Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2014 | Nov. 12, 2014 | |
Document and Entity Information [Abstract] | ' | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 30-Sep-14 | ' |
Entity Registrant Name | 'FOREVERGREEN WORLDWIDE CORP | ' |
Entity Central Index Key | '0001091983 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Document Fiscal Year Focus | '2014 | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Common Stock, Shares Outstanding | ' | 23,456,951 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
CURRENT ASSETS | ' | ' |
Cash and cash equivalents | $878,427 | $284,741 |
Accounts receivable, net | 694,111 | 395,058 |
Prepaid expenses and other assets | 1,328,615 | 173,957 |
Inventory | 1,382,295 | 1,071,344 |
Total Current Assets | 4,283,448 | 1,925,100 |
PROPERTY AND EQUIPMENT, net | 1,918,536 | 461,124 |
OTHER ASSETS | ' | ' |
Deposits and other assets | 280,610 | 13,582 |
Trademarks, net of amortization | 22,982 | 42,943 |
Customer base, net of amortization | 192,578 | 256,770 |
Total Other Assets | 496,170 | 313,295 |
TOTAL ASSETS | 6,698,154 | 2,699,519 |
CURRENT LIABILITIES | ' | ' |
Bank overdraft | 404,242 | 74,925 |
Accounts payable | 538,584 | 447,547 |
Accrued expenses | 4,578,139 | 3,361,309 |
Deferred Revenue | 145,463 | 405,841 |
Current note payable | ' | 100,000 |
Current portion of long-term debt | ' | 2,259 |
Total Current Liabilities | 5,666,428 | 4,391,881 |
LONG-TERM DEBT | ' | ' |
Notes payable, related parties | 922,478 | 922,478 |
Convertible notes payable, related parties | 245,000 | 245,000 |
Convertible notes payable, unrelated parties | 331,756 | 726,717 |
Notes payable | ' | 14,961 |
Total Long-Term Debt | 1,499,234 | 1,909,156 |
TOTAL LIABILITIES | 7,165,662 | 6,301,037 |
STOCKHOLDERS' DEFICIT | ' | ' |
Preferred stock; no stated par value; authorized 10,000,000 shares; no shares issued or outstanding | ' | ' |
Common stock, par value $0.001 per share; authorized 100,000,000 shares; 23,456,951 and 18,852,141 shares respectively issued and outstanding | 23,457 | 18,852 |
Additional paid-in capital | 34,184,868 | 31,667,590 |
Other comprehensive loss | -267,463 | -40,340 |
Accumulated deficit | -34,408,370 | -35,247,620 |
Total Stockholders' Deficit | -467,508 | -3,601,518 |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $6,698,154 | $2,699,519 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Condensed Consolidated Balance Sheets [Abstract] | ' | ' |
Preferred stock, no stated par value per share (in dollars per share) | ' | ' |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | ' | ' |
Preferred stock, shares outstanding | ' | ' |
Common stock, par value per share (in dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 23,456,951 | 18,852,141 |
Common stock, shares outstanding | 23,456,951 | 18,852,141 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Condensed Consolidated Statement of Operations and Comprehensive Income (Loss) [Abstract] | ' | ' | ' | ' |
REVENUES, net | $15,880,244 | $4,793,782 | $40,544,486 | $11,495,871 |
COST OF SALES, net | 3,380,458 | 1,128,497 | 8,833,971 | 3,123,066 |
GROSS PROFIT | 12,499,786 | 3,665,285 | 31,710,515 | 8,372,805 |
OPERATING EXPENSES | ' | ' | ' | ' |
Sales and marketing | 8,213,093 | 2,138,126 | 20,663,790 | 4,699,038 |
General and administrative | 3,868,313 | 1,189,873 | 9,814,735 | 3,267,692 |
Depreciation and amortization | 101,117 | 35,667 | 235,366 | 107,495 |
Total Operating Expenses | 12,182,523 | 3,363,666 | 30,713,891 | 8,074,225 |
NET OPERATING INCOME (LOSS) | 317,263 | 301,619 | 996,624 | 298,580 |
OTHER INCOME (EXPENSE) | ' | ' | ' | ' |
Interest expense | -113,101 | -195,656 | -258,359 | -405,030 |
Gain on conversion of convertible notes payable | ' | 226,230 | ' | 226,230 |
Gain on settlement of liability | ' | ' | 114,398 | ' |
Other Income (Expense) | -819 | -5,264 | -13,413 | -9,690 |
Total Other Income (Expense) | -113,920 | 25,310 | -157,374 | -188,490 |
Income (loss) from continuing operations before income tax provision | 203,343 | 326,929 | 839,250 | 110,090 |
Income Tax Benefit | ' | ' | ' | ' |
NET INCOME (LOSS) | 203,343 | 326,929 | 839,250 | 110,090 |
BASIC AND DILUTED LOSS PER COMMON SHARE | $0.01 | $0.02 | $0.04 | $0.01 |
BASIC WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING | 20,880,454 | 15,549,967 | 20,660,217 | 15,325,987 |
DILUTED WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING | 21,777,684 | 16,729,794 | 21,557,447 | 16,504,514 |
COMPREHENSIVE INCOME (LOSS) A Summary of the components of other comprehensive income (loss) for the periods ended September 30, 2014 and 2013 are as follows: | ' | ' | ' | ' |
Net Income | 203,343 | 326,929 | 839,250 | 110,090 |
Other Comprehensive Income (Loss) foreign currency translation | -210,622 | 29,888 | -227,123 | 15,164 |
Comprehensive Income (Loss) | -7,279 | 356,817 | 612,127 | 125,254 |
Other Comprehensive Income (Loss) | ($7,279) | $356,817 | $612,127 | $125,254 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 9 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ' | ' |
Net income (loss) | $839,250 | $110,090 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ' | ' |
Depreciation and amortization | 250,104 | 107,713 |
Debt discount amortization | ' | 56,551 |
Expenses paid on behalf of the Company | ' | 13,240 |
(Gain) loss on settlement of liabilities | ' | ' |
(Gain) on conversion of debt | ' | -226,230 |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable | -312,724 | -717,119 |
Deposits and other assets | -48,541 | -7,431 |
Prepaid expenses | -1,151,301 | -79,872 |
Inventory | -305,263 | -164,216 |
Accounts payable-related parties | ' | -21,636 |
Accounts payable | 8,609 | -43,215 |
Deferred revenue | -260,378 | 94,812 |
Accrued expenses | 1,420,257 | 921,953 |
Net Cash Provided by (Used in) Operating Activities | 440,013 | 44,640 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ' | ' |
Purchases of property and equipment | -1,626,545 | -207,410 |
Purchase of intangibles | -1,441 | -1,114 |
Net Cash Used in Investing Activities | -1,627,986 | -208,524 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ' | ' |
Proceeds from bank overdraft, net | 319,981 | 42,085 |
Net proceeds from banking line of credit | ' | -97,039 |
Proceeds from common stock issuance | 2,004,257 | 300,000 |
Payments on notes payable | -17,220 | ' |
Payments on convertible notes payable | -100,000 | ' |
Proceeds from convertible note payable | ' | 111,760 |
Net Cash Provided by Financing Activities | 2,207,018 | 356,806 |
Effect of Foreign Currency on Cash | -425,119 | -82,100 |
NET INCREASE (DECREASE) IN CASH | 593,926 | 110,822 |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 284,741 | 89,253 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 878,427 | 200,075 |
SUPPLEMENTAL CASH FLOW INFORMATION | ' | ' |
Cash paid for interest | 217,859 | 8,716 |
Cash paid for income taxes | ' | ' |
SUPPLEMENTAL DISCLOSURES ON NON-CASH INVESTING AND FINANCING ACTIVITIES | ' | ' |
Debt discount on convertible notes | ' | 65,000 |
Common shares issued in conversion of debt and accrued interest | $521,882 | ' |
CONDENSED_CONSOLIDATED_FINANCI
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | 9 Months Ended |
Sep. 30, 2014 | |
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS [Abstract] | ' |
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | ' |
NOTE 1 – CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | |
The accompanying consolidated financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows as of and for the period ended September 30, 2014 and for all periods presented have been made. | |
Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s December 31, 2013 audited financial statements as reported in its Form 10-K. The results of operations for the nine-month period ended September 30, 2014 are not necessarily indicative of the operating results for the full year ended December 31, 2014. |
GOING_CONCERN
GOING CONCERN | 9 Months Ended |
Sep. 30, 2014 | |
GOING CONCERN [Abstract] | ' |
GOING CONCERN | ' |
NOTE 2 – GOING CONCERN | |
The Company's financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. The Company has been operationally profitable for the past five quarters and has incurred operating income during the nine months ended September 30, 2014 of $996,624, but the Company has an accumulated deficit totaling $34,408,370. The ability of the Company to continue as a going concern is dependent on consistently having continued profitable quarters. | |
The accompanying consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2014 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ' |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' |
NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation | |
The accompanying consolidated financial statements are prepared on the basis of accounting principles generally accepted in the United States of America. | |
Principles of Consolidation | |
The consolidated balance sheets and statement of operations at September 30, 2014 include the books of ForeverGreen Worldwide Corporation (Nevada) and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in the consolidation. | |
Foreign Currency Translation | |
The Company’s functional currency is recorded in various currencies, corresponding to the various foreign subsidiaries and its reporting currency is the United States dollar. Management has adopted ASC 830-20, “Foreign Currency Matters – Foreign Currency Transactions.” All assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. For revenues and expenses, the weighted average exchange rate for the period is used. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in other comprehensive loss. | |
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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | |
Fair Value of Financial Instruments | |
The carrying amounts reported in the balance sheets for accounts receivable, accounts payable and accrued liabilities approximate fair value because of the immediate or short-term nature of these financial instruments. The carrying amounts reported for notes payable approximate fair value because the underlying instruments are at interest rates which approximate current market rates. | |
Basic and Diluted Loss Per Share | |
Basic loss per share is computed by dividing net loss by the weighted-average number of common shares outstanding during the period. Diluted loss per share is computed by dividing net loss by the weighted-average number of common shares and dilutive potential common shares outstanding during the period. Our potentially dilutive shares, which include outstanding common stock options, common stock warrants and convertible debentures, have not been included in the computation of diluted net loss per share attributable to common stockholders for all periods presented, as the results would be anti-dilutive. Such potentially dilutive shares are excluded when the effect would be to reduce net loss per share. | |
Revenue Recognition | |
Revenues and costs of revenues are recognized during the period in which the products are provided. The Company applies the provisions of FASB Accounting Standards Codification (“ASC”) 605-10, Revenue Recognition in Financial Statements ASC 605-10, which provides guidance on the recognition, presentation, and disclosure of revenue in financial statements filed with the SEC. ASC 605-10 outlines the basic criteria that must be met to recognize revenue and provides guidance for disclosure related to revenue recognition policies. In general, the Company recognizes revenue for sale of products when (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred, (iii) the fee is fixed or determinable, and (iv) collectability is reasonably assured. | |
The Company’s source of revenue is from the sale of various food and other natural products. The Company recognizes the sale upon shipment of such goods. The Company offers a 100% satisfaction guarantee against defects for 30 days after the sale of their product except for a few circumstances. The Company extends this return policy to its members for a 30 day period and the consumer has the same return policy in effect against the member. All conditions of ASC 605-10 are met and the revenue is recorded upon sale, with an estimated allowance for returns where material. | |
Inventory | |
Inventory is recorded at the lower of cost or market and valued on a first-in, first-out basis. Inventory consists primarily of consumable food products and ingredients. Food products are discarded as they reach the expiration dates because the food products are made with natural foods containing a minimum of preservatives. Non-food products are reviewed periodically to determine any obsolescence and a reserve is booked when appropriate. The products have expiration dates that range from 3 months on some of the food products to 2 years for non-food products. On September 30, 2014 and December 31, 2013, the reserve for obsolete inventory had balances in the amount of $89,050 and $5,660, respectively. This increase of allowance is due to receiving some defective inventory that the Company is trying to return to the vendor. | |
Accounts Receivable | |
Accounts receivable arise from doing business with third party distributor centers in various locations throughout South America and Korea. The accounts receivable are made up of fees owed by the distribution centers to the Company for the right to do business in our name. The Company evaluates the need for an allowance for doubtful accounts when it is determined that collection amounts owed is unlikely. No allowance has been recorded at September 30, 2014 compared to an allowance of $29,234 at December 31, 2013. | |
Members are required to pay for products prior to shipment. Members typically pay for products in cash, by wire transfer or by credit card. Accordingly, the Company seldom carries accounts receivable from members that are not distribution centers and any balances carried would be minimal. | |
Valuation of Long-lived Assets | |
In accordance with ASC 360-10, the carrying values of the Company’s long-lived assets are reviewed for impairment annually and whenever events or changes in circumstances indicate that they may not be recoverable. The Company records impairment of long-lived assets to be held and used or to be disposed of when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the carrying amount. The Company’s assessment of events and circumstances indicated that an analysis for impairment of long-lived assets as of September 30, 2014 was not needed. | |
Intangible Assets | |
Intangible assets consist of patent costs, trademark costs and the customer base. Patent costs are costs incurred to develop and file patent applications. Trademark costs are costs incurred to develop and file trademark applications. If the patents or trademarks are approved, the costs are amortized using the straight-line method over the estimated lives of 7 years for patents and 10 years for trademarks. Unsuccessful patent and trademark application costs are expensed at the time the application is denied. Management assesses the carrying values of long-lived assets for impairment when circumstances warrant such a review. In performing this assessment, management considers current market analysis of the technology and future cash flows. | |
The Company recognizes impairment losses when undiscounted cash flows estimated to be generated from long-lived assets are less than the net carrying amount of intangible assets. No impairment was recognized, accordingly, during the periods ended September 30, 2014 and 2013. | |
Reclassification of Financial Statement Accounts | |
Certain amounts in the September 30, 2013 statement of operations and December 31, 2013 balance sheet have been reclassified to conform to the presentation in the September 30, 2014 financial statements. These amounts include cost of sales, sales and marketing, and general and administrative expenses. | |
New Accounting Pronouncements | |
After evaluating the recent accounting pronouncements through the date of this filing, the Company has concluded that application of these pronouncements will have no material impact on the Company’s financial results. |
NOTES_PAYABLE
NOTES PAYABLE | 9 Months Ended | |||||||||||
Sep. 30, 2014 | ||||||||||||
NOTES PAYABLE [Abstract] | ' | |||||||||||
NOTES PAYABLE | ' | |||||||||||
NOTE 4 – NOTES PAYABLE | ||||||||||||
Long-term notes payable | ||||||||||||
Long term liabilities are detailed in the following schedules as of September 30, 2014 and December 2013: | ||||||||||||
30-Sep-14 | 31-Dec-13 | |||||||||||
Note payable to financial institution bearing interest at 7%, principle and interest due monthly, matures August, 2019, secured by equipment, on May 9, 2014 the Company paid off the note payable in full | $ -- | $17,220 | ||||||||||
Less current portion of notes payable | -- | -2,259 | ||||||||||
Net Long-Term Liabilities | $ -- | $14,961 | ||||||||||
Notes Payable as of September 30, 2014 | ||||||||||||
AMOUNT | TYPE | CONVERSION RATE PER SHARE | ORIGINATION DATE | INTEREST | DUE DATE | |||||||
RATE | ||||||||||||
$485,000 | Related party | NA | 12/9/08 | 10% | Due on demand | |||||||
$437,478 | Related party | NA | 7/31/09 | 10% | 12/31/15 | |||||||
$45,000 | Convertible, | 0.15 | 10/7/10 | 14% | 12/31/15 | |||||||
Related party | ||||||||||||
$200,000 | Convertible, | 0.2 | 1/19/11 | 14% | 12/31/15 | |||||||
Related party | ||||||||||||
$100,000 | Convertible, | 0.2 | 3/14/11 | 14% | 12/31/15 | |||||||
Non-related | ||||||||||||
$231,756 | Convertible, | 0.2 | 3/9/10 | 15% | 12/31/15 | |||||||
Non-related | ||||||||||||
$1,499,234 | Total | |||||||||||
On December 31, 2013 the Company received $100,000 cash from a non-related party to share in the expenses of recruiting new members. The amount is due as expenses are reimbursable and bears 0% interest. At September 30, 2014 $0 remained of the $100,000. | ||||||||||||
On September 30, 2014 the Company converted a convertible note of $394,962 to 1,974,810 shares of common stock with a non-related party. On September 30, 2014 the Company converted accrued interest of $126,920 for this same converted note to 630,000 of common stock with the same non-related party. |
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2014 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | ' |
COMMITMENTS AND CONTINGENCIES | ' |
NOTE 5 - COMMITMENTS AND CONTINGENCIES | |
As of December 31, 2013 the Company had recorded a $114,398 liability in accrued expenses for foreign sales tax. On June 4, 2014 this liability was settled and a gain of $114,398 was recorded in the nine months ending September 30, 2014. |
INVENTORY
INVENTORY | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
INVENTORY [Abstract] | ' | ||||
INVENTORY | ' | ||||
NOTE 6 – INVENTORY | |||||
Inventories for September 30, 2014 and December 31, 2013 were classified as follows: | |||||
September 30, | December 31, | ||||
2014 | 2013 | ||||
Raw Materials | $ | 890,162 | $ | 647,149 | |
Finished Goods | 581,183 | 429,855 | |||
Total Inventory | 1,471,345 | 1,077,004 | |||
Less Reserve for Obsolete Inventory | -89,050 | -5,660 | |||
Total Inventory (net of reserve) | $ | $1,382,295 | $ | 1,071,344 |
COMMON_STOCK
COMMON STOCK | 9 Months Ended |
Sep. 30, 2014 | |
Equity [Abstract] | ' |
COMMON STOCK | ' |
NOTE 7 – COMMON STOCK | |
On September 30, 2014 a third party creditor converted a note payable of $394,962 to 1,978,810 shares of common stock with a conversion price of $.20. On September 30, 2014 the same third party creditor converted accrued interest of $126,920 to 630,000 shares of common stock with a conversion rate of $.20. |
NEW_SUBSIDIARIES
NEW SUBSIDIARIES | 9 Months Ended |
Sep. 30, 2014 | |
New Subsidiaries [Abstract] | ' |
NEW SUBSIDIARIES | ' |
NOTE 8 – NEW SUBSIDIARIES | |
The Company has formed the following wholly-owned subsidiaries, ForeverGreen (HK) Limited in Hong Kong, FG International (India) LLP in India, and ForeverGreen Peru S.A.C. in Peru. These subsidiaries are wholly-owned by the Company. |
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2014 | |
Subsequent Events [Abstract] | ' |
SUBSEQUENT EVENTS | ' |
NOTE 9 – SUBSEQUENT EVENTS | |
The Company has evaluated subsequent events from the balance sheet date through the date the financial statements were issued and has determined that there are no such events that would have a material impact on the financial statements. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policy) | 9 Months Ended |
Sep. 30, 2014 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ' |
Basis of Presentation | ' |
Basis of Presentation | |
The accompanying consolidated financial statements are prepared on the basis of accounting principles generally accepted in the United States of America. | |
Principles of Consolidation | ' |
Principles of Consolidation | |
The consolidated balance sheets and statement of operations at September 30, 2014 include the books of ForeverGreen Worldwide Corporation (Nevada) and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in the consolidation. | |
Foreign Currency Translation | ' |
Foreign Currency Translation | |
The Company’s functional currency is recorded in various currencies, corresponding to the various foreign subsidiaries and its reporting currency is the United States dollar. Management has adopted ASC 830-20, “Foreign Currency Matters – Foreign Currency Transactions.” All assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. For revenues and expenses, the weighted average exchange rate for the period is used. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in other comprehensive loss. | |
Use of Estimates | ' |
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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | |
Fair Value of Financial Instruments | ' |
Fair Value of Financial Instruments | |
The carrying amounts reported in the balance sheets for accounts receivable, accounts payable and accrued liabilities approximate fair value because of the immediate or short-term nature of these financial instruments. The carrying amounts reported for notes payable approximate fair value because the underlying instruments are at interest rates which approximate current market rates. | |
Basic and Diluted Loss Per Share | ' |
Basic and Diluted Loss Per Share | |
Basic loss per share is computed by dividing net loss by the weighted-average number of common shares outstanding during the period. Diluted loss per share is computed by dividing net loss by the weighted-average number of common shares and dilutive potential common shares outstanding during the period. Our potentially dilutive shares, which include outstanding common stock options, common stock warrants and convertible debentures, have not been included in the computation of diluted net loss per share attributable to common stockholders for all periods presented, as the results would be anti-dilutive. Such potentially dilutive shares are excluded when the effect would be to reduce net loss per share. | |
Revenue Recognition | ' |
Revenue Recognition | |
Revenues and costs of revenues are recognized during the period in which the products are provided. The Company applies the provisions of FASB Accounting Standards Codification (“ASC”) 605-10, Revenue Recognition in Financial Statements ASC 605-10, which provides guidance on the recognition, presentation, and disclosure of revenue in financial statements filed with the SEC. ASC 605-10 outlines the basic criteria that must be met to recognize revenue and provides guidance for disclosure related to revenue recognition policies. In general, the Company recognizes revenue for sale of products when (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred, (iii) the fee is fixed or determinable, and (iv) collectability is reasonably assured. | |
The Company’s source of revenue is from the sale of various food and other natural products. The Company recognizes the sale upon shipment of such goods. The Company offers a 100% satisfaction guarantee against defects for 30 days after the sale of their product except for a few circumstances. The Company extends this return policy to its members for a 30 day period and the consumer has the same return policy in effect against the member. All conditions of ASC 605-10 are met and the revenue is recorded upon sale, with an estimated allowance for returns where material. | |
Inventory | ' |
Inventory | |
Inventory is recorded at the lower of cost or market and valued on a first-in, first-out basis. Inventory consists primarily of consumable food products and ingredients. Food products are discarded as they reach the expiration dates because the food products are made with natural foods containing a minimum of preservatives. Non-food products are reviewed periodically to determine any obsolescence and a reserve is booked when appropriate. The products have expiration dates that range from 3 months on some of the food products to 2 years for non-food products. On September 30, 2014 and December 31, 2013, the reserve for obsolete inventory had balances in the amount of $89,050 and $5,660, respectively. This increase of allowance is due to receiving some defective inventory that the Company is trying to return to the vendor. | |
Accounts Receivable | ' |
Accounts Receivable | |
Accounts receivable arise from doing business with third party distributor centers in various locations throughout South America and Korea. The accounts receivable are made up of fees owed by the distribution centers to the Company for the right to do business in our name. The Company evaluates the need for an allowance for doubtful accounts when it is determined that collection amounts owed is unlikely. No allowance has been recorded at September 30, 2014 compared to an allowance of $29,234 at December 31, 2013. | |
Members are required to pay for products prior to shipment. Members typically pay for products in cash, by wire transfer or by credit card. Accordingly, the Company seldom carries accounts receivable from members that are not distribution centers and any balances carried would be minimal. | |
Valuation of Long-lived Assets | ' |
Valuation of Long-lived Assets | |
In accordance with ASC 360-10, the carrying values of the Company’s long-lived assets are reviewed for impairment annually and whenever events or changes in circumstances indicate that they may not be recoverable. The Company records impairment of long-lived assets to be held and used or to be disposed of when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the carrying amount. The Company’s assessment of events and circumstances indicated that an analysis for impairment of long-lived assets as of September 30, 2014 was not needed. | |
Intangible Assets | ' |
Intangible Assets | |
Intangible assets consist of patent costs, trademark costs and the customer base. Patent costs are costs incurred to develop and file patent applications. Trademark costs are costs incurred to develop and file trademark applications. If the patents or trademarks are approved, the costs are amortized using the straight-line method over the estimated lives of 7 years for patents and 10 years for trademarks. Unsuccessful patent and trademark application costs are expensed at the time the application is denied. Management assesses the carrying values of long-lived assets for impairment when circumstances warrant such a review. In performing this assessment, management considers current market analysis of the technology and future cash flows. | |
The Company recognizes impairment losses when undiscounted cash flows estimated to be generated from long-lived assets are less than the net carrying amount of intangible assets. No impairment was recognized, accordingly, during the periods ended September 30, 2014 and 2013. | |
Reclassification of Financial Statement Accounts | ' |
Reclassification of Financial Statement Accounts | |
Certain amounts in the September 30, 2013 statement of operations and December 31, 2013 balance sheet have been reclassified to conform to the presentation in the September 30, 2014 financial statements. These amounts include cost of sales, sales and marketing, and general and administrative expenses. | |
New Accounting Pronouncements | ' |
New Accounting Pronouncements | |
After evaluating the recent accounting pronouncements through the date of this filing, the Company has concluded that application of these pronouncements will have no material impact on the Company’s financial results. |
NOTES_PAYABLE_Tables
NOTES PAYABLE (Tables) | 9 Months Ended | |||||||||||
Sep. 30, 2014 | ||||||||||||
NOTES PAYABLE [Abstract] | ' | |||||||||||
Schedule of Long Term Liabilities | ' | |||||||||||
30-Sep-14 | 31-Dec-13 | |||||||||||
Note payable to financial institution bearing interest at 7%, principle and interest due monthly, matures August, 2019, secured by equipment, on May 9, 2014 the Company paid off the note payable in full | $ -- | $17,220 | ||||||||||
Less current portion of notes payable | -- | (2,259) | ||||||||||
Net Long-Term Liabilities | $ -- | $14,961 | ||||||||||
Schedule of Notes Payable | ' | |||||||||||
AMOUNT | TYPE | CONVERSION RATE PER SHARE | ORIGINATION DATE | INTEREST | DUE DATE | |||||||
RATE | ||||||||||||
$485,000 | Related party | NA | 12/9/08 | 10% | Due on demand | |||||||
$437,478 | Related party | NA | 7/31/09 | 10% | 12/31/15 | |||||||
$45,000 | Convertible, | 0.15 | 10/7/10 | 14% | 12/31/15 | |||||||
Related party | ||||||||||||
$200,000 | Convertible, | 0.2 | 1/19/11 | 14% | 12/31/15 | |||||||
Related party | ||||||||||||
$100,000 | Convertible, | 0.2 | 3/14/11 | 14% | 12/31/15 | |||||||
Non-related | ||||||||||||
$231,756 | Convertible, | 0.2 | 3/9/10 | 15% | 12/31/15 | |||||||
Non-related | ||||||||||||
$1,499,234 | Total |
INVENTORY_Tables
INVENTORY (Tables) | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
INVENTORY [Abstract] | ' | ||||
Schedule of Inventories | ' | ||||
September 30, | December 31, | ||||
2014 | 2013 | ||||
Raw Materials | $ | 890,162 | $ | 647,149 | |
Finished Goods | 581,183 | 429,855 | |||
Total Inventory | 1,471,345 | 1,077,004 | |||
Less Reserve for Obsolete Inventory | -89,050 | -5,660 | |||
Total Inventory (net of reserve) | $ | $1,382,295 | $ | 1,071,344 |
GOING_CONCERN_Details
GOING CONCERN (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | |
GOING CONCERN [Abstract] | ' | ' | ' | ' | ' |
Operating income | $317,263 | $301,619 | $996,624 | $298,580 | ' |
Accumulated deficit | ($34,408,370) | ' | ($34,408,370) | ' | ($35,247,620) |
SUMMARY_OF_SIGNIFICANT_ACCOUNT2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 |
Patents | Trademarks | |||
Inventory | ' | ' | ' | ' |
Allowance for obsolete inventory | $89,050 | $5,660 | ' | ' |
Accounts Receivable | ' | ' | ' | ' |
Accounts receivable, allowance for doubtful accounts | ' | $29,234 | ' | ' |
Intangible Assets [Line Items] | ' | ' | ' | ' |
Amortization Period (Estimated Lives) | ' | ' | '7 years | '10 years |
NOTES_PAYABLE_Schedule_of_Long
NOTES PAYABLE (Schedule of Long-term Notes Payable) (Details) (USD $) | 9 Months Ended | |
Sep. 30, 2014 | Dec. 31, 2013 | |
NOTES PAYABLE [Abstract] | ' | ' |
Note payable to financial institution bearing interest at 7%, principle and interest due monthly, matures August, 2019, secured by equipment, on May 9, 2014 the Company paid off the note payable in full | ' | $17,220 |
Less current portion of notes payable | ' | -2,259 |
Net Long-Term Liabilities | ' | $14,961 |
Interest rate | 7.00% | ' |
Maturity date | 31-Aug-19 | ' |
NOTES_PAYABLE_Schedule_of_Note
NOTES PAYABLE (Schedule of Notes Payable) (Details) (USD $) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | |
Debt Instrument [Line Items] | ' | ' | ' |
Notes payable, related parties | $922,478 | ' | $922,478 |
Convertible notes payable, related parties | 245,000 | ' | 245,000 |
Convertible notes payable, unrelated parties | 331,756 | ' | 726,717 |
Total | 1,499,234 | ' | ' |
Debt conversion, price per share | $0.20 | ' | ' |
Interest rate | 7.00% | ' | ' |
Maturity date | 31-Aug-19 | ' | ' |
Expenses paid on behalf of the Company | ' | 13,240 | 100,000 |
Remaining amount of recruitment expenses | 0 | ' | ' |
Convertible note original amount converted to common stock with a non-related party | 394,962 | ' | ' |
Convertible note converted to common stock with a non-related party | 1,974,810 | ' | ' |
Accrued interest original amount converted to common stock with a non-related party | 126,920 | ' | ' |
Accrued interest converted to common stock with a non-related party | 630,000 | ' | ' |
Debt Instrument One | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Notes payable, related parties | 485,000 | ' | ' |
Origination date | 9-Dec-08 | ' | ' |
Interest rate | 10.00% | ' | ' |
Debt Instrument Two | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Notes payable, related parties | 437,478 | ' | ' |
Origination date | 31-Jul-09 | ' | ' |
Interest rate | 10.00% | ' | ' |
Maturity date | 31-Dec-15 | ' | ' |
Debt Instrument Three | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Convertible notes payable, related parties | 45,000 | ' | ' |
Debt conversion, price per share | $0.15 | ' | ' |
Origination date | 7-Oct-10 | ' | ' |
Interest rate | 14.00% | ' | ' |
Maturity date | 31-Dec-15 | ' | ' |
Debt Instrument Four | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Convertible notes payable, related parties | 200,000 | ' | ' |
Debt conversion, price per share | $0.20 | ' | ' |
Origination date | 19-Jan-11 | ' | ' |
Interest rate | 14.00% | ' | ' |
Maturity date | 31-Dec-15 | ' | ' |
Debt Instrument Five | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Convertible notes payable, unrelated parties | 100,000 | ' | ' |
Debt conversion, price per share | $0.20 | ' | ' |
Origination date | 14-Mar-11 | ' | ' |
Interest rate | 14.00% | ' | ' |
Maturity date | 31-Dec-15 | ' | ' |
Debt Instrument Six | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Convertible notes payable, unrelated parties | $231,756 | ' | ' |
Debt conversion, price per share | $0.20 | ' | ' |
Origination date | 9-Mar-10 | ' | ' |
Interest rate | 15.00% | ' | ' |
Maturity date | 31-Dec-15 | ' | ' |
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES (Details) (USD $) | 9 Months Ended | |
Sep. 30, 2014 | Dec. 31, 2013 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | ' | ' |
Accrued foreign sales tax | ' | $114,398 |
Gain on settlement of liability | $114,398 | ' |
INVENTORY_Details
INVENTORY (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
INVENTORY [Abstract] | ' | ' |
Raw Materials | $890,162 | $647,149 |
Finished Goods | 581,183 | 429,855 |
Total Inventory | 1,471,345 | 1,077,004 |
Less Reserve for Obsolete Inventory | -89,050 | -5,660 |
Total Inventory (net of reserve) | $1,382,295 | $1,071,344 |
COMMON_STOCK_Details
COMMON STOCK (Details) (USD $) | 9 Months Ended |
Sep. 30, 2014 | |
Equity [Abstract] | ' |
Convertible note original amount converted to common stock with a non-related party | $394,962 |
Convertible note converted to common stock with a non-related party | 1,974,810 |
Accrued interest original amount converted to common stock with a non-related party | 126,920 |
Accrued interest converted to common stock with a non-related party | $630,000 |
Debt conversion, price per share | $0.20 |