Document_and_Entity_Informatio
Document and Entity Information | 6 Months Ended | |
Jun. 30, 2014 | Aug. 13, 2014 | |
Document Document And Entity Information [Abstract] | ' | ' |
Entity Central Index Key | '0001108645 | ' |
Entity Registrant Name | 'FRONTIER OILFIELD SERVICES INC | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 30-Jun-14 | ' |
Trading Symbol | 'fosi | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity a Well-known Seasoned Issuer | 'No | ' |
Entity a Voluntary Filer | 'No | ' |
Entity's Reporting Status Current | 'Yes | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Common Stock, Shares Outstanding | ' | 5,894,986 |
Document Fiscal Period Focus | 'Q2 | ' |
Document Fiscal Year Focus | '2014 | ' |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Current Assets: | ' | ' |
Cash | $229,314 | $52,120 |
Certificate of deposit | 77,614 | 77,614 |
Accounts receivable, net of allowance of doubtful accounts of $33,321 | 874,358 | 1,536,084 |
Other receivable | ' | 287,076 |
Inventory, primarily parts | 164,905 | 214,969 |
Prepaid expenses, primarily insurance | 468,834 | 1,364,303 |
Current assets of discontinued operations | 110,506 | 126,059 |
Deferred loan origination fees, current portion | 289,194 | 289,194 |
Total current assets | 2,214,725 | 3,947,419 |
Property and equipment: | ' | ' |
Property and equipment, at cost | 16,138,621 | 16,624,281 |
Less accumulated depreciation | -4,421,897 | -3,434,197 |
Total property and equipment | 11,716,724 | 13,190,084 |
Other assets: | ' | ' |
Intangibles, net | 3,288,084 | 3,491,472 |
Assets held for sale | 1,704,965 | 1,946,743 |
Other assets of discontinued operations | 10,493 | 10,620 |
Deferred loan fees, net of current portion | 474,811 | 625,296 |
Deposits | 13,417 | 13,417 |
Total other assets | 5,491,770 | 6,087,548 |
Total Assets | 19,423,219 | 23,225,051 |
Current Liabilities: | ' | ' |
Current portion of long-term debt | 7,472,046 | 8,756,472 |
Accounts payable | 2,960,536 | 3,397,230 |
Accrued liabilities | 830,790 | 1,036,836 |
Financed insurance premiums payable | ' | 1,119,213 |
Current portion of loans from shareholder | ' | 1,596,000 |
Current liabilities of discontinued operations | 1,344,367 | 1,475,743 |
Total current liabilities | 12,607,739 | 17,381,494 |
Loans from shareholder, less current maturities | 2,845,484 | ' |
Long-term debt, less current maturities | 1,531,693 | 1,656,231 |
Total Liabilities | 16,984,916 | 19,037,725 |
Commitments and Contingencies (Note 7) | ' | ' |
Stockholders' Equity: | ' | ' |
Preferred stock- $.01 par value; authorized 10,000,000; 2,850,000 issued and outstanding as of June 30, 2014 1,750,000 issued and outstanding as of December 31, 2013 | 28,500 | 17,500 |
Common stock- $.01 par value; authorized 100,000,000 shares; 5,894,986 shares issued and outstanding at June 30, 2014 5,553,157 shares issued and outstanding at December 31, 2013 | 58,950 | 55,531 |
Additional paid-in capital | 32,138,342 | 31,659,261 |
Prepaid stock compensation | ' | -74,000 |
Accumulated deficit | -29,787,489 | -27,470,966 |
Total stockholders' equity | 2,438,303 | 4,187,326 |
Total Liabilities and Stockholders' Equity | $19,423,219 | $23,225,051 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Statement of Financial Position [Abstract] | ' | ' |
Allowance of doubtful accounts | $33,321 | $33,321 |
Preferred stock, par value | $0.01 | $0.01 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 2,850,000 | 1,750,000 |
Preferred stock, shares outstanding | 2,850,000 | 1,750,000 |
Common stock, par value | $0.01 | $0.01 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 5,894,986 | 5,553,157 |
Common stock, shares outstanding | 5,894,986 | 5,553,157 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (USD $) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Income Statement [Abstract] | ' | ' | ' | ' |
Revenues, net of discounts | $4,219,213 | $8,363,030 | $9,088,225 | $17,462,949 |
Costs and expenses: | ' | ' | ' | ' |
Direct operating costs | 2,744,112 | 6,080,265 | 6,721,709 | 12,647,535 |
Indirect operating costs | 1,254,216 | 1,425,811 | 2,090,898 | 2,896,982 |
General and administrative | 407,248 | 1,828,565 | 920,492 | 3,699,733 |
Depreciation and amortization | 608,605 | 647,420 | 1,320,219 | 1,364,879 |
Total costs and expenses | 5,014,181 | 9,982,061 | 11,053,318 | 20,609,129 |
Operating loss | -794,968 | -1,619,031 | -1,965,093 | -3,146,180 |
Other (income) expense: | ' | ' | ' | ' |
Interest expense | 95,483 | 493,543 | 300,868 | 845,067 |
(Gain) loss on disposal of property and equipment | 26,100 | -64,516 | -22,399 | -55,856 |
Loss on extinguishment of debt | ' | ' | 4,453 | ' |
Loss before provision for income taxes | -916,551 | -2,048,058 | -2,248,015 | -3,935,391 |
Provision for state income taxes | 30,000 | ' | 76,564 | ' |
Loss from continuing operations | -946,551 | -2,048,058 | -2,324,579 | -3,935,391 |
Income (loss) from discontinued operations, net of income taxes | 105,204 | -396,857 | 13,838 | -991,309 |
Net loss | ($841,347) | ($2,444,915) | ($2,310,741) | ($4,926,700) |
Net income (loss) per common share - basic and diluted: | ' | ' | ' | ' |
Continuing operations | ($0.16) | ($0.39) | ($0.40) | ($0.78) |
Discontinued operations | $0.02 | ($0.08) | ' | ($0.20) |
Total | ($0.14) | ($0.47) | ($0.40) | ($0.97) |
Weighted Average Common Shares Outstanding: | ' | ' | ' | ' |
Basic and Diluted | 5,894,986 | 5,203,553 | 5,752,436 | 5,073,390 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (USD $) | 6 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Cash Flows From Operating Activities: | ' | ' |
Net loss | ($2,310,741) | ($4,926,700) |
Less: Income (loss) from discontinued operations, net of income taxes | 13,838 | -991,309 |
Loss from continuing operations, net of taxes | -2,324,579 | -3,935,391 |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ' | ' |
Depreciation and amortization | 1,320,219 | 1,364,879 |
Issuance of common stock for services | 74,000 | 1,723,088 |
Loss on extinguishment of debt | 4,453 | ' |
Direct payment of expenses by shareholder in exchange of preferred stock | 223,743 | ' |
Gain on disposal of property and equipment | -22,399 | -55,856 |
Amortization of deferred loan fees | 150,485 | 174,036 |
Decrease (increase) in operating assets: | ' | ' |
Accounts receivable | 948,802 | 755,543 |
Deposits & other | ' | 1,475 |
Inventory, primarily parts | 50,064 | 53,297 |
Prepaid expenses, primarily insurance | 895,469 | 896,766 |
Increase (decrease) in operating liabilities: | ' | ' |
Accounts payable | -436,694 | 326,398 |
Other current liabilities | -211,828 | ' |
Financed insurance premiums payable | -1,119,213 | -820,499 |
Net cash provided by (used in) operating activities of continuing operations | -447,478 | 483,735 |
Net cash provided by (used in) operating activities of discontinued operations | -14,055 | 547,363 |
Net cash provided by (used in) operating activities | -461,533 | 1,031,098 |
Cash Flows From Investing Activities: | ' | ' |
Purchase of property and equipment | ' | -517,962 |
Proceeds from sale property and equipment | 266,804 | 126,981 |
Escrow liability | ' | -619,922 |
Net cash provided by (used in) investing activities of continuing operations | 266,804 | -1,010,903 |
Net cash provided by investing activities of discontinued operations | ' | 5,707 |
Net cash provided by (used in) investing activities | 266,804 | -1,005,196 |
Cash Flows From Financing Activities: | ' | ' |
Proceeds from preferred stock subscriptions | 216,257 | ' |
Loans from shareholder | 1,249,484 | ' |
Net change in line of credit | -1,093,818 | 45,624 |
Payments on notes payable | ' | -1,131,442 |
Payments from restricted cash account | ' | 619,922 |
Common stock sales | ' | 400,393 |
Net cash provided by (used in) financing activities of continuing operations | 371,923 | -65,503 |
Net cash used in financing activities of discontinued operations | ' | -28,223 |
Net cash provided by (used in) financing activities | 371,923 | -93,726 |
Net increase (decrease) in cash | 177,194 | -67,824 |
Cash at beginning of period | 52,120 | 67,824 |
Cash at end of period | 229,314 | ' |
Supplemental Cash Flow Disclosures | ' | ' |
Interest paid | 110,678 | 673,939 |
Supplemental Schedule of Non-Cash Investing and Financing Activities | ' | ' |
Convertible notes conversion | 53,500 | ' |
Proceeds from sale of properties to pay term note and vendors | 308,870 | ' |
Settlement of deferred consideration payable for acquisition of CTT | ' | 4,708,348 |
Accrued dividends payable | $5,782 | ' |
BASIS_OF_PRESENTATION
BASIS OF PRESENTATION | 6 Months Ended | ||
Jun. 30, 2014 | |||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' | ||
BASIS OF PRESENTATION | ' | ||
1 | BASIS OF PRESENTATION: | ||
The condensed consolidated financial statements included herein have been prepared by Frontier Oilfield Services, Inc. (“the Company”), without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles have been omitted. However, in the opinion of management, all adjustments (which include only normal recurring accruals) necessary to present fairly the financial position and results of operations for the periods presented have been made. The results for interim periods are not necessarily indicative of trends or of results to be expected for the full year. These financial statements should be read in conjunction with the financial statements of the Company for the year ended December 31, 2013 (including the notes thereto) set forth in Form 10-K. |
BUSINESS_ACTIVITIES
BUSINESS ACTIVITIES | 6 Months Ended | ||
Jun. 30, 2014 | |||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' | ||
BUSINESS ACTIVITIES | ' | ||
2 | BUSINESS ACTIVITIES: | ||
Frontier Oilfield Services, Inc. a Texas corporation (and collectively with its subsidiaries, “we”, “our”, “Frontier”, “FOSI”, or the “Company”), was organized on March 24, 1995. The accompanying condensed consolidated financial statements include the accounts of the Company and Frontier Acquisition I, Inc., and its subsidiary Chico Coffman Tank Trucks, Inc. (CTT) and its subsidiary Coffman Disposal, LLC, and Frontier Income and Growth, LLC (FIG) and its subsidiaries Trinity Disposal & Trucking, LLC and Trinity Disposal Wells, LLC (Note 9). | |||
The Company’s current businesses are in the oilfield service industry and primarily involve the transportation and disposal of saltwater and other oilfield fluids in Texas. The Company currently owns and operates eleven disposal wells in Texas. The Company's customer base includes national, integrated, and independent oil and gas exploration companies. |
GOING_CONCERN
GOING CONCERN | 6 Months Ended | ||
Jun. 30, 2014 | |||
Going Concern | ' | ||
GOING CONCERN | ' | ||
3 | GOING CONCERN: | ||
The Company’s financial statements are prepared using U.S. generally accepted accounting principles applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. As of the date of this report, the Company has generated losses from operations, has an accumulated deficit and working capital deficiency. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. | |||
In order to continue as a going concern and achieve a profitable level of operations, the Company will need, among other things, to reduce its operating expenses, raise additional capital resources and develop new and stable sources of revenue sufficient to meet its operating expenses. The Company’s continuation as a going concern is dependent upon management’s ability to raise equity or debt financing, and the attainment of profitable operations from the Company’s businesses. | |||
The Company’s ability to continue as a going concern is dependent upon management’s ability to successfully accomplish the plan described in the preceding paragraph and eventually attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. |
SUMMARY_OF_SELECTED_ACCOUNTING
SUMMARY OF SELECTED ACCOUNTING POLICIES | 6 Months Ended | ||
Jun. 30, 2014 | |||
Accounting Policies [Abstract] | ' | ||
SUMMARY OF SELECTED ACCOUNTING POLICIES | ' | ||
4 | SUMMARY OF SELECTED ACCOUNTING POLICIES: | ||
Principles of Consolidation | |||
The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant inter-company transactions and balances have been eliminated in consolidation. | |||
Reclassification of Discontinued Operations | |||
In accordance with ASC Topic 205, regarding the presentation of discontinued operations the assets, liabilities and activity of FIG and its subsidiaries have been reclassified as discontinued operations for all periods presented. | |||
Earnings Per Share (EPS) | |||
Basic earnings per common share are calculated by dividing net income or loss by the weighted average number of shares outstanding during the year. Diluted earnings per common share are calculated by adjusting outstanding shares, assuming conversion of all potentially dilutive stock options and warrants. The computation of diluted EPS does not assume conversion, exercise, or contingent issuance of shares that would have an antidilutive effect on earnings per common share. Anti-dilution results from an increase in earnings | |||
per share or reduction in loss per share from the inclusion of potentially dilutive shares in EPS calculations. Currently there are 240,000 stock options and 5,700,000 warrants, which have been excluded from EPS, outstanding that could potentially have a dilutive effect to the EPS | |||
Property and Equipment | |||
During the six months ended June 30, 2014, the Company disposed of property and equipment with a cost of $485,000 and accumulated depreciation of $129,000. The Company received total proceeds of approximately $378,000 of which approximately $112,000 was paid directly to the lender and recognized a gain of $22,000 in the accompanying consolidated statements of operations. During the six months ended June 30, 2013, the Company disposed of property and equipment with a cost of $245,000 and accumulated depreciation of $168,000. The Company received total proceeds of approximately $133,000 and recognized a gain of $56,000 in the accompanying consolidated statements of operations. |
STOCK_BASED_COMPENSATION
STOCK BASED COMPENSATION | 6 Months Ended | ||||||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ||||||||||||||||||||
STOCK BASED COMPENSATION | ' | ||||||||||||||||||||
5 | STOCK BASED COMPENSATION: | ||||||||||||||||||||
Under the terms of the Company’s employment agreements with its officers, certain officers receive a grant of 25,000 shares of the Company’s common stock per quarter and a grant of 5,000 shares of the Company’s common stock times the number of years of completed service issued annually. In addition, certain officers receive options to purchase up to 15,000 of the Company’s common stock per calendar quarter at an exercise price equal to the ending bid price of the last market day prior to the date of the option award. The option exercise period for each option is up to two years from its date of issuance, at which time the option expires. The granted shares vest proportionally each quarter for the calendar year ended December 31, 2014. | |||||||||||||||||||||
The board, with mutual agreement from the officers of the Company, elected to suspend all stock based compensation in 2014 as part of the Company’s cost cutting and restructuring measures. | |||||||||||||||||||||
Summary Stock Compensation Table | |||||||||||||||||||||
The following table sets forth the Company’s paid or accrued stock compensation expense to its officers, directors and employees. | |||||||||||||||||||||
Securities | |||||||||||||||||||||
Stock | Non-Vested | Underlying | |||||||||||||||||||
Stock | Options | Stock | Non-Vested | ||||||||||||||||||
Awards | Awards | Awards (1) | Stock (1) | Total | |||||||||||||||||
Six months ended June 30, 2014 | $ | 74,000 | $ | — | $ | — | — | $ | 74,000 | ||||||||||||
Six months ended June 30, 2013 | $ | 1,080,638 | $ | 61,200 | $ | 378,750 | 405,000 | $ | 1,520,588 | ||||||||||||
(1) As of June, 2014, there were no unrecognized compensation expenses related to the non-vested stock grants. | |||||||||||||||||||||
A summary of the status of the Company’s option grants as of June 30, 2014 and December 31, 2013 and the changes during the periods then ended is presented below: | |||||||||||||||||||||
Weighted Average | |||||||||||||||||||||
Remaining | Aggregate | ||||||||||||||||||||
Weighted-Average | Contractual Term | Intrinsic | |||||||||||||||||||
Shares | Exercise Price | (in Years) | Value | ||||||||||||||||||
Outstanding December 31, 2013 | 300,000 | $ | 1.58 | 1.11 | $ | 474,450 | |||||||||||||||
Granted | — | — | — | — | |||||||||||||||||
Exercised | — | — | — | — | |||||||||||||||||
Forfeited | (60,000 | ) | 0.86 | — | (51,600 | ) | |||||||||||||||
Outstanding June 30, 2014 | 240,000 | $ | 1.76 | 0.81 | $ | 422,850 | |||||||||||||||
In calculating the expected life of stock options, the Company determines the amount of time from grant date to contractual term date for vested options. In developing the expected life assumption, all amounts of time are weighted by the number of underlying options. | |||||||||||||||||||||
A summary of the status of the Company’s vested and non-vested option grants at June 30, 2014 and the weighted average grant date fair value is presented below: | |||||||||||||||||||||
Weighted Average | Weighted Average | ||||||||||||||||||||
Grant Date | Grant Date | ||||||||||||||||||||
Shares | Fair Value per Share | Fair Value | |||||||||||||||||||
Vested | 240,000 | $ | 0.73 | $ | 176,000 | ||||||||||||||||
Nonvested | — | — | — | ||||||||||||||||||
Total | 240,000 | $ | 0.73 | $ | 176,000 |
BORROWINGS
BORROWINGS | 6 Months Ended | ||||
Jun. 30, 2014 | |||||
Debt Disclosure [Abstract] | ' | ||||
BORROWINGS | ' | ||||
6 | BORROWINGS: | ||||
Borrowings as of June 30, 2014 were as follows: | |||||
June 30, | |||||
2014 | |||||
Revolving credit facility and term loan (a) | $ | 2,738,631 | |||
ICON term note (b) | 3,895,946 | ||||
Loans from shareholder (f) | 2,845,484 | ||||
Notes payable (c) | 2,082,407 | ||||
Installment notes (d) | 186,755 | ||||
Convertible note (e) | 100,000 | ||||
Total borrowings | $ | 11,849,223 | |||
In connection with the acquisition of CTT, the Company and its subsidiaries entered into loan agreements effective July 23, 2012 with Capital One Business Credit Corp. (the “Senior Loan Facility”) and ICON Investments (ICON) the proceeds of which were primarily used for the cash portion of the acquisition. On April 11, 2014 an accredited investor, which is also a shareholder in the Company, purchased the Note and related collateral from Capital One and assumed all the existing terms and conditions of the Credit Agreement and Forbearance Agreements. As of August 13, 2014, these balances are past due and the lenders have not exercised their rights under these agreements. | |||||
a. | The Senior Loan Facility has a maturity date of July 23, 2017 and a default interest rate which is the base rate plus the applicable margin plus 2% (6.75% and 7.75%, respectively as of June 30, 2014). The term loan portion of the Senior Loan Facility requires monthly payments of $100,000 plus interest. The Senior Loan Facility also provides for the payment of an unused commitment fee of .375% per annum. The loans are secured by all of the Company’s properties and assets except for its disposal wells wherein the Senior Loan Facility has a subordinated secured position to ICON. | ||||
b. | The Company and its subsidiaries entered into a Term Loan, Guaranty and Security Agreement on July 23, 2012 with ICON in the amount of $5 million. The Loan Agreement provides for 14% monthly interest only payments with repayment of the principal and accrued but unpaid interest on February 1, 2018. ICON has a senior secured position on the Company’s disposal wells and a subordinated position to the Senior Loan Facility on all other Company properties and assets. As of June 30, 2014, the Company was not in compliance with its debt covenants and accordingly classified the entire note balance as a current liability. In addition, on June 18, 2014, the Company received a Notice of Payment Default/Acceleration Obligations. ICON continues to reserve all of its rights and remedies under the ICON Credit Agreement and common law by virtue of the Credit Parties default on their obligations. Management is in discussion with ICON and anticipates a mutually agreeable resolution. | ||||
c. | The Company assumed two notes payable in connection with the acquisition of CTT. The notes relate to CTT’s purchase of common stock shares from two former stockholders. The primary note payable in the original amount of $3,445,708 dated June 1, 2007 bears interest at 4.79% and is payable in monthly installments of $33,003 including interest, maturing December 1, 2018. The Company’s secondary note payable in the original amount of $219,555 dated June 1, 2007 bears interest at 4.79% and is payable in monthly installments of $2,488 including interest, maturing December 1, 2018. Both notes are subordinated to the Senior Loan Facility and ICON notes. Payments of principal and interest have been suspended based upon defaults in the Senior Loan Facility and ICON credit agreements. The suspension of the payments does not constitute a default in accordance with the subordination agreement. | ||||
d. | The Company’s installment loan with principal balance of approximately $199,000 which were used to acquire property and equipment for use in the Company’s operations. At June 30, 2014, the loan matures in September 2017 with interest rates of 5.69% and monthly minimum payments of $5,377. | ||||
e. | The Company entered into a convertible note agreement with Asher Enterprises, Inc. in the amount of $153,500 with a stated interest rate of 8% per annum and effective interest rate of 70% per annum. The note was convertible into shares of the Company’s common stock, at the discretion of the holder commencing 180 days following the date of the debenture at a conversion price per share equal to a discount of 35% from the average of the lowest three closing prices for the Company’s stock during the ten days prior to conversion date. The Company evaluated the note and determined that the conversion option does not constitute a derivative liability for financial reporting purposes. The beneficial conversion feature discount resulting from the conversion price of $0.34, below the market price on August 15, 2013 of $0.53, resulted in a discount of $72,235 of which all of the balance was amortized during the period ended June 30, 2014. In 2014, the Company issued 341,372 shares to Asher Enterprises, Inc. in partial payment of the convertible note. This conversion resulted in a principal reduction of $53,500 in convertible note balance of the Company. The conversion resulted in loss on extinguishment of debt of $4,453. On June 10, 2014 an accredited investor, which is also a shareholder in the Company purchased the note from Asher Enterprises, Inc. and assumed all the existing terms and conditions of the note agreement. | ||||
f. | On May 27, 2014 an accredited investor, which is also a shareholder in the Company, entered into a loan agreement with the Company for the amount of $2,783,484. The note bears interest at 9% per annum for a term of 18 months. | ||||
g. | On March 21, 2014 the CEO of the Company, which is also a shareholder in the Company loaned the Company the amount of $87,000. The loan has an interest rate of 7% per annum with payment term as follows: | ||||
1 | $5,000 by March 25, 2014 plus accrued interest | ||||
2 | $32,000 by March 28, 2014 plus accrued interest | ||||
3 | $12,500 by April 10, 2014 plus accrued interest | ||||
4 | $12,500 by May 10, 2014 plus accrued interest | ||||
5 | $25,000 on and before the sale of the next Trinity Disposal Well plus accrued interest | ||||
Currently the loan is passed due and the CEO has agreed to extend the due dates above through September 30, 2014. |
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended | ||
Jun. 30, 2014 | |||
Commitments and Contingencies Disclosure [Abstract] | ' | ||
COMMITMENTS AND CONTINGENCIES | ' | ||
7 | COMMITMENTS AND CONTINGENCIES: | ||
a. | The Company is obligated for $1,435,300 under long-term leases for the use of land where seven of its disposal wells are located. Three of the leases are for extended periods of time. The first lease expires on February 7, 2023 (with two options to renew for an additional 10 years each).The second lease expires on December 1, 2034 with no option to renew and the third lease expires on May 31, 2018 with one year renewal options. The monthly lease payment for the disposal well leases is $10,300. | ||
b. | Although not named directly in the litigation the Company is obligated to indemnify one of its current officers and one of its former officers in certain litigation filed against them ; Jimmy Coffman and Elaine Coffman v. Tim P. Burroughs And Dick O'Donnell CAUSE NO. CV14-02-115 in the 271st Judicial District Wise County, Texas wherein the Coffman's seek to obtain the sum of $2,082,407 which they allege is owed them as a result of the Company's purchase of Chico Coffman Tank Trucks, Inc. and its subsidiary Coffman Disposal, LLC. The lawsuit is being defended through its Directors and Officers insurance carrier, Chubb Insurance. The Company is a named defendant along with the previouly named officers in certain litigation; Dynamic Technical Solutions Corp. and Ola Investments, LLC, V. Frontier Oilfield Services, Inc., Timothy Burroughs and Bernard R. "Dick" O'Donnell; CAUSE NO. CV14-04-234 in the 271st Judicial District Wise County, Texas wherein the Plaintiffs allege they have been damaged by the failure of the Company to complete a disposal well in a joint venture between the parties in the sum of $300,000. The Company is defending the lawsuit and believes that the lawsuit is without merit. | ||
c. | From time to time, the Company is a party to various legal actions arising in the ordinary course of business. The Company accrues costs and legal costs associated with these matters when they become probable and the amount can be reasonably estimated. The Company’s management does not expect any liability from the disposition of such claims and litigation individually or in the aggregate would have a material adverse impact on the Company’s consolidated financial position, results of operations and cash flows. |
EQUITY_TRANSACTIONS
EQUITY TRANSACTIONS | 6 Months Ended | ||
Jun. 30, 2014 | |||
Stockholders' Equity Note [Abstract] | ' | ||
EQUITY TRANSACTIONS | ' | ||
8 | EQUITY TRANSACTIONS: | ||
a. | During the six months ended June 30, 2014, the Company issued 1,100,000 shares of cumulative convertible preferred stock and 2,200,000 warrants for $440,000. The preferred stock features a 7% cumulative dividend, payable quarterly, with payment at the option of the Company to be made in kind or in shares of common stock based on a per share valuation set at a 25% discount to the 5 day average closing bid price of the market price. The amount of dividends in arrears for all preferred stock was $42,809 at June 30, 2014. The warrant features provide that 2 warrants may be exercised to purchase | ||
one share of common stock at a strike price of $0.20 per share with an expiration date of September 20, 2014. The weighted average fair value for the warrants was estimated using the Black-Scholes option valuation model. The value of the warrants was calculated to be $481,836 that was recorded to additional paid-in capital. The Black-Scholes option valuation model inputs used are as follows: | |||
Average expected life in years | 1 | ||
Average risk-free interest rate | 4.00% | ||
Average volatility | 75% | ||
Dividend yield | 7% | ||
b. | On February 24, 2014 and March 21, 2014, the Company issued a total of 341,372 shares to Asher Enterprises, Inc. in partial payment of the convertible note. This conversion resulted in a principal reduction of $53,500 in convertible note balance of the Company. The conversion resulted in loss on extinguishment of debt of $4,453. |
DISCONTINUED_OPERATIONS
DISCONTINUED OPERATIONS | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Discontinued Operations and Disposal Groups [Abstract] | ' | ||||||||
DISCONTINUED OPERATIONS | ' | ||||||||
9 | DISCONTINUED OPERATIONS: | ||||||||
On July 24, 2013, the Company approved the plan to sell certain assets and to discontinue the operations of Frontier Income and Growth, LLC and its subsidiaries Trinity Disposal & Trucking, LLC and Trinity Disposal Wells, LLC. The effective date of the discontinuation of operations was June 1, 2013. The Company anticipates to maximize this strategy and related strategic options by the end of the year 2014. | |||||||||
The fixed assets of FIG are classified as assets held for sale in the consolidated balance sheets as of June 30, 2014 and December 31, 2013 in accordance with (ASC 205-20), Presentation of Financial Statements - Discontinued Operations. FIG’s net income of $13,838 and net loss of $991,309 for the six months ended June 30, 2014 and 2013, are included in discontinued operations. | |||||||||
During six months ended June 30, 2014, the Company sold a disposal well of FIG for proceeds of $230,000 of which approximately $197,000 were paid directly to one of the Company’s lenders at closing, resulting in a net loss of $45,032 which is included in discontinued operations for the period ended June 30, 2014. The proceeds paid directly to the Company’s lender were included as a non-cash financing activity in the accompanying consolidated statement of cash flows. | |||||||||
FIG’s revenue and net loss before income tax are summarized as follows: | |||||||||
For The Six Months Ended | |||||||||
30-Jun-14 | 30-Jun-13 | ||||||||
Revenues | $ | 207,525 | $ | 3,889,316 | |||||
Income (loss) from discontinued operations, net of income taxes | $ | 13,838 | $ | (991,309 | ) | ||||
Assets and liabilities classified as discontinued operations are as follows: | |||||||||
30-Jun-14 | 31-Dec-13 | ||||||||
Cash | $ | — | $ | 56,240 | |||||
Accounts receivable | 110,506 | 69,819 | |||||||
Deposits | 10,493 | 10,620 | |||||||
Total assets | $ | 120,999 | $ | 136,679 | |||||
Cash deficit | $ | 9,674 | $ | — | |||||
Accounts payable | 1,263,834 | 1,340,936 | |||||||
Accrued liabilities | 70,859 | 134,807 | |||||||
Total liabilities | $ | 1,344,367 | $ | 1,475,743 |
SUMMARY_OF_SELECTED_ACCOUNTING1
SUMMARY OF SELECTED ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2014 | |
Accounting Policies [Abstract] | ' |
Principles of Consolidation | ' |
Principles of Consolidation | |
The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant inter-company transactions and balances have been eliminated in consolidation. | |
Reclassification of Discontinued Operations | ' |
Reclassification of Discontinued Operations | |
In accordance with ASC Topic 205, regarding the presentation of discontinued operations the assets, liabilities and activity of FIG and its subsidiaries have been reclassified as discontinued operations for all periods presented. | |
Earnings Per Share (EPS) | ' |
Earnings Per Share (EPS) | |
Basic earnings per common share are calculated by dividing net income or loss by the weighted average number of shares outstanding during the year. Diluted earnings per common share are calculated by adjusting outstanding shares, assuming conversion of all potentially dilutive stock options and warrants. The computation of diluted EPS does not assume conversion, exercise, or contingent issuance of shares that would have an antidilutive effect on earnings per common share. Anti-dilution results from an increase in earnings | |
per share or reduction in loss per share from the inclusion of potentially dilutive shares in EPS calculations. Currently there are 240,000 stock options and 5,700,000 warrants, which have been excluded from EPS, outstanding that could potentially have a dilutive effect to the EPS | |
Property and Equipment | ' |
Property and Equipment | |
During the six months ended June 30, 2014, the Company disposed of property and equipment with a cost of $485,000 and accumulated depreciation of $129,000. The Company received total proceeds of approximately $378,000 of which approximately $112,000 was paid directly to the lender and recognized a gain of $22,000 in the accompanying consolidated statements of operations. During the six months ended June 30, 2013, the Company disposed of property and equipment with a cost of $245,000 and accumulated depreciation of $168,000. The Company received total proceeds of approximately $133,000 and recognized a gain of $56,000 in the accompanying consolidated statements of operations. |
STOCK_BASED_COMPENSATION_Table
STOCK BASED COMPENSATION (Tables) | 6 Months Ended | ||||||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ||||||||||||||||||||
Schedule of paid or accrued stock compensation expense | ' | ||||||||||||||||||||
The following table sets forth the Company’s paid or accrued stock compensation expense to its officers, directors and employees. | |||||||||||||||||||||
Securities | |||||||||||||||||||||
Stock | Non-Vested | Underlying | |||||||||||||||||||
Stock | Options | Stock | Non-Vested | ||||||||||||||||||
Awards | Awards | Awards (1) | Stock (1) | Total | |||||||||||||||||
Six months ended June 30, 2014 | $ | 74,000 | $ | — | $ | — | — | $ | 74,000 | ||||||||||||
Six months ended June 30, 2013 | $ | 1,080,638 | $ | 61,200 | $ | 378,750 | 405,000 | $ | 1,520,588 | ||||||||||||
(1) As of June, 2014, there were no unrecognized compensation expenses related to the non-vested stock grants. | |||||||||||||||||||||
Schedule of status of the Company's option grants | ' | ||||||||||||||||||||
A summary of the status of the Company’s option grants as of June 30, 2014 and December 31, 2013 and the changes during the periods then ended is presented below: | |||||||||||||||||||||
Weighted Average | |||||||||||||||||||||
Remaining | Aggregate | ||||||||||||||||||||
Weighted-Average | Contractual Term | Intrinsic | |||||||||||||||||||
Shares | Exercise Price | (in Years) | Value | ||||||||||||||||||
Outstanding December 31, 2013 | 300,000 | $ | 1.58 | 1.11 | $ | 474,450 | |||||||||||||||
Granted | — | — | — | — | |||||||||||||||||
Exercised | — | — | — | — | |||||||||||||||||
Forfeited | (60,000 | ) | 0.86 | — | (51,600 | ) | |||||||||||||||
Outstanding June 30, 2014 | 240,000 | $ | 1.76 | 0.81 | $ | 422,850 | |||||||||||||||
Schedule of vested and nonvested option grants | ' | ||||||||||||||||||||
A summary of the status of the Company’s vested and non-vested option grants at June 30, 2014 and the weighted average grant date fair value is presented below: | |||||||||||||||||||||
Weighted Average | Weighted Average | ||||||||||||||||||||
Grant Date | Grant Date | ||||||||||||||||||||
Shares | Fair Value per Share | Fair Value | |||||||||||||||||||
Vested | 240,000 | $ | 0.73 | $ | 176,000 | ||||||||||||||||
Nonvested | — | — | — | ||||||||||||||||||
Total | 240,000 | $ | 0.73 | $ | 176,000 |
BORROWINGS_Tables
BORROWINGS (Tables) | 6 Months Ended | ||||
Jun. 30, 2014 | |||||
Debt Disclosure [Abstract] | ' | ||||
Schedule of borrowings | ' | ||||
Borrowings as of June 30, 2014 were as follows: | |||||
June 30, | |||||
2014 | |||||
Revolving credit facility and term loan (a) | $ | 2,738,631 | |||
ICON term note (b) | 3,895,946 | ||||
Loans from shareholder (f) | 2,845,484 | ||||
Notes payable (c) | 2,082,407 | ||||
Installment notes (d) | 186,755 | ||||
Convertible note (e) | 100,000 | ||||
Total borrowings | $ | 11,849,223 | |||
EQUITY_TRANSACTIONS_Tables
EQUITY TRANSACTIONS (Tables) | 6 Months Ended | |
Jun. 30, 2014 | ||
Stockholders' Equity Note [Abstract] | ' | |
Schedule of Black-Scholes option valuation model inputs | ' | |
The Black-Scholes option valuation model inputs used are as follows: | ||
Average expected life in years | 1 | |
Average risk-free interest rate | 4.00% | |
Average volatility | 75% | |
Dividend yield | 7% |
DISCONTINUED_OPERATIONS_Tables
DISCONTINUED OPERATIONS (Tables) | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Discontinued Operations and Disposal Groups [Abstract] | ' | ||||||||
Schedule of discontinued operations | ' | ||||||||
FIG’s revenue and net loss before income tax are summarized as follows: | |||||||||
For The Six Months Ended | |||||||||
30-Jun-14 | 30-Jun-13 | ||||||||
Revenues | $ | 207,525 | $ | 3,889,316 | |||||
Income (loss) from discontinued operations, net of income taxes | $ | 13,838 | $ | (991,309 | ) | ||||
Assets and liabilities classified as discontinued operations are as follows: | |||||||||
30-Jun-14 | 31-Dec-13 | ||||||||
Cash | $ | — | $ | 56,240 | |||||
Accounts receivable | 110,506 | 69,819 | |||||||
Deposits | 10,493 | 10,620 | |||||||
Total assets | $ | 120,999 | $ | 136,679 | |||||
Cash deficit | $ | 9,674 | $ | — | |||||
Accounts payable | 1,263,834 | 1,340,936 | |||||||
Accrued liabilities | 70,859 | 134,807 | |||||||
Total liabilities | $ | 1,344,367 | $ | 1,475,743 |
SUMMARY_OF_SELECTED_ACCOUNTING2
SUMMARY OF SELECTED ACCOUNTING POLICIES (Details Narative) (USD $) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Disposals of property and equipment | ' | ' | $485,000 | $245,000 |
Accumulated depreciation related to property and equipment disposed | ' | ' | 129,000 | 168,000 |
Total proceeds from sale of property and equipment | ' | ' | 378,000 | 133,000 |
Payments to lender from disposal | ' | ' | 112,000 | ' |
Gain (loss) on sale of property and equipment | -26,100 | 64,516 | 22,399 | 55,856 |
Proceeds from sale property and equipment | ' | ' | $266,804 | $126,981 |
Stock Option Awards [Member] | ' | ' | ' | ' |
Potentially dilutive shares excluded from EPS | ' | ' | 240,000 | ' |
Warrants [Member] | ' | ' | ' | ' |
Potentially dilutive shares excluded from EPS | ' | ' | 5,700,000 | ' |
STOCK_BASED_COMPENSATION_Detai
STOCK BASED COMPENSATION (Details Narrative) | 6 Months Ended |
Jun. 30, 2014 | |
Share based compensation arrangement by share based payment award options exercise | '9 months 22 days |
Officer [Member] | ' |
Quarterly stock grants | 25,000 |
Additional annual stock grants, per year of service | 5,000 |
Right to purchase common stock | 15,000 |
Share based compensation arrangement by share based payment award options exercise | '2 years |
STOCK_BASED_COMPENSATION_Detai1
STOCK BASED COMPENSATION (Details) (USD $) | 6 Months Ended | |||
Jun. 30, 2014 | Jun. 30, 2013 | |||
Paid or accrued stock compensation expense | $74,000 | $1,520,588 | ||
Stock Awards [Member] | ' | ' | ||
Paid or accrued stock compensation expense | 74,000 | 1,080,638 | ||
Stock Option Awards [Member] | ' | ' | ||
Paid or accrued stock compensation expense | ' | 61,200 | ||
Non Vested Stock Awards [Member] | ' | ' | ||
Paid or accrued stock compensation expense | ' | [1] | 378,750 | [1] |
Securities Underlying Restricted Stock [Member] | ' | ' | ||
Paid or accrued stock compensation expense | ' | [1] | $405,000 | [1] |
[1] | As of June, 2014, there were no unrecognized compensation expenses related to the non-vested stock grants. |
STOCK_BASED_COMPENSATION_Detai2
STOCK BASED COMPENSATION (Details 1) (USD $) | 6 Months Ended |
Jun. 30, 2014 | |
Number of shares | ' |
Beginning balance | 300,000 |
Granted | ' |
Exercised | ' |
Forfeited | -60,000 |
Ending balance | 240,000 |
Weighted Average Exercise Price | ' |
Beginning balance | $1.58 |
Granted | ' |
Exercised | ' |
Forfeited | $0.86 |
Ending balance | $1.76 |
Weighted Average Remaining Contractual Term | ' |
Beginning Balance | '1 year 1 month 10 days |
Ending Balance | '9 months 22 days |
Aggregate Intrinsic Value | ' |
Beginning Balance | $474,450 |
Forfeited | ($51,600) |
Ending Balance | $422,850 |
STOCK_BASED_COMPENSATION_Detai3
STOCK BASED COMPENSATION (Details 2) (USD $) | 6 Months Ended | |
Jun. 30, 2014 | Dec. 31, 2013 | |
Granted, Shares | 240,000 | 300,000 |
Weighted Average Grant Date Fair Value per Share | $0.73 | ' |
Weighted Average Grant Date Fair Value | $176,000 | ' |
Vested Option [Member] | ' | ' |
Granted, Shares | 240,000 | ' |
Weighted Average Grant Date Fair Value per Share | $0.73 | ' |
Weighted Average Grant Date Fair Value | $176,000 | ' |
BORROWINGS_Details_Narrative
BORROWINGS (Details Narrative) (USD $) | Aug. 15, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jul. 23, 2012 | Jun. 30, 2014 | Jun. 30, 2014 | 27-May-14 | 10-May-14 | Apr. 10, 2014 | Mar. 28, 2014 | Mar. 25, 2014 | Mar. 21, 2014 | Jun. 30, 2014 | Jun. 30, 2014 |
Revolving Credit Facility And Term Loan [Member] | Revolving Credit Facility [Member] | Term Loan [Member] | Term Loan [Member] | Icon Term Note [Member] | Installment Notes [Member] | Asher Convertible Notes Payable [Member] | Shareholder Notes Payable [Member] | Shareholder Notes Payable 2 [Member] | Shareholder Notes Payable 2 [Member] | Shareholder Notes Payable 2 [Member] | Shareholder Notes Payable 2 [Member] | Shareholder Notes Payable 2 [Member] | Chico Coffman Tank Trucks [Member] | Chico Coffman Tank Trucks [Member] | ||
Primary Notes Payable [Member] | Secondary Notes Payable [Member] | |||||||||||||||
Maturity Date | ' | 23-Jul-17 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1-Dec-18 | 1-Dec-18 |
Interest rate description | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Base rate plus the applicable margin plus 2% | ||||||||||||||||
Spread on variable rate basis | ' | 2.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Interest Rate | ' | ' | 6.75% | 7.75% | ' | 14.00% | 5.69% | 8.00% | 9.00% | ' | ' | ' | ' | 7.00% | 4.79% | 4.79% |
Loan payment frequency | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Monthly | Monthly | Monthly | Monthly | |||||||||||||
Loan payment amount - principal | ' | ' | ' | ' | $100,000 | ' | ' | ' | ' | $12,500 | $12,500 | $32,000 | $5,000 | ' | ' | ' |
Unused commitment fee | ' | 0.38% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt face amount | ' | ' | ' | ' | ' | 5,000,000 | 199,000 | 153,500 | 2,783,484 | ' | ' | ' | ' | 87,000 | 3,445,708 | 219,555 |
Loan payment amount | ' | ' | ' | ' | ' | ' | 5,377 | ' | ' | ' | ' | ' | ' | ' | 33,003 | 2,488 |
Debt Effective Interest Rate | ' | ' | ' | ' | ' | ' | ' | 70.00% | ' | ' | ' | ' | ' | ' | ' | ' |
Conversion price discount percentage | ' | ' | ' | ' | ' | ' | ' | 35.00% | ' | ' | ' | ' | ' | ' | ' | ' |
Conversion price | ' | ' | ' | ' | ' | ' | ' | $0.34 | ' | ' | ' | ' | ' | ' | ' | ' |
Stock price | $0.53 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt discount | ' | ' | ' | ' | ' | ' | ' | 72,235 | ' | ' | ' | ' | ' | ' | ' | ' |
Amortization of debt discount | ' | ' | ' | ' | ' | ' | ' | 72,235 | ' | ' | ' | ' | ' | ' | ' | ' |
Value of shares issued for extinguishment of debt | ' | ' | ' | ' | ' | ' | ' | 53,500 | ' | ' | ' | ' | ' | ' | ' | ' |
Loss on extinguishment of debt | ' | ' | ' | ' | ' | ' | ' | 4,453 | ' | ' | ' | ' | ' | ' | ' | ' |
Debt term | ' | ' | ' | ' | ' | ' | ' | ' | '18 months | ' | ' | ' | ' | ' | ' | ' |
Debt payment to be made prior to sale of next Trinity Disposal Well | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $25,000 | ' | ' |
BORROWINGS_Details
BORROWINGS (Details) (USD $) | Jun. 30, 2014 | |
Total borrowings | $11,849,223 | |
Icon Term Note [Member] | ' | |
Total borrowings | 3,895,946 | [1] |
Loans From Shareholder [Member] | ' | |
Total borrowings | 2,845,484 | [2] |
Notes Payable [Member] | ' | |
Total borrowings | 2,082,407 | [3] |
Installment Notes [Member] | ' | |
Total borrowings | 186,755 | [4] |
Convertible Note [Member] | ' | |
Total borrowings | 100,000 | [5] |
Revolving Credit Facility And Term Loan [Member] | ' | |
Total borrowings | $2,738,631 | [6] |
[1] | The Company and its subsidiaries entered into a Term Loan, Guaranty and Security Agreement on July 23, 2012 with ICON in the amount of $5 million. The Loan Agreement provides for 14% monthly interest only payments with repayment of the principal and accrued but unpaid interest on February 1, 2018. ICON has a senior secured position on the Company's disposal wells and a subordinated position to the Senior Loan Facility on all other Company properties and assets. As of June 30, 2014, the Company was not in compliance with its debt covenants and accordingly classified the entire note balance as a current liability. In addition, on June 18, 2014, the Company received a Notice of Payment Default/Acceleration Obligations. ICON continues to reserve all of its rights and remedies under the ICON Credit Agreement and common law by virtue of the Credit Parties default on their obligations. Management is in discussion with ICON and anticipates a mutually agreeable resolution. | |
[2] | On May 27, 2014 an accredited investor, which is also a shareholder in the Company, entered into a loan agreement with the Company for the amount of $2,783,484. The note bears interest at 9% per annum for a term of 18 months. | |
[3] | The Company assumed two notes payable in connection with the acquisition of CTT. The notes relate to CTT's purchase of common stock shares from two former stockholders. The primary note payable in the original amount of $3,445,708 dated June 1, 2007 bears interest at 4.79% and is payable in monthly installments of $33,003 including interest, maturing December 1, 2018. The Company's secondary note payable in the original amount of $219,555 dated June 1, 2007 bears interest at 4.79% and is payable in monthly installments of $2,488 including interest, maturing December 1, 2018. Both notes are subordinated to the Senior Loan Facility and ICON notes. Payments of principal and interest have been suspended based upon defaults in the Senior Loan Facility and ICON credit agreements. The suspension of the payments does not constitute a default in accordance with the subordination agreement. | |
[4] | The Company's installment loan with principal balance of approximately $199,000 which were used to acquire property and equipment for use in the Company's operations. At June 30, 2014, the loan matures in September 2017 with interest rates of 5.69% and monthly minimum payments of $5,377. | |
[5] | The Company entered into a convertible note agreement with Asher Enterprises, Inc. in the amount of $153,500 with a stated interest rate of 8% per annum and effective interest rate of 70% per annum. The note was convertible into shares of the Company's common stock, at the discretion of the holder commencing 180 days following the date of the debenture at a conversion price per share equal to a discount of 35% from the average of the lowest three closing prices for the Company's stock during the ten days prior to conversion date. The Company evaluated the note and determined that the conversion option does not constitute a derivative liability for financial reporting purposes. The beneficial conversion feature discount resulting from the conversion price of $0.34, below the market price on August 15, 2013 of $0.53, resulted in a discount of $72,235 of which all of the balance was amortized during the period ended June 30, 2014. In 2014, the Company issued 341,372 shares to Asher Enterprises, Inc. in partial | |
[6] | The Senior Loan Facility has a maturity date of July 23, 2017 and a default interest rate which is the base rate plus the applicable margin plus 2% (6.75% and 7.75%, respectively as of June 30, 2014). The term loan portion of the Senior Loan Facility requires monthly payments of $100,000 plus interest. The Senior Loan Facility also provides for the payment of an unused commitment fee of .375% per annum. The loans are secured by all of the Company's properties and assets except for its disposal wells wherein the Senior Loan Facility has a subordinated secured position to ICON. |
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES (Details Narrative) (USD $) | 6 Months Ended |
Jun. 30, 2014 | |
Use of Land Leases [Member] | ' |
Total lease obligation | $1,435,300 |
Monthly lease payment for leases | 10,300 |
Number of disposal wells in land lease | 7 |
Number of leases with extensions for period of time | 3 |
Number of options to renew leases | 2 |
Use of Land Lease #1 [Member] | ' |
Lease renewal term | '10 years |
Use of Land Lease #3 [Member] | ' |
Lease renewal term | '1 year |
Case [Member] | ' |
Estimate of possible loss | 2,082,407 |
Description of litigation | ' |
Jimmy Coffman and Elaine Coffman v. Tim P. Burroughs And Dick O'Donnell CAUSE NO. CV14-02-115 in the 271st Judicial District Wise County, Texas wherein the Coffman's seek to obtain the sum of $2,082,407 which they allege is owed them as a result of the Company's purchase of Chico Coffman Tank Trucks, Inc. and its subsidiary | |
Name of plaintiff | ' |
Jimmy Coffman and Elaine Coffman v. Tim P. Burroughs And Dick O'Donnell | |
Domicile of litigation | ' |
Judicial District Wise County, Texas | |
Case1 [Member] | ' |
Estimate of possible loss | $300,000 |
Description of litigation | ' |
Dynamic Technical Solutions Corp. and Ola Investments, LLC, V. Frontier Oilfield Services, Inc., Timothy Burroughs and Bernard R. "Dick" O'Donnell; CAUSE NO. CV14-04-234 in the 271st Judicial District Wise County, Texas wherein the Plaintiffs allege they have been damaged by the failure of the Company to complete a disposal well in a joint venture between the parties in the sum of $300,000. | |
Name of plaintiff | ' |
Dynamic Technical Solutions Corp. and Ola Investments, LLC, V. Frontier Oilfield Services, Inc., Timothy Burroughs and Bernard R. "Dick" O'Donnell | |
Domicile of litigation | ' |
Judicial District Wise County, Texas |
EQUITY_TRANSACTIONS_Details_Na
EQUITY TRANSACTIONS (Details Narrative) (USD $) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2014 | Dec. 31, 2013 | |
Stock and warrants issued during the period, value | ' | 440,000 |
Asher Convertible Notes Payable [Member] | ' | ' |
Shares issued for extinguishment of debt | 341,372 | ' |
Value of shares issued for extinguishment of debt | 53,500 | ' |
Loss on extinguishment of debt | 4,453 | ' |
Warrants [Member] | ' | ' |
Warrants issued | ' | 2,200,000 |
Strike price | $0.20 | ' |
Numbers of shares called by warrant | 0.5 | ' |
Number of warrants to be exercised to purchase one share of common stock | 2 | ' |
Fair value of warrant | 481,836 | ' |
Preferred Stock Series A 7% [Member] | ' | ' |
Stock issued during period, shares | ' | 1,100,000 |
Preferred stock cumulative dividend rate | 7.00% | ' |
Preferred stock in-kind payment terms | ' | ' |
A per share valuation set at a 25% discount to the 5 day average closing bid price | ||
Dividends in arrears | $42,809 | ' |
EQUITY_TRANSACTIONS_Details
EQUITY TRANSACTIONS (Details) (Warrants [Member]) | 6 Months Ended |
Jun. 30, 2014 | |
Warrants [Member] | ' |
Average expected life in years | '1 year |
Average risk-free interest rate | 4.00% |
Average volatility | 75.00% |
Dividend yield | 7.00% |
DISCONTINUED_OPERATIONS_Detail
DISCONTINUED OPERATIONS (Details Narrative) (USD $) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Gross proceeds from sale of property and equipment | ' | ' | $378,000 | $133,000 |
Payments to lender from disposal | ' | ' | 112,000 | ' |
Loss on sale of property and equipment | -26,100 | 64,516 | 22,399 | 55,856 |
Disposal Well [Member] | ' | ' | ' | ' |
Gross proceeds from sale of property and equipment | ' | ' | 230,000 | ' |
Payments to lender from disposal | ' | ' | 197,000 | ' |
Loss on sale of property and equipment | ' | ' | $45,032 | ' |
DISCONTINUED_OPERATIONS_Detail1
DISCONTINUED OPERATIONS (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Revenues and net loss of discontinued operations | ' | ' | ' | ' |
Revenues | ' | ' | $207,525 | $3,889,316 |
Income (loss) from discontinued operations, net of income taxes | $105,204 | ($396,857) | $13,838 | ($991,309) |
DISCONTINUED_OPERATIONS_Detail2
DISCONTINUED OPERATIONS (Details 1) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Assets and Liabilities classified as discontinued operations | ' | ' |
Cash | ' | $56,240 |
Accounts Receivable | 110,506 | 69,819 |
Deposits | 10,493 | 10,620 |
Total Assets | 120,999 | 136,679 |
Cash deficit | 9,674 | ' |
Accounts payable | 1,263,834 | 1,340,936 |
Accrued liabilities | 70,859 | 134,807 |
Total liabilities | $1,344,367 | $1,475,743 |