Ourpets (OPCO) 10-Q 15 May 18 2018 Q1 Quarterly report Financial data

Document And Entity Information

Document And Entity Information - shares	3 Months Ended
	Mar. 31, 2018	Apr. 20, 2018
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2018
Document Fiscal Year Focus	2,018
Document Fiscal Period Focus	Q1
Entity Registrant Name	OURPETS CO
Entity Central Index Key	1,094,139
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Trading Symbol	OPCO
Entity Common Stock, Shares Outstanding		19,805,210

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)	Mar. 31, 2018	Dec. 31, 2017
CURRENT ASSETS
Cash and cash equivalents	$ 828,666	$ 522,170
Investments - Trading	970,655	993,911
Accounts receivable - trade, less allowance for doubtful accounts of $83,682	4,381,511	5,425,513
Inventories net of reserve	7,114,402	7,235,440
Prepaid expenses	968,027	1,000,679
Total current assets	14,263,261	15,177,713
PROPERTY AND EQUIPMENT
Computers and office equipment	1,051,994	1,049,019
Warehouse equipment	740,039	740,039
Leasehold improvements	323,551	317,057
Tooling	5,292,659	5,286,599
Construction in progress	160,479	155,410
Total	7,568,722	7,548,124
Less accumulated depreciation	5,696,585	5,550,938
Net property and equipment	1,872,137	1,997,186
OTHER ASSETS
Amortizable Intangible Assets, less amortization of $624,155 and $608,973	409,531	421,078
Intangible Assets	477,328	477,328
Goodwill	67,511	67,511
Deposits and other assets	25,900	25,900
Total other assets	980,270	991,817
Total assets	17,115,668	18,166,716
CURRENT LIABILITIES
Current maturities of long-term debt	560,241	561,723
Accounts payable - trade	867,771	792,122
Other accrued expenses	422,468	691,293
Total current liabilities	1,850,480	2,045,138
LONG-TERM LIABILITIES
Long-term debt - less current portion above	1,028,258	1,172,374
Revolving Line of Credit	1,073,542	1,777,907
Deferred Income Taxes	183,740	325,223
Total long term liabilities	2,285,540	3,275,504
Total liabilities	4,136,020	5,320,642
STOCKHOLDERS' EQUITY
COMMON STOCK No par value; 50,000,000 shares authorized, 19,805,210 shares issued and outstanding at March 31, 2018 and December 31, 2017	6,323,896	6,323,896
CONVERTIBLE PREFERRED STOCK No par value; convertible into Common Stock at the rate of 10 common shares for each preferred share; 4,825,000 shares authorized, 63,500 shares issued and outstanding at March 31, 2018 and December 31, 2017	579,850	579,850
PAID-IN CAPITAL	127,283	121,283
ACCUMULATED EARNINGS	5,948,619	5,821,045
Total stockholders' equity	12,979,648	12,846,074
Total liabilities and stockholders' equity	$ 17,115,668	$ 18,166,716

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Class of Stock [Line Items]
Accounts receivable - trade, allowance for doubtful accounts	$ 83,682	$ 83,682
Amortization	$ 624,155	$ 608,973
COMMON STOCK, par value per share	$ 0	$ 0
COMMON STOCK, shares authorized	50,000,000	50,000,000
COMMON STOCK, shares issued	19,805,210	19,805,210
COMMON STOCK, shares outstanding	19,805,210	19,805,210
Convertible Preferred Stock [Member]
Class of Stock [Line Items]
CONVERTIBLE PREFERRED STOCK, par or stated value per share	$ 0	$ 0
CONVERTIBLE PREFERRED STOCK, convertible into Common stock for each preferred stock rate	10	10
CONVERTIBLE PREFERRED STOCK, shares authorized	4,825,000	4,825,000
CONVERTIBLE PREFERRED STOCK, shares issued	63,500	63,500
CONVERTIBLE PREFERRED STOCK, shares outstanding	63,500	63,500

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Net revenue	$ 6,107,381	$ 6,536,810
Cost of goods sold	4,457,838	4,412,042
Gross profit on sales	1,649,543	2,124,768
Selling, general and administrative expenses	1,577,533	1,643,880
Income from operations	72,010	480,888
Other (income) and expense, net	28,329	9,952
Interest expense	26,339	21,846
Income before income taxes	17,342	449,090
Income tax expense (benefit)	(110,232)	65,713
Net income	$ 127,574	$ 383,377
Basic Earnings Per Common Share After Dividend Requirements For Preferred Stock	$ 0.01	$ 0.02
Fully Diluted Earnings Per Common Share After Dividend Requirements for Preferred Stock	$ 0.01	$ 0.02
Weighted average number of common shares outstanding used to calculate basic earnings per share	19,805,210	17,808,569
Weighted average number of common and equvalent shares outstanding used to calculate diluted earnings per share	20,020,559	19,698,390

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY - 3 months ended Mar. 31, 2018 - USD ($)	Total	Preferred Stock [Member]	Common Stock [Member]	Paid-In Capital [Member]	Accumulated Earnings (Deficit) [Member]
Balance at Dec. 31, 2017	$ 12,846,074	$ 579,850	$ 6,323,896	$ 121,283	$ 5,821,045
Balance (in shares) at Dec. 31, 2017		63,500	19,805,210
Net Income	127,574	$ 0	$ 0		127,574
Stock-Based compensation expense	6,000	0	0	6,000	0
Balance at Mar. 31, 2018	$ 12,979,648	$ 579,850	$ 6,323,896	$ 127,283	$ 5,948,619
Balance (in shares) at Mar. 31, 2018		63,500	19,805,210

CONDENSED CONSOLIDATED STATEME6

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$ 127,574	$ 383,377
Adjustments to reconcile net income to net cash provided by operating activities:
Unrealized loss on investments	25,312	0
Loss on Fixed Assets	0	995
Depreciation expense	145,647	124,068
Amortization expense	15,182	14,653
Stock option expense	6,000	6,000
(Increase) decrease in assets:
Accounts receivable - trade	1,044,002	823,956
Inventories	121,038	(1,013,345)
Deposits	0	20,874
Prepaid expenses	32,652	(49,643)
Amortizable Intangible Asset Additions	(3,635)	(19,565)
Increase (decrease) in liabilities:
Accounts payable - trade	75,649	759,404
Accrued expenses	(268,825)	(65,304)
Deferred tax liabilities	(141,483)	18,270
Net cash provided by operating activities	1,179,113	1,003,740
CASH FLOWS FROM INVESTING ACTIVITIES
Net Change in Investments	(2,056)	0
Sale of property and equipment	0	4,000
Acquisition of property and equipment	(20,598)	(120,750)
Net cash used in investing activities	(22,654)	(116,750)
CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments on long-term debt	(145,598)	(60,757)
Net payment on bank line of credit	(704,365)	(218,474)
Net cash used in financing activities	(849,963)	(279,231)
Net increase in cash	306,496	607,759
CASH AT BEGINNING OF PERIOD	522,170	127,979
CASH AT END OF PERIOD	828,666	735,738
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest paid	27,204	26,354
SUPPLEMENTAL DISCLOSURE OF NON CASH TRANSACTIONS
Equipment obtained through capital lease	$ 0	$ 105,300

ORGANIZATION AND NATURE OF OPER

ORGANIZATION AND NATURE OF OPERATIONS	3 Months Ended
	Mar. 31, 2018
ORGANIZATION AND NATURE OF OPERATIONS [Abstract]
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]	ORGANIZATION AND NATURE OF OPERATIONS OurPet’s Company (“OurPet’s” or the “Company”) is a Colorado corporation incorporated in 1998 that operates out of Fairport Harbor, Ohio. The Company markets proprietary products to the retail pet business under the OurPet’s ® ® 51

BASIS OF PRESENTATION

BASIS OF PRESENTATION	3 Months Ended
	Mar. 31, 2018
BASIS OF PRESENTATION [Abstract]
Basis of Accounting [Text Block]	BASIS OF PRESENTATION OurPet’s follows accounting standards set by the Financial Accounting Standards Board (“FASB”). FASB sets generally accepted accounting principles to ensure the consistent reporting of the financial condition, results of operations, and cash flows. The accompanying unaudited condensed consolidated financial statements for the three-month periods ended March 31, 2018, and March 31, 2017, have been prepared in accordance with such generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q, including the requirements of Article 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by United States generally accepted accounting principles for complete financial statements. They include the accounts of OurPet’s and its Original Subsidiaries. The December 31, 2017, Condensed Consolidated Balance Sheet information contained in this Form 10-Q was derived from the 2017 audited consolidated financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States for an annual report. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the financial position, results of operations, and cash flows for the interim periods presented have been included. All intercompany transactions have been eliminated. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes for the fiscal year ended December 31, 2017, that are included in the Company’s Form 10-K filed with the Securities and Exchange Commission on April 2, 2018. Operating results for the three months ended March 31, 2018, are not necessarily indicative of the results that may be expected for future fiscal periods.

USE OF ESTIMATES

USE OF ESTIMATES	3 Months Ended
	Mar. 31, 2018
USE OF ESTIMATES [Abstract]
Use Of Estimates [Text Block]	USE OF ESTIMATES The preparation of condensed consolidated financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

INVENTORIES

INVENTORIES	3 Months Ended
	Mar. 31, 2018
INVENTORIES [Abstract]
Inventory Disclosure [Text Block]	INVENTORIES 2018 2017 Finished Goods $ 5,928,923 $ 6,963,404 Components, packaging and work in process 1,399,320 1,271,459 Inventory Reserve (213,841) (210,982) Total $ 7,114,402 $ 8,023,881 During the three months ended March 31, 2018, the Company recorded additional inventory reserve charges of $ 29,268 2018 2017 Beginning Balance $ 219,484 $ 213,013 Increases to reserve 29,268 21,213 Write offs against reserve (34,911) (23,244) Ending Balance $ 213,841 $ 210,982 Monthly accruals are made to account for obsolete and excess inventory. Quarterly reviews are also performed to determine if additional end of quarter adjustments are needed. It was determined that no additional adjustment was needed for the end of the first quarter of 2018. The Company will continue its policy of regularly reviewing inventory quantities on hand based on related service levels and functionality. Carrying cost will be reduced to net realizable value for inventories in which their cost exceeds their utility due to changes in marketing and sales strategies, obsolescence, changes in price levels, or other causes. Furthermore, if future demand or market conditions for the Company’s products are less favorable than forecast, or if unforeseen technological changes negatively impact the utility of certain products or component inventory, the Company may be required to record additional inventory reserves, which would negatively affect its results of operations in the period when the inventory reserve adjustments are recorded. Once established, write downs of inventories are considered permanent adjustments to the cost basis of the obsolete or excess inventories.

ACCOUNTS RECEIVABLE

ACCOUNTS RECEIVABLE	3 Months Ended
	Mar. 31, 2018
ACCOUNTS RECEIVABLE [Abstract]
Loans, Notes, Trade and Other Receivables Disclosure [Text Block]	ACCOUNTS RECEIVABLE Accounts receivable have been adjusted for all known uncollectible accounts. An allowance for possible bad debts was established on March 31, 2018, and December 31, 2017, in the amount of $ 83,682

INVESTMENTS

INVESTMENTS	3 Months Ended
	Mar. 31, 2018
INVESTMENT [Abstract]
Investment [Text Block]	INVESTMENTS Investment securities, which consist of equity securities, are stated at fair value. The fair value is determined by quoted market prices and considered to be level one of the fair value hierarchy. The Company has classified and accounted for its short-term investments as trading securities as the Company’s intention is to sell them in the short term for a profit. As a result, the Company classifies its short-term investments within current assets in the consolidated balance sheets. Any unrealized holding gain or loss is reported as part of net income. As of March 31, 2018, the unrealized loss was $ 33,378

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS	3 Months Ended
	Mar. 31, 2018
Related Party Transactions [Abstract]
Related Party Transactions Disclosure [Text Block]	RELATED PARTY TRANSACTIONS We lease a 64,000 26,000 We first entered into a 10 36,000 10 27,250 29,013 30,827 32,587 34,347 30,827 10 We entered into a second lease with Senk Properties for our facility in Mentor, Ohio, on December 30, 2011. Payments for this lease started on January 1, 2012 8,542 9,083 9,732 10,056 10,597 10,813 10,056 Lease expenses resulting from the foregoing agreements were $ 121,920 On January 15, 2007, and November 25, 2008, the Company entered into agreements with Nottingham-Spirk Design Associates, Inc. (“NSDA”). One of the principals of NSDA is John W. Spirk, Jr., a member of the Company’s board of directors and a stockholder. NSDA indirectly owns shares of the Company’s common stock through its ownership in Pet Zone Products, Ltd., a significant stockholder of the Company. The agreements address the invoicing and payment of NSDA’s fees and expenses related to the development of certain products on behalf of the Company. NSDA is no longer providing services to the Company. The Company has been invoiced $ 781,061 498,127 50,000 50,454 232,934 2,084 In December 2016, the Company established two new wholly owned subsidiaries. The first is named Series OP and is an insurance company organized under Delaware law. It participates in a group insurance program to insure against certain business losses. The second subsidiary, OurPet’s Disc, Inc. is an Ohio corporation that participates in certain export transactions of goods that are eligible for export subsidies under U.S. tax law.

REVENUE RECOGNITION

REVENUE RECOGNITION	3 Months Ended
	Mar. 31, 2018
REVENUE RECOGNITION [Abstract]
Revenue Recognition Disclosure [Text Block]	REVENUE RECOGNITION On January 1, 2018, we adopted ASU No. 2014-09, "Revenue from Contracts with Customers" and the related amendments ("ASC 606" or "the new revenue standard") using the modified retrospective method. The adoption of ASC 606 had no impact on total reported revenues, costs and net income for the first quarter of 2018. The Company’s revenues result from the sale of goods and reflect the consideration to which the Company expects to be entitled. The Company records revenue based on a five-step model in accordance with Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers ("ASC 606"). For its customer contracts, the Company identifies the performance obligations (goods), determines the transaction price, allocates the contract transaction price to the performance obligations, and recognizes the revenue when (or as) the performance obligation is transferred to the customer. A good is transferred when (or as) the customer obtains control of that good. Substantially all of the Company’s revenues are recorded at a point in time from the sale of tangible products. ASC 606 defines contracts as written, oral and through customary business practice. Under this definition, the Company considers contracts to be created at the time an order to purchase product is agreed upon regardless of whether or not there is a written contract. When determining whether the customer has obtained control of the goods or services, we consider any future performance obligations. Generally, there is no post-shipment obligation on product sold other than warranty obligations in the normal and ordinary course of business. In the event significant post-shipment obligations were to exist, revenue recognition would be deferred until the Company has substantially accomplished what it must do to be entitled to the benefits represented by the revenues. With respect to revenue from product sales, revenue is recognized only upon shipment of products to customers. The Company derives its revenues from the sale of proprietary pet products under the OurPet’s®, Pet Zone®, Flappy®, SmartScoop®, Ecopure Naturals®, Play-N-Squeak®, Durapet®, Clipnosis®, Go! Cat!Go!®, Festiva®, and Cosmic Pet™ brand names. Net revenue is comprised of gross sales less discounts given to distributors, returns and allowances. For the three months ended March 31, 2018, 36.1 1,538,082 For the three months ended March 31, 2017, 33.3 1,510,781 669,643 23.1 10.2

STOCK OPTIONS

STOCK OPTIONS	3 Months Ended
	Mar. 31, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]	STOCK OPTIONS “Share-Based Payment” standards require the grant-date value of all share-based payment awards that are expected to vest, including employee share options, to be recognized as employee compensation expense over the requisite service period. In both 2018 and 2017, the amount of compensation expense recognized as a result of stock options was $ 6,000 On May 2, 2008, our Board of Directors approved the 2008 Plan which was approved by the shareholders on May 30, 2008. On February 13, 2012, the board of directors, by unanimous written consent, approved a second amendment to the 2008 Stock Option Plan (the “Plan”) whereby the maximum number of shares reserved and available for issuance under the plan was increased by 750,000 1,000,000 1,750,000 On April 14, 2017, the Board approved the 2017 Plan which was subsequently approved by the shareholders on June 5, 2017. The 2017 Plan superseded the 2008 Stock Option Plan, as amended. No further options will be granted under the 2008 Plan. The terms of the 2017 Plan are the same as the terms of the 2008 Stock Option Plan and is administered by our Compensation Committee.

NET INCOME PER COMMON SHARE

NET INCOME PER COMMON SHARE	3 Months Ended
	Mar. 31, 2018
Earnings Per Share [Abstract]
Earnings Per Share [Text Block]	NET INCOME PER COMMON SHARE Basic and diluted net income per common share is based on the net income attributable to common stockholders after preferred stock dividend requirements for the period, divided by the weighted average number of common and equivalent dilutive shares outstanding during the period. Potential common shares whose effect would be anti-dilutive have not been included. As of March 31, 2018, common shares that are or could be potentially dilutive included: 450,833 0.60 1.86 143,052 0.54 0.59 635,000 1.00 527,167 0.41 1.21 827,682 0.41 0.59 635,000 1.00 1,236,160 0.70

INCOME TAXES

INCOME TAXES	3 Months Ended
	Mar. 31, 2018
Income Tax Disclosure [Abstract]
Income Tax Disclosure [Text Block]	INCOME TAXES On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the "TCJA"). The TCJA makes broad and complex changes to the U.S. tax code. On the same date, the SEC staff issued Staff Accounting Bulletin ("SAB") 118 which provides guidance on accounting for the tax effects of the TCJA. SAB 118 provides a measurement period that should not extend beyond one year from the TCJA enactment date for companies to complete the accounting under ASC 740. In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the TCJA for which the accounting under ASC 740 is complete. Therefore, in quarter one of 2018, the Company revalued its deferred tax liabilities at the new revised federal corporate tax rate of 21 120,000 The Tax Act contains a number of additional provisions which may impact the Company in future years. However, since the Tax Act was recently finalized and ongoing guidance and accounting interpretation is expected over the next 12 months, the Company has not yet elected any changes to accounting policies and the Company’s analysis is ongoing. Provisional accounting impacts may change in future reporting periods until the accounting analysis is finalized, which will occur no later than one year from the date the Tax Act was enacted. During the first three months of 2018, the Company also decreased its deferred tax liabilities by another approximately $ 20,000 The estimated federal income tax expense payable for the three months ended March 31, 2018, was $ 28,631 2,620 During the first three months of 2017, the Company increased its deferred tax liabilities by approximately $ 18,000 362,753 381,023 44,808 2,636 The Company follows provisions of uncertain tax positions as addressed in FASB Accounting Standards Codification 740-10-65-1. Based on management’s evaluation, the Company has no position at March 31, 2018, or December 31, 2017, for which there is uncertainty about deductibility. The Company is no longer subject to U.S. Federal and state income tax examinations by taxing authorities for years before December 31, 2015.

FAIR VALUE OF FINANCIAL INSTRUM

FAIR VALUE OF FINANCIAL INSTRUMENTS	3 Months Ended
	Mar. 31, 2018
FAIR VALUE OF FINANCIAL INSTRUMENTS [Abstract]
Fair Value Disclosures [Text Block]	FAIR VALUE OF FINANCIAL INSTRUMENTS Fair value estimates discussed herein are based on certain market assumptions and pertinent information available to management as of December 31, 2017, and March 31, 2018. A fair value hierarchy that prioritizes the inputs used to measure fair value and requires fair value measurements to be categorized based on the observability of those inputs has been established by the applicable accounting guidance. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 inputs) and the lowest priority to unobservable inputs (Level 3 inputs). The respective carrying value of certain balance sheet financial instruments approximate their fair values and are classified within level 1 of the fair value hierarchy. These financial instruments include cash and cash equivalents, investments, accounts receivable, accounts payable, and accrued expenses. The fair value of the Company’s long-term debt is estimated based upon the quoted market prices for the same or similar issues or on the current rates offered to the Company for debt of the same remaining maturities. The carrying value approximates the fair value of the debt.

PROFESSIONAL EMPLOYER ORGANIZAT

PROFESSIONAL EMPLOYER ORGANIZATION	3 Months Ended
	Mar. 31, 2018
Professional Employer Organization [Abstract]
Professional Employer Organization [Text Block]	PROFESSIONAL EMPLOYER ORGANIZATION The Company contracts with a Professional Employer Organization (“PEO”) which co-employs the Company’s employees. The PEO and the Company share and allocate responsibilities and liabilities. The PEO assumes much of the responsibilities and liabilities for the business of employment such as risk management, human resources (“HR”) management, benefits administration, workers compensation, payroll and payroll tax compliance. The Company retains the responsibility for the hiring, firing and managing its employees and operations. The purpose of the Company’s contracting with a PEO was to strengthen the Company’s HR functions and provide its employees with a wider range of benefits at more affordable prices.

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	3 Months Ended
	Mar. 31, 2018
Subsequent Events [Abstract]
Subsequent Events [Text Block]	SUBSEQUENT EVENTS The Company has performed an evaluation of subsequent events and no events were identified that would require adjustment or disclosure in the condensed consolidated financial statements.

RECENT ACCOUNTING PRONOUNCEMENT

RECENT ACCOUNTING PRONOUNCEMENTS	3 Months Ended
	Mar. 31, 2018
Accounting Changes and Error Corrections [Abstract]
Accounting Changes and Error Corrections [Text Block]	RECENT ACCOUNTING PRONOUNCEMENTS Adoption of new accounting standards On January 1, 2018, we adopted ASU No. 2014-09, "Revenue from Contracts with Customers" and the related amendments ("ASC 606" or "the new revenue standard") using the modified retrospective method. The adoption of ASC 606 had no impact on total reported revenues, costs and net income for the first quarter of 2018. In May 2017, the FASB issued ASU 2017-09, “Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting.” The FASB issued the guidance to provide clarity as to when modification accounting should be applied when there is a change to the terms or conditions of a share-based payment award in order to prevent diversity in practice. The guidance will be applied prospectively for annual periods and interim periods beginning after December 15, 2017. We adopted this guidance effective January 1, 2018. The adoption of this guidance did not have a material impact on our financial position, results of operations, and disclosures. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230), which adds and/or clarifies guidance on the classification of certain cash receipts and payments in the statement of cash flows. The new guidance is intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. This ASU is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The adoption of the ASU did not have a significant impact to the designations of operating, investing and financing activities on the company's Condensed Consolidated Statements of Cash Flows. New accounting standards issued but not yet adopted In January 2017, the FASB issued ASU 2017-04, “Simplifying the Test for Goodwill Impairment.” The standard eliminates step two in the current two-step impairment test under ASC 350. Under the new standard, a goodwill impairment will be recorded for any excess of a reporting unit’s carrying value over its fair value. A prospective transition approach is required. The standard is effective for annual and interim reporting periods beginning after December 15, 2019, with early adoption permitted for annual and interim goodwill impairment testing dates after January 1, 2017. We are currently evaluating the impact the adoption of this standard will have on our consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” This ASU requires measurement and recognition of expected versus incurred credit losses for financial assets held. ASU 2016-13 is effective for the Company in our first quarter of fiscal year 2020 with early adoption permitted beginning in the first quarter of fiscal year 2019. We are currently evaluating the impact the adoption of this standard will have on our consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” This update revises an entity’s accounting for operating leases by a lessee, among other changes, and requires a lessee to recognize a liability to make lease payments and an asset representing its right to use the underlying asset for the lease term in the statement of financial position. The distinction between finance and operating leases has not changed and the update does not significantly change the effect of finance and operating leases on the statement of cash flows. Additionally, this update requires both qualitative and specific quantitative disclosures. This update is effective for the first interim and annual periods beginning after December 15, 2018, with early adoption permitted. At adoption, this update will be applied using a modified retrospective approach. While, the Company is currently evaluating the impact of adopting this new standard, the Company expects the adoption of ASU 2016-02 may have a material impact on its consolidated financial statements related to the recognition of new “right of use” assets and lease liabilities for its facility operating leases on its consolidated financial statements.

INVENTORIES (Tables)

INVENTORIES (Tables)	3 Months Ended
	Mar. 31, 2018
INVENTORIES [Abstract]
Schedule of Inventory, Current [Table Text Block]	2018 2017 Finished Goods $ 5,928,923 $ 6,963,404 Components, packaging and work in process 1,399,320 1,271,459 Inventory Reserve (213,841) (210,982) Total $ 7,114,402 $ 8,023,881
Schedule of Inventory Reserves [Table Text Block]	Changes to the inventory reserve during 2018 and 2017 are shown below: 2018 2017 Beginning Balance $ 219,484 $ 213,013 Increases to reserve 29,268 21,213 Write offs against reserve (34,911) (23,244) Ending Balance $ 213,841 $ 210,982

ORGANIZATION AND NATURE OF OP23

ORGANIZATION AND NATURE OF OPERATIONS (Details Textual)	3 Months Ended
	Mar. 31, 2018
Manufacturing Products Sale Percentage	51.00%

INVENTORIES (Schedule of Invent

INVENTORIES (Schedule of Inventories) (Details) - USD ($)	Mar. 31, 2018	Dec. 31, 2017	Mar. 31, 2017	Dec. 31, 2016
Inventory [Line Items]
Finished Goods	$ 5,928,923		$ 6,963,404
Components, packaging and work in process	1,399,320		1,271,459
Inventory Reserve	(213,841)	$ (219,484)	(210,982)	$ (213,013)
Total	$ 7,114,402	$ 7,235,440	$ 8,023,881

INVENTORIES (Schedule of Change

INVENTORIES (Schedule of Changes to Inventory Reserve) (Details) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Inventory [Line Items]
Beginning Balance	$ 219,484	$ 213,013
Increases to reserve	29,268	21,213
Write offs against reserve	(34,911)	(23,244)
Ending Balance	$ 213,841	$ 210,982

INVENTORIES (Details Textual )

INVENTORIES (Details Textual )	3 Months Ended
	Mar. 31, 2018USD ($)
Inventory [Line Items]
Additional Inventory Reserve Charges	$ 29,268

ACCOUNTS RECEIVABLE (Details Te

ACCOUNTS RECEIVABLE (Details Textual) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Accounts receivable - trade, allowance for doubtful accounts	$ 83,682	$ 83,682

INVESTMENTS (Details Textual)

INVESTMENTS (Details Textual) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Unrealized Gain (Loss) on Investments	$ (25,312)	$ 0

RELATED PARTY TRANSACTIONS (Det

RELATED PARTY TRANSACTIONS (Details Textual)	Jun. 01, 2007USD ($)ft²	Dec. 30, 2011USD ($)	Mar. 31, 2018USD ($)ft²shares
Related Party Transaction [Line Items]
Operating Leases, Rent Expense, Net, Total			$ 121,920
Affiliated Entity [Member]
Related Party Transaction [Line Items]
Related Party Transaction, Amounts of Transaction			781,061
Payments to Suppliers			498,127
Share-based Goods and Nonemployee Services Transaction, Capitalized Cost			$ 50,000
Share-based Goods and Nonemployee Services Transaction, Quantity of Securities Issued | shares			50,454
Due to Related Parties			$ 232,934
Related Party Fees Accrued			2,084
SENK Properties, First Lease Agreement [Member]
Related Party Transaction [Line Items]
Square Footage Of Leased Office Space | ft²	36,000
Lease Term	10 years
SENK Properties, First Lease Agreement [Member] | Scenario One [Member]
Related Party Transaction [Line Items]
Lease Agreement Monthly Payment			$ 30,827
Lease Extension Period			10 years
SENK Properties, Second Lease Agreement [Member]
Related Party Transaction [Line Items]
Lease Agreement Monthly Payment			$ 10,056
SENK Properties, Second Lease Agreement [Member] | Scenario Two [Member]
Related Party Transaction [Line Items]
Lease Extension Period			10 years
Agreement Entry Date		Jan. 1, 2012
Period One [Member] | SENK Properties, First Lease Agreement [Member] | Scenario One [Member]
Related Party Transaction [Line Items]
Lease Agreement Monthly Payment	$ 27,250
Period One [Member] | SENK Properties, Second Lease Agreement [Member]
Related Party Transaction [Line Items]
Lease Agreement Monthly Payment		$ 8,542
Period Three [Member] | SENK Properties, First Lease Agreement [Member] | Scenario One [Member]
Related Party Transaction [Line Items]
Lease Agreement Monthly Payment	29,013
Period Three [Member] | SENK Properties, Second Lease Agreement [Member]
Related Party Transaction [Line Items]
Lease Agreement Monthly Payment		9,083
Period Five [Member] | SENK Properties, First Lease Agreement [Member] | Scenario One [Member]
Related Party Transaction [Line Items]
Lease Agreement Monthly Payment	30,827
Period Five [Member] | SENK Properties, Second Lease Agreement [Member]
Related Party Transaction [Line Items]
Lease Agreement Monthly Payment		9,732
Period Seven [Member] | SENK Properties, Second Lease Agreement [Member]
Related Party Transaction [Line Items]
Lease Agreement Monthly Payment		10,056
Period Eight [Member] | SENK Properties, Second Lease Agreement [Member]
Related Party Transaction [Line Items]
Lease Agreement Monthly Payment		10,597
Period Ten [Member] | SENK Properties, Second Lease Agreement [Member]
Related Party Transaction [Line Items]
Lease Agreement Monthly Payment		$ 10,813
Thereafter [Member]
Related Party Transaction [Line Items]
Lease Agreement Monthly Payment	32,587
Thereafter [Member] | SENK Properties, First Lease Agreement [Member] | Scenario One [Member]
Related Party Transaction [Line Items]
Lease Agreement Monthly Payment	$ 34,347
Fairport Harbor [Member] | Senk Properties Llc [Member]
Related Party Transaction [Line Items]
Square Footage Of Leased Office Space | ft²			64,000
Mentor [Member] | Senk Properties Llc [Member]
Related Party Transaction [Line Items]
Square Footage Of Leased Office Space | ft²			26,000

REVENUE RECOGNITION (Details Te

REVENUE RECOGNITION (Details Textual) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Two Major Customer [Member] | Sales Revenue, Net [Member]
Concentration Risk, Percentage	36.10%	33.30%
Major Customer Two [Member]
Revenues	$ 663,436	$ 669,643
Major Customer Two [Member] | Sales Revenue, Net [Member]
Concentration Risk, Percentage	10.90%	10.20%
Major Customer One [Member]
Revenues	$ 1,538,082	$ 1,510,781
Major Customer One [Member] | Sales Revenue, Net [Member]
Concentration Risk, Percentage	25.20%	23.10%

STOCK OPTIONS (Details Textual)

STOCK OPTIONS (Details Textual) - USD ($)	Feb. 13, 2012	Mar. 31, 2018	Mar. 31, 2017
Allocated Share-based Compensation Expense		$ 6,000	$ 6,000
2008 Stock Option Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized	750,000
2008 Stock Option Plan [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized	1,000,000
2008 Stock Option Plan [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized	1,750,000

NET INCOME PER COMMON SHARE (De

NET INCOME PER COMMON SHARE (Details Textual) - $ / shares	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Potentially dilutive options, minimum exercise price	$ 0.54	$ 0.41
Potentially dilutive options, maximum exercise price	$ 0.59	$ 0.59
Potentially dilutive stock options	143,052	827,682
Series A Preferred Stock [Member]
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Potentially dilutive shares not included in computation of diluted earning per share	635,000	635,000
Preferred stock, conversion rate	$ 1	$ 1
Series B Preferred Stock [Member]
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Potentially dilutive shares not included in computation of diluted earning per share		1,236,160
Preferred stock, conversion rate		$ 0.70
Stock Options [Member]
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Potentially dilutive options, minimum exercise price	0.60	0.41
Potentially dilutive options, maximum exercise price	$ 1.86	$ 1.21
Potentially dilutive stock options	450,833	527,167

INCOME TAXES (Details Textual)

INCOME TAXES (Details Textual) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2016
Income Tax Disclosure [Line Items]
Increase (Decrease) in Deferred Liabilities, Total	$ 20,000	$ 18,000
Local Income Tax Expense Payable	2,620	2,636
Federal Income Tax Expense Payable	28,631	44,808
Deferred Tax Liabilities, Net		$ 381,023	$ 362,753
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Amount	$ 120,000
Scenario, Plan [Member]
Income Tax Disclosure [Line Items]
Statutory rate used	21.00%