Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Nov. 09, 2015 | |
Entity Registrant Name | Enservco Corporation | |
Entity Central Index Key | 319,458 | |
Trading Symbol | ensv | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Well-known Seasoned Issuer | No | |
Entity Common Stock, Shares Outstanding (in shares) | 38,115,462 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Current Assets | ||
Cash and cash equivalents | $ 747,500 | $ 954,058 |
Accounts receivable, net | 3,212,609 | 14,679,858 |
Prepaid expenses and other current assets | 1,287,107 | 1,540,667 |
Inventories | 324,578 | 390,081 |
Income tax receivable | 1,967,732 | 1,776,035 |
Deferred tax asset | 135,055 | 135,055 |
Total current assets | 7,674,581 | 19,475,754 |
Property and Equipment, net | 37,105,534 | 37,789,004 |
Goodwill | 301,087 | 301,087 |
Other Assets | 686,939 | 716,836 |
TOTAL ASSETS | 45,768,141 | 58,282,681 |
Current Liabilities | ||
Accounts payable and accrued liabilities | 2,665,704 | 5,472,163 |
Current portion of long-term debt | 321,737 | 340,520 |
Total current liabilities | 2,987,441 | 5,812,683 |
Long-Term Liabilities | ||
Senior revolving credit facility | 18,929,416 | 28,634,037 |
Long-term debt, less current portion | 618,189 | 801,968 |
Deferred income taxes, net | 4,623,748 | 4,992,681 |
Total long-term liabilities | 24,171,353 | 34,428,686 |
Total liabilities | $ 27,158,794 | $ 40,241,369 |
Commitments and Contingencies (Note 8) | ||
Stockholders’ Equity | ||
Preferred stock. $.005 par value, 10,000,000 shares authorized, no shares issued or outstanding | ||
Common stock. $.005 par value, 100,000,000 shares authorized, 38,214,758 and 37,159,815 shares issued, respectively; 103,600 shares of treasury stock; and 38,111,158 and 37,056,215 shares outstanding, respectively | $ 190,556 | $ 185,282 |
Additional paid-in-capital | 13,684,972 | 12,751,389 |
Accumulated earnings | 4,733,819 | 5,104,641 |
Total stockholders’ equity | 18,609,347 | 18,041,312 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ 45,768,141 | $ 58,282,681 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - $ / shares | Sep. 30, 2015 | Dec. 31, 2014 |
Preferred stock, par value (in dollars per share) | $ 0.05 | $ 0.05 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.005 | $ 0.005 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 38,214,758 | 37,159,815 |
Common stock, shares outstanding (in shares) | 38,111,158 | 37,056,215 |
Treasury stock (in shares) | 103,600 | 103,600 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Revenues | $ 5,308,854 | $ 5,748,754 | $ 30,150,900 | $ 38,285,655 |
Cost of Revenue | 5,355,942 | 6,319,040 | 22,184,102 | 29,287,402 |
Gross Profit (Loss) | (47,088) | (570,286) | 7,966,798 | 8,998,253 |
Operating Expenses | ||||
General and administrative expenses | 954,831 | 1,220,877 | 3,115,557 | 3,310,518 |
Patent litigation and defense costs | 53,844 | 63,386 | 493,058 | 179,807 |
Depreciation and amortization | 1,489,352 | 884,964 | 4,252,124 | 2,288,852 |
Total operating expenses | 2,498,027 | 2,169,227 | 7,860,739 | 5,779,177 |
Income (Loss) from Operations | (2,545,115) | (2,739,513) | 106,059 | 3,219,076 |
Other Income (Expense) | ||||
Interest expense | (360,434) | (225,062) | (860,865) | (720,489) |
Other income | 22,642 | 21,775 | 53,822 | 44,962 |
Total other expense | (337,792) | (203,287) | (807,043) | (675,527) |
Income (Loss) Before Tax Expense | (2,882,907) | (2,942,800) | (700,984) | 2,543,549 |
Income Tax Expense (Benefit) | 1,234,716 | 1,094,774 | 330,162 | (1,056,639) |
Net Income (Loss) | (1,648,191) | (1,848,026) | (370,822) | 1,486,910 |
Comprehensive Income (Loss) | $ (1,648,191) | $ (1,851,761) | $ (370,822) | $ 1,479,885 |
Earnings (Loss) per Common Share – Basic (in dollars per share) | $ (0.04) | $ (0.05) | $ (0.01) | $ 0.04 |
Earnings (Loss) per Common Share – Diluted (in dollars per share) | $ (0.04) | $ (0.05) | $ (0.01) | $ 0.04 |
Basic weighted average number of common shares outstanding (in shares) | 38,101,647 | 36,816,875 | 37,740,843 | 36,359,251 |
Add: Dilutive shares assuming exercise of options and warrants (in shares) | 1,404,213 | |||
Diluted weighted average number of common shares outstanding (in shares) | 38,101,647 | 36,816,875 | 37,740,843 | 37,763,464 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
OPERATING ACTIVITIES | ||||
Net income (loss) | $ (1,648,191) | $ (1,848,026) | $ (370,822) | $ 1,486,910 |
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: | ||||
Depreciation and amortization | $ 1,489,352 | 884,964 | 4,252,124 | 2,288,852 |
Loss (gain) on disposal of equipment | (507) | 1,071 | (9,744) | |
Deferred income taxes | $ (1,178,098) | (65,572) | (368,933) | 64,259 |
Stock-based compensation | 170,972 | 372,239 | 442,243 | 520,519 |
Amortization of debt issuance costs | 32,265 | 63,174 | 90,048 | 225,823 |
Bad debt expense | 8,205 | 41,807 | 21,050 | 91,807 |
Changes in operating assets and liabilities | ||||
Accounts receivable | 657,071 | 246,640 | 11,446,199 | 7,889,279 |
Inventories | (19,733) | 67,107 | 65,503 | (61,614) |
Prepaid expense and other current assets | (263,144) | 326,095 | 278,560 | (237,670) |
Income taxes receivable | (62,091) | (56,887) | (191,697) | (56,887) |
Other non-current assets | 14,849 | (381,758) | 14,849 | (395,759) |
Accounts payable and accrued liabilities | $ 958,066 | 1,372,675 | $ (2,806,459) | 729,921 |
Income taxes payable | (976,591) | (1,278,599) | ||
Net cash provided by operating activities | $ 159,523 | 45,360 | $ 12,873,736 | 11,257,097 |
INVESTING ACTIVITIES | ||||
Purchases of property and equipment | $ (429,623) | $ (6,155,517) | (3,574,725) | (12,760,006) |
Proceeds from sale of equipment | 5,000 | 50,000 | ||
Net cash used in investing activities | $ (429,623) | $ (6,155,517) | (3,569,725) | (12,710,006) |
FINANCING ACTIVITIES | ||||
Net line of credit borrowings (payments) | 376,522 | 13,763,001 | (9,704,621) | 13,763,001 |
Repayment on long-term debt | (34,703) | (11,324,687) | (202,562) | (12,481,676) |
Payment of debt issuance costs | $ (100,000) | $ (163,962) | (100,000) | (163,962) |
Proceeds from exercise of warrants | 77,100 | 187,804 | ||
Proceeds from exercise of stock options | $ 12,250 | $ 61,537 | 198,285 | $ 127,987 |
Excess tax benefits from exercise of options and warrants | 3,109 | 221,229 | ||
Net cash provided by (used in) financing activities | 257,178 | $ 2,335,889 | (9,510,569) | $ 1,433,154 |
Net Decrease in Cash and Cash Equivalents | (12,922) | (3,774,268) | (206,558) | (19,755) |
Cash and Cash Equivalents, Beginning of Period | 760,422 | 5,622,703 | 954,058 | 1,868,190 |
Cash and Cash Equivalents, End of Period | 747,500 | 1,848,435 | 747,500 | 1,848,435 |
Supplemental cash flow information: | ||||
Cash paid for interest | 219,192 | 126,711 | 841,252 | 478,531 |
Cash paid for taxes | $ 2,362 | 5,998 | 9,236 | 2,329,588 |
Supplemental Disclosure of Non-cash Investing and Financing Activities: | ||||
Cashless exercise of stock options and warrants | $ 364 | $ 2,751 | $ 7,532 |
Note 1 - Basis of Presentation
Note 1 - Basis of Presentation | 9 Months Ended |
Sep. 30, 2015 | |
Notes to Financial Statements | |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | Note 1 – Basis of Presentation The accompanying condensed consolidated financial statements have been derived from the accounting records of Enservco Corporation (formerly Aspen Exploration Corporation), Heat Waves Hot Oil Service LLC (“Heat Waves”), Dillco Fluid Service, Inc. (“Dillco”), HE Services LLC, and Real GC, LLC (collectively, the “Company”) as of September 30, 2015 and December 31, 2014 and the results of operations for the three and nine months ended September 30, 2015 and 2014. The below table provides an overview of the Company’s current ownership hierarchy: Name State of Formation Ownership Business Heat Waves Hot Oil Service LLC Colorado 100% by Enservco Oil and natural gas well services, including logistics and stimulation. Dillco Fluid Service, Inc. Kansas 100% by Enservco Oil and natural gas field fluid logistic services. HE Services LLC Nevada 100% by Heat Waves No active business operations. Owns construction equipment used by Heat Waves. Real GC, LLC Colorado 100% by Heat Waves No active business operations. Owns real property in Garden City, Kansas that is utilized by Heat Waves. The accompanying unaudited Condensed Consolidated Financial Statements of the Company have been prepared in accordance with accounting principles for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the disclosures required by generally accepted accounting principles in the United States for complete financial statements. In the opinion of management, all of the normal and recurring adjustments necessary to fairly present the interim financial information set forth herein have been included. The results of operations for interim periods are not necessarily indicative of the operating results of a full year or of future years. The accompanying unaudited Condensed Consolidated Financial Statements were prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and follow the same accounting policies and methods of their application as the most recent annual financial statements. These interim financial statements should be read in conjunction with the financial statements and related footnotes included in the Annual Report on Form 10-K of Enservco Corporation for the year ended December 31, 2014. All significant inter-company balances and transactions have been eliminated in the accompanying consolidated financial statements. The accompanying Condensed Consolidated Balance Sheet at December 31, 2014 has been derived from the audited financial statements at that date, but does not include all of the information and notes required by GAAP for complete financial statements. For further information, refer to the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. |
Note 2 - Summary of Significant
Note 2 - Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2015 | |
Notes to Financial Statements | |
Significant Accounting Policies [Text Block] | Note 2 - Summary of Significant Accounting Policies Cash and Cash Equivalents The Company considers all highly liquid instruments purchased with an original maturity of three months or less to be cash equivalents. The Company monitors its positions with, and the credit quality of, the financial institutions with which it invests. Accounts Receivable Accounts receivable are stated at the amounts billed to customers. The Company provides a reserve for doubtful accounts based on a review of outstanding receivables, historical collection information and existing economic conditions. The provision for uncollectible amounts is continually reviewed and adjusted to maintain the allowance at a level considered adequate to cover future losses. The allowance is management's best estimate of uncollectible amounts and is determined based on historical collection experience related to accounts receivable coupled with a review of the current status of existing receivables. The losses ultimately incurred could differ materially in the near term from the amounts estimated in determining the allowance. As of September 30, 2015 and December 31, 2014, the Company had an allowance for doubtful accounts of $84,400 and $100,000, respectively. For the three and nine months ended September 30, 2015, the Company recorded bad debt expense (net of recoveries) of $8,205 and $21,050, respectively. For the three and nine months ended September 30, 2014, the Company recorded bad debt expense (net of recoveries) of $41,807 and $91,807, respectively. Inventory Inventory consists primarily of propane, diesel fuel and chemicals used in the servicing of oil wells, and is carried at the lower of cost or market in accordance with the first in, first out method. The Company periodically reviews the value of items in inventory and provides write-downs or write-offs of inventory based on its assessment of market conditions. Write-downs and write-offs are charged to cost of goods sold. Long-Lived Assets The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recovered. The Company looks primarily to the undiscounted future cash flows in its assessment of whether or not long-lived assets have been impaired. No impairments were recorded during the three and nine month periods ended September 30, 2015 and 2014. Property and Equipment Property and equipment consists of (1) trucks, trailers and pickups; (2) trucks that are in various stages of fabrication; (3) real property which includes land and buildings used for office and shop facilities and wells used for the disposal of water; and (4) other equipment such as tools used for maintaining and repairing vehicles, office furniture and fixtures, and computer equipment. Property and equipment is stated at cost less accumulated depreciation. The Company charges repairs and maintenance against income when incurred and capitalizes renewals and betterments that extend the remaining useful life or expands the capacity or efficiency of the assets. Depreciation is recorded on a straight-line basis over estimated useful lives of 5 to 30 years. Leases The Company conducts a major part of its operations from leased facilities. Each of these leases is accounted for as an operating lease. Normally, the Company records rental expense on its operating leases over the lease term as it becomes payable. If rental payments are not made on a straight-line basis, in accordance with the terms of the agreement, the Company records a deferred rent expense and recognizes the rental expense on a straight-line basis throughout the lease term. The majority of the Company’s facility leases contain renewal clauses and expire through January 2021. In most cases, management expects that in the normal course of business, leases will be renewed or replaced by other leases. The Company is leasing a number of trucks and equipment in the normal course of business, which are recorded as operating leases. The Company records rental expense on its equipment operating leases over the lease term as it becomes payable; there are no rent escalation terms associated with these equipment leases. On a number of the equipment leases, purchase options exist allowing the Company to purchase the leased equipment at the end of the lease term, based on the market price of the equipment at the time of the lease termination and exercised purchase option. In October 2015, the Company exercised the purchase option on three frac heaters. There are no significant equipment leases outstanding as of November 12, 2015. The Company has also in the past entered into several capital leases in order to acquire trucks and equipment. Each of these leases allows the Company to retain title of the equipment leased through the lease agreements upon final payment of all principal and interest due. The Company records the assets and liabilities associated with these leases at the present value of the minimum lease payments per the lease agreement. The assets are classified as property and equipment and the liabilities are classified as current and long-term liabilities based on the contractual terms of the agreements and their associated maturities. There are no outstanding capital leases as of September 30, 2015. Revenue Recognition The Company recognizes revenue when evidence of an arrangement exists, the fee is fixed or determinable, services are provided, and collection is reasonably assured. Earnings Per Share Earnings per share is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted earnings per share is calculated by dividing net income by the diluted weighted average number of common shares. The diluted weighted average number of common shares is computed using the treasury stock method for common stock that may be issued for outstanding stock options. As of September 30, 2015 and 2014, there were outstanding stock options and warrants to acquire an aggregate of 3,635,169 and 3,891,063 shares of Company common stock , respectively, which have a potentially dilutive impact on earnings per share. For the nine months ended September 30, 2014, the incremental shares of the options and warrants to be included in the calculation of diluted earnings per share had a dilutive impact on the Company’s earnings per share of 1,404,213 shares. Dilution is not permitted if there are net losses during the period. As such, the Company does not show dilutive earnings per share for the three months ended September 30, 2015 and 2014 and the nine months ended September 30, 2015. Intangible Assets Goodwill Impairment. Loan Fees and Other Deferred Costs In the normal course of business, the Company enters into loan agreements and amendments thereto with its primary lending institutions. The majority of these lending agreements and amendments require origination fees and other fees in the course of executing the agreements. For all costs associated with the execution of the lending agreements, the Company recognizes these as capitalized costs and amortizes these costs over the term of the loan agreement using the effective interest method. These deferred costs are classified on the balance sheet as current or long-term assets based on the contractual terms of the loan agreements. All other costs not associated with the execution of the loan agreements are expensed as incurred. Income Taxes The Company recognizes deferred tax liabilities and assets based on the differences between the tax basis of assets and liabilities and their reported amounts in the financial statements that will result in taxable or deductible amounts in future years. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities will be recognized in income in the period that includes the enactment date. Deferred income taxes are classified as a net current or non-current asset or liability based on the classification of the related asset or liability for financial reporting purposes. A deferred tax asset or liability that is not related to an asset or liability for financial reporting is classified according to the expected reversal date. The Company records a valuation allowance to reduce deferred tax assets to an amount that it believes is more likely than not to be realized. The Company accounts for any uncertainty in income taxes by recognizing the tax benefit from an uncertain tax position only if, in the Company’s opinion, it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The Company measures the tax benefits recognized in the financial statements from such a position based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution. The application of income tax law is inherently complex. Laws and regulations in this area are voluminous and are often ambiguous. As such, the Company is required to make many subjective assumptions and judgments regarding income tax exposures. Interpretations of and guidance surrounding income tax law and regulations change over time and may result in changes to the Company’s subjective assumptions and judgments which can materially affect amounts recognized in the consolidated balance sheets and consolidated statements of income. The result of the reassessment of the Company’s tax positions did not have an impact on the consolidated financial statements. Interest and penalties associated with tax positions are recorded in the period assessed as general and administrative expenses. The Company files tax returns in the United States and in the states in which it conducts its business operations. The tax years 2011 through 2014 remain open to examination in the taxing jurisdictions to which the Company is subject. Fair Value The Company follows authoritative guidance that applies to all financial assets and liabilities required to be measured and reported on a fair value basis. The Company also applies the guidance to non-financial assets and liabilities measured at fair value on a nonrecurring basis, including non-competition agreements and goodwill. The guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. The guidance establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions of what market participants would use in pricing the asset or liability based on the best information available in the circumstances. The Company did not change its valuation techniques nor were there any transfers between hierarchy levels during the nine months ended September 30, 2015. The financial and nonfinancial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. The hierarchy is broken down into three levels based on the reliability of the inputs as follows: Level 1: Quoted prices are available in active markets for identical assets or liabilities; Level 2: Quoted prices in active markets for similar assets and liabilities that are observable for the asset or liability; or Level 3: Unobservable pricing inputs that are generally less observable from objective sources, such as discounted cash flow models or valuations. Stock-based Compensation Stock-based compensation cost is measured at the date of grant, based on the calculated fair value of the award as described below, and is recognized over the requisite service period, which is generally the vesting period of the equity grant. The Company uses the Black-Scholes pricing model as a method for determining the estimated grant date fair value for all stock options awarded to employees, independent contractors, officers, and directors. The expected term of the options is based upon evaluation of historical and expected further exercise behavior. The risk-free interest rate is based upon U.S. Treasury rates at the date of grant with maturity dates approximately equal to the expected life of the grant. Volatility is determined upon historical volatility of our stock and adjusted if future volatility is expected to vary from historical experience. The dividend yield is assumed to be none as we have not paid dividends nor do we anticipate paying any dividends in the foreseeable future. The Company also uses the Black-Scholes valuation model to determine the fair value of warrants. Expected volatility is based upon the weighted average of historical volatility over the contractual term of the warrant and implied volatility. The risk-free interest rate is based upon implied yield on a U.S. Treasury zero-coupon issue with a remaining term equal to the contractual term of the warrants. The dividend yield is assumed to be none. Management Estimates The preparation of the Company’s financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include the realization of accounts receivable, stock based compensation expense, income tax provision, and the valuation of deferred taxes. Actual results could differ from those estimates. Reclassifications Certain reclassifications have been made to the prior period financial statements to conform to the current period presentation. The Company reclassified $48,541 and $79,115 of site personnel costs from general and administrative expenses to cost of revenues on the consolidated statements of operations and comprehensive income (loss) for the three and nine months ended September 30, 2014, respectively, to conform to 2015 presentation. The Company reclassified $63,386 and $179,807 of patent defense costs from general and administrative expenses to patent litigation and defense costs on the consolidated statements of operations and comprehensive income (loss) for the three and nine months ended September 30, 2014, respectively, to conform to 2015 presentation. Accounting Pronouncements Recently Issued In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers , which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. In August 2015 the FASB agreed to defer the effective date by one year, the new standard becomes effective for us on January 1, 2018. Early adoption is permitted. The standard permits the use of either the retrospective or cumulative effect transition method. We are evaluating the effect that ASU 2014-09 will have on our consolidated financial statements and related disclosures. We have not yet selected a transition method nor have we determined the effect of the standard on our ongoing financial reporting. In January 2015, the FASB issued ASU 2015-01, “Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items.” ASU 2015-01 eliminates from U.S. GAAP the concept of an extraordinary item. The Board released the new guidance as part of its simplification initiative, which is intended to “identify, evaluate, and improve areas of U.S. GAAP for which cost and complexity can be reduced while maintaining or improving the usefulness of the information provided to users of financial statements.” The ASU is effective for annual periods beginning after December 15, 2015, and interim periods within those annual periods. The adoption of this guidance is not expected to impact the Company’s consolidated financial statements. In April 2015, the FASB issued ASU 2015-03, “Simplifying the Presentation of Debt Issuance Costs.” ASU 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The ASU is effective for annual periods beginning after December 15, 2015, and interim periods within those annual periods. The simplification of the presentation of debt issuance costs is expected to have an immaterial impact on the Company’s total assets and debt. In July 2015, The adoption of this guidance is not expected to impact the Company’s consolidated financial statements. In September 2015, FASB issued ASU 2015-16, “Simplifying the Accounting for Measurement-Period Adjustments,” to amend the guidance for amounts that are adjusted in a merger or acquisition. The standard eliminates the requirement for an acquirer to retrospectively adjust the financial statements for measurement period adjustments that occur in periods after a business combination is consummated. The ASU is effective for public business entities for annual periods, including interim periods within those annual periods, beginning after December 15, 2015. Early adoption is permitted. The Company is in the process of evaluating the impact of adoption on its consolidated financial statements. |
Note 3 - Property and Equipment
Note 3 - Property and Equipment | 9 Months Ended |
Sep. 30, 2015 | |
Notes to Financial Statements | |
Property, Plant and Equipment Disclosure [Text Block] | Note 3 - Property and Equipment Property and equipment consists of the following: September 30, December 31, 2015 2014 Trucks and vehicles $ 53,023,723 $ 48,020,268 Other equipment 3,154,538 3,135,916 Buildings and improvements 3,731,143 3,396,280 Trucks in process 417,509 2,366,758 Land 873,427 776,420 Disposal wells 391,003 367,330 Total property and equipment 61,591,343 58,062,972 Accumulated depreciation (24,485,809 ) (20,273,968 ) Property and equipment - net $ 37,105,534 $ 37,789,004 |
Note 4 - PNC Credit Facility
Note 4 - PNC Credit Facility | 9 Months Ended |
Sep. 30, 2015 | |
Notes to Financial Statements | |
Debt Disclosure [Text Block] | Note 4 – PNC Credit Facility 2014 PNC Credit Facility In September 2014, the Company entered into an Amended and Restated Revolving Credit and Security Agreement (the "2014 Credit Agreement") with PNC Bank, National Association ("PNC") which provides for a five-year $30 million senior secured revolving credit facility which replaced a prior revolving credit facility and term loan with PNC that totaled $16 million (the "2012 Credit Agreement"). The 2014 Credit Agreement allows the Company to borrow up to 85% of eligible receivables and 85% of the appraised value of trucks and equipment. The commitment amount may be increased to $40 million, subject to certain conditions and approvals set forth in the 2014 Credit Agreement. In December 2014, the Company exercised the option to increase the commitment amount to $40 million. Under the 2014 Credit Agreement, there are no required principal payments until maturity in September 2019 and the Company has the option to pay variable interest rate based on (i) 1, 2 or 3 month LIBOR plus an applicable margin ranging from 2.50% to 3.50% for LIBOR Rate Loans or (ii) interest at PNC Base Rate plus an applicable margin of 1.00% to 2.00% for Domestic Rate Loans. Interest is calculated monthly and added to the principal balance of the loan. Additionally, the Company incurs an unused credit line fee of 0.375%. The revolving credit facility is collateralized by substantially all of the Company’s assets and subject to financial covenants. The interest rate at September 30, 2015 was 2.69% for the $18,500,000 of outstanding LIBOR Rate Loans and 4.25% for the $429,416 of outstanding Domestic Rate Loans. Effective February 27, 2015, the Company entered into a Consent and First Amendment (the “First Amendment”) with respect to the 2014 Credit Agreement. The First Amendment, among other things, (i) modified certain financial covenants, and (ii) consented to a $100,000 principal prepayment by the Company to a third party bank that eliminated a monthly fee of $12,500 paid to the guarantor of that indebtedness. Effective March 29, 2015, the Company entered into a second amendment to the 2014 Credit Agreement with PNC to increase the Company’s leverage ratio, as defined from 2.75 to 1 to 3.50 to 1 and to exclude certain capital expenditures from the calculation of the fixed charge ratio. In July and October 2015, the Company entered into a third and fourth amendment, respectively, to the 2014 Credit Agreement with PNC. The amendments were made to administrative terms of the agreement and did not modify any terms of the financial covenants. As of September 30, 2015 and December 31, 2014, the Company had an outstanding loan balance of $18,929,416 and $28,634,037, respectively. The outstanding loan balance matures in September 2019. As of September 30, 2015, approximately $12.7 million was available under the revolving credit facility. Interest Rate Swap On September 17, 2015, the Company entered into an interest rate swap agreement with PNC which the Company designated as a fair value hedge against the variability in future interest payments related to its 2014 Credit Agreement. The terms of the interest rate swap agreement include a notional amount of $10 million, a fixed payment rate of 1.88% plus applicable a margin ranging from 2.50% to 3.50% paid by the Company and a floating payment rate equal to LIBOR plus applicable margin of 2.50% to 3.50% paid by PNC. The purpose of the swap agreement is to adjust the interest rate profile of the Company’s debt obligations and to achieve a targeted mix of floating and fixed rate debt. During the three and nine month periods ended September 30, 2015, the fair market value of the swap instrument decreased by $160,000 which was recorded as interest expense. |
Note 5 - Long-Term Debt
Note 5 - Long-Term Debt | 9 Months Ended |
Sep. 30, 2015 | |
Notes to Financial Statements | |
Long-term Debt [Text Block] | Note 5 – Long-Term Debt Long-term debt consists of the following: September 30, December 31, 2015 2014 Real Estate Loan for our facility in North Dakota, interest at 3.75%, monthly principal and interest payment of $5,255 ending October 3, 2028. Collateralized by land and property purchased with the loan. $ 546,653 $ 677,204 Note payable to the seller of Heat Waves. The note was garnished by the Internal Revenue Service (“IRS”) in 2009 and is due on demand; paid in monthly installments of $3,000 per agreement with the IRS. 215,000 242,000 Mortgage payable to a bank, interest at 5.9%, monthly principal and interest payments of $1,550 through January 2017 with a balloon payment of $88,118 on February 1, 2017; secured by land. 106,294 115,317 Mortgage payable to a bank; interest at 7.25%, due in monthly principal and interest payments of $4,555 through February 2017, secured by land. 71,979 107,967 Total 939,926 1,142,488 Less current portion (321,737 ) (340,520 ) Long-term debt, net of current portion $ 618,189 $ 801,968 Aggregate maturities of debt, excluding the 2014 Credit Agreement described in Note 4, are as follows: Twelve Months Ending September 30, 2016 $ 321,737 2017 159,178 2018 46,409 2019 48,205 2020 50,033 Thereafter 314,364 Total $ 939,926 |
Note 6 - Fair Value Measurement
Note 6 - Fair Value Measurements | 9 Months Ended |
Sep. 30, 2015 | |
Notes to Financial Statements | |
Fair Value Disclosures [Text Block] | Note 6 – Fair Value Measurements The following table presents the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis by level within the fair value hierarchy: Fair Value Measurement Using Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Fair Value Measurement September 30, 2015 Derivative Instrument Interest rate swap $ - $ 160,000 $ - $ 160,000 The interest rate swap as of September 30, 2015 consists of a liability of $160,000 (classified within Accounts payable and accrued liabilities The Company’s derivative instrument (e.g. interest rate swap, or “swap”) is valued using models which require a variety of inputs, including contractual terms, market prices, yield curves, credit spreads, and correlations of such inputs. Some of the model inputs used in valuing the derivative instruments trade in liquid markets therefore the derivative instrument is classified within Level 2 of the fair value hierarchy. For applicable financial assets carried at fair value, the credit standing of the counterparties is analyzed and factored into the fair value measurement of those assets. The fair value estimate of the swap does not reflect its actual trading value. |
Note 7 - Income Taxes
Note 7 - Income Taxes | 9 Months Ended |
Sep. 30, 2015 | |
Notes to Financial Statements | |
Income Tax Disclosure [Text Block] | Note 7 – Income Taxes Income tax expense during interim periods is based on applying an estimated annual effective income tax rate to year-to-date income, plus any significant unusual or infrequently occurring items which are recorded in the interim period. The provision for income taxes for the nine months ended September 30, 2015 and 2014 differs from the amount that would be provided by applying the statutory U.S. federal income tax rate of 34% to pre-tax income primarily because of state income taxes and estimated permanent differences. The computation of the annual estimated effective tax rate at each interim period requires certain estimates and significant judgment including, but not limited to, the expected operating income for the year, projections of the proportion of income earned and taxed in various jurisdictions, permanent and temporary differences, and the likelihood of recovering deferred tax assets generated in the current year. The accounting estimates used to compute the provision for income taxes may change as new events occur, more experience is obtained, additional information becomes known or as the tax environment changes. |
Note 8 - Commitments and Contin
Note 8 - Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2015 | |
Notes to Financial Statements | |
Commitments and Contingencies Disclosure [Text Block] | Note 8 – Commitments and Contingencies Operating Leases As of September 30, 2015, the Company leases facilities and certain trucks and equipment under lease commitments that expire through January 2021. Future minimum lease commitments for these operating lease commitments are as follows: Twelve Months Ending September 30, 2016 $ 500,307 2017 374,358 2018 186,750 2019 189,750 2020 168,000 Thereafter 32,000 Total $ 1,451,165 Equipment Purchase Commitments As of September 30, 2015, the Company did not have any outstanding purchase commitments related to the purchase of equipment and construction of building facilities. Self-Insurance In June 2015, the Company became self-insured under its Employee Group Medical Plan for the first $75,000 per individual participant. The Company has accrued a liability of approximately $85,000 as of September 30, 2015 for insurance claims that it anticipates paying in the future related to incidents that occurred during the period ended September 30, 2015. Litigation In October 2014, the Company was served with a complaint filed in the United States District Court for the Northern District of Texas, Dallas Division (Civil Action No. 3:14-cv-03631) by Heat-On-The-Fly, LLC (“HOTF”), naming Enservco Corporation (“Enservco”) and its subsidiary Heat Waves Hot Oil Service LLC (“Heat Waves”) as defendants. The complaint alleges that Enservco and Heat Waves, in offering and selling frac water heating services, infringed and induced others to infringe two patents owned by HOTF (U.S. Patent Nos. 8,171,993 (“the ‘993 Patent”) and 8,739,875 (“the ‘875 Patent”)). The complaint seeks various remedies including injunctive relief and unspecified damages and relates to only a portion of Heat Waves’ frac water heating services. In May 2015, the case was transferred to the U.S. District Court for the District of Colorado, Civil Action No. 1:15-cv-00983-RBJ (“Colorado Case”). Heat Waves has answered the complaint, denied HOTF’s allegations of infringement and asserted counterclaims asking the Court to find, among other things, that it does not infringe either patent and that both patents are invalid. HOTF has replied to and denied those counterclaims. In July 2015, the Company and HOTF jointly asked the Colorado Court to stay the case pending any appeal by HOTF of the partial summary judgment ruling invalidating the ‘993 Patent referenced below, and on July 20, 2015, the Court granted the parties’ joint request. The Colorado case is now stayed pending resolution of appeal by HOTF of the Court’s invalidity ruling and the pending ‘993 Patent reexamination proceeding, also referenced below. HOTF is currently involved in another litigation with a group of energy companies (which does not include Enservco or Heat Waves) that are seeking to, among other things, invalidate the ‘993 Patent (“North Dakota Case”). In March 2015, the North Dakota Court granted defendants’ partial summary judgment motion, finding that the ‘993 Patent was invalid. The Court later entered a judgment on this issue, which may be appealed by HOTF once it is made final. In September 2015, a jury trial was conducted. The jury found, among other things, that HOTF represented to a customer of one of the accused defendants that HOTF had a valid patent and this representation was made in bad faith. The jury also found that HOTF unlawfully interfered with a contract and prospective business relationship with that customer and as such, awarded the defendant $750,000 in damages. The jury’s verdict is also subject to possible appeal by HOTF. Lastly, the Court also held a bench trial on the energy companies’ claim that the ‘993 Patent is unenforceable due to inequitable conduct by the inventor of the ‘993 Patent before the U.S. Patent and Trademark Office (“USPTO”). The issue has been fully briefed and the Court has not yet ruled on this matter. Although the first 12 claims of the ‘993 Patent survived a prior reexamination, the USPTO granted a second request in July 2014 to reexamine the ‘993 Patent in its entirety (all 99 claims, including the prior 12 claims that survived the prior, limited reexamination) based on different reasoning. In February 2015, the USPTO issued initial findings in the second reexamination proceeding, rejecting all 99 claims of the ‘993 Patent as being unpatentable. In April 2015, HOTF filed a response with the USPTO seeking to overcome these pending rejections, but no subsequent decision has been made by the USPTO. The timing of a response from the USPTO and any decision resulting therefrom is uncertain and is subject to appeal by HOTF. Further, HOTF has at least two additional pending patent applications based on the ‘993 and ‘875 Patents, which, if granted, could be asserted against the Company. As the ‘993 Patent and the ‘875 Patent are based on the same subject matter, management believes that a final finding of invalidity of the ‘993 Patent could serve as a basis to affect the validity of the ‘875 Patent. If these Patents are ultimately held to be invalid, the Colorado Case would become moot. As noted above, the Colorado Case has been stayed. However, in the event that the ‘993 Patent is found to be valid in both the North Dakota Case and through the pending reexamination with the USPTO, the Colorado Case may resume. To the extent that Enservco and Heat Waves are unsuccessful in their defense of the Colorado Case, they could be liable for damages (which may be significant) and Heat Wave's could possibly be enjoined from using any technology that is determined to be infringing. Either result could negatively impact Heat Wave’s business and operations. At this time, the Company is unable to predict the outcome of this case, and accordingly has not recorded an accrual for any potential loss. |
Note 9 - Stockholders Equity
Note 9 - Stockholders Equity | 9 Months Ended |
Sep. 30, 2015 | |
Notes to Financial Statements | |
Stockholders' Equity Note Disclosure [Text Block] | Note 9 – Stockholders Equity Warrants In conjunction with a private placement and subordinated debt conversion by the Company’s former Chairman, Mr. Michael D. Herman, in November 2012, the Company granted a one-half share warrant for every full share of common stock acquired by the equity investors or converted by Mr. Herman. As such, the Company granted warrants to purchase 4,960,714 shares of the Company’s common stock, exercisable at $0.55 per share for a five year term. Each of the warrants may be exercised on a cashless basis. The warrants also provide that subject to various conditions, the holders have piggy-back registration rights with respect to the shares of common stock that may be acquired upon the exercise of the warrants. As of September 30, 2015, 37,501 of these warrants remain outstanding. In November 2012, the Company granted each of the principals of an existing investor relations firm warrants to acquire 112,500 shares of the Company’s common stock (a total of 225,000 shares) for the firm’s assistance in creating awareness for the Company’s private placement. The warrants are exercisable at $0.55 per share and expire 5 years from date of grant. As of September 30, 2015, 112,500 of these warrants remain outstanding. A summary of warrant activity for the nine months ended September 30, 2015 is as follows: Weighted Weighted Average Average Remaining Aggregate Exercise Contractual Intrinsic Warrants Shares Price Life (Years) Value Outstanding at December 31, 2014 250,001 $ 0.64 2.29 $ 242,901 Issued for Services - - Exercised (100,000 ) 0.77 Forfeited/Cancelled - Outstanding at September 30, 2015 150,001 $ 0.55 2.17 $ 19,500 Exercisable at September 30, 2015 150,001 $ 0.55 2.17 $ 19,500 During the nine months ended September 30, 2015, warrants to acquire 100,000 shares were exercised for cash payments totaling $77,100. The warrants exercised had a total intrinsic value of $102,000 at the time of exercise. No warrants were issued during the nine months ended September 30, 2015. During the nine months ended September 30, 2014, warrants to acquire 1,925,357 shares of common stock were exercised by way of cashless exercise whereby the warrant holders elected to receive 1,482,041 shares without payment of the exercise price and the remaining warrants for 443,316 shares were cancelled. In addition, warrants to acquire 341,462 shares were exercised for cash payments totaling $187,804. The warrants exercised had a total intrinsic value of $4,129,465 at the time of exercise. No warrants were issued during the nine months ended September 30, 2014. |
Note 10 - Stock Options
Note 10 - Stock Options | 9 Months Ended |
Sep. 30, 2015 | |
Notes to Financial Statements | |
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | Note 10 – Stock Options Stock Option Plans On July 27, 2010 the Company’s Board of Directors adopted the 2010 Stock Incentive Plan (the “2010 Plan”). The aggregate number of shares of common stock that may granted under the 2010 Plan is reset at the beginning of each year based on 15% of the number of shares of common stock then outstanding. As such, on January 1, 2015 the number of shares of common stock available under the 2010 Plan was reset to 5,558,432 shares based upon 37,056,215 shares outstanding on that date. Options are typically granted with an exercise price equal to the estimated fair value of the Company's common stock at the date of grant with a vesting schedule of one to three years and a contractual term of 5 years. As of September 30, 2015, there were options to purchase 3,485,168 shares outstanding under the 2010 Plan. A summary of the range of assumptions used to value stock options granted for the three and nine months ended September 30, 2015 and 2014 are as follows: For the Three Months Ended For the Nine Months Ended September 30, September 30, 2015 2014 2015 2014 Expected volatility - 116% 107 - 109% 116 - 124% Risk-free interest rate - 0.93% 0.75 - 0.86% 0.72 - 0.93% Dividend yield - - - - Expected term (in years) - 2.5 3.4 3.0 During the nine months ended September 30, 2015, the Company granted options to acquire 1,123,500 shares of common stock with a weighted-average grant-date fair value of $1.19 per share. During the nine months ended September 30, 2015, options to acquire 720,333 shares of common stock were exercised by way of a cashless exercise whereby the option holders elected to receive 550,276 shares of common stock without payment of the exercise price and the remaining options for 170,057 shares were cancelled. The options had an intrinsic value of $1,131,371 at the time of exercise. In addition, options to acquire 404,667 shares of common stock were exercised for cash payments of $198,285. The options had an intrinsic value of $423,837 at the time of exercise. During the nine months ended September 30, 2014, the Company granted options to acquire 432,500 shares of common stock with a weighted-average grant-date fair value of $1.67 per share. During the nine months ended September 30, 2014, options to acquire 28,333 shares of common stock were exercised by way of a cashless exercise whereby the option holder elected to receive 24,282 shares of common stock without payment of the exercise price and the remaining options for 4,051 shares were cancelled. The options had an intrinsic value of $75,837 at the time of exercise. In addition, options to acquire 244,999 shares of common stock were exercised for cash payments of $127,987. The options had an intrinsic value of $531,609 at the time of exercise. The following is a summary of stock option activity for all equity plans for the nine months ended September 30, 2015: Shares Weighted A verage Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Outstanding at December 31 , 2014 3,500,168 $ 0.90 2.02 $ 2,785,893 Granted 1,123,500 1.75 Exercised (1,125,000 ) 0.48 Forfeited or Expired (13,500 ) 2.06 Outstanding at September 30, 2015 3,485,168 $ 1.31 2.78 $ 173,433 Vested or Expected to Vest at September 30, 2015 3,485,168 $ 1.31 2.78 $ 173,433 Exercisable at September 30, 2015 2,151,499 $ 1.03 1.87 $ 173,433 The aggregate intrinsic value in the table above represents the total intrinsic value (the difference between the estimated fair value of the Company’s common stock on September 30, 2015, and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had they exercised their options on September 30, 2015. During the nine months ended September 30, 2015 and 2014, the Company recognized stock-based compensation costs for stock options of $442,243 and $520,519, respectively in general and administrative expenses. During the three months ended September 30, 2015 and 2014, the Company recognized stock-based compensation for stock options of $170,972 and $372,239, respectively. The Company currently expects all outstanding options to vest. Compensation cost is revised if subsequent information indicates that the actual number of options vested due to service is likely to differ from previous estimates. A summary of the status of non-vested shares underlying the options are presented below: Number of Shares Weighted-Average Grant-Date Fair Value Non-vested at December 31, 2014 498,504 $ 1.05 Granted 1,123,500 1.19 Vested (277,835 ) 0.80 Forfeited (10,500 ) 1.48 Non-vested at September 30, 2015 1,333,669 $ 1.22 As of September 30, 2015, there was $1,223,590 of total unrecognized compensation costs related to non-vested shares under the qualified stock option plans which will be recognized over the remaining weighted-average period of 1.9 years. |
Note 11 - Related Party Transac
Note 11 - Related Party Transactions | 9 Months Ended |
Sep. 30, 2015 | |
Notes to Financial Statements | |
Related Party Transactions Disclosure [Text Block] | Note 11 – Related Party Transactions Sale of Equipment: On February 3, 2014, the Board of Directors approved the sale of two trucks and a trailer to an entity owned 50% by the Company’s former Chairman for $50,000. The equipment had not been in service for over two years and was not economically feasible for the Company to repair and return to service. The Company was holding this equipment primarily for salvage purposes. At the time of the sale, the equipment had a net book value of $38,000 which resulted in a gain of $12,000. The Company believes the price paid was at least equal to the fair market value of the units had they been sold through auction or in the open market. |
Significant Accounting Policies
Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Cash and Cash Equivalents, Policy [Policy Text Block] | Cash and Cash Equivalents The Company considers all highly liquid instruments purchased with an original maturity of three months or less to be cash equivalents. The Company monitors its positions with, and the credit quality of, the financial institutions with which it invests. |
Trade and Other Accounts Receivable, Policy [Policy Text Block] | Accounts Receivable Accounts receivable are stated at the amounts billed to customers. The Company provides a reserve for doubtful accounts based on a review of outstanding receivables, historical collection information and existing economic conditions. The provision for uncollectible amounts is continually reviewed and adjusted to maintain the allowance at a level considered adequate to cover future losses. The allowance is management's best estimate of uncollectible amounts and is determined based on historical collection experience related to accounts receivable coupled with a review of the current status of existing receivables. The losses ultimately incurred could differ materially in the near term from the amounts estimated in determining the allowance. As of September 30, 2015 and December 31, 2014, the Company had an allowance for doubtful accounts of $84,400 and $100,000, respectively. For the three and nine months ended September 30, 2015, the Company recorded bad debt expense (net of recoveries) of $8,205 and $21,050, respectively. For the three and nine months ended September 30, 2014, the Company recorded bad debt expense (net of recoveries) of $41,807 and $91,807, respectively. |
Inventory, Policy [Policy Text Block] | Inventory Inventory consists primarily of propane, diesel fuel and chemicals used in the servicing of oil wells, and is carried at the lower of cost or market in accordance with the first in, first out method. The Company periodically reviews the value of items in inventory and provides write-downs or write-offs of inventory based on its assessment of market conditions. Write-downs and write-offs are charged to cost of goods sold. |
Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block] | Long-Lived Assets The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recovered. The Company looks primarily to the undiscounted future cash flows in its assessment of whether or not long-lived assets have been impaired. No impairments were recorded during the three and nine month periods ended September 30, 2015 and 2014. |
Property, Plant and Equipment, Policy [Policy Text Block] | Property and Equipment Property and equipment consists of (1) trucks, trailers and pickups; (2) trucks that are in various stages of fabrication; (3) real property which includes land and buildings used for office and shop facilities and wells used for the disposal of water; and (4) other equipment such as tools used for maintaining and repairing vehicles, office furniture and fixtures, and computer equipment. Property and equipment is stated at cost less accumulated depreciation. The Company charges repairs and maintenance against income when incurred and capitalizes renewals and betterments that extend the remaining useful life or expands the capacity or efficiency of the assets. Depreciation is recorded on a straight-line basis over estimated useful lives of 5 to 30 years. |
Lease, Policy [Policy Text Block] | Leases The Company conducts a major part of its operations from leased facilities. Each of these leases is accounted for as an operating lease. Normally, the Company records rental expense on its operating leases over the lease term as it becomes payable. If rental payments are not made on a straight-line basis, in accordance with the terms of the agreement, the Company records a deferred rent expense and recognizes the rental expense on a straight-line basis throughout the lease term. The majority of the Company’s facility leases contain renewal clauses and expire through January 2021. In most cases, management expects that in the normal course of business, leases will be renewed or replaced by other leases. The Company is leasing a number of trucks and equipment in the normal course of business, which are recorded as operating leases. The Company records rental expense on its equipment operating leases over the lease term as it becomes payable; there are no rent escalation terms associated with these equipment leases. On a number of the equipment leases, purchase options exist allowing the Company to purchase the leased equipment at the end of the lease term, based on the market price of the equipment at the time of the lease termination and exercised purchase option. In October 2015, the Company exercised the purchase option on three frac heaters. There are no significant equipment leases outstanding as of November 12, 2015. The Company has also in the past entered into several capital leases in order to acquire trucks and equipment. Each of these leases allows the Company to retain title of the equipment leased through the lease agreements upon final payment of all principal and interest due. The Company records the assets and liabilities associated with these leases at the present value of the minimum lease payments per the lease agreement. The assets are classified as property and equipment and the liabilities are classified as current and long-term liabilities based on the contractual terms of the agreements and their associated maturities. There are no outstanding capital leases as of September 30, 2015. |
Revenue Recognition, Policy [Policy Text Block] | Revenue Recognition The Company recognizes revenue when evidence of an arrangement exists, the fee is fixed or determinable, services are provided, and collection is reasonably assured. |
Earnings Per Share, Policy [Policy Text Block] | Earnings Per Share Earnings per share is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted earnings per share is calculated by dividing net income by the diluted weighted average number of common shares. The diluted weighted average number of common shares is computed using the treasury stock method for common stock that may be issued for outstanding stock options. As of September 30, 2015 and 2014, there were outstanding stock options and warrants to acquire an aggregate of 3,635,169 and 3,891,063 shares of Company common stock , respectively, which have a potentially dilutive impact on earnings per share. For the nine months ended September 30, 2014, the incremental shares of the options and warrants to be included in the calculation of diluted earnings per share had a dilutive impact on the Company’s earnings per share of 1,404,213 shares. Dilution is not permitted if there are net losses during the period. As such, the Company does not show dilutive earnings per share for the three months ended September 30, 2015 and 2014 and the nine months ended September 30, 2015. |
Goodwill and Intangible Assets, Policy [Policy Text Block] | Intangible Assets Goodwill Impairment. |
Loan Fees and Other Deferred Costs [Policy Text Block] | Loan Fees and Other Deferred Costs In the normal course of business, the Company enters into loan agreements and amendments thereto with its primary lending institutions. The majority of these lending agreements and amendments require origination fees and other fees in the course of executing the agreements. For all costs associated with the execution of the lending agreements, the Company recognizes these as capitalized costs and amortizes these costs over the term of the loan agreement using the effective interest method. These deferred costs are classified on the balance sheet as current or long-term assets based on the contractual terms of the loan agreements. All other costs not associated with the execution of the loan agreements are expensed as incurred. |
Income Tax, Policy [Policy Text Block] | Income Taxes The Company recognizes deferred tax liabilities and assets based on the differences between the tax basis of assets and liabilities and their reported amounts in the financial statements that will result in taxable or deductible amounts in future years. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities will be recognized in income in the period that includes the enactment date. Deferred income taxes are classified as a net current or non-current asset or liability based on the classification of the related asset or liability for financial reporting purposes. A deferred tax asset or liability that is not related to an asset or liability for financial reporting is classified according to the expected reversal date. The Company records a valuation allowance to reduce deferred tax assets to an amount that it believes is more likely than not to be realized. The Company accounts for any uncertainty in income taxes by recognizing the tax benefit from an uncertain tax position only if, in the Company’s opinion, it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The Company measures the tax benefits recognized in the financial statements from such a position based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution. The application of income tax law is inherently complex. Laws and regulations in this area are voluminous and are often ambiguous. As such, the Company is required to make many subjective assumptions and judgments regarding income tax exposures. Interpretations of and guidance surrounding income tax law and regulations change over time and may result in changes to the Company’s subjective assumptions and judgments which can materially affect amounts recognized in the consolidated balance sheets and consolidated statements of income. The result of the reassessment of the Company’s tax positions did not have an impact on the consolidated financial statements. Interest and penalties associated with tax positions are recorded in the period assessed as general and administrative expenses. The Company files tax returns in the United States and in the states in which it conducts its business operations. The tax years 2011 through 2014 remain open to examination in the taxing jurisdictions to which the Company is subject. |
Fair Value of Financial Instruments, Policy [Policy Text Block] | Fair Value The Company follows authoritative guidance that applies to all financial assets and liabilities required to be measured and reported on a fair value basis. The Company also applies the guidance to non-financial assets and liabilities measured at fair value on a nonrecurring basis, including non-competition agreements and goodwill. The guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. The guidance establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions of what market participants would use in pricing the asset or liability based on the best information available in the circumstances. The Company did not change its valuation techniques nor were there any transfers between hierarchy levels during the nine months ended September 30, 2015. The financial and nonfinancial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. The hierarchy is broken down into three levels based on the reliability of the inputs as follows: Level 1: Quoted prices are available in active markets for identical assets or liabilities; Level 2: Quoted prices in active markets for similar assets and liabilities that are observable for the asset or liability; or Level 3: Unobservable pricing inputs that are generally less observable from objective sources, such as discounted cash flow models or valuations. |
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | Stock-based Compensation Stock-based compensation cost is measured at the date of grant, based on the calculated fair value of the award as described below, and is recognized over the requisite service period, which is generally the vesting period of the equity grant. The Company uses the Black-Scholes pricing model as a method for determining the estimated grant date fair value for all stock options awarded to employees, independent contractors, officers, and directors. The expected term of the options is based upon evaluation of historical and expected further exercise behavior. The risk-free interest rate is based upon U.S. Treasury rates at the date of grant with maturity dates approximately equal to the expected life of the grant. Volatility is determined upon historical volatility of our stock and adjusted if future volatility is expected to vary from historical experience. The dividend yield is assumed to be none as we have not paid dividends nor do we anticipate paying any dividends in the foreseeable future. The Company also uses the Black-Scholes valuation model to determine the fair value of warrants. Expected volatility is based upon the weighted average of historical volatility over the contractual term of the warrant and implied volatility. The risk-free interest rate is based upon implied yield on a U.S. Treasury zero-coupon issue with a remaining term equal to the contractual term of the warrants. The dividend yield is assumed to be none. |
Use of Estimates, Policy [Policy Text Block] | Management Estimates The preparation of the Company’s financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include the realization of accounts receivable, stock based compensation expense, income tax provision, and the valuation of deferred taxes. Actual results could differ from those estimates. |
Reclassification, Policy [Policy Text Block] | Reclassifications Certain reclassifications have been made to the prior period financial statements to conform to the current period presentation. The Company reclassified $48,541 and $79,115 of site personnel costs from general and administrative expenses to cost of revenues on the consolidated statements of operations and comprehensive income (loss) for the three and nine months ended September 30, 2014, respectively, to conform to 2015 presentation. The Company reclassified $63,386 and $179,807 of patent defense costs from general and administrative expenses to patent litigation and defense costs on the consolidated statements of operations and comprehensive income (loss) for the three and nine months ended September 30, 2014, respectively, to conform to 2015 presentation. |
New Accounting Pronouncements, Policy [Policy Text Block] | Accounting Pronouncements Recently Issued In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers , which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. In August 2015 the FASB agreed to defer the effective date by one year, the new standard becomes effective for us on January 1, 2018. Early adoption is permitted. The standard permits the use of either the retrospective or cumulative effect transition method. We are evaluating the effect that ASU 2014-09 will have on our consolidated financial statements and related disclosures. We have not yet selected a transition method nor have we determined the effect of the standard on our ongoing financial reporting. In January 2015, the FASB issued ASU 2015-01, “Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items.” ASU 2015-01 eliminates from U.S. GAAP the concept of an extraordinary item. The Board released the new guidance as part of its simplification initiative, which is intended to “identify, evaluate, and improve areas of U.S. GAAP for which cost and complexity can be reduced while maintaining or improving the usefulness of the information provided to users of financial statements.” The ASU is effective for annual periods beginning after December 15, 2015, and interim periods within those annual periods. The adoption of this guidance is not expected to impact the Company’s consolidated financial statements. In April 2015, the FASB issued ASU 2015-03, “Simplifying the Presentation of Debt Issuance Costs.” ASU 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The ASU is effective for annual periods beginning after December 15, 2015, and interim periods within those annual periods. The simplification of the presentation of debt issuance costs is expected to have an immaterial impact on the Company’s total assets and debt. In July 2015, The adoption of this guidance is not expected to impact the Company’s consolidated financial statements. In September 2015, FASB issued ASU 2015-16, “Simplifying the Accounting for Measurement-Period Adjustments,” to amend the guidance for amounts that are adjusted in a merger or acquisition. The standard eliminates the requirement for an acquirer to retrospectively adjust the financial statements for measurement period adjustments that occur in periods after a business combination is consummated. The ASU is effective for public business entities for annual periods, including interim periods within those annual periods, beginning after December 15, 2015. Early adoption is permitted. The Company is in the process of evaluating the impact of adoption on its consolidated financial statements. |
Note 1 - Basis of Presentation
Note 1 - Basis of Presentation (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Notes Tables | |
Schedule of Current Ownership Hierarchy [Table Text Block] | Name State of Formation Ownership Business Heat Waves Hot Oil Service LLC Colorado 100% by Enservco Oil and natural gas well services, including logistics and stimulation. Dillco Fluid Service, Inc. Kansas 100% by Enservco Oil and natural gas field fluid logistic services. HE Services LLC Nevada 100% by Heat Waves No active business operations. Owns construction equipment used by Heat Waves. Real GC, LLC Colorado 100% by Heat Waves No active business operations. Owns real property in Garden City, Kansas that is utilized by Heat Waves. |
Note 3 - Property and Equipme19
Note 3 - Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Notes Tables | |
Property, Plant and Equipment [Table Text Block] | September 30, December 31, 2015 2014 Trucks and vehicles $ 53,023,723 $ 48,020,268 Other equipment 3,154,538 3,135,916 Buildings and improvements 3,731,143 3,396,280 Trucks in process 417,509 2,366,758 Land 873,427 776,420 Disposal wells 391,003 367,330 Total property and equipment 61,591,343 58,062,972 Accumulated depreciation (24,485,809 ) (20,273,968 ) Property and equipment - net $ 37,105,534 $ 37,789,004 |
Note 5 - Long-Term Debt (Tables
Note 5 - Long-Term Debt (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Notes Tables | |
Schedule of Long-term Debt Instruments [Table Text Block] | September 30, December 31, 2015 2014 Real Estate Loan for our facility in North Dakota, interest at 3.75%, monthly principal and interest payment of $5,255 ending October 3, 2028. Collateralized by land and property purchased with the loan. $ 546,653 $ 677,204 Note payable to the seller of Heat Waves. The note was garnished by the Internal Revenue Service (“IRS”) in 2009 and is due on demand; paid in monthly installments of $3,000 per agreement with the IRS. 215,000 242,000 Mortgage payable to a bank, interest at 5.9%, monthly principal and interest payments of $1,550 through January 2017 with a balloon payment of $88,118 on February 1, 2017; secured by land. 106,294 115,317 Mortgage payable to a bank; interest at 7.25%, due in monthly principal and interest payments of $4,555 through February 2017, secured by land. 71,979 107,967 Total 939,926 1,142,488 Less current portion (321,737 ) (340,520 ) Long-term debt, net of current portion $ 618,189 $ 801,968 |
Schedule of Maturities of Long-term Debt [Table Text Block] | Twelve Months Ending September 30, 2016 $ 321,737 2017 159,178 2018 46,409 2019 48,205 2020 50,033 Thereafter 314,364 Total $ 939,926 |
Note 6 - Fair Value Measureme21
Note 6 - Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Notes Tables | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block] | Fair Value Measurement Using Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Fair Value Measurement September 30, 2015 Derivative Instrument Interest rate swap $ - $ 160,000 $ - $ 160,000 |
Note 8 - Commitments and Cont22
Note 8 - Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Notes Tables | |
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block] | Twelve Months Ending September 30, 2016 $ 500,307 2017 374,358 2018 186,750 2019 189,750 2020 168,000 Thereafter 32,000 Total $ 1,451,165 |
Note 9 - Stockholders Equity (T
Note 9 - Stockholders Equity (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Notes Tables | |
Schedule of Stockholders' Equity Note, Warrants or Rights [Table Text Block] | Weighted Weighted Average Average Remaining Aggregate Exercise Contractual Intrinsic Warrants Shares Price Life (Years) Value Outstanding at December 31, 2014 250,001 $ 0.64 2.29 $ 242,901 Issued for Services - - Exercised (100,000 ) 0.77 Forfeited/Cancelled - Outstanding at September 30, 2015 150,001 $ 0.55 2.17 $ 19,500 Exercisable at September 30, 2015 150,001 $ 0.55 2.17 $ 19,500 |
Note 10 - Stock Options (Tables
Note 10 - Stock Options (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Notes Tables | |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | For the Three Months Ended For the Nine Months Ended September 30, September 30, 2015 2014 2015 2014 Expected volatility - 116% 107 - 109% 116 - 124% Risk-free interest rate - 0.93% 0.75 - 0.86% 0.72 - 0.93% Dividend yield - - - - Expected term (in years) - 2.5 3.4 3.0 |
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block] | Shares Weighted A verage Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Outstanding at December 31 , 2014 3,500,168 $ 0.90 2.02 $ 2,785,893 Granted 1,123,500 1.75 Exercised (1,125,000 ) 0.48 Forfeited or Expired (13,500 ) 2.06 Outstanding at September 30, 2015 3,485,168 $ 1.31 2.78 $ 173,433 Vested or Expected to Vest at September 30, 2015 3,485,168 $ 1.31 2.78 $ 173,433 Exercisable at September 30, 2015 2,151,499 $ 1.03 1.87 $ 173,433 |
Schedule of Nonvested Share Activity [Table Text Block] | Number of Shares Weighted-Average Grant-Date Fair Value Non-vested at December 31, 2014 498,504 $ 1.05 Granted 1,123,500 1.19 Vested (277,835 ) 0.80 Forfeited (10,500 ) 1.48 Non-vested at September 30, 2015 1,333,669 $ 1.22 |
Note 1 - Current Ownership Hier
Note 1 - Current Ownership Hierarchy (Details) | 9 Months Ended |
Sep. 30, 2015 | |
Heat Waves Hot Oil Service LLC at Colorado [Member] | |
Subsidiary or Equity Method Investee | 100.00% |
Dillco Fluid Service Inc at Kansas [Member] | |
Subsidiary or Equity Method Investee | 100.00% |
HE Services LLC at Nevada [Member] | |
Subsidiary or Equity Method Investee | 100.00% |
Real GC LLC at Colorado [Member] | |
Subsidiary or Equity Method Investee | 100.00% |
Note 2 - Summary of Significa26
Note 2 - Summary of Significant Accounting Policies (Details Textual) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Oct. 27, 2015 | Sep. 30, 2015USD ($)shares | Sep. 30, 2014USD ($)shares | Sep. 30, 2015USD ($)shares | Sep. 30, 2014USD ($)shares | Nov. 12, 2015USD ($) | Dec. 31, 2014USD ($) | |
Subsequent Event [Member] | |||||||
Contractual Obligation | $ 0 | ||||||
Number of Equipment, Exercised Purchase Options, Operating Leases | 3 | ||||||
Earliest Tax Year [Member] | |||||||
Open Tax Year | 2,011 | ||||||
Latest Tax Year [Member] | |||||||
Open Tax Year | 2,014 | ||||||
Minimum [Member] | |||||||
Property, Plant and Equipment, Useful Life | 5 years | ||||||
Maximum [Member] | |||||||
Property, Plant and Equipment, Useful Life | 30 years | ||||||
Site Personnel Costs [Member] | |||||||
Prior Period Reclassification Adjustment | $ 48,541 | $ 79,115 | |||||
Patent Defense Costs [Member] | |||||||
Prior Period Reclassification Adjustment | 63,386 | $ 179,807 | |||||
Asset Impairment Charges | 0 | $ 0 | 0 | 0 | |||
Capital Lease Obligations | 0 | 0 | |||||
Allowance for Doubtful Accounts Receivable, Current | 84,400 | 84,400 | $ 100,000 | ||||
Provision for Doubtful Accounts | $ 8,205 | $ 41,807 | $ 21,050 | $ 91,807 | |||
Number of Outstanding Stock Based Option Awards and Warrants | shares | 3,635,169 | 3,891,063 | 3,635,169 | 3,891,063 | |||
Incremental Common Shares Attributable to Dilutive Effect of Call Options and Warrants | shares | 1,404,213 |
Note 3 - Summary of Property an
Note 3 - Summary of Property and Equipment (Details) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Vehicles [Member] | ||
Property and Equipment - Gross | $ 53,023,723 | $ 48,020,268 |
Property, Plant and Equipment, Other Types [Member] | ||
Property and Equipment - Gross | 3,154,538 | 3,135,916 |
Building and Building Improvements [Member] | ||
Property and Equipment - Gross | 3,731,143 | 3,396,280 |
Trucks in Process [Member] | ||
Property and Equipment - Gross | 417,509 | 2,366,758 |
Land [Member] | ||
Property and Equipment - Gross | 873,427 | 776,420 |
Disposal Wells [Member] | ||
Property and Equipment - Gross | 391,003 | 367,330 |
Property and Equipment - Gross | 61,591,343 | 58,062,972 |
Accumulated depreciation | (24,485,809) | (20,273,968) |
Property and equipment - net | $ 37,105,534 | $ 37,789,004 |
Note 4 - PNC Credit Facility (D
Note 4 - PNC Credit Facility (Details Textual) | Sep. 17, 2015USD ($) | Feb. 27, 2015USD ($) | Sep. 30, 2015USD ($) | Mar. 28, 2015 | Sep. 30, 2015USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Dec. 31, 2014USD ($) |
Fair Value Hedging [Member] | Interest Expense [Member] | Interest Rate Swap [Member] | ||||||||
Unrealized Gain (Loss) on Derivatives | $ (160,000) | $ (160,000) | ||||||
Fair Value Hedging [Member] | Interest Rate Swap [Member] | Minimum [Member] | London Interbank Offered Rate (LIBOR) [Member] | PNC Bank [Member] | ||||||||
Derivative, Basis Spread on Variable Rate | 2.50% | |||||||
Fair Value Hedging [Member] | Interest Rate Swap [Member] | Minimum [Member] | ||||||||
Derivative, Swaption Interest Rate, Applicable Margin | 2.50% | |||||||
Fair Value Hedging [Member] | Interest Rate Swap [Member] | Maximum [Member] | London Interbank Offered Rate (LIBOR) [Member] | PNC Bank [Member] | ||||||||
Derivative, Basis Spread on Variable Rate | 3.50% | |||||||
Fair Value Hedging [Member] | Interest Rate Swap [Member] | Maximum [Member] | ||||||||
Derivative, Swaption Interest Rate, Applicable Margin | 3.50% | |||||||
Fair Value Hedging [Member] | Interest Rate Swap [Member] | ||||||||
Derivative, Notional Amount | $ 10,000,000 | |||||||
Derivative, Swaption Interest Rate | 1.88% | |||||||
Two Thousand Fourteen Credit Agreement [Member] | Revolving Credit Facility [Member] | ||||||||
Debt Instrument, Term | 5 years | |||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 30,000,000 | |||||||
Line of Credit Facility Limitation on Borrowings Percentage of Eligible Receivables | 85.00% | |||||||
Line of Credit Facility Limitation on Borrowings Percentage of Appraised Value of Trucks and Equipment | 85.00% | |||||||
Line of Credit Facility, Remaining Borrowing Capacity | $ 12.70 | $ 12.70 | $ 12.70 | |||||
Two Thousand Fourteen Credit Agreement [Member] | Subject To Certain Conditions And Approvals [Member] | ||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 40,000,000 | |||||||
Two Thousand Fourteen Credit Agreement [Member] | Minimum [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||||||||
Debt Instrument, Basis Spread on Variable Rate | 2.50% | |||||||
Two Thousand Fourteen Credit Agreement [Member] | Minimum [Member] | Base Rate [Member] | Domestic Rate Loans [Member] | ||||||||
Debt Instrument, Basis Spread on Variable Rate | 1.00% | |||||||
Two Thousand Fourteen Credit Agreement [Member] | Maximum [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||||||||
Debt Instrument, Basis Spread on Variable Rate | 3.50% | |||||||
Two Thousand Fourteen Credit Agreement [Member] | Maximum [Member] | Base Rate [Member] | Domestic Rate Loans [Member] | ||||||||
Debt Instrument, Basis Spread on Variable Rate | 2.00% | |||||||
Two Thousand Fourteen Credit Agreement [Member] | Domestic Rate Loans [Member] | ||||||||
Debt Instrument, Interest Rate, Effective Percentage | 4.25% | 4.25% | 4.25% | |||||
Long-term Debt | $ 429,416 | $ 429,416 | $ 429,416 | |||||
Two Thousand Fourteen Credit Agreement [Member] | LIBOR Based Loans [Member] | ||||||||
Debt Instrument, Interest Rate, Effective Percentage | 2.69% | 2.69% | 2.69% | |||||
Long-term Debt | $ 18,500,000 | $ 18,500,000 | $ 18,500,000 | |||||
Two Thousand Fourteen Credit Agreement [Member] | ||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 40,000,000 | |||||||
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage | 0.375% | |||||||
Long-term Debt | 28,634,037 | |||||||
Leverage Ratio | 2.75 | 3.5 | ||||||
Two Thousand Twelve Credit Agreement [Member] | ||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 16,000,000 | |||||||
Guaranteed Loan [Member] | Chief Executive Officer [Member] | ||||||||
Debt Instrument Monthly Payment | $ 12,500 | |||||||
Guaranteed Loan [Member] | ||||||||
Principal Prepayment Eliminate Monthly Fee | $ 100,000 | |||||||
Two Thousand Fourteen Credit Agreement [Member] | ||||||||
Long-term Debt | 18,929,416 | $ 18,929,416 | 18,929,416 | |||||
Long-term Debt | $ 939,926 | $ 939,926 | $ 939,926 | $ 1,142,488 |
Note 5 - Summary of Long-Term D
Note 5 - Summary of Long-Term Debt Instruments (Details) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Real Estate Loan 1 [Member] | ||
Long -term debt | $ 546,653 | $ 677,204 |
Note Payable To Seller Of Heat Waves [Member] | ||
Long -term debt | 215,000 | 242,000 |
Mortgage Payable Through February 2017 [Member] | ||
Long -term debt | 106,294 | 115,317 |
Mortgage Payable Through February 2017 Without Balloon Payment [Member] | ||
Long -term debt | 71,979 | 107,967 |
Long -term debt | 939,926 | 1,142,488 |
Less current portion | (321,737) | (340,520) |
Long-term debt, net of current portion | $ 618,189 | $ 801,968 |
Note 5 - Summary of Long-Term30
Note 5 - Summary of Long-Term Debt Instruments (Details) (Parentheticals) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2015 | Dec. 31, 2014 | |
Real Estate Loan 1 [Member] | ||
Debt Instrument, Periodic Payment | $ 5,255 | $ 5,255 |
Long-term Debt, Percentage Bearing Fixed Interest, Percentage Rate | 3.75% | 3.75% |
Debt Instrument, Maturity Date | Oct. 3, 2028 | Oct. 3, 2028 |
Note Payable To Seller Of Heat Waves [Member] | ||
Debt Instrument, Periodic Payment | $ 3,000 | $ 3,000 |
Mortgage Payable Through February 2017 [Member] | ||
Debt Instrument, Periodic Payment | $ 1,550 | $ 1,550 |
Long-term Debt, Percentage Bearing Fixed Interest, Percentage Rate | 5.90% | 5.90% |
Debt Instrument, Maturity Date | Feb. 1, 2017 | Feb. 1, 2017 |
Debt Instrument, Periodic Payment Terms, Balloon Payment to be Paid | $ 88,118 | $ 88,118 |
Mortgage Payable Through February 2017 Without Balloon Payment [Member] | ||
Debt Instrument, Periodic Payment | $ 4,555 | $ 4,555 |
Long-term Debt, Percentage Bearing Fixed Interest, Percentage Rate | 7.25% | 7.25% |
Note 5 - Summary of Maturities
Note 5 - Summary of Maturities of Long-Term Debt (Details) | Sep. 30, 2015USD ($) |
2,016 | $ 321,737 |
2,017 | 159,178 |
2,018 | 46,409 |
2,019 | 48,205 |
2,020 | 50,033 |
Thereafter | 314,364 |
Total | $ 939,926 |
Note 6 - Fair Value Measureme32
Note 6 - Fair Value Measurements (Details Textual) - Interest Rate Swap [Member] | Sep. 30, 2015USD ($) |
Accounts Payable and Accrued Liabilities [Member] | |
Derivative Liability | $ 160,000 |
Derivative Liability | $ 160,000 |
Note 6 - Financial Assets and L
Note 6 - Financial Assets and Liabilities Measured on Recurring Basis (Details) - Interest Rate Swap [Member] | Sep. 30, 2015USD ($) |
Fair Value, Inputs, Level 1 [Member] | |
Interest rate swap | |
Fair Value, Inputs, Level 2 [Member] | |
Interest rate swap | $ 160,000 |
Fair Value, Inputs, Level 3 [Member] | |
Interest rate swap | |
Interest rate swap | $ 160,000 |
Note 7 - Income Taxes (Details
Note 7 - Income Taxes (Details Textual) | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 34.00% | 34.00% |
Note 8 - Commitments and Cont35
Note 8 - Commitments and Contingencies (Details Textual) | Feb. 11, 2015 | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2014 | Dec. 31, 2014 |
Capital Addition Purchase Commitments [Member] | |||||
Unrecorded Unconditional Purchase Obligation | $ 0 | ||||
Patent 993 [Member] | Heat-On-The-Fly, LLC (HOTF) [Member] | |||||
Loss Contingency, Damages Awarded, Value | $ 750,000 | ||||
Patent 993 [Member] | Prior Reexamination [Member] | |||||
Loss Contingency, Claims Settled, Number | 12 | ||||
Patent 993 [Member] | Reexamination [Member] | |||||
Loss Contingency, Pending Claims, Number | 99 | ||||
Loss Contingency, Claims Dismissed, Number | 99 | ||||
Patent 993 And Patent 875 [Member] | Unasserted Claim [Member] | |||||
Loss Contingency, Pending Claims, Number | 2 | ||||
Self-insured Amount per Individual Claim | $ 75,000 | ||||
Self Insurance Reserve | $ 85,000 |
Note 8 - Summary of Future Mini
Note 8 - Summary of Future Minimum Operating Lease Commitments (Details) | Sep. 30, 2015USD ($) |
2,016 | $ 500,307 |
2,017 | 374,358 |
2,018 | 186,750 |
2,019 | 189,750 |
2,020 | 168,000 |
Thereafter | 32,000 |
Total | $ 1,451,165 |
Note 9 - Stockholders Equity (D
Note 9 - Stockholders Equity (Details Textual) - USD ($) | Nov. 30, 2012 | Jun. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 |
Mr Herman [Member] | ||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 4,960,714 | |||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.55 | |||
Warrants Expiration Period | 5 years | |||
Class of Warrant or Right, Outstanding | 37,501 | |||
Each Principal Of Existing Investor Relations Firm [Member] | ||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 112,500 | |||
Class of Warrant or Right, Outstanding | 112,500 | |||
Principals Of Existing Investor Relations Firm [Member] | ||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 225,000 | |||
Class of Warrant or Right, Issued During Period | 0 | |||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.55 | |||
Warrants Expiration Period | 5 years | |||
Stock Issued from Exercise of Warrants | 341,462 | 100,000 | ||
Proceeds from Warrant Exercises | $ 77,100 | $ 187,804 | ||
Aggregate Intrinsic Value Of Warrants Exercised | $ 102,000 | $ 4,129,465 | ||
Stock Issued During Period Shares Cashless Exercise of Warrants | 1,925,357 | |||
Stock Issued from Cashless Exercise of Warrants | 1,482,041 | |||
Stock Issued During Period Shares Warrants Cancelled | 443,316 |
Note 9 - Summary of Warrant Act
Note 9 - Summary of Warrant Activity (Details) | 9 Months Ended |
Sep. 30, 2015USD ($)$ / sharesshares | |
Outstanding at December 31, 2014 (in shares) | 250,001 |
Outstanding at December 31, 2014 (in dollars per share) | $ / shares | $ 0.64 |
Outstanding at December 31, 2014 | $ | $ 242,901 |
Exercised (in shares) | (100,000) |
Exercised (in dollars per share) | $ / shares | $ 0.77 |
Outstanding at September 30, 2015 (in shares) | 150,001 |
Outstanding at September 30, 2015 (in dollars per share) | $ / shares | $ 0.55 |
Outstanding at September 30, 2015 | $ | $ 19,500 |
Exercisable at September 30, 2015, Shares (in shares) | 150,001 |
Exercisable at September 30, 2015, Weighted Average Exercise Price (in dollars per share) | $ / shares | $ 0.55 |
Exercisable at September 30, 2015,Weighted Average Remaining Contractual Life | 2 years 62 days |
Exercisable at September 30, 2015, Aggregate Intrinsic Value | $ | $ 19,500 |
Note 10 - Stock Options (Detail
Note 10 - Stock Options (Details Textual) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Jan. 02, 2015 | Dec. 31, 2014 | |
Option Plan 2010 Member | Minimum [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 1 year | |||||
Option Plan 2010 Member | Maximum [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 3 years | |||||
Option Plan 2010 Member | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Percentage of Outstanding Stock Maximum | 15.00% | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 5,558,432 | |||||
Common Stock, Shares, Outstanding | 37,056,215 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | 5 years | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 3,485,168 | 3,485,168 | ||||
Cashless Exercise [Member] | ||||||
Number Of Common Shares Options Exercised | 720,333 | 28,333 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 550,276 | 24,282 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period | 170,057 | 4,051 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value | $ 1,131,371 | $ 75,837 | ||||
Exercised For Cash Payments [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 404,667 | 244,999 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value | $ 423,837 | $ 531,609 | ||||
Proceeds from Stock Options Exercised | 198,285 | 127,987 | ||||
General and Administrative Expense [Member] | ||||||
Allocated Share-based Compensation Expense | $ 170,972 | $ 372,239 | $ 442,243 | $ 520,519 | ||
Common Stock, Shares, Outstanding | 38,111,158 | 38,111,158 | 37,056,215 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 3,485,168 | 3,485,168 | 3,500,168 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Shares Issued in Period | 1,123,500 | 432,500 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 1.19 | $ 1.67 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 1,125,000 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period | 13,500 | |||||
Proceeds from Stock Options Exercised | $ 12,250 | $ 61,537 | $ 198,285 | $ 127,987 | ||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized | $ 1,223,590 | $ 1,223,590 | ||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 1 year 328 days |
Note 10 - Summary of Stock Valu
Note 10 - Summary of Stock Valuation Assumptions (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Minimum [Member] | ||||
Expected volatility | 107.00% | 116.00% | ||
Risk-free interest rate | 0.75% | 0.72% | ||
Maximum [Member] | ||||
Expected volatility | 109.00% | 124.00% | ||
Risk-free interest rate | 0.86% | 0.93% | ||
Expected volatility | 116.00% | |||
Risk-free interest rate | 0.93% | |||
Expected term (in years) | 2 years 182 days | 3 years 146 days | 3 years |
Note 10 - Summary of Stock Opti
Note 10 - Summary of Stock Option Activity (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2015 | Dec. 31, 2014 | |
Outstanding at December 31, 2014 (in shares) | 3,485,168 | 3,500,168 |
Outstanding at December 31, 2014 (in dollars per share) | $ 1.31 | $ 0.90 |
Outstanding at December 31, 2014 | 2 years 284 days | 2 years 7 days |
Outstanding at December 31, 2014 | $ 173,433 | $ 2,785,893 |
Granted (in shares) | 1,123,500 | |
Granted (in dollars per share) | $ 1.75 | |
Exercised (in shares) | (1,125,000) | |
Exercised (in dollars per share) | $ 0.48 | |
Forfeited or Expired (in shares) | (13,500) | |
Forfeited or Expired (in dollars per share) | $ 2.06 | |
Vested or Expected to Vest at September 30, 2015 (in shares) | 3,485,168 | |
Vested or Expected to Vest at September 30, 2015 (in dollars per share) | $ 1.31 | |
Vested or Expected to Vest at September 30, 2015 | 2 years 284 days | |
Vested or Expected to Vest at September 30, 2015 | $ 173,433 | |
Exercisable at September 30, 2015 (in shares) | 2,151,499 | |
Exercisable at September 30, 2015 (in dollars per share) | $ 1.03 | |
Exercisable at September 30, 2015 | 1 year 317 days | |
Exercisable at September 30, 2015 | $ 173,433 |
Note 10 - Summary of the Status
Note 10 - Summary of the Status of Non-vested Shares (Details) | 9 Months Ended |
Sep. 30, 2015$ / sharesshares | |
Non-vested at December 31, 2014 (in shares) | 498,504 |
Non-vested at December 31, 2014 (in dollars per share) | $ / shares | $ 1.05 |
Granted (in shares) | 1,123,500 |
Granted (in dollars per share) | $ / shares | $ 1.19 |
Vested (in shares) | (277,835) |
Vested (in dollars per share) | $ / shares | $ 0.80 |
Forfeited (in shares) | (10,500) |
Forfeited (in dollars per share) | $ / shares | $ 1.48 |
Non-vested at September 30, 2015 (in shares) | 1,333,669 |
Non-vested at September 30, 2015 (in dollars per share) | $ / shares | $ 1.22 |
Note 11 - Related Party Trans43
Note 11 - Related Party Transactions (Details Textual) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Feb. 03, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Board of Directors Chairman [Member] | ||||||
Proceeds from Sale of Machinery and Equipment | $ 50,000 | |||||
Property, Plant and Equipment, Net | 38,000 | |||||
Gain (Loss) on Disposition of Assets | $ 12,000 | |||||
Proceeds from Sale of Machinery and Equipment | $ 5,000 | $ 50,000 | ||||
Property, Plant and Equipment, Net | $ 37,105,534 | $ 37,105,534 | $ 37,789,004 |