Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Nov. 14, 2017 | |
Document And Entity Information | ||
Entity Registrant Name | GlyEco, Inc. | |
Entity Central Index Key | 931,799 | |
Document Type | 10-Q | |
Trading Symbol | GLYE | |
Document Period End Date | Sep. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity a Well-known Seasoned Issuer | No | |
Entity a Voluntary Filer | No | |
Entity's Reporting Status Current | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 164,476,257 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,017 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (unaudited) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Current Assets | ||
Cash | $ 181,671 | $ 1,413,999 |
Cash - restricted | 22,435 | 76,552 |
Accounts receivable, net | 1,561,422 | 1,096,713 |
Prepaid expenses | 288,133 | 340,899 |
Inventories | 905,297 | 644,522 |
Total current assets | 2,958,958 | 3,572,685 |
Property, plant and equipment, net | 4,072,413 | 3,657,839 |
Other Assets | ||
Deposits | 436,450 | 387,035 |
Goodwill | 3,822,583 | 3,693,083 |
Other intangible assets, net | 2,398,541 | 2,794,204 |
Total other assets | 6,657,574 | 6,874,322 |
Total assets | 13,688,945 | 14,104,846 |
Current Liabilities | ||
Accounts payable and accrued expenses | 2,464,156 | 961,010 |
Due to related parties | 6,191 | |
Contingent acquisition consideration | 1,767,458 | 1,821,575 |
Notes payable - current portion, net of debt discount | 108,575 | 2,541,178 |
Capital lease obligations - current portion | 365,811 | 6,838 |
Total current liabilities | 4,706,000 | 5,336,792 |
Non-Current Liabilities | ||
Notes payable - non-current portion | 2,978,782 | 2,963,640 |
Capital lease obligations - non-current portion | 1,185,179 | 3,371 |
Total non-current liabilities | 4,163,961 | 2,967,011 |
Total liabilities | 8,869,961 | 8,303,803 |
Stockholders' Equity | ||
Preferred stock; 40,000,000 shares authorized; $0.0001 par value; no shares issued and outstanding as of September 30, 2017 and December 31, 2016 | ||
Common stock, 300,000,000 shares authorized; $0.0001 par value; 164,415,465 and 126,156,189 shares issued and outstanding as of September 30, 2017 and December 31, 2016, respectively | 16,442 | 12,616 |
Additional paid-in capital | 45,685,287 | 42,603,490 |
Accumulated deficit | (40,882,745) | (36,815,063) |
Total stockholders' equity | 4,818,984 | 5,801,043 |
Total liabilities and stockholders' equity | $ 13,688,945 | $ 14,104,846 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (unaudited) (Parenthetical) - $ / shares | Sep. 30, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Preferred stock, authorized | 40,000,000 | 40,000,000 |
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
Common stock, authorized | 300,000,000 | 300,000,000 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, issued | 164,415,465 | 126,156,189 |
Common stock, outstanding | 164,415,465 | 126,156,189 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Statement [Abstract] | ||||
Sales, net | $ 3,284,670 | $ 1,388,980 | $ 8,493,088 | $ 4,145,741 |
Cost of goods sold | 2,876,577 | 1,282,507 | 7,468,406 | 3,968,501 |
Gross profit | 408,093 | 106,473 | 1,024,682 | 177,240 |
Operating expenses | ||||
Consulting fees | 149,233 | 13,479 | 368,195 | 114,902 |
Share-based compensation | 129,707 | 258,613 | 361,241 | 856,848 |
Salaries and wages | 539,651 | 277,058 | 1,246,252 | 816,069 |
Legal and professional | 152,797 | 50,255 | 501,528 | 192,152 |
Tank remediation | 780,000 | 780,000 | ||
General and administrative | 411,966 | 200,421 | 1,112,307 | 736,802 |
Total operating expenses | 2,163,354 | 799,826 | 4,369,523 | 2,716,773 |
Loss from operations | (1,755,261) | (693,353) | (3,344,841) | (2,539,533) |
Other (income) and expenses | ||||
Interest income | (108) | (326) | ||
Loss on debt extinguishment | 146,564 | 146,564 | ||
Interest expense | 154,068 | 5,761 | 573,671 | 17,739 |
Gain on settlement of note payable | (15,000) | |||
Total other expense, net | 300,632 | 5,653 | 720,235 | 2,413 |
Loss before provision for income taxes | (2,055,893) | (699,006) | (4,065,076) | (2,541,946) |
Provision for income taxes | 653 | 85 | 2,606 | 6,031 |
Net loss | $ (2,056,546) | $ (699,091) | $ (4,067,682) | $ (2,547,977) |
Basic and diluted loss per share (in dollars per share) | $ (0.01) | $ (0.01) | $ (0.03) | $ (0.02) |
Weighted average number of common shares outstanding - basic and diluted | 148,727,226 | 118,838,577 | 134,709,077 | 106,102,370 |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Statement of Stockholders' Equity (Unaudited) - 9 months ended Sep. 30, 2017 - USD ($) | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
Balance, at beginning at Dec. 31, 2016 | $ 12,616 | $ 42,603,490 | $ (36,815,063) | $ 5,801,043 |
Balance, at beginning (in shares) at Dec. 31, 2016 | 126,156,189 | 126,156,189 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Share-based compensation | $ 265 | 360,976 | $ 361,241 | |
Share-based compensation (in shares) | 2,652,514 | |||
Offering of common shares, net | $ 832 | 540,947 | 541,779 | |
Offering of common shares, net (in shares) | 8,324,212 | |||
Notes payable and accrued interest converted into common stock in connection with rights offering | $ 2,031 | 1,622,712 | 1,624,743 | |
Notes payable and accrued interest converted into common stock in connection with rights offering (in shares) | 20,309,300 | |||
Notes payable and accrued interest converted into common stock | $ 276 | 220,084 | 220,360 | |
Notes payable and accrued interest converted into common stock (in shares) | 2,754,500 | |||
Exercise of warrants | $ 422 | 337,078 | 337,500 | |
Exercise of warrants (in shares) | 4,218,750 | |||
Net loss | (4,067,682) | (4,067,682) | ||
Balance, at end at Sep. 30, 2017 | $ 16,442 | $ 45,685,287 | $ (40,882,745) | $ 4,818,984 |
Balance, at end (in shares) at Sep. 30, 2017 | 164,415,465 | 164,415,465 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows (unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Net cash flow from operating activities | ||
Net loss | $ (4,067,682) | $ (2,547,977) |
Adjustments to reconcile net loss to net cash used in operating activities | ||
Depreciation | 360,854 | 193,775 |
Amortization | 395,663 | 60,622 |
Share-based compensation expense | 361,241 | 856,848 |
Amortization of debt discount | 205,180 | |
Loss on debt extinguishment | 146,564 | |
Loss on disposal of equipment | 28,446 | |
Provision for bad debt | 65,946 | 27,264 |
Gain on settlement of note payable | (15,000) | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (530,655) | 122,815 |
Prepaid expenses | 52,766 | 9,859 |
Inventories | (260,775) | 144,799 |
Deposits | (49,415) | (5,347) |
Accounts payable and accrued expenses | 1,588,249 | (732,074) |
Due to related parties | (6,191) | (34,405) |
Net cash used in operating activities | (1,709,809) | (1,918,821) |
Cash flows from investing activities | ||
Cash paid for acquisition | (129,500) | (100,000) |
Cash - restricted | (100,000) | |
Purchases of property, plant and equipment | (687,219) | (249,698) |
Net cash used in investing activities | (816,719) | (449,698) |
Cash flows from financing activities | ||
Repayment of notes payable | (1,125,860) | (125,736) |
Repayment of capital lease obligations | (159,219) | (8,951) |
Proceeds from sale-leaseback | 1,700,000 | |
Proceeds from exercise of warrants | 337,500 | |
Proceeds from sale of common stock, net | 541,779 | 2,936,792 |
Net cash provided by financing activities | 1,294,200 | 2,802,105 |
Net change in cash | (1,232,328) | 433,586 |
Cash at beginning of the period | 1,413,999 | 1,276,687 |
Cash at end of the period | 181,671 | 1,710,273 |
Supplemental disclosure of cash flow information | ||
Interest paid during period | 46,549 | 17,739 |
Income taxes paid during period | 2,606 | 6,031 |
Supplemental disclosure of non-cash items | ||
Acquisition of equipment with notes payable | 116,655 | 319,856 |
Acquisition of equipment included in accounts payable | 117,900 | |
Acquisition of equipment with capital lease obligation | 1,700,000 | |
Notes payable and accrued interest converted into shares of common stock | 1,845,103 | |
Reduction in contingent acquisition liability through restricted cash | $ 54,117 |
Organization and Nature of Busi
Organization and Nature of Business | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Nature of Business | NOTE 1 – Organization and Nature of Business On December 27, 2016, the Company purchased WEBA Technology Corp. (“WEBA”), a privately-owned company that develops, manufactures and markets additive packages for the antifreeze/coolant, gas patch coolants and heat transfer industries; and purchased 96% of Recovery Solutions & Technologies Inc. (“RS&T”), a privately-owned company involved in the development and commercialization of glycol recovery technology. On December 28, 2016, the Company purchased certain glycol distillation assets from Union Carbide Corporation (“UCC”), a wholly-owned subsidiary of The Dow Chemical Company (“Dow”), located in Institute, West Virginia (the “Dow Assets”). During the three months ended March 31, 2017, the Company acquired the remaining 4% of RS&T not already owned by the Company. Going Concern The condensed consolidated financial statements as of September 30, 2017 and December 31, 2016 and for the three and nine months ended September 30, 2017 and 2016, have been prepared assuming that the Company will continue as a going concern. As of September 30, 2017, the Company has yet to achieve profitable operations and is dependent on its ability to raise capital from stockholders or other sources to sustain operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Ultimately, we plan to achieve profitable operations through the implementation of operating efficiencies at our facilities and increased revenue through the offering of additional products and the expansion of our geographic footprint through acquisitions, broader distribution from our current facilities and/or the opening of additional facilities. The condensed consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties. |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | NOTE 2 – Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation The accompanying condensed consolidated financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States (“GAAP”), and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). In the opinion of management, the accompanying unaudited interim condensed consolidated financial statements reflect all adjustments (consisting of normal recurring accruals) necessary for a fair presentation on an interim basis. The operating results for the nine months ended September 30, 2017 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2017. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted; however, management believes that the disclosures are adequate to make the information presented not misleading. This report should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2016, including the Company’s audited consolidated financial statements and related notes included therein. Principles of Consolidation These consolidated financial statements include the accounts of GlyEco, Inc., and its wholly-owned subsidiaries. All significant intercompany transactions have been eliminated as a result of consolidation. Noncontrolling Interests The Company recognizes noncontrolling interests as equity in the consolidated financial statements separate from the parent company’s equity. Noncontrolling interests’ partners have less than 50% share of voting rights at any one of the subsidiary level companies. The amount of net income (loss) attributable to noncontrolling interests is included in consolidated net income (loss) on the face of the consolidated statements of operations. Changes in a parent entity’s ownership interest in a subsidiary that do not result in deconsolidation are treated as equity transactions if the parent entity retains its controlling financial interest. The Company recognizes a gain or loss in net income (loss) when a subsidiary is deconsolidated. Such gain or loss is measured using the fair value of the noncontrolling equity investment on the deconsolidation date. Additionally, operating losses are allocated to noncontrolling interests even when such allocation creates a deficit balance for the noncontrolling interest partner. The Company provides either in the consolidated statements of stockholders’ equity, if presented, or in the notes to consolidated financial statements, a reconciliation at the beginning and the end of the period of the carrying amount of total equity (net assets), equity (net assets) attributable to the parent, and equity (net assets) attributable to the noncontrolling interest that separately discloses: (1) Net income or loss (2) Transactions with owners acting in their capacity as owners, showing separately contributions from and distributions to owners. (3) Each component of other comprehensive income or loss Operating Segments Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated on a regular basis by the chief operating decision maker, or decision-making group, in deciding how to allocate resources to an individual segment and in assessing the performance of the segment. Operating segments may be aggregated into a single operating segment if the segments have similar economic characteristics, among other criteria. Prior to the December 2016 acquisitions of WEBA, RS&T and the DOW Assets and through December 31, 2016, the Company operated as one segment. As of January 1, 2017, we have two operating segments, Consumer and Industrial. (See Note 7) Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported revenues and expenses during the reporting periods. Because of the use of estimates inherent within the financial reporting process, actual results may differ significantly from those estimates. Significant estimates include, but are not limited to, items such as the allowance for doubtful accounts, the value of share-based compensation and warrants, the allocation of the purchase price in the Company’s acquisitions, the recoverability of property, plant and equipment, goodwill, other intangibles and their estimated useful lives, contingent liabilities, and environmental and asset retirement obligations. Due to the uncertainties inherent in the formulation of accounting estimates, it is reasonable to expect that these estimates could be materially revised within the next year. Revenue Recognition The Company recognizes revenue when (1) delivery of product has occurred or services have been rendered, (2) there is persuasive evidence of a sale arrangement, (3) selling prices are fixed or determinable, and (4) collectability from the customer (individual customers and distributors) is reasonably assured. Revenue consists primarily of revenue generated from the sale of the Company’s products. This generally occurs either when the Company’s products are shipped from its facility or delivered to the customer when title has passed. Revenue is recorded net of estimated cash discounts. The Company estimates and accrues an allowance for sales returns at the time the product is sold. To date, sales returns have not been material. Shipping costs passed to the customer are included in net sales. Costs Cost of goods sold includes all direct material and labor costs and those indirect costs of bringing raw materials to sale condition, including depreciation of equipment used in manufacturing and shipping and handling costs. Selling, general, and administrative costs are charged to operating expenses as incurred. Research and development costs are expensed as incurred, are included in operating expenses and were insignificant in 2017 and 2016. Advertising costs are expensed as incurred. Accounts Receivable Accounts receivable are recognized and carried at the original invoice amount less an allowance for expected uncollectible amounts. Inherent in the assessment of the allowance for doubtful accounts are certain judgments and estimates including, among others, the customer’s willingness or ability to pay, the Company’s compliance with customer invoicing requirements, the effect of general economic conditions and the ongoing relationship with the customer. Accounts with outstanding balances longer than the payment terms are considered past due. We do not charge interest on past due balances. The Company writes off trade receivables when all reasonable collection efforts have been exhausted. Bad debt expense is reflected as a component of general and administrative expenses in the consolidated statements of operations. The allowance for doubtful accounts totaled $133,126 and $80,207 as of September 30, 2017 and December 31, 2016, respectively. Inventories Inventories are reported at the lower of cost or net realizable value. The cost of raw materials, including feedstocks and additives, is determined on an average unit cost of the units in a production lot. Work-in-process represents labor, material and overhead costs associated with the manufacturing costs at an average unit cost of the units in the production lot. Finished goods represents work-in-process items with additive costs added. The Company periodically reviews its inventories for obsolete or unsalable items and adjusts its carrying value to reflect estimated realizable values. Property, Plant and Equipment Property, plant and equipment is stated at cost. The Company provides for depreciation on the cost of its equipment using the straight-line method over an estimated useful life, ranging from three to twenty years, and zero salvage value. Expenditures for repairs and maintenance are charged to expense as incurred. For purposes of computing depreciation, the useful lives of property, plant and equipment are as follows: Leasehold improvements Lesser of the remaining lease term or 5 years Machinery and equipment 3-15 years Business Combinations The Company accounts for business combinations by recognizing the assets acquired, liabilities assumed, contractual contingencies, and contingent consideration at their fair values on the acquisition date. The purchase price allocation process requires management to make significant estimates and assumptions, especially with respect to intangible assets, estimated contingent consideration payments and pre-acquisition contingencies. Examples of critical estimates in valuing certain of the intangible assets the Company has acquired or may acquire in the future include but are not limited to: ● future expected cash flows from product sales, other customer contracts, and ● discount rates utilized in valuation estimates. Unanticipated events and circumstances may occur that may affect the accuracy or validity of such assumptions, estimates or actual results. Additionally, any change in the fair value of the acquisition-related contingent consideration subsequent to the acquisition date, including changes from events after the acquisition date, such as changes in our estimates of relevant revenue or other targets, will be recognized in earnings in the period of the estimated fair value change. A change in fair value of the acquisition-related contingent consideration or the occurrence of events that cause results to differ from our estimates or assumptions could have a material effect on the consolidated financial position, statements of operations or cash flows in the period of the change in the estimate. Goodwill and Intangible Assets Intangible assets that we acquire are recognized separately if they arise from contractual or other legal rights or if they are separable and are recorded at fair value less accumulated amortization. We analyze intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. We review the amortization method and period at least at each balance sheet date. The effects of any revision are recorded to operations when the change arises. We recognize impairment when the estimated undiscounted cash flow generated by those assets is less than the carrying amounts of such assets. The amount of impairment is the excess of the carrying amount over the fair value of such assets. The Company’s management believes there is no impairment of long-lived assets as of September 30, 2017. However, market conditions could change or demand for the Company’s products could decrease, which could result in future impairment of long-lived assets Goodwill is recorded as the excess of (i) the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition date fair value of any previous equity interest in the acquired over the (ii) fair value of the net identifiable assets acquired. We do not amortize goodwill; however, we annually, or whenever there is an indication that goodwill may be impaired, evaluate qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step quantitative goodwill impairment test. The Company measures the carrying amount of the asset against the estimated undiscounted future cash flows associated with it. Should the sum of the expected future net cash flows be less than the carrying value of the asset being evaluated, an impairment loss would be recognized. The impairment loss would be calculated as the amount by which the carrying value of the assets exceeds fair value. Any future increases in fair value would not result in an adjustment to the impairment loss that may be recorded in our consolidated financial statements. Our test of goodwill impairment includes assessing qualitative factors and the use of judgment in evaluating economic conditions, industry and market conditions, cost factors, and entity-specific events, as well as overall financial performance. Based on our analysis, no impairment loss of goodwill was recorded in 2017 and 2016 as the carrying amount of the reporting unit’s assets did not exceed the estimated fair value determined. Impairment of Long-Lived Assets Property, plant and equipment, purchased intangibles subject to amortization and patents and trademarks, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of would be separately presented in the consolidated balance sheet and reported at the lower of the carrying amount or fair value less costs to sell, and are no longer depreciated. The assets and liabilities of a disposal group classified as held-for-sale would be presented separately in the appropriate asset and liability sections of the consolidated balance sheet, if material. The three levels of inputs that may be used to measure fair value are as follows: ● Level 1 ● Level 2 ● Level 3 Cash, restricted cash, accounts receivable, accounts payable and accrued expenses, amounts due to related parties and current portion of capital lease obligations and notes payable are reflected in the consolidated balance sheets at their estimated fair values primarily due to their short-term nature. As to long-term capital lease obligations and notes payable, carrying values approximate fair value since the estimated fair values are based on borrowing rates currently available to the Company for loans with similar terms and maturities. Deferred Financing Costs, Debt Discount and Detachable Debt-Related Warrants Costs incurred in connection with debt are deferred and recorded as a reduction to the debt balance in the accompanying condensed consolidated balance sheets. The Company amortizes debt issuance costs over the expected term of the related debt using the effective interest method. Debt discounts related to the relative fair value of warrants issued in conjunction with the debt are also recorded as a reduction to the debt balance and amortized over the expected term of the debt to interest expense using the effective interest method. Net Loss Per Share Calculation The basic net loss per common share is computed by dividing the net loss available to common shareholders by the weighted average number of shares outstanding during a period. Diluted loss per common share is computed by dividing the net loss available to common shareholders by the weighted average number of common shares outstanding plus potentially dilutive securities. The Company’s potentially dilutive securities outstanding are not shown in a diluted net loss per share calculation because their effect in both 2017 and 2016 would be anti-dilutive. At September 30, 2017, these potentially dilutive securities included warrants of 5,648,124 and stock options of 4,872,621 for a total of 10,520,745. At September 30, 2016, these potentially dilutive securities included warrants of 8,266,137 and stock options of 7,935,093 for a total of 16,201,230. Income Taxes The Company accounts for its income taxes in accordance with Financial Accounting Standard Board (“FASB”) Accounting Standards Codification (“ASC”) 740, “Income Taxes,” which requires recognition of deferred tax assets and liabilities for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credit carry forwards. Deferred 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 operations in the period that includes the enactment date. An allowance for the deferred tax asset is established if it is more likely than not that the asset will not be realized. Share-based Compensation All share-based payments to employees and non-employee directors, including grants of employee stock options, are expensed based on their estimated fair values at the grant date, in accordance with ASC 718. Compensation expense for share-based payments to employees and directors is recorded over the vesting period using the estimated fair value on the date of grant, as calculated by the Company using the Black-Scholes-Merton (“BSM”) option-pricing model or the Monte Carlo Simulation. For awards with only service conditions that have graded vesting schedules, compensation cost is recorded on a straight-line basis over the requisite service period for the entire award, unless vesting occurs earlier. For awards with market conditions, compensation cost is recorded on the accelerated attribution method over the derived service period. Non-employee share-based compensation is accounted for based on the fair value of the related stock or options, using the BSM, or the fair value of the goods or services on the measurement date, whichever is more readily determinable. Recently Issued Accounting Pronouncements There have been no recent accounting pronouncements or changes in accounting pronouncements that are of significance, or potential significance to the Company, except as discussed below. In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09”). This updated guidance supersedes the current revenue recognition guidance, including industry-specific guidance. The updated guidance introduces a five-step model to achieve its core principal of the entity recognizing revenue to depict the transfer of goods or services to customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The updated guidance is effective for interim and annual periods beginning after December 15, 2016, and early adoption is not permitted. In July 2015, the FASB decided to delay the effective date of ASU 2014-09 until December 15, 2017. The FASB also agreed to allow entities to choose to adopt the standard as of the original effective date. The Company has not yet selected a transition method and is currently assessing the impact the adoption of ASU 2014-09 will have on its condensed consolidated financial statements and disclosures. In February 2016, the FASB issued ASU 2016-02, “Leases”, which requires the lease rights and obligations arising from lease contracts, including existing and new arrangements, to be recognized as assets and liabilities on the balance sheet. ASU 2016-02 is effective for reporting periods beginning after December 15, 2018 with early adoption permitted. While the Company is still evaluating ASU 2016-02, the Company expects the adoption of ASU 2016-02 to have a material effect on the Company’s consolidated financial condition due to the recognition of the lease rights and obligations as assets and liabilities. The Company is currently assessing the impact of the adoption of ASU 2016-02 will have on its condensed consolidated financial statements and disclosures . In January 2017, the FASB, issued ASU No. 2017-04, “Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment” which simplifies the accounting for goodwill impairment by eliminating Step 2 of the current goodwill impairment test. Goodwill impairment will now be the amount by which the reporting unit’s carrying value exceeds its fair value, limited to the carrying value of the goodwill. ASU 2017-04 is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted for any impairment tests performed after January 1, 2017. The Company has not yet decided if it will early adopt the provisions in this ASU for its annual goodwill impairment test during 2017. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Inventories | NOTE 3 – Inventories The Company’s total inventories were as follows: September 30, December 31, 2017 2016 Raw materials $ 514,129 $ 221,088 Work in process 23,903 172,142 Finished goods 367,265 251,292 Total inventories $ 905,297 $ 644,522 |
Acquisitions, Goodwill and Othe
Acquisitions, Goodwill and Other Intangible Assets | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Acquisitions, Goodwill and Other Intangible Assets | NOTE 4 – Acquisitions, Goodwill and Other Intangible Assets WEBA On December 27, 2016, the Company entered into a Stock Purchase Agreement (“WEBA SPA”) with WEBA, a privately-owned company that develops, manufactures and markets additive packages for the antifreeze/coolant, gas patch coolants and heat transfer industries. Pursuant to the WEBA SPA, the Company acquired all of the WEBA shares from the WEBA sellers for $150,000 in cash and $2.65 million in 8% Promissory Notes (see Note 8). In addition, the WEBA sellers may be entitled to receive earn-out payments of up to an aggregate of $2,500,000 for calendar years 2017, 2018, and 2019 based upon terms set forth in the WEBA SPA. The Company also issued 5,625,000 shares as repayment of $450,000 of notes payable due to the WEBA sellers. The fair market value of the shares was $0.10 on the date of issuance. Following the WEBA acquisition, WEBA became a wholly owned subsidiary of the Company. We accounted for the acquisition of WEBA as required under applicable accounting guidance. Tangible assets acquired are recorded at fair value. Identifiable intangible assets that we acquired are recognized separately if they arise from contractual or other legal rights or if they are separable, and are recorded at fair value. Goodwill is recorded as the excess of the consideration transferred over the fair value of the net identifiable assets acquired. The earn-out payments liability was recorded at their estimated fair value of $1,745,023. Although management estimates that certain of the contingent consideration will be paid, it has applied a discount rate to the contingent consideration amounts in determining fair value to represent the risk of these payments not being made. The total acquisition date fair value of the consideration transferred and to be transferred is estimated at approximately $5.1 million, as follows: Cash payment to the WEBA Sellers at closing $ 150,000 Common stock issuance to the WEBA Sellers 562,500 Promissory notes to the WEBA Sellers 2,650,000 Contingent cash consideration to the WEBA Sellers 1,745,023 Total acquisition date fair value $ 5,107,523 Allocation of Consideration Transferred The identifiable assets acquired and liabilities assumed were recognized and measured as of the acquisition date based on their estimated fair values as of December 27, 2016, the acquisition date. The excess of the acquisition date fair value of consideration transferred over the estimated fair value of the net tangible assets and intangible assets acquired was recorded as goodwill. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date. Cash $ 172,950 Accounts receivable 342,151 Loan receivable from RS&T 500,000 Property and equipment 8,720 Customer list 470,000 Intellectual property 880,000 Trade name 390,000 Non complete agreement 835,000 Total identifiable assets acquired 3,598,821 Accounts payable and accrued expenses 190,527 Deferred tax liability 1,030,000 Total liabilities assumed 1,220,527 Total identifiable assets less liabilities assumed 2,378,294 Goodwill 2,729,229 Net assets acquired $ 5,107,523 The Company is amortizing the intangibles (excluding goodwill) over an estimated useful life of five to ten years. The Company will evaluate the fair value of the earn-out liability on a periodic basis and adjust the balance, with an offsetting adjustment to the income statement, as needed. The acquisition was considered to be significant. The Company has included the financial results of the WEBA acquisition in its consolidated financial statements from the acquisition date and the results from WEBA were not material to the Company’s consolidated financial statements for the year ended December 31, 2016. Pro Forma Financial Information The following table presents the Company’s unaudited pro forma results (including WEBA) for the three and nine months ended September 30, 2016 as though the companies had been combined as of the beginning of each of the periods presented. The pro forma information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of each period presented, nor is it indicative of results of operations which may occur in the future. The unaudited pro forma results presented include amortization charges for intangible assets and eliminations of intercompany transactions. For the For the Three Months Ended Nine Months Ended September 30, 2016 September 30, 2016 Total revenues $ 1,933,311 $ 5,711,266 Net loss $ (839,801 ) $ (2,773,438 ) The Company did not incur material acquisition expenses related to the WEBA acquisition. The components of goodwill and other intangible assets related to the WEBA SPA, along with various other business combinations are as follows: Gross Balance at Net Balance at Net Balance at Estimated December 31, Accumulated December 31, Accumulated September 30, Useful Life 2016 Amortization 2016 Additions Amortization 2017 Finite live intangible assets: Customer list and tradename 5 years $ 987,500 $ (26,296 ) $ 961,204 $ — $ (176,109 ) $ 811,391 Non-compete agreements 5 years 1,199,000 (246,000 ) 953,000 — (425,850 ) 773,150 Intellectual property 10 years 880,000 — 880,000 — (66,000 ) 814,000 Total intangible assets $ 3,066,500 $ (272,296 ) $ 2,794,204 $ — $ (667,959 ) $ 2,398,541 Goodwill Indefinite $ 3,693,083 $ — $ 3,693,083 $ 129,500 $ — $ 3,822,583 We compute amortization using the straight-line method over the estimated useful lives of the intangible assets. The Company has no indefinite-lived intangible assets other than goodwill. |
Property, Plant and Equipment
Property, Plant and Equipment | 9 Months Ended |
Sep. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | NOTE 5 – Property, Plant and Equipment The Company’s property, plant and equipment were as follows: September 30, December 31, 2017 2016 Machinery and equipment $ 4,347,950 $ 4,154,305 Leasehold improvements 267,421 126,598 Accumulated depreciation (1,187,815 ) (927,909 ) 3,427,556 3,352,994 Construction in process 644,857 304,845 Total property, plant and equipment, net $ 4,072,413 $ 3,657,839 |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2017 | |
Stockholders' Equity | |
Stockholders' Equity | NOTE 6– Stockholders’ Equity Preferred Stock The Company’s articles of incorporation authorize the Company to issue up to 40,000,000 shares of $0.0001 par value, preferred shares having preferences to be determined by the board of directors for dividends, and liquidation of the Company’s assets. Of the 40,000,000 preferred shares the Company is authorized by its articles of incorporation, the Board of Directors has designated up to 3,000,000 as Series AA preferred shares. As of September 30, 2017, the Company had no shares of Preferred Stock outstanding. Common Stock As of September 30, 2017, the Company has 164,415,465, $0.0001 par value, shares of common stock (the “Common Stock”) outstanding. The Company’s articles of incorporation authorize the Company to issue up to 300,000,000 shares of the Common Stock. The holders are entitled to one vote for each share on matters submitted to a vote to shareholders, and to share pro rata in all dividends payable on common stock after payment of dividends on any preferred shares having preference in payment of dividends. Equity Incentive Program On December 18, 2014, the Company’s Board of Directors approved an Equity Incentive Program (the “Equity Incentive Program”), whereby the Company’s employees may elect to receive equity in lieu of cash for all or part of their salary compensation. During the nine months ended September 30, 2017, the Company issued the following shares of common stock in connection with financing activities: On August 10, 2017, the Company announced the closing of its rights offering, which expired on August 4, 2017, and raised aggregate gross proceeds of approximately $2.29 million, including $670,000 in cash and $1.6 million in conversion of previously issued 8% notes payable and accrued interest (see Note 8), from the sale of 28.6 million shares of common stock at a price of $0.08 per share. The Company had approximately $0.1 million of costs associated with the offering netted against the cash proceeds. The rights offering was made pursuant to a registration statement on Form S-1 (No. 333-215941) and prospectus on file with the Securities and Exchange Commission. The Company used the net proceeds for general working capital purposes. The Company also extinguished the remaining 8% promissory notes issued in December 2016 through the conversion of indebtedness into shares of its common stock at a per share price of $0.08 and cash repayment. The Company issued 2,754,500 shares for the conversion of a total of $220,360 in principal and accrued interest and repaid the remaining balance in cash in the full amount of $52,467 of principal and accrued interest. As a result of these transactions, the previously issued 8% notes payable have been extinguished in full. During the nine months ended September 30, 2017, the Company issued the following shares of common stock for compensation: On February 13, 2017, the Company issued an aggregate of 160,000 shares of common stock to two employees of the Company at a price of $0.125 per share. During the quarter ended March 31, 2017, the Company issued an aggregate of 115,503 shares of common stock to employees of the Company pursuant to the Company’s Equity Incentive Program at a price of $0.12 per share. On March 31, 2017, the Company issued an aggregate of 512,498 shares of common stock to six directors of the Company pursuant to the Company’s FY2017 Director Compensation Plan at a price of $0.12 per share. During the quarter ended June 30, 2017, the Company issued an aggregate of 195,039 shares of common stock to employees of the Company pursuant to the Company’s Equity Incentive Program at a price of $0.10 per share. On June 30, 2017, the Company issued an aggregate of 627,546 shares of common stock to six directors of the Company pursuant to the Company’s FY2017 Director Compensation Plan at a price of $0.098 per share. During the quarter ended September 30, 2017, the Company issued an aggregate of 238,448 shares of common stock to employees of the Company pursuant to the Company’s Equity Incentive Program at a price of $0.08 per share. On September 30, 2017, the Company issued an aggregate of 803,480 shares of common stock to six directors of the Company pursuant to the Company’s FY2017 Director Compensation Plan at a price of $0.077 per share. Shares of common stock issued for warrant exercise During the nine months ended September 30, 2017, the Company issued an aggregate of 4,218,750 shares of Common Stock to accredited investors in connection with the exercise of warrants at an exercise price of $0.08 per share. Performance and/or market based stock awards In January 2015, the Board of Directors approved the issuance of 940,595 restricted shares of the Company. These shares will be issued to the then members of the Board of Directors upon vesting, which will be when the market price of the Company’s common stock trades at or above $2 for a specified period. The initial value of the restricted stock grant was approximately $38,000, as adjusted for forfeitures resulting from directors who have resigned, which will be amortized over the estimated service period. The Company recorded an expense of $11,547 and $50,565 from the amortization of the unvested restricted shares for the nine months ended September 30, 2017 and 2016, respectively. The shares were valued using a Monte Carlo Simulation with a six-year life, 88.0% volatility and a risk-free interest rate of 1.79%. In February 2016, the Board of Directors approved the issuance of 3,301,358 restricted shares of the Company. These shares will be issued to the then President (1,100,453 shares) and Chief Financial Officer (2,200,905 shares) upon vesting, which will be according to the following terms: - 20% when the market price of the Company’s common stock trades at or above $0.30 for a specified period. - 30% when the market price of the Company’s common stock trades at or above $0.40 for a specified period. - 30% when the market price of the Company’s common stock trades at or above $0.50 for a specified period. - 20% when the market price of the Company’s common stock trades at or above $0.60 for a specified period. The initial value of the restricted stock grant was approximately $198,000, which was amortized over the estimated service period. The Company recorded an expense of $17,364 and $20,470 from the amortization of the unvested restricted shares for the nine months ended September 30, 2017 and 2016, respectively. The shares were valued using a Monte Carlo Simulation with a six-year life, 91.0% volatility and a risk-free interest rate of 1.34%. In December 2016, the Board of Directors modified the terms of the 1,100,453 shares award in conjunction with the resignation of the President to provide for an expiration date of December 2017. The Company revalued this award based on the new terms and determined the value of the award was approximately $18,000, which is being amortized over the estimated service period. In January 2016, the Board of Directors approved the issuance of 6,281,250 restricted common shares of the Company. These shares will be issued to the then members of the Board of Directors upon vesting, which will be when the market price of the Company’s common stock trades at or above $0.12 for a specified period or if the Company has positive EBITDA (a non GAAP measure) for one quarter in 2016. These shares were issued to the members of the Board on June 13, 2016, when the market price of the Company’s common stock traded at or above $0.12 for a 30-day volume weighted average price. The initial value of the restricted stock grant was $509,000, which has been amortized over the estimated performance period. The Company recorded the entire value as expense from the amortization of the restricted shares for the year ended December 31, 2016, including $381,586 for the nine months ended September 30, 2016. The shares were valued using a Monte Carlo Simulation with a one-year life, 106.0% volatility and a risk-free interest rate of 0.65%. In May 2016, the Board of Directors approved the issuance of 1,100,453 restricted shares of the Company. These shares will be issued to the Chief Executive Officer upon vesting, which will be according to the following terms: - 20% when the market price of the Company’s common stock trades at or above $0.30 for a specified period. - 30% when the market price of the Company’s common stock trades at or above $0.40 for a specified period. - 30% when the market price of the Company’s common stock trades at or above $0.50 for a specified period. - 20% when the market price of the Company’s common stock trades at or above $0.60 for a specified period. The initial value of the restricted stock grant was approximately $94,000, which was to be amortized over the estimated service period. In December 2016, the then Chief Executive Officer resigned from the Company; therefore, any recognized expense was reversed and the expense recognized by the Company during the year ended December 31, 2016 was $0. In December 2016, the Board of Directors modified the terms of this award in conjunction with the resignation of the then Chief Executive Officer to provide for an expiration date of December 2017. The Company revalued this award based on the new terms and determined the value of the award was approximately $18,000, which is being amortized over the estimated service period. In September 2016, the Board of Directors approved the issuance of 1,650,680 restricted common shares of the Company. These shares will be issued to the then Vice President of Sales and Marketing upon vesting, which will be according to the following terms: - 20% when the market price of the Company’s common stock trades at or above $0.30 for a specified period. - 30% when the market price of the Company’s common stock trades at or above $0.40 for a specified period. - 30% when the market price of the Company’s common stock trades at or above $0.50 for a specified period. - 20% when the market price of the Company’s common stock trades at or above $0.60 for a specified period. The initial value of the restricted stock grant was approximately $141,000, which was amortized over the estimated service period. Upon the termination of the then Vice President of Sales and Marketing on April 28, 2017, this grant was terminated and the Company reversed all previous expense and is no longer recording expense related to this award. The Company recorded income of $14,802 from the reversal of previous amortization of the unvested restricted shares for the nine months ended September 30, 2017. The shares were valued using a Monte Carlo Simulation with a 6-year life, 92.0% volatility and a risk-free interest rate of 1.35%. In December 2016, the Board of Directors approved the issuance of 6,290,000 restricted common shares of the Company. These shares will be issued to members of the Board of Directors and certain executives and employees upon vesting, which will occur when the price per share of the Company’s common stock, measured and approved based upon a 30-day trading volume weighted average price (“VWAP”), is equal to at least $0.20 per share. The initial value of the restricted stock grant was approximately $430,000, which is being amortized over the estimated service period. The Company recorded an expense of $71,818 from the amortization of the unvested restricted shares for the nine months ended September 30, 2017. The shares were valued using a Monte Carlo Simulation with a 6-year life, 98.0% volatility and a risk- free interest rate of 2.00%. In June 2017, the Board of Directors approved the issuance of 1,000,000 restricted common shares of the Company. The initial value of the restricted stock grant was $72,099, which is being amortized over the estimated service period. These shares will be issued to certain executives upon the Company meeting the following bench marks: 50% will vest when the price per share of the Company’s common stock, based upon a 30-day trading VWAP, is equal to at least $0.20 per share and 50% will vest when the price per share of the Company’s common stock, measured and approved based upon a 30-day trading VWAP, is equal to at least $0.35 per share. The current period expense was $3,004 for the quarter ended September 30, 2017. During the nine months ended September 30, 2017, the Board of Directors approved the issuance of 2,200,000 restricted common shares of the Company. The initial value of the restricted stock grant was $150,258, which is being amortized over the estimated service period. These shares will be issued to certain executives and employees upon vesting, which will occur when the price per share of the Company’s common stock, measured and approved based upon a 30-day trading VWAP, is equal to at least $0.20 per share. The current period expense was insignificant. A summary of the Company’s restricted stock awards is presented below: Number of Shares Weighted- Average Grant-Date Fair Value per Share Unvested at January 1, 2017 12,691,084 $ 0.08 Restricted stock granted 3,200,000 0.08 Restricted stock vested — — Restricted stock forfeited (1,940,680 ) 0.08 Unvested at September 30, 2017 13,950,404 $ 0.08 Options and warrants During the nine months ended September 30, 2017, the Company issued 4,218,750 shares of common stock in connection with the exercise of stock warrants at an exercise price of $0.08 per share for total proceeds of $337,500. During the nine months ended September 30, 2016, the Company did not have any issuances or exercises of stock warrants. The Company recognized $7,500 of expense related to the vesting of outstanding options during the nine months ended September 30, 2017. |
Segments
Segments | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Segments | NOTE 7 – Segments Prior to the December 2016 acquisitions of WEBA, RS&T and the DOW Assets and through December 31, 2016, the Company operated as one segment. Effective January 1, 2107, we have two segments, Consumer and Industrial. Consumer’s principal business activity is the processing of waste glycol into high-quality recycled glycol products, specifically automotive antifreeze, and related specialty blended antifreeze, which we sell in the automotive and industrial end markets. We operate six processing and distribution centers located in the eastern region of the United States. Industrial’s principal business activity consists of two divisions: WEBA and RS&T. WEBA develops, manufactures and markets additive packages for the antifreeze/coolant, gas patch coolants and heat transfer industries throughout North America, and RS&T, operates a 14-20 million gallons per year ASTM E1177 EG-1 glycol re-distillation plant in West Virginia that The Company uses loss before provision for income taxes as its measure of profit/loss for segment reporting purposes. Loss before provision for income taxes by operating segment includes all operating items relating to the businesses, including inter segment transactions. Items that primarily relate to the Company as a whole are assigned to Corporate. Inter segment eliminations present the adjustments for inter segment transactions to reconcile segment information to the Company’s consolidated financial statements. Segment information, and the reconciliation to the Company’s consolidated financial statements, for the three months ended September 30, 2017, is presented below: Consumer Industrial Inter Segment Eliminations Corporate Total Sales, net $ 1,455,849 $ 2,076,852 $ (248,031 ) $ $ 3,284,670 Cost of goods sold 1,307,099 1,817,509 (248,031 ) 2,876,577 Gross profit 148,750 259,343 — 408,093 Total operating expenses 713,885 1,144,255 — 305,214 2,163,354 Loss from operations (565,135 ) (884,912 ) — (305,214 ) (1,755,261 ) Total other expenses (152,171 ) (49,998 ) — (98,463 ) (300,632 ) Loss before provision for income taxes $ (717,306 ) $ (934,910 ) $ — $ (403,677 ) $ (2,055,893 ) Segment information, and the reconciliation to the Company’s consolidated financial statements, for the nine months ended September 30, 2017, is presented below: Consumer Industrial Inter Segment Eliminations Corporate Total Sales, net $ 4,701,752 $ 4,626,034 $ (834,698 ) $ — $ 8,493,088 Cost of goods sold 4,092,801 4,210,303 (834,698 ) — 7,468,406 Gross profit 608,951 415,731 — 1,024,682 Total operating expenses 1,722,774 1,723,606 — 923,143 4,369,523 Loss from operations (1,113,823 ) (1,307,875 ) — (923,143 ) (3,344,841 ) Total other expenses (163,390 ) (80,921 ) — (475,924 ) (720,235 ) Loss before provision for income taxes $ (1,277,213 ) $ (1,388,796 ) $ — $ (1,399,067 ) $ (4,065,076 ) |
Notes Payable
Notes Payable | 9 Months Ended |
Sep. 30, 2017 | |
Notes Payable [Abstract] | |
Notes Payable | NOTE 8 – Notes Payable Notes payable consist of the following: September 30, 2017 December 31, 2016 2017 Secured Note $ 110,822 $ — 2016 Secured Notes 326,535 396,562 2016 5% Related Party Unsecured Notes — 1,000,000 2016 8% Related Party Unsecured Notes — 1,458,256 2016 WEBA Seller Notes 2,650,000 2,650,000 Total notes payable 3,087,357 5,504,818 Less current portion (108,575 ) (2,541,178 ) Long-term portion of notes payable $ 2,978,782 $ 2,963,640 2017 Secured Note In July 2017, the Company entered into a secured promissory note with PACCAR Financial (the “2017 Secured Note”). The 2017 Secured Note is collateralized by vehicles. The key terms of the 2017 Secured Note includes: (i) an original principal balance of $116,655, (ii) interest rate of 7.95%, and (iii) term of 5 years. 2016 Secured Notes In January and April 2016, the Company entered into a secured promissory note with Ascentium Capital. In April 2016, the Company entered into secured promissory notes with Ascentium Capital. In July and September 2016, the Company entered into a secured promissory note with PACCAR Financial. In September 2016, the Company entered into a secured promissory note with PACCAR Financial. In November 2016, the Company entered into secured promissory notes with MHC Financial Services, Inc. (collectively, the “2016 Secured Notes”). The key terms of the 2016 Secured Notes include: (i) an aggregate principal balance of $437,000, (ii) interest rates ranging from 5.8% to 9.0%, and (iii) terms of 4-5 years. The 2016 Secured Notes are collateralized by vehicles and equipment. 2016 Related Party Unsecured Notes 5% Notes Issuance On December 27, 2016, the Company entered into a subscription agreement (the “5% Notes Subscription Agreement”) by and between the Company and various funds managed by Wynnefield Capital. Pursuant to the 5% Notes Subscription Agreement, the Company offered and issued $1,000,000 in principal amount of 5% Senior Unsecured Promissory Notes (the “5% Notes”). The Company received $1,000,000 in gross proceeds from the offering. The 5% Notes were scheduled to mature on May 31, 2017 (the “5% Note Maturity Date”). The 5% Notes bore interest at a rate of 5% per annum due on the 5% Note Maturity Date or as otherwise specified by the 5% Notes. On April 17, 2017, the Company repaid the 5% Notes in full. 8% Notes Issuance On December 27, 2016, the Company entered into subscription agreements (the “8% Notes Subscription Agreements”) by and between the Company and certain accredited investors. Pursuant to the 8% Notes Subscription Agreements, the Company offered and issued: (i) $1,810,000 in principal amount of 8% Senior Unsecured Promissory Notes (the “8% Notes”); and (ii) warrants (the “Warrants”) to purchase up to 5,656,250 shares of common stock of the Company (the “Common Stock”). The Company received $1,810,000 in gross proceeds from the offering of which $1,760,000 was received in 2016 and $50,000 was accrued as an other current asset at December 31, 2016 and received in 2017. The 8% Notes were scheduled to mature on December 27, 2017 (the “8% Note Maturity Date”). The 8% Notes bore interest at a rate of 8% per annum due on the 8% Note Maturity Date or as otherwise specified by the 8% Note. The Company also incurred $26,872 of issuance costs, which were recorded as a debt discount and were amortized as interest expense through the 8% Note Maturity Date. The Warrants are exercisable for an aggregate of 5,656,250 shares of Common Stock, beginning on December 27, 2016, and will be exercisable for a period of three years. The exercise price with respect to the warrants is $0.08 per share. The exercise price and the amount of shares of common stock issuable upon exercise of the warrants are subject to adjustment upon certain events, such as stock splits, combinations, dividends, distributions, reclassifications, mergers or other similar issuances. On August 4, 2017, the Company redeemed $1,550,000 of the 8% Notes through the issuance of common shares of the Company’s stock through the rights offering that closed on August 4, 2017. On August 10, 2017, the Company repaid the remaining $260,000 of 8% Notes through a conversion of debt and the of issuance of common shares of the Company’s stock and cash repayment. See Note 6 for additional information. The Company allocated the proceeds received to the 8% Notes and the warrants on a relative fair value basis at the time of issuance. The total debt discount was amortized over the life of the 8% Notes to interest expense. Amortization expense during the nine months ended September 30, 2017 was $205,180. On the date the debt was converted into common stock or repaid, the remaining unamortized debt discount was expensed and recorded as a loss on debt extinguishment. The Company recorded $146,564 of loss on debt extinguishment during the three and nine months ended September 30, 2017. WEBA Seller Notes In connection with the WEBA acquisition (see Note 4) the Company issued $2.65 million in 8% promissory notes (“Seller Notes”). The Seller Notes mature on December 27, 2021. The Seller Notes bear interest at a rate of 8% per annum payable on a quarterly basis in arrears. The Seller Notes contain standard default provisions, including: (i) failure to repay the Seller Note when it is due at maturity; (ii) failure to pay any interest payment when due; (iii) failure to deliver financial statements on time; and (iv) other standard events of default. |
Capital Lease
Capital Lease | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Capital Lease | NOTE 9 – Capital Lease On April 13, 2017, the Company closed an amended sale-leaseback transaction with NFS Leasing, Inc. (“NFS”), wherein the Company sold $1,700,000 of certain operational equipment used in the Company’s glycol recovery and recycling operations (the “Equipment”) pursuant to a bill of sale and simultaneously entered into a master equipment lease agreement, as modified (the “Lease Agreement”) with NFS for the lease of the Equipment by the Company. Pursuant to the Lease Agreement, the lease term (the “Lease Term”) is 48 months commencing on May 1, 2017. There was no gain or loss associated with the sale-leaseback. During the Lease Term, the Company is obligated to make monthly rental payments of $44,720 to NFS. The agreements are effective as of March 31, 2017. At the conclusion of the Lease Term, the Company may repurchase the Equipment from NFS for $1. The Company has accounted for this transaction as a capital lease. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 10 – Related Party Transactions Vice President of U.S. Operations The Vice President of U.S. Operations is the sole owner of BKB Holdings, LLC, which is the landlord of the property where GlyEco Acquisition Corp #5’s processing center is located. The Vice President of U.S. Operations also is the sole owner of Renew Resources, LLC, which provides services to the Company as a vendor. 2017 2016 Beginning Balance as of January 1, $ 5,123 $ 2,791 Monies owed to related party for services performed 94,441 73,749 Monies paid (99,564 ) (75,667 ) Ending Balance as of September 30, payable (receivable) $ — $ 873 5% Notes On December 27, 2016, we entered into debt agreements for an aggregate principal amount of $1,000,000 from the offering and issuance of 5% Notes to Wynnefield Partners I, Wynnefield Partners and Wynnefield Offshore, all of which are under the management of Wynnefield Capital, Inc. (“Wynnefield Capital”), an affiliate of the Company. The Company’s Chairman of the Board, Dwight Mamanteo, is a portfolio manager of Wynnefield Capital. See Note 8 for additional information. 8% Notes On December 27, 2016, we entered into debt agreements for an aggregate principal amount of $1,810,000 from the offering and issuance of 8% Notes and warrants to purchase up to 5,656,250 shares of our common stock. The 8% Notes and warrants were sold to certain officers and directors and their immediate families of the Company as well as Wynnefield Capital, an affiliate of the Company. See Note 8 for additional information. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 11 – Commitments and Contingencies Litigation The Company may be party to legal proceedings in the ordinary course of business. The Company believes that the nature of these proceedings (collection actions, etc.) are typical for a Company of our size and scope of operations. Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. Below is an overview of a recently resolved legal proceeding, one pending legal proceeding, and one outstanding alleged claim. On January 8, 2016, Acquisition Sub. #4 filed a civil action against Onyxx Group LLC in the Circuit Court of Hillsborough County, Florida. This civil action relates to an outstanding balance due from Onyxx Group LLC to Acquisition Sub. #4. In September 2016, the Company received a favorable judgment regarding this civil action in the amount of $95,000. On March 22, 2016, Acquisition Sub. #4 filed a civil action against Encore Petroleum, LLC in the Superior Court of New Jersey Law Division, Hudson County. This civil action relates to an outstanding balance due from Encore Petroleum to Acquisition Sub. #4. In August 2017, the Company reached a settlement with Encore Petroleum. The Company is also aware of one matter that involves an alleged claim against the Company, and it is at least reasonably possible that the claim will be pursued. The claim involves contracts with our former director and his related entities that provided services and was our landlord for the Company’s former processing facility in New Jersey. In this matter, the landlord of the Company’s formerly leased property claims back rent is due for property used by the Company outside of the scope of its lease agreement. During the quarter ended March 31, 2015, the former landlord denied the Company access to the New Jersey facility and prepared an eviction notice. The Company negotiated a payment in the amount of $250,000 to regain access to the facility, and reached an accord to negotiate with the landlord to resolve the outstanding issues by May 31, 2015. On December 28, 2015, the Company ultimately approved the termination of the lease agreements related to the New Jersey facility, thereby ceasing all operations at that particular facility. This termination was prompted by the former landlord’s demand for payment of approximately $2.3 million to maintain access to the facility. In September 2016, the Company reached an agreement with the landlord. The agreement required the Company to resolve certain environmental issues regarding the former processing facility and make certain payments to the landlord. The Company, the landlord and their related entities also agreed to a full and final settlement of existing and possible future claims between the parties. As of November 14, 2017, the Company believes it has addressed the environmental issues by removing and disposing of the waste from the facility and cleaning the storage tanks. Additionally, as of November 14, 2017, the Company has paid in full the agreed upon $335,000 payment to the landlord. Environmental Matters We are subject to federal, state, and local laws, regulations and ordinances relating to the protection of the environment, including those governing discharges to air and water, handling and disposal practices for solid and hazardous wastes, and occupational health and safety. It is management’s opinion that the Company is not currently exposed to significant environmental remediation liabilities or asset retirement obligations. However, if a release of hazardous substances occurs, or is found on one of our properties from prior activity, we may be subject to liability arising out of such conditions and the amount of such liability could be material. The Company accrues for potential environmental liabilities in a manner consistent with accounting principles generally accepted in the United States; that is, when it is probable a liability has been incurred and the amount of the liability is reasonably estimable. The Company reviews the status of its environmental sites on a yearly basis and adjusts its reserves accordingly. In December 2016, the Company completed an acquisition of certain glycol distillation assets from Union Carbide Corporation at Institute, West Virginia. In order to comply with West Virginia regulations enacted in 2017, the Company has elected to accrue $780,000 for tank remediation. The amount of the accrual is based on various assumptions and estimates and will be periodically reevaluated in light of a variety of future events and contingencies. For example, subsequent to the completion of the tank remediation we expect to have feedstock, which, depending on pricing at the time, may have a value of up to $300,000. Additionally, the potential liabilities accrued by the Company do not take into consideration possible recoveries of future insurance proceeds. We maintain insurance coverage for unintentional acts that result in environmental remediation liabilities up to $1 million per occurrence; $2 million in the aggregate, with an umbrella liability policy that doubles the coverage. These policies do, however, take into account the likely share other parties will bear at remediation sites. We are unable to estimate the ultimate cost of remediation due to a number of unknown factors, including, among others potential liability due to the number of other parties that may be involved, the complexity of determining the relative liability among those parties, the uncertainty as to the nature and scope of the investigations and remediation to be conducted, the uncertainty in the application of law and risk assessment, the various choices and costs associated with diverse technologies that may be used in corrective actions at the sites, and the often quite lengthy periods over which eventual remediation may occur. Our management believes that the provision that we have established is reasonable. Our management is exploring and considering a number of alternatives to mitigate the potential impact of this remediation on the Company. The Company is aware of one environmental remediation issue related to our former leased property in New Jersey, which is currently subject to a remediation stemming from the sale of property by the previous owner in 2008 to the current landlord. To Management’s knowledge, the former landlord has engaged a licensed site remediation professional and had assumed responsibility for this remediation. In our management’s opinion the liability for this remediation is the responsibility of the former landlord. However, the former landlord has disputed this position and it is an open issue subject to negotiation. Currently, we have no knowledge as to the scope of the landlord’s former remediation obligation. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 12 – Subsequent Events Recent Stock Issuances Since October 1, 2017, the Company has issued an aggregate of 60,792 shares of common stock pursuant to the Company’s Equity Incentive Program. |
Basis of Presentation and Sum19
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States (“GAAP”), and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). In the opinion of management, the accompanying unaudited interim condensed consolidated financial statements reflect all adjustments (consisting of normal recurring accruals) necessary for a fair presentation on an interim basis. The operating results for the nine months ended September 30, 2017 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2017. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted; however, management believes that the disclosures are adequate to make the information presented not misleading. This report should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2016, including the Company’s audited consolidated financial statements and related notes included therein. |
Principles of Consolidation | Principles of Consolidation These consolidated financial statements include the accounts of GlyEco, Inc., and its wholly-owned subsidiaries. All significant intercompany transactions have been eliminated as a result of consolidation. |
Noncontrolling Interests | Noncontrolling Interests The Company recognizes noncontrolling interests as equity in the consolidated financial statements separate from the parent company’s equity. Noncontrolling interests’ partners have less than 50% share of voting rights at any one of the subsidiary level companies. The amount of net income (loss) attributable to noncontrolling interests is included in consolidated net income (loss) on the face of the consolidated statements of operations. Changes in a parent entity’s ownership interest in a subsidiary that do not result in deconsolidation are treated as equity transactions if the parent entity retains its controlling financial interest. The Company recognizes a gain or loss in net income (loss) when a subsidiary is deconsolidated. Such gain or loss is measured using the fair value of the noncontrolling equity investment on the deconsolidation date. Additionally, operating losses are allocated to noncontrolling interests even when such allocation creates a deficit balance for the noncontrolling interest partner. The Company provides either in the consolidated statements of stockholders’ equity, if presented, or in the notes to consolidated financial statements, a reconciliation at the beginning and the end of the period of the carrying amount of total equity (net assets), equity (net assets) attributable to the parent, and equity (net assets) attributable to the noncontrolling interest that separately discloses: (1) Net income or loss (2) Transactions with owners acting in their capacity as owners, showing separately contributions from and distributions to owners. (3) Each component of other comprehensive income or loss |
Operating Segments | Operating Segments Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated on a regular basis by the chief operating decision maker, or decision-making group, in deciding how to allocate resources to an individual segment and in assessing the performance of the segment. Operating segments may be aggregated into a single operating segment if the segments have similar economic characteristics, among other criteria. Prior to the December 2016 acquisitions of WEBA, RS&T and the DOW Assets and through December 31, 2016, the Company operated as one segment. As of January 1, 2017, we have two operating segments, Consumer and Industrial. (See Note 7) |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported revenues and expenses during the reporting periods. Because of the use of estimates inherent within the financial reporting process, actual results may differ significantly from those estimates. Significant estimates include, but are not limited to, items such as the allowance for doubtful accounts, the value of share-based compensation and warrants, the allocation of the purchase price in the Company’s acquisitions, the recoverability of property, plant and equipment, goodwill, other intangibles and their estimated useful lives, contingent liabilities, and environmental and asset retirement obligations. Due to the uncertainties inherent in the formulation of accounting estimates, it is reasonable to expect that these estimates could be materially revised within the next year. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue when (1) delivery of product has occurred or services have been rendered, (2) there is persuasive evidence of a sale arrangement, (3) selling prices are fixed or determinable, and (4) collectability from the customer (individual customers and distributors) is reasonably assured. Revenue consists primarily of revenue generated from the sale of the Company’s products. This generally occurs either when the Company’s products are shipped from its facility or delivered to the customer when title has passed. Revenue is recorded net of estimated cash discounts. The Company estimates and accrues an allowance for sales returns at the time the product is sold. To date, sales returns have not been material. Shipping costs passed to the customer are included in net sales. |
Costs | Costs Cost of goods sold includes all direct material and labor costs and those indirect costs of bringing raw materials to sale condition, including depreciation of equipment used in manufacturing and shipping and handling costs. Selling, general, and administrative costs are charged to operating expenses as incurred. Research and development costs are expensed as incurred, are included in operating expenses and were insignificant in 2017 and 2016. Advertising costs are expensed as incurred. |
Accounts Receivable | Accounts Receivable Accounts receivable are recognized and carried at the original invoice amount less an allowance for expected uncollectible amounts. Inherent in the assessment of the allowance for doubtful accounts are certain judgments and estimates including, among others, the customer’s willingness or ability to pay, the Company’s compliance with customer invoicing requirements, the effect of general economic conditions and the ongoing relationship with the customer. Accounts with outstanding balances longer than the payment terms are considered past due. We do not charge interest on past due balances. The Company writes off trade receivables when all reasonable collection efforts have been exhausted. Bad debt expense is reflected as a component of general and administrative expenses in the consolidated statements of operations. The allowance for doubtful accounts totaled $133,126 and $80,207 as of September 30, 2017 and December 31, 2016, respectively. |
Inventories | Inventories Inventories are reported at the lower of cost or net realizable value. The cost of raw materials, including feedstocks and additives, is determined on an average unit cost of the units in a production lot. Work-in-process represents labor, material and overhead costs associated with the manufacturing costs at an average unit cost of the units in the production lot. Finished goods represents work-in-process items with additive costs added. The Company periodically reviews its inventories for obsolete or unsalable items and adjusts its carrying value to reflect estimated realizable values. |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment is stated at cost. The Company provides for depreciation on the cost of its equipment using the straight-line method over an estimated useful life, ranging from three to twenty years, and zero salvage value. Expenditures for repairs and maintenance are charged to expense as incurred. For purposes of computing depreciation, the useful lives of property, plant and equipment are as follows: Leasehold improvements Lesser of the remaining lease term or 5 years Machinery and equipment 3-15 years |
Business Combinations | Business Combinations The Company accounts for business combinations by recognizing the assets acquired, liabilities assumed, contractual contingencies, and contingent consideration at their fair values on the acquisition date. The purchase price allocation process requires management to make significant estimates and assumptions, especially with respect to intangible assets, estimated contingent consideration payments and pre-acquisition contingencies. Examples of critical estimates in valuing certain of the intangible assets the Company has acquired or may acquire in the future include but are not limited to: ● future expected cash flows from product sales, other customer contracts, and ● discount rates utilized in valuation estimates. Unanticipated events and circumstances may occur that may affect the accuracy or validity of such assumptions, estimates or actual results. Additionally, any change in the fair value of the acquisition-related contingent consideration subsequent to the acquisition date, including changes from events after the acquisition date, such as changes in our estimates of relevant revenue or other targets, will be recognized in earnings in the period of the estimated fair value change. A change in fair value of the acquisition-related contingent consideration or the occurrence of events that cause results to differ from our estimates or assumptions could have a material effect on the consolidated financial position, statements of operations or cash flows in the period of the change in the estimate. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Intangible assets that we acquire are recognized separately if they arise from contractual or other legal rights or if they are separable and are recorded at fair value less accumulated amortization. We analyze intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. We review the amortization method and period at least at each balance sheet date. The effects of any revision are recorded to operations when the change arises. We recognize impairment when the estimated undiscounted cash flow generated by those assets is less than the carrying amounts of such assets. The amount of impairment is the excess of the carrying amount over the fair value of such assets. The Company’s management believes there is no impairment of long-lived assets as of September 30, 2017. However, market conditions could change or demand for the Company’s products could decrease, which could result in future impairment of long-lived assets Goodwill is recorded as the excess of (i) the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition date fair value of any previous equity interest in the acquired over the (ii) fair value of the net identifiable assets acquired. We do not amortize goodwill; however, we annually, or whenever there is an indication that goodwill may be impaired, evaluate qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step quantitative goodwill impairment test. The Company measures the carrying amount of the asset against the estimated undiscounted future cash flows associated with it. Should the sum of the expected future net cash flows be less than the carrying value of the asset being evaluated, an impairment loss would be recognized. The impairment loss would be calculated as the amount by which the carrying value of the assets exceeds fair value. Any future increases in fair value would not result in an adjustment to the impairment loss that may be recorded in our consolidated financial statements. Our test of goodwill impairment includes assessing qualitative factors and the use of judgment in evaluating economic conditions, industry and market conditions, cost factors, and entity-specific events, as well as overall financial performance. Based on our analysis, no impairment loss of goodwill was recorded in 2017 and 2016 as the carrying amount of the reporting unit’s assets did not exceed the estimated fair value determined. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Property, plant and equipment, purchased intangibles subject to amortization and patents and trademarks, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of would be separately presented in the consolidated balance sheet and reported at the lower of the carrying amount or fair value less costs to sell, and are no longer depreciated. The assets and liabilities of a disposal group classified as held-for-sale would be presented separately in the appropriate asset and liability sections of the consolidated balance sheet, if material. The three levels of inputs that may be used to measure fair value are as follows: ● Level 1 ● Level 2 ● Level 3 Cash, restricted cash, accounts receivable, accounts payable and accrued expenses, amounts due to related parties and current portion of capital lease obligations and notes payable are reflected in the consolidated balance sheets at their estimated fair values primarily due to their short-term nature. As to long-term capital lease obligations and notes payable, carrying values approximate fair value since the estimated fair values are based on borrowing rates currently available to the Company for loans with similar terms and maturities. |
Deferred Financing Costs, Debt Discount and Detachable Debt-Related Warrants | Deferred Financing Costs, Debt Discount and Detachable Debt-Related Warrants Costs incurred in connection with debt are deferred and recorded as a reduction to the debt balance in the accompanying condensed consolidated balance sheets. The Company amortizes debt issuance costs over the expected term of the related debt using the effective interest method. Debt discounts related to the relative fair value of warrants issued in conjunction with the debt are also recorded as a reduction to the debt balance and amortized over the expected term of the debt to interest expense using the effective interest method. |
Net Loss Per Share Calculation | Net Loss Per Share Calculation The basic net loss per common share is computed by dividing the net loss available to common shareholders by the weighted average number of shares outstanding during a period. Diluted loss per common share is computed by dividing the net loss available to common shareholders by the weighted average number of common shares outstanding plus potentially dilutive securities. The Company’s potentially dilutive securities outstanding are not shown in a diluted net loss per share calculation because their effect in both 2017 and 2016 would be anti-dilutive. At September 30, 2017, these potentially dilutive securities included warrants of 5,648,124 and stock options of 4,872,621 for a total of 10,520,745. At September 30, 2016, these potentially dilutive securities included warrants of 8,266,137 and stock options of 7,935,093 for a total of 16,201,230. |
Income Taxes | Income Taxes The Company accounts for its income taxes in accordance with Financial Accounting Standard Board (“FASB”) Accounting Standards Codification (“ASC”) 740, “Income Taxes,” which requires recognition of deferred tax assets and liabilities for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credit carry forwards. Deferred 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 operations in the period that includes the enactment date. An allowance for the deferred tax asset is established if it is more likely than not that the asset will not be realized. |
Share-based Compensation | Share-based Compensation All share-based payments to employees and non-employee directors, including grants of employee stock options, are expensed based on their estimated fair values at the grant date, in accordance with ASC 718. Compensation expense for share-based payments to employees and directors is recorded over the vesting period using the estimated fair value on the date of grant, as calculated by the Company using the Black-Scholes-Merton (“BSM”) option-pricing model or the Monte Carlo Simulation. For awards with only service conditions that have graded vesting schedules, compensation cost is recorded on a straight-line basis over the requisite service period for the entire award, unless vesting occurs earlier. For awards with market conditions, compensation cost is recorded on the accelerated attribution method over the derived service period. Non-employee share-based compensation is accounted for based on the fair value of the related stock or options, using the BSM, or the fair value of the goods or services on the measurement date, whichever is more readily determinable. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements There have been no recent accounting pronouncements or changes in accounting pronouncements that are of significance, or potential significance to the Company, except as discussed below. In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09”). This updated guidance supersedes the current revenue recognition guidance, including industry-specific guidance. The updated guidance introduces a five-step model to achieve its core principal of the entity recognizing revenue to depict the transfer of goods or services to customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The updated guidance is effective for interim and annual periods beginning after December 15, 2016, and early adoption is not permitted. In July 2015, the FASB decided to delay the effective date of ASU 2014-09 until December 15, 2017. The FASB also agreed to allow entities to choose to adopt the standard as of the original effective date. The Company has not yet selected a transition method and is currently assessing the impact the adoption of ASU 2014-09 will have on its condensed consolidated financial statements and disclosures. In February 2016, the FASB issued ASU 2016-02, “Leases”, which requires the lease rights and obligations arising from lease contracts, including existing and new arrangements, to be recognized as assets and liabilities on the balance sheet. ASU 2016-02 is effective for reporting periods beginning after December 15, 2018 with early adoption permitted. While the Company is still evaluating ASU 2016-02, the Company expects the adoption of ASU 2016-02 to have a material effect on the Company’s consolidated financial condition due to the recognition of the lease rights and obligations as assets and liabilities. The Company is currently assessing the impact of the adoption of ASU 2016-02 will have on its condensed consolidated financial statements and disclosures . In January 2017, the FASB, issued ASU No. 2017-04, “Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment” which simplifies the accounting for goodwill impairment by eliminating Step 2 of the current goodwill impairment test. Goodwill impairment will now be the amount by which the reporting unit’s carrying value exceeds its fair value, limited to the carrying value of the goodwill. ASU 2017-04 is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted for any impairment tests performed after January 1, 2017. The Company has not yet decided if it will early adopt the provisions in this ASU for its annual goodwill impairment test during 2017. |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | The Company’s total inventories were as follows: September 30, December 31, 2017 2016 Raw materials $ 514,129 $ 221,088 Work in process 23,903 172,142 Finished goods 367,265 251,292 Total inventories $ 905,297 $ 644,522 |
Acquisitions, Goodwill and Ot21
Acquisitions, Goodwill and Other Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Business Combinations [Abstract] | |
Schedule acquisition date fair value | The total acquisition date fair value of the consideration transferred and to be transferred is estimated at approximately $5.1 million, as follows: Cash payment to the WEBA Sellers at closing $ 150,000 Common stock issuance to the WEBA Sellers 562,500 Promissory notes to the WEBA Sellers 2,650,000 Contingent cash consideration to the WEBA Sellers 1,745,023 Total acquisition date fair value $ 5,107,523 |
Summary of estimated fair values of assets acquired and liabilities assumed | The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date. Cash $ 172,950 Accounts receivable 342,151 Loan receivable from RS&T 500,000 Property and equipment 8,720 Customer list 470,000 Intellectual property 880,000 Trade name 390,000 Non complete agreement 835,000 Total identifiable assets acquired 3,598,821 Accounts payable and accrued expenses 190,527 Deferred tax liability 1,030,000 Total liabilities assumed 1,220,527 Total identifiable assets less liabilities assumed 2,378,294 Goodwill 2,729,229 Net assets acquired $ 5,107,523 |
Summary of Pro Forma Financial Information | The unaudited pro forma results presented include amortization charges for intangible assets and eliminations of intercompany transactions. For the For the Three Months Ended Nine Months Ended September 30, 2016 September 30, 2016 Total revenues $ 1,933,311 $ 5,711,266 Net loss $ (839,801 ) $ (2,773,438 ) |
Schedule of intangible assets | The components of goodwill and other intangible assets related to the WEBA SPA, along with various other business combinations are as follows: Gross Balance at Net Balance at Net Balance at Estimated December 31, Accumulated December 31, Accumulated September 30, Useful Life 2016 Amortization 2016 Additions Amortization 2017 Finite live intangible assets: Customer list and tradename 5 years $ 987,500 $ (26,296 ) $ 961,204 $ — $ (176,109 ) $ 811,391 Non-compete agreements 5 years 1,199,000 (246,000 ) 953,000 — (425,850 ) 773,150 Intellectual property 10 years 880,000 — 880,000 — (66,000 ) 814,000 Total intangible assets $ 3,066,500 $ (272,296 ) $ 2,794,204 $ — $ (667,959 ) $ 2,398,541 Goodwill Indefinite $ 3,693,083 $ — $ 3,693,083 $ 129,500 $ — $ 3,822,583 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property, plant and equipment | The Company’s property, plant and equipment were as follows: September 30, December 31, 2017 2016 Machinery and equipment $ 4,347,950 $ 4,154,305 Leasehold improvements 267,421 126,598 Accumulated depreciation (1,187,815 ) (927,909 ) 3,427,556 3,352,994 Construction in process 644,857 304,845 Total property, plant and equipment, net $ 4,072,413 $ 3,657,839 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Stockholders' Equity | |
Summary of restricted stock awards | A summary of the Company’s restricted stock awards is presented below: Number of Shares Weighted- Average Grant-Date Fair Value per Share Unvested at January 1, 2017 12,691,084 $ 0.08 Restricted stock granted 3,200,000 0.08 Restricted stock vested — — Restricted stock forfeited (1,940,680 ) 0.08 Unvested at September 30, 2017 13,950,404 $ 0.08 |
Segments (Tables)
Segments (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | Segment information, and the reconciliation to the Company’s consolidated financial statements, for the three months ended September 30, 2017, is presented below: Consumer Industrial Inter Segment Eliminations Corporate Total Sales, net $ 1,455,849 $ 2,076,852 $ (248,031 ) $ $ 3,284,670 Cost of goods sold 1,307,099 1,817,509 (248,031 ) 2,876,577 Gross profit 148,750 259,343 — 408,093 Total operating expenses 713,885 1,144,255 — 305,214 2,163,354 Loss from operations (565,135 ) (884,912 ) — (305,214 ) (1,755,261 ) Total other expenses (152,171 ) (49,998 ) — (98,463 ) (300,632 ) Loss before provision for income taxes $ (717,306 ) $ (934,910 ) $ — $ (403,677 ) $ (2,055,893 ) Segment information, and the reconciliation to the Company’s consolidated financial statements, for the nine months ended September 30, 2017, is presented below: Consumer Industrial Inter Segment Eliminations Corporate Total Sales, net $ 4,701,752 $ 4,626,034 $ (834,698 ) $ — $ 8,493,088 Cost of goods sold 4,092,801 4,210,303 (834,698 ) — 7,468,406 Gross profit 608,951 415,731 — 1,024,682 Total operating expenses 1,722,774 1,723,606 — 923,143 4,369,523 Loss from operations (1,113,823 ) (1,307,875 ) — (923,143 ) (3,344,841 ) Total other expenses (163,390 ) (80,921 ) — (475,924 ) (720,235 ) Loss before provision for income taxes $ (1,277,213 ) $ (1,388,796 ) $ — $ (1,399,067 ) $ (4,065,076 ) |
Notes Payable (Tables)
Notes Payable (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Notes Payable [Abstract] | |
Schedule of notes payable | Notes payable consist of the following: September 30, 2017 December 31, 2016 2017 Secured Note $ 110,822 $ — 2016 Secured Notes 326,535 396,562 2016 5% Related Party Unsecured Notes — 1,000,000 2016 8% Related Party Unsecured Notes — 1,458,256 2016 WEBA Seller Notes 2,650,000 2,650,000 Total notes payable 3,087,357 5,504,818 Less current portion (108,575 ) (2,541,178 ) Long-term portion of notes payable $ 2,978,782 $ 2,963,640 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Vice President of U.S. Operations [Member] | |
Related Party Transaction [Line Items] | |
Schedule of related party transations | The Vice President of U.S. Operations also is the sole owner of Renew Resources, LLC, which provides services to the Company as a vendor. 2017 2016 Beginning Balance as of January 1, $ 5,123 $ 2,791 Monies owed to related party for services performed 94,441 73,749 Monies paid (99,564 ) (75,667 ) Ending Balance as of September 30, payable (receivable) $ — $ 873 |
Basis of Presentation and Sum27
Basis of Presentation and Summary of Significant Accounting Policies (Details) | 9 Months Ended |
Sep. 30, 2017 | |
Machinery And Equipment [Member] | Minimum [Member] | |
Useful life | 3 years |
Machinery And Equipment [Member] | Maximum [Member] | |
Useful life | 15 years |
Leasehold improvements [Member] | |
Useful life | 5 years |
Descripion of useful lives | Lesser of the remaining lease term or 5 years |
Basis of Presentation and Sum28
Basis of Presentation and Summary of Significant Accounting Policies (Details Narrative) | 9 Months Ended | ||
Sep. 30, 2017USD ($)Numbershares | Sep. 30, 2016shares | Dec. 31, 2016USD ($) | |
Number of operating segement | Number | 2 | ||
Allowance for doubtful accounts | $ | $ 133,126 | $ 80,207 | |
Number of potentially dilutive securities | 10,520,745 | 16,201,230 | |
Salvage value of property, plant and equipment | $ | $ 0 | ||
Warrant [Member] | |||
Number of potentially dilutive securities | 5,648,124 | 8,266,137 | |
Employee Stock Option [Member] | |||
Number of potentially dilutive securities | 4,872,621 | 7,935,093 |
Inventories (Details)
Inventories (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 514,129 | $ 221,088 |
Work in process | 23,903 | 172,142 |
Finished goods | 367,265 | 251,292 |
Total inventories | $ 905,297 | $ 644,522 |
Acquisitions, Goodwill and Ot30
Acquisitions, Goodwill and Other Intangible Assets (Details) - WEBA [Member] | Dec. 27, 2016USD ($) |
Cash payment to the WEBA Sellers at closing | $ 150,000 |
Common stock issuance to the WEBA Sellers | 562,500 |
Promissory notes to the WEBA Sellers | 2,650,000 |
Contingent cash consideration to the WEBA Sellers | 1,745,023 |
Total acquisition date fair value | $ 5,107,523 |
Acquisitions, Goodwill and Ot31
Acquisitions, Goodwill and Other Intangible Assets (Details 1) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 | Dec. 27, 2016 | Dec. 31, 2015 |
Goodwill | $ 3,822,583 | $ 3,693,083 | $ 3,693,083 | |
WEBA [Member] | ||||
Cash | $ 172,950 | |||
Accounts receivable | 342,151 | |||
Loan receivable from RS&T | 500,000 | |||
Property and equipment | 8,720 | |||
Total identifiable assets acquired | 3,598,821 | |||
Accounts payable and accrued expenses | 190,527 | |||
Deferred tax liability | 1,030,000 | |||
Total liabilities assumed | 1,220,527 | |||
Total identifiable assets less liabilities assumed | 2,378,294 | |||
Goodwill | 2,729,229 | |||
Net assets acquired | 5,107,523 | |||
Customer Lists [Member] | WEBA [Member] | ||||
Intangible assets | 470,000 | |||
Intellectual Property [Member] | WEBA [Member] | ||||
Intangible assets | 880,000 | |||
Trade Names [Member] | WEBA [Member] | ||||
Intangible assets | 390,000 | |||
Non-Compete Agreements [Member] | WEBA [Member] | ||||
Intangible assets | $ 835,000 |
Acquisitions, Goodwill and Ot32
Acquisitions, Goodwill and Other Intangible Assets (Details 2) - USD ($) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2016 | Sep. 30, 2016 | |
Business Combinations [Abstract] | ||
Total revenues | $ 1,933,311 | $ 5,711,266 |
Net loss | $ (839,801) | $ (2,773,438) |
Acquisitions, Goodwill and Ot33
Acquisitions, Goodwill and Other Intangible Assets (Details 3) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Finite live intangible assets | ||
Gross | $ 2,794,204 | $ 3,066,500 |
Additions | ||
Accumulated Amortization | (667,959) | (272,296) |
Net | 2,398,541 | 2,794,204 |
Goodwill | ||
Gross | 3,693,083 | 3,693,083 |
Additions | 129,500 | |
Accumulated Amortization | ||
Net | 3,822,583 | $ 3,693,083 |
Customer List And Tradename [Member] | ||
Finite live intangible assets | ||
Estimated Useful Life | 5 years | |
Gross | 961,204 | $ 987,500 |
Additions | ||
Accumulated Amortization | (176,109) | (26,296) |
Net | 811,391 | $ 961,204 |
Non-Compete Agreements [Member] | ||
Finite live intangible assets | ||
Estimated Useful Life | 5 years | |
Gross | 953,000 | $ 1,199,000 |
Additions | ||
Accumulated Amortization | (425,850) | (246,000) |
Net | 773,150 | $ 953,000 |
Intellectual Property [Member] | ||
Finite live intangible assets | ||
Estimated Useful Life | 10 years | |
Gross | 880,000 | $ 880,000 |
Additions | ||
Accumulated Amortization | (66,000) | |
Net | $ 814,000 | $ 880,000 |
Acquisitions, Goodwill and Ot34
Acquisitions, Goodwill and Other Intangible Assets (Details Narrative) - StockPurchase Agreement [Member] - GlyEco Acquisition Corp. #3 [Member] | Dec. 27, 2016USD ($) |
Purchase consideration | $ 150,000 |
Purchase consideration subject to earn out provision | 2,500,000 |
Promissory Notes | 2,650,000 |
Earn-out payments liability recorded at fair value | 1,745,023 |
Fair value of consideration transferred | $ 5,100,000 |
Minimum [Member] | |
Useful life of intangible assets acquired | 5 years |
Maximum [Member] | |
Useful life of intangible assets acquired | 10 years |
Property, Plant and Equipment35
Property, Plant and Equipment (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Accumulated depreciation | $ (1,187,815) | $ (927,909) |
Property, plant and equipment before construction in process | 3,427,556 | 3,352,994 |
Construction in process | 644,857 | 304,845 |
Total property, plant and equipment, net | 4,072,413 | 3,657,839 |
Machinery And Equipment [Member] | ||
Property, plant and equipment before construction in process | 4,347,950 | 4,154,305 |
Leasehold improvements [Member] | ||
Property, plant and equipment before construction in process | $ 267,421 | $ 126,598 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) | 9 Months Ended |
Sep. 30, 2017$ / sharesshares | |
Number of Shares | |
Unvested at beginning | shares | 12,691,084 |
Restricted stock granted | shares | 3,200,000 |
Restricted stock vested | shares | |
Restricted stock forfeited | shares | (1,940,680) |
Unvested at end | shares | 13,950,404 |
Weighted Average Grant-Date Fair Value per Share | |
Unvested at beginning | $ / shares | $ 0.08 |
Restricted stock granted | $ / shares | 0.08 |
Restricted stock vested | $ / shares | |
Restricted stock forfeited | $ / shares | 0.08 |
Unvested at end | $ / shares | $ 0.08 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) | Aug. 10, 2017USD ($)$ / sharesshares | Feb. 13, 2017Number$ / sharesshares | Mar. 31, 2017$ / sharesshares | Jun. 30, 2017$ / sharesshares | Sep. 30, 2017$ / sharesshares | Dec. 31, 2016$ / sharesshares |
Preferred stock, authorized | 40,000,000 | 40,000,000 | ||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | ||||
Preferred stock, shares outstanding | 0 | 0 | ||||
Common stock, outstanding | 164,415,465 | 126,156,189 | ||||
Common stock, authorized | 300,000,000 | 300,000,000 | ||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | ||||
Rights offering expiration date | Aug. 4, 2017 | |||||
Gross proceeds | $ | $ 2,290,000 | |||||
Cash | $ | 670,000 | |||||
Redemption of previously issued notes | $ | 1,620,000 | |||||
Sale of common stock | $ | $ 28,600,000 | |||||
Price per share | $ / shares | $ 0.08 | |||||
Shares issued in exchange of principal and interest | 2,754,500 | |||||
Repayment of amount | $ | $ 220,360 | |||||
Principal and accrued interest | $ | $ 52,467 | |||||
Series AA Preferred Stock [Member] | ||||||
Preferred stock, authorized | 3,000,000 | |||||
Equity Incentive Program [Member] | Two Employees [Member] | ||||||
Number of employees | Number | 2 | |||||
Number of common stock issued | 160,000 | |||||
Share price (in dollars per share) | $ / shares | $ 0.125 | |||||
Equity Incentive Program [Member] | Employees [Member] | ||||||
Number of common stock issued | 115,503 | 195,039 | 238,448 | |||
Share price (in dollars per share) | $ / shares | $ 0.12 | $ 0.10 | $ 0.08 | |||
Equity Incentive Program [Member] | Three accredited investors [Member] | ||||||
Number of common stock issued | 4,218,750 | |||||
Share price (in dollars per share) | $ / shares | $ 0.08 | |||||
FY2017 Director Compensation Plan [Member] | Six Directors [Member] | ||||||
Number of common stock issued | 512,498 | 627,546 | 803,480 | |||
Director Compensation Plan [Member] | Six Directors [Member] | ||||||
Share price (in dollars per share) | $ / shares | $ 0.12 | $ 0.098 | $ 0.077 |
Stockholders' Equity (Details38
Stockholders' Equity (Details Narrative 1) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||
Jun. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | May 31, 2016 | Feb. 29, 2016 | Sep. 30, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Jan. 31, 2016 | Apr. 09, 2015 | Jan. 31, 2015 | |
Volatility rate | 100.00% | |||||||||||
Risk free interest rate | 1.90% | |||||||||||
One Accredited Investor [Member] | ||||||||||||
Share price (in dollars per share) | $ 0.0001 | |||||||||||
Options and Warrants [Member] | ||||||||||||
Expense related to the vesting of outstanding | $ 7,500 | |||||||||||
Share price (in dollars per share) | $ 0.08 | $ 0.08 | ||||||||||
Common stock issued in connection with warrants (In shares) | 4,218,750 | |||||||||||
Warrants value | $ 337,500 | |||||||||||
Performance Market Based Stock Awards Dated February 2016 [Member] | ||||||||||||
Number of restricted shares issued, new issue | 3,301,358 | |||||||||||
Amortization of unvested restricted shares | 17,364 | $ 20,470 | ||||||||||
Value of restricted stock grant | $ 198,000 | |||||||||||
Method used | Monte Carlo Simulation. | |||||||||||
Expected term (in years) | 6 years | |||||||||||
Volatility rate | 91.00% | |||||||||||
Risk free interest rate | 1.34% | |||||||||||
Value of award | $ 18,000 | |||||||||||
Description of vesting rights | The restricted shares will vest according to the following terms: - 20% when the market price of the Companys common stock trades at or above $0.30 for a specified period. - 30% when the market price of the Companys common stock trades at or above $0.40 for a specified period. - 30% when the market price of the Companys common stock trades at or above $0.50 for a specified period. - 20% when the market price of the Companys common stock trades at or above $0.60 for a specified period. | |||||||||||
Performance Market Based Stock Awards Dated February 2016 [Member] | President [Member] | ||||||||||||
Number of restricted shares issued, new issue | 1,100,453 | |||||||||||
Performance Market Based Stock Awards Dated February 2016 [Member] | Chief Financial Officer [Member] | ||||||||||||
Number of restricted shares issued, new issue | 2,200,905 | |||||||||||
Restricted Shares [Member] | Vice President of U.S. Operations [Member] | ||||||||||||
Number of restricted shares issued, new issue | 1,650,680 | 1,650,680 | ||||||||||
Amortization of unvested restricted shares | 14,802 | |||||||||||
Value of restricted stock grant | $ 141,000 | |||||||||||
Method used | Monte Carlo Simulation. | |||||||||||
Expected term (in years) | 6 years | |||||||||||
Volatility rate | 92.00% | |||||||||||
Risk free interest rate | 1.35% | |||||||||||
Description of vesting rights | - 20% when the market price of the Company’s common stock trades at or above $0.30 for a specified period. - 30% when the market price of the Company’s common stock trades at or above $0.40 for a specified period. - 30% when the market price of the Company’s common stock trades at or above $0.50 for a specified period. - 20% when the market price of the Company’s common stock trades at or above $0.60 for a specified period. | |||||||||||
Restricted Shares [Member] | Chief Executive Officer [Member] | ||||||||||||
Number of restricted shares issued, new issue | 1,100,453 | |||||||||||
Value of restricted stock grant | $ 94,000 | |||||||||||
Share based compensation | 0 | |||||||||||
Value of award | $ 18,000 | |||||||||||
Description of vesting rights | - 20% when the market price of the Companys common stock trades at or above $0.30 for a specified period. - 30% when the market price of the Companys common stock trades at or above $0.40 for a specified period. - 30% when the market price of the Companys common stock trades at or above $0.50 for a specified period. - 20% when the market price of the Companys common stock trades at or above $0.60 for a specified period. | |||||||||||
Restricted Shares [Member] | Director [Member] | ||||||||||||
Number of restricted shares issued, new issue | 1,000,000 | 2,200,000 | 2,200,000 | 940,595 | ||||||||
Share price (in dollars per share) | $ 2 | |||||||||||
Amortization of unvested restricted shares | $ 71,818 | |||||||||||
Value of restricted stock grant | $ 72,099 | $ 430,000 | $ 150,258 | |||||||||
Share based compensation | $ 3,004 | |||||||||||
Method used | Monte Carlo Simulation. | |||||||||||
Expected term (in years) | 6 years | |||||||||||
Volatility rate | 98.00% | |||||||||||
Risk free interest rate | 2.00% | |||||||||||
Restricted Shares [Member] | Former Interim Chief Executive Officer [Member] | ||||||||||||
Number of restricted shares issued, new issue | 6,290,000 | 6,290,000 | ||||||||||
Performance Market Based Stock Awards [Member] | ||||||||||||
Amortization of unvested restricted shares | $ 11,547 | $ 50,565 | ||||||||||
Value of restricted stock grant | $ 38,000 | |||||||||||
Method used | Monte Carlo Simulation. | |||||||||||
Expected term (in years) | 6 years | |||||||||||
Volatility rate | 88.00% | |||||||||||
Risk free interest rate | 1.79% | |||||||||||
Performance Stock Awards January 2016 [Member] | ||||||||||||
Number of restricted shares issued, new issue | 6,281,250 | |||||||||||
Share price (in dollars per share) | $ 0.12 | |||||||||||
Value of restricted stock grant | $ 509,000 | |||||||||||
Share based compensation | $ 381,586 | |||||||||||
Method used | Monte Carlo Simulation. | |||||||||||
Expected term (in years) | 1 year | |||||||||||
Volatility rate | 106.00% | |||||||||||
Risk free interest rate | 0.65% |
Segments (Details)
Segments (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Sales, net | $ 3,284,670 | $ 1,388,980 | $ 8,493,088 | $ 4,145,741 |
Cost of goods sold | 2,876,577 | 7,468,406 | ||
Gross profit | 408,093 | 106,473 | 1,024,682 | 177,240 |
Total operating expenses | 2,163,354 | 799,826 | 4,369,523 | 2,716,773 |
Loss from operations | (1,755,261) | (693,353) | (3,344,841) | (2,539,533) |
Total other income (expenses) | 300,632 | 5,653 | 720,235 | 2,413 |
Loss before provision for income taxes | (2,055,893) | $ (699,006) | (4,065,076) | $ (2,541,946) |
Consumer [Member] | ||||
Sales, net | 1,455,849 | 4,701,752 | ||
Cost of goods sold | 1,307,099 | 4,092,801 | ||
Gross profit | 148,750 | 608,951 | ||
Total operating expenses | 713,885 | 1,722,774 | ||
Loss from operations | (565,135) | (1,113,823) | ||
Total other income (expenses) | (152,171) | (163,390) | ||
Loss before provision for income taxes | (717,306) | (1,277,213) | ||
Industrial [Member] | ||||
Sales, net | 2,076,852 | 4,626,034 | ||
Cost of goods sold | 1,817,509 | 4,210,303 | ||
Gross profit | 259,343 | 415,731 | ||
Total operating expenses | 1,144,255 | 1,723,606 | ||
Loss from operations | (884,912) | (1,307,875) | ||
Total other income (expenses) | (49,998) | (80,921) | ||
Loss before provision for income taxes | (934,910) | (1,388,796) | ||
InterSegmentsEliminations [Member] | ||||
Sales, net | (248,031) | (834,698) | ||
Cost of goods sold | (248,031) | (834,698) | ||
Gross profit | ||||
Total operating expenses | ||||
Loss from operations | ||||
Total other income (expenses) | ||||
Loss before provision for income taxes | ||||
Corporate [Member] | ||||
Sales, net | ||||
Cost of goods sold | ||||
Total operating expenses | 305,214 | 923,143 | ||
Loss from operations | (305,214) | (923,143) | ||
Total other income (expenses) | (98,463) | (475,924) | ||
Loss before provision for income taxes | $ (403,677) | $ (1,399,067) |
Notes Payable (Details)
Notes Payable (Details) - USD ($) | Dec. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2016 |
Total notes payable | $ 3,087,357 | $ 5,504,818 | |
Less current portion | (108,575) | (2,541,178) | |
Long-term portion of notes payable | 2,978,782 | 2,963,640 | |
2017 Secured Note [Member] | |||
Total notes payable | 110,822 | ||
2016 Secured Note [Member] | |||
Total notes payable | 326,535 | 396,562 | |
2016 5% Related Party Unsecured Notes Member [Member] | |||
Total notes payable | 1,000,000 | ||
2016 8% Related Party Unsecured Notes Member [Member] | |||
Total notes payable | 1,458,256 | ||
2016 WEBA Seller Notes [Member] | |||
Total notes payable | $ 2,650,000 | $ 2,650,000 |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) - USD ($) | Aug. 10, 2017 | Aug. 04, 2017 | Dec. 27, 2016 | Jul. 31, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 |
Gain on settlement | $ 15,000 | $ 15,000 | ||||||||
Debt discount | 26,872 | |||||||||
Gross proceeds from offering | 1,760,000 | |||||||||
Accrued offering | $ 50,000 | |||||||||
Amortization expense | 205,180 | |||||||||
Redeemption of shares | $ 1,550,000 | |||||||||
Issuance of common stock for cash | $ 260,000 | 541,779 | 2,936,792 | |||||||
Loss on debt extinguishment | $ (146,564) | $ (146,564) | ||||||||
2017 Secured Note [Member] | PACCAR Financial [Member] | GlyEco Acquisition Corp. #1 [Member] | ||||||||||
Principal balance | $ 116,655 | |||||||||
Interest rate | 7.95% | |||||||||
Debt terms | 5 years | |||||||||
2016 Secured Note [Member] | Minimum [Member] | Ascentium Capital [Member] | GlyEco Acquisition Corp. #1 [Member] | ||||||||||
Interest rate | 5.80% | |||||||||
Debt terms | 4 years | |||||||||
2016 Secured Note [Member] | Maximum [Member] | Ascentium Capital [Member] | GlyEco Acquisition Corp. #1 [Member] | ||||||||||
Interest rate | 9.00% | |||||||||
Debt terms | 5 years | |||||||||
GlyEco Acquisition Corp. #1 [Member] | 2016 Unsecured Note [Member] | 5% Notes Subscription Agreement [Member] | ||||||||||
Principal balance | $ 1,000,000 | |||||||||
Maturity date | May 31, 2017 | |||||||||
GlyEco Acquisition Corp. #1 [Member] | 2016 Unsecured Note [Member] | 5% Notes Subscription Agreement [Member] | ||||||||||
Principal balance | $ 1,810,000 | |||||||||
Maturity date | Dec. 27, 2017 | |||||||||
Exercise value of warrants | $ 5,656,250 | |||||||||
Exercise price of warrants | $ 0.08 |
Capital Lease (Details Narrativ
Capital Lease (Details Narrative) | Apr. 13, 2017USD ($) |
Debt Disclosure [Abstract] | |
Sale of equipment | $ 1,700,000 |
Monthly rental payments | $ 44,720 |
Related Party Transactions (Det
Related Party Transactions (Details) - Vice President of U.S. Operations [Member] - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Due from Related Parties, Current [Roll Forward] | ||
Beginning Balance | $ 5,123 | $ 2,791 |
Monies owed to related party for services performed | 94,441 | 73,749 |
Monies paid, net | (99,564) | (75,667) |
Ending Balance | $ 873 |
Related Party Transactions (D44
Related Party Transactions (Details Narrative) - GlyEco Acquisition Corp. #1 [Member] - 2016 Unsecured Note [Member] - 5% Notes Subscription Agreement [Member] | Dec. 27, 2016USD ($) |
Principal balance | $ 1,000,000 |
Principal balance | 1,810,000 |
Exercise value of warrants | $ 5,656,250 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | Mar. 22, 2016 | Jan. 08, 2016 | Dec. 28, 2015 | Sep. 30, 2017 | Aug. 15, 2017 | Dec. 31, 2016 |
Negotiated payment | $ 250,000 | |||||
Demand for payment to maintain access to the facility | $ 2,300,000 | |||||
Payment to landlord | $ 335,000 | |||||
Other Commitments Description | In order to comply with West Virginia regulations enacted in 2017, the Company has elected to accrue $780,000 for tank remediation. The amount of the accrual is based on various assumptions and estimates and will be periodically reevaluated in light of a variety of future events and contingencies. For example, subsequent to the completion of the tank remediation we expect to have feedstock, which, depending on pricing at the time, may have a value of up to $300,000. | |||||
Minimum [Member] | ||||||
Environmental remediation liabilities | $ 1,000,000 | |||||
Maximum [Member] | ||||||
Environmental remediation liabilities | $ 2,000,000 | |||||
GlyEco Acquisition Corp. #4 [Member] | LitigationCaseSignificantOutstanding1Member | ||||||
Name of the plantiff | Encore Petroleum, LLC. | |||||
Domicile of litigation | Superior Court of New Jersey Law Division, Hudson County. | |||||
GlyEco Acquisition Corp. #4 [Member] | Litigation Case Significant Outstanding [Member] | ||||||
Litigation settlement amount | $ 95,000 | |||||
Name of the plantiff | Onyxx Group LLC. | |||||
Domicile of litigation | Circuit Court of Hillsborough County, Florida. |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) | 1 Months Ended |
Oct. 31, 2017shares | |
Subsequent Event [Member] | Equity Incentive Program [Member] | |
Number common stock issued | 60,792 |