Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | May 14, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | GlyEco, Inc. | |
Entity Central Index Key | 0000931799 | |
Document Type | 10-Q | |
Trading Symbol | GLYE | |
Document Period End Date | Mar. 31, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity's Reporting Status Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Entity Ex Transition Period | false | |
Entity Common Stock, Shares Outstanding | 1,448,411 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2019 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Current Assets | ||
Cash | $ 157,716 | $ 237,648 |
Accounts receivable, net | 736,271 | 215,336 |
Prepaid expenses | 248,894 | 137,067 |
Inventories | 218,289 | 238,895 |
Current assets from discontinued operations | 81,975 | 1,760,100 |
Total current assets | 1,443,145 | 2,589,046 |
Property, plant and equipment, net | 2,500,900 | 2,562,618 |
Other Assets | ||
Deposits | 47,155 | 49,081 |
Operating lease right-of-use assets | 447,094 | |
Goodwill | 2,937,288 | 2,937,288 |
Other intangibles, net | 1,610,376 | 1,721,000 |
Noncurrent assets from discontinued operations | 215,106 | |
Total other assets | 5,257,019 | 4,707,369 |
Total assets | 9,201,064 | 9,859,033 |
Current Liabilities | ||
Accounts payable and accrued expenses | 3,553,794 | 2,845,856 |
Customer deposits | 107,650 | 274,103 |
Contingent acquisition consideration | 815,670 | 815,670 |
Notes payable - current portion, net of debt discount | 2,200,026 | 2,080,071 |
Operating lease liabilities - current portion | 199,167 | |
Finance lease obligations - current portion | 508,505 | 494,131 |
Current liabilities from discontinued operations | 270,470 | 586,019 |
Total current liabilities | 7,655,282 | 7,095,850 |
Non-Current Liabilities | ||
Notes payable - non-current portion | 2,715,023 | 2,783,744 |
Operating lease liabilities - non-current portion | 389,596 | |
Capital lease obligations - non-current portion | 617,287 | 749,992 |
Noncurrent liabilities from discontinued operations | 200,752 | |
Total non-current liabilities | 3,922,658 | 3,533,736 |
Total liabilities | 11,577,940 | 10,629,586 |
Stockholders' Deficit | ||
Preferred stock, par value $0.0001 per share: 40,000,000 shares authorized; no shares issued and outstanding as of March 31, 2019 and December 31, 2018, respectively | ||
Common stock, par value $0.0001 per share: 300,000,000 shares authorized; 1,383,731 and 1,358,597 shares issued and outstanding as of March 31, 2019 and December 31, 2018, respectively | 138 | 136 |
Additional paid-in capital | 46,656,557 | 46,539,845 |
Accumulated deficit | (49,033,571) | (47,310,534) |
Total stockholders' deficit | (2,376,876) | (770,553) |
Total liabilities and stockholders' deficit | $ 9,201,064 | $ 9,859,033 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2019 | Dec. 31, 2018 |
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 | 1,383,731 | 1,358,597 |
Common stock, outstanding | 1,383,731 | 1,358,597 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Income Statement [Abstract] | ||
Net sales | $ 1,729,151 | $ 1,261,425 |
Cost of goods sold | 1,865,286 | 869,877 |
Gross (loss) profit | (136,135) | 391,548 |
Operating expenses: | ||
Consulting fees | 6,500 | 46,689 |
Share-based compensation | 109,965 | 119,888 |
Salaries and wages | 353,376 | 556,451 |
Legal and professional | 321,045 | 330,439 |
General and administrative | 450,111 | 368,226 |
Total operating expenses | 1,240,997 | 1,421,693 |
Loss from operations | (1,377,132) | (1,030,145) |
Other expense: | ||
Interest expense | 222,220 | 103,678 |
Total other expense | 222,220 | 103,678 |
Loss from continuing operations before provision for income taxes | (1,599,352) | (1,133,823) |
Provision for income taxes | 17,251 | |
Net loss from continuing operations | (1,599,352) | (1,151,074) |
Loss from discontinued operations, net of income taxes | (123,685) | (66,498) |
Net loss | $ (1,723,037) | $ (1,217,572) |
Basic and diluted loss per share from continuing operations (in dollars per share) | $ (1.16) | $ (0.87) |
Basic and diluted loss per share from discontinued operations (in dollars per share) | (0.09) | (0.05) |
Basic and diluted loss per share (in dollars per share) | $ (1.25) | $ (0.92) |
Weighted average number of common shares outstanding - basic and diluted | 1,383,031 | 1,323,398 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity (Deficit) (Unaudited) - USD ($) | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
Balance, at beginning at Dec. 31, 2017 | $ 132 | $ 45,863,969 | $ (41,996,598) | $ 3,867,503 |
Balance, at beginning (in shares) at Dec. 31, 2017 | 1,322,264 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Share-based compensation | $ 1 | 119,887 | 119,888 | |
Share-based compensation (in shares) | 10,485 | |||
Relative fair value of warrants to purchase common stock issued in connection with notes payable | 166,667 | 166,667 | ||
Net loss | (1,217,572) | (1,217,572) | ||
Balance, at end at Mar. 31, 2018 | $ 133 | 46,150,523 | (43,214,170) | 2,936,486 |
Balance, at end (in shares) at Mar. 31, 2018 | 1,332,749 | |||
Balance, at beginning at Dec. 31, 2018 | $ 136 | 46,539,845 | (47,310,534) | $ (770,553) |
Balance, at beginning (in shares) at Dec. 31, 2018 | 1,358,597 | 1,358,597 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Share-based compensation | $ 2 | 109,963 | $ 109,965 | |
Share-based compensation (in shares) | 18,780 | |||
Common stock issued under ESPP | 6,749 | 6,749 | ||
Common stock issued under ESPP (in shares) | 6,354 | |||
Net loss | (1,723,037) | (1,723,037) | ||
Balance, at end at Mar. 31, 2019 | $ 138 | $ 46,656,557 | $ (49,033,571) | $ (2,376,876) |
Balance, at end (in shares) at Mar. 31, 2019 | 1,383,731 | 1,383,731 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash flow from operating activities | ||
Net loss from continuing operations | $ (1,599,352) | $ (1,151,074) |
Adjustments to reconcile net loss from continuing operations to net cash used in operating activities: | ||
Depreciation | 85,321 | 91,875 |
Amortization | 110,624 | 107,181 |
Amortization of operating lease right-use of assets | 27,954 | |
Share-based compensation expense | 109,965 | 119,888 |
Amortization of debt discount | 75,074 | |
Provision for (recoveries on) bad debt | 13,053 | (33,390) |
Loss on disposal of equipment | 26,689 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (533,988) | 460,666 |
Prepaid expenses | 59,550 | (133,410) |
Inventories | (81,222) | 112,966 |
Deposits | 1,926 | |
Accounts payable and accrued expenses | 655,200 | 69,453 |
Net cash used in operating activities from continued operations | (1,049,206) | (355,845) |
Net cash provided by operating activities from discontinued operations | (221,662) | (90,881) |
Net cash used in operating activities | (1,270,868) | (446,726) |
Cash flows from investing activities | ||
Payment of contingent acquisition consideration | (6,642) | |
Proceeds from sale of Consumer Segment | 1,352,620 | |
Purchases of property, plant and equipment | (31,328) | (4,283) |
Net cash provided by (used in) investing activities from continuing operations | 1,321,292 | (10,925) |
Net cash used in investing activities from discontinued operations | (79,289) | |
Net cash provided by (used in) investing activities | 1,321,292 | (90,214) |
Cash flows from financing activities | ||
Repayment of notes payable | (18,774) | (64,587) |
Repayment of finance lease obligations | (118,331) | (96,100) |
Proceeds for issuance of notes payable | 1,000,000 | |
Purchase of ESPP shares | 6,749 | |
Net cash (used in) provided by financing activities from continuing operations | (130,356) | 839,313 |
Net cash used in financing activities from discontinued operations | (16,027) | |
Net cash (used in) provided by financing activities | (130,356) | 823,286 |
Net change in cash and restricted cash | (79,932) | 286,346 |
Cash and restricted cash at the beginning of the year | 237,648 | 117,944 |
Cash and restricted cash at end of the year | 157,716 | 404,290 |
Supplemental disclosure of cash flow information | ||
Interest paid during the year | 42,302 | 56,049 |
Income taxes paid during the year | 16,429 | |
Supplemental disclosure of non-cash investing and financing activities | ||
Acquisition of equipment with finance lease obligations | 162,551 | |
Note payable issued for insurance premium | 69,549 | 65,875 |
Relative fair value of warrants issued in connection with notes payable | $ 166,667 |
Organization and Nature of Busi
Organization and Nature of Business | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Nature of Business | NOTE 1 – Organization and Nature of Business GlyEco, Inc. (the “Company”, “we”, or “our”) is a chemical company focused on technology development and manufacturing of coolants, additives, and related performance fluids. We serve and support the automotive, heavy-duty, and industrial markets with an unwavering commitment to customer service and quality. GlyEco Inc., located in Institute, West Virginia, is a vertically integrated company which manufactures ethylene glycol, additives, and finished fluids. Maintaining control over all core ingredients of its glycol-based performance fluids, and directly managing all aspects of the manufacturing process allows GlyEco Inc. to offer our customers the highest value with competitive costs. The Company was formed in the State of Nevada on October 21, 2011. 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 96.9% of Recovery Solutions & Technologies Inc. (“RS&T”), a privately-owned company involved in the development and commercialization of glycol recovery technology, now named (“Glyeco WV”). 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, located in Institute, West Virginia (the “Dow Assets”). During the first quarter of fiscal year 2017 and fourth quarter of fiscal year 2018, the Company purchased an additional 2.9% and 0.20%, respectively, of RS&T (for a total percentage ownership of 100% of RS&T). On January 11, 2019, the Company completed the sale (the “Asset Sale”) of the route antifreeze collection and re-distillation segment (the “Consumer Segment”) to Heritage-Crystal Clean, LLC (the “Purchaser”) pursuant to the terms of an asset purchase agreement (see Note 9). We are currently comprised of the parent corporation GlyEco, Inc., and our subsidiaries WEBA, and Glyeco WV. Stock Split On July 10, 2018, the Company effected a reverse stock split of its common stock, immediately followed by a forward stock split of its common stock. The ratio for the reverse stock split is fixed at 1-for-500 and the ratio for the forward stock split is fixed at 4-for-1, resulting in a net reverse split of 125-for-1. All share and per share information in this Quarterly Report on Form 10-Q has been retroactively adjusted to reflect the reverse stock split. Going Concern The condensed consolidated financial statements as of March 31, 2019 and December 31, 2018 and for the three months ended March 31, 2019 and 2018, have been prepared assuming that the Company will continue as a going concern. As of March 31, 2019, 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 | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | NOTE 2 – Basis of Presentation and Summary of Significant Accounting Policies The following represents an update for the three months ended March 31, 2019 to the significant accounting policies described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, filed with the United States Securities and Exchange Commission (the “SEC”) on April 1, 2019. 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 of America (“GAAP”) and pursuant to the rules and regulations of the SEC. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments (consisting of normal recurring accruals) necessary for a fair presentation on an interim basis. The operating results for the three months ended March 31, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019. 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, 2018, including the Company’s audited consolidated financial statements and related notes included therein. Principles of Consolidation These consolidated financial statements include the accounts of the Company and its wholly-owned and majority-owned subsidiaries. All significant intercompany transactions have been eliminated as a result of consolidation. Noncontrolling Interests The Company recognizes noncontrolling interests as equity in the consolidated financial statements separate from the parent company’s equity. Noncontrolling interests’ partners have less than a 50% share of voting rights at any one of the subsidiary level companies. The amount of net income (loss) attributable to noncontrolling interests is included in consolidated net income (loss) on the face of the consolidated statements of operations. Changes in a parent entity’s ownership interest in a subsidiary that do not result in deconsolidation are treated as equity transactions if the parent entity retains its controlling financial interest. The Company recognizes a gain or loss in net income (loss) when a subsidiary is deconsolidated. Such gain or loss is measured using the fair value of the noncontrolling equity investment on the deconsolidation date. Additionally, operating losses are allocated to noncontrolling interests even when such allocation creates a deficit balance for the noncontrolling interest partner. The Company provides either in the consolidated statements of stockholders’ equity, if presented, or in the notes to consolidated financial statements, a reconciliation at the beginning and the end of the period of the carrying amount of total equity (net assets), equity (net assets) attributable to the parent, and equity (net assets) attributable to the noncontrolling interest that separately discloses: (1) Net income or loss; (2) Transactions with owners acting in their capacity as owners, showing separately contributions from and distributions to owners; and (3) Each component of other comprehensive income or loss. There were no noncontrolling interests as of March 31, 2019 and December 31, 2018 and noncontrolling interests were not significant for the three months ended March 31, 2018. Operating Segments As a result of the sale of the Consumer Segment in January 2019, the Company operates as one segment. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported revenues and expenses during the reporting periods. Because of the use of estimates inherent within the financial reporting process, actual results may differ significantly from those estimates. Significant estimates include, but are not limited to, items such as the allowance for doubtful accounts receivable, the value of share-based compensation and warrants, the recoverability of property, plant and equipment, goodwill, other intangibles and the determination of their estimated useful lives, contingent liabilities, and environmental and asset retirement obligations. Due to the uncertainties inherent in the formulation of accounting estimates, it is reasonable to expect that these estimates could be materially revised within the next year. Revenue Recognition The Company recognizes revenue when its customer obtains control of promised goods or services in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. To determine revenue recognition the Company performs the following five steps: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when (or as) the Company satisfies a performance obligation. Product sales consist of sales of the Company’s products to manufacturers and distributors. The Company considers order confirmations or purchase orders, which in some cases are governed by master supply agreements, to be contracts with a customer. Product sale contracts are short-term contracts where the time between order confirmation and satisfaction of all performance obligations is less than one year. Revenues from product sales are recognized when the customer obtains control of the Company’s product, which occurs at a point in time, usually upon shipment, with payment terms typically in the range of 30 to 60 days after invoicing, depending on business and geographic region. When the Company performs shipping and handling activities after the transfer of control to the customer (e.g., when control transfers prior to shipment), these are considered fulfillment activities, and accordingly, the costs are accrued when the related revenue is recognized. The Company has no obligations for returns and warranties. Taxes collected from customers relating to product sales and remitted to governmental authorities are excluded from revenues. Costs and Expenses Cost of goods sold includes all direct material and labor costs and those indirect costs of bringing raw materials to sale condition, including depreciation of equipment used in manufacturing and shipping and handling costs. Selling, general, and administrative costs are charged to operating expenses as incurred. Research and development costs are expensed as incurred, are included in operating expenses and were insignificant in the three months ended March 31, 2019 and 2018. Advertising costs are expensed as incurred. Accounts Receivable Accounts receivable are recognized and carried at the original invoice amount less an allowance for expected uncollectible amounts. Inherent in the assessment of the allowance for doubtful accounts are certain judgments and estimates including, among others, the customer’s willingness or ability to pay, the Company’s compliance with customer invoicing requirements, the effect of general economic conditions and the ongoing relationship with the customer. Accounts with outstanding balances longer than the payment terms are considered past due. We do not charge interest on past due balances. The Company writes off trade receivables when all reasonable collection efforts have been exhausted. Bad debt expense is reflected as a component of general and administrative expenses in the condensed consolidated statements of operations. The allowance for doubtful accounts totaled $19,480 and $6,427 as of March 31, 2019 and December 31, 2018, respectively. Inventories Inventories are reported at the lower of cost and net realizable value. The cost of raw materials, including feedstocks and additives, is determined on an average unit cost of the units in a production lot. Work-in-process represents labor, material and overhead costs associated with the manufacturing costs at an average unit cost of the units in the production lot. Finished goods represents work-in-process items with additive costs added. The Company periodically reviews its inventories for obsolete or unsalable items and adjusts its carrying value to reflect estimated net realizable values. Net realizable value is the estimated selling price in the ordinary course of business less the cost to sell. Property, Plant and Equipment Property, plant and equipment is stated at cost. The Company provides for depreciation on the cost of its equipment using the straight-line method over an estimated useful life, ranging from three to twenty years, and zero salvage value. Expenditures for repairs and maintenance are charged to expense as incurred. For purposes of computing depreciation, the useful lives of property, plant and equipment are as follows: Leasehold improvements Lesser of the remaining lease term or 5 years Machinery and equipment 3-15 years Impairment of Long-Lived Assets Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of would be separately presented in the condensed consolidated balance sheet and reported at the lower of the carrying amount or fair value less costs to sell, and are no longer depreciated. The assets and liabilities of a disposal group classified as held-for-sale or related to discontinued operations would be presented separately in the appropriate asset and liability sections of the condensed consolidated balance sheets, if material. Deferred Financing Costs, Debt Discount and Detachable Debt-Related Warrants Costs incurred in connection with debt are deferred and recorded as a reduction to the debt balance in the accompanying condensed consolidated balance sheets. The Company amortizes debt issuance costs over the expected term of the related debt using the effective interest method. Debt discounts relate to the relative fair value of warrants issued in conjunction with the debt and are also recorded as a reduction to the debt balance and amortized over the expected term of the debt to interest expense using the effective interest method. Net Loss Per Share Calculation The basic net loss per share of common stock is computed by dividing the net loss available to holders of common stock by the weighted average number of shares of common stock outstanding during a period. Diluted loss per share of common stock is computed by dividing the net loss available to holders of common stock by the weighted average number of shares of common stock outstanding plus potentially dilutive securities. The Company’s potentially dilutive securities outstanding are not shown in the diluted net loss per share calculation because their effect in the three months ended March 31, 2019 and 2018 would be anti-dilutive. At March 31, 2019, these potentially dilutive securities included warrants to purchase 104,957 shares of common stock and stock options to purchase 25,941 shares of common stock for a total of 130,898 shares of common stock. At March 31, 2018, these potentially dilutive securities included warrants to purchase 79,785 shares of common stock and stock options to purchase 27,101 shares of common stock for a total of 106,886 shares of common stock. Share-based Compensation All share-based payments including grants of stock options, are expensed based on their estimated fair values at the grant date, in accordance with Accounting Standards Codification (“ASC”) 718. Compensation expense for share-based payments 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. Discontinued Operations Our Consumer Segment, which was sold in January 2019, was classified as discontinued operations in the condensed consolidated balance sheets at March 31, 2019 and December 31, 2018 and in the condensed consolidated statements of operations, in accordance with ASC 205-20 “Presentation of Financial Statements”, ASC 360-10 “Property Plant and Equipment” and ASC 350-20 “Intangibles-Goodwill and Other Goodwill”. Cash flows and operations that relate to the Consumer Segment are shown separately from continuing operations. Assets and liabilities classified as discontinued operations are measured at the lower of carrying amount and fair value less costs to sell. Assets, liabilities and results of operations related to the Consumer Segment in the prior year have been reclassified as discontinued operations. 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 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. The Company has adopted ASU 2016-02 using the modified retrospective approach. This ASU also requires disclosures designed to give financial statement users information on the amount, timing and uncertainty of cash flows. See Note 8, Leases, for further information regarding our lease accounting policies. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2019 | |
Notes to Financial Statements | |
Revenue | NOTE 3 – Revenue Disaggregation of Revenue The Company disaggregates its revenue from contracts with customers by principal product group and geographic region, as the Company believes it best depicts the nature, amount, timing and uncertainty of its revenue and cash flows. See details in the tables below: Net Trade Revenue by Principal Product Group Three Months Ended March 31, 2019 2018 Antifreeze $ 119,736 $ — Ethylene Glycol 919,507 763,802 Additive 689,908 497,623 Total $ 1,729,151 $ 1,261,425 Net Trade Revenue by Geographic Region Three Months Ended March 31, 2019 2018 US $ 1,218,067 $ 917,380 Canada 502,785 316,099 China — 20,658 Mexico — 7,288 Chile 8,299 — Total $ 1,729,151 $ 1,261,425 Contract Balances Accounts receivable are recorded when the right to consideration becomes unconditional. The Company does not have any contract assets or liabilities as of March 31, 2019 and December 31, 2018. The Company expenses commissions when incurred as they would be amortized over one year or less. Contract liabilities consist of deposits made by customers for goods that have not yet been delivered. Once delivery is made the liability is reduced and the revenue is recognized. As of March 31, 2019 and December 31, 2018, the Company had $107,650 and $274,103, respectively, in customer deposits. The Company recognized $229,044 in revenue during the three months ended March 31, 2019, related to customer deposits at December 31, 2018. |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Inventories | NOTE 4 – Inventories The Company’s total inventories were as follows: March 31, December 31, 2019 2018 Raw materials $ 186,495 $ 157,031 Finished goods 31,794 81,864 Total inventories $ 218,289 $ 238,895 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | NOTE 5 – Goodwill and Other Intangible Assets The components of goodwill and other intangible assets are as follows: Gross Balance at Net Balance at Estimated March 31, Accumulated March 31, Useful Life 2019 Additions Amortization 2019 Finite live intangible assets: Customer list and tradename 5 years $ 881,000 $ — $ (395,400 ) $ 485,600 Non-compete agreements 5 years 814,000 — (371,224 ) 442,776 Intellectual property 10 years 880,000 — (198,000 ) 682,000 Total intangible assets $ 2,575,000 $ — $ (964,624 ) $ 1,610,376 Goodwill Indefinite $ 2,937,288 $ — $ — $ 2,937,288 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 | 3 Months Ended |
Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | NOTE 6 – Property, Plant and Equipment The Company’s property, plant and equipment were as follows: March 31, December 31, 2019 2018 Machinery and equipment $ 2,734,810 $ 2,694,528 Leasehold improvements 275,985 305,772 Accumulated depreciation (590,895 ) (522,160 ) 2,419,900 2,478,140 Construction in process 81,000 84,478 Total property, plant and equipment, net $ 2,500,900 2,562,618 |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
Stockholders' Equity | NOTE 7– Stockholders’ Equity Preferred Stock The Company’s articles of incorporation authorize the Company to issue up to 40,000,000 shares of preferred stock, par value $0.0001 per share, having preferences to be determined by the Board of Directors of the Company for dividends and liquidation of the Company’s assets. Of the 40,000,000 shares of preferred stock the Company is authorized to issue by its articles of incorporation, the Board of Directors has designated up to 3,000,000 shares as Series AA Preferred Stock. As of March 31, 2019, the Company had no shares of preferred stock outstanding. Common Stock As of March 31, 2019, the Company had 1,383,731 shares of common stock, par value $0.0001 per share, outstanding. The Company’s articles of incorporation authorize the Company to issue up to 300,000,000 shares of common stock. The holders are entitled to one vote for each share on matters submitted to a vote of stockholders, and to share pro rata in all dividends payable on the common stock after payment of dividends on any shares of preferred stock having preference in payment of dividends. The Company issued 6,354 shares of common stock to employees in connection with our employee stock purchase plan (see below) for total payments of $6,749. 2017 Employee Stock Purchase Plan On September 29, 2017, subject to stockholder approval, the Company’s Board of Directors approved the Company’s 2017 Employee Stock Purchase Plan (the “2017 ESPP”). The 2017 ESPP was approved by the Company’s stockholders at the Company’s 2017 Annual Meeting of Stockholders on November 14, 2017. Under the 2017 ESPP, the Company may grant eligible employees the right to purchase our common stock through payroll deductions at a price equal to the lesser of eighty five percent (85%) of the fair market value of a share of common stock on the exercise date of the current offering period or eighty five percent (85%) of the fair market value of our common stock on the grant date of the then current offering period. The first offering period began on November 14, 2017. Thereafter, there will be consecutive six-month offering periods until January 2, 2022, or until the 2017 ESPP is terminated by the Board of Directors of the Company, if earlier. The share-based compensation expense related to the 2017 ESPP during the three months ended March 31, 2019 was insignificant. During the three months ended March 31, 2019, the Company issued the following shares of common stock for compensation: On January 2, 2019, the Company issued an aggregate of 18,780 shares of common stock to six directors of the Company pursuant to the Company’s FY2017 Director Compensation Plan at a price of $3.99 per share for a value of approximately $75,000 which was expensed during the year ended December 31, 2018. On March 31, 2019, the Company expensed the value of an aggregate of 64,680 shares of common stock to six directors of the Company pursuant to the Company’s FY2017 Director Compensation Plan at a price of $1.16 per share totaling approximately $75,000. The shares were issued in April 2019. A summary of the Company’s performance and market-based restricted stock awards (including shares approved but not issued) is presented below: Number of Shares Weighted- Average Grant-Date Fair Value per Share Unvested at January 1, 2019 120,596 $ 8.34 Restricted stock granted — — Restricted stock vested — — Restricted stock forfeited — — Unvested at March 31, 2019 120,596 $ 8.34 During the three months ended March 31, 2019 and 2018, the Company recorded $35,032 and $26,774 respectively, related to the performance and market-based restricted stock awards. Options and Warrants During the three months ended March 31, 2019, the Company did not issue any options or warrants. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Leases | NOTE 8 – Leases On January 1, 2019, we adopted ASC 842, “Leases” which, among other changes, requires us to record liabilities classified as operating leases on our condensed consolidated balance sheets along with a corresponding right-of-use asset. Results for reporting periods beginning after January 1, 2019 are presented under Topic 842, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under Topic 840. We elected the package of practical expedients available for expired or existing contracts, which allowed us to carryforward our historical assessments of whether contracts are or contain leases, lease classification tests and treatment of initial direct costs. We also elected to not separate lease components from non-lease components for all fixed payments, and we exclude variable lease payments in the measurement of right-of-use assets and lease liabilities. Upon adoption of ASC 842, we recorded a $475,000 increase in other assets, a $112,000 decrease to other current liabilities, and a $587,000 increase to operating lease liabilities. The impact primarily related to the change in assigning a right-of-use asset and related lease liability to our operating leases. We did not record any cumulative effect adjustments to opening retained earnings, and adoption of the lease standard had no impact to cash from or used in operating, financing, or investing on our consolidated cash flow statements. We determine if an arrangement is a lease at inception. Most of our operating leases do not provide an implicit rate so we use our incremental borrowing rate based on the information available at the commencement date to determine the present value of future payments. We lease various assets in the ordinary course of business as follows: warehouses to store our materials; office space for administrative activities to support our business; and certain manufacturing facilities. Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheet as we recognize lease expense for these leases on a straight-line basis over the lease term. Most lease agreements include one or more renewal options, all of which are at our sole discretion. Future renewal options that have not been executed as of the consolidated balance sheet date are excluded from right-of-use assets and related lease liabilities. Certain leases also include options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. Lease Position as of March 31, 2019 The table below presents the lease-related assets and liabilities recorded on the condensed consolidated balance sheet: Balance at March 31, Classification 2019 Assets Non-Current Finance Property, plant and equipment $ 1,637,753 Operating Operating lease right-of-use assets 447,094 Total lease assets $ 2,084,847 Liabilities Current Operating Operating lease liabilities- current portion $ 199,167 Finance Finance lease obligations- current portion 508,505 Non-Current Operating Operating lease obligations- non-current portion $ 389,596 Finance Finance lease obligations- non current portion 617,287 Total lease liabilities $ 1,714,555 Weighted-average remaining lease term Operating leases 3.01 years Finance leases 2.07 years Weighted-average discount rate Operating leases 10.82 % Finance leases 12.5 % Lease Costs The table below presents certain information related to the lease costs for finance and operating leases during 2019: Classification Three months ended March 31, 2019 Operating lease cost Administrative $ 43,862 Finance lease cost Amortization of leased assets Cost of Sales 37,275 Interest on capital lease obligations Interest expense, net 37,637 Total lease costs $ 118,774 Other Information The table below presents supplemental cash flow information related to leases during 2019: Three months ended March 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 14,514 Operating cash flows for finance leases 37,637 Financing cash flows for finance leases 118,331 Future minimum lease payments under non-cancelable operating leases (with initial or remaining lease terms in excess of one year) and future minimum finance lease payments as of March 31, 2019 were as follows: Operating Leases Finance Leases 2019 (remaining) $ 199,977 $ 465,905 2020 216,396 619,355 2021 218,502 198,728 2022 52,850 — Total minimum lease payments 687,725 1,283,988 Amount representing interest (98,962 ) (158,196 ) Present value of future minimum lease obligations 588,763 1,125,792 Current portion (199,167 ) (508,505 ) $ 389,596 $ 617,287 Future minimum lease payments under non-cancelable operating leases (with initial or remaining lease terms in excess of one year) and future minimum capital lease payments as of December 31, 2018 as determined prior to the adoption of ASC 842 were as follows: Operating Leases Capital Leases 2019 $ 220,000 $ 621,785 2020 212,000 619,355 2021 213,000 198,728 2022 64,000 — 2023 49,000 — Total minimum lease payments $ 758,000 1,439,868 Amount representing interest (195,745 ) Present value of future minimum finance lease obligations 1,244,123 Current portion (494,131 ) $ 749,992 |
Discontinued Operations
Discontinued Operations | 3 Months Ended |
Mar. 31, 2019 | |
Business Combinations [Abstract] | |
Discontinued Operations | NOTE 9 – Discontinued Operations On January 11, 2019, we completed the Asset Sale of the Consumer Segment to the Purchaser pursuant to the terms of an asset purchase agreement, effective as of January 11, 2019 (the “Closing Date”), by and among the Purchaser, the Company and certain subsidiaries of the Company listed therein (the “Asset Purchase Agreement”). In consideration for the assets, the Purchaser paid the Company a purchase price of $1,417,000 in cash, which price is subject to adjustment based on the delivered value of the working capital of the Consumer Segment, to be determined within 90 days after the Closing Date, as well as a $100,000 damage hold back, to be paid to the Company within 30 days of the closing of the Asset Sale (the “Closing”). Other than the assumption of loan payments related to certain vehicle financings, no debt or significant liabilities were assumed by the Purchaser in the Asset Sale. The loss from discontinued operations in the condensed consolidated statements of operations includes the following: Three Months Ended March 31, 2019 March 31, 2018 Net sales $ 149,534 $ 1,739,585 Cost of goods sold (182,630 ) (1,579,223 ) Operating expenses (77,213 ) (221,488 ) Impairment of operating lease right-of-use assets (12,745 ) — Interest expense (656 ) (5,372 ) Pretax loss from discontinued operations (123,710 ) (66,498 ) Income tax benefit 25 — Loss from discontinued operations $ (123,685 ) $ (66,498 ) The carrying amount of assets and liabilities included in discontinued operations comprise the following: March 31, 2019 December 31, 2018 Accounts receivable $ 57,058 $ 289,967 Prepaid expenses — 1,693 Inventories — 399,677 Property, plant and equipment — 1,031,865 Deposits 24,917 36,898 Operating lease right-of-use assets 215,106 — Total assets classified as discontinued operations $ 297,111 $ 1,760,100 Accounts payable and accrued expenses $ 245,621 $ 410,563 Notes payable — 175,456 Operating lease liabilities 225,601 — Total liabilities classified as discontinued operations $ 471,222 $ 586,019 |
Notes Payable
Notes Payable | 3 Months Ended |
Mar. 31, 2019 | |
Notes Payable [Abstract] | |
Notes Payable | NOTE 10 – Notes Payable Notes payable consist of the following: As of March 31, 2018 As of December 31, 2018 2019 Unsecured Note $ 62,768 $ — 2018 Related Party 10% Unsecured Notes, net of debt discount of $8,669 and $83,743, respectively 2,091,331 2,016,257 2018 Secured Note 63,689 68,431 2017 Secured Note — 81,659 2016 Secured Notes 47,261 47,468 2016 WEBA Seller Notes 2,650,000 2,650,000 Total notes payable 4,915,049 4,863,815 Less current portion (2,200,026 ) (2,080,071 ) Long-term portion of notes payable $ 2,715,023 $ 2,783,744 2019 Unsecured Note In March 2019, the Company entered into an unsecured note with Bank Direct to finance its insurance premiums (the “2019 Unsecured Note”). The key terms of the 2019 Unsecured Note include: (i) an original principal balance of $69,549, (ii) an interest rate of 6.74%, and (iii) a term of ten months. 2018 Related Party 10% Unsecured Notes On April 6, 2018, the Company commenced a private placement (“Private Placement”) of 10% Senior Unsecured Promissory Notes (the “10% Notes”) and (ii) warrants (the “Warrants”) to purchase up to 100,000 shares of common stock of the Company, that were issued pursuant to subscription agreement. The 10% Notes bear interest at a rate of 10% per annum due on the maturity date or as otherwise specified by the 10% Notes. The Warrants have an exercise price per share of $6.25. The Company closed the first tranche of the Private Placement on April 6, 2018, with Wynnefield Partners Small Cap Value I, L.P. and Wynnefield Partners Small Cap Value, L.P., (“Wynnefield Funds”), which are under the management of Wynnefield Capital, Inc. (“Wynnefield Capital”), with respect to 10% Notes with an aggregate principal amount of $1,000,000 and Warrants to purchase an aggregate of 40,000 shares of common stock. This tranche of the Private Placement was scheduled to mature on May 4, 2019 and extension discussions are in place. The Company closed the second tranche of the Private Placement on April 10, 2018, with one of its directors, Charles F. Trapp, with respect to a 10% Note with a principal amount of $50,000 and a Warrant to purchase 2,000 shares of common stock. This tranche of the Private Placement was scheduled to mature on May 9, 2019 and extension discussions are in place. The Company closed a third tranche of the Private Placement on May 1, 2018 with Ian Rhodes, the Company’s former Chief Executive Officer and a former director, with respect to a 10% Note with a principal amount of $50,000 and a Warrant to purchase 2,000 shares of common stock. This tranche of the Private Placement is scheduled to mature on June 1, 2019. The Company closed a fourth tranche of the Private Placement on May 4, 2018 with the Wynnefield Funds managed by Wynnefield Capital, for an aggregate principal amount of $1,000,000 of 10% Notes and Warrants to purchase an aggregate of 40,000 shares of common stock. This tranche of the Private Placement was scheduled to mature on May 6, 2019 and extension discussions are in place. The Company allocated the proceeds received from the 10% Notes and the Warrants on a relative fair value basis at the time of issuance. The total debt discount of $300,297, including the relative fair value of the Warrants and the debt issuance costs will be amortized over the life of the 10% Notes to interest expense using the effective interest method. Amortization expense during the three months ended March 31, 2019 and 2018 was $75,074 and insignificant, resprectively. We estimated the fair value of the Warrants on the issuance date using a BSM option pricing model with the following assumptions: Warrants Expected term 3 years Volatility 143.81 % Risk Free Rate 2.39 % The proceeds of the Notes were allocated to the components as follows: Proceeds allocated at issuance date Notes $ 1,820,946 Warrants 279,054 Total $ 2,100,000 |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 11 – Related Party Transactions Former Vice President of U.S. Operations The former Vice President of U.S. Operations is the sole owner of BKB Holdings, LLC, which is the landlord of the property where one of the Company’s processing and distribution centers was located. The former Vice President of U.S. Operations also is the sole owner of Renew Resources, LLC, which provided services to the Company as a vendor. The ending balance is included in accounts payable and accrued expenses in the accompanying condensed consolidated balance sheet. 2019 2018 Beginning Balance as of January 1, $ — $ — Monies owed to related party for services performed 22,449 18,780 Monies paid (15,127 ) (18,780 ) Ending balance as of March 31, $ 4,462 $ — 10% Notes On April 6, 2018 and May 4, 2018, the Company issued the 10% Notes for an aggregate principal amount of $2,000,000 from the offering and issuance of 10% Notes to Wynnefield Partners Small Cap Value I, L.P. and Wynnefield Partners Small Cap Value, L.P, which are under the management of Wynnefield Capital. The Company’s Chairman of the Board, Dwight Mamanteo, is a portfolio manager of Wynnefield Capital. (See Note 10 for additional information.) The Company closed a subsequent tranche of the Private Placement on April 10, 2018, with Charles Trapp with respect to a 10% Note with a principal amount of $50,000 and a Warrant to purchase 2,000 shares of common stock. (See Note 10 for additional information.) The Company closed a subsequent tranche of the Private Placement on May 1, 2018, with Ian Rhodes with respect to a 10% Note with a principal amount of $50,000 and a Warrant to purchase 2,000 shares of common stock. (See Note 10 for additional information.) |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 12 – Commitments and Contingencies Litigation The Company may be party to legal proceedings in the ordinary course of business from time to time. Litigation is subject to inherent uncertainties, and an adverse result in a legal proceeding could arise that may harm our business. Below is an overview of a pending legal proceeding in which an adverse result could have a material adverse effect on our business and results of operations. On December 27, 2017, PSP Falcon Industries, LLC (“PSP Falcon”) filed a civil action against the Company in the Ocean County Superior Court located in Toms River, New Jersey. The civil action related to an outstanding balance alleged to be due to PSP Falcon from the Company in an amount of $530,633 related to certain construction expenses. The Company settled this issue on February 26, 2019 for a minimal amount. 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 GAAP; 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. Such potential liabilities accrued by the Company do not take into consideration possible recoveries of future insurance proceeds. The Company maintains 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. It would be difficult to estimate the Company’s ultimate level of 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. The Company does not currently believe that any claims, penalties or costs in connection with known environmental matters will have a material adverse effect on the Company’s financial position, results of operations or cash flows. In December 2016, the Company completed the acquisition of certain glycol distillation assets from Union Carbide Corporation in 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. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 13 – Subsequent Events We have evaluated subsequent events through the filing date of this Form 10-Q, and determined that no subsequent events have occurred that would require recognition in the condensed consolidated financial statements or disclosure in the notes thereto other than as discussed in the accompanying notes. |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
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 of America (“GAAP”) and pursuant to the rules and regulations of the SEC. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments (consisting of normal recurring accruals) necessary for a fair presentation on an interim basis. The operating results for the three months ended March 31, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019. 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, 2018, 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 the Company and its wholly-owned and majority-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 a 50% share of voting rights at any one of the subsidiary level companies. The amount of net income (loss) attributable to noncontrolling interests is included in consolidated net income (loss) on the face of the consolidated statements of operations. Changes in a parent entity’s ownership interest in a subsidiary that do not result in deconsolidation are treated as equity transactions if the parent entity retains its controlling financial interest. The Company recognizes a gain or loss in net income (loss) when a subsidiary is deconsolidated. Such gain or loss is measured using the fair value of the noncontrolling equity investment on the deconsolidation date. Additionally, operating losses are allocated to noncontrolling interests even when such allocation creates a deficit balance for the noncontrolling interest partner. The Company provides either in the consolidated statements of stockholders’ equity, if presented, or in the notes to consolidated financial statements, a reconciliation at the beginning and the end of the period of the carrying amount of total equity (net assets), equity (net assets) attributable to the parent, and equity (net assets) attributable to the noncontrolling interest that separately discloses: (1) Net income or loss; (2) Transactions with owners acting in their capacity as owners, showing separately contributions from and distributions to owners; and (3) Each component of other comprehensive income or loss. There were no noncontrolling interests as of March 31, 2019 and December 31, 2018 and noncontrolling interests were not significant for the three months ended March 31, 2018. |
Operating Segments | Operating Segments As a result of the sale of the Consumer Segment in January 2019, the Company operates as one segment. |
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 receivable, the value of share-based compensation and warrants, the recoverability of property, plant and equipment, goodwill, other intangibles and the determination of their estimated useful lives, contingent liabilities, and environmental and asset retirement obligations. Due to the uncertainties inherent in the formulation of accounting estimates, it is reasonable to expect that these estimates could be materially revised within the next year. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue when its customer obtains control of promised goods or services in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. To determine revenue recognition the Company performs the following five steps: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when (or as) the Company satisfies a performance obligation. Product sales consist of sales of the Company’s products to manufacturers and distributors. The Company considers order confirmations or purchase orders, which in some cases are governed by master supply agreements, to be contracts with a customer. Product sale contracts are short-term contracts where the time between order confirmation and satisfaction of all performance obligations is less than one year. Revenues from product sales are recognized when the customer obtains control of the Company’s product, which occurs at a point in time, usually upon shipment, with payment terms typically in the range of 30 to 60 days after invoicing, depending on business and geographic region. When the Company performs shipping and handling activities after the transfer of control to the customer (e.g., when control transfers prior to shipment), these are considered fulfillment activities, and accordingly, the costs are accrued when the related revenue is recognized. The Company has no obligations for returns and warranties. Taxes collected from customers relating to product sales and remitted to governmental authorities are excluded from revenues. |
Costs and Expenses | Costs and Expenses Cost of goods sold includes all direct material and labor costs and those indirect costs of bringing raw materials to sale condition, including depreciation of equipment used in manufacturing and shipping and handling costs. Selling, general, and administrative costs are charged to operating expenses as incurred. Research and development costs are expensed as incurred, are included in operating expenses and were insignificant in the three months ended March 31, 2019 and 2018. 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 condensed consolidated statements of operations. The allowance for doubtful accounts totaled $19,480 and $6,427 as of March 31, 2019 and December 31, 2018, respectively. |
Inventories | Inventories Inventories are reported at the lower of cost and net realizable value. The cost of raw materials, including feedstocks and additives, is determined on an average unit cost of the units in a production lot. Work-in-process represents labor, material and overhead costs associated with the manufacturing costs at an average unit cost of the units in the production lot. Finished goods represents work-in-process items with additive costs added. The Company periodically reviews its inventories for obsolete or unsalable items and adjusts its carrying value to reflect estimated net realizable values. Net realizable value is the estimated selling price in the ordinary course of business less the cost to sell. |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment is stated at cost. The Company provides for depreciation on the cost of its equipment using the straight-line method over an estimated useful life, ranging from three to twenty years, and zero salvage value. Expenditures for repairs and maintenance are charged to expense as incurred. For purposes of computing depreciation, the useful lives of property, plant and equipment are as follows: Leasehold improvements Lesser of the remaining lease term or 5 years Machinery and equipment 3-15 years |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of would be separately presented in the condensed consolidated balance sheet and reported at the lower of the carrying amount or fair value less costs to sell, and are no longer depreciated. The assets and liabilities of a disposal group classified as held-for-sale or related to discontinued operations would be presented separately in the appropriate asset and liability sections of the condensed consolidated balance sheets, if material. |
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 relate to the relative fair value of warrants issued in conjunction with the debt and are also recorded as a reduction to the debt balance and amortized over the expected term of the debt to interest expense using the effective interest method. |
Net Loss Per Share Calculation | Net Loss Per Share Calculation The basic net loss per share of common stock is computed by dividing the net loss available to holders of common stock by the weighted average number of shares of common stock outstanding during a period. Diluted loss per share of common stock is computed by dividing the net loss available to holders of common stock by the weighted average number of shares of common stock outstanding plus potentially dilutive securities. The Company’s potentially dilutive securities outstanding are not shown in the diluted net loss per share calculation because their effect in the three months ended March 31, 2019 and 2018 would be anti-dilutive. At March 31, 2019, these potentially dilutive securities included warrants to purchase 104,957 shares of common stock and stock options to purchase 25,941 shares of common stock for a total of 130,898 shares of common stock. At March 31, 2018, these potentially dilutive securities included warrants to purchase 79,785 shares of common stock and stock options to purchase 27,101 shares of common stock for a total of 106,886 shares of common stock. |
Share-based Compensation | Share-based Compensation All share-based payments including grants of stock options, are expensed based on their estimated fair values at the grant date, in accordance with Accounting Standards Codification (“ASC”) 718. Compensation expense for share-based payments 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. |
Discontinued Operations | Discontinued Operations Our Consumer Segment, which was sold in January 2019, was classified as discontinued operations in the condensed consolidated balance sheets at March 31, 2019 and December 31, 2018 and in the condensed consolidated statements of operations, in accordance with ASC 205-20 “Presentation of Financial Statements”, ASC 360-10 “Property Plant and Equipment” and ASC 350-20 “Intangibles-Goodwill and Other Goodwill”. Cash flows and operations that relate to the Consumer Segment are shown separately from continuing operations. Assets and liabilities classified as discontinued operations are measured at the lower of carrying amount and fair value less costs to sell. Assets, liabilities and results of operations related to the Consumer Segment in the prior year have been reclassified as discontinued operations. |
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 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. The Company has adopted ASU 2016-02 using the modified retrospective approach. This ASU also requires disclosures designed to give financial statement users information on the amount, timing and uncertainty of cash flows. See Note 8, Leases, for further information regarding our lease accounting policies. |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Notes to Financial Statements | |
Summary of revenue from contracts with customers | The Company disaggregates its revenue from contracts with customers by principal product group and geographic region, as the Company believes it best depicts the nature, amount, timing and uncertainty of its revenue and cash flows. See details in the tables below: Net Trade Revenue by Principal Product Group Three Months Ended March 31, 2019 2018 Antifreeze $ 119,736 $ — Ethylene Glycol 919,507 763,802 Additive 689,908 497,623 Total $ 1,729,151 $ 1,261,425 10 Net Trade Revenue by Geographic Region Three Months Ended March 31, 2019 2018 US $ 1,218,067 $ 917,380 Canada 502,785 316,099 China — 20,658 Mexico — 7,288 Chile 8,299 — Total $ 1,729,151 $ 1,261,425 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | The Company’s total inventories were as follows: March 31, December 31, 2019 2018 Raw materials $ 186,495 $ 157,031 Finished goods 31,794 81,864 Total inventories $ 218,289 $ 238,895 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets | The components of goodwill and other intangible assets are as follows: Gross Balance at Net Balance at Estimated March 31, Accumulated March 31, Useful Life 2019 Additions Amortization 2019 Finite live intangible assets: Customer list and tradename 5 years $ 881,000 $ — $ (395,400 ) $ 485,600 Non-compete agreements 5 years 814,000 — (371,224 ) 442,776 Intellectual property 10 years 880,000 — (198,000 ) 682,000 Total intangible assets $ 2,575,000 $ — $ (964,624 ) $ 1,610,376 Goodwill Indefinite $ 2,937,288 $ — $ — $ 2,937,288 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property, plant and equipment | The Company’s property, plant and equipment were as follows: March 31, December 31, 2019 2018 Machinery and equipment $ 2,734,810 $ 2,694,528 Leasehold improvements 275,985 305,772 Accumulated depreciation (590,895 ) (522,160 ) 2,419,900 2,478,140 Construction in process 81,000 84,478 Total property, plant and equipment, net $ 2,500,900 2,562,618 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Stockholders' Deficit | |
Summary of restricted stock awards | A summary of the Company’s performance and market-based restricted stock awards (including shares approved but not issued) is presented below: Number of Shares Weighted- Average Grant-Date Fair Value per Share Unvested at January 1, 2019 120,596 $ 8.34 Restricted stock granted — — Restricted stock vested — — Restricted stock forfeited — — Unvested at March 31, 2019 120,596 $ 8.34 |
Leases (Table)
Leases (Table) | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of lease-related assets and liabilities | The table below presents the lease-related assets and liabilities recorded on the condensed consolidated balance sheet: Balance at March 31, Classification 2019 Assets Non-Current Finance Property, plant and equipment $ 1,637,753 Operating Operating lease right-of-use assets 447,094 Total lease assets $ 2,084,847 Liabilities Current Operating Operating lease liabilities- current portion $ 199,167 Finance Finance lease obligations- current portion 508,505 Non-Current Operating Operating lease obligations- non-current portion $ 389,596 Finance Finance lease obligations- non current portion 617,287 Total lease liabilities $ 1,714,555 Weighted-average remaining lease term Operating leases 3.01 years Finance leases 2.07 years Weighted-average discount rate Operating leases 10.82 % Finance leases 12.5 % |
Schedule of lease cost | The table below presents certain information related to the lease costs for finance and operating leases during 2019: Classification Three months ended March 31, 2019 Operating lease cost Administrative $ 43,862 Finance lease cost Amortization of leased assets Cost of Sales 37,275 Interest on capital lease obligations Interest expense, net 37,637 Total lease costs $ 118,774 |
Schedule of lease other Information | The table below presents supplemental cash flow information related to leases during 2019: Three months ended March 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 14,514 Operating cash flows for finance leases 37,637 Financing cash flows for finance leases 118,331 |
Schedule of future minimum lease payments under non-cancelable operating leases | Future minimum lease payments under non-cancelable operating leases (with initial or remaining lease terms in excess of one year) and future minimum finance lease payments as of March 31, 2019 were as follows: Operating Leases Finance Leases 2019 (remaining) $ 199,977 $ 465,905 2020 216,396 619,355 2021 218,502 198,728 2022 52,850 — Total minimum lease payments 687,725 1,283,988 Amount representing interest (98,962 ) (158,196 ) Present value of future minimum lease obligations 588,763 1,125,792 Current portion (199,167 ) (508,505 ) $ 389,596 $ 617,287 Future minimum lease payments under non-cancelable operating leases (with initial or remaining lease terms in excess of one year) and future minimum capital lease payments as of December 31, 2018 as determined prior to the adoption of ASC 842 were as follows: Operating Leases Capital Leases 2019 $ 220,000 $ 621,785 2020 212,000 619,355 2021 213,000 198,728 2022 64,000 — 2023 49,000 — Total minimum lease payments $ 758,000 1,439,868 Amount representing interest (195,745 ) Present value of future minimum finance lease obligations 1,244,123 Current portion (494,131 ) $ 749,992 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Business Combinations [Abstract] | |
Schedule of discontinued operations | The loss from discontinued operations in the condensed consolidated statements of operations includes the following: Three Months Ended March 31, 2019 March 31, 2018 Net sales $ 149,534 $ 1,739,585 Cost of goods sold (182,630 ) (1,579,223 ) Operating expenses (77,213 ) (221,488 ) Impairment of operating lease right-of-use assets (12,745 ) — Interest expense (656 ) (5,372 ) Pretax loss from discontinued operations (123,710 ) (66,498 ) Income tax benefit 25 — Loss from discontinued operations $ (123,685 ) $ (66,498 ) The carrying amount of assets and liabilities included in discontinued operations comprise the following: March 31, 2019 December 31, 2018 Accounts receivable $ 57,058 $ 289,967 Prepaid expenses — 1,693 Inventories — 399,677 Property, plant and equipment — 1,031,865 Deposits 24,917 36,898 Operating lease right-of-use assets 215,106 — Total assets classified as discontinued operations $ 297,111 $ 1,760,100 Accounts payable and accrued expenses $ 245,621 $ 410,563 Notes payable — 175,456 Operating lease liabilities 225,601 — Total liabilities classified as discontinued operations $ 471,222 $ 586,019 |
Notes Payable (Tables)
Notes Payable (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Notes Payable [Abstract] | |
Schedule of notes payable | Notes payable consist of the following: As of March 31, 2018 As of December 31, 2018 2019 Unsecured Note $ 62,768 $ — 2018 Related Party 10% Unsecured Notes, net of debt discount of $8,669 and $83,743, respectively 2,091,331 2,016,257 2018 Secured Note 63,689 68,431 2017 Secured Note — 81,659 2016 Secured Notes 47,261 47,468 2016 WEBA Seller Notes 2,650,000 2,650,000 Total notes payable 4,915,049 4,863,815 Less current portion (2,200,026 ) (2,080,071 ) Long-term portion of notes payable $ 2,715,023 $ 2,783,744 |
Schedule of Warrants valuation assumptions | We estimated the fair value of the Warrants on the issuance date using a BSM option pricing model with the following assumptions: Warrants Expected term 3 years Volatility 143.81 % Risk Free Rate 2.39 % |
Components of debt | The proceeds of the Notes were allocated to the components as follows: Proceeds allocated at issuance date Notes $ 1,820,946 Warrants 279,054 Total $ 2,100,000 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Related Party Transactions [Abstract] | |
Schedule of related party transations | The ending balance is included in accounts payable and accrued expenses in the accompanying condensed consolidated balance sheet. 2019 2018 Beginning Balance as of January 1, $ — $ — Monies owed to related party for services performed 22,449 18,780 Monies paid (15,127 ) (18,780 ) Ending balance as of March 31, $ 4,462 $ — |
Organization and Nature of Bu_2
Organization and Nature of Business (Details Narrative) | Jul. 10, 2018 | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2017 | Dec. 27, 2016 |
Reverse stock split | 1-for-500 | ||||
Forward stock split | 4-for-1 | ||||
Net reverse split | 125 for 1 | ||||
Glyeco West Virginia, Inc | |||||
Ownership percentage | 100.00% | 0.20% | 2.90% | 96.90% |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies (Details) | 3 Months Ended |
Mar. 31, 2019 | |
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 Sum_4
Basis of Presentation and Summary of Significant Accounting Policies (Details Narrative) | 3 Months Ended | ||
Mar. 31, 2019USD ($)Numbershares | Mar. 31, 2018shares | Dec. 31, 2018USD ($) | |
Number of operating segment | Number | 1 | ||
Allowance for doubtful accounts | $ | $ 19,480 | $ 6,427 | |
Number of potentially dilutive securities | 130,898 | 106,886 | |
Salvage value of property, plant and equipment | $ | $ 0 | $ 0 | |
Warrant [Member] | |||
Number of potentially dilutive securities | 104,957 | 79,785 | |
Employee Stock Option [Member] | |||
Number of potentially dilutive securities | 25,941 | 27,101 |
Revenue (Details)
Revenue (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenues | $ 1,729,151 | $ 1,261,425 |
United States [Member] | ||
Revenues | 1,218,067 | 917,380 |
Canada [Member] | ||
Revenues | 502,785 | 316,099 |
China [Member] | ||
Revenues | 20,658 | |
Mexico [Member] | ||
Revenues | 7,288 | |
Chile [Member] | ||
Revenues | 8,299 | |
Consumer [Member] | Antifreeze | ||
Revenues | 119,736 | |
Industrial [Member] | Ethylene Glycol | ||
Revenues | 919,507 | 763,802 |
Industrial [Member] | Additive | ||
Revenues | $ 689,908 | $ 497,623 |
Revenue (Details Narrative)
Revenue (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Notes to Financial Statements | ||
Contract assets or liability | $ 0 | $ 0 |
Customer deposits | 107,650 | $ 274,103 |
Revenue recognised | $ 229,044 |
Inventories (Details)
Inventories (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 186,495 | $ 157,031 |
Finished goods | 31,794 | 81,864 |
Total inventories | $ 218,289 | $ 238,895 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Finite live intangible assets | ||
Gross | $ 2,575,000 | |
Additions | ||
Accumulated Amortization | (964,624) | $ (428,721) |
Net | 1,610,376 | |
Goodwill | ||
Estimated Useful Life | Indefinite | |
Gross | 2,937,288 | $ 2,937,288 |
Additions | ||
Accumulated Amortization | ||
Net | 2,937,288 | $ 2,937,288 |
Customer List And Tradename [Member] | ||
Finite live intangible assets | ||
Estimated Useful Life | 5 years | |
Gross | 881,000 | |
Additions | ||
Accumulated Amortization | (395,400) | $ 177,921 |
Net | 485,600 | |
Non-Compete Agreements [Member] | ||
Finite live intangible assets | ||
Estimated Useful Life | 5 years | |
Gross | 814,000 | |
Additions | ||
Accumulated Amortization | (371,224) | $ (162,800) |
Net | 442,776 | |
Intellectual Property [Member] | ||
Finite live intangible assets | ||
Estimated Useful Life | 10 years | |
Gross | 880,000 | |
Additions | ||
Accumulated Amortization | (198,000) | $ (88,000) |
Net | $ 682,000 |
Property, Plant and Equipment_2
Property, Plant and Equipment (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Accumulated depreciation | $ (590,895) | $ (522,160) |
Property, plant and equipment before construction in process | 2,419,900 | 2,478,140 |
Construction in process | 81,000 | 84,478 |
Total property, plant and equipment, net | 2,500,900 | 2,562,618 |
Machinery And Equipment [Member] | ||
Property, plant and equipment before construction in process | 2,734,810 | 2,694,528 |
Leasehold improvements [Member] | ||
Property, plant and equipment before construction in process | $ 275,985 | $ 305,772 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) | 3 Months Ended |
Mar. 31, 2019$ / sharesshares | |
Number of Shares | |
Unvested at beginning | shares | 120,596 |
Restricted stock granted | shares | |
Restricted stock vested | shares | |
Restricted stock forfeited | shares | |
Unvested at end | shares | 120,596 |
Weighted Average Grant-Date Fair Value per Share | |
Unvested at beginning | $ / shares | $ 8.34 |
Restricted stock granted | $ / shares | |
Restricted stock vested | $ / shares | |
Restricted stock forfeited | $ / shares | |
Unvested at end | $ / shares | $ 8.34 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) | Jan. 02, 2019 | Oct. 29, 2017 | Mar. 31, 2019 | Mar. 30, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Jan. 02, 2018 |
Preferred stock, authorized | 40,000,000 | 40,000,000 | |||||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | |||||
Preferred stock, shares outstanding | 0 | 0 | |||||
Common stock, outstanding | 1,383,731 | 1,358,597 | |||||
Common stock, authorized | 300,000,000 | 300,000,000 | |||||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | |||||
Stock-based compensation expense | $ 109,965 | $ 119,888 | |||||
Value of award | $ 35,032 | $ 26,774 | |||||
2017 Employee Stock Purchase Plan [Member] | |||||||
Employee Stock Purchase Plan, Description | Company may grant eligible employees the right to purchase our common stock through payroll deductions at a price equal to the lesser of eighty five percent (85%) of the fair market value of a share of common stock on the exercise date of the current offering period or eighty five percent (85%) of the fair market value of our common stock on the grant date of the then current offering period. The first offering period began on November 14, 2017. Thereafter, there will be consecutive six-month offering periods until January 2, 2022, or until the 2017 ESPP is terminated by the Board of Directors of the Company, if earlier. | ||||||
Stock-based compensation expense | $ 0 | ||||||
2017 Employee Stock Purchase Plan [Member] | Employee [Member] | |||||||
Number of common stock issued | 6,354 | ||||||
Value of common stock issued | $ 6,749 | ||||||
2017 Employee Stock Purchase Plan [Member] | Six directors | |||||||
Number of common stock issued | 64,680 | ||||||
Share price (in dollars per share) | $ 1.16 | ||||||
Value of common stock issued | $ 75,000 | ||||||
2017 Employee Stock Purchase Plan [Member] | Six directors one | |||||||
Number of common stock issued | 18,780 | ||||||
Share price (in dollars per share) | $ 3.99 | ||||||
Value of common stock issued | $ 75,000 |
Leases (Details)
Leases (Details) | Mar. 31, 2019USD ($) |
Non-Current | |
Property, plant and equipment | $ 1,637,753 |
Operating lease right-of-use assets | 447,094 |
Total lease assets | 2,084,847 |
Current | |
Operating lease liabilities- current portion | 199,167 |
Finance lease obligations- current portion | 508,505 |
Non-Current | |
Operating lease obligations- non-current portion | 389,596 |
Finance lease obligations- non current portion | 617,287 |
Total lease liabilities | $ 1,714,555 |
Weighted-average remaining lease term Operating leases | 3 years 4 days |
Weighted-average remaining lease term Finance leases | 2 years 26 days |
Weighted-average discount rate Operating leases | 10.82% |
Weighted-average discount rate Finance leases | 12.50% |
Leases (Details 1)
Leases (Details 1) | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Debt Disclosure [Abstract] | |
Operating lease cost | $ 43,862 |
Finance lease cost | |
Amortization of leased assets | 37,275 |
Interest on capital lease obligations | 37,637 |
Total lease costs | $ 118,774 |
Leases (Details 2)
Leases (Details 2) | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Cash paid for amounts included in the measurement of lease liabilities: | |
Operating cash flows for operating leases | $ 14,514 |
Operating cash flows for finance leases | 37,637 |
Financing cash flows for finance leases | $ 118,331 |
Leases (Details 3)
Leases (Details 3) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Operating Leases | ||
2019 | $ 199,977 | $ 220,000 |
2020 | 216,396 | 212,000 |
2021 | 218,502 | 213,000 |
2022 | 52,850 | 64,000 |
Total minimum lease payments | 687,725 | 758,000 |
Amount representing interest | (98,962) | |
Present value of future minimum capital lease obligations | 588,763 | |
Current portion | (199,167) | |
Operating Leases liability noncurrent portion | 389,596 | |
Finance Leases | ||
2019 | 465,905 | |
2020 | 619,355 | |
2021 | 198,728 | |
2022 | ||
Total minimum lease payments | 1,283,988 | |
Present value of future minimum capital lease obligations | 1,125,792 | |
Current portion | (508,505) | |
Finance Leases noncurrent portion | $ 617,287 | |
Capital Leases | ||
2019 | 621,785 | |
2020 | 619,355 | |
2022 | 198,728 | |
2022 | ||
2023 | ||
Total minimum lease payments | 1,439,868 | |
Amount representing interest | (195,745) | |
Present value of future minimum finance lease obligations | 1,244,123 | |
Current portion | (494,131) | |
Capital Lease Noncurrent | $ 749,992 |
Leases (Details Narrative)
Leases (Details Narrative) | Jan. 02, 2019USD ($) |
Debt Disclosure [Abstract] | |
Increase in other assets | $ 475,000 |
Decrease to other current liabilities | 112,000 |
Increase In operating lease liabilities | $ 112,000 |
Discontinued Operations (Detail
Discontinued Operations (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Operating lease right-of-use assets | $ 447,094 | ||
Discontinued Operations [Member] | |||
Net sales | 149,534 | $ 1,739,585 | |
Cost of goods sold | (182,630) | (1,579,223) | |
Operating expenses | (77,213) | (221,488) | |
Impairment of long-lived assets | (12,745) | ||
Interest expense | (656) | (5,372) | |
Impairment of operating lease right-of-use assets | (123,710) | (66,498) | |
Income tax provision benefit | 25 | ||
Loss from discontinued operations | (123,685) | $ (66,498) | |
Accounts receivable | 57,058 | $ 289,967 | |
Prepaid expenses | 1,693 | ||
Inventories | 399,677 | ||
Property, plant and equipment | 1,031,865 | ||
Deposits | 24,917 | 36,898 | |
Operating lease right-of-use assets | 215,106 | ||
Total assets classified as discontinued operations | 297,111 | 1,760,100 | |
Accounts payable and accrued expenses | 245,621 | 410,563 | |
Notes payable | 175,456 | ||
Operating lease liabilities | 225,601 | ||
Total liabilities classified as discontinued operations | $ 471,222 | $ 586,019 |
Discontinued Operations (Deta_2
Discontinued Operations (Details Narrative) | Jan. 11, 2019USD ($) |
Discontinued Operations [Member] | |
Purchase consideration | $ 1,417,000 |
Notes Payable (Details)
Notes Payable (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Total notes payable | $ 4,915,049 | $ 4,863,815 |
Less current portion | (2,200,026) | (2,080,071) |
Long-term portion of notes payable | 2,715,023 | 2,783,744 |
2019 Unsecured Note [Member] | ||
Total notes payable | 62,768 | |
2016 5% Related Party Unsecured Notes Member [Member] | ||
Total notes payable | 2,091,331 | 2,016,257 |
2018 Secured Note [Member] | ||
Total notes payable | 63,689 | 68,431 |
2017 Secured Note [Member] | ||
Total notes payable | 81,659 | |
2016 Secured Notes [Member] | ||
Total notes payable | 47,261 | 47,468 |
2016 WEBA Seller Notes [Member] | ||
Total notes payable | $ 2,650,000 | $ 2,650,000 |
Notes Payable (Details 1)
Notes Payable (Details 1) - Warrant [Member] | 3 Months Ended |
Mar. 31, 2019 | |
Expected term | 3 years |
Volatility | 143.81% |
Risk Free Rate | 2.39% |
Notes Payable (Details 2)
Notes Payable (Details 2) | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Proceeds allocated at issuance date | $ 2,100,000 |
Warrant [Member] | |
Proceeds allocated at issuance date | 279,054 |
Notes [Member] | |
Proceeds allocated at issuance date | $ 1,820,946 |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) - USD ($) | May 04, 2018 | May 01, 2018 | Apr. 10, 2018 | Apr. 06, 2018 | Mar. 31, 2019 | Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 |
Amortization expense | $ 75,074 | |||||||
Private Placement [Member] | Trapp Note [Member] | ||||||||
Principal Amount | $ 50,000 | |||||||
Number common stock purchased | 2,000 | |||||||
Maturity date | May 9, 2019 | |||||||
Private Placement [Member] | Rhodes Note [Member] | ||||||||
Principal Amount | $ 50,000 | |||||||
Number common stock purchased | 2,000 | |||||||
Maturity date | Jun. 1, 2019 | |||||||
Private Placement [Member] | Wynnefield Capital | ||||||||
Principal Amount | $ 1,000,000 | |||||||
Number common stock purchased | 40,000 | |||||||
Maturity date | May 6, 2019 | |||||||
2019 Unsecured Note [Member] | ||||||||
Principal Amount | $ 69,549 | $ 69,549 | ||||||
Interest rate | 6.74% | 6.74% | ||||||
Debt terms | 10 months | |||||||
2018 10% Related Party Unsecured Notes [Member] | ||||||||
Debt discount | $ 83,743 | $ 83,743 | $ 8,669 | |||||
2018 10% Related Party Unsecured Notes [Member] | Subscription Agreement | Wynnefield Capital | ||||||||
Principal Amount | $ 1,000,000 | |||||||
Number common stock purchased | 40,000 | |||||||
Interest rate | 10.00% | |||||||
Maturity date | Apr. 6, 2021 | |||||||
Debt discount | $ 300,297 | |||||||
2018 10% Related Party Unsecured Notes [Member] | Private Placement [Member] | Subscription Agreement | ||||||||
Number of warrants issued | $ 100,000 | |||||||
Exercise Price | $ 6.25 | |||||||
Seller Notes [Member] | ||||||||
Principal Amount | $ 2,650,000 | $ 2,650,000 | ||||||
Interest rate | 8.00% | 8.00% | ||||||
Maturity date | Dec. 27, 2021 |
Related Party Transactions (Det
Related Party Transactions (Details) - Chief Executive Officer [Member] - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Due from Related Parties, Current [Roll Forward] | ||
Beginning Balance | ||
Monies owed to related party for services performed | 22,449 | 18,780 |
Monies paid, net | (15,127) | (18,780) |
Ending Balance | $ 4,462 |
Related Party Transactions (D_2
Related Party Transactions (Details Narrative) - USD ($) | May 01, 2018 | Apr. 10, 2018 | May 04, 2018 | Apr. 06, 2018 |
Trapp Note [Member] | Private Placement [Member] | ||||
Principal balance | $ 50,000 | |||
Number of common stock purchase | 2,000 | |||
Rhodes Note [Member] | Private Placement [Member] | ||||
Principal balance | $ 50,000 | |||
Number of common stock purchase | 2,000 | |||
GlyEco Acquisition Corp. #1 [Member] | 2018 10% Related Party Unsecured Notes [Member] | ||||
Principal balance | $ 2,000,000 | $ 2,000,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Litigation settlement amount | $ 530,633 | |
Tank remediation | $ 780,000 |