Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | May 11, 2017 | |
Document And Entity Information | ||
Entity Registrant Name | Superior Drilling Products, Inc. | |
Entity Central Index Key | 1,600,422 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 24,197,148 | |
Trading Symbol | SDPI | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,017 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Current assets | ||
Cash | $ 1,029,844 | $ 2,241,902 |
Accounts receivable, net | 2,655,813 | 1,038,664 |
Prepaid expenses | 79,621 | 76,175 |
Inventories | 1,351,655 | 1,167,692 |
Asset held for sale | 2,490,000 | |
Other current assets | 63,381 | 13,598 |
Total current assets | 5,180,314 | 7,028,031 |
Property, plant and equipment, net | 8,875,601 | 9,068,359 |
Intangible assets, net | 7,967,778 | 8,579,444 |
Related party note receivable | 7,746,717 | 8,296,717 |
Other noncurrent assets | 15,954 | 15,954 |
Total assets | 29,786,364 | 32,988,505 |
Current liabilities | ||
Accounts payable | 1,432,582 | 1,066,514 |
Accrued expenses | 365,261 | 449,004 |
Capital lease obligation | 157,005 | 217,302 |
Related party debt obligation | 222,499 | 272,215 |
Current portion of long-term debt, net of discounts | 1,418,480 | 2,905,682 |
Total current liabilities | 3,595,827 | 4,910,717 |
Other long term liability | 253,167 | 820,657 |
Long-term debt, less current portion, net of discounts | 12,179,541 | 13,288,701 |
Total liabilities | 16,028,535 | 19,020,075 |
Shareholders’ equity | ||
Common stock - $0 001 par value; 100,000,000 shares authorized; 24,197,148 and 24,120,695 shares issued and outstanding, respectively | 24,197 | 24,120 |
Additional paid-in-capital | 38,470,735 | 38,295,428 |
Accumulated deficit | (24,737,103) | (24,351,118) |
Total shareholders’ equity | 13,757,829 | 13,968,430 |
Total liabilities and shareholders’ equity | $ 29,786,364 | $ 32,988,505 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
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 | 24,197,148 | 24,120,695 |
Common Stock, Shares, Outstanding | 24,197,148 | 24,120,695 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Income Statement [Abstract] | ||
Revenue | $ 3,369,612 | $ 1,444,626 |
Operating costs and expenses | ||
Cost of revenue | 1,180,733 | 1,020,614 |
Selling, general and administrative expenses | 1,497,517 | 1,290,606 |
Depreciation and amortization expense | 938,022 | 1,234,424 |
Total operating costs and expenses | 3,616,272 | 3,545,644 |
Operating loss | (246,660) | (2,101,018) |
Other income (expense) | ||
Interest income | 81,859 | 78,368 |
Interest expense | (259,025) | (363,468) |
Other income | 43,669 | 56,726 |
Gain (loss) on sale of assets | (5,828) | 86,852 |
Total other expense | (139,325) | (141,522) |
Net loss | $ (385,985) | $ (2,242,540) |
Basic loss earnings per common share | $ (0.02) | $ (0.13) |
Basic weighted average common shares outstanding | 24,196,299 | 17,459,605 |
Diluted loss per common share | $ (0.02) | $ (0.13) |
Diluted weighted average common shares outstanding | 24,196,299 | 17,459,605 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Cash Flows From Operating Activities | ||
Net loss | $ (385,985) | $ (2,242,540) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization expense | 938,022 | 1,246,880 |
Amortization of debt discount | 20,452 | 34,884 |
Share based compensation expense | 175,380 | 257,309 |
(Gain) loss on sale of assets | 5,828 | (86,852) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (1,617,149) | 1,030,050 |
Inventories | (183,963) | (67,969) |
Prepaid expenses and other noncurrent assets | (53,229) | (86,115) |
Accounts payable and accrued expenses | 282,329 | (430,964) |
Other long term liabilities | (17,490) | |
Net Cash Used in Operating Activities | (835,805) | (345,317) |
Cash Flows From Investing Activities | ||
Purchases of property, plant and equipment | (132,583) | (145,791) |
Proceeds from sale of fixed assets | 2,483,158 | |
Net Cash Provided by (Used in) Investing Activities | 2,350,575 | (145,791) |
Cash Flows From Financing Activities | ||
Principal payments on debt | (2,616,815) | (915,125) |
Principal payments on related party debt | (49,716) | (44,661) |
Principal payments on capital lease obligations | (60,297) | (79,231) |
Proceeds received from debt borrowings | 1,000,000 | |
Proceeds from sale of subsidiary | 50,700 | |
Proceeds from payments on related party note receivable | 5,634 | |
Debt issuance costs | (56,188) | |
Net Cash Used in Financing Activities | (2,726,828) | (38,871) |
Net decrease in Cash | (1,212,058) | (529,979) |
Cash at Beginning of Period | 2,241,902 | 1,297,002 |
Cash at End of Period | 1,029,844 | 767,023 |
Supplemental information: | ||
Cash paid for Interest | 295,910 | 536,315 |
Non-cash payment of other long term liability by offsetting related party note receivable | $ 550,000 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization and Nature of Operations Superior Drilling Products, Inc. (the “Company”, “SDPI”, “we”, “our” or “us”) is a drilling and completion tool technology company providing solutions for the oil and natural gas drilling industry. The Company, designs, engineers, manufactures, sells, and repairs drilling and completion tools. Our subsidiaries include (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 Design and Fabrication, LLC, a Utah limited liability company (“SDF”), (b) Extreme Technologies, LLC, a Utah limited liability company (“ET”), (c) Meier Properties Series, LLC, a Utah limited liability company (“MPS”), (d) Meier Leasing, LLC, a Utah limited liability company (“ML”), and (e) HR. Basis of Presentation The Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The consolidated financial statements include the accounts of Superior Drilling Products Inc. and all of its wholly-owned subsidiaries. All significant intercompany accounts have been eliminated in consolidation. The Company does not have investments in any unconsolidated subsidiaries. Revenue Recognition We are a drilling and completion tool technology company and we generate revenue from the refurbishment, manufacturing, repair, and sale of drilling and completion tools. Our manufactured products are produced in a standard manufacturing operation, even when produced to our customer’s specifications. We earn royalty commission revenue when our customer invoices their customer for the use of our tools. The Company may act as an agent by billing and collecting its customers’ tool rental revenue. When we are an agent for our customer, revenue is presented in the statement of operations on a net basis. At March 31, 2017, there was approximately $382,000 of accounts receivable and approximately $488,000 of accounts payable related to transactions we performed as an agent for our customer. Unaudited Interim Financial Presentation These interim consolidated condensed financial statements for the three months ended March 31, 2017 and 2016, 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 months ended March 31, 2017 are not necessarily indicative of the results of operations expected for the year ended December 31, 2017. 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, 2016 and 2015 and the notes thereto, which were included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016, filed with the Securities and Exchange Commission (the “SEC”). Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes. Actual results could differ from those estimates. Significant items subject to estimates and assumptions include the carrying amount and useful lives of property and equipment and intangible assets, impairment assessments, share-based compensation expense, and valuation allowances for accounts receivable, inventories, and deferred tax assets. Accounting Standards In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers Revenue from Contracts with Customers , In February 2016, the FASB issued ASU No. 2016-02, “ Leases |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Inventories | NOTE 2. INVENTORIES Inventories is comprised of the following: March 31, 2017 December 31, 2016 Raw material $ 996,290 $ 952,419 Work in progress 189,546 90,017 Finished goods 165,819 125,256 $ 1,351,655 $ 1,167,692- |
Property, Plant and Equipment
Property, Plant and Equipment | 3 Months Ended |
Mar. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | NOTE 3. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment are comprised of the following: March 31, 2017 December 31, 2016 Land $ 880,416 $ 880,416 Buildings 4,847,778 4,847,778 Leasehold improvements 717,232 717,232 Machinery and equipment 5,192,864 5,060,281 Machinery under capital lease 2,322,340 2,322,340 Furniture and fixtures 507,554 507,554 Transportation assets 882,163 882,163 15,350,347 15,217,764 Accumulated depreciation (6,474,746 ) (6,149,405 ) $ 8,875,601 $ 9,068,359 Depreciation expense related to property, plant and equipment for the three months ended March 31, 2017 and 2016 was $326,356 and $622,757, respectively. |
Intangible Assets
Intangible Assets | 3 Months Ended |
Mar. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | NOTE 4. INTANGIBLE ASSETS Intangible assets are comprised of the following: March 31, 2017 December 31, 2016 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 (6,932,222 ) (6,320,556 ) $ 7,967,778 $ 8,579,444 Amortization expense related to intangible assets was $611,666 and $611,667 for the three months ended March 31, 2017 and 2016, respectively. Annually, and more often as necessary, we will perform an evaluation of our intangible assets for indications of impairment. If indications exist, we will perform an evaluation of the fair value of the intangible assets and, if necessary, record an impairment charge. As of March 31, 2017, the Company reviewed the net balance of the intangible assets and determined no impairment was needed. |
Related Party Note Receivable
Related Party Note Receivable | 3 Months Ended |
Mar. 31, 2017 | |
Receivables [Abstract] | |
Related Party Note Receivable | NOTE 5. RELATED PARTY 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 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 pledged shares, which are subject to insider timing requirements and volume limitations under Rule 144 of the Securities Act and required periodic black-out periods, are being held in third-party escrow until full repayment of the Tronco loan. The Company holds 8,267,860 shares as collateral for the Tronco note as of March 31, 2017. In 2015, the Board of Directors agreed to extend the terms of the Tronco loan to interest only payments due on December 31, 2015 and 2016, with a balloon payment of all unpaid interest and principal due in full maturity on December 31, 2017. The related party note receivable is classified as long term in accordance with management’s estimate of realizability. The interest rate on the note is 4.0%. We earned interest of $81,831 and $77,569 in the three months ending March 31, 2017 and 2016, respectively. On March 28, 2017, the Company and Tronco finalized an agreement with a third party and pursuant to this agreement, the third party acquired all of the Ohio assets of Tronco for $550,000. As Tronco’s senior secured lender, we agreed to release our lien and security interest on these assets in accordance with the agreement. The Company agreed to a non-cash receipt of the $550,000 from Tronco by reducing our bonus accrual liabilities, which was earned by the Meiers in 2014 but not paid, and was recorded in other long-term liability. As a result of this agreement, we reduced both the other long-term liability and the Tronco related party note receivable as of March 31, 2017. On April 14, 2017, the Meiers pledged an additional 530,725 restricted stock units to the Company as additional collateral for the Tronco note. |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | NOTE 6. LONG-TERM DEBT Long-term debt is comprised of the following: March 31, 2017 December 31, 2016 Real estate loans $ 4,706,562 $ 7,264,036 Hard Rock Note, net of discount 7,865,601 7,846,497 Machinery loans 643,380 684,921 Transportation loans 382,478 398,929 13,598,021 16,194,383 Current portion of long-term debt (1,418,480 ) (2,905,682 ) Long-term debt, less current portion $ 12,179,541 $ 13,288,701 Real Estate Loans Our manufacturing facility is financed by a commercial bank loan requiring monthly payments of approximately $39,000, including principal and interest at 5.25%. A lump sum principal payment of approximately $4.2 million is due at the maturity date of this loan on August 15, 2018. On February 9, 2017, the Company sold real estate to Superior Auto Body (“SAB”), a related party, for the net proceeds of $2.5 million. The cash received from the sale was used to pay down the $2.5 million loan balance on the property. As part of the sale, the Company released 547,000 shares of the Meiers common stock from the collateral for the Tronco note (see Note 5 – Related Party Note Receivable). Hard Rock Note In 2014, the Company purchased all of the interests of Hard Rock Solutions, LLC (“Hard Rock”). Consideration consisted of $12.5 million paid in cash at closing and a $12.5 million seller’s note (the “Hard Rock Note”). The Hard Rock Note and subsequent amendments are secured by all of the patents, patents pending, other patent rights, and trademarks transferred to Hard Rock. 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 of $1,356,000 will be amortized to interest expense using the effective interest method, totaling approximately $19,000 for the quarter ended March 31, 2017. On August 10, 2016, certain of our subsidiaries entered into an amended and restated note with the seller in our acquisition of Hard Rock. As amended and restated, the Hard Rock Note accrues interest at 5.75% per annum and matures and is fully payable on January 15, 2020. Under the current terms of the Hard Rock Note, we are required to make the following payments: accrued interest only on each of January 15, March 15, May 15 and July 15, 2017; $500,000 in principal plus accrued interest on each of January 15, March 15, May 15 and July 15, 2018, and $1,000,000 in principal plus accrued interest on each of January 15, March 15, May 15 and July 15, 2019. The remaining balance of principal of $2,000,000 and accrued interest on the Hard Rock Note are due on January 15, 2020. During 2017, we have made the accrued interest payments related to the note on January 15, 2017 and March 15, 2017 of $129,808 and $74,356, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 7. 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: Del Rio Suit 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. On May 11, 2017, pursuant to a mediation proceeding, all of the plaintiffs and defendants to the Suit executed a Settlement Agreement whereby each of the parties have released all of their claims against the other parties to the Suit without liability effective as of March 22, 2017. Such release includes the Company’s two subsidiaries that were a party to the Suit, SDS and MPS, as well as Troy and Annette Meier personally and all of their family trusts named as defendants in the Suit. As a result of the execution of the Settlement Agreement, a Stipulated Motion for Dismissal with Prejudice has been filed with the Court which includes a form of Order of Dismissal with Prejudice (the “Court Order”). It is expected the Court Order will be executed by the judge at which time the Suit will be formally dismissed with prejudice. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 8. RELATED PARTY TRANSACTIONS In 2014, the Company issued notes payable to related parties in the amount of $2 million. The notes bear interest at 7.5% and were scheduled to mature on January 2, 2017. In January 2017, the Company made a $50,000 payment. Based on an informal agreement, the Company will continue to reduce the balance on the note in 2017 against the interest due to the Company on the Tronco related party note receivable (see Note 5 – Related Party Note Receivable) instead of repaying the note. |
Summary of Significant Accoun14
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Organization and Basis of Presentation | Organization and Nature of Operations Superior Drilling Products, Inc. (the “Company”, “SDPI”, “we”, “our” or “us”) is a drilling and completion tool technology company providing solutions for the oil and natural gas drilling industry. The Company, designs, engineers, manufactures, sells, and repairs drilling and completion tools. Our subsidiaries include (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 Design and Fabrication, LLC, a Utah limited liability company (“SDF”), (b) Extreme Technologies, LLC, a Utah limited liability company (“ET”), (c) Meier Properties Series, LLC, a Utah limited liability company (“MPS”), (d) Meier Leasing, LLC, a Utah limited liability company (“ML”), and (e) HR. |
Basis of Presentation | Basis of Presentation The Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The consolidated financial statements include the accounts of Superior Drilling Products Inc. and all of its wholly-owned subsidiaries. All significant intercompany accounts have been eliminated in consolidation. The Company does not have investments in any unconsolidated subsidiaries. |
Revenue Recognition | Revenue Recognition We are a drilling and completion tool technology company and we generate revenue from the refurbishment, manufacturing, repair, and sale of drilling and completion tools. Our manufactured products are produced in a standard manufacturing operation, even when produced to our customer’s specifications. We earn royalty commission revenue when our customer invoices their customer for the use of our tools. The Company may act as an agent by billing and collecting its customers’ tool rental revenue. When we are an agent for our customer, revenue is presented in the statement of operations on a net basis. At March 31, 2017, there was approximately $382,000 of accounts receivable and approximately $488,000 of accounts payable related to transactions we performed as an agent for our customer. |
Unaudited Interim Financial Presentation | Unaudited Interim Financial Presentation These interim consolidated condensed financial statements for the three months ended March 31, 2017 and 2016, 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 months ended March 31, 2017 are not necessarily indicative of the results of operations expected for the year ended December 31, 2017. 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, 2016 and 2015 and the notes thereto, which were included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016, filed with the Securities and Exchange Commission (the “SEC”). |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes. Actual results could differ from those estimates. Significant items subject to estimates and assumptions include the carrying amount and useful lives of property and equipment and intangible assets, impairment assessments, share-based compensation expense, and valuation allowances for accounts receivable, inventories, and deferred tax assets. |
Accounting Standards | Accounting Standards In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers Revenue from Contracts with Customers , In February 2016, the FASB issued ASU No. 2016-02, “ Leases |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories is comprised of the following: March 31, 2017 December 31, 2016 Raw material $ 996,290 $ 952,419 Work in progress 189,546 90,017 Finished goods 165,819 125,256 $ 1,351,655 $ 1,167,692- |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedule Property, Plant and Equipment | Property, plant and equipment are comprised of the following: March 31, 2017 December 31, 2016 Land $ 880,416 $ 880,416 Buildings 4,847,778 4,847,778 Leasehold improvements 717,232 717,232 Machinery and equipment 5,192,864 5,060,281 Machinery under capital lease 2,322,340 2,322,340 Furniture and fixtures 507,554 507,554 Transportation assets 882,163 882,163 15,350,347 15,217,764 Accumulated depreciation (6,474,746 ) (6,149,405 ) $ 8,875,601 $ 9,068,359 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule Intangible Assets | Intangible assets are comprised of the following: March 31, 2017 December 31, 2016 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 (6,932,222 ) (6,320,556 ) $ 7,967,778 $ 8,579,444 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | Long-term debt is comprised of the following: March 31, 2017 December 31, 2016 Real estate loans $ 4,706,562 $ 7,264,036 Hard Rock Note, net of discount 7,865,601 7,846,497 Machinery loans 643,380 684,921 Transportation loans 382,478 398,929 13,598,021 16,194,383 Current portion of long-term debt (1,418,480 ) (2,905,682 ) Long-term debt, less current portion $ 12,179,541 $ 13,288,701 |
Summary of Significant Accoun19
Summary of Significant Accounting Policies (Details Narrative) | Mar. 31, 2017USD ($) |
Accounting Policies [Abstract] | |
Accounts receivable | $ 382,000 |
Accounts payable | $ 488,000 |
Inventories - Schedule of Inven
Inventories - Schedule of Inventories (Details) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Inventory Disclosure [Abstract] | ||
Raw material | $ 996,290 | $ 952,419 |
Work in progress | 189,546 | 90,017 |
Finished goods | 165,819 | 125,256 |
Inventory, Net | $ 1,351,655 | $ 1,167,692 |
Property, Plant and Equipment21
Property, Plant and Equipment (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense related to PP&E | $ 326,356 | $ 622,757 |
Property, Plant and Equipment -
Property, Plant and Equipment - Schedule Property, Plant and Equipment (Details) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Property, Plant and Equipment [Abstract] | ||
Land | $ 880,416 | $ 880,416 |
Buildings | 4,847,778 | 4,847,778 |
Leasehold improvements | 717,232 | 717,232 |
Machinery and equipment | 5,192,864 | 5,060,281 |
Machinery under capital lease | 2,322,340 | 2,322,340 |
Furniture and fixtures | 507,554 | 507,554 |
Transportation assets | 882,163 | 882,163 |
Property, Plant and Equipment, Gross | 15,350,347 | 15,217,764 |
Accumulated depreciation | (6,474,746) | (6,149,405) |
Property, Plant and Equipment, Net | $ 8,875,601 | $ 9,068,359 |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization of intangible assets | $ 611,666 | $ 611,667 |
Impairment of intangible assets |
Intangible Assets - Schedule In
Intangible Assets - Schedule Intangible Assets (Details) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Finite-Lived Intangible Assets [Line Items] | ||
Intangible Assets, Gross | $ 14,900,000 | $ 14,900,000 |
Accumulated amortization | (6,932,222) | (6,320,556) |
Finite-Lived Intangible Assets, Net | 7,967,778 | 8,579,444 |
Developed Technology [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 |
Note Receivable (Details Narrat
Note Receivable (Details Narrative) - USD ($) | Mar. 28, 2017 | Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2014 | Dec. 31, 2016 | May 30, 2014 |
Notes Receivable | $ 7,746,717 | $ 8,296,717 | ||||
Number of collateral shares | 8,267,860 | |||||
Maturity date | Jan. 2, 2017 | |||||
Debt interest rate | 7.50% | |||||
Tronco Energy Corporation [Member] | ||||||
Notes Receivable | $ 8,300,000 | |||||
Maturity date | Dec. 31, 2017 | |||||
Debt interest rate | 4.00% | |||||
Interest income | $ 81,831 | $ 77,569 | ||||
Assets acquired | $ 550,000 | |||||
Non cash receipt of accrual liabilities | $ 550,000 | |||||
Tronco Energy Corporation [Member] | April 14, 2017 [Member] | ||||||
Number of restricted stock | 530,725 |
Long-Term Debt (Details Narrati
Long-Term Debt (Details Narrative) - USD ($) | Feb. 09, 2017 | Aug. 10, 2016 | Dec. 31, 2014 | Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2014 | Mar. 15, 2017 | Jan. 15, 2017 |
Debt instrument, interest rate | 7.50% | 7.50% | |||||||
Debt instrument, maturity date | Jan. 2, 2017 | ||||||||
Proceeds from related party | $ 2,000,000 | ||||||||
Amortization of Debt Discount | $ 20,452 | $ 34,884 | |||||||
Debt instrument, face amount | 2,000,000 | ||||||||
Accrued interest | $ 74,356 | $ 129,808 | |||||||
Real Estate Loans [Member] | |||||||||
Debt instrument, periodic payment | $ 39,000 | ||||||||
Debt instrument, interest rate | 5.25% | ||||||||
Debt instrument, periodic payment, principal | $ 4,200,000 | ||||||||
Debt instrument, maturity date | Aug. 15, 2018 | ||||||||
Real Estate Loans [Member] | Superior Auto Body [Member] | |||||||||
Proceeds from related party | $ 2,500,000 | ||||||||
Long term loan | $ 2,500,000 | ||||||||
Number of shares collateral | 547,000 | ||||||||
Hard Rock Note [Member] | |||||||||
Debt instrument, interest rate | 5.75% | ||||||||
Debt instrument, maturity date | Jan. 15, 2020 | ||||||||
Business Combination, Consideration Transferred, Liabilities Incurred | $ 12,500,000 | ||||||||
Payments to Acquire Businesses, Gross | 12,500,000 | ||||||||
Debt Instrument, Fair Value Disclosure | 11,144,000 | $ 11,144,000 | |||||||
Amortization of Debt Discount | $ 1,356,000 | $ 19,000 | |||||||
Line of credit outstanding | $ 2,000,000 | ||||||||
Hard Rock Note [Member] | January 15, 2018 [Member] | |||||||||
Debt instrument, periodic payment, interest | 500,000 | ||||||||
Hard Rock Note [Member] | March 15, 2018 [Member] | |||||||||
Debt instrument, periodic payment, interest | 500,000 | ||||||||
Hard Rock Note [Member] | May 15, 2018 [Member] | |||||||||
Debt instrument, periodic payment, interest | 500,000 | ||||||||
Hard Rock Note [Member] | July 15, 2018 [Member] | |||||||||
Debt instrument, periodic payment, interest | 500,000 | ||||||||
Hard Rock Note [Member] | January 15, 2019 [Member] | |||||||||
Debt instrument, periodic payment, interest | 1,000,000 | ||||||||
Hard Rock Note [Member] | March 15, 2019 [Member] | |||||||||
Debt instrument, periodic payment, interest | 1,000,000 | ||||||||
Hard Rock Note [Member] | May 15, 2019 [Member] | |||||||||
Debt instrument, periodic payment, interest | 1,000,000 | ||||||||
Hard Rock Note [Member] | July 15, 2019 [Member] | |||||||||
Debt instrument, periodic payment, interest | $ 1,000,000 |
Long-Term Debt - Schedule of Lo
Long-Term Debt - Schedule of Long-term Debt Instruments (Details) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Long term debt, Total | $ 13,598,021 | $ 16,194,383 |
Current portion of long-term debt | (1,418,480) | (2,905,682) |
Long term portion of long-term debt | 12,179,541 | 13,288,701 |
Hard Rock Note [Member] | ||
Long term debt, Total | 7,865,601 | 7,846,497 |
Real Estate Loans [Member] | ||
Long term debt, Total | 4,706,562 | 7,264,036 |
Machinery Loans [Member] | ||
Long term debt, Total | 643,380 | 684,921 |
Transportation Loans [Member] | ||
Long term debt, Total | $ 382,478 | $ 398,929 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |
Jan. 31, 2017 | Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2014 | |
Related Party Transactions [Abstract] | ||||
Proceeds from note payable related party | $ 2,000,000 | |||
Debt interest rate | 7.50% | |||
Debt maturity date | Jan. 2, 2017 | |||
Payment of related party | $ 50,000 | $ 49,716 | $ 44,661 |