | $ (206,648) | $ (935,469) | $ (2,354,265) |
Net income (loss) per common share - basic: | $ 0.01 | $ 0 | $ (0.01) | $ (0.03) |
Weighted average common shares outstanding - basic | 89,871,132 | 89,255,299 | 89,456,920 | 84,666,319 |
Net income (loss) per common share - diluted | $ 0.01 | $ 0 | $ (0.01) | $ (0.03) |
Weighted average common shares outstanding - dilutive | 93,530,946 | 89,255,299 | 89,456,920 | 84,666,319 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS DEFICIT (UNAUDITED) - USD ($) | Total | Common Stock | Additional Paid-In Capital | Accumulated Deficit |
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) |
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 |
Net loss | (417,934) | $ 0 | 0 | (417,934) |
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 | (2,354,265) | |||
Balance, shares at Sep. 30, 2021 | 89,265,951 | |||
Balance, amount at Sep. 30, 2021 | (9,504,205) | $ 89,266 | 56,244,900 | (65,838,371) |
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) |
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 |
Stock issued for exercise of warrants, amount | 0 | 16 | (16) | 0 |
Share based compensation expense | 67 | 0 | 67 | 0 |
Net loss | (1,729,683) | $ 0 | 0 | (1,729,683) |
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 | |||
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) |
Net loss | (206,648) | $ 0 | 0 | (206,648) |
Issuance of stock for conversion of convertible notes, shares | 20,000 | |||
Issuance of stock for conversion of convertible notes, amount | 10,000 | $ 20 | 9,980 | 0 |
Balance, shares at Sep. 30, 2021 | 89,265,951 | |||
Balance, amount at Sep. 30, 2021 | (9,504,205) | $ 89,266 | 56,244,900 | (65,838,371) |
Balance, shares at Dec. 31, 2021 | 89,115,951 | |||
Balance, amount at Dec. 31, 2021 | (10,239,476) | $ 89,116 | 56,788,321 | (67,116,913) |
Share based compensation expense | 138,622 | 0 | 138,622 | 0 |
Net loss | (1,148,181) | $ 0 | 0 | (1,148,181) |
Stock issued for cashless exercise of options, shares | 5,181 | |||
Stock issued for cashless exercise of options, amount | 0 | $ 5 | (5) | 0 |
Balance, shares at Mar. 31, 2022 | 89,121,132 | |||
Balance, amount at Mar. 31, 2022 | (11,249,035) | $ 89,121 | 56,926,938 | (68,265,094) |
Balance, shares at Dec. 31, 2021 | 89,115,951 | |||
Balance, amount at Dec. 31, 2021 | (10,239,476) | $ 89,116 | 56,788,321 | (67,116,913) |
Net loss | (935,469) | |||
Balance, shares at Sep. 30, 2022 | 89,871,132 | |||
Balance, amount at Sep. 30, 2022 | (10,189,304) | $ 89,871 | 57,773,207 | (68,052,382) |
Balance, shares at Mar. 31, 2022 | 89,121,132 | |||
Balance, amount at Mar. 31, 2022 | (11,249,035) | $ 89,121 | 56,926,938 | (68,265,094) |
Stock issued for services, shares | 500,000 | |||
Stock issued for services, amount | 160,000 | $ 500 | 159,500 | 0 |
Share based compensation expense | 143,745 | 0 | 143,745 | 0 |
Net loss | (356,667) | $ 0 | 0 | (356,667) |
Issuance of stock for compensation, shares | 250,000 | |||
Issuance of stock for compensation, amount | 55,000 | $ 250 | 54,750 | 0 |
Balance, shares at Jun. 30, 2022 | 89,871,132 | |||
Balance, amount at Jun. 30, 2022 | (11,246,957) | $ 89,871 | 57,284,933 | (68,621,761) |
Stock issued for interest payable on convertible notes, amount | 488,274 | $ 0 | 488,274 | 0 |
Net loss | 569,379 | 569,379 | ||
Balance, shares at Sep. 30, 2022 | 89,871,132 | |||
Balance, amount at Sep. 30, 2022 | $ (10,189,304) | $ 89,871 | $ 57,773,207 | $ (68,052,382) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash flows from operating activities | ||
Net loss | $ (935,469) | $ (2,354,265) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Stock-based compensation - amortization of prepaid services | 196,042 | 447,107 |
Stock-based compensation | 337,367 | 5,945 |
Amortization of discount of notes payable | 1,204,488 | 1,777,243 |
Amortization of debt issuance costs | 79,188 | 90,883 |
Amortization of right to use assets | 281,521 | 302,503 |
Amortization of patent rights | 153,450 | 153,450 |
Depreciation expense | 11,204 | 56,824 |
Gain on forgiveness of debt | 0 | (299,300) |
Loss on change in fair value of profit share | 476,153 | 386,951 |
Changes in operating assets and liabilities | ||
Increase in accounts receivable | (2,283,396) | (1,950,439) |
Decrease (Increase) in inventory | 115,813 | (149,591) |
Increase in deferred revenue and customer credits | 22,500 | 0 |
Increase in prepaid expenses and other assets | (286,838) | (37,154) |
Decrease in security deposits | 0 | 2,080 |
Decrease in accrued salaries | (275,089) | 0 |
Increase in accounts payable and accrued liabilities | 818,386 | 1,565,786 |
Decrease in operating lease liability | (283,074) | (304,056) |
Net cash used in operating activities | (367,755) | (306,033) |
Cash flows from investing activities | ||
Purchase of property and equipment | (10,727) | 0 |
Net cash used in investing activities | (10,727) | 0 |
Cash flows from financing activities | ||
Payment of convertible note | 0 | (10,000) |
Payments of notes payable | 0 | (34,661) |
Payments of equipment notes payable | (2,677) | (21,750) |
Proceeds from the issuance of short term debt - related party | 250,000 | 0 |
Proceeds from exercise of warrants | 0 | 246,808 |
Proceeds from exercise of stock options | 0 | 101,250 |
Proceeds from the issuance of notes payable | 0 | 299,380 |
Net cash provided by financing activities | 247,323 | 581,027 |
Net (decrease) increase in cash and cash equivalents | (131,159) | 274,994 |
Cash and cash equivalents - beginning of period | 1,388,307 | 591,019 |
Cash and cash equivalents - end of period | 1,257,148 | 866,013 |
Cash paid during the period for: | ||
Interest | 0 | 41,082 |
Taxes | 13,213 | 4,518 |
SUPPLEMENTAL DISCLOSURE OF NON-CASH TRANSACTIONS | ||
Stock issued for prepaid services | 160,000 | 644,250 |
Stock issued for conversion of convertible notes | 0 | 4,440,000 |
Stock issued for interest payable | $ 0 | $ 615,339 |
Organization
Organization | 9 Months Ended |
Sep. 30, 2022 | |
Organization | |
Organization | Note 1 - Organization Midwest Energy Emissions Corp. Midwest Energy Emissions Corp. is organized under the laws of the State of Delaware. 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. ME2C Sponsor LLC and ME2C Acquisition Corp. ME2C Sponsor LLC is a limited liability company formed in the State of Delaware and is a wholly owned subsidiary of Midwest Energy Emissions Corp. and owns 85% of ME2C Acquisition Corp. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2022 | |
Summary of Significant Accounting Policies | |
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, 2021 filed on April 5, 2022, from which the accompanying condensed consolidated balance sheet dated December 31, 2021 was derived. In management’s opinion, the unaudited condensed consolidated financial statements reflect all adjustments necessary to present fairly the financial position as of September 30, 2022, 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 subsidiaries, MES, Inc. and ME2C Sponsor LLC, and ME2C Acquisition Corp. which is 85% owned by ME2C Sponsor LLC (collectively, the “Company”). Intercompany balances and transactions have been eliminated in consolidation. Use of Estimates The preparation of condensed 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 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 the three and nine months ended September 30, 2022 and 2021. 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 September 30, 2022 and December 31, 2021 and is considered to be Level 1. Financial instruments include cash, accounts receivable, accounts payable, and short-term debt. The carrying amounts of these financial instruments approximated fair value at September 30, 2022 and December 31, 2021 due to their short-term maturities. The fair value of the promissory notes payable at September 30, 2022 and December 31, 2021 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 September 30, 2022 and December 31, 2021. 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 September 30, 2022 and December 31, 2021 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 liabilities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy. Fair Value Measurement as of September 30, 2022 Total Level 1 Level 2 Level 3 Liabilities: Profit share liability – related party $ 3,312,896 $ - $ - $ 3,312,896 Total Liabilities $ 3,312,896 $ - $ - $ 3,312,896 Fair Value Measurement as of December 31, 2021 Total Level 1 Level 2 Level 3 Liabilities: Profit share liability – related party $ 2,836,743 $ - $ - $ 2,836,743 Total Liabilities $ 2,836,743 $ - $ - $ 2,836,743 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. Disaggregation of Revenue The Company generated revenue for the three and nine months ended September 30, 2022 and 2021 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 and nine months ended September 30, 2022 and 2021. Three months ended September 30, 2022 Three months ended September 30, 2021 United States Total United States Total Product revenue $ 7,382,800 $ 7,382,800 $ 4,687,595 $ 4,687,595 License revenue 52,530 52,530 195,547 195,547 Demonstrations & Consulting revenue 27,000 27,000 78,870 78,870 Equipment revenue 23,643 23,643 57,705 57,705 $ 7,485,973 $ 7,485,973 $ 5,019,717 $ 5,019,717 Nine months ended September 30, 2022 Nine months ended September 30, 2021 United States Total United States Total Product revenue $ 15,372,155 $ 15,372,155 $ 8,779,645 $ 8,779,645 License revenue 285,938 285,938 1,286,641 1,286,641 Demonstrations & Consulting revenue 81,000 81,000 140,180 140,180 Equipment revenue 217,346 217,346 110,585 110,585 $ 15,956,439 $ 15,956,439 $ 10,317,051 $ 10,317,051 Income Taxes Income tax expense for the three and nine months ended September 30, 2022 is for gross receipts tax in certain states in which the Company conducts business. The Company recorded no income tax expense for the three and nine months ended September 30, 2022 and 2021 because the estimated effective tax rate was zero. In determining the estimated annual effective income tax rate, the Company analyses various factors, including projections of the Company’s annual earnings and taxing jurisdictions in which the earnings will be generated, the impact of state and local income taxes, the ability to use tax credits and net operating loss carry forwards, and available tax planning alternatives. As of September 30, 2022, the Company continues to provide a 100% valuation allowance against its net deferred tax assets since the Company believes it is more likely than not that its deferred tax assets will not be realized. 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. Based on a market price of $ per share on September 30, 2022, there are dilutive stock options and no dilutive warrants for the three months ended September 30, 2022 as the Company reported net income for the period. There were no dilutive potential common shares for the nine months ended September 30, 2022, because the Company incurred a net loss and basic and diluted losses per common share are the same. There were no dilutive potential common shares as of September 30, 2021, because the Company incurred net losses and basic and diluted losses per common share are the same. September 30, September 30, 2022 2021 Stock Options 19,108,576 16,068,326 Warrants 4,285,000 4,285,000 Total common stock equivalents outstanding 23,393,576 20,395,326 Three Months Ended September 30, 2022 Weighted average common stock outstanding 89,871,132 Dilutive stock options (exercise price less than market price) at September 30, 2022 3,659,814 Total dilutive common stock equivalents outstanding 93,530,946 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 September 30, 2022 and December 31, 2021 is maintained at high-quality financial institutions and has not incurred any losses to date. Customer and Supplier Concentration For the nine months ended September 30, 2022, four customers represented 19%, 15%, 13% and 12% of the Company’s revenues, and for the nine months ended September 30, 2021, four customers represented 17%, 15%, 13% and 11% of the Company’s revenues. For the nine months ended September 30, 2022, six customers represented 20%, 18%, 16%, 11%, 11%, and 10% of the Company’s accounts receivable, and for the nine months ended September 30, 2021, six customers represented 18%, 15%, 14%, 14%, 14%, and 12% of the Company’s accounts receivable. For the nine months ended September 30, 2022, 84% of the Company’s purchases related to three suppliers. For the nine months ended September 30, 2021, 86% of the Company’s purchases related to two suppliers. At September 30, 2022 and 2021, 68% and 66% 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 a 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 Issued Accounting Standards Issued in June 2021, FASB Accounting Standards Update (ASU) No. 2016-13, Measurement of Credit Losses on Financial Instruments Management does not believe that any recently issued, but not yet effective accounting standards, when adopted, will have a material effect on the accompanying consolidated financial statements. |
Liquidity and Financial Conditi
Liquidity and Financial Condition | 9 Months Ended |
Sep. 30, 2022 | |
Liquidity and Financial Condition | |
Liquidity 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 approximately $1.3 million in cash at September 30, 2022. In addition, the Company had cash used in operating activities of $0.4 million for the nine months ended September 30, 2022, had working capital of $2.2 million and an accumulated deficit of $68.1 million at September 30, 2022, and had a net loss in the amount of approximately $0.9 million for the nine months ended September 30, 2022. At September 30, 2022, all existing secured and unsecured debt held by its principal lender, excluding the profit share liability, in the principal amount of approximately $12.9 million was scheduled to mature on October 31, 2022. The accompanying condensed consolidated financial statements as of September 30, 2022 have been prepared assuming the Company will continue as a going concern. On October 28, 2022, the Company’s principal lender agreed to extend the maturity date of all of its existing secured and unsecured debt in the principal amount of approximately $12.9 million from October 31, 2022 to August 25, 2025. As a result, such liabilities have been reclassified as long-term liabilities in the accompanying condensed consolidated financial statements as of September 30, 2022. Based upon such extension of the maturity date of such secured and unsecured debt, the Company’s current cash position and the Company’s recent revenue growth, 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. |
Inventory
Inventory | 9 Months Ended |
Sep. 30, 2022 | |
Inventory | |
Inventory | Note 4 - Inventory Inventory was comprised of the following at September 30, 2022 and December 31, 2021: September 30, 2022 December 31, 2021 Raw Materials $ 576,632 $ 637,084 Spare Parts 83,357 86,118 Finished Goods 299,600 352,199 $ 959,589 $ 1,075,401 |
Property and Equipment, Net
Property and Equipment, Net | 9 Months Ended |
Sep. 30, 2022 | |
Property and Equipment, Net | |
Property and Equipment, Net | Note 5 - Property and Equipment, Net Property and equipment at September 30, 2022 and December 31, 2021 are as follows: September 30, December 31, 2022 2021 Equipment & installation $ 1,976,634 $ 1,976,634 Trucking equipment 845,102 834,375 Office equipment, computer equipment and software 20,295 20,295 Total equipment 2,842,031 2,831,304 Less: accumulated depreciation (2,820,671 ) (2,809,467 ) Construction in process 1,807,707 1,807,707 Property and equipment, net $ 1,829,067 $ 1,829,544 The Company uses the straight-line method of depreciation over estimated useful lives of 2 to 5 years. During the three months ended September 30, 2022 and 2021 depreciation expense was $342, and $12,445, respectively. During the nine months ended September 30, 2022 and 2021 depreciation expense was $11,204, and $56,824, respectively. |
Intellectual Property
Intellectual Property | 9 Months Ended |
Sep. 30, 2022 | |
Intellectual Property | |
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 September 30, 2022 and December 31, 2021 are as follows: September 30, December 31, 2022 2021 Licenses and patents $ 3,068,995 $ 3,068,995 Less: Accumulated amortization (1,108,248 ) (954,798 ) Intellectual property, net $ 1,960,747 $ 2,114,197 Amortization expense for the three months ended September 30, 2022 and 2021 was $51,150 and $51,150, respectively. Amortization expense for the nine months ended September 30, 2022 and 2021 was $153,450 and $153,450, respectively. Estimated annual amortization for each of the next five years is $204,600. |
Notes Payable
Notes Payable | 9 Months Ended |
Sep. 30, 2022 | |
Notes Payable | |
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 was 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 (the “CARES Act”), which was enacted on March 27, 2020. In January 2021, the PPP Loan was forgiven, and the Company recorded a gain in the first quarter of 2021 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. In October 2021, the Second PPP Loan was forgiven and the Company recorded a gain on extinguishment of debt of $301,377. |
Convertible Notes Payable
Convertible Notes Payable | 9 Months Ended |
Sep. 30, 2022 | |
Convertible Notes Payable | |
Convertible Notes Payable | Note 8 - Convertible Notes Payable From July 30, 2013 through December 24, 2013, the Company sold convertible notes and warrants to unaffiliated accredited investors totaling $1,902,500 (the “2013 Notes”). From February 8, 2021 to February 15, 2021, the Company issued 1,880,000 shares of common stock to certain holders of the 2013 Notes 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 holder of such notes for the conversion of outstanding principal in the amount of $30,000, and on August 18, 2021, the Company issued 20,000 shares of common stock to another holder of such notes for the conversion of outstanding principal in the amount of $10,000, each based upon a conversion rate of $0.50 per share. On August 24, 2021, the Company prepaid the outstanding principal balance of another of such notes in the principal amount of $10,000. As of September 30, 2022 and December 31, 2021, total principal of $0, was outstanding on the 2013 Notes. On June 15, 2018, the Company issued 2018 Unsecured Convertible Notes (the “2018 Unsecured Notes”) totaling $560,000 and warrants to certain then holders of the 2013 Notes in exchange for their secured 2013 Notes, and 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 conversion of 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 conversion of 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 September 30, 2022 and December 31, 2021, total principal of $0, 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. 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 September 30, 2022 and December 31, 2021, total principal of $0, 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. |
Related Party
Related Party | 9 Months Ended |
Sep. 30, 2022 | |
Related Party | |
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 years ended December 31, 2021 and 2020 was $41,319 and $41,432 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 September 30, 2022 and December 31, 2021, total principal of $271,686 was outstanding on this note. On October 28, 2022, the Company, along with MES, and AC Midwest, executed Amendment No. 4 to the Amended and Restated Financing Agreement pursuant to which the maturity date of the AC Midwest Secured Note was extended to August 25, 2025. In addition, the interest rate on the remaining principal balance was reduced from 15.0% to 9.0% per annum. Unsecured Note Payable The Company has the following unsecured note payable - related party outstanding as of September 30, 2022 and December 31, 2021: September 30, December 31, 2022 2021 Unsecured note payable $ 13,154,931 $ 13,154,931 Less fair value adjustment on extinguishment (488,274 ) - Less discounts and debt issuance costs - (1,283,677 ) Total unsecured note payable 12,666,657 11,871,254 Less current portion - (11,871,254 ) Unsecured note payable, net of current portion $ 12,666,657 $ - 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 “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 nine months ended September 30, 2022 and 2021 was $1,204,488 and $1,382,366, respectively. As of September 30, 2022, the unamortized balance of the discount was $0 and the unamortized balance of the debt issuance costs was $0. The AC Midwest Unsecured Note, which has been issued in exchange for the AC Midwest Subordinated Note which has now been cancelled, was to mature on August 25, 2022. It bears a zero cash interest rate. In accordance with the Unsecured Note Financing Agreement, 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), and Equity Offering Net Proceeds as described below. On August 30, 2022, AC Midwest agreed to an extension of the maturity date of the AC Midwest Unsecured Note (and AC Midwest Secured Note) from August 25, 2022 to September 30, 2022. Such extension was expected to provide the Company sufficient time in which to conclude the process of negotiating certain changes and modifications to such financing arrangements. On September 28, 2022, AC Midwest agreed to an additional short-term extension of such maturity date from September 30, 2022 to October 31, 2022. The Company has accounted for the extension as debt extinguishment with a related party. As such the Company recorded a capital contribution of $488,274 on this exchange which is related to the difference in fair value of the note on the date of the exchange. On October 28, 2022, the Company, along with MES, and AC Midwest, executed Amendment No. 1 to Unsecured Note Financing Agreement (“Amendment No. 1”) pursuant to which the maturity date of the AC Midwest Unsecured Note was extended to August 25, 2025. In addition, the parties agreed that the Profit Share be increased by $4,500,000 from $13,154,931 (representing 1.0 times the original principal amount) to $17,654,931. Principal Payments and 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. In addition, and pursuant to Amendment No. 1, the Company shall pay the principal outstanding and Profit Share in an aggregate amount equal to 75.0% of any Equity Offering Net Proceeds (as defined) until the Unsecured Note and Profit Share have been paid in full. 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 nine months ended September 30, 2022 and 2021. Profit Share as of January 1, 2022 $ 2,836,743 Addition - Loss on change in fair value of profit share 476,153 Profit Share as of September 30, 2022 $ 3,312,896 Profit Share as of January 1, 2021 $ 2,305,308 Addition - Loss on change in fair value of profit share 386,951 Profit Share as of September 30, 2021 $ 2,692,259 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 was expected to 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 was at closing to 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 had 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 was to pay AC Midwest $6,577,465 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 was to pay AC Midwest $2,305,308 in cash representing the Profit Share Valuation, and issue shares of common stock for $4,026,568 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 agreed to provide certain registration rights with respect to the shares issued thereunder. The closing was 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, which was extended to June 30, 2022 (the “Qualifying Offering”). Such closing conditions were not met by June 30, 2022. On October 28, 2022, the parties entered into a Termination Agreement pursuant to which the parties agreed to terminate the Debt Repayment Agreement with immediate effect and that none of the parties shall have any further responsibility or liability thereunder. Short term debt On June 13, 2022, the Company entered into a promissory note in the amount of $250,000 with the Company’s Chairman of the Board of Directors. The note bears interest at 6% and is due on the earlier of 90 days or the Company having cash of $1,200,000. $250,000 was outstanding as of September 30, 2022. Related Party Transactions Kaye Cooper Kay & Rosenberg, LLP provides certain legal services to the Company and was paid $286,105 and $212,873 for the nine months ended September 30, 2022 and 2021, 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 September 30, 2022 and December 31, 2021, $145,833 and $206,554, respectively, was owed to the firm for services rendered. In September 2022, the Company acquired a pickup truck from the Company’s Chief Financial Officer for the purchase price of $10,000 which the parties determined to be its fair market value. |
Operating Leases
Operating Leases | 9 Months Ended |
Sep. 30, 2022 | |
Operating Leases | |
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 $24,760. 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. Future remaining minimum lease payments under these non-cancelable leases are as follows: For the twelve months ended September 30, 2023 $ 92,040 2024 22,500 Total 114,540 Less discount (2,856 ) Total lease liabilities 111,684 Less current portion (78,494 ) Operating lease obligation, net of current portion $ 33,190 The weighted average remaining lease term for operating leases is 1.0 years and the weighted average discount rate used in calculating the operating lease asset and liability is 5.0%. For the nine months ended September 30, 2022, payments on lease obligations were $202,070 and amortization on the right of use assets was $283,074. For the nine months ended September 30, 2022 and 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: For the Nine Months Ended September 30, 2022 For the Nine Months Ended September 30, 2021 Operating lease cost $ 283,074 $ 304,056 Short term lease costs - 5,310 Total lease costs $ 283,074 $ 309,366 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies | |
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 2022 and 2025 and expose the Company to the potential risks associated with rising material costs during that same 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. In September 2021, the Company received approval from the District Judge of the U.S. District Court in Delaware of the adoption of this report and recommendation of the Magistrate Judge to allow the Company to proceed with litigation claims against certain refined coal entities. As a result of an application made by the Company to the Court in March 2022 to add additional parties to the action (all affiliated entities of the already named defendants), there are now 24 refined coal defendants named in the action. In connection with such application, the District Court Magistrate Judge ruled in April 2022 that certain parties could be added but denied the application with respect to certain others. The fact discovery portion of the litigation has concluded. A jury trial date has been scheduled for September 2023. 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 | 9 Months Ended |
Sep. 30, 2022 | |
Stock Based Compensation | |
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 to employees, directors and consultants. For the three months ended September 30, 2022 and 2021, stock based compensation expense amounted to $83,126 and $197,143, respectively. For the nine months ended September 30, 2022 and 2021, stock based compensation expense amounted to $533,409 and $453,052, respectively. Such expense is classified in selling, general and administrative expenses. Common Stock 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 consolidated statements of operations over ten months. Pursuant to an amendment dated March 15, 2022 and effective as of December 31, 2021, the nonaffiliated party agreed to forfeit all of such shares which shares were cancelled effective as of December 31, 2021. As such, the previously recorded expense of $615,000 was reversed in December 2021. 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 consolidated statements of operations over three months. On December 1, 2021, and pursuant to a consulting agreement dated December 1, 2021 with a nonaffiliated third party, the Company issued 250,000 shares of common stock to such party as part of its compensation thereunder. These shares of common stock were valued at $171,250 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 consolidated statements of operations over 12 months. On May 31, 2022, and pursuant to a consulting agreement dated May 31, 2022 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 $160,000 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 consolidated statements of operations over 12 months. On May 31, 2022, the Company issued a total of 250,000 shares of common stock to two Directors. These shares of common stock were valued at $55,000 in accordance with FASB ASC Topic 718. The fair value of the shares was expensed in full on the issuance date. 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. 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. On January 24, 2022, the Company extended the expiration dates of certain fully expensed previously granted nonqualified stock options (which were due to expire in February 2022) which were granted to five individuals to acquire an aggregate of 700,000 shares of the Company’s common stock under the Company’s 2014 Equity Incentive Plan and the 2017 Equity Incentive Plan (the “2017 Plan”). Such extended options are exercisable at prices ranging from $1.15 to $1.20 per share, representing the original fair market value of the common stock on the dates of grant as determined under the applicable Equity Plan. The options are fully vested and exercisable and will now expire five years from their original expiration dates. Based on a Black-Scholes valuation model, these modified options were valued at $138,623, in accordance with FASB ASC Topic 718, which was expensed on the amendment date in selling, general and administrative expenses within the Company’s condensed consolidated statements of operations. On February 2, 2022, the Company issued 5,181 shares of common stock to a certain option holder upon the cashless exercise of options to purchase an aggregate of 9,750 shares of common stock at exercise prices ranging from $0.20 to $0.33 per share based upon a market price of $0.54 per share as determined under the terms of the options. On May 31, 2022, the Company granted nonqualified stock options to the following executive officers: John Pavlish (Senior Vice President and Chief Technology Officer) and James Trettel (Vice President of Operations) – nonqualified stock options to each acquire 500,000 shares of the Company’s common stock; and Jami Satterthwaite (Chief Financial Officer) – nonqualified stock options to acquire 100,000 shares of the Company’s common stock. On such date, two other employees were also granted nonqualified stock options to each acquire 50,000 shares of the Company’s common stock. All of such options were granted under the 2017 Plan and are exercisable at $0.21 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 and expire five years from their issuance date. Based on a Black-Scholes valuation model, these options were valued at $143,745, in accordance with FASB ASC Topic 718, which was expensed on the issuance date in selling, general and administrative expenses within the Company’s condensed consolidated statements of operations. The valuation assumptions included an expected duration of 2.5 years, volatility of 96.83%, discount rate of 2.62% and dividends of $0. A summary of stock option activity is presented below: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (years) Aggregate Intrinsic Value December 31, 2021 18,318,326 $ 0.53 2.89 $ 2,961,965 Grants 1,200,000 0.21 $ - Expirations (400,000 ) $ 1.03 Exercised (9,750 ) $ 0.25 - September 30, 2022 19,108,576 $ 0.50 2.54 $ 158,428 Options exercisable at: September 30, 2022 19,108,576 $ 0.50 2.54 $ 158,428 The aggregate intrinsic value in the table above represents the total intrinsic value, based on the Company’s closing stock price of $0.24 as of September 30, 2022, which would have been received by the option holders had all option holders exercised their options as of that date. |
Warrants
Warrants | 9 Months Ended |
Sep. 30, 2022 | |
Warrants | |
Warrants | Note 13 - Warrants The Company utilized a Black-Scholes options pricing model to value warrants at the issuance date. 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 December 31, 2021 4,285,000 $ 0.63 2.47 $ - Grants - - - - Expirations - - - - Exercised - - - - September 30, 2022 4,285,000 $ 0.70 1.72 $ - Warrants exercisable at: September 30, 2022 4,285,000 $ 0.70 1.72 $ - The following table summarizes information about common stock warrants outstanding at September 30, 2022: Outstanding and Exercisable Exercise Price Number Outstanding Weighted Average Remaining Contractual Life (years) Weighted Average Exercise Price $ 0.70 4,285,000 1.72 $ 0.70 $ 0.70 4,285,000 1.72 $ 0.70 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2022 | |
Subsequent Events | |
Subsequent Events | Note 14 - Subsequent Events See Note 9 for information on (i) the short term extension executed on September 28, 2022, which extended the maturity date of the AC Midwest Unsecured Note and AC Midwest Secured Note from September 30, 2022 to October 31, 2022, and (ii) the execution of Amendment No. 1 to Unsecured Note Financing Agreement and Amendment No. 4 to Secured Note Financing Agreement, both of which were executed on October 28, 2022, which, among other things, extended the maturity date of the AC Midwest Unsecured Note and AC Midwest Secured Note to August 25, 2025. In addition, see Note 9 for information on the execution of a Termination Agreement on October 28, 2022 which terminated the Debt Repayment Agreement among the Company, MES and AC Midwest. On October 28, 2022, the Company and AC Midwest also entered into a Repurchase Option Agreement pursuant to which the Company shall have the option to repurchase a portion of the shares of common stock of the Company owned by AC Midwest at a purchase price of $0.50 per share until the earlier of (i) the date AC Midwest’s beneficial ownership reaches 5.0% of the Company’s issued and outstanding common stock, or (ii) August 25, 2025. See Note 9 for information on a $250,000 short-term loan provided by the Company’s Chairman of the Board of Directors in June 2022. On October 11, 2022, such loan, together with all accrued interest, was repaid in full by the Company. On November 8, 2022, the Company granted a retention stock bonus award to the Company’s Chief Executive Officer in the amount of 3,000,000 shares of common stock. So long as the Chief Executive Officer remains in the continuous employ of the Company, the shares shall vest according to the following: 25.0% shall vest six months from the date of grant, and another 25.0% shall vest on each subsequent six-month anniversary of the date of grant so that the stock award is fully vested two years from the date of grant. Any unvested shares shall be forfeited immediately when the Chief Executive Officer is no longer in the continuous employ of the Company, unless due to death, disability or a change in control. |
Summary Of Significant Accoun_2
Summary Of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
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, 2021 filed on April 5, 2022, from which the accompanying condensed consolidated balance sheet dated December 31, 2021 was derived. In management’s opinion, the unaudited condensed consolidated financial statements reflect all adjustments necessary to present fairly the financial position as of September 30, 2022, 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 subsidiaries, MES, Inc. and ME2C Sponsor LLC, and ME2C Acquisition Corp. which is 85% owned by ME2C Sponsor LLC (collectively, the “Company”). Intercompany balances and transactions have been eliminated in consolidation. |
Use of Estimates | The preparation of condensed 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 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 the three and nine months ended September 30, 2022 and 2021. |
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 September 30, 2022 and December 31, 2021 and is considered to be Level 1. Financial instruments include cash, accounts receivable, accounts payable, and short-term debt. The carrying amounts of these financial instruments approximated fair value at September 30, 2022 and December 31, 2021 due to their short-term maturities. The fair value of the promissory notes payable at September 30, 2022 and December 31, 2021 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 September 30, 2022 and December 31, 2021. 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 September 30, 2022 and December 31, 2021 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 liabilities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy. Fair Value Measurement as of September 30, 2022 Total Level 1 Level 2 Level 3 Liabilities: Profit share liability – related party $ 3,312,896 $ - $ - $ 3,312,896 Total Liabilities $ 3,312,896 $ - $ - $ 3,312,896 Fair Value Measurement as of December 31, 2021 Total Level 1 Level 2 Level 3 Liabilities: Profit share liability – related party $ 2,836,743 $ - $ - $ 2,836,743 Total Liabilities $ 2,836,743 $ - $ - $ 2,836,743 |
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. |
Disaggregation of Revenue | The Company generated revenue for the three and nine months ended September 30, 2022 and 2021 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 and nine months ended September 30, 2022 and 2021. Three months ended September 30, 2022 Three months ended September 30, 2021 United States Total United States Total Product revenue $ 7,382,800 $ 7,382,800 $ 4,687,595 $ 4,687,595 License revenue 52,530 52,530 195,547 195,547 Demonstrations & Consulting revenue 27,000 27,000 78,870 78,870 Equipment revenue 23,643 23,643 57,705 57,705 $ 7,485,973 $ 7,485,973 $ 5,019,717 $ 5,019,717 Nine months ended September 30, 2022 Nine months ended September 30, 2021 United States Total United States Total Product revenue $ 15,372,155 $ 15,372,155 $ 8,779,645 $ 8,779,645 License revenue 285,938 285,938 1,286,641 1,286,641 Demonstrations & Consulting revenue 81,000 81,000 140,180 140,180 Equipment revenue 217,346 217,346 110,585 110,585 $ 15,956,439 $ 15,956,439 $ 10,317,051 $ 10,317,051 |
Income Taxes | Income tax expense for the three and nine months ended September 30, 2022 is for gross receipts tax in certain states in which the Company conducts business. The Company recorded no income tax expense for the three and nine months ended September 30, 2022 and 2021 because the estimated effective tax rate was zero. In determining the estimated annual effective income tax rate, the Company analyses various factors, including projections of the Company’s annual earnings and taxing jurisdictions in which the earnings will be generated, the impact of state and local income taxes, the ability to use tax credits and net operating loss carry forwards, and available tax planning alternatives. As of September 30, 2022, the Company continues to provide a 100% valuation allowance against its net deferred tax assets since the Company believes it is more likely than not that its deferred tax assets will not be realized. |
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. Based on a market price of $ per share on September 30, 2022, there are dilutive stock options and no dilutive warrants for the three months ended September 30, 2022 as the Company reported net income for the period. There were no dilutive potential common shares for the nine months ended September 30, 2022, because the Company incurred a net loss and basic and diluted losses per common share are the same. There were no dilutive potential common shares as of September 30, 2021, because the Company incurred net losses and basic and diluted losses per common share are the same. September 30, September 30, 2022 2021 Stock Options 19,108,576 16,068,326 Warrants 4,285,000 4,285,000 Total common stock equivalents outstanding 23,393,576 20,395,326 Three Months Ended September 30, 2022 Weighted average common stock outstanding 89,871,132 Dilutive stock options (exercise price less than market price) at September 30, 2022 3,659,814 Total dilutive common stock equivalents outstanding 93,530,946 |
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 September 30, 2022 and December 31, 2021 is maintained at high-quality financial institutions and has not incurred any losses to date. |
Customer and Supplier Concentration | For the nine months ended September 30, 2022, four customers represented 19%, 15%, 13% and 12% of the Company’s revenues, and for the nine months ended September 30, 2021, four customers represented 17%, 15%, 13% and 11% of the Company’s revenues. For the nine months ended September 30, 2022, six customers represented 20%, 18%, 16%, 11%, 11%, and 10% of the Company’s accounts receivable, and for the nine months ended September 30, 2021, six customers represented 18%, 15%, 14%, 14%, 14%, and 12% of the Company’s accounts receivable. For the nine months ended September 30, 2022, 84% of the Company’s purchases related to three suppliers. For the nine months ended September 30, 2021, 86% of the Company’s purchases related to two suppliers. At September 30, 2022 and 2021, 68% and 66% 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 a 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 Issued Accounting Standards | Issued in June 2021, FASB Accounting Standards Update (ASU) No. 2016-13, Measurement of Credit Losses on Financial Instruments Management does not believe that any recently issued, but not yet effective accounting standards, when adopted, will have a material effect on the accompanying consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Summary of Significant Accounting Policies | |
Schedule of fair value assets and liabilities measured on recurring basis | Fair Value Measurement as of September 30, 2022 Total Level 1 Level 2 Level 3 Liabilities: Profit share liability – related party $ 3,312,896 $ - $ - $ 3,312,896 Total Liabilities $ 3,312,896 $ - $ - $ 3,312,896 Fair Value Measurement as of December 31, 2021 Total Level 1 Level 2 Level 3 Liabilities: Profit share liability – related party $ 2,836,743 $ - $ - $ 2,836,743 Total Liabilities $ 2,836,743 $ - $ - $ 2,836,743 |
Schedule of sales by operating segment | Three months ended September 30, 2022 Three months ended September 30, 2021 United States Total United States Total Product revenue $ 7,382,800 $ 7,382,800 $ 4,687,595 $ 4,687,595 License revenue 52,530 52,530 195,547 195,547 Demonstrations & Consulting revenue 27,000 27,000 78,870 78,870 Equipment revenue 23,643 23,643 57,705 57,705 $ 7,485,973 $ 7,485,973 $ 5,019,717 $ 5,019,717 Nine months ended September 30, 2022 Nine months ended September 30, 2021 United States Total United States Total Product revenue $ 15,372,155 $ 15,372,155 $ 8,779,645 $ 8,779,645 License revenue 285,938 285,938 1,286,641 1,286,641 Demonstrations & Consulting revenue 81,000 81,000 140,180 140,180 Equipment revenue 217,346 217,346 110,585 110,585 $ 15,956,439 $ 15,956,439 $ 10,317,051 $ 10,317,051 |
Schedule of earnings per share basic and diluted | September 30, September 30, 2022 2021 Stock Options 19,108,576 16,068,326 Warrants 4,285,000 4,285,000 Total common stock equivalents outstanding 23,393,576 20,395,326 Three Months Ended September 30, 2022 Weighted average common stock outstanding 89,871,132 Dilutive stock options (exercise price less than market price) at September 30, 2022 3,659,814 Total dilutive common stock equivalents outstanding 93,530,946 |
Inventory (Tables)
Inventory (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Inventory | |
Schedule of Inventory | September 30, 2022 December 31, 2021 Raw Materials $ 576,632 $ 637,084 Spare Parts 83,357 86,118 Finished Goods 299,600 352,199 $ 959,589 $ 1,075,401 |
Property And Equipment Net (Tab
Property And Equipment Net (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Property and Equipment, Net | |
Schedule of property and equipment | September 30, December 31, 2022 2021 Equipment & installation $ 1,976,634 $ 1,976,634 Trucking equipment 845,102 834,375 Office equipment, computer equipment and software 20,295 20,295 Total equipment 2,842,031 2,831,304 Less: accumulated depreciation (2,820,671 ) (2,809,467 ) Construction in process 1,807,707 1,807,707 Property and equipment, net $ 1,829,067 $ 1,829,544 |
Intellectual Property (Tables)
Intellectual Property (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Property and Equipment, Net | |
Schedule of patent costs capitalized | September 30, December 31, 2022 2021 Licenses and patents $ 3,068,995 $ 3,068,995 Less: Accumulated amortization (1,108,248 ) (954,798 ) Intellectual property, net $ 1,960,747 $ 2,114,197 |
Related Party (Tables)
Related Party (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Related Party (Tables) | |
Schedule of Unsecured notes payable | September 30, December 31, 2022 2021 Unsecured note payable $ 13,154,931 $ 13,154,931 Less fair value adjustment on extinguishment (488,274 ) - Less discounts and debt issuance costs - (1,283,677 ) Total unsecured note payable 12,666,657 11,871,254 Less current portion - (11,871,254 ) Unsecured note payable, net of current portion $ 12,666,657 $ - |
Schedule of profit share liabilities | Profit Share as of January 1, 2022 $ 2,836,743 Addition - Loss on change in fair value of profit share 476,153 Profit Share as of September 30, 2022 $ 3,312,896 Profit Share as of January 1, 2021 $ 2,305,308 Addition - Loss on change in fair value of profit share 386,951 Profit Share as of September 30, 2021 $ 2,692,259 |
Operating Leases (Tables)
Operating Leases (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Operating Leases | |
Schedule of future minimum lease payments | For the twelve months ended September 30, 2023 $ 92,040 2024 22,500 Total 114,540 Less discount (2,856 ) Total lease liabilities 111,684 Less current portion (78,494 ) Operating lease obligation, net of current portion $ 33,190 |
Schedule of lease cost | For the Nine Months Ended September 30, 2022 For the Nine Months Ended September 30, 2021 Operating lease cost $ 283,074 $ 304,056 Short term lease costs - 5,310 Total lease costs $ 283,074 $ 309,366 |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Stock Based Compensation | |
Schedule of stock option activity | Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (years) Aggregate Intrinsic Value December 31, 2021 18,318,326 $ 0.53 2.89 $ 2,961,965 Grants 1,200,000 0.21 $ - Expirations (400,000 ) $ 1.03 Exercised (9,750 ) $ 0.25 - September 30, 2022 19,108,576 $ 0.50 2.54 $ 158,428 Options exercisable at: September 30, 2022 19,108,576 $ 0.50 2.54 $ 158,428 |
Warrants (Tables)
Warrants (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Convertible Notes Payable | |
Schedule of warrant | Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (years) Aggregate Intrinsic Value December 31, 2021 4,285,000 $ 0.63 2.47 $ - Grants - - - - Expirations - - - - Exercised - - - - September 30, 2022 4,285,000 $ 0.70 1.72 $ - Warrants exercisable at: September 30, 2022 4,285,000 $ 0.70 1.72 $ - |
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 1.72 $ 0.70 $ 0.70 4,285,000 1.72 $ 0.70 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Total Liabilities | $ 20,175,861 | $ 18,374,259 |
Total [Member] | ||
Profit share liability | 3,312,896 | 2,836,743 |
Total Liabilities | 3,312,896 | 2,836,743 |
Fair Value, Inputs, Level 1 [Member] | ||
Profit share liability | 0 | 0 |
Total Liabilities | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | ||
Profit share liability | 0 | 0 |
Total Liabilities | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | ||
Profit share liability | 3,312,896 | 2,836,743 |
Total Liabilities | $ 3,312,896 | $ 2,836,743 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details 1) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
United States [Member] | ||||
Product revenue | $ 7,382,800 | $ 4,687,595 | $ 15,372,155 | $ 8,779,645 |
License revenue | 52,530 | 195,547 | 285,938 | 1,286,641 |
Demonstrations & Consulting revenue | 27,000 | 78,870 | 81,000 | 140,180 |
Equipment revenue | 23,643 | 57,705 | 217,346 | 110,585 |
Total | 7,485,973 | 5,019,717 | 15,956,439 | 10,317,051 |
Total [Member] | ||||
Product revenue | 7,382,800 | 4,687,595 | 15,372,155 | 8,779,645 |
License revenue | 52,530 | 195,547 | 285,938 | 1,286,641 |
Demonstrations & Consulting revenue | 27,000 | 78,870 | 81,000 | 140,180 |
Equipment revenue | 23,643 | 57,705 | 217,346 | 110,585 |
Total | $ 7,485,973 | $ 5,019,717 | $ 15,956,439 | $ 10,317,051 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details 2) - shares | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Total common stock equivalents excluded from diluted net loss per share | 3,659,814 | |
Warrant [Member] | ||
Total common stock equivalents excluded from diluted net loss per share | 4,285,000 | 4,285,000 |
Stock Options [Member] | ||
Total common stock equivalents excluded from diluted net loss per share | 19,108,576 | 16,068,326 |
Convertible Debt [Member] | ||
Total common stock equivalents excluded from diluted net loss per share | 23,393,576 | 20,395,326 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies (Details 3) | 3 Months Ended |
Sep. 30, 2022 shares | |
Summary of Significant Accounting Policies | |
Weighted average common stock outstanding | 89,871,132 |
Dilutive stock options (exercise price less than market price) at September 30, 2022 | 3,659,814 |
Total dilutive common stock equivalents outstanding | 93,530,946 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies (Details Narrative) - $ / shares | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Market price per share | $ 0.24 | |
Dilutive stock options | 3,659,814 | |
Two Suppliers [Member] | Purchase [Member] | ||
Concentration risk percentage | 86% | |
Three Suppliers [Member] | Purchase [Member] | ||
Concentration risk percentage | 84% | |
Revenue [Member] | Second Customer [Member] | ||
Concentration risk percentage | 15% | 15% |
Revenue [Member] | First Customer [Member] | ||
Concentration risk percentage | 19% | 17% |
Revenue [Member] | Third Customer [Member] | ||
Concentration risk percentage | 13% | 13% |
Revenue [Member] | Fourth Customer [Member] | ||
Concentration risk percentage | 12% | 11% |
Accounts Receivable [Member] | Second Customer [Member] | ||
Concentration risk percentage | 18% | 15% |
Accounts Receivable [Member] | First Customer [Member] | ||
Concentration risk percentage | 20% | 18% |
Accounts Receivable [Member] | Third Customer [Member] | ||
Concentration risk percentage | 16% | 14% |
Accounts Receivable [Member] | Fourth Customer [Member] | ||
Concentration risk percentage | 11% | 14% |
Accounts Receivable [Member] | Fifth Customer [Member] | ||
Concentration risk percentage | 11% | 14% |
Accounts Receivable [Member] | Sixth Customer [Member] | ||
Concentration risk percentage | 10% | 12% |
Accounts Payable And Accrued Expenses [Member] | Two Vendors [Member] | ||
Concentration risk percentage | 68% | 66% |
Liquidity and Financial Condi_2
Liquidity and Financial Condition (Details Narrative) - USD ($) | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Maturity date | Oct. 31, 2022 | ||
Extended maturity date | Aug. 25, 2025 | ||
Accumulated deficit | $ 68,052,382 | $ 67,116,913 | |
Cash | 1,257,148 | $ 1,388,307 | |
Cash provided by operating activities | (367,755) | $ (306,033) | |
Going Concern [Member] | |||
Accumulated deficit | (68,100,000) | ||
Cash | 1,300,000 | ||
Net loss | (900,000) | ||
Working capital | 220,000 | ||
Principal amount | 12,900,000 | ||
Cash provided by operating activities | $ 40,000 |
Inventory (Details)
Inventory (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Inventory | ||
Raw materials | $ 576,632 | $ 637,084 |
Spare parts | 83,357 | 86,118 |
Finished goods | 299,600 | 352,199 |
Inventory total | $ 959,589 | $ 1,075,401 |
Property And Equipment Net (Det
Property And Equipment Net (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Property and equipment, gross | $ 2,842,031 | $ 2,831,304 |
Less: accumulated depreciation | (2,820,671) | (2,809,467) |
Construction in process | 1,807,707 | 1,807,707 |
Property and equipment, net | 1,829,067 | 1,829,544 |
Trucking Equipment [Member] | ||
Property and equipment, gross | 845,102 | 834,375 |
Office Equipment Computer Equipment and Software [Member] | ||
Property and equipment, gross | 20,295 | 20,295 |
Equipment & Installation [Member] | ||
Property and equipment, gross | $ 1,976,634 | $ 1,976,634 |
Property And Equipment Net (D_2
Property And Equipment Net (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Property and Equipment, Net | ||||
Depreciation expense | $ 342 | $ 12,445 | $ 11,204 | $ 56,824 |
Method of depreciation description | The Company uses the straight-line method of depreciation over estimated useful lives of 2 to 5 years |
Intellectual Property (Details)
Intellectual Property (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Intellectual Property | ||
Licenses and patents | $ 3,068,995 | $ 3,068,995 |
Less: Accumulated amortization | (1,108,248) | (954,798) |
Intellectual property, net | $ 1,960,747 | $ 2,114,197 |
Intellectual Property (Details
Intellectual Property (Details Narrative) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 USD ($) integer $ / shares shares | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) integer $ / shares shares | Sep. 30, 2021 USD ($) | Dec. 31, 2021 shares | |
Amortization expense charged to cost and expenses | $ 51,150 | $ 51,150 | $ 153,450 | $ 153,450 | |
Estimated amortization cost for 2022 | 204,600 | 204,600 | |||
Estimated amortization cost for 2023 | 204,600 | 204,600 | |||
Estimated amortization cost for 2024 | 204,600 | 204,600 | |||
Estimated amortization cost for 2025 | 204,600 | 204,600 | |||
Estimated amortization cost for 2026 | $ 204,600 | $ 204,600 | |||
Shares issued | shares | 89,871,132 | 89,871,132 | 89,115,951 | ||
On April 24, 2017 [Member] | |||||
Purchase price of intellectual property | $ 2,500,000 | ||||
Shares issued | shares | 925,000 | 925,000 | |||
Shares issued, value | $ 518,000 | $ 518,000 | |||
Shares issued, price per share | $ / shares | $ 0.56 | $ 0.56 | |||
On April 24, 2017 [Member] | Inventors designated by EERCF [Member] | |||||
Shares issued | shares | 296,002 | 296,002 | |||
On April 24, 2017 [Member] | EERCF [Member] | |||||
Shares issued | shares | 628,998 | 628,998 | |||
Number of patent applications | integer | 42 | 42 |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) - USD ($) | 1 Months Ended | 9 Months Ended | ||||
Oct. 31, 2021 | Feb. 28, 2021 | Jan. 31, 2021 | Feb. 25, 2020 | Sep. 30, 2022 | Apr. 14, 2020 | |
Maturity date | Oct. 31, 2022 | |||||
Paycheck Protection Program [Member] | ||||||
Secured loan, principal amount | $ 299,300 | |||||
Extinguishment of debt | $ 299,300 | |||||
First International Bank & Trust [Member] | ||||||
Extinguishment of debt | $ 301,377 | |||||
Proceeds from loan | $ 299,380 | |||||
Business Loan Agreement [Member] | MES, Inc. [Member] | ||||||
Maturity date | Feb. 26, 2021 | |||||
Secured loan, principal amount | $ 200,000 | |||||
Rate of interest | 8.75% |
Convertible Notes Payable (Deta
Convertible Notes Payable (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Apr. 09, 2021 | Mar. 07, 2021 | Aug. 18, 2021 | Sep. 30, 2021 | Sep. 30, 2022 | Dec. 31, 2021 | Jun. 15, 2018 | |
Common stock, price exceed | $ 1 | ||||||
Debt conversionof outstanding princcipal amount | $ 30,000 | ||||||
Issuance of stock for conversion of convertible notes, Shares | 60,000 | ||||||
Common stock, par value | $ 0.001 | $ 0.001 | |||||
Issuance of stock for conversion of convertible notes, Amount | $ 10,000 | ||||||
June 18, 2019 through October 23, 2019 [Member] | |||||||
Common stock, par value | $ 1 | ||||||
Unsecured convertible notes and warrants | $ 2,600,000 | ||||||
Conversion ratio | 0.50 | ||||||
Notes issued 2013 [Member] | |||||||
Debt conversionof outstanding princcipal amount | $ 10,000 | ||||||
Issuance of stock for conversion of convertible notes, Shares | 20,000 | ||||||
Common stock, par value | $ 0.50 | ||||||
Issuance of stock for conversion of convertible notes, Amount | $ 10,000 | ||||||
Notes 2013 [Member] | |||||||
Common stock, par value | $ 1 | ||||||
Unsecured convertible notes and warrants | $ 560,000 | ||||||
July 30, 2013 through December 24, 2013 [Member] | |||||||
Convertible note | $ 1,902,500 | ||||||
February 26, 2021 [Member] | |||||||
Common stock, par value | $ 0.50 | ||||||
Common stock shares issued | 100,000 | ||||||
Common stock shares issued, amount | $ 50,000 | ||||||
February 26, 2021 and March 8, 2021 [Member] | |||||||
Common stock, par value | $ 0.50 | ||||||
Common stock shares issued | 1,030,000 | 690,000 | |||||
Common stock shares issued, amount | $ 345,000 | ||||||
Principal outstanding on notes | $ 515,000 | ||||||
February 8, 2021 to February 15, 2021 [Member] | |||||||
Common stock, par value | $ 0.50 | ||||||
Common stock shares issued | 1,880,000 | ||||||
Common stock shares issued, amount | $ 940,000 | ||||||
June 17, 2021 and June 23, 2021 [Member] | |||||||
Common stock shares issued | 229,500 | ||||||
Common stock shares issued, amount | $ 5,100,000 | ||||||
Convertible note | $ 2,550,000 | ||||||
Conversion cost | 98,515 | ||||||
Converted amount | 229,500 | ||||||
August 31, 2018 through October 30, 2018 [Member] | |||||||
Unsecured convertible notes and warrants | $ 300,000 |
Related party (Details)
Related party (Details) - Note Payable Related Party [Member] - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Unsecured Note Payable | $ 13,154,931 | $ 13,154,931 |
Less fair value adjustment on extinguishment | (488,274) | 0 |
Less discounts and debt issuance costs | 0 | (1,283,677) |
Total unsecured note payable | 12,666,657 | 11,871,254 |
Less current portion | 0 | (11,871,254) |
Unsecured note payable, net of current portion | $ 12,666,657 | $ 0 |
Related party (Details 1)
Related party (Details 1) - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Related Party | ||
Profit Share, Beginning balance | $ 2,836,743 | $ 2,305,308 |
Addition | 0 | 0 |
Loss on change in fair value of profit share | 476,153 | 386,951 |
Profit Share, Ending balance | $ 3,312,896 | $ 2,692,259 |
Related party (Details Narrativ
Related party (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Jun. 13, 2022 | Aug. 30, 2022 | Mar. 31, 2019 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Oct. 28, 2022 | Feb. 25, 2019 | Nov. 29, 2016 | |
Purchase of pick up truck from CFO | $ 10,000 | |||||||||
Interest expenses | 1,204,488 | $ 1,382,366 | $ 41,319 | $ 41,432 | ||||||
Unamortized balance of discount | 0 | |||||||||
Debt issuance costs | $ 0 | |||||||||
Proceeds from issuance of equity securities | 12,000,000 | |||||||||
Maturity date | Oct. 31, 2022 | |||||||||
Extension of maturity Date | Oct. 31, 2022 | |||||||||
Remaining debt discount | $ 1,204,488 | 1,777,243 | ||||||||
Related party debt | 250,000 | 0 | ||||||||
Debt Repayment Agreement [Member] | ||||||||||
Profit share valuation | 2,305,308 | |||||||||
Profit share valuation adjusted | $ 4,026,568 | |||||||||
MEEC [Member] | ||||||||||
Interest rate | 21% | |||||||||
Fair Value of sharing profit | $ 1,954,383 | |||||||||
Yearly payment description | estimated term of sixteen years with between $100,000 to $350,000 paid quarterly starting in February 2024, and an annual market interest rate of 21% | |||||||||
Kaye Cooper Kay & Rosenberg, LLP [Member] | ||||||||||
Related party debt | $ 145,833 | 206,554 | ||||||||
Legal services expense | 286,105 | $ 212,873 | ||||||||
Board of Directors Chairman [Member] | ||||||||||
Interest rate | 6% | |||||||||
Promissory note amount | $ 250,000 | |||||||||
Cash | $ 1,200,000 | |||||||||
Debt outstanding amount | $ 250,000 | |||||||||
Secured Note [Member] | ||||||||||
Maturity date | Aug. 25, 2022 | |||||||||
Extension of maturity Date | Aug. 25, 2025 | |||||||||
Interest rate | 15% | |||||||||
Principal outstanding on notes | $ 271,686 | $ 9,646,686 | ||||||||
AC Midwest Subordinated Note [Member] | ||||||||||
Remaining debt discount | 1,070,819 | |||||||||
Discount on debentures | $ 6,916,687 | |||||||||
Related party debt restructuring resulting in capital contribution | $ 3,412,204 | |||||||||
Market rate of interest | 21% | |||||||||
AC Midwest Unsecured Note [Member] | ||||||||||
Principal outstanding on notes | $ 13,154,931 | $ 13,000,000 | ||||||||
Increase in principal outstanding on note | $ 17,654,931 | |||||||||
Net licensing revenue | $ 3,500,000 | |||||||||
Repayment of debt description | 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 Unsecured Note [Member] | AC Midwest [Member] | ||||||||||
Principal outstanding on notes | $ 6,577,465 | |||||||||
Percentages of remaining outstanding principal balance | 50% | |||||||||
Percentages of aggregate outstanding principal balance | 50% |
Operating Leases (Details)
Operating Leases (Details) | Sep. 30, 2022 USD ($) |
Operating Leases | |
2023 | $ 92,040 |
2024 | 22,500 |
Total | 114,540 |
Less discount | (2,856) |
Total lease liabilities | 111,684 |
Less current portion | (78,494) |
Operating lease obligation, net of current portion | $ 33,190 |
Operating Leases (Details 1)
Operating Leases (Details 1) - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Operating Leases | ||
Operating lease cost | $ 283,074 | $ 304,056 |
Short-term lease cost (1) | 0 | 5,310 |
Total lease cost | $ 283,074 | $ 309,366 |
Operating Leases (Details Narra
Operating Leases (Details Narrative) - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | |
Weighted average discount rate | 5% | |
Lease obligations | 1 year | |
Right-of-use asset, amortization | $ 202,070 | |
Operating lease liability | 283,074 | |
Operating lease liability | 33,190 | $ 54,551 |
2016 [Member] | Trailers [Member] | ||
Monthly payments | 24,760 | |
Corsicana Warehouse [Member] | July 1, 2015 [Member] | ||
Operating lease liability | $ 145,267 | |
Lease term | five-year | |
Monthly rent expenses | $ 3,750 | |
Monthly expenses pro rata basis | $ 882 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) | 1 Months Ended | 9 Months Ended |
Jul. 17, 2019 | Sep. 30, 2022 | |
Commercial Customers [Member] | ||
Contracts expiry date, description | 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 contracts expire between 2022 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) | 9 Months Ended |
Sep. 30, 2022 USD ($) $ / shares shares | |
Number of shares | |
Number of shares, Beginning balance | shares | 18,318,326 |
Number of shares, Grants | shares | 1,200,000 |
Number of shares, Expirations | shares | (400,000) |
Number of shares, Exercises | shares | (9,750) |
Number of shares, Ending balance | shares | 19,108,576 |
Options exercisable, Ending balance | shares | 19,108,576 |
Weighted Average Exercise Price | |
Weighted Average Exercise Price, Beginning balance | $ / shares | $ 0.53 |
Weighted Average Exercise Price, Grants | $ / shares | 0.21 |
Weighted Average Exercise Price, Expirations | $ / shares | 1.03 |
Weighted Average Exercise Price, Exercises | $ / shares | 0.25 |
Weighted Average Exercise Price, Ending balance | $ / shares | 0.50 |
Options exercisable, Ending balance | $ / shares | $ 0.50 |
Weighted Average Remaining Contractual Life (years) | |
Weighted Average Remaining Contractual Life (years), Beginning balance | 2 years 10 months 20 days |
Weighted Average Remaining Contractual Life (years), Ending balance | 2 years 6 months 14 days |
Weighted Average Remaining Contractual Life exercisable, Ending balance | 2 years 6 months 14 days |
Aggregate Intrinsic Value | |
Aggregate Intrinsic Value, Beginning balance | $ | $ 2,961,965 |
Aggregate Intrinsic Value, Ending balance | $ | 158,428 |
Options exercisable, Ending balance, Intrinsic value | $ | $ 158,428 |
Stock Based Compensation (Det_2
Stock Based Compensation (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||
May 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Sep. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2021 | Sep. 30, 2022 | Dec. 31, 2021 | |
Recorded expense | $ 615,000 | |||||||
Option expiry term | five years | |||||||
Exercisable per share | $ 0.21 | $ 0.21 | ||||||
Option value | $ 143,745 | $ 143,745 | ||||||
Expected term | 2 years 6 months | |||||||
Volatility | 96.83% | |||||||
Discount rate | 2.62% | |||||||
Dividend | $ 0 | |||||||
Stock issued for services, amount | $ 160,000 | $ 644,250 | ||||||
Shares issued | 89,871,132 | 89,871,132 | 89,115,951 | |||||
Intrinsic Value [Member] | ||||||||
Closing stock price | $ 0.54 | $ 0.54 | ||||||
Minimum [Member] | ||||||||
Option exercise price per share | 0.20 | 0.20 | ||||||
Maximum [Member] | ||||||||
Option exercise price per share | $ 0.33 | $ 0.33 | ||||||
Selling, General and Administrative Expenses [Member] | ||||||||
Stock based compensation expense | $ 83,126 | $ 197,143 | $ 453,052 | $ 533,409 | ||||
Jami Satterthwaite [Member] | ||||||||
Option to purchase share | 100,000 | 100,000 | ||||||
Two Employees [Member] | ||||||||
Option to purchase share | 50,000 | 50,000 | ||||||
Two Director [Member] | ||||||||
Stock issued for conversion of convertible notes, shares | 250,000 | |||||||
Stock issued for services, amount | $ 55,000 | |||||||
James Trettel [Member] | John Pavlish [Member] | ||||||||
Option to purchase share | $ 500,000 | 500,000 | ||||||
December 1, 2021 [Member] | ||||||||
Stock issued for services, amount | $ 171,250 | |||||||
Shares issued | 250,000 | 250,000 | ||||||
May 1, 2021 [Member] | ||||||||
Shares issued | 15,869 | 125,000 | 15,869 | |||||
Option to purchase share | $ 25,000 | $ 125,000 | $ 25,000 | |||||
Exercise price | $ 0.42 | $ 0.81 | $ 0.42 | |||||
Market price per share | $ 1.15 | $ 1.15 | ||||||
Aggregate amount | $ 101,250 | |||||||
February 2, 2022 [Member] | ||||||||
Shares issued | 5,181 | 5,181 | ||||||
Stock issued for cashless exercise of stock options | 9,750 | |||||||
January 24, 2022 [Member] | ||||||||
Acquire an aggregate of shares | 700,000 | 700,000 | ||||||
Stock Option, valued | $ 138,623 | |||||||
Description of exercise price | exercisable at prices ranging from $1.15 to $1.20 per share | |||||||
Consulting Agreement [Member] | ||||||||
Stock issued for conversion of convertible notes, shares | 500,000 | |||||||
Stock issued for services, amount | $ 160,000 | $ 615,000 | ||||||
Business Development Agreement [Member] | March 30, 2021 [Member] | ||||||||
Stock issued for conversion of convertible notes, shares | 25,000 | |||||||
Stock issued for services, amount | $ 29,250 |
Warrants (Details)
Warrants (Details) - Warrant [Member] | 9 Months Ended |
Sep. 30, 2022 USD ($) $ / shares shares | |
Number of warrants, Beginning balance | shares | 4,285,000 |
Number of warrants, Ending balance | shares | 4,285,000 |
Warrants Exercisable, Ending balance | shares | 4,285,000 |
Weighted Average Exercise Price, Beginning balance | $ / shares | $ 0.63 |
Weighted Average Exercise Price, Grants | $ / shares | 0 |
Weighted Average Exercise Price, Expirations | $ / shares | 0 |
Weighted Average Exercise Price, Exercised | $ / shares | 0 |
Weighted Average Exercise Price, Ending balance | $ / shares | 0.70 |
Weighted Average Exercise Price, Exercisable | $ / shares | $ 0.70 |
Weighted Average Remaining Contractual Life years, Beginning Balance | 2 years 5 months 19 days |
Weighted Average Remaining Contractual Life years, Ending Balance | 1 year 8 months 19 days |
Weighted Average Remaining Contractual Life years, Exercisable | 1 year 8 months 19 days |
Aggregate Intrinsic Value, Beginning balance | $ | $ 0 |
Aggregate Intrinsic Value, Grants | $ | 0 |
Aggregate Intrinsic Value, Expirations | $ | 0 |
Aggregate Intrinsic Value, Exercised | $ | 0 |
Aggregate Intrinsic Value, Exercisable | $ | 0 |
Aggregate Intrinsic Value, Ending balance | $ | $ 0 |
Warrants (Details 1)
Warrants (Details 1) | 9 Months Ended |
Sep. 30, 2022 $ / shares shares | |
Warrant [Member] | |
Number outstanding | shares | 4,285,000 |
Weighted Average Exercise Price Outstanding | $ 0.70 |
Weighted Average Remaining Contractua Life (years) | 1 year 8 months 19 days |
Exercise Price | $ 0.70 |
Warrant One [Member] | |
Number outstanding | shares | 4,285,000 |
Weighted Average Exercise Price Outstanding | $ 0.70 |
Weighted Average Remaining Contractua Life (years) | 1 year 8 months 19 days |
Exercise Price | $ 0.70 |
Warrants (Details Narrative)
Warrants (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | |||
Mar. 08, 2021 | Feb. 17, 2021 | Feb. 16, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | |
Warrants issued upon cashless exercise of warrants | 97,015 | 97,675 | 705,166 | ||
Warrants purchase upon common stock shares | 175,000 | 150,000 | 705,166 | ||
Warrants exercise price | $ 0.70 | $ 0.45 | $ 0.35 | ||
Fair value of warrants | $ 246,808 | $ 0 | $ 246,808 | ||
Warrants, market value | $ 1.29 | ||||
Minimum [Member] | |||||
Warrants, market value | 1.44 | ||||
Maximum [Member] | |||||
Warrants, market value | $ 1.63 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - Subsequent Event [Member] - shares | 1 Months Ended | |
Nov. 08, 2022 | Oct. 28, 2022 | |
Stock bonus awarded to CFO | 3,000,000 | |
Description of retention stock bonus vesting | the shares shall vest according to the following: 25.0% shall vest six months from the date of grant, and another 25.0% shall vest on each subsequent six-month anniversary of the date of grant so that the stock award is fully vested two years from the date of grant | |
Description of repurchase option agreement | the Company shall have the option to repurchase a portion of the shares of common stock of the Company owned by AC Midwest at a purchase price of $0.50 per share until the earlier of (i) the date AC Midwest’s beneficial ownership reaches 5.0% of the Company’s issued and outstanding common stock, or (ii) August 25, 2025 |