Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2020 | Nov. 06, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-36378 | |
Entity Registrant Name | PROFIRE ENERGY, INC. | |
Entity Incorporation, State or Country Code | NV | |
Entity Tax Identification Number | 20-0019425 | |
Entity Address, Address Line One | 321 South 1250 West, Suite 1 | |
Entity Address, City or Town | Lindon | |
Entity Address, State or Province | UT | |
Entity Address, Postal Zip Code | 84042 | |
City Area Code | 801 | |
Local Phone Number | 796-5127 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Title of 12(b) Security | Common, $0.001 Par Value | |
Trading Symbol | PFIE | |
Security Exchange Name | NASDAQ | |
Entity Common Stock, Shares Outstanding | 47,959,582 | |
Amendment Flag | false | |
Entity Central Index Key | 0001289636 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 7,919,545 | $ 7,358,856 |
Short-term investments | 2,239,256 | 1,222,053 |
Short-term investments - other | 600,000 | 2,600,000 |
Accounts receivable, net | 2,397,985 | 5,597,701 |
Inventories, net (note 3) | 8,780,571 | 9,571,807 |
Prepaid expenses and other current assets (note 4) | 2,178,682 | 1,672,422 |
Income tax receivable | 465,828 | 77,385 |
Total Current Assets | 24,581,867 | 28,100,224 |
LONG-TERM ASSETS | ||
Long-term investments | 6,450,891 | 7,399,963 |
Financing right-of-use asset | 61,347 | 107,991 |
Property and equipment, net | 11,595,366 | 12,071,019 |
Intangible assets, net | 1,827,553 | 1,989,782 |
Goodwill | 2,579,381 | 2,579,381 |
Total Long-Term Assets | 22,514,538 | 24,148,136 |
TOTAL ASSETS | 47,096,405 | 52,248,360 |
CURRENT LIABILITIES | ||
Accounts payable | 980,601 | 2,633,520 |
Accrued liabilities (note 5) | 1,061,515 | 2,089,391 |
Current financing lease liability (note 6) | 43,024 | 59,376 |
Income taxes payable | 0 | 403,092 |
Total Current Liabilities | 2,085,140 | 5,185,379 |
LONG-TERM LIABILITIES | ||
Net deferred income tax liability | 484,115 | 439,275 |
Long-term financing lease liability (note 6) | 20,927 | 52,120 |
TOTAL LIABILITIES | 2,590,182 | 5,676,774 |
STOCKHOLDERS' EQUITY (note 7) | ||
Preferred stock: $0.001 par value, 10,000,000 shares authorized: no shares issued or outstanding | 0 | 0 |
Common stock: $0.001 par value, 100,000,000 shares authorized: 51,371,960 issued and 47,959,582 outstanding at September 30, 2020, and 50,824,355 issued and 47,411,977 outstanding at December 31, 2019 | 51,371 | 50,824 |
Treasury stock, at cost | (5,353,019) | (5,353,019) |
Additional paid-in capital | 30,208,082 | 29,584,172 |
Accumulated other comprehensive loss | (2,873,765) | (2,415,460) |
Retained earnings | 22,473,554 | 24,705,069 |
TOTAL STOCKHOLDERS' EQUITY | 44,506,223 | 46,571,586 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 47,096,405 | $ 52,248,360 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2020 | Dec. 31, 2019 |
Stock Transactions, Parenthetical Disclosures [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
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) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 51,371,960 | 50,824,355 |
Common stock, shares outstanding (in shares) | 47,959,582 | 47,411,977 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Other Comprehensive Income (Loss) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
REVENUES (note 9) | ||||
Total Revenues | $ 4,000,106 | $ 9,905,761 | $ 15,806,727 | $ 30,862,850 |
COST OF SALES | ||||
Total Cost of Goods Sold | 2,479,683 | 4,736,465 | 9,034,763 | 14,741,644 |
GROSS PROFIT | 1,520,423 | 5,169,296 | 6,771,964 | 16,121,206 |
OPERATING EXPENSES | ||||
General and administrative expenses | 2,247,614 | 3,256,023 | 8,273,925 | 9,984,251 |
Research and development | 433,800 | 641,716 | 1,073,074 | 1,503,645 |
Depreciation and amortization expense | 168,507 | 130,105 | 496,976 | 357,238 |
Total Operating Expenses | 2,849,921 | 4,027,844 | 9,843,975 | 11,845,134 |
INCOME (LOSS) FROM OPERATIONS | (1,329,498) | 1,141,452 | (3,072,011) | 4,276,072 |
OTHER INCOME (EXPENSE) | ||||
Gain on sale of fixed assets | 36,483 | 34,826 | 193,938 | 73,166 |
Other expense | (48,349) | (2,065) | (49,667) | (3,029) |
Interest income | 103,364 | 38,478 | 255,289 | 216,068 |
Total Other Income | 91,498 | 71,239 | 399,560 | 286,205 |
INCOME (LOSS) BEFORE INCOME TAXES | (1,238,000) | 1,212,691 | (2,672,451) | 4,562,277 |
INCOME TAX BENEFIT (EXPENSE) | 180,252 | (290,943) | 440,936 | (986,407) |
NET INCOME (LOSS) | (1,057,748) | 921,748 | (2,231,515) | 3,575,870 |
OTHER COMPREHENSIVE INCOME (LOSS) | ||||
Foreign currency translation gain (loss) | 233,170 | (91,397) | (336,986) | 160,453 |
Unrealized gains (losses) on investments | (36,840) | (12,386) | (121,319) | 105,861 |
Total Other Comprehensive Income (Loss) | 196,330 | (103,783) | (458,305) | 266,314 |
COMPREHENSIVE INCOME (LOSS) | $ (861,418) | $ 817,965 | $ (2,689,820) | $ 3,842,184 |
BASIC EARNINGS (LOSS) PER SHARE (in dollars per share) | $ (0.02) | $ 0.02 | $ (0.05) | $ 0.08 |
FULLY DILUTED EARNINGS (LOSS) PER SHARE (in dollars per share) | $ (0.02) | $ 0.02 | $ (0.05) | $ 0.07 |
BASIC WEIGHTED AVG NUMBER OF SHARES OUTSTANDING (in shares) | 47,933,318 | 47,739,192 | 47,717,114 | 47,509,357 |
FULLY DILUTED WEIGHTED AVG NUMBER OF SHARES OUTSTANDING (in shares) | 47,933,318 | 48,469,246 | 47,717,114 | 48,259,900 |
Product | ||||
REVENUES (note 9) | ||||
Total Revenues | $ 3,517,280 | $ 9,251,947 | $ 14,377,377 | $ 29,009,837 |
COST OF SALES | ||||
Total Cost of Goods Sold | 2,141,888 | 4,326,335 | 7,919,959 | 13,465,989 |
Service | ||||
REVENUES (note 9) | ||||
Total Revenues | 482,826 | 653,814 | 1,429,350 | 1,853,013 |
COST OF SALES | ||||
Total Cost of Goods Sold | $ 337,795 | $ 410,130 | $ 1,114,804 | $ 1,275,655 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($) | Total | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Retained Earnings |
Balance, beginning of period (in shares) at Dec. 31, 2018 | 47,932,305 | |||||
Balance, beginning of period at Dec. 31, 2018 | $ 45,255,859 | $ 49,708 | $ 28,027,742 | $ (2,895,683) | $ (2,609,485) | $ 22,683,577 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock based compensation | 66,714 | 66,714 | ||||
Stock issued in exercise of stock options (in shares) | 2,483 | |||||
Stock issued in exercise of stock options | 0 | $ 2 | (2) | |||
Stock issued in settlement of RSUs (in shares) | 148,723 | |||||
Stock issued in settlement of RSUs | 379,861 | $ 149 | 379,712 | |||
Tax withholdings paid related to stock based compensation | (143,022) | (143,022) | ||||
Treasury stock repurchased (in shares) | (775,287) | |||||
Treasury stock repurchased | (1,333,578) | (1,333,578) | ||||
Foreign currency translation | 149,415 | 149,415 | ||||
Unrealized gains (losses) on investments | 68,752 | 68,752 | ||||
Net loss | 1,668,618 | 1,668,618 | ||||
Balance, end of period (in shares) at Mar. 31, 2019 | 47,308,224 | |||||
Balance, end of period at Mar. 31, 2019 | 46,112,619 | $ 49,859 | 28,331,144 | (2,677,516) | (3,943,063) | 24,352,195 |
Balance, beginning of period (in shares) at Dec. 31, 2018 | 47,932,305 | |||||
Balance, beginning of period at Dec. 31, 2018 | 45,255,859 | $ 49,708 | 28,027,742 | (2,895,683) | (2,609,485) | 22,683,577 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock Issued During Period, Value, Acquisitions | 1,020,000 | |||||
Net loss | 3,575,870 | |||||
Balance, end of period (in shares) at Sep. 30, 2019 | 47,618,604 | |||||
Balance, end of period at Sep. 30, 2019 | 48,430,295 | $ 50,762 | 29,608,685 | (2,629,369) | (4,859,230) | 26,259,447 |
Balance, beginning of period (in shares) at Mar. 31, 2019 | 47,308,224 | |||||
Balance, beginning of period at Mar. 31, 2019 | 46,112,619 | $ 49,859 | 28,331,144 | (2,677,516) | (3,943,063) | 24,352,195 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock based compensation | 297,127 | 297,127 | ||||
Stock issued in exercise of stock options (in shares) | 9,174 | |||||
Stock issued in exercise of stock options | 6,850 | $ 9 | 6,841 | |||
Stock issued in settlement of RSUs (in shares) | 148,794 | |||||
Stock issued in settlement of RSUs | 0 | $ 149 | (149) | |||
Tax withholdings paid related to stock based compensation | (41,411) | (41,411) | ||||
Foreign currency translation | 102,435 | 102,435 | ||||
Unrealized gains (losses) on investments | 49,495 | 49,495 | ||||
Net loss | 985,504 | 985,504 | ||||
Balance, end of period (in shares) at Jun. 30, 2019 | 47,466,192 | |||||
Balance, end of period at Jun. 30, 2019 | 47,512,619 | $ 50,017 | 28,593,552 | (2,525,586) | (3,943,063) | 25,337,699 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock based compensation | (5,571) | (5,571) | ||||
Stock issued in exercise of stock options (in shares) | 4,836 | |||||
Stock issued in exercise of stock options | 2,020 | $ 5 | 2,015 | |||
Stock issued in settlement of RSUs (in shares) | 546 | |||||
Stock issued in settlement of RSUs | 0 | $ 1 | (1) | |||
Stock issues during acquisition (in shares) | 739,130 | |||||
Stock Issued During Period, Value, Acquisitions | 1,020,000 | $ 739 | 1,019,261 | |||
Tax withholdings paid related to stock based compensation | (571) | (571) | ||||
Treasury stock repurchased (in shares) | (592,100) | |||||
Treasury stock repurchased | (916,167) | (916,167) | ||||
Foreign currency translation | (91,397) | (91,397) | ||||
Unrealized gains (losses) on investments | (12,386) | (12,386) | ||||
Net loss | 921,748 | 921,748 | ||||
Balance, end of period (in shares) at Sep. 30, 2019 | 47,618,604 | |||||
Balance, end of period at Sep. 30, 2019 | 48,430,295 | $ 50,762 | 29,608,685 | (2,629,369) | (4,859,230) | 26,259,447 |
Balance, beginning of period (in shares) at Dec. 31, 2019 | 47,411,977 | |||||
Balance, beginning of period at Dec. 31, 2019 | 46,571,586 | $ 50,824 | 29,584,172 | (2,415,460) | (5,353,019) | 24,705,069 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock based compensation | 66,348 | 66,348 | ||||
Stock issued in exercise of stock options (in shares) | 2,000 | |||||
Stock issued in exercise of stock options | 2,020 | $ 2 | 2,018 | |||
Stock issued in settlement of RSUs (in shares) | 271,684 | |||||
Stock issued in settlement of RSUs | 419,373 | $ 272 | 419,101 | |||
Tax withholdings paid related to stock based compensation | (148,879) | (148,879) | ||||
Foreign currency translation | (945,423) | (945,423) | ||||
Unrealized gains (losses) on investments | (157,354) | (157,354) | ||||
Net loss | (365,264) | (365,264) | ||||
Balance, end of period (in shares) at Mar. 31, 2020 | 47,685,661 | |||||
Balance, end of period at Mar. 31, 2020 | 45,442,407 | $ 51,098 | 29,922,760 | (3,518,237) | (5,353,019) | 24,339,805 |
Balance, beginning of period (in shares) at Dec. 31, 2019 | 47,411,977 | |||||
Balance, beginning of period at Dec. 31, 2019 | 46,571,586 | $ 50,824 | 29,584,172 | (2,415,460) | (5,353,019) | 24,705,069 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock Issued During Period, Value, Acquisitions | 0 | |||||
Net loss | (2,231,515) | |||||
Balance, end of period (in shares) at Sep. 30, 2020 | 47,959,582 | |||||
Balance, end of period at Sep. 30, 2020 | 44,506,223 | $ 51,371 | 30,208,082 | (2,873,765) | (5,353,019) | 22,473,554 |
Balance, beginning of period (in shares) at Mar. 31, 2020 | 47,685,661 | |||||
Balance, beginning of period at Mar. 31, 2020 | 45,442,407 | $ 51,098 | 29,922,760 | (3,518,237) | (5,353,019) | 24,339,805 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock based compensation | 183,850 | 183,850 | ||||
Stock issued in settlement of RSUs (in shares) | 227,454 | |||||
Stock issued in settlement of RSUs | 0 | $ 227 | (227) | |||
Foreign currency translation | 375,267 | 375,267 | ||||
Unrealized gains (losses) on investments | 72,875 | 72,875 | ||||
Net loss | (808,503) | (808,503) | ||||
Balance, end of period (in shares) at Jun. 30, 2020 | 47,913,115 | |||||
Balance, end of period at Jun. 30, 2020 | 45,265,896 | $ 51,325 | 30,106,383 | (3,070,095) | (5,353,019) | 23,531,302 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock based compensation | 101,745 | 101,745 | ||||
Stock issued in settlement of RSUs (in shares) | 46,467 | |||||
Stock issued in settlement of RSUs | 0 | $ 46 | (46) | |||
Foreign currency translation | 233,170 | 233,170 | ||||
Unrealized gains (losses) on investments | (36,840) | (36,840) | ||||
Net loss | (1,057,748) | (1,057,748) | ||||
Balance, end of period (in shares) at Sep. 30, 2020 | 47,959,582 | |||||
Balance, end of period at Sep. 30, 2020 | $ 44,506,223 | $ 51,371 | $ 30,208,082 | $ (2,873,765) | $ (5,353,019) | $ 22,473,554 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
OPERATING ACTIVITIES | ||
Net loss | $ (2,231,515) | $ 3,575,870 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization expense | 860,028 | 732,396 |
Gain on sale of fixed assets | (193,938) | (73,166) |
Bad debt expense | 182,179 | 255,943 |
Stock awards issued for services | 351,943 | 358,270 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 3,404,439 | 1,244,104 |
Income taxes receivable/payable | (404,304) | (890,523) |
Inventories | 714,245 | 1,711,446 |
Prepaid expenses | 43,099 | (586,576) |
Deferred tax asset/liability | 44,840 | 219,138 |
Accounts payable and accrued liabilities | (2,648,339) | 855,207 |
Net Cash Provided by Operating Activities | 122,677 | 7,402,109 |
INVESTING ACTIVITIES | ||
Proceeds from sale of equipment | 16,313 | 75,310 |
Sale of investments | 1,814,070 | 2,476,227 |
Purchase of fixed assets | (1,146,400) | (3,309,191) |
Payments for acquisitions, net of cash acquired | 0 | (4,322,722) |
Net Cash Provided by (Used in) Investing Activities | 683,983 | (5,080,376) |
FINANCING ACTIVITIES | ||
Value of equity awards surrendered by employees for tax liability | (148,879) | (185,004) |
Cash received in exercise of stock options | 2,020 | 8,870 |
Purchase of treasury stock | 0 | (2,249,745) |
Principal paid towards lease liability | (45,965) | (53,190) |
Net Cash Used in Financing Activities | (192,824) | (2,479,069) |
Effect of exchange rate changes on cash | (53,147) | (468) |
NET CHANGE IN CASH | 560,689 | (157,804) |
CASH AT BEGINNING OF PERIOD | 7,358,856 | 10,101,932 |
CASH AT END OF PERIOD | 7,919,545 | 9,944,128 |
CASH PAID FOR: | ||
Interest | 4,946 | 4,469 |
Income taxes | 402,510 | 1,793,281 |
NON-CASH FINANCING AND INVESTING ACTIVITIES | ||
Common stock issued in settlement of accrued bonuses | 419,373 | 379,861 |
Issuance of common stock - Midflow acquisition | $ 0 | $ 1,020,000 |
CONDENSED FINANCIAL STATEMENTS
CONDENSED FINANCIAL STATEMENTS | 9 Months Ended |
Sep. 30, 2020 | |
Condensed Financial Information Disclosure [Abstract] | |
CONDENSED FINANCIAL STATEMENTS | CONDENSED FINANCIAL STATEMENTS Except where the context otherwise requires, all references herein to the "Company," "Profire," "we," "us," "our," or similar words and phrases are to Profire Energy, Inc. and its wholly owned subsidiaries, taken together. The accompanying financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, stockholders' equity, and cash flows at September 30, 2020 and for all periods presented herein have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("US GAAP") have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the Company's audited financial statements contained in its annual report on Form 10-K for the year ended December 31, 2019 ("Form 10-K"). The results of operations for the three and nine month periods ended September 30, 2020 and 2019 are not necessarily indicative of the operating results for the full years. |
ORGANIZATION AND SUMMARY OF SIG
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization and Line of Business This Organization and Summary of Significant Accounting Policies of the Company is presented to assist in understanding the Company's condensed consolidated financial statements. The Company's accounting policies conform to "US GAAP." The Company provides burner-management products, solutions and services for the oil and gas industry primarily in the US and Canadian markets. Significant Accounting Policies There have been no changes to the significant accounting policies of the Company from the information provided in Note 1 of the Notes to the Consolidated Financial Statements in the Company's most recent Form 10-K. Recent Accounting Pronouncements The Company has evaluated all recent accounting pronouncements and determined that the adoption of pronouncements applicable to the Company has not had or is not expected to have a material impact on the Company's financial position, results of operations or cash flows. |
INVENTORIES
INVENTORIES | 9 Months Ended |
Sep. 30, 2020 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES Inventories consisted of the following at each balance sheet date: As of September 30, 2020 December 31, 2019 Raw materials $ 328,945 $ — Finished goods 9,494,074 10,517,858 Work in process — — Subtotal 9,823,019 10,517,858 Reserve for obsolescence (1,042,448) (946,051) Total $ 8,780,571 $ 9,571,807 |
PREPAID EXPENSES AND OTHER CURR
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 9 Months Ended |
Sep. 30, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | PREPAID EXPENSES AND OTHER CURRENT ASSETS Prepaid expenses and other current assets consisted of the following at each balance sheet date: As of September 30, 2020 December 31, 2019 Assets classified as held for sale 791,180 — Prepaid Inventory 659,084 1,291,577 Prepaid insurance 275,623 133,611 Vehicle trade-in credits 156,607 — Interest receivables 64,600 80,609 Other 231,588 166,625 Total $ 2,178,682 $ 1,672,422 In the first quarter of 2020, we completed the construction of a new office building and research and development facility in Acheson, Canada. As a result, during the second quarter of 2020 we started the process of selling our old office building in Spruce Grove, Canada. In the table above, the assets classified as held for sale as of September 30, 2020, consist of this old office building which we intend to sell within a one year period from the most recent balance sheet date. The amount shown above is recorded at cost, less accumulated depreciation. |
ACCRUED LIABILITIES
ACCRUED LIABILITIES | 9 Months Ended |
Sep. 30, 2020 | |
Other Liabilities Disclosure [Abstract] | |
ACCRUED LIABILITIES | ACCRUED LIABILITIES Accrued liabilities consisted of the following at each balance sheet date: As of September 30, 2020 December 31, 2019 Employee-related payables $ 792,050 $ 1,657,826 Warranty liabilities 98,354 166,301 Inventory-related payables 80,641 — Acquisition liabilities — 162,907 Other 90,470 102,357 Total $ 1,061,515 $ 2,089,391 |
LEASES
LEASES | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
LEASES | LEASES We have leases for office equipment and office space. The leases for office equipment are classified as financing leases and the typical term is 36 months. We have the option to extend most office equipment leases, but we do not intend to do so. Accordingly, no extensions have been recognized in the right-of-use asset or lease liability. The office equipment lease payments are not variable and the lease agreements do not include any non-lease components, residual value guarantees, or restrictions. There are no interest rates implicit in the office equipment lease agreements, so we have used our incremental borrowing rate to determine the discount rate to be applied to our financing leases. The weighted average discount rate applied to our financing leases is 4.50% and the weighted average remaining lease term is 17.8 months. The following table shows the components of financing lease cost: Financing Lease Cost For the Three Months Ended September 30, 2020 For the Nine Months Ended September 30, 2020 Amortization of right-of-use assets $ 11,567 $ 45,064 Interest on lease liabilities 699 4,946 Total financing lease cost $ 12,266 $ 50,010 The following table reconciles future minimum lease payments to the discounted finance lease liability: Years ending December 31, Amount 2020 - remaining $ 12,506 2021 40,921 2022 12,803 2023 — 2024 — Thereafter — Total future minimum lease payments $ 66,230 Less: Amount representing interest 2,279 Present value of future payments $ 63,951 Current portion $ 43,024 Long-term portion $ 20,927 Because our office space leases are short-term, we have elected not to recognize them on our balance sheet under the short-term recognition exemption. During the three and nine months ended September 30, 2020, we recognized $19,189 and $57,719, respectively, in short-term lease costs associated with office space leases. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | STOCKHOLDERS' EQUITY As of September 30, 2020 and December 31, 2019, the Company held 3,412,378 shares of its common stock in treasury at a total cost of $5,353,019, respectively. As of September 30, 2020 , the Company had 275,203 restricted stock units, 252,701 performance based restricted stock units, and 934,700 stock options outstanding with $593,361 in remaining compensation expense to be recognized over the next 2.3 years. 2020 EIP and LTIP Due to economic uncertainties including those caused by the COVID-19 pandemic, the Board of Directors of the Company (the "Board"), with the support of the Company's executives, has elected to not adopt an executive incentive plan ("EIP") or long-term incentive plan ("LTIP") for 2020. The Board and executives believe this is an appropriate short-term measure that will help to align the Company's cost structure with the current extraordinary conditions affecting the industry in which we operate. 2019 EIP On April 22, 2019, the Board approved the 2019 Executive Incentive Plan (the “2019 EIP”) for Brenton W. Hatch, the Company’s then President and Chief Executive Officer, Ryan W. Oviatt, the Company’s Chief Financial Officer, Cameron M. Tidball, the Company’s Chief Business Development Officer, Jay G. Fugal, the Company’s Vice President of Operations, and Patrick D. Fisher, the Company’s Vice President of Product Development. The 2019 EIP provided for the potential award of bonuses to the participants based on the Company’s financial performance in fiscal year 2019. On March 4, 2020, the Company's Board of Directors approved a one-time executive bonus in the amount of $828,787 for meeting targets pursuant to the 2019 EIP. Half of the bonus was paid in cash and half of the bonus was settled by issuing 343,748 shares of common stock under the Company's 2014 Equity Incentive Plan, as amended (the "2014 Plan") which was fully vested on the date of grant. Participants were eligible to receive bonuses based upon reaching or exceeding performance goals established by the Board or its Compensation Committee for fiscal 2019. The performance goals in the 2019 EIP were based on the Company’s total revenue, net income, free cash flow, and product development milestones. Each of these performance goals were weighted 25% in calculating bonus amounts. 2019 LTIP On April 22, 2019 the Board also adopted the 2019 Long-Term Incentive plan (the "2019 LTIP") for certain of the Company's executive officers. The 2019 LTIP consists of total awards of up to 66,213 restricted stock units (“RSUs”) to Mr. Oviatt, up to 51,646 RSUs to Mr. Tidball, up to 35,313 RSUs to Mr. Fugal, and up to 24,862 RSUs to Mr. Fisher pursuant to two separate Restricted Stock Unit Award Agreements that were entered into between the Company and each participant under the 2014 Plan. One agreement covers 33% of each award recipient’s RSU's that are subject to time-based vesting, and the other agreement covers the remaining 67% of such award recipient’s RSU's that may vest based on performance metrics. Upon vesting, the award agreements entitle the award recipients to receive one share of the Company’s common stock for each vested RSU. The vesting period of the 2019 LTIP began on January 1, 2019 and terminates on December 31, 2021. 2017 LTIP On March 4, 2020, the Board approved a one-time executive bonus that was settled by issuing 16,689 shares of common stock for meeting targets pursuant to the previously announced "2017 Long-Term Incentive Plan", which shares were issued under the 2014 Plan. These shares were fully vested as of March 4, 2020. 2020 RSUs On June 17, 2020, pursuant to the annual renewal of Director compensation, the Board approved a grant of 270,966 RSUs to Independent Directors. Half of the RSUs vested immediately on the date of grant and the remaining 50% of the RSUs will vest on the first anniversary of the grant date or at the Company's next Annual Meeting of Stockholders, whichever is earlier. The awards will result in total compensation expense of $252,000 to be recognized over the vesting period. On July 30, 2020 Mr. Arlen B. Crouch notified the Chairman of the Board of the Company of his decision to resign, effective August 3, 2020, from his position as a member of the Board. Mr. Crouch’s resignation did not result from any disagreements with Management or the Board. On Mr. Crouch's resignation date all of his unvested RSUs were forfeited and the related compensation expense will be recaptured. On July 30, 2020, the Board appointed Colleen Larkin Bell to serve as a director to fill the vacancy resulting from Mr. Crouch’s resignation, effective August 3, 2020. Ms. Bell will serve as Chair of the Nominating Committee and will serve on the Audit and Compensation Committees. As compensation for her service on the Board and Committee Assignments, on August 21, 2020, the board approved a grant of 92,934 RSUs. Half of the RSUs vested immediately on the date of the grant and the remaining 50% of the RSUs will vest on the first anniversary of the grant date. The awards will result in total compensation expense of $72,953 to be recognized over the vesting period. 2019 RSUs On March 14, 2019, the Board approved a grant of 85,000 RSUs to various employees. The awards vest annually over five years and will result in a total compensation expense of $149,600 to be recognized over the vesting period. On June 12, 2019, pursuant to the annual renewal of Director compensation, the Board approved a grant of 183,942 RSUs to Independent Directors. Half of the RSUs vested immediately on the date of grant and the remaining 50% of the RSUs vested on the first anniversary of the grant date. The awards have resulted in total compensation expense of $252,000 that was recognized over the vesting period. 2020 Stock Options On March 17, 2020 (the "March Grant Date"), the Board approved a grant of options to purchase 115,200 shares of the Company's common stock at a strike price of $0.81 to various employees (the "March 2020 Options"). The Options terminate four years from the March Grant Date and the March 2020 Options become exercisable as to one-third of the shares of common stock covered thereby on each anniversary of the March Grant Date for the next three years following the March Grant Date. The March 2020 Options will result in a total compensation expense of $40,280 to be recognized over the vesting period. On July 2, 2020 (the "July Grant Date"), upon the recommendation of the Compensation Committee, the Board approved the grant of a non-qualified stock option to purchase 100,000 shares of the Company’s common stock to each of Mr. Oviatt and Mr. Tidball under the Company’s 2014 Plan and pursuant to the standard form of Notice of Stock Option Grant and Stock Option Agreement under the plan (the “July Options”). The exercise price of the July Options is equal to the closing bid price of the Company's common stock on July 2, 2020 or $0.8439 per share. The July Options shall vest equally over a period of three years from the July Grant Date. Vesting occurs on the anniversary date of the July Grant Date, with one-third of the total shares vesting on each of the first three anniversaries of the July Grant Date. Vesting is contingent upon the executive’s continued employment with the Company on each applicable vesting date. The July Options expire on July 2, 2024. These July Options will result in a total compensation expense of $79,431 to be recognized over the vesting period. On August 21, 2020 (the "August Grant Date"), the Board approved a grant of options to purchase 630,000 shares of the Company's common stock at a strike price of $0.785 to various employees (the "August Options"). The Options terminate four years from the August Grant Date and the August Options shall become exercisable as to one-third of the shares of common stock covered thereby on each anniversary of the August Grant Date for the next three years following the August Grant Date. The August Options will result in a total compensation expense of $233,111 to be recognized over the vesting period. |
ACQUISITIONS
ACQUISITIONS | 9 Months Ended |
Sep. 30, 2020 | |
Business Combinations [Abstract] | |
ACQUISITIONS | ACQUISITIONS Millstream Energy Products On June 18, 2019, our wholly-owned subsidiary, Profire Combustion, Inc., acquired substantially all the assets of Millstream Energy Products, LTD., a Canadian corporation ("MEP"). MEP is a privately-held Canadian company that developed a line of high-performance burners, economy burners, flame arrestor housings, secondary air control plates, and other related combustion components. MEP’s full line of products became available for sale by Profire’s existing sales team immediately after closing of the transaction. These products complement our burner-management system (BMS) product offerings and enable us to supply a larger portion of the total BMS package sale to our customers. The acquisition was accounted for as a business combination in accordance with ASC 805, Business Combinations . The purchase price of $2,219,782 was funded through existing cash. A portion of the cash purchase amount equal to $140,257 was held back for 6 months pending satisfaction of seller obligations under the purchase agreement and was paid to the seller on February 20, 2020. The seller is also entitled to receive a 4.5% annual royalty on proprietary MEP product revenue generated during the next five years period from June 18, 2019 to June 18, 2024. Profire hired a valuation firm to perform the purchase price allocation based on net assets received and the price paid. Based on the fair value of net assets at the time of purchase, the Company recorded intangible assets in the amount of $990,000 and goodwill of $17,681. Intangible assets include customer relationships, the trade name and developed technology. The purchase price calculation is a follows: Cash $ 2,079,525 Liabilities 140,257 $ 2,219,782 The following table summarizes the estimated fair value of the assets acquired and liabilities assumed at the date of purchase: Accounts receivable $ 207,145 Inventory 1,119,143 Intangible assets 990,000 Goodwill 17,681 Accounts payable (114,187) $ 2,219,782 Transaction and other costs directly related to the acquisition of MEP, consisting primarily of professional fees and integration expenses, have amounted to approximately $136,811, were expensed as incurred and are included in general and administrative expenses. Midflow Services On August 5, 2019, we acquired all of the outstanding membership interests of Midflow Services, LLC ("Midflow"). Midflow provides packaged combustion solutions and services to the upstream and midstream oil and gas industry. The Midflow acquisition was accounted for as a business combination in accordance with ASC 805, Business Combinations . The purchase price of $3,439,371 was funded through a combination of existing cash and shares of the Company's common stock. The cash portion of the purchase price includes $500,000 placed in an escrow account for 12 months pending satisfaction of certain obligations under the purchase agreement which was settled in August 2020. Profire hired a valuation firm to perform the purchase price allocation based on the net assets received and the price paid. Based on the fair value of the net assets at the time of purchase, the Company recorded intangible assets in the amount of $1,110,000 and goodwill of $1,564,000. Intangible assets include customer relationships, the trade name and developed technology. The purchase price calculation is as follows: Cash $ 2,419,371 Stock 1,020,000 $ 3,439,371 The following table summarizes the estimated fair value of the assets acquired and liabilities assumed at the date of purchase: Cash $ 172,850 Accounts receivable 324,989 Inventory 269,746 Prepaid expenses 13,180 Property and equipment 126,000 Intangible assets 1,110,000 Goodwill 1,564,000 Accounts payable (134,956) Accrual liabilities (6,438) $ 3,439,371 Transaction costs directly related to the acquisition of Midflow, consisting primarily of professional fees and integration expenses, amounted to approximately $44,087. All of these costs were expensed as incurred and are included in general and administrative expenses. |
REVENUE
REVENUE | 9 Months Ended |
Sep. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | REVENUEPerformance Obligations Our performance obligations include providing product and servicing our product. We recognize product revenue performance obligations in most cases when the product is delivered to the customer. Occasionally, if we are shipping the product on a customer’s account, we recognize revenue when the product has been shipped. At that point in time, the control of the product is transferred to the customer. When we perform service work, we apply the practical expedient that allows us to recognize service revenue when we have the right to invoice the customer for the work completed. We do not engage in transactions acting as an agent. The time needed to complete our performance obligations varies based on the size of the project; however, we typically satisfy our performance obligations within a few months of entering into the applicable sales contract or service contract. Our customers have the right to return certain unused and unopened products within 90 days for a restocking fee. We provide a warranty on some of our products ranging from 90 days to 2 years, depending on the product. See note 5 for the amount accrued for expected returns and warranty claims as of September 30, 2020. Contract Balances We have elected to use the practical expedient in ASC 340-40-25-4 (regarding recognition of the incremental costs of obtaining a contract) for costs related to contracts that are estimated to be completed within one year. All of our current sales contracts and service contracts are expected to be completed within one year, and as a result, we have not recognized a contract asset account. If we had chosen not to use this practical expedient, we would not expect a material difference in the contract balances. We also did not have any material contract liabilities because we typically do not receive payments in advance of recognizing revenue. Disaggregation of Revenue All revenue recognized in the income statement is considered to be revenue from contracts with customers. The table below shows revenue by category: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2020 2019 2020 2019 Electronics $ 1,406,681 $ 3,880,542 $ 5,708,436 $ 12,632,170 Manufactured 139,057 519,990 682,149 1,456,789 Re-Sell 1,971,542 4,851,415 7,986,792 14,920,878 Service 482,826 653,814 1,429,350 1,853,013 Total Revenue $ 4,000,106 $ 9,905,761 $ 15,806,727 $ 30,862,850 |
BASIC AND DILUTED EARNINGS PER
BASIC AND DILUTED EARNINGS PER SHARE | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
BASIC AND DILUTED EARNINGS PER SHARE | BASIC AND DILUTED EARNINGS PER SHARE The following table is a reconciliation of the numerator and denominators used in the earnings per share calculation: For the Three Months Ended September 30, 2020 2019 Income (loss) (Numerator) Weighted Average Shares (Denominator) Per-Share Income (Numerator) Weighted Average Shares (Denominator) Per-Share Basic EPS Net income (loss) available to common stockholders $ (1,057,748) 47,933,318 $ (0.02) $ 921,748 47,739,192 $ 0.02 Effect of Dilutive Securities Stock options & RSUs — — — 730,054 Diluted EPS Net income (loss) available to common stockholders + assumed conversions $ (1,057,748) 47,933,318 $ (0.02) $ 921,748 48,469,246 $ 0.02 RSUs to obtain 527,904 shares of common stock were outstanding during the three months ended September 30, 2020, but were not included in the computation of diluted EPS because the impact of these shares would be antidilutive. These RSUs, which expire between March 2021 and March 2024, were still outstanding at September 30, 2020. Stock options to purchase 244,600 shares of common stock at a weighted average price of $3.88 per share were outstanding during the three months ended September 30, 2019, but were not included in the computation of diluted EPS because the impact of these shares would be antidilutive. These options, which expired between November 2019 and May 2020, were still outstanding at September 30, 2019. For the Nine Months Ended September 30, 2020 2019 Income (loss) (Numerator) Weighted Average Shares (Denominator) Per-Share Income (Numerator) Weighted Average Shares (Denominator) Per-Share Basic EPS Net income (loss) available to common stockholders $ (2,231,515) 47,717,114 $ (0.05) $ 3,575,870 47,509,357 $ 0.08 Effect of Dilutive Securities Stock options & RSUs — — — 750,543 Diluted EPS Net income (loss) available to common stockholders + assumed conversions $ (2,231,515) 47,717,114 $ (0.05) $ 3,575,870 48,259,900 $ 0.07 Stock options and RSUs to purchase 666,714 shares of common stock at a weighted average price of $0.85 per share were outstanding during the nine months ended September 30, 2020, but were not included in the computation of diluted EPS because the impact of these shares would be antidilutive. These stock options and RSUs, which expire between March 2021 and August 2024, were still outstanding at September 30, 2020. Stock options to purchase 244,600 shares of common stock at a weighted average price of $3.88 per share were outstanding during the nine months ended September 30, 2019, but were not included in the computation of diluted EPS because the impact of these shares would be antidilutive. These options, which expired between November 2019 and May 2020, were still outstanding at September 30, 2019. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION The Company operates in the United States and Canada. Segment information for these geographic areas is as follows: For the Three Months Ended September 30, For the Nine Months Ended September 30, Sales 2020 2019 2020 2019 Canada $ 755,701 $ 1,890,592 $ 2,365,118 $ 3,883,010 United States 3,244,405 8,015,169 13,441,609 26,979,840 Total Consolidated $ 4,000,106 $ 9,905,761 $ 15,806,727 $ 30,862,850 For the Three Months Ended September 30, For the Nine Months Ended September 30, Profit (Loss) 2020 2019 2020 2019 Canada $ (473,395) $ (242,182) $ (1,059,627) $ (1,171,424) United States (584,353) 1,163,930 (1,171,888) 4,747,294 Total Consolidated $ (1,057,748) $ 921,748 $ (2,231,515) $ 3,575,870 As of Long-Lived Assets September 30, 2020 December 31, 2019 Canada $ 5,733,180 $ 6,068,061 United States 16,781,358 18,080,075 Total Consolidated $ 22,514,538 $ 24,148,136 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2020 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTSIn accordance with ASC 855 "Subsequent Events," Company Management reviewed all material events through the date this report was issued and there were no subsequent events to report. |
ORGANIZATION AND SUMMARY OF S_2
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements The Company has evaluated all recent accounting pronouncements and determined that the adoption of pronouncements applicable to the Company has not had or is not expected to have a material impact on the Company's financial position, results of operations or cash flows. |
Revenue | Performance Obligations Our performance obligations include providing product and servicing our product. We recognize product revenue performance obligations in most cases when the product is delivered to the customer. Occasionally, if we are shipping the product on a customer’s account, we recognize revenue when the product has been shipped. At that point in time, the control of the product is transferred to the customer. When we perform service work, we apply the practical expedient that allows us to recognize service revenue when we have the right to invoice the customer for the work completed. We do not engage in transactions acting as an agent. The time needed to complete our performance obligations varies based on the size of the project; however, we typically satisfy our performance obligations within a few months of entering into the applicable sales contract or service contract. Our customers have the right to return certain unused and unopened products within 90 days for a restocking fee. We provide a warranty on some of our products ranging from 90 days to 2 years, depending on the product. See note 5 for the amount accrued for expected returns and warranty claims as of September 30, 2020. Contract Balances We have elected to use the practical expedient in ASC 340-40-25-4 (regarding recognition of the incremental costs of obtaining a contract) for costs related to contracts that are estimated to be completed within one year. All of our current sales contracts and service contracts are expected to be completed within one year, and as a result, we have not recognized a contract asset account. If we had chosen not to use this practical expedient, we would not expect a material difference in the contract balances. We also did not have any material contract liabilities because we typically do not receive payments in advance of recognizing revenue. |
INVENTORY (Tables)
INVENTORY (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventories consisted of the following at each balance sheet date: As of September 30, 2020 December 31, 2019 Raw materials $ 328,945 $ — Finished goods 9,494,074 10,517,858 Work in process — — Subtotal 9,823,019 10,517,858 Reserve for obsolescence (1,042,448) (946,051) Total $ 8,780,571 $ 9,571,807 |
PREPAID EXPENSES AND OTHER CU_2
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Other Current Assets | Prepaid expenses and other current assets consisted of the following at each balance sheet date: As of September 30, 2020 December 31, 2019 Assets classified as held for sale 791,180 — Prepaid Inventory 659,084 1,291,577 Prepaid insurance 275,623 133,611 Vehicle trade-in credits 156,607 — Interest receivables 64,600 80,609 Other 231,588 166,625 Total $ 2,178,682 $ 1,672,422 |
ACCRUED LIABILITIES (Tables)
ACCRUED LIABILITIES (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of Accrued Liabilities | Accrued liabilities consisted of the following at each balance sheet date: As of September 30, 2020 December 31, 2019 Employee-related payables $ 792,050 $ 1,657,826 Warranty liabilities 98,354 166,301 Inventory-related payables 80,641 — Acquisition liabilities — 162,907 Other 90,470 102,357 Total $ 1,061,515 $ 2,089,391 |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Components of Financing Lease Cost | The following table shows the components of financing lease cost: Financing Lease Cost For the Three Months Ended September 30, 2020 For the Nine Months Ended September 30, 2020 Amortization of right-of-use assets $ 11,567 $ 45,064 Interest on lease liabilities 699 4,946 Total financing lease cost $ 12,266 $ 50,010 |
Future Minimum Lease Payments to Discounted Finance Lease Liability | The following table reconciles future minimum lease payments to the discounted finance lease liability: Years ending December 31, Amount 2020 - remaining $ 12,506 2021 40,921 2022 12,803 2023 — 2024 — Thereafter — Total future minimum lease payments $ 66,230 Less: Amount representing interest 2,279 Present value of future payments $ 63,951 Current portion $ 43,024 Long-term portion $ 20,927 |
ACQUISITION (Tables)
ACQUISITION (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Business Combinations [Abstract] | |
Business Combinations | The purchase price calculation is a follows: Cash $ 2,079,525 Liabilities 140,257 $ 2,219,782 The following table summarizes the estimated fair value of the assets acquired and liabilities assumed at the date of purchase: Accounts receivable $ 207,145 Inventory 1,119,143 Intangible assets 990,000 Goodwill 17,681 Accounts payable (114,187) $ 2,219,782 The purchase price calculation is as follows: Cash $ 2,419,371 Stock 1,020,000 $ 3,439,371 The following table summarizes the estimated fair value of the assets acquired and liabilities assumed at the date of purchase: Cash $ 172,850 Accounts receivable 324,989 Inventory 269,746 Prepaid expenses 13,180 Property and equipment 126,000 Intangible assets 1,110,000 Goodwill 1,564,000 Accounts payable (134,956) Accrual liabilities (6,438) $ 3,439,371 |
REVENUE (Tables)
REVENUE (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue by Product Line | The table below shows revenue by category: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2020 2019 2020 2019 Electronics $ 1,406,681 $ 3,880,542 $ 5,708,436 $ 12,632,170 Manufactured 139,057 519,990 682,149 1,456,789 Re-Sell 1,971,542 4,851,415 7,986,792 14,920,878 Service 482,826 653,814 1,429,350 1,853,013 Total Revenue $ 4,000,106 $ 9,905,761 $ 15,806,727 $ 30,862,850 |
BASIC AND DILUTED EARNINGS PE_2
BASIC AND DILUTED EARNINGS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table is a reconciliation of the numerator and denominators used in the earnings per share calculation: For the Three Months Ended September 30, 2020 2019 Income (loss) (Numerator) Weighted Average Shares (Denominator) Per-Share Income (Numerator) Weighted Average Shares (Denominator) Per-Share Basic EPS Net income (loss) available to common stockholders $ (1,057,748) 47,933,318 $ (0.02) $ 921,748 47,739,192 $ 0.02 Effect of Dilutive Securities Stock options & RSUs — — — 730,054 Diluted EPS Net income (loss) available to common stockholders + assumed conversions $ (1,057,748) 47,933,318 $ (0.02) $ 921,748 48,469,246 $ 0.02 For the Nine Months Ended September 30, 2020 2019 Income (loss) (Numerator) Weighted Average Shares (Denominator) Per-Share Income (Numerator) Weighted Average Shares (Denominator) Per-Share Basic EPS Net income (loss) available to common stockholders $ (2,231,515) 47,717,114 $ (0.05) $ 3,575,870 47,509,357 $ 0.08 Effect of Dilutive Securities Stock options & RSUs — — — 750,543 Diluted EPS Net income (loss) available to common stockholders + assumed conversions $ (2,231,515) 47,717,114 $ (0.05) $ 3,575,870 48,259,900 $ 0.07 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Segment Information for Geographic Areas | Segment information for these geographic areas is as follows: For the Three Months Ended September 30, For the Nine Months Ended September 30, Sales 2020 2019 2020 2019 Canada $ 755,701 $ 1,890,592 $ 2,365,118 $ 3,883,010 United States 3,244,405 8,015,169 13,441,609 26,979,840 Total Consolidated $ 4,000,106 $ 9,905,761 $ 15,806,727 $ 30,862,850 For the Three Months Ended September 30, For the Nine Months Ended September 30, Profit (Loss) 2020 2019 2020 2019 Canada $ (473,395) $ (242,182) $ (1,059,627) $ (1,171,424) United States (584,353) 1,163,930 (1,171,888) 4,747,294 Total Consolidated $ (1,057,748) $ 921,748 $ (2,231,515) $ 3,575,870 As of Long-Lived Assets September 30, 2020 December 31, 2019 Canada $ 5,733,180 $ 6,068,061 United States 16,781,358 18,080,075 Total Consolidated $ 22,514,538 $ 24,148,136 |
INVENTORY (Details)
INVENTORY (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 328,945 | $ 0 |
Finished goods | 9,494,074 | 10,517,858 |
Work in process | 0 | 0 |
Subtotal | 9,823,019 | 10,517,858 |
Reserve for obsolescence | (1,042,448) | (946,051) |
Total | $ 8,780,571 | $ 9,571,807 |
PREPAID EXPENSES AND OTHER CU_3
PREPAID EXPENSES AND OTHER CURRENT ASSETS - Schedule of other current assets (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Assets classified as held for sale | $ 791,180 | $ 0 |
Prepaid Inventory | 659,084 | 1,291,577 |
Prepaid insurance | 275,623 | 133,611 |
Vehicle trade-in credits | 156,607 | 0 |
Interest receivables | 64,600 | 80,609 |
Other | 231,588 | 166,625 |
Total | $ 2,178,682 | $ 1,672,422 |
ACCRUED LIABILITIES - Schedule
ACCRUED LIABILITIES - Schedule of Accrued Liabilities (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Other Liabilities Disclosure [Abstract] | ||
Employee-related payables | $ 792,050 | $ 1,657,826 |
Warranty liabilities | 98,354 | 166,301 |
Inventory-related payables | 80,641 | 0 |
Acquisition liabilities | 0 | 162,907 |
Other | 90,470 | 102,357 |
Total | $ 1,061,515 | $ 2,089,391 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2020USD ($) | Sep. 30, 2020USD ($) | |
Leases [Abstract] | ||
Lease term | 36 months | 36 months |
Weighted average discount rate | 4.50% | 4.50% |
Weighted average remaining lease term | 17 months 24 days | 17 months 24 days |
Short-term lease cost | $ 19,189 | $ 57,719 |
LEASES - Components of Financin
LEASES - Components of Financing Lease Cost (Details) - USD ($) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2020 | Sep. 30, 2020 | |
Leases [Abstract] | ||
Amortization of right-of-use assets | $ 11,567 | $ 45,064 |
Interest on lease liabilities | 699 | 4,946 |
Total financing lease cost | $ 12,266 | $ 50,010 |
LEASES - Future Minimum Lease P
LEASES - Future Minimum Lease Payments to Discounted Finance Lease Liability (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Years ending December 31, | ||
2020 - remaining | $ 12,506 | |
2021 | 40,921 | |
2022 | 12,803 | |
2023 | 0 | |
2024 | 0 | |
Thereafter | 0 | |
Total future minimum lease payments | 66,230 | |
Less: Amount representing interest | 2,279 | |
Present value of future payments | 63,951 | |
Current portion | 43,024 | $ 59,376 |
Long-term portion | $ 20,927 | $ 52,120 |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) - USD ($) | Aug. 21, 2020 | Jul. 02, 2020 | Jun. 17, 2020 | Mar. 17, 2020 | Mar. 04, 2020 | Jun. 12, 2019 | Apr. 22, 2019 | Mar. 14, 2019 | Sep. 30, 2020 | Dec. 31, 2019 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Treasury stock (in shares) | 3,412,378 | 3,412,378 | ||||||||
Treasury stock, at cost | $ 5,353,019 | $ 5,353,019 | ||||||||
Compensation expense | $ 593,361 | |||||||||
Compensation expense recognition period | 2 years 3 months 18 days | |||||||||
Number of shares approved (in shares) | 115,200 | |||||||||
Strike price (in dollars per share) | $ 0.785 | $ 0.81 | ||||||||
Tranche One | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Award vesting percentage | 33.33% | |||||||||
Tranche Two | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Award vesting percentage | 33.33% | |||||||||
Tranche Three | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Award vesting percentage | 33.33% | |||||||||
Restricted Stock Units | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Units outstanding (in shares) | 275,203 | |||||||||
Number of shares granted (shares) | 92,934 | 270,966 | ||||||||
Award vesting percentage | 50.00% | 50.00% | ||||||||
Unrecognized compensation cost | $ 72,953 | $ 252,000 | ||||||||
Performance Shares | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Units outstanding (in shares) | 252,701 | |||||||||
Employee Stock Option | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Stock options outstanding (in shares) | 934,700 | |||||||||
Compensation expense | $ 233,111 | $ 79,431 | $ 40,280 | |||||||
Award vesting period | 3 years | 3 years | 3 years | |||||||
Expiration period | 4 years | 4 years | ||||||||
2019 EIP | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Performance goal weight | 25.00% | |||||||||
2019 LTIP | Tranche One | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Percentage of award covered by metric | 33.00% | |||||||||
2019 LTIP | Tranche Two | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Percentage of award covered by metric | 67.00% | |||||||||
2019 LTIP | Restricted Stock Units | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Number of shares granted (shares) | 183,942 | 85,000 | ||||||||
Award vesting percentage | 50.00% | |||||||||
Award vesting period | 5 years | |||||||||
Unrecognized compensation cost | $ 252,000 | $ 149,600 | ||||||||
Executive Officer | 2019 EIP | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
One-time executive bonus | $ 828,787 | |||||||||
Executive Officer | 2014 EIP | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
One-time executive bonus (in shares) | 343,748 | |||||||||
Executive Officer | 2017 LTIP | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
One-time executive bonus (in shares) | 16,689 | |||||||||
Chief Financial Officer | 2019 LTIP | Restricted Stock Units | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Number of shares granted (shares) | 66,213 | |||||||||
Chief Business Development Officer | 2019 LTIP | Restricted Stock Units | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Number of shares granted (shares) | 51,646 | |||||||||
Vice President of Operations | 2019 LTIP | Tranche One | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Number of shares granted (shares) | 630,000 | 100,000 | ||||||||
Vice President of Operations | 2019 LTIP | Tranche Two | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Number of shares granted (shares) | 0.8439 | |||||||||
Vice President of Operations | 2019 LTIP | Restricted Stock Units | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Number of shares granted (shares) | 35,313 | |||||||||
Vice President of Product Development | 2019 LTIP | Restricted Stock Units | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Number of shares granted (shares) | 24,862 |
ACQUISITION - Narrative (Detail
ACQUISITION - Narrative (Details) - USD ($) | Aug. 05, 2019 | Jun. 18, 2019 | Sep. 30, 2020 | Dec. 31, 2019 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 2,579,381 | $ 2,579,381 | ||
MEP | ||||
Business Acquisition [Line Items] | ||||
Acquisition purchase price | $ 2,219,782 | |||
Liabilities | $ 140,257 | |||
Consideration held for seller obligations, period | 6 months | |||
Royalty percentage | 4.50% | |||
Royalty revenue period | 5 years | |||
Intangible assets | $ 990,000 | |||
Goodwill | 17,681 | |||
Acquisition related costs | $ 136,811 | |||
Midflow Services, LLC | ||||
Business Acquisition [Line Items] | ||||
Acquisition purchase price | $ 3,439,371 | |||
Goodwill | 1,564,000 | |||
Acquisition related costs | 44,087 | |||
Escrow deposit | 500,000 | |||
Intangible assets | $ 1,110,000 |
ACQUISITION (Details)
ACQUISITION (Details) - USD ($) | Aug. 05, 2019 | Jun. 18, 2019 | Sep. 30, 2020 | Dec. 31, 2019 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 2,579,381 | $ 2,579,381 | ||
MEP | ||||
Business Acquisition [Line Items] | ||||
Cash | $ 2,079,525 | |||
Liabilities | 140,257 | |||
Acquisition purchase price | 2,219,782 | |||
Accounts receivable | 207,145 | |||
Inventory | 1,119,143 | |||
Intangible assets | 990,000 | |||
Goodwill | 17,681 | |||
Accounts payable | (114,187) | |||
Net | $ 2,219,782 | |||
Midflow Services, LLC | ||||
Business Acquisition [Line Items] | ||||
Cash | $ 2,419,371 | |||
Stock | 1,020,000 | |||
Acquisition purchase price | 3,439,371 | |||
Cash | 172,850 | |||
Accounts receivable | 324,989 | |||
Inventory | 269,746 | |||
Prepaid expenses | 13,180 | |||
Property and equipment | 126,000 | |||
Intangible assets | 1,110,000 | |||
Goodwill | 1,564,000 | |||
Accounts payable | (134,956) | |||
Accrual liabilities | (6,438) | |||
Net | $ 3,439,371 |
REVENUE - Disaggregation of Rev
REVENUE - Disaggregation of Revenue (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Return period | 90 days | |||
Total Revenues | $ 4,000,106 | $ 9,905,761 | $ 15,806,727 | $ 30,862,850 |
Minimum | ||||
Disaggregation of Revenue [Line Items] | ||||
Product warranty term | 90 days | |||
Maximum | ||||
Disaggregation of Revenue [Line Items] | ||||
Product warranty term | 2 years | |||
Electronics | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenues | 1,406,681 | 3,880,542 | $ 5,708,436 | 12,632,170 |
Manufactured | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenues | 139,057 | 519,990 | 682,149 | 1,456,789 |
Re-Sell | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenues | 1,971,542 | 4,851,415 | 7,986,792 | 14,920,878 |
Service | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenues | $ 482,826 | $ 653,814 | $ 1,429,350 | $ 1,853,013 |
BASIC AND DILUTED EARNINGS PE_3
BASIC AND DILUTED EARNINGS PER SHARE (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income (loss) (Numerator) | ||||||||
Net income (loss) available to common stockholders | $ (1,057,748) | $ (808,503) | $ (365,264) | $ 921,748 | $ 985,504 | $ 1,668,618 | $ (2,231,515) | $ 3,575,870 |
Stock options & RSUs | 0 | 0 | 0 | 0 | ||||
Net income (loss) available to common stockholders + assumed conversions | $ (1,057,748) | $ 921,748 | $ (2,231,515) | $ 3,575,870 | ||||
Weighted Average Shares (Denominator) | ||||||||
Weighted average basic shares outstanding (in shares) | 47,933,318 | 47,739,192 | 47,717,114 | 47,509,357 | ||||
Effect of Dilutive Securities, Stock options & RSUs (in shares) | 0 | 730,054 | 0 | 750,543 | ||||
Weighted average diluted shares outstanding (in shares) | 47,933,318 | 48,469,246 | 47,717,114 | 48,259,900 | ||||
Per-Share Amount | ||||||||
Basic earnings per share (in dollars per share) | $ (0.02) | $ 0.02 | $ (0.05) | $ 0.08 | ||||
Diluted earnings per share (in dollars per share) | $ (0.02) | $ 0.02 | $ (0.05) | $ 0.07 | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 527,904 | 244,600 | 666,714 | 244,600 | ||||
Weighted average (in dollars per share) | $ 3.88 | $ 0.85 | $ 3.88 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Segment Reporting Information [Line Items] | |||||||||
Sales | $ 4,000,106 | $ 9,905,761 | $ 15,806,727 | $ 30,862,850 | |||||
Profit (Loss) | (1,057,748) | $ (808,503) | $ (365,264) | 921,748 | $ 985,504 | $ 1,668,618 | (2,231,515) | 3,575,870 | |
Long-Lived Assets | 22,514,538 | 22,514,538 | $ 24,148,136 | ||||||
Canada | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Sales | 755,701 | 1,890,592 | 2,365,118 | 3,883,010 | |||||
Profit (Loss) | (473,395) | (242,182) | (1,059,627) | (1,171,424) | |||||
Long-Lived Assets | 5,733,180 | 5,733,180 | 6,068,061 | ||||||
United States | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Sales | 3,244,405 | 8,015,169 | 13,441,609 | 26,979,840 | |||||
Profit (Loss) | (584,353) | $ 1,163,930 | (1,171,888) | $ 4,747,294 | |||||
Long-Lived Assets | $ 16,781,358 | $ 16,781,358 | $ 18,080,075 |