Profire Energy (PFIE) 10-Q 9 May 18 2018 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2018	May 07, 2018
Document and Entity Information:
Entity Registrant Name	Profire Energy Inc
Document Type	10-Q
Document Period End Date	Mar. 31, 2018
Trading Symbol	pfie
Amendment Flag	false
Entity Central Index Key	1,289,636
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		47,551,787
Entity Filer Category	Smaller Reporting Company
Document Fiscal Year Focus	2,018
Document Fiscal Period Focus	Q1

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($)	Mar. 31, 2018	Dec. 31, 2017
CURRENT ASSETS
Cash and cash equivalents	$ 12,196,578	$ 11,445,799
Short-term investments	300,345	300,817
Short-term investments - other	4,165,493	4,009,810
Accounts receivable, net	8,717,607	8,069,255
Inventories, net	7,265,623	6,446,083
Prepaid expenses & other current assets	357,532	437,304
Total Current Assets	33,003,178	30,709,068
LONG-TERM ASSETS
Net deferred tax asset	184,223	72,817
Long-term investments	8,435,512	8,517,182
Long-term investments - other	400,000	0
Property and equipment, net	7,118,971	7,197,499
Goodwill	997,701	997,701
Intangible assets, net	475,133	494,792
Total Long-Term Assets	17,611,540	17,279,991
TOTAL ASSETS	50,614,718	47,989,059
CURRENT LIABILITIES
Accounts payable	1,727,194	1,780,977
Accrued vacation	230,399	196,646
Accrued liabilities	927,116	1,044,284
Income taxes payable	1,512,844	919,728
Total Current Liabilities	4,397,553	3,941,635
TOTAL LIABILITIES	4,397,553	3,941,635
STOCKHOLDERS' EQUITY
Preferred shares: $0.001 par value, 10,000,000 shares authorized: no shares issued or outstanding	0	0
Common shares: $0.001 par value, 100,000,000 shares authorized: 54,131,158 issued and 48,806,416 outstanding at March 31, 2018 and 53,931,167 issued and 48,606,425 outstanding at December 31, 2017	54,131	53,931
Treasury stock, at cost	(6,890,349)	(6,890,349)
Additional paid-in capital	28,101,146	27,535,469
Accumulated other comprehensive loss	(2,472,826)	(2,200,462)
Retained earnings	27,425,063	25,548,835
TOTAL STOCKHOLDERS' EQUITY	46,217,165	44,047,424
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 50,614,718	$ 47,989,059

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2018	Dec. 31, 2017
Stock Transactions, Parenthetical Disclosures [Abstract]
Preferred stock, par value (dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (shares)	10,000,000	10,000,000
Preferred stock, shares issued (shares)	0	0
Preferred stock, shares outstanding (shares)	0	0
Common stock, par value (dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (shares)	100,000,000	100,000,000
Common stock, shares issued (shares)	54,131,158	53,931,167
Common stock, shares outstanding (shares)	48,806,416	48,606,425

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations and Other Comprehensive Income (Loss) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
REVENUES
Sales of goods, net	$ 11,454,615	$ 7,292,228
Sales of services, net	715,103	532,267
Total Revenues	12,169,718	7,824,495
COST OF SALES
Cost of goods sold-product	5,557,710	3,055,300
Cost of goods sold-services	481,867	402,022
Total Cost of Goods Sold	6,039,577	3,457,322
GROSS PROFIT	6,130,141	4,367,173
OPERATING EXPENSES
General and administrative expenses	3,341,903	2,948,089
Research and development	403,220	198,966
Depreciation and amortization expense	128,717	149,076
Total Operating Expenses	3,873,840	3,296,131
INCOME FROM OPERATIONS	2,256,301	1,071,042
OTHER INCOME (EXPENSE)
Gain on sale of fixed assets	64,831	2,101
Other expense	(1,792)	(5,414)
Interest income	50,708	31,278
Total Other Income	113,747	27,965
INCOME BEFORE INCOME TAXES	2,370,048	1,099,007
INCOME TAX EXPENSE	493,820	498,936
NET INCOME	1,876,228	600,071
OTHER COMPREHENSIVE INCOME (LOSS)
Foreign currency translation gain (loss)	(239,129)	75,113
Unrealized gains (losses) on investments	(33,235)	36,288
Total Other Comprehensive Income (Loss)	(272,364)	111,401
NET COMPREHENSIVE INCOME	$ 1,603,864	$ 711,472
BASIC EARNINGS (LOSS) PER SHARE (dollars per share)	$ 0.04	$ 0.01
FULLY DILUTED EARNINGS (LOSS) PER SHARE (dollars per share)	$ 0.04	$ 0.01
BASIC WEIGHTED AVG NUMBER OF SHARES OUTSTANDING (shares)	48,670,305	50,632,275
FULLY DILUTED WEIGHTED AVG NUMBER OF SHARES OUTSTANDING (shares)	49,744,101	51,287,405

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Cash Flows - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
OPERATING ACTIVITIES
Net income	$ 1,876,228	$ 600,071
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense	220,245	237,116
Gain on sale of fixed assets	(64,731)	(2,101)
Bad debt expense	63,566	45,313
Stock awards issued for services	581,619	181,318
Changes in operating assets and liabilities:
Changes in accounts receivable	(746,179)	249,844
Changes in income taxes receivable/payable	591,277	568,065
Changes in inventories	(863,148)	(399,410)
Changes in prepaid expenses	104,008	33,698
Changes in deferred tax asset/liability	(111,406)	(49,520)
Changes in accounts payable and accrued liabilities	(198,540)	500,552
Net Cash Provided by Operating Activities	1,452,939	1,964,946
INVESTING ACTIVITIES
Proceeds from sale of equipment	139,763	30,451
Purchase of investments	(484,142)	(500,408)
Purchase of fixed assets	(234,778)	(52,720)
Net Cash Used in Investing Activities	(579,157)	(522,677)
FINANCING ACTIVITIES
Value of equity awards surrendered by employees for tax liability	(83,600)	0
Cash received in exercise of stock options	74,241	0
Purchase of Treasury stock	0	(318,904)
Net Cash Used in Financing Activities	(9,359)	(318,904)
Effect of exchange rate changes on cash	(113,644)	20,158
NET INCREASE IN CASH	750,779	1,143,523
CASH AT BEGINNING OF PERIOD	11,445,799	7,669,644
CASH AT END OF PERIOD	12,196,578	8,813,167
CASH PAID FOR:
Interest	0	0
Income taxes	$ 0	$ 78

CONDENSED FINANCIAL STATEMENTS

CONDENSED FINANCIAL STATEMENTS	3 Months Ended
	Mar. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
CONDENSED FINANCIAL STATEMENTS	CONDENSED FINANCIAL STATEMENTS Except where the context otherwise requires, all references herein to the "Company," "we," "us," "our," or similar words and phrases are to Profire Energy, Inc. and its wholly owned subsidiary, taken together. The accompanying financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows at March 31, 2018 and for all periods presented herein have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("US GAAP") have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the Company's audited financial statements contained in its annual report on Form 10-K for the year ended December 31, 2017 ("Form 10-K"). The results of operations for the periods ended March 31, 2018 and 2017 are not necessarily indicative of the operating results for the full years.

ORGANIZATION AND SUMMARY OF SIG

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	3 Months Ended
	Mar. 31, 2018
Accounting Policies [Abstract]
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization and Line of Business This Organization and Summary of Significant Accounting Policies of the Company is presented to assist in understanding the Company's consolidated financial statements. The Company's accounting policies conform to US GAAP. Profire Energy, Inc. was established on October 9, 2008 upon the closing of transactions contemplated by an Acquisition Agreement among The Flooring Zone, Inc., Profire Combustion, Inc. (the "Subsidiary") and the shareholders of the Subsidiary. Following the closing of the transactions, The Flooring Zone, Inc. was renamed Profire Energy, Inc. (the "Parent"). Pursuant to the terms and conditions of the Acquisition Agreement, 35,000,000 shares of restricted common stock of the Parent were issued to the three shareholders of the Subsidiary in exchange for all of the issued and outstanding shares of the Subsidiary. As a result of the transaction, the Subsidiary became a wholly-owned subsidiary of the Parent and the shareholders of the Subsidiary became the controlling shareholders of the Parent. The Parent was incorporated on May 5, 2003 in the State of Nevada. The Subsidiary was incorporated on March 6, 2002 in the province of Alberta, Canada. The Company provides burner and chemical management products and services for the oil and gas industry primarily in the Canadian and US markets. Significant Accounting Policies There have been no changes to the significant accounting policies of the Company from the information provided in Note 1 of the Notes to the Consolidated Financial Statements in the Company's most recent Form 10-K, except as discussed below. Revenue Recognition In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update No. 2014-09 (Topic 606) "Revenue from Contracts with Customers," which supersedes the revenue recognition requirements in Topic 605 “Revenue Recognition” (Topic 605). Topic 606 requires entities to recognize revenue when control of the promised goods or services is transferred to customers. The amount of revenue recognized must reflect the consideration the entity expects to be entitled to receive in exchange for those goods or services. We adopted Topic 606 as of January 1, 2018 using the modified retrospective transition method. See Note 6 for further details. Recent Accounting Pronouncements The Company has evaluated all recent accounting pronouncements and determined that the adoption of pronouncements applicable to the Company has not had or is not expected to have a material impact on the Company's financial position, results of operations or cash flows. Reclassification Certain balances in previously issued consolidated financial statements have been reclassified to be consistent with the current period presentation. The reclassification had no impact on financial position, net income, or stockholders' equity.

INVENTORY

INVENTORY	3 Months Ended
	Mar. 31, 2018
Inventory Disclosure [Abstract]
INVENTORY	INVENTORY Inventories consisted of the following at each balance sheet date: As of March 31, 2018 December 31, 2017 Raw materials $ 183,617 $ 225,735 Finished goods 7,393,606 6,417,494 Work in process — — Subtotal 7,577,223 6,643,229 Reserve for Obsolescence (311,600 ) (197,146 ) Total $ 7,265,623 $ 6,446,083

STOCKHOLDERS' EQUITY

STOCKHOLDERS' EQUITY	3 Months Ended
	Mar. 31, 2018
Stockholders' Equity Note [Abstract]
STOCKHOLDERS' EQUITY	STOCKHOLDERS' EQUITY As of March 31, 2018 , and December 31, 2017 , the Company held 5,324,742 shares of its common stock in treasury at a total cost of $ 6,890,349 . All purchases of treasury stock have been made at market rates. On March 2, 2018 , the Compensation Committee (the "Committee") of the Company's Board of Directors approved the "2018 Executive Incentive Plan," ("EIP") for Brenton Hatch, the Company's President and Chief Executive Officer, and Ryan Oviatt, the Company's Chief Financial Officer. The EIP provides for the potential award of bonuses to participants based on the Company's financial performance in fiscal year 2018 . Under the terms of the EIP, each participating executive officer has been assigned a target bonus amount for fiscal year 2018 . The target bonus amount for Mr. Hatch is $ 400,000 and the target bonus for Mr. Oviatt is $ 87,500 . Under no circumstance can the participants receive more than two times the assigned target bonus. The bonus amounts, if any, will be paid 50% in cash and 50% in shares of restricted stock based on the volume weighted average price per share over the five trading days prior to the date of the final determination of the bonus amount. The stock portion of the bonuses is intended to constitute an award under the Company's 2014 Equity Incentive Plan. Performance metrics for the awards include revenues, net income, and free cash flow. On March 29, 2018 , the EIP was amended to add Cameron Tidball, the Company's Chief Business Development Officer, with a target bonus of $ 81,900 and Jay Fugal, the Company's Vice President of Operations, with a target bonus of $ 40,000 under the same terms. The maximum compensation expense that could be incurred for this award is $ 1,218,800 and this award will be accounted for as a liability until it is settled. As of March 31, 2018 , the amount of expense expected to be incurred is $ 662,985 . On March 2, 2018 , the Committee approved as a long-term incentive plan (the "LTIP") the grant of a restricted stock unit award to Mr. Oviatt, pursuant to the Company's 2014 Equity Incentive Plan. The agreement is similar to the Long-Term Incentive Plan that was approved in 2017 and provides for the award of up to 70,423 restricted stock units ("Units") under the Company's 2014 Equity Incentive Plan. Subject to performance vesting requirements, each Unit entitles Mr. Oviatt to receive one share of the Company's common stock. The performance period of the LTIP begins on January 1, 2018 and terminates on December 31, 2020 . Performance metrics include three-year average revenue growth rate, operating income as a percentage of revenue, and return on invested capital. On March 30, 2018 , the LTIP was amended to additionally grant Mr. Tidball up to 34,285 shares and Mr. Fugal up to 29,304 shares under the same terms. The maximum compensation expense that could be incurred for this award is $ 317,876 . As of March 31, 2018 , the amount of expense expected to be incurred is $ 151,089 . On March 6, 2018 , our Board of Directors approved a grant of 91,000 restricted stock units ("RSUs") to various employees. The awards vest annually over five years and will result in total compensation expense of $ 193,830 to be recognized over the vesting period. On the same day, the Board of Directors also approved a one-time executive bonus of $ 511,000 to Mr. Hatch and $ 121,500 to Mr. Oviatt for a combined total value of $ 632,500 . The bonuses were paid 50% in cash and 50% in restricted stock. The stock portion of the bonus payment was paid by granting awards of shares of restricted stock under the Company's 2014 Equity Incentive Plan, which was fully vested on the date of grant. The number of shares awarded was 119,953 for Mr. Hatch and 28,521 for Mr. Oviatt.

SEGMENT INFORMATION

SEGMENT INFORMATION	3 Months Ended
	Mar. 31, 2018
Segment Reporting [Abstract]
SEGMENT INFORMATION	SEGMENT INFORMATION The Company operates in the United States and Canada. Segment information for these geographic areas is as follows: For the Three Months Ended March 31, Sales 2018 2017 Canada $ 1,298,832 $ 1,083,898 United States 10,870,886 6,740,597 Total Consolidated $ 12,169,718 $ 7,824,495 For the Three Months Ended March 31, Profit (Loss) 2018 2017 Canada $ (434,667 ) $ (582,046 ) United States 2,310,895 1,182,117 Total Consolidated $ 1,876,228 $ 600,071 As of Long-lived assets March 31, 2018 December 31, 2017 Canada $ 1,444,598 $ 1,508,943 United States 16,166,942 15,771,048 Total Consolidated $ 17,611,540 $ 17,279,991

REVENUE

REVENUE	3 Months Ended
	Mar. 31, 2018
Revenue from Contract with Customer [Abstract]
REVENUE	REVENUE On January 1, 2018 , we adopted Topic 606. We elected to use the modified retrospective approach for contracts that were not completed as of January 1, 2018 . Results for reporting periods beginning after January 1, 2018 are presented in accordance with Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting method under Topic 605. As a result of applying the new standard, there were no changes to any financial statement line item. Performance Obligations Our performance obligations include delivery of product, installation of product, and servicing of product. We recognize product revenue performance obligations when the product is delivered to the customer. Upon delivery and at that point in time, the control of the product is transferred to the customer. When product is installed or serviced, we recognize service revenue when the work has been completed and we are entitled to bill the customer for the hours worked. We do not engage in transactions acting as an agent. We usually satisfy our performance obligations within a few months of entering into the contract. Depending on the size of the project, the performance obligations could be satisfied sooner or later. Our customers have the right to return certain unused and unopened products within 90 days and incur an appropriate restocking fee. We provide a warranty on some of our products ranging from 90 days to two years , depending on the product. The amount accrued for expected returns and warranty claims was immaterial as of March 31, 2018 . Contract Balances All of the current contracts are expected to be completed within one year . We have elected to use the practical expedient in 340-40-25-4 (regarding the incremental costs of obtaining a contact) for costs related to contracts that are estimated to be complete within one year and as a result, we have not recognized a contract asset account. If we had chosen not to use this practical expedient, we would not expect a material difference in the contract balances. We also did not have any contract liabilities because we have not received any payments in advance of recognizing revenue. Significant Judgments For most revenue contracts, we invoice the customer when the performance obligation is satisfied and payment is due 30 days later. Occasionally, other terms such as progress billings or longer terms are agreed to on a case-by-case basis. We do not have significant financing components, non-cash consideration, or variable consideration. We estimate the transaction price between performance obligations based on stand-alone product prices. As of March 31, 2018 , we had $ 3,665,646 allocated to performance obligations that were unsatisfied and we expect those obligations to be satisfied within one year . Disaggregation of Revenue All revenue recognized in the income statement is considered to be revenue from contracts with customers. The table below shows revenue by category: Category Three Months Ended March 31, 2018 Electronics $ 4,807,030 Manufactured 954,779 Re-Sell 5,692,806 Other 715,103 $ 12,169,718

BASIC AND DILUTED EARNINGS PER

BASIC AND DILUTED EARNINGS PER SHARE	3 Months Ended
	Mar. 31, 2018
Earnings Per Share [Abstract]
BASIC AND DILUTED EARNINGS PER SHARE	BASIC AND DILUTED EARNINGS PER SHARE The following table is a reconciliation of the numerator and denominators used in the earnings per share calculation: For the Three Months Ended March 31, 2018 2017 Income (Numerator) Weighted Average Shares (Denominator) Per-Share Income (Numerator) Weighted Average Shares (Denominator) Per-Share Basic EPS Net income available to common stockholders 1,876,228 48,670,305 $ 0.04 600,071 50,632,275 $ 0.01 Effect of Dilutive Securities Stock options & RSUs — 1,073,796 — 655,130 Diluted EPS Net income available to common stockholders + assumed conversions 1,876,228 49,744,101 $ 0.04 600,071 51,287,405 $ 0.01 Options to purchase 266,000 and 1,199,000 shares of common stock at a weighted average price of $ 3.89 and $ 2.03 per share were outstanding during the three months ended March 31, 2018 and 2017 , respectively, but were not included in the computation of diluted EPS because the impact of these shares would be antidilutive. These options, which expire between November 2019 and May 2020 , were still outstanding at March 31, 2018 .

CONTINGENCIES

CONTINGENCIES	3 Months Ended
	Mar. 31, 2018
Commitments and Contingencies Disclosure [Abstract]
CONTINGENCIES	CONTINGENCIES As discussed in our most recent 10-K, during Q1 2018 we became aware of a mechanical issue affecting one of the actuators we manufacture and sell. The actuator is an ancillary product sold separately from our burner-management systems (BMS) and chemical-management systems (CMS). We do not believe the mechanical issue presents any significant safety concerns for customers. At the time we filed our 10-K, we did not have enough information to effectively estimate the warranty costs we expected to incur, so we disclosed a wide possible range. Since filing the 10-K, we have been able to collect additional data regarding solutions to the problem and we currently estimate the warranty costs related to this product will be approximately $ 65,000 . This amount has been accrued and is included in accrued liabilities on the balance sheet.

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	3 Months Ended
	Mar. 31, 2018
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	SUBSEQUENT EVENTS In accordance with ASC 855 "Subsequent Events," Company Management reviewed all material events through May 9, 2018 , and the following subsequent events occurred: On May 7, 2018 , Profire Energy, Inc. (the “Company”) entered into Stock Redemption Agreements (the “Agreement”) with Hatch Family Holdings Company, LLC, which is wholly owned by Brenton W. Hatch, the Company’s Chairman and Chief Executive Officer and Harold Albert, the Company’s co-founder and member of the Board of Directors. Pursuant to the Agreement, the Company repurchased 638,977 shares (“Redemption Shares") of its Common Stock from each of Messrs. Hatch and Albert, for an aggregate cash purchase price of $ 3,999,996.02 , which amount represents the number of Redemption Shares multiplied by the 30-day average of the closing price for the Profire Common Stock as reported by the Nasdaq Capital Market for the 30 trading days immediately preceding May 2, 2018 . Mr. Hatch entered into this agreement to sell approximately 5% of his shares of the Company in order to diversify his holdings and to take advantage of estate planning opportunities. After the sale of these shares Mr. Hatch still owns 11,930,976 shares representing approximately 25% of the Company’s total shares outstanding and continues to be the largest shareholder of the Company. Mr. Albert decided to enter into this agreement to sell just under 6% of his shares of the Company to diversify his investment portfolio as part of his previously communicated retirement from day-to-day operations of the Company. After the sale of these shares Mr. Albert still owns 10,453,448 shares representing approximately 22% of the Company’s total shares outstanding.

ORGANIZATION AND SUMMARY OF S15

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	3 Months Ended
	Mar. 31, 2018
Accounting Policies [Abstract]
Revenue Recognition	Revenue Recognition In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update No. 2014-09 (Topic 606) "Revenue from Contracts with Customers," which supersedes the revenue recognition requirements in Topic 605 “Revenue Recognition” (Topic 605). Topic 606 requires entities to recognize revenue when control of the promised goods or services is transferred to customers. The amount of revenue recognized must reflect the consideration the entity expects to be entitled to receive in exchange for those goods or services. We adopted Topic 606 as of January 1, 2018 using the modified retrospective transition method. Performance Obligations Our performance obligations include delivery of product, installation of product, and servicing of product. We recognize product revenue performance obligations when the product is delivered to the customer. Upon delivery and at that point in time, the control of the product is transferred to the customer. When product is installed or serviced, we recognize service revenue when the work has been completed and we are entitled to bill the customer for the hours worked. We do not engage in transactions acting as an agent. We usually satisfy our performance obligations within a few months of entering into the contract. Depending on the size of the project, the performance obligations could be satisfied sooner or later. Our customers have the right to return certain unused and unopened products within 90 days and incur an appropriate restocking fee. We provide a warranty on some of our products ranging from 90 days to two years , depending on the product. The amount accrued for expected returns and warranty claims was immaterial as of March 31, 2018 . Contract Balances All of the current contracts are expected to be completed within one year . We have elected to use the practical expedient in 340-40-25-4 (regarding the incremental costs of obtaining a contact) for costs related to contracts that are estimated to be complete within one year and as a result, we have not recognized a contract asset account. If we had chosen not to use this practical expedient, we would not expect a material difference in the contract balances. We also did not have any contract liabilities because we have not received any payments in advance of recognizing revenue. Significant Judgments For most revenue contracts, we invoice the customer when the performance obligation is satisfied and payment is due 30 days later. Occasionally, other terms such as progress billings or longer terms are agreed to on a case-by-case basis. We do not have significant financing components, non-cash consideration, or variable consideration. We estimate the transaction price between performance obligations based on stand-alone product prices.
Recent Accounting Pronouncements	Recent Accounting Pronouncements The Company has evaluated all recent accounting pronouncements and determined that the adoption of pronouncements applicable to the Company has not had or is not expected to have a material impact on the Company's financial position, results of operations or cash flows.
Reclassification	Reclassification Certain balances in previously issued consolidated financial statements have been reclassified to be consistent with the current period presentation. The reclassification had no impact on financial position, net income, or stockholders' equity.

INVENTORY (Tables)

INVENTORY (Tables)	3 Months Ended
	Mar. 31, 2018
Inventory Disclosure [Abstract]
Schedule of Inventory	Inventories consisted of the following at each balance sheet date: As of March 31, 2018 December 31, 2017 Raw materials $ 183,617 $ 225,735 Finished goods 7,393,606 6,417,494 Work in process — — Subtotal 7,577,223 6,643,229 Reserve for Obsolescence (311,600 ) (197,146 ) Total $ 7,265,623 $ 6,446,083

SEGMENT INFORMATION (Tables)

SEGMENT INFORMATION (Tables)	3 Months Ended
	Mar. 31, 2018
Segment Reporting [Abstract]
Schedule of Segment Information for Geographic Areas	Segment information for these geographic areas is as follows: For the Three Months Ended March 31, Sales 2018 2017 Canada $ 1,298,832 $ 1,083,898 United States 10,870,886 6,740,597 Total Consolidated $ 12,169,718 $ 7,824,495 For the Three Months Ended March 31, Profit (Loss) 2018 2017 Canada $ (434,667 ) $ (582,046 ) United States 2,310,895 1,182,117 Total Consolidated $ 1,876,228 $ 600,071 As of Long-lived assets March 31, 2018 December 31, 2017 Canada $ 1,444,598 $ 1,508,943 United States 16,166,942 15,771,048 Total Consolidated $ 17,611,540 $ 17,279,991

REVENUE (Tables)

REVENUE (Tables)	3 Months Ended
	Mar. 31, 2018
Revenue from Contract with Customer [Abstract]
Disaggregation of Revenue by Product Line	The table below shows revenue by category: Category Three Months Ended March 31, 2018 Electronics $ 4,807,030 Manufactured 954,779 Re-Sell 5,692,806 Other 715,103 $ 12,169,718

BASIC AND DILUTED EARNINGS PE19

BASIC AND DILUTED EARNINGS PER SHARE (Tables)	3 Months Ended
	Mar. 31, 2018
Earnings Per Share [Abstract]
Schedule of Earnings Per Share, Basic and Diluted	The following table is a reconciliation of the numerator and denominators used in the earnings per share calculation: For the Three Months Ended March 31, 2018 2017 Income (Numerator) Weighted Average Shares (Denominator) Per-Share Income (Numerator) Weighted Average Shares (Denominator) Per-Share Basic EPS Net income available to common stockholders 1,876,228 48,670,305 $ 0.04 600,071 50,632,275 $ 0.01 Effect of Dilutive Securities Stock options & RSUs — 1,073,796 — 655,130 Diluted EPS Net income available to common stockholders + assumed conversions 1,876,228 49,744,101 $ 0.04 600,071 51,287,405 $ 0.01

ORGANIZATION AND SUMMARY OF S20

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details)	Oct. 09, 2008shareholdershares
Accounting Policies [Abstract]
Restricted common stock issued (shares) | shares	35,000,000
Restricted common stock of Parent issued to shareholders (shareholders) | shareholder	3

INVENTORY (Details)

INVENTORY (Details) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Inventory Disclosure [Abstract]
Raw materials	$ 183,617	$ 225,735
Finished goods	7,393,606	6,417,494
Work in process	0	0
Subtotal	7,577,223	6,643,229
Reserve for Obsolescence	(311,600)	(197,146)
Total	$ 7,265,623	$ 6,446,083

STOCKHOLDERS' EQUITY (Details)

STOCKHOLDERS' EQUITY (Details)	Mar. 06, 2018USD ($)shares	Mar. 02, 2018USD ($)shares	Mar. 31, 2018USD ($)shares	Mar. 30, 2018shares	Mar. 29, 2018USD ($)	Dec. 31, 2017USD ($)shares
Stockholders' Equity Note [Abstract]
Treasury stock (in shares) | shares			5,324,742			5,324,742
Treasury stock, at cost			$ 6,890,349			$ 6,890,349
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of bonus paid in cash	0.5	0.5
Percentage of bonus paid In restricted stock	0.5	0.5
Number of trading days required to determine bonus paid in restricted stock		5 days
One-time executive bonus approved and paid	$ 632,500
Certain Executive Officers and Vice President | Target bonus
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Executive compensation, maximum compensation expense		$ 1,218,800	662,985
Chief Executive Officer
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Target bonus		400,000
One-time executive bonus approved and paid	$ 511,000
Chief Executive Officer | Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted | shares	119,953
Chief Financial Officer
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Target bonus		$ 87,500
Number of restricted stock units authorized (up to) (shares) | shares		70,423
One-time executive bonus approved and paid	$ 121,500
Chief Financial Officer | Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted | shares	28,521
Chief Business Development Officer
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Target bonus					$ 81,900
Number of restricted stock units authorized (up to) (shares) | shares				34,285
Vice President of Operations
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Target bonus					$ 40,000
Number of restricted stock units authorized (up to) (shares) | shares				29,304
Employees | Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted | shares	91,000
Annual vesting period	5 years
Compensation expense	$ 193,830
LTIP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Executive compensation, maximum compensation expense		$ 317,876	$ 151,089

SEGMENT INFORMATION (Details)

SEGMENT INFORMATION (Details) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017
Segment Reporting Information [Line Items]
Sales	$ 12,169,718	$ 7,824,495
Profit (Loss)	1,876,228	600,071
Long-lived assets	17,611,540		$ 17,279,991
Canada
Segment Reporting Information [Line Items]
Sales	1,298,832	1,083,898
Profit (Loss)	(434,667)	(582,046)
Long-lived assets	1,444,598		1,508,943
United States
Segment Reporting Information [Line Items]
Sales	10,870,886	6,740,597
Profit (Loss)	2,310,895	$ 1,182,117
Long-lived assets	$ 16,166,942		$ 15,771,048

REVENUE - Narrative (Details)

REVENUE - Narrative (Details)	3 Months Ended
	Mar. 31, 2018USD ($)
Product Warranty Liability [Line Items]
Period of time that customers have right to return certain unused and unopened products	90 days
Period when contracts are expected to be completed	1 year
Performance obligations that were unsatisfied	$ 3,665,646
Minimum
Product Warranty Liability [Line Items]
Warranty provided on some products	90 days
Maximum
Product Warranty Liability [Line Items]
Warranty provided on some products	2 years

REVENUE - Disaggregation of Rev

REVENUE - Disaggregation of Revenue (Details)	3 Months Ended
	Mar. 31, 2018USD ($)
Disaggregation of Revenue [Line Items]
Revenue recognized in the income statement by product line	$ 12,169,718
Electronics
Disaggregation of Revenue [Line Items]
Revenue recognized in the income statement by product line	4,807,030
Manufactured
Disaggregation of Revenue [Line Items]
Revenue recognized in the income statement by product line	954,779
Re-Sell
Disaggregation of Revenue [Line Items]
Revenue recognized in the income statement by product line	5,692,806
Other
Disaggregation of Revenue [Line Items]
Revenue recognized in the income statement by product line	$ 715,103

BASIC AND DILUTED EARNINGS PE26

BASIC AND DILUTED EARNINGS PER SHARE (Details) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Income (Numerator)
Net income available to common stockholders	$ 1,876,228	$ 600,071
Stock options & RSUs	0	0
Net income available to common stockholders assumed conversions	$ 1,876,228	$ 600,071
Weighted Average Shares (Denominator)
Weighted average basic shares outstanding (shares)	48,670,305	50,632,275
Effect of Dilutive Securities, Stock options & RSUs (shares)	1,073,796	655,130
Weighted average diluted shares outstanding (shares)	49,744,101	51,287,405
Per-Share Amount
Basic earnings per share (dollars per share)	$ 0.04	$ 0.01
Diluted earnings per share (dollars per share)	$ 0.04	$ 0.01
Antidilutive securities excluded from computation of earnings per share (shares)	266,000	1,199,000
Weighted average price of options (dollars per share)	$ 3.89	$ 2.03

CONTINGENCIES (Details)

CONTINGENCIES (Details) $ in Thousands	Mar. 31, 2018USD ($)
Ancillary product, actuator
Loss Contingencies [Line Items]
Estimated warranty costs accrued	$ 65

SUBSEQUENT EVENTS (Details)

SUBSEQUENT EVENTS (Details) - USD ($)	May 07, 2018	Mar. 31, 2018	Dec. 31, 2017
Subsequent Event [Line Items]
Common stock, shares outstanding (shares)		48,806,416	48,606,425
Subsequent Event
Subsequent Event [Line Items]
Shares repurchased during period (shares)	638,977
Value of stock repurchased during period	$ 3,999,996.02
Chief Executive Officer | Subsequent Event
Subsequent Event [Line Items]
Percentage ownership of stock redeemed	5.00%
Common stock, shares outstanding (shares)	11,930,976
Common stock ownership, percentage	25.00%
Director | Subsequent Event
Subsequent Event [Line Items]
Percentage ownership of stock redeemed	6.00%
Common stock, shares outstanding (shares)	10,453,448
Common stock ownership, percentage	22.00%