| 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. |
