UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2018

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________________________ to ___________________

Commission file number: 000-30396

GLYECO, INC.

(Exact name of registrant as specified in its charter)

Nevada	45-4030261
(State or other jurisdiction of incorporation)	(I.R.S. Employer Identification No.)

PO BOX 387 Institute, West Virginia	25112
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (866) 960-1539

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to section 12(g) of the Act:

Common Stock, par value $0.0001 per share

(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No x

Note – Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Exchange Act from their obligations under those Sections.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer: ¨	Accelerated filer: ¨
Non-accelerated filer: ¨	Smaller reporting company: x
	Emerging growth company: ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act: ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ¨ No x

As of June 30, 2018, the last business day of the registrant’s most recently completed second fiscal quarter, 828,397 shares of its common stock, par value $0.0001 per share (the “Common Stock”), were held by non-affiliates of the registrant. The aggregate market value of those shares was $6,212,978 based on the closing sale price of $7.50 on such date as reported on the OTC Markets system. Shares held by executive officers, directors, and persons then owning directly or indirectly more than 10% of the outstanding Common Stock have been excluded from the preceding number because such persons may be deemed to be affiliates. This determination of affiliate status is not necessarily a conclusive determination for any other purposes.

As of March 29, 2019, the registrant had 1,383,731 shares of Common Stock issued and outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

None

TABLE OF CONTENTS

		Page
	PART I	4
Item 1.	Business	4
Item 1A.	Risk Factors	8
Item 1B.	Unresolved Staff Comments	8
Item 2.	Properties	8
Item 3.	Legal Proceedings	9
Item 4.	Mine Safety Disclosures	9

	PART II	10
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	10
Item 6.	Selected Financial Data	11
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	11
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	21
Item 8.	Financial Statements and Supplementary Data	21
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	48
Item 9A.	Controls and Procedures	48
Item 9B.	Other Information	49

	PART III	50
Item 10.	Directors, Executive Officers and Corporate Governance	50
Item 11.	Executive Compensation	56
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	68
Item 13.	Certain Relationships and Related Transactions, and Director Independence	71
Item 14.	Principal Accounting Fees and Services	72

	PART IV	73
Item 15.	Exhibits and Financial Statement Schedules	73

Signatures		77

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K (this “Annual Report”) contains forward-looking statements that involve risks and uncertainties, principally in the sections entitled “Business” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” All statements other than statements of historical fact contained in this Annual Report, including statements regarding future events, our future financial performance, business strategy and plans and objectives of management for future operations, are forward-looking statements. We have attempted to identify forward-looking statements by terminology including “anticipates,” “believes,” “can,” “continue,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “should,” or “will” or the negative of these terms or other comparable terminology. Although we do not make forward-looking statements unless we believe we have a reasonable basis for doing so, we cannot guarantee their accuracy. These statements are only predictions and involve known and unknown risks, uncertainties and other factors included in this Annual Report. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time and it is not possible for us to predict all risk factors, nor can we address the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause our actual results to differ materially from those contained in any forward-looking statements.

We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations, and financial needs. These forward-looking statements are subject to certain risks and uncertainties that could cause our actual results to differ materially from those reflected in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in this Annual Report and those discussed in other documents we file with the Securities and Exchange Commission that are incorporated into this Annual Report by reference, if any. The following discussion should be read in conjunction with our consolidated financial statements and notes thereto included in this Annual Report. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this Annual Report may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

You should not place undue reliance on any forward-looking statement, each of which applies only as of the date of this Annual Report. Except as required by law, we undertake no obligation to publicly update any forward-looking statements, whether as the result of new information, future events, or otherwise. You are advised, however, to consult any further disclosures we make on related subjects in our future 10-Q, 8-K, and 10-K reports to the Securities and Exchange Commission. Also note that we include in this Annual Report a cautionary discussion of risks, uncertainties, and assumptions relevant to our business. These are factors that we think could cause our actual results to differ materially from expected and historical results. Other factors besides those listed here could also adversely affect us.

PART I

When used in this Annual Report, the words “anticipate,” “believe,” “expect,” “estimate,” “project,” “intend,” “plan,” and similar expressions are intended to identify forward-looking statements. Such statements are subject to certain risks, uncertainties, and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, believed, expected, estimated, projected, intended, or planned. For additional discussion of such risks, uncertainties, and assumptions, see “Cautionary Note Regarding Forward-Looking Statements” included in the beginning of this Annual Report.

Item 1. Business

Unless otherwise noted, terms such as the “Company,” “GlyEco,” “we,” “us,” “our” and similar terms refer to GlyEco, Inc., a Nevada corporation, and its subsidiaries, unless otherwise specified.

Corporate History

GlyEco, Inc. (“GlyEco” or the “Company”) is a Nevada corporation, with its principal executive offices located at 1620 1^st Avenue South, Nitro, West Virginia 25143. GlyEco was formed in the State of Nevada on October 21, 2011. On that same date, the Company became a wholly-owned subsidiary of Environmental Credits, Inc., a Delaware corporation (“ECVL”). On November 21, 2011, ECVL was merged into its wholly-owned subsidiary, GlyEco (the “Reincorporation”). Upon the consummation of the Reincorporation, the Company was the surviving corporation and the Articles of Incorporation and Bylaws of the Company replaced the Certificate of Incorporation and Bylaws of ECVL.

On November 28, 2011, the Company consummated a reverse triangular merger (the “Merger” or “Transaction”) as a tax-free reorganization within the meaning of Section 368 of the United States Internal Revenue Code of 1986, as amended, pursuant to an Agreement and Plan of Merger, dated November 21, 2011 (the “Merger Agreement”), with GRT Acquisition, Inc., a Nevada corporation and wholly-owned subsidiary of the Company, and Global Recycling Technologies, Ltd., a Delaware corporation and privately-held operating subsidiary (“Global Recycling”). Pursuant to the Merger Agreement, GRT Acquisition, Inc. merged with and into Global Recycling, with Global Recycling being the surviving corporation and which resulted in Global Recycling becoming a wholly-owned subsidiary of the Company.

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 96.9% of Recovery Solutions & Technologies Inc. (“RS&T”), a privately-owned company involved in the development and commercialization of glycol recovery technology. 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 .20% respectively, of RS&T (for a total percentage ownership of 100% of RS&T).

Description of Business Activity

GlyEco, Inc. 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., 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.

Prior to our acquisitions of WEBA, RS&T and the Dow Assets in December 2016, the Company operated in only one business segment, the Consumer segment. Effective as of January 1, 2017, GlyEco conducted its operation in two business segments: the Consumer segment and the Industrial segment. The Consumer segment’s principal business activity was the production and distribution of ASTM (American Society for Testing Materials) grade glycol products, specifically automotive antifreeze and specialty-blended antifreeze, for sale into the automotive and industrial end markets. The Consumer segment operated a full lifecycle business, picking up waste antifreeze and producing finished antifreeze from both recycled and virgin glycol sources. We operated six processing and distribution centers located in the eastern region of the United States. The production capacity of the Consumer segment was approximately 90,000 gallons per month of ready to use (50/50) antifreeze. On January 11, 2019, the Company completed the sale of the assets of its Consumer segment and now retains only the Industrial division. Operations in our Industrial segment are conducted through WEBA and RS&T, two of our subsidiaries. WEBA develops, manufactures and markets additive packages for the antifreeze/coolant, gas patch coolant and heat transfer industries throughout North America. RS&T operates a glycol re-distillation plant in West Virginia that produces virgin quality glycol for sale to industrial customers worldwide. The RS&T facility currently produces antifreeze and industrial grade ethylene glycol. The production capacity of the RS&T facility is approximately 1.5 million gallons per month of concentrated ethylene glycol.

Industrial Division

Our Industrial division consists of two divisions: WEBA, our additives business, and RS&T, our glycol re-distillation plant in West Virginia.

WEBA develops, manufactures and markets additive packages for the antifreeze/coolant, gas patch coolants and heat transfer industries throughout North America. We believe WEBA is one of the largest companies serving the North American additive market. WEBA's METALGUARD® additive package product line includes one-step inhibitor systems, which give our customers the ability to easily make various types of antifreeze concentrate and 50/50 coolants for all automobiles, heavy-duty diesel engines, stationary engines in gas patch and other applications. METALGUARD® additive packages cover the entire range of coolant types from basic green conventional to the newest extended life OAT antifreezes of all colors. Our heat transfer fluid additives allow our customers to make finished heat transfer fluids for most industry applications including all-aluminum systems. The METALGUARD® heat transfer fluids include light and heavy-duty fluids, both propylene and ethylene glycol based, for various operating temperatures. These inhibitors cover the industry standard of phosphate-based inhibitors as well as all-organic (OAT) inhibitors for specific pH range and aluminum system requirements.

All of the METALGUARD® products are tested at our in-house laboratory facility and by third-party laboratories to assure conformance. We use the standards set by the American Society of Testing Materials (“ASTM”) for all of our products. All of our products pass the most current ASTM standards and testing for each type of product. Our manufacturing facility conforms to the highest levels of process quality control including ISO 9001 certification.

RS&T operates a glycol re-distillation plant in West Virginia, which produces virgin quality glycol for sale to industrial customers worldwide. The RS&T facility currently produces antifreeze and industrial grade ethylene glycol. We believe it is one of the largest glycol re-distillation plants in North America, with production capacity of approximately 1.5 million gallons per month of concentrated ethylene glycol. The facility, located at the Dow Institute Site at Institute, West Virginia, includes five distillation columns, three wiped-film evaporators, heat exchangers, processing and storage tanks, and other processing equipment. The facility’s tanks include feedstock storage capacity of several million gallons and finished goods storage capacity of several million gallons. The plant is equipped with rail and truck unloading/loading facilities, and on-site barge loading/unloading facilities.

Our Strategy

We are a vertically integrated specialty chemical company focused on high quality glycol-based products where we can be an efficiency leader, providing value added products as a low-cost manufacturer. To deliver value to all of our stakeholders we: develop and manufacture value-added niche or specialty products which meet or exceed industry standards, provide proactive customer service, effectively manage costs as a low-cost manufacturer, leverage technology and innovation throughout our company.

To effectively deliver on our strategy, we offer a broad spectrum of products in our niches, focus on non-standard innovative products, leverage multiple distribution channels and we are market smart in that we maximize less competitive/under-served markets.

Our manufacturing operations produce high quality products while effectively managing costs. As a vertically integrated company, we manufacture glycol, develop and manufacture additive technologies, and leverage our position in glycols and additives to manufacture finished downstream products as performance fluids.

Our Industry

Background on Glycol

Glycols are man-made liquid chemicals derived from natural gas and crude oil - non-renewable and limited natural resources. Glycols are used as a base chemical component in industries such as:

Automotive - Glycols are used as antifreeze in vehicles and other equipment with a combustion engine.

HVAC - Glycols are in the heat transfer fluids used to warm and cool buildings.

Textiles - Glycols are used as a raw material in the manufacturing of polyester fiber and plastics (e.g. water bottles).

Airline - Glycols are used in aircraft deicing fluid to avoid accumulation of moisture on aircraft wings.

Medical - Glycols are used for equipment sterilization in the medical industry.

There are different types of glycol, including propylene glycol and ethylene glycol. Through the use of our technology and assets, we generally focus on ethylene glycol but can work with any type of glycol. Ethylene glycol is produced in petrochemical plants using the ethane/ethylene extracted from natural gas or cracked from crude oil in refineries. Ethylene is oxidized in these petrochemical plants to ethylene oxide, which is then hydrated to form ethylene glycol.

Glycol and Antifreeze Market

World-wide consumption for ethylene glycol is over 5.5 billion gallons per year. China and the United States are the largest consumers of ethylene glycol (“EG”), with the majority of EG being used in polyester and antifreeze applications. While the growth rate of EG consumption has slowed, demand continues to exceed supply for ethylene glycol, largely because of growth in polyester manufacturing used to make clothing, plastic containers, and plastic beverage bottles. The United States consumes approximately 700 million gallons of EG per year, with over 160 million gallons being used in antifreeze applications.

Glycol-Based Standards

ASTM, OEM and various states have developed guidelines and regulations that govern the quality of virgin and recycled glycol. ASTM is recognized as the independent leader in creating standards for the composition of antifreeze and other glycol-based products. ASTM sets both performance standards (e.g. specifications for engine coolant used in light- and heavy-duty automobiles) and general purity standards. OEMs set particular standards for the individual needs and preferences for the vehicles/equipment they each manufacture.

Competition

We compete in the highly fragmented specialty chemicals industry. We operate in highly competitive markets and face competition in each of our product categories and subcategories. The participants in the industry offer a varied and broad array of product lines designed to meet specific customer requirements. Participants compete with individual and service product offerings on a global, regional and/or local level subject to the nature of the businesses and products, as well as the end-markets and customers served. Competition is based on several key criteria, including product performance and quality, product price, product availability and security of supply, responsiveness of product development in cooperation with customers, customer service, industry knowledge and technical capability. Most key competitors are significantly larger than GlyEco and have greater financial resources, leading to greater operating and financial flexibility.

Competitors include glycol manufacturers (e.g. MEGlobal and Huntsman), antifreeze producers (e.g. Shell, Chevron, and Old World), and antifreeze distributors (e.g. Brenntag and Univar Solutions).

Suppliers

We purchase raw materials, including waste glycol, from multiple sources of supply primarily in the United States.

Seasonality

Our business is affected by seasonal factors, mainly the demand for automotive antifreeze, which can affect our sales volume and the price point. Because the demand for automotive antifreeze is typically higher in winter months, we often see an increase in sales during the first and fourth quarters.

Regulation

Although glycol can be considered a hazardous material, there are few federal rules or regulations governing its characterization, transportation, packaging, processing, or disposal (e.g. handling). Typically any regulations that address such activities occur at either the state and/or county level and can vary significantly from region to region.

As a handler of glycol, we are subject to the requirements of the United States Occupational Safety and Health Act (“OSHA”) and comparable state laws that regulate the protection of employee health and safety. OSHA’s hazard communication standard requires that information about hazardous materials used or produced in our operations be maintained and provided to employees, state and local government authorities and citizens.

We also conduct interstate motor carrier operations that are subject to federal regulation by the Federal Motor Carrier Safety Administration (“FMCSA”), a unit within the United States Department of Transportation, (“USDOT”). The FMCSA publishes and enforces comprehensive trucking safety regulations, including rules on commercial driver licensing, controlled substance testing, medical and other qualifications for drivers, equipment maintenance, and drivers’ hours of service. Another unit within USDOT publishes and enforces regulations regarding the transportation of hazardous materials, but our interstate motor carrier operations are not typically regulated as hazardous materials at this time.

In addition to taking the necessary precautions and maintaining the required permits/licenses, glycol producers generally purchase environmental liability insurance policies to mitigate risks associated with the handling of glycol-based products and other specialty chemicals. We believe we have the appropriate permits, licenses, and insurance policies in place to mitigate risks stemming from the actions of our employees or third parties.

Intellectual Property

On March 15, 2013, we filed a utility patent application for our GlyEco Technology™ processes with the United States Patent and Trademark Office (“USPTO”) claiming priority to the provisional patent application that we filed in August 2012. This utility patent application was approved and issued by the USPTO on September 29, 2015. We maintain and use several service marks including “GlyEcoÒ”, “Innovative Green ChemistryÒ”, “GlyEco CertifiedÒ”, “GlyEco Technology” and “METALGUARD”. In addition, we have developed a website and have registered www.glyeco.com as our domain name, which contains information we do not desire to incorporate by reference herein.

Employees

As of March 29, 2019, we have a total of 19 employees, including 18 full-time employees. We believe that we have good relations with all of our employees.

Item 1A. Risk Factors

As a smaller reporting company, the Company is not required to include disclosure under this Item 1A.

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

We maintain our principal executive offices at 1620 1^St Avenue South, Nitro, West Virginia, 25143. Our telephone number is (304) 400-4100.

Our Industrial division includes our subsidiary, RS&T. RS&T operates our glycol re-distillation plant located in Institute, West Virginia, which processes waste glycol into virgin quality recycled glycol for sale to industrial customers worldwide.

Our Indiana facility leases approximately 10,000 square feet of property located at 3455 E. St. Clair Street, Indianapolis, IN 46201. The monthly base rent for this location is currently $4,500. The lease term expired on December 31, 2018 and the property is currently being rented on a month to month basis until our departure is completed.

Our South Carolina facility leases approximately 7,000 square feet of property located at 230 Gill Way, Rock Hill, SC 29730. The monthly base rent for this location is currently $4,838. The base rent will gradually increase until the lease term expires on October 1, 2023. Our South Carolina facility also leases approximately 3,500 square feet of property located at 1500 Farmer Road, Suite G-1, Conyers, GA 30012. The monthly base rent for this location is currently $1,218. The property is currently being rented on a month to month basis until our departure is completed.

Our Maryland facility leases approximately 12,000 square feet of property located at 8464 Ardwick-Ardmore Road, Landover, MD 20785. The monthly base rent for this location is currently $4,600. The lease term expired on December 31, 2016 and the property is currently being rented on a month to month basis until our departure is completed.

Our Louisiana facility leases approximately 1,380 square feet of property located at 14141 Airline Highway, Building 2, Suite E, Baton Rouge, Louisiana 70817. The monthly base rent for this location is currently $842. The lease term expires on March 31, 2020.

Our West Virginia facility leases approximately 15 acres of property located in Institute, WV. The monthly base rent for this location is currently $12,500. The lease term expires December 27, 2021.

Item 3. Legal Proceedings

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.

Item 4. Mine Safety Disclosures

Not applicable.

PART II

Our common stock is quoted on the OTC Pink Sheets under the symbol “GLYE.”

The following table sets forth, on a per share basis for the periods indicated, the high and low sale prices for the common stock for each fiscal quarter for the two most recent fiscal years as reported by the OTC Pink Sheets. These quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions.

	High		Low
2018
1st Quarter	$	8.75	$	2.50
2nd Quarter	$	7.50	$	2.50
3rd Quarter	$	9.30	$	3.02
4th Quarter	$	4.01	$	1.16

2017
1st Quarter	$	60.00	$	12.50
2nd Quarter	$	17.50	$	7.50
3rd Quarter	$	11.25	$	7.50
4th Quarter	$	11.25	$	6.25

As of March 29, 2019, the closing sale price for our common stock as quoted on the OTC Pink Sheets system was $2.00. As of March 29, 2019, there were 1,383,731 shares of common stock outstanding and approximately 212 shareholders of record for our common stock. This does not include shareholders holding common stock in street name in brokerage accounts.

Transfer Agent

The Company’s transfer agent is Olde Monmouth Stock Transfer Co. Inc. located at 200 Memorial Parkway, Atlantic Highlands, NJ 07716. The transfer agent’s phone number is (732) 872-2727 and its website is www.oldemonmouth.com.

Dividend Policy

We have never paid cash dividends on our common stock, and it is unlikely that we will pay any dividends in the foreseeable future. We currently intend to invest future earnings, if any, to finance expansion of our business. Any payment of cash dividends in the future will be dependent upon our earnings, financial condition, capital requirements, and other factors deemed relevant by our Board of Directors.

Securities Authorized For Issuance under Equity Compensation Plans

Reference is made to “Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters—Equity Compensation Plan Information” for information required by this Item 5.

Recent Sales of Unregistered Securities

The Company issued the following unregistered securities during the fiscal year ended December 31, 2018, some of which were issued pursuant to the Company’s Equity Incentive Program, a program approved by the Company's Board of Directors on December 18, 2014, pursuant to which the Company’s employees can elect to receive equity in lieu of cash for all or part of their salary compensation (the “Equity Incentive Program”):

On January 8, 2018, the Company issued 1,200 shares of common stock to an employee of the Company at a price of $7.50 per share. The shares were issued pursuant to Section 4(a)(2) of the Securities Act because the employees had sufficient sophistication and knowledge of the Company, and the issuance did not involve any form of general solicitation or general advertising. The employee made representations that the shares were taken for investment purposes and not with a view to resale. The shares of common stock issued are restricted.

On March 31, 2018, the Company issued an aggregate of 9,245 shares of common stock to six directors of the Company pursuant to the Company’s Fiscal Year 2017 Director Compensation Plan at a price of $8.13 per share. The shares were issued pursuant to Section 4(a)(2) of the Securities Act because the directors had sufficient sophistication and knowledge of the Company, and the issuance did not involve any form of general solicitation or general advertising. The directors made representations that the shares were taken for investment purposes and not with a view to resale. The shares of common stock issued are restricted.

On July 12, 2018, the Company issued an aggregate of 11,766 shares of common stock to six directors of the Company pursuant to the Company’s Fiscal Year 2017 Director Compensation Plan at a price of $6.38 per share. The shares were issued pursuant to Section 4(a)(2) of the Securities Act because the directors had sufficient sophistication and knowledge of the Company, and the issuance did not involve any form of general solicitation or general advertising. The directors made representations that the shares were taken for investment purposes and not with a view to resale. The shares of common stock issued are restricted.

On July 12, 2018, the Company issued an aggregate of 3,778 shares of common stock to eight employees of the Company pursuant to the Company’s Equity Incentive Program at a price of $5.38 per share. The shares of common stock issued are restricted.

On October 11, 2018, the Company issued an aggregate of 10,344 shares of common stock to six directors of the Company pursuant to the Company’s Fiscal Year 2017 Director Compensation Plan at a price of $7.25 per share. The shares were issued pursuant to Section 4(a)(2) of the Securities Act because the directors had sufficient sophistication and knowledge of the Company, and the issuance did not involve any form of general solicitation or general advertising. The directors made representations that the shares were taken for investment purposes and not with a view to resale. The shares of common stock issued are restricted.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

None.

Item 6. Selected Financial Data

As a smaller reporting company, the Company is not required to include the disclosure required under this Item 6.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis of our results of operations and financial condition for the years ended December 31, 2018 and 2017 with the audited consolidated financial statements and related notes included elsewhere herein. The following discussion and analysis contains forward-looking statements that reflect our plans, estimates and beliefs, and which involve numerous risks and uncertainties. Actual results may differ materially from those contained in any forward-looking statements.

Company Overview

GlyEco, Inc. 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.

On January 11, 2019, the Company completed the Asset Sale of the consumer division to the Purchaser pursuant to the terms of an Asset Purchase Agreement (see Note 10 to our consolidated financial statements included elsewhere in this Annual Report).

Industrial Division

Our Industrial division consists of two divisions: WEBA, our additives business, and RS&T, our glycol re-distillation plant in West Virginia.

Our Strategy

Results of Operations

Year Ended December 31, 2018 Compared to Year Ended December 31, 2017

The information below only constitutes the continuing operations of the company.

Net Sales

For the year ended December 31, 2018, Net Sales were $6,457,484 compared to $5,806,907 for the year ended December 31, 2017, representing an increase of $650,577 or 11%. The increase in Net Sales was due to organic revenue growth.

Cost of Goods Sold

For the year ended December 31, 2018, our Costs of Goods Sold was $5,172,305 compared to $4,921,741 for the year ended December 31, 2017, representing an increase of $250,564, or approximately 5%. The increase in Cost of Goods Sold was primarily due to costs associated with the increase in Net Sales.

Gross Profit

For the year ended December 31, 2018, we realized a gross profit of $1,285,179 compared to a gross profit of $885,166 for the year ended December 31, 2017.

Our gross profit margin for the year ended December 31, 2018 was approximately 20% compared to approximately 15% for the year ended December 31, 2017.

The increase in gross profit margin was due to scaling up West Virginia, maintaining WEBA margin, and selling a small amount of profitable antifreeze from our blending facility.

Operating Expenses

For the year ended December 31, 2018, Operating Expenses decreased to $3,946,139 from $5,154,782 for the year ended December 31, 2017, representing a decrease of $1,208,643, or approximately 23%. Operating Expenses consist of Consulting Fees, Share-Based Compensation, Salaries and Wages, Tank Remediation, Legal and Professional Expenses, and General and Administrative Expenses. Our operating expense ratio for the year ended December 31, 2018 was approximately 61% compared to approximately 89% for the year ended December 31, 2017.

Consulting Fees consist of marketing and administrative fees incurred under consulting agreements. Consulting Fees decreased to $94,292 for the year ended December 31, 2018 from $415,516 for the year ended December 31, 2017, representing a decrease of $321,224, or approximately 77%. The decrease is primarily due to discontinuing use of three outside consultants. In 2017, the Company engaged a recruiting firm to assist with the search for a CFO and two senior sales staff, a full-time accountant to assist with implementation of an ERP system and a marketing firm to assist in a rebranding effort. All three of these services were discontinued in 2018.

Share-Based Compensation consists of stock, options and warrants issued to consultants and employees in consideration for services provided to the Company. Share-Based Compensation decreased to $376,500 for the year ended December 31, 2018 from $523,613 for the year ended December 31, 2017, representing a decrease of $147,113, or 28%. This is due to the decrease in stock grants awarded in 2018.

Salaries and Wages consist of wages and the related taxes. Salaries and Wages increased to $1,931,371 for the year ended December 31, 2018 from $1,617,168 for the year ended December 31, 2017, representing an increase of $314,203 or 19%. The increase is due to three additions to the senior management team that took place in the second half of 2017. The Company onboarded a CFO, EVP of Performance Fluids and EVP of Specialty Chemicals in 2017 which increased the Salaries and Wages expense for 2018.

Legal and Professional Fees consist of legal, accounting, tax and audit services. For the year ended December 31, 2018, Legal and Professional Fees increased to $874,728 from $795,835 for the year ended December 31, 2017, representing an increase of $78,893 or approximately 10%. The increase is primarily related to the legal fees associated with the reverse/forward stock split conducted in July 2018 and the technology consultants utilized in 2018 for the implementation of an ERP system.

Tank remediation expense consists of an accrual from the compliance with West Virginia regulations enacted in 2017, where the Company elected to accrue $780,000 for tank remediation during the year ended December 31, 2017.

General and Administrative (G&A) Expenses consist of general operational costs of our business. For the year ended December 31, 2018, G&A Expenses decreased to $669,248 from $1,022,650 for the year ended December 31, 2017, representing a decrease of $353,402, or approximately 35%. The decrease is due to a larger contingent acquisition reduction in 2018, which offset expenses.

Other Income and Expenses

For the year ended December 31, 2018, Other Income and Expenses was an expense of $778,360 compared to an expense of $808,616 for the year ended December 31, 2017. Other Income and Expenses consist of Interest Expense.

Adjusted EBITDA

Presented below is the non-GAAP financial measure representing earnings before interest, taxes, depreciation, amortization and share-based compensation (which we refer to as “Adjusted EBITDA”). Adjusted EBITDA should be viewed as supplemental to, and not as an alternative for, net income (loss) and cash flows from operations calculated in accordance with GAAP.

Adjusted EBITDA is used by our management as an additional measure of our Company’s performance for purposes of business decision-making, including developing budgets, managing expenditures, and evaluating potential acquisitions or divestitures. Period-to-period comparisons of Adjusted EBITDA help our management identify additional trends in our Company’s financial results that may not be shown solely by period-to-period comparisons of net income (loss) and cash flows from operations. In addition, we may use Adjusted EBITDA in the incentive compensation programs applicable to many of our employees in order to evaluate our Company’s performance. Further, we believe that the presentation of Adjusted EBITDA is useful to investors in their analysis of our results and helps investors make comparisons between our company and other companies that may have different capital structures, different effective income tax rates and tax attributes, different capitalized asset values and/or different forms of employee compensation. Our management recognizes that Adjusted EBITDA has inherent limitations because of the excluded items, particularly those items that are recurring in nature. In order to compensate for those limitations, management also reviews the specific items that are excluded from Adjusted EBITDA, but included in net income (loss), as well as trends in those items. The amounts of those items are set forth, for the applicable periods, in the reconciliations of Adjusted EBITDA to net loss below.

RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA

	As Reported
	Years Ended December 31,
	2018			2017
Net loss from continuing operations	$	(3,452,426	)	$	(5,078,281	)

Interest expense		778,360			662,052
Loss on debt extinguishment		—			146,564
Tank remediation (1)		—			780,000
Provision for income taxes		13,106			49
Depreciation and amortization		719,233			635,056
Share-based compensation		376,500			523,613
Adjusted EBITDA	$	(1,565,227	)	$	(2,330,947	)

(1)	This is an expense related to estimated equipment remediation efforts to comply with new West Virginia regulations.

Liquidity and Capital Resources

We assess our liquidity in terms of our ability to generate cash to fund our operating, investing and financing activities. Significant factors affecting the management of liquidity are cash flows generated from operating activities, capital expenditures, and acquisitions of businesses and technologies. Cash provided from financing continues to be the Company’s primary source of funds. We believe that we can raise adequate funds through the issuance of equity or debt as necessary to continue to support our planned expansion.

Cash Flows

The table below sets forth certain information about the Company’s cash flows for the years ended December 31, 2018 and 2017:

	For the Year Ended
	December 31, 2018			December 31, 2017
Net cash (used in) operating activities from continuing operations	$	(1,073,960	)	$	(2,068,835	)
Net cash provided by operating activities from discontinued operations	$	69,826		$	503,531
Net cash (used in) investing activities from continuing operations	$	(128,433	)	$	(716,787	)
Net cash (used in) investing activities from discontinued operations	$	(43,199	)	$	(147,963	)
Net cash provided by financing activities from continuing operations	$	1,359,786		$	1,121,539
Net cash (used in) financing activities from continuing operations	$	(64,316	)	$	(64,092	)
Net increase (decrease) in cash	$	119,704		$	(1,372,607	)
Cash and restricted cash - beginning of year	$	117,944		$	1,490,551
Cash and restricted cash - end of year	$	237,648		$	117,944

For the year ended December 31, 2018 and 2017, net cash used in operating activities from continuing operations was $1,073,960 and $2,068,835, respectively. The decrease in cash used in operating activities is due to the significant period over period changes in accounts receivables, inventories and accounts payable and accrued expenses.

For the year ended December 31, 2018, the Company used $128,433 in cash for investing activities from continued operations compared to the $716,787 used in the year ended December 31, 2017. These amounts were comprised primarily of capital expenditures for equipment.

For the years ended December 31, 2018 and 2017, we received $1,395,786 and $1,121,539, respectively, in cash from financing activities. The amount of cash received in 2018 is primarily comprised of proceeds from the 10% unsecured notes. The amount of cash received in 2017 is primarily comprised of proceeds from the exercise of warrants and proceeds from a sale-leaseback, partially offset by the repayment of debt, including the 5% Notes, as well as proceeds from our August 2017 rights offering.

As of December 31, 2018, we had $828,946 in current assets, consisting primarily of $237,648 in cash, $215,336 in accounts receivable and $238,895 in inventory.

As of December 31, 2018, we had total current liabilities of $6,509,831, consisting primarily of accounts payable and accrued expenses of $2,845,856. As of December 31, 2018, we had total non-current liabilities of $3,533,736, consisting primarily of the non-current portion of our notes payable and capital lease obligations.

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 Annual Report on Form 10-K has been retroactively adjusted to reflect the reverse stock split.

Going Concern and Liquidity

The accompanying consolidated financial statements included elsewhere in this Annual Report have been prepared assuming that the Company will continue as a going concern. As of December 31, 2018, 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 and to ultimately achieve profitable operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern for a period of at least one year from the date of filing of this Annual Report.

In their report dated April 1, 2019 with respect to our consolidated financial statements for the years ended December 31, 2018 and 2017, KMJ Corbin & Company LLP, our independent registered public accounting firm, expressed substantial doubt about our ability to continue as a going concern as a result of our recurring losses from operations and our dependence on our ability to raise capital, among other factors.

Our plans to address these matters include achieving profitable operations and raising additional financing through private and/or public offerings of our equity securities and through debt financing if available and needed. We plan to achieve profitable operations through the implementation of operating efficiencies at our facility and increased revenue through the offering of additional products. There can be no assurances, however, that the Company will be able to achieve profitable operations or be able to obtain any financings or that such financings will be sufficient to sustain our business operations or permit the Company to implement our intended business strategy.

Financing Events

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 is scheduled to mature on May 4, 2019.

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 is scheduled to mature on May 9, 2019.

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 is scheduled to mature on May 6, 2019.

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.

Off-balance Sheet Arrangements

In the year ended December 31, 2018, the Company did not enter into any off-balance sheet arrangements.

Critical Accounting Policies

We have identified in the consolidated financial statements contained herein certain critical accounting policies that affect the more significant judgments and estimates used in the preparation of the consolidated financial statements. Our discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP. The preparation of our consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue, expenses, and related disclosure of contingent assets and liabilities. Management reviews with the Audit Committee the selection, application and disclosure of critical accounting policies. On an ongoing basis, we evaluate our estimates, including those related to areas that require a significant level of judgment or are otherwise subject to an inherent degree o uncertainty. These areas include going concern, collectability of accounts receivable, inventory, impairment of goodwill, carrying amounts and useful lives of intangible assets, fair value of assets acquired and liabilities assumed in business combinations, stock-based compensation expense, and deferred taxes. We base our estimates on historical experience, our observance of trends in particular areas, and information or valuations and various other assumptions that we believe to be reasonable under the circumstances and which form the basis for making judgments about the carrying value of assets and liabilities that may not be readily apparent from other sources. Actual amounts could differ significantly from amounts previously estimated.

We believe that of our significant accounting policies, the following may involve a higher degree of judgment and complexity:

Revenue Recognition

The Company’s significant accounting policy for revenue was updated as a result of the adoption of Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”) and the associated ASU’s (collectively “Topic 606”) in the first quarter of 2018.

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 for the arrangements that the Company determines are within the scope of Topic 606, 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 entity satisfies a performance obligation.

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 table below:

Net Trade Revenue by Principal Product Group

	Year Ended December 31, 2018

Antifreeze	$	59,385
Ethylene Glycol		3,836,415
Additive		2,561,684
Total	$	6,457,484

Net Trade Revenue by Geographic Region

	Year Ended December 31, 2018

US	$	4,829,287
Canada		1,579,643
China		26,472
India		16,112
Chile		3,317
UAE		2,653
Total	$	6,457,484

Collectability of 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 consolidated statements of operations. The allowance for doubtful accounts totaled $6,427 and $103,027 as of December 31, 2018 and 2017, 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.

Impairment of Long-Lived Assets

Property, plant and equipment, purchased intangibles subject to amortization and patents and trademarks, 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 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 would be presented separately in the appropriate asset and liability sections of the consolidated balance sheet, if material.

Goodwill and Other Intangibles

We account for an acquisition of a business, as defined in Accounting Standards Codification (“ASC”) Topic 805 “Business Combinations”, as required by an analysis of the inputs, processes and outputs associated with the transaction. Intangible assets that we acquire are recognized separately if they arise from contractual or other legal rights or if they are separable and are recorded at fair value less accumulated amortization. We analyze intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. We review the amortization method and period at least at each balance sheet date. The effects of any revision are recorded to operations when the change arises. We recognize impairment when the estimated undiscounted cash flows generated by those assets is less than the carrying amounts of such assets. The amount of impairment is the excess of the carrying amount over the fair value of such assets.

Goodwill is recorded as the excess of (i) the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition date fair value of any previous equity interest in the acquired entity over the (ii) fair value of the net identifiable assets acquired. We do not amortize goodwill; however, we annually, or whenever there is an indication that goodwill may be impaired, evaluate qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step quantitative goodwill impairment test. The Company measures the carrying amount of the asset against the estimated undiscounted future cash flows associated with it. Should the sum of the expected future net cash flows be less than the carrying value of the asset being evaluated, an impairment loss would be recognized. The impairment loss would be calculated as the amount by which the carrying value of the assets exceeds fair value. Any future increases in fair value would not result in an adjustment to the impairment loss that may be recorded in our consolidated financial statements. Our test of goodwill impairment includes assessing qualitative factors and the use of judgment in evaluating economic conditions, industry and market conditions, cost factors, and entity-specific events, as well as overall financial performance. Based on our analysis, no impairment loss of goodwill was recorded in 2018 and 2017 as the carrying amount of the reporting unit’s assets did not exceed the estimated fair value determined.

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 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 are also recorded as a reduction to the debt balance and accreted over the expected term of the debt to interest expense using the effective interest method.

Share-based Compensation

All share-based payments to employees and non-employee directors, including grants of employee stock options, are expensed based on their estimated fair values at the grant date, in accordance with ASC 718 "Compensation-Stock Compensation”. Compensation expense for share-based payments to employees and directors 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.

Non-employee share-based compensation is accounted for based on the fair value of the related stock or options, using the BSM, or the fair value of the goods or services on the measurement date, whichever is more readily determinable.

Income Taxes

The Company accounts for its income taxes in accordance with ASC 740, “Income Taxes,” which requires recognition of deferred tax assets and liabilities for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date. An allowance for the deferred tax asset is established if it is more likely than not that the asset will not be realized.

Contingencies

Litigation

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 relates 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

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 and $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. Other than as disclosed above with respect to an adverse result regarding the Company’s obligations to address certain environmental clean-up matters at the former New Jersey processing and distribution center, 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 an 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 had accrued $780,000 for tank remediation for the year ended December 31, 2017. 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.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

As a smaller reporting company, we are not required to provide the information required by this Item 7A.

Item 8. Financial Statements and Supplementary Data

Immediately following are our audited consolidated financial statements and notes as of and for the years ended December 31, 2018 and 2017.

	Page
Report of Independent Registered Public Accounting Firm	22

Consolidated Balance Sheets	23

Consolidated Statements of Operations	24

Consolidated Statements of Changes in Stockholders’ Equity (Deficit)	25

Consolidated Statements of Cash Flows	26

Notes to Consolidated Financial Statements	27

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of Glyeco, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of GlyEco, Inc. and subsidiaries (the “Company”) as of December 31, 2018 and 2017, the related consolidated statements of operations, changes in stockholders’ equity (deficit), and cash flows for each of the two years in the period ended December 31, 2018, and the related notes (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2018 and 2017, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2018, in conformity with accounting principles generally accepted in the United States of America.

Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has experienced recurring losses from operations, has negative operating cash flows during the year ended December 31, 2018, has an accumulated deficit of $47,310,534 as of December 31, 2018 and is dependent on its ability to raise capital. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management's plans in regard to these factors are also described in Note 1. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ KMJ Corbin & Company LLP

We have served as the Company’s auditor since 2015.

Costa Mesa, California
April 1, 2019

GLYECO, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

December 31, 2018 and 2017

	December 31,			December 31,
	2018			2017

ASSETS
Current Assets
Cash	$	237,648		$	111,302
Cash – restricted		-			6,642
Accounts receivable, net		215,336			731,439
Prepaid expenses		137,067			336,648
Inventories		238,895			270,409
Current assets from discontinued operations		1,760,100			1,132,956
Total current assets		2,589,046			2,589,396

Property, plant and equipment, net		2,562,618			2,478,380

Other Assets
Deposits		49,081			396,646
Goodwill		2,937,288			2,937,288
Other intangible assets, net		1,721,000			2,146,279
Noncurrent assets from discontinued operations		-			2,465,045
Total other assets		4,707,369			7,945,258

Total assets	$	9,859,033		$	13,013,034

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

Current Liabilities
Accounts payable and accrued expenses	$	2,845,856		$	2,446,693
Customer deposits		274,103			-
Contingent acquisition consideration		815,670			1,509,755
Notes payable – current portion, net of debt discount		2,080,071			232,267
Capital lease obligations – current portion		494,131			377,220
Current liabilities from discontinued operations		586,019			539,980
Total current liabilities		7,095,850			5,105,915

Non-Current Liabilities
Notes payable – non current portion		2,783,744			2,779,126
Capital lease obligations – non current portion		749,992			1,085,985
Noncurrent liabilities from discontinued operations		-			174,505
Total non-current liabilities		3,533,736			4,039,616

Total liabilities		10,629,586			9,145,531

Commitments and Contingencies

Stockholders’ Equity (Deficit)
Preferred stock: 40,000,000 shares authorized; $0.0001 par value; no shares issued and outstanding as of December 31, 2018 and 2017		-			-
Common stock: 300,000,000 shares authorized; $0.0001 par value; 1,358,597 and 1,322,264 shares issued and outstanding as of December 31, 2018 and 2017, respectively		136			132
Additional paid-in capital		46,539,845			45,863,969
Accumulated deficit		(47,310,534	)		(41,996,598	)
Total stockholders’ equity (deficit)		(770,553	)		3,867,503

Total liabilities and stockholders’ equity (deficit)	$	9,859,033		$	13,013,034

See accompanying notes to the consolidated financial statements.

GLYECO, INC. AND SUBSIDIARIES

Consolidated Statements of Operations

For the years ended December 31, 2018 and 2017

	Years Ended December 31,
	2018			2017

Net sales	$	6,457,484		$	5,806,907
Cost of goods sold		5,172,305			4,921,741
Gross profit		1,285,179			885,166

Operating expenses:
Consulting fees		94,292			415,516
Share-based compensation		376,500			523,613
Salaries and wages		1,931,371			1,617,168
Legal and professional		874,728			795,835
Tank remediation		-			780,000
General and administrative		669,248			1,022,650
Total operating expenses		3,946,139			5,154,782

Loss from operations		(2,660,960	)		(4,269,616	)

Other expenses:
Loss on debt extinguishment		-			146,564
Interest expense		778,360			662,052
Total other expense, net		778,360			808,616

Loss from continuing operations before provision for income taxes		(3,439,320	)		(5,078,232	)

Provision for income taxes		13,106			49

Net loss from continuing operations		(3,452,426	)		(5,078,281	)

Loss from discontinued operations, net of income taxes		(1,861,510	)		(103,254	)

Net loss	$	(5,313,936	)	$	(5,181,535	)

Basic and diluted loss per share from continuing operations	$	(2.58	)	$	(4.46	)
Basic and diluted loss per share from discontinued operations	$	(1.39	)	$	(0.09	)
Basic and diluted loss per share	$	(3.97	)	$	(4.55	)
Weighted average number of common shares outstanding- basic and diluted		1,339,238			1,137,696

See accompanying notes to the consolidated financial statements.

GLYECO, INC. AND SUBSIDIARIES

Consolidated Statements of Changes in Stockholders’ Equity (Deficit)

For the years ended December 31, 2018 and 2017

					Additional					Total
	Common Stock				Paid -In		Accumulated			Stockholders’
	Shares		Par Value		Capital		Deficit			Equity (Deficit)

Balance, December 31, 2016		1,009,210	$	101	$	42,616,005	$	(36,815,063	)	$	5,801,043

Offering of common shares, net		66,593		7		541,772		-			541,779

Share-based compensation		28,201		3		523,610		-			523,613

Notes payable and accrued interest converted into common stock in connection with rights offering		162,474		16		1,624,727		-			1,624,743

Notes payable and accrued interest converted into common stock		22,036		2		220,358		-			220,360

Exercise of warrants		33,750		3		337,497		-			337,500

Net loss		-		-		-		(5,181,535	)		(5,181,535	)

Balance, December 31, 2017		1,322,264		132		45,863,969		(41,996,598	)		3,867,503


Share-based compensation		32,555		4		376,496		-			376,500

Common stock issued under ESPP		3,778		-		20,326		-			20,326

Relative fair value of warrants issued in connection with notes payable		-		-		279,054		-			279,054

Net loss		-		-		-		(5,313,936	)		(5,313,936	)

Balance, December 31, 2018		1,358,597	$	136	$	46,539,845	$	(47,310,534	)	$	(770,553	)

See accompanying notes to the consolidated financial statements.

GLYECO, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the years ended December 31, 2018 and 2017

	Years Ended December 31,
	2018			2017

Cash flows from operating activities
Net loss from continuing operations	$	(3,452,426	)	$	(5,078,281	)

Adjustments to reconcile net loss from continuing operations to net cash used in operating activities:
Depreciation		293,954			206,335
Amortization		425,279			428,721
Share-based compensation expense		376,500			523,613
Amortization of debt discount		216,554			205,180
Loss on debt extinguishment		-			146,564
Gain on reversal of contingent acquisition consideration		(687,443	)		(241,910	)
(Recoveries on) provision for bad debt		(34,836	)		49,358
Loss on disposal of equipment		718			-
Changes in operating assets and liabilities:
Accounts receivable		550,939			(519,346	)
Prepaid expenses		97,389			292,220
Inventories		118,581			85,702
Deposits		347,565			(44,720	)
Accounts payable and accrued expenses		673,266			1,883,920
Due to related parties		-			(6,191	)
Net cash used in operating activities from continued operations		(1,073,960	)		(2,068,835	)
Net cash provided by operating activities from discontinued operations		69,826			503,531
Net cash used in operating activities		(1,004,134	)		(1,565,304	)

Cash flows from investing activities
Cash paid for noncontrolling interest in RS&T		-			(129,500	)
Purchases of property, plant and equipment		(128,433	)		(587,287	)
Net cash used in investing activities from continuing operations		(128,433	)		(716,787	)
Net cash used in investing activities from discontinued operations		(43,199	)		(147,963	)
Net cash used in investing activities		(171,632	)		(864,750	)

Cash flows from financing activities
Repayment of notes payable		(304,310	)		(1,140,826	)
Repayment of capital lease obligations		(428,345	)		(247,004	)
Payment of contingent acquisition consideration		(6,642	)		(69,910	)
Proceeds from sale-leaseback		-			1,700,000
Proceeds from exercise of warrants		-			337,500
Proceeds from issuance of notes payable		2,100,000			-
Purchase of ESPP shares		20,326			-
Payments of debt issuance costs		(21,243	)		-
Proceeds from the sale of common stock, net		-			541,779
Net cash provided by financing activities from continuing operations		1,359,786			1,121,539
Net cash used in financing activities from discontinued operations		(64,316	)		(64,092	)
Net cash provided by financing activities		1,295,470			1,057,447

Net change in cash and restricted cash		119,704			(1,372,607	)
Cash and restricted cash at beginning of the year		117,944			1,490,551

Cash and restricted cash at end of the year	$	237,648		$	117,944

Supplemental disclosure of cash flow information
Interest paid during the year	$	349,903		$	182,142
Income taxes paid during the year	$	19,716		$	14,921

Reconciliation of cash and restricted cash at end of period:
Cash	$	237,648		$	111,302
Restricted cash		—			6,642
	$	237,648		$	117,944

Supplemental disclosure of non-cash investing and financing activities
Acquisition of equipment with notes payable	$	74,600		$	116,655
Acquisition of equipment with capital lease obligations	$	196,712		$	1,700,000
Acquisition of equipment with capital lease obligation from discontinued operations	$	12,551		$	-
Notes payable issued for insurance premium	$	65,875		$	242,866
Notes payable and accrued interest converted into shares of common stock	$	-		$	1,845,103
Relative fair value of warrants in connection with notes payable	$	279,054		$	-
Transfer of inventories to property, plant and equipment	$	81,000		$	-

See accompanying notes to the consolidated financial statements.

GLYECO, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2018 and 2017

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.

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. 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).

The Company was formed in the State of Nevada on October 21, 2011.

We are currently comprised of the parent corporation GlyEco, Inc., WEBA, and RS&T. In January 2019, the Company completed the sale of processing and distribution centers related to our consumer segment (see Note 10).

Going Concern

The consolidated financial statements as of and for the year ended December 31, 2018 have been prepared assuming that the Company will continue as a going concern. The Company has experienced recurring losses from operations, has negative operating cash flows during the year ended December 31, 2018, has an accumulated deficit of $47,310,534 as of December 31, 2018 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 consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.

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 was fixed at 1-for-500 and the ratio for the forward stock split was fixed at 4-for-1, resulting in a net reverse split of 125-for-1. All share and per share information in this Annual Report on Form 10-K has been retroactively adjusted to reflect the reverse stock split.

NOTE 2 – Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation

The accompanying 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 Securities and Exchange Commission (the “SEC”).

Principles of Consolidation

These consolidated financial statements include the accounts of GlyEco, Inc., 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 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.

(3)

Each component of other comprehensive income or loss

There were no noncontrolling interests as of December 31, 2018 and noncontrolling interests were not significant as of December 31, 2017.

Operating Segments

As a result of the sale of the consumer assets, 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, 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, valuation of deferred tax assets 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

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, which are expensed as incurred and are included in operating expenses, were insignificant in the years ended December 31, 2018 and 2017. Advertising costs are expensed as incurred.

Accounts Receivable

Inventories

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

Goodwill and Other Intangible Assets

We account for an acquisition of a business, as defined in Accounting Standards Codification (“ASC”) Topic 805 “Business Combinations”, as required by an analysis of the inputs, processes and outputs associated with the transaction. Intangible assets that we acquire are recognized separately if they arise from contractual or other legal rights or if they are separable and are recorded at fair value less accumulated amortization. We analyze intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. We review the amortization method and period at least at each balance sheet date. The effects of any revisions are recorded in operations when the change arises. We recognize impairment when the estimated undiscounted cash flows generated by those assets is less than the carrying amounts of such assets. The amount of impairment is the excess of the carrying amount over the fair value of such assets.

Impairment of Long-Lived Assets

Fair Value of Financial Instruments

The Company has adopted the framework for measuring fair value that establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and lowest priority to unobservable inputs (Level 3 measurements).

The three levels of inputs that may be used to measure fair value are as follows:

●

Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date;

●

Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data; and

●

Level 3: Significant unobservable inputs that reflect a reporting entity’s own assumptions that market participants would use in pricing an asset or liability. Valuation is generated from model-based techniques with the unobservable assumptions reflecting our own estimate of assumptions that market participants would use in pricing the asset or liability.

Cash and restricted cash, accounts receivable, accounts payable and accrued expenses, amounts due to and from related parties and current portion of capital lease obligations and notes payable are reflected in the consolidated balance sheets at their estimated fair values primarily due to their short-term nature. As to long-term capital lease obligations and notes payable, estimated fair values are based on borrowing rates currently available to the Company for loans with similar terms and maturities.

The Company classifies its contingent acquisition consideration liability in connection with the acquisition of WEBA within the Level 3 category, as factors used to develop the estimated fair value are unobservable inputs that are not supported by market activity. At the time of the acquisition, the Company estimated the fair value of the contingent consideration liability, which consisted of revenue and net income based milestones, using assumptions including estimated revenues (based on internal budgets and long-range strategic plans), discount rates, probability of payment and projected payment dates. Any change in these assumptions could result in a significantly higher (lower) fair value measurement. The fair value of the contingent consideration is remeasured each reporting period. During the fourth quarter of 2018 and 2017, the Company reversed $687,443 and $241,910, respectively, of the contingent consideration liability since the 2018 and 2017 milestones were not met. There were no other changes to the estimated fair value of the contingent acquisition consideration liability during the years ended December 31, 2018 and 2017.

Changes in our contingent acquisition consideration liability were as follows:

	Total
Balance as of December 31, 2016	$	(1,745,023	)
Gain on reversal of contingent acquisition consideration		241,910
Balance as of December 31, 2017		(1,503,113	)
Gain on reversal of contingent acquisition consideration		687,443
Balance as of December 31, 2018	$	(815,670	)

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 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 common share is computed by dividing the net loss available to common shareholders by the weighted average number of common shares outstanding during a period. Diluted loss per common share is computed by dividing the net loss available to common shareholders by the weighted average number of common shares outstanding plus potentially dilutive securities. The Company’s potentially dilutive securities outstanding are not shown in a diluted net loss per share calculation because their effect in both 2018 and 2017 would be anti-dilutive. At December 31, 2018, 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 December 31, 2017, these potentially dilutive securities included warrants to purchase 42,485 shares of common stock and stock options to purchase 27,101 shares of common stock for a total of 69,586 shares of common stock.

Income Taxes

Share-based Compensation

Discontinued Operations

Our consumer segment, which was sold subsequent to year end, was classified as discontinued operations in the consolidated balance sheets at December 31, 2018 and in the 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 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 the first quarter of 2018, the Company adopted ASU 2014-09, which is the new comprehensive revenue recognition standard that supersedes the revenue recognition requirements in Topic 605, “Revenue Recognition,” and most industry specific guidance. The core principle of ASU 2014-09 is that a company will recognize revenue when it transfers promised goods or services to a customer in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In 2015 and 2016, FASB issued additional ASUs related to Topic 606 that delayed the effective date of ASU 2014-09 and clarified various aspects of the new revenue guidance, including principal versus agent considerations, identification of performance obligations, and accounting for licenses, and included other improvements and practical expedients. ASU 2014-09 was effective for annual and interim periods beginning after December 15, 2017. The Company elected to adopt ASU 2014-09 using the modified retrospective transition method for all contracts not completed as of the date of adoption. The adoption of the new guidance did not have a material impact on the consolidated financial statements. See “Revenue Recognition” in Note 3 for additional disclosures regarding the Company’s revenue recognition policies and contracts with customers.

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. While the Company is still evaluating ASU 2016-02, the Company expects the adoption of ASU 2016-02 will not have a material effect on the Company’s consolidated financial condition due to the recognition of the lease rights and obligations as assets and liabilities. Lessees must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. Lessees may not apply a full retrospective transition approach. The new lease standard will be effective for us in the first quarter of 2019 as we adopt the modified retrospective approach. Based on the sale of the consumer segment, we do expect the adoption to have a material impact on the consolidated financial statements.

In August 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows: Classification Restricted Cash”, which requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The Company adopted this standard in the first quarter of 2018 by using the retrospective transition method, which required the following disclosures and changes to the presentation of its consolidated financial statements: cash and restricted cash reported on the consolidated statements of cash flows now includes restricted cash of $6,642 and $76,552 as of December 31, 2017 and 2016, respectively.

NOTE 3 – Revenue

Revenue Recognition

All of the Company’s revenue is derived from product sales. As of January 1, 2018, the Company accounts for revenue in accordance with ASU 2014-09.

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.

Disaggregation of Revenue

Net Trade Revenue by Principal Product Group

	Year Ended December 31, 2018

Antifreeze	$	59,385
Ethylene Glycol		3,836,415
Additive		2,561,684
Total	$	6,457,484

Net Trade Revenue by Geographic Region

	Year Ended December 31, 2018

US	$	4,829,287
Canada		1,579,643
China		26,472
India		16,112
Chile		3,317
UAE		2,653
Total	$	6,457,484

Contract Balances

Accounts receivable are recorded when the right to consideration becomes unconditional. The Company does not have any contract assets as of December 31, 2018 and 2017. The Company has utilized the practical expedient which enables the Company to expense 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 December 31, 2018 and 2017, the Company had $274,103 and $0, respectively, in customer deposits.

NOTE 4 – Inventories

As of December 31, 2018 and 2017, the Company’s total inventories were as follows:

December 31,	2018		2017
Raw materials	$	157,031	$	119,906
Work in process		-		-
Finished goods		81,864		150,503
Total inventories	$	238,895	$	270,409

NOTE 5 – Property, Plant and Equipment

As of December 31, 2018 and 2017, the property, plant and equipment, net of accumulated depreciation, is as follows:

December 31,	2018			2017
Machinery and equipment	$	2,694,528		$	2,353,778
Leasehold improvements		305,772			216,650
Accumulated depreciation		(522,160	)		(225,121	)
		2,478,140			2,345,307
Construction in process		84,478			133,073
Total property, plant and equipment	$	2,562,618		$	2,478,380

Depreciation expense recorded during the years ended December 31, 2018 and 2017 was $293,954 and $206,335, respectively.

NOTE 6 – Goodwill and Other Intangible Assets

The components of goodwill and other intangible assets are as follows:

	Estimated Useful Life	Gross Balance at December 31, 2017		Accumulated Amortization			Net Balance at December 31, 2017		Gross Balance at December 31, 2018		Accumulated Amortization			Net Balance at December 31, 2018
Finite live intangible assets:
Customer list and tradename	5 years	$	881,000	$	(177,921	)	$	703,079	$	881,000	$	(352,400	)	$	528,600

Non-compete agreements	5 years		814,000		(162,800	)		651,200		814,000		(325,600	)		488,400

Intellectual property	10 years		880,000		(88,000	)		792,000		880,000		(176,000	)		704,000

Total intangible assets		$	2,575,000	$	(428,721	)	$	2,146,279	$	2,575,000	$	(854,000	)	$	1,721,000

Goodwill	Indefinite	$	2,937,288	$	-		$	2,937,288	$	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.

Aggregate amortization expense included in general and administrative expenses for the years ended December 31, 2018 and 2017 totaled $425,279 and $428,721, respectively. The following table represents the total estimated amortization of intangible assets for future years:

For the Year Ending December 31,	Estimated Amortization Expense

2019	$	427,000
2020		427,000
2021		427,000
2022		88,000
2023		88,000
Thereafter		264,000
	$	1,721,000

NOTE 7 – Income Taxes

For the years ended December 31, 2018 and 2017, there was a provision for income taxes of $13,106 and $49, respectively. The Company’s income tax expense as of December 31, 2018 and 2017 include the expected state income taxes for the states in which our subsidiaries operate. There is no provision for federal income taxes because we have historically incurred net operating losses, and we maintain a full valuation allowance against our net deferred tax asset.

The provision for income taxes is as follows for the years ended December 31, 2018 and 2017:

	Year Ended December 31,
	2018		2017
Income tax expense at statutory federal rate
Current:
Federal	$	-	$	-
State		13,106		49
Total current		13,106		49
Deferred:
Federal		-		-
State		-		-
Change in valuation allowance		-		-
Total deferred		-		-
Provision for income taxes	$	13,106	$	49

The differences between our effective income tax rate and the U.S. federal income tax rate for the years ended December 31, 2018 and 2017 are:

	2018			2017
Expected income tax provision at the federal statutory rate		21.00	%		34.0	%
Loss on debt extinguishment		-			0.98	%
Change in contingent liability		4.20	%		1.62	%
Impact of the change in the federal corporate rate		-			(81.79	)%
Adjustment for forfeiture of non-qualified stock options		(0.16	)%		(5.69	)%
Other		(6.93	)%		(0.13	)%
Release of valuation allowance		(18.48	)%		51.02	%
Effective tax rate		(0.38	)%		0.00	%

As of December 31, 2018 and 2017, the Company had net operating loss (NOL) carryforwards of approximately $39,766,346 and $34,491,076, respectively. The federal tax loss carryforward of $4,517,054 does not expire and are subject to 80% limitation due to the tax law change of 2017. The remaining federal tax loss carryforwards of $35,249,292 and state tax loss carryforwards begin to expire in 2027 and 2032, respectively, unless previously utilized. Because management is unable to determine that it is more likely than not that the Company will realize the tax benefit related to the NOL carryforward, by having taxable income, a valuation allowance has been established as of December 31, 2018 and 2017 to reduce the tax benefit asset value to zero.

The deferred tax assets, including a valuation allowance, are as follows at December 31:

	Year Ended December 31,
	2018			2017
Deferred tax assets:

Net operating loss carryforwards	$	9,789,000		$	8,997,000
Stock compensation		253,000			243,000
Reserves and accruals		491,000			241,000
Deferred tax asset (DTA)		10,533,000			9,481,000
Basis difference in intangibles and fixed assets		(422,000	)		(603,000	)
Deferred tax liability (DTL)		(422,000	)		(603,000	)
Net operating loss		10,111,000			8,878,000
Valuation allowance		(10,111,000	)		(8,878,000	)
Net current deferred tax assets	$	-		$	-

The change in the valuation allowance for deferred tax assets for the years ended December 31, 2018 and 2017 was $(1,233,000) and $2,988,000, respectively. In assessing the recovery of the deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income in the periods in which those temporary differences become deductible. Management considers the scheduled reversals of future deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. As a result, management determined it was more likely than not the deferred tax assets would not be realized as of December 31, 2018 and 2017, and recorded a full valuation allowance.

Pursuant to Section 382 of the Internal Revenue Code of 1986, the annual utilization of a company's net operating loss carryforwards could be limited if the Company experiences a change in ownership of more than 50 percentage points within a three-year period. An ownership change occurs with respect to a corporation if it is a loss corporation on a testing date and, immediately after the close of the testing date, the percentage of stock of the corporation owned by one or more five-percent shareholders has increased by more than 50 percentage points over the lowest percentage of stock of such corporation owned by such shareholders at any time during the testing period. The Company has not performed an analysis to determine if any ownership changes have occurred that may limit the use of the Company’s loss carryforwards.

The Company applies the provisions of ASC 740 related to accounting for uncertain tax positions and concluded there were no significant tax positions associated with the Company requiring accrual of a liability. As of December 31, 2018, the Company has not accrued for any such positions. The Company is currently not under audit for federal or state tax purposes. The Company does not expect a significant change to occur within the next 12 months.

On December 22, 2017, the President of the United States signed into law the Tax Cuts and Jobs Act which, among a broad range of tax reform measures, reduced the U.S. corporate tax rate from 35% to a flat 21% effective January 1, 2018. The reduction in the U.S. corporate tax rate required the Company to remeasure the federal portion of deferred tax assets and liabilities at December 31, 2017 to the enacted tax rate expected to apply when the temporary differences are to be realized. The Company provisionally recorded $4.2 million of expense related, offset by a full valuation allowance, for the remeasurement of its deferred tax assets and liabilities. As of December 31, 2018, the Company completed its accounting for the tax effects of the enactment of the 2017 Act which resulted in immaterial adjustments to provisional estimates, offset by a full valuation allowance.

NOTE 8 – Notes Payable

Notes payable consist of the following:

	December 31, 2018			December 31, 2017
2018 Related Party 10% Unsecured Notes, net of debt discount of $83,743	$	2,016,257		$	—
2018 Secured Note		68,431			—
2017 Secured Note		81,659			104,990
2018 and 2017 Unsecured Note		—			188,060
2016 Secured Notes		47,468			68,343
2016 WEBA Seller Notes		2,650,000			2,650,000
Total notes payable		4,863,815			3,011,393
Less current portion		(2,080,071	)		(232,267	)
Long-term portion of notes payable	$	2,783,744		$	2,779,126

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 a subscription agreement. The 10% Notes bear interest at a rate of 10% per annum, and is due on the maturity date or as otherwise specified by the 10% Notes. The Warrants have an exercise price per share of $6.25, are immediately exercisable and expire on April 6, 2021.

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 is scheduled to mature on May 4, 2019.

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 is scheduled to mature on May 9, 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 is scheduled to mature on May 6, 2019.

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

2018 Secured Note

In September 2018, the Company entered into a secured promissory note with MHC Financial (the “2018 Secured Note”). The 2018 Secured Note is collateralized by a vehicle. The key terms of the 2018 Secured Note includes: (i) an original principal balance of $74,600, (ii) interest rate of 8.74%, and (iii) term of 3.5 years.

2018 and 2017 Unsecured Note

In October 2017, and later amended in January 2018, the Company entered into an unsecured note with Bank Direct to finance its insurance premiums (the “2018 and 2017 Unsecured Note”). The key terms of the 2018 and 2017 Unsecured Note include: (i) an original principal balance of $242,866, (ii) an interest rate of 5.4%, and (iii) a term of ten months. This loan has been paid in full.

2017 Secured Note

In July 2017, the Company entered into a secured promissory note with PACCAR Financial (the “2017 Secured Note”). The 2017 Secured Note is collateralized by vehicles. The key terms of the 2017 Secured Note includes: (i) an original principal balance of $116,655, (ii) interest rate of 7.95%, and (iii) a term of 5 years.

2016 Secured Notes

In January and April 2016, the Company entered into secured promissory notes with Ascentium Capital. In July and September 2016, the Company entered into secured promissory notes with PACCAR Financial. In November 2016, the Company entered into secured promissory notes with MHC Financial Services, Inc. (collectively, the “2016 Secured Notes”). The key terms of the 2016 Secured Notes include: (i) an aggregate original principal balance of $437,000, (ii) interest rates ranging from 4.0% to 9.0%, and (iii) terms of 4-5 years. The 2016 Secured Notes are collateralized by vehicles and equipment.

WEBA Seller Notes

In connection with the WEBA acquisition, the Company issued $2.65 million in 8% promissory notes (“Seller Notes”). The Seller Notes mature on December 27, 2021. The Seller Notes bear interest at a rate of 8% per annum payable on a quarterly basis in arrears. The Seller Notes contain standard default provisions, including: (i) failure to repay the Seller Note when it is due at maturity; (ii) failure to pay any interest payment when due; (iii) failure to deliver financial statements on time; and (iv) other standard events of default.

NOTE 9 – 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 December 31, 2018 and 2017, the Company had no shares of preferred stock outstanding.

Common Stock

As of December 31, 2018, the Company has 1,358,597 shares of common stock, par value $0.0001, 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 to shareholders, and to share pro rata in all dividends payable on common stock after payment of dividends on any shares of preferred stock having preference in payment of dividends.

Equity Incentive Program

On December 18, 2014, the Company’s Board of Directors approved an Equity Incentive Program (the “Equity Incentive Program”), whereby the Company’s employees could elect to receive equity in lieu of cash for all or part of their salary compensation.

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 Company recorded stock-based compensation expense related to the 2017 ESPP of approximately $12,000 for the year ended December 31, 2018.

During the year ended December 31, 2018, the Company issued the following shares of common stock for compensation:

During the year ended December 31, 2018, the Company issued an aggregate of 1,200 shares of common stock to an employee of the Company pursuant to the Company’s Equity Incentive Program at a price of $7.50.

During the year ended December 31, 2018, the Company issued an aggregate of 31,355 shares of common stock to directors of the Company pursuant to the Company’s Fiscal Year 2017 Director Compensation Plan at prices ranging from $6.38 to $8.13.

During the year ended December 31, 2018, the Company issued an aggregate of 3,778 shares of common stock to eight employees of the Company pursuant to the Company’s ESPP at a price of $5.38 per share.

During the year ended December 31, 2017, the Company issued the following shares of common stock for compensation:

During the year ended December 31, 2017, the Company issued an aggregate of 5,841 shares of common stock to employees of the Company pursuant to the Company’s Equity Incentive Program at prices ranging from $10.00 to $15.00.

During the year ended December 31, 2017, the Company issued an aggregate of 21,080 shares of common stock to directors of the Company pursuant to the Company’s Fiscal Year 2017 Director Compensation Plan at prices ranging from $9.63 to $15.00.

On February 13, 2017, the Company issued an aggregate of 1,280 shares of common stock to two employees of the Company as compensation at a price of $15.63 per share.

During the year ended December 31, 2017, the Company issued the following shares of common stock in connection with the exercise of warrants:

On May 11, 2017, the Company issued an aggregate of 27,500 shares to accredited investors in connection with the exercise of warrants at an exercise price of $10.00 per share.

On August 10, 2017, the Company issued an aggregate of 6,250 shares to accredited investors in connection with the exercise of warrants at an exercise price of $10.00 per share.

In June 2017, the Board of Directors approved the issuance of 8,000 restricted shares of common stock of the Company. The initial value of the restricted stock grant was $72,099, which is being amortized over the estimated service period. These shares will be issued to certain executives upon the Company meeting the following bench marks: 50% will vest when the price per share of the Company’s common stock, based upon a 30-trading day VWAP, is equal to at least $25.00 per share and 50% will vest when the price per share of the Company’s common stock, based upon a 30-trading day VWAP, is equal to at least $43.75 per share.

Throughout the year ended December 31, 2017, the Board of Directors approved the issuance of 17,600 restricted shares of common stock of the Company. The initial value of the restricted stock grant was $150,258, which is being amortized over the estimated service period. These shares will be issued to certain executives and employees upon vesting, which will occur when the price per share of the Company’s common stock, measured and approved based upon a 30-day trading VWAP, is equal to at least $25.00 per share.

On December 29, 2017, the Board of Directors approved the issuance of 16,800 restricted shares of common stock of the Company. These shares will be issued to certain executives upon vesting: 50% of the grant upon the Company reporting its first quarter positive Adjusted EBITDA (as presented by the Company) and 50% of the grant upon the Company reporting its first quarter positive Net Income (GAAP). The value of the shares of $6.25 per share was based on the fair market value of the Company’s common stock on the date of the issuance was approved. The Company will expense the value of the shares when it determines it is probable the performance targets will be achieved. There was no expense recorded during the years ended December 31, 2018 and 2017.

On April 20, 2018, the Board of Directors approved the issuance of 15,640 restricted shares of common stock of the Company. These shares will be issued to certain executives upon vesting: 50% of the grant upon the Company reporting its first quarter positive Adjusted EBITDA (as presented by the Company) and 50% of the grant upon the Company reporting its first quarter positive Net Income (GAAP). The value of the shares of $4.55 per share was based on the fair market value of the Company’s common stock on the date of the issuance was approved. The Company will expense the value of the shares when it determines it is probable the performance targets will be achieved. There was no expense recorded during the year ended December 31, 2018.

A summary of the Company's 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, 2018		114,236		$	8.75
Restricted stock granted		15,640			4.55
Restricted stock vested		—			—
Restricted stock forfeited		(9,280	)		8.73

Unvested at December 31, 2018		120,596		$	8.34

During the year ended December 31, 2018 and 2017, the Company recorded $55,289 and $181,004 respectively, related to the performance and market-based restricted stock awards.

Options and Warrants

During the year ended December 31, 2018, the Company issued warrants to purchase an aggregate of 84,000 shares of common stock in connection with the issuance of notes payable (see Note 8).

During the year ended December 31, 2017, the Company issued 33,750 shares of common stock in connection with the exercise of stock warrants at an exercise price of $10.00 per share for total proceeds of $337,500 (see Note 11 for additional information about stock options and warrants).

NOTE 10 – Business Combinations and Discontinued Operations

WEBA

On December 27, 2016, the Company entered into a Stock Purchase Agreement (“WEBA SPA”) with WEBA, a privately-owned company that develops, manufactures and markets additive packages for the antifreeze/coolant, gas patch coolants and heat transfer industries. Pursuant to the WEBA SPA, the Company acquired all of the WEBA shares from the WEBA sellers for $150,000 in cash and $2.65 million in 8% Promissory Notes (see Note 8). In addition, the WEBA sellers may be entitled to receive earn-out payments of up to an aggregate of $2,500,000 for calendar years 2017, 2018, and 2019 based upon terms set forth in the WEBA SPA. The Company also issued 45,000 shares as repayment of $450,000 of notes payable due to the WEBA sellers. The fair market value of the shares was $12.50 on the date of issuance. Following the WEBA acquisition, WEBA became a wholly owned subsidiary of the Company.

We accounted for the acquisition of WEBA as required under applicable accounting guidance. Tangible assets acquired are recorded at fair value. Identifiable intangible assets that we acquired are recognized separately if they arise from contractual or other legal rights or if they are separable and are recorded at fair value. Goodwill is recorded as the excess of the consideration transferred over the fair value of the net identifiable assets acquired. The earn-out payment liability was recorded at its estimated fair value of $1,745,023.

During the years ended December 31, 2018 and 2017, the Company decreased the contingent acquisition consideration liability amount related to the earn-out payment and recognized a credit to general and administrative expenses of $687,443 and $241,910 respectively, due to the fiscal 2018 and 2017 revenue and earnings milestones not being met. The contingent acquisition consideration liability was $815,670 and $1,509,755 at December 31, 2018 and 2017, respectively.

Discontinued Operations

On January 11, 2019, we completed the sale (the “Asset Sale”) of our 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, 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 consolidated statements of operations includes the following:

	Years Ended
	December 31, 2018			December 31, 2017
Net sales	$	5,826,580		$	6,265,779
Cost of goods sold		(5,763,024	)		(5,522,832	)
Operating expenses		(759,339	)		(808,952	)
Impairment of long-lived assets		(1,150,211	)		-
Interest expense		(20,081	)		(22,377	)
Pretax loss from discontinued operations		(1,866,075	)		(88,382	)
Income tax (provision) benefit		4,565			(14,872	)
Loss from discontinued operations	$	(1,861,510	)	$	(103,254	)

The carrying amount of assets and liabilities included in discontinued operations comprise the following:

	December 31, 2018		December 31, 2017
Accounts receivable	$	289,967	$	814,928
Prepaid expenses		1,693		24,304
Inventories		399,677		293,724
Property, plant and equipment		1,031,865		1,419,570
Deposits		36,898		39,805
Goodwill		-		885,295
Other intangible assets, net		-		120,375
Total assets classified as discontinued operations	$	1,760,100	$	3,598,100

Accounts payable and accrued expenses	$	410,563	$	474,713
Notes payable		175,456		239,772
Total liabilities classified as discontinued operations	$	586,019	$	714,485

NOTE 11 – Options and Warrants

The following are details related to options issued by the Company:

				Weighted		Weighted Avg. Remaining
	Options for			Average		Contractual		Aggregate
	Shares			Exercise Price		Life (yrs)		Intrinsic Value

Outstanding as of January 1, 2018		27,101		$	91.25		5
Granted		-			-		-
Exercised		-			-		-
Forfeited		-			-		-
Expired		(1,160	)		31.98		-
Outstanding as of December 31, 2018		25,941		$	94.44		4	$	-
Options exercisable as of December 31, 2018		25,941		$	94.44		4	$	-

We account for all stock-based payment awards made to employees and directors based on estimated fair values. We estimate the fair value of share-based payment awards on the date of grant using an option-pricing model and the value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service period.

We use the BSM option-pricing model as our method of valuation. The fair value is amortized on a straight-line basis over the requisite service periods of the awards, which is generally the vesting period. The fair value of share-based payment awards on the date of grant as determined by the BSM model is affected by our stock price as well as other assumptions. These assumptions include, but are not limited to:

•

Expected term is generally determined using weighted average of the contractual term and vesting period of the award;

•

Expected volatility of award grants made under the Company’s plans is measured using the historical daily changes in the market price of similar industry indices selected by us as representative, which are publicly traded, over the expected term of the award, due to our limited trading history for awards granted through June 30, 2014. Thereafter, we began using our own trading history as we deemed there to be sufficient history at that point in time;

•

Risk-free interest rate is equivalent to the implied yield on zero-coupon U.S. Treasury bonds with a remaining maturity equal to the expected term of the awards; and,

•

Forfeitures are based on the history of cancellations of awards granted by the Company and management’s analysis of potential forfeitures.

There were no options granted during the years ended December 31, 2018 and 2017.

The Company recorded expense of $0 and $7,500 for vesting of outstanding options during the years ended December 31, 2018 and 2017, respectively.

At December 31, 2018, there is no amount of unearned stock-based compensation currently estimated to be expensed over future years related to unvested common stock options. Future stock-based compensation expense and unearned stock-based compensation will increase to the extent that the Company grants additional common stock options or other stock-based awards.

During the year ended December 31, 2018, the Company issued warrants to purchase an aggregate of 84,000 shares of common stock in connection with the issuance of notes payable (see Note 8).

The following are details related to warrants issued by the Company:

				Weighted
	Warrants for			Average
	Shares			Exercise Price

Outstanding as of January 1, 2018		42,485		$	100.00
Granted		84,000		$	6.25
Exercised		-		$	-
Forfeited		-		$	-
Cancelled		-		$	-
Expired		(21,528	)	$	146.64
Outstanding and exercisable as of December 31, 2018		104,957		$	15.62

As of December 31, 2018, the Company had 6,483 shares of common stock reserved for future issuance under the Company’s stock plans.

NOTE 12 – 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.

	2018			2017
Beginning Balance as of January 1,	$	-		$	5,123
Monies owed to related party for services performed		92,404			126,059
Monies paid		(92,404	)		(131,182	)
Ending Balance as of December 31	$	-		$	-

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 8 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 8 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 8 for additional information).

NOTE 13 – Commitments and Contingencies

Rental Agreements

During the years ended December 31, 2018 and 2017, the Company leased office and warehouse space on a monthly basis under written rental agreements. The terms of these agreements range from several months to five years. The 2018 monthly rental payments ranged from $550 to $12,500.

For the years ended December 31, 2018 and 2017, the Company’s rent expense from continuing operations was $136,010 and $130,252, respectively.

Future minimum lease payments due are as follows:

Year Ended December 31,
2019	$	220,000
2020		212,000
2021		213,000
2022		64,000
2023		49,000
Total minimum lease payments	$	758,000

Litigation

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.

NOTE 14 – Concentration of Credit Risk

Credit risk represents the accounting loss that would be recognized at the reporting date if counter parties failed completely to perform as contracted. Concentrations of credit risk that arise from financial instruments exist for groups of customers when they have similar economic characteristics that would cause their ability to meet contractual obligations to be similarly affected by changes in economic or other conditions described below.

•

Cash – Financial instruments that subject the Company to credit risk are cash balances maintained in excess of federal depository insurance limits. At December 31, 2018 and 2017, the Company had $0 in cash which was not guaranteed by the Federal Deposit Insurance Corporation. To date, the Company has not experienced any losses in such accounts and believes the exposure is minimal.

•

Major customers and accounts receivable – Major customers represent any customer that accounts for more than 10% of revenues for the year. During the years ended December 31, 2018 and 2017, the Company had two and five customers that accounted for 29% and 56%, respectively, of revenues. The Company had three customers in 2018 and three customers in 2017, whose accounts receivable balance (unsecured) accounted for 57% and 42%, respectively, of accounts receivable at December 31, 2018 and 2017.

NOTE 15 – Capital Lease

On April 13, 2017, the Company closed an amended sale-leaseback transaction with NFS Leasing, Inc. (“NFS”), wherein the Company sold $1,700,000 of certain operational equipment used in the Company’s glycol recovery and recycling operations (the “Equipment”) pursuant to a bill of sale and simultaneously entered into a master equipment lease agreement, as modified (the “Lease Agreement”) with NFS for the lease of the Equipment by the Company. Pursuant to the Lease Agreement, the lease term (the “Lease Term”) is 48 months commencing on May 1, 2017. There was no gain or loss associated with the sale-leaseback. During the Lease Term, the Company is obligated to make monthly rental payments of $44,720 to NFS. At the conclusion of the Lease Term, the Company may repurchase the Equipment from NFS for $1. The Company has accounted for this transaction as a capital lease.

On March 15, 2018, the Company closed an amended sale-leaseback transaction with NFS, wherein the Company sold $150,000 of certain operational equipment used in the Company’s glycol recovery and recycling operations (the “March Equipment”) pursuant to a bill of sale and simultaneously entered into a master equipment lease agreement, as modified (the “March Lease Agreement”) with NFS for the lease of the March Equipment by the Company. Pursuant to the March Lease Agreement, the lease term (the “March Lease Term”) is 37 months commencing on Apri1 1, 2018. There was no gain or loss associated with the sale-leaseback. During the March Lease Term, the Company is obligated to make monthly rental payments of $4,856 to NFS. At the conclusion of the March Lease Term, the Company may repurchase the March Equipment from NFS for $1. The Company has accounted for this transaction as a capital lease.

On June 13, 2018, the Company closed an amended sale-leaseback transaction with NFS, wherein the Company sold $46,712 of certain operational equipment used in the Company’s glycol recovery and recycling operations (the “June Equipment”) pursuant to a bill of sale and simultaneously entered into a master equipment lease agreement, as modified (the “June Lease Agreement”) with NFS for the June lease of the Equipment by the Company. Pursuant to the June Lease Agreement, the lease term (the “June Lease Term”) is 34 months commencing on July 1, 2018. There was no gain or loss associated with the sale-leaseback. During the June Lease Term, the Company is obligated to make monthly rental payments of $1,622 to NFS. At the conclusion of the June Lease Term, the Company may repurchase the Equipment from NFS for $1. The Company has accounted for this transaction as a capital lease.

The following is a schedule of minimum future rentals on the non-cancelable capital leases as of December 31, 2018:

Year ending December 31,	Total
2019	$	621,785
2020		619,355
2021		198,728
Total minimum payments required		1,439,868
Less amount representing interest		(195,745	)
Present value of net minimum lease payments		1,244,123
Less current portion		(494,131	)
	$	749,992

Equipment under capital lease	$	1,959,464
Less: accumulated depreciation		(257,799	)
Net book value	$	1,701,665

NOTE 16– Subsequent Events

The Company has evaluated subsequent events through the filing date of this Annual Report on Form 10-K and determined that no subsequent events have occurred that would require recognition in the consolidated financial statements or disclosures in the notes thereto other then discussed below and in the accompanying notes.

Completion of Disposition of Assets

On January 11, 2019, the Company completed the Asset Sale of the Consumer Segment to the Purchaser pursuant to the terms of an Asset Purchase Agreement (see Note 10).

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a- 15(e) and 15d- 15(e) under the Exchange Act). Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that as of December 31, 2018, our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is (i) recorded, processed, summarized, and reported within the time periods specified in the SEC rules and forms, and (ii) is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance with GAAP.

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting using the criteria set forth by the 2013 Committee of Sponsoring Organizations of the Treadway Commission in Internal Control—Integrated Framework. Based on our evaluation under the criteria set forth in Internal Control—Integrated Framework, our management concluded that our internal control over financial reporting was effective as of December 31, 2018.

This Report on Form 10-K does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Our management’s report was not subject to attestation by our independent registered public accounting firm pursuant to rules of the SEC that permit us to provide only management’s report in this Report on Form 10-K.

Inherent Limitations on Internal Control

A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision making can be faulty, and that breakdowns can occur because of simple errors. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

Changes in Internal Control Over Financial Reporting

Other than as set forth above with respect to hiring additional accounting personnel and establishing a segregation of duties, there were no changes in our internal control over financial reporting in the last quarter of the fiscal year ended December 31, 2018 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information

None.

PART III

Item 10. Directors, Executive Officers and Corporate Governance

The members of the Board of Directors of the Company serve for a period of one year or until his/her successor is elected and qualified. The officers of the Company are appointed by our Board of Directors and hold office until their death, resignation, or removal from office. The following table sets forth certain information with respect to the current directors and executive officers of the Company:

Name	Age	Position
Dwight Mamanteo	49	Chairman of the Board
Charles F. Trapp	69	Director
Frank Kneller	60	Director
Scott Nussbaum	41	Director
Brian Gelman	46	Chief Financial Officer
Richard Geib	71	President and Chief Executive Officer
Michael Olsson	40	Executive Vice President of Performance Fluids
Dennis Kelly	48	Executive Vice President of Chemical Products

Dwight Mamanteo — Chairman of the Board. Mr. Mamanteo became a director of the Company on January 15, 2014. On January 21, 2015, the Board appointed him to serve as Chairman of the Board, effective February 1, 2015. Since November 2004, Mr. Mamanteo has served as a Portfolio Manager at Wynnefield Capital, Inc. Since March 2007, Mr. Mamanteo has served on the board of directors of MAM Software Group, Inc. (NASDAQ: MAMS), a provider of innovative software and data solutions for a wide range of businesses, including those in the automotive aftermarket. Mr. Mamanteo also serves as the Chairman of the Compensation Committee and as a member of its Audit and Governance Committees. Since October 2018, Mr. Mamanteo has served on the board of directors of Cherokee Global Brands (NASDAQ: CHKE), a global brand marketing platform that manages a growing portfolio of fashion and lifestyle brands including Cherokee®, Carole Little®, Tony Hawk® Signature Apparel and Hawk Brands®, Liz Lange®, Everyday California®, Sideout®, Hi-Tec®, Magnum®, 50 Peaks® and Interceptor®, across multiple consumer product categories and retail tiers around the world. Mr. Mamanteo also serves as the Chairman of the Audit Committee and as a member of its Governance Committee. From June 2013 to October 2014, Mr. Mamanteo served on the board of directors of ARI Network Services, Inc. (NASDAQ: ARIS), a provider of products and solutions that serve several vertical markets with a focus on the outdoor power, power sports, marine, RV, and appliance segments, and also served as the Chairman of its Governance Committee and as a member of its Compensation Committee. From March 2012 to April 2012, Mr. Mamanteo served on the board of directors of CDC Software Corp. (NASDAQ: CDCS), a provider of Enterprise CRM and ERP software designed to increase efficiencies and profitability, and also served as a member of its Audit Committee. From April 2009 to November 2010, Mr. Mamanteo served on the board of directors of EasyLink Services International Corp. (NASDAQ: ESIC), a provider of on demand electronic messaging and transaction services that help companies optimize relationships with their partners, suppliers and customers, and also served as a member of its Compensation and Governance & Nominating Committees. From December 2007 to November 2008, Mr. Mamanteo served on the board of directors and as the Chairman of PetWatch Animal Hospitals, Inc. (a private company), a provider of primary care and specialized services to companion animals through a network of fully owned veterinary hospitals. Mr. Mamanteo received an M.B.A. from the Columbia University Graduate School of Business and a Bachelor of Engineering in Electrical Engineering from Concordia University (Montreal). Mr. Mamanteo brings to the Board valuable business, operations, finance, and governance experience related to public and private companies in the automotive aftermarket and other industries.

Charles F. Trapp — Director. Mr. Trapp became a director of the Company on May 22, 2015. Mr. Trapp is the former Executive Vice President and Chief Financial Officer of MAM Software Group, Inc. (NASDAQ: MAMS), a leading provider of business and supply chain management solutions primarily to the automotive parts manufacturers, retailers, tire and service chains, independent installers, and wholesale distributors in the automotive aftermarket, where he served as Chief Financial Officer from November 2007 until his retirement in October 2015. Prior to his employment with MAM Software Group, Inc., Mr. Trapp was the co-founder and President of Somerset Kensington Capital Co., a Bridgewater, New Jersey-based investment firm that provided capital and expertise to help public companies restructure and reorganize from 1997 until November 2007. Earlier in his career, he served as Chief Financial Officer and/or a board member for a number of public companies, including AW Computer Systems, Vertex Electronics Corp., Worldwide Computer Services and Keystone Cement Co. His responsibilities have included accounting and financial controls, federal regulatory filings, investor relations, mergers and acquisitions, loan and labor negotiations, and litigation management. Mr. Trapp is a Certified Public Accountant and received his Bachelor of Science degree in Accounting from St. Peter’s College in Jersey City, New Jersey. Mr. Trapp brings to the Board experience in public company financial leadership within manufacturing and distribution companies, the automotive aftermarket and other industries.

Frank Kneller — Director. Mr. Kneller became a director of the Company on August 17, 2015. Mr. Kneller was the Chief Executive Officer of HoSoPo Corporation dba Horizon Solar Power until February 2018, which was acquired in August 2017 by Northern Pacific Group from Oaktree Capital Management’s GFI Energy Group, and includes oversight of Horizon Solar Power and Solar Spectrum under the Sungevity brand. Previously, Mr. Kneller was the Chief Operating Officer of Verengo Solar, a leading residential solar installation business that was founded in 2008 and grew rapidly to be a top 5 US residential solar business by 2014. Mr. Kneller was recruited to Verengo Solar in October 2015 for his successful track record of driving operational excellence at multiple companies and across several different industries. In eight months, Mr. Kneller executed a turnaround project that reduced expenses and increased revenues in the strategic solar market of Southern California. From 2010 to 2014, Mr. Kneller served as the Vice President of Sales & Operations at Sears Holding Company, where he led sales and operations with full profit and loss responsibility of $1.3 billion, over 740 corporate stores, six franchise stores, multiple call centers, and over 12,000 associates. From 2007 to 2010, he served as the Chief Executive Officer of Aquion Water Treatment Products, a $250 million global manufacturer and marketer of water treatment equipment and water quality solutions, where he was selected by the board to lead the revitalization of the company and was responsible for a total reorganization of the business. Mr. Kneller brings to the Board experience in leadership of companies with different sizes and within different industries, including auto service and distributed service to the consumer markets.

Scott Nussbaum — Director. Mr. Nussbaum became a director of the Company in December 2016. Mr. Nussbaum is an investor with fifteen years of experience investing in small public companies. Mr. Nussbaum is the Chief Compliance Officer of Blue Heron Research Partners. Previously, Mr. Nussbaum was a Partner and Director of Operations for a private fund in New York. Mr. Nussbaum has experience developing and launching new lines of business, managing regulatory compliance programs, building and maintaining infrastructure in support of front office activities and performing operational reviews in support of the firm’s investment portfolio. Mr. Nussbaum also serves as a Director and Endowment Manager for the Emerald Bay Association, a California-based non-profit organization. Mr. Nussbaum holds the Chartered Financial Analyst (CFA) designation and graduated with a Bachelor of Arts degree in Political Science from Tufts University. Mr. Nussbaum brings to the Board experience in investment in small public companies and business operations.

Brian Gelman – Chief Financial Officer. Mr. Gelman became Chief Financial Officer of the Company on July 5, 2017. Mr. Gelman has nearly 20 years of experience in the areas of accounting and finance, including serving as a senior financial officer of a public company. Prior to joining the Company, Mr. Gelman held various positions of increasing responsibility, including Interim Chief Financial Officer, Chief Accounting Officer, Corporate Controller and Assistant Controller, with Warren Resources, Inc., a publicly traded independent energy company, from April 2002 to March 2016. From August 1998 to April 2002, Mr. Gelman was employed at EisnerAmper, LLP, an accounting firm. Mr. Gelman received a Bachelor of Science in Finance from the State University of New York at Old Westbury, located in Old Westbury, New York.

Michael Olsson – Executive Vice President and Chief Operating Officer – Consumer Segment. Mr. Olsson was appointed as Vice President of Sales & Marketing of the Company effective on May 29, 2017 and became Executive Vice President and Chief Operating Officer of the Company's Consumer segment effective December 11, 2017. Mr. Olsson previously served as Vice President of Sales at Kauffman Tire from February 2014 to May 2017, where he was directly responsible for the operations and sales for the 62 stores in the southeast United States and served as a member of the Kauffman Tire Executive Leadership Team. From March 2006 to February 2014, Mr. Olsson worked at Sears Holdings, where he served under multiple field positions, including Region Manager with the Automotive Group in which he directly managed 215 stores during his tenure. Under Mr. Olsson's leadership at Sears Holdings, he was directly responsible for sales and operations for the $300 million in sales revenue while managing all assets and people for 18 districts across 14 states in the southeast of the United States. Mr. Olsson also served his country with active duty enlistment for the United States Air Force from January 2001 to March 2006 as a Combat Command Post Controller. Mr. Olsson is also a veteran with active campaign deployments for Operation Enduring Freedom and Operation Iraqi Freedom while serving with the NATO Joint Task Force in national security operations. Mr. Olsson brings a wealth of experience and knowledge about the automotive industry and operations, including management of multi-location business.

Richard Geib — President and Chief Executive Officer. Mr. Geib was appointed President and Chief Executive Officer of the Company on September 11, 2018. Mr. Geib also serves as a director of, and was appointed President and Chief Executive Officer of, each of the Company’s subsidiaries as of October 16, 2018. Mr. Geib previously served as the Company’s Chief Operating Officer from December 2016 to April 2018, as the Company’s Executive Vice President – Additives and Glycols from December 2015 to December 2016, and as the Company’s Chief Technology Officer, developing the Company’s GlyEco Technology™ from November 2011 to December 2015. Prior to that, Mr. Geib was employed for over twenty years with the Monsanto Company, a multinational agrochemical and agricultural biotechnology company, serving in various functions including engineering, manufacturing, marketing and sales. Mr. Geib served as Global Recycling Technologies’ Director of Technology and Development from July 2007 until the merger. Since 2002, Mr. Geib has served as the President of WEBA, which develops advanced additive packages for antifreeze and heat transfer fluid and used glycol treatment processes, including re-distillation and recovery technology. Under Mr. Geib’s direction, WEBA launched its additive sales into Canada and Mexico. From 1998 through 2002, Mr. Geib served as President of Additives Inc., a former chemical division of Silco Distributing Co., where he developed new products, added many domestic customers, began industry trade show participation, became chairman of ASTM Coolants Committee, and established a laboratory, customer service, production, and sales department. From 1994 to 1998, Mr. Geib served as the Manager of the Chemical Division of Silco Distributing Company, where he developed and grew his division, developed products, designed a production plant, negotiated contracts for outside production, wrote marketing and technical literature, developed and implemented a sales program, arranged freight, and managed cash flow. From 1990 to 1994, Mr. Geib served as the President of Chemical Sales Company. From 1969 through 1989, Mr. Geib held several positions with Monsanto Company, including, Director of Sales, Detergents and Phosphates Division; Director, Process Chemicals, Europe/Africa at Monsanto’s Europe/Africa Headquarters, Brussels, Belgium; Strategic and Financial Planning Director, Process Chemicals Division; Business Manager for Maleic Anhydride, Chlor-Alkali, Phosphate Esters, Fumaric Acid, etc.; Plant Manager Monsanto’s W.G. Krummrich Plant; Operations Superintendent at Monsanto’s W.G. Krummrich Plant; Production Supervisor for the 4-Nitrodiphenylamine Chlorine and Caustic Soda/Potash plants; and Design and Plant Engineer at World Headquarters.

Dennis Kelly — Executive Vice President of Chemical Products. Mr. Kelly was appointed the Company’s Executive Vice President of the Industrial Segment on April 27, 2018 (renamed Executive Vice President of Chemical Products on January 24, 2019). Mr. Kelly has worked in the antifreeze/engine coolant industry for approximately 20 years. He started his career in 1998 as a Research and Development Chemist, at Dober Chemical, an additive technology provider for engine coolants and heat transfer fluids. During his time at Dober Chemical, Mr. Kelly held several key positions in technology, business development, and management. Mr. Kelly holds leadership positions in several international industry organizations. Since 2011, he has served as the Chairman of the Antifreeze Committee at NORA, an association of responsible recyclers. In addition, for more than four years, Mr. Kelly has served as the Chairman of the ASTM Committee on Industrial Heat Transfer Fluids. He also worked to patent over a dozen industrial chemical applications. Management believes that he is a well-seasoned professional and experienced executive that understands the Company’s industry.

Employment / Consulting Agreements

Ian Rhodes

On September 11, 2018, Ian Rhodes resigned as Chief Executive Officer and Director of the Company. The resignation was for personal reasons and not due to any disagreement with the Company on any matter relating to its operations, policies or practices. Simultaneous with Mr. Rhodes’ resignation, the Company appointed Richard Geib as President and Chief Executive Officer of the Company. As a result, Mr. Geib resigned as the Company’s Chief Operating Officer and Executive Vice President of Additives and Glycols. In connection with Mr. Rhodes’ resignation, the Company entered into a Separation Agreement with Mr. Rhodes, which became effective October 2, 2018.

Richard Geib

On December 28, 2016, the Company appointed Richard Geib as Executive Vice President- Additives and Glycols of the Company. The Company entered into an Employment Agreement with Mr. Geib effective on December 28, 2016. The initial term of the Geib Employment Agreement is three years, with automatic renewals for successive one-year terms, unless terminated by Mr. Geib or by the Company.

Pursuant to the Geib Employment Agreement, Mr. Geib shall be entitled to receive: (i) an annual base salary of $150,000; (ii) an annual incentive of up to 35% of the Geib Initial Base Salary based upon the achievement of certain performance goals; and (iii) a stock grant of 1,000,000 shares of common stock, which shares shall fully vest when the price per share of the Common Stock, measured and approved based upon a 30-day trading volume weighted average price (VWAP), is equal to at least $25.00 per share. Mr. Geib will also be eligible to participate in the Company’s long-term equity inventive plan, and to receive other such benefits as are generally available to officers of the Company.

Brian Gelman

On June 12, 2017, the Company entered into a letter agreement, which was effective as of June 15, 2017, with Brian Gelman (the “Gelman Letter Agreement”), establishing his compensation as Chief Financial Officer. Pursuant to the terms of the Gelman Letter Agreement, the Company agreed to pay Mr. Gelman an annual base salary of $150,000, subject to annual review. Mr. Gelman also received a $10,000 signing bonus payable in one lump sum. Mr. Gelman is eligible for a targeted cash bonus of 35% of his base salary based on performance goals established by the Company. Mr. Gelman is also eligible to participate in the employee benefit plans and programs generally available to officers of the Company.

Mr. Gelman was granted 6,000 shares of the Common Stock, which shares shall vest when the market price of the Common Stock trades at or above $25.00 for the previous 30-day volume weighted average price.

Committees of the Board of Directors

Our Board of Directors has an Audit Committee, a Compensation Committee, and a Governance and Nominating Committee, each of which has the composition and responsibilities described below.

Audit Committee

Our Audit Committee oversees a broad range of issues surrounding our accounting and financial reporting processes and audits of our financial statements, including the following:

monitors the integrity of our financial statements, our compliance with legal and regulatory requirements, our independent registered public accounting firm’s qualifications and independence, and the performance of our internal audit function and independent registered public accounting firm;

assumes direct responsibility for the appointment, compensation, retention and oversight of the work of any independent registered public accounting firm engaged for the purpose of performing any audit, review or attestation services and for dealing directly with any such accounting firm;

provides a medium for consideration of matters relating to any audit issues; and

prepares the audit committee report that the rules require be included in our filings with the SEC.

The members of our Audit Committee are Charles F. Trapp, Scott Nussbaum and Dwight Mamanteo. Mr. Trapp serves as chairperson of the committee. The Board of Directors has determined that Mr. Trapp meets the criteria of an “audit committee financial expert” (as defined under Item 407(d)(5)(ii) of Regulation S-K). Mr. Trapp is also an “independent director” as defined by Section 10A(m)(3)(B)(ii) of the Exchange Act and Rule 5605(a)(2) of the NASDAQ Marketplace Rules.

The Board of Directors has adopted a written charter for the Audit Committee, a copy of which can be accessed online at http://www.glyeco.com/corporate_charters.

Compensation Committee

Our Compensation Committee reviews and recommends policy relating to compensation and benefits of our directors and executive officers, including reviewing and approving corporate goals and objectives relevant to the compensation of our Chief Executive Officer and other senior officers, evaluating the performance of these persons in light of those goals and objectives and setting compensation of these persons based on such evaluations. The Compensation Committee reviews and evaluates, at least annually, the performance of the Compensation Committee and its members, including compliance of the Compensation Committee with its charter. The members of our Compensation Committee are Scott Nussbaum, Charles F. Trapp, and Frank Kneller. Mr. Nussbaum serves as chairperson of the committee.

The Board of Directors has adopted a written charter for the Compensation Committee, a copy of which can be accessed online at http://www.glyeco.com/corporate_charters.

Governance and Nominating Committee

The Governance and Nominating Committee oversees and assists our Board of Directors in identifying, reviewing and recommending nominees for election as directors; evaluates our Board of Directors and our management; develops, reviews and recommends corporate governance guidelines and a corporate code of business conduct and ethics; and generally advises our Board of Directors on corporate governance and related matters. The members of our Governance and Nominating Committee are: Frank Kneller and Scott Nussbaum. Mr. Kneller serves as chairperson of the committee.

The Board of Directors has adopted a written charter for the Governance and Nominating Committee, a copy of which can be accessed online at http://www.glyeco.com/corporate_charters.

Family Relationships

There are no family relationships between any of the officers or directors of the Company.

Involvement in Certain Legal Proceedings

During the past ten years, none of our directors or executive officers has been:

the subject of any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;

convicted in a criminal proceeding or is subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);

subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities;

found by a court of competent jurisdiction (in a civil action), the SEC or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, that has not been reversed, suspended, or vacated;

subject of, or a party to, any order, judgment, decree or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of a federal or state securities or commodities law or regulation, law or regulation respecting financial institutions or insurance companies, law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or

subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization, any registered entity or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires our executive officers and directors, and persons who beneficially own more than 10% of a registered class of our equity securities to file with the SEC initial statements of beneficial ownership, reports of changes in ownership and annual reports concerning their ownership of our Common Stock and other equity securities on Forms 3, 4 and 5, respectively. Executive officers, directors, and greater than 10% stockholders are required by the SEC regulations to furnish us with copies of all Section 16(a) reports they file.

Specific due dates for such Section 16(a) reports have been established by the SEC, and the Company is required to disclose in this Annual Report any failure to file reports by such dates during the fiscal year ended December 31, 2018. Based solely on its review of the copies of such reports received by it, or written representations from certain reporting persons that no Form 5s were required for such persons, the Company believes that during the fiscal year ended December 31, 2018, there was no failure to comply with Section 16(a) filing requirements applicable to its executive officers, directors or greater than 10% stockholders other than as listed in the table below:

Name	Number of Late Reports	Description
Scott P. Nussbaum	1	1 transaction was not reported on a timely basis upon the acquisition of a restricted stock grant.

Charles Trapp	1	1 transaction was not reported on a timely basis upon the acquisition of a restricted stock grant.

Scott Krinsky	1	1 transaction was not reported on a timely basis upon the acquisition of a restricted stock grant.

Ian Rhodes	2	2 transactions were not reported on a timely basis upon the acquisition of restricted stock grants.

Michael Olsson	1	Michael Olsson’s Form 3 was not filed on a timely basis.

David Ide	1	1 transaction was not reported on a timely basis upon the acquisition of a restricted stock grant.

Frank Kneller	1	1 transaction was not reported on a timely basis upon the acquisition of a restricted stock grant.

Brian Gelman	1	1 transaction was not reported on a timely basis upon the acquisition of Common Stock.

Dennis Kelly	2	Dennis Kelly’s Form 3 was not filed on a timely basis; 1 transaction was not reported on a timely basis upon the acquisition of Common Stock.

Director Nominating Procedures

There have been no material changes to the procedures by which our security holders may recommend nominees to our Board of Directors.

Code of Ethics

On August 5, 2014, the Board of Directors of the Company adopted a Code of Business Conduct and Ethics, amended on March 23, 2017 (as amended, the “Code of Business Conduct and Ethics”), which sets forth legal and ethical standards of conduct applicable to all directors, executive officers, and employees of the Company.

A copy of the Code of Business Conduct and Ethics may be requested, free of charge, by sending a written communication to GlyEco, Inc. Attn: Corporate Secretary, at P.O. Box 387, Institute, WV 25112. The Code of Business Conduct and Ethics has also been posted on the Company’s website, www.glyeco.com.

Item 11. Executive Compensation

The following table sets forth all plan and non-plan compensation for the last two completed fiscal years paid to all individuals who served as the Company’s principal executive officer (“PEO”) or acted in a similar capacity and the Company’s two other mostly highly compensated executive officers during the last completed fiscal year, regardless of compensation level, as required by Item 402(m)(2) of Regulation S-K. We refer to all of these individuals collectively as our “named executive officers.”

Name & Principal Position	Year		Salary ($)		Bonus ($)		Stock Awards ($)(4)		Option Awards ($)		Non-Equity Incentive Plan Compensation ($)		Change in Pension Value and Non- Qualified Deferred Compensation Earnings ($)		All Other Compensation ($)		Total ($)
Richard Geib, President and CEO (PEO) (1)		2018	$	150,000		-		-		-		-		-		-	$	150,000
		2017	$	150,000		-		-		-		-		-		-	$	150,000

Brian Gelman, CFO and Vice-President (2)		2018	$	150,000		-		-		-		-		-		-	$	150,000
		2017	$	80,962		-		47,452		-		-		-		-	$	128,414
Ian Rhodes, former President and CEO (PEO) (2)		2018	$	203,877		-		-		-		-		-		-	$	203,877
		2017	$	200,000		10,000		-		-		-		-		-	$	210,000

(1)	Mr. Geib was appointed President and Chief Executive Officer effective on September 11, 2018.
(2)	Mr. Gelman was appointed Chief Financial Officer on July 5, 2017.
(3)	Mr. Rhodes resigned as President and Chief Executive Officer on September 11, 2018.
(4)	The amounts shown in this column represent the aggregate grant date fair value of awards computed in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718 Compensation—Stock Compensation.

Option/SAR Grants in Fiscal Year Ended December 31, 2018

None.

Option/SAR Grants in Fiscal Year Ended December 31, 2017

None.

Outstanding Equity Awards at Fiscal Year-End Table

The following table sets forth information for the named executive officers regarding the number of shares subject to both exercisable and unexercisable stock options and warrants, as well as the exercise prices and expiration dates thereof, as of December 31, 2018.

Option/Warrant Awards
Name	Number of Securities underlying Unexercised Options and Warrants (#) Exercisable		Number of Securities underlying Unexercised Options and Warrants (#) Unexercisable		Equity incentive plan awards: Number of Securities Underlying Unexercised Unearned Options and Warrants (#)		Option/ Warrant Exercise Price ($/Sh)		Option/ Warrant Expiration Date
Ian Rhodes (1)		250		-		-	$	10.00	12/27/2019
		2,000					$	6.25	5/1/2021

(1) On December 27, 2016, Mr. Rhodes was granted a fully vested warrant to purchase 250 shares of common stock at an exercise prices of $10.00 per share. On May 1, 2018 Mr. Rhodes was granted 2,000 warrants to purchase common stock at $6.25 per share in conjunction with a note.

Equity Award Plans

On February 23, 2012, subject to stockholder approval, the Company’s Board of Directors approved the Company’s 2012 Equity Incentive Plan (the “2012 Plan”). By written consent in lieu of a meeting, dated March 14, 2012, stockholders of the Company owning an aggregate of 115,187 shares of Common Stock (representing approximately 66.1% of the 180,416 outstanding shares of Common Stock) approved and adopted the 2012 Plan. Also by written consent in lieu of a meeting, dated July 27, 2012, stockholders of the Company owning an aggregate of 101,410 shares of Common Stock (representing approximately 51.8% of the then 195,616 outstanding shares of Common Stock) approved an amendment to the 2012 Plan to increase the number of shares reserved for issuance under the 2012 Plan by 24,000 shares.

There are an aggregate of 52,000 shares of our Common Stock reserved for issuance upon exercise of awards granted under the 2012 Plan to employees, directors, proposed employees and directors, advisors, independent contractors (and their employees and agents), and other persons who provide valuable services to the Company. As of March 30, 2018, we have issued 45,986 options under the 2012 Plan. The following description of the 2012 Plan does not purport to be complete and is qualified in its entirety by reference to the full text of the 2012 Plan. A copy of the 2012 Plan was filed as Exhibit 4.5 to our Annual Report on Form 10-K for the year ended December 31, 2011, which was filed with the SEC on April 16, 2012 and is incorporated by reference herein.

Purpose of the 2012 Plan

The purpose of the 2012 Plan is to attract, retain, and motivate employees, directors, advisors, independent contractors (and their employees and agents, or, in the Plan Administrator’s discretion, any of their employees or contractors), and other persons who provide valuable services to the Company by providing them with the opportunity to acquire a proprietary interest in the Company and to link their interest and efforts to the long-term interests of the Company’s stockholders. The Company believes that increased share ownership by such persons will more closely align stockholder and employee interests by encouraging a greater focus on the profitability of the Company. The Company has reserved and authorized the issuance of up to 52,000 shares of the Company’s Common Stock pursuant to awards granted under the 2012 Plan, subject to adjustment in the case of any stock dividend, forward or reverse stock split, split-up, combination or exchange of shares, consolidation, spin-off, reorganization, or recapitalization of shares or any like capital adjustment.

The 2012 Plan includes a variety of forms of awards, including (i) stock options intended to qualify as Incentive Stock Options (“Incentive Stock Options”) under Section 422 of the United States Internal Revenue Code of 1986, as amended (the “Code”), (ii) stock options not intended to qualify as Incentive Stock Options under the Code (“Nonqualified Stock Options”), (iii) stock appreciation rights, (iv) restricted stock awards, (v) performance stock awards and (vi) other stock-based awards to allow the Company to adapt its incentive compensation program to meet the needs of the Company. 45,986 stock options have been granted under the 2012 Plan.

Plan Administration

The 2012 Plan is administered by the Board of Directors of the Company (the “Board”). The Board may delegate all or any portion of its authority and duties under the 2012 Plan to one or more committees appointed by the Board and consisting of at least one member of the Board, under such conditions and limitations as the Board may from time to time establish. Notwithstanding anything contained in the 2012 Plan to the contrary, only the Board or a committee thereof composed of two or more “Non-Employee Directors” (as that term is defined in Rule 16b-3 of the Exchange Act may make determinations regarding grants of awards to executive officers, directors, and 10% stockholders of the Company (“Affiliates”).

The Board and/or any committee that has been delegated the authority to administer the 2012 Plan, as the case may be, is referred to as the “Plan Administrator.”

The Plan Administrator has the authority, in its sole and absolute discretion, to grant awards as an alternative to, as a replacement of, or as the form of payment for grants or rights earned or due under the 2012 Plan or other compensation plans or arrangements of the Company or a subsidiary of the Company, including the 2012 Plan of any entity acquired by the Company or a subsidiary of the Company.

Eligibility

Any employee, director, proposed employee or director, independent contractor (or employee or agent thereof), or other agent or person who provides valuable services to the Company is eligible to receive awards under the 2012 Plan. With respect to awards that are options, directors who are not employees of the Company, proposed non-employee directors, proposed employees, and independent contractors (and their employees and agents, or, in the Plan Administrator’s discretion, any of their employees or contractors) are eligible to receive only Nonqualified Stock Options.

Change of Control

Unless otherwise provided by the Board, in the event of a Change of Control (as defined in the 2012 Plan), the surviving, continuing, successor, or purchasing entity or parent entity thereof, as the case may be (the “Acquiring Company”), will either assume the Company’s rights and obligations under outstanding awards or substitute for outstanding awards substantially equivalent awards for the Acquiring Company’s capital stock. In the event the Acquiring Company elects not to assume or substitute for such outstanding awards in connection with a Change of Control, the Board may, in its sole and absolute discretion, provide that all or any unexercisable and/or unvested portions of the outstanding awards will be immediately vested and exercisable in full upon consummation of the Change of Control. The vesting and/or exercise of any award that is permissible solely by reason of this section will be conditioned upon the consummation of the Change of Control. Unless otherwise provided by the Board, any awards that are neither (i) assumed or substituted for by the Acquiring Company in connection with the Change of Control, nor (ii) exercised upon consummation of the Change of Control, will terminate and cease to be outstanding effective as of the date of the Change of Control.

Exercise Price of Options

The price for which shares of Common Stock may be purchased upon exercise of a particular option will be determined by the Plan Administrator at the time of grant; provided, however, that the exercise price of any award granted under the 2012 Plan will not be less than 100% of the Fair Market Value (as defined in the 2012 Plan) of the Common Stock on the date such option is granted (or 110% of the Fair Market Value of the Common Stock if the award is granted to a stockholder who, at the time the option is granted, owns or is deemed to own stock possessing more than 10% of the total combined voting power of all classes of capital stock of the Company or of any parent or subsidiary of the Company).

Term of Options; Modifications

The Plan Administrator will set the term of each stock option, but no Incentive Stock Option will be exercisable more than ten years after the date such option is granted (or five years for an Incentive Stock Option granted to a stockholder who, at the time the option is granted, owns or is deemed to own stock possessing more than 10% of the total combined voting power of all classes of capital stock of the Company or of any parent or subsidiary of the Company).

Payment; No Deferrals

Awards granted under the 2012 Plan may be settled through exercise by (i) cash payments, (ii) the delivery of Common Stock (valued at Fair Market Value), (iii) the cashless exercise of such award, (iv) the granting of replacement awards, (v) combinations thereof as the Plan Administrator will determine, in its sole and absolute discretion, or (vi) any other method authorized by the 2012 Plan. The Plan Administrator will not permit or require the deferral of any award payment, including, without limitation, the payment or crediting of interest or dividend equivalents and converting such credits to deferred stock unit equivalents. No award granted under the 2012 Plan will contain any deferral feature.

Other Stock-Based Awards

Stock Appreciation Rights.

The Plan Administrator may grant stock appreciation rights, either in tandem with a stock option granted under the 2012 Plan or with respect to a number of shares for which no option has been granted. A stock appreciation right will entitle the holder to receive, with respect to each share of stock as to which the right is exercised, payment in an amount equal to (i) the excess of the Fair Market Value of one share of Common Stock on the date the right is exercised, over (ii) the Fair Market Value of one share of Common Stock on the date the right is granted; provided, however, that in the case of stock appreciation rights granted in tandem with or otherwise related to any award under the 2012 Plan, the grant price per share will be at least the Fair Market Value per share of Common Stock on the date the right was granted. The Plan Administrator may establish a maximum appreciation value payable for stock appreciation rights and such other terms and conditions for such rights as the Plan Administrator may determine, in its sole and absolute discretion.

Restricted Stock Awards.

The Plan Administrator may grant restricted stock awards consisting of shares of Common Stock or denominated in units of Common Stock in such amounts as determined by the Plan Administrator, in its sole and absolute discretion. Restricted stock awards may be subject to (i) forfeiture of such shares upon termination of employment or Service (as defined below) during the applicable restriction period, (ii) restrictions on transferability, (iii) limitations on the right to vote such shares, (iv) limitations on the right to receive dividends with respect to such shares, (v) attainment of certain performance goals, such as those described in Section 5.8(c) of the 2012 Plan, and (vi) such other conditions, limitations, and restrictions as determined by the Plan Administrator, in its sole and absolute discretion, and as set forth in the instrument evidencing the award. These restrictions may lapse separately or in combinations or may be waived at such times, under such circumstances, in such installments, or otherwise as determined by the Plan Administrator, in its sole and absolute discretion. Certificates representing shares of Common Stock subject to restricted stock awards will bear an appropriate legend and may be held subject to escrow and such other conditions as determined by the Plan Administrator until such time as all applicable restrictions lapse.

Performance Share Awards.

The Plan Administrator may grant performance share awards that give the award recipient the right to receive payment upon achievement of certain performance goals established by the Plan Administrator, in its sole and absolute discretion, as set forth in the instrument evidencing the award. Such payments will be valued as determined by the Plan Administrator and payable to or exercisable by the award recipient for cash, shares of Common Stock (including the value of Common Stock as a part of a cashless exercise), other awards, or other property as determined by the Plan Administrator. Such conditions or restrictions may be based upon continuous Service (as defined below) with the Company or the attainment of performance goals related to the award holder’s performance or the Company’s profits, profit growth, profit-related return ratios, cash flow, stockholder returns, or such other criteria as determined by the Plan Administrator. Such performance goals may be (i) stated in absolute terms, (ii) relative to other companies or specified indices, (iii) to be achieved during a period of time, or (iv) as otherwise determined by the Plan Administrator.

Other Stock-Based Awards.

The Plan Administrator may grant such other awards that are payable in, valued in whole or in part by reference to, or otherwise based on or related to shares of Common Stock, as may be deemed by the Plan Administrator to be consistent with the purposes of the 2012 Plan and applicable laws and regulations. Such other awards may include, without limitation, (i) shares of Common Stock awarded purely as a bonus and not subject to any restrictions or conditions, (ii) convertible or exchangeable debt or equity securities, (iii) other rights convertible or exchangeable into shares of Common Stock, and (iv) awards valued by reference to the value of shares of Common Stock or the value of securities or the performance of specified subsidiaries of the Company.

Transferability

Any Incentive Stock Option granted under the 2012 Plan will, during the recipient’s lifetime, be exercisable only by such recipient, and will not be assignable or transferable by such recipient other than by will or the laws of descent and distribution. Except as specifically allowed by the Plan Administrator, any other award granted under the 2012 Plan and any of the rights and privileges conferred thereby will not be assignable or transferable by the recipient other than by will or the laws of descent and distribution and such award will be exercisable during the recipient’s lifetime only by the recipient.

Term of the 2012 Plan

The 2012 Plan will terminate on February 23, 2022, unless sooner terminated by the Board. After the 2012 Plan is terminated, no future awards may be granted under the 2012 Plan, but awards previously granted will remain outstanding in accordance with their applicable terms and conditions and the 2012 Plan’s terms and conditions.

Consideration

The Board or Committee will grant stock options under the 2012 Plan in consideration for services rendered. There will be no other consideration received or to be received by the Company or any of its subsidiaries for the granting or extension of stock options under the 2012 Plan.

2017 Incentive Compensation Plan

In September, 2017, subject to stockholder approval, the Company’s Board of Directors approved the Company’s 2017 Incentive Compensation Plan (the “2017 ICP”). The 2017 ICP was approved by the Company’s stockholders at the Company’s 2017 Annual Meeting of Stockholders on November 14, 2017.

The aggregate maximum number of shares of Common Stock (including shares underlying options) that may be issued under the 2017 ICP is limited to 10,000,000 shares of Common Stock pursuant to awards of Restricted Shares or Options. The number of shares of Common Stock that are the subject of awards under the 2017 ICP which are forfeited or terminated, are settled in cash in lieu of shares of Common Stock or in a manner such that all or some of the shares covered by an award are not issued to a participant or are exchanged for awards that do not involve shares will again immediately become available to be issued pursuant to awards granted under the 2017 ICP. If shares of Common Stock are withheld from payment of an award to satisfy tax obligations with respect to the award, those shares of Common Stock will be treated as shares that have been issued under the 2017 ICP and will not again be available for issuance under the 2017 ICP.

Purpose of the 2017 ICP

The purpose of the 2017 ICP is to attract, retain, and motivate employees, directors, advisors, independent contractors (and their employees and agents, or, in the Plan Administrator’s discretion, any of their employees or contractors), and other persons who provide valuable services to the Company by providing them with the opportunity to acquire a proprietary interest in the Company and to link their interest and efforts to the long-term interests of the Company’s stockholders. The Company believes that increased share ownership by such persons will more closely align stockholder and employee interests by encouraging a greater focus on the profitability of the Company. The Company has reserved and authorized the issuance of up to 10,000,000 shares of the Company’s Common Stock pursuant to awards granted under the 2017 ICP, subject to adjustment in the case of any stock dividend, forward or reverse stock split, split-up, combination or exchange of shares, consolidation, spin-off, reorganization, or recapitalization of shares or any like capital adjustment.

The 2017 ICP includes a variety of forms of awards, including (i) stock options intended to qualify as Incentive Stock Options (“Incentive Stock Options”) under the Section 422 of the United States Internal Revenue Code of 1986, as amended (the “Code”), (ii) stock options not intended to qualify as Incentive Stock Options under the Code (“Nonqualified Stock Options”), (iii) stock appreciation rights, (iv) restricted stock awards, (v) performance stock awards and (vi) other stock-based awards to allow the Company to adapt its incentive compensation program to meet the needs of the Company.

Plan Administration

The 2017 ICP is administered by the Company’s Board of Directors or the Compensation Committee. The Board has full authority, subject to the terms of the 2017 ICP, to establish rules and regulations for the proper administration of the 2017 ICP, to select the employees, directors and consultants to whom awards are granted, and to set the dates of grants, the types of awards that shall be made and the other terms of the awards. When granting awards, the Board will consider such factors as an individual’s duties and present and potential contributions to the Company’s success and such other factors as the Board in its discretion shall deem relevant. The Board may also correct any defect or supply any omission or reconcile any inconsistency in the 2017 ICP or in any agreement relating to an award in the manner and to the extent it shall deem expedient to carry it into effect.

Eligibility

All employees, directors and consultants of the Company are eligible to participate in the 2017 ICP. The selection of those eligible employees, directors and consultants who will receive Restricted Shares is within the discretion of the Board. With respect to awards that are options, directors who are not employees of the Company, proposed non-employee directors, proposed employees, and independent contractors (and their employees and agents, or, in the Plan Administrator’s discretion, any of their employees or contractors) will be eligible to receive only Nonqualified Stock Options.

Corporate Change and Other Adjustments

Upon the occurrence of a Change of Control (as such term is defined in the 2017 ICP), all restrictions and conditions applicable to the Restricted Shares held by participants shall immediately lapse. “Change in Control” shall mean a merger or consolidation in which securities possessing more than fifty percent (50%) of the total combined voting power of the Company’s outstanding securities are transferred to a person or persons different from the persons holding those securities immediately prior to such transaction, or the sale, transfer or other disposition of all or substantially all of the Company’s assets to a non-affiliate of the Company.

The maximum number of shares of Common Stock that may be issued under the 2017 ICP and the maximum number of shares of Common Stock that may be issued to any one individual and the other individual award limitations, as well as the number and price of shares of Common Stock or other consideration subject to an award under the 2017 ICP, will be appropriately adjusted by the Board in the event of changes in the outstanding Common Stock by reason of recapitalizations, reorganizations, mergers, consolidations, combinations, split-ups, split-offs, spin-offs, exchanges or other relevant changes in capitalization or distributions to the holders of Common Stock occurring after an award is granted.

Options

Term of Option.

The term of each option will be as specified by the Board at the date of grant but shall not be exercisable more than ten (10) years after the date of grant.

Option Price.

The option price will be determined by the Board and may not be less than the fair market value of a share of Common Stock on the date that the Option is granted.

Repricing Restrictions.

Except for adjustments for certain changes in the Common Stock, the Board may not, without the approval of our stockholders, amend any outstanding option agreement that evidences an Option grant to lower the Option price (or cancel and replace any outstanding option agreement with an option agreement having a lower Option price).

Size of Grant.

Subject to any limitations set forth in the 2017 ICP, the number of shares of Common Stock for which an Option is granted to an employee, director or consultant will be determined by the Board.

Payment.

The Option price upon exercise may be paid by an optionee in any combination of the following: (a) cash, certified check, bank draft or postal or express money order for an amount equal to the Option price under the Option, (b) an election to make a cashless exercise through a registered broker-dealer (if approved in advance by the Board or one of our executive officers) or (c) any other form of payment which is acceptable to the Board.

Option Agreement.

All Options will be evidenced by a written agreement containing provisions consistent with the 2017 ICP and such other provisions as the Board deems appropriate. The terms and conditions of the respective option agreements need not be identical. The Board may, with the consent of the participant, amend any outstanding option agreement in any manner not inconsistent with the provisions of the 2017 ICP, including amendments that accelerate the exercisability of the Option.

Other Stock-Based Awards

Stock Appreciation Rights.

The Plan Administrator may grant stock appreciation rights, either in tandem with a stock option granted under the 2017 ICP or with respect to a number of shares for which no option has been granted. A stock appreciation right will entitle the holder to receive, with respect to each share of stock as to which the right is exercised, payment in an amount equal to (i) the excess of the Fair Market Value of one share of Common Stock on the date the right is exercised, over (ii) the Fair Market Value of one share of Common Stock on the date the right is granted; provided, however, that in the case of stock appreciation rights granted in tandem with or otherwise related to any award under the 2017 ICP, the grant price per share will be at least the Fair Market Value per share of Common Stock on the date the right was granted. The Plan Administrator may establish a maximum appreciation value payable for stock appreciation rights and such other terms and conditions for such rights as the Plan Administrator may determine, in its sole and absolute discretion.

Restricted Stock Awards.

The Plan Administrator may grant restricted stock awards consisting of shares of Common Stock or denominated in units of Common Stock in such amounts as determined by the Plan Administrator, in its sole and absolute discretion. Restricted stock awards may be subject to (i) forfeiture of such shares upon termination of employment or Service (as defined below) during the applicable restriction period, (ii) restrictions on transferability, (iii) limitations on the right to vote such shares, (iv) limitations on the right to receive dividends with respect to such shares, (v) attainment of certain performance goals, such as those described in Section 5.8(c) of the 2017 ICP, and (vi) such other conditions, limitations, and restrictions as determined by the Plan Administrator, in its sole and absolute discretion, and as set forth in the instrument evidencing the award. These restrictions may lapse separately or in combinations or may be waived at such times, under such circumstances, in such installments, or otherwise as determined by the Plan Administrator, in its sole and absolute discretion. Certificates representing shares of Common Stock subject to restricted stock awards will bear an appropriate legend and may be held subject to escrow and such other conditions as determined by the Plan Administrator until such time as all applicable restrictions lapse.

Performance Share Awards.

Other Stock-Based Awards.

The Plan Administrator may grant such other awards that are payable in, valued in whole or in part by reference to, or otherwise based on or related to shares of Common Stock, as may be deemed by the Plan Administrator to be consistent with the purposes of the 2017 ICP and applicable laws and regulations. Such other awards may include, without limitation, (i) shares of Common Stock awarded purely as a bonus and not subject to any restrictions or conditions, (ii) convertible or exchangeable debt or equity securities, (iii) other rights convertible or exchangeable into shares of Common Stock, and (iv) awards valued by reference to the value of shares of Common Stock or the value of securities or the performance of specified subsidiaries of the Company.

Transfer Restrictions and Forfeiture Obligations.

Pursuant to a Restricted Share award, shares of Common Stock may be issued or delivered to the employee, director or consultant at the time the award is made without any payment to us (other than for any payment amount determined by the Board in its discretion), but such shares of Common Stock will be subject to certain restrictions on the disposition thereof and certain obligations to forfeit and surrender such shares to us as may be determined in the discretion of the Board. The Board may provide that the restrictions on disposition and the obligations to forfeit the shares of Common Stock will lapse based on (i) the attainment of one or more performance measures established by the Board, (ii) the continued employment or service with the Company for a specified period or (iii) the occurrence of any event or the satisfaction of any other condition specified by the Board in its sole discretion. Upon the issuance of shares of Common Stock pursuant to a Restricted Share award, except for the foregoing restrictions and unless otherwise provided, the recipient of the award will have all the rights of a stockholder with respect to such shares, including the right to vote such shares and to receive all dividends paid with respect to such shares, which dividends will accrue and be paid when the forfeiture restrictions applicable to the Restricted Share award have lapsed. At the time of such award, the Board may, in its sole discretion, prescribe additional terms, conditions, or restrictions relating to Restricted Share awards, including rules pertaining to the effect of the termination of employment or service as a director or consultant of a recipient of Restricted Shares (by reason of retirement, disability, death or otherwise) prior to the lapse of any applicable restrictions.

Other Terms and Conditions.

The Board may establish other terms and conditions for the issuance of Restricted Shares under the 2017 ICP.

Amendments

The Board may from time to time amend the 2017 ICP; however, any change that would impair the rights of a participant with respect to an award theretofore granted will require the participant’s consent. Further, without the prior approval of our stockholders, the Board may not amend the 2017 ICP to change the class of eligible individuals or increase the number of shares of Common Stock that may be issued under the 2017 ICP.

2017 Employee Stock Purchase Plan

All initially capitalized terms not otherwise defined here shall have the meanings given to those terms in the 2017 ESPP.

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 the fifteen percent (15%) of the fair market value of a share of Common Stock on the Exercise Date of the current Offering Period or fifteen percent (15%) 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 Plan is terminated by the Board, if earlier.

Purpose of the 2017 ESPP

The purpose of the 2017 ESPP is to encourage employee stock ownership by offering employees rights to purchase our Common Stock at discounted prices and without payment of brokerage costs. Our management believes that the 2017 ESPP offers a convenient means for our employees who might not otherwise own Common Stock to purchase and hold such an investment. Our management also believes that the discounted sale feature of the 2017 ESPP offers a meaningful incentive to participate, and that employees’ continuing economic interests as stockholders in Company performance and success should further enhance entrepreneurial spirit and contribute to the Company’s potential for growth and profitability.

Shares Subject to the 2017 ESPP

The 2017 ESPP covers a maximum of 10,000,000 shares of our Common Stock. The maximum number of shares of Common Stock each participant may purchase during each Purchase Period, as well as the price per share and the number of shares of Common Stock covered by each option under the 2017 ESPP which has not yet been exercised shall be proportionately adjusted for any increase or decrease in the number of issued shares of Common Stock resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the Common Stock, or any other increase or decrease in the number of shares of Common Stock effected without receipt of consideration by the Company; provided, however, that conversion of any convertible securities of the Company shall not be deemed to have been “effected without receipt of consideration.” In the event of the proposed dissolution or liquidation of the Company, the Offering Period then in progress shall be shortened by setting a new Exercise Date that shall terminate immediately prior to the consummation of such proposed dissolution or liquidation. In the event of a proposed sale of all or substantially all of the assets of the Company, or the merger of the Company with or into another corporation, each outstanding option shall be assumed or an equivalent option substituted by the successor corporation or a Parent or Subsidiary of the successor corporation, or a new Exercise Date will be set if such corporation refuses to assume such options.

Certificates evidencing the shares of Common Stock purchased upon exercise of a participant’s option will be issued by the Company’s transfer agent as promptly as practicable after each Exercise Date on which a purchase of shares occurs.

Eligibility

Any individual who is an employee of the Company or a Designated Subsidiary on the first Trading Day of each Offering Period shall be eligible to participate in the 2017 ESPP. Employees who are ineligible to participate include (i) employees who have been employed less than 30 days prior to the applicable Offering Period (ii) employees whose customary employment with the Company is twenty (20) hours or less per week; (iii) employees whose customary employment with the Company for not more than five (5) months in any calendar year; and (iv) employees who are residents of or employed in any jurisdiction in which the 2017 ESPP is prohibited under Applicable Law. An eligible employee may become a participant in the 2017 ESPP by completing a Subscription Agreement authorizing payroll deductions.

No employee shall be granted an option under the 2017 ESPP: (i) to the extent that, immediately after the grant, such employee would own stock of the Company and/or hold outstanding options to purchase such stock possessing five percent (5%) or more of the total combined voting power or value of all classes of the stock of the Company or of any Subsidiary thereof; or (ii) to the extent that his or her rights to purchase stock under all employee stock purchase plans of the Company and its Subsidiaries would accrue at a rate which exceeds Two-Thousand, Four-Hundred Dollars ($2,400) of fair market value of such stock for each calendar year in which such option is outstanding at any time.

Offering Periods

Offering Periods consist of the six (6) months period during which an option shall be granted and may be exercised pursuant to the Plan, commencing on the first Trading Day on or after January 1 and July 1 of each year following the approval of the 2017 ESPP by the Company’s stockholders and the Board of Directors, and terminating on the last Trading Day in the periods ending six (6) months later from each defined date.

Payroll Deductions

At the time a participant files his or her Subscription Agreement, he or she shall elect to have payroll deductions made on each payday during the Offering Period in an amount not exceeding twenty-five percent (25%) of the compensation that he or she receives on each payday during the Offering Period. All payroll deductions made for a participant shall be credited to his or her account under the 2017 ESPP and shall be withheld in whole percentages only. A participant may not make any additional payments into such account. To the extent necessary to comply with Section 423(b)(8) of the Code, a participant’s payroll deductions may be decreased to zero percent (0%) at any time during an Offering Period.

Purchase Price

A participant may purchase shares subject to the terms and conditions of the 2017 ESPP at the lesser of 85% of the Fair Market Value of a share of Common Stock on the Exercise Date of the current Offering Period or 85% of the Fair Market Value of a share of Common Stock on the Grant Date of the current Offering Period; provided however, that the Purchase Price may be adjusted by the Board or the Committee.

Exercise of Option

A participant’s option for the purchase of shares shall be exercised automatically on the Exercise Date, and the maximum number of full shares subject to option shall be purchased for such participant at the applicable Purchase Price with the accumulated payroll deductions in his or her account. No fractional shares shall be purchased; any payroll deductions accumulated in a participant’s account which are not sufficient to purchase a full share shall be retained in the participant’s account for the subsequent Offering Period. Any other monies left over in a participant’s account after the Exercise Date shall be returned to the participant or, at the election of the participant, maintained in the ESPP for use in subsequent Offering Periods. During a participant’s lifetime, a participant’s option to purchase shares hereunder is exercisable only by him or her.

If insufficient shares of Common Stock remain available in any Offering Period, the Company shall make a pro rata allocation of the shares of Common Stock available for purchase on such Enrollment Date or Exercise Date, as applicable, in as uniform a manner as shall be practicable and as it shall determine in its sole discretion to be equitable among all participants exercising options to purchase Common Stock on such Exercise Date, and continue all Offering Periods then in effect or terminate any or all other Offering Periods then in effect.

Withdrawal

A participant may withdraw all payroll deductions credited to his or her account and not yet used to exercise his or her option under the 2017 ESPP at any time by giving written notice to the Company. If a participant withdraws from an Offering Period, payroll deductions shall not resume at the beginning of the succeeding Offering Period unless the participant delivers to the Company a new Subscription Agreement. A participant’s withdrawal from an Offering Period shall not have any effect upon his or her eligibility to participate in any similar plan which may hereafter be adopted by the Company or in succeeding Offering Periods which commence after the termination of the Offering Period from which the participant withdraws.

Termination of Employment

Upon a participant’s ceasing to be an Employee, for any reason, he or she shall be deemed to have elected to withdraw from the 2017 ESPP and the payroll deductions credited to such participant’s account during the Offering Period but not yet used to exercise the option shall be returned to such participant or, in the case of his or her death, and such participant’s option shall be automatically terminated.

Administration

The Board of Directors of the Company or a duly authorized Committee of the Board, as determined in the sole discretion of the Board, shall administer the 2017 ESPP. The Board or the Committee shall have full and exclusive discretionary authority to construe, interpret and apply the terms of the 2017 ESPP, to determine eligibility and to adjudicate all disputed claims filed under the 2017 ESPP. Every finding, decision and determination made by the Board or the Committee shall, to the full extent permitted by law, be final and binding upon all parties.

Transferability

Neither payroll deductions credited to a participant’s account nor any rights with regard to the exercise of an option or to receive shares under the 2017 ESPP may be assigned, transferred, pledged or otherwise disposed of in any way (other than by will, the laws of descent and distribution or to a designated beneficiary) by the participant. Any such attempt at assignment, transfer, pledge or other disposition shall be without effect.

Amendment

Subject to compliance with applicable law, but without shareholder consent and without regard to whether any participant rights may be considered to have been “adversely affected,” the Board or the Committee shall be entitled to make certain amendments to the 2017 ESPP and any rights to acquire Common Stock under the plan. In the event the Board or the Committee determines that the ongoing operation of the 2017 ESPP may result in unfavorable financial accounting consequences, the Board or the Committee may, in its discretion and, to the extent necessary or desirable, modify or amend the ESPP to reduce or eliminate such accounting consequence. Such modifications or amendments shall not require stockholder approval or the consent of any 2017 ESPP participants.

Termination

The Board of Directors or the Committee may at any time and for any reason terminate or amend the 2017 ESPP. Subject to some exceptions, no such termination can affect options previously granted, provided that an Offering Period may be terminated by the Board of Directors or the Committee on any Exercise Date if the Board or the Committee determines that the termination of the Offering Period or the 2017 ESPP is in the best interests of the Company and its stockholders.

Director Compensation

According to the Fiscal Year 2017 Director Compensation Plan, directors received a base director fee of either $12,500 paid quarterly in immediately vesting restricted stock or $10,000 paid quarterly in immediately vesting restricted stock with an additional 100,000 shares of performance based restricted stock paid upon the Common Stock maintaining a $25.00 price per share for a 30-day volume weighted average price. Additional compensation is available to be earned under the Fiscal Year 2017 Director Compensation Plan based on certain Board committee membership criteria.

The table below sets forth the compensation paid to our non-employee directors during the fiscal year ended December 31, 2018.

Director	Fees Earned or Paid in Cash		All Other Compensation		Stock Awards			Total
Dwight Mamanteo	$	-	$	-	$	49,990	(1)	$	49,990
Charles Trapp	$	-	$	-	$	49,990	(2)	$	49,990
Frank Kneller	$	-	$	-	$	49,990	(3)	$	49,990
David Ide	$	-	$	-	$	49,990	(4)	$	49,990
Scott Krinsky	$	-	$	-	$	49,990	(5)	$	49,990
Scott Nussbaum	$	-	$	-	$	49,990	(6)	$	49,990

(1) Pursuant to the Fiscal Year 2017 Director Compensation Plan, Mr. Mamanteo was granted 1,541 shares on March 31, 2018 (valued at $12,501), 1,961 shares on June 30, 2018 (valued at $12,500), 1,724 shares on September 30, 2018 (valued at $12,500), and 3,130 shares on December 31, 2018 (valued at $12,489).

(2) Pursuant to the Fiscal Year 2017 Director Compensation Plan, Mr. Trapp was granted 1,541 shares on March 31, 2018 (valued at $12,501), 1,961 shares on June 30, 2018 (valued at $12,500), 1,724 shares on September 30, 2018 (valued at $12,500), and 3,130 shares on December 31, 2018 (valued at $12,489).

(3) Pursuant to the Fiscal Year 2017 Director Compensation Plan, Mr. Kneller was granted 1,541 shares on March 31, 2018 (valued at $12,501), 1,961 shares on June 30, 2018 (valued at $12,500), 1,724 shares on September 30, 2018 (valued at $12,500), and 3,130 shares on December 31, 2018 (valued at $12,489).

(4) Pursuant to the Fiscal Year 2017 Director Compensation Plan, Mr. Ide was granted 1,541 shares on March 31, 2018 (valued at $12,501), 1,961 shares on June 30, 2018 (valued at $12,500), 1,724 shares on September 30, 2018 (valued at $12,500), and 3,130 shares on December 31, 2018 (valued at $12,489).

(5) Pursuant to the Fiscal Year 2017 Director Compensation Plan, Mr. Krinsky was granted 1,541 shares on March 31, 2018 (valued at $12,501), 1,961 shares on June 30, 2018 (valued at $12,500), 1,724 shares on September 30, 2018 (valued at $12,500), and 3,130 shares on December 31, 2018 (valued at $12,489).

(6) Pursuant to the Fiscal Year 2017 Director Compensation Plan, Mr. Nussbaum was granted 1,541 shares on March 31, 2018 (valued at $12,501), 1,961 shares on June 30, 2018 (valued at $12,500), 1,724 shares on September 30, 2018 (valued at $12,500), and 3,130 shares on December 31, 2018 (valued at $12,489).

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The following table sets forth certain information regarding our Common Stock beneficially owned as of March 29, 2019, for (i) each stockholder known to be the beneficial owner of 5% or more of our outstanding Common Stock, (ii) each executive officer and director, and (iii) all executive officers and directors as a group. In general, a person is deemed to be a “beneficial owner” of a security if that person has or shares the power to vote or direct the voting of such security, or the power to dispose or to direct the disposition of such security. A person is also deemed to be a beneficial owner of any securities of which the person has the right to acquire beneficial ownership within sixty (60) days. Shares of Common Stock subject to options, warrants or convertible securities exercisable or convertible within sixty (60) days of the date of determination are deemed outstanding for computing the percentage of the person or entity holding such options, warrants or convertible securities but are not deemed outstanding for computing the percentage of any other person. To the best of our knowledge, subject to community and marital property laws, all persons named herein have sole voting and investment power with respect to such shares, except as otherwise noted.

Name and Address of Beneficial Owner⁽¹⁾	Number of Shares Beneficially Owned			Percentage of Outstanding Common Stock⁽²⁾
Executive Officers and Directors

Dwight Mamanteo — Chairman of the Board		71,960	⁽³⁾		5.2	%

David Ide — Director		33,602	⁽⁴⁾		2.4	%

Charles F. Trapp — Director		65,632	⁽⁵⁾		4.7	%

Frank Kneller — Director		23,918	⁽⁶⁾		1.7	%

Scott Nussbaum — Director		39,566	⁽⁷⁾		2.9	%

Scott Krinsky — Director		12,636	⁽⁸⁾		*

Richard Geib — President and Chief Executive Officer		57,979	⁽⁹⁾		4.2	%

Brian Gelman — Chief Financial Officer		846	⁽¹⁰⁾		*

Michael Olsson — Executive Vice President of Performance Fluids		1,200	⁽¹¹⁾		*

Dennis Kelly — Executive Vice President of Chemical Products		6,093	⁽¹²⁾		*

Executive Officers and Directors as a group (10 persons)		313,432			22.7	%

5% Stockholders

Wynnefield Capital Management, LLC, 450 Seventh Avenue, Suite 509, New York, NY 10123		474,672	⁽¹³⁾		34.3	%

Represents less than 1%

(1)

Unless otherwise indicated, the business address of each individual named is P.O. Box 387, Institute, WV 25112 and our telephone number is (304) 400-4006.

(2)

Based on 1,383,731 shares of Common Stock outstanding as of March 29, 2019.

(3)

Includes (i) 400 shares of Common Stock issuable upon the exercise of options at $128.75 per share until January 15, 2024, and (ii) 120 shares of Common Stock issuable upon the exercise of options at $82.50 per share until September 30, 2024. Mr. Mamanteo also holds the following unvested stock, which is not included in the table above: (x) 1,300 unvested shares of Common Stock, which shares shall vest 100% upon the Common Stock maintaining a $250.00 per share stock price for a 30-trading day volume weighted average price (“VWAP”) duration, (y) 2,800 unvested shares of Common Stock, which shares shall vest 100% upon the Common Stock maintaining a $25.00 per share stock price for a 30-trading day VWAP duration, and (z) 2,400 shares of restricted common stock, 1,200 shares of which shall vest upon the Company’s adjusted EBITDA being positive for the first quarter following such grant, and 1,200 shares of which shall vest upon the Company’s net income being positive for the first quarter following such grant.

(4)

Includes (i) 80 shares of Common Stock issuable upon the exercise of options at $86.25 per share until June 30, 2024, and (ii) 400 shares of Common Stock issuable upon the exercise of options at $37.50 per share until December 18, 2024. Mr. Ide also holds the following unvested stock, which is not included in the table above: (x) 83 unvested shares of Common Stock granted pursuant to the Company’s Fiscal Year 2015 Director Compensation Plan, which shares shall vest 100% upon the Common Stock maintaining a $250.00 per share stock price for a 30-trading day VWAP duration, (y) 2,800 unvested shares of Common Stock, which shares shall vest 100% upon the Common Stock maintaining a $25.00 per share stock price for a 30-trading day VWAP duration, and (z) 2,400 shares of restricted common stock, 1,200 shares of which shall vest upon the Company’s adjusted EBITDA being positive for the first quarter following such grant, and 1,200 shares of which shall vest upon the Company’s net income being positive for the first quarter following such grant.

(5)

Includes (i) 400 shares of Common Stock issuable upon the exercise of options at $21.25 per share until May 22, 2025, (ii) 2,000 shares of Common Stock issuable upon the exercise of warrants at $6.25 per share until April 4, 2021 and (iii) 3,750 shares of Common Stock issuable upon the exercise of warrants at $10.00 per share until December 27, 2019. Mr. Trapp also holds the following unvested stock, which is not included in the table above: (x) 1,405 unvested shares of Common Stock granted pursuant to the Company’s Fiscal Year 2015 Director Compensation Plan, which shares shall vest 100% upon the Common Stock maintaining a $250.00 per share stock price for a 30-trading day VWAP duration, (y) 2,800 unvested shares of Common Stock which shares shall vest 100% upon the Common Stock maintaining a $25.00 per share stock price for a 30-trading day VWAP duration, and (z) 2,400 shares of restricted common stock, 1,200 shares of which shall vest upon the Company’s adjusted EBITDA being positive for the first quarter following such grant, and 1,200 shares of which shall vest upon the Company’s net income being positive for the first quarter following such grant.

(6)

Includes 400 shares of Common Stock issuable upon the exercise of options at $17.50 per share until August 27, 2025. Mr. Kneller also holds the following unvested stock, which is not included in the table above: (i) 2,800 unvested shares of Common Stock which shares shall vest 100% upon the Common Stock maintaining a $25.00 per share stock price for a 30-trading day VWAP duration, and (ii) 2,400 shares of restricted common stock, 1,200 shares of which shall vest upon the Company’s adjusted EBITDA being positive for the first quarter following such grant, and 1,200 shares of which shall vest upon the Company’s net income being positive for the first quarter following such grant.

	(7)	Mr. Nussbaum also holds the following unvested stock, which is not included in the table above: (i) 8,800 unvested shares of Common Stock which shares shall vest 100% upon the Common Stock maintaining a $25.00 per share stock price for a 30-trading day VWAP duration, and (ii) 2,400 shares of restricted common stock, 1,200 shares of which shall vest upon the Company’s adjusted EBITDA being positive for the first quarter following such grant, and 1,200 shares of which shall vest upon the Company’s net income being positive for the first quarter following such grant.

	(8)	Mr. Krinsky holds the following unvested stock, which is not included in the table above: (i) 8,800 unvested shares of Common Stock which shares shall vest 100% upon the Common Stock maintaining a $25.00 per share stock price for a 30-trading day VWAP duration, and (ii) 2,400 shares of restricted common stock, 1,200 shares of which shall vest upon the Company’s adjusted EBITDA being positive for the first quarter following such grant, and 1,200 shares of which shall vest upon the Company’s net income being positive for the first quarter following such grant.

	(9)	Mr. Geib holds the following unvested stock, which is not included in the table above: (i) 8,000 unvested shares of Common Stock, which shares shall vest 100% upon the Common Stock maintaining a $25.00 per share stock price for a 30-trading day VWAP duration, and (ii) 1,600 shares of restricted common stock, 800 shares of which shall vest upon the Company’s adjusted EBITDA being positive for the first quarter following such grant, and 800 shares of which shall vest upon the Company’s net income being positive for the first quarter following such grant.

(10)

Mr. Gelman holds the following unvested stock, which is not included in the table above: (i) 6,000 unvested shares of Common Stock, which shares shall vest 100% upon the Common Stock maintaining a $25.00 per share stock price for a 30-trading day VWAP duration, and (ii) 2,800 shares of restricted common stock, 1,400 shares of which shall vest upon the Company’s adjusted EBITDA being positive for the first quarter following such grant, and 1,400 shares of which shall vest upon the Company’s net income being positive for the first quarter following such grant.

(11)

Mr. Olsson holds the following unvested stock, which is not included in the table above: (i) 4,000 unvested shares of Common Stock, which shares shall vest 100% upon the Common Stock maintaining a $25.00 per share stock price for a 30-trading day VWAP duration, and (ii) 2,800 shares of restricted common stock, 1,400 shares of which shall vest upon the Company’s adjusted EBITDA being positive for the first quarter following such grant, and 1,400 shares of which shall vest upon the Company’s net income being positive for the first quarter following such grant.

(12)

Mr. Kelly holds the following unvested stock, which is not included in the table above: 2,000 shares of restricted common stock, 1,000 shares of which shall vest upon the Company’s adjusted EBITDA being positive for the first quarter following such grant, and 1,000 shares of which shall vest upon the Company’s net income being positive for the first quarter following such grant.

(13)

Includes an aggregate of 80,000 shares of Common Stock issuable upon the exercise of warrants at $6.25 per share until April 4, 2021, with respect to one warrant to purchase 40,000 shares, and until April 30, 2021, with respect to one warrant to purchase 40,000 shares. Entities included: Wynnefield Partners Small Cap Value, L.P. I, Wynnefield Partners Small Cap Value, L.P., Wynnefield Small Cap Value Offshore Fund, Ltd., and Wynnefield Capital, Inc. Profit Sharing Plan. Information regarding such entities is based on a Schedule 13D/A filed with the SEC on April 9, 2018. Mr. Mamanteo, Chairman of our Board, serves as a Portfolio Manager at Wynnefield Capital, Inc.

Equity Compensation Plan Information
Plan category	Number of securities to be issued upon exercise of granted options, warrants and rights (a)		Weighted-average exercise price of granted options, warrants and rights (b)		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c)
Equity compensation plans approved by security holders:

2007 Stock Incentive Plan		53,181	$	75.00		-

2012 Equity Incentive Plan		45,986	$	100.00		6,014

2017 Equity Incentive Plan		32,555	$	7.20		47,445

2017 Employee Stock Purchase Plan		3,778	$	5.38		76,222

Equity compensation plans not approved by security holders:

None		-		-		-
Total		135,500	$	6.66		129,681

Change in Control

Except as set forth herein, there are no arrangements known to us, the operation of which may at a subsequent date result in a change in control of the Company.

Certain Relationships and Related Transactions

Other than compensation arrangements, during the past two years, there have been no transactions, whether directly or indirectly, between our company and any of our officers, directors, or beneficial owners of more than 5% of our outstanding Common Stock or any of the immediate family members of any of the foregoing that involved amounts that exceeded or will exceed the lesser of 1% of our total assets or $120,000 other than as described below:

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 (see Item 5), 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.

Our Audit Committee considers and approves or disapproves any related person transaction.

Director Independence

The Board of Directors has determined that each of the following qualifies as an “independent director” as defined by Section 10A(m)(3)(ii) of the Exchange Act and Rule 5065(a)(2) of the NASDAQ Marketplace Rules: Dwight Mamanteo, Charles Trapp, Frank Kneller, Richard Geib and Scott Nussbaum.

Richard Geib does not qualify as an “independent director,” as Mr. Geib is currently the Chief Executive Officer of the Company.

Item 14. Principal Accounting Fees and Services

The Company engaged KMJ Corbin & Company LLP (“KMJ Corbin”) to serve as its independent registered public accounting firm for the fiscal years ended December 31, 2018 and 2017.

Set forth below are the fees paid to KMJ Corbin for each of the last two fiscal years:

Audit Fees

Set below are the aggregate fees billed for each of the last two fiscal years for professional services rendered by KMJ Corbin for the audit of the Company’s annual financial statements and review of financial statements included in the Company’s Quarterly Reports on Form 10-Q or services that are normally provided by KMJ Corbin in connection with the Company’s statutory and regulatory filings or engagements for those fiscal years.

Auditor:		2018				2017
KMJ Corbin & Company LLP		$	105,695			$	122,955

Audit-Related Fees

Set forth below are the aggregate fees billed in each of the last two fiscal years for assurance and related services by KMJ Corbin that are reasonably related to the performance of the audit or review of the Company’s financial statements and are not reported under “Audit Fees” above.

Auditor:		2018				2017
KMJ Corbin & Company LLP		$	-			$	33,000

Tax Fees

Set forth below are the aggregate fees billed in each of the last two fiscal years for professional services rendered by KMJ Corbin for tax compliance, tax advice, and tax planning.

			2018				2017
KMJ Corbin & Company LLP		$	-			$	-

All Other Fees

Set forth below are the aggregate fees billed in each of the last two fiscal years for products and services provided by KMJ Corbin, other than the services reported above.

			2018				2017
KMJ Corbin & Company LLP		$	-			$	-

Pre-Approval Policies and Procedures

Before an independent registered public accounting firm is engaged by the Company to render audit or permissible non-audit services, the engagement is approved by the Audit Committee of the Company’s Board of Directors.

PART IV

Item 15. Exhibits, Financial Statement Schedules

(a)

The following documents are filed as part of this Annual Report:

(1)

All Financial Statements

The following have been included under Item 8 of Part II of this Annual Report.

Report of Independent Registered Public Accounting Firm

Consolidated Balance Sheets as of December 31, 2018 and 2017

Consolidated Statements of Operations for the years ended December 31, 2018 and 2017

Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2018 and 2017

Consolidated Statements of Cash Flows for the years ended December 31, 2018 and 2017

Notes to Consolidated Financial Statements

(2)

Financial Statement Schedules

Financial statement schedules have been omitted because they are either not applicable or the required information is included in the financial statements or notes thereto.

(3)

Exhibits

The exhibits listed in the accompanying index to exhibits are filed or incorporated by reference as part of this Annual Report.

(b)

The following are exhibits to this Annual Report and, if incorporated by reference, we have indicated the document previously filed with the SEC in which the exhibit was included.

Certain of the agreements filed as exhibits to this Annual Report contain representations and warranties by the parties to the agreements that have been made solely for the benefit of the parties to the agreement. These representations and warranties:

•

may have been qualified by disclosures that were made to the other parties in connection with the negotiation of the agreements, which disclosures are not necessarily reflected in the agreements;

•

may apply standards of materiality that differ from those of a reasonable investor; and

•

were made only as of specified dates contained in the agreements and are subject to subsequent developments and changed circumstances.

Accordingly, these representations and warranties may not describe the actual state of affairs as of the date that these representations and warranties were made or at any other time. Investors should not rely on them as statements of fact.

Exhibit No.		Description
2.1		Agreement and Plan of Merger, dated October 31, 2011, between Environmental Credits, Ltd. and GlyEco, Inc., effective November 21, 2011.⁽¹⁾
2.2		Agreement and Plan of Merger, dated November 21, 2011, by and among GlyEco, Inc., GRT Acquisition, Inc. and Global Recycling Technologies, Ltd. ⁽¹⁾
2.3		Stock Purchase Agreement by and between GlyEco, Inc., WEBA Technology Corp., and the shareholders of WEBA Technology Corp., dated December 27, 2016. ⁽²⁰⁾
2.4		Stock Purchase Agreement by and between GlyEco, Inc., Recovery Solutions & Technologies, Inc., and the shareholders of Recovery Solutions & Technologies, Inc., dated December 27, 2016.⁽²⁰⁾
3.1(i)(a)		Articles of Incorporation of GlyEco, Inc., dated and filed with the Secretary of State of Nevada on October 21, 2011.⁽¹⁾
3.1(i)(b)		Certificate of Merger, dated October 31, 2011, executed by Environmental Credits Ltd. and GlyEco, Inc., filed with the Secretary of State of Delaware on November 8, 2011 and effective November 21, 2011.⁽¹⁾
3.1(i)(c)		Articles of Merger, dated October 31, 2011, executed by Environmental Credits, Ltd. and GlyEco., filed with the Secretary of State of Nevada on November 3, 2011 and effective November 21, 2011.⁽¹⁾
3.1(i)(d)		Certificate of Designation of Series AA Preferred Stock.⁽¹⁾
3.1(ii)		Amended and Restated Bylaws of GlyEco, Inc., effective as of August 5, 2014.⁽¹⁵⁾
4.1		Note Purchase Agreement, dated August 9, 2008, by and between Global Recycling Technologies, Ltd. and IRA FBO Leonid Frenkel, Pershing LLC, as Custodian.⁽²⁾
4.2		Forbearance Agreement, dated August 11, 2010, by Global Recycling Technologies, Ltd. and IRA FBO Leonid Frenkel, Pershing LLC, as Custodian.⁽²⁾
4.3		Second Forbearance Agreement, dated May 25, 2011, Global Recycling Technologies, Ltd. and IRA FBO Leonid Frenkel, Pershing LLC, as Custodian.⁽²⁾

4.4		Form of Subscription Rights Certificate for 2016 Rights Offering⁽¹⁷⁾
10.1		Asset Purchase Agreement, dated May 24, 2012, by and among MMT Technologies, Inc. (the Seller), Otho N. Fletcher, Jr. (the Selling Principal), GlyEco Acquisition Corp. #3, an Arizona corporation and wholly-owned subsidiary of GlyEco, Inc.⁽⁵⁾
10.2		Asset Purchase Agreement, dated October 3, 2012, by and among Antifreeze Recycling, Inc. (the Seller), Robert J. Kolhoff (the Selling Principal), GlyEco Acquisition Corp. #7, an Arizona corporation and wholly-owned subsidiary of GlyEco, Inc. (the Buyer). ⁽⁶⁾
10.3		Asset Purchase Agreement, dated October 3, 2012, by and among Renew Resources, LLC (the Seller), Todd M. Bernard (the Selling Principal), GlyEco Acquisition Corp. #5, an Arizona corporation and wholly-owned subsidiary of GlyEco, Inc. (the Buyer). ⁽⁷⁾

10.4		Novation Agreement and Amendment No. 1 to Asset Purchase Agreement, dated October 26, 2012, by and among Antifreeze Recycling, Inc., Robert J. Kolhoff, GlyEco Acquisition Corp. #7, and GlyEco Acquisition Corp. #6.⁽⁸⁾
10.5		Amendment No. 1 to Asset Purchase Agreement, dated October 26, 2012, by and among Renew Resources, LLC, Todd M. Bernard, and GlyEco Acquisition Corp. #5⁽⁹⁾
10.6		Amendment No. 2 to Asset Purchase Agreement, effective January 31, 2013, by and among Renew Resources, LLC, Todd M. Bernard, and GlyEco Acquisition Corp. #5 ⁽¹⁰⁾
10.7		Asset Purchase Agreement, dated December 31, 2012, by and among Evergreen Recycling Co., Inc., an Indiana corporation (the Seller), Thomas Shiveley (the Selling Principal), and GlyEco Acquisition Corp. #2, an Arizona corporation and wholly-owned subsidiary of GlyEco, Inc. (the Buyer). ⁽¹¹⁾
10.8		Assignment of Intellectual Property, dated December 10, 2012, by and among Joseph A. Ioia and GlyEco Acquisition Corp. #4, Inc. ⁽¹²⁾
10.9		Agreement and Plan of Merger, dated September 27, 2013, by and among GlyEco, Inc., a Nevada corporation, GlyEco Acquisition Corp. #7, an Arizona corporation and wholly owned subsidiary of GlyEco, Inc., GSS Automotive Recycling, Inc., a Maryland corporation, Joseph Getz, an individual, and John Stein, an individual.⁽¹³⁾
10.10		Note Conversion Agreement and Extension, dated April 3, 2012, by and between GlyEco, Inc. and IRA FBO Leonid Frenkel, Pershing LLC as Custodian.⁽¹⁴⁾

10.11		Asset Purchase Agreement, dated June 15, 2016, by and among GlyEco Acquisition Corp., #3 and Brian’s On-Site Recycling, Inc.⁽²⁰⁾
10.12		Amended and Restated Asset Transfer Agreement, by and between GlyEco, Inc. and Union Carbide Corporation, dated August 23, 2016, as amended on December 1, 2016.⁽²⁰⁾
10.13		Form of 5% Notes Subscription Agreement.⁽²⁰⁾
10.14		Form of 8% Notes Subscription Agreement.⁽²⁰⁾
10.15⁺		Employment Agreement with Ian Rhodes, dated December 30, 2016.⁽²⁰⁾
10.16⁺		Employment Agreement with Richard Geib, dated December 28, 2016⁽²⁰⁾
10.17⁺		Consulting Agreement, dated September 4, 2015, between GlyEco, Inc. and David Ide.⁽¹⁶⁾
10.18⁺		Employment Agreement, dated February 12, 2016, between GlyEco, Inc. and Ian Rhodes.⁽¹⁷⁾
10.19⁺		Employment Agreement, dated February 12, 2016, between GlyEco, Inc. and Grant Sahag.⁽¹⁷⁾
10.20⁺		Amendment No. 1 to Employment Agreement, dated May 1, 2016, by and between GlyEco, Inc. and Grant Sahag.⁽¹⁸⁾
10.21⁺		2007 Stock Option Plan⁽³⁾
10.22⁺		2012 Equity Incentive Plan⁽³⁾
10.23⁺		First Amendment to GlyEco, Inc. 2012 Equity Incentive Plan.⁽⁴⁾
10.24⁺		2017 Incentive Compensation Plan
10.25⁺		2017 Employee Stock Purchase Plan
10.26		Bill of Sale, dated March 31, 2017, issued to NFS Leasing, Inc. ⁽²¹⁾
10.27		Master Equipment Lease, dated March 31, 2017, by and among GlyEco, Inc., Recovery Solutions &Technologies, Inc. and NFS Leasing, Inc. ⁽²¹⁾
10.28		Security Agreement, dated March 31, 2017, between GlyEco, Inc. and NFS Leasing, Inc. ⁽²¹⁾
10.29		Security Agreement, dated March 31, 2017, between Recovery Solutions &Technologies, Inc. and NFS Leasing, Inc. ⁽²¹⁾

10.30		Amended and Restated Security Agreement, dated March 1, 2018, between GlyEco, Inc. and NFS Leasing, Inc. ⁽²²⁾
10.31		Amended and Restated Security Agreement, dated March 1, 2018, between Recovery Solutions &Technologies, Inc. and NFS Leasing, Inc. ⁽²²⁾
14.1		Code of Business Conduct and Ethics
21.1		List of Subsidiaries of the Company.⁽²³⁾
23.1*		Consent of KMJ Corbin & Company LLP
31.1*		Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2*		Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*		Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2*		Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*		XBRL Instance Document
101.SCH*		XBRL Taxonomy Schema
101.CAL*		XBRL Taxonomy Calculation Linkbase
101.DEF*		XBRL Taxonomy Definition Linkbase
101.LAB*		XBRL Taxonomy Label Linkbase
101.PRE*		XBRL Taxonomy Presentation Linkbase

⁺	Management Contracts and Compensatory Plans, Contracts or Arrangements.
*	Filed herewith

In accordance with SEC Release 33-8238, Exhibits 32.1 and 32.2 are being furnished and not filed.

(1)	Filed as an exhibit to the Form 8-K filed by the Company with the SEC on November 28, 2011, and incorporated by reference herein.
(2)	Filed as an exhibit to the Form 8-K/A filed by the Company with the SEC on January 18, 2012, and incorporated by reference herein.
(3)	Filed as an exhibit to the Form 10-K filed by the Company with the SEC on April 14, 2012, and incorporated by reference herein.
(4)	Filed as an exhibit to the Form 10-Q filed by the Company with the SEC on August 14, 2012, and incorporated by reference herein.
(5)	Filed as an exhibit to the Form 8-K filed by the Company with the SEC on May 30, 2012, and incorporated by reference herein.
(6)	Filed as an exhibit to the Form 8-K filed by the Company with the SEC on October 9, 2012, and incorporated by reference herein.
(7)	Filed as an exhibit to the Form 8-K filed by the Company with the SEC on October 9, 2012, and incorporated by reference herein.
(8)	Filed as an exhibit to the Form 8-K filed by the Company with the SEC on November 1, 2012, and incorporated by reference herein.
(9)	Filed as an exhibit to the Form 8-K filed by the Company with the SEC on November 2, 2012, and incorporated by reference herein.
(10)	Filed as an exhibit to the Form 8-K filed by the Company with the SEC on February 6, 2013, and incorporated by reference herein.
(11)	Filed as an exhibit to the Form 8-K filed by the Company with the SEC on January 4, 2013, and incorporated by reference herein.
(12)	Filed as an exhibit to the Form 8-K filed by the Company with the SEC on December 13, 2012, and incorporated by reference herein.
(13)	Filed as an exhibit to the Form 8-K filed by the Company with the SEC on October 2, 2013 and incorporated by reference herein.
(14)	Filed as an exhibit to the Form 8-K filed by the Company with the SEC on May 30, 2012, and incorporated by reference herein.
(15)	Filed as an exhibit to the Form 8-K filed by the Company with the SEC on August 8, 2014, and incorporated by reference herein.
(16)	Filed as an exhibit to the Form 8-K filed by the Company with the SEC on September 11, 2015, and incorporated by reference herein.
(17)	Filed as an exhibit to the Form S-1/A filed by the Company with the SEC on November 24, 2016, and incorporated by reference herein.
(18)	Filed as an exhibit to the Form 8-K filed by the Company with the SEC on May 5, 2016, and incorporated by reference herein.
(19)	Filed as an exhibit to the Form 8-K filed by the Company with the SEC on June 24, 2016, and incorporated by reference herein.
(20)	Filed as an exhibit to the Form 8-K filed by the Company with the SEC on January 5, 2017, and incorporated by reference herein.
(21)	Filed as an exhibit to the Form 8-K filed by the Company with the SEC on April 17, 2017, and incorporated by reference herein.
(22)	Filed as an exhibit to the Form 8-K filed by the Company with the SEC on March 7, 2018, and incorporated by reference herein.
(23)	Filed as an exhibit to the Annual Report on Form 10-K filed by the Company with the SEC on April 6, 2017, and incorporated by reference herein.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	GLYECO, INC.

	By: /s/ Richard Geib
Date: April 1, 2019	Richard Geib Chief Executive Officer and Director (Principal Executive Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature	Capacity	Date

/s/ Richard Geib
Richard Geib	Chief Executive Officer and Director (Principal Executive Officer)	April 1, 2019

/s/ Brian Gelman
Brian Gelman	Chief Financial Officer	April 1, 2019
	(Principal Financial Officer and Principal Accounting Officer)

/s/ Dwight Mamanteo
Dwight Mamanteo	Chairman of the Board of Directors	April 1, 2019

/s/ Charles Trapp		April 1, 2019
Charles Trapp	Director

/s/ Frank Kneller		April 1, 2019
Frank Kneller	Director

/s/ Scott Nussbaum		April 1, 2019
Scott Nussbaum	Director

Index of Exhibits

Exhibit No.		Description
2.1		Agreement and Plan of Merger, dated October 31, 2011, between Environmental Credits, Ltd. and GlyEco, Inc., effective November 21, 2011.⁽¹⁾
2.2		Agreement and Plan of Merger, dated November 21, 2011, by and among GlyEco, Inc., GRT Acquisition, Inc. and Global Recycling Technologies, Ltd. ⁽¹⁾
2.3		Stock Purchase Agreement by and between GlyEco, Inc., WEBA Technology Corp., and the shareholders of WEBA Technology Corp., dated December 27, 2016. ⁽²⁰⁾
2.4		Stock Purchase Agreement by and between GlyEco, Inc., Recovery Solutions & Technologies, Inc., and the shareholders of Recovery Solutions & Technologies, Inc., dated December 27, 2016.⁽²⁰⁾
3.1(i)(a)		Articles of Incorporation of GlyEco, Inc., dated and filed with the Secretary of State of Nevada on October 21, 2011.⁽¹⁾
3.1(i)(b)		Certificate of Merger, dated October 31, 2011, executed by Environmental Credits Ltd. and GlyEco, Inc., filed with the Secretary of State of Delaware on November 8, 2011 and effective November 21, 2011.⁽¹⁾
3.1(i)(c)		Articles of Merger, dated October 31, 2011, executed by Environmental Credits, Ltd. and GlyEco., filed with the Secretary of State of Nevada on November 3, 2011 and effective November 21, 2011.⁽¹⁾
3.1(i)(d)		Certificate of Designation of Series AA Preferred Stock.⁽¹⁾
3.1(ii)		Amended and Restated Bylaws of GlyEco, Inc., effective as of August 5, 2014.⁽¹⁵⁾
4.1		Note Purchase Agreement, dated August 9, 2008, by and between Global Recycling Technologies, Ltd. and IRA FBO Leonid Frenkel, Pershing LLC, as Custodian.⁽²⁾
4.2		Forbearance Agreement, dated August 11, 2010, by Global Recycling Technologies, Ltd. and IRA FBO Leonid Frenkel, Pershing LLC, as Custodian.⁽²⁾
4.3		Second Forbearance Agreement, dated May 25, 2011, Global Recycling Technologies, Ltd. and IRA FBO Leonid Frenkel, Pershing LLC, as Custodian.⁽²⁾

4.4		Form of Subscription Rights Certificate for 2016 Rights Offering⁽¹⁷⁾
10.1		Asset Purchase Agreement, dated May 24, 2012, by and among MMT Technologies, Inc. (the Seller), Otho N. Fletcher, Jr. (the Selling Principal), GlyEco Acquisition Corp. #3, an Arizona corporation and wholly-owned subsidiary of GlyEco, Inc.⁽⁵⁾
10.2		Asset Purchase Agreement, dated October 3, 2012, by and among Antifreeze Recycling, Inc. (the Seller), Robert J. Kolhoff (the Selling Principal), GlyEco Acquisition Corp. #7, an Arizona corporation and wholly-owned subsidiary of GlyEco, Inc. (the Buyer). ⁽⁶⁾
10.3		Asset Purchase Agreement, dated October 3, 2012, by and among Renew Resources, LLC (the Seller), Todd M. Bernard (the Selling Principal), GlyEco Acquisition Corp. #5, an Arizona corporation and wholly-owned subsidiary of GlyEco, Inc. (the Buyer). ⁽⁷⁾

10.4		Novation Agreement and Amendment No. 1 to Asset Purchase Agreement, dated October 26, 2012, by and among Antifreeze Recycling, Inc., Robert J. Kolhoff, GlyEco Acquisition Corp. #7, and GlyEco Acquisition Corp. #6.⁽⁸⁾
10.5		Amendment No. 1 to Asset Purchase Agreement, dated October 26, 2012, by and among Renew Resources, LLC, Todd M. Bernard, and GlyEco Acquisition Corp. #5⁽⁹⁾
10.6		Amendment No. 2 to Asset Purchase Agreement, effective January 31, 2013, by and among Renew Resources, LLC, Todd M. Bernard, and GlyEco Acquisition Corp. #5 ⁽¹⁰⁾
10.7		Asset Purchase Agreement, dated December 31, 2012, by and among Evergreen Recycling Co., Inc., an Indiana corporation (the Seller), Thomas Shiveley (the Selling Principal), and GlyEco Acquisition Corp. #2, an Arizona corporation and wholly-owned subsidiary of GlyEco, Inc. (the Buyer). ⁽¹¹⁾
10.8		Assignment of Intellectual Property, dated December 10, 2012, by and among Joseph A. Ioia and GlyEco Acquisition Corp. #4, Inc. ⁽¹²⁾
10.9		Agreement and Plan of Merger, dated September 27, 2013, by and among GlyEco, Inc., a Nevada corporation, GlyEco Acquisition Corp. #7, an Arizona corporation and wholly owned subsidiary of GlyEco, Inc., GSS Automotive Recycling, Inc., a Maryland corporation, Joseph Getz, an individual, and John Stein, an individual.⁽¹³⁾
10.10		Note Conversion Agreement and Extension, dated April 3, 2012, by and between GlyEco, Inc. and IRA FBO Leonid Frenkel, Pershing LLC as Custodian.⁽¹⁴⁾

10.11		Asset Purchase Agreement, dated June 15, 2016, by and among GlyEco Acquisition Corp., #3 and Brian’s On-Site Recycling, Inc.⁽²⁰⁾
10.12		Amended and Restated Asset Transfer Agreement, by and between GlyEco, Inc. and Union Carbide Corporation, dated August 23, 2016, as amended on December 1, 2016.⁽²⁰⁾
10.13		Form of 5% Notes Subscription Agreement.⁽²⁰⁾
10.14		Form of 8% Notes Subscription Agreement.⁽²⁰⁾
10.15⁺		Employment Agreement with Ian Rhodes, dated December 30, 2016.⁽²⁰⁾
10.16⁺		Employment Agreement with Richard Geib, dated December 28, 2016⁽²⁰⁾
10.17⁺		Consulting Agreement, dated September 4, 2015, between GlyEco, Inc. and David Ide.⁽¹⁶⁾
10.18⁺		Employment Agreement, dated February 12, 2016, between GlyEco, Inc. and Ian Rhodes.⁽¹⁷⁾
10.19⁺		Employment Agreement, dated February 12, 2016, between GlyEco, Inc. and Grant Sahag.⁽¹⁷⁾
10.20⁺		Amendment No. 1 to Employment Agreement, dated May 1, 2016, by and between GlyEco, Inc. and Grant Sahag.⁽¹⁸⁾
10.21⁺		2007 Stock Option Plan⁽³⁾
10.22⁺		2012 Equity Incentive Plan⁽³⁾
10.23⁺		First Amendment to GlyEco, Inc. 2012 Equity Incentive Plan.⁽⁴⁾
10.24⁺		2017 Incentive Compensation Plan
10.25⁺		2017 Employee Stock Purchase Plan
10.26		Bill of Sale, dated March 31, 2017, issued to NFS Leasing, Inc. ⁽²¹⁾
10.27		Master Equipment Lease, dated March 31, 2017, by and among GlyEco, Inc., Recovery Solutions &Technologies, Inc. and NFS Leasing, Inc. ⁽²¹⁾
10.28		Security Agreement, dated March 31, 2017, between GlyEco, Inc. and NFS Leasing, Inc. ⁽²¹⁾
10.29		Security Agreement, dated March 31, 2017, between Recovery Solutions &Technologies, Inc. and NFS Leasing, Inc. ⁽²¹⁾

10.30		Amended and Restated Security Agreement, dated March 1, 2018, between GlyEco, Inc. and NFS Leasing, Inc. ⁽²²⁾
10.31		Amended and Restated Security Agreement, dated March 1, 2018, between Recovery Solutions &Technologies, Inc. and NFS Leasing, Inc. ⁽²²⁾
14.1		Code of Business Conduct and Ethics
21.1		List of Subsidiaries of the Company.⁽²³⁾
23.1*		Consent of KMJ Corbin & Company LLP
31.1*		Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2*		Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*		Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2*		Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*		XBRL Instance Document
101.SCH*		XBRL Taxonomy Schema
101.CAL*		XBRL Taxonomy Calculation Linkbase
101.DEF*		XBRL Taxonomy Definition Linkbase
101.LAB*		XBRL Taxonomy Label Linkbase
101.PRE*		XBRL Taxonomy Presentation Linkbase

⁺	Management Contracts and Compensatory Plans, Contracts or Arrangements.
*	Filed herewith

In accordance with SEC Release 33-8238, Exhibits 32.1 and 32.2 are being furnished and not filed.

(1)	Filed as an exhibit to the Form 8-K filed by the Company with the SEC on November 28, 2011, and incorporated by reference herein.
(2)	Filed as an exhibit to the Form 8-K/A filed by the Company with the SEC on January 18, 2012, and incorporated by reference herein.

(3)	Filed as an exhibit to the Form 10-K filed by the Company with the SEC on April 14, 2012, and incorporated by reference herein.
(4)	Filed as an exhibit to the Form 10-Q filed by the Company with the SEC on August 14, 2012, and incorporated by reference herein.
(5)	Filed as an exhibit to the Form 8-K filed by the Company with the SEC on May 30, 2012, and incorporated by reference herein.
(6)	Filed as an exhibit to the Form 8-K filed by the Company with the SEC on October 9, 2012, and incorporated by reference herein.
(7)	Filed as an exhibit to the Form 8-K filed by the Company with the SEC on October 9, 2012, and incorporated by reference herein.
(8)	Filed as an exhibit to the Form 8-K filed by the Company with the SEC on November 1, 2012, and incorporated by reference herein.
(9)	Filed as an exhibit to the Form 8-K filed by the Company with the SEC on November 2, 2012, and incorporated by reference herein.
(10)	Filed as an exhibit to the Form 8-K filed by the Company with the SEC on February 6, 2013, and incorporated by reference herein.
(11)	Filed as an exhibit to the Form 8-K filed by the Company with the SEC on January 4, 2013, and incorporated by reference herein.
(12)	Filed as an exhibit to the Form 8-K filed by the Company with the SEC on December 13, 2012, and incorporated by reference herein.
(13)	Filed as an exhibit to the Form 8-K filed by the Company with the SEC on October 2, 2013 and incorporated by reference herein.
(14)	Filed as an exhibit to the Form 8-K filed by the Company with the SEC on May 30, 2012, and incorporated by reference herein.
(15)	Filed as an exhibit to the Form 8-K filed by the Company with the SEC on August 8, 2014, and incorporated by reference herein.
(16)	Filed as an exhibit to the Form 8-K filed by the Company with the SEC on September 11, 2015, and incorporated by reference herein.
(17)	Filed as an exhibit to the Form S-1/A filed by the Company with the SEC on November 24, 2016, and incorporated by reference herein.
(18)	Filed as an exhibit to the Form 8-K filed by the Company with the SEC on May 5, 2016, and incorporated by reference herein.
(19)	Filed as an exhibit to the Form 8-K filed by the Company with the SEC on June 24, 2016, and incorporated by reference herein.
(20)	Filed as an exhibit to the Form 8-K filed by the Company with the SEC on January 5, 2017, and incorporated by reference herein.
(21)	Filed as an exhibit to the Form 8-K filed by the Company with the SEC on April 17, 2017, and incorporated by reference herein.
(22)	Filed as an exhibit to the Form 8-K filed by the Company with the SEC on March 7, 2018, and incorporated by reference herein.
(23)	Filed as an exhibit to the Annual Report on Form 10-K filed by the Company with the SEC on April 6, 2017, and incorporated by reference herein.

GlyEco, Inc. 10-K