Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | May 12, 2017 | |
Document And Entity Information | ||
Entity Registrant Name | GlyEco, Inc. | |
Entity Central Index Key | 931,799 | |
Document Type | 10-Q | |
Trading Symbol | GLYE | |
Document Period End Date | Mar. 31, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity a Well-known Seasoned Issuer | No | |
Entity a Voluntary Filer | No | |
Entity's Reporting Status Current | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 130,425,730 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,017 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (unaudited) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Current Assets | ||
Cash | $ 428,997 | $ 1,413,999 |
Cash - restricted | 58,653 | 76,552 |
Accounts receivable, net | 1,127,802 | 1,096,713 |
Prepaid expenses | 334,205 | 340,899 |
Inventories | 1,405,585 | 644,522 |
Total current assets | 3,355,242 | 3,572,685 |
Property, plant and equipment, net | 3,834,061 | 3,657,839 |
Other Assets | ||
Deposits | 387,035 | 387,035 |
Goodwill | 3,822,583 | 3,693,083 |
Other intangible assets, net | 2,662,746 | 2,794,204 |
Total other assets | 6,872,364 | 6,874,322 |
Total assets | 14,061,667 | 14,104,846 |
Current Liabilities | ||
Accounts payable and accrued expenses | 1,847,648 | 961,010 |
Due to related parties | 1,816 | 6,191 |
Contingent acquisition consideration | 1,803,676 | 1,821,575 |
Notes payable - current portion, net of debt discount | 2,629,490 | 2,541,178 |
Capital lease obligations - current portion | 6,206 | 6,838 |
Total current liabilities | 6,288,836 | 5,336,792 |
Non-Current Liabilities | ||
Notes payable - non-current portion | 2,940,652 | 2,963,640 |
Capital lease obligations - non-current portion | 3,060 | 3,371 |
Total non-current liabilities | 2,943,712 | 2,967,011 |
Total liabilities | 9,232,548 | 8,303,803 |
Stockholders' Equity | ||
Preferred stock; 40,000,000 shares authorized; $0.0001 par value; no shares issued and outstanding as of March 31, 2017 and December 31, 2016, respectively | ||
Common stock, 300,000,000 shares authorized; $0.0001 par value; 126,944,190 and 126,156,189 shares issued and outstanding as of March 31, 2017 and December 31, 2016, respectively | 12,694 | 12,616 |
Additional paid-in capital | 42,740,398 | 42,603,490 |
Accumulated deficit | (37,923,973) | (36,815,063) |
Total stockholders' equity | 4,829,119 | 5,801,043 |
Total liabilities and stockholders' equity | $ 14,061,667 | $ 14,104,846 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (unaudited) (Parenthetical) - $ / shares | Mar. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Preferred stock, authorized | 40,000,000 | 40,000,000 |
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
Common stock, authorized | 300,000,000 | 300,000,000 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, issued | 126,944,190 | 126,156,189 |
Common stock, outstanding | 126,944,190 | 126,156,189 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Income Statement [Abstract] | ||
Sales, net | $ 2,290,321 | $ 1,442,898 |
Cost of goods sold | 2,150,586 | 1,305,527 |
Gross profit | 139,735 | 137,371 |
Operating expenses | ||
Consulting fees | 53,426 | 42,560 |
Share-based compensation | 136,986 | 280,764 |
Salaries and wages | 343,055 | 256,450 |
Legal and professional | 160,991 | 98,773 |
General and administrative | 357,213 | 259,488 |
Total operating expenses | 1,051,671 | 938,035 |
Loss from operations | (911,936) | (800,664) |
Other (income) and expenses | ||
Interest income | (53) | |
Interest expense | 196,218 | 4,612 |
Total other expense, net | 196,218 | 4,559 |
Loss before provision for income taxes | (1,108,154) | (805,223) |
Provision for income taxes | 756 | 687 |
Net loss | $ (1,108,910) | $ (805,910) |
Basic and diluted loss per share (in dollars per share) | $ (0.01) | $ (0.01) |
Weighted average number of common shares outstanding - basic and diluted (in shares) | 126,269,222 | 86,451,976 |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Statement of Stockholders' Equity (Unaudited) - 3 months ended Mar. 31, 2017 - USD ($) | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
Balance, at beginning at Dec. 31, 2016 | $ 12,616 | $ 42,603,490 | $ (36,815,063) | $ 5,801,043 |
Balance, at beginning (in shares) at Dec. 31, 2016 | 126,156,189 | 126,156,189 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Share-based compensation | $ 78 | 136,908 | $ 136,986 | |
Share-based compensation (in shares) | 788,001 | 788,001 | ||
Net loss | (1,108,910) | $ (1,108,910) | ||
Balance, at end at Mar. 31, 2017 | $ 12,694 | $ 42,740,398 | $ (37,923,973) | $ 4,829,119 |
Balance, at end (in shares) at Mar. 31, 2017 | 126,944,190 | 126,944,190 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows (unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Net cash flow from operating activities | ||
Net loss | $ (1,108,910) | $ (805,910) |
Adjustments to reconcile net loss to net cash used in operating activities | ||
Depreciation | 114,024 | 58,573 |
Amortization | 131,458 | 17,958 |
Share-based compensation expense | 136,986 | 280,764 |
Amortization of debt discount | 86,734 | |
Loss on disposal of equipment | 28,446 | |
Provision for bad debt | 14,401 | 63,189 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | (45,490) | (12,512) |
Prepaid expenses | 6,694 | 30,893 |
Inventories | (761,063) | 7,702 |
Deposits | (5,348) | |
Accounts payable and accrued expenses | 886,638 | (16,197) |
Due to related parties | (4,375) | (6,883) |
Net cash used in operating activities | (514,457) | (387,771) |
Cash flows from investing activities | ||
Purchases of property, plant and equipment | (318,692) | (13,605) |
Cash paid for noncontrolling interests in RS&T | (129,500) | |
Net cash used in investing activities | (448,192) | (13,605) |
Cash flows from financing activities | ||
Repayment of notes payable | (21,410) | (3,552) |
Repayment of capital lease obligations | (943) | (3,861) |
Proceeds from sale of common stock, net | 2,936,792 | |
Net cash (used in) provided by financing activities | (22,353) | 2,929,379 |
Net change in cash | (985,002) | 2,528,003 |
Cash at beginning of the period | 1,413,999 | 1,276,687 |
Cash at end of the period | 428,997 | 3,804,690 |
Supplemental disclosure of cash flow information | ||
Interest paid during period | 9,177 | 2,312 |
Income taxes paid during period | 756 | 687 |
Supplemental disclosure of non-cash investing and financing activities | ||
Acquisition of equipment with notes payable | 32,510 | |
Payment of contingent acquisition obligation with restricted cash | $ 17,899 |
Organization and Nature of Busi
Organization and Nature of Business | 3 Months Ended |
Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Nature of Business | NOTE 1 – Organization and Nature of Business GlyEco, Inc. (the “Company”, “we”, or “our”) is a specialty chemical company formed in the State of Nevada on October 21, 2011. We have two segments, Consumer and Industrial (see Note 7). On December 27, 2016, the Company purchased WEBA Technology Corp. (“WEBA”), a privately-owned company that develops, manufactures and markets additive packages for the antifreeze/coolant, gas patch coolants and heat transfer industries; and purchased 96% of Recovery Solutions & Technologies Inc. (“RS&T”), a privately-owned company involved in the development and commercialization of glycol recovery technology. On December 28, 2016, the Company purchased certain glycol distillation assets from Union Carbide Corporation (“UCC”), a wholly-owned subsidiary of The Dow Chemical Company (“Dow”), located in Institute, West Virginia (the “Dow Assets”). During the three months ended March 31, 2017, the Company acquired the remaining 4% of RS&T. Going Concern The condensed consolidated financial statements as of March 31, 2017 and December 31, 2016 and for the three months ended March 31, 2017 and 2016, have been prepared assuming that the Company will continue as a going concern. As of March 31, 2017, the Company has yet to achieve profitable operations and is dependent on its ability to raise capital from stockholders or other sources to sustain operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Ultimately, we plan to achieve profitable operations through the implementation of operating efficiencies at our facilities and increased revenue through the offering of additional products and the expansion of our geographic footprint through acquisitions, broader distribution from our current facilities and/or the opening of additional facilities. The condensed consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties. |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | NOTE 2 – Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation The accompanying condensed consolidated financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States (“GAAP”), and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). In the opinion of management, the accompanying unaudited interim condensed consolidated financial statements reflect all adjustments (consisting of normally recurring accruals) necessary for a fair presentation on an interim basis. The operating results for the three months ended March 31, 2017 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2017. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted; however, management believes that the disclosures are adequate to make the information presented not misleading. This report should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2016, including the Company’s audited consolidated financial statements and related notes. Principles of Consolidation These consolidated financial statements include the accounts of GlyEco, Inc., and its wholly-owned and majority-owned subsidiaries. All significant intercompany transactions have been eliminated as a result of consolidation. Noncontrolling Interests The Company recognizes noncontrolling interests as equity in the consolidated financial statements separate from the parent company’s equity. Noncontrolling interests’ partners have less than 50% share of voting rights at any one of the subsidiary level companies. The amount of net income (loss) attributable to noncontrolling interests is included in consolidated net income (loss) on the face of the consolidated statements of operations. Changes in a parent entity’s ownership interest in a subsidiary that do not result in deconsolidation are treated as equity transactions if the parent entity retains its controlling financial interest. The Company recognizes a gain or loss in net income (loss) when a subsidiary is deconsolidated. Such gain or loss is measured using the fair value of the noncontrolling equity investment on the deconsolidation date. Additionally, operating losses are allocated to noncontrolling interests even when such allocation creates a deficit balance for the noncontrolling interest partner. The Company provides either in the consolidated statements of stockholders’ equity, if presented, or in the notes to consolidated financial statements, a reconciliation at the beginning and the end of the period of the carrying amount of total equity (net assets), equity (net assets) attributable to the parent, and equity (net assets) attributable to the noncontrolling interest that separately discloses: (1) Net income or loss (2) Transactions with owners acting in their capacity as owners, showing separately contributions from and distributions to owners. (3) Each component of other comprehensive income or loss Operating Segments Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated on a regular basis by the chief operating decision maker, or decision making group, in deciding how to allocate resources to an individual segment and in assessing the performance of the segment. Operating segments may be aggregated into a single operating segment if the segments have similar economic characteristics, among other criteria. Prior to the December 2016 acquisitions of WEBA, RS&T and the DOW Assets and through December 31, 2016, the Company operated as one segment. As of January 1, 2017 we have two operating segments, Consumer and Industrial. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported revenues and expenses during the reporting periods. Because of the use of estimates inherent within the financial reporting process, actual results may differ significantly from those estimates. Significant estimates include, but are not limited to, items such as the allowance for doubtful accounts, the value of share-based compensation and warrants, the allocation of the purchase price in the Company’s acquisitions, the recoverability of property, plant and equipment, goodwill, other intangibles and their estimated useful lives, contingent liabilities, and environmental and asset retirement obligations. Due to the uncertainties inherent in the formulation of accounting estimates, it is reasonable to expect that these estimates could be materially revised within the next year. Revenue Recognition The Company recognizes revenue when (1) delivery of product has occurred or services have been rendered, (2) there is persuasive evidence of a sale arrangement, (3) selling prices are fixed or determinable, and (4) collectability from the customer (individual customers and distributors) is reasonably assured. Revenue consists primarily of revenue generated from the sale of the Company’s products. This generally occurs either when the Company’s products are shipped from its facility or delivered to the customer when title has passed. Revenue is recorded net of estimated cash discounts. The Company estimates and accrues an allowance for sales returns at the time the product is sold. To date, sales returns have not been material. Shipping costs passed to the customer are included in net sales. Costs Cost of goods sold includes all direct material and labor costs and those indirect costs of bringing raw materials to sale condition, including depreciation of equipment used in manufacturing and shipping and handling costs. Selling, general, and administrative costs are charged to operating expenses as incurred. Research and development costs are expensed as incurred, are included in operating expenses and were insignificant in 2017 and 2016. Advertising costs are expensed as incurred. Accounts Receivable Accounts receivable are recognized and carried at the original invoice amount less an allowance for expected uncollectible amounts. Inherent in the assessment of the allowance for doubtful accounts are certain judgments and estimates including, among others, the customer’s willingness or ability to pay, the Company’s compliance with customer invoicing requirements, the effect of general economic conditions and the ongoing relationship with the customer. Accounts with outstanding balances longer than the payment terms are considered past due. We do not charge interest on past due balances. The Company writes off trade receivables when all reasonable collection efforts have been exhausted. Bad debt expense is reflected as a component of general and administrative expenses in the consolidated statements of operations. The allowance for doubtful accounts totaled $94,184 and $80,207 as of March 31, 2017 and December 31, 2016, respectively. Inventories Inventories are reported at the lower of cost or net realizable value. The cost of raw materials, including feedstocks and additives, is determined on an average unit cost of the units in a production lot. Work-in-process represents labor, material and overhead costs associated with the manufacturing costs at an average unit cost of the units in the production lot. Finished goods represents work-in-process items with additive costs added. The Company periodically reviews its inventories for obsolete or unsalable items and adjusts its carrying value to reflect estimated realizable values. Property, Plant and Equipment Property, plant and equipment is stated at cost. The Company provides for depreciation on the cost of its equipment using the straight-line method over an estimated useful life, ranging from three to twenty years, and zero salvage value. Expenditures for repairs and maintenance are charged to expense as incurred. For purposes of computing depreciation, the useful lives of property, plant and equipment are as follows: Leasehold improvements Lesser of the remaining lease term or 5 years Machinery and equipment 3-15 years Business Combinations The Company accounts for business combinations by recognizing the assets acquired, liabilities assumed, contractual contingencies, and contingent consideration at their fair values on the acquisition date. The purchase price allocation process requires management to make significant estimates and assumptions, especially with respect to intangible assets, estimated contingent consideration payments and pre-acquisition contingencies. Examples of critical estimates in valuing certain of the intangible assets the Company has acquired or may acquire in the future include but are not limited to: ● future expected cash flows from product sales, other customer contracts, and ● discount rates utilized in valuation estimates. Unanticipated events and circumstances may occur that may affect the accuracy or validity of such assumptions, estimates or actual results. Additionally, any change in the fair value of the acquisition-related contingent consideration subsequent to the acquisition date, including changes from events after the acquisition date, such as changes in our estimates of relevant revenue or other targets, will be recognized in earnings in the period of the estimated fair value change. A change in fair value of the acquisition-related contingent consideration or the occurrence of events that cause results to differ from our estimates or assumptions could have a material effect on the consolidated financial position, statements of operations or cash flows in the period of the change in the estimate. Goodwill and Intangible Assets Intangible assets that we acquire are recognized separately if they arise from contractual or other legal rights or if they are separable and are recorded at fair value less accumulated amortization. We analyze intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. We review the amortization method and period at least at each balance sheet date. The effects of any revision are recorded to operations when the change arises. We recognize impairment when the estimated undiscounted cash flow generated by those assets is less than the carrying amounts of such assets. The amount of impairment is the excess of the carrying amount over the fair value of such assets. The Company’s management believes there is no impairment of long-lived assets as of March 31, 2017. However, market conditions could change or demand for the Company’s products could decrease, which could result in future impairment of long-lived assets Goodwill is recorded as the excess of (i) the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition date fair value of any previous equity interest in the acquired over the (ii) fair value of the net identifiable assets acquired. We do not amortize goodwill; however, we annually, or whenever there is an indication that goodwill may be impaired, evaluate qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step quantitative goodwill impairment test. The Company measures the carrying amount of the asset against the estimated undiscounted future cash flows associated with it. Should the sum of the expected future net cash flows be less than the carrying value of the asset being evaluated, an impairment loss would be recognized. The impairment loss would be calculated as the amount by which the carrying value of the assets exceeds fair value. Any future increases in fair value would not result in an adjustment to the impairment loss that may be recorded in our consolidated financial statements. Our test of goodwill impairment includes assessing qualitative factors and the use of judgment in evaluating economic conditions, industry and market conditions, cost factors, and entity-specific events, as well as overall financial performance. Based on our analysis, no impairment loss of goodwill was recorded in 2017 and 2016 as the carrying amount of the reporting unit’s assets did not exceed the estimated fair value determined. Impairment of Long-Lived Assets Property, plant and equipment, purchased intangibles subject to amortization and patents and trademarks, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of would be separately presented in the consolidated balance sheet and reported at the lower of the carrying amount or fair value less costs to sell, and are no longer depreciated. The assets and liabilities of a disposal group classified as held-for-sale would be presented separately in the appropriate asset and liability sections of the consolidated balance sheet, if material. Fair Value of Financial Instruments The Company has adopted the framework for measuring fair value that establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and lowest priority to unobservable inputs (Level 3 measurements). The three levels of inputs that may be used to measure fair value are as follows: ● Level 1 ● Level 2 ● Level 3 Cash, restricted cash, accounts receivable, accounts payable and accrued expenses, amounts due to related parties and current portion of capital lease obligations and notes payable are reflected in the consolidated balance sheets at their estimated fair values primarily due to their short-term nature. As to long-term capital lease obligations and notes payable, estimated fair values are based on borrowing rates currently available to the Company for loans with similar terms and maturities. Deferred Financing Costs, Debt Discount and Detachable Debt-Related Warrants Costs incurred in connection with debt are deferred and recorded as a reduction to the debt balance in the accompanying condensed consolidated balance sheets. The Company amortizes debt issuance costs over the expected term of the related debt using the effective interest method. Debt discounts relate to the relative fair value of warrants issued in conjunction with the debt and are also recorded as a reduction to the debt balance and amortized over the expected term of the debt to interest expense using the effective interest method. Net Loss Per Share Calculation The basic net loss per common share is computed by dividing the net loss available to common shareholders by the weighted average number of shares outstanding during a period. Diluted loss per common share is computed by dividing the net loss available to common shareholders by the weighted average number of common shares outstanding plus potentially dilutive securities. The Company’s potentially dilutive securities outstanding are not shown in a diluted net loss per share calculation because their effect in both 2017 and 2016 would be anti-dilutive. At March 31, 2017, these potentially dilutive securities included warrants of 11,316,874 and stock options of 7,950,093 for a total of 19,266,967. At March 31, 2016, these potentially dilutive securities included warrants of 8,366,137 and stock options of 11,499,400 for a total of 19,865,537. Income Taxes The Company accounts for its income taxes in accordance with Financial Accounting Standard Board (“FASB”) Accounting Standards Codification (“ASC”) 740, “Income Taxes,” which requires recognition of deferred tax assets and liabilities for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date. An allowance for the deferred tax asset is established if it is more likely than not that the asset will not be realized. Share-based Compensation All share-based payments to employees and non-employee directors, including grants of employee stock options, are expensed based on their estimated fair values at the grant date, in accordance with ASC 718. Compensation expense for share-based payments to employees and directors is recorded over the vesting period using the estimated fair value on the date of grant, as calculated by the Company using the Black-Scholes-Merton (“BSM”) option-pricing model or the Monte Carlo Simulation. For awards with only service conditions that have graded vesting schedules, compensation cost is recorded on a straight-line basis over the requisite service period for the entire award, unless vesting occurs earlier. For awards with market conditions, compensation cost is recorded on the accelerated attribution method over the derived service period. Non-employee share-based compensation is accounted for based on the fair value of the related stock or options, using the BSM, or the fair value of the goods or services on the measurement date, whichever is more readily determinable. Recently Issued Accounting Pronouncements There have been no recent accounting pronouncements or changes in accounting pronouncements that are of significance, or potential significance to the Company, except as discussed below. In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09”). This updated guidance supersedes the current revenue recognition guidance, including industry-specific guidance. The updated guidance introduces a five-step model to achieve its core principal of the entity recognizing revenue to depict the transfer of goods or services to customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The updated guidance is effective for interim and annual periods beginning after December 15, 2016, and early adoption is not permitted. In July 2015, the FASB decided to delay the effective date of ASU 2014-09 until December 15, 2017. The FASB also agreed to allow entities to choose to adopt the standard as of the original effective date. The Company has not yet selected a transition method and is currently assessing the impact the adoption of ASU 2014-09 will have on its condensed consolidated financial statements and disclosures. In July 2015, the FASB issued ASU 2015-11, “Inventory” (Topic 330) (“ASU 2015-11”). The amendments in ASU 2015-11 require that an entity measure inventory within the scope at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transaction. The amendments in this update more closely align the measurement of inventory in GAAP with the measurement of inventory in International Financial Reporting. ASU 2015-11 is effective for annual and interim periods beginning on or after December 15, 2016. The amendments in this update should be applied prospectively with early application permitted as of the beginning of the interim or annual reporting period. The adoption of this ASU did not have a material impact on the condensed consolidated financial statements. In November 2015, the FASB issued ASU 2015-17, “Income Taxes: Balance Sheet Classification of Deferred Taxes”, an update to accounting guidance to simplify the presentation of deferred income taxes. The guidance requires an entity to classify all deferred tax liabilities and assets, along with any valuation allowance, as noncurrent in the balance sheet. The guidance is effective for public companies with annual reporting periods beginning after December 15, 2016, including interim periods within these reporting periods. Early adoption is permitted. The adoption of this ASU did not have a material impact on the condensed consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, “Leases”, which requires the lease rights and obligations arising from lease contracts, including existing and new arrangements, to be recognized as assets and liabilities on the balance sheet. ASU 2016-02 is effective for reporting periods beginning after December 15, 2018 with early adoption permitted. While the Company is still evaluating ASU 2016-02, the Company expects the adoption of ASU 2016-02 to have a material effect on the Company’s consolidated financial condition due to the recognition of the lease rights and obligations as assets and liabilities. The Company is currently assessing the impact of the adoption of ASU 2016-02 will have on its condensed consolidated financial statements and disclosures . |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Inventories | NOTE 3 – Inventories The Company’s total inventories were as follows: March 31, December 31, 2017 2016 Raw materials $ 431,859 $ 221,088 Work in process 27,319 172,142 Finished goods 946,407 251,292 Total inventories $ 1,405,585 $ 644,522 |
Acquisitions, Goodwill and Othe
Acquisitions, Goodwill and Other Intangible Assets | 3 Months Ended |
Mar. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Acquisitions, Goodwill and Other Intangible Assets | NOTE 4 – Acquisitions, Goodwill and Other Intangible Assets WEBA On December 27, 2016, the Company entered into a Stock Purchase Agreement (“WEBA SPA”) with WEBA, a privately-owned company that develops, manufactures and markets additive packages for the antifreeze/coolant, gas patch coolants and heat transfer industries. Pursuant to the WEBA SPA, the Company acquired all of the WEBA shares from the WEBA sellers for $150,000 in cash and $2.65 million in 8% Promissory Notes (see Note 8). In addition, the WEBA sellers may be entitled to receive earn-out payments of up to an aggregate of $2,500,000 for calendar years 2017, 2018, and 2019 based upon terms set forth in the WEBA SPA. The Company also issued 5,625,000 shares as repayment of $450,000 of notes payable due to the WEBA sellers. The fair market value of the shares was $0.10 on the date of issuance. Following the WEBA acquisition, WEBA became a wholly owned subsidiary of the Company. We accounted for the acquisition of WEBA as required under applicable accounting guidance. Tangible assets acquired are recorded at fair value. Identifiable intangible assets that we acquired are recognized separately if they arise from contractual or other legal rights or if they are separable, and are recorded at fair value. Goodwill is recorded as the excess of the consideration transferred over the fair value of the net identifiable assets acquired. The earn-out payments liability was recorded at their estimated fair value of $1,745,023. Although management estimates that certain of the contingent consideration will be paid, it has applied a discount rate to the contingent consideration amounts in determining fair value to represent the risk of these payments not being made. The total acquisition date fair value of the consideration transferred and to be transferred is estimated at approximately $6.1 million, as follows: Cash payment to the WEBA Sellers at closing $ 150,000 Common Stock issuance to the WEBA Sellers 562,500 Promissory notes to the WEBA Sellers 2,650,000 Contingent cash consideration to the WEBA Sellers 1,745,023 Income tax benefit 1,030,000 Total acquisition date fair value $ 6,137,523 Allocation of Consideration Transferred The identifiable assets acquired and liabilities assumed were recognized and measured as of the acquisition date based on their estimated fair values as of December 27, 2016, the acquisition date. The excess of the acquisition date fair value of consideration transferred over the estimated fair value of the net tangible assets and intangible assets acquired was recorded as goodwill. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date. Cash $ 172,950 Accounts receivable 342,151 Loan receivable from RS&T 500,000 Property and equipment 8,720 Customer list 470,000 Intellectual property 880,000 Trade name 390,000 Non complete agreement 835,000 Total identifiable assets acquired 3,598,821 Accounts payable and accrued expenses 190,527 Total liabilities assumed 190,527 Total identifiable assets less liabilities assumed 3,408,294 Goodwill 2,729,229 Net assets acquired $ 6,137,523 The Company is amortizing the intangibles (excluding goodwill) over an estimated useful life of five to ten years. The Company will evaluate the fair value of the earn-out liability on a periodic basis and adjust the balance, with an offsetting adjustment to the income statement, as needed. The acquisition was considered to be significant. The Company has included the financial results of the WEBA acquisition in its consolidated financial statements from the acquisition date and the results from WEBA were not material to the Company’s consolidated financial statements for the year ended December 31, 2016. Pro Forma Financial Information The following table presents the Company’s unaudited pro forma results (including WEBA) for the three months ended March 31, 2016 as though the companies had been combined as of the beginning of each of the periods presented. The pro forma information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of each period presented, nor is it indicative of results of operations which may occur in the future. The unaudited pro forma results presented include amortization charges for intangible assets and eliminations of intercompany transactions. For the Three Months Ended March 31, 2016 Total revenues $ 1,982,453 Net loss $ (900,173 ) The Company did not incur material acquisition expenses related to the WEBA acquisition. The components of goodwill and other intangible assets related to the WEBS SPA, along with various other business combinations are as follows: Gross Balance at Net Balance at Net Balance at Estimated December 31, Accumulated December 31, Accumulated March 31, Useful Life 2016 Amortization 2016 Additions Amortization 2017 Finite live intangible assets: Customer list and tradename 5 years $ 987,500 $ (26,296 ) $ 961,204 $ — $ (74,754 ) $ 912,746 Non-compete agreements 5 years 1,199,000 (246,000 ) 953,000 — (307,000 ) 892,000 Intellectual property 10 years 880,000 — 880,000 — (22,000 ) 858,000 Total intangible assets $ 3,066,500 $ (272,296 ) $ 2,794,204 $ — $ (403,754 ) $ 2,662,746 Goodwill Indefinite $ 3,693,083 $ — $ 3,693,083 $ 129,500 $ — $ 3,822,583 We compute amortization using the straight-line method over the estimated useful lives of the intangible assets. The Company has no indefinite-lived intangible assets other than goodwill. |
Property, Plant and Equipment
Property, Plant and Equipment | 3 Months Ended |
Mar. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | NOTE 5 – Property, Plant and Equipment The Company’s property, plant and equipment were as follows: March 31, December 31, 2017 2016 Machinery and equipment $ 4,229,448 $ 4,154,305 Leasehold improvements 126,598 126,598 Accumulated depreciation (940,984 ) (927,909 ) 3,415,102 3,352,994 Construction in process 418,959 304,845 Total property, plant and equipment, net $ 3,834,061 $ 3,657,839 |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2017 | |
Stockholders' Equity | |
Stockholders' Equity | NOTE 6– Stockholders’ Equity Preferred Stock The Company’s articles of incorporation authorize the Company to issue up to 40,000,000 shares of $0.0001 par value, preferred shares having preferences to be determined by the board of directors for dividends, and liquidation of the Company’s assets. Of the 40,000,000 preferred shares the Company is authorized by its articles of incorporation, the Board of Directors has designated up to 3,000,000 as Series AA preferred shares. As of March 31, 2017, the Company had no shares of Preferred Stock outstanding. Common Stock As of March 31, 2017, the Company has 126,944,190 shares of Common Stock, par value $0.0001, outstanding. The Company’s articles of incorporation authorize the Company to issue up to 300,000,000 shares of Common Stock. The holders are entitled to one vote for each share on matters submitted to a vote to shareholders, and to share pro rata in all dividends payable on Common Stock after payment of dividends on any preferred shares having preference in payment of dividends. Equity Incentive Program On December 18, 2014, the Company’s Board of Directors approved an Equity Incentive Program (the “Equity Incentive Program”), whereby the Company’s employees may elect to receive equity in lieu of cash for all or part of their salary compensation. During the three months ended March 31, 2017, the Company issued the following shares of common stock for compensation: On February 13, 2017, the Company issued an aggregate of 160,000 shares of common stock to two employees of the Company at a price of $0.125 per share. During the quarter ended on March 31, 2017, the Company issued an aggregate of 115,503 shares of common stock to employees of the Company pursuant to the Company’s Equity Incentive Program at a price of $0.12 per share. On March 31, 2017, the Company issued an aggregate of 512,498 shares of common stock to six directors of the Company pursuant to the Company’s FY2017 Director Compensation Plan at a price of $0.12 per share. Summary: Shares of Number of Common Value Share-based compensation 788,001 $ 95,360 Performance and/or market based stock awards In January 2015, the Board of Directors approved the issuance of 940,595 restricted shares of the Company. These shares will be issued to the then members of the Board of Directors upon vesting, which will be when the market price of the Company’s common stock trades at or above $2 for a specified period. The initial value of the restricted stock grant was approximately $38,000, as adjusted for forfeitures resulting from directors who have resigned, which will be amortized over the estimated service period. The Company recorded an expense of $3,849 and $1,586 from the amortization of the unvested restricted shares for the quarter ended March 31, 2017 and 2016, respectively. The shares were valued using a Monte Carlo Simulation with a six year life, 88.0% volatility and a risk free interest rate of 1.79%. In February 2016, the Board of Directors approved the issuance of 3,301,358 restricted shares of the Company. These shares will be issued to the then President (1,100,453 shares) and Chief Financial Officer (2,200,905 shares) upon vesting, which will be according to the following terms: - 20% when the market price of the Company’s common stock trades at or above $0.30 for a specified period. - 30% when the market price of the Company’s common stock trades at or above $0.40 for a specified period. - 30% when the market price of the Company’s common stock trades at or above $0.50 for a specified period. - 20% when the market price of the Company’s common stock trades at or above $0.60 for a specified period. The initial value of the restricted stock grant was approximately $198,000, which was amortized over the estimated service period. The Company recorded an expense of $5,878 and $452 from the amortization of the unvested restricted shares for the three months ended March 31, 2017 and 2016, respectively. The shares were valued using a Monte Carlo Simulation with a six-year life, 91.0% volatility and a risk free interest rate of 1.34%. In December 2016, the Board of Directors modified the terms of the 1,100,453 shares award in conjunction with the resignation of the President to provide for an expiration date of December 2017. The Company revalued this award based on the new terms and determined the value of the award was approximately $18,000, which is being amortized over the estimated service period. The current period expense was insignificant. In January 2016, the Board of Directors approved the issuance of 6,281,250 restricted common shares of the Company. These shares will be issued to the then members of the Board of Directors upon vesting, which will be when the market price of the Company’s common stock trades at or above $0.12 for a specified period or if the Company has positive EBITDA (a non GAAP measure) for one quarter in 2016. These shares were issued to the members of the Board on June 13, 2016, when the market price of the Company’s common stock traded at or above $0.12 for a 30-day volume weighted average price. The initial value of the restricted stock grant was $509,000, which has been amortized over the estimated performance period. The Company recorded the entire value as expense from the amortization of the restricted shares for the year ended December 31, 2016, including $113,840 for the three months ended March 31, 2016. The shares were valued using a Monte Carlo Simulation with a one-year life, 106.0% volatility and a risk free interest rate of 0.65%. In May 2016, the Board of Directors approved the issuance of 1,100,453 restricted shares of the Company. These shares will be issued to the Chief Executive Officer upon vesting, which will be according to the following terms: - 20% when the market price of the Company’s common stock trades at or above $0.30 for a specified period. - 30% when the market price of the Company’s common stock trades at or above $0.40 for a specified period. - 30% when the market price of the Company’s common stock trades at or above $0.50 for a specified period. - 20% when the market price of the Company’s common stock trades at or above $0.60 for a specified period. The initial value of the restricted stock grant was approximately $94,000, which was to be amortized over the estimated service period. In December 2016, the then Chief Executive Officer resigned from the Company; therefore, any recognized expense was reversed and the expense recognized by the Company during the year ended December 31, 2016 was $0. In December 2016, the Board of Directors modified the terms of this award in conjunction with the resignation of the then Chief Executive Officer to provide for an expiration date of December 2017. The Company revalued this award based on the new terms and determined the value of the award was approximately $18,000, which is being amortized over the estimated service period. The current period expense was insignificant. In September 2016, the Board of Directors approved the issuance of 1,650,680 restricted common shares of the Company. These shares will be issued to the Vice President of Sales and Marketing upon vesting, which will be according to the following terms: - 20% when the market price of the Company’s common stock trades at or above $0.30 for a specified period. - 30% when the market price of the Company’s common stock trades at or above $0.40 for a specified period. - 30% when the market price of the Company’s common stock trades at or above $0.50 for a specified period. - 20% when the market price of the Company’s common stock trades at or above $0.60 for a specified period. The initial value of the restricted stock grant was approximately $141,000, which is being amortized over the estimated service period. The Company recorded an expense of $6,499 from the amortization of the unvested restricted shares for the three months ended March 31, 2017. The shares were valued using a Monte Carlo Simulation with a 6-year life, 92.0% volatility and a risk free interest rate of 1.35%. In December 2016, the Board of Directors approved the issuance of 6,290,000 restricted common shares of the Company. These shares will be issued to members of the Board of Directors and certain executives and employees upon vesting, which will occur when the price per of the Company’s common stock, measured and approved based upon a 30-day trading volume weighted average price (VWAP), is equal to at least $0.20 per share. The initial value of the restricted stock grant was approximately $430,000, which is being amortized over the estimated service period. The Company recorded an expense of $17,900 from the amortization of the unvested restricted shares for the three months ended March 31, 2017. The shares were valued using a Monte Carlo Simulation with a 6-year life, 98.0% volatility and a risk free interest rate of 2.00%. A summary of the Company’s restricted stock awards is presented below: Number of Shares Weighted- Average Grant-Date Fair Value per Share Unvested at January 1, 2017 12,691,084 $ 0.08 Restricted stock granted 200,000 0.07 Restricted stock vested — — Restricted stock forfeited (130,000 ) 0.07 Unvested at March 31, 2017 12,761,084 $ 0.08 Options and warrants During the three months ended March 31, 2017 and 2016, the Company did not have any issuances or exercises of stock warrants. The Company recognized $7,500 of expense related to the vesting of outstanding options during the three months ended March 31, 2017. |
Segments
Segments | 3 Months Ended |
Mar. 31, 2017 | |
Segment Reporting [Abstract] | |
Segments | NOTE 7 – Segments Prior to the December 2016 acquisitions of WEBA, RS&T and the DOW Assets and through December 31, 2016, the Company operated as one segment. Effective January 1, 2107, we have two segments, Consumer and Industrial. Consumer’s principal business activity is the processing of waste glycol into high-quality recycled glycol products, specifically automotive antifreeze, and related specialty blended antifreeze, which we sell in the automotive and industrial end markets. We operate six processing and distribution centers located in the eastern region of the United States. Industrial’s principal business activity consists of two divisions: WEBA and RS&T. WEBA develops, manufactures and markets additive packages for the antifreeze/coolant, gas patch coolants and heat transfer industries throughout North America, and RS&T, operates a 14-20 million gallons per year ASTM E1177 EG-1 glycol re-distillation plant in West Virginia that The Company uses loss before provision for income taxes as its measure of profit/loss for segment reporting purposes. Loss before provision for income taxes by operating segment includes all operating items relating to the businesses, including inter segment transactions. Items that primarily relate to the Company as a whole are assigned to Corporate. Inter segment eliminations present the adjustments for inter segment transactions to reconcile segment information to the Company’s consolidated financial statements. Segment information, and the reconciliation to the Company’s consolidated financial statements, for the three months ended March 31, 2017, is presented below: Consumer Industrial Inter Segment Eliminations Corporate Total Sales, net $ 1,598,640 $ 940,681 $ (249,000 ) $ — $ 2,290,321 Cost of goods sold 1,406,701 992,885 (249,000 ) — 2,150,586 Gross profit 191,939 (52,204 ) — — 139,735 Total operating expenses 468,502 253,795 — 329,374 1,051,671 Loss from operations (276,563 ) (305,999 ) — (329,374 ) (911,936 ) Total other income and expenses 5,086 — — 191,132 196,218 Loss before provision for income taxes $ (281,649 ) $ (305,999 ) $ — $ (520,506 ) $ (1,108,154 ) |
Notes Payable
Notes Payable | 3 Months Ended |
Mar. 31, 2017 | |
Notes Payable [Abstract] | |
Notes Payable | NOTE 8 – Notes Payable Notes payable consist of the following: March 31, 2017 December 31, 2016 2016 Secured Notes 375,152 396,562 2016 5% Related Party Unsecured Notes 1,000,000 1,000,000 2016 8% Related Party Unsecured Notes, net of unamortized debt discount of $265,010 and $351,744, respectively 1,544,990 1,458,256 2016 WEBA Seller Notes 2,650,000 2,650,000 Total notes payable 5,570,142 5,504,818 Less current portion (2,629,490 ) (2,541,178 ) Long-term portion of notes payable $ 2,940,652 $ 2,963,640 2016 Secured Notes In January 2016, Acquisition Sub #5 entered into a secured promissory note with Ascentium Capital. In April 2016, Acquisition Sub #5 and separately, the Company, entered into secured promissory notes with Ascentium Capital. In July 2016, Acquisition Sub #3 entered into a secured promissory note with PACCAR Financial. In September 2016, Acquisition Sub #2 entered into a secured promissory note with PACCAR Financial. In November 2016, Acquisition Sub #5 and separately, Acquisition Sub #3 entered into secured promissory notes with MHC Financial Services, Inc. (collectively, the “2016 Secured Notes”). The key terms of the 2016 Secured Notes include: (i) an aggregate principal balance of $437,000, (ii) interest rates ranging from 5.8% to 9.0%, and (iii) terms of 4-5 years. The 2016 Secured Notes are collateralized by vehicles and equipment. 2016 Related Party Unsecured Notes 5% Notes Issuance On December 27, 2016, the Company entered into a subscription agreement (the “5% Notes Subscription Agreement”) by and between the Company and various funds managed by Wynnefield Capital. Pursuant to the 5% Notes Subscription Agreement, the Company offered and issued $1,000,000 in principal amount of 5% Senior Unsecured Promissory Notes (the “5% Notes”). The Company received $1,000,000 in gross proceeds from the offering. The 5% Notes will mature on May 31, 2017 (the “5% Note Maturity Date”). The 5% Notes bear interest at a rate of 5% per annum due on the 5% Note Maturity Date or as otherwise specified by the 5% Notes. The 5% Notes contain standard events of default, including: (i) failure to repay the 5% Note when it is due at maturity; (ii) failure to pay any interest payment when due; (iii) failure to deliver financial statements on time; and (iv) other standard events of default. If the 5% Notes are not repaid at the 5% Note Maturity Date, then the default rate becomes 12% per annum and the balance of the 5% Notes outstanding must be paid in four equal installments during the succeeding four months. On April 17, 2017, the Company repaid the 5% Notes in full (see Note 11). 8% Notes Issuance On December 27, 2016, the Company entered into subscription agreements (the “8% Notes Subscription Agreements”) by and between the Company and certain accredited investors. Pursuant to the 8% Notes Subscription Agreements, the Company offered and issued: (i) $1,810,000 in principal amount of 8% Senior Unsecured Promissory Notes (the “8% Notes”); and (ii) warrants (the “Warrants”) to purchase up to 5,656,250 shares of common stock of the Company (the “Common Stock”). The Company received $1,810,000 in gross proceeds from the offering of which $1,760,000 was received in 2016 and $50,000 was accrued as an other current asset at December 31, 2016 and received in 2017. The 8% Notes will mature on December 27, 2017 (the “8% Note Maturity Date”). The 8% Notes bear interest at a rate of 8% per annum due on the 8% Note Maturity Date or as otherwise specified by the 8% Note. The 8% Notes contain standard events of default, including: (i) failure to repay the 8% Note when it is due at maturity; (ii) failure to pay any interest payment when due; (iii) failure to deliver financial statements on time; and (iv) other standard events of default. The Company also incurred $26,872 of issuance costs, which were recorded as a debt discount and will be amortized as interest expense through the 8% Note Maturity Date. The Warrants are exercisable for an aggregate of 5,656,250 shares of Common Stock, beginning on December 27, 2016, and will be exercisable for a period of three years. The exercise price with respect to the warrants is $0.08 per share. The exercise price and the amount of shares of common stock issuable upon exercise of the warrants are subject to adjustment upon certain events, such as stock splits, combinations, dividends, distributions, reclassifications, mergers or other similar issuances. The Company allocated the proceeds received to the 8% Notes and the warrants on a relative fair value basis at the time of issuance. The total debt discount is being amortized over the life of the 8% Notes to interest expense. Amortization expense during the three months ended March 31, 2017 was $86,734. WEBA Seller Notes In connection with the WEBA acquisition (see Note 4) the Company issued $2.65 million in 8% promissory notes (“Seller Notes”). The Seller Notes mature on December 27, 2021. The Seller Notes bear interest at a rate of 8% per annum payable on a quarterly basis in arrears. The Seller Notes contain standard default provisions, including: (i) failure to repay the Seller Note when it is due at maturity; (ii) failure to pay any interest payment when due; (iii) failure to deliver financial statements on time; and (iv) other standard events of default. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 9 – Related Party Transactions Vice President of U.S. Operations The Vice President of U.S. Operations is the sole owner of BKB Holdings, LLC, which is the landlord of the property where GlyEco Acquisition Corp #5’s processing center is located. The Vice President of U.S. Operations also is the sole owner of Renew Resources, LLC, which provides services to the Company as a vendor. 2017 2016 Beginning Balance as of January 1, $ 5,123 $ 2,791 Monies owed to related party for services performed 24,707 21,106 Monies paid (28,014 ) (18,718 ) Ending Balance as of March 31, payable (receivable) $ 1,816 $ 5,179 5% Notes On December 27, 2016, we entered into debt agreements for an aggregate principal amount of $1,000,000 from the offering and issuance of 5% Notes to Wynnefield Partners I, Wynnefield Partners and Wynnefield Offshore, all of which are under the management of Wynnefield Capital, Inc. (“Wynnefield Capital”), an affiliate of the Company. The Company’s Chairman of the Board, Dwight Mamanteo, is a portfolio manager of Wynnefield Capital. See Note 8 for additional information. 8% Notes On December 27, 2016, we entered into debt agreements for an aggregate principal amount of $1,810,000 from the offering and issuance of 8% Notes and warrants to purchase up to 5,656,250 shares of our common stock. The 8% Notes and warrants were sold to Dwight Mamanteo, our Chairman of the Board, Charles F. Trapp and Scott Nussbaum, members of the Board of Directors, Ian Rhodes, our Chief Executive Officer, Wynnefield Capital, an affiliate of the Company, and certain family members of Mr. Mamanteo and of Mr. Nussbaum. See Note 8 for additional information. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 10 – Commitments and Contingencies Litigation The Company may be party to legal proceedings in the ordinary course of business. The Company believes that the nature of these proceedings (collection actions, etc.) are typical for a Company of our size and scope of operations. Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. Below is an overview of a recently resolved legal proceeding, one pending legal proceeding, and one outstanding alleged claim. On January 8, 2016, Acquisition Sub. #4 filed a civil action against Onyxx Group LLC in the Circuit Court of Hillsborough County, Florida. This civil action relates to an outstanding balance due from Onyxx Group LLC to Acquisition Sub. #4. In September 2016, the Company received a favorable judgment regarding this civil action in the amount of $95,000. On March 22, 2016, Acquisition Sub. #4 filed a civil action against Encore Petroleum, LLC in the Superior Court of New Jersey Law Division, Hudson County. This civil action relates to an outstanding balance due from Encore Petroleum to Acquisition Sub. #4. This civil action is still pending. The Company is also aware of one matter that involves an alleged claim against the Company, and it is at least reasonably possible that the claim will be pursued. The claim involves contracts with our former director and his related entities that provided services and was our landlord for the Company’s former processing facility in New Jersey. In this matter, the landlord of the Company’s formerly leased property claims back rent is due for property used by the Company outside of the scope of its lease agreement. During the quarter ended March 31, 2015, the former landlord denied the Company access to the New Jersey facility and prepared an eviction notice. The Company negotiated a payment in the amount of $250,000 to regain access to the facility, and reached an accord to negotiate with the landlord to resolve the outstanding issues by May 31, 2015. On December 28, 2015, the Company ultimately approved the termination of the lease agreements related to the New Jersey facility, thereby ceasing all operations at that particular facility. This termination was prompted by the former landlord’s demand for payment of approximately $2.3 million to maintain access to the facility. In September 2016, the Company reached an agreement with the landlord. The agreement required the Company to resolve certain environmental issues regarding the former processing facility and make certain payments to the landlord. The Company, the landlord and their related entities also agreed to a full and final settlement of existing and possible future claims between the parties. As of May 15, 2017, the Company believes it has addressed the environmental issues by removing and disposing of the waste from the facility and cleaning the storage tanks. Additionally, as of May 15, 2017, the Company has paid in full the agreed upon $335,000 payment to the landlord. Environmental Matters We are subject to federal, state, and local laws, regulations and ordinances relating to the protection of the environment, including those governing discharges to air and water, handling and disposal practices for solid and hazardous wastes, and occupational health and safety. It is management’s opinion that the Company is not currently exposed to significant environmental remediation liabilities or asset retirement obligations. However, if a release of hazardous substances occurs, or is found on one of our properties from prior activity, we may be subject to liability arising out of such conditions and the amount of such liability could be material. The Company accrues for potential environmental liabilities in a manner consistent with accounting principles generally accepted in the United States; that is, when it is probable a liability has been incurred and the amount of the liability is reasonably estimable. The Company reviews the status of its environmental sites on a yearly basis and adjusts its reserves accordingly. Such potential liabilities accrued by the Company do not take into consideration possible recoveries of future insurance proceeds. The Company maintains insurance coverage for unintentional acts that result in environmental remediation liabilities up to $1 million per occurrence; $2 million in the aggregate, with an umbrella liability policy that doubles the coverage. These policies do, however, take into account the likely share other parties will bear at remediation sites. It would be difficult to estimate the Company’s ultimate level of liability due to the number of other parties that may be involved, the complexity of determining the relative liability among those parties, the uncertainty as to the nature and scope of the investigations and remediation to be conducted, the uncertainty in the application of law and risk assessment, the various choices and costs associated with diverse technologies that may be used in corrective actions at the sites, and the often quite lengthy periods over which eventual remediation may occur. Nevertheless, the Company does not currently believe that any claims, penalties or costs in connection with known environmental matters will have a material adverse effect on the Company’s financial position, results of operations or cash flows. The Company is aware of one environmental remediation issue related to our former leased property in New Jersey, which is currently subject to a remediation stemming from the sale of property by the previous owner in 2008 to the current landlord. To Management’s knowledge, the former landlord has engaged a licensed site remediation professional and had assumed responsibility for this remediation. In Management’s opinion the liability for this remediation is the responsibility of the former landlord. However, the former landlord has disputed this position and it is an open issue subject to negotiation. Currently, we have no knowledge as to the scope of the landlord’s former remediation obligation. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 11 – Subsequent Events Recent Stock Issuances Since March 31, 2017, the Company has issued an aggregate of 3,481,540 shares of common stock, including 44,040 pursuant to the Company’s Equity Incentive Program and 3,437,500 upon the exercise by a shareholder of previously issued warrants. Sale and Leaseback On April 13, 2017, the Company closed an amended sale-leaseback transaction with NFS Leasing, Inc. (“NFS”), wherein the Company sold $1,700,000 of certain operational equipment used in the Company’s glycol recovery and recycling operations (the “Equipment”) pursuant to a bill of sale and simultaneously entered into a master equipment lease agreement, as modified (the “Lease Agreement”) with NFS for the lease of the Equipment by the Company. Pursuant to the Lease Agreement, the lease term (the “Lease Term”) is for 48 months commencing on May 1, 2017. During the Lease Term, the Company is obligated to make monthly rental payments of $44,720 to NFS. The agreements are effective as of March 31, 2017. At the conclusion of the Lease Term, the Company may repurchase the Equipment from NFS for $1. Repayment of Debt On April 17, 2017, the Company repaid the 5% Notes (see Note 8). |
Basis of Presentation and Sum18
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States (“GAAP”), and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). In the opinion of management, the accompanying unaudited interim condensed consolidated financial statements reflect all adjustments (consisting of normally recurring accruals) necessary for a fair presentation on an interim basis. The operating results for the three months ended March 31, 2017 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2017. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted; however, management believes that the disclosures are adequate to make the information presented not misleading. This report should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2016, including the Company’s audited consolidated financial statements and related notes. |
Principles of Consolidation | Principles of Consolidation These consolidated financial statements include the accounts of GlyEco, Inc., and its wholly-owned and majority-owned subsidiaries. All significant intercompany transactions have been eliminated as a result of consolidation. |
Noncontrolling Interests | Noncontrolling Interests The Company recognizes noncontrolling interests as equity in the consolidated financial statements separate from the parent company’s equity. Noncontrolling interests’ partners have less than 50% share of voting rights at any one of the subsidiary level companies. The amount of net income (loss) attributable to noncontrolling interests is included in consolidated net income (loss) on the face of the consolidated statements of operations. Changes in a parent entity’s ownership interest in a subsidiary that do not result in deconsolidation are treated as equity transactions if the parent entity retains its controlling financial interest. The Company recognizes a gain or loss in net income (loss) when a subsidiary is deconsolidated. Such gain or loss is measured using the fair value of the noncontrolling equity investment on the deconsolidation date. Additionally, operating losses are allocated to noncontrolling interests even when such allocation creates a deficit balance for the noncontrolling interest partner. The Company provides either in the consolidated statements of stockholders’ equity, if presented, or in the notes to consolidated financial statements, a reconciliation at the beginning and the end of the period of the carrying amount of total equity (net assets), equity (net assets) attributable to the parent, and equity (net assets) attributable to the noncontrolling interest that separately discloses: (1) Net income or loss (2) Transactions with owners acting in their capacity as owners, showing separately contributions from and distributions to owners. (3) Each component of other comprehensive income or loss |
Operating Segments | Operating Segments Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated on a regular basis by the chief operating decision maker, or decision making group, in deciding how to allocate resources to an individual segment and in assessing the performance of the segment. Operating segments may be aggregated into a single operating segment if the segments have similar economic characteristics, among other criteria. Prior to the December 2016 acquisitions of WEBA, RS&T and the DOW Assets and through December 31, 2016, the Company operated as one segment. As of January 1, 2017 we have two operating segments, Consumer and Industrial. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported revenues and expenses during the reporting periods. Because of the use of estimates inherent within the financial reporting process, actual results may differ significantly from those estimates. Significant estimates include, but are not limited to, items such as the allowance of doubtful accounts, the value of share-based compensation and warrants, the allocation of the purchase price in the Company’s acquisitions, the recoverability of property, plant and equipment, goodwill, other intangibles and their estimated useful lives, contingent liabilities, and environmental and asset retirement obligations. Due to the uncertainties inherent in the formulation of accounting estimates, it is reasonable to expect that these estimates could be materially revised within the next year. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue when (1) delivery of product has occurred or services have been rendered, (2) there is persuasive evidence of a sale arrangement, (3) selling prices are fixed or determinable, and (4) collectability from the customer (individual customers and distributors) is reasonably assured. Revenue consists primarily of revenue generated from the sale of the Company’s products. This generally occurs either when the Company’s products are shipped from its facility or delivered to the customer when title has passed. Revenue is recorded net of estimated cash discounts. The Company estimates and accrues an allowance for sales returns at the time the product is sold. To date, sales returns have not been material. Shipping costs passed to the customer are included in net sales. |
Costs | Costs Cost of goods sold includes all direct material and labor costs and those indirect costs of bringing raw materials to sale condition, including depreciation of equipment used in manufacturing and shipping and handling costs. Selling, general, and administrative costs are charged to operating expenses as incurred. Research and development costs are expensed as incurred, are included in operating expenses and were insignificant in 2017 and 2016. Advertising costs are expensed as incurred. |
Accounts Receivable | Accounts Receivable Accounts receivable are recognized and carried at the original invoice amount less an allowance for expected uncollectible amounts. Inherent in the assessment of the allowance for doubtful accounts are certain judgments and estimates including, among others, the customer’s willingness or ability to pay, the Company’s compliance with customer invoicing requirements, the effect of general economic conditions and the ongoing relationship with the customer. Accounts with outstanding balances longer than the payment terms are considered past due. We do not charge interest on past due balances. The Company writes off trade receivables when all reasonable collection efforts have been exhausted. Bad debt expense is reflected as a component of general and administrative expenses in the consolidated statements of operations. The allowance for doubtful accounts totaled $94,184 and $80,207 as of March 31, 2017 and December 31, 2016, respectively. |
Inventories | Inventories Inventories are reported at the lower of cost or net realizable value. The cost of raw materials, including feedstocks and additives, is determined on an average unit cost of the units in a production lot. Work-in-process represents labor, material and overhead costs associated with the manufacturing costs at an average unit cost of the units in the production lot. Finished goods represents work-in-process items with additive costs added. The Company periodically reviews its inventories for obsolete or unsalable items and adjusts its carrying value to reflect estimated realizable values. |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment is stated at cost. The Company provides for depreciation on the cost of its equipment using the straight-line method over an estimated useful life, ranging from three to twenty years, and zero salvage value. Expenditures for repairs and maintenance are charged to expense as incurred. For purposes of computing depreciation, the useful lives of property, plant and equipment are as follows: Leasehold improvements Lesser of the remaining lease term or 5 years Machinery and equipment 3-15 years |
Business Combinations | Business Combinations The Company accounts for business combinations by recognizing the assets acquired, liabilities assumed, contractual contingencies, and contingent consideration at their fair values on the acquisition date. The purchase price allocation process requires management to make significant estimates and assumptions, especially with respect to intangible assets, estimated contingent consideration payments and pre-acquisition contingencies. Examples of critical estimates in valuing certain of the intangible assets the Company has acquired or may acquire in the future include but are not limited to: ● future expected cash flows from product sales, other customer contracts, and ● discount rates utilized in valuation estimates. Unanticipated events and circumstances may occur that may affect the accuracy or validity of such assumptions, estimates or actual results. Additionally, any change in the fair value of the acquisition-related contingent consideration subsequent to the acquisition date, including changes from events after the acquisition date, such as changes in our estimates of relevant revenue or other targets, will be recognized in earnings in the period of the estimated fair value change. A change in fair value of the acquisition-related contingent consideration or the occurrence of events that cause results to differ from our estimates or assumptions could have a material effect on the consolidated financial position, statements of operations or cash flows in the period of the change in the estimate. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Intangible assets that we acquire are recognized separately if they arise from contractual or other legal rights or if they are separable and are recorded at fair value less accumulated amortization. We analyze intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. We review the amortization method and period at least at each balance sheet date. The effects of any revision are recorded to operations when the change arises. We recognize impairment when the estimated undiscounted cash flow generated by those assets is less than the carrying amounts of such assets. The amount of impairment is the excess of the carrying amount over the fair value of such assets. The Company’s management believes there is no impairment of long-lived assets as of March 31, 2017. However, market conditions could change or demand for the Company’s products could decrease, which could result in future impairment of long-lived assets Goodwill is recorded as the excess of (i) the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition date fair value of any previous equity interest in the acquired over the (ii) fair value of the net identifiable assets acquired. We do not amortize goodwill; however, we annually, or whenever there is an indication that goodwill may be impaired, evaluate qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step quantitative goodwill impairment test. The Company measures the carrying amount of the asset against the estimated undiscounted future cash flows associated with it. Should the sum of the expected future net cash flows be less than the carrying value of the asset being evaluated, an impairment loss would be recognized. The impairment loss would be calculated as the amount by which the carrying value of the assets exceeds fair value. Any future increases in fair value would not result in an adjustment to the impairment loss that may be recorded in our consolidated financial statements. Our test of goodwill impairment includes assessing qualitative factors and the use of judgment in evaluating economic conditions, industry and market conditions, cost factors, and entity-specific events, as well as overall financial performance. Based on our analysis, no impairment loss of goodwill was recorded in 2017 and 2016 as the carrying amount of the reporting unit’s assets did not exceed the estimated fair value determined. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Property, plant and equipment, purchased intangibles subject to amortization and patents and trademarks, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of would be separately presented in the consolidated balance sheet and reported at the lower of the carrying amount or fair value less costs to sell, and are no longer depreciated. The assets and liabilities of a disposal group classified as held-for-sale would be presented separately in the appropriate asset and liability sections of the consolidated balance sheet, if material. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company has adopted the framework for measuring fair value that establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and lowest priority to unobservable inputs (Level 3 measurements). The three levels of inputs that may be used to measure fair value are as follows: ● Level 1 ● Level 2 ● Level 3 Cash, restricted cash, accounts receivable, accounts payable and accrued expenses, amounts due to related parties and current portion of capital lease obligations and notes payable are reflected in the consolidated balance sheets at their estimated fair values primarily due to their short-term nature. As to long-term capital lease obligations and notes payable, estimated fair values are based on borrowing rates currently available to the Company for loans with similar terms and maturities. |
Deferred Financing Costs, Debt Discount and Detachable Debt-Related Warrants | Deferred Financing Costs, Debt Discount and Detachable Debt-Related Warrants Costs incurred in connection with debt are deferred and recorded as a reduction to the debt balance in the accompanying condensed consolidated balance sheets. The Company amortizes debt issuance costs over the expected term of the related debt using the effective interest method. Debt discounts relate to the relative fair value of warrants issued in conjunction with the debt and are also recorded as a reduction to the debt balance and amortized over the expected term of the debt to interest expense using the effective interest method. |
Net Loss Per Share Calculation | Net Loss Per Share Calculation The basic net loss per common share is computed by dividing the net loss available to common shareholders by the weighted average number of shares outstanding during a period. Diluted loss per common share is computed by dividing the net loss available to common shareholders by the weighted average number of common shares outstanding plus potentially dilutive securities. The Company’s potentially dilutive securities outstanding are not shown in a diluted net loss per share calculation because their effect in both 2017 and 2016 would be anti-dilutive. At March 31, 2017, these potentially dilutive securities included warrants of 11,316,874 and stock options of 7,950,093 for a total of 19,266,967. At March 31, 2016, these potentially dilutive securities included warrants of 8,366,137 and stock options of 11,499,400 for a total of 19,865,537. |
Income Taxes | Income Taxes The Company accounts for its income taxes in accordance with Financial Accounting Standard Board (“FASB”) Accounting Standards Codification (“ASC”) 740, “Income Taxes,” which requires recognition of deferred tax assets and liabilities for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date. An allowance for the deferred tax asset is established if it is more likely than not that the asset will not be realized. |
Share-based Compensation | Share-based Compensation All share-based payments to employees and non-employee directors, including grants of employee stock options, are expensed based on their estimated fair values at the grant date, in accordance with ASC 718. Compensation expense for share-based payments to employees and directors is recorded over the vesting period using the estimated fair value on the date of grant, as calculated by the Company using the Black-Scholes-Merton (“BSM”) option-pricing model or the Monte Carlo Simulation. For awards with only service conditions that have graded vesting schedules, compensation cost is recorded on a straight-line basis over the requisite service period for the entire award, unless vesting occurs earlier. For awards with market conditions, compensation cost is recorded on the accelerated attribution method over the derived service period. Non-employee share-based compensation is accounted for based on the fair value of the related stock or options, using the BSM, or the fair value of the goods or services on the measurement date, whichever is more readily determinable. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements There have been no recent accounting pronouncements or changes in accounting pronouncements that are of significance, or potential significance to the Company, except as discussed below. In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09”). This updated guidance supersedes the current revenue recognition guidance, including industry-specific guidance. The updated guidance introduces a five-step model to achieve its core principal of the entity recognizing revenue to depict the transfer of goods or services to customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The updated guidance is effective for interim and annual periods beginning after December 15, 2016, and early adoption is not permitted. In July 2015, the FASB decided to delay the effective date of ASU 2014-09 until December 15, 2017. The FASB also agreed to allow entities to choose to adopt the standard as of the original effective date. The Company has not yet selected a transition method and is currently assessing the impact the adoption of ASU 2014-09 will have on its condensed consolidated financial statements and disclosures. In July 2015, the FASB issued ASU 2015-11, “Inventory” (Topic 330) (“ASU 2015-11”). The amendments in ASU 2015-11 require that an entity measure inventory within the scope at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transaction. The amendments in this update more closely align the measurement of inventory in GAAP with the measurement of inventory in International Financial Reporting. ASU 2015-11 is effective for annual and interim periods beginning on or after December 15, 2016. The amendments in this update should be applied prospectively with early application permitted as of the beginning of the interim or annual reporting period. The adoption of this ASU did not have a material impact on the condensed consolidated financial statements. In November 2015, the FASB issued ASU 2015-17, “Income Taxes: Balance Sheet Classification of Deferred Taxes”, an update to accounting guidance to simplify the presentation of deferred income taxes. The guidance requires an entity to classify all deferred tax liabilities and assets, along with any valuation allowance, as noncurrent in the balance sheet. The guidance is effective for public companies with annual reporting periods beginning after December 15, 2016, including interim periods within these reporting periods. Early adoption is permitted. The adoption of this ASU did not have a material impact on the condensed consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, “Leases”, which requires the lease rights and obligations arising from lease contracts, including existing and new arrangements, to be recognized as assets and liabilities on the balance sheet. ASU 2016-02 is effective for reporting periods beginning after December 15, 2018 with early adoption permitted. While the Company is still evaluating ASU 2016-02, the Company expects the adoption of ASU 2016-02 to have a material effect on the Company’s consolidated financial condition due to the recognition of the lease rights and obligations as assets and liabilities. The Company is currently assessing the impact of the adoption of ASU 2016-02 will have on its condensed consolidated financial statements and disclosures . |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | The Company’s total inventories were as follows: March 31, December 31, 2017 2016 Raw materials $ 431,859 $ 221,088 Work in process 27,319 172,142 Finished goods 946,407 251,292 Total inventories $ 1,405,585 $ 644,522 |
Acquisitions, Goodwill and Ot20
Acquisitions, Goodwill and Other Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Business Combinations [Abstract] | |
Schedule acquisition date fair value | The total acquisition date fair value of the consideration transferred and to be transferred is estimated at approximately $6.1 million, as follows: Cash payment to the WEBA Sellers at closing $ 150,000 Common Stock issuance to the WEBA Sellers 562,500 Promissory notes to the WEBA Sellers 2,650,000 Contingent cash consideration to the WEBA Sellers 1,745,023 Income tax benefit 1,030,000 Total acquisition date fair value $ 6,137,523 |
Summary of estimated fair values of assets acquired and liabilities assumed | The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date. Cash $ 172,950 Accounts receivable 342,151 Loan receivable from RS&T 500,000 Property and equipment 8,720 Customer list 470,000 Intellectual property 880,000 Trade name 390,000 Non complete agreement 835,000 Total identifiable assets acquired 3,598,821 Accounts payable and accrued expenses 190,527 Total liabilities assumed 190,527 Total identifiable assets less liabilities assumed 3,408,294 Goodwill 2,729,229 Net assets acquired $ 6,137,523 |
Summary of Pro Forma Financial Information | The unaudited pro forma results presented include amortization charges for intangible assets and eliminations of intercompany transactions. For the Three Months Ended March 31, 2016 Total revenues $ 1,982,453 Net loss $ (900,173 ) |
Schedule of intangible assets | The components of goodwill and other intangible assets related to the WEBS SPA, along with various other business combinations are as follows: Gross Balance at Net Balance at Net Balance at Estimated December 31, Accumulated December 31, Accumulated March 31, Useful Life 2016 Amortization 2016 Additions Amortization 2017 Finite live intangible assets: Customer list and tradename 5 years $ 987,500 $ (26,296 ) $ 961,204 $ — $ (74,754 ) $ 912,746 Non-compete agreements 5 years 1,199,000 (246,000 ) 953,000 — (307,000 ) 892,000 Intellectual property 10 years 880,000 — 880,000 — (22,000 ) 858,000 Total intangible assets $ 3,066,500 $ (272,296 ) $ 2,794,204 $ — $ (403,754 ) $ 2,662,746 Goodwill Indefinite $ 3,693,083 $ — $ 3,693,083 $ 129,500 $ — $ 3,822,583 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property, plant and equipment | The Company’s property, plant and equipment were as follows: March 31, December 31, 2017 2016 Machinery and equipment $ 4,229,448 $ 4,154,305 Leasehold improvements 126,598 126,598 Accumulated depreciation (940,984 ) (927,909 ) 3,415,102 3,352,994 Construction in process 418,959 304,845 Total property, plant and equipment, net $ 3,834,061 $ 3,657,839 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Stockholders' Equity | |
Schedule of common stock issued | Summary: Shares of Number of Common Value Share-based compensation 788,001 $ 95,360 |
Summary of restricted stock awards | A summary of the Company’s restricted stock awards is presented below: Number of Shares Weighted- Average Grant-Date Fair Value per Share Unvested at January 1, 2017 12,691,084 $ 0.08 Restricted stock granted 200,000 0.07 Restricted stock vested — — Restricted stock forfeited (130,000 ) 0.07 Unvested at March 31, 2017 12,761,084 $ 0.08 |
Segments (Tables)
Segments (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | Segment information, and the reconciliation to the Company’s consolidated financial statements, for the three months ended March 31, 2017, is presented below: Consumer Industrial Inter Segment Eliminations Corporate Total Sales, net $ 1,598,640 $ 940,681 $ (249,000 ) $ — $ 2,290,321 Cost of goods sold 1,406,701 992,885 (249,000 ) — 2,150,586 Gross profit 191,939 (52,204 ) — — 139,735 Total operating expenses 468,502 253,795 — 329,374 1,051,671 Loss from operations (276,563 ) (305,999 ) — (329,374 ) (911,936 ) Total other income and expenses 5,086 — — 191,132 196,218 Loss before provision for income taxes $ (281,649 ) $ (305,999 ) $ — $ (520,506 ) $ (1,108,154 ) |
Notes Payable (Tables)
Notes Payable (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Notes Payable [Abstract] | |
Schedule of notes payable | Notes payable consist of the following: March 31, 2017 December 31, 2016 2016 Secured Notes 375,152 396,562 2016 5% Related Party Unsecured Notes 1,000,000 1,000,000 2016 8% Related Party Unsecured Notes, net of unamortized debt discount of $265,010 and $351,744, respectively 1,544,990 1,458,256 2016 WEBA Seller Notes 2,650,000 2,650,000 Total notes payable 5,570,142 5,504,818 Less current portion (2,629,490 ) (2,541,178 ) Long-term portion of notes payable $ 2,940,652 $ 2,963,640 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Vice President of U.S. Operations [Member] | |
Related Party Transaction [Line Items] | |
Schedule of related party transations | The Vice President of U.S. Operations also is the sole owner of Renew Resources, LLC, which provides services to the Company as a vendor. 2017 2016 Beginning Balance as of January 1, $ 5,123 $ 2,791 Monies owed to related party for services performed 24,707 21,106 Monies paid (28,014 ) (18,718 ) Ending Balance as of March 31, payable (receivable) $ 1,816 $ 5,179 |
Basis of Presentation and Sum26
Basis of Presentation and Summary of Significant Accounting Policies (Details) | 3 Months Ended |
Mar. 31, 2017 | |
Machinery And Equipment [Member] | Minimum [Member] | |
Useful life | 3 years |
Machinery And Equipment [Member] | Maximum [Member] | |
Useful life | 15 years |
Leasehold improvements [Member] | |
Useful life | 5 years |
Descripion of useful lives | Lesser of the remaining lease term or 5 years |
Basis of Presentation and Sum27
Basis of Presentation and Summary of Significant Accounting Policies (Details Narrative) | 3 Months Ended | ||
Mar. 31, 2017USD ($)Numbershares | Mar. 31, 2016shares | Dec. 31, 2016USD ($) | |
Number of operating segement | Number | 2 | ||
Allowance for doubtful accounts | $ | $ 94,184 | $ 80,207 | |
Number of potentially dilutive securities | 19,266,967 | 19,865,537 | |
Salvage value of property, plant and equipment | $ | $ 0 | ||
Warrant [Member] | |||
Number of potentially dilutive securities | 11,316,874 | 8,366,137 | |
Employee Stock Option [Member] | |||
Number of potentially dilutive securities | 7,950,093 | 11,499,400 |
Inventories (Details)
Inventories (Details) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 431,859 | $ 221,088 |
Work in process | 27,319 | 172,142 |
Finished goods | 946,407 | 251,292 |
Total inventories | $ 1,405,585 | $ 644,522 |
Acquisitions, Goodwill and Ot29
Acquisitions, Goodwill and Other Intangible Assets (Details) - WEBA [Member] | Dec. 27, 2016USD ($) |
Cash payment to the WEBA Sellers at closing | $ 150,000 |
Common stock issuance to the WEBA Sellers | 562,500 |
Promissory notes to the WEBA Sellers | 2,650,000 |
Contingent cash consideration to the WEBA Sellers | 1,745,023 |
Income tax benefit | 1,030,000 |
Total acquisition date fair value | $ 6,137,523 |
Acquisitions, Goodwill and Ot30
Acquisitions, Goodwill and Other Intangible Assets (Details 1) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 | Dec. 27, 2016 | Dec. 31, 2015 |
Goodwill | $ 3,822,583 | $ 3,693,083 | $ 3,693,083 | |
WEBA [Member] | ||||
Cash | $ 172,950 | |||
Accounts receivable | 342,151 | |||
Loan receivable from RS&T | 500,000 | |||
Property and equipment | 8,720 | |||
Total identifiable assets acquired | 3,598,821 | |||
Accounts payable and accrued expenses | 190,527 | |||
Total liabilities assumed | 190,527 | |||
Total identifiable assets less liabilities assumed | 3,408,294 | |||
Goodwill | 2,729,229 | |||
Net assets acquired | 6,137,523 | |||
Customer Lists [Member] | WEBA [Member] | ||||
Intangible assets | 470,000 | |||
Trade Names [Member] | WEBA [Member] | ||||
Intangible assets | 880,000 | |||
Non-Compete Agreements [Member] | WEBA [Member] | ||||
Intangible assets | 390,000 | |||
Intellectual Property [Member] | WEBA [Member] | ||||
Intangible assets | $ 835,000 |
Acquisitions, Goodwill and Ot31
Acquisitions, Goodwill and Other Intangible Assets (Details 2) | 3 Months Ended |
Mar. 31, 2016USD ($) | |
Business Combinations [Abstract] | |
Total revenues | $ 1,982,453 |
Net loss | $ (900,173) |
Acquisitions, Goodwill and Ot32
Acquisitions, Goodwill and Other Intangible Assets (Details 3) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
Finite live intangible assets | ||
Gross | $ 2,794,204 | $ 3,066,500 |
Additions | ||
Accumulated Amortization | (403,754) | (272,296) |
Net | 2,662,746 | 2,794,204 |
Goodwill | ||
Gross | 3,693,083 | 3,693,083 |
Additions | 129,500 | |
Accumulated Amortization | ||
Net | 3,822,583 | $ 3,693,083 |
Customer List And Tradename [Member] | ||
Finite live intangible assets | ||
Estimated Useful Life | 5 years | |
Gross | 961,204 | $ 987,500 |
Additions | ||
Accumulated Amortization | (74,754) | (26,296) |
Net | 912,746 | $ 961,204 |
Non-Compete Agreements [Member] | ||
Finite live intangible assets | ||
Estimated Useful Life | 5 years | |
Gross | 953,000 | $ 1,199,000 |
Additions | ||
Accumulated Amortization | (307,000) | (246,000) |
Net | 892,000 | $ 953,000 |
Intellectual Property [Member] | ||
Finite live intangible assets | ||
Estimated Useful Life | 10 years | |
Gross | 880,000 | $ 880,000 |
Additions | ||
Accumulated Amortization | (22,000) | |
Net | $ 858,000 | $ 880,000 |
Acquisitions, Goodwill and Ot33
Acquisitions, Goodwill and Other Intangible Assets (Details Narrative) - GlyEco Acquisition Corp. #3 [Member] | Dec. 27, 2016USD ($) |
StockPurchase Agreement [Member] | |
Purchase consideration | $ 150,000 |
Purchase consideration subject to earn out provision | 2,500,000 |
Promissory Notes | 2,650,000 |
Earn-out payments liability recorded at fair value | 1,745,023 |
Fair value of consideration transferred | $ 6,100,000 |
StockPurchase Agreement [Member] | Minimum [Member] | |
Useful life of intangible assets acquired | 5 years |
StockPurchase Agreement [Member] | Maximum [Member] | |
Useful life of intangible assets acquired | 10 years |
Asset Transfer Agreement [Member] | |
Earn-out payments liability recorded at fair value | $ 13,000,000 |
Property, Plant and Equipment34
Property, Plant and Equipment (Details) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Accumulated depreciation | $ (940,984) | $ (927,909) |
Property, plant and equipment before construction in process | 3,415,102 | 3,352,994 |
Construction in process | 418,959 | 304,845 |
Total property, plant and equipment, net | 3,834,061 | 3,657,839 |
Machinery And Equipment [Member] | ||
Property, plant and equipment before construction in process | 4,229,448 | 4,154,305 |
Leasehold improvements [Member] | ||
Property, plant and equipment before construction in process | $ 126,598 | $ 126,598 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) | 3 Months Ended |
Mar. 31, 2017USD ($)shares | |
Stockholders' Equity | |
Share-based compensation (in shares) | shares | 788,001 |
Share-based compensation, value | $ | $ 95,360 |
Stockholders' Equity (Details 1
Stockholders' Equity (Details 1) | 3 Months Ended |
Mar. 31, 2017$ / sharesshares | |
Number of Shares | |
Unvested at beginning | shares | 12,691,084 |
Restricted stock granted | shares | 200,000 |
Restricted stock vested | shares | |
Restricted stock forfeited | shares | (130,000) |
Unvested at end | shares | 12,761,084 |
Weighted Average Grant-Date Fair Value per Share | |
Unvested at beginning | $ / shares | $ 0.08 |
Restricted stock granted | $ / shares | 0.07 |
Restricted stock vested | $ / shares | |
Restricted stock forfeited | $ / shares | 0.07 |
Unvested at end | $ / shares | $ 0.08 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) | Mar. 31, 2017$ / sharesshares | Feb. 13, 2017Number$ / sharesshares | Mar. 31, 2017$ / sharesshares | Dec. 31, 2016$ / sharesshares | Jul. 16, 2015$ / shares |
Preferred stock, authorized | 40,000,000 | 40,000,000 | 40,000,000 | ||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||
Preferred stock, shares outstanding | 0 | 0 | 0 | ||
Common stock, outstanding | 126,944,190 | 126,944,190 | 126,156,189 | ||
Common stock, authorized | 300,000,000 | 300,000,000 | 300,000,000 | ||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||
Series AA Preferred Stock [Member] | |||||
Preferred stock, authorized | 3,000,000 | 3,000,000 | |||
Six Directors [Member] | |||||
Share price (in dollars per share) | $ / shares | $ 0.36 | ||||
Equity Incentive Program [Member] | Two Employees [Member] | |||||
Number of employees | Number | 2 | ||||
Number of common stock issued | 160,000 | ||||
Share price (in dollars per share) | $ / shares | $ 0.125 | ||||
Equity Incentive Program [Member] | Employees [Member] | |||||
Number of common stock issued | 115,503 | ||||
Share price (in dollars per share) | $ / shares | $ 0.12 | $ 0.12 | |||
FY2016 Director Compensation Plan [Member] | Six Directors [Member] | |||||
Number of common stock issued | 512,498 | ||||
Director Compensation Plan [Member] | Six Directors [Member] | |||||
Share price (in dollars per share) | $ / shares | $ 0.12 | $ 0.12 |
Stockholders' Equity (Details38
Stockholders' Equity (Details Narrative 1) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||
Sep. 30, 2016 | May 31, 2016 | Feb. 29, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | Jan. 31, 2016 | Jul. 16, 2015 | Apr. 09, 2015 | Feb. 28, 2015 | Jan. 31, 2015 | |
Volatility rate | 100.00% | ||||||||||
Risk free interest rate | 1.90% | ||||||||||
Six Directors [Member] | |||||||||||
Share price (in dollars per share) | $ 0.36 | ||||||||||
One Accredited Investor [Member] | |||||||||||
Share price (in dollars per share) | $ 0.0001 | ||||||||||
Two Former Employees [Member] | |||||||||||
Share price (in dollars per share) | $ 0.28 | ||||||||||
Options and Warrants [Member] | |||||||||||
Number of restricted shares issued, new issue | 60,000 | ||||||||||
Expense related to the vesting of outstanding | $ 7,500 | ||||||||||
Performance Market Based Stock Awards Dated February 2016 [Member] | |||||||||||
Number of restricted shares issued, new issue | 3,301,358 | ||||||||||
Amortization of unvested restricted shares | 5,878 | $ 452 | |||||||||
Value of restricted stock grant | $ 198,000 | ||||||||||
Method used | Monte Carlo Simulation. | ||||||||||
Expected term (in years) | 6 years | ||||||||||
Volatility rate | 91.00% | ||||||||||
Risk free interest rate | 1.34% | ||||||||||
Value of award | $ 18,000 | ||||||||||
Description of vesting rights | The restricted shares will vest according to the following terms: - 20% when the market price of the Companys common stock trades at or above $0.30 for a specified period. - 30% when the market price of the Companys common stock trades at or above $0.40 for a specified period. - 30% when the market price of the Companys common stock trades at or above $0.50 for a specified period. - 20% when the market price of the Companys common stock trades at or above $0.60 for a specified period. | ||||||||||
Performance Market Based Stock Awards Dated February 2016 [Member] | Chief Financial Officer [Member] | |||||||||||
Number of restricted shares issued, new issue | 2,200,905 | ||||||||||
Performance Market Based Stock Awards Dated February 2016 [Member] | President [Member] | |||||||||||
Number of restricted shares issued, new issue | 1,100,453 | ||||||||||
Restricted Shares [Member] | Vice President of U.S. Operations [Member] | |||||||||||
Number of restricted shares issued, new issue | 1,650,680 | ||||||||||
Amortization of unvested restricted shares | 6,499 | ||||||||||
Value of restricted stock grant | $ 141,000 | ||||||||||
Method used | Monte Carlo Simulation. | ||||||||||
Expected term (in years) | 6 years | ||||||||||
Volatility rate | 92.00% | ||||||||||
Risk free interest rate | 1.35% | ||||||||||
Description of vesting rights | - 20% when the market price of the Company’s common stock trades at or above $0.30 for a specified period. - 30% when the market price of the Company’s common stock trades at or above $0.40 for a specified period. - 30% when the market price of the Company’s common stock trades at or above $0.50 for a specified period. - 20% when the market price of the Company’s common stock trades at or above $0.60 for a specified period. | ||||||||||
Restricted Shares [Member] | Chief Executive Officer [Member] | |||||||||||
Number of restricted shares issued, new issue | 1,100,453 | ||||||||||
Value of restricted stock grant | $ 94,000 | ||||||||||
Share based compensation | 0 | ||||||||||
Value of award | 18,000 | ||||||||||
Description of vesting rights | - 20% when the market price of the Companys common stock trades at or above $0.30 for a specified period. - 30% when the market price of the Companys common stock trades at or above $0.40 for a specified period. - 30% when the market price of the Companys common stock trades at or above $0.50 for a specified period. - 20% when the market price of the Companys common stock trades at or above $0.60 for a specified period. | ||||||||||
Restricted Shares [Member] | Director [Member] | |||||||||||
Number of restricted shares issued, new issue | 940,595 | ||||||||||
Share price (in dollars per share) | $ 2 | ||||||||||
Amortization of unvested restricted shares | 17,900 | ||||||||||
Value of restricted stock grant | $ 430,000 | ||||||||||
Method used | Monte Carlo Simulation. | ||||||||||
Expected term (in years) | 6 years | ||||||||||
Volatility rate | 98.00% | ||||||||||
Risk free interest rate | 2.00% | ||||||||||
Restricted Shares [Member] | Former Interim Chief Executive Officer [Member] | |||||||||||
Number of restricted shares issued, new issue | 6,290,000 | ||||||||||
Performance Market Based Stock Awards [Member] | |||||||||||
Amortization of unvested restricted shares | $ 3,849 | $ 1,586 | |||||||||
Value of restricted stock grant | $ 38,000 | ||||||||||
Method used | Monte Carlo Simulation. | ||||||||||
Expected term (in years) | 6 years | ||||||||||
Volatility rate | 88.00% | ||||||||||
Risk free interest rate | 1.79% | ||||||||||
Performance Stock Awards January 2016 [Member] | |||||||||||
Number of restricted shares issued, new issue | 6,281,250 | ||||||||||
Share price (in dollars per share) | $ 0.12 | ||||||||||
Value of restricted stock grant | $ 509,000 | ||||||||||
Share based compensation | $ 113,840 | ||||||||||
Method used | Monte Carlo Simulation. | ||||||||||
Expected term (in years) | 1 year | ||||||||||
Volatility rate | 106.00% | ||||||||||
Risk free interest rate | 0.65% |
Segments (Details)
Segments (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Sales, net | $ 2,290,321 | $ 1,442,898 |
Cost of goods sold | 2,150,586 | |
Gross profit | 139,735 | 137,371 |
Total operating expenses | 1,051,671 | 938,035 |
Loss from operations | (911,936) | (800,664) |
Total other income and expenses | 196,218 | 4,559 |
Loss before provision for income taxes | (1,108,154) | $ (805,223) |
Consumer [Member] | ||
Sales, net | 1,598,640 | |
Cost of goods sold | 1,406,701 | |
Gross profit | 191,939 | |
Total operating expenses | 468,502 | |
Loss from operations | (276,563) | |
Total other income and expenses | 5,086 | |
Loss before provision for income taxes | (281,649) | |
Industrial [Member] | ||
Sales, net | 940,681 | |
Cost of goods sold | 992,885 | |
Gross profit | (52,204) | |
Total operating expenses | 253,795 | |
Loss from operations | (305,999) | |
Total other income and expenses | ||
Loss before provision for income taxes | (305,999) | |
Corporate [Member] | ||
Sales, net | (249,000) | |
Cost of goods sold | (249,000) | |
Gross profit | ||
Total operating expenses | ||
Loss from operations | ||
Total other income and expenses | ||
Loss before provision for income taxes | ||
InterSegmentsEliminations [Member] | ||
Sales, net | ||
Cost of goods sold | ||
Gross profit | ||
Total operating expenses | 329,374 | |
Loss from operations | (329,374) | |
Total other income and expenses | 191,132 | |
Loss before provision for income taxes | $ (520,506) |
Notes Payable (Details)
Notes Payable (Details) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Total notes payable | $ 5,570,142 | $ 5,504,818 |
Less current portion | 2,629,490 | 2,541,178 |
Long-term portion of notes payable | 2,940,652 | 2,963,640 |
2016 Secured Note [Member] | ||
Total notes payable | 375,152 | 396,562 |
2016 5% Related Party Unsecured Notes Member [Member] | ||
Total notes payable | 1,000,000 | 1,000,000 |
2016 8% Related Party Unsecured Notes Member [Member] | ||
Total notes payable | 1,544,990 | 1,458,256 |
2016 WEBA Seller Notes [Member] | ||
Total notes payable | $ 2,650,000 | $ 2,650,000 |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) - USD ($) | Dec. 27, 2016 | Sep. 30, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 |
Gain on settlement | $ 15,000 | ||||
Debt discount | 26,872 | ||||
Gross proceeds from offering | 1,760,000 | ||||
Accrued offering | 50,000 | ||||
Amortization expense | $ 86,734 | ||||
2016 Secured Note [Member] | Ascentium Capital [Member] | GlyEco Acquisition Corp. #5 [Member] | |||||
Principal balance | $ 320,000 | ||||
Interest rate | 7.10% | ||||
2016 Secured Note [Member] | Minimum [Member] | Ascentium Capital [Member] | GlyEco Acquisition Corp. #5 [Member] | |||||
Interest rate | 5.80% | ||||
Debt terms | 4 years | ||||
2016 Secured Note [Member] | Maximum [Member] | Ascentium Capital [Member] | GlyEco Acquisition Corp. #5 [Member] | |||||
Interest rate | 9.00% | ||||
Debt terms | 5 years | ||||
GlyEco Acquisition Corp. #5 [Member] | 2016 Unsecured Note [Member] | 5% Notes Subscription Agreement [Member] | |||||
Principal balance | $ 1,000,000 | ||||
Maturity date | May 31, 2017 | ||||
GlyEco Acquisition Corp. #1 [Member] | 2016 Unsecured Note [Member] | 5% Notes Subscription Agreement [Member] | |||||
Principal balance | $ 1,810,000 | ||||
Maturity date | Dec. 27, 2017 | ||||
Exercise value of warrants | $ 5,656,250 | ||||
Exercise price of warrants | $ 0.08 |
Related Party Transactions (Det
Related Party Transactions (Details) - Vice President of U.S. Operations [Member] - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Due from Related Parties, Current [Roll Forward] | ||
Beginning Balance | $ 5,123 | $ 2,791 |
Monies owed to related party for services performed | 24,707 | 21,106 |
Monies paid, net | (28,014) | (18,718) |
Ending Balance | $ 1,816 | $ 5,179 |
Related Party Transactions (D43
Related Party Transactions (Details Narrative) - GlyEco Acquisition Corp. #1 [Member] - 2016 Unsecured Note [Member] - 5% Notes Subscription Agreement [Member] | Dec. 27, 2016USD ($) |
Principal balance | $ 1,000,000 |
Principal balance | 1,810,000 |
Exercise value of warrants | $ 5,656,250 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | Mar. 22, 2016 | Jan. 08, 2016 | Dec. 28, 2015 | Mar. 31, 2017 | Sep. 30, 2016 | May 15, 2017 | Dec. 31, 2016 |
Litigation settlement amount | $ 95,000 | ||||||
Negotiated payment | $ 250,000 | ||||||
Demand for payment to maintain access to the facility | $ 2,300,000 | ||||||
Payment to landlord | $ 335,000 | ||||||
Maximum [Member] | |||||||
Environmental remediation liabilities | $ 2,000,000 | ||||||
Minimum [Member] | |||||||
Environmental remediation liabilities | $ 1,000,000 | ||||||
GlyEco Acquisition Corp. #4 [Member] | LitigationCaseSignificantOutstanding1Member | |||||||
Name of the plantiff | Encore Petroleum, LLC. | ||||||
Domicile of litigation | Superior Court of New Jersey Law Division, Hudson County. | ||||||
GlyEco Acquisition Corp. #4 [Member] | Litigation Case Significant Outstanding [Member] | |||||||
Name of the plantiff | Onyxx Group LLC. | ||||||
Domicile of litigation | Circuit Court of Hillsborough County, Florida. |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - Subsequent Event [Member] - USD ($) | Apr. 13, 2017 | Apr. 17, 2017 | Mar. 31, 2017 |
Debt Conversion, Original Debt, Interest Rate of Debt | 5.00% | ||
Sale and Leaseback [Member] | |||
Sale of certain operational equipment | $ 1,700,000 | ||
Lease Period | 48 months | ||
Monthly rental payments | $ 44,720 | ||
Equity Incentive Program [Member] | |||
Number common stock issued | 3,481,540 | ||
Number of shares new issue | 44,040 | ||
Warrants issued | 3,437,500 |