Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | May 14, 2020 | Jun. 30, 2019 | |
Document And Entity Information | |||
Entity Registrant Name | Midwest Energy Emissions Corp. | ||
Entity Central Index Key | 0000728385 | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Entity Voluntary Filers | No | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well Known Seasoned Issuer | No | ||
Entity Small Business | true | ||
Entity Shell Company | false | ||
Entity Emerging Growth Company | false | ||
Entity Current Reporting Status | No | ||
Document Period End Date | Dec. 31, 2019 | ||
Entity Filer Category | Non-accelerated Filer | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2019 | ||
Entity Common Stock Shares Outstanding | 77,747,750 | ||
Entity Public Float | $ 13,086,000 | ||
Entity Interactive Data Current | Yes |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets | ||
Cash | $ 1,499,287 | $ 584,877 |
Accounts receivable | 1,222,874 | 1,642,126 |
Inventory | 513,498 | 509,416 |
Prepaid expenses and other assets | 316,199 | 136,628 |
Customer acquisition costs, net | 34,467 | |
Total current assets | 3,551,858 | 2,907,514 |
Property and equipment, net | 2,082,343 | 2,397,691 |
Right of use asset | 1,106,575 | |
Intellectual property | 2,532,462 | 2,733,662 |
Total assets | 9,273,238 | 8,038,867 |
Current liabilities | ||
Accounts payable and accrued expenses | 1,676,757 | 1,858,326 |
Current portion of equipment notes payable | 53,304 | 63,424 |
Current portion of operating lease liability | 383,307 | |
Current portion of convertible notes payable, net of discount and issuance costs | 990,000 | |
Accrued interest | 226,065 | 96,902 |
Customer credits | 167,000 | 167,000 |
Deferred compensation | 357,095 | 555,877 |
Total current liabilities | 3,853,528 | 2,741,529 |
Equipment notes payable, less current portion | 22,386 | 104,226 |
Operating lease liability | 807,409 | |
Convertible notes payable, net of discount and issuance costs | 2,951,137 | 1,760,570 |
Profit share liability | 2,328,845 | |
Secured note payable | 271,686 | 271,686 |
Unsecured note payable, net of discount and issuance costs | 7,911,898 | 11,781,952 |
Total liabilities | 18,146,889 | 16,659,963 |
COMMITMENTS AND CONTINGENCIES (Note 11) | ||
Stockholders' deficit | ||
Preferred stock, $0.001 par value: 2,000,000 shares authorized, no shares issued | ||
Common stock; $0.001 par value; 150,000,000 shares authorized; 76,747,750 and 76,246,113 shares issued and outstanding as of December 31, 2019 and 2018, respectively | 76,748 | 76,246 |
Additional paid-in capital | 48,708,085 | 42,785,990 |
Accumulated deficit | (57,658,484) | (51,483,332) |
Total stockholders' deficit | (8,873,651) | (8,621,096) |
Total liabilities and stockholders' deficit | $ 9,273,238 | $ 8,038,867 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2019 | Dec. 31, 2018 |
Stockholders' deficit | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 76,747,750 | 76,246,113 |
Common stock, shares outstanding | 76,747,750 | 76,246,113 |
STATEMENTS OF OPERATIONS
STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
STATEMENTS OF OPERATIONS | ||
Revenues | $ 11,417,027 | $ 12,295,862 |
Costs and expenses: | ||
Cost of sales | 8,335,436 | 9,147,745 |
Selling, general and administrative expenses | 6,428,580 | 5,894,511 |
Interest expense & letter of credit fees | 2,391,395 | 2,004,097 |
Loss on debt restructuring | 44,036 | |
Loss on change in fair value of profit share liability | 374,462 | |
Gain on sale of equipment | (29,560) | |
Total costs and expenses | 17,500,313 | 17,090,389 |
Net loss before provision for income taxes | (6,083,286) | (4,794,527) |
Provision for income taxes | (14,000) | (22,153) |
Net loss | $ (6,097,286) | $ (4,816,680) |
Net loss per common share-basic and diluted: | $ (0.08) | $ (0.06) |
Weighted average common shares outstanding | 76,534,957 | 76,137,894 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS DEFICIT - USD ($) | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] |
Balance, shares at Dec. 31, 2017 | 76,246,113 | |||
Balance, amount at Dec. 31, 2017 | $ (4,424,786) | $ 76,246 | $ 42,165,620 | $ (46,666,652) |
Vesting of stock issued to non-employees in prior year | 138,750 | 138,750 | ||
Issuance of warrants | 129,850 | 129,850 | ||
Issuance of stock options | 351,770 | 351,770 | ||
Net loss | $ (4,816,680) | $ (4,816,680) | ||
Balance, shares at Dec. 31, 2018 | 76,246,113 | |||
Balance, amount at Dec. 31, 2018 | $ (8,621,096) | $ 76,246 | $ 42,785,990 | $ (51,483,332) |
Balance, shares at Dec. 31, 2018 | 76,246,113 | |||
Balance, amount at Dec. 31, 2018 | $ (8,621,096) | $ 76,246 | $ 42,785,990 | $ (51,483,332) |
Issuance of stock options | 898,207 | 898,207 | ||
Net loss | (6,097,286) | (6,097,286) | ||
Cumulative effect of change in accounting principle related to accounting for leases | (77,866) | (77,866) | ||
Issuance of warrants, recorded as discount on convertible notes payable | 485,640 | 485,640 | ||
Extension of certain stock option expiration | 745,989 | 745,989 | ||
Stock issued per resignation agreements, shares | 464,517 | |||
Stock issued per resignation agreements, amount | 118,540 | $ 465 | 118,075 | |
Stock issued upon cashless warrant exercise, shares | 37,120 | |||
Stock issued upon cashless warrant exercise, amount | $ 37 | (37) | ||
Stock warrants issued for prepaid services | 243,294 | 243,294 | ||
Stock options issued for prepaid services | 18,723 | 18,723 | ||
Capital contribution related to debt restructuring Note 8 | $ 3,412,204 | $ 3,412,204 | ||
Balance, shares at Dec. 31, 2019 | 76,747,750 | |||
Balance, amount at Dec. 31, 2019 | $ (8,873,651) | $ 76,748 | $ 48,708,085 | $ (57,658,484) |
STATEMENT OF CASH FLOWS
STATEMENT OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows from operating activities | ||
Net loss | $ (6,097,286) | $ (4,816,680) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock-based compensation | 1,810,267 | 490,520 |
Amortization of discount of notes payable | 1,752,639 | 678,061 |
Amortization of debt issuance costs | 101,852 | 102,183 |
Amortization of right to use assets | 378,261 | |
Amortization of customer acquisition costs | 34,467 | 137,866 |
Amortization of patent rights | 201,200 | 201,200 |
Depreciation expense | 314,908 | 456,914 |
Loss on debt exchange | 44,036 | |
Loss on change in fair value of profit share | 374,462 | |
(Gain) Loss on sale of equipment | (29,560) | 6,303 |
Changes in operating assets and liabilities | ||
Decrease in accounts receivable | 419,252 | 1,289,227 |
(Increase) Decrease in inventory | (4,082) | 150,163 |
Decrease in prepaid expenses and other assets | 34,915 | 73,907 |
(Decrease) Increase in accounts payable and accrued liabilities | (426,638) | 62,623 |
Increase in deferred compensation | (198,782) | 555,877 |
Increase in accrued interest | 129,163 | 19,402 |
(Decrease) in operating lease liability | (371,986) | |
(Decrease) in deferred revenue and customer credits | (517,060) | |
Net cash used in operating activities | (1,576,948) | (1,065,458) |
Cash flows used in investing activities | ||
Cash received from sale of equipment | 30,000 | |
Purchase of property and equipment | (131,915) | |
Net cash used in investing activities | 30,000 | (131,915) |
Cash flows from financing activities | ||
Payments on secured promissory note | (46,682) | (875,000) |
Payments of equipment notes payable | (91,960) | (61,177) |
Proceeds from the issuance of convertible promissory notes and related warrants | 2,600,000 | 300,000 |
Net cash provided by (used in) financing activities | 2,461,358 | (636,177) |
Net increase (decrease) in cash and cash equivalents | 914,410 | (1,833,550) |
Cash and cash equivalents - beginning of year | 584,877 | 2,418,427 |
Cash and cash equivalents - end of year | 1,499,287 | 584,877 |
SUPPLEMENTAL CASH FLOW INFORMATION: | ||
Cash paid during the period for: Interest | 1,175,450 | |
Cash paid during the period for: Taxes | 14,000 | 22,153 |
SUPPLEMENTAL DISCLOSURE OF NON-CASH TRANSACTIONS | ||
Cumulative effect on accumulated deficit of lease accounting change | 77,866 | |
Discount on convertible promissory notes payable | 485,640 | |
Net adjustment for extension of lease | 145,267 | |
Stock warrants issued for prepaid services | 243,294 | |
Stock options issued for prepaid services | 18,723 | |
Conversion of secured notes payable into unsecured notes payable | 560,000 | |
Capital contribution | (3,412,204) | |
Warrants issued upon debt exchange | $ 89,500 |
Organization
Organization | 12 Months Ended |
Dec. 31, 2019 | |
Organization | |
Note 1- Organization | Midwest Energy Emissions Corp. Midwest Energy Emissions Corp. (the “Company”) is organized under the laws of the State of Delaware with 150,000,000 authorized shares of common stock, par value $.001 per share and 2,000,000 authorized shares of preferred stock, par value $0.001 per share. MES, Inc. MES, Inc. is incorporated in the State of North Dakota. MES, Inc. is a wholly owned subsidiary of Midwest Energy Emissions Corp. and is engaged in the business of developing and commercializing state of the art control technologies relating to the capture and control of mercury emissions from coal fired boilers in the United States and Canada. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Summary of Significant Accounting Policies | |
Note 2 - Summary Of Significant Accounting Policies | Basis of Presentation Principles of Consolidation The consolidated financial statements include the accounts of Midwest Energy Emissions Corp. and its wholly-owned subsidiary, MES, Inc. Intercompany balances and transactions have been eliminated in consolidation. Reclassifications Certain prior year amounts in the consolidated financial statements and the notes thereto have been reclassified where necessary to conform to the current year presentation. These reclassifications did not affect the prior period total assets, total liabilities, stockholders’ deficit, net loss or net cash used in operating activities. Use of Estimates The preparation of consolidated 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, valuation of equity issuances and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. The Company uses estimates in accounting for, among other items, revenue recognition, allowance for doubtful accounts, stock-based compensation, income tax provisions, excess and obsolete inventory reserve and impairment of intellectual property. Actual results could differ from those estimates. Cash Cash and cash equivalents include all highly liquid monetary instruments with original maturities of three months or less when purchased. These investments are carried at cost, which approximates fair value. Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash deposits. The Company maintains its cash in institutions insured by the Federal Deposit Insurance Corporation (“FDIC”). At times, the Company’s cash and cash equivalent balances may be uninsured or in amounts that exceed the FDIC insurance limits. The Company has not experienced any loses on such accounts. At December 31, 2019 and 2018, the Company had no cash equivalents. As of December 31, 2019, approximately $1,249,000 of cash exceeded the FDIC insurance limits. Accounts Receivable Trade accounts receivable are stated at the amount the Company expects to collect. The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. Management considers the following factors when determining the collectability of specific customer accounts: customer credit-worthiness, past transaction history with the customer, current economic industry trends, and changes in customer payment terms. Past due balances over 90 days and other higher risk amounts are reviewed individually for collectability. If the financial condition of the Company’s customers were to deteriorate, adversely affecting their ability to make payments, additional allowances would be required. Based on management’s assessment, the Company provides for estimated uncollectible amounts through a charge to earnings and a credit to a valuation allowance. Balances that remain outstanding after the Company has used reasonable collection efforts are written off through a charge to the valuation allowance and a credit to accounts receivable. At December 31, 2019 and 2018, the allowance for doubtful accounts was zero. Inventory Inventories are stated at the lower of cost (first-in, first-out basis) or net realizable value. Inventories are periodically evaluated to identify obsolete or otherwise impaired products and are written off when management determines usage is not probable. The Company estimates the balance of excess and obsolete inventory by analyzing inventory by age using last used and original purchase date and existing sales pipeline for which the inventory could be used. As of December 31, 2019 and 2018, the Company has no valuation allowance. Property and Equipment Property and equipment are stated at cost. When retired or otherwise disposed, the related carrying value and accumulated depreciation are removed from the respective accounts and the net difference less any amount realized from disposition, is reflected in earnings. For consolidated financial statement purposes, equipment is recorded at cost and depreciated using the straight-line method over their estimated useful lives of 2 to 5 years. Leasehold improvements are recorded at cost and depreciated using the straight-line method over the life of the lease. Expenditures for repairs and maintenance which do not materially extend the useful lives of property and equipment are charged to operations. Management reviews the carrying value of its property and equipment for impairment on an annual basis. Intellectual Property Intellectual is recorded at cost and amortized over its estimated useful life of 15 years. Management reviews intellectual property for impairment when events or changes in circumstances indicate the carrying amount of an asset or asset group may not be recoverable. In the event that impairment indicators exist, a further analysis is performed and if the sum of the expected undiscounted future cash flows resulting from the use of the asset or asset group is less than the carrying amount of the asset or asset group, an impairment loss equal to the excess of the asset or asset group’s carrying value over its fair value is recorded. Management considers historical experience and all available information at the time the estimates of future cash flows are made, however, the actual cash values that could be realized may differ from those that are estimated. Recoverability of Long-Lived and Intangible Assets Long-lived assets and certain identifiable intangibles held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Events relating to recoverability may include significant unfavorable changes in business conditions, recurring losses or a forecasted inability to achieve break-even operating results over an extended period. The Company evaluates the recoverability of long-lived assets based upon forecasted undiscounted cash flows. Should impairment in value be indicated, the carrying value of the long-lived and or intangible assets would be adjusted, based on estimates of future discounted cash flows. The Company evaluated the recoverability of the carrying value of the Company’s equipment. No impairment charges were recognized for the years ended December 31, 2019 and 2018, respectively. Leases In February 2016, the FASB issued new guidance which requires lessees to recognize a lease liability for the obligation to make lease payments and a right-of-use asset for the right to use the underlying asset for the lease term. The accounting standard, effective January 1, 2019, requires virtually all leases to be recognized on the Balance Sheet. Effective January 1, 2019, we adopted the standard using the modified retrospective method, under which we elected the package of practical expedients and transition provisions allowing us to bring our existing operating leases onto the Consolidated Balance Sheet without adjusting comparative periods, but recognizing a cumulative-effect adjustment to the opening balance of accumulated deficit on January 1, 2019. Under the guidance, we have also elected not to separate lease and non-lease components in recognition of the lease-related assets and liabilities, as well as the related lease expense. We have operating leases for office space in two multitenant facilities, which are not recorded as assets and liabilities as those leases do not have terms greater than 12 months. We have an operating leases for a multi-purpose facility and bulk trailers used in operations which is recorded as an asset and liability as the lease has a terms greater than 12 months. Lease-related assets, or right-of-use assets, are recognized at the lease commencement date at amounts equal to the respective lease liabilities, adjusted for prepaid lease payments, initial direct costs, and lease incentives received. Lease-related liabilities are recognized at the present value of the remaining contractual fixed lease payments, discounted using our incremental borrowing rate. Operating lease expense is recognized on a straight-line basis over the lease term, while variable lease payments are expensed as incurred. Upon adoption of the standard on January 1, 2019, we recorded $1,339,569 of right of use assets and $1,417,435 of lease-related liabilities, with the difference charged to accumulated deficit at that date. Stock-Based Compensation The Company accounts for stock-based compensation awards in accordance with the provisions of Accounting Standards Codification (“ASC”) 718, Compensation-Stock Compensation Fair Value of Financial Instruments The fair value hierarchy has three levels based on the inputs used to determine fair value, which are as follows: ☐ Level 1 ☐ Level 2 ☐ Level 3 — The fair value hierarchy requires the use of observable market data when available. In instances where the inputs used to measure fair value fall into different levels of the fair value hierarchy, the fair value measurement has been determined based on the lowest level input significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular item to the fair value measurement in its entirety requires judgment, including the consideration of inputs specific to the asset or liability. Cash was the only asset measured at fair value on a recurring basis by the Company at December 31, 2019 and December 31, 2018 and is considered to be Level 1. Financial instruments include cash, accounts receivable, accounts payable, deferred revenue, customer credits and short-term debt. The carrying amounts of these financial instruments approximated fair value at December 31, 2019 and December 31, 2018 due to their short-term maturities. The fair value of the promissory notes payable at December 31, 2019 and December 31, 2018 approximated the carrying amount as the notes were issued during the years ended December 31, 2019 and 2018 at interest rates prevailing in the market and interest rates have not significantly changed as of December 31, 2019. The fair value of the promissory notes payable was determined on a Level 2 measurement. Discounts on issued debt, as well as debt issuance costs, are amortized over the term of the individual promissory notes. The fair value of the profit share liability at December 31, 2019 was calculated using a discounted cash flow model based on estimated future cash payments. The fair value of the profit share liability was determined on a Level 3 measurement. These values are determined using pricing models for which the assumptions utilized management’s estimates. The following tables present the Company’s assets and liabilities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy. Fair Value Measurement as of December 31, 2019 Total Level 1 Level 2 Level 3 Assets: Cash 1,499,287 1,499,287 - - Total Assets $ 1,499,287 $ 1,499,287 $ - $ - Liabilities Promissory notes 12,200,411 - 12,200,411 - Profit share liability 2,328,845 - - 2,328,845 Total Liabilities $ 14,529,256 $ - $ 12,200,411 $ 2,328,845 Fair Value Measurement as of December 31, 2018 Total Level 1 Level 2 Level 3 Assets: Cash 584,877 584,877 - - Total Assets $ 584,877 $ 584,877 $ - $ - Liabilities Promissory notes 13,814,208 - 13,814,208 Total Liabilities $ 13,814,208 $ - $ 13,814,208 $ - Foreign Currency Transactions The Company’s functional currency is the United States Dollar (the “U.S. Dollar”). Transactions denominated in currencies other than the U.S. Dollar are re-measured to the U.S. Dollar at the period-end exchange rates. Any associated transactional currency re-measurement gains and losses are recognized in current operations. At both December 31, 2019 and December 31, 2018, there were no material gains or losses recognized. Revenue Recognition The Company records revenue in accordance with ASC 606, Revenue from Contracts with Customers Step 1: Identify the contract(s) with a customer. Step 2: Identify the performance obligations in the contract. Step 3: Determine the transaction price. Step 4: Allocate the transaction price to the performance obligations in the contract. Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation. Revenue is recognized when the Company satisfies its performance obligation under the contract by transferring the promised product to its customer that obtains control of the product. A performance obligation is a promise in a contract to transfer a distinct product to a customer. Most of the Company’s contracts have a single performance obligation, as the promise to transfer products or services is not separately identifiable from other promises in the contract and, therefore, not distinct. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products. As such, revenue is recorded net of returns, allowances, customer discounts, and incentives. Sales and other taxes are excluded from revenues. Invoiced shipping and handling costs are included in revenue. The adoption of this standard did not have a material impact on the Company’s financial statements. Disaggregation of Revenue The Company generated revenue for the years ended December 31, 2019 and 2018 by (i) delivering product to its commercial customers, (ii) completing and commissioning equipment projects at commercial customer sites and (iii) performing demonstrations of its technology at customers with the intent of entering into long term supply agreements based on the performance of the Company’s products during the demonstrations. Revenue for product sales is recognized at the point of time in which the customer obtains control of the product, at the time title passes to the customer upon shipment or delivery of the product based on the applicable shipping terms. Revenue for equipment sales is recognized upon commissioning and customer acceptance of the installed equipment per the terms of the purchase contract. Revenue for demonstrations and consulting services is recognized when performance obligations contained in the contract have been completed, typically the completion of necessary field work and the delivery of any required analysis per the terms of the agreement. The following table presents sales by operating segment disaggregated based on the type of product and geographic region for the years ended December 31, 2019, and 2018. Year ended December 31, 2019 Year ended December 31, 2018 United States International Total United States International Total Product revenue $ 10,746,714 $ 297,840 $ 11,044,554 $ 11,965,185 $ 149,968 $ 12,115,153 Demonstrations & Consulting revenue 183,448 95,543 278,991 131,681 - 131,681 Equipment revenue 93,481 - 93,481 49,028 - 49,028 $ 11,023,643 $ 393,383 $ 11,417,026 $ 12,145,894 $ 149,968 $ 12,295,862 Customer Acquisition Costs Customer acquisition costs are amortized on a straight-line bases over the life of the initial customer contract. The capitalized balance of customer acquisition costs was $0 and $34,467 on December 31, 2019 and December 31, 2018, respectively. Amortization expense for the years ended December 31, 2019 and 2018 was $0 and $137,866, respectively and included in cost of sales. Deferred Revenue Revenue is recognized in the period that delivery is made and performance obligations are met. In accordance with the terms of an agreement with one customer, the Company allocated a fixed amount of payments made against the total deliveries of product made during the contract period. As of December 31, 2019 and 2018 the Company had no deferred revenue. Income Taxes The Company follows the asset and liability method of accounting for income taxes under FASB ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. FASB ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. There were no unrecognized tax benefits as of December 31, 2019. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception. The Company may be subject to potential examination by federal, state, and city taxing authorities in the areas of income taxes. These potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions, and compliance with federal, state, and city tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months. The Company is no longer subject to tax examinations by tax authorities for years prior to 2017. Basic and Diluted Loss Per Common Share Basic net loss per common share is computed using the weighted average number of common shares outstanding. Diluted loss per share reflects the potential dilution from common stock equivalents, such as stock issuable pursuant to the exercise of stock options and warrants. For the years ended December 31, 2019 and 2018 basic and diluted earnings per share approximated each other. There were no dilutive potential common shares as of December 31, 2019 and 2018, because the Company incurred net losses and basic and diluted losses per common share are the same. The following common stock equivalents were excluded from the computation of diluted net loss per share of common stock because they were anti-dilutive. The exercise of these common stock equivalents would dilute earnings per share if the Company becomes profitable in the future. December 31 December 31 2019 2018 Stock Options 12,553,326 9,161,510 Warrants 5,690,378 4,105,398 Convertible debt 9,351,400 3,700,000 Total common stock equivalents excluded from diluted net loss per share 27,595,104 16,966,908 Concentration of Credit Risk Financial instruments that subject the Company to credit risk consist of cash and equivalents on deposit with financial institutions and accounts receivable. The Company’s cash as of December 31, 2019 is maintained at high-quality financial institutions and has not incurred any losses to date. Customer and Supplier Concentration For each of the years ended December 31, 2019 and 2018, 100% of the Company’s revenue related to eleven and eight customers respectively. At December 31, 2019 and 2018, 100% of the Company’s accounts receivable related to eight and seven customers respectively. For each of the years ended December 31, 2019 and 2018, 91% and 52% of the Company’s purchases related to two suppliers, respectively. At December 31, 2019 and 2018, 74% and 72% of the Company’s accounts payable and accrued expenses related to two vendors. The Company believes there are numerous other suppliers that could be substituted should the supplier become unavailable or non-competitive. Contingencies Certain conditions may exist which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company’s management and its legal counsel assess such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company, or unasserted claims that may result in such proceedings, the Company’s legal counsel evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they arise from guarantees, in which case the guarantees would be disclosed. Recently Adopted Accounting Standards In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) In July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815) The guidance in ASU 2017-11 is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted, and the guidance is to be applied using a full or modified retrospective approach. The Company early adopted ASU 2017-11 and changed its method of accounting for certain warrants that were initially recorded as liabilities during the year ended December 31, 2014 on a full retrospective basis. The adoption of ASU 2017-11 did not have a material impact on its consolidated financial statements. Recently Issued Accounting Standards In June 2018, the FASB issued ASU No. 2018-07, Compensation — Stock Compensation (Topic 718) In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820) In December 2019, the FASB issued authoritative guidance intended to simplify the accounting for income taxes (ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes”). This guidance eliminates certain exceptions to the general approach to the income tax accounting model and adds new guidance to reduce the complexity in accounting for income taxes. This guidance is effective for annual periods after December 15, 2020, including interim periods within those annual periods. The Company is currently evaluating the potential impact of this guidance on its consolidated financial statements. Management does not believe that any recently issued, but not yet effective accounting pronouncements, when adopted, will have a material effect on the accompanying consolidated financial statements. |
Going Concern and Financial Con
Going Concern and Financial Condition | 12 Months Ended |
Dec. 31, 2019 | |
Going Concern and Financial Condition | |
Note 3 - Going Concern and Financial Condition | Under ASC 205-40, Presentation of Financial Statements—Going Concern The accompanying consolidated financial statements as of December 31, 2019 have been prepared assuming the Company will continue as a going concern. As reflected in the consolidated financial statements, the Company had an accumulated deficit of $57.7 million and a negative working capital of $302,000 at December 31, 2019. Additionally, the Company had a net loss in the amount of $6.1 million and cash used by operating activities of $1.6 million for the year ended December 31, 2019. These factors raise substantial doubt about the Company’s ability to continue as a going concern for the next twelve months from the issuance of these consolidated financial statements within the Company’s Annual Report on Form 10-K. Although we anticipate continued significant revenues for products in be used in MATS compliance activities, no assurances can be given that the Company can obtain sufficient working capital through these activities and additional financing may be needed to meet its obligations. In February 2020, the Company closed on a one-year secured loan with a bank in the principal amount of $200,000, and in April 2020, the Company received loan proceeds in the amount of $299,300 pursuant to the Paycheck Protection Program under the Cares Act which was enacted on March 27, 2020 as a result of the COVID-19 pandemic. Nevertheless, the Company may need to raise additional equity or debt financing. While the Company believes in its ability to raise additional funds, no assurances can be given that the Company can maintain sufficient working capital through these efforts, or that the continued implementation of its business plan will generate sufficient revenues in the future to sustain ongoing operations. The accompanying consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the possible inability of the Company to continue as a going concern. |
Inventory
Inventory | 12 Months Ended |
Dec. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Note 4 - Inventory | Inventory was comprised of the following at December 31, 2019 and 2018: December 31, 2019 December 31, 2018 Raw Materials $ 223,790 $ 87,730 Work in Process 43,814 130,062 Spare Parts 27,632 26,967 Finished goods 218,262 264,657 $ 513,498 $ 509,416 |
Property And Equipment, Net
Property And Equipment, Net | 12 Months Ended |
Dec. 31, 2019 | |
Property And Equipment, Net | |
Note 5 - Property and Equipment, Net | Property and equipment at December 31, 2019 and 2018 are as follows: December 31 December 31 2019 2018 Equipment & Installation $ 1,965,659 $ 1,965,659 Trucking equipment 922,441 983,948 Computer equipment and software 67,126 117,212 Office equipment 27,155 27,155 Total equipment 2,982,381 3,093,974 Less: accumulated depreciation (2,707,745 ) (2,503,990 ) Construction in process 1,807,707 1,807,707 Property and equipment, net $ 2,082,343 $ 2,397,691 The Company uses the straight-line method of depreciation over 2 to 5 years. During the years ended December 31, 2019 and 2018 depreciation expense was $314,908, and $456,914. |
Intellectual Property
Intellectual Property | 12 Months Ended |
Dec. 31, 2019 | |
Intellectual Property | |
Note 6 - Intellectual Property | On January 15, 2009, the Company entered into an “Exclusive Patent and Know-How License Agreement Including Transfer of Ownership” with the Energy and Environmental Research Center Foundation, a non-profit entity (“EERCF”). Under the terms of the Agreement, the Company has been granted an exclusive license by EERCF for the technology to develop, make, have made, use, sell, offer to sell, lease, and import the technology in any coal-fired combustion systems (power plant) worldwide and to develop and perform the technology in any coal-fired power plant in the world. On April 24, 2017, the Company closed on the acquisition of all patent rights from EERCF including all patents and patents pending, domestic and foreign, relating to the foregoing technology. A total of 42 domestic and foreign patents and patent applications were included in the acquisition. In accordance with the terms of the License Agreement, the patent rights were acquired for the purchase price of (i) $2,500,000 in cash, and (ii) 925,000 shares of common stock of which 628,998 shares were issued to EERCF and 296,002 were issued to the inventors who had been designated by EERCF. The shares issued were valued at $518,000 ($0.56 per share), representing the value as of the closing date. License and patent costs capitalized as of December 31, 2019 and 2018 are as follows: December 31 December 31 2019 2018 Patents $ 3,068,995 $ 3,068,995 Less: Accumulated amortization (536,533 ) (335,333 ) License, net $ 2,532,462 $ 2,733,662 Amortization expense for the years ended December 31, 2019 and 2018 was $201,200 and $201,200, respectively. Estimated annual amortization for each of the next five years is $201,200. |
Convertible Notes Payable
Convertible Notes Payable | 12 Months Ended |
Dec. 31, 2019 | |
Convertible Notes Payable | |
Note 7 - Convertible Notes Payable | The Company has the following convertible notes payable outstanding as of December 31, 2019 and 2018: December 31, December 31, 2019 2018 Secured convertible promissory notes which mature upon the retirement of the New AC Midwest Secured Debt, bear interest at 10% per annum, and are convertible into one share of common stock, par value $0.001 per share. $ 990,000 $ 990,000 Unsecured convertible promissory notes which mature beginning on June 15, 2023, bear interest at 12% per annum, and are convertible into one share of common stock, par value $0.001 per share. 860,000 860,000 Unsecured convertible promissory notes which mature beginning on June 18, 2024, bear interest at 12% per annum, and are convertible into one share of common stock, par value $0.001 per share. 2,600,000 - Total convertible notes payable before discount 4,450,000 1,850,000 Less discounts and debt issuance costs (508,863 ) (89,430 ) Total convertible notes payable 3,941,137 1,760,570 Less current portion (990,000 ) - Convertible notes payable, net of current portion $ 2,951,137 $ 1,760,570 As of December 31, 2019, remaining scheduled principal payments due on convertible notes payable are as follows: Twelve months ended December 31, 2020 $ 990,000 2021 - 2022 - 2023 860,000 2024 2,600,000 thereafter - $ 4,450,000 As of December 31, 2019, the remaining future amortization of discounts are as follows: Twelve months ended December 31, Discounts 2020 $ 114,647 2021 114,334 2022 114,334 2023 105,477 2024 60,071 thereafter - $ 508,863 From July 30, 2013 through December 24, 2013, the Company sold convertible notes and warrants to unaffiliated accredited investors totaling $1,902,500. The notes bear interest at 10% per annum, are secured by the Company’s assets, and are convertible into one share of common stock, par value $0.001 per share, with the initial conversion ratio equal to $0.50 per share. The notes had an initial term of three years, but the maturity of the notes was extended during 2014 to match the retirement of the New AC Midwest Secured Debt. These securities were sold in reliance upon the exemption provided by Section 4(2) of the Securities Act and the safe harbor of Rule 506 under Regulation D promulgated under the Securities Act. Interest expense for the years ended December 31, 2019 and 2018, was $99,000 and $124,967, respectively. A discount on the notes payable of $841,342 was recorded based on the value of the warrants issued using a Black-Scholes options pricing model and was amortized over the initial five year life of the notes. Amortized interest expense for the years ended December 31, 2019 and 2018 on this discount was $0 and $74,447, respectively. As of December 31, 2019 and 2018, total principal of $990,000 and $990,000, respectively, was outstanding on these notes. On June 15, 2018, the Company issued 2018 Unsecured Notes totaling $560,000 and warrants to certain holders of the 2013 Notes in exchange for their secured 2013 Notes (see description above of the private placement offering commenced during the second quarter of 2018). The 2018 Unsecured Notes have a term of five years, bear interest at 12% per annum, and are convertible into one share of common stock, par value $0.001 per share, with the initial conversion ratio equal to $0.50 per share. For each dollar exchanged, the investor received a warrant to purchase one share of common stock of the Company at an exercise price of $0.70 per share. The 2018 Unsecured Notes may be converted at any time and from time to time in whole or in part prior to the maturity date thereof. Loss on this debt exchange was $44,036. A discount on the notes payable of $89,500 was recorded based on the value of the fair value of the note and warrants exchanged. The included warrants were valued using a Black-Scholes options pricing model. From August 31, 2018 through October 30, 2018, the Company issued additional 2018 Notes totaling $300,000 and warrants to unaffiliated accredited investors. A discount on the notes payable of $40,350 was recorded based on the fair value of the warrants issued with this note using a Black-Scholes options pricing model. Amortized interest expense for the years ended December 31, 2019 and 2018 on these discounts was $24,323 and $8,700, respectively. Interest expense for the years ended December 31, 2019 and 2018, was $202,200 and $46,587, respectively. As of December 31, 2019 and 2018, total principal of $860,000 and $860,000 was outstanding on the 2018 Unsecured Notes. The significant assumptions utilized for these Black-Scholes calculations consist of an expected life of equal to the expiration term of the option, historical volatility of 100% respectively, and a risk free interest rate of 3%. From June 18, 2019 through October 23, 2019, the Company sold convertible notes and warrants to unaffiliated accredited investors totaling $2,600,000. The notes bear interest at 12% per annum, are secured by the Company’s assets, and are convertible into one share of common stock, par value $0.001 per share, with the initial conversion ratio equal to $0.50 per share. The notes have a term of five years. Interest expense for the year ended December 31, 2019 was $124,600. A discount on the notes payable of $488,245 was recorded based on the relative fair value of the warrants issued using a Black-Scholes options pricing model and was amortized over the initial five year life of the notes. Amortized interest expense for the year ended December 31, 2019 on this discount was $37,737. As of December 31, 2019, total principal of $2,600,000 was outstanding on these notes. |
Related Party
Related Party | 12 Months Ended |
Dec. 31, 2019 | |
Related Party | |
Note 8 - Related Party | Secured Note Payable On November 29, 2016, pursuant to a new restated financing agreement entered with AC Midwest Energy, LLC (“AC Midwest”) on November 1, 2016, the Company closed on a new secured note with AC Midwest (the “New AC Midwest Secured Note”) in the original principal amount of $9,646,686, which was to mature on December 15, 2018.The New AC Midwest Secured Note is guaranteed by MES, is non-convertible and bears interest at a rate of 15.0% per annum, payable quarterly in arrears on or before the last day of each fiscal quarter. The New AC Midwest Secured Note is secured by all of the assets of the Companies. Interest expense for the years ended December 31, 2019 and 2018 was $40,753 and $66,694, respectively. On February 25, 2019, per Amendment No. 3 to the Amended and Restate Financing Agreement, AC Midwest agreed to waive compliance with a certain financial covenant of the Restated Financing Agreement and strike this covenant in its entirety as of the effective date of the amendment. Also, pursuant to Amendment No. 3, the parties agreed that the maturity date for the remaining principal balance due under the AC Midwest Secured Note would be extended from December 15, 2018 to August 25, 2022. The amendment was accounted for as an extinguishment in accordance with ASC 470-50 with no gain or loss recorded. As of December 31, 2019 and December 31, 2018, total principal of $271,686 and $271,686 was outstanding on this note. Unsecured Note Payable The Company has the following unsecured note payable - related party outstanding as of December 31, 2019 and 2018: Unsecured Note Payable $ 13,154,931 $ 13,000,000 Less discounts and debt issuance costs (5,243,033 ) (1,218,048 ) Total convertible notes payable 7,911,898 11,781,952 Less current portion - - Convertible notes payable, net of current portion $ 7,911,898 $ 11,781,952 On November 29, 2016, pursuant to a new restated financing agreement entered with AC Midwest on November 1, 2016, the Company closed on an unsecured note with AC Midwest (the “AC Midwest Subordinated Note”) in the principal amount of $13,000,000, which was to mature on December 15, 2020. On February 25, 2019, the Company, entered into an Unsecured Note Financing Agreement (the “Unsecured Note Financing Agreement”) with AC Midwest, pursuant to which AC Midwest issued an unsecured note in the principal amount of $13,154,931 (the “New AC Midwest Unsecured Note”), which represented the outstanding principal and accrued and unpaid interest at closing. In accordance with ASC 470-60-15-5, since the present value of the cash flows under the new debt instrument was at least ten percent different from the present value of the remaining cash flows under the terms of the original debt instrument, the Company accounted for the amendment to note as a debt extinguishment. Accordingly, the Company wrote off the remaining debt discount on the original Debentures of $1,070,819. Since the amendment was with a related party defined in ASC 470-50-40-2 the Company recorded a Capital contribution of $3,412,204 on this exchange which is primarily related to the difference in fair value of the note on the date of the exchange. The Company determined that the rate of interest on the AC Midwest Subordinated Note was a below market rate of interest and determined that a discount of $6,916,687 should be recorded. This discount is based on an applicable market rate for unsecured debt for the Company of 21% and will be amortized as interested expense over the life of the loan. Amortized discount recorded as interest expense for the year ended December 31, 2019 was $1,763,024. As of December 31, 2019, the unamortized balance of the discount was $5,243,033. The New AC Midwest Unsecured Note, which has been issued in exchange for the AC Midwest Subordinated Note which has now been cancelled, will mature on August 25, 2022 (the “Maturity Date”). It bears a zero cash interest rate. If the original principal amount is paid in full on or before August 25, 2020 (18 months from issuance), AC Midwest shall be entitled to a profit participation preference equal to 0.5 times the original principal amount, and if the original principal amount is paid in full after August 25, 2020, AC Midwest shall be entitled to a profit participation preference equal to 1.0 times the original principal amount (the “Profit Share”). The Profit Share is “non-recourse” and shall only be derived from and computed on the basis of, and paid from, Net Litigation Proceeds from claims relating to the Company’s intellectual property, Net Revenue Share and Adjusted Free Cash Flow (as such terms are defined in the Unsecured Note Financing Agreement). The Profit Share In connection with the New AC Midwest Unsecured Note the Company shall pay the principal outstanding, as well as the Profit Share, in an amount equal to 60.0% of Net Litigation Proceeds until such time as any litigation funder has been paid in full and, thereafter, in an amount equal to 75.0% of such Net Litigation Proceeds until the Unsecured Note and Profit Share have been paid in full. In addition, and within 30 days following the end of each fiscal quarter, the Company shall pay the principal outstanding and Profit Share in an aggregate amount equal to the Net Revenue Share (which means 60.0% of Net Licensing Revenue (as defined) from licensing the Company’s intellectual property) plus Adjusted Free Cash Flow until the Unsecured Note and Profit Share have been paid in full, provided, however, that such payments shall exclude the first $3,500,000 of Net Licensing Revenue and Adjusted Free Cash Flow achieved commencing with the fiscal quarter ending March 31, 2019. Any remaining principal balance due on the Unsecured Note shall be due and payable in full on the Maturity Date. The Profit Share, however, if not paid in full on or before the Maturity Date, shall remain subject to Unsecured Note Financing Agreement until full and final payment. The company is utilizing the methodology behind the ASC 815 and ASC 480 to determine how to account for the profit-sharing portion of the note payable. Although the transaction is not indexed to MEEC’s stock the profit sharing seems like a freestanding financial instrument because the profit sharing is not callable by the lender, it will be paid out past the maturity of the note payable and, the fair value will fluctuate over time based on payment predictions. The Profit Share was determined to have a fair value of $1,954,383 upon grant. This was calculated with discounted cash flow model, with the following key valuation assumptions: estimated term of seventeen years with $250,000 paid quarterly after the first three years, and an annual market interest rate of 21%. The profit share liability will be marked to market every quarter utilizing managements estimates. The following are the changes in the profit share liabilities during the year ended December 31, 2019. Profit Share as of January 1, 2019 $ - Addition 1,954,383 Loss on change in fair value of profit share 374,462 Profit Share as of December 31, 2019 $ 2,328,845 Related Party Transactions Kaye Cooper Kay & Rosenberg, LLP provides certain legal services to the Company and was paid $329,729 in 2019 for legal services rendered and disbursement incurred. David M. Kaye, a Director and Secretary of the Company, is a partner of the law firm. |
Operating Leases
Operating Leases | 12 Months Ended |
Dec. 31, 2019 | |
Operating Leases | |
Note 9 - Operating Leases | In 2016, the Company entered into a six-year agreement to lease trailers used in the delivery of its products. Monthly payments currently total $32,820. On January 27, 2015, the Company entered into a lease for office space in Lewis Center, Ohio, commencing February 1, 2015 which lease as amended expired in February 2020. The lease provides for the option to extend the lease for up to five additional years. Monthly rent is $1,575 through February 2020. The Company did not renew this lease. On July 1, 2015, the Company entered into a five-year lease for warehouse space in Corsicana, Texas. Rent is $3,750 monthly throughout the term of the lease. The Company is also responsible for the pro rata share of the projected monthly expenses for the property taxes. The current pro rata share is $882. The lease was extended on June 1, 2019 for five years. The company recorded a right of use asset and an operating lease liability of $145,267. This amount represents the difference between the value from the remaining lease and the extended lease. On September 1, 2019, the Company entered into a one-year lease for office space in Grand Forks, North Dakota. Monthly rent is $590 a month through August 2020. Future remaining minimum lease payments under these non-cancelable leases are as follows: For the twelve months ended December 31 2020 $ 438,840 2021 438,840 2022 351,027 2023 45,000 2014 11,250 Total 1,284,957 Less discount (94,241 ) Total lease liabilities 1,190,716 Less current portion (383,307 ) Operating lease obligation, net of current portion $ 807,409 The weighted average remaining lease term for operating leases is 2.0 years and the weighted average discount rate used in calculating the operating lease asset and liability is 5.0%. For the year ended December 31, 2019, payments on lease obligations were $457,740 and amortization on the right of use assets was $378,261. For the year ended December 31, 2019, the Company’s lease cost consists of the following components, each of which is included in costs and expenses within the Company’s consolidated statements of operations: Year Ended December 31, 2019 Operating lease cost $ 1,284,957 Short-term lease cost (1) 3,150 Total lease cost $ 1,288,107 (1) Short-term lease costs includes any lease with a term of less than 12 months |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies | |
Note 10 - Commitments and Contingencies | Fixed Price Contract The Company’s multi-year contracts with its commercial customers contain fixed prices for product. These contracts expire through 2019 and expose the Company to the potential risks associated with rising material costs during that same period. Revenue reported during interim periods were recorded based on the facts and circumstances at the time and any differences noted when the final revenue is determined is considered to be a change in estimate for the period. Legal proceedings On July 17, 2019, the Company initiated patent litigation against certain defendants in the U.S. District Court for the District of Delaware for infringement of United States Patent Nos. 10,343,114 (the “‘114 Patent”) and 8,168,147 (the “‘147 Patent”) owned by the Company. These patents relate to the Company’s two-part Sorbent Enhancement Additive (SEA ® On April 21, 2020, NRG Energy, Inc., Talen Energy Corporation and Vistra Energy Corp., three of the defendants in the above action, filed two petitions for Inter Partes Review (IPR) with the United States Patent and Trademark Office (USPTO), seeking to invalidate certain claims to the ‘114 Patent. The Company believes that such claims of invalidity are without merit. Except for the foregoing disclosures, the Company is not presently aware of any other material pending legal proceedings to which the Company is a party or of which any of its property is the subject. Litigation, including patent litigation, is inherently subject to uncertainties. As such, there can be no assurance that the Company will be successful in litigating and/or settling any of these claims. |
Stock Based Compensation
Stock Based Compensation | 12 Months Ended |
Dec. 31, 2019 | |
Stock Based Compensation | |
Note 11 - Stock Based Compensation | The Company accounts for stock-based compensation awards in accordance with the provisions of ASC 718, which addresses the accounting for employee stock options which requires that the cost of all employee stock options, as well as other equity-based compensation arrangements, be reflected in the consolidated financial statements over the vesting period based on the estimated fair value of the awards. A summary of stock option activity for the years ended December 31, 2019 and 2018 is presented below: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (years) Aggregate Intrinsic Value December 31, 2017 8,463,184 1.26 3.00 Grants 1,423,326 0.26 4.40 Expirations (725,000 ) 0.69 - December 31, 2018 9,161,510 1.15 2.00 - Grants 4,700,000 0.27 5.00 Expirations (1,308,184 ) 0.27 - December 31, 2019 12,553,326 0.55 4.02 927 Options exercisable at: December 31, 2018 9,161,510 1.15 2.00 - December 31, 2019 12,563,326 0.55 4.02 927 The Company utilized the Black-Scholes options pricing model to value its options granted. The assumptions used for options granted during the years ended December 31, 2019 and 2018 are as follows: December 31, December 31, Exercise price $0.25-$0.27 $0.17-$0.33 Expected dividends 0% 0% Expected volatility 100% - 109% 100% Risk free interest rate 1.73% - 3% 3% Expected life 5 years 5 years During 2018, the Company issued nonqualified stock options to acquire 1,423,236 shares under the Company’s 2017 Equity Plan. The options granted are exercisable at prices ranging from $0.17 to $0.33 per share, representing the fair market value of the common stock as of the date of the grant as determined under the 2017 Equity Plan. The options are fully vested and exercisable as of the date of grant and will expire five year thereafter. Based on a Black-Scholes valuation model, these options were valued at $272,620 in accordance with FASB ASC Topic 718. On February 5, 2018, the Company released the restriction on stock options to acquire 750,000 shares of the Company’s common stock issued to Rick MacPherson on August 31, 2016 making them now fully vested and exercisable. Based on a Black-Scholes valuation model, these options were valued at $76,543 in accordance with FASB ASC Topic 718. On May 14, 2019, Frederick Van Zijl resigned as a director of the Company. In connection with such resignation, the Company has agreed to issue, and Mr. Van Zijl has agreed to accept, an aggregate of 235,184 shares of common stock of the Company in full and complete payment for service on the Board since his appointment in October 2018. Compensation of $63,500 based on the market price of the shares on the date of issuance was included in selling, general and administrative expenses within the Company’s consolidated statements of operations. On June 4, 2019, Allan T. Grantham resigned as a director of the Company. In connection with such resignation, the Company has agreed to issue, and Mr. Grantham has agreed to accept, an aggregate of 229,333 shares of common stock of the Company in full and complete payment for service on the Board for 2018 and 2019. Compensation of $55,040 based on the market price of the shares on the date of issuance was included in selling, general and administrative expenses within the Company’s consolidated statements of operations. On June 28, 2019, the Company granted nonqualified stock options to acquire an aggregate of 4,600,000 shares of the Company’s common stock under the Company’s 2017 Equity Plan to certain executive officers, employees and others. The options granted are exercisable at $0.27 per share, representing the fair market value of the common stock on the date of grant as determined under the 2017 Equity Plan. The options are fully vested and exercisable as of the date of grant and will expire five years thereafter. Based on a Black-Scholes valuation model, these options were valued at $898,207 in accordance with FASB ASC Topic 718 which was included in selling, general and administrative expenses within the Company’s consolidated statements of operations. Also on June 28, 2019, the Company extended the expiration dates of previously granted nonqualified stock options to acquire an aggregate of 4,675,000 shares of the Company’s common stock under the Company’s 2014 Equity Plan to certain executive officers, employees and others. The extended options are exercisable from $0.42 to $1.36 per share, representing the original fair market value of the common stock on the date of grant as determined under the 2014 Equity Plan. The options are fully vested and exercisable and will now expire five years from the date of the extension. Based on a Black-Scholes valuation model, these options were valued at $745,989 in accordance with FASB ASC Topic 718 which was included in selling, general and administrative expenses within the Company’s consolidated statements of operations. On December 20, 2019, the Company granted nonqualified stock options to acquire an aggregate of 100,000 shares of the Company’s common stock under the Company’s 2017 Equity Plan. The options were granted as compensation for a one year consulting agreement. The options granted are exercisable at $0.25 per share, representing the fair market value of the common stock on the date of grant as determined under the 2017 Equity Plan. The options are fully vested and exercisable as of the date of grant and will expire five years thereafter. Based on a Black-Scholes valuation model, these options were valued at $18,723 in accordance with FASB ASC Topic 718. The fair value of the option will be amortized to selling, general and administrative expenses within the Company’s consolidated statements of operations over one year. |
Warrants
Warrants | 12 Months Ended |
Dec. 31, 2019 | |
Warrants | |
Note 12 - Warrants | Sold and issued warrants are subject to the provisions of FASB ASC 815-10, the Company utilized a Black-Scholes options pricing model to value the warrants sold and issued. This model requires the input of highly subjective assumptions such as the expected stock price volatility and the expected period until the warrants are exercised. When calculating the value of warrants issued, the Company uses a volatility factor of 100%, a risk free interest rate and the life of the warrant for the exercise period. The following is a summary of the Company’s warrant activity: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (years) Aggregate Intrinsic Value December 31, 2017 7,237,763 $ 0.51 1.35 Grants 860,000 0.70 5.00 Expirations (3,992,365 ) 0.46 - December 31, 2018 4,105,398 0.59 1.79 - Grants 3,600,000 0.70 5.00 Expirations (2,015,020 ) 0.69 - December 31, 2019 5,690,378 0.63 3.72 - Warrants exercisable at: December 31, 2018 4,105,398 0.59 1.79 - December 31, 2019 5,690,378 0.63 3.72 - The following table summarizes information about common stock warrants outstanding at December 31, 2019: Outstanding Exercisable Exercise Price Number Outstanding Weighted Average Remaining Contractual Life (years) Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price $ 0.70 4,460,000 4.45 $ 0.70 4,460,000 $ 0.70 0.45 150,000 0.92 0.45 150,000 0.45 0.35 1,080,378 * 1.13 0.35 1,080,378 0.35 $ 0.35 - $0.70 5,690,378 3.72 $ 0.63 5,690,378 $ 0.63 * 205,000 warrants exercisable at $0.35 contain dilution protections that increase the number of shares purchasable at exercise upon the issuance of securities at a price below the current exercise price. The Company utilized the Black-Scholes options pricing model. The assumptions used for warrants granted during the years ended December 31, 2019 and 2018 are as follows: December 31, December 31, Exercise price $0.70 $0.70 Expected dividends 0% 0% Expected volatility 100% - 112% 100% Risk free interest rate 1.58% - 3% 3% Expected life 5 years 5 years On June 15, 2018, the Company issued unsecured convertible notes and warrants to unaffiliated accredited investors totaling $560,000 in exchange for outstanding secured convertible notes payable. The notes are convertible into one share of common stock, with the initial conversion ratio equal to $0.50 per share. The investors received a total of 560,000 warrants to purchase one shares of common stock with an exercise price of $0.70 per share. These securities were sold in reliance upon the exemption provided by Section 4(a)(2) of the Securities Act and the safe harbor of Rule 506 under Regulation D promulgated under the Securities Act, as well as under Section 3(a)(9) under the Securities Act. Using a Black-Scholes Valuation model these warrants had a value of $89,450 which was recorded as a discount on the notes payable and will be amortized over the life of the associated notes payable. On August 31, 2018, the Company issued unsecured convertible notes and warrants to unaffiliated accredited investors totaling $200,000. The notes are convertible into one share of common stock, with the initial conversion ratio equal to $0.50 per share. The investors received a total of 200,000 warrants to purchase one shares of common stock with an exercise price of $0.70 per share. These securities were sold in reliance upon the exemption provided by Section 4(a)(2) of the Securities Act and the safe harbor of Rule 506 under Regulation D promulgated under the Securities Act. Using a Black-Scholes Valuation model these warrants had a value of $28,900 which was recorded as a discount on the notes payable and will be amortized over the life of the associated notes payable. On October 31, 2018, the Company issued unsecured convertible notes and warrants to unaffiliated accredited investors totaling $100,000. The notes are convertible into one share of common stock, with the initial conversion ratio equal to $0.50 per share. The investors received a total of 100,000 warrants to purchase one shares of common stock with an exercise price of $0.70 per share. These securities were sold in reliance upon the exemption provided by Section 4(a)(2) of the Securities Act and the safe harbor of Rule 506 under Regulation D promulgated under the Securities Act. Using a Black-Scholes Valuation model these warrants had a value of $11,450 which was recorded as a discount on the notes payable and will be amortized over the life of the associated notes payable. On August 12, 2019, the Company issued 37,210 shares of common stock upon the cashless exercise of warrants to purchase 167,039 shares of common stock for $0.35 per share based on a market value of $0.45 per share as determined under the terms of the warrant. From June through October 2019, the Company issued unsecured convertible notes and five-year warrants to unaffiliated accredited investors totaling $2,600,000. The notes are convertible into shares of common stock, with the initial conversion ratio equal to $0.50 per share. The investors received warrants to purchase a total of 2,600,000 shares of common stock with an exercise price of $0.70 per share. These securities were sold in reliance upon the exemption provided by Section 4(a)(2) of the Securities Act and the safe harbor of Rule 506 under Regulation D promulgated under the Securities Act. Using a Black-Scholes Valuation model these warrants had a value of $525,142 which was recorded as a discount on the notes payable and will be amortized over the life of the associated notes payable. On October 23, 2019, and pursuant to an advisory agreement executed on that date for a term of one year with an unaffiliated third party, the Company granted such unaffiliated third party a vested three-year warrant to purchase 1,000,000 shares of common stock with an exercise price of $0.70 per share, exercisable on a cash basis only. Such warrants were issued as and for the entire compensation to paid to the advisor for all services to be rendered during the term. Based on a Black-Scholes valuation model, these options were valued at $243,294 in accordance with FASB ASC Topic 718. The fair value of the option will be amortized to selling, general and administrative expenses within the Company’s consolidated statements of operations over one year. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Taxes | |
Note 13 - Income Taxes | Below is breakdown of the income tax provisions for the years ended December 31: 2019 2018 Federal Current $ - $ - Deferred (1,278,000 ) (536,000 ) State and local Current 14,000 22,000 Deferred (196,000 ) (116,000 ) Change in valuation allowance 1,474,000 652,000 Income tax provision (benefit) $ 14,000 $ 22,000 The expected tax expense (benefit) based on the statutory rate is reconciled with actual tax expense benefit as follows: For the Year Ended December 31, 2019 For the Year Ended December 31, 2018 U.S. federal statutory rate 21.0 % 21.0 % State taxes 4.3 % (0.5 )% Other permanent and prior period adjustments (1.4 )% (7.4 )% Valuation allowance (24.2 )% (13.6 )% Income tax provision (0.3 )% (0.5 )% Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Companys deferred tax assets and liabilities are as follows at December 31: 2019 2018 Deferred tax assets: Net operating loss carryforwards $ 5,456,000 $ 4,328,000 Stock based compensation 1,285,000 888,000 Other 81,000 115,000 Total deferred tax assets 6,822,000 5,331,000 Deferred tax liabilities: Property and equipment (57,000 ) (51,000 ) Other (44,000 ) (33,000 ) Total deferred tax liabilities (101,000 ) (84,000 ) Valuation Allowance (6,721,000 ) (5,247,000 ) Net deferred tax asset $ - $ - The Company has U.S. federal net operating loss carryovers (NOLs) of approximately $22,640,000 and $20,608,000 at December 31, 2019 and 2018, respectively, available to offset 80% of taxable net income in a given year. The Company has state net operating loss carryovers (NOLs) of approximately $3,531,815 and $2,873,351 at December 31, 2019 and 2018, respectively. If not used, these NOLs may be subject to limitation under Internal Revenue Code Section 382 should there be a greater than 50% ownership change as determined under the regulations. The Company plans on undertaking a detailed analysis of any historical and/or current Section 382 ownership changes that may limit the utilization of the net operating loss carryovers. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon future generation for taxable income during the periods in which temporary differences representing net future deductible amounts become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. After consideration of all the information available, Management believes that significant uncertainty exists with respect to future realization of the deferred tax assets and has therefore established a full valuation allowance. For the years ended December 31, 2019 and 2018, the change in the valuation allowance was $1,474,000 and $652,000, respectively. The Company evaluated the provisions of ASC 740-10 related to the accounting for uncertainty in income taxes recognized in an enterprises financial statements. ASC 740-10 prescribes a comprehensive model for how a company should recognize, present, and disclose uncertain positions that the Company has taken or expects to take in its tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. Differences between tax positions taken or expected to be taken in a tax return and the net benefit recognized and measured pursuant to the interpretation are referred to as unrecognized benefits. A liability is recognized (or amount of net operating loss carry forward or amount of tax refundable is reduced) for unrecognized tax benefit because it represents an enterprises potential future obligation to the taxing authority for a tax position that was not recognized as a result of applying the provisions of ASC 740-10. If applicable, interest costs related to the unrecognized tax benefits are required to be calculated and would be classified as Other expenses Interest in the statement of operations. Penalties would be recognized as a component of General and administrative. No interest or penalties on unpaid tax were recorded during the years ended December 31, 2019 and 2018, respectively. As of December 31, 2019 and 2018, no liability for unrecognized tax benefits was required to be reported. The Company does not expect any significant changes in its unrecognized tax benefits in the next year. |
Restatement of previously issue
Restatement of previously issued financial statements (unaudited) | 12 Months Ended |
Dec. 31, 2019 | |
Restatement of previously issued financial statements (unaudited) | |
Note 14 - Restatement of previously issued financial statements (unaudited) | On April 13, 2020, the Company concluded that a gain on debt restructuring recognized during the first quarter of 2019 (relating to the New AC Midwest Unsecured Note) should have been accounted for as a capital transaction. Since the New AC Midwest Unsecured Note was held by a related party, the gain should have been recorded as a capital transaction under ASC 470-50-40. The profit-sharing portion also should have been bifurcated from the loan and shown separately on the Consolidated Balance Sheets of the financial statements. See Note 8. The following tables summarize the effects of the restatements on the specific items presented in the Company’s historical unaudited interim consolidated financial statements previously included in the Company’s Quarterly Reports on Form 10-Q as of and for the three month period ended March 31, 2019: CONSOLIDATED BALANCE SHEETS MARCH 31, 2019 As previously Adjustment As restated LIABILITIES AND STOCKHOLDERS’ DEFICIT Profit Share liability $ - $ 1,991,940 $ 1,991,940 Unsecured note payable, net of discount and issuance costs 8,403,968 (1,981,568 ) 6,422,400 Total liabilities 14,801,425 10,372 14,811,797 Stockholders’ deficit Additional paid-in capital 42,785,990 3,412,204 46,198,194 Accumulated deficit (49,197,401 ) (3,422,576 ) (52,619,977 ) Total stockholders’ deficit (6,335,165 ) (10,372 ) (6,345,537 ) Total liabilities and stockholders’ deficit $ 8,466,260 $ - $ 8,466,260 MIDWEST ENERGY EMISSIONS CORP. AND SUBSIDIARIES FOR THE THREE MONTHS ENDED MARCH 31, 2019 As previously Adjustment As restated Interest expense & letter of credit fees $ 529,193 $ (27,185 ) $ 502,008 Loss on change in fair value of profit share - 37,557 37,557 Gain on debt restructuring (3,412,204 ) 3,412,204 - Total costs and expenses 423,524 3,422,576 3,846,100 Net income (loss) $ 2,363,797 $ (3,422,576 ) $ (1,058,779 ) Net loss per common share - basic and diluted: $ 0.03 $ (0.04 ) $ (0.01 ) CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 2019 As previously Adjustment As restated Cash flows from operating activities Net income (loss) $ 2,363,797 $ (3,422,576 ) $ (1,058,779 ) Adjustments to reconcile net loss to net cash Amortization of discount of notes payable 303,697 (27,185 ) 276,512 Loss on change in fair value of profit share - 37,557 37,557 Gain on debt restructuring (3,412,204 ) 3,412,204 - Net cash provided by (used in) operating activities $ 68,245 $ - $ 68,245 The following tables summarize the effects of the restatements on the specific items presented in the Company’s historical unaudited interim consolidated financial statements previously included in the Company’s Quarterly Reports on Form 10-Q as of and for the three and six month periods ended June 30, 2019: CONDENSED CONSOLIDATED BALANCE SHEETS JUNE 30, 2019 As previously Adjustment As restated LIABILITIES AND STOCKHOLDERS’ DEFICIT Profit Share liability $ - $ 2,097,655 $ 2,097,655 Secured note payable 271,686 - 271,686 Unsecured note payable, net of discount and issuance costs 9,095,119 (2,179,831 ) 6,915,288 Total liabilities 16,654,136 (82,176 ) 16,571,960 Stockholders’ deficit Additional paid-in capital 44,745,926 3,412,204 48,158,130 Accumulated deficit (52,036,522 ) (3,330,028 ) (55,366,550 ) Total stockholders’ deficit (7,213,886 ) 82,176 (7,131,710 ) Total liabilities and stockholders’ deficit $ 9,440,250 $ - $ 9,440,250 CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 2019 FOR THE SIX MONTHS ENDED JUNE 30, 2019 As previously Adjustment As restated As previously Adjustment As restated Interest expense & letter of credit fees $ 763,873 $ (198,263 ) $ 565,610 $ 1,293,067 $ (225,448 ) $ 1,067,619 Loss on change in fair value of profit share - 105,715 105,715 - 143,272 143,272 (Gain)/Loss on debt restructuring - - - (3,412,204 ) 3,412,204 - Total costs and expenses 5,348,871 (92,548 ) 5,256,323 5,772,394 3,330,028 9,102,422 Net loss $ (2,839,121 ) $ 92,548 $ (2,746,573 ) $ (475,324 ) $ (3,330,028 ) $ (3,805,352 ) Net loss per common share - basic and diluted: $ (0.04 ) $ (0.00 ) $ (0.04 ) $ (0.01 ) $ (0.04 ) $ (0.05 ) CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2019 As previously Adjustment As restated Cash flows from operating activities Net loss $ (475,324 ) $ (3,330,028 ) $ (3,805,352 ) Adjustments to reconcile net loss to net cash used in operating activities: Amortization of discount of notes payable 938,532 (225,448 ) 713,084 Loss on change in fair value of profit share - 143,272 143,272 Gain on debt restructuring (3,412,204 ) 3,412,204 - Net cash used in operating activities $ (506,674 ) $ - $ (506,674 ) The following tables summarize the effects of the restatements on the specific items presented in the Company’s historical unaudited interim consolidated financial statements previously included in the Company’s Quarterly Reports on Form 10-Q as of and for the three and nine month periods ended September 30, 2019: CONSOLIDATED BALANCE SHEETS SEPTEMBER 30, 2019 As previously Adjustment As restated LIABILITIES AND STOCKHOLDERS’ DEFICIT Current liabilities Profit Share liability $ - $ 2,210,230 $ 2,210,230 Unsecured note payable, net of discount and issuance costs 9,752,882 (2,339,289 ) 7,413,593 Total liabilities 17,177,693 (129,059 ) 17,048,634 Stockholders’ deficit Additional paid-in capital 44,882,209 3,412,204 48,294,413 Accumulated deficit (52,887,063 ) (3,283,145 ) (56,170,208 ) Total stockholders’ deficit (7,928,107 ) 129,059 (7,799,048 ) Total liabilities and stockholders’ deficit $ 9,249,586 $ - $ 9,249,586 CONSOLIDATED STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2019 FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2019 As previously Adjustment As restated As previously Adjustment As restated Interest expense & letter of credit fees $ 782,695 $ (159,458 ) $ 623,237 $ 2,075,761 $ (529,918 ) $ 1,690,855 Loss on change in fair value of profit share - 112,575 112,575 - 255,847 255,847 (Gain)/Loss on debt restructuring - - - (3,412,204.00 ) 3,412,204.00 - Total costs and expenses 4,446,648 (46,883 ) 4,399,765 10,219,042 3,138,133 13,502,187 Net loss $ (850,541 ) $ 46,883 $ (803,658 ) $ (1,325,865 ) $ (3,138,133 ) $ (4,609,010 ) Net loss per common share-basic and diluted: $ (0.01 ) $ - $ (0.01 ) $ (0.02 ) $ (0.04 ) $ (0.06 ) CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2019 As previously Adjustment As restated Cash flows from operating activities Net loss $ (1,325,865 ) $ (3,283,145 ) $ (4,609,010 ) Adjustments to reconcile net loss to net cash used in operating activities: Amortization of discount of notes payable 1,585,686 (384,906 ) 1,200,780 Loss on change in fair value of profit share 255,847 255,847 Gain on debt restructuring (3,412,204 ) 3,412,204 - Net cash used in operating activities $ (1,304,626 ) $ - $ (1,304,626 ) CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT FOR THE MONTHS ENDED MARCH 31, 2019, THE SIX MONTHS ENDED JUNE 30, 2019 AND THE NINE MONTHS ENDED SEPTEMBER 30, 2019 (Restated) Common Stock Additional Accumulated Shares Par Value Paid-in Capital (Deficit) Total Balance - January 1, 2019 76,246,113 $ 76,246 $ 42,785,990 $ (51,483,332 ) $ (8,621,096 ) Cumulative effect of change in accounting principle related to accounting for leases - - - (77,866 ) (77,866 ) Capital contribution - - 3,412,204 - 3,412,204 Net income - - - (1,058,779 ) (1,058,779 ) Balance - March 31, 2019 76,246,113 $ 76,246 $ 46,198,194 $ (52,619,977 ) $ (6,345,537 ) Stock issued per resignation agreements 464,517 464 118,076 - 118,540 Issuance of stock options - - 898,207 - 898,207 Extension of certain stock option expiration - - 745,989 - 745,989 Issuance of warrants, recorded as discount on convertible notes payable - - 197,664 - 197,664 Net loss - - - (2,746,573 ) (2,746,573 ) Balance - June 30, 2019 76,710,630 $ 76,710 $ 48,158,130 $ (55,366,550 ) $ (7,131,710 ) Stock issued upon cashless warrant exercise 37,120 37 (37 ) - - Issuance of warrants, recorded as discount on convertible notes payable - - 136,320 - 136,320 Net loss - - - (803,658 ) (803,658 ) Balance - September 30, 2019 76,747,750 $ 76,747 $ 48,294,413 $ (56,170,208 ) $ (7,799,048 ) |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Events | |
Note 15 - Subsequent Events | As of January 1, 2020, and pursuant to an advisory agreement dated as of November 20, 2019 and effective as of January 1, 2020 for a term of one year with a nonaffiliated third party, the Company issued 1,000,000 shares of common stock of the Company to such third party as and for the entire compensation to be paid for all services to be rendered during the term. On February 25, 2020, and pursuant to a Business Loan Agreement entered into with First International Bank & Trust in Grand Forks, ND, the Company’s wholly owned subsidiary, MES, Inc. closed on a one-year secured loan in the principal amount of $200,000 bearing interest at 8.75% per annum. Principal and interest is to be paid in equal monthly installments until the loan is paid in full on February 26, 2021. On April 14, 2020, the Company received loan proceeds in the amount of $299,300 from First International Bank & Trust pursuant to the Paycheck Protection Program (the “PPP Loan”) under the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”), which was enacted on March 27, 2020. The loan, which is in the form of a Note dated April 14, 2020, matures on April 14, 2022 and bears interest at a rate of 1.0% per annum, with one interest payment on April 14, 2021 and one principal and interest payment on maturity. The principal and accrued interest under the PPP Loan is forgivable after eight weeks if the Company uses the PPP Loan proceeds for eligible purposes, including payroll, benefits, rent and utilities, and otherwise complies with the PPP requirements. In order to obtain forgiveness of the PPP Loan, the Company must submit a request and provide satisfactory documentation regarding its compliance with applicable requirements. |
Summary Of Significant Accoun_2
Summary Of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Summary Of Significant Accounting Policies (Policies) | |
Basis of Presentation | The accompanying consolidated financial statements have been prepared in accordance with the Generally Accepted Accounting Principles in the United States of America (“GAAP”). |
Principles of Consolidation | The consolidated financial statements include the accounts of Midwest Energy Emissions Corp. and its wholly-owned subsidiary, MES, Inc. Intercompany balances and transactions have been eliminated in consolidation. |
Reclassifications | Certain prior year amounts in the consolidated financial statements and the notes thereto have been reclassified where necessary to conform to the current year presentation. These reclassifications did not affect the prior period total assets, total liabilities, stockholders’ deficit, net loss or net cash used in operating activities. |
Use of Estimates | The preparation of consolidated 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, valuation of equity issuances and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. The Company uses estimates in accounting for, among other items, revenue recognition, allowance for doubtful accounts, stock-based compensation, income tax provisions, excess and obsolete inventory reserve and impairment of intellectual property. Actual results could differ from those estimates. |
Cash | Cash and cash equivalents include all highly liquid monetary instruments with original maturities of three months or less when purchased. These investments are carried at cost, which approximates fair value. Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash deposits. The Company maintains its cash in institutions insured by the Federal Deposit Insurance Corporation (“FDIC”). At times, the Company’s cash and cash equivalent balances may be uninsured or in amounts that exceed the FDIC insurance limits. The Company has not experienced any loses on such accounts. At December 31, 2019 and 2018, the Company had no cash equivalents. As of December 31, 2019, approximately $1,249,000 of cash exceeded the FDIC insurance limits. |
Accounts Receivable | Trade accounts receivable are stated at the amount the Company expects to collect. The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. Management considers the following factors when determining the collectability of specific customer accounts: customer credit-worthiness, past transaction history with the customer, current economic industry trends, and changes in customer payment terms. Past due balances over 90 days and other higher risk amounts are reviewed individually for collectability. If the financial condition of the Company’s customers were to deteriorate, adversely affecting their ability to make payments, additional allowances would be required. Based on management’s assessment, the Company provides for estimated uncollectible amounts through a charge to earnings and a credit to a valuation allowance. Balances that remain outstanding after the Company has used reasonable collection efforts are written off through a charge to the valuation allowance and a credit to accounts receivable. At December 31, 2019 and 2018, the allowance for doubtful accounts was zero. |
Inventory | Inventories are stated at the lower of cost (first-in, first-out basis) or net realizable value. Inventories are periodically evaluated to identify obsolete or otherwise impaired products and are written off when management determines usage is not probable. The Company estimates the balance of excess and obsolete inventory by analyzing inventory by age using last used and original purchase date and existing sales pipeline for which the inventory could be used. As of December 31, 2019 and 2018, the Company has no valuation allowance. |
Property and Equipment | Property and equipment are stated at cost. When retired or otherwise disposed, the related carrying value and accumulated depreciation are removed from the respective accounts and the net difference less any amount realized from disposition, is reflected in earnings. For consolidated financial statement purposes, equipment is recorded at cost and depreciated using the straight-line method over their estimated useful lives of 2 to 5 years. Leasehold improvements are recorded at cost and depreciated using the straight-line method over the life of the lease. Expenditures for repairs and maintenance which do not materially extend the useful lives of property and equipment are charged to operations. Management reviews the carrying value of its property and equipment for impairment on an annual basis. |
Intellectual Property | Intellectual is recorded at cost and amortized over its estimated useful life of 15 years. Management reviews intellectual property for impairment when events or changes in circumstances indicate the carrying amount of an asset or asset group may not be recoverable. In the event that impairment indicators exist, a further analysis is performed and if the sum of the expected undiscounted future cash flows resulting from the use of the asset or asset group is less than the carrying amount of the asset or asset group, an impairment loss equal to the excess of the asset or asset group’s carrying value over its fair value is recorded. Management considers historical experience and all available information at the time the estimates of future cash flows are made, however, the actual cash values that could be realized may differ from those that are estimated. |
Recoverability of Long-Lived and Intangible Assets | Long-lived assets and certain identifiable intangibles held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Events relating to recoverability may include significant unfavorable changes in business conditions, recurring losses or a forecasted inability to achieve break-even operating results over an extended period. The Company evaluates the recoverability of long-lived assets based upon forecasted undiscounted cash flows. Should impairment in value be indicated, the carrying value of the long-lived and or intangible assets would be adjusted, based on estimates of future discounted cash flows. The Company evaluated the recoverability of the carrying value of the Company’s equipment. No impairment charges were recognized for the years ended December 31, 2019 and 2018, respectively. |
Leases | In February 2016, the FASB issued new guidance which requires lessees to recognize a lease liability for the obligation to make lease payments and a right-of-use asset for the right to use the underlying asset for the lease term. The accounting standard, effective January 1, 2019, requires virtually all leases to be recognized on the Balance Sheet. Effective January 1, 2019, we adopted the standard using the modified retrospective method, under which we elected the package of practical expedients and transition provisions allowing us to bring our existing operating leases onto the Consolidated Balance Sheet without adjusting comparative periods, but recognizing a cumulative-effect adjustment to the opening balance of accumulated deficit on January 1, 2019. Under the guidance, we have also elected not to separate lease and non-lease components in recognition of the lease-related assets and liabilities, as well as the related lease expense. We have operating leases for office space in two multitenant facilities, which are not recorded as assets and liabilities as those leases do not have terms greater than 12 months. We have an operating leases for a multi-purpose facility and bulk trailers used in operations which is recorded as an asset and liability as the lease has a terms greater than 12 months. Lease-related assets, or right-of-use assets, are recognized at the lease commencement date at amounts equal to the respective lease liabilities, adjusted for prepaid lease payments, initial direct costs, and lease incentives received. Lease-related liabilities are recognized at the present value of the remaining contractual fixed lease payments, discounted using our incremental borrowing rate. Operating lease expense is recognized on a straight-line basis over the lease term, while variable lease payments are expensed as incurred. Upon adoption of the standard on January 1, 2019, we recorded $1,339,569 of right of use assets and $1,417,435 of lease-related liabilities, with the difference charged to accumulated deficit at that date. |
Stock-Based Compensation | The Company accounts for stock-based compensation awards in accordance with the provisions of Accounting Standards Codification (“ASC”) 718, Compensation-Stock Compensation |
Fair Value of Financial Instruments | The fair value hierarchy has three levels based on the inputs used to determine fair value, which are as follows: ☐ Level 1 ☐ Level 2 ☐ Level 3 — The fair value hierarchy requires the use of observable market data when available. In instances where the inputs used to measure fair value fall into different levels of the fair value hierarchy, the fair value measurement has been determined based on the lowest level input significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular item to the fair value measurement in its entirety requires judgment, including the consideration of inputs specific to the asset or liability. Cash was the only asset measured at fair value on a recurring basis by the Company at December 31, 2019 and December 31, 2018 and is considered to be Level 1. Financial instruments include cash, accounts receivable, accounts payable, deferred revenue, customer credits and short-term debt. The carrying amounts of these financial instruments approximated fair value at December 31, 2019 and December 31, 2018 due to their short-term maturities. The fair value of the promissory notes payable at December 31, 2019 and December 31, 2018 approximated the carrying amount as the notes were issued during the years ended December 31, 2019 and 2018 at interest rates prevailing in the market and interest rates have not significantly changed as of December 31, 2019. The fair value of the promissory notes payable was determined on a Level 2 measurement. Discounts on issued debt, as well as debt issuance costs, are amortized over the term of the individual promissory notes. The fair value of the profit share liability at December 31, 2019 was calculated using a discounted cash flow model based on estimated future cash payments. The fair value of the profit share liability was determined on a Level 3 measurement. These values are determined using pricing models for which the assumptions utilized management’s estimates. The following tables present the Company’s assets and liabilities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy. Fair Value Measurement as of December 31, 2019 Total Level 1 Level 2 Level 3 Assets: Cash 1,499,287 1,499,287 - - Total Assets $ 1,499,287 $ 1,499,287 $ - $ - Liabilities Promissory notes 12,200,411 - 12,200,411 - Profit share liability 2,328,845 - - 2,328,845 Total Liabilities $ 14,529,256 $ - $ 12,200,411 $ 2,328,845 Fair Value Measurement as of December 31, 2018 Total Level 1 Level 2 Level 3 Assets: Cash 584,877 584,877 - - Total Assets $ 584,877 $ 584,877 $ - $ - Liabilities Promissory notes 13,814,208 - 13,814,208 Total Liabilities $ 13,814,208 $ - $ 13,814,208 $ - |
Foreign Currency Transactions | The Company’s functional currency is the United States Dollar (the “U.S. Dollar”). Transactions denominated in currencies other than the U.S. Dollar are re-measured to the U.S. Dollar at the period-end exchange rates. Any associated transactional currency re-measurement gains and losses are recognized in current operations. At both December 31, 2019 and December 31, 2018, there were no material gains or losses recognized. |
Revenue Recognition | The Company records revenue in accordance with ASC 606, Revenue from Contracts with Customers Step 1: Identify the contract(s) with a customer. Step 2: Identify the performance obligations in the contract. Step 3: Determine the transaction price. Step 4: Allocate the transaction price to the performance obligations in the contract. Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation. Revenue is recognized when the Company satisfies its performance obligation under the contract by transferring the promised product to its customer that obtains control of the product. A performance obligation is a promise in a contract to transfer a distinct product to a customer. Most of the Company’s contracts have a single performance obligation, as the promise to transfer products or services is not separately identifiable from other promises in the contract and, therefore, not distinct. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products. As such, revenue is recorded net of returns, allowances, customer discounts, and incentives. Sales and other taxes are excluded from revenues. Invoiced shipping and handling costs are included in revenue. The adoption of this standard did not have a material impact on the Company’s financial statements. |
Disaggregation of Revenue | The Company generated revenue for the years ended December 31, 2019 and 2018 by (i) delivering product to its commercial customers, (ii) completing and commissioning equipment projects at commercial customer sites and (iii) performing demonstrations of its technology at customers with the intent of entering into long term supply agreements based on the performance of the Company’s products during the demonstrations. Revenue for product sales is recognized at the point of time in which the customer obtains control of the product, at the time title passes to the customer upon shipment or delivery of the product based on the applicable shipping terms. Revenue for equipment sales is recognized upon commissioning and customer acceptance of the installed equipment per the terms of the purchase contract. Revenue for demonstrations and consulting services is recognized when performance obligations contained in the contract have been completed, typically the completion of necessary field work and the delivery of any required analysis per the terms of the agreement. The following table presents sales by operating segment disaggregated based on the type of product and geographic region for the years ended December 31, 2019, and 2018. Year ended December 31, 2019 Year ended December 31, 2018 United States International Total United States International Total Product revenue $ 10,746,714 $ 297,840 $ 11,044,554 $ 11,965,185 $ 149,968 $ 12,115,153 Demonstrations & Consulting revenue 183,448 95,543 278,991 131,681 - 131,681 Equipment revenue 93,481 - 93,481 49,028 - 49,028 $ 11,023,643 $ 393,383 $ 11,417,026 $ 12,145,894 $ 149,968 $ 12,295,862 |
Customer Acquisition Costs | Customer acquisition costs are amortized on a straight-line bases over the life of the initial customer contract. The capitalized balance of customer acquisition costs was $0 and $34,467 on December 31, 2019 and December 31, 2018, respectively. Amortization expense for the years ended December 31, 2019 and 2018 was $0 and $137,866, respectively and included in cost of sales. |
Deferred Revenue | Revenue is recognized in the period that delivery is made and performance obligations are met. In accordance with the terms of an agreement with one customer, the Company allocated a fixed amount of payments made against the total deliveries of product made during the contract period. As of December 31, 2019 and 2018 the Company had no deferred revenue. |
Income Taxes | The Company follows the asset and liability method of accounting for income taxes under FASB ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. FASB ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. There were no unrecognized tax benefits as of December 31, 2019. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception. The Company may be subject to potential examination by federal, state, and city taxing authorities in the areas of income taxes. These potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions, and compliance with federal, state, and city tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months. The Company is no longer subject to tax examinations by tax authorities for years prior to 2017. |
Basic and Diluted Loss Per Common Share | Basic net loss per common share is computed using the weighted average number of common shares outstanding. Diluted loss per share reflects the potential dilution from common stock equivalents, such as stock issuable pursuant to the exercise of stock options and warrants. For the years ended December 31, 2019 and 2018 basic and diluted earnings per share approximated each other. There were no dilutive potential common shares as of December 31, 2019 and 2018, because the Company incurred net losses and basic and diluted losses per common share are the same. The following common stock equivalents were excluded from the computation of diluted net loss per share of common stock because they were anti-dilutive. The exercise of these common stock equivalents would dilute earnings per share if the Company becomes profitable in the future. December 31 December 31 2019 2018 Stock Options 12,553,326 9,161,510 Warrants 5,690,378 4,105,398 Convertible debt 9,351,400 3,700,000 Total common stock equivalents excluded from diluted net loss per share 27,595,104 16,966,908 |
Concentration of Credit Risk | Financial instruments that subject the Company to credit risk consist of cash and equivalents on deposit with financial institutions and accounts receivable. The Company’s cash as of December 31, 2019 is maintained at high-quality financial institutions and has not incurred any losses to date. |
Customer and Supplier Concentration | For each of the years ended December 31, 2019 and 2018, 100% of the Company’s revenue related to eleven and eight customers respectively. At December 31, 2019 and 2018, 100% of the Company’s accounts receivable related to eight and seven customers respectively. For each of the years ended December 31, 2019 and 2018, 91% and 52% of the Company’s purchases related to two suppliers, respectively. At December 31, 2019 and 2018, 74% and 72% of the Company’s accounts payable and accrued expenses related to two vendors. The Company believes there are numerous other suppliers that could be substituted should the supplier become unavailable or non-competitive. |
Contingencies | Certain conditions may exist which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company’s management and its legal counsel assess such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company, or unasserted claims that may result in such proceedings, the Company’s legal counsel evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they arise from guarantees, in which case the guarantees would be disclosed. |
Recently Adopted Accounting Standards | In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) In July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815) The guidance in ASU 2017-11 is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted, and the guidance is to be applied using a full or modified retrospective approach. The Company early adopted ASU 2017-11 and changed its method of accounting for certain warrants that were initially recorded as liabilities during the year ended December 31, 2014 on a full retrospective basis. The adoption of ASU 2017-11 did not have a material impact on its consolidated financial statements. |
Recently Issued Accounting Standards | In June 2018, the FASB issued ASU No. 2018-07, Compensation — Stock Compensation (Topic 718) In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820) In December 2019, the FASB issued authoritative guidance intended to simplify the accounting for income taxes (ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes”). This guidance eliminates certain exceptions to the general approach to the income tax accounting model and adds new guidance to reduce the complexity in accounting for income taxes. This guidance is effective for annual periods after December 15, 2020, including interim periods within those annual periods. The Company is currently evaluating the potential impact of this guidance on its consolidated financial statements. Management does not believe that any recently issued, but not yet effective accounting pronouncements, when adopted, will have a material effect on the accompanying consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Summary of Significant Accounting Policies (Tables) | |
Schedule of fair value assets and liabilities measured on recurring basis | Fair Value Measurement as of December 31, 2019 Total Level 1 Level 2 Level 3 Assets: Cash 1,499,287 1,499,287 - - Total Assets $ 1,499,287 $ 1,499,287 $ - $ - Liabilities Promissory notes 12,200,411 - 12,200,411 - Profit share liability 2,328,845 - - 2,328,845 Total Liabilities $ 14,529,256 $ - $ 12,200,411 $ 2,328,845 Fair Value Measurement as of December 31, 2018 Total Level 1 Level 2 Level 3 Assets: Cash 584,877 584,877 - - Total Assets $ 584,877 $ 584,877 $ - $ - Liabilities Promissory notes 13,814,208 - 13,814,208 Total Liabilities $ 13,814,208 $ - $ 13,814,208 $ - |
Schedule of sale by operating segment | Year ended December 31, 2019 Year ended December 31, 2018 United States International Total United States International Total Product revenue $ 10,746,714 $ 297,840 $ 11,044,554 $ 11,965,185 $ 149,968 $ 12,115,153 Demonstrations & Consulting revenue 183,448 95,543 278,991 131,681 - 131,681 Equipment revenue 93,481 - 93,481 49,028 - 49,028 $ 11,023,643 $ 393,383 $ 11,417,026 $ 12,145,894 $ 149,968 $ 12,295,862 |
Schedule of earnings per share basic and diluted | December 31 December 31 2019 2018 Stock Options 12,553,326 9,161,510 Warrants 5,690,378 4,105,398 Convertible debt 9,351,400 3,700,000 Total common stock equivalents excluded from diluted net loss per share 27,595,104 16,966,908 |
Inventory (Tables)
Inventory (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Inventory (Tables) | |
Schedule of Inventory | December 31, 2019 December 31, 2018 Raw Materials $ 223,790 $ 87,730 Work in Process 43,814 130,062 Spare Parts 27,632 26,967 Finished goods 218,262 264,657 $ 513,498 $ 509,416 |
Property And Equipment, Net (Ta
Property And Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property And Equipment, Net (Tables) | |
Schedule of property and equipment | December 31 December 31 2019 2018 Equipment & Installation $ 1,965,659 $ 1,965,659 Trucking equipment 922,441 983,948 Computer equipment and software 67,126 117,212 Office equipment 27,155 27,155 Total equipment 2,982,381 3,093,974 Less: accumulated depreciation (2,707,745 ) (2,503,990 ) Construction in process 1,807,707 1,807,707 Property and equipment, net $ 2,082,343 $ 2,397,691 |
Intellectual Property (Tables)
Intellectual Property (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Intellectual Property (Tables) | |
Schedule of patent costs capitalized | December 31 December 31 2019 2018 Patents $ 3,068,995 $ 3,068,995 Less: Accumulated amortization (536,533 ) (335,333 ) License, net $ 2,532,462 $ 2,733,662 |
Convertible Notes Payable (Tabl
Convertible Notes Payable (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Convertible Notes Payable (Tables) | |
Schedule of notes payable outstanding | December 31, December 31, 2019 2018 Secured convertible promissory notes which mature upon the retirement of the New AC Midwest Secured Debt, bear interest at 10% per annum, and are convertible into one share of common stock, par value $0.001 per share. $ 990,000 $ 990,000 Unsecured convertible promissory notes which mature beginning on June 15, 2023, bear interest at 12% per annum, and are convertible into one share of common stock, par value $0.001 per share. 860,000 860,000 Unsecured convertible promissory notes which mature beginning on June 18, 2024, bear interest at 12% per annum, and are convertible into one share of common stock, par value $0.001 per share. 2,600,000 - Total convertible notes payable before discount 4,450,000 1,850,000 Less discounts and debt issuance costs (508,863 ) (89,430 ) Total convertible notes payable 3,941,137 1,760,570 Less current portion (990,000 ) - Convertible notes payable, net of current portion $ 2,951,137 $ 1,760,570 |
Schedule of payments due on convertible notes payable | Twelve months ended December 31, 2020 $ 990,000 2021 - 2022 - 2023 860,000 2024 2,600,000 thereafter - $ 4,450,000 |
Schedule of future amortization of discounts | Twelve months ended December 31, Discounts 2020 $ 114,647 2021 114,334 2022 114,334 2023 105,477 2024 60,071 thereafter - $ 508,863 |
Related Party (Tables)
Related Party (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Related Party | |
Schedule of Unsecured notes payable | Unsecured Note Payable $ 13,154,931 $ 13,000,000 Less discounts and debt issuance costs (5,243,033 ) (1,218,048 ) Total convertible notes payable 7,911,898 11,781,952 Less current portion - - Convertible notes payable, net of current portion $ 7,911,898 $ 11,781,952 |
Schedule of profit share liabilities | Profit Share as of January 1, 2019 $ - Addition 1,954,383 Loss on change in fair value of profit share 374,462 Profit Share as of December 31, 2019 $ 2,328,845 |
Operating Leases (Tables)
Operating Leases (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Operating Leases (Tables) | |
Schedule of future minimum lease payments | For the twelve months ended December 31 2020 $ 438,840 2021 438,840 2022 351,027 2023 45,000 2014 11,250 Total 1,284,957 Less discount (94,241 ) Total lease liabilities 1,190,716 Less current portion (383,307 ) Operating lease obligation, net of current portion $ 807,409 |
Schedule of lease cost | Year Ended December 31, 2019 Operating lease cost $ 1,284,957 Short-term lease cost (1) 3,150 Total lease cost $ 1,288,107 |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Stock Based Compensation (Tables) | |
Schedule of stock option activity | Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (years) Aggregate Intrinsic Value December 31, 2017 8,463,184 1.26 3.00 Grants 1,423,326 0.26 4.40 Expirations (725,000 ) 0.69 - December 31, 2018 9,161,510 1.15 2.00 - Grants 4,700,000 0.27 5.00 Expirations (1,308,184 ) 0.27 - December 31, 2019 12,553,326 0.55 4.02 927 Options exercisable at: December 31, 2018 9,161,510 1.15 2.00 - December 31, 2019 12,563,326 0.55 4.02 927 |
Schedule of Options granted | December 31, December 31, Exercise price $0.25-$0.27 $0.17-$0.33 Expected dividends 0% 0% Expected volatility 100% - 109% 100% Risk free interest rate 1.73% - 3% 3% Expected life 5 years 5 years |
Warrants (Tables)
Warrants (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Warrants (Tables) | |
Schedule of warrant | Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (years) Aggregate Intrinsic Value December 31, 2017 7,237,763 $ 0.51 1.35 Grants 860,000 0.70 5.00 Expirations (3,992,365 ) 0.46 - December 31, 2018 4,105,398 0.59 1.79 - Grants 3,600,000 0.70 5.00 Expirations (2,015,020 ) 0.69 - December 31, 2019 5,690,378 0.63 3.72 - Warrants exercisable at: December 31, 2018 4,105,398 0.59 1.79 - December 31, 2019 5,690,378 0.63 3.72 - |
Schedule of common stock warrants outstanding | Outstanding Exercisable Exercise Price Number Outstanding Weighted Average Remaining Contractual Life (years) Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price $ 0.70 4,460,000 4.45 $ 0.70 4,460,000 $ 0.70 0.45 150,000 0.92 0.45 150,000 0.45 0.35 1,080,378 * 1.13 0.35 1,080,378 0.35 $ 0.35 - $0.70 5,690,378 3.72 $ 0.63 5,690,378 $ 0.63 |
Schedule of assumptions for warrants granted | December 31, December 31, Exercise price $0.70 $0.70 Expected dividends 0% 0% Expected volatility 100% - 112% 100% Risk free interest rate 1.58% - 3% 3% Expected life 5 years 5 years |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Taxes | |
Schedule of Income tax provisions breakdown | 2019 2018 Federal Current $ - $ - Deferred (1,278,000 ) (536,000 ) State and local Current 14,000 22,000 Deferred (196,000 ) (116,000 ) Change in valuation allowance 1,474,000 652,000 Income tax provision (benefit) $ 14,000 $ 22,000 |
Schedule of expected tax expense (benefit) | For the Year Ended December 31, 2019 For the Year Ended December 31, 2018 U.S. federal statutory rate 21.0 % 21.0 % State taxes 4.3 % (0.5 )% Other permanent and prior period adjustments (1.4 )% (7.4 )% Valuation allowance (24.2 )% (13.6 )% Income tax provision (0.3 )% (0.5 )% |
Schedule of deferred tax assets and liabilities | 2019 2018 Deferred tax assets: Net operating loss carryforwards $ 5,456,000 $ 4,328,000 Stock based compensation 1,285,000 888,000 Other 81,000 115,000 Total deferred tax assets 6,822,000 5,331,000 Deferred tax liabilities: Property and equipment (57,000 ) (51,000 ) Other (44,000 ) (33,000 ) Total deferred tax liabilities (101,000 ) (84,000 ) Valuation Allowance (6,721,000 ) (5,247,000 ) Net deferred tax asset $ - $ - |
Restatement of previously iss_2
Restatement of previously issued financial statements (unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Restatement of previously issued financial statements (unaudited) (Tables) | |
Schedule of Condensed Financial Statements | CONSOLIDATED BALANCE SHEETS MARCH 31, 2019 As previously Adjustment As restated LIABILITIES AND STOCKHOLDERS’ DEFICIT Profit Share liability $ - $ 1,991,940 $ 1,991,940 Unsecured note payable, net of discount and issuance costs 8,403,968 (1,981,568 ) 6,422,400 Total liabilities 14,801,425 10,372 14,811,797 Stockholders’ deficit Additional paid-in capital 42,785,990 3,412,204 46,198,194 Accumulated deficit (49,197,401 ) (3,422,576 ) (52,619,977 ) Total stockholders’ deficit (6,335,165 ) (10,372 ) (6,345,537 ) Total liabilities and stockholders’ deficit $ 8,466,260 $ - $ 8,466,260 MIDWEST ENERGY EMISSIONS CORP. AND SUBSIDIARIES FOR THE THREE MONTHS ENDED MARCH 31, 2019 As previously Adjustment As restated Interest expense & letter of credit fees $ 529,193 $ (27,185 ) $ 502,008 Loss on change in fair value of profit share - 37,557 37,557 Gain on debt restructuring (3,412,204 ) 3,412,204 - Total costs and expenses 423,524 3,422,576 3,846,100 Net income (loss) $ 2,363,797 $ (3,422,576 ) $ (1,058,779 ) Net loss per common share - basic and diluted: $ 0.03 $ (0.04 ) $ (0.01 ) CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 2019 As previously Adjustment As restated Cash flows from operating activities Net income (loss) $ 2,363,797 $ (3,422,576 ) $ (1,058,779 ) Adjustments to reconcile net loss to net cash Amortization of discount of notes payable 303,697 (27,185 ) 276,512 Loss on change in fair value of profit share - 37,557 37,557 Gain on debt restructuring (3,412,204 ) 3,412,204 - Net cash provided by (used in) operating activities $ 68,245 $ - $ 68,245 CONDENSED CONSOLIDATED BALANCE SHEETS JUNE 30, 2019 As previously Adjustment As restated LIABILITIES AND STOCKHOLDERS’ DEFICIT Profit Share liability $ - $ 2,097,655 $ 2,097,655 Secured note payable 271,686 - 271,686 Unsecured note payable, net of discount and issuance costs 9,095,119 (2,179,831 ) 6,915,288 Total liabilities 16,654,136 (82,176 ) 16,571,960 Stockholders’ deficit Additional paid-in capital 44,745,926 3,412,204 48,158,130 Accumulated deficit (52,036,522 ) (3,330,028 ) (55,366,550 ) Total stockholders’ deficit (7,213,886 ) 82,176 (7,131,710 ) Total liabilities and stockholders’ deficit $ 9,440,250 $ - $ 9,440,250 CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 2019 FOR THE SIX MONTHS ENDED JUNE 30, 2019 As previously Adjustment As restated As previously Adjustment As restated Interest expense & letter of credit fees $ 763,873 $ (198,263 ) $ 565,610 $ 1,293,067 $ (225,448 ) $ 1,067,619 Loss on change in fair value of profit share - 105,715 105,715 - 143,272 143,272 (Gain)/Loss on debt restructuring - - - (3,412,204 ) 3,412,204 - Total costs and expenses 5,348,871 (92,548 ) 5,256,323 5,772,394 3,330,028 9,102,422 Net loss $ (2,839,121 ) $ 92,548 $ (2,746,573 ) $ (475,324 ) $ (3,330,028 ) $ (3,805,352 ) Net loss per common share - basic and diluted: $ (0.04 ) $ (0.00 ) $ (0.04 ) $ (0.01 ) $ (0.04 ) $ (0.05 ) CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2019 As previously Adjustment As restated Cash flows from operating activities Net loss $ (475,324 ) $ (3,330,028 ) $ (3,805,352 ) Adjustments to reconcile net loss to net cash used in operating activities: Amortization of discount of notes payable 938,532 (225,448 ) 713,084 Loss on change in fair value of profit share - 143,272 143,272 Gain on debt restructuring (3,412,204 ) 3,412,204 - Net cash used in operating activities $ (506,674 ) $ - $ (506,674 ) CONSOLIDATED BALANCE SHEETS SEPTEMBER 30, 2019 As previously Adjustment As restated LIABILITIES AND STOCKHOLDERS’ DEFICIT Current liabilities Profit Share liability $ - $ 2,210,230 $ 2,210,230 Unsecured note payable, net of discount and issuance costs 9,752,882 (2,339,289 ) 7,413,593 Total liabilities 17,177,693 (129,059 ) 17,048,634 Stockholders’ deficit Additional paid-in capital 44,882,209 3,412,204 48,294,413 Accumulated deficit (52,887,063 ) (3,283,145 ) (56,170,208 ) Total stockholders’ deficit (7,928,107 ) 129,059 (7,799,048 ) Total liabilities and stockholders’ deficit $ 9,249,586 $ - $ 9,249,586 CONSOLIDATED STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2019 FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2019 As previously Adjustment As restated As previously Adjustment As restated Interest expense & letter of credit fees $ 782,695 $ (159,458 ) $ 623,237 $ 2,075,761 $ (529,918 ) $ 1,690,855 Loss on change in fair value of profit share - 112,575 112,575 - 255,847 255,847 (Gain)/Loss on debt restructuring - - - (3,412,204.00 ) 3,412,204.00 - Total costs and expenses 4,446,648 (46,883 ) 4,399,765 10,219,042 3,138,133 13,502,187 Net loss $ (850,541 ) $ 46,883 $ (803,658 ) $ (1,325,865 ) $ (3,138,133 ) $ (4,609,010 ) Net loss per common share-basic and diluted: $ (0.01 ) $ - $ (0.01 ) $ (0.02 ) $ (0.04 ) $ (0.06 ) CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2019 As previously Adjustment As restated Cash flows from operating activities Net loss $ (1,325,865 ) $ (3,283,145 ) $ (4,609,010 ) Adjustments to reconcile net loss to net cash used in operating activities: Amortization of discount of notes payable 1,585,686 (384,906 ) 1,200,780 Loss on change in fair value of profit share 255,847 255,847 Gain on debt restructuring (3,412,204 ) 3,412,204 - Net cash used in operating activities $ (1,304,626 ) $ - $ (1,304,626 ) CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT FOR THE MONTHS ENDED MARCH 31, 2019, THE SIX MONTHS ENDED JUNE 30, 2019 AND THE NINE MONTHS ENDED SEPTEMBER 30, 2019 (Restated) Common Stock Additional Accumulated Shares Par Value Paid-in Capital (Deficit) Total Balance - January 1, 2019 76,246,113 $ 76,246 $ 42,785,990 $ (51,483,332 ) $ (8,621,096 ) Cumulative effect of change in accounting principle related to accounting for leases - - - (77,866 ) (77,866 ) Capital contribution - - 3,412,204 - 3,412,204 Net income - - - (1,058,779 ) (1,058,779 ) Balance - March 31, 2019 76,246,113 $ 76,246 $ 46,198,194 $ (52,619,977 ) $ (6,345,537 ) Stock issued per resignation agreements 464,517 464 118,076 - 118,540 Issuance of stock options - - 898,207 - 898,207 Extension of certain stock option expiration - - 745,989 - 745,989 Issuance of warrants, recorded as discount on convertible notes payable - - 197,664 - 197,664 Net loss - - - (2,746,573 ) (2,746,573 ) Balance - June 30, 2019 76,710,630 $ 76,710 $ 48,158,130 $ (55,366,550 ) $ (7,131,710 ) Stock issued upon cashless warrant exercise 37,120 37 (37 ) - - Issuance of warrants, recorded as discount on convertible notes payable - - 136,320 - 136,320 Net loss - - - (803,658 ) (803,658 ) Balance - September 30, 2019 76,747,750 $ 76,747 $ 48,294,413 $ (56,170,208 ) $ (7,799,048 ) |
Organization (Details Narrative
Organization (Details Narrative) - $ / shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Organization (Details Narrative) | ||
State of Incorporation | Delaware | |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Total Assets | $ 9,273,238 | $ 8,038,867 |
Liabilities | ||
Profit share liability | 2,328,845 | |
Total Liabilities | 18,146,889 | 16,659,963 |
Level 1 [Member] | ||
Cash | 1,499,287 | 584,877 |
Total Assets | 1,499,287 | 584,877 |
Liabilities | ||
Promissory notes | ||
Profit share liability | ||
Total Liabilities | ||
Level 2 [Member] | ||
Cash | ||
Total Assets | ||
Liabilities | ||
Promissory notes | 12,200,411 | 13,814,208 |
Profit share liability | ||
Total Liabilities | 12,200,411 | 13,814,208 |
Level 3 [Member] | ||
Cash | ||
Total Assets | ||
Liabilities | ||
Promissory notes | ||
Profit share liability | 2,328,845 | |
Total Liabilities | 2,328,845 | |
Fair Value [Member] | ||
Cash | 1,499,287 | 584,877 |
Total Assets | 1,499,287 | 584,877 |
Liabilities | ||
Promissory notes | 12,200,411 | 13,814,208 |
Profit share liability | 2,328,845 | |
Total Liabilities | $ 14,529,256 | $ 13,814,208 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Total [Member] | ||
Product revenue | $ 11,044,554 | $ 12,115,153 |
Demonstrations & Consulting revenue | 278,991 | 131,681 |
Equipment revenue | 93,481 | 49,028 |
Total | 11,417,026 | 12,295,862 |
United States [Member] | ||
Product revenue | 10,746,714 | 11,965,185 |
Demonstrations & Consulting revenue | 183,448 | 131,681 |
Equipment revenue | 93,481 | 49,028 |
Total | 11,023,643 | 12,145,894 |
International [Member] | ||
Product revenue | 297,840 | 149,968 |
Demonstrations & Consulting revenue | 95,543 | |
Equipment revenue | ||
Total | $ 393,383 | $ 149,968 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details 2) - shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Total common stock equivalents excluded from diluted net loss per share | 27,595,104 | 16,966,908 |
Warrants [Member] | ||
Total common stock equivalents excluded from diluted net loss per share | 5,690,378 | 4,105,398 |
Stock Options [Member] | ||
Total common stock equivalents excluded from diluted net loss per share | 12,553,326 | 9,161,510 |
Convertible Debt [Member] | ||
Total common stock equivalents excluded from diluted net loss per share | 9,351,400 | 3,700,000 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Customer acquisition costs, net | $ 0 | $ 34,467 |
Cash exceeded FDIC | 1,249,000 | |
Amortization expense | $ 0 | $ 137,866 |
Intellectual Property useful lives | 15 years | |
On January 1, 2019 [Member] | ||
Right of use assets | $ 1,339,569 | |
Lease-related liabilities | $ 1,417,435 | |
Two Suppliers [Member] | ||
Concentration risk percentage | 91.00% | 52.00% |
Two Vendors [Member] | Accounts Payable And Accrued Expenses [Member] | ||
Concentration risk percentage | 74.00% | 72.00% |
Eleven Customers [Member] | Revenue [Member] | ||
Concentration risk percentage | 100.00% | |
Eight Customers [Member] | Revenue [Member] | ||
Concentration risk percentage | 100.00% | |
Eight Customers [Member] | Accounts Receivable [Member] | ||
Concentration risk percentage | 100.00% | |
Seven Customers [Member] | Accounts Receivable [Member] | ||
Concentration risk percentage | 100.00% | |
Maximum [Member] | ||
Property and Equipment useful lives | 5 years | |
Minimum [Member] | ||
Property and Equipment useful lives | 2 years |
Going Concern and Financial C_2
Going Concern and Financial Condition (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Accumulated deficit | $ (57,658,484) | $ (51,483,332) |
Working capital | (302,000) | |
Net income (loss) | (6,097,286) | (4,816,680) |
Cash provided by operating activities | (1,576,948) | $ (1,065,458) |
April 2020 [Member] | ||
Proceeds from issuance of debt | 299,300 | |
February 2020 [Member] | ||
Secured loan principal amount | $ 200,000 |
Inventory (Details)
Inventory (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Inventory (Details) | ||
Raw Materials | $ 223,790 | $ 87,730 |
Work in Process | 43,814 | 130,062 |
Spare Parts | 27,632 | 26,967 |
Finished goods | 218,262 | 264,657 |
Inventory | $ 513,498 | $ 509,416 |
Property And Equipment, Net (De
Property And Equipment, Net (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Total Equipment | $ 2,982,381 | $ 3,093,974 |
Less: accumulated depreciation | (2,707,745) | (2,503,990) |
Construction in process | 1,807,707 | 1,807,707 |
Property and equipment, net | 2,082,343 | 2,397,691 |
Equipment & Installation [Member] | ||
Total Equipment | 1,965,659 | 1,965,659 |
Trucking Equipment [Member] | ||
Total Equipment | 922,441 | 983,948 |
Computer Equipment and Software [Member] | ||
Total Equipment | 67,126 | 117,212 |
Office Equipment [Member] | ||
Total Equipment | $ 27,155 | $ 27,155 |
Property And Equipment, Net (_2
Property And Equipment, Net (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Property And Equipment, Net (Details Narrative) | ||
Straight-line method description | The Company uses the straight-line method of depreciation over 2 to 5 years. | |
Depreciation expense | $ 314,908 | $ 456,914 |
Intellectual Property (Details)
Intellectual Property (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Intellectual Property (Details) | ||
Patents | $ 3,068,995 | $ 3,068,995 |
Less: accumulated amortization | (536,533) | (335,333) |
License, net | $ 2,532,462 | $ 2,733,662 |
Intellectual Property (Details
Intellectual Property (Details Narrative) | 12 Months Ended | ||
Dec. 31, 2019USD ($)integer$ / sharesshares | Dec. 31, 2018USD ($)shares | Dec. 31, 2017shares | |
Amortization expense charged to cost and expenses | $ 201,200 | $ 201,200 | |
Estimated amortization cost for 2020 | 201,200 | ||
Estimated amortization cost for 2021 | 201,200 | ||
Estimated amortization cost for 2022 | 201,200 | ||
Estimated amortization cost for 2023 | 201,200 | ||
Estimated amortization cost for 2024 | $ 201,200 | ||
Shares issued | shares | |||
On April 24, 2017 [Member] | |||
Purchase of intellectual property | $ 2,500,000 | ||
Shares issued | shares | 925,000 | ||
Shares issued, value | $ 518,000 | ||
Shares issued, price per share | $ / shares | $ 0.56 | ||
On April 24, 2017 [Member] | EERCF [Member] | |||
Shares issued | shares | 628,998 | ||
Number of patent applications | integer | 42 | ||
On April 24, 2017 [Member] | Inventors designated by EERCF [Member] | |||
Shares issued | shares | 296,002 |
Convertible Notes Payable (Deta
Convertible Notes Payable (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Total notes payable before discount and debt issuance costs | $ 4,450,000 | $ 1,850,000 |
Less discounts and debt issuance costs | (508,863) | (89,430) |
Total convertible notes payable | 3,941,137 | 1,760,570 |
Less current portion | (990,000) | |
Convertible notes payable, net of current portion | 2,951,137 | 1,760,570 |
Secured Convertible Promissory Notes [Member] | ||
Total notes payable before discount and debt issuance costs | 990,000 | 990,000 |
Unsecured Convertible Promissory Notes [Member] | ||
Total notes payable before discount and debt issuance costs | 860,000 | 860,000 |
Unsecured Convertible Promissory Notes One [Member] | ||
Total notes payable before discount and debt issuance costs | $ 2,600,000 |
Convertible Notes Payable (De_2
Convertible Notes Payable (Details 1) | Dec. 31, 2019USD ($) |
Convertible Notes Payable (Details 1) | |
2020 | $ 990,000 |
2021 | |
2022 | |
2023 | 860,000 |
2024 | 2,600,000 |
thereafter | |
Total | $ 4,450,000 |
Convertible Notes Payable (De_3
Convertible Notes Payable (Details 2) | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Discounts | $ 508,863 |
2020 [Member] | |
Discounts | 114,647 |
2021 [Member] | |
Discounts | 114,334 |
2022 [Member] | |
Discounts | 114,334 |
2023 [Member] | |
Discounts | 105,477 |
2024 [Member] | |
Discounts | 60,071 |
thereafter [Member] | |
Discounts |
Convertible Notes Payable (De_4
Convertible Notes Payable (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |
Jun. 15, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Interest expense | $ 2,391,395 | $ 2,004,097 | |
Unsecured convertible notes and warrants | $ 7,911,898 | $ 11,781,952 | |
Common stock, par value | $ 0.001 | $ 0.001 | |
Loss on debt exchange | $ (29,560) | $ 6,303 | |
August 31, 2018 through October 30, 2018 [Member] | |||
Discount on notes payable | 40,350 | ||
Principal outstanding on notes | 860,000 | 860,000 | |
Amortized interest expense on note discount | 24,323 | 8,700 | |
Interest expense | 202,200 | 46,587 | |
Unsecured convertible notes and warrants | $ 300,000 | ||
Volatility | 100.00% | ||
Risk free interest rate | 3.00% | ||
Notes 2013 [Member] | |||
Discount on notes payable | $ 89,500 | ||
Conversion ratio | Equal to $0.50 per share | ||
Unsecured convertible notes and warrants | $ 560,000 | ||
Common stock, par value | $ 0.001 | ||
Interest rate | 12.00% | ||
Debt term | 5 years | ||
Loss on debt exchange | $ 44,036 | ||
Exercise price | $ 0.70 | ||
July 30, 2013 through December 24, 2013 [Member] | |||
Discount on notes payable | $ 841,342 | ||
Principal outstanding on notes | 990,000 | 990,000 | |
Amortized interest expense on note discount | 0 | 74,447 | |
Interest expense | $ 99,000 | $ 124,967 | |
Conversion ratio | Equal to $0.50 per share | ||
Common stock, par value | $ 0.001 | ||
Interest rate | 10.00% | ||
Debt term | 3 Years | ||
Convertible note | $ 1,902,500 | ||
June 18, 2019 through October 23, 2019 [Member] | |||
Discount on notes payable | 488,245 | ||
Principal outstanding on notes | 2,600,000 | ||
Amortized interest expense on note discount | 37,737 | ||
Interest expense | $ 124,600 | ||
Conversion ratio | Equal to $0.50 per share. | ||
Unsecured convertible notes and warrants | $ 2,600,000 | ||
Common stock, par value | $ 0.001 | ||
Interest rate | 12.00% | ||
Debt term | 5 years |
Related party (Details)
Related party (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Related party (Details) | ||
Unsecured Note Payable | $ 13,154,931 | $ 13,000,000 |
Less discounts and debt issuance costs | (5,243,033) | (1,218,048) |
Total convertible notes payable | 7,911,898 | 11,781,952 |
Less current portion | ||
Convertible notes payable, net of current portion | $ 7,911,898 | $ 11,781,952 |
Related party (Details 1)
Related party (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Related party (Details) | ||
Profit Share as of January 1, 2019 | ||
Addition | 1,954,383 | |
Loss on change in fair value of profit share liability | 374,462 | |
Profit Share as of December 31, 2019 | $ 2,328,845 |
Related party (Details Narrativ
Related party (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Feb. 25, 2019 | Nov. 29, 2016 | Dec. 31, 2019 | Dec. 31, 2018 | |
Gain on debt restructuting | $ (3,412,204) | |||
Remaining debt discount | 1,752,639 | $ 678,061 | ||
Interest expense | $ 2,391,395 | 2,004,097 | ||
Secured Note [Member] | ||||
Interest rate | 15.00% | |||
Interest expense | $ 40,753 | 66,694 | ||
Principal outstanding on notes | $ 9,646,686 | $ 271,686 | $ 271,686 | |
Maturity Date | Dec. 15, 2018 | Aug. 25, 2022 | ||
AC Midwest Subordinated Note [Member] | ||||
Discount on debentures | $ 6,916,687 | |||
Related party debt restructuring resulting in capital contribution | 3,412,204 | |||
Remaining debt discount | $ 1,070,819 | |||
Market rate of interest | 21.00% | |||
AC Midwest Unsecured Note [Member] | ||||
Principal outstanding on notes | $ 13,154,931 | $ 13,000,000 | ||
Maturity Date | Aug. 25, 2022 | Dec. 15, 2020 | ||
Repayment of debt description | In connection with the New AC Midwest Unsecured Note the Company shall pay the principal outstanding, as well as the Profit Share, in an amount equal to 60.0% of Net Litigation Proceeds until such time as any litigation funder has been paid in full and, thereafter, in an amount equal to 75.0% of such Net Litigation Proceeds until the Unsecured Note and Profit Share have been paid in full. In addition, and within 30 days following the end of each fiscal quarter, the Company shall pay the principal outstanding and Profit Share in an aggregate amount equal to the Net Revenue Share (which means 60.0% of Net Licensing Revenue (as defined) from licensing the Company’s intellectual property) plus Adjusted Free Cash Flow until the Unsecured Note and Profit Share have been paid in full, provided, however, that such payments shall exclude the first $3,500,000 of Net Licensing Revenue and Adjusted Free Cash Flow achieved commencing with the fiscal quarter ending March 31, 2019. | |||
Amortized interest expense on note discount | $ 1,763,024 | |||
debt discount premium | 5,243,033 | |||
Kaye Cooper Kay & Rosenberg, LLP [Member] | ||||
Legal services expense | 329,729 | |||
MEEC [Member] | ||||
Fair Value of sharing profit | $ 1,954,383 | |||
Estimated time of profit sharing | 17 years | |||
Quarterly payment to be made | $ 250,000 | |||
Interest rate | 21.00% |
Operating Leases (Details)
Operating Leases (Details) | Dec. 31, 2019USD ($) |
Operating Leases (Details) | |
2020 | $ 438,840 |
2021 | 438,840 |
2022 | 351,027 |
2023 | 45,000 |
2024 | 11,250 |
Total | 1,284,957 |
Less discount | (94,241) |
Total lease liabilities | 1,190,716 |
Less current portion | (383,307) |
Operating lease obligation, net of current portion | $ 807,409 |
Operating Leases (Details 1)
Operating Leases (Details 1) | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Operating Leases (Details 1) | |
Operating lease cost | $ 1,284,957 |
Short-term lease cost (1) | 3,150 |
Total lease cost | $ 1,288,107 |
Operating Leases (Details Narra
Operating Leases (Details Narrative) | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Weighted average discount rate | 5.00% |
Weighted average remaining lease term | 2 years |
Lease obligations | $ 457,740 |
Right-of-use asset, amortization | 378,261 |
Trailers [Member] | |
Monthly payments | $ 32,820 |
Grand Forks Office [Member] | |
Lease term | 1 year |
Monthly rent expenses | $ 590 |
Corsicana Warehouse [Member] | |
Lease term | 5 years |
Monthly rent expenses | $ 3,750 |
Operating lease liability | 145,267 |
Monthly expenses pro rata basis | 882 |
Lewis Center Office [Member] | |
Monthly rent expenses | $ 1,575 |
Lease commencement date | Feb. 1, 2015 |
Lease expiry date | February 2020 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) | 12 Months Ended |
Dec. 31, 2019 | |
Commercial Customers [Member] | |
Contracts expiry date | 2019 |
Stock Based Compensation (Detai
Stock Based Compensation (Details) - Stock Options [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Number of Shares | ||
Beginning Balance | 9,161,510 | 8,463,184 |
Grants | 4,700,000 | 1,423,326 |
Expirations | (1,308,184) | (725,000) |
Ending Balance | 12,553,326 | 9,161,510 |
Options exercisable | 12,563,326 | 9,161,510 |
Weighted Average Exercise Price | ||
Beginning Balance | $ 1.15 | $ 1.26 |
Grants | 0.27 | 0.26 |
Expirations | 0.27 | 0.69 |
Ending Balance | 0.55 | 1.15 |
Options exercisable | $ 0.55 | $ 1.15 |
Weighted Average Remaining Contractual Life (years) | ||
Beginning Balance | 2 years | 3 years |
Grants | 5 years | 4 years 4 months 24 days |
Expirations | ||
Ending Balance | 4 years 7 days | 2 years |
Options exercisable | 4 years 7 days | 2 years |
Aggregate Intrinsic Value | ||
Beginning Balance | ||
Grants | ||
Expirations | ||
Ending Balance | $ 927 | |
Options exercisable | $ 927 |
Stock Based Compensation (Det_2
Stock Based Compensation (Details 1) - Stock Options [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Expected dividends | 0.00% | 0.00% |
Expected volatility | 100.00% | |
Risk free interest rate | 3.00% | |
Expected life | 5 years | 5 years |
Minimum [Member] | ||
Expected volatility | 100.00% | |
Risk free interest rate | 1.73% | |
Exercise price | $ 0.25 | $ 0.17 |
Maximum [Member] | ||
Expected volatility | 109.00% | |
Risk free interest rate | 3.00% | |
Exercise price | $ 0.27 | $ 0.33 |
Stock Based Compensation (Det_3
Stock Based Compensation (Details Narrative) - USD ($) | Jun. 04, 2019 | May 14, 2019 | Dec. 20, 2019 | Jun. 28, 2019 | Dec. 31, 2019 | Dec. 31, 2018 |
Stock options to acquire common shares | 4,675,000 | |||||
Value of option | $ 745,989 | |||||
Frederick Van Zijl [Member] | ||||||
Common stock shares issued for services | 235,184 | |||||
Compensation included in selling, general and administrative expenses | $ 63,500 | |||||
Allan T. Grantham [Member] | ||||||
Common stock shares issued for services | 229,333 | |||||
Compensation included in selling, general and administrative expenses | $ 55,040 | |||||
Rick MacPherson [Member] | February 5, 2018 [Member] | ||||||
Value of option | $ 76,543 | |||||
Grants | 750,000 | |||||
Stock Options [Member] | ||||||
Value of option | $ 18,723 | $ 898,207 | $ 272,620 | |||
Grants | 100,000 | 4,600,000 | 1,423,236 | |||
Weighted average exercise price | $ 0.25 | $ 0.27 | ||||
Stock Options [Member] | Minimum [Member] | ||||||
Weighted average exercise price | $ 0.17 | |||||
Extended stock option exercisable, per share | 0.42 | |||||
Stock Options [Member] | Maximum [Member] | ||||||
Weighted average exercise price | 0.33 | |||||
Extended stock option exercisable, per share | $ 1.36 |
Warrants (Details)
Warrants (Details) - Warrants [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Number of Shares | ||
Beginning Balance | 4,105,398 | 7,237,763 |
Grants | 3,600,000 | 860,000 |
Expiration | (2,015,020) | (3,992,365) |
Ending Balance | 5,690,378 | 4,105,398 |
Warrants exercisable | 5,690,378 | 4,105,398 |
Weighted Average Exercise Price | ||
Beginning Balance | $ 0.59 | $ 0.51 |
Grants | 0.70 | 0.70 |
Expirations | 0.69 | 0.46 |
Ending Balance | 0.63 | 0.59 |
Options exercisable | $ 0.63 | $ 0.59 |
Weighted Average Remaining Contractual Life (years) | ||
Beginning Balance | 1 year 9 months 14 days | 1 year 4 months 6 days |
Grants | 5 years | 5 years |
Expirations | ||
Ending Balance | 3 years 8 months 19 days | 1 year 9 months 14 days |
Aggregate Intrinsic Value | ||
Beginning Balance | ||
Expirations | ||
Grants | ||
Ending Balance |
Warrants (Details 1)
Warrants (Details 1) | 12 Months Ended |
Dec. 31, 2019$ / sharesshares | |
Warrants [Member] | |
Number outstanding | shares | 5,690,378 |
Weighted Average Remaining Contractual Life (years) | 3 years 8 months 19 days |
Number Exercisable | shares | 5,690,378 |
Weighted Average Exercise Price Outstanding | $ 0.63 |
Weighted Average Exercise Price Exercisable | 0.63 |
Warrants [Member] | Minimum [Member] | |
Exercise Price | 0.35 |
Warrants [Member] | Maximum [Member] | |
Exercise Price | $ 0.70 |
Warrant One [Member] | |
Number outstanding | shares | 4,460,000 |
Weighted Average Remaining Contractual Life (years) | 4 years 5 months 12 days |
Number Exercisable | shares | 4,460,000 |
Weighted Average Exercise Price Outstanding | $ 0.70 |
Weighted Average Exercise Price Exercisable | 0.70 |
Exercise Price | $ 0.70 |
Warrant Two [Member] | |
Number outstanding | shares | 150,000 |
Weighted Average Remaining Contractual Life (years) | 11 months 1 day |
Number Exercisable | shares | 150,000 |
Weighted Average Exercise Price Outstanding | $ 0.45 |
Weighted Average Exercise Price Exercisable | 0.45 |
Exercise Price | $ 0.45 |
Warrant Three [Member] | |
Number outstanding | shares | 1,080,378 |
Weighted Average Remaining Contractual Life (years) | 1 year 1 month 17 days |
Number Exercisable | shares | 1,080,378 |
Weighted Average Exercise Price Outstanding | $ 0.35 |
Weighted Average Exercise Price Exercisable | 0.35 |
Exercise Price | $ 0.35 |
Warrants (Details 2)
Warrants (Details 2) - Warrants [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Exercise price | $ 0.70 | $ 0.70 |
Expected dividends | 0.00% | 0.00% |
Expected life | 5 years | 5 years |
Expected volatility | 100.00% | |
Risk free interest rate | 3.00% | |
Minimum [Member] | ||
Expected volatility | 100.00% | |
Risk free interest rate | 1.58% | |
Maximum [Member] | ||
Expected volatility | 112.00% | |
Risk free interest rate | 3.00% |
Warrants (Details Narrative)
Warrants (Details Narrative) - USD ($) | 1 Months Ended | 5 Months Ended | 12 Months Ended | |||||
Oct. 23, 2019 | Aug. 12, 2019 | Oct. 31, 2018 | Aug. 31, 2018 | Jun. 15, 2018 | Oct. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Convertible notes payable, net of current portion | $ 7,911,898 | $ 11,781,952 | ||||||
Warrants [Member] | ||||||||
Volatility factor rate | 100.00% | |||||||
Discount on notes payable | $ 243,294 | $ 11,450 | $ 28,900 | $ 89,450 | $ 525,142 | |||
Warrants exercisable | 1,000,000 | 100,000 | 200,000 | 560,000 | 2,600,000 | |||
Warrants exercise price | $ 0.70 | $ 0.70 | $ 0.70 | $ 0.70 | $ 0.70 | |||
Convertible notes payable, net of current portion | $ 100,000 | $ 200,000 | $ 560,000 | $ 2,600,000 | ||||
Conversion ratio | equal to $0.50 per share | equal to $0.50 per share | equal to $0.50 per share | equal to $0.50 per share | ||||
Common stock price per share | $ 0.35 | |||||||
Stock issued upon cashless warrant exercise | 37,210 | |||||||
Warrants to purchase common shares | 167,039 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Change in valuation allowance | $ 1,474,000 | $ 652,000 |
Income tax provision (benefit) | 14,000 | 22,153 |
Federal [Member] | ||
Current | ||
Deferred | (1,278,000) | (536,000) |
State and local [Member] | ||
Current | 14,000 | 22,000 |
Deferred | $ (196,000) | $ (116,000) |
Income Taxes (Details 1)
Income Taxes (Details 1) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Taxes | ||
U.S. federal statutory rate | 21.00% | 21.00% |
State taxes | 4.30% | (0.50%) |
Other permanent and prior period adjustments | (1.40%) | (7.40%) |
Valuation allowance | (24.20%) | (13.60%) |
Income tax provision | (0.30%) | (0.50%) |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 5,456,000 | $ 4,328,000 |
Stock based compensation | 1,285,000 | 888,000 |
Other | 81,000 | 115,000 |
Total deferred tax assets | 6,822,000 | 5,331,000 |
Deferred tax liabilities: | ||
Property and equipment | (57,000) | (51,000) |
Other | (44,000) | (33,000) |
Total deferred tax liabilities | (101,000) | (84,000) |
Valuation Allowance | (6,721,000) | (5,247,000) |
Net deferred tax asset |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
offset taxable income, net | 80.00% | |
Change in valuation allowance | $ 1,474,000 | $ 652,000 |
State [Member] | ||
Net operating loss | 3,531,815 | 2,873,351 |
US Federal [Member] | ||
Net operating loss | $ 22,640,000 | $ 20,608,000 |
Restatement of previously iss_3
Restatement of previously issued financial statements (unaudited) (Details) - USD ($) | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Current liabilities | ||||||
Profit Share liability | $ 2,328,845 | |||||
Secured note payable | 271,686 | 271,686 | ||||
Convertible notes payable, net of current portion | 7,911,898 | 11,781,952 | ||||
Total liabilities | 18,146,889 | 16,659,963 | ||||
Stockholders' deficit | ||||||
Additional paid-in capital | 48,708,085 | 42,785,990 | ||||
Accumulated deficit | (57,658,484) | (51,483,332) | ||||
Total stockholders' deficit | (8,873,651) | (8,621,096) | $ (4,424,786) | |||
Total liabilities and stockholders' deficit | $ 9,273,238 | $ 8,038,867 | ||||
As restated [Member] | ||||||
Current liabilities | ||||||
Profit Share liability | $ 2,210,230 | $ 2,097,655 | $ 1,991,940 | |||
Secured note payable | 271,686 | |||||
Convertible notes payable, net of current portion | 7,413,593 | 6,915,288 | 6,422,400 | |||
Total liabilities | 17,048,634 | 16,571,960 | 14,811,797 | |||
Stockholders' deficit | ||||||
Additional paid-in capital | 48,294,413 | 48,158,130 | 46,198,194 | |||
Accumulated deficit | (56,170,208) | (55,366,550) | (52,619,977) | |||
Total stockholders' deficit | (7,799,048) | (7,131,710) | (6,345,537) | |||
Total liabilities and stockholders' deficit | 9,249,586 | 9,440,250 | 8,466,260 | |||
Adjustment [Member] | ||||||
Current liabilities | ||||||
Profit Share liability | 2,210,230 | 2,097,655 | 1,991,940 | |||
Secured note payable | ||||||
Convertible notes payable, net of current portion | (2,339,289) | (2,179,831) | (1,981,568) | |||
Total liabilities | (120,059) | (82,176) | ||||
Stockholders' deficit | ||||||
Additional paid-in capital | 3,412,204 | 3,412,204 | ||||
Accumulated deficit | (3,283,145) | (3,330,028) | ||||
Total stockholders' deficit | 129,059 | 82,176 | ||||
Total liabilities and stockholders' deficit | ||||||
As previously reported [Member] | ||||||
Current liabilities | ||||||
Profit Share liability | ||||||
Secured note payable | 271,686 | |||||
Convertible notes payable, net of current portion | 9,752,882 | 9,095,119 | 8,403,968 | |||
Total liabilities | 17,177,693 | 16,654,136 | 14,801,425 | |||
Stockholders' deficit | ||||||
Additional paid-in capital | 44,882,209 | 44,745,926 | 42,785,990 | |||
Accumulated deficit | (52,887,063) | (52,036,522) | (49,197,401) | |||
Total stockholders' deficit | (7,928,107) | (7,213,886) | (6,335,165) | |||
Total liabilities and stockholders' deficit | $ 9,249,586 | $ 9,440,250 | $ 8,466,260 |
Restatement of previously iss_4
Restatement of previously issued financial statements (unaudited) (Details 1) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2019 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Loss on change in fair value of profit share | $ 374,462 | ||||||
Gain on debt restructuring | 44,036 | ||||||
Total costs and expenses | 17,500,313 | 17,090,389 | |||||
Net income (loss) | $ (6,097,286) | $ (4,816,680) | |||||
Net loss per common share-basic and diluted: | $ (0.08) | $ (0.06) | |||||
As restated [Member] | |||||||
Interest expense & letter of credit fees | $ 623,237 | $ 565,610 | $ 502,008 | $ 1,067,619 | $ 1,690,855 | ||
Loss on change in fair value of profit share | 112,575 | 105,715 | 37,557 | 143,272 | 255,847 | ||
Gain on debt restructuring | |||||||
Total costs and expenses | 4,399,765 | 5,256,323 | 3,846,100 | 9,102,422 | 13,502,187 | ||
Net income (loss) | $ (803,658) | $ (2,746,573) | $ (1,058,779) | $ (3,805,352) | $ (4,609,010) | ||
Net loss per common share-basic and diluted: | $ (0.01) | $ (0.04) | $ (0.01) | $ (0.05) | $ (0.06) | ||
Adjustment [Member] | |||||||
Interest expense & letter of credit fees | $ (159,458) | $ (198,263) | $ (27,185) | $ (225,448) | $ (529,918) | ||
Loss on change in fair value of profit share | 112,575 | 105,715 | 37,557 | 143,272 | 255,847 | ||
Gain on debt restructuring | 3,412,204 | 3,412,204 | 3,412,204 | ||||
Total costs and expenses | (46,883) | (92,548) | 3,422,576 | 3,330,028 | 3,138,133 | ||
Net income (loss) | $ 46,883 | $ 92,548 | $ (3,422,576) | $ (3,330,028) | $ (3,283,145) | ||
Net loss per common share-basic and diluted: | $ 0 | $ (0.04) | $ (0.04) | $ (0.04) | |||
As previously reported [Member] | |||||||
Interest expense & letter of credit fees | $ 782,695 | $ 763,873 | $ 529,193 | $ 1,293,067 | $ 2,075,761 | ||
Loss on change in fair value of profit share | |||||||
Gain on debt restructuring | (3,412,204) | (3,412,204) | (3,412,204) | ||||
Total costs and expenses | 4,446,648 | 5,348,871 | 423,524 | 5,772,394 | 10,219,042 | ||
Net income (loss) | $ (850,541) | $ (2,839,121) | $ 2,363,797 | $ (475,324) | $ (1,325,865) | ||
Net loss per common share-basic and diluted: | $ (0.01) | $ (0.04) | $ 0.03 | $ (0.01) | $ (0.02) |
Restatement of previously iss_5
Restatement of previously issued financial statements (unaudited) (Details 2) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2019 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows from operating activities | |||||||
Net income (loss) | $ (6,097,286) | $ (4,816,680) | |||||
Adjustments to reconcile net loss to net cash | |||||||
Amortization of discount of notes payable | 1,752,639 | 678,061 | |||||
Loss on change in fair value of profit share | 374,462 | ||||||
Gain on debt restructuring | 44,036 | ||||||
Net cash provided by (used in) operating activities | $ (1,576,948) | $ (1,065,458) | |||||
As restated [Member] | |||||||
Cash flows from operating activities | |||||||
Net income (loss) | $ (803,658) | $ (2,746,573) | $ (1,058,779) | $ (3,805,352) | $ (4,609,010) | ||
Adjustments to reconcile net loss to net cash | |||||||
Amortization of discount of notes payable | 276,512 | 713,084 | 1,200,780 | ||||
Loss on change in fair value of profit share | 37,557 | 143,272 | 255,847 | ||||
Gain on debt restructuring | |||||||
Net cash provided by (used in) operating activities | 68,245 | (506,674) | (1,304,626) | ||||
Adjustment [Member] | |||||||
Cash flows from operating activities | |||||||
Net income (loss) | 46,883 | 92,548 | (3,422,576) | (3,330,028) | (3,283,145) | ||
Adjustments to reconcile net loss to net cash | |||||||
Amortization of discount of notes payable | (27,185) | (225,448) | (384,906) | ||||
Loss on change in fair value of profit share | 37,557 | 143,272 | 255,847 | ||||
Gain on debt restructuring | 3,412,204 | 3,412,204 | 3,412,204 | ||||
Net cash provided by (used in) operating activities | |||||||
As previously reported [Member] | |||||||
Cash flows from operating activities | |||||||
Net income (loss) | (850,541) | (2,839,121) | 2,363,797 | (475,324) | (1,325,865) | ||
Adjustments to reconcile net loss to net cash | |||||||
Amortization of discount of notes payable | 303,697 | 938,532 | 1,585,686 | ||||
Loss on change in fair value of profit share | |||||||
Gain on debt restructuring | (3,412,204) | (3,412,204) | (3,412,204) | ||||
Net cash provided by (used in) operating activities | $ 68,245 | $ (506,674) | $ (1,304,626) |
Restatement of previously iss_6
Restatement of previously issued financial statements (unaudited) (Details 3) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Cumulative effect of change in accounting principle related to accounting for leases | $ (77,866) | ||||
Cumulative effect of change in accounting principle related to accounting for leases | (77,866) | ||||
Stock issued per resignation agreements, amount | 118,540 | ||||
Issuance of stock options | 898,207 | $ 351,770 | |||
Extension of certain stock option expiration | 745,989 | ||||
Issuance of warrants, recorded as discount on convertible notes payable | 485,640 | ||||
Net income | $ (6,097,286) | $ (4,816,680) | |||
Total [Member] | |||||
Shares Outstanding,shares, Begining balance | |||||
Shares Outstanding, amount, Begining balance | $ (7,131,710) | $ (6,345,537) | $ (8,621,096) | ||
Cumulative effect of change in accounting principle related to accounting for leases | (77,866) | ||||
Cumulative effect of change in accounting principle related to accounting for leases | (77,866) | ||||
Capital contribution | 3,412,204 | ||||
Stock issued per resignation agreements, amount | 118,540 | ||||
Issuance of stock options | 898,207 | ||||
Extension of certain stock option expiration | 745,989 | ||||
Stock issued upon cashless warrant exercise, amount | |||||
Issuance of warrants, recorded as discount on convertible notes payable | 136,320 | ||||
Net income | (803,658) | (2,746,573) | $ (1,058,779) | ||
Shares Outstanding,shares, Ending balance | |||||
Shares Outstanding, amount, Ending balance | $ (7,799,048) | $ (7,131,710) | $ (6,345,537) | ||
Common Stock [Member] | |||||
Shares Outstanding,shares, Begining balance | 76,710,630 | 76,246,113 | 76,246,113 | ||
Shares Outstanding, amount, Begining balance | $ 76,710 | $ 76,246 | $ 76,246 | ||
Cumulative effect of change in accounting principle related to accounting for leases | |||||
Cumulative effect of change in accounting principle related to accounting for leases | |||||
Capital contribution | |||||
Stock issued per resignation agreements, amount | 464 | ||||
Issuance of stock options | |||||
Extension of certain stock option expiration | $ 745,989 | ||||
Stock issued upon cashless warrant exercise, amount | $ 37 | ||||
Issuance of warrants, recorded as discount on convertible notes payable | |||||
Net income | |||||
Shares Outstanding,shares, Ending balance | 76,747,750 | 76,710,630 | 76,246,113 | ||
Shares Outstanding, amount, Ending balance | $ 76,747 | $ 76,710 | $ 76,246 | ||
Stock issued per resignation agreements, shares | 464,517 | ||||
Stock issued upon cashless warrant exercise, shares | 37,120 | ||||
Accumulated (Deficit) [Member] | |||||
Shares Outstanding,shares, Begining balance | |||||
Shares Outstanding, amount, Begining balance | $ (55,366,550) | (52,619,977) | $ (51,483,332) | ||
Cumulative effect of change in accounting principle related to accounting for leases | (77,866) | ||||
Cumulative effect of change in accounting principle related to accounting for leases | (77,866) | ||||
Capital contribution | |||||
Stock issued per resignation agreements, amount | |||||
Issuance of stock options | |||||
Extension of certain stock option expiration | |||||
Stock issued upon cashless warrant exercise, amount | |||||
Net income | (803,658) | (2,746,573) | $ (1,058,779) | ||
Shares Outstanding,shares, Ending balance | |||||
Shares Outstanding, amount, Ending balance | (56,170,208) | (55,366,550) | $ (52,619,977) | ||
Additional Paid in Capital [Member] | |||||
Shares Outstanding,shares, Begining balance | |||||
Shares Outstanding, amount, Begining balance | 48,158,130 | 46,198,194 | $ 42,785,990 | ||
Cumulative effect of change in accounting principle related to accounting for leases | |||||
Cumulative effect of change in accounting principle related to accounting for leases | |||||
Capital contribution | 3,412,204 | ||||
Stock issued per resignation agreements, amount | 118,076 | ||||
Issuance of stock options | 898,207 | ||||
Extension of certain stock option expiration | |||||
Stock issued upon cashless warrant exercise, amount | (37) | ||||
Issuance of warrants, recorded as discount on convertible notes payable | 136,320 | ||||
Net income | |||||
Shares Outstanding,shares, Ending balance | |||||
Shares Outstanding, amount, Ending balance | $ 48,294,413 | $ 46,198,194 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - Subsequent Event [Member] - USD ($) | Apr. 14, 2020 | Feb. 25, 2020 | Dec. 31, 2019 |
Advisory Agreement [Member] | Non Affilated Third Party [Member] | January 1, 2020 [Member] | |||
Stock stock shares issued upon service rendered | 1,000,000 | ||
First International Bank & Trust [Member] | |||
Proceeds from loan | $ 299,300 | ||
First International Bank & Trust [Member] | Business Loan Agreement [Member] | |||
Secured loan, principal amount | $ 200,000 | ||
Rate of interest | 8.75% | ||
Date of maturity | Feb. 26, 2021 |