Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Aug. 13, 2018 | |
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 | Jun. 30, 2018 | |
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 | 1,348,292 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,018 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (unaudited) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Current Assets | ||
Cash | $ 142,933 | $ 111,302 |
Cash - restricted | 6,642 | |
Accounts receivable, net | 1,532,603 | 1,546,367 |
Prepaid expenses | 355,008 | 360,953 |
Inventories | 547,878 | 564,133 |
Total current assets | 2,578,422 | 2,589,397 |
Property, plant and equipment, net | 3,877,605 | 3,897,950 |
Other Assets | ||
Deposits | 436,800 | 436,450 |
Goodwill | 3,822,583 | 3,822,583 |
Other intangible assets, net | 2,021,543 | 2,266,654 |
Total other assets | 6,280,926 | 6,525,687 |
Total assets | 12,736,953 | 13,013,034 |
Current Liabilities | ||
Accounts payable and accrued expenses | 2,835,449 | 2,921,406 |
Contingent acquisition consideration | 1,503,113 | 1,509,755 |
Notes payable - current portion | 2,057,802 | 297,534 |
Capital lease obligations - current portion | 452,522 | 377,220 |
Total current liabilities | 6,848,886 | 5,105,915 |
Non-Current Liabilities | ||
Notes payable - non-current portion, net of debt discount | 2,898,582 | 2,953,631 |
Capital lease obligations - non-current portion | 972,573 | 1,085,985 |
Total non-current liabilities | 3,871,155 | 4,039,616 |
Total liabilities | 10,720,041 | 9,145,531 |
Stockholders' Equity | ||
Preferred stock, par value $0.0001 per share: 40,000,000 shares authorized; no shares issued and outstanding as of June 30, 2018 and December 31, 2017, respectively | ||
Common stock, par value $0.0001 per share: 300,000,000 shares authorized; 1,332,749 and 1,322,304 shares issued and outstanding as of June 30, 2018 and December 31, 2017, respectively | 133 | 132 |
Additional paid-in capital | 46,384,483 | 45,863,969 |
Accumulated deficit | (44,367,704) | (41,996,598) |
Total stockholders' equity | 2,016,912 | 3,867,503 |
Total liabilities and stockholders' equity | $ 12,736,953 | $ 13,013,034 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (unaudited) (Parenthetical) - $ / shares | Jun. 30, 2018 | Dec. 31, 2017 |
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 | 1,332,749 | 1,322,304 |
Common stock, outstanding | 1,332,749 | 1,322,304 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Income Statement [Abstract] | ||||
Sales, net | $ 3,467,380 | $ 2,918,097 | $ 6,468,390 | $ 5,208,418 |
Cost of goods sold | 3,072,941 | 2,441,243 | 5,522,041 | 4,591,829 |
Gross profit | 394,439 | 476,854 | 946,349 | 616,589 |
Operating expenses | ||||
Consulting fees | 25,553 | 165,536 | 74,144 | 218,962 |
Share-based compensation | 121,573 | 94,548 | 241,461 | 231,534 |
Salaries and wages | 554,182 | 363,546 | 1,216,413 | 706,601 |
Legal and professional | 211,041 | 187,740 | 541,480 | 348,731 |
General and administrative | 413,398 | 343,128 | 895,430 | 700,341 |
Total operating expenses | 1,325,747 | 1,154,498 | 2,968,928 | 2,206,169 |
Loss from operations | (931,308) | (677,644) | (2,022,579) | (1,589,580) |
Other expenses: | ||||
Interest expense | 222,226 | 223,385 | 331,276 | 419,603 |
Total other expense, net | 222,226 | 223,385 | 331,276 | 419,603 |
Loss before provision for income taxes | (1,153,534) | (901,029) | (2,353,855) | (2,009,183) |
Provision for income taxes | 1,197 | 17,251 | 1,953 | |
Net loss | $ (1,153,534) | $ (902,226) | $ (2,371,106) | $ (2,011,136) |
Basic and diluted loss per share (in dollars per share) | $ (0.87) | $ (0.88) | $ (1.79) | $ (1.97) |
Weighted average number of common shares outstanding - basic and diluted | 1,332,749 | 1,031,016 | 1,328,099 | 1,020,671 |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Statement of Stockholders' Equity - 6 months ended Jun. 30, 2018 - USD ($) | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
Balance, at beginning at Dec. 31, 2017 | $ 132 | $ 45,863,969 | $ (41,996,598) | $ 3,867,503 |
Balance, at beginning (in shares) at Dec. 31, 2017 | 1,322,304 | 1,322,304 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Share-based compensation | $ 1 | 241,460 | $ 241,461 | |
Share-based compensation (in shares) | 10,445 | |||
Relative fair value of warrants to issued in connection with notes payable | 279,054 | 279,054 | ||
Net loss | (2,371,106) | (2,371,106) | ||
Balance, at end at Jun. 30, 2018 | $ 133 | $ 46,384,483 | $ (44,367,704) | $ 2,016,912 |
Balance, at end (in shares) at Jun. 30, 2018 | 1,332,749 | 1,332,749 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows (unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Cash flows from operating activities | ||
Net loss | $ (2,371,106) | $ (2,011,136) |
Adjustments to reconcile net loss to net cash used in operating activities | ||
Depreciation | 309,800 | 233,612 |
Amortization | 245,111 | 263,775 |
Share-based compensation expense | 241,461 | 231,534 |
Amortization of debt discount | 66,404 | 174,416 |
Loss on disposal of equipment | 28,446 | |
(Recoveries on) provision for bad debt | (39,676) | 37,086 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | 53,440 | (266,922) |
Prepaid expenses | 71,820 | (31,555) |
Inventories | 16,255 | (883,280) |
Deposits | (350) | (46,355) |
Accounts payable and accrued expenses | (85,957) | 730,536 |
Due to related parties | (6,191) | |
Net cash used in operating activities | (1,492,798) | (1,546,034) |
Cash flows from investing activities | ||
Purchases of property, plant and equipment | (126,904) | (520,113) |
Cash paid for noncontrolling interest in RS&T | (129,500) | |
Payment of contingent acquisition consideration | (6,642) | (35,462) |
Net cash used in investing activities | (133,546) | (685,075) |
Cash flows from financing activities | ||
Repayment of notes payable | (226,763) | (1,041,669) |
Proceeds from sale-leaseback | 1,700,000 | |
Proceeds from exercise of warrants | 275,000 | |
Repayment of capital lease obligations | (200,661) | (74,093) |
Proceeds from issuance of notes, net | 2,078,757 | |
Net cash provided by financing activities | 1,651,333 | 859,238 |
Net change in cash and restricted cash | 24,989 | (1,371,871) |
Cash and restricted cash at beginning of the period | 117,944 | 1,490,551 |
Cash and restricted cash at end of the period | 142,933 | 118,680 |
Supplemental disclosure of cash flow information | ||
Interest paid during period | 205,123 | 68,238 |
Income taxes paid during period | 16,429 | 1,953 |
Reconciliation of cash and restricted cash at end of period: | ||
Cash | 142,933 | 77,590 |
Restricted Cash | 41,090 | |
Reconciliation of cash and restricted cash at end of period | 142,933 | 118,680 |
Supplemental disclosure of non-cash investing and financing activities | ||
Note payable issued for insurance premium | 65,875 | |
Acquisition of equipment with capital lease obligations | 162,551 | 1,700,000 |
Relative fair value of warrants issued in connection with notes payable | $ 279,054 |
Organization and Nature of Busi
Organization and Nature of Business | 6 Months Ended |
Jun. 30, 2018 | |
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 We believe our vertically integrated approach, which includes formulating products, acquiring feedstock, managing facility construction and upgrades, operating facilities, and distributing products through our fleet of trucks, positions us to serve our key markets and enables us to capture incremental revenue and margin throughout the process. Our network of facilities, develop, manufacture and distribute high quality products that meet or exceed industry quality standards, including a wide spectrum of ready to use antifreezes and additive packages for antifreeze/coolant, gas patch coolants and heat transfer fluid industries, throughout North America. 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 96.9% of Recovery Solutions & Technologies Inc. (“RS&T”), a privately-owned company involved in the development and commercialization of glycol recovery technology, now doing business as Glyeco West Virginia, Inc. (“Glyeco WV”) 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, located in Institute, West Virginia (the “Dow Assets”). During the first quarter of fiscal year 2017, the Company purchased an additional 2.9% of Glyeco WV (for a total percentage ownership of 99.8% of Glyeco WV). The Company was formed in the State of Nevada on October 21, 2011. We are currently comprised of the parent corporation GlyEco, Inc., WEBA, RS&T, and our acquisition subsidiaries that were formed to acquire our processing and distribution centers. We currently have six (6) processing and distribution centers, which are located in (1) Minneapolis, Minnesota, (2) Indianapolis, Indiana, (3) Lakeland, Florida, (4) Rock Hill, South California, (5) Tea, South Dakota, and (6) Landover, Maryland and are held in six (6) subsidiaries under the names of GlyEco Acquisition Corp. #1 through GlyEco Acquisition Corp. #7, excluding #4. Stock Split On July 10, 2018, the Company effected a reverse stock split of its common stock, immediately followed by a forward stock split of its common stock. The ratio for the reverse stock split is fixed at 1-for-500 and the ratio for the forward stock split is fixed at 4-for-1, resulting in a net reverse split of 125 for 1. All share and per share information in this Form 10-Q has been retroactively adjusted to reflect the reverse stock split. Going Concern The condensed consolidated financial statements as of June 30, 2018 and December 31, 2017 and for the three and six months ended June 30, 2018 and 2017, have been prepared assuming that the Company will continue as a going concern. As of June 30, 2018, 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 | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | NOTE 2 – Basis of Presentation and Summary of Significant Accounting Policies The following represents an update for the six months ended June 30, 2018 to the significant accounting policies described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. 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 condensed consolidated financial statements reflect all adjustments (consisting of normal recurring accruals) necessary for a fair presentation on an interim basis. The operating results for the six months ended June 30, 2018 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2018. 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, 2017, including the Company’s audited consolidated financial statements and related notes included therein. Principles of Consolidation These consolidated financial statements include the accounts of the Company 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 a 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; and (3) Each component of other comprehensive income or loss. Noncontrolling interests were not significant as of June 30, 2018 and December 31, 2017. 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. We have two operating segments, the Consumer and Industrial segments (See Note 8). 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 receivable, the value of share-based compensation and warrants, the recoverability of property, plant and equipment, goodwill, other intangibles and the determination of 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’s significant accounting policy for revenue was updated as a result of the adoption of ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)” in the first quarter of 2018. The Company recognizes revenue when its customer obtains control of promised goods or services in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. To determine revenue recognition for the arrangements that the Company determines are within the scope of Topic 606, the Company performs the following five steps: (1) identify the contract(s) with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract and (5) recognize revenue when (or as) the entity satisfies a performance obligation. See Note 3 for additional information on revenue recognition. 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 the three and six months ended June 30, 2018 and 2017. 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 condensed consolidated statements of operations. The allowance for doubtful accounts totaled $96,922 and $213,136 as of June 30, 2018 and December 31, 2017, respectively. Inventories Inventories are reported at the lower of cost and 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 net realizable values. Net realizable value is the estimated selling price in the ordinary course of business less the cost to sell. 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 Impairment of Long-Lived Assets Long-lived assets 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 condensed 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 condensed consolidated balance sheet, if material. 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 share of common stock is computed by dividing the net loss available to holders of common stock by the weighted average number of shares of common stock outstanding during a period. Diluted loss per share of common stock is computed by dividing the net loss available to holders of common stock by the weighted average number of shares of common stock outstanding plus potentially dilutive securities. The Company’s potentially dilutive securities outstanding are not shown in the diluted net loss per share calculation because their effect in both the three and six months ended June 30, 2018 and 2017 would be anti-dilutive. At June 30, 2018, these potentially dilutive securities included warrants to purchase 120,285 shares of common stock and stock options to purchase 27,101 shares of common stock for a total of 147,386 shares of common stock. At June 30, 2017, these potentially dilutive securities included warrants to purchase 63,035 shares of common stock and stock options to purchase 60,980 shares of common stock for a total of 124,015 shares of common stock. 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 Accounting Standards Codification (“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 the first quarter of 2018, the Company adopted ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”), which is the new comprehensive revenue recognition standard that supersedes the revenue recognition requirements in Topic 605, “Revenue Recognition,” and most industry specific guidance. The core principle of ASU 2014-09 is that a company will recognize revenue when it transfers promised goods or services to a customer in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In 2015 and 2016, FASB issued additional ASUs related to Topic 606 that delayed the effective date of ASU 2014-09 and clarified various aspects of the new revenue guidance, including principal versus agent considerations, identification of performance obligations, and accounting for licenses, and included other improvements and practical expedients. ASU 2014-09 was effective for annual and interim periods beginning after December 15, 2017. The Company elected to adopt ASU 2014-09 using the modified retrospective transition method for all contracts not completed as of the date of adoption. The adoption of the new guidance did not have a material impact on the consolidated financial statements. See “ Revenue Recognition 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 will not 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 has not yet selected a transition method and is currently assessing the impact that the adoption of ASU 2016-02 will have on the consolidated financial statements. In August 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows: Classification Restricted Cash”, which requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The Company adopted this standard in the first quarter of 2018 by using the retrospective transition method, which required the following disclosures and changes to the presentation of its consolidated financial statements: cash and restricted cash reported on the condensed consolidated statements of cash flows now includes restricted cash of $76,552, $41,090 and $6,642 as of December 31, 2016, June 30, 2017 and December 31, 2017, respectively, as well as previously reported cash. |
Revenue
Revenue | 6 Months Ended |
Jun. 30, 2018 | |
Notes to Financial Statements | |
Revenue | NOTE 3 – Revenue Revenue Recognition All of the Company’s revenue is derived from product sales. As of January 1, 2018, the Company accounts for revenue in accordance with Topic 606, “Revenue from Contracts with Customers.” See discussion of the principal activities or the Company’s operating segments in Note 8. Product sales consist of sales of the Company’s products to manufacturers and distributors. The Company considers order confirmations or purchase orders, which in some cases are governed by master supply agreements, to be contracts with a customer. Product sale contracts are short-term contracts where the time between order confirmation and satisfaction of all performance obligations is less than one year. Revenues from product sales are recognized when the customer obtains control of the Company’s product, which occurs at a point in time, usually upon shipment, with payment terms typically in the range of 30 to 60 days after invoicing, depending on business and geographic region. When the Company performs shipping and handling activities after the transfer of control to the customer (e.g., when control transfers prior to shipment), these are considered fulfillment activities, and accordingly, the costs are accrued when the related revenue is recognized. The Company has no obligations for returns and warranties. Taxes collected from customers relating to product sales and remitted to governmental authorities are excluded from revenues. Disaggregation of Revenue The Company disaggregates its revenue from contracts with customers by principal product group and geographic region, as the Company believes it best depicts the nature, amount, timing and uncertainty of its revenue and cash flows. See details in the tables below: Net Trade Revenue by Principal Product Group Three Months Ended June 30, 2018 Consumer Industrial Antifreeze $ 1,327,263 $ — Ethylene Glycol — 1,191,186 Additive — 868,318 Windshield Washer fluid 75,342 — Equipment 5,271 — Total $ 1,407,876 $ 2,059,504 Net Trade Revenue by Geographic Region Three Months Ended June 30, 2018 US $ 3,020,029 Canada 444,471 China - India 2,880 Total $ 3,467,380 Net Trade Revenue by Principal Product Group Six Months Ended June 30, 2018 Consumer Industrial Antifreeze $ 2,979,459 $ — Ethylene Glycol — 1,954,988 Additive — 1,368,514 Windshield Washer fluid 157,516 — Equipment 7,913 — Total $ 3,144,888 $ 3,323,502 Net Trade Revenue by Geographic Region Six Months Ended June 30, 2018 US $ 5,683,614 Canada 761,238 China 20,658 India 2,880 Total $ 6,468,390 Contract Balances Accounts receivable are recorded when the right to consideration becomes unconditional. The Company does not have any contract assets or liabilities as of June 30, 2018 and December 31, 2017. The Company has utilized the practical expedient which enables the Company to expense commissions when incurred as they would be amortized over one year or less. |
Inventories
Inventories | 6 Months Ended |
Jun. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories | NOTE 4 – Inventories The Company’s total inventories were as follows: June 30, December 31, 2018 2017 Raw materials $ 259,577 $ 241,297 Work in process 21,726 69,991 Finished goods 266,575 252,845 Total inventories $ 547,878 $ 564,133 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 6 Months Ended |
Jun. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | NOTE 5 – Goodwill and Other Intangible Assets The components of goodwill and other intangible assets are as follows: Net Balance at Estimated Accumulated June 30, Useful Life Cost Additions Amortization 2018 Finite live intangible assets: Customer list and tradename 5 years $ 987,500 $ — $ (325,027 ) $ 662,473 Non-compete agreements 5 years 1,199,000 — (587,930 ) 611,070 Intellectual property 10 years 880,000 — (132,000 ) 748,000 Total intangible assets $ 3,066,500 $ — $ (1,044,957 ) $ 2,021,543 Goodwill Indefinite $ 3,822,583 $ — $ — $ 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 | 6 Months Ended |
Jun. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | NOTE 6 – Property, Plant and Equipment The Company’s property, plant and equipment were as follows: June 30, December 31, 2018 2017 Machinery and equipment $ 4,934,251 $ 4,782,257 Leasehold improvements 304,311 275,973 Accumulated depreciation (1,645,414 ) (1,335,615 ) 3,593,148 3,722,615 Construction in process 284,457 175,335 Total property, plant and equipment, net $ 3,877,605 $ 3,897,950 |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2018 | |
Stockholders' Equity | |
Stockholders' Equity | NOTE 7– Stockholders’ Equity Preferred Stock The Company’s articles of incorporation authorize the Company to issue up to 40,000,000 shares of preferred stock, par value $0.0001 per share, having preferences to be determined by the Board of Directors of the Company for dividends and liquidation of the Company’s assets. Of the 40,000,000 shares of preferred stock the Company is authorized to issue by its articles of incorporation, the Board of Directors has designated up to 3,000,000 shares as Series AA Preferred Stock. As of June 30, 2018, the Company had no shares of preferred stock outstanding. Common Stock As of June 30, 2018, the Company has 1,332,749 shares of common stock, par value $0.0001 per share, 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 of stockholders, and to share pro rata in all dividends payable on the common stock after payment of dividends on any shares of preferred stock having preference in payment of dividends. 2017 Employee Stock Purchase Plan On September 29, 2017, subject to stockholder approval, the Company’s Board of Directors approved the Company’s 2017 Employee Stock Purchase Plan (the “2017 ESPP”). The 2017 ESPP was approved by the Company’s stockholders at the Company’s 2017 Annual Meeting of Stockholders on November 14, 2017. Under the 2017 ESPP, the Company may grant eligible employees the right to purchase our common stock through payroll deductions at a price equal to the lesser of eighty five percent (85%) of the fair market value of a share of common stock on the exercise date of the current offering period or eighty five percent (85%) of the fair market value of our common stock on the grant date of the then current offering period. The first offering period began on November 14, 2017. Thereafter, there will be consecutive six-month offering periods until January 2, 2022, or until the 2017 ESPP is terminated by the Board of Directors of the Company, if earlier. The Company recorded stock-based compensation expense related to the 2017 ESPP of approximately $11,000 and $20,000 during the three and six months ended June 30, 2018, respectively. During the six months ended June 30, 2018, the Company issued the following shares of common stock for compensation: On January 8, 2018, the Company issued 1,200 shares of common stock to one employee of the Company at a price of $7.50 per share for a value of approximately $9,000. On March 31, 2018, the Company issued an aggregate of 9,245 shares of common stock to six directors of the Company pursuant to the Company’s FY2017 Director Compensation Plan at a price of $8.13 per share for a value of approximately $75,000. On June 30, 2018, the Company expensed the value of an aggregate of 11,766 shares of common stock to six directors of the Company pursuant to the Company’s FY2017 Director Compensation Plan at a price of $6.38 per share totaling approximately $75,000. A summary of the Company’s performance and market-based restricted stock awards (including shares approved but not issued) is presented below: Number of Shares Weighted- Average Grant-Date Fair Value per Share Unvested at January 1, 2018 114,236 $ 8.75 Restricted stock granted 15,640 4.55 Restricted stock vested — — Restricted stock forfeited (9,280 ) 8.73 Unvested at June 30, 2018 120,596 $ 8.34 During the three and six months ended June 30, 2018 and 2017, the Company recorded $35,570 and $62,344 and $13,545 and $47,671, respectively, related to the performance and market based restricted stock awards. Options and Warrants During the six months ended June 30, 2018, the Company issued warrants to purchase an aggregate of 84,000 shares of common stock in connection with the issuance of notes payable. (See Note 9). |
Segments
Segments | 6 Months Ended |
Jun. 30, 2018 | |
Segment Reporting [Abstract] | |
Segments | NOTE 8 – Segments GlyEco conducts its operations in two business segments: the Consumer segment and the Industrial segment. The Consumer segment’s principal business activity is the production and distribution of ASTM (American Society for Testing Materials) grade glycol products, specifically automotive antifreeze and specialty-blended antifreeze, for sale into the automotive and industrial end markets. The Consumer segment operates a full lifecycle business, picking up waste antifreeze and producing finished antifreeze from both recycled and virgin glycol sources. We operate six processing and distribution centers located in the eastern region of the United States. The production capacity of the Consumer segment is approximately 90,000 gallons per month of ready to use (50/50) antifreeze. Operations in our Industrial segment are conducted through WEBA and Glyeco WV, two of our subsidiaries. WEBA develops, manufactures and markets additive packages for the antifreeze/coolant, gas patch coolant and heat transfer industries throughout North America. Glyeco WV operates a glycol re-distillation plant in West Virginia that produces virgin quality glycol for sale to industrial customers worldwide. The production capacity of the Glyeco WV facility is approximately 1.5 million gallons per month of concentrated ethylene glycol. The Glyeco WV facility current produces antifreeze and industrial grade ethylene glycol. 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 for reporting purposes. 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 June 30, 2018 is presented below: Consumer Industrial Inter- Segment Eliminations Corporate Total Sales, net $ 1,407,876 $ 2,277,694 $ (218,190 ) $ — $ 3,467,380 Cost of goods sold 1,496,481 1,794,650 (218,190 ) — 3,072,941 Gross (loss) profit (88,605 ) 483,044 — — 394,439 Total operating expenses 554,170 378,266 — 393,311 1,325,747 (Loss) Income from operations (642,775 ) 104,778 — (393,311 ) (931,308 ) Total other expenses (4,983 ) 40,168 — (257,411 ) (222,226 ) (Loss) Income before provision for income taxes $ (647,758 ) $ 144,946 $ — $ (650,722 ) $ (1,153,534 ) Segment information, and the reconciliation to the Company’s consolidated financial statements, for the six months ended June 30, 2018 is presented below: Consumer Industrial Inter- Segment Eliminations Corporate Total Sales, net $ 3,147,460 $ 3,886,019 $ (565,089 ) $ — $ 6,468,390 Cost of goods sold 3,065,668 3,021,462 (565,089 ) — 5,522,041 Gross profit 81,792 864,557 — — 946,349 Total operating expenses 1,267,706 770,700 — 930,522 2,968,928 (Loss) Income from operations (1,185,914 ) 93,857 — (930,522 ) (2,022,579 ) Total other expenses (10,411 ) (4,431 ) — (316,434 ) (331,276 ) (Loss) Income before provision for income taxes $ (1,196,325 ) $ 89,426 $ — $ (1,246,956 ) $ (2,353,855 ) |
Notes Payable
Notes Payable | 6 Months Ended |
Jun. 30, 2018 | |
Notes Payable [Abstract] | |
Notes Payable | NOTE 9 – Notes Payable Notes payable consist of the following: As of June 30, 2018 As of December 31, 2017 2018 Related Party 10% Unsecured Notes, net of debt discount of $233,894 $ 1,866,106 $ — 2017 Secured Note 93,324 104,990 2018 and 2017 Unsecured Note 80,593 188,060 2016 Secured Notes 266,361 308,115 2016 WEBA Seller Notes 2,650,000 2,650,000 Total notes payable 4,956,384 3,251,165 Less current portion (2,057,802 ) (297,534 ) Long-term portion of notes payable $ 2,898,582 $ 2,953,631 2018 Related Party 10% Unsecured Notes On March 29, 2018, the Company entered into a subscription agreement (the “10% Notes Subscription Agreement”) by and between the Company and Wynnefield Partners Small Cap Value I, L.P. and Wynnefield Partners Small Cap Value, L.P., (“Wynnefield Funds”) which are under the management of Wynnefield Capital, Inc. (“Wynnefield Capital”). The 10% Notes Subscription Agreement was the first tranche of a private placement (“Private Placement”). Pursuant to the 10% Notes Subscription Agreement, the Company offered and issued (i) $1,000,000 in principal amount of 10% Senior Unsecured Promissory Notes (the “10% Notes” or “Institutional Notes”) and (ii) warrants (the “Warrants” or “Institutional Warrants”) to purchase up to 40,000 shares of common stock of the Company. The Company received $1,000,000 in proceeds from the offering. The first tranche of the 10% Notes is scheduled to mature on May 4, 2019. The 10% Notes bear interest at a rate of 10% per annum due on the maturity date or as otherwise specified by the 10% Notes. The Company closed a second tranche of the Private Placement on April 10, 2018 with one of its directors, Charles F. Trapp , with respect to a 10% note with a principal amount of $50,000 and a warrant to purchase 2,000 shares of common stock. The second tranche of the Private Placement is scheduled to mature on May 9, 2019. The Company closed a third tranche of the Private Placement on May 1, 2018 with Ian Rhodes, the Company’s Chief Executive Officer and director, with respect to a 10% note with a principal amount of $50,000 and a warrant to purchase 2,000 shares of common stock. The third tranche of the Private Placement is scheduled to mature on June 1, 2019. The Company closed a fourth tranche of the Private Placement on May 4, 2018 with the Wynnefield Funds managed by Wynnefield Capital, for an aggregate principal amount of $1,000,000 of 10% notes and warrants to purchase an aggregate of 40,000 shares of common stock. The fourth tranche of the Private Placement is scheduled to mature on May 6, 2019. The Company allocated the proceeds received from the Initial Notes and the Initial Warrants on a relative fair value basis at the time of issuance. The total debt discount of $300,298, including the relative fair value of the warrants and the debt issuance costs will be amortized over the life of the 10% Notes to interest expense using the effective interest method. Amortization expense during the six months ended June 30, 2018 was $66,404. We estimated the fair value of the Initial Warrants on the issuance date using a BSM option pricing model with the following assumptions: Initial Warrants Expected term 3 years Volatility 143.81 % Risk Free Rate 2.39 % The proceeds of the Initial Notes were allocated to the components as follows: Proceeds allocated at issuance date Notes $ 1,820,946 Warrants 279,054 Total $ 2,100,000 2018 and 2017 Unsecured Note In October 2017, and later amended in January 2018, the Company entered into an unsecured note with Bank Direct to finance its insurance premiums (the “2018 and 2017 Unsecured Note”). The key terms of the 2018 and 2017 Unsecured Note include: (i) an original principal balance of $242,866, (ii) an interest rate of 5.4%, and (iii) a term of ten months. If the Company should default on the loan, Bank Direct may cancel the Company’s underlying insurance and the Company would only owe any earned but unpaid premium. This would be a minimal amount as deposits and payments are paid in advance to reduce the lender’s risk. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 10 – Related Party Transactions Vice President of U.S. Operations The former 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 and distribution 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. The ending balance is included in accounts payable and accrued expenses in the accompanying condensed consolidated balance sheet. 2018 2017 Beginning Balance as of January 1, $ — $ 5,123 Monies owed to related party for services performed 42,889 61,818 Monies paid (32,605 ) (66,941 ) Ending balance as of June 30, $ 10,284 $ - 10% Notes In addition, on March 29, 2018 and May 4, 2018, the Company entered into the Institutional Notes for an aggregate principal amount of $2,000,000 from the offering and issuance of 10% Notes to Wynnefield Partners Small Cap Value I, L.P. and Wynnefield Partners Small Cap Value, L.P, which are under the management of Wynnefield Capital. The Company’s Chairman of the Board, Dwight Mamanteo, is a portfolio manager of Wynnefield Capital. (See Note 9 for additional information). The Company closed a subsequent tranche of the Private Placement on April 10, 2018, with Trapp with respect to the Trapp Note with a principal amount of $50,000 and the Trapp Warrant to purchase 2,000 shares of common stock. (See Note 9 for additional information). The Company closed a subsequent tranche of the Private Placement on May 1, 2018, with Rhodes with respect to the Rhodes Note with a principal amount of $50,000 and the Rhodes Warrant to purchase 2,000 shares of common stock. (See Note 9 for additional information). |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 11 – Commitments and Contingencies Litigation The Company may be party to legal proceedings in the ordinary course of business from time to time. Litigation is subject to inherent uncertainties, and an adverse result in a legal proceeding could arise that may harm our business. Below is an overview of a pending legal proceeding in which an adverse result could have a material adverse effect on our business and results of operations. On December 27, 2017, PSP Falcon Industries, LLC (“PSP Falcon”) filed a civil action against the Company in the Ocean County Superior Court located in Toms River, New Jersey. The civil action relates to an outstanding balance alleged to be due to PSP Falcon from the Company in an amount of $530,633 related to certain construction expenses. The Company believes it has paid PSP Falcon in full for the services rendered and therefore that no outstanding balance remains due. Accordingly, the Company plans to vigorously defend itself from this claim. 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 GAAP; 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. 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. In December 2016, the Company completed the acquisition of certain glycol distillation assets from Union Carbide Corporation in Institute, West Virginia. In order to comply with West Virginia regulations enacted in 2017, the Company has elected to accrue $780,000 for tank remediation. The amount of the accrual is based on various assumptions and estimates and will be periodically reevaluated in light of a variety of future events and contingencies. During early August 2018, the Company experienced an environmental issue related to the processing of feedstock at its Institute, WV facility, which resulted in the Company shutting down production at the facility. The Company is working with regulatory agencies, its landlord and site services provider, and feedstock suppliers to address this issue and currently expects production to resume in late August or early September. At this time, the Company cannot estimate the cost, if any, related to the issue. |
Basis of Presentation and Sum18
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
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 condensed consolidated financial statements reflect all adjustments (consisting of normal recurring accruals) necessary for a fair presentation on an interim basis. The operating results for the six months ended June 30, 2018 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2018. 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, 2017, including the Company’s audited consolidated financial statements and related notes included therein. |
Principles of Consolidation | Principles of Consolidation These consolidated financial statements include the accounts of the Company 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 a 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; and (3) Each component of other comprehensive income or loss. Noncontrolling interests were not significant as of June 30, 2018 and December 31, 2017. |
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. We have two operating segments, the Consumer and Industrial segments (See Note 8). |
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 for doubtful accounts receivable, the value of share-based compensation and warrants, the recoverability of property, plant and equipment, goodwill, other intangibles and the determination of 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’s significant accounting policy for revenue was updated as a result of the adoption of ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)” in the first quarter of 2018. The Company recognizes revenue when its customer obtains control of promised goods or services in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. To determine revenue recognition for the arrangements that the Company determines are within the scope of Topic 606, the Company performs the following five steps: (1) identify the contract(s) with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract and (5) recognize revenue when (or as) the entity satisfies a performance obligation. See Note 3 for additional information on revenue recognition. |
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 the three and six months ended June 30, 2018 and 2017. 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 condensed consolidated statements of operations. The allowance for doubtful accounts totaled $96,922 and $213,136 as of June 30, 2018 and December 31, 2017, respectively. |
Inventories | Inventories Inventories are reported at the lower of cost and 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 net realizable values. Net realizable value is the estimated selling price in the ordinary course of business less the cost to sell. |
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 |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Long-lived assets 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 condensed 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 condensed consolidated balance sheet, if material. |
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 share of common stock is computed by dividing the net loss available to holders of common stock by the weighted average number of shares of common stock outstanding during a period. Diluted loss per share of common stock is computed by dividing the net loss available to holders of common stock by the weighted average number of shares of common stock outstanding plus potentially dilutive securities. The Company’s potentially dilutive securities outstanding are not shown in the diluted net loss per share calculation because their effect in both the three and six months ended June 30, 2018 and 2017 would be anti-dilutive. At June 30, 2018, these potentially dilutive securities included warrants to purchase 120,285 shares of common stock and stock options to purchase 27,101 shares of common stock for a total of 147,386 shares of common stock. At June 30, 2017, these potentially dilutive securities included warrants to purchase 63,035 shares of common stock and stock options to purchase 60,980 shares of common stock for a total of 124,015 shares of common stock. |
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 Accounting Standards Codification (“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 the first quarter of 2018, the Company adopted ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”), which is the new comprehensive revenue recognition standard that supersedes the revenue recognition requirements in Topic 605, “Revenue Recognition,” and most industry specific guidance. The core principle of ASU 2014-09 is that a company will recognize revenue when it transfers promised goods or services to a customer in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In 2015 and 2016, FASB issued additional ASUs related to Topic 606 that delayed the effective date of ASU 2014-09 and clarified various aspects of the new revenue guidance, including principal versus agent considerations, identification of performance obligations, and accounting for licenses, and included other improvements and practical expedients. ASU 2014-09 was effective for annual and interim periods beginning after December 15, 2017. The Company elected to adopt ASU 2014-09 using the modified retrospective transition method for all contracts not completed as of the date of adoption. The adoption of the new guidance did not have a material impact on the consolidated financial statements. See “ Revenue Recognition 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 will not 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 has not yet selected a transition method and is currently assessing the impact that the adoption of ASU 2016-02 will have on the consolidated financial statements. In August 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows: Classification Restricted Cash”, which requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The Company adopted this standard in the first quarter of 2018 by using the retrospective transition method, which required the following disclosures and changes to the presentation of its consolidated financial statements: cash and restricted cash reported on the condensed consolidated statements of cash flows now includes restricted cash of $76,552, $41,090 and $6,642 as of December 31, 2016, June 30, 2017 and December 31, 2017, respectively, as well as previously reported cash. |
Revenue (Tables)
Revenue (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Notes to Financial Statements | |
Summary of revenue from contracts with customers | The Company disaggregates its revenue from contracts with customers by principal product group and geographic region, as the Company believes it best depicts the nature, amount, timing and uncertainty of its revenue and cash flows. See details in the tables below: Net Trade Revenue by Principal Product Group Three Months Ended June 30, 2018 Consumer Industrial Antifreeze $ 1,327,263 $ — Ethylene Glycol — 1,191,186 Additive — 868,318 Windshield Washer fluid 75,342 — Equipment 5,271 — Total $ 1,407,876 $ 2,059,504 Net Trade Revenue by Geographic Region Three Months Ended June 30, 2018 US $ 3,020,029 Canada 444,471 China - India 2,880 Total $ 3,467,380 Net Trade Revenue by Principal Product Group Six Months Ended June 30, 2018 Consumer Industrial Antifreeze $ 2,979,459 $ — Ethylene Glycol — 1,954,988 Additive — 1,368,514 Windshield Washer fluid 157,516 — Equipment 7,913 — Total $ 3,144,888 $ 3,323,502 Net Trade Revenue by Geographic Region Six Months Ended June 30, 2018 US $ 5,683,614 Canada 761,238 China 20,658 India 2,880 Total $ 6,468,390 |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | The Company’s total inventories were as follows: June 30, December 31, 2018 2017 Raw materials $ 259,577 $ 241,297 Work in process 21,726 69,991 Finished goods 266,575 252,845 Total inventories $ 547,878 $ 564,133 |
Goodwill and Other Intangible21
Goodwill and Other Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Business Combinations [Abstract] | |
Schedule of intangible assets | The components of goodwill and other intangible assets are as follows: Net Balance at Estimated Accumulated June 30, Useful Life Cost Additions Amortization 2018 Finite live intangible assets: Customer list and tradename 5 years $ 987,500 $ — $ (325,027 ) $ 662,473 Non-compete agreements 5 years 1,199,000 — (587,930 ) 611,070 Intellectual property 10 years 880,000 — (132,000 ) 748,000 Total intangible assets $ 3,066,500 $ — $ (1,044,957 ) $ 2,021,543 Goodwill Indefinite $ 3,822,583 $ — $ — $ 3,822,583 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property, plant and equipment | The Company’s property, plant and equipment were as follows: June 30, December 31, 2018 2017 Machinery and equipment $ 4,934,251 $ 4,782,257 Leasehold improvements 304,311 275,973 Accumulated depreciation (1,645,414 ) (1,335,615 ) 3,593,148 3,722,615 Construction in process 284,457 175,335 Total property, plant and equipment, net $ 3,877,605 $ 3,897,950 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Stockholders' Equity | |
Summary of restricted stock awards | A summary of the Company’s performance and market-based restricted stock awards (including shares approved but not issued) is presented below: Number of Shares Weighted- Average Grant-Date Fair Value per Share Unvested at January 1, 2018 114,236 $ 8.75 Restricted stock granted 15,640 4.55 Restricted stock vested — — Restricted stock forfeited (9,280 ) 8.73 Unvested at June 30, 2018 120,596 $ 8.34 |
Segments (Tables)
Segments (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
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 June 30, 2018, is presented below: Consumer Industrial Inter Segment Eliminations Corporate Total Sales, net $ 1,407,876 $ 2,277,694 $ (218,190 ) $ — $ 3,467,380 Cost of goods sold 1,496,481 1,794,650 (218,190 ) — 3,072,941 Gross (loss) profit (88,605 ) 483,044 — — 394,439 Total operating expenses 554,170 378,266 — 393,311 1,325,747 (Loss) Income from operations (642,775 ) 104,778 — (393,311 ) (931,308 ) Total other expenses (4,983 ) 40,168 — (257,411 ) (222,226 ) (Loss) Income before provision for income taxes $ (647,758 ) $ 144,946 $ — $ (650,722 ) $ (1,153,534 ) Segment information, and the reconciliation to the Company’s consolidated financial statements, for the six months ended June 30, 2018, is presented below: Consumer Industrial Inter Segment Eliminations Corporate Total Sales, net $ 3,147,460 $ 3,886,019 $ (565,089 ) $ — $ 6,468,390 Cost of goods sold 3,065,668 3,021,462 (565,089 ) — 5,522,041 Gross profit 81,792 864,557 — — 946,349 Total operating expenses 1,267,706 770,700 — 930,522 2,968,928 (Loss) Income from operations (1,185,914 ) 93,857 — (930,522 ) (2,022,579 ) Total other expenses (10,411 ) (4,431 ) — (316,434 ) (331,276 ) (Loss) Income before provision for income taxes $ (1,196,325 ) $ 89,426 $ — $ (1,246,956 ) $ (2,353,855 ) |
Notes Payable (Tables)
Notes Payable (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Notes Payable [Abstract] | |
Schedule of notes payable | Notes payable consist of the following: As of June 30, 2018 As of December 31, 2017 2018 Related Party 10% Unsecured Notes, net of debt discount of $233,894 $ 1,866,106 $ — 2017 Secured Note 93,324 104,990 2018 and 2017 Unsecured Note 80,593 188,060 2016 Secured Notes 266,361 308,115 2016 WEBA Seller Notes 2,650,000 2,650,000 Total notes payable 4,956,384 3,251,165 Less current portion (2,057,802 ) (297,534 ) Long-term portion of notes payable $ 2,898,582 $ 2,953,631 |
Schedule of Warrants valuation assumptions | We estimated the fair value of the Initial Warrants on the issuance date using a BSM option pricing model with the following assumptions: Initial Warrants Expected term 3 years Volatility 143.81 % Risk Free Rate 2.39 % |
Components of debt | The proceeds of the Initial Notes were allocated to the components as follows: Proceeds allocated at issuance date Notes $ 1,820,946 Warrants 279,054 Total $ 2,100,000 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
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. The ending balance is included in accounts payable and accrued expenses in the accompanying condensed consolidated balance sheet. 2018 2017 Beginning Balance as of January 1, $ — $ 5,123 Monies owed to related party for services performed 42,889 61,818 Monies paid (32,605 ) (66,941 ) Ending balance as of June 30, $ 10,284 $ - |
Organization and Nature of Bu27
Organization and Nature of Business (Details Narrative) | Jul. 10, 2018 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 27, 2016 |
Reverse stock split | 1-for-500 | |||
Forward stock split | 4-for-1 | |||
Net reverse split | 125 for 1 | |||
Glyeco West Virginia, Inc | ||||
Ownership percentage | 99.80% | 2.90% | 96.90% |
Basis of Presentation and Sum28
Basis of Presentation and Summary of Significant Accounting Policies (Details) | 6 Months Ended |
Jun. 30, 2018 | |
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 Sum29
Basis of Presentation and Summary of Significant Accounting Policies (Details Narrative) | 6 Months Ended | |||
Jun. 30, 2018USD ($)Numbershares | Jun. 30, 2017USD ($)shares | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Noncontrolling interests | $ 0 | $ 0 | ||
Number of operating segement | Number | 2 | |||
Allowance for doubtful accounts | $ 96,922 | 213,136 | ||
Number of potentially dilutive securities | shares | 147,386 | 124,015 | ||
Salvage value of property, plant and equipment | $ 0 | |||
Restricted cash | $ 41,090 | $ 6,642 | $ 76,552 | |
Warrant [Member] | ||||
Number of potentially dilutive securities | shares | 120,285 | 63,035 | ||
Employee Stock Option [Member] | ||||
Number of potentially dilutive securities | shares | 27,101 | 60,980 |
Revenue (Details)
Revenue (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Revenues | $ 3,467,380 | $ 2,918,097 | $ 6,468,390 | $ 5,208,418 |
United States [Member] | ||||
Revenues | 3,020,029 | 5,683,614 | ||
Canada [Member] | ||||
Revenues | 444,471 | 761,238 | ||
China [Member] | ||||
Revenues | 20,658 | |||
India [Member] | ||||
Revenues | 2,880 | 2,880 | ||
Consumer [Member] | ||||
Revenues | 1,407,876 | 3,147,460 | ||
Consumer [Member] | Antifreeze | ||||
Revenues | 1,327,263 | 2,979,459 | ||
Consumer [Member] | Windshield Washer fluid | ||||
Revenues | 75,342 | 157,516 | ||
Consumer [Member] | Equipment | ||||
Revenues | 5,271 | 7,913 | ||
Consumer [Member] | ||||
Revenues | 1,407,876 | 3,144,888 | ||
Industrial [Member] | ||||
Revenues | 2,059,504 | 3,323,502 | ||
Industrial [Member] | Ethylene Glycol | ||||
Revenues | 1,191,186 | 1,954,988 | ||
Industrial [Member] | Additive | ||||
Revenues | $ 868,318 | $ 1,368,514 |
Revenue (Details Narrative)
Revenue (Details Narrative) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Notes to Financial Statements | ||
Contract assets or liability | $ 0 | $ 0 |
Inventories (Details)
Inventories (Details) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 259,577 | $ 241,297 |
Work in process | 21,726 | 69,991 |
Finished goods | 266,575 | 252,845 |
Total inventories | $ 547,878 | $ 564,133 |
Goodwill and Other Intangible33
Goodwill and Other Intangible Assets (Details) | 6 Months Ended |
Jun. 30, 2018USD ($) | |
Finite live intangible assets | |
Gross | $ 3,066,500 |
Additions | |
Accumulated Amortization | (1,044,957) |
Net | $ 2,021,543 |
Goodwill | |
Estimated Useful Life | Indefinite |
Gross | $ 3,822,583 |
Additions | |
Accumulated Amortization | |
Net | $ 3,822,583 |
Customer List And Tradename [Member] | |
Finite live intangible assets | |
Estimated Useful Life | 5 years |
Gross | $ 987,500 |
Additions | |
Accumulated Amortization | (325,027) |
Net | $ 662,473 |
Non-Compete Agreements [Member] | |
Finite live intangible assets | |
Estimated Useful Life | 5 years |
Gross | $ 1,199,000 |
Additions | |
Accumulated Amortization | (587,930) |
Net | $ 611,070 |
Intellectual Property [Member] | |
Finite live intangible assets | |
Estimated Useful Life | 10 years |
Gross | $ 880,000 |
Additions | |
Accumulated Amortization | (132,000) |
Net | $ 748,000 |
Property, Plant and Equipment34
Property, Plant and Equipment (Details) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Accumulated depreciation | $ (1,645,414) | $ (1,335,615) |
Property, plant and equipment before construction in process | 3,593,148 | 3,722,615 |
Construction in process | 284,457 | 175,335 |
Total property, plant and equipment, net | 3,877,605 | 3,897,950 |
Machinery And Equipment [Member] | ||
Property, plant and equipment before construction in process | 4,934,251 | 4,782,257 |
Leasehold improvements [Member] | ||
Property, plant and equipment before construction in process | $ 304,311 | $ 275,973 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) | 6 Months Ended |
Jun. 30, 2018$ / sharesshares | |
Number of Shares | |
Unvested at beginning | shares | 114,236 |
Restricted stock granted | shares | 15,640 |
Restricted stock vested | shares | |
Restricted stock forfeited | shares | (9,280) |
Unvested at end | shares | 120,596 |
Weighted Average Grant-Date Fair Value per Share | |
Unvested at beginning | $ / shares | $ 8.75 |
Restricted stock granted | $ / shares | 4.55 |
Restricted stock vested | $ / shares | |
Restricted stock forfeited | $ / shares | 8.73 |
Unvested at end | $ / shares | $ 8.34 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 13 Months Ended | |||
Jan. 18, 2018 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Oct. 29, 2018 | Dec. 31, 2017 | |
Preferred stock, authorized | 40,000,000 | 40,000,000 | 40,000,000 | ||||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||
Preferred stock, shares outstanding | 0 | 0 | 0 | ||||
Common stock, outstanding | 1,332,749 | 1,332,749 | 1,322,304 | ||||
Common stock, authorized | 300,000,000 | 300,000,000 | 300,000,000 | ||||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||
Stock-based compensation expense | $ 121,573 | $ 94,548 | $ 241,461 | $ 231,534 | |||
Value of award | 35,570 | $ 13,545 | $ 62,344 | $ 47,671 | |||
Warrants issued in connection with issuance of notes payable | 84,000 | ||||||
2017 Employee Stock Purchase Plan [Member] | |||||||
Employee Stock Purchase Plan, Description | The Company may grant eligible employees the right to purchase our common stock through payroll deductions at a price equal to the lesser of eighty five percent (85%) of the fair market value of a share of common stock on the exercise date of the current offering period or eighty five percent (85%) of the fair market value of our common stock on the grant date of the then current offering period. The first offering period began on November 14, 2017. Thereafter, there will be consecutive six-month offering periods until January 2, 2022, or until the Plan is terminated by the Board, if earlier. | ||||||
Stock-based compensation expense | $ 11,000 | $ 20,000 | |||||
2017 Employee Stock Purchase Plan [Member] | One Employee | |||||||
Number of common stock issued | 1,200 | ||||||
Share price (in dollars per share) | $ 7.50 | ||||||
Value of common stock issued | $ 9,000 | ||||||
2017 Employee Stock Purchase Plan [Member] | Six directors | |||||||
Number of common stock issued | 9,245 | ||||||
Share price (in dollars per share) | $ 8.13 | $ 8.13 | |||||
Value of common stock issued | $ 75,000 | ||||||
2017 Employee Stock Purchase Plan [Member] | Six directors one | |||||||
Number of common stock issued | 11,766 | ||||||
Share price (in dollars per share) | $ 6.38 | $ 6.38 | |||||
Value of common stock issued | $ 75,000 |
Segments (Details)
Segments (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Sales, net | $ 3,467,380 | $ 2,918,097 | $ 6,468,390 | $ 5,208,418 |
Cost of goods sold | 3,072,941 | 2,441,243 | 5,522,041 | 4,591,829 |
Gross profit | 394,439 | 476,854 | 946,349 | 616,589 |
Total operating expenses | 1,325,747 | 1,154,498 | 2,968,928 | 2,206,169 |
Loss from operations | (931,308) | (677,644) | (2,022,579) | (1,589,580) |
Total other expenses | (222,226) | (223,385) | (331,276) | (419,603) |
Loss before provision for income taxes | (1,153,534) | $ (901,029) | (2,353,855) | $ (2,009,183) |
Consumer [Member] | ||||
Sales, net | 1,407,876 | 3,147,460 | ||
Cost of goods sold | 1,496,481 | 3,065,668 | ||
Gross profit | (88,605) | 81,792 | ||
Total operating expenses | 554,170 | 1,267,706 | ||
Loss from operations | (642,775) | (1,185,914) | ||
Total other expenses | (4,983) | (10,411) | ||
Loss before provision for income taxes | (647,758) | (1,196,325) | ||
Industrial [Member] | ||||
Sales, net | 2,277,694 | 3,886,019 | ||
Cost of goods sold | 1,794,650 | 3,021,462 | ||
Gross profit | 483,044 | 864,557 | ||
Total operating expenses | 378,266 | 770,700 | ||
Loss from operations | 104,778 | 93,857 | ||
Total other expenses | 40,168 | (4,431) | ||
Loss before provision for income taxes | 144,946 | 89,426 | ||
Inter Segments Eliminations [Member] | ||||
Sales, net | (218,190) | (565,089) | ||
Cost of goods sold | (218,190) | (565,089) | ||
Gross profit | ||||
Total operating expenses | ||||
Loss from operations | ||||
Total other expenses | ||||
Loss before provision for income taxes | ||||
Corporate [Member] | ||||
Sales, net | ||||
Cost of goods sold | ||||
Gross profit | ||||
Total operating expenses | 393,311 | 930,522 | ||
Loss from operations | (393,311) | (930,522) | ||
Total other expenses | (257,411) | (316,434) | ||
Loss before provision for income taxes | $ (650,722) | $ (1,246,956) |
Notes Payable (Details)
Notes Payable (Details) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Total notes payable | $ 4,956,384 | $ 3,251,165 |
Less current portion | (2,057,802) | (297,534) |
Long-term portion of notes payable | 2,898,582 | 2,953,631 |
2018 10% Related Party Unsecured Notes [Member] | ||
Total notes payable | 1,866,106 | |
2017 Secured Note [Member] | ||
Total notes payable | 93,324 | 104,990 |
2018 and 2017 Unsecured Note [Member] | ||
Total notes payable | 80,593 | 188,060 |
2016 Secured Notes [Member] | ||
Total notes payable | 266,361 | 308,115 |
2016 WEBA Seller Notes [Member] | ||
Total notes payable | $ 2,650,000 | $ 2,650,000 |
Notes Payable (Details 1)
Notes Payable (Details 1) - Warrant [Member] | 6 Months Ended |
Jun. 30, 2018 | |
Expected term | 3 years |
Volatility | 143.81% |
Risk Free Rate | 2.39% |
Notes Payable (Details 2)
Notes Payable (Details 2) | 6 Months Ended |
Jun. 30, 2018USD ($) | |
Proceeds allocated at issuance date | $ 2,100,000 |
Warrant [Member] | |
Proceeds allocated at issuance date | 279,054 |
Notes [Member] | |
Proceeds allocated at issuance date | $ 1,820,946 |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) - USD ($) | May 04, 2018 | May 01, 2018 | Apr. 10, 2018 | Jan. 31, 2018 | Jun. 30, 2018 | Jun. 30, 2017 | Mar. 29, 2018 | Mar. 29, 2017 |
Amortization expense | $ 66,404 | $ 174,416 | ||||||
Trapp Note [Member] | Private Placement [Member] | ||||||||
Principal Amount | $ 50,000 | |||||||
Number common stock purchased | 2,000 | |||||||
Maturity date | May 9, 2019 | |||||||
Rhodes Note [Member] | Private Placement [Member] | ||||||||
Principal Amount | $ 50,000 | |||||||
Number common stock purchased | 2,000 | |||||||
Maturity date | Jun. 1, 2019 | |||||||
Wynnefield Capital | Private Placement [Member] | ||||||||
Principal Amount | $ 1,000,000 | |||||||
Number common stock purchased | 40,000 | |||||||
Maturity date | May 6, 2019 | |||||||
2018 10% Related Party Unsecured Notes [Member] | Subscription Agreement | Wynnefield Capital | ||||||||
Principal Amount | $ 1,000,000 | |||||||
Number common stock purchased | 40,000 | |||||||
Interest rate | 10.00% | |||||||
Maturity date | May 4, 2019 | |||||||
Debt discount | $ 300,298 | |||||||
2018 and 2017 Unsecured Note [Member] | ||||||||
Principal Amount | $ 242,866 | |||||||
Interest rate | 5.40% | |||||||
Debt terms | 10 months |
Related Party Transactions (Det
Related Party Transactions (Details) - Vice President of U.S. Operations [Member] - USD ($) | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Due from Related Parties, Current [Roll Forward] | ||
Beginning Balance | $ 5,123 | |
Monies owed to related party for services performed | 42,889 | 61,818 |
Monies paid, net | (32,605) | (66,941) |
Ending Balance | $ 10,284 |
Related Party Transactions (D43
Related Party Transactions (Details Narrative) - USD ($) | May 01, 2018 | Apr. 10, 2018 | May 04, 2018 | Mar. 29, 2018 |
Trapp Note [Member] | Private Placement [Member] | ||||
Principal balance | $ 50,000 | |||
Number of common stock purchase | 2,000 | |||
Rhodes Note [Member] | Private Placement [Member] | ||||
Principal balance | $ 50,000 | |||
Number of common stock purchase | 2,000 | |||
GlyEco Acquisition Corp. #1 [Member] | 2018 10% Related Party Unsecured Notes [Member] | ||||
Principal balance | $ 2,000,000 | $ 2,000,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | Dec. 27, 2017 | Dec. 31, 2017 | Jun. 30, 2018 |
Tank remediation | $ 780,000 | ||
PSP Falcon | |||
Construction expenses | $ 530,633 | ||
Minimum [Member] | |||
Environmental remediation liabilities | $ 1,000,000 | ||
Maximum [Member] | |||
Environmental remediation liabilities | $ 2,000,000 |