Document_And_Entity_Informatio
Document And Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Nov. 08, 2013 | |
Document and Entity Information [Abstract] | ' | ' |
Entity Registrant Name | 'TALON INTERNATIONAL, INC. | ' |
Document Type | '10-Q | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Common Stock, Shares Outstanding | ' | 91,337,217 |
Amendment Flag | 'false | ' |
Entity Central Index Key | '0001047881 | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Voluntary Filers | 'No | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Well-known Seasoned Issuer | 'No | ' |
Document Period End Date | 30-Sep-13 | ' |
Document Fiscal Year Focus | '2013 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Consolidated_Balance_Sheets_Cu
Consolidated Balance Sheets (Current Period Unaudited) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Assets | ' | ' |
Cash and cash equivalents | $3,974,977 | $8,927,333 |
Accounts receivable, net | 3,525,802 | 3,635,136 |
Inventories, net | 971,598 | 730,503 |
Prepaid expenses and other current assets | 561,143 | 456,460 |
Total current assets | 9,033,520 | 13,749,432 |
Property and equipment, net | 719,580 | 763,770 |
Intangible assets, net | 4,270,381 | 4,279,943 |
Other assets | 215,753 | 182,671 |
Total assets | 14,239,234 | 18,975,816 |
Liabilities, Preferred Stock and Stockholders’ Equity (Deficit) | ' | ' |
Accounts payable | 7,426,172 | 7,866,662 |
Accrued expenses | 2,916,930 | 2,023,535 |
Note payable | 5,800,000 | ' |
Current portion of capital lease obligations | 657 | 3,247 |
Total current liabilities | 16,143,759 | 9,893,444 |
Deferred income taxes | 1,053,860 | 945,543 |
Other liabilities | 27,920 | 186,051 |
Total liabilities | 17,225,539 | 11,025,038 |
Commitments and contingencies (Note 12) | ' | ' |
Common Stock, $0.001 par value, 100,000,000 shares authorized; 91,913,217 and 23,400,808 shares issued and outstanding at September 30, 2013 and December 31, 2012, respectively | 91,913 | 23,401 |
Additional paid-in capital | 64,113,369 | 58,458,731 |
Accumulated deficit | -67,310,141 | -74,578,052 |
Accumulated other comprehensive income | 118,554 | 67,482 |
Total stockholders’ equity (deficit) | -2,986,305 | -16,028,438 |
Total liabilities, preferred stock and stockholders’ equity (deficit) | 14,239,234 | 18,975,816 |
Series B Convertible Preferred Stock [Member] | ' | ' |
Liabilities, Preferred Stock and Stockholders’ Equity (Deficit) | ' | ' |
Series B Convertible Preferred Stock, $0.001 par value; no shares authorized, issued or outstanding at September 30, 2013; 407,160 shares outstanding at December 31, 2012 | ' | $23,979,216 |
Consolidated_Balance_Sheets_Cu1
Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Common Stock, par value (in Dollars per share) | $0.00 | $0.00 |
Common Stock, shares authorized | 100,000,000 | 100,000,000 |
Common Stock, shares issued | 91,913,217 | 23,400,808 |
Common Stock,shares outstanding | 91,913,217 | 23,400,808 |
Series B Convertible Preferred Stock [Member] | ' | ' |
Series B Convertible Preferred Stock par value (in Dollars per share) | ' | $0.00 |
Series B Convertible Preferred Stock shares authorized | 0 | 407,160 |
Series B Convertible Preferred Stock shares issued | 0 | 407,160 |
Series B Convertible Preferred Stock shares outstanding | 0 | 407,160 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations and Comprehensive Income (Unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Net sales | $13,728,037 | $11,288,717 | $40,508,751 | $33,214,516 |
Cost of goods sold | 9,143,655 | 7,637,845 | 27,196,451 | 22,434,159 |
Gross profit | 4,584,382 | 3,650,872 | 13,312,300 | 10,780,357 |
Sales and marketing expenses | 1,568,257 | 1,205,552 | 4,364,742 | 3,469,024 |
General and administrative expenses | 2,077,100 | 2,070,088 | 6,211,057 | 6,435,569 |
Total operating expenses | 3,645,357 | 3,275,640 | 10,575,799 | 9,904,593 |
Income from operations | 939,025 | 375,232 | 2,736,501 | 875,764 |
Interest expense, net | 10,641 | 5,950 | 11,216 | 47,710 |
Income before provision for income taxes | 928,384 | 369,282 | 2,725,285 | 828,054 |
Provision for income taxes, net | 228,328 | 182,417 | 482,161 | 175,685 |
Net income | 700,056 | 186,865 | 2,243,124 | 652,369 |
Series B Preferred Stock liquidation preference increase | -116,029 | -857,877 | -1,914,470 | -2,408,257 |
Series B Preferred Stock redemption discount, net | 6,939,257 | ' | 6,939,257 | ' |
Net Income (loss) applicable to Common Shareholders | 7,523,284 | -671,012 | 7,267,911 | -1,755,888 |
Per share amounts: | ' | ' | ' | ' |
Net income per share (in Dollars per share) | $0.01 | $0.01 | $0.05 | $0.03 |
Net income per share (applicable to) redeemed from Preferred Stock (in Dollars per share) | $0.08 | ($0.04) | $0.11 | ($0.11) |
Basic net income (loss) per share applicable to Common Shareholders (in Dollars per share) | $0.09 | ($0.03) | $0.16 | ($0.08) |
Diluted net income (loss) per share applicable to Common Shareholders (in Dollars per share) | $0.09 | ($0.03) | $0.15 | ($0.08) |
Weighted average number of common shares outstanding – Basic (in Shares) | 82,946,352 | 22,911,678 | 44,297,109 | 22,141,684 |
Weighted average number of common shares outstanding – Diluted (in Shares) | 86,379,163 | 22,911,678 | 47,870,968 | 22,141,684 |
Other comprehensive income (loss) from foreign currency translation | 21,221 | -24,414 | 51,072 | -10,728 |
Total comprehensive income | $721,277 | $162,451 | $2,294,196 | $641,641 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (Unaudited) (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Cash flows from operating activities: | ' | ' |
Net income | $2,243,124 | $652,369 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' |
Depreciation and amortization | 370,751 | 401,141 |
(Gain) from disposal of equipment | -232 | -67,576 |
Amortization of deferred financing cost | ' | 17,500 |
Stock based compensation | 385,821 | 387,973 |
Deferred income taxes, net | 108,317 | 215,402 |
Bad debt expense, net | 18,809 | 5,108 |
Inventory valuation provisions, net | 45,952 | 39,412 |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable | 108,558 | -604,654 |
Inventories | -286,956 | 362,695 |
Prepaid expenses and other current assets | -99,652 | -247,043 |
Other assets. | -32,084 | 9,508 |
Accounts payable and accrued expenses | 399,749 | 771,156 |
Other liabilities | -158,131 | -201,058 |
Net cash provided by operating activities | 3,104,026 | 1,741,933 |
Cash flows from investing activities: | ' | ' |
Acquisitions of intangibles | ' | -174,535 |
Proceeds from sale of equipment | 1,832 | 168 |
Acquisitions of property and equipment | -316,215 | -173,464 |
Net cash (used in) investing activities | -314,383 | -347,831 |
Cash flows from financing activities: | ' | ' |
Common stock issuance through Private Placement | 5,500,000 | ' |
Private Placement issuance costs | -162,671 | ' |
Series B Preferred Stock redemption costs | -154,429 | ' |
Note payable issuance | 5,800,000 | ' |
Series B Preferred Stock redemption | -18,800,000 | ' |
Payment of notes payable to related parties | ' | -240,957 |
Payment of other notes payable | ' | -66,675 |
Payment of capital leases | -2,590 | -3,667 |
Net cash (used in) financing activities | -7,819,690 | -311,299 |
Net effect of foreign currency exchange translation on cash | 77,691 | -7,098 |
Net increase (reduction) in cash and cash equivalents | -4,952,356 | 1,075,705 |
Cash and cash equivalents at beginning of period | 8,927,333 | 5,749,341 |
Cash and cash equivalents at end of period | $3,974,977 | $6,825,046 |
Supplemental_Disclosures_of_Ca
Supplemental Disclosures of Cash Flow Information (Unaudited) (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Cash received (paid) during the period for: | ' | ' |
Interest paid | ($1,602) | ($2,545) |
Interest received | 3,256 | 3,041 |
Income tax paid, net (principally foreign) | -106,015 | -184,981 |
Non-cash financing activities: | ' | ' |
Series B preferred stock liquidation preference increase | -1,914,470 | -2,408,257 |
Series B preferred stock redemption discount | 7,093,686 | ' |
RSU’s settlement in common stock | 7,401 | 2,400 |
Interest accrued on notes payable | ' | 1,540 |
Effect of Foreign Currency Translation on Net Assets [Member] | ' | ' |
Non-cash financing activities: | ' | ' |
Other significant noncash transaction | 51,072 | -10,728 |
Equipment Exchanged for Manufacturing Services [Member] | ' | ' |
Non-cash financing activities: | ' | ' |
Other significant noncash transaction | ' | 67,632 |
Capital Lease Terminations [Member] | ' | ' |
Non-cash financing activities: | ' | ' |
Other significant noncash transaction | ' | $9,802 |
Note_1_Presentation_of_Interim
Note 1 - Presentation of Interim Information | 9 Months Ended |
Sep. 30, 2013 | |
Disclosure Text Block [Abstract] | ' |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | ' |
Note 1. Presentation of Interim Information | |
The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. The accompanying unaudited consolidated financial statements reflect all adjustments that, in the opinion of the management of Talon International, Inc. and its consolidated subsidiaries (collectively, the “Company”), are considered necessary for a fair presentation of the financial position, results of operations and cash flows for the periods presented. The results of operations for such periods are not necessarily indicative of the results expected for the full fiscal year or for any future period. The accompanying financial statements should be read in conjunction with the audited consolidated financial statements of the Company included in the Company’s Form 10-K for the year ended December 31, 2012. The balance sheet as of December 31, 2012 has been derived from the audited financial statements as of that date but omits certain information and footnotes required for complete financial statements. |
Note_2_Summary_of_Significant_
Note 2 - Summary of Significant Accounting Policies | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Accounting Policies [Abstract] | ' | ||||||||
Significant Accounting Policies [Text Block] | ' | ||||||||
Note 2. Summary of Significant Accounting Policies | |||||||||
A complete description of the Company’s Significant Accounting Policies is included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012, and should be read in conjunction with these unaudited consolidated financial statements. The Significant Accounting Policies noted below are only those policies that have changed materially or have supplemental information included for the periods presented here. | |||||||||
Allowance for Accounts Receivable Doubtful Accounts | |||||||||
The Company is required to make judgments as to the collectability of accounts receivable based on established aging policy, historical experience and future expectations. The allowances for doubtful accounts represent allowances for customer trade accounts and that are estimated to be partially or entirely uncollectible. These allowances are used to reduce gross trade receivables to their net realizable value. The Company records these allowances based on estimates related to the following factors: (i) customer specific allowances; (ii) amounts based upon an aging schedule; and (iii) an estimated amount, based on our historical experience, for issues not yet identified. Bad debt expense (recovery), net on accounts receivable for the three and nine months ended September 30, 2013 was $(2,050) and $18,809, respectively. Bad debt expense (recovery), net on accounts receivable for the three and nine months ended September 30, 2012 was $(8,265) and $5,108, respectively | |||||||||
Fair Value Measurements | |||||||||
Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. As a basis for considering such assumptions, the fair value guidance establishes a three-tier value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value: | |||||||||
Level 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. | |||||||||
Level 2 - Includes other inputs that are directly or indirectly observable in the marketplace. | |||||||||
Level 3 - Unobservable inputs which are supported by little or no market activity. | |||||||||
The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. | |||||||||
The Company’s financial instruments include cash and cash equivalents, accounts receivable, other assets, accounts payable, accrued expenses, note payable and other liabilities. The book value of the financial instruments is representative of their fair values. In accordance with this guidance, the Company measures its cash equivalents at fair value. The Company’s cash equivalents are classified within Level 1. Cash equivalents are valued primarily using quoted market prices utilizing market observable inputs. At September 30, 2013 and December 31, 2012, cash equivalents consisted of money market funds measured at fair value on a recurring basis; fair value of the Company’s money market funds was approximately $955,000 and $2,230,000, respectively. | |||||||||
The Company adopted the Financial Accounting Standards Board (“FASB”) staff position that delayed the guidance on fair value measurements for non-financial assets and non-financial liabilities. The adoption of this guidance did not have a material impact on the Company's consolidated financial statements. | |||||||||
Intangible Assets | |||||||||
Intangible assets consist of the Talon trade name acquired in a purchase business combination, patents, licenses, intellectual property rights and technology. Intangible assets acquired in a purchase business combination and determined to have an indefinite useful life are not amortized, but instead are tested for impairment at least annually in accordance with the provisions of FASB Accounting Standards Codification (“ASC”) 350, “Intangibles - Goodwill and Other”. Intangible assets with estimable useful lives are amortized over their respective estimated useful lives using the straight-line method, and are reviewed for impairment in accordance with the provisions of ASC 360, “Property, Plant and Equipment”. Costs incurred to renew or extend the term of recognized intangible assets are capitalized and amortized over the useful life of the asset. | |||||||||
In July 2012, the FASB issued Accounting Standards Update (“ASU”) 2012-02, “Intangibles – Goodwill and Other - Testing Indefinite-lived Intangible Assets for Impairment.” The updated guidance gives companies the option to first perform a qualitative assessment to determine whether it is more likely than not, defined as a likelihood of more than 50%, that an indefinite-lived intangible asset is impaired. If it is determined that it is more likely than not that an impairment exists, then the company is required to estimate the fair value of the indefinite-lived intangible assets and perform a quantitative impairment test in accordance with ASU 350-30. The updated guidance was effective for annual and interim indefinite lived intangibles asset impairment tests performed for fiscal years, and interim periods within those years, beginning after September 15, 2012. Early adoption was permitted as of a date before July 27, 2012. The adoption of this guidance did not have a material impact on the Company's consolidated financial statements. We completed the required assessment at September 30, 2013 and December 31, 2012, and noted no impairment. Consequently, no impairment charges were recorded. | |||||||||
On April 2, 2002, the Company entered into an Exclusive License and Intellectual Property Rights Agreement (the “License Agreement”) with Pro-Fit Holdings Limited (“Pro-Fit”). The License Agreement granted the Company the exclusive rights to sell or sublicense waistbands manufactured under patented technology developed by Pro-Fit for garments manufactured anywhere in the world for sale in the United States market and to all United States brands. The License Agreement had an indefinite term that extended for the duration of the trade secrets and patented technology licensed under the License Agreement. The Company recorded an intangible asset of $612,500, which has been fully amortized. | |||||||||
During the quarter ended March 31, 2012 the Company completed the acquisition from Pro-Fit and related parties of all U.S. patents, and applications, rights and technology associated with the stretch waistband technology that was formerly exclusively licensed under the License Agreement, and the License Agreement was terminated. During the quarter ended September 30, 2012 the Company also acquired other intellectual property related to accessory components used with a variety of apparel products. The total purchase price and related fees for all intangibles acquired in 2012 totaled $178,722, and is amortized based on the estimated useful lives between 10 and 17 years. Amortization expense for intangible assets was $3,271 and $9,562 for the three and nine months ended September 30, 2013, respectively. Amortization expense for intangible assets was $3,249 and $6,140, respectively for the three and nine months ended September 30, 2012. | |||||||||
Intangible assets as of September 30, 2013 and December 31, 2012 are as follows: | |||||||||
September 30, | December 31, | ||||||||
2013 | 2012 | ||||||||
Tradename | $ | 4,110,751 | $ | 4,110,751 | |||||
Intellectual property rights and exclusive license | 178,722 | 178,722 | |||||||
Accumulated amortization | (19,092 | ) | (9,530 | ) | |||||
Intellectual property rights, net | 159,630 | 169,192 | |||||||
Intangible assets, net | $ | 4,270,381 | $ | 4,279,943 | |||||
Convertible Preferred Stock | |||||||||
On July 12, 2013 the Company entered into a Securities Redemption Agreement (the “Redemption Agreement”) with CVC California, LLC (“CVC”). Pursuant to the Redemption Agreement, the Company repurchased from CVC all of the 407,160 outstanding shares of the Company’s Series B Convertible Preferred Stock (the “Series B Preferred Stock”) for an aggregate purchase price of $18,800,000, which purchase price was paid by delivery of $13,000,000 in cash and the issuance to CVC of a promissory note in the principal amount of $5,800,000 (the “Promissory Note”). As of the date of the transaction, the total value of the Series B Convertible Preferred Stock was $25,893,686, and a redemption discount (net of redemption costs of $154,429) of $6,939,257 was recorded to accumulated deficit on the consolidated balance sheets, and reflected in the earnings per share calculation of net income available to common shareholders. | |||||||||
The Company reported its conditionally redeemable convertible preferred shares as temporary equity in the mezzanine section of the consolidated balance sheets, in accordance with the guidance enumerated in FASB ASC No. 480-10 “Distinguishing Liabilities from Equity”, FASB ASC No. 210 “Classification and Measurement of Redeemable Securities” and Rule 5-02.28 of Regulation S-X, when determining the classification and measurement of preferred stock. | |||||||||
The Company reported the conversion option of its convertible preferred shares in accordance with FASB ASC No. 470-20, “Debt with Conversion and Other Options”, Accounting for Convertible Securities with Beneficial Conversion Features (“BCF”) or Contingently Adjustable Conversion Ratios. A convertible financial instrument includes a BCF when the fair market value of the preferred stock is lower than the value of common stock when the preferred stock converts to common stock at the issuance date. The BCF shall be recognized separately at issuance by allocating a portion of the proceeds equal to the intrinsic value of the feature to additional paid-in capital. | |||||||||
The convertible preferred shares, which were redeemable preferred securities, were reported at their current liquidation preference amount. Redeemable securities initially are recorded at their fair value minus the BCF and minus preferred stock issuance costs, and then are subsequently adjusted for changes in the preferred stock value in accordance with the following guidelines: | |||||||||
● | When an equity instrument is not currently redeemable but it is probable that the equity instrument will become redeemable (for example, when the redemption depends solely on the passage of time), then changes in the redemption value are recognized as they occur, and the carrying amount of the instrument is adjusted to equal the current redemption value. An increase in the carrying amount of the instrument reduces income available to common shareholders in the calculation of earnings per share. | ||||||||
● | When the liquidation preference increases on preferred shares it is added to the preferred stock carrying amount, and reduces income available to common shareholders in the calculation of earnings per share. | ||||||||
Classification of Expenses | |||||||||
Costs of Goods Sold – Cost of goods sold primarily includes expenses related to inventory purchases, customs, duty, freight, overhead expenses and reserves for obsolete inventory. Overhead expenses primarily consist of warehouse and operations salaries, and other warehouse expense. | |||||||||
Sales and Marketing Expenses – Sales and marketing expenses primarily include sales salaries and commissions, travel and entertainment, marketing, advertising, royalty expense, and other sales related costs. Marketing and advertising efforts are expensed as incurred. | |||||||||
General and Administrative Expenses – General and administrative expenses primarily include administrative salaries, employee benefits, professional service fees, facility expenses, information technology costs, investor relations, travel and entertainment, depreciation and amortization, bad debts and other general corporate expenses. | |||||||||
Interest Expense, net – Interest expense reflects the cost of borrowing. Interest expense for the three and nine months ended September 30, 2013 totaled $11,800 and $14,472 respectively. Interest expense for the three and nine months ended September 30, 2012 totaled $7,288 and $50,751, respectively. Interest income consists of earnings from cash held in interest bearing accounts. For the three and nine months ended September 30, 2013 the Company recorded interest income of $1,159 and $3,256, respectively. For the three and nine months ended September 30, 2012 the Company recorded interest income of $1,338 and $3,041, respectively. | |||||||||
Foreign Currency Translation | |||||||||
The Company has operations and holds assets in various foreign countries. The local currency is the functional currency for the Company’s subsidiaries in China and India. Assets and liabilities are translated at end-of-period exchange rates while revenues and expenses are translated at the average exchange rates in effect during the period. Equity is translated at historical rates and the resulting cumulative translation adjustments are included as a component of accumulated other comprehensive income until the translation adjustments are realized. Included in accumulated other comprehensive income were a cumulative foreign currency translation gain of $118,554 and $67,482 at September 30, 2013 and December 31, 2012, respectively. | |||||||||
Comprehensive Income | |||||||||
Comprehensive income consists of net income and unrealized income (loss) on foreign currency translation adjustments. The foreign currency translation adjustment represents the net currency translation gains and losses related to our China and India subsidiaries, which have not been reflected in the net income for the periods presented. | |||||||||
In the first quarter of 2012 we adopted FASB ASU 2011-05, “Presentation of Comprehensive Income” (“ASU 2011-05”) and ASU 2011-12, “Comprehensive Income (Topic 220)”, which amended ASC Topic 220, “Comprehensive Income”, and was effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. The Company chose the option provided by ASU 2011-05 to present the total of comprehensive income (loss), the components of net income (loss) and the components of other comprehensive income (loss) in a single continuous statement. Adoption of the guidance did not have any impact on our results of operations or financial condition. | |||||||||
Use of Estimates | |||||||||
The preparation of consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the year. The accounting estimates that require the Company’s most significant, difficult and subjective judgments include the valuation allowance for accounts receivable and inventory, and the assessment of recoverability of long-lived assets and intangible assets, stock-based compensation and the recognition and measurement of current and deferred income taxes (including the measurement of uncertain tax positions). Actual results could differ materially from the Company’s estimates. |
Note_3_New_Accounting_Pronounc
Note 3 - New Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2013 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | ' |
New Accounting Pronouncements and Changes in Accounting Principles [Text Block] | ' |
Note 3. New Accounting Pronouncements | |
In July 2013, the FASB issued ASU 2013-11, "Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists" ("ASU 2013-11"), which sets forth explicit guidance on the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. This guidance is effective for fiscal years, and interim periods beginning after December 15, 2013, with early adoption permitted. The Company adopted ASU 2013-011 as of September 30, 2013 with no impact on the consolidated financial statements. |
Note_4_Net_Income_Loss_per_Sha
Note 4 - Net Income (Loss) per Share | 9 Months Ended | ||||||||||||
Sep. 30, 2013 | |||||||||||||
Earnings Per Share [Abstract] | ' | ||||||||||||
Earnings Per Share [Text Block] | ' | ||||||||||||
Note 4. Net Income (Loss) Per Share | |||||||||||||
The following is a reconciliation of the numerators and denominators of the basic and diluted net income (loss) per share computations: | |||||||||||||
Net income | Shares | Per Share | |||||||||||
(loss) | Amount | ||||||||||||
Three Months ended September 30, 2013: | |||||||||||||
Basic net income per share: | |||||||||||||
Net income | $ | 700,056 | 82,946,352 | $ | 0.01 | ||||||||
Series B Preferred Stock liquidation preference increase prior to redemption | (116,029 | ) | 0 | ||||||||||
Series B Preferred Stock Redemption discount, net | 6,939,257 | 0.08 | |||||||||||
Net income applicable to Common Shareholders | 7,523,284 | 82,946,352 | 0.09 | ||||||||||
Effect of Dilutive Securities - Options, Preferred Stock and RSUs | - | 3,432,811 | - | ||||||||||
Diluted net income applicable to Common Shareholders | $ | 7,523,284 | 86,379,163 | $ | 0.09 | ||||||||
Three Months ended September 30, 2012: | |||||||||||||
Basic net income per share: | |||||||||||||
Net income | $ | 186,865 | 22,911,678 | $ | 0.01 | ||||||||
Series B Preferred Stock liquidation preference increase | (857,877 | ) | (0.04 | ) | |||||||||
Net income (loss) applicable to Common Shareholders | (671,012 | ) | 22,911,678 | (0.03 | ) | ||||||||
Effect of Dilutive Securities - Options, Preferred Stock and RSUs | - | - | - | ||||||||||
Diluted net income (loss) applicable to Common Shareholders | $ | (671,012 | ) | 22,911,678 | $ | (0.03 | ) | ||||||
Net income | Shares | Per Share | |||||||||||
(loss) | Amount | ||||||||||||
Nine Months ended September 30, 2013: | |||||||||||||
Basic net income per share: | |||||||||||||
Net income | $ | 2,243,124 | 44,297,109 | $ | 0.05 | ||||||||
Series B Preferred Stock liquidation preference increase prior to redemption | (1,914,470 | ) | (0.04 | ) | |||||||||
Series B Preferred Stock redemption discount, net | 6,939,257 | 0.15 | |||||||||||
Net income applicable to Common Shareholders | 7,267,911 | 44,297,109 | 0.16 | ||||||||||
Effect of Dilutive Securities - Options, Preferred Stock and RSUs | - | 3,573,859 | - | ||||||||||
Diluted net income applicable to Common Shareholders | $ | 7,267,911 | 47,870,968 | $ | 0.15 | ||||||||
Nine Months ended September 30, 2012: | |||||||||||||
Basic net income per share: | |||||||||||||
Net income | $ | 652,369 | 22,141,684 | $ | 0.03 | ||||||||
Series B Preferred Stock liquidation preference increase | (2,408,257 | ) | (0.11 | ) | |||||||||
Net Income (loss) applicable to Common Shareholders | (1,755,888 | ) | 22,141,684 | (0.08 | ) | ||||||||
Effect of Dilutive Securities - Options, Preferred Stock and RSUs | - | - | - | ||||||||||
Diluted net income (loss) applicable to Common Shareholders | $ | (1,755,888 | ) | 22,141,684 | $ | (0.08 | ) | ||||||
For the three months ended September 30, 2013, options to purchase 5,595,000 shares of common stock exercisable between $0.04 and $0.20 per share and RSU’s to settle for 1,155,700 common shares were included in the computation of diluted net income per share. Options to purchase 639,600 shares of common stock exercisable between $0.28 and $5.23 per share were outstanding but were not included in the computation of diluted net income per share applicable to common shareholders because they would have an antidilutive effect on the net income per share. | |||||||||||||
For the nine months ended September 30, 2013, options to purchase 2,355,000 shares of common stock exercisable between $0.04 and $0.11 per share and RSU’s to settle for 1,155,700 common shares were included in the computation of diluted net income per share. Options to purchase 3,879,600 shares of common stock exercisable between $0.08 and $5.23 per share were outstanding but were not included in the computation of diluted net income per share applicable to common shareholders because they would have an antidilutive effect on the net income per share. | |||||||||||||
On July 12, 2013 the Company entered into the Redemption Agreement with CVC. Pursuant to the Redemption Agreement, the Company repurchased from CVC all of the 407,160 outstanding shares of Series B Preferred Stock for an aggregate purchase price of $18,800,000, which purchase price was paid to CVC by delivery of $13,000,000 in cash and an unsecured Promissory Note in the principal amount of $5,800,000. In order to provide additional funds to complete the redemption of the Series B Preferred Stock, the Company raised $5,500,000 of new equity capital through the sale, in a private placement transaction, of 61,111,109 shares of common stock at a price of $0.09 per share. Additionally, on July 12, 2013, 4,745,600 shares of common stock were issued to reporting persons in settlement of previously vested restricted stock units pursuant to an existing deferral election. For the repurchase of Series B Convertible Preferred Stock, a redemption discount (net of redemption costs) of $6,939,257 was recorded to accumulated deficit on the consolidated balance sheets, and in the earnings per share calculation of net income available to common shareholders. | |||||||||||||
For the three and nine months ended September 30, 2012, options to purchase 6,372,100 shares of common stock exercisable between $0.04 and $5.23 per share, RSU’s to settle for 8,557,000 common shares and Series B Preferred Stock to be converted into 40,716,000 shares of common stock were outstanding, but were not included in the computation of diluted net income (loss) per share because they would have an antidilutive effect on the net income (loss) per share. |
Note_5_Accounts_Receivable
Note 5 - Accounts Receivable | 9 Months Ended |
Sep. 30, 2013 | |
Receivables [Abstract] | ' |
Loans, Notes, Trade and Other Receivables Disclosure [Text Block] | ' |
Note 5. Accounts Receivable | |
Accounts receivable are included on the consolidated balance sheets net of the allowance for doubtful accounts. The allowance for doubtful accounts at September 30, 2013 and December 31, 2012 was $20,899 and $1,093, respectively. |
Note_6_Inventories
Note 6 - Inventories | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Inventory Disclosure [Abstract] | ' | ||||||||
Inventory Disclosure [Text Block] | ' | ||||||||
Note 6. Inventories | |||||||||
Inventories are stated at the lower of cost, determined using the first-in, first-out basis, or market value and are all categorized as finished goods. The costs of inventory include the purchase price, inbound freight and duties, conversion costs and certain allocated production overhead costs. Inventory valuation reserves are recorded for damaged, obsolete, excess and slow-moving inventory. The Company uses estimates to record these reserves. Slow-moving inventory is reviewed by category and may be partially or fully reserved depending on the type of product and the length of time the product has been included in inventory. Reserve adjustments are made for the difference between the cost of the inventory and the estimated market value, if lower, and charged to operations in the period in which the facts that give rise to these adjustments become known. Market value of inventory is estimated based on the impact of market trends, an evaluation of economic conditions and the value of current orders relating to the future sales of this inventory. | |||||||||
Inventories consist of the following: | |||||||||
September 30, | December 31, | ||||||||
2013 | 2012 | ||||||||
Finished goods | $ | 1,216,118 | $ | 991,635 | |||||
Less reserves | (244,520 | ) | (261,132 | ) | |||||
Total inventories | $ | 971,598 | $ | 730,503 | |||||
Note_7_Note_Payable
Note 7 - Note Payable | 9 Months Ended |
Sep. 30, 2013 | |
Debt Disclosure [Abstract] | ' |
Debt Disclosure [Text Block] | ' |
Note 7. Note Payable | |
On July 12, 2013 the Company entered into the Redemption Agreement with CVC pursuant to which the Company repurchased all of the 407,160 outstanding shares of Series B Preferred Stock for an aggregate purchase price of $18,800,000. The purchase price was paid to CVC by delivery of $13,000,000 in cash and an unsecured Promissory Note in the principal amount of $5,800,000. | |
The Promissory Note accrues interest in the amount of 1% per annum, is due and payable in full on January 12, 2014, and includes discounts for early repayments that decrease over time. The Promissory Note further requires mandatory prepayments equal to a specified portion of the proceeds received by the Company with respect to future secured debt financing transactions, as well as customary default provisions. | |
Interest expense related to the note payable for the three and nine months ended September 30, 2013 was $12,871, and was included in accrued interest, which is due and payable in full on January 12, 2014. |
Note_8_Debt_Facility
Note 8 - Debt Facility | 9 Months Ended |
Sep. 30, 2013 | |
Debt Facility [Abstract] | ' |
Debt Facility [Text Block] | ' |
Note 8. Debt Facility | |
The Company originally entered into a Revolving Credit and Term Loan Agreement (the “Loan Agreement”) on June 27, 2007 with Bluefin Capital, LLC (“Bluefin”). Bluefin subsequently assigned its rights and obligations under the Loan Agreement to an affiliate, CVC. On July 30, 2010, the Company entered into a Recapitalization Agreement (the “Recapitalization Agreement”) with CVC in which the Company issued to CVC shares of the Company’s Series B Preferred Stock in payment of all of the outstanding obligations owed by the Company to CVC under the Loan Agreement, (see Note 9). All of the outstanding obligations owed to CVC under the Loan Agreement that became due and payable on July 30, 2010, in the amount of $16,706,685, were converted into Series B Preferred Stock pursuant to the Recapitalization Agreement. These obligations consisted of outstanding borrowings and accrued interest of $11,548,098 under term notes, and $5,158,587 under a revolving credit note. | |
In connection with the Recapitalization Agreement, the Loan Agreement (now fully paid and expired) was amended to extend the maturity date from July 30, 2010 until July 31, 2012, reduce the maximum borrowings available under the Revolver to $3,000,000, and amend various additional terms and conditions of the Loan Agreement. The Company paid CVC a non-refundable fee in the amount of $60,000 in consideration of CVC entering into the July 2010 amendment and making this facility available and paid a $50,000 commitment fee during the third quarter of 2011 to ensure the availability of the revolver through July 31, 2012. Upon execution of the amendment, CVC waived all prior events of default under the Loan Agreement. Borrowings under the Loan Agreement were secured by all of the Company’s assets. | |
On July 31, 2012, with no borrowings outstanding, the Loan Agreement expired along with all performance covenants, obligations and liens against any assets of the Company. | |
Interest expense related to the debt facility for the three months ended September 30, 2012 was $6,667, and composed of amortization of deferred financing costs of $2,500 and commitment fee expense of $4,167. Interest expense related to the debt facility for the nine months ended September 30, 2012 was $46,667, and composed of amortization of deferred financing costs of $17,500 and commitment fee expense of $29,167. |
Note_9_Series_B_Convertible_Pr
Note 9 - Series B Convertible Preferred Stock and Stockholders' Equity (Deficit) | 9 Months Ended | ||||
Sep. 30, 2013 | |||||
Stockholders' Equity Note [Abstract] | ' | ||||
Stockholders' Equity Note Disclosure [Text Block] | ' | ||||
Note 9. Series B Convertible Preferred Stock and Stockholders’ Equity (Deficit) | |||||
Series B Convertible Preferred Stock Redemption and Private Placement of Common Stock | |||||
On July 12, 2013 the Company entered into the Redemption Agreement with CVC and repurchased from CVC all of the 407,160 previously outstanding shares of Series B Preferred Stock (described below) for an aggregate purchase price of $18,800,000, which purchase price was paid by delivery to CVC of $13,000,000 in cash an unsecured Promissory Note in the principal amount of $5,800,000. Pursuant to the Redemption Agreement, the Stockholder’s Agreement with CVC, and with Lonnie D. Schnell, Chief Executive Officer, Chief Financial Officer and a member of the Board of Directors of the Company, and Larry Dyne, President of the Company was terminated. In order to provide additional funds to complete the redemption of the Series B Preferred Stock, the Company raised $5,500,000 of new equity capital through the sale, in a private placement transaction, of 61,111,109 shares of common stock at a price of $0.09 per share. The closing of the private placement was expressly conditioned upon the contemporaneous closing of the transactions under the Redemption Agreement. | |||||
The redemption of the Series B Preferred Stock eliminated the Company’s preferred stock liquidation preference obligation of $25,893,686, which had entitled the preferred shareholders to payment of the preference amount before payment to the common stockholders. The liquidation preference was scheduled to increase to $40,704,105 in 2016, the time which the preferred shares would have become mandatorily redeemable. The Company now has only common shares outstanding. | |||||
In connection with the redemption in full of the Series B Preferred Stock, CVC representative on the Company Board of Directors, Mark Hughes resigned from Board of Directors effective July 12, 2013. | |||||
As a result of the redemption, on July 12, 2013 a total of 4,745,600 shares of common stock were issued to the Company’s executive management team upon settlement of previously vested RSU’s pursuant to the 2010 deferral elections. | |||||
The following table summarizes Series B Preferred Stock activity for the three and nine months ended September 30, 2013: | |||||
Series B Preferred Stock as of December 31, 2012 | $ | 23,979,216 | |||
Series B Preferred Stock liquidation preference increase for the six months ended June 30, 2013 | 1,798,441 | ||||
Series B Preferred Stock as of June 30, 2013 | 25,777,657 | ||||
Series B Preferred Stock liquidation preference increase for July 1-July 12, 2013 | 116,029 | ||||
Series B Preferred Stock as of July 12, 2013 per original redemption value | 25,893,686 | ||||
Series B Preferred Stock redemption discount | (7,093,686 | ) | |||
Series B Preferred Stock before the Redemption | 18,800,000 | ||||
Series B Preferred Stock Redemption on July 12, 2013 | (18,800,000 | ) | |||
Series B Preferred Stock as of September 30, 2013 | $ | - | |||
Following the redemption of the Series B Preferred Stock, the Company amended the Corporation’s Certificate of Incorporation to eliminate all of the Series A Preferred Stock (none of which were outstanding) and to eliminate all of the Series B Convertible Preferred Stock, all of which had been redeemed. | |||||
Series B Convertible Preferred Stock Original Issuance | |||||
On July 30, 2010, the Company entered into the Recapitalization Agreement with CVC, pursuant to which the Company issued to CVC an aggregate of 407,160 shares of a newly created series of the Company’s preferred stock, designated Series B Convertible Preferred Stock, $0.001 par value per share in payment of an aggregate of $16,706,685 owed by the Company to CVC under the Loan Agreement. Certain rights, preferences, privileges and restrictions previously provided to the Series B Preferred Stock are summarized below. | |||||
The Series B Preferred Stock had the following rights, preferences, privileges and restrictions: | |||||
● | The Series B Preferred Stock ranked senior to the common stock and to any other preferred stock unless such preferred stock was created and issued on a senior or pari passu basis in accordance with the Company’s certificate of incorporation. | ||||
● | Each share of Series B Preferred Stock was convertible into 100 shares of the Company’s common stock (subject to adjustment for stock splits, reverse stock split, etc.) at any time and from time to time at each holder’s option, unless the Series B Preferred Stock was exchanged for its Liquidation Preference as noted below. | ||||
● | Upon the liquidation, dissolution or winding up of the Company, each share of Series B Preferred Stock was entitled to receive upon the surrender and cancellation of such shares (and prior to any distribution to holders of other equity securities), an amount equal to $41.033 per share plus all accrued dividends (the “Liquidation Preference”). A merger, consolidation, share exchange or other reorganization resulting in a change in control of the Company, or any sale of all or substantially all of the Company’s assets, would be deemed a liquidation and winding up for purposes of the Company’s obligation to pay the Liquidation Preference. | ||||
● | The Series B Preferred Stock Liquidation Preference increased at the rate of 16% per annum, compounded annually, in the form of a dividend accrual on the Liquidation Preference. The dividend however was only payable in connection with the payment of the Liquidation Preference upon the liquidation, dissolution or winding up of the Company, and in each case in exchange for the surrender of the Series B Preferred Stock. No portion of the Liquidation Preference or the associated accrued dividends were convertible into common stock, nor was any portion of the Liquidation Preference or the accrued dividends payable on shares of Series B Preferred Stock in the event of or following the conversion of such shares into common stock. | ||||
● | The Company had the right, at any time upon not less than thirty (30) days’ prior written notice to the holders of Series B Preferred Stock, to redeem the Series B Preferred Stock in whole (but not in part) for a price equal to the then-applicable Liquidation Preference. The holders of Series B Preferred Stock had the option, exercisable at any time and from time to time commencing on July 31, 2016, to require the Company to redeem any or all of the Series B Preferred Stock held by such holders, at the then-applicable Liquidation Preference amount. | ||||
● | The Series B Preferred Stock voted with the common stock as a single class on all matters submitted or required to be submitted to a vote of the Company’s stockholders, with each share of Series B Preferred Stock having a number of votes equal to the number of shares of common stock that may be acquired upon conversion thereof as of the applicable date of determination. Additionally, the Series B Preferred Stock had the right to vote as a separate class with respect to certain matters affecting the Series B Preferred Stock, including but not limited to (a) the creation or issuance of any other class or series of preferred stock, (b) any amendments with respect to the rights, powers, preferences and limitations of the Series B Preferred Stock, (c) paying dividends or distributions in respect of or redeem the Company’s common stock or any other junior securities; and (d) certain affiliate transactions. Any such vote required the affirmative vote or consent of a majority of the outstanding shares of Series B Preferred Stock. | ||||
● | As long as the outstanding Series B Preferred Stock represented 35% or more of the voting shares of the Company, on an as-converted to common stock basis, then (a) our Board of Directors consisted of not more than seven members, (b) the holders of Series B Preferred Stock had the right to elect three directors if the Board had five or fewer total directors, and four directors if the Board had six or seven directors (the directors elected by the Series B Preferred Stock were referred to as the “Series B Directors”), and (c) those members serving on the Board who were not elected by holders of the Series B Preferred Stock had the right to designate all remaining directors. At least two of the Series B Directors had to be, and remain at all times while serving as a director, an independent director that qualified for service on the audit committee of a corporation with securities listed on the Nasdaq Stock Market as provided in Nasdaq Marketplace Rule 5605(c)(2) (or any successor thereto). Once the outstanding shares of Series B Preferred Stock represent less than 35% of the voting shares on an as-converted to common stock basis, then the entire Board will thereafter be elected by all stockholders having voting rights, voting as a single class. | ||||
The conversion of the term notes, revolver and related interest and fees into the Series B Preferred Stock (fair value of $17,277,600 as of July 30, 2010) was considered to be debt extinguishment according to the FASB ASC No.405 “Liabilities” and FASB ASC No. 470-50 “Debt, Modifications and Extinguishments” (“ASC 470-50”). Per ASC 470-50 a loss on extinguishment of debt of $570,915 was recorded on July 30, 2010 and is included in the Consolidated Statement of Operations for the year ended December 31, 2010. The loss on extinguishment is equal to the difference between fair value of the preferred stock and the fair value of the debt extinguished at the transaction date. The fair value of the Series B Preferred Stock on the issuance date was determined by the Company and independent valuation specialists using the option pricing valuation model. | |||||
The Company applied the guidance enumerated in FASB ASC No. 480 “Distinguishing Liabilities from Equity”, FASB ASC No. 210 “Classification and Measurement of Redeemable Securities” and Rule 5-02.28 of Regulation S-X, when determining the classification and measurement of preferred stock. The Company classifies conditionally redeemable convertible preferred shares, which includes preferred shares subject to redemption upon the occurrence of uncertain events not solely within the control of the Company, as temporary equity in the mezzanine section of the consolidated balance sheet. The Series B Preferred Stock was redeemable at the option of the holders after the sixth anniversary of issuance, which was not within the control of the Company. | |||||
The Company determined that there were no embedded features that would require separate reporting as derivative instruments. Therefore, the Company evaluated the conversion option of the convertible preferred shares under FASB ASC No. 470-20, “Debt with Conversion and Other Options”, Accounting for Convertible Securities with Beneficial Conversion Features (“BCF”) or Contingently Adjustable Conversion Ratios. A convertible financial instrument includes a BCF if the fair value of the instrument is lower than the fair value of shares of the common stock it is convertible into on the issuance date. The BCF shall be recognized separately at issuance by allocating a portion of the proceeds equal to the intrinsic value of the conversion feature to additional paid-in capital. The Company recorded a BCF value of $1,283,343 in connection with the issuance of the Series B Preferred Stock on July 30, 2010. | |||||
The Series B Preferred Stock was initially recorded at the fair value of $17,277,600 as of July 30, 2010, reduced by the BCF ($1,283,343) as stated above and stock issuance costs ($190,744), for a net value of $15,803,513 as of July 30, 2010. The value of the Series B Preferred Stock was adjusted as follows as a consequence of its redemption features and the following approach was implemented by the Company: | |||||
● | The Series B Preferred Stock was not redeemable by the holders, but it was probable that the preferred stock could become redeemable due to the redemption option available to the preferred stock holders on July 30, 2016. Changes in the redemption value were recognized immediately as they occurred, and the carrying amount of the instrument was adjusted to equal the redemption value at the end of each reporting period. This method viewed the end of the reporting period as if it were also the redemption date for the Series B Preferred Stock. Accordingly, the adjustment of $903,172 to record the preferred stock at its redemption value (“Original issue discount”) was charged against the preferred stock carrying value and retained earnings during the year ended December 31, 2010. In addition, the resulting increase in the carrying amount of the Series B Preferred Stock reduced the income applicable to common shareholders reported in the calculation of earnings per share. | ||||
● | The annual 16% liquidation preference increase on outstanding preferred shares was accrued each reporting period as an addition to the carrying value of the preferred stock and reduced the income applicable to common shareholders reported in the calculation of earnings per share. | ||||
Common Stock | |||||
Stockholders Agreement | |||||
Concurrently with the execution of the Recapitalization Agreement, on July 30, 2010, the Company entered into a Stockholders Agreement with CVC, and with Lonnie D. Schnell, Chief Executive Officer, Chief Financial Officer and a member of the Board of Directors of the Company, and Larry Dyne, President of the Company (“Messrs. Schnell and Dyne”), pursuant to which: | |||||
● | CVC agreed that in connection with any director nominees to be submitted to holders of the Company’s common stock for election at a stockholders’ meeting, a committee of our Board comprised solely of directors then serving on the Board who were not elected or appointed by holders of Series B Preferred Stock, acting by majority vote, would have the right to designate all of the Board’s nominees for director to be elected by holders of the Company’s Common Stock. | ||||
● | CVC agreed that in connection with any election of directors submitted to the Company’s stockholders for election at a stockholders’ meeting, CVC would attend the stockholders’ meeting, in person or by proxy, and vote (or cause to be voted) all of CVC’s shares of the Company’s voting stock in favor of the Board’s nominees for director. | ||||
● | Messrs. Schnell and Dyne granted CVC a right of first refusal with respect to any shares of the Company’s voting securities that Messrs. Schnell and Dyne proposed to sell in a private placement transaction, and agreed to provide CVC with advance notice of their intent to sell the Company’s voting securities in any public sale transaction. | ||||
● | CVC granted Messrs. Schnell and Dyne a tag-along right, providing Messrs. Schnell and Dyne with the right to sell their shares of the Company’s voting securities in a transaction where CVC is selling its shares of the Company’s voting securities. | ||||
● | Messrs. Schnell and Dyne agreed with CVC to vote their shares of Talon voting stock in favor of a merger or consolidation of the Company into or with another corporation or any share exchange, business combination or other such transaction in which the Company was a constituent party, or any sale of all or substantially all of the Company’s assets (a “Triggering Transaction”), in each case to the extent such transaction was first approved by CVC. | ||||
● | CVC agreed not to sell or otherwise transfer its shares of the Company’s voting securities, or to vote its shares of the Company’s voting securities in favor of any Triggering Transaction, at any time on or before July 31, 2011, other than in connection with a transaction that was approved by a majority of the Company’s voting shares (where, in calculating such majority, the votes attributable to CVC’s shares of the Company’s voting securities were excluded in the numerator but included in the denominator). | ||||
● | The Company provided CVC with a preemptive right, pursuant to which CVC would have the right, subject to certain exceptions set forth in the Stockholders Agreement, to acquire in a subsequent issuance of securities by the Company a number of offered securities that will allow CVC to maintain its percentage ownership of the Company’s voting securities. | ||||
● | CVC agreed with Messrs. Schnell and Dyne that in connection with a Triggering Transaction, CVC, and any other holder of Series B Preferred Stock and shares of common stock acquired upon conversion thereof, would pay to Messrs. Schnell and Dyne a portion (beginning at 5% and increasing to 10%) of the sales proceeds payable in the Triggering Transaction to CVC or such other holder in respect of such Series B Preferred Stock or conversion shares. Each of Messrs. Schnell and Dyne’s right to receive such portion of the sales proceeds was conditional upon the Triggering Transaction occurring (i) while employed by the Company or (ii) within 12 months following termination of employment with the Company for any reason other than termination of employment for “cause” or termination of employment by Messrs. Schnell or Dyne without “good reason” (as such terms are defined in their respective employment agreements). | ||||
Pursuant to the Redemption Agreement entered into on July 12, 2013, the Stockholders Agreement was terminated. | |||||
On November 8, 2013, the Company’s stockholders approved an amendment to the Company’s Certificate of Incorporation to increase the number of shares of common stock authorized to be issued by the Company from 100,000,000 to 300,000,000. The stockholders approved an amendment to the Company’s Certificate of Incorporation to allow for a reverse split of the Company’s outstanding shares of common stock as described in the proxy statement, when and if the Board of Director’s determines that such action is appropriate. | |||||
Private Placement of Common Stock | |||||
In order to provide additional funds necessary for the redemption of the Series B Preferred Stock, on July 12, 2013 the Company raised $5,500,000 of new equity capital through the offer and sale, in a private placement transaction, of 61,111,109 shares of the Company’s common stock at a price of $0.09 per share. The closing of the private placement was expressly conditioned upon the contemporaneous closing of the transactions under the Redemption Agreement. The closing price of the Company's common stock was $0.058 per share on Friday, July 12, 2013, the last trading day prior to public announcement of the equity financing and redemption transactions. | |||||
At the closing of the private placement, the Company entered into a series of Subscription Agreements (the “Subscription Agreements”) with each of the purchasers. The Subscription Agreement entered into with Kutula Holdings Ltd. (“Kutula”) grants Kutula the right to nominate one member of the Company’s Board of Directors, so long as Kutula continues to hold at least 15,500,000 of the shares (as adjusted for stock splits and the like) purchased pursuant to its Subscription Agreement, subject to certain disclosure requirements and other limitations. | |||||
The Company also entered into a Registration Rights Agreement with the investors in the transaction (the “Registration Rights Agreement“). The Registration Rights Agreement provides for demand registration rights, such that upon the demand of holders of at least 25% of the shares issued in the private placement and subject to certain conditions, the Company will file a registration statement covering the shares issued in the private placement and requested to be included in such registration. The Registration Rights Agreement also provides certain piggyback rights, in which the holders of shares acquired in the private placement have the right to include those shares in a Company-initiated registration. |
Note_10_StockBased_Compensatio
Note 10 - Stock-Based Compensation | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | ' | ||||||||||||||||
Note 10. Stock-Based Compensation | |||||||||||||||||
The Company accounts for stock-based awards to employees and directors in accordance with FASB ASC 718, “Compensation - Stock Compensation”, which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees and directors based on estimated fair values. Options issued to consultants are accounted for in accordance with the provisions of FASB ASC 505-50, “Equity-Based Payments to Non-Employees”. | |||||||||||||||||
Stock Options | |||||||||||||||||
As of September 30, 2013, the Company’s 2008 Stock Incentive Plan, as amended in November 2010, which was approved by the Company’s stockholders, authorized up to 4,810,000 shares of common stock that may be issued pursuant to awards granted under the plan. On November 8, 2013, the Company’s stockholders approved an amendment to the Company’s 2008 Stock Incentive Plan to increase from 4,810,000 to 15,000,000 the number of shares of common stock that may be issued pursuant to awards thereunder. | |||||||||||||||||
The Company’s 2007 Stock Plan was approved by the Company’s stockholders in 2007, and replaced the 1997 Stock Plan. The 2007 Stock Plan authorizes up to 2,600,000 shares of common stock for issuance pursuant to awards granted to individuals under the plan. | |||||||||||||||||
On October 1, 1997, the Company adopted the 1997 Stock Incentive Plan, which authorized the granting of a variety of stock-based incentive awards. | |||||||||||||||||
The Board of Directors, who determines the recipients and terms of the award granted, administers the Company’s stock plan. Awards under the Company’s stock plans are generally granted with an exercise price equal to the average market price of the Company’s stock for the five trading days following the date of approval of the grant. Those option awards generally vest over periods determined by the Board from immediate to 4 years of continuous service and have 10 year contractual terms. | |||||||||||||||||
Options to purchase 400,000 shares of common stock were granted under the Stock Incentive Plans during the three months ended September 30, 2013 and no options were granted during the three months ended September 30, 2012. Options to purchase 400,000 and 630,000 shares of common stock were granted under the Stock Incentive Plans during the nine months ended September 30, 2013 and 2012, respectively. | |||||||||||||||||
As of September 30, 2013, the Company had $158,409 of unamortized stock-based compensation expense related to options issued to employees and directors, which will be recognized over the weighted average period of 1.3 years. As of September 30, 2012, unamortized stock-based compensation expense related to options issued to employees and directors was $95,324, which was to be recognized over the weighted average period of approximately 2.0 years. | |||||||||||||||||
The following table summarizes the activity in the Company’s share based plans during the nine months ended September 30, 2013. | |||||||||||||||||
Weighted | |||||||||||||||||
Average | |||||||||||||||||
Number of | Exercise | ||||||||||||||||
Shares | Price | ||||||||||||||||
Employees and Directors | |||||||||||||||||
Options outstanding - January 1, 2013 | 6,372,100 | $ | 0.21 | ||||||||||||||
Granted | - | $ | - | ||||||||||||||
Cancelled | (287,500 | ) | $ | 0.87 | |||||||||||||
Options outstanding - June 30, 2013 | 6,084,600 | $ | 0.18 | ||||||||||||||
Granted | 400,000 | $ | 0.28 | ||||||||||||||
Cancelled | (250,000 | ) | $ | 0.07 | |||||||||||||
Options outstanding - September 30, 2013 | 6,234,600 | $ | 0.19 | ||||||||||||||
Restricted Stock Units (RSU’s) | |||||||||||||||||
On July 30, 2010, the Company awarded each of Lonnie Schnell and Larry Dyne a restricted stock unit award (an “RSU Award”) for 5,778,500 shares of the Company’s common stock. Each RSU Award vested 50% on August 30, 2011, and 10% on each date which is 18, 24, 30, 36 and 42 months following the grant date, subject to partial acceleration of vesting as part of the executives’ severance benefits and full acceleration of vesting upon a change in control of the Company. As of July 30, 2010, the RSU’s were valued at $2,263,384, which was reduced by the fair value of the options surrendered by the employees in connection with these grants. | |||||||||||||||||
On August 30, 2010, Messrs. Schnell and Dyne elected to defer the settlement in common shares of 5,434,200 RSU’s beyond the vesting dates. On July 12, 2013, 4,745,600 shares of common stock were issued upon settlement of previously vested restricted stock units pursuant to the deferral elections. | |||||||||||||||||
Below is a breakdown of date, issued common shares upon settlement of vested units under the RSU Awards and the related intrinsic value of these shares: | |||||||||||||||||
Number of RSU’s | |||||||||||||||||
Total | Common | Intrinsic value | Shares | ||||||||||||||
RSU’s | shares | at the time | remaining | ||||||||||||||
awarded | issued | of issuance | to be issued | ||||||||||||||
30-Jul-10 | 11,557,000 | $ | 0.196 | ||||||||||||||
30-Aug-11 | 600,000 | $ | 0.1 | ||||||||||||||
30-Jan-12 | 900,000 | $ | 0.05 | ||||||||||||||
30-Jul-12 | 1,500,000 | $ | 0.04 | ||||||||||||||
30-Jan-13 | 1,500,000 | $ | 0.04 | ||||||||||||||
12-Jul-13 | 4,745,600 | $ | 0.06 | ||||||||||||||
30-Jul-13 | 1,155,700 | $ | 0.25 | ||||||||||||||
Total at September 30, 2013 | 10,401,300 | 1,155,700 | |||||||||||||||
As of September 30, 2013, the Company had $150,114 of unamortized stock-based compensation expense related to RSU’s, which will be recognized over the remaining weighted average period of four months. | |||||||||||||||||
The following table summarizes RSU’s activity: | |||||||||||||||||
Weighted | |||||||||||||||||
Average | |||||||||||||||||
Number of RSU’s | Grant date | ||||||||||||||||
Unvested | Vested | Total | value per RSU | ||||||||||||||
RSU’s outstanding – December 31, 2012 | 3,467,100 | 5,089,900 | 8,557,000 | $ | 0.196 | ||||||||||||
Common stock vested | (1,155,700 | ) | 1,155,700 | - | $ | 0.196 | |||||||||||
Common stock issued | - | (1,500,000 | ) | (1,500,000 | ) | $ | 0.196 | ||||||||||
RSU’s outstanding – June 30, 2013 | 2,311,400 | 4,745,600 | 7,057,000 | $ | 0.196 | ||||||||||||
Common stock vested | (1,155,700 | ) | 1,155,700 | - | $ | 0.196 | |||||||||||
Common stock issued | - | (5,901,300 | ) | (5,901,300 | ) | $ | 0.196 | ||||||||||
RSU’s outstanding – September 30, 2013 | 1,155,700 | - | 1,155,700 | $ | 0.196 | ||||||||||||
Note_11_Income_Taxes
Note 11 - Income Taxes | 9 Months Ended |
Sep. 30, 2013 | |
Income Tax Disclosure [Abstract] | ' |
Income Tax Disclosure [Text Block] | ' |
Note 11. Income taxes | |
Provision for income taxes for the three months ended September 30, 2013 and 2012 was $228,328 and $182,417, respectively. Provision for income taxes for the nine months ended September 30, 2013 and 2012 was $482,161 and $175,685, respectively. The provision for income taxes for the nine months ended September 30, 2013 included the benefit of the elimination of a tax liability of $135,177 recorded in 2007 in connection with a tax position that could have been subject to reversal upon a regulatory review. At March 31, 2013 the time limit for regulatory assessment of the tax position expired and the liability was removed. The provision for income taxes for the nine months ended September 30, 2012 included the elimination of a tax liability of $196,423 also recorded in 2007, for which the time limit for regulatory review had expired. | |
U.S. deferred income tax benefits and a portion of foreign income tax benefits, were fully reserved and not recorded in the net deferred tax assets primarily because there is not sufficient evidence to determine that the Company will be able to utilize its net operating loss carryforwards to offset future taxable income. | |
Other tax liabilities were principally associated with foreign withholdings and funds transfers, and income tax payable from our Asia operations. Other tax liabilities as of September 30, 2013 and December 31, 2012 totaled $550,568 and $111,235, respectively, and were included in Accrued Expenses. | |
Current income taxes receivable were associated with foreign and domestic prepayments and totaled $186,378 and $178,043 as of September 30, 2013 and December 31, 2012, respectively. | |
Long term deferred income tax liabilities totaled $1,053,860 and $945,543 as of September 30, 2013 and December 31, 2012, respectively. The deferred income tax liability is primarily a tax basis difference related to the Company’s indefinite lived intangible asset. | |
On July 12, 2013, the Company entered into the Redemption Agreement with its preferred shareholder and completed a private placement transaction in which it sold 61,111,109 shares of Common stock. As consequence of these transactions the Company is currently evaluating the application of I.R.C. Section 382 concerning changes in ownership and the potential impact on the Company’s utilization of the net operating loss carryforwards to offset future taxable income, including the continued appropriateness of the valuation reserves which have been established offsetting this deferred tax asset as a consequence of previous operating losses. |
Note_12_Commitments_and_Contin
Note 12 - Commitments and Contingencies | 9 Months Ended | ||
Sep. 30, 2013 | |||
Commitments and Contingencies Disclosure [Abstract] | ' | ||
Commitments and Contingencies Disclosure [Text Block] | ' | ||
Note 12. Commitments and Contingencies | |||
The Company currently has pending claims and complaints that arise in the ordinary course of the Company’s business. The Company believes that it has meritorious defenses to these claims and that the claims are either covered by insurance or would not have a material effect on the Company’s consolidated financial position or results of operations if adversely determined against the Company. | |||
In November 2002, the FASB issued Topics of the FASB ASC 460-10, “Guarantees” (“ASC 460-10”) and FASB ASC 850-10, “Related Party Disclosures” (”ASC 850-10”). The following is a summary of the Company’s agreements that it has determined are within the scope of ASC 460-10 and ASC 850-10: | |||
● | In accordance with the bylaws of the Company, and indemnification agreements entered into with the members of the board of directors and executive officers, the Company’s officers and directors are indemnified for certain events or occurrences arising as a result of the officer or director’s serving in such capacity. The term of the indemnification period is for the lifetime of the officer or director. The maximum potential amount of future payments the Company could be required to make under the indemnification provisions of its bylaws and indemnification agreements is unlimited. However, the Company has a director and officer liability insurance policy that reduces its exposure and enables it to recover a portion of any future amounts paid. As a result of its insurance policy coverage, the Company believes the estimated fair value of the indemnification provisions of its bylaws and indemnification agreements is minimal and therefore, the Company has not recorded any related liabilities. | ||
● | The Company enters into indemnification provisions under its agreements with investors and its agreements with other parties in the normal course of business, typically with suppliers, customers and landlords. Under these provisions, the Company generally indemnifies and holds harmless the indemnified party for losses suffered or incurred by the indemnified party as a result of the Company’s activities or, in some cases, as a result of the indemnified party’s activities under the agreement. These indemnification provisions often include indemnifications relating to representations made by the Company with regard to intellectual property rights, and generally survive termination of the underlying agreement. The maximum potential amount of future payments the Company could be required to make under these indemnification provisions is unlimited. The Company has not incurred material costs to defend lawsuits or settle claims related to these indemnification agreements. As a result, the Company believes the estimated fair value of these agreements is minimal. Accordingly, the Company has not recorded any related liabilities. | ||
Note_13_Segment_Reporting_and_
Note 13 - Segment Reporting and Geographic Information | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Segment Reporting [Abstract] | ' | ||||||||||||||||
Segment Reporting Disclosure [Text Block] | ' | ||||||||||||||||
Note 13. Segment Reporting and Geographic Information | |||||||||||||||||
The Company manufactures and distributes a full range of zipper, trim and waistband items to manufacturers of fashion apparel, specialty retailers and mass merchandisers. The Company’s organization is based on divisions representing the major product lines, and the Company’s operating decisions use these divisions to assess performance, allocate resources and make other operating decisions. Within these product lines there is not enough difference between the types of products to justify segmented reporting by product type or to account for these products separately. The net revenues and operating margins for the three primary product groups are as follows: | |||||||||||||||||
Three Months ended September 30, 2013 | |||||||||||||||||
Talon | Trim | Tekfit | Consolidated | ||||||||||||||
Net sales | $ | 7,876,046 | $ | 5,826,090 | $ | 25,901 | $ | 13,728,037 | |||||||||
Cost of goods sold | 5,546,837 | 3,574,398 | 22,420 | 9,143,655 | |||||||||||||
Gross profit | $ | 2,329,209 | $ | 2,251,692 | $ | 3,481 | 4,584,382 | ||||||||||
Operating expenses | 3,645,357 | ||||||||||||||||
Income from operations | $ | 939,025 | |||||||||||||||
Three Months ended September 30, 2012 | |||||||||||||||||
Talon | Trim | Tekfit | Consolidated | ||||||||||||||
Net sales | $ | 5,730,650 | $ | 5,547,930 | $ | 10,137 | $ | 11,288,717 | |||||||||
Cost of goods sold | 4,152,514 | 3,478,455 | 6,876 | 7,637,845 | |||||||||||||
Gross profit | $ | 1,578,136 | $ | 2,069,475 | $ | 3,261 | 3,650,872 | ||||||||||
Operating expenses | 3,275,640 | ||||||||||||||||
Income from operations | $ | 375,232 | |||||||||||||||
Nine Months ended September 30, 2013 | |||||||||||||||||
Talon | Trim | Tekfit | Consolidated | ||||||||||||||
Net sales | $ | 23,178,408 | $ | 17,289,453 | $ | 40,890 | $ | 40,508,751 | |||||||||
Cost of goods sold | 16,319,503 | 10,845,890 | 31,058 | 27,196,451 | |||||||||||||
Gross profit | $ | 6,858,905 | $ | 6,443,563 | $ | 9,832 | 13,312,300 | ||||||||||
Operating expenses | 10,575,799 | ||||||||||||||||
Income from operations | $ | 2,736,501 | |||||||||||||||
Nine Months ended September 30, 2012 | |||||||||||||||||
Talon | Trim | Tekfit | |||||||||||||||
Net sales | $ | 17,074,745 | $ | 16,124,630 | $ | 15,141 | $ | 33,214,516 | |||||||||
Cost of goods sold | 12,292,511 | 10,112,403 | 29,245 | 22,434,159 | |||||||||||||
Gross profit (loss) | $ | 4,782,234 | $ | 6,012,227 | $ | (14,104 | ) | 10,780,357 | |||||||||
Operating expenses | 9,904,593 | ||||||||||||||||
Income from operations | $ | 875,764 | |||||||||||||||
The Company distributes its products internationally and has reporting requirements based on geographic regions. Revenues are attributed to countries based upon customer delivery locations and the net book value of long-lived assets (consisting of property and equipment and intangible) is attributed to countries based on the location of the assets, as follows: | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
Sales: | September 30, | September 30, | |||||||||||||||
Country / Region | 2013 | 2012 | 2013 | 2012 | |||||||||||||
United States | $ | 1,157,394 | $ | 1,369,612 | $ | 3,065,152 | $ | 3,237,883 | |||||||||
China | 4,322,596 | 2,634,915 | 12,209,535 | 8,279,337 | |||||||||||||
Hong Kong | 4,012,930 | 3,884,128 | 11,127,379 | 10,989,010 | |||||||||||||
Other | 4,235,117 | 3,400,062 | 14,106,685 | 10,708,286 | |||||||||||||
Total | $ | 13,728,037 | $ | 11,288,717 | $ | 40,508,751 | $ | 33,214,516 | |||||||||
September 30, | December 31, | ||||||||||||||||
2013 | 2012 | ||||||||||||||||
Long-lived Assets: | |||||||||||||||||
United States | $ | 4,547,058 | $ | 4,551,101 | |||||||||||||
Hong Kong | 358,662 | 419,268 | |||||||||||||||
China | 84,241 | 73,344 | |||||||||||||||
Total | $ | 4,989,961 | $ | 5,043,713 | |||||||||||||
Note_14_Related_Party_Transact
Note 14 - Related Party Transactions | 9 Months Ended |
Sep. 30, 2013 | |
Related Party Transactions [Abstract] | ' |
Related Party Transactions Disclosure [Text Block] | ' |
Note 14. Related Party Transactions | |
On July 12, 2013, the Company entered into the Redemption Agreement with CVC (our controlling stockholder at the time) and repurchased from CVC all of the 407,160 previously outstanding shares of our Series B Preferred Stock for an aggregate purchase price of $18,800,000, which purchase price was paid by delivery to CVC of $13,000,000 in cash and an unsecured Promissory Note in the principal amount of $5,800,000. Pursuant to the Redemption Agreement, the Stockholder’s Agreement with CVC, and with Lonnie D. Schnell, Chief Executive Officer, Chief Financial Officer and a member of the Board of Directors of the Company, and Larry Dyne, President of the Company was terminated. | |
In connection with the redemption in full of the Series B Preferred Stock, CVC representative on the Company Board of Directors, Mark Hughes, resigned from Board of Directors effective July 12, 2013. | |
In order to provide additional funds necessary for the redemption of the Series B Preferred Stock, the Company raised $5,500,000 of new equity capital through the sale, in a private placement transaction, of 61,111,109 shares of common stock at a price of $0.09 per share. The closing of the private placement was expressly conditioned upon the contemporaneous closing of the transactions under the Redemption Agreement. Zipper Holdings, LLC, a company controlled by Mark Dyne, the Chairman of our Board of Directors, acquired 8,333,333 shares of common stock in the private placement. At the closing of the private placement, the Company entered into Subscription Agreements (the “Subscription Agreements”) with each of the purchasers. The Company also entered into a Registration Rights Agreement with the investors in the transaction (the “Registration Rights Agreement“). The Registration Rights Agreement provides for demand registration rights, such that upon the demand of holders of at least 25% of the shares issued in the private placement and subject to certain conditions, the Company will file a registration statement covering the shares issued in the private placement and requested to be included in such registration. The Registration Rights Agreement also provides certain piggyback rights, in which the holders of shares acquired in the private placement have the right to include those shares in a Company-initiated registration. |
Note_15_Subsequent_Events
Note 15 - Subsequent Events | 9 Months Ended |
Sep. 30, 2013 | |
Subsequent Events [Abstract] | ' |
Subsequent Events [Text Block] | ' |
Note 15. Subsequent Events | |
The Company evaluated subsequent events after the balance sheet date of September 30, 2013 through the date of the filing of this report. | |
On November 8, 2013, the Company’s stockholders approved an amendment to the Company’s Certificate of Incorporation to increase the number of shares of common stock authorized to be issued by the Company from 100,000,000 to 300,000,000; an amendment to the Company’s Certificate of Incorporation to allow for a reverse split of the Company’s outstanding shares of common stock, when and if the Board of Director’s determine that such an action would be appropriate; and an amendment to the Company’s 2008 Stock Incentive Plan to increase from 4,810,000 to 15,000,000 the number of shares of common stock that may be issued pursuant to awards under the plan. |
Accounting_Policies_by_Policy_
Accounting Policies, by Policy (Policies) | 9 Months Ended | ||
Sep. 30, 2013 | |||
Accounting Policies [Abstract] | ' | ||
Receivables, Trade and Other Accounts Receivable, Allowance for Doubtful Accounts, Policy [Policy Text Block] | ' | ||
Allowance for Accounts Receivable Doubtful Accounts | |||
The Company is required to make judgments as to the collectability of accounts receivable based on established aging policy, historical experience and future expectations. The allowances for doubtful accounts represent allowances for customer trade accounts and that are estimated to be partially or entirely uncollectible. These allowances are used to reduce gross trade receivables to their net realizable value. The Company records these allowances based on estimates related to the following factors: (i) customer specific allowances; (ii) amounts based upon an aging schedule; and (iii) an estimated amount, based on our historical experience, for issues not yet identified. Bad debt expense (recovery), net on accounts receivable for the three and nine months ended September 30, 2013 was $(2,050) and $18,809, respectively. Bad debt expense (recovery), net on accounts receivable for the three and nine months ended September 30, 2012 was $(8,265) and $5,108, respectively | |||
Fair Value Measurement, Policy [Policy Text Block] | ' | ||
Fair Value Measurements | |||
Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. As a basis for considering such assumptions, the fair value guidance establishes a three-tier value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value: | |||
Level 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. | |||
Level 2 - Includes other inputs that are directly or indirectly observable in the marketplace. | |||
Level 3 - Unobservable inputs which are supported by little or no market activity. | |||
The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. | |||
The Company’s financial instruments include cash and cash equivalents, accounts receivable, other assets, accounts payable, accrued expenses, note payable and other liabilities. The book value of the financial instruments is representative of their fair values. In accordance with this guidance, the Company measures its cash equivalents at fair value. The Company’s cash equivalents are classified within Level 1. Cash equivalents are valued primarily using quoted market prices utilizing market observable inputs. At September 30, 2013 and December 31, 2012, cash equivalents consisted of money market funds measured at fair value on a recurring basis; fair value of the Company’s money market funds was approximately $955,000 and $2,230,000, respectively. | |||
The Company adopted the Financial Accounting Standards Board (“FASB”) staff position that delayed the guidance on fair value measurements for non-financial assets and non-financial liabilities. The adoption of this guidance did not have a material impact on the Company's consolidated financial statements. | |||
Goodwill and Intangible Assets, Intangible Assets, Policy [Policy Text Block] | ' | ||
Intangible Assets | |||
Intangible assets consist of the Talon trade name acquired in a purchase business combination, patents, licenses, intellectual property rights and technology. Intangible assets acquired in a purchase business combination and determined to have an indefinite useful life are not amortized, but instead are tested for impairment at least annually in accordance with the provisions of FASB Accounting Standards Codification (“ASC”) 350, “Intangibles - Goodwill and Other”. Intangible assets with estimable useful lives are amortized over their respective estimated useful lives using the straight-line method, and are reviewed for impairment in accordance with the provisions of ASC 360, “Property, Plant and Equipment”. Costs incurred to renew or extend the term of recognized intangible assets are capitalized and amortized over the useful life of the asset. | |||
In July 2012, the FASB issued Accounting Standards Update (“ASU”) 2012-02, “Intangibles – Goodwill and Other - Testing Indefinite-lived Intangible Assets for Impairment.” The updated guidance gives companies the option to first perform a qualitative assessment to determine whether it is more likely than not, defined as a likelihood of more than 50%, that an indefinite-lived intangible asset is impaired. If it is determined that it is more likely than not that an impairment exists, then the company is required to estimate the fair value of the indefinite-lived intangible assets and perform a quantitative impairment test in accordance with ASU 350-30. The updated guidance was effective for annual and interim indefinite lived intangibles asset impairment tests performed for fiscal years, and interim periods within those years, beginning after September 15, 2012. Early adoption was permitted as of a date before July 27, 2012. The adoption of this guidance did not have a material impact on the Company's consolidated financial statements. We completed the required assessment at September 30, 2013 and December 31, 2012, and noted no impairment. Consequently, no impairment charges were recorded. | |||
On April 2, 2002, the Company entered into an Exclusive License and Intellectual Property Rights Agreement (the “License Agreement”) with Pro-Fit Holdings Limited (“Pro-Fit”). The License Agreement granted the Company the exclusive rights to sell or sublicense waistbands manufactured under patented technology developed by Pro-Fit for garments manufactured anywhere in the world for sale in the United States market and to all United States brands. The License Agreement had an indefinite term that extended for the duration of the trade secrets and patented technology licensed under the License Agreement. The Company recorded an intangible asset of $612,500, which has been fully amortized. | |||
During the quarter ended March 31, 2012 the Company completed the acquisition from Pro-Fit and related parties of all U.S. patents, and applications, rights and technology associated with the stretch waistband technology that was formerly exclusively licensed under the License Agreement, and the License Agreement was terminated. During the quarter ended September 30, 2012 the Company also acquired other intellectual property related to accessory components used with a variety of apparel products. The total purchase price and related fees for all intangibles acquired in 2012 totaled $178,722, and is amortized based on the estimated useful lives between 10 and 17 years. Amortization expense for intangible assets was $3,271 and $9,562 for the three and nine months ended September 30, 2013, respectively. Amortization expense for intangible assets was $3,249 and $6,140, respectively for the three and nine months ended September 30, 2012. | |||
Intangible assets as of September 30, 2013 and December 31, 2012 are as follows: | |||
Stockholders' Equity Note, Redeemable Preferred Stock, Issue, Policy [Policy Text Block] | ' | ||
Convertible Preferred Stock | |||
On July 12, 2013 the Company entered into a Securities Redemption Agreement (the “Redemption Agreement”) with CVC California, LLC (“CVC”). Pursuant to the Redemption Agreement, the Company repurchased from CVC all of the 407,160 outstanding shares of the Company’s Series B Convertible Preferred Stock (the “Series B Preferred Stock”) for an aggregate purchase price of $18,800,000, which purchase price was paid by delivery of $13,000,000 in cash and the issuance to CVC of a promissory note in the principal amount of $5,800,000 (the “Promissory Note”). As of the date of the transaction, the total value of the Series B Convertible Preferred Stock was $25,893,686, and a redemption discount (net of redemption costs of $154,429) of $6,939,257 was recorded to accumulated deficit on the consolidated balance sheets, and reflected in the earnings per share calculation of net income available to common shareholders. | |||
The Company reported its conditionally redeemable convertible preferred shares as temporary equity in the mezzanine section of the consolidated balance sheets, in accordance with the guidance enumerated in FASB ASC No. 480-10 “Distinguishing Liabilities from Equity”, FASB ASC No. 210 “Classification and Measurement of Redeemable Securities” and Rule 5-02.28 of Regulation S-X, when determining the classification and measurement of preferred stock. | |||
The Company reported the conversion option of its convertible preferred shares in accordance with FASB ASC No. 470-20, “Debt with Conversion and Other Options”, Accounting for Convertible Securities with Beneficial Conversion Features (“BCF”) or Contingently Adjustable Conversion Ratios. A convertible financial instrument includes a BCF when the fair market value of the preferred stock is lower than the value of common stock when the preferred stock converts to common stock at the issuance date. The BCF shall be recognized separately at issuance by allocating a portion of the proceeds equal to the intrinsic value of the feature to additional paid-in capital. | |||
The convertible preferred shares, which were redeemable preferred securities, were reported at their current liquidation preference amount. Redeemable securities initially are recorded at their fair value minus the BCF and minus preferred stock issuance costs, and then are subsequently adjusted for changes in the preferred stock value in accordance with the following guidelines: | |||
● | When an equity instrument is not currently redeemable but it is probable that the equity instrument will become redeemable (for example, when the redemption depends solely on the passage of time), then changes in the redemption value are recognized as they occur, and the carrying amount of the instrument is adjusted to equal the current redemption value. An increase in the carrying amount of the instrument reduces income available to common shareholders in the calculation of earnings per share. | ||
● | When the liquidation preference increases on preferred shares it is added to the preferred stock carrying amount, and reduces income available to common shareholders in the calculation of earnings per share. | ||
Cost of Sales, Policy [Policy Text Block] | ' | ||
Costs of Goods Sold – Cost of goods sold primarily includes expenses related to inventory purchases, customs, duty, freight, overhead expenses and reserves for obsolete inventory. Overhead expenses primarily consist of warehouse and operations salaries, and other warehouse expense | |||
Selling, General and Administrative Expenses, Policy [Policy Text Block] | ' | ||
Sales and Marketing Expenses – Sales and marketing expenses primarily include sales salaries and commissions, travel and entertainment, marketing, advertising, royalty expense, and other sales related costs. Marketing and advertising efforts are expensed as incurred. | |||
General and Administrative Expenses – General and administrative expenses primarily include administrative salaries, employee benefits, professional service fees, facility expenses, information technology costs, investor relations, travel and entertainment, depreciation and amortization, bad debts and other general corporate expenses | |||
Interest Expense, Policy [Policy Text Block] | ' | ||
Interest Expense, net – Interest expense reflects the cost of borrowing. Interest expense for the three and nine months ended September 30, 2013 totaled $11,800 and $14,472 respectively. Interest expense for the three and nine months ended September 30, 2012 totaled $7,288 and $50,751, respectively. Interest income consists of earnings from cash held in interest bearing accounts. For the three and nine months ended September 30, 2013 the Company recorded interest income of $1,159 and $3,256, respectively. For the three and nine months ended September 30, 2012 the Company recorded interest income of $1,338 and $3,041, respectively. | |||
Foreign Currency Transactions and Translations Policy [Policy Text Block] | ' | ||
Foreign Currency Translation | |||
The Company has operations and holds assets in various foreign countries. The local currency is the functional currency for the Company’s subsidiaries in China and India. Assets and liabilities are translated at end-of-period exchange rates while revenues and expenses are translated at the average exchange rates in effect during the period. Equity is translated at historical rates and the resulting cumulative translation adjustments are included as a component of accumulated other comprehensive income until the translation adjustments are realized. Included in accumulated other comprehensive income were a cumulative foreign currency translation gain of $118,554 and $67,482 at September 30, 2013 and December 31, 2012, respectively. | |||
Comprehensive Income, Policy [Policy Text Block] | ' | ||
Comprehensive Income | |||
Comprehensive income consists of net income and unrealized income (loss) on foreign currency translation adjustments. The foreign currency translation adjustment represents the net currency translation gains and losses related to our China and India subsidiaries, which have not been reflected in the net income for the periods presented. | |||
In the first quarter of 2012 we adopted FASB ASU 2011-05, “Presentation of Comprehensive Income” (“ASU 2011-05”) and ASU 2011-12, “Comprehensive Income (Topic 220)”, which amended ASC Topic 220, “Comprehensive Income”, and was effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. The Company chose the option provided by ASU 2011-05 to present the total of comprehensive income (loss), the components of net income (loss) and the components of other comprehensive income (loss) in a single continuous statement. Adoption of the guidance did not have any impact on our results of operations or financial condition | |||
Use of Estimates, Policy [Policy Text Block] | ' | ||
Use of Estimates | |||
The preparation of consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the year. The accounting estimates that require the Company’s most significant, difficult and subjective judgments include the valuation allowance for accounts receivable and inventory, and the assessment of recoverability of long-lived assets and intangible assets, stock-based compensation and the recognition and measurement of current and deferred income taxes (including the measurement of uncertain tax positions). Actual results could differ materially from the Company’s estimates. | |||
New Accounting Pronouncements, Policy [Policy Text Block] | ' | ||
In July 2013, the FASB issued ASU 2013-11, "Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists" ("ASU 2013-11"), which sets forth explicit guidance on the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. This guidance is effective for fiscal years, and interim periods beginning after December 15, 2013, with early adoption permitted. The Company adopted ASU 2013-011 as of September 30, 2013 with no impact on the consolidated financial statements. |
Note_2_Summary_of_Significant_1
Note 2 - Summary of Significant Accounting Policies (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Accounting Policies [Abstract] | ' | ||||||||
Schedule of Intangible Assets and Goodwill [Table Text Block] | ' | ||||||||
September 30, | December 31, | ||||||||
2013 | 2012 | ||||||||
Tradename | $ | 4,110,751 | $ | 4,110,751 | |||||
Intellectual property rights and exclusive license | 178,722 | 178,722 | |||||||
Accumulated amortization | (19,092 | ) | (9,530 | ) | |||||
Intellectual property rights, net | 159,630 | 169,192 | |||||||
Intangible assets, net | $ | 4,270,381 | $ | 4,279,943 |
Note_4_Net_Income_Loss_per_Sha1
Note 4 - Net Income (Loss) per Share (Tables) | 9 Months Ended | ||||||||||||
Sep. 30, 2013 | |||||||||||||
Earnings Per Share [Abstract] | ' | ||||||||||||
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | ' | ||||||||||||
Net income | Shares | Per Share | |||||||||||
(loss) | Amount | ||||||||||||
Three Months ended September 30, 2013: | |||||||||||||
Basic net income per share: | |||||||||||||
Net income | $ | 700,056 | 82,946,352 | $ | 0.01 | ||||||||
Series B Preferred Stock liquidation preference increase prior to redemption | (116,029 | ) | 0 | ||||||||||
Series B Preferred Stock Redemption discount, net | 6,939,257 | 0.08 | |||||||||||
Net income applicable to Common Shareholders | 7,523,284 | 82,946,352 | 0.09 | ||||||||||
Effect of Dilutive Securities - Options, Preferred Stock and RSUs | - | 3,432,811 | - | ||||||||||
Diluted net income applicable to Common Shareholders | $ | 7,523,284 | 86,379,163 | $ | 0.09 | ||||||||
Three Months ended September 30, 2012: | |||||||||||||
Basic net income per share: | |||||||||||||
Net income | $ | 186,865 | 22,911,678 | $ | 0.01 | ||||||||
Series B Preferred Stock liquidation preference increase | (857,877 | ) | (0.04 | ) | |||||||||
Net income (loss) applicable to Common Shareholders | (671,012 | ) | 22,911,678 | (0.03 | ) | ||||||||
Effect of Dilutive Securities - Options, Preferred Stock and RSUs | - | - | - | ||||||||||
Diluted net income (loss) applicable to Common Shareholders | $ | (671,012 | ) | 22,911,678 | $ | (0.03 | ) | ||||||
Net income | Shares | Per Share | |||||||||||
(loss) | Amount | ||||||||||||
Nine Months ended September 30, 2013: | |||||||||||||
Basic net income per share: | |||||||||||||
Net income | $ | 2,243,124 | 44,297,109 | $ | 0.05 | ||||||||
Series B Preferred Stock liquidation preference increase prior to redemption | (1,914,470 | ) | (0.04 | ) | |||||||||
Series B Preferred Stock redemption discount, net | 6,939,257 | 0.15 | |||||||||||
Net income applicable to Common Shareholders | 7,267,911 | 44,297,109 | 0.16 | ||||||||||
Effect of Dilutive Securities - Options, Preferred Stock and RSUs | - | 3,573,859 | - | ||||||||||
Diluted net income applicable to Common Shareholders | $ | 7,267,911 | 47,870,968 | $ | 0.15 | ||||||||
Nine Months ended September 30, 2012: | |||||||||||||
Basic net income per share: | |||||||||||||
Net income | $ | 652,369 | 22,141,684 | $ | 0.03 | ||||||||
Series B Preferred Stock liquidation preference increase | (2,408,257 | ) | (0.11 | ) | |||||||||
Net Income (loss) applicable to Common Shareholders | (1,755,888 | ) | 22,141,684 | (0.08 | ) | ||||||||
Effect of Dilutive Securities - Options, Preferred Stock and RSUs | - | - | - | ||||||||||
Diluted net income (loss) applicable to Common Shareholders | $ | (1,755,888 | ) | 22,141,684 | $ | (0.08 | ) |
Note_6_Inventories_Tables
Note 6 - Inventories (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Inventory Disclosure [Abstract] | ' | ||||||||
Schedule of Inventory, Current [Table Text Block] | ' | ||||||||
September 30, | December 31, | ||||||||
2013 | 2012 | ||||||||
Finished goods | $ | 1,216,118 | $ | 991,635 | |||||
Less reserves | (244,520 | ) | (261,132 | ) | |||||
Total inventories | $ | 971,598 | $ | 730,503 |
Note_9_Series_B_Convertible_Pr1
Note 9 - Series B Convertible Preferred Stock and Stockholders' Equity (Deficit) (Tables) | 9 Months Ended | ||||
Sep. 30, 2013 | |||||
Stockholders' Equity Note [Abstract] | ' | ||||
Temporary Equity [Table Text Block] | ' | ||||
Series B Preferred Stock as of December 31, 2012 | $ | 23,979,216 | |||
Series B Preferred Stock liquidation preference increase for the six months ended June 30, 2013 | 1,798,441 | ||||
Series B Preferred Stock as of June 30, 2013 | 25,777,657 | ||||
Series B Preferred Stock liquidation preference increase for July 1-July 12, 2013 | 116,029 | ||||
Series B Preferred Stock as of July 12, 2013 per original redemption value | 25,893,686 | ||||
Series B Preferred Stock redemption discount | (7,093,686 | ) | |||
Series B Preferred Stock before the Redemption | 18,800,000 | ||||
Series B Preferred Stock Redemption on July 12, 2013 | (18,800,000 | ) | |||
Series B Preferred Stock as of September 30, 2013 | $ | - |
Note_10_StockBased_Compensatio1
Note 10 - Stock-Based Compensation (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ||||||||||||||||
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block] | ' | ||||||||||||||||
Weighted | |||||||||||||||||
Average | |||||||||||||||||
Number of | Exercise | ||||||||||||||||
Shares | Price | ||||||||||||||||
Employees and Directors | |||||||||||||||||
Options outstanding - January 1, 2013 | 6,372,100 | $ | 0.21 | ||||||||||||||
Granted | - | $ | - | ||||||||||||||
Cancelled | (287,500 | ) | $ | 0.87 | |||||||||||||
Options outstanding - June 30, 2013 | 6,084,600 | $ | 0.18 | ||||||||||||||
Granted | 400,000 | $ | 0.28 | ||||||||||||||
Cancelled | (250,000 | ) | $ | 0.07 | |||||||||||||
Options outstanding - September 30, 2013 | 6,234,600 | $ | 0.19 | ||||||||||||||
Schedule of Unvested Restricted Stock Units Roll Forward [Table Text Block] | ' | ||||||||||||||||
Number of RSU’s | |||||||||||||||||
Total | Common | Intrinsic value | Shares | ||||||||||||||
RSU’s | shares | at the time | remaining | ||||||||||||||
awarded | issued | of issuance | to be issued | ||||||||||||||
30-Jul-10 | 11,557,000 | $ | 0.196 | ||||||||||||||
30-Aug-11 | 600,000 | $ | 0.1 | ||||||||||||||
30-Jan-12 | 900,000 | $ | 0.05 | ||||||||||||||
30-Jul-12 | 1,500,000 | $ | 0.04 | ||||||||||||||
30-Jan-13 | 1,500,000 | $ | 0.04 | ||||||||||||||
12-Jul-13 | 4,745,600 | $ | 0.06 | ||||||||||||||
30-Jul-13 | 1,155,700 | $ | 0.25 | ||||||||||||||
Total at September 30, 2013 | 10,401,300 | 1,155,700 | |||||||||||||||
Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity [Table Text Block] | ' | ||||||||||||||||
Weighted | |||||||||||||||||
Average | |||||||||||||||||
Number of RSU’s | Grant date | ||||||||||||||||
Unvested | Vested | Total | value per RSU | ||||||||||||||
RSU’s outstanding – December 31, 2012 | 3,467,100 | 5,089,900 | 8,557,000 | $ | 0.196 | ||||||||||||
Common stock vested | (1,155,700 | ) | 1,155,700 | - | $ | 0.196 | |||||||||||
Common stock issued | - | (1,500,000 | ) | (1,500,000 | ) | $ | 0.196 | ||||||||||
RSU’s outstanding – June 30, 2013 | 2,311,400 | 4,745,600 | 7,057,000 | $ | 0.196 | ||||||||||||
Common stock vested | (1,155,700 | ) | 1,155,700 | - | $ | 0.196 | |||||||||||
Common stock issued | - | (5,901,300 | ) | (5,901,300 | ) | $ | 0.196 | ||||||||||
RSU’s outstanding – September 30, 2013 | 1,155,700 | - | 1,155,700 | $ | 0.196 |
Note_13_Segment_Reporting_and_1
Note 13 - Segment Reporting and Geographic Information (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Segment Reporting [Abstract] | ' | ||||||||||||||||
Schedule of Segment Reporting Information, by Segment [Table Text Block] | ' | ||||||||||||||||
Three Months ended September 30, 2013 | |||||||||||||||||
Talon | Trim | Tekfit | Consolidated | ||||||||||||||
Net sales | $ | 7,876,046 | $ | 5,826,090 | $ | 25,901 | $ | 13,728,037 | |||||||||
Cost of goods sold | 5,546,837 | 3,574,398 | 22,420 | 9,143,655 | |||||||||||||
Gross profit | $ | 2,329,209 | $ | 2,251,692 | $ | 3,481 | 4,584,382 | ||||||||||
Operating expenses | 3,645,357 | ||||||||||||||||
Income from operations | $ | 939,025 | |||||||||||||||
Three Months ended September 30, 2012 | |||||||||||||||||
Talon | Trim | Tekfit | Consolidated | ||||||||||||||
Net sales | $ | 5,730,650 | $ | 5,547,930 | $ | 10,137 | $ | 11,288,717 | |||||||||
Cost of goods sold | 4,152,514 | 3,478,455 | 6,876 | 7,637,845 | |||||||||||||
Gross profit | $ | 1,578,136 | $ | 2,069,475 | $ | 3,261 | 3,650,872 | ||||||||||
Operating expenses | 3,275,640 | ||||||||||||||||
Income from operations | $ | 375,232 | |||||||||||||||
Nine Months ended September 30, 2013 | |||||||||||||||||
Talon | Trim | Tekfit | Consolidated | ||||||||||||||
Net sales | $ | 23,178,408 | $ | 17,289,453 | $ | 40,890 | $ | 40,508,751 | |||||||||
Cost of goods sold | 16,319,503 | 10,845,890 | 31,058 | 27,196,451 | |||||||||||||
Gross profit | $ | 6,858,905 | $ | 6,443,563 | $ | 9,832 | 13,312,300 | ||||||||||
Operating expenses | 10,575,799 | ||||||||||||||||
Income from operations | $ | 2,736,501 | |||||||||||||||
Nine Months ended September 30, 2012 | |||||||||||||||||
Talon | Trim | Tekfit | |||||||||||||||
Net sales | $ | 17,074,745 | $ | 16,124,630 | $ | 15,141 | $ | 33,214,516 | |||||||||
Cost of goods sold | 12,292,511 | 10,112,403 | 29,245 | 22,434,159 | |||||||||||||
Gross profit (loss) | $ | 4,782,234 | $ | 6,012,227 | $ | (14,104 | ) | 10,780,357 | |||||||||
Operating expenses | 9,904,593 | ||||||||||||||||
Income from operations | $ | 875,764 | |||||||||||||||
Revenue from External Customers by Geographic Areas [Table Text Block] | ' | ||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
Sales: | September 30, | September 30, | |||||||||||||||
Country / Region | 2013 | 2012 | 2013 | 2012 | |||||||||||||
United States | $ | 1,157,394 | $ | 1,369,612 | $ | 3,065,152 | $ | 3,237,883 | |||||||||
China | 4,322,596 | 2,634,915 | 12,209,535 | 8,279,337 | |||||||||||||
Hong Kong | 4,012,930 | 3,884,128 | 11,127,379 | 10,989,010 | |||||||||||||
Other | 4,235,117 | 3,400,062 | 14,106,685 | 10,708,286 | |||||||||||||
Total | $ | 13,728,037 | $ | 11,288,717 | $ | 40,508,751 | $ | 33,214,516 | |||||||||
Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas [Table Text Block] | ' | ||||||||||||||||
September 30, | December 31, | ||||||||||||||||
2013 | 2012 | ||||||||||||||||
Long-lived Assets: | |||||||||||||||||
United States | $ | 4,547,058 | $ | 4,551,101 | |||||||||||||
Hong Kong | 358,662 | 419,268 | |||||||||||||||
China | 84,241 | 73,344 | |||||||||||||||
Total | $ | 4,989,961 | $ | 5,043,713 |
Note_2_Summary_of_Significant_2
Note 2 - Summary of Significant Accounting Policies (Details) (USD $) | 3 Months Ended | 9 Months Ended | 0 Months Ended | 0 Months Ended | 9 Months Ended | ||||||||||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Apr. 02, 2002 | Jul. 12, 2013 | Jul. 12, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Dec. 31, 2012 | Jul. 30, 2010 | Jul. 12, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | |
Series B Convertible Preferred Stock [Member] | Series B Convertible Preferred Stock [Member] | Series B Convertible Preferred Stock [Member] | Series B Convertible Preferred Stock [Member] | Series B Convertible Preferred Stock [Member] | Series B Convertible Preferred Stock [Member] | Series B Convertible Preferred Stock [Member] | Pro-Fit [Member] | Pro-Fit [Member] | Money Market Funds [Member] | Money Market Funds [Member] | |||||||
Short-term Debt [Member] | Cash [Member] | Minimum [Member] | Maximum [Member] | ||||||||||||||
Note 2 - Summary of Significant Accounting Policies (Details) [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Provision for Doubtful Accounts | ($2,050) | ($8,265) | $18,809 | $5,108 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash and Cash Equivalents, Fair Value Disclosure | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 955,000 | 2,230,000 |
Finite-Lived Intangible Assets, Gross | 178,722 | ' | 178,722 | ' | 178,722 | 612,500 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Finite-Lived Intangible Asset, Useful Life | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '10 years | '17 years | ' | ' |
Amortization of Intangible Assets | 3,271 | 3,249 | 9,562 | 6,140 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Preferred Stock, Redemption Date | ' | ' | ' | ' | ' | ' | ' | 12-Jul-13 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock Redeemed or Called During Period, Shares (in Shares) | ' | ' | ' | ' | ' | ' | ' | 407,160 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Payments for Repurchase of Redeemable Convertible Preferred Stock (in Dollars) | ' | ' | 18,800,000 | ' | ' | ' | 5,800,000 | 18,800,000 | ' | ' | ' | ' | 13,000,000 | ' | ' | ' | ' |
Temporary Equity, Carrying Amount, Attributable to Parent | ' | ' | ' | ' | ' | ' | ' | 25,893,686 | 0 | 25,777,657 | 23,979,216 | 15,803,513 | ' | ' | ' | ' | ' |
Payments For Cost Associated With Redemption Of Preferred Stock | ' | ' | 154,429 | ' | ' | ' | ' | 154,429 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Preferred Stock Redemption Discount (in Dollars) | 6,939,257 | ' | 6,939,257 | ' | ' | ' | ' | 6,939,257 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest Expense | 11,800 | 7,288 | 14,472 | 50,751 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest Income, Other | 1,159 | 1,338 | 3,256 | 3,041 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Accumulated Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Net of Tax | $118,554 | ' | $118,554 | ' | $67,482 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Note_2_Summary_of_Significant_3
Note 2 - Summary of Significant Accounting Policies (Details) - Intangible Assets (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Apr. 02, 2002 |
Intangible Assets [Abstract] | ' | ' | ' |
Tradename | $4,110,751 | $4,110,751 | ' |
Intellectual property rights and exclusive license | 178,722 | 178,722 | 612,500 |
Accumulated amortization | -19,092 | -9,530 | ' |
Intellectual property rights, net | 159,630 | 169,192 | ' |
Intangible assets, net | $4,270,381 | $4,279,943 | ' |
Note_4_Net_Income_Loss_per_Sha2
Note 4 - Net Income (Loss) per Share (Details) (USD $) | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 0 Months Ended | 38 Months Ended | 3 Months Ended | 9 Months Ended | 0 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 0 Months Ended | |||||||||||
Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Jul. 30, 2013 | Jul. 12, 2013 | Jan. 30, 2013 | Jul. 30, 2012 | Jan. 30, 2012 | Aug. 30, 2011 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Jul. 12, 2013 | Jul. 12, 2013 | Jul. 12, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2012 | Jul. 12, 2013 | |
Employee And Board Member Stock Options [Member] | Employee And Board Member Stock Options [Member] | Employee And Board Member Stock Options [Member] | Employee And Board Member Stock Options [Member] | Restricted Stock Units (RSUs) [Member] | Restricted Stock Units (RSUs) [Member] | Restricted Stock Units (RSUs) [Member] | Restricted Stock Units (RSUs) [Member] | Restricted Stock Units (RSUs) [Member] | Restricted Stock Units (RSUs) [Member] | Restricted Stock Units (RSUs) [Member] | Restricted Stock Units (RSUs) [Member] | Restricted Stock Units (RSUs) [Member] | Restricted Stock Units (RSUs) [Member] | Restricted Stock Units (RSUs) [Member] | Series B Convertible Preferred Stock [Member] | Series B Convertible Preferred Stock [Member] | Series B Convertible Preferred Stock [Member] | Stock Compensation Plan [Member] | Stock Compensation Plan [Member] | Series B Convertible Preferred Stock [Member] | Series B Convertible Preferred Stock [Member] | Common Stock [Member] | |||
Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Short-term Debt [Member] | Cash [Member] | |||||||||||||||||
Note 4 - Net Income (Loss) per Share (Details) [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Incremental Common Shares Attributable to Dilutive Effect of Share-based Payment Arrangements | ' | ' | 5,595,000 | ' | 2,355,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Lower Range Limit (in Dollars per share) | ' | ' | $0.04 | $0.04 | $0.04 | $0.04 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.28 | $0.08 | ' | ' | ' |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Upper Range Limit (in Dollars per share) | ' | ' | $0.20 | $5.23 | $0.11 | $5.23 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $5.23 | $5.23 | ' | ' | ' |
Incremental Common Shares Attributable to Dilutive Effect of Equity Unit Purchase Agreements | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,155,700 | ' | 1,155,700 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | ' | ' | ' | 6,372,100 | ' | 6,372,100 | ' | ' | ' | ' | ' | ' | ' | ' | 8,557,000 | ' | 8,557,000 | ' | ' | ' | 639,600 | 3,879,600 | 40,716,000 | 40,716,000 | ' |
Preferred Stock, Redemption Date | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 12-Jul-13 | ' | ' | ' | ' | ' | ' |
Stock Redeemed or Called During Period, Shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 407,160 | ' | ' | ' | ' | ' | ' |
Payments for Repurchase of Redeemable Convertible Preferred Stock (in Dollars) | ' | $18,800,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $5,800,000 | $18,800,000 | $13,000,000 | ' | ' | ' | ' | ' |
Proceeds from Issuance of Private Placement (in Dollars) | ' | 5,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,500,000 |
Stock Issued During Period, Shares, New Issues (in Shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 61,111,109 |
Sale of Stock, Price Per Share (in Dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.09 |
Stock Issued During Period, Shares, Share-based Compensation, Net of Forfeitures (in Shares) | ' | ' | ' | ' | ' | ' | 1,155,700 | 4,745,600 | 1,500,000 | 1,500,000 | 900,000 | 600,000 | 10,401,300 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Preferred Stock Redemption Discount (in Dollars) | $6,939,257 | $6,939,257 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $6,939,257 | ' | ' | ' | ' | ' | ' |
Note_4_Net_Income_Loss_per_Sha3
Note 4 - Net Income (Loss) per Share (Details) - Reconciliation of the Numerators and Denominators of the Basic and Diluted Net Income/Loss Per Share (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Basic net income per share: | ' | ' | ' | ' |
Net income (loss) (Numerator) - net income/loss (in Dollars) | $700,056 | $186,865 | $2,243,124 | $652,369 |
Shares (Denominator) - net income/loss (in Shares) | 82,946,352 | 22,911,678 | 44,297,109 | 22,141,684 |
Per Share Amount - net income/loss | $0.01 | $0.01 | $0.05 | $0.03 |
Net income (loss) (Numerator) - Series B Preferred Stock Liquidation Preference Increase (in Dollars) | -116,029 | -857,877 | -1,914,470 | -2,408,257 |
Per Share Amount - Series B Preferred Stock Liquidation Preference Increase | $0 | ($0.04) | ($0.04) | ($0.11) |
Series B Preferred Stock Redemption discount, net (in Dollars) | 6,939,257 | ' | 6,939,257 | ' |
Series B Preferred Stock Redemption discount, net | $0.08 | ' | $0.15 | ' |
Net income (loss) (Numerator) - Income (loss) applicable to Common Shareholders (in Dollars) | 7,523,284 | -671,012 | 7,267,911 | -1,755,888 |
Shares (Denominator) - Income (loss) applicable to Common Shareholders (in Shares) | 82,946,352 | 22,911,678 | 44,297,109 | 22,141,684 |
Per Share Amount - Income (loss) applicable to Common Shareholders | $0.09 | ($0.03) | $0.16 | ($0.08) |
Effect of Dilutive Securities - Options, Preferred Stock and RSUs (in Shares) | 3,432,811 | ' | 3,573,859 | ' |
Net income (loss) (Numerator) - Diluted net income (loss) applicable to Common Shareholders (in Dollars) | $7,523,284 | ($671,012) | $7,267,911 | ($1,755,888) |
Shares (Denominator) - Diluted net income (loss) applicable to Common Shareholders (in Shares) | 86,379,163 | 22,911,678 | 47,870,968 | 22,141,684 |
Per Share Amount - Diluted net income (loss) applicable to Common Shareholders | $0.09 | ($0.03) | $0.15 | ($0.08) |
Note_5_Accounts_Receivable_Det
Note 5 - Accounts Receivable (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Receivables [Abstract] | ' | ' |
Allowance for Doubtful Accounts Receivable, Current | $20,899 | $1,093 |
Note_6_Inventories_Details_Inv
Note 6 - Inventories (Details) - Inventories (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Inventories [Abstract] | ' | ' |
Finished goods | $1,216,118 | $991,635 |
Less reserves | -244,520 | -261,132 |
Total inventories | $971,598 | $730,503 |
Note_7_Note_Payable_Details
Note 7 - Note Payable (Details) (USD $) | 3 Months Ended | 9 Months Ended | 0 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Jul. 12, 2013 | Jul. 12, 2013 | Jul. 12, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Jul. 12, 2013 | |
Series B Convertible Preferred Stock [Member] | Series B Convertible Preferred Stock [Member] | Series B Convertible Preferred Stock [Member] | Short-term Debt [Member] | Short-term Debt [Member] | Short-term Debt [Member] | ||||
Short-term Debt [Member] | Cash [Member] | ||||||||
Note 7 - Note Payable (Details) [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Preferred Stock, Redemption Date | ' | ' | ' | ' | 12-Jul-13 | ' | ' | ' | ' |
Stock Redeemed or Called During Period, Shares (in Shares) | ' | ' | ' | ' | 407,160 | ' | ' | ' | ' |
Payments for Repurchase of Redeemable Convertible Preferred Stock | ' | $18,800,000 | ' | $5,800,000 | $18,800,000 | $13,000,000 | ' | ' | ' |
Debt Instrument, Interest Rate, Stated Percentage | ' | ' | ' | ' | ' | ' | ' | ' | 1.00% |
Interest Expense, Debt | $6,667 | ' | $46,667 | ' | ' | ' | $12,871 | $12,871 | ' |
Note_8_Debt_Facility_Details
Note 8 - Debt Facility (Details) (USD $) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2010 | Sep. 30, 2012 | Sep. 30, 2011 | Sep. 30, 2012 | Jul. 30, 2010 | |
Note 8 - Debt Facility (Details) [Line Items] | ' | ' | ' | ' | ' |
Notes Payable | ' | ' | ' | ' | $11,548,098 |
Line of Credit Facility, Amount Outstanding | ' | ' | ' | ' | 5,158,587 |
Line of Credit Facility, Maximum Borrowing Capacity | ' | ' | ' | ' | 3,000,000 |
Payments of Financing Costs | 60,000 | ' | ' | ' | ' |
Line of Credit Facility, Commitment Fee Amount | ' | ' | 50,000 | ' | ' |
Interest Expense, Debt | ' | 6,667 | ' | 46,667 | ' |
Amortization of Financing Costs | ' | 2,500 | ' | 17,500 | ' |
Debt Related Commitment Fees and Debt Issuance Costs | ' | 4,167 | ' | 29,167 | ' |
Recapitalization Agreement [Member] | ' | ' | ' | ' | ' |
Note 8 - Debt Facility (Details) [Line Items] | ' | ' | ' | ' | ' |
Long-term Debt, Current Maturities | ' | ' | ' | ' | $16,706,685 |
Note_9_Series_B_Convertible_Pr2
Note 9 - Series B Convertible Preferred Stock and Stockholders' Equity (Deficit) (Details) (USD $) | 3 Months Ended | 9 Months Ended | 0 Months Ended | 0 Months Ended | 38 Months Ended | 0 Months Ended | ||||||||||||||||
Sep. 30, 2010 | Sep. 30, 2013 | Dec. 31, 2012 | Nov. 08, 2013 | Jul. 30, 2016 | Jul. 12, 2013 | Jul. 12, 2013 | Jul. 30, 2010 | Sep. 30, 2013 | Jun. 30, 2013 | Dec. 31, 2012 | Jul. 12, 2013 | Jul. 30, 2013 | Jul. 12, 2013 | Jan. 30, 2013 | Jul. 30, 2012 | Jan. 30, 2012 | Aug. 30, 2011 | Sep. 30, 2013 | Sep. 30, 2013 | Jul. 12, 2013 | Jul. 30, 2010 | |
Subsequent Event [Member] | Scenario, Forecast [Member] | Series B Convertible Preferred Stock [Member] | Series B Convertible Preferred Stock [Member] | Series B Convertible Preferred Stock [Member] | Series B Convertible Preferred Stock [Member] | Series B Convertible Preferred Stock [Member] | Series B Convertible Preferred Stock [Member] | Series B Convertible Preferred Stock [Member] | Restricted Stock Units (RSUs) [Member] | Restricted Stock Units (RSUs) [Member] | Restricted Stock Units (RSUs) [Member] | Restricted Stock Units (RSUs) [Member] | Restricted Stock Units (RSUs) [Member] | Restricted Stock Units (RSUs) [Member] | Restricted Stock Units (RSUs) [Member] | Kutula Holdings Ltd [Member] | Common Stock [Member] | Recapitalization Agreement [Member] | ||||
Series B Convertible Preferred Stock [Member] | Short-term Debt [Member] | Cash [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Minimum [Member] | ||||||||||||
Note 9 - Series B Convertible Preferred Stock and Stockholders' Equity (Deficit) (Details) [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Preferred Stock, Redemption Date | ' | ' | ' | ' | ' | ' | 12-Jul-13 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock Redeemed or Called During Period, Shares (in Shares) | ' | ' | ' | ' | ' | ' | 407,160 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Payments for Repurchase of Redeemable Convertible Preferred Stock | ' | $18,800,000 | ' | ' | ' | $5,800,000 | $18,800,000 | ' | ' | ' | ' | $13,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Proceeds from Issuance of Private Placement | ' | 5,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,500,000 | ' |
Stock Issued During Period, Shares, New Issues (in Shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 61,111,109 | ' |
Sale of Stock, Price Per Share (in Dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.09 | ' |
Temporary Equity, Carrying Amount, Attributable to Parent | ' | ' | ' | ' | 40,704,105 | ' | 25,893,686 | 15,803,513 | 0 | 25,777,657 | 23,979,216 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock Issued During Period, Shares, Share-based Compensation, Net of Forfeitures (in Shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,155,700 | 4,745,600 | 1,500,000 | 1,500,000 | 900,000 | 600,000 | 10,401,300 | ' | ' | ' |
Temporary Equity, Shares Issued (in Shares) | ' | ' | ' | ' | ' | ' | ' | 407,160 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Temporary Equity, Par or Stated Value Per Share (in Dollars per share) | ' | ' | ' | ' | ' | ' | ' | $0.00 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Long-term Debt, Current Maturities | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 16,706,685 |
Convertible Preferred Stock, Shares Issued upon Conversion (in Shares) | ' | ' | ' | ' | ' | ' | ' | 100 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Temporary Equity, Liquidation Preference Per Share (in Dollars per share) | ' | ' | ' | ' | ' | ' | ' | $41.03 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Preferred Stock, Dividend Rate, Percentage | ' | ' | ' | ' | ' | ' | ' | 16.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Temporary Equity Percentage Of Voting Shares | ' | ' | ' | ' | ' | ' | ' | 35.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Gains (Losses) on Extinguishment of Debt | ' | ' | ' | ' | ' | ' | ' | -570,915 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Convertible, Beneficial Conversion Feature | ' | ' | ' | ' | ' | ' | ' | 1,283,343 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Conversion of Stock, Amount Converted | ' | ' | ' | ' | ' | ' | ' | 17,277,600 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Payments of Stock Issuance Costs | ' | $162,671 | ' | ' | ' | ' | ' | $190,744 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Temporary Equity, Description | ' CVC agreed that in connection with any director nominees to be submitted to holders of the Company's common stock for election at a stockholders' meeting, a committee of our Board comprised solely of directors then serving on the Board who were not elected or appointed by holders of Series B Preferred Stock, acting by majority vote, would have the right to designate all of the Board's nominees for director to be elected by holders of the Company's Common Stock. | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common Stock, Shares Authorized (in Shares) | ' | 100,000,000 | 100,000,000 | 300,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share Price (in Dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.06 | ' |
Common Stock, Shares, Outstanding (in Shares) | ' | 91,913,217 | 23,400,808 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 15,500,000 | ' | ' |
Note_9_Series_B_Convertible_Pr3
Note 9 - Series B Convertible Preferred Stock and Stockholders' Equity (Deficit) (Details) - Series B Preferred Stock Activity (USD $) | 3 Months Ended | 9 Months Ended | 0 Months Ended | 6 Months Ended | ||||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Jul. 12, 2013 | Jul. 12, 2013 | Jul. 12, 2013 | Jun. 30, 2013 | Sep. 30, 2013 | Jul. 30, 2010 | |
Per Original Redemption Value [Member] | Before Redemption [Member] | Series B Convertible Preferred Stock [Member] | Series B Convertible Preferred Stock [Member] | Series B Convertible Preferred Stock [Member] | Series B Convertible Preferred Stock [Member] | |||||
Series B Convertible Preferred Stock [Member] | Series B Convertible Preferred Stock [Member] | |||||||||
Temporary Equity [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Series B Preferred Stock Balance | ' | ' | ' | ' | $25,893,686 | $18,800,000 | $25,777,657 | $23,979,216 | $0 | $15,803,513 |
Series B Preferred Stock Redemption on July 12, 2013 | ' | ' | -18,800,000 | ' | ' | ' | -18,800,000 | ' | ' | ' |
Series B Preferred Stock redemption discount | ' | ' | -7,093,686 | ' | ' | ' | -7,093,686 | ' | ' | ' |
Series B Preferred Stock liquidation preference increase | -116,029 | -857,877 | -1,914,470 | -2,408,257 | ' | ' | 116,029 | 1,798,441 | ' | ' |
Series B Preferred Stock Balance | ' | ' | ' | ' | $25,893,686 | $18,800,000 | $25,893,686 | $25,777,657 | $0 | $15,803,513 |
Note_10_StockBased_Compensatio2
Note 10 - Stock-Based Compensation (Details) (USD $) | 9 Months Ended | 0 Months Ended | 3 Months Ended | 9 Months Ended | 0 Months Ended | 38 Months Ended | 0 Months Ended | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | Jul. 30, 2010 | Jul. 30, 2010 | Nov. 08, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Jul. 30, 2013 | Jul. 12, 2013 | Jan. 30, 2013 | Jul. 30, 2012 | Jan. 30, 2012 | Aug. 30, 2011 | Sep. 30, 2013 | Jul. 30, 2010 | Aug. 30, 2010 | Jul. 30, 2010 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | |
August 30, 2011 [Member] | Vested over the Next 42 Months [Member] | Subsequent Event [Member] | Options Issued To Employees And Directors [Member] | Options Issued To Employees And Directors [Member] | Options Issued To Employees And Directors [Member] | Options Issued To Employees And Directors [Member] | Restricted Stock Units (RSUs) [Member] | Restricted Stock Units (RSUs) [Member] | Restricted Stock Units (RSUs) [Member] | Restricted Stock Units (RSUs) [Member] | Restricted Stock Units (RSUs) [Member] | Restricted Stock Units (RSUs) [Member] | Restricted Stock Units (RSUs) [Member] | Restricted Stock Units (RSUs) [Member] | Restricted Stock Units (RSUs) [Member] | Restricted Stock Units (RSUs) [Member] | Restricted Stock Units (RSUs) [Member] | The 2008 Stock Plan [Member] | The 2007 Stock Plan [Member] | ||
Restricted Stock Units (RSUs) [Member] | Restricted Stock Units (RSUs) [Member] | The 2008 Stock Plan [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Lonnie Schnell and Larry Dyne [Member] | |||||||||||
Note 10 - Stock-Based Compensation (Details) [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | ' | ' | ' | 15,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,810,000 | 2,600,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term | '10 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | ' | ' | ' | ' | 400,000 | 0 | 400,000 | 630,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized (in Dollars) | ' | ' | ' | ' | $158,409 | $95,324 | $158,409 | $95,324 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $150,114 | ' | ' |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | ' | ' | ' | ' | ' | ' | '1 year 109 days | '2 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '4 months | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,778,500 | ' | 11,557,000 | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | ' | 50.00% | 10.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '42 months | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instrument Other Than Options, Grant Date Value (in Dollars) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $2,263,384 | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other Than Options, Shares Deferred In Period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,434,200 | ' | ' | ' | ' |
Stock Issued During Period, Shares, Share-based Compensation, Net of Forfeitures | ' | ' | ' | ' | ' | ' | ' | ' | 1,155,700 | 4,745,600 | 1,500,000 | 1,500,000 | 900,000 | 600,000 | 10,401,300 | ' | ' | ' | ' | ' | ' |
Note_10_StockBased_Compensatio3
Note 10 - Stock-Based Compensation (Details) - Stock Options (Options Issued To Employees And Directors [Member], USD $) | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||
Sep. 30, 2013 | Sep. 30, 2012 | Jun. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | |
Options Issued To Employees And Directors [Member] | ' | ' | ' | ' | ' | ' |
Employees and Directors | ' | ' | ' | ' | ' | ' |
Number of Shares Outstanding | 6,234,600 | ' | 6,084,600 | 6,234,600 | ' | 6,372,100 |
Weighted Average Exercise Price Outstanding (in Dollars per share) | $0.19 | ' | $0.18 | $0.19 | ' | $0.21 |
Number of Shares - Granted | 400,000 | 0 | ' | 400,000 | 630,000 | ' |
Weighted Average Exercise Price - Granted (in Dollars per share) | $0.28 | ' | ' | ' | ' | ' |
Number of Shares - Cancelled | -250,000 | ' | -287,500 | ' | ' | ' |
Weighted Average Exercise Price - Cancelled (in Dollars per share) | $0.07 | ' | $0.87 | ' | ' | ' |
Note_10_StockBased_Compensatio4
Note 10 - Stock-Based Compensation (Details) - Summary Upon Settlement of Vested Units and Shares Remaining Under RSU Awards (Restricted Stock Units (RSUs) [Member], USD $) | 0 Months Ended | 38 Months Ended | 0 Months Ended | ||||||||||||
Jul. 30, 2013 | Jul. 12, 2013 | Jan. 30, 2013 | Jul. 30, 2012 | Jan. 30, 2012 | Aug. 30, 2011 | Sep. 30, 2013 | Jul. 30, 2013 | Jul. 12, 2013 | Jan. 30, 2013 | Jul. 30, 2012 | Jan. 30, 2012 | Aug. 30, 2011 | Jul. 30, 2010 | Sep. 30, 2013 | |
Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | |||||||||
Note 10 - Stock-Based Compensation (Details) - Summary Upon Settlement of Vested Units and Shares Remaining Under RSU Awards [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total RSUbs awarded | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 11,557,000 | ' |
Intrinsic value at the time of issuance (in Dollars per share) | ' | ' | ' | ' | ' | ' | ' | $0.25 | $0.06 | $0.04 | $0.04 | $0.05 | $0.10 | $0.20 | ' |
Common shares issued | 1,155,700 | 4,745,600 | 1,500,000 | 1,500,000 | 900,000 | 600,000 | 10,401,300 | ' | ' | ' | ' | ' | ' | ' | ' |
Shares remaining to be issued | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,155,700 |
Note_10_StockBased_Compensatio5
Note 10 - Stock-Based Compensation (Details) - Summary Of RSUbs Activity (USD $) | 3 Months Ended | 6 Months Ended | |
Sep. 30, 2013 | Jun. 30, 2013 | Dec. 31, 2012 | |
Note 10 - Stock-Based Compensation (Details) - Summary Of RSUbs Activity [Line Items] | ' | ' | ' |
Outstanding - Weighted Average Grant date value per RSU (in Dollars per share) | $0.20 | $0.20 | $0.20 |
Vested - Weighted Average Grant date value per RSU (in Dollars per share) | $0.20 | $0.20 | ' |
Common Stock Issued - Weighted Average Grant date value per RSU (in Dollars per share) | $0.20 | $0.20 | ' |
Unvested [Member] | ' | ' | ' |
Note 10 - Stock-Based Compensation (Details) - Summary Of RSUbs Activity [Line Items] | ' | ' | ' |
Outstanding - Number of RSU's | 1,155,700 | 2,311,400 | 3,467,100 |
Vested - Number of RSU's | -1,155,700 | -1,155,700 | ' |
Vested [Member] | ' | ' | ' |
Note 10 - Stock-Based Compensation (Details) - Summary Of RSUbs Activity [Line Items] | ' | ' | ' |
Outstanding - Number of RSU's | ' | 4,745,600 | 5,089,900 |
Vested - Number of RSU's | 1,155,700 | 1,155,700 | ' |
Common Stock Issued - Number of RSU's | -5,901,300 | -1,500,000 | ' |
Total [Member] | ' | ' | ' |
Note 10 - Stock-Based Compensation (Details) - Summary Of RSUbs Activity [Line Items] | ' | ' | ' |
Outstanding - Number of RSU's | 1,155,700 | 7,057,000 | 8,557,000 |
Common Stock Issued - Number of RSU's | -5,901,300 | -1,500,000 | ' |
Note_11_Income_Taxes_Details
Note 11 - Income Taxes (Details) (USD $) | 3 Months Ended | 9 Months Ended | 0 Months Ended | ||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Jul. 12, 2013 | Jul. 12, 2013 | |
Series B Convertible Preferred Stock [Member] | Common Stock [Member] | ||||||
Note 11 - Income Taxes (Details) [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Income Tax Expense (Benefit) | $228,328 | $182,417 | $482,161 | $175,685 | ' | ' | ' |
Unrecognized Tax Benefits, Reduction Resulting from Lapse of Applicable Statute of Limitations | ' | ' | 135,177 | 196,423 | ' | ' | ' |
Accrued Income Taxes, Current | 550,568 | ' | 550,568 | ' | 111,235 | ' | ' |
Income Taxes Receivable | 186,378 | ' | 186,378 | ' | 178,043 | ' | ' |
Deferred Tax Liabilities, Net, Noncurrent | $1,053,860 | ' | $1,053,860 | ' | $945,543 | ' | ' |
Preferred Stock, Redemption Date | ' | ' | ' | ' | ' | 12-Jul-13 | ' |
Stock Issued During Period, Shares, New Issues (in Shares) | ' | ' | ' | ' | ' | ' | 61,111,109 |
Note_13_Segment_Reporting_and_2
Note 13 - Segment Reporting and Geographic Information (Details) - Net Revenues and Operating Margins (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Net sales | $13,728,037 | $11,288,717 | $40,508,751 | $33,214,516 |
Cost of goods sold | 9,143,655 | 7,637,845 | 27,196,451 | 22,434,159 |
Gross profit (loss) | 4,584,382 | 3,650,872 | 13,312,300 | 10,780,357 |
Operating expenses | 3,645,357 | 3,275,640 | 10,575,799 | 9,904,593 |
Income/loss from operations | 939,025 | 375,232 | 2,736,501 | 875,764 |
Talon [Member] | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Net sales | 7,876,046 | 5,730,650 | 23,178,408 | 17,074,745 |
Cost of goods sold | 5,546,837 | 4,152,514 | 16,319,503 | 12,292,511 |
Gross profit (loss) | 2,329,209 | 1,578,136 | 6,858,905 | 4,782,234 |
Trim [Member] | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Net sales | 5,826,090 | 5,547,930 | 17,289,453 | 16,124,630 |
Cost of goods sold | 3,574,398 | 3,478,455 | 10,845,890 | 10,112,403 |
Gross profit (loss) | 2,251,692 | 2,069,475 | 6,443,563 | 6,012,227 |
Tekfit [Member] | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Net sales | 25,901 | 10,137 | 40,890 | 15,141 |
Cost of goods sold | 22,420 | 6,876 | 31,058 | 29,245 |
Gross profit (loss) | $3,481 | $3,261 | $9,832 | ($14,104) |
Note_13_Segment_Reporting_and_3
Note 13 - Segment Reporting and Geographic Information (Details) - Revenues By Delivery Locations (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Note 13 - Segment Reporting and Geographic Information (Details) - Revenues By Delivery Locations [Line Items] | ' | ' | ' | ' |
Sales - Geographic Regions | $13,728,037 | $11,288,717 | $40,508,751 | $33,214,516 |
United States [Member] | ' | ' | ' | ' |
Note 13 - Segment Reporting and Geographic Information (Details) - Revenues By Delivery Locations [Line Items] | ' | ' | ' | ' |
Sales - Geographic Regions | 1,157,394 | 1,369,612 | 3,065,152 | 3,237,883 |
China [Member] | ' | ' | ' | ' |
Note 13 - Segment Reporting and Geographic Information (Details) - Revenues By Delivery Locations [Line Items] | ' | ' | ' | ' |
Sales - Geographic Regions | 4,322,596 | 2,634,915 | 12,209,535 | 8,279,337 |
Hong Kong [Member] | ' | ' | ' | ' |
Note 13 - Segment Reporting and Geographic Information (Details) - Revenues By Delivery Locations [Line Items] | ' | ' | ' | ' |
Sales - Geographic Regions | 4,012,930 | 3,884,128 | 11,127,379 | 10,989,010 |
Other Region [Member] | ' | ' | ' | ' |
Note 13 - Segment Reporting and Geographic Information (Details) - Revenues By Delivery Locations [Line Items] | ' | ' | ' | ' |
Sales - Geographic Regions | $4,235,117 | $3,400,062 | $14,106,685 | $10,708,286 |
Note_13_Segment_Reporting_and_4
Note 13 - Segment Reporting and Geographic Information (Details) - Revenues By Long-Lived Asset Location (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' |
Long-lived Assets - Geographic Region | $4,989,961 | $5,043,713 |
United States [Member] | ' | ' |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' |
Long-lived Assets - Geographic Region | 4,547,058 | 4,551,101 |
Hong Kong [Member] | ' | ' |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' |
Long-lived Assets - Geographic Region | 358,662 | 419,268 |
China [Member] | ' | ' |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' |
Long-lived Assets - Geographic Region | $84,241 | $73,344 |
Note_14_Related_Party_Transact1
Note 14 - Related Party Transactions (Details) (USD $) | 9 Months Ended | 0 Months Ended | |||||
Sep. 30, 2013 | Dec. 31, 2012 | Jul. 12, 2013 | Jul. 12, 2013 | Jul. 12, 2013 | Jul. 12, 2013 | Jul. 12, 2013 | |
Series B Convertible Preferred Stock [Member] | Series B Convertible Preferred Stock [Member] | Series B Convertible Preferred Stock [Member] | Common Stock [Member] | Board of Directors Chairman [Member] | |||
Short-term Debt [Member] | Cash [Member] | ||||||
Note 14 - Related Party Transactions (Details) [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Preferred Stock, Redemption Date | ' | ' | ' | 12-Jul-13 | ' | ' | ' |
Stock Redeemed or Called During Period, Shares (in Shares) | ' | ' | ' | 407,160 | ' | ' | ' |
Payments for Repurchase of Redeemable Convertible Preferred Stock | $18,800,000 | ' | $5,800,000 | $18,800,000 | $13,000,000 | ' | ' |
Proceeds from Issuance of Private Placement | $5,500,000 | ' | ' | ' | ' | $5,500,000 | ' |
Stock Issued During Period, Shares, New Issues (in Shares) | ' | ' | ' | ' | ' | 61,111,109 | ' |
Sale of Stock, Price Per Share (in Dollars per share) | ' | ' | ' | ' | ' | $0.09 | ' |
Common Stock, Shares, Issued (in Shares) | 91,913,217 | 23,400,808 | ' | ' | ' | ' | 8,333,333 |
Note_15_Subsequent_Events_Deta
Note 15 - Subsequent Events (Details) | Sep. 30, 2013 | Dec. 31, 2012 | Nov. 08, 2013 | Nov. 08, 2013 | Sep. 30, 2013 |
Subsequent Event [Member] | Subsequent Event [Member] | The 2008 Stock Plan [Member] | |||
The 2008 Stock Plan [Member] | |||||
Note 15 - Subsequent Events (Details) [Line Items] | ' | ' | ' | ' | ' |
Common Stock, Shares Authorized | 100,000,000 | 100,000,000 | ' | 300,000,000 | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | ' | ' | 15,000,000 | ' | 4,810,000 |