Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2014 | Oct. 29, 2014 | |
Document And Entity Information | ' | ' |
Entity Registrant Name | 'LAPOLLA INDUSTRIES INC | ' |
Entity Central Index Key | '0000875296 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Sep-14 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Is Entity a Well-known Seasoned Issuer? | 'No | ' |
Is Entity a Voluntary Filer? | 'No | ' |
Is Entity's Reporting Status Current? | 'Yes | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Common Stock, Shares Outstanding | ' | 115,423,905 |
Document Fiscal Period Focus | 'Q3 | ' |
Document Fiscal Year Focus | '2014 | ' |
Condensed_Balance_Sheets
Condensed Balance Sheets (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Current Assets: | ' | ' |
Cash | ' | ' |
Trade Receivables, Net | 8,865,019 | 7,694,589 |
Costs and Estimated Earnings in Excess of Billings on Uncompleted Contract | 226,033 | ' |
Inventories | 4,117,012 | 5,421,935 |
Prepaid Expenses and Other Current Assets | 628,702 | 1,250,314 |
Total Current Assets | 13,836,766 | 14,366,838 |
Property, Plant and Equipment | 1,457,539 | 1,600,679 |
Other Assets: | ' | ' |
Goodwill | 4,234,828 | 4,234,828 |
Other Intangible Assets, Net | 1,177,837 | 1,165,157 |
Deposits and Other Non-Current Assets, Net | 449,832 | 686,658 |
Total Other Assets | 5,862,497 | 6,086,643 |
Total Assets | 21,156,802 | 22,054,160 |
Current Liabilities: | ' | ' |
Accounts Payable | 5,994,722 | 6,694,633 |
Accrued Expenses and Other Current Liabilities | 1,156,979 | 1,456,895 |
Current Portion of Long-Term Debt | ' | 4,599 |
Total Current Liabilities | 7,151,701 | 8,156,127 |
Other Liabilities: | ' | ' |
Non-Current Portion of Revolver Loan | 5,442,030 | 4,539,163 |
Non-Current Portion of Notes Payable- New Enhanced | 7,027,882 | 6,683,561 |
Non-Current Portion of Note Payable - Related Party | 1,300,000 | 1,300,000 |
Accrued Interest- Note Payable- Related Party | 172,300 | 117,633 |
Total Other Liabilities | 13,942,212 | 12,640,357 |
Total Liabilities | 21,093,913 | 20,796,484 |
Stockholders' Equity: | ' | ' |
Common Stock, $.01 Par Value; 140,000,000 Shares Authorized; 115,423,903 and 114,148,378 Issued and Outstanding for September 30, 2014 and December 31, 2013, respectively. | 1,154,239 | 1,141,484 |
Additional Paid-In Capital | 87,855,480 | 86,734,757 |
Accumulated (Deficit) | -88,823,919 | -86,495,654 |
Accumulated Other Comprehensive (Loss) | -122,911 | -122,911 |
Total Stockholders' Equity | 62,889 | 1,257,676 |
Total Liabilities and Stockholders' Equity | $21,156,802 | $22,054,160 |
Condensed_Balance_Sheets_Paren
Condensed Balance Sheets (Parenthetical) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Stockholders' Equity: | ' | ' |
Common Stock, par value (in dollars per share) | $0.01 | $0.01 |
Common Stock, shares authorized (in shares) | 140,000,000 | 140,000,000 |
Common Stock, shares issued (in shares) | 115,423,903 | 114,148,378 |
Common Stock, shares outstanding (in shares) | 115,423,903 | 114,148,378 |
Condensed_Statements_of_Operat
Condensed Statements of Operations and Comprehensive Loss (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Income Statement [Abstract] | ' | ' | ' | ' |
Sales | $17,874,308 | $18,074,101 | $52,661,376 | $52,837,387 |
Cost of Sales | 14,588,682 | 14,136,145 | 42,437,341 | 41,416,495 |
Gross Profit | 3,285,626 | 3,937,956 | 10,224,035 | 11,420,892 |
Operating Expenses: | ' | ' | ' | ' |
Selling, General and Administrative | 3,341,230 | 3,396,028 | 9,774,425 | 9,873,835 |
Professional Fees | 129,295 | 192,196 | 485,243 | 816,688 |
Depreciation | 42,216 | 41,786 | 126,995 | 131,046 |
Amortization of Other Intangible Assets | 78,653 | 80,325 | 212,428 | 338,776 |
Consulting Fees | 130,309 | 133,327 | 365,072 | 351,656 |
Total Operating Expenses | 3,721,703 | 3,843,662 | 10,964,163 | 11,512,001 |
Operating Income (Loss) | -436,077 | 94,294 | -740,128 | -91,109 |
Other (Income) Expense: | ' | ' | ' | ' |
Interest Expense | 306,505 | 226,808 | 879,052 | 783,590 |
Interest Expense-Related Party | 203,877 | 187,870 | 604,298 | 557,585 |
Interest Expense- Amortization of Discount | 46,007 | ' | 136,512 | ' |
(Gain) Loss on Derivative Liability | ' | ' | ' | -65,656 |
Other, Net | 21,893 | -23,206 | -31,725 | -41,540 |
Total Other (Income) Expense | 578,282 | 391,472 | 1,588,137 | 1,233,979 |
Net Loss | -1,014,359 | -297,178 | -2,328,265 | -1,325,088 |
Net Loss Per Share- Basic and Diluted | ($0.01) | $0 | ($0.02) | ($0.01) |
Weighted Average Shares Outstanding | 115,204,510 | 112,155,974 | 114,821,758 | 110,945,316 |
Other Comprehensive (Loss): | ' | ' | ' | ' |
Foreign Currency Translation Adjustment (Loss) | ' | ' | ' | -2,205 |
Total Other Comprehensive (Loss) | ' | ' | ' | -2,205 |
Comprehensive (Loss) | ($1,014,359) | ($297,178) | ($2,328,265) | ($1,327,293) |
Condensed_Statements_of_Cash_F
Condensed Statements of Cash Flows (USD $) | 9 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Cash Flows From Operating Activities | ' | ' |
Net Loss: | ($2,328,265) | ($1,325,088) |
Adjustments to Reconcile Net Loss to Net Cash (Used in) Operating Activities: | ' | ' |
Depreciation | 300,619 | 343,538 |
Amortization of Other Intangible Assets | 212,428 | 338,776 |
Provision for Losses on Accounts Receivable | 603,796 | 190,654 |
Share Based Compensation Expense | 583,844 | 1,008,063 |
Interest Expense-Related Party | 604,298 | 557,585 |
Interest Expense-Enhanced Notes PIK | 207,809 | ' |
Interest Expense-Amortization of Discount | 136,512 | ' |
Loss on Foreign Currency Exchange | 46,391 | ' |
Gain on Derivative Liability | ' | -65,656 |
Gain on Disposal of Asset | -4,052 | -7,148 |
Changes in Assets and Liabilities: | ' | ' |
Trade Receivables | -1,821,303 | -1,179,635 |
Costs and Estimated Earnings in Excess of Billings on Uncompleted Contract | -226,033 | ' |
Inventories | 1,304,923 | -313,396 |
Prepaid Expenses and Other Current Assets | 621,612 | -4,804 |
Other Intangible Assets | -225,108 | -96,715 |
Deposits and Other Non-Current Assets | 236,826 | -274,871 |
Accounts Payable | -699,221 | 711,582 |
Accrued Expenses and Other Current Liabilities | -299,916 | 105,651 |
Net Cash (Used in) Operating Activities | -744,840 | -11,464 |
Cash Flows From Investing Activities | ' | ' |
Acquisitions of Property, Plant and Equipment | -206,427 | -40,401 |
Proceeds from Disposal of Property, Plant and Equipment | 53,000 | 28,786 |
Net Cash Provided by (Used in) Investing Activities | -153,427 | -11,615 |
Cash Flows From Financing Activities | ' | ' |
Proceeds from Revolver Loan | 54,567,575 | 56,715,217 |
Principal Repayments to Revolver Loan | -53,664,709 | -56,000,604 |
Principal Repayments to Notes Payable- Enhanced | ' | -673,331 |
Principal Repayments on Long Term Debt | -4,599 | -15,998 |
Net Cash Provided by Financing Activities | 898,267 | 25,284 |
Net Effect of Exchange Rate Changes on Cash | ' | -2,205 |
Net Change in Cash | ' | ' |
Cash at Beginning of Period | ' | ' |
Cash at End of Period | ' | ' |
Supplemental Disclosure of Cash Flow Information: | ' | ' |
Cash Payments for Interest | 790,575 | 598,769 |
Supplemental Schedule of Non Cash Investing and Financing Activities: | ' | ' |
Issuance of Restricted Common Stock for Related Party Personal Guaranty on Note Payable | $329,074 | $504,863 |
Summary_of_Organization_Basis_
Summary of Organization, Basis of Presentation, and Critical Accounting Policies, Estimates, and Assumptions | 9 Months Ended |
Sep. 30, 2014 | |
Accounting Policies [Abstract] | ' |
Summary of Organization, Basis of Presentation, and Critical Accounting Policies, Estimates, and Assumptions | ' |
Note 1. Basis of Presentation, Critical Accounting Policies, Estimates, and Assumptions. | |
The condensed financial statements included herein are unaudited. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted pursuant to the rules and regulations of the SEC. In the opinion of management, the accompanying statements reflect adjustments necessary to present fairly the financial position, results of operations and cash flows for those periods indicated, and contain adequate disclosure to make the information presented not misleading. Adjustments included herein are of a normal, recurring nature unless otherwise disclosed in the Notes to the condensed financial statements. The condensed financial statements included herein should be read in conjunction with the financial statements and Notes thereto included in Lapolla’s latest annual report on Form 10-K in order to fully understand the basis of presentation. Results of operations for interim periods are not necessarily indicative of the results of operations for a full year. Certain amounts in the prior years have been reclassified to conform to the 2014 unaudited condensed financial statement presentation. Reference is made to Management’s Discussion and Analysis of Financial Condition and Results of Operations on page 14. See Part I, Item 1A, in our Annual Report on Form 10-K for the year ended December 31, 2013 (“2013 Annual Report”) for risk factors that could impact results. Refer to the Company’s 2013 Annual Report for a description of major accounting policies. There have been no material changes to these accounting policies during the three and nine months ended September 30, 2014. | |
Fixed-Price Contracts | |
The Company’s AirTight Division performs work under fixed-price contracts. The lengths of the fixed-price contracts vary but are typically less than one year. In accordance with industry practice, the Company includes asset and liability accounts relating to fixed-price contracts, including related deferred income taxes, if applicable, in current assets and liabilities even when such amounts are realizable or payable over a period in excess of one year. Revenues from fixed-price contracts are recognized on the percentage-of-completion method, measured by the percentage of costs incurred to date to estimated total costs for each contract. Fixed-price contract costs include all direct material, labor costs, equipment and those indirect costs related to contract performance, such as indirect labor, supplies, tools, and repairs costs. General and administrative costs are charged to expense as incurred. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Changes in job performance, job conditions and estimated profitability, including those arising from contract penalty provisions and final contract settlements may result in revisions to costs and income and are recognized in the period in which the revisions are determined. The asset "costs and estimated earnings in excess of billings on uncompleted contracts" represents revenues recognized in excess of amounts billed. The liability "billings in excess of costs and estimated earnings on uncompleted contracts" represents billings in excess of revenues recognized. | |
Income Taxes | |
The Company’s provision for income taxes is determined using the U.S. federal statutory rate. The Company recognizes deferred tax assets and liabilities for temporary differences between the financial reporting basis and the tax basis of our assets and liabilities along with net operating loss and tax credit carryovers. The Company’s deferred tax asset was approximately $23.1 million and $23.5 million at September 30, 2014 and December 31, 2013, respectively. The Company recorded a valuation allowance against the deferred tax asset of $23.1 million and $23.5 million at September 30, 2014 and December 31, 2013, respectively, reducing its net carrying value to zero. The Company had no increase or decrease in unrecognized income tax benefits or any accrued interest or penalties relating to tax uncertainties at September 30, 2014 and December 31, 2013. Unrecognized tax benefits are not expected to increase or decrease within the next twelve months. | |
Impairment of Long-Lived Assets | |
Property, Plant and Equipment | |
Property, plant and equipment is recorded at cost and depreciated using the straight-line method, which deducts equal amounts of the cost of each asset from earnings every year over its estimated economic useful life. The estimated economic useful life of an asset is monitored to determine its appropriateness, especially in light of changed business circumstances. Property, plant, and equipment held for use is grouped for impairment testing at the lowest level for which there is an identifiable cash flow. Impairment testing of the asset group occurs whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. Such circumstances would include a significant decrease in the market value of a long-lived asset grouping, a significant adverse change in the manner in which the asset grouping is being used or in its physical condition, a history of operating or cash flow losses associated with the use of the asset grouping, or changes in the expected useful life of the long-lived assets. If such circumstances are determined to exist, an estimate of undiscounted future cash flows produced by that asset group is compared to the carrying value to determine whether impairment exists. If an asset group is determined to be impaired, the loss is measured based on the difference between the asset group’s fair value and its carrying value. An estimate of the asset group’s fair value is based on the discounted value of its estimated cash flows. Assets to be disposed of by sale are reported at the lower of carrying amount or fair value less cost to sell. The assumptions underlying cash flow projections represent our best estimates at the time of the impairment review. Factors that we must estimate include industry and market conditions, sales volume and prices, costs to produce, etc. Changes in key assumptions or actual conditions that differ from estimates could result in an impairment charge. Management believes it uses reasonable and supportable assumptions when performing impairment reviews and cannot predict the occurrence of future events and circumstances that could result in impairment charges. The Company does not believe any indicators of impairment exist for property, plant and equipment at September 30, 2014. Net property, plant and equipment totaled $1,457,539 and $1,600,679 as of and for the quarter and year ended September 30, 2014 and December 31, 2013, respectively. Depreciation expense totaled $96,695 and $110,838, of which $54,479 and $69,052, and $300,619 and $343,538, of which $173,624 and $212,492, was included in cost of sales, for the three and nine months ended September 30, 2014 and 2013, respectively. | |
Goodwill | |
Goodwill represents the excess of the aggregate purchase price over the fair value of net tangible and identifiable intangible asset of an acquired business. Goodwill was $4,234,828 at September 30, 2014 and December 31, 2013. The Company operates two reporting units or segments, Foam and Coatings. Disclosures related to goodwill are included in Note 9 to the financial statements. The Company evaluates goodwill for impairment on an annual basis, or more frequently if management believes indicators of impairment exist, by comparing the carrying value of each reportable segment to its estimated fair value. The annual evaluation is performed in the fourth quarter of each calendar year. The impairment test requires the Company to compare the fair value of each reporting unit to its carrying value, including assigned goodwill. As of September 30, 2014, the Company does not believe any indicators of impairment exist for goodwill that would require additional analysis before the 2014 annual evaluation. | |
Other Intangible Assets | |
The Company had other intangible assets consisting primarily of customer lists, product formulations, trade names, and non-competes that were acquired as part of business combinations. Other intangible assets are tested for impairment as part of the long-lived asset grouping impairment tests. Impairment testing of the asset group occurs whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. See impairment discussion above under Property, Plant and Equipment for a description of how impairment losses are determined. Disclosures related to other intangible assets are included in Note 9 to the financial statements. Significant management judgment is required in the forecasts of future operating results that are used in the Company’s impairment evaluations. The estimates used are consistent with the plans and estimates that management uses to manage its business. It is possible, however, that the plans may change and estimates used may prove to be inaccurate. If the Company’s actual results, or the plans and estimates used in future impairment analyses, are lower than the original estimates used to assess the recoverability of these assets, then the Company could incur future impairment charges, which would adversely affect financial performance. The Company does not believe any indicators of impairment exist for other intangible assets at September 30, 2014. Net other intangible assets totaled $1,177,837 and $1,165,157 as of September 30, 2014 and December 31, 2013, respectively. Amortization expense totaled $78,653 and $80,325, and $212,428 and $338,776, for the three and nine months ended September 30, 2014 and 2013, respectively. | |
Revenue Recognition | |
Sales are recognized as risk and title to products transfers to the customer (which generally occurs at the time shipment is made), the sales price is fixed or determinable, and collectability is reasonably assured. Sales channels include direct sales, distributors, and independent representatives. Amounts billed for shipping and handling are included in sales (freight). Freight included in sales totaled $245,379 and $291,466, and $720,394 and $851,699, for the three and nine months ended September 30, 2014 and 2013, respectively. Costs incurred for shipping and handling are included in cost of sales. Sales are recorded net of sales tax. Freight included in cost of sales totaled $1,102,799 and $882,121, and $3,136,657 and $2,549,389, for the three and nine months ended September 30, 2014 and 2013, respectively. | |
Share-Based Compensation | |
The Company accounts for stock-based compensation by measuring and recognizing the cost of employee or director services received in exchange for an award of equity instruments based on the grant-date fair value of the award. The fair value of share based awards is estimated at the grant date using a straight line closing trading stock price based valuation model and the portion that is ultimately expected to vest is recognized as compensation cost over the requisite service period. Share based compensation expense was $189,670 and $309,762, and $563,369 and $969,676, for the three and nine months ended September 30, 2014 and 2013, respectively. If additional stock options or stock awards are granted, financial performance will be negatively affected, and if outstanding stock options or stock awards are forfeited or canceled, resulting in non-vesting of such stock options or stock awards, financial performance will be positively affected. In either instance, the Company’s financial performance may change depending on stock option or stock award activities in future periods. | |
Allowance for Doubtful Accounts | |
The Company presents trade receivables, net of allowances for doubtful accounts, to ensure trade receivables are not overstated due to uncollectible accounts. Allowances, when required, are calculated based on a detailed review of certain individual customer accounts and an estimation of the overall economic conditions affecting our customer base. The Company reviews a customer’s credit history before extending credit. The allowance for doubtful accounts was approximately $698,000 and $317,000 at September 30, 2014 and December 31, 2013, respectively. If the financial condition of customers were to deteriorate based on worsening overall economic conditions, resulting in an impairment of their ability to make payments to the Company, then additional allowances may be required in future periods, which would adversely affect the Company’s financial performance. | |
Advertising and Marketing | |
Advertising and marketing costs are generally expensed as incurred. Expenditures for trade magazines and television commercials are expensed at the time the first advertisement is printed or shown on television. Expenditures for certain advertising and marketing activities related to trade shows are deferred within the Company’s fiscal year when the benefits clearly extend beyond the interim period in which the expenditure is made, generally not to exceed 90 days. Other advertising and marketing expenditures that do not meet the deferred criteria are expensed when the advertising occurs. Deferred advertising capitalized was $167,836 and $66,719 for the nine months ended September 30, 2014 and 2013, respectively. Total advertising and marketing costs expensed were $218,930 and $129,176, and $806,578 and $732,493, for the three and nine months ended September 30, 2014 and 2013, respectively. | |
Net Income (Loss) Per Common Share | |
Basic income (loss) per share is based upon the net income (loss) applicable to common shares after preferred dividend requirements and upon the weighted average number of common shares outstanding during the period. Diluted income (loss) per share reflects the effect of the assumed conversions of convertible securities and exercise of stock options only in periods in which such effect would have been dilutive. For the three and nine months ended September 30, 2014 and 2013, basic and diluted net (loss) per share are the same since (a) the Company has reflected a net loss for the period presented and (b) the potential issuance of shares of common stock of the Company would be anti-dilutive. | |
New Accounting Standards Not Yet Adopted | |
In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers." The ASU will supersede most of the existing revenue recognition requirements in U.S. GAAP and will require entities to recognize revenue at an amount that reflects the consideration to which the Company expects to be entitled in exchange for transferring goods or services to a customer. The new standard also requires significantly expanded disclosures regarding the qualitative and quantitative information of an entity's nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The pronouncement is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period and is to be applied retrospectively, with early application not permitted. The Company is currently evaluating the impact the pronouncement will have on the consolidated financial statements and related disclosures. | |
In April 2014, the FASB issued an accounting standards update that raises the threshold for disposals to qualify as discontinued operations and allows companies to have significant continuing involvement with and continuing cash flows from or to the discontinued operation. It also requires additional disclosures for discontinued operations and new disclosures for individually material disposal transactions that do not meet the definition of a discontinued operation. This guidance will be effective for fiscal years beginning after December 15, 2014, which will be the Company's fiscal year 2015, with early adoption permitted. The Company does not expect the adoption of the guidance will have a material impact on the Company's condensed financial statements. | |
In August 2014, the FASB issued ASU No. 2014-15, “Presentation of Financial Statements—Going Concern: Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern.” The amendments in this ASU are intended to define management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosures. This ASU provides guidance to an organization’s management, with principles and definitions that are intended to reduce diversity in the timing and content of disclosures that are commonly provided by organizations in the financial statement footnotes. The pronouncement is effective for annual reporting periods ending after December 15, 2016 and interim periods within annual periods beginning after December 15, 2016. Early adoption is permitted for annual or interim reporting periods for which the financial statements have not previously been issued. The Company is currently evaluating the impact the pronouncement will have on the condensed financial statements and related disclosures. |
Liquidity
Liquidity | 9 Months Ended |
Sep. 30, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
Liquidity | ' |
Note 2. Liquidity. | |
The Company had an accumulated deficit of $88,823,919 on September 30, 2014, had a net loss of $2,328,265 during the nine months ended September 30, 2014, and used $744,840 of cash in operating activities during the nine months ended September 30, 2014. As a result, there are concerns about the liquidity of the Company at September 30, 2014. The Company has a working capital surplus of $6,685,065. Management believes that the cash generated from operations the cash available under the Revolver Loan, subject to borrowing base limitations, and the Chairman’s Financial Substitution Commitment, based on budgeted sales and expenses as supported by credit, margin and expense controls, are sufficient to fund the Company’s operations, including capital expenditures, for the next 12 months. | |
Dependence_on_a_few_suppliers
Dependence on a few suppliers | 9 Months Ended |
Sep. 30, 2014 | |
Risks and Uncertainties [Abstract] | ' |
Dependence on a few suppliers | ' |
Note 3. Dependence on Few Suppliers. | |
The Company is dependent on a few suppliers for certain raw materials and finished goods. For the three and nine month periods ended September 30, 2014 and 2013, raw materials and finished goods purchased from the three largest suppliers accounted for approximately 44% and 44%, and 43% and 53%, of purchases, respectively. |
Trade_Receivables
Trade Receivables | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Receivables [Abstract] | ' | ||||||||
Trade Receivables | ' | ||||||||
Note 4. Trade Receivables. | |||||||||
Trade receivables are comprised of the following at: | |||||||||
30-Sep-14 | 31-Dec-13 | ||||||||
Trade Receivables | $ | 9,562,804 | $ | 8,011,176 | |||||
Less: Allowance for Doubtful Accounts | (697,785 | ) | (316,587 | ) | |||||
Trade Receivables, Net | $ | 9,144,940 | $ | 7,694,589 |
Costs_and_Estimated_Earnings_o
Costs and Estimated Earnings on Uncompleted Contract. | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
Notes to Financial Statements | ' | ||||
Costs and Estimated Earnings on Uncompleted Contract. | ' | ||||
Note 5. Costs and Estimated Earnings on Uncompleted Contract. | |||||
The following is a summary of contracts in progress at: | |||||
30-Sep-14 | |||||
Costs Incurred on Uncompleted Contracts | $ | 961,644 | |||
Estimated Net Income on Uncompleted Contracts | 228,059 | ||||
1,189,703 | |||||
Billings to Date | (963,670 | ) | |||
$ | 226,033 | ||||
This amount is included in the accompanying condensed balance sheet under the following captions at: | |||||
30-Sep-14 | |||||
Costs and Estimated Earnings in Excess of Billings on Uncompleted Contracts | $ | 226,033 | |||
Billing in Excess of Costs and Estimated Earnings on Uncompleted Contracts | — | ||||
$ | 226,033 | ||||
Inventories
Inventories | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Inventory Disclosure [Abstract] | ' | ||||||||
Inventories | ' | ||||||||
Note 6. Inventories. | |||||||||
The following is a summary of inventories at: | |||||||||
30-Sep-14 | 31-Dec-13 | ||||||||
Raw Materials | $ | 1,139,123 | $ | 1,804,959 | |||||
Finished Goods | 2,977,889 | 3,616,976 | |||||||
Total Inventories | $ | 4,117,012 | $ | 5,421,935 | |||||
Prepaid_Expenses_and_Other_Cur
Prepaid Expenses and Other Current Assets | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ' | ||||||||
Prepaid Expenses and Other Current Assets | ' | ||||||||
Note 7. Prepaid Expenses and Other Current Assets. | |||||||||
The following is a summary of prepaid expenses and other current assets at: | |||||||||
30-Sep-14 | 31-Dec-13 | ||||||||
Prepaid Insurances | $ | 150,647 | $ | 582,654 | |||||
Prepaid Marketing | 166,770 | 152,667 | |||||||
Prepaid Consulting | 44,048 | 66,208 | |||||||
Prepaid Other | 267,237 | 357,839 | |||||||
Note Receivable, Net | — | 90,946 | |||||||
Total Prepaid Expenses and Other Current Assets | $ | 628,702 | $ | 1,250,314 | |||||
Property_Plant_and_Equipment
Property, Plant and Equipment | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Property, Plant and Equipment [Abstract] | ' | ||||||||
Property, Plant and Equipment | ' | ||||||||
Note 8. Property, Plant and Equipment. | |||||||||
The following is a summary of property, plant and equipment at: | |||||||||
30-Sep-14 | 31-Dec-13 | ||||||||
Vehicles | $ | 573,717 | $ | 649,487 | |||||
Leasehold Improvements | 288,777 | 288,777 | |||||||
Office Furniture and Equipment | 297,737 | 327,329 | |||||||
Computers and Software | 896,339 | 1,185,333 | |||||||
Machinery and Equipment | 2,503,062 | 2,466,007 | |||||||
Total Property, Plant and Equipment | $ | 4,559,632 | $ | 4,916,933 | |||||
Less: Accumulated Depreciation | (3,102,093 | ) | (3,316,254 | ) | |||||
Total Property, Plant and Equipment, Net | $ | 1,457,539 | $ | 1,600,679 | |||||
Goodwill_and_Other_Intangible_
Goodwill and Other Intangible Assets | 9 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | ||||||||||||||||||||||||
Goodwill and Other Intangible Assets | ' | ||||||||||||||||||||||||
Note 9. Goodwill and Other Intangible Assets. | |||||||||||||||||||||||||
Goodwill | |||||||||||||||||||||||||
The following is a summary of Goodwill at: | |||||||||||||||||||||||||
30-Sep-14 | 31-Dec-13 | ||||||||||||||||||||||||
Foam | $ | 2,932,208 | $ | 2,932,208 | |||||||||||||||||||||
Coatings | 1,302,620 | 1,302,620 | |||||||||||||||||||||||
Total Goodwill | $ | 4,234,828 | $ | 4,234,828 | |||||||||||||||||||||
Other Intangible Assets | |||||||||||||||||||||||||
30-Sep-14 | 31-Dec-13 | ||||||||||||||||||||||||
Gross | Accumulated | Net | Gross | Accumulated | Net | ||||||||||||||||||||
Amount | Amortization | Amount | Amount | Amortization | Amount | ||||||||||||||||||||
Product Formulation | $ | 138,471 | $ | (88,467 | ) | $ | 50,004 | $ | 138,471 | $ | (81,544 | ) | $ | 56,927 | |||||||||||
Trade Names | 750,186 | (306,722 | ) | 443,464 | 740,325 | (269,212 | ) | 471,113 | |||||||||||||||||
Approvals and Certifications | 1,763,002 | (1,078,633 | ) | 684,369 | 1,547,754 | (910,637 | ) | 637,117 | |||||||||||||||||
$ | 2,651,659 | $ | (1,473,822 | ) | $ | 1,177,837 | $ | 2,426,550 | $ | (1,261,393 | ) | $ | 1,165,157 | ||||||||||||
Deposits_and_Other_NonCurrent_
Deposits and Other Non-Current Assets, Net. | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ' | ||||||||
Deposits and Other Non-Current Assets, Net. | ' | ||||||||
Note 10. Deposits and Other Non-Current Assets, Net. | |||||||||
The following is a summary of deposits and other non-current assets at: | |||||||||
30-Sep-14 | 31-Dec-13 | ||||||||
Deferred Financing Fees | $ | 211,519 | $ | 285,246 | |||||
Prepaid Expenses | 19,523 | 46,744 | |||||||
Other Receivables | 65,205 | 55,293 | |||||||
Deposits | 153,585 | 153,584 | |||||||
Note Receivable, Net | — | 145,791 | |||||||
Total Deposits and Other-Non-Current Assets | $ | 449,832 | $ | 686,658 | |||||
Accrued_Expenses_and_Other_Cur
Accrued Expenses and Other Current Liabilities | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Payables and Accruals [Abstract] | ' | ||||||||
Accrued Expenses and Other Current Liabilities | ' | ||||||||
Note 11. Accrued Expenses and Other Current Liabilities. | |||||||||
The following is a summary of accrued expenses and other current liabilities at: | |||||||||
30-Sep-14 | 31-Dec-13 | ||||||||
Accrued Payroll | $ | 67,877 | $ | 169,785 | |||||
Accrued Commissions | 101,534 | 61,000 | |||||||
Accrued Inventory Purchases | 116,974 | 178,616 | |||||||
Accrued Taxes and Other | 806,690 | 606,275 | |||||||
Accrued Insurance | 34,022 | 427,395 | |||||||
Deferred Finance Charge Income | 29,882 | 13,824 | |||||||
Total Accrued Expenses and Other Current Liabilities | $ | 1,156,979 | $ | 1,456,895 |
Financing_Instruments
Financing Instruments | 9 Months Ended |
Sep. 30, 2014 | |
Transfers and Servicing [Abstract] | ' |
Financing Instruments | ' |
Note 12. Financing Instruments. | |
(a) Loan and Security Agreement. The Company maintains a $13,000,000 revolver loan (“Revolver Loan”) pursuant to a Loan and Security Agreement with Bank of America, N.A. (“Bank”), under which the Company granted the Bank a continuing security interest in and lien upon all Company assets ("Loan Agreement”). The Base Rate is equal to the greater of (a) the Prime Rate; (b) the Federal Funds Rate, plus 0.50%; or (c) LIBOR for a 30 day interest period, plus 1.50%. The Company is required to submit its Borrowing Base calculation to the Bank daily. If, at any time, the Company’s Borrowing Base calculation is less than the amount outstanding under the Revolver Loan, and that amount remains unpaid or is not increased from future Borrowing Base calculations to an amount equal to the balance outstanding under the Revolver Loan at any given time, the Bank, in its discretion, may accelerate any and all amounts outstanding under the Revolver Loan. At September 30, 2014 and December 31, 2013, the balance outstanding on the Revolver Loan was $5,442,030 and $4,539,163, and the weighted-average interest rate was 4.4% and 4.5%, respectively. At September 30, 2014, interest expense – amortization of discount was $136,512. Under the New Enhanced Note, the Company was required to have a certain EBITDA for the three months ended as of the last day of each month and FCCR as of the last day of each month. As of September 30, 2014, the Company was not in compliance with these covenants primarily because of a non-recurring note receivable write-off. Accordingly, Enhanced Jobs and Enhanced Credit agreed to amend the definition of FCCR to 1.0 to 1.0 and the EBITDA requirements. In addition, the PIK interest rate was changed from 3.75% to 4.25%. As a result, the Company was in compliance with all of the New Enhanced Note debt covenants at September 30, 2014. See also Note 17 – Subsequent Events, Item (c), for more information. | |
(b) Note Purchase Agreements. | |
(i) New Enhanced Note. The Company issued an aggregate of $7.2 million in Subordinated Secured Promissory Notes to Enhanced Jobs for Texas Fund, LLC (“Enhanced Jobs”) and Enhanced Credit Supported Loan Fund, LP (“Enhanced Credit”), pursuant to a Note Purchase Agreement, of which $5.7 million was to Enhanced Credit and $1.5 million was to Enhanced Jobs, both of which mature on December 10, 2016, under which the Company granted a second lien on all its assets after the Bank (“New Enhanced Note”). Interest is payable monthly and broken down into current pay interest at the rate of 7.25% per annum, and PIK interest at the rate of 3.75% (which is added to the principal balance of the outstanding notes) to create the aggregate interest rate of 11%. In connection with the Prior Enhanced Note (defined below) being refinanced in connection with the New Enhanced Note (Refer to (iii) below), a purchase discount of $542,886 was recognized and is being amortized to interest expense using the effective interest method over the three year term of the New Enhanced Note (See also (ii) below). At September 30, 2014 and December 31, 2013, the balance outstanding on the New Enhanced Note was $7,027,882 and $6,683,561 and the effective interest rate was 23.6% and 29.0%, respectively. At September 30, 2014, interest expense – amortization of discount was $136,512. Under the New Enhanced Note, the Company was required to have a certain EBITDA for the three months ended as of the last day of each month and FCCR as of the last day of each month. As of September 30, 2014, the Company was not in compliance with this covenant primarily because of a non-recurring note receivable write-off. Accordingly, Enhanced agreed to amend the definition of FCCR to 1.0 to 1.0 and the EBITDA requirements. In addition, the PIK interest rate was changed from 3.75% to 4.25%. As a result, the Company was in compliance with all of the New Enhanced Note debt covenants at September 30, 2014. See also Note 17 – Subsequent Events, Item (c), for more information. | |
(ii) New Guaranty Agreement. In connection with the New Enhanced Note described in (i) above, Richard J. Kurtz, Chairman of the Board and principal stockholder (the “Chairman”), as guarantor, entered into a Guaranty Agreement with Enhanced Credit, as agent under the New Enhanced Note, to secure the Company’s performance under the New Enhanced Note. The Company, in exchange for the Chairman’s personal guaranty of the obligations under the New Enhanced Note, granted the Chairman 3,681,000 shares of restricted common stock, which shares vest monthly on a pro rata basis over the three year term of the New Enhanced Note (“New Guaranty Shares”). The New Guaranty Shares were valued at $.60 per share for an aggregate of $2,208,600. The New Guaranty Shares are being recorded as interest expense – related party, thereby increasing the effective interest rate on the New Enhanced Note. At September 30, 2014 and December 31, 2013, there were 916,054 and 73,821 New Guaranty Shares vested, valued and recorded in the aggregate at $549,633 and $44,293, respectively. | |
(iii) Prior Enhanced Note. Upon receipt of the $7.2 million under the New Enhanced Note described in (i) above on December 10, 2013, the Company paid off the outstanding balances due under the prior Note Purchase Agreement, dated as of June 29, 2012, entered into with Enhanced Jobs and Enhanced Capital Texas Fund LP (“Enhanced Capital”), in the amount of $1,673,381 for Enhanced Jobs and $1,673,381 for Enhanced Capital (“Prior Enhanced Note”), and all related agreements were terminated. At December 9, 2013 and prior to the payoff of the balance outstanding on the Prior Enhanced Note of $3,346,762 (as described above), the effective interest rate was 29.2%. | |
(iv) Prior Guaranty Agreement. As a result of the payoff of the Prior Enhanced Notes as described in (iii) above, the Company canceled an aggregate of 1,376,712 unvested shares (with an unrecorded valued of $371,801) which shares were previously issued in connection with the personal guaranty required for the Prior Enhanced Note from the Chairman to secure the Company’s performance under the Prior Enhanced Note (“Prior Guaranty Shares”). The Prior Guaranty Shares were valued at $.27 per share for an aggregate of $1,350,000. The Prior Guaranty Shares were recorded as interest expense – related party, thereby increasing the effective interest rate on the Prior Enhanced Note. | |
(c) Note Payable – Related Party. On April 16, 2012, the Company issued a $1,300,000 promissory note, bearing interest at 5% per annum, to the Chairman in exchange for an equal amount of proceeds, which is subordinate to the Loan Agreement and the New Enhanced Note described in (a) and (b)(i) above and matures on June 10, 2017. At September 30, 2014 and 2013, interest expense – related party was $54,667 and $52,634, respectively. | |
Related_Party_Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2014 | |
Related Party Transactions [Abstract] | ' |
Related Party Transactions | ' |
Note 13. Related Party Transactions. | |
(a) On April 28, 2014, the Company granted an aggregate of 400,000 five-year stock options to four non-employee directors, consisting of Jay C. Nadel, Arthur J. Gregg, Augustus J. Larson, and Howard L. Brown, each for 100,000 shares of common stock, at an exercise price equal to $0.42 per share. Each of the foregoing stock options vest over a period of two (2) years at the rate of 50,000 options on April 30, 2015 and 50,000 options on April 30, 2016, and are exercisable after one (1) year from each respective vesting date. All stock options automatically vest and are exercisable upon a change in control. For the three and nine months ended September 30, 2014, the company recognized approximately $14,000 and $33,000 in expense related to these options, respectively. The options are valued using the Black-Scholes model. The total fair value of the grant to be recognized is $155,027. In addition, the cash compensation to the foregoing non-employee directors was increased from $10,000 per year, payable quarterly, to $12,500 per year, effective January 1, 2014. | |
(b) On April 28, 2014, the Company granted an aggregate of 1,025,000 five-year stock options to eight key employees, including the named executive officers, consisting of Douglas J. Kramer, Michael T. Adams, Harvey L. Schnitzer, and Charles A. Zajaczkowski, of which 350,000 options were for Mr. Kramer, 150,000 options each were for Mr. Adams and Mr. Schnitzer, and 100,000 options were for Mr. Zajaczkowski, and 275,000 options were for other key employees, each for shares of the Company’s common stock, at an exercise price equal to $0.42 per share. Each of the foregoing stock options vest over a period of three (3) years at the rate of 33 and 1/3 percent at December 31, 2014, December 31, 2015, and December 31, 2016, and are exercisable upon vesting. All stock options automatically vest upon a change in control. For the three and nine months ended September 30, 2014, the company recognized approximately $34,000 and $83,000 in expense related to these options, respectively. The options are valued using the Black-Scholes model. The total fair value of the grant to be recognized is $368,189. | |
(c) On May 14, 2014, the Company granted five-year stock options to the Chairman for an aggregate of 400,000 shares of the Company’s common stock, at an exercise price equal to $0.54 per share. The foregoing stock options vest over a period of two (2) years at the rate of 200,000 options on May 14, 2015 and May 14, 2016, respectfully, and once vested, are immediately exercisable. Upon commencement of a change in control, all unvested stock options automatically vest. For the three and nine months ended September 30, 2014, the company recognized approximately $13,000 and $38,000 in expense related to these options, respectively. The options are valued using the Black-Scholes model. The total fair value of the grant to be recognized is $199,305. | |
(d) For the three and nine months ended September 30, 2014, 20,367 and 334,471 shares of common stock, including anti-dilution shares, were issued to a non-employee director for advisory and consulting services, which transactions were valued and recorded in the aggregate at $13,563 and $193,777, respectively. | |
(e) For the three and nine months ended September 30, 2014, 308,707 and 916,054 shares of common stock previously issued to the Chairman in connection with his personal guaranty of the New Enhanced Note vested, which transactions were valued and recorded in the aggregate at $185,224 and $549,633, and classified as interest expense – related party. See also Note 12 – Financing Instruments Item (b)(ii) – New Guaranty Agreement, for more information. | |
(f) For the three and nine months ended September 30, 2014, the Company accrued an aggregate of $18,654 and $54,667 in interest relating to the promissory note to the Chairman. See also Note 12 – Financing Instruments, Item (c) – Note Payable – Related Party, for more information. |
Net_Income_Loss_per_Common_Sha
Net Income (Loss) per Common Share - Basic and Diluted | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Earnings Per Share [Abstract] | ' | ||||||||||||||||
Net Income (Loss) per Common Share - Basic and Diluted | ' | ||||||||||||||||
Note 14. Net Income (Loss) Per Common Share – Basic and Diluted. | |||||||||||||||||
Basic income (loss) per share is based upon the net income (loss) applicable to common shares after preferred dividend requirements and upon the weighted average number of common shares outstanding during the period. Diluted income (loss) per share reflects the effect of the assumed exercise of stock options and warrants only in periods in which such effect would have been dilutive. | |||||||||||||||||
The computation of the Company’s basic and diluted earnings per share at: | |||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Net loss available to common shareholders | $ | (1,014,359 | ) | $ | (297,178 | ) | $ | (2,328,265 | ) | $ | (1,325,088 | ) | |||||
Weighted average common shares outstanding | 115,204,510 | 112,155,974 | 114,821,758 | 110,945,316 | |||||||||||||
Dilutive effect of equity incentive plans | 350,000 | 350,000 | 350,000 | 350,000 | |||||||||||||
Weighted average common shares outstanding, assuming dilution | 115,487,651 | 112,274,357 | 114,143,420 | 111,035,142 | |||||||||||||
Basic earnings per common share | $ | (0.01 | ) | $ | (0.00 | ) | $ | (0.02 | ) | $ | (0.01 | ) | |||||
Diluted earnings per common share | $ | (0.01 | ) | $ | (0.00 | ) | $ | (0.02 | ) | $ | (0.01 | ) | |||||
At September 30, 2014, a total of 2,460,000 shares of common stock underlying vested and exercisable stock options were excluded from the calculation of diluted earnings per common share, of which 350,000 stock options had exercise prices less than the market value of the common shares (in-the-money) and 2,110,000 stock options had exercise prices greater than or equal to the market value of the common shares (out-of-the-money). At September 30, 2013, a total of 3,055,833 shares of common stock underlying vested and exercisable stock options were excluded from the calculation of diluted earnings per common share, of which 350,000 stock options were in-the-money and 2,705,833 stock options were out-of-the-money. Such out-of-the-money securities could be included in the calculation in the future if the market value of the Company’s common shares increases and is greater than the exercise price of these securities and they have not expired. | |||||||||||||||||
Securities_Transactions
Securities Transactions | 9 Months Ended |
Sep. 30, 2014 | |
Notes to Financial Statements | ' |
Securities Transactions | ' |
Note 15. Securities Transactions. | |
(a) During the third quarter of 2014, the Company vested an aggregate of 308,707 shares of restricted common stock previously issued to the Chairman in connection with his personal guaranty of the New Enhanced Note, which transactions were valued and recorded in the aggregate at $185,224, and classified as interest expense – related party. | |
(b) During the third quarter of 2014, the Company issued an aggregate of 20,367 anti-dilution shares of restricted common stock in connection with an agreement for advisory and consulting services, which transactions were valued and recorded in the aggregate at $13,563. | |
Business_Segment_Information
Business Segment Information | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | ' | ||||||||||||||||||||||||||||||||||||||||
Business Segment Information | ' | ||||||||||||||||||||||||||||||||||||||||
Note 16. Business Segment Information. | |||||||||||||||||||||||||||||||||||||||||
Business Segments | |||||||||||||||||||||||||||||||||||||||||
The Company is a leading national manufacturer and supplier operating two segments, Foam and Coatings, based on manufacturing competencies. The accounting policies of the segments are the same as those described in the summary of significant accounting policies. The Company allocates resources to segments and evaluates the performance of segments based upon reported segment sales. Administrative expenses are allocated to both segments. Unallocated costs reflect certain corporate expenses, insurance, investor relations, and gains and losses related to the disposal of corporate assets and derivative liabilities and are included in Unallocated Amounts. There are no intersegment sales or transfers. | |||||||||||||||||||||||||||||||||||||||||
Three Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||||||||||||||||||
Foam | Coatings | Totals | Foam | Coatings | Totals | ||||||||||||||||||||||||||||||||||||
Sales | $ | 15,381,003 | $ | 2,493,305 | $ | 17,874,308 | $ | 15,299,778 | $ | 2,774,323 | $ | 18,074,101 | |||||||||||||||||||||||||||||
Depreciation | 32,695 | 5,300 | 37,995 | 31,835 | 5,773 | 37,608 | |||||||||||||||||||||||||||||||||||
Amortization of Other Intangible Assets | 60,913 | 9,874 | 70,787 | 61,196 | 11,097 | 72,293 | |||||||||||||||||||||||||||||||||||
Interest Expense | 239,389 | 38,806 | 278,195 | 175,513 | 31,826 | 207,339 | |||||||||||||||||||||||||||||||||||
Segment Profit | $ | 90,515 | $ | 204,844 | $ | 295,359 | $ | 695,746 | $ | 412,992 | $ | 1,108,738 | |||||||||||||||||||||||||||||
Segment Assets (1) | 17,350,894 | 3,575,856 | 20,926,750 | 17,791,684 | 3,942,638 | 21,734,322 | |||||||||||||||||||||||||||||||||||
Expenditures for Segment Assets | $ | — | $ | — | $ | — | $ | 15,707 | $ | 2,848 | $ | 18,555 | |||||||||||||||||||||||||||||
Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||||||||||||||||||
Foam | Coatings | Totals | Foam | Coatings | Totals | ||||||||||||||||||||||||||||||||||||
Sales | $ | 45,554,927 | $ | 7,106,449 | $ | 52,661,376 | $ | 45,103,935 | $ | 7,733,452 | $ | 52,837,387 | |||||||||||||||||||||||||||||
Depreciation | 98,872 | 15,424 | 114,296 | 100,579 | 17,262 | 117,841 | |||||||||||||||||||||||||||||||||||
Amortization of Other Intangible Assets | 165,385 | 25,800 | 191,185 | 260,272 | 44,626 | 304,898 | |||||||||||||||||||||||||||||||||||
Interest Expense | 700,634 | 109,297 | 809,931 | 572,439 | 98,149 | 670,588 | |||||||||||||||||||||||||||||||||||
Segment Profit | $ | 911,939 | $ | 728,586 | $ | 1,640,525 | $ | 1,909,559 | $ | 1,136,106 | $ | 3,045,665 | |||||||||||||||||||||||||||||
Segment Assets (1) | 17,420,376 | 3,506,374 | 20,926,750 | 17,907,817 | 3,826,505 | 21,734,322 | |||||||||||||||||||||||||||||||||||
Expenditures for Segment Assets | $ | 178,570 | $ | 27,857 | $ | 206,427 | $ | 34,488 | $ | 5,913 | $ | 40,401 | |||||||||||||||||||||||||||||
The following are reconciliations of reportable segment profit or loss, and assets, to the Company’s consolidated totals: | |||||||||||||||||||||||||||||||||||||||||
Assets | At September 30, 2014 | At December 31, 2013 | |||||||||||||||||||||||||||||||||||||||
Total Assets for Reportable Segments (1) | $ | 20,926,750 | $ | 21,661,548 | |||||||||||||||||||||||||||||||||||||
Other Unallocated Amounts (2) | 230,052 | 392,612 | |||||||||||||||||||||||||||||||||||||||
Consolidated Total | $ | 21,156,802 | $ | 22,054,160 | |||||||||||||||||||||||||||||||||||||
For The Nine Months Ended September 30, | For The Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||
Profit or Loss | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||||||||||||||||||||
Total Profit or Loss for Reportable Segments | $ | 295,359 | $ | 1,108,738 | $1,640,525 | $3,045,665 | |||||||||||||||||||||||||||||||||||
Unallocated Amounts: | |||||||||||||||||||||||||||||||||||||||||
Corporate Expenses | (1,309,718 | ) | (1,405,916 | ) | -3,968,790 | -4,370,753 | |||||||||||||||||||||||||||||||||||
Income (Loss) Before Income Taxes | $ | (1,014,359 | ) | $ | (297,178 | ) | ($2,328,265) | ($1,325,088) | |||||||||||||||||||||||||||||||||
Assets | At September 30, 2014 | At December 31, 2013 | |||||||||||||||||||||||||||||||||||||||
Total Assets for Reportable Segments (1) | $ | 20,926,750 | $ | 21,661,548 | |||||||||||||||||||||||||||||||||||||
Other Unallocated Amounts (2) | 230,052 | 392,612 | |||||||||||||||||||||||||||||||||||||||
Consolidated Total | $ | 21,156,802 | $ | 22,054,160 | |||||||||||||||||||||||||||||||||||||
(1) Segment assets are the total assets used in the operation of each segment. | |||||||||||||||||||||||||||||||||||||||||
(2) Includes corporate assets which are principally cash and cash equivalents and deposits. | |||||||||||||||||||||||||||||||||||||||||
Geographic Area Information | |||||||||||||||||||||||||||||||||||||||||
The Company does not operate any manufacturing sites nor maintain a permanent establishment in any particular country outside of the United States at this time. The Company’s products are sold to independent distributors globally for select target markets. Sales are attributed to geographic areas based on customer location. Long-lived assets are attributable to geographic areas based on asset location. | |||||||||||||||||||||||||||||||||||||||||
Three Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||||||||||||||||||
United States | Europe | Middle East | Rest of World | Total | United States | Europe | Middle East | Rest of World | Total | ||||||||||||||||||||||||||||||||
Sales | $ | 16,587,621 | 705,906 | — | 580,781 | $ | 17,874,308 | $ | 15,157,883 | 458,781 | 1,568,589 | 888,848 | $ | 18,074,101 | |||||||||||||||||||||||||||
Long-Lived Assets | 20,926,750 | — | — | — | 20,926,750 | 21,734,322 | — | — | — | 21,734,322 | |||||||||||||||||||||||||||||||
Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||||||||||||||||||
United States | Europe | Middle East | Rest of World | Total | United States | Europe | Middle East | Rest of World | Total | ||||||||||||||||||||||||||||||||
Sales | $ | 48,843,085 | 1,701,042 | 660,000 | 1,457,249 | $ | 52,661,376 | 45,082,381 | 1,063,272 | 4,176,558 | 2,515,176 | $ | 52,837,387 | ||||||||||||||||||||||||||||
Long-Lived Assets | 20,926,750 | — | — | — | 20,926,750 | 21,734,322 | — | — | — | 21,734,322 | |||||||||||||||||||||||||||||||
Subsequent_Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2014 | |
Subsequent Events [Abstract] | ' |
Subsequent Events | ' |
Note 17. Subsequent Events. | |
(a) Loan and Security Agreement Amendment. On November 14, 2014, the Company and the Bank entered into an amendment, effective August 31, 2014, to the Loan Agreement. Under the Loan Agreement, the Company was required to have a certain FCCR as of the last day of each month. The Company was not in compliance with this covenant primarily because of a non-recurring note receivable write-off. Accordingly, the Bank agreed to amend the definition of FCCR to 1.0 to 1.0. The Bank also agreed to amend the Revolver Termination Date from March 31, 2016 to February 15, 2015, which will allow us to continue to draw under the Revolver Loan until February 15, 2015. As a result of the amendment, the Company regained compliance with all of its Loan Agreement debt covenants at September 30, 2014. | |
(b) Chairman’s Financial Substitution Commitment. On November 14, 2014, the Chairman of the Board and majority stockholder provided Management with a financial commitment to ensure payment of the amount outstanding under the Revolver Loan pursuant to the Loan Agreement, which matures on February 15, 2015, and make available working capital of up to $1.5 Million for the Company’s ongoing operations from the date hereof and on or after the maturity date of the Loan Agreement (“Financial Substitution Commitment”). This Financial Substitution Commitment will either be satisfied from his personal funds, or, from funds caused by him to be otherwise provided by an appropriate lending or other institution, and any funds provided thereunder will have a maturity date of June 10, 2017. The Financial Substitution Commitment will be superseded in the event and to the extent that the Company is independently funded by a third party source, either privately or institutionally, at or before the time the Financial Substitution Commitment is due and the Revolver Loan is repaid and Loan Agreement obligation is fully satisfied, and working capital of $1.5 Million for the Company’s ongoing operations is obtained from the date hereof and on or after the maturity date of the Loan Agreement. Management requested that the Chairman of the Board fund $250,000 under this Financial Substitution Commitment to meet a request from the Bank which payment was made on November 14, 2014. See (d) below. | |
(c) New Enhanced Note Amendment. On November 14, 2014, the Company and Enhanced Jobs and Enhanced Capital entered an amendment, effective August 31, 2014, to the Note Purchase Agreement. Under the New Enhanced Note, the Company was required to have a certain EBITDA for the three months ended as of the last day of each month and FCCR as of the last day of each month. As of September 30, 2014, the Company was not in compliance with these covenants primarily because of a non-recurring note receivable write-off. Accordingly, Enhanced Jobs and Enhanced Credit agreed to amend the definition of FCCR to 1.0 to 1.0 and the EBITDA requirements. In addition, the PIK interest rate was changed from 3.75% to 4.25%. As a result of the amendment, the Company regained compliance with all of its New Enhanced Note debt covenants at September 30, 2014. | |
(d) On November 14, 2014, the Company issued a $250,000 promissory note, bearing interest at 8% per annum, to the Chairman in exchange for an equal amount of cash proceeds, which is subordinate to the Loan Agreement and the New Enhanced Note and matures June 10, 2017. | |
(e) On October 14, 2014, the Company granted Douglas J. Kramer, CEO and President, the right to acquire 1,150,000 shares of the Company’s common stock, $0.01 par value per share, at an exercise price per share equal to the fair market value of a share of the Company’s common stock on the date of grant, determined based on the per share closing price on such date, or $.425 per share, which options were immediately vested and exercisable at the time of grant (“Kramer Options”). The Kramer Options were granted as partial replacement for 2,000,000 stock options were granted on July 12, 2005 which expired July 12, 2013 (the “Prior Expired Options”). The Prior Expired Options were inadvertently extended to December 31, 2015, however, due to the 8 year life limitation, they were deemed canceled at the end of 8 years. The Company also undertook to grant the additional 850,000 stock options (to make up for the total 2,000,000 stock options) on January 2, 2015 since the equity Incentive Plan only permits the grant of a total of 2,000,000 stock options during any calendar year (and Mr. Kramer was previously granted 850,000 stock options during the 2014 year for other incentives). | |
(f) The Company has evaluated subsequent events through the date of filing this report. |
Summary_of_Organization_Basis_1
Summary of Organization, Basis of Presentation and Critical Accounting Policies, Estimates and Assumptions (Policies) | 9 Months Ended |
Sep. 30, 2014 | |
Accounting Policies [Abstract] | ' |
Summary of Organization, Basis of Presentation and Critical Accounting Policies, Estimates and Assumptions | ' |
The condensed financial statements included herein are unaudited. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted pursuant to the rules and regulations of the SEC. In the opinion of management, the accompanying statements reflect adjustments necessary to present fairly the financial position, results of operations and cash flows for those periods indicated, and contain adequate disclosure to make the information presented not misleading. Adjustments included herein are of a normal, recurring nature unless otherwise disclosed in the Notes to the condensed financial statements. The condensed financial statements included herein should be read in conjunction with the financial statements and Notes thereto included in Lapolla’s latest annual report on Form 10-K in order to fully understand the basis of presentation. Results of operations for interim periods are not necessarily indicative of the results of operations for a full year. Certain amounts in the prior years have been reclassified to conform to the 2014 unaudited condensed financial statement presentation. Reference is made to Management’s Discussion and Analysis of Financial Condition and Results of Operations on page 14. See Part I, Item 1A, in our Annual Report on Form 10-K for the year ended December 31, 2013 (“2013 Annual Report”) for risk factors that could impact results. Refer to the Company’s 2013 Annual Report for a description of major accounting policies. There have been no material changes to these accounting policies during the three and nine months ended September 30, 2014. | |
Fixed-Price Contracts | ' |
Fixed-Price Contracts | |
The Company’s AirTight Division performs work under fixed-price contracts. The lengths of the fixed-price contracts vary but are typically less than one year. In accordance with industry practice, the Company includes asset and liability accounts relating to fixed-price contracts, including related deferred income taxes, if applicable, in current assets and liabilities even when such amounts are realizable or payable over a period in excess of one year. Revenues from fixed-price contracts are recognized on the percentage-of-completion method, measured by the percentage of costs incurred to date to estimated total costs for each contract. Fixed-price contract costs include all direct material, labor costs, equipment and those indirect costs related to contract performance, such as indirect labor, supplies, tools, and repairs costs. General and administrative costs are charged to expense as incurred. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Changes in job performance, job conditions and estimated profitability, including those arising from contract penalty provisions and final contract settlements may result in revisions to costs and income and are recognized in the period in which the revisions are determined. The asset "costs and estimated earnings in excess of billings on uncompleted contracts" represents revenues recognized in excess of amounts billed. The liability "billings in excess of costs and estimated earnings on uncompleted contracts" represents billings in excess of revenues recognized. | |
Income Taxes | ' |
Income Taxes | |
The Company’s provision for income taxes is determined using the U.S. federal statutory rate. The Company recognizes deferred tax assets and liabilities for temporary differences between the financial reporting basis and the tax basis of our assets and liabilities along with net operating loss and tax credit carryovers. The Company’s deferred tax asset was approximately $23.1 million and $23.5 million at September 30, 2014 and December 31, 2013, respectively. The Company recorded a valuation allowance against the deferred tax asset of $23.1 million and $23.5 million at September 30, 2014 and December 31, 2013, respectively, reducing its net carrying value to zero. The Company had no increase or decrease in unrecognized income tax benefits or any accrued interest or penalties relating to tax uncertainties at September 30, 2014 and December 31, 2013. Unrecognized tax benefits are not expected to increase or decrease within the next twelve months. | |
Property, Plant and Equipment | ' |
Impairment of Long-Lived Assets | |
Property, Plant and Equipment | |
Property, plant and equipment is recorded at cost and depreciated using the straight-line method, which deducts equal amounts of the cost of each asset from earnings every year over its estimated economic useful life. The estimated economic useful life of an asset is monitored to determine its appropriateness, especially in light of changed business circumstances. Property, plant, and equipment held for use is grouped for impairment testing at the lowest level for which there is an identifiable cash flow. Impairment testing of the asset group occurs whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. Such circumstances would include a significant decrease in the market value of a long-lived asset grouping, a significant adverse change in the manner in which the asset grouping is being used or in its physical condition, a history of operating or cash flow losses associated with the use of the asset grouping, or changes in the expected useful life of the long-lived assets. If such circumstances are determined to exist, an estimate of undiscounted future cash flows produced by that asset group is compared to the carrying value to determine whether impairment exists. If an asset group is determined to be impaired, the loss is measured based on the difference between the asset group’s fair value and its carrying value. An estimate of the asset group’s fair value is based on the discounted value of its estimated cash flows. Assets to be disposed of by sale are reported at the lower of carrying amount or fair value less cost to sell. The assumptions underlying cash flow projections represent our best estimates at the time of the impairment review. Factors that we must estimate include industry and market conditions, sales volume and prices, costs to produce, etc. Changes in key assumptions or actual conditions that differ from estimates could result in an impairment charge. Management believes it uses reasonable and supportable assumptions when performing impairment reviews and cannot predict the occurrence of future events and circumstances that could result in impairment charges. The Company does not believe any indicators of impairment exist for property, plant and equipment at September 30, 2014. Net property, plant and equipment totaled $1,457,539 and $1,600,679 as of and for the quarter and year ended September 30, 2014 and December 31, 2013, respectively. Depreciation expense totaled $96,695 and $110,838, of which $54,479 and $69,052, and $300,619 and $343,538, of which $173,624 and $212,492, was included in cost of sales, for the three and nine months ended September 30, 2014 and 2013, respectively. | |
Goodwill | ' |
Goodwill | |
Goodwill represents the excess of the aggregate purchase price over the fair value of net tangible and identifiable intangible asset of an acquired business. Goodwill was $4,234,828 at September 30, 2014 and December 31, 2013. The Company operates two reporting units or segments, Foam and Coatings. Disclosures related to goodwill are included in Note 9 to the financial statements. The Company evaluates goodwill for impairment on an annual basis, or more frequently if management believes indicators of impairment exist, by comparing the carrying value of each reportable segment to its estimated fair value. The annual evaluation is performed in the fourth quarter of each calendar year. The impairment test requires the Company to compare the fair value of each reporting unit to its carrying value, including assigned goodwill. As of September 30, 2014, the Company does not believe any indicators of impairment exist for goodwill that would require additional analysis before the 2014 annual evaluation. | |
Other Intangible Assets | ' |
Other Intangible Assets | |
The Company had other intangible assets consisting primarily of customer lists, product formulations, trade names, and non-competes that were acquired as part of business combinations. Other intangible assets are tested for impairment as part of the long-lived asset grouping impairment tests. Impairment testing of the asset group occurs whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. See impairment discussion above under Property, Plant and Equipment for a description of how impairment losses are determined. Disclosures related to other intangible assets are included in Note 9 to the financial statements. Significant management judgment is required in the forecasts of future operating results that are used in the Company’s impairment evaluations. The estimates used are consistent with the plans and estimates that management uses to manage its business. It is possible, however, that the plans may change and estimates used may prove to be inaccurate. If the Company’s actual results, or the plans and estimates used in future impairment analyses, are lower than the original estimates used to assess the recoverability of these assets, then the Company could incur future impairment charges, which would adversely affect financial performance. The Company does not believe any indicators of impairment exist for other intangible assets at September 30, 2014. Net other intangible assets totaled $1,177,837 and $1,165,157 as of September 30, 2014 and December 31, 2013, respectively. Amortization expense totaled $78,653 and $80,325, and $212,428 and $338,776, for the three and nine months ended September 30, 2014 and 2013, respectively. | |
Revenue Recognition | ' |
Revenue Recognition | |
Sales are recognized as risk and title to products transfers to the customer (which generally occurs at the time shipment is made), the sales price is fixed or determinable, and collectability is reasonably assured. Sales channels include direct sales, distributors, and independent representatives. Amounts billed for shipping and handling are included in sales (freight). Freight included in sales totaled $245,379 and $291,466, and $720,394 and $851,699, for the three and nine months ended September 30, 2014 and 2013, respectively. Costs incurred for shipping and handling are included in cost of sales. Sales are recorded net of sales tax. Freight included in cost of sales totaled $1,102,799 and $882,121, and $3,136,657 and $2,549,389, for the three and nine months ended September 30, 2014 and 2013, respectively. | |
Share Based Compensation | ' |
Share-Based Compensation | |
The Company accounts for stock-based compensation by measuring and recognizing the cost of employee or director services received in exchange for an award of equity instruments based on the grant-date fair value of the award. The fair value of share based awards is estimated at the grant date using a straight line closing trading stock price based valuation model and the portion that is ultimately expected to vest is recognized as compensation cost over the requisite service period. Share based compensation expense was $189,670 and $309,762, and $563,369 and $969,676, for the three and nine months ended September 30, 2014 and 2013, respectively. If additional stock options or stock awards are granted, financial performance will be negatively affected, and if outstanding stock options or stock awards are forfeited or canceled, resulting in non-vesting of such stock options or stock awards, financial performance will be positively affected. In either instance, the Company’s financial performance may change depending on stock option or stock award activities in future periods. | |
Allowance for Doubtful Accounts | ' |
Allowance for Doubtful Accounts | |
The Company presents trade receivables, net of allowances for doubtful accounts, to ensure trade receivables are not overstated due to uncollectible accounts. Allowances, when required, are calculated based on a detailed review of certain individual customer accounts and an estimation of the overall economic conditions affecting our customer base. The Company reviews a customer’s credit history before extending credit. The allowance for doubtful accounts was approximately $698,000 and $317,000 at September 30, 2014 and December 31, 2013, respectively. If the financial condition of customers were to deteriorate based on worsening overall economic conditions, resulting in an impairment of their ability to make payments to the Company, then additional allowances may be required in future periods, which would adversely affect the Company’s financial performance. | |
Advertising and Marketing | ' |
Advertising and Marketing | |
Advertising and marketing costs are generally expensed as incurred. Expenditures for trade magazines and television commercials are expensed at the time the first advertisement is printed or shown on television. Expenditures for certain advertising and marketing activities related to trade shows are deferred within the Company’s fiscal year when the benefits clearly extend beyond the interim period in which the expenditure is made, generally not to exceed 90 days. Other advertising and marketing expenditures that do not meet the deferred criteria are expensed when the advertising occurs. Deferred advertising capitalized was $167,836 and $66,719 for the nine months ended September 30, 2014 and 2013, respectively. Total advertising and marketing costs expensed were $218,930 and $129,176, and $806,578 and $732,493, for the three and nine months ended September 30, 2014 and 2013, respectively. | |
Net Income (Loss) Per Common Share | ' |
Net Income (Loss) Per Common Share | |
Basic income (loss) per share is based upon the net income (loss) applicable to common shares after preferred dividend requirements and upon the weighted average number of common shares outstanding during the period. Diluted income (loss) per share reflects the effect of the assumed conversions of convertible securities and exercise of stock options only in periods in which such effect would have been dilutive. For the three and nine months ended September 30, 2014 and 2013, basic and diluted net (loss) per share are the same since (a) the Company has reflected a net loss for the period presented and (b) the potential issuance of shares of common stock of the Company would be anti-dilutive. | |
New Accounting Standards Not Yet Adopted | ' |
New Accounting Standards Not Yet Adopted | |
In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers." The ASU will supersede most of the existing revenue recognition requirements in U.S. GAAP and will require entities to recognize revenue at an amount that reflects the consideration to which the Company expects to be entitled in exchange for transferring goods or services to a customer. The new standard also requires significantly expanded disclosures regarding the qualitative and quantitative information of an entity's nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The pronouncement is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period and is to be applied retrospectively, with early application not permitted. The Company is currently evaluating the impact the pronouncement will have on the consolidated financial statements and related disclosures. | |
In April 2014, the FASB issued an accounting standards update that raises the threshold for disposals to qualify as discontinued operations and allows companies to have significant continuing involvement with and continuing cash flows from or to the discontinued operation. It also requires additional disclosures for discontinued operations and new disclosures for individually material disposal transactions that do not meet the definition of a discontinued operation. This guidance will be effective for fiscal years beginning after December 15, 2014, which will be the Company's fiscal year 2015, with early adoption permitted. The Company does not expect the adoption of the guidance will have a material impact on the Company's condensed financial statements. | |
In August 2014, the FASB issued ASU No. 2014-15, “Presentation of Financial Statements—Going Concern: Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern.” The amendments in this ASU are intended to define management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosures. This ASU provides guidance to an organization’s management, with principles and definitions that are intended to reduce diversity in the timing and content of disclosures that are commonly provided by organizations in the financial statement footnotes. The pronouncement is effective for annual reporting periods ending after December 15, 2016 and interim periods within annual periods beginning after December 15, 2016. Early adoption is permitted for annual or interim reporting periods for which the financial statements have not previously been issued. The Company is currently evaluating the impact the pronouncement will have on the condensed financial statements and related disclosures. |
Trade_Receivables_Tables
Trade Receivables (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Receivables [Abstract] | ' | ||||||||
Trade Receivables | ' | ||||||||
30-Sep-14 | 31-Dec-13 | ||||||||
Trade Receivables | $ | 9,562,804 | $ | 8,011,176 | |||||
Less: Allowance for Doubtful Accounts | (697,785 | ) | (316,587 | ) | |||||
Trade Receivables, Net | $ | 9,144,940 | $ | 7,694,589 |
Costs_and_Estimated_Earnings_o1
Costs and Estimated Earnings on Uncompleted Contract. (Tables) | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
Notes to Financial Statements | ' | ||||
Costs and Estimated Earnings on Uncompleted Contract. | ' | ||||
30-Sep-14 | |||||
Costs Incurred on Uncompleted Contracts | $ | 961,644 | |||
Estimated Net Income on Uncompleted Contracts | 228,059 | ||||
1,189,703 | |||||
Billings to Date | (963,670 | ) | |||
$ | 226,033 | ||||
This amount is included in the accompanying condensed balance sheet under the following captions at: | |||||
30-Sep-14 | |||||
Costs and Estimated Earnings in Excess of Billings on Uncompleted Contracts | $ | 226,033 | |||
Billing in Excess of Costs and Estimated Earnings on Uncompleted Contracts | — | ||||
$ | 226,033 | ||||
Inventories_Tables
Inventories (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Inventory Disclosure [Abstract] | ' | ||||||||
Inventories | ' | ||||||||
30-Sep-14 | 31-Dec-13 | ||||||||
Raw Materials | $ | 1,139,123 | $ | 1,804,959 | |||||
Finished Goods | 2,977,889 | 3,616,976 | |||||||
Total Inventories | $ | 4,117,012 | $ | 5,421,935 |
Prepaid_Expenses_and_Other_Cur1
Prepaid Expenses and Other Current Assets. (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ' | ||||||||
Prepaid Expenses and Other Current Assets | ' | ||||||||
30-Sep-14 | 31-Dec-13 | ||||||||
Prepaid Insurances | $ | 150,647 | $ | 582,654 | |||||
Prepaid Marketing | 166,770 | 152,667 | |||||||
Prepaid Consulting | 44,048 | 66,208 | |||||||
Prepaid Other | 267,237 | 357,839 | |||||||
Note Receivable, Net | — | 90,946 | |||||||
Total Prepaid Expenses and Other Current Assets | $ | 628,702 | $ | 1,250,314 |
Property_Plant_and_Equipment_T
Property, Plant and Equipment (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Property, Plant and Equipment [Abstract] | ' | ||||||||
Property, Plant and Equipment | ' | ||||||||
30-Sep-14 | 31-Dec-13 | ||||||||
Vehicles | $ | 573,717 | $ | 649,487 | |||||
Leasehold Improvements | 288,777 | 288,777 | |||||||
Office Furniture and Equipment | 297,737 | 327,329 | |||||||
Computers and Software | 896,339 | 1,185,333 | |||||||
Machinery and Equipment | 2,503,062 | 2,466,007 | |||||||
Total Property, Plant and Equipment | $ | 4,559,632 | $ | 4,916,933 | |||||
Less: Accumulated Depreciation | (3,102,093 | ) | (3,316,254 | ) | |||||
Total Property, Plant and Equipment, Net | $ | 1,457,539 | $ | 1,600,679 |
Goodwill_and_Other_Intangible_1
Goodwill and Other Intangible Assets (Tables) | 9 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | ||||||||||||||||||||||||
Goodwill | ' | ||||||||||||||||||||||||
30-Sep-14 | 31-Dec-13 | ||||||||||||||||||||||||
Foam | $ | 2,932,208 | $ | 2,932,208 | |||||||||||||||||||||
Coatings | 1,302,620 | 1,302,620 | |||||||||||||||||||||||
Total Goodwill | $ | 4,234,828 | $ | 4,234,828 | |||||||||||||||||||||
Other Intangible Assets | ' | ||||||||||||||||||||||||
30-Sep-14 | 31-Dec-13 | ||||||||||||||||||||||||
Gross | Accumulated | Net | Gross | Accumulated | Net | ||||||||||||||||||||
Amount | Amortization | Amount | Amount | Amortization | Amount | ||||||||||||||||||||
Product Formulation | $ | 138,471 | $ | (88,467 | ) | $ | 50,004 | $ | 138,471 | $ | (81,544 | ) | $ | 56,927 | |||||||||||
Trade Names | 750,186 | (306,722 | ) | 443,464 | 740,325 | (269,212 | ) | 471,113 | |||||||||||||||||
Approvals and Certifications | 1,763,002 | (1,078,633 | ) | 684,369 | 1,547,754 | (910,637 | ) | 637,117 | |||||||||||||||||
$ | 2,651,659 | $ | (1,473,822 | ) | $ | 1,177,837 | $ | 2,426,550 | $ | (1,261,393 | ) | $ | 1,165,157 |
Deposits_and_Other_NonCurrent_1
Deposits and Other Non-Current Assets, Net. (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ' | ||||||||
Deposits and other non-current assets | ' | ||||||||
30-Sep-14 | 31-Dec-13 | ||||||||
Deferred Financing Fees | $ | 211,519 | $ | 285,246 | |||||
Prepaid Expenses | 19,523 | 46,744 | |||||||
Other Receivables | 65,205 | 55,293 | |||||||
Deposits | 153,585 | 153,584 | |||||||
Note Receivable, Net | — | 145,791 | |||||||
Total Deposits and Other-Non-Current Assets | $ | 449,832 | $ | 686,658 |
Accrued_Expenses_and_Other_Cur1
Accrued Expenses and Other Current Liabilities (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Payables and Accruals [Abstract] | ' | ||||||||
Accrued expenses and other liabilities | ' | ||||||||
30-Sep-14 | 31-Dec-13 | ||||||||
Accrued Payroll | $ | 67,877 | $ | 169,785 | |||||
Accrued Commissions | 101,534 | 61,000 | |||||||
Accrued Inventory Purchases | 116,974 | 178,616 | |||||||
Accrued Taxes and Other | 806,690 | 606,275 | |||||||
Accrued Insurance | 34,022 | 427,395 | |||||||
Deferred Finance Charge Income | 29,882 | 13,824 | |||||||
Total Accrued Expenses and Other Current Liabilities | $ | 1,156,979 | $ | 1,456,895 |
Net_Income_Loss_per_Common_Sha1
Net Income (Loss) per Common Share - Basic and Diluted (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Net Income Loss Per Common Share - Basic And Diluted Tables | ' | ||||||||||||||||
Basic and Diluted earnings per share | ' | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Net loss available to common shareholders | $ | (1,014,359 | ) | $ | (297,178 | ) | $ | (2,328,265 | ) | $ | (1,325,088 | ) | |||||
Weighted average common shares outstanding | 115,204,510 | 112,155,974 | 114,821,758 | 110,945,316 | |||||||||||||
Dilutive effect of equity incentive plans | 350,000 | 350,000 | 350,000 | 350,000 | |||||||||||||
Weighted average common shares outstanding, assuming dilution | 115,487,651 | 112,274,357 | 114,143,420 | 111,035,142 | |||||||||||||
Basic earnings per common share | $ | (0.01 | ) | $ | (0.00 | ) | $ | (0.02 | ) | $ | (0.01 | ) | |||||
Diluted earnings per common share | $ | (0.01 | ) | $ | (0.00 | ) | $ | (0.02 | ) | $ | (0.01 | ) |
Business_Segment_Information_T
Business Segment Information (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | ' | ||||||||||||||||||||||||||||||||||||||||
Reportable Segments | ' | ||||||||||||||||||||||||||||||||||||||||
Three Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||||||||||||||||||
Foam | Coatings | Totals | Foam | Coatings | Totals | ||||||||||||||||||||||||||||||||||||
Sales | $ | 15,381,003 | $ | 2,493,305 | $ | 17,874,308 | $ | 15,299,778 | $ | 2,774,323 | $ | 18,074,101 | |||||||||||||||||||||||||||||
Depreciation | 32,695 | 5,300 | 37,995 | 31,835 | 5,773 | 37,608 | |||||||||||||||||||||||||||||||||||
Amortization of Other Intangible Assets | 60,913 | 9,874 | 70,787 | 61,196 | 11,097 | 72,293 | |||||||||||||||||||||||||||||||||||
Interest Expense | 239,389 | 38,806 | 278,195 | 175,513 | 31,826 | 207,339 | |||||||||||||||||||||||||||||||||||
Segment Profit | $ | 90,515 | $ | 204,844 | $ | 295,359 | $ | 695,746 | $ | 412,992 | $ | 1,108,738 | |||||||||||||||||||||||||||||
Segment Assets (1) | 17,350,894 | 3,575,856 | 20,926,750 | 17,791,684 | 3,942,638 | 21,734,322 | |||||||||||||||||||||||||||||||||||
Expenditures for Segment Assets | $ | — | $ | — | $ | — | $ | 15,707 | $ | 2,848 | $ | 18,555 | |||||||||||||||||||||||||||||
Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||||||||||||||||||
Foam | Coatings | Totals | Foam | Coatings | Totals | ||||||||||||||||||||||||||||||||||||
Sales | $ | 45,554,927 | $ | 7,106,449 | $ | 52,661,376 | $ | 45,103,935 | $ | 7,733,452 | $ | 52,837,387 | |||||||||||||||||||||||||||||
Depreciation | 98,872 | 15,424 | 114,296 | 100,579 | 17,262 | 117,841 | |||||||||||||||||||||||||||||||||||
Amortization of Other Intangible Assets | 165,385 | 25,800 | 191,185 | 260,272 | 44,626 | 304,898 | |||||||||||||||||||||||||||||||||||
Interest Expense | 700,634 | 109,297 | 809,931 | 572,439 | 98,149 | 670,588 | |||||||||||||||||||||||||||||||||||
Segment Profit | $ | 911,939 | $ | 728,586 | $ | 1,640,525 | $ | 1,909,559 | $ | 1,136,106 | $ | 3,045,665 | |||||||||||||||||||||||||||||
Segment Assets (1) | 17,420,376 | 3,506,374 | 20,926,750 | 17,907,817 | 3,826,505 | 21,734,322 | |||||||||||||||||||||||||||||||||||
Expenditures for Segment Assets | $ | 178,570 | $ | 27,857 | $ | 206,427 | $ | 34,488 | $ | 5,913 | $ | 40,401 | |||||||||||||||||||||||||||||
Reconciliation of reportable segment profit or loss | ' | ||||||||||||||||||||||||||||||||||||||||
For The Nine Months Ended September 30, | For The Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||
Profit or Loss | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||||||||||||||||||||
Total Profit or Loss for Reportable Segments | $ | 295,359 | $ | 1,108,738 | $1,640,525 | $3,045,665 | |||||||||||||||||||||||||||||||||||
Unallocated Amounts: | |||||||||||||||||||||||||||||||||||||||||
Corporate Expenses | (1,309,718 | ) | (1,405,916 | ) | -3,968,790 | -4,370,753 | |||||||||||||||||||||||||||||||||||
Income (Loss) Before Income Taxes | $ | (1,014,359 | ) | $ | (297,178 | ) | ($2,328,265) | ($1,325,088) | |||||||||||||||||||||||||||||||||
Reconciliation of reportable segment assets | ' | ||||||||||||||||||||||||||||||||||||||||
Assets | At September 30, 2014 | At December 31, 2013 | |||||||||||||||||||||||||||||||||||||||
Total Assets for Reportable Segments (1) | $ | 20,926,750 | $ | 21,661,548 | |||||||||||||||||||||||||||||||||||||
Other Unallocated Amounts (2) | 230,052 | 392,612 | |||||||||||||||||||||||||||||||||||||||
Consolidated Total | $ | 21,156,802 | $ | 22,054,160 | |||||||||||||||||||||||||||||||||||||
Geographic Area | ' | ||||||||||||||||||||||||||||||||||||||||
Three Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||||||||||||||||||
United States | Europe | Middle East | Rest of World | Total | United States | Europe | Middle East | Rest of World | Total | ||||||||||||||||||||||||||||||||
Sales | $ | 16,587,621 | 705,906 | — | 580,781 | $ | 17,874,308 | $ | 15,157,883 | 458,781 | 1,568,589 | 888,848 | $ | 18,074,101 | |||||||||||||||||||||||||||
Long-Lived Assets | 20,926,750 | — | — | — | 20,926,750 | 21,734,322 | — | — | — | 21,734,322 | |||||||||||||||||||||||||||||||
Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||||||||||||||||||
United States | Europe | Middle East | Rest of World | Total | United States | Europe | Middle East | Rest of World | Total | ||||||||||||||||||||||||||||||||
Sales | $ | 48,843,085 | 1,701,042 | 660,000 | 1,457,249 | $ | 52,661,376 | 45,082,381 | 1,063,272 | 4,176,558 | 2,515,176 | $ | 52,837,387 | ||||||||||||||||||||||||||||
Long-Lived Assets | 20,926,750 | — | — | — | 20,926,750 | 21,734,322 | — | — | — | 21,734,322 | |||||||||||||||||||||||||||||||
Basis_of_Presentation_Details_
Basis of Presentation (Details Narrative) (USD $) (USD $) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | |
Income Taxes | ' | ' | ' | ' | ' |
Deferred Tax Asset | $23,100,000 | ' | $23,100,000 | ' | $23,500,000 |
Deferred Tax asset valuation allowance | 23,100,000 | ' | 23,100,000 | ' | 23,500,000 |
Property,Plant and Equipment | ' | ' | ' | ' | ' |
Property, Plant and Equipment | 1,457,539 | ' | 1,457,539 | ' | 1,600,679 |
Depreciation Expense | 96,695 | 110,838 | 300,619 | 343,538 | ' |
Depreciation in cost of sales | 54,479 | 69,052 | 173,624 | 212,492 | ' |
Goodwill and Other Intangible Assets | ' | ' | ' | ' | ' |
Goodwill | 4,234,828 | ' | 4,234,828 | ' | 4,234,828 |
Other Intangible Assets, Net | 1,177,837 | ' | 1,177,837 | ' | 1,165,157 |
Amortization Expense | 78,653 | 80,325 | 212,428 | 338,776 | ' |
Revenue Recognition | ' | ' | ' | ' | ' |
Freight included in sales | 245,379 | 291,466 | 720,394 | 851,699 | ' |
Freight included in cost of sales | 1,102,799 | 882,121 | 3,136,657 | 2,549,389 | ' |
Share Based compensation | ' | ' | ' | ' | ' |
Share Based Compensation Expense | 189,670 | 309,762 | 563,369 | 969,676 | ' |
Allowance for doubtful accounts | ' | ' | ' | ' | ' |
Allowance for doubtful accounts | 698,000 | ' | 698,000 | ' | 317,000 |
Advertising and Marketing | ' | ' | ' | ' | ' |
Deferred Advertising Costs | 167,836 | ' | 167,836 | ' | 66,719 |
Advertising and Marketing costs | $218,930 | $129,176 | $806,578 | $732,493 | ' |
Liquidity_Details_Narrative
Liquidity (Details Narrative) (USD $) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' | ' | ' | ' | ' |
Accumulated Deficit | $88,823,919 | ' | $88,823,919 | ' | $86,495,654 |
Net Loss | 1,014,359 | 297,178 | 2,328,265 | 1,325,088 | ' |
Net Cash (Used in) Provided by Operating Activities | ' | ' | -744,840 | -11,464 | ' |
Working Capital Surplus | $6,685,065 | ' | $6,685,065 | ' | ' |
Dependence_on_a_few_suppliers_
Dependence on a few suppliers (Details Narrative) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Notes to Financial Statements | ' | ' | ' | ' |
Major Suppliers | '44% | '44% | '43% | '53% |
Trade_Receivables_Trade_Receiv
Trade Receivables - Trade Receivables (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Accounts Receivable, Net, Current [Abstract] | ' | ' |
Trade Receivables | $9,562,804 | $8,011,176 |
Less: Allowance for Doubtful Accounts | -697,785 | -316,587 |
Trade Receivables, Net | $8,865,019 | $7,694,589 |
Costs_and_Estimated_Earnings_o2
Costs and Estimated Earnings on Uncompleted Contract. - Costs and Estimated Earnings on Uncompleted Contract. (Details) (USD $) | 9 Months Ended | |
Sep. 30, 2014 | Dec. 31, 2013 | |
Notes to Financial Statements | ' | ' |
Costs Incurred on Uncompleted Contracts | $961,644 | ' |
Estimated Net Income on Uncompleted Contracts | 228,059 | ' |
Uncompleted Contracts | 1,189,703 | ' |
Billings to Date | -963,670 | ' |
Costs and Estimated Earnings in Excess of Billings on Uncompleted Contract | $226,033 | ' |
Inventories_Inventories_Detail
Inventories - Inventories (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Inventory Disclosure [Abstract] | ' | ' |
Raw Materials | $1,139,123 | $1,804,959 |
Finished Goods | 2,977,889 | 3,616,976 |
Inventories | $4,117,012 | $5,421,935 |
Prepaid_Expenses_and_Other_Cur2
Prepaid Expenses and Other Current Assets. - Prepaid Expenses and Other Current Assets (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ' | ' |
Prepaid Insurances | $150,647 | $582,654 |
Prepaid Marketing | 166,770 | 152,667 |
Prepaid Consulting | 44,048 | 66,208 |
Prepaid Other | 267,237 | 357,839 |
Note Receivable, Net | ' | 90,946 |
Total Prepaid Expenses and Other Current Assets | $628,702 | $1,250,314 |
Property_Plant_and_Equipment_P
Property, Plant and Equipment - Property, Plant and Equipment (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Property, Plant and Equipment [Abstract] | ' | ' |
Vehicles | $573,717 | $649,487 |
Leasehold Improvements | 288,777 | 288,777 |
Office Furniture and Equipment | 297,737 | 327,329 |
Computers and Software | 896,339 | 1,185,333 |
Machinery and Equipment | 2,503,062 | 2,466,007 |
Total Property, Plant and Equipment | 4,559,632 | 4,916,933 |
Less: Accumulated Depreciation | -3,102,093 | -3,316,254 |
Property, Plant and Equipment | $1,457,539 | $1,600,679 |
Goodwill_and_Other_Intangible_2
Goodwill and Other Intangible Assets - Goodwill (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Goodwill and Intangible Assets Disclosure [Abstract] | ' | ' |
Foam | $2,932,208 | $2,932,208 |
Coatings | 1,302,620 | 1,302,620 |
Goodwill | $4,234,828 | $4,234,828 |
Goodwill_and_Other_Intangible_3
Goodwill and Other Intangible Assets - Other Intangible Assets (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Intangible Assets, Gross | $2,651,659 | $2,426,550 |
Accumulated Amortization | -1,473,822 | -1,261,393 |
Intangible Assets, Net | 1,177,837 | 1,165,157 |
Product Formulation | ' | ' |
Intangible Assets, Gross | 138,471 | 138,471 |
Accumulated Amortization | -88,467 | -81,544 |
Intangible Assets, Net | 50,004 | 56,927 |
Trade Names | ' | ' |
Intangible Assets, Gross | 750,186 | 740,325 |
Accumulated Amortization | -306,722 | -269,212 |
Intangible Assets, Net | 443,464 | 471,113 |
Approvals and Certifications | ' | ' |
Intangible Assets, Gross | 2,651,659 | 1,547,754 |
Accumulated Amortization | -1,473,822 | -910,637 |
Intangible Assets, Net | $1,177,837 | $637,117 |
Deposits_and_Other_NonCurrent_2
Deposits and Other Non-Current Assets, Net. - Deposits and other non-current assets (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ' | ' |
Deferred Financing Fees | $211,519 | $285,246 |
Prepaid Expenses | 19,523 | 46,744 |
Other Receivables | 65,205 | 55,293 |
Deposits | 153,585 | 153,584 |
Note Receivable, Net | ' | 145,791 |
Total Deposits and Other-Non-Current Assets | $449,832 | $686,658 |
Accrued_Expenses_and_Other_Cur2
Accrued Expenses and Other Current Liabilities - Accrued expenses and other liabilities (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Accrued Liabilities and Other Liabilities [Abstract] | ' | ' |
Accrued Payroll | $67,877 | $169,785 |
Accrued Commissions | 101,534 | 61,000 |
Accrued Inventory Purchases | 116,974 | 178,616 |
Accrued Taxes and Other | 806,690 | 606,275 |
Accrued Insurance | 34,022 | 427,395 |
Deferred Finance Charge Income | 29,882 | 13,824 |
Total Accrued Expenses and Other Current Liabilities | $1,156,979 | $1,456,895 |
Financing_Instruments_Loan_and
Financing Instruments - Loan and Security Agreement (Details Narrative) (Revolver Loan, USD $) | 1 Months Ended | ||
Sep. 01, 2010 | Sep. 30, 2014 | Dec. 31, 2013 | |
Revolver Loan | ' | ' | ' |
Bank Loans Funds Available | $13,000,000 | $1,077,892 | ' |
Maturity Date | 31-Mar-16 | ' | ' |
Bank Loan Payable | ' | $5,442,030 | $4,539,163 |
Weighted-Average Interest Rate | ' | 4.40% | 4.50% |
Financing_Instruments_Note_Pur
Financing Instruments Note Purchase Agreement - New Enhanced Note (Details Narrative) (USD $) (USD $) | 3 Months Ended | 9 Months Ended | 0 Months Ended | 9 Months Ended | |||||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 10, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 10, 2013 | Dec. 10, 2013 | |
Note Purchase Agreement | Note Purchase Agreement | Note Purchase Agreement | Enhanced Jobs for Texas | Enhanced Texas Fund | |||||
Bank Loans Funds Available | ' | ' | ' | ' | $7,200,000 | ' | ' | $5,700,000 | $1,500,000 |
Maturity Date | ' | ' | ' | ' | 10-Dec-16 | ' | ' | ' | ' |
Interest Rate | ' | ' | ' | ' | 7.25% | 11.00% | ' | ' | ' |
Enhanced Notes Payable | ' | ' | ' | ' | ' | 7,027,882 | 6,683,561 | ' | ' |
Effective Interest Rate | ' | ' | ' | ' | ' | 23.60% | 29.00% | ' | ' |
Pruchase discount | ' | ' | ' | ' | ' | ' | 542,886 | ' | ' |
Amortization of discount | ($46,007) | ' | ($136,512) | ' | ' | $136,512 | ' | ' | ' |
Financing_Instruments_Note_Pur1
Financing Instruments Note Purchase - New Guaranty Agreement (Details Narrative) (Note Purchase Agreement, USD $) | 0 Months Ended | 1 Months Ended | 9 Months Ended |
Dec. 10, 2013 | Dec. 31, 2013 | Sep. 30, 2014 | |
Note Purchase Agreement | ' | ' | ' |
Restricted Common Stock Issued, shares | 3,681,000 | 73,821 | 916,054 |
Restricted Common Stock, par value | $0.01 | ' | ' |
Per Share | $0.60 | ' | ' |
Restricted Common Stock Issued, Amount | $2,208,600 | $44,293 | $549,633 |
Financing_Instruments_Note_Pur2
Financing Instruments Note Purchase Agreement - Prior Enhanced Note (Details Narrative) (USD $) (USD $) | 0 Months Ended |
Dec. 08, 2013 | |
Enhanced Jobs for Texas | ' |
Payments on Notes Payable | $1,673,381 |
Enhanced Texas Fund | ' |
Payments on Notes Payable | $1,673,381 |
Financing_Instruments_Note_Pur3
Financing Instruments Note Purchase - Prior Guaranty Agreement (Details Narrative) (Prior Guaranty Agreement, USD $) | 1 Months Ended |
Jun. 29, 2012 | |
Prior Guaranty Agreement | ' |
Cancelled unvested shares | 1,376,712 |
Cancelled unvested shares, amount | $371,801 |
Per Share | $0.27 |
Restricted Common Stock Issued, Amount | $1,350,000 |
Financing_Instruments_Note_Pay
Financing Instruments Note Payable - Related Party(Details Narrative) (USD $) | 3 Months Ended | ||
Apr. 16, 2012 | Sep. 30, 2014 | Sep. 30, 2013 | |
Financing Instruments Note Payable - Related Partydetails Narrative | ' | ' | ' |
Note due to related party | $1,300,000 | ' | ' |
Interest Rate | 5.00% | ' | ' |
Maturity Date | 1-Oct-14 | ' | ' |
Accrued interest | ' | $54,667 | $52,634 |
Related_Party_Transactions_Det
Related Party Transactions (Details Narrative) (USD $) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2014 | ||
Non-employee director | ' | ' | |
Common stock, shares | ' | 400,000 | [1] |
Share Price | $0.42 | $0.42 | |
Vested Shares, shares | 50,000 | 50,000 | |
Vested term | ' | '2 years | |
Share based compensation expense | $14,000 | $33,000 | |
Stock options fair value | ' | 155,027 | |
Quarterly salary | ' | 10,000 | |
New Quarterly Salary | ' | 15,000 | |
Employment Agreement | ' | ' | |
Common stock, shares | ' | 1,025,000 | [2] |
Share based compensation expense | 34,000 | 83,000 | |
Stock options fair value | ' | 368,189 | |
Chairman | ' | ' | |
Common stock, shares | ' | 400,000 | [3] |
Common stock for financing, shares | 308,707 | 916,054 | |
Interest Expense | 185,224 | 549,633 | |
Accrued Interest | 18,654 | 54,667 | |
Share based compensation expense | 13,000 | 38,000 | |
Stock options fair value | ' | 199,305 | |
New Kramer Option | ' | ' | |
Share Price | $0.54 | $0.54 | |
Advisory and Consulting | ' | ' | |
Common stock, shares | 20,367 | 334,471 | |
Common stock, amount | $13,563 | $193,777 | |
[1] | Four non-employee directors, 100,000 shares each | ||
[2] | 350,000 options were for Mr. Kramer, 150,000 options each were for Mr. Adams and Mr. Schnitzer, and 100,000 options were for Mr. Zajaczkowski, and 275,000 options were for other key employees | ||
[3] | The foregoing stock options vest over a period of two (2) years at the rate of 200,000 options on May 14, 2015 and May 14, 2016 |
Net_Income_Loss_per_Common_Sha2
Net Income (Loss) per Common Share - Basic and Diluted (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Net Income Loss Per Common Share - Basic And Diluted Details | ' | ' | ' | ' |
Net loss available to common shareholders (A) | ($1,014,359) | ($297,178) | ($2,328,265) | ($1,325,088) |
Weighted average common shares outstanding (B) | 115,204,510 | 112,155,974 | 114,821,758 | 110,945,316 |
Dilutive effect of employee equity incentive plans | $350,000 | $350,000 | $350,000 | $350,000 |
Weighted average common shares outstanding, assuming dilution (C) | 115,487,651 | 112,274,357 | 114,143,420 | 111,035,142 |
Basic earnings per common share (A)/(B) | ($0.01) | $0 | ($0.02) | ($0.01) |
Diluted earnings per common share (A)/(C) | ($0.01) | $0 | ($0.02) | ($0.01) |
Net_Income_Loss_per_Common_Sha3
Net Income (Loss) per Common Share - Basic and Diluted (Details Narrative) | 9 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Antidilutive Secuities | 2,460,000 | 3,055,833 |
In-the-money | ' | ' |
Antidilutive Secuities | 350,000 | 2,110,000 |
Out-of-the-money | ' | ' |
Antidilutive Secuities | 350,000 | 2,705,833 |
Securities_Transactions_Detail
Securities Transactions (Details Narrative) (USD $) | 9 Months Ended |
Sep. 30, 2014 | |
Related Party | ' |
Restricted Stock issued for Guaranty of Note, shares | 308,707 |
Restricted Stock issued for Guaranty of Note, amount | $185,224 |
Advisory and Consulting | ' |
Restricted Stock issued for Services, shares | 20,367 |
Restricted Stock issued for Services, amount | $13,563 |
Business_Segment_Information_R
Business Segment Information - Reportable Segments (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Sales | $17,874,308 | $18,074,101 | $52,661,376 | $52,837,387 |
Depreciation | 37,995 | 37,608 | 114,296 | 117,841 |
Amortization of Other Intangible Assets | 70,787 | 72,293 | 191,185 | 304,898 |
Interest Expense | 278,195 | 207,339 | 809,931 | 670,588 |
Segment Profit | 295,359 | 1,108,738 | 1,640,525 | 3,045,665 |
Segment Assets (1) | 20,926,750 | 21,734,322 | 20,926,750 | 21,734,322 |
Expenditures for Segment Assets | ' | 18,555 | 206,427 | 40,401 |
Foam | ' | ' | ' | ' |
Sales | 15,381,003 | 15,299,778 | 45,554,927 | 45,103,935 |
Depreciation | 32,695 | 31,835 | 98,872 | 100,579 |
Amortization of Other Intangible Assets | 60,913 | 61,196 | 165,385 | 260,272 |
Interest Expense | 239,389 | 175,513 | 700,634 | 572,439 |
Segment Profit | 90,515 | 695,746 | 911,939 | 1,909,559 |
Segment Assets (1) | 17,350,894 | 17,791,684 | 17,420,376 | 17,907,817 |
Expenditures for Segment Assets | ' | 15,707 | 178,570 | 34,488 |
Coatings | ' | ' | ' | ' |
Sales | 2,493,305 | 2,774,323 | 7,106,449 | 7,733,452 |
Depreciation | 5,300 | 5,773 | 15,424 | 17,262 |
Amortization of Other Intangible Assets | 9,874 | 11,097 | 25,800 | 44,626 |
Interest Expense | 38,806 | 31,826 | 109,297 | 98,149 |
Segment Profit | 204,844 | 412,992 | 728,586 | 1,136,106 |
Segment Assets (1) | 3,575,856 | 3,942,638 | 3,506,374 | 3,826,505 |
Expenditures for Segment Assets | ' | $2,848 | $27,857 | $5,913 |
Business_Segment_Information_R1
Business Segment Information - Reconciliation of reportable segment profit or loss (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract] | ' | ' | ' | ' |
Total Profit or Loss for Reportable Segments | $295,359 | $1,108,738 | $1,640,525 | $3,045,665 |
Corporate Expenses | -1,309,718 | -1,405,916 | -3,968,790 | -4,370,753 |
Income (Loss) Before Income Taxes | ($1,014,359) | ($297,178) | ($2,328,265) | ($1,325,088) |
Business_Segment_Information_R2
Business Segment Information - Reconciliation of reportable segment assets (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Segment Reporting [Abstract] | ' | ' |
Total Assets for Reportable Segments | $20,926,750 | $21,661,548 |
Other Unallocated Amounts | 230,052 | 392,612 |
Total Assets | $21,156,802 | $22,054,160 |
Business_Segment_Information_G
Business Segment Information - Geographic Area Information (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Sales | $17,874,308 | $18,074,101 | $52,661,376 | $52,837,387 |
Long Lived Assets | 20,926,750 | 21,734,322 | 20,926,750 | 21,734,322 |
United States | ' | ' | ' | ' |
Sales | 16,587,621 | 15,157,883 | 48,843,085 | 45,082,381 |
Long Lived Assets | 20,926,750 | 21,734,322 | 20,926,750 | 21,734,322 |
Europe | ' | ' | ' | ' |
Sales | 705,906 | 458,781 | 1,701,042 | 1,063,272 |
Long Lived Assets | ' | ' | ' | ' |
Middle East | ' | ' | ' | ' |
Sales | ' | 1,568,589 | 660,000 | 4,176,558 |
Long Lived Assets | ' | ' | ' | ' |
Rest of the World | ' | ' | ' | ' |
Sales | 580,781 | 888,848 | 1,457,249 | 2,515,176 |
Long Lived Assets | ' | ' | ' | ' |
Subsequent_Events_Details
Subsequent Events (Details) (USD $) | 9 Months Ended |
Sep. 30, 2014 | |
Financial Substitution Commitment | ' |
Bank Loans Funds Available | $1,500,000 |
Proceeds from Related Party | $250,000 |
Interest rate | 8.00% |
Note Payable | ' |
Interest rate | 3.75% |
Effective Interest Rate | 4.25% |
Kramer Options | ' |
Common stock, shares | 1,150,000 |
Share Price | $0.43 |
Subsequent_Events_Details_Pare
Subsequent Events (Details) (Parenthetical) (Kramer Options) | 9 Months Ended |
Sep. 30, 2014 | |
Kramer Options | ' |
Terms | ' |
The Kramer Options were granted as partial replacement for 2,000,000 stock options were granted on July 12, 2005 which expired July 12, 2013 (the “Prior Expired Options”). The Prior Expired Options were inadvertently extended to December 31, 2015, however, due to the 8 year life limitation, they were deemed canceled at the end of 8 years. The Company also undertook to grant the additional 850,000 stock options (to make up for the total 2,000,000 stock options) on January 2, 2015 since the equity Incentive Plan only permits the grant of a total of 2,000,000 stock options during any calendar year (and Mr. Kramer was previously granted 850,000 stock options during the 2014 year for other incentives). |