Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | May. 09, 2016 | |
Document and Entity Information: | ||
Entity Registrant Name | N-Viro International Corporation | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2016 | |
Trading Symbol | nvic | |
Amendment Flag | false | |
Entity Central Index Key | 904,896 | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 9,079,826 | |
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 | 2,016 | |
Document Fiscal Period Focus | Q1 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Assets, Current | ||
Cash and Cash Equivalents | $ 13,197 | $ 82,201 |
Accounts Receivable, Net, Current | 117,427 | 80,823 |
Prepaid Expense, Current | 49,886 | 72,739 |
Deferred Costs, Current | 38,381 | 54,167 |
Assets, Current | 218,891 | 289,930 |
Assets, Noncurrent | ||
Property and equipment, net | 463,313 | 492,976 |
Deposits Assets, Noncurrent | 20,687 | 20,027 |
Assets, Noncurrent | 484,000 | 513,003 |
Total Assets | 702,891 | 802,933 |
Liabilities, Current | ||
Accounts Payable | 892,848 | 817,018 |
Short-term convertible Note | 81,485 | 34,193 |
Notes Payable, Current | 18,332 | 39,012 |
Capital Lease Obligations, Current | 154,623 | 133,436 |
Notes Payable, related parties, in default | 200,000 | 200,000 |
Convertible Debt, Current | 365,000 | 365,000 |
Pension plan withdrawal liability - current, in default | 413,639 | 408,031 |
Accrued liabilities | 346,840 | 319,625 |
Liabilities, Current | 2,472,767 | 2,316,315 |
Liabilities, Noncurrent | ||
Long-term convertible Note | 32,461 | 0 |
Capital lease liability - long-term, less current maturities, in default | 220,813 | 242,000 |
Liabilities, Noncurrent | 253,274 | 242,000 |
Total Liabilities | 2,726,041 | 2,558,315 |
Commitments and Contingencies | 0 | 0 |
Stockholders' Deficit | ||
Preferred stock, value | 0 | 0 |
Common stock, value | 89,818 | 89,117 |
Additional Paid in Capital | 33,724,312 | 33,538,262 |
Accumulated Deficit | (35,826,189) | (35,371,670) |
Treasury stock, at cost | 11,091 | 11,091 |
Total Stockholders' Deficit | (2,023,150) | (1,755,382) |
Total Liabilities and Stockholders'' Deficit | $ 702,891 | $ 802,933 |
CONSOLIDATED BALANCE SHEETS - P
CONSOLIDATED BALANCE SHEETS - Parenthetical - $ / shares | Mar. 31, 2016 | Dec. 31, 2015 |
Condensed 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 | 8,981,826 | 8,911,714 |
Common Stock, Shares Outstanding | 8,979,826 | 8,909,714 |
Treasury Stock, at cost - Shares | 2,000 | 2,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Condensed Consolidated Statements of Operations | ||
REVENUES | $ 197,640 | $ 348,919 |
COST OF REVENUES | 221,108 | 352,640 |
GROSS LOSS | (23,468) | (3,721) |
Operating Expenses | ||
Selling, General and Administrative | 344,320 | 447,494 |
Total Operating Expenses | 344,320 | 447,494 |
OPERATING LOSS | (367,788) | (451,215) |
Other Income (Expense) | ||
Interest income | 527 | 43 |
Interest expense | 87,258 | 35,517 |
Total other income (expense) | (86,731) | (35,474) |
LOSS BEFORE INCOME TAXES | (454,519) | (486,689) |
Federal and state income taxes | 0 | 0 |
NET LOSS | $ (454,519) | $ (486,689) |
Earnings Per Share | ||
Basic and diluted loss per share | $ (0.05) | $ (0.06) |
Weighted Average Common Shares Outstanding, Basic and Diluted | 8,920,314 | 8,225,244 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Condensed Consolidated Statements of Cash Flows | ||
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | $ (136,374) | $ (245,674) |
Cash Flows From Investing Activities | ||
Purchases of property and equipment | 0 | 13,273 |
Proceeds from sale of Property and Equipment | 0 | 45,608 |
Increases in (decreases to) restricted cash | 0 | 43 |
Loan made to related party | (55,000) | 0 |
Net Cash Provided by (Used in) Investing Activities | (55,000) | 32,292 |
Cash Flows From Financing Activities | ||
Convertible debt issued, net of OID | 143,050 | 0 |
Principal payments on long-term obligations | (20,680) | (48,988) |
Principal borrowings from (payments on) Notes Payable - related party | 0 | (6,000) |
Private placements of common stock, net | 0 | 373,855 |
Net cash provided by financing activities | 122,370 | 318,867 |
Net Increase (Decrease) in Cash and Cash Equivalents | (69,004) | 105,485 |
Cash and Cash Equivalents - Beginning | 82,201 | 81,854 |
Cash and Cash Equivalents - Ending | $ 13,197 | $ 187,339 |
Note 1. Organization and Basis
Note 1. Organization and Basis of Presentation | 3 Months Ended |
Mar. 31, 2016 | |
Notes | |
Note 1. Organization and Basis of Presentation | Note 1. Organization and Basis of Presentation The accompanying consolidated financial statements of N-Viro International Corporation (the Company) are unaudited but, in management's opinion, reflect all adjustments (including normal recurring accruals) necessary to present fairly such information for the period and at the dates indicated. The results of operations for the three months ended March 31, 2016 may not be indicative of the results of operations for the year ending December 31, 2016. Since the accompanying consolidated financial statements have been prepared in accordance with Article 8 of Regulation S-X, they do not contain all information and footnotes normally contained in annual consolidated financial statements; accordingly, they should be read in conjunction with the consolidated financial statements and notes thereto appearing in the Company's Form 10-K for the period ending December 31, 2015. The financial statements are consolidated as of March 31, 2016, December 31, 2015 and March 31, 2015 for the Company. All intercompany transactions were eliminated. In preparing financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. There have been no changes in the selection and application of significant accounting policies and estimates disclosed in Item 8 Financial Statements and Supplementary Data of our Annual Report on Form 10-K for the year ended December 31, 2015. 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 $2,254,000 at March 31, 2016, and has incurred recurring losses and negative cash flow from operations for the three months ended March 31, 2016 and 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 exercises of common stock options and warrants, new debt and equity issuances. The Company has substantially slowed payments to trade vendors, and has renegotiated payment terms with several existing and prior vendors to lengthen the time and/or reduce the amount of cash to repay these trade payables. In 2014 and 2015, the Company issued new equity for total cash realized of approximately $1.3 million. 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 represented substantially all of our 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 has materially reduced available cash to fund current or prior expenses incurred, and has remained at this lower level or decreased over subsequent periods to date. These factors raise substantial doubt about the Companys ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Certain amounts in the Condensed Consolidated Balance Sheets at December 31, 2015 have been reclassified to conform to the current period presentation. |
Note 2. Notes Receivable
Note 2. Notes Receivable | 3 Months Ended |
Mar. 31, 2016 | |
Notes | |
Note 2. Notes Receivable | Note 2. Notes Receivable In January 15 2016, the Company entered into a Promissory Note (the Note Receivable) for $100,000 with N-Viro Energy Limited (Ltd), and concurrently advanced Ltd $55,000 of cash for expenses in connection with its China project. The Note Receivable was due on April 15, 2016 at a stated interest rate of 5% per annum. The entire balance of principal and related accrued interest receivable has been fully reserved, as collectability is deemed doubtful, and a charge to earnings has been recorded at March 31, 2016. In May 2 2016, the Company agreed to a revised Note Receivable for $120,000 , and concurrently advanced Ltd $65,000 of cash for expenses in connection with its China project. No other terms of the Note Receivable were changed, and the Note Receivable is in default as of the date of this filing. |
Note 3. Notes Payable
Note 3. Notes Payable | 3 Months Ended |
Mar. 31, 2016 | |
Notes | |
Note 3. Notes Payable | Note 3. Notes Payable 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 Companys President and Chief Executive Officer, at 12% interest and prepaid for a period of three months, renewable for an additional three months by the prepayment of additional interest and secured by certain equipment. Timothy Kasmoch has personally guaranteed the repayment of this Note. As of March 31, 2016 the Note was past due and the Company is in default. The Company expects to extend the Note in the near future and pay it in full in 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 as well as defaulted payments under the related BGH capital lease discussed in Note 4, along with additional accrued interest and penalties. At December 31, 2015 and March 31, 2016, the Company accrued a total of $95,780 and $123,920, respectively, 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 Companys assets and future rights to assets. As of the date of this filing, the Company is not in compliance with the new settlement agreement, . 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 Companys the Companys , reducing the amount of Debentures that remain outstanding and in default at March 31, 2016 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, January 2016 and April 2016. 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. In October 2015, the Company financed its directors and officers insurance and borrowed $30,100 over 10 months at 9% interest, monthly payments of $3,136 and unsecured. The amount owed on this note as of March 31, 2016 was $18,332 In December 31 2015, the Company entered into an agreement with JSJ Investments, Inc. (JSJ) to issue a convertible promissory note (JSJ Note) to the Company for $125,000 in cash, less $10,000 in fees paid in debt issuance costs to a third party. The JSJ 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. JSJ can elect to convert all or part of the debt into restricted shares of the Companys 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 Companys 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 the JSJ 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 ratably over the nine month note term. The total amount owed on the JSJ Note was $125,000 and the gross discount was $58,474 , including net debt issuance costs of $6,049, as of March 31, 2016. The carrying amount on the JSJ Note was $66,527 as of March 31, 2016. In 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 $500,000, with an initial loan of $100,000 in cash, less $6,950 in debt issuance costs paid to Craft Capital Management, LLC (Craft). Craft also received 4,000 stock warrants, valued at $3,000 (gt $9,950 ), 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 180 days from the agreement date, JMJ can elect to convert all or part of the debt into restricted shares of the Companys 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 Companys 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 the JMJ Note was determined to be a beneficial conversion feature and was recorded as a debt discount at fair value of $67,000. This debt discount is being amortized to interest expense ratably over the two year note term. The total amount owed on the JMJ Note was $100,000 and the gross discount was $67,539 , including net debt issuance costs of $8,914, as of March 31, 2016. The carrying amount on the JMJ Note was $32,461 as of March 31, 2016, and is classified as long-term debt on the balance sheet. In March 4 2016, 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. 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 Companys 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 Companys 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 the Tangiers Note was determined to be a beneficial conversion feature and was recorded as a debt discount at fair value of $39,000. This debt discount is being amortized to interest expense ratably over the one year note term. The total amount owed on the Tangiers Note was $58,500 and the gross discount was $43,542 as of March 31, 2016. The carrying amount on the Tangiers Note was $14,958 as of March 31, 2016. |
Note 4. Capital Lease, in Defau
Note 4. Capital Lease, in Default | 3 Months Ended |
Mar. 31, 2016 | |
Notes | |
Note 4. Capital Lease, in Default | Note 4. Capital Lease, in default In June 1 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 Companys President and Chief Executive Officer. The lease term is for five years beginning June 1, 2014 and a monthly payment of $10,000. 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. Depreciation on assets under capital leases charged to expense for both the three months ended March 31, 2016 and 2015 was $21,007, recorded as cost of sales. Interest charged related to capital lease liabilities for the three months ended March 31, 2016 and 2015 was $11,747 and $14,275, respectively, recorded as interest expense. At both March 31, 2016 and December 31, 2015, the Company was delinquent in its payments and in default of its lease agreement however there is no acceleration provision in the lease agreement. The total lease liability at both March 31, 2016 and December 31, 2015 was $375,436. |
Note 5. Commitments and Conting
Note 5. Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2016 | |
Notes | |
Note 5. Commitments and Contingencies | Note 5. Commitments and Contingencies In 2010, the Company and Timothy R. Kasmoch, the President and Chief Executive Officer, entered into an Employment Agreement for a five-year term. Mr. Kasmoch is to receive an annual base salary of $150,000, subject to an annual discretionary increase. In addition, Mr. Kasmoch is eligible for an annual cash bonus and was granted stock options from the Companys Second Amended and Restated 2004 Stock Option Plan. Generally, the Agreement may be terminated by the Company with or without cause or by the Employee for any reason. In March 2016, Mr. Kasmochs Employment Agreement automatically renewed for a one-year term. In 2010, the Company and Robert W. Bohmer, the Executive Vice President and General Counsel, entered into an Employment Agreement for a five-year term. Mr. Bohmer is to receive an annual base salary of $150,000, subject to an annual discretionary increase. In addition, Mr. Bohmer is eligible for an annual cash bonus and was granted stock options from the Companys Second Amended and Restated 2004 Stock Option Plan. Generally, the Agreement may be terminated by the Company with or without cause or by the Employee for any reason. In March 2016, Mr. Bohmers 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. In 2010, the Company and James K. McHugh, the Chief Financial Officer, Secretary and Treasurer, entered into an Employment Agreement for a five-year term. Mr. McHugh is to receive an annual base salary of $125,000, subject to an annual discretionary increase. In addition, Mr. McHugh is eligible for an annual cash bonus and was granted stock options from the Companys Second Amended and Restated 2004 Stock Option Plan. Generally, the Agreement may be terminated by the Company with or without cause or by the Employee for any reason. In March 2016, Mr. McHughs Employment Agreement automatically renewed for a one-year term. As of March 31, 2016, the Company has accrued a liability of approximately $172,000 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 $82,000 in undeferred salary and related payroll taxes, for a combined total of approximately $254,000 in unpaid salaries and related payroll taxes. Additional information about all of the employment agreements for the Companys executive officers is available in Item 11 Executive Compensation in the Form 10-K filed on April 14, 2016. The Companys executive and administrative offices are located in Toledo, Ohio. In April 2011, the Company signed a 68 month lease with Deerpoint Development Co., Ltd. The total minimum rental commitment for the year 2016 is $40,764. The total rental expense included in the statements of operations for each of the three months ended March 31, 2016 and 2015 is approximately $10,200. 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 three months ended March 31, 2016 and 2015 is $3,000. For each of the three months ended March 31, 2016 and 2015, the Company paid a total of $6,600, 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 $15,400 for the remainder of 2016 through the lease term maturing October 31, 2016. 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, in default. 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 $3,155. 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. The total rental expense included in the statements of operations for each of the three months ended March 31, 2016 and 2015 is $9,465. Management believes that all of the Companys properties are adequately covered by insurance. The Company operates in an environment with many financial risks, including, but not limited to, major customer concentrations, customer contract termination provisions, competing technologies, infringement and/or misappropriation of intellectual property rights, the highly competitive and, at times, seasonal nature of the industry and worldwide economic conditions. Various federal, state and governmental agencies are considering, and some have adopted, laws and regulations regarding environmental protection which could adversely affect the business activities of the Company. The Company cannot predict what effect if any, current and future regulations may have on the operations of the Company. From time to time the Company is involved in legal proceedings and subject to claims which may arise in the ordinary course of business. Certain unsecured creditors have brought civil action against the Company related to nonpayment. The Company has not accrued any additional amount related to these charges, but continue to negotiate payment plans to satisfy these creditors. |
Note 6. New Accounting Standard
Note 6. New Accounting Standards | 3 Months Ended |
Mar. 31, 2016 | |
Notes | |
Note 6. New Accounting Standards | Note 6. New Accounting Standards In March 2016, the FASB issued ASU No. 2016-09, "Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting" 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 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" In August 2014, the FASB issued Accounting Standards Update No. 2014-15, Disclosure of Uncertainties About an Entitys Ability to Continue as a Going Concern In April 2015, the FASB issued ASU No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. A variety of proposed or otherwise potential accounting standards are currently under consideration by standard-setting organizations and certain regulatory agencies. Because of the tentative and preliminary nature of such proposed standards, management has not yet determined the effect, if any, the implementation of such proposed standards would have on the Companys consolidated financial statements. |
Note 7. Segment Information
Note 7. Segment Information | 3 Months Ended |
Mar. 31, 2016 | |
Notes | |
Note 7. Segment Information | Note 7. Segment Information The Company determined that it currently operates in one segment based on the financial information upon which the chief operating decision maker regularly assesses performance and allocates resources. The chief operating decision maker is the Chief Executive Officer. |
Note 8. Revenue and Major Custo
Note 8. Revenue and Major Customers | 3 Months Ended |
Mar. 31, 2016 | |
Notes | |
Note 8. Revenue and Major Customers | Note 8. Revenue and Major Customers For the three months ended March 31, 2016 and 2015, the Companys largest customer accounted for approximately 54% and 25% of our revenues, respectively. For the three months ended March 31, 2016 and 2015, the top three customers accounted for approximately 82% and 94%, respectively, of the Companys revenues. The accounts receivable balance due (which are unsecured) for these three customers at March 31, 2016 was approximately $69,000, or 58% of the accounts receivable balance. The Companys sludge processing agreement with Altamonte Springs, which was its largest customer in 2014, its second largest in 2015 and its largest in the first quarter of 2016, representing approximately 54% of Company revenues, was not renewed effective April 2016. The Companys failure to renew that agreement may have a material adverse effect on its business, financial conditions and results of operations. Beginning in March 2014, the Companys 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 subsequently resumed, this reduction in revenue has materially reduced available cash to fund current or prior expenses incurred, and has remained at this lower level or decreased over subsequent periods to date. 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 9. Basic and Diluted Loss
Note 9. Basic and Diluted Loss Per Share | 3 Months Ended |
Mar. 31, 2016 | |
Notes | |
Note 9. Basic and Diluted Loss Per Share | Note 9. Basic and diluted loss per share Basic and diluted loss per share is computed using the treasury stock method for outstanding stock options and warrants. For the three months ended March 31, 2016 and 2015 the Company incurred a net loss. Accordingly, no stock options or warrants have been included in the computation of diluted loss per share as the impact would be anti-dilutive. |
Note 10. Common Stock
Note 10. Common Stock | 3 Months Ended |
Mar. 31, 2016 | |
Notes | |
Note 10. Common Stock | Note 10. Common Stock In October 2012, the Company issued 300,000 shares of common stock and granted 150,000 stock warrants to Strategic Asset Management, Inc., to extend the period through December 2015 of services performed in connection with a December 2010 Financial Public Relations Agreement. To reflect the entire value of the stock and warrants issued, the Company recorded a non-cash charge to earnings of $421,300 ratably from 2013 to 2015. For the three months ended March 31, 2016 and 2015, the charge to earnings was approximately $-0- and $34,200, respectively. In September 2014, the Company executed a Financial Public Relations Agreement with Dynasty Wealth, Inc., for a one year term. For its services, the Company issued Dynasty Wealth 350,000 warrants to purchase the Company's unregistered common stock at an exercise price of $1.50 per share, and $10,000 per month, to be paid in either cash or shares of the Companys unregistered common stock at the Companys discretion. To reflect the entire value of the warrants issued, the Company recorded a non-cash charge to earnings of $460,700 ratably through September 14, 2015, the ending date of the agreement. For the three months ended March 31, 2016 and 2015 the charge to earnings for the entire agreement was approximately $-0- and $145,200, respectively, of which the non-cash portion of the agreement was approximately $-0- and $115,200, respectively. In November 2014, the Company executed a Public Relations Agreement with Global IR Group, Inc., for a one year term. For its services, the Company issued Global IR 100,000 shares of the Companys unregistered common stock. To reflect the entire value of the stock issued, the Company was recording a non-cash charge to earnings of $165,000 ratably through November 2015, the original ending date of the agreement. For the three months ended March 31, 2016 and 2015, the charge to earnings was approximately $-0- and $41,300, respectively. In July 2015, the Company executed a Public Relations Agreement with Financial Genetics, LLC, for a one year term. For its services, the Company issued Financial Genetics 100,000 shares of the Companys unregistered common stock. To reflect the entire value of the Agreement, the Company is recording a non-cash charge to earnings of $100,000 ratably through July 2016, the ending date of the agreement. For the three months ended March 31, 2016 and 2015, the charge to earnings was $25,000 and $-0-, respectively. 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 if they are successful in obtaining debt or equity financing. In late 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 Companys unregistered common stock. To reflect the entire value of the Agreement, the Company is recording a non-cash charge to earnings of $43,000 ratably between March and April 2016, the ending date of the agreement. For the three months ended March 31, 2016 and 2015, the charge to earnings was $33,786 and $-0-, respectively. In March 31 2016, the Company issued a total of 4,652 shares of unregistered common stock, valued at a total of $4,000, to four independent directors in lieu of cash owed for a board meeting attended. To reflect the value of the stock issued, the Company recorded a charge to earnings totaling $4,000 in the first quarter of 2016. In all of the issuances contained in this Note 10, 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 for more details see Note 12. |
Note 11. Stock Options
Note 11. Stock Options | 3 Months Ended |
Mar. 31, 2016 | |
Notes | |
Note 11. Stock Options | Note 11. Stock Options The Company records share-based compensation expense for stock options based on the estimated fair value of the options on the date of grant using the Black-Scholes valuation model. The Company uses historical data among other factors to estimate the expected price volatility, the expected option term and the expected forfeiture rate. The risk-free rate is based on the U.S. Treasury yield curve in effect at the date of grant for the expected term of the option. The Company has a stock option plan approved in May 2004, amended in June 2008 and again in August 2009 (the 2004 Plan), for directors and key employees under which 2,500,000 shares of common stock could have been issued. No other shares can be issued from the 2004 Plan, and approximately 1,588,000 options are outstanding as of March 31, 2016. All stock options granted were fully vested and expensed and therefore there no compensation expense was recorded related to the 2004 Plan for the three months ended March 31, 2016 and 2015. The Company 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. Non-director stock option agreements, unless otherwise stated in the agreement, are 20% vested on the date of grant, with the balance vesting 20% per year over the next four years. The Company grants stock options to its directors as compensation for services performed. All director 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. The Company granted 20,000 new stock options to directors with an exercise price of $0.86 per share during the three months ended March 31, 2016. Approximately 1,063,000 options are outstanding as of March 31, 2016. Total compensation expense was $15,800 and $45,900 for the three months ended March 31, 2016 and 2015, respectively, for stock options issued under the 2010 Plan. |
Note 12. Stock Warrants
Note 12. Stock Warrants | 3 Months Ended |
Mar. 31, 2016 | |
Notes | |
Note 12. Stock Warrants | Note 12. Stock Warrants The Company records compensation expense for stock warrants based on the estimated fair value of the warrants on the date of grant using the Black-Scholes valuation model. The Company uses historical data among other factors to estimate the expected price volatility, the expected warrant term and the expected forfeiture rate. The risk-free rate is based on the U.S. Treasury yield curve in effect at the date of grant for the expected term of the warrant. In January 2016, the Company issued 4,000 warrants in connection with the debt financing with JMJ Financial. More details can be found in Note 3, Notes Payable. Approximately 2,684,000 warrants are eligible for exercise at a weighted average exercise price of $1.06 per warrant, as of March 31, 2016. |
Note 13. Income Tax
Note 13. Income Tax | 3 Months Ended |
Mar. 31, 2016 | |
Notes | |
Note 13. Income Tax | Note 13. Income Tax For the three months ended March 31, 2016 and 2015, we are fully reserving our deferred tax asset value to zero as we have not recognized the future tax benefit of current or prior period losses due to our history of operating losses. Accordingly, our effective tax rate for each period was -0-%. |
Note 14. Supplemental Disclosur
Note 14. Supplemental Disclosure of Cash Flows Information | 3 Months Ended |
Mar. 31, 2016 | |
Notes | |
Note 14. Supplemental Disclosure of Cash Flows Information | Note 14. Supplemental Disclosure of Cash Flows Information The cash paid for interest during the three months ended March 31, 2016 and 2015 was $6,594 and $42,496, respectively. During the three months ended March 31, 2016, the Company issued common stock with a fair value of $43,000 as part of a consulting contract. During the three months ended March 31, 2015, the Company issued common stock with a fair value of $81,244 as part of a conversion of debentures. |
Note 15. Subsequent Events
Note 15. Subsequent Events | 3 Months Ended |
Mar. 31, 2016 | |
Notes | |
Note 15. Subsequent Events | Note 15. Subsequent Events In April 30 2016, the Company entered into an agreement with Tangiers Global, LLC (Tangiers Global), to issue a 10% Convertible Promissory Note (Tangiers Global Note) to us for $110,000 in cash, less $10,000 in original issue discount retained by Tangiers Global. The Tangiers Global 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 April 2016 effective date. At any time Tangiers Global can elect to convert all or part of the debt into restricted shares of the Companys 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 1,400,000 authorized but unissued shares of its common stock, per an irrevocable Letter of Instructions to the Companys 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 the Tangiers Global Note was determined to be a beneficial conversion feature and will be recorded as a debt discount at fair value of $73,000. This debt discount will be amortized to interest expense ratably over the one year note term starting in the second quarter of 2016. In April 30 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. In May 31 2016, the Company agreed to a revised Promissory Note from N-Viro Energy Limited (Ltd) for $120,000, and concurrently advanced Ltd $65,000 cash for expenses in connection with its China project. No other terms of the Promissory Note were changed, and the Promissory Note is in default as of the date of this filing. More details can be found in Note 2, Notes Receivable. |
Note 1. Organization and Basi21
Note 1. Organization and Basis of Presentation: Consolidation Policy (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Policies | |
Consolidation Policy | The financial statements are consolidated as of March 31, 2016, December 31, 2015 and March 31, 2015 for the Company. All intercompany transactions were eliminated. |
Note 1. Organization and Basi22
Note 1. Organization and Basis of Presentation: Basis of Accounting, Policy (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Policies | |
Basis of Accounting, Policy | In preparing financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. There have been no changes in the selection and application of significant accounting policies and estimates disclosed in Item 8 Financial Statements and Supplementary Data of our Annual Report on Form 10-K for the year ended December 31, 2015. |
Note 1. Organization and Basi23
Note 1. Organization and Basis of Presentation: Substantial Doubt about Going Concern (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Policies | |
Substantial Doubt about Going Concern | The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company has negative working capital of approximately $2,254,000 at March 31, 2016, and has incurred recurring losses and negative cash flow from operations for the three months ended March 31, 2016 and 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 exercises of common stock options and warrants, new debt and equity issuances. The Company has substantially slowed payments to trade vendors, and has renegotiated payment terms with several existing and prior vendors to lengthen the time and/or reduce the amount of cash to repay these trade payables. In 2014 and 2015, the Company issued new equity for total cash realized of approximately $1.3 million. 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 represented substantially all of our 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 has materially reduced available cash to fund current or prior expenses incurred, and has remained at this lower level or decreased over subsequent periods to date. These factors raise substantial doubt about the Companys ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. |
Note 5. Commitments and Conti24
Note 5. Commitments and Contingencies: Commitments and Contingencies, Policy (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
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 5. Commitments and Conti25
Note 5. Commitments and Contingencies: Legal Costs, Policy (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
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 6. New Accounting Standa26
Note 6. New Accounting Standards: New Accounting Pronouncements, Policy (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Policies | |
New Accounting Pronouncements, Policy | A variety of proposed or otherwise potential accounting standards are currently under consideration by standard-setting organizations and certain regulatory agencies. Because of the tentative and preliminary nature of such proposed standards, management has not yet determined the effect, if any, the implementation of such proposed standards would have on the Companys consolidated financial statements. |
Note 7. Segment Information_ Se
Note 7. Segment Information: Segment Reporting Policy (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Policies | |
Segment Reporting Policy | The Company determined that it currently operates in one segment based on the financial information upon which the chief operating decision maker regularly assesses performance and allocates resources. The chief operating decision maker is the Chief Executive Officer. |
Note 8. Revenue and Major Cus28
Note 8. Revenue and Major Customers: Major Customers, Policy (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
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 9. Basic and Diluted Los29
Note 9. Basic and Diluted Loss Per Share: Earnings Per Share Policy, Diluted (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Policies | |
Earnings Per Share Policy, Diluted | Basic and diluted loss per share is computed using the treasury stock method for outstanding stock options and warrants. For the three months ended March 31, 2016 and 2015 the Company incurred a net loss. Accordingly, no stock options or warrants have been included in the computation of diluted loss per share as the impact would be anti-dilutive. |
Note 11. Stock Options_ Share-b
Note 11. Stock Options: Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Method Used (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Policies | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Method Used | The Company records share-based compensation expense for stock options based on the estimated fair value of the options on the date of grant using the Black-Scholes valuation model. The Company uses historical data among other factors to estimate the expected price volatility, the expected option term and the expected forfeiture rate. The risk-free rate is based on the U.S. Treasury yield curve in effect at the date of grant for the expected term of the option. |
Note 11. Stock Options_ Share31
Note 11. Stock Options: Share-based Compensation, Option and Incentive Plans Policy (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Policies | |
Share-based Compensation, Option and Incentive Plans Policy | The Company 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. Non-director stock option agreements, unless otherwise stated in the agreement, are 20% vested on the date of grant, with the balance vesting 20% per year over the next four years. |
Note 11. Stock Options_ Share32
Note 11. Stock Options: Share-based Compensation, Option and Incentive Plans, Director Policy (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Policies | |
Share-based Compensation, Option and Incentive Plans, Director Policy | The Company grants stock options to its directors as compensation for services performed. All director options granted are for a period of ten years from the date of issuance, are pursuant to the 2010 Plan, and vest six (6) months from the issuance date. |
Note 12. Stock Warrants_ Share-
Note 12. Stock Warrants: Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Other, Description (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Policies | |
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Other, Description | The Company records compensation expense for stock warrants based on the estimated fair value of the warrants on the date of grant using the Black-Scholes valuation model. The Company uses historical data among other factors to estimate the expected price volatility, the expected warrant term and the expected forfeiture rate. The risk-free rate is based on the U.S. Treasury yield curve in effect at the date of grant for the expected term of the warrant. |
Note 13. Income Tax_ Income Tax
Note 13. Income Tax: Income Tax, Policy (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Policies | |
Income Tax, Policy | For the three months ended March 31, 2016 and 2015, we are fully reserving our deferred tax asset value to zero as we have not recognized the future tax benefit of current or prior period losses due to our history of operating losses. Accordingly, our effective tax rate for each period was -0-%. |
Note 2. Notes Receivable (Detai
Note 2. Notes Receivable (Details) - USD ($) | May. 02, 2016 | Mar. 31, 2016 |
N-Viro Energy Limited | ||
Notes Receivable, Related Parties, Current | $ 120,000 | $ 55,000 |
Note 3. Notes Payable (Details)
Note 3. Notes Payable (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||
Mar. 31, 2016 | Dec. 31, 2015 | Jan. 15, 2017 | Sep. 30, 2016 | Mar. 04, 2017 | Mar. 04, 2016 | Jan. 15, 2016 | |
Convertible Debt, Current | $ 365,000 | $ 365,000 | |||||
Short-term Debt, Percentage Bearing Fixed Interest Rate | 9.00% | ||||||
Unsecured Debt, Current | $ 18,332 | ||||||
JSJ Investments, Inc. | |||||||
Debt Instrument, Interest Rate, Stated Percentage | 10.00% | ||||||
Debt Instrument, Face Amount | $ 125,000 | ||||||
Debt Instrument, Fee Amount | 10,000 | ||||||
Debt Instrument, Convertible, Terms of Conversion Feature | JSJ 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, Current | 58,474 | ||||||
Long-term Debt, Gross | 66,527 | ||||||
JMJ Financial | |||||||
Debt Instrument, Interest Rate, Stated Percentage | 12.00% | ||||||
Debt Instrument, Face Amount | $ 100,000 | ||||||
Debt Instrument, Fee Amount | $ 9,950 | ||||||
Debt Instrument, Convertible, Terms of Conversion Feature | After 180 days from the agreement date, 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. | ||||||
Debt Instrument, Unamortized Discount, Current | 67,539 | ||||||
Long-term Debt, Gross | 32,461 | ||||||
Tangiers Investment Group, LLC | |||||||
Debt Instrument, Interest Rate, Stated Percentage | 10.00% | ||||||
Debt Instrument, Face Amount | $ 58,500 | ||||||
Debt Instrument, Fee Amount | $ 8,500 | ||||||
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. | ||||||
Debt Instrument, Unamortized Discount, Current | 43,542 | ||||||
Long-term Debt, Gross | 14,958 | ||||||
Central States Southeast and Southwest Areas Pension Fund | |||||||
Liabilities Subject to Compromise, Pension and Other Postretirement Obligations | 413,639 | $ 408,031 | |||||
David and Edna Kasmoch | |||||||
Debt Default, Short-term Debt, Amount | $ 200,000 | ||||||
Debt Instrument, Interest Rate, Stated Percentage | 12.00% | ||||||
Debt Default, Short-term Debt, Description of Notice of Default | In September 2015, the Company received a demand letter from counsel for the Note holder declaring a default under the Note. Counsel demanded payment of the entire amount due under the Note as well as defaulted payments under the related BGH capital lease discussed in Note 4, along with additional accrued interest and penalties. | 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 as well as defaulted payments under the related BGH capital lease discussed in Note 4, along with additional accrued interest and penalties. |
Note 4. Capital Lease, in Def37
Note 4. Capital Lease, in Default (Details) - Bowling Green Holdings, LLC - USD ($) | 3 Months Ended | |||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | Jun. 01, 2014 | |
Capital Lease Obligations | $ 375,436 | $ 375,436 | $ 420,346 | |
Capital Leases, Income Statement, Amortization Expense | 21,007 | $ 21,007 | ||
Capital Leases, Income Statement, Interest Expense | $ 11,747 | $ 14,275 |
Note 5. Commitments and Conti38
Note 5. Commitments and Contingencies (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | |
Due to Officers, Current | $ 254,000 | |||
Deerpoint Development Co., Ltd | ||||
Operating Leases, Rent Expense, Minimum Rentals | $ 40,764 | |||
Operating Leases, Rent Expense, Net | 10,200 | $ 10,200 | ||
A-C Valley Industrial Park | ||||
Operating Leases, Rent Expense, Net | 3,000 | 3,000 | ||
Caterpillar Financial | ||||
Operating Leases, Rent Expense, Minimum Rentals | $ 28,400 | 37,900 | ||
Operating Leases, Rent Expense, Net | 9,465 | 9,465 | ||
Timothy R. Kasmoch | ||||
Officers' Compensation | 150,000 | |||
Operating Leases, Rent Expense, Net | $ 6,600 | $ 6,600 | ||
Robert W. Bohmer | ||||
Officers' Compensation | 57,200 | |||
James K. McHugh | ||||
Officers' Compensation | $ 125,000 |
Note 10. Common Stock (Details)
Note 10. Common Stock (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2012 | |
Noninterest Expense Directors Fees | $ 4,000 | |||||
Independent directors | ||||||
Noninterest Expense Directors Fees | 4,000 | |||||
Strategic Asset Management, Inc. | ||||||
Stock Issued During Period, Shares, Issued for Services | 300,000 | |||||
Share-based Goods and Nonemployee Services Transaction, Capitalized Cost | $ 421,300 | |||||
Issuance of Stock and Warrants for Services or Claims | 0 | $ 34,200 | ||||
Dynasty Wealth, Inc. | ||||||
Share-based Goods and Nonemployee Services Transaction, Capitalized Cost | $ 460,700 | |||||
Issuance of Stock and Warrants for Services or Claims | 0 | 115,200 | ||||
Global IR Group, Inc | ||||||
Stock Issued During Period, Shares, Issued for Services | 100,000 | |||||
Share-based Goods and Nonemployee Services Transaction, Capitalized Cost | $ 165,000 | |||||
Issuance of Stock and Warrants for Services or Claims | 0 | 41,300 | ||||
Financial Genetics, LLC | ||||||
Stock Issued During Period, Shares, Issued for Services | 100,000 | |||||
Share-based Goods and Nonemployee Services Transaction, Capitalized Cost | $ 100,000 | |||||
Issuance of Stock and Warrants for Services or Claims | $ 25,000 | 0 | ||||
Arrowroot Partners, LLC | ||||||
Stock Issued During Period, Shares, Issued for Services | 15,460 | |||||
Issuance of Stock and Warrants for Services or Claims | $ 15,000 | |||||
M & T Business Consultants, Inc. | ||||||
Stock Issued During Period, Shares, Issued for Services | 50,000 | |||||
Share-based Goods and Nonemployee Services Transaction, Capitalized Cost | $ 43,000 | |||||
Issuance of Stock and Warrants for Services or Claims | $ 33,786 | $ 0 |
Note 11. Stock Options (Details
Note 11. Stock Options (Details) | Mar. 31, 2016shares |
The 2004 Stock Option Plan | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 1,588,000 |
The 2010 Stock Option Plan | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 1,063,000 |
Note 12. Stock Warrants (Detail
Note 12. Stock Warrants (Details) | 3 Months Ended |
Mar. 31, 2016shares | |
Details | |
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Period Increase (Decrease) | 4,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding, Number | 2,684,000 |
Note 13. Income Tax_ Income T42
Note 13. Income Tax: Income Tax, Policy (Details) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Details | ||
Effective Income Tax Rate Reconciliation, Percent | 0.00% | 0.00% |
Note 14. Supplemental Disclos43
Note 14. Supplemental Disclosure of Cash Flows Information (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Details | ||
Interest Paid | $ 6,594 | $ 42,496 |
Other Significant Noncash Transaction, Value of Consideration Given | $ 43,000 | $ 81,244 |
Note 15. Subsequent Events (Det
Note 15. Subsequent Events (Details) - USD ($) | 1 Months Ended | 12 Months Ended |
Apr. 30, 2016 | Apr. 30, 2017 | |
Stock Issued During Period, Shares, New Issues | 100,000 | |
Sale of Stock, Price Per Share | $ 1 | |
Tangiers Global, LLC | ||
Debt Instrument, Interest Rate, Stated Percentage | 10.00% | |
Debt Instrument, Face Amount | $ 110,000 | |
Debt Instrument, Convertible, Terms of Conversion Feature | At any time Tangiers Global 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 1,400,000 authorized but unissued shares of its common stock, per an irrevocable Letter of Instructions to the Company’s transfer agent. |