Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Nov. 05, 2016 | |
Document Information [Line Items] | ||
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) | 38,130,160 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Current Assets | ||
Cash and cash equivalents | $ 781,275 | $ 804,737 |
Accounts receivable, net | 3,370,676 | 7,037,419 |
Prepaid expenses and other current assets | 916,553 | 1,072,479 |
Inventories | 362,582 | 308,297 |
Income tax receivable | 223,847 | 222,447 |
Total current assets | 5,654,933 | 9,445,379 |
Property and Equipment, net | 36,242,244 | 36,494,661 |
Goodwill | 301,087 | 301,087 |
Other Assets | 154,481 | 180,730 |
TOTAL ASSETS | 42,352,745 | 46,421,857 |
Current Liabilities | ||
Accounts payable and accrued liabilities | 2,794,122 | 3,039,859 |
Current portion of long-term debt | 338,178 | 314,263 |
Total current liabilities | 3,132,300 | 3,354,122 |
Long-Term Liabilities | ||
Senior revolving credit facility, net of unamortized deferred loan costs of $469,054 and $532,870, respectively | 24,849,530 | 20,173,371 |
Long-term debt, less current portion | 459,010 | 590,505 |
Deferred income taxes, net | 1,343,961 | 4,417,043 |
Total long-term liabilities | 26,652,501 | 25,180,919 |
Total liabilities | 29,784,801 | 28,535,041 |
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, 38,233,760 and 38,230,729 shares issued, respectively; 103,600 shares of treasury stock; and 38,130,160 and 38,127,129 shares outstanding, respectively | 190,650 | 190,634 |
Additional paid-in-capital | 14,347,719 | 13,852,563 |
Accumulated (deficit) earnings | (1,970,425) | 3,843,619 |
Total stockholders’ equity | 12,567,944 | 17,886,816 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ 42,352,745 | $ 46,421,857 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Unamortized deferred loan costs | $ 469,054 | $ 532,870 |
Preferred stock, par value (in dollars per share) | $ 0.005 | $ 0.005 |
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) | 38,233,760 | 38,230,729 |
Treasury stock, shares (in shares) | 103,600 | 103,600 |
Common stock, shares outstanding (in shares) | 38,130,160 | 38,127,129 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Revenues | $ 5,503,211 | $ 5,308,854 | $ 17,948,622 | $ 30,150,900 |
Cost of Revenue | 5,961,540 | 5,355,942 | 17,669,806 | 22,184,102 |
Gross Profit (Loss) | (458,329) | (47,088) | 278,816 | 7,966,798 |
Operating Expenses | ||||
General and administrative expenses | 966,873 | 954,831 | 2,894,769 | 3,115,557 |
Patent litigation and defense costs | 33,171 | 53,844 | 108,783 | 493,058 |
Depreciation and amortization | 1,602,901 | 1,489,352 | 4,968,493 | 4,252,124 |
Total operating expenses | 2,602,945 | 2,498,027 | 7,972,045 | 7,860,739 |
Income (Loss) from Operations | (3,061,274) | (2,545,115) | (7,693,229) | 106,059 |
Other Income (Expense) | ||||
Interest expense | (553,049) | (360,434) | (1,426,500) | (860,865) |
Gain (Loss) on disposal of equipment | 233,473 | (1,071) | ||
Other income | 5,198 | 22,642 | 12,204 | 54,893 |
Total other expense | (547,851) | (337,792) | (1,180,823) | (807,043) |
Income (Loss) Before Tax Expense | (3,609,125) | (2,882,907) | (8,874,052) | (700,984) |
Income Tax Expense (Benefit) | 1,251,301 | 1,234,716 | 3,060,008 | 330,162 |
Net Income (Loss) | (2,357,824) | (1,648,191) | (5,814,044) | (370,822) |
Other Comprehensive Income (Loss) | ||||
Comprehensive Income (Loss) | $ (2,357,824) | $ (1,648,191) | $ (5,814,044) | $ (370,822) |
Earnings (Loss) per Common Share – Basic (in dollars per share) | $ (0.06) | $ (0.04) | $ (0.15) | $ (0.01) |
Earnings (Loss) per Common Share – Diluted (in dollars per share) | $ (0.06) | $ (0.04) | $ (0.15) | $ (0.01) |
Basic weighted average number of common shares outstanding (in shares) | 38,130,160 | 38,101,647 | 38,129,994 | 37,740,843 |
Add: Dilutive shares assuming exercise of options and warrants (in shares) | ||||
Diluted weighted average number of common shares outstanding (in shares) | 38,130,160 | 38,101,647 | 38,129,994 | 37,740,843 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
OPERATING ACTIVITIES | ||||
Net income (loss) | $ (2,357,824) | $ (1,648,191) | $ (5,814,044) | $ (370,822) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||
Depreciation and amortization | 1,602,901 | 1,489,352 | 4,968,493 | 4,252,124 |
(Gain) loss on disposal of equipment | (233,473) | 1,071 | ||
Deferred income taxes | (1,264,375) | (1,178,098) | (3,073,082) | (368,933) |
Stock-based compensation | 175,954 | 170,972 | 493,458 | 442,243 |
Stock issued for services | 1,714 | |||
Amortization of debt issuance costs | 39,123 | 32,265 | 113,816 | 90,048 |
Bad debt expense | 58,953 | 8,205 | 145,902 | 21,050 |
Changes in operating assets and liabilities | ||||
Accounts receivable | (726,901) | 657,071 | 3,520,841 | 11,446,199 |
Inventories | (4,451) | (19,733) | (54,285) | 65,503 |
Prepaid expense and other current assets | 190,956 | (263,144) | 155,926 | 278,560 |
Income taxes receivable | (62,091) | (1,400) | (191,697) | |
Other assets | 26,249 | 14,849 | 26,249 | 14,849 |
Accounts payable and accrued liabilities | 624,521 | 958,066 | (245,737) | (2,806,459) |
Net cash provided by (used in) operating activities | (1,634,894) | 159,523 | 4,378 | 12,873,736 |
INVESTING ACTIVITIES | ||||
Purchases of property and equipment | (232,010) | (429,623) | (4,804,328) | (3,574,725) |
Proceeds from disposal of equipment | 321,725 | 5,000 | ||
Net cash provided by (used in) investing activities | (232,010) | (429,623) | (4,482,603) | (3,569,725) |
FINANCING ACTIVITIES | ||||
Net line of credit borrowings (payments) | 2,117,214 | 376,522 | 4,612,343 | (9,704,621) |
Repayment on long-term debt | (36,221) | (34,703) | (107,580) | (202,562) |
Payment of debt issuance costs | (100,000) | (50,000) | (100,000) | |
Proceeds from exercise of warrants | 77,100 | |||
Proceeds from exercise of stock options | 12,250 | 198,285 | ||
Excess tax benefits from exercise of options and warrants | 3,109 | 221,229 | ||
Net cash provided by (used in) financing activities | 2,080,993 | 257,178 | 4,454,763 | (9,510,569) |
Net Increase (Decrease) in Cash and Cash Equivalents | 214,089 | (12,922) | (23,462) | (206,558) |
Cash and Cash Equivalents, Beginning of Period | 567,186 | 760,422 | 804,737 | 954,058 |
Cash and Cash Equivalents, End of Period | 781,275 | 747,500 | 781,275 | 747,500 |
Supplemental cash flow information: | ||||
Cash paid for interest | 574,076 | 219,192 | 1,194,908 | 841,252 |
Cash paid for taxes | 13,074 | 2,362 | 14,474 | 9,236 |
Supplemental Disclosure of Non-cash Investing and Financing Activities: | ||||
Cashless exercise of stock options and warrants | $ 2,751 |
Note 1 - Basis of Presentation
Note 1 - Basis of Presentation | 9 Months Ended |
Sep. 30, 2016 | |
Notes to Financial Statements | |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | Note 1 – Basis of Presentation The accompanying consolidated financial statements have been derived from the accounting records of Enservco Corporation, Heat Waves Hot Oil Service LLC (“Heat Waves”), Dillco Fluid Service, Inc. (“Dillco”), Heat Waves Water Management LLC (“HWWM”), HE Services LLC, and Real GC LLC (collectively, the “Company”) as of September 30, 2016 and December 31, 2015 and the results of operations for the three and nine months ended September 30, 2016 and 2015. The below table provides an overview of the Company’s current ownership hierarchy: Name State of Formation Ownership Business Dillco Fluid Service, Inc. (“Dillco”) Kansas 100% by Enservco Oil and natural gas field fluid logistic services. Heat Waves Hot Oil Service LLC (“Heat Waves”) Colorado 100% by Enservco Oil and natural gas well services, including logistics and stimulation. Heat Waves Water Management LLC (“HWWM”) Colorado 100% by Enservco Water Transfer and Water Treatment Services. HE Services LLC (“HES”) Nevada 100% by Heat Waves No active business operations. Owns construction equipment used by Heat Waves. Real GC, LLC (“Real GC”) Colorado 100% by Heat Waves No active business operations. Owns real property in Garden City, Kansas that is utilized by Heat Waves. On November 24, 2015, Heat Waves Water Management LLC (“HWWM”) was organized under Colorado law as a wholly owned subsidiary of Enservco for the purpose of launching a new water management division. Effective January 1, 2016, HWWM acquired various water transfer assets from WET Oil Services, LLC (“WET”) and HII Technologies, Inc. and its affiliates (“HIIT”) for approximately $4.0 million. As part of the HIIT transaction, HWWM also acquired a new water treatment technology utilized in devices sold under the name of HydroFLOW. HydroFLOW products offer water treatment services based on patented hydropath technology that can remove bacteria and scale from water using electrical induction to reduce or eliminate down-hole scaling and corrosion. HWWM provides water transfer services and water treatment services to the onshore oil and natural gas sector. 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, 2015. All significant inter-company balances and transactions have been eliminated in the accompanying condensed consolidated financial statements. The accompanying Condensed Consolidated Balance Sheet at December 31, 2015 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, 2015. |
Note 2 - Summary of Significant
Note 2 - Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2016 | |
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, net of an allowance for uncollectible accounts. The Company provides an allowance for uncollectable 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, 2016 and December 31, 2015, the Company had an allowance for doubtful accounts of $26,371 and $158,800, respectively. For the three and nine months ended September 30, 2016, the Company recorded bad debt expense (net of recoveries) of $58,953 and $145,902, 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. 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, 2016 and 2015. Property and Equipment Property and equipment consists of (1) trucks, trailers and pickups; (2) water transfer pumps, pipe, lay flat hose, trailers, and other support equipment; (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 June 2022. In most cases, management expects that in the normal course of business, leases will be renewed or replaced by other leases. The Company has leased trucks and equipment in the normal course of business, which was recorded as an operating lease. The Company recorded rental expense on equipment under operating leases over the lease term as it becomes payable; there were no rent escalation terms associated with these equipment leases. The equipment leases contained a purchase option that allowed 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. In October 2015, the Company exercised the purchase option on three frac water heaters. There are no significant equipment leases outstanding as of September 30, 2016. 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 (Loss) Per Share Earnings (loss) per share is computed by dividing net income (loss) 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, 2016 and 2015, there were outstanding stock options and warrants to acquire an aggregate of 4,490,669 and 3,635,169 shares of Company common stock , respectively, which have a potentially dilutive impact on earnings per share. Dilution is not permitted if there are net losses during the period. As such, the Company does not show dilutive loss per share for the three and nine months ended September 30, 2016 or for the three and 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 a direct deduction from the carrying amount of the related debt liability. 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. 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. A review of the Company’s current tax positions did not identify any uncertain tax positions that would 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 2012 through 2015 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 three and nine months ended September 30, 2016. The financial and non-financial 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, the valuation of interest rate swaps, and the valuation of deferred taxes. Actual results could differ from those estimates. 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 August 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements—Going Concern: Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern” In July 2015, Simplifying the Measurement of Inventory The adoption of this guidance is not expected to impact the Company’s consolidated financial statements. In February 2016, the FASB issued ASU 2016-02 “ Leases (Topic 842) In March 2016, the FASB issued ASU 2016-09 “Compensation – Stock Compensation (Topic 718)” Recently Adopted Effective January 1, 2016, the Company adopted ASU 2015-03, “ Simplifying the Presentation of Debt Issuance Costs Effective January 1, 2016, the Company elected to early adopt ASU 2015-17, “ Balance Sheet Classification of Deferred Taxes” Our adoption resulted in a reclassification of current deferred tax assets of $237,411 to an offset of long-term deferred income taxes resulting in net long-term deferred income taxes of $4,417,043 as of December 31, 2015. |
Note 3 - Property and Equipment
Note 3 - Property and Equipment | 9 Months Ended |
Sep. 30, 2016 | |
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, 2016 2015 Trucks and vehicles $ 54,269,251 $ 54,153,487 Water transfer equipment 4,347,803 176,412 Other equipment 3,193,615 3,158,758 Buildings and improvements 3,835,110 3,752,841 Land 873,428 873,428 Disposal wells 391,003 391,003 Total property and equipment 66,910,210 62,505,929 Accumulated depreciation (30,667,966 ) (26,011,268 ) Property and equipment – net $ 36,242,244 $ 36,494,661 Effective January 1, 2016, HWWM acquired various water transfer assets from WET and HIIT for approximately $4 million. These assets include high and low volume pumps, aluminum pipe, manifolds, lay flat hose, generators, other support equipment including vehicles and trailers. As part of the HIIT acquisition, HWWM also acquired a new water treatment technology utilized in devices sold under the name of HydroFLOW. In accordance with FASB Accounting Standards Codification 805, Business Combinations, the Company has accounted for the transactions with both HIIT and WET as asset acquisitions. |
Note 4 - PNC Credit Facility
Note 4 - PNC Credit Facility | 9 Months Ended |
Sep. 30, 2016 | |
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 up to 85% of the appraised value of trucks and equipment. Under the 2014 Credit Agreement, there are no required principal payments until maturity and the Company had 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. 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. 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. Effective December 31, 2015, the Company entered into a fifth amendment to the 2014 Credit Agreement. The fifth amendment, among other things, (i) increased the applicable margin for Domestic Rate Loans and LIBOR Rate Loans by 25 basis points (ii) adjusted the Company’s leverage ratio, as defined, to 4.25 to 1.00 as of December 31, 2015, 4.50 to 1.00 as of March 31, 2016, and 3.50 to 1.00 as of June 30, 2016 and each quarter thereafter, and (iii) limited capital expenditures, as defined to an aggregate amount of $7,800,000 during the period commencing October 1, 2015 through June 30, 2016. On March 29, 2016, the Company entered into a Sixth Amendment (the “Sixth Amendment”) to the 2014 Credit Agreement. The Sixth Amendment, among other things, (i) reduced the revolving line of credit commitment from $40 million back to its original $30 million, (ii) reset the fixed charge coverage ratio to build to a trailing four quarters beginning with the quarter ended December 31, 2015, (iii) added a new covenant which established a minimum monthly availability requirement for the period of March 2016 through March 2017 ranging from $1.5 million to $8.0 million, (iv) converted the leverage and fixed charge coverage ratios to springing covenants which would only be triggered upon failure to meet the new availability covenant until it expires in March 2017; thereafter they will be individually tested quarterly, (v) increased the applicable margin for Domestic Rate Loans and LIBOR Rate Loans by 175 basis points, and (vi) reinstated a full cash dominion requirement. On August 10, 2016, the Company entered into a Seventh Amendment to the 2014 Credit Agreement that among other things; (i) reset and extended the minimum monthly availability covenant from the date of amendment through June 30, 2017 at amounts ranging from $658,000 to $3.5 million, (ii) extended the period of time that the leverage ratio and fixed charge coverage ratio are springing covenants through July 1, 2017; (iii) provided for a 0.5% monthly reduction in the advance rate on the appraised value of equipment to 80% through February 2017, and (iv) included an amendment fee of $200,000. On October 4, 2016, the Company entered into an Eighth Amendment to the 2014 Credit Agreement that among other things; (i) reset the minimum monthly availability covenant to $500,000 from September 1, 2016 through November 30, 2016 and $1 million thereafter; and (ii) reset the leverage ratio for each quarterly period as follows: Fiscal Quarter Ending: Maximum Leverage Ratio March 31, 2017 5.50:1.00 June 30, 2017 4.50:1.00 September 30, 2017 4.50:1.00 December 31, 2017 7.00:1.00 March 31, 2018 5.50:1.00 June 30, 2018 5.00:1.00 September 30, 2018 5.00:1.00 December 31, 2018 5.00:1.00 March 31, 2019 3.50:1.00 June 30, 2019 and each fiscal quarter thereafter 3.50:1.00 As of September 30, 2016, the Company had an outstanding principle loan balance of $25,318,584 and unamortized debt issuance costs of $469,054. The interest rate at September 30, 2016 was 5.0% for the $25,250,000 of outstanding LIBOR Rate Loans and 6.5% for the $68,584 of outstanding Domestic Rate Loans. The outstanding principle loan balance matures in September 2019. As of September 30, 2016, approximately $1.3 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 4.50% to 5.50% paid by the Company and a floating payment rate equal to LIBOR plus applicable margin of 4.50% to 5.50% 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 months ended September 30, 2016, the fair market value of the swap instrument increased by $65,000 and resulted in a decrease to the liability and a reduction in interest expense. During the nine months ended September 30, 2016, the fair market value of the swap decreased by $107,000 and resulted in an increase in the liability and additional interest expense. |
Note 5 - Long-term Debt
Note 5 - Long-term Debt | 9 Months Ended |
Sep. 30, 2016 | |
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, 2016 2015 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. $ 503,691 $ 536,038 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. 179,000 206,000 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. 93,637 103,191 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. 20,860 59,539 Total 797,188 904,768 Less current portion (338,178 ) (314,263 ) Long-term debt, net of current portion $ 459,010 $ 590,505 Aggregate maturities of debt, excluding the 2014 Credit Agreement described in Note 4, are as follows: Twelve Months Ending September 30, 2017 $ 338,178 2018 46,409 2019 48,205 2020 50,033 2021 52,006 Thereafter 262,357 Total $ 797,188 |
Note 6 - Fair Value Measurement
Note 6 - Fair Value Measurements | 9 Months Ended |
Sep. 30, 2016 | |
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, 2016 Derivative Instrument Interest rate swap $ - $ 270,000 $ - $ 270,000 December 31, 2015 Derivative Instrument Interest rate swap $ - $ 163,000 $ - $ 163,000 The interest rate swap consisted of a liability of $270,000 and $163,000 as of September 30, 2016 and December 31, 2015, respectively (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, 2016 | |
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, 2016 and 2015 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 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, 2016 | |
Notes to Financial Statements | |
Commitments and Contingencies Disclosure [Text Block] | Note 8 – Commitments and Contingencies Operating Leases As of September 30, 2016, the Company leases facilities under lease commitments that expire through June 2022. Future minimum lease commitments for these operating lease commitments are as follows: Twelve Months Ending September 30, 2017 $ 679,673 2018 502,349 2019 468,525 2020 450,451 2021 252,127 Thereafter 162,663 Total $ 2,515,788 Self-Insurance The Company is self-insured under its Employee Group Medical Plan for the first $50,000 per individual participant. The Company has accrued a liability of approximately $36,000 as of September 30, 2016 for insurance claims that it anticipates paying in the future related to claims that occurred during the period ended September 30, 2016. Litigation Enservco Corporation (“Enservco”) and its subsidiary Heat Waves Hot Oil Service LLC (“Heat Waves”) are defendants in a civil complaint, Civil Action No. 1:15-cv-00983-RBJ (“Colorado Case”), that alleges that Enservco and Heat Waves, in offering and selling frac water heating services, infringed and induced others to infringe two patents owned by Heat-On-The-Fly, LLC (“HOTF”). The complaint relates to only a portion of the frac water heating services provided by Heat Waves. The Colorado Case is now stayed pending resolution of appeal by HOTF of a North Dakota court’s ruling that the primary patent (“the ‘993 Patent”) in the Colorado Case was invalid. Neither Enservco nor Heat Waves is a party to the North Dakota Case, which involves other energy companies. In the event that HOTF’s appeal is successful and the ‘993 Patent is found to be valid and/or enforceable in the North Dakota Case, 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/attorneys’ fees (which may be significant) and Heat Waves could possibly be enjoined from using any technology that is determined to be infringing. Either result could negatively impact Heat Waves’ 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. See disclosure in the Item 3 of our annual Form 10-K for the year ended December 31, 2015, and updates disclosed in our Notes to the Condensed Consolidated Financial Statements of our quarterly reports on Form 10-Q for the quarters ended June 30, 2016 and March 31, 2016. |
Note 9 - Stockholders Equity
Note 9 - Stockholders Equity | 9 Months Ended |
Sep. 30, 2016 | |
Notes to Financial Statements | |
Stockholders' Equity Note Disclosure [Text Block] | Note 9 – Stockholders Equity Warrants In conjunction with a private placement transaction and subordinated debt conversion in November 2012, the Company granted warrants to purchase 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, 2016, 150,001 of these warrants remain outstanding. A summary of warrant activity for the nine months ended September 30, 2016 is as follows: Weighted Weighted Average Average Remaining Aggregate Exercise Contractual Intrinsic Warrants Shares Price Life (Years) Value Outstanding at December 31, 2015 150,001 $ 0.55 1.9 $ - Issued for Services 30,000 0.70 5.0 $ - Exercised - - Forfeited/Cancelled - Outstanding at September 30, 2016 180,001 $ 0.57 1.8 $ 4,500 Exercisable at September 30, 2016 150,001 $ 0.55 1.2 $ 4,500 In June 2016, the Company granted a principal of the Company’s existing investor relations firm warrants to acquire 30,000 shares of the Company’s common stock in connection with a reduction of the firms ongoing monthly cash service fees. The warrants had a grant-date fair value of $0.36 per share and vest over a one year period, 15,000 on December 21, 2016 and 15,000 on June 21, 2017, provided the principal of the investor relations firm remains a consultant of the Company at time of vesting. 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. Stock Issued for Services In January 2016, the Company issued 3,031 shares of common stock to a consultant as partial compensation for services provided to the Company. The shares were granted under the 2010 Stock Incentive Plan and were fully vested and unrestricted at the time of issuance. For the nine months ended September 30, 2016, the Company recorded $1,700 of consulting expense for these services in the accompanying consolidated statement of operations and comprehensive income (loss). |
Note 10 - Stock Options
Note 10 - Stock Options | 9 Months Ended |
Sep. 30, 2016 | |
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 could be granted under the 2010 Plan was 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, 2016 the number of shares of common stock available under the 2010 Plan was reset to 5,719,069 shares based upon 38,127,129 shares outstanding on that date. Options were 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 discussed below, the 2010 Plan has been replaced by a new stock option plan and no additional stock option grants will be granted under the 2010 Plan. As of September 30, 2016, there were options to purchase 2,350,668 shares outstanding under the 2010 Plan. On July 18, 2016, the Board of Directors unanimously approved the adoption of the Enservco Corporation 2016 Stock Incentive Plan (the “2016 Plan”), which was approved by the stockholders on September 29, 2016. The aggregate number of shares of common stock that may be granted under the 2016 Plan is 8,000,000 shares plus authorized and unissued shares from the 2010 Plan totaling 2,391,711 for a total reserve of 10,391,711 shares. As of September 30, 2016, there were options to purchase 1,960,000 shares outstanding under the 2016 Plan. A summary of the range of assumptions used to value stock options granted for the three and nine months ended September 30, 2016 and 2015 are as follows: For the T hree M onths E nded For the Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Expected volatility 81% - 104% - 81% - 102% 107 - 109% Risk-free interest rate 0.6% - 0.9% - 0.9% - 1.2% 0.75 - 0.86% Forfeiture rate 0% - 0% 0% Dividend yield - - - - Expected term (in years) 0.1 - 3.3 - 3.1 - 3.5 3.4 During the nine months ended September 30, 2016, the Company granted options to acquire 3,525,000 shares of common stock with a weighted-average grant-date fair value of $0.28 per share. During the nine months ended September 30, 2016, no options were exercised. 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 by paying the exercise price for such shares by canceling the remaining options for 170,057 shares. 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. The following is a summary of stock option activity for all equity plans for the nine months ended September 30, 2016: Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Outstanding at December 31 , 2015 3,485,168 $ 1.31 2.53 $ 63,067 Granted 3,525,000 0.78 Exercised - - Forfeited or Expired (2,699,500 ) 0.93 Outstanding at September 30, 2016 4,310,668 $ 1.11 3.12 $ 54,100 Vested or Expected to Vest at September 30, 2016 4,310,668 $ 1.11 3.12 $ 54,100 Exercisable at September 30, 2016 2,042,832 $ 1.23 1.92 $ 31,600 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, 2016, 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, 2016. As discussed below in the Forfeiture and Grant of Stock Option s During the nine months ended September 30, 2016 and 2015, the Company recognized stock-based compensation costs for stock options of $493,458 and $442,243, respectively in general and administrative expenses. During the three months ended September 30, 2016 and 2015, the Company recognized stock-based compensation costs for stock options of $175,954 and $170,972, 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, 2015 1,323,669 $ 1.22 Granted 3,525,000 0.28 Vested (1,401,333 ) 0.55 Forfeited or Expired (1,179,500 ) 0.53 Non-vested at September 30, 2016 2,267,836 $ 0.53 As of September 30, 2016, there was $924,960 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 1.6 years. Forfeiture and Grant of Stock Options On June 17, 2016, the Board of Directors appointed a special committee of disinterested directors (the “Special Committee”) to address certain claims in a letter dated June 14, 2016 from an attorney purporting to represent a stockholder of the Company regarding the Company’s 2010 Stock Incentive Plan (the “2010 Plan”) and equity awards granted thereunder. After investigation and consultation with special counsel, the Special Committee verified that certain stock options granted under the 2010 Plan had exceeded an applicable limitation in the 2010 Plan. On July 7, 2016, the Special Committee unanimously approved: (a) the rescission (and forfeiture by the holders) of certain stock option awards to purchase 2,560,000 shares of the Company’s common stock that had been granted to various officers and directors in excess of the 2010 Plan’s limitations (“Excess Shares”), and (b) the grant of new options to purchase 1,960,000 shares of the Company’s common stock (the “New Options”), pursuant to the 2016 Plan. The New Options were subject to: (i) each of the option holders entering into a rescission letter agreement with the Company and (ii) stockholder approval of the 2016 Plan. On July 18, 2016, the Board of Directors unanimously approved the adoption of the 2016 Plan, which after stockholder approval thereof, replaced the 2010 Plan. Further, the Company entered into rescission letter agreements with the various executive officers and directors whereby each such officer/director agreed to forfeit their Excess Shares. The Company agreed to grant the New Options pursuant to new stock option agreements that provide for vesting on substantially the same schedule as the Excess Shares would have vested but could not have been exercised prior to stockholder approval of the 2016 Plan on September 29, 2916. The exercise price of the New Options is the greater of the original exercise price of the Excess Shares or the closing market price on July 7, 2016, the date the Special Committee approved the New Options. Under the letter agreements, the termination date of each New Option is the termination date of the rescinded option, except that if the termination date of the rescinded option is prior to the two-year anniversary of the date of the letter agreement, then the termination date of the New Option is extended six months past the termination date of the rescinded option. Further, the Company agreed to submit the 2016 Plan to the stockholders of the Company for approval and on September 29, 2016, the stockholders approved the 2016 Plan. In November 2016, the Special Committee reached a settlement with the attorney and stockholder that sent the initial demand letter and agreed to pay an immaterial amount in settlement of the matter above. |
Significant Accounting Policies
Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
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, net of an allowance for uncollectible accounts. The Company provides an allowance for uncollectable 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, 2016 and December 31, 2015, the Company had an allowance for doubtful accounts of $26,371 and $158,800, respectively. For the three and nine months ended September 30, 2016, the Company recorded bad debt expense (net of recoveries) of $58,953 and $145,902, 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. |
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, 2016 and 2015. |
Property, Plant and Equipment, Policy [Policy Text Block] | Property and Equipment Property and equipment consists of (1) trucks, trailers and pickups; (2) water transfer pumps, pipe, lay flat hose, trailers, and other support equipment; (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 June 2022. In most cases, management expects that in the normal course of business, leases will be renewed or replaced by other leases. The Company has leased trucks and equipment in the normal course of business, which was recorded as an operating lease. The Company recorded rental expense on equipment under operating leases over the lease term as it becomes payable; there were no rent escalation terms associated with these equipment leases. The equipment leases contained a purchase option that allowed 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. In October 2015, the Company exercised the purchase option on three frac water heaters. There are no significant equipment leases outstanding as of September 30, 2016. |
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 (Loss) Per Share Earnings (Loss) per share is computed by dividing net income (loss) 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, 2016 and 2015, there were outstanding stock options and warrants to acquire an aggregate of 4,490,669 and 3,635,169 shares of Company common stock , respectively, which have a potentially dilutive impact on earnings per share. Dilution is not permitted if there are net losses during the period. As such, the Company does not show dilutive loss per share for the three and nine months ended September 30, 2016 or for the three and 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 a direct deduction from the carrying amount of the related debt liability. 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. 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. A review of the Company’s current tax positions did not identify any uncertain tax positions that would 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 2012 through 2015 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 three and nine months ended September 30, 2016. The financial and non-financial 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, the valuation of interest rate swaps, and the valuation of deferred taxes. Actual results could differ from those estimates. |
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 August 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements—Going Concern: Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern” In July 2015, Simplifying the Measurement of Inventory The adoption of this guidance is not expected to impact the Company’s consolidated financial statements. In February 2016, the FASB issued ASU 2016-02 “ Leases (Topic 842) In March 2016, the FASB issued ASU 2016-09 “Compensation – Stock Compensation (Topic 718)” Recently Adopted Effective January 1, 2016, the Company adopted ASU 2015-03, “ Simplifying the Presentation of Debt Issuance Costs Effective January 1, 2016, the Company elected to early adopt ASU 2015-17, “ Balance Sheet Classification of Deferred Taxes” Our adoption resulted in a reclassification of current deferred tax assets of $237,411 to an offset of long-term deferred income taxes resulting in net long-term deferred income taxes of $4,417,043 as of December 31, 2015. |
Note 1 - Basis of Presentation
Note 1 - Basis of Presentation (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Notes Tables | |
Schedule of Current Ownership Hierarchy [Table Text Block] | Name State of Formation Ownership Business Dillco Fluid Service, Inc. (“Dillco”) Kansas 100% by Enservco Oil and natural gas field fluid logistic services. Heat Waves Hot Oil Service LLC (“Heat Waves”) Colorado 100% by Enservco Oil and natural gas well services, including logistics and stimulation. Heat Waves Water Management LLC (“HWWM”) Colorado 100% by Enservco Water Transfer and Water Treatment Services. HE Services LLC (“HES”) Nevada 100% by Heat Waves No active business operations. Owns construction equipment used by Heat Waves. Real GC, LLC (“Real GC”) 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 Equipme18
Note 3 - Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Notes Tables | |
Property, Plant and Equipment [Table Text Block] | September 30, December 31, 2016 2015 Trucks and vehicles $ 54,269,251 $ 54,153,487 Water transfer equipment 4,347,803 176,412 Other equipment 3,193,615 3,158,758 Buildings and improvements 3,835,110 3,752,841 Land 873,428 873,428 Disposal wells 391,003 391,003 Total property and equipment 66,910,210 62,505,929 Accumulated depreciation (30,667,966 ) (26,011,268 ) Property and equipment – net $ 36,242,244 $ 36,494,661 |
Note 4 - PNC Credit Facility (T
Note 4 - PNC Credit Facility (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Notes Tables | |
Schedule of Leverage Ratio [Table Text Block] | Fiscal Quarter Ending: Maximum Leverage Ratio March 31, 2017 5.50:1.00 June 30, 2017 4.50:1.00 September 30, 2017 4.50:1.00 December 31, 2017 7.00:1.00 March 31, 2018 5.50:1.00 June 30, 2018 5.00:1.00 September 30, 2018 5.00:1.00 December 31, 2018 5.00:1.00 March 31, 2019 3.50:1.00 June 30, 2019 and each fiscal quarter thereafter 3.50:1.00 |
Note 5 - Long-term Debt (Tables
Note 5 - Long-term Debt (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Notes Tables | |
Schedule of Long-term Debt Instruments [Table Text Block] | September 30, December 31, 2016 2015 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. $ 503,691 $ 536,038 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. 179,000 206,000 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. 93,637 103,191 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. 20,860 59,539 Total 797,188 904,768 Less current portion (338,178 ) (314,263 ) Long-term debt, net of current portion $ 459,010 $ 590,505 |
Schedule of Maturities of Long-term Debt [Table Text Block] | Twelve Months Ending September 30, 2017 $ 338,178 2018 46,409 2019 48,205 2020 50,033 2021 52,006 Thereafter 262,357 Total $ 797,188 |
Note 6 - Fair Value Measureme21
Note 6 - Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
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, 2016 Derivative Instrument Interest rate swap $ - $ 270,000 $ - $ 270,000 December 31, 2015 Derivative Instrument Interest rate swap $ - $ 163,000 $ - $ 163,000 |
Note 8 - Commitments and Cont22
Note 8 - Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Notes Tables | |
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block] | Twelve Months Ending September 30, 2017 $ 679,673 2018 502,349 2019 468,525 2020 450,451 2021 252,127 Thereafter 162,663 Total $ 2,515,788 |
Note 9 - Stockholders Equity (T
Note 9 - Stockholders Equity (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
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, 2015 150,001 $ 0.55 1.9 $ - Issued for Services 30,000 0.70 5.0 $ - Exercised - - Forfeited/Cancelled - Outstanding at September 30, 2016 180,001 $ 0.57 1.8 $ 4,500 Exercisable at September 30, 2016 150,001 $ 0.55 1.2 $ 4,500 |
Note 10 - Stock Options (Tables
Note 10 - Stock Options (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Notes Tables | |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | For the T hree M onths E nded For the Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Expected volatility 81% - 104% - 81% - 102% 107 - 109% Risk-free interest rate 0.6% - 0.9% - 0.9% - 1.2% 0.75 - 0.86% Forfeiture rate 0% - 0% 0% Dividend yield - - - - Expected term (in years) 0.1 - 3.3 - 3.1 - 3.5 3.4 |
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block] | Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Outstanding at December 31 , 2015 3,485,168 $ 1.31 2.53 $ 63,067 Granted 3,525,000 0.78 Exercised - - Forfeited or Expired (2,699,500 ) 0.93 Outstanding at September 30, 2016 4,310,668 $ 1.11 3.12 $ 54,100 Vested or Expected to Vest at September 30, 2016 4,310,668 $ 1.11 3.12 $ 54,100 Exercisable at September 30, 2016 2,042,832 $ 1.23 1.92 $ 31,600 |
Schedule of Nonvested Share Activity [Table Text Block] | Number of Shares Weighted-Average Grant-Date Fair Value Non-vested at December 31, 2015 1,323,669 $ 1.22 Granted 3,525,000 0.28 Vested (1,401,333 ) 0.55 Forfeited or Expired (1,179,500 ) 0.53 Non-vested at September 30, 2016 2,267,836 $ 0.53 |
Note 1 - Basis of Presentatio25
Note 1 - Basis of Presentation (Details Textual) $ in Millions | Jan. 02, 2016USD ($) |
Water Management Assets of HII Technologies and Wet Oilfield Services, LLC [Member] | HWWM [Member] | |
Payments to Acquire Productive Assets | $ 4 |
Note 1 - Basis of Presentatio26
Note 1 - Basis of Presentation - Current Ownership Hierarchy (Details) | 9 Months Ended |
Sep. 30, 2016 | |
Dillco Fluid Service Inc at Kansas [Member] | |
Subsidiary or Equity Method Investee | 100.00% |
Heat Waves Hot Oil Service LLC at Colorado [Member] | |
Subsidiary or Equity Method Investee | 100.00% |
Heat Waves Water Management LLC [Member] | |
Subsidiary or Equity Method Investee | 100.00% |
HE Services LLC at Nevada [Member] | Heat Waves [Member] | |
Subsidiary or Equity Method Investee | 100.00% |
Real GC LLC at Colorado [Member] | Heat Waves [Member] | |
Subsidiary or Equity Method Investee | 100.00% |
Note 2 - Summary of Significa27
Note 2 - Summary of Significant Accounting Policies (Details Textual) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Oct. 31, 2015 | Sep. 30, 2016USD ($)shares | Sep. 30, 2015USD ($)shares | Sep. 30, 2016USD ($)shares | Sep. 30, 2015USD ($)shares | Dec. 31, 2015USD ($) | |
Earliest Tax Year [Member] | ||||||
Open Tax Year | 2,012 | |||||
Latest Tax Year [Member] | ||||||
Open Tax Year | 2,015 | |||||
Minimum [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate | ||||||
Property, Plant and Equipment, Useful Life | 5 years | |||||
Maximum [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate | ||||||
Property, Plant and Equipment, Useful Life | 30 years | |||||
Reclassification of Debt Issuance Costs [Member] | December 31, 2015 [Member] | ||||||
Prior Period Reclassification Adjustment | $ 532,870 | |||||
Reclassification from Current Deferred Tax Assets to Noncurrent Deferred Tax Liabilities [Member] | December 31, 2015 [Member] | ||||||
Prior Period Reclassification Adjustment | 237,411 | |||||
Asset Impairment Charges | $ 0 | $ 0 | $ 0 | $ 0 | ||
Dilutive Securities, Effect on Basic Earnings Per Share | 0 | 0 | 0 | 0 | ||
Goodwill, Impairment Loss | 0 | 0 | 0 | 0 | ||
Impairment of Intangible Assets (Excluding Goodwill) | $ 0 | $ 0 | $ 0 | $ 0 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate | 0.00% | |||||
Payments of Dividends | $ 0 | |||||
Contractual Obligation | $ 0 | 0 | ||||
Allowance for Doubtful Accounts Receivable, Current | 26,371 | 26,371 | 158,800 | |||
Provision for Doubtful Accounts | $ 58,953 | $ 8,205 | $ 145,902 | $ 21,050 | ||
Number of Equipment, Exercised Purchase Options, Operating Leases | 3 | |||||
Number of Outstanding Stock Based Option Awards and Warrants | shares | 4,490,669 | 3,635,169 | 4,490,669 | 3,635,169 | ||
Deferred Tax Liabilities, Net, Noncurrent | $ 1,343,961 | $ 1,343,961 | $ 4,417,043 |
Note 3 - Property and Equipme28
Note 3 - Property and Equipment (Details Textual) $ in Millions | Jan. 02, 2016USD ($) |
Water Management Assets of HII Technologies and Wet Oilfield Services, LLC [Member] | HWWM [Member] | |
Payments to Acquire Productive Assets | $ 4 |
Note 3 - Property and Equipme29
Note 3 - Property and Equipment - Summary of Property and Equipment (Details) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Vehicles [Member] | ||
Property and Equipment - Gross | $ 54,269,251 | $ 54,153,487 |
Water Transfer Equipment [Member] | ||
Property and Equipment - Gross | 4,347,803 | 176,412 |
Property, Plant and Equipment, Other Types [Member] | ||
Property and Equipment - Gross | 3,193,615 | 3,158,758 |
Building and Building Improvements [Member] | ||
Property and Equipment - Gross | 3,835,110 | 3,752,841 |
Land [Member] | ||
Property and Equipment - Gross | 873,428 | 873,428 |
Disposal Wells [Member] | ||
Property and Equipment - Gross | 391,003 | 391,003 |
Property and Equipment - Gross | 66,910,210 | 62,505,929 |
Accumulated depreciation | (30,667,966) | (26,011,268) |
Property and equipment – net | $ 36,242,244 | $ 36,494,661 |
Note 4 - PNC Credit Facility (D
Note 4 - PNC Credit Facility (Details Textual) | Sep. 17, 2016 | Aug. 10, 2016USD ($) | Mar. 29, 2016USD ($) | Dec. 31, 2015USD ($) | Sep. 17, 2015USD ($) | Mar. 29, 2015 | Mar. 28, 2015 | Sep. 30, 2014USD ($) | Nov. 30, 2016USD ($) | Sep. 30, 2016USD ($) | Mar. 31, 2016 | Sep. 30, 2015USD ($) | Jun. 30, 2016 | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2019USD ($) | Mar. 28, 2016USD ($) | Feb. 27, 2015USD ($) |
Two Thousand Fourteen Credit Agreement [Member] | Revolving Credit Facility [Member] | Minimum [Member] | ||||||||||||||||||||
Line of Credit, Minimum Monthly Availability | $ 658,000 | $ 1,500,000 | ||||||||||||||||||
Two Thousand Fourteen Credit Agreement [Member] | Revolving Credit Facility [Member] | Maximum [Member] | ||||||||||||||||||||
Line of Credit, Minimum Monthly Availability | $ 3,500,000 | 8,000,000 | ||||||||||||||||||
Two Thousand Fourteen Credit Agreement [Member] | Revolving Credit Facility [Member] | Scenario, Forecast [Member] | ||||||||||||||||||||
Line of Credit, Minimum Monthly Availability | $ 500,000 | $ 1,000,000 | ||||||||||||||||||
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 | $ 30,000,000 | $ 30,000,000 | $ 40,000,000 | ||||||||||||||||
Line of Credit Facility Limitation on Borrowings Percentage of Eligible Receivables | 85.00% | 85.00% | ||||||||||||||||||
Line of Credit Facility Limitation on Borrowings Percentage of Appraised Value of Trucks and Equipment | 80.00% | 85.00% | 85.00% | |||||||||||||||||
Line of Credit Facility Limitation on Borrowings Percentage of Appraised Value of Trucks and Equipment, Monthly Reduction | 0.50% | |||||||||||||||||||
Payments of Debt Issuance Costs | $ 200,000 | |||||||||||||||||||
Long-term Debt | $ 25,318,584 | $ 25,318,584 | ||||||||||||||||||
Unamortized Debt Issuance Expense | 469,054 | 469,054 | ||||||||||||||||||
Two Thousand Fourteen Credit Agreement [Member] | Minimum [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||||||||||||||||||||
Debt Instrument, Basis Spread on Variable Rate | 4.50% | 2.50% | ||||||||||||||||||
Two Thousand Fourteen Credit Agreement [Member] | Minimum [Member] | Base Rate [Member] | Domestic Rate Loans [Member] | ||||||||||||||||||||
Debt Instrument, Basis Spread on Variable Rate | 4.50% | 1.00% | ||||||||||||||||||
Two Thousand Fourteen Credit Agreement [Member] | Maximum [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||||||||||||||||||||
Debt Instrument, Basis Spread on Variable Rate | 5.50% | 3.50% | ||||||||||||||||||
Two Thousand Fourteen Credit Agreement [Member] | Maximum [Member] | Base Rate [Member] | Domestic Rate Loans [Member] | ||||||||||||||||||||
Debt Instrument, Basis Spread on Variable Rate | 5.50% | 2.00% | ||||||||||||||||||
Two Thousand Fourteen Credit Agreement [Member] | Base Rate [Member] | Domestic Rate Loans [Member] | ||||||||||||||||||||
Debt Instrument, Interest Rate, Increase (Decrease) | 1.75% | |||||||||||||||||||
Two Thousand Fourteen Credit Agreement [Member] | Domestic Rate Loans [Member] | ||||||||||||||||||||
Long-term Debt | $ 68,584 | $ 68,584 | ||||||||||||||||||
Debt Instrument, Interest Rate, Effective Percentage | 6.50% | 6.50% | ||||||||||||||||||
Line of Credit Facility, Remaining Borrowing Capacity | $ 1,300,000 | $ 1,300,000 | ||||||||||||||||||
Two Thousand Fourteen Credit Agreement [Member] | LIBOR Based Loans [Member] | ||||||||||||||||||||
Long-term Debt | $ 25,250,000 | $ 25,250,000 | ||||||||||||||||||
Debt Instrument, Interest Rate, Effective Percentage | 5.00% | 5.00% | ||||||||||||||||||
Two Thousand Fourteen Credit Agreement [Member] | ||||||||||||||||||||
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage | 0.375% | |||||||||||||||||||
Leverage Ratio | 4.25 | 3.5 | 2.75 | 4.5 | 3.5 | |||||||||||||||
Debt Instrument, Interest Rate, Increase (Decrease) | 0.25% | |||||||||||||||||||
Maximum Capital Expenditures | $ 7,800,000 | |||||||||||||||||||
Two Thousand Twelve Credit Agreement [Member] | ||||||||||||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 16,000,000 | $ 16,000,000 | ||||||||||||||||||
Guaranteed Loan [Member] | ||||||||||||||||||||
Principal Prepayment Eliminate Monthly Fee | $ 100,000 | |||||||||||||||||||
Fair Value Hedging [Member] | Interest Rate Swap [Member] | Interest Expense [Member] | ||||||||||||||||||||
Unrealized Gain (Loss) on Derivatives | $ 65,000 | $ (107,000) | ||||||||||||||||||
Fair Value Hedging [Member] | Interest Rate Swap [Member] | ||||||||||||||||||||
Derivative, Notional Amount | $ 10,000,000 | |||||||||||||||||||
Derivative, Swaption Interest Rate | 1.88% | |||||||||||||||||||
Payments of Debt Issuance Costs | $ 100,000 | 50,000 | $ 100,000 | |||||||||||||||||
Long-term Debt | $ 904,768 | 797,188 | 797,188 | |||||||||||||||||
Unamortized Debt Issuance Expense | $ 532,870 | $ 469,054 | $ 469,054 |
Note 4 - PNC Credit Facility -
Note 4 - PNC Credit Facility - Summary of Quarterly Leverage Ratio (Details) | 3 Months Ended | |||||||||
Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | |
Two Thousand Fourteen Credit Agreement [Member] | Scenario, Forecast [Member] | ||||||||||
March 31, 2017 | 3.5 | 3.5 | 5 | 5 | 5 | 5.5 | 7 | 4.5 | 4.5 | 5.5 |
Note 5 - Long-term Debt - Summa
Note 5 - Long-term Debt - Summary of Long-term Debt Instruments (Details) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Real Estate Loan 1 [Member] | ||
Long-term Debt | $ 503,691 | $ 536,038 |
Note Payable To Seller Of Heat Waves [Member] | ||
Long-term Debt | 179,000 | 206,000 |
Mortgage Payable Through February 2017 [Member] | ||
Long-term Debt | 93,637 | 103,191 |
Mortgage Payable Through February 2017 Without Balloon Payment [Member] | ||
Long-term Debt | 20,860 | 59,539 |
Long-term Debt | 797,188 | 904,768 |
Less current portion | (338,178) | (314,263) |
Long-term debt, net of current portion | $ 459,010 | $ 590,505 |
Note 5 - Long-term Debt - Sum33
Note 5 - Long-term Debt - Summary of Long-term Debt Instruments (Details) (Parentheticals) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
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 - Long-term Debt - Sum34
Note 5 - Long-term Debt - Summary of Maturities of Long-Term Debt (Details) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
2,017 | $ 338,178 | |
2,018 | 46,409 | |
2,019 | 48,205 | |
2,020 | 50,033 | |
2,021 | 52,006 | |
Thereafter | 262,357 | |
Total | $ 797,188 | $ 904,768 |
Note 6 - Fair Value Measureme35
Note 6 - Fair Value Measurements (Details Textual) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Interest Rate Swap [Member] | Accounts Payable and Accrued Liabilities [Member] | ||
Derivative Liability | $ 270,000 | $ 163,000 |
Derivative Liability | $ 270,000 | $ 163,000 |
Note 6 - Fair Value Measureme36
Note 6 - Fair Value Measurements - Financial Assets and Liabilities Measured on Recurring Basis (Details) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Fair Value, Inputs, Level 3 [Member] | Interest Rate Swap [Member] | ||
Interest rate swap | $ 270,000 | |
Fair Value, Inputs, Level 2 [Member] | Interest Rate Swap [Member] | ||
Interest rate swap | $ 163,000 | |
Interest rate swap | $ 270,000 | $ 163,000 |
Note 7 - Income Taxes (Details
Note 7 - Income Taxes (Details Textual) | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 34.00% | 34.00% |
Note 8 - Commitments and Cont38
Note 8 - Commitments and Contingencies (Details Textual) | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Self-insured Amount per Individual Claim | $ 50,000 |
Self Insurance Reserve | $ 36,000 |
Note 8 - Commitments and Cont39
Note 8 - Commitments and Contingencies - Summary of Future Minimum Operating Lease Commitments (Details) | Sep. 30, 2016USD ($) |
2,017 | $ 679,673 |
2,018 | 502,349 |
2,019 | 468,525 |
2,020 | 450,451 |
2,021 | 252,127 |
Thereafter | 162,663 |
Total | $ 2,515,788 |
Note 9 - Stockholders Equity (D
Note 9 - Stockholders Equity (Details Textual) - USD ($) | Jun. 21, 2017 | Dec. 21, 2016 | Jun. 30, 2016 | Jan. 31, 2016 | Nov. 30, 2012 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 |
Investors [Member] | ||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.55 | |||||||||
Warrants Expiration Period | 5 years | |||||||||
Warrant [Member] | ||||||||||
Share Based Compensation Warrants Outstanding | 150,001 | 150,001 | ||||||||
Stock Issued from Exercise of Warrants | 30,000 | |||||||||
Scenario, Forecast [Member] | ||||||||||
Class of Warrants or Rights, Vested During the Period | 15,000 | 15,000 | ||||||||
Option Plan 2010 Member | Consultant [Member] | ||||||||||
Stock Issued During Period, Shares, Issued for Services | 3,031 | |||||||||
Allocated Share-based Compensation Expense | $ 1,700 | |||||||||
Class of Warrant or Right, Issued During Period | 0 | |||||||||
Share Based Compensation Warrants Outstanding | 180,001 | 180,001 | 150,001 | |||||||
Stock Issued from Exercise of Warrants | 100,000 | |||||||||
Class of Warrant or Right, Grants in Period, Grant-date Fair Value | $ 0.36 | |||||||||
Class of Warrants or Rights, Vesting Period | 1 year | |||||||||
Proceeds from Warrant Exercises | $ 77,100 | |||||||||
Aggregate Intrinsic Value Of Warrants Exercised | $ 102,000 | 102,000 | ||||||||
Allocated Share-based Compensation Expense | $ 175,954 | $ 170,972 | $ 493,458 | $ 442,243 |
Note 9 - Stockholders Equity -
Note 9 - Stockholders Equity - Summary of Warrant Activity (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Outstanding, shares (in shares) | 150,001 | |
Outstanding, weighted average exercise price (in dollars per share) | $ 0.55 | |
Outstanding, Weighted Average Remaining Contractual Life | 1 year 292 days | 1 year 328 days |
Issued for Services (in shares) | 30,000 | |
Issued for Services (in dollars per share) | $ 0.70 | |
Issued for Services | 5 years | |
Outstanding, shares (in shares) | 180,001 | 150,001 |
Outstanding, weighted average exercise price (in dollars per share) | $ 0.57 | $ 0.55 |
Outstanding, aggregate intrinsic value | $ 4,500 | |
Exercisable, Shares (in shares) | 150,001 | |
Exercisable, Weighted Average Exercise Price (in dollars per share) | $ 0.55 | |
Exercisable, Weighted Average Remaining Contractual Life | 1 year 73 days | |
Exercisable, Aggregate Intrinsic Value | $ 4,500 |
Note 10 - Stock Options (Detail
Note 10 - Stock Options (Details Textual) - USD ($) | Jul. 18, 2016 | Jan. 02, 2016 | Jul. 27, 2010 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 |
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 | 2,391,711 | 5,719,069 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 38,127,129 | 2,350,668 | 2,350,668 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | 5 years | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period | 2,560,000 | |||||||
The 2016 Plan [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 1,960,000 | 1,960,000 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 8,000,000 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 1,960,000 | |||||||
Options with Cashless Exercises [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 550,276 | |||||||
Number Of Common Shares Options Exercised | 720,333 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period | 170,057 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value | $ 1,131,371 | |||||||
Options with Cash Exercises [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 404,667 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value | $ 423,837 | |||||||
Proceeds from Stock Options Exercised | $ 198,285 | |||||||
Stock Options Exceeding Grants Limitation Under 2010 Plan [Member] | General and Administrative Expense [Member] | ||||||||
Litigation Settlement, Expense | $ 67,500 | $ 67,500 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 4,310,668 | 4,310,668 | 3,485,168 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 10,391,711 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 0 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 3,525,000 | 1,123,500 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 0.28 | $ 1.19 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period | 2,699,500 | |||||||
Proceeds from Stock Options Exercised | $ 12,250 | $ 198,285 | ||||||
Allocated Share-based Compensation Expense | 175,954 | $ 170,972 | 493,458 | $ 442,243 | ||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized | $ 924,960 | $ 924,960 | ||||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 1 year 219 days |
Note 10 - Stock Options - Summa
Note 10 - Stock Options - Summary of Stock Valuation Assumptions (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Minimum [Member] | ||||
Expected volatility | 81.00% | 81.00% | 107.00% | |
Risk-free interest rate | 0.60% | 0.90% | 0.75% | |
Forfeiture rate | ||||
Dividend yield | ||||
Expected term (in years) | 36 days | 3 years 36 days | ||
Maximum [Member] | ||||
Expected volatility | 104.00% | 102.00% | 109.00% | |
Risk-free interest rate | 0.90% | 1.20% | 0.86% | |
Forfeiture rate | 0.00% | 0.00% | 0.00% | |
Dividend yield | ||||
Expected term (in years) | 3 years 109 days | 3 years 182 days | 3 years 146 days | |
Expected volatility | ||||
Risk-free interest rate | ||||
Forfeiture rate | ||||
Dividend yield | 0.00% | |||
Expected term (in years) |
Note 10 - Stock Options - Sum44
Note 10 - Stock Options - Summary of Stock Option Activity (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Outstanding, Shares (in shares) | 3,485,168 | ||
Outstanding, weighted average exercise price (in dollars per share) | $ 1.31 | ||
Outstanding, weighted average remaining contractual term | 3 years 43 days | 2 years 193 days | |
Outstanding, aggregate intrinsic value | $ 54,100 | $ 63,067 | |
Granted, Shares (in shares) | 3,525,000 | 1,123,500 | |
Granted, Weighted Average Exercise Price (in dollars per share) | $ 0.78 | ||
Forfeited or Expired, Shares (in shares) | (2,699,500) | ||
Forfeited or Expired, Weighted Average Exercise Price (in dollars per share) | $ 0.93 | ||
Outstanding, Shares (in shares) | 4,310,668 | 3,485,168 | |
Outstanding, weighted average exercise price (in dollars per share) | $ 1.11 | $ 1.31 | |
Vested or Expected to Vest, Shares (in shares) | 4,310,668 | ||
Vested or Expected to Vest at September 30, 2016 (in dollars per share) | $ 1.11 | ||
Vested or Expected to Vest at September 30, 2016 | 3 years 43 days | ||
Vested or Expected to Vest at September 30, 2016 | $ 54,100 | ||
Exercisable, Shares (in shares) | 2,042,832 | ||
Exercisable, Weighted Average Exercise Price (in dollars per share) | $ 1.23 | ||
Exercisable, weighted average remaining contractual term | 1 year 335 days | ||
Exercisable, aggregate intrinsic value | $ 31,600 |
Note 10 - Stock Options - Sum45
Note 10 - Stock Options - Summary of the Status of Non-vested Shares (Details) - $ / shares | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Balance, non-vested (in shares) | 1,323,669 | |
Balance, non-vested (in dollars per share) | $ 1.22 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 3,525,000 | 1,123,500 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 0.28 | $ 1.19 |
Vested (in shares) | (1,401,333) | |
Vested (in dollars per share) | $ 0.55 | |
Forfeited or Expired (in shares) | (1,179,500) | |
Forfeited or Expired (in dollars per share) | $ 0.53 | |
Balance, non-vested (in shares) | 2,267,836 | |
Balance, non-vested (in dollars per share) | $ 0.53 |