Document_And_Entity_Informatio
Document And Entity Information | 9 Months Ended | |
Sep. 30, 2014 | Nov. 14, 2014 | |
Document Information [Line Items] | ' | ' |
Entity Registrant Name | 'Superior Drilling Products, Inc. | ' |
Entity Central Index Key | '0001600422 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Trading Symbol | 'SDPI | ' |
Entity Common Stock, Shares Outstanding | ' | 17,291,646 |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 30-Sep-14 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Document Fiscal Year Focus | '2014 | ' |
Consolidated_Condensed_Balance
Consolidated Condensed Balance Sheets (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Current assets | ' | ' |
Cash | $5,961,705 | $11,256 |
Accounts receivable | 4,259,777 | 2,978,666 |
Prepaid expenses | 212,666 | 182,530 |
Inventory | 1,128,560 | 96,028 |
Other current assets | 144,756 | 61,038 |
Total current assets | 11,707,464 | 3,329,518 |
Property, plant and equipment, net | 15,357,149 | 15,048,871 |
Real estate investments | 0 | 2,187,926 |
Intangible assets, net | 14,084,444 | 0 |
Goodwill | 7,802,903 | 0 |
Note receivable | 8,296,717 | 0 |
Other assets | 465,603 | 194,935 |
Total assets | 57,714,280 | 20,761,250 |
Current liabilities | ' | ' |
Accounts payable | 811,263 | 445,947 |
Accrued expenses | 1,924,693 | 277,579 |
Income tax payable | 1,607 | 0 |
Payable to Founders | 1,860,290 | 0 |
Current deferred tax liability | 16,612 | 0 |
Current portion of capital lease obligation | 283,805 | 258,235 |
Current portion of guaranteed debt obligation | 0 | 4,395,637 |
Current portion of long-term debt | 10,105,601 | 3,316,578 |
Total current liabilities | 15,003,871 | 8,693,976 |
Deferred tax liability | 534,004 | 0 |
Other liabilities | 7,500 | 0 |
Capital lease obligation, less current portion | 654,834 | 871,252 |
Long-term debt, less current portion | 11,420,030 | 10,939,216 |
Total liabilities | 27,620,239 | 20,504,444 |
Commitments and contingencies (Note 10) | ' | ' |
Stockholders' equity | ' | ' |
Common stock - $0.001 par value; 100,000,000 shares authorized; 17,291,646 and 1,000 shares outstanding, respectively | 17,292 | 1 |
Additional paid-in-capital | 30,693,542 | 256,806 |
Stock subscription receivable | 0 | -1 |
Retained deficit | -616,793 | 0 |
Total stockholders' equity | 30,094,041 | 256,806 |
Total liabilities and stockholders' equity | $57,714,280 | $20,761,250 |
Consolidated_Condensed_Balance1
Consolidated Condensed Balance Sheets [Parenthetical] (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Common Stock, Par or Stated Value Per Share | $0.00 | $0.00 |
Common Stock, Shares Authorized | 100,000,000 | 100,000,000 |
Common Stock, Shares, Outstanding | 17,291,646 | 1,000 |
Consolidated_Condensed_Stateme
Consolidated Condensed Statements of Operations (USD $) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |||
Revenue | $5,750,739 | $2,999,634 | $13,949,883 | $8,797,250 | ||
Operating costs and expenses | ' | ' | ' | ' | ||
Cost of revenue | 1,804,872 | 781,659 | 4,401,417 | 3,232,879 | ||
Selling, general and administrative | 3,145,149 | 819,706 | 5,725,178 | 1,877,006 | ||
Depreciation and amortization | 1,166,682 | 356,257 | 2,133,405 | 824,310 | ||
Total operating expenses | 6,116,703 | 1,957,622 | 12,260,000 | 5,934,195 | ||
Operating income (loss) | -365,964 | 1,042,012 | 1,689,883 | 2,863,055 | ||
Other income (expense) | ' | ' | ' | ' | ||
Interest income | 75,242 | 0 | 98,314 | 0 | ||
Interest expense | -696,686 | -401,801 | -1,663,464 | -765,285 | ||
Other income | 101,348 | 129,080 | 286,001 | 273,208 | ||
Loss on disposition of assets | -297,470 | -52,704 | -284,176 | -54,204 | ||
Change in guaranteed debt | 0 | -172,201 | -45,834 | -258,302 | ||
Total other expense | -817,566 | -497,626 | -1,609,159 | -804,583 | ||
Income (loss) before income taxes | -1,183,530 | 544,386 | 80,724 | 2,058,472 | ||
Income tax (credit) expense | -525,822 | 0 | 552,223 | 0 | ||
Net income (loss) | ($657,708) | $544,386 | ($471,499) | $2,058,472 | ||
Basic loss per common share (in dollars per share) | ($0.04) | ' | [1] | ($0.04) | ' | [1] |
Basic and dilutive weighted average common shares outstanding (in shares) | 17,291,646 | 0 | 12,665,122 | 0 | ||
[1] | Information is not comparable for the three and nine months ended September 30, 2013 as a result of the Reorganization of the Company on May 22, 2014. |
Consolidated_Condensed_Stateme1
Consolidated Condensed Statements Of Cash Flows (USD $) | 9 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Cash Flows From Operating Activities | ' | ' |
Net income (loss) | ($471,499) | $2,058,472 |
Adjustments to reconcile net income (loss) to net cash provided in operating activities: | ' | ' |
Depreciation and amortization expense | 2,133,405 | 824,310 |
Amortization of debt discount | 322,723 | 0 |
Deferred tax benefit | 550,616 | 0 |
Change in guaranteed debt | 45,837 | 258,302 |
Loss on disposition of assets | 284,176 | 54,205 |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable | -1,281,111 | -1,428,998 |
Inventory | -532,842 | 0 |
Prepaid expenses and other current assets | -104,854 | -52,091 |
Other assets | -262,515 | 21,376 |
Accounts payable and accrued expenses | 2,014,039 | 280,949 |
Other liabilities | 7,500 | 0 |
Net Cash Provided by Operating Activities | 2,705,475 | 2,016,525 |
Cash Flows From Investing Activities | ' | ' |
Purchases of property, plant and equipment | -851,122 | -158,434 |
Proceeds from sale of fixed assets | 0 | 26,641 |
Note receivable to Tronco | -8,296,717 | 0 |
Purchase of Hard Rock assets | -12,500,000 | 0 |
Net Cash Used in Investing Activities | -21,647,839 | -131,793 |
Cash Flows From Financing Activities | ' | ' |
Principal payments on debt | -2,333,613 | -457,845 |
Principal payments on capital lease obligations | -190,848 | -168,309 |
Proceeds received from borrowings on debt | 2,000,000 | 227,720 |
Proceeds received from issuance of common stock | 31,050,000 | 0 |
Principal payments on long-term debt - related party | 0 | -53,925 |
Initial Public Offering costs | -3,578,865 | 0 |
Capital contributions | 0 | 673,629 |
Capital distributions | -2,053,861 | -2,138,049 |
Net Cash Provided (Used) in Financing Activities | 24,892,813 | -1,916,779 |
Net Increase (decrease) in Cash | 5,950,449 | -32,047 |
Cash at Beginning of Period | 11,256 | 70,188 |
Cash at End of Period | 5,961,705 | 38,141 |
Supplemental information: | ' | ' |
Cash paid for Interest | $1,225,277 | $749,682 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2014 | |
Accounting Policies [Abstract] | ' |
Significant Accounting Policies [Text Block] | ' |
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Nature of Operations | |
Superior Drilling Products, Inc. (the “Company”, “we”, “our” or “us”) is a drilling tool technology company. We manufacture, repair, sell and rent drilling tools. All of the drilling tools that we rent are manufactured by us. Our customers are engaged in the domestic and international exploration and production of oil and natural gas. We were incorporated on December 10, 2013 under the name SD Company, Inc. in order to facilitate (a) the reorganization of the entities that are now our consolidated subsidiaries (see Note 2) and (b) the subsequent acquisition of Hard Rock Solutions, LLC (see Note 3). We changed our name from SD Company Inc. to Superior Drilling Products, Inc. on May 22, 2014 in conjunction with closing of that reorganization. Our headquarters and principal manufacturing operations are located in Vernal, Utah. | |
Basis of Presentation | |
The accompanying condensed and consolidated financial statements of the Company include the accounts of the Company, and of its wholly-owned subsidiaries (a) Superior Drilling Solutions, LLC (previously known as Superior Drilling Products, LLC), a Utah limited liability company (“SDS”), together with its wholly owned subsidiary, Superior Drilling Products of California, LLC, a California limited liability company (“SDPC”), (b) Superior Design and Fabrication, LLC, a Utah limited liability company (“SDF”), (c) Extreme Technologies, LLC, a Utah limited liability company (“ET”), (d) Meier Property Series, LLC, a Utah limited liability company (“MPS”), (e) Meier Leasing, LLC, a Utah limited liability company (“ML”), (f) Hard Rock Solutions, LLC, a Utah limited liability company (“Hard Rock”) and (g) Superior Drilling Products of California, LLC a Utah limited liability company (“SDPCA”). These consolidated condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), and all significant intercompany accounts have been eliminated in combination. | |
As a company with less than $1.0 billion in revenue during its last fiscal year, we qualify as an emerging growth company as defined in the recently enacted Jumpstart Our Business Startups Act of 2012, or the JOBS Act. An emerging growth company may take advantage of exemptions from various reporting requirements applicable to other public companies that are not an “emerging growth company.” | |
Unaudited Interim Financial Information | |
These interim consolidated condensed financial statements as of September 30, 2014, for the three and nine month periods ended September 30, 2014 and 2013, and the related footnote disclosures included herein, are unaudited. However, in the opinion of management, these unaudited interim financial statements have been prepared on the same basis as the audited financial statements, and reflect all adjustments necessary to fairly state the results for such periods. The results of operations for the three and nine months ended September 30, 2014 are not necessarily indicative of the results of operations expected for the year ended December 31, 2014. These interim consolidated condensed financial statements should be read in conjunction with the audited consolidated financial statements of the Company for the years ended December 31, 2013 and 2012 and the notes thereto, which were included in the Company’s definitive prospectus for its initial public offering (the “Offering”), which was filed with the Securities and Exchange Commission (the “SEC”) on May 27, 2014. | |
Basic and Diluted Earnings Per Share | |
Basic earnings per common share is computed by dividing net income by the weighted-average number of common shares outstanding during the period. Diluted gain per share is calculated to give effect to potentially issuable common shares, which include stock warrants. As of September 30, 2014, the Company had warrants exercisable for 714,286 shares of common stock at $4.00 per share. These warrants have a 4 year term expiring in February 2018. These warrants were anti-dilutive for the three and nine months ended September 30, 2014. | |
Rental Income | |
Hard Rock operates as a rental tool company that rents reamer equipment (tools) for use by customers engaged in the oil and gas business. While the duration of the rents vary by job and number of runs, these rents are generally less than one month. The rental agreements do not have any minimum rental payments or term. Revenue is recognized upon completion of the job. The tools are currently rented primarily to entities operating in North Dakota, Wyoming, Texas, Montana, Oklahoma, Utah, New Mexico and Colorado. | |
Income Taxes | |
The Company recognizes an asset or liability for the deferred tax consequences of all temporary differences between the tax basis of assets or liabilities and their reported amounts in the financial statements that will result in taxable or deductible amounts in future years when the reported amounts of the asset or liabilities are recovered or settled and for operating loss carry forwards. These deferred tax assets and liabilities are measured using the enacted tax rates that will be in effect when the differences are expected to reverse and the carry forwards are expected to be realized. Deferred tax assets are reviewed periodically for recoverability and a valuation allowance is provided as necessary. | |
Share-Based Compensation | |
The Company follows ASC 718, Compensation- Stock Compensation (“ASC 718”), which requires the measurement and recognition of compensation expense for all share-based payment awards, including restricted stock units, based on estimated grant date fair values. Restricted stock units are valued using the market price of our common shares on the date of grant. The Company records compensation expense, net of estimated forfeitures, over the requisite service period. | |
Recently Enacted Accounting Standards | |
In June 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-12, "Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period" (“ASU 2014-12”), which requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. ASU 2014-12 is effective for annual reporting periods beginning after December 15, 2015, and with early adoption is permitted. The Company is evaluating the potential impacts of the new standard on its existing stock-based compensation plans. | |
In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers," which will supersede most of the existing revenue recognition requirements in U.S. GAAP and will require entities to recognize revenue at an amount that reflects the consideration to which they are expected to be entitled in exchange for transferring goods or services to a customer. The new standard also requires significantly expanded disclosures regarding the qualitative and quantitative information of an entity's nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The pronouncement is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period and is to be applied retrospectively, and early application is not permitted. The Company is currently evaluating the impact of this pronouncement on its consolidated financial statements and related disclosures. | |
In April 2014, the FASB issued ASU No. 2014-08, "Presentation of Financial Statements and Property, Plant, and Equipment - Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity" (“ASU 2014-08”), which amends the definition of a discontinued operation by raising the threshold for a disposal to qualify as discontinued operations. ASU 2014-08 will also require entities to provide additional disclosures about discontinued operations as well as disposal transactions that do not meet the discontinued operations criteria. The pronouncement is effective prospectively for all disposals (except disposals classified as held for sale before the adoption date) of components initially classified as held for sale in periods beginning on or after December 15, 2014. Early adoption is permitted. The Company is currently evaluating this guidance and does not expect that adoption will have a material effect on its consolidated financial statements. | |
CORPORATE_REORGANIZATION
CORPORATE REORGANIZATION | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
Reorganization Disclosure [Abstract] | ' | ||||
Reorganization Disclosure [Text Block] | ' | ||||
NOTE 2. CORPORATE REORGANIZATION | |||||
On December 10, 2013, the date the Company was incorporated, a stock subscription was received by us for 1,000 shares of our common stock from Meier Family Holdings, LLC and Meier Management Company (collectively, the “Founders”). | |||||
On May 22, 2014, we closed the reorganization of SDS, SDPC, SDF, ET, MPS, SDPCA, and ML into wholly-owned subsidiaries of the Company under the terms of an agreement and plan of reorganization, dated December 15, 2013 (the “Reorganization”). In exchange for their ownership interest in those entities, the Founders received 8,813,860 shares of our common stock, in addition to the initial 1,000 shares of our common stock. Each of the subsidiaries is considered to be the historical accounting predecessor for financial statement reporting purposes. See Note 12 for further discussion of the income tax impact of Reorganization. | |||||
On May 29, 2014, the Company completed its initial public offering of common stock pursuant to a registration statement on Form S-1 (File 333-195085), as amended and declared effective by the SEC on May 22, 2014 (the “Offering”). Pursuant to the registration statement, the Company registered the offer and sale of 7,762,500 shares of common stock, which included 1,012,500 shares of common stock pursuant to an option granted to the underwriters to cover over-allotments. The Company’s sale of the shares in the Offering closed on May 29, 2014. | |||||
The gross proceeds of the Offering, based on the public offering price of $4.00 per share, were approximately $31.05 million. After subtracting underwriting discounts and commissions of $2.4 million, the Company received net proceeds of approximately $28.7 million from the Offering. The Company used $12.5 million of the net proceeds to acquire Hard Rock (See Note 4). | |||||
The Naples property loan was used by a now-defunct limited liability company in which Troy Meier was an investor to purchase approximately 11 unimproved acres in Naples, Utah for a now-terminated property development venture. When the venture failed, the Company took title to the property and assumed this loan. This loan was secured by the purchased property. The raw land loan was used to purchase approximately 47 unimproved acres in Vernal, Utah that is contiguous to the Meier’s residence for approximately $0.7 million. This loan was secured by the purchased property. Prior to closing the Offering, the Naples property loan and the raw land loan totaling $1.7 million and $0.7 million, respectively, were distributed to the Founders. The land being held as collateral under the Naples property loan and the raw land loan were also distributed at historical cost totaling approximately $2.1 million. | |||||
Upon closing of the Offering, the Company issued notes to the Founders, in the amounts of $1,280,000 and $720,000, respectively, as additional consideration for the Reorganization. The obligations are required to be paid by the Company on or before January 2, 2015. Until repayment, the obligation accrues interest at the Prime rate of JPMorgan Chase Bank plus 0.25%. As of September 30, 2014 the JP Morgan prime rate was 3.25%. The Company has made payments on these notes in the aggregate of $150,000, which includes principle payment of approximately $148,000 in aggregate, as of September 30, 2014. | |||||
Upon closing of the Offering, the Company’s $2 million Bridge Loan automatically converted into 714,286 shares of our common stock, and a four-year warrant to purchase an equivalent number of shares of our common stock at $4.00 per share (see also Note 7). The conversion feature and detachable warrants qualified as a derivative liability at inception and recorded at a fair value of $1.9 million. Upon conversion, the detachable warrant was recognized in additional paid in capital at a fair value of $1.1 million. Fair value was determined using a Black-Scholes option model with level 3 fair value inputs as follows: | |||||
Strike price per share | $ | 4 | |||
Market price per share | $ | 4 | |||
Volatility | 47.3 | % | |||
Term | 4 years | ||||
Risk-free rate | 0.69 | % | |||
LIQUITY_AND_CAPITAL_RESOURCES
LIQUITY AND CAPITAL RESOURCES | 9 Months Ended |
Sep. 30, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
Liquity And Capital Resources [Text Block] | ' |
NOTE 3. LIQUITY AND CAPITAL RESOURCES | |
Management believes that through current and planned operations the Company should be able to meet all of its debt payment and requirements. In the event we are not able to meet these obligations, we may need to raise additional capital through equity and debt financings to support our operations and for our corporate general and administrative expenses. Although as a public company we now have access to the public markets for capital raises, we cannot provide any assurances that financing will be available to us in the future on acceptable terms or at all. If we cannot raise required funds on acceptable terms, we may not be able to, among other things, (i) maintain our general and administrative expenses at current levels; (ii) fund certain obligations as they become due; and (iii) respond to competitive pressures or unanticipated capital requirements. | |
HARD_ROCK_ACQUISITION
HARD ROCK ACQUISITION | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Business Combinations [Abstract] | ' | |||||||
Business Combination Disclosure [Text Block] | ' | |||||||
NOTE 4. HARD ROCK ACQUISITION | ||||||||
Immediately upon closing the Offering, the Company used a portion of the Offering proceeds to fund the purchase of all the interests of Hard Rock from its parent entity, Hard Rock Solutions, Inc. (“HR”) under the terms of a membership interest purchase agreement dated January 28, 2014 (the “Hard Rock Acquisition”). Closing of the Hard Rock Acquisition occurred on May 29, 2014. | ||||||||
Hard Rock operates as a rental tool company of reamer equipment (tools) for oil and gas companies. While the duration of the rents varies by job, these rents are generally less than one month. The tools are rented primarily to entities operating in North Dakota, Wyoming, Texas, Montana, Oklahoma, Utah, New Mexico and Colorado. Before our acquisition of Hard Rock, we received revenue from HR for manufacturing and repairing the reamers, and the reamer royalty income upon rental of the tool. | ||||||||
The Hard Rock Acquisition has been treated as a business acquisition since the Company acquired substantially all of the operating assets of HR. The majority of the purchase price was assigned to intangible assets, which consist of developed technology, customer contracts and relationships, trade names and trademarks and goodwill. The intangible assets will be amortized over the following lives: | ||||||||
Intangible Assets | Live | |||||||
Developed | 7 Years | |||||||
Customer contracts and | 5 Years | |||||||
Trade names and | 9 Years | |||||||
Consideration consisted of $12.5 million paid at closing of the Offering and a $12.5 million seller’s note (the “Hard Rock Note”). The fair value of the Hard Rock Note was determined to be $11,144,000 which is less than the face value due to a below-market interest rate based on the JP Morgan Chase Bank, N.A. annual prime rate, or 3.25% per annum as of September 30, 2014. Fair value was estimated based on the present value of future cash flows at a market-assumed rate. The fair value of the assets acquired and the Hard Rock Notes are as follows: | ||||||||
Estimated fair value of assets acquired: | ||||||||
Rental | $ | 832,097 | ||||||
Prepaid expenses | 9,000 | |||||||
Fixed assets and equipment | 100,000 | |||||||
Intangible assets: | ||||||||
Developed technology | 7,000,000 | |||||||
Customer contracts and relationships | 6,400,000 | |||||||
Trade names and trademarks. | 1,500,000 | |||||||
Goodwill | 7,802,903 | |||||||
Total intangible assets | 23,644,000 | |||||||
Consideration paid and liabilities assumed: | ||||||||
Cash paid at closing | 12,500,000 | |||||||
Note payable | 12,500,000 | |||||||
Discount on note payable | -1,356,000 | |||||||
$ | 23,644,000 | |||||||
During the quarter ending September 30, 2014, the Company reviewed the Hard Rock rental tool inventory and determined that many of the tools purchased would need to be scrapped due to the tools not meeting our quality control requirements, and thus the Company removed them from their inventory. It has further been determined that these tools should not have been included in the purchase price, but the value should have been included as part of goodwill. We have retroactively decreased the rental tool fair value estimate from $1,540,000, to $832,097 and increased goodwill from $7,095,000 to $7,802,903 as of the acquisition date. The Company had also depreciated these tools, thus in the financials we have reduced depreciation expense in the amount of $78,656. | ||||||||
Acquisition Related Costs | ||||||||
Acquisition-related transaction costs consisted of various advisory, legal, accounting, valuation and professionals or consulting fees totaling $646,306, for the nine month period ended September 30, 2014. These cost were expensed as incurred and included in general administrative expense on our consolidated condensed statement of operations. | ||||||||
Supplemental Pro Forma Results | ||||||||
Hard Rock’s results of operations have been included in our financial statements for periods subsequent to May 29, 2014, the effective date of the Hard Rock Acquisition. Hard Rock contributed revenues of $3 million to the Company for the period from the closing of the Hard Rock Acquisition (May 29, 2014) through September 30, 2014. | ||||||||
The following unaudited supplemental pro forma results present consolidated information for the nine months ended September 30, 2014 as if the Hard Rock Acquisition had been completed on January 1, 2013. The supplemental pro forma results have been calculated after applying our accounting policies and include, among others, (i) the amortization associated with the fair value of the acquired intangible assets, (ii) interest expense associated with the term loan issued to fund the Hard Rock Acquisition and (iii) the impact of certain fair value adjustments such as a the debt discount. The supplemental pro forma results do not include any potential synergies, non-recurring charges which result directly from the Hard Rock Acquisition, cost savings or other expected benefits of the Hard Rock Acquisition. The supplemental pro forma financial information does not necessarily represent what would have occurred if the transaction had taken place at the beginning of the period presented and should not be taken as representative of our future consolidated results of operations. We have not concluded our integration work. Accordingly, this supplemental pro forma information does not include all costs related to the integration nor the benefits we expect to realize from operating synergies. | ||||||||
Nine Months Ended September 30, | ||||||||
2014 | 2013 | |||||||
(Unaudited) | (Unaudited) | |||||||
Revenue | $ | 15,318,614 | $ | 11,741,218 | ||||
Net income | $ | 564,375 | $ | 4,107,058 | ||||
INVENTORY
INVENTORY | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Inventory Disclosure [Abstract] | ' | |||||||
Inventory Disclosure [Text Block] | ' | |||||||
NOTE 5. INVENTORY | ||||||||
Inventory is comprised of the following: | ||||||||
September 30, | December 31, | |||||||
2014 | 2013 | |||||||
Raw material | $ | 1,033,524 | $ | 53,350 | ||||
Work in progress | 23,524 | 42,678 | ||||||
Finished goods | 71,512 | - | ||||||
$ | 1,128,560 | $ | 96,028 | |||||
PROPERTY_PLANT_AND_EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Property, Plant and Equipment [Abstract] | ' | |||||||
Property, Plant and Equipment Disclosure [Text Block] | ' | |||||||
NOTE 6. PROPERTY, PLANT AND EQUIPMENT | ||||||||
Property, plant and equipment are comprised of the following: | ||||||||
September 30, | December 31, | |||||||
2014 | 2013 | |||||||
Land | $ | 2,511,802 | $ | 2,511,802 | ||||
Buildings | 6,234,675 | 6,109,351 | ||||||
Buildings – Superior Auto Body | 2,213,729 | 2,213,729 | ||||||
Leasehold improvements | 461,566 | 571,193 | ||||||
Machinery and equipment | 4,388,827 | 3,456,442 | ||||||
Machinery under capital lease | 2,322,340 | 2,322,340 | ||||||
Furniture and fixtures | 449,360 | 239,378 | ||||||
Transportation assets | 999,485 | 986,445 | ||||||
19,581,784 | 18,410,680 | |||||||
Accumulated depreciation | -4,224,635 | -3,361,809 | ||||||
$ | 15,357,149 | $ | 15,048,871 | |||||
Depreciation expense related to property, plant and equipment for the three and nine months ended September 30, 2014 was $552,765 and $1,314,850, respectively. | ||||||||
INTANGIBLE_ASSETS
INTANGIBLE ASSETS | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | |||||||
Intangible Assets Disclosure [Text Block] | ' | |||||||
NOTE 7. INTANGIBLE ASSETS | ||||||||
Intangible assets are comprised of the following: | ||||||||
September 30, | December 31, | |||||||
2014 | 2013 | |||||||
Developed technology | $ | 7,000,000 | $ | - | ||||
Customer contracts | 6,400,000 | - | ||||||
Trademarks | 1,500,000 | - | ||||||
14,900,000 | - | |||||||
Accumulated amortization | -815,556 | - | ||||||
$ | 14,084,444 | $ | - | |||||
Amortization expense related to intangible assets for the three and nine months ended September 30, 2014 was $611,667 and $815,556, respectively. | ||||||||
These intangible assets will be amortized over their expected useful lives using the straight-line method. As of September 30, 2014, the Company will recognize the following amortization expense for the respective periods ending December 31 noted below: | ||||||||
2014 | $ | 611,667 | ||||||
2015 | 2,446,667 | |||||||
2016 | 2,446,667 | |||||||
2017 | 2,446,667 | |||||||
2018 | 2,446,667 | |||||||
Thereafter | 3,686,109 | |||||||
Total | $ | 14,084,444 | ||||||
LONGTERM_DEBT
LONG-TERM DEBT | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Debt Disclosure [Abstract] | ' | |||||||
Debt Disclosure [Text Block] | ' | |||||||
NOTE 8. LONG-TERM DEBT | ||||||||
Long-term debt is comprised of the following: | ||||||||
September 30, | December 31, | |||||||
2014 | 2013 | |||||||
Real estate loans | $ | 7,985,456 | $ | 10,370,508 | ||||
Hard Rock Note (net of $1,054,667 discount) | 11,445,333 | - | ||||||
EB-5 business loans | 439,460 | 1,797,178 | ||||||
Machinery loans | 1,056,402 | 1,496,710 | ||||||
Transportation loans | 598,980 | 591,398 | ||||||
21,525,631 | 14,255,794 | |||||||
Current portion of long-term debt . | -10,105,601 | -3,316,578 | ||||||
$ | 11,420,030 | $ | 10,939,216 | |||||
The Hard Rock purchase price was $25 million, consisting of $12.5 million paid in cash at closing out of the proceeds of Offering, and the “Hard Rock Note”. The Hard Rock Note accrues interest at the JP Morgan Chase Bank, N.A. annual prime rate. Under the terms of the Hard Rock Note, we will pay two annual principal installments of $5 million plus accrued interest on May 30, 2015 and 2016 and one final payment of $2.5 million plus interest on May 30, 2017. The Hard Rock Note is secured by all of the patents, patents pending, other patent rights, and trademarks transferred to Hard Rock by HR in the closing of the Hard Rock Acquisition. At issuance, the fair value of the Hard Rock Note was determined to be $11,144,000, which is less than the face value due to a below-market interest rate. The resulting discount will be amortized to interest expense using the effective interest method. | ||||||||
On February 24, 2014, we closed a $2 million bridge loan with a private lender (the “Bridge Loan”). Effective as of closing of the Offering, the Bridge Loan automatically converted into 714,286 shares of our restricted common stock, and a four-year warrant to purchase an equivalent number of shares of our common stock at $4.00 per share. As the result of that conversion, the Bridge Loan is deemed paid in full. | ||||||||
On August 1, 2014, the Company paid off two notes in association with its Bakersfield, California location under the EB-5 program to the United States Employment Development Lending Center. The total amount paid was $1,346,597. | ||||||||
NOTE_RECEIVABLE
NOTE RECEIVABLE | 9 Months Ended |
Sep. 30, 2014 | |
Receivables [Abstract] | ' |
Loans, Notes, Trade and Other Receivables Disclosure [Text Block] | ' |
NOTE 9. NOTE RECEIVABLE | |
In January 2014, we entered into a Note Purchase and Sale Agreement under which we agreed to purchase a loan made to Tronco Energy Corporation (“Tronco”), a party related to us through common control, in order to take over the legal position as Tronco’s senior secured lender. That agreement provided that, upon our full repayment of the Tronco loan from the proceeds of the Offering, the lender would assign to us all of its rights under the Tronco loan, including all of the collateral documents. On May 30, 2014, we closed our purchase of the Tronco loan for a total payoff of $8.3 million, including principal, interest, and early termination fees. As a result of that purchase, we became Tronco’s senior secured lender, and as a result are entitled to receive all proceeds from sales of the Tronco-owned collateral, as discussed below. | |
As the result of our purchase of the Tronco loan, we have the direct legal right to enforce the collateral and guaranty agreements entered into in connection with the Tronco loan and to collect Tronco’s collateral sales proceeds, in order to recover the loan purchase amount. The Tronco loan continues to be secured by the first position liens on all of Tronco assets, as well as by the guarantees of Troy and Annette Meiers (the “Meier Guaranties”), which are directly payable to and legally enforceable by us. In addition, the Meiers have provided us with stock pledges in which they pledge all of their shares of our common stock held by their family entities (the ‘‘Meier Stock Pledge’’), as collateral for the Meiers’ guaranties until full repayment of Tronco loan. The certificates representing the 8,814,860 pledged shares are being held in third-party escrow until full repayment of the Tronco loan. The pledged shares will be tradable in the public market 180 days after the closing of the Offering, subject to insider timing requirements and volume limitations under Rule 144 of the Securities Act, and required periodic black-out periods. At a $6.28 per share price at closing of the NYSE MKT on September 30, 2014, the pledged shares would currently have a market value of over $50 million, significantly more than the amount necessary to repay the Tronco loan, even if no Tronco assets were sold. | |
Based on the combined collateral value of the Tronco assets and of the Meier Stock Pledge, we have determined that there is no risk of loss to us in connection with Tronco loan. Accordingly, we have eliminated the guarantee liability and recorded the entire net realizable value of the Tronco loan totaling $8,296,717 as an asset in the balance sheet for the period ended September 30, 2014. | |
Previously, the Tronco loan had been scheduled to mature in January 2014. On December 18, 2013, it was amended to extend the maturity date to June 30, 2014, in exchange for a one-time payment of $68,881. The maturity date was further extendable, at Tronco’s election, for three additional six month periods upon payment of additional extension fees. On June 29, 2014, the independent members of our Board of Directors approved an extension of the June 30, 2014 payment date to July 31, 2014, to permit consideration of a loan restructuring to be approved by our independent Board members under terms no less favorable to us than could be negotiated with a third party at ‘‘arm’s length’’. Any renewal will continue to be secured by the Meier Guaranties and the Meier Stock Pledge. | |
During July 2014, the Board of Directors agreed to restructure the Tronco loan effective May 29, 2014. As part of this restructuring the interest rate was decreased to the prime rate of JPMorgan Chase Bank plus 0.25%, which was 3.25% as of September 30, 2014. The payment requirements and schedule were also changed with the restructuring. Only interest is due on December 31, 2014 and, a balloon payment of all unpaid interest and principal is due in full at maturity on December 31, 2015. Consideration for the restructuring of the Tronco loan included the fact that the Meier’s provided their 8,814,860 shares of common stock in the Company as collateral. | |
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | ' |
Commitments and Contingencies Disclosure [Text Block] | ' |
NOTE 10. COMMITMENTS AND CONTINGENCIES | |
We are subject to litigation that arises from time to time in the ordinary course of our business activities. We are not currently involved in any litigation which management believes could have a material effect on our financial position or results of operations, except as follows: | |
In October 2013, Del-Rio Resources, Inc. (“Del-Rio”) filed suit, on its own behalf and derivatively on behalf of Philco Exploration, LLC (“Philco”), against the following co-defendants (a) Tronco Ohio, LLC and Tronco , (b) the lender on the Tronco loan, ACF Property Management, Inc. (p.k.a. Fortuna Asset Management, LLC, ) (“ACF”), (c) Troy and Annette Meiers personally, and several of their family trusts, (d) Meier Family Holding Company, LLC and Meier Management Company, LLC, and (e) SDS and MPS. That suit is currently pending in the Eighth Judicial District Court, Uintah County, Utah under Cause #130800125. | |
Tronco and Del-Rio are the sole owners and managers of Philco. Philco served as the exploration operator. Part of the collateral for the Tronco loan is Philco’s mineral leases. Del- Rio’s suit alleges that the defendants made amendments to the Tronco loan without complying with the voting provisions of Philco’s operating agreement, and that all of the Meier-related entities somehow benefitted from the Tronco loan proceeds, in an unspecified manner. Del-Rio’s suit seeks to invalidate ACF’s deeds of trust on the Philco mineral leases, and to acquire title to those Philco mineral leases. ACF no longer has deeds of trust of any of the Philco mineral leases. Del Rio is also requesting monetary and punitive damages, disgorgement, prejudgment interest, post judgment interest, costs, and attorney fees, against all defendants, in an amount to be determined at trial. | |
We believe that Del-Rio’s claims are without merit, and all defendants are actively defending in this matter. In particular, SDS’ and MPS’ only involvement was to grant guaranties and/or security interests in their respective separate personal and real property to ACF to additionally collateralize the Tronco loan before its purchase by us. In addition, since the Meiers’ and their personal trusts guaranty repayment of the Tronco loan, we believe that the basis of Del-Rio’s damages claims are nullified. Consequently, we do not believe that Del Rio’s purported claims against SDS and MPS will have any material adverse effect on our cash flow, business, or operations. As of September 30, 2014, there have been no updates or decisions made concerning this matter. | |
RELATED_PARTY_TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2014 | |
Related Party Transactions [Abstract] | ' |
Related Party Transactions Disclosure [Text Block] | ' |
NOTE 11. RELATED PARTY TRANSACTIONS | |
Superior Auto Body | |
The Company leases certain of its facilities to Superior Auto Body (“SAB”), a related party. We recorded rental income from the related party in the amounts of $93,544 and $92,442, for the nine months ended September 30, 2014 and 2013, respectively. | |
Uintah Steel & Alloy, LLC | |
The founders previously owned an equity interest in Uintah Steel & Alloy, LLC (“Uintah”). From time to time Uintah has purchased and distributed steel on behalf of the Company and other companies. Prior to the Reorganization on May 29, 2014, Uintah ceased operations and the Founders contributed all steel inventory purchased by it that was designated for the Company to the Company, at historical costs totaling an aggregate of approximately $0.6 million. Since that time, the Company has purchased all of its steel requirements directly from unrelated suppliers and no longer does business with Uintah. | |
INCOME_TAXES
INCOME TAXES | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
Income Tax Disclosure [Abstract] | ' | ||||
Income Tax Disclosure [Text Block] | ' | ||||
NOTE 12. INCOME TAXES | |||||
Prior to the Reorganization (see Note 2), the Company was a limited liability company and not subject to federal income tax or state income tax (in most states). Accordingly, no provision for federal or state income taxes was recorded prior to the Reorganization because the Company’s equity holders were responsible for income tax on the Company’s profits. In connection with the closing of the Offering, the Company merged into a corporation and became subject to federal and state income taxes. The Company’s book and tax basis in assets and liabilities differed at the time of the Reorganization due primarily to different cost depreciation methods utilized for book and tax purposes for the Company’s fixed assets. For the nine months ending September 30, 2014, the Company recorded a net deferred tax expense of approximately $550,000 to recognize a deferred tax liability related to the Company’s book and tax basis differences. | |||||
Components of the provision for income taxes are as follows: | |||||
For the Nine | |||||
Months Ending | |||||
September 30, | |||||
Current income taxes: | 2014 | ||||
Federal | $ | - | |||
State | 1,607 | ||||
Current provision for income taxes | 1,607 | ||||
Deferred provision (benefit) for income taxes: | |||||
Federal | 483,290 | ||||
State | 67,326 | ||||
Deferred provision (benefit) for income taxes | 550,616 | ||||
Provision for income taxes | $ | 552,223 | |||
The current and non-current deferred tax assets and liabilities consist of the following: | |||||
For the Nine | |||||
Months Ending | |||||
September 30, | |||||
Deferred tax asset: | 2014 | ||||
Non-current: | |||||
Net operating losses | $ | 433,892 | |||
Amortization of intangible assets | 179,170 | ||||
Total deferred tax assets | 613,062 | ||||
Deferred tax liabilities: | |||||
Current: | |||||
Other | -16,612 | ||||
Non-current: | |||||
Depreciation on fixed assets | -1,088,753 | ||||
Amortization of goodwill | -58,313 | ||||
Total deferred tax liabilities | -1,163,678 | ||||
Net deferred tax liabilities | $ | -550,616 | |||
Reconciliation of the tax rate to the U.S. federal statutory tax rate which relate to the nine months ended September 30, 2014 is as follows: | |||||
For the Nine | |||||
Months Ending | |||||
September 30, | |||||
2014 | |||||
Tax at federal statutory rate | $ | 29,856 | |||
Income tax prior to IPO not taxable to the Company | -559,909 | ||||
Change in status | 1,044,742 | ||||
State income taxes | 1,012 | ||||
Other | 36,523 | ||||
Permanent differences | - | ||||
Provision for income taxes | $ | 552,223 | |||
STOCK_ISSUANCES
STOCK ISSUANCES | 9 Months Ended |
Sep. 30, 2014 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' |
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | ' |
NOTE 13. SHARE BASED COMPENSATION | |
On August 12, 2014, the Board of Directors approved the issuance of 18,750 restricted shares of the Company’s common stock for three of the independent directors for a total of 56,250 shares valued at $334,688. These shares vest over a three year time period and are subject to stock holder approval. These shares are for services performed from June 2014 to May 2015. | |
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2014 | |
Subsequent Events [Abstract] | ' |
Subsequent Events [Text Block] | ' |
NOTE 14. SUBSEQUENT EVENTS | |
The Company has evaluated subsequent events from the balance sheet date through the date the financial statements were issued, and has determined there are no other events to disclose. | |
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2014 | |
Accounting Policies [Abstract] | ' |
Nature of Operations [Text Block] | ' |
Nature of Operations | |
Superior Drilling Products, Inc. (the “Company”, “we”, “our” or “us”) is a drilling tool technology company. We manufacture, repair, sell and rent drilling tools. All of the drilling tools that we rent are manufactured by us. Our customers are engaged in the domestic and international exploration and production of oil and natural gas. We were incorporated on December 10, 2013 under the name SD Company, Inc. in order to facilitate (a) the reorganization of the entities that are now our consolidated subsidiaries (see Note 2) and (b) the subsequent acquisition of Hard Rock Solutions, LLC (see Note 3). We changed our name from SD Company Inc. to Superior Drilling Products, Inc. on May 22, 2014 in conjunction with closing of that reorganization. Our headquarters and principal manufacturing operations are located in Vernal, Utah. | |
Basis of Accounting, Policy [Policy Text Block] | ' |
Basis of Presentation | |
The accompanying condensed and consolidated financial statements of the Company include the accounts of the Company, and of its wholly-owned subsidiaries (a) Superior Drilling Solutions, LLC (previously known as Superior Drilling Products, LLC), a Utah limited liability company (“SDS”), together with its wholly owned subsidiary, Superior Drilling Products of California, LLC, a California limited liability company (“SDPC”), (b) Superior Design and Fabrication, LLC, a Utah limited liability company (“SDF”), (c) Extreme Technologies, LLC, a Utah limited liability company (“ET”), (d) Meier Property Series, LLC, a Utah limited liability company (“MPS”), (e) Meier Leasing, LLC, a Utah limited liability company (“ML”), (f) Hard Rock Solutions, LLC, a Utah limited liability company (“Hard Rock”) and (g) Superior Drilling Products of California, LLC a Utah limited liability company (“SDPCA”). These consolidated condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), and all significant intercompany accounts have been eliminated in combination. | |
As a company with less than $1.0 billion in revenue during its last fiscal year, we qualify as an emerging growth company as defined in the recently enacted Jumpstart Our Business Startups Act of 2012, or the JOBS Act. An emerging growth company may take advantage of exemptions from various reporting requirements applicable to other public companies that are not an “emerging growth company.” | |
Unaudited Interim Financial Information Policy [Policy Text Block] | ' |
Unaudited Interim Financial Information | |
These interim consolidated condensed financial statements as of September 30, 2014, for the three and nine month periods ended September 30, 2014 and 2013, and the related footnote disclosures included herein, are unaudited. However, in the opinion of management, these unaudited interim financial statements have been prepared on the same basis as the audited financial statements, and reflect all adjustments necessary to fairly state the results for such periods. The results of operations for the three and nine months ended September 30, 2014 are not necessarily indicative of the results of operations expected for the year ended December 31, 2014. These interim consolidated condensed financial statements should be read in conjunction with the audited consolidated financial statements of the Company for the years ended December 31, 2013 and 2012 and the notes thereto, which were included in the Company’s definitive prospectus for its initial public offering (the “Offering”), which was filed with the Securities and Exchange Commission (the “SEC”) on May 27, 2014. | |
Earnings Per Share, Policy [Policy Text Block] | ' |
Basic and Diluted Earnings Per Share | |
Basic earnings per common share is computed by dividing net income by the weighted-average number of common shares outstanding during the period. Diluted gain per share is calculated to give effect to potentially issuable common shares, which include stock warrants. As of September 30, 2014, the Company had warrants exercisable for 714,286 shares of common stock at $4.00 per share. These warrants have a 4 year term expiring in February 2018. These warrants were anti-dilutive for the three and nine months ended September 30, 2014. | |
Revenue Recognition, Policy [Policy Text Block] | ' |
Rental Income | |
Hard Rock operates as a rental tool company that rents reamer equipment (tools) for use by customers engaged in the oil and gas business. While the duration of the rents vary by job and number of runs, these rents are generally less than one month. The rental agreements do not have any minimum rental payments or term. Revenue is recognized upon completion of the job. The tools are currently rented primarily to entities operating in North Dakota, Wyoming, Texas, Montana, Oklahoma, Utah, New Mexico and Colorado. | |
Income Tax, Policy [Policy Text Block] | ' |
Income Taxes | |
The Company recognizes an asset or liability for the deferred tax consequences of all temporary differences between the tax basis of assets or liabilities and their reported amounts in the financial statements that will result in taxable or deductible amounts in future years when the reported amounts of the asset or liabilities are recovered or settled and for operating loss carry forwards. These deferred tax assets and liabilities are measured using the enacted tax rates that will be in effect when the differences are expected to reverse and the carry forwards are expected to be realized. Deferred tax assets are reviewed periodically for recoverability and a valuation allowance is provided as necessary. | |
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | ' |
Share-Based Compensation | |
The Company follows ASC 718, Compensation- Stock Compensation (“ASC 718”), which requires the measurement and recognition of compensation expense for all share-based payment awards, including restricted stock units, based on estimated grant date fair values. Restricted stock units are valued using the market price of our common shares on the date of grant. The Company records compensation expense, net of estimated forfeitures, over the requisite service period. | |
New Accounting Pronouncements, Policy [Policy Text Block] | ' |
Recently Enacted Accounting Standards | |
In June 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-12, "Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period" (“ASU 2014-12”), which requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. ASU 2014-12 is effective for annual reporting periods beginning after December 15, 2015, and with early adoption is permitted. The Company is evaluating the potential impacts of the new standard on its existing stock-based compensation plans. | |
In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers," which will supersede most of the existing revenue recognition requirements in U.S. GAAP and will require entities to recognize revenue at an amount that reflects the consideration to which they are expected to be entitled in exchange for transferring goods or services to a customer. The new standard also requires significantly expanded disclosures regarding the qualitative and quantitative information of an entity's nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The pronouncement is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period and is to be applied retrospectively, and early application is not permitted. The Company is currently evaluating the impact of this pronouncement on its consolidated financial statements and related disclosures. | |
In April 2014, the FASB issued ASU No. 2014-08, "Presentation of Financial Statements and Property, Plant, and Equipment - Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity" (“ASU 2014-08”), which amends the definition of a discontinued operation by raising the threshold for a disposal to qualify as discontinued operations. ASU 2014-08 will also require entities to provide additional disclosures about discontinued operations as well as disposal transactions that do not meet the discontinued operations criteria. The pronouncement is effective prospectively for all disposals (except disposals classified as held for sale before the adoption date) of components initially classified as held for sale in periods beginning on or after December 15, 2014. Early adoption is permitted. The Company is currently evaluating this guidance and does not expect that adoption will have a material effect on its consolidated financial statements. | |
CORPORATE_REORGANIZATION_Table
CORPORATE REORGANIZATION (Tables) | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
Reorganization Disclosure [Abstract] | ' | ||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Table Text Block] | ' | ||||
Fair value was determined using a Black-Scholes option model with level 3 fair value inputs as follows: | |||||
Strike price per share | $ | 4 | |||
Market price per share | $ | 4 | |||
Volatility | 47.3 | % | |||
Term | 4 years | ||||
Risk-free rate | 0.69 | % | |||
HARD_ROCK_ACQUISITION_Tables
HARD ROCK ACQUISITION (Tables) | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Business Combinations [Abstract] | ' | |||||||
Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination [Table Text Block] | ' | |||||||
The intangible assets will be amortized over the following lives: | ||||||||
Intangible Assets | Live | |||||||
Developed | 7 Years | |||||||
Customer contracts and | 5 Years | |||||||
Trade names and | 9 Years | |||||||
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block] | ' | |||||||
The fair value of the assets acquired and the Hard Rock Notes are as follows: | ||||||||
Estimated fair value of assets acquired: | ||||||||
Rental | $ | 832,097 | ||||||
Prepaid expenses | 9,000 | |||||||
Fixed assets and equipment | 100,000 | |||||||
Intangible assets: | ||||||||
Developed technology | 7,000,000 | |||||||
Customer contracts and relationships | 6,400,000 | |||||||
Trade names and trademarks. | 1,500,000 | |||||||
Goodwill | 7,802,903 | |||||||
Total intangible assets | 23,644,000 | |||||||
Consideration paid and liabilities assumed: | ||||||||
Cash paid at closing | 12,500,000 | |||||||
Note payable | 12,500,000 | |||||||
Discount on note payable | -1,356,000 | |||||||
$ | 23,644,000 | |||||||
Business Acquisition, Pro Forma Information [Table Text Block] | ' | |||||||
Nine Months Ended September 30, | ||||||||
2014 | 2013 | |||||||
(Unaudited) | (Unaudited) | |||||||
Revenue | $ | 15,318,614 | $ | 11,741,218 | ||||
Net income | $ | 564,375 | $ | 4,107,058 | ||||
INVENTORY_Tables
INVENTORY (Tables) | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Inventory Disclosure [Abstract] | ' | |||||||
Schedule of Inventory, Current [Table Text Block] | ' | |||||||
Inventory is comprised of the following: | ||||||||
September 30, | December 31, | |||||||
2014 | 2013 | |||||||
Raw material | $ | 1,033,524 | $ | 53,350 | ||||
Work in progress | 23,524 | 42,678 | ||||||
Finished goods | 71,512 | - | ||||||
$ | 1,128,560 | $ | 96,028 | |||||
PROPERTY_PLANT_AND_EQUIPMENT_T
PROPERTY, PLANT AND EQUIPMENT (Tables) | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Property, Plant and Equipment [Abstract] | ' | |||||||
Property, Plant and Equipment [Table Text Block] | ' | |||||||
Property, plant and equipment are comprised of the following: | ||||||||
September 30, | December 31, | |||||||
2014 | 2013 | |||||||
Land | $ | 2,511,802 | $ | 2,511,802 | ||||
Buildings | 6,234,675 | 6,109,351 | ||||||
Buildings – Superior Auto Body | 2,213,729 | 2,213,729 | ||||||
Leasehold improvements | 461,566 | 571,193 | ||||||
Machinery and equipment | 4,388,827 | 3,456,442 | ||||||
Machinery under capital lease | 2,322,340 | 2,322,340 | ||||||
Furniture and fixtures | 449,360 | 239,378 | ||||||
Transportation assets | 999,485 | 986,445 | ||||||
19,581,784 | 18,410,680 | |||||||
Accumulated depreciation | -4,224,635 | -3,361,809 | ||||||
$ | 15,357,149 | $ | 15,048,871 | |||||
INTANGIBLE_ASSETS_Tables
INTANGIBLE ASSETS (Tables) | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | |||||||
Schedule of Finite-Lived Intangible Assets [Table Text Block] | ' | |||||||
Intangible assets are comprised of the following: | ||||||||
September 30, | December 31, | |||||||
2014 | 2013 | |||||||
Developed technology | $ | 7,000,000 | $ | - | ||||
Customer contracts | 6,400,000 | - | ||||||
Trademarks | 1,500,000 | - | ||||||
14,900,000 | - | |||||||
Accumulated amortization | -815,556 | - | ||||||
$ | 14,084,444 | $ | - | |||||
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | ' | |||||||
These intangible assets will be amortized over their expected useful lives using the straight-line method. As of September 30, 2014, the Company will recognize the following amortization expense for the respective periods ending December 31 noted below: | ||||||||
2014 | $ | 611,667 | ||||||
2015 | 2,446,667 | |||||||
2016 | 2,446,667 | |||||||
2017 | 2,446,667 | |||||||
2018 | 2,446,667 | |||||||
Thereafter | 3,686,109 | |||||||
Total | $ | 14,084,444 | ||||||
LONGTERM_DEBT_Tables
LONG-TERM DEBT (Tables) | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Debt Disclosure [Abstract] | ' | |||||||
Schedule of Long-term Debt Instruments [Table Text Block] | ' | |||||||
Long-term debt is comprised of the following: | ||||||||
September 30, | December 31, | |||||||
2014 | 2013 | |||||||
Real estate loans | $ | 7,985,456 | $ | 10,370,508 | ||||
Hard Rock Note (net of $1,054,667 discount) | 11,445,333 | - | ||||||
EB-5 business loans | 439,460 | 1,797,178 | ||||||
Machinery loans | 1,056,402 | 1,496,710 | ||||||
Transportation loans | 598,980 | 591,398 | ||||||
21,525,631 | 14,255,794 | |||||||
Current portion of long-term debt . | -10,105,601 | -3,316,578 | ||||||
$ | 11,420,030 | $ | 10,939,216 | |||||
INCOME_TAXES_Tables
INCOME TAXES (Tables) | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
Income Tax Disclosure [Abstract] | ' | ||||
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] | ' | ||||
Components of the provision for income taxes are as follows: | |||||
For the Nine | |||||
Months Ending | |||||
September 30, | |||||
Current income taxes: | 2014 | ||||
Federal | $ | - | |||
State | 1,607 | ||||
Current provision for income taxes | 1,607 | ||||
Deferred provision (benefit) for income taxes: | |||||
Federal | 483,290 | ||||
State | 67,326 | ||||
Deferred provision (benefit) for income taxes | 550,616 | ||||
Provision for income taxes | $ | 552,223 | |||
Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | ' | ||||
The current and non-current deferred tax assets and liabilities consist of the following: | |||||
For the Nine | |||||
Months Ending | |||||
September 30, | |||||
Deferred tax asset: | 2014 | ||||
Non-current: | |||||
Net operating losses | $ | 433,892 | |||
Amortization of intangible assets | 179,170 | ||||
Total deferred tax assets | 613,062 | ||||
Deferred tax liabilities: | |||||
Current: | |||||
Other | -16,612 | ||||
Non-current: | |||||
Depreciation on fixed assets | -1,088,753 | ||||
Amortization of goodwill | -58,313 | ||||
Total deferred tax liabilities | -1,163,678 | ||||
Net deferred tax liabilities | $ | -550,616 | |||
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] | ' | ||||
Reconciliation of the tax rate to the U.S. federal statutory tax rate which relate to the nine months ended September 30, 2014 is as follows: | |||||
For the Nine | |||||
Months Ending | |||||
September 30, | |||||
2014 | |||||
Tax at federal statutory rate | $ | 29,856 | |||
Income tax prior to IPO not taxable to the Company | -559,909 | ||||
Change in status | 1,044,742 | ||||
State income taxes | 1,012 | ||||
Other | 36,523 | ||||
Permanent differences | - | ||||
Provision for income taxes | $ | 552,223 | |||
SUMMARY_OF_SIGNIFICANT_ACCOUNT2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Textual) (USD $) | 9 Months Ended |
In Billions, except Share data, unless otherwise specified | Sep. 30, 2014 |
Minimum Amount of Revenue for Emerging Growth Company | $1 |
Class of Warrant or Right, Outstanding | 714,286 |
Class of Warrant or Right, Exercise Price of Warrants or Rights | $4 |
Class of Warrant or Right, Expiration Term | '4 years |
Class Of Warrant Or Right Expiration Period | 'February 2018 |
CORPORATE_REORGANIZATION_Detai
CORPORATE REORGANIZATION (Details) (USD $) | 9 Months Ended |
Sep. 30, 2014 | |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ' |
Strike price per share | $4 |
Market price per share | $4 |
Volatility | 47.30% |
Term | '4 years |
Risk-free rate | 0.69% |
CORPORATE_REORGANIZATION_Detai1
CORPORATE REORGANIZATION (Details Textual) (USD $) | 9 Months Ended | 1 Months Ended | 9 Months Ended | |||||||||||
Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Dec. 10, 2013 | 29-May-14 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | |
Hard Rock [Member] | Meier Family Holding, LLC [Member] | Meier Management Company [Member] | Founders [Member] | Naples property loan [Member] | Raw Land Loan [Member] | Naples property loan and Raw Land Loan [Member] | Bridge Loan [Member] | Common Stock [Member] | Warrant [Member] | |||||
Reorganization Disclosure [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common Stock, Shares Subscribed but Unissued | ' | ' | ' | 1,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock Issued During Period, Shares, Issued for Services | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4 | 8,813,860 | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,012,500 | ' |
Proceeds from Issuance of Common Stock | $31,050,000 | $0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Payment For Underwriting Discounts And Commissions | 2,400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Proceeds from Issuance of Common Stock, Net | 28,700,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Payments to Acquire Businesses, Gross | 12,500,000 | ' | ' | ' | 12,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Loan Principal Balance, Eliminated Through Distribution of Property | ' | ' | ' | ' | ' | ' | ' | ' | 1,700,000 | 700,000 | ' | ' | ' | ' |
Loan Principal Balance | ' | ' | ' | ' | ' | ' | ' | ' | ' | 700,000 | ' | ' | ' | ' |
Land Held as Collateral, Fair Value | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,100,000 | ' | ' | ' |
Payable to Founders, Current | 1,860,290 | ' | 0 | ' | ' | 1,280,000 | 720,000 | ' | ' | ' | ' | ' | ' | ' |
Debt Conversion, Original Debt, Amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,000,000 | ' | ' |
Debt Conversion, Converted Instrument, Shares Issued | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 714,286 | ' | ' |
Debt Instrument, Convertible, Conversion Price | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $4 | ' | ' |
Derivative Liability | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,900,000 |
Derivative Liability, Fair Value, Gross Liability | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,100,000 |
Stock Issued During Period, Shares, New Issues | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 7,762,500 | ' |
Debt Instrument, Description of Variable Rate Basis | ' | ' | ' | ' | ' | 'Prime rate of JPMorgan Chase Bank plus 0.25% | 'Prime rate of JPMorgan Chase Bank plus 0.25% | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Basis Spread on Variable Rate | ' | ' | ' | ' | ' | 3.25% | 3.25% | ' | ' | ' | ' | ' | ' | ' |
Repayments of Notes Payable | ' | ' | ' | ' | ' | ' | ' | 150,000 | ' | ' | ' | ' | ' | ' |
Debt Instrument, Face Amount | ' | ' | ' | ' | ' | ' | ' | $148,000 | ' | ' | ' | ' | ' | ' |
HARD_ROCK_ACQUISITION_Details
HARD ROCK ACQUISITION (Details) (Hard Rock [Member]) | 1 Months Ended |
29-May-14 | |
Developed [Member] | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' |
Acquired Finite-lived Intangible Assets, Useful Life | '7 years |
Customer contracts [Member] | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' |
Acquired Finite-lived Intangible Assets, Useful Life | '5 years |
Trade Names [Member] | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' |
Acquired Finite-lived Intangible Assets, Useful Life | '9 years |
HARD_ROCK_ACQUISITION_Details_
HARD ROCK ACQUISITION (Details 1) (USD $) | 9 Months Ended | 1 Months Ended | ||||
Sep. 30, 2014 | Dec. 31, 2013 | 29-May-14 | 29-May-14 | 29-May-14 | 29-May-14 | |
Hard Rock [Member] | Hard Rock [Member] | Hard Rock [Member] | Hard Rock [Member] | |||
Developed Technology Rights [Member] | Customer Contracts [Member] | Trademarks and Trade Names [Member] | ||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' |
Rental | ' | ' | $832,097 | ' | ' | ' |
Prepaid expenses | ' | ' | 9,000 | ' | ' | ' |
Fixed assets and equipment | ' | ' | 100,000 | ' | ' | ' |
Intangible assets: | ' | ' | ' | ' | ' | ' |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | ' | ' | ' | 7,000,000 | 6,400,000 | 1,500,000 |
Goodwill | 7,802,903 | 0 | 7,802,903 | ' | ' | ' |
Total intangible assets | ' | ' | 23,644,000 | ' | ' | ' |
Consideration paid and liabilities assumed: | ' | ' | ' | ' | ' | ' |
Cash paid at closing | 12,500,000 | ' | 12,500,000 | ' | ' | ' |
Note payable | ' | ' | 12,500,000 | ' | ' | ' |
Discount on note payable | ' | ' | -1,356,000 | ' | ' | ' |
Business Combination, Consideration Transferred | ' | ' | $23,644,000 | ' | ' | ' |
HARD_ROCK_ACQUISITION_Details_1
HARD ROCK ACQUISITION (Details 2) (Hard Rock [Member], USD $) | 9 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Hard Rock [Member] | ' | ' |
Business Acquisition [Line Items] | ' | ' |
Revenue | $15,318,614 | $11,741,218 |
Net income | $564,375 | $4,107,058 |
HARD_ROCK_ACQUISITION_Details_2
HARD ROCK ACQUISITION (Details Textual) (USD $) | 3 Months Ended | 9 Months Ended | 9 Months Ended | |||||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Sep. 30, 2014 | 29-May-14 | 29-May-14 | |
Hard Rock [Member] | Hard Rock [Member] | Hard Rock [Member] | ||||||
Scenario, Previously Reported [Member] | ||||||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Notes Payable, Fair Value Disclosure | ' | ' | ' | ' | ' | $11,144,000 | ' | ' |
Debt Instrument, Interest Rate, Stated Percentage | ' | ' | ' | ' | ' | 3.25% | ' | ' |
Business Combination, Acquisition Related Costs | ' | ' | ' | ' | ' | 646,306 | ' | ' |
Revenue, Net | 5,750,739 | 2,999,634 | 13,949,883 | 8,797,250 | ' | 3,000,000 | ' | ' |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Equipment | ' | ' | ' | ' | ' | ' | 832,097 | 1,540,000 |
Goodwill | 7,802,903 | ' | 7,802,903 | ' | 0 | ' | 7,802,903 | 7,095,000 |
Depreciation Expense on Reclassified Assets | ' | ' | ' | ' | ' | $78,656 | ' | ' |
INVENTORY_Details
INVENTORY (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Inventory [Line Items] | ' | ' |
Raw material | $1,033,524 | $53,350 |
Work in progress | 23,524 | 42,678 |
Finished goods | 71,512 | 0 |
Inventory, Net | $1,128,560 | $96,028 |
PROPERTY_PLANT_AND_EQUIPMENT_D
PROPERTY, PLANT AND EQUIPMENT (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Property, Plant and Equipment [Line Items] | ' | ' |
Land | $2,511,802 | $2,511,802 |
Buildings | 6,234,675 | 6,109,351 |
Buildings - Superior Auto Body | 2,213,729 | 2,213,729 |
Leasehold improvements | 461,566 | 571,193 |
Machinery and equipment | 4,388,827 | 3,456,442 |
Machinery under capital lease | 2,322,340 | 2,322,340 |
Furniture and fixtures | 449,360 | 239,378 |
Transportation assets | 999,485 | 986,445 |
Property, Plant and Equipment, Gross | 19,581,784 | 18,410,680 |
Accumulated depreciation | -4,224,635 | -3,361,809 |
Property, Plant and Equipment, Net | $15,357,149 | $15,048,871 |
PROPERTY_PLANT_AND_EQUIPMENT_D1
PROPERTY, PLANT AND EQUIPMENT (Details Textual) (USD $) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2014 | Sep. 30, 2014 | |
Property, Plant and Equipment [Line Items] | ' | ' |
Depreciation | $552,765 | $1,314,850 |
INTANGIBLE_ASSETS_Details
INTANGIBLE ASSETS (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Intangible Assets, Gross | $14,900,000 | $0 |
Intangible Assets, Accumulated Amortization | -815,556 | 0 |
Finite-Lived Intangible Assets, Net | 14,084,444 | 0 |
Developed technology [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Intangible Assets, Gross | 7,000,000 | 0 |
Customer contracts [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Intangible Assets, Gross | 6,400,000 | 0 |
Trademarks [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Intangible Assets, Gross | $1,500,000 | $0 |
INTANGIBLE_ASSETS_Details_1
INTANGIBLE ASSETS (Details 1) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
2014 | $611,667 | ' |
2015 | 2,446,667 | ' |
2016 | 2,446,667 | ' |
2017 | 2,446,667 | ' |
2018 | 2,446,667 | ' |
Thereafter | 3,686,109 | ' |
Total | $14,084,444 | $0 |
INTANGIBLE_ASSETS_Details_Text
INTANGIBLE ASSETS (Details Textual) (USD $) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2014 | Sep. 30, 2014 | |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Amortization of Intangible Assets | $611,667 | $815,556 |
LONGTERM_DEBT_Details
LONG-TERM DEBT (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Debt Instrument [Line Items] | ' | ' |
Long-term Debt | $21,525,631 | $14,255,794 |
Current portion of long-term debt | 10,105,601 | 3,316,578 |
Long-term Debt, Excluding Current Maturities | 11,420,030 | 10,939,216 |
Real estate loans [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Long-term Debt | 7,985,456 | 10,370,508 |
Hard Rock Note [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Long-term Debt | 11,445,333 | 0 |
EB-5 business loans [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Long-term Debt | 439,460 | 1,797,178 |
Machinery loans [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Long-term Debt | 1,056,402 | 1,496,710 |
Transportation loans [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Long-term Debt | $598,980 | $591,398 |
LONGTERM_DEBT_Details_Textual
LONG-TERM DEBT (Details Textual) (USD $) | 9 Months Ended |
Sep. 30, 2014 | |
Bridge Loan [Member] | ' |
Debt Instrument [Line Items] | ' |
Debt Conversion, Original Debt, Amount | $2,000,000 |
Debt Conversion, Converted Instrument, Shares Issued | 714,286 |
Debt Instrument, Convertible, Conversion Price (in dollars per share) | $4 |
Hard Rock note [Member] | ' |
Debt Instrument [Line Items] | ' |
Debt Instrument, Maturity Date | 30-May-17 |
Business Combination, Consideration Transferred, Including Equity Interest in Acquiree Held Prior to Combination | 25,000,000 |
Business Combination, Consideration Transferred, Liabilities Incurred | 12,500,000 |
Debt Instrument, Unamortized Discount | 1,054,667 |
Debt Instrument, Frequency of Periodic Payment | 'annual |
Debt Instrument, Periodic Payment, Principal | 5,000,000 |
Debt Instrument, Periodic Payment Terms, Balloon Payment to be Paid | 2,500,000 |
Debt Instrument, Fair Value Disclosure | 11,144,000 |
Debt Instrument Second and Subsequent Payment | 'May 30, 2016 and one final payment |
Debt Instrument, Date of First Required Payment | 30-May-15 |
EB-5 business loans [Member] | ' |
Debt Instrument [Line Items] | ' |
Repayments of Debt | $1,346,597 |
NOTE_RECEIVABLE_Details_Textua
NOTE RECEIVABLE (Details Textual) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | 30-May-14 |
Tronco Energy Corporation [Member] | Tronco Energy Corporation [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' | ' | ' | ' |
Notes Receivable, Related Parties, Current | $8,296,717 | $0 | $8,296,717 | $8,300,000 |
Pledged Shares, Notes Receivable | ' | ' | 8,814,860 | ' |
Notes Receivable Pledged Shares, Price Per Share | ' | ' | $6.28 | ' |
Notes Receivable Pledged Shares, Market Value | ' | ' | 50,000,000 | ' |
Notes Receivable, Extended Maturity Date One | ' | ' | 30-Jun-14 | ' |
Notes Receivable, One Time Payment To Extend Maturity Date | ' | ' | $68,881 | ' |
Notes Receivable, Extended Maturity Date Two | ' | ' | 31-Jul-14 | ' |
Loans Receivable, Description of Variable Rate Basis | ' | ' | 'prime rate | ' |
Loans Receivable, Basis Spread on Variable Rate | ' | ' | 0.25% | ' |
Loans Receivable, Variable Interest Rate | ' | ' | 3.25% | ' |
Receivable with Imputed Interest, Due Date | ' | ' | 31-Jan-14 | ' |
Debt Instrument, Maturity Date | ' | ' | 31-Dec-15 | ' |
RELATED_PARTY_TRANSACTIONS_Det
RELATED PARTY TRANSACTIONS (Details Textual) (USD $) | 9 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Related Party Transaction [Line Items] | ' | ' |
Founders Contribution | $600,000 | ' |
Superior Auto Body [Member] | ' | ' |
Related Party Transaction [Line Items] | ' | ' |
Rental Income, Nonoperating | $93,544 | $92,442 |
INCOME_TAXES_Details
INCOME TAXES (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Current income taxes: | ' | ' | ' | ' |
Federal | ' | ' | $0 | ' |
State | ' | ' | 1,607 | ' |
Current provision for income taxes | ' | ' | 1,607 | ' |
Deferred provision (benefit) for income taxes: | ' | ' | ' | ' |
Federal | ' | ' | 483,290 | ' |
State | ' | ' | 67,326 | ' |
Deferred provision (benefit) for income taxes | ' | ' | 550,616 | 0 |
Provision for income taxes | ($525,822) | $0 | $552,223 | $0 |
INCOME_TAXES_Details_1
INCOME TAXES (Details 1) (USD $) | Sep. 30, 2014 |
Deferred tax asset: | ' |
Net operating losses | $433,892 |
Amortization of intangible assets | 179,170 |
Total deferred tax assets | 613,062 |
Deferred tax liabilities: | ' |
Other | -16,612 |
Non-current: | ' |
Depreciation on fixed assets | -1,088,753 |
Amortization of goodwill | -58,313 |
Total deferred tax liabilities | -1,163,678 |
Net deferred tax liabilities | ($550,616) |
INCOME_TAXES_Details_2
INCOME TAXES (Details 2) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Reconciliation of effective tax rate | ' | ' | ' | ' |
Tax at federal statutory rate | ' | ' | $29,856 | ' |
Income tax prior to IPO not taxable to the Company | ' | ' | -559,909 | ' |
Change in status | ' | ' | 1,044,742 | ' |
State income taxes | ' | ' | 1,012 | ' |
Other | ' | ' | 36,523 | ' |
Permanent differences | ' | ' | 0 | ' |
Provision for income taxes | ($525,822) | $0 | $552,223 | $0 |
STOCK_ISSUANCES_Details_Textua
STOCK ISSUANCES (Details Textual) (Restricted Stock [Member], USD $) | 1 Months Ended |
Aug. 01, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 56,250 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Fair Value | $334,688 |
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights | 'These shares vest over a three year time period |
Director [Member] | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 18,750 |
Director Two [Member] | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 18,750 |
Director Three [Member] | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 18,750 |