Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended |
Mar. 31, 2015 | |
Document and Entity Information | |
Entity Registrant Name | Blue Earth, Inc. |
Document Type | 10-Q |
Document Period End Date | 31-Mar-15 |
Amendment Flag | FALSE |
Entity Central Index Key | 1422109 |
Current Fiscal Year End Date | -19 |
Entity Common Stock, Shares Outstanding | 93,404,858 |
Entity Filer Category | Accelerated Filer |
Entity Current Reporting Status | Yes |
Entity Voluntary Filers | No |
Entity Well-known Seasoned Issuer | No |
Document Fiscal Year Focus | 2015 |
Document Fiscal Period Focus | Q1 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
CURRENT ASSETS | ||
Cash and cash equivalents | $6,303,094 | $2,967,408 |
Restricted cash | 632,258 | 632,102 |
Accounts receivable, net | 4,119,522 | 2,515,772 |
Costs and revenues in excess of billings | 552,930 | 3,967,207 |
Inventory, net | 718,275 | 569,888 |
Construction in progress | 71,128 | 68,212 |
Other receivables | 76,194 | 78,926 |
Prepaid expenses and deposits | 1,745,896 | 1,646,301 |
Total Current Assets | 14,219,297 | 12,445,816 |
PROPERTY AND EQUIPMENT, net | 64,038,057 | 56,982,778 |
OTHER ASSETS | ||
Deposits | 76,974 | 80,455 |
Natural gas futures | 2,259,995 | 2,426,266 |
Long term receivables | 1,417,901 | 1,587,548 |
Equity method investment | 9,525,841 | 9,353,402 |
Contracts and technology, net | 18,691,137 | 19,863,096 |
Total Other Assets | 31,971,848 | 33,310,767 |
TOTAL ASSETS | 110,229,202 | 102,739,361 |
CURRENT LIABILITIES | ||
Accounts payable | 4,512,801 | 4,071,164 |
Current portion of notes payable | 63,484 | 162,445 |
Related party payables | 1,333,147 | 1,333,147 |
Line of credit payable | 3,000,000 | |
Convertible note payable | 8,026,072 | |
Accrued expenses | 167,192 | 480,502 |
Payroll expenses payable | 326,652 | 217,359 |
Total Current Liabilities | 17,429,348 | 6,264,617 |
LONG TERM LIABILITIES | ||
Long term portion of notes payable | 61,477 | 66,387 |
Total Long Term Liabilities | 61,477 | 66,387 |
Total Liabilities | 17,490,825 | 6,331,004 |
Commitments and contingencies | ||
STOCKHOLDERS' EQUITY | ||
Preferred stock value | 400 | |
Common stock value | 93,405 | 94,259 |
Additional paid-in capital | 190,797,290 | 188,159,932 |
Accumulated deficit | -98,152,718 | -91,845,834 |
Total Stockholders' Equity | 92,738,377 | 96,408,357 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $110,229,202 | $102,739,361 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Balance Sheet | ||
Preferred stock, par value | $0.00 | $0.00 |
Preferred stock, shares authorized | 25,000,000 | 25,000,000 |
Preferred stock, shares issued | 400,000 | |
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 93,404,858 | 94,258,713 |
Common stock, shares outstanding | 93,404,858 | 94,258,713 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Income Statement | ||
REVENUES | $5,132,664 | $3,234,217 |
COST OF SALES | 3,976,307 | 1,788,309 |
GROSS PROFIT | 1,156,357 | 1,445,908 |
OPERATING EXPENSES | ||
Depreciation and amortization | 1,215,068 | 1,076,026 |
General and administrative | 6,422,527 | 5,832,933 |
Total Operating Expenses | 7,637,595 | 6,908,959 |
LOSS FROM OPERATIONS | -6,481,238 | -5,463,051 |
OTHER INCOME (EXPENSE) | ||
Other income | 940 | 940 |
Loss from equity investment | -227,560 | |
Interest expense | -430,520 | -235,584 |
Mark futures to market | -166,271 | |
Gain (loss) on sale of assets | 7,987 | 11,235 |
Gain on settlement of litigation | 989,778 | |
Total Other Income (Expense) | 174,354 | -223,409 |
LOSS BEFORE INCOME TAXES | -6,306,884 | -5,686,460 |
INCOME TAX EXPENSE | ||
NET LOSS | -6,306,884 | -5,686,460 |
PREFERRED DIVIDENDS | -392,888 | |
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS | ($6,306,884) | ($6,079,348) |
BASIC AND DILUTED LOSS PER SHARE | ($0.07) | ($0.09) |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING BASIC AND DILUTED | 94,311,979 | 61,928,226 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
OPERATING ACTIVITIES | ||
NET LOSS | ($6,306,884) | ($5,686,460) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock option and stock warrants issued for services | 1,385,338 | 1,189,727 |
Loss from equity investment | 227,560 | |
Impairment of inventory | 369,039 | |
Mark gas futures to market | 166,271 | |
Gain on settlement of litigation | -989,778 | |
Gain (loss) on sale of assets | -7,987 | -11,235 |
Stock issued for services | 320,653 | 670,542 |
Depreciation and amortization | 1,215,068 | 1,076,026 |
Amortization of debt discount | 279,254 | |
Changes in operating assets and liabilities: | ||
Accounts receivable and billings in excess | 1,980,174 | -731,331 |
Inventory | -148,387 | 35,498 |
Restricted cash | -156 | |
Construction in progress | -371,955 | 184,302 |
Prepaid expenses and deposits | -293,372 | 162,405 |
Accounts payable and accrued expenses | 237,621 | 406,480 |
Net Cash Used in Operating Activities | -1,937,541 | -2,704,046 |
INVESTING ACTIVITIES | ||
Collection of other receivables | 2,732 | |
Proceeds from sale of equipment | 7,987 | |
Purchase of equity method investment | 400,000 | |
Lending of other receivables | 887 | |
Purchase of property and equipment | 7,098,388 | 1,353,588 |
Net Cash Used in Investing Activities | -7,487,669 | -1,354,475 |
Net Cash Used in Discontinued Investing Activities | -17,882 | |
FINANCING ACTIVITIES | ||
Proceeds from warrants and options exercised | 100,857 | |
Cash received on stock subscriptions | 1,000,000 | |
Proceeds from line of credit, net | 2,911,700 | |
Proceeds from notes payable, net | 9,953,068 | |
Repayment of notes payable and line of credit | 103,872 | 438,710 |
Repayment of related party loans | 4,004 | |
Net Cash Provided by Financing Activities | 12,760,896 | 658,143 |
NET INCREASE (DECREASE) IN CASH | 3,335,686 | -3,418,260 |
CASH AT BEGINNING OF PERIOD | 2,967,408 | 8,403,731 |
CASH AT END OF PERIOD | 6,303,094 | 4,985,471 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | ||
Cash paid for Interest | 68,871 | 97,292 |
NON CASH FINANCING ACTIVITIES: | ||
Common stock issued for conversion of preferred stock | 333,128 | |
Common stock issued for settlement of litigation | 989,778 | |
Common stock issued for acquisition of subsidiary | 4,602,500 | |
Preferred stock issued as collateral for loan | 400 | |
Debt discount and conversion feature | $1,385,338 |
Condensed_Financial_Statements
Condensed Financial Statements | 3 Months Ended |
Mar. 31, 2015 | |
Notes | |
Condensed Financial Statements | NOTE 1 - CONDENSED FINANCIAL STATEMENTS |
The accompanying financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows at March 31, 2015 and 2014, and for all periods presented herein, have been made. | |
Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s December 31, 2014 audited financial statements. The results of operations for the periods ended March 31, 2015 and 2014 are not necessarily indicative of the operating results for the full year. |
Significant_Accounting_Policie
Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2015 | |
Notes | |
Significant Accounting Policies | NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES |
Inventory | |
Inventory is recorded at the lower of cost or market (net realizable value) using the average cost method. The inventory on hand as of March 31, 2015 consists of battery components, motors, controllers, miscellaneous refrigeration parts and raw gasket material at costs of $718,275. The inventory is valued net of an allowance of $6,188 as of March 31, 2015. The Company does not have any work in progress. | |
Use of Estimates | |
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. | |
Recent Accounting Pronouncements | |
The Company has evaluated recent accounting pronouncements and their adoption has not had, nor is expected to have a material impact on the Company’s financial position, or statements. |
Significant_Events
Significant Events | 3 Months Ended | ||
Mar. 31, 2015 | |||
Notes | |||
Significant Events | NOTE 3 - SIGNIFICANT EVENTS | ||
Settlement of Litigation | |||
The Company received 1,127,742 shares of its common stock in settlement of litigation valued at $0.922 per share. As part of the settlement the Company forgave a $50,000 note receivable resulting in a gain on settlement of litigation of $989,778. | |||
Common Stock Transactions | |||
During the three months ended March 31, 2015, the Company issued 73,887 common shares for services valued at $94,653. The Company also issued 200,000 common shares for debt issuance costs valued at $226,000. The Company cancelled the 1,127,742 shares of its common stock it received in settlement of litigation. | |||
Credit Line Payable | |||
During the three months ended March 31, 2015, the Company borrowed $3,000,000 on the line of credit. The line of credit is for up to $4,000,000 subject to approval of the use of proceeds by the lender. The line of credit accrues interest at 12% per annum and is secured by one of the Company’s CHP projects and one solar project. The Company received net proceeds of $2,911,700 after closing costs. The Company has issued 400,000 shares of Class D convertible preferred stock as tertiary collateral for the line of credit. The $88,300 of fees withheld from the proceeds of the line of credit are included in prepaid expenses and are being amortized over the term of the line of credit. | |||
Related Party Notes Payable | |||
The related party notes payable, totaling $1,333,147, are due on demand, accrue interest at 12% per annum and are unsecured. | |||
CHP Plant Energized | |||
On March 30, 2015 the Company energized its initial combined heat and power (“CHP”) energy plant at a poultry processing facility in Sumter, South Carolina. The Company owns and operates the energy plant which provides combined heat and power (CHP) solutions. Electricity is generated and the thermal heat from the generator is captured and utilized for processes in the poultry facility, lowering energy costs, reducing greenhouse gas emissions and improving energy efficiency. | |||
Convertible Note Payable | |||
During the three months ended March 31, 2015, the Company borrowed $10,000,000 on a convertible note payable. The note payable is convertible to shares of the Company’s common stock at $1 per share. The convertible note payable accrues interest at 12% per annum and is due on September 10, 2015. The convertible note payable is secured by one of the Company’s CHP projects and the Company’s assets. The Company received net proceeds of $9,953,068 after closing costs. The $46,932 in legal fees withheld from the loan proceeds are included in prepaid expenses and are being amortized over the 6 month term of the convertible note payable. | |||
The lender received 200,000 shares of common stock as consideration for making the loan valued at $226,000. The lender also received 2,000,000 warrants to purchase shares of the Company’s common stock at $1.00 per share. The value of the warrants measured by The Company was $1,321,600. The value was computed using the Black-Scholes formula with a 5 year maturity, 1.62% risk free rate and a 94.46% volatility. The lender also received the right to purchase shares of the Company’s common stock at $1.00 per share upon the Company’s repayment of all or part of the convertible note payable. The value of the right to purchase common shares measured by the Company was $649,091. The value was computed using the Black-Scholes formula with a 1 year maturity, .25% risk free rate, a 87.06% volatility and a 5% probability of exercise. The total discount on the convertible note payable of $2,196,691 is being amortized over the 6 month term of the debt. The Company recorded $222,763 of interest expense from the amortization of the discount during the quarter ended March 31, 2015. | |||
The following is a summary of convertible note payable the period ended March 31, 2015: | |||
Balance at December 31, 2014 | $ | -- | |
Borrowing of convertible note payable | 10,000,000 | ||
Discount on convertible note payable | -2,196,691 | ||
Amortization of discount | 222,763 | ||
Balance at March 31, 2015 | $ | 8,026,072 | |
Series D Preferred Stock | |||
The Company has issued 400,000 shares of its $10.00 per share Series D preferred stock as tertiary collateral against the line of credit. The Series D preferred shares are issued, but not presently outstanding. The Series D preferred shares certificate is held by a third party and the lender does not have access to the certificate without the consent and cooperation of the Company. | |||
Solely in the event of a default by the Company of its payment obligations under the terms of the line of credit, a block of the Series D preferred shares would be released and converted into common shares in accordance the formula provided in the line of credit agreement. The sufficient common shares would be sold by the lender to cure the default. Upon the repayment of the line of credit the Series D preferred stock will be returned to the Company and cancelled |
Stock_Purchase_Warrants_and_Op
Stock Purchase Warrants and Options | 3 Months Ended | |||||||||||
Mar. 31, 2015 | ||||||||||||
Notes | ||||||||||||
Stock Purchase Warrants and Options | NOTE 4 - STOCK PURCHASE WARRANTS AND OPTIONS | |||||||||||
A summary of the Company’s warrant activity during the periods ended March 31, 2015 and December 31, 2014 is presented below: | ||||||||||||
Weighted | ||||||||||||
Weighted | Average | |||||||||||
Average | Remaining | Aggregate | ||||||||||
No. of | Exercise | Contractual | Intrinsic | |||||||||
Warrants | Price | Term | Value | |||||||||
Balance Outstanding, December 31, 2013 | 22,660,668 | $ | 1.9 | 6.52 | $ | 43,055,269 | ||||||
Granted | 200,000 | $ | 0 | 10 | ||||||||
Granted | 100,000 | $ | 1 | 10 | ||||||||
Granted | 8,521,654 | $ | 6 | 3 | ||||||||
Cancelled | -3,600,000 | $ | -1.18 | -- | ||||||||
Forfeited | -1,472,060 | $ | -1.9 | -- | ||||||||
Exercised | -9,778,344 | $ | -1.6 | -- | ||||||||
Balance Outstanding, December 31, 2014 | 16,631,918 | $ | 3.8 | 5.29 | $ | 53,353,862 | ||||||
Granted | 2,000,000 | $ | 1 | 5 | ||||||||
Balance Outstanding, March 31, 2015 | 18,631,918 | $ | 3.26 | 4.66 | $ | 60,727,862 | ||||||
Exercisable, March 31, 2015 | 16,474,775 | $ | 3.41 | 4.19 | $ | 56,203,004 | ||||||
A summary of the Company’s option activity during the periods ended March 31, 2015 and December 31, 2014 is presented below: | ||||||||||||
Weighted | ||||||||||||
Weighted | Average | |||||||||||
Average | Remaining | Aggregate | ||||||||||
No. of | Exercise | Contractual | Intrinsic | |||||||||
Options | Price | Term | Value | |||||||||
Balance Outstanding, December 31, 2013 | 1,011,290 | $ | 1.85 | 8.22 | $ | 1,851,695 | ||||||
Granted | 1,500,000 | $ | 2 | 10 | ||||||||
Granted | 150,000 | $ | 3 | 10 | ||||||||
Granted | 120,000 | $ | 2.45 | 10 | ||||||||
Granted | 60,000 | $ | 2.27 | 10 | ||||||||
Granted | 105,000 | $ | 3.1 | 10 | ||||||||
Granted | 60,000 | $ | 2.45 | 10 | ||||||||
Granted | 100,000 | $ | 2.54 | 10 | ||||||||
Granted | 10,000 | $ | 1.29 | 10 | ||||||||
Granted | 52,720 | $ | 1.37 | 10 | ||||||||
Granted | 5,000 | $ | 0.75 | 10 | ||||||||
Forfeited | -492,119 | $ | 3.37 | -- | ||||||||
Exercised | -85,024 | $ | 1.36 | -- | ||||||||
Balance Outstanding, December 31, 2014 | 2,596,867 | $ | 2.54 | 8.82 | 6,596,037 | |||||||
Granted | 30,000 | $ | 1.2 | 10 | ||||||||
Granted | 100,000 | $ | 1.01 | 10 | ||||||||
Granted | 12,500 | $ | 1.21 | 10 | ||||||||
Forfeited | -53,513 | $ | 2.56 | -- | ||||||||
Balance Outstanding, March 31, 2015 | 2,685,854 | $ | 2.07 | 8.66 | $ | 5,562,931 | ||||||
Exercisable, March 31, 2015 | 1,377,944 | $ | 1.96 | 8.26 | $ | 2,606,233 | ||||||
Fair_Value_of_Financial_Instru
Fair Value of Financial Instruments Disclosure | 3 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Notes | |||||||||||||
Fair Value of Financial Instruments Disclosure | NOTE 5 - FAIR VALUE OF FINANCIAL INSTRUMENTS | ||||||||||||
The Company follows the provisions of ASC 820 for fair value measurements of all nonfinancial assets and nonfinancial liabilities not recognized or disclosed at fair value in the financial statements on a recurring basis. The accounting standard for fair value measurements provides a framework for measuring fair value and requires expanded disclosures regarding fair value measurements. Fair value is defined as the price that would be received for an asset or the exit price that would be paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. The accounting standard established a fair value hierarchy which requires an entity to maximize the use of observable inputs, where available. This hierarchy prioritizes the inputs into three broad levels as follows. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. Level 3 inputs are unobservable inputs based on the Company’s own assumptions used to measure assets and liabilities at fair value. An asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. | |||||||||||||
There were no changes in the valuation techniques during the periods ended March 31, 2015 and December 31, 2014. The estimated fair value of certain financial instruments, including cash and cash equivalents and current liabilities, are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments. | |||||||||||||
Assets: | |||||||||||||
On December 15, 2014, the Company purchased 639.25 natural gas option contracts for $2,429,150, to mitigate its exposure to fluctuations in natural gas price in connection with its CHP facility in Alberta, Canada. The gas delivery dates range from January 1, 2016 to December 31, 2022. At each reporting date the Company revalues the options to the NYMEX-NG last trade value. The Company recorded a loss of $166,271 and $-0- for the three months ended March 31, 2015 and 2014, respectively, on the value of contracts. | |||||||||||||
Assets measured at fair value on a recurring and non-recurring basis consisted of the following at March 31, 2015: | |||||||||||||
Liabilities: | Total Carrying | (Level 1) | (Level 2) | (Level 3) | |||||||||
Value at | |||||||||||||
31-Mar-15 | |||||||||||||
Natural gas futures | $ | 2,259,995 | $ | 2,259,995 | $ | - | $ | - | |||||
The following is a summary of activity of Level 1 assets for the periods ended March 31, 2015 and December 31, 2014: | |||||||||||||
Balance at December 31, 2013 | -- | ||||||||||||
Purchases of futures contracts | 2,429,150 | ||||||||||||
Change in fair value 2014 | -2,884 | ||||||||||||
Balance at December 31, 2014 | $ | 2,426,266 | |||||||||||
Purchases of futures contracts | -- | ||||||||||||
Change in fair value 2015 | -166,271 | ||||||||||||
Balance at March 31, 2015 | $ | 2,259,995 | |||||||||||
Property_and_Equipment_Disclos
Property and Equipment Disclosure | 3 Months Ended | ||||||
Mar. 31, 2015 | |||||||
Notes | |||||||
Property and Equipment Disclosure | NOTE 6 - PROPERTY AND EQUIPMENT | ||||||
The major classes of assets as of March 31, 2015 and December 31, 2014 are as follows: | |||||||
March 31, | December 31, | ||||||
2015 | 2014 | ||||||
Office and computer equipment | $ | 343,915 | $ | 327,023 | |||
Software | 91,256 | 91,256 | |||||
Manufacturing and installation equipment | 455,150 | 442,450 | |||||
Leasehold improvements | 759,304 | 759,304 | |||||
Cogeneration plants (under construction) | 63,091,360 | 56,022,580 | |||||
Vehicles | 480,455 | 480,455 | |||||
Sub Total | 65,221,440 | 58,123,068 | |||||
Accumulated Depreciation | -1,183,383 | -1,140,290 | |||||
Net | $ | 64,038,057 | $ | 56,982,778 | |||
Depreciation expense was $43,093 and $31,915, for the three months ended March 31, 2015 and 2014, respectively. Approximately $858,212 of the Company’s property and equipment serves as security against its long-term debt. Depreciation of the cogeneration plants will commence when the plants are placed in service during the second quarter of 2015. |
Commitments_and_Contingencies_
Commitments and Contingencies Disclosure | 3 Months Ended |
Mar. 31, 2015 | |
Notes | |
Commitments and Contingencies Disclosure | NOTE 7 - COMMITMENTS AND CONTINGENCIES |
Equipment Purchase Commitments | |
The Company has entered into equipment purchase agreements whereby it has committed to paying approximately $19,629,081 for electrical co-generation equipment. The Company has made deposits of approximately $8,079,699 (41% of the total commitment) toward the purchase of the equipment which is included in construction in progress-property and equipment. The balance of the purchase price will be due upon acceptance of the equipment by the Company in accordance with progress payments as set out in the purchase contracts. | |
Pending Arbitrations | |
The Company and two consultants, have filed demands for arbitration with the American Arbitration Association (“AAA”). Consultants allege that the Company, specifically Johnny R. Thomas, CEO, have violated the "no disparagement" clause of their Consulting Agreement dated February 17, 2014 with the Company. They alleged that the Company interfered with the ability of the Consultants to perform their consulting duties. The Company alleges that the Consultants failed to perform consulting work as required and never intended to perform under the Consulting Agreement. The proceedings are in the discovery stage with an arbitration hearing scheduled for May 2015. The Company expects to prevail in this arbitration proceeding and does not expect said action to have any material adverse consequences to the Company. | |
The Company has filed a demand for arbitration with the AAA and National Energy Partners and its subsidiary, Hawaii Solar, LLC, (“NEP”) have counter-claimed. The Company alleged that NEP is in arrears on the payment of EPC services performed by the Company for construction work on the 24 schools in Hawaii contracted for between the parties. The Company further alleged that NEP provided deficient design drawings and interfered with the construction of the projects and engaged in negligence, fraud and/or willful misconduct. NEP alleged that the Company failed to perform the contracted EPC services in a timely, proper manner and desires to validate termination of the contract in the arbitration process. The Company expects to prevail in this dispute, which would result in no material adverse consequences to the Company, other than legal costs and a delay in the recognition of revenue. However, if NEP prevails, the Company is likely to lose about $1.9 million on the work performed to date, as well as a possibility of limited damage payments. The Company is defending against counter claims raised in the arbitration. On August 6, 2014, the Company commenced a civil action in Hawaii for declaratory and injunctive relief and damages against NEP in the circuit court of the First Circuit of Hawaii (CIV No. 14-1-1694-08). Subsequent to the Company commencing the above-described arbitration, it learned that NEP did not possess a Hawaii contractor license. The Company then withdrew its demand for arbitration without prejudice. The Company is seeking damages in excess of $1,300,000 and a declaratory judgment and injunctive relief that the subcontracts are invalid, void and unenforceable, the arbitration provision in the subcontracts is unenforceable and the pending arbitration should be terminated. | |
Pending Litigation | |
On October 24, 2014, a purported class action lawsuit was filed against the Company, two executive officers, and one non-executive officer in the U.S. District Court for the Central District of California (Case No:2:14-cv-08263).On January 21, 2015, the court appointed a Lead Plaintiff and Lead Plaintiff's Counsel. The Court also re-captioned the case In re Blue Earth, Inc. Securities Litigation, File No. CV 14-8263 DSF (JEMx). On March 13, 2015, plaintiff filed a First Amended Complaint ("FAC"). The FAC alleges claims under Sections 10(b) and 20(a) of the Exchange Act, and a purported class of purchasers of the Company's stock during the period from October 7, 2013 through October 21, 2014. Defendants' responded to the FAC and filed a motion to dismiss FAC. Plaintiff's opposition to the motion to dismiss will be due on or before June 1, 2015. Defendants' reply will be due on or before June 22, 2015. The Company believes the claims contained in the complaint are without merit and is vigorously defending this matter. |
Operating_Segments_Disclosure
Operating Segments Disclosure | 3 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Notes | |||||||||||||
Operating Segments Disclosure | NOTE 8 - OPERATING SEGMENTS | ||||||||||||
Operating segments are defined as components of an enterprise about which separate and discreet financial information is available and is evaluated regularly by the chief operating decision-maker in assessing performance and determining how to best allocate Company resources. The Company’s chief operating decision makers direct the allocation of resources to operating segments based on the business plan, budgets, profitability and cash flows of each respective segment. | |||||||||||||
The Company has two principal operating segments: (1) energy efficiency and technology and (2) construction of energy facilities owned by third parties. During the second quarter of 2015, a third segment will be introduced when energy is produced from facilities built and owned by the Company. These operating segments were delineated based on the nature of the products and services offered. | |||||||||||||
The Company evaluates the financial performance of the respective segments based on several factors, of which the primary measure is business segment income before taxes. All significant intercompany transactions and balances have been eliminated. The following tables show the operations of the Company’s reportable segments for the three months ended March 31, 2015 and 2014: | |||||||||||||
Energy Efficiency | |||||||||||||
and Technology | Construction | Corporate | Consolidated | ||||||||||
31-Mar-15 | |||||||||||||
Revenues | $ | 1,434,503 | $ | 3,698,161 | $ | -- | $ | 5,132,664 | |||||
Cost of sales | 597,723 | 3,378,584 | -- | 3,976,307 | |||||||||
Depreciation and amortization | 358,162 | 472,079 | 384,827 | 1,215,068 | |||||||||
General and administrative | 2,009,783 | 1,504,472 | 2,908,272 | 6,422,527 | |||||||||
Other income (expense) | -8,428 | 7,537 | 175,245 | 174,354 | |||||||||
Net income (loss) | $ | -1,539,593 | $ | -1,649,437 | $ | -3,117,854 | $ | -6,306,884 | |||||
Total assets | $ | 2,278,206 | $ | 93,966,137 | $ | 13,984,861 | $ | 110,229,204 | |||||
Energy Efficiency | |||||||||||||
and Technology | Construction | Corporate | Consolidated | ||||||||||
31-Mar-14 | |||||||||||||
Revenues | $ | 1,407,251 | $ | 1,826,966 | $ | -- | $ | 3,234,217 | |||||
Cost of sales | 586,901 | 1,201,408 | -- | 1,788,309 | |||||||||
Depreciation and amortization | 127,206 | 469,065 | 479,755 | 1,076,026 | |||||||||
General and administrative | 1,103,074 | 972,515 | 3,757,344 | 5,832,933 | |||||||||
Other (expense) | 2,710 | 61,309 | -287,428 | -223,409 | |||||||||
Net income (loss) | $ | -407,220 | $ | -754,713 | $ | -4,524,527 | $ | -5,686,460 | |||||
Total assets | $ | 1,033,867 | $ | 7,216,209 | $ | 79,942,616 | $ | 88,192,692 | |||||
Subsequent_Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2015 | |
Notes | |
Subsequent Events | NOTE 9 - SUBSEQUENT EVENTS |
On April 9, 2015, the Company issued 12,500 shares of its common stock for director fees. On April 20, 2015, the Company issued 168,700 shares of its common stock under a Mutual and General Release Agreement with the landlord of the former offices of Blue Earth Solar, Inc. On April 22, 2015 the Company issued 250,000 shares of its common stock for consulting services. | |
In accordance with ASC 855-10, the Company’s management has reviewed all material events and there are no additional material subsequent events to report. |
Significant_Accounting_Policie1
Significant Accounting Policies: Inventory, Policy (Policies) | 3 Months Ended |
Mar. 31, 2015 | |
Policies | |
Inventory, Policy | Inventory |
Inventory is recorded at the lower of cost or market (net realizable value) using the average cost method. The inventory on hand as of March 31, 2015 consists of battery components, motors, controllers, miscellaneous refrigeration parts and raw gasket material at costs of $718,275. The inventory is valued net of an allowance of $6,188 as of March 31, 2015. The Company does not have any work in progress. |
Significant_Accounting_Policie2
Significant Accounting Policies: Use of Estimates (Policies) | 3 Months Ended |
Mar. 31, 2015 | |
Policies | |
Use of Estimates | Use of Estimates |
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. |
Significant_Accounting_Policie3
Significant Accounting Policies: Recent Accounting Pronouncements (Policies) | 3 Months Ended |
Mar. 31, 2015 | |
Policies | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements |
The Company has evaluated recent accounting pronouncements and their adoption has not had, nor is expected to have a material impact on the Company’s financial position, or statements. |
Significant_Events_Convertible
Significant Events: Convertible Debt Table (Tables) | 3 Months Ended | ||
Mar. 31, 2015 | |||
Tables/Schedules | |||
Convertible Debt Table | |||
Balance at December 31, 2014 | $ | -- | |
Borrowing of convertible note payable | 10,000,000 | ||
Discount on convertible note payable | -2,196,691 | ||
Amortization of discount | 222,763 | ||
Balance at March 31, 2015 | $ | 8,026,072 |
Stock_Purchase_Warrants_and_Op1
Stock Purchase Warrants and Options: Schedule of Stockholders' Equity Note, Warrants (Tables) | 3 Months Ended | ||||||||||
Mar. 31, 2015 | |||||||||||
Tables/Schedules | |||||||||||
Schedule of Stockholders' Equity Note, Warrants | |||||||||||
Weighted | |||||||||||
Weighted | Average | ||||||||||
Average | Remaining | Aggregate | |||||||||
No. of | Exercise | Contractual | Intrinsic | ||||||||
Warrants | Price | Term | Value | ||||||||
Balance Outstanding, December 31, 2013 | 22,660,668 | $ | 1.9 | 6.52 | $ | 43,055,269 | |||||
Granted | 200,000 | $ | 0 | 10 | |||||||
Granted | 100,000 | $ | 1 | 10 | |||||||
Granted | 8,521,654 | $ | 6 | 3 | |||||||
Cancelled | -3,600,000 | $ | -1.18 | -- | |||||||
Forfeited | -1,472,060 | $ | -1.9 | -- | |||||||
Exercised | -9,778,344 | $ | -1.6 | -- | |||||||
Balance Outstanding, December 31, 2014 | 16,631,918 | $ | 3.8 | 5.29 | $ | 53,353,862 | |||||
Granted | 2,000,000 | $ | 1 | 5 | |||||||
Balance Outstanding, March 31, 2015 | 18,631,918 | $ | 3.26 | 4.66 | $ | 60,727,862 | |||||
Exercisable, March 31, 2015 | 16,474,775 | $ | 3.41 | 4.19 | $ | 56,203,004 |
Stock_Purchase_Warrants_and_Op2
Stock Purchase Warrants and Options: Schedule of Stockholders' Equity, Options (Tables) | 3 Months Ended | |||||||||||
Mar. 31, 2015 | ||||||||||||
Tables/Schedules | ||||||||||||
Schedule of Stockholders' Equity, Options | ||||||||||||
Weighted | ||||||||||||
Weighted | Average | |||||||||||
Average | Remaining | Aggregate | ||||||||||
No. of | Exercise | Contractual | Intrinsic | |||||||||
Options | Price | Term | Value | |||||||||
Balance Outstanding, December 31, 2013 | 1,011,290 | $ | 1.85 | 8.22 | $ | 1,851,695 | ||||||
Granted | 1,500,000 | $ | 2 | 10 | ||||||||
Granted | 150,000 | $ | 3 | 10 | ||||||||
Granted | 120,000 | $ | 2.45 | 10 | ||||||||
Granted | 60,000 | $ | 2.27 | 10 | ||||||||
Granted | 105,000 | $ | 3.1 | 10 | ||||||||
Granted | 60,000 | $ | 2.45 | 10 | ||||||||
Granted | 100,000 | $ | 2.54 | 10 | ||||||||
Granted | 10,000 | $ | 1.29 | 10 | ||||||||
Granted | 52,720 | $ | 1.37 | 10 | ||||||||
Granted | 5,000 | $ | 0.75 | 10 | ||||||||
Forfeited | -492,119 | $ | 3.37 | -- | ||||||||
Exercised | -85,024 | $ | 1.36 | -- | ||||||||
Balance Outstanding, December 31, 2014 | 2,596,867 | $ | 2.54 | 8.82 | 6,596,037 | |||||||
Granted | 30,000 | $ | 1.2 | 10 | ||||||||
Granted | 100,000 | $ | 1.01 | 10 | ||||||||
Granted | 12,500 | $ | 1.21 | 10 | ||||||||
Forfeited | -53,513 | $ | 2.56 | -- | ||||||||
Balance Outstanding, March 31, 2015 | 2,685,854 | $ | 2.07 | 8.66 | $ | 5,562,931 | ||||||
Exercisable, March 31, 2015 | 1,377,944 | $ | 1.96 | 8.26 | $ | 2,606,233 |
Fair_Value_of_Financial_Instru1
Fair Value of Financial Instruments Disclosure: Fair Value, Assets Measured on Recurring and Nonrecurring Basis (Tables) | 3 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Tables/Schedules | |||||||||||||
Fair Value, Assets Measured on Recurring and Nonrecurring Basis | |||||||||||||
Liabilities: | Total Carrying | (Level 1) | (Level 2) | (Level 3) | |||||||||
Value at | |||||||||||||
31-Mar-15 | |||||||||||||
Natural gas futures | $ | 2,259,995 | $ | 2,259,995 | $ | - | $ | - |
Fair_Value_of_Financial_Instru2
Fair Value of Financial Instruments Disclosure: Summary of Activity of Level 1 Assets (Tables) | 3 Months Ended | |||
Mar. 31, 2015 | ||||
Tables/Schedules | ||||
Summary of Activity of Level 1 Assets | ||||
Balance at December 31, 2013 | -- | |||
Purchases of futures contracts | 2,429,150 | |||
Change in fair value 2014 | -2,884 | |||
Balance at December 31, 2014 | $ | 2,426,266 | ||
Purchases of futures contracts | -- | |||
Change in fair value 2015 | -166,271 | |||
Balance at March 31, 2015 | $ | 2,259,995 |
Property_and_Equipment_Disclos1
Property and Equipment Disclosure: Schedule of Major Classes of Assets (Tables) | 3 Months Ended | ||||||
Mar. 31, 2015 | |||||||
Tables/Schedules | |||||||
Schedule of Major Classes of Assets | |||||||
March 31, | December 31, | ||||||
2015 | 2014 | ||||||
Office and computer equipment | $ | 343,915 | $ | 327,023 | |||
Software | 91,256 | 91,256 | |||||
Manufacturing and installation equipment | 455,150 | 442,450 | |||||
Leasehold improvements | 759,304 | 759,304 | |||||
Cogeneration plants (under construction) | 63,091,360 | 56,022,580 | |||||
Vehicles | 480,455 | 480,455 | |||||
Sub Total | 65,221,440 | 58,123,068 | |||||
Accumulated Depreciation | -1,183,383 | -1,140,290 | |||||
Net | $ | 64,038,057 | $ | 56,982,778 |
Operating_Segments_Disclosure_
Operating Segments Disclosure: Schedule of Segment Reporting Information, by Segment (Tables) | 3 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Tables/Schedules | |||||||||||||
Schedule of Segment Reporting Information, by Segment | |||||||||||||
Energy Efficiency | |||||||||||||
and Technology | Construction | Corporate | Consolidated | ||||||||||
31-Mar-15 | |||||||||||||
Revenues | $ | 1,434,503 | $ | 3,698,161 | $ | -- | $ | 5,132,664 | |||||
Cost of sales | 597,723 | 3,378,584 | -- | 3,976,307 | |||||||||
Depreciation and amortization | 358,162 | 472,079 | 384,827 | 1,215,068 | |||||||||
General and administrative | 2,009,783 | 1,504,472 | 2,908,272 | 6,422,527 | |||||||||
Other income (expense) | -8,428 | 7,537 | 175,245 | 174,354 | |||||||||
Net income (loss) | $ | -1,539,593 | $ | -1,649,437 | $ | -3,117,854 | $ | -6,306,884 | |||||
Total assets | $ | 2,278,206 | $ | 93,966,137 | $ | 13,984,861 | $ | 110,229,204 | |||||
Energy Efficiency | |||||||||||||
and Technology | Construction | Corporate | Consolidated | ||||||||||
31-Mar-14 | |||||||||||||
Revenues | $ | 1,407,251 | $ | 1,826,966 | $ | -- | $ | 3,234,217 | |||||
Cost of sales | 586,901 | 1,201,408 | -- | 1,788,309 | |||||||||
Depreciation and amortization | 127,206 | 469,065 | 479,755 | 1,076,026 | |||||||||
General and administrative | 1,103,074 | 972,515 | 3,757,344 | 5,832,933 | |||||||||
Other (expense) | 2,710 | 61,309 | -287,428 | -223,409 | |||||||||
Net income (loss) | $ | -407,220 | $ | -754,713 | $ | -4,524,527 | $ | -5,686,460 | |||||
Total assets | $ | 1,033,867 | $ | 7,216,209 | $ | 79,942,616 | $ | 88,192,692 |
Significant_Accounting_Policie4
Significant Accounting Policies: Inventory, Policy (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Details | ||
Inventory on hand | $718,275 | $569,888 |
Valuation allowance for inventory | $6,188 |
Significant_Events_Details
Significant Events (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Dec. 31, 2014 | |
Debt forgiven by the Company | $50,000 | |
Gain on settlement of litigation | 989,778 | |
Common stock issued for services | 73,887 | |
Common stock received and cancelled | 1,127,742 | |
Line of credit payable | 3,000,000 | |
Proceeds from line of credit | 2,911,700 | |
Related party notes payable | 1,333,147 | 1,333,147 |
Proceeds from notes payable | 9,953,068 | |
Stock issued for debt | 200,000 | |
Value of stock issued for debt | 226,000 | |
Warrants issued for debt | 2,000,000 | |
Value of the warrants issued | 1,321,600 | |
Amortization of discount on debt | 222,763 | |
Series D Preferred Stock issued | 400,000 | |
Line of credit fees | ||
Prepaid expenses | 88,300 | |
Convertible Note Payable legal fees | ||
Prepaid expenses | $46,932 |
Significant_Events_Convertible1
Significant Events: Convertible Debt Table (Details) (USD $) | Mar. 31, 2015 |
Details | |
Convertible note payable | $8,026,072 |
Stock_Purchase_Warrants_and_Op3
Stock Purchase Warrants and Options: Schedule of Stockholders' Equity Note, Warrants (Details) (USD $) | 12 Months Ended | 3 Months Ended | |
Dec. 31, 2014 | Mar. 31, 2015 | Dec. 31, 2013 | |
Warrants outstanding | 16,631,918 | 18,631,918 | 22,660,668 |
Weighted average exercise price, warrants outstanding | $3.80 | $3.26 | $1.90 |
Aggregate intrinsic value, warrants outstanding | $53,353,862 | $60,727,862 | $43,055,269 |
Warrants cancelled | -3,600,000 | ||
Weighted average exercise price, warrants cancelled | ($1.18) | ||
Warrants forfeited | -1,472,060 | ||
Weighted average exercise price, warrants forfeited | ($1.90) | ||
Warrants exercised | -9,778,344 | ||
Weighted average exercise price, warrants exercised | ($1.60) | ||
Warrants exercisable | 16,474,775 | ||
Weighted average exercise price, warrants exercisable | $3.41 | ||
Aggregate intrinsic value, warrants exercisable | $56,203,004 | ||
Grant (1) | |||
Warrants granted | 200,000 | 2,000,000 | |
Weighted average exercise price, warrants granted | $1 | ||
Grant (2) | |||
Warrants granted | 100,000 | ||
Weighted average exercise price, warrants granted | $1 | ||
Grant (3) | |||
Warrants granted | 8,521,654 | ||
Weighted average exercise price, warrants granted | $6 |
Stock_Purchase_Warrants_and_Op4
Stock Purchase Warrants and Options: Schedule of Stockholders' Equity, Options (Details) (USD $) | 3 Months Ended | 12 Months Ended | 24 Months Ended | |
Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | |
Stock options outstanding | 2,685,854 | 2,596,867 | 2,596,867 | 1,011,290 |
Weighted average exercise price, options outstanding | $2.07 | $2.54 | $2.54 | $1.85 |
Aggregate intrinsic value, option outstanding | $5,562,931 | $6,596,037 | $6,596,037 | $1,851,695 |
Stock options forfeited | -53,513 | -492,119 | ||
Weighted average exercise price, options forfeited | $2.56 | $3.37 | ||
Stock options exercised | -85,024 | |||
Weighted average exercise price, options exercised | $1.36 | |||
Stock options exercisable | 1,377,944 | |||
Weighted average exercise price, options exercisable | $1.96 | |||
Aggregate intrinsic value, options exercisable | $2,606,233 | |||
Grant (1) | ||||
Stock options granted | 30,000 | 1,500,000 | ||
Weighted average exercise price, options granted | $1.20 | $2 | ||
Grant (2) | ||||
Stock options granted | 100,000 | 150,000 | ||
Weighted average exercise price, options granted | $1.01 | $3 | ||
Grant (3) | ||||
Stock options granted | 12,500 | 120,000 | ||
Weighted average exercise price, options granted | $1.21 | $2.45 | ||
Grant (4) | ||||
Stock options granted | 60,000 | |||
Weighted average exercise price, options granted | $2.27 | |||
Grant (5) | ||||
Stock options granted | 105,000 | |||
Weighted average exercise price, options granted | $3.10 | |||
Grant (6) | ||||
Stock options granted | 60,000 | |||
Weighted average exercise price, options granted | $2.45 | |||
Grant (7) | ||||
Stock options granted | 100,000 | |||
Weighted average exercise price, options granted | $2.54 | |||
Grant (8) | ||||
Stock options granted | 10,000 | |||
Weighted average exercise price, options granted | $1.29 | |||
Grant (9) | ||||
Stock options granted | 52,720 | |||
Weighted average exercise price, options granted | $1.37 | |||
Grant (10) | ||||
Stock options granted | 5,000 | |||
Weighted average exercise price, options granted | $0.75 |
Fair_Value_of_Financial_Instru3
Fair Value of Financial Instruments Disclosure: Summary of Activity of Level 1 Assets (Details) (USD $) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Details | |||
Fair Value, Level 1 Assets | $2,259,995 | $2,426,266 | $2,429,150 |
Change in fair value, assets | ($166,271) | ($2,884) |
Property_and_Equipment_Disclos2
Property and Equipment Disclosure: Schedule of Major Classes of Assets (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Property and Equipment, asset value | $65,221,440 | $58,123,068 |
Accumulated depreciation on property and equipment assets | -1,183,383 | -1,140,290 |
Property and equipment, asset value, Net | 64,038,057 | 56,982,778 |
Computer Equipment | ||
Property and Equipment, asset value | 343,915 | 327,023 |
Software and Software Development Costs | ||
Property and Equipment, asset value | 91,256 | 91,256 |
Other Machinery and Equipment | ||
Property and Equipment, asset value | 455,150 | 442,450 |
Leasehold Improvements | ||
Property and Equipment, asset value | 759,304 | 759,304 |
Cogeneration plants | ||
Property and Equipment, asset value | 63,091,360 | 56,022,580 |
Vehicles | ||
Property and Equipment, asset value | $480,455 | $480,455 |
Property_and_Equipment_Disclos3
Property and Equipment Disclosure (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Details | ||
Depreciation expense on property and equipment | $43,093 | $31,915 |
Value of property and equipment serving as security against debt | $858,212 |
Commitments_and_Contingencies_1
Commitments and Contingencies Disclosure (Details) (EquipmentPurchaseAgreementsMember, USD $) | Mar. 31, 2015 |
EquipmentPurchaseAgreementsMember | |
Commitment to pay | $19,629,081 |
Deposits made toward purchase | $8,079,699 |
Operating_Segments_Disclosure_1
Operating Segments Disclosure: Schedule of Segment Reporting Information, by Segment (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Segment Revenues | $5,132,664 | $3,234,217 |
Segment cost of sales | 3,976,307 | 1,788,309 |
Segment Depreciation and Amortization | 1,215,068 | 1,076,026 |
Segment General and Administrative Expense | 6,422,527 | 5,832,933 |
Segment other income (expense) | 174,354 | -223,409 |
Segment Net Income (loss) | -6,306,884 | -5,686,460 |
Segment total assets | 110,229,204 | 88,192,692 |
Energy Efficiency and Technology | ||
Segment Revenues | 1,434,503 | 1,407,251 |
Segment cost of sales | 597,723 | 586,901 |
Segment Depreciation and Amortization | 358,162 | 127,206 |
Segment General and Administrative Expense | 2,009,783 | 1,103,074 |
Segment other income (expense) | -8,428 | 2,710 |
Segment Net Income (loss) | -1,539,593 | -407,220 |
Segment total assets | 2,278,206 | 1,033,867 |
Construction | ||
Segment Revenues | 3,698,161 | 1,826,966 |
Segment cost of sales | 3,378,584 | 1,201,408 |
Segment Depreciation and Amortization | 472,079 | 469,065 |
Segment General and Administrative Expense | 1,504,472 | 972,515 |
Segment other income (expense) | 7,537 | 61,309 |
Segment Net Income (loss) | -1,649,437 | -754,713 |
Segment total assets | 93,966,137 | 7,216,209 |
Corporate Segment | ||
Segment Depreciation and Amortization | 384,827 | 479,755 |
Segment General and Administrative Expense | 2,908,272 | 3,757,344 |
Segment other income (expense) | 175,245 | -287,428 |
Segment Net Income (loss) | -3,117,854 | -4,524,527 |
Segment total assets | $13,984,861 | $79,942,616 |
Subsequent_Events_Details
Subsequent Events (Details) | 1 Months Ended |
Apr. 22, 2015 | |
Director fees | |
Common stock issued | 12,500 |
Mutual and General Release Agreement | |
Common stock issued | 168,700 |
Consulting services | |
Common stock issued | 250,000 |