Reportable Business Segments

3 Months Ended

Mar. 31, 2014

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 segments 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 and temporary highway mats.

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

Segment Reporting - For the Three Months Ended March 31, 2014

	Engineered		Reprocessed		Corporate
	Products		Plastics		Activities		Combined
Statement of Operations
Revenue	$	2,776,563	$	2,074,380	$	-	$	4,850,943
Costs of sales:
Production		2,790,395	$	2,817,030				5,607,425
Excess capacity		465,666						465,666
Gross margin (loss)		(479,498)		(742,650)		-		(1,222,148)
Prod dev & quality mgt						79,482		79,482
Marketing & sales						300,711		300,711
General & admin						980,434		980,434
Total op expenses		-		-		1,360,627		1,360,627
Loss from operations		(479,498)		(742,650)		(1,360,627)		(2,582,775)
Interest expense						383,657		383,657
Amortization of debt discounts						436,409		436,409
Change in FV of deriv liab						(6,972,477)		(6,972,477)
Total other (income) expense		-		-		(6,152,411)		(6,152,411)
Net income (loss)	$	(479,498)	$	(742,650)	$	4,791,784	$	3,569,636
Total assets	$	6,185,061	$	8,515,377	$	1,830,213	$	16,530,651

(1) Since the acquisition of the plastics recycling company which provided the second segment to our business was acquired in November 2013, we did not report segment information for the three months ended March 31, 2013.