Discontinued Operations and Assets Held for Sale

12 Months Ended

Dec. 31, 2015

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations and Assets Held for Sale

NOTE 15 – DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE

Regional Recycling of Niagara

During the third quarter of 2013, the Company determined that due to the significant losses incurred by Regional Recycling of Niagara, and the continuous need to fund their operations through the Company’s Plastic2Oil operations, that it would shut down the operations of the facility. The decision to do this was based on the following factors:

● The inventory processed over the prior months at Regional Recycling of Niagara was comingled with contaminated materials that made the significant majority of their inventory worthless without significant additional processing and labor (Note 4);

● The fixed assets utilized at the facility were old and beginning to become in need of significant repairs, which would have been a significant cost to maintain (Note 5);

● The pre-processing cost of plastic at Regional Recycling of Niagara was significant and was a hindrance to the Company becoming profitable on a cost per gallon of fuel basis; and

● The Company leases the Recycling Facility in Thorold, Ontario, Canada with terms remaining of up to 14 years (Note 17).

The property was vacated on November 10, 2015 and the lease was terminated on January 15, 2016 effective October 31 with no penalty for early termination. This resulted in adjusting the short-term and long-term obligations set up in 2013 to zero, which resulted in a $195,044 income. The results of operations from Regional Recycling of Niagara for the years ended December 31, 2015 and 2014 have been classified as discontinued operations and are as follows:

Condensed Statements of Operations

	Year Ended December 31,
	2015			2014
Revenue	$	4,408		$	-
Cost of sales		-			-
Gross profit		4,408			-
Operating expenses		188,343			128,059
Other income		(383,387	)
Gain (loss) before income taxes		(199,452	)		128,059
Future income tax recovery		-			-
Gain (Loss) from discontinued operations, net of tax	$	(199,452	)	$	128,059

Sale of Pak-It

On February 14, 2013, the Company completed the sale of substantially all of the assets of Pak-It, LLC and Dickler Chemical Company, Inc. (collectively “Pak-It”). The sale had an effective date of January 1, 2012, in which the new owners of Pak-It were responsible for the operations of the entity. The results of operations from Pak-It for the years presented have been classified as discontinued operations and there were no operations for the year ended December 31, 2012 included in the consolidated financial statements.

The Company sold Pak-It for $900,000, in exchange for $400,000 cash at the closing of the sale and entry into a note receivable for $500,000 due on July 1, 2013. In the third quarter of 2013, the Company’s assessed the collectability of the note receivable from the buyer of Pak-It. It was determined that due to the lack of a payment within forty days of the due date that the collectability was not assured and the Company has reserved for the full amount of the note receivable. The company settled for $200,000 on February 10, 2014.

As of December 31, 2015, there were no remaining assets held for sale related to Pak-It.

The Company’s statements of operations from discontinued operations related to Pak-it for the years ended December 31, 2015 and 2014 are as follows:

Condensed Statements of Operations of Pak-It

	Year Ended December 31,
	2015		2014
Sales	$	-	$	-
Cost of sales		-		-
Gross profit		-		-
Operating income (expenses)		-		500,000
Impairment loss		-		-
Other income(expense)		-		(10,433	)
Loss before income taxes		-		489,567
Future income tax recovery		-		-
Income from discontinued operations, net of tax	$	-	$	(489,567	)

Closure of Javaco

During the second quarter of 2012, the Company determined that the operations of Javaco no longer coincided with the strategy of the Company and that it would close down Javaco’s operations. In July 2012, the Company shut down the Javaco operations, including the termination of the five employees of Javaco, the liquidation of the inventory and fixed assets and the termination of the lease for the building. The results of operations from Javaco for the years ended December 31, 2015, and 2014 have been classified as discontinued operations. As of December 31, 2015 and 2014, there were no remaining assets held for sale related to Javaco.