Document_and_Entity_Informatio
Document and Entity Information | 6 Months Ended | |
Jun. 30, 2014 | Aug. 01, 2014 | |
Document and Entity Information [Abstract] | ' | ' |
Entity Registrant Name | 'ENVIRONMENTAL SOLUTIONS WORLDWIDE INC | ' |
Entity Central Index Key | '0001082278 | ' |
Trading Symbol | 'esww | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Common Stock, Shares Outstanding | ' | 131,526 |
Document Type | '10-Q | ' |
Document Period End Date | 30-Jun-14 | ' |
Amendment Flag | 'false | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q2 | ' |
CONSOLIDATED_CONDENSED_BALANCE
CONSOLIDATED CONDENSED BALANCE SHEETS (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Current Assets | ' | ' |
Cash and cash equivalents (Note 4) | $6,565,778 | $4,077,096 |
Accounts receivable, net of allowance for doubtful accounts of $283,682 (2013 - $250,862) (Note 2) | 3,097,024 | 1,888,511 |
Inventory, net of reserve of $221,357 (2013 - $246,509) (Note 5) | 3,844,110 | 3,693,367 |
Prepaid expenses and other assets (Note 13) | 657,162 | 750,835 |
Total current assets | 14,164,074 | 10,409,809 |
Equipment under construction (Note 6) | 314,847 | 431,022 |
Property, plant and equipment, net of accumulated depreciation of $3,502,723 (2013 - $3,294,168) (Note 6) | 1,838,184 | 1,574,181 |
Assets, Total | 16,317,105 | 12,415,012 |
Current Liabilities | ' | ' |
Accounts payable (Notes 12 and 16) | 1,337,081 | 1,656,379 |
Accrued liabilities (Notes 8 and 12) | 927,252 | 1,007,920 |
Warranty provision (Note 13) | 1,841,263 | 1,723,769 |
Customer deposits | 206,924 | 124,645 |
Current portion of loan payable (Note 7) | 70,666 | 71,022 |
Total current liabilities | 4,383,186 | 4,583,735 |
Long-term Liabilities | ' | ' |
Senior secured convertible promissory notes payable (Note 8) | 2,412,193 | 2,146,780 |
Conversion option derivative liability (Note 9) | 2,921,551 | 1,131,745 |
Loan payable (Note 7) | 298,296 | 333,185 |
Total long-term liabilities | 5,632,040 | 3,611,710 |
Total liabilities | 10,015,226 | 8,195,445 |
Commitments and Contingencies (Note 13) | ' | ' |
Stockholders' Equity (Note 11) | ' | ' |
Common stock, $0.001 par value, 250,000,000 shares authorized; 131,526 (2013 - 125,742) shares issued and outstanding | 131 | 125 |
Additional paid-in capital | 57,815,327 | 57,541,924 |
Shares to be issued (Note 11) | 57,163 | ' |
Accumulated other comprehensive income | 344,183 | 344,183 |
Accumulated deficit | -51,914,925 | -53,666,665 |
Total stockholders' equity | 6,301,879 | 4,219,567 |
Total Liabilities and Stockholders' Equity | $16,317,105 | $12,415,012 |
CONSOLIDATED_CONDENSED_BALANCE1
CONSOLIDATED CONDENSED BALANCE SHEETS (Parentheticals) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Statement Of Financial Position [Abstract] | ' | ' |
Allowance for doubtful accounts receivable (in dollars) | $283,682 | $250,862 |
Reserve for inventory (in dollars) | 221,357 | 246,509 |
Accumulated depreciation of property, plant and equipment (in dollars) | $3,502,723 | $3,294,168 |
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized (in shares) | 250,000,000 | 250,000,000 |
Common stock, shares issued (in shares) | 131,526 | 125,742 |
Common stock, shares outstanding (in shares) | 131,526 | 125,742 |
CONSOLIDATED_CONDENSED_STATEME
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME / (LOSS) (Unaudited) (USD $) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Income Statement [Abstract] | ' | ' | ' | ' |
Revenue (Notes 2 and 16) | $8,039,961 | $3,289,503 | $15,035,545 | $4,745,345 |
Cost of revenue (Notes 2, 5, 6 and 13) | 4,194,834 | 3,864,780 | 7,629,988 | 4,953,625 |
Gross profit | 3,845,127 | -575,277 | 7,405,557 | -208,280 |
Operating expenses | ' | ' | ' | ' |
Marketing, office and general expenses (Note 7) | 1,168,986 | 1,370,131 | 2,335,082 | 2,137,526 |
Officers' compensation and directors' fees (Notes 11 and 12) | 208,249 | 130,494 | 430,072 | 435,707 |
Research and development costs (Notes 2 and 6) | 176,329 | 158,871 | 353,066 | 240,611 |
Consulting and professional fees (Note 12) | 59,356 | 212,382 | 207,779 | 279,499 |
Depreciation (Note 6) | 2,362 | 57,458 | 28,981 | 112,578 |
Foreign exchange (gain) / loss | 4,489 | 3,068 | -4,812 | 11,180 |
Total operating expenses | 1,619,771 | 1,932,404 | 3,350,168 | 3,217,101 |
Income / (loss) from operations | 2,225,356 | -2,507,681 | 4,055,389 | -3,425,381 |
Interest on convertible promissory notes payable (Notes 8 and 12) | -130,203 | -68,811 | -258,725 | -72,311 |
Accretion of discount on convertible promissory notes payable (Note 8) | -104,792 | -44,381 | -199,566 | -46,437 |
Change in fair value of conversion option derivative liability (Note 9) | -547,653 | -1,330,893 | -1,733,168 | -1,038,323 |
Net income / (loss) before provision for income taxes | 1,442,708 | -3,951,766 | 1,863,930 | -4,582,452 |
Income taxes (Note 10) | 112,190 | 0 | 112,190 | 0 |
Net income / (loss) and comprehensive income / (loss) | $1,330,518 | ($3,951,766) | $1,751,740 | ($4,582,452) |
Net earnings / (loss) per share (Note 15) | ' | ' | ' | ' |
Basic (in dollars per share) | $10.17 | ($34.71) | $13.65 | ($40.44) |
Fully diluted (in dollars per share) | $9.60 | ($34.71) | $12.88 | ($40.44) |
Weighted average number of shares outstanding (Note 15) | ' | ' | ' | ' |
Basic (in shares) | 130,875 | 113,845 | 128,323 | 113,304 |
Fully diluted (in shares) | 138,573 | 113,845 | 136,021 | 113,304 |
CONSOLIDATED_CONDENSED_STATEME1
CONSOLIDATED CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited) (USD $) | Common Stock | Additional Paid-In Capital | Shares To Be Issued | Accumulated Other Comprehensive Income | Accumulated Deficit | Total |
Balance at Dec. 31, 2013 | $125 | $57,541,924 | ' | $344,183 | ($53,666,665) | $4,219,567 |
Balance (in shares) at Dec. 31, 2013 | 125,742 | ' | ' | ' | ' | 125,742 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' | ' |
Net income | ' | ' | ' | ' | 1,751,740 | 1,751,740 |
Stock-based compensation (Note 11) | 1 | 17,108 | 57,163 | ' | ' | 74,272 |
Stock-based compensation (Note 11) (shares) | 658 | ' | ' | ' | ' | ' |
Shares issued in settlement of interest(Notes 8 and 12) | 5 | 256,295 | ' | ' | ' | 256,300 |
Shares issued in settlement of interest(Notes 8 and 12) (in shares) | 5,126 | ' | ' | ' | ' | ' |
Balance at Jun. 30, 2014 | $131 | $57,815,327 | $57,163 | $344,183 | ($51,914,925) | $6,301,879 |
Balance (in shares) at Jun. 30, 2014 | 131,526 | ' | ' | ' | ' | 131,526 |
CONSOLIDATED_CONDENSED_STATEME2
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) (USD $) | 6 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Statement Of Cash Flows [Abstract] | ' | ' |
Net income / (loss) and comprehensive income / (loss) | $1,751,740 | ($4,582,452) |
Adjustments to reconcile net income / (loss) to net cash used in operating activities: | ' | ' |
Depreciation (Note 6) | 208,556 | 339,019 |
Interest on promissory notes payable | 258,725 | 72,311 |
Amortization of discount on promissory notes payable | 199,566 | 46,437 |
Change in fair value of conversion option derivative liability | 1,733,168 | 1,038,323 |
Stock-based compensation | 74,272 | 172,953 |
Allowance for doubtful accounts | 32,820 | ' |
Warranty provision | 117,494 | 1,504,900 |
Loss on write down of inventory | ' | 230,002 |
Recovery on disposal of inventory | -14,769 | ' |
Gain on sale of property, plant and equipment | -19,000 | ' |
Total adjustments to reconcile net loss to net cash used in operating activities | 2,590,832 | 3,403,945 |
Decrease in cash flows from operating activities resulting from changes in: | ' | ' |
Accounts receivable | -1,241,333 | 276,626 |
Inventory | -135,974 | -1,241,289 |
Prepaid expenses and other assets | 93,673 | -252,511 |
Accounts payable and accrued liabilities | -402,392 | 133,014 |
Customer deposits | 82,279 | 17,732 |
Operating capital, Total | -1,603,747 | -1,066,428 |
Net cash generated from / (used in) operating activities | 2,738,825 | -2,244,935 |
Investing activities: | ' | ' |
Proceeds from sale of property, plant and equipment | 19,000 | ' |
Acquisition of patent and trademarks | ' | -42,000 |
Acquisition of property, plant and equipment | -300,405 | -275,688 |
Additions to property, plant and equipment under construction | -55,979 | -55,118 |
Net cash used in investing activities | -337,384 | -372,806 |
Financing activities: | ' | ' |
Proceeds from notes payable | 122,486 | 5,000,000 |
Payment for fractional shares | ' | -51,516 |
Repayment of loan payable | -35,245 | -34,204 |
Net cash provided by financing activities | 87,241 | 4,914,280 |
Net change in cash and equivalents | 2,488,682 | 2,296,539 |
Cash and cash equivalents, beginning of period | 4,077,096 | 253,998 |
Cash and cash equivalents, end of period | 6,565,778 | 2,550,537 |
Supplemental disclosures: | ' | ' |
Cash interest paid | 5,843 | 6,884 |
Property, plant and equipment included in accounts payable | ' | 80,234 |
Interest paid in common stock | 256,300 | ' |
Transfer from equipment under construction to property, plant and equipment | $415,732 | ' |
NATURE_OF_BUSINESS
NATURE OF BUSINESS | 6 Months Ended |
Jun. 30, 2014 | |
Nature Of Business and Going Concern [Abstract] | ' |
NATURE OF BUSINESS | ' |
NOTE 1 - NATURE OF BUSINESS | |
Environmental Solutions Worldwide, Inc. (the “Company” or “ESW”) through its wholly-owned subsidiaries is engaged in the design, development, manufacturing and sales of emissions control technologies. ESW also provides emissions testing and environmental certification services with its primary focus on the North American on-road and off-road diesel and natural gas engines, chassis and after-treatment market. ESW currently manufactures and markets a line of emission control technologies for a number of applications focused on the medium and heavy duty diesel (“MHDD”) retrofit market. | |
The consolidated condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which contemplates continuation of the Company as a going concern. | |
As of June 30, 2014, the Company had an accumulated deficit of $51,914,925 and had cash and cash equivalents of $6,565,778. Based on cash and cash equivalents, anticipated revenues and spending levels, the Company estimates that it has sufficient cash resources to meet its anticipated net cash needs through the next twelve months. | |
All adjustments, consisting only of normal recurring items, considered necessary for fair presentation have been included in these unaudited consolidated condensed financial statements. These unaudited consolidated condensed financial statements have been prepared on the same basis as the annual financial statements and should be read in conjunction with those annual financial statements filed on Form 10-K for the year ended December 31, 2013. | |
SIGNIFICANT_ACCOUNTING_POLICIE
SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2014 | |
Accounting Policies [Abstract] | ' |
SIGNIFICANT ACCOUNTING POLICIES | ' |
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES | |
BASIS OF CONSOLIDATION | |
The consolidated condensed financial statements include the accounts of the Company and its wholly-owned subsidiaries, ESW America Inc. (“ESWA”), ESW Technologies Inc. (“ESWT”), ESW Canada Inc. (“ESWC”), ESW CleanTech Inc. (“ESWCT”) and Technology Fabricators Inc. (“TFI”). All inter-company transactions and balances have been eliminated on consolidation. Amounts in the consolidated condensed financial statements are expressed in U.S. dollars. | |
ESTIMATES | |
The preparation of consolidated condensed financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated condensed financial statements and the reported amounts of revenue and expense during the reporting period. Actual results could differ from those estimates. Significant estimates include amounts for inventory valuation, impairment of and useful lives of property plant and equipment, the valuation of the stock-based compensation and conversion option derivative liability, and warranty provisions. | |
ALLOWANCE FOR DOUBTFUL ACCOUNTS | |
The Company extends unsecured credit to its customers in the ordinary course of business but mitigates the associated credit risk by performing credit checks and actively pursuing past due accounts. An allowance for doubtful accounts is estimated and recorded based on management’s assessment of the credit history with the customer and the current relationships with them. On this basis management has determined that an allowance for doubtful accounts of $283,682 and $250,862 was appropriate as of June 30, 2014 and December 31, 2013, respectively. | |
INVENTORY | |
Inventory is stated at the lower of cost or market determined using the first-in, first-out method. Inventory is periodically reviewed for use and obsolescence, and adjusted as necessary. Inventory consists of raw materials, work-in-process, finished goods and parts. | |
PROPERTY, PLANT AND EQUIPMENT UNDER CONSTRUCTION | |
The Company capitalizes customized equipment built to be used in the future day to day operations at cost. Once complete and available for use, the cost for accounting purposes is transferred to property, plant and equipment, where normal depreciation rates apply. | |
PROPERTY, PLANT AND EQUIPMENT | |
Property, plant and equipment are recorded at cost. Depreciation is computed on a straight-line basis over the estimated useful lives of the assets, generally 5 to 7 years. Maintenance and repairs are charged to operations as incurred. Significant renewals and betterments are capitalized. | |
REVENUE RECOGNITION | |
The Company derives revenue primarily from the sale of its diesel emission control products. In accordance with Staff Accounting Bulletin No. 104, revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred, the amount is fixed or determinable and collection is reasonably assured. | |
The Company also derives revenue (approximately 2.3% and 8.5% of total revenue for the six month periods ended June 30, 2014 and 2013, respectively) from providing air testing and environmental certification services. Revenues are recognized upon delivery of testing services when persuasive evidence of an arrangement exists and collection of the related receivable is reasonably assured. | |
EARNINGS/LOSS PER SHARE OF COMMON STOCK | |
Basic and diluted earnings per share have been determined by dividing the consolidated net earnings available to shareholders for the applicable period by the basic and diluted weighted average number of shares outstanding, respectively. The diluted weighted average number of shares outstanding is calculated as if all dilutive options and restricted stock grants had been exercised or vested at the later of the beginning of the reporting period or date of grant, using the treasury stock method. The dilutive effect of convertible notes has been reflected in diluted weighted average number of shares using the if-converted method. | |
Loss per share of common stock is computed by dividing the net loss by the weighted average number of shares of common stock outstanding during the period. Common stock equivalents are excluded from the computation of diluted loss per share when their effect is anti-dilutive. | |
INCOME TAXES | |
Income taxes are computed in accordance with the provisions of ASC Topic 740, which requires, among other things, a liability approach to calculating deferred income taxes. The Company recognizes deferred tax liabilities and assets for the expected future tax consequences of events that have been recognized in its financial statements or tax returns. Under this method, deferred tax liabilities and assets are determined based on the difference between the financial statement carrying amounts and tax bases of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse. The Company is required to make certain estimates and judgments about the application of tax law, the expected resolution of uncertain tax positions and other matters. In the event that uncertain tax positions are resolved for amounts different than the Company’s estimates, or the related statutes of limitations expire without the assessment of additional income taxes, the Company will be required to adjust the amounts of the related assets and liabilities in the period in which such events occur. Such adjustments may have a material impact on ESW’s income tax provision and results of operations. | |
SHIPPING AND HANDLING COSTS | |
The Company’s shipping and handling costs of $260,894 and $48,277 are included in cost of revenues for the six month periods ended June 30, 2014 and 2013, respectively. For the three month periods ended June 30, 2014 and 2013 shipping and handling costs amounted to $124,777 and $27,417, respectively. | |
Additionally, the Company has recorded recoveries of these costs amounting to $49,620 and $40,377, which are included in cost of revenues for the six month period ended June 30, 2014 and in revenue for the six month period ended June 30, 2013, respectively. | |
For the three month period ended June 30, 2014 shipping and handling recoveries amounted to $7,755 which is included in cost of revenues. For the three month period ended June 30, 2013 shipping and handling recoveries included in revenue amounted to $25,944. | |
RESEARCH AND DEVELOPMENT | |
The Company is engaged in research and development work. Research and development costs are charged as an operating expense as incurred. Any grant money received for research and development work is used to offset these expenditures. | |
For the six month periods ended June 30, 2014 and 2013, the Company expensed $353,066 and $240,611, net of grant revenues, respectively, towards research and development costs. For the three month periods ended June 30, 2014 and 2013, the Company expensed $176,329 and $158,871, net of grant revenues, respectively, towards research and development costs. | |
For the six month periods ended June 30, 2014 and 2013, gross research and development expense, excluding any offsetting grant revenues, amounted to $353,066 and $281,557, respectively, and grant revenues amounted to $0 and $40,946, respectively. For the three month periods ended June 30, 2014 and 2013, gross research and development expense, excluding any offsetting grant revenues, amounted to $176,329 and $158,871, respectively, and grant money amounted to $0 and $0, respectively. | |
FOREIGN CURRENCY TRANSLATION | |
The functional currency of the Company and its foreign subsidiaries is the U.S. dollar. All of the Company’s revenue and materials purchased from suppliers are denominated in, or linked to, the U.S. dollar. Transactions denominated in currencies other than the functional currency are converted to the functional currency on the transaction date, and any resulting assets or liabilities are further translated at each reporting date and at settlement. Gains and losses recognized upon such translations are included within foreign exchange (gain) / loss in the consolidated condensed statements of operations and comprehensive income / (loss). | |
PRODUCT WARRANTIES | |
The Company provides for estimated warranty costs at the time of sale and accrues for specific items at the time their existence is known and the amounts are determinable. The Company estimates warranty costs using standard quantitative measures based on industry warranty claim experience and evaluation of specific customer warranty issues. The Company currently estimates warranty costs as 2% of revenue for on-road products and, effective July 1, 2013, the Company revised its warranty accrual for off-road products to 4% of revenue from the prior warranty accrual estimate of 2% of revenue. | |
SEGMENT REPORTING | |
ASC 280-10, “Disclosures about Segments of an Enterprise and Related Information”, establishes standards for the way that public business enterprises report information about operating segments in the Company’s consolidated condensed financial statements. Operating segments are components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. ESW operates in two reportable segments; medium and heavy duty diesel retrofit operations and air testing services (see Note 14). ESW’s chief operating decision maker is the Company’s Executive Chairman. |
RECENTLY_ISSUED_ACCOUNTING_STA
RECENTLY ISSUED ACCOUNTING STANDARDS AND RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS | 6 Months Ended |
Jun. 30, 2014 | |
New Accounting Pronouncements and Changes In Accounting Principles [Abstract] | ' |
RECENTLY ISSUED ACCOUNTING STANDARDS AND RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS | ' |
NOTE 3 – RECENTLY ISSUED ACCOUNTING STANDARDS AND RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS | |
“Income Taxes (ASC Topic - 740): Presentation of an Unrecognized Tax Benefit when a Net Operating Loss Carry-forward, a Similar Tax Loss, or a Tax Credit Carry-forward Exists” (“ASU 2013-11”) was issued during July 2013. FASB issued guidance on how to present an unrecognized tax benefit. The guidance is effective for annual periods beginning after December 15, 2013. The adoption of the accounting pronouncement does not have a material effect on the accompanying consolidated condensed financial statements. | |
In April 2014, the FASB issued ASC No. 2014-08 (Topic 205 and Topic 360), Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. This ASC update modifies the definition of discontinued operations by limiting discontinued operations reporting to disposals of components of an entity that represent strategic shifts that have (or will have) a major effect on an entity's operations and financial results. This update also requires additional financial statement disclosures about discontinued operations, as well as disposal of an individually significant component of an entity that does not qualify for discontinued operations presentation. The updated guidance is effective prospectively for years beginning on or after December 15, 2014. The Company expects that the adoption of the accounting pronouncement will not materially affect its financial position or results of operations. | |
In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, a new standard on revenue recognition. The new standard will supersede existing revenue recognition guidance and apply to all entities that enter into contracts to provide goods or services to customers. The guidance also addresses the measurement and recognition of gains and losses on the sale of certain non-financial assets, such as real estate, property and equipment. The new standard will become effective for us beginning with the first quarter of 2017 and can be adopted either retrospectively to each reporting period presented or as a cumulative effect adjustment as of the date of adoption. We are currently evaluating the impact of adopting this new guidance on our consolidated financial statements. |
CASH_AND_CASH_EQUIVALENTS
CASH AND CASH EQUIVALENTS | 6 Months Ended |
Jun. 30, 2014 | |
Cash and Cash Equivalents [Abstract] | ' |
CASH AND CASH EQUIVALENTS | ' |
NOTE 4 - CASH AND CASH EQUIVALENTS | |
Cash and cash equivalents include cash and highly liquid investments purchased with original maturities of generally 90 days or less at the date of purchase. At June 30, 2014 and December 31, 2013, all of the Company’s cash and cash equivalents consisted of cash. | |
INVENTORY
INVENTORY | 6 Months Ended | ||||
Jun. 30, 2014 | |||||
Inventory Disclosure [Abstract] | ' | ||||
INVENTORY | ' | ||||
NOTE 5 – INVENTORY | |||||
Inventory consists of: | |||||
Inventory | 30-Jun-14 | 31-Dec-13 | |||
Raw materials | $ | 2,210,841 | $ | 1,964,412 | |
Work-in-process | 1,854,626 | 1,950,642 | |||
Finished goods | - | 6,868 | |||
Parts | - | 17,954 | |||
4,065,467 | 3,939,876 | ||||
Less: reserve for inventory obsolescence | -221,357 | -246,509 | |||
Total | $ | 3,844,110 | $ | 3,693,367 | |
During the six month period ended June 30, 2014, ESW recorded a write down on inventory against reserve of $25,152. In addition, there was recovery from sale of scrap inventory of $14,769. During the three month period ended June 30, 2014, ESW recorded a write down on inventory against reserve of $0, and there was recovery from sale of scrap inventory of $11,719. | |||||
During the year ended December 31, 2013, ESW recorded a $230,002 write down on inventory which was subsequently sold as scrap for $252,352 resulting in a net gain on disposal of scrap inventory of $22,350 included in the cost of revenue. | |||||
PROPERTY_PLANT_AND_EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 6 Months Ended | ||||
Jun. 30, 2014 | |||||
Property, Plant and Equipment [Abstract] | ' | ||||
PROPERTY, PLANT AND EQUIPMENT | ' | ||||
NOTE 6 - PROPERTY, PLANT AND EQUIPMENT | |||||
Property, plant and equipment consist of the following: | |||||
Classification | 30-Jun-14 | 31-Dec-13 | |||
Plant, machinery and equipment | $ | 4,016,643 | $ | 3,583,451 | |
Office equipment | 81,295 | 186,916 | |||
Furniture and fixtures | 128,326 | 1,063 | |||
Vehicles | 34,762 | 17,038 | |||
Leasehold improvements | 1,079,881 | 1,079,881 | |||
5,340,907 | 4,868,349 | ||||
Less: accumulated depreciation | -3,502,723 | -3,294,168 | |||
$ | 1,838,184 | $ | 1,574,181 | ||
Depreciation expense recognized in the consolidated condensed statements of operations and comprehensive income / (loss) was included in the following captions: | |||||
For the six month periods ended | |||||
Depreciation Expense | 30-Jun-14 | 30-Jun-13 | |||
Depreciation expense included in cost of revenue | $ | 179,575 | $ | 223,400 | |
Depreciation expense included in operating expenses | 28,981 | 112,578 | |||
Depreciation expense included in research and development costs | - | 3,041 | |||
Total depreciation expense | $ | 208,556 | $ | 339,019 | |
For the three month periods ended | |||||
June 30, | June 30, | ||||
Depreciation Expense | 2014 | 2013 | |||
Depreciation expense included in cost of revenue | $ | 88,578 | $ | 110,961 | |
Depreciation expense included in operating expenses | 2,362 | 57,458 | |||
Depreciation expense included in research and development costs | - | - | |||
Total depreciation expense | $ | 90,940 | $ | 168,419 | |
At June 30, 2014 and December 31, 2013, the Company had $314,847 and $431,022, respectively, of customized equipment under construction. | |||||
Certain property and equipment of the Company and its subsidiaries is used as collateral for borrowings under the Machinery and Equipment Loan Fund (“MELF”) facility (Note 7). All other property and equipment of the Company and its subsidiaries is used as collateral for borrowing under the senior secured convertible promissory notes payable (Note 8). |
LOAN_PAYABLE
LOAN PAYABLE | 6 Months Ended | ||
Jun. 30, 2014 | |||
Debt Disclosure [Abstract] | ' | ||
LOAN PAYABLE | ' | ||
NOTE 7 - LOAN PAYABLE | |||
On April 25, 2012, the Company’s wholly-owned subsidiary ESWA entered into the MELF Facility with the Commonwealth of Pennsylvania for up to $500,000 for the purchase of equipment and related purchases. Two (2) draw-downs were permitted under the MELF Facility by ESWA. The first draw-down of $280,787 was made under the MELF Facility in connection with equipment purchased by ESWA on April 25, 2012 (the “Closing Date”). ESWA made one (1) additional draw-down of $219,213 on November 13, 2012 per the terms of the MELF Facility so that the aggregate amount borrowed under the MELF Facility amounts to $500,000. Terms of the MELF Facility include initial interest at three (3%) percent per annum with monthly payments and full repayment of the MELF Facility on or before the first day of the eighty fifth (85) calendar month following the Closing Date. As part of the loan agreement, within three years from the Closing Date ESWA is required to create, or retain, at its current location a certain number of jobs that is specified in the loan application. A breach by ESWA in the creation or maintenance of these jobs shall be considered an event of default under the MELF Facility. In the event ESWA defaults on any payments, the MELF Facility may be accelerated with full payment due along with certain additional modifications including the increase in interest to twelve and one half (12 1/2%) percent. The loan is secured by certain property and equipment and a corporate guarantee of the Company. | |||
As of June 30, 2014 and December 31, 2013, the loan payable (current and long-term) amounted to $368,962 and $404,207, respectively. | |||
For the six month periods ended June 30, 2014 and 2013, the Company paid interest amounting to $5,843 and $6,884 on the principal amount outstanding under the MELF Facility and also repaid principal in the amount of $35,245 and $34,204, respectively. Interest expense is included under Marketing, office and general expenses in the consolidated condensed statements of operations and comprehensive income / (loss). | |||
For the three month periods ended June 30, 2014 and 2013, the Company paid interest amounting to $2,855 and $3,378 on the loan and also repaid principal in the amount of $17,689 and $17,116, respectively. Interest expense is included under Marketing, office and general expenses in the consolidated condensed statements of operations and comprehensive income / (loss). | |||
As at June 30, 2014 $70,666 (December 31, 2013 - $71,022) of the loan is repayable in the next 12 months with the remaining $298,296 (December 31, 2013 - $333,185) repayable thereafter. | |||
Principal on the loan is repayable as follows: | |||
Year Ending December 31, | Amount | ||
2014 (excluding the six months ended June 30, 2014) | $ | 35,777 | |
2015 | 73,182 | ||
2016 | 75,408 | ||
2017 | 77,702 | ||
2018 | 80,065 | ||
Thereafter | 26,828 | ||
Total | $ | 368,962 |
SENIOR_SECURED_CONVERTIBLE_PRO
SENIOR SECURED CONVERTIBLE PROMISSORY NOTES | 6 Months Ended | ||
Jun. 30, 2014 | |||
Senior Notes [Abstract] | ' | ||
SENIOR SECURED CONVERTIBLE PROMISSORY NOTES | ' | ||
NOTE 8 – SENIOR SECURED CONVERTIBLE PROMISSORY NOTES | |||
On March 22, 2013, the Company entered into a note subscription agreement and a security agreement (the “Agreements”) and issued senior secured convertible promissory notes (the “March 2013 Notes”) to four accredited investors who are currently shareholders (the “Holders”) and may be deemed affiliates of the Company (Note 12). Pursuant to the Agreements and the March 2013 Notes, the Holders made initial loans of $1,400,000 to the Company. | |||
On April 23, 2013 and June 27, 2013, the Company issued additional Notes in the principal amount of $1,600,000 and $2,000,000, respectively, to the Holders pursuant to the Agreements (together with the March 2013 Notes, the “Existing Notes”). The Existing Notes mature on March 22, 2018. The Existing Notes are a part of a senior secured convertible loan facility of up to $5,000,000 which is now fully drawn down. | |||
The Existing Notes bear interest at a rate of 10% per annum compounded quarterly. Interest is payable semi-annually in arrears in cash and at the Company’s election, during the term of the Existing Notes, up to two accrued and unpaid semi-annual interest payments can be payable in the Company’s common stock valued at the lesser of $80 per share, subject to adjustment (“Conversion Price”), or the market value of the Company’s common stock, with interest payments commencing September 30, 2013. | |||
At the option of the Holders, all principal, and interest amounts outstanding under all of the Notes (as defined below) may be exchanged for shares of the Company’s common stock at the Conversion Price. The Conversion Price is subject to an anti-dilution adjustment in the event the Company at any time, while the Notes are outstanding, issues equity securities including common stock or any security convertible or exchangeable for shares of common stock for no consideration or for consideration less than $80 per share. The anti-dilution protection excludes shares of common stock issuable upon the exercise of options or other securities granted to directors, officers, bona fide consultants and employees of the Company issued pursuant to a Board approved option or incentive plan or stock, warrants or other securities issued to a bank or other financial institution. | |||
The Notes are secured by a lien on and a security interest in all assets of the following wholly-owned subsidiaries of the Company: TFI, ESWCT, ESWA and ESWT, excluding certain collateral subject to pre-existing liens. | |||
Effective October 1, 2013 the Company elected to pay and paid interest on the Existing Notes in the form of common stock, as per the terms of the Existing Notes. The Company issued 8,000 shares as interest payment to four note holders for interest accrued up to September 30, 2013 totaling $200,000. The conversion price of the shares was $25 for the interest payment, which was based upon the market value of the Company’s common stock on the date of payment (determined by calculating the average closing price of the Company’s common stock for the twenty trading days preceding such date). The Company further agreed to conduct a rights offering to all of its holders of common stock, offering the right to purchase up to their pro-rata Company ownership amount of senior secured convertible promissory notes substantially similar to the Existing Notes. | |||
On February 12, 2014, the Securities and Exchange Commission declared effective a Form S-1 Registration Statement under the Securities Act Of 1933 originally filed by the Company on December 23, 2013 (“Registration Statement”). The Registration Statement relates to the subscription rights offering to existing Company shareholders that the Company agreed to conduct in connection with the 2013 issuance of senior secured convertible promissory notes to accredited investors. The Registration Statement registers an aggregate of $4,596,929 new 10% Senior Secured Convertible Promissory Notes due 2018 (the “New Notes” and, together with the Existing Notes, the “Notes”) as well as potential 152,899 shares of common stock issuable upon conversion of the Notes and, if applicable, as payment of interest on the Notes by the Company. In March, 2014, the Company filed a form 424B3 with the Securities And Exchange Commission (the “prospectus”) and commenced the rights offering by mailing the prospectus and related documents to the Company’s shareholders of record as of February 13, 2014. The rights offering was completed on May 9, 2014, and on May 23, 2014 the Company issued New Notes, in the principal amount of $122,486, to the shareholders that participated in the rights offering. The New Notes mature on March 22, 2018. | |||
Effective April 1, 2014, the Company elected to pay and paid interest on the Existing Notes in the form of common stock, as per the terms of the Notes. The Company issued 5,126 shares as interest payment to the holders of the Existing Notes for interest accrued up to March 31, 2014 totaling $256,300. The conversion price of the shares was $50 for the interest payment, which was based upon the market value of the Company’s common stock on the date of payment (determined by calculating the average closing price of the Company’s common stock for the twenty trading days preceding such date). Per the terms of the Notes, up to two interest payments could be paid in the Company’s common stock. The Company has used both options to pay interest in the form of the Company’s common stock, future interest payments on the Notes will be paid in cash. | |||
On March 22, 2013, April 23, 2013, June 27, 2013 and May 23, 2014, the Company recorded a discount on the Notes equal to the fair value of the conversion option derivative liability (Note 9). This discount is amortized using the effective interest rate method at an interest rate of 9.6%, 17.3% and 38.3% for the March 22, April 23 and June 27, 2013 Notes, respectively, over the term of the Notes. The May 23, 2014 Notes were discounted on recognition by $56,639 and the discount will be amortized using the effective interest rate method at a rate of 16.5% over the term of the Note. | |||
Period ended | |||
30-Jun-14 | |||
Face value of March 22, 2013 promissory notes payable | $ | 1,400,000 | |
Face value of April 23, 2013 promissory notes payable | 1,600,000 | ||
Face value of June 27, 2013 promissory notes payable | 2,000,000 | ||
Total face value of promissory notes payable | 5,000,000 | ||
Discount on promissory notes payable | -3,079,102 | ||
Accretion of discount on promissory notes payable | 225,882 | ||
Balance December 31, 2013 | $ | 2,146,780 | |
Accretion of discount on promissory notes payable | 94,774 | ||
Balance March 31, 2014 | $ | 2,241,554 | |
Face value of May 23, 2014 promissory notes payable | 122,486 | ||
Discount on the May 23, 2014 promissory notes payable | -56,639 | ||
Accretion of discount on promissory notes payable | 104,792 | ||
Balance June 30, 2014 | $ | 2,412,193 | |
During the six month periods ended June 30, 2014 and 2013, accretion of discount on the Notes amounted to $199,566 and $46,437, respectively. During the three month periods ended June 30, 2014 and 2013, accretion of discount on the Notes amounted to $104,792 and $44,381, respectively. | |||
During the six month periods ended June 30, 2014 and 2013, interest expense on the Notes amounted to $258,725 and $72,311, respectively. During the three month periods ended June 30, 2014 and 2013, interest expense on the Notes amounted to $130,203 and $68,811, respectively. | |||
For the periods ended June 30, 2014 and December 31, 2013, interest expense accrued on the Notes included in accrued liabilities on the consolidated condensed balance sheets amounted to $130,203 and $127,777, respectively. |
CONVERSION_OPTION_DERIVATIVE_L
CONVERSION OPTION DERIVATIVE LIABILITY | 6 Months Ended | ||||||
Jun. 30, 2014 | |||||||
Derivative Liability [Abstract] | ' | ||||||
CONVERSION OPTION DERIVATIVE LIABILITY | ' | ||||||
NOTE 9 – CONVERSION OPTION DERIVATIVE LIABILITY | |||||||
The Company’s Notes are subject to anti-dilution adjustments that allow for reductions in the Conversion Price in the event the Company subsequently issues equity securities including common stock or any security convertible or exchangeable for shares of common stock for no consideration or for consideration less than $80 per share. Simultaneously with any reduction to the Conversion Price, the number of shares of common stock that may be converted increases proportionately. The Company accounted for the conversion option in accordance with ASC Topic 815. Accordingly, the conversion option is not considered to be solely indexed to the Company’s own stock and, as such, is recorded as a liability. | |||||||
The Company’s conversion option derivative liability for the Notes was measured at fair value on the dates of issue and at June 30, 2014 using a binomial lattice model. | |||||||
Since the Conversion Price contains an anti-dilution adjustment, the probability that the Conversion Price of the Notes would decrease as the share price decreased was incorporated into the valuation calculation. | |||||||
The inputs into the binomial model are as follows: | |||||||
March 22, | April 23, | June 27, | 31-Dec-13 | May 23, | June 30, | ||
2013 | 2013 | 2013 | 2014 | 2014 | |||
Closing share price | $40 | $54 | $80 | $26 | $50 | $60 | |
Conversion price | $80 | $80 | $80 | $80 | $80 | $80 | |
Risk free rate | 0.80% | 0.71% | 1.38% | 1.75% | 1.17% | 1.25% | |
Expected volatility | 110% | 126% | 114% | 117% | 125% | 129% | |
Dividend yield | 0% | 0% | 0% | 0% | 0% | 0% | |
Expected life | 5 years | 4.92 years | 4.75 years | 4.25 years | 3.92 years | 3.75 years | |
The fair value of the conversion option derivative liability was $2,921,551 at June 30, 2014 and $1,131,745 at December 31, 2013. The change in the fair value of the conversion option derivative liability of $1,733,168 was recorded as a loss in the consolidated condensed statement of operations for the six month period ended June 30, 2014 and $1,038,323 was recorded as a loss in the six month period ended June 30, 2013. The change in the fair value of the conversion option derivative liability of $547,653 was recorded as a loss in the consolidated condensed statement of operations for the three month period ended June 30, 2014 and $1,330,893 was recorded as a loss in the three month period ended June 30, 2013. | |||||||
Conversion option derivative liability, beginning balance | $ | - | |||||
Origination of conversion option derivative liability on March 22, 2013 | 526,810 | ||||||
Origination of conversion option derivative liability on April 23, 2013 | 905,569 | ||||||
Origination of conversion option derivative liability on June 27, 2013 | 1,646,723 | ||||||
Gain on change in fair value of conversion option derivative liability, December 31, 2013 | -1,947,357 | ||||||
Balance, December 31, 2013 | $ | 1,131,745 | |||||
Loss on change in fair value of conversion option derivative liability, March 31, 2014 | 1,185,515 | ||||||
Balance, March 31, 2014 | $ | 2,317,260 | |||||
Origination of conversion option derivative liability on May 23, 2014 (Note 8) | 56,639 | ||||||
Loss on change in fair value of conversion option derivative liability, June 30, 2014 | 547,652 | ||||||
Balance, June 30, 2014 | $ | 2,921,551 |
INCOME_TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2014 | |
Income Tax Disclosure [Abstract] | ' |
INCOME TAXES | ' |
NOTE 10 - INCOME TAXES | |
We calculate our interim income tax provision in accordance with ASC 270, Interim Reporting, and ASC 740, Accounting for Income Taxes. At the end of each interim period, we estimate the annual effective tax rate and apply that rate to our ordinary quarterly earnings. The tax expense or benefit related to significant, unusual, or extraordinary items is recognized in the interim period in which those items occur. In addition, the effect of changes in enacted tax laws, rates, or tax status is recognized in the interim period in which the change occurs. | |
The computation of the annual estimated effective tax rate at each interim period requires certain estimates and significant judgment, including the expected operating income (loss) for the year, projections of the proportion of income (loss) earned and taxed in various states, permanent and temporary differences as a result of differences between amounts measured and recognized in accordance with tax laws and financial accounting standards, and the likelihood of recovering deferred tax assets generated in the current year. The accounting estimates used to compute the provision for income taxes may change as new events occur, additional information is obtained, or as the tax environment changes. | |
Income tax expense of $112,190 and $0 reflects an effective tax rate of 6.0% and 0% for the six months ended June 30, 2014 and 2013, respectively. Our effective tax rate differs from the statutory rate primarily due to benefits from a release of valuation allowance related to current year projected income. The company still maintains a full valuation allowance on all its remaining deferred tax assets. | |
We are subject to taxation in the United States and in various states. Our tax years 2010 and forward are subject to examination by the IRS and our tax years 2009 and forward are subject to examination by material state jurisdictions. However, due to prior year loss carryovers, the IRS and state tax authorities may examine any tax years for which the carryovers are used to offset future taxable income. We are subject to taxation in Canada for our Canadian subsidiary ESWC. Our tax years 2010 and forward are subject to examination by the Canada Revenue Agency. | |
STOCK_OPTIONS_AND_RESTRICTED_S
STOCK OPTIONS AND RESTRICTED STOCK PLAN | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ||||||||
STOCK OPTIONS AND RESTRICTED STOCK PLAN | ' | ||||||||
NOTE 11 - STOCK OPTIONS AND RESTRICTED STOCK PLAN | |||||||||
Stock-based compensation consists of stock options and restricted stock granted by the Company as follows: | |||||||||
For the six month periods ended | For the three month periods ended | ||||||||
June 30, | June 30, | June 30, | June 30, | ||||||
2014 | 2013 | 2014 | 2014 | ||||||
Stock options | $ | - | $ | 20,708 | $ | - | $ | - | |
Restricted stock grants vested | 74,272 | 152,245 | 28,582 | - | |||||
Total stock-based compensation | $ | 74,272 | $ | 172,953 | $ | 28,582 | $ | - | |
For the six month period ended June 30, 2014, $74,272 (June 30, 2013 - $152,245) has been recorded in officers’ compensation and directors’ fees related to the vesting of restricted stock grants. For the three month period ended June 30, 2014, $28,582 (June 30, 2013 - $0) has been recorded in officers’ compensation and directors’ fees related to the vesting of restricted stock grants. | |||||||||
STOCK OPTIONS | |||||||||
A summary of option transactions, including those granted pursuant to the terms of certain employment and other agreements follows: | |||||||||
Details | Stock Purchase Options | Weighted Average Exercise Price | |||||||
Outstanding, January 1, 2013 | 588 | $1,000 | |||||||
Expired | -175 | -957 | |||||||
Balance, January 1, 2014 | 413 | $1,010 | |||||||
Expired | - | - | |||||||
Outstanding, June 30, 2014 | 413 | $1,010 | |||||||
At June 30, 2014 and December 31, 2013, the outstanding options have a weighted average remaining life of 13 months and 19 months, respectively. No stock options were granted during the six and three month periods ended June 30, 2014 and 2013. | |||||||||
During the six month periods ended June 30, 2014 and 2013, $0 and $20,708, respectively, of stock option expense has been recorded in officers’ compensation and directors’ fees (three month periods ended June 30, 2014 and 2013, $0 and $0, respectively), in the consolidated condensed statements of operations and comprehensive income / (loss). At June 30, 2014, the Company had outstanding options as follows: | |||||||||
Number of Options | Exercise Price | Expiration Date | |||||||
300 | $1,300 | 15-Apr-15 | |||||||
113 | $240 | 30-Jun-16 | |||||||
413 | |||||||||
RESTRICTED STOCK PLAN | |||||||||
On March 20, 2013, the Company received the written consent of shareholders holding a majority of the outstanding shares of the Company’s common stock on a proposal to approve and adopt the Environmental Solutions Worldwide, Inc. 2013 Stock Plan (the “2013 Stock Plan”). The 2013 Stock Plan replaces the Company’s 2010 Stock Incentive Plan, which replaced the Company’s 2002 Stock Option Plan. While previously granted awards under the Company’s 2010 Stock Incentive Plan and 2002 Stock Option Plan will remain in effect in accordance with the terms of the individual awards, the 2013 Stock Plan will replace the Company’s 2010 Stock Incentive Plan and 2002 Stock Option Plan for future grants. | |||||||||
The 2013 Stock Plan authorizes the granting of awards to employees (including officers) and directors of, and consultants to, the Company and its subsidiaries in the form of any combination of non-statutory stock options (“NSOs”), incentive stock options (“ISOs”), stock appreciation rights (“SARs”), shares of restricted stock, restricted stock units (“RSUs”) and performance shares and share units, other stock-based awards in the Committee’s discretion, and dividend equivalent rights (collectively, “Awards”). Under the Plan, the Company may deliver authorized but unissued shares of common stock, treasury shares of common stock, and shares of common stock acquired by the Company for the purposes of the Plan. Each Award will be evidenced by an agreement between the recipient and the Company setting forth the terms of the Award, as determined by the Committee. A maximum of 20,000 shares of common stock will be available for grants pursuant to Awards under the Plan. The maximum number of shares of common stock with respect to which any individual may be granted Options or Stock Appreciation Rights during any one calendar year is 2,500 shares. | |||||||||
The 2013 Stock Plan is administered by the Compensation Committee. The Compensation Committee has authority, subject to ratification by the Board, to interpret the 2013 Stock Plan, adopt administrative regulations, determine the recipients of Awards, and determine and amend the terms of Awards. | |||||||||
Shares of restricted common stock issued were valued at the quoted market price on the dates of grant. During the six month periods ended June 30, 2014 and 2013, $74,272 and $152,245, respectively, has been recorded in officers’ compensation and directors’ fees in the consolidated condensed statements of operations and comprehensive income / (loss) for the fair value of the vested portion of each grant of restricted common stock. During the three month periods ended June 30, 2014 and 2013, $28,582 and $0, respectively, has been recorded in officers’ compensation and directors’ fees in the consolidated condensed statements of operations and comprehensive income / (loss) for the fair value of the vested portion of each grant of restricted common stock. These amounts along with stock option expense have been included in stock-based compensation in the consolidated condensed statements of changes in stockholders equity. | |||||||||
Date of Issuance | Number of restricted common stock issued | Shares To Be Issued | Additional Paid-In Capital | Note | |||||
28-Feb-13 | 2,057 | - | $152,245 | -1 | |||||
31-Dec-13 | 3,620 | - | 123,345 | -2 | |||||
31-Dec-13 | 658 | - | 17,108 | -3 | |||||
Total December 31, 2013 | 6,335 | - | $292,698 | ||||||
Vested but not yet issued | - | 57,163 | - | -4 | |||||
30-Jun-14 | 658 | - | 17,108 | -3 | |||||
Total June 30, 2014 | 658 | 57,163 | $ 17,108 | ||||||
(1) Effective December 10, 2012, the Board, on the recommendation of its compensation committee, approved a one-time grant of 4,114 shares of restricted common stock from treasury to a member of the Company’s Board for services rendered as Executive Chairman, 2,057 shares of which were issued upon the date of grant. The shares of common stock were issued from treasury not under the Company’s 2010 stock incentive plan. Effective February 28, 2013, the Company issued 2,057 shares of restricted common stock valued at $152,245 from treasury, in accordance with the grant. | |||||||||
(2) Effective December 31, 2013, the Company issued 3,620 shares of restricted common stock valued at $123,345 to seven board members under the 2013 Stock Plan as per the approved board compensation structure. | |||||||||
(3) Effective December 31, 2013, the Company issued 658 shares of restricted common stock valued at $17,108 to two executive officers under the 2013 Stock Plan as per their approved executive compensation arrangements. Effective January 12, 2012, the Board, on the recommendation of its compensation committee, approved a management incentive plan which includes a 10% restricted stock pool for management. Key participants of this plan will be executive officers. Secondary participants will include other management and certain other employees. The program provides for 5 year vesting. The equity grants are effective subject to the execution of the requisite grant agreements. Stock-based compensation expense will be recorded as of the vesting terms of the grants. Effective June 30, 2014, the Company issued 658 shares of restricted common stock valued at $17,108 to two executive officers under the 2013 Stock Plan as per their approved executive compensation arrangements. | |||||||||
(4) As of June 30, 2014, $57,163 (December 31, 2013 - $0) has been recorded as stock-based compensation under shares to be issued related to the vesting of restricted stock grants in the consolidated condensed statements of changes in stockholders’ equity. | |||||||||
The following tables show the outstanding equity awards (unvested portion of restricted stock grants) at June 30, 2014. | |||||||||
Vesting date | Number of restricted common stock outstanding (unvested) | ||||||||
31-Dec-14 | 2,269 | ||||||||
12-Jan-15 | 658 | ||||||||
31-Dec-15 | 1,103 | ||||||||
12-Jan-16 | 658 | ||||||||
12-Jan-17 | 660 | ||||||||
Total | 5,348 | ||||||||
RELATED_PARTY_TRANSACTIONS_AND
RELATED PARTY TRANSACTIONS AND BALANCES | 6 Months Ended |
Jun. 30, 2014 | |
Related Party Transactions [Abstract] | ' |
RELATED PARTY TRANSACTIONS AND BALANCES | ' |
NOTE 12 - RELATED PARTY TRANSACTIONS AND BALANCES | |
In addition to reimbursement of business expenses, transactions with related parties include: | |
On April 19, 2011, the Company’s Board ratified a Services Agreement (the “Orchard Agreement”) between the Company and Orchard Capital Corporation (“Orchard”) which was approved by the Company’s Compensation Committee and was effective January 30, 2011. Under the Orchard Agreement, Orchard agreed to provide services that may be mutually agreed to by and between Orchard and the Company including those duties customarily performed by the Chairman of the Board and executive of the Company as well as providing advice and consultation on general corporate matters and other projects as may be assigned by the Company’s Board as needed. Orchard is controlled by Richard Ressler. Certain affiliated entities of Orchard as well as Richard Ressler own shares of the Company. On August 1, 2013, the Company’s Board ratified a change to the terms of the Orchard Agreement increasing compensation under the agreement to $430,000 from $300,000 per annum. | |
During the six month periods ended June 30, 2014 and 2013, management fees charged to operations amounted to $215,000 and $150,000, respectively. During the three month periods ended June 30, 2014 and 2013, management fees charged to operations amounted to $107,500 and $75,000, respectively. | |
As at June 30, 2014, $107,500 (December 31, 2013 - $107,500) is included in accrued liabilities. | |
Mr. Nitin Amersey, a director of the Company, is listed as a control person with the Securities and Exchange Commission of Bay City Transfer Agency Registrar Inc., the Company’s transfer agent, and of Freeland Venture Resources Inc., which provides Edgar filing services to the Company. | |
For the six month period ended June 30, 2014, the Company paid $28,576 to Bay City Transfer Agency Registrar Inc., for services rendered and $13,950 to Freeland Venture Resources Inc., for services rendered. For the three month period ended June 30, 2014, the Company paid $12,397 to Bay City Transfer Agency Registrar Inc., for services rendered and $2,370 to Freeland Venture Resources Inc., for services rendered. For the six month period ended June 30, 2013, the Company paid $45,829 to Bay City Transfer Agency Registrar Inc., for services rendered and $12,200 to Freeland Venture Resources Inc., for services rendered. For the three month period ended June 30, 2013, the Company paid $715 to Bay City Transfer Agency Registrar Inc., for services rendered and $7,880 to Freeland Venture Resources Inc., for services rendered. | |
At June 30, 2014, accounts payable includes $0 (December 31, 2013 - $1,000) due to these entities. | |
During the six month periods ended June 30, 2014 and 2013 the Company paid Mr. Amersey $18,000 and $15,000, respectively, as fees, for services performed as audit committee chairperson. During the three month periods ended June 30, 2014 and 2013 the Company paid Mr. Amersey $9,000 and $7,500, respectively, as fees, for services performed as audit committee chairperson. | |
Mr. John Dunlap, a director of the Company, is the President of Dunlap Group, which provides consulting services to the Company related to regulatory compliance matters. During the six month periods ended June 30, 2014 and 2013, the Company paid fees to Dunlap Group amounting to $4,353 and $20,996, respectively. During the three month periods ended June 30, 2014 and 2013, the Company paid fees to Dunlap Group amounting to $960 and $8,683, respectively. | |
During the six month periods ended June 30, 2014 and 2013 the Company paid Mr. Dunlap $18,000 and $15,000, respectively, as fees, for services performed as compensation committee chairperson. During the three month periods ended June 30, 2014 and 2013 the Company paid Mr. Dunlap $9,000 and $7,500, respectively, as fees, for services performed as compensation committee chairperson. | |
During six month periods ended June 30, 2014 and 2013 the Company paid each of Mr. John Suydam and Mr. Zohar Loshitzer $10,000 and $0, respectively, as fees, for serving as a director of the Company. During three month periods ended June 30, 2014 and 2013 the Company paid each of Mr. John Suydam and Mr. Zohar Loshitzer $5,000 and $0, respectively, as fees for serving as a director of the Company. | |
Effective December 10, 2012, the Board approved a one-time grant of 4,114 shares of restricted common stock from treasury to Mr. Mark Yung, a member of the Company’s Board, for services rendered as Executive Chairman, 2,057 shares of which were issued upon the date of grant, and 2,057 shares of which were issued on February 28, 2013 (Note 11). The issued shares were valued at the quoted market price on the grant date. During the six month periods ended June 30, 2014 and 2013, $0 and $152,245, respectively, has been recorded in officers’ compensation and directors’ fees in the consolidated condensed statements of operations and comprehensive income / (loss) for the fair value related to the grant of restricted common stock to Mr. Yung. The shares of common stock were issued from treasury, not under the Company’s 2010 stock incentive plan. During the three month periods ended June 30, 2014 and 2013, no expense was incurred with respect to such shares. | |
On March 22, 2013, April 23, 2013, June 27, 2013 and May 23, 2014, the Company issued an aggregate amount of $5,064,423 unsecured convertible promissory notes to certain shareholders and deemed affiliates of certain members of the Board of Directors (Note 8). During the six month periods ended June 30, 2014 and 2013, interest expense on the Notes amounted to $255,877 and $72,311, respectively. During the three month periods ended June 30, 2014 and 2013, interest expense on the Notes amounted to $127,355 and $68,811, respectively. At June 30, 2014 and December 31, 2013, interest expense accrued on the Notes included in accrued liabilities on the consolidated condensed balance sheets amounted to $127,355 and $127,777, respectively. As of June 30, 2014 the Company has issued 5,126 shares as interest payment (December 31, 2013 – 8,000 shares). |
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended | ||
Jun. 30, 2014 | |||
Commitments and Contingencies Disclosure [Abstract] | ' | ||
COMMITMENTS AND CONTINGENCIES | ' | ||
NOTE 13 - COMMITMENTS AND CONTINGENCIES | |||
LEASES | |||
Effective November 24, 2004, the Company’s wholly-owned subsidiary, ESWA, entered into a lease agreement for approximately 40,220 square feet of leasehold space at 200 Progress Drive, Montgomeryville, Pennsylvania. The leasehold space houses the Company’s emissions testing facilities and ESW’s manufacturing operations. The lease commenced on January 15, 2005. Effective October 16, 2009, the Company’s wholly-owned subsidiary ESWA entered into a lease renewal agreement with Nappen & Associates for the leasehold property in Pennsylvania. There were no modifications to the original economic terms of the lease under the lease renewal agreement. Under the terms of the lease renewal, the lease term was extended to February 28, 2013. Effective September 24, 2012, ESWA entered into a second lease amendment agreement with Nappen & Associates for the leasehold property in Pennsylvania, whereby ESWA extended the term of the lease agreement by an additional 5 years. There were no modifications to the original economic terms of the lease. Under the terms of the second lease renewal, the lease will expire on February 28, 2018. | |||
On June 7, 2013, the Company’s wholly-owned subsidiary, ESWCT, entered into a commercial real estate lease with Trepte Industrial Park, Ltd., a California limited partnership, pursuant to which ESWCT is leasing approximately 18,000 square feet of commercial property located in San Diego, California, to be used primarily for housing ESWCT’s manufacturing and diesel particulate filter cleaning operations. This lease provides for a 37-month lease term (commencing July 1, 2013), with an option exercisable by ESWCT to extend the lease term for two additional 36-month periods. The current base rent under this lease is $15,300 per month. Concurrently with the signing of this lease and pursuant to the terms thereof, ESWCT paid to the Lessor an amount equal to $155,600, which is included in prepaid expenses and other assets and reflects the first month’s base rent, the security deposit, the funding required for improvements done by the Lessor at ESWCT’s request, and pre-paid rent (“Prepaid Rent”). The amount was credited against monthly base rent payable by ESWCT starting January 2014 and each month thereafter. | |||
Effective October 1, 2013, the Company’s wholly-owned subsidiary, ESWCT, entered into a commercial real estate lease with Marina Bay Crossing, LLC, a California Limited Liability Company, ESWCT leased approximately 1,808 square feet of commercial property located in Richmond, California, to be used primarily for housing ESWCT’s engineering and service operations. The facility also serves as a training facility servicing northern California. This lease provides for a 12-month lease term (commencing October 1, 2013), with an option exercisable by ESWCT to extend the lease term for one additional 12-month period. The current rent under this lease is $2,182 per month. | |||
At June 30, 2014, balance of the Prepaid Rent amounted to $17,941. | |||
The following is a summary of the minimum annual lease payments for the Pennsylvania and California leases: | |||
Year Ending December 31, | Amount | ||
2014 (excluding the six months ended June 30, 2014) | $ | 198,141 | |
2015 | 372,935 | ||
2016 | 279,340 | ||
2017 | 180,990 | ||
2018 | 30,165 | ||
Total | $ | 1,061,571 | |
LEGAL MATTERS | |||
From time to time, the Company may be involved in a variety of claims, suits, investigations and proceedings arising from the ordinary course of our business, collections claims, breach of contract claims, labor and employment claims, tax and other matters. Although claims, suits, investigations and proceedings are inherently uncertain and their results cannot be predicted with certainty, ESW believes that the resolution of current pending matters will not have a material adverse effect on its business, consolidated financial position, results of operations or cash flow. Regardless of the outcome, litigation can have an adverse impact on ESW because of legal costs, diversion of management resources and other factors. | |||
· The Company is pursuing a lawsuit filed in the Supreme Court of the State of New York, County of Nassau, on October 18, 2012 for collection of unpaid invoices related to goods delivered to a former distributor. | |||
WARRANTY PROVISIONS | |||
The Company is also exposed to warranty contingencies associated with certain verification procedures relating to the ThermaCat and to the assumption of warranties for legacy Cleaire products in the field. In 2013, ESW had estimated a one-time charge of $1,000,000 related to its assumption of warranties for legacy Cleaire products in the field and a one-time warranty charge of $504,900 associated with certain verification procedures relating to the ThermaCat. The actual amount of loss associated with such assumption of warranties and/or verification procedures, however, could be materially different. Both of these warranty charges are based on the estimated number of operational units, average remaining warranty life and cost of warrantable failure. These amounts, as well as the on-road and off-road warranty provision have been included in the warranty provision of $1,841,263 as of June 30, 2014 on the consolidated condensed balance sheets (December 31, 2013 - $1,723,769). | |||
For the six months periods ended June 30, 2014 and 2013, the total warranty, service, service travel and installation costs included in cost of revenue was $290,500 and $1,581,834, respectively. For the three months periods ended June 30, 2014 and 2013, the total warranty, service, service travel and installation costs included in cost of revenue was $162,663 and $1,562,722, respectively. | |||
STOCK ISSUANCE | |||
Effective August 1, 2013, the Board of Directors on the recommendation of the Compensation Committee approved the issuance of 2,350 shares of common stock to the Executive Chairman of the Company for services, contingent upon conversion of the Notes, in order to maintain his percentage ownership interest in the Company. |
OPERATING_SEGMENTS
OPERATING SEGMENTS | 6 Months Ended | ||||||||||
Jun. 30, 2014 | |||||||||||
Segment Reporting [Abstract] | ' | ||||||||||
OPERATING SEGMENTS | ' | ||||||||||
NOTE 14 – OPERATING SEGMENTS | |||||||||||
The Company has two principal operating segments, air testing services and catalyst manufacturing for MHDD retrofits. These operating segments were determined based on the nature of the products and services offered. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision-maker in deciding how to allocate resources and in assessing performance. The Company’s Executive Chairman has been identified as the chief operating decision-maker, and directs the allocation of resources to operating segments based on the profitability and cash flows of each respective segment. | |||||||||||
The Company evaluates performance based on several factors, of which the primary financial measure is net income. The accounting policies of the business segments are the same as those described in Note 2. The following tables show the operations and certain assets of the Company’s reportable segments: | |||||||||||
For the six month period ended June 30, 2014 | |||||||||||
MHDD Retrofit | Air Testing | Unallocated | Adjustments and eliminations | Consolidated | |||||||
Revenue from external customers | $ | 14,689,270 | $ | 346,275 | $ | - | $ | - | $ | 15,035,545 | |
Intersegment revenue | $ | - | $ | 428,713 | $ | - | $ | (428,713) (1) | $ | - | |
Net income / (loss) | $ | 4,522,942 | $ | -69,649 | $ | -2,701,553 | $ | - | $ | 1,751,740 | |
Property, plant and equipment additions | $ | 58,276 | $ | 395,283 | $ | - | $ | - | $ | 453,559 | |
Equipment under construction additions / (reductions) | $ | 262,016 | $ | -378,191 | $ | - | $ | - | $ | -116,175 | |
Interest expense (Notes 7 and 8) | $ | - | $ | 5,843 | $ | 258,725 | $ | - | $ | 264,568 | |
Depreciation | $ | 92,028 | $ | 116,528 | $ | - | $ | - | $ | 208,556 | |
For the three month period ended June 30, 2014 | |||||||||||
MHDD Retrofit | Air Testing | Unallocated | Adjustments and eliminations | Consolidated | |||||||
Revenue from external customers | $ | 7,790,645 | $ | 249,316 | $ | - | $ | - | $ | 8,039,961 | |
Intersegment revenue | $ | - | $ | 176,453 | $ | - | $ | 176,453 (1) | $ | - | |
Net income / (loss) | $ | 2,001,343 | $ | 6,017 | $ | -676,842 | $ | - | $ | 1,330,518 | |
Property, plant and equipment reductions | $ | -60,289 | $ | -20,449 | $ | - | $ | - | $ | -80,738 | |
Equipment under construction additions / (reductions) | $ | 264,086 | $ | -21,711 | $ | - | $ | - | $ | 242,375 | |
Interest expense (Notes 7 and 8) | $ | - | $ | 2,855 | $ | 130,203 | $ | - | $ | 133,058 | |
Depreciation | $ | 38,346 | $ | 52,594 | $ | - | $ | - | $ | 90,940 | |
As of June 30, 2014 | |||||||||||
MHDD Retrofit | Air Testing | Unallocated | Adjustments and eliminations | Consolidated | |||||||
Total assets | $ | 8,847,170 | $ | 1,760,127 | $ | 5,709,808 | $ | - | $ | 16,317,105 | |
Equipment under construction | $ | 47,030 | $ | 267,817 | $ | - | $ | - | $ | 314,847 | |
Property, plant and equipment | $ | 503,621 | $ | 1,334,563 | $ | - | $ | - | $ | 1,838,184 | |
Accounts receivable | $ | 2,983,494 | $ | 113,530 | $ | - | $ | - | $ | 3,097,024 | |
Inventories | $ | 3,844,110 | $ | - | $ | - | $ | - | $ | 3,844,110 | |
For the six month periods ended June 30, 2013 | |||||||||||
MHDD Retrofit | Air Testing | Unallocated | Adjustments and eliminations | Consolidated | |||||||
Revenue from external customers | $ | 4,344,324 | $ | 401,021 | $ | - | $ | - | $ | 4,745,345 | |
Intersegment revenue | $ | - | $ | 76,666 | $ | - | $ | (76,666) (1) | $ | - | |
Net loss | $ | -1,770,395 | $ | -483,936 | $ | -2,328,121 | $ | - | $ | -4,582,452 | |
Property, plant and equipment additions | $ | 272,495 | $ | 3,192 | $ | - | $ | - | $ | 275,687 | |
Equipment under construction additions | $ | - | $ | 55,118 | $ | - | $ | - | $ | 55,118 | |
Interest expense (Notes 7 and 8) | $ | - | $ | 6,884 | $ | 72,311 | $ | - | $ | 79,195 | |
Depreciation | $ | 47,715 | $ | 291,304 | $ | - | $ | - | $ | 339,019 | |
For the three month periods ended June 30, 2013 | |||||||||||
MHDD Retrofit | Air Testing | Unallocated | Adjustments and eliminations | Consolidated | |||||||
Revenue from external customers | $ | 3,105,196 | $ | 184,307 | $ | - | $ | - | $ | 3,289,503 | |
Intersegment revenue | $ | - | $ | 53,653 | $ | - | $ | 53,653 (1) | $ | - | |
Net loss | $ | -1,592,915 | $ | -287,573 | $ | -2,071,278 | $ | - | $ | -3,951,766 | |
Property, plant and equipment additions | $ | 272,495 | $ | -38,799 | $ | - | $ | - | $ | 233,696 | |
Equipment under construction additions | $ | - | $ | 76,606 | $ | - | $ | - | $ | 76,606 | |
Interest expense (Notes 7 and 8) | $ | - | $ | 3,378 | $ | 68,811 | $ | - | $ | 72,189 | |
Depreciation | $ | 23,575 | $ | 144,844 | $ | - | $ | - | $ | 168,419 | |
As of December 31, 2013 | |||||||||||
MHDD Retrofit | Air Testing | Unallocated | Adjustments and eliminations | Consolidated | |||||||
Total assets | $ | 7,202,958 | $ | 1,557,127 | $ | 3,654,927 | $ | - | $ | 12,415,012 | |
Equipment under construction | $ | 15,030 | $ | 415,992 | $ | - | $ | - | $ | 431,022 | |
Property, plant and equipment | $ | 546,086 | $ | 1,028,095 | $ | - | $ | - | $ | 1,574,181 | |
Accounts receivable | $ | 1,833,950 | $ | 54,561 | $ | - | $ | - | $ | 1,888,511 | |
Inventories | $ | 3,693,367 | $ | - | $ | - | $ | - | $ | 3,693,367 | |
(1) These amounts represent revenues earned from services performed for the MHDD Retrofit segment and its profits, they are eliminated upon consolidation. | |||||||||||
All of the Company’s revenue for the six and three month periods ended June 30, 2014 and 2013 was derived from operations in the United States. All property, plant and equipment (including property, plant and equipment under construction) were located in the United States at June 30, 2014 and December 31, 2013. |
EARNINGS_LOSS_PER_SHARE
EARNINGS / (LOSS) PER SHARE | 6 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Earnings Per Share [Abstract] | ' | |||||||
EARNINGS / (LOSS) PER SHARE | ' | |||||||
NOTE 15 – EARNINGS / (LOSS) PER SHARE | ||||||||
SIX MONTH PERIOD ENDED JUNE 30, | THREE MONTH PERIOD ENDED JUNE 30, | |||||||
2014 | 2013 | 2014 | 2013 | |||||
Numerator | ||||||||
Net income / (loss) and comprehensive income / (loss) | $1,751,740 | ($4,582,452) | $1,330,518 | ($3,951,766) | ||||
Denominator | ||||||||
Weighted average number of shares outstanding | $128,323 | $113,304 | $130,875 | $113,845 | ||||
Restricted stock grants | 5,348 | - | 5,348 | - | ||||
Contingent restricted stock grants (Note 13) | 2,350 | - | 2,350 | - | ||||
$136,021 | $113,304 | $138,573 | $113,845 | |||||
413 shares of common stock issuable upon exercise of ESW's outstanding stock options were excluded from the computation of diluted earnings per share for the six and three month period ended June 30, 2014 because the inclusion of these shares would be anti-dilutive. Also excluded were potential 62,500 shares of common stock that would be issuable upon the conversion of the Notes based on a conversion price of $80 per share, as well as the additional shares issuable if the holders elect to convert interest into common stock or if the conversion option derivative liability is triggered by a future financing, as the inclusion of these shares would be anti-dilutive. | ||||||||
538 shares of common stock issuable upon exercise of ESW's outstanding stock options were excluded from the computation of diluted loss per share for the six and three month period ended June 30, 2013 because the inclusion of these shares would be anti-dilutive. Also excluded were 62,500 shares of common stock that would be issuable upon the conversion of the Notes based on a conversion price of $80 per share, as well as the additional shares issuable if the holders elect to convert interest into common stock or if the conversion option derivative liability is triggered by a future financing, as the inclusion of these shares would be anti-dilutive. |
RISK_MANAGEMENT
RISK MANAGEMENT | 6 Months Ended |
Jun. 30, 2014 | |
Risks and Uncertainties [Abstract] | ' |
RISK MANAGEMENT | ' |
NOTE 16 - RISK MANAGEMENT | |
CONCENTRATIONS OF CREDIT RISK AND ECONOMIC DEPENDENCE | |
The Company’s cash balances are maintained in various banks in Canada and the United States. Deposits held in banks in the United States are insured up to $250,000 per depositor for each bank by the Federal Deposit Insurance Corporation. Deposits held in banks in Canada are insured up to $100,000 Canadian per depositor for each bank by The Canada Deposit Insurance Corporation, a federal crown corporation. Actual balances at times may exceed these limits. | |
Interest rate risk is the risk that the value of a financial instrument might be adversely affected by a change in the interest rates. The promissory notes payable and loan payable both have fixed interest rates therefore the Company is exposed to interest rate risk in that they could not benefit from a decrease in market interest rates. In seeking to minimize the risks from interest rate fluctuations, the Company manages exposure through its normal operating and financing activities. | |
Accounts Receivable and Concentrations of Credit Risk: The Company performs on-going credit evaluations of its customers’ financial condition and generally does not require collateral from its customers. Three of its customers accounted for 17.1%, 13.0% and 11.6%, respectively, of the Company's revenue during the six month period ended June 30, 2014 and three of its customers accounted for 24.3%, 15.9% and 12.7%, respectively, of its accounts receivable as of June 30, 2014. | |
Three of its customers accounted for 26.8%, 14.5% and 10.1%, respectively, of the Company's revenue during the six month period ended June 30, 2013 and three of its customers accounted for 36.3%, 27.1% and 6.1%, respectively, of its accounts receivable as of June 30, 2013. | |
For the six month period ended June 30, 2014, the Company purchased approximately 10.5% and 8.8% of its inventory from two vendors. For the six month period ended June 30, 2013, the Company purchased approximately 13.4% and 11.1% of its inventory from two vendors. | |
The accounts payable to the two largest vendors aggregated $221,651 as of June 30, 2014 and accounts payable to the two largest vendors aggregated $466,433 as of June 30, 2013. |
SIGNIFICANT_ACCOUNTING_POLICIE1
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2014 | |
Accounting Policies [Abstract] | ' |
BASIS OF CONSOLIDATION | ' |
BASIS OF CONSOLIDATION | |
The consolidated condensed financial statements include the accounts of the Company and its wholly-owned subsidiaries, ESW America Inc. (“ESWA”), ESW Technologies Inc. (“ESWT”), ESW Canada Inc. (“ESWC”), ESW CleanTech Inc. (“ESWCT”) and Technology Fabricators Inc. (“TFI”). All inter-company transactions and balances have been eliminated on consolidation. Amounts in the consolidated condensed financial statements are expressed in U.S. dollars. | |
ESTIMATES | ' |
ESTIMATES | |
The preparation of consolidated condensed financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated condensed financial statements and the reported amounts of revenue and expense during the reporting period. Actual results could differ from those estimates. Significant estimates include amounts for inventory valuation, impairment of and useful lives of property plant and equipment, the valuation of the stock-based compensation and conversion option derivative liability, and warranty provisions. | |
ALLOWANCE FOR DOUBTFUL ACCOUNTS | ' |
ALLOWANCE FOR DOUBTFUL ACCOUNTS | |
The Company extends unsecured credit to its customers in the ordinary course of business but mitigates the associated credit risk by performing credit checks and actively pursuing past due accounts. An allowance for doubtful accounts is estimated and recorded based on management’s assessment of the credit history with the customer and the current relationships with them. On this basis management has determined that an allowance for doubtful accounts of $283,682 and $250,862 was appropriate as of June 30, 2014 and December 31, 2013, respectively. | |
INVENTORY | ' |
INVENTORY | |
Inventory is stated at the lower of cost or market determined using the first-in, first-out method. Inventory is periodically reviewed for use and obsolescence, and adjusted as necessary. Inventory consists of raw materials, work-in-process, finished goods and parts. | |
PROPERTY, PLANT AND EQUIPMENT UNDER CONSTRUCTION | ' |
PROPERTY, PLANT AND EQUIPMENT UNDER CONSTRUCTION | |
The Company capitalizes customized equipment built to be used in the future day to day operations at cost. Once complete and available for use, the cost for accounting purposes is transferred to property, plant and equipment, where normal depreciation rates apply. | |
PROPERTY, PLANT AND EQUIPMENT | ' |
PROPERTY, PLANT AND EQUIPMENT | |
Property, plant and equipment are recorded at cost. Depreciation is computed on a straight-line basis over the estimated useful lives of the assets, generally 5 to 7 years. Maintenance and repairs are charged to operations as incurred. Significant renewals and betterments are capitalized. | |
REVENUE RECOGNITION | ' |
REVENUE RECOGNITION | |
The Company derives revenue primarily from the sale of its diesel emission control products. In accordance with Staff Accounting Bulletin No. 104, revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred, the amount is fixed or determinable and collection is reasonably assured. | |
The Company also derives revenue (approximately 2.3% and 8.5% of total revenue for the six month periods ended June 30, 2014 and 2013, respectively) from providing air testing and environmental certification services. Revenues are recognized upon delivery of testing services when persuasive evidence of an arrangement exists and collection of the related receivable is reasonably assured. | |
EARNINGS/LOSS PER SHARE OF COMMON STOCK | ' |
EARNINGS/LOSS PER SHARE OF COMMON STOCK | |
Basic and diluted earnings per share have been determined by dividing the consolidated net earnings available to shareholders for the applicable period by the basic and diluted weighted average number of shares outstanding, respectively. The diluted weighted average number of shares outstanding is calculated as if all dilutive options and restricted stock grants had been exercised or vested at the later of the beginning of the reporting period or date of grant, using the treasury stock method. The dilutive effect of convertible notes has been reflected in diluted weighted average number of shares using the if-converted method. | |
Loss per share of common stock is computed by dividing the net loss by the weighted average number of shares of common stock outstanding during the period. Common stock equivalents are excluded from the computation of diluted loss per share when their effect is anti-dilutive. | |
INCOME TAXES | ' |
INCOME TAXES | |
Income taxes are computed in accordance with the provisions of ASC Topic 740, which requires, among other things, a liability approach to calculating deferred income taxes. The Company recognizes deferred tax liabilities and assets for the expected future tax consequences of events that have been recognized in its financial statements or tax returns. Under this method, deferred tax liabilities and assets are determined based on the difference between the financial statement carrying amounts and tax bases of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse. The Company is required to make certain estimates and judgments about the application of tax law, the expected resolution of uncertain tax positions and other matters. In the event that uncertain tax positions are resolved for amounts different than the Company’s estimates, or the related statutes of limitations expire without the assessment of additional income taxes, the Company will be required to adjust the amounts of the related assets and liabilities in the period in which such events occur. Such adjustments may have a material impact on ESW’s income tax provision and results of operations. | |
SHIPPING AND HANDLING COSTS | ' |
SHIPPING AND HANDLING COSTS | |
The Company’s shipping and handling costs of $260,894 and $48,277 are included in cost of revenues for the six month periods ended June 30, 2014 and 2013, respectively. For the three month periods ended June 30, 2014 and 2013 shipping and handling costs amounted to $124,777 and $27,417, respectively. | |
Additionally, the Company has recorded recoveries of these costs amounting to $49,620 and $40,377, which are included in cost of revenues for the six month period ended June 30, 2014 and in revenue for the six month period ended June 30, 2013, respectively. | |
For the three month period ended June 30, 2014 shipping and handling recoveries amounted to $7,755 which is included in cost of revenues. For the three month period ended June 30, 2013 shipping and handling recoveries included in revenue amounted to $25,944. | |
RESEARCH AND DEVELOPMENT | ' |
RESEARCH AND DEVELOPMENT | |
The Company is engaged in research and development work. Research and development costs are charged as an operating expense as incurred. Any grant money received for research and development work is used to offset these expenditures. | |
For the six month periods ended June 30, 2014 and 2013, the Company expensed $353,066 and $240,611, net of grant revenues, respectively, towards research and development costs. For the three month periods ended June 30, 2014 and 2013, the Company expensed $176,329 and $158,871, net of grant revenues, respectively, towards research and development costs. | |
For the six month periods ended June 30, 2014 and 2013, gross research and development expense, excluding any offsetting grant revenues, amounted to $353,066 and $281,557, respectively, and grant revenues amounted to $0 and $40,946, respectively. For the three month periods ended June 30, 2014 and 2013, gross research and development expense, excluding any offsetting grant revenues, amounted to $176,329 and $158,871, respectively, and grant money amounted to $0 and $0, respectively. | |
FOREIGN CURRENCY TRANSLATION | ' |
FOREIGN CURRENCY TRANSLATION | |
The functional currency of the Company and its foreign subsidiaries is the U.S. dollar. All of the Company’s revenue and materials purchased from suppliers are denominated in, or linked to, the U.S. dollar. Transactions denominated in currencies other than the functional currency are converted to the functional currency on the transaction date, and any resulting assets or liabilities are further translated at each reporting date and at settlement. Gains and losses recognized upon such translations are included within foreign exchange (gain) / loss in the consolidated condensed statements of operations and comprehensive income / (loss). | |
PRODUCT WARRANTIES | ' |
PRODUCT WARRANTIES | |
The Company provides for estimated warranty costs at the time of sale and accrues for specific items at the time their existence is known and the amounts are determinable. The Company estimates warranty costs using standard quantitative measures based on industry warranty claim experience and evaluation of specific customer warranty issues. The Company currently estimates warranty costs as 2% of revenue for on-road products and, effective July 1, 2013, the Company revised its warranty accrual for off-road products to 4% of revenue from the prior warranty accrual estimate of 2% of revenue. | |
SEGMENT REPORTING | ' |
SEGMENT REPORTING | |
ASC 280-10, “Disclosures about Segments of an Enterprise and Related Information”, establishes standards for the way that public business enterprises report information about operating segments in the Company’s consolidated condensed financial statements. Operating segments are components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. ESW operates in two reportable segments; medium and heavy duty diesel retrofit operations and air testing services (see Note 14). ESW’s chief operating decision maker is the Company’s Executive Chairman. |
INVENTORY_Tables
INVENTORY (Tables) | 6 Months Ended | ||||
Jun. 30, 2014 | |||||
Inventory Disclosure [Abstract] | ' | ||||
Schedule of inventory | ' | ||||
Inventory | 30-Jun-14 | 31-Dec-13 | |||
Raw materials | $ | 2,210,841 | $ | 1,964,412 | |
Work-in-process | 1,854,626 | 1,950,642 | |||
Finished goods | - | 6,868 | |||
Parts | - | 17,954 | |||
4,065,467 | 3,939,876 | ||||
Less: reserve for inventory obsolescence | -221,357 | -246,509 | |||
Total | $ | 3,844,110 | $ | 3,693,367 |
PROPERTY_PLANT_AND_EQUIPMENT_T
PROPERTY, PLANT AND EQUIPMENT (Tables) | 6 Months Ended | ||||
Jun. 30, 2014 | |||||
Property, Plant and Equipment [Abstract] | ' | ||||
Schedule of property, plant and equipment | ' | ||||
Classification | 30-Jun-14 | 31-Dec-13 | |||
Plant, machinery and equipment | $ | 4,016,643 | $ | 3,583,451 | |
Office equipment | 81,295 | 186,916 | |||
Furniture and fixtures | 128,326 | 1,063 | |||
Vehicles | 34,762 | 17,038 | |||
Leasehold improvements | 1,079,881 | 1,079,881 | |||
5,340,907 | 4,868,349 | ||||
Less: accumulated depreciation | -3,502,723 | -3,294,168 | |||
$ | 1,838,184 | $ | 1,574,181 | ||
Schedule of depreciation expense | ' | ||||
For the six month periods ended | |||||
Depreciation Expense | 30-Jun-14 | 30-Jun-13 | |||
Depreciation expense included in cost of revenue | $ | 179,575 | $ | 223,400 | |
Depreciation expense included in operating expenses | 28,981 | 112,578 | |||
Depreciation expense included in research and development costs | - | 3,041 | |||
Total depreciation expense | $ | 208,556 | $ | 339,019 | |
For the three month periods ended | |||||
June 30, | June 30, | ||||
Depreciation Expense | 2014 | 2013 | |||
Depreciation expense included in cost of revenue | $ | 88,578 | $ | 110,961 | |
Depreciation expense included in operating expenses | 2,362 | 57,458 | |||
Depreciation expense included in research and development costs | - | - | |||
Total depreciation expense | $ | 90,940 | $ | 168,419 |
LOAN_PAYABLE_Tables
LOAN PAYABLE (Tables) | 6 Months Ended | ||
Jun. 30, 2014 | |||
Debt Disclosure [Abstract] | ' | ||
Schedule of loan maturities based on outstanding principal | ' | ||
Year Ending December 31, | Amount | ||
2014 (excluding the six months ended June 30, 2014) | $ | 35,777 | |
2015 | 73,182 | ||
2016 | 75,408 | ||
2017 | 77,702 | ||
2018 | 80,065 | ||
Thereafter | 26,828 | ||
Total | $ | 368,962 |
SENIOR_SECURED_CONVERTIBLE_PRO1
SENIOR SECURED CONVERTIBLE PROMISSORY NOTES (Tables) | 6 Months Ended | ||
Jun. 30, 2014 | |||
Senior Notes [Abstract] | ' | ||
Schedule of senior secured convertible promissory notes | ' | ||
Period ended | |||
30-Jun-14 | |||
Face value of March 22, 2013 promissory notes payable | $ | 1,400,000 | |
Face value of April 23, 2013 promissory notes payable | 1,600,000 | ||
Face value of June 27, 2013 promissory notes payable | 2,000,000 | ||
Total face value of promissory notes payable | 5,000,000 | ||
Discount on promissory notes payable | -3,079,102 | ||
Accretion of discount on promissory notes payable | 225,882 | ||
Balance December 31, 2013 | $ | 2,146,780 | |
Accretion of discount on promissory notes payable | 94,774 | ||
Balance March 31, 2014 | $ | 2,241,554 | |
Face value of May 23, 2014 promissory notes payable | 122,486 | ||
Discount on the May 23, 2014 promissory notes payable | -56,639 | ||
Accretion of discount on promissory notes payable | 104,792 | ||
Balance June 30, 2014 | $ | 2,412,193 |
CONVERSION_OPTION_DERIVATIVE_L1
CONVERSION OPTION DERIVATIVE LIABILITY (Tables) | 6 Months Ended | ||||||
Jun. 30, 2014 | |||||||
Derivative Liability [Abstract] | ' | ||||||
Schedule of inputs into the binomial model | ' | ||||||
March 22, | April 23, | June 27, | 31-Dec-13 | May 23, | June 30, | ||
2013 | 2013 | 2013 | 2014 | 2014 | |||
Closing share price | $40 | $54 | $80 | $26 | $50 | $60 | |
Conversion price | $80 | $80 | $80 | $80 | $80 | $80 | |
Risk free rate | 0.80% | 0.71% | 1.38% | 1.75% | 1.17% | 1.25% | |
Expected volatility | 110% | 126% | 114% | 117% | 125% | 129% | |
Dividend yield | 0% | 0% | 0% | 0% | 0% | 0% | |
Expected life | 5 years | 4.92 years | 4.75 years | 4.25 years | 3.92 years | 3.75 years | |
Schedule of fair value of the conversion option derivative liability | ' | ||||||
Conversion option derivative liability, beginning balance | $ | - | |||||
Origination of conversion option derivative liability on March 22, 2013 | 526,810 | ||||||
Origination of conversion option derivative liability on April 23, 2013 | 905,569 | ||||||
Origination of conversion option derivative liability on June 27, 2013 | 1,646,723 | ||||||
Gain on change in fair value of conversion option derivative liability, December 31, 2013 | -1,947,357 | ||||||
Balance, December 31, 2013 | $ | 1,131,745 | |||||
Loss on change in fair value of conversion option derivative liability, March 31, 2014 | 1,185,515 | ||||||
Balance, March 31, 2014 | $ | 2,317,260 | |||||
Origination of conversion option derivative liability on May 23, 2014 (Note 8) | 56,639 | ||||||
Loss on change in fair value of conversion option derivative liability, June 30, 2014 | 547,652 | ||||||
Balance, June 30, 2014 | $ | 2,921,551 |
STOCK_OPTIONS_AND_RESTRICTED_S1
STOCK OPTIONS AND RESTRICTED STOCK PLAN (Tables) | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ||||||||
Schedule of components of stock-based compensation | ' | ||||||||
For the six month periods ended | For the three month periods ended | ||||||||
June 30, | June 30, | June 30, | June 30, | ||||||
2014 | 2013 | 2014 | 2014 | ||||||
Stock options | $ | - | $ | 20,708 | $ | - | $ | - | |
Restricted stock grants vested | 74,272 | 152,245 | 28,582 | - | |||||
Total stock-based compensation | $ | 74,272 | $ | 172,953 | $ | 28,582 | $ | - | |
Schedule of summary of option transactions | ' | ||||||||
Details | Stock Purchase Options | Weighted Average Exercise Price | |||||||
Outstanding, January 1, 2013 | 588 | $1,000 | |||||||
Expired | -175 | -957 | |||||||
Balance, January 1, 2014 | 413 | $1,010 | |||||||
Expired | - | - | |||||||
Outstanding, June 30, 2014 | 413 | $1,010 | |||||||
Schedule of outstanding options | ' | ||||||||
Number of Options | Exercise Price | Expiration Date | |||||||
300 | $1,300 | 15-Apr-15 | |||||||
113 | $240 | 30-Jun-16 | |||||||
413 | |||||||||
Schedule of restricted common stock issued | ' | ||||||||
Date of Issuance | Number of restricted common stock issued | Shares To Be Issued | Additional Paid-In Capital | Note | |||||
28-Feb-13 | 2,057 | - | $152,245 | -1 | |||||
31-Dec-13 | 3,620 | - | 123,345 | -2 | |||||
31-Dec-13 | 658 | - | 17,108 | -3 | |||||
Total December 31, 2013 | 6,335 | - | $292,698 | ||||||
Vested but not yet issued | - | 57,163 | - | -4 | |||||
30-Jun-14 | 658 | - | 17,108 | -3 | |||||
Total June 30, 2014 | 658 | 57,163 | $17,108 | ||||||
(1) Effective December 10, 2012, the Board, on the recommendation of its compensation committee, approved a one-time grant of 4,114 shares of restricted common stock from treasury to a member of the Company’s Board for services rendered as Executive Chairman, 2,057 shares of which were issued upon the date of grant. The shares of common stock were issued from treasury not under the Company’s 2010 stock incentive plan. Effective February 28, 2013, the Company issued 2,057 shares of restricted common stock valued at $152,245 from treasury, in accordance with the grant. | |||||||||
(2) Effective December 31, 2013, the Company issued 3,620 shares of restricted common stock valued at $123,345 to seven board members under the 2013 Stock Plan as per the approved board compensation structure. | |||||||||
(3) Effective December 31, 2013, the Company issued 658 shares of restricted common stock valued at $17,108 to two executive officers under the 2013 Stock Plan as per their approved executive compensation arrangements. Effective January 12, 2012, the Board, on the recommendation of its compensation committee, approved a management incentive plan which includes a 10% restricted stock pool for management. Key participants of this plan will be executive officers. Secondary participants will include other management and certain other employees. The program provides for 5 year vesting. The equity grants are effective subject to the execution of the requisite grant agreements. Stock-based compensation expense will be recorded as of the vesting terms of the grants. Effective June 30, 2014, the Company issued 658 shares of restricted common stock valued at $17,108 to two executive officers under the 2013 Stock Plan as per their approved executive compensation arrangements. | |||||||||
(4) As of June 30, 2014, $57,163 (December 31, 2013 - $0) has been recorded as stock-based compensation under shares to be issued related to the vesting of restricted stock grants in the consolidated condensed statements of changes in stockholders’ equity. | |||||||||
Schedule of outstanding equity awards (unvested portion of restricted stock grants) | ' | ||||||||
Vesting date | Number of restricted common stock outstanding (unvested) | ||||||||
31-Dec-14 | 2,269 | ||||||||
12-Jan-15 | 658 | ||||||||
31-Dec-15 | 1,103 | ||||||||
12-Jan-16 | 658 | ||||||||
12-Jan-17 | 660 | ||||||||
Total | 5,348 | ||||||||
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES (Tables) | 6 Months Ended | ||
Jun. 30, 2014 | |||
Commitments and Contingencies Disclosure [Abstract] | ' | ||
Schedule of minimum annual lease payments | ' | ||
Year Ending December 31, | Amount | ||
2014 (excluding the six months ended June 30, 2014) | $ | 198,141 | |
2015 | 372,935 | ||
2016 | 279,340 | ||
2017 | 180,990 | ||
2018 | 30,165 | ||
Total | $ | 1,061,571 |
OPERATING_SEGMENTS_Tables
OPERATING SEGMENTS (Tables) | 6 Months Ended | ||||||||||
Jun. 30, 2014 | |||||||||||
Segment Reporting [Abstract] | ' | ||||||||||
Schedule of operations of the Company's reportable segments | ' | ||||||||||
For the six month period ended June 30, 2014 | |||||||||||
MHDD Retrofit | Air Testing | Unallocated | Adjustments and eliminations | Consolidated | |||||||
Revenue from external customers | $ | 14,689,270 | $ | 346,275 | $ | - | $ | - | $ | 15,035,545 | |
Intersegment revenue | $ | - | $ | 428,713 | $ | - | $ | (428,713) (1) | $ | - | |
Net income / (loss) | $ | 4,522,942 | $ | -69,649 | $ | -2,701,553 | $ | - | $ | 1,751,740 | |
Property, plant and equipment additions | $ | 58,276 | $ | 395,283 | $ | - | $ | - | $ | 453,559 | |
Equipment under construction additions / (reductions) | $ | 262,016 | $ | -378,191 | $ | - | $ | - | $ | -116,175 | |
Interest expense (Notes 7 and 8) | $ | - | $ | 5,843 | $ | 258,725 | $ | - | $ | 264,568 | |
Depreciation | $ | 92,028 | $ | 116,528 | $ | - | $ | - | $ | 208,556 | |
For the three month period ended June 30, 2014 | |||||||||||
MHDD Retrofit | Air Testing | Unallocated | Adjustments and eliminations | Consolidated | |||||||
Revenue from external customers | $ | 7,790,645 | $ | 249,316 | $ | - | $ | - | $ | 8,039,961 | |
Intersegment revenue | $ | - | $ | 176,453 | $ | - | $ | 176,453 (1) | $ | - | |
Net income / (loss) | $ | 2,001,343 | $ | 6,017 | $ | -676,842 | $ | - | $ | 1,330,518 | |
Property, plant and equipment reductions | $ | -60,289 | $ | -20,449 | $ | - | $ | - | $ | -80,738 | |
Equipment under construction additions / (reductions) | $ | 264,086 | $ | -21,711 | $ | - | $ | - | $ | 242,375 | |
Interest expense (Notes 7 and 8) | $ | - | $ | 2,855 | $ | 130,203 | $ | - | $ | 133,058 | |
Depreciation | $ | 38,346 | $ | 52,594 | $ | - | $ | - | $ | 90,940 | |
As of June 30, 2014 | |||||||||||
MHDD Retrofit | Air Testing | Unallocated | Adjustments and eliminations | Consolidated | |||||||
Total assets | $ | 8,847,170 | $ | 1,760,127 | $ | 5,709,808 | $ | - | $ | 16,317,105 | |
Equipment under construction | $ | 47,030 | $ | 267,817 | $ | - | $ | - | $ | 314,847 | |
Property, plant and equipment | $ | 503,621 | $ | 1,334,563 | $ | - | $ | - | $ | 1,838,184 | |
Accounts receivable | $ | 2,983,494 | $ | 113,530 | $ | - | $ | - | $ | 3,097,024 | |
Inventories | $ | 3,844,110 | $ | - | $ | - | $ | - | $ | 3,844,110 | |
For the six month periods ended June 30, 2013 | |||||||||||
MHDD Retrofit | Air Testing | Unallocated | Adjustments and eliminations | Consolidated | |||||||
Revenue from external customers | $ | 4,344,324 | $ | 401,021 | $ | - | $ | - | $ | 4,745,345 | |
Intersegment revenue | $ | - | $ | 76,666 | $ | - | $ | (76,666) (1) | $ | - | |
Net loss | $ | -1,770,395 | $ | -483,936 | $ | -2,328,121 | $ | - | $ | -4,582,452 | |
Property, plant and equipment additions | $ | 272,495 | $ | 3,192 | $ | - | $ | - | $ | 275,687 | |
Equipment under construction additions | $ | - | $ | 55,118 | $ | - | $ | - | $ | 55,118 | |
Interest expense (Notes 7 and 8) | $ | - | $ | 6,884 | $ | 72,311 | $ | - | $ | 79,195 | |
Depreciation | $ | 47,715 | $ | 291,304 | $ | - | $ | - | $ | 339,019 | |
For the three month periods ended June 30, 2013 | |||||||||||
MHDD Retrofit | Air Testing | Unallocated | Adjustments and eliminations | Consolidated | |||||||
Revenue from external customers | $ | 3,105,196 | $ | 184,307 | $ | - | $ | - | $ | 3,289,503 | |
Intersegment revenue | $ | - | $ | 53,653 | $ | - | $ | 53,653 (1) | $ | - | |
Net loss | $ | -1,592,915 | $ | -287,573 | $ | -2,071,278 | $ | - | $ | -3,951,766 | |
Property, plant and equipment additions | $ | 272,495 | $ | -38,799 | $ | - | $ | - | $ | 233,696 | |
Equipment under construction additions | $ | - | $ | 76,606 | $ | - | $ | - | $ | 76,606 | |
Interest expense (Notes 7 and 8) | $ | - | $ | 3,378 | $ | 68,811 | $ | - | $ | 72,189 | |
Depreciation | $ | 23,575 | $ | 144,844 | $ | - | $ | - | $ | 168,419 | |
As of December 31, 2013 | |||||||||||
MHDD Retrofit | Air Testing | Unallocated | Adjustments and eliminations | Consolidated | |||||||
Total assets | $ | 7,202,958 | $ | 1,557,127 | $ | 3,654,927 | $ | - | $ | 12,415,012 | |
Equipment under construction | $ | 15,030 | $ | 415,992 | $ | - | $ | - | $ | 431,022 | |
Property, plant and equipment | $ | 546,086 | $ | 1,028,095 | $ | - | $ | - | $ | 1,574,181 | |
Accounts receivable | $ | 1,833,950 | $ | 54,561 | $ | - | $ | - | $ | 1,888,511 | |
Inventories | $ | 3,693,367 | $ | - | $ | - | $ | - | $ | 3,693,367 | |
(1) These amounts represent revenues earned from services performed for the MHDD Retrofit segment and its profits, they are eliminated upon consolidation. |
EARNINGS_LOSS_PER_SHARE_Tables
EARNINGS / (LOSS) PER SHARE (Tables) | 6 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Earnings Per Share [Abstract] | ' | |||||||
Schedule of EARNINGS / (LOSS) PER SHARE | ' | |||||||
SIX MONTH PERIOD ENDED JUNE 30, | THREE MONTH PERIOD ENDED JUNE 30, | |||||||
2014 | 2013 | 2014 | 2013 | |||||
Numerator | ||||||||
Net income / (loss) and comprehensive income / (loss) | $1,751,740 | ($4,582,452) | $1,330,518 | ($3,951,766) | ||||
Denominator | ||||||||
Weighted average number of shares outstanding | $128,323 | $113,304 | $130,875 | $113,845 | ||||
Restricted stock grants | 5,348 | - | 5,348 | - | ||||
Contingent restricted stock grants (Note 13) | 2,350 | - | 2,350 | - | ||||
$136,021 | $113,304 | $138,573 | $113,845 |
NATURE_OF_BUSINESS_Detail_Text
NATURE OF BUSINESS (Detail Textuals) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2013 | Dec. 31, 2012 |
Nature Of Business and Going Concern [Abstract] | ' | ' | ' | ' |
Accumulated deficit | ($51,914,925) | ($53,666,665) | ' | ' |
Cash and cash equivalents | $6,565,778 | $4,077,096 | $2,550,537 | $253,998 |
SIGNIFICANT_ACCOUNTING_POLICIE2
SIGNIFICANT ACCOUNTING POLICIES (Detail Textuals) (USD $) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | |
Segment | |||||
Accounting Policies [Abstract] | ' | ' | ' | ' | ' |
Allowance for doubtful accounts receivable | $283,682 | ' | $283,682 | ' | $250,862 |
Estimated useful lives of Property, plant and equipment | ' | ' | '5 to 7 years | ' | ' |
Depreciation methods | ' | ' | 'Straight-line basis | ' | ' |
Revenue percentage of air testing and environmental certification services | ' | ' | 2.30% | 8.50% | ' |
Shipping and handling costs | 124,777 | 27,417 | 260,894 | 48,277 | ' |
Shipping and handling revenue | 7,755 | 25,944 | 49,620 | 40,377 | ' |
Research and development expense, net of grant revenues | 176,329 | 158,871 | 353,066 | 240,611 | ' |
Gross research and development expense, excluding any offsetting grant revenues | 176,329 | 158,871 | 353,066 | 281,557 | ' |
Grant received for research and development | $0 | $0 | $0 | $40,946 | ' |
Estimated warranty cost charged against percentage of revenue | 2.00% | ' | 2.00% | ' | ' |
Estimated original percentage of revenue for warranty cost charged for off road products | 4.00% | ' | 4.00% | ' | ' |
Estimated warranty cost charged against percentage of revenue | 2.00% | ' | 2.00% | ' | ' |
Number of reportable segments | ' | ' | 2 | ' | ' |
INVENTORY_Details
INVENTORY (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Inventory Disclosure [Abstract] | ' | ' |
Raw materials | $2,210,841 | $1,964,412 |
Work-in-process | 1,854,626 | 1,950,642 |
Finished goods | ' | 6,868 |
Parts | ' | 17,954 |
Inventory gross | 4,065,467 | 3,939,876 |
Less: reserve for inventory obsolescence | -221,357 | -246,509 |
Total | $3,844,110 | $3,693,367 |
INVENTORY_Detail_Textuals
INVENTORY (Detail Textuals) (USD $) | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Jun. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | |
Inventory Disclosure [Abstract] | ' | ' | ' |
Inventory write-downs (in dollars) | $0 | $25,152 | $230,002 |
Recovery of scrap inventory | 11,719 | 14,769 | 252,352 |
Net gain on disposal of scrap inventory | ' | ' | $22,350 |
PROPERTY_PLANT_AND_EQUIPMENT_C
PROPERTY, PLANT AND EQUIPMENT - Components of property, plant and equipment (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Property, Plant and Equipment [Line Items] | ' | ' |
Property plant and equipment, gross | $5,340,907 | $4,868,349 |
Less: accumulated depreciation | -3,502,723 | -3,294,168 |
Property plant and equipment, net | 1,838,184 | 1,574,181 |
Plant, machinery and equipment | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property plant and equipment, gross | 4,016,643 | 3,583,451 |
Office equipment | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property plant and equipment, gross | 81,295 | 186,916 |
Furniture and fixtures | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property plant and equipment, gross | 128,326 | 1,063 |
Vehicles | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property plant and equipment, gross | 34,762 | 17,038 |
Leasehold improvements | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property plant and equipment, gross | $1,079,881 | $1,079,881 |
PROPERTY_PLANT_AND_EQUIPMENT_D
PROPERTY, PLANT AND EQUIPMENT - Depreciation expense recognized in the unaudited consolidated condensed statements of operations and comprehensive loss (Details 1) (USD $) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Property, Plant and Equipment [Line Items] | ' | ' | ' | ' |
Total depreciation expense | $90,940 | $168,419 | $208,556 | $339,019 |
Cost of revenue | ' | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' | ' |
Total depreciation expense | 88,578 | 110,961 | 179,575 | 223,400 |
Operating expenses | ' | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' | ' |
Total depreciation expense | 2,362 | 57,458 | 28,981 | 112,578 |
Research and development costs | ' | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' | ' |
Total depreciation expense | ' | ' | ' | $3,041 |
PROPERTY_PLANT_AND_EQUIPMENT_D1
PROPERTY, PLANT AND EQUIPMENT (Detail Textuals) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Property, Plant and Equipment [Abstract] | ' | ' |
Equipment under construction | $314,847 | $431,022 |
LOAN_PAYABLE_Loan_maturities_b
LOAN PAYABLE - Loan maturities based on outstanding principal (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Debt Disclosure [Abstract] | ' | ' |
2014 (excluding the six months ended June 30, 2014) | $35,777 | ' |
2015 | 73,182 | ' |
2016 | 75,408 | ' |
2017 | 77,702 | ' |
2018 | 80,065 | ' |
Thereafter | 26,828 | ' |
Total | $368,962 | $404,207 |
LOAN_PAYABLE_Detail_Textuals
LOAN PAYABLE (Detail Textuals) (USD $) | 3 Months Ended | 6 Months Ended | 1 Months Ended | ||||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | Apr. 25, 2012 | Nov. 13, 2012 | |
Machinery and Equipment Loan Fund ("MELF Facility") | Machinery and Equipment Loan Fund ("MELF Facility") | ||||||
Commonwealth of Pennsylvania | Commonwealth of Pennsylvania | ||||||
Line of Credit Facility [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Maximum borrowing capacity | ' | ' | ' | ' | ' | $500,000 | ' |
Amount of draw down under MELF facility | ' | ' | ' | ' | ' | 280,787 | 219,213 |
MELF Facility initial interest | ' | ' | ' | ' | ' | 3.00% | ' |
Frequency of payments | ' | ' | ' | ' | ' | 'Monthly | ' |
Term of full repayment | ' | ' | ' | ' | ' | 'Monthly payments and full repayment of the MELF Facility on or before the first day of the eighty fifth (85) calendar month following the Closing Date. | ' |
Increase in interest percentage | ' | ' | ' | ' | ' | 12.50% | ' |
Loans payable, total | 368,962 | ' | 368,962 | ' | 404,207 | ' | ' |
Interest amount paid | 2,855 | 3,378 | 5,843 | 6,884 | ' | ' | ' |
Principal amount repaid | 17,689 | 17,116 | 35,245 | 34,204 | ' | ' | ' |
Loan repayable in twelve months | 70,666 | ' | 70,666 | ' | 71,022 | ' | ' |
Loan repayable after one year | $298,296 | ' | $298,296 | ' | $333,185 | ' | ' |
SENIOR_SECURED_CONVERTIBLE_PRO2
SENIOR SECURED CONVERTIBLE PROMISSORY NOTES (Detail) (USD $) | 3 Months Ended | 6 Months Ended | 3 Months Ended | 12 Months Ended | 6 Months Ended | |||||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Jun. 30, 2014 | |
Senior Secured Convertible Promissory Note | Senior Secured Convertible Promissory Note | Senior Secured Convertible Promissory Note | Senior Secured Convertible Promissory Note | Senior Secured Convertible Promissory Note | Senior Secured Convertible Promissory Note | |||||
Face value of March 22, 2013 notes payable | Face value of April 23, 2013 notes payable | Face value of June 27, 2013 notes payable | Face value of May 23, 2014 notes payable | |||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total face value of promissory notes payable | ' | ' | ' | ' | ' | $5,000,000 | $1,400,000 | $1,600,000 | $2,000,000 | $122,486 |
Discount on promissory notes payable | ' | ' | ' | ' | ' | -3,079,102 | ' | ' | ' | -56,639 |
Accretion of discount on promissory notes payable | 104,792 | 44,381 | 199,566 | 46,437 | 94,774 | 225,882 | ' | ' | ' | 104,792 |
Total promissory notes payable | ' | ' | ' | ' | $2,241,554 | $2,146,780 | ' | ' | ' | $2,412,193 |
SENIOR_SECURED_CONVERTIBLE_PRO3
SENIOR SECURED CONVERTIBLE PROMISSORY NOTES (Detail Textuals) (USD $) | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | 6 Months Ended | |||||||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Mar. 31, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Jun. 30, 2014 | |
Senior Secured Convertible Promissory Note | Senior Secured Convertible Promissory Note | Senior Secured Convertible Promissory Note | Senior Secured Convertible Promissory Note | Senior Secured Convertible Promissory Note | Senior Secured Convertible Promissory Note | Senior Secured Convertible Promissory Note | Senior Secured Convertible Promissory Note | Senior Secured Convertible Promissory Note | |||||
Accrued Liabilities | Accrued Liabilities | Face value of March 22, 2013 notes payable | Face value of April 23, 2013 notes payable | Face value of June 27, 2013 notes payable | Face value of May 23, 2014 notes payable | ||||||||
Investor | |||||||||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt instrument, face amount | ' | ' | ' | ' | ' | ' | $5,000,000 | ' | ' | $1,400,000 | $1,600,000 | $2,000,000 | $122,486 |
Number of accredited investor | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4 | ' | ' | ' |
Interest rate of note | ' | ' | ' | ' | ' | 10.00% | ' | ' | ' | 9.60% | 17.30% | 38.30% | 16.50% |
Conversion price | ' | ' | ' | ' | ' | $80 | ' | ' | ' | ' | ' | ' | ' |
Accretion of discount on promissory notes payable | 104,792 | 44,381 | 199,566 | 46,437 | 94,774 | ' | 225,882 | ' | ' | ' | ' | ' | 104,792 |
Interest expense on the notes payable | 130,203 | 68,811 | 258,725 | 72,311 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of shares issued as interest payment | ' | ' | ' | ' | ' | 8,000 | ' | ' | ' | ' | ' | ' | 5,126 |
Interest accrued | ' | ' | ' | ' | ' | 200,000 | ' | 130,203 | 127,777 | ' | ' | ' | 256,300 |
Conversion price per share for interest payment | ' | ' | ' | ' | ' | $25 | ' | ' | ' | ' | ' | ' | $50 |
Notes registration amount | ' | ' | ' | ' | ' | 4,596,929 | ' | ' | ' | ' | ' | ' | ' |
Common stock issuable upon conversion of the Notes | ' | ' | ' | ' | ' | 152,899 | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Unamortized Discount | ' | ' | ' | ' | ' | ' | $3,079,102 | ' | ' | ' | ' | ' | $56,639 |
CONVERSION_OPTION_DERIVATIVE_L2
CONVERSION OPTION DERIVATIVE LIABILITY (Details) (Conversion Option Derivative Liability, USD $) | 1 Months Ended | 6 Months Ended | 12 Months Ended | |||
23-May-14 | Jun. 27, 2013 | Apr. 23, 2013 | Mar. 22, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | |
Conversion Option Derivative Liability | ' | ' | ' | ' | ' | ' |
Derivative [Line Items] | ' | ' | ' | ' | ' | ' |
Closing share price | $50 | $80 | $54 | $40 | $60 | $26 |
Conversion price | $80 | $80 | $80 | $80 | $80 | $80 |
Risk free rate | 1.17% | 1.38% | 0.71% | 0.80% | 1.25% | 1.75% |
Expected volatility | 125.00% | 114.00% | 126.00% | 110.00% | 129.00% | 117.00% |
Dividend yield | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
Expected life | '3 years 11 months 1 day | '4 years 9 months | '4 years 11 months 1 day | '5 years | '3 years 9 months | '4 years 3 months |
CONVERSION_OPTION_DERIVATIVE_L3
CONVERSION OPTION DERIVATIVE LIABILITY (Details 1) (USD $) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||
23-May-14 | Jun. 27, 2013 | Apr. 23, 2013 | Mar. 22, 2013 | Jun. 30, 2014 | Mar. 31, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | |
Derivative [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Beginning balance: Conversion option derivative liability | ' | ' | ' | ' | ' | $1,131,745 | ' | $1,131,745 | ' | ' |
(Gain) Loss on change in fair value of conversion option derivative liability | ' | ' | ' | ' | 547,653 | ' | 1,330,893 | 1,733,168 | 1,038,323 | ' |
Ending balance: Conversion option derivative liability | ' | ' | ' | ' | 2,921,551 | ' | ' | 2,921,551 | ' | ' |
Conversion Option Derivative Liability | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Derivative [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Beginning balance: Conversion option derivative liability | ' | ' | ' | ' | 2,317,260 | 1,131,745 | ' | 1,131,745 | ' | ' |
Origination of conversion option derivative liability | 56,639 | 1,646,723 | 905,569 | 526,810 | ' | ' | ' | ' | ' | ' |
(Gain) Loss on change in fair value of conversion option derivative liability | ' | ' | ' | ' | 547,652 | 1,185,515 | -1,330,893 | -1,733,168 | -1,038,323 | -1,947,357 |
Ending balance: Conversion option derivative liability | ' | ' | ' | ' | $2,921,551 | $2,317,260 | ' | $2,921,551 | ' | $1,131,745 |
CONVERSION_OPTION_DERIVATIVE_L4
CONVERSION OPTION DERIVATIVE LIABILITY (Detail Textuals) (Senior Secured Convertible Promissory Note, USD $) | Jun. 30, 2014 |
Senior Secured Convertible Promissory Note | ' |
Conversion Option Derivative Liability [Line Items] | ' |
Conversion price | $80 |
CONVERSION_OPTION_DERIVATIVE_L5
CONVERSION OPTION DERIVATIVE LIABILITY (Detail Textuals 1) (USD $) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2014 | Mar. 31, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | |
Derivative [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Fair value of the conversion option derivative liability | $2,921,551 | ' | ' | $2,921,551 | ' | $1,131,745 | ' |
Change in fair value of conversion option derivative liability | -547,653 | ' | -1,330,893 | -1,733,168 | -1,038,323 | ' | ' |
Conversion Option Derivative Liability | ' | ' | ' | ' | ' | ' | ' |
Derivative [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Fair value of the conversion option derivative liability | 2,921,551 | 2,317,260 | ' | 2,921,551 | ' | 1,131,745 | ' |
Change in fair value of conversion option derivative liability | ($547,652) | ($1,185,515) | $1,330,893 | $1,733,168 | $1,038,323 | $1,947,357 | ' |
INCOME_TAXES_Detail_Textuals
INCOME TAXES (Detail Textuals) (USD $) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Schedule Of Components Of Income Tax Expense (Benefit) [Line Items] | ' | ' | ' | ' |
Income tax expense | $112,190 | $0 | $112,190 | $0 |
Estimated annualized effective tax rate | ' | ' | 6.00% | 0.00% |
STOCK_OPTIONS_AND_RESTRICTED_S2
STOCK OPTIONS AND RESTRICTED STOCK PLAN - Summary of stock-based compensation consists of stock options and restricted stock issued by company (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ' | ' | ' |
Stock options | ' | ' | ' | $20,708 |
Restricted stock grants vested | 28,582 | ' | 74,272 | 152,245 |
Total stock-based compensation | $28,582 | ' | $74,272 | $172,953 |
STOCK_OPTIONS_AND_RESTRICTED_S3
STOCK OPTIONS AND RESTRICTED STOCK PLAN - Summary of option transactions, including those granted pursuant to terms of certain employment and other agreements (Details 1) (Stock options, USD $) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2014 | Dec. 31, 2013 | |
Stock options | ' | ' |
Stock Purchase Options | ' | ' |
Outstanding | 413 | 588 |
Expired | ' | -175 |
Outstanding | 413 | 413 |
Weighted Average Exercise Price | ' | ' |
Outstanding | $1,010 | $1,000 |
Expired | ' | ($957) |
Outstanding | $1,010 | $1,010 |
STOCK_OPTIONS_AND_RESTRICTED_S4
STOCK OPTIONS AND RESTRICTED STOCK PLAN - Outstanding options (Details 2) (Stock options, USD $) | Jun. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jun. 30, 2014 | Jun. 30, 2014 |
Exercise Price $1300 | Exercise Price $240 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' |
Number of Options | 413 | 413 | 588 | 300 | 113 |
Exercise Price | $1,010 | $1,010 | $1,000 | $1,300 | $240 |
Expiration Date | ' | ' | ' | 15-Apr-15 | 30-Jun-16 |
STOCK_OPTIONS_AND_RESTRICTED_S5
STOCK OPTIONS AND RESTRICTED STOCK PLAN - Summary number of restricted common stock (Details 3) (USD $) | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2014 | Dec. 31, 2013 | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ||
Stock option expense | $74,272 | ' | ||
Additional Paid-In Capital | ' | ' | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ||
Stock option expense | 17,108 | ' | ||
Shares To Be Issued | ' | ' | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ||
Stock option expense | 57,163 | ' | ||
Restricted stock | ' | ' | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ||
Number of restricted common stock issued | 658 | 6,335 | ||
Restricted stock | Additional Paid-In Capital | ' | ' | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ||
Stock option expense | 17,108 | 292,698 | ||
Restricted stock | Shares To Be Issued | ' | ' | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ||
Vested but not yet issued | 57,163 | [1] | ' | |
Stock option expense | 57,163 | ' | ||
Restricted stock | February 28, 2013 | ' | ' | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ||
Number of restricted common stock issued | ' | 2,057 | [2] | |
Restricted stock | February 28, 2013 | Additional Paid-In Capital | ' | ' | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ||
Stock option expense | ' | 152,245 | [2] | |
Restricted stock | February 28, 2013 | Shares To Be Issued | ' | ' | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ||
Stock option expense | ' | ' | [2] | |
Restricted stock | December 31, 2013 | ' | ' | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ||
Number of restricted common stock issued | ' | 3,620 | [3] | |
Restricted stock | December 31, 2013 | Additional Paid-In Capital | ' | ' | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ||
Stock option expense | ' | 123,345 | [3] | |
Restricted stock | December 31, 2013 | Shares To Be Issued | ' | ' | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ||
Stock option expense | ' | ' | [3] | |
Restricted stock | December 31, 2013 | ' | ' | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ||
Number of restricted common stock issued | ' | 658 | ||
Restricted stock | December 31, 2013 | Additional Paid-In Capital | ' | ' | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ||
Stock option expense | ' | 17,108 | [4] | |
Restricted stock | December 31, 2013 | Shares To Be Issued | ' | ' | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ||
Stock option expense | ' | ' | [4] | |
Restricted stock | June 30, 2014 | ' | ' | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ||
Number of restricted common stock issued | 658 | ' | ||
Restricted stock | June 30, 2014 | Additional Paid-In Capital | ' | ' | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ||
Stock option expense | 17,108 | [4] | ' | |
Restricted stock | June 30, 2014 | Shares To Be Issued | ' | ' | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ||
Stock option expense | ' | [4] | ' | |
[1] | As of June 30, 2014, $57,163 (December 31, 2013 - $0) has been recorded as stock-based compensation under shares to be issued related to the vesting of restricted stock grants in the consolidated condensed statements of changes in stockholders' equity. | |||
[2] | Effective December 10, 2012, the Board, on the recommendation of its compensation committee, approved a one-time grant of 4,114 shares of restricted common stock from treasury to a member of the Company's Board for services rendered as Executive Chairman, 2,057 shares of which were issued upon the date of grant. The shares of common stock were issued from treasury not under the Company's 2010 stock incentive plan. Effective February 28, 2013, the Company issued 2,057 shares of restricted common stock valued at $152,245 from treasury, in accordance with the grant. | |||
[3] | Effective December 31, 2013, the Company issued 3,620 shares of restricted common stock valued at $123,345 to seven board members under the 2013 Stock Plan as per the approved board compensation structure. | |||
[4] | Effective December 31, 2013, the Company issued 658 shares of restricted common stock valued at $17,108 to two executive officers under the 2013 Stock Plan as per their approved executive compensation arrangements. Effective January 12, 2012, the Board, on the recommendation of its compensation committee, approved a management incentive plan which includes a 10% restricted stock pool for management. Key participants of this plan will be executive officers. Secondary participants will include other management and certain other employees. The program provides for 5 year vesting. The equity grants are effective subject to the execution of the requisite grant agreements. Stock-based compensation expense will be recorded as of the vesting terms of the grants. Effective June 30, 2014, the Company issued 658 shares of restricted common stock valued at $17,108 to two executive officers under the 2013 Stock Plan as per their approved executive compensation arrangements. |
STOCK_OPTIONS_AND_RESTRICTED_S6
STOCK OPTIONS AND RESTRICTED STOCK PLAN - Outstanding equity awards (unvested portion of restricted stock grants) (Details 4) (Restricted stock) | Jun. 30, 2014 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Total number of restricted common stock outstanding (unvested) | 5,348 |
31-Dec-14 | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Total number of restricted common stock outstanding (unvested) | 2,269 |
12-Jan-15 | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Total number of restricted common stock outstanding (unvested) | 658 |
31-Dec-15 | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Total number of restricted common stock outstanding (unvested) | 1,103 |
12-Jan-16 | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Total number of restricted common stock outstanding (unvested) | 658 |
12-Jan-17 | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Total number of restricted common stock outstanding (unvested) | 660 |
STOCK_OPTIONS_AND_RESTRICTED_S7
STOCK OPTIONS AND RESTRICTED STOCK PLAN (Details Textuals) (USD $) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' |
Restricted stock grants vested | $28,582 | ' | $74,272 | $152,245 | ' |
Shares to be issued | ' | ' | 74,272 | ' | ' |
Stock options | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' |
Outstanding options- weighted average remaining life | ' | ' | '13 months | ' | '19 months |
Stock-based compensation expenses | 0 | 0 | 0 | 20,708 | ' |
Options or Stock Appreciation Rights | Stock Incentive Plan 2013 | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' |
Maximum shares of common stock available for grants | 20,000 | ' | 20,000 | ' | ' |
Maximum number of shares of common stock may be granted per individual | 2,500 | ' | 2,500 | ' | ' |
Restricted stock | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' |
Restricted stock grants vested | 28,582 | 0 | 74,272 | 152,245 | ' |
Restricted stock | Executive Chairman | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' |
Restricted common stock shares issued from treasury shares (in shares) | ' | ' | 4,114 | ' | ' |
Restricted common stock value issued from treasury shares | ' | ' | $152,245 | ' | ' |
Restricted stock | February 28, 2013 | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' |
Restricted common stock shares issued from treasury shares (in shares) | ' | ' | 2,057 | ' | ' |
Restricted stock | December 10, 2012 | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' |
Restricted common stock shares issued from treasury shares (in shares) | ' | ' | 2,057 | ' | ' |
STOCK_OPTIONS_AND_RESTRICTED_S8
STOCK OPTIONS AND RESTRICTED STOCK PLAN (Details Textuals 1) (Restricted stock, USD $) | 6 Months Ended |
Jun. 30, 2014 | |
12-Jan-14 | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Number of shares of restricted common stock are fully vested | 658 |
Seven Board Members | Stock Incentive Plan 2013 | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Number of board members | 7 |
Number of restricted shares of common stock issued for services | 3,620 |
Shares issued related to service as a board member | 123,345 |
STOCK_OPTIONS_AND_RESTRICTED_S9
STOCK OPTIONS AND RESTRICTED STOCK PLAN (Details Textuals 2) (USD $) | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | 6 Months Ended | 12 Months Ended | ||||||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2013 | |
Restricted stock | Restricted stock | Restricted stock | Restricted stock | Restricted stock | Restricted stock | Stock Incentive Plan 2013 | Stock Incentive Plan 2013 | Management Incentive Plan | |||||
Shares To Be Issued | Shares To Be Issued | Restricted stock | Restricted stock | Restricted stock | |||||||||
Executive Officer | Executive Officer | Executive Officer | |||||||||||
Officer | Officer | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of restricted common stock shares issued (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 658 | 658 | ' |
Value of restricted common stock shares issued | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $17,108 | $17,108 | ' |
Number of executive officers | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2 | 2 | ' |
Percentage of restricted stock pool for management | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10.00% |
Vesting period of plan | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '5 years |
Restricted stock grants vested | $28,582 | ' | $74,272 | $152,245 | $28,582 | $0 | $74,272 | $152,245 | $57,163 | $0 | ' | ' | ' |
RELATED_PARTY_TRANSACTIONS_AND1
RELATED PARTY TRANSACTIONS AND BALANCES (Details Textuals) (USD $) | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||
Aug. 01, 2013 | Jul. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | |
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Accrued liabilities | ' | ' | $927,252 | ' | $927,252 | ' | $1,007,920 |
Orchard Capital Corporation ("Orchard") | Services Agreement | ' | ' | ' | ' | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Compensation cost | 430,000 | 300,000 | ' | ' | ' | ' | ' |
Management fees | ' | ' | 107,500 | 75,000 | 215,000 | 150,000 | ' |
Accrued liabilities | ' | ' | $107,500 | ' | $107,500 | ' | $107,500 |
RELATED_PARTY_TRANSACTIONS_AND2
RELATED PARTY TRANSACTIONS AND BALANCES (Detail Textuals 1) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Free land Venture Resources Inc | Free land Venture Resources Inc | Free land Venture Resources Inc | Free land Venture Resources Inc | Bay City Transfer Agency Registrar Inc | Bay City Transfer Agency Registrar Inc | Bay City Transfer Agency Registrar Inc | Bay City Transfer Agency Registrar Inc | Freeland Venture Resources Inc And Bay City Transfer Agency Registrar Inc | Freeland Venture Resources Inc And Bay City Transfer Agency Registrar Inc | Mr. Nitin Amersey | Mr. Nitin Amersey | Mr. Nitin Amersey | Mr. Nitin Amersey | |||
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount paid for services rendered | ' | ' | $2,370 | $7,880 | $13,950 | $12,200 | $12,397 | $715 | $28,576 | $45,829 | ' | ' | $9,000 | $7,500 | $18,000 | $15,000 |
Accounts payable (Notes 12 and 16) | $1,337,081 | $1,656,379 | ' | ' | ' | ' | ' | ' | ' | ' | $0 | $1,000 | ' | ' | ' | ' |
RELATED_PARTY_TRANSACTIONS_AND3
RELATED PARTY TRANSACTIONS AND BALANCES (Details Textuals 2) (USD $) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Mr. John Suydam | ' | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' | ' |
Fees paid | $5,000 | $0 | $10,000 | $0 |
Mr. Zohar Loshitzer | ' | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' | ' |
Fees paid | 5,000 | 0 | 10,000 | 0 |
Mr. John Dunlap | ' | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' | ' |
Regulatory compliance fees paid | 960 | 8,683 | 4,353 | 20,996 |
Fees paid | $9,000 | $7,500 | $18,000 | $15,000 |
RELATED_PARTY_TRANSACTIONS_AND4
RELATED PARTY TRANSACTIONS AND BALANCES (Detail Textuals 3) (USD $) | 3 Months Ended | 6 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | 6 Months Ended | ||||||||||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | |
Officer's compensation and director's fees | Officer's compensation and director's fees | Unsecured subordinated promissory notes | Unsecured subordinated promissory notes | Unsecured subordinated promissory notes | Unsecured subordinated promissory notes | Unsecured subordinated promissory notes | Unsecured subordinated promissory notes | Mr. Mark Yung | Mr. Mark Yung | Mr. Mark Yung | Shareholders and Deemed Affiliates | ||||||
Accrued Liabilities | Accrued Liabilities | Restricted stock | Restricted stock | Restricted stock | Aggregate secured promissory note issued in March, April and June 2013 and May 23, 2014 | ||||||||||||
28-Feb-13 | 10-Dec-12 | ||||||||||||||||
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
One-time grant of shares of restricted common stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,114 | 2,057 | 2,057 | ' |
Fair value of each grant of restricted common shares | ' | ' | ' | ' | ' | $0 | $152,245 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unsecured convertible promissory notes issued | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,064,423 |
Interest expense on the notes payable | $130,203 | $68,811 | $258,725 | $72,311 | ' | ' | ' | $127,355 | $68,811 | $255,877 | $72,311 | $127,355 | $127,777 | ' | ' | ' | ' |
Interest payment in form of shares | 5,126 | ' | 5,126 | ' | 8,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
COMMITMENTS_AND_CONTINGENCIES_1
COMMITMENTS AND CONTINGENCIES (Details) (USD $) | Jun. 30, 2014 |
Commitments and Contingencies Disclosure [Abstract] | ' |
2014 (excluding the six months ended June 30, 2014) | $198,141 |
2015 | 372,935 |
2016 | 279,340 |
2017 | 180,990 |
2018 | 30,165 |
Total | $1,061,571 |
COMMITMENTS_AND_CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Detail Textuals) (USD $) | Jun. 30, 2014 | Nov. 24, 2004 | Sep. 24, 2012 | Jun. 07, 2013 | Oct. 01, 2013 |
Lease Agreement | Second Lease Amendment Agreement | Commercial Real Estate Lease | Commercial Real Estate Lease | ||
Esw America Inc | Nappen & Associates | Trepte Industrial Park, Ltd. | Marina Bay Crossing, LLC | ||
sqft | Esw America Inc | Esw Clean Tech Inc | Esw Clean Tech Inc | ||
sqft | sqft | ||||
Commitments And Contingencies [Line Items] | ' | ' | ' | ' | ' |
Area of property leased | ' | 40,220 | ' | 18,000 | 1,808 |
Term of lease | ' | ' | ' | '37 months | '12 months |
Extended period of lease | ' | ' | '5 years | '36 months | '12 months |
Base rent of lease per month | ' | ' | ' | $15,300 | ' |
Security deposit paid to lessor | ' | ' | ' | 155,600 | ' |
Lease rent per month | ' | ' | ' | ' | 2,182 |
Balance of the prepaid rent | $17,941 | ' | ' | ' | ' |
COMMITMENTS_AND_CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES (Detail Textuals 1) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 | Aug. 01, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Mar. 31, 2014 | Mar. 31, 2014 |
Executive Chairman | Cost of revenue | Cost of revenue | Cost of revenue | Cost of revenue | Warranties For Legacy Cleaire Products | Verification Procedures Relating To The Thermacat | |||
Commitments And Contingencies [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Estimated one time charges | ' | ' | ' | ' | ' | ' | ' | $1,000,000 | $504,900 |
Warranty provision | 1,841,263 | 1,723,769 | ' | ' | ' | ' | ' | ' | ' |
Total warranty, service, service travel and installation costs | ' | ' | ' | $162,663 | $1,562,722 | $290,500 | $1,581,834 | ' | ' |
Number of shares approved for issuance | ' | ' | 2,350 | ' | ' | ' | ' | ' | ' |
OPERATING_SEGMENTS_Details
OPERATING SEGMENTS (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||||||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ||||
Revenue from external customers | $8,039,961 | $3,289,503 | $15,035,545 | $4,745,345 | ||||
Net income / (loss) and comprehensive income / (loss) | 1,330,518 | -3,951,766 | 1,751,740 | -4,582,452 | ||||
Interest expense | 130,203 | 68,811 | 258,725 | 72,311 | ||||
Operating Segments | ' | ' | ' | ' | ||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ||||
Revenue from external customers | 8,039,961 | 3,289,503 | 15,035,545 | 4,745,345 | ||||
Intersegment revenue | ' | ' | ' | ' | ||||
Net income / (loss) and comprehensive income / (loss) | 1,330,518 | -3,951,766 | 1,751,740 | -4,582,452 | ||||
Property, plant and equipment additions | -80,738 | 233,696 | 453,559 | 275,687 | ||||
Equipment under construction reductions | 242,375 | -76,606 | -116,175 | 55,118 | ||||
Interest expense | 133,058 | 72,189 | 264,568 | 79,195 | ||||
Depreciation | 90,940 | 168,419 | 208,556 | 339,019 | ||||
Operating Segments | MHDD Retrofit | ' | ' | ' | ' | ||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ||||
Revenue from external customers | 7,790,645 | 3,105,196 | 14,689,270 | 4,344,324 | ||||
Intersegment revenue | ' | ' | ' | ' | ||||
Net income / (loss) and comprehensive income / (loss) | 2,001,343 | -1,592,915 | 4,522,942 | -1,770,395 | ||||
Property, plant and equipment additions | -60,289 | 272,495 | 58,276 | 272,495 | ||||
Equipment under construction reductions | 264,086 | ' | 262,016 | ' | ||||
Interest expense | ' | ' | ' | ' | ||||
Depreciation | 38,346 | 23,575 | 92,028 | 47,715 | ||||
Operating Segments | Air Testing | ' | ' | ' | ' | ||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ||||
Revenue from external customers | 249,316 | 184,307 | 346,275 | 401,021 | ||||
Intersegment revenue | 176,453 | 53,653 | 428,713 | 76,666 | ||||
Net income / (loss) and comprehensive income / (loss) | 6,017 | -287,573 | -69,649 | -483,936 | ||||
Property, plant and equipment additions | -20,449 | -38,799 | 395,283 | 3,192 | ||||
Equipment under construction reductions | -21,711 | -76,606 | -378,191 | 55,118 | ||||
Interest expense | 2,855 | 3,378 | 5,843 | 6,884 | ||||
Depreciation | 52,594 | 144,844 | 116,528 | 291,304 | ||||
Unallocated | ' | ' | ' | ' | ||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ||||
Revenue from external customers | ' | ' | ' | ' | ||||
Intersegment revenue | ' | ' | ' | ' | ||||
Net income / (loss) and comprehensive income / (loss) | -676,842 | -2,071,278 | -2,701,553 | -2,328,121 | ||||
Property, plant and equipment additions | ' | ' | ' | ' | ||||
Equipment under construction reductions | ' | ' | ' | ' | ||||
Interest expense | 130,203 | 68,811 | 258,725 | 72,311 | ||||
Depreciation | ' | ' | ' | ' | ||||
Adjustments and eliminations | ' | ' | ' | ' | ||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ||||
Revenue from external customers | ' | ' | ' | ' | ||||
Intersegment revenue | 176,453 | [1] | 53,653 | [1] | -428,713 | [1] | -76,666 | [1] |
Net income / (loss) and comprehensive income / (loss) | ' | ' | ' | ' | ||||
Property, plant and equipment additions | ' | ' | ' | ' | ||||
Equipment under construction reductions | ' | ' | ' | ' | ||||
Interest expense | ' | ' | ' | ' | ||||
Depreciation | ' | ' | ' | ' | ||||
[1] | These amounts represent revenues earned from services performed for the MHDD Retrofit segment and its profits, they are eliminated upon consolidation. |
OPERATING_SEGMENTS_Details_1
OPERATING SEGMENTS (Details 1) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Segment Reporting Information [Line Items] | ' | ' |
Total assets | $16,317,105 | $12,415,012 |
Equipment under construction | 314,847 | 431,022 |
Property, plant and equipment | 1,838,184 | 1,574,181 |
Accounts receivable | 3,097,024 | 1,888,511 |
Inventories | 3,844,110 | 3,693,367 |
Operating Segments | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Total assets | 16,317,105 | 12,415,012 |
Equipment under construction | 314,847 | 431,022 |
Property, plant and equipment | 1,838,184 | 1,574,181 |
Accounts receivable | 3,097,024 | 1,888,511 |
Inventories | 3,844,110 | 3,693,367 |
Operating Segments | MHDD Retrofit | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Total assets | 8,847,170 | 7,202,958 |
Equipment under construction | 47,030 | 15,030 |
Property, plant and equipment | 503,621 | 546,086 |
Accounts receivable | 2,983,494 | 1,833,950 |
Inventories | 3,844,110 | 3,693,367 |
Operating Segments | Air Testing | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Total assets | 1,760,127 | 1,557,127 |
Equipment under construction | 267,817 | 415,992 |
Property, plant and equipment | 1,334,563 | 1,028,095 |
Accounts receivable | 113,530 | 54,561 |
Inventories | ' | ' |
Unallocated | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Total assets | 5,709,808 | 3,654,927 |
Equipment under construction | ' | ' |
Property, plant and equipment | ' | ' |
Accounts receivable | ' | ' |
Inventories | ' | ' |
Adjustments and eliminations | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Total assets | ' | ' |
Equipment under construction | ' | ' |
Property, plant and equipment | ' | ' |
Accounts receivable | ' | ' |
Inventories | ' | ' |
OPERATING_SEGMENTS_Detail_Text
OPERATING SEGMENTS (Detail Textuals) | 3 Months Ended |
Jun. 30, 2013 | |
Segment | |
Segment Reporting [Abstract] | ' |
Number of operating segments | 2 |
EARNINGS_LOSS_PER_SHARE_Detail
EARNINGS / (LOSS) PER SHARE (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Numerator | ' | ' | ' | ' |
Net income / (loss) and comprehensive income / (loss) | $1,330,518 | ($3,951,766) | $1,751,740 | ($4,582,452) |
Denominator | ' | ' | ' | ' |
Weighted average number of shares outstanding | 130,875 | 113,845 | 128,323 | 113,304 |
Restricted stock grants | 5,348 | ' | 5,348 | ' |
Contingent restricted stock grants (Note 13) | 2,350 | ' | 2,350 | ' |
Diluted weighted average shares outstanding | 138,573 | 113,845 | 136,021 | 113,304 |
EARNINGS_LOSS_PER_SHARE_Detail1
EARNINGS / (LOSS) PER SHARE (Detail Textuals) (USD $) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Senior Secured Convertible Promissory Note | ' | ' | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' | ' |
Number of shares excluded from the computation of diluted loss per share | ' | ' | 62,500 | ' |
Conversion price | 80 | ' | 80 | ' |
Stock options | ' | ' | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' | ' |
Number of shares excluded from the computation of diluted loss per share | 413 | 538 | 413 | 538 |
RISK_MANAGEMENT_Detail_Textual
RISK MANAGEMENT (Detail Textuals) (USD $) | Jun. 30, 2014 |
United States | ' |
Cash and Cash Equivalents [Line Items] | ' |
Insured amount per depositor for each bank by the Federal Deposit Insurance Corporation | $250,000 |
Canada | ' |
Cash and Cash Equivalents [Line Items] | ' |
Insured amount per depositor for each bank by the Federal Deposit Insurance Corporation | $100,000 |
RISK_MANAGEMENT_Detail_Textual1
RISK MANAGEMENT (Detail Textuals 1) (Customer Concentration Risk) | 6 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Customer | Customer | |
Sales revenue | ' | ' |
Concentration Risk [Line Items] | ' | ' |
Concentration risk number of customers | 3 | 3 |
Sales revenue | Customer one | ' | ' |
Concentration Risk [Line Items] | ' | ' |
Concentration risk, percentage | 17.10% | 26.80% |
Sales revenue | Customer two | ' | ' |
Concentration Risk [Line Items] | ' | ' |
Concentration risk, percentage | 13.00% | 14.50% |
Sales revenue | Customer three | ' | ' |
Concentration Risk [Line Items] | ' | ' |
Concentration risk, percentage | 11.60% | 10.10% |
Accounts Receivable | ' | ' |
Concentration Risk [Line Items] | ' | ' |
Concentration risk number of customers | ' | 3 |
Accounts Receivable | Customer one | ' | ' |
Concentration Risk [Line Items] | ' | ' |
Concentration risk, percentage | 24.30% | 36.30% |
Accounts Receivable | Customer two | ' | ' |
Concentration Risk [Line Items] | ' | ' |
Concentration risk, percentage | 15.90% | 27.10% |
Accounts Receivable | Customer three | ' | ' |
Concentration Risk [Line Items] | ' | ' |
Concentration risk number of customers | 3 | ' |
Concentration risk, percentage | 12.70% | 6.10% |
RISK_MANAGEMENT_Detail_Textual2
RISK MANAGEMENT (Detail Textuals 2) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Supplier concentration risk | Supplier concentration risk | Supplier concentration risk | Supplier concentration risk | Supplier concentration risk | Supplier concentration risk | Supplier concentration risk | Supplier concentration risk | |||
Accounts payable | Accounts payable | Inventory | Inventory | Inventory | Inventory | Inventory | Inventory | |||
Two vendors | Two vendors | Vendor | Vendor | Vendor one | Vendor one | Vendor two | Vendor two | |||
Concentration Risk [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of vendors | ' | ' | ' | ' | 2 | 2 | ' | ' | ' | ' |
Concentration risk, percentage | ' | ' | ' | ' | ' | ' | 10.50% | 13.40% | 8.80% | 11.10% |
Accounts payable | $1,337,081 | $1,656,379 | $221,651 | $466,433 | ' | ' | ' | ' | ' | ' |