Document_And_Entity_Informatio
Document And Entity Information | 9 Months Ended | |
Sep. 30, 2014 | Nov. 13, 2014 | |
Document Information [Line Items] | ' | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 30-Sep-14 | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Entity Registrant Name | 'AXION INTERNATIONAL HOLDINGS, INC. | ' |
Entity Central Index Key | '0000753048 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Trading Symbol | 'AXIH | ' |
Entity Common Stock, Shares Outstanding | ' | 70,476,065 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Current assets: | ' | ' |
Cash and cash equivalents | $2,771,856 | $883,936 |
Accounts receivable, net of allowance | 1,088,558 | 888,214 |
Inventories | 4,525,250 | 3,955,515 |
Prepaid expenses and deposits | 205,212 | 280,140 |
Total current assets | 8,590,876 | 6,007,805 |
Property and equipment, net | 8,223,970 | 7,899,486 |
Goodwill | 1,492,132 | 1,492,132 |
Intangible assets | 5,000 | 610,000 |
Total assets | 18,311,978 | 16,009,423 |
Current liabilities: | ' | ' |
Accounts payable | 1,841,523 | 1,879,760 |
Accrued liabilities | 1,541,326 | 896,740 |
Derivative liabilities - 8% convertible promissory notes | 3,983,000 | 17,190,000 |
12% convertible promissory notes, net of discounts | 881,800 | 0 |
Current portion of long term debt | 187,287 | 185,347 |
Total current liabilities | 8,434,936 | 20,151,847 |
8% convertible promissory notes, net of discounts | 13,677,111 | 11,030,913 |
12% revolving credit agreement, net of discounts | 1,994,059 | 1,873,716 |
4.25% bank term loans | 4,400,000 | 4,400,000 |
5% bank promissory note | 4,000,000 | 0 |
Other debt | 214,134 | 300,127 |
Fair value of 10% convertible preferred stock warrants | 52,720 | 296,194 |
Total liabilities | 32,772,960 | 38,052,797 |
Commitments and contingencies | ' | ' |
10% convertible preferred stock, no par value; authorized 880,000 shares; 682,998 and 694,623 shares issued and outstanding at September 30, 2014 and December 31, 2013, respectively, net of discounts | 6,829,980 | 6,724,844 |
Stockholders' deficit: | ' | ' |
Common stock, no par value; authorized, 250,000,000 shares; 69,167,050 and 31,168,905 shares issued and outstanding at September 30, 2014 and December 31, 2013, respectively | 52,120,356 | 30,500,445 |
Accumulated deficit | -73,411,318 | -59,268,663 |
Total stockholders' deficit | -21,290,962 | -28,768,218 |
Total liabilities and stockholders' deficit | $18,311,978 | $16,009,423 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Common stock, no par value | $0 | $0 |
Common stock, authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 69,167,050 | 31,168,905 |
Common stock, shares outstanding | 69,167,050 | 31,168,905 |
10% Convertible Preferred Stock | ' | ' |
Temporary Equity, no par value | $0 | $0 |
Temporary Equity, authorized | 880,000 | 880,000 |
Temporary Equity, issued | 682,998 | 694,623 |
Temporary Equity, outstanding | 682,998 | 694,623 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Revenue | $3,122,912 | $1,272,689 | $12,027,909 | $4,532,274 |
Production | 3,902,250 | 1,189,172 | 14,718,367 | 4,145,008 |
Excess capacity & inventory adjustments | 369,806 | 293,941 | 1,829,700 | 394,740 |
Gross margin (loss) | -1,149,144 | -210,424 | -4,520,158 | -7,474 |
Operating expenses: | ' | ' | ' | ' |
Product development and quality management | 52,219 | 213,525 | 226,273 | 682,141 |
Marketing and sales | 126,047 | 202,106 | 801,633 | 703,201 |
General and administrative | 1,069,672 | 732,427 | 22,175,376 | 2,216,656 |
Total operating expenses | 1,247,938 | 1,148,058 | 23,203,282 | 3,601,998 |
Loss from operations | -2,397,082 | -1,358,482 | -27,723,440 | -3,609,472 |
Other (income) expenses: | ' | ' | ' | ' |
Interest expense | 478,496 | 190,318 | 1,320,127 | 542,971 |
Amortization of debt discount | 1,196,807 | 132,497 | 2,055,894 | 414,525 |
Impairment of intangible assets | 545,750 | 0 | 545,750 | 0 |
Fair value of common shares issued in excess of fair value of warrants tendered | -54 | 0 | 883,422 | 0 |
Change in fair value of derivative liabilities | -7,337,983 | -730,000 | -18,385,978 | -253,936 |
Total other (income) | -5,116,984 | -407,185 | -13,580,785 | 703,560 |
Net loss | 2,719,902 | -951,297 | -14,142,655 | -4,313,032 |
Accretion of preferred stock dividends and beneficial conversion feature | -152,237 | -405,936 | -717,615 | -1,218,273 |
Net income (loss) attributable to common shareholders | $2,567,665 | ($1,357,233) | ($14,860,270) | ($5,531,305) |
Weighted average common shares - | ' | ' | ' | ' |
Basic | 69,066,096 | 30,307,925 | ' | ' |
Diluted | 127,971,683 | 30,307,925 | ' | ' |
Weighted average common shares - basic and diluted | ' | ' | 46,382,952 | 29,583,289 |
Net income (loss) per share - | ' | ' | ' | ' |
Basic | $0.04 | ($0.04) | ' | ' |
Diluted | $0.02 | ($0.04) | ' | ' |
Net (loss) per share - basic and diluted | ' | ' | ($0.32) | ($0.19) |
CONSOLIDATED_STATEMENT_OF_STOC
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT (USD $) | Total | 10% Convertible Preferred Stock | Common Stock | Common Stock | Additional Paid-in Capital and Common Stock | Additional Paid-in Capital and Common Stock | Accumulated Deficit | Accumulated Deficit |
USD ($) | USD ($) | 10% Convertible Preferred Stock | USD ($) | 10% Convertible Preferred Stock | USD ($) | 10% Convertible Preferred Stock | ||
USD ($) | USD ($) | |||||||
Balance at Dec. 31, 2013 | ($28,768,218) | ' | ' | ' | $30,500,445 | ' | ($59,268,663) | ' |
Balance (in shares) at Dec. 31, 2013 | ' | ' | 31,168,905 | ' | ' | ' | ' | ' |
Shares issued upon conversion of 10% convertible preferred stock (in shares) | ' | 116,250 | ' | 116,250 | ' | ' | ' | ' |
Shares issued upon conversion of 10% convertible preferred stock | ' | 116,250 | ' | ' | ' | 116,250 | ' | ' |
Shares issued as payment in kind for dividends (in shares) | ' | ' | 672,391 | ' | ' | ' | ' | ' |
Shares issued as payment in kind for dividends | 527,338 | ' | ' | ' | 527,338 | ' | ' | ' |
Shares issued as payment in kind for interest (in shares) | ' | ' | 1,443,009 | ' | ' | ' | ' | ' |
Shares issued as payment in kind for interest | 1,069,537 | ' | ' | ' | 1,069,537 | ' | ' | ' |
Share-based compensation (in shares) | ' | ' | 303,540 | ' | ' | ' | ' | ' |
Share-based compensation | 666,601 | ' | ' | ' | 666,601 | ' | ' | ' |
Dividend on 10% convertible preferred stock | -496,229 | -496,229 | ' | ' | ' | -496,229 | ' | ' |
Amortization of beneficial conversion feature of 10% convertible preferred stock | ' | -221,386 | ' | ' | ' | -221,386 | ' | ' |
Fair value of warrants tendered and cancelled | -4,866,269 | ' | ' | ' | -4,866,269 | ' | ' | ' |
Fair value of common stock issued in exchange for warrants tendered and cancelled (in shares) | ' | ' | 35,462,955 | ' | ' | ' | ' | ' |
Fair value of common stock issued in exchange for warrants tendered and cancelled | 24,824,069 | ' | ' | ' | 24,824,069 | ' | ' | ' |
Net (loss) | -14,142,655 | ' | ' | ' | ' | ' | -14,142,655 | ' |
Balance at Sep. 30, 2014 | ($21,290,962) | ' | ' | ' | $52,120,356 | ' | ($73,411,318) | ' |
Balance (in shares) at Sep. 30, 2014 | ' | ' | 69,167,050 | ' | ' | ' | ' | ' |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 9 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Cash flow from operating activities: | ' | ' |
Net loss | ($14,142,655) | ($4,313,032) |
Adjustments to reconcile net (loss) to net cash used in operating activities: | ' | ' |
Depreciation and amortization | 781,232 | 147,605 |
Amortization of identifiable intangible assets | 59,250 | 0 |
Amortization of convertible debt discount | 2,055,894 | 414,525 |
Change in fair value of derivative liabilities | -18,142,504 | -294,576 |
Change in fair value of 10% convertible preferred stock warrants | -243,474 | 40,641 |
Change in allowance for doubtful account | 74,025 | 0 |
Interest expense paid in shares of common stock | 1,069,537 | 0 |
Share-based compensation | 666,601 | 142,654 |
Fair value of common stock issued in excess of fair value of warrants tendered | 19,957,800 | 0 |
Impairment of intangible assets | 545,750 | 0 |
Changes in operating assets and liability: | ' | ' |
Accounts receivable | -274,369 | -246,935 |
Inventories | -569,735 | -536,868 |
Prepaid expenses and deposits | 74,928 | 65,265 |
Accounts payable | -38,237 | 364,028 |
Accrued liabilities | 675,695 | 389,743 |
Net cash used in operating activities | -7,450,262 | -3,826,950 |
Cash flows from investing activities: | ' | ' |
Purchase of property and equipment | -1,105,716 | -1,165,521 |
Net cash used in investing activities | -1,105,716 | -1,165,521 |
Cash flows from financing activities: | ' | ' |
Proceeds from 5% bank term loans | 4,000,000 | 0 |
Recovery of shareholder short swing profits | 0 | 3,095,308 |
Repayments of other debt | -84,053 | 0 |
Net cash provided by financing activities | 10,443,898 | 5,245,309 |
Net increase in cash | 1,887,920 | 252,838 |
Cash and cash equivalents at beginning of period | 883,936 | 346,905 |
Cash and cash equivalents at end of period | 2,771,856 | 599,743 |
Supplemental disclosures of cash flow information: | ' | ' |
Cash paid for interest | 221,824 | 1,971 |
Conversion of 10% convertible preferred stock and debt | 116,250 | 39,000 |
Dividends on 10% convertible preferred stock | 496,229 | 533,569 |
Amortization of 10% convertible preferred stock discount | 221,386 | 684,704 |
Fair value of warrants issued with 8% convertible promissory notes | 391,365 | 249,151 |
Fair value of conversion option of 8% convertible promissory notes | 4,544,139 | 545,425 |
Fair value of common stock issued in exchange for warrants tendered and cancelled | 24,824,069 | 0 |
8% Convertible promissory note | ' | ' |
Cash flows from financing activities: | ' | ' |
Proceeds from convertible debt | 5,527,951 | 2,150,001 |
12% convertible promissory note | ' | ' |
Cash flows from financing activities: | ' | ' |
Proceeds from convertible debt | $1,000,000 | $0 |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Accounting Policies [Abstract] | ' | |||||||
Summary of Significant Accounting Policies | ' | |||||||
Note 1 - Summary of Significant Accounting Policies | ||||||||
(a) | Business and Basis of Financial Statement Presentation | |||||||
Axion International Holdings, Inc. (“Holdings”) was formed in 1981. In November 2007, Holdings entered into an Agreement and Plan of Merger, among Holdings, Axion Acquisition Corp., a Delaware corporation and a newly created direct wholly-owned subsidiary of Holdings (the “Merger Sub”), and Axion International, Inc., a Delaware corporation which incorporated on August 6, 2006 with operations commencing in November 2007 (“Axion”). On March 20, 2008 Holdings consummated the merger (the “Merger”) of Merger Sub into Axion, with Axion continuing as the surviving corporation and a wholly-owned subsidiary of Holdings. Axion Recycled Plastics Incorporated, an Ohio corporation and a wholly-owned subsidiary of Axion, was established to purchase certain tangible and intangible assets of a plastics recycling company during November 2013. | ||||||||
We design and manufacture innovative structural polymer solutions, engineering sustainable products and systems for applications that provide improved long-term value, consistent performance and reduced maintenance costs, offering a viable solution where stress and environmental factors cause degradation and deterioration of traditional products. Our proprietary products are based on patent rights we hold as well as manufacturing processes and formulations we have developed. | ||||||||
We manufacture, market and sell ECOTRAX® rail ties and STRUXURE® building products, with significant focus on construction mats. Our ECOTRAX® and STRUXURE® products are fully derived from post-consumer and post-industrial recycled plastics, such as high-density polyethylene, polystyrene and polypropylene. In patented and proprietary formulations, our products achieve structural strength, are capable of sustaining heavy loads and are resistant to changing shape under constant stress. Our products, manufactured through an extrusion process, are eco-friendly, non-corrosive, impervious to moisture, do not leach chemicals and are resistant to insects and rot. They possess superior lifecycles and generally have greater durability and require less maintenance than competitive traditional products. | ||||||||
For the past seven years, our products have been tested and validated in order to establish their structural strength. Our rail ties, our focus over the past few years, have been subjected to long-term performance testing, in which they have been under constant traffic in various environmental conditions. Short-span bridges have been constructed with our engineered products that have supported tanks and trains. We are in a position to expand upon this foundation we built through years of successful applications. When coupled with enhanced manufacturing capacity and process refinements, these foundational achievements should lead to a significant increase in commercial activity. | ||||||||
Our consolidated financial statements include the accounts of our wholly-owned subsidiaries and all intercompany balances and transactions have been eliminated in consolidation. | ||||||||
The accompanying unaudited condensed consolidated financial statements of Holdings have been prepared in accordance with Rule S-X of the Securities and Exchange Commission and with the instructions to Form 10-Q, and accordingly, they do not include all of the information and footnotes which may be required by generally accepted accounting principles for complete financial statements. | ||||||||
In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. However, the results from operations for the three and nine months ended September 30, 2014, are not necessarily indicative of the results that may be expected for the year ending December 31, 2014. The unaudited condensed consolidated financial statements should be read in conjunction with the consolidated December 31, 2013 financial statements and footnotes thereto included in the Company's Form 10-K filed with the SEC. | ||||||||
(b) | Cash and Cash Equivalents | |||||||
For purposes of our balance sheet and statement of cash flows, we consider all highly liquid debt instruments, purchased as an investment, with an original maturity of three months or less to be cash equivalents. At September 30, 2014 and December 31, 2013, we maintained all of our cash in demand or interest-bearing accounts at commercial banks. | ||||||||
(c) | Allowance for Doubtful Accounts | |||||||
We accrue a reserve on a receivable when, based upon the judgment of management, it is probable that a receivable will not be collected and the amount of any reserve may be reasonably estimated. At September 30, 2014 we accrued a reserve for uncollectable accounts receivables in the amount of approximately $74,000. We did not provide for an allowance at December 31, 2013. | ||||||||
(d) | Property and Equipment | |||||||
Property and equipment are recorded at cost and depreciated and amortized using the straight-line method over estimated useful lives of two to twenty years. Costs incurred that extend the useful life of the underlying asset are capitalized and depreciated over the remaining useful life. Repairs and maintenance are charged directly to operations as incurred. | ||||||||
Our property and equipment is comprised of the following: | ||||||||
September 30, | December 31, | |||||||
2014 | 2013 | |||||||
Equipment | $ | 17,893 | $ | 18,700 | ||||
Machinery and equipment | 9,881,835 | 8,803,087 | ||||||
Purchased software | 187,996 | 145,622 | ||||||
Furniture and fixtures | - | 14,599 | ||||||
Subtotal – property and equipment, at cost | 10,087,724 | 8,982,008 | ||||||
Less accumulated depreciation | -1,863,754 | -1,082,522 | ||||||
Net property and leasehold improvements | $ | 8,223,970 | $ | 7,899,486 | ||||
Depreciation expense charged to income during the three and nine months ended September 30, 2014 was approximately $268,300 and $781,200, respectively and for the corresponding periods of 2013 was $75,000 and $147,600, respectively. | ||||||||
Our financial results for the reprocessed plastics business during the six months ended June 30, 2014 and our decision during the three months ended September 30, 2014 to transition the assets acquired of the reprocessing plastics business to a business extruding our proprietary products, represented a triggering event requiring an impairment test of tangible and intangible assets acquired. Based on our test, we determined there was no impairment. | ||||||||
(e) | Exclusive Agreement | |||||||
In February 2007, we acquired an exclusive, royalty-bearing license (subject to minimum royalties) in specific but broad global territories to make, have made, use, sell, offer for sale, modify, develop, import, and export products made using patent applications owned by Rutgers University (“Rutgers”). We are using these patented technologies in the production of our composite rail ties and structural building products such as pilings, I-beams, T-beams and boards of various sizes. | ||||||||
Royalties incurred and payable to Rutgers, for the three and nine months ended September 30, 2014 were $50,000 and $150,000, respectively. For the corresponding periods of 2013, the amounts were $50,000 and $150,000, respectively | ||||||||
(f) | Definite Life Intangible Assets | |||||||
During the year ended December 31, 2013, we acquired a plastic reprocessing business which gave rise to certain definite life intangible assets associated with the acquired customer list and trademark. In accordance with FASB ASC topic, “Goodwill and Other Intangible Assets”, acquired definite life intangibles, are subject to amortization over their useful lives. The method of amortization selected reflects the pattern in which the economic benefits of the specific intangible asset is consumed or otherwise used up. Since that pattern cannot be reliably determined, a straight-line amortization method has been used over the estimated useful life. Intangible assets that are subject to amortization are reviewed for potential impairment at least annually or whenever events or circumstances indicate that carrying amounts may not be recoverable. For the three and nine months ended September 30, 2014 we amortized to operating expenses approximately $19,800 and $59,300, respectively of these intangible assets. | ||||||||
Our financial results for the reprocessed plastics business during the six months ended June 30, 2014 and our decision during the three months ended September 30, 2014 to transition the assets acquired of the reprocessing plastics business to a business extruding our proprietary products, represented a triggering event requiring intangible assets impairment tests. During the three months ended September 30, 2014, we determined that our definite life intangible asset associated with our acquired customer list was impaired and of no further value and accordingly we recorded a charge to other expenses for the remaining unamortized balance of approximately $545,800. | ||||||||
(g) | Indefinite Life Intangible Assets - Goodwill | |||||||
In accordance with the FASB ASC topic, “Goodwill and Other Intangible Assets”, indefinite life assets, such as goodwill, acquired as a result of our acquisition of the plastic reprocessing business and which are not subject to amortization are tested for impairment annually, or more frequently if events and circumstances indicate that the asset might be impaired. An impairment loss is recognized to the extent that the carrying amount exceeds the asset’s fair value. The fair value is determined by subtracting the fair value of all the identified tangible and intangible assets included in the business acquisition from the fair value of the purchase price. | ||||||||
Our financial results for the reprocessed plastics business during the six months ended June 30, 2014 and our decision during the three months ended September 30, 2014 to transition the reprocessing plastics business to a facility extruding our historical proprietary products, represented a triggering event requiring a goodwill impairment test. During the three months ended September 30, 2014, we tested the goodwill intangible asset associated with the acquisition in November 2013 of the reprocessed plastics business. The goodwill intangible asset was $1.5 million as of both September 30, 2014 and December 31, 2013 and based on our test for impairment done during the three months ended September 30, 2014, we determined there was no impairment. | ||||||||
(h) | Revenue and Related Cost Recognition | |||||||
In accordance with FASB ASC 605 “Revenue Recognition”, revenue is recognized when persuasive evidence of an agreement with the customer exists, products are shipped or title passes pursuant to the terms of the agreement with the customer, the amount due from the customer is fixed or determinable, collectability is reasonably assured, and there are no significant future performance obligations. In most cases, we receive a purchase order from our customer specifying the products requested and delivery instructions. We recognize revenue upon our delivery or shipment of the products as specified in the purchase order. In other cases where we have a contract which provides for a large number of products and few actual deliveries, the revenues are recorded each month as the products are produced and the risk of ownership passes to the customer upon pre-delivery acceptance. Prior to deliveries, our customer’s products are segregated from our inventory and not available for fulfilling other orders. | ||||||||
Our costs of sales are predominately comprised of the cost of raw materials and the costs and expenses associated with the production of the finished product. Prior to 2013, we utilized third-party manufacturers, where under one arrangement we purchased and supplied the raw materials to the third-party manufacturer and we paid them a per-pound cost to produce the finished product. Under another arrangement, the third-party manufacturer sourced and paid for the raw materials and we purchased the finished product from them at a cost per unit. Beginning in 2013, we initiated production of our finished products within a leased facility utilizing our own employees. Additionally, in late 2013 we acquired the assets of a plastics recycling company and began to reprocess recycled plastics for use in our own finished products and to sell to customers for use in their finished products. During the three months ended September 30, 2014, we began the conversion of that facility from reprocessing plastics to processing of both molded and continuous extruded engineered products. Our costs of sales may vary significantly as a result of the variability in the cost of our raw materials and the efficiency with which we plan and execute our manufacturing processes. | ||||||||
Historically, we have not had significant warranty replacements, but during the year ended December 31, 2013 due to the improper installation of certain of our rail ties, we agreed to replace the rail ties. Although from time to time we replace our engineered products for various reasons, we do not anticipate additional significant situations where we might again replace improperly installed products and therefore do not provide for future warrant expenses. | ||||||||
(i) | Income Taxes | |||||||
Income tax provision consists of federal and state corporate income taxes resulting from our operations in the United States. The income tax provision differs from the expected tax provisions computed by applying the U.S. Federal statutory rate to loss before income taxes primarily because we have historically maintained a full valuation allowance on our deferred tax assets and to a lesser extent because of the impact of state income taxes. As described in our Form 10-K for the year ended December 31, 2013, we maintain a full valuation allowance in accordance with ASC 740, “Accounting for Income Taxes”, on our net deferred tax assets. Until we achieve and sustain an appropriate level of profitability, we plan to maintain a valuation allowance on our net deferred tax assets. | ||||||||
We are current with the filing of our federal and state income tax returns. Our income tax returns are open to examination by federal and state authorities, based on statute of limitations, which is three years. | ||||||||
(j) | Derivative Instruments | |||||||
For derivative instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in fair value recognized in earnings each reporting period as a charge or credit to other expenses. We use the Monte Carlo simulation, and other models, as appropriate to value the derivative instruments at inception and subsequent valuation dates and the value is re-assessed at the end of each reporting period, in accordance with FASB ASC Topic 815, “Derivatives and Hedging”. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not the net-cash settlement of the derivative instrument could be required within twelve months of the balance sheet date. | ||||||||
(k) | Share-Based Compensation | |||||||
We record share-based compensation for transactions in which we exchange our equity instruments (shares of common stock, options and warrants) for services of employees, consultants and others based on the fair value of the equity instruments issued on the measurement date. The fair value of common stock awards is based on the observed market value of our stock. We calculate the fair value of options and warrants using the Black-Scholes option pricing model. Expense is recognized, net of expected forfeitures, over the period of performance. When the vesting of an award is subject to performance conditions, no expense is recognized until achievement of the performance condition is deemed to be probable. Awards to consultants are marked to market at each reporting period as they vest, and the resulting value is recognized as an adjustment against our earnings for the period. | ||||||||
(l) | Earnings and Loss Per Share | |||||||
Basic earnings or loss per share are computed by dividing income or loss available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share include the effects on our weighted average number of common shares outstanding of the potential dilution of (i) outstanding options and warrants, as determined using the treasury stock method and (ii) convertible securities as determined using the as-if converted method. The following table sets forth the computation of basic and diluted earnings per share for the three months ended September 30, 2014: | ||||||||
Numerator for basic earnings per share calculation - income attributable to common shareholders | $ | 2,567,665 | ||||||
Interest on various convertible promissory notes | 361,414 | |||||||
Dividends for 10% convertible preferred stock | 152,237 | |||||||
Numerator for diluted earnings per share calculation - income attributable to common shareholders | $ | 3,081,316 | ||||||
Denominator for basic earnings per share - weighted-average shares outstanding | 69,066,096 | |||||||
Incremental shares attributable to: | ||||||||
Options and warrants | 194,762 | |||||||
Various convertible promissory notes | 50,360,850 | |||||||
10% convertible preferred stock | 8,349,975 | |||||||
Denominator for diluted earnings per share | 127,971,683 | |||||||
Basic earnings per share | $ | 0.04 | ||||||
Diluted earnings per share | $ | 0.02 | ||||||
For the nine months ended September 30, 2014 there was no dilutive effects of such securities as we incurred a net loss for the period. | ||||||||
(m) | Fair Value of Financial Instruments | |||||||
Fair value is defined as an exit price, which is the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date. The degree of judgment utilized in measuring the fair value of assets and liabilities generally correlates to the level of pricing observability. Financial assets and liabilities with readily available, actively quoted prices or for which fair value can be measured from actively quoted prices in active markets generally have more pricing observability and require less judgment in measuring fair value. Conversely, financial assets and liabilities that are rarely traded or not quoted have less price observability and are generally measured at fair value using valuation models that require more judgment. These valuation techniques involve some level of management estimation and judgment, the degree of which is dependent on the price transparency of the asset, liability or market and the nature of the asset or liability. We have categorized our financial assets and liabilities that are recurring at fair value into a three-level hierarchy in accordance with these provisions. | ||||||||
(n) | Concentration of Credit Risk | |||||||
We maintain our cash with several major U.S. domestic banks. The amount held in these banks exceeds the insured limit of $250,000 from time to time. The amount which exceeded the insured limit was approximately $2.5 million and $0.3 million at September 30, 2014 and December 31, 2013, respectively. We have not incurred losses related to these deposits. | ||||||||
(o) | New Accounting Pronouncements | |||||||
In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services, and the guidance defines a five step process to achieve this core principle. The ASU is effective for the Company's 2017 fiscal year and may be applied either (i) retrospectively to each prior reporting period presented with an election for certain specified practical expedients, or (ii) retrospectively with the cumulative effect of initially applying the ASU recognized at the date of initial application, with additional disclosure requirements. The Company is evaluating the potential impact of this new guidance, but does not currently anticipate that the application of ASU No. 2014-09 will have a significant effect on its financial condition, results of operations or its cash flows. We have not yet determined the method by which we will adopt the standard in 2017. | ||||||||
In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern, which provides guidance on determining when and how to disclose going-concern uncertainties in an entity's financial statements. The new standard requires management to perform interim and annual assessments of an entity's ability to continue as a going concern within one year of the date the financial statements are issued. An entity must provide certain disclosures if conditions or events raise substantial doubt about the entity's ability to continue as a going concern. The ASU is effective for annual periods ending after December 15, 2016, and interim periods thereafter, with early adoption permitted. The Company does not currently anticipate that the application of ASU No. 2014-15 will have an effect on its financial condition, results of operations or its cash flows. | ||||||||
(p) | Use of Estimates | |||||||
The preparation of our financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in these financial statements and accompanying notes. Actual results could differ from those estimates. | ||||||||
Going_Concern
Going Concern | 9 Months Ended |
Sep. 30, 2014 | |
Going Concern [Abstract] | ' |
Going Concern | ' |
Note 2 - Going Concern | |
The accompanying financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America, which contemplates our continuation as a going concern. At September 30, 2014, we had working capital of approximately $155,900, a stockholders’ deficit of $21.3 million and have accumulated losses to date of $73.4 million. This raises substantial doubt about our ability to continue as a going concern. In view of these matters, realization of certain of the assets in the accompanying balance sheet is dependent upon our ability to meet our financing requirements, either by raising additional capital or the success of our business plan and future operations. We may seek additional means of financing to fund our business plan. There is no assurance that we will be successful in raising sufficient funds to assure our eventual profitability. We believe that actions planned and presently being taken to revise our operating and financial requirements provide us the opportunity to continue as a going concern. The financial statements do not include any adjustments that might result from these uncertainties. | |
Reportable_Business_Segments
Reportable Business Segments | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
Segment Reporting [Abstract] | ' | |||||||||||||
Reportable Business Segments | ' | |||||||||||||
Note 3 – Reportable Business Segments | ||||||||||||||
We purchased certain tangible and intangible assets of a plastics recycling company during November 2013, and began operating our second reportable business segment – reprocessed plastics. Prior to that purchase, we operated one reportable business segment – engineered products. Our segment reporting is consistent with the current manner of how our Chief Operating Decision Maker (“CODM”) and our board of directors view our business. Our business model has consisted of reprocessing recycled or waste plastics into plastic products to be sold to manufacturers who require certain plastics in their processes and we transfer certain of these reprocessed plastics to our other segment which produces engineered products utilizing recycled plastics and plastic composites. In order to allow our CODM and management to make business decisions, we report two segments –our reprocessed plastics segment and our engineered products segment. Decisions regarding allocation of resources and investment of capital have been made based on the reportable segments contribution to the financial success of the consolidated enterprise. | ||||||||||||||
Beginning during the three months ended September 30, 2014, a decision was made to transition the facility where our reprocessed plastics segment operated into a facility which processed engineered products, thereby returning to one reportable business segment. For the three months and nine months ended September 30, 2014, we continued to report in two segments as the transition was not completed by September 30, 2014. | ||||||||||||||
The significant accounting policies of each segment are described in note 1. | ||||||||||||||
Segment Reporting - For the Three Months Ended September 30, 2014 | ||||||||||||||
Engineered | Reprocessed | Corporate | ||||||||||||
Products | Plastics | Activities | Combined | |||||||||||
Statement of Operations | ||||||||||||||
Revenue | $ | 1,667,668 | $ | 1,455,244 | $ | - | $ | 3,122,912 | ||||||
Costs of sales: | ||||||||||||||
Production | 1,714,300 | 2,187,950 | - | 3,902,250 | ||||||||||
Excess capacity & inventory adjustments | 369,806 | - | - | 369,806 | ||||||||||
Gross margin (loss) | -416,438 | -732,706 | - | -1,149,144 | ||||||||||
Product development & quality management | - | - | 52,219 | 52,219 | ||||||||||
Marketing & sales | - | - | 126,047 | 126,047 | ||||||||||
General & administrative | - | - | 1,069,672 | 1,069,672 | ||||||||||
Total operating expenses | - | - | 1,247,938 | 1,247,938 | ||||||||||
Loss from operations | -416,438 | -732,706 | -1,247,938 | -2,397,082 | ||||||||||
Other (income) expenses: | ||||||||||||||
Interest expense | - | - | 478,496 | 478,496 | ||||||||||
Amortization of debt discounts | - | - | 1,196,807 | 1,196,807 | ||||||||||
Impairment of intangible assets | - | - | 545,750 | 545,750 | ||||||||||
Fair value of common shares issued in excess of fair value of warrants tendered | - | - | -54 | -54 | ||||||||||
Change in fair value of derivative liabilities | - | - | -7,337,983 | -7,337,983 | ||||||||||
Total other (income) | - | - | -5,116,984 | -5,116,984 | ||||||||||
Net income (loss) | $ | -416,438 | $ | -732,706 | $ | 3,869,046 | $ | 2,719,902 | ||||||
Total assets at September 30, 2014 | $ | 8,215,092 | $ | 5,622,686 | $ | 4,474,200 | $ | 18,311,978 | ||||||
Segment Reporting - For the Nine Months Ended September 30, 2014 | ||||||||||||||
Engineered | Reprocessed | Corporate | ||||||||||||
Products | Plastics | Activities | Combined | |||||||||||
Statement of Operations | ||||||||||||||
Revenue | $ | 6,630,042 | $ | 5,397,867 | $ | - | $ | 12,027,909 | ||||||
Costs of sales: | ||||||||||||||
Production | 6,412,835 | 8,305,532 | - | 14,718,367 | ||||||||||
Excess capacity & inventory adjustments | 1,829,700 | - | - | 1,829,700 | ||||||||||
Gross margin (loss) | -1,612,493 | -2,907,665 | - | -4,520,158 | ||||||||||
Product development & quality management | - | - | 226,273 | 226,273 | ||||||||||
Marketing & sales | - | - | 801,633 | 801,633 | ||||||||||
General & administrative | - | - | 22,175,376 | 22,175,376 | ||||||||||
Total operating expenses | - | - | 23,203,282 | 23,203,282 | ||||||||||
Loss from operations | -1,612,493 | -2,907,665 | -23,203,282 | -27,723,440 | ||||||||||
Other (income) expenses: | ||||||||||||||
Interest expense | - | - | 1,320,127 | 1,320,127 | ||||||||||
Amortization of debt discounts | - | - | 2,055,894 | 2,055,894 | ||||||||||
Impairment of intangible assets | 545,750 | 545,750 | ||||||||||||
Fair value of common shares issued in excess of fair value of warrants tendered | - | - | 883,422 | 883,422 | ||||||||||
Change in fair value of derivative liabilities | - | - | -18,385,978 | -18,385,978 | ||||||||||
Total other (income) | - | - | -13,580,785 | -13,580,785 | ||||||||||
Net (loss) | $ | -1,612,493 | $ | -2,907,665 | $ | -9,622,497 | $ | -14,142,655 | ||||||
(1) Since the plastics recycling company which provided the second segment to our business was acquired in November 2013, we did not report segment information for the three or nine months ended September 30, 2013. | ||||||||||||||
Inventories
Inventories | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Inventory, Net [Abstract] | ' | |||||||
Inventories | ' | |||||||
Note 4 - Inventories | ||||||||
Inventories are priced at the lower of cost or market and consist primarily of raw materials, parts for assembling our finished products and finished products. | ||||||||
Our inventories consisted of: | ||||||||
September | December | |||||||
30, | 31, | |||||||
2014 | 2013 | |||||||
Finished products | $ | 3,744,682 | $ | 2,930,753 | ||||
Production materials | 780,568 | 1,024,762 | ||||||
Total inventories | $ | 4,525,250 | $ | 3,955,515 | ||||
Since we engaged third-party contract manufacturers to produce our finished products in the past, certain inventories at September 30, 2014 and December 31, 2013 are located at these third-party contract manufacturing locations. We carry adequate insurance for loss on this inventory. | ||||||||
Accrued_Liabilities
Accrued Liabilities | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Accrued Liabilities [Abstract] | ' | |||||||
Accrued Liabilities | ' | |||||||
Note 5 - Accrued Liabilities | ||||||||
The components of accrued liabilities are: | ||||||||
September 30, | December 31, | |||||||
2014 | 2013 | |||||||
Royalties | $ | 470,047 | $ | 235,772 | ||||
Interest | 418,425 | 248,763 | ||||||
Rent | 273,106 | 78,797 | ||||||
10% convertible preferred stock dividends | 152,237 | 183,346 | ||||||
Payroll | 115,593 | 119,937 | ||||||
Real estate taxes | 83,569 | 8,962 | ||||||
Miscellaneous | 28,349 | 21,163 | ||||||
Total accrued liabilities | $ | 1,541,326 | $ | 896,740 | ||||
Derivative_Liabilities
Derivative Liabilities | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
Derivative Liabilities [Abstract] | ' | |||||||||||||
Derivative Liabilities | ' | |||||||||||||
Note 6 - Derivative Liabilities | ||||||||||||||
8% Convertible Promissory Notes (2012) – Conversion Option and Warrants | ||||||||||||||
Prior to, and through April 8, 2014, we issued 8% convertible promissory notes (the “8% Notes”). See Note 7 for further discussion. The 8% Notes met the definition of a hybrid instrument, as defined in the ASC Topic 815 “Derivatives and Hedging” (“ASC 815”). The hybrid instrument was composed of a debt instrument, as the host contract, and an option to convert the debt outstanding under the terms of the 8% Notes, into shares of our common stock. The 8% Notes were issued with a warrant to purchase shares of our common stock. Both the conversion option and the warrants are derivative liabilities. The conversion option derives its value based on the underlying fair value of the shares of our common stock which is not clearly and closely related to the underlying host debt instrument since the economic characteristics and risk associated with the conversion option derivative are based on the common stock fair value. The warrants do not qualify as equity under ASC 815. Accordingly, changes in the fair value of these warrant and conversion option liabilities are immediately recognized in earnings and classified as a change in fair value in the statement of operations. | ||||||||||||||
We determined the fair value of the conversion option and warrant derivative liabilities on the various dates of issuance and recorded these fair values as a discount to the debt and a derivative liability. The aggregate fair value of all the conversion options on September 30, 2014 was $3.9 million. The $7.2 million decrease in the fair value of this derivative liability during the three months ended September 30, 2014 was recorded as a change in derivative liability in the statement of operations. | ||||||||||||||
During the three months ended June 30, 2014, we offered all warrant holders the right to exchange their warrants for their fair value, as calculated using the Black-Scholes option pricing model, for shares of common stock. All warrants associated with the 8% Notes were exchanged for shares of common stock resulting in no derivative liability for the warrants at June 30, 2014. This decrease in fair value of $3.4 million during the three months ended June 30, 2014 was recorded as a change in fair value of derivative liability in the statement of operations. The fair value of common stock issued in exchange for warrants tendered exceeded the fair value of the warrant liability which resulted in compensation expense for all warrant holder considered affiliates of $19.1 million and approximately $883,500 of additional expense classified as fair value of common stock issued in excess of fair value of warrants tendered for the three and nine months ended September 30, 2014. | ||||||||||||||
12% Convertible Promissory Notes – Conversion Option | ||||||||||||||
During the three months ended September 30, 2014, we issued 12% convertible promissory notes (the “12% Notes”). See Note 7 for further discussion. The 12% Notes met the definition of a hybrid instrument, as defined in the ASC Topic 815 “Derivatives and Hedging” (“ASC 815”). The hybrid instrument was composed of a debt instrument, as the host contract, and an option to convert the debt outstanding under the terms of the 12% Notes, into shares of our common stock. The conversion option is a derivative liability. The conversion option derives its value based on the underlying fair value of the shares of our common stock which is not clearly and closely related to the underlying host debt instrument since the economic characteristics and risk associated with the conversion option derivative are based on the common stock fair value. Accordingly, changes in the fair value of the conversion option liabilities are immediately recognized in earnings and classified as a change in fair value in the statement of operations. | ||||||||||||||
We determined the fair value of the conversion option derivative liability on the date of issuance and recorded the fair value of $157,000 as a discount to the debt and a derivative liability. The aggregate fair value of the conversion option on September 30, 2014 was $111,000. The $46,000 decrease in the fair value of this derivative liability during the three months ended September 30, 2014 was recorded as a change in derivative liability in the statement of operations. | ||||||||||||||
The estimated fair values of the derivative liabilities associated with the 8% Notes and the 12% Notes, for the conversion options and warrants issued through and as of September 30, 2014 were computed by a third party using Monte Carlo simulations based on the following ranges for each assumption: | ||||||||||||||
September 30, | ||||||||||||||
At Issuances | 2014 | |||||||||||||
Volatility | 40.0% to 45.0 | % | 40 | % | ||||||||||
Risk-free interest rate | 0.11% to 0.3 | % | 0.3% to 0.07 | % | ||||||||||
Dividend yield | 0 | % | 0 | % | ||||||||||
Expected life | 1.1 to 1.6 years | 0.5 to 0.9 years | ||||||||||||
Placement Agent Warrants | ||||||||||||||
We issued warrants to the placement agents for the sale of our 10% convertible preferred stock, to purchase 58,352 shares of 10% convertible preferred stock at $10 per share. Since the underlying 10% convertible preferred stock is redeemable by the holder after three years from the date of purchase, we recorded the fair value of the warrants at issuance, as a liability on our balance sheet and we re-measure this warrant liability at each reporting date, with changes in fair value recognized in earnings each reporting period. We estimated the fair value at September 30, 2014 of this derivative liability by using the Black-Scholes option pricing model with the following assumptions - (i) no dividend yield, (ii) an expected volatility of 85%, (iii) a risk-free interest rate 0.36%, and (iv) an expected life of approximately 1-1/2 years. The fair value of the warrant liability at September 30, 2014 and December 31, 2013 was approximately $52,700 and $296,200, respectively and we recognized a credit to our statement of operations for the decrease in fair value of the warrant liability for the three and nine months ended September 30, 2014 of approximately $67,700 and $243,500, respectively. | ||||||||||||||
Accounting for Fair Value Measurements | ||||||||||||||
We are required to disclose the fair value measurements required by Accounting for Fair Value Measurements. The derivative liabilities recorded at fair value in the balance sheet as of September 30, 2014 and December 31, 2013 is categorized based upon the level of judgment associated with the inputs used to measure its fair value. Hierarchical levels, defined by Accounting for Fair Value Measurements are directly related to the amount of subjectivity associated with the inputs to fair valuation of the liability is as follows: | ||||||||||||||
Level 1 - | Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date; | |||||||||||||
Level 2 - | Inputs other than Level 1 inputs that are either directly or indirectly observable; and | |||||||||||||
Level 3 - | Unobservable inputs, for which little or no market data exist, therefore requiring an entity to develop its own assumptions. | |||||||||||||
The following table summarizes the financial liabilities measured at fair value on a recurring basis as of September 30, 2014 and December 31, 2013, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value: | ||||||||||||||
As of September 30, 2014 | ||||||||||||||
Derivative | ||||||||||||||
Liabilities | ||||||||||||||
at | ||||||||||||||
Level 1 | Level 2 | Level 3 | Fair Value | |||||||||||
8% Convertible promissory notes: | ||||||||||||||
Conversion option | $ | - | $ | - | $ | 3,872,000 | $ | 3,872,000 | ||||||
Warrants | - | - | - | - | ||||||||||
12% Convertible promissory notes: | ||||||||||||||
Conversion option | - | - | 111,000 | 111,000 | ||||||||||
Derivative liabilities - Current | - | - | 3,983,000 | 3,983,000 | ||||||||||
Placement agent warrants - Non-current | - | - | 52,720 | 52,720 | ||||||||||
Derivative liabilities - Total | $ | - | $ | - | $ | 4,035,720 | $ | 4,035,720 | ||||||
As of December 31, 2013 | ||||||||||||||
Derivative | ||||||||||||||
Liabilities | ||||||||||||||
at | ||||||||||||||
Level 1 | Level 2 | Level 3 | Fair Value | |||||||||||
8% Convertible promissory notes: | ||||||||||||||
Conversion option | $ | - | $ | - | $ | 12,400,000 | $ | 12,400,000 | ||||||
Warrants | - | - | 4,790,000 | 4,790,000 | ||||||||||
Derivative liabilities - Current | - | - | 17,190,000 | 17,190,000 | ||||||||||
Placement agent warrants - Non-current | - | - | 296,194 | 296,194 | ||||||||||
Derivative liabilities - Total | $ | - | $ | - | $ | 17,486,194 | $ | 17,486,194 | ||||||
The following table is a reconciliation of the derivative liabilities for which Level 3 inputs were used in determining fair value during the three and nine months ended September 30, 2014 and 2013: | ||||||||||||||
For the Three Months Ended September 30, 2014 | ||||||||||||||
Fair Value | ||||||||||||||
Balance - | of | Balance - | ||||||||||||
July 1, | Derivative | Change in | September 30, | |||||||||||
2014 | Liability | Fair Value | 2014 | |||||||||||
8% Convertible promissory notes: | ||||||||||||||
Conversion option | $ | 10,695,000 | $ | 402,000 | $ | -7,225,000 | $ | 3,872,000 | ||||||
Warrants | - | - | - | - | ||||||||||
12% Convertible promissory notes: | ||||||||||||||
Conversion option | - | 157,000 | -46,000 | 111,000 | ||||||||||
Derivative liabilities - Current | 10,695,000 | 559,000 | -7,271,000 | 3,983,000 | ||||||||||
Placement agent warrants - Non-current | 119,703 | - | -66,983 | 52,720 | ||||||||||
Derivative liabilities - Total | $ | 10,814,703 | $ | 559,000 | $ | -7,337,983 | $ | 4,035,720 | ||||||
For the Nine Months Ended September 30, 2014 | ||||||||||||||
Fair Value | ||||||||||||||
Balance - | of | Balance - | ||||||||||||
January 1, | Derivative | Change in | September 30, | |||||||||||
2014 | Liability | Fair Value | 2014 | |||||||||||
8% Convertible promissory notes: | ||||||||||||||
Conversion option | $ | 12,400,000 | $ | 4,387,139 | $ | -12,915,139 | $ | 3,872,000 | ||||||
Warrants | 4,790,000 | 391,365 | -5,181,365 | - | ||||||||||
12% Convertible promissory notes: | ||||||||||||||
Conversion option | 157,000 | -46,000 | 111,000 | |||||||||||
Derivative liabilities - Current | 17,190,000 | 4,935,504 | -18,142,504 | 3,983,000 | ||||||||||
Placement agent warrants - Non-current | 296,194 | - | -243,474 | 52,720 | ||||||||||
Derivative liabilities - Total | $ | 17,486,194 | $ | 4,935,504 | $ | -18,385,978 | $ | 4,035,720 | ||||||
For the Three Months Ended September 30, 2013 | ||||||||||||||
Fair Value | ||||||||||||||
Balance - | of | Balance - | ||||||||||||
July 1, | Derivative | Change in | September 30, | |||||||||||
2013 | Liability | Fair Value | 2013 | |||||||||||
8% Convertible promissory notes: | ||||||||||||||
Conversion option | $ | 1,520,000 | $ | - | $ | -460,000 | $ | 1,060,000 | ||||||
Warrants | 540,000 | - | -270,000 | 270,000 | ||||||||||
Derivative liabilities - Current | 2,060,000 | - | -730,000 | 1,330,000 | ||||||||||
Placement agent warrants - Non-current | 122,357 | - | - | 122,357 | ||||||||||
Derivative liabilities - Total | $ | 2,182,357 | $ | - | $ | -730,000 | $ | 1,452,357 | ||||||
For the Nine Months Ended September 30, 2013 | ||||||||||||||
Fair Value | ||||||||||||||
Balance - | of | Balance - | ||||||||||||
January 1, | Derivative | Change in | September 30, | |||||||||||
2013 | Liability | Fair Value | 2013 | |||||||||||
8% Convertible promissory notes: | ||||||||||||||
Conversion option | $ | 610,000 | $ | 545,426 | $ | -95,426 | $ | 1,060,000 | ||||||
Warrants | 220,000 | 249,151 | -199,151 | 270,000 | ||||||||||
Derivative liabilities - Current | 830,000 | 794,577 | -294,577 | 1,330,000 | ||||||||||
Placement agent warrants - Non-current | 81,716 | - | 40,641 | 122,357 | ||||||||||
Derivative liabilities - Total | $ | 911,716 | $ | 794,577 | $ | -253,936 | $ | 1,452,357 | ||||||
Debt
Debt | 9 Months Ended | |||||||||
Sep. 30, 2014 | ||||||||||
Debt Disclosure [Abstract] | ' | |||||||||
Debt | ' | |||||||||
Note 7 - Debt | ||||||||||
The components of our debt are summarized as follows: | ||||||||||
September 30, | December 31, | |||||||||
Due | 2014 | 2013 | ||||||||
8% convertible promissory notes (2012) | Beginning in August 2017 | $ | 16,628,188 | $ | 13,078,188 | |||||
12% revolving credit facility | 31-Dec-15 | 2,000,000 | 2,000,000 | |||||||
3% promissory note | 1-Feb-18 | 301,421 | 385,474 | |||||||
4.25% bank term loans | 15-Nov-18 | 4,500,000 | 4,500,000 | |||||||
8% convertible promissory notes (2014) | 11-Jun-19 | 2,000,000 | - | |||||||
12% convertible promissory notes | 31-Mar-15 | 1,000,000 | - | |||||||
5% bank promissory note | September 18 2017 | 4,000,000 | - | |||||||
Subtotal | 30,429,609 | 19,963,662 | ||||||||
Less debt discount | -5,075,218 | -2,173,559 | ||||||||
Subtotal – net of debt discount | 25,354,391 | 17,790,103 | ||||||||
Less current portion | 1,069,087 | 185,347 | ||||||||
Total – long term debt | $ | 24,285,304 | $ | 17,604,756 | ||||||
8% Convertible Promissory Notes (2012) | ||||||||||
Through April 8, 2014 pursuant to the terms of our 8% convertible promissory notes (the “2012 Notes”), we issued and sold to Melvin Lenkin, Samuel Rose and Allen Kronstadt collectively the “Investors”, (see Note 14 regarding related party transactions) and several unaffiliated investors (i) an aggregate principal amount of $15,628,188 convertible into shares of our common stock at $0.40 per share and an aggregate principal amount of $1,000,000, convertible into shares of our common stock at a conversion price equal to $0.74 per share, respectively subject to adjustment as provided on the terms of the 2012 Notes, and (ii) associated warrants to purchase, in the aggregate, 37.8 million shares of common stock, subject to adjustment as provided on the terms of the warrants. During the three months ended June 30, 2014, we offered all warrant holders the right to exchange their warrants for their fair value, as calculated using the Black-Scholes option pricing model, for shares of common stock. All warrants associated with the 2012 Notes were exchanged for shares of common stock. | ||||||||||
The 2012 Notes, including all outstanding principal and accrued and unpaid interest, are due and payable on the earlier of five years from date of issuance or upon the occurrence of an Event of Default (as defined in the 2012 Notes). We may prepay the 2012 Notes, in whole or in part, upon 60 calendar-days prior written notice to the holders thereof. Interest accrues on the 2012 Notes at a rate of 8.0% per annum, payable during the first three years that the 2012 Notes are outstanding in shares of common stock, valued at the weighted average price of a share of common stock for the twenty consecutive trading days prior to the interest payment date, pursuant to the terms of the 2012 Notes. During the fourth and fifth years that the 2012 Notes are outstanding, interest that accrues under the 2012 Notes shall be payable in cash. | ||||||||||
Interest expense for the three and nine months ended September 30, 2014 was approximately $316,300 and $922,200, respectively. Accrued interest at September 30, 2014 of approximately $316,300 was paid with 687,614 shares of common stock, in lieu of cash, which were issued subsequent to September 30, 2014. | ||||||||||
The issuance costs of approximately $146,700, plus the fair values at issuances of the conversion option derivative liability and the warrants derivative liability were recorded as a discount to the 2012 Notes. This debt discount is amortized to other expenses in our statement of operations over the initial term of the 2012 Notes. During the three and nine months ended September 30, 2014, we amortized $1.1 million and $1.9 million, respectively of the discount to other expenses in our statement of operations. For the corresponding periods for 2013, we amortized approximately $132,500 and $414,500, respectively to other expenses in our statement of operations. At September 30, 2014, the unamortized discount was approximately $4.9 million. See Note 6 for further discussion of these derivative liabilities. | ||||||||||
12% Revolving Credit Agreement | ||||||||||
During the year ended December 31, 2013, we entered into a Revolving Credit and Letter of Credit Support Agreement (the “Revolving Loan Agreement”) with MLTM Lending, LLC, a Maryland limited liability company (“MLTM”), and Samuel G. Rose (“Rose” and together with MLTM, the “Lenders”), pursuant to which the Lenders have agreed to lend us up to $2,000,000 on a revolving basis. In addition, the Revolving Loan Agreement provides that MLTM will provide letter of credit support to us of up to $500,000 (the “LC Sublimit”). Each revolving loan made under the Revolving Loan Agreement bears interest at 12% per annum, of which 4% is payable by us in cash on the first business day of each month, and 8% is payable by us in shares of our common stock on the first business day of each calendar quarter, valued at a price equal to the average of the Weighted Average Price (as such term is defined in the Revolving Loan Agreement) of a share of our common stock for 20 consecutive trading days prior to the interest payment date. Under the terms of the Revolving Loan Agreement, we may prepay the revolving loans at any time, in whole or in part, together with all accrued and unpaid interest, without premium or penalty. The Lenders may accelerate all amounts due under the Revolving Loan Agreement, together with accrued and unpaid interest, upon the occurrence of an Event of Default, as defined in the Revolving Loan Agreement. The maturity date of the Revolving Loan Agreement is December 31, 2015 (the “Maturity Date”). During the year ended December 31, 2013, we borrowed $2,000,000 less fees, under the Revolving Loan Agreement which remained outstanding through September 30, 2014. | ||||||||||
As consideration for the revolving loans extended under the Revolving Loan Agreement, with respect to the year ending December 31, 2013, and prior to each of December 31, 2014 and 2015, we are required to issue to the Lenders an aggregate of 200,000 shares of our common stock during each such calendar year, up to a total of 600,000 shares of our common stock. As consideration for MLTM providing letter of credit support, we are required to pay a letter of credit commission fee on the date of the Revolving Loan Agreement, and on each one year anniversary of the date of the Revolving Loan Agreement prior to the Maturity Date, in the amount equal to (i) 2% of the LC Sublimit in cash and (ii) shares of our common stock, with an aggregate value of 4% of the LC Sublimit, with each such share of our common stock valued at a price equal to the average of the Weighted Average Price of a share of our common stock for the 20 consecutive trading days prior to the date of payment. The payment of the letter of credit commission fee in cash and the issuance of the shares of common stock in payment of these fees results in additional interest expense. | ||||||||||
Interest expense for the three and nine months ended September 30, 2014 was approximately $59,700 and $186,800. Of the $186,800 of interest expense for the nine months ended September 30, 2014, approximately $70,700 was paid in cash or is to be paid in cash and the balance of approximately $116,100 was or will be paid in shares of common stock. | ||||||||||
In connection with the entry into the Revolving Loan Agreement, pursuant to the terms thereof, we and the Lenders entered into a Security Agreement pursuant to which the Borrowers were granted a security interest and lien in all of our accounts receivable and inventory to secure the Borrowers’ obligations under the Revolving Loan Agreement. | ||||||||||
The issuance costs of approximately $7,800, plus the fair values of the shares of our common stock of approximately $140,900, issued as consideration for the revolving loans and the letter of credit support, were recorded as a discount to the revolving loans. This debt discount is amortized to other expenses in our statement of operations over the twelve month period ended November 30, 2014. During the three and nine months ended September 30, 2014, we amortized approximately $23,400 and $120,300, respectively of the discount to other expenses in our statement of operations. At September 30, 2014, the unamortized discount was approximately $5,900. | ||||||||||
3% Promissory Note | ||||||||||
On November 15, 2013, through our subsidiary, we entered into an Asset Purchase Agreement (the “Purchase Agreement”), among Y City Recycling, LLC (“Y City”), and Brian Coll and Renee Coll (collectively, the “Sellers”). See note 3. Pursuant to the terms of the Purchase Agreement, we acquired certain assets from the Sellers relating to the operation of a recycled plastics facility located in Zanesville, Ohio (the “Facility”). As a component of the consideration paid by us for these asset was the assumption of a 3% promissory note (the “Promissory Note”) with a remaining principal balance of approximately $301,400 as of September 30, 2014. The principal and interest at 3% per annum, is payable in eighty-four monthly installments with the last installment due on February 1, 2018. | ||||||||||
The payment of the Promissory Note and all interest thereon is secured by a first interest in certain equipment owned by us. We may prepay the Promissory Note at any time, in whole or in part, together with all accrued and unpaid interest, without premium or penalty. | ||||||||||
Interest expense for the three and nine months ended September 30, 2014 of approximately $2,400 and $7,900, respectively was paid in cash. | ||||||||||
4.25% Bank Term Loans | ||||||||||
During the year ended December 31, 2013, we purchased certain tangible and intangible assets including property and equipment of Y City, which were funded, in part, by term loans (the “Bank Term Loans”) in the aggregate principal amounts of $1,000,000 and $3,500,000. Each of the Bank Term Loans bears interest at 4.25% per annum and matures on November 15, 2018. With respect to principal payments under the Bank Loans, $100,000 is due on each of November 15, 2014 and 2015, $250,000 is due on each of November 15, 2016 and 2017, and the balance of the principal amounts outstanding under the Bank Term Loans is due on November 15, 2018. The Bank Term Loans may be prepaid in full or in part at any time without premium or penalty. The holder may accelerate all amounts due under the Bank Term Loans, together with accrued and unpaid interest, upon the occurrence of an Event of Default, as defined in the documents. We were in compliance with the term of the Bank Term Loans at September 30, 2014. | ||||||||||
The Bank Term Loans are secured by a security interested in all of the equipment we purchased pursuant to this transaction and in certain of our equipment located at our Waco, Texas facility. | ||||||||||
Interest expense for the three and nine months ended September 30, 2014 of approximately $48,900 and $145,600, respectively was paid in cash. | ||||||||||
8% Convertible Promissory Notes (2014) | ||||||||||
During the nine months ended September 30, 2014 pursuant to the terms of our 8% convertible promissory notes (the “2014 Notes”), we issued and sold to MLTM Lending, LLC, Samuel Rose and Allen Kronstadt collectively the “Investors”, (see Note 14 regarding related party transactions) an aggregate principal amount of $2,000,000 of our 2014 Notes which are initially convertible into 7.5 million shares of our common stock, subject to adjustment as provided on the terms of the 2014 Notes, (i) at any time prescribed by the Investors or (ii) upon any date prior to June 11, 2019 (the “Maturity Date”) which the Company’s common shares are listed on a U.S. based stock exchange. | ||||||||||
The 2014 Notes, including all outstanding principal and accrued and unpaid interest, are due and payable on the Maturity Date or upon the occurrence of an Event of Default (as defined in the 2014 Notes). We may prepay the 2014 Notes, in whole or in part, upon notice to the holders thereof. Interest accrues on the 2014 Notes at a rate of 8.0% per annum, payable quarterly starting with September 30, 2014. For the quarter ended December 31, 2014 and for each subsequent quarter that the 2014 Notes are outstanding, the Investors shall have the right to have the interest paid in shares of common stock, valued at the weighted average price of a share of common stock for the twenty consecutive trading days ending with the end of the quarter, pursuant to the terms of the 2014 Notes. | ||||||||||
Interest expense for the three and nine months ended September 30, 2014 was approximately $36,700 and $43,200, respectively and was paid in cash prior to or subsequent to September 30, 2014. | ||||||||||
12% Convertible Promissory Notes | ||||||||||
During the three months ended September 30, 2014 pursuant to the terms of our 12% convertible promissory notes (the “12% Notes”), we issued and sold to MLTM Lending, LLC, Samuel Rose and Allen Kronstadt collectively the “Investors”, (see Note 14 regarding related party transactions) an aggregate principal amount of $1,000,000 of our 12% Notes. Upon sixty days’ notice, the principal due under the 12% Notes is convertible into shares of our common stock based on a Conversion Price which is 85% of the weighted average volume price per day of our common stock for the ten consecutive trading days preceding the day upon which the notice of conversion is received by us, pursuant to the 12% Notes. | ||||||||||
The 12% Notes, including all outstanding principal and accrued and unpaid interest, are due and payable on March 31, 2015 or upon the occurrence of an Event of Default (as defined in the 12% Notes). We may prepay the 12% Notes, in whole or in part, upon notice to the holders thereof. Interest accrues on the 12% Notes at a rate of 12% per annum, payable monthly starting with September 30, 2014. | ||||||||||
Interest expense for the three and nine months ended September 30, 2014 was approximately $8,400 and was paid in cash subsequent to September 30, 2014. | ||||||||||
5% Bank Promissory Note | ||||||||||
During the three months ended September 30, 2014, we borrowed $4.0 million from a commercial bank (the “Bank”) pursuant to the terms of a promissory note and loan agreement (the “5% Bank Note”). Interest accrues on the outstanding principal at a fixed interest rate of 5% per annum and is payable monthly. All outstanding principal and accrued but unpaid interest is due on September 18, 2017. The 5% Bank Note may be prepaid in full or in part at any time without premium or penalty. The Bank may accelerate all amounts due under the Bank Term Loans, together with accrued and unpaid interest, upon the occurrence of an Event of Default, as defined in the documents. We were in compliance with the terms of the 5% Bank Note at September 30, 2014. | ||||||||||
The Bank was induced to enter into the 5% Bank Note with the guarantee of Melvin Lenkin, Samuel Rose and Allen Kronstadt, collectively the “Investors”, (see Note 14 regarding related party transactions). In a separate agreement between the Bank and the Investors, the Investors agreed, among other terms, to guarantee to the Bank the full and punctual payment of all obligations which we have with the Bank in connection with the 5% Bank Note. | ||||||||||
Interest expense for the three and nine months ended September 30, 2014 of approximately $6,100 was paid in cash. | ||||||||||
10_Convertible_Redeemable_Pref
10% Convertible Redeemable Preferred Stock | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Features Of Convertible Preferred Stock [Abstract] | ' | |||||||
10% Convertible Redeemable Preferred Stock | ' | |||||||
Note 8 - 10% Convertible Redeemable Preferred Stock | ||||||||
The components of our 10% convertible preferred stock, classified as temporary equity in our balance sheet, are summarized as follows: | ||||||||
September 30, | December 31, | |||||||
2014 | 2013 | |||||||
10% convertible preferred stock - face value | $ | 6,829,980 | $ | 6,946,230 | ||||
Unamortized discount | - | -221,386 | ||||||
10% convertible preferred stock, net of discount | $ | 6,829,980 | $ | 6,724,844 | ||||
During the year ended December 31, 2011, we designated 880,000 shares of preferred stock as 10% convertible redeemable preferred stock (the “Preferred Stock”). The Preferred Stock has a stated value (the “Stated Value”) of $10.00 per share. The Preferred Stock and any dividends thereon may be converted into shares of our common stock at any time by the holder at a conversion rate, as adjusted (the “Conversion Rate”). The holders of the Preferred Stock are entitled to receive dividends at the rate of ten percent per annum payable quarterly. Dividends shall not be declared, paid or set aside for any series or other class of stock ranking junior to the Preferred Stock, until all dividends have been paid in full on the Preferred Stock. The dividends on the Preferred Stock are payable, at our option, in cash, if permissible, or in additional shares of common stock. The Preferred Stock is not subject to any anti-dilution provisions other than for stock splits and stock dividends or other similar transactions. The holders of the Preferred Stock shall have the right to vote with our stockholders in any matter. The number of votes that may be cast by a holder of our Preferred Stock shall equal the Stated Value of the Preferred Stock purchased divided by the Conversion Rate. | ||||||||
The Preferred Stock is redeemable for cash by the holder any time after the three-year anniversary from the initial purchase. The Preferred Stock were purchased during March and April 2011, therefore holders of the Preferred Stock have the right to redeem their Preferred Stock any time after March 2014. Since we were precluded by Colorado law from redeeming any Preferred Stock upon the attainment of the redemption date, during the three months ended June 30, 2014, in exchange for extending the redemption date to after December 31, 2016, we’ve offered to reduce the conversion price to $0.80 for any conversion in 2014, to $0.70 for any conversions in 2015 and to $0.60 for any conversions in 2016 (the “Revised Conversion Terms”). We also offered to extend the expiration date of the Preferred Stock Warrants an additional two years. In exchange, the Preferred Stock Holders agreed to automatically convert their Preferred Stock on the date our common shares are listed on a U.S. based stock exchange (the “Up-listing Date”). In addition, any Preferred Stock Warrants remaining outstanding at the Up-listing Date, will be cancelled and the holder issued a number of shares of common stock equivalent to the fair value of those warrants. Holders of $6,079,980 of the outstanding Preferred Stock accepted this offer. During the three months ended September 30, 2014, we received the consent of a majority of both our common stock holders voting with the as-converted preferred stock holders and the preferred stock holders only, to automatically convert the Preferred Stock still outstanding at the Up-listing Date. Also, the Preferred Stock may be converted by us, provided that the variable weighted average price of our common stock has closed at $4.00 per share or greater, for sixty consecutive trading days and during such sixty-day period, the shares of common stock issuable upon conversion of the Preferred Stock have either been registered for resale or are issuable without restriction pursuant to Rule 144 of the Securities Act of 1933, as amended. | ||||||||
The Preferred Stock when issued was a hybrid instrument comprised of a (i) a preferred stock, (ii) an option to convert the preferred stock into shares of our common stock (the “Conversion Option”) and (iii) a warrant to purchase shares of our common stock to be issued if a certain revenue milestone (the “Revenue Milestone”) was not achieved (the “Make Good Warrant”), as an embedded derivative liability. The Conversion Option derives its value based on the underlying fair value of the shares of our common stock as does the Preferred Stock, and therefore is clearly and closely related to the underlying preferred stock. Since, at issuance the number of shares of common stock which the Make Good Warrant would be exercisable into, was not determinable, and since the fair value of the Make Good Warrants was deemed improbable, we did not record a derivative liability. See Note 6 for further discussion on these derivative liabilities. | ||||||||
Since our Revenue Milestone for the twelve months ended December 31, 2011 was not achieved (i) the Conversion Rate was reduced to $1.00, and (ii) each holder received a Make Good Warrant to purchase a number of shares of our common stock equal to fifty percent of the number of shares of common stock issuable upon conversion of the Preferred Stock at the Conversion Rate. The Make Good Warrants expire December 31, 2015, have an initial exercise price of $1.00 per share and provide for cashless exercise at any time the underlying shares of common stock have not been registered for resale under the Securities Act of 1933 or are issuable without restriction pursuant to Rule 144 of the Securities Act. During the three months ended June 30, 2014, we offered all warrant holders the right to exchange their warrants for their fair value, as calculated using the Black-Scholes option pricing model, for shares of common stock. Warrant holders holding approximately 84% of these outstanding warrants elected the exchange offer. | ||||||||
During the year ended December 31, 2011, we sold 759,773 shares of Preferred Stock at a price per share of $10, for gross proceeds of $7,597,730. We paid commissions, legal fees and other expenses of issuance of $828,340, which has been recorded as a discount and deducted from the face value of the Preferred Stock. At issuance of the Preferred Stock, we attributed a conversion option to the Preferred Stock based upon the difference between the Conversion Rate at the time of issuance and the closing price of our common stock on the date of issuance, which was recorded as a discount and deducted from the face value of the Preferred Stock. Pursuant to the Make Good adjustment of the Conversion Rate to $1.00, at December 31, 2011 the conversion option was recalculated as if the $1.00 Conversion Rate was in affect at issuance which amounted to $2.1 million, and the amortization of the related discount was adjusted for the year ended December 31, 2011. These discounts were amortized over three years consistent with the initial redemption terms, as a charge to additional paid-in capital, due to our deficit in retained earnings. For the three months ended March 31, 2014, we amortized approximately $221,400 of these discounts to additional paid-in capital. At March 31, 2014, the Preferred Stock discount was fully amortized. | ||||||||
During the three and nine months ended September 30, 2014, we issued 116,250 shares of our common stock upon conversion of 11,625 shares of our Preferred Stock. | ||||||||
The Preferred Stock outstanding at September 30, 2014, is convertible into 8.3 million shares of our common stock pursuant to the Revised Conversion Terms or the original terms. | ||||||||
Historically, since the Preferred Stock could ultimately be redeemed at the option of the holder, the carrying value of the shares, net of unamortized discount and accumulated dividends, has been classified as temporary equity. | ||||||||
Our dividend payable on September 30, 2014 of approximately $152,200 was paid, in lieu of cash, with approximately 330,900 shares of common stock, which were issued subsequent to September 30, 2014. | ||||||||
Placement Agent Warrants | ||||||||
We issued warrants to the placement agents for the sale of our Preferred Stock, to purchase 58,352 shares of 10% convertible preferred stock at $10 per share. Since at issuance, the number of shares of common stock which these warrants would be exercisable into was not determinable, we recorded the fair value of the warrants at issuance, as a liability on our balance sheet and we re-value this warrant liability at each reporting date, with changes in fair value recognized in earnings each reporting period. See Note 6 for further discussion of derivative liabilities. | ||||||||
Stockholders_Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2014 | |
Stockholders' Equity Note [Abstract] | ' |
Stockholders' Equity | ' |
Note 9 - Stockholders’ Equity | |
We are authorized to issue up to 250,000,000 shares of Common Stock, no par value, and up to 2,500,000 shares of Preferred Stock, no par value. There were 69,167,050 and 31,168,905 shares of common stock issued and outstanding at September 30, 2014 and December 31, 2013, respectively. During the year ended December 31, 2011, we designated 880,000 shares of preferred stock as 10% convertible preferred stock and had issued and outstanding 682,998 and 694,623 shares of 10% convertible preferred stock at September 30, 2014 and December 31, 2013, respectively. We may issue additional shares of preferred stock, with dividend requirements, voting rights, redemption prices, liquidation preferences and premiums, conversion rights and other terms without a vote of the shareholders. | |
Common Stock Issuances for the Nine Months Ended September 30, 2014 | |
During January 2014, we issued 181,531 shares of common stock as payment of our dividends on our 10% convertible preferred stock, in lieu of cash, with a fair value on the date of issue of $183,346. | |
During January 2014, we issued 235,853 shares of common stock as payment of our interest on our 8% convertible notes, in lieu of cash, with a fair value on the date of issue of $235,853. | |
During January 2014, we issued 107,461 shares of common stock upon cashless exercise of a previously awarded stock options and warrants. | |
During January 2014, we issued 220,147 shares of common stock as payment of various commitment fees pursuant to our 12% revolving credit agreement, in lieu of cash, with a fair value on the date of issue of $140,894. | |
During January 2014, we issued 8,522 shares of common stock as payment of our interest on our 12% revolving credit agreement, in lieu of cash, with a fair value on the date of issue of $8,522. | |
During April 2014, we issued 215,942 shares of common stock as payment of our dividends on our 10% convertible preferred stock, in lieu of cash, with a fair value on the date of issue of $159,797. | |
During April 2014, we issued 359,300 shares of common stock as payment of our interest on our 8% convertible notes, in lieu of cash, with a fair value on the date of issue of $265,882. | |
During April 2014, we issued 50,424 shares of common stock as payment of our interest on our 12% revolving credit agreement, in lieu of cash, with a fair value on the date of issue of $37,314. | |
During April 2014, we issued 196,079 shares of common stock to a consultant pursuant to terms of an agreement, with a fair value on the date of issue of $100,000. | |
During June and July 2014, we issued 35,462,955 shares of common stock with a fair value on the date of issue of $24,824,069, in exchange for previously outstanding warrants which were cancelled pursuant to a tender offer, with a fair value of $4,866,269. | |
During July 2014, we issued 274,918 shares of common stock as payment of our dividends on our 10% convertible preferred stock, in lieu of cash, with a fair value on the date of issue of $184,195. | |
During July 2014, we issued 507,483 shares of common stock as payment of our interest on our 8% convertible notes, in lieu of cash, with a fair value on the date of issue of $340,014. | |
During July 2014, we issued 61,280 shares of common stock as payment of our interest on our 12% revolving credit agreement, in lieu of cash, with a fair value on the date of issue of $41,058. | |
During August and September 2014, we issued 116,250 shares of common stock upon conversion of 11,625 shares of our 10% convertible preferred stock, with a value of $116,250. | |
Sharebased_Compensation
Share-based Compensation | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ' | |||||||||||||
Share-based Compensation | ' | |||||||||||||
Note 10 - Share-based Compensation | ||||||||||||||
Options | ||||||||||||||
At our Annual Meeting of Shareholders during the year ended December 31, 2013, our shareholders approved an amendment to our 2010 Stock Plan to increase the number of shares of common stock reserved thereunder by 2,000,000 shares. In addition, during the three months ended March 31, 2014 the board approved an additional 2,000,000 shares to be available for award under the 2010 Stock Plan, subject to shareholder approval, which brought the total available for award under the 2010 Stock Plan to 7,000,000 shares. The exercise price of an option is established by the Board of Directors on the date of grant and is generally equal to the market price of the stock on the grant date. The Board of Directors may determine the vesting period for each new grant. Options issued are exercisable in whole or in part for a period as determined by the Board of Directors of up to ten years from the date of grant. | ||||||||||||||
During the year ended December 31, 2013, our 2003 Stock Plan expired and no further awards will be made pursuant to this plan. | ||||||||||||||
During the nine months ended September 30, 2014, we awarded options to purchase 175,000 shares of our common stock at a weighted average exercise price of $0.54 to an officer and two of our directors. The right to exercise these options is on the date of award. We estimated the fair value of these options to be approximately $102,500 which was charged to expense in our statement of operations during the period. We use the Black-Scholes option pricing model to estimate the fair values, with the following range of assumptions: (i) no dividend yield, (ii) expected volatility of 90%, (iii) risk-free interest rates of 1.5%, and (iv) expected lives of five years. | ||||||||||||||
In addition to the options which vested on the date of award, we amortize certain options over vesting periods which included the three and nine months ended September 30, 2014. We charged to operating expenses approximately $48,000 and $394,400 during the three and nine months ended September 30, 2014, respectively. | ||||||||||||||
The following table summarizes our stock option activity for the nine months ended September 30, 2014: | ||||||||||||||
Weighted- | ||||||||||||||
Number | Average | |||||||||||||
of Shares | Exercise | |||||||||||||
Issuable | Price | |||||||||||||
Balance, January 1, 2014 | 7,502,421 | $ | 1 | |||||||||||
Granted | 175,000 | 0.84 | ||||||||||||
Exercised | -186,225 | 0.88 | ||||||||||||
Cancelled | -2,513,068 | 0.63 | ||||||||||||
Balance, September 30, 2014 | 4,978,128 | $ | 1.19 | |||||||||||
The following table summarizes options outstanding at September 30, 2014: | ||||||||||||||
Weighted- | ||||||||||||||
Weighted- | Average | |||||||||||||
Number | Average | Remaining | Aggregate | |||||||||||
of Shares | Exercise | Term | Intrinsic | |||||||||||
Issuable | Price | (Years) | Value | |||||||||||
Exercisable | 3,068,128 | $ | 1.03 | 2.6 | $ | 3,000 | ||||||||
Not vested | 1,910,000 | 1.45 | 3.8 | - | ||||||||||
Balance, September 30, 2014 | 4,978,128 | $ | 1.19 | 3 | $ | 3,000 | ||||||||
Warrants | ||||||||||||||
From time to time, we compensate consultants, advisors and investors with warrants to purchase shares of our common stock, in lieu of cash payments. Net share settlement is available to warrant holders. | ||||||||||||||
The following table sets forth our warrant activity during the nine months ended September 30, 2014: | ||||||||||||||
Weighted- | ||||||||||||||
Number | Average | |||||||||||||
of Shares | Exercise | |||||||||||||
Issuable | Price | |||||||||||||
Balance, January 1, 2014 | 41,595,655 | $ | 0.69 | |||||||||||
Granted | 7,435,901 | 0.67 | ||||||||||||
Exercised | -155,568 | 0.6 | ||||||||||||
Expired | -1,383,067 | 0.88 | ||||||||||||
Cancelled pursuant to Tender Offer | -46,276,774 | 0.67 | ||||||||||||
Balance, September 30, 2014 | 1,216,147 | $ | 1.11 | |||||||||||
The following table sets forth the warrants outstanding at September 30 2014: | ||||||||||||||
Weighted- | ||||||||||||||
Number | Average | |||||||||||||
of Shares | Exercise | |||||||||||||
Issuable | Price | |||||||||||||
10% convertible debenture - bonus warrants | 133,336 | $ | 0.6 | |||||||||||
10% convertible preferred stock – warrants | 580,000 | 1 | ||||||||||||
Consultants | 502,811 | 1.37 | ||||||||||||
Total | 1,216,147 | $ | 1.11 | |||||||||||
During the nine months ended September 30, 2014, we issued warrants to purchase 7,275,901 shares of our common stock pursuant to our issuance and sale of our 8% convertible promissory notes, at an initial exercise price of $0.60 per share. These warrants had fair values on their dates of issuances of approximately $391,400 which was recorded as a credit to derivative liabilities and a charge to debt discount associated with our 8% convertible promissory notes. See Notes 6 and 7 for further discussion of these warrants. The estimated fair value of the warrants was computed by a third party using Monte Carlo simulation models. The following ranges of assumptions were used for the simulation models: (i) no dividend yield, (ii) expected volatility of 45%, (iii) risk-free interest rate of 0.2%, and (iv) an expected life of approximately one and one-half years. | ||||||||||||||
During the nine months ended September 30, 2014, we issued a warrant to purchase 160,000 shares of our common stock at an exercise price of $1.20 in payment of amounts due a consultant. We estimated the fair value of this warrant to be approximately $84,700, which was charged to expense in our statement of operations during the period. We used the Black-Scholes option pricing model to estimate the fair value, with the following range of assumptions: (i) no dividend yield, (ii) expected volatility of 90%, (iii) risk-free interest rate of 0.8%, and (iv) an expected life of approximately three years. | ||||||||||||||
In addition, the fair value of a previously issued warrant which was being amortized over a service period spanning multiple reporting periods, was revalued using the Black-Scholes option pricing model, at the end of each reporting period. During the three and nine months ended September 30, 2014, we decreased the fair value by approximately $14,900 and recorded a charge in our statement of operations. We used the Black-Scholes option pricing model to estimate the fair value, with the following range of assumptions: (i) no dividend yield, (ii) expected volatility of 90%, (iii) risk-free interest rate of approximately 0.8%, and (iv) an expected life of less than one year. | ||||||||||||||
Tender Offer to Exchange Warrants for Shares of Common Stock | ||||||||||||||
During June 2014, we extended an offer to exchange for shares of our common stock any and all of our outstanding warrants from the holders thereof (the “Tender Offer”). Each warrant holder was provided with the terms of the Tender Offer regarding their outstanding warrants. For every $10 of value attributed to the warrant, we offered to exchange 14.17707 shares of our common stock. The value of the warrants was derived from third parties using Monte Carlo simulation models and the Black-Scholes Option Pricing Model. The Tender Offer expired at 11:59P.M. on June 16, 2014. | ||||||||||||||
Of the warrants to purchase 47.7 million shares of our common stock subject to the Tender Offer, warrants to purchase 46.2 million shares of our common stock were tendered with fair value of $4.9 million and exchanged for 35.5 million shares with a fair value on date of issuance of $24.8 million. The warrants were cancelled upon tender. | ||||||||||||||
Income_Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2014 | |
Income Tax Disclosure [Abstract] | ' |
Income Taxes | ' |
Note 11 - Income Taxes | |
The income tax provision consists of federal and state corporate income taxes resulting from our operations in the United States. The income tax provision differs from the expected tax provisions computed by applying the U.S. Federal statutory rate to loss before income taxes primarily because we have historically maintained a full valuation allowance on our deferred tax assets. We expect income tax expense to vary each reporting period depending upon taxable income fluctuations and the availability of tax benefits from net loss carryforwards. | |
As of December 31, 2013, we had U.S. federal net operating loss carryforwards of approximately $25.7 million, which, if unused, expire through 2033. We do not believe that we have had a change in control as defined by Section 382 of the Internal Revenue Code, which could potentially limit our ability to utilize these net operating losses. At December 31, 2013, we recorded a valuation allowance against the full amount of our deferred tax assets, as our management believes it is uncertain that they will be fully realized. If we determine in the future that we will be able to realize all or a portion of our net operating loss, an adjustment to our net operating loss carryforwards would increase net income in the period in which we make such a determination. | |
Business_Concentration
Business Concentration | 9 Months Ended |
Sep. 30, 2014 | |
Risks and Uncertainties [Abstract] | ' |
Business Concentration | ' |
Note 12 - Business Concentration | |
During the three and nine months ended September 30, 2014, we recognized approximately 72% and 54% of revenue, respectively from five customers. For the nine months ended September 30, 2014, approximately 18% of our revenue recognized was from our Class 1 rail road customer. The three-year supply agreement was completed prior to June 30, 2014. | |
During the three and nine months ended September 30, 2014, we purchased approximately 37% and 33%, respectively of all products and services from five vendors. | |
Commitments_and_Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | ' |
Commitments and Contingencies | ' |
Note 13 - Commitments and Contingencies | |
Operating leases | |
During the year ended December 31, 2013, we entered into an assignment of the original lease for our Zanesville, OH facility, effective November 15, 2013 at a monthly lease payment of $25,750. The original term of the lease expires at the end of April 2018, but provides two additional five-year extensions and includes an annual rent escalation clause based on the greater of the change in a certain Consumer Price Index or 3%. We record rent expense based on the straight-line amortization of the full 15-year term of the initial lease plus all extensions. Our rent expense, for the three and nine months ended September 30, 2014 was approximately $95,800 and $286,600, respectively and our deferred rent at September 30, 2014 was approximately $61,000. This facility also serves as our corporate headquarters. | |
Effective September 1, 2013, we signed a ten year lease for our production facility in Waco, Texas which provides five additional five-year extensions. Monthly rent expense for the first year of the lease is $21,875. The lease includes an annual rent escalation clause based on the greater of the change in a certain Consumer Price Index or 3%. We record rent expense based on the straight-line amortization of the full 35-year term of the initial lease plus all extensions. Our rent expense for the three and nine months ended September 30, 2014 was approximately $113,400 and $340,100, respectively and our deferred rent at September 30, 2014 was approximately $212,100. | |
We lease office space in New Providence, New Jersey which previously served as our corporate headquarters, pursuant to a one-year extension of our prior three-year lease agreement for monthly lease payments of approximately $3,800. The lease expires on October 31, 2014. Facility rent expense totaled approximately $11,500 and $34,600 for the three and nine months ended September 30, 2014, respectively. | |
Royalty Agreements | |
In February 2007, we acquired an exclusive, royalty-bearing license in specific but broad global territories to make, have made, use, sell, offer for sale, modify, develop, import, and export products made using patent applications owned by Rutgers University (Rutgers”). We are using these patented technologies in the production of our composite rail ties and structural building products. The term of the License Agreement runs until the expiration of the last-to-expire issued patent within the Rutgers’ technologies licensed under the License Agreement, unless terminated earlier. | |
We are obligated to pay Rutgers royalties ranging from 1.5% to 3.0% on various product sales, subject to certain minimum payments each year and to reimburse Rutgers for certain patent defense costs in the case of patent infringement claims made against the Rutgers patents. For the three months ended September 30, 2014 and 2013, we accrued royalties payable to Rutgers on product sales of approximately $22,400 and $19,200, respectively. In addition, for the three months ended September 30, 2014 and 2013, since we did not meet the minimum royalty due pursuant to the license, we accrued approximately $27,600 and $30,800, respectively which was charged to operating expenses in our statement of operations. | |
Litigation | |
From time to time we may be subject to various other routine legal matters incidental to our business, but we do not believe that they would have a material adverse effect on our financial condition or results of operations. | |
Related_Party_Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2014 | |
Related Party Transactions [Abstract] | ' |
Related Party Transactions | ' |
Note 14 - Related Party Transactions | |
Samuel G. Rose and Julie Walters | |
Samuel G. Rose and Julie Walters beneficially own in excess of 5% of our outstanding stock. | |
10% Convertible Redeemable Preferred Stock. During the year ended December 31, 2011, we sold to Mr. Rose 100,000 shares of our Preferred Stock for $1.0 million. Subsequently, pursuant to the terms of the Preferred Stock, we issued to Mr. Rose a warrant to purchase 500,000 shares of common stock at an exercise price of $1.00 per share. See Note 8 for a complete description of our Preferred Stock. Including the dividend accrued through September 30, 2014, Mr. Rose has received an aggregate of approximately 583,000 shares of common stock as dividend payments, on the Preferred Stock held by them. During the three months ended June 30, 2014, pursuant to our Tender Offer to all warrant holders to exchange the fair value of any warrants then outstanding, for shares of our common stock, Mr. Rose and Ms. Walters received approximately 259,300 shares of common stock in exchange for the warrants to purchase 500,000 shares of common stock. See Note 10 for a further discussion of the Tender Offer. | |
8% Convertible Promissory Notes (2012). On August 24, 2012, we entered into a Note Purchase Agreement (the “Purchase Agreement”) with Mr. Rose and certain other investors (the “Note Purchase Agreement Investors”), pursuant to which, as of September 30, 2014, we have issued and sold to Mr. Rose and Ms. Walters an aggregate principal amount of approximately $5,209,300 of our 8.0% convertible promissory notes (the “8% Notes”) which are initially convertible into shares of our common stock, at a conversion price equal to $0.40 per share of common stock, subject to adjustment as provided on the terms of the 8% Notes, and associated warrants (the “8% Note Warrants”) to purchase, in the aggregate, approximately 13,023,200 shares of common stock, subject to adjustment as provided on the terms of the 8% Note Warrants. See Note 7 for a complete description of our 8% Notes. Including the interest accrued on our 8% Notes through September 30, 2014, Mr. Rose and Ms. Walters have received an aggregate of approximately 1,053,200 shares of common stock as interest payments under the 8% Notes held by them. During the three months ended June 30, 2014, pursuant to our Tender Offer to all warrant holders to exchange the fair value of any warrants then outstanding, for shares of our common stock, Mr. Rose and Ms. Walters received 10.9 million shares of common stock in exchange for the warrants to purchase 13.0 million shares of common stock. See Note 10 for a further discussion of the Tender Offer. | |
Revolving Credit and Letter of Credit Support Agreement. During the year ended December 31, 2013, we entered into a Revolving Credit and Letter of Credit Support Agreement (the “Revolving Loan Agreement”) pursuant to which Mr. Rose and certain other lender (the “Lenders”) have agreed to lend us up to $2,000,000 on a revolving basis. Each revolving loan made under the Revolving Loan Agreement bears interest at 12% per annum, of which 4% is payable by us in cash on the first business day of each month, and 8% is payable by us in shares of common stock on the first business day of each calendar quarter, valued at a price equal to the average of the Weighted Average Price (as such term is defined in the Revolving Loan Agreement) of a share of common stock for 20 consecutive trading days prior to the interest payment date. See Note 7 for a complete description of our Revolving Loan Agreement. | |
As consideration for the revolving loans extended under the Revolving Loan Agreement, we agreed to issue to the Lenders an aggregate of 200,000 shares of common stock at signing of the Revolving Loan Agreement, of which during the three months ended March 31, 2014, Mr. Rose received 100,000 shares of common stock, and prior to December 31, 2014 and December 31, 2015 the Lenders will receive an additional 200,000 shares of common stock, for up to a total of 600,000 shares of common stock. | |
Mr. Rose received accrued interest of approximately $29,200 and $88,400 for the three and nine months ended September 30, 2014, respectively on the Revolving Loan Agreement with approximately $30,300 in cash and approximately 97,200 shares of common stock as payment in kind. | |
8% Convertible Promissory Notes (2014). Through September 30, 2014 pursuant to the terms of our 8% convertible promissory notes (the “8% Notes”), we issued and sold to Samuel Rose, an aggregate principal amount of $666,666 of our 8% Notes which are initially convertible into 2.5 million shares of our common stock, subject to adjustment as provided on the terms of the 8% Notes, (i) at any time prescribed by the Investors or (ii) upon any date prior to June 11, 2019 (the “Maturity Date”) which the Company’s common shares are listed on a U.S. based stock exchange. See Note 7 for a complete description of our 8% Notes. | |
Interest expense for the three and nine months ended September 30, 2014 was approximately $12,200 and $14,400, respectively, and was paid in cash to Mr. Rose. | |
12% Convertible Promissory Notes. During the three months ended September 30, 2014 pursuant to the terms of our 12% convertible promissory notes (the “12% Notes”), we issued and sold to Samuel Rose an aggregate principal amount of $333,333 of our 12% Notes (see Note 7). Upon sixty days’ notice, the principal due under the 12% Notes is convertible into shares of our common stock based on a Conversion Price of 85% of the weighted average volume price per day of our common stock for the ten consecutive trading days preceding the day upon which the notice of conversion is received by us, pursuant to the 12% Notes. | |
The 12% Notes, including all outstanding principal and accrued and unpaid interest, are due and payable on March 31, 2015 or upon the occurrence of an Event of Default (as defined in the 12% Notes). We may prepay the 12% Notes, in whole or in part, upon notice to the holders thereof. Interest accrues on the 12% Notes at a rate of 12% per annum, payable monthly starting with September 30, 2014. | |
Interest expense for the three months ended September 30, 2014 was approximately $2,800 and was paid in cash to Mr. Rose. | |
5% Bank Promissory Note. During the three months ended September 30, 2014, we borrowed $4.0 million from a commercial bank (the “Bank”) pursuant to the terms of a promissory note and loan agreement (the “5% Bank Note”). See Note 7. Interest accrues on the outstanding principal at a fixed interest rate of 5% per annum and is payable monthly. All outstanding principal and accrued but unpaid interest is due on September 18, 2017. The 5% Bank Note may be prepaid in full or in part at any time without premium or penalty. The Bank may accelerate all amounts due under the Bank Term Loans, together with accrued and unpaid interest, upon the occurrence of an Event of Default, as defined in the documents. We were in compliance with the terms of the 5% Bank Note at September 30, 2014. | |
The Bank was induced to enter into the 5% Bank Note with a guarantee of which Samuel Rose was a participant along with others, collectively the “Investors”. In a separate agreement between the Bank and the Investors, the Investors agreed, among other terms, to guarantee to the Bank the full and punctual payment of all obligations which we have with the Bank in connection with the 5% Bank Note. | |
MLTM Lending, LLC and the ML Dynasty Trust | |
MLTM Lending, LLC and the ML Dynasty Trust beneficially own in excess of 5% of our outstanding stock. Pursuant to the Schedule 13D filings made by MLTM Lending, LLC and the ML Dynasty Trust, the ML Dynasty Trust shares with MLTM the power to vote or direct the vote of, and to dispose or direct the disposition of, greater than 5% of our outstanding stock. Thomas Bowersox, a member of our board of directors, is a trustee of the ML Dynasty Trust. | |
8% Convertible Promissory Notes (2012). Pursuant to the Purchase Agreement, as of June 30, 2014, we have issued and sold to MLTM Lending, LLC an aggregate principal amount of approximately $4,888,400 of our 8% Notes and associated 8% Note Warrants to purchase, in the aggregate, approximately 12,221,100 shares of common stock, subject to adjustment as provided on the terms of the 8% Note Warrants. See Note 7 for a complete description of our 8% Notes. Including the interest accrued on our 8% Notes through September 30, 2014, MLTM Lending, LLC has received an aggregate of approximately 969,600 shares of common stock as interest payments under the 8% Notes held by them. During the three months ended June 30, 2014, pursuant to our Tender Offer to all warrant holders to exchange the fair value of any warrants then outstanding, for shares of our common stock, MLTM Lending, LLC received 10.2 million shares of common stock in exchange for the warrants to purchase 12.2 million shares of common stock. See note 10 for a further discussion of the Tender Offer. | |
Revolving Credit and Letter of Credit Support Agreement. During the year ended December 31, 2013, we entered into a Revolving Credit and Letter of Credit Support Agreement (the “Revolving Loan Agreement”) pursuant to which MLTM Lending LLC and and certain other lender (the “Lenders”) have agreed to lend us up to $2,000,000 on a revolving basis. In addition, the Revolving Loan Agreement provides that MLTM Lending, LLC will provide letter of credit support to us of up to $500,000 (the “LC Sublimit”). Each revolving loan made under the Revolving Loan Agreement bears interest at 12% per annum, of which 4% is payable by us in cash on the first business day of each month, and 8% is payable by us in shares of common stock on the first business day of each calendar quarter, valued at a price equal to the average of the Weighted Average Price (as such term is defined in the Revolving Loan Agreement) of a share of common stock for 20 consecutive trading days prior to the interest payment date. See Note 7 for a complete description of our Revolving Loan Agreement. | |
As consideration for the revolving loans extended under the Revolving Loan Agreement, we agreed to issue to the Lenders an aggregate of 200,000 shares of common stock, of which MLTM Lending, LLC received 100,000 shares of common stock, at signing of the Revolving Loan Agreement and prior to December 31, 2014 and December 31, 2015, up to a total of 600,000 shares of Common Stock. As consideration for MLTM Lending, LLC providing letter of credit support, we are required to pay a letter of credit commission fee on the date of the Revolving Loan Agreement, and on each one year anniversary of the date of the Revolving Loan Agreement prior to the Maturity Date, in the amount equal to (i) 2% of the LC Sublimit in cash and (ii) shares of common stock, with an aggregate value of 4% of the LC Sublimit, with each such share of common stock valued at a price equal to the average of the Weighted Average Price of a share of Common Stock for the 20 consecutive trading days prior to the date of payment. | |
We have paid, or will pay subsequent to September 30, 2014, MLTM Lending, LLC accrued interest and fees of approximately $29,200 and $88,400 for the three and nine months ended September 30, 2014, respectively on the Revolving Loan Agreement with approximately $30,300 in cash and issued approximately 97,200 shares of common stock. | |
8% Convertible Promissory Notes (2014). Through September 30, 2014 pursuant to the terms of our 8% convertible promissory notes (the “8% Notes”), we issued and sold to MLTM Lending, LLC, an aggregate principal amount of $666,667 of our 8% Notes which are initially convertible into 2.5 million shares of our common stock, subject to adjustment as provided on the terms of the 8% Notes, (i) at any time prescribed by the Investors or (ii) upon any date prior to June 11, 2019 (the “Maturity Date”) which the Company’s common shares are listed on a U.S. based stock exchange. See Note 7 for a complete description of our 8% Notes. | |
Interest expense for the three and nine months and nine ended September 30, 2014 was approximately $12,200 and $14,400, respectively, and was paid in cash to MLTM Lending, LLC. | |
12% Convertible Promissory Notes. During the three months ended September 30, 2014 pursuant to the terms of our 12% convertible promissory notes (the “12% Notes”), we issued and sold to MLTM Lending, LLC an aggregate principal amount of $333,334 of our 12% Notes (see Note 7). Upon sixty days’ notice, the principal due under the 12% Notes is convertible into shares of our common stock based on a Conversion Price of 85% of the weighted average volume price per day of our common stock for the ten consecutive trading days preceding the day upon which the notice of conversion is received by us, pursuant to the 12% Notes. | |
The 12% Notes, including all outstanding principal and accrued and unpaid interest, are due and payable on March 31, 2015 or upon the occurrence of an Event of Default (as defined in the 12% Notes). We may prepay the 12% Notes, in whole or in part, upon notice to the holders thereof. Interest accrues on the 12% Notes at a rate of 12% per annum, payable monthly starting with September 30, 2014. | |
Interest expense for the three months ended September 30, 2014 was approximately $2,800 and was paid in cash to MLTM Lending, LLC. | |
Allen Kronstadt | |
Allen Kronstadt beneficially owns in excess of 5% of our outstanding stock and was appointed to our board of directors on September 11, 2012 pursuant to the terms of the Purchase Agreement. | |
8% Convertible Promissory Notes (2012). Pursuant to the Purchase Agreement, as of June 30, 2014, we have issued and sold to Mr. Kronstadt an aggregate principal amount of approximately $5,209,300 of our 8% Notes and associated 8% Note Warrants to purchase, in the aggregate, approximately 13,023,200 shares of common stock, subject to adjustment as provided on the terms of the 8% Note Warrants. See Note 7 for a complete description of our 8% Notes. Including the interest accrued on our 8% Notes through September 30, 2014, Mr. Kronstadt has received an aggregate of approximately 1,032,400 shares of common stock as interest payments under the 8% Notes held by him. During the three months ended June 30, 2014, pursuant to our Tender Offer to all warrant holders to exchange the fair value of any warrants then outstanding, for shares of our common stock, Mr. Kronstadt received 10.9 million shares of common stock in exchange for the warrants to purchase 13.0 million shares of common stock. See Note 10 for a further discussion of the Tender Offer. | |
8% Convertible Promissory Notes (2014). Through September 30, 2014 pursuant to the terms of our 8% convertible promissory notes (the “8% Notes”), we issued and sold to Mr. Kronstadt, an aggregate principal amount of $666,667 of our 8% Notes which are initially convertible into 2.5 million shares of our common stock, subject to adjustment as provided on the terms of the 8% Notes, (i) at any time prescribed by the Investors or (ii) upon any date prior to June 11, 2019 (the “Maturity Date”) which the Company’s common shares are listed on a U.S. based stock exchange. See Note 7 for a complete description of our 8% Notes. | |
Interest expense for the three and nine months ended September 30, 2014 was approximately $12,200 and $14,400 respectively, and was paid in cash to Mr. Kronstadt. | |
12% Convertible Promissory Notes. During the three months ended September 30, 2014 pursuant to the terms of our 12% convertible promissory notes (the “12% Notes”), we issued and sold to Mr. Kronstadt an aggregate principal amount of $333,333 of our 12% Notes (see Note 7). Upon sixty days’ notice, the principal due under the 12% Notes is convertible into shares of our common stock based on a Conversion Price of 85% of the weighted average volume price per day of our common stock for the ten consecutive trading days preceding the day upon which the notice of conversion is received by us, pursuant to the 12% Notes. | |
The 12% Notes, including all outstanding principal and accrued and unpaid interest, are due and payable on March 31, 2015 or upon the occurrence of an Event of Default (as defined in the 12% Notes). We may prepay the 12% Notes, in whole or in part, upon notice to the holders thereof. Interest accrues on the 12% Notes at a rate of 12% per annum, payable monthly starting with September 30, 2014. | |
Interest expense for the three months ended September 30, 2014 was approximately $2,800 and was paid in cash to Mr. Kronstadt. | |
5% Bank Promissory Note. During the three months ended September 30, 2014, we borrowed $4.0 million from a commercial bank (the “Bank”) pursuant to the terms of a promissory note and loan agreement (the “5% Bank Note”). See Note 7. Interest accrues on the outstanding principal at a fixed interest rate of 5% per annum and is payable monthly. All outstanding principal and accrued but unpaid interest is due on September 18, 2017. The 5% Bank Note may be prepaid in full or in part at any time without premium or penalty. The Bank may accelerate all amounts due under the Bank Term Loans, together with accrued and unpaid interest, upon the occurrence of an Event of Default, as defined in the documents. We were in compliance with the terms of the 5% Bank Note at September 30, 2014. | |
The Bank was induced to enter into the 5% Bank Note with a guarantee of which Mr. Kronstadt was a participant along with others, collectively the “Investors”. In a separate agreement between the Bank and the Investors, the Investors agreed, among other terms, to guarantee to the Bank the full and punctual payment of all obligations which we have with the Bank in connection with the 5% Bank Note. | |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Accounting Policies [Abstract] | ' | |||||||
Business and Basis of Financial Statement Presentation | ' | |||||||
(a) | Business and Basis of Financial Statement Presentation | |||||||
Axion International Holdings, Inc. (“Holdings”) was formed in 1981. In November 2007, Holdings entered into an Agreement and Plan of Merger, among Holdings, Axion Acquisition Corp., a Delaware corporation and a newly created direct wholly-owned subsidiary of Holdings (the “Merger Sub”), and Axion International, Inc., a Delaware corporation which incorporated on August 6, 2006 with operations commencing in November 2007 (“Axion”). On March 20, 2008 Holdings consummated the merger (the “Merger”) of Merger Sub into Axion, with Axion continuing as the surviving corporation and a wholly-owned subsidiary of Holdings. Axion Recycled Plastics Incorporated, an Ohio corporation and a wholly-owned subsidiary of Axion, was established to purchase certain tangible and intangible assets of a plastics recycling company during November 2013. | ||||||||
We design and manufacture innovative structural polymer solutions, engineering sustainable products and systems for applications that provide improved long-term value, consistent performance and reduced maintenance costs, offering a viable solution where stress and environmental factors cause degradation and deterioration of traditional products. Our proprietary products are based on patent rights we hold as well as manufacturing processes and formulations we have developed. | ||||||||
We manufacture, market and sell ECOTRAX® rail ties and STRUXURE® building products, with significant focus on construction mats. Our ECOTRAX® and STRUXURE® products are fully derived from post-consumer and post-industrial recycled plastics, such as high-density polyethylene, polystyrene and polypropylene. In patented and proprietary formulations, our products achieve structural strength, are capable of sustaining heavy loads and are resistant to changing shape under constant stress. Our products, manufactured through an extrusion process, are eco-friendly, non-corrosive, impervious to moisture, do not leach chemicals and are resistant to insects and rot. They possess superior lifecycles and generally have greater durability and require less maintenance than competitive traditional products. | ||||||||
For the past seven years, our products have been tested and validated in order to establish their structural strength. Our rail ties, our focus over the past few years, have been subjected to long-term performance testing, in which they have been under constant traffic in various environmental conditions. Short-span bridges have been constructed with our engineered products that have supported tanks and trains. We are in a position to expand upon this foundation we built through years of successful applications. When coupled with enhanced manufacturing capacity and process refinements, these foundational achievements should lead to a significant increase in commercial activity. | ||||||||
Our consolidated financial statements include the accounts of our wholly-owned subsidiaries and all intercompany balances and transactions have been eliminated in consolidation. | ||||||||
The accompanying unaudited condensed consolidated financial statements of Holdings have been prepared in accordance with Rule S-X of the Securities and Exchange Commission and with the instructions to Form 10-Q, and accordingly, they do not include all of the information and footnotes which may be required by generally accepted accounting principles for complete financial statements. | ||||||||
In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. However, the results from operations for the three and nine months ended September 30, 2014, are not necessarily indicative of the results that may be expected for the year ending December 31, 2014. The unaudited condensed consolidated financial statements should be read in conjunction with the consolidated December 31, 2013 financial statements and footnotes thereto included in the Company's Form 10-K filed with the SEC. | ||||||||
Cash and Cash Equivalents | ' | |||||||
(b) | Cash and Cash Equivalents | |||||||
For purposes of our balance sheet and statement of cash flows, we consider all highly liquid debt instruments, purchased as an investment, with an original maturity of three months or less to be cash equivalents. At September 30, 2014 and December 31, 2013, we maintained all of our cash in demand or interest-bearing accounts at commercial banks. | ||||||||
Allowance for Doubtful Accounts | ' | |||||||
(c) | Allowance for Doubtful Accounts | |||||||
We accrue a reserve on a receivable when, based upon the judgment of management, it is probable that a receivable will not be collected and the amount of any reserve may be reasonably estimated. At September 30, 2014 we accrued a reserve for uncollectable accounts receivables in the amount of approximately $74,000. We did not provide for an allowance at December 31, 2013. | ||||||||
Property and Equipment | ' | |||||||
(d) | Property and Equipment | |||||||
Property and equipment are recorded at cost and depreciated and amortized using the straight-line method over estimated useful lives of two to twenty years. Costs incurred that extend the useful life of the underlying asset are capitalized and depreciated over the remaining useful life. Repairs and maintenance are charged directly to operations as incurred. | ||||||||
Our property and equipment is comprised of the following: | ||||||||
September 30, | December 31, | |||||||
2014 | 2013 | |||||||
Equipment | $ | 17,893 | $ | 18,700 | ||||
Machinery and equipment | 9,881,835 | 8,803,087 | ||||||
Purchased software | 187,996 | 145,622 | ||||||
Furniture and fixtures | - | 14,599 | ||||||
Subtotal – property and equipment, at cost | 10,087,724 | 8,982,008 | ||||||
Less accumulated depreciation | -1,863,754 | -1,082,522 | ||||||
Net property and leasehold improvements | $ | 8,223,970 | $ | 7,899,486 | ||||
Depreciation expense charged to income during the three and nine months ended September 30, 2014 was approximately $268,300 and $781,200, respectively and for the corresponding periods of 2013 was $75,000 and $147,600, respectively. | ||||||||
Our financial results for the reprocessed plastics business during the six months ended June 30, 2014 and our decision during the three months ended September 30, 2014 to transition the assets acquired of the reprocessing plastics business to a business extruding our proprietary products, represented a triggering event requiring an impairment test of tangible and intangible assets acquired. Based on our test, we determined there was no impairment. | ||||||||
Exclusive Agreement | ' | |||||||
(e) | Exclusive Agreement | |||||||
In February 2007, we acquired an exclusive, royalty-bearing license (subject to minimum royalties) in specific but broad global territories to make, have made, use, sell, offer for sale, modify, develop, import, and export products made using patent applications owned by Rutgers University (“Rutgers”). We are using these patented technologies in the production of our composite rail ties and structural building products such as pilings, I-beams, T-beams and boards of various sizes. | ||||||||
Royalties incurred and payable to Rutgers, for the three and nine months ended September 30, 2014 were $50,000 and $150,000, respectively. For the corresponding periods of 2013, the amounts were $50,000 and $150,000, respectively | ||||||||
Definite Lived Intangible Assets | ' | |||||||
(f) | Definite Life Intangible Assets | |||||||
During the year ended December 31, 2013, we acquired a plastic reprocessing business which gave rise to certain definite life intangible assets associated with the acquired customer list and trademark. In accordance with FASB ASC topic, “Goodwill and Other Intangible Assets”, acquired definite life intangibles, are subject to amortization over their useful lives. The method of amortization selected reflects the pattern in which the economic benefits of the specific intangible asset is consumed or otherwise used up. Since that pattern cannot be reliably determined, a straight-line amortization method has been used over the estimated useful life. Intangible assets that are subject to amortization are reviewed for potential impairment at least annually or whenever events or circumstances indicate that carrying amounts may not be recoverable. For the three and nine months ended September 30, 2014 we amortized to operating expenses approximately $19,800 and $59,300, respectively of these intangible assets. | ||||||||
Our financial results for the reprocessed plastics business during the six months ended June 30, 2014 and our decision during the three months ended September 30, 2014 to transition the assets acquired of the reprocessing plastics business to a business extruding our proprietary products, represented a triggering event requiring intangible assets impairment tests. During the three months ended September 30, 2014, we determined that our definite life intangible asset associated with our acquired customer list was impaired and of no further value and accordingly we recorded a charge to other expenses for the remaining unamortized balance of approximately $545,800. | ||||||||
Indefinite Lived Intangible Assets - Goodwill | ' | |||||||
(g) | Indefinite Life Intangible Assets - Goodwill | |||||||
In accordance with the FASB ASC topic, “Goodwill and Other Intangible Assets”, indefinite life assets, such as goodwill, acquired as a result of our acquisition of the plastic reprocessing business and which are not subject to amortization are tested for impairment annually, or more frequently if events and circumstances indicate that the asset might be impaired. An impairment loss is recognized to the extent that the carrying amount exceeds the asset’s fair value. The fair value is determined by subtracting the fair value of all the identified tangible and intangible assets included in the business acquisition from the fair value of the purchase price. | ||||||||
Our financial results for the reprocessed plastics business during the six months ended June 30, 2014 and our decision during the three months ended September 30, 2014 to transition the reprocessing plastics business to a facility extruding our historical proprietary products, represented a triggering event requiring a goodwill impairment test. During the three months ended September 30, 2014, we tested the goodwill intangible asset associated with the acquisition in November 2013 of the reprocessed plastics business. The goodwill intangible asset was $1.5 million as of both September 30, 2014 and December 31, 2013 and based on our test for impairment done during the three months ended September 30, 2014, we determined there was no impairment. | ||||||||
Revenue and Cost Recognition | ' | |||||||
(h) | Revenue and Related Cost Recognition | |||||||
In accordance with FASB ASC 605 “Revenue Recognition”, revenue is recognized when persuasive evidence of an agreement with the customer exists, products are shipped or title passes pursuant to the terms of the agreement with the customer, the amount due from the customer is fixed or determinable, collectability is reasonably assured, and there are no significant future performance obligations. In most cases, we receive a purchase order from our customer specifying the products requested and delivery instructions. We recognize revenue upon our delivery or shipment of the products as specified in the purchase order. In other cases where we have a contract which provides for a large number of products and few actual deliveries, the revenues are recorded each month as the products are produced and the risk of ownership passes to the customer upon pre-delivery acceptance. Prior to deliveries, our customer’s products are segregated from our inventory and not available for fulfilling other orders. | ||||||||
Our costs of sales are predominately comprised of the cost of raw materials and the costs and expenses associated with the production of the finished product. Prior to 2013, we utilized third-party manufacturers, where under one arrangement we purchased and supplied the raw materials to the third-party manufacturer and we paid them a per-pound cost to produce the finished product. Under another arrangement, the third-party manufacturer sourced and paid for the raw materials and we purchased the finished product from them at a cost per unit. Beginning in 2013, we initiated production of our finished products within a leased facility utilizing our own employees. Additionally, in late 2013 we acquired the assets of a plastics recycling company and began to reprocess recycled plastics for use in our own finished products and to sell to customers for use in their finished products. During the three months ended September 30, 2014, we began the conversion of that facility from reprocessing plastics to processing of both molded and continuous extruded engineered products. Our costs of sales may vary significantly as a result of the variability in the cost of our raw materials and the efficiency with which we plan and execute our manufacturing processes. | ||||||||
Historically, we have not had significant warranty replacements, but during the year ended December 31, 2013 due to the improper installation of certain of our rail ties, we agreed to replace the rail ties. Although from time to time we replace our engineered products for various reasons, we do not anticipate additional significant situations where we might again replace improperly installed products and therefore do not provide for future warrant expenses. | ||||||||
Income Taxes | ' | |||||||
(i) | Income Taxes | |||||||
Income tax provision consists of federal and state corporate income taxes resulting from our operations in the United States. The income tax provision differs from the expected tax provisions computed by applying the U.S. Federal statutory rate to loss before income taxes primarily because we have historically maintained a full valuation allowance on our deferred tax assets and to a lesser extent because of the impact of state income taxes. As described in our Form 10-K for the year ended December 31, 2013, we maintain a full valuation allowance in accordance with ASC 740, “Accounting for Income Taxes”, on our net deferred tax assets. Until we achieve and sustain an appropriate level of profitability, we plan to maintain a valuation allowance on our net deferred tax assets. | ||||||||
We are current with the filing of our federal and state income tax returns. Our income tax returns are open to examination by federal and state authorities, based on statute of limitations, which is three years. | ||||||||
Derivative Instruments | ' | |||||||
(j) | Derivative Instruments | |||||||
For derivative instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in fair value recognized in earnings each reporting period as a charge or credit to other expenses. We use the Monte Carlo simulation, and other models, as appropriate to value the derivative instruments at inception and subsequent valuation dates and the value is re-assessed at the end of each reporting period, in accordance with FASB ASC Topic 815, “Derivatives and Hedging”. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not the net-cash settlement of the derivative instrument could be required within twelve months of the balance sheet date. | ||||||||
Share-Based Compensation | ' | |||||||
(k) | Share-Based Compensation | |||||||
We record share-based compensation for transactions in which we exchange our equity instruments (shares of common stock, options and warrants) for services of employees, consultants and others based on the fair value of the equity instruments issued on the measurement date. The fair value of common stock awards is based on the observed market value of our stock. We calculate the fair value of options and warrants using the Black-Scholes option pricing model. Expense is recognized, net of expected forfeitures, over the period of performance. When the vesting of an award is subject to performance conditions, no expense is recognized until achievement of the performance condition is deemed to be probable. Awards to consultants are marked to market at each reporting period as they vest, and the resulting value is recognized as an adjustment against our earnings for the period. | ||||||||
Earnings and Loss Per Share | ' | |||||||
(l) | Earnings and Loss Per Share | |||||||
Basic earnings or loss per share are computed by dividing income or loss available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share include the effects on our weighted average number of common shares outstanding of the potential dilution of (i) outstanding options and warrants, as determined using the treasury stock method and (ii) convertible securities as determined using the as-if converted method. The following table sets forth the computation of basic and diluted earnings per share for the three months ended September 30, 2014: | ||||||||
Numerator for basic earnings per share calculation - income attributable to common shareholders | $ | 2,567,665 | ||||||
Interest on various convertible promissory notes | 361,414 | |||||||
Dividends for 10% convertible preferred stock | 152,237 | |||||||
Numerator for diluted earnings per share calculation - income attributable to common shareholders | $ | 3,081,316 | ||||||
Denominator for basic earnings per share - weighted-average shares outstanding | 69,066,096 | |||||||
Incremental shares attributable to: | ||||||||
Options and warrants | 194,762 | |||||||
Various convertible promissory notes | 50,360,850 | |||||||
10% convertible preferred stock | 8,349,975 | |||||||
Denominator for diluted earnings per share | 127,971,683 | |||||||
Basic earnings per share | $ | 0.04 | ||||||
Diluted earnings per share | $ | 0.02 | ||||||
For the nine months ended September 30, 2014 there was no dilutive effects of such securities as we incurred a net loss for the period. | ||||||||
Fair Value of Financial Instruments | ' | |||||||
(m) | Fair Value of Financial Instruments | |||||||
Fair value is defined as an exit price, which is the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date. The degree of judgment utilized in measuring the fair value of assets and liabilities generally correlates to the level of pricing observability. Financial assets and liabilities with readily available, actively quoted prices or for which fair value can be measured from actively quoted prices in active markets generally have more pricing observability and require less judgment in measuring fair value. Conversely, financial assets and liabilities that are rarely traded or not quoted have less price observability and are generally measured at fair value using valuation models that require more judgment. These valuation techniques involve some level of management estimation and judgment, the degree of which is dependent on the price transparency of the asset, liability or market and the nature of the asset or liability. We have categorized our financial assets and liabilities that are recurring at fair value into a three-level hierarchy in accordance with these provisions. | ||||||||
Concentration of Credit Risk | ' | |||||||
(n) | Concentration of Credit Risk | |||||||
We maintain our cash with several major U.S. domestic banks. The amount held in these banks exceeds the insured limit of $250,000 from time to time. The amount which exceeded the insured limit was approximately $2.5 million and $0.3 million at September 30, 2014 and December 31, 2013, respectively. We have not incurred losses related to these deposits. | ||||||||
New Accounting Pronouncements | ' | |||||||
(o) | New Accounting Pronouncements | |||||||
In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services, and the guidance defines a five step process to achieve this core principle. The ASU is effective for the Company's 2017 fiscal year and may be applied either (i) retrospectively to each prior reporting period presented with an election for certain specified practical expedients, or (ii) retrospectively with the cumulative effect of initially applying the ASU recognized at the date of initial application, with additional disclosure requirements. The Company is evaluating the potential impact of this new guidance, but does not currently anticipate that the application of ASU No. 2014-09 will have a significant effect on its financial condition, results of operations or its cash flows. We have not yet determined the method by which we will adopt the standard in 2017. | ||||||||
In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern, which provides guidance on determining when and how to disclose going-concern uncertainties in an entity's financial statements. The new standard requires management to perform interim and annual assessments of an entity's ability to continue as a going concern within one year of the date the financial statements are issued. An entity must provide certain disclosures if conditions or events raise substantial doubt about the entity's ability to continue as a going concern. The ASU is effective for annual periods ending after December 15, 2016, and interim periods thereafter, with early adoption permitted. The Company does not currently anticipate that the application of ASU No. 2014-15 will have an effect on its financial condition, results of operations or its cash flows. | ||||||||
Use of Estimates | ' | |||||||
(p) | Use of Estimates | |||||||
The preparation of our financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in these financial statements and accompanying notes. Actual results could differ from those estimates. | ||||||||
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Accounting Policies [Abstract] | ' | |||||||
Property and Equipment | ' | |||||||
Our property and equipment is comprised of the following: | ||||||||
September 30, | December 31, | |||||||
2014 | 2013 | |||||||
Equipment | $ | 17,893 | $ | 18,700 | ||||
Machinery and equipment | 9,881,835 | 8,803,087 | ||||||
Purchased software | 187,996 | 145,622 | ||||||
Furniture and fixtures | - | 14,599 | ||||||
Subtotal – property and equipment, at cost | 10,087,724 | 8,982,008 | ||||||
Less accumulated depreciation | -1,863,754 | -1,082,522 | ||||||
Net property and leasehold improvements | $ | 8,223,970 | $ | 7,899,486 | ||||
Computation of Basic and Diluted Earnings Per Share | ' | |||||||
The following table sets forth the computation of basic and diluted earnings per share for the three months ended September 30, 2014: | ||||||||
Numerator for basic earnings per share calculation - income attributable to common shareholders | $ | 2,567,665 | ||||||
Interest on various convertible promissory notes | 361,414 | |||||||
Dividends for 10% convertible preferred stock | 152,237 | |||||||
Numerator for diluted earnings per share calculation - income attributable to common shareholders | $ | 3,081,316 | ||||||
Denominator for basic earnings per share - weighted-average shares outstanding | 69,066,096 | |||||||
Incremental shares attributable to: | ||||||||
Options and warrants | 194,762 | |||||||
Various convertible promissory notes | 50,360,850 | |||||||
10% convertible preferred stock | 8,349,975 | |||||||
Denominator for diluted earnings per share | 127,971,683 | |||||||
Basic earnings per share | $ | 0.04 | ||||||
Diluted earnings per share | $ | 0.02 | ||||||
Reportable_Business_Segments_T
Reportable Business Segments (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
Segment Reporting [Abstract] | ' | |||||||||||||
Schedule of Revenue by Major Customers by Reporting Segments | ' | |||||||||||||
Segment Reporting - For the Three Months Ended September 30, 2014 | ||||||||||||||
Engineered | Reprocessed | Corporate | ||||||||||||
Products | Plastics | Activities | Combined | |||||||||||
Statement of Operations | ||||||||||||||
Revenue | $ | 1,667,668 | $ | 1,455,244 | $ | - | $ | 3,122,912 | ||||||
Costs of sales: | ||||||||||||||
Production | 1,714,300 | 2,187,950 | - | 3,902,250 | ||||||||||
Excess capacity & inventory adjustments | 369,806 | - | - | 369,806 | ||||||||||
Gross margin (loss) | -416,438 | -732,706 | - | -1,149,144 | ||||||||||
Product development & quality management | - | - | 52,219 | 52,219 | ||||||||||
Marketing & sales | - | - | 126,047 | 126,047 | ||||||||||
General & administrative | - | - | 1,069,672 | 1,069,672 | ||||||||||
Total operating expenses | - | - | 1,247,938 | 1,247,938 | ||||||||||
Loss from operations | -416,438 | -732,706 | -1,247,938 | -2,397,082 | ||||||||||
Other (income) expenses: | ||||||||||||||
Interest expense | - | - | 478,496 | 478,496 | ||||||||||
Amortization of debt discounts | - | - | 1,196,807 | 1,196,807 | ||||||||||
Impairment of intangible assets | - | - | 545,750 | 545,750 | ||||||||||
Fair value of common shares issued in excess of fair value of warrants tendered | - | - | -54 | -54 | ||||||||||
Change in fair value of derivative liabilities | - | - | -7,337,983 | -7,337,983 | ||||||||||
Total other (income) | - | - | -5,116,984 | -5,116,984 | ||||||||||
Net income (loss) | $ | -416,438 | $ | -732,706 | $ | 3,869,046 | $ | 2,719,902 | ||||||
Total assets at September 30, 2014 | $ | 8,215,092 | $ | 5,622,686 | $ | 4,474,200 | $ | 18,311,978 | ||||||
Segment Reporting - For the Nine Months Ended September 30, 2014 | ||||||||||||||
Engineered | Reprocessed | Corporate | ||||||||||||
Products | Plastics | Activities | Combined | |||||||||||
Statement of Operations | ||||||||||||||
Revenue | $ | 6,630,042 | $ | 5,397,867 | $ | - | $ | 12,027,909 | ||||||
Costs of sales: | ||||||||||||||
Production | 6,412,835 | 8,305,532 | - | 14,718,367 | ||||||||||
Excess capacity & inventory adjustments | 1,829,700 | - | - | 1,829,700 | ||||||||||
Gross margin (loss) | -1,612,493 | -2,907,665 | - | -4,520,158 | ||||||||||
Product development & quality management | - | - | 226,273 | 226,273 | ||||||||||
Marketing & sales | - | - | 801,633 | 801,633 | ||||||||||
General & administrative | - | - | 22,175,376 | 22,175,376 | ||||||||||
Total operating expenses | - | - | 23,203,282 | 23,203,282 | ||||||||||
Loss from operations | -1,612,493 | -2,907,665 | -23,203,282 | -27,723,440 | ||||||||||
Other (income) expenses: | ||||||||||||||
Interest expense | - | - | 1,320,127 | 1,320,127 | ||||||||||
Amortization of debt discounts | - | - | 2,055,894 | 2,055,894 | ||||||||||
Impairment of intangible assets | 545,750 | 545,750 | ||||||||||||
Fair value of common shares issued in excess of fair value of warrants tendered | - | - | 883,422 | 883,422 | ||||||||||
Change in fair value of derivative liabilities | - | - | -18,385,978 | -18,385,978 | ||||||||||
Total other (income) | - | - | -13,580,785 | -13,580,785 | ||||||||||
Net (loss) | $ | -1,612,493 | $ | -2,907,665 | $ | -9,622,497 | $ | -14,142,655 | ||||||
(1) Since the plastics recycling company which provided the second segment to our business was acquired in November 2013, we did not report segment information for the three or nine months ended September 30, 2013. | ||||||||||||||
Inventories_Tables
Inventories (Tables) | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Inventory, Net [Abstract] | ' | |||||||
Inventories | ' | |||||||
Our inventories consisted of: | ||||||||
September | December | |||||||
30, | 31, | |||||||
2014 | 2013 | |||||||
Finished products | $ | 3,744,682 | $ | 2,930,753 | ||||
Production materials | 780,568 | 1,024,762 | ||||||
Total inventories | $ | 4,525,250 | $ | 3,955,515 | ||||
Accrued_Liabilities_Tables
Accrued Liabilities (Tables) | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Accrued Liabilities [Abstract] | ' | |||||||
Accrued Liabilities | ' | |||||||
The components of accrued liabilities are: | ||||||||
September 30, | December 31, | |||||||
2014 | 2013 | |||||||
Royalties | $ | 470,047 | $ | 235,772 | ||||
Interest | 418,425 | 248,763 | ||||||
Rent | 273,106 | 78,797 | ||||||
10% convertible preferred stock dividends | 152,237 | 183,346 | ||||||
Payroll | 115,593 | 119,937 | ||||||
Real estate taxes | 83,569 | 8,962 | ||||||
Miscellaneous | 28,349 | 21,163 | ||||||
Total accrued liabilities | $ | 1,541,326 | $ | 896,740 | ||||
Derivative_Liabilities_Tables
Derivative Liabilities (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
Derivative Liabilities [Abstract] | ' | |||||||||||||
Schedule of Assumptions Used | ' | |||||||||||||
The estimated fair values of the derivative liabilities associated with the 8% Notes and the 12% Notes, for the conversion options and warrants issued through and as of September 30, 2014 were computed by a third party using Monte Carlo simulations based on the following ranges for each assumption: | ||||||||||||||
September 30, | ||||||||||||||
At Issuances | 2014 | |||||||||||||
Volatility | 40.0% to 45.0 | % | 40 | % | ||||||||||
Risk-free interest rate | 0.11% to 0.3 | % | 0.3% to 0.07 | % | ||||||||||
Dividend yield | 0 | % | 0 | % | ||||||||||
Expected life | 1.1 to 1.6 years | 0.5 to 0.9 years | ||||||||||||
Financial Liabilities Measured at Fair Value on Recurring Basis | ' | |||||||||||||
The following table summarizes the financial liabilities measured at fair value on a recurring basis as of September 30, 2014 and December 31, 2013, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value: | ||||||||||||||
As of September 30, 2014 | ||||||||||||||
Derivative | ||||||||||||||
Liabilities | ||||||||||||||
at | ||||||||||||||
Level 1 | Level 2 | Level 3 | Fair Value | |||||||||||
8% Convertible promissory notes: | ||||||||||||||
Conversion option | $ | - | $ | - | $ | 3,872,000 | $ | 3,872,000 | ||||||
Warrants | - | - | - | - | ||||||||||
12% Convertible promissory notes: | ||||||||||||||
Conversion option | - | - | 111,000 | 111,000 | ||||||||||
Derivative liabilities - Current | - | - | 3,983,000 | 3,983,000 | ||||||||||
Placement agent warrants - Non-current | - | - | 52,720 | 52,720 | ||||||||||
Derivative liabilities - Total | $ | - | $ | - | $ | 4,035,720 | $ | 4,035,720 | ||||||
As of December 31, 2013 | ||||||||||||||
Derivative | ||||||||||||||
Liabilities | ||||||||||||||
at | ||||||||||||||
Level 1 | Level 2 | Level 3 | Fair Value | |||||||||||
8% Convertible promissory notes: | ||||||||||||||
Conversion option | $ | - | $ | - | $ | 12,400,000 | $ | 12,400,000 | ||||||
Warrants | - | - | 4,790,000 | 4,790,000 | ||||||||||
Derivative liabilities - Current | - | - | 17,190,000 | 17,190,000 | ||||||||||
Placement agent warrants - Non-current | - | - | 296,194 | 296,194 | ||||||||||
Derivative liabilities - Total | $ | - | $ | - | $ | 17,486,194 | $ | 17,486,194 | ||||||
Reconciliation of Derivative Liability Used in Determining Fair Value | ' | |||||||||||||
The following table is a reconciliation of the derivative liabilities for which Level 3 inputs were used in determining fair value during the three and nine months ended September 30, 2014 and 2013: | ||||||||||||||
For the Three Months Ended September 30, 2014 | ||||||||||||||
Fair Value | ||||||||||||||
Balance - | of | Balance - | ||||||||||||
July 1, | Derivative | Change in | September 30, | |||||||||||
2014 | Liability | Fair Value | 2014 | |||||||||||
8% Convertible promissory notes: | ||||||||||||||
Conversion option | $ | 10,695,000 | $ | 402,000 | $ | -7,225,000 | $ | 3,872,000 | ||||||
Warrants | - | - | - | - | ||||||||||
12% Convertible promissory notes: | ||||||||||||||
Conversion option | - | 157,000 | -46,000 | 111,000 | ||||||||||
Derivative liabilities - Current | 10,695,000 | 559,000 | -7,271,000 | 3,983,000 | ||||||||||
Placement agent warrants - Non-current | 119,703 | - | -66,983 | 52,720 | ||||||||||
Derivative liabilities - Total | $ | 10,814,703 | $ | 559,000 | $ | -7,337,983 | $ | 4,035,720 | ||||||
For the Nine Months Ended September 30, 2014 | ||||||||||||||
Fair Value | ||||||||||||||
Balance - | of | Balance - | ||||||||||||
January 1, | Derivative | Change in | September 30, | |||||||||||
2014 | Liability | Fair Value | 2014 | |||||||||||
8% Convertible promissory notes: | ||||||||||||||
Conversion option | $ | 12,400,000 | $ | 4,387,139 | $ | -12,915,139 | $ | 3,872,000 | ||||||
Warrants | 4,790,000 | 391,365 | -5,181,365 | - | ||||||||||
12% Convertible promissory notes: | ||||||||||||||
Conversion option | 157,000 | -46,000 | 111,000 | |||||||||||
Derivative liabilities - Current | 17,190,000 | 4,935,504 | -18,142,504 | 3,983,000 | ||||||||||
Placement agent warrants - Non-current | 296,194 | - | -243,474 | 52,720 | ||||||||||
Derivative liabilities - Total | $ | 17,486,194 | $ | 4,935,504 | $ | -18,385,978 | $ | 4,035,720 | ||||||
For the Three Months Ended September 30, 2013 | ||||||||||||||
Fair Value | ||||||||||||||
Balance - | of | Balance - | ||||||||||||
July 1, | Derivative | Change in | September 30, | |||||||||||
2013 | Liability | Fair Value | 2013 | |||||||||||
8% Convertible promissory notes: | ||||||||||||||
Conversion option | $ | 1,520,000 | $ | - | $ | -460,000 | $ | 1,060,000 | ||||||
Warrants | 540,000 | - | -270,000 | 270,000 | ||||||||||
Derivative liabilities - Current | 2,060,000 | - | -730,000 | 1,330,000 | ||||||||||
Placement agent warrants - Non-current | 122,357 | - | - | 122,357 | ||||||||||
Derivative liabilities - Total | $ | 2,182,357 | $ | - | $ | -730,000 | $ | 1,452,357 | ||||||
For the Nine Months Ended September 30, 2013 | ||||||||||||||
Fair Value | ||||||||||||||
Balance - | of | Balance - | ||||||||||||
January 1, | Derivative | Change in | September 30, | |||||||||||
2013 | Liability | Fair Value | 2013 | |||||||||||
8% Convertible promissory notes: | ||||||||||||||
Conversion option | $ | 610,000 | $ | 545,426 | $ | -95,426 | $ | 1,060,000 | ||||||
Warrants | 220,000 | 249,151 | -199,151 | 270,000 | ||||||||||
Derivative liabilities - Current | 830,000 | 794,577 | -294,577 | 1,330,000 | ||||||||||
Placement agent warrants - Non-current | 81,716 | - | 40,641 | 122,357 | ||||||||||
Derivative liabilities - Total | $ | 911,716 | $ | 794,577 | $ | -253,936 | $ | 1,452,357 | ||||||
Debt_Tables
Debt (Tables) | 9 Months Ended | |||||||||
Sep. 30, 2014 | ||||||||||
Debt Disclosure [Abstract] | ' | |||||||||
Schedule Of Debt Instruments | ' | |||||||||
The components of our debt are summarized as follows: | ||||||||||
September 30, | December 31, | |||||||||
Due | 2014 | 2013 | ||||||||
8% convertible promissory notes (2012) | Beginning in August 2017 | $ | 16,628,188 | $ | 13,078,188 | |||||
12% revolving credit facility | 31-Dec-15 | 2,000,000 | 2,000,000 | |||||||
3% promissory note | 1-Feb-18 | 301,421 | 385,474 | |||||||
4.25% bank term loans | 15-Nov-18 | 4,500,000 | 4,500,000 | |||||||
8% convertible promissory notes (2014) | 11-Jun-19 | 2,000,000 | - | |||||||
12% convertible promissory notes | 31-Mar-15 | 1,000,000 | - | |||||||
5% bank promissory note | September 18 2017 | 4,000,000 | - | |||||||
Subtotal | 30,429,609 | 19,963,662 | ||||||||
Less debt discount | -5,075,218 | -2,173,559 | ||||||||
Subtotal – net of debt discount | 25,354,391 | 17,790,103 | ||||||||
Less current portion | 1,069,087 | 185,347 | ||||||||
Total – long term debt | $ | 24,285,304 | $ | 17,604,756 | ||||||
10_Convertible_Redeemable_Pref1
10% Convertible Redeemable Preferred Stock (Tables) | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Features Of Convertible Preferred Stock [Abstract] | ' | |||||||
Ten Percent Convertible Redeemable Preferred Stock | ' | |||||||
The components of our 10% convertible preferred stock, classified as temporary equity in our balance sheet, are summarized as follows: | ||||||||
September 30, | December 31, | |||||||
2014 | 2013 | |||||||
10% convertible preferred stock - face value | $ | 6,829,980 | $ | 6,946,230 | ||||
Unamortized discount | - | -221,386 | ||||||
10% convertible preferred stock, net of discount | $ | 6,829,980 | $ | 6,724,844 | ||||
Sharebased_Compensation_Tables
Share-based Compensation (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ' | |||||||||||||
Stock Option Activity | ' | |||||||||||||
The following table summarizes our stock option activity for the nine months ended September 30, 2014: | ||||||||||||||
Weighted- | ||||||||||||||
Number | Average | |||||||||||||
of Shares | Exercise | |||||||||||||
Issuable | Price | |||||||||||||
Balance, January 1, 2014 | 7,502,421 | $ | 1 | |||||||||||
Granted | 175,000 | 0.84 | ||||||||||||
Exercised | -186,225 | 0.88 | ||||||||||||
Cancelled | -2,513,068 | 0.63 | ||||||||||||
Balance, September 30, 2014 | 4,978,128 | $ | 1.19 | |||||||||||
Options Outstanding | ' | |||||||||||||
The following table summarizes options outstanding at September 30, 2014: | ||||||||||||||
Weighted- | ||||||||||||||
Weighted- | Average | |||||||||||||
Number | Average | Remaining | Aggregate | |||||||||||
of Shares | Exercise | Term | Intrinsic | |||||||||||
Issuable | Price | (Years) | Value | |||||||||||
Exercisable | 3,068,128 | $ | 1.03 | 2.6 | $ | 3,000 | ||||||||
Not vested | 1,910,000 | 1.45 | 3.8 | - | ||||||||||
Balance, September 30, 2014 | 4,978,128 | $ | 1.19 | 3 | $ | 3,000 | ||||||||
Schedule of Stockholders' Equity Note, Warrants or Rights | ' | |||||||||||||
The following table sets forth our warrant activity during the nine months ended September 30, 2014: | ||||||||||||||
Weighted- | ||||||||||||||
Number | Average | |||||||||||||
of Shares | Exercise | |||||||||||||
Issuable | Price | |||||||||||||
Balance, January 1, 2014 | 41,595,655 | $ | 0.69 | |||||||||||
Granted | 7,435,901 | 0.67 | ||||||||||||
Exercised | -155,568 | 0.6 | ||||||||||||
Expired | -1,383,067 | 0.88 | ||||||||||||
Cancelled pursuant to Tender Offer | -46,276,774 | 0.67 | ||||||||||||
Balance, September 30, 2014 | 1,216,147 | $ | 1.11 | |||||||||||
The following table sets forth the warrants outstanding at September 30 2014: | ||||||||||||||
Weighted- | ||||||||||||||
Number | Average | |||||||||||||
of Shares | Exercise | |||||||||||||
Issuable | Price | |||||||||||||
10% convertible debenture - bonus warrants | 133,336 | $ | 0.6 | |||||||||||
10% convertible preferred stock – warrants | 580,000 | 1 | ||||||||||||
Consultants | 502,811 | 1.37 | ||||||||||||
Total | 1,216,147 | $ | 1.11 | |||||||||||
Summary_of_Significant_Account3
Summary of Significant Accounting Policies - Additional Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | |
Summary Of Significant Accounting Policies [Line Items] | ' | ' | ' | ' | ' |
Depreciation expense | $268,300 | $75,000 | $781,200 | $147,600 | ' |
Cash, insured limit | 250,000 | ' | 250,000 | ' | ' |
Reserve For Uncollectable Accounts Receivables | 74,000 | ' | 74,000 | ' | ' |
Amortization of Intangible Assets | 19,800 | ' | 59,250 | 0 | ' |
Assets | 18,311,978 | ' | 18,311,978 | ' | 16,009,423 |
Intangible assets, net (excluding goodwill) | 545,800 | ' | 545,800 | ' | ' |
Plastics Reporting Segment | ' | ' | ' | ' | ' |
Summary Of Significant Accounting Policies [Line Items] | ' | ' | ' | ' | ' |
Assets | 1,500,000 | ' | 1,500,000 | ' | 1,500,000 |
Bank One | ' | ' | ' | ' | ' |
Summary Of Significant Accounting Policies [Line Items] | ' | ' | ' | ' | ' |
Cash, insured limit | 2,500,000 | ' | 2,500,000 | ' | 300,000 |
Rutgers | ' | ' | ' | ' | ' |
Summary Of Significant Accounting Policies [Line Items] | ' | ' | ' | ' | ' |
Royalty Expense | $50,000 | $50,000 | $150,000 | $150,000 | ' |
Property_and_Equipment_Detail
Property and Equipment (Detail) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Property, equipment, and leasehold improvements, at cost: | ' | ' |
Equipment | $17,893 | $18,700 |
Machinery and equipment | 9,881,835 | 8,803,087 |
Purchased software | 187,996 | 145,622 |
Furniture and fixtures | 0 | 14,599 |
Subtotal - property and equipment, at cost | 10,087,724 | 8,982,008 |
Less accumulated depreciation | -1,863,754 | -1,082,522 |
Net property and leasehold improvements | ($8,223,970) | ($7,899,486) |
Computation_of_Basic_and_Dilut
Computation of Basic and Diluted Earnings Per Share (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Schedule Of Computation Of Basic And Diluted Earnings Per Share [Line Items] | ' | ' | ' | ' |
Numerator for basic earnings per share calculation - income attributable to common shareholders | $2,567,665 | ($1,357,233) | ($14,860,270) | ($5,531,305) |
Interest on various convertible promissory notes | 361,414 | ' | ' | ' |
Dividends for 10% convertible preferred stock | 152,237 | ' | ' | ' |
Numerator for diluted earnings per share calculation - income attributable to common shareholders | $3,081,316 | ' | ' | ' |
Denominator for basic earnings per share - weighted-average shares outstanding | 69,066,096 | 30,307,925 | ' | ' |
Denominator for diluted earnings per share | 127,971,683 | 30,307,925 | ' | ' |
Basic earnings per share | $0.04 | ($0.04) | ' | ' |
Diluted earnings per share | $0.02 | ($0.04) | ' | ' |
Options and warrants | ' | ' | ' | ' |
Schedule Of Computation Of Basic And Diluted Earnings Per Share [Line Items] | ' | ' | ' | ' |
Denominator for basic earnings per share - weighted-average shares outstanding | 194,762 | ' | ' | ' |
10% convertible preferred stock warrants | ' | ' | ' | ' |
Schedule Of Computation Of Basic And Diluted Earnings Per Share [Line Items] | ' | ' | ' | ' |
Denominator for basic earnings per share - weighted-average shares outstanding | 8,349,975 | ' | ' | ' |
Various convertible promissory notes | ' | ' | ' | ' |
Schedule Of Computation Of Basic And Diluted Earnings Per Share [Line Items] | ' | ' | ' | ' |
Denominator for basic earnings per share - weighted-average shares outstanding | 50,360,850 | ' | ' | ' |
Going_Concern_Additional_Infor
Going Concern - Additional Information (Detail) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Going Concern [Line Items] | ' | ' |
Working capital | $155,900 | ' |
Stockholders' deficit | -21,290,962 | -28,768,218 |
Accumulated deficit | ($73,411,318) | ($59,268,663) |
Reportable_Business_Segments_D
Reportable Business Segments (Detail) (USD $) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | |
Revenue, Major Customer [Line Items] | ' | ' | ' | ' | ' |
Revenue | $3,122,912 | $1,272,689 | $12,027,909 | $4,532,274 | ' |
Production | 3,902,250 | 1,189,172 | 14,718,367 | 4,145,008 | ' |
Excess capacity & inventory adjustments | 369,806 | 293,941 | 1,829,700 | 394,740 | ' |
Gross margin (loss) | -1,149,144 | -210,424 | -4,520,158 | -7,474 | ' |
Product development & quality management | 52,219 | 213,525 | 226,273 | 682,141 | ' |
Marketing and sales | 126,047 | 202,106 | 801,633 | 703,201 | ' |
General & administrative | 1,069,672 | 732,427 | 22,175,376 | 2,216,656 | ' |
Total operating expenses | 1,247,938 | 1,148,058 | 23,203,282 | 3,601,998 | ' |
Loss from operations | -2,397,082 | -1,358,482 | -27,723,440 | -3,609,472 | ' |
Interest expense | 478,496 | 190,318 | 1,320,127 | 542,971 | ' |
Amortization of debt discounts | 1,196,807 | 132,497 | 2,055,894 | 414,525 | ' |
Impairment of intangible assets | 545,750 | 0 | 545,750 | 0 | ' |
Fair value of common shares issued in excess of fair value of warrants tendered | -54 | 0 | 883,422 | 0 | ' |
Change in fair value of derivative liabilities | -7,337,983 | -730,000 | -18,385,978 | -253,936 | ' |
Total other (income) | -5,116,984 | -407,185 | -13,580,785 | 703,560 | ' |
Net income (loss) | 2,719,902 | -951,297 | -14,142,655 | -4,313,032 | ' |
Total assets | 18,311,978 | ' | 18,311,978 | ' | 16,009,423 |
Engineered Products | ' | ' | ' | ' | ' |
Revenue, Major Customer [Line Items] | ' | ' | ' | ' | ' |
Revenue | 1,667,668 | ' | 6,630,042 | ' | ' |
Production | 1,714,300 | ' | 6,412,835 | ' | ' |
Excess capacity & inventory adjustments | 369,806 | ' | 1,829,700 | ' | ' |
Gross margin (loss) | -416,438 | ' | -1,612,493 | ' | ' |
Product development & quality management | 0 | ' | 0 | ' | ' |
Marketing and sales | 0 | ' | 0 | ' | ' |
General & administrative | 0 | ' | 0 | ' | ' |
Total operating expenses | 0 | ' | 0 | ' | ' |
Loss from operations | -416,438 | ' | -1,612,493 | ' | ' |
Interest expense | 0 | ' | 0 | ' | ' |
Amortization of debt discounts | 0 | ' | 0 | ' | ' |
Impairment of intangible assets | 0 | ' | ' | ' | ' |
Fair value of common shares issued in excess of fair value of warrants tendered | 0 | ' | 0 | ' | ' |
Change in fair value of derivative liabilities | 0 | ' | 0 | ' | ' |
Total other (income) | 0 | ' | 0 | ' | ' |
Net income (loss) | -416,438 | ' | -1,612,493 | ' | ' |
Total assets | 8,215,092 | ' | 8,215,092 | ' | ' |
Reprocessed Plastics | ' | ' | ' | ' | ' |
Revenue, Major Customer [Line Items] | ' | ' | ' | ' | ' |
Revenue | 1,455,244 | ' | 5,397,867 | ' | ' |
Production | 2,187,950 | ' | 8,305,532 | ' | ' |
Excess capacity & inventory adjustments | 0 | ' | 0 | ' | ' |
Gross margin (loss) | -732,706 | ' | -2,907,665 | ' | ' |
Product development & quality management | 0 | ' | 0 | ' | ' |
Marketing and sales | 0 | ' | 0 | ' | ' |
General & administrative | 0 | ' | 0 | ' | ' |
Total operating expenses | 0 | ' | 0 | ' | ' |
Loss from operations | -732,706 | ' | -2,907,665 | ' | ' |
Interest expense | 0 | ' | 0 | ' | ' |
Amortization of debt discounts | 0 | ' | 0 | ' | ' |
Impairment of intangible assets | 0 | ' | ' | ' | ' |
Fair value of common shares issued in excess of fair value of warrants tendered | 0 | ' | 0 | ' | ' |
Change in fair value of derivative liabilities | 0 | ' | 0 | ' | ' |
Total other (income) | 0 | ' | 0 | ' | ' |
Net income (loss) | -732,706 | ' | -2,907,665 | ' | ' |
Total assets | 5,622,686 | ' | 5,622,686 | ' | ' |
Corporate Activities | ' | ' | ' | ' | ' |
Revenue, Major Customer [Line Items] | ' | ' | ' | ' | ' |
Revenue | 0 | ' | 0 | ' | ' |
Production | 0 | ' | 0 | ' | ' |
Excess capacity & inventory adjustments | 0 | ' | 0 | ' | ' |
Gross margin (loss) | 0 | ' | 0 | ' | ' |
Product development & quality management | 52,219 | ' | 226,273 | ' | ' |
Marketing and sales | 126,047 | ' | 801,633 | ' | ' |
General & administrative | 1,069,672 | ' | 22,175,376 | ' | ' |
Total operating expenses | 1,247,938 | ' | 23,203,282 | ' | ' |
Loss from operations | -1,247,938 | ' | -23,203,282 | ' | ' |
Interest expense | 478,496 | ' | 1,320,127 | ' | ' |
Amortization of debt discounts | 1,196,807 | ' | 2,055,894 | ' | ' |
Impairment of intangible assets | 545,750 | ' | ' | ' | ' |
Fair value of common shares issued in excess of fair value of warrants tendered | -54 | ' | 883,422 | ' | ' |
Change in fair value of derivative liabilities | -7,337,983 | ' | -18,385,978 | ' | ' |
Total other (income) | -5,116,984 | ' | -13,580,785 | ' | ' |
Net income (loss) | 3,869,046 | ' | -9,622,497 | ' | ' |
Total assets | $4,474,200 | ' | $4,474,200 | ' | ' |
Inventories_Detail
Inventories (Detail) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Schedule of Inventory [Line Items] | ' | ' |
Finished products | $3,744,682 | $2,930,753 |
Production materials | 780,568 | 1,024,762 |
Total inventories | $4,525,250 | $3,955,515 |
Accrued_Liabilities_Detail
Accrued Liabilities (Detail) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Schedule of Accrued Liabilities [Line Items] | ' | ' |
Royalties | $470,047 | $235,772 |
Interest | 418,425 | 248,763 |
Rent | 273,106 | 78,797 |
Payroll | 115,593 | 119,937 |
Real estate taxes | 83,569 | 8,962 |
Miscellaneous | 28,349 | 21,163 |
Total accrued liabilities | 1,541,326 | 896,740 |
Redeemable Preferred Stock | ' | ' |
Schedule of Accrued Liabilities [Line Items] | ' | ' |
10% convertible preferred stock dividends | $152,237 | $183,346 |
Derivative_Liabilities_Additio
Derivative Liabilities - Additional Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 9 Months Ended | ||||||||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | |
Warrant Holder | Warrant Holder | 10% convertible preferred stock | Conversion Options | Conversion Options | Conversion Options | Warrant | Warrant | Warrant | Warrant | Maximum [Member] | |||||
Issuances date | 8% Convertible promissory note | 12% Convertible Promissory Notes | Placement Agent | Placement Agent | Placement Agent | ||||||||||
Derivative [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Derivative liability at fair value | ' | ' | ' | ' | ' | ' | ' | $157,000 | $3,900,000 | $111,000 | ' | ' | ' | ' | ' |
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | ' | ' | ' | ' | ' | ' | 58,352 | ' | ' | ' | ' | ' | ' | ' | ' |
Expected life | ' | ' | ' | ' | ' | ' | '1 year 6 months | ' | ' | ' | ' | ' | ' | ' | '10 months 24 days |
Volatility | ' | ' | 40.00% | ' | ' | ' | 85.00% | ' | ' | ' | ' | ' | ' | ' | ' |
Risk-free interest rate | ' | ' | ' | ' | ' | ' | 0.36% | ' | ' | ' | ' | ' | ' | ' | 0.07% |
Warrants Not Settleable in Cash, Fair Value Disclosure | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 52,700 | 52,700 | 296,200 | ' |
Change in fair value of warrant liability | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 67,700 | 243,500 | ' | ' |
Increase decrease in fair value of un hedged derivative instruments | ' | ' | ' | ' | ' | ' | ' | ' | 7,200,000 | 46,000 | 3,400,000 | ' | ' | ' | ' |
Convertible preferred stock per share | ' | ' | ' | ' | ' | ' | $10 | ' | ' | ' | ' | ' | ' | ' | ' |
Stock issued in exchange for warrants tendered | ' | ' | ' | ' | 19,100,000 | 19,100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair value of common shares issued in excess of fair value of warrants tendered | ($54) | $0 | $883,422 | $0 | $883,500 | $883,500 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair Value Assumptions, Expected Dividend Rate | ' | ' | 0.00% | ' | ' | ' | 0.00% | ' | ' | ' | ' | ' | ' | ' | ' |
Conversion_Option_and_Warrant_
Conversion Option and Warrant Derivative Liabilities (Detail) | 9 Months Ended |
Sep. 30, 2014 | |
Derivative [Line Items] | ' |
Volatility | 40.00% |
Dividend yield | 0.00% |
Minimum | ' |
Derivative [Line Items] | ' |
Risk-free interest rate | 0.30% |
Expected life, in years | '6 months |
Maximum | ' |
Derivative [Line Items] | ' |
Risk-free interest rate | 0.07% |
Expected life, in years | '10 months 24 days |
Issuances date | ' |
Derivative [Line Items] | ' |
Dividend yield | 0.00% |
Issuances date | Minimum | ' |
Derivative [Line Items] | ' |
Volatility | 40.00% |
Risk-free interest rate | 0.11% |
Expected life, in years | '1 year 1 month 6 days |
Issuances date | Maximum | ' |
Derivative [Line Items] | ' |
Volatility | 45.00% |
Risk-free interest rate | 0.30% |
Expected life, in years | '1 year 7 months 6 days |
Financial_Liabilities_Measured
Financial Liabilities Measured at Fair Value on Recurring Basis (Detail) (USD $) | Sep. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Dec. 31, 2012 |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ' | ' | ' | ' | ' | ' |
Derivative liability current | $3,983,000 | ' | $17,190,000 | ' | ' | ' |
Derivative liability non-current | 52,720 | ' | 296,194 | ' | ' | ' |
Fair Value, Measurements, Recurring | ' | ' | ' | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ' | ' | ' | ' | ' | ' |
Derivative liability current | 3,983,000 | ' | 17,190,000 | ' | ' | ' |
Derivative Liability - Total | 4,035,720 | ' | 17,486,194 | ' | ' | ' |
Fair Value, Measurements, Recurring | Conversion Options | 8% convertible promissory notes | ' | ' | ' | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ' | ' | ' | ' | ' | ' |
Derivative liability current | 3,872,000 | ' | 12,400,000 | ' | ' | ' |
Fair Value, Measurements, Recurring | Conversion Options | 12% Convertible promissory notes | ' | ' | ' | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ' | ' | ' | ' | ' | ' |
Derivative liability current | 111,000 | ' | ' | ' | ' | ' |
Fair Value, Measurements, Recurring | Warrant | 8% convertible promissory notes | ' | ' | ' | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ' | ' | ' | ' | ' | ' |
Derivative liability current | 0 | ' | 4,790,000 | ' | ' | ' |
Fair Value, Measurements, Recurring | Placement Agent | ' | ' | ' | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ' | ' | ' | ' | ' | ' |
Derivative liability non-current | 52,720 | ' | 296,194 | ' | ' | ' |
Fair Value, Inputs, Level 1 | Fair Value, Measurements, Recurring | ' | ' | ' | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ' | ' | ' | ' | ' | ' |
Derivative liability current | 0 | ' | 0 | ' | ' | ' |
Derivative Liability - Total | 0 | ' | 0 | ' | ' | ' |
Fair Value, Inputs, Level 1 | Fair Value, Measurements, Recurring | Conversion Options | 8% convertible promissory notes | ' | ' | ' | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ' | ' | ' | ' | ' | ' |
Derivative liability current | 0 | ' | 0 | ' | ' | ' |
Fair Value, Inputs, Level 1 | Fair Value, Measurements, Recurring | Conversion Options | 12% Convertible promissory notes | ' | ' | ' | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ' | ' | ' | ' | ' | ' |
Derivative liability current | 0 | ' | ' | ' | ' | ' |
Fair Value, Inputs, Level 1 | Fair Value, Measurements, Recurring | Warrant | 8% convertible promissory notes | ' | ' | ' | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ' | ' | ' | ' | ' | ' |
Derivative liability current | 0 | ' | 0 | ' | ' | ' |
Fair Value, Inputs, Level 1 | Fair Value, Measurements, Recurring | Placement Agent | ' | ' | ' | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ' | ' | ' | ' | ' | ' |
Derivative liability non-current | 0 | ' | 0 | ' | ' | ' |
Fair Value, Inputs, Level 2 | Fair Value, Measurements, Recurring | ' | ' | ' | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ' | ' | ' | ' | ' | ' |
Derivative liability current | 0 | ' | 0 | ' | ' | ' |
Derivative Liability - Total | 0 | ' | 0 | ' | ' | ' |
Fair Value, Inputs, Level 2 | Fair Value, Measurements, Recurring | Conversion Options | 8% convertible promissory notes | ' | ' | ' | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ' | ' | ' | ' | ' | ' |
Derivative liability current | 0 | ' | 0 | ' | ' | ' |
Fair Value, Inputs, Level 2 | Fair Value, Measurements, Recurring | Conversion Options | 12% Convertible promissory notes | ' | ' | ' | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ' | ' | ' | ' | ' | ' |
Derivative liability current | 0 | ' | ' | ' | ' | ' |
Fair Value, Inputs, Level 2 | Fair Value, Measurements, Recurring | Warrant | 8% convertible promissory notes | ' | ' | ' | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ' | ' | ' | ' | ' | ' |
Derivative liability current | 0 | ' | 0 | ' | ' | ' |
Fair Value, Inputs, Level 2 | Fair Value, Measurements, Recurring | Placement Agent | ' | ' | ' | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ' | ' | ' | ' | ' | ' |
Derivative liability non-current | 0 | ' | 0 | ' | ' | ' |
Fair Value, Inputs, Level 3 | Conversion Options | 8% convertible promissory notes | ' | ' | ' | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ' | ' | ' | ' | ' | ' |
Derivative Liability - Total | 3,872,000 | 10,695,000 | 12,400,000 | 1,060,000 | 1,520,000 | 610,000 |
Fair Value, Inputs, Level 3 | Warrant | 8% convertible promissory notes | ' | ' | ' | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ' | ' | ' | ' | ' | ' |
Derivative Liability - Total | 0 | 0 | 4,790,000 | 270,000 | 540,000 | 220,000 |
Fair Value, Inputs, Level 3 | Placement Agent | ' | ' | ' | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ' | ' | ' | ' | ' | ' |
Derivative liability non-current | 52,720 | 119,703 | 296,194 | 122,357 | 122,357 | 81,716 |
Fair Value, Inputs, Level 3 | Fair Value, Measurements, Recurring | ' | ' | ' | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ' | ' | ' | ' | ' | ' |
Derivative liability current | 3,983,000 | ' | 17,190,000 | ' | ' | ' |
Derivative Liability - Total | 4,035,720 | ' | 17,486,194 | ' | ' | ' |
Fair Value, Inputs, Level 3 | Fair Value, Measurements, Recurring | Conversion Options | 8% convertible promissory notes | ' | ' | ' | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ' | ' | ' | ' | ' | ' |
Derivative liability current | 3,872,000 | ' | 12,400,000 | ' | ' | ' |
Fair Value, Inputs, Level 3 | Fair Value, Measurements, Recurring | Conversion Options | 12% Convertible promissory notes | ' | ' | ' | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ' | ' | ' | ' | ' | ' |
Derivative liability current | 111,000 | ' | ' | ' | ' | ' |
Fair Value, Inputs, Level 3 | Fair Value, Measurements, Recurring | Warrant | 8% convertible promissory notes | ' | ' | ' | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ' | ' | ' | ' | ' | ' |
Derivative liability current | 0 | ' | 4,790,000 | ' | ' | ' |
Fair Value, Inputs, Level 3 | Fair Value, Measurements, Recurring | Placement Agent | ' | ' | ' | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ' | ' | ' | ' | ' | ' |
Derivative liability non-current | $52,720 | ' | $296,194 | ' | ' | ' |
Reconciliation_of_Derivative_L
Reconciliation of Derivative Liability Used in Determining Fair Value (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Derivative [Line Items] | ' | ' | ' | ' |
Derivative liabilities, Non-current | ' | ' | $296,194 | ' |
Derivative liabilities, Non-current | 52,720 | ' | 52,720 | ' |
Fair value of derivative liability | ' | ' | -18,142,504 | -294,576 |
Conversion options | 8% convertible promissory notes | Fair Value, Inputs, Level 3 | ' | ' | ' | ' |
Derivative [Line Items] | ' | ' | ' | ' |
Derivative Liability | 10,695,000 | 1,520,000 | 12,400,000 | 610,000 |
Fair value of derivative liability | 402,000 | 0 | 4,387,139 | 545,426 |
Change in fair value | -7,225,000 | -460,000 | -12,915,139 | -95,426 |
Derivative Liability | 3,872,000 | 1,060,000 | 3,872,000 | 1,060,000 |
Conversion options | 12% Convertible Promissory Notes | Fair Value, Inputs, Level 3 | ' | ' | ' | ' |
Derivative [Line Items] | ' | ' | ' | ' |
Derivative Liability | 0 | ' | ' | ' |
Fair value of derivative liability | 157,000 | ' | 157,000 | ' |
Change in fair value | -46,000 | ' | -46,000 | ' |
Derivative Liability | 111,000 | ' | 111,000 | ' |
Warrant | 8% convertible promissory notes | Fair Value, Inputs, Level 3 | ' | ' | ' | ' |
Derivative [Line Items] | ' | ' | ' | ' |
Derivative Liability | 0 | 540,000 | 4,790,000 | 220,000 |
Fair value of derivative liability | 0 | 0 | 391,365 | 249,151 |
Change in fair value | 0 | -270,000 | -5,181,365 | -199,151 |
Derivative Liability | 0 | 270,000 | 0 | 270,000 |
Placement agent | Fair Value, Inputs, Level 3 | ' | ' | ' | ' |
Derivative [Line Items] | ' | ' | ' | ' |
Derivative liabilities, Non-current | 119,703 | 122,357 | 296,194 | 81,716 |
Fair value of derivative liability, Non-current | 0 | 0 | 0 | 0 |
Change in fair value, Non-current | -66,983 | 0 | -243,474 | 40,641 |
Derivative liabilities, Non-current | 52,720 | 122,357 | 52,720 | 122,357 |
Derivative liabilities - current | Fair Value, Inputs, Level 3 | ' | ' | ' | ' |
Derivative [Line Items] | ' | ' | ' | ' |
Derivative Liability | 10,695,000 | 2,060,000 | 17,190,000 | 830,000 |
Fair value of derivative liability | 559,000 | 0 | 4,935,504 | 794,577 |
Change in fair value | -7,271,000 | -730,000 | -18,142,504 | -294,577 |
Derivative Liability | 3,983,000 | 1,330,000 | 3,983,000 | 1,330,000 |
Derivative liabilities - total | Fair Value, Inputs, Level 3 | ' | ' | ' | ' |
Derivative [Line Items] | ' | ' | ' | ' |
Derivative Liability | 10,814,703 | 2,182,357 | 17,486,194 | 911,716 |
Fair value of derivative liability | 559,000 | 0 | 4,935,504 | 794,577 |
Change in fair value | -7,337,983 | -730,000 | -18,385,978 | -253,936 |
Derivative Liability | $4,035,720 | $1,452,357 | $4,035,720 | $1,452,357 |
Debt_Additional_Information_De
Debt - Additional Information (Detail) (USD $) | 2 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Nov. 15, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | |
8% convertible promissory notes 2012 | 8% convertible promissory notes 2012 | 8% convertible promissory notes 2012 | 8% convertible promissory notes 2012 | 8% convertible promissory notes 2012 | 8% convertible promissory notes 2012 | MLTM And Samuel Rose 12% convertible revolving credit agreement conversion options | MLTM And Samuel Rose 12% convertible revolving credit agreement conversion options | MLTM And Samuel Rose 12% convertible revolving credit agreement conversion options | MLTM And Samuel Rose 12% convertible Letter Of credit agreement conversion options | Bank Term Loan One | Bank Term Loan Two | 3% promissory note | 3% promissory note | 3% promissory note | 3% promissory note | 12% Revolving Credit Agreement | 12% Revolving Credit Agreement | 4.25% Bank Term Loans | 4.25% Bank Term Loans | Twelve Percentage Convertible Promossory Notes [Member] | Twelve Percentage Convertible Promossory Notes [Member] | Twelve Percentage Convertible Promossory Notes [Member] | Five Percentage Bank Promissory Note [Member] | Five Percentage Bank Promissory Note [Member] | Five Percentage Bank Promissory Note [Member] | 8% convertible promissory notes 2014 | 8% convertible promissory notes 2014 | |||||
Investor | Unaffiliated Investor | |||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Convertible debt | $30,429,609 | $30,429,609 | ' | $19,963,662 | $15,628,188 | ' | $15,628,188 | ' | ' | $1,000,000 | ' | ' | ' | ' | ' | ' | $301,421 | $301,421 | $385,474 | ' | ' | ' | ' | ' | $1,000,000 | $1,000,000 | $0 | $4,000,000 | $4,000,000 | $0 | $2,000,000 | $2,000,000 |
Convertible debt, interest rate | ' | ' | ' | ' | 8.00% | ' | 8.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3.00% | ' | ' | ' | ' | 12.00% | 12.00% | ' | 5.00% | 5.00% | ' | ' | ' |
Convertible debt, conversion price | ' | ' | ' | ' | ' | ' | ' | ' | $0.40 | $0.74 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Warrants to purchase common stock, shares | ' | ' | ' | ' | 37,800,000 | ' | 37,800,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument Payment Terms | ' | ' | ' | ' | ' | ' | 'including all outstanding principal and accrued and unpaid interest, are due and payable on the earlier of five years from date of issuance or upon the occurrence of an Event of Default | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amortization of convertible debt discount | ' | 2,055,894 | 414,525 | ' | 1,100,000 | 132,500 | 1,900,000 | 414,500 | ' | ' | 23,400 | 120,300 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Issuance Cost | ' | ' | ' | ' | ' | ' | 146,700 | ' | ' | ' | ' | 7,800 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Line of credit facility, maximum borrowing capacity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,000,000 | 500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Line of Credit Facility, Interest Rate During Period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 12.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Line Of Credit Facility Interest Rate During Period Payable By Cash | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Line Of Credit Facility Interest Rate During Period Payable By Common Stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Line of Credit Facility, Amount Outstanding | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Line Of Credit Facility Periodic Payment Shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Line Of Credit Facility Commission Fee Rate During Period Payable By Cash | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Line Of Credit Facility Commission Fee Rate During Period Payable By Common Stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Face Amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,000,000 | 3,500,000 | ' | ' | ' | 301,400 | ' | ' | ' | ' | 1,000,000 | 1,000,000 | ' | ' | ' | ' | ' | ' |
Debt Instrument, Interest Rate at Period End | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4.25% | 4.25% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Long-term Debt, Maturities, Repayments of Principal in Next Twelve Months | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Long-term Debt, Maturities, Repayments of Principal in Year Two | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Long-term Debt, Maturities, Repayments of Principal in Year Three | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 250,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Long-term Debt, Maturities, Repayments of Principal in Year Four | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 250,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Conversion, Converted Instrument, Shares Issued | 116,250 | ' | ' | ' | ' | ' | 7,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Unamortized Discount | 5,075,218 | 5,075,218 | ' | 2,173,559 | 4,900,000 | ' | 4,900,000 | ' | ' | ' | 5,900 | 5,900 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest Expense, Other | ' | ' | ' | ' | 316,300 | ' | 922,200 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,400 | 7,900 | ' | ' | 59,700 | 186,800 | 48,900 | 145,600 | 8,400 | 8,400 | ' | 6,100 | 6,100 | ' | ' | ' |
Interest Paid, Total | ' | 221,824 | 1,971 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 70,700 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Paid-in-Kind Interest | ' | 1,069,537 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 116,100 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest Expense, Debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 36,700 | 43,200 |
Debt Instrument, Increase, Accrued Interest | ' | ' | ' | ' | ' | ' | 316,300 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock Issued During Period, Shares, New Issues | ' | ' | ' | ' | ' | ' | 687,614 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair Value Of Common Stock Consideration For Revolving Loans | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 140,900 | 140,900 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock Issued During Period, Shares, New Issues | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument Percentage Of Conversion Price | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 85.00% | ' | ' | ' | ' | ' | ' |
Proceeds from Bank Debt | ' | $4,000,000 | $0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $4,000,000 | ' | ' | ' |
Debt Instrument Maturity Month and Year | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1-Feb-18 | ' | ' | ' | ' | ' | ' | ' | 31-Mar-15 | ' | ' | 18-Sep-17 | ' | ' | ' |
Debt_Detail
Debt (Detail) (USD $) | 9 Months Ended | |
Sep. 30, 2014 | Dec. 31, 2013 | |
Debt Instrument [Line Items] | ' | ' |
Convertible debt | $30,429,609 | $19,963,662 |
Less debt discount | -5,075,218 | -2,173,559 |
Subtotal - net of debt discount | 25,354,391 | 17,790,103 |
Less current portion | 1,069,087 | 185,347 |
Total - long term debt | 13,677,111 | 11,030,913 |
8% convertible promissory notes due on august 2017 | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Convertible debt, due date | 1-Aug-17 | ' |
Convertible debt | 16,628,188 | 13,078,188 |
12% convertible revolving credit agreement | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Convertible debt, due date | 31-Dec-15 | ' |
Convertible debt | 2,000,000 | 2,000,000 |
3% promissory note | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Convertible debt, due date | 1-Feb-18 | ' |
Convertible debt | 301,421 | 385,474 |
4.25% Bank term loans | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Convertible debt, due date | 15-Nov-18 | ' |
Convertible debt | 4,500,000 | 4,500,000 |
8% convertible promissory notes (2014) | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Convertible debt, due date | 11-Jun-19 | ' |
Convertible debt | 2,000,000 | 0 |
12% Convertible Promissory Notes | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Convertible debt, due date | 31-Mar-15 | ' |
Convertible debt | 1,000,000 | 0 |
5% Bank Promissory Note | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Convertible debt, due date | 18-Sep-17 | ' |
Convertible debt | $4,000,000 | $0 |
10_Convertible_Redeemable_Pref2
10% Convertible Redeemable Preferred Stock - Additional Information (Detail) (USD $) | 9 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2014 | Jun. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2011 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2011 | Mar. 31, 2014 | Sep. 30, 2014 | |
10% Convertible Preferred Stock | 10% Convertible Preferred Stock | 10% Convertible Preferred Stock | 10% Convertible Preferred Stock | 10% Convertible Preferred Stock | 10% Convertible Preferred Stock | 10% Convertible Preferred Stock | 10% Convertible Preferred Stock | Preferred Stock | Beneficial Conversion Feature | Minimum | ||
Revised Conversion Terms One | Revised Conversion Terms Two | Revised Conversion Term Three | Revised Conversion Terms | |||||||||
Temporary Equity [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
10% Convertible preferred stock, authorized | ' | ' | 880,000 | 880,000 | 880,000 | ' | ' | ' | ' | ' | ' | ' |
10% Convertible preferred stock, stated value | ' | ' | ' | $10 | ' | ' | ' | ' | ' | ' | ' | ' |
Minimum weighted average price of common stock for 60 consecutive trading days to convert preferred stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $4 |
10% Convertible preferred stock, conversion rate | ' | ' | ' | $1 | ' | ' | ' | ' | ' | ' | ' | ' |
Warrant exercise price | ' | ' | $10 | $1 | ' | ' | ' | ' | ' | ' | ' | ' |
10% Convertible preferred stock, issued | ' | ' | 682,998 | 759,773 | 694,623 | ' | ' | ' | ' | ' | ' | ' |
10% Convertible preferred stock, gross proceeds from issuance | ' | ' | ' | $7,597,730 | ' | ' | ' | ' | ' | ' | ' | ' |
10% Convertible preferred stock, unamortized discount | ' | ' | ' | ' | ' | ' | ' | ' | ' | 828,340 | ' | ' |
Conversion rate at issuance | ' | ' | ' | 2,100,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Amortization of preferred stock discount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 221,400 | ' |
Common stock issued upon conversion Preferred Stock, shares | ' | ' | 116,250 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Preferred Stock shares converted | ' | ' | 11,625 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock shares required to be issued if the remaining holders of Preferred Stock elect to convert | 8,300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock Issued During Period, Shares, Issued for Services | 330,900 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares of stock called by warrants | ' | ' | 58,352 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Dividends, Common Stock, Cash | $152,200 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Description of period extension of expiration date of preferred stock warrants | ' | ' | ' | ' | ' | ' | ' | ' | 'Holders of $6,079,980 of the outstanding Preferred Stock accepted this offer. | ' | ' | ' |
Convertible Debt, Conversion Price | ' | ' | ' | ' | ' | $0.80 | $0.70 | $0.60 | ' | ' | ' | ' |
Percentage of warrant outstanding | ' | 84.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Components_of_Preferred_Stock_
Components of Preferred Stock as Temporary Equity (Detail) (Redeemable Preferred Stock, USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Redeemable Preferred Stock | ' | ' |
Temporary Equity [Line Items] | ' | ' |
10% convertible preferred stock - face value | $6,829,980 | $6,946,230 |
Unamortized discount | 0 | -221,386 |
10% convertible preferred stock, net of discount | $6,829,980 | $6,724,844 |
Stockholders_Equity_Additional
Stockholders' Equity - Additional Information (Detail) (USD $) | 2 Months Ended | 9 Months Ended | 1 Months Ended | 2 Months Ended | 1 Months Ended | 2 Months Ended | |||||||||||||
Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Jan. 31, 2014 | Jul. 31, 2014 | Apr. 30, 2014 | Jan. 31, 2014 | Jul. 31, 2014 | Jul. 31, 2014 | Apr. 30, 2014 | Jan. 31, 2014 | Jan. 31, 2014 | Apr. 30, 2014 | Jul. 31, 2014 | Apr. 30, 2014 | Jan. 31, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2011 | |
Stock Option | 12% Revolving credit agreement | 12% Revolving credit agreement | 12% Revolving credit agreement | Maximum | 8% Convertible promissory note | 8% Convertible promissory note | 8% Convertible promissory note | 12% Revolving credit agreement | Consulting Services | 10% Convertible Preferred Stock | 10% Convertible Preferred Stock | 10% Convertible Preferred Stock | 10% Convertible Preferred Stock | 10% Convertible Preferred Stock | 10% Convertible Preferred Stock | ||||
Warrant | Warrant | ||||||||||||||||||
Stockholders Equity Note [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock, authorized | 250,000,000 | 250,000,000 | 250,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Preferred stock, authorized | 2,500,000 | 2,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock, shares issued | 69,167,050 | 69,167,050 | 31,168,905 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
10% Convertible preferred stock, authorized | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 880,000 | 880,000 | 880,000 |
10% Convertible preferred stock, issued | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 682,998 | 694,623 | 759,773 |
10% Convertible preferred stock, outstanding | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 682,998 | 694,623 | ' |
Common stock dividends, shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 274,918 | 215,942 | 181,531 | ' | ' | ' |
Shares issued for dividend payments | ' | $527,338 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $184,195 | $159,797 | $183,346 | ' | ' | ' |
Stock issued during period shares interest payments | ' | ' | ' | ' | ' | 50,424 | 8,522 | ' | 507,483 | 359,300 | 235,853 | ' | ' | ' | ' | ' | ' | ' | ' |
Stock issued during period value interest payments | ' | 1,069,537 | ' | ' | ' | 37,314 | 8,522 | ' | 340,014 | 265,882 | 235,853 | ' | ' | ' | ' | ' | ' | ' | ' |
Stock issued during period shares stock options exercised | ' | 186,225 | ' | 107,461 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock Issued During Period, Value, Issued for Services | ' | ' | ' | ' | 41,058 | ' | ' | 24,824,069 | ' | ' | ' | 140,894 | 100,000 | ' | ' | ' | ' | ' | ' |
Stock Issued During Period, Shares, Issued for Services | ' | 330,900 | ' | ' | 61,280 | ' | ' | 35,462,955 | ' | ' | ' | 220,147 | 196,079 | ' | ' | ' | ' | ' | ' |
Debt Conversion, Converted Instrument, Amount | ' | $4,866,269 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $116,250 | ' | ' |
Common Stock Shares Outstanding | 69,167,050 | 69,167,050 | 31,168,905 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Conversion, Converted Instrument, Shares Issued | 116,250 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 11,625 | ' | ' |
Share_based_Compensation_Addit
Share - based Compensation - Additional Information (Detail) (USD $) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 1 Months Ended | 9 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | 1 Months Ended | 9 Months Ended | ||||||
Jun. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Sep. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Jun. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | |
Tender Offer | Stock Option | Maximum | Maximum | Minimum | Warrant | Warrant | Warrant | Warrant | Convertible Promissory Notes Warrants | Convertible Debenture Bonus Warrants | Consultant Warrants | Convertible Preferred Stock Warrants | ||||
Stock Option | Stock Option | Stock Option | Tender Offer | |||||||||||||
Share-Based Compensation [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair value of warrants for 8% convertible promissory notes | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $391,400 | ' | $84,700 | ' |
Change in fair value of derivative | ' | ' | ' | ' | ' | ' | ' | ' | ' | 14,900 | 14,900 | ' | ' | ' | ' | ' |
Granted during the period | ' | ' | ' | ' | $0.54 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Other general and administrative expense | ' | ' | ' | ' | 102,500 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share-Based Compensation Arrangement By Share-Based Payment Award, Equity Instruments Other Than Options, Grants In Period | ' | ' | 1,216,147 | ' | 175,000 | ' | ' | ' | ' | ' | ' | ' | ' | 133,336 | ' | 580,000 |
Dividend yield | ' | ' | ' | ' | 0.00% | ' | ' | ' | 0.00% | ' | ' | ' | 0.00% | ' | 0.00% | ' |
Expected volatility rate | ' | ' | ' | ' | 90.00% | ' | ' | ' | ' | ' | 90.00% | ' | 45.00% | ' | 90.00% | ' |
Risk-free interest rate | ' | ' | ' | ' | 1.50% | ' | ' | ' | ' | ' | 0.80% | ' | 0.20% | ' | 0.80% | ' |
Common Stock Capital Shares Reserved For Future Issuance | ' | ' | ' | ' | ' | 7,000,000 | 2,000,000 | 2,000,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Share-based Compensation, Expense | ' | 48,000 | 394,400 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Warrants To Purchase Shares Of Common Stock | 46,200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Tendered Shares Exchanged During Period Shares | 35,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Tendered Shares Exchanged During Period Value | $24,800,000 | ' | ' | $4,900,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common Stock, Par or Stated Value Per Share | ' | ' | ' | ' | ' | ' | ' | ' | $10 | ' | ' | ' | ' | ' | ' | ' |
Stock Issued During Period, Shares, New Issues | ' | ' | ' | ' | ' | ' | ' | ' | 14.17707 | ' | ' | 47,700,000 | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term | ' | ' | ' | ' | '5 years | ' | ' | ' | ' | ' | ' | ' | '1 year 6 months | ' | '3 years | ' |
Share based compensation arrangement by share based payment award, Fair value assumptions, Expected term description | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'less than one year | ' | ' | ' | ' | ' |
Class Of Warrant Or Right, Number Of Securities Called By Warrants Or Rights | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 7,275,901 | ' | 160,000 | ' |
Warrant exercise price | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.60 | ' | $1.20 | ' |
Stock_Option_Activity_Detail
Stock Option Activity (Detail) (USD $) | 9 Months Ended |
Sep. 30, 2014 | |
Number of Shares Issuable | ' |
Balance, Beginning | 7,502,421 |
Granted | 175,000 |
Exercised | -186,225 |
Cancelled | -2,513,068 |
Balance, Ending | 4,978,128 |
Weighted-Average Exercise Price | ' |
Balance, Beginning | $1 |
Granted | $0.84 |
Exercised | $0.88 |
Cancelled | $0.63 |
Balance, Ending | $1.19 |
Options_Outstanding_Detail
Options Outstanding (Detail) (USD $) | 9 Months Ended | |
Sep. 30, 2014 | Dec. 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Exercisable, Number of Shares Issuable | 3,068,128 | ' |
Not vested, Number of Shares Issuable | 1,910,000 | ' |
Balance, Number of Shares Issuable | 4,978,128 | 7,502,421 |
Exercisable, Weighted-Average Exercise Price | $1.03 | ' |
Not vested, Weighted-Average Exercise Price | $1.45 | ' |
Balance, Weighted-Average Exercise Price | $1.19 | $1 |
Exercisable, Weighted-Average Remaining Term (Years) | '2 years 7 months 6 days | ' |
Not vested, Weighted-Average Remaining Term (Years) | '3 years 9 months 18 days | ' |
Balance, Weighted-Average Remaining Term (Years) | '3 years | ' |
Exercisable, Aggregate Intrinsic Value | $3,000 | ' |
Not vested, Aggregate Intrinsic Value | 0 | ' |
Balance, Aggregate Intrinsic Value | $3,000 | ' |
Warrant_Activity_Detail
Warrant Activity (Detail) (USD $) | 9 Months Ended |
Sep. 30, 2014 | |
Number of Shares Issuable | ' |
Granted | 1,216,147 |
Weighted Average Exercise Price | ' |
Granted | $1.11 |
Warrant | ' |
Number of Shares Issuable | ' |
Balance, Beginning | 41,595,655 |
Granted | 7,435,901 |
Exercised | -155,568 |
Expired | -1,383,067 |
Cancelled pursuant to Tender Offer | -46,276,774 |
Balance, Ending | 1,216,147 |
Weighted Average Exercise Price | ' |
Balance, Beginning | $0.69 |
Granted | $0.67 |
Exercised | $0.60 |
Expired | $0.88 |
Cancelled pursuant to Tender Offer | $0.67 |
Balance, Ending | $1.11 |
Warrants_Outstanding_Detail
Warrants Outstanding (Detail) (USD $) | 9 Months Ended |
Sep. 30, 2014 | |
Share-Based Compensation [Line Items] | ' |
Number of Shares Issuable | 1,216,147 |
Weighted-Average Exercise Price | $1.11 |
10% convertible debenture - bonus warrants | ' |
Share-Based Compensation [Line Items] | ' |
Number of Shares Issuable | 133,336 |
Weighted-Average Exercise Price | $0.60 |
10% convertible preferred stock - warrants | ' |
Share-Based Compensation [Line Items] | ' |
Number of Shares Issuable | 580,000 |
Weighted-Average Exercise Price | $1 |
Consultants | ' |
Share-Based Compensation [Line Items] | ' |
Number of Shares Issuable | 502,811 |
Weighted-Average Exercise Price | $1.37 |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) (USD $) | 12 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2013 |
Income Tax [Line Items] | ' |
Operating loss carryforwards | $25.70 |
Operating loss carryforwards, Expiration Dates | '2033 |
Business_Concentration_Additio
Business Concentration - Additional Information (Detail) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2014 | Sep. 30, 2014 | |
Supplier Concentration Risk | ' | ' |
Concentration risk percentage | 37.00% | 33.00% |
Customer Concentration Risk | ' | ' |
Concentration risk percentage | 72.00% | 54.00% |
ECOTRAX rail ties | ' | ' |
Concentration risk percentage | ' | 18.00% |
Commitments_and_Contingencies_
Commitments and Contingencies - Additional Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 01, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Nov. 15, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Production facility [Member] | Production facility [Member] | Production facility [Member] | Processing facility [Member] | Processing facility [Member] | Processing facility [Member] | Charged to costs of sales | Charged to costs of sales | Charged to operating expenses | Charged to operating expenses | ||||
Commitments and Contingencies [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Lease agreement, Current monthly lease payments | $3,800 | $3,800 | ' | ' | ' | $21,875 | ' | ' | $25,750 | ' | ' | ' | ' |
Facility rent expense | 11,500 | 34,600 | ' | 113,400 | 340,100 | ' | 95,800 | 286,600 | ' | ' | ' | ' | ' |
Royalty payment to Rutgers, minimum rate | 1.50% | 1.50% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Royalty payment to Rutgers, maximum rate | 3.00% | 3.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Lease Expiration Date | ' | 31-Oct-14 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Deffered Lease And Rental Expense | ' | ' | ' | 212,100 | 212,100 | ' | 61,000 | 61,000 | ' | ' | ' | ' | ' |
Lease term | ' | ' | ' | ' | '35 years | ' | ' | '15 years | ' | ' | ' | ' | ' |
Royalties accrued | $470,047 | $470,047 | $235,772 | ' | ' | ' | ' | ' | ' | $22,400 | $19,200 | $27,600 | $30,800 |
Related_Party_Transactions_Add
Related Party Transactions - Additional Information (Detail) (USD $) | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2011 | Jun. 30, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Sep. 11, 2012 | Sep. 30, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Sep. 30, 2014 |
Revolving Loan Agreement | Revolving Loan Agreement | Revolving Loan Agreement | 5% Bank Promissory Note | Mr. Rose | Mr. Rose | Mr. Rose | Mr. Rose | Mr. Rose | Mr. Rose | Mr. Rose | Mr. Rose | Rose and Walters | Rose and Walters | Samuel G. Rose | Samuel G. Rose | Samuel G. Rose | Samuel G. Rose | Samuel G. Rose | Mltm Lending, Llc and The Ml Dynasty Trust | Mltm Lending, Llc and The Ml Dynasty Trust | Mltm Lending, Llc and The Ml Dynasty Trust | Mltm Lending, Llc and The Ml Dynasty Trust | Mltm Lending, Llc and The Ml Dynasty Trust | Mltm Lending, Llc and The Ml Dynasty Trust | Mltm Lending, Llc and The Ml Dynasty Trust | Mltm Lending, Llc and The Ml Dynasty Trust | Mltm Lending, Llc and The Ml Dynasty Trust | Mltm Lending, Llc and The Ml Dynasty Trust | Mltm Lending, Llc and The Ml Dynasty Trust | Mltm Lending, Llc and The Ml Dynasty Trust | Mltm Lending, Llc and The Ml Dynasty Trust | Mltm Lending, Llc and The Ml Dynasty Trust | Mltm Lending, Llc and The Ml Dynasty Trust | Mltm Lending, Llc and The Ml Dynasty Trust | Allen Kronstadt | Allen Kronstadt | Allen Kronstadt | Allen Kronstadt | Allen Kronstadt | ||
12% Convertible Revolving Credit Agreement | Revolving Loan Agreement | Revolving Loan Agreement | Revolving Loan Agreement | Revolving Loan Agreement | 10% convertible redeemable preferred stock | 10% convertible redeemable preferred stock | 10% convertible redeemable preferred stock | 8% convertible promissory notes | 8% convertible promissory notes | 8% convertible promissory notes | 8% convertible promissory notes | Revolving Loan Agreement | Julie Walters | Mr. Rose | Common Stock | 8% convertible promissory notes | 8% convertible promissory notes | 8% convertible promissory notes | 8% convertible promissory notes | Revolving Loan Agreement | Revolving Loan Agreement | Revolving Loan Agreement | Revolving Loan Agreement | Revolving Loan Agreement | 12% Convertible Promissory Notes | 12% Convertible Promissory Notes | Mr. Rose | Mr. Rose | Mr. Rose | 8% convertible promissory notes | 8% convertible promissory notes | 8% convertible promissory notes | 12% Convertible Promissory Notes | ||||||||
Common Stock | Common Stock | Revolving Loan Agreement | Cash | Cash | Common Stock | Cash | Cash | Revolving Loan Agreement | Revolving Loan Agreement | Revolving Loan Agreement | Purchase Agreement | ||||||||||||||||||||||||||||||
Common Stock | Cash | ||||||||||||||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 500,000 | ' | 13,023,200 | ' | ' | ' | ' | ' | ' | ' | ' | 12,221,100 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 13,023,200 | ' |
Minority interest ownership percentage by noncontrolling owners | ' | ' | ' | ' | 5.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5.00% | ' | ' | ' | ' |
Debt issued, principal amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $5,209,300 | ' | $666,666 | $666,666 | $333,333 | ' | ' | ' | ' | $666,667 | ' | ' | ' | ' | ' | ' | ' | ' | $333,334 | ' | ' | ' | ' | ' | $666,667 | $666,667 | $5,209,300 | $333,333 |
Debt instrument, interest rate, stated percentage | ' | ' | ' | 12.00% | 5.00% | ' | ' | ' | ' | ' | ' | ' | ' | 8.00% | ' | 8.00% | 8.00% | 12.00% | ' | 12.00% | ' | ' | 8.00% | ' | ' | ' | ' | ' | ' | ' | ' | 12.00% | ' | ' | ' | ' | ' | 8.00% | 8.00% | 8.00% | 12.00% |
Sale Of Preferred Stock Shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Sale Of Preferred Stock Value | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issued for dividend payments (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 583,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Line of credit facility, maximum borrowing capacity | ' | ' | ' | ' | 4,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Line of credit facility, interest rate during period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 12.00% | 8.00% | 4.00% | ' | ' | ' | ' | ' |
Line of credit facility maximum amount outstanding during period | ' | ' | ' | ' | ' | ' | ' | 2,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Convertible, Conversion Price | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.40 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument Convertible Interest Expense Shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,053,200 | ' | ' | ' | ' | ' | ' | ' | ' | 969,600 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,032,400 | ' |
Line of credit facility revolving loan issued to lender | ' | ' | 200,000 | ' | ' | ' | 100,000 | ' | 200,000 | 97,200 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 97,200 | ' | ' | ' | ' | ' | 100,000 | ' | 200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Line of credit facility revolving loan issued total shares | ' | ' | 600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Warrant exercise price | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Line of credit facility, periodic payment, interest | ' | 29,200 | 88,400 | ' | ' | 2,800 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 12,200 | 14,400 | ' | ' | ' | ' | ' | ' | ' | 12,200 | 14,400 | 29,200 | 30,300 | ' | ' | 88,400 | ' | 2,800 | ' | ' | ' | ' | 12,200 | 14,400 | ' | 2,800 |
Proceeds from lines of credit | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Line of credit facility, description | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '(i) 2% of the LC Sublimit in cash and (ii) shares of common stock, with an aggregate value of 4% of the LC Sublimit | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common shares issuable upon conversion of convertible stock | 8,300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,500,000 | 2,500,000 | ' | ' | ' | ' | ' | 2,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,500,000 | 2,500,000 | ' | ' |
Number of common stock in exchange of warrants | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 259,300 | ' | 10,900,000 | ' | ' | ' | ' | ' | ' | ' | ' | 10,200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10,900,000 | ' |
Class of warrant or right, outstanding | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 500,000 | ' | 13,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | 12,200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 13,000,000 | ' |
Line of credit facility revolving loan in cash | ' | ' | ' | ' | ' | ' | ' | ' | ' | 30,300 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Conversion, Converted Instrument, Rate | ' | 85.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 85.00% | ' | ' | ' | ' | ' | ' | ' | ' | 85.00% |
Line of Credit Facility, Maximum Borrowing Capacity | ' | ' | ' | ' | $4,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |