CONCENTRATIONS, SIGNIFICANT CUSTOMERS, COMMITMENTS AND CONTINGENCIES

At March 31, 2014 and 2013 and for each of the three months then ended, the Company’s revenues and receivables were comprised of the following customer concentrations:



	2014		2013
	% of Revenues	% of Receivables	% of Revenues	% of Receivables
Customer 1	42%	32%	—%	—%
Customer 2	21%	17%	59%	64%
Customer 3	15%	9%	3%	—%
Customer 4	—%	—%	8%	13%

The Company purchases goods and services from one company that represented 10% of total purchases for the three months ended March 31, 2014 and two companies that represented 13% and 10% each for the three months ended March 31, 2013.

The Company has had various debt facilities available for use, of which there was $9,055,283 and $8,515,698 outstanding as of March 31, 2014 and December 31, 2013, respectively. See Note 3 for further details.

In February 2013, Bank of America agreed to lease the Company up to $1,025,000 of equipment to enhance the Thermal Chemical Extraction Process (TCEP) operation, which went into effect in April 2013. Under the current terms of the lease agreement, there are 60 monthly payments of approximately $13,328.

The Company’s revenue, profitability and future rate of growth are substantially dependent on prevailing prices for petroleum-based products. Historically, the energy markets have been very volatile, and there can be no assurance that these prices will not be subject to wide fluctuations in the future. A substantial or extended decline in such prices could have a material adverse effect on the Company’s financial position, results of operations, cash flows, and access to capital and on the quantities of petroleum-based products that the Company can economically produce.

The Company, in its normal course of business, is involved in various other claims and legal action. In the opinion of management, the outcome of these claims and actions will not have a material adverse impact upon the financial position of the Company.

We intend to take advantage of any potential tax benefits related to net operating losses (“NOLs”) acquired as part of the Company's April 2009 merger with World Waste Technologies, Inc. ("World Waste"). As a result of the merger, we acquired approximately $42 million of net operating losses that may be used to offset taxable income generated by the Company in future periods.

It is possible that the Company may be unable to use these NOLs in their entirety. The extent to which the Company will be able to utilize these carry-forwards in future periods is subject to limitations based on a number of factors, including the number of shares issued within a three-year look-back period, whether the merger is deemed to be a change in control, whether there is deemed to be a continuity of World Waste’s historical business, and the extent of the Company’s subsequent income. As of December 31, 2013, the Company had utilized approximately $11.25 million of these NOLs leaving approximately $30.75 million of potential NOLs of which we expect to utilize approximately $0.4 million for the three months ended March 31, 2014. The Company recorded a change in valuation allowance for the three months ended March 31, 2014 for approximately $136,000.