Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Mar. 04, 2015 | Jun. 30, 2014 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | FOREVERGREEN WORLDWIDE CORP | ||
Entity Central Index Key | 1091983 | ||
Trading Symbol | fvrg | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Current Fiscal Year End Date | -19 | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Common Stock, Shares Outstanding | 23,596,951 | ||
Entity Public Float | $15,834,266 | ||
Document Type | 10-K | ||
Document Period End Date | 31-Dec-14 | ||
Amendment Flag | FALSE | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
CURRENT ASSETS | ||
Cash and cash equivalents | $580,522 | $284,741 |
Restricted cash | 589,449 | |
Accounts receivable, net | 530,509 | 395,058 |
Member advances | 381,500 | |
Prepaid expenses and other assets | 644,189 | 173,957 |
Inventory | 2,017,263 | 1,071,344 |
Total Current Assets | 4,743,432 | 1,925,100 |
PROPERTY AND EQUIPMENT, net | 2,565,003 | 461,124 |
OTHER ASSETS | ||
Deposits and other assets | 208,795 | 13,582 |
Intangible assets | 192,403 | 299,713 |
Total Other Assets | 401,198 | 313,295 |
TOTAL ASSETS | 7,709,633 | 2,699,519 |
CURRENT LIABILITIES | ||
Bank overdraft | 93,701 | 74,925 |
Accounts payable | 1,442,349 | 447,547 |
Accrued expenses | 4,879,172 | 3,361,309 |
Deferred Revenue | 171,885 | 405,841 |
Convertible notes payable, related parties | 922,478 | |
Notes payable, related parties | 245,000 | |
Convertible notes payable, unrelated parties | 331,756 | |
Current portion of long-term debt | 2,259 | |
Total Current Liabilities | 8,086,341 | 4,291,881 |
LONG-TERM DEBT | ||
Convertible notes payable, related parties | 922,478 | |
Notes payable, related parties | 245,000 | |
Convertible notes payable, unrelated parties | 826,717 | |
Notes payable | 14,961 | |
Total Long-Term Debt | 2,009,156 | |
TOTAL LIABILITIES | 8,086,341 | 6,301,037 |
COMMITMENTS AND CONTINGENCIES | ||
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; 23,596,951 and 18,852,141 shares respectively issued and outstanding | 23,597 | 18,852 |
Additional paid-in capital | 34,263,045 | 31,597,029 |
Accumulated other comprehensive (income)/loss | -444,442 | 30,221 |
Accumulated deficit | -34,218,908 | -35,247,620 |
Total Stockholders' Deficit | -376,708 | -3,601,518 |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $7,709,633 | $2,699,519 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parentheticals) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Statement of Financial Position [Abstract] | ||
Preferred stock, no stated par value (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 (in dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 23,596,951 | 18,852,141 |
Common stock, shares outstanding | 23,596,951 | 18,852,141 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations and Comprehensive Income (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Income Statement [Abstract] | ||
TOTAL REVENUES, net | $58,341,422 | $17,757,388 |
COST OF SALES, net | 12,470,044 | 4,749,298 |
GROSS PROFIT | 45,871,378 | 13,008,090 |
OPERATING EXPENSES | ||
Sales and marketing | 29,740,084 | 7,832,057 |
General and administrative | 14,449,328 | 4,793,204 |
Total Operating Expenses | 44,189,412 | 12,625,261 |
NET OPERATING INCOME | 1,681,966 | 382,829 |
OTHER INCOME (EXPENSE) | ||
Gain on debt converted for common stock | 235,170 | |
Gain on sale of assets | 142,772 | |
Loss on settlement of litigation | -77,500 | |
Loss on settlement of claim | -149,520 | |
International expansion expense | -93,043 | |
Other expense | -98,309 | |
Interest expense | -317,966 | -473,385 |
Total Other Expense | -565,795 | -265,986 |
Income (loss) before income tax provision | 1,116,171 | 116,843 |
Income Tax Provision (Benefit) | 87,459 | |
NET INCOME | 1,028,712 | 116,843 |
BASIC AND DILUTED INCOME PER COMMON SHARE (in dollars per share) | $0.05 | $0.01 |
BASIC WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING (in shares) | 21,406,572 | 15,584,634 |
DILUTED WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING (in shares) | 22,203,756 | 16,684,609 |
COMPREHENSIVE INCOME | ||
Net Income | 1,028,712 | 116,843 |
Other Comprehensive Income/(Loss) - foreign currency translation | -474,663 | 4,456 |
Comprehensive Income | $554,049 | $121,299 |
Consolidated_Statements_of_Sto
Consolidated Statements of Stockholders' Deficit (USD $) | Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Other Comprehensive Income | Total |
Balance at Dec. 31, 2012 | $15,212 | $30,902,669 | ($35,364,463) | $25,765 | ($4,420,817) | |
Balance (in shares) at Dec. 31, 2012 | 15,212,141 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Common stock issued for cash | 600 | 299,400 | 300,000 | |||
Common stock issued for cash (in shares) | 600,000 | |||||
Common stock issued for conversion of debt | 3,040 | 304,960 | 308,000 | |||
Common stock issued for conversion of debt (in shares) | 3,040,000 | |||||
Beneficial conversion feature on notes payable | 90,000 | 90,000 | ||||
Foreign currency translation | 4,456 | 4,456 | ||||
Net income for the period | 116,843 | 116,843 | ||||
Balance at Dec. 31, 2013 | 18,852 | 31,597,029 | -35,247,620 | 30,221 | -3,601,518 | |
Balance (in shares) at Dec. 31, 2013 | 18,852,141 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Common stock issued for cash | 2,000 | 1,998,000 | 2,000,000 | |||
Common stock issued for cash (in shares) | 2,000,000 | |||||
Common stock issued for conversion of debt | 2,605 | 518,636 | 521,241 | |||
Common stock issued for conversion of debt (in shares) | 2,604,810 | |||||
Restricted Shares issued for settlement of claim | 140 | 149,380 | 149,520 | |||
Restricted Shares issued for settlement of claim (in shares) | 140,000 | |||||
Foreign currency translation | -474,663 | -474,663 | ||||
Net income for the period | 1,028,712 | 1,028,712 | ||||
Balance at Dec. 31, 2014 | $23,597 | $34,263,045 | ($34,218,908) | ($444,442) | ($376,708) | |
Balance (in shares) at Dec. 31, 2014 | 23,596,951 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $1,028,712 | $116,843 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 377,431 | 153,157 |
Debt discount amortization | 99,805 | |
(Gain) loss on settlement of liabilities | -235,170 | |
Expenses paid on behalf of the Company | 19,429 | |
Loss on settlement of claim | 149,520 | |
Changes in operating assets and liabilities: | ||
Restricted cash | -589,449 | |
Accounts receivable | -140,615 | -122,864 |
Member advances | -381,500 | |
Prepaid expenses | -452,293 | -126,556 |
Deposits and other assets | -48,700 | -45,212 |
Inventory | -945,919 | -538,995 |
Accounts payable | 949,635 | -405,288 |
Accounts payable - related parties | -54,494 | |
Deferred revenue | -233,956 | 292,756 |
Accrued expenses | 1,719,244 | 973,864 |
Net Cash Provided by Operating Activities | 1,432,110 | 127,275 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Cash paid for trademarks | -1,263 | -1,119 |
Purchases of property and equipment | -2,394,065 | -437,148 |
Net Cash Used in Investing Activities | -2,395,328 | -438,267 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from bank overdraft | 9,440 | 25,050 |
Net proceeds from banking line of credit | -97,039 | |
Payments on notes payable | -17,220 | -2,877 |
Payment of convertible note payable | -100,000 | 255,571 |
Proceeds from common stock issuance | 2,004,164 | 300,001 |
Net Cash (Used in) Provided by Financing Activities | 1,896,384 | 480,706 |
Effect of Foreign Currency on Cash | -637,385 | 25,774 |
NET INCREASE (DECREASE) IN CASH | 295,781 | 195,488 |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 284,741 | 89,253 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 580,522 | 284,741 |
SUPPLEMENTAL CASH FLOW INFORMATION | ||
Cash paid for interest | 317,966 | 135,429 |
Cash paid for income taxes | ||
NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Recording of the debt discount convertible note | 90,000 | |
Conversion of debt and accrued interest for equity | 521,882 | 543,170 |
Write off of PP&E (fully depreciated) | 58,756 | |
Common stock issued for settlement of claim | $149,520 |
ORGANIZATION_AND_SUMMARY_OF_SI
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
a. Organization | |
The Company was incorporated on March 18, 1999 in the state of Nevada. On November 30, 1999, Whole Living, Inc. acquired the assets, leases, product line and name of Brain Garden, L.L.C., a Utah limited liability company engaged in the marketing and distribution of various natural food products, oils and bath salts. The Company maintained its headquarters in Provo, Utah. | |
On November 30, 1999, the Company acquired many of the assets, lease obligations and much of the product line of Brain Garden. The acquisition was recorded using the purchase method of a business combination. Intangible assets such as member down lines, customer lists and product name identifications were recorded in the acquisition in the amount of $43,294 and were amortized over 60 months. The Company paid $283,800 for the purchase of Brain Garden assets, and assumed leases in the amount of $14,500. The Company also assumed an operating lease for office space which expired during 1999. | |
On May 24, 2000 the Company entered into an agreement to merge with Whole Living, Inc., a Nevada Corporation (WLN), which was a non-operating public company with cash of $150,000 and a note receivable of $650,000 from Whole Living, Inc. (Utah) for funds advanced in contemplation of the merger. Pursuant to the merger, WLN issued 6,000,000 shares of common stock to the shareholders of the Company for all outstanding stock of the Company. The merger was recorded as a reverse merger, with Whole Living, Inc. (Utah) being the accounting survivor. A reverse merger adjustment was made to the books of the Company to reflect the change in capital to that of WLN. No goodwill or intangible assets were recorded in the reverse acquisition. | |
In March 2002, the Company incorporated Brain Garden, LLC. as a wholly owned subsidiary. | |
On January 13, 2006 the Company entered into an agreement whereby it exchanged 1,266,667 shares of its post-reverse split common stock for a 23% interest in ForeverGreen International, LLC. a privately held company. This acquisition is accounted for on the equity method of accounting. As part of this reorganization the officers and directors of the Company resigned and officers of ForeverGreen International, LLC were appointed as officers of the Company. | |
ForeverGreen International, LLC was organized on February 19, 2003 in the state of Utah. The Company engages in the marketing and distribution of chocolate and various natural food products, oils and bath salts. In August 2005 the Company introduced FrequenSea™, a nutritional beverage which includes marine phytoplankton, which helped the Company to increase sales dramatically. ForeverGreen International, LLC does business under the name of ForeverGreen International, and maintains its headquarters in Lindon, Utah. | |
In conjunction with the January 13, 2006 acquisition the Board of Directors of the Company approved a 15:1 reverse split of its common shares, which was subsequently completed in February, 2006. | |
The companies operated under common management to distribute the products of both companies jointly as though one company. The combined operation subsequently combined their product lines and created a new unified catalog. | |
On October 15, 2006, Whole Living, Inc. entered into an agreement to purchase the remaining 77% interest of ForeverGreen International, LLC and to formally merge with Brain Garden Inc., a wholly owned subsidiary of Whole Living, Inc., to become effective December 31, 2006. They announced they would change the combined company name to ForeverGreen Worldwide Corporation. The combined company sells products in the United States, Canada, Australia, New Zealand, Singapore, Japan, United Kingdom, the Netherlands, and Germany and currently has plans to expand into other areas of the world. Whole Living, Inc. changed its name to ForeverGreen Worldwide Corporation in December 2006. | |
During the last quarter of 2007, the Company began operations in Mexico. In 2009 the Company introduced a program to make its products available to more international countries. This program is called “the NFR program” NFR means not for resale and supports customers in many countries to enjoy limited ForeverGreen products for personal use in these countries include Argentina, Austria, Barbados, Bolivia, Chile, China, Curacao Island, Colombia, Ecuador, Dominican Republic, Ghana, Greece, Guam, Hungry, Indonesia, Ireland, Israel, Ivory Coast, Italy, Kenya, Korea, Malaysia, Morocco, Pakistan, Peru, Philippines, Poland, Portugal, Puerto Rico, South Africa, Spain, Sweden, Switzerland, Taiwan, and Trinidad. | |
b. Principles of Consolidation | |
The consolidated balance sheets and statement of operations for the periods ended December 31, 2014 and 2013 include the books of ForeverGreen Worldwide Corporation (Nevada) and it’s wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in the consolidation. These wholly owned subsidiaries include ForeverGreen International, LLC, Productos Naturales Forevergreen Internacional en Mexico S.A. de C.V., FVGR Colombia S.A.S., 3-101-607360 S.A. (a Costa Rican corporation), ForeverGreen Chile SpA, Forevergreen (Aust & NZ) Pty, Ltd, ForeverGreen Singapore Pte Ltd, ForeverGreen Taiwan, ForeverGreen Japan (KK), ForeverGreen Peru SAC, ForeverGreen (HK) Limited (Hong Kong), ForeverGreen Marketing Corporation (Philippines), and FG International LLP (India). | |
c. Recognition of Revenue | |
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 sources of revenue are from the sale of various food and other natural product sales and royalties earned. 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. Returns are less than 2.5% of sales for both years presented. Revenues are reported net of returns. All conditions of ASC 605-10 are met and the revenue is recorded upon sale, with an estimated allowance for returns where material. | |
d. Accounts Receivable and Member Advances | |
In 2014 the Company’s accounting method changed for accounts receivable. The majority of accounts receivable are now sales deposits processed by third parties from the prior one to three business days that have not posted to the Company’s bank account. Other 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 and royalties 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. An allowance of $0 and $29,234 had been recorded at December 31, 2014 and 2013, respectively. | |
Members are required to pay for products prior to shipment. Members typically pay for products by credit cards, wire transfer, e-wallet accounts, other payment cards, and cash. Accordingly, the Company seldom carries accounts receivable from members that are not distribution centers and any balances carried would be minimal. In 2014, in order to increase business, the Company advanced $381,500 to new Members to assist them with building their businesses. An allowance of $0 and $0 has been recorded at December 31, 2014 and 2013, respectively for uncollectable advances. | |
e. Earnings Per Share | |
The computation of earnings per share of common stock is based on the weighted average number of shares outstanding at the date of the financial statements. Basic and diluted earnings per share is computed by dividing net income by the weighted-average number of common shares outstanding during the period. Our potentially dilutive shares, which include convertible debentures amounting to 797,184 and 1,099,975 were included as of December 31, 2014 and 2013, respectively. | |
f. Income Taxes | |
The Company provides for income taxes under ASC 740, Accounting for Income Taxes. ASC 740 requires the use of an asset and liability approach in accounting for income taxes. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect when these differences are expected to reverse. The Company’s predecessor operated as entity exempt from Federal and State income taxes. | |
g. Cash and Cash Equivalents | |
The Company considers all highly liquid investments with maturities of three months or less to be cash equivalents. | |
In 2014 the Company began using a new credit card processor to better serve our members world-wide. Due to the risk factor of member chargebacks the new processor required a reserve be created by reserving 10% of all transactions that they processed. The reserve is revolving meaning six months after the beginning of the reserve the Company will receive back the 10% collected during the first of the reserve. This will continue on a monthly basis. At December 31, 2014 the total amount of this reserve was $589,449 which is presented as restricted cash on the balance sheet. | |
h. Property and Equipment | |
Expenditures for property and equipment and for renewals and betterments, which extend the originally estimated economic life of assets or convert the assets to a new use, are capitalized at cost. Expenditures for maintenance, repairs and other renewals of items are charged to expense. When items are disposed of, the cost and accumulated depreciation are eliminated from the accounts, and any gain or loss is included in the results of operations. | |
Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. Depreciable asset lives range from 3 to 7 years with leasehold improvements being depreciated over the lesser of the term of the lease or the life of the improvements. Depreciation expense for the period ended December 31, 2014 and 2013 is $284,694 and $62,325, respectively. | |
i. Long-Lived Assets | |
In accordance with ASC 360-10, 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 determined no impairment adjustment was needed based on the analysis for the years ended December 31, 2014 and 2013. | |
j. 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 December 31, 2014 and 2013 there was an allowance for obsolete inventory in the amount of $40,000 and $5,660, respectively. | |
k. Fair Value of Financial Instruments | |
The carrying amounts reported in the balance sheets for the cash and cash equivalents, receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of fair value because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The carrying value of convertible notes payable approximates fair value because negotiated terms and conditions are consistent with current market rates as of December 31, 2014 and 2013. | |
l. Use of Estimates | |
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make assumptions that affect the amounts reported in the financial statements and accompanying notes. In these financial statements, assets, liabilities and earnings involve extensive reliance on management’s estimates. Actual results could differ from those estimates. | |
m. Concentrations | |
Financial instruments that potentially subject the Company to concentrations of credit risks consist of cash and cash equivalents. The Company places its cash and cash equivalents at well-known, quality financial institutions. At times, such cash and investments may be in excess of the FDIC insurance limit. The accounts are insured by the Federal Deposit Insurance Corporation up to $250,000 each. The amounts held for the Company regularly exceed that amount. | |
The Company has an agreement with one vendor that supplies 100% of a significant ingredient that is included in several top selling products. It could decrease sales significantly if that vendor were to discontinue the supply of this ingredient. There are other providers of that ingredient in the world, however, the Company considers this provider to have the very best quality, which is nutritionally superior to other sources of this ingredient, and has no intention of obtaining it from any other provider. | |
o. 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. The Customer base is amortized over 10 years. 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 years ended December 31, 2014 and 2013. | |
p. Deferred Revenue | |
The Company recognizes revenues upon the shipment of product. As of December 31, 2014, the Company had received payment of $171,885 for sales which were not shipped as of the period end and as such recorded deferred revenue of $171,885 compared to $405,841 for December 31, 2013. | |
q. 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. | |
r. Recent Accounting Pronouncements | |
The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations. | |
In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). The new revenue recognition standard provides a five-step analysis of transactions to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This ASU is effective for annual periods beginning after December 15, 2016 and shall be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. The Company is evaluating the potential impact of this adoption on its consolidated financial statements. | |
In August 2014, the Financial Accounting Standards Board, or FASB issued Accounting Standards Updated, or ASU No. 2014-15, Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, which defines management’s responsibility to assess an entity’s ability to continue as a going concern, and to provide related footnote disclosures if there is substantial doubt about its ability to continue as a going concern. The pronouncement is effective for annual reporting periods ending after December 15, 2016 with early adoption permitted. The adoption of this guidance is not expected to have a material impact on the Company’s financial statements. | |
s. Advertising | |
Advertising cost are expensed as incurred and are presented as part of the general and administrative expense. Advertising expense totaled $84,843 in 2014 compared to $18,728 in 2013. | |
t. Shipping and Handling | |
The Company’s shipping and handling costs are included in the cost of sales for all periods presented. Shipping and handling revenues are included in total revenues, net for all periods presented. | |
u. Sales and Marketing | |
Selling and marketing expenses include sales commissions paid to our members, special incentives, costs for incentive trips and other rewards incentives. |
RESTRICTED_CASH
RESTRICTED CASH | 12 Months Ended |
Dec. 31, 2014 | |
Restricted Cash and Investments, Current [Abstract] | |
RESTRICTED CASH | NOTE 2 – RESTRICTED CASH |
In 2014 the Company implemented a new credit card processor option to better serve our members world-wide. Due to the risk factor of member chargebacks, the new processor required that a 10% reserve of all processed transactions be held. This is a six month revolving reserve until the contract is terminated. At December 31, 2014 the total amount of this reserve was $589,449. |
PROPERTY_AND_EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended | |||
Dec. 31, 2014 | ||||
PROPERTY AND EQUIPMENT [Abstract] | ||||
PROPERTY AND EQUIPMENT | NOTE 3 – PROPERTY AND EQUIPMENT | |||
Depreciation is computed using the straight-line method and is recognized over the estimated lives of the property and equipment. Depreciation expense was $284,694 and $62,325 for the years ended December 31, 2014 and 2013, respectively. | ||||
Property and equipment consists of the following at December 31, 2014 and 2013: | ||||
2014 | 2013 | |||
Leasehold improvements | $ 571,639 | $ 57,846 | ||
Office furniture & fixtures | 761,557 | 179,478 | ||
Equipment | 597,362 | 458,414 | ||
Vehicles | 72,154 | 56,548 | ||
Computer equipment | 929,284 | 653,520 | ||
Computer software | 1,780,508 | 912,455 | ||
Total Fixed Assets | 4,712,504 | 2,318,261 | ||
Accumulated depreciation | -2,147,501 | (1,857,137) | ||
Property and equipment, net | $ 2,565,003 | $ 461,124 | ||
ACCRUED_EXPENSES
ACCRUED EXPENSES | 12 Months Ended | |||
Dec. 31, 2014 | ||||
ACCRUED EXPENSES [Abstract] | ||||
ACCRUED EXPENSES | NOTE 4 – ACCRUED EXPENSES | |||
Accrued expenses consist of the following at December 31, 2014 and 2013: | ||||
2014 | 2013 | |||
Accrued employee benefits | $ 185,111 | $ 115,172 | ||
Accrued taxes | 925,853 | 2,215,648 | ||
Accrued member commissions | 2,748,565 | 727,624 | ||
Other accrued liabilities | 1,019,643 | 302,865 | ||
Total | $4,879,172 | $ 3,361,309 |
NOTES_PAYABLE
NOTES PAYABLE | 12 Months Ended | |||||
Dec. 31, 2014 | ||||||
NOTES PAYABLE [Abstract] | ||||||
NOTES PAYABLE | NOTE 5 – NOTES PAYABLE | |||||
Long-term liabilities are detailed in the following schedules as of December 31, 2014 and 2014: | ||||||
2014 | 2013 | |||||
Convertible notes payable, related parties | $ 922,478 | $ 922,478 | ||||
Notes payable, related parties | 245,000 | 245,000 | ||||
Notes payable, unrelated parties | 331,756 | 826,717 | ||||
Note payable to financial institution bearing interest at 7%, principle and interest due monthly, matures August, 2019, secured by equipment | -- | 17,220 | ||||
Less current portion of Notes Payable | -1,499,234 | (2,259) | ||||
Net Long-Term Liabilities | $ -- | $ 2,009,156 | ||||
2014 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, Related party | 0.15 | 10/7/10 | 14% | 12/31/15 | |
$200,000 | Convertible, Related party | 0.2 | 1/19/11 | 14% | 12/31/15 | |
$100,000 | Convertible, Non-related | 0.2 | 3/14/11 | 14% | 12/31/15 | |
$231,756 | Convertible, Non-related | 0.2 | 3/9/10 | 15% | 12/31/15 |
COMMON_STOCK
COMMON STOCK | 12 Months Ended |
Dec. 31, 2014 | |
COMMON STOCK [Abstract] | |
COMMON STOCK | NOTE 6 – COMMON STOCK |
On January 29, 2014 1,000,000 shares of stock were purchased by a non-related party at $1.00 per share. | |
On January 30, 2014 1,000,000 shares of stock were purchased by a non-related party at $1.00 per share. | |
On September 30, 2014 a non-related party converted a note payable in the amount of $394,962 in principle and $126,962 in accrued interest to common stock. It was converted at $.20 per share for 2,604,810 shares. | |
On September 15, 2014 an executive of the Company was issued 140,000 shares of restricted common stock at $1.07 to settle a prior year claim which has been recorded as a loss on settlement of claim in the statement of operations. |
OPERATING_LEASES
OPERATING LEASES | 12 Months Ended | |||
Dec. 31, 2014 | ||||
OPERATING LEASES [Abstract] | ||||
OPERATING LEASES | NOTE 7 – OPERATING LEASES | |||
The Company has operating leases as follows: | ||||
Country | Start Date | End Date | Monthly Payments | |
Ecuador Office | 2/24/14 | 2/24/16 | $ 672 | |
Ecuador Warehouse | 2/24/14 | 2/24/16 | $ 122 | |
Chile Office | Month to Month | $ 679 | ||
Chile Warehouse | Month to Month | $ 114 | ||
Colombia Office | 7/15/13 | 7/15/15 | $ 914 | |
Costa Rica Office | 6/1/12 | 5/31/15 | $1,900 | |
Mexico Office | Month to Month | $1,805 | ||
Peru Office | 8/1/14 | 7/31/15 | $ 700 | |
Japan Office | 10/1/14 | 9/30/16 | $2,104 | |
Singapore Office | 9/1/14 | 2/28/15 | $3,553 | |
Hong Kong Office | 8/15/14 | 8/14/17 | $12,466 | |
Taiwan Office | 11/29/14 | 11/28/15 | $ 1,188 | |
India Office | 8/12/14 | 7/31/23 | $ 4,574 | |
US Headquarters | 3/1/14 | 2/28/19 | $36,467 | |
US Office | Month to Month | $ 8,750 | ||
US Warehouse | 1/1/13 | 12/31/20 | $ 6,936 | |
Total Lease Commitments: | ||||
2015 | $ 905,188 | |||
2016 | 767,315 | |||
2017 | 700,332 | |||
2018 | 628,829 | |||
2019 | 221,894 | |||
2020 | 146,923 | |||
Total | $3,370,481 | |||
INTANGIBLE_ASSETS
INTANGIBLE ASSETS | 12 Months Ended | |||
Dec. 31, 2014 | ||||
INTANGIBLE ASSETS [Abstract] | ||||
INTANGIBLE ASSETS | NOTE 8 – INTANGIBLE ASSETS | |||
Intangible assets consist of the following at December 31, 2014 and 2013. | ||||
2014 | 2013 | |||
Customer Base | $ 855,900 | $ 855,900 | ||
Trademarks | 70,354 | 85,320 | ||
Less accumulated amortization | -733,851 | (641,507) | ||
Net intangible assets | $ 192,403 | $ 299,713 | ||
Trademark, patent and customer based amortization expense for the years ended December 31, 2014 and 2013 were $92,625 and $92,559, respectively. The estimated amortization for the next five years is as follows: | ||||
2015 $92,600 | ||||
2016 $92,600 | ||||
2017 $ 7,500 | ||||
2018 $ 7,500 | ||||
2019 $ 7,500 |
INVENTORIES
INVENTORIES | 12 Months Ended | |||
Dec. 31, 2014 | ||||
INVENTORY [Abstract] | ||||
INVENTORIES | NOTE 9 – INVENTORIES | |||
Inventories for December 31, 2014 and 2013 were classified as follows: | ||||
2014 | 2013 | |||
Raw Materials | $ 1,271,915 | $ 647,149 | ||
Finished Goods | 785,348 | 429,855 | ||
Total Inventory | 2,057,263 | 1,077,004 | ||
Less Reserve | -40,000 | (5,660) | ||
Total Inventory (net of reserve) | $ 2,017,263 | $ 1,071,344 | ||
PROVISION_FOR_INCOME_TAXES
PROVISION FOR INCOME TAXES | 12 Months Ended | |||
Dec. 31, 2014 | ||||
PROVISION FOR INCOME TAXES [Abstract] | ||||
PROVISION FOR INCOME TAXES | NOTE 10 – PROVISION FOR INCOME TAXES | |||
The Company provides for income taxes under ASC 740, Accounting for Income Taxes. ASC 740 requires the use of an asset and liability approach in accounting for income taxes. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect when these differences are expected to reverse. The Company’s predecessor operated as entity exempt from Federal and State income taxes. | ||||
ASC 740 requires the reduction of deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The provision for income taxes differs from the amounts which would be provided by applying the statutory federal income tax rate of 34% to the net loss before provision for income taxes for the following reasons: | ||||
For the Years Ended | ||||
December 31, | ||||
2014 | 2013 | |||
Income tax calculated at the | ||||
federal statutory rate | $ 377,425 | $ 43,582 | ||
Permanent items | 956,370 | -- | ||
Foreign rate differential | -32,013 | -- | ||
Foreign tax credits | -48,073 | -- | ||
Inventory reserve | -- | 2,111 | ||
State tax (benefit) expense | 196,052 | 3,506 | ||
Other | -- | (34,525) | ||
Employee expenses | -- | (513) | ||
Change in valuation allowance | -1,362,302 | (14,161) | ||
Total provision for income taxes | $ 87,459 | $ -- | ||
Net deferred tax assets consist of the following components as of: | ||||
December 31, | ||||
2014 | 2013 | |||
Net operating loss carryforwards | $ 6,895,359 | $ 8,936,129 | ||
Accrued commissions | 788,690 | -- | ||
US federal credits | 107,891 | -- | ||
Charitable donations | 19,552 | 136 | ||
Inventory reserve | 89,212 | 66,287 | ||
Allowance for doubtful accounts | -- | 15,753 | ||
Employee accruals | 66,442 | 44,898 | ||
Depreciation and amortization | -444,029 | -177,783 | ||
Valuation allowance | (7,523,117) | -8,885,420 | ||
Net deferred taxes | $ -- | $ -- | ||
During the year, the Company made certain return-to-provision adjustments to its deferred tax balances of approximately $1.6 million mostly related to U.S. federal and state net operating losses. These adjustments were entirely offset by the Company’s valuation allowance, which resulted in no impact to income tax expense. | ||||
The Company assesses the need for a valuation allowance against its deferred income tax assets at December 31, 2014. Factors considered in this assessment include recent and expected future earnings and the Company’s liquidity and equity positions. As of December 31, 2014 and 2013, the Company has determined that a valuation allowance is necessary against the entire amount of its net deferred income tax asset. | ||||
As of December 31, 2014, the Company has U.S. federal and state net operating loss carry forwards of $17,689,114 and 17,471,893, respectively. These carry forwards are available to offset future taxable income, if any, and begin to expire in 2019. The utilization of the net operating loss carry forwards is dependent upon the tax laws in effect at the time the net operating loss carry forwards can be utilized and may be significantly limited based on ownership changes within the meaning of section 382 of the Internal Revenue Code. | ||||
Under FASB ASC 740-10-05-6, tax benefits are recognized only for the tax positions that are more likely than not be sustained upon examination by tax authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely to be realized upon ultimate settlement. Unrecognized tax benefits are tax benefits claimed in the company's tax return that do not meet these recognition and measurement standards. | ||||
The Company had no liabilities for unrecognized tax benefits and the Company has recorded no additional interest or penalties. | ||||
The Company's policy is to recognize potential interest and penalties accrued related to unrecognized tax benefits with the income tax expense. For the years ended December 31, 2014, and 2013, the Company did not recognized any interest or penalties in its Statement of Operations, nor did it have any accrued interest or penalties relating to unrecognized benefits. | ||||
The tax years 2014, 2013, 2012, 2011, 2010, and 2009 remain open to examination for federal income tax purposes and by other major taxing jurisdictions to which the Company is subject. |
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2014 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 11 – COMMITMENTS AND CONTINGENCIES |
The Company has evaluated commitments and contingencies from the balance sheet date through the date the financial statements were issued and has determined that there are no such commitments and contingencies that would be a material impact on the financial statements. |
EMPLOYEE_BENEFIT_PLAN
EMPLOYEE BENEFIT PLAN | 12 Months Ended |
Dec. 31, 2014 | |
Disclosure Text Block Supplement [Abstract] | |
EMPLOYEE BENEFIT PLAN | NOTE 12 – EMPLOYEE BENEFIT PLAN |
The Company sponsors an employee benefit plan under Section 401(k) of the Internal Revenue Code. This plan covers employees who are at least 21 years of age and have met a six-month service requirement. The Company makes a matching contribution equal to 100 percent of the first two percent of a participant's compensation that is contributed by the participant, and 50 percent of that deferral that exceeds two percent of the participant's compensation, not to exceed six percent of the participant's compensation, subject to the limits of ERISA. In addition, the Company may make a discretionary contribution based on earnings. The Company's matching contributions vest equally over a four year service period. Contributions made by the Company to the plan in the United States for the years ended 2014 and 2013 were $104,805 and $0 respectively. |
RECLASSIFACTION_OF_FINANCIAL_S
RECLASSIFACTION OF FINANCIAL STATEMENT ACCOUNTS | 12 Months Ended |
Dec. 31, 2014 | |
Reclassification Of Financial Statement Accounts [Abstract] | |
RECLASSIFACTION OF FINANCIAL STATEMENT ACCOUNTS | NOTE 13 – RECLASSIFACTION OF FINANCIAL STATEMENT ACCOUNTS |
The Company has reclassified $70,561from accumulated other comprehensive income to additional paid in capital (APIC) in December 31, 2013 balance sheet and statement of stockholders equity to conform to the 2014 presentation due to the elimination of intercompany APIC. |
CONCENTRATION_OF_RISK
CONCENTRATION OF RISK | 12 Months Ended |
Dec. 31, 2014 | |
CONCENTRATION OF RISK [Abstract] | |
CONCENTRATION OF RISK | NOTE 14 – CONCENTRATION OF RISK |
The Company purchased two significant products from two separate independent suppliers during the years ended December 31, 2014 and 2013. These materials are significant in several of our top selling products. If our vendors were to discontinue supplying those materials, it could decrease sales significantly. The Company recognizes there are other providers, but consider these suppliers to have the very best quality. |
ORGANIZATION_AND_SUMMARY_OF_SI1
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principles of Consolidation | b. Principles of Consolidation |
The consolidated balance sheets and statement of operations for the periods ended December 31, 2014 and 2013 include the books of ForeverGreen Worldwide Corporation (Nevada) and it’s wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in the consolidation. These wholly owned subsidiaries include ForeverGreen International, LLC, Productos Naturales Forevergreen Internacional en Mexico S.A. de C.V., FVGR Colombia S.A.S., 3-101-607360 S.A. (a Costa Rican corporation), ForeverGreen Chile SpA, Forevergreen (Aust & NZ) Pty, Ltd, ForeverGreen Singapore Pte Ltd, ForeverGreen Taiwan, ForeverGreen Japan (KK), ForeverGreen Peru SAC, ForeverGreen (HK) Limited (Hong Kong), ForeverGreen Marketing Corporation (Philippines), and FG International LLP (India). | |
Recognition of Revenue | c. Recognition of Revenue |
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 sources of revenue are from the sale of various food and other natural product sales and royalties earned. 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. Returns are less than 2.5% of sales for both years presented. Revenues are reported net of returns. All conditions of ASC 605-10 are met and the revenue is recorded upon sale, with an estimated allowance for returns where material. | |
Accounts Receivable and Member Advances | d. Accounts Receivable and Member Advances |
In 2014 the Company’s accounting method changed for accounts receivable. The majority of accounts receivable are now sales deposits processed by third parties from the prior one to three business days that have not posted to the Company’s bank account. Other 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 and | |
royalties 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. An allowance of $0 and $29,234 had been recorded at December 31, 2014 and 2013, respectively. | |
Members are required to pay for products prior to shipment. Members typically pay for products by credit cards, wire transfer, e-wallet accounts, other payment cards, and cash. Accordingly, the Company seldom carries accounts receivable from members that are not distribution centers and any balances carried would be minimal. In 2014, in order to increase business, the Company advanced $381,500 to new Members to assist them with building their businesses. An allowance of $0 and $0 has been recorded at December 31, 2014 and 2013, respectively for uncollectable advances. | |
Earnings Per Share | e. Earnings Per Share |
The computation of earnings per share of common stock is based on the weighted average number of shares outstanding at the date of the financial statements. Basic and diluted earnings per share is computed by dividing net income by the weighted-average number of common shares outstanding during the period. Our potentially dilutive shares, which include convertible debentures amounting to 797,184 and 1,099,975 were included as of December 31, 2014 and 2013, respectively. | |
Income Taxes | f. Income Taxes |
The Company provides for income taxes under ASC 740, Accounting for Income Taxes. ASC 740 requires the use of an asset and liability approach in accounting for income taxes. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect when these differences are expected to reverse. The Company’s predecessor operated as entity exempt from Federal and State income taxes. | |
Cash and Cash Equivalents | g. Cash and Cash Equivalents |
The Company considers all highly liquid investments with maturities of three months or less to be cash equivalents. | |
In 2014 the Company began using a new credit card processor to better serve our members world-wide. Due to the risk factor of member chargebacks the new processor required a reserve be created by reserving 10% of all transactions that they processed. The reserve is revolving meaning six months after the beginning of the reserve the Company will receive back the 10% collected during the first of the reserve. This will continue on a monthly basis. At December 31, 2014 the total amount of this reserve was $589,449 which is presented as restricted cash on the balance sheet. | |
Property and Equipment | h. Property and Equipment |
Expenditures for property and equipment and for renewals and betterments, which extend the originally estimated economic life of assets or convert the assets to a new use, are capitalized at cost. Expenditures for maintenance, repairs and other renewals of items are charged to expense. When items are disposed of, the cost and accumulated depreciation are eliminated from the accounts, and any gain or loss is included in the results of operations. | |
Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. Depreciable asset lives range from 3 to 7 years with leasehold improvements being depreciated over the lesser of the term of the lease or the life of the improvements. Depreciation expense for the period ended December 31, 2014 and 2013 is $284,694 and $62,325, respectively. | |
Long-Lived Assets | i. Long-Lived Assets |
In accordance with ASC 360-10, 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 determined no impairment adjustment was needed based on the analysis for the years ended December 31, 2014 and 2013. | |
Inventory | j. 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 December 31, 2014 and 2013 there was an allowance for obsolete inventory in the amount of $40,000 and $5,660, respectively. | |
Fair Value of Financial Instruments | k. Fair Value of Financial Instruments |
The carrying amounts reported in the balance sheets for the cash and cash equivalents, receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of fair value because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The carrying value of convertible notes payable approximates fair value because negotiated terms and conditions are consistent with current market rates as of December 31, 2014 and 2013. | |
Use of Estimates | l. Use of Estimates |
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make assumptions that affect the amounts reported in the financial statements and accompanying notes. In these financial statements, assets, liabilities and earnings involve extensive reliance on management’s estimates. Actual results could differ from those estimates. | |
Concentrations | m. Concentrations |
Financial instruments that potentially subject the Company to concentrations of credit risks consist of cash and cash equivalents. The Company places its cash and cash equivalents at well-known, quality financial institutions. At times, such cash and investments may be in excess of the FDIC insurance limit. The accounts are insured by the | |
Federal Deposit Insurance Corporation up to $250,000 each. The amounts held for the Company regularly exceed that amount. | |
The Company has an agreement with one vendor that supplies 100% of a significant ingredient that is included in several top selling products. It could decrease sales significantly if that vendor were to discontinue the supply of this ingredient. There are other providers of that ingredient in the world, however, the Company considers this provider to have the very best quality, which is nutritionally superior to other sources of this ingredient, and has no intention of obtaining it from any other provider. | |
Intangible Assets | o. 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. The Customer base is amortized over 10 years. 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 years ended December 31, 2014 and 2013. | |
Deferred Revenue | p. Deferred Revenue |
The Company recognizes revenues upon the shipment of product. As of December 31, 2014, the Company had received payment of $171,885 for sales which were not shipped as of the period end and as such recorded deferred revenue of $171,885 compared to $405,841 for December 31, 2013. | |
Foreign Currency Translation | q. 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. | |
Recent Accounting Pronouncements | r. Recent Accounting Pronouncements |
The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations. | |
In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). The new revenue recognition standard provides a five-step analysis of transactions to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This ASU is effective for annual periods beginning after December 15, 2016 and shall be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. The Company is evaluating the potential impact of this adoption on its consolidated financial statements. | |
In August 2014, the Financial Accounting Standards Board, or FASB issued Accounting Standards Updated, or ASU No. 2014-15, Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, which defines management’s responsibility to assess an entity’s ability to continue as a going concern, and to provide related footnote disclosures if there is substantial doubt about its ability to continue as a going concern. The pronouncement is effective for annual reporting periods ending after December 15, 2016 with early adoption permitted. The adoption of this guidance is not expected to have a material impact on the Company’s financial statements. | |
Advertising | s. Advertising |
Advertising cost are expensed as incurred and are presented as part of the general and administrative expense. Advertising expense totaled $84,843 in 2014 compared to $18,728 in 2013. | |
Shipping and Handling | t. Shipping and Handling |
The Company’s shipping and handling costs are included in the cost of sales for all periods presented. Shipping and handling revenues are included in total revenues, net for all periods presented. | |
Sales and Marketing | u. Sales and Marketing |
Selling and marketing expenses include sales commissions paid to our members, special incentives, costs for incentive trips and other rewards incentives. |
PROPERTY_AND_EQUIPMENT_Tables
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended | |||
Dec. 31, 2014 | ||||
PROPERTY AND EQUIPMENT [Abstract] | ||||
Schedule of property and equipment | ||||
2014 | 2013 | |||
Leasehold improvements | $ 571,639 | $ 57,846 | ||
Office furniture & fixtures | 761,557 | 179,478 | ||
Equipment | 597,362 | 458,414 | ||
Vehicles | 72,154 | 56,548 | ||
Computer equipment | 929,284 | 653,520 | ||
Computer software | 1,780,508 | 912,455 | ||
Total Fixed Assets | 4,712,504 | 2,318,261 | ||
Accumulated depreciation | -2,147,501 | (1,857,137) | ||
Property and equipment, net | $ 2,565,003 | $ 461,124 | ||
ACCRUED_EXPENSES_Tables
ACCRUED EXPENSES (Tables) | 12 Months Ended | |||
Dec. 31, 2014 | ||||
ACCRUED EXPENSES [Abstract] | ||||
Schedule of accrued expenses | ||||
2014 | 2013 | |||
Accrued employee benefits | $ 185,111 | $ 115,172 | ||
Accrued taxes | 925,853 | 2,215,648 | ||
Accrued member commissions | 2,748,565 | 727,624 | ||
Other accrued liabilities | 1,019,643 | 302,865 | ||
Total | $4,879,172 | $ 3,361,309 | ||
NOTES_PAYABLE_Tables
NOTES PAYABLE (Tables) | 12 Months Ended | |||||
Dec. 31, 2014 | ||||||
NOTES PAYABLE [Abstract] | ||||||
Schedule of long-term liabilities | ||||||
2014 | 2013 | |||||
Convertible notes payable, related parties | $ 922,478 | $ 922,478 | ||||
Notes payable, related parties | 245,000 | 245,000 | ||||
Notes payable, unrelated parties | 331,756 | 826,717 | ||||
Note payable to financial institution bearing interest at 7%, principle and interest due monthly, matures August, 2019, secured by equipment | -- | 17,220 | ||||
Less current portion of Notes Payable | -1,499,234 | (2,259) | ||||
Net Long-Term Liabilities | $ -- | $ 2,009,156 | ||||
Schedule of notes payable | ||||||
2014 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, Related party | 0.15 | 10/7/10 | 14% | 12/31/15 | |
$200,000 | Convertible, Related party | 0.2 | 1/19/11 | 14% | 12/31/15 | |
$100,000 | Convertible, Non-related | 0.2 | 3/14/11 | 14% | 12/31/15 | |
$231,756 | Convertible, Non-related | 0.2 | 3/9/10 | 15% | 12/31/15 |
OPERATING_LEASES_Tables
OPERATING LEASES (Tables) | 12 Months Ended | |||
Dec. 31, 2014 | ||||
OPERATING LEASES [Abstract] | ||||
Schedule of operating leases | ||||
Country | Start Date | End Date | Monthly Payments | |
Ecuador Office | 2/24/14 | 2/24/16 | $ 672 | |
Ecuador Warehouse | 2/24/14 | 2/24/16 | $ 122 | |
Chile Office | Month to Month | $ 679 | ||
Chile Warehouse | Month to Month | $ 114 | ||
Colombia Office | 7/15/13 | 7/15/15 | $ 914 | |
Costa Rica Office | 6/1/12 | 5/31/15 | $1,900 | |
Mexico Office | Month to Month | $1,805 | ||
Peru Office | 8/1/14 | 7/31/15 | $ 700 | |
Japan Office | 10/1/14 | 9/30/16 | $2,104 | |
Singapore Office | 9/1/14 | 2/28/15 | $3,553 | |
Hong Kong Office | 8/15/14 | 8/14/17 | $12,466 | |
Taiwan Office | 11/29/14 | 11/28/15 | $ 1,188 | |
India Office | 8/12/14 | 7/31/23 | $ 4,574 | |
US Headquarters | 3/1/14 | 2/28/19 | $36,467 | |
US Office | Month to Month | $ 8,750 | ||
US Warehouse | 1/1/13 | 12/31/20 | $ 6,936 | |
Schedule of total lease commitments | ||||
2015 | $ 905,188 | |||
2016 | 767,315 | |||
2017 | 700,332 | |||
2018 | 628,829 | |||
2019 | 221,894 | |||
2020 | 146,923 | |||
Total | $3,370,481 | |||
INTANGIBLE_ASSETS_Tables
INTANGIBLE ASSETS (Tables) | 12 Months Ended | |||
Dec. 31, 2014 | ||||
INTANGIBLE ASSETS [Abstract] | ||||
Schedule of intangible assets | ||||
2014 | 2013 | |||
Customer Base | $ 855,900 | $ 855,900 | ||
Trademarks | 70,354 | 85,320 | ||
Less accumulated amortization | -733,851 | (641,507) | ||
Net intangible assets | $ 192,403 | $ 299,713 | ||
Schedule of estimated amortization | 2015 $92,600 | |||
2016 $92,600 | ||||
2017 $ 7,500 | ||||
2018 $ 7,500 | ||||
2019 $ 7,500 |
INVENTORIES_Tables
INVENTORIES (Tables) | 12 Months Ended | |||
Dec. 31, 2014 | ||||
INVENTORY [Abstract] | ||||
Schedule of inventories | ||||
2014 | 2013 | |||
Raw Materials | $ 1,271,915 | $ 647,149 | ||
Finished Goods | 785,348 | 429,855 | ||
Total Inventory | 2,057,263 | 1,077,004 | ||
Less Reserve | -40,000 | (5,660) | ||
Total Inventory (net of reserve) | $ 2,017,263 | $ 1,071,344 | ||
PROVISION_FOR_INCOME_TAXES_Tab
PROVISION FOR INCOME TAXES (Tables) | 12 Months Ended | |||
Dec. 31, 2014 | ||||
PROVISION FOR INCOME TAXES [Abstract] | ||||
Schedule of effective income tax rate reconciliation | ||||
For the Years Ended | ||||
December 31, | ||||
2014 | 2013 | |||
Income tax calculated at the | ||||
federal statutory rate | $ 377,425 | $ 43,582 | ||
Permanent items | 956,370 | -- | ||
Foreign rate differential | -32,013 | -- | ||
Foreign tax credits | -48,073 | -- | ||
Inventory reserve | -- | 2,111 | ||
State tax (benefit) expense | 196,052 | 3,506 | ||
Other | -- | (34,525) | ||
Employee expenses | -- | (513) | ||
Change in valuation allowance | -1,362,302 | (14,161) | ||
Total provision for income taxes | $ 87,459 | $ -- | ||
Schedule of the components of deferred tax Assets | ||||
December 31, | ||||
2014 | 2013 | |||
Net operating loss carryforwards | $ 6,895,359 | $ 8,936,129 | ||
Accrued commissions | 788,690 | -- | ||
US federal credits | 107,891 | -- | ||
Charitable donations | 19,552 | 136 | ||
Inventory reserve | 89,212 | 66,287 | ||
Allowance for doubtful accounts | -- | 15,753 | ||
Employee accruals | 66,442 | 44,898 | ||
Depreciation and amortization | -444,029 | -177,783 | ||
Valuation allowance | (7,523,117) | -8,885,420 | ||
Net deferred taxes | $ -- | $ -- | ||
ORGANIZATION_AND_SUMMARY_OF_SI2
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Detail Textuals) (USD $) | 0 Months Ended | 1 Months Ended | 12 Months Ended | |||
Jan. 13, 2006 | Nov. 30, 1999 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2006 | 24-May-00 | |
Finite-Lived Intangible Assets [Line Items] | ||||||
Amortization Period (Estimated Lives) | 60 months | |||||
Business acquisition, price of intangible assets | $43,294 | |||||
Business acquisition, price of assets | 283,800 | |||||
Business acquisition, amount of assumed leases | 14,500 | |||||
Cash acquired through merger | 150,000 | |||||
Note receivable acquired through merger | 650,000 | |||||
Number of shares issued due to merger | 6,000,000 | |||||
Post split shares of common stock issued in business acquisition | 1,266,667 | |||||
Ownership percentage | 23.00% | 77.00% | ||||
Reverse stock split | 15:01 | |||||
Member advances | 381,500 | |||||
Allowance for uncollectable advances | 0 | 0 | ||||
Advertising expense | 84,843 | 18,728 | ||||
Recognition of Revenue | ||||||
Maximum annual sales returns, expressed as a percentage of annual revenues | 2.50% | 2.50% | ||||
Accounts Receivable | ||||||
Allowance for doubtful accounts | 0 | 29,234 | ||||
Earnings (Loss) Per Share | ||||||
Potentially dilutive shares excluded from computation of diluted net loss per share | 797,184 | 1,099,975 | ||||
Restricted cash | $589,449 | |||||
Patents | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Amortization Period (Estimated Lives) | 7 years | |||||
Trademarks | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Amortization Period (Estimated Lives) | 10 years | |||||
Customer Base | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Amortization Period (Estimated Lives) | 10 years |
ORGANIZATION_AND_SUMMARY_OF_SI3
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Detail Textuals 1) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Property, Plant and Equipment [Line Items] | ||
Depreciation expense | $284,694 | $62,325 |
INVENTORY [Abstract] | ||
Allowance for obsolete inventory | 40,000 | 5,660 |
CONCENTRATION OF RISK [Abstract] | ||
FDIC Insured limit | 250,000 | |
Deferred Revenue [Abstract] | ||
Deferred Revenue | $171,885 | $405,841 |
Leasehold improvements | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, estimated useful life | 3 years | |
Leasehold improvements | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, estimated useful life | 7 years |
RESTRICTED_CASH_Detail_Textual
RESTRICTED CASH (Detail Textuals) (USD $) | Dec. 31, 2014 |
Restricted Cash and Investments, Current [Abstract] | |
Restricted cash | $589,449 |
PROPERTY_AND_EQUIPMENT_Summary
PROPERTY AND EQUIPMENT - Summary of property and equipment (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Property, Plant and Equipment [Line Items] | ||
Total Fixed Assets | $4,712,504 | $2,318,261 |
Accumulated depreciation | -2,147,501 | -1,857,137 |
Property and equipment, net | 2,565,003 | 461,124 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total Fixed Assets | 571,639 | 57,846 |
Office furniture & fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Total Fixed Assets | 761,557 | 179,478 |
Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total Fixed Assets | 597,362 | 458,414 |
Vehicles | ||
Property, Plant and Equipment [Line Items] | ||
Total Fixed Assets | 72,154 | 56,548 |
Computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total Fixed Assets | 929,284 | 653,520 |
Computer software | ||
Property, Plant and Equipment [Line Items] | ||
Total Fixed Assets | $1,780,508 | $912,455 |
PROPERTY_AND_EQUIPMENT_Detail_
PROPERTY AND EQUIPMENT (Detail Textuals) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
PROPERTY AND EQUIPMENT [Abstract] | ||
Depreciation expense | $284,694 | $62,325 |
ACCRUED_EXPENSES_Accrued_expen
ACCRUED EXPENSES - Accrued expenses (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
ACCRUED EXPENSES [Abstract] | ||
Accrued employee benefits | $185,111 | $115,172 |
Accrued taxes | 925,853 | 2,215,648 |
Accrued member commissions | 2,748,565 | 727,624 |
Other accrued liabilities | 1,019,643 | 302,865 |
Total | $4,879,172 | $3,361,309 |
NOTES_PAYABLE_Longterm_liabili
NOTES PAYABLE - Long-term liabilities (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
NOTES PAYABLE [Abstract] | ||
Convertible notes payable, related parties | $922,478 | $922,478 |
Notes payable, related parties | 245,000 | 245,000 |
Notes payable, unrelated parties | 331,756 | 826,717 |
Note payable to financial institution bearing interest at 7%, principle and interest due monthly, matures August, 2019, secured by equipment | 17,220 | |
Less current portion of Notes Payable | -1,499,234 | -2,259 |
Total Long-Term Debt | $2,009,156 |
NOTES_PAYABLE_Schedule_of_Note
NOTES PAYABLE - Schedule of Notes Payable (Details 1) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Sep. 30, 2014 | Sep. 15, 2014 | |
Short-term Debt [Line Items] | |||
CONVERSION RATE PER SHARE | $0.20 | $1.07 | |
INTEREST RATE | 7.00% | ||
DUE DATE | 31-Aug-19 | ||
Related party | 12/9/2008 | |||
Short-term Debt [Line Items] | |||
NOTES PAYABLE | 485,000 | ||
ORIGINATION DATE | 9-Dec-08 | ||
INTEREST RATE | 10.00% | ||
Related party | 7/31/2009 | |||
Short-term Debt [Line Items] | |||
NOTES PAYABLE | 437,478 | ||
ORIGINATION DATE | 31-Jul-09 | ||
INTEREST RATE | 10.00% | ||
DUE DATE | 31-Dec-15 | ||
Convertible, Related party | 10/7/2010 | |||
Short-term Debt [Line Items] | |||
NOTES PAYABLE | 45,000 | ||
CONVERSION RATE PER SHARE | 0.15 | ||
ORIGINATION DATE | 7-Oct-10 | ||
INTEREST RATE | 14.00% | ||
DUE DATE | 31-Dec-15 | ||
Convertible, Related party | 1/19/2011 | |||
Short-term Debt [Line Items] | |||
NOTES PAYABLE | 200,000 | ||
CONVERSION RATE PER SHARE | 0.2 | ||
ORIGINATION DATE | 19-Jan-11 | ||
INTEREST RATE | 14.00% | ||
DUE DATE | 31-Dec-15 | ||
Convertible, Non-related | 3/14/11 | |||
Short-term Debt [Line Items] | |||
NOTES PAYABLE | 100,000 | ||
CONVERSION RATE PER SHARE | 0.2 | ||
ORIGINATION DATE | 14-Mar-11 | ||
INTEREST RATE | 14.00% | ||
DUE DATE | 31-Dec-15 | ||
Convertible, Non-related | 3/9/2010 | |||
Short-term Debt [Line Items] | |||
NOTES PAYABLE | 231,756 | ||
CONVERSION RATE PER SHARE | 0.2 | ||
ORIGINATION DATE | 9-Mar-10 | ||
INTEREST RATE | 15.00% | ||
DUE DATE | 31-Dec-15 |
COMMON_STOCK_Detail_Textuals
COMMON STOCK (Detail Textuals) (USD $) | 0 Months Ended | 1 Months Ended | 9 Months Ended | |
Sep. 15, 2014 | Jan. 29, 2014 | Jan. 30, 2014 | Sep. 30, 2014 | |
COMMON STOCK [Abstract] | ||||
Common stock issued for cash to a non-related party (in shares) | 1,000,000 | 1,000,000 | ||
Shares issued, price per share to a non-related party (in dollars per share) | $1 | $1 | ||
Convertible note original amount converted to common stock with a non-related party | $394,962 | |||
Accrued interest original amount converted to common stock with a non-related party | $126,962 | |||
Debt conversion, price per share | $1.07 | $0.20 | ||
Shares issued in conversion | 140,000 | 2,604,810 |
OPERATING_LEASES_Operating_lea
OPERATING LEASES - Operating leases (Details) (USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Ecuador Office | |
Operating Leased Assets [Line Items] | |
Start Date | 24-Feb-14 |
End Date | 24-Feb-16 |
Monthly rent | $672 |
Ecuador Warehouse | |
Operating Leased Assets [Line Items] | |
Start Date | 24-Feb-14 |
End Date | 24-Feb-16 |
Monthly rent | 122 |
Chile Office | |
Operating Leased Assets [Line Items] | |
Monthly rent | 679 |
Chile Warehouse | |
Operating Leased Assets [Line Items] | |
Monthly rent | 114 |
Columbia Office | |
Operating Leased Assets [Line Items] | |
Start Date | 15-Jul-13 |
End Date | 15-Jul-15 |
Monthly rent | 914 |
Costa Rica Office | |
Operating Leased Assets [Line Items] | |
Start Date | 1-Jun-12 |
End Date | 31-May-15 |
Monthly rent | 1,900 |
Mexico Office | |
Operating Leased Assets [Line Items] | |
Monthly rent | 1,805 |
Peru Office | |
Operating Leased Assets [Line Items] | |
Start Date | 1-Aug-14 |
End Date | 31-Jul-15 |
Monthly rent | 700 |
Japan Office | |
Operating Leased Assets [Line Items] | |
Start Date | 1-Oct-14 |
End Date | 30-Sep-16 |
Monthly rent | 2,104 |
Singapore Office | |
Operating Leased Assets [Line Items] | |
Start Date | 1-Sep-14 |
End Date | 28-Feb-15 |
Monthly rent | 3,553 |
Hong Kong Office | |
Operating Leased Assets [Line Items] | |
Start Date | 15-Aug-14 |
End Date | 14-Aug-17 |
Monthly rent | 12,466 |
Taiwan Office | |
Operating Leased Assets [Line Items] | |
Start Date | 29-Nov-14 |
End Date | 28-Nov-15 |
Monthly rent | 1,188 |
India Office | |
Operating Leased Assets [Line Items] | |
Start Date | 12-Aug-14 |
End Date | 31-Jul-23 |
Monthly rent | 4,574 |
US Headquarters | |
Operating Leased Assets [Line Items] | |
Start Date | 1-Mar-14 |
End Date | 28-Feb-19 |
Monthly rent | 36,467 |
US Office | |
Operating Leased Assets [Line Items] | |
Monthly rent | 8,750 |
US Warehouse | |
Operating Leased Assets [Line Items] | |
Start Date | 1-Jan-13 |
End Date | 31-Dec-20 |
Monthly rent | $6,936 |
OPERATING_LEASES_Total_Lease_C
OPERATING LEASES - Total Lease Commitments (Details 1) (USD $) | Dec. 31, 2014 |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |
2015 | $905,188 |
2016 | 767,315 |
2017 | 700,332 |
2018 | 628,829 |
2019 | 221,894 |
2020 | 146,923 |
Total | $3,370,481 |
INTANGIBLE_ASSETS_Summary_of_t
INTANGIBLE ASSETS - Summary of trademarks (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Finite-Lived Intangible Assets [Line Items] | ||
Less accumulated amortization | ($733,851) | ($641,507) |
Net intangible assets | 192,403 | 299,713 |
Customer Base | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | 855,900 | 855,900 |
Trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | $70,354 | $85,320 |
INTANGIBLE_ASSETS_estimated_am
INTANGIBLE ASSETS - estimated amortization (Detail 1) (USD $) | Dec. 31, 2014 |
INTANGIBLE ASSETS [Abstract] | |
2015 | $92,600 |
2016 | 92,600 |
2017 | 7,500 |
2018 | 7,500 |
2019 | $7,500 |
INTANGIBLE_ASSETS_Detail_Textu
INTANGIBLE ASSETS (Detail Textuals) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
INTANGIBLE ASSETS [Abstract] | ||
Trademark, patent and customer based amortization expense | $92,625 | $92,559 |
INVENTORIES_Summary_of_invento
INVENTORIES - Summary of inventories (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
INVENTORY [Abstract] | ||
Raw Materials | $1,271,915 | $647,149 |
Finished Goods | 785,348 | 429,855 |
Total Inventory | 2,057,263 | 1,077,004 |
Less Reserve | -40,000 | -5,660 |
Total Inventory (net of reserve) | $2,017,263 | $1,071,344 |
PROVISION_FOR_INCOME_TAXES_Pro
PROVISION FOR INCOME TAXES - Provision for income taxes (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Reconciliation | ||
Income tax calculated at the federal statutory rate | $377,425 | $43,582 |
Permanent items | 956,370 | |
Foreign rate differential | -32,013 | |
Foreign tax credits | -48,073 | |
Inventory reserve | 2,111 | |
State tax (benefit) expense | 196,052 | 3,506 |
Other | -34,525 | |
Employee expenses | -513 | |
Change in valuation allowance | -1,362,302 | -14,161 |
Total provision for income taxes | $87,459 |
PROVISION_FOR_INCOME_TAXES_Net
PROVISION FOR INCOME TAXES - Net deferred tax assets (Details 1) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Deferred Tax Assets, Net [Abstract] | ||
Net operating loss carryforwards | $6,895,359 | $8,936,129 |
Accrued commissions | 788,690 | |
US federal credits | 107,891 | |
Charitable donations | 19,552 | 136 |
Inventory reserve | 89,212 | 66,287 |
Allowance for doubtful accounts | 15,753 | |
Employee accruals | 66,442 | 44,898 |
Depreciation and amortization | -444,029 | -177,783 |
Valuation allowance | -7,523,117 | -8,885,420 |
Net deferred taxes |
PROVISION_FOR_INCOME_TAXES_Det
PROVISION FOR INCOME TAXES (Detail Textuals) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Operating Loss Carryforwards [Line Items] | ||
Statutory federal income tax rate | 34.00% | 34.00% |
U.S. federal | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carry forwards | 17,689,114 | |
Return-to-provision adjustments to deferred tax balances | 1,600,000 | |
State | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carry forwards | 17,471,893 | |
Return-to-provision adjustments to deferred tax balances | 1,600,000 |
EMPLOYEE_BENEFIT_PLAN_Detail_T
EMPLOYEE BENEFIT PLAN (Detail Textuals) (Employee benefit plan, USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Employee benefit plan | ||
Defined Contribution Plan Disclosure [Line Items] | ||
Description of defined contribution plan | This plan covers employees who are at least 21 years of age and have met a six-month service requirement. The Company makes a matching contribution equal to 100 percent of the first two percent of a participant's compensation that is contributed by the participant, and 50 percent of that deferral that exceeds two percent of the participant's compensation, not to exceed six percent of the participant's compensation, subject to the limits of ERISA. In addition, the Company may make a discretionary contribution based on earnings. The Company's matching contributions vest equally over a four year service period. | |
Minimum threshold limit of employee age | 21 years | |
Minimum threshold limit of employee service requirement | 6 months | |
Employer matching contribution, percent of Match | 100.00% | |
Employer matching contribution vesting period | 4 years | |
Contributions made by company to plan | $104,805 | $0 |
RECLASSIFACTION_OF_FINANCIAL_S1
RECLASSIFACTION OF FINANCIAL STATEMENT ACCOUNTS (Detail Textuals) (USD $) | 1 Months Ended |
Dec. 31, 2013 | |
Reclassification Of Financial Statement Accounts [Abstract] | |
Reclassified from accumulated other comprehensive income to additional paid in capital (APIC) | $70,561 |
CONCENTRATION_OF_RISK_Detail_T
CONCENTRATION OF RISK (Detail Textuals) (Suppliers) | 12 Months Ended |
Dec. 31, 2014 | |
Suppliers | |
Concentration Risk [Line Items] | |
Concentration Risk, Benchmark Description | The Company purchased two significant products from two separate independent suppliers during the years ended December 31, 2014 and 2013. |