Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Nov. 05, 2015 | |
Document and Entity Information: | ||
Entity Registrant Name | N-Viro International Corporation | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2015 | |
Trading Symbol | nvic | |
Amendment Flag | false | |
Entity Central Index Key | 904,896 | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 8,909,714 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Well-known Seasoned Issuer | No | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Assets, Current | ||
Cash and Cash Equivalents - Unrestricted | $ 25,427 | $ 81,854 |
Cash and Cash Equivalents - Restricted | 0 | 65,529 |
Accounts Receivable, Net, Current | 123,695 | 140,070 |
Due from Related Parties, Current | 8,078 | 6,304 |
Other Receivable, net | 0 | 45,608 |
Prepaid Expense, Current | 70,607 | 79,719 |
Deferred Costs, Current | 79,167 | 597,789 |
Assets, Current | 306,974 | 1,016,873 |
Assets, Noncurrent | ||
Property and equipment, net | 873,027 | 998,852 |
Deposits Assets, Noncurrent | 33,666 | 27,319 |
Assets, Noncurrent | 906,693 | 1,026,171 |
Total Assets | 1,213,667 | 2,043,044 |
Liabilities, Current | ||
Notes Payable, Current | 33,375 | 63,186 |
Capital Lease Obligations, Current | 113,023 | 86,652 |
Notes Payable, related parties, current | 200,000 | 244,480 |
Convertible Debt, current | 365,000 | 455,000 |
Pension plan withdrawal liability, current | 425,112 | 68,917 |
Accounts Payable | 708,850 | 716,680 |
Accrued liabilities | 294,253 | 320,207 |
Liabilities, Current | 2,139,613 | 1,955,122 |
Liabilities, Noncurrent | ||
Notes Payable, Noncurrent | 0 | 6,182 |
Pension plan withdrawal liability, Noncurrent | 0 | 320,472 |
Capital lease liability - long-term, less current maturities, in default | 262,413 | 319,278 |
Liabilities, Noncurrent | 262,413 | 645,932 |
Total Liabilities | 2,402,026 | 2,601,054 |
Commitments and Contingencies | 0 | 0 |
Stockholders' Deficit | ||
Preferred stock, value | 0 | 0 |
Common stock, value | 88,515 | 81,668 |
Additional Paid in Capital | 32,968,640 | 32,103,596 |
Accumulated Deficit | (34,234,423) | (32,565,813) |
Treasury stock, at cost | 11,091 | 177,461 |
Total Stockholders' Deficit | (1,188,359) | (558,010) |
Total Liabilities and Stockholders'' Deficit | $ 1,213,667 | $ 2,043,044 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS - Parenthetical - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Condensed Consolidated Balance Sheets | ||
Allowance for doubtful trade accounts receivable, current | $ 0 | $ 101,260 |
Allowance for doubtful related party accounts receivable, current | $ 6,202 | $ 0 |
Preferred Stock, Par Value | $ 0.01 | $ 0.01 |
Preferred Stock, Shares Authorized | 2,000,000 | 2,000,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Common Stock, Par Value | $ 0.01 | $ 0.01 |
Common Stock, Shares Authorized | 35,000,000 | 35,000,000 |
Common Stock, Shares Issued | 8,851,549 | 8,166,789 |
Common Stock, Shares Outstanding | 8,849,549 | 8,134,789 |
Treasury Stock, at cost - Shares | 2,000 | 32,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Condensed Consolidated Statements of Operations | ||||
REVENUES | $ 280,110 | $ 322,031 | $ 954,749 | $ 1,015,711 |
COST OF REVENUES | 308,925 | 381,163 | 953,310 | 1,199,971 |
GROSS PROFIT (LOSS) | (28,815) | (59,132) | 1,439 | (184,260) |
Operating Expenses | ||||
Selling, General and Administrative | 427,153 | 309,908 | 1,417,856 | 1,053,245 |
Loss (gain) on disposal of assets | 0 | 31,021 | 0 | (89,314) |
Impairment of intangible assets | 0 | 42,653 | 0 | 42,653 |
Total Operating Expenses | 427,153 | 383,582 | 1,417,856 | 1,006,584 |
OPERATING LOSS | (455,968) | (442,714) | (1,416,417) | (1,190,844) |
Other Income (Expense) | ||||
Interest income | 0 | 44 | 86 | 147 |
Interest expense | (32,290) | (44,387) | (101,156) | (127,455) |
Gain on extinguishment of liabilities | 0 | 0 | 0 | 15,478 |
Total other income (expense) | (32,290) | (44,343) | (101,070) | (111,830) |
LOSS BEFORE INCOME TAXES | (488,258) | (487,057) | (1,517,487) | (1,302,674) |
Federal and state income taxes | 0 | 0 | 0 | 0 |
NET LOSS | $ (488,258) | $ (487,057) | $ (1,517,487) | $ (1,302,674) |
Earnings Per Share | ||||
Basic and diluted loss per share | $ (0.06) | $ (0.07) | $ (0.18) | $ (0.18) |
Weighted Average Common Shares Outstanding, Basic and Diluted | 8,826,295 | 7,433,588 | 8,559,964 | 7,153,269 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Condensed Consolidated Statements of Cash Flows | ||
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | $ (558,139) | $ (435,322) |
Cash Flows From Investing Activities | ||
Purchases of property and equipment | 33,806 | 31,050 |
Proceeds from sale of Property and Equipment | 45,608 | 157,452 |
Increases in (decreases to) restricted cash | (65,529) | 83,551 |
Collections on note receivable | 0 | 894 |
Net cash provided by investing activities | 77,331 | 43,745 |
Cash Flows From Financing Activities | ||
Private placements of common stock, net | 533,365 | 367,430 |
Proceeds from stock options and warrants exercised, net | 1,983 | 121,952 |
Principal borrowings from (payments on) Notes Payable - related party | (44,480) | 50,000 |
Net repayments on line of credit | 0 | (111,733) |
Borrowngs under long-term debt | 53,629 | 101,175 |
Principal payments on long-term obligations | (120,116) | (121,442) |
Net cash provided by (used in) financing activities | 424,381 | 407,382 |
Net Increase (Decrease) in Cash and Cash Equivalents | (56,427) | 15,805 |
Cash and Cash Equivalents - Beginning | 81,854 | 14,344 |
Cash and Cash Equivalents - Ending | 25,427 | 30,149 |
Supplemental disclosure of cash flows information: | ||
Cash paid during the nine months ended for interest | $ 96,595 | $ 69,725 |
Note 1. Organization and Basis
Note 1. Organization and Basis of Presentation | 9 Months Ended |
Sep. 30, 2015 | |
Notes | |
Note 1. Organization and Basis of Presentation | Note 1. Organization and Basis of Presentation The accompanying consolidated financial statements of N-Viro International Corporation (the Company) are unaudited but, in management's opinion, reflect all adjustments (including normal recurring accruals) necessary to present fairly such information for the period and at the dates indicated. The results of operations for the nine months and three months ended September 30, 2015 may not be indicative of the results of operations for the year ending December 31, 2015. Since the accompanying consolidated financial statements have been prepared in accordance with Article 8 of Regulation S-X, they do not contain all information and footnotes normally contained in annual consolidated financial statements; accordingly, they should be read in conjunction with the consolidated financial statements and notes thereto appearing in the Company's Form 10-K for the period ending December 31, 2014. The financial statements are consolidated as of September 30, 2015, December 31, 2014 and September 30, 2014 for the Company. All intercompany transactions were eliminated. In preparing financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. There have been no changes in the selection and application of significant accounting policies and estimates disclosed in Item 8 Financial Statements and Supplementary Data of our Annual Report on Form 10-K for the year ended December 31, 2014. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company has negative working capital of approximately $1,833,000 at September 30, 2015 and has incurred recurring losses and negative cash flows from operations. Moreover, while the Company hopes to arrange for substitute financing arrangements for the line of credit that was closed during 2014, there can be no assurance that additional financing will be available. The Company has funded its cash losses with principally new equity issuances and expects to be able to generate future cash from the exercise of common stock warrants and continued new equity issuances, though there can be no assurance given that such issuances or exercises will be realized. From April 2014 through October 2015, the Company issued stock for private placements, warrant and stock option exercises that realized a net total of approximately $1,430,000. The Company has also continued to slow payments to trade vendors, and has renegotiated payment terms with several existing and prior vendors to lengthen the time and/or reduce the amount of cash to repay these trade payables. These factors raise substantial doubt as to the Companys ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Certain amounts in the Condensed Consolidated Statements of Operations for both the nine month and three month periods ending September 30, 2014 have been reclassified to conform to the current period presentation. Net Loss was not affected for either period. |
Note 2. Notes Payable
Note 2. Notes Payable | 9 Months Ended |
Sep. 30, 2015 | |
Notes | |
Note 2. Notes Payable | Note 2. Notes Payable In August 2011, the Company borrowed $200,000 with a Promissory Note payable to David and Edna Kasmoch (related parties), the parents of Timothy Kasmoch, the Companys President and Chief Executive Officer, at 12% interest and prepaid for a period of three months, renewable for an additional three months by the prepayment of additional interest and secured by certain equipment. Timothy Kasmoch has personally guaranteed the repayment of this Note. As of September 30, 2015 the Note was past due and the Company is in default. The Company expects to extend the Note in the near future and pay it in full in the next twelve months, although there can be no assurance the Company will have adequate cash flow to allow for any additional payments or that the maturity date will be extended. At both September 30, 2015 and December 31, 2014 the balance of this Note was $200,000. In November 2012, the Company received a Notice and Demand of Payment Withdrawal Liability from Central States Southeast and Southwest Areas Pension Fund (the Notice), the pension trustee that was funded by the Company for the benefit of its former employees at its City of Toledo operation. In December 2013, the Company received a Notice of Default from Central States, and in September 2014 the Company agreed to pay Central States a total of $415,000 plus interest on a financed settlement over 19 months, with principal and interest payments of $6,000 per month for the first twelve months and principal and interest payments of $10,000 per month for the following six months, with a balloon payment of approximately $312,000 due on or before February 1, 2016. Interest is charged at the Prime rate plus 2% (effective rate of 5.25% at September 30, 2015). Concurrently a separate security agreement was agreed on, effectively securing all of the Companys assets and future rights to assets. As of the date of this filing, the Company is not in compliance with the new settlement agreement, as one payment of $10,000 is overdue for the November 1, 2015 due date. In an event of default, the Company becomes liable for liquidating damages to Central States in the amount of $78,965. This liability has been added to the total amount owed under this agreement. At September 30, 2015 and December 31, 2014, the balance owed under this agreement was $425,112 and $389,389, respectively. As of September 30, 2015, the Company has one term note outstanding at 7.1% interest with an initial term of five years, with monthly payments of approximately $2,100 and secured by automotive equipment. The amount owed on the note as of September 30, 2015 and December 31, 2014 was approximately $12,300 and $29,900, respectively, and is expected to be paid in full on the maturity date in March 2016. During the first nine months of 2015, the Company borrowed a total of approximately $54,000 to pay for an insurance policy on equipment coverage during the year. The agreement is for a nine month term and accordingly is classified as current. An interest rate of 8.4% is charged with a monthly payment of approximately $5,400. At September 30, 2015 the balance of this note was approximately $21,100. The Company also financed its directors and officers insurance in late 2014, financing $26,900 over 10 months at 9% interest, monthly payments of $2,800 and also unsecured. That note was paid off in August 2015. In 2009 the Company approved an offering of up to $1,000,000 of Convertible Debentures (the Debentures), convertible at any time into our unregistered common stock at $2.00 per share. The Debentures were issuable in $5,000 denominations, are unsecured and have a stated interest rate of 8%, payable quarterly to holders of record. The Company has timely paid all accrued interest due to all Debenture holders of record as of each quarter-end date starting in July 2009. At any time, the Company may redeem all or a part of the Debentures at face value plus unpaid interest. As of June 30, 2013, the Company had $455,000 of Debentures outstanding from the initial 2009 offering discussed above, but defaulted and did not pay the holders the principal amount due, all of which became due. In the first nine months of 2015, two of the Companys debenture holders converted a total of $91,260 in debt including accrued interest to 45,630 restricted shares of the Companys common stock. The transactions were exempt from the registration requirements under the Securities Act pursuant to section 4(a)(2) as a transaction by an issuer not involving a public offering. These reduced the amount of Debentures that remain outstanding and in default at September 30, 2015 to $365,000. The Company continues to accrue interest on the principal amount at the rate set forth in the Debentures until the principal amount is paid in full. The Company expects to pay all accrued interest due and the principal amount to all outstanding holders of the Debentures after completing substitute financial arrangements, though there can be no assurance of the timing of receipt of these funds and amounts available from these substitute arrangements. |
Note 3. Capital Lease
Note 3. Capital Lease | 9 Months Ended |
Sep. 30, 2015 | |
Notes | |
Note 3. Capital Lease | Note 3. Capital Lease In June 2014, Mulberry Processing, LLC, a wholly owned subsidiary of the Company, entered into a contract to lease certain real property and buildings in Bradley, Florida from Bowling Green Holdings, LLC (BGH), a related party, a company owned by David Kasmoch, the father of Timothy R. Kasmoch, the Companys President and Chief Executive Officer. The lease term is for five years beginning June 1, 2014 with a monthly payment of $10,000. At September 30, 2015 and December 31, 2014 the Company was in default of its payments. In September 2015, the Company received a demand letter from counsel for the lessor declaring a default under the lease. Counsel demanded payment of several months of accrued rent in arrears under the lease, together with penalties. The Company is in negotiations with counsel and their client to resolve this default, although there can be no assurance these negotiations will be successful. This lease is for the Companys operating facility which commenced operations in June 2014, and has been determined to be a capital lease. The economic substance of the lease is the Company is financing the acquisition of the asset through the lease, and accordingly, it is recorded in the Companys assets and liabilities. Assets and liabilities under capital leases initially are recorded at the lower of present value of the minimum lease payments or the fair value of the assets. The assets are depreciated over the shorter of the lease term or their estimated useful lives. A liability and related asset of $420,346 was recorded in June 2014 concurrent with the start of the lease agreement. The capital lease liability at September 30, 2015 and December 31, 2014 was approximately $375,400 and $405,900, respectively. Depreciation on assets under capital leases charged to expense for the nine months ended September 30, 2015 and 2014 was approximately $63,000 and $28,000, respectively, and for both the three months ended September 30, 2015 and 2014 was approximately $21,000, recorded in cost of sales. Interest charged related to capital lease liabilities for the nine months ended September 30, 2015 and 2014 was approximately $41,000 and $20,700, respectively, and for the three months ended September 30, 2015 and 2014 was approximately $13,100 and $15,400, respectively, recorded as interest expense. |
Note 4. Commitments and Conting
Note 4. Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2015 | |
Notes | |
Note 4. Commitments and Contingencies | Note 4. Commitments and Contingencies In 2010, the Company and Timothy R. Kasmoch, the President and Chief Executive Officer, entered into an Employment Agreement for a five-year term. Mr. Kasmoch is to receive an annual base salary of $150,000, subject to an annual discretionary increase. In addition, Mr. Kasmoch is eligible for an annual cash bonus and was granted stock options from the Companys Second Amended and Restated 2004 Stock Option Plan. Generally, the Agreement may be terminated by the Company with or without cause or by the Employee for any reason. In March 2015, Mr. Kasmochs Employment Agreement automatically renewed for a one-year term. In 2010, the Company and Robert W. Bohmer, the Executive Vice President and General Counsel, entered into an Employment Agreement for a five-year term. Mr. Bohmer is to receive an annual base salary of $150,000, subject to an annual discretionary increase. In addition, Mr. Bohmer is eligible for an annual cash bonus and was granted stock options from the Companys Second Amended and Restated 2004 Stock Option Plan. Generally, the Agreement may be terminated by the Company with or without cause or by the Employee for any reason. In May 2014, the Company and Mr. Bohmer agreed to an adjustment to his employment contract, making him a part-time employee and adjusting his salary to $57,200. In March 2015, Mr. Bohmers Employment Agreement automatically renewed for a one-year term at his reduced salary of $57,200. In 2010, the Company and James K. McHugh, the Chief Financial Officer, Secretary and Treasurer, entered into an Employment Agreement for a five-year term. Mr. McHugh is to receive an annual base salary of $125,000, subject to an annual discretionary increase. In addition, Mr. McHugh is eligible for an annual cash bonus and was granted stock options from the Companys Second Amended and Restated 2004 Stock Option Plan. Generally, the Agreement may be terminated by the Company with or without cause or by the Employee for any reason. In March 2015, Mr. McHughs Employment Agreement automatically renewed for a one-year term. As of September 30, 2015, the Company has accrued a liability of approximately $154,000 to reflect the total amount of salary and related payroll taxes voluntarily deferred by its three executive officers since February 2012. The Company has also not paid a total of $92,000 in regular (nondeferred) salary and related payroll taxes to the officers as of September 30, 2015, for a total of approximately $246,000 in unpaid salaries and related payroll taxes reflected in the accrued liabilities section on the balance sheet. In May 2013, the Companys Board of Directors approved an amendment to the stock option grant section of the employment agreements for all of the Companys executive officers. Additional information about all of the employment agreements for the Companys executive officers is available in Item 11 Executive Compensation in the Form 10-K filed on April 15, 2015. In February 2013, the Company received a letter from counsel on behalf of one of our stockholders (Counsel letter), demanding a review by the Board of option plan issuances in 2010 and 2011 to members of management. In response, the Board formed a Special Committee to evaluate the 2004 and 2010 Stock Option Plans for the issuances in 2010 pursuant to the multi-year employment agreements with Messrs. Kasmoch, Bohmer and McHugh under the 2004 Option Plan, and the 2011 award to Mr. Kasmoch under the 2010 Option Plan. In May 2013, the Special Committee and the Board finished reviewing the awards and sent a letter in reply to the Counsel letter. The Board also approved an amendment to each the executive officers respective employment agreement, and renegotiated their option grants such that (i) no grant in any single year exceeds the Plan Limits, and, (ii) each employee return to respective Option Plan the number of options by which his annual grant exceeded the Plan Limits for any single year. Additional information is available in the Form 10-K filed on April 15, 2015. As a result of these actions, and after additional negotiations, on July 14, 2014 the Company and the stockholder entered into a Confidential Settlement Agreement and General Release with the following terms: Without admitting liability in connection with any of the claims asserted but in order to avoid the expenses and uncertainty of potential litigation the Company agreed: (i) the Company will adopt certain procedures to monitor future issuances of options to management; (ii) the Company will make an installment payment of $20,000 ratably over ten months to counsel for the stockholder who asserted the claim, but none of these funds will be paid to the stockholder; (iii) the Company will issue warrants to counsel for the stockholder exercisable at a predetermined price. In exchange for the foregoing the parties exchanged general releases and this matter is resolved completely. Based on the terms of the settlement, the Company accrued an estimated expense of $86,500, recorded as a trade account payable, at December 31, 2013 and, due to an increase in the underlying valuation of the warrants, an additional accrual of $93,900 for the quarter ended March 31, 2014, for a total expense of $180,400 to recognize the cost of the final settlement. All but $20,000 of this expense was for the non-cash component. The final settlement payment due under the settlement is in default, and as of September 30, 2015 the Company owed approximately $2,000 in a cash installment payment. The Companys executive and administrative offices are located in Toledo, Ohio. In April 2011, the Company signed a 68 month lease with Deerpoint Development Co., Ltd. The total minimum rental commitment for the years 2015 through 2016 is $40,764 each year. The total rental expense included in the statements of operations for each of the nine months and three months ended September 30, 2015 and 2014 is approximately $30,600 and $10,200, respectively. The Company also leases various office equipment on a month-to-month basis. In October 2010, the Company began to lease property in Emlenton, Pennsylvania under a lease with Allegheny-Clarion Valley Development Corporation, for one year. After September 2011, the Company operated under a month-to-month lease agreement, for a reduced rate. The total rental expense included in the statements of operations for each of the nine months and three months ended September 30, 2015 and 2014 is $9,000 and $3,000, respectively. In June 2009, the Company began to maintain an office in West Unity, Ohio under a lease with D&B Colon Leasing, LLC, for one year. In June 2010, the Company renewed the lease for an additional year through May 2011, and operated under a month-to-month lease until the Company closed the office in September 2014. The total rental expense included in the statements of operations for the nine months ended September 30, 2015 and 2014 is $-0- and $22,500, respectively, and for the three months ended September 30, 2015 and 2014 is $-0- and $7,500, respectively. The Company maintained an office in Daytona Beach under a lease with the County of Volusia, Florida, from March 2009 through March 2014. Effective and subsequent to April 2014, the Company briefly operated on a month to month lease with Volusia County, to allow the removal of certain owned assets and finished product from the site as approved by the County. The total rental expense included in the statements of operations for the nine months ended September 30, 2015 and 2014 is $-0- and $15,000, respectively, and for the three months ended September 30, 2015 and 2014 is $-0- and $750, respectively. For the nine months and three months ended September 30, 2015, the Company paid a total of $19,800 and $6,600, respectively, recorded as rent in selling, general and administrative expense on behalf of the Chief Executive Officer. No future commitment exists as the residential building lease is not in the name of the Company, and the Chief Executive Officer has not renewed the lease as of the date of this filing. In September 2014, the Company entered into an operating lease with Caterpillar Financial for operating equipment at its Bradley, Florida location. The lease term is for three years beginning October 2014 and a monthly payment of approximately $3,200. The total minimum rental commitment for each of the years ending December 31, 2015 through 2016 is $37,900 and for the year ending December 31, 2017 is $28,400. The total rental expense included in the statements of operations for the nine months ended September 30, 2015 and 2014 is approximately $28,400 and $-0-, respectively, and for the three months ended September 30, 2015 and 2014 is approximately $9,500 and $-0-, respectively. Management believes that all of the Companys properties are adequately covered by insurance. The Company operates in an environment with many financial risks, including, but not limited to, major customer concentrations, customer contract termination provisions, competing technologies, infringement and/or misappropriation of intellectual property rights, the highly competitive and, at times, seasonal nature of the industry and worldwide economic conditions. Various federal, state and governmental agencies are considering, and some have adopted, laws and regulations regarding environmental protection which could adversely affect the business activities of the Company. The Company cannot predict what effect, if any, current and future regulations may have on the operations of the Company. From time to time the Company is involved in legal proceedings and subject to claims which may arise in the ordinary course of business. Certain unsecured creditors have brought civil action against the Company related to nonpayment. The Company has not accrued any additional amount related to these charges, but continue to negotiate payment plans to satisfy these creditors. |
Note 5. New Accounting Standard
Note 5. New Accounting Standards | 9 Months Ended |
Sep. 30, 2015 | |
Notes | |
Note 5. New Accounting Standards | Note 5. New Accounting Standards In August 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2014-15, Disclosure of Uncertainties About an Entitys Ability to Continue as a Going Concern (ASU 2014-15), which requires management to evaluate, at each annual and interim reporting period, whether there are conditions or events that raise substantial doubt about the entitys ability to continue as a going concern and provide related disclosures. ASU 2014-15 is effective for the first interim period within annual reporting periods beginning after December 15, 2016 and is not expected to have a material impact on the Companys consolidated financial statements. In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (ASU 2014-09), which provides guidance for the recognition, measurement and disclosure of revenue resulting from contracts with customers and will supersede virtually all of the current revenue recognition guidance under GAAP. ASU 2014-09 is effective for the first interim period within annual reporting periods beginning after December 15, 2016. In July 2015, the FASB made a decision to defer the effective date of ASU 2014-09 for one year and permit early adoption as of the original effective date. As a result, the standard is effective for the Company for fiscal and interim periods beginning January 1, 2018. The Company is currently evaluating the impact of the provisions of this standard on our consolidated financial statements. |
Note 6. Segment Information
Note 6. Segment Information | 9 Months Ended |
Sep. 30, 2015 | |
Notes | |
Note 6. Segment Information | Note 6. Segment Information The Company determined that it currently operates in one segment based on the financial information upon which the chief operating decision maker regularly assesses performance and allocates resources. The chief operating decision maker is the Chief Executive Officer. |
Note 7. Revenue and Major Custo
Note 7. Revenue and Major Customers | 9 Months Ended |
Sep. 30, 2015 | |
Notes | |
Note 7. Revenue and Major Customers | Note 7. Revenue and Major Customers The Companys largest customer accounted for approximately 30% and 20% of revenues for the nine months ended September 30, 2015 and 2014, respectively, and approximately 25% and 30% for the three months ended September 30, 2015 and 2014, respectively. For the nine months ended September 30, 2015 and 2014, the top three customers accounted for approximately 74% and 47%, respectively, of the Companys revenues. The accounts receivable balance due (which are unsecured) for these three Florida customers at September 30, 2015 and December 31, 2014 was approximately $59,000 and $132,000, respectively. Florida operations accounted for approximately 96% and 97% of consolidated revenue during the nine months ended September 30, 2015 and 2014, respectively. A substantial portion of the Company's revenue is derived from services provided under contracts and agreements with existing licensees. Some of these contracts, especially those contracts with large municipalities, provide for termination of the contract by the customer after giving relatively short notice (in some cases as little as ten days). In addition, some of these contracts contain liquidated damages clauses, which may or may not be enforceable in the event of early termination of the contracts. If one or more of these contracts are terminated prior to the expiration of its term, and the Company is not able to replace revenues from the terminated contract or receive liquidated damages pursuant to the terms of the contract, the lost revenue could have a material and adverse effect on its business and financial condition. |
Note 8. Basic and Diluted Loss
Note 8. Basic and Diluted Loss Per Share | 9 Months Ended |
Sep. 30, 2015 | |
Notes | |
Note 8. Basic and Diluted Loss Per Share | Note 8. Basic and diluted loss per share Basic and diluted loss per share is computed using the treasury stock method for outstanding stock options and warrants. For the nine months and three months ended September 30, 2015 and 2014 the Company incurred a net loss. Accordingly, no stock options or warrants have been included in the computation of diluted loss per share as the impact would be anti-dilutive. |
Note 9. Common Stock
Note 9. Common Stock | 9 Months Ended |
Sep. 30, 2015 | |
Notes | |
Note 9. Common Stock | Note 9. Common Stock In October 2012, the Company issued 300,000 shares of common stock and granted 150,000 stock warrants to Strategic Asset Management, Inc., or SAMI, to extend the period of services performed in connection with a December 2010 Financial Public Relations Agreement for an additional two years, through December 2015. To reflect the entire value of the stock and warrants issued, the Company was recording a non-cash charge to earnings of $421,300 starting in 2013, over a 36 month period. In July 2015, the Company notified SAMI that it was terminating its contract early, and took a non-cash charge to earnings in the quarter ended June 30, 2015 for the balance of the unamortized cost of the contract. For the nine months ended September 30, 2015 and 2014, the charge to earnings was approximately $125,200 and $102,500, respectively. For the three months ended September 30, 2015 and 2014, the charge to earnings was approximately $-0- and $34,200, respectively. In April 2013, the Company executed a Consulting Agreement with Rakgear, Inc. The Company engaged Rakgear to provide financial consulting services for a term of one year. For its services, the Company issued Rakgear 150,000 shares of the Company's unregistered common stock and 150,000 warrants to purchase unregistered shares of common stock at a price of $1.49 per warrant. To reflect the entire value of the stock issued, the Company recorded a non-cash charge to earnings of $487,900 ratably through March 2014, the ending date of the agreement. For the nine months ended September 30, 2015 and 2014, the charge to earnings was $-0- and $122,000, respectively. For each of the three months ended September 30, 2015 and 2014, there was a $-0- charge to earnings. In September 2014, the Company executed a Financial Public Relations Agreement with Dynasty Wealth, Inc., for a one year term. For its services, the Company issued Dynasty Wealth 350,000 warrants to purchase the Company's unregistered common stock at an exercise price of $1.50 per share, and $10,000 per month, to be paid in either cash or shares of the Companys unregistered common stock at the Companys discretion. To reflect the entire value of the warrants issued, the Company is recording a non-cash charge to earnings of $460,700 ratably through September 14, 2015, the ending date of the agreement. For the nine months ended September 30, 2015 and 2014 the charge to earnings for the entire agreement was approximately $411,300 and $24,200, respectively, of which the non-cash portion of the agreement was approximately $326,300 and $11,400, respectively. For the three months ended September 30, 2015 and 2014 the charge to earnings for the entire agreement was approximately $121,000 and $24,200, respectively, of which the non-cash portion of the agreement was approximately $96,000 and $19,200, respectively. In August 2015, the Company notified Dynasty that it was not renewing its contract. In November 2014, the Company executed a Public Relations Agreement with Global IR Group, Inc., for a one year term. For its services, the Company issued Global IR 100,000 shares of the Companys unregistered common stock. To reflect the entire value of the stock issued, the Company was recording a non-cash charge to earnings of $165,000 ratably through November 19, 2015, the original ending date of the agreement. In July 2015, the Company notified Global IR that it was terminating its contract early, and took a non-cash charge to earnings in the quarter ended June 30, 2015 for the balance of the unamortized cost of the contract. For the nine months ended September 30, 2015 and 2014, the charge to earnings was approximately $146,200 and $-0-, respectively. For both the three months ended September 30, 2015 and 2014, there was a $-0- charge to earnings. In July 2015, the Company executed a Public Relations Agreement with Financial Genetics, LLC, for a one year term. For its services, the Company issued Financial Genetics 100,000 shares of the Companys unregistered common stock. To reflect the entire value of the Agreement, the Company is recording a non-cash charge to earnings of $100,000 ratably through July 2016, the ending date of the agreement. For the nine months and three months ended September 30, 2015 and 2014, the charge to earnings was approximately $20,800 and $-0-, respectively. In April 2015, the Company issued a total of 1,314 shares of unregistered common stock, valued at a total of $3,000, to six independent directors in lieu of cash owed for a board meeting attended. To reflect the value of the stock issued, the Company recorded a charge to earnings totaling $3,000 in the second quarter of 2015. In July 2015, the Company issued a total of 3,935 shares of unregistered common stock, valued at a total of $5,000, to five independent directors in lieu of cash owed for a board meeting attended. To reflect the value of the stock issued, the Company recorded a charge to earnings totaling $5,000 in the third quarter of 2015. Between January and April 2015, the Company entered into share purchase agreements with a total of fourteen Purchasers pursuant to which the Company sold 410,000 shares of its common stock (the Shares) to the Purchasers for a total of $410,000, or a purchase price of $1.00 per share, to provide operating capital. All but 30,000 shares were restricted and have limited piggy-back registration rights in connection with certain registration statement filings of the Company under the Securities Act of 1933 as amended (the Securities Act). The Company issued 30,000 shares in 2015 it held in its treasury. All of the transactions were exempt from the registration requirements under the Securities Act pursuant to section 4(a)(2) as a transaction by an issuer not involving a public offering. In June 2015, the Company entered into share purchase agreement with a Purchaser pursuant to which the Company sold 100,000 shares of its common stock (the Shares) to the Purchaser for a total of $125,000, or a purchase price of $1.25 per share, and 50,000 warrants to purchase stock for $1.50 per share, to provide operating capital. All the shares issued were restricted and have limited piggy-back registration rights in connection with certain registration statement filings of the Company under the Securities Act of 1933 as amended (the Securities Act). The transaction was exempt from the registration requirements under the Securities Act pursuant to section 4(a)(2) as a transaction by an issuer not involving a public offering. In June 2015, the Company issued a consultant 13,028 shares of registered common stock on the exercise of 22,400 warrants that were issued in 2010. The exercise did not provide the Company with cash as they were cashless per the agreements involved providing for the warrants and subsequent stock issuance. In June 2015, the Company issued Deerpoint Development Company Ltd., the landlord of its administrative office, 16,106 shares of unregistered common stock at a price of $1.43 per share in exchange for six months rent, resulting in net additional expense of approximately $2,700 above the contracted amount, but saving approximately $20,400 of cash. In June 2015, the Company issued D&B Colon Leasing, LLC, the landlord of a former satellite office, 20,997 shares of unregistered common stock at a price of $1.48 per share in exchange for the remaining eleven months rent owed, resulting in net additional expense of approximately $3,600 above the contracted amount, but saving $27,500 of cash. |
Note 10. Stock Options
Note 10. Stock Options | 9 Months Ended |
Sep. 30, 2015 | |
Notes | |
Note 10. Stock Options | Note 10. Stock Options The Company records compensation expense for stock options based on the estimated fair value of the options on the date of grant using the Black-Scholes valuation model. The Company uses historical data among other factors to estimate the expected price volatility, the expected option term and the expected forfeiture rate. The risk-free rate is based on the U.S. Treasury yield curve in effect at the date of grant for the expected term of the option. The Company has a stock option plan approved in May 2004, amended in June 2008 and again in August 2009 (the 2004 Plan), for directors and key employees under which 2,500,000 shares of common stock could have been issued. No other shares can be issued from the 2004 Plan, and approximately 1,624,000 options are outstanding as of September 30, 2015. The Company also has a stock option plan approved in July 2010 (the 2010 Plan), for directors and key employees under which 5,000,000 shares of common stock may be issued. Approximately 1,018,000 options are outstanding as of September 30, 2015. Unless otherwise stated in the stock option agreement, options are 20% vested on the date of grant, with the balance vesting 20% per year over the next four years, except for directors whose options vest six months from the date of grant. Options were granted in 2015 only from the 2010 Plan at the market value of the stock at date of grant, as defined in the plan. The Company grants stock options to its directors as compensation for services performed. All of the options granted are for a period of ten years from the date of issuance, are pursuant to the 2010 Plan, and vest six (6) months from the issuance date. Stock option grants related to the periods covered by these financial statements include the issuance of 197,500 options from December 2013 through July 2015. These options are exercisable at prices ranging from $0.76 to $2.28. To reflect the value of the stock options granted, the Company records a non-cash charge to earnings totaling $254,500 over the requisite vesting period in selling, general and administrative expense. For the nine and three months ended September 30, 2015, the Company recorded an expense of approximately $98,300 and $30,800, respectively. For the nine and three months ended September 30, 2014, the Company recorded an expense of approximately $77,500 and $32,200, respectively. |
Note 11. Stock Warrants
Note 11. Stock Warrants | 9 Months Ended |
Sep. 30, 2015 | |
Notes | |
Note 11. Stock Warrants | Note 11. Stock Warrants The Company records compensation expense for stock warrants based on the estimated fair value of the warrants on the date of grant using the Black-Scholes valuation model. The Company uses historical data among other factors to estimate the expected price volatility, the expected warrant term and the expected forfeiture rate. The risk-free rate is based on the U.S. Treasury yield curve in effect at the date of grant for the expected term of the warrant. In June 2015, the Company issued 50,000 warrants in connection with the private placement of stock to a Purchaser. More details can be found in Note 9, Common Stock. |
Note 12. Income Tax
Note 12. Income Tax | 9 Months Ended |
Sep. 30, 2015 | |
Notes | |
Note 12. Income Tax | Note 12. Income Tax For the nine months and three months ended September 30, 2015 and 2014, we are fully reserving our deferred tax asset value to zero as we have not recognized the future tax benefit of current or prior period losses due to our history of operating losses. Accordingly, our effective tax rate for each period was -0-%. |
Note 13. Non-cash Disclosures
Note 13. Non-cash Disclosures | 9 Months Ended |
Sep. 30, 2015 | |
Notes | |
Note 13. Non-cash Disclosures | Note 13. Non-Cash Disclosures During the nine months ended September 30, 2015, the Company issued common stock with a fair value of $100,000 as part of a consulting contract. During the nine months ended September 30, 2015, the Company issued common stock with a fair value of $91,260 as part of a conversion of debentures. During the nine months ended September 30, 2015, the Company issued common stock with a fair value of $54,107 for the payment of accrued rent. During the nine months ended September 30, 2015 and 2014, the Company recorded a deemed dividend of $15,000 and $502,890, respectively, on the issuance of stock and exercise of warrants. During the nine months ended September 30, 2014, the Company issued common stock with a fair value of $460,700 as part of a consulting contract. During the nine months ended September 30, 2014, the Company entered into a capitalized lease with a present value of $420,346 During the nine months ended September 30, 2014, the Company issued common stock with a fair value of $55,000 as conversions of debt to equity. During the nine months ended September 30, 2014, the Company recorded an account receivable of $25,000 for the sale of a fixed asset. |
Note 14. Subsequent Events
Note 14. Subsequent Events | 9 Months Ended |
Sep. 30, 2015 | |
Notes | |
Note 14. Subsequent Events | Note 14. Subsequent Events In October 2015, the Company entered into share purchase agreements with a total of four Purchasers pursuant to which the Company sold 56,000 shares of its common stock (the Shares) to the Purchasers for a total of $70,000, or a purchase price of $1.25 per share, and 28,000 warrants to purchase stock for $1.50 per share, to provide operating capital. All shares were restricted and have limited piggy-back registration rights in connection with certain registration statement filings of the Company under the Securities Act of 1933 as amended (the Securities Act). All of the transactions were exempt from the registration requirements under the Securities Act pursuant to section 4(a)(2) as a transaction by an issuer not involving a public offering. In October 2015, the Company approved a plan to modify all Company warrants by extending the time to exercise each outstanding warrant by one (1) year. All other terms and conditions of each class of warrant remain unchanged. In total, 2,679,742 warrants were affected by the expiration date extension. More information can be found in the Form 8-K filed by the Company on October 26, 2015. |
Note 1. Organization and Basi20
Note 1. Organization and Basis of Presentation: Consolidation Policy (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Policies | |
Consolidation Policy | The financial statements are consolidated as of September 30, 2015, December 31, 2014 and September 30, 2014 for the Company. All intercompany transactions were eliminated. |
Note 1. Organization and Basi21
Note 1. Organization and Basis of Presentation: Basis of Accounting, Policy (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Policies | |
Basis of Accounting, Policy | In preparing financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. There have been no changes in the selection and application of significant accounting policies and estimates disclosed in Item 8 Financial Statements and Supplementary Data of our Annual Report on Form 10-K for the year ended December 31, 2014. |
Note 1. Organization and Basi22
Note 1. Organization and Basis of Presentation: Substantial Doubt about Going Concern (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Policies | |
Substantial Doubt about Going Concern | The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company has negative working capital of approximately $1,833,000 at September 30, 2015 and has incurred recurring losses and negative cash flows from operations. Moreover, while the Company hopes to arrange for substitute financing arrangements for the line of credit that was closed during 2014, there can be no assurance that additional financing will be available. The Company has funded its cash losses with principally new equity issuances and expects to be able to generate future cash from the exercise of common stock warrants and continued new equity issuances, though there can be no assurance given that such issuances or exercises will be realized. From April 2014 through October 2015, the Company issued stock for private placements, warrant and stock option exercises that realized a net total of approximately $1,430,000. The Company has also continued to slow payments to trade vendors, and has renegotiated payment terms with several existing and prior vendors to lengthen the time and/or reduce the amount of cash to repay these trade payables. These factors raise substantial doubt as to the Companys ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. |
Note 3. Capital Lease_ Lease, P
Note 3. Capital Lease: Lease, Policy (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Policies | |
Lease, Policy | The economic substance of the lease is the Company is financing the acquisition of the asset through the lease, and accordingly, it is recorded in the Companys assets and liabilities. Assets and liabilities under capital leases initially are recorded at the lower of present value of the minimum lease payments or the fair value of the assets. The assets are depreciated over the shorter of the lease term or their estimated useful lives. |
Note 4. Commitments and Conti24
Note 4. Commitments and Contingencies: Legal Costs, Policy (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Policies | |
Legal Costs, Policy | From time to time the Company is involved in legal proceedings and subject to claims which may arise in the ordinary course of business. Certain unsecured creditors have brought civil action against the Company related to nonpayment. The Company has not accrued any additional amount related to these charges, but continue to negotiate payment plans to satisfy these creditors. |
Note 5. New Accounting Standa25
Note 5. New Accounting Standards: New Accounting Pronouncements, Policy (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Policies | |
New Accounting Pronouncements, Policy | ASU 2014-15 is effective for the first interim period within annual reporting periods beginning after December 15, 2016 and is not expected to have a material impact on the Companys consolidated financial statements. |
Note 6. Segment Information_ Se
Note 6. Segment Information: Segment Reporting Policy (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Policies | |
Segment Reporting Policy | The Company determined that it currently operates in one segment based on the financial information upon which the chief operating decision maker regularly assesses performance and allocates resources. The chief operating decision maker is the Chief Executive Officer. |
Note 7. Revenue and Major Cus27
Note 7. Revenue and Major Customers: Major Customers, Policy (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Policies | |
Major Customers, Policy | A substantial portion of the Company's revenue is derived from services provided under contracts and agreements with existing licensees. Some of these contracts, especially those contracts with large municipalities, provide for termination of the contract by the customer after giving relatively short notice (in some cases as little as ten days). In addition, some of these contracts contain liquidated damages clauses, which may or may not be enforceable in the event of early termination of the contracts. If one or more of these contracts are terminated prior to the expiration of its term, and the Company is not able to replace revenues from the terminated contract or receive liquidated damages pursuant to the terms of the contract, the lost revenue could have a material and adverse effect on its business and financial condition. |
Note 8. Basic and Diluted Los28
Note 8. Basic and Diluted Loss Per Share: Earnings Per Share Policy, Diluted (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Policies | |
Earnings Per Share Policy, Diluted | Basic and diluted loss per share is computed using the treasury stock method for outstanding stock options and warrants. For the nine months and three months ended September 30, 2015 and 2014 the Company incurred a net loss. Accordingly, no stock options or warrants have been included in the computation of diluted loss per share as the impact would be anti-dilutive. |
Note 10. Stock Options_ Share-b
Note 10. Stock Options: Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Method Used (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Policies | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Method Used | The Company records compensation expense for stock options based on the estimated fair value of the options on the date of grant using the Black-Scholes valuation model. The Company uses historical data among other factors to estimate the expected price volatility, the expected option term and the expected forfeiture rate. The risk-free rate is based on the U.S. Treasury yield curve in effect at the date of grant for the expected term of the option. |
Note 10. Stock Options_ Share30
Note 10. Stock Options: Share-based Compensation, Option and Incentive Plans Policy (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Policies | |
Share-based Compensation, Option and Incentive Plans Policy | The Company has a stock option plan approved in May 2004, amended in June 2008 and again in August 2009 (the 2004 Plan), for directors and key employees under which 2,500,000 shares of common stock could have been issued. No other shares can be issued from the 2004 Plan, and approximately 1,624,000 options are outstanding as of September 30, 2015. The Company also has a stock option plan approved in July 2010 (the 2010 Plan), for directors and key employees under which 5,000,000 shares of common stock may be issued. Approximately 1,018,000 options are outstanding as of September 30, 2015. Unless otherwise stated in the stock option agreement, options are 20% vested on the date of grant, with the balance vesting 20% per year over the next four years, except for directors whose options vest six months from the date of grant. Options were granted in 2015 only from the 2010 Plan at the market value of the stock at date of grant, as defined in the plan. |
Note 10. Stock Options_ Share31
Note 10. Stock Options: Share-based Compensation, Option and Incentive Plans, Director Policy (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Policies | |
Share-based Compensation, Option and Incentive Plans, Director Policy | The Company grants stock options to its directors as compensation for services performed. All of the options granted are for a period of ten years from the date of issuance, are pursuant to the 2010 Plan, and vest six (6) months from the issuance date. |
Note 11. Stock Warrants_ Share-
Note 11. Stock Warrants: Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Other, Description (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Policies | |
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Other, Description | The Company records compensation expense for stock warrants based on the estimated fair value of the warrants on the date of grant using the Black-Scholes valuation model. The Company uses historical data among other factors to estimate the expected price volatility, the expected warrant term and the expected forfeiture rate. The risk-free rate is based on the U.S. Treasury yield curve in effect at the date of grant for the expected term of the warrant. |
Note 12. Income Tax_ Income Tax
Note 12. Income Tax: Income Tax, Policy (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Policies | |
Income Tax, Policy | For the nine months and three months ended September 30, 2015 and 2014, we are fully reserving our deferred tax asset value to zero as we have not recognized the future tax benefit of current or prior period losses due to our history of operating losses. Accordingly, our effective tax rate for each period was -0-%. |
Note 2. Notes Payable (Details)
Note 2. Notes Payable (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2015 | Feb. 01, 2016 | Dec. 31, 2014 | Sep. 30, 2014 | |
Debt Instrument, Interest Rate, Stated Percentage | 7.10% | 7.10% | |||
Repayments of Secured Debt | $ 2,100 | ||||
Secured Debt, Other | $ 12,300 | $ 12,300 | $ 29,900 | ||
Short-term Debt, Percentage Bearing Fixed Interest Rate | 8.40% | 8.40% | |||
Repayments of Unsecured Debt | $ 5,400 | ||||
Unsecured Debt, Current | 21,100 | $ 21,100 | |||
Stock Issued During Period, Value, Conversion of Convertible Securities | $ 91,260 | ||||
Stock Issued During Period, Shares, Conversion of Convertible Securities | 45,630 | ||||
Convertible Debt, current | 365,000 | $ 365,000 | 455,000 | ||
Central States Southeast and Southwest Areas Pension Fund | |||||
Liabilities Subject to Compromise, Pension and Other Postretirement Obligations | $ 425,112 | $ 425,112 | 389,389 | $ 415,000 | |
Debt Instrument, Periodic Payment Terms, Balloon Payment to be Paid | $ 312,000 | ||||
Debt Instrument, Interest Rate, Effective Percentage | 5.25% | 5.25% | |||
David and Edna Kasmoch | |||||
Related Party Transaction, Rate | 12.00% | ||||
Notes Payable, Related Parties | $ 200,000 | $ 200,000 | $ 200,000 | ||
Debt Default, Short-term Debt, Description of Notice of Default | In September 2015, the Company received a demand letter from counsel for the Note holder declaring a default under the Note. Counsel demanded payment of the entire amount due under the Note, along with accrued interest and penalties. The Company is in negotiations with counsel and their client to resolve this default, although there can be no assurance these negotiations will be successful. |
Note 3. Capital Lease (Details)
Note 3. Capital Lease (Details) - Bowling Green Holdings, LLC - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | Jun. 01, 2014 | |
Debt Instrument, Debt Default, Description of Notice of Default | In September 2015, the Company received a demand letter from counsel for the lessor declaring a default under the lease. Counsel demanded payment of several months of accrued rent in arrears under the lease, together with penalties. The Company is in negotiations with counsel and their client to resolve this default, although there can be no assurance these negotiations will be successful. | |||||
Capital Lease Obligations | $ 375,400 | $ 375,400 | $ 405,900 | $ 420,346 | ||
Capital Leases, Income Statement, Amortization Expense | 21,000 | $ 21,000 | 63,000 | $ 28,000 | ||
Capital Leases, Income Statement, Interest Expense | $ 13,100 | $ 15,400 | $ 41,000 | $ 20,700 |
Note 4. Commitments and Conti36
Note 4. Commitments and Contingencies (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Sep. 30, 2015 | Sep. 30, 2014 | Mar. 31, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2014 | |
Due to Officers or Stockholders, Current | $ 246,000 | $ 246,000 | |||||||
Litigation Settlement, Expense | $ 93,900 | $ 180,400 | |||||||
Settlement Liabilities, Current | 2,000 | 2,000 | |||||||
Deerpoint Development Co., Ltd. | |||||||||
Operating Leases, Rent Expense, Minimum Rentals | $ 40,764 | $ 40,764 | |||||||
Operating Leases, Rent Expense, Net | 30,600 | $ 10,200 | 30,600 | $ 10,200 | |||||
Allegheny-Clarion Valley Development Corporation | |||||||||
Operating Leases, Rent Expense, Net | 3,000 | 3,000 | 9,000 | 9,000 | |||||
D&B Colon Leasing, LLC | |||||||||
Operating Leases, Rent Expense, Net | 0 | 7,500 | 0 | 22,500 | |||||
County of Volusia, Florida | |||||||||
Operating Leases, Rent Expense, Net | 0 | 750 | 0 | 15,000 | |||||
Caterpillar Financial | |||||||||
Operating Leases, Rent Expense, Minimum Rentals | $ 28,400 | $ 37,900 | 37,900 | ||||||
Operating Leases, Rent Expense, Net | 9,500 | $ 0 | 28,400 | $ 0 | |||||
Timothy R. Kasmoch | |||||||||
Officers' Compensation | 150,000 | ||||||||
Operating Leases, Rent Expense, Net | $ 6,600 | $ 19,800 | |||||||
Robert W. Bohmer | |||||||||
Officers' Compensation | 57,200 | ||||||||
James K. McHugh | |||||||||
Officers' Compensation | $ 125,000 |
Note 7. Revenue and Major Cus37
Note 7. Revenue and Major Customers (Details) | 9 Months Ended |
Sep. 30, 2015 | |
Details | |
Concentration Risk, Customers | The Company’s largest customer accounted for approximately 30% and 20% of revenues for the nine months ended September 30, 2015 and 2014, respectively, and approximately 25% and 30% for the three months ended September 30, 2015 and 2014, respectively. For the nine months ended September 30, 2015 and 2014, the top three customers accounted for approximately 74% and 47%, respectively, of the Company’s revenues. The accounts receivable balance due (which are unsecured) for these three Florida customers at September 30, 2015 and December 31, 2014 was approximately $59,000 and $132,000, respectively. Florida operations accounted for approximately 96% and 97% of consolidated revenue during the nine months ended September 30, 2015 and 2014, respectively. |
Note 9. Common Stock (Details)
Note 9. Common Stock (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 4 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Oct. 31, 2015 | Jun. 30, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Apr. 30, 2015 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2013 | |
Noninterest Expense Directors Fees | $ 5,000 | $ 3,000 | ||||||||
Sale of Stock, Number of Shares Issued in Transaction | 56,000 | 100,000 | 410,000 | |||||||
Proceeds from Sale of Restricted Stock | $ 70,000 | $ 125,000 | $ 410,000 | |||||||
Sale of Stock, Price Per Share | $ 1.25 | $ 1.25 | $ 1.25 | $ 1 | ||||||
Stock Issued During Period, Shares, Treasury Stock Reissued | 30,000 | |||||||||
Deerpoint Development Co., Ltd. | ||||||||||
Stock Issued During Period, Shares, Other | 16,106 | |||||||||
Shares Issued, Price Per Share | 1.43 | 1.43 | ||||||||
Stock Issued During Period, Value, Other | $ 20,400 | |||||||||
D&B Colon Leasing, LLC | ||||||||||
Stock Issued During Period, Shares, Other | 20,997 | |||||||||
Shares Issued, Price Per Share | $ 1.48 | $ 1.48 | ||||||||
Stock Issued During Period, Value, Other | $ 27,500 | |||||||||
Strategic Asset Management, Inc. | ||||||||||
Share-based Goods and Nonemployee Services Transaction, Capitalized Cost | $ 421,300 | |||||||||
Issuance of Stock and Warrants for Services or Claims | 0 | $ 34,200 | 125,200 | $ 102,500 | ||||||
Rakgear, Inc. | ||||||||||
Share-based Goods and Nonemployee Services Transaction, Capitalized Cost | $ 487,900 | |||||||||
Issuance of Stock and Warrants for Services or Claims | 0 | 0 | 0 | 122,000 | ||||||
Dynasty Wealth, Inc. | ||||||||||
Share-based Goods and Nonemployee Services Transaction, Capitalized Cost | 460,700 | |||||||||
Issuance of Stock and Warrants for Services or Claims | 96,000 | 19,200 | 326,300 | 11,400 | ||||||
Global IR Group, Inc. | ||||||||||
Share-based Goods and Nonemployee Services Transaction, Capitalized Cost | $ 165,000 | |||||||||
Issuance of Stock and Warrants for Services or Claims | 0 | 0 | 146,200 | 0 | ||||||
Financial Genetics, LLC | ||||||||||
Share-based Goods and Nonemployee Services Transaction, Capitalized Cost | 100,000 | |||||||||
Issuance of Stock and Warrants for Services or Claims | $ 20,800 | $ 0 | $ 20,800 | $ 0 |
Note 10. Stock Options_ Share39
Note 10. Stock Options: Share-based Compensation, Option and Incentive Plans Policy (Details) | Sep. 30, 2015shares |
The 2004 Stock Option Plan | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 1,624,000 |
The 2010 Stock Option Plan | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 1,018,000 |
Note 10. Stock Options (Details
Note 10. Stock Options (Details) | 9 Months Ended |
Sep. 30, 2015 | |
Details | |
Schedule of Share-based Compensation, Nonemployee Director Stock Award Plan, Activity | Stock option grants related to the periods covered by these financial statements include the issuance of 197,500 options from December 2013 through July 2015.  These options are exercisable at prices ranging from $0.76 to $2.28.  To reflect the value of the stock options granted, the Company records a non-cash charge to earnings totaling $254,500 over the requisite vesting period in selling, general and administrative expense.  For the nine and three months ended September 30, 2015, the Company recorded an expense of approximately $98,300 and $30,800, respectively.  For the nine and three months ended September 30, 2014, the Company recorded an expense of approximately $77,500 and $32,200, respectively. |
Note 12. Income Tax_ Income T41
Note 12. Income Tax: Income Tax, Policy (Details) | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Details | ||
Effective Income Tax Rate Reconciliation, Percent | 0.00% | 0.00% |
Note 14. Subsequent Events (Det
Note 14. Subsequent Events (Details) - USD ($) | 1 Months Ended | 4 Months Ended | ||
Oct. 31, 2015 | Jun. 30, 2015 | Apr. 30, 2015 | Oct. 26, 2015 | |
Details | ||||
Sale of Stock, Number of Shares Issued in Transaction | 56,000 | 100,000 | 410,000 | |
Proceeds from Sale of Restricted Stock | $ 70,000 | $ 125,000 | $ 410,000 | |
Sale of Stock, Price Per Share | $ 1.25 | $ 1.25 | $ 1 | |
Class of Warrant or Right, Outstanding | 2,679,742 |