Superior Drilling Products (SDPI) 10-Q 11 May 18 2018 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2018	May 11, 2018
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, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		24,535,155
Trading Symbol	SDPI
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2,018

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (Unaudited) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Current assets
Cash	$ 2,175,342	$ 2,375,179
Accounts receivable, net	3,223,046	2,667,042
Prepaid expenses	80,934	111,530
Inventories	1,162,462	1,196,813
Other current assets	86,287
Total current assets	6,728,071	6,350,564
Property, plant and equipment, net	8,578,802	8,809,348
Intangible assets, net	5,521,111	6,132,778
Related party note receivable	7,367,212	7,367,212
Other noncurrent assets	15,254	15,954
Total assets	28,210,450	28,675,856
Current liabilities
Accounts payable	1,086,383	1,021,469
Accrued expenses	416,731	543,758
Current portion of long-term debt, net of discounts	7,552,460	6,101,678
Total current liabilities	9,055,574	7,666,905
Long-term debt, less current portion, net of discounts	4,646,749	6,706,375
Total liabilities	13,702,323	14,373,280
Commitments and contingencies (Note 8)
Shareholders' equity
Common stock - $0.001 par value; 100,000,000 shares authorized; 24,535,155 shares issued and outstanding	24,535	24,535
Additional paid-in-capital	39,044,881	38,907,864
Accumulated deficit	(24,561,289)	(24,629,823)
Total shareholders' equity	14,508,127	14,302,576
Total liabilities and shareholders' equity	$ 28,210,450	$ 28,675,856

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Mar. 31, 2018	Dec. 31, 2017
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	24,535,155	24,535,155
Common stock, shares, outstanding	24,535,155	24,535,155

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Income Statement [Abstract]
Revenue	$ 4,600,293	$ 3,369,612
Operating costs and expenses
Cost of revenue	1,798,944	1,180,733
Selling, general and administrative expenses	1,697,663	1,497,517
Depreciation and amortization expense	936,027	938,022
Total operating costs and expenses	4,432,634	3,616,272
Operating income (loss)	167,659	(246,660)
Other income (expense)
Interest income	92,428	81,859
Interest expense	(191,553)	(259,025)
Other income		43,669
Loss on sale of assets		(5,828)
Total other expense	(99,125)	(139,325)
Net income (loss)	$ 68,534	$ (385,985)
Basic income (loss) earnings per common share	$ 0	$ (0.02)
Basic weighted average common shares outstanding	24,535,155	24,196,299
Diluted income (loss) per common share	$ 0	$ (0.02)
Diluted weighted average common shares outstanding	25,140,646	24,196,299

Condensed Consolidated Stateme5

Condensed Consolidated Statements Of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Cash Flows From Operating Activities
Net income (loss)	$ 68,534	$ (385,985)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization expense	936,027	938,022
Amortization of debt discount	17,061	20,452
Share based compensation expense	137,017	175,380
Impairment of inventories	41,396
Gain on sale of assets		5,828
Changes in operating assets and liabilities:
Accounts receivable	(556,004)	(1,617,149)
Inventories	(6,079)	(183,963)
Prepaid expenses and other noncurrent assets	(54,991)	(53,229)
Accounts payable and accrued expenses	(62,113)	282,329
Other long-term liabilities		(17,490)
Net Cash Provided by (Used in) Operating Activities	520,848	(835,805)
Cash Flows From Investing Activities
Purchases of property, plant and equipment	(94,780)	(132,583)
Proceeds from sale of fixed assets		2,483,158
Net Cash Provided by (Used in) Investing Activities	(94,780)	2,350,575
Cash Flows From Financing Activities
Principal payments on debt	(625,905)	(2,616,815)
Principal payments on related party debt		(49,716)
Principal payments on capital lease obligations		(60,297)
Net Cash Used in Financing Activities	(625,905)	(2,726,828)
Net decrease in Cash	(199,837)	(1,212,058)
Cash at Beginning of Period	2,375,179	2,241,902
Cash at End of Period	2,175,342	1,029,844
Supplemental information:
Cash paid for Interest	210,065	295,910
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, 2018
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) Hard Rock Solutions, LLC (“HR” or “Hard Rock”). 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. In April 2012, the JOBS Act was enacted. Section 107 of the JOBS Act provides that an emerging growth company can utilize the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for implementing new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to nonissuers. We have elected to delay such adoption of new or revised accounting standards, and as a result, we may not implement new or revised accounting standards on the relevant dates on which adoption of such standards is required for other issuer companies. Subject to certain conditions set forth in the JOBS Act, as an emerging growth company, we intend to rely on certain of these exemptions, including without limitation, providing an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404 and implementing any requirement that may be adopted regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (auditor discussion and analysis). We will remain an emerging growth company until the earliest of (i) the end of the fiscal year in which the market value of our common stock that is held by exceeds $700.0 million as of June 30, (ii) the end of the fiscal year in which we have total annual gross revenues of $1.07 billion or more during such fiscal year, (iii) the date on which we issue more than $1.0 billion in debt in a three-year period or (iv) January 1, 2020. Revenue Recognition We are a drilling and completion tool technology company and we generate revenue from the 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 also earn royalty fees under certain arrangements for the tools we sell. In May 2016, the Company entered into an agreement with DTI to be our exclusive distributor of the Drill-N-Ream tool in the United States and Canada. Unaudited Interim Financial Presentation These interim consolidated condensed financial statements for the three months ended March 31, 2018 and 2017, 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, 2018 are not necessarily indicative of the results of operations expected for the year ended December 31, 2018. 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, 2017 and 2016 and the notes thereto, which were included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, 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. Recently Issued Accounting Standards In May 2014, the Financial Accounting Standards Board (the “FASB”) issued an accounting standards update for “Revenue from Contracts with Customers,” which supersedes the revenue recognition requirements in “Topic 605, Revenue Recognition.” This accounting standard update provides new guidance concerning recognition and measurement of revenue and requires additional disclosures about the nature, timing and uncertainty of revenue and cash flows arising from contracts with customers. This new guidance permits adoption through the use of either a full retrospective approach or a modified retrospective approach for annual reporting periods beginning on or after December 15, 2016, with early adoption not permitted. In August 2015, FASB delayed the effective date one year, and is effective for the Company’s fiscal year beginning January 1, 2019. The Company is currently evaluating the impact the pronouncement will have on the consolidated financial statements and related disclosure and will adopt this standard on January 1, 2019. In February 2016, the FASB issued ASU No. 2016-02, “ Leases

Liquidity

Liquidity	3 Months Ended
	Mar. 31, 2018
Liquidity
Liquidity	NOTE 2. LIQUIDITY At March 31, 2018, we had a working capital deficit of approximately $2,300,000. The Company’s manufacturing facility is financed by a commercial bank loan with principal of $4,200,000 due August 15, 2018 (see Note 7 – Long-Term Debt). The classification of this debt from long-term to short-term resulted in a working capital deficit at March 31, 2018. The Company is working with its lender and others to refinance or restructure its commercial bank loan in the first half of 2018. Our principal uses of cash are operating expenses, working capital requirements, capital expenditures and debt service payments. Our operational and financial strategies include managing our operating costs, working capital and debt to enhance liquidity. We will continue to work to grow revenue and review additional cost containment measures and expect to be cash flow positive in 2018. If we are unable to manage our working capital requirements and successfully refinance our commercial bank loan that is collateralized by our property, we may not be able to, among other things, (i) maintain our current general and administrative spending levels; (ii) fund certain obligations as they become due; and (iii) respond to competitive pressures or unanticipated capital requirements. We cannot provide any assurance that financing will be available to us in the future on acceptable terms.

Inventories

Inventories	3 Months Ended
	Mar. 31, 2018
Inventory Disclosure [Abstract]
Inventories	NOTE 3. INVENTORIES Inventories are comprised of the following: March 31, 2018 December 31, 2017 Raw material $ 973,923 $ 1,040,795 Work in progress 135,487 77,702 Finished goods 53,052 78,316 $ 1,162,462 $ 1,196,813 The Company recorded an impairment loss in the cost of sales of $41,396 during the three month period ended March 31, 2018 relating to steel inventory unrelated to the Company’s primary operations. On May 4, 2018, the Company sold this unrelated inventory to a third party wholesaler for approximately $248,000.

Property, Plant and Equipment

Property, Plant and Equipment	3 Months Ended
	Mar. 31, 2018
Property, Plant and Equipment [Abstract]
Property, Plant and Equipment	NOTE 4. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment are comprised of the following: March 31, 2018 December 31, 2017 Land $ 880,416 $ 880,416 Buildings 4,847,778 4,847,778 Building improvements 719,619 717,232 Machinery and equipment 8,258,789 8,216,237 Furniture and fixtures 510,181 507,557 Transportation assets 811,378 811,378 16,028,161 15,980,598 Accumulated depreciation (7,449,359 ) (7,171,250 ) $ 8,578,802 $ 8,809,348 Depreciation expense related to property, plant and equipment for the three months ended March 31, 2018 and 2017 was $324,360 and $326,356, respectively.

Intangible Assets

Intangible Assets	3 Months Ended
	Mar. 31, 2018
Goodwill and Intangible Assets Disclosure [Abstract]
Intangible Assets	NOTE 5. INTANGIBLE ASSETS Intangible assets are comprised of the following: March 31, 2018 December 31, 2017 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 (9,378,889 ) (8,767,222 ) $ 5,521,111 $ 6,132,778 Amortization expense related to intangible assets was $611,667 and $611,666 for the three months ended March 31, 2018 and 2017, 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, 2018, 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, 2018
Receivables [Abstract]
Related Party Note Receivable	NOTE 6. 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, which included 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. The interest rate on the note is 4.75%. We earned interest of $86,287 and $81,831 in the three months ending March 31, 2018 and 2017, respectively, and these amounts are included in other current assets in the consolidated balance sheets On August 8, 2017, the Board of Directors agreed to extend the terms of the Tronco loan to interest only payments due December 31, 2017, 2018, 2019, 2020, and 2021, with a balloon payment of all unpaid interest and principal due upon full maturity on December 31, 2022. 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 balance of which is $7,367,212. The Company holds 8,267,860 shares and 530,725 restricted stock units as collateral for the Tronco note as of March 31, 2018. On April 27, 2018, the Company released the 530,725 restricted stock units as collateral for the Tronco note. The Company believes the market value of the 8,267,860 shares is sufficient collateral for the note.

Long-Term Debt

Long-Term Debt	3 Months Ended
	Mar. 31, 2018
Debt Disclosure [Abstract]
Long-Term Debt	NOTE 7. LONG-TERM DEBT Long-term debt is comprised of the following: March 31, 2018 December 31, 2017 Real estate loans $ 4,454,030 $ 4,518,424 Hard Rock Note, net of discount 6,939,420 7,422,912 Machinery loans 466,932 513,317 Transportation loans 338,827 353,400 12,199,209 12,808,053 Current portion of long-term debt (7,552,460 ) (6,101,678 ) Long-term debt, less current portion $ 4,646,749 $ 6,706,375 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. 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 $17,061 and $20,452 for the three months ended March 31, 2018 and 2017, respectively. 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 on January 15, 2020. The following remaining payments are required under the current terms of the Hard Rock Note: in 2018, $500,000 in principal plus accrued interest on each of May 15 and July 15, 2018 and in 2019, $1,000,000 in principal plus accrued interest on each of January 15, March 15, May 15 and July 15, 2019. The remaining $2,000,000 balance of principal plus accrued interest on the Hard Rock Note are due on January 15, 2020.

Commitments and Contingencies

Commitments and Contingencies	3 Months Ended
	Mar. 31, 2018
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	NOTE 8. 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.

Subsequent Events

Subsequent Events	3 Months Ended
	Mar. 31, 2018
Subsequent Events [Abstract]
Subsequent Events	NOTE 9. SUBSEQUENT EVENTS On May 7, 2018, the Company sold inventory at book value to a third party wholesaler.

Summary of Significant Accoun15

Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2018
Accounting Policies [Abstract]
Organization and Nature of Operations	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) Hard Rock Solutions, LLC (“HR” or “Hard Rock”).
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. In April 2012, the JOBS Act was enacted. Section 107 of the JOBS Act provides that an emerging growth company can utilize the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for implementing new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to nonissuers. We have elected to delay such adoption of new or revised accounting standards, and as a result, we may not implement new or revised accounting standards on the relevant dates on which adoption of such standards is required for other issuer companies. Subject to certain conditions set forth in the JOBS Act, as an emerging growth company, we intend to rely on certain of these exemptions, including without limitation, providing an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404 and implementing any requirement that may be adopted regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (auditor discussion and analysis). We will remain an emerging growth company until the earliest of (i) the end of the fiscal year in which the market value of our common stock that is held by exceeds $700.0 million as of June 30, (ii) the end of the fiscal year in which we have total annual gross revenues of $1.07 billion or more during such fiscal year, (iii) the date on which we issue more than $1.0 billion in debt in a three-year period or (iv) January 1, 2020.
Revenue Recognition	Revenue Recognition We are a drilling and completion tool technology company and we generate revenue from the 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 also earn royalty fees under certain arrangements for the tools we sell. In May 2016, the Company entered into an agreement with DTI to be our exclusive distributor of the Drill-N-Ream tool in the United States and Canada.
Unaudited Interim Financial Presentation	Unaudited Interim Financial Presentation These interim consolidated condensed financial statements for the three months ended March 31, 2018 and 2017, 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, 2018 are not necessarily indicative of the results of operations expected for the year ended December 31, 2018. 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, 2017 and 2016 and the notes thereto, which were included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, 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.
Recently Issued Accounting Standards	Recently Issued Accounting Standards In May 2014, the Financial Accounting Standards Board (the “FASB”) issued an accounting standards update for “Revenue from Contracts with Customers,” which supersedes the revenue recognition requirements in “Topic 605, Revenue Recognition.” This accounting standard update provides new guidance concerning recognition and measurement of revenue and requires additional disclosures about the nature, timing and uncertainty of revenue and cash flows arising from contracts with customers. This new guidance permits adoption through the use of either a full retrospective approach or a modified retrospective approach for annual reporting periods beginning on or after December 15, 2016, with early adoption not permitted. In August 2015, FASB delayed the effective date one year, and is effective for the Company’s fiscal year beginning January 1, 2019. The Company is currently evaluating the impact the pronouncement will have on the consolidated financial statements and related disclosure and will adopt this standard on January 1, 2019. In February 2016, the FASB issued ASU No. 2016-02, “ Leases

Inventories (Tables)

Inventories (Tables)	3 Months Ended
	Mar. 31, 2018
Inventory Disclosure [Abstract]
Schedule of Inventories	Inventories are comprised of the following: March 31, 2018 December 31, 2017 Raw material $ 973,923 $ 1,040,795 Work in progress 135,487 77,702 Finished goods 53,052 78,316 $ 1,162,462 $ 1,196,813

Property, Plant and Equipment (

Property, Plant and Equipment (Tables)	3 Months Ended
	Mar. 31, 2018
Property, Plant and Equipment [Abstract]
Schedule of Property, Plant and Equipment	Property, plant and equipment are comprised of the following: March 31, 2018 December 31, 2017 Land $ 880,416 $ 880,416 Buildings 4,847,778 4,847,778 Building improvements 719,619 717,232 Machinery and equipment 8,258,789 8,216,237 Furniture and fixtures 510,181 507,557 Transportation assets 811,378 811,378 16,028,161 15,980,598 Accumulated depreciation (7,449,359 ) (7,171,250 ) $ 8,578,802 $ 8,809,348

Intangible Assets (Tables)

Intangible Assets (Tables)	3 Months Ended
	Mar. 31, 2018
Goodwill and Intangible Assets Disclosure [Abstract]
Schedule of Intangible Assets	Intangible assets are comprised of the following: March 31, 2018 December 31, 2017 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 (9,378,889 ) (8,767,222 ) $ 5,521,111 $ 6,132,778

Long-Term Debt (Tables)

Long-Term Debt (Tables)	3 Months Ended
	Mar. 31, 2018
Debt Disclosure [Abstract]
Schedule of Long-term Debt Instruments	Long-term debt is comprised of the following: March 31, 2018 December 31, 2017 Real estate loans $ 4,454,030 $ 4,518,424 Hard Rock Note, net of discount 6,939,420 7,422,912 Machinery loans 466,932 513,317 Transportation loans 338,827 353,400 12,199,209 12,808,053 Current portion of long-term debt (7,552,460 ) (6,101,678 ) Long-term debt, less current portion $ 4,646,749 $ 6,706,375

Summary of Significant Accoun20

Summary of Significant Accounting Policies (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2018	Jun. 30, 2017
Annual gross revenues	$ 1,070,000,000
Non-convertible debt	$ 1,000,000,000
Debt term	3 years
Debt maturity date	Jan. 1, 2020
Maximum [Member] | Non-affiliates [Member]
Market value of common stock		$ 700,000,000

Liquidity (Details Narrative)

Liquidity (Details Narrative)	3 Months Ended
	Mar. 31, 2018USD ($)
Liquidity
Working capital deficit	$ 2,300,000
Commercial bank loan with principal amount	$ 4,200,000
Debt due date	August 15, 2018

Inventories (Details Narrative)

Inventories (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Impairment of inventories	$ 41,396
Third Party [Member] | May 4, 2018 [Member]
Proceeds from sale of unrelated inventory	$ 248,000

Inventories - Schedule of Inven

Inventories - Schedule of Inventories (Details) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Inventory Disclosure [Abstract]
Raw material	$ 973,923	$ 1,040,795
Work in progress	135,487	77,702
Finished goods	53,052	78,316
Inventory, Net	$ 1,162,462	$ 1,196,813

Property, Plant and Equipment24

Property, Plant and Equipment (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Property, Plant and Equipment [Abstract]
Depreciation expense related to property, plant and equipment	$ 324,360	$ 326,356

Property, Plant and Equipment -

Property, Plant and Equipment - Schedule of Property, Plant and Equipment (Details) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Property, Plant and Equipment [Abstract]
Land	$ 880,416	$ 880,416
Buildings	4,847,778	4,847,778
Building improvements	719,619	717,232
Machinery and equipment	8,258,789	8,216,237
Furniture and fixtures	510,181	507,557
Transportation assets	811,378	811,378
Property, plant and equipment, gross	16,028,161	15,980,598
Accumulated depreciation	(7,449,359)	(7,171,250)
Property, plant and equipment, net	$ 8,578,802	$ 8,809,348

Intangible Assets (Details Narr

Intangible Assets (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization of intangible assets	$ 611,667	$ 611,666
Impairment of intangible assets

Intangible Assets - Schedule of

Intangible Assets - Schedule of Intangible Assets (Details) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	$ 14,900,000	$ 14,900,000
Accumulated amortization	(9,378,889)	(8,767,222)
Finite-lived intangible assets, net	5,521,111	6,132,778
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

Related Party Note Receivable (

Related Party Note Receivable (Details Narrative) - USD ($)	Aug. 08, 2017	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017	May 30, 2014
Interest income		$ 86,287	$ 81,831
Debt instrument maturity date		Jan. 1, 2020
Maturity date description		August 15, 2018
Related party note receivable		$ 7,367,212		$ 7,367,212
Number of collateral shares		8,267,860
Restricted Stock [Member]
Number of collateral shares		530,725
Restricted Stock Units (RSUs) [Member] | April 27, 2018 [Member] | Tronco Note [Member]
Number of restricted stock units released as collateral		530,725
Tronco Energy Corporation [Member]
Notes receivable					$ 8,300,000
Debt interest rate		4.75%
Debt instrument maturity date	Dec. 31, 2022
Maturity date description	On August 8, 2017, the Board of Directors agreed to extend the terms of the Tronco loan to interest only payments due December 31, 2017, 2018, 2019, 2020, and 2021, with a balloon payment of all unpaid interest and principal due upon full maturity on December 31, 2022.

Long-Term Debt (Details Narrati

Long-Term Debt (Details Narrative) - USD ($)	Aug. 10, 2016	Jan. 31, 2018	Dec. 31, 2014	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017	Mar. 16, 2018	Jan. 15, 2018
Debt instrument, maturity date				Jan. 1, 2020
Amortization of debt discount				$ 17,061	$ 20,452
Debt instrument, face amount				4,200,000
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
Hard Rock Note [Member]
Debt instrument, interest rate	5.75%
Debt instrument, periodic payment, principal		$ 500,000				$ 500,000
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
Amortization of debt discount			$ 1,356,000
Line of credit outstanding				$ 17,061	$ 20,452
Debt instrument, face amount	$ 2,000,000
Accrued interest							$ 65,062	$ 70,890
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] | 2019 [Member]
Debt instrument, face amount	1,000,000
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
Hard Rock Note [Member] | May 7, 2018 [Member]
Debt instrument, periodic payment, principal				$ 500,000
Debt instrument, maturity date				May 15, 2018
Accrued interest				$ 57,342

Long-Term Debt - Schedule of Lo

Long-Term Debt - Schedule of Long-term Debt Instruments (Details) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Long term debt, Total	$ 12,199,209	$ 12,808,053
Current portion of long-term debt	(7,552,460)	(6,101,678)
Long-term debt, less current portion	4,646,749	6,706,375
Hard Rock Note [Member]
Long term debt, Total	6,939,420	7,422,912
Real Estate Loans [Member]
Long term debt, Total	4,454,030	4,518,424
Machinery Loans [Member]
Long term debt, Total	466,932	513,317
Transportation Loans [Member]
Long term debt, Total	$ 338,827	$ 353,400