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:June 30, 2014

o TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number:  000-30396 

GLYECO, INC.
(Exact name of registrant as specified in its charter)
Nevada	45-4030261
(State or other jurisdiction of incorporation)	(IRS Employer Identification No.)
10429 South 51st Street, Suite 235 Phoenix, Arizona	85044
(Address of principal executive offices)	(Zip Code)
(866) 960-1539
(Registrant's telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)

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 o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 229.405 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 o

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 ct. (Check one):

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

Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

Yes o  No x

As of August 14, 2014, the registrant had 58,190,649 shares of Common Stock, par value $0.0001 per share, issued and outstanding.

TABLE OF CONTENTS
		Page No:
PART I — FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	3
	Condensed Consolidated Balance Sheets – June 30, 2014 and December 31, 2013	3
	Condensed Consolidated Statements of Operations – Three and Six Months Ended June 30, 2014 and 2013	4
	Condensed Consolidated Statement of Stockholders' Equity – Six Months Ended June 30, 2014	5
	Condensed Consolidated Statements of Cash Flows – Six Months Ended June 30, 2014 and 2013	6
	Notes to the Condensed Consolidated Financial Statements	7
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	11
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	20
Item 4.	Controls and Procedures	20
PART II — OTHER INFORMATION:
Item 1.	Legal Proceedings	22
Item 1A.	Risk Factors	22
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	22
Item 3.	Defaults Upon Senior Securities	22
Item 4.	Mine Safety Disclosures	23
Item 5.	Other Information	23
Item 6.	Exhibits	23
Signatures		24

PART I—FINANCIAL INFORMATION

Item 1.  Financial Statements 

GLYECO, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

June 30, 2014 and December 31, 2013

ASSETS
	June 30,			December 31,
	2014			2013
	(unaudited)
Current assets
Cash	$	1,997,682		$	4,393,299
Accounts receivable, net		601,045			898,934
Due from related parties		19,968			34,868
Prepaid expenses		153,910			53,732
Inventories		506,077			268,191
Total current assets		3,278,682			5,649,024
Equipment
Equipment		4,235,521			3,719,344
Leasehold improvements		201,364			7,641
Accumulated depreciation		(521,421	)		(328,803	)
		3,915,464			3,398,182
Construction in process		3,971,315			2,117,001
Total equipment, net		7,886,779			5,515,183
Other assets
Deposits		-			80,708
Goodwill		835,295			779,303
Other intangible assets, net		3,567,276			3,673,190
Total other assets		4,402,571			4,533,201
Total assets	$	15,568,032		$	15,697,408
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued expenses	$	880,972		$	1,271,674
Due to related parties		557,703			582,682
Note payable		6,702			6,504
Capital lease obligation		308,825			285,363
Total current liabilities		1,754,202			2,146,223
Non-current liabilities
Note payable		121,476			9,877
Capital lease obligation		1,048,783			1,189,574
Total non-current liabilities		1,170,259			1,199,451
Total liabilities		2,924,461			3,345,674
Redeemable Series AA convertible preferred stock, 2,342,740 shares issued and outstanding		-			1,171,375
Stockholders' equity
Preferred stock; $0.0001 par value; 10,000,000 shares authorized  and zero shares issued and outstanding as of June 30, 2014  and 2,342,740 Series AA (above) as of December 31, 2013		-			-
Common stock, $.0001 par value; 51,992,009 and 48,834,916  shares issued and outstanding as of June 30, 2014 and December 31, 2013 respectively		5,192			4,884
Additional paid in capital		30,551,893			24,541,809
Accumulated deficit		(17,913,514	)		(13,366,334	)
Total stockholders' equity		12,643,571			11,180,359
Total liabilities and stockholders' equity	$	15,568,032		$	15,697,408

See accompanying notes to the condensed consolidated financial statements.

3

GLYECO, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

For the three and six months ended June 30, 2014 and 2013

	Three months ended June 30						Six months ended June 30,
	2014			2013			2014			2013
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
Sales, net	$	1,606,990		$	1,417,473		$	3,260,031		$	2,650,140
Cost of goods sold		1,629,257			941,864			3,290,680			2,107,446
Gross profit		(22,267	)		475,609			(30,649	)		542,694
Operating expenses
Consulting fees		144,744			189,973			285,910			348,715
Stock-based compensation		238,758			-			711,532			-
Salaries and wages		243,579			191,040			515,154			348,557
Legal and professional		199,388			58,601			236,301			122,176
General and administrative		214,929			188,590			430,683			296,767
Total operating expenses		1,041,398			628,204			2,179,580			1,116,215
Loss from operations		(1,063,665	)		(152,595	)		(2,210,229	)		(573,521	)
Other (income) and expenses
Interest income		(66	)		(429	)		(644	)		(957	)
Interest expense		45,466			47,269			90,443			105,799
Total other income and expenses		45,400			46,840			89,799			104,842
Loss before provision for income taxes		(1,109,065	)		(199,435	)		(2,300,028	)		(678,363	)
Provision for income taxes		2,476			-			3,742			-
Net loss	$	(1,111,541	)	$	(199,435	)	$	(2,303,770	)	$	(678,363	)
Premium on Series AA Preferred conversion to common shares		-			-			2,243,410			-
Net loss available to common shareholders	$	(1,111,541	)	$	(199,435	)	$	(4,547,180	)		(678,363	)
Basic and diluted loss per share	$	(0.02	)	$	(0.01	)	$	(0.09	)		(0.02	)
Weighted average number of common shares outstanding (basic and diluted)		51,906,725			39,481,793			50,707,479			40,564,341

See accompanying notes to the condensed consolidated financial statements.

4

GLYECO, INC. AND SUBSIDIARIES

Unaudited Condensed Consolidated Statements of Stockholders’ Equity

For the six months ended June 30, 2014

					Additional
	Common Stock				Paid -In		Accumulated			Stockholders'
	Shares		Par Value		Capital		Deficit			Equity
Balance, December 31, 2013		48,834,916	$	4,884	$	24,541,809	$	(13,366,334	)	$	11,180,359
Common shares for acquisition		204,750		20		210,873					210,893
Common shares for note conversion		2,605,513		261		3,414,524					3,414,785
Warrants and options exercised		72,141		7		1,673,175					1,673,182
Share-based compensation		204,689		20		711,512					711,532
Premium on Series AA Preferred conversion to common shares								(2,243,410	)		(2,243,410	)
Net loss								(2,303,770	)		(2,303,770	)
Balance, June 30, 2014		51,922,009	$	5,192	$	30,551,893	$	(17,913,514	)	$	12,643,571

See accompanying notes to the condensed consolidated financial statements.

5

GLYECO, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

For the six months ended June 30, 2014 and 2013

	Six months ended June 30,
	2014			2013
	(unaudited)			(unaudited)
Net cash flow from operating activities
Net loss	$	(2,303,770	)	$	(678,363	)
Adjustments to reconcile net loss to net cash used by operating activities
Depreciation and amortization		298,532			119,139
Stock-based compensation expense		711,532			17,586
Stock issued for conversion of accrued interest		-			24,913
Stock issued for lease payment		-			80,000
(Increase) decrease in assets:
Accounts receivable		297,889			(1,386,927	)
Due from related party		14,900			-
Prepaid expenses		(100,178	)		(75,639	)
Inventories		(237,886	)		(376,895	)
Deposits		80,708			-
Increase (decrease) in liabilities:
Accounts payable and accrued expenses		(390,702	)		252,729
Due to related party		(24,979	)		900,797
Net cash used in operating activities		(1,653,954	)		(1,122,660	)
Cash flows from investing activities
Purchase of equipment		(554,999	)		(448,598	)
Construction in process		(1,854,314	)		-
Net cash used in investing activities		(2,409,313	)		(448,598	)
Cash flows from financing activities
Borrowing / (repayment) of debt		111,797			(509	)
Repayment of capital lease		(117,329	)		(40,866	)
Proceeds from sale of common stock		-			1,737,826
Stock issuance costs		-			(77,537	)
Proceeds from warrant exercise		1,673,182			-
Net cash provided by financing activities		1,667,650			1,618,914
Increase (decrease) in cash		(2,395,617	)		47,656
Cash at the beginning of the period		4,393,299			1,153,941
Cash at end of the period	$	1,997,682		$	1,201,597
Supplemental disclosure of cash flow information
Interest paid during period	$	90,443		$	-
Taxes paid during period	$	-		$	-
Supplemental disclosure of non-cash items
Premium on Series AA Preferred conversion to common shares		2,243,410
Common stock issued for acquisition		210,893			188,686
Common stock issued for property, plant and equipment					40,000
Common stock issued for capital lease, principal and interest					65,800
Common stock issued for convertible note, principal and interest					470,000
Series AA Preferred Stock issued for convertible note, principal and interest					1,171,375
Equipment purchased with capital lease					1,714,974
Equipment purchased with debt					20,000

See accompanying notes to the condensed consolidated financial statements.

6

GLYECO, INC. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

NOTE 1 – Organization and Nature of Business

GlyEco, Inc. (the "Company", “we”, or “our”) is a green chemistry company that collects and recycles waste glycol into a reusable product that is sold to third party customers in the automotive and industrial end-markets. Our proprietary technology, GlyEco TechnologyTM, allows us to recycle all five major types of waste glycol into a virgin-quality product usable in any glycol application.  We are dedicated to conserving natural resources, limiting liability for waste generators, safeguarding the environment, and creating valuable green products.  We currently operate seven processing centers in the United States with our principal offices located in Phoenix, Arizona. Our processing centers are located in (1) Minneapolis, Minnesota, (2) Indianapolis, Indiana, (3) Lakeland, Florida, (4) Elizabeth, New Jersey, (5) Rock Hill, South Carolina, (6) Tea, South Dakota, and (7) Landover, Maryland.

Currently, the Company is actively acquiring operating entities involved in the recycling of waste ethylene glycol and is consolidating and streamlining their operations.

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

Basis of Presentation

The condensed consolidated financial statements included herein have been prepared by us without audit, pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”) and should be read in conjunction with the audited financial statements for the year ended December 31, 2013. 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 consolidated financial statements reflect, in the opinion of management, all normal recurring adjustments necessary to present fairly our financial position at June 30, 2014, and the results of our operations and cash flows for the periods presented. We derived the December 31, 2013 condensed consolidated balance sheet data from audited financial statements, but do not include all disclosures required by GAAP.  Interim results are subject to seasonal variations and the results of operations for the three and six months ended June 30, 2014 and 2013, are not necessarily indicative of the results to be expected for the full year.

Going Concern

The condensed consolidated financial statements as of and for the three and six months ended June 30, 2014, and December 31, 2013 have been prepared assuming that the Company will continue as a going concern.  As of June 30, 2014, the Company has yet to achieve profitable operations and is dependent on its ability to raise capital from stockholders or other sources to sustain operations and to ultimately achieve viable operations. The condensed consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.

The Company’s plans to address these matters include, raising additional financing through offering its shares of capital stock in private and/or public offerings of its securities and through debt financing if available and needed. The Company plans to become profitable by upgrading the capacity and capabilities at its existing operating facilities, continuing to implement its patent-pending technology in international markets, and acquiring profitable glycol recycling companies, which are looking to take advantage of the Company’s public company status and improve their profitability through a combined synergy. The Company expects gross margins to increase as the costs associated with integration continue to decline and sales of our T1 material reached plan levels.

NOTE 3 – Inventory

As of June 30, 2014, the Company’s total inventories were $506,077.

June 30,	2014
Raw materials	$	181,194
Work in process		119,474
Finished goods		205,409
Total inventories (unaudited)	$	506,077

NOTE 4 – Income Taxes

As of June 30, 2014, the Company had a net operating loss (NOL) carryforwards of approximately $11,480,000 adjusted for stock based compensation and certain other non-deductible items available to reduce future taxable income, if any. The NOL carryforward begins to expire in 2028, and fully expire in 2033. Because management is unable to determine that it is more likely than not that the Company will realize the tax benefit related to the NOL carryforward, by having taxable income, a valuation allowance has been established as of June 30, 2014 and December 31, 2013 to reduce the tax benefit asset value to zero.

7

NOTE 5 – Options and Warrants

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

				Weighted
	Options for			Average
	Shares			Exercise Price
Outstanding as of December 31, 2013		10,133,506		$	0.74
Granted		537,172			0.75
Exercised		(146,250	)		0.77
Forfeited		-			-
Cancelled		-			-
Expired		-			-
Outstanding as of June 30, 2014 (unaudited)		10,524,428		$	0.74

All options exercised were done so by means of a cashless exercise, whereby the Company received no cash and issued new shares.

We account for all stock-based payment awards made to employees and directors based on estimated fair values. We estimate the fair value of share-based payment awards on the date of grant using an option-pricing model and the value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service period, net of forfeitures. As of June 30, 2014, there were $481,610 of unrecognized compensation expenses related to share-based payment arrangements. These costs are expected to be recognized over a weighted-average period of approximately three years. The company has sufficient shares to satisfy expected share-based payment arrangements in 2014.

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

			Weighted
	Warrants for		Average
	Shares		Exercise Price
Outstanding as of December 31, 2013		19,530,441	$	1.08
Granted		2,705,513		1.00
Exercised		-		-
Forfeited		-		-
Cancelled		-		-
Expired		-		-
Outstanding as of June 30, 2014 (Unaudited)		22,235,954	$	1.07

On July 1, 2014, the Company issued 6,268,628 shares of common stock upon the exercise of 6,268,628 warrants.  Please see additional discussion of the warrant exercise in Note 8.

NOTE 6 – Related Party Transactions

Related party transactions are included in cost of goods sold, consulting fees, general and administrative expenses, interest expense, and the capital lease obligation. Amount of related party transactions included in the condensed consolidated statements of operations are shown below.

	Three months ended June 30				Six months ended June 30,
	2014		2013		2014		2013
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Cost of goods sold		403,161		539,239		882,668		1,002,139
Operating expenses		58,325		71,998		96,958		114,690
Interest expense		45,466		46,840		87,916		82,834

8

Chief Executive Officer

The Chief Executive Officer purchased 156,000 shares in the offering that closed on February 15, 2013 at a price of $0.65 per share in consideration of monies owed to him by the Company.

	2014
Beginning balance as of December 31, 2013	$	114,434
Monies owed		7,679
Monies paid		(22,113	)
Ending balance as of June 30, 2014 (Unaudited)	$	100,000

Chief Business Development Officer

The Chief Business Development Officer is the sole owner of two corporations, CyberSecurity, Inc. and Market Tactics, Inc., which were paid for marketing consulting services provided to the Company.

	2014
Beginning balance as of December 31, 2013	$	16,058
Monies owed		53,698
Monies paid		(68,776	)
Ending balance as of June 30, 2014 (Unaudited)	$	980

Director

A Director of the Company is the counter party to consulting and non-compete contracts, as well as the sole owner of two corporations, Full Circle and NY Terminals with contracts with the Company. Full Circle is paid pursuant to lease and services agreements. NY Terminals is paid pursuant to a ground lease agreement.

	2014
Beginning balance as of December 31, 2013	$	426,052
Monies owed		1,046,494
Monies paid		(1,015,823	)
Ending balance as of June 30, 2014 (Unaudited)	$	456,723

NOTE 7 – Commitments and Contingencies

Litigation

The Company may be party to legal proceedings in the ordinary course of business.  The Company believes that the nature of these proceedings (collection actions, etc.) are typical for a Company of our size and scope of operations.  Currently, there are no pending legal proceedings.  The Company is aware of a potential claim that is at least reasonably possible of being asserted regarding a contract dispute with a firm retained to assist in the raising of capital.  The estimated range involved in this dispute is from $0 to $100,000.    Management believes this possible claim is without merit and intends to vigorously defend ourselves should a formal claim be made.

Environmental Matters

We are subject to federal, state, and local laws, regulations and ordinances relating to the protection of the environment, including those governing discharges to air and water, handling and disposal practices for solid and hazardous wastes, and occupational health and safety.  It is management’s opinion that the Company is not currently exposed to significant environmental remediation liabilities or asset retirement obligations as of June 30, 2014.  However, if a release of hazardous substances occur, or is found on one of our properties from prior activity, we may be subject to liability arising out of such conditions and the amount of such liability could be material.

9

NOTE 8 – Subsequent Events

Registration of Securities

On June 30, 2014, we began the process of registering approximately 37.2 million shares of our issued and outstanding shares that are currently restricted in accordance with Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”).  We will not receive any proceeds from the registration process and we are unable to determine when the registration process will be completed.

Warrant Exercises

On July 1, 2014, the Company issued 6,268,628 shares of common stock, par value $0.0001 per share, upon the exercise of 6,268,628 warrants.

The Company temporarily reduced the exercise price of all of its outstanding warrants to $0.50 per share for a period beginning on June 4, 2014, and ending on July 1, 2014 (the “Temporary Exercise Period”). During the Temporary Exercise Period, forty-six warrant holders exercised a total of 6,268,628 warrants and therefore purchased 6,268,628 shares of common stock in exchange for an aggregate purchase price of $3,134,314.  We received exercise funds of $1,673,182 prior to the exercise date and this amount was credit to additional paid in capital in the accompanying condensed consolidated balance sheet as of June 30, 2014.

The Company utilized the services of two FINRA registered placement agents during the Temporary Exercise Period. In connection with the warrant exercises, the Company paid an aggregate cash fee of approximately $60,869 to such placement agents. The net proceeds to the Company from the warrant exercises, after deducting the foregoing cash fee, were approximately $3,073,445.

The securities issued in connection with the warrant exercises have not been registered under the Securities Act, and were made pursuant to the exemptions from registration provided by Section 4(2) of the Securities Act or Rule 506 of Regulation D promulgated thereunder. The securities are therefore restricted in accordance with Rule 144 under the Securities Act.

Consulting Agreement with Richard Geib

On August 4, 2014, the Company entered into a Consulting Agreement (the “Consulting Agreement”) with the Company’s Chief Technical Officer, Richard Geib.

The Consulting Agreement supersedes the terms of the Consulting Agreement previously entered into between Global Recycling Technologies, Ltd., a Delaware corporation (“Global Recycling”), and Mr. Geib on May 3, 2010, which the Company assumed upon the consummation of a reverse triangular merger with Global Recycling on November 28, 2011.

The Consulting Agreement is for a term of two years and may be extended for additional one-year terms by written agreement. Pursuant to the Consulting Agreement, Mr. Geib will assist in the further development and implementation of the Company’s proprietary technology for recycling glycol, the GlyEco TechnologyTM, and perform such other duties as requested by the Company’s Chief Executive Officer.

In consideration for his services during the term, the Company will compensate Mr. Geib with an initial engagement fee of $50,000, a monthly consulting fee of $12,500 per month for the first year of the term, a to be determined monthly consulting fee for the second year of the term, and a total of 2,700,000 warrants to purchase shares of GlyEco common stock, par value $0.0001 per share, at an exercise price of $0.73 per share, of which half shall vest immediately and the remaining amount shall vest on August 4, 2015.

10

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

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that are based on information currently available to management as well as management's assumptions and beliefs. All statements, other than statements of historical fact, included in this Quarterly Report on Form 10-Q constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including but not limited to statements identified by the words "may," "will," "should," "plan," "predict," "anticipate," "believe," "intend," "estimate" and "expect" and similar expressions. Such statements reflect our current views with respect to future events, based on what we believe are reasonable assumptions; however, such statements are subject to certain risks and uncertainties. In addition to the specific uncertainties discussed elsewhere in this Quarterly Report on Form 10-Q, the risk factors set forth in Part I, "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2013, may affect our performance and results of operations. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may differ materially from those in the forward-looking statements. We disclaim any intention or obligation to update or review any forward-looking statements or information, whether as a result of new information, future events or otherwise.

Unless otherwise noted herein, terms such as the "Company," "GlyEco," "we," "us," "our" and similar terms refer to GlyEco, Inc., a Nevada corporation, and our subsidiaries.

The following discussion should be read in conjunction with the information contained in the condensed consolidated financial statements of the Company and related notes included elsewhere herein.

Company Overview

We are a green chemistry company that collects and recycles waste glycol into a reusable product that is sold to third party customers in the automotive and industrial end-markets.  Our proprietary technology, GlyEco TechnologyTM, allows us to recycle all five major types of waste glycol into a virgin-quality product usable in any glycol application. We are dedicated to conserving natural resources, limiting liability for waste generators, safeguarding the environment, and creating valuable green products.

We currently operate seven processing centers in the United States. These processing centers are located in (1) Minneapolis, Minnesota, (2) Indianapolis, Indiana, (3) Lakeland, Florida, (4) Elizabeth, New Jersey (the “NJ Processing Center), (5) Rock Hill, South Carolina, (6) Tea, South Dakota, and (7) Landover, Maryland.

Our operations span several regions, but the physical collection and disposal of waste is very much a local business. The dynamics and opportunities differ in each of our markets. By combining local operating management with standardized business practices, we drive greater overall operating efficiency across the Company while maintaining day-to-day operating decisions at the local level, closest to the customer.

In 2013, we completed implementation of the first phase of GlyEco TechnologyTM upgrades at our NJ Processing Center despite delays caused by permitting and inclement weather, including the effects of Hurricane Sandy. While Hurricane Sandy did not cause any significant physical damage to our NJ Processing Center, the surrounding area experienced extensive flooding, power failures, and disruption of transportation, power, communications, and government permitting services, therefore causing unexpected delays to our upgrades. The NJ Processing Center relies on third-party rail and truck transportation to receive waste glycol materials for processing and to deliver recycled glycol to our customers.  We currently lease a fleet of 12 railcars and intend to add to this fleet accordingly as our production capacity increases.

We began producing and selling ASTM E1177 Type EG-1 recycled glycol (“T1TM”) from multiple feedstock sources in August of 2013, and we continue to sell T1TM recycled glycol in commercial quantities. Customer response is very favorable and demand for T1TM recycled glycol exceeds our current processing capabilities. We have begun a second phase of GlyEco TechnologyTM upgrades at the NJ Processing Center to increase our volumes of T1TM and other glycol products. The second phase will include the installation of additional storage, increased throughput capabilities, and enhanced technological components.

We completed a pilot program with a national waste collection company in July 2013. This program enables GlyEco to collect waste glycols from landfills across the country for recycling. The program is in its initial stages, and we plan to increase its scope, capabilities and collection volumes in 2014.

11

Our processing centers in Minnesota, Indiana, Florida, New Jersey, South Carolina, South Dakota, and Maryland offer waste glycol collection, recycling, and disposal services. These processing centers employ truck drivers to pick up waste glycols, transport the material to their recycling facilities, and recycle the waste glycol into fully formulated antifreeze, heat-transfer fluids, and recycled glycols. These products are resold into the market, often to the same customers that generate the waste.  We currently provide collection, recycling, and disposal services to over 3,500 waste glycol generators, an increase of over 160% compared to year-end 2012.

In addition to increasing our base of waste generating customers, the Company has completed upgrades to improve quality and expand processing capabilities and capacity at each of our processing centers. The following upgrades were made to our processing centers thru June 2014:

·   Minnesota Processing Center relocated from a 2,000 square foot multi-tenant space to a 10,000 square feet stand-alone building. The company has completed initial upgrades at this new facility, including new circulation and vacuum pumps, piping, and other equipment. Processing capacity has increased by 248%. Additional upgrades are in process and due to be completed during Q2 2014.

·   Indiana Processing Center has completed initial upgrades, including improved filtration systems, advanced pre-treatment equipment, increased storage capacity, and an additional delivery truck.  Processing capacity has increased by approximately 150%.

·   Florida Processing Center has completed initial upgrades, including an improved vacuum distillation system, advanced post treatment equipment, and additional pumps and piping.  Processing capacity has increased 10,000 gallons. An additional collection truck was added to the business, allowing for expansion of our customer base. Secondary containment increased to 110% of state, local and U.S. required compliancy codes. Additional upgrades are planned to further expand production capabilities.

·   New Jersey Processing Center has completed initial upgrades of the proprietary GlyEco TechnologyTM, including the installation of a high efficiency, primary treatment process, advanced pre-treatment equipment, advanced post-treatment equipment, and increased storage capacity. We continue to implement substantial upgrades to the processing center’s infrastructure to further automate the recycling process and increase volume. 

·   South Carolina Processing Center has completed initial upgrades, including the installation of a tri-flow reflux nozzle, advanced pre-treatment equipment, advanced post-treatment equipment, and expanded tank capacity of 43,500 gallons. Production capability has increased over 25%. These technology and equipment upgrades enable the South Carolina Processing Center to process waste polyester by-product into high quality recycled material in commercial quantity. Customer base increased approximately 265% during 2013.

·   South Dakota Processing Center has completed initial upgrades, including a steam cooler, pumps, piping, and additional equipment. Processing capacity was increased by 14,000 gallons. Additional upgrades are in process and due to be completed in 2014. Customer base increased approximately 8.75% during 2013.

·   Maryland Processing Center has completed initial upgrades, installing additional equipment, pumps and piping. Production capacity has increased by approximately 26,000 gallons. Secondary containment increased to 110% of state, local and U.S. required compliancy codes.

The above described expansion activities will provide the infrastructure and trained operations staff necessary for the Company to reach projected throughput of recycled material of four to six million gallons in 2015.  Current operating results and margins are negatively impacted for the three and six months ended June 30, 2014 by the costs associated with the increases in staffing, fixed production costs, operations testing, quality control procedure development and proprietary production process implementation necessary to support our future expected production levels.  These costs increase the average cost of producing recycled glycol without the associated increase in sales price that we anticipate once we achieve planned production levels of our T1TM product.  In addition, as forecasted production levels and sales are reached, average cost per unit produced will decline when fixed costs are spread over a larger number of units produced.

Going forward, in the United States, we intend to build on the past year’s growth. We intend to increase production of T1TM recycled glycol and increase our customer base for that product offering. We plan to expand the number of waste glycol generators we service and expand those services in to new markets. We intend to increase our customer base for fully formulated antifreeze, HVAC fluids, and recycled glycols. We will continue to expand recycling services into new markets.  Further, we will continue to explore additional acquisitions and seek to create strategic alliances with companies producing or aggregating waste glycol.

Internationally, we are exploring several different strategic partnerships and business models to implement our GlyEco Technology™ in Europe, Canada, China, and elsewhere.

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Strategy

Our strategy is to increase production by continuing to expand our customer base, both in the regions we currently serve and in new regions across North America and abroad while realizing synergies from recent acquisitions.  We will expand our waste glycol disposal services and waste glycol recycling services to additional industries within our regions. The principal elements of our business strategy are to:

Integrate and Increase Profits. We intend to continue integrating and implementing best practices across our recent acquisitions and all aspects of our processing centers, including financial, staffing, technology, products and packaging, and compliance. Our customers and partners require high levels of regulatory and environmental compliance, which we intend to emphasize through employee training, facility policies and procedures, and ongoing analysis of operating performance. We have begun to implement standardized accounting, invoicing, and logistics management systems across our operations.

We intend to implement computerized customer relationship management, dispatch and inventory control systems in 2014. We have implemented the initial phase of our GlyEco® brand strategy and will continue to build brand equity via marketing initiatives. We believe all of these measures will increase the quality service we can provide to customers, increase the visibility of the Company, and maximize profitability.

Expand Feedstock Supply Volume. We intend to expand our feedstock supply volume by growing our relationships with direct waste generators and indirect waste collectors. We plan to increase the volume we collect from direct waste generators in the following ways: stress segregation from other liquid wastes and a focus on waste glycol recovery to our existing customers; attract new waste generator customers by displacing incumbent waste collectors through product quality and customer service value propositions; and attract new waste generators in territories that we do not currently serve. We plan to increase the volume we collect from indirect waste collectors by implementing specific sales programs and increasing personnel dedicated to sales generation.

Expand the New Jersey Processing Center.We have completed the first phase of technology installation and are producing Type 1 compliant recycled glycol for commercial use. We have begun the second phase of expansion to our processing capacity in order to meet customer demand for larger quantities of our T1™ recycled glycol and to process additional types of glycol. This includes an investment in additional equipment and build-out services that leverage the existing facilities while increasing capacity, improving cost efficiencies and increasing throughput. We believe this expansion will over time increase the margins we obtain on our products and the amount of sales.

Pursue Selective Strategic Relationships or Acquisitions. We intend to grow our market share by consolidating feedstock supply through partnering with waste collection companies, leveraging recently acquired relationships, or acquiring other companies with glycol recycling operations. We plan to focus on partnerships and acquisitions that not only add revenue and profitability to our financials but those that have long-term growth potential and fit with the overall goals of the Company.

New Market Development. We have completed the initial processing center expansions necessary to diversify our customer base into new markets. During 2013, we began processing waste glycols from the textile, HVAC, and airline industries at some of our processing centers. We intend to continue this growth into new markets and underserved industries. We plan to implement additional capacity at our processing centers to allow them to process additional types of waste glycol streams and therefore to serve any prevailing new markets in their respective geographic areas.

Enter International Markets. We intend to explore opportunities to expand operations and technology into international markets. We have developed several relationships in markets where we believe glycol recycling is an underserved market, including Europe, Asia, Canada, Mexico, and South America. We believe that moving into international markets will further establish the Company as a leader in glycol recycling and will increase profitability.

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Critical Accounting Policies

We have identified in Note 2 - "Basis of Presentation and Summary of Significant Accounting Policies" to the Financial Statements contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2013, certain critical accounting policies that affect the more significant judgments and estimates used in the preparation of the financial statements.  Our discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States, or GAAP. The preparation of our consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue, expenses, and related disclosure of contingent assets and liabilities. 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 and useful lives of intangible assets, inventory, fair value of assets acquired in business combinations, stock-based compensation expense, and deferred taxes. We base our estimates on historical experience, our observance of trends in particular areas, and information or valuations and various other assumptions that we believe to be reasonable under the circumstances and which form the basis for making judgments about the carrying value of assets and liabilities that may not be readily apparent from other sources. Actual amounts could differ significantly from amounts previously estimated.

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

Going Concern

The going concern basis of presentation assumes we will continue in operation throughout the next fiscal year and into the foreseeable future and will be able to realize our assets and discharge our liabilities and commitments in the normal course of business.  As discussed below, certain conditions currently exist which raise substantial doubt upon the validity of this assumption.  The financial statements do not include any adjustments that might result from the outcome of the uncertainty.

The accompanying unaudited condensed consolidated financial statements as of and for the six months ended June 30, 2014, have been prepared assuming that the Company will continue as a going concern. As of June 30, 2014, the Company has yet to achieve profitable operations and is dependent on our ability to raise capital from stockholders or other sources to sustain operations.  Ultimately, we hope to achieve viable profitable operations when operating efficiencies can be realized from the facilities added in 2013. The unaudited condensed consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties. These factors raise substantial doubt about the Company's ability to continue as a going concern. In their report dated April 15, 2014, our independent registered public accounting firm included an emphasis-of-matter paragraph with respect to our financial statements for the fiscal year ended December 31, 2013, expressing uncertainty regarding the Company’s assumption that we will continue as a going concern.

Management's plans to address these matters include raising additional financing through offering our shares of capital stock in private and/or public offerings of our securities and through debt financing if available and needed. The Company plans to become profitable by realizing synergies and cost reduction opportunities associated with acquisitions made in 2013 and 2014, upgrading the capacity and capabilities at our existing operating facilities, continuing to implement our patent-pending technology in international markets, and acquiring profitable glycol recycling companies, which are looking to take advantage of the Company's public company status and improve their profitability through a combined synergy. The Company intends to expand customer and supplier bases once operational capacity and capabilities have been upgraded.

Collectability of Accounts Receivable

Accounts receivable consist primarily of amounts due from customers from sales of products and is recorded net of an allowance for doubtful accounts. The allowance for uncollectible accounts totaled $47,038 and $47,927 as of June 30, 2014, and December 31, 2013, respectively. In order to record our accounts receivable at their net realizable value, we assess their collectability. A considerable amount of judgment is required in order to make this assessment, based on a detailed analysis of the aging of our receivables, the credit worthiness of our customers and our historical bad debts and other adjustments. If economic, industry or specific customer business trends worsen beyond earlier estimates, we increase the allowance for uncollectible accounts by recording additional expense in the period in which we become aware of the new conditions.

The majority of our customers are based in the United States. The economic conditions in the United States can significantly impact the recoverability of our accounts receivable.

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Inventory

Inventory consists primarily of used glycol to be recycled, recycled glycol for resale and supplies used in the recycling process that, in each case, are stated at the lower of cost or market approximating cost on a first in, first out basis. Costs include purchase costs, fleet and fuel costs, direct labor, transportation costs and production related costs. In determining whether inventory valuation issues exist, we consider various factors including estimated quantities of slow-moving inventory by reviewing on-hand quantities, historical sales and production usage. Shifts in market trend and conditions, changes in customer preferences or the losses of one or more significant customers are factors that could affect the value of our inventories. These factors could make our estimates of inventory valuation differ from actual results.

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(s) exceeds the fair value of the asset(s). 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 a current transaction between 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.

Stock Options

We use the Black-Scholes-Merton valuation model to estimate the value of options and warrants issued to employees and consultants as compensation for services rendered to the Company.  This model uses estimates of volatility, risk free interest rate and the expected term of the options or warrants, along with the current market price of the underlying stock, to estimate the value of the options and warrants on the date of grant.  In addition, the calculation of compensation costs requires that the Company estimate the number of awards that will be forfeited during the vesting period.  The fair value of the stock-based awards is amortized over the vesting period of the awards.  For stock-based awards that vest based on performance conditions, expense is recognized when it is probable that the conditions will be met.

Assumptions used in the calculation were determined as follows:

·   expected term is determined under the plain vanilla 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 was not available;

·   expected volatility is measured using the historical daily changes in the market price of similar industry indices selected by us as representative, which are publicly traded, over the expected term of the award, due to our limited trading history;

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

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

Impairment of Goodwill and Other Intangible Assets

As of June 30, 2014, goodwill and net intangible assets recorded on our unaudited condensed consolidated balance sheet aggregated to $4,402,571 (of which $835,295 is goodwill that is not subject to amortization).  We perform an annual impairment review in the third quarter of each fiscal year. 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. The impairment test for goodwill uses a two-step approach. Step one 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 two must be performed. Step two 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, an impairment loss is recognized in an amount equal to the excess.  To date, we have not recorded an impairment of goodwill.

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In addition to the required goodwill impairment analysis, we also review the recoverability and estimated useful life of our net intangibles with finite lives when an indicator of impairment exists. When we acquire intangible assets, management determines the estimated useful life, expected residual value if any and appropriate allocation method of the asset value based on the information available at the time. Reaching a determination on useful life requires significant judgments and assumptions regarding the future effects of obsolescence, demand, competition, other economic factors (such as the stability of the industry, known technological advances, legislative action that results in an uncertain or changing regulatory environment, and expected changes in distribution channels), the level of required maintenance expenditures, and the expected lives of other related groups of assets.  Our assumptions with respect to expected future cash flows relating to intangible assets is impacted by our assessment of (i) the proprietary nature of our recycling process combined with (ii) the technological advances we have made allowing us to recycle all five major types of waste glycol into a virgin-quality product usable in any glycol application along with (iii) the fact that the market is currently served by primarily smaller local processors.  If our assumptions and related estimates change in the future, or if we change our reporting structure or other events and circumstances change, we may be required to record impairment charges of goodwill and intangible assets in future periods and we may need to change our estimated useful life of amortizing intangible assets. Any impairment charges that we may take in the future or any change to amortization expense could be material to our results of operations and financial condition.

Accounting for Income Taxes

We use the asset and liability method to account for income taxes. Significant judgment is required 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 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 carry-forwards, and liabilities, which are included within our 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, a valuation allowance is established. To the extent a valuation allowance is established or increased in a period, we include an adjustment within the tax provision of our consolidated statements of operations. As of June 30, 2014 and December 31, 2013, we had established a full valuation allowance for all deferred tax assets.

As of June 30, 2014 and December 31, 2013, 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. Any interest or penalties related to unrecognized tax benefits is recognized 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.

Results of Operations

Six Months Ended June 30, 2014 to Six Months Ended June 30, 2013

Net Sales

For the six-month period ended June 30, 2014, Net Sales were $3,260,031, compared to $2,650,140 for the six-month period ended June 30, 2013, an increase of $609,891, or 23%. The increase in Net Sales was due to increased production capabilities and corresponding sales from new facilities added in 2013.  The volume of recycled glycol sold increased by approximately 55% while the average price decreased by approximately 8% as compared to the same period in the prior year.  New facilities added in 2013 accounting for 75% of the revenues for the second quarter of 2014 and 79% of the gallons produced for the second quarter of 2013.

Cost of Goods Sold

For the six-month period ended June 30, 2014, our Costs of Good Sold was $3,290,680, compared to $2,107,446 for the six-month period ended June 30, 2013, representing an increase of $1,183,234, or approximately 56%. The increase in Cost of Goods Sold was due to the associated Cost of Goods Sold from increased production capabilities from new facilities added in 2013.  In addition, the costs associated with the increases in staffing, fixed production costs, operations testing, quality control procedure development and proprietary production process implementation necessary to support our future expected production levels increased Cost of Goods Sold during the period. Cost of Goods Sold consists of all costs of sales, including costs to purchase, transport, store and process the raw materials, and overhead related to product manufacture and sale. We sometimes receive raw materials (used antifreeze) at no cost to the Company, which can have an impact on our reported consolidated gross profit.

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Gross Profit

For the six-month period ended June 30, 2014, we realized a gross loss of $(30,649), compared to a gross profit of $542,694 for the six-month period ended June 30, 2013, a decrease of $573,343, or 106%. The decrease in gross profit was primarily due to continued higher operating costs to support future T1 production prior to completion of production through put at our NJ facility of T1 material. Our gross profit margin for the six-month period ended June 30, 2014, was approximately (1)%, compared to approximately 20% for the six-month period ended June 30, 2013.  We expect our gross profit margin to increase as construction in progress is finalized, output testing is completed and T1TM production and sales begin at our NJ facility. Current operating results and margins were negatively impacted for the six months ended June 30, 2014 by the increased costs discussed above.  These costs increase the average cost of producing recycled glycol without the associated increase is sales price that we anticipate once we achieve planned production levels of our T1TM product.  We have forecasted that T1 production capacity will be 4 to 6 million gallons at an expected gross margin in excess of 30% once production is fully operational at our New Jersey facility.

Operating Expenses

For the six-month period ended June 30, 2014, operating expenses increased to $2,179,580 from $1,116,215 for the six-month period ended June 30, 2013, representing an increase of $1,063,365 or approximately 95%.  Operating expenses consist of Consulting Fees, Legal and Professional Fees and General and Administrative Expenses. This increase is attributable to our expansion through acquisition and the establishment of the necessary infrastructure for our current and planned future scope of operations.

Consulting Fees consist of marketing, administrative and management fees paid under consulting agreements.  Consulting Fees decreased to $285,910 for the six-month period ended June 30, 2014, from $348,715 for the six-month period ended June 30, 2013, representing a decrease of $62,805, or approximately 18%. The decrease is primarily attributable to the hiring of some consultants as employees.

Salaries and Wages consist of wages and the related taxes.  Salaries and Wages increased to $515,154 for the six-month period ended June 30, 2014, from $348,557 for the six-month period ended June 30, 2013, representing an increase of $166,597, or 48%. The increase is due to the hiring of additional employees attributable to the new operations and related administrative support for activities added in 2013.

Share-Based Compensation consists of options issued to consultants and employees in consideration for services provided to the Company. Share-Based Compensation increased to $711,532 for the six-month period ended June 30, 2014, from zero dollars  for the six-month period ended June 30, 2013, representing an increase of $711,532, or 100%.   The increase is due to the issuance of 537,172 compensatory options and 204,689 shares of common stock to reward and provide an incentive to our consultants and employees and align their interest with our shareholders while conserving cash for expanding operations and investing activities.

Legal and Professional Fees consist of legal, outsourced accounting services, corporate tax and audit services.  For the six-month period ended June 30, 2014, Legal and Professional Fees increased to $236,301 from $122,176 for the six-month period ended June 30, 2013, representing an increase of $114,125, or approximately 93%. The increase is due to higher costs of the year-end audit arising from our expanded scope of operations and the filing of a Registration Statement on Form S-1.

General and Administrative (G&A) Expenses consist of general operational costs of our business. For the six-month period ended June 30, 2014, G&A Expenses increased to $430,684 from $296,767 for the six-month period ended June 30, 2013, representing an increase of $133,917, or approximately 45%.  This increase is primarily due to the depreciation and amortization of assets relating to facilities added in 2013, and the associated costs of building out our infrastructure to support future growth of the Company.

Other Income and Expenses

For the six-month period ended June 30, 2014, Other Income and Expenses decreased to $89,799 from $104,842 for the six-month period ended June 30, 2013, representing a decrease of $15,043, or approximately 14%. Other Income and Expenses consist primarily of interest income, and interest expense.

Interest Income consists of the interest earned on the Company’s corporate bank account.  Interest Income for the six-month period ended June 30, 2014, decreased to $644 from $957 for the six-month period ended June 30, 2013, representing a decrease of $313 or approximately 33%.  The decrease was due to less cash being held in interest-bearing accounts.

Interest Expense consists of interest on the Company’s outstanding indebtedness.   For the six-month period ended June 30, 2014, Interest Expense decreased to $90,443 from $105,799 for the six-month period ended June 30, 2013, representing a decrease of $15,356 or approximately 15%. The decrease was mainly due to interest expense no longer incurred from the convertible note payable. 

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Three Months Ended June 30, 2014 to Three Months Ended June 30, 2013

Net Sales

For the three-month period ended June 30, 2014, Net Sales were $1,606,990, compared to $1,417,472 for the three-month period ended June 30, 2013, an increase of $189,518, or 13%. The increase in Net Sales was due to increased production capabilities and corresponding sales from new facilities added in 2013. The volume of recycled glycol sold increased by approximately 50% while the average price increased by approximately 3% as compared to the same period in the prior year.  New facilities added in 2013 accounting for 72% of the revenues for the second quarter of 2014 and 74% of the gallons produced for the second quarter of 2013.

Cost of Goods Sold

For the three-month period ended June 30, 2014, our Costs of Good Sold was $1,629,257, compared to $941,864 for the three-month period ended June 30, 2013, representing an increase of $687,393, or approximately 73%. The increase in Cost of Goods Sold was due to the associated Cost of Goods Sold from increased production capabilities from new facilities added in 2013.  In addition, the costs associated with the increases in staffing, fixed production costs, operations testing, quality control procedure development and proprietary production process implementation necessary to support our future expected production levels increased Cost of Goods Sold during the period. Cost of Goods Sold consists of all costs of sales, including costs to purchase, transport, store and process the raw materials, and overhead related to product manufacture and sale. We sometimes receive raw materials (used antifreeze) at no cost to the Company, which can have an impact on our reported consolidated gross profit.

Gross Profit

For the three-month period ended June 30, 2014, we realized a gross loss of $(22,267), compared to a gross profit $475,609 for the three-month period ended June 30, 2013, a decrease of $497,876, or 105%. The decrease in gross profit was primarily due to continued higher operating costs to support future T1 production prior to completion of production through put at our NJ facility of T1TM material. . Current operating results and margins were negatively impacted for the three months ended June 30, 2014 by the increased costs discussed above.  These costs increase the average cost of producing recycled glycol without the associated increase is sales price that we anticipate once we achieve planned production levels of our T1TM product.  Our gross profit margin for the three-month period ended June 30, 2014, was approximately (1)%, compared to approximately 34% for the three-month period ended June 30, 2013.  We expect our gross profit margin to increase as production and sales of T1TM volumes increase at our NJ facility.

Operating Expenses

For the three-month period ended June 30, 2014, operating expenses increased to $1,041,398 from $628,204 for the three-month period ended June 30, 2013, representing an increase of $413,194, or approximately 66%.  Operating expenses consist of Consulting Fees, Legal and Professional Fees and General and Administrative Expenses. This increase is attributable to our expansion through acquisition and the establishment of the necessary infrastructure for our current and planned future scope of operations.

Consulting Fees consist of marketing, administrative and management fees paid under consulting agreements.  Consulting Fees decreased to $144,744 for the three-month period ended June 30, 2014, from $189,973 for the three-month period ended June 30, 2013, representing a decrease of $45,229, or approximately 24%. The decrease is primarily attributable to the hiring of some consultants as employees.

Salaries and Wages consist of wages and the related taxes.  Salaries and Wages increased to $243,579 for the three-month period ended June 30, 2014, from $191,040 for the three-month period ended June 30, 2013, representing an increase of $52,539, or 28%. The increase is due to the hiring of additional employees attributable to the new operations and related administrative support for activities added in 2013.

Share-Based Compensation consists of options issued to consultants and employees in consideration for services provided to the Company. Share-Based Compensation increased to $238,758 for the three-month period ended June 30, 2014, from zero dollars for the three-month period ended June 30, 2013, representing an increase of $238,758, or 100%.   The increase is due to the issuance of 437,172 compensatory options to reward and provide an incentive to our consultants and employees and align their interest with our shareholders while conserving cash for expanding operations and investing activities.

Legal and Professional Fees consist of legal, outsourced accounting services, corporate tax and audit services.  For the three-month period ended June 30, 2014, Legal and Professional Fees increased to $199,388 from $58,601 for the three-month period ended June 30, 2013, representing an increase of 140,787, or approximately 240%. The increase is due to costs related to the 2013 year-end audit arising from our expanded scope of operations and the filing of a Registration Statement on Form S-1.

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General and Administrative (G&A) Expenses consist of general operational costs of our business. For the three-month period ended June 30, 2014, G&A Expenses increased to $214,929 from $188,590 for the three-month period ended June 30, 2013, representing an increase of $26,339, or approximately 14%.  This increase is primarily due to the depreciation and amortization of assets relating to facilities added in 2013, and the associated costs of building out our infrastructure to support future growth of the Company.

Other Income and Expenses

For the three-month period ended June 30, 2014, Other Income and Expenses decreased to $45,400 from $46,840 for the three-month period ended June 30, 2013, representing a decrease of $1,440, or approximately 3%. Other Income and Expenses consist primarily of interest income, and interest expense.

Interest Income consists of the interest earned on the Company’s corporate bank account.  Interest Income for the three-month period ended June 30, 2014, decreased to $66 from $429 for the three-month period ended June 30, 2013, representing a decrease of $363 or approximately 85%.  The decrease was due to less cash being held in interest-bearing accounts.

Interest Expense consists of interest on the Company’s outstanding indebtedness.   For the three-month period ended June 30, 2014, Interest Expense decreased to $45,466 from $47,269 for the three-month period ended June 30, 2013, representing a decrease of $1,803 or approximately 4%. The decrease was mainly due to a decline in interest expense per the amortization schedule of the capital lease. 

Liquidity & Capital Resources; Going Concern

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

For the six months ended June 30, 2014 and 2013, net cash used by operating activities was $1,653,954 and $1,122,660, respectively.  For the six months ended June 30, 2014, the company used $2,409,313 in cash for investing activities, compared to the $448,598 used in the prior year’s period.  These amounts were comprised entirely of capital expenditures for equipment and construction in progress.  For the six months ended June 30, 2014 and 2013, we received $1,667,650 and $1,618,914, respectively, in cash for financing activities.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.  As of June 30, 2014, the Company has yet to achieve profitable operations and is dependent on our ability to raise capital from stockholders or other sources to sustain operations and to ultimately achieve profitable operations when operating efficiencies can be realized from facilities added in 2013.   Our plans to address these matters include, realizing synergies and cost efficiencies with prior year acquisitions, raising additional financing through offering our shares of the Company’s capital stock in private and/or public offerings of our securities and through debt financing if available and needed. There can be no assurances, however, that the Company will be able to obtain any financings or that such financings will be sufficient to sustain our business operation or permit the Company to implement our intended business strategy.  The Company plans to become profitable by upgrading the capacity and capabilities at our existing operating facilities, continuing to implement our patent-pending technology in international markets, and acquiring profitable glycol recycling companies. During 2014, we have already realized significant increases in production capacity at some of our facilities.  We intend to expand customer and supplier bases once operational capacity and capabilities have been upgraded and fully integrated.

In their report dated April 15, 2014, our independent registered public accounting firm included an emphasis-of-matter paragraph with respect to our financial statements for the fiscal year ended December 31, 2013 concerning the Company’s assumption that we will continue as a going concern.  Our ability to continue as a going concern is an issue raised as a result of current working capital requirements and recurring losses from operations.

The Company does not currently have sufficient capital to sustain expected operations and acquisitions for the next 12 months. To date, the Company has financed our operations and investing activities through private sales of our securities exempt from the registration requirements of the Securities Act of 1933, as amended. During the six months ended June 30, 2014, the Company raised $0 from private sales of our securities.

19

Frenkel Convertible Note

On March 14, 2014, the Series AA Preferred Stock was converted under the Conversion Agreement into 2,342,750 shares of Common Stock at a price of $1.02 per share.  As inducement for the redemption of the Series AA Preferred Stock, an additional 262,763 shares of Common Stock were issued at a price of $1.02 per share.  Additionally, per the terms of the Conversion Agreement, a three-year warrant to purchase one share of Common Stock was issued for each share of Common Stock received in the conversion with each such warrant having an exercise price of $1.00; therefore, a warrant to purchase 2,605,513 shares of Common Stock was issued in connection with the conversion.  For a more detailed discussion of the Convertible Note and Series AA Preferred Stock, please see note 10 in the accompanying consolidated financial statements for the year ended December 31, 2013.

Private Financings

None.

Off-balance Sheet Arrangements

None

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, conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a- 15(e) and 15d- 15(e) under the Exchange Act). Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of June 30, 2014, our disclosure controls and procedures were not effective, for the reasons discussed below, to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is (i) recorded, processed, summarized, and reported within the time periods specified in the SEC rules and forms, and (ii) is accumulated and communicated to our management, including our Chief Executive Officer, as appropriate to allow timely decisions regarding required disclosure.

Management’s Report on Internal Control Over Financial Reporting

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

Due to its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate due to changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

A material weakness is a deficiency, or combination of deficiencies, that creates a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected in a timely manner. The material weakness related to our company was due to not having the adequate personnel to address the reporting requirements of a public company and to fully analyze and account for our transactions. We do not believe that this material weakness has resulted in deficient financial reporting because we have worked through the reporting process to review our transactions to assure compliance with professional standards.

20

Accordingly, while we identified a material weakness in our system of internal control over financial reporting as of June 30, 2014, we believe that we have taken reasonable steps to ascertain that the financial information contained in this report is in accordance with accounting principles generally accepted in the United States. We believe we have made progress towards remediating the previously identified material weakness by retaining a new Corporate Controller with public company experience in February 2014 to assure financial reporting compliance in the future and to assist the Chief Financial Officer.

Changes in Internal Control Over Financial Reporting

During the fiscal quarter ended March 31, 2014, we retained a new Corporate Controller with public company experience to help make progress towards remediating the material weakness identified above.

Inherent 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 controls 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. The design of any system of controls is based 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.

21

PART II—OTHER INFORMATION

Item 1.  Legal Proceedings.

From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business.  However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have, individually or in the aggregate, a material adverse effect on our business, financial condition, or operating results.

Item 1A.  Risk Factors.

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.

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

For the six months ended June 30, 2014, the Company issued unregistered securities as follows:

On January 24, 2014, the Company issued an aggregate of 24,167 shares of Common Stock to one non-accredited investor for the cashless exercise of 45,000 stock options at a weighted average exercise price of $0.72 per share. The closing price on the OTCQB Market on the day of exercise was $1.08 per share of Common Stock. The stock options exercised vested immediately upon issuance and were converted at a rate of one share of Common Stock for each stock option exercised. The shares were issued pursuant to Section 4(2) and Rule 506 of Regulation D promulgated thereunder because the investor had sufficient sophistication and knowledge of the Company and the financing transaction, and the sale did not involve any form of general solicitation or general advertising.  The investor made investment representations that the shares were taken for investment purposes and not with a view to resale.

On February 10, 2014, the Company issued an aggregate of 204,689 shares of Common Stock to four employees of the Company, pursuant to a performance incentive plan at a price of $1.04 per share. The shares were issued pursuant to Section 4(2) and Rule 506 of Regulation D promulgated thereunder because the investors had sufficient sophistication and knowledge of the Company and the financing transaction, and the sale did not involve any form of general solicitation or general advertising. The investors made investment representations that the shares were taken for investment purposes and not with a view to resale. The shares of Common Stock issued are restricted under Rule 144 promulgated under the Securities Act.

On March 14, 2014, the Company issued an aggregate of 2,605,513 shares of Common to two accredited investors in consideration for the conversion of Series AA Preferred Stock into Common Stock, per the terms of the Note Conversion Agreement at a price of $0.50 per share. The shares were issued pursuant to Section 4(2) and Rule 506 of Regulation D promulgated thereunder because such investors represented that they were “accredited investors” as such term is defined under the Securities Act and the sale did not involve any form of general solicitation or general advertising. The investors made investment representations that the shares were taken for investment purposes and not with a view to resale. The shares are restricted under Rule 144 promulgated under the Securities Act.

On March 21, 2014, the Company issued an aggregate of 204,750 shares of Common Stock to MMT Technologies at a price of $1.03 per share, pursuant to the MMT Agreement, by and among the Company, Acquisition Sub #3, and MMT Technologies, pursuant to which Acquisition Sub #3 acquired MMT Technologies’ business and all of its assets. The shares of Common Stock issued pursuant to the MMT Agreement are restricted under Rule 144 promulgated under the Securities Act. The Company issued theses shares pursuant to the registration exemptions of the Securities Act afforded the Company under Section 4(2) thereunder.

On May 2, 2014, the Company issued an aggregate of 47,980 shares of Common Stock to one non-accredited investor for the cashless exercise of 101,250 stock options. The closing price on the OTCQB Market on the day of exercise was $0.95 per share of Common Stock. The stock options exercised vested immediately upon issuance and were converted at a rate of one share of Common Stock for each stock option exercised. The shares were issued pursuant to Section 4(2) and Rule 506 of Regulation D promulgated thereunder because the investor had sufficient sophistication and knowledge of the Company and the financing transaction, and the sale did not involve any form of general solicitation or general advertising. The investor made investment representations that the shares were taken for investment purposes and not with a view to resale.

Item 3.  Defaults Upon Senior Securities.

None.

22

Item 4.  Mine Safety Disclosures

Not applicable.

Item 5.  Other Information.

None.

Item 6.  Exhibits.

No.		Description
31.1(1)		Rule 13(a)-14(a)/15(d)-14(a) Certification of Principal Executive Officer
31.2(1)		Rule 13(a)-14(a)/15(d)-14(a) Certification of Principal Financial and Accounting Officer
32.1(1)		Section 1350 Certification of Principal Executive Officer
32.2(1)		Section 1350 Certification of Principal Financial and Accounting Officer
101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Extension Schema Document
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB		XBRL Taxonomy Extension Labels Linkbase Document
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document
(1)	Filed herewith.

23

SIGNATURES

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

	GlyEco, Inc.
Date: August 14, 2014	By: /s/ John Lorenz
	John Lorenz
	Chief Executive Officer
	(Principal Executive Officer)
Date: August 14, 2014	By: /s/ Alicia Williams
	Alicia Williams
	Chief Financial Officer
	(Principal Financial Officer)

24

EX-31.1

Exhibit 31.1

Certification of Principal Executive Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

I, John Lorenz, certify that:

1.	I have reviewed this Form 10-Q for the fiscal quarter ended June 30, 2014, of GlyEco, Inc. (the “registrant”);
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 our 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: August 14, 2014

/s/ John Lorenz

John Lorenz

Chief Executive Officer

(Principal Executive Officer)

EX-31.2

Exhibit 31.2

Certification of Principal Financial Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

I, Alicia Williams, certify that:

1.	I have reviewed this Form 10-Q for the fiscal quarter ended June 30, 2014, of GlyEco, Inc. (the “registrant”);
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 our 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: August 14, 2014

/s/ Alicia Williams

Alicia Williams

Chief Financial Officer

(Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(SUBSECTIONS (a) AND (b) OF SECTION 1350, CHAPTER 63 OF TITLE 18, UNITED STATES CODE)

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, chapter 63 of Title 18, United States Code), the undersigned officer of GlyEco, Inc. (the “Company”), does hereby certify with respect to the Quarterly Report of the Company on Form 10-Q for the period ended June 30, 2014, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), to the best of the undersigned’s knowledge that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

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

Date: August 14, 2014	/s/ John Lorenz
	John Lorenz
	Chief Executive Officer
	(Principal Executive Officer)

EX-32.2

Exhibit 32.2

CERTIFICATION

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(SUBSECTIONS (a) AND (b) OF SECTION 1350, CHAPTER 63 OF TITLE 18, UNITED STATES CODE)

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, chapter 63 of Title 18, United States Code), the undersigned officer of GlyEco, Inc. (the “Company”), does hereby certify with respect to the Quarterly Report of the Company on Form 10-Q for the period ended June 30, 2014, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), to the best of the undersigned’s knowledge that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

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

Date: August 14, 2014	/s/ Alicia Williams
	Alicia Williams
	Chief Financial Officer
	(Principal Financial Officer)

XML

NOTE 6 - Related Party Transactions (Details) (Chief Executive Officer [Member], USD $)	0 Months Ended
	Feb. 15, 2013	Feb. 15, 2013
Chief Executive Officer [Member]
NOTE 6 - Related Party Transactions (Details) [Line Items]
Stock Issued During Period, Shares, New Issues	156,000
Shares Issued, Price Per Share		$ 0.65

XML

NOTE 3 - Inventory

6 Months Ended

Jun. 30, 2014

Inventory Disclosure [Abstract]

Inventory Disclosure [Text Block]

NOTE 3 – Inventory

As of June 30, 2014, the Company’s total inventories were $506,077.

June 30,	2014
Raw materials	$	181,194
Work in process		119,474
Finished goods		205,409
Total inventories (unaudited)	$	506,077

XML

NOTE 6 - Related Party Transactions (Details) - Schedule of Related Party Transactions - Director (USD $)			6 Months Ended
	Jun. 30, 2014	Dec. 31, 2013	Jun. 30, 2014 Director [Member]
Related Party Transaction [Line Items]
Beginning balance as of December 31, 2013	$ 557,703	$ 582,682	$ 426,052
Monies owed			1,046,494
Monies paid			(1,015,823)
Ending balance as of June 30, 2014 (Unaudited)	$ 557,703	$ 582,682	$ 456,723

XML

NOTE 6 - Related Party Transactions (Details) - Schedule of Related Party Transactions - Chief Business Development Officer (USD $)			6 Months Ended
	Jun. 30, 2014	Dec. 31, 2013	Jun. 30, 2014 Chief Business Development Officer [Member]
Related Party Transaction [Line Items]
Beginning balance as of December 31, 2013	$ 557,703	$ 582,682	$ 16,058
Monies owed			53,698
Monies paid			(68,776)
Ending balance as of June 30, 2014 (Unaudited)	$ 557,703	$ 582,682	$ 980

XML

NOTE 7- Commitments and Contingencies (Details) (Dispute with Entity Contracted to Assist in Raising Capital [Member], USD $)	Jun. 30, 2014
Minimum [Member]
NOTE 7- Commitments and Contingencies (Details) [Line Items]
Loss Contingency, Estimate of Possible Loss	$ 0
Maximum [Member]
NOTE 7- Commitments and Contingencies (Details) [Line Items]
Loss Contingency, Estimate of Possible Loss	$ 100,000

XML

NOTE 8 - Subsequent Events (Details) (USD $)	6 Months Ended			1 Months Ended	3 Months Ended	6 Months Ended	0 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013	Jul. 01, 2014 Temporary Exercise Period [Member] Subsequent Event [Member]	Aug. 13, 2014 Temporary Exercise Period [Member] Subsequent Event [Member]	Jun. 30, 2014 Temporary Exercise Period [Member]	Aug. 04, 2014 Subsequent Event [Member]	Jul. 01, 2014 Subsequent Event [Member]	Aug. 04, 2014 Subsequent Event [Member]	Jul. 01, 2014 Subsequent Event [Member]
NOTE 8 - Subsequent Events (Details) [Line Items]
Registration of Shares, Number of Shares	37,200,000
Stock Issued During Period, Shares, Exercise of Warrants								6,268,628
Common Stock, Par or Stated Value Per Share	$ 0.0001		$ 0.0001							$ 0.0001
Class of Warrants or Rights Exercised								6,268,628
Class of Warrant or Right, Exercise Price of Warrants or Rights				$ 0.50					$ 0.73
Number of Warrant Holders				46
Proceeds from Warrant Exercises	$ 1,673,182	$ 0			$ 3,134,314	$ 1,673,182
Payments of Stock Issuance Costs	0	77,537			60,869
Proceeds from Warrant Exercises, Net					$ 3,073,445
Agreement, Term							term of two years and may be extended for additional one-year terms by written agreement
Other Commitments, Description							initial engagement fee of $50,000, a monthly consulting fee of $12,500 per month for the first year of the term, a to be determined monthly consulting fee for the second year of the term
Class of Warrant or Rights Granted							2,700,000
Warrants, Vesting Terms							half shall vest immediately and the remaining amount shall vest on August 4, 2015

XML

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

6 Months Ended

Jun. 30, 2014

Disclosure Text Block [Abstract]

Basis of Presentation and Significant Accounting Policies [Text Block]

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

Basis of Presentation

The condensed consolidated financial statements included herein have been prepared by us without audit, pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”) and should be read in conjunction with the audited financial statements for the year ended December 31, 2013. 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 consolidated financial statements reflect, in the opinion of management, all normal recurring adjustments necessary to present fairly our financial position at June 30, 2014, and the results of our operations and cash flows for the periods presented. We derived the December 31, 2013 condensed consolidated balance sheet data from audited financial statements, but do not include all disclosures required by GAAP.  Interim results are subject to seasonal variations and the results of operations for the three and six months ended June 30, 2014 and 2013, are not necessarily indicative of the results to be expected for the full year.

Going Concern

The condensed consolidated financial statements as of and for the three and six months ended June 30, 2014, and December 31, 2013 have been prepared assuming that the Company will continue as a going concern.  As of June 30, 2014, the Company has yet to achieve profitable operations and is dependent on its ability to raise capital from stockholders or other sources to sustain operations and to ultimately achieve viable operations. The condensed consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.

The Company’s plans to address these matters include, raising additional financing through offering its shares of capital stock in private and/or public offerings of its securities and through debt financing if available and needed. The Company plans to become profitable by upgrading the capacity and capabilities at its existing operating facilities, continuing to implement its patent-pending technology in international markets, and acquiring profitable glycol recycling companies, which are looking to take advantage of the Company’s public company status and improve their profitability through a combined synergy. The Company expects gross margins to increase as the costs associated with integration continue to decline and sales of our T1 material reached plan levels.

XML

Condensed Consolidated Balance Sheets (USD $)	Jun. 30, 2014	Dec. 31, 2013
Current assets
Cash	$ 1,997,682	$ 4,393,299
Accounts receivable, net	601,045	898,934
Due from related parties	19,968	34,868
Prepaid expenses	153,910	53,732
Inventories	506,077	268,191
Total current assets	3,278,682	5,649,024
Equipment
Equipment	4,235,521	3,719,344
Leasehold improvements	201,364	7,641
Accumulated depreciation	(521,421)	(328,803)
	3,915,464	3,398,182
Construction in process	3,971,315	2,117,001
Total equipment, net	7,886,779	5,515,183
Other assets
Deposits	0	80,708
Goodwill	835,295	779,303
Other intangible assets, net	3,567,276	3,673,190
Total other assets	4,402,571	4,533,201
Total assets	15,568,032	15,697,408
Current liabilities
Accounts payable and accrued expenses	880,972	1,271,674
Due to related parties	557,703	582,682
Note payable	6,702	6,504
Capital lease obligation	308,825	285,363
Total current liabilities	1,754,202	2,146,223
Non-current liabilities
Note payable	121,476	9,877
Capital lease obligation	1,048,783	1,189,574
Total non-current liabilities	1,170,259	1,199,451
Total liabilities	2,924,461	3,345,674
Redeemable Series AA convertible preferred stock, 2,342,740 shares issued and outstanding	0	1,171,375
Stockholders' equity
Preferred stock; $0.0001 par value; 10,000,000 shares authorized and zero shares issued and outstanding as of June 30, 2014 and 2,342,740 Series AA (above) as of December 31, 2013	0	0
Common stock, $.0001 par value; 51,992,009 and 48,834,916 shares issued and outstanding as of June 30, 2014 and December 31, 2013 respectively	5,192	4,884
Additional paid in capital	30,551,893	24,541,809
Accumulated deficit	(17,913,514)	(13,366,334)
Total stockholders' equity	12,643,571	11,180,359
Total liabilities and stockholders' equity	$ 15,568,032	$ 15,697,408

XML

Condensed Consolidated Statements of Cash Flows (unaudited) (USD $)	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Net cash flow from operating activities
Net loss	$ (2,303,770)	$ (678,363)
Adjustments to reconcile net loss to net cash used by operating activities
Depreciation and amortization	298,532	119,139
Stock-based compensation expense	711,532	0
Stock issued for conversion of accrued interest	0	24,913
Stock issued for lease payment	0	80,000
(Increase) decrease in assets:
Accounts receivable	297,889	(1,386,927)
Due from related party	14,900	0
Prepaid expenses	(100,178)	(75,639)
Inventories	(237,886)	(376,895)
Deposits	80,708	0
Increase (decrease) in liabilities:
Accounts payable and accrued expenses	(390,702)	252,729
Due to related party	(24,979)	900,797
Net cash used in operating activities	(1,653,954)	(1,122,660)
Cash flows from investing activities
Purchase of equipment	(554,999)	(448,598)
Construction in process	(1,854,314)	0
Net cash used in investing activities	(2,409,313)	(448,598)
Cash flows from financing activities
Borrowing / (repayment) of debt	111,797	(509)
Repayment of capital lease	(117,329)	(40,866)
Proceeds from sale of common stock	0	1,737,826
Stock issuance costs	0	(77,537)
Proceeds from warrant exercise	1,673,182	0
Net cash provided by financing activities	1,667,650	1,618,914
Increase (decrease) in cash	(2,395,617)	47,656
Cash at the beginning of the period	4,393,299	1,153,941
Cash at end of the period	1,997,682	1,201,597
Supplemental disclosure of cash flow information
Interest paid during period	90,443	0
Taxes paid during period	0	0
Supplemental disclosure of non-cash items
Premium on Series AA Preferred conversion to common shares	2,243,410	0
Equipment purchased with capital lease	0	1,714,974
Equipment purchased with debt	0	20,000
Series AA Preferred Stock [Member] | Stock Issued for Convertible Note, Principal and Interest [Member]
Supplemental disclosure of non-cash items
Non-cash items, stock issued	0	1,171,375
Stock Issued for Acquisition [Member]
Supplemental disclosure of non-cash items
Non-cash items, stock issued	210,893	188,686
Stock Issued for Property, Plant and Equipment [Member]
Supplemental disclosure of non-cash items
Non-cash items, stock issued	0	40,000
Stock Issued for Capital Lease, Principal and Interest [Member]
Supplemental disclosure of non-cash items
Non-cash items, stock issued	0	65,800
Stock Issued for Convertible Note, Principal and Interest [Member]
Supplemental disclosure of non-cash items
Non-cash items, stock issued	$ 0	$ 470,000

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NOTE 5 - Options and Warrants (Details) (USD $)	6 Months Ended	0 Months Ended
	Jun. 30, 2014 Employee Stock Option [Member]	Jul. 01, 2014 Subsequent Event [Member]
NOTE 5 - Options and Warrants (Details) [Line Items]
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options (in Dollars)	$ 481,610
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition	3 years
Stock Issued During Period, Shares, Exercise of Warrants		6,268,628
Class of Warrants or Rights Exercised		6,268,628

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NOTE 5 - Options and Warrants (Details) - Schedule of Stockholders' Equity Note, Warrants or Rights (USD $)	6 Months Ended
	Jun. 30, 2014
Warrants for Shares [Member]
Class of Warrant or Right [Line Items]
Outstanding as of December 31, 2013	19,530,441
Granted	2,705,513
Exercised	0
Forfeited	0
Cancelled	0
Expired	0
Outstanding as of June 30, 2014 (Unaudited)	22,235,954
Weighted Average Exercise Price [Member]
Class of Warrant or Right [Line Items]
Outstanding as of December 31, 2013	$ 1.08
Granted	$ 1.00
Exercised	$ 0
Forfeited	$ 0
Cancelled	$ 0
Expired	$ 0
Outstanding as of June 30, 2014 (Unaudited)	$ 1.07

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NOTE 1 - Organization and Nature of Business

6 Months Ended

Jun. 30, 2014

Disclosure Text Block [Abstract]

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

NOTE 1 – Organization and Nature of Business

GlyEco, Inc. (the "Company", “we”, or “our”) is a green chemistry company that collects and recycles waste glycol into a reusable product that is sold to third party customers in the automotive and industrial end-markets. Our proprietary technology, GlyEco TechnologyTM, allows us to recycle all five major types of waste glycol into a virgin-quality product usable in any glycol application.  We are dedicated to conserving natural resources, limiting liability for waste generators, safeguarding the environment, and creating valuable green products.  We currently operate seven processing centers in the United States with our principal offices located in Phoenix, Arizona. Our processing centers are located in (1) Minneapolis, Minnesota, (2) Indianapolis, Indiana, (3) Lakeland, Florida, (4) Elizabeth, New Jersey, (5) Rock Hill, South Carolina, (6) Tea, South Dakota, and (7) Landover, Maryland.

Currently, the Company is actively acquiring operating entities involved in the recycling of waste ethylene glycol and is consolidating and streamlining their operations.

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Condensed Consolidated Balance Sheets (Parentheticals) (USD $)	Jun. 30, 2014	Dec. 31, 2013
Redeemable preferred stock, shares issued	0	0
Redeemable preferred stock, shares outstanding	0	0
Preferred stock, par value (in Dollars per share)	$ 0.0001	$ 0.0001
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 (in Dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares issued	51,992,009	48,834,916
Common stock, shares outstanding	51,992,009	48,834,916
Series AA Preferred Stock [Member]
Redeemable preferred stock, shares issued		2,342,740
Redeemable preferred stock, shares outstanding		2,342,740
Preferred stock; shares issued		2,342,740
Preferred stock; shares outstanding		2,342,740

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NOTE 5 - Options and Warrants (Tables)

6 Months Ended

Jun. 30, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of Stock Options Roll Forward [Table Text Block]

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

				Weighted
	Options for			Average
	Shares			Exercise Price
Outstanding as of December 31, 2013		10,133,506		$	0.74
Granted		537,172			0.75
Exercised		(146,250	)		0.77
Forfeited		-			-
Cancelled		-			-
Expired		-			-
Outstanding as of June 30, 2014 (unaudited)		10,524,428		$	0.74

Schedule of Stockholders' Equity Note, Warrants or Rights [Table Text Block]

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

			Weighted
	Warrants for		Average
	Shares		Exercise Price
Outstanding as of December 31, 2013		19,530,441	$	1.08
Granted		2,705,513		1.00
Exercised		-		-
Forfeited		-		-
Cancelled		-		-
Expired		-		-
Outstanding as of June 30, 2014 (Unaudited)		22,235,954	$	1.07

XML

Document And Entity Information	6 Months Ended
	Jun. 30, 2014	Aug. 14, 2014
Document and Entity Information [Abstract]
Entity Registrant Name	GlyEco, Inc.
Document Type	10-Q
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		58,190,649
Amendment Flag	false
Entity Central Index Key	0000931799
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Smaller Reporting Company
Entity Well-known Seasoned Issuer	No
Document Period End Date	Jun. 30, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q2

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NOTE 6 - Related Party Transactions (Tables)

6 Months Ended

Jun. 30, 2014

NOTE 6 - Related Party Transactions (Tables) [Line Items]

Schedule of Related Party Transactions [Table Text Block]

Related party transactions are included in cost of goods sold, consulting fees, general and administrative expenses, interest expense, and the capital lease obligation. Amount of related party transactions included in the condensed consolidated statements of operations are shown below.

	Three months ended June 30				Six months ended June 30,
	2014		2013		2014		2013
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Cost of goods sold		403,161		539,239		882,668		1,002,139
Operating expenses		58,325		71,998		96,958		114,690
Interest expense		45,466		46,840		87,916		82,834

Chief Executive Officer [Member]

NOTE 6 - Related Party Transactions (Tables) [Line Items]

Schedule of Related Party Transactions [Table Text Block]

The Chief Executive Officer purchased 156,000 shares in the offering that closed on February 15, 2013 at a price of $0.65 per share in consideration of monies owed to him by the Company.

	2014
Beginning balance as of December 31, 2013	$	114,434
Monies owed		7,679
Monies paid		(22,113	)
Ending balance as of June 30, 2014 (Unaudited)	$	100,000

Chief Business Development Officer [Member]

NOTE 6 - Related Party Transactions (Tables) [Line Items]

Schedule of Related Party Transactions [Table Text Block]

The Chief Business Development Officer is the sole owner of two corporations, CyberSecurity, Inc. and Market Tactics, Inc., which were paid for marketing consulting services provided to the Company.

	2014
Beginning balance as of December 31, 2013	$	16,058
Monies owed		53,698
Monies paid		(68,776	)
Ending balance as of June 30, 2014 (Unaudited)	$	980

Director [Member]

NOTE 6 - Related Party Transactions (Tables) [Line Items]

Schedule of Related Party Transactions [Table Text Block]

A Director of the Company is the counter party to consulting and non-compete contracts, as well as the sole owner of two corporations, Full Circle and NY Terminals with contracts with the Company. Full Circle is paid pursuant to lease and services agreements. NY Terminals is paid pursuant to a ground lease agreement.

	2014
Beginning balance as of December 31, 2013	$	426,052
Monies owed		1,046,494
Monies paid		(1,015,823	)
Ending balance as of June 30, 2014 (Unaudited)	$	456,723

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Condensed Consolidated Statements of Operations (unaudited) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Sales, net	$ 1,606,990	$ 1,417,473	$ 3,260,031	$ 2,650,140
Cost of goods sold	1,629,257	941,864	3,290,680	2,107,446
Gross profit	(22,267)	475,609	(30,649)	542,694
Operating expenses
Consulting fees	144,744	189,973	285,910	348,715
Stock-based compensation	238,758	0	711,532	0
Salaries and wages	243,579	191,040	515,154	348,557
Legal and professional	199,388	58,601	236,301	122,176
General and administrative	214,929	188,590	430,683	296,767
Total operating expenses	1,041,398	628,204	2,179,580	1,116,215
Loss from operations	(1,063,665)	(152,595)	(2,210,229)	(573,521)
Other (income) and expenses
Interest income	(66)	(429)	(644)	(957)
Interest expense	45,466	47,269	90,443	105,799
Total other income and expenses	45,400	46,840	89,799	104,842
Loss before provision for income taxes	(1,109,065)	(199,435)	(2,300,028)	(678,363)
Provision for income taxes	2,476	0	3,742	0
Net loss	(1,111,541)	(199,435)	(2,303,770)	(678,363)
Premium on Series AA Preferred conversion to common shares	0	0	2,243,410	0
Net loss available to common shareholders	$ (1,111,541)	$ (199,435)	$ (4,547,180)	$ (678,363)
Basic and diluted loss per share (in Dollars per share)	$ (0.02)	$ (0.01)	$ (0.09)	$ (0.02)
Weighted average number of common shares outstanding (basic and diluted) (in Shares)	51,906,725	39,481,793	50,707,479	40,564,341

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NOTE 6 - Related Party Transactions

6 Months Ended

Jun. 30, 2014

Related Party Transactions [Abstract]

Related Party Transactions Disclosure [Text Block]

NOTE 6 – Related Party Transactions

Related party transactions are included in cost of goods sold, consulting fees, general and administrative expenses, interest expense, and the capital lease obligation. Amount of related party transactions included in the condensed consolidated statements of operations are shown below.

	Three months ended June 30				Six months ended June 30,
	2014		2013		2014		2013
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Cost of goods sold		403,161		539,239		882,668		1,002,139
Operating expenses		58,325		71,998		96,958		114,690
Interest expense		45,466		46,840		87,916		82,834

Chief Executive Officer

The Chief Executive Officer purchased 156,000 shares in the offering that closed on February 15, 2013 at a price of $0.65 per share in consideration of monies owed to him by the Company.

	2014
Beginning balance as of December 31, 2013	$	114,434
Monies owed		7,679
Monies paid		(22,113	)
Ending balance as of June 30, 2014 (Unaudited)	$	100,000

Chief Business Development Officer

The Chief Business Development Officer is the sole owner of two corporations, CyberSecurity, Inc. and Market Tactics, Inc., which were paid for marketing consulting services provided to the Company.

	2014
Beginning balance as of December 31, 2013	$	16,058
Monies owed		53,698
Monies paid		(68,776	)
Ending balance as of June 30, 2014 (Unaudited)	$	980

Director

A Director of the Company is the counter party to consulting and non-compete contracts, as well as the sole owner of two corporations, Full Circle and NY Terminals with contracts with the Company. Full Circle is paid pursuant to lease and services agreements. NY Terminals is paid pursuant to a ground lease agreement.

	2014
Beginning balance as of December 31, 2013	$	426,052
Monies owed		1,046,494
Monies paid		(1,015,823	)
Ending balance as of June 30, 2014 (Unaudited)	$	456,723

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NOTE 5 - Options and Warrants

6 Months Ended

Jun. 30, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

NOTE 5 – Options and Warrants

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

				Weighted
	Options for			Average
	Shares			Exercise Price
Outstanding as of December 31, 2013		10,133,506		$	0.74
Granted		537,172			0.75
Exercised		(146,250	)		0.77
Forfeited		-			-
Cancelled		-			-
Expired		-			-
Outstanding as of June 30, 2014 (unaudited)		10,524,428		$	0.74

All options exercised were done so by means of a cashless exercise, whereby the Company received no cash and issued new shares.

We account for all stock-based payment awards made to employees and directors based on estimated fair values. We estimate the fair value of share-based payment awards on the date of grant using an option-pricing model and the value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service period, net of forfeitures. As of June 30, 2014, there were $481,610 of unrecognized compensation expenses related to share-based payment arrangements. These costs are expected to be recognized over a weighted-average period of approximately three years. The company has sufficient shares to satisfy expected share-based payment arrangements in 2014.

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

			Weighted
	Warrants for		Average
	Shares		Exercise Price
Outstanding as of December 31, 2013		19,530,441	$	1.08
Granted		2,705,513		1.00
Exercised		-		-
Forfeited		-		-
Cancelled		-		-
Expired		-		-
Outstanding as of June 30, 2014 (Unaudited)		22,235,954	$	1.07

On July 1, 2014, the Company issued 6,268,628 shares of common stock upon the exercise of 6,268,628 warrants.  Please see additional discussion of the warrant exercise in Note 8.

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NOTE 5 - Options and Warrants (Details) - Schedule of Stock Options Roll Forward (USD $)	6 Months Ended
	Jun. 30, 2014
Number of Options for Shares [Member]
NOTE 5 - Options and Warrants (Details) - Schedule of Stock Options Roll Forward [Line Items]
Outstanding as of December 31, 2013	10,133,506
Granted	537,172
Exercised	(146,250)
Forfeited	0
Cancelled	0
Expired	0
Outstanding as of June 30, 2014 (unaudited)	10,524,428
Weighted Average Exercise Price [Member]
NOTE 5 - Options and Warrants (Details) - Schedule of Stock Options Roll Forward [Line Items]
Outstanding as of December 31, 2013	$ 0.74
Granted	$ 0.75
Exercised	$ 0.77
Forfeited	$ 0
Cancelled	$ 0
Expired	$ 0
Outstanding as of June 30, 2014 (unaudited)	$ 0.74

XML

NOTE 3 - Inventory (Details) (USD $)	Jun. 30, 2014
Inventory Disclosure [Abstract]
Inventory, Gross	$ 506,077

XML

Accounting Policies, by Policy (Policies)

6 Months Ended

Jun. 30, 2014

Accounting Policies [Abstract]

Basis of Accounting, Policy [Policy Text Block]

Basis of Presentation

The condensed consolidated financial statements included herein have been prepared by us without audit, pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”) and should be read in conjunction with the audited financial statements for the year ended December 31, 2013. 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 consolidated financial statements reflect, in the opinion of management, all normal recurring adjustments necessary to present fairly our financial position at June 30, 2014, and the results of our operations and cash flows for the periods presented. We derived the December 31, 2013 condensed consolidated balance sheet data from audited financial statements, but do not include all disclosures required by GAAP.  Interim results are subject to seasonal variations and the results of operations for the three and six months ended June 30, 2014 and 2013, are not necessarily indicative of the results to be expected for the full year.

Liquidity Disclosure [Policy Text Block]

Going Concern

The condensed consolidated financial statements as of and for the three and six months ended June 30, 2014, and December 31, 2013 have been prepared assuming that the Company will continue as a going concern.  As of June 30, 2014, the Company has yet to achieve profitable operations and is dependent on its ability to raise capital from stockholders or other sources to sustain operations and to ultimately achieve viable operations. The condensed consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.

The Company’s plans to address these matters include, raising additional financing through offering its shares of capital stock in private and/or public offerings of its securities and through debt financing if available and needed. The Company plans to become profitable by upgrading the capacity and capabilities at its existing operating facilities, continuing to implement its patent-pending technology in international markets, and acquiring profitable glycol recycling companies, which are looking to take advantage of the Company’s public company status and improve their profitability through a combined synergy. The Company expects gross margins to increase as the costs associated with integration continue to decline and sales of our T1 material reached plan levels.

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NOTE 7- Commitments and Contingencies

6 Months Ended

Jun. 30, 2014

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure [Text Block]

NOTE 7 – Commitments and Contingencies

Litigation

The Company may be party to legal proceedings in the ordinary course of business.  The Company believes that the nature of these proceedings (collection actions, etc.) are typical for a Company of our size and scope of operations.  Currently, there are no pending legal proceedings.  The Company is aware of a potential claim that is at least reasonably possible of being asserted regarding a contract dispute with a firm retained to assist in the raising of capital.  The estimated range involved in this dispute is from $0 to $100,000.    Management believes this possible claim is without merit and intends to vigorously defend ourselves should a formal claim be made.

Environmental Matters

We are subject to federal, state, and local laws, regulations and ordinances relating to the protection of the environment, including those governing discharges to air and water, handling and disposal practices for solid and hazardous wastes, and occupational health and safety.  It is management’s opinion that the Company is not currently exposed to significant environmental remediation liabilities or asset retirement obligations as of June 30, 2014.  However, if a release of hazardous substances occur, or is found on one of our properties from prior activity, we may be subject to liability arising out of such conditions and the amount of such liability could be material.

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NOTE 8 - Subsequent Events

6 Months Ended

Jun. 30, 2014

Subsequent Events [Abstract]

Subsequent Events [Text Block]

NOTE 8 – Subsequent Events

Registration of Securities

On June 30, 2014, we began the process of registering approximately 37.2 million shares of our issued and outstanding shares that are currently restricted in accordance with Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”).  We will not receive any proceeds from the registration process and we are unable to determine when the registration process will be completed.

Warrant Exercises

On July 1, 2014, the Company issued 6,268,628 shares of common stock, par value $0.0001 per share, upon the exercise of 6,268,628 warrants.

The Company temporarily reduced the exercise price of all of its outstanding warrants to $0.50 per share for a period beginning on June 4, 2014, and ending on July 1, 2014 (the “Temporary Exercise Period”). During the Temporary Exercise Period, forty-six warrant holders exercised a total of 6,268,628 warrants and therefore purchased 6,268,628 shares of common stock in exchange for an aggregate purchase price of $3,134,314.  We received exercise funds of $1,673,182 prior to the exercise date and this amount was credit to additional paid in capital in the accompanying condensed consolidated balance sheet as of June 30, 2014.

The Company utilized the services of two FINRA registered placement agents during the Temporary Exercise Period. In connection with the warrant exercises, the Company paid an aggregate cash fee of approximately $60,869 to such placement agents. The net proceeds to the Company from the warrant exercises, after deducting the foregoing cash fee, were approximately $3,073,445.

The securities issued in connection with the warrant exercises have not been registered under the Securities Act, and were made pursuant to the exemptions from registration provided by Section 4(2) of the Securities Act or Rule 506 of Regulation D promulgated thereunder. The securities are therefore restricted in accordance with Rule 144 under the Securities Act.

Consulting Agreement with Richard Geib

On August 4, 2014, the Company entered into a Consulting Agreement (the “Consulting Agreement”) with the Company’s Chief Technical Officer, Richard Geib.

The Consulting Agreement supersedes the terms of the Consulting Agreement previously entered into between Global Recycling Technologies, Ltd., a Delaware corporation (“Global Recycling”), and Mr. Geib on May 3, 2010, which the Company assumed upon the consummation of a reverse triangular merger with Global Recycling on November 28, 2011.

The Consulting Agreement is for a term of two years and may be extended for additional one-year terms by written agreement. Pursuant to the Consulting Agreement, Mr. Geib will assist in the further development and implementation of the Company’s proprietary technology for recycling glycol, the GlyEco TechnologyTM, and perform such other duties as requested by the Company’s Chief Executive Officer.

In consideration for his services during the term, the Company will compensate Mr. Geib with an initial engagement fee of $50,000, a monthly consulting fee of $12,500 per month for the first year of the term, a to be determined monthly consulting fee for the second year of the term, and a total of 2,700,000 warrants to purchase shares of GlyEco common stock, par value $0.0001 per share, at an exercise price of $0.73 per share, of which half shall vest immediately and the remaining amount shall vest on August 4, 2015.

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NOTE 3 - Inventory (Tables)

6 Months Ended

Jun. 30, 2014

Inventory Disclosure [Abstract]

Schedule of Inventory, Current [Table Text Block]

As of June 30, 2014, the Company’s total inventories were $506,077.

June 30,	2014
Raw materials	$	181,194
Work in process		119,474
Finished goods		205,409
Total inventories (unaudited)	$	506,077

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NOTE 4 - Income Taxes (Details) (USD $)			6 Months Ended
	Jun. 30, 2014	Dec. 31, 2013	Jun. 30, 2014 Minimum [Member]	Jun. 30, 2014 Maximum [Member]
NOTE 4 - Income Taxes (Details) [Line Items]
Operating Loss Carryforwards	$ 11,480,000
Operating Loss Carryforwards, Expiration Date, Year			2028	2033
Deferred Tax Assets, Net of Valuation Allowance	$ 0	$ 0

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NOTE 6 - Related Party Transactions (Details) - Schedule of Related Party Transactions (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Schedule of Related Party Transactions [Abstract]
Cost of goods sold	$ 403,161	$ 539,239	$ 882,668	$ 1,002,139
Operating expenses	58,325	71,998	96,958	114,690
Interest expense	$ 45,466	$ 46,840	$ 87,916	$ 82,834

XML

Unaudited Condensed Consolidated Statements of Stockholders' Equity (USD $)	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Total
Balance, December 31, 2013 at Dec. 31, 2013	$ 4,884	$ 24,541,809	$ (13,366,334)	$ 11,180,359
Balance, December 31, 2013 (in Shares) at Dec. 31, 2013	48,834,916			48,834,916
Common shares for acquisition	20	210,873		210,893
Common shares for acquisition (in Shares)	204,750
Common shares for note conversion	261	3,414,524		3,414,785
Common shares for note conversion (in Shares)	2,605,513
Warrants and options exercised	7	1,673,175		1,673,182
Warrants and options exercised (in Shares)	72,141
Share-based compensation	20	711,512		711,532
Share-based compensation (in Shares)	204,689
Premium on Series AA Preferred conversion to common shares			(2,243,410)	(2,243,410)
Net loss			(2,303,770)	(2,303,770)
Balance, June 30, 2014 at Jun. 30, 2014	$ 5,192	$ 30,551,893	$ (17,913,514)	$ 12,643,571
Balance, June 30, 2014 (in Shares) at Jun. 30, 2014	51,922,009			51,992,009

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NOTE 4 - Income Taxes

6 Months Ended

Jun. 30, 2014

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

NOTE 4 – Income Taxes

As of June 30, 2014, the Company had a net operating loss (NOL) carryforwards of approximately $11,480,000 adjusted for stock based compensation and certain other non-deductible items available to reduce future taxable income, if any. The NOL carryforward begins to expire in 2028, and fully expire in 2033. Because management is unable to determine that it is more likely than not that the Company will realize the tax benefit related to the NOL carryforward, by having taxable income, a valuation allowance has been established as of June 30, 2014 and December 31, 2013 to reduce the tax benefit asset value to zero.

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NOTE 6 - Related Party Transactions (Details) - Schedule of Related Party Transactions - Chief Executive Officer (USD $)			6 Months Ended
	Jun. 30, 2014	Dec. 31, 2013	Jun. 30, 2014 Chief Executive Officer [Member]
Related Party Transaction [Line Items]
Beginning balance as of December 31, 2013	$ 557,703	$ 582,682	$ 114,434
Monies owed			7,679
Monies paid			(22,113)
Ending balance as of June 30, 2014 (Unaudited)	$ 557,703	$ 582,682	$ 100,000

XML

NOTE 3 - Inventory (Details) - Schedule of Inventory (USD $)	Jun. 30, 2014
Schedule of Inventory [Abstract]
Raw materials	$ 181,194
Work in process	119,474
Finished goods	205,409
Total inventories (unaudited)	$ 506,077