10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

For the quarterly period ended March 31, 2015

Commission file number: 001-36451

Quest Resource Holding Corporation

(Exact Name of Registrant as Specified in Its Charter)

Nevada	51-0665952
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

6175 Main Street, Suite 420

Frisco, Texas 75034

(Address of Principal Executive Offices and Zip Code)

(972) 464-0004

(Registrant’s Telephone Number, Including Area Code)

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

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	x

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

As of May 1, 2015, there were outstanding 111,657,804 shares of the registrant’s common stock, $0.001 par value.

TABLE OF CONTENTS

	Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)	2
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	13
Item 3. Quantitative and Qualitative Disclosures About Market Risk	18
Item 4. Controls and Procedures	18
PART II. OTHER INFORMATION
Item 1. Legal Proceedings	19
Item 1A. Risk Factors	19
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	19
Item 3. Defaults Upon Senior Securities	19
Item 4. Mine Safety Disclosures	19
Item 5. Other Information	19
Item 6. Exhibits	20
Signatures	21

1

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

QUEST RESOURCE HOLDING CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

	March 31,			December 31,
	2015			2014
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	3,311,537		$	3,154,540
Accounts receivable, less allowance for doubtful accounts of $533,094 and $760,917 as of March 31, 2015 and December 31, 2014, respectively		28,621,862			29,631,843
Prepaid expenses and other current assets		752,015			684,032
Total current assets		32,685,414			33,470,415
Goodwill		58,337,290			58,337,290
Intangible assets, net		14,363,363			15,115,617
Property and equipment, net, and other assets		860,268			753,493
Total assets	$	106,246,335		$	107,676,815
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Line of credit	$	5,250,000		$	5,250,000
Accounts payable and accrued liabilities		26,379,122			26,621,907
Deferred revenue and other current liabilities		323,521			282,189
Total current liabilities		31,952,643			32,154,096
Other long-term liabilities		44,127			45,206
Total liabilities		31,996,770			32,199,302
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.001 par value, 10,000,000 shares authorized, no shares issued or outstanding as of March 31, 2015 and December 31, 2014, respectively		—			—
Common stock, $0.001 par value, 200,000,000 shares authorized, 111,657,804 and 111,601,304 shares issued and outstanding as of March 31, 2015 and December 31, 2014, respectively		111,658			111,601
Additional paid-in capital		151,080,327			150,789,292
Accumulated deficit		(76,942,420	)		(75,423,380	)
Total stockholders’ equity		74,249,565			75,477,513
Total liabilities and stockholders’ equity	$	106,246,335		$	107,676,815

The accompanying notes are an integral part of these condensed consolidated statements.

2

QUEST RESOURCE HOLDING CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

	Three Months Ended March 31,
	2015			2014
Revenue	$	40,008,609		$	38,160,050
Cost of revenue		36,722,933			34,827,635
Gross profit		3,285,676			3,332,415
Operating expenses:
Selling, general, and administrative		3,776,982			2,993,708
Depreciation and amortization		979,137			951,663
Total operating expenses		4,756,119			3,945,371
Operating loss		(1,470,443	)		(612,956	)
Other expense:
Interest expense		(48,597	)		(875,467	)
Total other expense		(48,597	)		(875,467	)
Loss before taxes		(1,519,040	)		(1,488,423	)
Income tax expense		—			—
Net loss	$	(1,519,040	)	$	(1,488,423	)
Net loss applicable to common stockholders	$	(1,519,040	)	$	(1,488,423	)
Net loss per share
Basic and diluted	$	(0.01	)	$	(0.02	)
Weighted average number of common shares outstanding
Basic and diluted		111,617,626			95,821,525

The accompanying notes are an integral part of these condensed consolidated statements.

3

QUEST RESOURCE HOLDING CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY

FOR THE THREE MONTHS ENDED MARCH 31, 2015

(UNAUDITED)

					Additional						Total
	Common Stock				Paid-in			Accumulated			Stockholders’
	Shares		Par Value		Capital			Deficit			Equity
Balance, December 31, 2014		111,601,304	$	111,601	$	150,789,292		$	(75,423,380	)	$	75,477,513
Stock-based compensation		—		—		291,092			—			291,092
Shares issued for vested restricted stock units		56,500		57		(57	)		—			—
Net loss		—		—		—			(1,519,040	)		(1,519,040	)
Balance, March 31, 2015		111,657,804	$	111,658	$	151,080,327		$	(76,942,420	)	$	74,249,565

The accompanying notes are an integral part of this condensed consolidated statement.

4

QUEST RESOURCE HOLDING CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Three Months Ended March 31,
	2015			2014
Cash flows from operating activities:
Net loss	$	(1,519,040	)	$	(1,488,423	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation		76,046			69,567
Amortization of intangibles		903,091			882,096
Amortization of debt discount and deferred financing costs		—			451,642
Provision for doubtful accounts		—			41,338
Stock-based compensation		285,156			162,995
Changes in operating assets and liabilities:
Accounts receivable		1,009,981			(785,408	)
Prepaid expenses and other current assets		(67,983	)		(148,483	)
Security deposits and other assets		(12,677	)		332
Accounts payable and accrued liabilities		(236,849	)		(2,800,411	)
Deferred revenue and other current liabilities		41,332			108,014
Other long-term liabilities		4,557			—
Net cash provided by (used in) operating activities		483,614			(3,506,741	)
Cash flows from investing activities:
Purchase of property and equipment		(170,144	)		(6,698	)
Purchase of capitalized software development		(150,837	)		(77,425	)
Net cash used in investing activities		(320,981	)		(84,123	)
Cash flows from financing activities:
Proceeds from line of credit		—			2,000,000
Repayments of capital lease obligations		(5,636	)		(3,952	)
Net cash provided by (used in) financing activities		(5,636	)		1,996,048
Net increase (decrease) in cash and cash equivalents		156,997			(1,594,816	)
Cash and cash equivalents at beginning of period		3,154,540			2,676,984
Cash and cash equivalents at end of period	$	3,311,537		$	1,082,168
Supplemental cash flow information:
Cash paid for interest	$	48,521		$	423,826
Supplemental non-cash flow activities:
Common stock issued for conversion of notes payable	$	—		$	29,001
Common stock issued for vested restricted stock units	$	57		$	—

The accompanying notes are an integral part of these condensed consolidated statements.

5

QUEST RESOURCE HOLDING CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. The Company, Description of Business, and Future Liquidity Needs

The accompanying condensed consolidated financial statements include the accounts of Quest Resource Holding Corporation (“QRHC”) and its subsidiaries, Earth911, Inc. (“Earth911”), Quest Resource Management Group, LLC (“Quest”), Landfill Diversion Innovations, LLC, and Youchange, Inc. (“YouChange”) (collectively, “QRHC,” the “Company,” “we,” “us,” or “our company”).

Operations – We are an environmental solutions company that serves as a single-source provider of full service recycling and waste stream management solutions, as well as an environmental program services and information provider. We offer innovative, cost-effective, one-stop reuse, recycling, and waste disposal management programs designed to provide regional and national customers with a single point of contact for managing a variety of recyclables and disposables. Two customers accounted for 61.5% and 76.1% of revenue for the three months ended March 31, 2015 and 2014, respectively.  We also own the Earth911.com website, offering original online environmental related content about reuse, recycling, and disposal of waste and recyclables, and we own a comprehensive online database of local recycling and proper disposal options. Our principal offices are located in Frisco, Texas.

Liquidity – As of March 31, 2015 and December 31, 2014, our working capital balance was $732,771 and $1,316,319, respectively.  We plan to increase liquidity by increasing our sales and operating leverage, in addition to other initiatives, which may include additional debt and/or equity financings.

2. Summary of Significant Accounting Policies

Principals of Presentation, Consolidation, and Reclassifications

The condensed consolidated financial statements included herein have been prepared by us without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”), and should be read in conjunction with the audited financial statements for the year ended December 31, 2014. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted, as permitted by the SEC, although we believe the disclosures that are made are adequate to make the information presented herein not misleading.

The accompanying condensed consolidated financial statements reflect, in our opinion, all normal recurring adjustments necessary to present fairly our financial position at March 31, 2015, and the results of our operations and cash flows for the periods presented. We derived the December 31, 2014 condensed consolidated balance sheet data from audited financial statements, but did not include all disclosures required by GAAP. As Quest, Earth911, and YouChange are operating as ecology based green service companies, we did not deem segment reporting necessary.

All intercompany accounts and transactions have been eliminated in consolidation. Certain reclassifications have been made to prior year balances to conform to the current year presentation that did not have an effect on our net loss or net loss per share. Interim results are subject to seasonal variations, and the results of operations for the three months ended March 31, 2015 are not necessarily indicative of the results to be expected for the full year.

Revenue Recognition

We recognize revenue only when all of the following criteria have been met:

· persuasive evidence of an arrangement exists;

· delivery has occurred or services have been rendered;

· the fee for the arrangement is fixed or determinable; and

· collectability is reasonably assured.

Persuasive Evidence of an Arrangement – We document all terms of an arrangement in a service agreement or quote signed or confirmed by the customer prior to recognizing revenue.

Delivery Has Occurred or Services Have Been Performed – We perform all services or deliver all products prior to recognizing revenue. Services are deemed to be performed when the services are complete.

The Fee for the Arrangement is Fixed or Determinable – Prior to recognizing revenue, a customer’s fee is either fixed or determinable under the terms of the quote, service agreement, or accepted customer purchase order.

Collectability Is Reasonably Assured – We assess collectability on a customer by customer basis based on criteria outlined by management.

6

QUEST RESOURCE HOLDING CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

We provide businesses with management programs to reuse, recycle, and dispose of a wide variety of waste streams and recyclables generated by their business. We utilize third-party subcontractors to execute the collection, transport, and recycling or disposal of used motor oil, oil filters, scrap tires, cooking oil, and expired food products. We evaluate the criteria outlined in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Subtopic 605-45, Revenue Recognition—Principal Agent Considerations, in determining whether it is appropriate to record the gross amount of service revenue and related costs or the net amount earned as management fees. Generally, when we are primarily obligated in a transaction, have latitude in establishing prices and selecting suppliers, have credit risk, or have several but not all of these indicators, we record revenue gross and record amounts collected from customers for sales tax on a net basis. In situations in which we are not primarily obligated, we do not have credit risk, or we determine amounts earned using fixed percentage or fixed payment schedules, we record the net amounts as management fees earned. Currently, we have no contracts accounted for as management fees.

Earth911 revenue primarily represents licensing fees that we recognize ratably over the term of the license. We derive some revenue from advertising contracts, which we recognize ratably over the term that the advertisement appears on our website.

Net Loss Per Share

We compute basic net loss per share by dividing net loss applicable to common stockholders by the weighted average number of shares of common stock outstanding during the period. We have other potentially dilutive securities outstanding that are not shown in a diluted net loss per share calculation because their effect in both 2015 and 2014 would be anti-dilutive. These potentially dilutive securities include options, restricted stock units, warrants, and convertible promissory notes, and totaled 16,832,380 and 15,096,948 shares at March 31, 2015 and 2014, respectively.

The following table sets forth the computation of basic and diluted loss per share:

	Three Months Ended March 31,
	2015			2014
	(Unaudited)			(Unaudited)
Net loss applicable to common stockholders - numerator for    basic and diluted earnings per share	$	(1,519,040	)	$	(1,488,423	)
Weighted average common shares outstanding -    denominator for basic and diluted earnings per share		111,617,626			95,821,525
Net loss per share:
Basic and diluted	$	(0.01	)	$	(0.02	)

The following table sets forth the anti-dilutive securities excluded from diluted loss per share:

	March 31,
	2015		2014
	(Unaudited)		(Unaudited)
Anti-dilutive securities excluded from diluted loss per share:
Stock options		4,965,280		4,096,948
Restricted stock units		76,100		—
Warrants		11,791,000		—
Convertible notes		—		11,000,000
		16,832,380		15,096,948

Inventories

We record inventories within “Prepaid expenses and other current assets” within our condensed consolidated balance sheets.  As of March 31, 2015 and December 31, 2014, all inventories were finished goods with a balance of $41,544 and $30,759, respectively, and consisted of waste disposal equipment, with no reserve for inventory obsolescence at either date.

7

QUEST RESOURCE HOLDING CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

3. Property and Equipment, Net, and Other Assets

At March 31, 2015 and December 31, 2014, property and equipment, net, and other assets consisted of the following:

	March 31,		December 31,
	2015		2014
	(Unaudited)
Property and equipment, net of accumulated depreciation of $1,768,881      and $1,692,835 as of March 31, 2015 and December 31, 2014,      respectively	$	627,935	$	533,837
Security deposits and other assets		232,333		219,656
Property and equipment, net, and other assets	$	860,268	$	753,493

We compute depreciation using the straight-line method over the estimated useful lives of the property and equipment. The depreciation expense related to property and equipment was $76,046 and $69,567 for the three months ended March 31, 2015 and 2014, respectively.  

4. Goodwill and Other Intangible Assets

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

March 31, 2015 (Unaudited)	Estimated Useful Life	Gross Carrying Amount		Accumulated Amortization		Net
Finite lived intangible assets:
Customer relationships	5 years	$	12,720,000	$	4,346,000	$	8,374,000
Trademarks	7 years		6,230,000		1,520,417		4,709,583
Patents	7 years		230,683		230,683		—
Software	7 years		1,164,551		55,132		1,109,419
Customer lists	5 years		307,153		136,792		170,361
Total finite lived intangible assets		$	20,652,387	$	6,289,024	$	14,363,363

December 31, 2014	Estimated Useful Life	Gross Carrying Amount		Accumulated Amortization		Net
Finite lived intangible assets:
Customer relationships	5 years	$	12,720,000	$	3,710,000	$	9,010,000
Trademarks	7 years		6,230,000		1,297,917		4,932,083
Patents	7 years		230,683		230,683		—
Software	7 years		1,013,714		25,899		987,815
Customer lists	5 years		307,153		121,434		185,719
Total finite lived intangible assets		$	20,501,550	$	5,385,933	$	15,115,617

March 31, 2015 (Unaudited) and December 31, 2014	Estimated Useful Life	Carrying Amount
Indefinite lived intangible asset:
Goodwill	Indefinite	$	58,337,290

We compute amortization using the straight-line method over the estimated useful lives of the finite lived intangible assets. The amortization expense related to finite lived intangible assets was $903,091 and $882,096 for the three months ended March 31, 2015 and 2014, respectively. We have no indefinite-lived intangible assets other than goodwill. The goodwill is not deductible for tax purposes.

8

QUEST RESOURCE HOLDING CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

5. Line of Credit

On December 15, 2010, Quest entered into a Revolving Credit Note and Loan Agreement with Regions Bank (“Regions”), a national banking association. This agreement, as amended, provides Quest with a loan facility up to $10,000,000 for working capital with advances generally limited to 80% of eligible accounts receivable from Quest’s largest customer and 85% of all other eligible accounts receivable. The interest on the outstanding principal amount accrues daily and is payable monthly based on a fluctuating interest rate per annum, which is the base rate plus 1.50% (2.67% as of March 31, 2015). The base rate for any day is the greater of (a) the federal funds rate plus one-half of 1%, (b) Region’s published effective prime rate, or (c) the Eurodollar rate for such day based on an interest period of one month. To secure the amounts due under the agreement, Quest granted Regions a security interest in all of its assets. Quest had $5,250,000 outstanding and $4,750,000 available to be borrowed as of March 31, 2015. The amount of interest expense related to the Regions line of credit for the three months ended March 31, 2015 and 2014 was $35,050 and $43,080, respectively.

On May 9, 2014, Quest entered into a Sixth Amendment to Loan Agreement with Regions. The loan agreement was amended to, among other things, (i) add a $5.0 million accordion feature, (ii) increase the borrowing base, (iii) reduce the applicable margin for eurodollar rate loans by 1.0% per annum, (iv) add an unused fee of 0.25% per annum, (v) extend the maturity date to May 31, 2015, (vi) release the guaranty of our Chief Executive Officer previously executed in favor of Regions, (vii) add our company and our wholly owned subsidiary, Earth911, as guarantors, (viii) allow for permitted acquisitions, and (ix) delete two of the financial covenants and modify the other financial covenants in certain respects.  As of March 31, 2015, we were in compliance with the financial covenants.

In connection with the Sixth Amendment, on May 9, 2014, QRHC and Earth911(collectively, the “Guarantors”) entered into a Guaranty (the “Guaranty”) for the benefit of Regions to guarantee the obligations of Quest under the loan agreement and other loan documents. In addition, on May 9, 2014, Earth911 entered into a Pledge Agreement with Regions, pursuant to which Earth911 pledged to Regions 50% of the membership interests in Quest held by Earth911 to secure the prompt and complete payment and performance of the obligations of Quest and the Guarantors under the loan agreement and other loan documents.

On May 13, 2015, Quest and Regions made amendments to the loan agreement as discussed in Note 11 — Material Subsequent Events.

6. Capital Lease Obligations

At March 31, 2015 and December 31, 2014, total capital lease obligations outstanding consisted of the following:

	March 31,			December 31,
	2015			2014
	(Unaudited)
Capital lease obligations, imputed interest at 4.75%, with monthly payments of $1,507, through November 2016, secured by computer equipment	$	41,614		$	47,250
Total		41,614			47,250
Less: current maturities		(23,171	)		(22,853	)
Long-term portion	$	18,443		$	24,397

Our capital lease obligations are included within “Deferred revenue and other current liabilities” and “other long-term liabilities” in our condensed consolidated balance sheets.  The amount of interest expense related to our capital leases for the three months ended March 31, 2015 and 2014 was $487 and $638, respectively.

7. Income Taxes

We compute income taxes using the asset and liability method in accordance with FASB ASC Topic 740, Income Taxes. Under the asset and liability method, we determine deferred income tax assets and liabilities based on the differences between the financial reporting and tax bases of assets and liabilities and measure them using currently enacted tax rates and laws. We provide a valuation allowance for the amount of deferred tax assets that, based on available evidence, are more likely than not expected to be realized. In our opinion, realization of our net operating loss carryforward was not reasonably assured as of March 31, 2015 and December 31, 2014, and we have recorded a valuation allowance of $9,713,000 and $9,108,000, respectively, against deferred tax assets in excess of deferred tax liabilities in the accompanying condensed consolidated financial statements. As of March 31, 2015 and December 31, 2014, we had federal income tax net operating loss carryforwards of approximately $16,000,000 and $14,800,000, respectively, which expire at various dates beginning in 2031.

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QUEST RESOURCE HOLDING CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

8. Fair Value of Financial Instruments

Our financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities, line of credit, capital lease obligations, and warrant liability. We do not believe that we are exposed to significant interest, currency, or credit risks arising from these financial instruments. With the exception of the warrant liability, the fair values of these financial instruments approximate their carrying values using Level 3 inputs, based on their short maturities or, for long-term portions of capital lease obligations, based on borrowing rates currently available to us for loans with similar terms and maturities.

On May 7, 2014, we issued an aggregate of 200,000 warrants to purchase shares of our common stock to a consultant in exchange for services rendered during 2014.  Of these warrants, 100,000 vested immediately, and resulted in no expense recorded for the three months ended March 31, 2015.  The remaining 100,000 warrants, which we classified as a liability, vested on May 7, 2015, subject to performance conditions.  We measured the warrants at fair value by applying the Black-Scholes-Merton valuation model, which utilizes Level 3 inputs. As of March 31, 2015, the assumptions used in the Black-Scholes-Merton valuation for the 100,000 warrants that vested on May 7, 2015 were as follows: volatility of 81.1%; risk free interest rate of 0.59%; expected term of 2.1 years; and expected dividend yield of 0%. The grant date fair value of the warrant valuation described above was $0.32 per warrant. We based the risk free interest rate on U.S. Treasury rates with maturity dates approximating the expected term of the warrants. We determined the historical volatility using the historical changes in the market price of our common stock and applicable comparable companies.  We report the warrant liability in “Accounts payable and accrued liabilities” within our balance sheets.  Our warrant liability was $28,921 and $34,857 at March 31, 2015 and December 31, 2014, respectively.

9. Stockholders’ Equity

Preferred Stock – Our authorized preferred stock includes 10,000,000 shares of preferred stock with a par value of $0.001, of which no shares have been issued or are outstanding.

Common Stock – Our authorized common stock includes 200,000,000 shares of common stock with a par value of $0.001, of which 111,657,804 and 111,601,304 shares were issued and outstanding as of March 31, 2015 and December 31, 2014, respectively.

During the three months ended March 31, 2015, we issued shares of common stock as follows:

	Common Stock
	Shares		Amount
Shares issued for vested restricted stock units		56,500	$	57
		56,500	$	57

· Shares issued for vested restricted stock units –

o On March 5, 2015, we issued 56,500 shares to an employee for the restricted stock units that vested and were expensed during fiscal year 2014.  

During the three months ended March 31, 2014, we issued shares of common stock as follows:

	Common Stock
	Shares		Amount
Shares issued upon conversion of note		23,201	$	29,001
		23,201	$	29,001

· Shares issued upon conversion of note –

o During September 2012, we issued a convertible note payable to an unrelated party.  During the three months ended March 31, 2014, $25,000 of principal and $4,001 of interest were converted into 23,201 shares of our common stock.

Warrants – During the three months ended March 31, 2015 and 2014, we did not issue any warrants and no holders exercised warrants.  During the three months ended March 31, 2015, a third party forfeited 1,200,000 contingent warrants, with no corresponding expirations during the three months ended March 31, 2014.  At March 31, 2015, we had outstanding exercisable warrants to purchase 11,691,000 shares of common stock and contingent warrants to purchase 100,000 shares of common stock.

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QUEST RESOURCE HOLDING CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

· Warrants for services –

o On May 7, 2014, we issued to a third party for services rendered an aggregate of 200,000 warrants to purchase 200,000 shares of our common stock at $2.65 per share. Of the 200,000 warrants, 100,000 were exercisable immediately and the remaining become exercisable one year from the date of grant based on the achievement of performance conditions. Due to the decline in the fair value of these warrants, we recorded a reduction of stock-based compensation expense of $5,936 for the three months ended March 31, 2015 related to these warrants. See Note 8 for a discussion of our Black-Scholes-Merton valuation assumptions.  

o On May 28, 2014, we issued to a third party for services rendered an aggregate of 1,650,000 contingent warrants to purchase 1,650,000 shares of our common stock at $4.31 per share. The warrants become exercisable at various times after achieving future performance conditions related to services and revenue targets for Earth911. During the three months ended March 31, 2015, we terminated the contract with the third party, resulting in the forfeiture of 1,200,000 unvested warrants.  Due to the uncertainty of attaining any of the performance conditions, we had not recognized any additional expense for the non-vested warrants.  As these warrants related to internally developed software, we did not capitalize any costs or recognize any expense for the three months ended March 31, 2015.

The following table summarizes the warrants issued and outstanding as of March 31, 2015:

Warrants Issued and Outstanding as of March 31, 2015
	Date of		Exercise		Shares of
Description	Issuance	Expiration	Price		Common Stock
Exercisable warrants
Warrants	04/18/2014	04/01/2017	$	2.00		1,441,000
Warrant	05/07/2014	05/07/2017	$	2.65		100,000
Warrant	05/28/2014	10/31/2016	$	4.31		450,000
Warrants	09/24/2014	09/24/2019	$	2.50		9,000,000
Warrants	10/20/2014	10/20/2019	$	2.50		700,000
Total exercisable warrants						11,691,000
Contingent warrants
Warrant	05/07/2014	05/07/2017	$	2.65		100,000
Warrants	05/28/2014	10/31/2018	$	4.31		1,200,000
Less warrants cancelled						(1,200,000	)
Total contingent warrants						100,000
Total warrants issued and outstanding						11,791,000

Restricted Stock Units – During April 2014, we granted restricted stock units representing 132,600 shares of common stock under our 2012 Incentive Compensation Plan. The restricted stock units vest based on a combination of financial performance factors and continued service. The financial performance factors are based on the revenue generated by new business activity of one of our subsidiaries. All payouts of restricted stock units that vest will be exercisable immediately and will be paid in the form of common stock. While we do not anticipate issuing dividends, the restricted stock unit awards will not participate in any dividends prior to vesting.

We determined the fair value of the restricted stock unit awards granted based on the market value of our common stock on the date of grant, which was $3.75 per share. We assumed a forfeiture rate of 0%. Due to the uncertainty of attaining any of the remaining performance conditions, we recorded no additional stock-based compensation expense for the remaining performance conditions for the three months ended March 31, 2015. We issued 56,500 shares during the three months ended March 31, 2015 for the restricted stock units that vested during 2014.  As of March 31, 2015 and December 31, 2014, outstanding restricted stock units totaled 76,100 and 132,600, respectively.  

Employee Stock Purchase Plan – On September 17, 2014, our stockholders approved the Quest Resource Holding Corporation 2014 Employee Stock Purchase Plan (the “ESPP”). We recorded expense of $9,726 related to the ESPP during the three months ended March 31, 2015.

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QUEST RESOURCE HOLDING CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

Stock Options – The following table summarizes the stock option activity for the three month period ended March 31, 2015:

	Stock Options
					Weighted-
				Exercise	Average
	Number			Price Per	Exercise Price
	of Shares			Share	Per Share
Outstanding at December 31, 2014		5,006,532		1.45 — 3.75		2.66
Granted		45,000		1.28 — 1.46		1.30
Canceled/Forfeited		(86,252	)	2.05 — 2.10		2.05
Outstanding at March 31, 2015		4,965,280		1.28 — 3.75		2.65

10. Related Party Transactions

Acquisition of the Quest Interests – On July 16, 2013, we acquired all of the Quest Interests held by Quest Resource Group LLC, or QRG, comprising 50% of the membership interests of Quest Resource Management Group, LLC, or Quest. The purchase price for the Quest Interests consisted of 22,000,000 shares of our common stock issued at a fair market value of $2.50 per share based on the closing price of the stock on the date of the transaction and convertible secured promissory notes (collectively, the “Sellers’ Notes”) in the aggregate principal amount of $22,000,000. The total purchase price of $77,000,000 was paid to the owners of QRG who at the time of the transaction were related parties: the Chief Executive Officer of Quest and the former President of Quest. After the close of the transaction, the Chief Executive Officer of Quest became the President, Chief Executive Officer, and member of the Board of Directors of our company. On September 24, 2014, we paid $11,000,000 to the holders of the Sellers’ Notes and such holders converted the remaining $11,000,000 of principal, plus accrued interest through September 24, 2014 of $101,260, into 5,550,630 shares of our common stock. For the three months ended March 31, 2014, we recognized interest expense of $379,726, with no comparable interest expense for the three months ended March 31, 2015.

11. Material Subsequent Events

On May 13, 2015, Quest entered into a Seventh Amendment to Loan Agreement with Regions. The loan agreement was amended to, among other things, (i) reduce the applicable margin for eurodollar rate loans by 0.25% per annum, (ii) extend the maturity date to May 13, 2018, and (iii) modify the permitted acquisitions in certain respects.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion of our financial condition and results of operations in conjunction with the condensed consolidated financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q and with our audited consolidated financial statements included in our Report on Form 10-K for the year ended December 31, 2014. This Quarterly Report on Form 10-Q contains “forward-looking statements” that involve substantial risks and uncertainties. The statements contained in this Quarterly Report on Form 10-Q that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including, but not limited to, statements regarding our expectations, beliefs, intentions, strategies, future operations, future financial position, future revenue, projected expenses, and plans and objectives of management. In some cases, you can identify forward-looking statements by terms such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “project,” “will,” “would,” “should,” “could,” “can,” “predict,” “potential,” “continue,” “objective,” or the negative of these terms, and similar expressions intended to identify forward-looking statements. However, not all forward-looking statements contain these identifying words. These forward-looking statements reflect our current views about future events and involve known risks, uncertainties, and other factors that may cause our actual results, levels of activity, performance, or achievement to be materially different from those expressed or implied by the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those discussed in our Report on Form 10-K for the year ended December 31, 2014. Furthermore, such forward-looking statements speak only as of the date of their issuance. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.

Overview

We were incorporated in Nevada in July 2002 under the name BlueStar Financial Group, Inc. On July 16, 2013, we acquired all of the issued and outstanding membership interests of Quest Resource Management Group, LLC, or Quest, held by Quest Resource Group LLC, or QRG, comprising 50% of the membership interests of Quest, or the Quest Interests. Our wholly owned subsidiary, Earth911, held the remaining 50% of the membership interests of Quest for several years.  Concurrently with our acquisition of the Quest Interests, we assigned the Quest Interests to Earth911 so that Earth911 now holds 100% of the issued and outstanding membership interests of Quest. On October 28, 2013, we changed our name to Quest Resource Holding Corporation, or QRHC.

This “Management’s Discussion and Analysis of Financial Condition and Results of Operations” is based on and relates primarily to the operations of Quest Resource Holding Corporation, Quest, and Earth911.

Three Months Ended March 31, 2015 and 2014 Operating Results

The following table summarizes our operating results for the three months ended March 31, 2015 and 2014:

	Three Months Ended March 31,
	2015			2014
	(Unaudited)			(Unaudited)
Revenue	$	40,008,609		$	38,160,050
Cost of revenue		36,722,933			34,827,635
Gross profit		3,285,676			3,332,415
Operating expenses:
Selling, general, and administrative		3,776,982			2,993,708
Depreciation and amortization		979,137			951,663
Total operating expenses		4,756,119			3,945,371
Operating loss		(1,470,443	)		(612,956	)
Interest expense		(48,597	)		(875,467	)
Income tax expense		—			—
Net loss	$	(1,519,040	)	$	(1,488,423	)

Three Months Ended March 31, 2015 compared to Three Months Ended March 31, 2014

Revenue

Revenue for the three months ended March 31, 2015 was $40.0 million, an increase of $1.8 million over revenue of $38.2 million for the three months ended March 31, 2014. The increase was primarily due to a combination of new and expanded services with customers added in 2015 and 2014, partially offset by a decline in commodity values and the related revenue in the three months ended March 31, 2015.

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Cost of Revenue/Gross Profit

Cost of revenue increased $1.9 million to $36.7 million for the three months ended March 31, 2015 from $34.8 million for the three months ended March 31, 2014.  The increase related primarily to the cost of providing services for the increased service and commodity revenue in 2015.  Gross profit was substantially unchanged at $3.3 million for the quarters ended March 31, 2015 and March 31, 2014. The gross profit margin was 8.2% of first quarter 2015 net sales compared with 8.7% in the first quarter of 2014. The decrease in gross profit margin percentage for the three months ended March 31, 2015 was primarily due to the change in the mix of services, decline in commodity prices, and increased cost of certain contracted services.  

Margins will be affected quarter to quarter by the volumes of waste and recycling materials generated by our customers, frequency of services delivered, service price and commodity index adjustments, cost of contracted services, advertising rates, and the sales mix between advertising, consulting, commodities, and services in any one reporting period.

Operating Expenses

For the three months ended March 31, 2015, operating expenses increased $810,000 to $4.8 million from $3.9 million for the comparable quarter in 2014. Selling, general, and administrative expenses were $3.8 million and $3.0 million for the three months ended March 31, 2015 and 2014, respectively, an increase of $780,000. This change was primarily due to an increase in selling, general, and administrative expenses for servicing increased customer locations in the three months ended March 31, 2015.  

Operating expenses also included depreciation and amortization of $980,000 and $950,000 for the three months ended March 31, 2015 and 2014, respectively, which increase primarily relates to amortization for software development costs capitalized subsequent to the first quarter of 2014.

Interest Expenses

For the quarter ended March 31, 2015, total interest expenses decreased $830,000 to $50,000 from $880,000 for the first quarter of 2014 primarily due to the retirement of the Sellers’ Notes totaling $22.0 million in September 2014.  

Net Loss

For the three months ended March 31, 2015 and 2014, the net loss was $1.5 million during both periods. The explanations above detail the majority of the changes related to the net loss.

Loss Per Share

The loss per share on a basic and diluted basis was $0.01 for the three months ended March 31, 2015, compared with a loss per share of $0.02 for the comparable quarter in 2014. The weighted average number of shares of common stock outstanding increased to 111.6 million for the quarter ended March 31, 2015 from 95.8 million for the quarter ended March 31, 2014. The increase in the share count was primarily a result of the sales of common stock in April 2014 and September 2014 and the conversion of the Sellers’ Notes in September 2014.

Our business, including revenue, operating expenses, and operating margins, may vary depending on commodity prices, the blend of services, the nature of the contracts, and sales volumes.

EBITDAS

We use the non-GAAP measurement of earnings before interest, taxes, depreciation, amortization, and stock-related non-cash charges, or EBITDAS, to evaluate our performance. EBITDAS is a non-GAAP measure that we believe can be helpful in assessing our overall performance as an indicator of operating and earnings quality. We suggest that EBITDAS be viewed in conjunction with our reported financial results or other financial information prepared in accordance with accounting principles generally accepted in the United States, or GAAP.

The following table reflects the EBITDAS for the three months ended March 31, 2015 and 2014:

RECONCILIATION OF NET LOSS TO EBITDAS

(UNAUDITED)

	As Reported
	Three Months Ended March 31,
	2015			2014
	(Unaudited)			(Unaudited)
Net loss	$	(1,519,040	)	$	(1,488,423	)
Interest expense		48,597			875,467
Income tax expense		—			—
Depreciation and amortization		979,137			951,663
Stock-based compensation expense		285,156			162,995
EBITDAS	$	(206,150	)	$	501,702

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Liquidity and Capital Resources

As of March 31, 2015, we had $3.3 million of cash and cash equivalents and working capital of $730,000, a decrease from working capital of $1.3 million as of December 31, 2014.

We derive our primary sources of funds for conducting our business activities from sales of services, commodities, consulting and advertising, from our credit facilities, and from the placement of our equity securities with investors. We require working capital primarily to accommodate increases in accounts receivable associated with our planned sales growth, service debt, purchase capital assets, fund operating expenses, address unanticipated competitive threats or technical problems, withstand adverse economic conditions, fund potential acquisition transactions, and pursue our following goals:

· expanding sales staff and market reach;

· expanding and developing our IT infrastructure, operations applications, and mobile strategy;

· enhancing, developing, and introducing services and offerings;

· expanding visitors to the Earth911.com website to increase advertising, sponsorship, and retail product revenue; and

· expanding our customer base for recycling services.

We believe our existing cash and cash equivalents of $3.3 million, available borrowing capacity under our credit facility as of March 31, 2015 of $4.75 million with an optional $5.0 million accordion feature, and cash expected to be generated from operations will be sufficient to fund our operations for the next 12 months.

Cash Flows

The following discussion relates to the major components of our cash flows for the three months ended March 31, 2015 and 2014.

Cash Flows from Operating Activities

Cash provided by operating activities was $480,000 for the three months ended March 31, 2015, compared to $3.5 million of cash used in operating activities for the three months ended March 31, 2014. Cash provided by operating activities for the three months ended March 31, 2015 included the net loss of $1.5 million, offset by non-cash items of $1.3 million and cash provided by the net change in operating assets and liabilities of $740,000. The cash used in operating activities for the three months ended March 31, 2014 related to the net loss of $1.5 million, offset by non-cash items of $1.6 million and cash used in the net change in operating assets and liabilities of $3.6 million. The non-cash items primarily reflect depreciation, amortization of intangible assets, amortization of debt discounts, amortization of financing costs, provision for doubtful accounts, and stock-based compensation. The net changes in operating assets and liabilities are primarily related to changes in accounts receivable and accounts payable and accrued liabilities. Our business, including revenue, operating expenses, and operating margins may vary depending on commodity prices, the blend of services we provide to our customers, the terms of customer contracts, and our business levels. Our operating activities may require additional cash in the future from debt and/or equity financings depending on how we expand our operations and until such time as we generate positive cash flow from operations.

Cash Flows from Investing Activities

Cash used in investing activities for the three months ended March 31, 2015 was $320,000.  This was primarily from purchases of property and equipment and costs related to software development. Cash provided by investing activities for the three months ended March 31, 2014 was $80,000 primarily from costs related to software development.

Cash Flows from Financing Activities

Cash used in financing activities was $10,000 for the three months ended March 31, 2015 for the repayment of capital lease obligations.  Cash provided by financing activities was $2.0 million for the three months ended March 31, 2014, primarily from $2.0 million of proceeds from our Regions Bank line of credit.

Inflation

We do not believe that inflation had a material impact on us during the three months ended March 31, 2015 and 2014.

Critical Accounting Estimates and Policies

Our discussion and analysis of our financial condition and results of operations are based on our condensed consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of our condensed 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. 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 of uncertainty. These areas include carrying amounts of accounts receivable, long-lived assets, goodwill and other intangible assets, deferred financing costs, warrant liability, stock-based compensation expense, and deferred taxes. We base our estimates on historical experience, our observance of trends in

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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.

Collectability of Accounts Receivable

Our accounts receivable consist primarily of amounts due from customers for the performance of services, and we record the amount net of an allowance for doubtful accounts. To record our accounts receivable at their net realizable value, we assess their collectability, which requires a considerable amount of judgment. We perform a detailed analysis of the aging of our receivables, the credit worthiness of our customers, our historical bad debts, and other adjustments. If economic, industry, or specific customer business trends worsen, we increase the allowance for uncollectible accounts by recording additional expense in the period in which we become aware of the new conditions.

Long-Lived Assets

We periodically evaluate whether events and circumstances have occurred that may warrant revision of the estimated useful life of property and equipment or whether the remaining balance of property and equipment, or other long-lived assets should be evaluated for possible impairment. Instances that may lead to an impairment include the following: (i) a significant decrease in the market price of a long-lived asset group; (ii) a significant adverse change in the extent or manner in which a long-lived asset or asset group is being used or in its physical condition; (iii) a significant adverse change in legal factors or in the business climate that could affect the value of a long-lived asset or asset group, including an adverse action or assessment by a regulator; (iv) an accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of a long-lived asset or asset group; (v) a current-period operating or cash flow loss combined with a history of operating or cash flow losses or a projection or forecast that demonstrates continuing losses associated with the use of a long-lived asset or asset group; or (vi) a current expectation that, more likely than not, a long-lived asset or asset group will be sold or otherwise disposed of significantly before the end of its previously estimated useful life.

Upon recognition of an event, as previously described, we use an estimate of the related undiscounted cash flows, excluding interest, over the remaining life of the property and equipment and long-lived assets in assessing their recoverability. We measure impairment loss as the amount by which the carrying amount of the asset exceeds the fair value of the asset. We primarily employ the two following methodologies for determining the fair value of a long-lived asset: (i) the amount at which the asset could be bought or sold in an arm’s-length transaction between unrelated willing parties; or (ii) the present value of expected future cash flows grouped at the lowest level for which there are identifiable independent cash flows.

Business Combinations

We account for business combinations using the acquisition method of accounting, and accordingly, we record the assets and liabilities of the acquired business at their fair values as of the date of acquisition. We record the excess of the purchase price over the estimated fair value as goodwill. Any change in the estimated fair value of the net assets recorded for acquisitions prior to the finalization of more detailed analysis, but not exceeding one year from the date of acquisition, will change the amount of the purchase price allocable to goodwill. We expense all acquisition costs as incurred. The application of business combination accounting and the assigning of fair value to assets acquired and liabilities assumed requires the use of significant estimates and assumptions. We use information obtained during the acquisition due diligence process, including historic operating results, projected future results, the carrying value of assets and liabilities at the time of acquisition, and input from valuation specialists. To determine the fair value to record, we use this information along with our industry experience and expected returns to estimate (i) the amount at which the asset could be bought or sold or liability settled in an arm’s length transaction between unrelated willing parties and (ii) the present value of expected future cash flows. We include the results of operations of an acquired business in our condensed consolidated financial statements from the acquisition date.

Impairment of Goodwill and Other Intangible Assets

In accordance with ASC Topic 350, Intangibles – Goodwill and Other, we perform goodwill impairment testing at least annually, unless indicators of impairment exist in interim periods. 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.The impairment test for goodwill uses a two-step approach. Step 1 compares the estimated fair value of a reporting unit with goodwill to its carrying value. If the carrying value exceeds the estimated fair value, Step 2 must be performed. Step 2 compares the carrying value of the reporting unit to the fair value of all of the assets and liabilities of the reporting unit (including any unrecognized intangibles) as if the reporting unit was acquired in a business combination. If the carrying amount of a reporting unit’s goodwill exceeds the implied fair value of its goodwill, we recognize an impairment loss equal to the excess.

When performing our Step 2 goodwill impairment testing, we estimate the fair value of our reporting unit based on the weighted average of the (i) Income Approach method (also known as the discounted cash flow (“DCF”) method, which utilizes the present value of cash flows to estimate fair value), (ii) Guideline Public Companies method, and (iii) Industry Transactions method. We

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project the future cash flows for our reporting unit based on our estimates, at that time, of future revenues, operating income, and other factors (such as working capital and capital expenditures). We take into account expected synergies and future growth. The discount rates used in our DCF method are based on a weighted-average cost of capital determined from relevant market comparisons. We apply a terminal value growth rate reflecting our estimated growth rate to the final year of the projected period. We then calculate the present value of the respective cash flows to estimate the fair value under the income approach. Under the market approach, we estimate a fair value based on comparable companies’ market multiples of revenues and earnings before interest, taxes, depreciation and amortization, after considering a control premium. Based on a comparison of the fair value determined to the carrying value, if we determine the goodwill is impaired, we proceed to Step 2. In Step 2, we compare the fair value of all of the assets and liabilities as if the reporting unit was acquired in a business combination to determine the impairment loss to record in order to prevent the goodwill balance from exceeding its implied fair value.

In addition to the required goodwill impairment analysis, we also review the recoverability of our net intangible assets with finite lives when an indicator of impairment exists. Based on our analysis of estimated undiscounted future cash flows expected to result from the use of these net intangibles with finite lives, we determine if we will recover their carrying values as of the test date. If not recoverable, we record an impairment charge.  

Beneficial Conversion Features

We treat the intrinsic value of a beneficial conversion feature inherent to a convertible note payable, which we do not bifurcate, do not account for separately from the convertible note payable, and we may not settle in cash upon conversion, as a discount to the convertible note payable. We amortize this discount over the period from the date of issuance to the note due date using the effective interest method. If we retire the note payable prior to the end of its contractual term, we expense the unamortized discount in the period of retirement to interest expense. In general, we measure the beneficial conversion feature by comparing the effective conversion price, after considering the relative fair value of detachable instruments included in the financing transaction, if any, to the fair value of the common shares at the commitment date to be received upon conversion.  The beneficial conversion feature was fully amortized as of March 31, 2015 and December 31, 2014 with the retirement of the Sellers Notes during the third quarter of 2014.

Stock Options

We estimate the fair value of stock options using the Black-Scholes-Merton valuation model. Significant Level 3 assumptions used in the calculation were determined as follows:

· We determine the expected term under the simplified method using an average of the contractual term and vesting period of the award as appropriate statistical data required to properly estimate the expected term;

· We measure the expected volatility using the historical daily changes in the market price of our common stock and applicable comparable companies;

· We approximate the risk-free interest rate using the implied yield on zero-coupon U.S. Treasury bonds with a remaining maturity equal to the expected term of the awards; and

· We base forfeitures on the history of cancellations of options granted by us and our analysis of potential future forfeitures.

Accounting for Income Taxes

We use the asset and liability method to account for income taxes. We use significant judgment in determining the provision for income taxes, deferred tax assets and liabilities, and any valuation allowance recorded against net deferred tax assets. In preparing our condensed consolidated financial statements, we are required to estimate income taxes in each of the jurisdictions in which we operate. This process involves estimating the actual current tax liability together with assessing temporary differences resulting from differing treatment of items, such as deferred revenue, depreciation on property, plant and equipment, intangible assets, goodwill, and losses for tax and accounting purposes. These differences result in deferred tax assets, which include tax loss carryforwards, and liabilities, which are included within our condensed consolidated balance sheets. We then assess the likelihood that deferred tax assets will be recovered from future taxable income, and to the extent that recovery is not likely or there is insufficient operating history, we establish a valuation allowance. To the extent we establish or increase a valuation allowance in a period, we include an adjustment within the tax provision of our condensed consolidated statements of operations. As of March 31, 2015 and December 31, 2014, we had established a full valuation allowance for all deferred tax assets.

As of March 31, 2015 and December 31, 2014, we did not recognize any assets or liabilities relative to uncertain tax positions, nor do we anticipate any significant unrecognized tax benefits will be recorded during the next 12 months. We recognize any interest or penalties related to unrecognized tax benefits in income tax expense. Since there are no unrecognized tax benefits as a result of tax positions taken, there are no accrued penalties or interest.

Financial Instruments

Our financial instruments as of March 31, 2015 and December 31, 2014 consist of cash and cash equivalents, accounts receivable, line of credit, accounts payable, accrued liabilities, and capital lease obligations. We do not believe that we are exposed to significant

17

interest, currency, or credit risks arising from these financial instruments. The fair values of these financial instruments approximates their carrying values using Level 3 inputs, based on their short maturities or for long-term portions of capital lease obligations, based on borrowing rates currently available to us for loans with similar terms and maturities.

Recently Issued Accounting Pronouncements

In May 2014, the FASB issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers¸ or ASU 2014-09.  This new standard will replace all current U.S. GAAP guidance on this topic and eliminate all industry-specific guidance. The new revenue recognition standard provides a unified model to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to correlate with the transfer of promised goods or services to customers in an amount that reflects the consideration for which the entity expects to be entitled in exchange for those goods or services. In April 2015, the FASB deferred the effective date of ASU 2014-09 by one year, while allowing a company to adopt the new revenue standard early but not before the original effective date.  This guidance will be effective as to us on January 1, 2018 and can be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. We are evaluating the impact of adopting ASU 2014-09 on our consolidated financial statements.

In June 2014, the FASB issued Accounting Standards Update 2014-12, Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period, or ASU 2014-12. The update requires that a performance target that affects vesting and could be achieved after the requisite service period be treated as a performance condition. A reporting entity should apply guidance in Topic 718 as it relates to awards with performance conditions that affect vesting to account for such awards. The amendments in ASU 2014-12 are effective for annual reporting periods beginning after December 15, 2015 and interim periods within those years. Early application is permitted. We do not expect the adoption of ASU 2014-12 to have any impact on our consolidated financial statements.

In August 2014, the FASB issued Accounting Standards Update 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, or ASU 2014-15. The update provides guidance about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. The amendments in ASU 2014-15 are effective for annual reporting periods ending after December 15, 2016 and interim periods within those years. Early application is permitted. We do not expect the adoption of ASU 2014-15 to have a significant impact on our consolidated financial statements.

In February 2015, the FASB issued Accounting Standards Update No. 2015-2, Consolidation (Topic 810)–Amendments to the Consolidation Analysis, or ASU 2015-2. ASU 2015-2 applies to entities in all industries and provides a new exception to registered money market funds and similar unregistered money market funds. It makes targeted amendmentsto existing consolidation guidance and ends the deferral granted to investment companies from applying the variable interest entity guidance. The targeted changes address most of the concerns of the asset management industry. However, ASU 2015-2 will impact entities across all industries, particularly those that use limited partnerships. ASU 2015-2 is effective for fiscal years, and interim reporting periods within those fiscal years, beginning after December 15, 2015, with early application permitted. We do not expect the adoption of ASU 2014-15 to have a significant impact on our consolidated financial statements.

There have been no other recent accounting pronouncements or changes in accounting pronouncements during the three months ended March 31, 2015 that are of significance, or potential significance to us.

Off-Balance Sheet Arrangements

We have no off-balance sheet debt or similar obligations. We have no transactions or obligations with related parties that are not disclosed, consolidated into, or reflected in our reported results of operations or financial position. We do not guarantee any third-party debt.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not Applicable.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of March 31, 2015.

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Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting identified in management’s evaluation pursuant to Rules 13a-15(d) or 15d-15(d) of the Exchange Act during the period covered by this Quarterly Report on Form 10-Q that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Limitations on Effectiveness of Controls and Procedures

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all error and all fraud. 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 design of a control system must reflect the fact that there are resource constraints, and 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, misstatements, errors, and instances of fraud, if any, within our Company have been or will be prevented or detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls also can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. We base the design of any system of controls in part on 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. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, internal controls may become inadequate as a result of changes in conditions, or through the deterioration of the degree of compliance with policies or procedures.

PART II: OTHER INFORMATION

Item 1. Legal Proceedings

We may be subject to legal proceedings in the ordinary course of business. As of the date of this Quarterly Report on Form 10-Q, we are not aware of any legal proceedings to which we are a party that we believe could have a material adverse effect on us.

Item 1A. Risk Factors

Not Applicable.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not Applicable.

Item 5. Other Information

Our indirect wholly owned subsidiary, Quest, entered into a Seventh Amendment to Loan Agreement, dated as of May 13, 2015, or the Amendment, with Regions Bank. Capitalized terms used herein have the meanings set forth in the Loan Agreement (as defined in the Amendment). The Amendment amended the Loan Agreement to, among other things, (i) reduce the applicable margin for eurodollar rate loans by 0.25% per annum, (ii) extend the maturity date to May 13, 2018, and (iii) modify the Permitted Acquisitions in certain respects.

The foregoing description of the Amendment is a summary only and is qualified in its entirety by reference to the full text of the Amendment, which is attached hereto as Exhibit 10.19(d).  

19

Item 6. Exhibits

Exhibit No.	Exhibit
10.19(d)	Seventh Amendment to Loan Agreement, dated as of May 13, 2015, by and between Quest Resource Management Group, LLC and Regions Bank
31.1	Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer
31.2	Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer
32.1	Section 1350 Certification of Chief Executive Officer
32.2	Section 1350 Certification of Chief Financial Officer
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

20

SIGNATURES

Pursuant to the requirements 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.

	QUEST RESOURCE HOLDING CORPORATION
Date: May 15, 2015	By:	/s/ Brian S. Dick
	Brian S. Dick
	President and Chief Executive Officer
Date: May 15, 2015	By:	/s/ Laurie L. Latham
	Laurie L. Latham
	Chief Financial Officer

21

EX-10.19(D)

Exhibit 10.19(d)

SEVENTH AMENDMENT TO LOAN AGREEMENT

This SEVENTH AMENDMENT TO LOAN AGREEMENT (this “Amendment”) is made as of May 13, 2015 by and between QUEST RESOURCE MANAGEMENT GROUP, LLC (formerly known as Quest Recycling Services, LLC), a Delaware limited liability company (the “Borrower”) and REGIONS BANK (the “Lender”).

WITNESSETH:

WHEREAS, the Borrower and the Lender have entered into that certain Loan Agreement dated as of December 15, 2010, (as amended, restated, supplemented or otherwise modified from time to time in writing prior to the date hereof, the “Loan Agreement”), for the purposes and consideration therein expressed;

WHEREAS, the Borrower and the Lender desire to extend the Revolving Credit Maturity Date under the Loan Agreement until May 13, 2018 and to otherwise amend the Loan Agreement as set forth herein, subject to the terms and condition hereof; and

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements contained herein and in the Loan Agreement and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto do hereby agree as follows:

ARTICLE I.Definitions and References

1.1Terms Defined in the Loan Agreement.  Unless the context otherwise requires or unless otherwise expressly defined herein, the terms defined in the Loan Agreement shall have the same meanings whenever used in this Amendment.

ARTICLE II.Amendment to Loan Agreement

2.1Amendments to Section 1.1.  The definitions of “Revolving Credit Maturity Date” “Applicable Margin” and “Eligible Wal-Mart Accounts” set forth in Section 1.1 of the Loan Agreement are hereby amended and restated to read in their entirety as follows:

“‘ApplicableMargin’means(a)2.25%perannumwithrespecttoEurodollarRateLoans, and(b)1.50%perannumwithrespecttoBaseRateLoans.

“‘Eligible Wal-Mart Accounts’ means each Eligible Account for which Wal-Mart/Sam’s is the Account Debtor; provided, however, that the aggregate of all Accounts owed by Wal-Mart/Sam’s does not exceed 70% of the Borrowing Base; provided further, however, that if such Accounts exceeds 70% of the Borrowing Base, such portion of such Accounts not in excess of 70% shall be eligible.”

“‘Permitted Acquisition’ means any acquisition by Borrower,whetherbypurchase,mergerorotherwise,ofall orsubstantiallyallof theassetsof,allof theequityinterests of,orabusinesslineorunitora divisionof, anyPerson; provided that:

(a)immediately priorthereto, and after giving effect thereto,noDefaultorEventofDefaultshallhaveoccurred andbecontinuingorwouldresult

therefrom;

(b)alltransactionsin connectiontherewithshallbe consummated,inallmaterialrespects,inaccordancewith allapplicablelaws;

(c)the Borrower shall be in compliance with the financialcovenantssetforthinArticleIXonaproforma basisaftergivingeffecttosuchacquisition asofthelast day ofthefiscalquartermostrecentlyendedforwhich financialstatementsandotherdocumentationhavebeen, or wererequiredtobe,deliveredinaccordancewithSection 7.1(b);

(d)theBorrowershallhavedeliveredtotheLenderat least ten(10)BusinessDayspriortosuchproposed acquisition,allavailablerelevantfinancialinformationwith respectto suchacquiredassets,a certificateconfirming compliancewiththe requirementssetforthherein,details regardingtheaggregateconsiderationforsuchacquisition and anyother information reasonably requested by the· Lender;

(e)any Person, assets or division acquired in accordanceherewithshallbeinsamebusinessor linesof businessinwhichtheBorrowerand/oritsSubsidiariesare permitted to engage in pursuant to Section 8.10 or a businessreasonablyrelatedorancillarythereto;

(f)the Borrower shall have a minimum liquidity consistingofavailablecashor cashequivalentsplus availabilityundertheRevolvingCreditCommitmentof at least$3,000,000aftergivingeffecttosuchacquisition;and

(g)for any acquisition to qualify as a Permitted Acquisition,theaggregatepurchasepriceforallPermitted Acquisitions(aftergivingeffecttosuchacquisition)during the calendar year in such proposed acquisition is to be consummated cannotexceed$4,500,000 in the aggregate.”

“‘Revolving Credit Maturity Date’ means May 13, 2018, or such earlier date on which the Revolving Credit Commitment terminates and such amounts outstanding thereunder become due and payable as provided in this Agreement.”

ARTICLE III.Conditions Precedent

3.1Effective Date.  The effectiveness of this Amendment (the date of such effectiveness referred to herein as, the “Effective Date”) is subject to satisfaction of the following conditions as determined by the Lender in its sole discretion:

(a)Amendment. The Lender shall have received one or more counterparts of this Amendment duly executed by the Borrower and each other Loan Party.

(b)Officer’s Certificate. The Lender shall have received a certificate of a duly authorized officer of the Borrower, certifying (i) that attached copies of Borrower’s Constituent Documents are true and complete, and in full force and effect, without amendment except as shown, (ii) that an attached copy of resolutions authorizing execution and delivery of this Amendment is true and complete, and that such resolutions are in full force and effect, were duly adopted, have not been

2

amended, modified or revoked, and constitute all resolutions adopted with respect to this credit facility, (iii) to the title, name and signature of the Person authorized to sign this Amendment; and (iv) that the representations and warranties contained in Article IV are true and correct as of the Effective Date;

(c)GovernmentalCertificates. The Lender shall have received certificatesoftheappropriategovernment officialsof thestateoforganizationof eachLoanParty and each jurisdictioninwhicheachLoanPartyisrequiredtodobusiness,astotheexistenceand goodstanding ofsuchLoanParty,eachdatedwithinten(10)dayspriortotheEffective Date;

(d)UCC Searches. The Lender shall have received results of UniformCommercial Code searches showingallfinancingstatementsandother documents orinstrumentsonfile againsteach LoanPartyintheofficeoftheSecretary ofStateofsuchLoanParty'sstateof organization,suchsearchestobeasofadatenomorethanthirty(30)dayspriortothe datehereof;

(e)Insurance Matters. The Lender shall have received copies of insurance certificates describing all insurancepoliciesrequiredbySection7.5 of the Loan Agreement;

(f)Representations and Warranties. Allofthe representations andwarranties containedinArticleIV hereofshallbetrueandcorrect; and

(g)NoDefault,MaterialAdverseEffect. NoDefaultorMaterialAdverse Effectshallhaveoccurredandbecontinuing,orwould resultfromoraftergivingeffect tothis Amendment; and

(h)Credit Approval. This Amendment shall have been approved by the appropriate authorities at the Lender.

ARTICLE IV.Representations and Warranties

4.1Representations and Warranties.  In order to induce the Lender to enter into this Amendment, the Borrower represents and warrants to the Lender as follows:

(a)The representations and warranties of the Loan Parties contained in the Loan Agreement and in each other Loan Document are true and correct in all material respects on and as of the date hereof, except that (A) if a qualifier relating to materiality, Material Adverse Effect or a similar concept applies, such representation or warranty is true and correct in all respects, and (B) to the extent that such representations and warranties specifically refer to an earlier date, they are true and correct in all material respects as of such earlier date (except that if a qualifier relating to materiality, Material Adverse Effect or a similar concept applies, such representation or warranty is true and correct in all respects as of such earlier date).

(b)No Default or Event of Default has occurred and is continuing or will exist after giving effect to this Amendment.

(c)Since December 31, 2014, no event, circumstance, or change has occurred that has caused or evidences, either in any case or in the aggregate, a Material Adverse Effect.

(d)The Borrower has the right, power and authority and has taken all necessary limited liability company and other organizational action to authorize the execution, delivery and performance of this Amendment and the transactions contemplated hereby.

3

(e)This Amendment has been duly authorized by all necessary limited liability company action or other organizational action and duly executed and delivered by it, and constitutes its legal, valid and binding obligation, except as may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally.

ARTICLE V.Miscellaneous

5.1Ratification of Loan Documents and Liens.  Except as expressly modified and superseded by this Amendment, the terms and provisions of the Loan Documents are ratified and confirmed and shall continue in full force and effect.  The Borrower and the Lender agree that the Loan Documents shall continue to be legal, valid, binding and enforceable in accordance with their respective terms.  The Borrower further expressly acknowledges and agrees that the Lender has a valid, non-avoidable, enforceable, and perfected security interest in and lien against each item of collateral described in the Loan Documents and that such security interest and lien secures the payment and the performance of all obligations of the Borrower under the Loan Documents.

5.2Release.  The Borrower hereby waives and releases any and all current existing claims, counterclaims, defenses, or set-offs of every kind and nature which it has or might have against the Lender arising out of, pursuant to, or pertaining in any way to the Loan Agreement, any and all documents and instruments delivered in connection with or relating to the foregoing, or this Amendment.  Neither the Borrower nor any other Loan Party may sue the Lender based on any existing claim or assert any currently existing claims, defenses, demands, actions, or liabilities against the Lender arising out of, pursuant to, or pertaining in any way to the Loan Agreement, any and all documents and instruments delivered in connection with or relating to the foregoing or this Amendment.

5.3Headings.  Section and subsection headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purpose or be given any substantive effect.

5.4Fees and Expenses.  The Borrower shall pay on demand all costs and expenses of the Lender in connection with the preparation, execution and delivery of this Amendment and any other documents prepared in connection herewith, including, without limitation, the reasonable fees and out-of-pocket expenses of counsel for the Lender.

5.5Governing Law; Jurisdiction; Waiver of Jury Trial; Etc.  This AMENDMENT shall be governed by and construed in accordance with the laws of the State of TEXAS, and shall be further subject to the provisions of Sections 11.12 and 11.19 of the Loan Agreement.

5.6Entire Agreement.  This Amendment, together with all the Loan Documents (collectively, the “Relevant Documents”), sets forth the entire understanding and agreement of the parties hereto in relation to the subject matter hereof and supersedes any prior negotiations and agreements among the parties relating to such subject matter.  No promise, condition, representation or warranty, express or implied, not set forth in the Relevant Documents shall bind any party hereto, and no such party has relied on any such promise, condition, representation or warranty.  Each of the parties hereto acknowledges that, except as otherwise expressly stated in the Relevant Documents, no representations, warranties or commitments, express or implied, have been made by any party to the other in relation to the subject matter hereof or thereof.  None of the terms or conditions of this Amendment may be changed, modified, waived or canceled orally or otherwise except in writing in accordance with Section 11.10 of the Loan Agreement.  In executing this Amendment, the Borrower warrants and represents that the Borrower is not

4

relying on any statement or representation other than those in this Amendment and is relying upon its own judgment and advice of its attorneys.

5.7Enforceability.  Should any one or more of the provisions of this Amendment be determined to be illegal or unenforceable as to one or more of the parties hereto, all other provisions nevertheless shall remain effective and binding on the parties hereto.

5.8Successors and Assigns.  This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns (subject to Section 11.8 of the Loan Agreement).

5.9Construction.  Whenever the context hereof so required, reference to the singular shall include the plural and likewise, the plural shall include the singular; words denoting gender shall be construed to mean the masculine, feminine or neuter, as appropriate; and specific enumeration shall not exclude the general but shall be construed as cumulative of the general recitation.

5.10Further Assurances.   The Borrower agrees to execute such other and further documents and instruments as the Lender may request to implement the provisions of this Amendment and to perfect and protect the liens and security interests created by the Security Agreement and the other Loan Documents.

5.11Survival.  All representations, warranties, or covenants made in any Loan Document or this Amendment, including, without limitation, any document furnished in connection with this Amendment, shall survive the execution and delivery of this Amendment and the Loan Documents, and no investigation by the Lender or any closing shall affect the representations and warranties or the right of the Lender to rely upon them.

5.12Counterparts.  This Amendment may be executed in any number of counterparts, each of which when executed and delivered shall be deemed to be an original, and all of which when taken together shall constitute one and the same agreement.  Delivery of an executed counterpart of a signature page of this Amendment by facsimile or electronic transmission (including .pdf file) shall be effective as delivery of a manually executed counterpart hereof.

[Signature Pages Follow]

5

IN WITNESS WHEREOF, this Amendment is executed effective as of the date first above written.

QUEST RESOURCE MANAGEMENT GROUP, LLC,
a Delaware limited liability company

By: /s/ Laurie L. Latham

Name: Laurie L. Latham

Title: Chief Financial Officer

Signature Page to Seventh Amendment to Loan Agreement

REGIONS BANK

By: /s/ Meredith Worley

Name: Meredith Worley

Title: Assistant Vice President

Signature Page to Seventh Amendment to Loan Agreement

CONSENT AND AGREEMENT OF GUARANTORS

As an inducement to Lender to execute, and in consideration of Lender’s execution of, this Amendment, each of the undersigned hereby consents to this Amendment and agrees that this Amendment shall in no way release, diminish, impair, reduce or otherwise adversely affect the obligations and liabilities of such undersigned under the guaranty agreement executed by such undersigned in connection with the Loan Agreement, or under any Loan Documents, agreements, documents or instruments executed by such undersigned to create liens, security interests or charges to secure any of the Obligations (as defined in the Loan Agreement), all of which are in full force and effect.  Each of the undersigned further represents and warrants to Lender that (a) the representations and warranties in each Loan Document to which it is a party are true and correct in all material respects on and as of the date of this Amendment as though made on the date of this Amendment (except to the extent that such representations and warranties speak to a specific date), (b) such undersigned is in full compliance with all covenants and agreements contained in each Loan Document to which such undersigned is a party, and (c) no Default or Event of Default has occurred and is continuing.  Each of the undersigned hereby releases Lender from any liability for actions or omissions in connection with the Loan Documents occurring prior to the date of this Amendment.  This Consent and Agreement of Guarantors shall be binding upon such undersigned and its respective successors and assigns and shall inure to the benefit of Lender and its respective successors and assigns.

[Signature Page Follow]

GUARANTORS:

QUEST RESOURCE HOLDING CORPORATION,
a Nevada corporation

By: /s/ Laurie L. Latham

Name: Laurie L. Latham

Title: Chief Financial Officer

EARTH911, INC.,
a Delaware corporation

By: /s/ Laurie L. Latham

Name: Laurie L. Latham

Title: Chief Financial Officer

Signature Page to Consent and Agreement of Guarantors to Seventh Amendment to Loan Agreement

EX-31.1

Exhibit 31.1

Rule 13a-14(a)/15 d -14(a) Certification of Chief Executive Officer

I, Brian S. Dick, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Quest Resource Holding Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 15, 2015	/s/ Brian S. Dick
	Brian S. Dick
	President and Chief Executive Officer
	(Principal Executive Officer)

EX-31.2

Exhibit 31.2

Rule 13a-14(a)/15 d -14(a) Certification of Chief Financial Officer

I, Laurie L. Latham, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Quest Resource Holding Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 15, 2015	/s/ Laurie L. Latham
	Laurie L. Latham
	Chief Financial Officer
	(Principal Financial and Accounting Officer)

EX-32.1

Exhibit 32.1

SECTION 1350 CERTIFICATION OF CHIEF EXECUTIVE OFFICER

In connection with the Quarterly Report on Form 10-Q of Quest Resource Holding Corporation (the “Company”) for the quarterly period ended March 31, 2015, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Brian S. Dick, President and Chief Executive Officer of the Company, certify, to the best of my knowledge and belief, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)); and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Brian S. Dick

Brian S. Dick

President and Chief Executive Officer

(Principal Executive Officer)

Date: May 15, 2015

This certification accompanies the Quarterly Report on Form 10-Q to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of Quest Resource Holding Corporation under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Quarterly Report on Form 10-Q), irrespective of any general incorporation language contained in such filing.

EX-32.2

Exhibit 32.2

SECTION 1350 CERTIFICATION OF CHIEF FINANCIAL OFFICER

In connection with the Quarterly Report on Form 10-Q of Quest Resource Holding Corporation (the “Company”) for the quarterly period ended March 31, 2015, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Laurie L. Latham, Chief Financial Officer of the Company, certify, to the best of my knowledge and belief, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)); and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Laurie L. Latham

Laurie L. Latham

Chief Financial Officer

(Principal Financial and Accounting Officer)

Date: May 15, 2015

This certification accompanies the Quarterly Report on Form 10-Q to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of Quest Resource Holding Corporation under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Quarterly Report on Form 10-Q), irrespective of any general incorporation language contained in such filing.

XML

Fair Value of Financial Instruments - Additional Information (Detail) (USD $)	0 Months Ended
	May 07, 2015	Mar. 31, 2015	Dec. 31, 2014	May 28, 2014	May 07, 2014	Mar. 31, 2014
Class Of Warrant Or Right [Line Items]
Number of warrants issued to purchase of common stock		0		1,650,000	200,000	0
Warrants Vested					100,000
Warrant liability during the period		$ 28,921	$ 34,857
Subsequent Event [Member]
Class Of Warrant Or Right [Line Items]
Warrants Vested	100,000
Subsequent Event [Member] | Black-Scholes-Merton Valuation Model [Member]
Class Of Warrant Or Right [Line Items]
Fair value assumption, expected volatility	81.10%
Fair value assumption, risk free interest rate	0.59%
Fair value assumption, expected term	2 years 1 month 6 days
Fair value assumption, expected dividend yield	0.00%
Grant date fair value of the initial warrant valuation	$ 0.32

XML

Stockholders' Equity - Summary of Stock Option Activity (Detail) (USD $)	3 Months Ended
	Mar. 31, 2015
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Outstanding Beginning Balance, Number of Shares	5,006,532
Granted, Number of Shares	45,000
Canceled/Forfeited, Number of Shares	(86,252)
Outstanding Ending Balance, Number of Shares	4,965,280
Outstanding Beginning Balance, Weighted-Average Exercise Price Per Share	$ 2.66
Granted, Weighted-Average Exercise Price Per Share	$ 1.30
Canceled/Forfeited, Weighted Average Exercise Price Per Share	$ 2.05
Outstanding Ending Balance, Weighted Average Exercise Price Per Share	$ 2.65
Outstanding, 1.45-3.75 [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Exercise Price Per Share, Minimum	$ 1.45
Exercise Price Per Share, Maximum	$ 3.75
Granted, 1.28-1.46 [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Exercise Price Per Share, Minimum	$ 1.28
Exercise Price Per Share, Maximum	$ 1.46
Canceled/Forfeited, 2.05-2.10 [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Exercise Price Per Share, Minimum	$ 2.05
Exercise Price Per Share, Maximum	$ 2.10
Outstanding, 1.28-3.75 [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Exercise Price Per Share, Minimum	$ 1.28
Exercise Price Per Share, Maximum	$ 3.75

XML

Stockholders' Equity - Summary of Warrants Issued and Outstanding (Detail) (USD $)	3 Months Ended
	Mar. 31, 2015	May 28, 2014	May 07, 2014
Class Of Warrant Or Right [Line Items]
Exercise Price		$ 4.31	$ 2.65
Shares of Common Stock	11,791,000
Exercisable Warrants [Member]
Class Of Warrant Or Right [Line Items]
Shares of Common Stock	11,691,000
Exercisable Warrants [Member] | Warrants One [Member]
Class Of Warrant Or Right [Line Items]
Date of Issuance	Apr. 18, 2014
Date of Expiration	Apr. 01, 2017
Exercise Price	$ 2.00
Shares of Common Stock	1,441,000
Exercisable Warrants [Member] | Warrant Two [Member]
Class Of Warrant Or Right [Line Items]
Date of Issuance	May 07, 2014
Date of Expiration	May 07, 2017
Exercise Price	$ 2.65
Shares of Common Stock	100,000
Exercisable Warrants [Member] | Warrants Three [Member]
Class Of Warrant Or Right [Line Items]
Date of Issuance	May 28, 2014
Date of Expiration	Oct. 31, 2016
Exercise Price	$ 4.31
Shares of Common Stock	450,000
Exercisable Warrants [Member] | Warrants Four [Member]
Class Of Warrant Or Right [Line Items]
Date of Issuance	Sep. 24, 2014
Date of Expiration	Sep. 24, 2019
Exercise Price	$ 2.50
Shares of Common Stock	9,000,000
Exercisable Warrants [Member] | Warrant Five [Member]
Class Of Warrant Or Right [Line Items]
Date of Issuance	Oct. 20, 2014
Date of Expiration	Oct. 20, 2019
Exercise Price	$ 2.50
Shares of Common Stock	700,000
Contingent Warrants [Member]
Class Of Warrant Or Right [Line Items]
Shares of Common Stock	100,000
Less warrants cancelled	(1,200,000)
Contingent Warrants [Member] | Warrant Six [Member]
Class Of Warrant Or Right [Line Items]
Date of Issuance	May 07, 2014
Date of Expiration	May 07, 2017
Exercise Price	$ 2.65
Shares of Common Stock	100,000
Contingent Warrants [Member] | Warrants Seven [Member]
Class Of Warrant Or Right [Line Items]
Date of Issuance	May 28, 2014
Date of Expiration	Oct. 31, 2018
Exercise Price	$ 4.31
Shares of Common Stock	1,200,000

XML

Goodwill and Other Intangible Assets - Additional Information (Detail) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Goodwill And Intangible Assets Disclosure [Abstract]
Amortization of intangibles	$ 903,091	$ 882,096
Indefinite-lived intangible assets other than goodwill	$ 0

XML

Summary of Significant Accounting Policies - Additional Information (Detail) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014
Accounting Policies [Abstract]
Potentially dilutive securities include options, restricted stock units, warrants, and convertible promissory notes	16,832,380	15,096,948
Finished goods inventory	$ 41,544		$ 30,759
Reserve for inventory obsolescence	$ 0

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Material Subsequent Events - Additional Information (Detail) (Seventh Amendment to Loan Agreement with Regions Bank [Member], Subsequent Event [Member])	0 Months Ended
	May 13, 2015
Subsequent Event [Line Items]
Maturity date of loan agreement with Regions Bank	May 13, 2018
Eurodollar [Member]
Subsequent Event [Line Items]
Decrease in applicable margin rate of loans during the period	0.25%

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Stockholders' Equity - Additional Information -Shares Issued for Vested Restricted Stock Units (Detail)	3 Months Ended	0 Months Ended
	Mar. 31, 2015	Mar. 05, 2015
Schedule Of Stockholders Equity [Line Items]
Shares issued for vested restricted stock units, Shares	56,500
Employee [Member]
Schedule Of Stockholders Equity [Line Items]
Shares issued for vested restricted stock units, Shares		56,500

XML

Capital Lease Obligations - Additional Information (Detail) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Debt Disclosure [Abstract]
Interest expense related to capital leases	$ 487	$ 638

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Stockholders' Equity - Additional Information - Restricted Stock Units (Detail) (USD $)	3 Months Ended		12 Months Ended	1 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014	Apr. 30, 2014
Schedule Of Stockholders Equity [Line Items]
Shares issued for vested restricted stock units, Shares	56,500
Potentially dilutive securities include options, restricted stock units, warrants, and convertible promissory notes	16,832,380	15,096,948
Restricted Stock Units [Member]
Schedule Of Stockholders Equity [Line Items]
Fair value of restricted stock unit	3.75
Fair value of restricted stock unit, forfeiture rate	0.00%
Stock-based compensation expense	0
Potentially dilutive securities include options, restricted stock units, warrants, and convertible promissory notes	76,100		132,600
2012 Incentive Compensation Plan [Member] | Restricted Stock Units [Member]
Schedule Of Stockholders Equity [Line Items]
Shares granted				132,600

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Property and Equipment, Net, and Other Assets

3 Months Ended

Mar. 31, 2015

Property Plant And Equipment [Abstract]

Property and Equipment, Net, and Other Assets

3. Property and Equipment, Net, and Other Assets

At March 31, 2015 and December 31, 2014, property and equipment, net, and other assets consisted of the following:

	March 31,		December 31,
	2015		2014
	(Unaudited)
Property and equipment, net of accumulated depreciation of $1,768,881      and $1,692,835 as of March 31, 2015 and December 31, 2014,      respectively	$	627,935	$	533,837
Security deposits and other assets		232,333		219,656
Property and equipment, net, and other assets	$	860,268	$	753,493

We compute depreciation using the straight-line method over the estimated useful lives of the property and equipment. The depreciation expense related to property and equipment was $76,046 and $69,567 for the three months ended March 31, 2015 and 2014, respectively.  

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Stockholders' Equity - Additional Information - Shares Issued Upon Conversion of Note (Detail) (USD $)	3 Months Ended
	Mar. 31, 2014
Schedule Of Stockholders Equity [Line Items]
Shares issued upon conversion of note, Shares	23,201
Convertible Notes Payable [Member]
Schedule Of Stockholders Equity [Line Items]
Debt instrument principal amount	25,000
Convertible note accrued interest	4,001
Shares issued upon conversion of note, Shares	23,201

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Property and Equipment, Net, and Other Assets - Components of Property and Equipment,net,and other assets ( Parenthetical) (Detail) (USD $)	Mar. 31, 2015	Dec. 31, 2014
Property Plant And Equipment [Abstract]
Depreciation	$ 1,768,881	$ 1,692,835

XML

Property and Equipment, Net, and Other Assets - Components of Property and Equipment,net,and other assets (Detail) (USD $)	Mar. 31, 2015	Dec. 31, 2014
Property Plant And Equipment [Abstract]
Property and equipment, net of depreciation	$ 627,935	$ 533,837
Security deposits and other assets	232,333	219,656
Property and Equipment net and other assets	$ 860,268	$ 753,493

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Stockholders' Equity - Additional Information - Warrants (Detail)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	May 28, 2014	May 07, 2014
Schedule Of Stockholders Equity [Line Items]
Warrants issued	0	0	1,650,000	200,000
Number of exercised warrants	0
Number of warrants expired		0
Warrants outstanding	11,791,000
Contingent Warrants [Member]
Schedule Of Stockholders Equity [Line Items]
Warrants forfeited	1,200,000
Warrants outstanding	100,000
Exercisable Warrants [Member]
Schedule Of Stockholders Equity [Line Items]
Warrants outstanding	11,691,000

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Property and Equipment, Net, and Other Assets - Additional Information (Detail) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Property Plant And Equipment [Abstract]
Depreciation	$ 76,046	$ 69,567

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Goodwill and Other Intangible Assets - Schedule of Finite-Lived Intangible Assets (Detail) (USD $)	3 Months Ended	12 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Finite Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 20,652,387	$ 20,501,550
Accumulated Amortization	6,289,024	5,385,933
Net	14,363,363	15,115,617
Customer relationships [Member]
Finite Lived Intangible Assets [Line Items]
Estimated Useful Life	5 years	5 years
Gross Carrying Amount	12,720,000	12,720,000
Accumulated Amortization	4,346,000	3,710,000
Net	8,374,000	9,010,000
Trademarks [Member]
Finite Lived Intangible Assets [Line Items]
Estimated Useful Life	7 years	7 years
Gross Carrying Amount	6,230,000	6,230,000
Accumulated Amortization	1,520,417	1,297,917
Net	4,709,583	4,932,083
Patents [Member]
Finite Lived Intangible Assets [Line Items]
Estimated Useful Life	7 years	7 years
Gross Carrying Amount	230,683	230,683
Accumulated Amortization	230,683	230,683
Software [Member]
Finite Lived Intangible Assets [Line Items]
Estimated Useful Life	7 years	7 years
Gross Carrying Amount	1,164,551	1,013,714
Accumulated Amortization	55,132	25,899
Net	1,109,419	987,815
Customer lists [Member]
Finite Lived Intangible Assets [Line Items]
Estimated Useful Life	5 years	5 years
Gross Carrying Amount	307,153	307,153
Accumulated Amortization	136,792	121,434
Net	$ 170,361	$ 185,719

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Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2015

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Principals of Presentation, Consolidation, and Reclassifications

The condensed consolidated financial statements included herein have been prepared by us without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”), and should be read in conjunction with the audited financial statements for the year ended December 31, 2014. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted, as permitted by the SEC, although we believe the disclosures that are made are adequate to make the information presented herein not misleading.

The accompanying condensed consolidated financial statements reflect, in our opinion, all normal recurring adjustments necessary to present fairly our financial position at March 31, 2015, and the results of our operations and cash flows for the periods presented. We derived the December 31, 2014 condensed consolidated balance sheet data from audited financial statements, but did not include all disclosures required by GAAP. As Quest, Earth911, and YouChange are operating as ecology based green service companies, we did not deem segment reporting necessary.

All intercompany accounts and transactions have been eliminated in consolidation. Certain reclassifications have been made to prior year balances to conform to the current year presentation that did not have an effect on our net loss or net loss per share. Interim results are subject to seasonal variations, and the results of operations for the three months ended March 31, 2015 are not necessarily indicative of the results to be expected for the full year.

Revenue Recognition

We recognize revenue only when all of the following criteria have been met:

· persuasive evidence of an arrangement exists;

· delivery has occurred or services have been rendered;

· the fee for the arrangement is fixed or determinable; and

· collectability is reasonably assured.

Persuasive Evidence of an Arrangement – We document all terms of an arrangement in a service agreement or quote signed or confirmed by the customer prior to recognizing revenue.

Delivery Has Occurred or Services Have Been Performed – We perform all services or deliver all products prior to recognizing revenue. Services are deemed to be performed when the services are complete.

The Fee for the Arrangement is Fixed or Determinable – Prior to recognizing revenue, a customer’s fee is either fixed or determinable under the terms of the quote, service agreement, or accepted customer purchase order.

Collectability Is Reasonably Assured – We assess collectability on a customer by customer basis based on criteria outlined by management.

We provide businesses with management programs to reuse, recycle, and dispose of a wide variety of waste streams and recyclables generated by their business. We utilize third-party subcontractors to execute the collection, transport, and recycling or disposal of used motor oil, oil filters, scrap tires, cooking oil, and expired food products. We evaluate the criteria outlined in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Subtopic 605-45, Revenue Recognition—Principal Agent Considerations, in determining whether it is appropriate to record the gross amount of service revenue and related costs or the net amount earned as management fees. Generally, when we are primarily obligated in a transaction, have latitude in establishing prices and selecting suppliers, have credit risk, or have several but not all of these indicators, we record revenue gross and record amounts collected from customers for sales tax on a net basis. In situations in which we are not primarily obligated, we do not have credit risk, or we determine amounts earned using fixed percentage or fixed payment schedules, we record the net amounts as management fees earned. Currently, we have no contracts accounted for as management fees.

Earth911 revenue primarily represents licensing fees that we recognize ratably over the term of the license. We derive some revenue from advertising contracts, which we recognize ratably over the term that the advertisement appears on our website.

Net Loss Per Share

We compute basic net loss per share by dividing net loss applicable to common stockholders by the weighted average number of shares of common stock outstanding during the period. We have other potentially dilutive securities outstanding that are not shown in a diluted net loss per share calculation because their effect in both 2015 and 2014 would be anti-dilutive. These potentially dilutive securities include options, restricted stock units, warrants, and convertible promissory notes, and totaled 16,832,380 and 15,096,948 shares at March 31, 2015 and 2014, respectively.

The following table sets forth the computation of basic and diluted loss per share:

	Three Months Ended March 31,
	2015			2014
	(Unaudited)			(Unaudited)
Net loss applicable to common stockholders - numerator for    basic and diluted earnings per share	$	(1,519,040	)	$	(1,488,423	)
Weighted average common shares outstanding -    denominator for basic and diluted earnings per share		111,617,626			95,821,525
Net loss per share:
Basic and diluted	$	(0.01	)	$	(0.02	)

The following table sets forth the anti-dilutive securities excluded from diluted loss per share:

	March 31,
	2015		2014
	(Unaudited)		(Unaudited)
Anti-dilutive securities excluded from diluted loss per share:
Stock options		4,965,280		4,096,948
Restricted stock units		76,100		—
Warrants		11,791,000		—
Convertible notes		—		11,000,000
		16,832,380		15,096,948

Inventories

We record inventories within “Prepaid expenses and other current assets” within our condensed consolidated balance sheets.  As of March 31, 2015 and December 31, 2014, all inventories were finished goods with a balance of $41,544 and $30,759, respectively, and consisted of waste disposal equipment, with no reserve for inventory obsolescence at either date.

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Goodwill and Other Intangible Assets - Schedule of Indefinite-Lived Intangible Assets (Detail) (USD $)	3 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Indefinite lived intangible asset:
Goodwill Useful Life Description	Indefinite
Goodwill	$ 58,337,290	$ 58,337,290

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Stockholders' Equity - Additional Information (Detail) (USD $)	3 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Equity [Abstract]
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, shares authorized	200,000,000	200,000,000
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares issued	111,657,804	111,601,304
Common stock, shares outstanding	111,657,804	111,601,304
Employee stock purchase plan expense	$ 9,726

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CONDENSED CONSOLIDATED BALANCE SHEETS (USD $)	Mar. 31, 2015	Dec. 31, 2014
Current assets:
Cash and cash equivalents	$ 3,311,537	$ 3,154,540
Accounts receivable, less allowance for doubtful accounts of $533,094 and $760,917 as of March 31, 2015 and December 31, 2014, respectively	28,621,862	29,631,843
Prepaid expenses and other current assets	752,015	684,032
Total current assets	32,685,414	33,470,415
Goodwill	58,337,290	58,337,290
Intangible assets, net	14,363,363	15,115,617
Property and equipment, net, and other assets	860,268	753,493
Total assets	106,246,335	107,676,815
Current liabilities:
Line of credit	5,250,000	5,250,000
Accounts payable and accrued liabilities	26,379,122	26,621,907
Deferred revenue and other current liabilities	323,521	282,189
Total current liabilities	31,952,643	32,154,096
Other long-term liabilities	44,127	45,206
Total liabilities	31,996,770	32,199,302
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.001 par value, 10,000,000 shares authorized, no shares issued or outstanding as of March 31, 2015 and December 31, 2014, respectively
Common stock, $0.001 par value, 200,000,000 shares authorized, 111,657,804 and 111,601,304 shares issued and outstanding as of March 31, 2015 and December 31, 2014, respectively	111,658	111,601
Additional paid-in capital	151,080,327	150,789,292
Accumulated deficit	(76,942,420)	(75,423,380)
Total stockholders’ equity	74,249,565	75,477,513
Total liabilities and stockholders’ equity	$ 106,246,335	$ 107,676,815

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Stockholders' Equity - Additional Information - Warrants for Services (Detail) (USD $)	3 Months Ended
	Mar. 31, 2015	May 28, 2014	May 07, 2014	Mar. 31, 2014
Schedule Of Stockholders Equity [Line Items]
Warrants issued	0	1,650,000	200,000	0
Warrant to purchase common stock, per share		$ 4.31	$ 2.65
Warrant Exercisable Immediately [Member]
Schedule Of Stockholders Equity [Line Items]
Warrants issued			100,000
Contingent Warrants [Member]
Schedule Of Stockholders Equity [Line Items]
Warrants forfeited	1,200,000
Contingent Warrants [Member] | Internally-Developed Software [Member]
Schedule Of Stockholders Equity [Line Items]
Warrants related to intangible assets	0
Warrant [Member]
Schedule Of Stockholders Equity [Line Items]
Stock-based compensation expense	5,936

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Cash flows from operating activities:
Net loss	$ (1,519,040)	$ (1,488,423)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation	76,046	69,567
Amortization of intangibles	903,091	882,096
Amortization of debt discount and deferred financing costs		451,642
Provision for doubtful accounts		41,338
Stock-based compensation	285,156	162,995
Changes in operating assets and liabilities:
Accounts receivable	1,009,981	(785,408)
Prepaid expenses and other current assets	(67,983)	(148,483)
Security deposits and other assets	(12,677)	332
Accounts payable and accrued liabilities	(236,849)	(2,800,411)
Deferred revenue and other current liabilities	41,332	108,014
Other long-term liabilities	4,557
Net cash provided by (used in) operating activities	483,614	(3,506,741)
Cash flows from investing activities:
Purchase of property and equipment	(170,144)	(6,698)
Purchase of capitalized software development	(150,837)	(77,425)
Net cash used in investing activities	(320,981)	(84,123)
Cash flows from financing activities:
Proceeds from line of credit		2,000,000
Repayments of capital lease obligations	(5,636)	(3,952)
Net cash provided by (used in) financing activities	(5,636)	1,996,048
Net increase (decrease) in cash and cash equivalents	156,997	(1,594,816)
Cash and cash equivalents at beginning of period	3,154,540	2,676,984
Cash and cash equivalents at end of period	3,311,537	1,082,168
Supplemental cash flow information:
Cash paid for interest	48,521	423,826
Notes Payable [Member]
Supplemental non-cash flow activities:
Common stock issued for conversion of notes payable		29,001
Restricted Stock Units [Member]
Supplemental non-cash flow activities:
Common stock issued for vested restricted stock units	$ 57

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Capital Lease Obligations - Summary of Capital Lease Obligations (Detail) (USD $)	Mar. 31, 2015	Dec. 31, 2014
Debt Disclosure [Abstract]
Capital lease obligations, imputed interest at 4.75%, with monthly payments of $1,507, through November 2016, secured by computer equipment	$ 41,614	$ 47,250
Total	41,614	47,250
Less: current maturities	(23,171)	(22,853)
Long-term portion	$ 18,443	$ 24,397

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Capital Lease Obligations (Tables)

3 Months Ended

Mar. 31, 2015

Debt Disclosure [Abstract]

Summary of Capital Lease Obligations

At March 31, 2015 and December 31, 2014, total capital lease obligations outstanding consisted of the following:

	March 31,			December 31,
	2015			2014
	(Unaudited)
Capital lease obligations, imputed interest at 4.75%, with monthly payments of $1,507, through November 2016, secured by computer equipment	$	41,614		$	47,250
Total		41,614			47,250
Less: current maturities		(23,171	)		(22,853	)
Long-term portion	$	18,443		$	24,397

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Capital Lease Obligations - Summary of Capital Lease Obligations (Parenthetical) (Detail) (Capital lease obligations, imputed interest at 4.75% [Member], USD $)	3 Months Ended	12 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Capital lease obligations, imputed interest at 4.75% [Member]
Long Term Debt And Equity Financings [Line Items]
Imputed interest rate for capital lease obligation	4.75%	4.75%
Monthly installment capital lease obligation	$ 1,507	$ 1,507

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The Company, Description of Business, and Future Liquidity Needs - Additional Information (Detail) (USD $)	3 Months Ended
	Mar. 31, 2015 Customer	Mar. 31, 2014	Dec. 31, 2014
Concentration Risk [Line Items]
Working capital	732,771		$ 1,316,319
Revenue [Member]
Concentration Risk [Line Items]
Number of customer	2
Revenue [Member] | Customer Accounted [Member]
Concentration Risk [Line Items]
Percentage of revenue	61.50%	76.10%

XML

The Company, Description of Business, and Future Liquidity Needs

3 Months Ended

Mar. 31, 2015

Accounting Policies [Abstract]

The Company, Description of Business, and Future Liquidity Needs

1. The Company, Description of Business, and Future Liquidity Needs

The accompanying condensed consolidated financial statements include the accounts of Quest Resource Holding Corporation (“QRHC”) and its subsidiaries, Earth911, Inc. (“Earth911”), Quest Resource Management Group, LLC (“Quest”), Landfill Diversion Innovations, LLC, and Youchange, Inc. (“YouChange”) (collectively, “QRHC,” the “Company,” “we,” “us,” or “our company”).

Operations – We are an environmental solutions company that serves as a single-source provider of full service recycling and waste stream management solutions, as well as an environmental program services and information provider. We offer innovative, cost-effective, one-stop reuse, recycling, and waste disposal management programs designed to provide regional and national customers with a single point of contact for managing a variety of recyclables and disposables. Two customers accounted for 61.5% and 76.1% of revenue for the three months ended March 31, 2015 and 2014, respectively.  We also own the Earth911.com website, offering original online environmental related content about reuse, recycling, and disposal of waste and recyclables, and we own a comprehensive online database of local recycling and proper disposal options. Our principal offices are located in Frisco, Texas.

Liquidity – As of March 31, 2015 and December 31, 2014, our working capital balance was $732,771 and $1,316,319, respectively.  We plan to increase liquidity by increasing our sales and operating leverage, in addition to other initiatives, which may include additional debt and/or equity financings.

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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Mar. 31, 2015	Dec. 31, 2014
Statement Of Financial Position [Abstract]
Allowance for doubtful accounts receivable	$ 533,094	$ 760,917
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares issued	111,657,804	111,601,304
Common stock, shares outstanding	111,657,804	111,601,304

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Material Subsequent Events

3 Months Ended

Mar. 31, 2015

Subsequent Events [Abstract]

Material Subsequent Events

11. Material Subsequent Events

On May 13, 2015, Quest entered into a Seventh Amendment to Loan Agreement with Regions. The loan agreement was amended to, among other things, (i) reduce the applicable margin for eurodollar rate loans by 0.25% per annum, (ii) extend the maturity date to May 13, 2018, and (iii) modify the permitted acquisitions in certain respects.

XML

Document and Entity Information	3 Months Ended
	Mar. 31, 2015	May 01, 2015
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2015
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q1
Trading Symbol	QRHC
Entity Registrant Name	Quest Resource Holding Corporation
Entity Central Index Key	0001442236
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		111,657,804

XML

Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2015

Accounting Policies [Abstract]

Principals of Presentation, Consolidation, and Reclassifications

Principals of Presentation, Consolidation, and Reclassifications

The condensed consolidated financial statements included herein have been prepared by us without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”), and should be read in conjunction with the audited financial statements for the year ended December 31, 2014. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted, as permitted by the SEC, although we believe the disclosures that are made are adequate to make the information presented herein not misleading.

The accompanying condensed consolidated financial statements reflect, in our opinion, all normal recurring adjustments necessary to present fairly our financial position at March 31, 2015, and the results of our operations and cash flows for the periods presented. We derived the December 31, 2014 condensed consolidated balance sheet data from audited financial statements, but did not include all disclosures required by GAAP. As Quest, Earth911, and YouChange are operating as ecology based green service companies, we did not deem segment reporting necessary.

All intercompany accounts and transactions have been eliminated in consolidation. Certain reclassifications have been made to prior year balances to conform to the current year presentation that did not have an effect on our net loss or net loss per share. Interim results are subject to seasonal variations, and the results of operations for the three months ended March 31, 2015 are not necessarily indicative of the results to be expected for the full year.

Revenue Recognition

Revenue Recognition

We recognize revenue only when all of the following criteria have been met:

· persuasive evidence of an arrangement exists;

· delivery has occurred or services have been rendered;

· the fee for the arrangement is fixed or determinable; and

· collectability is reasonably assured.

Persuasive Evidence of an Arrangement – We document all terms of an arrangement in a service agreement or quote signed or confirmed by the customer prior to recognizing revenue.

Delivery Has Occurred or Services Have Been Performed – We perform all services or deliver all products prior to recognizing revenue. Services are deemed to be performed when the services are complete.

The Fee for the Arrangement is Fixed or Determinable – Prior to recognizing revenue, a customer’s fee is either fixed or determinable under the terms of the quote, service agreement, or accepted customer purchase order.

Collectability Is Reasonably Assured – We assess collectability on a customer by customer basis based on criteria outlined by management.

We provide businesses with management programs to reuse, recycle, and dispose of a wide variety of waste streams and recyclables generated by their business. We utilize third-party subcontractors to execute the collection, transport, and recycling or disposal of used motor oil, oil filters, scrap tires, cooking oil, and expired food products. We evaluate the criteria outlined in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Subtopic 605-45, Revenue Recognition—Principal Agent Considerations, in determining whether it is appropriate to record the gross amount of service revenue and related costs or the net amount earned as management fees. Generally, when we are primarily obligated in a transaction, have latitude in establishing prices and selecting suppliers, have credit risk, or have several but not all of these indicators, we record revenue gross and record amounts collected from customers for sales tax on a net basis. In situations in which we are not primarily obligated, we do not have credit risk, or we determine amounts earned using fixed percentage or fixed payment schedules, we record the net amounts as management fees earned. Currently, we have no contracts accounted for as management fees.

Earth911 revenue primarily represents licensing fees that we recognize ratably over the term of the license. We derive some revenue from advertising contracts, which we recognize ratably over the term that the advertisement appears on our website.

Net Loss Per Share

Net Loss Per Share

We compute basic net loss per share by dividing net loss applicable to common stockholders by the weighted average number of shares of common stock outstanding during the period. We have other potentially dilutive securities outstanding that are not shown in a diluted net loss per share calculation because their effect in both 2015 and 2014 would be anti-dilutive. These potentially dilutive securities include options, restricted stock units, warrants, and convertible promissory notes, and totaled 16,832,380 and 15,096,948 shares at March 31, 2015 and 2014, respectively.

The following table sets forth the computation of basic and diluted loss per share:

	Three Months Ended March 31,
	2015			2014
	(Unaudited)			(Unaudited)
Net loss applicable to common stockholders - numerator for    basic and diluted earnings per share	$	(1,519,040	)	$	(1,488,423	)
Weighted average common shares outstanding -    denominator for basic and diluted earnings per share		111,617,626			95,821,525
Net loss per share:
Basic and diluted	$	(0.01	)	$	(0.02	)

The following table sets forth the anti-dilutive securities excluded from diluted loss per share:

	March 31,
	2015		2014
	(Unaudited)		(Unaudited)
Anti-dilutive securities excluded from diluted loss per share:
Stock options		4,965,280		4,096,948
Restricted stock units		76,100		—
Warrants		11,791,000		—
Convertible notes		—		11,000,000
		16,832,380		15,096,948

Inventories

Inventories

We record inventories within “Prepaid expenses and other current assets” within our condensed consolidated balance sheets.  As of March 31, 2015 and December 31, 2014, all inventories were finished goods with a balance of $41,544 and $30,759, respectively, and consisted of waste disposal equipment, with no reserve for inventory obsolescence at either date.

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Income Statement [Abstract]
Revenue	$ 40,008,609	$ 38,160,050
Cost of revenue	36,722,933	34,827,635
Gross profit	3,285,676	3,332,415
Operating expenses:
Selling, general, and administrative	3,776,982	2,993,708
Depreciation and amortization	979,137	951,663
Total operating expenses	4,756,119	3,945,371
Operating loss	(1,470,443)	(612,956)
Other expense:
Interest expense	(48,597)	(875,467)
Total other expense	(48,597)	(875,467)
Loss before taxes	(1,519,040)	(1,488,423)
Net loss	(1,519,040)	(1,488,423)
Net loss applicable to common stockholders	$ (1,519,040)	$ (1,488,423)
Net loss per share
Basic and diluted	$ (0.01)	$ (0.02)
Weighted average number of common shares outstanding
Basic and diluted	111,617,626	95,821,525

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Capital Lease Obligations

3 Months Ended

Mar. 31, 2015

Debt Disclosure [Abstract]

Capital Lease Obligations

6. Capital Lease Obligations

At March 31, 2015 and December 31, 2014, total capital lease obligations outstanding consisted of the following:

	March 31,			December 31,
	2015			2014
	(Unaudited)
Capital lease obligations, imputed interest at 4.75%, with monthly payments of $1,507, through November 2016, secured by computer equipment	$	41,614		$	47,250
Total		41,614			47,250
Less: current maturities		(23,171	)		(22,853	)
Long-term portion	$	18,443		$	24,397

Our capital lease obligations are included within “Deferred revenue and other current liabilities” and “other long-term liabilities” in our condensed consolidated balance sheets.  The amount of interest expense related to our capital leases for the three months ended March 31, 2015 and 2014 was $487 and $638, respectively.

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Line of Credit

3 Months Ended

Mar. 31, 2015

Debt Disclosure [Abstract]

Line of Credit

5. Line of Credit

On December 15, 2010, Quest entered into a Revolving Credit Note and Loan Agreement with Regions Bank (“Regions”), a national banking association. This agreement, as amended, provides Quest with a loan facility up to $10,000,000 for working capital with advances generally limited to 80% of eligible accounts receivable from Quest’s largest customer and 85% of all other eligible accounts receivable. The interest on the outstanding principal amount accrues daily and is payable monthly based on a fluctuating interest rate per annum, which is the base rate plus 1.50% (2.67% as of March 31, 2015). The base rate for any day is the greater of (a) the federal funds rate plus one-half of 1%, (b) Region’s published effective prime rate, or (c) the Eurodollar rate for such day based on an interest period of one month. To secure the amounts due under the agreement, Quest granted Regions a security interest in all of its assets. Quest had $5,250,000 outstanding and $4,750,000 available to be borrowed as of March 31, 2015. The amount of interest expense related to the Regions line of credit for the three months ended March 31, 2015 and 2014 was $35,050 and $43,080, respectively.

On May 9, 2014, Quest entered into a Sixth Amendment to Loan Agreement with Regions. The loan agreement was amended to, among other things, (i) add a $5.0 million accordion feature, (ii) increase the borrowing base, (iii) reduce the applicable margin for eurodollar rate loans by 1.0% per annum, (iv) add an unused fee of 0.25% per annum, (v) extend the maturity date to May 31, 2015, (vi) release the guaranty of our Chief Executive Officer previously executed in favor of Regions, (vii) add our company and our wholly owned subsidiary, Earth911, as guarantors, (viii) allow for permitted acquisitions, and (ix) delete two of the financial covenants and modify the other financial covenants in certain respects.  As of March 31, 2015, we were in compliance with the financial covenants.

In connection with the Sixth Amendment, on May 9, 2014, QRHC and Earth911(collectively, the “Guarantors”) entered into a Guaranty (the “Guaranty”) for the benefit of Regions to guarantee the obligations of Quest under the loan agreement and other loan documents. In addition, on May 9, 2014, Earth911 entered into a Pledge Agreement with Regions, pursuant to which Earth911 pledged to Regions 50% of the membership interests in Quest held by Earth911 to secure the prompt and complete payment and performance of the obligations of Quest and the Guarantors under the loan agreement and other loan documents.

On May 13, 2015, Quest and Regions made amendments to the loan agreement as discussed in Note 11 — Material Subsequent Events.

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Stockholders' Equity (Tables)

3 Months Ended

Mar. 31, 2015

Equity [Abstract]

Schedule of Common Stock Shares Issued

During the three months ended March 31, 2015, we issued shares of common stock as follows:

	Common Stock
	Shares		Amount
Shares issued for vested restricted stock units		56,500	$	57
		56,500	$	57

During the three months ended March 31, 2014, we issued shares of common stock as follows:

	Common Stock
	Shares		Amount
Shares issued upon conversion of note		23,201	$	29,001
		23,201	$	29,001

Summary Of Warrant Activity

The following table summarizes the warrants issued and outstanding as of March 31, 2015:

Warrants Issued and Outstanding as of March 31, 2015
	Date of		Exercise		Shares of
Description	Issuance	Expiration	Price		Common Stock
Exercisable warrants
Warrants	04/18/2014	04/01/2017	$	2.00		1,441,000
Warrant	05/07/2014	05/07/2017	$	2.65		100,000
Warrant	05/28/2014	10/31/2016	$	4.31		450,000
Warrants	09/24/2014	09/24/2019	$	2.50		9,000,000
Warrants	10/20/2014	10/20/2019	$	2.50		700,000
Total exercisable warrants						11,691,000
Contingent warrants
Warrant	05/07/2014	05/07/2017	$	2.65		100,000
Warrants	05/28/2014	10/31/2018	$	4.31		1,200,000
Less warrants cancelled						(1,200,000	)
Total contingent warrants						100,000
Total warrants issued and outstanding						11,791,000

Summary of Stock Option Activity

Stock Options – The following table summarizes the stock option activity for the three month period ended March 31, 2015:

	Stock Options
					Weighted-
				Exercise	Average
	Number			Price Per	Exercise Price
	of Shares			Share	Per Share
Outstanding at December 31, 2014		5,006,532		1.45 — 3.75		2.66
Granted		45,000		1.28 — 1.46		1.30
Canceled/Forfeited		(86,252	)	2.05 — 2.10		2.05
Outstanding at March 31, 2015		4,965,280		1.28 — 3.75		2.65

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Summary of Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2015

Accounting Policies [Abstract]

Schedule of Computation of Basic and Diluted Earnings Per Share

The following table sets forth the computation of basic and diluted loss per share:

	Three Months Ended March 31,
	2015			2014
	(Unaudited)			(Unaudited)
Net loss applicable to common stockholders - numerator for    basic and diluted earnings per share	$	(1,519,040	)	$	(1,488,423	)
Weighted average common shares outstanding -    denominator for basic and diluted earnings per share		111,617,626			95,821,525
Net loss per share:
Basic and diluted	$	(0.01	)	$	(0.02	)

Schedule of Anti-dilutive Securities Excluded from Diluted Loss Per Share

The following table sets forth the anti-dilutive securities excluded from diluted loss per share:

	March 31,
	2015		2014
	(Unaudited)		(Unaudited)
Anti-dilutive securities excluded from diluted loss per share:
Stock options		4,965,280		4,096,948
Restricted stock units		76,100		—
Warrants		11,791,000		—
Convertible notes		—		11,000,000
		16,832,380		15,096,948

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Stockholders' Equity

3 Months Ended

Mar. 31, 2015

Equity [Abstract]

Stockholders' Equity

9. Stockholders’ Equity

Preferred Stock – Our authorized preferred stock includes 10,000,000 shares of preferred stock with a par value of $0.001, of which no shares have been issued or are outstanding.

Common Stock – Our authorized common stock includes 200,000,000 shares of common stock with a par value of $0.001, of which 111,657,804 and 111,601,304 shares were issued and outstanding as of March 31, 2015 and December 31, 2014, respectively.

During the three months ended March 31, 2015, we issued shares of common stock as follows:

	Common Stock
	Shares		Amount
Shares issued for vested restricted stock units		56,500	$	57
		56,500	$	57

· Shares issued for vested restricted stock units –

o On March 5, 2015, we issued 56,500 shares to an employee for the restricted stock units that vested and were expensed during fiscal year 2014.  

During the three months ended March 31, 2014, we issued shares of common stock as follows:

	Common Stock
	Shares		Amount
Shares issued upon conversion of note		23,201	$	29,001
		23,201	$	29,001

· Shares issued upon conversion of note –

o During September 2012, we issued a convertible note payable to an unrelated party.  During the three months ended March 31, 2014, $25,000 of principal and $4,001 of interest were converted into 23,201 shares of our common stock.

Warrants – During the three months ended March 31, 2015 and 2014, we did not issue any warrants and no holders exercised warrants.  During the three months ended March 31, 2015, a third party forfeited 1,200,000 contingent warrants, with no corresponding expirations during the three months ended March 31, 2014.  At March 31, 2015, we had outstanding exercisable warrants to purchase 11,691,000 shares of common stock and contingent warrants to purchase 100,000 shares of common stock.

· Warrants for services –

o On May 7, 2014, we issued to a third party for services rendered an aggregate of 200,000 warrants to purchase 200,000 shares of our common stock at $2.65 per share. Of the 200,000 warrants, 100,000 were exercisable immediately and the remaining become exercisable one year from the date of grant based on the achievement of performance conditions. Due to the decline in the fair value of these warrants, we recorded a reduction of stock-based compensation expense of $5,936 for the three months ended March 31, 2015 related to these warrants. See Note 8 for a discussion of our Black-Scholes-Merton valuation assumptions.  

o On May 28, 2014, we issued to a third party for services rendered an aggregate of 1,650,000 contingent warrants to purchase 1,650,000 shares of our common stock at $4.31 per share. The warrants become exercisable at various times after achieving future performance conditions related to services and revenue targets for Earth911. During the three months ended March 31, 2015, we terminated the contract with the third party, resulting in the forfeiture of 1,200,000 unvested warrants.  Due to the uncertainty of attaining any of the performance conditions, we had not recognized any additional expense for the non-vested warrants.  As these warrants related to internally developed software, we did not capitalize any costs or recognize any expense for the three months ended March 31, 2015.

The following table summarizes the warrants issued and outstanding as of March 31, 2015:

Warrants Issued and Outstanding as of March 31, 2015
	Date of		Exercise		Shares of
Description	Issuance	Expiration	Price		Common Stock
Exercisable warrants
Warrants	04/18/2014	04/01/2017	$	2.00		1,441,000
Warrant	05/07/2014	05/07/2017	$	2.65		100,000
Warrant	05/28/2014	10/31/2016	$	4.31		450,000
Warrants	09/24/2014	09/24/2019	$	2.50		9,000,000
Warrants	10/20/2014	10/20/2019	$	2.50		700,000
Total exercisable warrants						11,691,000
Contingent warrants
Warrant	05/07/2014	05/07/2017	$	2.65		100,000
Warrants	05/28/2014	10/31/2018	$	4.31		1,200,000
Less warrants cancelled						(1,200,000	)
Total contingent warrants						100,000
Total warrants issued and outstanding						11,791,000

Restricted Stock Units – During April 2014, we granted restricted stock units representing 132,600 shares of common stock under our 2012 Incentive Compensation Plan. The restricted stock units vest based on a combination of financial performance factors and continued service. The financial performance factors are based on the revenue generated by new business activity of one of our subsidiaries. All payouts of restricted stock units that vest will be exercisable immediately and will be paid in the form of common stock. While we do not anticipate issuing dividends, the restricted stock unit awards will not participate in any dividends prior to vesting.

We determined the fair value of the restricted stock unit awards granted based on the market value of our common stock on the date of grant, which was $3.75 per share. We assumed a forfeiture rate of 0%. Due to the uncertainty of attaining any of the remaining performance conditions, we recorded no additional stock-based compensation expense for the remaining performance conditions for the three months ended March 31, 2015. We issued 56,500 shares during the three months ended March 31, 2015 for the restricted stock units that vested during 2014.  As of March 31, 2015 and December 31, 2014, outstanding restricted stock units totaled 76,100 and 132,600, respectively.  

Employee Stock Purchase Plan – On September 17, 2014, our stockholders approved the Quest Resource Holding Corporation 2014 Employee Stock Purchase Plan (the “ESPP”). We recorded expense of $9,726 related to the ESPP during the three months ended March 31, 2015.

Stock Options – The following table summarizes the stock option activity for the three month period ended March 31, 2015:

	Stock Options
					Weighted-
				Exercise	Average
	Number			Price Per	Exercise Price
	of Shares			Share	Per Share
Outstanding at December 31, 2014		5,006,532		1.45 — 3.75		2.66
Granted		45,000		1.28 — 1.46		1.30
Canceled/Forfeited		(86,252	)	2.05 — 2.10		2.05
Outstanding at March 31, 2015		4,965,280		1.28 — 3.75		2.65

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Income Taxes

3 Months Ended

Mar. 31, 2015

Income Tax Disclosure [Abstract]

Income Taxes

7. Income Taxes

We compute income taxes using the asset and liability method in accordance with FASB ASC Topic 740, Income Taxes. Under the asset and liability method, we determine deferred income tax assets and liabilities based on the differences between the financial reporting and tax bases of assets and liabilities and measure them using currently enacted tax rates and laws. We provide a valuation allowance for the amount of deferred tax assets that, based on available evidence, are more likely than not expected to be realized. In our opinion, realization of our net operating loss carryforward was not reasonably assured as of March 31, 2015 and December 31, 2014, and we have recorded a valuation allowance of $9,713,000 and $9,108,000, respectively, against deferred tax assets in excess of deferred tax liabilities in the accompanying condensed consolidated financial statements. As of March 31, 2015 and December 31, 2014, we had federal income tax net operating loss carryforwards of approximately $16,000,000 and $14,800,000, respectively, which expire at various dates beginning in 2031.

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Fair Value of Financial Instruments

3 Months Ended

Mar. 31, 2015

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

8. Fair Value of Financial Instruments

Our financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities, line of credit, capital lease obligations, and warrant liability. We do not believe that we are exposed to significant interest, currency, or credit risks arising from these financial instruments. With the exception of the warrant liability, the fair values of these financial instruments approximate their carrying values using Level 3 inputs, based on their short maturities or, for long-term portions of capital lease obligations, based on borrowing rates currently available to us for loans with similar terms and maturities.

On May 7, 2014, we issued an aggregate of 200,000 warrants to purchase shares of our common stock to a consultant in exchange for services rendered during 2014.  Of these warrants, 100,000 vested immediately, and resulted in no expense recorded for the three months ended March 31, 2015.  The remaining 100,000 warrants, which we classified as a liability, vested on May 7, 2015, subject to performance conditions.  We measured the warrants at fair value by applying the Black-Scholes-Merton valuation model, which utilizes Level 3 inputs. As of March 31, 2015, the assumptions used in the Black-Scholes-Merton valuation for the 100,000 warrants that vested on May 7, 2015 were as follows: volatility of 81.1%; risk free interest rate of 0.59%; expected term of 2.1 years; and expected dividend yield of 0%. The grant date fair value of the warrant valuation described above was $0.32 per warrant. We based the risk free interest rate on U.S. Treasury rates with maturity dates approximating the expected term of the warrants. We determined the historical volatility using the historical changes in the market price of our common stock and applicable comparable companies.  We report the warrant liability in “Accounts payable and accrued liabilities” within our balance sheets.  Our warrant liability was $28,921 and $34,857 at March 31, 2015 and December 31, 2014, respectively.

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Related Party Transactions

3 Months Ended

Mar. 31, 2015

Related Party Transactions [Abstract]

Related Party Transactions

10. Related Party Transactions

Acquisition of the Quest Interests – On July 16, 2013, we acquired all of the Quest Interests held by Quest Resource Group LLC, or QRG, comprising 50% of the membership interests of Quest Resource Management Group, LLC, or Quest. The purchase price for the Quest Interests consisted of 22,000,000 shares of our common stock issued at a fair market value of $2.50 per share based on the closing price of the stock on the date of the transaction and convertible secured promissory notes (collectively, the “Sellers’ Notes”) in the aggregate principal amount of $22,000,000. The total purchase price of $77,000,000 was paid to the owners of QRG who at the time of the transaction were related parties: the Chief Executive Officer of Quest and the former President of Quest. After the close of the transaction, the Chief Executive Officer of Quest became the President, Chief Executive Officer, and member of the Board of Directors of our company. On September 24, 2014, we paid $11,000,000 to the holders of the Sellers’ Notes and such holders converted the remaining $11,000,000 of principal, plus accrued interest through September 24, 2014 of $101,260, into 5,550,630 shares of our common stock. For the three months ended March 31, 2014, we recognized interest expense of $379,726, with no comparable interest expense for the three months ended March 31, 2015.

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Line of Credit - Additional Information (Detail) (USD $)	3 Months Ended		0 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	May 09, 2014	Dec. 31, 2014
Line of Credit Facility [Line Items]
Outstanding principal amount on line of credit facility	$ 5,250,000			$ 5,250,000
Interest expense related to line of credit facility	48,597	875,467
Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Line of credit facility agreement date	Dec. 15, 2010
Working capital from loan agreement with Regions Bank	10,000,000
Interest on outstanding principal amount	2.67%
Outstanding principal amount on line of credit facility	5,250,000
Amount available to be borrow under line of credit facility	4,750,000
Interest rate line of credit facility description	The base rate for any day is the greater of (a) the federal funds rate plus one-half of 1%, (b) Region’s published effective prime rate, or (c) the Eurodollar rate for such day based on an interest period of one month.
Interest expense related to line of credit facility	35,050	43,080
Revolving Credit Facility [Member] | Sixth Amendment to Loan Agreement with Regions Bank [Member]
Line of Credit Facility [Line Items]
Line of credit, accordion feature	$ 5,000,000
Unused fee percentage	0.25%
Maturity date of loan agreement with Regions Bank	May 31, 2015
Terms of loan agreement	The loan agreement was amended to, among other things, (i) add a $5.0 million accordion feature, (ii) increase the borrowing base, (iii) reduce the applicable margin for eurodollar rate loans by 1.0% per annum, (iv) add an unused fee of 0.25% per annum, (v) extend the maturity date to May 31, 2015, (vi) release the guaranty of our Chief Executive Officer previously executed in favor of Regions, (vii) add our company and our wholly owned subsidiary, Earth911, as guarantors, (viii) allow for permitted acquisitions, and (ix) delete two of the financial covenants and modify the other financial covenants in certain respects. As of March 31, 2015, we were in compliance with the financial covenants.
Percentage of membership interest pledged to guarantee loan obligation			50.00%
Revolving Credit Facility [Member] | Base Rate [Member]
Line of Credit Facility [Line Items]
Fluctuating interest rate based on base rate	1.50%
Revolving Credit Facility [Member] | Eurodollar [Member] | Sixth Amendment to Loan Agreement with Regions Bank [Member]
Line of Credit Facility [Line Items]
Decrease in applicable margin rate of loans during the period	1.00%
Revolving Credit Facility [Member] | Eligible Accounts Receivable [Member] | Largest Customer [Member]
Line of Credit Facility [Line Items]
Percentage of accounts receivable form Quest's customers	80.00%
Revolving Credit Facility [Member] | Eligible Accounts Receivable [Member] | Other Customer [Member]
Line of Credit Facility [Line Items]
Percentage of accounts receivable form Quest's customers	85.00%

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Goodwill and Other Intangible Assets (Tables)

3 Months Ended

Mar. 31, 2015

Goodwill And Intangible Assets Disclosure [Abstract]

Schedule of Finite-Lived Intangible Assets

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

March 31, 2015 (Unaudited)	Estimated Useful Life	Gross Carrying Amount		Accumulated Amortization		Net
Finite lived intangible assets:
Customer relationships	5 years	$	12,720,000	$	4,346,000	$	8,374,000
Trademarks	7 years		6,230,000		1,520,417		4,709,583
Patents	7 years		230,683		230,683		—
Software	7 years		1,164,551		55,132		1,109,419
Customer lists	5 years		307,153		136,792		170,361
Total finite lived intangible assets		$	20,652,387	$	6,289,024	$	14,363,363

December 31, 2014	Estimated Useful Life	Gross Carrying Amount		Accumulated Amortization		Net
Finite lived intangible assets:
Customer relationships	5 years	$	12,720,000	$	3,710,000	$	9,010,000
Trademarks	7 years		6,230,000		1,297,917		4,932,083
Patents	7 years		230,683		230,683		—
Software	7 years		1,013,714		25,899		987,815
Customer lists	5 years		307,153		121,434		185,719
Total finite lived intangible assets		$	20,501,550	$	5,385,933	$	15,115,617

Schedule of Indefinite-Lived Intangible Assets

March 31, 2015 (Unaudited) and December 31, 2014	Estimated Useful Life	Carrying Amount
Indefinite lived intangible asset:
Goodwill	Indefinite	$	58,337,290

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Summary of Significant Accounting Policies - Schedule of Computation of Basic and Diluted Earnings Per Share (Detail) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Accounting Policies [Abstract]
Net loss applicable to common stockholders - numerator for basic and diluted earnings per share	$ (1,519,040)	$ (1,488,423)
Weighted - average common shares outstanding -denominator for basic and diluted earnings per share	111,617,626	95,821,525
Basic and diluted	$ (0.01)	$ (0.02)

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Related Party Transactions - Additional Information (Detail) (USD $)	3 Months Ended		0 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Sep. 24, 2014	Jul. 16, 2013
Related Party Transaction [Line Items]
Interest expense on seller notes	$ 48,597	$ 875,467
Chief Executive Officer of Quest and Former President of Quest [Member] | Sellers Notes [Member]
Related Party Transaction [Line Items]
Repayment of debt			11,000,000
Repaid of sellers notes using proceeds			11,000,000
Interest expense on seller notes			101,260
Number of shares converted in to common stock			5,550,630
Interest expenses	0	379,726
Chief Executive Officer of Quest and Former President of Quest [Member] | Quest Resource Management Group, LLC [Member]
Related Party Transaction [Line Items]
Notes accrue interest payable beginning				Jul. 16, 2013
Percentage of remaining ownership interest acquired				50.00%
Business acquisition shares issued				22,000,000
Sellers Notes in the principal amount				22,000,000
Business acquisition, share price				$ 2.50
Business acquisition , consideration paid				$ 77,000,000

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Stockholders' Equity - Schedule of Common Stock Shares Issued (Detail) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Equity [Abstract]
Shares issued for vested restricted stock units, Shares	56,500
Shares issued for vested restricted stock units, Value	$ 57
Shares issued upon conversion of note, Shares		23,201
Shares issued upon conversion of note, Amount		$ 29,001

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CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED) (USD $)	Total	Common Stock [Member]	Additional Paid-in Capital [Member]	Accumulated Deficit[Member]
Beginning Balance at Dec. 31, 2014	$ 75,477,513	$ 111,601	$ 150,789,292	$ (75,423,380)
Beginning Balance, Shares at Dec. 31, 2014		11,601,304
Stock-based compensation	291,092		291,092
Shares issued for vested restricted stock units, Value	57	57	(57)
Shares issued for vested restricted stock units, Shares	56,500	56,500
Net loss	(1,519,040)			(1,519,040)
Ending Balance at Mar. 31, 2015	$ 74,249,565	$ 111,658	$ 151,080,327	$ (76,942,420)
Ending Balance, Shares at Mar. 31, 2015		11,657,804

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Goodwill and Other Intangible Assets

3 Months Ended

Mar. 31, 2015

Goodwill And Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

4. Goodwill and Other Intangible Assets

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

March 31, 2015 (Unaudited)	Estimated Useful Life	Gross Carrying Amount		Accumulated Amortization		Net
Finite lived intangible assets:
Customer relationships	5 years	$	12,720,000	$	4,346,000	$	8,374,000
Trademarks	7 years		6,230,000		1,520,417		4,709,583
Patents	7 years		230,683		230,683		—
Software	7 years		1,164,551		55,132		1,109,419
Customer lists	5 years		307,153		136,792		170,361
Total finite lived intangible assets		$	20,652,387	$	6,289,024	$	14,363,363

December 31, 2014	Estimated Useful Life	Gross Carrying Amount		Accumulated Amortization		Net
Finite lived intangible assets:
Customer relationships	5 years	$	12,720,000	$	3,710,000	$	9,010,000
Trademarks	7 years		6,230,000		1,297,917		4,932,083
Patents	7 years		230,683		230,683		—
Software	7 years		1,013,714		25,899		987,815
Customer lists	5 years		307,153		121,434		185,719
Total finite lived intangible assets		$	20,501,550	$	5,385,933	$	15,115,617

March 31, 2015 (Unaudited) and December 31, 2014	Estimated Useful Life	Carrying Amount
Indefinite lived intangible asset:
Goodwill	Indefinite	$	58,337,290

We compute amortization using the straight-line method over the estimated useful lives of the finite lived intangible assets. The amortization expense related to finite lived intangible assets was $903,091 and $882,096 for the three months ended March 31, 2015 and 2014, respectively. We have no indefinite-lived intangible assets other than goodwill. The goodwill is not deductible for tax purposes.

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Summary of Significant Accounting Policies - Schedule of Anti-dilutive Securities Excluded from Diluted Loss Per Share (Detail)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Anti-dilutive securities excluded from diluted earnings per share	16,832,380	15,096,948
Stock options [Member]
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Anti-dilutive securities excluded from diluted earnings per share	4,965,280	4,096,948
Restricted Stock Units [Member]
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Anti-dilutive securities excluded from diluted earnings per share	76,100
Stock Warrants
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Anti-dilutive securities excluded from diluted earnings per share	11,791,000
Convertible Senior Notes
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Anti-dilutive securities excluded from diluted earnings per share		11,000,000

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Income Taxes - Additional Information (Detail) (USD $)	3 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Income Tax Disclosure [Abstract]
Valuation allowance	$ 9,713,000	$ 9,108,000
Federal income tax net operating loss carry forward	$ 16,000,000	$ 14,800,000
Net Operating Loss Carry Forwards Expiration Dates	various dates beginning in 2031

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Property and Equipment, Net, and Other Assets (Tables)

3 Months Ended

Mar. 31, 2015

Property Plant And Equipment [Abstract]

Components Property and Equipment, net, and other assets

At March 31, 2015 and December 31, 2014, property and equipment, net, and other assets consisted of the following:

	March 31,		December 31,
	2015		2014
	(Unaudited)
Property and equipment, net of accumulated depreciation of $1,768,881      and $1,692,835 as of March 31, 2015 and December 31, 2014,      respectively	$	627,935	$	533,837
Security deposits and other assets		232,333		219,656
Property and equipment, net, and other assets	$	860,268	$	753,493