Reportable Business Segments

12 Months Ended

Dec. 31, 2013

Segment Reporting [Abstract]

Reportable Business Segments

Note 3 – Reportable Business Segments

Our segment reporting is consistent with the current manner of how our Chief Operating Decision Maker (“CODM”) and our board of directors view our business. Our focus is on reprocessing recycled or waste plastics into products to be sold to manufacturers who require certain plastics in their processes and we transfer certain reprocessed plastics to our other segment which produces engineered products utilizing recycled plastics and plastic composites.

In order to position our strategic focus to allow our CODM and management to make business decisions, we report two segments – Axion Recycled Plastics our reprocessed plastics segment and Axion International, our engineered products segment. Decisions regarding allocation of resources and investment of capital are made and will be made based on the reportable segments contribution to the financial success of the consolidated enterprise.

We report in these two segments in addition to corporate. The segments are:

· Our reprocessed plastics segment typically purchases various plastic wastes and through its efforts, reprocesses that plastic waste into flakes or pellets which become raw material for other manufacturers, our customers. In certain situations we will apply our processes to our customers inventory of plastic waste, and return it to them including and charge them for our tolling effort.

· Our engineered products segment takes certain recycled plastics and plastic composites, and through a proprietary extrusion process, manufactures rail ties, construction mats, boards, I-beams, etc. through two product lines. Our ECOTRAX product line primarily serves the rail industry by selling all lengths of rail ties. Our STRUXURE product line sells products supporting other infrastructure requirements, with a current focus on heavy- and light-equipment construction mats.

The significant accounting policies of each segment are the same as those described in note 1.

Segment Reporting - For the Year Ended December 31, 2013 (1)
	Engineered		Reprocessed		Corporate
Statement of Operations	Products		Plastics		Activities		Combined
Revenue	$	5,916,363	$	711,402	$	-	$	6,627,765
Costs of sales:
Production		5,434,123		1,036,926		-		6,471,049
Start-up and excess capacity		816,111		-		-		816,111
Gross margin (loss)		(333,871)		(325,524)		-		(659,395)
Product development and quality management		1,556,203		-		-		1,556,203
Marketing and sales		911,345		15,716		-		927,061
General and administrative		-		-		4,232,200		4,232,200
Total operating costs and expenses		2,467,548		15,716		4,232,200		6,715,464
Loss from operations		(2,801,419)		(341,240)		(4,232,200)		(7,374,859)
Interest expense		-		-		808,117		808,117
Amortization of debt discounts		-		-		685,761		685,761
Change in fair value of derivative liabilities		-		-		15,320,865		15,320,865
Total other expense		-		-		16,814,743		16,814,743
Net loss	$	(2,801,419)	$	(341,240)	$	(21,046,943)	$	(24,189,602)
Total assets	$	7,546,454	$	8,462,969	$	-	$	16,009,423

(1) As the acquisition of the plastics recycling company which provided a second segment to our business, was acquired in November 2013, we did not report segment information for the year ended December 31, 2012.