☑ | Annual report pursuant to section 13 or 15(d) of the securities exchange act of 1934 |
☐ | Transition report pursuant to section 13 or 15(d) of the securities exchange act of 1934 |
Nevada
|
20-0019425
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
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321 South 1250 West, Suite 1
Lindon, Utah 84042
(Address of principal executive offices)
Telephone Number – Area Code (801) 796-5127
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Title of each class
|
Name of each exchange on which registered
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Common Stock, $0.001 par value
|
NASDAQ
|
Large accelerated Filer ☐
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Accelerated Filer ☐
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Non-accelerated Filer ☐ (Do not check if a smaller reporting company)
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Smaller Reporting Company ☑
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Table of Contents
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Page
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Item 1.
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Business
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5
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Item 1A.
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Risk Factors
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13
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Item 1B.
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Unresolved Staff Comments
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28
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Item 2.
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Properties
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28
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Item 3.
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Legal Proceedings
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29
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Item 4.
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Mine Safety Disclosures
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29
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PART II
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|
|
|
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Item 5.
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Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
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29
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Item 6.
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Selected Financial Data
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30
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Item 7.
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Management's Discussion and Analysis of Financial Condition and Results of Operations
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30
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Item 7A.
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Quantitative and Qualitative Disclosures About Market Risk
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34
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Item 8.
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Financial Statements and Supplementary Data
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34
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Item 9.
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Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
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34
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Item 9A.
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Controls and Procedures
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34
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Item 9B.
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Other Information
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37
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PART III
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|
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Item 10.
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Directors, Executive Officers and Corporate Governance
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37
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Item 11.
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Executive Compensation
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37
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Item 12.
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Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
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37
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Item 13.
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Certain Relationships and Related Transactions, and Director Independence
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37
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Item 14.
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Principal Accounting Fees and Services
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37
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PART IV
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|
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Item 15.
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Exhibits and Financial Statement Schedules
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37
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Signatures
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40
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·
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provide a safe, efficient and code-compliant method to ignite, monitor, and/or manage burner flames in the industry; and
|
·
|
ensure the system could be easily controlled by oilfield operators.
|
|
For the Years Ending
March 31,
|
|||||||
Customer
|
2016
|
2015
|
||||||
Chesapeake Energy
|
9%
|
|
11%
|
|
·
|
inline pilot technologies to increase efficiency and reliability of pilot light performance in a variety of climates;
|
·
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software technology within a modular burner management system; and
|
·
|
certain valve-related technologies.
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·
|
B149.3-10, which has evolved in recent years and is effective for Alberta, governs the safety precautions that must be met concerning the ignition of the pilot and the main burner in Canada. It allows a programmable control to be used, if the controller complies with certain certification requirements promulgated by the CSA.
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·
|
Regulation 7, which was passed during fiscal year 2014 by the Colorado Department of Public Health and Environment, requires that combustion devices installed after May 1, 2014, be equipped with an auto-igniter and all existing combustion devices to be equipped with an auto-igniter by May 1, 2016.
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·
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R307-503-3 (b) & (c), which was passed during fiscal year 2014 by the Utah Department of Air Quality, mandated that all new open and enclosed burners must have an auto-igniter beginning January 1, 2015. The rule requires the two largest oil- and gas-producing counties in the state to retrofit all existing enclosed burners with auto-igniters by December 1, 2015, and all other counties to comply by April 1, 2017.
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·
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Order 25417, which was passed by North Dakota's Industrial Council, is a new rule effective April 1, 2015, requiring producers to condition crude oil before transportation and prove oil temperature is above 110 degrees Fahrenheit, to burn off toxic gases from the oil.
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·
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the level of oil and gas production;
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·
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the demand for oil and gas related products;
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·
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domestic and worldwide economic conditions;
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·
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political instability in the Middle East and other oil producing regions;
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·
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the actions of the Organization of Petroleum Exporting Countries;
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·
|
the price of foreign imports of oil and gas, including liquefied natural gas;
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·
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natural disasters or weather conditions, such as hurricanes;
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·
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technological advances affecting energy consumption;
|
·
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the level of oil and gas inventories;
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·
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the cost of producing oil and gas;
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·
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the price and availability of alternative fuels;
|
·
|
merger and divestiture activity among oil and gas producers; and
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·
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governmental regulations.
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·
|
foreign currency exchange risks resulting from changes in foreign currency exchange rates and the execution of controls in this area;
|
·
|
limitations on our ability to reinvest earnings from operations in one country to fund our operations in other countries.
|
·
|
the business culture of the acquired business may not match well with our culture;
|
·
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we may fail to retain, motivate and integrate key management and other employees of the acquired business;
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·
|
we may experience problems in retaining customers and integrating customer bases; and
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·
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we may experience complexities associated with managing the combined businesses and consolidating multiple physical locations.
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·
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multiple, conflicting, and changing laws and regulations, export and import restrictions, and employment laws;
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·
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regulatory requirements, and other government approvals, permits, and licenses;
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·
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potentially adverse tax consequences;
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·
|
political and economic instability, including wars and acts of terrorism, political unrest, boycotts, curtailments of trade and sanctions, and other business restrictions;
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·
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expropriation, confiscation or nationalization of assets;
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·
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renegotiation or nullification of existing contracts;
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·
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difficulties and costs in recruiting and retaining individuals skilled in international business operations;
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·
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foreign exchange restrictions;
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·
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foreign currency fluctuations;
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·
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foreign taxation;
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·
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the inability to repatriate earnings or capital;
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·
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changing foreign and domestic monetary policies;
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·
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cultural and communication challenges;
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·
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industry-process changes in heating and flow of oil;
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·
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regional economic downturns; and
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·
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foreign governmental regulations favoring or requiring the awarding of contracts to local contractors or requiring foreign contractors to employ citizens of, or purchase supplies from, a particular jurisdiction that may harm our ability to compete.
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·
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design and commercially produce products that meet the needs of our customers;
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·
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attract and retain talented research-and-development management and personnel;
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·
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successfully market new products; and
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·
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protect our proprietary designs from our competitors.
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·
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our ability to market our products and services to new customers;
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·
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our ability to provide large-scale support and training materials for a growing customer base;
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·
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our ability to hire, train and assimilate new employees;
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·
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the adequacy of our financial resources; and
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·
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our ability to correctly identify and exploit new geographical markets and to successfully compete in those markets.
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·
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the underlying price of the commodities in the oil and gas industry;
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·
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announcements of capital budget changes by a major customer;
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·
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the introduction of new products by our competitors;
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·
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announcements of technology advances by us or our competitors;
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·
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current events affecting the political and economic environment in the United States or Canada;
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·
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conditions or industry trends, including demand for our products, services and technological advances;
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·
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changes to financial estimates by us or by any securities analysts who might cover our stock;
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·
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additions or departures of our key personnel;
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·
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government regulation of our industry;
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·
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seasonal, economic, or financial conditions;
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·
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our quarterly operating and financial results; or
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·
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litigation or public concern about the safety of our products.
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·
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the composition of our Board, which has the authority to direct our business, appoint and remove our officers, and declare dividends;
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·
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approving or rejecting a merger, consolidation or other business combination;
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·
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raising future capital; and
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·
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amending our articles of incorporation and bylaws.
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Location
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Expires
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Use
|
Approx. SF
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Lindon, Utah
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Owned
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Corp HQ & Warehouse Assembly
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50,500
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Spruce Grove, Alberta
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Owned
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Office & Warehouse Assembly
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16,000
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Greeley, Colorado
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Owned
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Office & Warehouse Storage
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2,750
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Tioga, Pennsylvania
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30-Apr-16
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Office & Warehouse Storage
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2,500
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Victoria, Texas
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31-May-16
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Office & Warehouse Storage
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2,600
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Houston, Texas
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31-Jul-16
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Office & Warehouse Assembly
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5,000
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Shelocta, Pennsylvania
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30-Nov-16
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Office & Warehouse Storage
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1,200
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For the Year Ending March 31, 2016
|
High
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Low
|
||||||
Fourth Quarter
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$
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1.15
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$
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0.65
|
||||
Third Quarter
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$
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1.43
|
$
|
0.89
|
||||
Second Quarter
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$
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1.17
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$
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0.76
|
||||
First Quarter
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$
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1.83
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$
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1.03
|
||||
|
||||||||
For the Year Ending March 31, 2015
|
||||||||
Fourth Quarter
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$
|
2.94
|
$
|
1.21
|
||||
Third Quarter
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$
|
4.23
|
$
|
0.76
|
||||
Second Quarter
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$
|
5.39
|
$
|
3.00
|
||||
First Quarter
|
$
|
5.89
|
$
|
2.99
|
|
For the Years Ending
March 31,
|
|||||||
|
2016
|
2015
|
||||||
Net cash provided by operating activities
|
$
|
7,332,933
|
$
|
685,080
|
||||
Net Cash Provided by (Used in) Investing Activities
|
96,176
|
(6,910,078
|
)
|
|||||
Net Cash Provided by (Used in) Financing Activities
|
(39,342
|
)
|
16,752,649
|
|||||
Effect of exchange rate changes on cash
|
(241,968
|
)
|
(839,529
|
)
|
||||
NET CHANGE IN CASH
|
$
|
7,147,799
|
$
|
9,688,122
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·
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Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the entity;
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·
|
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles and that receipts and expenditures of the entity are being made in accordance with authorizations of management and directors of the entity; and
|
·
|
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the entity's assets that could have a material effect on its consolidated financial statements.
|
·
|
Hired third parties to provide advice on COSO framework and risk control matrices;
|
·
|
Implemented company-wide trainings over internal controls in relation with new accounting standard operating procedures including the requirement of supplying supporting evidence, proving the level of precision with which a control is performed, etc.;
|
·
|
Required evidence of review in nearly all controls; and
|
·
|
Reviewed and updated each employee's access within the enterprise resource management system.
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(a) | The following documents are filed as part of this report: |
The following financial statements of the registrant are included in response to Item 8 of this annual report:
|
|
Report of Sadler, Gibb & Associates, LLC, Independent Registered Public Accounting Firm.
|
|
Consolidated Balance Sheets at March 31, 2016 and 2015.
|
|
Consolidated Statements of Income and Other Comprehensive Income (Loss) for the years ended March 31, 2016 and 2015.
|
|
Consolidated Statements of Stockholders' Equity for the years ended March 31, 2016 and 2015.
|
|
Consolidated Statements of Cash Flows for the years ended March 31, 2016 and 2015.
|
|
Notes to Consolidated Financial Statements.
|
Exhibit No.
|
Exhibit Description
|
3.1
|
Articles of Incorporation(2)
|
3.2
|
Articles of Amendment to the Articles of Incorporation(3)
|
3.3
|
Amended and Restated Bylaws(1)
|
10.1
|
Securities Purchase Agreement, dated November 12, 2013 between the Registrant and the persons listed therein as purchasers(10)
|
10.2
|
Registration Rights Agreement, dated November 18, 2013 between the Registrant and the persons listed in the Securities Purchase Agreement as purchasers(11)
|
10.3
|
Employment Agreement of Brenton W. Hatch dated June 28, 2013(17)+
|
10.4
|
Employment Agreement of Harold Albert, dated June 28, 2013(18)+
|
10.5
|
Employment Agreement of Andrew Limpert, dated June 28, 2013(19)+
|
10.18
|
Employment Agreement of Ryan Oviatt, dated September 4, 2015(20)+
|
10.6
|
Form of Indemnification Agreement between the Registrant and its Directors(13)
|
10.7
|
2003 Stock Incentive Plan(14)
|
10.8
|
Profire Energy, Inc. 2010 Equity Incentive Plan(15)
|
10.10
|
Lease Agreement, dated May 16, 2014, between the Registrant and Paul Hall(8)
|
10.11
|
Lease Agreement, dated April 23, 2014, between the Registrant and Dennis Caka(9)
|
10.12
|
Consulting Agreement, dated March 24, 2014, between the Registrant on the one hand and Terra Industrial Corporation and Alan Johnson on the other (12)
|
10.13
|
Profire Energy, Inc. 2015 Equity Incentive Plan(16)
|
10.14
|
Form of Equity Grant Agreement, Nonqualified Stock Option*
|
10.15
|
Form of Equity Grant Agreement, Restricted Stock*
|
10.16
|
Form of Equity Grant Agreement, Restricted Stock Units*
|
10.17
|
Profire Energy, Inc. 2010 Equity Incentive Plan Amendment*
|
14.1
|
Code of Ethics(4)
|
21.1
|
Subsidiaries*
|
23.1
|
Consent of Sadler, Gibb & Associates, LLC, independent registered public accounting firm*
|
31.1
|
Certification of Chief Executive Officer Pursuant to Rule 13a-14(a)*
|
31.2
|
Certification of Chief Financial Officer Pursuant to Rule 13a-14(a)*
|
32.1
|
Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350*
|
32.2
|
Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350*
|
101 INS
|
XBRL Instance Document**
|
101 SCH
|
XBRL Schema Document**
|
101 CAL
|
XBRL Calculation Linkbase Document**
|
101 DEF
|
XBRL Definition Linkbase Document**
|
101 LAB
|
XBRL Labels Linkbase Document**
|
101 PRE
|
XBRL Presentation Linkbase Document**
|
PROFIRE ENERGY, INC.
|
||
Date: June 13, 2016
|
By:
|
/s/ Brenton W. Hatch
|
Brenton W. Hatch
|
||
Chief Executive Officer
|
||
(Duly Authorized Representative)
|
Signatures
|
Title
|
Date
|
||
/s/ Brenton W. Hatch
|
Chief Executive Officer and
|
June 13, 2016
|
||
Brenton W. Hatch
|
Chairman of the Board of Directors (Principal Executive Officer)
|
|||
/s/ Ryan Oviatt
|
Chief Financial Officer
|
June 13, 2016
|
||
Ryan Oviatt
|
(Principal Financial Officer and Accounting Officer)
|
|||
/s/ Harold Albert
|
Chief Operating Officer and Director
|
June 13, 2016
|
||
Harold Albert
|
||||
Director
|
June 13, 2016
|
|||
Arlen B. Crouch
|
||||
/s/ Stephen E. Pirnat
|
Director
|
June 13, 2016
|
||
Stephen E. Pirnat
|
||||
/s/ Daren J. Shaw
|
Director
|
June 13, 2016
|
||
Daren J. Shaw
|
||||
/s/ Ronald R. Spoehel
|
Director
|
June 13, 2016
|
||
Ronald R. Spoehel
|
Page
|
|
Report of Sadler, Gibb & Associates, LLC, Independent Registered Public Accounting Firm
|
43
|
Consolidated Balance Sheets – March 31, 2016 and 2015
|
44
|
Consolidated Statements of Income and Other Comprehensive Income (Loss) for the years ended March 31, 2016 and 2015
|
45
|
Consolidated Statement of Stockholders' Equity from March 31, 2015 through March 31, 2016
|
46
|
Consolidated Statements of Cash Flows for the years ended March 31, 2016 and 2015
|
47
|
Notes to Consolidated Financial Statements
|
48
|
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Profire Energy, Inc.’s internal control over financial reporting as of March 31, 2015, based on the criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and our report dated June 15, 2015, expressed an adverse opinion thereon.
PROFIRE ENERGY, INC. AND SUBSIDIARIES
|
||||||||
Consolidated Balance Sheets
|
||||||||
|
||||||||
|
For the Years Ending March 31,
|
|||||||
ASSETS
|
2016
|
2015
|
||||||
|
||||||||
CURRENT ASSETS
|
||||||||
Cash and cash equivalents
|
$
|
21,292,595
|
$
|
14,144,796
|
||||
Accounts receivable, net
|
4,132,137
|
9,462,378
|
||||||
Inventories
|
11,046,682
|
11,766,535
|
||||||
Income tax receivable
|
268,326
|
—
|
||||||
Prepaid expenses & other current assets
|
315,757
|
112,741
|
||||||
|
||||||||
Total Current Assets
|
37,055,497
|
35,486,450
|
||||||
|
||||||||
LONG-TERM ASSETS
|
||||||||
Deferred tax asset
|
452,431
|
501,921
|
||||||
|
||||||||
PROPERTY AND EQUIPMENT, net
|
8,232,911
|
9,275,965
|
||||||
|
||||||||
OTHER ASSETS
|
||||||||
Goodwill
|
997,701
|
997,701
|
||||||
Intangible assets, net of accumulated amortization
|
529,300
|
594,019
|
||||||
|
||||||||
Total Other Assets
|
1,527,001
|
1,591,720
|
||||||
|
||||||||
TOTAL ASSETS
|
$
|
47,267,840
|
$
|
46,856,056
|
||||
|
||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||
|
||||||||
CURRENT LIABILITIES
|
||||||||
Accounts payable
|
$
|
893,822
|
$
|
1,040,530
|
||||
Accrued liabilities
|
620,783
|
332,229
|
||||||
Income taxes payable
|
335,375
|
347,486
|
||||||
|
||||||||
Total Current Liabilities
|
1,849,980
|
1,720,245
|
||||||
|
||||||||
LONG-TERM LIABILITIES
|
||||||||
Deferred income tax liability
|
632,732
|
631,353
|
||||||
|
||||||||
TOTAL LIABILITIES
|
2,482,712
|
2,351,598
|
||||||
|
||||||||
STOCKHOLDERS' EQUITY
|
||||||||
Preferred shares: $0.001 par value, 10,000,000 shares authorized: no shares issued and outstanding
|
-
|
-
|
||||||
Common shares: $0.001 par value, 100,000,000 shares authorized: 53,256,296 and 53,199,136 shares issued and outstanding, respectively
|
53,256
|
53,199
|
||||||
Additional paid-in capital
|
26,164,622
|
25,525,052
|
||||||
Accumulated other comprehensive loss
|
(2,282,682
|
)
|
(1,888,981
|
)
|
||||
Retained earnings
|
20,849,932
|
20,815,188
|
||||||
|
||||||||
Total Stockholders' Equity
|
44,785,128
|
44,504,458
|
||||||
|
||||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
|
$
|
47,267,840
|
$
|
46,856,056
|
PROFIRE ENERGY, INC. AND SUBSIDIARIES
|
||||||||
Consolidated Statements of Income and Other Comprehensive Income
|
||||||||
|
||||||||
|
For the Years Ending
March 31,
|
|||||||
|
2016
|
2015
|
||||||
REVENUES
|
||||||||
Sales of goods, net
|
$
|
23,992,324
|
$
|
47,768,556
|
||||
Sales of services, net
|
3,080,122
|
3,410,836
|
||||||
Total Revenues
|
27,072,446
|
51,179,392
|
||||||
|
||||||||
COST OF SALES
|
||||||||
Cost of goods sold-product
|
11,027,114
|
21,240,363
|
||||||
Cost of goods sold-services
|
2,405,012
|
2,716,272
|
||||||
Total Cost of Goods Sold
|
13,432,126
|
23,956,635
|
||||||
|
||||||||
GROSS PROFIT
|
13,640,320
|
27,222,757
|
||||||
|
||||||||
OPERATING EXPENSES
|
||||||||
General and administrative expenses
|
12,264,442
|
16,296,156
|
||||||
Research and development
|
899,013
|
1,832,671
|
||||||
Depreciation and amortization expense
|
516,786
|
558,231
|
||||||
|
||||||||
Total Operating Expenses
|
13,680,241
|
18,687,058
|
||||||
|
||||||||
INCOME FROM OPERATIONS
|
(39,921
|
)
|
8,535,699
|
|||||
|
||||||||
OTHER INCOME (EXPENSE)
|
||||||||
Gain on sale of fixed assets
|
20,278
|
8,014
|
||||||
Other (expense) income
|
144,937
|
21,865
|
||||||
Interest income
|
37,278
|
26,010
|
||||||
|
||||||||
Total Other Income (Expense)
|
202,493
|
55,889
|
||||||
|
||||||||
NET INCOME BEFORE INCOME TAXES
|
162,572
|
8,591,588
|
||||||
|
||||||||
INCOME TAX EXPENSE
|
127,828
|
2,843,905
|
||||||
|
||||||||
NET INCOME
|
$
|
34,744
|
$
|
5,747,683
|
||||
|
||||||||
FOREIGN CURRENCY TRANSLATION GAIN (LOSS)
|
$
|
(393,701
|
)
|
$
|
(1,657,930
|
)
|
||
|
||||||||
TOTAL COMPREHENSIVE INCOME (LOSS)
|
$
|
(358,957
|
)
|
$
|
4,089,753
|
|||
|
||||||||
BASIC EARNINGS PER SHARE
|
$
|
0.00
|
$
|
0.11
|
||||
|
||||||||
FULLY DILUTED EARNINGS PER SHARE
|
$
|
0.00
|
$
|
0.11
|
||||
|
||||||||
BASIC WEIGHTED AVG NUMBER OF SHARES OUTSTANDING
|
53,243,151
|
51,609,760
|
||||||
|
||||||||
FULLY DILUTED WEIGHTED AVG NUMBER OF SHARES OUTSTANDING
|
53,558,942
|
51,680,775
|
|
Additional
|
Other
|
Total
|
|||||||||||||||||||||
|
Common Stock
|
Paid-In
|
Comprehensive
|
Retained
|
Stockholders'
|
|||||||||||||||||||
|
Shares
|
Amount
|
Capital
|
Loss
|
Earnings
|
Equity
|
||||||||||||||||||
|
||||||||||||||||||||||||
Balance, March 31, 2014
|
47,836,543
|
$
|
47,836
|
$
|
6,496,980
|
$
|
(231,051
|
)
|
$
|
15,067,505
|
21,381,270
|
|||||||||||||
|
||||||||||||||||||||||||
Stock issued in exercise of stock options
|
596,635
|
597
|
327,365
|
-
|
-
|
327,962
|
||||||||||||||||||
|
||||||||||||||||||||||||
Stock issuance, less offering costs of $1,529,057
|
4,500,000
|
4,500
|
16,420,188
|
-
|
-
|
16,424,688
|
||||||||||||||||||
|
||||||||||||||||||||||||
Stock issued for asset acquisition
|
265,958
|
266
|
999,734
|
-
|
-
|
1,000,000
|
||||||||||||||||||
|
||||||||||||||||||||||||
Fair value of options vested
|
-
|
-
|
1,280,785
|
-
|
-
|
1,280,785
|
||||||||||||||||||
|
||||||||||||||||||||||||
Foreign currency translation
|
-
|
-
|
-
|
(1,657,930
|
)
|
-
|
(1,657,930
|
)
|
||||||||||||||||
|
||||||||||||||||||||||||
Net income for the year ended March 31, 2015
|
-
|
-
|
-
|
-
|
5,747,683
|
5,747,683
|
||||||||||||||||||
|
||||||||||||||||||||||||
Balance, March 31, 2015
|
53,199,136
|
$
|
53,199
|
$
|
25,525,052
|
$
|
(1,888,981
|
)
|
$
|
20,815,188
|
44,504,458
|
|||||||||||||
|
||||||||||||||||||||||||
Fair value of options vested
|
-
|
-
|
565,646
|
-
|
-
|
565,646
|
||||||||||||||||||
|
||||||||||||||||||||||||
Stock issued in exercise of stock options
|
57,160
|
57
|
73,924
|
-
|
-
|
73,981
|
||||||||||||||||||
|
||||||||||||||||||||||||
Foreign currency translation
|
-
|
-
|
-
|
(393,701
|
)
|
-
|
(393,701
|
)
|
||||||||||||||||
|
||||||||||||||||||||||||
Net income for the year ended March 31, 2016
|
-
|
-
|
-
|
-
|
34,744
|
34,744
|
||||||||||||||||||
|
||||||||||||||||||||||||
Balance, March 31, 2016
|
53,256,296
|
$
|
53,256
|
$
|
26,164,622
|
$
|
(2,282,682
|
)
|
$
|
20,849,932
|
44,785,128
|
PROFIRE ENERGY, INC. AND SUBSIDIARIES
|
||||||||
Consolidated Statements of Cash Flows
|
||||||||
|
||||||||
|
For the Years Ending March 31,
|
|||||||
|
2016
|
2015
|
||||||
OPERATING ACTIVITIES
|
||||||||
Net Income
|
$
|
34,744
|
$
|
5,747,683
|
||||
Adjustments to reconcile net income to
|
||||||||
net cash provided by operating activities:
|
||||||||
Depreciation and amortization expense
|
989,484
|
1,140,319
|
||||||
Gain on sale of fixed assets
|
(20,278
|
)
|
(8,014
|
)
|
||||
Bad debt expense
|
143,192
|
(7,577
|
)
|
|||||
Stock options issued for services
|
678,971
|
1,280,785
|
||||||
Changes in operating assets and liabilities:
|
||||||||
Changes in accounts receivable
|
5,114,485
|
(912,606
|
)
|
|||||
Changes in income tax receivable
|
(268,327
|
)
|
-
|
|||||
Changes in inventories
|
641,410
|
(5,472,869
|
)
|
|||||
Changes in prepaid expenses
|
(171,411
|
)
|
(80,770
|
)
|
||||
Changes in deferred tax asset/liability
|
49,490
|
(80,943
|
)
|
|||||
Changes in accounts payable and accrued liabilities
|
148,921
|
(302,782
|
)
|
|||||
Changes in income taxes payable
|
(7,748
|
)
|
(618,146
|
)
|
||||
|
||||||||
Net Cash Provided by Operating Activities
|
7,332,933
|
685,080
|
||||||
|
||||||||
INVESTING ACTIVITIES
|
||||||||
Proceeds from sale of equipment
|
158,641
|
7,867
|
||||||
Cash paid for asset acquisition
|
-
|
(750,000
|
)
|
|||||
Purchase of fixed assets
|
(62,465
|
)
|
(6,167,945
|
)
|
||||
|
||||||||
Net Cash Provided by (Used in) Investing Activities
|
96,176
|
(6,910,078
|
)
|
|||||
|
||||||||
FINANCING ACTIVITIES
|
||||||||
Proceeds from stock issued for cash, net of stock offering costs
|
-
|
16,424,688
|
||||||
Value of equity awards surrendered by employees for tax liability
|
(39,342
|
)
|
-
|
|||||
Stock issued in exercise of stock options
|
-
|
327,961
|
||||||
|
||||||||
Net Cash Provided by (Used in) Financing Activities
|
(39,342
|
)
|
16,752,649
|
|||||
|
||||||||
Effect of exchange rate changes on cash
|
(241,968
|
)
|
(839,529
|
)
|
||||
|
||||||||
NET CHANGE IN CASH
|
7,147,799
|
9,688,122
|
||||||
CASH AT BEGINNING OF PERIOD
|
14,144,796
|
4,456,674
|
||||||
|
||||||||
CASH AT END OF PERIOD
|
$
|
21,292,595
|
$
|
14,144,796
|
||||
|
||||||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
|
||||||||
|
||||||||
CASH PAID FOR:
|
||||||||
Interest
|
$
|
-
|
$
|
17,043
|
||||
Income taxes
|
$
|
127,828
|
$
|
3,471,027
|
||||
NON CASH INVESTING AND FINANCING ACTIVITIES:
|
||||||||
Stock issued for Asset acquisition
|
$
|
-
|
$
|
1,000,000
|
|
For the Years Ending
March 31,
|
|||||||
|
2016
|
2015
|
||||||
Net income applicable to common shareholders
|
$
|
34,744
|
$
|
5,747,683
|
||||
Weighted average shares outstanding
|
53,243,151
|
51,609,760
|
||||||
Weighted average fully diluted shares outstanding
|
53,558,942
|
51,680,775
|
||||||
Basic earnings per share
|
$
|
0.00
|
$
|
0.11
|
||||
Fully diluted earnings per share
|
$
|
0.00
|
$
|
0.11
|
|
For the Years Ending
March 31,
|
|||||||
|
2016
|
2015
|
||||||
Raw materials
|
$
|
967,823
|
$
|
—
|
||||
Finished goods
|
10,316,857
|
11,951,108
|
||||||
Work in process
|
—
|
—
|
||||||
Subtotal
|
11,284,680
|
11,951,108
|
||||||
Reserve for Obsolence
|
(237,998
|
)
|
(184,573
|
)
|
||||
Total
|
$
|
11,046,682
|
$
|
11,766,535
|
|
Estimated useful life
|
|
Assets
|
Current
|
Prior
|
Furniture and fixtures
|
7 Years
|
5 Years
|
Machinery and equipment
|
7 Years
|
5 Years
|
Buildings
|
30 Years
|
25 Years
|
Vehicles
|
5 Years
|
3 Years
|
Computers
|
3 Years
|
3 Years
|
Software
|
2 Years
|
N/A
|
|
For the Years Ending
March 31,
|
|||||||
|
2016
|
2015
|
||||||
Office furniture and equipment
|
$
|
968,135
|
$
|
937,274
|
||||
Service and shop equipment
|
577,240
|
573,233
|
||||||
Vehicles
|
2,715,920
|
3,040,439
|
||||||
Land and buildings
|
6,733,415
|
6,746,597
|
||||||
Total property and equipment
|
10,994,710
|
11,297,543
|
||||||
Accumulated depreciation
|
(2,761,799
|
)
|
(2,021,578
|
)
|
||||
Net property and equipment
|
$
|
8,232,911
|
$
|
9,275,965
|
|
For the Years Ending
March 31,
|
|||||||
|
2016
|
2015
|
||||||
Cost of Goods Sold
|
$
|
474,539
|
$
|
582,088
|
||||
General and administrative
|
516,786
|
558,231
|
||||||
Total
|
$
|
991,325
|
$
|
1,140,319
|
Consideration paid:
|
||||
Cash paid
|
$
|
750,000
|
||
Common stock issued
|
1,000,000
|
|||
Total purchase price
|
1,750,000
|
|||
|
||||
Consideration received:
|
||||
Inventory
|
$
|
54,577
|
||
Intangible assets
|
||||
Tundra Distribution Agreement
|
46,722
|
|||
Patent
|
650,000
|
|||
Other Intellectual Property
|
1,000
|
|||
Total Intangible Assets
|
697,722
|
|||
|
||||
$
|
752,299
|
|||
|
||||
Goodwill was recognized as a result of the acquisition as follows:
|
||||
Total consideration paid
|
$
|
1,750,000
|
||
Total consideration received
|
(752,299
|
)
|
||
|
$
|
997,701
|
Tundra Distribution Agreement
|
9 months
|
Patent
|
20 years
|
Other Intellectual Property
|
20 years
|
|
For the Years Ending
March 31,
|
|||||||
|
2016
|
2015
|
||||||
|
||||||||
Distribution agreements
|
$
|
40,702
|
$
|
41,638
|
||||
Less: Accumulated amortization
|
(40,702
|
)
|
(27,757
|
)
|
||||
Distribution agreements, net
|
—
|
13,881
|
||||||
Patents, trademarks, copyrights, and domain names
|
567,109
|
580,138
|
||||||
Less: Accumulated amortization
|
(37,809
|
)
|
—
|
|||||
Total definite-lived intangible assets, net
|
$
|
529,300
|
$
|
594,019
|
|
For the Years Ending March 31,
|
|||||||
|
2016
|
2015
|
||||||
|
||||||||
Goodwill
|
$
|
997,701
|
$
|
997,701
|
For the Years Ending March 31,
|
||||
Year
|
Amount
|
|||
2017
|
$
|
28,103
|
||
2018
|
28,103
|
|||
2019
|
28,103
|
|||
2020
|
28,103
|
|||
2021
|
28,103
|
|
For the Years Ending
March 31,
|
|||||||
|
2016
|
2015
|
||||||
|
||||||||
United States statutory income tax rate
|
35.0
|
%
|
35.0
|
%
|
||||
Decrease in rate on income subject to Canadian income tax rates
|
—
|
-1.5
|
%
|
|||||
Decrease in rate resulting from non-deductible
|
||||||||
expenses and deductible adjustments
|
43.6
|
%
|
-0.4
|
%
|
||||
|
43.6
|
%
|
-1.9
|
%
|
||||
Effective income tax rate
|
78.6
|
%
|
33.1
|
%
|
|
For the Years Ending March 31,
|
|||||||
Components of Income Tax Expense
|
2016
|
2015
|
||||||
Federal U.S. Income Taxes
|
||||||||
-Current
|
$
|
363,768
|
$
|
1,187,957
|
||||
-Deferred
|
(89,337
|
)
|
442,095
|
|||||
Foreign (Canadian and Provincial) Income Taxes
|
(240,372
|
)
|
998,280
|
|||||
State Income Taxes
|
||||||||
-Current
|
93,768
|
215,572
|
||||||
Total Income Tax Expense
|
$
|
127,828
|
$
|
2,843,905
|
|
For the Years Ending
March 31,
|
|||||||
Sales
|
2016
|
2015
|
||||||
|
||||||||
Canada
|
$
|
6,010,042
|
$
|
14,769,787
|
||||
United States
|
21,062,404
|
36,409,605
|
||||||
Total
|
$
|
27,072,446
|
$
|
51,179,392
|
|
For the Years Ending
March 31,
|
|||||||
Long-lived assets
|
2016
|
2015
|
||||||
|
||||||||
Canada
|
$
|
1,067,346
|
$
|
1,231,434
|
||||
United States
|
7,165,565
|
8,044,531
|
||||||
Total
|
$
|
8,232,911
|
$
|
9,275,965
|
|
Wtd. Avg.
|
|||||||
|
Options
|
Exercise Price
|
||||||
Outstanding, March 31, 2014
|
3,074,850
|
1.47
|
||||||
Granted
|
133,900
|
4.03
|
||||||
Exercised
|
(596,635
|
)
|
0.55
|
|||||
Forfeited/Expired
|
(498,615
|
)
|
1.39
|
|||||
Outstanding, March 31, 2015
|
2,113,500
|
1.90
|
||||||
|
||||||||
Exercisable, March 31, 2015
|
907,000
|
2.27
|
||||||
|
||||||||
|
Wtd. Avg.
|
|||||||
|
Options
|
Exercise Price
|
||||||
Outstanding, March 31, 2015
|
2,113,500
|
1.90
|
||||||
Granted
|
-
|
-
|
||||||
Exercised
|
-
|
-
|
||||||
Forfeited/Expired
|
(552,300
|
)
|
1.54
|
|||||
Outstanding, March 31, 2016
|
1,561,200
|
2.02
|
||||||
|
||||||||
Exercisable, March 31, 2016
|
1,050,800
|
2.12
|
Total Outstanding and Exercisable
For the Year Ending March 31, 2015
|
||||||||||||||||||
Outstanding Options
|
Avg. Remaining
|
Exercisable
|
Wtd. Avg.
|
|||||||||||||||
Strike Price
|
(1 share/option)
|
Life (Yrs)
|
Shares
|
Exercise Price
|
||||||||||||||
$
|
0.30
|
110,000
|
1.88
|
40,000
|
0.30
|
|||||||||||||
$
|
1.37
|
1,118,000
|
4.08
|
284,000
|
1.37
|
|||||||||||||
$
|
1.75
|
475,000
|
2.93
|
283,000
|
1.75
|
|||||||||||||
$
|
3.85
|
200,000
|
4.61
|
200,000
|
3.85
|
|||||||||||||
$
|
3.95
|
100,000
|
4.86
|
100,000
|
3.95
|
|||||||||||||
$
|
4.03
|
110,500
|
5.09
|
-
|
4.03
|
|||||||||||||
2,113,500
|
4.02
|
907,000
|
2.27
|
Total Outstanding and Exercisable
For the Year Ending March 31, 2016
|
||||||||||||||||||
Outstanding Options
|
Avg. Remaining
|
Exercisable
|
Wtd. Avg.
|
|||||||||||||||
Strike Price
|
(1 share/option)
|
Life (Yrs)
|
Shares
|
Exercise Price
|
||||||||||||||
$
|
0.30
|
110,000
|
0.88
|
110,000
|
0.30
|
|||||||||||||
$
|
1.37
|
711,500
|
3.13
|
345,500
|
1.37
|
|||||||||||||
$
|
1.75
|
346,500
|
1.93
|
276,500
|
1.75
|
|||||||||||||
$
|
3.85
|
200,000
|
3.61
|
200,000
|
3.85
|
|||||||||||||
$
|
3.95
|
100,000
|
3.86
|
100,000
|
3.95
|
|||||||||||||
$
|
4.03
|
93,200
|
4.09
|
18,800
|
4.03
|
|||||||||||||
1,561,200
|
2.92
|
1,050,800
|
2.12
|
Wtd. Avg.
|
||||||||
Grant Date
|
||||||||
Non-vested options
|
Options
|
Fair Value
|
||||||
Non-vested at March 31, 2015
|
1,206,500
|
1.58
|
||||||
Stock options issued during the year
|
-
|
-
|
||||||
Stock options canceled
|
(552,300
|
)
|
1.54
|
|||||
Vested during the year ended March 31, 2016
|
(370,600
|
)
|
1.40
|
|||||
Cancellation of previously vested stock options
|
226,800
|
1.54
|
||||||
Non-vested at March 31, 2016
|
510,400
|
1.81
|
|
Wtd. Avg.
|
|||||||
|
Restricted
|
Grant Date
|
||||||
Non-vested restricted stock
|
Stock
|
Fair Value
|
||||||
Non-vested at March 31, 2015
|
171,666
|
4.03
|
||||||
Restricted stock issued during the year
|
-
|
-
|
||||||
Restricted Stock canceled
|
(40,000
|
)
|
4.03
|
|||||
Vested during the year ended March 31, 2016
|
(34,332
|
)
|
4.03
|
|||||
Non-vested at March 31, 2016
|
97,334
|
4.03
|
|
Wtd. Avg.
|
|||||||
|
Restricted
|
Grant Date
|
||||||
Non-vested restricted stock units
|
Stock Units
|
Fair Value
|
||||||
Non-vested at March 31, 2015
|
106,907
|
3.94
|
||||||
Restricted stock units issued during the year
|
528,334
|
1.05
|
||||||
Restricted stock units canceled
|
(76,999
|
)
|
1.68
|
|||||
Vested, not settled during the period ended March 31, 2016
|
(199,908
|
)
|
1.68
|
|||||
Vested & settled during the year ended March 31, 2016
|
(53,001
|
)
|
1.62
|
|||||
Non-vested at March 31, 2016
|
305,333
|
1.38
|
Years Ending March 31,
|
Operating Leases
|
|||
|
||||
2017
|
$
|
35,724
|
||
2018
|
–
|
|||
Thereafter
|
–
|
|||
|
$
|
35,724
|
|
For the Quarters Ending
|
|||||||||||||||
2016
|
Jun 30
|
Sep 30
|
Dec 31
|
Mar 31
|
||||||||||||
Net sales
|
$
|
6,877,243
|
$
|
8,097,294
|
$
|
7,554,255
|
$
|
4,543,654
|
||||||||
Gross profit
|
3,313,519
|
$
|
4,028,403
|
$
|
3,998,502
|
$
|
2,299,895
|
|||||||||
Income (loss) from operations
|
(539,374
|
)
|
$
|
675,396
|
$
|
490,322
|
$
|
(666,265
|
)
|
|||||||
Income tax expense (benefit)
|
(149,525
|
)
|
$
|
254,781
|
$
|
194,227
|
$
|
(171,654
|
)
|
|||||||
Net income (loss)
|
(459,079
|
)
|
$
|
779,195
|
$
|
479,243
|
$
|
(764,617
|
)
|
|||||||
Basic earnings per common share
|
$
|
(0.01
|
)
|
$
|
0.01
|
$
|
0.01
|
$
|
(0.01
|
)
|
||||||
Diluted earnings per common share
|
$
|
(0.01
|
)
|
$
|
0.01
|
$
|
0.01
|
$
|
(0.01
|
)
|
|
For the Quarters Ending
|
|||||||||||||||
2015
|
Jun 30
|
Sep 30
|
Dec 31
|
Mar 31
|
||||||||||||
Net sales
|
$
|
13,144,834
|
$
|
15,720,932
|
$
|
12,516,699
|
$
|
9,796,927
|
||||||||
Gross profit
|
7,437,100
|
8,549,443
|
6,542,595
|
469,362
|
||||||||||||
Income from operations
|
336,639
|
3,253,591
|
1,806,117
|
109,602
|
||||||||||||
Income tax expense (benefit)
|
1,149,042
|
1,182,676
|
(110,426
|
)
|
622,612
|
|||||||||||
Net income (loss)
|
2,220,706
|
2,078,201
|
191,715
|
(468,373
|
)
|
|||||||||||
Basic earnings per common share
|
$
|
0.05
|
$
|
0.04
|
$
|
0.04
|
$
|
(0.01
|
)
|
|||||||
Diluted earnings per common share
|
$
|
0.05
|
$
|
0.04
|
$
|
0.04
|
$
|
(0.01
|
)
|
Exhibit No.
|
Exhibit Description
|
3.1
|
Articles of Incorporation(2)
|
3.2
|
Articles of Amendment to the Articles of Incorporation(3)
|
3.3
|
Amended and Restated Bylaws(1)
|
10.1
|
Securities Purchase Agreement, dated November 12, 2013 between the Registrant and the persons listed therein as purchasers(10)
|
10.2
|
Registration Rights Agreement, dated November 18, 2013 between the Registrant and the persons listed in the Securities Purchase Agreement as purchasers(11)
|
10.3
|
Employment Agreement of Brenton W. Hatch dated June 28, 2013(17)+
|
10.4
|
Employment Agreement of Harold Albert, dated June 28, 2013(18)+
|
10.5
|
Employment Agreement of Andrew Limpert, dated June 28, 2013(19)+
|
10.18
|
Employment Agreement of Ryan Oviatt, dated September 4, 2015(20)+
|
10.6
|
Form of Indemnification Agreement between the Registrant and its Directors(13)
|
10.7
|
2003 Stock Incentive Plan(14)
|
10.8
|
Profire Energy, Inc. 2010 Equity Incentive Plan(15)
|
10.9
|
Lease Agreement, dated June 12, 2013, between the Registrant and Whitestone Industrial-Office, LLC. (7)
|
10.10
|
Lease Agreement, dated May 16, 2014, between the Registrant and Paul Hall(8)
|
10.11
|
Lease Agreement, dated April 23, 2014, between the Registrant and Dennis Caka(9)
|
10.12
|
Consulting Agreement, dated March 24, 2014, between the Registrant on the one hand and Terra Industrial Corporation and Alan Johnson on the other (12)
|
10.13
|
Profire Energy, Inc. 2015 Equity Incentive Plan(16)
|
10.14
|
Form of Equity Grant Agreement, Nonqualified Stock Option*
|
10.15
|
Form of Equity Grant Agreement, Restricted Stock*
|
10.16
|
Form of Equity Grant Agreement, Restricted Stock Units*
|
10.17
|
Profire Energy, Inc. 2010 Equity Incentive Plan Amendment*
|
14.1
|
Code of Ethics(4)
|
21.1
|
Subsidiaries*
|
23.1
|
Consent of Sadler, Gibb & Associates, LLC, independent registered public accounting firm*
|
31.1
|
Certification of Chief Executive Officer Pursuant to Rule 13a-14(a)*
|
31.2
|
Certification of Chief Financial Officer Pursuant to Rule 13a-14(a)*
|
32.1
|
Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350*
|
32.2
|
Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350*
|
101 INS
|
XBRL Instance Document**
|
101 SCH
|
XBRL Schema Document**
|
101 CAL
|
XBRL Calculation Linkbase Document**
|
101 DEF
|
XBRL Definition Linkbase Document**
|
101 LAB
|
XBRL Labels Linkbase Document**
|
101 PRE
|
XBRL Presentation Linkbase Document**
|
Name of Participant:
|
||||
Total Number of Shares Granted:
|
||||
Type of Option:
|
Non-Incentive Stock Option
|
|||
Exercise Price Per Share:
|
$
|
|||
Date of Grant:
|
||||
Date Exercisable:
|
[Note: insert vesting schedule here]_
|
|||
Expiration Date:
|
PARTICIPANT:
|
PROFIRE ENERGY, INC.
|
||
By:
|
|||
Title:
|
Print Name
|
(i)
|
Participant will immediately forfeit any then unexercised portion of any Option included in this grant;
|
(ii)
|
Participant shall immediately return to the Company any Shares issued upon exercise of any Option included in this grant, and any Shares in this grant that are still under Participant's control; and
|
(iii)
|
Participant shall promptly pay to the Company an amount equal to the fair market value of all Shares included in this grant that are no longer under Participant's control (as measured on the exercise date of any such Option);
|
(iv)
|
In addition to the Company's rights set forth above, Participant agrees that this Agreement shall be subject to recovery by the Company in accordance with and to the maximum extent required under the Sarbanes-Oxley Act of 2002 and the Dodd-Frank Wall Street Reform and Consumer Protection Act.
|
On each of
the following dates |
Number of Shares
Vested |
||||
PROFIRE ENERGY, INC.
By: Name:
Title:
PARTICIPANT:
Print Name:
|
On each of
the following dates |
Number of Units Vested
|
|
PROFIRE ENERGY, INC.
By: Name:
Title:
PARTICIPANT:
Print Name:
|
I. | Section 3. | Exercise Procedure Withholding |
II. | Holder shall exercise the Option, or any portion thereof, by notifying the Company of the number of shares that he or she desires to purchase by delivering a completed Notice of Stock Option Exercise, a copy of which is attached hereto as Exhibit B. Such notice must be accompanied by payment in full of the exercise price for all shares to be purchased by (i) cash, check (bank check, certified check or personal check) or money order payable to the order of the Company, (ii) delivery of unencumbered shares previously acquired by Holder having a Fair Market Value on the date of exercise that is equal to the exercise price, (iii) withholding of shares that would otherwise be issued upon such exercise having a Fair Market Value on the date of exercise equal to the aggregate exercise price for the shares for which the Option is being exercised or (iv) a cashless (broker-assisted) exercise that complies with all applicable laws. |
III. |
IV. | The Option shall terminate and may no longer be exercised if Holder's Service terminates, except that: |
% Ownership
|
U.S. Subsidiaries
|
Non-U.S. Subsidiaries
|
||||
Profire Combustion, Inc., an Alberta, Canada corporation
|
100%
|
-
|
-
|
1. | I have reviewed this annual report on Form 10-K of Profire Energy, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) |
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b) |
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c) |
evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and
|
d) | disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) |
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date:
|
June 13, 2016
|
By:
|
/s/ Brenton W. Hatch
|
|
Brenton W. Hatch
|
||||
Chief Executive Officer
|
||||
(Principal Executive Officer)
|
1. | I have reviewed this annual report on Form 10-K of Profire Energy, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of registrant as of, and for, the periods presented in this report; |
4. |
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a) |
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b) |
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c) |
evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and
|
d) | disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) |
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date:
|
June 13, 2016
|
By:
|
/s/ Ryan Oviatt
|
|
Ryan Oviatt
|
||||
Chief Financial Officer
|
||||
(Principal Financial Officer)
|
(1) | the Report fully complies with the requirements of section 13 (a) or 15 (d) of the Securities Exchange Act of 1934; and |
(2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date:
|
June 13, 2016
|
By:
|
/s/ Brenton W. Hatch
|
|
Brenton W. Hatch
|
||||
Chief Executive Officer
|
(1) | the Report fully complies with the requirements of section 13 (a) or 15 (d) of the Securities Exchange Act of 1934; and |
(2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date:
|
June 13, 2016
|
By:
|
/s/ Ryan Oviatt
|
|
Ryan Oviatt
|
||||
Chief Financial Officer
|
Document and Entity Information - USD ($) |
12 Months Ended | ||
---|---|---|---|
Mar. 31, 2016 |
Jun. 06, 2016 |
Sep. 30, 2015 |
|
Document and Entity Information: | |||
Entity Registrant Name | Profire Energy Inc | ||
Document Type | 10-K | ||
Document Period End Date | Mar. 31, 2016 | ||
Trading Symbol | pfie | ||
Amendment Flag | false | ||
Entity Central Index Key | 0001289636 | ||
Current Fiscal Year End Date | --03-31 | ||
Entity Common Stock, Shares Outstanding | 53,316,134 | ||
Entity Public Float | $ 23,789,064 | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | No | ||
Document Fiscal Year Focus | 2016 | ||
Document Fiscal Period Focus | FY | ||
Entity Incorporation, Date of Incorporation | May 05, 2003 | ||
Entity Incorporation, State Country Name | Nevada |
CONSOLIDATED BALANCE SHEETS PARENTHETICAL - $ / shares |
Mar. 31, 2016 |
Mar. 31, 2015 |
---|---|---|
CONSOLIDATED BALANCE SHEETS PARENTHETICAL | ||
Preferred stock par value | $ 0.001 | $ 0.001 |
Preferred stock shares authorized | 10,000,000 | 10,000,000 |
Preferred stock shares issued | ||
Preferred stock shares outstanding | ||
Common stock par value | $ 0.001 | $ 0.001 |
Common stock shares authorized | 100,000,000 | 100,000,000 |
Common stock shares issued | 53,256,296 | 53,199,136 |
Common stock shares outstanding | 53,256,296 | 53,199,136 |
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) |
Common stock |
Additional Paid-in Capital |
Other Comprehensive Income |
Retained Earnings |
Total |
---|---|---|---|---|---|
Balance at Mar. 31, 2014 | $ 47,836 | $ 6,496,980 | $ (231,051) | $ 15,067,505 | $ 21,381,270 |
Balance - shares at Mar. 31, 2014 | 47,836,543 | ||||
Fair value of options vested | 1,280,785 | 1,280,785 | |||
Stock issued for asset acquisition | $ 266 | 999,734 | 1,000,000 | ||
Stock issued for asset acquisition - shares | 265,958 | ||||
Exercised options | $ 597 | 327,365 | 327,962 | ||
Exercised options - shares | 596,635 | ||||
Stock issuance | $ 4,500 | 16,420,188 | 16,424,688 | ||
Stock issuance - shares | 4,500,000 | ||||
Foreign currency translation | (1,657,930) | (1,657,930) | |||
NET INCOME | 5,747,683 | 5,747,683 | |||
Balance at Mar. 31, 2015 | $ 53,199 | 25,525,052 | (1,888,981) | 20,815,188 | 44,504,458 |
Balance - shares at Mar. 31, 2015 | 53,199,136 | ||||
Fair value of options vested | 565,646 | 565,646 | |||
Exercised options | $ 57 | 73,924 | 73,981 | ||
Exercised options - shares | 57,160 | ||||
Foreign currency translation | (393,701) | (393,701) | |||
NET INCOME | 34,744 | 34,744 | |||
Balance at Mar. 31, 2016 | $ 53,256 | $ 26,164,622 | $ (2,282,682) | $ 20,849,932 | $ 44,785,128 |
Balance - shares at Mar. 31, 2016 | 53,256,296 |
Note 1 - Significant Accounting Policies |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Note 1 - Significant Accounting Policies | Note 1 Organization and Summary of Significant Accounting Policies
This Organization and Summary of Significant Accounting Policies of Profire Energy, Inc. and Subsidiary (the Company) is presented to assist in understanding the Companys financial statements. The Companys accounting policies conform to accounting principles generally accepted in the United States of America (US GAAP). On September 30, 2008, The Flooring Zone, Inc. (the Parent) entered into an Acquisition Agreement with Profire Combustion, Inc. and the Shareholders of Profire Combustion, Inc. (the Subsidiary), subject to customary closing conditions. All conditions for closing were satisfied or waived and the transaction closed on October 9, 2008.
Pursuant to the terms and conditions of the Acquisition Agreement, 35,000,000 shares of restricted common stock of the Company were issued to the three shareholders of Profire Combustion, Inc., in exchange for all of the issued and outstanding shares of the Subsidiary. As a result of the transaction, Profire Combustion, Inc. became a wholly-owned subsidiary of the Parent and the shareholders of the Subsidiary became the controlling shareholders of the Company. For accounting purposes, the Subsidiary is considered the accounting acquirer, and the historical Balance Sheets, Statements of Operations and Other Comprehensive Income, and Statement of Cash Flow of the Subsidiary are presented as those of the Company. The historical equity information is that of Profire Combustion, Inc., the accounting acquiree. The recapitalization required pursuant to this merger resulted in a negative additional paid-in capital balance.
Organization and Line of Business
The Parent was incorporated on May 5, 2003 in the State of Nevada. The Subsidiary was incorporated on March 6, 2002 in the province of Alberta, Canada.
The Company provides products and services for burners and heaters for the oil and gas extraction industry in the Canadian and US markets.
Reclassification
Certain balances in previously issued financial statements have been reclassified to be consistent with the current period presentation.
Use of Estimates
The preparation of financial statements in accordance 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 reportable amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Principles of Consolidation
The consolidated financial statements include our wholly-owned subsidiary. Intercompany balances and transactions have been eliminated.
Basic and Diluted Earnings Per Share
The computation of basic earnings per share of common stock is based on the weighted average number of shares outstanding during the periods presented using the treasury stock method. The computation of fully diluted earnings per share includes common stock equivalents outstanding at the balance sheet date. The Company had equity awards of 315,791 and 71,015 included in the fully diluted earnings per share as of March 31, 2016 and 2015 respectively. Basic earnings per share for the years ended March 31, 2016 and 2015 are as follows:
Foreign Currency and Comprehensive Income
The functional currency of the Company and its subsidiaries in the U.S. and Canada are the U.S. Dollar ("USD") and the Canadian Dollar ("CAD"), respectively. The financial statements of the Company were translated to USD using year-end exchange rates for the balance sheet, and average exchange rates for the statements of operations. Equity transactions were translated using historical rates. The period-end exchange rates of 0.7711 and 0.7888 were used to convert the Companys March 31, 2016 and 2015 balance sheets, respectively, and the statements of operations used weighted average rates of 0.7642 and 0.8808 for the years ended March 31, 2016 and 2015, respectively. All amounts in the financial statements and footnotes are presumed to be stated in USD, unless otherwise identified. Foreign currency translation gains or losses as a result of fluctuations in the exchange rates are reflected in the Consolidated Statement of Income and Comprehensive Income (Loss), and the Consolidated Statements of Stockholders Equity.
Fair Value of Financial Instruments
The fair value of a financial instrument is the amount that could be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial assets are marked to bid prices and financial liabilities are marked to offer prices. Fair value measurements do not include transaction costs. A fair value hierarchy is used to prioritize the quality and reliability of the information used to determine fair values. Categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is defined into the following three categories:
Level 1: Quoted market prices in active markets for identical assets or liabilities. Level 2: Observable market-based inputs or inputs that are corroborated by market data. Level 3: Unobservable inputs that are not corroborated by market data.
Fair value estimates of financial instruments are made at a specific point in time, based on relevant information about financial markets and specific financial instruments. As these estimates are subjective in nature, involving uncertainties and matters of significant judgment, they cannot be determined with precision. Changes in assumptions can significantly affect estimated fair value.
The carrying value of cash, accounts receivable, accounts payable and accrued liabilities approximate their fair value because of the short-term nature of these instruments. Management is of the opinion that the Company is not exposed to significant interest or credit risks arising from these financial instruments.
Cash and Cash Equivalents
For purposes of the statement of cash flows, cash and cash equivalents include cash and all debt securities with an original maturity of 90 days or less. As of March 31, 2016 and 2015, cash and cash equivalents totaled $21,292,595 and $14,144,796 respectively. A small portion of these deposits were insured by the Companys banks and guaranteed by the FDIC and the CDIC.
Accounts Receivable
Receivables from the sale of goods and services are stated at net realizable value. This value includes an appropriate allowance for estimated uncollectible accounts. The allowance is calculated based on past collectability and customer relationships. The Company recorded an allowance for doubtful accounts of $250,646 and $108,641 as of March 31, 2016 and 2015, respectively.
Inventories
In accordance with ARB No. 43 Inventory Pricing, the Companys inventory is valued at the lower of cost (the purchase price, including additional fees) or market based on using the entire value of inventory. Inventories are determined based on the average cost basis. Inventory consists of finished goods held for sale. As of March 31, inventory consisted of the following:
The Company evaluates securities for other-than-temporary impairment at least on a yearly basis, and more frequently when economic or market conditions warrant such evaluation. Consideration is given to the length of time and amount of the loss relative to cost, the nature and financial condition of the issuer and the ability and intent of the Company to hold the investment for a time sufficient to allow any anticipated recovery in fair value. Pursuant to ASC 320-5, other than temporary impairment losses are recorded as impairment expense in the statement of operations during the period in which the impairment is determined.
Long-Lived Assets
The Company periodically reviews the carrying amount of long-lived assets for impairment. An asset is considered impaired when estimated future cash flows are less than the asset's carrying amount. In the event the carrying amount of such asset is not considered recoverable, the asset is adjusted to its fair value. Fair value is generally determined based on discounted future cash flow.
Other Intangible Assets
The Company accounts for Other Intangible Assets under the guidance of ASC 350, IntangiblesGoodwill and Other. The Company capitalizes certain costs related to patent technology, as a substantial portion of the purchase price related to the Companys acquisition has been assigned to patents. Under the guidance, Other Intangible Assets with definite lives are amortized over their estimated useful lives. Intangible assets with indefinite lives are tested annually for impairment.
Goodwill
Goodwill, representing the difference between the total purchase price and the fair value of assets (tangible and intangible) and liabilities at the date of acquisition, is reviewed for impairment annually, and more frequently as circumstances warrant, and written down only in the period in which the recorded value of such assets exceed their fair value. The Company does not amortize goodwill in accordance with Financial Accounting Standards Board (the FASB) Accounting Standards Codification (ASC) 350, IntangiblesGoodwill and Other (ASC 350). Goodwill is tested for impairment at the reporting unit level. The Companys two operating segments comprise the reporting unit for goodwill impairment testing purposes.
Revenue Recognition
The Company records sales when a firm sales agreement is in place, delivery has occurred or services have been rendered, and collectability of the fixed or determinable sales price is reasonably assured. If customer acceptance of products is not assured, the Company records sales only upon formal customer acceptance.
Cost of Sales
The Company includes product costs (i.e., material, direct labor and overhead costs), shipping and handling expense, production-related depreciation expense and product license agreement expense in cost of sales.
Advertising Costs
The Company classifies expenses for advertising as general and administrative expenses. The Company incurred advertising costs of $65,555 and $259,056 during the years ended March 31, 2016 and 2015, respectively.
Stock-Based Compensation
The Company follows the provisions of ASC 718, Share-Based Payment. which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values. The Company uses the Black-Scholes pricing model for determining the fair value of stock based compensation.
Concentration of Credit Risk
Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. The Company performs ongoing credit evaluations of its customers and maintains allowances for potential credit losses. Sales to the Companys four largest customers represented approximately 22% and 31% of total sales for the years ended March 31, 2016, and 2015, respectively. Sales to the Companys four largest customers represented approximately 22% of total sales. Sales to the Companys four largest customers represented approximately 33% of total sales.
Income Taxes
The Parent is subject to US income taxes on a stand-alone basis. The Parent and its Subsidiary file separate stand-alone tax returns in each jurisdiction in which they operate. The Subsidiary is a corporation operating in Canada and is subject to Canadian income taxes on its stand-alone taxable income. The effective rates of income tax are 78.6% and 33.1% for the years ended March 31, 2016 and 2015, respectively.
The Company utilizes an asset and liability approach for financial accounting and reporting for income taxes. Deferred income taxes are provided for temporary differences in the basis of assets and liabilities as reported for financial statement and income tax purposes. Deferred income taxes reflect the tax effects of net operating loss and tax credit carryovers and temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Realization of certain deferred tax assets is dependent upon future earnings, if any. The Company makes estimates and judgments in determining the need for a provision for income taxes, including the estimation of our taxable income for each full fiscal year.
Research and Development
All costs associated with research and development are expensed when incurred. Costs incurred for research and development were $899,013 and $1,832,671 for the years ended March 31, 2016 and 2015, respectively.
Shipping and Handling Fees and Costs
The Company records all amounts billed to customers related to shipping and handling fees as revenue. The Company classifies expenses for shipping and handling costs as cost of goods sold. The Company incurred shipping and handling costs of $251,351 and $498,994 during the years ended March 31, 2016 and 2015, respectively.
Comprehensive Income (Loss)
Comprehensive income includes net income as currently reported by the Company adjusted for other comprehensive items. Other comprehensive items for the Company consist of foreign currency translation gains and losses.
Recent Accounting Pronouncements
The Company has evaluated recent accounting pronouncements and their adoption has not had or is not expected to have a material impact on the Companys financial position, results of operations or cash flows.
Property and Equipment Useful Lives
Property and equipment is stated at cost. Depreciation on property and equipment is computed using the diminishing balance method over the estimated useful lives of the assets. The estimated useful lives of the assets are as follows:
Beginning in fiscal year 2016, the Company revised the estimated useful lives from 5 to 7 years for furniture and fixtures, and machinery and equipment, 25 to 30 years for buildings, 3 to 5 years for vehicles, and added a software asset type with a useful life of 2 years. The change in depreciable lives is considered a change in accounting estimate on a prospective basis from April 1, 2015 and had an immaterial impact on overall financial statements for the period ended December 31, 2015. |
Note 2 - Property and Equipment |
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Note 2 - Property and Equipment | Note 2 Property and equipment Property and equipment consisted of the following as of March 31, 2016 and 2015:
Depreciation expense for the years ended March 31, 2016 and 2015 are as follows:
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Note 3 - Stockholders' Equity |
12 Months Ended |
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Mar. 31, 2016 | |
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Note 3 - Stockholders' Equity | Note 3 Stockholders Equity
The Company had the following $0.001 par value authorized stock: Preferred Stock 10,000,000 shares. Common Stock 100,000,000 shares.
During the years ended March 31, 2016 and 2015, the Company did not issue shares of its common stock for services. As of March 31, 2016 and 2015, the Company had 53,256,296 and 53,199,136 shares of common stock, respectively. Please refer to Note 8 of the Consolidated Financial Statements for additional information regarding common stock issuances.
On June 2, 2014, we filed a registration statement on Form S-1 to register shares of our common stock with the Securities and Exchange Commission to be offered to the public by us and by certain selling stockholders named in the registration statement. We also filed amendments to such registration statement on June 19, 2015, June 24, 2014, June 25, 2014, and June 26, 2014. Our net proceeds from the sale of 4,500,000 shares of our common stock by us pursuant to the registration statement was approximately 16,424,688$16,430,000, after deducting underwriting discounts and commissions and estimated offering expenses payable by us. We did not receive any proceeds from the sale of shares of our common stock by the selling stockholders. We have used and plan to continue using the proceeds from the offering to help fund Company growth initiatives. |
Note 4 - Asset Purchases |
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Note 4 - Asset Purchases | NOTE 4 ASSET PURCHASES
VIM Injection Management Inc.
On November 14, 2014, the Company, entered into an agreement to purchase the assets of VIM Injection Management Inc. Pursuant to the asset purchase agreement, the purchase price of the assets consisted of a one-time payment of $750,000 in cash and 265,958 shares of the Companys common stock, which was valued at $1,000,000 ($3.76 per share). The value of the stock was based on the trading price on the date of issuance. Acquisition-related costs during the year ended March 31, 2015, which are included in the selling, general, and administrative expense in the accompanying consolidated statements of income, were not material. The results of operations related to this acquisition have been included in our Canadian segment since the acquisition date.
The total purchase price was allocated as follows:
With respect to the intangible assets of VIM, the Company intends to amortize each as follows, as this is the length of time the Company currently estimates that it will generate cash flow from the assets:
The total weighted-average amortization period for these acquired intangible assets is 20 years. |
Note 5 - Intangible Assets |
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Note 5 - Intangible Assets | NOTE 5 INTANGIBLE ASSETS
Definite-lived intangible assets consist of distribution agreements, patents, trademarks, copyrights, and domain names. The costs of the distribution agreements were amortized over the remaining life of the agreements. The costs of the patents are to be amortized over 20 years once the patent has been approved. Indefinite-lived intangible assets consist of goodwill. In accordance with ASC 350, Goodwill is not amortized but tested for impairment annually or more frequently when events or circumstances indicate that the carrying value of a reporting unit more likely than not exceeds its fair value. The Companys annual goodwill impairment testing date is March 31 of each year. Intangible assets consisted of the following as of March 31, 2016 and 2015:
Definite-lived intangible assets
Indefinite-lived intangible assets
Estimated amortization expense for the distribution agreements, patents, trademarks, copyrights, and domain names for the next five years consists of the following as of March 31, 2016:
Citing an Update to ASC 2011-08, entities are provided with the option of first performing a qualitative assessment on none, some, or all of its reporting units to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. If after completing a qualitative analysis, it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying value, a quantitative analysis is required. The Company elected to evaluate the goodwill associated with the VIM purchase using a quantitative two-step approach. The first step used to identify potential impairment involves comparing the reporting units estimated fair value to its carrying value, including goodwill. The aforementioned mentioned step one quantitative tests did not indicate impairment. During the first step of testing, the Company evaluated goodwill for impairment using a business valuation method, which is calculated as of a measurement date by determining the present value of debt-free, after-tax projected future cash flows, discounted at the weighted average cost of capital of a hypothetical third party buyer. This analysis also did not indicate impairment. The second step of the process involves the calculation of an implied fair value of goodwill for each reporting unit for which step one indicated impairment. The implied fair value of goodwill is determined by measuring the excess of the estimated fair value of the reporting unit over the estimated fair values of the individual assets, liabilities and identifiable intangibles as if the reporting unit was being acquired in a business combination. If the implied fair value of goodwill exceeds the carrying value of goodwill assigned to the reporting unit, there is no impairment. If the carrying value of goodwill assigned to a reporting unit exceeds the implied fair value of the goodwill, an impairment charge is recorded for the excess. An impairment loss cannot exceed the carrying value of goodwill assigned to a reporting unit and the subsequent reversal of goodwill impairment losses is not permitted. The determination of fair value requires the Company to make significant estimates and assumptions. These estimates and assumptions primarily include, but are not limited to, revenue growth and operating earnings projections, discount rates, terminal growth rates, and required capital expenditure projections. Due to the inherent uncertainty involved in making these estimates, actual results could differ materially from those estimates. Deterioration in the market or actual results as compared with the projections may ultimately result in a future impairment. In the event the Company determines that goodwill is impaired in the future, the Company would need to recognize a non-cash impairment charge. For 2016, the Company determined on a qualitative basis, it was not more likely than not that the fair value of the goodwill arising from the VIM acquisition was less than its carrying value. The Company did not have any impairment for the year ended March 31, 2016. |
Note 6 - Provision for Income Taxes |
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Note 6 - Provision for Income Taxes | Note 6 Provision for Income taxES
Reconciliation of US Federal/Canadian Statutory Income Tax Rate to Effective Income Tax Rate:
The following are temporary items: increase or decrease in rate resulting from depreciation and loss on equipment for book purposes in excess of depreciation for income tax purposes. These temporary differences are insignificant, for 2016 and 2015.
The Company adopted the provisions of ASC 740, Accounting for Uncertainty in Income Taxes, on January 1, 2007. As a result of the implementation of ASC 740, the Company recognized approximately no increase in the liability for unrecognized tax benefits.
The Company has no tax positions at March 31, 2016 and 2015 for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility.
The Company recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. During the years ended March 31, 2016 and 2015, the Company recognized no interest and penalties. The Company had no accruals for interest and penalties at March 31, 2016 and 2015.
Net deferred tax liability arising from the accelerated depreciation claimed by the Parent on its stand-alone tax return is $602,691 and $631,353 as of March 31, 2016 and 2015, respectively.
Net deferred tax asset arising from the deferred recognition of stock option compensation by the Parent on its stand-alone tax return is $549,270 and $501,920 as of March 31, 2016 and 2015, respectively
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Note 7 - Segment Information |
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Note 7 - Segment Information | NOTE 7 SEGMENT INFORMATION
The Company operates in the United States and Canada. Segment information for these geographic areas is as follows:
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Note 8 - Common Stock Purchase Options |
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Note 8 - Common Stock Purchase Options | NOTE 8 COMMON STOCK AND COMMON STOCK PURCHASE OPTIONS
On May 1, 2014, the Company issued a total of 133,900 stock purchase options exercisable for the purchase of its common stock at $4.03 per share. The options were issued to key employees. The options vest 1/5 each year for 5 years. The Company estimates the fair value of each stock award at the grant date by using the Black-Scholes option pricing model. The following weighted average assumptions were used for grants as of May 1, 2014: dividend yield of zero percent; expected volatility of 149%; risk-free interest rates of 0.82% and expected life of 3.5 years.
On May 1, 2014, the Company issued a total of 180,000 shares of restricted stock to key employees. The shares vest 1/5 each year for 5 years. The Company estimates the fair value of the restricted shares at their intrinsic value at time of granting.
On September 18, 2014, the Company issued a total of 79,812 shares of restricted stock units to the independent directors of the company. Half of the shares vested immediately with the remaining half vesting one year after issuance. Additionally, the company issued a total of 12,000 shares of restricted stock units to key employees. The units vest 1/5 each year for 5 years. The Company estimates the fair value of the units at their intrinsic value at time of granting.
On November 6, 2014, the Company issued a total of 49,999 shares of restricted stock units to key employees. The units vest 1/5 each year for 5 years based on performance and service longevity requirements. The Company estimates the fair value of the units at their intrinsic value at time of granting.
On March 27, 2015, the Company issued a total of 5,000 restricted stock units to a key employee. The units vest 1/5 each year for 5 years. The Company estimates the fair value of the units at their intrinsic value at time of granting.
On July 23, 2015, the Company issued a total of 208,334 restricted stock units to key employees. The units vest 1/5 each year for 5 years. The Company estimates the fair value of the units at their intrinsic value at time of granting.
On October 30, 2015, the Company issued a total of 320,000 restricted stock units to the independent directors of the company. Half of the shares vested immediately with the remaining half vesting September 17, 2016. The Company estimates the fair value of the units at their intrinsic value at time of granting.
A summary of the status of the Companys stock option plans as of March 31, 2016 and 2015 and the changes during the period are presented below:
The following table summarizes information about the stock options as of March 31, 2015:
The following table summarizes information about the stock options as of March 31, 2016:
The following table summarizes information about non-vested options as of the year ended March 31, 2016:
The following table summarizes information about non-vested restricted stock as of the year ended March 31, 2016:
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Note 9 - Commitments and Contingencies |
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Note 9 - Commitments and Contingencies | note 9 Commitments and Contingencies Royalties
The Company paid no royalties years ended March 31, 2016 and 2015, as a royalty agreement was replaced with a consulting agreement in March 2015. The agreement was executed between the Company and Terra Industrial, with Allen Johnson as agent. The intent of this agreement was to replace the aforementioned royalty agreements. The agreement is for the term of 10 years with fees of $100,000 CAD paid quarterly.
Contingent Liabilities
The future minimum lease payments for operating leases as of March 31, 2016, consisted of the following:
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Note 10 - Quarterly Results of Operations (unaudited) |
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Note 10 - Quarterly Results of Operations (unaudited) | Note 10 QUARTERLY RESULTS OF oPERATIONS (UNAUDITED)
Quarterly data for the years ended March 31, 2016 and 2015 consisted of the following:
Basic and diluted earnings per share are computed independently for each of the quarters presented. Therefore, the sum of the quarterly amounts may not equal the total computed for the year. |
Note 11 - Subsequent Events |
12 Months Ended |
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Mar. 31, 2016 | |
Notes | |
Note 11 - Subsequent Events | Note 11 Subsequent Events On May 13, 2016, Profire Energy, Inc. received a letter ("Notice") from The NASDAQ Stock Market LLC ("Nasdaq") notifying the Company that, because the closing bid price for its Common Stock has been below $1.00 per share for the prior 30 consecutive business days, it no longer complies with the minimum bid price requirement for continued listing on The Nasdaq Capital Market. Nasdaq Marketplace Rule 5550(a)(2) requires a minimum bid price of $1.00 per share (the "Minimum Bid Price Requirement"). Based on the closing bid price of the Company's Common Stock for the 30 consecutive business days prior to the date of Nasdaq's letter, the Company does not meet the Minimum Bid Price Requirement.
The Notice has no immediate effect on the listing of the Common Stock on The Nasdaq Capital Market. Pursuant to Nasdaq Marketplace Rule 5810(c)(3)(A), the Company has been provided an initial compliance period of 180 calendar days, or until November 9, 2016, to regain compliance with the Minimum Bid Price Requirement. If at any time before November 9, 2016, the closing bid price of the Common Stock is at least $1.00 per share for a minimum of 10 consecutive business days, Nasdaq will provide written confirmation stating that the Company has achieved compliance with the Minimum Bid Price Requirement. However, Nasdaq may, in its discretion, require the Company to satisfy the applicable Price-based Requirement for a period in excess of ten consecutive business days, but generally no more than 20 consecutive business days, before determining that the Company has demonstrated an ability to maintain long-term compliance. As of June 8, 2016, the Company had completed 10 consecutive business days with a closing bid price above $1.00, however, Nasdaq, in their discretion, informed the Company that it had extended the Price-based Requirement term to 20 days.
The Notice also provides that, if the Company does not regain compliance with the Minimum Bid Price Requirement by November 9, 2016, it may be eligible for additional time to regain compliance. To qualify for additional time, the Company will be required to meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for The Nasdaq Capital Market, with the exception of the Minimum Bid Price Requirement, and provide written notice of its intention to cure the minimum bid price deficiency during the second compliance period, by effecting a reverse split, if necessary. If the Company meets these requirements, it will be granted an additional compliance period of 180 calendar days to regain compliance with the Minimum Bid Price Requirement. If the Nasdaq staff determines that the Company will not be able to cure the deficiency, or if the Company is otherwise not eligible for such additional compliance period, Nasdaq will provide notice that the Company's Common Stock will be subject to delisting. The Company would have the right to appeal a determination to delist its Common Stock, and the Common Stock would remain listed on The Nasdaq Capital Market until the completion of the appeal process.
The Company intends to resolve the situation and consider available options to regain compliance with the Minimum Bid Price Requirement and continued listing on The Nasdaq Capital Market.
On May 26, 2016, announced that its Board of Directors had authorized a share repurchase program allowing the Company to repurchase up to $2,000,000 worth of the Company's common stock from time to time through May 25, 2017. Any purchases under the program will be made at the discretion of management. The size and timing of any purchases will depend on price, market and business conditions and other factors. Open market purchases will be conducted in accordance with applicable legal requirements. The repurchase program may be suspended, terminated or modified at any time for any reason, including market conditions, the cost of repurchasing shares, the availability of alternative investment opportunities, liquidity, and other factors deemed appropriate. These factors may also affect the timing and amount of share repurchases. The repurchase program does not obligate the Company to purchase any particular number of shares.
On May 4, 2016, the Company issued a total of 59,953 restricted shares to one of its Independent Directors. The shares were issued in the settlement of previously granted and vested restricted stock units. |
Note 1 - Significant Accounting Policies: Organization and Line of Business (Policies) |
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Mar. 31, 2016 | |
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Organization and Line of Business | Organization and Line of Business
The Parent was incorporated on May 5, 2003 in the State of Nevada. The Subsidiary was incorporated on March 6, 2002 in the province of Alberta, Canada.
The Company provides products and services for burners and heaters for the oil and gas extraction industry in the Canadian and US markets. |
Note 1 - Significant Accounting Policies: Reclassification (Policies) |
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Mar. 31, 2016 | |
Policies | |
Reclassification | Reclassification
Certain balances in previously issued financial statements have been reclassified to be consistent with the current period presentation. |
Note 1 - Significant Accounting Policies: Use of Estimates (Policies) |
12 Months Ended |
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Mar. 31, 2016 | |
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Use of Estimates | Use of Estimates
The preparation of financial statements in accordance 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 reportable amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Note 1 - Significant Accounting Policies: Principles of Consolidation (Policies) |
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Principles of Consolidation | Principles of Consolidation
The consolidated financial statements include our wholly-owned subsidiary. Intercompany balances and transactions have been eliminated. |
Note 1 - Significant Accounting Policies: Basic and Diluted Earnings Per Share (Policies) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||
Policies | |||||||||||||||||||||||||||||||||||||||||||
Basic and Diluted Earnings Per Share | Basic and Diluted Earnings Per Share
The computation of basic earnings per share of common stock is based on the weighted average number of shares outstanding during the periods presented using the treasury stock method. The computation of fully diluted earnings per share includes common stock equivalents outstanding at the balance sheet date. The Company had equity awards of 315,791 and 71,015 included in the fully diluted earnings per share as of March 31, 2016 and 2015 respectively. Basic earnings per share for the years ended March 31, 2016 and 2015 are as follows:
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Note 1 - Significant Accounting Policies: Foreign Currency and Comprehensive Income (Policies) |
12 Months Ended |
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Mar. 31, 2016 | |
Policies | |
Foreign Currency and Comprehensive Income | Foreign Currency and Comprehensive Income
The functional currency of the Company and its subsidiaries in the U.S. and Canada are the U.S. Dollar ("USD") and the Canadian Dollar ("CAD"), respectively. The financial statements of the Company were translated to USD using year-end exchange rates for the balance sheet, and average exchange rates for the statements of operations. Equity transactions were translated using historical rates. The period-end exchange rates of 0.7711 and 0.7888 were used to convert the Companys March 31, 2016 and 2015 balance sheets, respectively, and the statements of operations used weighted average rates of 0.7642 and 0.8808 for the years ended March 31, 2016 and 2015, respectively. All amounts in the financial statements and footnotes are presumed to be stated in USD, unless otherwise identified. Foreign currency translation gains or losses as a result of fluctuations in the exchange rates are reflected in the Consolidated Statement of Income and Comprehensive Income (Loss), and the Consolidated Statements of Stockholders Equity. |
Note 1 - Significant Accounting Policies: Fair Value of Financial Instruments (Policies) |
12 Months Ended |
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Mar. 31, 2016 | |
Policies | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments
The fair value of a financial instrument is the amount that could be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial assets are marked to bid prices and financial liabilities are marked to offer prices. Fair value measurements do not include transaction costs. A fair value hierarchy is used to prioritize the quality and reliability of the information used to determine fair values. Categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is defined into the following three categories:
Level 1: Quoted market prices in active markets for identical assets or liabilities. Level 2: Observable market-based inputs or inputs that are corroborated by market data. Level 3: Unobservable inputs that are not corroborated by market data.
Fair value estimates of financial instruments are made at a specific point in time, based on relevant information about financial markets and specific financial instruments. As these estimates are subjective in nature, involving uncertainties and matters of significant judgment, they cannot be determined with precision. Changes in assumptions can significantly affect estimated fair value.
The carrying value of cash, accounts receivable, accounts payable and accrued liabilities approximate their fair value because of the short-term nature of these instruments. Management is of the opinion that the Company is not exposed to significant interest or credit risks arising from these financial instruments. |
Note 1 - Significant Accounting Policies: Cash and Cash Equivalents (Policies) |
12 Months Ended |
---|---|
Mar. 31, 2016 | |
Policies | |
Cash and Cash Equivalents | Cash and Cash Equivalents
For purposes of the statement of cash flows, cash and cash equivalents include cash and all debt securities with an original maturity of 90 days or less. As of March 31, 2016 and 2015, cash and cash equivalents totaled $21,292,595 and $14,144,796 respectively. A small portion of these deposits were insured by the Companys banks and guaranteed by the FDIC and the CDIC. |
Note 1 - Significant Accounting Policies: Accounts Receivable (Policies) |
12 Months Ended |
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Mar. 31, 2016 | |
Policies | |
Accounts Receivable | Accounts Receivable
Receivables from the sale of goods and services are stated at net realizable value. This value includes an appropriate allowance for estimated uncollectible accounts. The allowance is calculated based on past collectability and customer relationships. The Company recorded an allowance for doubtful accounts of $250,646 and $108,641 as of March 31, 2016 and 2015, respectively. |
Note 1 - Significant Accounting Policies: Inventories (Policies) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||
Policies | |||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | Inventories
In accordance with ARB No. 43 Inventory Pricing, the Companys inventory is valued at the lower of cost (the purchase price, including additional fees) or market based on using the entire value of inventory. Inventories are determined based on the average cost basis. Inventory consists of finished goods held for sale. As of March 31, inventory consisted of the following:
The Company evaluates securities for other-than-temporary impairment at least on a yearly basis, and more frequently when economic or market conditions warrant such evaluation. Consideration is given to the length of time and amount of the loss relative to cost, the nature and financial condition of the issuer and the ability and intent of the Company to hold the investment for a time sufficient to allow any anticipated recovery in fair value. Pursuant to ASC 320-5, other than temporary impairment losses are recorded as impairment expense in the statement of operations during the period in which the impairment is determined. |
Note 1 - Significant Accounting Policies: Long-lived Assets (Policies) |
12 Months Ended |
---|---|
Mar. 31, 2016 | |
Policies | |
Long-lived Assets | Long-Lived Assets
The Company periodically reviews the carrying amount of long-lived assets for impairment. An asset is considered impaired when estimated future cash flows are less than the asset's carrying amount. In the event the carrying amount of such asset is not considered recoverable, the asset is adjusted to its fair value. Fair value is generally determined based on discounted future cash flow. |
Note 1 - Significant Accounting Policies: Other Intangible Assets & Goodwill (Policies) |
12 Months Ended |
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Mar. 31, 2016 | |
Policies | |
Other Intangible Assets & Goodwill | Other Intangible Assets
The Company accounts for Other Intangible Assets under the guidance of ASC 350, IntangiblesGoodwill and Other. The Company capitalizes certain costs related to patent technology, as a substantial portion of the purchase price related to the Companys acquisition has been assigned to patents. Under the guidance, Other Intangible Assets with definite lives are amortized over their estimated useful lives. Intangible assets with indefinite lives are tested annually for impairment.
Goodwill
Goodwill, representing the difference between the total purchase price and the fair value of assets (tangible and intangible) and liabilities at the date of acquisition, is reviewed for impairment annually, and more frequently as circumstances warrant, and written down only in the period in which the recorded value of such assets exceed their fair value. The Company does not amortize goodwill in accordance with Financial Accounting Standards Board (the FASB) Accounting Standards Codification (ASC) 350, IntangiblesGoodwill and Other (ASC 350). Goodwill is tested for impairment at the reporting unit level. The Companys two operating segments comprise the reporting unit for goodwill impairment testing purposes. |
Note 1 - Significant Accounting Policies: Revenue Recognition (Policies) |
12 Months Ended |
---|---|
Mar. 31, 2016 | |
Policies | |
Revenue Recognition | Revenue Recognition
The Company records sales when a firm sales agreement is in place, delivery has occurred or services have been rendered, and collectability of the fixed or determinable sales price is reasonably assured. If customer acceptance of products is not assured, the Company records sales only upon formal customer acceptance. |
Note 1 - Significant Accounting Policies: Cost of Sales (Policies) |
12 Months Ended |
---|---|
Mar. 31, 2016 | |
Policies | |
Cost of Sales | Cost of Sales
The Company includes product costs (i.e., material, direct labor and overhead costs), shipping and handling expense, production-related depreciation expense and product license agreement expense in cost of sales. |
Note 1 - Significant Accounting Policies: Advertising Costs (Policies) |
12 Months Ended |
---|---|
Mar. 31, 2016 | |
Policies | |
Advertising Costs | Advertising Costs
The Company classifies expenses for advertising as general and administrative expenses. The Company incurred advertising costs of $65,555 and $259,056 during the years ended March 31, 2016 and 2015, respectively. |
Note 1 - Significant Accounting Policies: Stock-based Compensation (Policies) |
12 Months Ended |
---|---|
Mar. 31, 2016 | |
Policies | |
Stock-based Compensation | Stock-Based Compensation
The Company follows the provisions of ASC 718, Share-Based Payment. which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values. The Company uses the Black-Scholes pricing model for determining the fair value of stock based compensation. |
Note 1 - Significant Accounting Policies: Concentration of Credit Risk (Policies) |
12 Months Ended |
---|---|
Mar. 31, 2016 | |
Policies | |
Concentration of Credit Risk | Concentration of Credit Risk
Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. The Company performs ongoing credit evaluations of its customers and maintains allowances for potential credit losses. Sales to the Companys four largest customers represented approximately 22% and 31% of total sales for the years ended March 31, 2016, and 2015, respectively. Sales to the Companys four largest customers represented approximately 22% of total sales. Sales to the Companys four largest customers represented approximately 33% of total sales. |
Note 1 - Significant Accounting Policies: Income Taxes (Policies) |
12 Months Ended |
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Mar. 31, 2016 | |
Policies | |
Income Taxes | Income Taxes
The Parent is subject to US income taxes on a stand-alone basis. The Parent and its Subsidiary file separate stand-alone tax returns in each jurisdiction in which they operate. The Subsidiary is a corporation operating in Canada and is subject to Canadian income taxes on its stand-alone taxable income. The effective rates of income tax are 78.6% and 33.1% for the years ended March 31, 2016 and 2015, respectively.
The Company utilizes an asset and liability approach for financial accounting and reporting for income taxes. Deferred income taxes are provided for temporary differences in the basis of assets and liabilities as reported for financial statement and income tax purposes. Deferred income taxes reflect the tax effects of net operating loss and tax credit carryovers and temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Realization of certain deferred tax assets is dependent upon future earnings, if any. The Company makes estimates and judgments in determining the need for a provision for income taxes, including the estimation of our taxable income for each full fiscal year. |
Note 1 - Significant Accounting Policies: Research and Development (Policies) |
12 Months Ended |
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Mar. 31, 2016 | |
Policies | |
Research and Development | Research and Development
All costs associated with research and development are expensed when incurred. Costs incurred for research and development were $899,013 and $1,832,671 for the years ended March 31, 2016 and 2015, respectively. |
Note 1 - Significant Accounting Policies: Shipping and Handling Fees and Costs (Policies) |
12 Months Ended |
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Mar. 31, 2016 | |
Policies | |
Shipping and Handling Fees and Costs | Shipping and Handling Fees and Costs
The Company records all amounts billed to customers related to shipping and handling fees as revenue. The Company classifies expenses for shipping and handling costs as cost of goods sold. The Company incurred shipping and handling costs of $251,351 and $498,994 during the years ended March 31, 2016 and 2015, respectively. |
Note 1 - Significant Accounting Policies: Comprehensive Income (Loss) (Policies) |
12 Months Ended |
---|---|
Mar. 31, 2016 | |
Policies | |
Comprehensive Income (Loss) | Comprehensive Income (Loss)
Comprehensive income includes net income as currently reported by the Company adjusted for other comprehensive items. Other comprehensive items for the Company consist of foreign currency translation gains and losses. |
Note 1 - Significant Accounting Policies: Recent Accounting Pronouncements (Policies) |
12 Months Ended |
---|---|
Mar. 31, 2016 | |
Policies | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements
The Company has evaluated recent accounting pronouncements and their adoption has not had or is not expected to have a material impact on the Companys financial position, results of operations or cash flows. |
Note 1 - Significant Accounting Policies: Property and Equipment Useful Lives (Policies) |
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||
Policies | |||||||||||||||||||||||||||||||||||||||||
Property and Equipment Useful Lives | Property and Equipment Useful Lives
Property and equipment is stated at cost. Depreciation on property and equipment is computed using the diminishing balance method over the estimated useful lives of the assets. The estimated useful lives of the assets are as follows:
Beginning in fiscal year 2016, the Company revised the estimated useful lives from 5 to 7 years for furniture and fixtures, and machinery and equipment, 25 to 30 years for buildings, 3 to 5 years for vehicles, and added a software asset type with a useful life of 2 years. The change in depreciable lives is considered a change in accounting estimate on a prospective basis from April 1, 2015 and had an immaterial impact on overall financial statements for the period ended December 31, 2015. |
Note 1 - Significant Accounting Policies: Basic and Diluted Earnings Per Share: Schedule of Earnings Per Share, Basic and Diluted (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||
Tables/Schedules | |||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted |
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Note 1 - Significant Accounting Policies: Inventories: Schedule of Inventory, Current (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||
Tables/Schedules | |||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Inventory, Current |
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Note 1 - Significant Accounting Policies: Property and Equipment Useful Lives: Schedule Of Estimated Useful Lives Of Assets (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||
Tables/Schedules | |||||||||||||||||||||||||||||||||||||||||
Schedule Of Estimated Useful Lives Of Assets |
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Note 2 - Property and Equipment: Property, Plant and Equipment (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tables/Schedules | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment |
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Note 2 - Property and Equipment: Schedule Of Depreciation Expense Property And Equipment (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||
Tables/Schedules | |||||||||||||||||||||||||||||||
Schedule Of Depreciation Expense Property And Equipment |
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Note 4 - Asset Purchases: Schedule of Indefinite-lived Intangible Assets Acquired as Part of Business Combination (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tables/Schedules | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Indefinite-lived Intangible Assets Acquired as Part of Business Combination |
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Note 5 - Intangible Assets: Schedule of Finite-Lived Intangible Assets (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tables/Schedules | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Finite-Lived Intangible Assets |
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Note 5 - Intangible Assets: Schedule of Indefinite-Lived Intangible Assets (Tables) |
12 Months Ended | ||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||
Tables/Schedules | |||||||||||||||||||||||||
Schedule of Indefinite-Lived Intangible Assets |
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Note 5 - Intangible Assets: Schedule of Finite-Lived Intangible Assets, Future Amortization Expense (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||
Tables/Schedules | |||||||||||||||||||||||||||||
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense |
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Note 6 - Provision for Income Taxes: Schedule of Effective Income Tax Rate Reconciliation (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tables/Schedules | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Effective Income Tax Rate Reconciliation |
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Note 7 - Segment Information: Schedule of Segment Reporting Information, by Segment (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tables/Schedules | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information, by Segment |
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Note 8 - Common Stock Purchase Options: Schedule of Share-based Compensation, Activity (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tables/Schedules | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Share-based Compensation, Activity |
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Note 8 - Common Stock Purchase Options: Schedule of Share Based Compensation Arrangement by Share Based Payment Award Options Outstanding and Exercisable (Tables) |
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tables/Schedules | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Share Based Compensation Arrangement by Share Based Payment Award Options Outstanding and Exercisable | The following table summarizes information about the stock options as of March 31, 2015:
The following table summarizes information about the stock options as of March 31, 2016:
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Note 8 - Common Stock Purchase Options: Schedule of Nonvested Share Activity (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||
Tables/Schedules | |||||||||||||||||||||||||||||||||||||
Schedule of Nonvested Share Activity |
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Note 8 - Common Stock Purchase Options: Schedule of Share-based Compensation Arrangement by Share-based Payment Award, Restricted Stock Units, Vested, Non-Vested and Expected to Vest (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tables/Schedules | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Share-based Compensation Arrangement by Share-based Payment Award, Restricted Stock Units, Vested, Non-Vested and Expected to Vest |
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Note 9 - Commitments and Contingencies: Schedule of Future Minimum Lease Payments for Operating Leases (Tables) |
12 Months Ended | ||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||
Tables/Schedules | |||||||||||||||||||
Schedule of Future Minimum Lease Payments for Operating Leases |
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Note 1 - Significant Accounting Policies: Organization and Line of Business (Details) |
12 Months Ended |
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Mar. 31, 2016 | |
Details | |
Entity Incorporation, Date of Incorporation | May 05, 2003 |
Entity Incorporation, State Country Name | Nevada |
Note 1 - Significant Accounting Policies: Basic and Diluted Earnings Per Share: Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Details | ||
Net income applicable to common shareholders | $ 34,744 | $ 5,747,683 |
BASIC WEIGHTED AVG NUMBER OF SHARES OUTSTANDING | 53,243,151 | 51,609,760 |
FULLY DILUTED WEIGHTED AVG NUMBER OF SHARES OUTSTANDING | 53,558,942 | 51,680,775 |
BASIC EARNINGS PER SHARE | $ 0.00 | $ 0.11 |
FULLY DILUTED EARNINGS PER SHARE | $ 0.00 | $ 0.11 |
Note 1 - Significant Accounting Policies: Foreign Currency and Comprehensive Income (Details) |
12 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Details | ||
Foreign Currency Exchange Rate, Translation | 0.7711 | 0.7888 |
Weighted Average Exchange Rate | 0.7642 | 0.8808 |
Note 1 - Significant Accounting Policies: Cash and Cash Equivalents (Details) - USD ($) |
Mar. 31, 2016 |
Mar. 31, 2015 |
Mar. 31, 2014 |
---|---|---|---|
Details | |||
Cash and cash equivalents | $ 21,292,595 | $ 14,144,796 | $ 4,456,674 |
Note 1 - Significant Accounting Policies: Accounts Receivable (Details) - USD ($) |
Mar. 31, 2016 |
Mar. 31, 2015 |
---|---|---|
Details | ||
Allowance for Doubtful Accounts Receivable | $ 250,646 | $ 108,641 |
Note 1 - Significant Accounting Policies: Inventories: Schedule of Inventory, Current (Details) - USD ($) |
Mar. 31, 2016 |
Mar. 31, 2015 |
---|---|---|
Details | ||
Inventory, Raw Materials, Gross | $ 967,823 | |
Inventory, Finished Goods, Gross | 10,316,857 | $ 11,951,108 |
Subtotal | 11,284,680 | 11,951,108 |
Reserves for obsolescence | (237,998) | (184,573) |
Inventories | $ 11,046,682 | $ 11,766,535 |
Note 1 - Significant Accounting Policies: Advertising Costs (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Details | ||
Advertising Expense | $ 65,555 | $ 259,056 |
Note 1 - Significant Accounting Policies: Concentration of Credit Risk (Details) |
12 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Details | ||
Concentration Risk, Customer | Sales to the Companys four largest customers represented approximately 22% of total sales. | Sales to the Companys four largest customers represented approximately 33% of total sales. |
Note 1 - Significant Accounting Policies: Research and Development (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Details | ||
Research and development | $ 899,013 | $ 1,832,671 |
Note 1 - Significant Accounting Policies: Shipping and Handling Fees and Costs (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Details | ||
Shipping, Handling and Transportation Costs | $ 251,351 | $ 498,994 |
Note 1 - Significant Accounting Policies: Property and Equipment Useful Lives: Schedule Of Estimated Useful Lives Of Assets (Details) |
12 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Furniture and Fixtures | ||
Property, Plant and Equipment, Useful Life | 7 years | 5 years |
Machinery and Equipment | ||
Property, Plant and Equipment, Useful Life | 7 years | 5 years |
Building | ||
Property, Plant and Equipment, Useful Life | 30 years | 25 years |
Vehicles | ||
Property, Plant and Equipment, Useful Life | 5 years | 3 years |
Computer Equipment | ||
Property, Plant and Equipment, Useful Life | 3 years | 3 years |
Software and Software Development Costs | ||
Property, Plant and Equipment, Useful Life | 2 years |
Note 2 - Property and Equipment: Property, Plant and Equipment (Details) - USD ($) |
Mar. 31, 2016 |
Mar. 31, 2015 |
---|---|---|
Details | ||
Office furniture and equipment | $ 968,135 | $ 937,274 |
Service and shop equipment | 577,240 | 573,233 |
Vehicles | 2,715,920 | 3,040,439 |
Land and buildings | 6,733,415 | 6,746,597 |
Total property and equipment | 10,994,710 | 11,297,543 |
Accumulated depreciation | (2,761,799) | (2,021,578) |
Net property and equipment | $ 8,232,911 | $ 9,275,965 |
Note 2 - Property and Equipment: Schedule Of Depreciation Expense Property And Equipment (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Details | ||
Cost of goods sold | $ 474,539 | $ 582,088 |
General and administrative | 516,786 | 558,231 |
Total Depreciation Expense | $ 991,325 | $ 1,140,319 |
Note 3 - Stockholders' Equity (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Mar. 31, 2015 |
Mar. 31, 2016 |
|
Preferred stock par value | $ 0.001 | $ 0.001 |
Common stock par value | $ 0.001 | $ 0.001 |
Preferred stock shares authorized | 10,000,000 | 10,000,000 |
Common stock shares authorized | 100,000,000 | 100,000,000 |
Common stock shares outstanding | 53,199,136 | 53,256,296 |
Stock issuance | $ 16,424,688 | |
Common stock | ||
Stock issuance - shares | 4,500,000 | |
Stock issuance | $ 4,500 |
Note 4 - Asset Purchases (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Details | ||
Cash paid for asset acquisition | $ 750,000 | |
Stock Issued During Period, Shares, Acquisitions | 265,958 | |
Stock issued for acquisition | $ 1,000,000 |
Note 4 - Asset Purchases: Schedule of Indefinite-lived Intangible Assets Acquired as Part of Business Combination (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Mar. 31, 2015 |
Mar. 31, 2016 |
|
Cash paid for asset acquisition | $ 750,000 | |
Stock issued for acquisition | 1,000,000 | |
Total Purchase Price | 1,750,000 | |
Total Consideration Received | 752,299 | |
Goodwill | 997,701 | $ 997,701 |
Inventory | ||
Total Consideration Received | 54,577 | |
Tundra Distribution Agreement | ||
Total Consideration Received | 46,722 | |
Patents | ||
Total Consideration Received | 650,000 | |
Intellectual Property | ||
Total Consideration Received | $ 1,000 |
Note 5 - Intangible Assets: Schedule of Finite-Lived Intangible Assets (Details) - USD ($) |
Mar. 31, 2016 |
Mar. 31, 2015 |
---|---|---|
Details | ||
Distribution Agreements, Gross | $ 40,702 | $ 41,638 |
Accumulated Amortization of Other Deferred Costs | (40,702) | (27,757) |
Distribution Agreements, Net | 13,881 | |
Other Finite-Lived Intangible Assets, Gross | 567,109 | 580,138 |
Intangible assets, net of accumulated amortization | $ 529,300 | $ 594,019 |
Note 5 - Intangible Assets: Schedule of Indefinite-Lived Intangible Assets (Details) - USD ($) |
Mar. 31, 2016 |
Mar. 31, 2015 |
---|---|---|
Details | ||
Goodwill | $ 997,701 | $ 997,701 |
Note 5 - Intangible Assets: Schedule of Finite-Lived Intangible Assets, Future Amortization Expense (Details) |
Mar. 31, 2016
USD ($)
|
---|---|
Details | |
Finite-Lived Intangible Assets, Amortization Expense, Next Twelve Months | $ 28,103 |
Finite-Lived Intangible Assets, Amortization Expense, Year Two | 28,103 |
Finite-Lived Intangible Assets, Amortization Expense, Year Three | 28,103 |
Finite-Lived Intangible Assets, Amortization Expense, Year Four | 28,103 |
Finite-Lived Intangible Assets, Amortization Expense, Year Five | $ 28,103 |
Note 6 - Provision for Income Taxes: Schedule of Effective Income Tax Rate Reconciliation (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Details | ||
United States statutory income tax rate | 35.00% | 35.00% |
Decrease in rate on income subject to Canadian income tax rates | $ (0.0150) | |
Increase (decrease) in rate resulting from non-deductible expenses and deductible adjustments | $ 0.4360 | $ (0.0040) |
Effective income tax rate | 78.60% | 33.10% |
-Current | $ 363,768 | $ 1,187,957 |
-Deferred | (89,337) | 442,095 |
Foreign (Canadian and Provincial) Income Taxes | (240,372) | 998,280 |
-Current | 93,768 | 215,572 |
INCOME TAX EXPENSE | $ 127,828 | $ 2,843,905 |
Note 6 - Provision for Income Taxes (Details) - USD ($) |
Mar. 31, 2016 |
Mar. 31, 2015 |
---|---|---|
Details | ||
Deferred Tax Liability Driven By Depreciation Differences | $ 602,691 | $ 631,353 |
Deferred Tax Asset Related To Stock Comp Expense | $ 549,270 | $ 501,920 |
Note 7 - Segment Information: Schedule of Segment Reporting Information, by Segment (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Total Revenues | $ 27,072,446 | $ 51,179,392 |
PROPERTY AND EQUIPMENT, net | 8,232,911 | 9,275,965 |
CANADA | ||
Total Revenues | 6,010,042 | 14,769,787 |
PROPERTY AND EQUIPMENT, net | 1,067,346 | 1,231,434 |
UNITED STATES | ||
Total Revenues | 21,062,404 | 36,409,605 |
PROPERTY AND EQUIPMENT, net | $ 7,165,565 | $ 8,044,531 |
Note 9 - Commitments and Contingencies: Schedule of Future Minimum Lease Payments for Operating Leases (Details) |
Mar. 31, 2016
USD ($)
|
---|---|
Details | |
Operating Leases, Future Minimum Payments, Next Rolling Twelve Months | $ 35,724 |
Operating Leases, Future Minimum Payments Due | $ 35,724 |
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