Profire Energy (PFIE) 10-Q 6 May 20 2020 Q1 Quarterly report Financial data

Cover Page

Cover Page - shares	3 Months Ended
	Mar. 31, 2020	May 04, 2020
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2020
Document Transition Report	false
Entity File Number	001-36378
Entity Registrant Name	PROFIRE ENERGY, INC.
Entity Incorporation, State or Country Code	NV
Entity Tax Identification Number	20-0019425
Entity Address, Address Line One	321 South 1250 West, Suite 1
Entity Address, City or Town	Lindon
Entity Address, State or Province	UT
Entity Address, Postal Zip Code	84042
City Area Code	801
Local Phone Number	796-5127
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Title of 12(b) Security	Common, $0.001 Par Value
Trading Symbol	PFIE
Security Exchange Name	NASDAQ
Entity Common Stock, Shares Outstanding		47,685,661
Amendment Flag	false
Entity Central Index Key	0001289636
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q1

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($)	Mar. 31, 2020	Dec. 31, 2019
CURRENT ASSETS
Cash and cash equivalents	$ 7,230,330	$ 7,358,856
Short-term investments	1,727,483	1,222,053
Short-term investments - other	2,400,000	2,600,000
Accounts receivable, net	4,410,935	5,597,701
Inventories, net (note 3)	8,815,111	9,571,807
Prepaid expenses and other current assets	1,398,596	1,672,422
Income tax receivable	0	77,385
Total Current Assets	25,982,455	28,100,224
LONG-TERM ASSETS
Long-term investments	6,552,150	7,399,963
Financing right-of-use asset	88,035	107,991
Property and equipment, net	11,913,754	12,071,019
Intangible assets, net	1,938,919	1,989,782
Goodwill	2,579,381	2,579,381
Total Long-Term Assets	23,072,239	24,148,136
TOTAL ASSETS	49,054,694	52,248,360
CURRENT LIABILITIES
Accounts payable	1,460,159	2,633,520
Accrued liabilities (note 4)	1,296,997	2,089,391
Current financing lease liability (note 5)	50,067	59,376
Income taxes payable	439,592	403,092
Total Current Liabilities	3,246,815	5,185,379
LONG-TERM LIABILITIES
Net deferred income tax liability	324,711	439,275
Long-term financing lease liability (note 5)	40,761	52,120
TOTAL LIABILITIES	3,612,287	5,676,774
STOCKHOLDERS' EQUITY (note 6)
Preferred stock: $0.001 par value, 10,000,000 shares authorized: no shares issued or outstanding	0	0
Common stock: $0.001 par value, 100,000,000 shares authorized: 51,098,039 issued and 47,685,661 outstanding at March 31, 2020, and 50,824,355 issued and 47,411,977 outstanding at December 31, 2019	51,098	50,824
Treasury stock, at cost	(5,353,019)	(5,353,019)
Additional paid-in capital	29,922,760	29,584,172
Accumulated other comprehensive loss	(3,518,237)	(2,415,460)
Retained earnings	24,339,805	24,705,069
TOTAL STOCKHOLDERS' EQUITY	45,442,407	46,571,586
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 49,054,694	$ 52,248,360
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	10,000,000	10,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	100,000,000	100,000,000
Common stock, shares issued (in shares)	51,098,039	50,824,355
Common stock, shares outstanding (in shares)	47,685,661	47,411,977

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2020	Dec. 31, 2019
Stock Transactions, Parenthetical Disclosures [Abstract]
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	10,000,000	10,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	100,000,000	100,000,000
Common stock, shares issued (in shares)	51,098,039	50,824,355
Common stock, shares outstanding (in shares)	47,685,661	47,411,977

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations and Other Comprehensive Income (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
REVENUES (note 8)
Total Revenues	$ 7,447,142	$ 10,833,058
COST OF SALES
Total Cost of Goods Sold	4,282,466	5,068,186
GROSS PROFIT	3,164,676	5,764,872
OPERATING EXPENSES
General and administrative expenses	3,272,538	3,161,530
Research and development	409,726	349,058
Depreciation and amortization expense	147,472	116,223
Total Operating Expenses	3,829,736	3,626,811
INCOME (LOSS) FROM OPERATIONS	(665,060)	2,138,061
OTHER INCOME (EXPENSE)
Gain on sale of fixed assets	0	16,930
Other income (expense)	347	(551)
Interest income	74,393	91,703
Total Other Income	74,740	108,082
INCOME (LOSS) BEFORE INCOME TAXES	(590,320)	2,246,143
INCOME TAX BENEFIT (EXPENSE)	225,056	(577,525)
NET INCOME (LOSS)	(365,264)	1,668,618
OTHER COMPREHENSIVE INCOME (LOSS)
Foreign currency translation gain (loss)	(945,423)	149,415
Unrealized gains (losses) on investments	(157,354)	68,752
Total Other Comprehensive Income (Loss)	(1,102,777)	218,167
COMPREHENSIVE INCOME (LOSS)	$ (1,468,041)	$ 1,886,785
BASIC EARNINGS PER SHARE (in dollars per share)	$ (0.01)	$ 0.04
FULLY DILUTED EARNINGS PER SHARE (in dollars per share)	$ (0.01)	$ 0.03
BASIC WEIGHTED AVG NUMBER OF SHARES OUTSTANDING (in shares)	47,492,441	47,437,424
FULLY DILUTED WEIGHTED AVG NUMBER OF SHARES OUTSTANDING (in shares)	47,492,441	48,084,390
Product
REVENUES (note 8)
Total Revenues	$ 6,860,958	$ 10,198,635
COST OF SALES
Total Cost of Goods Sold	3,833,682	4,570,988
Service
REVENUES (note 8)
Total Revenues	586,184	634,423
COST OF SALES
Total Cost of Goods Sold	$ 448,784	$ 497,198

Condensed Consolidated Statem_2

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
OPERATING ACTIVITIES
Net income	$ (365,264)	$ 1,668,618
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization expense	259,801	249,889
Gain on sale of fixed assets	0	(16,930)
Bad debt expense	133,803	177,906
Stock awards issued for services	66,348	66,714
Changes in operating assets and liabilities:
Accounts receivable	1,314,939	654,710
Income taxes receivable/payable	107,561	(234,042)
Inventories	537,668	656,988
Prepaid expenses	168,546	(239,395)
Deferred tax asset/liability	(114,564)	123,764
Accounts payable and accrued liabilities	(1,837,760)	(499,721)
Net Cash Provided by Operating Activities	271,078	2,608,501
INVESTING ACTIVITIES
Proceeds from sale of equipment	0	18,400
Sale of investments	387,326	647,739
Purchase of fixed assets	(525,384)	(443,883)
Net Cash Provided by (Used in) Investing Activities	(138,058)	222,256
FINANCING ACTIVITIES
Value of equity awards surrendered by employees for tax liability	(148,879)	(143,022)
Cash received in exercise of stock options	2,020	0
Purchase of treasury stock	0	(1,333,578)
Principal paid towards lease liability	(19,089)	(15,718)
Net Cash Used in Financing Activities	(165,948)	(1,492,318)
Effect of exchange rate changes on cash	(95,598)	16,507
NET CHANGE IN CASH	(128,526)	1,354,946
CASH AT BEGINNING OF PERIOD	7,358,856	10,101,932
CASH AT END OF PERIOD	7,230,330	11,456,878
CASH PAID FOR:
Interest	872	1,411
Income taxes	0	711,524
NON-CASH FINANCING AND INVESTING ACTIVITIES:
Common stock issued in settlement of accrued bonuses	$ 419,373	$ 379,861

Condensed Consolidated Statem_3

Condensed Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($)	Total	Common Stock	Additional Paid-In Capital	Accumulated Other Comprehensive Income (Loss)	Treasury Stock	Retained Earnings
Balance, beginning of period (in shares) at Dec. 31, 2018		47,932,305
Balance, beginning of period at Dec. 31, 2018	$ 45,255,859	$ 49,708	$ 28,027,742	$ (2,895,683)	$ (2,609,485)	$ 22,683,577
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock based compensation	66,714		66,714
Stock issued in exercise of stock options (in shares)		2,483
Stock issued in exercise of stock options	0	$ 2	(2)
Stock issued in settlement of RSUs (in shares)		148,723
Stock issued in settlement of RSUs	379,861	$ 149	379,712
Tax withholdings paid related to stock based compensation	(143,022)		(143,022)
Treasury stock repurchased (in shares)		(775,287)
Treasury stock repurchased	(1,333,578)				(1,333,578)
Foreign currency translation	149,415			149,415
Unrealized gains on investments	68,752			68,752
Net income	1,668,618					1,668,618
Balance, end of period (in shares) at Mar. 31, 2019		47,308,224
Balance, end of period at Mar. 31, 2019	46,112,619	$ 49,859	28,331,144	(2,677,516)	(3,943,063)	24,352,195
Balance, beginning of period (in shares) at Dec. 31, 2019		47,411,977
Balance, beginning of period at Dec. 31, 2019	46,571,586	$ 50,824	29,584,172	(2,415,460)	(5,353,019)	24,705,069
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock based compensation	66,348		66,348
Stock issued in exercise of stock options (in shares)		2,000
Stock issued in exercise of stock options	2,020	$ 2	2,018
Stock issued in settlement of RSUs (in shares)		271,684
Stock issued in settlement of RSUs	419,373	$ 272	419,101
Tax withholdings paid related to stock based compensation	(148,879)		(148,879)
Foreign currency translation	(945,423)			(945,423)
Unrealized gains on investments	(157,354)			(157,354)
Net income	(365,264)					(365,264)
Balance, end of period (in shares) at Mar. 31, 2020		47,685,661
Balance, end of period at Mar. 31, 2020	$ 45,442,407	$ 51,098	$ 29,922,760	$ (3,518,237)	$ (5,353,019)	$ 24,339,805

CONDENSED FINANCIAL STATEMENTS

CONDENSED FINANCIAL STATEMENTS	3 Months Ended
	Mar. 31, 2020
Condensed Financial Information Disclosure [Abstract]
CONDENSED FINANCIAL STATEMENTS	CONDENSED FINANCIAL STATEMENTS Except where the context otherwise requires, all references herein to the "Company," "Profire," "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, stockholders' equity, and cash flows at March 31, 2020 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, 2019 ("Form 10-K"). The results of operations for the three month periods ended March 31, 2020 and 2019 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, 2020
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 condensed consolidated financial statements. The Company's accounting policies conform to "US GAAP." The Company provides burner-management products, solutions and services for the oil and gas industry primarily in the US and Canadian 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. 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 within the Condensed Consolidated Statements of Cash Flows. The reclassification had no impact on financial position, net income, or stockholders' equity.

INVENTORIES

INVENTORIES	3 Months Ended
	Mar. 31, 2020
Inventory Disclosure [Abstract]
INVENTORIES	INVENTORIES Inventories consisted of the following at each balance sheet date: As of March 31, 2020 December 31, 2019 Raw materials $ 191,734 $ — Finished goods 9,592,002 10,517,858 Work in process — — Subtotal 9,783,736 10,517,858 Reserve for obsolescence (968,625) (946,051) Total $ 8,815,111 $ 9,571,807

ACCRUED LIABILITIES

ACCRUED LIABILITIES	3 Months Ended
	Mar. 31, 2020
Other Liabilities Disclosure [Abstract]
ACCRUED LIABILITIES	ACCRUED LIABILITIES Accrued liabilities consisted of the following at each balance sheet date: As of March 31, 2020 December 31, 2019 Employee-related payables $ 881,527 $ 1,657,826 Warranty liabilities 160,589 166,301 Acquisition liabilities 17,596 162,907 Other 237,285 102,357 Total $ 1,296,997 $ 2,089,391

STOCKHOLDERS' EQUITY

STOCKHOLDERS' EQUITY	3 Months Ended
	Mar. 31, 2020
Equity [Abstract]
STOCKHOLDERS' EQUITY	STOCKHOLDERS' EQUITY As of March 31, 2020 and December 31, 2019, the Company held 3,412,378 shares of its common stock in treasury at a total cost of $5,353,019, respectively. 2020 EIP and LTIP Due to market uncertainties including those caused by the COVID-19 pandemic, The Board of Directors of the Company (the "Board") and the Company's executives have elected to not adopt an executive incentive plan or long-term incentive plan for 2020. The Company's Board and executives believe this will help to align the Company's cost structure in the short-term, with the current extraordinary market conditions, in an effort to return to profitability. 2019 EIP On April 22, 2019, the Board approved the 2019 Executive Incentive Plan (the “2019 EIP”) for Brenton W. Hatch, the Company’s President and Chief Executive Officer, Ryan W. Oviatt, the Company’s Chief Financial Officer, Cameron M. Tidball, the Company’s Chief Business Development Officer, Jay G. Fugal, the Company’s Vice President of Operations, and Patrick D. Fisher, the Company’s Vice President of Product Development. The 2019 EIP provided for the potential award of bonuses to the participants based on the Company’s financial performance in fiscal year 2019. On March 4, 2020, the Company's Board of Directors approved a one-time executive bonus in the amount of $828,787 for meeting targets pursuant to the 2019 EIP. Half of the bonus was paid in cash and half of the bonus was settled by issuing 343,748 shares of common stock under the Company's 2014 Equity Incentive Plan, as amended (the "2014 Plan") which was fully vested on the date of grant. T he stock portion of the bonuses constitutes an award under the Company’s 2014 Equity Incentive Plan, as amended (the “Plan”). Under the terms of the EIP, each participating executive officer was assigned a target bonus amount for fiscal 2019. The target bonus amount for Mr. Hatch was $412,000, the target bonus amount for Mr. Oviatt was $90,125, the target bonus amount for Mr. Tidball was $84,357, the target bonus for Mr. Fugal was $41,200, and the target bonus for Mr. Fisher was $29,142. Under no circumstance can the participants receive more than two times the target bonus amount assigned to such participant. Participants were eligible to receive bonuses based upon reaching or exceeding performance goals established by the Board or its Compensation Committee for fiscal 2019. The performance goals in the EIP are based on the Company’s total revenue, net income, free cash flow, and product development milestones. Each of these performance goals were weighted 25% in calculating bonus amounts. 2019 LTIP On April 22, 2019 the Board also adopted the 2019 Long-Term Incentive plan (the "2019 LTIP") for certain of the Company's executive officers. The 2019 LTIP consists of total awards of up to 66,213 restricted stock units (“Units”) to Mr. Oviatt, up to 51,646 Units to Mr. Tidball, up to 35,313 Units to Mr. Fugal, and up to 24,862 Units to Mr. Fisher pursuant to two separate Restricted Stock Unit Award Agreements to be entered between the Company and each participant under the 2014 Plan. One agreement covers 33% of each award recipient’s Units that are subject to time-based vesting, and the other agreement covers the remaining 67% of such award recipient’s Units that may vest based on performance metrics. Upon vesting, the award agreements entitle the award recipients to receive one share of the Company’s common stock for each vested Unit. The vesting period of the 2019 LTIP began on January 1, 2019 and terminates on December 31, 2021. On March 4, 2020, the Company's Board of Directors approved a one-time executive bonus that was settled by issuing 16,689 shares of common stock for meeting targets pursuant to the previously announced "2017 Long-Term Incentive Plan", which shares were issued under the Company's 2014 Equity Incentive Plan. These shares were fully vested as of March 4, 2020. 2019 RSUs On March 14, 2019, the Board approved a grant of 85,000 restricted stock units ("RSUs") to various employees. The awards vest annually over five years and will result in a total compensation expense of $149,600 to be recognized over the vesting period. On June 12, 2019, the Board approved a grant of 183,942 RSUs to Independent Directors. Half of the RSUs vest immediately on the date of grant and the remaining 50% of the RSUs will vest on the first anniversary of the grant date or at the Company's next Annual Meeting of Stockholders, whichever is earlier. The awards will result in total compensation expense of $252,000 to be recognized over the vesting period. 2020 Stock Options On March 17, 2020 (the "Grant Date"), the Board approved a grant of options to purchase 115,200 shares of the Company's common stock at a strike price of $0.81 to various employees (the "Options"). The Options terminate four years from the Grant Date and the Options shall become exercisable as to 1/3 of the shares of common stock covered thereby on each anniversary of the Grant Date for the next three years. The Options will result in a total compensation expense of $40,280 to be recognized over the vesting period.

SEGMENT INFORMATION

SEGMENT INFORMATION	3 Months Ended
	Mar. 31, 2020
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 2020 2019 Canada $ 1,023,722 $ 935,638 United States 6,423,420 9,897,420 Total Consolidated $ 7,447,142 $ 10,833,058 For the Three Months Ended March 31, Profit (Loss) 2020 2019 Canada $ (322,069) $ (382,040) United States (43,195) 2,050,658 Total Consolidated $ (365,264) $ 1,668,618 As of Long-Lived Assets March 31, 2020 December 31, 2019 Canada $ 5,822,346 $ 6,068,061 United States 17,249,893 18,080,075 Total Consolidated $ 23,072,239 $ 24,148,136

REVENUE

REVENUE	3 Months Ended
	Mar. 31, 2020
Revenue from Contract with Customer [Abstract]
REVENUE	REVENUE Performance Obligations Our performance obligations include providing product and servicing our product. We recognize product revenue performance obligations in most cases when the product is delivered to the customer. Occasionally, if we are shipping the product on a customer’s account, we recognize revenue when the product has been shipped. At that point in time, the control of the product is transferred to the customer. When we perform service work, we apply the practical expedient that allows us to recognize service revenue when we have the right to invoice the customer for the work completed. We do not engage in transactions acting as an agent. The time needed to complete our performance obligations varies based on the size of the project; however, we typically satisfy our performance obligations within a few months of entering into the applicable sales contract or service contract. Our customers have the right to return certain unused and unopened products within 90 days for an appropriate restocking fee. We provide a warranty on some of our products ranging from 90 days to 2 years, depending on the product. The amount accrued for expected returns and warranty claims was immaterial as of March 31, 2020. Contract Balances We have elected to use the practical expedient in ASC 340-40-25-4 (regarding recognition of the incremental costs of obtaining a contract) for costs related to contracts that are estimated to be completed within one year. All of our current sales contracts and service contracts are expected to be completed 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 material contract liabilities because we typically do not receive payments in advance of recognizing revenue. 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:

BASIC AND DILUTED EARNINGS PER

BASIC AND DILUTED EARNINGS PER SHARE	3 Months Ended
	Mar. 31, 2020
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, 2020 2019 Income (Numerator) Weighted Average Shares (Denominator) Per-Share Income (Numerator) Weighted Average Shares (Denominator) Per-Share Basic EPS Net income (loss) available to common stockholders $ (365,264) 47,492,441 $ (0.01) $ 1,668,618 47,437,424 $ 0.04 Effect of Dilutive Securities Stock options & RSUs — — — 646,966 Diluted EPS Net income available to common stockholders + assumed conversions $ (365,264) 47,492,441 $ (0.01) $ 1,668,618 48,084,390 $ 0.03 Stock options and RSU's to purchase 784,769 shares of common stock at a weighted average price of $1.28 per share were outstanding during the three months ended March 31, 2020, but were not included in the computation of diluted EPS because the impact of these shares would be antidilutive. These stock options and RSU's, which expire between May 2020 and March 2024, were still outstanding at March 31, 2020. Stock options to purchase 245,600 shares of common stock at a weighted average price of $3.88 per share were outstanding during the three months ended March 31, 2019, 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, 2019.

LEASES (Notes)

LEASES (Notes)	3 Months Ended
	Mar. 31, 2020
Leases [Abstract]
LEASES	LEASES We have leases for office equipment and office space. The leases for office equipment are classified as financing leases and the typical term is 36 months. We have the option to extend most office equipment leases, but we do not intend to do so. Accordingly, no extensions have been recognized in the right-of-use asset or lease liability. The office equipment lease payments are not variable and the lease agreements do not include any non-lease components, residual value guarantees, or restrictions. There are no interest rates implicit in the office equipment lease agreements, so we have used our incremental borrowing rate to determine the discount rate to be applied to our financing leases. The weighted average discount rate applied to our financing leases is 4.50% and the weighted average remaining lease term is 22.4 months. The following table shows the components of financing lease cost: Financing Lease Cost For the Three Months Ended March 31, 2020 Amortization of right-of-use assets $ 18,376 Interest on lease liabilities 872 Total financing lease cost $ 19,248 The following table reconciles future minimum lease payments to the discounted finance lease liability: Years ending December 31, Amount 2020 - remaining $ 41,147 2021 40,921 2022 12,803 2023 — 2024 — Thereafter — Total future minimum lease payments $ 94,871 Less: Amount representing interest 4,043 Present value of future payments $ 90,828 Current portion $ 50,067 Long-term portion $ 40,761 Because our office space leases are short-term, we have elected not to recognize them on our balance sheet under the short-term recognition exemption. During the three months ended March 31, 2020, we recognized $19,472 in short-term lease costs associated with office space leases.

ACQUISITIONS (Notes)

ACQUISITIONS (Notes)	3 Months Ended
	Mar. 31, 2020
Business Combinations [Abstract]
ACQUISITIONS	ACQUISITIONS Millstream Energy Products On June 18, 2019, our wholly-owned subsidiary, Profire Combustion, Inc., acquired substantially all the assets from Millstream Energy Products, LTD., a Canadian corporation ("MEP"). MEP is a privately-held Canadian company that develops a line of high-performance burners, economy burners, flame arrestor housings, secondary air control plates, and other related combustion components. MEP’s full line of products became available for sale by Profire’s existing sales team immediately after closing of the transaction. These products complement our burner-management system (BMS) product offerings and should enable us to supply a larger portion of the total BMS package sale to our customers. The acquisition was accounted for as a business combination in accordance with ASC 805, Business Combinations . The purchase price of $2,219,782 was funded through existing cash. Of this cash purchase amount $140,257 was held back for 6 months pending satisfaction of seller obligations under the purchase agreement and was settled with the seller on February 20, 2020. The seller is also entitled to receive a 4.5% royalty on proprietary MEP product revenue generated during the next five years. Profire hired a valuation firm to perform the purchase price allocation based on the net assets received and the price paid. Based on the fair value of the net assets at the time of purchase, the Company recorded intangible assets in the amount of $990,000 and goodwill of $17,681. Intangible assets include customer relationships, the trade name and developed technology. The purchase price calculation is a follows: Cash $ 2,079,525 Liabilities 140,257 $ 2,219,782 The following table summarizes the estimated fair value of the assets acquired and liabilities assumed at the date of purchase: Accounts receivable $ 207,145 Inventory 1,119,143 Intangible assets 990,000 Goodwill 17,681 Accounts payable (114,187) $ 2,219,782 Transaction and related costs directly related to the acquisition of MEP, consisting primarily of professional fees and integration expenses, have amounted to approximately $136,811, were expensed as incurred and are included in general and administrative expenses. Midflow Services On August 5, 2019, we acquired all of the outstanding membership interests of Midflow Services, LLC ("Midflow"). Midflow is based in Millersburg, Ohio. Midflow provides packaged combustion solutions and services to the upstream and midstream oil and gas industry. The acquisition was accounted for as a business combination in accordance with ASC 805, Business Combinations . The purchase price of $3,439,371 was funded through a combination of existing cash and shares of the Company's common stock. The cash portion of the purchase price includes $500,000 placed in an escrow account for 12 months pending satisfaction of certain obligations under the purchase agreement. Profire hired a valuation firm to perform the purchase price allocation based on the net assets received and the price paid. Based on the fair value of the net assets at the time of purchase, the Company recorded intangible assets in the amount of $1,110,000 and goodwill of $1,564,000. Intangible assets include customer relationships, the trade name and developed technology. The purchase price calculation is as follows: Cash $ 2,419,371 Stock 1,020,000 $ 3,439,371 The following table summarizes the estimated fair value of the assets acquired and liabilities assumed at the date of purchase: Cash $ 172,850 Accounts receivable 324,989 Inventory 269,746 Prepaid expenses 13,180 Property and equipment 126,000 Intangible assets 1,110,000 Goodwill 1,564,000 Accounts payable (134,956) Accrual liabilities (6,438) $ 3,439,371 Transaction costs directly related to the acquisition of Midflow, consisting primarily of professional fees and integration expenses, amounted to approximately $44,087. All of these costs were expensed as incurred and are included in general and administrative expenses.

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	3 Months Ended
	Mar. 31, 2020
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	SUBSEQUENT EVENTS On April 21, 2020, the Company secured funding pursuant to the Paycheck Protection Program of the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act (the “PPP Loan”). Under the PPP Loan the Company received $1,074,030, which bear interest at a rate of 1.00% per annum. The PPP Loan was made through the Bank of America (the “Bank”). The PPP Loan is evidenced by a note dated April 16, 2020, which contains customary events of default relating to, among other things, payment defaults and breaches of representations and warranties. We may prepay the PPP Loan at any time prior to maturity with no prepayment penalties. On April 23, 2020, the Small Business Administration, in consultation with the Department of Treasury, issued new guidance that creates uncertainty regarding the qualification requirements for PPP loans, especially for public companies. In light of the new guidance, executive management and the Board determined it appropriate to repay the principal and interest on the PPP Loan. In accordance with ASC 855 "Subsequent Events," Company Management reviewed all material events through the date this report was issued and there were no other subsequent events to report.

ORGANIZATION AND SUMMARY OF S_2

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	3 Months Ended
	Mar. 31, 2020
Accounting Policies [Abstract]
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 within the Condensed Consolidated Statements of Cash Flows. The reclassification had no impact on financial position, net income, or stockholders' equity.
Revenue	Performance Obligations Our performance obligations include providing product and servicing our product. We recognize product revenue performance obligations in most cases when the product is delivered to the customer. Occasionally, if we are shipping the product on a customer’s account, we recognize revenue when the product has been shipped. At that point in time, the control of the product is transferred to the customer. When we perform service work, we apply the practical expedient that allows us to recognize service revenue when we have the right to invoice the customer for the work completed. We do not engage in transactions acting as an agent. The time needed to complete our performance obligations varies based on the size of the project; however, we typically satisfy our performance obligations within a few months of entering into the applicable sales contract or service contract. Our customers have the right to return certain unused and unopened products within 90 days for an appropriate restocking fee. We provide a warranty on some of our products ranging from 90 days to 2 years, depending on the product. The amount accrued for expected returns and warranty claims was immaterial as of March 31, 2020. Contract Balances We have elected to use the practical expedient in ASC 340-40-25-4 (regarding recognition of the incremental costs of obtaining a contract) for costs related to contracts that are estimated to be completed within one year. All of our current sales contracts and service contracts are expected to be completed 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 material contract liabilities because we typically do not receive payments in advance of recognizing revenue.

INVENTORY (Tables)

INVENTORY (Tables)	3 Months Ended
	Mar. 31, 2020
Inventory Disclosure [Abstract]
Schedule of Inventory	Inventories consisted of the following at each balance sheet date: As of March 31, 2020 December 31, 2019 Raw materials $ 191,734 $ — Finished goods 9,592,002 10,517,858 Work in process — — Subtotal 9,783,736 10,517,858 Reserve for obsolescence (968,625) (946,051) Total $ 8,815,111 $ 9,571,807

Other Liabilities (Tables)

Other Liabilities (Tables)	3 Months Ended
	Mar. 31, 2020
Other Liabilities Disclosure [Abstract]
Schedule of Accrued Liabilities	Accrued liabilities consisted of the following at each balance sheet date: As of March 31, 2020 December 31, 2019 Employee-related payables $ 881,527 $ 1,657,826 Warranty liabilities 160,589 166,301 Acquisition liabilities 17,596 162,907 Other 237,285 102,357 Total $ 1,296,997 $ 2,089,391

SEGMENT INFORMATION (Tables)

SEGMENT INFORMATION (Tables)	3 Months Ended
	Mar. 31, 2020
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 2020 2019 Canada $ 1,023,722 $ 935,638 United States 6,423,420 9,897,420 Total Consolidated $ 7,447,142 $ 10,833,058 For the Three Months Ended March 31, Profit (Loss) 2020 2019 Canada $ (322,069) $ (382,040) United States (43,195) 2,050,658 Total Consolidated $ (365,264) $ 1,668,618 As of Long-Lived Assets March 31, 2020 December 31, 2019 Canada $ 5,822,346 $ 6,068,061 United States 17,249,893 18,080,075 Total Consolidated $ 23,072,239 $ 24,148,136

REVENUE (Tables)

REVENUE (Tables)	3 Months Ended
	Mar. 31, 2020
Revenue from Contract with Customer [Abstract]
Disaggregation of Revenue by Product Line	The table below shows revenue by category: For the Three Months Ended March 31, 2020 2019 Electronics $ 2,657,087 $ 4,646,597 Manufactured 400,858 430,593 Re-Sell 3,803,013 5,121,445 Service 586,184 634,423 Total Revenue $ 7,447,142 $ 10,833,058

BASIC AND DILUTED EARNINGS PE_2

BASIC AND DILUTED EARNINGS PER SHARE (Tables)	3 Months Ended
	Mar. 31, 2020
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, 2020 2019 Income (Numerator) Weighted Average Shares (Denominator) Per-Share Income (Numerator) Weighted Average Shares (Denominator) Per-Share Basic EPS Net income (loss) available to common stockholders $ (365,264) 47,492,441 $ (0.01) $ 1,668,618 47,437,424 $ 0.04 Effect of Dilutive Securities Stock options & RSUs — — — 646,966 Diluted EPS Net income available to common stockholders + assumed conversions $ (365,264) 47,492,441 $ (0.01) $ 1,668,618 48,084,390 $ 0.03 Stock options and RSU's to purchase 784,769 shares of common stock at a weighted average price of $1.28 per share were outstanding during the three months ended March 31, 2020, but were not included in the computation of diluted EPS because the impact of these shares would be antidilutive. These stock options and RSU's, which expire between May 2020 and March 2024, were still outstanding at March 31, 2020. Stock options to purchase 245,600 shares of common stock at a weighted average price of $3.88 per share were outstanding during the three months ended March 31, 2019, 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, 2019.

LEASES (Tables)

LEASES (Tables)	3 Months Ended
	Mar. 31, 2020
Leases [Abstract]
Components of Financing Lease Cost	The following table shows the components of financing lease cost: Financing Lease Cost For the Three Months Ended March 31, 2020 Amortization of right-of-use assets $ 18,376 Interest on lease liabilities 872 Total financing lease cost $ 19,248
Future Minimum Lease Payments to Discounted Finance Lease Liability	The following table reconciles future minimum lease payments to the discounted finance lease liability: Years ending December 31, Amount 2020 - remaining $ 41,147 2021 40,921 2022 12,803 2023 — 2024 — Thereafter — Total future minimum lease payments $ 94,871 Less: Amount representing interest 4,043 Present value of future payments $ 90,828 Current portion $ 50,067 Long-term portion $ 40,761

ACQUISITION (Tables)

ACQUISITION (Tables)	3 Months Ended
	Mar. 31, 2020
Business Combinations [Abstract]
Business Combinations	The purchase price calculation is a follows: Cash $ 2,079,525 Liabilities 140,257 $ 2,219,782 The following table summarizes the estimated fair value of the assets acquired and liabilities assumed at the date of purchase: Accounts receivable $ 207,145 Inventory 1,119,143 Intangible assets 990,000 Goodwill 17,681 Accounts payable (114,187) $ 2,219,782 The purchase price calculation is as follows: Cash $ 2,419,371 Stock 1,020,000 $ 3,439,371 The following table summarizes the estimated fair value of the assets acquired and liabilities assumed at the date of purchase: Cash $ 172,850 Accounts receivable 324,989 Inventory 269,746 Prepaid expenses 13,180 Property and equipment 126,000 Intangible assets 1,110,000 Goodwill 1,564,000 Accounts payable (134,956) Accrual liabilities (6,438) $ 3,439,371

ORGANIZATION AND SUMMARY OF S_3

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($)	Mar. 31, 2020	Dec. 31, 2019
Accounting Policies [Abstract]
Financing right-of-use asset	$ 88,035	$ 107,991
Finance lease liability	$ 90,828

INVENTORY (Details)

INVENTORY (Details) - USD ($)	Mar. 31, 2020	Dec. 31, 2019
Inventory Disclosure [Abstract]
Raw materials	$ 191,734	$ 0
Finished goods	9,592,002	10,517,858
Work in process	0	0
Subtotal	9,783,736	10,517,858
Reserve for obsolescence	(968,625)	(946,051)
Total	$ 8,815,111	$ 9,571,807

Schedule of Accrued Liabilities

Schedule of Accrued Liabilities (Details) - USD ($)	Mar. 31, 2020	Dec. 31, 2019	Mar. 31, 2019
Other Liabilities Disclosure [Abstract]
Employee-related payables	$ 881,527		$ 1,657,826
Acquisition liabilities	160,589		166,301
Other	17,596		162,907
Warranty liabilities	237,285		102,357
Total	$ 1,296,997	$ 2,089,391	$ 2,089,391

STOCKHOLDERS' EQUITY (Details)

STOCKHOLDERS' EQUITY (Details)	Mar. 17, 2020USD ($)$ / sharesshares	Mar. 04, 2020USD ($)shares	Jun. 12, 2019USD ($)shares	Apr. 22, 2019USD ($)shares	Mar. 14, 2019USD ($)shares	Mar. 31, 2020USD ($)shares	Dec. 31, 2019USD ($)	Apr. 22, 2019CAD ($)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Treasury stock (in shares) | shares						3,412,378
Treasury stock, at cost | $						$ 5,353,019	$ 5,353,019
Number of shares approved (in shares) | shares	115,200
Strike price (in dollars per share) | $ / shares	$ 0.81
Tranche One
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting percentage	33.33%
Tranche Two
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting percentage	33.33%
Tranche Three
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting percentage	33.33%
Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period	3 years
Expiration period	4 years
Compensation expense | $	$ 40,280
2019 EIP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Maximum target bonus multiplier				2				2
Performance goal weight				25.00%				25.00%
2019 LTIP | Tranche One
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of award covered by metric				33.00%				33.00%
2019 LTIP | Tranche Two
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of award covered by metric				67.00%				67.00%
2019 LTIP | Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted (shares) | shares			183,942		85,000
Award vesting period					5 years
Unrecognized compensation cost | $			$ 252,000		$ 149,600
Award vesting percentage			50.00%
Chief Executive Officer | 2019 EIP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Executive compensation target bonus payout | $				$ 412,000
Chief Business Development Officer | 2019 EIP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Executive compensation target bonus payout | $				$ 84,357
Chief Business Development Officer | 2019 LTIP | Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted (shares) | shares				51,646
Chief Financial Officer | 2019 EIP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Executive compensation target bonus payout | $				$ 90,125
Chief Financial Officer | 2019 LTIP | Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted (shares) | shares				66,213
Vice President of Operations | 2019 EIP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Executive compensation target bonus payout | $				$ 41,200
Vice President of Operations | 2019 LTIP | Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted (shares) | shares				35,313
Vice President of Product Development | 2019 EIP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Executive compensation target bonus payout | $								$ 29,142
Vice President of Product Development | 2019 LTIP | Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted (shares) | shares				24,862
Executive Officer | 2019 EIP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
One-time executive bonus | $		$ 828,787
Executive Officer | 2014 EIP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
One-time executive bonus (in shares) | shares		343,748
Executive Officer | 2017 LTIP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
One-time executive bonus (in shares) | shares		16,689

SEGMENT INFORMATION (Details)

SEGMENT INFORMATION (Details) - USD ($)	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019
Segment Reporting Information [Line Items]
Sales	$ 7,447,142	$ 10,833,058
Profit (Loss)	(365,264)	1,668,618
Long-Lived Assets	23,072,239		$ 24,148,136
Canada
Segment Reporting Information [Line Items]
Sales	1,023,722	935,638
Profit (Loss)	(322,069)	(382,040)
Long-Lived Assets	5,822,346		6,068,061
United States
Segment Reporting Information [Line Items]
Sales	6,423,420	9,897,420
Profit (Loss)	(43,195)	$ 2,050,658
Long-Lived Assets	$ 17,249,893		$ 18,080,075

REVENUE - Disaggregation of Rev

REVENUE - Disaggregation of Revenue (Details) - USD ($)	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Disaggregation of Revenue [Line Items]
Return period	90 days
Total Revenues	$ 7,447,142	$ 10,833,058
Minimum
Disaggregation of Revenue [Line Items]
Product warranty term	90 days
Maximum
Disaggregation of Revenue [Line Items]
Product warranty term	2 years
Electronics
Disaggregation of Revenue [Line Items]
Total Revenues	$ 2,657,087	4,646,597
Manufactured
Disaggregation of Revenue [Line Items]
Total Revenues	400,858	430,593
Re-Sell
Disaggregation of Revenue [Line Items]
Total Revenues	3,803,013	5,121,445
Service
Disaggregation of Revenue [Line Items]
Total Revenues	$ 586,184	$ 634,423

BASIC AND DILUTED EARNINGS PE_3

BASIC AND DILUTED EARNINGS PER SHARE (Details) - USD ($)	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Income (Numerator)
Net income (loss) available to common stockholders	$ (365,264)	$ 1,668,618
Stock options & RSUs	0	0
Net income available to common stockholders + assumed conversions	$ (365,264)	$ 1,668,618
Weighted Average Shares (Denominator)
Weighted average basic shares outstanding (in shares)	47,492,441	47,437,424
Effect of Dilutive Securities, Stock options & RSUs (shares)	0	646,966
Weighted average diluted shares outstanding (in shares)	47,492,441	48,084,390
Per-Share Amount
Basic earnings per share (in dollars per share)	$ (0.01)	$ 0.04
Diluted earnings per share (in dollars per share)	$ (0.01)	$ 0.03
Antidilutive securities excluded from computation of earnings per share (in shares)	784,769	245,600
Weighted average (in dollars per share)	$ 1.28	$ 3.88

LEASES - Narrative (Details)

LEASES - Narrative (Details)	3 Months Ended
	Mar. 31, 2020USD ($)
Leases [Abstract]
Lease term	36 months
Weighted average discount rate	4.50%
Weighted average remaining lease term	22 years 4 months 24 days
Short-term lease cost	$ 19,472

LEASES - Components of Financin

LEASES - Components of Financing Lease Cost (Details)	3 Months Ended
	Mar. 31, 2020USD ($)
Leases [Abstract]
Amortization of right-of-use assets	$ 18,376
Interest on lease liabilities	872
Total financing lease cost	$ 19,248

LEASES - Future Minimum Lease P

LEASES - Future Minimum Lease Payments to Discounted Finance Lease Liability (Details) - USD ($)	Mar. 31, 2020	Dec. 31, 2019
Years ending December 31,
2020 - remaining	$ 41,147
2021	40,921
2022	12,803
2023	0
2024	0
Thereafter	0
Total future minimum lease payments	94,871
Less: Amount representing interest	4,043
Present value of future payments	90,828
Current portion	50,067	$ 59,376
Long-term portion	$ 40,761	$ 52,120

ACQUISITION - Narrative (Detail

ACQUISITION - Narrative (Details) - USD ($)	Aug. 05, 2019	Jun. 18, 2019	Mar. 31, 2020	Dec. 31, 2019
Business Acquisition [Line Items]
Goodwill			$ 2,579,381	$ 2,579,381
MEP
Business Acquisition [Line Items]
Acquisition purchase price		$ 2,219,782
Stock		$ 140,257
Consideration held for seller obligations, period		6 months
Royalty percentage		4.50%
Royalty Revenue Period		5 years
Intangible assets		$ 990,000
Goodwill		17,681
Acquisition related costs		$ 136,811
Midflow Services, LLC
Business Acquisition [Line Items]
Acquisition purchase price	$ 3,439,371
Stock	1,020,000
Goodwill	1,564,000
Acquisition related costs	44,087
Escrow deposit	500,000
Intangible assets	$ 1,110,000

ACQUISITION (Details)

ACQUISITION (Details) - USD ($)	Aug. 05, 2019	Jun. 18, 2019	Mar. 31, 2020	Dec. 31, 2019
Business Acquisition [Line Items]
Goodwill			$ 2,579,381	$ 2,579,381
MEP
Business Acquisition [Line Items]
Cash		$ 2,079,525
Stock		140,257
Acquisition purchase price		2,219,782
Accounts receivable		207,145
Inventory		1,119,143
Goodwill		17,681
Accounts payable		(114,187)
Net		$ 2,219,782
Midflow Services, LLC
Business Acquisition [Line Items]
Cash	$ 2,419,371
Stock	1,020,000
Acquisition purchase price	3,439,371
Cash	172,850
Accounts receivable	324,989
Inventory	269,746
Prepaid expenses	13,180
Property and equipment	126,000
Intangible assets	1,110,000
Goodwill	1,564,000
Accounts payable	(134,956)
Accrual liabilities	(6,438)
Net	$ 3,439,371

SUBSEQUENT EVENTS - Narrative (

SUBSEQUENT EVENTS - Narrative (Details) - Subsequent Event - PPP Loan - Forecast	8 Months Ended
	Dec. 31, 2020USD ($)
Subsequent Event [Line Items]
Proceeds from issuance of long-term debt	$ 1,074,030
Interest rate	1.00%