Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | May 15, 2020 | |
Document And Entity Information | ||
Entity Registrant Name | FLEXIBLE SOLUTIONS INTERNATIONAL INC | |
Entity Central Index Key | 0001069394 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2020 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 12,240,545 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2020 |
Condensed Interim Consolidated
Condensed Interim Consolidated Balance Sheets (Unaudited) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Current | ||
Cash and cash equivalents | $ 3,412,265 | $ 3,634,670 |
Accounts receivable (Note 4) | 7,672,471 | 4,470,215 |
Inventories (Note 5) | 8,902,873 | 9,182,786 |
Prepaid expenses | 302,242 | 218,638 |
Total current assets | 20,289,851 | 17,506,309 |
Property, equipment and leaseholds, net (Note 6) | 3,986,428 | 4,005,676 |
Right of use assets | 705,658 | 789,205 |
Patents (Note 7) | 42,466 | 46,576 |
Intangible assets (Note 8) | 2,908,000 | 2,952,000 |
Long term deposits (Note 9) | 8,540 | 30,630 |
Investments (Note 10) | 2,799,204 | 1,915,585 |
Goodwill (Note 8) | 2,534,275 | 2,534,275 |
Restricted cash (Note 10e) | 1,000,000 | |
Deferred tax asset | 1,545,172 | 1,600,161 |
Total Assets | 34,819,594 | 32,380,417 |
Current | ||
Accounts payable | 965,989 | 636,260 |
Accrued liabilities | 388,062 | 181,234 |
Deferred revenue | 119,511 | 213,221 |
Income taxes payable | 1,741,067 | 1,770,105 |
Short term line of credit (Note 11) | 3,555,832 | 2,389,982 |
Current portion of lease liability (Note 3) | 393,959 | 405,670 |
Current portion of long term debt (Note 12) | 1,197,186 | 1,196,722 |
Total current liabilities | 8,361,606 | 6,793,194 |
Convertible note payable (Note 13) | 500,000 | 500,000 |
Lease liabilities (Note 3) | 311,699 | 383,535 |
Deferred income tax liability | 1,058,641 | 1,058,641 |
Long term debt (Note 12) | 2,982,180 | 3,183,671 |
Total liabilities | 13,214,126 | 11,919,041 |
Stockholders' Equity | ||
Capital stock (see Note 15) Authorized 50,000,000 common shares with a par value of $0.001 each 1,000,000 preferred shares with a par value of $0.01 each Issued and outstanding: 12,240,545 (December 31, 2019: 12,215,545) common shares | 12,241 | 12,216 |
Capital in excess of par value | 16,491,780 | 16,437,473 |
Other comprehensive loss | (1,093,538) | (994,610) |
Accumulated earnings | 3,720,823 | 2,456,148 |
Total stockholders' equity - controlling interest | 19,130,306 | 17,911,227 |
Non-controlling interests (Note 16) | 2,474,162 | 2,550,149 |
Total Stockholders' Equity | 21,605,468 | 20,461,376 |
Total Liabilities and Stockholders' Equity | $ 34,819,594 | $ 32,380,417 |
Condensed Interim Consolidate_2
Condensed Interim Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares issued | 12,240,545 | 12,215,545 |
Common stock, shares outstanding | 12,240,545 | 12,215,545 |
Condensed Interim Consolidate_3
Condensed Interim Consolidated Statements of Income and Comprehensive Income (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Statement [Abstract] | ||
Sales | $ 8,429,486 | $ 8,471,476 |
Cost of sales | 5,479,947 | 5,695,889 |
Gross profit | 2,949,539 | 2,775,587 |
Operating Expenses | ||
Wages | 535,433 | 530,677 |
Administrative salaries and benefits | 204,543 | 265,092 |
Advertising and promotion | 65,621 | 52,706 |
Investor relations and transfer agent fee | 18,624 | 16,450 |
Office and miscellaneous | 39,392 | 46,882 |
Insurance | 131,569 | 102,735 |
Interest expense | 101,425 | 129,007 |
Lease expense | 118,468 | 114,452 |
Consulting | 67,311 | 64,779 |
Professional fees | 51,053 | 158,770 |
Travel | 55,362 | 96,284 |
Telecommunications | 11,876 | 11,028 |
Shipping | 4,613 | 4,471 |
Research | 28,578 | 20,086 |
Commissions | 2,358 | 19,757 |
Currency exchange | (57,727) | 92,064 |
Utilities | 4,305 | 3,756 |
Total operating expenses | 1,382,804 | 1,728,996 |
Operating income | 1,566,735 | 1,046,591 |
Gain on investment | 199,529 | 230,652 |
Interest income | 414 | 16,252 |
Income before income tax | 1,766,678 | 1,293,495 |
Income taxes | ||
Deferred income tax recovery | 125,999 | |
Income tax expense | (434,988) | (379,080) |
Net income for the period including non-controlling interests | 1,331,690 | 1,040,414 |
Less: Net income attributable to non-controlling interests | (67,015) | (29,264) |
Net income attributable to controlling interest | $ 1,264,675 | $ 1,011,150 |
Income per share (basic and diluted) | $ 0.10 | $ 0.09 |
Weighted average number of common shares (basic) | 12,237,798 | 11,705,613 |
Weighted average number of common shares (diluted) | 12,300,896 | 11,816,585 |
Other comprehensive income (loss): | ||
Net income | $ 1,331,690 | $ 1,040,414 |
Unrealized (loss) gain on foreign currency translations | (98,928) | 182,293 |
Total comprehensive income | 1,232,762 | 1,222,707 |
Comprehensive income - non-controlling interest | (67,015) | (29,264) |
Comprehensive income attributable to Flexible Solutions International Inc. | $ 1,165,747 | $ 1,193,443 |
Condensed Interim Consolidate_4
Condensed Interim Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Operating activities | ||
Net income for the period including non-controlling interests | $ 1,331,690 | $ 1,040,414 |
Adjustments to reconcile net income to net cash: | ||
Stock based compensation | 29,582 | 5,747 |
Depreciation and amortization | 148,058 | 148,279 |
Gain on investment | (140,182) | (230,652) |
Changes in non-cash working capital items: | ||
(Increase) Decrease in accounts receivable | (3,192,845) | (3,222,431) |
(Increase) Decrease in inventories | 235,397 | (8,764) |
(Increase) Decrease in prepaid expenses | (85,116) | (92,199) |
Increase (Decrease) in accounts payable and accrued liabilities | 444,898 | 403,062 |
Increase (Decrease) in taxes payable | (29,038) | 379,080 |
Increase (Decrease) in deferred income tax | (125,999) | |
Increase (Decrease) deferred revenue | 2,560 | 9,276 |
Cash used in operating activities | (1,254,996) | (1,694,187) |
Investing activities | ||
Long term deposit | 22,084 | |
Investment | (743,437) | (996,001) |
Net purchase of property, equipment and leaseholds | (96,280) | (1,275,835) |
Cash used in investing activities | (817,633) | (2,271,836) |
Financing activities | ||
Draw from short term line of credit | 1,165,850 | 1,383,929 |
Loans | (201,027) | (205,262) |
Dividends paid | (590,483) | |
Partnership distributions | (143,002) | |
Proceeds from issuance of common stock | 24,750 | 10,850 |
Cash provided by financing activities | 846,571 | 599,034 |
Effect of exchange rate changes on cash | 3,653 | 204,986 |
Outflow of cash | (1,222,405) | (3,162,003) |
Cash, cash equivalents and restricted cash, beginning | 4,634,670 | 7,857,936 |
Cash, cash equivalents and restricted cash, ending | 3,412,265 | 4,695,933 |
Cash, cash equivalents and restricted cash are comprised of: | ||
Cash and cash equivalents | 3,412,265 | 3,695,933 |
Restricted cash | 1,000,000 | |
Total Cash, cash equivalents and Restricted cash | 3,412,265 | 4,695,933 |
Supplemental disclosure of cash flow information: | ||
Income taxes paid | 464,026 | |
Interest paid | $ 101,245 | $ 108,084 |
Condensed Interim Consolidate_5
Condensed Interim Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) | Capital Stock [Member] | Capital in Excess of Par Value [Member] | Accumulated Earnings (Deficiency) [Member] | Other Comprehensive Income (Loss) [Member] | Total | Non-Controlling Interests [Member] | Total Stockholders' Equity [Member] |
Beginning balance at Dec. 31, 2018 | $ 11,700 | $ 15,328,285 | $ 2,941,889 | $ (1,222,573) | $ 17,059,301 | $ 2,462,231 | $ 19,521,532 |
Beginning balance, shares at Dec. 31, 2018 | 11,699,657 | ||||||
Translation adjustment | 182,293 | 182,293 | 182,293 | ||||
Net income | 1,011,150 | 1,011,150 | 29,264 | 1,040,414 | |||
Common stock issued | $ 12 | 10,838 | 10,850 | 10,850 | |||
Common stock issued, shares | 12,000 | ||||||
Dividends paid | (590,483) | (590,483) | (590,483) | ||||
Stock-based compensation | 5,747 | 5,747 | 5,747 | ||||
Ending balance at Mar. 31, 2019 | $ 11,712 | 15,344,870 | 3,362,556 | (1,040,280) | 17,678,858 | 2,491,495 | 20,170,353 |
Ending balance, shares at Mar. 31, 2019 | 11,711,657 | ||||||
Beginning balance at Dec. 31, 2019 | $ 12,216 | 16,437,473 | 2,456,148 | (994,610) | 17,911,227 | 2,550,149 | 20,461,376 |
Beginning balance, shares at Dec. 31, 2019 | 12,215,545 | ||||||
Translation adjustment | (98,928) | (98,928) | (98,928) | ||||
Net income | 1,264,675 | 1,264,675 | 67,015 | 1,331,690 | |||
Common stock issued | $ 25 | 24,725 | 24,750 | 24,750 | |||
Common stock issued, shares | 25,000 | ||||||
Stock-based compensation | 29,582 | 29,582 | 29,582 | ||||
Distributions to noncontrolling interests | (143,002) | (143,002) | |||||
Ending balance at Mar. 31, 2020 | $ 12,241 | $ 16,491,780 | $ 3,720,823 | $ (1,093,538) | $ 19,130,306 | $ 2,474,162 | $ 21,605,468 |
Ending balance, shares at Mar. 31, 2020 | 12,240,545 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | 1. Basis of Presentation . These consolidated financial statements include the accounts of Flexible Solutions International, Inc. (the “Company”), its wholly-owned subsidiaries Flexible Fermentation Ltd. (“Flexible Ltd.”), NanoChem Solutions Inc. (“NanoChem”), Flexible Solutions Ltd., Flexible Biomass LP, FS Biomass Inc., NCS Deferred Corp., Conserve H2O Ltd., Natural Chem SEZC Ltd., and InnFlexHoldings Inc. and its 65% interest in EnP Investments, LLC (“ENP Investments”). All inter-company balances and transactions have been eliminated. The Company was incorporated May 12, 1998 in the State of Nevada and had no operations until June 30, 1998. In 2019, the Company redomiciled into Alberta, Canada. In 2018, NanoChem, a wholly-owned subsidiary of the Company, completed the purchase of 65% interest in EnP Investments for an aggregate purchase price of $5,110,560. An unrelated party owns the remaining 35% interest in EnP Investments, and EnP Investments is consolidated into the financial statements. The outside investor’s ownership interest in EnP Investments is included in noncontrolling interests in these consolidated financial statements from the acquisition date onward. The Company and its subsidiaries develop, manufacture and market specialty chemicals which slow the evaporation of water. One product, HEATSAVR®, is marketed for use in swimming pools and spas where its use, by slowing the evaporation of water, allows the water to retain a higher temperature for a longer period of time and thereby reduces the energy required to maintain the desired temperature of the water in the pool. Another product, WATERSAVR®, is marketed for water conservation in irrigation canals, aquaculture, and reservoirs where its use slows water loss due to evaporation. In addition to the water conservation products, the Company also manufactures and markets water-soluble chemicals utilizing thermal polyaspartate biopolymers (hereinafter referred to as “TPAs”), which are beta-proteins manufactured from the common biological amino acid, L-aspartic. TPAs can be formulated to prevent corrosion and scaling in water piping within the petroleum, chemical, utility and mining industries. TPAs are also used as proteins to enhance fertilizers in improving crop yields and can be used as additives for household laundry detergents, consumer care products and pesticides. The TPA division also manufactures two nitrogen conservation products for agriculture that slows nitrogen loss from fields. These unaudited interim condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States for interim financial statements. These unaudited interim financial statements are condensed and do not include all disclosures required for annual financial statements. The organization and business of the Company, accounting policies followed by the Company and other information are contained in the notes to the Company’s audited consolidated financial statements filed as part of the Company’s December 31, 2019 Annual Report on Form 10-K. This quarterly report should be read in conjunction with such annual report. In the opinion of the Company’s management, these unaudited interim condensed consolidated financial statements reflect all adjustments, all of which are of normal recurring nature, necessary to present fairly the Company’s consolidated financial position at March 31, 2020, the consolidated results of operations for the three months ended March 31, 2020 and 2019, and the consolidated statements of cash flows for the three months ended March 31, 2020 and 2019. The results of operations for the three months ended March 31, 2020 are not necessarily indicative of the results to be expected for the entire fiscal year. |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | 2. Significant Accounting Policies. These consolidated financial statements have been prepared on a historical cost basis, except where otherwise noted, in accordance with accounting principles generally accepted in the United States applicable to a going concern and reflect the policies outlined below. (a) Cash and Cash Equivalents The Company considers all highly liquid investments purchased with an original or remaining maturity of less than three months at the date of purchase to be cash equivalents. Cash and cash equivalents are maintained with several financial institutions. (b) Inventories and Cost of Sales The Company has three major classes of inventory: completed goods, work in progress and raw materials and supplies. In all classes, inventories are stated at the lower of cost and net realizable value. Cost is determined on a first-in, first-out basis. Cost of sales includes all expenditures incurred in bringing the goods to the point of sale. Inventory costs and costs of sales include direct costs of the raw material, inbound freight charges, warehousing costs, handling costs (receiving and purchasing) and utilities and overhead expenses related to the Company’s manufacturing and processing facilities. Shipping and handling charges billed to customers are included in revenue (2020 - $162,905; 2019 – $165,592). Shipping and handling costs incurred are included in cost of goods sold (2020 - $290,748; 2019 – $347,960). (c) Allowance for Doubtful Accounts The Company provides an allowance for doubtful accounts when management estimates collectability to be uncertain. Accounts receivable are continually reviewed to determine which, if any, accounts are doubtful of collection. In making the determination of the appropriate allowance amount, the Company considers current economic and industry conditions, relationships with each significant customer, overall customer credit-worthiness and historical experience. (d) Property, Equipment, Leaseholds and Intangible Assets. The following assets are recorded at cost and depreciated using the methods and annual rates shown below: Computer hardware 30% Declining balance Furniture and fixtures 20% Declining balance Manufacturing equipment 20% Declining balance Office equipment 20% Declining balance Boat 20% Declining balance Building and improvements 10% Declining balance Trailer 30% Declining balance Automobile Straight-line over 5 years Patents Straight-line over 17 years Technology Straight-line over 10 years Right of Use Asset Straight-line over lease term Leasehold improvements Straight-line over lease term Property and equipment are written down to net realizable value when management determines there has been a change in circumstances which indicates their carrying amounts may not be recoverable. No write-downs have been necessary to date. (e) Impairment of Long-Lived Assets In accordance with FASB Codification Topic 360, “Property, Plant and Equipment (ASC 360), the Company reviews long-lived assets, including, but not limited to, property, equipment and leaseholds, patents and other assets, for impairment annually or whenever events or changes in circumstances indicate the carrying amounts of assets may not be recoverable. The carrying value of long-lived assets is assessed for impairment by evaluating operating performance and future undiscounted cash flows of the underlying assets. If the expected future cash flows of an asset is less than its carrying value, an impairment measurement is indicated. Impairment charges are recorded to the extent that an asset’s carrying value exceeds its fair value. Accordingly, actual results could vary significantly from such estimates. There were no impairment charges during the periods presented. (f) Foreign Currency The functional currency of the Company is the U.S. dollar. The functional currency of three of the Company’s subsidiaries is the Canadian Dollar. The translation of the Canadian Dollar to the reporting currency of the Company, the U.S. Dollar, is performed for assets and liabilities using exchange rates in effect at the balance sheet date. Revenue and expense transactions are translated using average exchange rates prevailing during the year. Translation adjustments arising on conversion of the Company’s financial statements from the subsidiary’s functional currency, Canadian Dollars, into the reporting currency, U.S. Dollars, are excluded from the determination of income (loss) and are disclosed as other comprehensive income in the consolidated statements of income and comprehensive income. Foreign exchange gains and losses relating to transactions not denominated in the applicable local currency are included in operating income (loss) if realized during the year and in comprehensive income (loss) if they remain unrealized at the end of the year. (g) Revenue Recognition We follow a five-step model for revenue recognition. The five steps are: (1) identification of the contract(s) with the customer, (2) identification of the performance obligation(s) in the contract(s), (3) determination of the transaction price, (4) allocation of the transaction price to the performance obligation, and (5) recognition of revenue when (or as) the performance obligation is satisfied. We have fulfilled our performance obligations when control transfers to the customer, which is generally at the time the product is shipped since risk of loss is transferred to the purchaser upon delivery to the carrier. For shipments which are F.O.B. shipping point, the Company has elected to account for shipping and handling activities as a fulfillment cost rather than as an additional promised service and performance obligation. The Company recognizes revenue when there are no significant remaining performance obligations. When significant post-delivery obligations exist, revenue is deferred until such obligations are fulfilled. To date, there have been no such significant post-delivery obligations. Since the Company’s inception, product returns have been insignificant; therefore, no provision has been established for estimated product returns. Deferred revenues consist of products sold to distributors with payment terms greater than the Company’s customary business terms due to lack of credit history or operating in a new market in which the Company has no prior experience. The Company defers the recognition of revenue until the criteria for revenue recognition has been met, and payments become due or cash is received from these distributors. (h) Stock Issued in Exchange for Services The Company’s common stock issued in exchange for services is valued at estimated fair market value based upon trading prices of the Company’s common stock on the dates of the stock transactions. The corresponding expense of the services rendered is recognized over the period that the services are performed. (i) Stock-based Compensation The Company recognizes compensation expense for all share-based payments in accordance with FASB Codification Topic 718, Compensation — Stock Compensation The fair value at grant date of stock options is estimated using the Black-Scholes option-pricing model. Compensation expense is recognized on a straight-line basis over the stock option vesting period based on the estimated number of stock options that are expected to vest. Shares are issued from treasury upon exercise of stock options. (j) Other Comprehensive Income Other comprehensive income refers to revenues, expenses, gains and losses that under generally accepted accounting principles are included in comprehensive income, but are excluded from net income as these amounts are recorded directly as an adjustment to stockholders’ equity. The Company’s other comprehensive income is comprised only of unrealized foreign exchange gains and losses. (k) Income Per Share Basic earnings per share is computed by dividing income available to common stockholders by the weighted average number of common shares outstanding in the period. Diluted earnings per share are calculated giving effect to the potential dilution of the exercise of options and warrants. Common equivalent shares, composed of incremental common shares issuable upon the exercise of stock options and warrants are included in diluted net income per share to the extent that these shares are dilutive. Common equivalent shares that have an anti-dilutive effect on net income per share have been excluded from the calculation of diluted weighted average shares outstanding for the three months ended March 31, 2020 and 2019. (l) Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and would impact the results of operations and cash flows. Estimates and underlying assumptions are reviewed at each period end. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected. Significant areas requiring the use of management estimates include assumptions and estimates relating to the valuation of goodwill and intangible assets, asset impairment analysis, share-based payments and warrants, valuation allowances for deferred income tax assets, determination of useful lives of property, equipment and leaseholds and intangible assets, and the valuation of inventory. (m) Financial Instruments The fair market value of the Company’s financial instruments comprising cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities, and short term line of credit were estimated to approximate their carrying values due to immediate or short-term maturity of these financial instruments. (n) Fair Value of Financial Instruments Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair value hierarchy based on three levels of inputs described below, of which the first two are considered observable and the last unobservable, that may be used to measure fair value. ● Level 1 – Quoted prices in active markets for identical assets or liabilities ● Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. ● Level 3 — Unobservable inputs that are supported by little or no market activity which is significant to the fair value of the assets or liabilities. The fair values of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities and the short term line of credit for all periods presented approximate their respective carrying amounts due to the short term nature of these financial instruments. (o) Contingencies Certain conditions may exist as of the date the financial statements are issued which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company’s management and its legal counsel assess such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company’s legal counsel evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potential material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Legal fees associated with loss contingencies are expensed as incurred. (p) Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the expected future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred tax assets are reduced by a valuation allowance so that the assets are recognized only to the extent that when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will be realized. Per FASB ASC 740 “Income taxes” under the liability method it is the Company’s policy to provide for uncertain tax positions and the related interest and penalties based upon management’s assessment of whether a tax benefit is more likely than not to be sustained upon examination by tax authorities. At December 31, 2018, the Company believes it has appropriately accounted for any unrecognized tax benefits. To the extent the Company prevails in matters for which a liability for an unrecognized benefit is established or is required to pay amounts in excess of the liability, the Company’s effective tax rate in a given financial statement period may be affected. Interest and penalties associated with the Company’s tax positions are recorded as interest expense in the consolidated statements of income and comprehensive income. (q) Risk Management. The Company’s credit risk is primarily attributable to its accounts receivable. The amounts presented in the accompanying consolidated balance sheets are net of allowances for doubtful accounts, estimated by the Company’s management based on prior experience and the current economic environment. The Company is exposed to credit-related losses in the event of non-payment by customers. Credit exposure is minimized by dealing with only credit worthy counterparties. Accounts receivable for the Company’s three primary customers totaled $3,650,830 (48%) at March 31, 2020 (December 31, 2019 - $2,707,825 or 61%). The credit risk on cash and cash equivalents is limited because the Company limits its exposure to credit loss by placing its cash and cash equivalents with major financial institutions. The Company maintains cash balances at financial institutions which at times exceed federally insured amounts. The Company has not experienced any material losses in such accounts. The Company is exposed to foreign exchange and interest rate risk to the extent that market value rate fluctuations materially differ from financial assets and liabilities, subject to fixed long-term rates. In order to manage its exposure to foreign exchange risks, the Company is closely monitoring the fluctuations in the foreign currency exchange rates and the impact on the value of cash and cash equivalents, accounts receivable, and accounts payable and accrued liabilities. The Company has not hedged its exposure to currency fluctuations. (r) Equity Method Investment The Company accounts for investments using the equity method of accounting if the investment provides the Company the ability to exercise significant influence, but not control, over the investee. Significant influence is generally deemed to exist if the Company’s ownership interest in the voting stock of the investee ranges between 20% and 50%, although other factors, such as representation on the investee’s board of directors, are considered in determining whether the equity method of accounting is appropriate. Under the equity method of accounting, the investment is recorded at cost in the consolidated balance sheets under other assets and adjusted for dividends received and the Company’s share of the investee’s earnings or losses together with other-than-temporary impairments which are recorded through interest and other loss, net in the consolidated statements of income and comprehensive income. (s) Goodwill and intangible assets Goodwill represents the excess of the purchase price of an acquired entity over the amounts assigned to the assets acquired and liabilities assumed. Goodwill is not amortized, but is reviewed for impairment annually or more frequently if certain impairment conditions arise. The Company performs an annual goodwill impairment review in the fourth quarter of each year at the reporting unit level. The evaluation begins with a qualitative assessment of the factors that could impact the significant inputs used to estimate fair value. If after performing the qualitative assessment, it is determined likely that the fair value of a reporting unit is more than its carrying amount, including goodwill, then no further analysis is necessary. However, if the results of the qualitative test are unclear, the Company performs a quantitative test, which involves comparing the fair value of a reporting unit with its carrying amount, including goodwill. The Company uses an income-based valuation method, determining the present value of future cash flows, to estimate the fair value of a reporting unit. If the fair value of a reporting unit exceeds its positive carrying amount, goodwill of the reporting unit is considered not impaired, and no further analysis is necessary. If the fair value of the reporting unit is less than its carrying amount, goodwill impairment would be recognized equal to the amount of the carrying value in excess of the reporting unit’s fair value, limited to the total amount of goodwill allocated to the reporting unit. Intangible assets primarily include trademarks and trade secrets with indefinite lives and customer-relationships with finite lives. Intangible assets with indefinite lives are not amortized but are tested for impairment on an annual basis, or more frequently if indicators of impairment are present. Indefinite lived intangible assets are assessed using either a qualitative or a quantitative approach. The qualitative assessment evaluates factors including macro-economic conditions, industry and company-specific factors, legal and regulatory environments, and historical company performance in assessing fair value. If it is determined the fair value of the reporting unit is less than its carrying value, a quantitative test is then performed. When using a quantitative approach, the Company compares the fair value of the reporting unit to its carrying amount, including goodwill. If the estimated fair value of the reporting unit is less than the carrying amount of the reporting unit, impairment is indicated, requiring recognition of an impairment charge for the differential. Qualitative assessments of goodwill and indefinite-lived intangible assets were performed in 2019 and 2018. Based on the results of assessment, it was determined that it is more likely than not the reporting unit, customer lists and trademarks had a fair value in excess of carrying value. Accordingly, no further impairment testing was completed and no impairment charges related to goodwill or indefinite-lived intangibles were recognized during the three months ended March 31, 2020. Finite-lived intangible assets are amortized on a straight-line basis over their estimated useful lives. The Company reviews for impairment indicators of finite-lived intangibles and other long-lived assets as described in the “Property and Equipment” significant accounting policy. (t) Adoption of new accounting principles In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASC 842 which requires lessees to recognize a right-of-use (“ROU”) asset and lease liability on the balance sheet for virtually all leases. From a lessee perspective, ASC 842 retains a dual model requiring leases to be classified as either operating or finance leases for the income statement. Operating leases will result in straight-line expense, and financing leases will have a front-loaded expense pattern with an interest expense component. On January 1, 2019, the Company adopted ASC 842 and all related amendments using the prospective transition approach. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. Adoption of the new standard resulted in the recording of lease ROU assets and lease liabilities of approximately $819,079 as of January 1, 2019. In accordance with ASC 842, the Company determines if an arrangement is a lease at inception based on whether there is an identified asset, whether the Company has the right to obtain substantially all of the economic benefits from the use of the asset and whether the Company has the right to direct the use of the asset. Currently, the Company only has operating leases and does not have any financing leases. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. See note 3, Leases, for further disclosures and detail regarding our operating leases. In November 2016, the FASB issued ASU2016-18 “Statement of Cash Flows” (Topic230); Restricted Cash (ASU2016-18), which defines new requirements for the presentation of restricted cash and restricted cash equivalents in the statement of cash flows. The amendments in this ASU require retrospective application to each period presented. The Company adopted this guidance effective January 1, 2018 retrospectively. This ASU requires entities to present the statement of cash flows in a manner such that it reconciles beginning and ending totals of cash, cash equivalents, restricted cash or restricted cash equivalents. Also, when cash, cash equivalents, restricted cash or restricted cash equivalents are presented in more than one line item within the statement of financial position, an entity should, for each period that a statement of financial position is presented, present on the face of the statement of cash flows or disclose in the notes to the financial statements, the line items and amounts of cash, cash equivalents, and restricted cash or restricted cash equivalents reported within the statement of financial position. The amounts, disaggregated by the line item in which they appear within the statement of financial position, shall sum to the total amount of cash, cash equivalents, and restricted cash or restricted cash equivalents at the end of the corresponding period shown in the statement of cash flows. (u) Recent Accounting Pronouncements The Company has implemented all applicable new accounting pronouncements that are in effect. Those pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations. |
Adoption of ASC 842, Leases
Adoption of ASC 842, Leases | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Adoption of ASC 842, Leases | 3. Adoption of ASC 942, Leases On January 1, 2019, the Company adopted ASC 842 using the prospective transition approach, which applies the provisions of the new guidance at the effective date without adjusting the comparative periods presented. The adoption of the lease standard did not result in a cumulative-effect adjustment to opening equity. Results for reporting periods beginning after January 1, 2019 are presented under ASC 842 while prior period amounts are not adjusted and continue to be reported in accordance with the Company’s historic accounting under ASC 840, “Leases,” (“ASC 840”). The Company leases office space. For leases with terms greater than 12 months, the Company records the related ROU asset and lease obligation at the present value of lease payments over the term. Leases may include fixed rental escalation clauses, renewal options and / or termination options that are factored into the determination of lease payments when appropriate. The Company’s leases do not usually provide a readily determinable implicit rate; therefore, an estimate of the Company’s incremental borrowing rate is used to discount the lease payments based on information available at the lease commencement date. The discount rate used was 5.5%. Operating lease costs during the three months ended March 31, 2020 were $101,079 (2019 - $99,908). The adoption of ASC 842 resulted in the recognition of right-of-use (“ROU”) assets and lease liabilities of approximately $819,079 as of January 1, 2019. The standard did not materially impact the Company’s consolidated statement of operations or its consolidated statement of cash flows for the three months ended March 31, 2020. See below for the Company’s updated lease policy and the required disclosures under ASC 842. The Company is a lessee in five different leases that have various expiry dates within the next 5 years. The table below summarizes the remaining expected lease payments under our operating leases as of March 31, 2020. Future Lease Payments March 31, 2020 2020 $ 304,591 2021 313,496 2022 93,155 2023 70,925 Thereafter - Less: imputed interest (76,509 ) Present value of operating lease liabilities $ 705,658 Update to Lease Policy Accounting and reporting guidance for leases requires that leases be evaluated and classified as either operating or finance leases by the lessee and as either operating, sales-type or direct financing leases by the lessor. The Company’s operating leases are included in ROU assets, lease liabilities-current portion and lease liability-less current portion in the accompanying consolidated balance sheets. ROU assets (which in plain English means “leases”) represent the Company’s right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease. |
Accounts Receivable
Accounts Receivable | 3 Months Ended |
Mar. 31, 2020 | |
Receivables [Abstract] | |
Accounts Receivable | 4. Accounts Receivable March 31, December 31, Accounts receivable $ 7,939,833 $ 4,740,867 Allowances for doubtful accounts (267,362 ) (270,652 ) $ 7,672,471 $ 4,470,215 |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories | 5. Inventories March 31, December 31, Completed goods $ 4,660,303 $ 3,818,876 Work in progress 297,824 416,950 Raw materials and supplies 3,944,746 4,946,960 $ 8,902,873 $ 9,182,786 |
Property, Plant & Equipment
Property, Plant & Equipment | 3 Months Ended |
Mar. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant & Equipment | 6. Property, Plant & equipment March 31, 2020 Accumulated March 31, 2020 Cost Depreciation Net Buildings $ 3,624,527 $ 2,636,575 $ 987,952 Automobiles 163,397 102,095 61,302 Computer hardware 43,318 41,306 2,012 Furniture and fixtures 108,590 97,859 10,731 Manufacturing equipment 5,649,910 3,102,395 2,547,515 Boat 34,400 22,353 12,047 Office equipment 1,673 721 952 Trailer 8,456 5,198 3,258 Leasehold Improvements 88,872 73,230 15,642 Land 345,017 - 345,017 Technology 96,297 96,297 - $ 10,164,457 $ 6,178,029 $ 3,986,428 December 31, 2019 Accumulated December 31, 2019 Cost Depreciation Net Buildings $ 3,614,057 $ 2,619,914 $ 994,143 Automobiles 163,397 94,789 68,608 Computer hardware 43,540 41,233 2,307 Furniture and fixtures 108,906 97,030 11,876 Office equipment 1,827 733 1,094 Manufacturing equipment 5,634,255 3,106,526 2,527,729 Trailer 9,236 5,389 3,847 Boat 34,400 21,719 12,681 Leasehold improvements 88,872 68,571 20,301 Technology 105,177 105,177 — Land 363,090 — 363,090 $ 10,166,757 $ 6,161,081 $ 4,005,676 Amount of depreciation expense for the three months ended March 31, 2020: $99,948 (2019: $100,169) and is included in cost of sales in the unaudited interim condensed consolidated statements of income and comprehensive income. |
Patents
Patents | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Patents | 7. Patents In fiscal 2005, the Company started the patent process for additional WATER$AVR® products. Patents associated with these costs were granted in 2006 and they have been amortized over their legal life of 17 years. March 31 , 2020 Cost Accumulated March 31, 2020 Net Patents $ 186,870 $ 144,404 $ 42,466 December 31, 2019 Cost Accumulated December 31, 2 019 Net Patents $ 204,102 $ 157,526 $ 46,576 The decrease in the carrying amount of patents is primarily due to foreign currency translation effects. The 2020 cost in Canadian dollars - $265,102 (2019 - $265,102 in Canadian dollars). Amount of amortization for 2020 - $4,110 (2019 - $4,110) and is included in cost of sales in the consolidated statements of income and comprehensive income. Estimated amortization expense over the next three years is as follows: 2020 $ 16,438 2021 16,438 2022 13,700 |
Goodwill and Indefinite Lived I
Goodwill and Indefinite Lived Intangible Assets | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Indefinite Lived Intangible Assets | 8. Goodwill and Indefinite Lived Intangible Assets Goodwill Balance as of December 31, 2018 $ 2,534,275 Additions - Impairment - Balance as of December 31, 2019 and March 31, 2020 $ 2,534,275 Indefinite Lived Intangible Assets Balance as of December 31, 2018 $ 770,000 Additions - Impairment - Balance as of December 31, 2019 and March 31, 2020 $ 770,000 Indefinite lived intangible assets consist of trade secrets and trademarks related to the acquisition of EnP Investments LLC. Definite Life Intangible Assets Balance as of December 31, 2018 $ 2,358,000 Amortization (176,000 ) Balance as of December 31, 2019 2,182,000 Amortization (44,000 ) Balance as of March 31, 2020 $ 2,138,000 Definite life intangible assets consists of customer relationships related to the acquisition of EnP Investments LLC (note 3). Customer relationships are amortized over their estimated useful life of 15 years. Estimated amortization expense over the next five years is as follows: 2020 $ 176,000 2021 176,000 2022 160,000 2023 160,000 2024 160,000 |
Long Term Deposits
Long Term Deposits | 3 Months Ended |
Mar. 31, 2020 | |
Long Term Deposits | |
Long Term Deposits | 9. Long Term Deposits The Company has reclassified certain security deposits to better reflect their long term nature. Long term deposits consist of damage deposits held by landlords and security deposits held by various vendors. March 31, 2020 December 31, 2019 Long term deposits $ 8,540 $ 30,630 |
Investments
Investments | 3 Months Ended |
Mar. 31, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investments | 10. Investments ( a ) Balance, December 31, 2018 $ 12,108 Return of equity (6,250 ) Loss in equity method investment 5,529 Balance, December 31, 2019 11,387 Return of equity (6,563 ) Balance, March 31, 2020 $ 4,824 Summarized profit and loss information related to the equity accounted investment is as follows: 2019 Net sales $ 285,635 Net income $ 11,058 ( b ) Balance, December 31, 2018 $ 64,249 Return of equity (9,292) Gain in equity method investment 8,208 Balance, December 31, 2019 and March 31, 2020 $ 63,165 Summarized profit and loss information related to the equity accounted investment is as follows: 2019 Net sales $ 75,870 Net income $ 34,200 (c ) ( d ) Balance, December 31, 2018 $ 500,000 Impairment - Balance, December 31, 2019 and March 31, 2020 $ 500,000 ( e ) A summary of the Company’s investment follows: Balance, December 31, 2018 $ - Acquisition 1,001,000 Gain in equity method investment 290,033 Return on investment (150,000 ) Balance, December 31, 2019 1,141,033 Additional payment 1,000,000 Return on investment (250,000 ) Gain on equity method investment 140,182 Balance, March 31, 2020 $ 2,031,215 Further to the original investment amount, the Company has placed $1,000,000 in trust, to be released upon the LLC reaching a milestone related to earnings before interest, taxes and depreciation (“EBITDA”) targets. This amount was accounted for as restricted cash on the balance sheet and was released in January 2020. Further payments of $1,000,000 and $500,000 may become due should other subsequent milestones be reached. Summarized profit and loss information related to the equity accounted investment is as follows: 2020 2019 Net sales $ 2,791,754 $ 3,257,350 Gross profit 945,395 1,010,781 Net income $ 280,364 $ 448,804 |
Short-Term Line of Credit
Short-Term Line of Credit | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Short-Term Line of Credit | 11. Short-Term Line of Credit ( a ) The revolving line of credit contains customary affirmative and negative covenants, including the following: compliance with laws, provision of financial statements and periodic reports, payment of taxes, maintenance of inventory and insurance, maintenance of operating accounts at Harris, Harris’ access to collateral, formation or acquisition of subsidiaries, incurrence of indebtedness, dispositions of assets, granting liens, changes in business, ownership or business locations, engaging in mergers and acquisitions, making investments or distributions and affiliate transactions. The covenants also require that the Company maintain a minimum ratio of qualifying financial assets to the sum of qualifying financial obligations. As of March 31, 2020, Company was in compliance with all loan covenants. To secure the repayment of any amounts borrowed under the revolving line of credit, the Company granted Harris a security interest in substantially all of the assets of NanoChem Solutions Inc., exclusive of intellectual property assets. Short-term borrowings outstanding under the revolving line as of March 31, 2020 were $1,641,085 (December 31, 2019 - $1,641,085). (b) The revolving line of credit contains customary affirmative and negative covenants, including the following: compliance with laws, provisions of financial statements and periodic reports, payment of taxes, maintenance of inventory and insurance, maintenance of operating accounts at Midland, Midland’s access to collateral, formation of acquisition of subsidiaries, incurrence of indebtedness, dispositions of assets, granting liens, changes in business, ownership or business locations, engaging in mergers and acquisitions, making investments or distributions and affiliate transactions. NanoChem Solutions Inc. is a guarantor of 65% of all the principal and other loan costs not to exceed $1,625,000. As of March 31, 2020, EnP Investments , LLC was in compliance with all loan covenants. To secure the repayment of any amounts borrowed under the revolving line of Credit, EnP Investments, LLC granted Midland a security interest in all inventory, equipment and fixtures and acknowledges a separate commercial security agreement from guarantor to Midland dated February 15, 2011. Short-term borrowings outstanding under the revolving line as of March 31, 2020 were $1,914,747 (December 31, 2019 – $748,897). |
Long Term Debt
Long Term Debt | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Long Term Debt | 12. Long Term Debt ( a ) ( b ) The Company has committed to the following repayments: 2020 $ 739,285 2021 $ 585,714 2022 $ 585,714 2023 $ 585,714 2024 $ 473,811 ( c ) The Company has committed to the following repayments: 2020 $ 206,249 2021 $ 275,000 2022 $ 275,000 2023 $ 275,000 2024 $ 22,917 ( d ) The Company has committed to the following repayments: 2020 $ 19,171 2021 $ 25,562 2022 $ 25,562 2023 $ 25,562 2024 $ 25,562 ( e ) The Company has committed to the following repayments: 2020 $ 6,891 2021 $ 2,297 As of March 31, 2020, Company was in compliance with all loan covenants. Continuity March 31, 2020 December 31, 2019 Balance, January 1 $ 4,380,393 4,351,743 Plus: Proceeds from loans - 1,100,000 Less: Payments on loan (201,027 ) (1,071,350 ) Balance, end of period $ 4,179,366 $ 4,380,393 Outstanding balance March 31, 2020 December 31, 2019 a) Long term debt – Harris Bank $ - $ - b) Long term debt – Harris Bank 2,970,238 3,116,667 b) Long term debt – Harris Bank 1,054,166 1,100,000 c) Long term debt – Midland States Bank 145,774 152,241 d) Long term debt – Ford Credit 9,188 11,485 Long-term Debt $ 4,179,366 $ 4,380,393 Less: current portion (1,197,186 ) (1,196,722 ) $ 2,982,180 $ 3,183,671 |
Convertible Note Payable
Convertible Note Payable | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Convertible Note Payable | 13. Convertible Note Payable In October 2018, the Company issued a convertible note payable in the amount of $1,000,000 to EnP Investments LLC in connection with the acquisition of EnP Investments LLC. The convertible note is due on or before September 30, 2023 with 5% interest due per year. At the option of the holder, the Note may be converted to 400,000 shares in Flexible Solutions International Inc. The Company has the option to extend the note to no later than September 30, 2028. In June 2019, the holder opted to convert $500,000 of the convertible note into 200,000 shares of the Company’s common stock. |
Stock Options
Stock Options | 3 Months Ended |
Mar. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock Options | 14. Stock Options The Company has a stock option plan (“Plan”). The purpose of this Plan is to provide additional incentives to key employees, officers, directors and consultants of the Company and its subsidiaries in order to help attract and retain the best available personnel for positions of responsibility and otherwise promote the success of the Company’s business. It is intended that options issued under this Plan constitute non-qualified stock options. The general terms of awards under the option plan are that 100% of the options granted will vest the year following the grant. The maximum term of options granted is 5 years and the exercise price for all options are issued for not less than fair market value at the date of the grant. The following table summarizes the Company’s stock option activities for the year ended December 31, 2019 and the three-month period ended March 31, 2020: Number of shares Exercise price Weighted average exercise price Balance, December 31, 2018 660,000 $ 0.75 – 1.75 $ 1.35 Granted 347,000 $ 2.44 – 4.13 $ 2.99 Cancelled or expired (56,112 ) $ 0.75 – 3.46 $ 1.41 Exercised (315,888 ) $ 0.75 – 1.70 $ 1.15 Balance, December 31, 2019 635,000 $ 0.75 – 4.13 $ 2.31 Cancelled or expired (10,000 ) $ 2.44 – 3.46 $ 2.85 Exercised (25,000 ) $ 0.75 – 1.05 $ 0.99 Balance, March 31, 2020 600,000 $ 0.75 – 4.13 $ 2.36 Exercisable, March 31, 2020 337,000 $ 0.75 – 4.13 $ 2.52 The weighted average remaining contractual life of options outstanding is 3.8 years. The fair value of each option grant is calculated using the following weighted average assumptions: 2019 Expected life – years 3.0 Interest rate 1.69 – 1.93 % Volatility 43.89 – 57.24 % Weighted average fair value of options granted $ 0.7892 – 1.6399 The Company did not grant any options during the three months ended March 31, 2020 or 2019. Options granted in previous quarters resulted in expenses in the amount of $11,272 for consultants (2019 - $5,747) and $18,310 for employees (2019 - $nil) during the quarter ended March 31, 2020. There were 15,000 employee and 10,000 consultant stock options exercised during the three months ended March 31, 2020 (2019 – 12,000 employee and nil consultant stock options). As of March 31, 2020, there was approximately $113,721 of compensation expense related to non-vested awards. This expense is expected to be recognized over a weighted average period of 1.3 years. |
Capital Stock
Capital Stock | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Capital Stock | 15. Capital Stock . During the three months ended March 31, 2020, 15,000 shares were issued upon the exercise of employee stock options (2019 – 12,000) and 10,000 shares were issued upon the exercise of consultant stock options (2019 – nil). In February 2019, the Company announced the payment of a special dividend to the existing stockholders of the Company as of March 6, 2019 in the amount of five cents per share. In March 2019, the Company announced the payment of annual dividends of $0.15 per share, to be paid in two tranches. Shareholders of record on March 31, 2019 received $0.075 per share on April 15, 2019 and shareholders of record on September 30, 2019 received $0.075 per share on October 15, 2019. On March 19, 2020, the Company suspended the annual dividend until further notice due to the uncertainty surrounding the COVID-19 virus. In June 2019, the holder of the Company’s convertible note opted to convert $500,000 of the convertible note into 200,000 shares of the Company’s common stock. |
Non-Controlling Interests
Non-Controlling Interests | 3 Months Ended |
Mar. 31, 2020 | |
Noncontrolling Interest [Abstract] | |
Non-Controlling Interests | 16. Non-Controlling Interests EnP Investments is a limited liability corporation (LLC) that manufactures and distributes golf, turf and ornamental agriculture products in Mendota, IL. EnP Investments makes cash distributions to the unitholders based on formulas defined within its Ownership Interest Purchase Agreement dated October 1, 2018. Distributions are defined in the Ownership Interest Purchase Agreement as cash on hand to the extent it exceeds current and anticipated long-term and short-term needs, including, without limitation, needs for operating expenses, debt service, acquisitions, reserves, and mandatory distributions, if any. From the effective date of acquisition onward, the minimum distributions requirements under the Ownership Interest Purchase Agreement were satisfied. The total distribution from the effective date of acquisition onward was $669,111. Balance, December 31, 2018 $ 2,462,231 Distribution (296,875 ) Noncontrolling interest share of profits 384,793 Balance, December 31, 2019 2,550,149 Distribution (143,002 ) Noncontrolling interest share of profits 67,015 Balance, March 31, 2020 $ 2,474,162 |
Segmented, Significant Customer
Segmented, Significant Customer Information and Economic Dependency | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Segmented, Significant Customer Information and Economic Dependency | 17. Segmented, Significant Customer Information and Economic Dependency . The Company operates in two segments: (a) Energy and water conservation products (as shown under the column heading “EWCP” below), which consists of a (i) liquid swimming pool blanket which saves energy and water by inhibiting evaporation from the pool surface, and (ii) food-safe powdered form of the active ingredient within the liquid blanket and which is designed to be used in still or slow moving drinking water sources. (b) Biodegradable polymers and chemical additives used within the petroleum, chemical, utility and mining industries to prevent corrosion and scaling in water piping (as shown under the column heading “TPA” below). These chemical additives are also manufactured for use in laundry and dish detergents, as well as in products to reduce levels of insecticides, herbicides and fungicides. The accounting policies of the segments are the same as those described in Note 2, Significant Accounting Policies The Company’s reportable segments are strategic business units that offer different, but synergistic products and services. They are managed separately because each business requires different technology and marketing strategies. Three months ended March 31, 2020: EWCP TPA Total Revenue $ 89,928 $ 8,339,558 $ 8,429,486 Interest expense - 101,425 101,425 Depreciation and amortization 10,476 137,582 148,058 Segment profit (loss) (60,255 ) 1,324,930 1,264,675 Segment assets 545,187 9,722,640 10,176,827 Expenditures for segment assets - (96,280 ) (96,280 ) Three months ended March 31, 2019: EWCP TPA Total Revenue $ 123,139 $ 8,348,337 $ 8,471,476 Interest expense - 129,007 129,007 Depreciation and amortization 11,608 136,671 148,279 Segment profit (loss) (143,808 ) 1,154,958 1,011,150 Segment assets 502,783 9,658,406 10,161,189 Expenditures for segment assets - (1,275,835 ) (1,275,835 ) The sales generated in the United States and Canada are as follows: Three months ended March 31, 2020 Three months ended March 31, 2019 Canada $ 146,000 $ 75,952 United States and abroad 8,283,486 8,395,524 Total $ 8,429,486 $ 8,471,476 The Company’s long-lived assets (property, equipment, intangibles, goodwill, leaseholds, patents and right of use assets) are located in Canada and the United States as follows: March 31, 2020 December 31, 2019 Canada $ 454,187 $ 480,243 United States 9,722,640 9,847,489 Total $ 10,176,827 $ 10,327,732 Three customers accounted for $3,650,830 (48%) of sales during the three-month period ended March 31, 2020 (2019 - $3,790,213 or 45%). |
Comparative Figures
Comparative Figures | 3 Months Ended |
Mar. 31, 2020 | |
Comparative Figures | |
Comparative Figures | 18. Comparative Figures . Certain of the comparative figures have been reclassified to conform with the current period’s presentation. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | 19. Subsequent Events In April 2020, the holder of our convertible note opted to cash it in for $500,000. The outbreak of the novel strain of coronavirus, specifically identified as “COVID-19”, has resulted in a widespread health crisis that has affected economies and financial markets around the world resulting in an economic downturn. This outbreak may also cause staff shortages, reduced customer demand, increased government regulations or interventions, all of which may negatively impact the business, financial condition or results of options of the Company. The duration and impact of the COVID-19 outbreak is unknown at this time and it is not possible to reliably estimate the length and severity of these developments. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Cash and Cash Equivalents | (a) Cash and Cash Equivalents The Company considers all highly liquid investments purchased with an original or remaining maturity of less than three months at the date of purchase to be cash equivalents. Cash and cash equivalents are maintained with several financial institutions. |
Inventories and Cost of Sales | (b) Inventories and Cost of Sales The Company has three major classes of inventory: completed goods, work in progress and raw materials and supplies. In all classes, inventories are stated at the lower of cost and net realizable value. Cost is determined on a first-in, first-out basis. Cost of sales includes all expenditures incurred in bringing the goods to the point of sale. Inventory costs and costs of sales include direct costs of the raw material, inbound freight charges, warehousing costs, handling costs (receiving and purchasing) and utilities and overhead expenses related to the Company’s manufacturing and processing facilities. Shipping and handling charges billed to customers are included in revenue (2020 - $162,905; 2019 – $165,592). Shipping and handling costs incurred are included in cost of goods sold (2020 - $290,748; 2019 – $347,960). |
Allowance for Doubtful Accounts | (c) Allowance for Doubtful Accounts The Company provides an allowance for doubtful accounts when management estimates collectability to be uncertain. Accounts receivable are continually reviewed to determine which, if any, accounts are doubtful of collection. In making the determination of the appropriate allowance amount, the Company considers current economic and industry conditions, relationships with each significant customer, overall customer credit-worthiness and historical experience. |
Property, Equipment, Leaseholds and Intangible Assets | (d) Property, Equipment, Leaseholds and Intangible Assets. The following assets are recorded at cost and depreciated using the methods and annual rates shown below: Computer hardware 30% Declining balance Furniture and fixtures 20% Declining balance Manufacturing equipment 20% Declining balance Office equipment 20% Declining balance Boat 20% Declining balance Building and improvements 10% Declining balance Trailer 30% Declining balance Automobile Straight-line over 5 years Patents Straight-line over 17 years Technology Straight-line over 10 years Right of Use Asset Straight-line over lease term Leasehold improvements Straight-line over lease term Property and equipment are written down to net realizable value when management determines there has been a change in circumstances which indicates their carrying amounts may not be recoverable. No write-downs have been necessary to date. |
Impairment of Long-Lived Assets | (e) Impairment of Long-Lived Assets In accordance with FASB Codification Topic 360, “Property, Plant and Equipment (ASC 360), the Company reviews long-lived assets, including, but not limited to, property, equipment and leaseholds, patents and other assets, for impairment annually or whenever events or changes in circumstances indicate the carrying amounts of assets may not be recoverable. The carrying value of long-lived assets is assessed for impairment by evaluating operating performance and future undiscounted cash flows of the underlying assets. If the expected future cash flows of an asset is less than its carrying value, an impairment measurement is indicated. Impairment charges are recorded to the extent that an asset’s carrying value exceeds its fair value. Accordingly, actual results could vary significantly from such estimates. There were no impairment charges during the periods presented. |
Foreign Currency | (f) Foreign Currency The functional currency of the Company is the U.S. dollar. The functional currency of three of the Company’s subsidiaries is the Canadian Dollar. The translation of the Canadian Dollar to the reporting currency of the Company, the U.S. Dollar, is performed for assets and liabilities using exchange rates in effect at the balance sheet date. Revenue and expense transactions are translated using average exchange rates prevailing during the year. Translation adjustments arising on conversion of the Company’s financial statements from the subsidiary’s functional currency, Canadian Dollars, into the reporting currency, U.S. Dollars, are excluded from the determination of income (loss) and are disclosed as other comprehensive income in the consolidated statements of income and comprehensive income. Foreign exchange gains and losses relating to transactions not denominated in the applicable local currency are included in operating income (loss) if realized during the year and in comprehensive income (loss) if they remain unrealized at the end of the year. |
Revenue Recognition | (g) Revenue Recognition We follow a five-step model for revenue recognition. The five steps are: (1) identification of the contract(s) with the customer, (2) identification of the performance obligation(s) in the contract(s), (3) determination of the transaction price, (4) allocation of the transaction price to the performance obligation, and (5) recognition of revenue when (or as) the performance obligation is satisfied. We have fulfilled our performance obligations when control transfers to the customer, which is generally at the time the product is shipped since risk of loss is transferred to the purchaser upon delivery to the carrier. For shipments which are F.O.B. shipping point, the Company has elected to account for shipping and handling activities as a fulfillment cost rather than as an additional promised service and performance obligation. The Company recognizes revenue when there are no significant remaining performance obligations. When significant post-delivery obligations exist, revenue is deferred until such obligations are fulfilled. To date, there have been no such significant post-delivery obligations. Since the Company’s inception, product returns have been insignificant; therefore, no provision has been established for estimated product returns. Deferred revenues consist of products sold to distributors with payment terms greater than the Company’s customary business terms due to lack of credit history or operating in a new market in which the Company has no prior experience. The Company defers the recognition of revenue until the criteria for revenue recognition has been met, and payments become due or cash is received from these distributors. |
Stock Issued in Exchange for Services | (h) Stock Issued in Exchange for Services The Company’s common stock issued in exchange for services is valued at estimated fair market value based upon trading prices of the Company’s common stock on the dates of the stock transactions. The corresponding expense of the services rendered is recognized over the period that the services are performed. |
Stock-based Compensation | (i) Stock-based Compensation The Company recognizes compensation expense for all share-based payments in accordance with FASB Codification Topic 718, Compensation — Stock Compensation The fair value at grant date of stock options is estimated using the Black-Scholes option-pricing model. Compensation expense is recognized on a straight-line basis over the stock option vesting period based on the estimated number of stock options that are expected to vest. Shares are issued from treasury upon exercise of stock options. |
Other Comprehensive Income | (j) Other Comprehensive Income Other comprehensive income refers to revenues, expenses, gains and losses that under generally accepted accounting principles are included in comprehensive income, but are excluded from net income as these amounts are recorded directly as an adjustment to stockholders’ equity. The Company’s other comprehensive income is comprised only of unrealized foreign exchange gains and losses. |
Income Per Share | (k) Income Per Share Basic earnings per share is computed by dividing income available to common stockholders by the weighted average number of common shares outstanding in the period. Diluted earnings per share are calculated giving effect to the potential dilution of the exercise of options and warrants. Common equivalent shares, composed of incremental common shares issuable upon the exercise of stock options and warrants are included in diluted net income per share to the extent that these shares are dilutive. Common equivalent shares that have an anti-dilutive effect on net income per share have been excluded from the calculation of diluted weighted average shares outstanding for the three months ended March 31, 2020 and 2019. |
Use of Estimates | (l) Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and would impact the results of operations and cash flows. Estimates and underlying assumptions are reviewed at each period end. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected. Significant areas requiring the use of management estimates include assumptions and estimates relating to the valuation of goodwill and intangible assets, asset impairment analysis, share-based payments and warrants, valuation allowances for deferred income tax assets, determination of useful lives of property, equipment and leaseholds and intangible assets, and the valuation of inventory. |
Financial Instruments | (m) Financial Instruments The fair market value of the Company’s financial instruments comprising cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities, and short term line of credit were estimated to approximate their carrying values due to immediate or short-term maturity of these financial instruments. |
Fair Value of Financial Instruments | (n) Fair Value of Financial Instruments Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair value hierarchy based on three levels of inputs described below, of which the first two are considered observable and the last unobservable, that may be used to measure fair value. ● Level 1 – Quoted prices in active markets for identical assets or liabilities ● Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. ● Level 3 — Unobservable inputs that are supported by little or no market activity which is significant to the fair value of the assets or liabilities. The fair values of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities and the short term line of credit for all periods presented approximate their respective carrying amounts due to the short term nature of these financial instruments. |
Contingencies | (o) Contingencies Certain conditions may exist as of the date the financial statements are issued which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company’s management and its legal counsel assess such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company’s legal counsel evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potential material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Legal fees associated with loss contingencies are expensed as incurred. |
Income Taxes | (p) Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the expected future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred tax assets are reduced by a valuation allowance so that the assets are recognized only to the extent that when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will be realized. Per FASB ASC 740 “Income taxes” under the liability method it is the Company’s policy to provide for uncertain tax positions and the related interest and penalties based upon management’s assessment of whether a tax benefit is more likely than not to be sustained upon examination by tax authorities. At December 31, 2018, the Company believes it has appropriately accounted for any unrecognized tax benefits. To the extent the Company prevails in matters for which a liability for an unrecognized benefit is established or is required to pay amounts in excess of the liability, the Company’s effective tax rate in a given financial statement period may be affected. Interest and penalties associated with the Company’s tax positions are recorded as interest expense in the consolidated statements of income and comprehensive income. |
Risk Management | (q) Risk Management. The Company’s credit risk is primarily attributable to its accounts receivable. The amounts presented in the accompanying consolidated balance sheets are net of allowances for doubtful accounts, estimated by the Company’s management based on prior experience and the current economic environment. The Company is exposed to credit-related losses in the event of non-payment by customers. Credit exposure is minimized by dealing with only credit worthy counterparties. Accounts receivable for the Company’s three primary customers totaled $3,650,830 (48%) at March 31, 2020 (December 31, 2019 - $2,707,825 or 61%). The credit risk on cash and cash equivalents is limited because the Company limits its exposure to credit loss by placing its cash and cash equivalents with major financial institutions. The Company maintains cash balances at financial institutions which at times exceed federally insured amounts. The Company has not experienced any material losses in such accounts. The Company is exposed to foreign exchange and interest rate risk to the extent that market value rate fluctuations materially differ from financial assets and liabilities, subject to fixed long-term rates. In order to manage its exposure to foreign exchange risks, the Company is closely monitoring the fluctuations in the foreign currency exchange rates and the impact on the value of cash and cash equivalents, accounts receivable, and accounts payable and accrued liabilities. The Company has not hedged its exposure to currency fluctuations. |
Equity Method Investment | (r) Equity Method Investment The Company accounts for investments using the equity method of accounting if the investment provides the Company the ability to exercise significant influence, but not control, over the investee. Significant influence is generally deemed to exist if the Company’s ownership interest in the voting stock of the investee ranges between 20% and 50%, although other factors, such as representation on the investee’s board of directors, are considered in determining whether the equity method of accounting is appropriate. Under the equity method of accounting, the investment is recorded at cost in the consolidated balance sheets under other assets and adjusted for dividends received and the Company’s share of the investee’s earnings or losses together with other-than-temporary impairments which are recorded through interest and other loss, net in the consolidated statements of income and comprehensive income. |
Goodwill and Intangible Assets | (s) Goodwill and intangible assets Goodwill represents the excess of the purchase price of an acquired entity over the amounts assigned to the assets acquired and liabilities assumed. Goodwill is not amortized, but is reviewed for impairment annually or more frequently if certain impairment conditions arise. The Company performs an annual goodwill impairment review in the fourth quarter of each year at the reporting unit level. The evaluation begins with a qualitative assessment of the factors that could impact the significant inputs used to estimate fair value. If after performing the qualitative assessment, it is determined likely that the fair value of a reporting unit is more than its carrying amount, including goodwill, then no further analysis is necessary. However, if the results of the qualitative test are unclear, the Company performs a quantitative test, which involves comparing the fair value of a reporting unit with its carrying amount, including goodwill. The Company uses an income-based valuation method, determining the present value of future cash flows, to estimate the fair value of a reporting unit. If the fair value of a reporting unit exceeds its positive carrying amount, goodwill of the reporting unit is considered not impaired, and no further analysis is necessary. If the fair value of the reporting unit is less than its carrying amount, goodwill impairment would be recognized equal to the amount of the carrying value in excess of the reporting unit’s fair value, limited to the total amount of goodwill allocated to the reporting unit. Intangible assets primarily include trademarks and trade secrets with indefinite lives and customer-relationships with finite lives. Intangible assets with indefinite lives are not amortized but are tested for impairment on an annual basis, or more frequently if indicators of impairment are present. Indefinite lived intangible assets are assessed using either a qualitative or a quantitative approach. The qualitative assessment evaluates factors including macro-economic conditions, industry and company-specific factors, legal and regulatory environments, and historical company performance in assessing fair value. If it is determined the fair value of the reporting unit is less than its carrying value, a quantitative test is then performed. When using a quantitative approach, the Company compares the fair value of the reporting unit to its carrying amount, including goodwill. If the estimated fair value of the reporting unit is less than the carrying amount of the reporting unit, impairment is indicated, requiring recognition of an impairment charge for the differential. Qualitative assessments of goodwill and indefinite-lived intangible assets were performed in 2019 and 2018. Based on the results of assessment, it was determined that it is more likely than not the reporting unit, customer lists and trademarks had a fair value in excess of carrying value. Accordingly, no further impairment testing was completed and no impairment charges related to goodwill or indefinite-lived intangibles were recognized during the three months ended March 31, 2020. Finite-lived intangible assets are amortized on a straight-line basis over their estimated useful lives. The Company reviews for impairment indicators of finite-lived intangibles and other long-lived assets as described in the “Property and Equipment” significant accounting policy. |
Adoption of New Accounting Principles | (t) Adoption of new accounting principles In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASC 842 which requires lessees to recognize a right-of-use (“ROU”) asset and lease liability on the balance sheet for virtually all leases. From a lessee perspective, ASC 842 retains a dual model requiring leases to be classified as either operating or finance leases for the income statement. Operating leases will result in straight-line expense, and financing leases will have a front-loaded expense pattern with an interest expense component. On January 1, 2019, the Company adopted ASC 842 and all related amendments using the prospective transition approach. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. Adoption of the new standard resulted in the recording of lease ROU assets and lease liabilities of approximately $819,079 as of January 1, 2019. In accordance with ASC 842, the Company determines if an arrangement is a lease at inception based on whether there is an identified asset, whether the Company has the right to obtain substantially all of the economic benefits from the use of the asset and whether the Company has the right to direct the use of the asset. Currently, the Company only has operating leases and does not have any financing leases. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. See note 3, Leases, for further disclosures and detail regarding our operating leases. In November 2016, the FASB issued ASU2016-18 “Statement of Cash Flows” (Topic230); Restricted Cash (ASU2016-18), which defines new requirements for the presentation of restricted cash and restricted cash equivalents in the statement of cash flows. The amendments in this ASU require retrospective application to each period presented. The Company adopted this guidance effective January 1, 2018 retrospectively. This ASU requires entities to present the statement of cash flows in a manner such that it reconciles beginning and ending totals of cash, cash equivalents, restricted cash or restricted cash equivalents. Also, when cash, cash equivalents, restricted cash or restricted cash equivalents are presented in more than one line item within the statement of financial position, an entity should, for each period that a statement of financial position is presented, present on the face of the statement of cash flows or disclose in the notes to the financial statements, the line items and amounts of cash, cash equivalents, and restricted cash or restricted cash equivalents reported within the statement of financial position. The amounts, disaggregated by the line item in which they appear within the statement of financial position, shall sum to the total amount of cash, cash equivalents, and restricted cash or restricted cash equivalents at the end of the corresponding period shown in the statement of cash flows. |
Recent Accounting Pronouncements | (u) Recent Accounting Pronouncements The Company has implemented all applicable new accounting pronouncements that are in effect. Those pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of Method of Depreciation | The following assets are recorded at cost and depreciated using the methods and annual rates shown below: Computer hardware 30% Declining balance Furniture and fixtures 20% Declining balance Manufacturing equipment 20% Declining balance Office equipment 20% Declining balance Boat 20% Declining balance Building and improvements 10% Declining balance Trailer 30% Declining balance Automobile Straight-line over 5 years Patents Straight-line over 17 years Technology Straight-line over 10 years Right of Use Asset Straight-line over lease term Leasehold improvements Straight-line over lease term |
Adoption of ASC 842, Leases (Ta
Adoption of ASC 842, Leases (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Summary of Remaining Expected Lease Payments | The table below summarizes the remaining expected lease payments under our operating leases as of March 31, 2020. Future Lease Payments March 31, 2020 2020 $ 304,591 2021 313,496 2022 93,155 2023 70,925 Thereafter - Less: imputed interest (76,509 ) Present value of operating lease liabilities $ 705,658 |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Receivables [Abstract] | |
Schedule of Accounts Receivable | March 31, December 31, Accounts receivable $ 7,939,833 $ 4,740,867 Allowances for doubtful accounts (267,362 ) (270,652 ) $ 7,672,471 $ 4,470,215 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | March 31, December 31, Completed goods $ 4,660,303 $ 3,818,876 Work in progress 297,824 416,950 Raw materials and supplies 3,944,746 4,946,960 $ 8,902,873 $ 9,182,786 |
Property, Plant & Equipment (Ta
Property, Plant & Equipment (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant & Equipment | March 31, 2020 Accumulated March 31, 2020 Cost Depreciation Net Buildings $ 3,624,527 $ 2,636,575 $ 987,952 Automobiles 163,397 102,095 61,302 Computer hardware 43,318 41,306 2,012 Furniture and fixtures 108,590 97,859 10,731 Manufacturing equipment 5,649,910 3,102,395 2,547,515 Boat 34,400 22,353 12,047 Office equipment 1,673 721 952 Trailer 8,456 5,198 3,258 Leasehold Improvements 88,872 73,230 15,642 Land 345,017 - 345,017 Technology 96,297 96,297 - $ 10,164,457 $ 6,178,029 $ 3,986,428 December 31, 2019 Accumulated December 31, 2019 Cost Depreciation Net Buildings $ 3,614,057 $ 2,619,914 $ 994,143 Automobiles 163,397 94,789 68,608 Computer hardware 43,540 41,233 2,307 Furniture and fixtures 108,906 97,030 11,876 Office equipment 1,827 733 1,094 Manufacturing equipment 5,634,255 3,106,526 2,527,729 Trailer 9,236 5,389 3,847 Boat 34,400 21,719 12,681 Leasehold improvements 88,872 68,571 20,301 Technology 105,177 105,177 — Land 363,090 — 363,090 $ 10,166,757 $ 6,161,081 $ 4,005,676 |
Patents (Tables)
Patents (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Patents | March 31 , 2020 Cost Accumulated March 31, 2020 Net Patents $ 186,870 $ 144,404 $ 42,466 December 31, 2019 Cost Accumulated December 31, 2 019 Net Patents $ 204,102 $ 157,526 $ 46,576 |
Schedule of Estimated Amortization Expense | Estimated amortization expense over the next three years is as follows: 2020 $ 16,438 2021 16,438 2022 13,700 |
Goodwill and Indefinite Lived_2
Goodwill and Indefinite Lived Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill and Indefinite Lived Intangible Assets | Goodwill Balance as of December 31, 2018 $ 2,534,275 Additions - Impairment - Balance as of December 31, 2019 and March 31, 2020 $ 2,534,275 Indefinite Lived Intangible Assets Balance as of December 31, 2018 $ 770,000 Additions - Impairment - Balance as of December 31, 2019 and March 31, 2020 $ 770,000 Indefinite lived intangible assets consist of trade secrets and trademarks related to the acquisition of EnP Investments LLC. Definite Life Intangible Assets Balance as of December 31, 2018 $ 2,358,000 Amortization (176,000 ) Balance as of December 31, 2019 2,182,000 Amortization (44,000 ) Balance as of March 31, 2020 $ 2,138,000 |
Schedule of Estimated Future Amortization Expense | Estimated amortization expense over the next five years is as follows: 2020 $ 176,000 2021 176,000 2022 160,000 2023 160,000 2024 160,000 |
Long Term Deposits (Tables)
Long Term Deposits (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Long Term Deposits | |
Schedule of Long Term Deposits | March 31, 2020 December 31, 2019 Long term deposits $ 8,540 $ 30,630 |
Investments (Tables)
Investments (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
ENP Peru Investments LLC [Member] | |
Schedule of Equity Method Investment | A summary of the Company’s investment follows: Balance, December 31, 2018 $ 12,108 Return of equity (6,250 ) Loss in equity method investment 5,529 Balance, December 31, 2019 11,387 Return of equity (6,563 ) Balance, March 31, 2020 $ 4,824 |
Summary of Profit and Loss Information Related to Equity Accounted Investment | Summarized profit and loss information related to the equity accounted investment is as follows: 2019 Net sales $ 285,635 Net income $ 11,058 |
ENP Realty LLC [Member] | |
Schedule of Equity Method Investment | A summary of the Company’s investment follows: Balance, December 31, 2018 $ 64,249 Return of equity (9,292) Gain in equity method investment 8,208 Balance, December 31, 2019 and March 31, 2020 $ 63,165 |
Summary of Profit and Loss Information Related to Equity Accounted Investment | Summarized profit and loss information related to the equity accounted investment is as follows: 2019 Net sales $ 75,870 Net income $ 34,200 |
Trio Opportunity Corp [Member] | |
Schedule of Equity Method Investment | A summary of the Company’s investment follows: Balance, December 31, 2018 $ 500,000 Impairment - Balance, December 31, 2019 and March 31, 2020 $ 500,000 |
Florida based LLC [Member] | |
Schedule of Equity Method Investment | A summary of the Company’s investment follows: Balance, December 31, 2018 $ - Acquisition 1,001,000 Gain in equity method investment 290,033 Return on investment (150,000 ) Balance, December 31, 2019 1,141,033 Additional payment 1,000,000 Return on investment (250,000 ) Gain on equity method investment 140,182 Balance, March 31, 2020 $ 2,031,215 |
Summary of Profit and Loss Information Related to Equity Accounted Investment | Summarized profit and loss information related to the equity accounted investment is as follows: 2020 2019 Net sales $ 2,791,754 $ 3,257,350 Gross profit 945,395 1,010,781 Net income $ 280,364 $ 448,804 |
Long Term Debt (Tables)
Long Term Debt (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Schedule of Loan Covenants | Continuity March 31, 2020 December 31, 2019 Balance, January 1 $ 4,380,393 4,351,743 Plus: Proceeds from loans - 1,100,000 Less: Payments on loan (201,027 ) (1,071,350 ) Balance, end of period $ 4,179,366 $ 4,380,393 |
Schedule of Outstanding Balance Loan | Outstanding balance March 31, 2020 December 31, 2019 a) Long term debt – Harris Bank $ - $ - b) Long term debt – Harris Bank 2,970,238 3,116,667 b) Long term debt – Harris Bank 1,054,166 1,100,000 c) Long term debt – Midland States Bank 145,774 152,241 d) Long term debt – Ford Credit 9,188 11,485 Long-term Debt $ 4,179,366 $ 4,380,393 Less: current portion (1,197,186 ) (1,196,722 ) $ 2,982,180 $ 3,183,671 |
Promissory Note One With Harris Bank [Member] | |
Schedule of Interest Loan Repayment | The Company has committed to the following repayments: 2020 $ 739,285 2021 $ 585,714 2022 $ 585,714 2023 $ 585,714 2024 $ 473,811 |
Promissory Note Two With Harris Bank [Member] | |
Schedule of Interest Loan Repayment | The Company has committed to the following repayments: 2020 $ 206,249 2021 $ 275,000 2022 $ 275,000 2023 $ 275,000 2024 $ 22,917 |
Promissory Note With Midland States Bank [Member] | |
Schedule of Interest Loan Repayment | The Company has committed to the following repayments: 2020 $ 19,171 2021 $ 25,562 2022 $ 25,562 2023 $ 25,562 2024 $ 25,562 |
Promissory Note With Ford Motor Credit Company [Member] | |
Schedule of Interest Loan Repayment | The Company has committed to the following repayments: 2020 $ 6,891 2021 $ 2,297 |
Stock Options (Tables)
Stock Options (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Stock Option Activity | The following table summarizes the Company’s stock option activities for the year ended December 31, 2019 and the three-month period ended March 31, 2020: Number of shares Exercise price Weighted average exercise price Balance, December 31, 2018 660,000 $ 0.75 – 1.75 $ 1.35 Granted 347,000 $ 2.44 – 4.13 $ 2.99 Cancelled or expired (56,112 ) $ 0.75 – 3.46 $ 1.41 Exercised (315,888 ) $ 0.75 – 1.70 $ 1.15 Balance, December 31, 2019 635,000 $ 0.75 – 4.13 $ 2.31 Cancelled or expired (10,000 ) $ 2.44 – 3.46 $ 2.85 Exercised (25,000 ) $ 0.75 – 1.05 $ 0.99 Balance, March 31, 2020 600,000 $ 0.75 – 4.13 $ 2.36 Exercisable, March 31, 2020 337,000 $ 0.75 – 4.13 $ 2.52 |
Schedule of Stock Option Fair Value Assumptions | The fair value of each option grant is calculated using the following weighted average assumptions: 2019 Expected life – years 3.0 Interest rate 1.69 – 1.93 % Volatility 43.89 – 57.24 % Weighted average fair value of options granted $ 0.7892 – 1.6399 |
Non-Controlling Interests (Tabl
Non-Controlling Interests (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Noncontrolling Interest [Abstract] | |
Schedule of Distributions | Balance, December 31, 2018 $ 2,462,231 Distribution (296,875 ) Noncontrolling interest share of profits 384,793 Balance, December 31, 2019 2,550,149 Distribution (143,002 ) Noncontrolling interest share of profits 67,015 Balance, March 31, 2020 $ 2,474,162 |
Segmented, Significant Custom_2
Segmented, Significant Customer Information and Economic Dependency (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Reportable Segments | Three months ended March 31, 2020: EWCP TPA Total Revenue $ 89,928 $ 8,339,558 $ 8,429,486 Interest expense - 101,425 101,425 Depreciation and amortization 10,476 137,582 148,058 Segment profit (loss) (60,255 ) 1,324,930 1,264,675 Segment assets 545,187 9,722,640 10,176,827 Expenditures for segment assets - (96,280 ) (96,280 ) Three months ended March 31, 2019: EWCP TPA Total Revenue $ 123,139 $ 8,348,337 $ 8,471,476 Interest expense - 129,007 129,007 Depreciation and amortization 11,608 136,671 148,279 Segment profit (loss) (143,808 ) 1,154,958 1,011,150 Segment assets 502,783 9,658,406 10,161,189 Expenditures for segment assets - (1,275,835 ) (1,275,835 ) |
Schedule of Revenue Generated in United States and Canada | The sales generated in the United States and Canada are as follows: Three months ended March 31, 2020 Three months ended March 31, 2019 Canada $ 146,000 $ 75,952 United States and abroad 8,283,486 8,395,524 Total $ 8,429,486 $ 8,471,476 |
Schedule of Long-lived Assets are Located in Canada and United States | The Company’s long-lived assets (property, equipment, intangibles, goodwill, leaseholds, patents and right of use assets) are located in Canada and the United States as follows: March 31, 2020 December 31, 2019 Canada $ 454,187 $ 480,243 United States 9,722,640 9,847,489 Total $ 10,176,827 $ 10,327,732 |
Basis of Presentation (Details
Basis of Presentation (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2019 | |
Unrelated Party [Member] | ||
Ownership interest | 35.00% | |
ENP Peru Investments LLC [Member] | ||
Ownership interest | 65.00% | 65.00% |
Purchase price | $ 5,110,560 |
Significant Accounting Polici_4
Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Jan. 02, 2019 | |
Revenue | $ 8,429,486 | $ 8,471,476 | ||
Cost of sales | $ 5,479,947 | 5,695,889 | ||
Equity method investment, description | Significant influence is generally deemed to exist if the Company's ownership interest in the voting stock of the investee ranges between 20% and 50%, although other factors, such as representation on the investee's board of directors, are considered in determining whether the equity method of accounting is appropriate. | |||
Right use of assets | $ 705,658 | $ 789,205 | ||
Operating lease liabilities | 705,658 | |||
ASC 842 [Member] | ||||
Right use of assets | $ 819,079 | |||
Operating lease liabilities | $ 819,079 | |||
Three Primary Customers [Member] | ||||
Accounts receivable | $ 3,650,830 | $ 2,707,825 | ||
Concentration risk, percentage | 48.00% | 61.00% | ||
Shipping and Handling [Member] | ||||
Revenue | $ 162,905 | 165,592 | ||
Cost of sales | $ 290,748 | $ 347,960 |
Significant Accounting Polici_5
Significant Accounting Policies - Schedule of Method of Depreciation (Details) | 3 Months Ended |
Mar. 31, 2020 | |
Computer Hardware [Member] | |
Depreciation method used and annual rate | 30% Declining balance |
Furniture and Fixtures [Member] | |
Depreciation method used and annual rate | 20% Declining balance |
Manufacturing Equipment [Member] | |
Depreciation method used and annual rate | 20% Declining balance |
Office Equipment [Member] | |
Depreciation method used and annual rate | 20% Declining balance |
Boat [Member] | |
Depreciation method used and annual rate | 20% Declining balance |
Building and Improvements [Member] | |
Depreciation method used and annual rate | 10% Declining balance |
Trailer [Member] | |
Depreciation method used and annual rate | 30% Declining balance |
Automobile [Member] | |
Depreciation method used and annual rate | Straight-line over 5 years |
Patents [Member] | |
Depreciation method used and annual rate | Straight-line over 17 years |
Technology [Member] | |
Depreciation method used and annual rate | Straight-line over 10 years |
Right of Use Asset [Member] | |
Depreciation method used and annual rate | Straight-line over lease term |
Leasehold Improvements [Member] | |
Depreciation method used and annual rate | Straight-line over lease term |
Adoption of ASC 842, Leases (De
Adoption of ASC 842, Leases (Details Narrative) - USD ($) | 3 Months Ended | |||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Jan. 02, 2019 | |
Lease liabilities | $ 705,658 | |||
ROU assets | 705,658 | $ 789,205 | ||
ASC 842 [Member] | ||||
Lease discount rate | 5.50% | |||
Operating lease costs | $ 101,079 | $ 99,908 | ||
Lease liabilities | $ 819,079 | |||
ROU assets | $ 819,079 | |||
Operating lease term | 5 years |
Adoption of ASC 842, Leases - S
Adoption of ASC 842, Leases - Summary of Remaining Expected Lease Payments (Details) | Mar. 31, 2020USD ($) |
Leases [Abstract] | |
2020 | $ 304,591 |
2021 | 313,496 |
2022 | 93,155 |
2023 | 70,925 |
Thereafter | |
Less: imputed interest | (76,509) |
Present value of operating lease liabilities | $ 705,658 |
Accounts Receivable - Schedule
Accounts Receivable - Schedule of Accounts Receivable (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Receivables [Abstract] | ||
Accounts receivable | $ 7,939,833 | $ 4,740,867 |
Allowances for doubtful accounts | (267,362) | (270,652) |
Accounts receivable net | $ 7,672,471 | $ 4,470,215 |
Inventories - Schedule of Inven
Inventories - Schedule of Inventory (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Completed goods | $ 4,660,303 | $ 3,818,876 |
Work in progress | 297,824 | 416,950 |
Raw materials and supplies | 3,944,746 | 4,946,960 |
Total inventory | $ 8,902,873 | $ 9,182,786 |
Property, Plant & Equipment (De
Property, Plant & Equipment (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 99,948 | $ 100,169 |
Property, Plant & Equipment - S
Property, Plant & Equipment - Schedule of Property, Plant & Equipment (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Cost | $ 10,164,457 | $ 10,166,757 |
Accumulated Depreciation | 6,178,029 | 6,161,081 |
Net | 3,986,428 | 4,005,676 |
Buildings [Member] | ||
Cost | 3,624,527 | 3,614,057 |
Accumulated Depreciation | 2,636,575 | 2,619,914 |
Net | 987,952 | 994,143 |
Automobiles [Member] | ||
Cost | 163,397 | 163,397 |
Accumulated Depreciation | 102,095 | 94,789 |
Net | 61,302 | 68,608 |
Computer Hardware [Member] | ||
Cost | 43,318 | 43,540 |
Accumulated Depreciation | 41,306 | 41,233 |
Net | 2,012 | 2,307 |
Furniture and Fixtures [Member] | ||
Cost | 108,590 | 108,906 |
Accumulated Depreciation | 97,859 | 97,030 |
Net | 10,731 | 11,876 |
Manufacturing Equipment [Member] | ||
Cost | 5,649,910 | 5,634,255 |
Accumulated Depreciation | 3,102,395 | 3,106,526 |
Net | 2,547,515 | 2,527,729 |
Boat [Member] | ||
Cost | 34,400 | 34,400 |
Accumulated Depreciation | 22,353 | 21,719 |
Net | 12,047 | 12,681 |
Office Equipment [Member] | ||
Cost | 1,673 | 1,827 |
Accumulated Depreciation | 721 | 733 |
Net | 952 | 1,094 |
Trailer [Member] | ||
Cost | 8,456 | 9,236 |
Accumulated Depreciation | 5,198 | 5,389 |
Net | 3,258 | 3,847 |
Leasehold Improvements [Member] | ||
Cost | 88,872 | 88,872 |
Accumulated Depreciation | 73,230 | 68,571 |
Net | 15,642 | 20,301 |
Land [Member] | ||
Cost | 345,017 | 363,090 |
Accumulated Depreciation | ||
Net | 345,017 | 363,090 |
Technology [Member] | ||
Cost | 96,297 | 105,177 |
Accumulated Depreciation | 96,297 | 105,177 |
Net |
Patents (Details Narrative)
Patents (Details Narrative) | 3 Months Ended | |||
Mar. 31, 2020USD ($) | Mar. 31, 2019USD ($) | Mar. 31, 2020CAD ($) | Dec. 31, 2019CAD ($) | |
Amortized over legal life | 17 years | |||
Amortization | $ 4,110 | $ 4,110 | ||
CAD [Member] | ||||
Increase in currency conversion | $ 265,102 | $ 265,102 |
Patents - Schedule of Patents (
Patents - Schedule of Patents (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Patents, Cost | $ 186,870 | $ 204,102 |
Accumulated Amortization | 144,404 | 157,526 |
Patents, net | $ 42,466 | $ 46,576 |
Patents - Schedule of Estimated
Patents - Schedule of Estimated Amortization Expense (Details) | Mar. 31, 2020USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2020 | $ 16,438 |
2021 | 16,438 |
2022 | $ 13,700 |
Goodwill and Indefinite Lived_3
Goodwill and Indefinite Lived Intangible Assets (Details Narrative) | 3 Months Ended |
Mar. 31, 2020 | |
Estimated useful life | 17 years |
ENP Peru Investments LLC [Member] | |
Estimated useful life | 15 years |
Goodwill and Indefinite Lived_4
Goodwill and Indefinite Lived Intangible Assets - Schedule of Goodwill and Indefinite Lived Intangible Assets (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Beginning balance | $ 2,534,275 | ||
Ending balance | 2,534,275 | $ 2,534,275 | |
Beginning balance | 46,576 | ||
Ending balance | 42,466 | 46,576 | |
Beginning balance | 46,576 | ||
Amortization | 4,110 | $ 4,110 | |
Ending balance | 42,466 | 46,576 | |
EnP Investments Limited Liability Corporation (LLC) [Member] | |||
Beginning balance | 2,534,275 | 2,534,275 | 2,534,275 |
Additions | |||
Impairment | |||
Ending balance | 2,534,275 | 2,534,275 | |
Beginning balance | 770,000 | 770,000 | 770,000 |
Additions | |||
Impairment | |||
Ending balance | 770,000 | 770,000 | |
Beginning balance | 2,182,000 | $ 2,358,000 | 2,358,000 |
Amortization | (44,000) | (176,000) | |
Ending balance | $ 2,138,000 | $ 2,182,000 |
Goodwill and Indefinite Lived_5
Goodwill and Indefinite Lived Intangible Assets - Schedule of Estimated Future Amortization Expense (Details) | Mar. 31, 2020USD ($) |
2020 | $ 16,438 |
2021 | 16,438 |
2022 | 13,700 |
Finite-Lived Intangible Assets [Member] | |
2020 | 176,000 |
2021 | 176,000 |
2022 | 160,000 |
2023 | 160,000 |
2024 | $ 160,000 |
Long Term Deposits - Schedule o
Long Term Deposits - Schedule of Long Term Deposits (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Long Term Deposits | ||
Long term deposits | $ 8,540 | $ 30,630 |
Investments (Details Narrative)
Investments (Details Narrative) - USD ($) | 1 Months Ended | ||||
Jan. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2016 | |
Restricted cash, released upon reaching milestone | $ 1,000,000 | ||||
ENP Peru Investments LLC [Member] | |||||
Ownership interest | 50.00% | ||||
ENP Realty LLC [Member] | |||||
Ownership interest | 24.00% | ||||
Applied Holding Corp [Member] | |||||
Investment | $ 200,000 | ||||
Debt conversion due date | 2021 | ||||
Applied Holding Corp [Member] | Maximum [Member] | |||||
Debt term | 2 years | ||||
Trio Opportunity Corp [Member] | |||||
Investment | $ 500,000 | ||||
Trio Opportunity Corp [Member] | Common Class B [Member] | |||||
Non voting shares | 50,000 | ||||
Share price | $ 10 | ||||
Florida based LLC [Member] | |||||
Ownership interest | 50.00% | ||||
Investment | $ 1,001,000 | ||||
Restricted cash, released upon reaching milestone | $ 1,000,000 | ||||
Milestones, term | Further payments of $1,000,000 and $500,000 may become due should other subsequent milestones be reached. |
Investments - Schedule of Equit
Investments - Schedule of Equity Method Investment (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Balance, Beginning | $ 1,915,585 | |
Balance, Ending | 2,799,204 | $ 1,915,585 |
ENP Peru Investments LLC [Member] | ||
Balance, Beginning | 11,387 | 12,108 |
Return of equity investment | (6,563) | (6,250) |
Gain (loss) in equity method investment | 5,529 | |
Balance, Ending | 4,824 | 11,387 |
ENP Realty LLC [Member] | ||
Balance, Beginning | 63,165 | 64,249 |
Return of equity investment | (9,292) | |
Gain (loss) in equity method investment | 8,208 | |
Balance, Ending | 63,165 | 63,165 |
Trio Opportunity Corp [Member] | ||
Balance, Beginning | 500,000 | 500,000 |
Impairment | ||
Balance, Ending | 500,000 | 500,000 |
Florida based LLC [Member] | ||
Balance, Beginning | 1,141,033 | |
Return of equity investment | (250,000) | (150,000) |
Gain (loss) in equity method investment | 140,182 | 290,033 |
Acquisition | 1,001,000 | |
Additional payment | 1,000,000 | |
Balance, Ending | $ 2,031,215 | $ 1,141,033 |
Investments - Summary of Profit
Investments - Summary of Profit and Loss Information Related to Equity Accounted Investment (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
ENP Peru Investments LLC [Member] | |||
Net sales | $ 285,635 | ||
Net income | 11,058 | ||
ENP Realty LLC [Member] | |||
Net sales | 75,870 | ||
Net income | $ 34,200 | ||
Florida based LLC [Member] | |||
Net sales | $ 2,791,754 | $ 3,257,350 | |
Gross profit | 945,395 | 1,010,781 | |
Net income | $ 280,364 | $ 448,804 |
Short-Term Line of Credit (Deta
Short-Term Line of Credit (Details Narrative) - USD ($) | 1 Months Ended | |||
Jun. 30, 2019 | Sep. 30, 2018 | Mar. 31, 2020 | Dec. 31, 2019 | |
Line of credit | $ 3,555,832 | $ 2,389,982 | ||
New Agreement [Member] | Midland States Bank [Member] | ||||
Aggregate amount of revolving line of credit | $ 2,500,000 | |||
Annual interest rate of loan | 5.0445% | 6.075% | ||
Line of credit | $ 1,914,747 | $ 748,897 | ||
Debt effective rate | 4.06% | |||
New Agreement [Member] | Midland States Bank [Member] | Maximum [Member] | ||||
Annual interest rate of loan | 4.75% | |||
New Agreement [Member] | Harris Bank [Member] | ||||
Aggregate amount of revolving line of credit | $ 2,500,000 | |||
Eligible percentage of domestic accounts receivable | 80.00% | |||
Percentage of foreign accounts receivable of inventory | 60.00% | |||
Annual interest rate of loan | 3.25% | 4.75% | ||
Line of credit | $ 1,641,085 | $ 1,641,085 | ||
New Agreement [Member] | NanoChem Solutions Inc. [Member] | ||||
Line of credit | $ 1,625,000 | |||
Loan guaranteed rate | 65.00% |
Long Term Debt (Details Narrati
Long Term Debt (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | ||||||||
Oct. 31, 2018 | Jan. 31, 2018 | Mar. 31, 2016 | Sep. 30, 2014 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Apr. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2016 | |
Long term debt | $ 4,179,366 | $ 4,380,393 | $ 4,351,743 | |||||||
Harris Bank [Member] | ||||||||||
Long term debt | ||||||||||
Midland States Bank [Member] | ||||||||||
Long term debt | 145,774 | 152,241 | ||||||||
Ford Motor Credit Company [Member] | ||||||||||
Long term debt | $ 9,188 | $ 11,485 | ||||||||
NanoChem Solutions Inc. [Member] | Harris Bank [Member] | ||||||||||
Promissory note | $ 1,005,967 | |||||||||
Debt instrument, interest rate, stated percentage | 6.00% | |||||||||
Debt instrument, term | 5 years | |||||||||
Interest expense | $ 2,009 | |||||||||
NanoChem Solutions Inc. [Member] | Harris Bank [Member] | Term Loan [Member] | ||||||||||
Promissory note | $ 4,100,000 | |||||||||
Debt instrument, term | 7 years | |||||||||
Debt maturity description | Due May 31, 2019 and 2020 | |||||||||
Payment of monthly installments interest rate | 25.00% | |||||||||
Payment of monthly installment | $ 300,000 | |||||||||
NanoChem Solutions Inc. [Member] | Harris Bank [Member] | Prime Rate [Member] | ||||||||||
Debt instrument, interest rate, stated percentage | 0.50% | |||||||||
NanoChem Solutions Inc. [Member] | Harris Bank [Member] | ||||||||||
Promissory note | $ 1,100,000 | |||||||||
Debt instrument, interest rate, stated percentage | 3.75% | 5.25% | 0.50% | |||||||
Interest expense | $ 14,232 | |||||||||
Debt maturity description | The Company paid interest only payments until February 2020, when equally monthly installments of the principal and interest are due until January 2024. | |||||||||
Long term debt | $ 1,054,166 | $ 1,100,000 | ||||||||
NanoChem Solutions Inc. [Member] | Harris Bank [Member] | Term Loan [Member] | ||||||||||
Debt instrument, interest rate, stated percentage | 3.25% | 4.75% | ||||||||
Interest expense | $ 34,458 | 54,958 | ||||||||
Debt balance owing | 2,970,238 | $ 3,116,667 | ||||||||
ENP Peru Investments LLC [Member] | ||||||||||
Ownership interest percentage of EnP | 50.00% | |||||||||
ENP Peru Investments LLC [Member] | Term Loan [Member] | ||||||||||
Ownership interest percentage of EnP | 65.00% | |||||||||
ENP Peru Investments LLC [Member] | Midland States Bank [Member] | ||||||||||
Promissory note | $ 200,000 | |||||||||
Debt instrument, interest rate, stated percentage | 5.25% | |||||||||
Debt instrument, term | 7 years | |||||||||
Interest expense | 2,104 | $ 2,333 | ||||||||
Debt balance owing | 145,774 | 152,241 | ||||||||
ENP Peru Investments LLC [Member] | Ford Motor Credit Company [Member] | ||||||||||
Promissory note | $ 45,941 | |||||||||
Debt instrument, interest rate, stated percentage | 0.00% | |||||||||
Debt instrument, term | 5 years | |||||||||
Debt balance owing | $ 9,188 | $ 11,485 |
Long Term Debt - Schedule of In
Long Term Debt - Schedule of Interest Loan Repayment (Details) - USD ($) | Apr. 30, 2019 | Oct. 31, 2018 | Jan. 31, 2018 | Mar. 31, 2016 |
Promissory Note One With Harris Bank [Member] | ||||
2020 | $ 739,285 | |||
2021 | 585,714 | |||
2022 | 585,714 | |||
2023 | 585,714 | |||
2024 | $ 473,811 | |||
Promissory Note Two With Harris Bank [Member] | ||||
2020 | $ 206,249 | |||
2021 | 275,000 | |||
2022 | 275,000 | |||
2023 | 275,000 | |||
2024 | $ 22,917 | |||
Promissory Note With Midland States Bank [Member] | ||||
2020 | $ 19,171 | |||
2021 | 25,562 | |||
2022 | 25,562 | |||
2023 | 25,562 | |||
2024 | $ 25,562 | |||
Promissory Note With Ford Motor Credit Company [Member] | ||||
2020 | $ 6,891 | |||
2021 | $ 2,297 |
Long Term Debt - Schedule of Lo
Long Term Debt - Schedule of Loan Covenants (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Debt Disclosure [Abstract] | ||
Balance, beginning | $ 4,380,393 | $ 4,351,743 |
Plus: Proceeds from loans | 1,100,000 | |
Less: Payments on loan | (201,027) | (1,071,350) |
Balance, end of period | $ 4,179,366 | $ 4,380,393 |
Long Term Debt - Schedule of Ou
Long Term Debt - Schedule of Outstanding Balance Loan (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Long-term Debt | $ 4,179,366 | $ 4,380,393 | $ 4,351,743 |
Less: current portion | (1,197,186) | (1,196,722) | |
Long term balance | 2,982,180 | 3,183,671 | |
Harris Bank [Member] | |||
Long-term Debt | |||
Harris Bank One [Member] | |||
Long-term Debt | 2,970,238 | 3,116,667 | |
Harris Bank Two [Member] | |||
Long-term Debt | 1,054,166 | 1,100,000 | |
Midland States Bank [Member] | |||
Long-term Debt | 145,774 | 152,241 | |
Ford Motor Credit Company [Member] | |||
Long-term Debt | $ 9,188 | $ 11,485 |
Convertible Note Payable (Detai
Convertible Note Payable (Details Narrative) - USD ($) | 1 Months Ended | |
Jun. 30, 2019 | Oct. 31, 2018 | |
Debt converted to shares | 200,000 | |
Debt converted to shares, amount | $ 500,000 | |
Parent Company [Member] | ||
Debt converted to shares | 200,000 | 400,000 |
Debt option to extend period | Sep. 30, 2028 | |
Debt converted to shares, amount | $ 500,000 | |
ENP Peru Investments LLC [Member] | ||
Convertible note payable | $ 1,000,000 | |
Debt convertible due date | Sep. 30, 2023 | |
Debt conversion ratio | 5.00% |
Stock Options (Details Narrativ
Stock Options (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Options granted percentage | 100.00% | ||
Options maximum granted term | 5 years | ||
Weighted-average remaining contractual life | 3 years 9 months 18 days | ||
Stock options exercised | 25,000 | 315,888 | |
Compensation expense related to non-vested awards | $ 113,721 | ||
Compensation expense related to non-vested awards, weighted average period | 1 year 3 months 19 days | ||
Consultants [Member] | |||
Stock option expense | $ 11,272 | $ 5,747 | |
Stock options exercised | 10,000 | ||
Employees [Member] | |||
Stock option expense | $ 18,310 | ||
Stock options exercised | 15,000 | 12,000 |
Stock Options - Schedule of Sto
Stock Options - Schedule of Stock Option Activity (Details) - $ / shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Number of shares, Beginning Balance | 635,000 | 660,000 |
Number of shares, Granted | 347,000 | |
Number of shares, Cancelled or expired | (10,000) | (56,112) |
Number of shares, Exercised | (25,000) | (315,888) |
Number of shares, Ending Balance | 600,000 | 635,000 |
Number of shares Exercisable, Ending Balance | 337,000 | |
Weighted average exercise price, Beginning Balance | $ 2.31 | $ 1.35 |
Weighted average exercise price, Granted | 2.99 | |
Weighted average exercise price, Cancelled or expired | 2.85 | 1.41 |
Weighted average exercise price, Exercised | 0.99 | 1.15 |
Weighted average exercise price, Ending Balance | 2.36 | 2.31 |
Weighted average exercise price Exercisable, Ending Balance | 2.52 | |
Minimum [Member] | ||
Exercise price per share, Beginning Balance | 0.75 | 0.75 |
Exercise price per share, Granted | 2.44 | |
Exercise price per share, Cancelled or expired | 2.44 | 0.75 |
Exercise price per share, Exercised | 0.75 | 0.75 |
Exercise price per share, Ending Balance | 0.75 | 0.75 |
Exercise price per share Exercisable, Ending Balance | 0.75 | |
Maximum [Member] | ||
Exercise price per share, Beginning Balance | 4.13 | 1.75 |
Exercise price per share, Granted | 4.13 | |
Exercise price per share, Cancelled or expired | 3.46 | 3.46 |
Exercise price per share, Exercised | 1.05 | 1.70 |
Exercise price per share, Ending Balance | 4.13 | $ 4.13 |
Exercise price per share Exercisable, Ending Balance | $ 4.13 |
Stock Options - Schedule of S_2
Stock Options - Schedule of Stock Option Fair Value Assumptions (Details) | 3 Months Ended |
Mar. 31, 2020$ / shares | |
Expected life - years | 3 years |
Minimum [Member] | |
Interest rate | 1.69% |
Volatility | 43.89% |
Weighted average fair value of options granted | $ 0.7892 |
Maximum [Member] | |
Interest rate | 1.93% |
Volatility | 57.24% |
Weighted average fair value of options granted | $ 1.6399 |
Capital Stock (Details Narrativ
Capital Stock (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||
Jun. 30, 2019 | Feb. 28, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Oct. 15, 2019 | Apr. 15, 2019 | |
Stock options exercised | 25,000 | 315,888 | |||||
Payment of dividend, per share | $ 0.15 | $ 0.075 | $ 0.075 | ||||
Debt converted to shares, amount | $ 500,000 | ||||||
Debt converted to shares | 200,000 | ||||||
Existing Stockholders [Member] | |||||||
Payment of dividend description | The Company announced the payment of a special dividend to the existing stockholders of the Company as of March 6, 2019 in the amount of five cents per share. | ||||||
Employees Stock Option [Member] | |||||||
Stock options exercised | 15,000 | 12,000 | |||||
Consultants Stock Options [Member] | |||||||
Stock options exercised | 10,000 |
Non-Controlling Interests (Deta
Non-Controlling Interests (Details Narrative) - USD ($) | Oct. 02, 2018 | Jun. 30, 2019 | Mar. 31, 2020 |
Convertible note payable | $ 500,000 | ||
Unrelated Party [Member] | |||
Related party owner ship percentage | 35.00% | ||
EnP Investments Limited Liability Corporation (LLC) [Member] | |||
Ownership percentage | 65.00% | ||
Cash paid | $ 4,110,560 | ||
Convertible note payable | $ 1,000,000 | ||
Distributions | $ 669,111 |
Non-Controlling Interests - Sch
Non-Controlling Interests - Schedule of Distributions (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Distribution to noncontrolling interests | $ 2,550,149 | ||
Noncontrolling interest share of profits | 67,015 | $ 29,264 | |
Distribution to noncontrolling interests | 2,474,162 | $ 2,550,149 | |
EnP Investments Limited Liability Corporation (LLC) [Member] | |||
Distribution to noncontrolling interests | 2,550,149 | $ 2,462,231 | 2,462,231 |
Distribution | (143,002) | (296,875) | |
Noncontrolling interest share of profits | 67,015 | 384,793 | |
Distribution to noncontrolling interests | $ 2,474,162 | $ 2,550,149 |
Segmented, Significant Custom_3
Segmented, Significant Customer Information and Economic Dependency (Details Narrative) | 3 Months Ended | |
Mar. 31, 2020USD ($)Segments | Mar. 31, 2019USD ($) | |
Number of operating segment | Segments | 2 | |
Accounts Receivable [Member] | Three Customers [Member] | ||
Accounts receivable | $ | $ 3,650,830 | $ 3,790,213 |
Concentration risk percentage | 48.00% | 45.00% |
Segmented, Significant Custom_4
Segmented, Significant Customer Information and Economic Dependency - Schedule of Reportable Segments (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenue | $ 8,429,486 | $ 8,471,476 |
Interest expense | 101,425 | 129,007 |
Depreciation and amortization | 148,058 | 148,279 |
Segment profit (loss) | 1,331,690 | 1,040,414 |
Expenditures for segment assets | (96,280) | (1,275,835) |
Segments [Member] | ||
Revenue | 8,429,486 | 8,471,476 |
Interest expense | 101,425 | 129,007 |
Depreciation and amortization | 148,058 | 148,279 |
Segment profit (loss) | 1,264,675 | 1,011,150 |
Segment assets | 10,176,827 | 10,161,189 |
Expenditures for segment assets | (96,280) | (1,275,835) |
EWCP [Member] | Segments [Member] | ||
Revenue | 89,928 | 123,139 |
Interest expense | ||
Depreciation and amortization | 10,476 | 11,608 |
Segment profit (loss) | (60,255) | (143,808) |
Segment assets | 545,187 | 502,783 |
Expenditures for segment assets | ||
TPA [Member] | Segments [Member] | ||
Revenue | 8,339,558 | 8,348,337 |
Interest expense | 101,425 | 129,007 |
Depreciation and amortization | 137,582 | 136,671 |
Segment profit (loss) | 1,324,930 | 1,154,958 |
Segment assets | 9,722,640 | 9,658,406 |
Expenditures for segment assets | $ (96,280) | $ (1,275,835) |
Segmented, Significant Custom_5
Segmented, Significant Customer Information and Economic Dependency - Schedule of Revenue Generated in United States and Canada (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Sales | $ 8,429,486 | $ 8,471,476 |
Canada [Member] | ||
Sales | 146,000 | 75,952 |
United States and Abroad [Member] | ||
Sales | $ 8,283,486 | $ 8,395,524 |
Segmented, Significant Custom_6
Segmented, Significant Customer Information and Economic Dependency - Schedule of Long-lived Assets are Located in Canada and United States (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Long-lived assets | $ 10,176,827 | $ 10,327,732 |
Canada [Member] | ||
Long-lived assets | 454,187 | 480,243 |
United States [Member] | ||
Long-lived assets | $ 9,722,640 | $ 9,847,489 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | 1 Months Ended | |
Apr. 30, 2020 | Jun. 30, 2019 | |
Debt converted to cash | $ 500,000 | |
Subsequent Event [Member] | ||
Debt converted to cash | $ 500,000 |