Superior Drilling Products (SDPI) 10-Q 14 Aug 15 2015 Q2 Quarterly report Financial data

Document And Entity Information

Document And Entity Information - shares	6 Months Ended
	Jun. 30, 2015	Aug. 14, 2015
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2015
Document Fiscal Year Focus	2,015
Document Fiscal Period Focus	Q2
Entity Registrant Name	Superior Drilling Products, Inc.
Entity Central Index Key	1,600,422
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Trading Symbol	SDPI
Entity Common Stock, Shares Outstanding		17,291,646

Consolidated Condensed Balance

Consolidated Condensed Balance Sheets - USD ($)	Jun. 30, 2015	Dec. 31, 2014
Current assets
Cash	$ 2,456,108	$ 5,792,388
Accounts receivable	2,128,531	4,403,001
Prepaid expenses	211,612	163,934
Inventory	1,478,495	1,219,079
Deferred tax asset	0	271,298
Other current assets	143,999	45,000
Total current assets	6,418,745	11,894,700
Property, plant and equipment, net	15,356,949	15,963,629
Intangible assets, net	12,249,445	13,472,778
Goodwill	7,802,903	7,802,903
Note receivable	8,296,717	8,296,717
Other assets	31,318	112,606
Total assets	50,156,077	57,543,333
Current liabilities
Accounts payable	515,220	893,376
Accrued expenses	1,454,467	1,967,091
Income tax payable	2,000	1,000
Current portion of capital lease obligation	311,706	292,979
Current portion of related party debt obligation	511,846	492,452
Current portion of long-term debt	3,012,286	10,720,243
Total current liabilities	5,807,525	14,367,141
Deferred tax liability	208,966	744,577
Capital lease obligation, less current portion	417,280	578,273
Related party debt, less current portion	856,955	1,117,820
Long-term debt, less current portion	15,972,768	10,669,311
Total liabilities	$ 23,263,494	$ 27,477,122
Commitments and contingencies (Note 6)
Stockholders' equity
Common stock - $0.001 par value; 100,000,000 shares authorized; 17,291,646 shares issued and outstanding	$ 17,292	$ 17,292
Additional paid-in-capital	30,920,764	30,815,609
Retained deficit	(4,045,473)	(766,690)
Total stockholders' equity	26,892,583	30,066,211
Total liabilities and stockholders' equity	$ 50,156,077	$ 57,543,333

Consolidated Condensed Balance3

Consolidated Condensed Balance Sheets [Parenthetical] - $ / shares	Jun. 30, 2015	Dec. 31, 2014
Common Stock, Par or Stated Value Per Share	$ 0.001	$ 0.001
Common Stock, Shares Authorized	100,000,000	100,000,000
Common Stock, Shares, Issued	17,291,646	17,291,646
Common Stock, Shares, Outstanding	17,291,646	17,291,646

Consolidated Condensed Statemen

Consolidated Condensed Statements of Operations - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Revenue	$ 2,881,372	$ 4,468,675	$ 6,955,990	$ 8,202,342
Operating costs and expenses
Cost of revenue	1,585,018	1,368,243	3,504,050	2,601,615
Selling, general and administrative	1,780,649	1,524,762	3,840,423	2,580,028
Depreciation and amortization	1,170,204	723,049	2,318,701	1,043,616
Total operating expenses	4,535,871	3,616,054	9,663,174	6,225,259
Operating (loss) income	(1,654,499)	852,621	(2,707,184)	1,977,083
Other income (expense)
Interest income	73,293	23,072	146,569	23,072
Interest expense	(467,252)	(579,047)	(1,027,680)	(889,886)
Other income	57,026	89,048	129,085	186,526
(Loss) gain on sale of assets	(27,666)	13,292	(82,886)	13,292
Change in guaranteed debt	0	0	0	(45,834)
Total other expense	(364,599)	(453,635)	(834,912)	(712,830)
(Loss) income before income taxes	(2,019,098)	398,986	(3,542,096)	1,264,253
Income tax expense (benefit)	216,599	1,078,045	(263,313)	1,078,045
Net (loss) income	$ (2,235,697)	$ (679,059)	$ (3,278,783)	$ 186,208
Basic (loss) earnings per common share	$ (0.13)	$ (0.06)	$ (0.19)	$ 0.02
Basic weighted average common shares outstanding	17,291,646	11,795,708	17,291,646	10,313,518
Diluted (loss) earnings per common share	$ (0.13)	$ (0.06)	$ (0.19)	$ 0.02
Diluted weighted average common shares outstanding	17,291,646	11,795,708	17,291,646	10,439,801

Consolidated Condensed Stateme5

Consolidated Condensed Statements Of Cash Flows - USD ($)	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Cash Flows From Operating Activities
Net (loss) income	$ (3,278,783)	$ 186,208
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization expense	2,318,701	1,043,616
Amortization of debt discount	411,969	324,974
Deferred tax (benefit) expense	(264,313)	977,326
Share - based compensation expense	105,155	0
Change in guaranteed debt	0	45,837
Loss on disposition of assets	82,886	0
Changes in operating assets and liabilities:
Accounts receivable	2,274,470	(606,596)
Inventory	(259,416)	(311,463)
Prepaid expenses and other current assets	(146,677)	(85,578)
Other assets	68,069	(106,829)
Accounts payable and accrued expenses	(889,780)	1,268,522
Net Cash Provided by Operating Activities	422,281	2,736,017
Cash Flows From Investing Activities
Purchases of property, plant and equipment	(558,355)	(429,677)
Note receivable to Tronco	0	(8,296,717)
Purchase of Hard Rock assets	0	(12,500,000)
Net Cash Used in Investing Activities	(558,355)	(21,226,394)
Cash Flows From Financing Activities
Principal payments on debt	(2,816,469)	(1,085,219)
Principal payments on related party debt	(241,471)	0
Principal payments on capital lease obligations	(142,266)	(125,584)
Proceeds received from borrowings on debt	0	2,000,000
Proceeds received from issuance of common stock	0	31,050,000
Initial Public Offering costs	0	(3,578,865)
Capital distributions	0	(2,053,861)
Net Cash (Used) Provided by Financing Activities	(3,200,206)	26,206,471
Net (decrease) increase in Cash	(3,336,280)	7,716,094
Cash at Beginning of Period	5,792,388	11,256
Cash at End of Period	2,456,108	7,727,350
Supplemental information:
Cash paid for Interest	$ 577,072	$ 528,591

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	6 Months Ended
	Jun. 30, 2015
Accounting Policies [Abstract]
Significant Accounting Policies [Text Block]	NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Superior Drilling Products, Inc. (the “Company”, “we”, “our” or “us”) is a drilling and completion tool technology company. We manufacture, repair, sell and rent drilling and completion tools. All of the drilling and completion tools that we rent and sale 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 and (b) the subsequent acquisition of Hard Rock Solutions, LLC. We changed our name from SD Company Inc. to Superior Drilling Products, Inc. on May 22, 2014 in conjunction with closing of the reorganization (the “Reorganization”). Our headquarters and principal manufacturing operations are located in Vernal, Utah. The accompanying consolidated condensed 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 Properties Series, LLC, a Utah limited liability company (“MPS”), (e) Meier Leasing, LLC, a Utah limited liability company (“ML”), and (f) Hard Rock Solutions, LLC, a Utah limited liability company (“HR”). 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 These interim consolidated condensed financial statements for the three and six months ended June 30, 2015 and 2014, 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 six months ended June 30, 2015 are not necessarily indicative of the results of operations expected for the year ended December 31, 2015. 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, 2014 and 2013 and the notes thereto, which were included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014, filed with the Securities and Exchange Commission (the “SEC”). Basic earnings per common share are computed by dividing net income by the weighted-average number of common shares outstanding during the period. Diluted earnings per share are calculated to give effect to potentially issuable common shares, which include stock warrants. As of June 30, 2015, the Company had warrants exercisable for 714,286 4.00 The Company operates as a drilling and completion tool technology company that rents drill string enhancement tools and sells tools in the completion and workover industry all 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 minimum rental payments or terms. Revenue is recognized upon completion of the job. The tools are currently rented and sold primarily to entities operating in North Dakota, Wyoming, Texas, Montana, Oklahoma, Utah, New Mexico and Colorado. 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. The Company follows ASC 718, Compensation- Stock Compensation Liquidity Our principal sources of liquidity are our cash and cash equivalents balances, cash flow from operations and access to financial markets. Our principal uses of cash are operating expenses, capital expenditures, and repayment of debt. We are currently introducing our Strider tool and OrBit completion bit to the market, which we believe will increase our cash flow. However, management does not believe this will have a large enough impact to meet all of our cash needs for the next 12 months. We are currently evaluating a range of alternatives to improve our liquidity position. However we cannot provide any assurances that any of these financing options 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 level; (ii) fund certain obligations as they become due; (iii) further refinance debt to better meet our cash flow requirements; and (iv) respond to competitive pressures or unanticipated capital requirements. Recently Enacted Accounting Standards In January 2015, the FASB issued ASU 2015-01, “ Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items.” In April 2015, the FASB issued ASU 2015-03, “ Simplifying the Presentation of Debt Issuance Costs.

INVENTORY

INVENTORY	6 Months Ended
	Jun. 30, 2015
Inventory Disclosure [Abstract]
Inventory Disclosure [Text Block]	NOTE 2. INVENTORY June 30, December 31, 2015 2014 Raw material $ 913,073 $ 990,709 Work in progress 171,178 155,903 Finished goods 394,244 72,467 $ 1,478,495 $ 1,219,079

PROPERTY, PLANT AND EQUIPMENT

PROPERTY, PLANT AND EQUIPMENT	6 Months Ended
	Jun. 30, 2015
Property, Plant and Equipment [Abstract]
Property, Plant and Equipment Disclosure [Text Block]	NOTE 3. PROPERTY, PLANT AND EQUIPMENT June 30, December 31, Land $ 2,268,039 $ 2,268,039 Buildings 4,847,778 4,847,778 Buildings – Superior Auto Body. 2,213,729 2,213,729 Leasehold improvements 717,232 710,232 Machinery and equipment 6,682,269 6,338,521 Machinery under capital lease 2,322,340 2,322,340 Furniture and fixtures 507,556 466,213 Transportation assets 1,343,349 1,343,349 20,902,292 20,510,201 Accumulated depreciation (5,545,343) (4,546,572) $ 15,356,949 $ 15,963,629 Depreciation expense related to property, plant and equipment for the three and six months ended June 30, 2015 was $ 551,320 1,095,368

INTANGIBLE ASSETS

INTANGIBLE ASSETS	6 Months Ended
	Jun. 30, 2015
Goodwill and Intangible Assets Disclosure [Abstract]
Intangible Assets Disclosure [Text Block]	NOTE 4. INTANGIBLE ASSETS June 30, December 31, 2015 2014 Developed technology $ 7,000,000 $ 7,000,000 Customer contracts 6,400,000 6,400,000 Trademarks 1,500,000 1,500,000 14,900,000 14,900,000 Accumulated amortization (2,650,555) (1,427,222) $ 12,249,445 $ 13,472,778 Amortization expense related to intangible assets for the three and six months ended June 30, 2015, was $ 617,536 1,223,333 Annually, and more often as necessary, we will perform an evaluation of our intangible assets and goodwill for indications of impairment. If indications exist, we will perform an evaluation of the fair value of the intangible assets and the goodwill and, if necessary, record an impairment charge. As of June 30, 2015, the Company performed an evaluation of the intangible assets and goodwill and determined no impairment was needed.

LONG-TERM DEBT

LONG-TERM DEBT	6 Months Ended
	Jun. 30, 2015
Debt Disclosure [Abstract]
Debt Disclosure [Text Block]	NOTE 5. LONG-TERM DEBT June 30, December 31, 2015 2014 Real estate loans $ 7,748,708 $ 7,912,354 Hard Rock Note (net of $416,698 and $828,667 discount, respectively) 9,583,302 11,671,333 Machinery loans 936,209 1,019,100 Transportation loans 716,834 786,767 18,985,053 21,389,554 Current portion of long-term debt (3,012,286) (10,720,243) Long term portion of long-term debt $ 15,972,767 $ 10,669,311 On May 29, 2014, the Company purchased all of the interests of Hard Rock. Consideration consisted of $ 12.5 12.5 On April 22, 2015, the Hard Rock Note was restated and amended (the “Amended and Restated Hard Rock Note”). The Amended and Restated Hard Rock Note accrued interest from April 20, 2015 until May 29, 2015 at an adjustable rate per annum equal to the JP Morgan Chase Bank, N.A. annual prime rate as it had originally accrues interest at a fixed rate equal to 5.25% per annum. Under the terms of the Amended and Restated Hard Rock Note, the Company made one installment payment of $ 2.5 On April 9, 2015, the Company refinanced its $ 5.0 5.25 39,317 4,256,355

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	6 Months Ended
	Jun. 30, 2015
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies Disclosure [Text Block]	NOTE 6. 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 Meier 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 (as defined in Note 8) 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 June 30, 2015, there have been no updates or decisions made concerning this matter.

ORBIT PURCHASE

ORBIT PURCHASE	6 Months Ended
	Jun. 30, 2015
Business Combinations [Abstract]
Business Combination Disclosure [Text Block]	NOTE 7. ORBIT PURCHASE On January 9, 2015, we purchased the exclusive manufacturing, marketing and sales rights and the current inventory of the OrBIT completion drill bit product line from Tenax Energy Solutions (“Tenax”). Consideration for the purchase of inventory was approximately $ 300,000 cash plus an earn out of up to 2 2 83,333 1,000,000

RELATED PARTY DEBT AND TRANSACT

RELATED PARTY DEBT AND TRANSACTIONS	6 Months Ended
	Jun. 30, 2015
Related Party Transactions [Abstract]
Related Party Transactions Disclosure [Text Block]	NOTE 8. RELATED PARTY DEBT AND TRANSACTIONS June 30, December 31, 2015 2014 Related party loan 1,368,801 1,610,272 1,368,801 1,610,272 Current portion of related party debt (511,846) (492,452) Long term portion of related party debt $ 856,955 $ 1,117,820 On May 29, 2014 as part of the Reorganization, the Company issued notes to our founders, entities owned by the Meier’s, in the aggregate amount of $ 2 Superior Auto Body The Company leases certain of its facilities to Superior Auto Body (“SAB”), a related party which is partially owned by a member of the Meier family. We recorded rental income from the related party in the amounts of $ 49,975 99,951 Tronco Related Loans In January 2014, we entered into a Note Purchase and Sale Agreement under which we agreed to purchase a loan (the “Tronco 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 our initial public offering (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 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 Meier (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 1.65 14.6 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 3.25 December 31, 2014 December 31, 2015 8,814,860

SHARE BASED COMPENSATION

SHARE BASED COMPENSATION	6 Months Ended
	Jun. 30, 2015
Share-based Compensation [Abstract]
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]	NOTE 9. SHARE BASED COMPENSATION On June 15, 2015, our stockholders approved the Superior Drilling Company, Inc. 2015 Long Term Incentive Plan (the “2015 Incentive Plan”). The purpose of the 2015 Incentive Plan is to advance the interests of the Company and its stockholders by providing an incentive to attract, retain and reward persons performing services for the Company and its affiliates and by motivating such persons to contribute to the growth and profitability of the Company and our affiliates. Subject to adjustment as provided in the 2015 Incentive Plan, the maximum aggregate number of shares of the Company’s common stock that may be issued with respect to awards under the 2015 Incentive Plan is 1,592,878 leaving 1,592,878 shares As of June 30, 2015, there were 131,250 Board of Directors Compensation expense recognized for grants vesting under the 2014 Incentive Plan was $ 52,578 105,155 Total unrecognized compensation expense related to unvested restricted stock units expected to be recognized over the remaining weighted vesting period of 2.3 481,290 These shares vest over a three year time period.

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	6 Months Ended
	Jun. 30, 2015
Subsequent Events [Abstract]
Subsequent Events [Text Block]	NOTE 10. SUBSEQUENT EVENTS On August 10, 2015, the Board of Directors granted the issuance of 71,202 restricted stock units from the Company’s 2015 Incentive Plan to the Directors based on the closing price of the Company’s common stock on the date of the grant. These restricted stock units will vest over a three year period. Also, on August 10, 2015, 366,000 87,500 employees based on the closing price of the Company’s common stock on the date of the grant These restricted stock units and options will vest 33% on the grant date, 33% on the first anniversary of the grant date and 34% on second anniversary of the grant date.

SUMMARY OF SIGNIFICANT ACCOUN16

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	6 Months Ended
	Jun. 30, 2015
Accounting Policies [Abstract]
Nature of Operations [Policy Text Block]	Nature of Operations Superior Drilling Products, Inc. (the “Company”, “we”, “our” or “us”) is a drilling and completion tool technology company. We manufacture, repair, sell and rent drilling and completion tools. All of the drilling and completion tools that we rent and sale 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 and (b) the subsequent acquisition of Hard Rock Solutions, LLC. We changed our name from SD Company Inc. to Superior Drilling Products, Inc. on May 22, 2014 in conjunction with closing of the reorganization (the “Reorganization”). Our headquarters and principal manufacturing operations are located in Vernal, Utah.
Basis of Accounting, Policy [Policy Text Block]	Basis of Presentation The accompanying consolidated condensed 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 Properties Series, LLC, a Utah limited liability company (“MPS”), (e) Meier Leasing, LLC, a Utah limited liability company (“ML”), and (f) Hard Rock Solutions, LLC, a Utah limited liability company (“HR”). 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
Unaudited Interim Financial Information Policy [Policy Text Block]	Unaudited Interim Financial Information These interim consolidated condensed financial statements for the three and six months ended June 30, 2015 and 2014, 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 six months ended June 30, 2015 are not necessarily indicative of the results of operations expected for the year ended December 31, 2015. 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, 2014 and 2013 and the notes thereto, which were included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014, filed with the Securities and Exchange Commission (the “SEC”).
Earnings Per Share, Policy [Policy Text Block]	Basic and Diluted Earnings Per Share Basic earnings per common share are computed by dividing net income by the weighted-average number of common shares outstanding during the period. Diluted earnings per share are calculated to give effect to potentially issuable common shares, which include stock warrants. As of June 30, 2015, the Company had warrants exercisable for 714,286 4.00
Rental Income Policy [Policy Text Block]	Rental and Sales Income The Company operates as a drilling and completion tool technology company that rents drill string enhancement tools and sells tools in the completion and workover industry all 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 minimum rental payments or terms. Revenue is recognized upon completion of the job. The tools are currently rented and sold 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
Liquidity [Policy Text Block]	Liquidity Our principal sources of liquidity are our cash and cash equivalents balances, cash flow from operations and access to financial markets. Our principal uses of cash are operating expenses, capital expenditures, and repayment of debt. We are currently introducing our Strider tool and OrBit completion bit to the market, which we believe will increase our cash flow. However, management does not believe this will have a large enough impact to meet all of our cash needs for the next 12 months. We are currently evaluating a range of alternatives to improve our liquidity position. However we cannot provide any assurances that any of these financing options 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 level; (ii) fund certain obligations as they become due; (iii) further refinance debt to better meet our cash flow requirements; and (iv) respond to competitive pressures or unanticipated capital requirements.
New Accounting Pronouncements, Policy [Policy Text Block]	Recently Enacted Accounting Standards In January 2015, the FASB issued ASU 2015-01, “ Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items.” In April 2015, the FASB issued ASU 2015-03, “ Simplifying the Presentation of Debt Issuance Costs.

INVENTORY (Tables)

INVENTORY (Tables)	6 Months Ended
	Jun. 30, 2015
Inventory Disclosure [Abstract]
Schedule of Inventory, Current [Table Text Block]	Inventory is comprised of the following: June 30, December 31, 2015 2014 Raw material $ 913,073 $ 990,709 Work in progress 171,178 155,903 Finished goods 394,244 72,467 $ 1,478,495 $ 1,219,079

PROPERTY, PLANT AND EQUIPMENT (

PROPERTY, PLANT AND EQUIPMENT (Tables)	6 Months Ended
	Jun. 30, 2015
Property, Plant and Equipment [Abstract]
Property, Plant and Equipment [Table Text Block]	Property, plant and equipment are comprised of the following: June 30, December 31, Land $ 2,268,039 $ 2,268,039 Buildings 4,847,778 4,847,778 Buildings – Superior Auto Body. 2,213,729 2,213,729 Leasehold improvements 717,232 710,232 Machinery and equipment 6,682,269 6,338,521 Machinery under capital lease 2,322,340 2,322,340 Furniture and fixtures 507,556 466,213 Transportation assets 1,343,349 1,343,349 20,902,292 20,510,201 Accumulated depreciation (5,545,343) (4,546,572) $ 15,356,949 $ 15,963,629

INTANGIBLE ASSETS (Tables)

INTANGIBLE ASSETS (Tables)	6 Months Ended
	Jun. 30, 2015
Goodwill and Intangible Assets Disclosure [Abstract]
Schedule of Finite-Lived Intangible Assets [Table Text Block]	Intangible assets are comprised of the following: June 30, December 31, 2015 2014 Developed technology $ 7,000,000 $ 7,000,000 Customer contracts 6,400,000 6,400,000 Trademarks 1,500,000 1,500,000 14,900,000 14,900,000 Accumulated amortization (2,650,555) (1,427,222) $ 12,249,445 $ 13,472,778

LONG-TERM DEBT (Tables)

LONG-TERM DEBT (Tables)	6 Months Ended
	Jun. 30, 2015
Debt Disclosure [Abstract]
Schedule of Long-term Debt Instruments [Table Text Block]	Long-term debt is comprised of the following: June 30, December 31, 2015 2014 Real estate loans $ 7,748,708 $ 7,912,354 Hard Rock Note (net of $416,698 and $828,667 discount, respectively) 9,583,302 11,671,333 Machinery loans 936,209 1,019,100 Transportation loans 716,834 786,767 18,985,053 21,389,554 Current portion of long-term debt (3,012,286) (10,720,243) Long term portion of long-term debt $ 15,972,767 $ 10,669,311

RELATED PARTY DEBT AND TRANSA21

RELATED PARTY DEBT AND TRANSACTIONS (Tables)	6 Months Ended
	Jun. 30, 2015
Related Party Transactions [Abstract]
Schedule of Related Party Transactions [Table Text Block]	June 30, December 31, 2015 2014 Related party loan 1,368,801 1,610,272 1,368,801 1,610,272 Current portion of related party debt (511,846) (492,452) Long term portion of related party debt $ 856,955 $ 1,117,820

SUMMARY OF SIGNIFICANT ACCOUN22

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Textual) - Jun. 30, 2015 - USD ($) $ / shares in Units, $ in Billions	Total
Maximum Amount Of Revenue For Emerging Growth Company	$ 1
Class of Warrant or Right, Number of Securities Called by Warrants or Rights	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 2,018

INVENTORY (Details)

INVENTORY (Details) - USD ($)	Jun. 30, 2015	Dec. 31, 2014
Inventory [Line Items]
Raw material	$ 913,073	$ 990,709
Work in progress	171,178	155,903
Finished goods	394,244	72,467
Inventory, Net	$ 1,478,495	$ 1,219,079

PROPERTY, PLANT AND EQUIPMENT24

PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($)	Jun. 30, 2015	Dec. 31, 2014
Property, Plant and Equipment [Line Items]
Land	$ 2,268,039	$ 2,268,039
Buildings	4,847,778	4,847,778
Buildings - Superior Auto Body.	2,213,729	2,213,729
Leasehold improvements	717,232	710,232
Machinery and equipment	6,682,269	6,338,521
Machinery under capital lease	2,322,340	2,322,340
Furniture and fixtures	507,556	466,213
Transportation assets	1,343,349	1,343,349
Property, Plant and Equipment, Gross	20,902,292	20,510,201
Accumulated depreciation	(5,545,343)	(4,546,572)
Property, Plant and Equipment, Net	$ 15,356,949	$ 15,963,629

PROPERTY, PLANT AND EQUIPMENT25

PROPERTY, PLANT AND EQUIPMENT (Details Textual) - Jun. 30, 2015 - USD ($)	Total	Total
Property, Plant and Equipment [Line Items]
Depreciation	$ 551,320	$ 1,095,368

INTANGIBLE ASSETS (Details)

INTANGIBLE ASSETS (Details) - USD ($)	Jun. 30, 2015	Dec. 31, 2014
Finite-Lived Intangible Assets [Line Items]
Intangible Assets, Gross	$ 14,900,000	$ 14,900,000
Intangible Assets, Accumulated Amortization	(2,650,555)	(1,427,222)
Finite-Lived Intangible Assets, Net	12,249,445	13,472,778
Developed Technology Rights [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible Assets, Gross	7,000,000	7,000,000
Customer Contracts [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible Assets, Gross	6,400,000	6,400,000
Trademarks [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible Assets, Gross	$ 1,500,000	$ 1,500,000

INTANGIBLE ASSETS (Details Text

INTANGIBLE ASSETS (Details Textual) - Jun. 30, 2015 - USD ($)	Total	Total
Finite-Lived Intangible Assets [Line Items]
Amortization of Intangible Assets	$ 617,536	$ 1,223,333

LONG-TERM DEBT (Details)

LONG-TERM DEBT (Details) - USD ($)	Jun. 30, 2015	Dec. 31, 2014
Debt Instrument [Line Items]
Long-term Debt	$ 18,985,053	$ 21,389,554
Current portion of long-term debt	(3,012,286)	(10,720,243)
Long-term Debt, Excluding Current Maturities	15,972,767	10,669,311
Real estate loans [Member]
Debt Instrument [Line Items]
Long-term Debt	7,748,708	7,912,354
Hard Rock Note [Member]
Debt Instrument [Line Items]
Long-term Debt	9,583,302	11,671,333
Machinery loans [Member]
Debt Instrument [Line Items]
Long-term Debt	936,209	1,019,100
Transportation loans [Member]
Debt Instrument [Line Items]
Long-term Debt	$ 716,834	$ 786,767

LONG-TERM DEBT (Details Textual

LONG-TERM DEBT (Details Textual) - Related Party [Domain] - USD ($)	Apr. 09, 2015	May. 29, 2015	May. 29, 2014	Jun. 30, 2015	Aug. 15, 2018	Dec. 31, 2014
Hard Rock note [Member]
Debt Instrument [Line Items]
Debt Instrument, Maturity Date				Jul. 14, 2017
Debt Instrument, Periodic Payment		$ 2,500,000
Debt Instrument, Unamortized Discount				$ 416,698		$ 828,667
Business Combination, Consideration Transferred, Liabilities Incurred			$ 12,500,000
Debt Instrument, Interest Rate, Stated Percentage				5.25%
Debt Instrument, Frequency of Periodic Payment				four equal additional payments
Payments to Acquire Businesses, Gross			$ 12,500,000
American Bank Of The North [Member]
Debt Instrument [Line Items]
Debt Instrument, Maturity Date	May 15, 2018
Debt Instrument, Periodic Payment	$ 39,317
Debt Instrument, Interest Rate, Stated Percentage	5.25%
Debt Instrument, Face Amount	$ 5,000,000
Debt Instrument, Payment Terms	Payment on the loan will be made in 39 monthly principal plus interest payments of $39,317 plus a final payment of $4,256,355 in August 2018.
American Bank Of The North [Member] | Subsequent Event [Member]
Debt Instrument [Line Items]
Debt Instrument, Annual Principal Payment					$ 4,256,355

ORBIT PURCHASE (Detail Textual)

ORBIT PURCHASE (Detail Textual) - USD ($)	Jan. 01, 2016	Jan. 09, 2015
OrBIT patents [Member] | Subsequent Event [Member]
Business Acquisition [Line Items]
Payments to Acquire Intangible Assets	$ 1,000,000
Tenax Energy Solutions [Member] | Maximum [Member]
Business Acquisition [Line Items]
Contractual Obligation		$ 83,333
Tenax Energy Solutions [Member] | OrBIT Product Line [Member]
Business Acquisition [Line Items]
Payments to Acquire Businesses, Gross		$ 300,000
Sales Revenue Period		2 years
Tenax Energy Solutions [Member] | OrBIT Product Line [Member] | Maximum [Member]
Business Acquisition [Line Items]
Other Payments to Acquire Businesses		$ 2,000,000

RELATED PARTY DEBT AND TRANSA31

RELATED PARTY DEBT AND TRANSACTIONS (Details) - USD ($)	Jun. 30, 2015	Dec. 31, 2014
Related Party Transaction [Line Items]
Related party loan	$ 1,368,801	$ 1,610,272
Current portion of related party debt	(511,846)	(492,452)
Long term portion of related party debt	$ 856,955	$ 1,117,820

RELATED PARTY TRANSACTIONS (Det

RELATED PARTY TRANSACTIONS (Details Textual) - USD ($)	1 Months Ended	3 Months Ended	6 Months Ended
	May. 29, 2014	Jun. 30, 2015	Jun. 30, 2015	Dec. 31, 2014	May. 30, 2014
Related Party Transaction [Line Items]
Notes Receivable, Related Parties, Current		$ 8,296,717	$ 8,296,717	$ 8,296,717
Founders [Member]
Related Party Transaction [Line Items]
Notes Issued	$ 2,000,000
Superior Auto Body [Member]
Related Party Transaction [Line Items]
Rental Income, Nonoperating		$ 49,975	$ 99,951
Tronco Energy Corporation [Member]
Related Party Transaction [Line Items]
Notes Receivable, Related Parties, Current					$ 8,300,000
Pledged Shares, Notes Receivable		8,814,860	8,814,860
Notes Receivable Pledged Shares, Price Per Share		$ 1.65	$ 1.65
Notes Receivable Pledged Shares, Market Value		$ 14,600,000	$ 14,600,000
Loans Receivable, Basis Spread on Variable Rate		0.25%	0.25%
Loans Receivable, Variable Interest Rate			3.25%
Receivable with Imputed Interest, Due Date			Dec. 31, 2014
Debt Instrument, Maturity Date			Dec. 31, 2015
Adjustments to Additional Paid in Capital, Other			$ 8,814,860

SHARE BASED COMPENSATION (Detai

SHARE BASED COMPENSATION (Details Textual) - Jun. 30, 2015 - Relationship to Entity [Domain] - USD ($)	Total	Total
Stock Compensation Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period		3 years
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options	$ 481,290	$ 481,290
Employee Service Share Based Compensation Nonvested Awards Total Compensation Cost Not Yet Recognized Stock Options Vesting Period		2 years 3 months 18 days
2015 Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant	1,592,878	1,592,878
2014 Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period		131,250
Allocated Share-based Compensation Expense	$ 52,578	$ 105,155

SUBSEQUENT EVENTS (Details Text

SUBSEQUENT EVENTS (Details Textual) - Aug. 10, 2015 - Subsequent Event [Member] - shares	Total
Officers And Employees [Member] | 2015 Incentive Plan [Member]
Subsequent Event [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights	These restricted stock units and options will vest 33% on the grant date, 33% on the first anniversary of the grant date and 34% on second anniversary of the grant date.
Restricted Stock Units (RSUs) [Member] | Director [Member]
Subsequent Event [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	3 years
Restricted Stock Units (RSUs) [Member] | Director [Member] | 2015 Incentive Plan [Member]
Subsequent Event [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period	71,202
Restricted Stock Units (RSUs) [Member] | Officers And Employees [Member] | 2015 Incentive Plan [Member]
Subsequent Event [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period	366,000
Employee Stock Option [Member] | Officers And Employees [Member] | 2015 Incentive Plan [Member]
Subsequent Event [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross	87,500