XML 28 R14.htm IDEA: XBRL DOCUMENT v2.4.0.8
1. Significant Accounting Policies and Nature of Operations: Going Concern and Management's Plan (Policies)
9 Months Ended
Sep. 30, 2013
Policies  
Going Concern and Management's Plan

Going Concern and Management’s Plan

 

The Company reported a net loss of approximately $651,300 and net cash provided by operating activities of $147,033 for the nine  months ended September 30, 2013, has a working capital deficiency of approximately $4.6 million and an accumulated deficit of approximately $67.7 million at September 30, 2013.  These factors raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s unaudited condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The accompanying unaudited condensed consolidated financial statements do not include any adjustments related to the recovery of the recorded assets or the classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

 

Our continuation as a going concern is dependent upon our ability to generate sufficient cash flow from operations or to obtain equity investment or additional financing to meet obligations on a timely basis and ultimately achieve profitable operations.

 

During the nine months ended September 30, 2013, the Company received proceeds of $46,598 ($1,610 in cash and balance as non-cash transaction) from a related party, as well as proceeds from a shareholder loan totaling approximately $15,000 ($9,661 in cash and balance as non-cash transaction) to help with working capital.  We expect that the Company will continue to rely on loans, including those  from related parties and issuances of shares in private placements to meet its working capital needs for the immediate future.

 

 

Management plans to focus the Company’s resources in four key areas:

 

       Thermal Gasifier engineering design and deployment

       Maximizing value from the Hutchins, Texas tire processing and storage facility.

      Development of project based opportunities

        Attracting strategic investment

 

 

 

 

1. Significant Accounting Policies and Nature of Operations (Continued) 

 

Management considers the Thermal Gasifier and waste-to-energy segment to be our core business. However, significant focus continues to be  placed on the improvement of the tire processing operation at our Hutchins, TX facility to increase production and reduce operating costs, and expand sales to increase revenue and cash flow.  In February 2012, the Company began operation of the shredding equipment for its TDF production line

 

We continue to develop our internal resources and implement business development activities to secure waste-to-energy and biomass-to-energy facility opportunities that will utilize our Thermal Gasifier technology through build-own-operate agreements or through joint-venture relationships with strategic partners. We are looking to partner with companies that produce large hydrocarbon-based waste streams and are also in need of thermal and/or electrical energy. We are targeting opportunities where there are high disposal fees and energy rates, where we can use the Thermal Gasifier with back end power systems to provide significant cost savings to the end user.  We are reviewing the economic viability of a number of opportunities in the northeastern United States and in Colorado and are currently working towards obtaining letters of intent from these entities.    We currently have a pilot project being constructed in the northeastern US to showcase the technology and obtain emissions testing data from our current generation of units. Currently, the Company does not have any Thermal Gasifiers in operation.

 

Management believes that current revenue levels will not be sufficient to meet our operational needs and execute the Company’s complete business plan. The Company is seeking additional funding for the activities described above. The Company is exploring various financing opportunities and has a commitment for up to $6 million in funding but does not have a final agreement in place  at the present time.  

 

Future funding may be through an equity investment, debt or convertible debt. Current market conditions present uncertainty as to the Company’s ability to secure additional funds, as well as its ability to reach full profitability. There can be no assurance that the Company will be able to secure additional financing, or obtain favorable terms on such financing if it is available.  Continued negative cash flow and lack of liquidity create significant uncertainty about the Company’s ability to fully implement its operating plan, and may result in the Company reducing the scope of its planned operations, scale back or discontinue its technology and project development programs, or obtain funds, if available, through strategic alliances that may require the Company to relinquish rights to certain of its technologies or products or to discontinue its operations entirely.