Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Apr. 04, 2016 | Jun. 30, 2015 | |
Document and Entity Information: | |||
Entity Registrant Name | N-Viro International Corporation | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 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 | 8,929,826 | ||
Entity Public Float | $ 6,940,000 | ||
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 | FY |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Assets, Current | ||
Cash and Cash Equivalents - Unrestricted | $ 82,201 | $ 81,854 |
Cash and Cash Equivalents - Restricted | 0 | 65,529 |
Accounts Receivable, Net, Current | 80,823 | 140,070 |
Other Receivable, net | 0 | 51,912 |
Prepaid Expense, Current | 82,121 | 79,719 |
Deferred Costs, Current | 54,167 | 597,789 |
Assets, Current | 299,312 | 1,016,873 |
Assets, Noncurrent | ||
Property and equipment, net | 492,976 | 998,852 |
Deposits Assets, Noncurrent | 20,027 | 27,319 |
Assets, Noncurrent | 513,003 | 1,026,171 |
Total Assets | 812,315 | 2,043,044 |
Liabilities, Current | ||
Accounts Payable | 817,018 | 716,680 |
Short-term convertible Note | 43,575 | 0 |
Notes Payable, Current | 39,012 | 63,186 |
Capital Lease Obligations, Current | 133,436 | 86,652 |
Notes Payable, Related Parties, Current | 200,000 | 244,480 |
Convertible Debt, Current | 365,000 | 455,000 |
Pension and Other Postretirement Defined Benefit Plans, Current Liabilities | 408,031 | 68,917 |
Accrued liabilities | 319,625 | 320,207 |
Liabilities, Current | 2,325,697 | 1,955,122 |
Liabilities, Noncurrent | ||
Notes Payable, Noncurrent | 0 | 6,182 |
Capital lease liability - long-term, less current maturities, in default | 242,000 | 320,472 |
Pension plan withdrawal liability, Noncurrent | 0 | 319,278 |
Liabilities, Noncurrent | 242,000 | 645,932 |
Total Liabilities | 2,567,697 | 2,601,054 |
Commitments and Contingencies | 0 | 0 |
Stockholders' Deficit | ||
Preferred stock, value | 0 | 0 |
Common stock, value | 89,117 | 81,668 |
Additional Paid in Capital | 33,538,262 | 32,103,596 |
Accumulated Deficit | (35,371,670) | (32,565,813) |
Treasury stock, at cost | 11,091 | 177,461 |
Total Stockholders' Deficit | (1,755,382) | (558,010) |
Total Liabilities and Stockholders'' Deficit | $ 812,315 | $ 2,043,044 |
CONSOLIDATED BALANCE SHEETS - P
CONSOLIDATED BALANCE SHEETS - Parenthetical - $ / shares | Dec. 31, 2015 | Dec. 31, 2014 |
Consolidated Balance Sheets | ||
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 | 8,911,714 | 8,166,789 |
Common Stock, Shares Outstanding | 8,909,714 | 8,134,789 |
Treasury Stock, at cost - Shares | 2,000 | 32,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Consolidated Statements of Operations | ||
REVENUES | $ 1,187,296 | $ 1,330,583 |
COST OF REVENUES | 1,244,055 | 1,566,018 |
GROSS PROFIT (LOSS) | (56,759) | (235,435) |
Operating Expenses | ||
Selling, General and Administrative | 1,719,731 | 1,474,082 |
Impairment of assets | 304,936 | 42,653 |
Loss (gain) on disposal of assets | 18,008 | (141,197) |
Total Operating Expenses | 2,042,675 | 1,375,538 |
OPERATING LOSS | (2,099,434) | (1,610,973) |
Other Income (Expense) | ||
Gain on extinguishment of liabilities | 0 | 15,478 |
Interest income | 87 | 190 |
Income (Loss) from Equity Method Investments | 0 | (10,000) |
Interest expense | (174,916) | (155,059) |
Total other income (expense) | (174,829) | (149,391) |
LOSS BEFORE INCOME TAXES | (2,274,263) | (1,760,364) |
Federal and state income taxes | 0 | 0 |
NET LOSS | $ (2,274,263) | $ (1,760,364) |
Earnings Per Share | ||
Basic and diluted loss per share | $ (0.26) | $ (0.24) |
Weighted Average Common Shares Outstanding, Basic and Diluted | 8,592,489 | 7,318,480 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT - USD ($) | Common Stock | Additional Paid-in Capital | Retained Earnings | Treasury Stock | Total |
Stockholders' Equity (Deficit) at Dec. 31, 2013 | $ 70,475 | $ 29,864,113 | $ (29,886,630) | $ (684,890) | $ (636,932) |
Shares, Outstanding at Dec. 31, 2014 | 8,166,789 | ||||
Shares, Outstanding at Dec. 31, 2013 | 7,047,521 | ||||
Issuance of common stock, Value | $ 7,439 | 663,368 | $ 670,807 | ||
Stock Issued During Period, Shares, New Issues | 743,902 | 604,650 | |||
Share-based compensation expense, Value | $ 1,254 | 948,798 | $ 950,052 | ||
Share-based compensatione expense, Shares | 125,357 | ||||
Stock Issued During Period in lieu of rent | $ 2,500 | 119,677 | 122,177 | ||
Exercise of stock warrants, Shares | 250,009 | ||||
Deemed dividend on extension of stock warrants | 502,890 | (502,890) | |||
Sale of treasury stock | (415,929) | 507,429 | 91,500 | ||
Exercise of stock options, Value | 4,750 | 4,750 | |||
Net Loss | (1,760,364) | (1,760,364) | |||
Stockholders' Equity (Deficit) at Dec. 31, 2014 | $ 81,668 | 32,103,596 | (32,565,813) | (177,461) | (558,010) |
Shares, Outstanding at Dec. 31, 2015 | 8,911,714 | ||||
Shares, Outstanding at Dec. 31, 2014 | 8,166,789 | ||||
Issuance of common stock, Value | $ 6,187 | 712,445 | 718,632 | ||
Stock Issued During Period, Shares, New Issues | 618,733 | ||||
Share-based compensation expense, Value | $ 1,094 | 242,128 | 243,222 | ||
Share-based compensatione expense, Shares | 109,414 | ||||
Stock Issued During Period in lieu of rent | $ 130 | (130) | 0 | ||
Exercise of stock warrants, Shares | 13,028 | ||||
Deemed dividend on extension of stock warrants | 395,224 | (395,224) | |||
Beneficial conversion feature on convertible debt | 83,000 | 83,000 | |||
Sale of treasury stock | (136,370) | 166,370 | 30,000 | ||
Exercise of stock options, Value | $ 38 | 1,999 | 2,037 | ||
Exercise of stock options, Shares | 3,750 | ||||
Net Loss | (2,274,263) | (2,274,263) | |||
Stockholders' Equity (Deficit) at Dec. 31, 2015 | $ 89,117 | $ 33,538,262 | $ (35,371,670) | $ (11,091) | $ (1,755,382) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Cash Flows From Operating Activities | ||
Net Loss | $ (2,274,263) | $ (1,760,364) |
Adjustments to reconcile net loss to cash used in operating activities | ||
Depreciation and amortization | 225,613 | 187,686 |
Amortization of debt discount | 5,575 | 0 |
Issuance of stock, stock options and warrants for sevices | 786,898 | 696,628 |
Loss on equity investment in affiliate | 0 | (10,000) |
Provision for bad debts | 15,569 | 0 |
Impairment of assets | 304,936 | 42,653 |
Gain on the sale of fixed assets | (18,008) | 141,197 |
Changes in Operating Assets and Liabilities | ||
Decrease (increase) in trade receivables | (49,982) | (170,708) |
Decrease (increase) in prepaid expenses and other assets | (14,890) | (22,975) |
Increase (decrease) in accounts payable and accrued liabilities | 170,801 | 121,430 |
Increase (decrease) in pension withdrawal liability | 2,965 | (15,284) |
Net Cash Used in Operating Activities | (679,026) | (664,765) |
Cash Flows From Investing Activities | ||
Purchases of property and equipment | 42,681 | 41,375 |
Proceeds from sale of Property and Equipment | 45,608 | 182,446 |
Increases in (decreases to) restricted cash | (65,529) | (1,063) |
Collections on note receivable | 0 | 895 |
Net Cash Provided by Investing Activities | 68,456 | 143,029 |
Cash Flows From Financing Activities | ||
Net repayments on line of credit | 0 | (218,000) |
Borrowngs under long-term debt | 83,734 | 128,054 |
Convertible debt issued, net of OID | 121,000 | 0 |
Principal payments on long-term obligations | (144,585) | (188,020) |
Payment of debt issuance costs | 10,000 | 0 |
Principal borrowings from (payments on) Notes Payable - related party | (44,480) | 44,480 |
Proceeds from Issuance of Common Stock | 603,265 | 696,030 |
Proceeds from stock options exercised | 1,983 | 4,750 |
Proceeds from Warrant Exercises | 0 | 121,952 |
Net cash provided by financing activities | 610,917 | 589,246 |
Net Increase (Decrease) in Cash and Cash Equivalents | 347 | 67,510 |
Cash and Cash Equivalents - Beginning | 81,854 | 14,344 |
Cash and Cash Equivalents - Ending | 82,201 | 81,854 |
Supplemental disclosure of cash flows information: | ||
Cash paid during the year for interest | $ 107,060 | $ 106,546 |
Note 1. Operations and Summary
Note 1. Operations and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2015 | |
Notes | |
Note 1. Operations and Summary of Significant Accounting Policies | Note 1. Operations and Summary of Significant Accounting Policies The following is a summary of certain accounting policies followed in the preparation of these financial statements. The policies conform to generally accepted accounting principles and have been consistently applied in the preparation of the financial statements: A. Nature of Business – The Company owns and licenses the N-Viro Process, a patented technology to treat and recycle wastewater sludges and other bio-organic wastes, utilizing certain alkaline by-products produced by the cement, lime, electric utilities and other industries. Revenue and the related accounts receivable are due from companies acting as independent agents or licensees, principally municipalities. B. Use of Estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. C. Principles of Consolidation – The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. D. 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 $2,026,000 at December 31, 2015, and has incurred recurring losses and negative cash flow from operations for the years ended December 31, 2015 and 2014. Moreover, while the Company expects to arrange for financing with lending institutions, there can be no assurances that the Company will have the ability to do so. The Company has borrowed money from third parties and related parties and expects to be able to generate future cash from the exercise of common stock warrants, new debt and equity issuances. The Company has substantially slowed payments to trade vendors, and have 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. In 2013, 2014 and again in 2015 the Company modified all outstanding warrants to enhance their exercisability and realized a total of $246,000 in exercises in 2013 and 2014. In October 2015, the Company extended the expiration date of all outstanding warrants for exactly one year. Beginning in March 2014, our operations in Volusia County, Florida, which at the time now represented substantially all revenue, were voluntarily delayed while the Company employed additional personnel and moved assets to its new site in Bradley, Florida. While operations resumed in Bradley in June 2014, this reduction in revenue materially reduced available cash to fund current or prior expenses incurred. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. E. Cash and Cash Equivalents – The Company has cash on deposit primarily in one financial institution which, at times, may be in excess of FDIC insurance limits. For purposes of the statements of cash flows, the Company considers all certificates of deposit with initial maturities of 90 days or less to be cash equivalents. Restricted cash consists of one certificate of deposit and corresponding accrued interest which was held as collateral with a performance bond on behalf of one of the Company’s licensees at December 31, 2014. The restricted cash performance bond was released by the Company’s licensee due to the completion of the contract period in September 2015. F. Accounts Receivable – The Company extends unsecured credit to customers under normal trade agreements, which require payment within 30 days. Accounts greater than 90 days past due amounted to $326 and $99,179 of receivables for the years ended December 31, 2015 and 2014, respectively. The Company's policy is not to accrue and record interest income on past due trade receivables. The Company does bill the customer finance charges on past due accounts and records the interest income when collected. Credit is generally granted on an unsecured basis. Periodic credit evaluations of customers are conducted and appropriate allowances are established. Management estimates an allowance for doubtful accounts, which was $32,847 at December 31, 2015 and $116,260 at December 31, 2014. The estimate is based upon management’s review of delinquent accounts and an assessment of the Company’s historical evidence of collections. G. Property and Equipment – Property, machinery and equipment are stated at cost less accumulated depreciation. Depreciation has been computed primarily by the straight-line method over the estimated useful lives of the assets. Generally, useful lives are five to fifteen years. Leasehold improvements are capitalized and amortized over the lesser of the term of the lease or the estimated useful life of the asset. Depreciation expense amounted to $225,613 and $179,743 in 2015 and 2014, respectively. Management has reviewed property and equipment for impairment when events and circumstances indicate that the assets might be impaired and the carrying values of those assets may not be recoverable. During 2015, the Company determined the fair value of property and equipment was less than the carrying amount reflected on the balance sheet, and recorded a non-cash impairment charge of $304,936 to reduce the carrying value of these assets to their estimated fair value of $188,300. Fair values of the property and equipment were estimated using a market approach, considering the estimated fair values of other comparable property and equipment (Level 3 inputs). In May 2015 the Company lost their energy partner to develop their N-Viro Fuel TM H. Intangible Assets – Intangible assets are comprised of patent costs, territory rights and customer licenses/contracts amortized on a straight line basis over their estimated useful lives (ranging from 18 months to 17 years). Amortization expense amounted to $-0- in 2015 and $7,941 in 2014. During 2014, the Company determined the fair value of the intangible assets were less than the amount reflected in the balance sheet, and recorded a non-cash impairment charge of $42,653 to reduce the carrying value of these assets to their estimated fair value of zero. The reason for the impairment of intangible assets in the third quarter of 2014 was primarily due to declines in revenue associated with these assets. I. Equity Method Investment – During the year ended December 31, 2014, the Company entered into a subscription agreement with N-Viro Energy Limited representing an approximately 45% interest in the class C voting shares. The Company’s 2014 loss includes a loss of $10,000 related to the operations of N-Viro Energy Limited. The loss reduced the Company’s investment in N-Viro Limited to zero and, as a result, the Company discontinued applying the equity method. The Company will resume application of the equity method only after its share of future earnings of N-Viro Energy Limited are sufficient to recover its share of unrecognized losses during the period the equity method was suspended. The Company has no obligation to fund future operations of N-Viro Energy Limited. J. Revenue Recognition – Sludge processing revenue and royalty fees are recognized under contracts where the Company or licensees utilize the N Viro Process to treat sludge, either pursuant to a fixed-price contract or based on volumes of sludge processed. Revenue is recognized as services are performed. Alkaline admixture management service revenue and N-Viro Soil TM K. Loss Per Common Share – Loss per common share has been computed on the basis of the weighted-average number of common shares outstanding during each period presented. For the years ended December 31, 2015 and 2014, the effects of 2,640,231 and 2,615,231 stock options outstanding, respectively, 2,679,742 and 2,624,142 warrants to purchase common stock, respectively, and, debentures that are convertible to 182,500 and 227,500 shares of common stock, respectively, are excluded from the diluted per share calculation because they would be antidilutive. L. Stock Options – The Company records share-based compensation expense using a fair-value based method of measurement that results in compensation costs for essentially all awards of stock-based compensation. Compensation costs are recognized over the requisite period or periods that services are rendered. M. 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. N. New Accounting Standards – The Financial Accounting Standards Board, or FASB, has issued the following new accounting and interpretations, which may be applicable in the future to us: In February 2016, the FASB issued Accounting Standards Update No. 2016-02, “Leases (Topic 842)” In November 2015, the FASB issued Accounting Standards Update No. 2015-17, “Income Taxes (Topic 740), Balance Sheet Classification of Deferred Taxes” In August 2014, the FASB issued Accounting Standards Update No. 2014-15, “ Disclosure of Uncertainties About an Entity’s Ability to Continue as a Going Concern In May 2014, the FASB issued Accounting Standards Update No. 2014-09, “Revenue from Contracts with Customers” , "Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date" O. Income Taxes – Deferred income tax assets and liabilities are computed annually for differences between the financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense is the tax payable or refundable for the current period plus or minus the change during the period in deferred tax assets and liabilities. The accounting for uncertain tax positions requires the Company to evaluate each income tax position using a two step process which includes a determination as to whether it is more likely than not that the income tax position will be sustained, based upon technical merit and upon examination by the taxing authorities. At December 31, 2015 and 2014, there were no uncertain tax positions that required accrual. None of the Company’s federal or state income tax returns are currently under examination by the Internal Revenue Service (“IRS”) or state authorities. However, fiscal years 2012 and later remain subject to examination by the IRS and respective states. P. Supplemental Disclosure of Non-Cash Operating, Investing and Financing Activities: 2015 2014 Deemed dividend on extension of stock warrants $ 395,224 $ 502,890 Financial Genetics - value of stock issued on consulting agreement 100,000 0 Conversions of convertible debentures to common stock 91,260 0 Value of stock issued for payment of accrued rent 54,107 0 Dynasty Wealth, Inc. - value of warrants issued on consulting agreement 0 460,700 Bowling Green Holdings, LLC - capital lease 0 420,346 Global IR Group - value of stock issued on consulting agreement 0 165,000 Conversions of promissory note debt to common stock 0 55,000 Proceeds from sale of property and equipment recorded as Receivable, net – Other 0 51,889 $ 640,591 $ 1,655,825 Q. Segment Information – During 2015, 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 2. Balance Sheet Data
Note 2. Balance Sheet Data | 12 Months Ended |
Dec. 31, 2015 | |
Notes | |
Note 2. Balance Sheet Data | Note 2. Balance Sheet Data Property and equipment: 2015 2014 Buildings and leasehold improvements $476,603 $452,362 Equipment 1,162,779 2,280,636 Equipment - idle 213,429 0 Furniture, fixtures and computers 55,383 57,503 1,908,194 2,790,501 Less accumulated depreciation 1,415,218 1,791,649 Totals $492,976 $998,852 Deferred costs: Between October 2012 and July 2015, the Company engaged five separate firms to provide various consulting services to the Company, primarily financial consulting and public relations. The payment for these services was paid in stock, stock warrants and cash. During this time period, the Company issued 650,000 unregistered shares of the Company’s stock and 650,000 warrants to purchase the Company’s stock at an average price of $1.38. The value of stock issued was determined based on the trading price of the shares on the commitment date of the agreement and the warrants were valued using the Black Scholes valuation model as of the commitment date. The total value assigned to these agreements was $1,634,900 which is being amortized over the life of the respective consulting contracts. The contractual maturity dates of these agreements range from March 2014 through July 2016, of which, certain agreements were terminated early. The early termination of the agreements resulted in accelerated amortization of the expense in the period the contract was terminated. Total expense related to these agreements for the years ended December 31, 2015 and 2014 was $728,500 and $446,800 of which $85,000 and $35,000 was payable in cash. The following is a summary of Deferred costs – stock and warrants issued for services as of December 31: 2015 2014 Deferred costs - Financial Genetics, LLC, less accumulated amortization (2015 - $45,833) $54,167 $0 Deferred costs - Strategic Asset Management, Inc., less accumulated amortization (2015 - $1,011,500; 2014 - $886,249) 0 125,251 Deferred costs - Dynasty Wealth, Inc., less accumulated amortization (2015 - $460,700; 2014 - $134,371) 0 326,329 Deferred costs - Global IR Group, Inc., less accumulated amortization (2015 - $165,000; 2014 - $18,792) 0 146,208 $54,167 $597,788 Accrued liabilities: 2015 2014 Accrued payroll and employee benefits $95,125 $157,456 Deferred compensation payable 160,670 124,306 Interest payable 63,830 38,445 $319,625 $320,207 |
Note 3. Pledged Assets and Long
Note 3. Pledged Assets and Long-term Debt | 12 Months Ended |
Dec. 31, 2015 | |
Notes | |
Note 3. Pledged Assets and Long-term Debt | Note 3. Pledged Assets and Long-Term Debt In 2011 the Company borrowed $200,000 with a Promissory Note (“the Note”) payable to David and Edna Kasmoch, the parents of Timothy Kasmoch, the Company’s 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 December 31, 2015 the Note was past due and we are in default. The Company expects to extend the Note in the near future and pay it in full in 2016, 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. 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. At December 31, 2015 the Company accrued a total of approximately $96,000 in estimated interest and penalties recorded in accrued interest and accounts payable. The Company is in negotiations with counsel and David and Edna Kasmoch to resolve this default, although there can be no assurance these negotiations will be successful. In 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 payments of $6,000 per month for the first twelve months and $10,000 per month for the following six months, with a balloon payment of approximately $312,000 due on or before February 1, 2016. Concurrently a separate security agreement was agreed on, effectively securing all of the Company’s assets and future rights to assets. As of the date of this filing, the Company is not in compliance with the new settlement agreement, . the Company 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. As of June 30, 2013, the Company held $455,000 of Debentures, but defaulted and did not pay the holders the principal amount due, all of which became due. During the Company’s the Company’s . This reduced the amount of Debentures that remain outstanding and in default at December 31, 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 has not made the interest payments due in October 2015 and January 2016, and do not expect to pay the April 2016 installment due by the time of this filing. 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. The Company has previously borrowed to purchase processing and automotive equipment, and as of December 31, 2015, one term note is outstanding at 7.1% interest for a term of five years, with monthly payments of approximately $2,100 and secured by automotive equipment. The amount owed on the note as of December 31, 2015 was approximately $6,200 and was paid in full on the maturity date in March 31 , 2016. In September 2014, the Company executed a Promissory Note (the “Limited Note”) for $50,000 with N-Viro Energy Limited (“Ltd”), classified as a related party, at 5% interest and for a period of 90 days. During the fourth quarter of 2014 and into 2015, the Company repaid the Limited Note by reimbursing expenses incurred by Ltd related to its China project, and fully paid it off in June 2015. During 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 with an interest rate of 8.4% and monthly payments of approximately $5,400. The Company also financed its directors and officers insurance in late 2015, financing $30,100 over 10 months at 9% interest, monthly payments of $3,136 and is not secured. The amounts owed on these notes as of December 31, 2015 was approximately $33,000 In December 2015, the Company entered into an agreement to issue a convertible promissory note (“Convertible Note”) to the Company for $125,000 in cash, less $10,000 in fees paid in debt issuance costs to a third party. The Convertible Note is for a term of nine (9) month, an interest rate of 10% , and a $4,000 original issue discount fee on actual payments made. The holder can elect to convert all or part of the debt into restricted shares of the Company’s common stock for a price equaling the lesser of $0.43 or a 40% discount to the lowest trading price during the previous twenty (20) trading days to the date of the conversion notice. The Company was also required to reserve 1,250,000 authorized but unissued shares of its common stock, per an irrevocable letter to the Company’s transfer agent. 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. The conversion feature of this convertible promissory note was determined to be a beneficial conversion feature and was recorded as a debt discount at fair value of $83,000. This debt discount is being amortized to interest expense over the nine month note term. The total amount owed on this note was $125,000 and the gross discount was $81,425 as of December 31, 2015. The carrying amount on this note was $43,575 as of December 31, 2015. Long-term debt at December 31, 2015 and 2014 is as follows: 2015 2014 Notes payable - related party (David Kasmoch) $200,000 $200,000 Pension withdrawal liability 408,031 389,389 Convertible debentures 365,000 455,000 Notes payable - equipment vendors 6,182 32,818 Note payable - related party (Ltd.) 0 44,480 Note payable - insurance 32,830 36,550 Convertible note payable, net of discount 43,575 0 1,055,618 1,158,237 Less current maturities 1,055,618 831,583 $0 $326,654 |
Note 4. Capital Lease, in Defau
Note 4. Capital Lease, in Default | 12 Months Ended |
Dec. 31, 2015 | |
Notes | |
Note 4. Capital Lease, in Default | Note 4. Capital Lease, in default 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 company owned by David Kasmoch, the father of Timothy R. Kasmoch, the Company’s President and Chief Executive Officer. The lease term is for five years beginning June 1, 2014 and a monthly payment of $10,000. At December 31, 2015 and 2014 the Company was in default of its payments. This lease has been determined to be a capital lease and a liability and related asset of $420,346 was recorded in June 2014 concurrent with the start of the lease agreement. The following is a summary of property held under capital leases at December 31, 2015 and 2014: 2015 2014 Leased real property at Bradley, Florida - BGH $420,346 $420,346 Less accumulated depreciation 133,111 49,040 $287,235 $371,306 Depreciation on assets under capital leases charged to expense for the years ended December 31, 2015 and 2014 was $84,071 and $49,040, respectively, recorded as cost of sales. Interest charged related to capital lease liabilities for the years ended December 31, 2015 and 2014 was $53,424 and $35,508, respectively, recorded as interest expense. At both December 31, 2015 and 2014, the Company was in default of its payments, however there is no acceleration provision in the lease agreement. The total lease liability at December 31, 2015 and 2014 was $375,436 and $405,930, respectively. The following is a schedule by years of future minimum payments required under the lease together with their present value as of December 31, 2015: amount 2016 $220,000 2017 120,000 2018 120,000 2019 50,000 Total minimum lease payments 510,000 Less amount representing interest 134,564 Present value of lease payments $375,436 Current maturities $133,436 Non-current maturities $242,000 |
Note 5. Related Party Transacti
Note 5. Related Party Transactions | 12 Months Ended |
Dec. 31, 2015 | |
Notes | |
Note 5. Related Party Transactions | Note 5. Related Party Transactions In August 2011, the Company borrowed $200,000 with a Promissory Note payable to David and Edna Kasmoch, the parents of Timothy Kasmoch, the Company’s President and Chief Executive Officer. More details can be found in Note 3. During 2012 the Company paid Terri Kasmoch, the spouse of Timothy Kasmoch, as an employee for business development, web site and company media marketing and stock promotion efforts for the Company, and she participated with the executives of the Company in reducing the salary paid to her by 10% and deferring this to a future date. Effective November 2012, Ms. Kasmoch resigned from employment from the Company, and her deferred salary of approximately $3,900 remains unpaid as of December 31, 2015. During 2014, the Company sold used equipment to Tri-State Garden Supply dba Gardenscape , and realized cash proceeds of $81,275 on the sale, of which $6,202 was still owed as of December 31, 2015. At December 31, 2015 this amount was classified as an Other – receivable but was fully reserved due to the uncertainty that these expenses will be reimbursed. During 2015, the Company incurred expenses which were reimbursable from their landlord Bowling Green Holdings, LLC (“BGH”) in the amount of $10,321. At December 31, 2015 this amount was classified as an Other – receivable but was fully reserved due to the uncertainty that these expenses will be reimbursed. During 2015 and 2014, the Company leased two trucks from Tri-State Garden Supply dba Gardenscape, and in lieu of lease payments agreed to repair and maintain both trucks, reimburse Gardenscape for insurance, annual taxes and license fees. During 2015 and 2014, this totaled approximately $48,500 and $27,000 , respectively, and is included as part of Cost of Sales. In September 2014, the Company executed a Promissory Note (the “Limited Note”) for $50,000 with N-Viro Energy Limited (“Ltd”), of which the Company holds approximately a 45% investment interest in. |
Note 6. Equity Transactions
Note 6. Equity Transactions | 12 Months Ended |
Dec. 31, 2015 | |
Notes | |
Note 6. Equity Transactions | Note 6. Equity Transactions In April 2014, the Company entered into a share purchase agreement with one of the Company’s board members (“Purchaser”), pursuant to which the Company sold 71,429 shares of its common stock (the “Shares”) to the Purchaser for $50,000, or a purchase price of $0.70 per Share, and 71,429 warrants to purchase common stock. The Shares are restricted and 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 April 2014, the Company entered into a share purchase agreement with one of the Company’s board members (“Purchaser”), pursuant to which the Company sold 25,000 shares of its common stock (the “Shares”) to the Purchaser for $17,500, or a purchase price of $0.70 per Share, and 25,000 warrants to purchase common stock. The Shares are restricted and 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 May 2014, the Company entered into a share purchase agreement with one of the Company’s board members (“Purchaser”), pursuant to which the Company sold 37,313 shares of its common stock (the “Shares”) to the Purchaser for $25,000, or a purchase price of $0.67 per Share, and 37,313 warrants to purchase common stock. The Shares are restricted and 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 August 2014 the Company issued Deerpoint Development Company Limited, the landlord of its administrative office, 16,200 shares of unregistered common stock at a price of $0.71 per share in exchange for three months rent, resulting in net additional expense of approximately $1,300 above the contracted amount, but saving us approximately $10,200 of cash. The stock price was calculated using the Black-Scholes valuation model, explained in further detail below. In September 2014, the Company issued 350,000 warrants to purchase unregistered shares of common stock to Dynasty Wealth, Inc., for financial consulting services. Additional payments owed Dynasty Wealth could be paid in either cash or shares of the Company’s unregistered common stock. For the years ended December 31, 2015 and 2014 the Company did not issue any shares of stock in additional payment owed per the agreement. More details of this agreement are contained in Note 2. In November 2014, the Company issued 100,000 shares of unregistered common stock to Global IR Group, Inc., for public relations services. More details of this agreement are contained in Note 2. During 2014, the Company entered into share purchase agreements with a total of sixteen Purchasers pursuant to which the Company sold 604,650 shares of its common stock (the “Shares”) to the Purchasers for a total of $604,650, or a purchase price of $1.00 per share. All but 91,500 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 sold 91,500 shares it held in its treasury, but the shares were not issued until early 2015. 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. Between January 1 2015 and April 30 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. Between June 1 2015 and October 31 2015, the Company entered into share purchase agreement with a total of five Purchasers pursuant to which the Company sold 156,000 shares of its common stock (the “Shares”) to the Purchaser for a total of $195,000, or a purchase price of $1.25 per share, and 78,000 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 2015, the Company issued Thomas W. Muldowney, a former consultant to the Company, 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 Limited, 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. 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 1,598,000 options are outstanding as of December 31, 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 1,043,000 options are outstanding as of December 31, 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 222,500 options from December 2013 through October 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 $280,033 over the requisite vesting period in selling, general and administrative expense. For the years ended December 31, 2015 and 2014, the Company recorded an expense of approximately $130,300 and $132,100, respectively. More information on these equity transactions is contained in this Form 10-K under Item 10, “Directors, Executive Officers and Corporate Governance”. During the year ended December 31, 2014, the Company issued a total of 25,357 shares of unregistered common stock, valued at a total of $26,500, to its independent directors in lieu of cash owed for calendar year 2014 board meetings attended. To reflect the value of the stock issued, the Company recorded a charge to earnings totaling $26,500 during 2014. More information on these equity transactions is contained in this Form 10-K under Item 10, “Directors, Executive Officers and Corporate Governance”. During the year ended December 31, 2015, the Company issued a total of 9,414 shares of unregistered common stock, valued at a total of $13,000, to its independent directors in lieu of cash owed for calendar year 2015 board meetings attended. To reflect the value of the stock issued, the Company recorded and will continue to record a charge to earnings totaling $13,000 during 2015. More information on these equity transactions is contained in this Form 10-K under Item 10, “Directors, Executive Officers and Corporate Governance”. During the year ended December 31, 2014, the Board of Directors approved a plan to offer to all Company warrants holders a 25% discount on the exercise price to any warrant holder who exercises warrants, and a second 25% discount on any subsequent warrant exercise, but within a specific “discount period” and only on a temporary basis. Any warrant holder who exercised within the discount period also received a “replacement warrant” on a 1.5 to 1 basis. All other terms and conditions of all outstanding warrants remain unchanged, and the discount offer was temporary. During the discount period, five warrant holders exercised a total of 250,009 warrants at various exercise prices and were issued a total of 250,009 shares of restricted common stock and 375,014 replacement warrants. As a condition of exercise, all of the $122,177 in cash proceeds from the exercises were restricted for future payment to specific creditors as agreed upon with the warrant holders, and subsequently used to pay these creditors. In all instances the shares and the warrants issued and sold were in a private offering transaction pursuant to an exemption under Section 4(2) of the Securities Act of 1933 for transactions 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. For the 2015 and 2014 changes to the warrants, the incremental fair value associated with these transactions has been determined using the Black-Scholes model and has been recorded as a deemed dividend to common stockholders in the accompanying Statement of Stockholders’ Equity (Deficit). For the years ended December 31, 2015 and 2014, the deemed dividend was $395,224 and $502,890, respectively. The following summarizes the stock options activity for the years ended December 31, 2015 and 2014: 2015 2014 Shares Weighted Average Exercise Price Shares Weighted Average Exercise Price Outstanding, beginning of year 2,515,231 $1.91 2,210,981 $2.10 Granted 165,000 $1.84 377,500 $0.84 Exercised 1,250 $1.65 2,500 $1.90 Forfeited/expired during the year 38,750 $1.93 70,750 $2.33 Outstanding, end of year 2,640,231 $1.90 2,515,231 $1.91 Eligible for exercise at end of year 2,615,231 $1.91 2,442,731 $1.92 Weighted average fair value per option for options granted during the year $1.84 $0.84 Options expected to vest over the life of the Plan 2,640,231 2,515,231 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 term and the expected forfeiture rate of the option. 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 following assumptions were used to estimate the fair value of options granted: Year Ended December 31, 2015 2014 Expected dividend yield 0.0% 0.0% Weighted average volatility 287.4% 287.0% Risk free interest rate 1.4 – 1.9% 2.2 - 2.8% Expected term (in years) 7 7 The following summarizes the stock warrants activity for the years ended December 31, 2015 and 2014: 2015 2014 Warrants (Underlying Shares) Weighted Average Exercise Price Warrants (Underlying Shares) Weighted Average Exercise Price Outstanding, beginning of year 2,624,142 $1.04 1,849,585 $1.04 Granted 78,000 $1.50 1,049,566 $0.96 Exercised 22,400 $1.00 250,009 $0.65 Forfeited/expired during the year 0 $0 25,000 $1.00 Outstanding, end of year 2,679,742 $1.06 2,624,142 $1.04 Eligible for exercise at end of year 2,679,742 $1.06 2,624,142 $1.04 Weighted average fair value per warrant for warrants granted during the year $1.50 $0.96 Share Reserves for Outstanding Warrants 2,679,742 2,624,142 |
Note 7. Revenue and Major Custo
Note 7. Revenue and Major Customers | 12 Months Ended |
Dec. 31, 2015 | |
Notes | |
Note 7. Revenue and Major Customers | Note 7. Revenue and Major Customers For the years ended December 31, 2015 and 2014, the CompanyÂ’s largest customer accounted for approximately 31% and 22% of our revenues, respectively. The CompanyÂ’s sludge processing agreement with Toho Water Authority, which was also its largest customer for the years 2011 through 2013, was not renewed at the beginning of 2014. The CompanyÂ’s failure to renew that agreement has had a material adverse effect on its business, financial conditions and results of operations. For the years ended December 31, 2015 and 2014, the top three customers accounted for approximately 74% and 50%, respectively, of the CompanyÂ’s revenues. The accounts receivable balance due (which are unsecured) for these three customers at December 31, 2015 and 2014 was approximately $69,000 and $99,000, respectively. Beginning in March 2014, the CompanyÂ’s operations in Florida were voluntarily delayed for a short time while the Company moved assets and personnel to a new site in Bradley, Florida. While operations resumed in Bradley in June 2014, this reduction in revenue, while temporary, has materially reduced available cash to fund current or prior expenses incurred. The CompanyÂ’s sludge processing agreement with Altamonte Springs, which was its largest customer in 2014 and its second largest customer in 2015, representing approximately 29% of Company revenues, was not renewed effective April 2016. The CompanyÂ’s failure to renew that agreement may have a material adverse effect on its business, financial conditions and results of operations. Additionally, economic considerations have made the supply of admixtures used in our processes more difficult to acquire due to coal-burning facilities operating less or not at all, primarily from the decrease in natural gas prices in the commercial marketplace. 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. Commitments and Conting
Note 8. Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2015 | |
Notes | |
Note 8. Commitments and Contingencies | Note 8. 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 Company’s 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 of 2015 and 2016, Mr. Kasmoch’s 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 Company’s 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 of 2015 and 2016, Mr. Bohmer’s Employment Agreement automatically renewed for a one-year term. 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. Additional information is available in “Item 11 Executive Compensation” in this Form 10-K. 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 Company’s 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 of 2015 and 2016, Mr. McHugh’s Employment Agreement automatically renewed for a one-year term. In May 2013, the Company’s Board of Directors approved an amendment to each of the Company’s executive officer’s respective employment agreement only as it applied to the stock option grant. Additional information is available in “Item 11 Executive Compensation” in this Form 10-K. As of December 31, 2015, the Company has accrued a liability of approximately $160,700 to reflect the total amount of salary and related payroll taxes voluntarily deferred by its three executive officers since February 2012, as well as approximately $95,100 in undeferred salary and related payroll taxes, for a combined total of approximately $255,800 in unpaid salaries and related payroll taxes. More details of these liabilities are contained in Note 2. 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 officer’s 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 Item 11 “Executive Compensation” of the Form 10-K filed 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 is for the non-cash component. The final settlement payment due under the settlement is in default, and as of December 31, 2015 and 2014, the Company owed approximately $2,000 and $16,000 in cash installment payments, respectively. The Company’s 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 year 2016 is $40,800. The total rental expense included in the statements of operations for the year ended December 31, 2015 and 2014 is approximately $43,400 and $40,800, respectively. Additional information is available in “Item 2 Properties” in this Form 10-K. In October 2010, the Company began to lease property in Emlenton, Pennsylvania under a lease with A-C Valley Industrial Park, 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 years ended December 31, 2015 and 2014 is $12,000. 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 year ended December 31, 2015 and 2014 is $-0- and $22,500, 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 each of the years ended December 31, 2015 and 2014 is $-0- and $15,000, respectively. 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, for a five year lease term beginning June 1, 2014 and a monthly payment of $10,000. More details can be found in Note 4 Capital Lease. For the year ended December 31, 2015 and 2014, the Company paid a total of $22,000 and $19,800, 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, however the Company expects to pay $26,400 in 2016 through the lease term maturing October 31, 2016. 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 the year ending December 31, 2016 is $37,900 and for the year ending December 31, 2017 is $28,400. Management believes that all of the Company’s 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 9. Income Tax Matters
Note 9. Income Tax Matters | 12 Months Ended |
Dec. 31, 2015 | |
Notes | |
Note 9. Income Tax Matters | Note 9. Income Tax Matters The composition of the deferred tax assets and liabilities at December 31, 2015 and 2014 is as follows: 2015 2014 Gross deferred tax liabilities: Property and equipment and intangible assets 0 (68,700) Gross deferred tax assets: Loss carryforwards 6,465,100 6,016,600 Property and equipment and intangible assets 55,600 0 Pension plan withdrawal exp in excess of payments 138,700 132,400 Stock options and warrants 1,593,900 1,396,100 Subsidiary acquisition basis step up 21,400 42,800 Allowance for doubtful accounts 11,200 34,400 Deferred compensation and unpaid salaries 86,900 95,800 Litigation settlement - non-cash portion 54,500 54,500 Other 100 400 Less valuation allowance (8,427,400) (7,704,300) 0 0 The income tax provisions differ from the amount of income tax determined by applying the U.S. Federal income tax rate to pre-tax income from continuing operations for the years ended December 31, 2015 and 2014 and are as follows: 2015 2014 Provision at statutory rate (773,200) (598,500) (Decrease) increase in income taxes resulting from: Change in valuation allowance 723,100 587,500 Penalties 49,400 8,100 Other 700 2,900 $0 $0 For the years ended December 31, 2015 and 2014, 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 zero. The net operating losses available at December 31, 2015 to offset future taxable income total approximately $19,000,000 and expire principally in years 2018 - 2035. |
Note 10. Subsequent Events
Note 10. Subsequent Events | 12 Months Ended |
Dec. 31, 2015 | |
Notes | |
Note 10. Subsequent Events | Note 10. Subsequent Events On January 15, 2016, the Company entered into an agreement with JMJ Financial (“JMJ”), to issue a Convertible Promissory Note (“JMJ Note”) to the Company for $100,000 in cash, less $6,950 in fees paid to Craft Capital Management, LLC (“Craft”). Craft also received 4,000 stock warrants to purchase common stock of the Company at an exercise price of $1.00 per share. The JMJ Note is for a term of two (2) years, an interest rate of 12% if not paid within the first 90 days, and a 10% original issue discount fee on actual payments made. After 2016-07-15 , JMJ can elect to convert all or part of the debt into restricted shares of the Company’s common stock for a price equaling the lesser of $0.77 or a 40% discount to the lowest trading price during the previous twenty-five (25) trading days to the date of the conversion notice. The Company was also required to reserve 2,500,000 authorized but unissued shares of its common stock, per an irrevocable Letter of Instructions to the Company’s transfer agent. 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 January21, 2016, the Company accepted a Promissory Note (the “Limited Note Receivable”) for $100,000 from N-Viro Energy Limited (“Ltd”), and concurrently advanced Ltd $55,000 cash for expenses in connection with its China project. The Note Receivable is due April 15, 2016 at a stated interest rate of 5% per annum. On 2016-03-04 , the Company entered into an agreement with Tangiers Investment Group, LLC (“Tangiers”), to issue a 10% Convertible Promissory Note (“Tangiers Note”) to us for $58,500 in cash, less $8,500 in original issue discount retained by Tangiers for due diligence and legal expenses. The Tangiers Note is for a term of one (1) year, an interest rate of zero percent if prepaid within the first 90 days, with a graduated prepayment penalty every 30 days, up until 180 days from the March 2016 effective date. At any time Tangiers can elect to convert all or part of the debt into restricted shares of the Company‘s common stock for a price equaling the lesser of $0.60 or a 40% discount to the lowest trading price during the previous twenty (20) trading days to the date of the conversion notice. The Company was also required to reserve 700,000 authorized but unissued shares of its common stock, per an irrevocable Letter of Instructions to the Company’s transfer agent. 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 March 31 2016, the Company entered into an initial one (1) year agreement with Arrowroot Partners, LLC (“Arrowroot”), to assist in obtaining equity or debt financing for the Company. The Company issued 15,460 shares of its unregistered common stock, valued at $15,000, to Arrowroot as a non-refundable restricted equity share retainer fee, which can be applied toward future financing fees in connection with any placements. A cash fee of 8% of the gross proceeds and a warrant fee of 8% of the number of shares placed, in addition to preapproved expenses, will be paid to Arrowroot for its services. In March 2016, the Company executed a two week preliminary public relations agreement with M & T Business Consultants, Inc., (“M&T”). For the services rendered the Company issued M&T 50,000 shares of the Company’s unregistered common stock, valued at approximately $43,000. In April 2016, the Company entered into a 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 $100,000, or a purchase price of $1.00 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. |
Note 1. Operations and Summar17
Note 1. Operations and Summary of Significant Accounting Policies: Nature of Operations (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Policies | |
Nature of Operations | A. Nature of Business – The Company owns and licenses the N-Viro Process, a patented technology to treat and recycle wastewater sludges and other bio-organic wastes, utilizing certain alkaline by-products produced by the cement, lime, electric utilities and other industries. Revenue and the related accounts receivable are due from companies acting as independent agents or licensees, principally municipalities. |
Note 1. Operations and Summar18
Note 1. Operations and Summary of Significant Accounting Policies: Use of Estimates, Policy (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Policies | |
Use of Estimates, Policy | B. Use of Estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Note 1. Operations and Summar19
Note 1. Operations and Summary of Significant Accounting Policies: Principles of Consolidation, Policy (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Policies | |
Principles of Consolidation, Policy | C. Principles of Consolidation – The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. |
Note 1. Going Concern (Policies
Note 1. Going Concern (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Policies | |
Going Concern | D. 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 $2,026,000 at December 31, 2015, and has incurred recurring losses and negative cash flow from operations for the years ended December 31, 2015 and 2014. Moreover, while the Company expects to arrange for financing with lending institutions, there can be no assurances that the Company will have the ability to do so. The Company has borrowed money from third parties and related parties and expects to be able to generate future cash from the exercise of common stock warrants, new debt and equity issuances. The Company has substantially slowed payments to trade vendors, and have 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. In 2013, 2014 and again in 2015 the Company modified all outstanding warrants to enhance their exercisability and realized a total of $246,000 in exercises in 2013 and 2014. In October 2015, the Company extended the expiration date of all outstanding warrants for exactly one year. Beginning in March 2014, our operations in Volusia County, Florida, which at the time now represented substantially all revenue, were voluntarily delayed while the Company employed additional personnel and moved assets to its new site in Bradley, Florida. While operations resumed in Bradley in June 2014, this reduction in revenue materially reduced available cash to fund current or prior expenses incurred. These factors raise substantial doubt about the CompanyÂ’s 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 1. Operations and Summar21
Note 1. Operations and Summary of Significant Accounting Policies: Cash and Cash Equivalents, Policy (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Policies | |
Cash and Cash Equivalents, Policy | E. Cash and Cash Equivalents – The Company has cash on deposit primarily in one financial institution which, at times, may be in excess of FDIC insurance limits. For purposes of the statements of cash flows, the Company considers all certificates of deposit with initial maturities of 90 days or less to be cash equivalents. Restricted cash consists of one certificate of deposit and corresponding accrued interest which was held as collateral with a performance bond on behalf of one of the Company’s licensees at December 31, 2014. The restricted cash performance bond was released by the Company’s licensee due to the completion of the contract period in September 2015. |
Note 1. Operations and Summar22
Note 1. Operations and Summary of Significant Accounting Policies: Trade and Other Accounts Receivable, Policy (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Policies | |
Trade and Other Accounts Receivable, Policy | F. Accounts Receivable – The Company extends unsecured credit to customers under normal trade agreements, which require payment within 30 days. Accounts greater than 90 days past due amounted to $326 and $99,179 of receivables for the years ended December 31, 2015 and 2014, respectively. The Company's policy is not to accrue and record interest income on past due trade receivables. The Company does bill the customer finance charges on past due accounts and records the interest income when collected. Credit is generally granted on an unsecured basis. Periodic credit evaluations of customers are conducted and appropriate allowances are established. Management estimates an allowance for doubtful accounts, which was $32,847 at December 31, 2015 and $116,260 at December 31, 2014. The estimate is based upon management’s review of delinquent accounts and an assessment of the Company’s historical evidence of collections. |
Note 1. Operations and Summar23
Note 1. Operations and Summary of Significant Accounting Policies: Property and Equipment, Policy (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Policies | |
Property and Equipment, Policy | G. Property and Equipment – Property, machinery and equipment are stated at cost less accumulated depreciation. Depreciation has been computed primarily by the straight-line method over the estimated useful lives of the assets. Generally, useful lives are five to fifteen years. Leasehold improvements are capitalized and amortized over the lesser of the term of the lease or the estimated useful life of the asset. Depreciation expense amounted to $225,613 and $179,743 in 2015 and 2014, respectively. Management has reviewed property and equipment for impairment when events and circumstances indicate that the assets might be impaired and the carrying values of those assets may not be recoverable. During 2015, the Company determined the fair value of property and equipment was less than the carrying amount reflected on the balance sheet, and recorded a non-cash impairment charge of $304,936 to reduce the carrying value of these assets to their estimated fair value of $188,300. Fair values of the property and equipment were estimated using a market approach, considering the estimated fair values of other comparable property and equipment (Level 3 inputs). In May 2015 the Company lost their energy partner to develop their N-Viro Fuel TM |
Note 1. Operations and Summar24
Note 1. Operations and Summary of Significant Accounting Policies: Intangible Assets, Policy (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Policies | |
Intangible Assets, Policy | H. Intangible Assets – Intangible assets are comprised of patent costs, territory rights and customer licenses/contracts amortized on a straight line basis over their estimated useful lives (ranging from 18 months to 17 years). Amortization expense amounted to $-0- in 2015 and $7,941 in 2014. During 2014, the Company determined the fair value of the intangible assets were less than the amount reflected in the balance sheet, and recorded a non-cash impairment charge of $42,653 to reduce the carrying value of these assets to their estimated fair value of zero. The reason for the impairment of intangible assets in the third quarter of 2014 was primarily due to declines in revenue associated with these assets. |
Note 1. Operations and Summar25
Note 1. Operations and Summary of Significant Accounting Policies: Equity Method Investments, Policy (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Policies | |
Equity Method Investments, Policy | I. Equity Method Investment – During the year ended December 31, 2014, the Company entered into a subscription agreement with N-Viro Energy Limited representing an approximately 45% interest in the class C voting shares. The Company’s 2014 loss includes a loss of $10,000 related to the operations of N-Viro Energy Limited. The loss reduced the Company’s investment in N-Viro Limited to zero and, as a result, the Company discontinued applying the equity method. The Company will resume application of the equity method only after its share of future earnings of N-Viro Energy Limited are sufficient to recover its share of unrecognized losses during the period the equity method was suspended. The Company has no obligation to fund future operations of N-Viro Energy Limited. |
Note 1. Operations and Summar26
Note 1. Operations and Summary of Significant Accounting Policies: Revenue Recognition, Policy (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Policies | |
Revenue Recognition, Policy | J. Revenue Recognition – Sludge processing revenue and royalty fees are recognized under contracts where the Company or licensees utilize the N Viro Process to treat sludge, either pursuant to a fixed-price contract or based on volumes of sludge processed. Revenue is recognized as services are performed. Alkaline admixture management service revenue and N-Viro Soil TM |
Note 1. Operations and Summar27
Note 1. Operations and Summary of Significant Accounting Policies: Loss Per Common Share, Policy (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Policies | |
Loss Per Common Share, Policy | K. Loss Per Common Share – Loss per common share has been computed on the basis of the weighted-average number of common shares outstanding during each period presented. For the years ended December 31, 2015 and 2014, the effects of 2,640,231 and 2,615,231 stock options outstanding, respectively, 2,679,742 and 2,624,142 warrants to purchase common stock, respectively, and, debentures that are convertible to 182,500 and 227,500 shares of common stock, respectively, are excluded from the diluted per share calculation because they would be antidilutive. |
Note 1. Operations and Summar28
Note 1. Operations and Summary of Significant Accounting Policies: Stock Warrants, Policy (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Policies | |
Stock Warrants, Policy | M. 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. |
Note 1. Operations and Summar29
Note 1. Operations and Summary of Significant Accounting Policies: New Accounting Standards, Policy (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Policies | |
New Accounting Standards, Policy | N. New Accounting Standards – The Financial Accounting Standards Board, or FASB, has issued the following new accounting and interpretations, which may be applicable in the future to us: In February 2016, the FASB issued Accounting Standards Update No. 2016-02, “Leases (Topic 842)” In November 2015, the FASB issued Accounting Standards Update No. 2015-17, “Income Taxes (Topic 740), Balance Sheet Classification of Deferred Taxes” In August 2014, the FASB issued Accounting Standards Update No. 2014-15, “ Disclosure of Uncertainties About an Entity’s Ability to Continue as a Going Concern In May 2014, the FASB issued Accounting Standards Update No. 2014-09, “Revenue from Contracts with Customers” , "Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date" |
Note 1. Operations and Summar30
Note 1. Operations and Summary of Significant Accounting Policies: Income Tax, Policy (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Policies | |
Income Tax, Policy | O. Income Taxes – Deferred income tax assets and liabilities are computed annually for differences between the financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense is the tax payable or refundable for the current period plus or minus the change during the period in deferred tax assets and liabilities. The accounting for uncertain tax positions requires the Company to evaluate each income tax position using a two step process which includes a determination as to whether it is more likely than not that the income tax position will be sustained, based upon technical merit and upon examination by the taxing authorities. At December 31, 2015 and 2014, there were no uncertain tax positions that required accrual. None of the Company’s federal or state income tax returns are currently under examination by the Internal Revenue Service (“IRS”) or state authorities. However, fiscal years 2012 and later remain subject to examination by the IRS and respective states. |
Note 1. Operations and Summar31
Note 1. Operations and Summary of Significant Accounting Policies: Supplemental Disclosure of Non-cash Operating, Investing and Financing Activities, Policy (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Policies | |
Supplemental Disclosure of Non-cash Operating, Investing and Financing Activities, Policy | P. Supplemental Disclosure of Non-Cash Operating, Investing and Financing Activities: 2015 2014 Deemed dividend on extension of stock warrants $ 395,224 $ 502,890 Financial Genetics - value of stock issued on consulting agreement 100,000 0 Conversions of convertible debentures to common stock 91,260 0 Value of stock issued for payment of accrued rent 54,107 0 Dynasty Wealth, Inc. - value of warrants issued on consulting agreement 0 460,700 Bowling Green Holdings, LLC - capital lease 0 420,346 Global IR Group - value of stock issued on consulting agreement 0 165,000 Conversions of promissory note debt to common stock 0 55,000 Proceeds from sale of property and equipment recorded as Receivable, net – Other 0 51,889 $ 640,591 $ 1,655,825 |
Note 1. Operations and Summar32
Note 1. Operations and Summary of Significant Accounting Policies: Segment Reporting, Policy (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Policies | |
Segment Reporting, Policy | Q. Segment Information – During 2015, 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 6. Equity Transactions_ St
Note 6. Equity Transactions: Stock Option Plans Policy (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Policies | |
Stock Option 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 1,598,000 options are outstanding as of December 31, 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 1,043,000 options are outstanding as of December 31, 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 6. Equity Transactions_ 34
Note 6. Equity Transactions: Stock Option Plans, Director Policy (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Policies | |
Stock Option 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. Stock option grants related to the periods covered by these financial statements include the issuance of 222,500 options from December 2013 through October 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 $280,033 over the requisite vesting period in selling, general and administrative expense. For the years ended December 31, 2015 and 2014, the Company recorded an expense of approximately $130,300 and $132,100, respectively. More information on these equity transactions is contained in this Form 10-K under Item 10, “Directors, Executive Officers and Corporate Governance”. |
Note 6. Equity Transactions_ 35
Note 6. Equity Transactions: Stock Warrants, Modifications (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Policies | |
Stock Warrants, Modifications | During the year ended December 31, 2014, the Board of Directors approved a plan to offer to all Company warrants holders a 25% discount on the exercise price to any warrant holder who exercises warrants, and a second 25% discount on any subsequent warrant exercise, but within a specific “discount period” and only on a temporary basis. Any warrant holder who exercised within the discount period also received a “replacement warrant” on a 1.5 to 1 basis. All other terms and conditions of all outstanding warrants remain unchanged, and the discount offer was temporary. During the discount period, five warrant holders exercised a total of 250,009 warrants at various exercise prices and were issued a total of 250,009 shares of restricted common stock and 375,014 replacement warrants. As a condition of exercise, all of the $122,177 in cash proceeds from the exercises were restricted for future payment to specific creditors as agreed upon with the warrant holders, and subsequently used to pay these creditors. In all instances the shares and the warrants issued and sold were in a private offering transaction pursuant to an exemption under Section 4(2) of the Securities Act of 1933 for transactions 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 6. Equity Transactions_ 36
Note 6. Equity Transactions: Stock Options Fair Value Assumptions, Method Used (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Policies | |
Stock Options 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 term and the expected forfeiture rate of the option. 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 7. Revenue and Major Cus37
Note 7. Revenue and Major Customers: Concentration Risk, Customers (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Policies | |
Concentration Risk, Customers | For the years ended December 31, 2015 and 2014, the CompanyÂ’s largest customer accounted for approximately 31% and 22% of our revenues, respectively. The CompanyÂ’s sludge processing agreement with Toho Water Authority, which was also its largest customer for the years 2011 through 2013, was not renewed at the beginning of 2014. The CompanyÂ’s failure to renew that agreement has had a material adverse effect on its business, financial conditions and results of operations. For the years ended December 31, 2015 and 2014, the top three customers accounted for approximately 74% and 50%, respectively, of the CompanyÂ’s revenues. The accounts receivable balance due (which are unsecured) for these three customers at December 31, 2015 and 2014 was approximately $69,000 and $99,000, respectively. Beginning in March 2014, the CompanyÂ’s operations in Florida were voluntarily delayed for a short time while the Company moved assets and personnel to a new site in Bradley, Florida. While operations resumed in Bradley in June 2014, this reduction in revenue, while temporary, has materially reduced available cash to fund current or prior expenses incurred. The CompanyÂ’s sludge processing agreement with Altamonte Springs, which was its largest customer in 2014 and its second largest customer in 2015, representing approximately 29% of Company revenues, was not renewed effective April 2016. The CompanyÂ’s failure to renew that agreement may have a material adverse effect on its business, financial conditions and results of operations. |
Note 7. Revenue and Major Cus38
Note 7. Revenue and Major Customers: Major Customers, Policy (Policies) | 12 Months Ended |
Dec. 31, 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. Commitments and Conti39
Note 8. Commitments and Contingencies: Commitments and Contingencies, Policy (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Policies | |
Commitments and Contingencies, Policy | 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. |
Note 8. Commitments and Conti40
Note 8. Commitments and Contingencies: Legal Costs, Policy (Policies) | 12 Months Ended |
Dec. 31, 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 1. Operations and Summar41
Note 1. Operations and Summary of Significant Accounting Policies: Supplemental Disclosure of Non-cash Operating, Investing and Financing Activities, Policy: Schedule of Other Significant Noncash Transactions (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Tables/Schedules | |
Schedule of Other Significant Noncash Transactions | 2015 2014 Deemed dividend on extension of stock warrants $ 395,224 $ 502,890 Financial Genetics - value of stock issued on consulting agreement 100,000 0 Conversions of convertible debentures to common stock 91,260 0 Value of stock issued for payment of accrued rent 54,107 0 Dynasty Wealth, Inc. - value of warrants issued on consulting agreement 0 460,700 Bowling Green Holdings, LLC - capital lease 0 420,346 Global IR Group - value of stock issued on consulting agreement 0 165,000 Conversions of promissory note debt to common stock 0 55,000 Proceeds from sale of property and equipment recorded as Receivable, net – Other 0 51,889 $ 640,591 $ 1,655,825 |
Note 2. Balance Sheet Data_ Pro
Note 2. Balance Sheet Data: Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Tables/Schedules | |
Property and Equipment | 2015 2014 Buildings and leasehold improvements $476,603 $452,362 Equipment 1,162,779 2,280,636 Equipment - idle 213,429 0 Furniture, fixtures and computers 55,383 57,503 1,908,194 2,790,501 Less accumulated depreciation 1,415,218 1,791,649 Totals $492,976 $998,852 |
Note 2. Balance Sheet Data_ Def
Note 2. Balance Sheet Data: Deferred Costs - Stock and Warrants issued for services Disclosure (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Tables/Schedules | |
Deferred Costs - Stock and Warrants issued for services Disclosure | 2015 2014 Deferred costs - Financial Genetics, LLC, less accumulated amortization (2015 - $45,833) $54,167 $0 Deferred costs - Strategic Asset Management, Inc., less accumulated amortization (2015 - $1,011,500; 2014 - $886,249) 0 125,251 Deferred costs - Dynasty Wealth, Inc., less accumulated amortization (2015 - $460,700; 2014 - $134,371) 0 326,329 Deferred costs - Global IR Group, Inc., less accumulated amortization (2015 - $165,000; 2014 - $18,792) 0 146,208 $54,167 $597,788 |
Note 2. Balance Sheet Data_ Sch
Note 2. Balance Sheet Data: Schedule of Accrued Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Tables/Schedules | |
Schedule of Accrued Liabilities | 2015 2014 Accrued payroll and employee benefits $95,125 $157,456 Deferred compensation payable 160,670 124,306 Interest payable 63,830 38,445 $319,625 $320,207 |
Note 3. Pledged Assets and Lo45
Note 3. Pledged Assets and Long-term Debt: Schedule of Long-term Debt (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Tables/Schedules | |
Schedule of Long-term Debt | 2015 2014 Notes payable - related party (David Kasmoch) $200,000 $200,000 Pension withdrawal liability 408,031 389,389 Convertible debentures 365,000 455,000 Notes payable - equipment vendors 6,182 32,818 Note payable - related party (Ltd.) 0 44,480 Note payable - insurance 32,830 36,550 Convertible note payable, net of discount 43,575 0 1,055,618 1,158,237 Less current maturities 1,055,618 831,583 $0 $326,654 |
Note 4. Capital Lease, in Def46
Note 4. Capital Lease, in Default: Schedule of Capital Leased Assets (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Tables/Schedules | |
Schedule of Capital Leased Assets | 2015 2014 Leased real property at Bradley, Florida - BGH $420,346 $420,346 Less accumulated depreciation 133,111 49,040 $287,235 $371,306 |
Note 4. Capital Lease, in Def47
Note 4. Capital Lease, in Default: Schedule of Future Minimum Lease Payments for Capital Leases (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Tables/Schedules | |
Schedule of Future Minimum Lease Payments for Capital Leases | amount 2016 $220,000 2017 120,000 2018 120,000 2019 50,000 Total minimum lease payments 510,000 Less amount representing interest 134,564 Present value of lease payments $375,436 Current maturities $133,436 Non-current maturities $242,000 |
Note 6. Equity Transactions_ Sc
Note 6. Equity Transactions: Schedule of Stock Options, Activity (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Tables/Schedules | |
Schedule of Stock Options, Activity | 2015 2014 Shares Weighted Average Exercise Price Shares Weighted Average Exercise Price Outstanding, beginning of year 2,515,231 $1.91 2,210,981 $2.10 Granted 165,000 $1.84 377,500 $0.84 Exercised 1,250 $1.65 2,500 $1.90 Forfeited/expired during the year 38,750 $1.93 70,750 $2.33 Outstanding, end of year 2,640,231 $1.90 2,515,231 $1.91 Eligible for exercise at end of year 2,615,231 $1.91 2,442,731 $1.92 Weighted average fair value per option for options granted during the year $1.84 $0.84 Options expected to vest over the life of the Plan 2,640,231 2,515,231 |
Note 6. Equity Transactions_ 49
Note 6. Equity Transactions: Schedule of Stock Options, Valuation Assumptions (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Tables/Schedules | |
Schedule of Stock Options, Valuation Assumptions | Year Ended December 31, 2015 2014 Expected dividend yield 0.0% 0.0% Weighted average volatility 287.4% 287.0% Risk free interest rate 1.4 – 1.9% 2.2 - 2.8% Expected term (in years) 7 7 |
Note 6. Equity Transactions_ 50
Note 6. Equity Transactions: Schedule of Stock Warrants, Activity (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Tables/Schedules | |
Schedule of Stock Warrants, Activity | 2015 2014 Warrants (Underlying Shares) Weighted Average Exercise Price Warrants (Underlying Shares) Weighted Average Exercise Price Outstanding, beginning of year 2,624,142 $1.04 1,849,585 $1.04 Granted 78,000 $1.50 1,049,566 $0.96 Exercised 22,400 $1.00 250,009 $0.65 Forfeited/expired during the year 0 $0 25,000 $1.00 Outstanding, end of year 2,679,742 $1.06 2,624,142 $1.04 Eligible for exercise at end of year 2,679,742 $1.06 2,624,142 $1.04 Weighted average fair value per warrant for warrants granted during the year $1.50 $0.96 Share Reserves for Outstanding Warrants 2,679,742 2,624,142 |
Note 9. Income Tax Matters_ Sch
Note 9. Income Tax Matters: Schedule of Deferred Tax Assets and Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Tables/Schedules | |
Schedule of Deferred Tax Assets and Liabilities | 2015 2014 Gross deferred tax liabilities: Property and equipment and intangible assets 0 (68,700) Gross deferred tax assets: Loss carryforwards 6,465,100 6,016,600 Property and equipment and intangible assets 55,600 0 Pension plan withdrawal exp in excess of payments 138,700 132,400 Stock options and warrants 1,593,900 1,396,100 Subsidiary acquisition basis step up 21,400 42,800 Allowance for doubtful accounts 11,200 34,400 Deferred compensation and unpaid salaries 86,900 95,800 Litigation settlement - non-cash portion 54,500 54,500 Other 100 400 Less valuation allowance (8,427,400) (7,704,300) 0 0 |
Note 9. Income Tax Matters_ S52
Note 9. Income Tax Matters: Schedule of Components of Income Tax Expense (Benefit) (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Tables/Schedules | |
Schedule of Components of Income Tax Expense (Benefit) | 2015 2014 Provision at statutory rate (773,200) (598,500) (Decrease) increase in income taxes resulting from: Change in valuation allowance 723,100 587,500 Penalties 49,400 8,100 Other 700 2,900 $0 $0 |
Note 1. Operations and Summar53
Note 1. Operations and Summary of Significant Accounting Policies: Property and Equipment, Policy (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Details | ||
Depreciation | $ 225,613 | $ 179,743 |
Note 1. Operations and Summar54
Note 1. Operations and Summary of Significant Accounting Policies: Intangible Assets, Policy (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Details | ||
Amortization of Intangible Assets | $ 0 | $ 7,941 |
Note 1. Operations and Summar55
Note 1. Operations and Summary of Significant Accounting Policies: Equity Method Investments, Policy (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Income (Loss) from Equity Method Investments | $ 0 | $ (10,000) |
N-Viro Energy Limited | ||
Income (Loss) from Equity Method Investments | $ 10,000 |
Note 1. Operations and Summar56
Note 1. Operations and Summary of Significant Accounting Policies: Loss Per Common Share, Policy (Details) - shares | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Details | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 2,640,231 | 2,615,231 |
Note 2. Balance Sheet Data_ P57
Note 2. Balance Sheet Data: Property and Equipment (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Details | ||
Buildings and Improvements, Gross | $ 476,603 | $ 452,362 |
Machinery and Equipment, Gross | 1,162,779 | 2,280,636 |
Property, Plant and Equipment, Other, Gross | 213,429 | 0 |
Furniture and Fixtures, Gross | 55,383 | 57,503 |
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment | $ 1,415,218 | $ 1,791,649 |
Note 2. Balance Sheet Data (Det
Note 2. Balance Sheet Data (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Details | ||
Stock Issued During Period, Value, Share-based Compensation, Gross | $ 728,500 | $ 446,800 |
Note 2. Balance Sheet Data_ D59
Note 2. Balance Sheet Data: Deferred Costs - Stock and Warrants issued for services Disclosure (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Deferred Costs, Current | $ 54,167 | $ 597,789 |
Financial Genetics, LLC | ||
Deferred Costs, Current | 54,167 | 0 |
Strategic Asset Management, Inc. | ||
Deferred Costs, Current | 0 | 125,251 |
Dynasty Wealth, Inc. | ||
Deferred Costs, Current | 0 | 326,329 |
Global IR Group, Inc | ||
Deferred Costs, Current | $ 0 | $ 146,208 |
Note 2. Balance Sheet Data_ S60
Note 2. Balance Sheet Data: Schedule of Accrued Liabilities (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Details | ||
Accrued Salaries, Current | $ 95,125 | $ 157,456 |
Deferred Compensation Liability, Current | 160,670 | 124,306 |
Interest Payable, Current | $ 63,830 | $ 38,445 |
Note 3. Pledged Assets and Lo61
Note 3. Pledged Assets and Long-term Debt (Details) - USD ($) | 1 Months Ended | |||
Dec. 31, 2015 | Feb. 01, 2016 | Dec. 31, 2014 | Sep. 30, 2014 | |
Debt Instrument, Interest Rate, Stated Percentage | 10.00% | |||
Secured Debt, Current | $ 6,200 | |||
Debt Instrument, Convertible, Terms of Conversion Feature | The holder can elect to convert all or part of the debt into restricted shares of the Company’s common stock for a price equaling the lesser of $0.43 or a 40% discount to the lowest trading price during the previous twenty (20) trading days to the date of the conversion notice. The Company was also required to reserve 1,250,000 authorized but unissued shares of its common stock, per an irrevocable letter to the Company’s transfer agent. | |||
Debt Instrument, Unamortized Discount | $ 81,425 | |||
Companys debenture holders | ||||
Debt Default, Short-term Debt, Amount | $ 365,000 | |||
Debt Instrument, Interest Rate, Stated Percentage | 8.00% | |||
Debt Instrument, Convertible, Conversion Price | $ 2 | |||
Central States Southeast and Southwest Areas Pension Fund | ||||
Debt Default, Short-term Debt, Amount | $ 408,031 | |||
Liabilities Subject to Compromise, Pension and Other Postretirement Obligations | $ 415,000 | |||
Debt Instrument, Periodic Payment Terms, Balloon Payment to be Paid | $ 312,000 | |||
David and Edna Kasmoch | ||||
Debt Default, Short-term Debt, Amount | $ 200,000 | |||
Debt Instrument, Interest Rate, Stated Percentage | 12.00% | |||
N-Viro Energy Limited | ||||
Debt Instrument, Interest Rate, Stated Percentage | 5.00% |
Note 3. Pledged Assets and Lo62
Note 3. Pledged Assets and Long-term Debt: Schedule of Long-term Debt (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Notes Payable, Related Parties, Current | $ 200,000 | $ 244,480 |
Pension and Other Postretirement Defined Benefit Plans, Current Liabilities | 408,031 | 68,917 |
Convertible Debt, Current | 365,000 | 455,000 |
Other Notes Payable, Current | 6,182 | 32,818 |
Notes Payable to Bank, Current | 32,830 | 36,550 |
Convertible Notes Payable, Current | 43,575 | 0 |
Long-term Debt, Current Maturities | 1,055,618 | 831,583 |
Central States Southeast and Southwest Areas Pension Fund | ||
Pension and Other Postretirement Defined Benefit Plans, Current Liabilities | 408,031 | 389,389 |
David and Edna Kasmoch | ||
Notes Payable, Related Parties, Current | 200,000 | 200,000 |
N-Viro Energy Limited | ||
Notes Payable, Related Parties | $ 0 | $ 44,480 |
Note 4. Capital Lease, in Def63
Note 4. Capital Lease, in Default: Schedule of Capital Leased Assets (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Capital Leases, Lessee Balance Sheet, Assets by Major Class, Accumulated Depreciation | $ 133,111 | $ 49,040 |
Bowling Green Holdings, LLC | ||
Capital Leased Assets, Gross | $ 420,346 | $ 420,346 |
Note 4. Capital Lease, in Def64
Note 4. Capital Lease, in Default (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Capital Leases, Income Statement, Interest Expense | $ 53,424 | $ 35,508 |
Bowling Green Holdings, LLC | ||
Capital Leases, Income Statement, Amortization Expense | $ 84,071 | $ 49,040 |
Note 4. Capital Lease, in Def65
Note 4. Capital Lease, in Default: Schedule of Future Minimum Lease Payments for Capital Leases (Details) | Dec. 31, 2015USD ($) |
Details | |
Capital Leases, Future Minimum Payments Due, Next Twelve Months | $ 220,000 |
Capital Leases, Future Minimum Payments Due in Two Years | 120,000 |
Capital Leases, Future Minimum Payments Due in Three Years | 120,000 |
Capital Leases, Future Minimum Payments Due in Four Years | 50,000 |
Capital Leases, Future Minimum Payments Due | 510,000 |
Capital Leases, Future Minimum Payments, Interest Included in Payments | 134,564 |
Capital Leases, Future Minimum Payments, Present Value of Net Minimum Payments | $ 375,436 |
Note 5. Related Party Transac66
Note 5. Related Party Transactions (Details) - Gardenscape - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Proceeds from Sale of Other Property, Plant, and Equipment | $ 81,275 | |
Direct Costs of Leased and Rented Property or Equipment | $ 48,500 | $ 27,000 |
Note 6. Equity Transactions (De
Note 6. Equity Transactions (Details) - USD ($) | 4 Months Ended | 5 Months Ended | 6 Months Ended | 12 Months Ended | |
Apr. 30, 2015 | Oct. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | |
Stock Issued During Period in lieu of rent | $ 0 | $ 122,177 | |||
Stock Issued During Period, Shares, New Issues | 410,000 | 156,000 | 604,650 | ||
Sale of Stock, Price Per Share | $ 1 | $ 1.25 | $ 1 | ||
Stock Issued During Period, Shares, Treasury Stock Reissued | 30,000 | 91,500 | |||
Proceeds from Issuance of Common Stock | $ 603,265 | $ 696,030 | |||
Independent directors | |||||
Stock Issued During Period, Shares, Issued for Services | 9,414 | 25,357 | |||
Stock Issued During Period, Value, Issued for Services | $ 13,000 | $ 26,500 | |||
Thomas W. Muldowney | |||||
Stock Issued During Period, Shares, Issued for Services | 13,028 | ||||
Deerpoint Development Co., Ltd | |||||
Stock Issued During Period in lieu of rent | $ 20,400 | $ 10,200 | |||
Stock Issued During Period, Shares, Issued for Services | 16,106 | ||||
Shares Issued, Price Per Share | $ 1.43 | ||||
D&B Colon Leasing | |||||
Stock Issued During Period in lieu of rent | $ 27,500 | ||||
Stock Issued During Period, Shares, Issued for Services | 20,997 | ||||
Shares Issued, Price Per Share | $ 1.48 |
Note 6. Equity Transactions_ 68
Note 6. Equity Transactions: Stock Option Plans, Director Policy (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Independent directors | ||
Stock Option Plan Expense - Directors | $ 130,300 | $ 132,100 |
Note 6. Equity Transactions_ 69
Note 6. Equity Transactions: Stock Warrants, Modifications (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Details | ||
Proceeds from Warrant Exercises | $ 0 | $ 121,952 |
Note 6. Equity Transactions_ 70
Note 6. Equity Transactions: Schedule of Stock Options, Activity (Details) - $ / shares | Dec. 31, 2015 | Dec. 31, 2014 |
Details | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 165,000 | 377,500 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 1,250 | 2,500 |
Share-based Compensation Arrangements by Share-based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price | $ 1.65 | $ 1.90 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested Options Forfeited, Number of Shares | 38,750 | 70,750 |
Share-based Compensation Arrangements by Share-based Payment Award, Options, Forfeitures in Period, Weighted Average Exercise Price | $ 1.93 | $ 2.33 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 2,640,231 | 2,515,231 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price | $ 1.90 | $ 1.91 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number | 2,615,231 | 2,442,731 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price | $ 1.91 | $ 1.92 |
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ 1.84 | $ 0.84 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Number | 2,640,231 | 2,515,231 |
Note 6. Equity Transactions_ 71
Note 6. Equity Transactions: Schedule of Stock Options, Valuation Assumptions (Details) | Dec. 31, 2015 | Dec. 31, 2014 |
Details | ||
Fair Value Assumptions, Expected Dividend Rate | 0.00% | 0.00% |
Fair Value Assumptions, Weighted Average Volatility Rate | 287.40% | 287.00% |
Fair Value Assumptions, Risk Free Interest Rate | 1.40% | 2.20% |
Fair Value Assumptions, Expected Term | 7 years | 7 years |
Note 6. Equity Transactions_ 72
Note 6. Equity Transactions: Schedule of Stock Warrants, Activity (Details) - shares | Dec. 31, 2015 | Dec. 31, 2014 |
Details | ||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Exercised | 22,400 | 250,009 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period | 0 | 25,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding, Number | 2,679,742 | 2,624,142 |
Note 8. Commitments and Conti73
Note 8. Commitments and Contingencies (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Due to Officers or Stockholders, Current | $ 255,800 | |||
Settlement Liabilities, Current | 2,000 | $ 16,000 | ||
Deerpoint Development Co., Ltd | ||||
Operating Leases, Rent Expense, Minimum Rentals | $ 40,800 | |||
Operating Leases, Rent Expense, Net | 43,400 | 40,800 | ||
A-C Valley Industrial Park | ||||
Operating Leases, Rent Expense, Net | 12,000 | 12,000 | ||
D&B Colon Leasing | ||||
Operating Leases, Rent Expense, Net | 0 | 22,500 | ||
County of Volusia, Florida | ||||
Operating Leases, Rent Expense, Net | 0 | 15,000 | ||
Caterpillar Financial | ||||
Operating Leases, Rent Expense, Minimum Rentals | $ 28,400 | $ 37,900 | ||
Officer | ||||
Officers' Compensation | 150,000 | |||
Robert W. Bohmer | ||||
Officers' Compensation | 57,200 | |||
James K. McHugh | ||||
Officers' Compensation | 125,000 | |||
Timothy R. Kasmoch | ||||
Operating Leases, Rent Expense, Net | $ 22,000 | $ 19,800 |
Note 9. Income Tax Matters_ S74
Note 9. Income Tax Matters: Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Details | ||
Deferred Tax Liabilities, Property, Plant and Equipment | $ 0 | $ (68,700) |
Deferred Tax Assets, Operating Loss Carryforwards | 6,465,100 | 6,016,600 |
Deferred Tax Assets, Property, Plant and Equipment | 55,600 | 0 |
Deferred Tax Assets, Tax Deferred Expense, Compensation and Benefits, Postretirement Benefits | 138,700 | 132,400 |
Deferred Tax Assets, Tax Deferred Expense, Compensation and Benefits, Share-based Compensation Cost | 1,593,900 | 1,396,100 |
Deferred Tax Assets, Investment in Subsidiaries | 21,400 | 42,800 |
Deferred Tax Assets, Tax Deferred Expense, Reserves and Accruals, Allowance for Doubtful Accounts | 11,200 | 34,400 |
Deferred Tax Assets, Other | 100 | 400 |
Deferred Tax Assets, Valuation Allowance | $ (8,427,400) | $ (7,704,300) |
Note 9. Income Tax Matters_ S75
Note 9. Income Tax Matters: Schedule of Components of Income Tax Expense (Benefit) (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Details | ||
Current Income Tax Expense (Benefit) | $ (773,200) | $ (598,500) |
Effective Income Tax Rate Reconciliation, Change in Deferred Tax Assets Valuation Allowance, Amount | 723,100 | 587,500 |
Effective Income Tax Rate Reconciliation, Nondeductible Expense, Amount | 49,400 | 8,100 |
Effective Income Tax Rate Reconciliation, Nondeductible Expense, Other, Amount | $ 700 | $ 2,900 |
Note 9. Income Tax Matters (Det
Note 9. Income Tax Matters (Details) | Dec. 31, 2015USD ($) |
Details | |
Operating Loss Carryforwards | $ 19,000,000 |
Note 10. Subsequent Events (Det
Note 10. Subsequent Events (Details) - USD ($) | Jul. 15, 2016 | Mar. 04, 2016 | Dec. 31, 2015 | Mar. 31, 2016 | Dec. 31, 2016 | Jan. 21, 2016 | Jan. 15, 2016 | Dec. 31, 2014 |
Debt Instrument, Interest Rate, Stated Percentage | 10.00% | |||||||
Debt Instrument, Convertible, Terms of Conversion Feature | The holder can elect to convert all or part of the debt into restricted shares of the Company’s common stock for a price equaling the lesser of $0.43 or a 40% discount to the lowest trading price during the previous twenty (20) trading days to the date of the conversion notice. The Company was also required to reserve 1,250,000 authorized but unissued shares of its common stock, per an irrevocable letter to the Company’s transfer agent. | |||||||
M & T Business Consultants, Inc. | ||||||||
Stock Issued During Period, Shares, Issued for Services | 50,000 | |||||||
Stock Issued During Period, Value, Issued for Services | $ 43,000 | |||||||
N-Viro Energy Limited | ||||||||
Debt Instrument, Interest Rate, Stated Percentage | 5.00% | |||||||
Notes Receivable, Related Parties | $ 55,000 | |||||||
JMJ Financial | ||||||||
Debt Instrument, Interest Rate, Stated Percentage | 12.00% | |||||||
Debt Instrument, Convertible, Earliest Date | Jul. 15, 2016 | |||||||
Debt Instrument, Convertible, Terms of Conversion Feature | JMJ can elect to convert all or part of the debt into restricted shares of the Company’s common stock for a price equaling the lesser of $0.77 or a 40% discount to the lowest trading price during the previous twenty-five (25) trading days to the date of the conversion notice. The Company was also required to reserve 2,500,000 authorized but unissued shares of its common stock, per an irrevocable Letter of Instructions to the Company’s transfer agent. | |||||||
Tangiers Investment Group, LLC | ||||||||
Debt Instrument, Interest Rate, Stated Percentage | 10.00% | |||||||
Debt Instrument, Convertible, Earliest Date | Mar. 4, 2016 | |||||||
Debt Instrument, Convertible, Terms of Conversion Feature | At any time Tangiers can elect to convert all or part of the debt into restricted shares of the Company‘s common stock for a price equaling the lesser of $0.60 or a 40% discount to the lowest trading price during the previous twenty (20) trading days to the date of the conversion notice. The Company was also required to reserve 700,000 authorized but unissued shares of its common stock, per an irrevocable Letter of Instructions to the Company’s transfer agent. | |||||||
Arrowroot Partners, LLC | ||||||||
Stock Issued During Period, Shares, Issued for Services | 15,460 | |||||||
Stock Issued During Period, Value, Issued for Services | $ 15,000 |